Reggie Middleton

http://boombustblog.com
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31 Comments

    • Fri Aug 15th 20:09 PM | Rating: 0 0
      Commented on:
      Don't Believe the Lies: Ride the Bank Stocks Bull
      I no longer post or contribute to Seeking Alpha, but felt compelled to jump in here. One of the readers from my blog pointed this article and comments out to me. I'll keep it polite and professional, but I disagree with the author and the commentator who states that banking is all about the spread. If that was the case, then the drop in the Fed Funds rate would have saved everybody. Instead, 4 banks went out of business and many, many more are up to bat. Many in the commercial and investment banking industries are effectively insolvent - plain and simple. There will be assets to pick up after the blow up, but going in now will be throwing good money after bad, just ask all of the brand name value investors and the sovereign wealth funds.


      View article »
    • Thu Jun 5th 08:18 AM | Rating: 0 0
      Commented on:
      Lehman: The Lying Lemon Lemming Anecdotal Timeline?
      I meant 30 page forensic analysis reports, not 3 page. One of the biggest faux pas in my work is copy editing:-)
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    • Thu Jun 5th 08:16 AM | Rating: 0 0
      Commented on:
      Lehman: The Lying Lemon Lemming Anecdotal Timeline?
      For some reason, the editors at seekalpha decided to link to a pdf generation tag, rather than the actual article, which has significantly destroyed the value of the message trying to be delivered. See the post here: boombustblog.com/compo.../
      and the follow up to it here: boombustblog.com/compo.../.

      I would like to make it clear that the content of my articles are often modified without my consent by the seeking alpha editors. For and unadulterated version of anything that I write, always refer to my blog: boombustblog.com. It may come a time where the diminishing returns of the exposure on SeekingAlpha may be outweighed by the dilution of the percieved content as is modified, and filtered through, the seekinglpha business model.

      There is actually an interesting dialog about this here: seekingalpha.com/artic... and I have many of the same complaints and positive observations that have been brought to light in that forum.

      Of course, I find my content to be of unusual value (at least it is for me), for my analysis and opinion is generaly significantly more documented and indepth than most of what is freely available on the Internet and free (or pay) blogs. It also has (knock on wood) and uncannily accurate and profitable track record. Since I feel this way, I am concerned about dilution of brand. More than once credit for my work had been given to SeekingAlpha versus Reggie Middleton or BoomBustBlog.com, despite the fact that there is scarcely any 3- page forensic analysis reports to be had here outside of what I post - and most of it is rejeced due to its complexity.

      I am curious to see how, if at all, the SA business model wil morph to retain contributors who deliver higher end commentary and analysis, since that is what will ultimately enable them to deliver the valuation to command a truly profitable buyout.
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    • Wed May 28th 20:10 PM | Rating: 0 0
      Commented on:
      Reggie's Asset Securitization Crisis Analysis Roadmap (to date)
      Whenever you need access to any thing that I do, always refer to my site. Seeking Alpha only carries about 20% to 30% of the stuff that I release to the public anyway.

      boombustblog.com is where you will be guaranteed to find the meat.
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    • Fri May 23rd 14:21 PM | Rating: 0 0
      Commented on:
      These 32 Commercial Banks and Thrifts May See the Dung Hit the Fan
      You guys are funny. This is one of a 15 part series, and each and every point you have made has or will be covered in complete detail. Do you guys mean to tell me that you have read all of the links and text in the article before you posted these comments?

      There is much to learn. Be sure you come by the blog for the last five installments.
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    • Sun May 18th 19:42 PM | Rating: 0 0
      Commented on:
      Don't believe Paulson: S&L 2.0, the Bank Failure Redux
      This is the correct link to the counter party risk article: boombustblog.com/compo.../

      I also suggest reviewing the logic behind my PNC short. I will be expanding upon this for a while: boombustblog.com/compo.../

      Re: e2800
      Many a broke person has assumed that they can just consider fundamental analysis moot. Think back to the dot com bust, the housing bust, credit bust, tulip mania, the list can go on for some time. The markets are not truly efficient, and thus in the short time it is quite possible for market movements and fundamentals to diverge. That is how the more knowledgeable and more resourceful make money. One could never buy an undervalued stock not short an overvalued stock if the market instantaneously reflected the accurate fundamental value of a company's share price. Guys like me would always be broke!

