Kevin Walmsley

Year-End Buyouts: Big Challenges for the Big Banks

Too big to fail probably means they're also too big to succeed. Now that the taxpayer is on the hook for future losses, why should the banks lend? Would you?
Suppose you were a banking executive at the new, federally funded Bank of America, and have before you a loan application from a large retailer. Or a big commercial developer. Or an aircraft leasing company. Or a heavy equipment manufacturer. And you know that in the event of default, not only might you lose your job, but you might have to testify before Barney Frank's goons on the House Financial Services Committee, followed by the possibility of incarceration. Would such a prospect make you more inclined to lend? Or less so?
As soon as the United States Congress became part of their board of directors, Wall Street became Amtrak. Too big to fail, yes. Too politically connected to officially go bankrupt, yes.

But no sane person would invest money in it.

Citigroup's Derivatives Reduce Bailout to a Non-Event

Ummm . . . if you're recommending a buy on Citi, maybe you should have come up with a better example than Lehman Brothers to make your point.


On Jan 04 07:45 PM samrock001 wrote:

> Looks like you are the same cookie who had short position in C/GS/JPM
> and published a similar article last week. Now, with this article
> it seems you have covered your short position on GS. Good job else
> you would have your a** blown away. You still have short position
> in C and JPM. Similar to my advice last time with respect to GS,
> cover your short positions in C and JPM before Jan 15. Else you know
> what I am talking about.
>
> Why the hell on this earth people want to post such rubbish article
> when they don't have a clue about derivatives/swaps and how they
> work. Go and read a little before trying to post such BS. The derivatives
> may stand at trillions but the net exchange or inter party trade
> would be only couple of billions. Take Lehman an example.
>
> Folks, this cookie has published similar article in the past. Don't
> get swayed. Now is the time to go long Citi and JPM.

Tough Times for Card Companies - Barron's

Warhorse and MP--good comments.

I have a briefcase safe that I call my run-n-gun (it's used to contain a firearm, but no more. But I've kept the moniker). I have important insurance documents, a few thousand dollars cash, birth certs, etc. It's in case my house is burning down or there's a hurricane on the way, and I have time only to grab a couple of things and rebuild my life somewhere else.

Anyhow, I also had two unused credit cards in there, with $10k credit limits. And last month I got letters saying that they had been closed. I thought at first my identity had been stolen or something--I didn't recognize the account numbers, or the banks. Then it occurred to me that they had closed my run-n-gun credit card accounts, just in case I ever got the mind to use them, but at least now they don't have to maintain reserves against that possibility.

Six months ago, they would barrage my mailbox with offers to increase the limits, if only I would use it. Now they apparently feel that if I start buying stuff, I won't pay them back.

Not a good picture. The banks are running scared. Not only are they refusing new loans, they're busy closing up old ones.