pelican's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/155304/comments http://seekingalpha.com/article/162832-aig-needs-dissolving?source=feed#comment-687007 687007
A year ago the AIG bailout was greeted with derision almost to a person. One year later even the author of this article recognizes it probably averted a bigger financial meltdown. If AIG was liquidated with great speed now I guarantee the media would jump on it pointing out that by not methodically selling assets, the government could have saved taxpayers billions. This article got a log of headlines today because it makes it sound like AIG continues to be a sinkhole, which is not the case anymore. At this stage I don't think the government needs to "get tough" if that simply means limiting the potential repayment on those loans. The author says we should because it would "serve as an important reminder to Wall Street and giant banks around the world, that there's a price to be paid for becoming too big to fail -- and then failing." Well, I think its a little too late for that now. Besides, I think in many ways prices have already been paid. Regardless, as a taxpayer, I want as much money back from AIG as possible.

Disclosure: I bought put options because I think AIG will eventually be sold off completely with no value left to shareholders.



]]> Wed, 23 Sep 2009 00:46:10 -0400
A year ago the AIG bailout was greeted with derision almost to a person. One year later even the author of this article recognizes it probably averted a bigger financial meltdown. If AIG was liquidated with great speed now I guarantee the media would jump on it pointing out that by not methodically selling assets, the government could have saved taxpayers billions. This article got a log of headlines today because it makes it sound like AIG continues to be a sinkhole, which is not the case anymore. At this stage I don't think the government needs to "get tough" if that simply means limiting the potential repayment on those loans. The author says we should because it would "serve as an important reminder to Wall Street and giant banks around the world, that there's a price to be paid for becoming too big to fail -- and then failing." Well, I think its a little too late for that now. Besides, I think in many ways prices have already been paid. Regardless, as a taxpayer, I want as much money back from AIG as possible.

Disclosure: I bought put options because I think AIG will eventually be sold off completely with no value left to shareholders.



]]> http://seekingalpha.com/article/159281-aig-overpriced-perhaps-not-as-much-as-barron-s-thinks?source=feed#comment-655798 655798 ***Understatement of the summer?

"But its $35 billion stock market value doesn’t look like too much to pay when considering the longevity of the insurer, either."

***I'm sorry but what does this mean? Are you suggesting the AIG brand is what it once was? Are you saying AIG will be around for years to come? I'm not sure you can make this statement without backing it up with more financial analysis.

"In an aggressive market environment, rapidly spurred by Asian investment (despite the volatility), it’s almost fair to say that the current market capitalization of AIG reflects the prices its various remaining today will rise to in twelve months time."

***Almost fair to say? Again, based on what analysis? The company has not been getting good prices for its assets and saying they will over the next 12 months doesn't mean it will happen.

To be honest, I'm stunned that you haven't mentioned how the CEO recently stated the value of the assets now is less than what they owe the government. As noted in a Motley Fool article today, assets were reported = $58 billion (book value even though they've been getting less than book) and they owe $80 billion. So you don't just need some increase in assets values, you need a heckuva increase just to pay off the government. In the meantime, as the company sells assets, its earnings power decreases. So after the government is paid off - assuming for a moment they actually are paid in full - you've got the bondholders. Any crumbs left go to the shareholders, and I seriously doubt they will see anything. AIG is going through a forced liquidation which even the CEO admits will make it challenging to even end up with a company that is a former shell of itself. Nonetheless, you make it sound as if its a given that the stock will continue to rise, let alone the company even existing over the next decade.

There is something very wrong with this kind of article and I think its because it reminds me of others I've seen in recent years; the kind that touts companies on the brink (e.g. mortgage companies). In my view, there needs to be greater responsibility explaining the potential (and often enormous) risks.]]> Tue, 01 Sep 2009 05:22:35 -0400 ***Understatement of the summer?

"But its $35 billion stock market value doesn’t look like too much to pay when considering the longevity of the insurer, either."

***I'm sorry but what does this mean? Are you suggesting the AIG brand is what it once was? Are you saying AIG will be around for years to come? I'm not sure you can make this statement without backing it up with more financial analysis.

"In an aggressive market environment, rapidly spurred by Asian investment (despite the volatility), it’s almost fair to say that the current market capitalization of AIG reflects the prices its various remaining today will rise to in twelve months time."

***Almost fair to say? Again, based on what analysis? The company has not been getting good prices for its assets and saying they will over the next 12 months doesn't mean it will happen.

