jstratt

CIT Group's Bankruptcy Plan: Goodbye Common and Preferred Stock

I wasnt surprised that billions of Taxpayer funds were used in this bailout according to William Black.

Geithner is nothing but a thief stealing from taxpayers money he would rather cheat than pay himself. If you are an investor always bet against the taxpayers. You can't help but win. It is like throwing money on the sidewalk outside a restaurant. After you eat go see if it is still there.

Make sure no bondholders lose any money. Rush in with taxpayer money first at all cost. Both Dems and Repubs are equally bought/bad.

Finally I have some great recommendations for treasury. I think Dick Fuld, Jimmy Cayne and Ken Lewis are available. They are the only ones who measure up to the excellence of Geithner that I can think of.

Bill Gross: Six Month Rally Is 'At Its Pinnacle'

Hi Bill

I would likely remove my money from the market before I would invest in your theory of expect minimal returns for life.

Lets see if in April I had taken your advise I could have a negative return instead of 40%. I know you are just talking your book (ie invest in bonds) but your advise sucks.

I kind of think the new normal is a suggestion to invest without expectation of return. We have had a crash I think I will stay with stocks. Enjoy hibernating with Mohammad! Hope you have plenty of blankets.

Eight Reasons the Market Is Going Down

Sometimes you have to consider alternative points of view. It can really make a defference in investing. Back in my 1st year out of college in 80 gold was on a tear and peaked at 890 or something close. Silver peaked at approx $52 and Oil was higher.

I was working in the Oil tool industry and we fell down laughing when we heard mention of an Oil glut. Everyone knew that the only way it could go was up. A few month later the company was almost defunct and Oil would drop to $9 or less.

I am not suggesting Oil will drop today below last years lows. What I am suggesting is that you should not believe all of the gibberish about the dollar being dead. Of gold going to the moon etc.

Just realize that capitalism works because governments around the world make it work. They realize that it creates a better political environmet at home and a higher standard of living throughout the world. A move to the G20 means the 20 most economically important nations will work to create a better economic world in the next year.

In the meantime many knuckleheads will postulate about how the world or the dollar or a country will fall off a cliff. Diversify your assets and invest. If the fools convince you to bury your money in the back yard you are the loser. Investing in treasuries at 0.5% is the equivalent.

I offer this opinion for what it is worth to you. Contain your fears and contain those around you who are scared. Scared money is always a loser.

Goldman Dissembling: Dark Pools et al

Excellent points!

I would add that disguising markets is thievery.
Flash trading is thievery

At least in a casino there is an honesty about what is taking place.

Dark pools appear to me to be a way to give special advantage to some institutions.

Flash trading is even worse as your individual buy order is being transmitted to others so that they can profit directly at your expense. It was amusing to see when a major investment bank had their code stolen and they revealed that in the wrong hands it could be extremely dangerous. I would add that in their hands it is extremely dangerous.

They are able to pay congressmen and senators enough that they own them so things will not likely change.

What you can do for yourself is buy quality long term investments and hold them. If you are a trader you better be darn good... because the odds are stacked against you more every time you trade.

'Almost All Assets Appear to Be Overvalued' - Bill Gross

I think it must be a hard time to be in the bond business. Bill Gross in my opinion is talking his book. That is justifying to his investors why they should accept puny returns. He said that at the very bottom and those who took his advise at that point locked in huge losses.

It is a great time for long term investors. Many quality long term stocks are still at or near 10 year low PE ranges.

In the last big recession around 1980 every kook came out with their opinion on why the world was ending and why you have to sell everything and why the US was in decline. As a young investor I foolishly allowed myself to sell my meager holdings.

Stocks may or may not be great values but they are better than when they were 4000+ points higher on the DOW.

For Bill Gross however an article like this may save a few billion in assets under mangement from leaving. If I was him I might continue to write articles like this.

AT&T Q3: Beats Estimates, Activates 3.2 Million iPhones

An excellent quarter for ATT! The increased earnings and cash flow pave the way for a higher stock price.

ATT is a hidden growth story. By that I mean in an environment of large revenue declines, near even is growth. I translate that to an equivalent 10% increase when the rest of the world stablizes.

My estimation is that the stock is now worth in excess of $30 per share and a 5.2% dividend yield. The dividend is not in danger with the rise in cash flow and a 6% dividend return is more than is now justified.

Dual reasons for increased share price make T an attractive investment with significant return potential.

Is the S&P 500 Overvalued?

It should be added that judging a PE based on a calamity based previous year does not carry much weight. The issue is the earnings potential of stocks. An article like this is probably written by someone who missed the bottom and is still afraid to invest.

Stocks in many ways are fairly valued based on earnings potential. Where a case for overvaluation can be made is in the increased risk for equities.

1) We are no longer in a US dominated world and that has negative economic implications.

2) The macro structure and leadership of the world economy is beginning to change in ways it hasnt changed in our lifetime.

3) The dollar? It probably isnt going to be the sole reserve currency 15 years from now.

So risk is higher and PEs perhaps should be lower.

