yank

Certain Banks Are Still Broke

Steve:
Before you "jump in bed" with Buffett consider that his portfolio lost 38% last year and his BERK-A shares are trading at a 10 year low.


On Jun 11 12:38 AM Steve W from Ford wrote:

> So the author presents no evidence of his assertion WFC is "broke".
> He just makes a statement like it is obvious. Meanwhile Warren Buffet
> is adding more to his already large position in WFC. Hmm, why would
> Buffet throw good money after bad? Gee who to believe? Think I'll
> go with Buffet.

Wells Fargo Is Broke: Poor Forecasting Slays Another Giant

West:
Regarding Schumer, you left out his deliberate "sabotage" of IndyMac which directly resulted in a bank panic putting it into bankruptcy. Schumer, Dodd, and Frank are the most morally corrupt, devious politicians I have ever seen. They are "poster childs" for establishing term limits on politicians. Absolute slime.

Yank


On May 12 01:54 PM Westcoaster wrote:

> You know nothing of banks earning power and the reserves they have
> accumulated to handle these losses. The government did a great job
> at stopping the liquidity problem. Now they need to let the banks
> go on their own and do their business. Wells has billions and billions
> of dollars in capital. This money can't be taken by the FDIC.
> There loans were done at conservative LTV's and there is collateral
> against all of this. Do you even know how a bank works? You should
> go short something else for a while. Shorting should be illegal it
> is un-American, are you a terrorist?
> The craziest thing about this stress test is a strong bank like Wells
> gets beat up and a NY based bank like Citi walks. This recession
> has been mostly about NY banks trying to crush their competition.
> It’s been working ok for them. Watch Senator Schumer create another
> run on someone like he did to Washington Mutual, that guy should
> go to jail for the letter he wrote.

The U.S. Banking System's Terrifying Balance Sheet

nobby:
excellent post. And more proof that the idea of "Securitizing" debt was probably the single worst idea in modern capitalism.

Yank


On Apr 08 10:17 AM nobby73 wrote:

> Hang on a second - everyone is jumping on this point about 75% being
> ridiculous, but you need to think about how the credit bubble has
> played out. When the banks have been securitizing the liabilities,
> it has been tranching up the risk and reselling those tranches. The
> danger always was the fact that the most risky pieces, the equity
> and the mezzanine, i.e. those that would suffer the first loss were
> the ones, were often retained. With securitization, the losses work
> through in a "waterfall", so the first loss hits the equity, until
> that is 100% wiped out.
>
> So the issue is not just the size of the positions, but the quality.

Straight Talk from Geithner on Securitization

Let me help you answer Questions 1-5:
!. NO
2. NO
3. NO
4. NO
5. Hell NO.

It is obvious to me that "securitization" is a flawed business model. Since the banks are incapable of regulating themselves they should not be allowed to securitize everything under the sun. Abolishing Glass-Stegall was quite possibly the worst decision EVER made by a sitting Congress. And that is really saying something since they have a less than stellar track record.

The NY Times on Bank Nationalization

"The Republicansd are not going to get their way"
Newsflash for you in case you missed the "memo"- The Republilcans are NOT in power right now. That have little to say what happens to the banks. Your paranoia of a Republican conspiracy is a bit lame.


On Mar 01 01:30 PM splintar wrote:

> That's great, just like always america should take the easy way out.
>
>
> And by the way, who ends up owning the bad bank and the bad assets?
> Oh, I see, the government gets to keep those and the taxpayer, while
> new stockholders and wall street get all the good stuff.
>
> Will never happen, everybody is going to hunker down and pay for
> this together under the existing frame work. The republicans are
> not going to get there way here.
>
> Buy some stock and become a stockholder then tell me how you feel
> about your plan. Oh I see, all those people are expendable. WRONG.

The Economy, And Why It's Taking So Long to Fix It

Hexan:
Outstanding post. You nailed it right on the head. I would just add one more point to you list from my own personal experience. I live in a fairly affluent area of South Florida. Recently several retail stores went "bankrupt". The foreclosed property now has a sign on the window saying " A new Goodwill Store will be built here soon". That is the ultimate signal that the retail consumer is now officially DOA. Kaput.
Very sad state of affairs indeed.