To be honest, I'm stunned that you haven't mentioned how the CEO recently stated the value of the assets now is less than what they owe the government. As noted in a Motley Fool article today, assets were reported = $58 billion (book value even though they've been getting less than book) and they owe $80 billion. So you don't just need some increase in assets values, you need a heckuva increase just to pay off the government. In the meantime, as the company sells assets, its earnings power decreases. So after the government is paid off - assuming for a moment they actually are paid in full - you've got the bondholders. Any crumbs left go to the shareholders, and I seriously doubt they will see anything. AIG is going through a forced liquidation which even the CEO admits will make it challenging to even end up with a company that is a former shell of itself. Nonetheless, you make it sound as if its a given that the stock will continue to rise, let alone the company even existing over the next decade.

There is something very wrong with this kind of article and I think its because it reminds me of others I've seen in recent years; the kind that touts companies on the brink (e.g. mortgage companies). In my view, there needs to be greater responsibility explaining the potential (and often enormous) risks.]]> http://seekingalpha.com/article/144546-starbucks-vs-mcdonald-s-filtering-through-the-coffee-wars?source=feed#comment-557390 557390 Mon, 22 Jun 2009 10:51:54 -0400 http://seekingalpha.com/article/136440-regions-financial-rebukes-treasury-findings?source=feed#comment-495152 495152
The economy is improving??]]> Fri, 08 May 2009 06:25:13 -0400
The economy is improving??]]> http://seekingalpha.com/article/130821-goldman-releases-earnings-early-has-world-gone-crazy?source=feed#comment-462498 462498 You wrote: Not surprising that all major banks report better than expected results this quarter.

Sounds like a Yogi Berra-ism. How can something be not surprising and better than expected (i.e. surprising)?]]> Tue, 14 Apr 2009 08:39:21 -0400 You wrote: Not surprising that all major banks report better than expected results this quarter.

Sounds like a Yogi Berra-ism. How can something be not surprising and better than expected (i.e. surprising)?]]> http://seekingalpha.com/article/129541-equity-market-rally-may-be-short-lived?source=feed#comment-452965 452965
Two comments. First, the market bottomed July 8, 1932, 35 months after the peak in 1929. So it didn't last "well over three years." Second, like the 1929 bust, the dot.com bust sported higher market multiples at the peak.compared to the 2007 peak.

I like the term Great Recession because it connotes the worst recession we've seen (in memory) but its not as bad as the Great Depression. I believe we bottom between the time it took to hit bottom in past (very bad) recessions and the Great Depression (i.e. approx. 18 to 36 months). We are 18 months into the current bear market.




]]> Mon, 06 Apr 2009 02:26:55 -0400
Two comments. First, the market bottomed July 8, 1932, 35 months after the peak in 1929. So it didn't last "well over three years." Second, like the 1929 bust, the dot.com bust sported higher market multiples at the peak.compared to the 2007 peak.

I like the term Great Recession because it connotes the worst recession we've seen (in memory) but its not as bad as the Great Depression. I believe we bottom between the time it took to hit bottom in past (very bad) recessions and the Great Depression (i.e. approx. 18 to 36 months). We are 18 months into the current bear market.




]]> http://seekingalpha.com/article/127880-book-review-mobs-messiahs-and-markets?source=feed#comment-443813 443813
Some of what you say is puzzling and this sentence I don't understand at all. "...prices spiked dramatically until 1982. Since then inflation has been "moderate", around 15% per year, and prices have been rising "only" around 8-10% per year."

Here is an inflation by decade chart.
inflationdata.com/infl... ]]> Sun, 29 Mar 2009 03:34:02 -0400
Some of what you say is puzzling and this sentence I don't understand at all. "...prices spiked dramatically until 1982. Since then inflation has been "moderate", around 15% per year, and prices have been rising "only" around 8-10% per year."

Here is an inflation by decade chart.
inflationdata.com/infl... ]]> http://seekingalpha.com/article/128271-book-review-getting-off-track-by-john-b-taylor?source=feed#comment-443519 443519 ]]> Sat, 28 Mar 2009 14:47:27 -0400 ]]> http://seekingalpha.com/article/127191-don-t-be-fooled-by-the-dead-cat-bounce?source=feed#comment-435102 435102 Sun, 22 Mar 2009 09:32:22 -0400 http://seekingalpha.com/article/124672-historical-data-disproves-trough-p-e-multiple-on-trough-earnings-myth?source=feed#comment-417733 417733 Sun, 08 Mar 2009 06:54:19 -0400 http://seekingalpha.com/article/124665-this-band-aid-approach-is-getting-old?source=feed#comment-417724 417724 ]]> Sun, 08 Mar 2009 05:57:34 -0400 ]]> http://seekingalpha.com/article/124528-2009-depression-will-be-nothing-like-1929?source=feed#comment-415527 415527
Well, for someone who is bashing doom and gloomers, this is a pretty bold statement. And if you don't mean like the Great Depression...well, what do you mean? I'll stick with deep recession for now. ]]> Fri, 06 Mar 2009 06:21:48 -0500
Well, for someone who is bashing doom and gloomers, this is a pretty bold statement. And if you don't mean like the Great Depression...well, what do you mean? I'll stick with deep recession for now. ]]> http://seekingalpha.com/article/124548-watch-this-sector-during-the-upcoming-bear-market-rally?source=feed#comment-415522 415522
I'm not sure four is a big enough sample size. I may flip a coin four times and it may come up heads each time. Also, I'm not sure what the time frames are here. The P/E fell from above 20 in the past to single digits but does that mean the market was lower? If earnings grew 10% annually, then you could have had a 20 p/e market become a less than 10 p/e/ market in eight years with no change in price. Just food for thought.



