prescient11

Bigger is Not Better in Banking

Chris, this analysis does fail to appreciate the $300B housing bailout that was passed. What is the consideration of that? Always liked your work.

Lehman Won't Be the Last Major Bank Failure

A few major banks may "fail", but you're wrong on the CDS deal, that will be taken care of. Same way FDIC will not accept a WM failure. Imho.

Financials and Housing: The Outlook Remains Ugly

$600B in losses have already been recognized, at least. Let's keep the numbers right.

Don't Believe the Lies: Ride the Bank Stocks Bull

Greg Weston, will do. thanks for the heads up.

Don't Believe the Lies: Ride the Bank Stocks Bull

For Reggie Middleton:

Reggie, why do you no longer post on here, I used to look forward to your Seeking Alpha posts, but yeah, haven't seen them in a while? Usually very informative. Etrade sucked a bit, it will be interesting to see their portfolio unfold, as I think they're years ahead of what will happen everywhere else, since most of their loans cut off in 2006. Hopefully, the loan losses have peaked, it appears they might.

Hope all has been well with you. Looked like a good time on the boat the other day.

Is the U.S. Banking System Safe?

Bearfund, I agree, I'm at a loss on WFC as well. Stock may even be overvalued, who knows there.

What I do know, however, is that they are not falling off a cliff and the rumors of their death had been very exaggerated.

This leads to my hypothesis that negative home values are not a direct correlation, or even a strong correlation, between the very large loss estimates the author cites and current forecasts.

we'll see how the construction loans go.

Is the U.S. Banking System Safe?

There will be more losses, but the end is not at hand. If you had bothered to review WFC's quarterly release, even accounting for their 180 day change on the chargeoff for the HELOCs, they are making money.

Imho, where uber-bears make the greatest mistake is that they believe people have a stop-loss on their house. This is not the case. Negative equity only becomes a factor when one cannot or chooses not to make the payment on the house. Thank God moving is such a pain.

More losses are likely, and many investment banks holding leveraged instruments are likely holding their losses. Whether it's a trillion, or a few more hundred billion, I don't know.

The housing rescue bill is more important than many, many, realize. GS estimated that US banks will have to raise $65B of capital. The housing bill just injected $300B onto banks balance sheets, and this should affect some downstream CDOs and other instruments as well.

Of the much-maligned baseball analogy, in my view we are likely in the bottom of the seventh inning.

The world is not ending, financials will still be around. Take a hard look at WFC's earnings release, and then you will know why it went up 22% in one day and much higher in the days that followed.

Guess what, with all the dire predictions they were still making money. Even if you put all their home equity losses on the books, that is still the case. Enjoy the summer, take the kids to the lake.