PG at a 13.5 PE with huge support from a declining dollar seems cheap

IBM at 12+ PE and the wind at its back seems cheap

T with a 12.8 PE and a 6.4% dividend seems cheap. Especially when a huge recession is masking the real growth in its business opportunities.

These are just a few of my favorite things.

Johnson & Johnson Q3: Beats Earnings, Raises Guidance

The revenue miss was small and not really much of a factor in my decision to own JNJ. Raising earnings guidance and beating 3rd quarter estimates was much more important.

That said I did move back into JNJ ahead of earnings because I thought they would excel. JNJ will do well over time as a long term holding. They will also do well on a relative basis with any correction.

Still a believer

The G20: Time for a U.S. Attitude Adjustment

The world is changing! I also noticed the huge voting bloc of Europe in the G20. Still think the G7 will control the agenda.

Why? The US has controlled money, and military. But not anymore. Partly the world has changed and partly our military supremecy is diminished. Our money is not the sole currency anymore.

The practical effect is we cannot spend the worlds dime anylonger. It will be a more equal world. That is a big change to us. It may mean that we have to use money in a smart way. It may mean that we dont unilaterally decide to start wars. It may mean that others have to carry a heavy burden of defense spending.

Whether we know it or not we have spent money at the worlds expense. That has been a great thing but we have been responsible for protecting the world economy. Both things have changed.

Historically speaking we are entering into an unstable period that likely will affect risk assets greatly by adding risk and reducing values.

On the other hand we remain the most powerful military and we are going to remain economically the most powerful. In my view that means that we will be in good shape. We just wont own the world anymore.

That is my opinion and investing philosophy. I offer it for what it is worth...

The significance to me is you might want to save a little more for a rainy day. We dont own the world anymore... then get over it.

The Dog that Ate Ken Lewis's Homework

Judge Rakoff is a hero!

The Securities Extortion Commission (SEC) needs to be obliterated and replaced by a regulatory body.

Seriously the SEC commissioners should be hauled before a court or public body to testify about why they arent a fraudulent group of conspirators. Perhaps they could explain why it only appears they are a fraudlent treasonous body.

What is their thinking?
What are they trying to accomplish?
Are they proud of their achievements?
What recommendations do they have?
How do they think their actions meet public goals?
Do they think their actions allow citizens pensions to be looted?
What do they think about flash trading?
Is allowing an advanced look at trading data and ability to trade to some special entities stealing from the US citizens? Why or Why not?
Do they think they are acting in citizens best interest?

Perhaps the appropriate name is the Securities Extortion Club!

Ken Lewis, RIP

This was an expected occurrence. The only reason this POS lasted this long is because they wait until after a crisis to remove a banking CEO.

To give Lewis a 53 Million severance package is an outrage. The US cannot survive with a middle class when this sort of crap is common place.

The shareholders are fleeced at every turn by managements insulated by hand picked boards. The result is 0 for shareholders and huge bonuses for managements from inside picked boards.

When will people wake up? Doesnt an owner get anything in the US anymore? If you settle for this and the farce of an entity called the SEC you deserve to retire to dogfood.

Ken Lewis deserves to be in Jail.

The BOD needs to be ousted and jailed if they knew of the hidden bonuses.

A severe example needs to be made in one of the most treasonous acts of a company in history

My point is great companies have made it a practice to fleece shareholders by paying the entire gains to management. The result is people are happy with poor retirements while the executives earn huge outlandish salaries and bonuses even when they destroy a company.

Wake up people!

SEC Charges BofA for Merrill Bonuses

Thank god for Judge Rakoff!

The SEC is supposed to serve a great purpose of maintaining a set of free and fair markets. It has deserted its purpose in a treasonous manner.

It is managed by a disgusting set of leaders that need to be expunged, its political overseers need to be expunged and integrity needs to be restored.

The proper penalty for BAC is to pay back the government with an appropriate return added. Merrill Lynch should be seperated and sold off. Finally Ken Lewis and the entire board needs to be removed.

When fraud and graft is accepted in a BAC like manner, the US has downgraded itself to a 3rd world country that cannot be trusted.

Five Questions for William K. Black

Excellent post!

Black brings much credibility and reason into discussions of financial malfeasance. He creates value in helping to keep all the illegal and unethical behaviors from being swept under the carpet.

That said also look critically at the support for his conclusions. You will likely agree with most but not all of them.

The FHA Meltdown

It is my experience that when it comes to your money... you want to do the opposite of what the government is promoting.

In todays world the government is asking you to do what huge political contributors want. That in short means a slick well designed plan to separate you from your money.

A good investment strategy is to let government inspired bubbles pop and buy after the asset has dropped off a cliff.

What's a Home Really Worth These Days?

Having watched the residential RE market closely a 3/2 home in a good location doesnt have much downside. Even a 3/1 doesnt have much downside although it also doesnt have as much upside.

The mansions never made sense in the best of times. After heating, cooling, maintaining and paying taxes on huge homes little is left. Much like in the 80s the huge homes will likely lose 40% of their value. They may lose more!