FIG trader_'s Comments

MBIA and Ambac: Edge of the Cliff, Ratings-Wise

Mon, 09 Jun 2008 08:27:02 -0400

Oldlures1; wake up. do you actually think the "headlines" caused the failure. If you are still holding the bag, it will be empty soon. Only the last phase of the decimation for equity holders is probably due to "headlines". The business model is worthless, and William Ackman deserves star status for exposing the "investment farce". All the rest of your discussion, and that of 99% of commentators is worthless filler.

Why Kass Is Wrong About Berkshire Hathaway

Thu, 05 Jun 2008 20:27:57 -0400

He is specifically is quoted as saying it is the performance of the four stocks as well as other things. Is he referring to the credit default swap which are under water by 1.5 Billion? Big F'n deal. WEB hasn't taken a multi-billion loss ever, except for catastrophe losses. I wouldn't lose sleep over a markdown on a credit he has studied. Or the index put sold at par. A 15/20 year bet. Fuggedaboutit. Kass will be 6 feet under as will WEB, but the cash will be compounding

Einhorn vs. Lehman: Lehman Will Lose

Thu, 05 Jun 2008 07:36:36 -0400

Perhaps you should clarify exactly what price target Einhorn has put on LEH and the specific $ writedowns in assets/earnings numbers he has in mind. Is 50% of bv his target or is 10% as in bsc takeout price?

AIG: Another Bear Stearns?

Thu, 29 May 2008 06:51:08 -0400

Thanks for the absolutely brilliant insight

Is Berkshire Hathaway Now a Bargain?

Tue, 20 May 2008 16:23:09 -0400

Well, after trouncing his peers (all financials, GE, whomever) in 2006/2007, the geniuses claim to know what "fair value" is on this stock. An even more ludicrous proposition, given the close to $20 billion put to work in acquisitions in the last twelve months or so. A 1 billion plus temporary write down of a credit derivative?? peanuts relative to capital base, and the 10's of billions written off by peers. Given that it is a credit bet, I know where I would put my money. This is a damn cottage industry. One can look at the % declines over the last twenty years, and see how many times it was 20% or greater, and how many years it took to get back to breakeven (in the stock price). Only once was the decline greater (80k to 40K approximately). This is the last time, an institutional money manager has the chance to actually capture real value here buying today taking advantage of "market dislocation" (flight to quality exiting) and seeing todays acquisitions flourish in the next five years to ten years before he croaks. The large institutions that haven't owned the stock should be embarrassed not having owned this for the last five years. Doug Kass has probably covered already

Break Up AIG!

Tue, 20 May 2008 12:38:38 -0400

Like usual your comments are long on useless advice but short on any meaningful analysis. At the very lows for the stock in more than a decade you recommend changes and start poo-poo-ing Hank, blaming him for the mess, 80% of which is due to bad investment decisions made on mortgage bets post Hank. Say what you want about him, but his investment and ROE track record is second to none (actually second only to AFLAC) You say ROA is more important than ROE for insurers? You're kidding right? ROE may not say much about risk at any point in time, but it wasn't Hank that took the huge writedown just now. ROA is meaningless for comparative purposes, given the difference in p/c (and across lines) and life insurance companies asset/liability mix.
Even for the "excesses" of what he was responsible for, the impact on ROE and BV (book value) growth was almost negligible when averaged over his tenure. Sure any cheating on reserves is a no-no, and he probably did less than any competitors save BRKA among the ten majors. Look at the triangles (yellow books or 10K's )going back decades. And just remember you has the better chance of going into the slammer. Hank or Elliot?
You defer to the rating agencies???? No comment needed.
You also talk about not a fun place to work, and talk about longevity. Who ever said, these were charity organizations; certainly you can't be writing for investors given the longevity of personnel at investment firms
.
You say the problems at AIG are bigger? Please do tell?
And Sullivan can't deal with them. For this latter one, I will give you credit. That's right he can't. And one thing you can be sure of is that probably only one person can and will do the most for agitating and getting the stock higher (we are certainly at or near the low). That is Hank. Where are you Hank when they need you the most?

