ETFnerd's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/162558/comments http://seekingalpha.com/news/market_currents/post/31052?source=feed#comment-639950 639950

On Aug 21 12:29 PM Stone Fox Capital wrote:

> Unless your using the expected 2010 PE ratio your looking in the
> rear view mirror. Its hard to imagine that with a global recovery
> that the SP500 earns less then $80 making the current PE just 12.75.
> Whoever wrote that article is absurd!]]> Fri, 21 Aug 2009 12:34:58 -0400

On Aug 21 12:29 PM Stone Fox Capital wrote:

> Unless your using the expected 2010 PE ratio your looking in the
> rear view mirror. Its hard to imagine that with a global recovery
> that the SP500 earns less then $80 making the current PE just 12.75.
> Whoever wrote that article is absurd!]]> http://seekingalpha.com/news/market_currents/post/29040?source=feed#comment-605183 605183
Disclosure should be transparent and indicative of actual results. The banking industry is spending other people's money to put lipstick on a pig.


On Jul 28 11:46 AM Tom Armistead wrote:

> The reason FASB and IASB are experiencing political pressure is that
> they are sitting around diddling with clarifications and obfuscations
> when they should just admit they are wrong.]]> Tue, 28 Jul 2009 12:48:49 -0400
Disclosure should be transparent and indicative of actual results. The banking industry is spending other people's money to put lipstick on a pig.


On Jul 28 11:46 AM Tom Armistead wrote:

> The reason FASB and IASB are experiencing political pressure is that
> they are sitting around diddling with clarifications and obfuscations
> when they should just admit they are wrong.]]> http://seekingalpha.com/news/market_currents/post/29040?source=feed#comment-604956 604956

On Jul 28 10:31 AM Niner wrote:

> If the members of FASB and IASB followed the standards set forth
> by the two organizations, maybe just maybe Congress wouldn't feel
> compelled to meddle!]]> Tue, 28 Jul 2009 10:44:15 -0400

On Jul 28 10:31 AM Niner wrote:

> If the members of FASB and IASB followed the standards set forth
> by the two organizations, maybe just maybe Congress wouldn't feel
> compelled to meddle!]]> http://seekingalpha.com/news/market_currents/post/29040?source=feed#comment-604955 604955
On Jul 28 10:21 AM coloneldebugger wrote:

> I guess FASB and IASB would rather just go back to the old way of
> doing accounting. Getting paid off to sign off on whatever their
> client wants to present to the public.]]> Tue, 28 Jul 2009 10:43:26 -0400
On Jul 28 10:21 AM coloneldebugger wrote:

> I guess FASB and IASB would rather just go back to the old way of
> doing accounting. Getting paid off to sign off on whatever their
> client wants to present to the public.]]> http://seekingalpha.com/article/138701-expect-some-citi-fireworks?source=feed#comment-513342 513342

On May 21 02:09 PM Poor Dude wrote:

> The dilution is known and already priced in, but the index funds
> haven't yet had to adjust their holdings because the conversion hasn't
> yet happened. When it happens (early in June, last I heard), they
> will then be forced to adjust their weightings. And yes, the price
> of Citi could easily quadruple within a few weeks after the conversion.
> (And possibly go up even more, as the last shorts are forced out
> and that whole "momentum" thing gets started.)
>
> It's an interesting point, and one which hadn't occurred to me. Thanks!]]> Thu, 21 May 2009 15:17:46 -0400

On May 21 02:09 PM Poor Dude wrote:

> The dilution is known and already priced in, but the index funds
> haven't yet had to adjust their holdings because the conversion hasn't
> yet happened. When it happens (early in June, last I heard), they
> will then be forced to adjust their weightings. And yes, the price
> of Citi could easily quadruple within a few weeks after the conversion.
> (And possibly go up even more, as the last shorts are forced out
> and that whole "momentum" thing gets started.)
>
> It's an interesting point, and one which hadn't occurred to me. Thanks!]]> http://seekingalpha.com/article/138701-expect-some-citi-fireworks?source=feed#comment-512731 512731
Although it can be argued that not having to pay the preferred dividend may be beneficial to C, I don't see how that makes C 4x times more valuable on day one. Also the increased float will dilute the equity shares putting downward pressure on the price of the stock.