      Over time though, history has never shown where the market fails to converge with the fundamentals, and sometimes quite violently.

      In addition, ust because one does not fully grasp the fundamentals behind a price does not mean that those fundamentals do not exist.
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    • Fri Apr 25th 03:26 AM | Rating: 0 0
      Commented on:
      Ambac Does It Again
      FXtrader, you are being contradictory. Either its proven or its a decade long. It can't be both, particularly in insurance where some risk and loss tails can actually be ten years or more. Buffet's own president of BHAC says the bond insurance industry's future looks shaky. Bond insurance is based on taking advantage of an incongruity of rating corporate and muni debt, and incongruity that is now being corrected.

      Buffet who now owns a bond insurer even stated that you can get into a lot of trouble charging 50 points (usig leverage) that the market charges 100 points for. That is actually common sense.

      Since my job is an investor and not a reporter, academic or professional blogger, the only thing that really does my credibility disfavor is negative or minimum alpha over an extended period. I thank the powers that be -thus far I seem rather credible.
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    • Sun Apr 20th 18:46 PM | Rating: 0 0
      Commented on:
      Some Key Observations on KKR Financial
      Thanks for being polite this time around. I can assure you that I am neither an analyst wannabe or a momentum player, but a fundamental investor. I hold my positions until my thesis is proven right or proven wrong, usually a bare minimum of three months but I will go long or short over a year with no problem. Since Seeking Alpha usually rejects much of my work due to its length and complexity, you don't get to see most of it, but if you go to boombustblog.com you will see: Ambac, MBIA, WAMU and Countrywide since 9/07 (or thereabouts), Bear Stearns since January 08, home builders since September, etc.

      Download the reports, which average about 20 pages each of original and proprietary research. It should be well worth it. This is it for comments on Alpha for right now, but I look forward to seeing you on m blog.
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    • Thu Apr 17th 10:05 AM | Rating: 0 0
      Commented on:
      Some Key Observations on KKR Financial
      The reason why you haven’t heard from me Mr. Bloom is that I generally do no comment on Seeking Alpha – whose comments section is rife with the negative, unprofessional attitude that is represented by your posts. It is time consuming and I have my own blog for commenting and interaction that I am quite active with. Feel free to come over to boombustblog.com and we can engage until your heart is content. The issue with KFN was an error and oversight on behalf of one of my younger analysts which I take full responsibility for since I hired him and the post was made under my name. It was an egregious error, but an error nonetheless – and they do happen.
      It is highly irrelevant what would have happened to an analyst on the street (I didn’t fire my analyst for this, since mistakes do happen and we’re not on the Street), how long you have been working as an analyst, or how much other (big or name brand) investors invested in KFN. I often invest contrary to much larger or name brand investors, and do so quite profitably, regularly. One should never base their investment thesis on what XYZ investor did or did not do. Since I am not an analyst or bank employee, but a buy side investor that eats what he kills, my theses are either correct or I don’t eat. In general, I have eaten quite well.
      My track record speaks for itself, and a quick perusal of my blog, marked to market, should be deserving of more than the disrespectful tone resonating from your comments. I am also quite confident the record reflects quite favorably compared to whatever institution you may be referring to in regards to the bar for analysts. It is quite possible to disagree without being derogatory, but if you are going to be derogatory (which is lacking in professionalism and plain old fashioned manners) you should at least have a firm empirical basis for doing so.
      The aforementioned litany is basically the reason why I don’t comment on Seeking Alpha, but since an error was made on my watch and printed under my name, I felt compelled to bend the rules this time around to address it. Will I see you on my blog, Mr. Bloom? You are quite welcome there.
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    • Wed Apr 16th 08:53 AM | Rating: 0 0
      Commented on:
      Talk of a Real Estate Bottom Already Is a Waste of Breath
      This is a very opinionated bunch. I'm glad to see I stimulated some conversation. It is quite interesting to see squawk tell me, a successful real estate investor for the past 8 years, that my missive "illustrates a complete lack of understanding of the real estate market". I guess I bettergo back and unravel all of those deals... Squawk, read carefully. Each market is different, I had one article to write. Come visit us on my blog and we can go over this in detail.