GSEs: The Tail Wagging the Credit Market Dog?

Sat, 12 Apr 2008 04:53:04 -0400

Jimmy, sorry grunting doesn't count as a legitimate response. I'll try to keep it to one syllable words for you next time.
Richo, Not sure what your disagreement is. Most of your points are correct though don't address the implied methodology for valuing the GSE's. To repeat, it is a bet on stabilization of house prices (reasonable 15% to 25% below national peak price levels), resumption of more normalized spread levels on MBS (GSE and non GSE backed) by 2009/2010, return to 8% to 10% mortgage credit nationally (more than 30 years of history on that), and absolute levels of mortgage rates stabilized below the 6% to 7% range for several years. Somewhat optimistic, but not unreasonable given it will be top of policy agenda (and should be). I am taking cues from Pimco's view on the necessity of multi-pronged policy response to stabilize house prices, and the GSE
s well collateralized guarantee book.

Why I Bought the Ultrashort Financial Sector ETF

Wed, 09 Apr 2008 12:32:11 -0400

The presumption that the factors you mentioned (UBS and LEG capital raising) are responsible for the decline in the SKF (rise in UYG) is just that. And to suggest this about face (in financial stock performance) is unwarranted, while not addressing more specifically the reasons for why 1990 level price/book valuations for much of the financials is the appropriate price level puts you in the same category with the rest of the crowd, and not contrarian as your bio suggests. This group of stocks is still way out of favor. Many posters mentioned the market anticipate the news, which in fact it does. There is almost a 100% chance that the SKF will be higher at some point in the next few months and a 100% chance that it will also be lower at a different time. Depends on your time frame. But if you are a "investor" as opposed to trader than you need to mathematically find what the market is discounting in terms of ROE's and valuation (expansion, contraction) through 20010. Only then is it worth discussing. Otherwise take out a chart and use the right technical methodology for looking for entry and exit points over the short term. It works better for that time frame

GSEs: The Tail Wagging the Credit Market Dog?

Wed, 09 Apr 2008 11:12:27 -0400

1) Market reflects bad news, needs housing price stability. But, worse case scenario is behind us; a 1/100 year crisis of confidence event in the credit markets/mortgage paper.
2) reversing 2/3 of the MBS mark to market (non-subprime) probably a gradual 12-18 month event
3)Capital will be costly, and it is a race against time, the wider the spreads and deeper discount to book the stock carries, the more dilutive the action. Conversely, if allowed to expand mortgage portfolio aggressively on the cheap and MBS spreads tighten late 2008 2009, they will print money in 2009/2010/2011 and beyond. Lots of thrifts well below book (most of them in fact, of special interest are those based in California). This is the safest if there is another big leg down (which I doubt, but you never know)

First Marblehead: Hostage to the Credit Market

Wed, 09 Apr 2008 07:53:40 -0400

Please do tell. Analyze this for us at least one way, for Xmas sake. On the other hand, for those who viewed this as a short in the 30's 40's or 50's, you may want to try a flier at tis in the next few months well below yesterday's close. But if course if you are operating on even a fraction of the same assumptions as many did over the last three years, fuggedaboutit. You need Paulson like hedgefund returns to recoup you initial investment. Personally, it may be worth revisiting the whole scheme, i can think of long-term scenarios of value building

Time to Cut Your Exposure to Investment Banking and Mortgages

Sun, 09 Mar 2008 23:47:41 -0400

This is comical. Seems like the perfect contrarian signal, when poster after poster talks about selling the mortgage and broker stocks now, when they are anywhere from 50% to 75% off the highs.