This is probably the worst analysis I have ever seen on seeking alpha. Why is this article so popular?]]> Thu, 21 May 2009 10:03:04 -0400
Although it can be argued that not having to pay the preferred dividend may be beneficial to C, I don't see how that makes C 4x times more valuable on day one. Also the increased float will dilute the equity shares putting downward pressure on the price of the stock.

This is probably the worst analysis I have ever seen on seeking alpha. Why is this article so popular?]]> http://seekingalpha.com/news/market_currents/post/24238?source=feed#comment-504234 504234
Chrysler is insolvent. The bondholders have a claim in liquidation. Chrysler bondholders do not want their piece of Chrysler in liquidation. They won't realize much. They want a piece of the going concern financed by the government.

The gov't will only provide financing if its under their terms.

If Chrysler wants to press its claims under the entity as a going concern, they should just pony up the cash to recapitalize the company.

Silence...chirp, chirp]]> Thu, 14 May 2009 15:38:46 -0400
Chrysler is insolvent. The bondholders have a claim in liquidation. Chrysler bondholders do not want their piece of Chrysler in liquidation. They won't realize much. They want a piece of the going concern financed by the government.

The gov't will only provide financing if its under their terms.

If Chrysler wants to press its claims under the entity as a going concern, they should just pony up the cash to recapitalize the company.

Silence...chirp, chirp]]> http://seekingalpha.com/news/market_currents/post/24238?source=feed#comment-504210 504210 Thu, 14 May 2009 15:24:37 -0400 http://seekingalpha.com/news/market_currents/post/24238?source=feed#comment-504197 504197 -Abraham Lincoln

Thankfully he did not write it as follows:
"Government of the corporations, by the corporations, for the corporations, shall not perish from the Earth."

A few bad apples encompasses GM, Ford and Chrystler who fought tooth and nail during the past few decades to abrogate every union contract to curtail wages, healthcare, pensions in order to make up for their management mistakes.

Chrystler bondholders would not be in their situation if they didn't have their hand out to be bailed out by the government, or in other words the people.

Go cry to someone who cares.]]> Thu, 14 May 2009 15:18:08 -0400 -Abraham Lincoln

Thankfully he did not write it as follows:
"Government of the corporations, by the corporations, for the corporations, shall not perish from the Earth."

A few bad apples encompasses GM, Ford and Chrystler who fought tooth and nail during the past few decades to abrogate every union contract to curtail wages, healthcare, pensions in order to make up for their management mistakes.

Chrystler bondholders would not be in their situation if they didn't have their hand out to be bailed out by the government, or in other words the people.

Go cry to someone who cares.]]> http://seekingalpha.com/news/market_currents/post/24238?source=feed#comment-503892 503892
Isn't that exactly what they have been doing to unions and employees for decades?

Seems like the owners of capital don't have any problems trampling on the rights of unions, employees, consumers or any other constituency with which they have a contractual relationship when they no longer feel like paying for wages, health care, pensions, warranties, etc.

They are the frst to hide behind bankruptcy, or threaten it as they will.

Cry me a river for getting exactly what they've been dishing out since the system was created. Can't stop crying when they are seated at the other side of the table and the gov't is protecting the interests of the people.]]> Thu, 14 May 2009 13:05:17 -0400
Isn't that exactly what they have been doing to unions and employees for decades?

Seems like the owners of capital don't have any problems trampling on the rights of unions, employees, consumers or any other constituency with which they have a contractual relationship when they no longer feel like paying for wages, health care, pensions, warranties, etc.

They are the frst to hide behind bankruptcy, or threaten it as they will.

Cry me a river for getting exactly what they've been dishing out since the system was created. Can't stop crying when they are seated at the other side of the table and the gov't is protecting the interests of the people.]]> http://seekingalpha.com/article/125914-mark-to-market-the-bogeyman-of-the-1930s-is-back?source=feed#comment-427092 427092
Sir, you hold yourself out to be a credentialed expert in accounting. I contend that you are a fraud.


