Lockstep Investing

Q4 Outlook: Real Life Stress Tests Begin

Woops! I hope it was a small position. It sounds like you did not hedge it at all.

JPMorgan: Counting Bailout Money as Profit

Apparently Congress has the same concerns that I have...

www.nytimes.com/2009/0...

"Tens of billions of those dollars have merely passed through A.I.G. to its derivatives trading partners, shielding them from losses. The Fed has refused to provide the names of those financial institutions, and senator after senator, Democrat and Republican, said that was an outrage."

I wonder what these congressmen would say if they found out it was the company they lauded so much as the "prudent navigator". Horsepucky to that!!!

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

Martin, on Wells Fargo you miss the California exposure and the Wachovia (Golden West) exposure. That alone pushes that bank into walking wounded status.

On JPM you fail to mention that they are the biggest CDS broker in the market. Counterparty risk anyone? They are a zombie in their own right. They know if a crisis happens the only thing that can save them is government intervention. That is why the Fed gave them Bear Sterns to begin with, it is better to have all the counterparty risk in one spot so it is identifiable and manageable, rather than spread across market players.

Overall, good summary.

Crocodile Investors Smile at Bank of America

Transparency: On Dec 24th I closed the BAC-PJ position at 17.40/share.

The reason for closing the BAC-PJ position is the poor leadership decisions of Ken Lewis, CEO of B of A. The recent acquisitions of Countrywide, a defunct mortgage originator, and Merrill Lynch, an asset manager with an unknown quantity of toxic assets on their balance sheet, are questionable at best. Due to the unquantifiable risk and need for capital to sustain this new financial conglomerate, I see preferred shares as at risk for being seriously being diluted. Thus I am closing my position with a small gain and moving on.

Citigroup's Derivatives Reduce Bailout to a Non-Event

Rakesh, to underscore your points, the OCC has polled the top ten CDS players and it is an accepted estimate amongst them that the net exposure is 15% of nominal exposure. It will vary for each firm, as you are aware is demonstrated by the heavily weighted underwriting exposure of AIG. So I think there is weight to your statements about credit derivatives and expect there will also be counterparty issues with other derivatives as you mention above.

www.occ.treas.gov/ftp/...

Cramer's Lightning Round - Who Needs Citi? (10/28/08)

Haters, all of you.

Cramer has been dogging Citi for two years now.

Bank of America has a huge derivative book, but it is focused on industrial credit default swaps, not residential mortgage backed securities like Bear Sterns, UBS, Lehman and the rest.

Citi put the seven SIVs on the balance sheet and has been too bloated do any transaction since. It is a ward of the Federal Reserve and is just a silent version of AIG waiting for unwind.

Profit Plays for the End of the 'Fail-and Bail' Cycle

This article is horrible! "This is not confined to Lehman as I predicted last week". UGGHH!! Who didn't know that!

There is absolutely no insight in this post. None.

You do so much better in emerging markets analysis.

Countrywide: Dogs Howling Over Bare Bones

Great post Mish. We need an update as soon as you get time. I wish I was an accredited investor for your hedge fund. But I like to see how the players play the game. :)

Can you also address the exposure B of A takes from boomerang loans from Freddie and Fannie back to Countrywide? At the end of the 2Q Freddie and Fannie said their #1 risk mitigation effort was to do forensic analysis on deteriorated loans and send them and the loss back to the originator. Countryslide originated 1/4 of the loans from 2007 back... It sounds like B of A will be cleaning that up for years. Any thoughts?

Could Lehman's Failure Cause a Systemic Meltdown?

Give Lehman to Nomura or another Japanese bank. They never have to mark-to-market. They can hide all of those assets (liabilities) under a rug for years!

Upbeat Outlook for Credit Card Backed Securities - S&P

Your graph ends at Q1 08 and we are in Q3. I think you should make display until the current date. Between April and May we had the largest jump in unemployment in 20 years and your information makes no reference to this large spike.

Just looking for quality in the information presented.

Crocodile Investors Smile at Bank of America

Each of the sites uses different tickers for preferreds. At Yahoo! the ticker is BAC-PJ. At QuantumOnline.com, it is BAC.PR.J. I recommend QuantumOnline.com for getting all the details regarding preferred issue.

The Long Case for Bank of America

There is not one original thought in this article. "Paid dividends since 1903"? What? That was before it became a merger & acquisitions behemouth that has been rolling the dice on acquisitions and size. This is not a slow and stable company anymore. The CFC purchase was speculation pure and simple. That being said, the common will suffer horribly but the preferreds are great money.

The Worst Is Behind Us (unless massive bank failure is considered a bad thing)

Good job Reggie. In depth and methodical.

I didn't know Bankrate.com could be so profitable to me.