The FDIC votes for new exemptions on "skin in the game" Dodd-Frank rules for mortgage securities - where banks will have to hold at least 5% of the securities on their books, except for those containing loans with a 20% down payment, or sold to Frannie (FNMA.OB, FMCC.OB) - GSEs that already have conservative requirements. Bankers are pleased and hope for an MBS boost. [View news story]
There is another dark side, ever wonder why you never see bankers who have been bruised and bloodied, beaten and ridiculed by media and politicos, ever defend themselves. They speak with guarded, carefully chosen words, they never properly or clearly place the blame, why because anyone who deals with these agencies knows, if you get on the wrong side of the regulators, even if you are 100% accurate, they can make your life miserable, and never even tell you why!
The FDIC votes for new exemptions on "skin in the game" Dodd-Frank rules for mortgage securities - where banks will have to hold at least 5% of the securities on their books, except for those containing loans with a 20% down payment, or sold to Frannie (FNMA.OB, FMCC.OB) - GSEs that already have conservative requirements. Bankers are pleased and hope for an MBS boost. [View news story]
speakeasy, I speak from the perspective of almost 40 years in the business. What you just said is absolutely true, information that is readily available, everyone I know in the business is fully aware that mortgage guideline in place for prudent lending for 200 years were relaxed, ratios changed, debt to income formulas, all used to identify credit worthiness forever. Banks were given subprime portfolio percentages to comply with, all flowing from Washington, DC. Now someone tell me why I continue to see so called experts appearing on business channels, blaming the banks, the new Dodd Frank legislation is all coming down on the lending industry. Imagine a bank board room meeting, and a new strategy of lending to unqualified borrowers is being announced. We will give our shareholders money to borrowers who cannot pay it back. This was mandated from Washington under the community reinvestment, affordable housing program. This folly turned actuarial risk analysis on it's head, Lenders knew this paper was worthless, and that time would deliver defaults in numbers that could not be digested by the mortgage world. The fiduciary, prudent , shareholder protection answer: Move these loans, get them in someone else's portfolio, like fannie mae, freddie mac, and wall street, bundle, package, with better loans to create derivatives, for rating purposes. Sold around the world, this misguided, political, toxic crap sold around the world. So here we are listening to the same "experts" and politicians who created this mess, blaming it all on the banks and pretending to fix it! Wow, what a mess!
Charles, you are my hero, all the way back to Glick days on FBN. I enjoy your on air commentary as well as your articles here on SA. Interesting for Starbucks to come down on the side of small business FINALLY, the light comes on for a business man and Obama supporter. I'll buy in to his newfound love for free markets and less government when I see him replace the Gray lady with the WSJ in his coffee shops.
Should a sex discrimination case against Wal-Mart (WMT) become a class action suit and the retailer eventually lose, the financial implications are unlikely to be ruinous. A Morningstar analyst says that even a $25B award against Wal-Mart wouldn't dramatically affect his firm's valuation of the retailer. [View news story]
We all know the outcome of "class action" lawsuits a windfall for lawyers on both sides, peanuts for those allegedly damaged. I have been a party to several, simply by owning shares of stock when the alleged misrepresentations occurred. Law firms made millions, I get a check for $8.00 or something. I would estimate that 75% of the stocks I have owned have been sued, most of them by the same law firm.
Buffett vs. Wilbur: Two Billionaire Opinions on Investing in Natural Gas [View article]
I don't hear it mentioned often, but along with, cleaner, plentiful, easy and inexpensive conversion for engines from gasoline and diesel to NG, it requires no refining. There's just so many good reasons to bring more NG to the fray. It will operate your ICE long, long before solar or wind, and that's for certain, clean energy on demand with no storage issues (batteries). It's only a matter of time NG demand will go up along with supply. Wilbur gets my vote on this one.
