Wall Street recruiters are salivating at last year's 61% slump in Bank of America's (BAC) share price, hoping it will be the catalyst that leads to easy poaching of its much vaunted advisor ranks. Excessive bureaucracy, decisions made with little broker input and an agressive push to cross-sell bank products have eroded the culture at Merrill since BofA bought the firm about three years ago. [View news story]
Yeah, if someone stuck with BAC/ML all this time, why leave now? The bar for getting bonuses I would imagine is pretty low down here after a 61% haircut last year. From a contrarian point of view, now might be the time to jump on BAC. I think they could go from worst to best of the Dow. Those $13 plus change, 2019 warrants look tempting. BAC/WS/A.
3 Wicked Reasons To Buy Mortgage REITs Today [View article]
Have you guys looked at mREIT AMTG? New mREIT that IPO'd this summer. They should be announcing their first dividend soon and I think the stock could pop as it moves to the income producing screens. About 90% invested into agency MBS and 10% into non-agency. They doubled up their investments in October when PrimeX was showing weakness. Just about the same investment strategy and book value as MTGE. MTGE has already announced an 80 cents quarterly divy and selling for 18.52 ,whilst AMTG is dragging it's feet and has not at 15.82. Worth a look IMO.
In normal times, what happened at MF Global (MF) would have been forgotten and we would've moved on the next quarter, says Dick Bove. But these are hysterical times, where anything that happens to a financial company gets magnified way out of proportion to reality. So now, what we have to worry about is a run on a company that's actually solvent. (video) [View news story]
This is a link from MF Global's homepage. I found it interesting that all of the 6 billion in debt they bought will mature before June 2013...which means it is all guaranteed by the EFSF backstop....as stated in this link.
To lift the housing market, the government is exploring letting Fannie (FNMA.OB) and Freddie (FMCC.OB) rent foreclosed homes and relax their rules for loans to investors. Officials could also give banks more incentives to cut loan balances for those behind on payments or suffering negative equity. [View news story]
Fannie and Freddie are the only game in town in home lending. Hard to eliminate them with out creating another govt monster to take their place. I say nationalize them and raise the fees to make them profitable. You want to borrow money from us taxpayers? Pay market value rates and fees for the guarantee.
Good idea to relax rules on investors. Bad idea to cut loan balances and reward bad behavior.
Goldman, JPMorgan and other securities firms are snapping up warehouse operators to take advantage of the big profit opportunities in holding metals. Warehousers collect a holding fee and can charge a premium on large corporate orders, but critics worry firms will exploit their trading knowledge. [View news story]
>>"but critics worry firms will exploit their trading knowledge." <<
Hasn't anyone learned anything? They WILL exploit their trading knowledge. That is in their nature.
Matt Yglesias looks at a chart of housing starts, and - like those who bought C in late 2007/08 - reckons it can't get any worse. At some point, he argues, population growth will force the construction sector to ramp up. What he fails consider is an expansion in household size - multiple generations living together. It wasn't so long ago this was the norm. [View news story]
The average size household in 1950 was about 3.35 people per household. Today it is something like 2.59. If the population is 310 million today that is about 120 million households. What if the average household were to expand to let's just say 2.80. At that size household we need 110.7 mil homes - 9.3mil less homes. On the other hand the population grows at about 1% per year or now. The same can be said now about the number of people that come of age to establish new households. That is about 1.16mil new households formed at 2.59 per household, of course less at 2.8 per household. Did I not read that we have about 17 million vacant homes? Even at the average current size household it is going to take many years to fill those homes even if NO new homes were built. Add in expanding size households and it will be some time before the construction sector ramps up again.
Little side story. My neighbor is and elderly lady that was living by herself. Not long ago her brother and his wife moved in. Then came their daughter who lost her home. Then the daughter's son moved in and his soon to be wife spends much time there as well. My elderly neighbor had enough. Did she kick them all out? No, she moved in with her sister giving us two expanded households.
