Joe Friday's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/112855/comments http://seekingalpha.com/article/169101-earnings-will-sink-blue-nile-s-stock?source=feed#comment-736160 736160 The real fools are the investors who entrust their money to those managers. If my money was in one of their funds I would be calling them up to find out their ratioinale for investing my money in NILE. That would be a fascinating conversation.]]> Thu, 29 Oct 2009 17:40:02 -0400 The real fools are the investors who entrust their money to those managers. If my money was in one of their funds I would be calling them up to find out their ratioinale for investing my money in NILE. That would be a fascinating conversation.]]> http://seekingalpha.com/article/169101-earnings-will-sink-blue-nile-s-stock?source=feed#comment-735342 735342 The key here is float analysis. The total share issuance is 14M.

According to Yahoo, 126% of all the shares outstanding are held by institutions and 3% are held by insiders finance.yahoo.com/q/mh.... I am not sure how this is possible, and it may not be entirely accurate, but it helps explain the manipulation. There is virtually no truly free float for the retail investors.
The total number of shorted shares is now 2.7M. But, it is important to note that during the run from 20 in March to 66 last week, the short position declined from 6M to 2.7M. With the float as tightly tied up as it has been, each bump in price has caused more and more weak shorts to cover (margin calls), and it has been hard to borrow, adding more short squeeze fuel. The short squeezes combined with the tight float has forced the price higher and higher. If you watch the trading in this stock you will note a tendency to have it run up in the early trading based on the margin calls and borrow calls from the previous day.
The tight float is indeed a two edged sword, however. Any large holder that trys to exit will drive this down very quickly. Nobody reallly beleives this stock is "worth" 65. The question the institutions need to grapple with is how do they exit and get their hands on the mirage value. In addition, the 3M shares that have covered are all waiting on the sidelines hoping to get in for the ride down...Any combination of selling of any size from those burned shorts or any one institution that trys to exit will burst the balloon.
The question is when will that happen, and can the shorts still holding wait until it does.

"the market can remain irrational longer than you can remain solvent" .. I believe the quote is attributed to Bernard Baruch.]]> Thu, 29 Oct 2009 09:53:03 -0400 The key here is float analysis. The total share issuance is 14M.

According to Yahoo, 126% of all the shares outstanding are held by institutions and 3% are held by insiders finance.yahoo.com/q/mh.... I am not sure how this is possible, and it may not be entirely accurate, but it helps explain the manipulation. There is virtually no truly free float for the retail investors.
The total number of shorted shares is now 2.7M. But, it is important to note that during the run from 20 in March to 66 last week, the short position declined from 6M to 2.7M. With the float as tightly tied up as it has been, each bump in price has caused more and more weak shorts to cover (margin calls), and it has been hard to borrow, adding more short squeeze fuel. The short squeezes combined with the tight float has forced the price higher and higher. If you watch the trading in this stock you will note a tendency to have it run up in the early trading based on the margin calls and borrow calls from the previous day.
The tight float is indeed a two edged sword, however. Any large holder that trys to exit will drive this down very quickly. Nobody reallly beleives this stock is "worth" 65. The question the institutions need to grapple with is how do they exit and get their hands on the mirage value. In addition, the 3M shares that have covered are all waiting on the sidelines hoping to get in for the ride down...Any combination of selling of any size from those burned shorts or any one institution that trys to exit will burst the balloon.
The question is when will that happen, and can the shorts still holding wait until it does.

