Post Tagged with: "financial statements"
JPMorgan’s $29 Billion windfall
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
What the stress tests reveal about Obama’s thinking on banks
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
What Home-Loan Banks reveal about the effects of mark-to-market
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
Bill Miller and Meredith Whitney: The Bull and the Bear
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
Meredith Whitney seems onboard with the fake recovery
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
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
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
Bof A’s MAC clause was as porous as swiss cheese
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
German banks loaded with 816 billion in toxic paper
On Friday, the German daily Süddeutsche Zeitung (SZ) leaked a bombshell – a confidential report by Bafin, the Federal Financial Supervisory Authority, found that German banks were sitting on over 800 billion euros in toxic assets. Just three months ago, the reports coming out suggested the problem was only half as large, 400 billion euros
The horrible self-dealing of Ken Lewis and the principal-agent problem
I don’t much like Ken Lewis. It should be fairly obvious to everyone that he is a man who has only his own interests at heart. But, his revelation that BofA bought Merrill Lynch for the agreed-upon September price, despite Merrill’s having an additional $7 billion in losses is grounds for legal action. Let’s review
BofA CEO Lewis investigated by SEC
Ken Lewis, the embattled CEO of Bank of America, has recently admitted to being coerced by U.S. Government officials to consummate the Merrill Lynch acquisition. The problem for Lewis is he may have neglected his fiduciary responsibility to shareholders in bowing to this pressure. The SEC is now investigating. See the video below for details
Pre-payments are reducing value of mortgage-backed securities
If you read my recent post on How big banks earned so much money this quarter you would see that much of the income at Wells, JPMorgan, US Bank and others came from refinancing old mortgages. While this may be a boon to present income, it is very much a problem for the legacy mortgage-backed