Naufal Sanaullah

Unsustainability, High Beta, and Liquidity Risk Pervade Capital Markets

Small businesses that rely on short-term financing from CIT would go bankrupt. I have no idea what you are talking about.

Unsustainability, High Beta, and Liquidity Risk Pervade Capital Markets

Rising rates Q2 lead me to believe mortgage volume and decreased foreclosure rates may not have indeed prevented big losses in banks or allowed big revenues from new mortgages.

We will see.


On Jul 14 10:31 AM greedcanbgood wrote:

> Your analysis is pretty good. Watch for the commercial banks to
> report good, even outstanding, Q2 earnings primarily due to mortgage
> volume. The bottom falls out in Q3 when mortgage volume has waned,
> the consumer "hunker-down" gets even more serious (e.g. consumer
> spending) and unemployment hits existing mortgages harder.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

I see lots of broad and general assertions, I would love some insight as to how one determines the "fair value" of bank stocks when they have trillions in depreciating assets that have yet to be marked to any realistic price and are still overlevered > 15-20x.

As per those who trivialize this as just another permabear ultrashort article, I invite specific responses to specific parts of my article. Also please keep in mind I have been repeatedly stating the market will place a nominal bottom this year (though not inflation-adjusted for several years), so I'm not exactly a permabear.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

AIG is on the losing end. which means taxpayers, since we provide all of the funding. that's why it's such a scandal, AIG is being used as an intermediary for basically an unlimited cash stream from taxpayers to banks under the guise of "systemic risk" even though no haircuts are being taken and CDS trades are being settled at face value close-outs.

banks win, taxpayers lose.

A Summary of Q1 Bank Earnings: World, You Just Got Hustled

I made enough money going short energy stocks on July 4 and going short the rest of the stock market September 2 to worry too much about being whipsawed since April 20.

The banks will recover, yes. But you have to understand HOW. Looking at current bank balance sheets, many are on the point of technical insolvency. Just absurd TCE/TA. To assert banks will just "turn arond" is a very generalized claim.

Banks will turnaround this year because of the government's capital infusions. The stock market will bottom (in nominal terms) this year. But it's all just blatant credit expansion. No rally in stocks is to be trusted unless it goes with a rally in gold.

Until the Dow can buy less than two ounces of gold, this will be the case.

Why This Rally Is Unsustainable

Market is up about 2.5% since April 9.


On May 01 11:02 AM Wise Golden wrote:

> Sideways market since April 9th? You lost me there -- you must have
> been talking about April 9th of some other year. April 2009 was
> the second best month in stock market history.