Yank


On Feb 28 11:54 AM Hexan wrote:

> I disagree. Recovery will take a lot longer than expected for these
> reasons:
>
> 1. Planned marginal tax increases on businesses and wealthy individuals
> discourages spending and investment.
>
> 2. Preventing foreclosures halts the downward slide of prices to
> affordable levels - forcing potential buyers to save longer and earn
> more to make a home purchase.
>
> 3. Significant stock market drops (and other asset classes) pushes
> retirement age out and increases the desire in younger workers to
> save more aggressively.
>
> 4. Deterioration of the wealth effect subtracts 1-1.5% of GDP for
> the foreseeable future, which further reduces consumer spending.
>
>
> 5. Business bankruptcies / commercial loan defaults have not peaked.
> The market will not grow until it is cleared of inefficient producers.
>
>
> 6. The impending carnage in commercial real estate has not even started.
> This will destroy wealth in places that appear stable right now.
> Notably conservative insurance companies, regional lenders, and high
> net worth individuals.
>
> 7. Tax increases on venture capital, hedge funds, and private equity
> will discourage risk taking and entrepreneurship, further postponing
> any recovery.
>
> 8. The banking crisis has not been fully resolved.
>
> 9. Bank lending, especially to consumers, will never again replace
> the previous levels associated with collateralized instruments. Layaway
> is back.
>
> 10. Bond investors are demanding much higher rates of return, even
> for highly rated companies. This makes it harder to fund expansionary
> projects.
>
> Each of these factors are non-trivial. One can debate the exact effect
> of each, but the combined impact on future growth cannot be understated.
>
>

Why Bank Nationalization Will Never Happen

Nearly half the credit pumped into this economy comes from "securitization". Securitization is like heroin for a drug addict. It's a "reliable" way to maximize leverage on smaller and smaller slices of capital. However, as borrowing increases, asset prices rise, making the system more and more unstable. When the bubble finally bursts, asset values crash, equity markets plunge, and unemployment skyrockets.
Yet Mr. Geithner seems intent on resurrecting this "failed" Ponzi scheme.
As for the bank "nationalization" concept, even in the best of times (far from where we stand now) it would be difficult for Geithner to achieve his goal of saving the big banks. But given the state of the economy, a multi-trillion dollar bailout that leaves the banks in private hands is just not realistic. Geithner will not succeed. Wall Street's credit model is irretrievably broken. There is no need for an oversized, overleveraged financial system. Business activity is slowing, investment and trade are dwindling, and consumers are broke. THE BIG BANKS ARE INSOLVENT. Every attempt to save the banks will be met with greater and greater public resistance and rage. The banks that are underwater need to be put out of their misery and nationalized.

Why Bank Nationalization Will Never Happen

Yeah I find it fascinating that Wells Fargo can't hold a conference in Vegas while the US Congress does not have the time to read a $800B stimulus bill before voting on it, so Rep. Pelosi and 8 other Dems can jet off to Rome for a "business" trip. This Congress needs to be impeached. Incompetence, greed, and corruption run amok.


On Feb 16 10:52 PM Mr. Ed, Jr. wrote:

> I guess it depends on how you define nationalization.
>
> As TARP funds are handed out, the government exerts its influence
> in how the bank is run....executive compensation, bonuses, corporate
> planes/jets, etc.
>
> The government, always vigilant and on the lookout for anyone wasting
> tax dollars, shamed Wells Fargo into cancelling a Las Vegas (a city
> in dire need of stimulus) junket/ conference/ awards event for about
> 1,000 employees. Other banks had previously cancelled scheduled events
> due to government pressure. That is small stuff, for now.
>
> With each added bailout dollar, we are certain to see more influence
> from Washington. (Few believe that the banks are done asking for
> TARP funds.) More dollars = more government control and influence.
> Regulations will be passed, imposed, threatened. Pressures will be
> applied. It is even possible that some banks may have an assigned
> Washington overseer -- with an office at bank headquarters..
>
> There will likely be a tipping point, where the banks are effectively
> nationalized, even though the shareholders may be left intact, but
> in tatters.
>
> Now, as to what Mr. Buffett may or may not be doing, in reference
> to gold:
>
> 1. We only know that he is not touting gold. Maybe he has a basement
> full of bullion. (What would happen to the price of gold if Mr. Buffett
> was touting it ? What would happen if he was not touting, but it
> was discovered he was secretly hoarding it ?)
>
> 2. If the situation arises where Mr. Buffett starts hoarding gold--
> it will be all over, anyway.

Schumer Is Way Off

Yogidad:
And Schumer doesn't either. He is nothing more than an egotistical ham. He makes my skin crawl he is such a shill.