"the market can remain irrational longer than you can remain solvent" .. I believe the quote is attributed to Bernard Baruch.]]> http://seekingalpha.com/article/167834-retail-sector-rebounds-part-ii-all-that-glitters?source=feed#comment-725804 725804
In general your "analysis", is exceedingly simplistic.]]> Thu, 22 Oct 2009 16:41:41 -0400
In general your "analysis", is exceedingly simplistic.]]> http://seekingalpha.com/article/164637-blue-nile-trading-on-thin-air?source=feed#comment-705182 705182 About 3M shares have been covered in the last six months, and this is the source of most of the run. It is not possible to justify the purchase of Nile on any other basis.
Those shorts that have covered are likely waiting to pounce on any weakness, and when they do the market makers will not pick up the paper on the way down. In addition, it is not possible to exit from this stock with any position of size without dramatically reducing the price. Thin floats are a two edged sword. ]]> Tue, 06 Oct 2009 11:51:35 -0400 About 3M shares have been covered in the last six months, and this is the source of most of the run. It is not possible to justify the purchase of Nile on any other basis.
Those shorts that have covered are likely waiting to pounce on any weakness, and when they do the market makers will not pick up the paper on the way down. In addition, it is not possible to exit from this stock with any position of size without dramatically reducing the price. Thin floats are a two edged sword. ]]> http://seekingalpha.com/article/152819-why-i-m-exiting-greenhill-co?source=feed#comment-610254 610254 Fri, 31 Jul 2009 17:14:16 -0400 http://seekingalpha.com/article/143468-has-the-well-of-merrill-reit-offerings-suddenly-run-dry?source=feed#comment-553579 553579 Fri, 19 Jun 2009 09:15:36 -0400 http://seekingalpha.com/article/130393-greenhill-s-skill-of-lifting-talent-is-golden?source=feed#comment-459447 459447 The book value of the company is approximatley 6 dollars a share.
At 12x book and 50x eps I would not be long GHL.
for a more detailed analysis see seekingalpha.com/artic...]]> Fri, 10 Apr 2009 20:54:10 -0400 The book value of the company is approximatley 6 dollars a share.
At 12x book and 50x eps I would not be long GHL.
for a more detailed analysis see seekingalpha.com/artic...]]> http://seekingalpha.com/article/129188-the-bull-case-for-simon-property-group?source=feed#comment-449914 449914 In the case of SPG specifically, one should be concerned about their very large exposure to Macy's. If M closes a significant number of stores, that would be very costly for SPG. In general, SPG is probably a better short than a long.]]> Thu, 02 Apr 2009 16:12:53 -0400 In the case of SPG specifically, one should be concerned about their very large exposure to Macy's. If M closes a significant number of stores, that would be very costly for SPG. In general, SPG is probably a better short than a long.]]> http://seekingalpha.com/article/127987-s-p-downgrades-investment-bank-for-being-too-good-at-investment-banking?source=feed#comment-441565 441565 As to GHL itself, it is overvalued on any possible metric. See my previous post for backup. Note that it is thinly traded and has a high short interest.
seekingalpha.com/artic...]]> Thu, 26 Mar 2009 17:25:26 -0400 As to GHL itself, it is overvalued on any possible metric. See my previous post for backup. Note that it is thinly traded and has a high short interest.
seekingalpha.com/artic...]]> http://seekingalpha.com/article/121972-four-factors-guiding-blue-nile-s-price-range?source=feed#comment-400225 400225 1. They withdrew guidance. A clear indication that they believe that trends are worsening. The retail environment is terrible, and Nile is not immune to the economic reality of the moment.
2. They indicated in the cc that sales in the currnet quarter are trending off 15% already, and in my view they are likely to get worse before we see any improvement. In the first q of 2008 their gross revenues were 70M. That would indicate they are trending towards gross revenues of approx 59.5M for this quarter.
3. Their gross margins for the last quarter and the last year are about 21%, resulting in expected gross profits for the current q of about 12.4M.
4. S G and A last quarter was 12.4M, and that should be very close to the current overhead run rate.
5. At a revenue run rate of 59-60M they break even! That is what the facts provided during the cc would indicate.
6. Any deterioration from a revenue run rate of at least 60M/q will result in losses.

Turning to their balance sheet, it is important to note as follows.

1. Although they ended the December q with 54M in cash, they also had 63M in trade payables!!
2. In addition, their inventories were 19M at the end of the q, a decline of about 10% from the prior year, though revenues for the q were down 20%.
3. Current assets exceeded Current liabilites at the end of the quarter by only 8M. They don't have much on the balance sheet other than current assets and libailbities. Book Value, if you accept all values as accurate was 19M at the end of the quarter.
4. There are just under 15M diluted shares outstanding, resulting in a stated book value of 1.26/share. Any write down of inventory or fixed assets would reduce that number further.

At current trading levels the stock is trading at almost 17 x book!
At current trading levels, the stock is trading at an infinte p/e. there is no "e".
Management will not have the cash resources to support the stock price for much longer. Note they used their cash to buy back 66M worth of stock in 2008 (it appears they reduced the diluted share count by 2M shares for an average of about 33/share). Without the management bid in the market, the only other logical source of support is short buy backs. Once they dissipate, the stock should descend.