On Mar 14 07:42 PM ETFnerd wrote:

> For further evidence, here is the Citigroup Annual Report from 2006
> which does not apply SFAS 157.
>
> idea.sec.gov/Archives/...
>
>
> On page 68, there is a section called: "Mark-to-Market (seekingalpha.com/symbo...)
> Receivables/Payables" which shows the mark-to-market assets and lisbilities
> of Citigroup's derivative contracts.
>
> Again I quote what Mr. Sunshine wrote: "Maybe it is just coincidence,
> but immediately after mark-to-market accounting was restored in 2007
> the banking sector started into a death spiral."
>
> I encourage anyone who attended Mr. Sunshine's accounting classes
> to seek a refund.]]> Sun, 15 Mar 2009 23:07:44 -0400
Sir, you hold yourself out to be a credentialed expert in accounting. I contend that you are a fraud.


On Mar 14 07:42 PM ETFnerd wrote:

> For further evidence, here is the Citigroup Annual Report from 2006
> which does not apply SFAS 157.
>
> idea.sec.gov/Archives/...
>
>
> On page 68, there is a section called: "Mark-to-Market (seekingalpha.com/symbo...)
> Receivables/Payables" which shows the mark-to-market assets and lisbilities
> of Citigroup's derivative contracts.
>
> Again I quote what Mr. Sunshine wrote: "Maybe it is just coincidence,
> but immediately after mark-to-market accounting was restored in 2007
> the banking sector started into a death spiral."
>
> I encourage anyone who attended Mr. Sunshine's accounting classes
> to seek a refund.]]> http://seekingalpha.com/article/125914-mark-to-market-the-bogeyman-of-the-1930s-is-back?source=feed#comment-425927 425927 sorry, thet's Citigroup's 2005 annual Report. :)]]> Sat, 14 Mar 2009 19:48:42 -0400 sorry, thet's Citigroup's 2005 annual Report. :)]]> http://seekingalpha.com/article/125914-mark-to-market-the-bogeyman-of-the-1930s-is-back?source=feed#comment-425922 425922
idea.sec.gov/Archives/...

On page 68, there is a section called: "Mark-to-Market (MTM) Receivables/Payables" which shows the mark-to-market assets and lisbilities of Citigroup's derivative contracts.

Again I quote what Mr. Sunshine wrote: "Maybe it is just coincidence, but immediately after mark-to-market accounting was restored in 2007 the banking sector started into a death spiral."

I encourage anyone who attended Mr. Sunshine's accounting classes to seek a refund.]]> Sat, 14 Mar 2009 19:42:37 -0400
idea.sec.gov/Archives/...

On page 68, there is a section called: "Mark-to-Market (MTM) Receivables/Payables" which shows the mark-to-market assets and lisbilities of Citigroup's derivative contracts.

Again I quote what Mr. Sunshine wrote: "Maybe it is just coincidence, but immediately after mark-to-market accounting was restored in 2007 the banking sector started into a death spiral."

I encourage anyone who attended Mr. Sunshine's accounting classes to seek a refund.]]> http://seekingalpha.com/article/125914-mark-to-market-the-bogeyman-of-the-1930s-is-back?source=feed#comment-425894 425894
On May 1993 the FASB issued SFAS 115 effective for fiscal years beginning after December 15, 1993. The following is paragraph 12:

"TRADING SECURITIES AND AVAILABLE-FOR-SALE SECURITIES

12. Investments in debt securities that are not classified as held-to-maturity and equity securities that have readily determinable fair values shall be classified in one of the following categories and measured at fair value in the statement of financial position:

a. Trading securities. Securities that are bought and held principally for the purpose of selling them in the near term (thus held for only a short period of time) shall be classified as trading securities. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on short-term differences in price. [Mortgage-backed securities that are held for sale in conjunction with mortgage banking activities, as described in FASB Statement No. 65, Accounting for Certain Mortgage Banking Activities, shall be classified as trading securities. (Other mortgage-backed securities not held for sale in conjunction with mortgage banking activities shall be classified based on the criteria in this paragraph and paragraph 7.)]"

