Roscat

Vikram vs. Kenny: Which CEO Will Be Ousted First?

Kenny only. Give Vikram some time.

BofA, Wells Fargo: No Equity After Accounting for Bad Loans

To ChrisB
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"But continuing the analogy, if the fire sale price that I could sell my house for in 1 day is $20k, but I could put it on the market and sell it within 6 mos for $150k, and perhaps 1 year for $180k, what's the house actually worth? To me, it's $150-180k, because I have no intention of giving it away at a fire sale."
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The problem with your analogy is that it will take 10-30 years for the assets to raise to the same level as in 2007, not 6 month. Thiese aren't futures you are selling but, hard, tangible products.

There is a reason why houses shouldn't have been securitized. Because selling the underlying security assumes that one holds that house for 30 years. But, investment firms took the haircut immediately, vs over 30 years. Simple short-term vision.

So, if it's worth $20k now and you need to sell it, that's what you get and even if you wait a few more months you're still not gaining much. In this market, you're lucky if you get even that price.

It is all about asset protection, not about making money out of housing.

BofA, Wells Fargo: No Equity After Accounting for Bad Loans

To Big Jack
The homes do not have a $0 value because someone will pay a fire-sale price for them even in this market. It has been proven already in CA, NV, AZ and FL.

Waiting 10-30 years to get those assets back to 2007 values is unacceptable.

Jim Rogers: It's Better To Let Financials Fail

I think Jim Rogers has good points. The failures in the financial services system should be exposed by allowing the companies to go bankrupt.

It seems to me that the government is looking to replace the bankruptcy courts when the best job is instead done by filing Chapter 11, re-org.

For the government plan to work, the values of the bubbled assets need to be revived. Does that mean 10, 20, 30 years? Surely the same government will not even be around by that time to realize that this choice was not feasible.

Unfortunately, most us will be around and we will only have us to blame if we don't ask for these companies to go bankrupt now. Take the medicine now - it tastes bad, but the downside if it's not taken, is that the virus could mutate in a worse shape.

Fixing the Economic Crisis in Six Easy Steps

You must be joking.

Nationalizing will do nothing to the taxpayers but increase their burden. That includes you too.

So, I sold my shares in BAC and C so you can force them down my throat by purchasing them through the government and then lose even more money because they are insolvent? Let me just say that I don't subscribe to that point of view.

There are old and very good bankruptcy laws that are very alive and well. They were invented in Capitalism. Use them wisely. Take example from Saab.

Regards.

The Daily Double: Martin Mayer on CDS; Nouriel Roubini on the Banks

Nouriel is right. Let the free markets play this out. Mark-to-market is the only way to go outside of Socialism.

disclaimer: no BAC or C stock - sold them years ago.

Eight Reasons Bank of America Is Going to $20

Jason,

How can you call BAC at $20 when you can barely hope for 5 bucks in 2011? You must be joking. And you just lost those calls.

Post again in a year and follow-up on this every year...that is, if BAC is still listed anywhere.

Regards.

Too Big to Bail: Lehman Brothers Is the Model for Fixing the Zombie Banks

Excellent article. Bankruptcy is meaningful.

Is Bank of America Actually Behind Citigroup on the Problem Bank List?

Companies HAVE to mark-to-market sooner or later. And BAC was greedy and impulsive to make such acquisitions.
If you have an investment that you cannot sell and have to wait years for it to barely gain some value, it is useless. If you keep it off the balance sheet, then, make some money with the other investments. The problem is, no company can do that. It's like in 2001 when investors where caught with shares of Internet companies that were not making any money. Whoever was able to keep the shares, barely made any money on them even 8 years later. Whoever was able to sell at market prices, moved on to better investments (derivatives, for example - to be sarcastic). Just mark-to-market as much as possible and move on. You have to pay for risk in investment.
BAC has been jealous on C for decades and wanted to become domestically what C was internationally. As a reflection of Ken's personality, BAC spent as much as possible for acquisitions that made sense theoretically. The problem that BAC has is exactly what RBS has. The ideas were right, but KL was unable to time the deal and calculate the consequences, thus destroying even what he had valuable. Let Ken, his board, and 2 down go, and have them sell some of the assets they have to make up for the bad deals they made. And after that pray that a union between North and South will actually work, even after more than 100 years.

Regards.