jsc173's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/206313/comments http://seekingalpha.com/article/170526-property-values-set-to-fall-43-from-current-depressed-levels?source=feed#comment-746456 746456
That ratio has increased steadily over time, so to suggest there would be a mean reversion based on price alone is not borne out by this more predictive ratio.

If the income-to-value ratio long-term trend holds firm, we are at, near or below the long-term trendline (mean) depending upon which market you want to discuss. Specifically, markets like Miami, Phoenix and Las Vegas are below the line.

In English, the average house in those markets is priced at or below its investment value (you can actually buy, rent and get positive cash flow). ]]> Thu, 05 Nov 2009 11:54:01 -0500
That ratio has increased steadily over time, so to suggest there would be a mean reversion based on price alone is not borne out by this more predictive ratio.

If the income-to-value ratio long-term trend holds firm, we are at, near or below the long-term trendline (mean) depending upon which market you want to discuss. Specifically, markets like Miami, Phoenix and Las Vegas are below the line.

In English, the average house in those markets is priced at or below its investment value (you can actually buy, rent and get positive cash flow). ]]> http://seekingalpha.com/article/130665-treasury-directs-gm-to-get-ready-for-bankruptcy?source=feed#comment-461935 461935
"Old" GM and "old" UAW are dead. The only question is whether anyone other than a bankruptcy trustee has the fortitude to bury them. I tend to doubt it. The Obama adminstration can't and GM management won't, so it's the courts and Chapter 11 as the only rational player in this theater of the absurd. ]]> Mon, 13 Apr 2009 16:01:10 -0400
"Old" GM and "old" UAW are dead. The only question is whether anyone other than a bankruptcy trustee has the fortitude to bury them. I tend to doubt it. The Obama adminstration can't and GM management won't, so it's the courts and Chapter 11 as the only rational player in this theater of the absurd. ]]> http://seekingalpha.com/article/118377-could-a-markopolos-blog-have-stopped-madoff?source=feed#comment-376822 376822
If Markopolos would have blogged his concerns, one can only imagine what Madoff might have done. Possibly, nothing. Possibly, an unending rash of legal actions. Possibly, worse.

What I find most amazing is his story about approaching the Wall Street Journal and their unwillingness to pursue what would have been the biggest story they ever blew wide open.

I found that testimony very, very disturbing. I'm sure the WSJ, NYT and the rest get "stories" from hundreds of disgruntled employees, investors and other who want to seek revenge. They are best ignored.

For an independent analyst, as well-researched and well-respected as Markopolos was, to be blown off by the Journal is despicable and I've yet to see the Journal apologize to investors for not airing Markopolos' story.

Are you listening Mr. Murdoch, or do you put the blame the prior owners? ]]> Thu, 05 Feb 2009 10:17:34 -0500
If Markopolos would have blogged his concerns, one can only imagine what Madoff might have done. Possibly, nothing. Possibly, an unending rash of legal actions. Possibly, worse.

What I find most amazing is his story about approaching the Wall Street Journal and their unwillingness to pursue what would have been the biggest story they ever blew wide open.

I found that testimony very, very disturbing. I'm sure the WSJ, NYT and the rest get "stories" from hundreds of disgruntled employees, investors and other who want to seek revenge. They are best ignored.

For an independent analyst, as well-researched and well-respected as Markopolos was, to be blown off by the Journal is despicable and I've yet to see the Journal apologize to investors for not airing Markopolos' story.

Are you listening Mr. Murdoch, or do you put the blame the prior owners? ]]> http://seekingalpha.com/article/118744-economic-stimulus-package-let-them-eat-cake?source=feed#comment-376791 376791
If not, they are burnt toast in the midterm elections. ]]> Thu, 05 Feb 2009 10:03:38 -0500
If not, they are burnt toast in the midterm elections. ]]> http://seekingalpha.com/article/118215-citi-tarp-and-trust-banks-may-trust-each-other-more-but-consumers-lag-behind?source=feed#comment-374782 374782
Here's the bottom line for those of you who aren't bankers, here's a little Bank Finance 101:

1. TARP funds, so far, have been capital investments in banks and thrifts.

2. Banks DO NOT EVER lend out their capital. Capital exists to protect the bank from unexpected losses. It is never "spent", nor is it ever "lent."

3. Banks only lend money they have borrowed. That money comes from depositors, the FHLB and Fed borrowings and other short-term sources. Banks make money on the spread between what they pay for borrowing versus what they charge for lending, plus fees.

So, the lesson here is that most TARP investments replaced capital and reserves that had vaporized in the first couple of waves of write-downs. It was restorative, not additive.

Once that was accomplished, the banks were still able to survive, but are now only lending to the best credits. Why? Because that's all the regulators will let them do. The regulators are hypersensitive to the criticism they allowed this to happen so they are clamping down on lending much more than banks doing it voluntarily.

