C Forum Topics
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- American Express Calls Investment Banks' Bluff [view article]
- Wait for August FFIEC Call Reports Before Taking a Long Position in Banks [view article]
- Citi, Merrill, WaMu: Death Spiral Financing [view article]
- Dow 30 Performance Since 7/15 [view article]
- Beware the Big Financials' Dividend Trap [view article]
- Thursday Options Update [view article]
- Tuesday Options Outlook: EMC, XLE, USO, GS, WB, C, CROX, LOGI [view article]
- Citi vs XTO Energy -- Cramer's Stop Trading! (7/24/08) [view article]
- 25 Ways to Tell a Banking System Is Unsound [view article]
- Investing in Dividend Paying Companies [view article]
- Financial-Dip Buyers Forget To Ask What's Next [view article]
- The Facts Behind the Coming Congressional Mortgage Bailout Bill [view article]
loading ...Recent C Articles
- Friday Options Update: XLF, C, CROX, JNPR, GDX, TOL, UHS, COLM, TEN
- Thursday Options Update
- American Express Calls Investment Banks' Bluff
- Dow 30 Performance Since 7/15
- Wait for August FFIEC Call Reports Before Taking a Long Position in Banks
- Bank Bailouts or Bull?
- Beware the Big Financials' Dividend Trap
- 25 Ways to Tell a Banking System Is Unsound
- Want to Buy a Citi Letter?
- Citi, Merrill, WaMu: Death Spiral Financing
- Full List of Articles »
American Express Calls Investment Banks' Bluff [view article]
First of all, AMEX does offer both charge cards and credit cards. For those that don't know the difference, charge cards have to be paid off each month while credit cards don't.FXTrader, how can Visa and MA have lower net-worth clients than AXP when V's and MA's clients are banks?? Please explain.
I am a AXP charge card holder and have a annual fee of $400. This still have not swayed me to give it up. The card is a more prestigious card and carries extra benefits.
The big concern to me is when the Option ARM mortgage loans recalculate. The first problem is that these loans offer a low payment based on a 1%-2% interest rate. Howeverr the payment on this rate does not even cover the interest accruing on the loan at an actual rate of about 7.5% which can adjust each month. This loan is better known as a negative amortization loan.
BUT the largest problem is the way banks recognize the income. Banks are allowed to recognize the full P&I payment based on the 7.5% rate even though they are getting paid on the 1%-2% rate. It is deferred income but still recognized. This is a bigger issue than any credit card issue out there. Reply
Montreal
Wait for August FFIEC Call Reports Before Taking a Long Position in Banks [view article]
I am in the same situation as Norm, so I understand. But when all this mess will be cleaned up there will certainly be some winners. I mean people will still need banks and will tend to go to safe/strong institution. The question everybody should ask now is 'who will be the winners? The time it will take to recover is less important as long as you keep receiving the dividend you need for living. Personnaly I put my bet on Bank of America. Replydreamer
Citi, Merrill, WaMu: Death Spiral Financing [view article]
Merrill is and has always been a $45 stock going by old standards.the problem Mother merrill is having is inside it`s own doors - Enter the new commander in chief / savior of the falling giant.
mother Merrill has more sleeves with more tricks to show us - this is a good buy time.
Billle toe dreamer. Reply
American Express Calls Investment Banks' Bluff [view article]
The article overlooks the vital business charge card expenditures (due at end of month) that is Amex's bread and butter. There are significant cut back there, as well as in the expenditures in the retail side of the business, again where most of the charges are due at the end of the month (eg, not revolving). ReplyFed-up
Wait for August FFIEC Call Reports Before Taking a Long Position in Banks [view article]
This is a first.....no doom and gloom....just the facts and a strong recommendation to do your homework before you dive in. I've been long in bank preferreds for years and I'm getting killed. Can't bail because I need the income stream...I'm retired....and I can't turn the paper losses into real ones. Here's hoping for no imminent defaults. But I have nothing but kudos for the author on this one. I think his facts are not sensationalism, just the truth, and his advice is good. Nice work....for a change!!!!!!!!!!!!!! ReplyDow 30 Performance Since 7/15 [view article]
Why can't McDonald's breakout...reports record European profits and it barely moves. This market is STUPID. ReplyDow 30 Performance Since 7/15 [view article]
the "bush" league administration is taking our government down more and more. taxes MUST increase with the new President to save the $$$ and save Our Country! Thank God, king george iii will finally leave the throne of ignorance .......... Hurry Jan 20th 2009!Please hurry...... please! Reply
American Express Calls Investment Banks' Bluff [view article]
remember what WFC said, did boost their earnings? a huge increase in their credit card business. Give me a break! it seems they generated lots of fees and profits there which will come home to roost over the coming quarters and years.and to all the V and MA-lovers who immediately react if their darlings are mentioned with axp: the author didn't state that V or MA were in trouble. he simply wanted to illustrate the point that axp has a higher net-worth and higher turnover-clientele than the two. and that therefore, a deterioration here is extremelx significant for the financial sector. so sit back and relax. nobody slapped your two darlings.
