drmalaka

Financials: How - And When - We Reached the Bottom

This article is well thought out but just plain wrong.

Where are bank earnings? How much money are the Investment Banks going to make on M&A, securitization and the like in the next few years? It's hard to come near past earnings when you used to have ten revenue streams and you just lost your best three. Add that to dilution and the EPS will not approach past numbers for years and years.

Who is Tom to decide he is comfortable with write downs? Please. Three months ago when the last rally started (oh, during earnings season, or is that lying season) we were told that we were near the end of write downs. Believing anything the banks say or do is sheer insanity. These are comfirmed liars and crooks, and you take their word.

Sorry, but Whitney and Ackerman are much more reliable sources than any joker who pushes these banks. I think I will stick with believing those who have been right in this crisis, not the morons who keep telling me there is a bottom and no more write downs.

Estimates for losses are between $1 and $2 trillion now, are we even near that. Of course not. And that does not include normal loans, credit cards, commercial loans.

We will have write downs for years to come. The banks don't even know what is on their books. Their Teir III assets keep growing. Look for most of those assets to be written down eventually, quarter by quarter.

Bottom. Yeah right, bottom of the barrel maybe.

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.