So, net-net, since banks can no longer lend to crappy customers (even if they wanted to) and the strongest borrowers are no longer interested in being highly leveraged, who in their right mind would expect banks to be lending more than they did last year? ]]> Tue, 03 Feb 2009 15:58:52 -0500
Here's the bottom line for those of you who aren't bankers, here's a little Bank Finance 101:

1. TARP funds, so far, have been capital investments in banks and thrifts.

2. Banks DO NOT EVER lend out their capital. Capital exists to protect the bank from unexpected losses. It is never "spent", nor is it ever "lent."

3. Banks only lend money they have borrowed. That money comes from depositors, the FHLB and Fed borrowings and other short-term sources. Banks make money on the spread between what they pay for borrowing versus what they charge for lending, plus fees.

So, the lesson here is that most TARP investments replaced capital and reserves that had vaporized in the first couple of waves of write-downs. It was restorative, not additive.

Once that was accomplished, the banks were still able to survive, but are now only lending to the best credits. Why? Because that's all the regulators will let them do. The regulators are hypersensitive to the criticism they allowed this to happen so they are clamping down on lending much more than banks doing it voluntarily.

So, net-net, since banks can no longer lend to crappy customers (even if they wanted to) and the strongest borrowers are no longer interested in being highly leveraged, who in their right mind would expect banks to be lending more than they did last year? ]]> http://seekingalpha.com/article/117924-rahms-doctrine-and-breaking-up-the-banks?source=feed#comment-373201 373201
Regardless of profitability, to have one corporation represent a potential systemic risk is a "bridge too far" for our economy.

Citi, B of A and maybe even Dimon's vaunted Chase are "too big to save" and the only rational thing to do is break them up to get away from the interdependence risk they represent.

In the old days, the Citicorp of John Reed was viewed as "hedged", meaning it was a collection of diverse businesses in many countries and the failure of one or two businesses would not "bring down the bank."

In Sandy Weill's Citigroup, post Glass-Steagel, too many businesses were interdependent so the failure of one is the failure of all.

It's time to fix it. ]]> Mon, 02 Feb 2009 09:41:33 -0500
Regardless of profitability, to have one corporation represent a potential systemic risk is a "bridge too far" for our economy.

Citi, B of A and maybe even Dimon's vaunted Chase are "too big to save" and the only rational thing to do is break them up to get away from the interdependence risk they represent.

In the old days, the Citicorp of John Reed was viewed as "hedged", meaning it was a collection of diverse businesses in many countries and the failure of one or two businesses would not "bring down the bank."

In Sandy Weill's Citigroup, post Glass-Steagel, too many businesses were interdependent so the failure of one is the failure of all.

It's time to fix it. ]]> http://seekingalpha.com/article/116196-against-bank-nationalization?source=feed#comment-364420 364420
Of course, a couple of them have now proved that, not only did they need it, they needed much more.

I still feel we will not see a true "bottom" unless one of the big banks still remaining is (given time to prove they can't survive) allowed to fail, their assets truly marked to market, viable businesses sold, toxic residue liquidated.

Until then, we will see the merry-go-round of coming back periodically for another dose of whatever the acronym is of the moment -- TARP, CPP, whatever.

The criminal part of it is many of the banks that have completely "fessed up" and marked their assets to market and are adequately (but not necessarily well) capitalized, are the ones still lending while the big banks aren't. The TARP money wasted on the big/bad banks would have ensured the "borderline" banks' survival, which is now in doubt. ]]> Fri, 23 Jan 2009 14:49:24 -0500
Of course, a couple of them have now proved that, not only did they need it, they needed much more.

I still feel we will not see a true "bottom" unless one of the big banks still remaining is (given time to prove they can't survive) allowed to fail, their assets truly marked to market, viable businesses sold, toxic residue liquidated.

Until then, we will see the merry-go-round of coming back periodically for another dose of whatever the acronym is of the moment -- TARP, CPP, whatever.

The criminal part of it is many of the banks that have completely "fessed up" and marked their assets to market and are adequately (but not necessarily well) capitalized, are the ones still lending while the big banks aren't. The TARP money wasted on the big/bad banks would have ensured the "borderline" banks' survival, which is now in doubt. ]]> http://seekingalpha.com/article/115713-banks-just-a-shadow-of-their-former-selves?source=feed#comment-362206 362206
If there was a permanent fix forced on them from the beginning (break up into managable businesses, bring all off balance sheet assets on, mark everything to market, etc., etc., maybe they wouldn't still be drowning?

Of course, the best solution of all would have been to let the market exact its punishment. Would a short death have been any worse than the slow death we're now experiencing?]]> Wed, 21 Jan 2009 15:05:21 -0500
If there was a permanent fix forced on them from the beginning (break up into managable businesses, bring all off balance sheet assets on, mark everything to market, etc., etc., maybe they wouldn't still be drowning?

Of course, the best solution of all would have been to let the market exact its punishment. Would a short death have been any worse than the slow death we're now experiencing?]]> http://seekingalpha.com/article/113464-how-are-banks-spending-bailout-money-anyone-s-guess?source=feed#comment-347401 347401
Do you know anything about banking? If you did, you would know that capital (which is what TARP investments are) is not "spent."

Capital is a cushion against future expected and unexpected losses. It isn't spent, it is held.