Political Realities, Nuclear Power and Cleantech: Stock Prices Influenced by This Debate [View article]
Just heard of a town in New England, voted in favor of wind farm, now in an uproar over the sound of the turbines when the wind blows, just decided to limit the noise by cutting back on the turbines when the wind is blowing to its optimum for power generation, approx 30 mph, however the whole town says the noise is unbearable.
Political Realities, Nuclear Power and Cleantech: Stock Prices Influenced by This Debate [View article]
I wish I could share your excitement regarding renewable energy, (solar,wind, etc), the stone wall is still standing, there is no storage breakthrough on the horizon that I can find. When the sun isn't shining, if the wind is not blowing, there is NO power. I'm sure in time we will overcome the storage/demand issue. We simply can't pull the plug on fossil fuels until we see a battery burning a light at the end of the coal tunnel.
Apparently Fannie Mae (FNMA.OB) was warned in a 2006 internal report of major flaws in the handling of foreclosures, including the fact that some lawyers 'routinely made' false statements to expedite foreclosures and some mortgage servicers may not have had the legal standing to foreclose. [View news story]
I sit and watch "experts" like yesterday on CNBC, I watch a former D senator blaming the banking industry for the subprime collapse. I waited for someone to counter or at least give an opinion or to question this "banking failure" premise, but no one did. I spent 40 years in Real Estate, dealt with banks, mortgage brokers, underwriters, appraisers, virtually each and every aspect of developing RE, marketing it, financing it, closing it, maintaining it.
The facts: banks and mortgage companies, and the underwriters understand risks, understand return, understand loan defaults, they understand quality loans. The history of lending is underpinned by identifying quality borrowers. There is NO upside to making risky loans to unqualified borrowers! Can I get an agreement on that? If that is the case, then why would a bank or mortgage company, go and seek out unqualified home buyers to sell homes to. Why would they begin after a lending history of 200 years of risk analysis, go and do something opposed to their very prudent culture, and start doing it together everywhere? Answer: It was mandated from WASHINGTON DC. National and regional banking institutions, hired compliance officers, who's job it was to monitor the loan portfolios and see to it that the affordable housing percentage were there. Guidelines were relaxed by HUD, Fannie Mae, and Freddie Mac, ratios were changed, a frantic push to get these percentages of Sub-Prime loans up to compliance, all in the of the social benefit name of universal home owner ship for affordable housing mandates. Banks, mortgage companies and their underwriters knew these loans would in a very short time start to default at a rate much higher than ever before. What do we do? We find a pathway for this paper to change hands, Fannie Mae, says bring it on, we are in on this government push, and you write the business we will relax guidelines and take the paper. Wall street created derivitive bundles, mixed quality loans were bundled for rating purposes, lines were blurred, risks were amplified as this toxic crap was flushed from entity to entity and sold around the world. Every one is happy, land is selling, builders are selling, RE agents are selling, prices are exploding, everyone can buy a home. Washington sees this grand design working, Both parties are celebrating, Bush calls it the ownership generation. Barney Frank, Chris Dodd, and the left see a whole new constituency evolving. Then the defaults begin, each passing day the percentages increase, the entire financial system across the world begins to see actuarial risk analysis turned on it's head. Once again we see the meddling of governments into free markets, the invisible hand is slapping faces around the world. The sacred integrity of prudent lending is forever tarnished, a thriving industry with 200 + years of successful lending is infected with the cancer of busy, incompetent, well meaning politicos. There is serious doubt that the integrity of the industry will ever fully recover. The wise and ancient proverb is once again proven for anyone willing to accept this truth. "you still can't make chicken salad out of chicken shit".
Political Realities, Nuclear Power and Cleantech: Stock Prices Influenced by This Debate [View article]
CMI just announced Tier 4 QSL4 Diesel engine with virtually no emissions. Can't we bring Capstone and Cumming together for the purpose of efficient, clean power generation? This new engine technology complies with all recognized emission standards, including California and the EU. Lets get the drill permits going!