Thornburg's a Huge Bargain After Monday's Crash

Sat, 08 Mar 2008 08:24:45 -0500

Well as much as I like getting proven right, I do not "hope" for its demise, any more than I hope for its survival, Pointing out risks to investors, hoping some of the less informed seek professional or sound advice, before seeing their conservative "dividend yielding" investment erase 100% of its value.
Tundra: The fallacy of "your" argument is that the assets are worth what they used to be: My argument emphasizes that the "enterprise" value is determined by a)the value of the assets (obviously it is uncertain about where they will be in 5 or 6 month)
b) the savvy of management in preserving capital management (i.e managing liquidity, leverage, credit risk, positioning the firm for times of financial stress. If CFC can go under (for technical purposes, forced sell is tantamount to the same, notwithstanding Bill Miller's assessment of its value, so can TMA. I could care less about GS leverage players or speculators at vulture funds
You keep on trying to presume that I think this, that or other by "shrinking" me. Stick to the subject at hand.
Jack, If I;m not mistaken they just announced that have to restate numbers, and what you pointed out is backwards looking. As much as I enjoy the analytical aspect, I don;t have much more time to spend on details of TMA. Think WM is survivor, as well be IMB and FRE, and FNM. The four horseman, I will call them My own opinion, the bottom (again, and maybe final bottom in the group) will be made in financials this week in the stocks (like that scary Monday, it could be Monday as well). The upside downside for survivors is huge, I agree. Unfortunately TMA won;t be one of them. Good luck
:

Thornburg's a Huge Bargain After Monday's Crash

Fri, 07 Mar 2008 21:10:57 -0500

Frozen Tundra-No am not short; have no position in this company, but am familiar with the space and have interests in others. If you read earlier posts, was warning investors about opinions that were based on sloppy research (sorry) and weak assumptions in an illiquid market. Let others judge, the record stands. And remind me if there is a another reason why TMA should survive again, other than to save your hide? I'm more more in favor of saving peoples jobs, as opposed to leveraged speculators in real estate, which is what TMA stands for.
Jack; I'll repeat; deep pocket investors doesn;t need to buy the whole thing, only parts they want. I'll be brief and to the points (2 of them)
1) don;t know enough about whether all your assumptions are true (earnings power, spreads), but my sense is that they are off by a wide margin. They can't fund new loans, so they can't hold them or sell them. that market is shut out. The business is essentially a spread business; Why buy it for $xx and put up 1 billion (your number), when they can have the whole company for about $300 million (todays market cap close); buy pieces for less than what it cost TMA to originate or buy them
2) new buyer (lets say he buys 35%) doesn't have control of company, adds no new equity; margin calls are still there, no new lenders in sight. Why are they getting margin calls in the first place? use the same analogy, why did you get margin calls after the decline; because the value of the assets (operation whatever you call TMA) is worth a lot less than you originally thought.

Thornburg's a Huge Bargain After Monday's Crash

Fri, 07 Mar 2008 16:58:23 -0500

Jack, There is no way to put a value on the company, for those of us way outside the MBS market. Prices even for high quality MBS securities (of which TMA has lots have declined as much as 20 to 30% where there is a market, implying yields in the 9% or 10% according to ). As some have said, there are "air pockets" in price levels between bid and offers. TMA is mostly being valued currently as a portfolio of mortgages, which are declining in value. I read earlier that Bill Gross from PIMCO bought TMA paper (high quality MBS) from them. I even suggested in one of my first posts he may do that, because I have been reading PIMCO website on fixed income strategy and where they had been putting their money. Perhaps you should do the same. Read him, and learn