The spread earned from investing deposits and borrowed funds in loans and other types of investments is what is "spent" on day-to-day operations.

TARP investments, per se, would never be lent out or used to pay salaries or other expenses.

All the TARP investments have done, so far, is replace capital that was burned-off due to unexpected write-downs of non-performing loans and investments. ]]> Tue, 06 Jan 2009 10:41:14 -0500
Do you know anything about banking? If you did, you would know that capital (which is what TARP investments are) is not "spent."

Capital is a cushion against future expected and unexpected losses. It isn't spent, it is held.

The spread earned from investing deposits and borrowed funds in loans and other types of investments is what is "spent" on day-to-day operations.

TARP investments, per se, would never be lent out or used to pay salaries or other expenses.

All the TARP investments have done, so far, is replace capital that was burned-off due to unexpected write-downs of non-performing loans and investments. ]]> http://seekingalpha.com/article/112967-a-fed-about-face-on-gmac?source=feed#comment-344057 344057
Tens of billions have been doled out to large banks, in theory to stimulate granting credit, yet the iceberg hasn't thawed. Few of those banks (Chase excepted) did much in the way of supporting the auto industry. Why? Because the maufacturing arms always subsidized the financing arms. How many banks would make 0% loans? Or provide floor plan financing at low rates?

So why is Treasury creating an opportunity for GMAC to do more insane financing?

Better yet, since GMAC was amongst the more aggressive mortgage lenders, why are they being favored when a couple hundred savings and loans (who didn't do stupid mortgage lending) are still waiting for TARP money? ]]> Fri, 02 Jan 2009 08:48:31 -0500
Tens of billions have been doled out to large banks, in theory to stimulate granting credit, yet the iceberg hasn't thawed. Few of those banks (Chase excepted) did much in the way of supporting the auto industry. Why? Because the maufacturing arms always subsidized the financing arms. How many banks would make 0% loans? Or provide floor plan financing at low rates?

So why is Treasury creating an opportunity for GMAC to do more insane financing?

Better yet, since GMAC was amongst the more aggressive mortgage lenders, why are they being favored when a couple hundred savings and loans (who didn't do stupid mortgage lending) are still waiting for TARP money? ]]> http://seekingalpha.com/article/111752-don-t-be-scammed-by-madoff-investor-sob-stories?source=feed#comment-336076 336076
When greed meets greed, both usually wind up disappointed. ]]> Mon, 22 Dec 2008 16:38:14 -0500
When greed meets greed, both usually wind up disappointed. ]]> http://seekingalpha.com/article/109857-six-ways-to-cash-in-on-obama-s-infrastructure-plan?source=feed#comment-325350 325350
E.g., who's to say Caterpillar will get a dime -- why not Komatsu?]]> Wed, 10 Dec 2008 08:44:11 -0500
E.g., who's to say Caterpillar will get a dime -- why not Komatsu?]]> http://seekingalpha.com/article/102020-why-i-am-long-national-city?source=feed#comment-292751 292751
My suspicion is there's a lot none of us know about NCC and may not know, even though the optics (capital ratios, etc.) don't look horrific.

However, much in the same way Citi's aborted attempt to acquire Wachovia wound up being a JPM acquisition, if what you say is really true -- NCC is a giveaway at $2.23 -- then a "white night" will rescue them from PNC at something north of $2.23.

Right?]]> Tue, 28 Oct 2008 15:42:08 -0400
My suspicion is there's a lot none of us know about NCC and may not know, even though the optics (capital ratios, etc.) don't look horrific.

However, much in the same way Citi's aborted attempt to acquire Wachovia wound up being a JPM acquisition, if what you say is really true -- NCC is a giveaway at $2.23 -- then a "white night" will rescue them from PNC at something north of $2.23.

Right?]]> http://seekingalpha.com/article/96706-wall-street-r-i-p-now-what?source=feed#comment-261616 261616
Once the "big kids" on Wall Street started playing with other people's money -- e.g., when the firms converted from private partnerships with their own money at risk to public corporations, it was only a matter of time.

It wasn't pure greed that killed them.

It was simple arrogance.

Or, as a wise sage once told me during the peak of the bull market, "they're like fat guys riding their bicycles downhill thinking they're going fast because they're good athletes." ]]> Mon, 22 Sep 2008 12:44:22 -0400
Once the "big kids" on Wall Street started playing with other people's money -- e.g., when the firms converted from private partnerships with their own money at risk to public corporations, it was only a matter of time.

It wasn't pure greed that killed them.

It was simple arrogance.

Or, as a wise sage once told me during the peak of the bull market, "they're like fat guys riding their bicycles downhill thinking they're going fast because they're good athletes." ]]> http://seekingalpha.com/article/80432-the-outlook-for-financials-failure?source=feed#comment-180592 180592
What does that mean?

For me, it means it will be another 3-5 years for them to be able to get beyond the effects of their current problems and completely redefine themselves (which they must do to survive). ]]> Fri, 06 Jun 2008 16:34:38 -0400
What does that mean?

For me, it means it will be another 3-5 years for them to be able to get beyond the effects of their current problems and completely redefine themselves (which they must do to survive). ]]>