madasiwannabe

Don't Believe the Lies: Ride the Bank Stocks Bull

Your right jonsager, but what can we do? If the market turns bull, the banks recover and both the borrowers and the banks get absolution for their sins. If liquidity doesn't return, they will continue to raise rates to cover inceasing writedowns and the irresponsible borrowers still get absolution at our expense. Unfortunately, if the banks continue to contract, more responsible homeowners will start joining the growing ranks of the irresponsible. There's really no good way out and the lesser evil option is propping the financials up.

Greenspin's BS about socializing losses not being fair is crap. Losses always have been and always will be socialized, either directly through bailouts or indirectly through increased prices. The companies sure don't eat distribution costs increases if gas prices go up, and now that they are going back down, I'm not holding my breath wating for my share of the profits.

Don't Believe the Lies: Ride the Bank Stocks Bull

I think you used the worst examples. Some of the banks will be able to recover, but others with huge creative portfolio's will IMHO not make it. Don't look at the for sale sign, go ask what bank holds the note. WM has the largest percentage of sub-prime 2/28's, ARM's and interest only ARM's in the most distressed areas and WB is not far behind. Rolling delinquency requirements from 90 days to 1 year overdue only prolongs the inevitable.

Can't wait to see the look on BAC's face when they find out BAC wasn't on Mozilo's "Friend of Anthony" list. Countrywide was passing out loans like Jim Carrey on "Dumb and Dumber". BAC got the breifcase full of IOU's.

The downward pressure on the GSE's has caused a financial's wide liquidity crisis that (until the Greenspan/PIMCO led, CNBC facilitated beat down) didn't exist. Unlike banks, the only way for the GSE's to make money is to sell more mortgages. Contraction of the GSE's will do nothing but decrease critical liquidity and accelerate the meltdown.

We are on a razors edge and without some good news and bullish confidence in the financial market, we are going down the tubes. Based on what I've seen, the financial bulls are nothing more than sheep in bull's clothing so get your swimsuit on and enjoy the ride.