monday1929

FASB Changes Perpetuate Fair Value Lying

Your Deluded beliefs have been and will be highly profitable for me, but damaging to society. If you believe that Govts. are larger than the Market, you do not know History.


On Apr 03 10:23 AM Conan the Barbarian wrote:

> citez: Agreed, but let's carry it forward a tad.
>
> All of the World's Governments are now focused on "fixing" the problems
> and will do Whatever it takes to do so. If anyone actually believes
> that any kind of credit contraction will stand in the way of their
> concerted efforts, they have fully deluded themselves.
>
> The US no longer stands alone in this effort.

Accounting Rule Changes Creating False Rally in Financials

No, he trades reality, not theory. The inevitable suspension of MTM, probably done under a different name, WILL cause the Delusional to bid up the bank stocks, and WILL create another shorting opportunity. The denial of reality is over, my friend. The New Great Depression will toughen us all up, mentally and Physically. Think how few 1930's era oldtimers were taken in by this latest series of MANIAS- Real Estate and Internet. They learned the lessons the hard way, just as you youngsters will earn your stripes.
Interestingly, people in their teens and Twenties are way ahead of us Boomers in seeing how illusery was the "wealth" of the past 2 decades- it really was just DEBT, not "liquidity" that fueled the whole will-o-wisp.
But those at the Top sure will keep those bonuses!


On Mar 15 12:19 PM vreporter wrote:

> "Without doubt, since fully-informed investors form only a small
> proportion of the capital markets, the spin and hype surrounding
> the “inherent evils” of the mark-to-market rule and Level 3 measurements
> could well take bank shares significantly higher this week."
>
> You must be very smart to be that far ahead of the market! Are you
> a comedian?

Accounting Rule Changes Creating False Rally in Financials

Fine, suspend Reality for a bit longer. But the losses, still not revealed for National Security reasons, are in the multi-Trillions. TIME, this time, will not paper over the losses with an Inflationary tailwind, as in times past. This Short does not want to see our Country lose stature, but my warnings were mocked by the same people who now think eliminating MTM will solve this problem.
How about listening to some of the few people who correctly (yes, we were early in most cases)laid out the EXACT events now happening. The ones who are telling you that "restoring the system" to the unstable bubble, or propping up home prices, is NOT what we should be trying to do. Yes, we should be trying to reduce foreclosures and make sure our fellow Americans are not hungry. We should not bail-out Criminal Bankers, Politicians from Both parties and useless, corrupt "regulators".


On Mar 15 03:07 PM User 366653 wrote:

> Some of the comments here are missing the only point that matters:
>
>
> If a change to mark-to-market has a positive psychological impact
> on the market, it is a good idea. Period. We are way beyond the point
> where ideological differences matter. What we need now is to take
> steps to insure that our financial system survives this crisis, and
> that investors regain confidence. If we have to suspend some rules
> in order to do this - then let's do it. Let's face it - this isn't
> an exercise in theoretical finance - it's the REAL WORLD!
>
> I for one would rather see our economy recover, and listen to the
> critics complain about how we "kicked the can down the road", than
> to watch a complete collapse of our system, and listen to the purists
> tell us that we should be proud that we stayed true to our principals,
> and, By God, we should be able to recover within ten or twenty years.
>
>
> For all you opponents of kicking the can down the road, remember
> - what we're talking about with these "toxic assets" is not much
> different than maintaining a margin account with your broker. <br/>
>
> Suppose you have a $100,000 account, and you margin it out to purchase
> $200,000 worth of stock. Friday, you get a margin call from your
> broker, (who happens to be your brother in law) who tells you that
> you have a $3,000 shortfall. He tells you the money is due now, but,
> because you're married to his sister, he'll stall the margin department
> til monday. He just "kicked the can down the road". If, on Monday,
> the market is flat or lower, you have to cover the call, probably
> by selling some of your favorite stocks at a five year low. If the
> market goes up enough to cover the call, you're saved. If the market
> continues to improve, you have a chance to recover some or all of
> your losses. Your brother in law just kicked the can down the road
> and saved your @#$@.
>
> I submit that "kicking the can down the road", risking collapse of
> our economy at some future date, beats the hell out of destroying
> our economy today.

Accounting Rule Changes Creating False Rally in Financials

Having done very well shorting Bankrupt banks like Citi, I have no problem loading up on shares at $1.00-$1.50, under the assumption that America will cheer the delusional removal of Mark-Of-Market. Many Shorts have tried to warn the Deluded of the very problems now occuring, to no avail. We are opposed to naked and abusive shorting, the suspension of the up-tick rule and elimination of Glass-Steagal(which was done at the behest of OPTIMISTS who thought it was an outdated rule from those unsophisticated Depression era reformists).
There may be some justification for suspending MTM, but anyone who thinks THAT is the cause of the coming Depression should get a job with Mr. Forbes, the Treasury Dept. or as Robert Rubenron's house boy.