      Tcorneilson: "Remove Arizona, California, Florida, Nevada and a few other coastal markets" and remove X and Y and Z and ... We only have 50 states...

      There is a lot of negative criticism on Seeking Alpha, much of it ucalled for. I think many a pundit could use a hug:-)
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    • Fri Mar 28th 10:30 AM | Rating: 0 0
      Commented on:
      Assured Guaranty: Vulnerable to Continued Bond Market Troubles
      You guys on Seeking Alpha sure happen to be a negative, criticizing bunch. The AGO analysis was very objective in my opinion.

      @NOYBIZNIZ
      "Last time I checked (just a moment ago), MBIA has retained it's AAA rating from all three agencies. "
      I suggest you check again. MBIA and Ambac are on negative watch - or it's equivalent, if I am not mistaken and Fitch has withdrew the AAA moniker from Ambac and most likely will do so for MBIA. Research the back and forth between Fitch and MBIA CEOs. AGO, at this point in time, has no such issues. Take a chill pill and practice positive reflection. It is quite possible to be critical of one's work without such a negative overtone.

      @ Mr. Mortgage
      I agree with you 100%. The amount of analytical rhetoric put into that comment does make you wonder... You are also correct about the premise of the monoline business model. What these companies are trying to do is sell protection for less than what the market charges. In order for that to work, the market must be consistently wrong in its risk pricing, which is highly unlikely. Any profitable arbitrage situation is, by definition, transient in nature for market participants adjust their view to compensate for the over/under compensation of the risks and rewards inherent in the arbitrage. So, even if X monoline insurer has found that the market is overcharging for said Y risks, the market will adjust once it realizes that X monoline is profiting from said mismatch. This is why arbitrage strategies must be changed regularly in order to be successful. Fool me once, shame on you, fool me twice, shame on me.

      @User 169224
      I don't have the time to address your rather lengthy, but apparently well thought out post. I do invite you over to the blog boombustblog.com where we have a few P/C, reinsurance, and risk management experts, and my analysts who will be happy to engage in fruitful discourse, not to mention yours truly. Let me address what I have time to quickly though:
      - The title was given by seekingalpha staff, not me. I titled the piece, ”My AGO Update”.
      - I declared AGO to have some of the most astute management in the business. This is a positive thing, no?
      - AGO itself has approximately (I can't remember the exact number) 100% of the value of its equity under watch as being at significant risk for default. It is not as if everything is rosy in wonderland.

      - Insured muni risks have a plethora of funding sources. Please reread the report more carefully. I believe that many of these risks will have higher than historical mean losses, but they are also more diverse than you assert. In any event, many munis would be rated at a level that allows them to forego insurance if they were rated at the same keel as corporate and the ratings agencies are succumbing to those pressures. Moody’s has agreed to do so going forward, which eliminates a large swath of monoline business.
      - You stated "Muni Credit- Can't have it both ways, on one hand you say there are losses in this sector on the other hand say that all these issuers can go direct and still get AAA". This statement shows that you have been drinking the ratings agency “Kool Aid”. Does triple A automatically mean that no losses will be coming down the pike. I strongly suggest that you peruse the news from the last few months or simply Google Triple A and losses. Try this interesting article on for size:
      "None of the 80 AAA securities in ABX indexes that track subprime bonds meet the criteria S&P had even before it toughened ratings standards in February, according to data compiled by Bloomberg. A bond sold by Deutsche Bank in May 2006 is AAA at both companies even though 43% of the underlying mortgages are delinquent.
      Sticking to the rules would strip at least $120 billion in bonds of their AAA status, extending the pain of a mortgage crisis that's triggered $188 billion in write-downs for the world's largest financial firms. AAA debt fell as low as 61 cents on the dollar after record home foreclosures and a decline to AA may push the value of the debt to 26 cents, according to Credit Suisse Group.
      “The fact that they’ve kept those ratings where they are is laughable,” said Kyle Bass, CEO of Hayman Capital Partners, a hedge fund that made $500 million last year betting lower-rated subprime-mortgage bonds would decline in value. “Downgrades of AAA and AA bonds are imminent, and they’re going to be significant.”
      from financialweek.com: www.financialweek.com/...
      Basically, ratings and losses, at least for the last two years do not bear the correlation that many of the monoline bulls would like them to – and this applies to more than just mortgage fixed income securities as well. If you have been following closely, the municipal sector is already showing chinks in the armor, and we have are just getting started.
      - I don't want to toot my own horn, but I have a fairly decent track record at this analyzing company investment prospects stuff. Why don't you come by the blog or even "objectively"... browse through the research that I put on seekingalpha (that is far from complete, which is why I suggest the blog) and judge me based more on my macro accomplishments rather than your opinion on one particular company? I would like to believe that I have built some credibility, or is that just pie in the sky wishful thinking?
      - The number of viable competitors has decreased significantly in the monoline space, but the actual competition itself has not decreased as much as the landscape of opportunity has shrunk. Many municipalities have gone the direct route, and many more are going with insurers that have no structured product taint, ex. B. Hathaway companies. Buffet, et. al. has taint, no pressing need to raise "small" amounts of capital, ex. a billion or two, and tons of undisputed credibility. For the risk averse public official, this is a no brainer. Despite this, even the president of BHAC has stated that he is pessimistic on the future of the monoline industry. If anybody has a reason to be optimistic, it would be him.

