Xorthfred's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/209093/comments http://seekingalpha.com/article/124908-the-mark-to-market-bank-trade-this-week?source=feed#comment-419102 419102 Mon, 09 Mar 2009 10:47:11 -0400 http://seekingalpha.com/article/123799-how-will-this-depression-differ-from-previous-ones?source=feed#comment-411105 411105
Monetary easing began on Sept. 27, 2008. There was virtually no increase in the monetary based over the previous 12 months. I invite you all to do the math. The current deflation is partially the consequence of tight money from Sept. 2007 to Sept. 2008.

]]> Tue, 03 Mar 2009 10:59:40 -0500
Monetary easing began on Sept. 27, 2008. There was virtually no increase in the monetary based over the previous 12 months. I invite you all to do the math. The current deflation is partially the consequence of tight money from Sept. 2007 to Sept. 2008.

]]> http://seekingalpha.com/article/123314-suspending-mark-to-market-accounting-a-tale-of-two-cows?source=feed#comment-409953 409953 Mon, 02 Mar 2009 15:56:52 -0500 http://seekingalpha.com/article/97845-mark-to-market-accounting-kill-it-before-it-eats-us-alive?source=feed#comment-381323 381323 Mon, 09 Feb 2009 14:05:08 -0500 http://seekingalpha.com/article/111180-fed-creates-bank-margin-squeeze?source=feed#comment-332423 332423 Wed, 17 Dec 2008 16:15:41 -0500 http://seekingalpha.com/article/111200-our-clueless-congress-strikes-again?source=feed#comment-332263 332263
Read it again in disbelief but it is true if you understand bank accounting. The OCC auditors like to see Reserves (write offs) as a percentage of non-performing mortgages rise during downturns in commercial real estate. mark to market accounting forces banks to reclassify performing (paying on time) mortgages to non-performing. If a bank has reserves (write offs) only 20% of nonperformings and nonperformings are rising, then the auditors want to see that percentage rise.

Example: Bank has one billion $$ of nonperformings. They have reserves of $200 million. Under mark to market accounting, some $6 billion of commercial mortgages that are current with good debt service coverage now are selling for 80 cents on the dollar based on the cds and cmos (cdo) markets. The accountants force them to take a write off to market value of $1.2 billion. Now these loans are "non-performing". "Non-performings" (even though they are current and paying) now balloon to $7 billion. Reserves now are $1.4 billion. The accountants would like to see Reserves as a percentage of non-performings at 120%. Result: another write off of $7 billion.

This scenario played out at Citicorp in the 1989-1993 time period. ]]> Wed, 17 Dec 2008 13:46:06 -0500
Read it again in disbelief but it is true if you understand bank accounting. The OCC auditors like to see Reserves (write offs) as a percentage of non-performing mortgages rise during downturns in commercial real estate. mark to market accounting forces banks to reclassify performing (paying on time) mortgages to non-performing. If a bank has reserves (write offs) only 20% of nonperformings and nonperformings are rising, then the auditors want to see that percentage rise.

Example: Bank has one billion $$ of nonperformings. They have reserves of $200 million. Under mark to market accounting, some $6 billion of commercial mortgages that are current with good debt service coverage now are selling for 80 cents on the dollar based on the cds and cmos (cdo) markets. The accountants force them to take a write off to market value of $1.2 billion. Now these loans are "non-performing". "Non-performings" (even though they are current and paying) now balloon to $7 billion. Reserves now are $1.4 billion. The accountants would like to see Reserves as a percentage of non-performings at 120%. Result: another write off of $7 billion.

This scenario played out at Citicorp in the 1989-1993 time period. ]]> http://seekingalpha.com/article/92940-mexicos-guillermo-ortiz-the-anti-greenspan?source=feed#comment-269702 269702 Tue, 30 Sep 2008 13:04:52 -0400 http://seekingalpha.com/article/97808-why-this-bailout-can-t-work-and-what-will?source=feed#comment-268551 268551 Mon, 29 Sep 2008 12:34:09 -0400 http://seekingalpha.com/article/97762-feel-free-to-make-up-numbers?source=feed#comment-268535 268535 Mon, 29 Sep 2008 12:21:14 -0400 http://seekingalpha.com/article/88910-will-automakers-switch-to-natural-gas?source=feed#comment-224121 224121
While some of the above is financially feasible and makes sense (save for the expensive closing of the ng to electric plants). A financially better, although not green, solution involves: 1) building coal to diesel and coal to electric plants; 2) doing the Pickens ng municipal car fleets and rich subsidies for wind; 3) building heavy oil refineries; 4) allowing the oil shale reserves and offshore drilling currently roped off by Congress to be exploited; and 5) continue the subsidies for electric cars and hypbrids. If you want to win, make sure and give it the full effort, the real Vince Lombardi. Half measures have been tried before but failed. ]]> Wed, 06 Aug 2008 12:24:55 -0400
While some of the above is financially feasible and makes sense (save for the expensive closing of the ng to electric plants). A financially better, although not green, solution involves: 1) building coal to diesel and coal to electric plants; 2) doing the Pickens ng municipal car fleets and rich subsidies for wind; 3) building heavy oil refineries; 4) allowing the oil shale reserves and offshore drilling currently roped off by Congress to be exploited; and 5) continue the subsidies for electric cars and hypbrids. If you want to win, make sure and give it the full effort, the real Vince Lombardi. Half measures have been tried before but failed. ]]> http://seekingalpha.com/article/83717-does-big-oil-s-apathy-justify-proposals-to-tax-windfall-profits?source=feed#comment-198143 198143
Secondly, the oil companies face an extraordinary situation at home and abroad whereby all of the leases and contracts are subject to unilateral cancellation and renegotiation. No Government in the world can be counted on to be true to their word or their contracts. Unilateral nationalization without compensation is becoming the rule. Blasting companies for being cautious in this environment shows an alarming lack of objectivity. Even Obama is proposing canceling oil leases currently in effect. No democrat is willing to admit to the amazing technological innovations in the oil business, nearly all of them the result of American corporate efforts (horizontal drilling, offshore technology, more efficient refineries, etc.).

