Alan von Altendorf

Four Reasons We're Headed Even Higher

I like Tyler Durden's take, published today: "The only entities left to speculate amongst each other are a few computers and ever decreasing numbers of degenerate gamblers."

BAC: Where Are the Damn Cops?

WSJ: BofA sold a block of 825 million shares for $10 apiece
SEC filing: "sale to be privately negotiated"
sales agent: Merrill Lynch
attn Daniel Cummings and Brian Lehman
signed by Lisa Carnoy, Head of Equity Capital Markets

Bank of America Raises a Whole Lotta Money

"sold a block of 825 million shares for $10 apiece on Tuesday"

After hours? -- to who?
Who bought an $8 billion block?
Paid cash money?

Wells Fargo Is Broke: Poor Forecasting Slays Another Giant

A few notes. Wells is making money on mortgage refi fees, returned check and overdraft fees, card penalties and fees. Big push to serve small business, which I think is succeeding on customer service and solid payment technology. Non-interest bearing deposits are rising (real 'core'), which allows them to do more lending. Huge footprint, no overseas exposure.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

On May 11 03:45 PM aarc wrote:
> Meanwhile, those contrarian traders who bought AIG at 33 cents are
> now up almost 500% on their trades.
> Who is the greater fool getting hustled down here at these extremely
> depressed prices? The trend traders or the contrarian traders?

Great day traders always make money. Some of us can't use stops, have to pay brokers, have money locked up in pension funds, can't trade after hours, can't stand much risk, etc. So, the question is fundamentals. Are we going down or up? Did the banks get a clean bill of health from the Fed stress test, or was it a pack of lies? Is AIG a going concern? What about General Motors?

Comment above by 'inflation' tells a big story: if you are a trader, you don't care whether it is a bull or a bear market. The retail chumps who save and invest are there to be driven like sheep and fleeced by the pros.

The Stress Tests: Designed to Help Banks Raise Capital

Selecto, are you speaking to me? Our revenue was cut in half with the hiring freeze and elimination of consulting contracts. The oil and gas industry has a 5+ year investment horizon. The only work we're getting is valuing acquisitions.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

On May 10 11:55 PM Kem Parton wrote:
>We escaped death before because the computer revolution increased productivity to an astonishing degree

Er, no. Gain from Third Wave was trivial (bar codes and back office automation) if you back out the cost of replacing hardware every two years and software licences. The enormous 'productivity gain' was offshoring -- exporting US jobs and whole factories to Mexico and China.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

On May 10 07:07 PM Matt Miller wrote:
> You're a brilliant young man! ... thanks for sharing your knowledge.

Horsefeathers. He probably has a kid that age, just like 'Tyler Durden.' We're finally getting the straight story from very angry insiders. Probably ex-Lehman.

The Stress Tests: Designed to Help Banks Raise Capital

Huge guffaw this morning. HSBC booked a $5 billion gain on revaluing their Household Finance operation in USA. London shares knocked down 6% with open mockery of green shoot 'magic accounting.'

The Stress Tests: Designed to Help Banks Raise Capital

JPMorgan knows where the honey pot is [Q1 report]:

Net revenue for the Investment Bank segment increased to $8.34 billion from $3.01 billion in the previous year, helped by higher investment banking fees and debt underwriting fees as well as an increase in loan syndication fees.

The Stress Tests: Designed to Help Banks Raise Capital

On May 10 07:04 PM Finnblaxalternate wrote:
"When [financial firms] are functioning, then there are loans for small businesses and consumers."

That's silly. Marshall & Illsey cut its exposure to small business and deadbeat consumers. They have more interesting things to do:

...trust services, brokerage and insurance services, investment management and advisory services, lease financing, wholesale lending, investment services to institutional clients and venture capital, commercial loans and lines of credit, letters of credit, asset-based lending, equipment financing, mezzanine financing, global trade services, treasury management and other financial services to middle market, corporate and public sector clients, secured and unsecured lines of credit, letters of credit, construction loans for commercial and residential development and land acquisition and development loans, separately managed equity and fixed income strategies, managed asset allocation strategies, alternative investments, M&I’s family of mutual funds, manages the financial affairs of ultra high-net-worth individuals and their families, private banking (credit and deposits), investment, estate and tax planning, retirement plan taft-hartley services, not-for-profit services, north star deferred exchange and trust operations outsourcing.

Questioning Geithner's NYT Op-Ed

I disagree. Geithner is pumping up the market. Goldman Sachs makes money on the way up, and on the way down again. All they need is a trend. FASB mark-to-market would have been diagnostic, indicating what policy was needed. What we got instead was phony stress test cartoons to make Paulson/Bernanke sugar pills look like strong medicine.

5 Reasons Bank Shareholders Will Take a Hit

I have a small position in SKF. I agree with Shulman's analysis.

Independent Analyst Numbers Far Uglier than Official Stress Test Rumors

Good roundup, appropriate atttitude. I trust Egan-Jones.

Stress Testing: What's Your Bank's AQ?

Yves Smith at Naked Capitalism has a great post today:

"Banking has suffered a not-sufficiently-ackno... loss of know-how on the lending side. Back in the stone ages when I got an MBA, there were a few fellow students from big commercial banks like Chase (and no former investment banking analysts, the two year posts for college graduates) and they had all gone through credit training. But by the mid 1980s, the big end of town was fascinated with automated models and expert systems. American Express was considered the sophisticate of the crowd, allegedly with the most finely tuned program.

"Fast forward 20 plus years, and the credit card issuers formerly seen as most savvy, Amex and Capital One, now are sporting credit losses not markedly different than their peers. FICO based mortgage lending has proven to be a train wreck.

"The problem is that there isn't a good substitute for knowledge of the borrower and his community. Does he understand what he is getting into? How stable is his employer? What are the prospects for the local economy? Those are important considerations, and they require judgment. That may still in the end be used as an input to a more structured decision process. but overly automating borrower assessment has resulted in information loss. It's hardly a surprise that the quality of decisions deteriorated."