A Nasty Week and a Highly Caffeinated Short [View article]
Silky, I'm once again impressed with your hedges, straddles, etc. Give me a source for some quick overview of these moves. Like sites or publications. You make it obvious to me how little I know, but very intriguing to me.
A Nasty Week and a Highly Caffeinated Short [View article]
Silky, I can tell your plays and understanding of trading and shorting is far more sophisticated than mine. I tend to research and follow the lead of Zacks, Schwab, et al. Occasionally I venture out, absent the knowledge or guidance of my sources, GMCR was one of those "hunches", however my wife and I love coffee, we have freshly ground coffee every morning of our lives. 2 cups each, maybe more on the week-ends, we graduated from grinding our own each am to buying a Capresso, it automatically grinds and brews on a program at 5:30 AM each morning. Approximately every year or 18mo the Capresso requires refurbishing, we have done this for our machine 3 times. Two years ago a friend told us about the Kuerig machine and we tried the coffee. We now have 2 coffee machines in our large gourmet kitchen. We added the kuerig K-cup system for several reasons, my wife has problems with caffine sometimes, while I like dark french roasted brews from Sumatra or Kona. We can brew a pot in our Capresso, of fix a cup of what we indvidually like in our Kuerig. I say to you as coffee drinkers, The K-cups are not instant coffee, this machine is not a fad. Single cup brewing is not new, there have been several others, The Kraft/ Starbucks /Tassimo, a prime example, I mean look at the marketing clout involved in that venture. In the middle of that effort comes Green Mountain, buys Kuerig in 2 years blows every previous single cup brewing system out of the water. I value and respect your knowledge Silky, however I tell you as honestly as I can that to consider K-cups as instant coffee is a serious mistake. Do you really think that Starbucks would damage their quality reputation on a flyer that could be confused with instant coffee. This is real Silky and GMCR is in the cat bird seat for the present.
Neither admitting nor denying guilt, IBM (IBM +1.0%) agrees to pay a $10M fine to settle an SEC charge the company bribed South Korean and Chinese government officials for over a decade. [View news story]
Donald, this isn't about prosecution, so many of these government lawsuits are all about extortion, and there is no case there, they have platoons of bureaucrat lawyers sitting around that can bleed you for extended periods of time, until you concede to a fine with no guilt implied. I am amazed at how many firms I research, that are under investigation or have been fined huge amounts of money that goes into the us treasury. Where does it go and are these lawyers making a commission? The winners are always the attorneys on both sides!
A Nasty Week and a Highly Caffeinated Short [View article]
Interesting than some commenter's seem surprised that consumers would buy a $100 coffee maker instead of a $9.95 model. Millions of coffee drinkers have taste buds that can identify a fine cup of extra bold, Sumatra or 250 others from around the world fine brewed by individual preference 1 cup at a time from GMCR as compared to just making up a big pot from Mr. coffee and leaving on the burner all day. Try this: visit Starbucks and count the number folks standing in line to pay $3.50 a cup. Do a little research fellows, where you been "under a rock"?
Peet's Coffee & Tea (PEET) recently held talks with Starbucks (SBUX) about a potential sale, CNBC reports; shares rose 9.4% shortly before yesterday's close on the initial rumor. A merger would bring a lot of synergies and could double or triple Peet's business in the next two to three years, Stifel Nicolaus says. PEET +3.2% premarket. [View news story]
If SBUX should buy Peet, would SBUX market K-Cups of Peet coffee for use in Keurig brewers and in fact be another coup for GMCR? Just ponder it.
