andruomail

Nine U.S. Bank Stocks for Right Now

I think he was being sarcastic & implying timeshares are in the same bad category as Detroit & N. Korea...


On Nov 06 12:41 PM Simi wrote:

> i would be interested to know- why timeshares? i have been looking
> at those recently too.... would be great to get your input. thanks
>

The Stress Test's Biggest Loser: GMAC

Don't forget all insurance companies and manufacturers that offer warranties, casinos, etc. They are all insolvent too!

Citi Needs Up to $10 Billion in New Capital

Here's my try at the headline vs. story riddle -- the New Capital part means increasing equity by $10 billion, which can't be done with asset sales. So it would be a donation or issuing more Citi preferred stock which is now getting shafted.

Big Banks: Pulling Off the Ultimate Bait and Switch

If they have operational profits, why the rush to fix things if they really could limp through another year or two or 5 with some accounting blindness? does the impetus for all this come from the banks or Congress, or the newspapers?

Bank Bailouts and Trust Preferreds: Still Too Much Risk Here

I seem to remember reading that trust preferred was invented so that banks could include a part of them as Tier I capital on the balance sheet and also fully deduct their dividends at the same time as debt payments. It just worked out better for them on the balance sheets & tax forms that way. Trust preferreds are interests in a trust fund made up of one giant bond issued by the parent co. Normal preferreds are shareholders.

Liquidity, Solvency and Acute vs. Chronic Banking Systems

I laughed at the criticism of the baseball & sailing metaphors but don't quite understand what the banking sector would look like after the prairie fire which in ecology makes the ground more fertile. In banking who are these operators that would spring up and how would they be a big improvement over today?

The End of the Credit Crisis

Maybe they would do that, but nobody wants to sell to them for 100K. It's just a bid out there for people that have no choice but to sell.


On Feb 27 02:26 PM who wrote:

> I'm no tax expert but a bit lost....
>
> buyers will only pay 100k for bad $500k loan which is worth $300K...
>
>
> but willing to pay $300K for a good $300K loan...
>
> Ignoring tax benefits, why would the buyer not pay $100k for bad
> $500K loan and writedown the $200K. Hence get a good $300k loan
> for $100K and make 200% profit? Why not write down the loan to
> $200K - super save - and make 100% profit?
>
> Isn't this the crux of stumbling block, banks are not willing to
> sell their loans for the fraction of what they paid for it nor reduce
> the principle? The $500K loan has a good part (repayable without
> foreclosure) so why is it worth only $100K unless that is what the
> expected repayment is.
>
>
>

Bank Preferreds: Betting at the Apocalypse Casino

Here's that Fed letter from Reilly's articles.

www.federalreserve.gov...

"While not expressly prohibited, BHCs are discouraged from using proceeds of the CPP or other public investment to pay dividends on trust preferred securities or repay debt obligations. If the financial condition of a CPP or other program participant deteriorates significantly, it may be appropriate for that BHC to cease paying dividends on the investment, as well as on trust preferred securities."

Bank Preferreds: Betting at the Apocalypse Casino

It would be funny if you bought a TRuPs, went the maximum 10-year period they can withhold your dividends, paying taxes on the phantom divs all along because the gov't charges tax to you on missed payments, and then they declare bankruptcy. Well, not funny, but I have some of these too. Otherwise it's part of the plan that I can wait a while.

Bank Investors Beware, Shareholder Interests Are Secondary

re TARP preferreds: while that 1st round was issued with equal seniority to existing lines, I think TARP's were cumulative, while a lot of normal lines are non-cumulative -- TARP's dividends could be stopped and would still have to be repaid someday, but missed noncumulative ones would be lost. So read the fine print if you're thinking about buying preferred today.