Ameircan Air Cancels 1,000 Flights from Jet Checks (These airline issues make it somewhat difficult if not impossible for the FDIC to rapidly fly to bank closings. The FDIC's Dallas office (DFW airport)bank cloisng teams are responsbile for the entire nation plus Puerto Rico. They can always charter a plane and have done so in the past when a quickie was needed but this is more cause for concern should things unravel with the banks.) American Cancels 1,100 More Flights for Jet Checks (Update8) - Bloomberg.com
It'll be good to get all these writedowns behind these companies so we can move on. The most important thing to realize is that this bad news is already priced in. You'd better load up on them now or get priced out of the market forever!
Merril and C on the day BEFORE options Ex. hmmmmmm
Crooks begets crooks.....
I'm sure there is some other connection to that date that will allow the market to ignore the newest declaration of how fast capital can be destroyed with a smiling face.
Didn't S&P say two weeks ago that the worst was behind us? That write downs have more or less ended? In fact, I believe the market had a huge run up that day. To paraphrase the old PR axiom, It sounds like any news is good news to the market, no matter how large the write down.
Not to be outdone on the banking gone wild stories, but Goldman Sachs now sports more assets on their Level III fantasy accounting than THE ENTIRE MARKET CAP OF THE FIRM! Good times just keep on rolling on. Should be a 300 point up today today or tomorrow.
Now, we're all just waiting for nonperforming CRE loans to start ruining the financials of banks and hedge and pension funds. A couple months, maybe?
Unless there's major capital flight, or a tanking dollar, or some other black swan.
But of course, we all 'take pleasure in the problems of others' so either way, it's entertainment.
To me the Wright Model B is the one Orville and Wilber sold to the army air corps -- the one with the rudders in back.
What is it in the financial context?
I just want everyone to be aware that the savers are indeed bailing out the banks on a daily basis.
The fed is purposely keeping interest rates way below the level of inflation to preserve asset values and assist banks in recapitalizing via a steep yield curve.
I'm SO glad that all those "smart" bankers received such HUGE bonuses over the last 3 years.
Goldman Sachs now sports more assets on their Level III fantasy accounting than THE ENTIRE MARKET CAP OF THE FIRM!
How else did you expect them to hand out the biggest bonuses ever? Anyone holding this pig ought to have their head examined. The sell signal was awhile ago when they first said what was in Level III.
On the plus side, we're getting closer to the 1.2T that is probably endgame here in impairments. They'll just bleed it out over the next couple of quarters.
And I concur on the stock market. P/E and Forward Earnings don't justify current prices at all, especially in financials.
No Angry, the real danger is in people like anon above that don't know "whom" is the object of the preposition not "who". They're the ones that bought all the McMansions and Hummers with no money down.
I guess that P/E ratios are now "Marked to Model" and not to the market. I mean why gauge stocks by P/E's calculated by the actual earnings when those earnings were the result of "stressed" market conditions? You must be a rogue short trader trying to kill healthy and happy banks for personal gain!
Much is/has been written about the condition of financial companies but I don't recall GE being mentioned although GE Capital is about half the company and the stock price seems to move in sympathy with financials. Still, no visits to the confessional that I am aware of.
My question is: Should GE be considered a partial financial stock or is GE Capital a different beast from Citi, JPM, and the rest of the usual suspects?
I have a 15% asset allocation in GE left over from prior employment.
OT- CR any way to tweak the layout for mobile users? With google reader I can cleanly read the posts, but to use the site itself you have to scroll through everything in both sidebars before reaching the post and comment tag. And I do love the alternately insightful/ignorant/incoherent(doc in his myriad forms)/infuriating comments.
JJL I have this nifty piece of software where you can type in a ticker and it plots historical data and then runs trend and projection lines given the most recent stats. You can even choose what method you want to use to extrapolate. Notice what I just said. It seems that current prices are based on those trend lines which, as we now know, are crap. The software lets you enter forward earnings manually which, of course, recomputes the data and lines for you in real time, giving you an approximate share price based on the fundamental data you've changed.
That is how I come up with what I think is going to happen, because I can group these and make indicies based on my projections for a basket group of companies. And I can also do it by sector.
I've said in previous posts where I think the DOW is heading for a low.
It seems that every distressed bricks and mortar retailer has activist investors clamoring for said retailer to "unlock value" by selling CRE.