While LinkedIn's (LNKD -7.2%) IPO wasn't perfect, Morgan Stanley (MS) and Bank of America (BAC) didn’t pull any scam, Andrew Ross Sorkin writes. "Unless we learn that the low price was determined, in part, to help themselves through kickback schemes with favored clients, it is hard to argue the banks purposely scammed their client." Innocent until proven guilty, right, Henry Blodget? [View news story]
Thinking like a criminal the underwriters juiced the LNKD IPO to get following IPO's from the likes of FaceBook and the others. They can't let LNKD fall flat on its face here so I imagine BAC, GS and others will keep LNKD supported to get the other IPO's sold.
Kyle Bass sees preferred stock in Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) as a potential "eight- to 10-bagger," trading at just $0.08 on the dollar. He says the GSEs are making money on debt they owe the U.S. government, big tax-related assets could be brought back onto balance sheets, and mortgage fees eventually should rise from 20 bps to 60 bps. [View news story]
The Federal Reserve Discount Window & Payment risk collateral and margin table www.frbdiscountwindow....
Shows 65% for GSE stock of market value ...or, INTERNAL fair market value estimate.
Surprised they show any value as collateral for GSE stock.
Yes Thomas, it is risky. Kinda like buying Lehman bros bonds at 10 cents on the dollar and recently letting them go 24. Or, Lear when they were in BK at 25 and selling for 65 just a couple months later. But then again when dealing with these distressed securities you can take some big losses too.
Kyle Bass sees preferred stock in Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) as a potential "eight- to 10-bagger," trading at just $0.08 on the dollar. He says the GSEs are making money on debt they owe the U.S. government, big tax-related assets could be brought back onto balance sheets, and mortgage fees eventually should rise from 20 bps to 60 bps. [View news story]
If you could buy something today for 8 cents on the dollar and in 5-10 years it could be worth 80 to 100 cents, that would be a nice speculative trade. The vision is that the govt will not bankrupt fannie or freddie. That each day their portfolio gets better as one bad loan is replaced by a good one. Hopefully in 5 to 10 years the bad loans will be history. There are about $36 billion in trust preferreds outstanding. Most were held by banks as the govt made it attractive for them to hold as tier one capital. I do not know what the current status is but Secretary Paulson at the time of conservatorship said the Fed would work with the banks in valuating them. A federal reserve memo says that GSE stock can be valued for bank capital concerns at 65% of market value. Problem is that there is no definition what market value is. The thinking is eventually the govt won't make the banks take a bath on these since they were marketed to the banks by the govt as safe and secure paper nearly on par with treasuries.
Of course there is risk involved. I was fortunate enough to by some at less than 2 cents on the dollar and sold enough recently to cover my original cost. Beware that when researching them there are some with a $25 face value and some at $50. The strategy if interested is not to buy on possible future yield but just buy the cheapest ones regardless of dividend rate.
Kind of a neat hail mary trade. Only invest as much as you can afford to lose. Beware that preferred stock symbols can be different from broker to broker. However, now that THESE issues are on the pink sheets the new symbols should be the same from broker to broker.
According to a somewhat bizarre report on Informa Global this morning, the U.S. and China have reached an agreement on yuan appreciation in exchange for the U.S. holding off on QE2. [View news story]
What is in it for China? One would be lower commodity prices. Another would be their products would remain affordable to American consumers.
Possible benefits for the US would be to see China continue to buy our debt.
The story sounds too good to be true. It would be nice to think that the Federal Reserve finally grew a collective brain.
