mik123

Increased Government Investment in Banks?

If TARP states the money can not be used for acquisitions and can only be used for lending as Barney Frank stated Friday, I don't see how there will be regulatory approval on the PNC -Nat City deal. That's probably why you haven't heard of any other deals. National City can stand alone and save thousands of jobs. TARP was passed to help National City. It appears Nat City was pushed into the merger by a top treasury official that worked for PNC as an attorney until Aug. 2005. He probably will be back representing PNC after todays election. Call Latourette, Barney Frank, Sen Shumer and your local house and senate representatives and demand National Citys share of TARP. There is no way they can be denied since Citigroup and others with inferior financials to Nat Citys received funds. Prior to the merger announcement, there were 10 buy recommendations by analysts who follow the company in detail. I believe the deal has an escape clause if it doesn't receive regulatory approval. Barney Frank came out Friday and said it's illegal to use TARP money to acquire another bank. That should make the deal null and void. The top three officials at Nat City are walking away with apx. 16 million. If they accepted TARP money and stayed independent, they would be limited to $500,000 max. compensation per year. All this poses many questions.

Will Equity Markets Gain Traction as TARP Begins Implementation?

The following may explain why PNC was first. I read today most analysts were shocked that National City sold when they didn't have to. All had much higher price targets. With all the recently passed legislation, there is 0% chance of failure. Then I read that GOP Rep. Steven LaTourette is seeking Treasury Department and congressional investigations into whether Comptroller of Currency John Dugan steered $7.7 billion of taxpayer bailout money to his former client. PNC, so it could buy National City Bank. LaTourette said Dugan represented PNC as an attorney until August 2005 before starting his current position as Comptroller of Currency. He may be back working for PNC in 2-3 weeks with a new administration due January. It was reported that a week before the PNC - National City deal ,Dugan called National City CEO Raskind and said he shouldn't expect rescue money. It was reported that Dugan was heavily involved in the sale and was pushing for a deal by last Friday. LaTourette, a member of the House Financial Services Committee, wrote a letter to Paulson and Barney Frank requesting a probe. He also expressed concern that the bailout stipulated that the treasury could only give a bank 3% of its risk-weighted assets and PNC received 6%. This sale was so hurried because the treasury would look bad if they handed money to everyone else today and it became public they said no to the nations 7th largest bank. There would be public outrage because the whole purpose of the 700 billion was to rescue the banks.That's what the public was sold. There are no top 35 banks left other than National City that analysts were projecting a loss for 2009. National Citys loss projection is small at -.34 cents or apx 700 million. You can get earnings by going to smartmoney.com and put the ticker symbol in and click on earnings projections. My biggest question is why Goldman Sachs is receiving 10 billion in rescue money when they have nothing to rescue other than their share price. The biggest mistake with the 700 billion rescue plan was not having a congressional oversight committee allocate the money

Why I Am Long National City

I read today most analysts were shocked that National City sold when they didn't have to. All had much higher price targets. With all the recently passed legislation, there is 0% chance of failure. Then I read that GOP Rep. Steven LaTourette is seeking Treasury Department and congressional investigations into whether Comptroller of Currency John Dugan steered $7.7 billion of taxpayer bailout money to his former client. PNC, so it could buy National City Bank. LaTourette said Dugan represented PNC as an attorney until August 2005 before starting his current position as Comptroller of Currency. He may be back working for PNC in 2-3 weeks with a new administration due January. It was reported that a week before the PNC - National City deal ,Dugan called National City CEO Raskind and said he shouldn't expect rescue money. It was reported that Dugan was heavily involved in the sale and was pushing for a deal by last Friday. LaTourette, a member of the House Financial Services Committee, wrote a letter to Paulson and Barney Frank requesting a probe. He also expressed concern that the bailout stipulated that the treasury could only give a bank 3% of its risk-weighted assets and PNC received 6%. This sale was so hurried because the treasury would look bad if they handed money to everyone else today and it became public they said no to the nations 7th largest bank. There would be public outrage because the whole purpose of the 700 billion was to rescue the banks.That's what the public was sold. There are no top 35 banks left other than National City that analysts were projecting a loss for 2009. National Citys loss projection is small at -.34 cents or apx 700 million. You can get earnings by going to smartmoney.com and put the ticker symbol in and click on earnings projections. My biggest question is why Goldman Sachs is receiving 10 billion in rescue money when they have nothing to rescue other than their share price. The biggest mistake with the 700 billion rescue plan was not having a congressional oversight committee allocate the money.