A Nasty Week and a Highly Caffeinated Short [View article]
Silky, I had a totally different experience than you. I have the Keurig brewer, I bought it 2 years ago Christmas (08). My wife and I are quality coffee drinkers, we still have a Capresso, we have enjoyed the fresh ground coffee for probably 5 years, it has been returned for refurbishing 3 times, great machine, great coffee. We started using the K-cup system not all at once but over time we increased our use, usually at times when we did not want to make a full pot of coffee. We love the Keurig, it allows each of us to brew up the coffee that we like, and it's freshly brewed in less than a minute. Christmas a year ago (09) I gave 4 Kuerig systems to family and friends, they all love it, none have had a brewer problem, that they have told us about anyway. I too shopped different stores for displays, spoke with stock clerks, and cashiers about the sales activity of Kuerig brewers, all were positive and indicated it was a hot item, and Kuerigs were moving rapidly off the shelves. Maybe they were in on the conspiracy to move merchandise around and make believe that they were selling when they really were not. I do know that Walmart, Sam's club, Costco, BBBY are selling the brewers and if products don't move these retailers would replace them and reallocate preferred shelf space to faster moving merchandise. As for the K-cups themselves, I have never purchased a K-cup in a retail store, so I can't speak to that, however, I and all the families that I gave them to, do our coffee shopping online at K-cups.com great website, great service, pick the coffee you want and its delivered to your door. I have just recently started paying attention to expiration dates, (based on your comments), have not found any expired coffee. These are the reasons I like the coffee and the stock. Cash flow is indeed an issue, as GMCR has purchased many of their competitors and have had to expand their company in order to accommodate a huge market acceptance of the K-cup system over all their competitors, including the Kraft/Starbucks Tassimo system. The future of GMCR looks good to me. With the placement of each brewer, even using conservative estimates should sell 4 K-cups per day, you do the math. Granted more expensive than Mr. Coffee, but much less expensive than SBUX coffee shop brews.
The FDIC votes for new exemptions on "skin in the game" Dodd-Frank rules for mortgage securities - where banks will have to hold at least 5% of the securities on their books, except for those containing loans with a 20% down payment, or sold to Frannie (FNMA.OB, FMCC.OB) - GSEs that already have conservative requirements. Bankers are pleased and hope for an MBS boost. [View news story]
The FDIC votes for new exemptions on "skin in the game" Dodd-Frank rules for mortgage securities - where banks will have to hold at least 5% of the securities on their books, except for those containing loans with a 20% down payment, or sold to Frannie (FNMA.OB, FMCC.OB) - GSEs that already have conservative requirements. Bankers are pleased and hope for an MBS boost. [View news story]
toxic crap sold around the world. So here we are listening to the same "experts" and politicians who created this mess, blaming it all on the banks and pretending to fix it! Wow, what a mess!
Thin Volume By Charles Payne [View instapost]
Interesting for Starbucks to come down on the side of small business FINALLY, the light comes on for a business man and Obama supporter. I'll buy in to his newfound love for free markets and less government when I see him replace the Gray lady with the WSJ in his coffee shops.
Should a sex discrimination case against Wal-Mart (WMT) become a class action suit and the retailer eventually lose, the financial implications are unlikely to be ruinous. A Morningstar analyst says that even a $25B award against Wal-Mart wouldn't dramatically affect his firm's valuation of the retailer. [View news story]
Buffett vs. Wilbur: Two Billionaire Opinions on Investing in Natural Gas [View article]
Political Realities, Nuclear Power and Cleantech: Stock Prices Influenced by This Debate [View article]
Political Realities, Nuclear Power and Cleantech: Stock Prices Influenced by This Debate [View article]
(solar,wind, etc), the stone wall is still standing, there is no storage breakthrough on the horizon that I can find. When the sun isn't shining, if the wind is not blowing, there is NO power. I'm sure in time we will overcome the storage/demand issue. We simply can't pull the plug on fossil fuels until we see a battery burning a light at the end of the coal tunnel.
