RMG

CIT Group Announces More 'Restructuring', But Bankruptcy Outcome Still Unclear

As of the middle of this year, CIT and its operating units had $71 billion of assets and $64.9 billion of debt.

CIT is restructuring, which involves $10B debt reduction and debt holders owning the equity. This implies, assets of $71B, new debt of $54.9B (64.9-10) and an equity of $16.1B (71-54.9). In other words, debt holders’ debt of $64.9B will be replaced by a new debt of $54.9B and $16.1B of equity for a total of $71B. No wonder, debt holders agreed.

What is wrong with this logic?

CIT Group Announces More 'Restructuring', But Bankruptcy Outcome Still Unclear

Management and Board members have done a good job of keeping their (and employees' jobs) sacrificing share holders' interest. Until a few months back, they have been telling share holders that there will be a turnaround for the company with breakeven performance by the end of 2009

CIT Group Announces More 'Restructuring', But Bankruptcy Outcome Still Unclear

It seems to me, that CIT will file for bankruptcy, structured or not, leading to share holders getting wiped out. Any comments from any body?

Banks Failing To Disclose Derivatives Risk

If the author, with his knowledge and experience, has negative opinion on banks and is shorting them, I should expect that investing in banks is quite risky and if not resorting to shorting, at the least, one should liquidate banks' holdings (shares).

Dendreon: New Board Members Appointed, Things Have Never Looked Brighter

AGEN's revenue is tiny in spite of association with other large pharma companies.. Burn rate is relatively high. Balance sheet shows that it has cash to survive only couple of quarters. AGEN is mostly resorting to share dilution for cash. Wondering if the author has any comments on AGEN's survival?

CIT Group Does the Balance Sheet Shuffle

During last few quarters’ conference calls, CIT management has been telling investors that the losses incurred were only one time losses and by the end of the year things are going to turn around and CIT will start making positive earnings. The recent debt to equity swap shows that they want to keep the company and there by their jobs intact and sacrifice the equity holders. There is a pattern here followed by several companies’ management and the federal government. They both treat the share holders as sacrificial lambs or fools to have invested in the companies that have gone bad. There is very little accountability on the part of the management and government.

Friday Roundup: Commodities, Emerging Markets

I also experienced pop-up alerts with automatic virus scan while browsing SA articles. This happened once per day on three consecutive days, each time from a different external source originating from following web sites:

antispywarelivescanv5.com
check-your-pc-onlinev3...
safeonlinescannerv4.com

Each time I killed the program using Windows Task Manager's End Task. Not only the program gets terminated, the browser (I was using Safari) with all the Tabs also gets terminated and I had to restart the browser.

From Google search, I get the feeling that they are harmless, their virus scan is not real scan, but only they are trying to sell their antivirus software.

I was told by Live OneCare person that it is a spyware. When I scanned using Live OneCare virus scan (which took three hours), which is expected to detect both spyware and virus, it did not find any spyware or virus.

Hansen Poised to Benefit from New Products, International Expansion

very good information about HANS for investing. thanks

Friday Roundup: Better than Expected

Thanks to the author for providing a good picture of what the markets have been doing.

Why Ford Is a Goner

Ford will be at a huge disadvantage vs new GM and Chrysler because of Ford’s huge debt loads (while the other two have none). I guess Ford will go under and in order to protect UAW jobs, government will come to the rescue of Ford resulting in Ford’s fate mimicking that of GM and Chrysler, in other words, Ford’s stock will be near zero and Ford’s investors will disappear from the face of the earth.

Is China Really Trying to Create a Global Currency?

I am wondering why China is not buying the real estate properties in US, such as office properties, regional malls, amusement parks etc. which are very cheap now, a good source of cash flow, and with a good appreciation potential.

Is Hansen Natural a Value Trap?

Very good analysis. Provides basis for investing or at least swapping $ out of some other stocks into HANS.

Hedge Fund Liquidation in Pictures

I was looking for reasons why CHK crashed. Thanks for providing one.

The Citi Exclusivity Agreement

The agreement between Citigroup and Wachovia is posted here:
www.marketwatch.com/ne...

It does not show Citigroup's signature. Though it is signed by Wachovia official, his name and Title are not shown. Assuming Wachovia received the agreement with Citigroup's signature, I find it a clear violation by Wachovia and Wells Fargo officials to negotiate and sign a deal. My feeling is the Courts will declare Wachovia and Wells Fargo deal null and void and Wells Fargo will not be allowed to take over Wachovia. The only solution is for Citigroup and Wells Fargo to explore if they can divide Wachovia assets in a mutually beneficial deal.

Do Rising Stock Prices Mean Fundamentals Have Bottomed?

The author well said the psychology behind price movement. Understanding this, investors, with knowledge of fundamentals of a stock, can buy and sell for profit, as well as, take steps against paper losses.