RichL

Wachovia Still Does Not Understand Pay Option ARM Risk

Making a mortgage loan in 2008 has rather less risk now than the same loan made in 2006. Todays mortgage paper, correctly underwritten at the new conservative standards, is gold. Borrowing checking account deposits at low interest rates, and investing in mortgages now, is likely to be very profitable. IF you think that they've sufficiently reserved for old loans, the banks are OK, but it is an open question.

Celsion Corporation: What Price Stock Research?

Celsion paid for advertising, not analysis. It is ridiculous to think that a paid-for relationship fosters independent research.

Trying (and Failing) To Understand Wachovia's A.G Edwards Acquisition

I carry no brief for breaking views, but the AGE deal isn’t as bad as you portray. The negative about WB is that they are serial acquirers. However, look at what they are acquiring. Westcorp was the best auto lender, Golden West the best thrift, and AG Edwards the best retail broker. You may disagree with the prices paid, but one must pay up for high quality in any market.

Does Mr. Brown believe that the staff that is integrating the GDW acquisition is the same personnel to fold in AGE. Yes, it’s the same buyer, but they are different businesses. I don’t see risk emanating from that aspect of the transaction. I lack the omniscience to foretell that this is the top of the market, so I defer to Mr. Brown’s expertise on what the future will bring.

The value here is that WB sells many structured products to retail. When you can sell hundreds of different products with high-implied volatility, the portfolio effect of this diversification creates a lower volatility portfolio, which can be hedged more inexpensively. This is likely quite profitable, and the added distribution can’t hurt. The two businesses together will likely be stronger. Brokerage has better growth prospects than branch banking. If there can be any cross-selling of product beyond the money-market funds, the deal might be better than you think.