jbmaria

Metrics, Mortgages and Analysts

Well Cindy,all your "good friends" on the ETFC board seem to be missing you?

messages.finance.yahoo...

Metrics, Mortgages and Analysts

seekingalpha.com/artic...



......"A Final Word of Caution
Those of you looking to make easy money in the financials like E-Trade (ETFC) need to think again. The risk is too high right now. I find it amazing how so many who have taken a long position in ETFC cite the company's impressive book value as some sign of value or financial strength.Understand that book value is used in the event of liquidation of assets in bankruptcy and therefore usually has no impact for common stock holders. In addition, book values of financials are meaningless since the banks have overvalued their debt. Finally, book values typically have no way of fully accounting for the type of massive leverage the banks have built.If you were not aware of these basic facts, you really need to sit this one out, save your cash and wait for the next bull market, when nearly everyone does well.

Even Citibank (C) has considerable downside from here, as does Bank of America (BAC). Over the past year, I have made many recommendations to short the financials. Earlier in the year, my attention was focused on Lehman Brothers (LEH) and American International Group (AIG). The story on these guys is far from over but I would wait for a rally before going short again.

The next short to consider will be Merrill Lynch (MER). When MBIA (MBI) and Ambac (ABK) get another downgrade, Merrill will be in deep trouble due to their large exposure to insured mortgage debt. That said, you might be wondering why Merrill is already near a year low. It's quite simple. All that I have told you about Merrill's risks is widely known. But that does not mean it can't go lower. However, unless you are very experienced with shorting, you need to stay away from this strategy.

Will there ever be a time to pick up the financials? I doubt I will bother to pick up any of these (other than for short-term trading) even when I sense the bottom has been reached because the climb back up is going to be very slow and small. The dilution that has and will continue to occur will crush earnings for many years."

Metrics, Mortgages and Analysts

Looks like they ban on negative ETFC articles may be lifting?

seekingalpha.com/artic...

Metrics, Mortgages and Analysts

For the record let's post the "complete" S&P ratings revision as opposed to Cindy's condensed version:

"➤ ETFC is in the midst of restructuring its opera-
tions and balance sheet to focus on its retail
clients and reduce its exposure to consumer
lending and securities investments. While we
view the decision to refocus on its core compe-
tencies as prudent, we believe significant dam-
age to its balance sheet and future earnings
power has already taken place. While customer
and asset defections have likely stabilized, we
expect higher loan loss provisions, further im-
pairments, and dilution from its capital infusion
to constrain results for the foreseeable future.
➤ Despite the problems with its mortgage hold-
ings and security investments, ETFC continues
to post relatively strong retail results, with
strong net new customer growth and daily av-
erage revenue trades (DARTs) up 12%, year to
year, in the first quarter. However, we see a
number of negative headwinds in 2008, includ-
ing continued loss provisions on its first lien
and home equity portfolio, higher debt expense
and increased customer acquisition costs.
➤ We project a loss per share of $0.49 in 2008 be-
fore a return to profitability in 2009 with EPS of
$0.16.
➤ We believe ETFC's past decision to stray from
its core direct retail customer focus will be a
drag on results for a number of quarters. While
we view the move to realign operations to fo-
cus on core retail customers as prudent, we
see the overhang from its remaining mortgage
assets and the dilutive capital infusion out-
weighing the near-term positives that we have
seen in its retail metrics. We anticipate further
write-downs in the home equity loan portfolio in
2008 and increased loan loss provisions for first
lien holdings. While we see Citadel's invest-
ment providing ETFC with much needed capital
and balance sheet stability, we view the terms
as unfavorable to existing shareholders.
➤ Risks to our opinion and target price include in-
creased price competition in the retail busi-
ness, higher interest rates, and smaller write-
downs in the remaining mortgage portfolio.
➤ We arrive at our 12-month target price of $4.00
by applying a 0.8X multiple to ETFC's 12-month
projected book value per share, a discount to
peers. We think a discount is warranted by un-
certainties surrounding ETFC's mortgage and
securities exposure and a challenging market. "

Metrics, Mortgages and Analysts

OK,Cindy,you don't want to talk about Layton and Enron,what about his compensation?

