A potential new legal front is opened against the banks as the U.S. sues Bank of America (BAC), seeking at least $1B in damages for allegedly misrepresenting the quality of home loans it (through its Countrywide unit) sold to Fannie and Freddie. [View news story]
Is it not also the responsibility of the management of FNMA, GNMA,etc to analyze the loan portfolios that were purchased to assure that they fit their criteria? Also, didn't these portfolios receive investment grade rating from S&P and Moody's? Are they also being sued by the gov't?
Counterevidence Supporting A Positive Demographic Impact For Stocks [View article]
Not sure I understand the relationship between ROE and demographics. ROE is a function of margins, asset turnover and financial leverage. Perhaps aging population could affect turnover, but I'm hard pressed to come up with anything else in the ROE equation that has a relationship to aging population. Another topic of related discussion is what will happen when the FED is forced to raise rates in order to fight inflation and bond prices fall. Many investors will have to facce the hard reality that one can lose $ in bonds also. Especially when they're forced to sell their bonds in order to meet health care expenditures, etc..
Old Republic International's Q2 2012 And Remaining Uncertainty [View article]
All good comments on ORI. However, I thought that the major problem in the general insurance sector in the 2Q was the impact of health care cost on workers comp. Granted that health care costs will continue to rise over time, but the Q/Q increase should not be that material, barring some statistical anomaly. Assuming the general insurance line gets back on track, normalized earnings should easily exceed $1.00 per share.
The 30 bp decline in Bank of America's (BAC) net interest margin represents $1.27B in lost quarterly earnings power, says Josh Steiner, a "hit (that) is recurring, not one time." This deterioration in bank's underlying business may help explain the sharp decline in the stock (-4% today, -4.8% yesterday) despite a headline beat on earnings thanks to a large reserve release. [View news story]
As implied, NIM could continue to shrink, particularly if rates stay flat or decline further and economic growth continues to slow or actually declines. If economic growth never recovers, then we have much larger problems to concern ourselves with, like what will we do for food. I assume that at some point over the next few years economic growth will begin to recover and thus interest rates will begin to rise. Given this, the NIM will begin to improve. The question is one of timing and it should be obvious from my remarks that I do not believe in market timing or in forecasts for the economy. Years of experience has taught me that even well educated economists cannot predict more than a few months out with any degree of accuracy.
The 30 bp decline in Bank of America's (BAC) net interest margin represents $1.27B in lost quarterly earnings power, says Josh Steiner, a "hit (that) is recurring, not one time." This deterioration in bank's underlying business may help explain the sharp decline in the stock (-4% today, -4.8% yesterday) despite a headline beat on earnings thanks to a large reserve release. [View news story]
This is a short term view of earnings. Yes, they lose this as higher earning assets run off, but rates won't continue down forever. When rates begin to rise, hihger earning assets will be added which will help to raise the NIM. Also, BAC is shrinking their debt, which also reduces assets and earning power.
Gannett: Where Buffett Meets Zillow [View article]
Why wouldn't GCI be a good privatization candidate? One may be able to buy all the stock at $17 to $18 and use the $0.80 dividend to at lest partially finance the acquisition. Free cash flow could finance the rest. Wait a few years and pieces of GCI could be resold in an IPO, etc.
A potential new legal front is opened against the banks as the U.S. sues Bank of America (BAC), seeking at least $1B in damages for allegedly misrepresenting the quality of home loans it (through its Countrywide unit) sold to Fannie and Freddie. [View news story]
PNC Financial: Extraordinarily Well-Run Bank Selling At A Discount [View article]
Counterevidence Supporting A Positive Demographic Impact For Stocks [View article]
Old Republic International's Q2 2012 And Remaining Uncertainty [View article]
The 30 bp decline in Bank of America's (BAC) net interest margin represents $1.27B in lost quarterly earnings power, says Josh Steiner, a "hit (that) is recurring, not one time." This deterioration in bank's underlying business may help explain the sharp decline in the stock (-4% today, -4.8% yesterday) despite a headline beat on earnings thanks to a large reserve release. [View news story]
The 30 bp decline in Bank of America's (BAC) net interest margin represents $1.27B in lost quarterly earnings power, says Josh Steiner, a "hit (that) is recurring, not one time." This deterioration in bank's underlying business may help explain the sharp decline in the stock (-4% today, -4.8% yesterday) despite a headline beat on earnings thanks to a large reserve release. [View news story]
Gannett: Where Buffett Meets Zillow [View article]