Given these facts, it is very hard to understand how anyone, let alone someone who is employed as an analyst could recommend this stock.
]]> Mon, 23 Feb 2009 13:33:20 -0500 1. They withdrew guidance. A clear indication that they believe that trends are worsening. The retail environment is terrible, and Nile is not immune to the economic reality of the moment.
2. They indicated in the cc that sales in the currnet quarter are trending off 15% already, and in my view they are likely to get worse before we see any improvement. In the first q of 2008 their gross revenues were 70M. That would indicate they are trending towards gross revenues of approx 59.5M for this quarter.
3. Their gross margins for the last quarter and the last year are about 21%, resulting in expected gross profits for the current q of about 12.4M.
4. S G and A last quarter was 12.4M, and that should be very close to the current overhead run rate.
5. At a revenue run rate of 59-60M they break even! That is what the facts provided during the cc would indicate.
6. Any deterioration from a revenue run rate of at least 60M/q will result in losses.

Turning to their balance sheet, it is important to note as follows.

1. Although they ended the December q with 54M in cash, they also had 63M in trade payables!!
2. In addition, their inventories were 19M at the end of the q, a decline of about 10% from the prior year, though revenues for the q were down 20%.
3. Current assets exceeded Current liabilites at the end of the quarter by only 8M. They don't have much on the balance sheet other than current assets and libailbities. Book Value, if you accept all values as accurate was 19M at the end of the quarter.
4. There are just under 15M diluted shares outstanding, resulting in a stated book value of 1.26/share. Any write down of inventory or fixed assets would reduce that number further.

At current trading levels the stock is trading at almost 17 x book!
At current trading levels, the stock is trading at an infinte p/e. there is no "e".
Management will not have the cash resources to support the stock price for much longer. Note they used their cash to buy back 66M worth of stock in 2008 (it appears they reduced the diluted share count by 2M shares for an average of about 33/share). Without the management bid in the market, the only other logical source of support is short buy backs. Once they dissipate, the stock should descend.