Third, a trillion dollar mass transit or Manhattan project for alternative energy funded by taxing oil companies by necessity involves taking money from poor states with low per capita incomes (Louisiana, Texas, Oklahoma) and giving it to the politically powerful high income states and DC: New York, Pennsylvania, DC, Massachusetts, Connecticutt, Rhode Island, and California).

In fact, no state in the country recieves less per capita than Texas, which ranks 39th in per capita income. New York and California are the richest states in terms of per capita income in the country.

Also a point in fact: Exxon wrote off over a billion dollars in alternative energy projects in the 1980s. Shareholders are very happy that they have not been pressured to jump into the ethanol financial fiasco, whereby the companies are losing money; the taxpayers are being taken to the cleaners; and the consumers are forced to pay more for gasoline than otherwise.

Oil companies are acting very rationally given the likelihood of special taxes just for them and much more subsidies for their competitors. But anyone who has studies history knows that virtually every one of the govt. initiatives will fail. Examples of similar failures include the current ethanol fiasco; synfuels subsidies programs during the 1980s; the Japanese Fifth Generation Project; and the Microelectronics and Computer Technology Corporation (MCC) consortium under Admiral Inman.

Just as Apple Computer, and later Dell, revolutionized computers, some entrepreneurs will come up with the innovations to transcend the piston engine and the use of home heating oil. I actually anticipate that the government will be in the way trying to stop the innovators throughout the entire process with lawsuits, regulations, securities enforcement actions and special taxes.]]> Thu, 03 Jul 2008 14:21:30 -0400
Secondly, the oil companies face an extraordinary situation at home and abroad whereby all of the leases and contracts are subject to unilateral cancellation and renegotiation. No Government in the world can be counted on to be true to their word or their contracts. Unilateral nationalization without compensation is becoming the rule. Blasting companies for being cautious in this environment shows an alarming lack of objectivity. Even Obama is proposing canceling oil leases currently in effect. No democrat is willing to admit to the amazing technological innovations in the oil business, nearly all of them the result of American corporate efforts (horizontal drilling, offshore technology, more efficient refineries, etc.).

Third, a trillion dollar mass transit or Manhattan project for alternative energy funded by taxing oil companies by necessity involves taking money from poor states with low per capita incomes (Louisiana, Texas, Oklahoma) and giving it to the politically powerful high income states and DC: New York, Pennsylvania, DC, Massachusetts, Connecticutt, Rhode Island, and California).

In fact, no state in the country recieves less per capita than Texas, which ranks 39th in per capita income. New York and California are the richest states in terms of per capita income in the country.

Also a point in fact: Exxon wrote off over a billion dollars in alternative energy projects in the 1980s. Shareholders are very happy that they have not been pressured to jump into the ethanol financial fiasco, whereby the companies are losing money; the taxpayers are being taken to the cleaners; and the consumers are forced to pay more for gasoline than otherwise.

Oil companies are acting very rationally given the likelihood of special taxes just for them and much more subsidies for their competitors. But anyone who has studies history knows that virtually every one of the govt. initiatives will fail. Examples of similar failures include the current ethanol fiasco; synfuels subsidies programs during the 1980s; the Japanese Fifth Generation Project; and the Microelectronics and Computer Technology Corporation (MCC) consortium under Admiral Inman.

Just as Apple Computer, and later Dell, revolutionized computers, some entrepreneurs will come up with the innovations to transcend the piston engine and the use of home heating oil. I actually anticipate that the government will be in the way trying to stop the innovators throughout the entire process with lawsuits, regulations, securities enforcement actions and special taxes.]]> http://seekingalpha.com/article/82185-an-alternative-to-americas-gasoline-crisis?source=feed#comment-191009 191009 Mon, 23 Jun 2008 12:47:16 -0400 http://seekingalpha.com/article/81094-long-term-ugliness?source=feed#comment-184110 184110 Thu, 12 Jun 2008 10:07:58 -0400