Treasury Uses TARP for PNC to Acquire National City

I haven't seen any of the TARP money go to a bank that really needs it. As a taxpayer I would be furious if this money goes to banks that don't need it. Why is Goldman Sachs getting 10 billion of the rescue money when they have nothing to rescue. They have no bank deposits or problem loans this rescue plan was designed to help. I hope it's not because Treasury secretary Paulson was their former chairman. Morgan Stanley is identical to Goldman and is getting 10 billion. Wells Fargo certainly didn't need the money acquiring Wachovia and their chairman Kovacevich was furious with Paulson for forcing them to take it. The Feds plans on injecting 250 billion into banks that don't need the money with the exception of Citigroup. If they would not give it to National City, that's a huge injustice since there giving 25 billion to Citigroup which has many times the amount of loses and only double the U S deposits. Wells Fargo, J P Morgan,and Bankamerica did not in the past and still don't need Fed money. After National City, I can't find one large bank that's projected to have a loss next year based on all analysts expectations. After the top 25 banks,their size drops dramatically with less than 25 billion in deposits. Go to Smartmoney.com and plug in the ticker symbols and go to earnings projections. Even Citigroup is projected to earn 7-8 billion next year. Fifth Third and Keycorp are expected to have excellent earnings next year according to the analysts who follow the company(find this in Smartmoney.com) The only banks that I see that could use the help today to get them over the hump is Citigroup and National City. The Fed only needs to use 35 billion (25 to Citigroup and 10 to National City). By all analysts estimates, National City would lose $.34 per share next year which equates to apx 700 million. That's not that bad. People forget they earned 350 million for the period ending 6/07. They could very easily get back to earning $1.28 a share in 2010 which would take the stock to a minimum of $12.80 a share assuming a conservative P E of 10. PNC is getting National City at no cost and is actually making 2 billion because of the 7 billion tax benefit on Nat Citys well publicized 19 billion problem loans. From what I read, 25% of this has been reserved for. My biggest question is why did the Government have this 700 billion rescue plan and not immediately give 25 billion to Citigroup and 10 billion to National City. Out of all banks with 25 billion or more of deposits, which by the way is the top 35 banks in the U S , only 2 or 3 really needed the money. If they refused to rescue National City, then as a taxpayer I would demand they cancel the 700 billion rescue plan. All this is doing is making the shareholders of the selected companys rich. Wells Fargo is almost unchanged for October while the Dow is off 35% because of the sweatheart deal with Wachovia. In case you missed that deal, Wachovia agreed to a bid by Citigroup of $1 a share earlier this month. Three days later Wells came out of nowhere and offered $7 a share which was accepted. In another deal Bear Stearns agreed to a $2 a share bid by J P Morgan until shareholders objected and the bid was upped to $10. The National City deal is the first deal since the government announced capital injections to banks, the ability to writeoff bad loans upfront instead of spreading over many years, and relaxed accounting rules regarding asset values on balance sheets. These are all big game changers in National Citys favor of staying independent. At $2 a share and with all the government rescue plans, theres a 0% chance of failure. If they did after all of these plans, the government would look like a bunch of dummies and should all be fired. If the Fed is so interested in making loans, let people go direct with them. Starting this year , most student loans are direct with the Federal Government. This week corporations can start doing the same in the short term loans. Do the same with consumers but pay the banks to process the paperwork. They Feds don't have the manpower for consumers. So don't pass out a 250 gift if your not going to help the banks that need it. All the weak banks with the exception of 2-3 have already merged before any the rescue plans were approved.

Testing the TARP: PNC and NCC

I haven't seen any of the TARP money go to a bank that really needs it. As a taxpayer I would be furious if this money goes to banks that don't need it. Why is Goldman Sachs getting 10 billion of the rescue money when they have nothing to rescue. They have no bank deposits or problem loans this rescue plan was designed to help. I hope it's not because Treasury secretary Paulson was their former chairman. Morgan Stanley is identical to Goldman and is getting 10 billion. Wells Fargo certainly didn't need the money acquiring Wachovia and their chairman Kovacevich was furious with Paulson for forcing them to take it. The Feds plans on injecting 250 billion into banks that don't need the money with the exception of Citigroup. If they would not give it to National City, that's a huge injustice since there giving 25 billion to Citigroup which has many times the amount of loses and only double the U S deposits. Wells Fargo, J P Morgan,and Bankamerica did not in the past and still don't need Fed money. After National City, I can't find one large bank that's projected to have a loss next year based on all analysts expectations. After the top 25 banks,their size drops dramatically with less than 25 billion in deposits. Go to Smartmoney.com and plug in the ticker symbols and go to earnings projections. Even Citigroup is projected to earn 7-8 billion next year. Fifth Third and Keycorp are expected to have excellent earnings next year according to the analysts who follow the company(find this in Smartmoney.com) The only banks that I see that could use the help today to get them over the hump is Citigroup and National City. The Fed only needs to use 35 billion (25 to Citigroup and 10 to National City). By all analysts estimates, National City would lose $.34 per share next year which equates to apx 700 million. That's not that bad. People forget they earned 350 million for the period ending 6/07. They could very easily get back to earning $1.28 a share in 2010 which would take the stock to a minimum of $12.80 a share assuming a conservative P E of 10. PNC is getting National City at no cost and is actually making 2 billion because of the 7 billion tax benefit on Nat Citys well publicized 19 billion problem loans. From what I read, 25% of this has been reserved for. My biggest question is why did the Government have this 700 billion rescue plan and not immediately give 25 billion to Citigroup and 10 billion to National City. Out of all banks with 25 billion or more of deposits, which by the way is the top 35 banks in the U S , only 2 or 3 really needed the money. If they refused to rescue National City, then as a taxpayer I would demand they cancel the 700 billion rescue plan. All this is doing is making the shareholders of the selected companys rich. Wells Fargo is almost unchanged for October while the Dow is off 35% because of the sweatheart deal with Wachovia. In case you missed that deal, Wachovia agreed to a bid by Citigroup of $1 a share earlier this month. Three days later Wells came out of nowhere and offered $7 a share which was accepted. In another deal Bear Stearns agreed to a $2 a share bid by J P Morgan until shareholders objected and the bid was upped to $10. The National City deal is the first deal since the government announced capital injections to banks, the ability to writeoff bad loans upfront instead of spreading over many years, and relaxed accounting rules regarding asset values on balance sheets. These are all big game changers in National Citys favor of staying independent. At $2 a share and with all the government rescue plans, theres a 0% chance of failure. If they did after all of these plans, the government would look like a bunch of dummies and should all be fired. If the Fed is so interested in making loans, let people go direct with them. Starting this year , most student loans are direct with the Federal Government. This week corporations can start doing the same in the short term loans. Do the same with consumers but pay the banks to process the paperwork. They Feds don't have the manpower for consumers. So don't pass out a 250 gift if your not going to help the banks that need it. All the weak banks with the exception of 2-3 have already merged before any the rescue plans were approved.