Hey, California probably has a high enough chance of defaulting this year as Greece if not higher. After all, they technically defaulted last year. And their economy is so much bigger and is in the US.
The author is right if he is trying to point out that there are even greater problems at home no one is talking about yet. Forget Dubai World, think about Californication.
Regional Banks: Toxic Loans Leading to More Toxic Problems [View article]
Don't worry the FDIC will just keep shuttering banks and dole out the cash for the losses. Printing money is second nature nowadays. Don't expect this to derail anything when the government is more than willing to pay 10s of billions just keeping Fannie and Freddie alive. Just don't expect your local bank to be very helpful when you or your business ever needs a loan. Thay are likely to say, "Sorry sir/madam the Federal reserve that we borrowed money at 0% interest needs it and pays us 1-2% interest without risk so we can use it to pay our bonuses. Why in Gods green earth would we loan money that means free profit without risk for us to someone like you?"
The argument Citibank only needs $5.5 billion in capital is laughable. It just underscores that the test didn't take any off balance sheet accounting and derivatives into account. The Treasury and government regulatory agencies are still living in a 1990's mindset.
No progress can be made until they recognize and tackle modern day accounting and financial instruments. Closing your eyes and playing dumb is a recipe for disaster. You would have thought they would have noticed this after the 2008 mortgage CDS/CDO driven meltdown. I guess it wasn't a big enough event for them to care about.
Nobody Knows What Bank Stocks Are Really Worth [View article]
The problem analysts are having is the same the owners of banks have, that is management obscures owners rights to know what positions they have. This is compounded by the fact analsts can't compare past performance to current performance because changes in FASB rules, bailouts with unknown obligations, and weird transactions like AIG's are further clouding the results.
The fact Wells Fargo's reporting was unclear and nebulous about where its earnings actually came from and it's loan loss reserves sank the stock even though "earnings" were positive shows the complete lack of financial credibility banks have made their financial reports. The more they ask for black boxes and exceptions the worse their plight becomes. If they didn't get what they asked for they would be better off.
In the end "earnings" must mean earnings, not cute ways of changing the value of your unsellable assets. When will bank management figure this out. Apparently never since the government is helping incompetent management stay in power.
Bankruptcy has never had a poster child extolling its virtues over preventing it as much as looking at present day financial companies. Present day management and board members must go. Their lies are choking up the whole system.
Stocks with the Most Buy and Sell Recommendations [View article]
The biggest buy ratings always go to the largest cap companies, the companies most likely to do a stock, bond, or other corporate finance deal, and companies that have a history of good prior performance.
It shows nothing asides from the general behavior of analysts. We can draw the following conclusions about them 1) they like money and don't mind licking corporate boot to get it, 2) they are intimately tied in with corporate finance even though there is suppose to be a Chinese wall separating them, 3) they rely on companies to feed them information thus can't afford to let big companies be dissatisfied with them, 4) they won't stick their necks out to like unfavorable stocks, 5) they rely on herd mentality, 6) they tend to follow trend blindly except when the trend changes (then they like the new trend and claim they are brilliant for following it over the old trend).
Show me a guy who depends 100% on analyst views and I'll show you a guy who underperforms the market 100% of the time.
GD: Oh sorry, it will bore readers to make a list of all those sucking from the trough. And yes BlueOkie, it astounds me too. What is even funnier is that the Republican's not Democrats were the ones to oppose the bill the first time around. Congress wether Democrat or Republican have a great way of messing things up every time.
You could say you can't fault the players you have to fault the system. But the system should be that Congress has the responsibility to grant funding, allocate the budget, and coin money. Well obviously they don't want to control the money supply (too much work). And obviously, they have a hard time managing any budget at all, even a deficit one. So slap a funding bill infront of them and they can feel proud every time that they got to actually do some good by giving away something to someone like Santa Claus.
You would think that Congress would learn how to draft a bill that stipulates exactly how it's will and assets are to be handled by now. They have had over 200 years to learn. The sad fact is, apparently none of them want the responsibility given them. They prefer to give it to others. I suppose that blows a lot of holes in representational democracy and checks and balances. In fact, I'd wager to say, that is probably the greatest root of what is eating away at the foundations of economic stability, prosperity, and civil liberties.
We can argue all we want about what to do once we figure out where the buck stops. Right now the buck stops with Paulson, (former Goldman CDS pawnbroker and great crasher of the mortgage market and AIG) and Bernake (wormtongue who condescends the Congress every day and says he's stimulating the market when in fact he is encouraging deflation with a 0% rate policy, giving interest to get banks to park money at the Fed, and raising cash to backstop his banker pal's losses which are essentially his board of directors and clients.
The Illusion of U.S. Dollar Safety [View article]
The author is right if he is trying to point out that there are even greater problems at home no one is talking about yet. Forget Dubai World, think about Californication.
Regional Banks: Toxic Loans Leading to More Toxic Problems [View article]
Bank Stress Test: The Cheat Sheet [View article]
No progress can be made until they recognize and tackle modern day accounting and financial instruments. Closing your eyes and playing dumb is a recipe for disaster. You would have thought they would have noticed this after the 2008 mortgage CDS/CDO driven meltdown. I guess it wasn't a big enough event for them to care about.
Nobody Knows What Bank Stocks Are Really Worth [View article]
The fact Wells Fargo's reporting was unclear and nebulous about where its earnings actually came from and it's loan loss reserves sank the stock even though "earnings" were positive shows the complete lack of financial credibility banks have made their financial reports. The more they ask for black boxes and exceptions the worse their plight becomes. If they didn't get what they asked for they would be better off.
In the end "earnings" must mean earnings, not cute ways of changing the value of your unsellable assets. When will bank management figure this out. Apparently never since the government is helping incompetent management stay in power.
Bankruptcy has never had a poster child extolling its virtues over preventing it as much as looking at present day financial companies. Present day management and board members must go. Their lies are choking up the whole system.
Stocks with the Most Buy and Sell Recommendations [View article]
It shows nothing asides from the general behavior of analysts. We can draw the following conclusions about them 1) they like money and don't mind licking corporate boot to get it, 2) they are intimately tied in with corporate finance even though there is suppose to be a Chinese wall separating them, 3) they rely on companies to feed them information thus can't afford to let big companies be dissatisfied with them, 4) they won't stick their necks out to like unfavorable stocks, 5) they rely on herd mentality, 6) they tend to follow trend blindly except when the trend changes (then they like the new trend and claim they are brilliant for following it over the old trend).
Show me a guy who depends 100% on analyst views and I'll show you a guy who underperforms the market 100% of the time.
The Banker's Choice [View article]
You could say you can't fault the players you have to fault the system. But the system should be that Congress has the responsibility to grant funding, allocate the budget, and coin money. Well obviously they don't want to control the money supply (too much work). And obviously, they have a hard time managing any budget at all, even a deficit one. So slap a funding bill infront of them and they can feel proud every time that they got to actually do some good by giving away something to someone like Santa Claus.
To them Christmas is never over.
The Banker's Choice [View article]
We can argue all we want about what to do once we figure out where the buck stops. Right now the buck stops with Paulson, (former Goldman CDS pawnbroker and great crasher of the mortgage market and AIG) and Bernake (wormtongue who condescends the Congress every day and says he's stimulating the market when in fact he is encouraging deflation with a 0% rate policy, giving interest to get banks to park money at the Fed, and raising cash to backstop his banker pal's losses which are essentially his board of directors and clients.
I'm sure out founding fathers would be proud...