Thornburg's a Huge Bargain After Monday's Crash

Fri, 07 Mar 2008 14:09:44 -0500

thanks distressed buyer; have been reading your enlightened comments as well over the last few days and actually am doing lots of due diligence on several distressed financials including FNM, FRE, IMB , WM, which are all in a pickle but I believe are decently capitalized survivors, and have explosive upside, once this deleveraging of mortgage assets climaxes definitively. I think we are almost there (stock prices, spreads, not home prices; a very different matter), and want to buy aggressive buyer (am light buyer now) pretty soon, Are you familiar with the distressed space as relates to financials? Be interested to hear your thoughts. I'm pretty knowledgeble (10 years covering equities financials) but in this environment outcome is mostly in hand of buyers of fixed income assets, creditors and mortgage players.
I truly was/am trying to get people to stop listening to uninformed posts about complicated stocks. I have made some bad calls, but usually posit my comments with risk/trader terminology. They still don;t get it, and will continue to fantasize about outcomes; there are few real buyers in TMA probably; my thoughts?. there are vultures shorting every rally,by fueled by ignorant speculators and buying back and covering, like they are in some big names WM< FRE< FNM. But in some of the big names there have massive accumulated positions by big firms Cap Research and Management which has amassed 10% to 20% stakes in these names over several quarters, years. They avoided the tech bubble;

Thornburg's a Huge Bargain After Monday's Crash

Fri, 07 Mar 2008 12:13:01 -0500

For those still "keeping faith" or "newly converted", perhaps revisit the teachings of the non-believers or agnostics. Despite the incineration of the stock, some continue to roll the dice, but, using some questionable intellectual and/or analytical authority, and now suggest that mathematically, there is a chance of 500% return, versus total loss. How you would get to a double digit stock price is not revealed in the footnotes. Sorry Jack, May I call you Jack? They leveraged the house at the wrong time, and are selling in a weak market, and will never, ever get the second chance in this lifetime, under the TMA name. (They'kll just chnage the name and move on.) They are the sub-prime borrowers (they have no credit now) being thrown out of th house. Why would someone buy "the company" or rescue it? I'm sorry, vulture funds are not freakin firefighters, and could care less about your loss or Legg Mason's, and the vultures will pick away at the carcass of TMA until there is nothing left (regardless of where they are in the capital structure). Barring a very dilutive infusion of capital (convertible preferred at onerous rates) this puppy is more likely than not going no where fast. No question that liquidation seems like greater than 50%. Its the upside that seems harder to quantify.

Thornburg's a Huge Bargain After Monday's Crash

Thu, 06 Mar 2008 10:46:11 -0500

The elves certainly worked overtime churning out new posts and defending the front line. Thanks, for directing traffic (and for quoting me). We'll move you to marketing from research. Its done wonders for site visits for me and has given me some great ideas. Nice try with the psychological devices as well. In an effort to gain trust of readers in your poorly formed opinion, you try some candor and openness, laying out the value of your not insignificant purchase. You claim victmization by other posters (some bashers). But despite what you say, its not respect that you show toward others, but absolute condescension towards the "little people". They are the victims that trusted someone who trumpeted his purchase of 100K worth of stock, even boasting of 30% annual returns (to bolster credibility), out-pacing all hedge funds, mutual funds, the Oracle himself, Bill Miller by a factor of 2x. Getting back to the subject at hand. For those still out of the loop. Don't buy in today. More margin calls on Carlyle Cap (from PE Carlyle Group), essentially leveraged mortgage assets as well. So if you are thinking of doubling down, don't. BK (should that be forced) will wipe out equity holders, and a weak puppy will be licking wounds for a long time. Most come to site with legitimate interest in learning/trading/inves... and want to understand technicals and fundamentals, though often not distinguishing between the two. The more informed try to occasionally throw in some advice as warnings, while admittedly knowing the limits of the knowable. You want to speculate on company with huge upside, go ahead. It should be more carefully couched in terms that capture the risk. The post-mortem mea culpa is commendable though

Thornburg's a Huge Bargain After Monday's Crash

Wed, 05 Mar 2008 18:32:56 -0500

Its a moot point, The assets are worth less, creditors are knocking, and the business model has effectively failed due to leverage, and all the dividends that were paid out (as they had to as a REIT) Banks will firesale everything if need be to protect themselves. Somebody else will eventually make money on the same assets, but it won't be TMA. Bankers are probably taking bids on the assets as we speak to survive indiminshed form;