Given these facts, it is very hard to understand how anyone, let alone someone who is employed as an analyst could recommend this stock.
]]> http://seekingalpha.com/article/120854-as-housing-market-struggles-homebuilders-focus-on-survival?source=feed#comment-392560 392560 Tue, 17 Feb 2009 16:50:16 -0500 http://seekingalpha.com/article/120919-abercrombie-s-2009-strategy-yields-favorable-results?source=feed#comment-392357 392357 Their strategy of holding pricing has resulted in significant same store sales declines last quarter (25%).
Even more ominous is their inventory build. In the fourth quarter last year they did 1.228M in sales and ended the quarter with 333M in inventory (24 days of sales).
In the fourth quarter just ended they did 997M in sales and ended the q with 373M in inventory (34 days).
As their CEO likes to portray them, they are an "aspirational" brand. I would avoid any company with that approach in this market environment.]]> Tue, 17 Feb 2009 14:04:07 -0500 Their strategy of holding pricing has resulted in significant same store sales declines last quarter (25%).
Even more ominous is their inventory build. In the fourth quarter last year they did 1.228M in sales and ended the quarter with 333M in inventory (24 days of sales).
In the fourth quarter just ended they did 997M in sales and ended the q with 373M in inventory (34 days).
As their CEO likes to portray them, they are an "aspirational" brand. I would avoid any company with that approach in this market environment.]]> http://seekingalpha.com/article/119603-homebuilders-agree-january-was-a-good-month?source=feed#comment-382175 382175 It is my view, however, that the January results were likely an anomaly and not an indicator of a change in trend. All economic indicators continue to deteriorate. My guess (note only a guess) is that there may have been some optimism tied to the Obama effect in January. We will see if there is a confirmed trend in the next couple of months.]]> Tue, 10 Feb 2009 09:27:26 -0500 It is my view, however, that the January results were likely an anomaly and not an indicator of a change in trend. All economic indicators continue to deteriorate. My guess (note only a guess) is that there may have been some optimism tied to the Obama effect in January. We will see if there is a confirmed trend in the next couple of months.]]> http://seekingalpha.com/article/114911-under-armour-will-overcome?source=feed#comment-356539 356539 Thu, 15 Jan 2009 10:34:14 -0500 http://seekingalpha.com/article/114694-why-won-t-gm-just-go-away?source=feed#comment-355363 355363 Wed, 14 Jan 2009 09:28:11 -0500 http://seekingalpha.com/article/113843-housing-where-is-the-bottom?source=feed#comment-351669 351669
If there is one thing missing, though, it is a discussion of why this set of facts arose. I would have to agree with the comments by prudentinvestor, the seeds of this catastrophe were sown in the low interest policiies of Mr. Greenspan. I believe many of the graphs support the timing of the start of this problem as coincident with the low interest rates in 2002-2004. The effect was to bring forward demand at an exceptionally accelerated rate, feed price increases and create the positive feedback loop that resulted in the housing mania of the last few years. Trees don't grow to the moon, and clearly the bubble burst in 2006 (approximately). We are now faced with the dillema of having all of these houses go into foreclosure, with the consequent damage to the banks balance sheets, or attempting to reflate again to mask the reality....Terrible choices. In my view, by reflating (ie cutting rates to zero again), we are sowing the seeds of an as yet unknown catastrophe. In my view, we should take the pain, and accept the consequences. ]]> Sat, 10 Jan 2009 11:17:24 -0500
If there is one thing missing, though, it is a discussion of why this set of facts arose. I would have to agree with the comments by prudentinvestor, the seeds of this catastrophe were sown in the low interest policiies of Mr. Greenspan. I believe many of the graphs support the timing of the start of this problem as coincident with the low interest rates in 2002-2004. The effect was to bring forward demand at an exceptionally accelerated rate, feed price increases and create the positive feedback loop that resulted in the housing mania of the last few years. Trees don't grow to the moon, and clearly the bubble burst in 2006 (approximately). We are now faced with the dillema of having all of these houses go into foreclosure, with the consequent damage to the banks balance sheets, or attempting to reflate again to mask the reality....Terrible choices. In my view, by reflating (ie cutting rates to zero again), we are sowing the seeds of an as yet unknown catastrophe. In my view, we should take the pain, and accept the consequences. ]]> http://seekingalpha.com/article/113813-downside-for-kb-homes-not-necessarily-priced-in?source=feed#comment-351282 351282 Fri, 09 Jan 2009 18:17:26 -0500 http://seekingalpha.com/article/113649-magna-international-worth-the-risk?source=feed#comment-348490 348490 They have taken very little in the way of restructuring charges although the big three are off about 40% in total volume in the last year. I expect a big loss this quarter and large restructuring costs in the near future to bring their capacity in line wiht the new reality. There is likley to be a failure on the part of Chrysler and possibly GM as well. There are large restructuring charges and receivable write offs yet to to come. They do have 8B in shareholders equity, so they can take the hits that are coming, and remain in business, but the share price likely has some room to fall.]]> Wed, 07 Jan 2009 10:07:19 -0500 They have taken very little in the way of restructuring charges although the big three are off about 40% in total volume in the last year. I expect a big loss this quarter and large restructuring costs in the near future to bring their capacity in line wiht the new reality. There is likley to be a failure on the part of Chrysler and possibly GM as well. There are large restructuring charges and receivable write offs yet to to come. They do have 8B in shareholders equity, so they can take the hits that are coming, and remain in business, but the share price likely has some room to fall.]]> http://seekingalpha.com/article/113063-option-arms-the-banking-backdrop-of-2009?source=feed#comment-345474 345474 Sun, 04 Jan 2009 12:18:22 -0500 http://seekingalpha.com/article/110126-autoworkers-pay-only-small-factor-in-detroit-s-problems?source=feed#comment-326411 326411
GM has something like 48B on its balance sheet as an accrued liability for retiree health care and other benefits. In Chap 11 that will be wiped out. There is no other way that GM can go forward as a sucessful company. That may be harsh and I agree it is completely unfair to the retirees but it is reality. These are the type of hard decisions and hard results that are required for successful restructurings.

Does anyone think that any Democratic government apointed "car czar" will have the political strength to do what has to be done?

The money coming from the government in this bailout is a complete waste of taxpayer dollars. In effect a transfer of wealth from the taxpayer to various creditors of GM who would otherwise not be paid. They money would be far wiser spent to fund a DIP loan for a proper chap 11. ]]> Thu, 11 Dec 2008 11:41:11 -0500
GM has something like 48B on its balance sheet as an accrued liability for retiree health care and other benefits. In Chap 11 that will be wiped out. There is no other way that GM can go forward as a sucessful company. That may be harsh and I agree it is completely unfair to the retirees but it is reality. These are the type of hard decisions and hard results that are required for successful restructurings.

