This is as close to the perfect storm as the bank can get,'' said Richard Bove, an analyst at Ladenburg Thalmann & Co. Bove cut his 2008 estimate today to $2.23 a share from $2.46 and reduced his price target to $39 from $43.No company, no matter how well-managed, can avoid being impacted by weaknesses in its core business.''
Wow, Bove really went out on a limb there with that call, or is it a guess or is he a paid shill getting to help land the crashing rocket on a burning runway ....... a con artist whore like this should be ignored!
cut his 2008 estimate today to $2.23 a share from $2.46
What, WTF, has the concept of fraud gone out the window> The idea for stealing wealth and then burning cash is not a good idea?
Err... according to the central bankers and our friends on Wall Street this kind of "fraud" is the only way fix the problems we have in this economy.
I guess when much of the wealth in an economy is a lie, the only way for that economy to survive is to perpetuate the situation with bigger and bigger lies.
To put it another way, if asset prices begin to accurately reflect their value, then we must respond by aggressively destroying the value of the dollar to prevent this from happening.
In other words we replace lies about the value of assets with lies about the value of the dollar.
Honesty might result in the unthinkable outcome called "deflation" as the true value of things are revealed.
And the truth is the one thing we can't have in this society.
BlackRock boss Larry Fink may want to thank the Federal Reserve for handing him a fistful of new business yesterday.
As part of JPMorgan's sweetened takeover bid for beleaguered brokerage giant Bear Stearns, the Fed tapped BlackRock to manage the $30 billion portfolio of mostly battered mortgage securities that it is taking on to fund the deal.
That should give BlackRock at least $54 million each year that it manages the assets, based on the average fee the firm typically charges for managing fixed-income portfolios. Analysts believe the firm's fees could be much higher for this assignment, given the complexity of the portfolio.
Check out the banks we've been discussing: Vineyard (VNBC, off 37%), Downey (DSL, off 25%), WaMu (WM off 9%), Wachovia (WB off 12%), and JPM (off 10%). The financials got hit hard today.
Lawmakers continue to express concern about the Bear Stearns bailout. Today, Rep. Henry Waxman (D-Calif.) hinted at his displeasure at the no-bid contract awarded to BlackRock Financial Management to help evaluate and manage Bears portfolio.
In a letter today to Federal Reserve Bank of New York president Timothy Geithner, Mr. Waxman, who is chairman of the House Oversight Committee, wrote that the investment advisers fee should have been determined in advance of the contract last month. He wants to know if the Fed can solicit competing bids to manag
USA Today
Fed auctions off $25B in loans, gives banks more time to pay
"The Fed announced Tuesday that the money would be loaned at a rate of 2.754%. In the latest auction, The Fed offered the loans for an extended period of 84 days, rather than the 28 day period for the previous loans."
Well CR, if you believe that the total bill here is on the order of 1.2T as I do, we're only about 1/2 way there on the write-offs. Why anyone would think that there is any good news in financials for the next couple of quarters is beyond me. They still have downside, and many are still going to have to seek capital yet.
I don't look for any light until near the end of the year at least. And even after that the earnings will not be very good for a while, as many of the products they made money on won't be coming back soon if ever.
"The government says the federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks. The Treasury Department reported Tuesday that the deficit for July totaled $102.8 billion, nearly triple the $36.4 billion deficit recorded in July 2007. The deficit beats the $97 billion gap that Wall Street economists had been expecting for July." Error - washingtonpost.com
Does this mean the when the government has to bail JPM out, my house is going to be owned by the tax payers???
It occurred to me yesterday that US consumers are no longer able to be net buyers of Wall Street assets (or buy assets that generate sales of Wall Street assets), so Wall Street can no longer effectively steal wealth from Main Street by selling them overpriced assets.
The solution to this problem?
Steal consumer wealth using the US government as a proxy.
In other words, get the US government to buy overpriced assets via lobbying efforts, disinformation, political plants, newsletters from Bill Gross, etc and have them tax consumers to pay for them indirectly.
Voila!
The robbery of Main Street by Wall Street continues via a slightly more convoluted route.
You gotta give these guys credit for their cleverness.
Worst would be if they had recently bought commodities on top of CDOs. Then they are surely headed for bankruptcy. Look at what happened to oil and GLD recently. And the FED was supposed to push GLD into inflationary overdrive with 2% FFR and peak oil was supposed to prevent any meaningful USO drop.
O-Joe
We now have 304,852,710 brothers and sisters living in THE USA.
JPM doesn't know shit about making money, so it seems to me, that somewhere out there, there is someone besides The Fed/ Treasury/ JPM and blackrock that can do a more honest job! WTF?
the banks already wrote down around 500 bil. other institutions like hedge funds, swf's and pension plans who aren't required to mark to market could and up with another 500 bil or so in loses. So if the total writedowns are 1.2 tril (CR estimate), does that mean we are almost done with them (only 200 bil left). Yes? No?
