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Tom Lindmark

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  • PIMCO's Bill Gross Sees a Bleak Future [View article]
    I tend to agree with you. I too have seen too many end of the world cycles that turned out to be bumps in the road. This one is a big bump but I suspect that somehow enterprising Americans will figure out a way to get through this one, reinvent some businesses or invent some new ones and send us off on another good track. The only thing that can probably keep that from happening is too much "help" from the government class.

    On May 31 12:47 PM Phil Trupp wrote:

    > Bill Gross is a conventional corporate thinker. As such, he is hardly
    > a reliable prognosticator. Still, there are bits and pieces of wisdom
    > in what he says, truisms we all know. He takes into account the obvious
    > indicators upon which other writers have elaborated, but he has failed
    > to see that action at the surface of the financial world almost never
    > reflects what is happening in the deeper, more opaque reality of
    > the ever-shifting world economy. The superficial (read immediate)
    > problems of the dollar will eventually be resolved out of sheer necessity.
    > Rates of global growth, nation by nation, are cyclical and are at
    > the mercy of unpredictable shifts in power and the often shocking
    > events of realpolitik. There's an old saying: "Bulls slowly climb
    > the stairs, bears jump out the window." Mr. Gross has done the latter.
    > Paul Krugman is right behind him, falling through space into a world
    > he has predicted will be a sunless abyss. Not long ago, he said if
    > we knew what was really going on in the economy, we'd buy up all
    > the canned goods and head for the bunkers. Forgive me for having
    > lived too long and having seen too much to wear the sandwich board
    > that cries, "REPENT OR PERISH!" We will work our way out of the current
    > crisis as we have worked through others, and we will do so by the
    > efforts of pragmatists, not hysterical "prophets."
    May 31, 2009. 01:15 PM | 17 Likes Like |Link to Comment
  • FDIC Continues to Sell Performing Commercial Loans at About 50% Off Book Value [View article]
    Unfortunately, you don't have enough data to justify the conclusions you reached.

    All of the loans in the schedule you published are as labeled commecial real estate loans. As such most if not all are going to have been advanced with an interest reserve. In effect, a bucket of money that was set aside to pay the interest on the loan until cash flow could be established by selling the property or leasing it up.

    So long as the interest reserve has not been depleted the loan is considered a performing loan by the regulators. It might be a half finished condo on which no work has been done for months but it's still performing so long as the bank can pull money for interest payments out of the interest reserve.

    The face that it's labeled performing on the summary chart doesn't mean squat. When that interest reserve runs out it's just another piece of junk. If you had the details of each loan and could analyze them individually you could reach some conclusions about the prices paid but not with what you have here.

    One other thought. Though I think the banks are overvaluing legacy loans, the argument that they make is that the value they ascribe to them is on a hold to maturity basis. To the extent you try and compare that valuation and the valuation of loans sold on an auction or fire sale basis you are comparing apples with oranges.

    May 12, 2009. 10:25 PM | 6 Likes Like |Link to Comment
  • Paulson Throws Bernanke Under the Bus, Backs Ken Lewis [View article]
    MAC means material adverse change. Many contracts contain MAC's which allows one party or the other to back out if an event happens that alters the basis for entering into the contract. They're very hard to enforce.

    On Apr 23 03:56 PM Jim Benham wrote:

    > Mr. Lindmark:
    > What does MAC stand for?
    Apr 23, 2009. 04:36 PM | 5 Likes Like |Link to Comment
  • The End of the Welfare State - Coming Someday [View article]
    Wow! I didn't realize that I was forecasting that result. Actually, I have a great deal of faith in the staying power of capitalism. I just think that it's going to take a major crisis to move the country back towards a more sustainable form of that sort of economy.
    Dec 9, 2010. 08:09 PM | 4 Likes Like |Link to Comment
  • Madoff, Stanford Sagas: New Twists [View article]

    Did he kill himself or did one of his investors do the job?
    Feb 20, 2009. 04:32 PM | 4 Likes Like |Link to Comment
  • How the States Are (Barely) Coping [View article]
    I guess the jury disagrees with just say whoa. Can't imagine why. Lots of great comments here. I hope a couple of you don't mind but I intend to use them in a post on my blog tomorrow.

    Thanks for reading this article.
    Feb 17, 2009. 11:55 PM | 4 Likes Like |Link to Comment
  • Let's Fast-Forward to a New RTC [View article]

    Here is a link that might help with your decision. The post is about Citi but probably applies just as well to BofA.
    Jan 17, 2009. 10:45 AM | 4 Likes Like |Link to Comment
  • Tesla's Non-GAAP Fairy Tale [View article]
    Excellent article. I wrote a critical piece on the nonsensical price of Tesla stock that appeared on Seeking Alpha in March. Like you, I was inundated by comments from the Tesla True Believers so I decided to skip it this quarter. While bothered by the non-GAAP games they played in their announcement I found the brokerage communitys' flogging of those numbers as real particularly egregious.

    One point in your article may need some more elaboration. When you sell a car for cash not 100% goes to the bottom line. Some of it has to go to future warranty expense. I have looked briefly at Tesla to see how much they're reviewing for this future liability but haven't found the figure. Have you noticed how much they're setting aside?
    Aug 9, 2013. 07:39 PM | 3 Likes Like |Link to Comment
  • Regulatory Reform: The New Geithner Plan [View article]
    Not bad advice. I agree with a lot of your points.

