icandoitdon

Has President Obama's Mortgage Modification Plan Failed?

kind of a replay of bush in his second term, wouldn't you say?


On Aug 20 05:54 PM Loulun wrote:

> It seems Obama is failing at everything Bail out failure,Cash for
> clunkers failure, Loan modification failure, Healthcare reform Failure,
> Afganastan will be a failure and Iraq will become a diaster. Then
> the stupid 51% will vote for him again in November 2011

Schadenfreude: Finally, Countrywide's CEO Getting What He Deserves

correct me if i'm wrong, but mozillo is not up on criminal charges...he is charged civilly. the worst that can happen to him is he can lose his fortune.

as for why BAC bought CFC, how about ignorance? betting the farm by taking on two major acquisitions in the midst of a financial meltdown qualifies as ignorant, i believe.

Paulson Throws Bernanke Under the Bus, Backs Ken Lewis

ken lewis is the worst CEO of the banking industry, bar none. his muddle-headed, impetuous decision to buy merrill lynch in the midst of a financial meltdown still unfolding has to go down in the books as one of the worst decisions ever by a CEO.

i dont' think lewis's "threat" to back out of the deal was simply an 11th hour attempt attempt to extract further concessions from government. he knew his firm was "too big to fail" and that the government, at any time, would do whatever it took to back it.

it's likely that lewis simply got cold feet and felt that he had legal basis for invoking the MAC clause. apparently the only thing that stopped him was the government threat to remove him as CEO and to replace the board. funny....i thought only shareholders could do that.

lewis put his personal interests ahead of the firm. period. he didn't have the balls to tell paulson to stick his threats up his a**, which he should have done and could have done, making his own threat to back it up with his personal resignation and a public villifying of a federal reserve and treasury department run amok, if necessary. i think that might have cooled the jets of paulson and bernake and left them to sink in their own sh**.

lewis failed on multiple levels. nobody in the history of banking deserves termination more than he.

Earnings Preview: Bank of America

well, that makes me feel a whole lot better. the rules changes the entire industry was screaming for don't really matter.

what's wrong with this picture?

i worked for a fortune 50 company once that created revenue out of thing air, knowing, they would have to reverse it later, because they need a penny to meet estimates for the quarter and "by god, we're going to meet estimates." i objected in the strongest terms possible but my objections were overruled with the argument that the additional penny "was not material." i told the dumb ass that if it wasn't material he wouldn't be doing it. i left the company months later.


On Apr 18 01:42 PM Rohan C. Pease wrote:

> JP Morgan CEO Jamie Dimon said the changes in mark to market did
> not provide any difference, and were insignificant.

Bernanke Is Right: 'Transparency' Is Important

"The issue for an investor is what will those toxic assets be worth whenever the markets start to work properly again. That's the sixty-four-thousand dollar question, and it's hard to work that out without the full information (and even then it's a little complicated, but not impossible which is what Chairman Bernanke implies)."

i'm amused by the popular notion that mark to market is worthless when "markets aren't working." it's the cornerstone of the objection to mark to market accounting. it's also a red herring that is largely irrelevant to the issue. it's not dissimilar to an overleveraged consumer begging for "just a little more time" to work out his unmanageable debt load.

i'm sure that most are familiar with the adage "markets can stay irrational longer than investors can stay solvent." this maxim addresses the problem any prudent investor would have accepting the notion that, given time, most troubled assets will recover their value. says who, and when?

most institutions operate on razor thin capital bases that are wholly inadequate to support large amounts of troubled assets that must be held for long periods to recover their value. if they expect private investors to put up my cash to help them stay solvent they can expect to pay dearly for it. that's how it should be.

Time to Bury the Rotting Carcasses of Dead U.S. Banks

there you have it. a rational analysis that gets to the heart of the issue and the steps that must be taken to constructively solve it, notwithstanding the anger expressed by disgruntled "investors" who've made bad bets on zombie banks.

the federal reserve and treasury are bent on perpetuating a failed financial system built on excess leverage, underpriced risk, securitized lending, no effective federal regulation and opaque accounting rules that permit financial institutions to take huge off balance sheet risks. that model has failed and anyone who doesn't understand that doesn't understand economics, capital formation or investing.

Contemplating the Demise of Bank of America, Citi and JPMorgan

yes, the large banks are already nationalized by virtue of the "lifeline" that is the federal government. ironic, isn't it? the government lifeline being a death sentence for raising private capital. even if private capital were available, it would be so dilutive at current share prices it would be impracticable to seek it.

ken lewis made a deal with the devil when he agreed to follow through with the merill purchase with government help. he couldn't have made that decision based on merrill's deterioration alone. my guess is his own bank is rotting from within just like Citi and, merrill or not, he needed more government money.

another remarkable factoid: after the first capital injection from TARP, ken lewis claimed it wasn't needed, but accepted on government insistence. if the CEOs of these banks don't even understand their own exposure what hope does an individual investor have investing in them?

Would You Buy Bank of America Common?

insider purchases of BAC are irrelevant in this circumstance. it's like the coach (lewis) giving his losing football team a pep talk before the big game they're destined to lose yet again.

in any case, it's pocket change to a robber barron. if he bought 10 million shares i might pay attention.

