Comments on Kenard Grant's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/kenard-grant/articles http://seekingalpha.com/article/84201-risk-reward-of-owning-reits-raymond-james-in-this-boom-bust-cycle?source=feed#comment-422709 422709 Thu, 12 Mar 2009 03:22:57 -0400 http://seekingalpha.com/article/86742-response-to-raymond-james-q3-conference-call?source=feed#comment-230838 230838 Fri, 15 Aug 2008 01:49:03 -0400 http://seekingalpha.com/article/86742-response-to-raymond-james-q3-conference-call?source=feed#comment-230541 230541 Thu, 14 Aug 2008 15:34:45 -0400 ]]> http://seekingalpha.com/article/86742-response-to-raymond-james-q3-conference-call?source=feed#comment-226432 226432 Fri, 08 Aug 2008 16:12:03 -0400
On the “corporate” side they buy S&P BB rated loans. These loans have exposures to REIT’s, in areas like strip malls and hotels, which are certainly not risk free loans. One example of this type of loan is the WCI Communities loans which defaulted this week. RJF Bank has a commitment of $2.668 million in the term loan and $4.569 million in the revolver. This loan alone will increase Non-Performing Loans by 20%.

However, this information can only be obtained by digging through 8Ks as the company has not disclosed very much about the details of its portfolio. So your concerns and frustrations are certainly warranted and should be shared by both shareholders and tax payers alike.
]]> http://seekingalpha.com/article/86990-esco-technologies-bound-to-fall?source=feed#comment-217174 217174 Tue, 29 Jul 2008 07:32:33 -0400 http://seekingalpha.com/article/86990-esco-technologies-bound-to-fall?source=feed#comment-217173 217173 Tue, 29 Jul 2008 07:31:38 -0400 http://seekingalpha.com/article/86990-esco-technologies-bound-to-fall?source=feed#comment-216955 216955 Mon, 28 Jul 2008 19:57:44 -0400
Also, this article misses talking about their ETS unit, which sounds like a good long term business, and, when factored into the above valuation, makes the current price seem fair.

Don't see this stock as a screamer, but there are way better short targets out there...]]> http://seekingalpha.com/article/86990-esco-technologies-bound-to-fall?source=feed#comment-215355 215355 Sun, 27 Jul 2008 00:05:27 -0400
Anyhow the point of this post seems to center around the potential for not winning the PG&E bid. Was told this past week that PG&E has a meeting this up coming week. Maybe there will be some color from the utility after the meeting. Either way if it turns out that SSN has won the PG&E contract, it would be a meaningful blow to ESE.]]> http://seekingalpha.com/article/86990-esco-technologies-bound-to-fall?source=feed#comment-215223 215223 Sat, 26 Jul 2008 16:47:20 -0400 http://seekingalpha.com/article/86742-response-to-raymond-james-q3-conference-call?source=feed#comment-213579 213579 Thu, 24 Jul 2008 13:34:55 -0400 http://seekingalpha.com/article/84201-risk-reward-of-owning-reits-raymond-james-in-this-boom-bust-cycle?source=feed#comment-202924 202924 Fri, 11 Jul 2008 10:07:17 -0400 http://seekingalpha.com/article/84201-risk-reward-of-owning-reits-raymond-james-in-this-boom-bust-cycle?source=feed#comment-202416 202416 Thu, 10 Jul 2008 14:09:46 -0400
Raymond James Financial is viewed by most analysts as a brokerage firm but it is actually a thrift holding company, with its savings bank subsidiary now holding 45% of its assets, over which RJF has more leeway in mark to market reporting. The RJF management takes the position that the discounted Commercial Real Estate, Alt A I/O hybrids, and the other loans that are held in the RJBank subsidiary do not have to be marked to market. They seem to know the position is a bit shaky. As you probably saw in looking at the RJF press releases and SEC filings, RJBank announced in late March that it had increased the write-downs in the CMO portfolio you referred to from $3 million to $62 million, finally recognizing deterioration in market value of real estate assets. This was an admission that the real estate assets in the Securities portfolio had to be written down. The CEO went on to say, in so many words, that although logically this real estate mark down process should also extend to the bank loan portfolio, there are bank accounting rules that allowed them to not report the loans on a ‘marked-to-market’ basis. This forbearance of the accounting rules on mark to market and write-downs might make sense if RJBank actually were run as a normal bank, but in the RJF holding structure the bank is just a “holding pond” (a quote from the CEO in an Earnings call) for assets from the brokerage accounts where RJBank gets basically all its deposits like E*Trade did. RJBank has no checking or other bank services and only one branch. Does the argument they should get the benefit of bank accounting rules make any sense? If other brokerages like Bear Stearns (or a Merrill) had used the RJF savings bank subsidiary approach to buy its riskier assets and protect them from write-downs in a massive way like RJF did, then Bear or Merrill would not have had to write down their assets. Does it seem like RJF should get special treatment from regulators or auditors here? This inconsistency in treatment of brokerage structures and the ability of RJF not to mark to market does not make sense from either a regulatory or investor protection standpoint.