On 3-2-08,the day he's named CEO,
1.8 million shares land in his account and no one mentions it as compensation???
Doesn't look like they're options but maybe they're restricted?
Wondering if I missed a filing detailing this?

biz.yahoo.com/t/28/382...

Metrics, Mortgages and Analysts

...."thats makes me "queasy" (not in 1999 right now in 2008)".

Sorry for your delicate condition,try a bromo, but my questions are valid and relevant.Cindy is writing pump pieces,cherry picking only the best looking data to sell her position.
Simple example,Cindy cites the S&P upgrade and quotes the analyst who sees signs of stability but conveniently leaves out that S&P simply went from sell to hold and set a target of $4,about where the stock was when the upgrade came out. Then she focuses on the BMO guy raising the target to $6. I ask why the BMO analyst who got it so wrong last year should be trusted now? That's in addition to conveniently leaving out Layton's little brush with scandal while asking readers to buy into his pronouncements and not acknowedging he was not the first choice for CEO and hasn't helped the stock price.

Cindy is on record on the yahoo board of planning this series of pump pieces in collusion with other well known pumpers. Readers should know that. I'll keep pointing out to the unsuspecting what she's doing,the record of pump pieces here is clear:

Metrics, Mortgages and Analysts
on Jun 20, 2008 about AMTD, ETFC, SCHW
S&P Upgrades E*Trade Despite Struggling Financial Sector Peers
on Jun 12, 2008 about ETFC
E*Trade's 'First In, First Out' Position: Yes, 111M Shorts Can Be Wrong
on Jun 11, 2008 about ETFC
Citadel Infuses E*Trade with Strong, Experienced Management
on May 29, 2008 about ETFC
Who Will Trigger E*Trade's Magic Moment - and a 111.4M Short Squeeze?
on May 29, 2008 about ETFC
Seeking E*Trade's 'Magic Moment'
on May 23, 2008 about ETFC
E*Trade: What the Analysts and News Haven't Told You
on May 22, 2008 about ETFC
Schwab, E*Trade: Monthly Activity Comparison and the Industry Average
on May 15, 2008 about ETFC, SCHW
E*Trade's Annual Shareholder Meeting Should Pressure the Shorts
on May 09, 2008 about ETFC
Comparative Price Shopping: Selected Banking, Mortgage and Brokerage Stocks
on Apr 21, 2008 about BSC, CFC, ETFC
E*Trade: Primed To Turn Around?
on Apr 18, 2008 about AMTD, ETFC, SCHW

Metrics, Mortgages and Analysts

Well,that's it I guess.
I've been dismissed by Queen Cindy.
If there's anyone still reading this dreck I suppose I'll just let you figure it out.

Metrics, Mortgages and Analysts

Cindy,you can try to change the topic until you're blue in the face BUT readers would want to know how you could have missed the Layton/Enron connection whether he's guilty or not.
You claim the man is a brilliant paragon of virtue but you left out the reason many believe he retired from a job paying $15mill./a year-it's relevant.
It your ineptitude that's being questioned,not his.

Metrics, Mortgages and Analysts

I thinking our Cindy isn't quite ready for prime time:

messages.finance.yahoo...

Metrics, Mortgages and Analysts

So Cindy,you seem reluctant to discuss Layton and Enron???
Perhaps because there's only two logical conclusions,you left it out intentionally since it didn't fit your thesis (you lied by omission) or your research skills are severely absent or biased?????

Anyway,pumpers are always citing Layton's pay package being tied to performance.That's true enough but there are some other ways to look at it.
Layton's got his $1million stock buy back and plenty more with any luck at all.That buy of stock was IMHO, a down payment on the job he wanted and not a big amount to him,he earned $15 million total compensation his last year at JPM. If he hadn't been appointed CEO of ETFC he might have walked and sold his tiny stake-not much of a risk on his part.He's pretty well covered as I see it.
But below is the language from the SEC filing describing his ETFC CEO compensation:

"Mr. Layton will receive an annual base salary of $1,000,000, and the Company granted to Mr. Layton stock options and restricted stock, which will vest on a quarterly basis through 2009 and have an initial aggregate value of approximately $15.4 million (with the value for the stock options based on an option valuation methodology and for restricted stock based on the intrinsic value on the grant date). Mr. Layton and the Company will enter into an employment agreement with a term through 2009, which will provide for no further equity grants and no opportunity for any cash bonuses during the term. Under the employment agreement, if Mr. Layton is terminated without cause, or if after a change in control, he resigns for "good reason" (as defined in the Company's previously filed form of executive employment agreement), he will receive a severance payment of $5 million and accelerated vesting of his equity awards. He will not receive separate compensation as Chairman or as a director."

