Cora1's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/211619/comments http://seekingalpha.com/article/118114-plan-orange-killing-the-mortgage-crisis-quickly?source=feed#comment-374849 374849


On Feb 03 09:04 AM kelm wrote:

> Ultimately we have got to have bankruptcies, equity holders, debt
> holders etc. lose their money - that is what wipes the slate clean.
> This crisis will drag on far longer than it needs to if we don't
> recognize that. The government needs to do a controlled demolition
> for insolvent institutions. printing money to add to the federal
> debt is not a solution. What faith can anyone have in a currency
> when we simply print $5 trillion dollars to cover up our errors?]]> Tue, 03 Feb 2009 17:15:22 -0500


On Feb 03 09:04 AM kelm wrote:

> Ultimately we have got to have bankruptcies, equity holders, debt
> holders etc. lose their money - that is what wipes the slate clean.
> This crisis will drag on far longer than it needs to if we don't
> recognize that. The government needs to do a controlled demolition
> for insolvent institutions. printing money to add to the federal
> debt is not a solution. What faith can anyone have in a currency
> when we simply print $5 trillion dollars to cover up our errors?]]> http://seekingalpha.com/article/118114-plan-orange-killing-the-mortgage-crisis-quickly?source=feed#comment-374179 374179 Tue, 03 Feb 2009 07:40:03 -0500 http://seekingalpha.com/article/116346-company-death-watch-harley-davidson?source=feed#comment-367542 367542

On Jan 25 07:49 PM RADO wrote:

> I have to say, HOG management surprised me on Friday... I thought
> they were more rational. It's hard to understand why they continued
> to waste cash on share bay-backs and dividends and at the same time
> straggle to refinance debt. It just doesn't compute... buying shares
> at $39 using hard-borrowed, short-term loans - what was their investment
> thesis, I wonder? I hate it when managers start playing "Warren Buffet"
> instead of managing their operations. Avoiding dividend cut is another
> irrational decision...seems like "image" for management is more important
> than cash.
>
> On the other hand, I am less pessimistic for the long term. 80% of
> receivables are prime; 30-day delinquencies are 6.29% for 2008, about
> the same as in 2007 (6.15%). Defaults are 2.3%. If management is
> not hiding anything, this is much higher quality of receivables than
> market average. Also, ABSs have short maturities and a prepayment
> option; too bad management did not bother to disclose how much of
> the portfolio will convert into cash this way in 2009.
>
> I also see as positive development the replacement of the HDFS manager.
> The guy was simply unprofessional - any more or less experienced
> banker would know that financing 5-7 year loans with 180-days notes
> is insanity. I guess he had no clue about some basic banking concepts
> like portfolio duration and gap risk. Maybe the new CFO heard of
> them? We'll see soon.
>
> My judgment is - there will be no bankruptcy (company core economics
> is strong, and so it's long-term position), but unless the management
> gets realistic and rational ASAP, we'll see a lot of shareholder
> equity go down the toilet, along with the share price.]]> Tue, 27 Jan 2009 10:39:57 -0500

On Jan 25 07:49 PM RADO wrote:

