Bob228

The Stress Test's Biggest Loser: GMAC

One substantive intangible is that GMAC has some of the best and smartest finance people in Banking. Their CEO had once been the CFO for BofA - and widely regarded as the best in the land. Others followed him to GMAC, and he is always on the shortlist for replacement CEO for Banks like Wachovia and even BofA.

It doesn't change the challenge, but better a good jockey than a bad one.

Biotech Analyst Eats Dendreon's Provenge Crow

Mike Huckman plays himself in the movie and wins Oscar for best supporting Actor. Kiefer Southerland wins Best Actor Oscar for his portrayal of the U.S. Attorney who rides the rage of America and knocks down the walls of Wall Street, ending the days of the shorts.

Danny DeVito plays Cramer and looses ratings and his show - to a new show put on by a character played by Joe Peschi' - as well as a Co host - Erin from CNBC . 'Dendreon Rocks' Custom T-Shirts are seen at the last Dead Concert of the year, which is done at the Lincoln Memorial - invitation only.

Dendreon is bought by Berkshire Hathaway and Warren Buffet keeps staff and leaves them autonomous - but provides generous resources. He outbids four other Companies under an SEC imposed Court Supervised Bidding Structure. Vested shareholders get $575 per share plus 20 year Detachable Warrants in Berkshire plus a share of the Class Action Lawsuit against the 4/28/09 'Short Pirates".

In deference to Warren Buffet, Bill Gates segregates one third of his charitable Trust. It is set up to provide financial assistance to any patient in need of Dendreon's Immunotherapy products.

The final scene depicts an angry Alec Baldwin (Playing the leading Hedge Fund Managing Partner) as he is taken to Federal Prison. It fades into a scene in the White House where BO gives a thumbs up to Rom Emanuel - who secretly and forcefully oversaw the Dendreon sale and the prosecution of the 'Shorts'. Starting to exit the Oval Office, Rom looks at a boyhood picture of the President. With a Chicago Cemetery in the background, the young President is standing next to an even younger little friend. Rom turns and say's, "Anyone I know?". The President looks out the window and says "Michael Gold".

Dendreon: Bear Trap of the Year

I'm long in Dendreon, and have increased since it started to float down in price to the low $20s. I don't quite know what to make of the insider sales, however. Generally, the charge to the top executives is to maximize shareholder value. In this company, it seems like the success and control of the cancer therapies is the main driver.

I think with the volatility of the stock and the success of Provenge, the Company should sell itself to take the volatility out of the stock price and stabilize the future of their promising therapies. I can't blame them for cashing out some of their options, but they should consider the position of the long term backers of this still somewhat fragile Company..

Dendreon Investors Learn a Hard Lesson in Stop-Loss Orders

The SEC and other Agencies did nothing on the Bernie Maddoff matter and fell down on the expanded Subprime issue (involving the valuation and sale of the CDO's and SIV's, etc). The trading of the Dendreon stock doesn't pass the smell test and seems RICO like in nature. Business Law is based on commercially reasonable standards. The SEC's pronounced backing of "Plain English" and the continual talk of transparency by all parties, speak to the ilegatamacy of the obviously orchestrated stock manipulation.

Conspire means 'to breath with'. The common sentiment of the Country will propel legal action to remedy this matter. Those who are smugly claiming their right to bully, manipulate, and confiscate other peoples money are likely in for a just surprise. All it will take is continual outcries from those who are outraged. The policing Agencies cannot be silent or inactive in this. Their track record will not permit that.

At times the law is slow - and sometimes ineffective. In this case, it will come about and it will be harsh.

The Wells Fargo / Wachovia Story from 1994 to 2012

Wells may not have understood the depths of Wachovia's problems when they bought them. They got two things when they bought Wachovia:
(1) Little understood by most is that Wachovia had tremendous exposure to very risky asset classes. (2) A great footprint and physical presence. That's going to be the featured race in the shaping of the future of Wells.

In an effort to be the biggest and the best, in a very short time Wachovia became (a) the second largest commercial real estate lender in the U.S., (b) among the top originators and underwriters of CMBS, (c) One of the largest structured finance (real estate high risk on book ventures and loans) Banks in the U.S., (d) One of the largest real estate Syndication groups in the world (includes on book under-writings), (e) the number one CDO Book runner in the U.S., (f) one of the largest single family builder loan portfolios in the world with over 1300 customers, (g) one of the largest Subprime exposures through the overly California concentrated Alt A World Savings, (h) a Subprime auto lender through Western Financial.

Besides the totality of their risky asset class exposure, as a relatively new entrant they differentiated themselves with cheap pricing, over-advances relative to other lenders, land, and condominiums. Geographic exposure to Florida in condos and subprime in California, they led the drive for market share with their jaw.

Wells has the best run commercial real estate finance business in the country - run by a very experienced credit underwriting culture. Wachovia is less disciplined on credit and experience. The cultures will likely clash as the integration takes place (Wells mostly west and Wachovia mostly east - except World Savings).

The positive side is the national footprint, the deposit base, a very good consumer lending and service discipline developed by Kavacevich - and now expanded by Wachovia. The Trouble with BofA could significantly benefit Wells.

The success level will ultimately be the created value of the footprint as measured against the final cost of the risky asset classes - perhaps not totally understood by Wells when they bought Wachovia. Time and changing circumstances will determine how good or bad the combination. Likely, several tough - hang on for your life years will be the challenge. California and housing will be among the major obstacles or good surprises.

TARP Passes - Now What?

The plan will be revisited due to increased scrutiny and better focus. The goal will be restated as returning adequate capital and liquidity to the Financials. The economic costs will be paid by the Financials - not the taxpayer.

Paulson has neither the time or influence the change. Derived Investment Value (DIV) will be the asset pricing tool. That price, allocated loan losses, plus Preferred Stock/Senior Convertible Sub Debt (issued by seller/bought by Bailout) will equal original asset value/cost.

Warrants and monetized value in tax losses will act as kickers to the 'Bailout TARP'. Part of the Kicker Overage will be used by Congress to Fund a Homeowners Relief Fund Bill sponsored by Maxine Waters and Charles Schumer.

The Citi Exclusivity Agreement

Well - I know this sounds Polyanna like, but - a large part of how the larger financial meltdown occurred was the lying and fraud which accompanied the greed and avarice. So, what do we have here?

The Agreement seems clear to me - but I'm not an attorney. If it is how it appears to be, then Wachovia is violating its own ethical principals.

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

WaWho was let down by their own management group, which had sufficient time to structure a deal - but didn't. Given Bear, Lehman and others, all of the signs of the times were brightly lit - but they were ignored.

The FDIC did what they should have done. In the face of existing facts and reality, they brought in a strong substitute quickly, and avoided further runs and losses. However we got to this point might be inappropriate, but they needed to deal with today, not yesterday.

So, welcome WAWHO and farewell WAMU - RIP.