    On Sep 05 04:29 PM Stimpy wrote:

    > We are on a path towards a utility model of banking. Banks will emerge
    > (as credit is re-privatised) as the central intermediary structure
    > in our economy, replacing the non-bank securitizing model.
    > Banks will continue to use securitization (more of a covered bond
    > model with clear, formal reps and warranties) as a balance-sheet
    > optimization tool.
    > We will see a (Fed and Treasury sanctioned) evolution towards 5-10
    > large banks with virtually total market share.
    > These banks will be almost beyond profitable--in a very low risk
    > sense.
    > The economies of scale they will enjoy will allow spread lending
    > to sustain profits WITHOUT excessive leverage.
    > Credit velocity in the general economy will suffer (relative to the
    > 2006 orgy-years) as a result, making equities of all kinds a less
    > favorable asset class.
    > Banks will be the one exception; in a sense they will be taxing the
    > rest of the economy for many years to come.
    > These regulations make much of this both clear and inevitable.<br/>
    > Buy the biggest banks and avoid all other stocks over tyhe medium
    > to long term.
    Sep 5, 2009. 05:11 PM | 3 Likes Like |Link to Comment
  • Thoughts on New Home Sales and Durable Goods Data [View article]
    Actually, the new homes sales data is based on contracts signed not escrows closed. There are always some cancellations and during the worst of the crisis there were many. The figure isn't absolute but it's useful for period to period comparisons and now that things are settling down, the cancellation rate is trending towards the norm.

    As for the spec homes that you point to as seeing a decline in sales, most are guessing that the bulk of new home buyers have been first time buyers who are opting for stripped down smaller houses. The existing inventory tends to be bigger homes with lots of upgrades, thus out of the price range for fist time buyers.

    On Aug 26 08:03 PM qqq fox wrote:

    > I am surprised no one has dug into today's new home sales report.
    > If anyone bothers to get to page 4, they would find that sales of
    > new homes that are finished and ready for occupancy were actually
    > down 6%. The category showing the biggest gain, 33%, was for homes
    > that haven't even been started yet. In other words, they are merely
    > sales contracts that are entered into without any mortgage financing
    > being lined up. Desperate builders will sign these no money down
    > contracts with the understanding that nothing will happen until the
    > buyer comes in with a downpayment and mortgage financing. That these
    > sham deals are allowed to be counted at all shows the political clout
    > of the NAHB. Very misleading to say the least !!!
    Aug 26, 2009. 08:39 PM | 3 Likes Like |Link to Comment
  • Jobs Improve, Retail Sales Still Weak [View article]
    Agree with both of you. It doesn't tell you anything except were wallowing around in a very bad job market.

    On Jun 04 05:13 PM billddrummer wrote:

    > I tend to agree with dw57. A gap downward of 50,000 would be statistically
    > significant. A gap downward of 4,000 is statistical noise.
    Jun 4, 2009. 05:40 PM | 3 Likes Like |Link to Comment
  • New Home Sales Up Slightly, But Mortgages Aren't Pretty [View article]

    See Zouk_man's comment below yours. He probably has more of an intuitive grasp on the market than I do or than most of the experts. I don't know if the "feeding frenzy" has any depth or is just a mile wide and an inch deep. I think it's probably the latter but I'm not convinced that the typical American still doesn't think that he can make a fortune in the housing market. If that's the case then so long as the government pumps in the money it could well lead us right back into a bubble.

    Just think what it might have been like if the government had stood ready and willing to lend money to all of the investors who probably were convinced that market would recover.

    On May 19 10:11 PM Ricard wrote:

    > Thanks for an informative article. Out of curiosity, how significant
    > is this 'feeding frenzy' in the overall picture for housing? Is
    > it, say, a significant minority of activity, or is it so niche as
    > to be nothing more than a curiosity?
    May 19, 2009. 11:09 PM | 3 Likes Like |Link to Comment
  • FDIC Continues to Sell Performing Commercial Loans at About 50% Off Book Value [View article]
    You're conflating a lot of different things. The post this author wrote is about commercial real estate loans though he mislabeled them commercial loans. The loans being discussed here have nothing to do with single family loans or residences.

    On May 12 11:25 PM dybydx wrote:

    > Tom Lindmark,
    > Isnt the point of the program is for the gov to buy up these real-estate
    > papers and hold it till maturity to prevent home owners from forclosure?
    > Instead, FDIC is selling these paper so more homes can be foreclosed
    > while the raised capital being used to pay bank debts used to pay
    > credit default swap contracts at 80/90 cents on the dollar?
    May 12, 2009. 11:54 PM | 3 Likes Like |Link to Comment
  • Commercial Real Estate: What Hancock Building's 50% Sales Price Means [View article]
    Oops. Actually, I was just trying to see how closely SA's readers looked at the pictures.
    Mar 31, 2009. 03:33 PM | 3 Likes Like |Link to Comment
  • Lennar: Picking Calpers' Pocket [View article]
    Oops. Sorry about that billion trillion mix-up. I'm getting jaded when it comes to big numbers. Thanks for the correction.

    By the way the land doesn't have to go to zero for Calpers to lose everything. It just has to decline to a point at which it is worth less than the debt on the property. Pretty likely. I'd bet that Calpers doesn't walk away with anything.
    Mar 20, 2009. 11:25 AM | 3 Likes Like |Link to Comment