hpcooperjon

Are Financial Stocks Preparing for 'The Fall'?

Naive novice is good.


On Aug 19 10:36 PM Novice Trader wrote:

> I'll maintain my trailing stop of 8% across the board. You guys can
> jump into the market at anytime. When you do, I might be willing
> to sell you some of shares that are up 500%+ (GNW for example). :-)
>
>
> Frankly speaking, I enjoy reading your pessimistic perspectives.
> As I've said before in a different post, it gives me (and others
> like me) perspective, especially after watching my stocks go up day
> after day and then watching Cramer.
>
> You guys offer a good balance to the positive that I take in everyday
> and your insight keeps me on my toes, leaving me to be ever so watchful
> of whether or not I need to sell or tighten my trailing stop. <br/>
>
> However, sometimes I do (honestly) wonder if many of you aren’t just
> pissed off at the world that you’ve missed this sustained rally and
> all you know how to do is complain and/or short the market. I honestly
> wonder this sometimes. Perhaps I’m naieve, perhaps it’s due to me
> being a novice. I suppose only time will tell. Hopefully none of
> us will get hurt waiting to find out.

Armageddon Part Two: Securitization Is Too Big to Fail

GREAT COMMENT. ACTUALLY MORE COHERENT AND TO THE POINT THAN THE ARTICLE YOU COMMENTED ON.


On Aug 16 04:48 PM derryl wrote:

> Great article!
>
> I read Perry Merling's piece a week or two ago and I'm pretty sure
> he suggested that the government, not the Fed, was the only institution
> with sufficiently deep pockets to act as insurer of last resort.
> Merling said the Fed was to be lender of last resort but that was
> the extent of the Fed's backstop role. As you said, Merling gives
> a coherent explanation of the causes of the credit crisis and the
> way forward if we want to continue with securitization. You have
> done a great job of fleshing out how the insurance might work.<br/>
>
> I am not convinced that the past few decades transformation from
> a commercial banking financial system to the new capital markets
> financial system is a beneficial innovation. I wrote a previous
> comment that the incentive structure of the old originate and hold
> banking system inherently aligns bankers' individual interests with
> the systemic interests of the financial system, and this is a stabilizing
> influence.
>
> If you have to hold your loans on your own balance sheet, and if
> you are not protected by too big to fail implicit bailouts, then
> if you make too many bad loans your bank is dissolved by the regulators
> and you are disgraced from the industry in bankruptcy. In the securitization
> system of originate and sell, bankers collect upfront fees and ongoing
> administration fees for the loans they originate but don't hold on
> their balance sheets. As the front line underwriters bankers no
> longer have incentive to 'underwrite' because they make money no
> matter how poorly the loans they made and sold perform.
>
> This new incentive structure inherently generates systemic risk,
> and I don't think there is any amount of regulation and oversight
> that is capable of undoing the inherent incentive to create as many
> loans for sale as possible with no regard for prospects of repayment.
> This is 'free money' and risk-free money for originating bankers.
> Now that the toxicity of securitized debt is widely known there will
> be no market for these products unless assets are sold at extreme
> discounts, which you estimate at nearly 100%. You are right to say
> that governments will have to pay people to take over these clumps
> (no longer elegant 'tranches') of toxic sludge.
>
> Old style prudent banking probably can't generate the spectacular
> heights of bubbles that securitization is capable of. Maybe that's
> why the financial powers that be needed to do away with sound banking
> and prudent bankers. But i don't think this 'innovation' serves
> any interest except the bonus-gilded big bankers who receive trillions
> of Fed and taxpayer dollars as 'bailouts' when their excesses come
> home to bite them. The beast is dying of its own toxic wastes.
> I say let it go and return to real banking.

Health Care Bill: Prescription for Disaster

It's all downhill from there.


On Jul 19 11:01 AM kirkf wrote:

>
> Start with a basic premise: All citizens of a civilized country must
> have equal access to quality health care, regardless of race, creed
> or economic status.
>
> That should be written into the constitution.
>
> Work upwards from there.

Treasury Bear Will Worsen - Barron's

Government has good intentions. Saving trillions for the elite, they believe, will save the economy. At the risk of being trite, redundant, etc, I will say "the road to hell is paved with good intentions.

There Won't Be a Recovery

Your post is quite correct. But solutions are so complex as to be near impossible given the human condition.