Banks: The Final Countdown?

the federal insurance option makes sense to me. the amount of "toxic" assets is unknown. some is on the balance sheet, some is off. we can't even define with any precision a "toxic" asset.

federal insurance is the far simpler and least transparent way to handle the issue. we all know that transparency is not in the interests of either the institutions that own these toxic assets. neither is it in the interest of the federal government or federal reserve whose incompetence policys and wilfull ignorance led to their creation.

as to the effectiveness of such a policy, i.e. insuring everything, there is no certainty it will not cause as many problems as it solves. there will also be unintended consequences, e.g. dollar crashing, rampant inflation, surging interest rates, etc. it is not a riskless proposition and i don't see how this leads to an improved market environment in the short term. neither is solvency of the financial system the only issue. housing remains overpriced. consumers are still debt-ridden. credit is still restricted. unemployment is still rising. federal borrowing is through the roof. foreign economies are still declining.

to the extent we get through this crisis the healing process will be of long duration. i'd still be a seller of rallies.


On Jan 18 05:05 AM morph366 wrote:

> A new twist is developing in the way that the UK government is trying
> to orchestrate this final countdown as the original author posed
> it. Instead of "buying" those toxic assets and putting them into
> a bad bank there is now talk that the taxpayer will insure the banks
> against losses on them.
> Why would they not want to buy them and once for all stick them into
> a separate bank?
> Two reasons I suspect
> - nobody knows how to value them (other than suggesting that they
> are worthless)
> -insuring them as opposed to buying them enables governments to come
> up with the right weasel words that avoid them having to declare
> the real magnitude of the problem. If that number was to see the
> clear light of day it might prove even more shocking than Joe taxpayer
> could imagine.

Bank Investors Beware, Shareholder Interests Are Secondary

the federal government is ruining the banking system in their misguided attempts to rescue it. the feds themselves acknowlege that these banks need private capital. who is going to provide it given the utter disregard for shareholder interests as demonstrated by the federal government and the banks themselves during this financial meltdown?

as for the cause of all this capital destruction in the finacial system, i've always believed that it extends well beyond home mortgages and bad loans. every major bank has financial exposure to myriad deritive financial instruments, many of which reside in off balance sheet entities. the risk extends beyond the contracts themselves, which are often horrendously levered, to solvency of counterparties involved. if you are stuck with your losing bets and can't get your winners to pay off, that's a big problem. kind of like your house burning down and finding out the issuer of your insurance policy doesn't exist.

i don't think a solution exists to this crisis because the only means to solve it is large amounts of private capital. would you buy a public offering of any of these major banks? would you buy their debt securities without a federal guarantee? neither would i. matter of fact i wouldn't buy them with a federal guarantee.

BofA Following Citigroup to $5 or Lower

yes, BAC did it for the good of the country. i'm sure it's the shareholders ken lewis works for are pleased.


On Jan 16 09:53 AM User 338088 wrote:

> Just think about this.....If Bank of America did not purchase Country
> wide amd Merril, how many more people would be out of jobs, families
> with no health care insurance etc etc....2 major companies in distress
> that would cause even more economy black holes if teh Bak of America
> had not stepped in to save the. BOA is now asking for some assistance
> as a result of the pitifull shape those companies really were in!
> Go Bank of America!

BofA Following Citigroup to $5 or Lower

ken lewis typifies the mindset of the large commercial banking industry in this country. instead of focusing on running their business and doing it well they're preoccupied with becoming monoliths, with tenacles in every facet of financial services. they're on an ego trip and ken lewis exemplifies it.

like C before it, ken lewis salivated at the thought BAC could dominate the banking industry, minimizing the risks and maximizing perceived benefits. like sandy weil at C before him, the financial media hailed him as a visionary. merill lynch and countrywide were mortally wounded at the time ken lewis jumped in with both feet, with little due diligence, overpaying because he was afraid of someone beating him to the punch. it was one of the most ill timed and ill advised acquisition binges ever. now his once great bank is a basket case too.

imagine it. in december, before the close of the merrill lynch deal, ken lewis tells the treasury that they can't close it without government help. if he's a visionary i'm a prophet.

my comments are not johnny come lately. i made a similar post earlier this year when BAC stock was still worth more than a fast food lunch.

What Does Bank of America's Decline Mean for the Global Banking System?

you're exactly right.

BAC had to be utterly out of their minds to take on merrill lynch and countrywide when they did and under the terms they did. they were utterly amatuerish in their approach...like a novice investor buying too soon. these deals could well push them over the edge.

these stocks are great shorts to hedge a long portfolio. if they go south from these levels, expect the market to go south in a big way.

Bigger is Not Better in Banking

great piece.

as for breaking up the large mega banks, its clearly a superior alternative but it ain't gonna happen of course. the good ole boys are all members of the same club whether they're treasury secretaries, CEOs, federal reserve chairmen or members of congress.

when the dust settles on this fiasco a couple of years from now look for more affordable/subsidized housing programs....

It Could Happen - Cramer's Mad Money (9/26/08)

if wall street wants to crash monday morning because a bailout package isn't delivered, let it crash.

this financial system is toast...the question is whether we acknowledge it sooner or later. our economy has been sustained for years by too much leverage and too much cheap credit, enabled by an incompetent and political federal reserve, self-serving and spineless congressmen and a foolish administration that preached that "government is the problem, not the solution" right up until the walls to crumble. now they think government is the solution. funny how fast they become socialists when they stand to lose money (and elections).

the deleveraging that must occur will take years and this bailout package will not prevent it from happening...nor should it. recovery will be faster and more sure footed if the trash is swept out the door, including the regulatory trash....greenspan, bernake, paulson, bush, congress, et al....who invested in the "don't ask don't tell" school of economics that was ushered in starting with the reagan era. democrats are just as responsible for it as republicans.

a crash will be a humbling experience for this nation. it needs one.