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Exclusive: Big Banks' Recent Profitability Due to AIG Scam?

I don't really understand how anyone could think the banks could turn a legal profit virtually days after being on the brink of failure. Nor do I understand how anyone would think these yahoos that have been digging themselves deeper and deeper into a hole could pull of a miracle without breaking some law in the process. This article does not really surprise me all that much and I don't think it is any more fraudulent then the bankers coming to DC hat in hand perfectly timed of course right before an election. They played congress perfectly and have milked it ever since. They played the current adminstration as well with the bravado turn around game for 2 months and they are b slapping obama and Turbo tim as they sit on their hands and refuse to clear their assets. How about handing K lewis his walking papers?
I very much appreciated this article however, and it certainly has confirmed my suspicion that we are going to be in deep ___ as long as the bankers are wagging the dog.

Is it possible a GM (GM) bankruptcy - contrary to popular belief - would actually boost sales?

It is possible but I just don't think it is probably. I think it might make things worse with the current state of the economy. It seems like people are being much more careful with their purchases. Even if warranties would not be an issue, most people will be concerned even if it just causes the closing of the dealership closest to home. First it would be is the warranty valid, then if there is one dealer in town and they get squeezed by bankruptcy, repair options would be in the next town. There a lot of one dealer or one per company dealer towns that will have trouble selling under a bankruptcy for GM.

The Financial Crisis Is Escalating Out of Control

The government has done nothing to steer us out of ruin as far as I can tell. The truth may be that they have done just the opposite. We have huge losses that the banks refuse to take and we have the government trying encouraging overpayment for these assets. There is no that they hand of government can guide this ship by punching holes in the bow to let the water out that is coming in the others holes in the stern. We are encouraging the banks to hold out rather than clear the market. We have just tried to fast foreword to the resolution without taking the necessary steps to prime the pump. We have had a rally but banks are already tempering their comments about their Fantastic start to the year. I want things to be better as much as anyone but I think we might have just started steering toward another iceberg.

On Mar 28 08:33 PM punditobserver wrote:

> Fred Voetsch, thanks for your reply regardless of our differences.
>
>
> I exited the market early on in 06 and watched it go through a blow
> off top. In February 07 before the Bear Stearns funds imploded, I
> opened up enough FDIC insured accounts to distrubute funds out to
> insure each account was under max coverage limits.
>
> I previously concluded in 05 that home prices were being unsustainably
> bid up by an influx of inexperienced and naive buyers, so I put off
> a home purchase - to this day I am still on the sidelines.
>
> So I did see it coming fairly early on.
>
> Now, your comments. I dont get your comment "Libor is still looking
> very bad" when the LIBOR rates that are most important are as low
> or lower than they have been since '03.
>
> All asset markets move on stories that can best be phrased in simple
> single sentences:
>
> "Oil Production will soon slow down and then run out" was the story
> that got people buying oil at $147 thinking it was going to $200.
>
>
> "They arent making any new land and if you dont buy now you will
> be locked out of the housing market" was the story that got people
> paying double the sane price for real estate.
>
> "The banks are insolvent", then after TARP, "The banks will be nationalized",
> then after the administration nixed that "The banks are stealing
> your money so you need to write your congressman to punish and disamantle
> them" is the set of stories that have people thinking they will soon
> be rich by shorting BAC at 2.53.
>
> These stories run their course and many who buy the story early do
> very well. But in order for the early people and planners of these
> stories to REALLY DO WELL, they need to energize armies of foot soldiers
> who will buy oil at $147, or the DOW at 14k or houses at twice the
> price, or short positions in banks after TARP, TALF, and all the
> other programs the results of which will soon about to be evident
> as the credit markets recover.
>
> Notice the author is responding to other comments but still has no
> answer as to why he is silent about the wave of mortgage fraud and
> personal irresponsibility that have so damaged the financial markets
> that even well run, conservative institutions that had no subprime
> operations are now perceived to be affected?
>
> It is because he is the merchant of the "short the bad banks" story,
> and he is leading a lot of suckers into making bad trades and into
> writing stupid letters to congressmen who will pay the lip service
> while ignoring their ridiculous rants.
>
> Other than shorts, the only other people I see here are the fringe
> "we are living in tyranny when a government takes steps to steer
> us out of economic ruin" crowd and the typical malcontents that revel
> when they think apocalypse is near so everyone will be as miserable
> as they are.
>
> Sorry, I have to call it as I see it. Articles like these and the
> comment streams that follow the are mostly irrational, basically
> uninformed, and utterly irresponsible at their core.

