pshah

Why Merrill's CDO Sale Doesn't Mean Big Writeoffs Elsewhere

Vikram Pandit has a 'new broom' at Citi too - and probably bigger problems at the behemoth. Those 2005 CDOs are almost just as toxic as the 2006 & 2007 versions and its just a matter of time for their firesale value to be realized.
Remember - those 06 & 07 versions were rated the same as the 05: AAA.

Financials: How - And When - We Reached the Bottom

Every quarter, with these 'better than expected' earnings, bulls crawl out of the bushes and start screaming victory. Give them a couple of weeks till reality sets in.

Financials: How - And When - We Reached the Bottom

Just like most folks on this site, I'm no expert at this. But let's consider people on opposite sides of this 'bottom vs. no bottom' debate:

No bottom: Jim Rogers, Soros, John Paulson, Phil Falcone, Jim Chanos
vs.
Bottom: Hank Paulson, our trusted govt., Bill Miller, author Tom Brown

First, we have a list of investors who have had a very long record of being right and succesful and who continue to bet against the financials and sell the rally (see WSJ today). Then we have the Pollyanas like Miller who's actually ranked in bottom 28% of fund managers by Morningstar for his 10yr performance and Tom Brown who's had a mixed record at best with his blunders like First Marblehead and CCRT.

Its a rout for the no-bottom team.

S&P 500 Earnings Beat Rate at 72%

Lets not forget that a lot of these positive earnings surprises were over substantially reduced estimates, especially for financials. Therefore, its too early to read anythng positive into this, given that the worst culprits like MER and C have yet to report.