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

"But there is not some multi-million person homeless problem going on, at least to the extent there wasn't one before. Homelessness is not a lack of housing problem. And we have plenty of housing."

I think the administration should show compassion and give all defaulted homeowners a tent and allow them to live on their ex-property, but not go inside the house.

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

IsThisRight has it right. There is nothing sinister going on here, unless you are fed up generally by Wall Street traders and execs of all corporations stealing the country blind. Look what so called 'free' capitalism has created: A super rich elite class, the building of thousands of Palaces (called homes) which are empty and nobody can afford (you should see the communities Bobby Ginn developed in Florida that are now a big bust), while hard working millions are out of work and homeless. Free markets are a myth and always have been.

Let's give Obama a chance. It's the only time in my lifetime of over 60 years that I've seen an exceptionally intelligent man in the White House. He can't just hand out money to the poor. If he did that, everybody would be lined up at Burger King for lunch but nobody would be there to flip the burgers.

The banks have to be given the green light to lend money to creditworthy borrowers. Just giving them money didn't seem to do the trick. I guess if you gave them enough it would. But you need to make them feel secure enough to part with what they have. Remember, they are expected to leverage themselves 10 to 1, but if accounting rules put them under water, they lose their jobs and their company. How about relaxing the Mark to Market rules on performing loans so they don't have to MTM these at all. What I don't understand is how they MTM all their loans anyways. I thought they diced and sliced and bundled them up in pieces and sold them back and forth. How does anybody know what any of that is worth? I can understand nobody wants to pay the original issue price for it. So how do you evaluate it's worth? Maybe that's a lot of the problem?

Cramer's Mad Money - Two Banks That Don't Need TARP Funds (1/28/09)

I often roll my eyes when I read the headlines of why the stock market is up or down for a given day or hour. But I realize the headline writers are required to write a headline, so they pick some event that's in the news.

Wednesday, there was a big rally and a 200 point gain in the Dow. Yet the headlines focused on the FOMC meeting which was rather late in the day. Even on CNBC when they mentioned the rally in bank stocks, there posted the graphs of 5 big banks/investment houses, but ignored the real reason for this rally: WELLS FARGO.

Wells Fargo posted earnings before the market opened. The headlines all pointed to a big reporting loss. If you read the details and know the story, you would see why Wall Street got so euphoric: Wells Fargo is doing fine. And the stock went up 30% + on the news. Why it dragged along all the loser banks I don't understand. But I don't understand why they dragged it down from about $27 to $14 when BOA was getting creamed a couple weeks ago.

When Wells bought Wachovia they took Tarp money and got a big concession on income taxes due to the merger. I guess the big worry was that they had underestimated the toxic assets of Wachovia. In the guidance along with yesterday's earnings, management basically said they are fine, the big loss is what we already told you to expect from Wachovia, we are not cutting the dividend that we just increased last quarter, and we won't be needing any more Tarp money.

In other words, Wells Fargo is head and shoulders above any other big banks in this country and always have been. Assuming unemployment is capped under 10% they will not be in trouble, and have expanded themselves to the East Coast in a big way and nearly instantly. They did raise money with a common stock offering last November to help fund the Wachovia purchase, which hurt the share price as the new common got priced at $27 which brought down the rest of us to that level from $35. It was bad timing as the markets got routed for 2 days just before the offering. They sold $11 Billion of stock for $27 to much more sophisticated buyers than me. I certainly don't have access to new stock offerings. So WFC buyers thought $27 was a steal on November 6. What's changed since then? Lot's of bad news from other banks. And business as usual from Wells Fargo. Yesterday it gained $5 on the earnings and governance news to $21. Why not all the way back to $27?

Yes, I'm long WFC