drmalaka

How Much Are Goldman's Level 3 Assets Worth?

One more thing, stop quoting the bank spokesmen and employees. They are all confirmed liars. How many times do these criminals have to lie to your face for you to believe that they are scum.

I will say it again, when these bankers, home builders or monolines open their mouths only one of two things comes out: bad news or lies.

How Much Are Goldman's Level 3 Assets Worth?

Great article.

What you forgot to mention is that the accounting rules were changed last month. Banks may now value these assets at what they believe they are worth, not what they are actually worth. The rule change allowed banks to value these assets based on criteria other than the market if they bank believes that the market price is not correct based on distressed sales of those assets.

So for the housing example in the article. If your neighbor sold his house for $500k if you believe that he sold it becuase it was a distressed sale you can still value your house at $1mil. Hmmm, that seems crazy.

Bottom line. The government has fixed the rules in favor of the banks. The entire banking system is insolvent. If banks were forced to sell their assets at today's price they would all go under. What the government is doing is buying these banks time. Every quarter the banks make money (not abolute of course), these profits the banks make will be marked against losses they will declare on these Level 3 assets. Every quarter that goes by the banks will continue to make money on their ongoing business. This profit will be offset by continued losses for years to come. But that is the plan.

Put more simply. If you owed the bank a million bucks and could not pay it back at the end of the year you would be bankrupt, but if the bank gave you twenty years to pay it back you could do it if you had income. That is where the banks are. They have built in income, and it is being increased by the Fed cuts, and that income will eventually pay off these losses. The question is how long? These write downs are here for years.

Financial Stocks' Future Earnings Estimates: Is This a Joke?

Anyone who believes the crap coming out of the banks is a fool. Have these criminals not stolen enough money from the public?

I have no sympathy for anyone who is going to get killed buying financials or home builders in this market. Listening to these confirmed liars and investing on their lies is idiotic.

Only two things come out of bankers mouths when they speak: bad news or lies. If it is not bad news then you know what it is.

Financials and Retail: Not as Dire as They Seem

This might not be the best way to read corporate financials Philip. You might want to check EPS and PEs instead. B of A is a much bigger bank since 2003 so we would expect them to be making more money just because of the aquisitions. But there are more shares outstanding now, so you must compare those relative numbers not absolute values.

As for your calls, the least you could have done is picked some of the better financials. WM is as bad as they get. July 12.5 cheap? I have a feeling WM did not make a loan unless the borrower promised to default. Single digits very soon for this one. And C is no better. They raised cash ten points ago at an 11plus percent interest and now they need more money. I am not sure if the conversion price for the note includes a ratchet down protection like the one MER has, if C has this too then raising money through equity is even costlier.