The Financial Crisis Is Escalating Out of Control

I think we have just had a little breather and now that people are ready to jump in, the big money will cut them off at the knees by shorting as the market realizes we are are in the same spot regarding toxic assets as we were last year except for more unemployed and toxic assets worth about 15% less now. Oh yeh and banks still thinking they will come back up to par.....

On Mar 27 11:15 AM John Thomas wrote:

> It's not a slam dunk. Now that traders are partying again on Wall
> Street, we have to ask, what will take the punch bowl away? The unemployment
> rate shooting over 10%, which could happen in April or May, would
> be my first pick. Losses on option ARM loans could accelerate, taking
> out a few dozen more regional banks, WAMU style. Another, until now
> apparently healthy corner of the financial market taking huge undisclosed
> positions in securities we’ve never heard of, could suddenly blow
> up. A giant hedge fund could close at any time, freezing existing
> investors in place, and dumping gigantic positions on the market.
> Defaults on some big, high profile commercial real estate projects
> could also pull the rug out from under the market. Given the magnitude
> of the move up over the past two weeks, we might even see a short
> seller bite the dust. And of course, if any of the administration’s
> $3 trillion in bailouts/ reliquifying/stimulus hit a wall that would
> trigger a sell signal. Party on ebullient traders, but do so close
> to the exit.

Cramer's Stop Trading! This Is One of the Greatest Rallies in History (3/27/09)

Cramer just keeps making bad calls and saying stupid things......if he is on air long enough he will eventually be able to be right.


On Mar 28 11:25 PM Market ace wrote:

> Cramer has already been proven to be an idiot and a giant loser.
> Go ahead a play along suckers!

Cramer's Stop Trading! This Is One of the Greatest Rallies in History (3/27/09)

thank you!!!


On Mar 28 11:25 PM Market ace wrote:

> Cramer has already been proven to be an idiot and a giant loser.
> Go ahead a play along suckers!

Big Banks: Pulling Off the Ultimate Bait and Switch

Yeh good point but I think we could line the streets of New York with all the causalities from the past 2 years that have relied their tried and true methods that worked in all previous recessions. This is a different little animal. There is some residual pain yet. If we can't clear the assets it will still clog the system I would think......and how to we reconcile the fact that banks may add more toxic debt that still may be decreasing in value. Returning to face value on some assets will take 150% upswing. I have no idea if the market has bottomed or if we are on the cusp of a new bull run but I am having a hard time seeing how we even get the housing inventory to levels that would truly support appreciation any time soon. I hope we are out of this and have seen the worst but some things are not adding up for me


On Mar 28 11:54 PM E Nuff Sed wrote:

> My suspicion is the author is holding a short position or more likely
> just gotten burned out of one. The plan makes sense to most people
> otherwise the market would not have turned as it has. 5 years from
> now the taxpayer would have recovered most of the investment.
>
> In the 3 weeks (back to back) we have gone up 20%. If you study the
> last 3 bear markets, this has been the mark of a final bottom. While
> we may retest the March lows my strong feeling is we will not break
> through.

Big Banks: Pulling Off the Ultimate Bait and Switch

if you think it is responsible for the CEO to send memos that apparently have little regard for factual information then of course by all means buy buy buy


On Mar 28 09:27 PM User 376666 wrote:

> any comments on Citi...buy, sell, or hold?

Big Banks: Pulling Off the Ultimate Bait and Switch

Yes I heard the same comments about march being so tough.......Little bit of CYOA after the cheerleading talk saying that the banks were kicking butt and making money again. I could almost see V Pandit spitting on government funds while he wrote that memo. Nice rally though. Thank you Vic, Ken and JD. Oh yeh now can I hear the speach about how the market is wrong about the bank stocks and that mark to market is the cause of all bank problems.

Are the Big Banks Gaming the Taxpayer?