In this market, are big box outlets likely to fetch much of a price? Walmart has curbed its expansionist appetite, is Costco really that hungry for old Sears/Circuit City stores?
At what point does the walgreens/CVS/OSCO financing get cut off? Do I really need every intersection in town to have 3 drug stores & a vacant gas station?
Dow 11,200? That practically makes you a bull. We would have been there already absent emergency rate cuts, new fed lending rules, historic liquidity measures and a 150B stimulus plan.
I gave up targets a long time ago. A precipitous drop in the near future is definitely possible.
In any event, I believe the most likely outcome is meager returns, say 5% annually, over the next 5 to 10 years. Definitely not worth the risk in my view given the alternatives.
No Angry, the real danger is in people like anon above that don't know "whom" is the object of the preposition not "who". They're the ones that bought all the McMansions and Hummers with no money down.
ipodius | 04.09.08 - 2:39 pm
"...Aggregate losses are on the order of $565 billion for U.S. residential loans (nonprime and prime) and securities and $240 billion on commercial real estate securities..."
CRE losses less than half the size of residential, looks like. If this is really the way it shakes out, that would account for why CRE hasn't responded as it "should have" given the problems in residential: Because the problem is heavily weighted towards residential.
And it's only April 9th! Gonna be a long ass year dudes.
A series of small busts, time after time. Does it make a big bust? Bust...rally...fade...rally. Bizzare.
Reminds me of a finishing school for wealthy Easternseaboard young ladies.
I hope I'm not first, but someday, I do hope to get a hat tip. Now that would really be something.
Ameircan Air Cancels 1,000 Flights from Jet Checks (These airline issues make it somewhat difficult if not impossible for the FDIC to rapidly fly to bank closings. The FDIC's Dallas office (DFW airport)bank cloisng teams are responsbile for the entire nation plus Puerto Rico. They can always charter a plane and have done so in the past when a quickie was needed but this is more cause for concern should things unravel with the banks.)
American Cancels 1,100 More Flights for Jet Checks (Update8) - Bloomberg.com
Man, that 'plausibly projected based on proferred perspectives' (of writedowns) P/E ratio keeps going up and up.
It is going to be a nice stock market drop, someday soon.
As many will recall, Merrill owns 50% of Blackrock and of course Blackrock is looking after Bear Stearns cash @ Treasury/Fed...
Got capital?
When does this end??
The worst part of this whole "write down" banking mess is that most here saw it coming a mile away.
In the end, it was all just an employee bonus scheme.
Ah, the CRE shoe starts to drop....
MiTurn
A circle has never a beginning nor an end.
It'll be good to get all these writedowns behind these companies so we can move on. The most important thing to realize is that this bad news is already priced in. You'd better load up on them now or get priced out of the market forever!
ever = neither
I can't understand why the market isn't rallying on the news.
Merril and C on the day BEFORE options Ex. hmmmmmm
Crooks begets crooks.....
I'm sure there is some other connection to that date that will allow the market to ignore the newest declaration of how fast capital can be destroyed with a smiling face.
Ciao
MS
Nothing to see here. Please disperse.
Wachovia Bank has net tangible assets of 49B. It also has good will assets of 31B, most of which is a mortgage lender from California. Get real.
How long can this turd stay afloat?
Aw, man. Just when I thought the stock market will go down today.
Now there will be a 100 pt rally.
Didn't S&P say two weeks ago that the worst was behind us? That write downs have more or less ended? In fact, I believe the market had a huge run up that day. To paraphrase the old PR axiom, It sounds like any news is good news to the market, no matter how large the write down.
What - it's just a flesh wound!
6.5 billion? A mere bag of shells. The perfect market had priced in a loss of 65 billion, so look out Wright Model B, we're goin to the moon!
Not to be outdone on the banking gone wild stories, but Goldman Sachs now sports more assets on their Level III fantasy accounting than THE ENTIRE MARKET CAP OF THE FIRM! Good times just keep on rolling on. Should be a 300 point up today today or tomorrow.
"Hey we're not birds, we're a jugband!
"It sounds like any news is good news to the market."
The only thing holding this dead man up is commodity related. Give'em another cut Benny that'll help.
Now, we're all just waiting for nonperforming CRE loans to start ruining the financials of banks and hedge and pension funds. A couple months, maybe?
Unless there's major capital flight, or a tanking dollar, or some other black swan.