On May 17 10:43 AM Jimbo wrote:

> Unfortunately, our political system is profoundly broken. BOTH political
> parties have been corrupted by special interest money which is why
> the Banksters always seem to land on their feet, no matter what they
> have done to screw up. When Obama went back on his pledge to run
> his campaign on public money, I knew the fix was in . I keep harping
> on two "reforms": Absolute term limits on Congress(have you seen
> TV shots of Senator Byrd of West Virginia in a wheel chair , slobbering
> on himself?) a law prescribing a felony for any former member of
> congress to lobby congress. A very high proportion of senators are
> millionaires, they should have no need to lobby. They should go home
> and live under the laws they have created for the rest of us peasants.

Suburban Housing Markets Are Unsustainable (Part 2)

Thanks, Jimbo. That needed to be said.


On May 15 10:28 AM Jimbo wrote:

> Boy, this article really kicked over an ant hill! I learned in Economics
> 205, circa 1949, that we are all "economic men". Mr. Quinn has correctly
> pointed out that materialism, if it dominates your life, can be a
> snare and a delusion. About 20 centuries ago, someone said:"man does
> not live by bread alone". Two things I definitely know about everyone
> participating in this message board: we are all going to die. And
> when we die, all our "stuff" will belong to someone else.QED: care
> for the spirit as well and the material.

Mortgage Resets: One Shoe Dropping

And the barfly sitting next to the appraiser was looking for her next big score.


On May 08 03:00 PM HardwoodFlooring wrote:

> Ransome- and the guy on the otherside fo the bar was the appraiser
> "buddy" who would justify it.

Good News on 'Central Bankers Flu'

conceptwizard, welcome aboard, sir. LKofScotland, surely you jest.!

Prime Mortgage Delinquencies Jumped in Q4

Wakeup, I wonder if what Alan Frain said is a probability. Is the increase in prime loan delinquencies the result of lost jobs or canny people angling for a refi? Or both.

Is the Government Deliberately Trying to Lose Money on Its General Motors Investment?

Mr. Durden is on to something. Who (really) cares? Not being flippant, either.

New Mark-to-Market Rules: Playing Pretend

Sounds like you might be in whistling distance of a few tombstones.


On Apr 05 09:29 AM logicalthought wrote:

> This is an excellent summary. However, I'm a bit more optimistic
> about how this will all work out than is Peter and most of the comment
> posters here.
>
> I think that while most Americans are somewhat macroeconomically
> naive (after all, they've got their own problems to worry about!),
> once they do get a good approximation of what's going on, they can
> force Congress to think quite sensibly (and Obama already strikes
> me as an extremely smart and adaptable guy who has recently learned
> to rein in his leftist tendencies). In that light, I think that if
> the mortgage-backed paper continues to erode in value (as, as Peter
> writes, the cash flows dry up), the American people will simply say
> "Enough! We poured enough into this already, and now it's time for
> the banks' equity and debt holders to pay for the rest of this (via
> major-league haircuts)."
>
> I really think that in the end (and yes, it often takes a while),
> common sense usually wins out in this great country of ours.
>
> P.S. The other thing I'm saying is that if bank stocks keep going
> up, eventually we'll be handed the rare gift of an instant replay
> on one of the great shorting opportunities of all time (via the beautiful,
> high-beta insanity of the SKF).

Seven Uncomfortable Predictions for the Economy

DBM LA's comment caught my eye. I was thinking "bread consume"? But, that said, the article was great. We need to prepare for the worst and work for the best.

The Dollar's Tipping Point

Enjoyed the article, my first read from the author. Try "vise", not vice unless that's what you are talking about.. "On the one side, nervous nellie's, (nellies) who know (that) as the dollar falls (,) gold, silver and oil will rise and (on the other side, are) those who believe the market bottom is not in yet". Just being picky since I don't have anything useful to say. I'll proofread your articles if you like.

10 Reasons Why We Still Haven't Hit Bottom

Posts like these are most probably a foreigner, no misspelling, just bad english.


On Mar 21 05:58 PM PROXIMO wrote:

> "this recession is affected peoples lives", "They've handing over
> their money to the 'professionals' for years," ----Someone ought
> to proof these articles before they are posted.

Geithner's Doomed Bailout Plan

What private investor would risk his capital on marked down toxic assets? Not Warren, not George.......maybe Dubai!