On Mar 15 04:07 AM jeandit75 wrote:

> Keep shorting XLF my friend, I'll buy your supply of sotcks. You
> have to understand that a temporary end to the M2M will stop the
> bleeding of banks. It means they can stop marking assets down and
> don't need capital injections anymore. It will stabilize the system
> for awhile. It will help them breathe and move to start doing business
> again. The real economy needs the banks to function well. Theses
> shares are currently climbing a wall of worry. What is interesting
> for me is people like you are still not believers. Once you start
> to understand the benefits of the change of those crazy accounting
> rules, people like me will have made a ton of money buying banks.
> Now, this does not mean that it is the end of the problems for banks.
> The credit outlook remains gloomy. But at least, banks will now have
> some flexibility to adjust to the environment instead of having to
> beg for capital from the government. For that simple reason, bank
> and insurance shares are due for a massive bear market rally.

Financial Stocks: Playing the Mark-to-Market Suspension

And the bonus is that TBT can also soar during an equity collapse.


On Feb 15 01:54 PM henarl wrote:

> A safer way to trade this situation is to go long TBT. Nowhere near
> the risk exposure of shorting financials and if MtoM is suspended,
> TBT will soar as treasuries are sold to go long financials.

Financial Stocks: Playing the Mark-to-Market Suspension

They have been calling market prices "fire-sale "prices for over one year now- awfully long fire, isn't it? Normally they get bailed out by time and inflation- NOT THIS TIME. Not yet, anyway.


On Feb 14 10:17 PM joe from chi wrote:

> I'm not an accountant or a CFA, so how does suspending M2M help the
> banks? They cannot suspend reality. Everyone knows that thier books
> are still full of garbage. I get the day trading angle, but I'd hold
> long for maybe 2 days and then go hard short.
>
> If the bubble went burst in Fall '07, and the underlining assests
> have not been marked down yet, why do we still have problems? What
> good will "playing pretend" do them?

Financial Stocks: Playing the Mark-to-Market Suspension

It is not a "subprime bust". It it the collapse of the largest credit bubble in history. The Delusions that allowed that bubble are live and well, judging by all the thumbs up you got. This is good for me, as I profit from the destruction of your delusions, but it would be better for the Country to face up to facts and rebuild a productive economy in which bankers are mere clerks and factory owners and workers are our heros.
Smart shorts should have moved on from the financials- I fully agree with the premise of this article. The Terroristic Bankers have damaged the Real economy, that is where the next big down leg will occur. Of COURSE mark-to-market will be suspended, that's why Bankers and Fixers like Robert Rubin buy politicians.


On Feb 14 01:56 PM Gtarras wrote:

> Expect to be trashed in the comments section by the folks who are
> glued to the financial entertainment gnomes... what are you talking
> about?! we all know that the financials are dead meat (they preach
> it to us on TV)...!!
>
> My view: FASB 157 is the single most important reason the financial
> system, and the economy is down the toilet. without it, we could
> have handled the subprime bust..

America's Banks: Are They Really Insolvent?

If the Market is wrong, smart PRIVATE money would be rushing in to buy the crap. Bankers must return to being mere low paid clerks- highly regulated and low paid. let the Banksters put their entire net worths at risk to prove these assests are worth more than ZERO.


On Feb 12 10:41 AM Jolly_Rancher wrote:

> I think there is some validity to this. The service that banks provide
> is very valuable. They provide investment dollars so that the economy
> can function. Most of what they provide is long term to maturity.
> Why should these investments no matter how stupid they were be shown
> on the books at market value as if the market is so accurate. The
> market is notoriously wrong in pricing assets much of the time. The
> problem now is not just marking to market. Additionally, the banks
> are caught in a spiral downward. They mark their assets down to market.
> The market panics and takes the assets down farther. The banks mark
> down further. The markets panic. And so forth. The government should
> in fact break the spiral and my guess is that it has to do this by
> throwing trillions at the problem.

America's Banks: Are They Really Insolvent?

I've learned that it is better to take money from those who deny reality than to try to convince the delusional of a truth they will not face. Thank you Harvard MBA's for a great year. Keep following those models.