We need someone to paint a safe load line on corporations and forbid them to overload. This is what regulation is all about, to avoid the 'race to the bottom' problem.
In the 1860s, calls for regulations to limit overloading on ships were growing in the United Kingdom.
... shipping casualties - losses had doubled in 30 years. ... overloading was one of the factors to blame.
... between 1867 and 1882, loss of life in British vessels alone (and excluding fishing vessels) totalled 33,427 seafarers and 5,987 passengers. Ships lost numbered 16,393....
Load line legislation was introduced in the American congress in 1920 and failed, but a Load Line Act was passed in the United States in 1929....
OJoe please don't get those gold bugs going again. After all, it was supposed to keep going up as the Fed was going to drop interest rates to zero, remember? And gold is a store of wealth, remember? Funny it's headed below 800 now, so not so much. But it's shiny in a box, isn't it?
But don't be too sunny about these developments. The financials are screwed still, and I think we're almost at the halfway point. So take the losses so far and take them again. Only this time, a few institutions that have been parking things in level 3 are going to take a hit (read Goldman)big time. And don't look to back to school to save retail either. Heating season is also coming. That's going to put a big dent in holiday cheer this year.
"Bear Stearns has a longstanding commitment to philanthropy," said James E. Cayne, chairman and chief executive officer of Bear Stearns. "Our philosophy is to identify opportunities where we have the potential to make a significant difference.
It is the opinion of Fitch that JPM will accord BSC the same managerial and financial resources that are available to its other wholly-owned subsidiaries. As such, the ratings of BSC have been aligned with those of JPM and its subsidiaries.
Bove and the entire financial community are missing the bigger picture. It's not just JP Morgan's model that has broken down, it's our entire faith based fiat system that is broken.
"Check out the banks we've been discussing: Vineyard (VNBC, off 37%), Downey (DSL, off 25%), WaMu (WM off 9%), Wachovia (WB off 12%), and JPM (off 10%). The financials got hit hard today."
Every now and then when I hear about how shaky the financials are, I wonder "And how is Wrigley's doing?" since Buffet gave a warning about the economy before buying loads of WWY stock. Looks like WWY is holding strong. A pack of juicy fruit might be safer than a bank these days.
Heating season is also coming. That's going to put a big dent in holiday cheer this year.
ipodius
Yeah, it smells a bit deflationary here. Initially good for stocks and particularly financials, in the end it will take them down, too. Not talking about a depression here, but the clearest trend IMO is a secular commodity bear market and not a secular stock bull market. And I do not worry too much about raising IR rates or RE prices either.
O-Joe
The great thing about a "perfect storm" is that it implies that no one made any mistakes or could have avoided the outcome. Perhaps John Edwards used that explanation with his wife: "Hey, Liz, it was a perfect storm: a hotel bar, a flakey starf***er, lots of money and a huge ego."
For those interested in the evolution of new meanings in the English language, in euphemism or the use of newspeak, there was a new one (to me anyway) here with "legacy leveraged loans". What the hell is that? I am still trying to tell the difference between CMOs and CDOs. Well these are loans that the CEO inherited from his predecessor so they are not his fault. However, if the loans came via Bear Sterns and were placed on the books during his watch then where is the legacy? Watch this term slowly assume new meanings as any note that losses money but it is not anybody's fault for whatever reason.
Couldn't happen to a nicer company. No, I mean that -- if they were a nice company, it wouldn't have happened. Bastards sat on my mom's estate for four years, now they'll probably screw my disabled sister and nephew out of their trust funds.
Buy up all the local and state banks, make a whole lot of bad loans and bad bets, pay yourself a fortune, and write off all the losses and whine to the feds for a bailout.
This from Dick "Financials are a Generational Buy" Bove?? LMAO
Even better Cramer was pumping financial because deflation will allow the fed to lower rates and increase the spreads on their loans, wow I never knew deflation was such a good thing, maybe next weeks show willbe on "Cancer, it does a body good" allows you to drop 25lbs in two weeks
I hear you. So when are Americans going to quit thinking that we "need" these crooks and institutions?
The average person is very brainwashed right now and thinks that our society "needs" these banks, the Fed, Fannie and Freddie, the list goes on and on.
It makes it very easy for Congress to bailout or kowtow to these crooked institutiions, at the total expense of all citizens.
I shudder to think how many people have become homeless because of the insane rise in ,not only home prices, but rentals, over the past 10 years, from easy credit blowing up the price of a roof over one's head.
And how food inflation, because of policies pursued by the Fed and Congress to preserve the banks, is pushing too many people to the brink.
And now the stupid taxpayer bailouts to preserve these fraudulent institutions.
Talk about getting f&cked twice by the same institutions.
