Andrew

Haven't We Heard this Market Song Before?

TMA: Although the senior debt has doubled in value since the new financing went through, it's still probably the better investment over common and preferred. I sold my preferred and am looking elsewhere.

BSC: ARE you kidding on increasing valuation from here!!!
--JPM has already started absorbing the BSC mgmt team and letting go some employees. BTW, the BSC people that JPM is hiring get more JPM stocks to cover for the loss in value of their BSC stocks (not to mention a job when Wall Street is chopping everywhere).
-- Who do you think bought Jimmy Cayne's shares??? JPM owns over 42% of the outstanding stocks now. In the case of any future litigation, you don't need to hold the stock to qualify because the event has already happened.

-- Most of BSC's institutional clients, namely the hedge funds, have left. It's sad in a way.....BSC's coveted hedge fund clients turning against their own primary broker by pulling their money while shorting BSC's stock. May not be collusion, but definitely a lesson for other investment banks.

As for the argument about BSC's book value, my analogy is this:

A guy who makes $100,000/yr buys a $2,000,000 with $20,000 down payment (alarms bell should be ringing). The house is fantastic and in a great neighborhood. The guy loses his job, and misses payment on his house for a few months. The house may still be worth $2,000,000, but how much of it belongs to the guy? The answer is less than zero, because even if he sells his house for $2,000,000, he doesn't have enough equity to pay for the selling costs. His best option is to take the $1,000 cash from the mortgage holder and vacate the home without trashing it.

The cruel joke here is the eery similarity between Wall Street and Main Street with regard of debt leverage.....one of the basic lessons in Econ 101.