Kinabalu

12 Notes on the Current Market Situation

"5) Investors are geting too excited about a recovery in residential housing. Such a recovery is not possible while 20%+ of all residential properties are under water."

So you're saying that a "recovery in residential housing" won't start untill housing has improved? I think a recovery usually starts at the bottom, wherever that may be.

Where's the Smartest Money Investing?

User 232593

"if i could get deals like buffett i would be buying."

Buffet bought GS at 115 (with warrants). It traded down to 74 on Friday 10/10/08. I was looking at it but couldn't pull the trigger.

WaMu Shows, Again, Smart Money Can Be Wrong

Insiderman

Your post was much better than the article so I will comment only on your post.

First - There were lots on interested parties for WM. JPM was way ahead because they had already done DD and made an offer to WM in the Spring. They just did a better job on this one than anyone else. You're probably right though about the FDIC killing any chance that WM had of selling before a seizure. I can just see them "negotiating" with JPM: "So...what do you guys need to do this deal?"

Second - The FDIC doesn't get the $. WM (the holding company) gets the $1.9 billion. I'm sure it will go a long way to pay off the $80 billion in debt and $20 billion in Common & Preferred stock they have outstanding (JPM does take some of the debt, - the covered bonds-, it's not clear yet how much).


Third - Buffet's deal is much more dependent on the bailout than JPMs. This is such a great deal for JPM that it's hard to believe, much better than the Bear Stearns deal.

Fourth - This is a really great point. They should have something in the bill to prevent contributions to any congressman from any individual, PAC or other affiliation with any company receiving bailout funds. This is probably a bigger moral hazard than the Executive Compensation issue.

Fifth - I think the original Paulson/Bernanke proposal was far better than anything we will end up with after Congress works it over. Conceptually, the original proposal was a bailout only to reestablish the credit markets, which have totally dried up, and that's the real problem Paulson/Bernanke were trying to address. Now it's being tied to companies and only the worst companies will choose to participate. That means it won't be very effective. Banks will have to sell loans at a price (market?) that is probably lower than what they have it on the books for (held to maturity value), so it will provide liquidity but no benefit to the capital ratios.

Wall Street Breakfast: Must-Know News

Axelrod & User:

I'm sorry what Lehman bailout are you referring to?