Is it possible that even if Layton presided over the sale of ETFC for only $1/share,he'd still get a $5m bonus and restricted shares could still be granted to him then????? That seems to be the way it reads?

Metrics, Mortgages and Analysts

'"I AM QUEASY." Complex deals involving cash advances raised concerns with JP Morgan Vice-Chairman Donald H. Layton. "We are making disguised loans, usually buried in commodities or equities derivatives (and I'm sure in other areas)..." Layton wrote in an internal 1999 e-mail to credit-risk managers that was introduced as evidence in the trial. (Parenthetic remark in previous sentence is Layton's.) He also wrote: "I am queasy about the process."'

Legally,he's guilty only of wondering out loud if something funny was going on.We're not holding him to the highest standards here,a real "boy scout" might have made some real noise.But I'm adult enough to know how biz works and also smart enough to think this is a small negative for a CEO running a co. I invest in.
If nothing else,it shows at least a little willingness to play ball with others to cover up shady stuff.
There was talk he retired early over this smear but how do you nail that down-you can't.

Metrics, Mortgages and Analysts

OK Cindy,now that we've determined you haven't done your homework on Layton,lets talk about the analysts. How is it almost all these banking analysts missed this multi TRILLION dollar meltdown in the mortgage space? Why should we listen to them now????

Even more germane,why do all the ETFC pumpers hate Bhatia,one of the few analysts who warned of the problems in August
BEFORE everyone started talking about them.
Shouldn't that make him a bit of a hero?
It does to me.

Metrics, Mortgages and Analysts

SA software is acting up and shortening sentences indiscriminately,I'll try to post it in toto once again:

Cindy,you know I don't lie or you should.
That's why my ID is over 10 years old and I stand behind every post even though a few of the calls over the years weren't exactly "brilliant".
Note that your pumper partners "numbersssss" changes his often and the other boy wonder pres just started posting in January-wonder why? Prescient11 even admits ETFC is his first major stock holding,did you know that?

That said ,your inability to do even the most basic research on Layton is troubling. Everyone who follows the OLB space knew about Layton and Enron,as minor as it might be,only a rookie pumper like you would be in the dark about it.
A simple google would have found it.

Sad to see what passes for "expert research" on SA these days.

Metrics, Mortgages and Analysts

Cindy,you know I don't lie or you should.
That's why my ID is over 10 years old and I stand behind every post even though a few of the calls over the years weren't exactly "brilliant".Note that your pumper partners "numbersssss" changes his often and the other boy wonder pres just started posting in January-wonder why? Prescient11 even admits ETFC is his first major stock holding,did you know that?

That said ,your inability to do even the most basic research on Layton is troubling. Everyone who follows the OLB space knew about Layton and Enron,as minor as it might be,only a rookie pumper like you would be in the dark about it.
A simple google would have found it.

Sad to see what passes for "expert research" on SA these days.

Metrics, Mortgages and Analysts

" My decision to publish that information shows that I have confidence in Layton as a man of integrity; unlike other Wall Street Financial Company CEOs. His reputation and experience speak loudly, and he would not risk his reputation to mislead investors regarding E*Trade's Mortgage performance. "

Not sure why you're so enamored of Layton?

Press reports confirmed he wasn't the top choice of the BOD.
He's not a turnaround expert.
He hasn't done much for the stock price.
His policy of announcing dilutive swaps after the close on Friday's is considered slimy by many Wallstreeters.
And ,rightly or wrongly,Layton was tarnished by some involvement in the Enron debacle.


Please explain what he's done to earn your adulation.