[bracketed section was superceded by paragraph 5 of SFAS 134]

This evidence positively disproves Mr. Sunshine's assertion:

"For approximately 70 years after FDR’s decision, ***banks operated without mark-to-market accounting*** and the economy didn’t have the threat of another depression."

***my emphasis added.

Anyone with a modicum of accounting knowledge would have immediately known that the above statement by Mr. Sunshine was absurd, which led me to suspect his stated credentials. Another way of knowing his statements were false was to pick up the financial stmts of any large financial institution prior to 2007.

The takeaway is that you shouldn't believe everything you read, and that easily checked facts can derail an argument.

]]> Sat, 14 Mar 2009 18:11:20 -0400
On May 1993 the FASB issued SFAS 115 effective for fiscal years beginning after December 15, 1993. The following is paragraph 12:

"TRADING SECURITIES AND AVAILABLE-FOR-SALE SECURITIES

12. Investments in debt securities that are not classified as held-to-maturity and equity securities that have readily determinable fair values shall be classified in one of the following categories and measured at fair value in the statement of financial position:

a. Trading securities. Securities that are bought and held principally for the purpose of selling them in the near term (thus held for only a short period of time) shall be classified as trading securities. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on short-term differences in price. [Mortgage-backed securities that are held for sale in conjunction with mortgage banking activities, as described in FASB Statement No. 65, Accounting for Certain Mortgage Banking Activities, shall be classified as trading securities. (Other mortgage-backed securities not held for sale in conjunction with mortgage banking activities shall be classified based on the criteria in this paragraph and paragraph 7.)]"

[bracketed section was superceded by paragraph 5 of SFAS 134]

This evidence positively disproves Mr. Sunshine's assertion:

"For approximately 70 years after FDR’s decision, ***banks operated without mark-to-market accounting*** and the economy didn’t have the threat of another depression."

***my emphasis added.

Anyone with a modicum of accounting knowledge would have immediately known that the above statement by Mr. Sunshine was absurd, which led me to suspect his stated credentials. Another way of knowing his statements were false was to pick up the financial stmts of any large financial institution prior to 2007.

The takeaway is that you shouldn't believe everything you read, and that easily checked facts can derail an argument.

]]> http://seekingalpha.com/article/125914-mark-to-market-the-bogeyman-of-the-1930s-is-back?source=feed#comment-425045 425045
Are you really who you say you are?]]> Fri, 13 Mar 2009 16:58:40 -0400
Are you really who you say you are?]]> http://seekingalpha.com/article/125914-mark-to-market-the-bogeyman-of-the-1930s-is-back?source=feed#comment-425039 425039
"For approximately 70 years after FDR’s decision, banks operated without mark-to-market accounting and the economy didn’t have the threat of another depression."
quoted for preservation.]]> Fri, 13 Mar 2009 16:52:58 -0400
"For approximately 70 years after FDR’s decision, banks operated without mark-to-market accounting and the economy didn’t have the threat of another depression."
quoted for preservation.]]> http://seekingalpha.com/article/112819-what-does-gmac-s-bond-exchange-failure-mean-for-detroit?source=feed#comment-342792 342792
The automakers are not profitable companies. Their equity is [just about]worthless. Money to buy back debt would have to be borrowed from other debtholders or new equity holders like the govt. New lenders/owners would want to see that the proceeds are used to make the business viable, not to settle debts with previous debtholders. If they allow it, they may well be next in line to get shafted at $0.20 on the dollar or likely less in the next iteration.


On Dec 31 12:30 PM prudentinvestor wrote:

> Good. Now a question for you or others on this forum:
>
> Not being knowledgeable about bond covenants, I've always wondered
> why a company can't simply buy back its bonds on the open market,
> just like a stock buyback. When a company's bond is trading at $0.20
> on the dollar, why don't they just buy it on the market?
>
> Thanks.]]> Wed, 31 Dec 2008 14:44:33 -0500
The automakers are not profitable companies. Their equity is [just about]worthless. Money to buy back debt would have to be borrowed from other debtholders or new equity holders like the govt. New lenders/owners would want to see that the proceeds are used to make the business viable, not to settle debts with previous debtholders. If they allow it, they may well be next in line to get shafted at $0.20 on the dollar or likely less in the next iteration.