      - The pdf report for download is very detailed with all assumptions fleshed out and is the most comprehensive work on the company that I know of. Unfortunately, I have not the time nor the inclination to rehash the researh contained within on a micro level here. If you wish to discuss it more detail, come over as I suggested earlier and we can have a pow wow. I think that’s enough for now, and look forward to seeing you on the blog.
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    • Wed Mar 26th 08:55 AM | Rating: 0 0
      Commented on:
      A Model Valuation of GGP
      The writings in "my" analysis states clearly:

      "However if we expect GGP to raise additional capital of $1.75 billion through private placement, GGP’s valuation increases to around $7.7 billion due to savings in interest expenses. However as a result of the dilutive effect (due to the increase in shares outstanding) GGP’s per share valuation declines to $26.5 (under our base case assumption), implying a further downward potential of 35.3%."

      Thus, not only did we take into consideration the equity captial infusion, we took it at 2x what actually occured. These numbers are very conservative. I hope you would read a little more carefully before being so critical.

      I diluted the guest commentators numbers to reflect the equity dilution and you are right in that I didn't include the funds from the offering explicitly - which is why the they are "comments" in italics and the original commentary and numbers are there for all to see and agree or disagree with as all deem fit.

      I very rarely get around to commenting on Seeking Alpha, so anyone who has questions or comments that they actually wish to be addressed should direct them to my blog, boombustblog.com. I will be glad to engage you there where I appear on a regular basis.
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    • Thu Jan 3rd 15:21 PM | Rating: 0 0
      Commented on:
      Moody's Affirms Ambac, MBIA Ratings - Losing Any Last Shred of Credibilty
      I seldom post on seekingalpha, so it took me awhile to get around to this, but the comments regarding the comparison of claims paying ability to actual bonds are correct. I made a boo-boo/typo.

      The leading sentence should read "Ambac is just as safe as Berkshire Hathaway...". The lead in sentence was to illustrate the absurdity of rating these companies who may have to suspend dividends, b forced to access additional capital, rely on AAA ratings to survice and who insure toxic products, AAA. I thought I got my message across. I will be more careful with my comparions in the future.
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    • Thu Jan 3rd 15:08 PM | Rating: 0 0
      Commented on:
      Lennar's Insolvency: Enron Redux?
      It is interesting to see the feedbackto this article. For those who are interested in more, I have the Lennar report and model expanded available for dowload on my site (registration required): boombustblog.com/compo...,/

      I have a followup article that is not as optimisic as well - available both on seeking alpha and on my blog.
      View article »
    • Thu Jan 3rd 14:53 PM | Rating: 0 0
      Commented on:
      A 'Realistic' View of Lennar's Solvency
      Mr. Haskell, these articles are derived from my blog - boombustblog.com, and are part of an ongoing series. The preceding article, which I incorporated by reference, made it very clear that LEN's debt exceeded the value of their assets. This article begins "Last week, we ran a what if scenario assuming the greatest possible benefit towards Lennar's (LEN) favor in regards to their debt to asset situation, and we came up with insolvency."

      You are correct in that I did mistakenly exclude "book value" though.
      View article »
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