AIG Pays the Government Back ... With Its Own Money ... Again ... [View article]
Excerpts from news item; [quote]AIG - The exit plan converts the government’s preferred stock into 1.66 billion common shares for sale on the open market... For Treasury to break even on its $49.1 billion investment in AIG stock, the shares must be sold for almost $30. When to Sell? The U.S. sales will happen in phases over 18 months to two years starting in 2011, said a person with direct knowledge of the Treasury plan. The length of the sale period was meant to avoid flooding the market with AIG shares, said the person, who declined to be identified because details of the strategy are confidential. [/quote] There are about 250 trading days each year. Over 2 years that's 500 trading days. The average trading volume for AIG over the last 3 months is about 4 million shares a day. The govt has 1.66 billion shares to sell. That is 3.32 million shares every single trading day for two years. How does this not weigh on prices much longer than 2 years?
Shadow Housing Inventory: The Coming Avalanche? [View article]
Add to that 6.97 million some of us investors that have bought some of these foreclosures and ready to sell once we see any strength in the market to turn a profit. Personally I think that time will be a long time coming and now I don't think these great buys I have bought are going to be very profitable. I could see investor inventory moving back into the market if the market does not turn in the next year.
Fannie Mae's Efforts Could Lead To The Break Up Of A Key Monopoly Among The Big Banks [View article]
You wrote; "For those looking to establish a position in Fannie Mae, now may be a great time to establish a position in the company as I believe the chances for a favorable ruling by the FHFA are pretty good."
Hmm..I don't see how the ruling will affect the price per share for Fannie. If Fannie and Freddie's strong profits can't hardly budge the PPS, I don't see how this issue will.
however, what we need is to get the FHFA to release us from conservatorship. It is unfair for the US Treasury to now take all profits without us shareholders being allowed to redeem some of the senior prreferreds. I have now set up a website for us Fannie and Freddie shareholders at FannieandFreddieShareh... We also have a FaceBook page at same. I see you own the common. Please come by and check us out.
Wall Street recruiters are salivating at last year's 61% slump in Bank of America's (BAC) share price, hoping it will be the catalyst that leads to easy poaching of its much vaunted advisor ranks. Excessive bureaucracy, decisions made with little broker input and an agressive push to cross-sell bank products have eroded the culture at Merrill since BofA bought the firm about three years ago. [View news story]
3 Wicked Reasons To Buy Mortgage REITs Today [View article]
In normal times, what happened at MF Global (MF) would have been forgotten and we would've moved on the next quarter, says Dick Bove. But these are hysterical times, where anything that happens to a financial company gets magnified way out of proportion to reality. So now, what we have to worry about is a run on a company that's actually solvent. (video) [View news story]
http://bit.ly/t7qfpT...
from yhoo
To lift the housing market, the government is exploring letting Fannie (FNMA.OB) and Freddie (FMCC.OB) rent foreclosed homes and relax their rules for loans to investors. Officials could also give banks more incentives to cut loan balances for those behind on payments or suffering negative equity. [View news story]
Good idea to relax rules on investors. Bad idea to cut loan balances and reward bad behavior.
Goldman, JPMorgan and other securities firms are snapping up warehouse operators to take advantage of the big profit opportunities in holding metals. Warehousers collect a holding fee and can charge a premium on large corporate orders, but critics worry firms will exploit their trading knowledge. [View news story]
Hasn't anyone learned anything? They WILL exploit their trading knowledge. That is in their nature.
The timing of the release of 60M barrels of oil is a puzzle: The war in Libya, the purported cause of the move, has been raging for months, and prices had already fallen ~10% since April. So why the release now? This isn't really about oil; it's the economy, stupid. Some see it as "a sign of desperation" with prices recovering after a few months. [View news story]
Matt Yglesias looks at a chart of housing starts, and - like those who bought C in late 2007/08 - reckons it can't get any worse. At some point, he argues, population growth will force the construction sector to ramp up. What he fails consider is an expansion in household size - multiple generations living together. It wasn't so long ago this was the norm. [View news story]
Little side story. My neighbor is and elderly lady that was living by herself. Not long ago her brother and his wife moved in. Then came their daughter who lost her home. Then the daughter's son moved in and his soon to be wife spends much time there as well. My elderly neighbor had enough. Did she kick them all out? No, she moved in with her sister giving us two expanded households.