]]> Fri, 06 Mar 2009 06:09:17 -0500
I'm not sure four is a big enough sample size. I may flip a coin four times and it may come up heads each time. Also, I'm not sure what the time frames are here. The P/E fell from above 20 in the past to single digits but does that mean the market was lower? If earnings grew 10% annually, then you could have had a 20 p/e market become a less than 10 p/e/ market in eight years with no change in price. Just food for thought.



]]> http://seekingalpha.com/article/123319-12-attractive-companies-that-also-pay-a-dividend?source=feed#comment-407529 407529 Sun, 01 Mar 2009 05:54:06 -0500 http://seekingalpha.com/article/123298-dr-doom-responds-on-wells-fargo?source=feed#comment-407208 407208 Sat, 28 Feb 2009 16:21:32 -0500 http://seekingalpha.com/article/123273-siegel-vs-standard-poor-s?source=feed#comment-406950 406950 Sat, 28 Feb 2009 10:36:35 -0500 http://seekingalpha.com/article/123273-siegel-vs-standard-poor-s?source=feed#comment-406942 406942
But just to play Devil's Advocate, I noticed on the S&P spreadsheet that operating earnings in 1997 were around $40 and the Index was were it is now. While tech stocks and their high multiples skewed the P/E to the upside at that time, I wonder if the financial sector isn't doing the same on the downside. When I see a companies like Proctor & Gamble, J&J, and so forth selling at 12x next year's earnings, it makes me wonder if this isn't a good time to be a selective buyer.


]]> Sat, 28 Feb 2009 10:31:42 -0500
But just to play Devil's Advocate, I noticed on the S&P spreadsheet that operating earnings in 1997 were around $40 and the Index was were it is now. While tech stocks and their high multiples skewed the P/E to the upside at that time, I wonder if the financial sector isn't doing the same on the downside. When I see a companies like Proctor & Gamble, J&J, and so forth selling at 12x next year's earnings, it makes me wonder if this isn't a good time to be a selective buyer.


]]> http://seekingalpha.com/article/123240-the-economy-and-why-it-s-taking-so-long-to-fix-it?source=feed#comment-406715 406715










]]> Fri, 27 Feb 2009 23:23:25 -0500










]]> http://seekingalpha.com/article/122746-bank-nationalization-proponents-suffer-first-of-hopefully-many-setbacks?source=feed#comment-404033 404033 Thu, 26 Feb 2009 03:52:39 -0500 http://seekingalpha.com/article/122743-geithner-s-stress-test-revealed?source=feed#comment-404022 404022 Thu, 26 Feb 2009 03:38:15 -0500 http://seekingalpha.com/article/122039-slow-down-mr-roubini?source=feed#comment-399578 399578
But first, is it correct that Roubini has been a bear for over a decade? I ask because it is the first time I've heard that.


>>>In fact, it looks like he's already wrong--the White House has publicly announced it will not nationalize banks and has taken action to prop up Citigroup.

***As far as I know, the White House has used to language to indicate they would prefer to follow this or that course and not nationalize. But I haven't yet heard them say they will absolutely not consider nationalization. Have you? Just a reminder, we heard a lot of talk about FNM and FRE before they came under government control. That wasn't a full nationalization but I don't expect one to occur with C or BAC either. I expect something akin to AIG. C is looking for the government to take a 40% stake. That could increase over time. Who knows?

Maybe there is a degree of hysteria going here. On other hand, maybe some are not coming to terms with how deep this crisis is because it is so unfamiliar. Hard to imagine C or BAC being nationalized but economic history is full of shocking occurences. I'm still a little stunned about AIG. Anyway, I see your point about the rapidly rising level of pessimism.
]]> Mon, 23 Feb 2009 06:39:15 -0500
But first, is it correct that Roubini has been a bear for over a decade? I ask because it is the first time I've heard that.


>>>In fact, it looks like he's already wrong--the White House has publicly announced it will not nationalize banks and has taken action to prop up Citigroup.

***As far as I know, the White House has used to language to indicate they would prefer to follow this or that course and not nationalize. But I haven't yet heard them say they will absolutely not consider nationalization. Have you? Just a reminder, we heard a lot of talk about FNM and FRE before they came under government control. That wasn't a full nationalization but I don't expect one to occur with C or BAC either. I expect something akin to AIG. C is looking for the government to take a 40% stake. That could increase over time. Who knows?

