On the face of it, Nationwide’s earnings report looks extremely good: 15% Tier 1 Capital, Pre-tax profit of nearly £400 million. Given this financial institution’s leverage to the residential housing market, their results stand in stark contrast to the likes of Chelsea, which was downgraded by Fitch last week with four other U.K. building societies. [...]
financial statements's tag archives
U.K.’s Nationwide releases robust earnings and capital report
May
How refinancing helps the likes of Bank of America and Wells Fargo
May
Earlier today I posted an article about how accounting was favourable to banks in that it could help them weather the storm and appear well-capitalized until a recovery is underway. Afterwards, a buoyant economy would increase earnings enough to allow the massive writedowns that need to flow through the income statement to be taken in [...]
920 views
JPMorgan’s $29 Billion windfall
May
The following Bloomberg article points out why I have repeatedly argued that banks will be earning a lot of money, Meredith Whitney’s counter-arguments notwithstanding. It also points out why the likes of John Hempton believe that the FDIC ‘stole’ Washington Mutual from shareholders and awarded it to JPMorgan, a view I have not supported (hat [...]
955 views
What the stress tests reveal about Obama’s thinking on banks
May
Kyle, a long-time reader, recently asked why I think mark-to-market accounting actually matters. After alI, savvy investors know that accounting does not necessarily change cash flows. I think his question has a lot to do with not just accounting, but also with the stress tests.
Kyle writes:
My point is that it has really NOT changed, and [...]
359 views
What Home-Loan Banks reveal about the effects of mark-to-market
May
Back on the 16th, I posted a link to a Wall Street Journal article by James Hagerty which detailed how the Federal Home Loan Banks were able to prevent asset writedowns because of guideline changes to mark-to-market accounting. I think the implications will be significant. Here is what the article said (emphasis added):
A change in [...]
Bill Miller and Meredith Whitney: The Bull and the Bear
May
The Bear here is Meredith Whitney, who says that bank stocks will return to negative earnings in the second quarter. That’s a big and very specific call that is very much out of line with the consensus. In an interview with Maria Bartiromo, Whitney says she did foresee the recent rally in financials, but that [...]
610 views
Meredith Whitney seems onboard with the fake recovery
May
Below is a video of Meredith Whitney talking to Maria Bartiromo earlier today on CNBC (hat tip Calculated Risk). In the video she suggests that banks might be able to beat earnings estimates for another one or two quarters before the lack of earnings power from deleveraging and the lack of the securitized business model [...]
Fannie Mae: a bottomless pit for U.S. taxpayers
May
Bloomberg has the goods on Fannie and they’re not good. Fannie’s regulator wants $19 billion from the U.S. government because the firm has negative capital. Fannie Mae had $23.2 billion in losses last quarter alone. And it says losses in 2009 will be worse than 2008. Nice.
Here’s the money quote: “Fannie says it does [...]
HRE: defusing the German financial time bomb
Apr
The first bank nationalization in German history is about to take place. At issue is Hypo Real Estate (HRE), a troubled Munich-based company that lends to commercial property developers and to build offices, hotels, roads, airports, you name it.
This issue has been building for nearly 7 months. Back in late September, just after Lehman [...]
257 views
Bof A’s MAC clause was as porous as swiss cheese
Apr
Over the past few days, I have written two posts regarding the increasingly acrimonious sparring surrounding Bank of America’s acquisition of Merrill Lynch.
The horrible self-dealing of Ken Lewis and the principal-agent problem
BofA CEO Lewis investigated by SEC
BofA saga continues as John Thain calls Lewis a liar
The latest news is stunning: Bank of America’s MAC [...]
2,060 views
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