skwestorange

Analyzing the U.S.'s Four Largest Banks

Very good articles with copious data and charts to make the point.
Fwi hits nail on its head.
Glass Steagal should be reinstated and commercial banks should be separated from investment banks.
To the commenter who is high on Citi, I wonder what gives him that confidence since the Company is being being dismembered and its earnings potential is being reduced with each divestiture. Finally, I don't think our Pols have the will to do what is right, i.e., bring back Glass Steagal and break up the combo banks. I am afraid that we are destined for many decades of pain and agony similar to Japan.

A Tale of Two Banking Worlds

You buy C if you want an out-sized risk/reward proposition in your portfolio for say five years or more. It is like a lottery ticket but one with the US Government backing.

Why I Sell Put Options (Part I)

Perhaps you should at least mention the fact that this is naked put sell that has option requirement that is marked to market daily. In down trending market this alone could put a lot of stress in the account. Also mention that the account must be approved for such option selling before it can be done.

Predicting BofA's Share Price (An Advanced Model)

From Figure 1 it is very difficult to see that this model predicts the price. There does not seem to be any lead-lag relationship between the black and red lines.

Converting TARP's Preferred to Common Stock - Great Idea

I think the author's position is based on the fact that corporate executives and managers' compensation includes RSUs, options and stock awards (not fixed income instruments). Hence they are bound to be more inclined to take care of their own interests.
SK

An Unconventional Option - Go Long Financials

Don't forget that the more in the money you go, less is the time premium and hence the chances of a premature assignment, likely just when the stock moves down due a headline.

Investors Staying Away from Banks; Gold Attempts to Break Downtrend

Mark to market rule should be replaced with mark to reality. That is, each financial institution should mark or revalue assets each quarter using the previous three-quarter rolling average of the default experience in the respective class (e.g., RMBS, CMBS) for the specific institution. This will result in effectively addressing the problem in a smooth and gradual manner while reflecting real world default experience unique to each asset class. It will avoid arbitrary discounts assigned to a whole lot assets because of fear and the lack of a valid tradable market.

Unintended Consequences of Four Government Policies

I think mark to market should be replaced with mark to real world experience with defaults. That is carry assets at their cost and mark them down each quarter based on the previous three quarter average default percentage. This way, we have a reasonable way to value assets based on the real world experience and markdowns will be smooth and gradual not to disrupt the balance sheets based on irrational fear/guesses.

Nationalizing Bank Losses

Folks: Take a look at the proposal in Sunday NYTimes Opinion section by Max Holmes titled "Good Bank, Bad Bank, Good Plan, Better Plan." The proposal in effect is a no cost to taxpayers bad bank solution that could be implemented quickly. It is worth a discussion. Here is the link.
www.nytimes.com/2009/0...
This proposal involves a way for the government to assume the banks toxic assets without printing new money. In effect the proposal is to take the bad loans at their year end book value and also assume the banks liabilities for a corresponding amount. This leaves the rest of the bank with a good balance sheet that could attract private capital and resume its normal banking functions.

Turning Japanese: The Audacity of Reality (Part 3 of 3)

This blog with all of the back and forth could provide nice background material for wonderful TV series on what Joe and Jane of the USA needs to know to appreciate the depth of the mess we are in. Hopefully some Public TV producer reads this and takes a serious look at the info here and uses it quickly. The sooner it is done the better off our present and future citizenry will be.

Who Is Buying Financials?

Remember GE's Immelt did it when the stock was at 30.00? We know the story of Buffet's buys of GS and GE and WFC. Not sure the inside hanchos buying means what it used to. I think this may be one of those moves by Lewis and Dimon to divert attention for the real challenges at these banks.

'The Change We Need' Is in Economic Direction

Steven Hansen has indeed summarized the real issues confronting us very well and stated the need for a new economic vision very well. That is what we need to help our great grand children bear the burdens we impose on them.

The question is who is going to lead and see this effort thru for the benefit of the public at large. As a layman who reads a lot on US and world economics, I doubt that absent a benevolent dictatorship (utopian as it may sound) there seems to be no way to effect change of the type being advocated in our society.
Pols and business leaders are human too and they of course seek to cover their own and their cronies' bases first and that too at public expense. So, may be our scientists have to invent new gene or whatever you may call it that brings about a change in human behaviour. Perhaps a generation of this altered species can bring about this change.

Five Strategies to Survive the Markets

Rocknbob: Guess Econ 101 intends SWF to mean Sovereign Wealth Funds.
I too agree that it is time to start moving into Healthcare with stocks such as UNH, CI, AET, Wellpoint and financials slowly

Financial Sector Value Trap: The Worst is Far From Over

This article just restates the known but offers little data to support its challenge of Countrywide's statement of expectation of profit in the next qtr.