Ira Artman

Touchdown: When Do Financial Stocks Hit Zero?

Thank you for comments. If you were dissatisfied with the above, then you probably won't appreciate the following, "Now & Then", either:

mortgagenewsclips.com/.../

Again, both the link above and the original article are about politics, rather than finance. Finance has nothing to do with the current state of banks.

Touchdown: When Do Financial Stocks Hit Zero?

Nyorker, kozanack and DVW:

Thanks for comments. James Bianco was talking about the fact that price weighting of DJIA can, when component prices are low (and below their own guidelines) lead to results that underestimate the 'footprint' that the companies represented by the stocks have on the real economy.

Don't disagree - of course he's right.

There is another issue too, which is more of a *political* issue than an economic or financial issue.

Specifically, at what point do firms with low stock prices and capitalizations (relative to their recent past) lose their standing as political players or as voices that are given consideration when political decisions are made with respect to their fate?

That's what I (at least) am wondering about. Extrapolation and line are simply devices to focus the discussion and make an impact.

Thanks again, for reading and comments. - Ira

Touchdown: When Do Financial Stocks Hit Zero?

The 'concept' as noted is a simple extrapolation, and of course says more about where we've been than where we're going. That's the point.

What is astounding is that for all intents and purposes, there's really not much difference between a $2 or $3 stock and a penny stock. What is truly astounding is that some of these $2 or $3 stocks sold for $30 1 year ago, and $60 two years ago.

Touchdown: When Do Financial Stocks Hit Zero?

FYI - Here is an interesting article from the Institutional Risk Analyst, discussing the differing treatment (and risk positions) of large and small banks:

The Big Banks vs. America:
A Roundtable with David Kotok & Josh Rosner
Institutional Risk Analyst: January 26, 2009


us1.institutionalriska...

How the Fed's Rate Cut Could Hurt America's Small Banks

re billddrummer on "margin compression et al.."

Thank you for perspective that I assume is coming from the trenches.

On one hand, "it makes sense" that what I saw happening on macro level is being confirmed at the "storefront.". But on other hand is sad to see the beginnings of the sacrifice of the folks that had nothing to do with the "problem" and largely avoided it.

Punish the innocent, and promote the guilty...

How the Fed's Rate Cut Could Hurt America's Small Banks

John Lounsbury - Thank you for comments and compliment.

If things do "turn out" as suggested in my piece, then will simply be continuation of process that began with S&L Crisis in 1980's.

But what is so ironic now is that - as you indicated - the larger institutions look to be the survivors, more or less, even as the small institutions that largely avoided most recent missteps will be "sacrificed" for the greater "good."

How the Fed's Rate Cut Could Hurt America's Small Banks

re:
"Paulson and Bernacke are destroying the small banks for the favored few who will receive bailout after bailout after bailout while the small banks starve."

Herbert, that - in 25 words - is precisely the story. But think that the 'details' contained in my article deserve consideration, as well.

Monetary Mechanisms: Then and Now

Flow5 - Thank you for time and comments. You've given me much to think about. - Ira

FHA/HUD: Fee Stooges

You have captured policy problem perfectly and precisely with your ironic comment.

Does government, in this case, attempt to act as an efficient allocator of public capital, or is it simply Santa Claus? I guess - for now - it's the latter.

Where's my stocking?

Monetary Mechanisms: Then and Now

Replies for ebreen, flow5, and derryl

#1: ebreen: You are correct. In balance between content & length I confined inflation comments to first piece in series ("The Demographic and Economic Record Prior to the Housing Meltdown"), but not here, and perhaps should have.

#2: flow5+derryl: Understand point that you are making. But how, then, to interpret the claims that occurred during the 70's - 80's that "dintermediation" was occuring in banking system? If deposits can't leave, then "where did they go?", or would you say that - by definition - there is NO such thing as dintermediation?