User 68127

Merrill's Muddled Analysis: Another Reason I'm Bullish on Financials

Tom "Bagdhad Bob" Brown and Bill Miller should get together for their own "I'm smart and the market is stupid" convention...

Merrill's Muddled Analysis: Another Reason I'm Bullish on Financials

Merideth Whitney has been right on the financial stocks the whole time Tom Brown has been wrong.

Plus, she is smarter and better looking. Probably richer too, if Tom has been "eating his own cooking" in his long-only hedge fund.

It is no wonder he is jealous.

Reviewing the John Thain Saga

Hellooo, Newman! Thain claims that everything he said "at the time" was true.

Suppose someone promised not to dump a bucket of water on your head. Then a minute later, they did! Suppose they said, "well, circumstances have changed. At the time that I said it, it was true!" Would you consider this to be a reliable or trustworthy person?

Market Analysis: Merrill Lynch and the Economy In Focus

Thain argues that everything he previously said was true "at the time." So...if you do in fact need capital a few days or weeks later, it was not a falsehood?

Thain is either not truthful or not competent. His defense shows that he prefers to be viewed as incompetent rather than dishonest. (Actually, he appears to be both!)

Financials: The Dangers of Zero Weight

Ultraman,

If there are home equity loans or piggyback loans in the portfolio, they are probably worth zero. Simply put, if the borrower is underwater on their home, the first lien takes a loss but gets whatever they can for the property and the second lien gets nothing.

Also, what if the appraisal was unrealistically or fraudulently high? In that case, even a first lien could get next to nothing. Are you beginning to get the idea?

Roger: a ten-fold move in C would imply $180/sh some time in the next ten years. Of course, with a lower earnings base now, there is no guarantee that C will even reach its prior peak in EPS within ten years...much less have the kind of PE expansion that would be necessary to reach this level...

Bottom in Financials - Sounds Like a Broken Record

MER had PEAK EPS of $7.26/sh in 2006. Now let's assume 38% dilution. You are now down to about $5.25/sh. From PEAK EPS, which, or course, are higher than normal. Before subtracting all the bogus/fraudulent business that has gone away and will likely never return. Before discounting for the weak economy. Before adding in the effect of higher borrowing costs. Before subtracting the earnings of businesses that have been sold. And is this ALL of the writedowns?