On Dec 31 12:30 PM prudentinvestor wrote:

> Good. Now a question for you or others on this forum:
>
> Not being knowledgeable about bond covenants, I've always wondered
> why a company can't simply buy back its bonds on the open market,
> just like a stock buyback. When a company's bond is trading at $0.20
> on the dollar, why don't they just buy it on the market?
>
> Thanks.]]> http://seekingalpha.com/article/103919-exchange-traded-derivatives-why-stop-at-cds?source=feed#comment-298193 298193 www.bis.org/statistics...

This is probably the source of Pirrong's $600 trillion #. If you net net down the f/x and ir contracts, you'll have a much lower number. The MV for the classifications will have changed a great deal from the values athered as of 12/31/07.]]> Tue, 04 Nov 2008 13:57:51 -0500 www.bis.org/statistics...

This is probably the source of Pirrong's $600 trillion #. If you net net down the f/x and ir contracts, you'll have a much lower number. The MV for the classifications will have changed a great deal from the values athered as of 12/31/07.]]> http://seekingalpha.com/article/103919-exchange-traded-derivatives-why-stop-at-cds?source=feed#comment-298188 298188
This is clearly a wrong statement, but feel free to come back and provide evidence. Does posting articles in SA mean that you don't have to check facts any more? Is SA the recepticle of fractured journalism? ]]> Tue, 04 Nov 2008 13:51:32 -0500
This is clearly a wrong statement, but feel free to come back and provide evidence. Does posting articles in SA mean that you don't have to check facts any more? Is SA the recepticle of fractured journalism? ]]> http://seekingalpha.com/article/102958-mark-cuban-s-new-tarp-etf-idea?source=feed#comment-294637 294637
You could also hide the name of the offeror so that a stigma does not attach to the seller.

The problem is not in price discovery. The problem is that if all these assets were priced by the market and they cleared at market prices, thousands of financial intitutions would be insolvent. The bailout is a mechanism for inflating toxic asset prices. That's why it's a bailout. The inflated price provides relief from immediate insolvency.

The solvency issues of many financial firms have not been resolved, and this proposal does not provide a feasible solution.]]> Thu, 30 Oct 2008 17:23:14 -0400
You could also hide the name of the offeror so that a stigma does not attach to the seller.

The problem is not in price discovery. The problem is that if all these assets were priced by the market and they cleared at market prices, thousands of financial intitutions would be insolvent. The bailout is a mechanism for inflating toxic asset prices. That's why it's a bailout. The inflated price provides relief from immediate insolvency.

The solvency issues of many financial firms have not been resolved, and this proposal does not provide a feasible solution.]]> http://seekingalpha.com/article/100890-in-the-year-2010-will-cdos-still-exist?source=feed#comment-287281 287281
Financial firms have portfolios of junk corporate debt, B and equity tranches from securitizations that are not marketable. These can be pooled, structured and combined with credit enhancements like bond insurance, CDS, etc.

Voila, a pool of junk assets suddenly produces several tranches of investment-grade securities.

Due to restrictions on pensions and other institutional buyers ability to hold junk-rated debt, in a normal market, the market trades investment-grade debt at a premium higher than that warranted by the credit characteristics of these securities alone. The junk-rated debt trades at a similar discount for this same demand constraint.

Therefore restructuring the cash flows in a CDO pool generates a profit to the asset structurer.

This is basic finance.]]> Tue, 21 Oct 2008 15:08:49 -0400
Financial firms have portfolios of junk corporate debt, B and equity tranches from securitizations that are not marketable. These can be pooled, structured and combined with credit enhancements like bond insurance, CDS, etc.

Voila, a pool of junk assets suddenly produces several tranches of investment-grade securities.

