BerkeleyBob

TheStreet.com's Accounting Mess: What Would Jim Cramer Have to Say?

I agree that the performance of TSCM reflects poorly on Cramer's management. I think he is simply spread a little too thin. There have been chronic issues with its web site. I have read and benefited from reading his books, but increasingly find the television show too gimmicky and strident. (Guess what, so is Fox!) As to Sirius, I long ago sold and took a small loss on a small position. I have not been tempted to speculate in a penny stock which may be delisted and which is carrying a pretty heavy debt load. I am pleased that it is moving towards cleaning up its balance sheet and a very happy subscriber, but a great product does not make for a great investment. The volume of fanboys and shorts is way too loud.

The Unbearable Pain of 0.01%

And of course, the other side of the coin is that a derisory return would not be so hard to take, if the "official" numbers as to inflation/CPI were accurate. Most people recognize that prices are up, taxes are up, and wages are down. Not particularly healthy situation, even over the fairly short run.

Kicked Out of Finance and into Journalism

I agree that Henry Bodget makes good reading and his background certainly means he speaks with some authority and from experience. However, I can not and will not accept at face value what he has to say because of the very things that got him fired. The man has to make a living, and I suspect he is making a great deal less than when he was a master of the universe on Wall Street.

Energy Watch: Solve for California

The most recent data from the legislative analyst is that the projected budget deficit is just short of $21 billion, not $6 billion. I have some reservations about the high speed rail project, although the Governor has focused all available resources to this to the detriment of oh, say, retrofit of train engines for higher efficiency at a cost of $860,000 per train. The underfunding of infrastructure remains a big issue, thus the defects in the heavily traveled Bay Bridge. (Incidentally, all bridges have been paid for by tolls, but plans are announced to increase tolls by a significant percentage.) I honestly don't think the poster's prescription for a fix for California is practicable or desirable.

AIG Counterparties: The SIGTARP Report

Exactly why I previously described AIG as an unregulated off shore bookie that welched on its bets. We are in Alice's wonderland, where the Cheshire Cat redefines words so they have no meaning.

Capitalism Is for the Other Guy

More succinctly, I would describe our present system as a kleptocracy, a government of by and for thieves who enjoy socialism for themselves and very rugged capitalism for the rest of us. The present scheme of privatising profit and subsidising loss is not sustainable. The transfer of wealth to the rich and the impovrishment of the middle class continues...

Wall Street Breakfast: Must-Know News

AndrewBaker makes me feel warm all over towards the toiling selfless bankers. Let's make sure that Hammerin' Hank Greenberg gets back in the game to finish to good work and maybe we ought to let Mozillo have a free pass too.

Bear Verdict Should Please Wall Street

I thought this was a surprising jury acquittal, based on the news reports I read. It is quite similar to the scandal which led to Henry Blodgett's change in career. It is misrepresentation and probably actionable fraud to assure your clients that in your opinion an investment is "safe" and "profitable" if your private communications to your fellow thieves is to the contrary.

Wall Street Breakfast: Must-Know News

I am puzzled by the jury's acquittal of the two Bear Stearns fund managers. Looked like a prima facie case of misrepresentation, looked quite similar to what caused Henry Blodgett to change careers. As to AIG, it was not (just) a rogue division headquartered in London that imploded. Hank Greenberg, quite unrepentant, was forced to resign because he approved sham transactions with a reinsurer to prop up AIG's stated assets. I am sure many fine and ethical people worked for AIG but there was rot at the top of that organization, which was structured to evade to the maximum extent possible, any and all government regulation.

Proposed Amendment Could Neuter FASB

Fascinating. About all I can take from the FASB shape-shifting is that any financial is a lousy investment. You can't make rational decisions on fudged data.

Reinstituting Glass-Steagall: Not as Easy as It Sounds

Interesting historical review of bank regulation. Although I have favored the reinstatement of Glass-Steagall separation of commercial and investment banking, your comments on the long term utility of "trust busting" are on point. Perhaps we live in an increasingly interdependent world economy and perhaps nothing can be done to correct the excesses of our (not so) domestic bank giants. It is curious that almost all the FDIC takeovers have been of smaller banks, not directly involved in loan securitization or export of fraudulent paper...

Analyzing the U.S.'s Four Largest Banks

I agree that repassage of Glass Steagall would be a step in the right direction. Although I hold a small position in JPM ("best house on a bad block"), I remain uneasy about how its loan portfolio is valued and note that JPM appears to have made much of its net profit from trading, not lending. I long ago sold CitiGroup, and took a loss on GE because of "accounting irregularities". Although disaster may have been averted, the long term consequence of reduction of competition in the financial sector is not beneficial or in the public interest. It is mildly encouraging that the dormant Justice Department's Anti-trust division is showing signs of life...

Wall Street: Dumb as It Ever Was

Thanks for a small but healthy dose of realism. More is at stake here than trivial rounding errors being seized upon by "experts"; the unpleasant fact remains that basic economic measures are massaged and manipulated until they have little meaning. Do you believe the employment or cpi numbers promulgated by the government? The folks at Shadow Statistics sure don't. Nothing like some good roots reggae to get you through the hard days--how about "Times Tough" by Toots?

Airlines: Some Costs They Can't - And Shouldn't - Cut

Deregulation theoretically allowed the airlines to compete by lowering fares thus benefiting passengers. The problem is that some of the cost factors are variable (fuel), the air traffic control system has been underfunded (possibly a subsidy to the airlines but most assuredly a public good), and entry of non-legacy competition (Jet Blue, Virgin, SouthWest) limited by airport and runway constraints. Does deregulation work over the long haul? More people are flying at lower fares, but there are some real externalized public costs. Good article; we know that commuter airlines and feeder pilots are having it even worse than the majors.

Why Mortgages Aren’t Modified and What a Ruling Stopping Foreclosures Means

Really excellent article and analysis. Encouraging home ownership and establishing a secondary market for home loans are not per se mistaken policy, although the surviving Wall Street players and their apologists griped about unfair competition from Fannie and Freddie. "We" are on the hook because a)Greenspan warmly endorsed the ARM as a boon to the consumer and b) Greenspan held interest rates too low for too long. I don't see any movement towards a structural change in mortgage servicing or "federalizing" the home loan process, clearly no longer a purely local matter with local bank holding the paper and engaging in realistic appraisal and underwriting practices.