Emerald

Bank of America's Lewis Goes Packing

Many people don't want "government" messing with private enterprise. It's not a crime to run a company into the ground to max out your ego. Boards go along for the ride because the CEO picks most of them and they like the perks. Lewis should be fired "for cause" and shown the door without the bag of gold. Don't worry, the government is bought and paid for by corporate lobbyists and won't touch these clowns. All the members of the Senate and House Finance Committees have their reelection campaigns funded by the "too big to fail club".

I'm still waiting for the givebacks from the former CEO's of Merrill, Citi, Lehman, Countywide and Bear Stearns. Meanwhile the crazy cable guys are ranting against our elected represenatives and telling us the world is coming to an end. Rarely a word against corporate socialism where the taxpayers eat the losses. Sad


On Oct 01 10:05 AM HBWOW wrote:

> How can our "government" let Lewis walk (or run) away with his pockets
> full of our money. No prosecution, no payback of ill gotten
> gains, no jail - white collar crime again goes unpunished ?????!!!!!!

Thoughts on REITS, Financials and the U.S. Dollar

So many writers telling us that inflation is on the horizon, although Roger mentions that this is many years out. We are in a defaltionary environment wher the consumer is tapped out and not spending. Banks can't lend to overleveraged consumers and businesses don't need the money. Government spending is not going to bankrupt anyoneas the money is sitting in Treasuries purchased ny the banks. Look at the double digit return the governement received from the banks that have repaid TARP funds. paper profits on other bank inverstments are huge. I don't like the idea of bailing out banks but it will be profitable for the taxpayer.

Most REIT's, especially apartment REIT's have hit bottom and have partially recovered. Many have raised equity and rolled over debt maturities. Yes, there is more bad news to come for some real estate companies in 2010, but others can now be bought at a significant dscount to future value. I would buy more REIT's after a pullback.

Anyone shorting the dollar right now is about to get a hard squeeze. Sometime in 2011, we will start to see a monetization of government debt and inflation. For all those waiting or hoping for the demise of the dollar as the world's reserve currency good luck. And wher will people put their money? The Euro, the Yen, the Canadian dollar, the Australian dollar? After you. Investing in asian companies is a good long term strategy as is in U.S. based companies with a strong asian presence. Fear mongering is not a good investment strategy Note: Long EQR, UUP.

Citigroup Looks Overpriced

Citi, although a risky investment, is a great bet on the future in five years. I anticipate I will make at least a 25% annual return by 2014 as their poor investment portfolio stabilizes. My return will be higher if they get a new CEO. It's not a $50 stock, but it sure will be a $20 stock before splits. I am long "C" and feel very comfortable taking this bet.

Bank of America: 'Amazed by Goldman Sachs' Unmatched Risk Taking / Risk Management Skills'

Revolving door, corporate nepotism. "It is what it is" or as Yogi Brra said, "It's de ja vu all over again!". Nothing changes, so buy the stock and be on the winning side. If you are worried about ethics and lobbyists, no one is listening. Investors are either demoralized and partailly wiped out or are lookig for the next new, new thing in the "new normal". Wall Street pays the lobbyists who buy the politicians. GS does it one better with imbedded players. Investment thesis: buy the stock.

Geithner's Banking Pump and Dump: Time to Jump?

Trading desk earnings will be significant this quarter and next, but credit card losses and imbedded losses on home mortgages (especially in off balance sheet SIV's) continue to haunt this sector. We are looking at a 10% correction in this sector over the next two months. Baer in mind that the money center banks, i.e. JPM, are fighting any regulation of the derivatives market. Huge profits here coupled with huge systematic risk. Caveat emptor!

Has the Well of Merrill REIT Offerings Suddenly Run Dry?

Meaningless, non analysis.

Bank and Broker Full Year EPS Estimates

GS will look to lay off their bank charter in 2011 through a spin off of their investment banking group. Thanks taxpayers for the cheap money!

What's To Be Done About Citigroup?

