mallarde

Ten Most Prominent Underperformers in Corporate America

Why should we be offended when you declare that someone we have never met and who appears to be a bumbling fool on television is smarter than us?


On Nov 14 10:32 AM bobbybutte wrote:

> as aperson who allocates capital for aliving I dont see BAC as being
> an underachiever
>
> hedge fund guru john paulson has taken a huge stake and no offense
> but he is much smarter than anyone here who posts

The Case for Shorting Bank of America

A case for shorting the banks: the main driver of their earnings growth -- mortgages -- is gone. Sure, they can speculate in the futures markets, etc., but how can they grow as Wall Street expects? Merely surviving will not be enough to sustain such weighty valuations.

If the banks return to their traditional role as lenders and deposit-holders, their earnings will not have the growth that gets lofty valuations.

I am short WFC (very small position), and admit I know less about this sector than about everyone that posted above. So please have at it.

Goldman's Success: Put Down Those Pitchforks

I am waiting for someone to explain what Goldman, et al. do that cannot be duplicated by other up and coming banks. I can understand the importance of having investment banks, generally. I can also -- perhaps -- understand the importance of having banks that can securitize debt even if this market must shrink.

Still, I can not figure out how GM or Chrysler going under could not be more disruptive than these New York financial firms going under. All these absurd debt instruments have only enriched financial firms; they have not benefited the economy.

Number of U.S. Homes With Negative Equity Is Stunning

In California, where a large portion of the population lives, construction jobs are performed by Mexicans and other illegal laborers. Will anyone FINALLY (excuse the all-caps) talk about that???

If Americans cannot earn decent wages, where are we? Not everyone has the ability or education to invent or work behind a desk.


On Nov 12 05:39 PM E Thomas St wrote:

> Say goodbye to construction jobs. Say hello to higher unemployment.
>

Number of U.S. Homes With Negative Equity Is Stunning

cadoggy, I strongly disagree with you. What few in the media seem to grasp is that the problem is not so much that home values are dropping. Instead, it is that borrowers took out loans they could not repay UNLESS their gamble on their pricey house paid off -- and values continued to increase.

Remember, this crises started before the economy hit a wall. These people never could afford to pay off their loans without a windfall of increased home equity.

I said it before here: these homebuyers were like options traders. Their purchase of a house was like a call option. Because the stock price -- the home value -- did not go up but went down they will not exercise their stock option.

Any inconvenience or even disruption to the lives of families that gambled on housing is of their own making. The government cannot remove or even attempt to remove the moral hazard inherent in all this. That would be very dangerous.

Back Room Deal? - Cramer's Mad Money (10/10/08)

Give the guy a break. He "changed his mind in a day" after the biggest point swing in the history of the market. Of course, he is going to give different advice after such a big drop.

Personally, I like his analysis compared to the panels of talking heads that are afraid to take a position on anything and are all trying to sell their picks that they their clients already bought.

Banking on Trust: What Builds Loyalty?

I agree that banks have completely neglected certain aspects of the customer experience. I've had very bad experiences with both Bank of America and Wachovia in terms of penalties for very small account deficits.

Bank of America in particular has really atrocious customer service in some of its branches and phone services.

Point of No Return or Perfect Buying Opportunity?

Who cares about hitting the top again? If it recovers half the loss you double your investment in, perhaps, 2 years or so.

I have ridden WB down from an average investment of $27 or so. I hold on because I see the stock recovering to the low-$30s, in a good scenario. This would be a great outcome for me after taking a large hit.

The question in my mind for WB is -- after you write-off the bad loans (taking a worst case scenario view), is that company a good value based on its core business? What are the cash flows of its core business? They seem to be growing at a healthy pace. The brand is strong and they have retail outlets all over the country.

Hitting the Reset Button On Home Mortgages

Sounds sort of like giving citizenship to those that gamed the system by running across the border, just like these borrowers gamed the system by taking loans they knew they could not afford unless the housing market went their way.

We already subsidized their real estate speculation by giving them tax deductions on their mortgage interest. Now we have to take their losses, too? Outrageous.