Thornburg's a Huge Bargain After Monday's Crash

Wed, 05 Mar 2008 18:10:23 -0500

The denouement of this very sad saga seems likely to play out this week, with many investors wiped out in one week, especially those on margin like TMA itself. Its sad that readers are heeding the advice of novice and very unsophisticated investors making exaggerated and unfounded claims of good management, "conservative investments" and structures (all week long, its been a drumbeat of TMA bullishness), without an inkling of what they are talking about. Roth IRA, wipe-out. Warning signs should be put out on the front page of these reports. I warned repeatedly, using harsh language occasionally, and certainly try to do that with my posts. Hopefully everyone else will learn a lesson that isn't/wasn't too expensive. Maybe for an encore CEO Goldstone will have one last performance on mad money for his chief champion Cramer and the whole population of Cramerica.

Thornburg's a Huge Bargain After Monday's Crash

Wed, 05 Mar 2008 11:45:46 -0500

As far as track record, well....30% annually????. only those that sold at the top and bought at he bottom can report those numbers, and same with leveraged real estate. But back to reality, who said you are getting 20% chance of getting 10 to 1 odds on your money???I would like to see the math behind it. I suggested better chance of losing all than getting 200% on your money, and, my guess is that Mortgage assets being thrown away cheaply by weak hands (TMA),will benefit strong hands with cash (like PIMCO, Buffett, Blackrock fixed income institutional funds ). These are the institutions leveraging their mortgage returns at the expense of overleveraged forced sellers like TMA (and MER, and lots others). Who is going to let them money cheaply to leverage up in the next cycle??????Good luck

Thornburg's a Huge Bargain After Monday's Crash

Wed, 05 Mar 2008 07:17:36 -0500

Jack,
you seem like a reasonable guy, but with little experience in distressed financial markets, and untutored in the financial sector. Didn't have time to read most posts, and read fewer and fewer because the quality is, to be honest, somewhat lacking. So I'll be brief and to the point to try to save you some money. I've covered financial stocks for over ten years 1)All traditional ideas surrounding value can be thrown out the door in the short term. So, sell part of your position so you don't get margin calls in the event of a downswing (unless you are fantastically wealthy). 2) There are a lot of moving parts in the credit markets that you are just too unaware of (as are many big institutional investors) that make raising capital (debt and equity) very complicated. So meeting margin calls for them could be major problem (think of what would happen to you in the event of margin calls; why did you have to use margin in the first place?). 3) This could go on longer than anyone believes. (Read Dennis Gartman's ten rules about trading. i,e,one rule is not to add to losing trades; the markets can stay illogical a lot longer than you can stay solvent. 4) Don't feel like a hero if the stock goes to 4.75, it could go right back down. That would have been good trade, but few traders, and I mean few traders, are buying here. If you assume you are a genius, one could attribute a lucky day in Vegas to skill. That does not make your "thinking" right; There is a better chance of that going to zero, than going back to $12 in the next five years, unless you really do know more than the market ( I doubt it, despite your impressive intellectual credentials). Just my thoughts, keep them in mind

Berkshire Hathaway Appears Undervalued

Tue, 04 Mar 2008 13:09:50 -0500

great, all your numbers suggesting its NPV or intrinsic value are 140 to 180K are as well thought through as is the suggestion that hedge funds will through as the analysis of hedge funds trying to break this up to break it up. When in 2050? Lets see, dozens of family run companies have jumped through hoops to get Buffett to buy their company, and somehow, the board (stuffed with Buffetts friends family and loyalists), are going going to let a few vultures pick a way at it, when they don;t want to be sold to somebody else, and the owners themselves are quite happy where they

