Rolfe Winkler

The TARP Deadbeats

BullnBear......Reuters IS the mainstream financial media! ;)

blogs.reuters.com/rolf.../

Coming Soon: Banking Crisis of Historic Proportions

Interesting piece John. You quote me saying FDIC's total insured deposits are $8.3 trillion. That is incorrect. The figure is $6.3 trillion.

See here:

blogs.reuters.com/rolf.../

Keep up the good work.

Guaranty Financial Group: On the Rocks

thetruth09.....looks like I just got the link wrong. Guaranty bank in TX did exit warehouse:

ml-implode.com/viewnew...

Guaranty Financial Group: On the Rocks

thetruth09.....thank you for the correction....it was my impression that the warehouse lender was just the WI ops of the TX bank. I was wrong.

Three More Banks Closed, Including Largest Failure Year to Date

A quick note for readers, the title of this post is going to be changed. Silverton is the largest bank failure "year to date" not the largest bank failure to date. WaMu and Downey, which failed last year and are on FDIC's official "failed bank" list were larger. BTW, a good argument can be made that Citi, BofA and the rest of the big bank complex failed. Without government life support to mask their insolvency, all would have collapsed last year.

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

hastingspete....not sure I understand your problem with the use of "Barry." It's Barack's self-chosen nickname. Google it and you'll see. As to credibility, that has more to do with arguments, not turns of phrase that may offend overly delicate sensibilities.

Bank Stress Tests: Tangible Common Equity a Critical Metric

sunny....on your second point, FAS 157 adjustments seem to have impacted the banks differently.

Wells Fargo, for instance, rec'd a $2.8 billion after tax gain from new MTM rules. That raises TCE by that amount dollar for dollar. Backing it out and their TCE ratio falls from 1.4% to 1.2%....

Bank Stress Tests: Tangible Common Equity a Critical Metric

all: I should note that there's a typo in the second footnote. I don't start from "common shareholder equity" and then back out preferred. that would be subtracting it twice.....no, I start from shareholder's equity excluding noncontrolling interests and then subtract preferred.

Bank Stress Tests: Tangible Common Equity a Critical Metric

BigJack58: This data is not old. It's as of 3/31. You missed the point of the piece that the 3.13% reported by BAC is their own personal calculation. If you want to give them credit for MSRs, that's fine. But if we want a true acid test, then their TCE is much lower.

The biggest takeaway from this data is that most of the banks fail the 3% test BEFORE their balance sheets are stressed under "adverse" scenarios. So how can any actually "pass" the stress test unless it's a total whitewash?

If I were a bull, I'd be looking for evidence that banks are actually going to be rescued on the asset side of the balance sheet. But the PPIP seems to be off to a slow start....

PPIP Open to Fraud: TARP Inspector General

betweenthenumbers.....yes I think they are totally ignorant. Note everyone, including the Treasury secretary's, total focus on getting banks "to lend again." They all think we solve the problem of too much leverage with more leverage. If they actually understood how credit works, they'd realize it's a totally flawed strategy. Propping up the prices of assets with more credit delays the inevitable correction and will make it more painful when it comes...

Bank of America: With Unsustainable Profits, Its Balance Sheet Is Still Ugly

You two are funny. There's no backtracking here, and that's the point. All of the banks employed obvious accounting gimmickry to goose reported profits. Nothing reported was sustainable. Not from a single large bank.

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

The only substantive difference between today and three months ago is that Treasury has put forward a plan to buy toxic assets at above market prices to rescue bank balance sheets. (The PPIP)

This is a terrible idea because it just replaces bank-financed leverage with government leverage in order to artificially inflate asset prices.

If and when PPIP gets off the ground, it will benefit bank shares. Until then, nothing has changed. Net interest margins are a bit better, but writeoffs will totally overwhelm any profits from new lending.

Weekly U.S. Debt and Fed Assets Update

Not sure about the point of disagreement. I'm just stating the fact that housing activity would be slower without the Fed's aggressive intervention. For the economy's long run health, however, slower activity today (= lower prices) would be a good thing. I agree that holding interest rates artificially low (30 yr mortgages around 5%) can only temporarily prop up a market that has farther to fall.

Coinstar and Netflix: Two Shorts on Movie Rentals

Your Netflix thesis is flawed because your valuation metric is wrong. P/E is a meaningless metric. EV / Unlevered FCF is more relevant. From that perspective, Netflix is trading at a much more appealing valuation: 10x trailing cash flow.

I'm not long myself. I was just looking into the short thesis a couple weeks ago and noted that everyone is overlooking the valuation on cash flow...

I explain the superiority of EV/UFCF vs. P/E on the tutorials section of my blog: optionarmageddon.com

FASB's FSP Decisions: Bigger than Basketball?

Fantastic work Jack. Thanks for breaking this down.

Open Letter to FDIC: Please, No Legacy Loans

I have created an online petition if you'd like to sign this letter:

www.ipetitions.com/pet.../