Alex Filonov

Debunking the 'Too Big to Fail' Myth Once and for All

Sure, if they are too big to fail, make them smaller. Let FDIC to set max size of US operations of any bank, as measured by provided credit. It won't solve all problems (nothing will), but it will kill monsters.

Doug Kass Leans Against the Market

I missed upside twice this year because I believed Dougie. That said, his analysis is excellent, everything he wrote is exactly correct. Rationally, market should follow his predictions. Unfortunately, rational market exists only in minds of some economists.

We are in buying panic. Great time for quick speculation, rotten time for long term investing.

Credit Card Rules: No Consumers Need Worry

I am paying my balance in full. And I want to continue doing so. Essentially, credit card companies give me about of month of free credit, which means extra money in my pocket. This credit is not exactly free, because merchants pay a fee. But they do accept credit cards, so it looks like it's profitable for them.

Couple of points here:

it's convenient to carry more than one credit card, because not all merchants accept all of them. At Costco, you need Amex.

In current environment, further contraction of debt is very dangerous for economy. We are not out of deflation danger yet, and debt (and monetary mass) contraction is deflationary.

One Easy CDS Fix

You are right that there are few net sellers of CDS. Unfortunately, AIG is one of them.

Bank Stocks Will Return to Prior Norms

Jason, I have to congratulate you on BAC position. I was wrong and you were right. It's no small deal to get a double in less than a month.

Mark-to-Market Triggered This Recession; It Will Also Trigger the Recovery

CDO market crashed in August 2007 (time of the famous Jim Cramer rant). Mark to market affects reserver requirements only, and with or without it banks are in danger of a run if they have huge illiquid positions. Bear Stearns failed because of a run, same for Lehman Brothers, Goldman Sachs and Morgan Stanley had to become banks (i.e. get access to Fed window) to survive. I don't know what would happen without mark to market, but run on bank kills it in any circumstances. And just a rumor that bank is illiquid can trigger a run.

Eight Reasons Bank of America Is Going to $20

BAC may go to $20. Eventually. Unless it goes to $0, gets nationalized or taken over by FDIC and sold in parts. If you wanna play BAC, buy preferreds, they have more chance of surviving and dividend is safer (but not by much)

TARP vs. Non-TARP: Investing with Uncle Sam at a 60% Discount

As far as I know, government didn't guarantee Fanny Mae and Freddy Mac preferreds. Why it would be different for said banks? Let's say, bank participates in TARP, fails anyway. Government steps in, guarantees all deposits and all bonds issued by bank with exception of preferreds. Bank is solvent but common and preferreds are wiped out. Is there any clause in TARP preventing that?

The Outlook for Financials Failure

Goldman Sachs is not a bank, but it's priced like one. I'm seriously thinking of buying it.