Does anyone think that any Democratic government apointed "car czar" will have the political strength to do what has to be done?

The money coming from the government in this bailout is a complete waste of taxpayer dollars. In effect a transfer of wealth from the taxpayer to various creditors of GM who would otherwise not be paid. They money would be far wiser spent to fund a DIP loan for a proper chap 11. ]]> http://seekingalpha.com/article/109542-half-of-u-s-consumers-delaying-new-car-purchases?source=feed#comment-323658 323658 SAAR) is between 11-12M. It appears that this sales rate approximates the rate at which vehicles are being scrapped. Real growth in demand for vehicles should be consistent with population growth.
The sales rates we witnessed in the last few years of between 15-17M vehicles were unsustainable, and more of a function of insanely low financing rates then real "need". In essence, the auto industry brought forward demand, and now they will have to pay for that mistake.
it will take some time for that excess supply to work itself out of the market.]]> Mon, 08 Dec 2008 09:14:05 -0500 SAAR) is between 11-12M. It appears that this sales rate approximates the rate at which vehicles are being scrapped. Real growth in demand for vehicles should be consistent with population growth.
The sales rates we witnessed in the last few years of between 15-17M vehicles were unsustainable, and more of a function of insanely low financing rates then real "need". In essence, the auto industry brought forward demand, and now they will have to pay for that mistake.
it will take some time for that excess supply to work itself out of the market.]]> http://seekingalpha.com/article/108113-what-obama-needs-to-know-about-tim-geithner-the-aig-fiasco-and-citigroup?source=feed#comment-316763 316763
They knew that these contracts were not "insurance" at all. AIG was not selling this "protection" as an insurance contracts at all so as to avoid the legal requirements for capital etc.

At no time did any counterparty believe they had the full faith of the US treasury backing their risk. The US taxpayer should not take this loss. They did not choose to take on this risk.

If we let AIG go bankrupt and all those who contracted with them lose out, so be it. In the future all will be more careful with whom they take on "counterparty" risk. That is a lesson all need to learn. ]]> Fri, 28 Nov 2008 11:53:20 -0500
They knew that these contracts were not "insurance" at all. AIG was not selling this "protection" as an insurance contracts at all so as to avoid the legal requirements for capital etc.

At no time did any counterparty believe they had the full faith of the US treasury backing their risk. The US taxpayer should not take this loss. They did not choose to take on this risk.

If we let AIG go bankrupt and all those who contracted with them lose out, so be it. In the future all will be more careful with whom they take on "counterparty" risk. That is a lesson all need to learn. ]]> http://seekingalpha.com/article/102408-bait-and-switch-obviousness-shock-gm-s-payoff?source=feed#comment-292841 292841
Paulson should be ashamed of himself, if he does indeed sink to this level of dishonesty.

]]> Tue, 28 Oct 2008 17:27:25 -0400
Paulson should be ashamed of himself, if he does indeed sink to this level of dishonesty.

]]> http://seekingalpha.com/article/100443-how-low-can-mining-stocks-go?source=feed#comment-284866 284866 Fri, 17 Oct 2008 17:03:36 -0400 http://seekingalpha.com/article/100513-why-gm-chrysler-ugh?source=feed#comment-284843 284843 Fri, 17 Oct 2008 16:42:57 -0400 http://seekingalpha.com/article/98230-some-true-safe-havens-are-still-surprisingly-undervalued?source=feed#comment-271515 271515 There have been a few mining closures during the last few months, and many more will follow if the commodity pricing complex remains suppressed. Naturally, these decision will result in reduced supply, which will lead to increased pricing, and so on. These cyles play out over many years however, and you may need to wait a few years for your thesis to pay off. ]]> Thu, 02 Oct 2008 10:52:34 -0400 There have been a few mining closures during the last few months, and many more will follow if the commodity pricing complex remains suppressed. Naturally, these decision will result in reduced supply, which will lead to increased pricing, and so on. These cyles play out over many years however, and you may need to wait a few years for your thesis to pay off. ]]> http://seekingalpha.com/article/94727-chewing-on-the-fdic-list-of-problem-banks?source=feed#comment-250941 250941
thanks]]> Wed, 10 Sep 2008 17:07:47 -0400
thanks]]> http://seekingalpha.com/article/94304-a-first-look-inside-the-fannie-freddie-bailout-plan?source=feed#comment-247510 247510 The greenback will likely descend, and commodities should strengthen, over the next few weeks as this becomes better understood.]]> Sun, 07 Sep 2008 12:26:33 -0400 The greenback will likely descend, and commodities should strengthen, over the next few weeks as this becomes better understood.]]> http://seekingalpha.com/article/92864-short-thesis-still-intact-at-firstfed?source=feed#comment-241527 241527

