drmalaka

These 32 Commercial Banks and Thrifts May See the Dung Hit the Fan

Reggie, as always a great article. You have so much back up information that those who throw barbs at you just do not want to do the work and understand what is really happening.

Ebuddy, Reggie did not say sell all those stocks, he has more articles and will select the best shorts. Your points are correct, so the answer might be that those are not on the short list.

The first comment is just a stick your head in the sand attitude. Trust the market, they know. First, don't forget the lowlife scumbags you are trusting. Second, how forward looking was the market in Q3 07 when it ran to new highs? What about NASDAQ in March 2000? To blindly follow that is idiotic, at least take a moment to listen. Read what Reggie and others have to say and then decide who you agree with.

There is very little room in these banks for defaults, it is not like they have a gross margin of 50% so a few defaults would mean nothing. Generally speaking, I would figure that losing all the principal on one loan would cancel out the profits of twenty five or thirty loans at least. If they lent out money at 10% interest the interest payments on ten loans of equal value would cover one complete loss. Then you have to factor in that they only make the spread between what they borrow for and they lend out. Add in overhead and costs and I might be underestimating the number of quality loans one complete loss cancels out.

Reggie you are spot on. If a bank holds a high percentage of these potentially zero value loans (and I agree with your hypothesis that a lot of these will be zero) then that bank is going to be in trouble. I love how you are going about this.

All those above who are so positive on this sector, do you really believe that housing will come back by the end of the year or early next? 11 month supply of houses compared to a usual 5.

Double Whammy: Bank Card Companies May Be Next

Great article. Watching these banks go up is funnier than any episode of Friends I never watched.

This market is like CNBC, it is looking for any reason to go up. Home sales are higher than forcasted, buy the home builders. Who cares if the prices were down significantly and related to foreclosures.

COF is one of the worst banks with their agressive lending. It will not be long that the same people who can not pay for their houses will not be able to cover their monthly minimum at 25% interest. Plus they have tightened credit standards, so they have fewer new customers, which is how they make money.

This is a great run by the banks and home builders, if you own them this is a great time to sell, if you don't it is a great time to short. There are tons of people out there that have been drowning in these companies and will be getting out now that they have seen a nice bump up.