Yeh I get the fact that this is good for the banks and that it might save them and that it is capitalism etc etc....I say buy all the toxic garbage you want but just not after you cam crawling to the government for a bailout. Can not imagine why mainstreet USA might have some doubts about the integrity of the banks, bankers, the financial system and even the federal governement.

Are the Big Banks Gaming the Taxpayer?

and a nice arbitrage it is when you can use tarp money to buy the assets while having the governement match you dollar for dollar. Am I understanding this correctly? The banks are buying more toxic assets, the very assets that have crushed our economy, and adding them to their balance sheet? They are getting matching funds so at a minimum banks are using 50% government money and paying more than market price for these assets? Please someone tell me this is not true. If it is true I think we need to be screaming a little bit louder and a little bit longer at our administration. It makes perfect sense for the banks because they have been given a free pass by the treasury by saying he won't allow banks to fail. The banks have unlimited capital now to over pay for assets and try and re-price all of the toxic assets they already own. I hope someone can tell me this is not true and that it is absurd and that the government would never let it happen but this is not the first story I have read on the matter. This will be the biggest fleecing of the American tax payer ever. Unless of course everyone thinks we should let the banks use federal dollars to by more of what everyone has been saying is clogging the system so they can raise prices and take fewer write downs. We could stuck in this mess forever if the to big to fail banks are loading up on garbage. I need some feed back on this one people.


On Mar 27 02:58 PM notblind wrote:

> It should be obvious to any m*ron that the PPIP offers banks an arbitrage
> opportunity to neutralize the writedowns that the problem may require.
>
>
> If I am a bank that will sell 10 billion of MBS to the PPIP that
> I have on my books for 70 cents on the dollar and I ftech 50 cents
> on the dollar, I have to write down the 20 cent difference.
>
> To alleviate this write down, I have an opportunity to buy artificially
> marked down MBS for 30 cents on the dollar and keep it on my books.
> As the PPIP makes a market for MBS off the artificial bottom, my
> 30 cent cost basis MBS bought before the program started will now
> be marked up to the market rate of 50 cents, counterbalancing my
> write down of the assests that I bought.
>
> Anyone who says this is somehow wrong is stupid and belongs in Cuba
> or Russia, not the USA.

Krugman, Don't Throw the Baby Out with the Bathwater Just Yet

How can you argue that Krugman is against any market based solution? The government has not allowed a market based solution and this new plan is a complete government based solution. Krugman is not against a market solution. He is saying that this is a government solution where governement is trying to disguise the solution as free market. There is nothing free market about the plan and there is nothing free market about a plan of any kind that government guarantees losses or puts a floor on pricing.

Jim Cramer's 10 Predictions for 2008

You forgot 2008 was year of natural gas. doh............I am starting to think Cramer doesn't mind making so many wrong calls because he seems to just feed off of attention, good or bad. Self absorbed or narcissist might be what you call it. He was saying sell everything in the morning then afternoon was saying load up on chocolate bars with almonds. He needs to go back to his winning ways......buy everything in a bull market and then call yourself a brilliant mind. Clearly the guru that was suppposed to guide "cramericans" through the darkness forgot to fill his torch. It is getting harder and harder to even turn on Cnbc. They have so many "experts" yacking and sounding like puppets that are expert at calling things after the fact. Gee that sounds like reporting.....maybe if they would report and then shut up instead of predicting it would be more interesting but likely less entertaining for the masses.

When Life Hands You Lehman - Cramer's Stop Trading! (6/18/08)

tbis......wake up ....single most resourceful guy out there for individual traders??????????lay off the Kool-aid dude......He hasn't been right on anything for about 14 months.......has no clue in bear market......if you have capital left go back to him about 6 months in to bull market......oh yeh...remember he called the bottom july 15 2008....oops he must have had gone for drinks with the other Tom Brown, who said don't be late and miss the financial rally ....ooops......wait for their excuses.....they will be classic just like cramers bears stearns tongue twister

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

You are an analyst and have developed some trading bs.......and you site Tom Brown as voice of reason???????????........ don't mind any opinions but can't you guys just say it is your opinion and you really don't know crap most of the time. Riding that Wamu in sept too.......Wb might have some issues from world savings take over ..........don't know what percentage but World was big on option arms and interest only loans before wb came in....