BerkeleyBob

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.

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.

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...

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.

Big Banks: The Consensus Is Cracking

Doesn't this come back to the ill-advised repeal of Glass Steagal? Did not AIG structure its activities to escape regulation as an insurance company. Does a naked short seller or purchaser of a CDO have an insurable interest in someone else's property?

Mastercard Leads Q3 Sentiment for Financial Services

Wouldn't V belong in this cohort?

Ending the Off-Balance Sheet Charade

The short response to questioner is that if an investor can not make a fully informed decision on a transparent balance sheet and financials, that investor is not as likely to buy. This applies in spades to GE, which is emphatically not a stock for "widows and orphans" and to AIG, which I characterize as a off shore, unregulated bookie that welches on its bets.

Why Bank Fees Need to Be Regulated

Credit unions are a good alternative to a big bank. Although I usually agree with Mr. Salmon and think he is a hell of a writer, I am puzzled why anyone with basic computer literacy would not use programs like Quicken and check their bank statements. I have found bank errors. Of course, my wife has no idea what the balance in her account is...

BAC: Where Are the Damn Cops?

The chart tells a story that smells like a mackerel in the moonlight. As a small investor, I have been out of and will stay out of the financial sector except for a small position in JPM and possibly adding a small position in Canadian banks.

Credit Cards: Do the Banks Own the Senate?

In response to the last post, consider the financial industry's successful resistance to bankruptcy reform which would allow "cram down" of home loans, widely used in business bankrupcy. Because they can, because no one is paying any attention.

Wall Street Breakfast: Must-Know News

I have been ranting about socialism for the rich, capitalism for the poor for a while now. Why should top rated insurers need TARP funding? Perhaps the relationship of state v. federal regulation for adequacy reserve, etc. needs re-examination. If they have taken a hit on their annuities or got involved on the wrong side of a CDS or other derivative transaction, what does that say about their fiduciary relationship to their policy holders (and in the case of a mutual, owners)? What does it say about their ability to manage risk? The huge loss in a substantial position in B of A is a resounding loss of no confidence--the financials benefitted from the easing of mark to market, but this sector is a long way from home free. It is possible, just very difficult, to make money in this market.

Cramer's Mad Money - We Lost a Good Man (5/8/09)

Maybe Friedman is a good man, maybe Geithner is a good man but both seem to lack any sensitivity to the smell test. There has been an era of self-dealing, bizarre and delusional self-justification (Greenberg and Mozilo) and rampant greed. There appears to be a social and political reaction to the past excesses. I do not subscribe to Victorian prudishness or unrealistic standards of probity by our financial elite, but the applicable standard is the appearance of impropriety. Both failed the test, Geithner got a pass he did not deserve, no matter how much the country "needs" him.

Ken Lewis: Whistleblower?

A good history lesson here.

Independent Analyst Numbers Far Uglier than Official Stress Test Rumors

Good post. We do know that Wells Fargo, one of the better houses in a bad neighborhood, is holding a lot of HELOC loans. If home values are declining, these are a disaster for homeowner and lender, but we don't know when the HELOC's start requiring repayment.

A Stress Test Shocker: BofA Needs $35 Billion

I must have missed the memo, but it's a little hard to see how much "transparency" there is if the criteria for the stress test are not public. Does look like all the major banks (except JPM?) took advantage of the softening of mark to market accounting standards to improve short term balance sheet, but that simply defers the large smelly problem of bad loans. Ken Lewis is as short-sighted and deluded as Mozilo, Greenberg and add your favorites in a long, dismal list.