On the other side, even if you say RJBank is a bank then there is still a strong argument that the accounting rules would not protect the Bank from a proper valuation and increased write-down or provisioning against its loans. Whether the RJBank loans should be marked down is a question that depends on whether the loans in its portfolio can properly be considered ‘temporarily impaired’. It would seem clear from the evidence that the loan portfolio is impaired and it is not a temporary condition. RJBank will have a difficult question to answer from the bank regulators. If RJBank is able to buy these loans at a discount from other banks like Citi whose risk managers have presumably required that the loans be categorized as impaired, marked down, and now sold off at ‘impaired prices’ months ago (and conditions have worsened) then how can RJBank continue to say the loans are only temporarily impaired.

The regulators would seemingly also have to be concerned about the relatively low levels of reserves given the deterioration of the type of real estate assets that RJBank holds – a mere 26 bps for the Alt A hybrid loans where losses are projected at 5% to 7%, or even the seemingly higher 194 bps for the commercial real estate loans that the bank has probably been buying at a 500 bp or higher discounts. In the meantime, as you seem to suggest there might be a significant earnings benefit enjoyed by the bank on the loan purchases depending on the way they book these discounted loans.

It seems clear why RJF is avoiding any suggestion of mark to market or impairment for as long as it can. A markdown of the loans would obviously result in a significant difference in the asset value of RJF and in its stock price. Under a strict mark to market, given the problems in the construction portfolio and where Alt A I/O and syndicated commercial real estate loans are now marked, the write-downs could be $450 to $500 million. You mention the CFO’s comment on the record level of earnings at the bank, and correctly question if that is really an accurate picture if delinquencies are coming, the loans are impaired and earnings not sustainable? A relevant question would also be aren’t bank accounting and SEC rules set up to make sure investors know more about the source and quality of bank earnings and the true valuation of the assets?

You are correct in your short call if, as it appears, writedowns are inevitable; but more digging by you or other analysts, or more pressure brought by regulators, would hasten the process.]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-136125 136125 Thu, 03 Apr 2008 14:53:53 -0400 Pray for bad weather. ]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-135656 135656 Wed, 02 Apr 2008 22:10:10 -0400
Part two will be born out as supply/demand is shown throughout the world helping to bring down America's 9m bale inventory. America's stock is much more loose then the rest of the world.

Look for Thursday's export numbers, look for April 9th USDA report and get long may cotton below 71... and long dec below 79. ]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-135490 135490 Wed, 02 Apr 2008 16:37:41 -0400 five sessions after the International Cotton Advisory Committee
said global production will rise in the next marketing year.
Output will increase 3.3 percent to 26.9 million metric
tons in the year that begins Aug. 1, the ICAC said yesterday.
The group represents 44 cotton-producing and -consuming
countries. Use will rise 1.3 percent to 27.5 million tons,
dropping global stockpiles 5.5 percent to 10.96 million tons.
``There are still burdensome stocks,'' said Fain Shaffer,
president of Infinity Trading Corp. in Medford, Oregon.
Cotton for May delivery fell 0.27 cent, or 0.4 percent, to
70.18 cents a pound on ICE Futures U.S., formerly the New York
Board of Trade. The price has surged 32 percent from a year
ago, reaching a 12-year high of 92.86 cents on March 5.

]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-134050 134050 Mon, 31 Mar 2008 11:02:21 -0400
Im still amazed that you would argue with the rest of the world on a subject you havent traded in the past. Most of us have either worked on cotton farms as kids, or have been trading this for over 10 years.

Academic research is very often way off the mark. Thanks.]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-134046 134046 Mon, 31 Mar 2008 10:56:53 -0400 http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-134026 134026 Mon, 31 Mar 2008 10:36:02 -0400
"if you believe that 9.5m number out of the u.s. then why are you bullish on cotton?"

Should we sell? Are you selling your COTN?

Thanks

]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-134021 134021 Mon, 31 Mar 2008 10:23:25 -0400 http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-121904 121904 Tue, 04 Mar 2008 10:00:25 -0500 http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-121194 121194 Sun, 02 Mar 2008 16:21:41 -0500 http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-121025 121025 Sun, 02 Mar 2008 00:10:28 -0500
strumwasser@gmail.com]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-120888 120888 Sat, 01 Mar 2008 03:23:49 -0500
NOTE FROM SA EDITORS: THIS COMMENT WAS EDITED TO REMOVE UNNECESSARY ABUSE THAT ADDED NOTHING TO THE POINT MADE IN THE COMMENT.]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-120134 120134 Thu, 28 Feb 2008 09:36:48 -0500
Interesting that specific Softs (and some other commodities) have not been "carved up" into tradable chunks by ETF and ETN creators, so that investors can be in the actual Cocoa, Cotton, Sugar, etc. markets, somewhat like the REITS changed real estate to creat liquidity and more easily digested chunks of commitments.

Perhaps it will come?]]> http://seekingalpha.com/article/66398-the-rise-of-cotton-the-decline-of-supply?source=feed#comment-120049 120049 Thu, 28 Feb 2008 05:04:28 -0500