How I Outsmarted Myself on Thornburg Mortgage

Fri, 29 Feb 2008 07:40:06 -0500

Since your comments are shown every day, its important to correct mis-interpretations that you make of the market. There is no outsmarting let alone a thesis.
Its OK to be wrong, but don't repeat the misinterpretations/arg... ad-nauseum, if your understanding is quite limited.
1) Who told you the rally in homebuilding stock is based on an upturn in 6 months? It could be 3 months, 6 months, 1 year or 18 months. It is what it is.
2) Who said TMA is playing the same "trend".
3) The rise in mortgage rates related to inflation? You are kidding right? The 10 year Treasury is off the lows, but still below 4%; Its the spread of MBS (over Treasuries), which is ballooning and created the chaos. Even casual observers are aware of the fact that he secondary market for mortgages securities (where they are traded) is shut down, with mark to markets causing margin calls (as realizable value of MBS collateral declines).
Read more, write less

Credit Woes, "Ceaseless Talk," Fannie Mae and Toll Brothers

Thu, 28 Feb 2008 14:00:01 -0500

Your attempts at humor with the tongue in cheek are sorely lacking more so for investors like yourself in TMA. Maybe the joke is on you..

Mortgage Lenders Toast Wall Street with Kool Aid

Thu, 28 Feb 2008 09:06:00 -0500

You are out of your league Trader Mark. TMA's announcement today makes it even more apparent

A Trader's Dream: Handicapping Indymac

Wed, 20 Feb 2008 11:34:09 -0500

I assume you didn't buy it banking on the dv'd. It's been well understood that they would a)lose money in Q4 07, Q1 and Q2 08 b) write down BV (in the four worst quarters) by something close to $10 a share; c) have to raise capital/eliminate dividend. Those are starting points in estimating takeout value, and, assuming independent survival, a starting point for growth in BV

Mortgage Lenders Toast Wall Street with Kool Aid

Tue, 19 Feb 2008 18:28:07 -0500

Who is drinking the Koolaid?? Perhaps you should look at TMA's loss from the sale of MBS in the second half of 2007. Do you even read the stuff you write before publishing? The stock was cut in half. You are incorrect and misleading readers. IMB has/had very little "subprime", and that is not what got them in trouble. Get your facts straight. It is/was mostly ALt-A, something priced very differently in the secondary market for non GSE paper, as well as some homebuilder and other loans. The educated guessers on the sell-side (please not RBC, who downgraded IMB at absolute lows) use "expected losses" embedded in the December 31 price for the ABX index for sub-prime (when estimating potential write-downs for the GSEs), since there is no comparable index for Alt-A. We shall see. (BTW, you are running with the crowd and consensus who are bearish on the mortgage names overall, not in the minority, as you seem to think.). Almost everybody has now thrown in the towel on the GSE's and IMB and others. You can be sure we are close to the bottom, if not there already.

Ackman vs. MBIA: Self-Serving Propaganda Disguised as Analysis

Sat, 16 Feb 2008 06:04:23 -0500

Bitchdog; well said, The funny thing is if Ackman is still short and correct that BK is a 2008 event, this will go to zero and JC will lose even more. Does JC he think its going back above $70, or is he hoping for a double to $25. I think he is in the former camp, like many disbelievers. I for one applaud Ackman for doing what no other analyst (or very few) was able to do, defy the sellside, rating agencies, and the whole machinery of Wall Street singlehanded

Tom Brown’s School Days

Fri, 14 Dec 2007 21:10:45 -0500

It was a cheap shot, and yes out of context. From my recollection, he was one of the first to call for a shakeup at C, before doing so was an easy "sell".

First Marblehead's Demise Effectively Closes the Bear Case

Fri, 14 Dec 2007 19:25:24 -0500

One would have thought the posse would have been called home by now; Its been weakened, but reinforcements seem everywhere these days. Perhaps you didn't see the stop loss on SLM. You embarrass yourself less often when you take this approach. But of course you have so much conviction about your "idea", you don;t feel the need to. As a result, you are left....