Due to restrictions on pensions and other institutional buyers ability to hold junk-rated debt, in a normal market, the market trades investment-grade debt at a premium higher than that warranted by the credit characteristics of these securities alone. The junk-rated debt trades at a similar discount for this same demand constraint.

Therefore restructuring the cash flows in a CDO pool generates a profit to the asset structurer.

This is basic finance.]]> http://seekingalpha.com/article/100824-why-lending-standards-did-not-fall?source=feed#comment-287165 287165
...put down your crack pipe and slowly walk away.]]> Tue, 21 Oct 2008 12:58:53 -0400
...put down your crack pipe and slowly walk away.]]> http://seekingalpha.com/article/100766-trying-to-look-forward?source=feed#comment-286687 286687 Mon, 20 Oct 2008 17:34:08 -0400 http://seekingalpha.com/article/100696-why-the-cds-market-didn-t-fail?source=feed#comment-286325 286325 Mon, 20 Oct 2008 11:16:59 -0400 http://seekingalpha.com/article/100696-why-the-cds-market-didn-t-fail?source=feed#comment-286324 286324
To say that there is little to worry about in a highly levered product where written notional is 2-3 digit multiples of the volume of the reference asset is irresponsible and misleading.]]> Mon, 20 Oct 2008 11:16:25 -0400
To say that there is little to worry about in a highly levered product where written notional is 2-3 digit multiples of the volume of the reference asset is irresponsible and misleading.]]> http://seekingalpha.com/article/100696-why-the-cds-market-didn-t-fail?source=feed#comment-286315 286315 Mon, 20 Oct 2008 11:08:00 -0400 http://seekingalpha.com/article/100696-why-the-cds-market-didn-t-fail?source=feed#comment-286201 286201
Synthetic CDO = CDS.

The synthetics are on the books as debt and aren't even MTM.]]> Mon, 20 Oct 2008 09:31:09 -0400
Synthetic CDO = CDS.

The synthetics are on the books as debt and aren't even MTM.]]> http://seekingalpha.com/article/97320-5-things-the-treasury-should-clarify-now?source=feed#comment-264697 264697
Spoken like a true investment banker protecting his bonus.

I don't believe that exec pay be should be limited, but it should be fair. Today, the pay of financial execs and associates on trading floors is based on a if we win we reap huge bonuses and if we lose taxpayers, investors or some other bag holders reap big losses. But certainly, the IB creators and distributors never want to take responsibility nor want to be accountable for the losses by returning some of the obscene bonuses paid out for failed deals.

There is a huge agency problem at IBs where the investment horizon of any deal is the bankers' bonus pay out date. Using CDS you can insure the garbage that comes out of their shops for a couple of years. They receive their bonus, watch it trade with protection, and subsequently laugh all the way to the bank when the bagholders are hit with huge losses.

I was impressed with the article until in the end, when the author shows his true colors as another weasel with valuable interests to protect. ]]> Thu, 25 Sep 2008 10:00:47 -0400
Spoken like a true investment banker protecting his bonus.

I don't believe that exec pay be should be limited, but it should be fair. Today, the pay of financial execs and associates on trading floors is based on a if we win we reap huge bonuses and if we lose taxpayers, investors or some other bag holders reap big losses. But certainly, the IB creators and distributors never want to take responsibility nor want to be accountable for the losses by returning some of the obscene bonuses paid out for failed deals.

There is a huge agency problem at IBs where the investment horizon of any deal is the bankers' bonus pay out date. Using CDS you can insure the garbage that comes out of their shops for a couple of years. They receive their bonus, watch it trade with protection, and subsequently laugh all the way to the bank when the bagholders are hit with huge losses.

I was impressed with the article until in the end, when the author shows his true colors as another weasel with valuable interests to protect. ]]> http://seekingalpha.com/article/92502-ignore-stock-market-volatility?source=feed#comment-238318 238318 Mon, 25 Aug 2008 09:37:56 -0400 http://seekingalpha.com/article/87688-merrill-cdo-deal-how-can-it-book-a-sale?source=feed#comment-217569 217569 Tue, 29 Jul 2008 13:28:50 -0400