stonebluff

New Mark-to-Market Rules: Playing Pretend

When Volcker ran interest rates up to the sky to break the back of inflation in the early 80's, practically every bank in the country was broke on a mark to market basis. Does no one remember that? MTM needs to have some good sense applied to its use. The idealogues who insist that MTM must be rigidly applied need some leavening in their lump.

Citigroup: A Simple Analysis of a Terribly Complex Company

Beware of assuming that mark to market should be a mantra. When the Fed racked interest rates up to 20% in the early 80's, probably every commercial bank in the US was broke bcause of depreciation in its assets. A bank of which I was a director was under water because of depreciation in its impeccable loan portfolio alone.. The regulators and bankers very sensibly ignored the mess. They have to have that flexibility.

An analysis of book value that is made based on intangibles based on what every credit trainee is taught not to do.

Colonial Bank Failure Highlights the Problem

Hell hath no fury like a steamed blogster!

Why Stock Buybacks Are Not Always a Good Thing

Buybacks by financial companies at prices above real tangible book should be outlawed. NCC was in substanial part wrecked by buying back its shares at 38 when tangible book was less than half that. Buybacks make sense for shareholders only when assets underlying shares, e.g.,oil in the ground, are worth more than the stock price. The cleanest example of a good buyback is purchase of its own shares by a closed end fund whose shares are selliing at a discount to the known market value of its underlying assets. All others are at least suspect. National banks for many years could not buy their own shares without consent of the Comptroller of the Currency (I don't know the current state of the law) and many state incorporation statutes used to bar buybacks, for the reason that they carry all the stale fish odors mentioned above and may reek of outright corruption.












doubtless others

The Truth About Fossil Fuels and Renewable Energy

I fear that the true moral duty of the votaries of man caused global warming, wracked with guilt as they spew CO2 from one end and methane from the other, will be suicide or hopeless depression. I take comfort from the fact that men were farming and ranching on Greenland 1000 years ago. That calamity even the polar bears survived. However, as the cost of conventional fuels rises, we will conserve, and we should look for, and are developing, alternatives. stonebluff34

SEC Rewards GE Accounting Fraud

This is an odd sort of justice. Officers at GE sin, shareholders pay the penalty. SEC knows it's hard to convict the real culprits, but also knows that what GE's people have done is shady enough that SEC can shake them down. SEC in effect extorts shareholders' money from GE, and becomes complicit in a new sin. Nobody even admits there's anything wrong! Wow!

Why Are Banks Holding So Many Excess Reserves?

I spent years as bank counsel and a director of banks. I see nothing sinister in the increase in reserves, which are mostly deposits by member banks of the federal reserve system at the Fed. There is no "excess" of reserves; the reference is to reserves above the amounts required by Fed regulation.. The Fed does have the power to raise and lower reserve requirements; raising reserve requirements takes lendable funds out of the system, lowering them makes more funds available. I don't know what the current required reserve level is, but it's not high. The whole country wants the banks to lend that money when a decent credit shows up.Maintaining reserves above the reserve requirements reflects partly the fact that the Fed now pays interest on reserves, as several people have noted above, but mostly the fear in the hearts of bankers-fear that any new loans they might make will go bad, and fear of unseen and perhaps unseeable losses in all types of current credit. The poor devils are displaying
that prudence that many of them have not shown in recent times.

Are REITs and Utilities Good Dividend Investments?

To the author: some of your free cash flow/payment numbers have a dash or a minus sign in front of them, some don't.. Not being very smart, I had trouble figuring out what they say. I like the article and the conservative analysis of these income investments. But please clarify your free cash flow/ payment figures. Thanks

Best Investments for Rising Oil? High Dividend Energy Stocks

It's Natural Resource Partners, NOT Northern Resource Partners.

Where Have All the Buybacks Gone?

Has anyone tackled a study of the damage done by buybacks to American financial corporations? I cannot understand the rationale for buybacks except when the assets underlying the shares plainly exceed in value the price of the shares. Then, and only then, do the shrareholders as a group benefit. Buybacks otherwise benefit only EX shareholders, who sell into the buyback storm. With buybacks, management is making an investment decision with regard to my money; I would prefer to invest it myself. Give me cash dividends. I'll invest them where I choose. Buybacks carry even a mild odor of corruption, since managers with options are commonly large and regular vendors of their companies' shares, and buybacks tend to mask the dilution caused by prodigal use of options.,

Four Ways to Invest in Brazil's Growth

What's a practical way for individual investors to buy Brazilian fixed income?

Dividend-Paying Utilities for a Well-Rounded Portfolio

A few days ago big wigs exercized options at $40 plus per share and promptly disposed of them at the same price in non open market transactions. (Yahoo finance is my authority.) Who acquired those shares?

3M CEO: Wisdom of the Ages

Doesn't he mean "sowing" instead of "reaping"? Reaping and harvesting are the same thing.

Still Far from the Bottom

I suspect that demand for loans IS there, but that lenders, as they should have done long ago, have raised their standards.

Ten High Yield, Below Book Stocks

lincoln national has cut its dividend in half.