User 283977

What’s My Payment?

LOL - Your comment reminded me of a great quote from the movie Mr. Blandings Builds His Dream House…

Ms. Stellwagon says advertising makes people who can't afford it... ...buy things they don't want with money they haven't got.

High Frequency Trading: Legally, It's Called Churn

Its one thing to provide information, its an entirely different thing to provide knowledge. This is why I value your articles so much. Thank you Tyler!!

Bank of America's Atrocious Choice for Chief Risk Officer

What's interesting is that Curl, the guy that made the deals that Brinkley took the heat for ends up as her replacement. So the message is we use Brinkley as a sacrificial goat, and after that, its business as usual.

Indeed "Meet the new boss, same as the old boss".

Schadenfreude: Finally, Countrywide's CEO Getting What He Deserves

3) BAC was told if they bought it the government would bail them out.

Citi and Bank of America Lead the Decline

Well said Wilson and Ranchr!

Consumers Confident Wells Fargo Will Survive

What proportion of that increase in core deposits came from people moving their money out of Washington Mutual in the fourth quarter? If they are in such great shape why has their stock dropped by 25% since the beginning of the year? Its recent upward movement was spurred by the prospects of the creation of a bad bank" which will allow them to off load all of their bad investments onto the tax payers.

Nationalizing Bank Losses

That was supposed to say commodity, not communities. Hey JohnA1, how about sharing some of that blood pressure medicine?

Nationalizing Bank Losses

Exactly why can't these banks be allowed to go into bankruptcy? They are not lending now, so exactly who is benefiting from these bank bailouts? It can't be the common stockholders, they are nearly wiped out. The only people left seem to be the bond and commercial paper holders. How much of those bond and commercial paper holdings are owned by foreign entities? Is that the reason behind the bailouts? Is it because if those people get a haircut, they will no longer invest the benefits of all of those dollars the American people have been paying for imported products and communities? If they get a haircut, what would they do with their other American investments?

At the MINIMUM, before any more tax payers money is given out, the public should be told exactly why these banks can't be allowed to go into bankruptcy. Its past time for one of our public representatives to write a bill that makes it the law that no further issuing of TARP money can be made in the absence of complete disclosure by the Government. Lets see who votes for and against? That should clear the air a bit.

The Fed's Decision: A Desperate Statement

I think it would be useful to identify the primary stake holders for corporate entities such as C. By doing that, we might better understand why our government is so set on not letting C go into bankruptcy. Following the money often results in enhanced understanding.

Obama's 'Bad Bank' Plan Is a Turning Point

A modelling approach would be based on discovering an indirect way to either value the assets or ascertain their risk level. If that can't be done, then appeals to a "modelling" approach are nothing more then public relations spin. An excuse for the government to purchase assets that banks don't want to own anymore at the taxpayers expense, with no basis for valuation. A pig in a poke approach.

I assume these assets have some kind of descriptive wrapper. In other words, they are not something akin to Monopoly money with a value printed on it. What information is included on the descriptive wrapper? For example, with a mortgage based derivative product, how much information is there with respect to linking the summary value of the batched group of assets to the underlying mortgages? A major part of the modelling task would be to discover what information is useful with respect to predicting value or risk.

So is it spin or is it doable? If it is doable, would the predictive accuracy be better than chance? I think BEFORE the government uses tax payer money to purchase these assets, they need to be more transparent to the tax payers with respect to their proposed asset valuation modelling approach and its predictive accuracy. Right now it seems they are just throwing out a catch phrase when in fact, they have no objective way to value the assets.

The WSJ Rewrites History

Good article Felix.
The next question is why is the WSJ doing that editing?

The Dividend Dilemma

Bank of America (BAC) secured an extra $20B from the government. Most of the assets guaranteed by the government are from Merrill Lynch. In exchange, taxpayers will get $4B in preferred stock with a 8% yield and warrants, BAC will cut its dividend to $0.01, and the bank agreed to a mortgage modification program.
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BAC's CEO Lewis claims he didn't know how bad things were at Merrill prior to the merger. Of course, complete knowledge of how things were at Merrill was part of managements fiduciary responsibility. BAC hired experts to do the deal. Was the merger a blunder, or is something else happening? Clearly, the common shareholders are going to take a haircut. As a consequence, I would think those shareholders would vote the management team out and let loose the hounds. But I still wonder. Who's idea was this merger, BAC or the Governments? All of the secrecy around how TARP funds are being used is reminiscent of how secret projects are financed.

I agree with Smarty_Pants conclusion. No one should be in financials at this time. I also agree with the Authors actions of taking money in his controlled accounts out of common stocks. That is a highly responsible action. If its your money, and you feel the risk is worth the upside potential, that's fine. But when you are investing someone else's money, you need to be far more risk aversive.

Bank of America May Have to Cut Dividend

Isn't this charming…
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January 16, 2009 - Bank of America (BAC) secured an extra $20B from the government. Most of the assets guaranteed by the government are from Merrill Lynch. In exchange, taxpayers will get $4B in preferred stock with a 8% yield and warrants, BAC will cut its dividend to $0.01, and the bank agreed to a mortgage modification program.
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There goes the dividend for the common share holders. BAC's CEO Lewis claims he didn't know how bad things were at Merrill prior to HIS merger deal. I believe complete knowledge of how things were at Merrill was part of his and the board's fiduciary responsibility. If you don't know, you don't sign. I suggest the stockholders vote this incompetent board out and let loose the hounds.

Don't Chase High Yielding Stocks Blindly

I agree with you DividendMachine. Great article on good investing practices. The dividend payout ratio is equal to the yearly dividend per share divided by the earnings per share. This article provides a useful guideline for that number. For standard equities, 50% is the guideline. For example, today, BAC's stock dropped to 10.65. Its dividend payout ratio is now at 223%. A signal that the dividend yield is putting pressure on the stock.

There are lots of places where you can just enter the stock and look up its dividend payout ratio. For example: www.dividendinvestor.c.../

This site also provides the dividend payout ratio 5 year average. That lets you compare the stocks historical dividend payout ratio with its current value. BAC's 5 year dividend payout ratio is 50%. This gives a good picture of the pressure on that dividend at todays stock price. For BAC, the stocks price decrease has increased its dividend payout ratio by a factor of 4.5 times…. these are tough times for financials…

Bank of America May Have to Cut Dividend

I totally agree with the author. Their stock price is now below $11 per share and heading lower based on lower earnings. Their dividend yield is now over 11%. Given the projected earnings per share, that level of dividend is not supportable. They have to cut the dividend again.