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.

Citigroup and Berkshire Pricing Anomalies

I have been puzzled by the disparity in PLD common and PLD preferred F. I am long both (small positions) but the PLD preferred has almost doubled in a short time. PLD has taken several steps to deleverage and reduce debt, but the preferred makes me nervous...

New FASB Accounting Rule Change Is a Positive Move

A good start by the FASB after the mark to market cave-in. I suspect the latter will only juice up short term profits for banks, but a toxic asset remains smelly for a long time... I have only a small position long in JPM, wouldn't touch any of the other major 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.

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.

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.

Bail Out for Dummies - Part I

Excellent article and a clear summary of the extent of the disaster. Thought the post was better than far too many of the comments which followed. Let's not turn this forum into the Yahoo finance message boards.

Wall Street Breakfast: Must-Know News

I am not concerned too much by federal bailout funds used by AIG to unwind CDO's etc., the so-called "external" payments. The risk was drastically mis-calculated but leaving foreign central banks and institutional investors (pension funds, etc.) to take the loss would ruin our standing in the international marketplace. The financial crisis is global in scope, and we are all interdependant in ways we don't fully understand. The "internal" payments to the geniuses who created the mispriced trades (not insurance, not regulated) are another matter. Why wouldn't any taxpayer have standing to block the payments? It is our money. AIG executives are dancing on the rim of a volcano.