> I have to say, HOG management surprised me on Friday... I thought
> they were more rational. It's hard to understand why they continued
> to waste cash on share bay-backs and dividends and at the same time
> straggle to refinance debt. It just doesn't compute... buying shares
> at $39 using hard-borrowed, short-term loans - what was their investment
> thesis, I wonder? I hate it when managers start playing "Warren Buffet"
> instead of managing their operations. Avoiding dividend cut is another
> irrational decision...seems like "image" for management is more important
> than cash.
>
> On the other hand, I am less pessimistic for the long term. 80% of
> receivables are prime; 30-day delinquencies are 6.29% for 2008, about
> the same as in 2007 (6.15%). Defaults are 2.3%. If management is
> not hiding anything, this is much higher quality of receivables than
> market average. Also, ABSs have short maturities and a prepayment
> option; too bad management did not bother to disclose how much of
> the portfolio will convert into cash this way in 2009.
>
> I also see as positive development the replacement of the HDFS manager.
> The guy was simply unprofessional - any more or less experienced
> banker would know that financing 5-7 year loans with 180-days notes
> is insanity. I guess he had no clue about some basic banking concepts
> like portfolio duration and gap risk. Maybe the new CFO heard of
> them? We'll see soon.
>
> My judgment is - there will be no bankruptcy (company core economics
> is strong, and so it's long-term position), but unless the management
> gets realistic and rational ASAP, we'll see a lot of shareholder
> equity go down the toilet, along with the share price.]]> http://seekingalpha.com/article/116346-company-death-watch-harley-davidson?source=feed#comment-366172 366172 Mon, 26 Jan 2009 02:57:10 -0500 http://seekingalpha.com/article/116224-harley-will-sputter-into-2009?source=feed#comment-365394 365394
Disclosure: bought at $10.3 on Friday]]> Sun, 25 Jan 2009 07:44:47 -0500
Disclosure: bought at $10.3 on Friday]]> http://seekingalpha.com/article/98481-bailout-bill-passes-what-happens-now?source=feed#comment-273347 273347
1) On money supply and inflation: assume subprime assets were bought against payment in treasuries: the money supply would not rise!
2) If under the package, banks lose risk assets for treasuries, they not only get rid of illiquid assets, but also get collateral for interbank lending. Leverage (in risk assets) and liquidity improve.
3) Furthermore, capitalisation of banks will improve due to price recovery in risky assets. Everyone is focusing on the USD700bn. However, if these 700bn in hypothetical demand create something like a psychological price floor for what is currently sold at fire sale prices, the package is suitable to trigger the market entry of private equity investors in larger scale. As prices of risk assets recover, so will the capitalisation of banks.
4) This package will hence improve bank balance sheets from the asset and the capital side, and provide liquidity / collateral to banks. Money markets are likely to calm.
5) As far a lending to main street is concerned, a lot is gained by securing the functioning of credit markets going forward. Nothing wrong with your analysis of the American desease and that more saving is required. We hopefully agree that the complete collapse of the banking system is not the preferred way to get there.
6) As concerns market to market and trust: Market to market is fine when prices reflect value. You are not however not honestly arguing that investors have higher trust into US banks for as long as there is need for two bailouts per week when accounting on market to market and fire sale prices? I guess we agree there is need to return to market to market when markets have calmed.
7) How short are some of you? And what is your attitude towards social responsibility?]]> Sat, 04 Oct 2008 09:47:20 -0400
1) On money supply and inflation: assume subprime assets were bought against payment in treasuries: the money supply would not rise!
2) If under the package, banks lose risk assets for treasuries, they not only get rid of illiquid assets, but also get collateral for interbank lending. Leverage (in risk assets) and liquidity improve.
3) Furthermore, capitalisation of banks will improve due to price recovery in risky assets. Everyone is focusing on the USD700bn. However, if these 700bn in hypothetical demand create something like a psychological price floor for what is currently sold at fire sale prices, the package is suitable to trigger the market entry of private equity investors in larger scale. As prices of risk assets recover, so will the capitalisation of banks.
4) This package will hence improve bank balance sheets from the asset and the capital side, and provide liquidity / collateral to banks. Money markets are likely to calm.
5) As far a lending to main street is concerned, a lot is gained by securing the functioning of credit markets going forward. Nothing wrong with your analysis of the American desease and that more saving is required. We hopefully agree that the complete collapse of the banking system is not the preferred way to get there.
6) As concerns market to market and trust: Market to market is fine when prices reflect value. You are not however not honestly arguing that investors have higher trust into US banks for as long as there is need for two bailouts per week when accounting on market to market and fire sale prices? I guess we agree there is need to return to market to market when markets have calmed.
7) How short are some of you? And what is your attitude towards social responsibility?]]> http://seekingalpha.com/article/84405-ubs-can-it-get-any-worse?source=feed#comment-202287 202287 Thu, 10 Jul 2008 12:05:25 -0400 http://seekingalpha.com/article/81576-ge-more-bad-news-to-come?source=feed#comment-186966 186966 Tue, 17 Jun 2008 08:56:10 -0400