madasiwannabe

What Happened to the Fed's $1.816 Trillion Lifeline?

The damage was already done to both of these guys months ago. The shorts were already bought into both WB and WM long before the ban. What finally brought them down was long selling due to lack of confidence and fear.

It wasn't a secret that both of these guys were bloated with loan portfolio's in the two hardest hit areas, Florida and California. Once WM fell, it was only a matter of time before WB followed.

Did the FDIC Sabotage WaMu's Management and Erode Investor Confidence?

WM had a $17 Billion run that was facilitated by the media. Couldn't believe the media was standing out front of a branch asking customers if they new the bank was about to go under.

JPM knew what WM was worth and took advantage of the situation to take anything of value for free. They knew there was a plan in the works that would give them the opportunity to offload the mortgages they told the FDIC they would have to write down. As soon as congress signs, JPM can move a big chunk of the 30 Billion from the loss column to the profit.

Shareholders in the mean time get wiped out and debt holders get nothing. The 30 Billion would have allowed most that lost to walk away with their dignity. This is criminal and even the most casual observer knows it.

Another Day Without Precedent

Hate to say I told you so, but the wheels went in motion when Paulson announced the backstop for Fannie and Freddie. All of the up movement was just irrational, wishfull thinking.

Next we will see a collapse of the dollar and 20% interest rates. A bailout will downgrade the US to junk status (if not on paper, in the worlds mind). No action will collapse banks and run the US debt through the roof, which will downgrade the US to junk status. Check Mate Hank and Ben.

On WaMu's Birthday, JPMorgan Takes the Cake

This is a shame. JPM gets another great deal and shareholders get screwed. This isn't a buyout, JPM gets 32 Billion in assets for free which makes it white collar theft. Sure they pick up 30 Billion dollars in what they say are bad debts and have to pay FDIC 2 Billion, but any bailout plan will take that off their hands. They are already talking about making profits.

Wonder when Hank Paulson is going to start getting paid for working for these guys? He's proven to be a real money maker.

Paulson/Bernanke: $700 Billion at 'Hold to Maturity' Pricing

Your not factoring in the quality of the mortgages the banks will be selling. Everyone knows they will do what they can to dump the trash and hang on to the performing loans.

Also not factoring in the Fannie, Freddie, FHA mortgage dump that's going to happen in conjuction with the buyouts. FHA has been refinanciing trash loans at a fevorish pace. New rules.... No minimum FICO, 3% down, OK if your behind on your current loan. All they are doing is cleaning up the banks books while kicking the forclosures down the road a few months.

Hank and Ben made it pretty clear, they want to pay near full face value for what they buy with no stipulations on the banks. There's no money to be made on this deal.

Stunning Reversals: Is This a Market or a Casino?

This is an " I told you so" day. The market realized the bailout was BS and nothing really changed (except GSE investors got scalped and the taxpayers got the bill). The banks still have $7 Trillion worth of toxic CDO's that are not covered by the GSE bailout, LEH & WM are still in denial, Uncle Sam has maxed out the credit cards and no one is buying treasuries, the rising dollar is killing exports (which was the only economy strength) and dismal financial quarterlies are still coming out this week.

Welcome back to reality.

Looming Wave of Option Repricing?

I'm surprised you didn't mention LEH. The company is 30% employee owned and the options have lost 80% of their value. They are looking at revaluing executive options because they have all lost most of their net worth. I think management should get paid for the job they have done, so if the stock drops to zero, that's exactly what their contribution is worth.

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.