funny. really. Reply
Beware the Big Financials' Dividend Trap [view article]
Hey no one said it wasn't dangerous out there. Land mines, booby traps.. No risk.. no gain. For me I accept the high risk for the end results. ReplyThursday Options Update [view article]
chtrplyer-why would that be?
You had some calls expire worthless?
Do you always wish ill on people or you just had a bad day?
Reply
Jacome
Tuesday Options Outlook: EMC, XLE, USO, GS, WB, C, CROX, LOGI [view article]
those CROX calls are worthless -- stock down 55% on Thursday...this has to be one of the worst management teams I have ever seen ReplyAmerican Express Calls Investment Banks' Bluff [view article]
I think many do not know that American Express classic card holders MUST pay their charges each month, and do. They have been trying to convince me after over 40 years with them to sign up for one of their "defaultable"... credit charge cards so I can spend hundreds of dollars of interest in addition to normal merchants' charges they get. They are apparently not clear on the concept of their own cards and clients.I knew they must be hurting because I am recently getting at least five emails and three post mailings a day for some new schemes I don't want or need.
Some friends tell me Amexco are cutting monthly charge limits on some of their BIG business clients who have always paid on time. It looks like we'll all have to start getting cash at the bank like in the olde dayz and carry a Glock! jeeeeeziz... Reply
Beware the Big Financials' Dividend Trap [view article]
You're right about the dividend trap part...but wrong on the lack of subprime exposure in STD, as jontyjones pointed out. Btw, am long LYG..which is ALSO way underwater, but at least the divvie seems safe.old trader Reply
ind
Citi, Merrill, WaMu: Death Spiral Financing [view article]
Are you shorting these stocks? If you are, then you are biased. ReplyCiti, Merrill, WaMu: Death Spiral Financing [view article]
First let’s consider Mr Bonderman is not stupid and has more insight into WaMu situation than the average Joe. (You don’t throw 7 Billions into a risky business just for kicks).Second, let’s not forget that Mr Bonderman business is into take public properties out of the market and make them private.
Third, Mr Bonderman said he has no rush to recover his investment and also has a 25 Billion war chest sitting in his lap.
The terms of the deal with Wamu seems like it was designed to be a first round of financing to take the bank completely, wait a couple of years until the dust settles and cash his way out.
Let’s assume WaMu needs 6 Billion more capital… I bet he will not commit that kind of money in a completely distressed business without some considerable discount. $3 Dollars per share will be around 30% discount of its current price so for simplification lets use that number (if the price is less than $3 the numbers will be much nicer for him) .
If that were the case Mr Bonderman will invest 13 Billons, and obtain 72% of the shares at an average price of $3.36 (the book value of the adjusted shares will be $ 7.0).
Today selloff was about 20% of the outstanding shares and most likely most of today sales were shorts, at first sight this is a no brainer short: either the company goes bankrupt and the value of the shares goes to $0 or there is a new capital injection (PLUS the “full ratchet” compensation) that will dilute the value of the shares considerably, so there is no way to lose …
But let’s remember that someone is buying at the other side of those short sales… What would happen if some of the friends of Mr Bonderman are actually buying those shares?… What would happen if Mr Bonderman does inject the needed capital AND offers to buy the remainder shares at around $ 7.0 dollars (The new book value) in order to take the company private?
Oh boy, that would be the perfect short squeeze! The mother of all Bear Traps
Mr. Bonderman friends don’t need to sell any time soon. The shares will jump in value to the $ 10’s because there wouldn’t be many shares left to sell and many of those shorters may want to cover their bets…
No matter if Mr Bonderman does indeed buy the remainder shares or not… the shares will be around $7.0 for a 100% return of his investment… And if they manage to pass the storm the bank could easily reach $ 15 in 2 or 3 years down the road…
Reply