GoBlue

Nationalize Citigroup and Bank of America

Communism is not the answer. Citi was bankrupt in 1990 to....then they went on to out earn Europe over the following 2 decades.....This is not a GM situation....Citi may not have been optimal, but they sure did earn money until this crisis..... Kick the can until they're profitable again, then they'll be able to raise all the common they need and pay off the govt. That's the only plan that doesn't lead to a depression. They will earn their way out of it if given the time. Now would be a good time to outlaw all short selling of systematiclly important finacial companies, now and forever.....make it an amendmet....Then get rid of the ratings agencies and find out who is paying these guys off.....Who killed LEH and WB? MOODYs! Time to strip them of their destructive power..... Citi has raised about 115 BILLION iver the course of this crisis, how much more money could a company need? BAC has also raised SERIOIUS capital....Frankly, the market still seems to be valuing all liablities at zero.....Not reality....

GM: More Bailout-Worthy than Citigroup

You've really lost your mind. Citi is healthy, was healthy, and you're assuming that all of the $300 billion (asset backed) is worth exactly zero. Even Lehman and Wamu debt is worth less more than that. I bet the taxpayer doesn't loose a nickel on citi when the economy picks up.

Oil: A Slippery Slope Ahead?

Failed to mention declining production almost everywhere in the world....Mexico's fields are a mess, the north sea is a mess, Russia is declining, and yes (gulp) even the Saudis must be in decline because they have been pumping these wells since the 40's. China's timulus package won't hurt either. This is not the tech bubble. New Oil is harder, and more expensive to find. Putting more mone into it hasn't helped nearly as much as is implied in this article.

Why is Bill Miller Increasing His Stake in Freddie Mac?

Why are people so quick to forget that FRE was a boring $50-$60 from about 1998 on with 2-3 dollars or more in annual earnings power. The long term earnings power will only be enhanced as they gain market share and smaller, more aggressive players go out of business (most already have). The GSE’s will end up being the only game in town for mortgages over the next decade until risk appetite returns to the market. Will there be dilution in the near term? You bet. But from a longer term perspective these stocks are going to be okay, assuming that housing begins a slow and grinding recovery in 09’ (my expectation). Margins on new business are through the roof, and the provisions for losses they have assumed seem very aggressive to me considering the vast majority of the portfolio is prime, and written before the recent bull market in housing. Who really cares if their house in under water by a few thousand? Most people have a budget, and bought the house they live in to actually live there. I think most of the write-down assumptions around the street are driven by observable prices on securities, and pay little credence to such important factors such as underlying cash flow that the securities generate, and recovery rates on foreclosures (Not to mention overly aggressive foreclosure and house price depreciation assumptions).

As to the speculation about the GSE’s being nationalized, I almost laugh at how crazy Wall Street is sometimes. Wall Street is full of vultures, but the government is not a predator. Who, other than short sellers, has the motivation to put these stocks into receivership? Who would that save? The idea is almost laughable, especially in an election year. Best to start a financial war with the Japanese, double the national debt, and have the whole world question our solvency when trying to get elected. Much better to keep the crap game going and hand these people huge margins on a platter (Complements of the fed) until they grow their way out of it.

Best not to analyze these things as regular stocks, because they are not. They are government entities, and regular rules don’t apply. They never have and they never will.