mikebrah

The highly-popular comparison of the current hope that banks can earn their way out of trouble to Japan - whose Lost Decade seems to prove the fallacy of that assumption - fails to capture what went wrong in Japan, and why the U.S. is so different, James Surowiecki says.

Cetin is just an inside joke amongst the Seeking Alpha webmasters. He has to be. Think about it, how could one man really be the first to post a comment on EVERY article EVERY day? And it adds that little something to the experience you don't get at other sites!

Keep up the good work SA, er Cetin!

MM

The highly-popular comparison of the current hope that banks can earn their way out of trouble to Japan - whose Lost Decade seems to prove the fallacy of that assumption - fails to capture what went wrong in Japan, and why the U.S. is so different, James Surowiecki says.

Agree with Market Sniper. This was incredibly shallow, almost completely thoughtless, journalism. The logic employed by the author was:

Michael Phelps won an Olympic medal in swimming, and therefore he could win an Olympic medal in track & field.

MM

Chrysler and Bankruptcy: The Gory Details

Let me see if I have this right.

The alleged purpose of the vast government interventions, bailouts, stimulus, guaranteed debts, etc. up until this point has been to "get credit flowing." But then they decide to destroy the sanctity of contractual rights and make lenders subservient to the State. Brilliant. Talk about being penny wise and dollar foolish!

So now the little remaining private capital in our system has to compete with government subsidized losers AND the reality that they have no contractual rights in their own private business agreements. Second half recovery, here we come!

Anyone who read that NYT article and thought the non-TARP lenders willingly relinquished their case is frighteningly naive. The NYT did everything it could to avoid coming out and saying what actually happened and it was STILL obvious.

Perhaps the most alarming aspect is how unaware Mainstream Americans seem to be about what this means for our future.

MM

Consumer Credit Continues to Plunge

Perhaps, but will the profits from this new book be anywhere near as high as the bubble years? Plus you have to factor in all the additional shares as dilution to future EPS.

Food for thought, anyway.

MM


On May 08 12:52 PM RiskReturnOptimizer wrote:

> Looks like Total Loans are down roughly 6% annualized rate. Keep
> in mind charge-offs are running at around 9% annualized rate (decreasing
> the portfolio book), so there is +3% growth in receivables.
>
> Most likely the growth in receivables is coming from two segments:
>
>
> 1. New, better credit quality borrowers, now that FICO scores and
> in-house underwriting models have been tightened significantly;<br/>
>
> 2. Existing (low risk) customers -- the high risk ones have already
> gotten their credit lines decreased, have been max out on their credit
> lines, or already charged-off or in delinquency -- existing customer
> behavior scores will ensure good quality new loans here;
>
> At this pace, the new book of loans will start to generate good returns
> (since the NCL assumptions are probably based on adverse scenario),
> APRs are much higher, and cost of funds are coming down due to TALF
> and other funding improvements. Good profitability here.
>
> If the stress test forces banks to reserve for two years of NCL under
> adverse scenario, then two years later the new book of loans will
> be excellent.

Stress Test Results Are Out - Leaks Were Right

Having a Fat Tire myself, cheers!


On May 07 08:06 PM tedfoo wrote:

> Stress tests make no inquiry into all those toxic assets which has
> been forgotten in this euphoria. I suppose the toxic assets aren't
> a big deal anymore since mark to market is gone. Of course this
> means no bank will actually sell their assets through the PPIP program....they
> would have to mark it down as a loss. Congrats, we created zombie
> banks.
>
> Didn't I also hear a rumor they were allowed to use their sham Q1
> profits for extrapolations for the entire year? Can someone verify?
> Was commercial real estate really actually truly looked at? Anyone?
>
>
> Seems like the greatest pump and dump scheme ever. Actually pretty
> smart the govt was able to pull it off and steal $80B of private
> money into this black hole while the green shoots are appearing.
> The average taxpayer is ready to let every one of these banks go
> under now, and no more TARPs were going to be given away by congress.
> Maybe the government actually saved the economy from future armageddon
> through all this manipulation? Maybe I give them too much credit.
> Maybe I just need a beer.

Adding to Capital One Financial Short Position: Gotta Love the Stress Test

AMZN is ripe. I shorted it into earnings and on the earnings pop and it buckled immediately after the initial pop. It looks like its been weakening ever since.

But, I am short COF and BAC as well and this may end up being another learning experience for me. But I have loads of available cash and a steely reserve so we will see. I'm prepared to go the distance.

MM


On May 07 07:48 PM It Figures wrote:

> Not clear from this why you are short, and continue to short, this
> stock, other than because "the system" is all screwed up. The little
> substance you do provide - regulators seem to be on their side, recent
> stock performance - suggest it's a better long.
>
> You would do much better, I think, shorting some of the past 6 month's
> winners that are now pretty tired and are not participating in this
> rally.

Stress Test Results Are Out - Leaks Were Right

The onslaught of equity raises that are about to occur is akin to a fat kid loading up on chocolate chip cookies before being shipped to fat camp for the summer.

MM

More Than 1 in 5 U.S. 'Homeowners' Actually Own Nothing

Jeff,

I'd bet money that Jimmy K is a guy and you just tried to hit on his spouse/girlfriend.

MM

Housing Recovery: Where Will Demand Come From?

Rent rates lag the real estate market. In other words, over the next year you will see dramatically lower rent rates.

MM

Do You Believe Borrowing Leads to Prosperity? (Part 2)

"Personally, I want to be financially secure rather than appear to be financially secure."

Amen.

User353372:
TIME FOR AN INTERVENTION!

MM

Feels Like February in Reverse: Time to Add to Short Positions

Ahh, they finally went through.

Key Ratios Between Gold, Silver, Oil and Stocks Are Moving

Dang, you beat me to it. I had to reread that part 2 or 3 times to make sure.

Makes it hard to put much credence in anything else in the article.

MM


On May 07 09:45 AM billyboy54 wrote:

>
> Ugh, are you quoting The Onion's "survey" as a serious source of
> news ?
>
> Hopefully you're aware that they're a satirical site......
>
> Otherwise, I agree that PMs are set to explode......

Feels Like February in Reverse: Time to Add to Short Positions

I'm having trouble finding shares to short of BAC and COF this morning...anyone else? My orders just aren't getting filled.

MM

Get ready for a "surprising rebound" in H2, Larry Kantor, head of research at Barclays Capital says. "Most of our clients have missed this rally."

Why are gold and silver rallying and treasuries holding strong if everything's gravy?

MM

BofA's Capital Needs: More Obfuscation by the Media

Karl, while I agree with your general sentiment your math is wrong. The dilution to an existing shareholder is about 35%.

Current market cap is $70B. New shares are $35B. New total market cap is $105B and original shareholders have $70B of that total, meaning they control about 2/3 of what they used to control.

MM