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The End of the Credit Crisis

I'm no tax expert but a bit lost....

buyers will only pay 100k for bad $500k loan which is worth $300K...

but willing to pay $300K for a good $300K loan...

Ignoring tax benefits, why would the buyer not pay $100k for bad $500K loan and writedown the $200K. Hence get a good $300k loan for $100K and make 200% profit? Why not write down the loan to $200K - super save - and make 100% profit?

Isn't this the crux of stumbling block, banks are not willing to sell their loans for the fraction of what they paid for it nor reduce the principle? The $500K loan has a good part (repayable without foreclosure) so why is it worth only $100K unless that is what the expected repayment is.

Eight Reasons Bank of America Is Going to $20

The author may be dangerous go happy, but the idea is neat. I have similar bets (yes bets) on C and JPM. And will take up the BAC bet at $20 but will use a butterfly call as this is less risk or higher return. In the mean time I will us a calender spread to pay for the butterfly risk.

Bet - as it will be difficult to return to profitability within the next 2 years given the depth of current crisis. But, these companies will not fail as the government will not allow it. American nationalisation (no control) is possible as the companies will find it hard to pay the interest or the principle. RBS has to pay +$6 billion for the insurance from the British government by only doing business in Scotland!?

An Obama Speech to Light Wall Street on Fire

Another ranting article written by someone who wants their stocks to go back up.

Real value of the banks - how can you do that without market to market. Value base on purchase prices, face value, end value!? When the underlying is falling the assets are not worth what was paid for instead they worth the sale value which are probably less then 50cnt to the dollar. The rules can be changed but does reality change? The cat is out of the box. Liquidity can only address by open market auction. Buyers will want some return for the risk they are taking.

Your article is correct in that short term solutions are not going to hold water as in the case of AIG exemplifies.

Nationalization would be better since that is what is happening but without the control. $180 billion in AIG is not taking over the company? Shareholder dilution is sad but necessary part of the game. Shareholders should have got out long time ago. Looks like Uncle Sam and the whole system is in for shock if the stories of $60 billion losses are true.

Obsessing About Global Bank Stocks in the Post-Lehman World

Given the severity and globally spread of the situation its no surprise that all major bank stocks are following the same pattern. Although, European countries, being more socialist inclined, can more easily nationalize their banks.

Also, no banks to do business with, nor major organization for that major if discounting government backed companies.

C and BAC have probably reached their support levels, unless another AIG happens.

Why Bank Nationalization Will Never Happen

Failure of the biggies would mean no company is safe. Given the current sentiments everyone will be holding cash or gold. Too many people, pensions, etc., will be wiped out. Great great depression!

What the Treasury Plan Needs: Price Discovery, Writedowns and More

Some points in your article...

...TG was the Fed Governor at NYC so he is in mix of things from the start - one month in the job excuse doesn't cut it.;
...Obama made the mistake of picking TG if he didn't understand the current problems or have a solution to propose at his job interview;
...markets were disappoint on what he DIDN'T say as oppose to what he said as the expectation were built up by his boss - urgency, action, otherwise, etc. instead we got more time is needed and some vague framework which was already known.

Wall Street Breakfast: Must-Know News

Why worry about employee retention? Are many places to leave for? Be happy if you have job. Why does the banks need the best people? Its back to basic of lending money and taking interest payments.

Would You Buy Bank of America Common?

Relatively speaking, their purchases of stock is probably a fraction of their existing wealth, so does it add up to much? I would be more impressed if they spent +30% of their wealth into the stock.

Looks like they came together and decided to show some support for their stock. Another dead cat bounce? Should the government buy the toxic assets they will want some collateral in return and they will be forced to lend more hence take on even more risks.

Or are they acting on insider information?

Week in Review: Market Uptrend Broken, Will We Return to November Lows?

Great article. The Obama honeymoon may very short given earnings will be probably be more of the same.

Bleak Outlook for U.S. Banks Through 2009

So what is new? In bleak economy people can't pay their bills hence will default. Lending banks will take the hit either default or repackage the repayment terms. And, we are in a very bleak economy.

Pay Bankers Much Less

what top talent? have you forgotten it was these so called top guys got us into this mess?

Preview of the Bank Buy-In

Good or bad, US is playing catch up with Europe.

JPM probably don't want to take part since it claims to be the prudent banker.

Some form of control, similar to UK, is required for injection.

Paulson in a State of Panic

shorts aren't the culprits, but taking advantage of the situation. a certain way shorts are wake up call otherwise the situation could have even snowballed bigger.

policy and policy banks is what caused the current crisis. Chinese banks used to run on policy and lend blindly to comply with policy hence massive looses.

Financial Landscape: Writedowns, Losses and Capital Raised

write down are simple losses. does raising capital mean a dilution of shareholder wealth by increasing the shareholder base? both, write off and capital raising not good for the shareholder in this current environment.

The Main Street - Wall Street Bout, Round Two

the politicians should have known better and voted accordingly instead of appeasing their voters...they are voted in to make difficult decisions...the fallout will be a disaster across the globe...BAM! financial companies in Europe on the ropes, Asian financial companies are also feeling the pain of bank closures

this is not about main street vs wall street but keeping the life line of USA - credit