Although your article has some merit, simply attacking commercial bankers as people who are "boring and counting pennies" is both arrogant and ignorant. Commercial bankers serve a very valuable link in our credit based economy and provide necessary loans to small and middle market companies that cannot access public debt markets. Cit is unfortunately a larger-than-life failed financial supermarket that has its fingers in many businesses and financial markets. Most governments don't want to deal with a complete failure here. Citi needsan experienced commercial banker to help turn it around.
As to your gloss over of JPM, this bank has the largest derivative book in the world and was handed Bear Stearns because of its counterparty risk to Bear. A lovely cover up.

Bank of America's Atrocious Choice for Chief Risk Officer

B of A is still trying to engineer the financial supermarket model that has failed for so many others over the last thirty years. If you can't even get the strategy right, you won't succeed. Fire the CEO and the entire board. Start from scratch and sell Merrill Lynch as soon as the market recovers. Just as Citigroup learned with Smith Barney, you won't be able to cross-sell anything with internally divergent cutures. Remember Shearson American Express and Sears Dean Witter?

Why This Rally Is Unsustainable

The author is correct. Earnings are deteriorating and fundamentals remain weak. Banking sector is essential to a recovery and banks are crippled; facing more real estate writeoffs and consumer deleveraging. Stock market has "corrected" to the upside and will now give it back over the next three months.
-Investors can find monthly cash flow in MLP's around 7-10%(KMP, EPD, TPP, LINE) and Ginnie Mae bond funds (4.5-5%).

-Also consider intermediate investment grade corporate bond funds due to wide credit spreads that will come in over time(5%).

-Stocks with strong balance sheets will be buys again after the market corrects.

-A strong short is the TBT (20 year T bond).

-Cash can be held in SHY (1-3 year T's; 2%)

Note: Long all of the above.

Mack-Cali Late to the (Follow-On) Party

All REIT's are not created equal. First, many REIT's are using new stock issuance to pay down bank lines, thereby cutting debt exposure (good), but diluting current shareholders at these low prices (bad). Note that many of the underwriters are using the proceeds to pay down their own lines. Yes, it is disclosed in the Offering Memo, but this is incestuous.

Second, retail and office REIT's are facing a leasing storm that theatens to take them under given the high tenant improvement costs they face to replace tenants. Many well capitalized apartment REIT's are under pressure from declining employment, but are good buys at these depressed prices, assuming they have taken care of debt maturities for 2009 and 2010. Examples of these better apartment REIT's are AvalonBay and Equity Residential. This sector will also be the first to rebound and pays a dividend to wait. Be careful shorting REIT's via the SRS because it has large apartment REITs in it and is less likely to have big declines from here. Note : Long EQR.

The Whitney Ratings

For all the noise out there, I don't see any of the major bank CEO's listing their accurate derivative exposure. For example, Jaime Dimon at Morgan Chase keeps repeating that there derivative book is totally "hedged". Perhaps this is true but the average investor cannot determine this as there is no full disclosure of CDS and interest rate swaps, ther is no tradable public exchange and we have no idea of the counterparty creditworthiness. Ying & Yang has stated the situation correctly. Geithner will try and take care of the senior bankers by stretching out the problem and hoping the economy grows sufficiently to wind down the bank exposure. Bear Stearns was quickly put to Dimon to eliminate the large JPM exposure to Bear. Meanwhile, the taxpayer will be the ultimate recipient of the Bank "put". Caveat emptor!

Cramer's Mad Money - Unsafe at Any Yield (3/12/09)

It is irresponsible to simply repeat a quote that "the banks are profitable". What does this mean? Profits before write-offs, profits before increasing loan loss reaserves for credit card defaults and commercial loan defaults?

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

Martin, you leave out each banks derivative exposure and, as other readers have noted, the lack of true transparency as to bank holdings. Therefore, your analysis is deeply flawed and investors should ignore it. No one is in a position to correctly analyze a bank today due to lack of information. Any bank purchase is pure speculation with significant downside. Many analysts wrote that WFC and USB were sound investments a few months ago and their respective prices have dropped due to increased loan losses.

Should You Follow Warren Buffett’s Latest Moves?

The obvious point is Buffett is putting his money in high yield debt investments, not stocks.