On Feb 12 08:47 AM MICHAEL SHULMAN wrote:

> Insolvency, in banking does not mean a bank shuts down in a meaningful
> way -- the customers can get their money, the loans are still serviced
> and so on. Insolvency means the banks have less tangible equity than
> liabilities -- and this is truly the case for several very large
> banks. Geither would not look like a deer caught in the headlights
> if this were not true -- and check out page 21 of the Citgroup town
> hall meeting presentation last November where they use acronyms to
> describe more than $1.2 trillion in off balance sheet assets. What
> insolvency means is shareholders in selected banks, over time, will
> be wiped out and so will some unsecured bond holders. Any solution
> you come up with, including bone head ones like suspending market
> rules, and there is so much dilution and so little of the current
> equity left shareholders get killed. And that is exactly the way
> it is supposed to play out. When I said this on Fox Business a week
> or two before Freddie and Fannie disappeared Ben Stein made fun of
> me, saying this was somewhere between improbably and impossible.
> So.....

What 8 Bailout CEOs Need to Explain

Any possibility that a big Trap-door opens beneath these goons in the Senate hearing room and dumps them in Jail? We can shove most of the Senators in after them.

What 8 Bailout CEOs Need to Explain

Yes, free money does help one become a sucessful business person.


On Feb 10 09:07 AM Chooch wrote:

> Personally, I wouldn't bet against Ken Lewis. Yes he's from the south,
> yes he's helped lead BAC after being second in command to McColl
> for years. One losing quarter and oh btw, BAC did make $4B in 2008.
> It wasn't a losing year, it was a losing quarter. Yes I'm a homer
> for BAC, but quite frankly, I'd rather take the 'JunkYard Dog' Lewis
> than any of the other CEO's in this list. I wouldn't bet against
> him or his legacy. Just go back and look at all the things that were
> said BAC couldn't do. Couldn't integrate NationsBank with BankAmerica
> (California) in 1998, couldn't integrate FleetBoston, Couldn't do
> the LaSalle deal, Couldn't do Countrywide, couldn't, couldn't, couldn't....yet
> they did....and I'm betting (yes the farm) that if any financial
> institution still has a solid financial balance sheet (just look
> at the deposit growth in BAC in the last 12 months alone), I think
> they refer to this as 'Flight to Quality'....people want their money
> someplace safe.
> Say what you want, say I've been drinking the Kook-aid, doesn't matter
> to me....I'm thinking Lewis and his team at BAC will make this into
> a winning deal for them, their associates, their customers and their
> shareholders.

Save the Wall St. Bonuses for Real Talent

The bonuses fraudulently earned from the past ten years must be returned.
Thre may be a small number of people who actually should get bonuses this year, but that number can be counted on your fingers. Jim Willie postulates that the bonuses are "hush money". makes sense to me.
Part of TARP should go to bountys paid to those who reveal criminal activities at their banks.

Short Into the 'Bad Bank' Syndrome

Yes, the entire rest of the market which does not have politicians in their pocket. All the smaller companies in the Russell 2000 who will not be saved because they did not pay protection money. I did great shorting banks but why beat a dead horse or a Citi corpse?


On Jan 29 08:26 AM nyorker wrote:

> With the banks stock prices at historic lows, I can't figure out
> how you would gauge the risk/reward ratio of shorting further. <br/>
>
> Maybe I'm too conservative, but the possiblity of a 30% return verses
> UNLIMITED losses (if this GB/BB comes to fruition) seems like financial
> suicide.
>
> Surely there must be some sector out there that offers a "safer"
> risk/reward ratio ?

Bad Bank and Draft Bill Spook CDS Traders and Wall Street

The Government will contact you soon to arrange a mandatory Harvard MBA degree. You are a dangerous radical and must be stopped. Old fashioned indeed!


On Jan 29 08:02 AM prudentinvestor wrote:

> I suspect that it would benefit our economy in the long run if banks
> were to become a bit less modern, a bit more old-fashioned.
>
> Instead of trading CDS's, or manufacturing CDO's, etc, we just need
> old fashioned banks that lend or raise capital for companies that
> make useful things, so they can expand and make more, or build useful
> projects that can pay back their loans over time. These activities
> produce real value and employ people with real skills.
>
> This would make banking more stodgy, more stable, and less profitable,
> and needs a much smaller workforce in banking. But is a proven model.
> Many of the talented people in banking can apply their creative talents
> just as well, but in other productive areas.

Government Risk Rises: Credit Markets Face Structural Collapse

I have long stated that ANY fiduciary who invests other peoples' money in the Banks or other entities with undisclosed level three derivative exposure will be legally liable for negligence. My own and others exposure of the Trillions in hidden off-book losses will form the basis for such law-suits.
No fund should hold Citi, JPM or any other criminal bank. Their mis-deeds are now apparent to all.
Andrew Coumo MUST launch a RICIO prosecution of these banks if he is to maintain any credibility or hopes of political advancement.