kotika98

Housing's Big Picture Isn't Pretty

what a bunch of bull! In America land is still unlimited, and home prices are a function of building cost only. You dont need to go back 50 or 100 years to try to guess what those costs are. Look at the annual report of DRHorton or Toll and you can find out precisely how much it costs to build every kind of house (depends on location a bit). Bare land values are 30-50K per lot and than cannot go neiter much lower not much higher. Bottom line - and those figures you cite confirm it, house prices go at the rate of inflation in the long run. Only in locations where land is no longer available without limit can prices become detached from building cost, and truly there is only Manhattan in the entire USA where there is not going to be an inch more of land to build.

Eight Reasons Bank of America Is Going to $20

frankly, the most amazing thing for me is the strength of the conviction of everyone about whether this or that bank is a good investment. The truth is that it is hard to tell how much a leveraged entity is worth when the shit hits the fan. The ASSETS are a trillion the LIABILITIES are a trillion, and the worth of the company is ASSETS - LIABILITIES. When you substract approximately a trillion from roughly a trillion you might get 20 billion, or 50 billion, or zero, or a negative number. It DOES NOT MATTER what the market cap is - whichever way, it is a crapshoot! And unlike the roulette at the casino, there is really no way to assign probability of the different outcomes. At least in the casino if you bet on the red, you know the probability to win is precisely 18/38 = 47%.

America's Insolvent Banks

"preferred shares, which I, for one, consider much closer to being liabilities than equity as far as a bank is concerned"

uhh.. please ... open an accounting textbook, before you say nonsense. There are only two kinds of items in the balance sheet, ASSETS and LIABILITIES. Both preferreds and common equity are liabilities.

America's Insolvent Banks

"a world of much stricter bank regulation, which means less opportunity for banks to gouge consumers when it comes to fees."

Someone should run for congress on this slogan.

America's Insolvent Banks

Felix,
"retained earnings" are a component of shareholder equity, so are a liability not an asset.