Apparently Fannie Mae (FNMA.OB) was warned in a 2006 internal report of major flaws in the handling of foreclosures, including the fact that some lawyers 'routinely made' false statements to expedite foreclosures and some mortgage servicers may not have had the legal standing to foreclose. [View news story]
The facts: banks and mortgage companies, and the underwriters understand risks, understand return, understand loan defaults, they understand quality loans. The history of lending is underpinned by identifying quality borrowers. There is NO upside to making risky loans to unqualified borrowers! Can I get an agreement on that? If that is the case, then why would a bank or mortgage company, go and seek out unqualified home buyers to sell homes to. Why would they begin after a lending history of 200 years of risk analysis, go and do something opposed to their very prudent culture, and start doing it together everywhere? Answer: It was mandated from WASHINGTON DC. National and regional banking institutions, hired compliance officers, who's job it was to monitor the loan portfolios and see to it that the affordable housing percentage were there. Guidelines were relaxed by HUD, Fannie Mae, and Freddie Mac, ratios were changed, a frantic push to get these percentages of Sub-Prime loans up to compliance, all in the of the social benefit name of universal home owner ship for affordable housing mandates. Banks, mortgage companies and their underwriters knew these loans would in a very short time start to default at a rate much higher than ever before. What do we do? We find a pathway for this paper to change hands, Fannie Mae, says bring it on, we are in on this government push, and you write the business we will relax guidelines and take the paper. Wall street created derivitive bundles, mixed quality loans were bundled for rating purposes, lines were blurred, risks were amplified as this toxic crap was flushed from entity to entity and sold around the world. Every one is happy, land is selling, builders are selling, RE agents are selling, prices are exploding, everyone can buy a home. Washington sees this grand design working, Both parties are celebrating, Bush calls it the ownership generation. Barney Frank, Chris Dodd, and the left see a whole new constituency evolving. Then the defaults begin, each passing day the percentages increase, the entire financial system across the world begins to see actuarial risk analysis turned on it's head. Once again we see the meddling of governments into free markets, the invisible hand is slapping faces around the world. The sacred integrity of prudent lending is forever tarnished, a thriving industry with 200 + years of successful lending is infected with the cancer of busy, incompetent, well meaning politicos. There is serious doubt that the integrity of the industry will ever fully recover. The wise and ancient proverb is once again proven for anyone willing to
accept this truth. "you still can't make chicken salad out of chicken shit".
Political Realities, Nuclear Power and Cleantech: Stock Prices Influenced by This Debate [View article]
A Nasty Week and a Highly Caffeinated Short [View article]
Give me a source for some quick overview of these moves. Like sites or publications. You make it obvious to me how little I know, but very intriguing to me.
A Nasty Week and a Highly Caffeinated Short [View article]
The Kraft/ Starbucks /Tassimo, a prime example, I mean look at the marketing clout involved in that venture. In the middle of that effort comes Green Mountain, buys Kuerig in 2 years blows every previous single cup brewing system out of the water. I value and respect your knowledge Silky, however I tell you as honestly as I can that to consider K-cups as instant coffee is a serious mistake. Do you really think that Starbucks would damage their quality reputation on a flyer that could be confused with instant coffee. This is real Silky and GMCR is in the cat bird seat for the present.
Neither admitting nor denying guilt, IBM (IBM +1.0%) agrees to pay a $10M fine to settle an SEC charge the company bribed South Korean and Chinese government officials for over a decade. [View news story]
A Nasty Week and a Highly Caffeinated Short [View article]
Peet's Coffee & Tea (PEET) recently held talks with Starbucks (SBUX) about a potential sale, CNBC reports; shares rose 9.4% shortly before yesterday's close on the initial rumor. A merger would bring a lot of synergies and could double or triple Peet's business in the next two to three years, Stifel Nicolaus says. PEET +3.2% premarket. [View news story]
A Nasty Week and a Highly Caffeinated Short [View article]
These are the reasons I like the coffee and the stock. Cash flow is indeed an issue, as GMCR has purchased many of their competitors and have had to expand their company in order to accommodate a huge market acceptance of the K-cup system over all their competitors, including the Kraft/Starbucks Tassimo system. The future of GMCR looks good to me. With the placement of each brewer, even using conservative estimates should sell 4 K-cups per day, you do the math. Granted more expensive than Mr. Coffee, but much less expensive than SBUX coffee shop brews.