On Aug 28 07:22 PM Kinabalu wrote:

> Just a comment on uninsured deposits. These deposits are usually
> demand deposits and are the most attractive deposits a bank can have.
> As a result when the FDIC takes over a failed bank they can sell
> the demand deposits to other banks for more than the face value.
> So the depositor doesn't have to take a loss as the new bank is happy
> to take over their business. There really isn't any more incentive
> for the uninsured depositor to participate in a run on the bank than
> for an insured depositor.]]> Fri, 29 Aug 2008 09:25:56 -0400

On Aug 28 07:22 PM Kinabalu wrote:

> Just a comment on uninsured deposits. These deposits are usually
> demand deposits and are the most attractive deposits a bank can have.
> As a result when the FDIC takes over a failed bank they can sell
> the demand deposits to other banks for more than the face value.
> So the depositor doesn't have to take a loss as the new bank is happy
> to take over their business. There really isn't any more incentive
> for the uninsured depositor to participate in a run on the bank than
> for an insured depositor.]]> http://seekingalpha.com/article/92864-short-thesis-still-intact-at-firstfed?source=feed#comment-239960 239960
1. FED does not voluntarily provide the monthly report. It is required by one of their regulators. Note that Downey provides essentially the same information monthly as well. Perhaps someone could clarify which regulator requires that filing?
2. While the dollar value of 30-59 day late non accrual loans was fairly steady at 123M vs. 126M one month ago, the 60-89 day bucket increased to 101M to 81M. Total Non Accrual loans in the pipeline went up 17M in the month.
3. Cash was 562M at the end of July, but wholesale deposits spiked during the month by 556M. This spike in wholesale deposits was unprecdented in the history of FED and seems very susupicious. During the month, as you point out, ordinary retail depositors withdrew 257M. There is no further detail about the source(s) or this "wholesale" deposit. Note that is may have been only on deposit for a short time. We are also not given any information as to the terms provided to the depositor(s). It seems hard to beleive that anyone would put their capital at risk with an uninsured deposit at FED given its precarious balance sheet. Note that in the absence of this miracle deposit, the bank would have been out of cash, and needed to tap the FHLB, which would, of course have attracted still more regulatory attention.
4. Very important to always remember with respect to FED that almost all of its loans are in California (a few in Arizona as well), and primarily in the absolute worst hit part of California, LA, the inland empire, and San Diego. The loss severities for them will be very significant.

This bank is in very big trouble....]]> Wed, 27 Aug 2008 09:50:20 -0400
1. FED does not voluntarily provide the monthly report. It is required by one of their regulators. Note that Downey provides essentially the same information monthly as well. Perhaps someone could clarify which regulator requires that filing?
2. While the dollar value of 30-59 day late non accrual loans was fairly steady at 123M vs. 126M one month ago, the 60-89 day bucket increased to 101M to 81M. Total Non Accrual loans in the pipeline went up 17M in the month.
3. Cash was 562M at the end of July, but wholesale deposits spiked during the month by 556M. This spike in wholesale deposits was unprecdented in the history of FED and seems very susupicious. During the month, as you point out, ordinary retail depositors withdrew 257M. There is no further detail about the source(s) or this "wholesale" deposit. Note that is may have been only on deposit for a short time. We are also not given any information as to the terms provided to the depositor(s). It seems hard to beleive that anyone would put their capital at risk with an uninsured deposit at FED given its precarious balance sheet. Note that in the absence of this miracle deposit, the bank would have been out of cash, and needed to tap the FHLB, which would, of course have attracted still more regulatory attention.
4. Very important to always remember with respect to FED that almost all of its loans are in California (a few in Arizona as well), and primarily in the absolute worst hit part of California, LA, the inland empire, and San Diego. The loss severities for them will be very significant.

This bank is in very big trouble....]]>