Joe Rodney

Global Earnings Downturn Only 25% Done - Citi

"When others are greedy, get scared. When others are scared, get greedy."

Next Week Is a Big One for Bank Reports

What this service shows me is that a stock like BB&T is going nowhere over the next year. The projected PE for next year is about the same as it's PE for last year (6.76 vs.6.59), and less than the current year projection. The dividend may not be all that safe. Remember the Q1 report from WB where they virtually promised that the dividend was safe? Then turned right around and cut it to shreds.

Bear's Gone - Is Lehman Next?

Is this the same Henry Blodget who used to be at Merrill Lynch? I think he was charged with civil fraud by the SEC. I seem to recall that there were emails that said one thing, while publicly he was saying another. The inevitable question arose: "Which time were you telling the truth?"

Wachovia's 'Poorly Timed' Deals Put Dividend at Risk

If you listened to the 4th Quarter 2007 year end conference call presentation you heard Management say: "In 2008, [we are] confident that Wachovia will generate sufficient cash earnings to cover dividend payments, build credit reserves, invest in our businesses, support balance sheet growth and improve capital ratios."

Many people out there have a tendency to paint every company in an industry with the same broad brush without drilling down into the details. The fact of the matter is that as of Year end 2007, WB was in much better shape than the rest of the subprime mortgage industry and many other banks in general. Its tier 1 capital adequacy stood at 7.2% and it total capital adequacy ratio stood at 11.5%, which are both well in excess of minimum requirements and even "desirable" levels. This means that WB "has sufficient capital in relation to risk sensitive assets to absorb any risk rises in the near term."

Nonetheless, increased write offs in Q1 can be expected as the economy continues to falter. Will this result in a dividend cut? I don't think so. Yes, earnings will be weak, and the dividend payout ratio for 2008 will be high. But a dividend cut will crater the stock and will cause investors to abandon ship. I don't think WB will want this to happen.