But of course, we all 'take pleasure in the problems of others' so either way, it's entertainment.
MERde!
(Sorry, I never get tired of that.)
To me the Wright Model B is the one Orville and Wilber sold to the army air corps -- the one with the rudders in back.
What is it in the financial context?
MERde comment was me, of course.
Stupid Firefox 3 beta forgot all my settings.
Can the schmucks/shysters/shylocks hold back the rising red tide in the stock market?
Today is going to be an expensive day for them, from a futures purchases perspective.
Go, red, go!
I just want everyone to be aware that the savers are indeed bailing out the banks on a daily basis.
The fed is purposely keeping interest rates way below the level of inflation to preserve asset values and assist banks in recapitalizing via a steep yield curve.
I'm SO glad that all those "smart" bankers received such HUGE bonuses over the last 3 years.
Goldman Sachs now sports more assets on their Level III fantasy accounting than THE ENTIRE MARKET CAP OF THE FIRM!
How else did you expect them to hand out the biggest bonuses ever? Anyone holding this pig ought to have their head examined. The sell signal was awhile ago when they first said what was in Level III.
On the plus side, we're getting closer to the 1.2T that is probably endgame here in impairments. They'll just bleed it out over the next couple of quarters.
And I concur on the stock market. P/E and Forward Earnings don't justify current prices at all, especially in financials.
Expensive for who?
Certainly Us since it's our money they are playing with. we are all paying the price for this crap.....
Food is the master link in the financial chain. Go ahead Mr. Bernanke. I double dog dare you to keep inflating the price of food.
Inflation is the real danger. Deflation in asset prices is only the destruction of ficticious wealth. Inflation destroys everyday purchasing power.
The asset inflation model is broken. Attempts to re-inflate assets will ignite inflation.
Question:
ML is the 1st to start talking about CRE, but I thought that most retail banks had limited exposure to CRE due to the last bust.
would this be a 2nd order effect for retail banks?
I know that ML is swimming naked in FLA for CRE? ust wonder who else is in toto.
Inflation is the real danger.
No Angry, the real danger is in people like anon above that don't know "whom" is the object of the preposition not "who". They're the ones that bought all the McMansions and Hummers with no money down.
"Note the shift from mortgage related write-downs to other credit issues, like LBO debt, consumer debt, and commercial real estate (CRE)."
In other words, "it's contained".
I just don't see free trade & floating rate currencies as a good fit.
Currency wars - the newest hit X-box game.
oh teh writedownz! i can has teh authurs andersenz?
Ipodius,
I guess that P/E ratios are now "Marked to Model" and not to the market. I mean why gauge stocks by P/E's calculated by the actual earnings when those earnings were the result of "stressed" market conditions? You must be a rogue short trader trying to kill healthy and happy banks for personal gain!
AS,
Rather, further fan the flames...
Oil cracks $112...the natives are going to get restless very soon...
Slightly OT:
Much is/has been written about the condition of financial companies but I don't recall GE being mentioned although GE Capital is about half the company and the stock price seems to move in sympathy with financials. Still, no visits to the confessional that I am aware of.
My question is: Should GE be considered a partial financial stock or is GE Capital a different beast from Citi, JPM, and the rest of the usual suspects?
I have a 15% asset allocation in GE left over from prior employment.
Jim
Larry Summers - WE ARE IN A RECESSION (marketwatch.com)
Ipodius,
I often end my sentences with prepositions irregardless. But I ain't got no cooth.
Oh yeah, and penultimate is like almost the best.
OT- CR any way to tweak the layout for mobile users? With google reader I can cleanly read the posts, but to use the site itself you have to scroll through everything in both sidebars before reaching the post and comment tag. And I do love the alternately insightful/ignorant/incoherent(doc in his myriad forms)/infuriating comments.
"Even owning gold will not protect you from this."
Safe Haven | Who Will Bail Out the FED?
How much time do we have before the bulk of "interest only's" turn into full P&I payments and the option arms hit their maximum neg am?
It's gonna feel like the closet fell, not another shoe.
A-: 'Expensive for who? Certainly us since it's our money they are playing with. we are all paying the price for this crap...'
A-, you better make money while you can (short SSO or the financials). Otherwise, shame on you.
And, sharpen your pitchfork.
Anonymous | 04.09.08 - 2:46 pm
Link doesn't seem to work.