While LinkedIn's (LNKD -7.2%) IPO wasn't perfect, Morgan Stanley (MS) and Bank of America (BAC) didn’t pull any scam, Andrew Ross Sorkin writes. "Unless we learn that the low price was determined, in part, to help themselves through kickback schemes with favored clients, it is hard to argue the banks purposely scammed their client." Innocent until proven guilty, right, Henry Blodget? [View news story]
Kyle Bass sees preferred stock in Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) as a potential "eight- to 10-bagger," trading at just $0.08 on the dollar. He says the GSEs are making money on debt they owe the U.S. government, big tax-related assets could be brought back onto balance sheets, and mortgage fees eventually should rise from 20 bps to 60 bps. [View news story]
www.frbdiscountwindow....
Shows 65% for GSE stock of market value ...or, INTERNAL fair market value estimate.
Surprised they show any value as collateral for GSE stock.
Yes Thomas, it is risky. Kinda like buying Lehman bros bonds at 10 cents on the dollar and recently letting them go 24. Or, Lear when they were in BK at 25 and selling for 65 just a couple months later. But then again when dealing with these distressed securities you can take some big losses too.
Kyle Bass sees preferred stock in Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) as a potential "eight- to 10-bagger," trading at just $0.08 on the dollar. He says the GSEs are making money on debt they owe the U.S. government, big tax-related assets could be brought back onto balance sheets, and mortgage fees eventually should rise from 20 bps to 60 bps. [View news story]
Of course there is risk involved. I was fortunate enough to by some at less than 2 cents on the dollar and sold enough recently to cover my original cost. Beware that when researching them there are some with a $25 face value and some at $50. The strategy if interested is not to buy on possible future yield but just buy the cheapest ones regardless of dividend rate.
Kind of a neat hail mary trade. Only invest as much as you can afford to lose. Beware that preferred stock symbols can be different from broker to broker. However, now that THESE issues are on the pink sheets the new symbols should be the same from broker to broker.
According to a somewhat bizarre report on Informa Global this morning, the U.S. and China have reached an agreement on yuan appreciation in exchange for the U.S. holding off on QE2. [View news story]
Possible benefits for the US would be to see China continue to buy our debt.
The story sounds too good to be true. It would be nice to think that the Federal Reserve finally grew a collective brain.
AIG Pays the Government Back ... With Its Own Money ... Again ... [View article]
For Treasury to break even on its $49.1 billion investment in AIG stock, the shares must be sold for almost $30.
When to Sell?
The U.S. sales will happen in phases over 18 months to two years starting in 2011, said a person with direct knowledge of the Treasury plan. The length of the sale period was meant to avoid flooding the market with AIG shares, said the person, who declined to be identified because details of the strategy are confidential. [/quote]
There are about 250 trading days each year. Over 2 years that's 500 trading days. The average trading volume for AIG over the last 3 months is about 4 million shares a day. The govt has 1.66 billion shares to sell. That is 3.32 million shares every single trading day for two years. How does this not weigh on prices much longer than 2 years?
Shadow Housing Inventory: The Coming Avalanche? [View article]
Shadow Housing Inventory: The Coming Avalanche? [View article]
Fannie Mae's Efforts Could Lead To The Break Up Of A Key Monopoly Among The Big Banks [View article]
Hmm..I don't see how the ruling will affect the price per share for Fannie. If Fannie and Freddie's strong profits can't hardly budge the PPS, I don't see how this issue will.
however, what we need is to get the FHFA to release us from conservatorship. It is unfair for the US Treasury to now take all profits without us shareholders being allowed to redeem some of the senior prreferreds. I have now set up a website for us Fannie and Freddie shareholders at FannieandFreddieShareh... We also have a FaceBook page at same. I see you own the common. Please come by and check us out.
Thanks for the article. Joe