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bbro

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  • Tobin's Q: Stocks Back to Overvalued [View article]
    Tobins Q was developed in 1969...the world has changed a lot from
    manufacturing driven to technology driven and when he developed it
    Exports were 5% of GDP...today it is 13%. Also the Q ratio reflects
    very closely the change in interest rates,,,look at interest rates from 1969 to 1995
    and the sub 1 Q.
    Oct 11, 2010. 04:50 AM | 1 Like Like |Link to Comment
  • Will Financials Be Joining the Party Anytime Soon? [View article]
    Source for your comments???
    Oct 10, 2010. 04:29 PM | Likes Like |Link to Comment
  • Will Financials Be Joining the Party Anytime Soon? [View article]
    Source for the comment on the half of loss taken by government??
    Oct 10, 2010. 04:28 PM | 1 Like Like |Link to Comment
  • Strategic Default Just Got a Lot More Attractive [View article]
    It is anybody's guess what the mortgage market will look like 7 years
    from now.....I imagine home buyers will have to buy significant mortgage
    protection insurance with who knows 25% down...wadda ya think??/
    Oct 10, 2010. 11:04 AM | 2 Likes Like |Link to Comment
  • Will Financials Be Joining the Party Anytime Soon? [View article]
    The Countrywide mortgages ( the ones on the books at Bank of America) have already taken a significant writedown due in large part to purchase accounting ( p. 158 in the 2nd qtr 10q)....they started out in July 2008 with an unpaid balance of 58 billion ....this group of
    mortgages are carried on the books at 36.2 billion today with a reserve
    of 5 billion....
    Oct 10, 2010. 10:58 AM | 2 Likes Like |Link to Comment
  • Will Financials Be Joining the Party Anytime Soon? [View article]
    Potential is the word....the reason say BAC trades at 2.93x...is BAC
    represents a lot of the things out of favor with market....a generally
    domestic bank, with decent sized exposure to housing and lastly
    a litigation situation which while probably over blown still an unknown
    quantity. On th other side if someone reads the 10Q's over the last
    few years you can see progress and enough transparency to get a read. The interesting thing about the 10q's is they give you the information but they require to do some homework. The core earnings power has remained generally in place but the dilution has
    been enormous and a direct result of the financial crisis. The positive side to that is the quality of capital is better than ever. I know
    a lot of people talk about mark to market but I encourage those who
    really want to know ( as opposed to having an idea and just accepting it as fact which I attribute to intellectual laziness) to study the progress of the loans,the chargeoffs,the delinquencies,the compostion of the loans (i.e. Geographic locations,vintage 06-07,and loan to value at origination)...also look
    at the amount of non agency mortgage backed securities and their
    carrying value....
    Oct 10, 2010. 10:52 AM | 3 Likes Like |Link to Comment
  • Will Financials Be Joining the Party Anytime Soon? [View article]
    A marker i use is the ratio of market capitalization to preprovision
    earnings...using BAC as an example...a conservative estimation
    is 45 billion in preprovision earnings per year...current market
    capitalization is 132.23 billion,,,,so it trades 2.93 times preprovision
    earnings....a lot of the regionals trade 6 to 7 times ( I believe there is
    a hidden takeover premium hidden in this number)....In the past BAC
    traded well over 6 times but times have changed and proper ratio is
    more like 5....JPM currently 3.90,WFC 3.77 and STI 5.83
    Oct 10, 2010. 06:55 AM | 3 Likes Like |Link to Comment
  • The Real World vs. the Stock Market [View article]
    Since there is no holy grail....i guess everybody must choose what
    they want to believe....
    Oct 10, 2010. 03:47 AM | Likes Like |Link to Comment
  • The Real World vs. the Stock Market [View article]
    The investor argument goes...It all comes down to a fixed versus
    floating risk...in the grand bull market days the 10 year treasury yield was used as measure (riskless rate) but today with all the skittishness
    a higher yield and risk must be used ( in fact the beloved David Rosenberg in his Merrill days preferred the Baa yield because it reflected the average corporates interest costs)....here is an old
    chart provided by Louis Navieller via Ned davis Research
    www.navellier.com/down...

    I believe the average maturity for Baa yield is between 20 and 30 years....
    Oct 9, 2010. 10:55 AM | Likes Like |Link to Comment
  • The Real World vs. the Stock Market [View article]
    Your choice fixed versus floating....pick your poison....
    Oct 9, 2010. 10:47 AM | Likes Like |Link to Comment
  • A detailed look at why robo-signing means systemic risk, in Foreclosure Fraud 101, first in a Rortybomb series stepping through the (still-developing) mortgage crisis.  [View news story]
    guilty until proven innocent....
    Oct 9, 2010. 09:36 AM | 2 Likes Like |Link to Comment
  • Strategic Default Just Got a Lot More Attractive [View article]
    How much is a payment on a 4k mortgage???
    Oct 9, 2010. 07:00 AM | Likes Like |Link to Comment
  • Bank of America (BAC) CEO Brian Moynihan wasn't planning to address his bank's national foreclosure halt in his visit to the National Press Club - but did: "We haven't found any foreclosure problems," he says, noting that BofA wants to "clear the air" and "go back and check our work one more time." He added profits have a "lot of room to grow."  [View news story]
    Just say buy gold...it will save you some typing....
    Oct 9, 2010. 04:06 AM | Likes Like |Link to Comment
  • The Real World vs. the Stock Market [View article]
    Moody's...Baa...medium grade corporate bond

    Baa1, Baa2, Baa3
    Moody judges obligations rated Baa to be "moderate credit risk".[7] They are considered medium-grade and as such "protective elements may be lacking or may be characteristically unreliable".[8]
    Oct 9, 2010. 03:02 AM | Likes Like |Link to Comment
  • How to trade a weak job market? Step one is to fully realize the stock market doesn't care about jobs. As long as the dollar's weak, fund managers will be forced to allocate to equities.  [View news story]
    12 month trailing revenue per share for S&P 500 is 932.49
    U.S.GDP 14578....S&P 500 Revenue per share to GDP ratio is 6.4%
    (932.49/14578).....the GAAP earnings margin is expanding ( currently 7.2%...normal is 8.0%)
    Oct 9, 2010. 02:39 AM | 2 Likes Like |Link to Comment
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