A-, you better make money while you can (short SSO or the financials). Otherwise, shame on you.
Why short SSO instead of simply buying SDS?
Otherwise, I agree with you.
JJL I have this nifty piece of software where you can type in a ticker and it plots historical data and then runs trend and projection lines given the most recent stats. You can even choose what method you want to use to extrapolate. Notice what I just said. It seems that current prices are based on those trend lines which, as we now know, are crap. The software lets you enter forward earnings manually which, of course, recomputes the data and lines for you in real time, giving you an approximate share price based on the fundamental data you've changed.
That is how I come up with what I think is going to happen, because I can group these and make indicies based on my projections for a basket group of companies. And I can also do it by sector.
I've said in previous posts where I think the DOW is heading for a low.
Ipodius,
Can I get that software or is it top seceret like the WOPR computer? I missed your DOW prediction, care to repeat?
NCJim,
GE is a financial company that has a productive manufacturing base to fall back on rather than an nonproductive "asset" base that most banks have.
In theory they didn't have the ability to leverage out as far as other financials, but I 'd do a lot of homework before I'd work of that assumption.
TCA -- counterparty risk. SDS uses swaps to achieve its -2X the S&P 500. Two of the counterparties are UBS and Credit Suisse.
While ProShares nets its SDS payouts to/from UBS and CS against its SSO payouts, there is still some requirement for a counterparty to deliver funds.
I want no exposure to counterparty risk during the forthcoming meltdown.
I've shorted SSO, have the cash credited to my account, and look forward to buying SSO shares cheap in the future.
No counterparty risk, just me delivering on my commitment to return the SSO shares.
I saw this approach on the MarketTicker forum, and implemented it days later.
Can I get that software or is it top seceret like the WOPR computer?
lol...I worked on it at another company. I don't think they know I can still access the data feeds
I said by the time this is all said and done, look for the DOW to bump against 11200.
CRE question:
It seems that every distressed bricks and mortar retailer has activist investors clamoring for said retailer to "unlock value" by selling CRE.
In this market, are big box outlets likely to fetch much of a price? Walmart has curbed its expansionist appetite, is Costco really that hungry for old Sears/Circuit City stores?
Drugstores are for now.
At what point does the walgreens/CVS/OSCO financing get cut off? Do I really need every intersection in town to have 3 drug stores & a vacant gas station?
Ipodius,
Dow 11,200? That practically makes you a bull. We would have been there already absent emergency rate cuts, new fed lending rules, historic liquidity measures and a 150B stimulus plan.
I gave up targets a long time ago. A precipitous drop in the near future is definitely possible.
In any event, I believe the most likely outcome is meager returns, say 5% annually, over the next 5 to 10 years. Definitely not worth the risk in my view given the alternatives.
12% iceland paper looks good right now after the currency crashed, with the low cost aluminium smelters coming on line it's almost free money.
ipodius writes:
Inflation is the real danger.
No Angry, the real danger is in people like anon above that don't know "whom" is the object of the preposition not "who". They're the ones that bought all the McMansions and Hummers with no money down.
ipodius | 04.09.08 - 2:39 pm
You mean like thisguy?
Scroll down to post 6. Post 2 isn't bad either....
Ethan writes:
...the Wright Model B ...What is it in the financial context?
Political Calculations blog: tool for Reckoning the Risk of Recession, which in turn is based upon a method developed by Jonathan Wright.
From the political calculations blog:
"We only point this out as the media only talks the economy up in years where the incumbent party of the U.S. presidency is Democrat"
ah, one of those blogs that makes you stupider the more you read it. Explains a lot.
Joe Klein - S&P said the end was near for SUBPRIME losses. Not other debt classes.
You're not supposed to read it. Just look at the pictures.
Troy,
It just one of those blogs makes you feel "stupider" [sic]. And that's okay, given that you appear to not have known.
"stupider"
UrbanDigs said: "...S&P said the end was near for SUBPRIME losses. Not other debt classes."
Anybody look at the IMF's breakdown?
Econbrowser: Distressing Table of the Day
"...Aggregate losses are on the order of $565 billion for U.S. residential loans (nonprime and prime) and securities and $240 billion on commercial real estate securities..."
CRE losses less than half the size of residential, looks like. If this is really the way it shakes out, that would account for why CRE hasn't responded as it "should have" given the problems in residential: Because the problem is heavily weighted towards residential.
Sebastia