Maybe there is a degree of hysteria going here. On other hand, maybe some are not coming to terms with how deep this crisis is because it is so unfamiliar. Hard to imagine C or BAC being nationalized but economic history is full of shocking occurences. I'm still a little stunned about AIG. Anyway, I see your point about the rapidly rising level of pessimism.
]]> http://seekingalpha.com/article/121912-bank-of-america-continues-to-stand-strong?source=feed#comment-399502 399502
I was the first to post but I forgot to mention I actually own BAC (worth so little now). Yet, I still think many longs are not looking at this objectively enough (here come the "thumbs down"). I can understand holding the common at this point because its so beaten down you might as well let it ride (I am). But I still think the chances of some form of nationalization are in the cards (see the first post above). It appears Citibank took another step toward an AIG like quasi-nationalization and BAC may be the next one up. Good luck. ]]> Mon, 23 Feb 2009 02:06:44 -0500
I was the first to post but I forgot to mention I actually own BAC (worth so little now). Yet, I still think many longs are not looking at this objectively enough (here come the "thumbs down"). I can understand holding the common at this point because its so beaten down you might as well let it ride (I am). But I still think the chances of some form of nationalization are in the cards (see the first post above). It appears Citibank took another step toward an AIG like quasi-nationalization and BAC may be the next one up. Good luck. ]]> http://seekingalpha.com/article/121912-bank-of-america-continues-to-stand-strong?source=feed#comment-398445 398445
Many of your arguments that BAC will not be nationalized are the same ones we've heard before from other CEOs except in those cases the struggling company was either bought out at penny stock prices, succumbed to a form of nationalization, or they went bankrupt. And I doubt anyone thinks Ken Lewis is a paragon of honesty. I stopped taking what he says seriously a while back. As for the government, what did you think the White House would say? Remember what they said about FNM and FRE? Have you noticed they have yet to completely rule out nationalization? Ask yourself why.

No one - including myself - knows what will happen to BAC. My sense is the Obama Adminstration will do various things to buy time and only as a last resort will they opt for some form of nationalization. Even the government can do only so much and if the recession gets deeper they may have to cut bait.

You may eventually be right but the arguments you use to support your opinion seem weak and given where you work perhaps lack objectivity.







]]> Sun, 22 Feb 2009 10:10:01 -0500
Many of your arguments that BAC will not be nationalized are the same ones we've heard before from other CEOs except in those cases the struggling company was either bought out at penny stock prices, succumbed to a form of nationalization, or they went bankrupt. And I doubt anyone thinks Ken Lewis is a paragon of honesty. I stopped taking what he says seriously a while back. As for the government, what did you think the White House would say? Remember what they said about FNM and FRE? Have you noticed they have yet to completely rule out nationalization? Ask yourself why.

No one - including myself - knows what will happen to BAC. My sense is the Obama Adminstration will do various things to buy time and only as a last resort will they opt for some form of nationalization. Even the government can do only so much and if the recession gets deeper they may have to cut bait.

You may eventually be right but the arguments you use to support your opinion seem weak and given where you work perhaps lack objectivity.







]]> http://seekingalpha.com/article/121799-madoff-stanford-sagas-new-twists?source=feed#comment-397414 397414

Exactly! I was thinking the same thing. IMO, this thing is too big for just one person to run things.




]]> Sat, 21 Feb 2009 01:20:07 -0500

Exactly! I was thinking the same thing. IMO, this thing is too big for just one person to run things.




]]> http://seekingalpha.com/article/120679-procter-and-less-gamble?source=feed#comment-389120 389120 Sun, 15 Feb 2009 09:48:27 -0500 http://seekingalpha.com/news/market_currents/post/17234?source=feed#comment-380544 380544
]]> Mon, 09 Feb 2009 02:34:14 -0500
]]> http://seekingalpha.com/article/118991-leaving-las-vegas-jaw-dropping-action-in-casinos?source=feed#comment-378082 378082 Fri, 06 Feb 2009 08:56:43 -0500 http://seekingalpha.com/article/118420-harley-davidson-don-t-get-too-excited-about-buffett-s-investment?source=feed#comment-375453 375453 Wed, 04 Feb 2009 10:27:37 -0500 http://seekingalpha.com/article/118438-nyt-broadband-story-self-fulfilling-prophecies-make-bad-journalism?source=feed#comment-375422 375422 Wed, 04 Feb 2009 10:09:04 -0500 http://seekingalpha.com/article/117901-philip-morris-one-giant-currency-play?source=feed#comment-373088 373088 Mon, 02 Feb 2009 08:31:22 -0500