We'll raise the cost of a roof over your head, then the price of food, then , when we've gone too far, You The People will bail us out so we can f6ck you again.
dude, no way. First?
Rosebud.
Can't wait to see their CDS portfolio blow up. I also can't wait to see them lose $20B+ in excess of the Fed backstop on their Bear Stearns merger.
4th or 5th and working on ideas for more
Oh there it is:
What, WTF, has the concept of fraud gone out the window> The idea for stealing wealth and then burning cash is not a good idea?
JPM: too big to fail, too big to recover.
This is as close to the perfect storm as the bank can get,'' said Richard Bove, an analyst at Ladenburg Thalmann & Co. Bove cut his 2008 estimate today to $2.23 a share from $2.46 and reduced his price target to $39 from $43.No company, no matter how well-managed, can avoid being impacted by weaknesses in its core business.''
JPMorgan Shares Drop on $1.5 Billion Loss Since July (Update1) - Bloomberg.com
chickenlittle!
S
"original concept" has "broken down"
=Going concern statement!
he toned it down!
jeez... if JPM has a going concern issue, what about LEH!!!!
Wow, Bove really went out on a limb there with that call, or is it a guess or is he a paid shill getting to help land the crashing rocket on a burning runway ....... a con artist whore like this should be ignored!
cut his 2008 estimate today to $2.23 a share from $2.46
Based on what????????????
Here is a link to the content
JPMorgan Shares Drop on $1.5 Billion Loss Since July (Update1) - Bloomberg.com
Does this mean the when the government has to bail JPM out, my house is going to be owned by the tax payers???
Covered bonds and asphalt derivatives.....
Maybe he's got it right this time. In mid March he was saying the financial crisis is over, buy banks. Financial crisis is over, buy banks, Bove says - MarketWatch
...JPMorgan's decision in 2007 to expand in mortgages was ``wrong,'' he said.
Jeez Jamie, ya think? It seems that the 2007 vintage was a pretty bad one as that seems to be the one tanking the GSEs recently.
hey , it's op ex week!
all kinds of juicy rumors will fly this week!
and it's only tuesday!
grab your OTM explosion positions early!
What, WTF, has the concept of fraud gone out the window> The idea for stealing wealth and then burning cash is not a good idea?
Err... according to the central bankers and our friends on Wall Street this kind of "fraud" is the only way fix the problems we have in this economy.
I guess when much of the wealth in an economy is a lie, the only way for that economy to survive is to perpetuate the situation with bigger and bigger lies.
To put it another way, if asset prices begin to accurately reflect their value, then we must respond by aggressively destroying the value of the dollar to prevent this from happening.
In other words we replace lies about the value of assets with lies about the value of the dollar.
Honesty might result in the unthinkable outcome called "deflation" as the true value of things are revealed.
And the truth is the one thing we can't have in this society.
So, how much does JPM burn up with Blacksnake every qtr???
F you Jamie! You twerp!
Love,
Vikram
BlackRock boss Larry Fink may want to thank the Federal Reserve for handing him a fistful of new business yesterday.
As part of JPMorgan's sweetened takeover bid for beleaguered brokerage giant Bear Stearns, the Fed tapped BlackRock to manage the $30 billion portfolio of mostly battered mortgage securities that it is taking on to fund the deal.
That should give BlackRock at least $54 million each year that it manages the assets, based on the average fee the firm typically charges for managing fixed-income portfolios. Analysts believe the firm's fees could be much higher for this assignment, given the complexity of the portfolio.
Check out the banks we've been discussing: Vineyard (VNBC, off 37%), Downey (DSL, off 25%), WaMu (WM off 9%), Wachovia (WB off 12%), and JPM (off 10%). The financials got hit hard today.
Best to all.
Waxman questions BlackRocks role in Bear bailout
Waxman questions BlackRock’s role in Bear bailout - Financial Week
Lawmakers continue to express concern about the Bear Stearns bailout. Today, Rep. Henry Waxman (D-Calif.) hinted at his displeasure at the no-bid contract awarded to BlackRock Financial Management to help evaluate and manage Bears portfolio.
In a letter today to Federal Reserve Bank of New York president Timothy Geithner, Mr. Waxman, who is chairman of the House Oversight Committee, wrote that the investment advisers fee should have been determined in advance of the contract last month. He wants to know if the Fed can solicit competing bids to manag
Keep up the great work!!
USA Today
Fed auctions off $25B in loans, gives banks more time to pay
"The Fed announced Tuesday that the money would be loaned at a rate of 2.754%. In the latest auction, The Fed offered the loans for an extended period of 84 days, rather than the 28 day period for the previous loans."
Why does Bloomberg always cite people's age (as in "Dimon, 52, said in a statement ...")??
I would undestand if it said 35, or alternatively, 75 and recently recovering from Alzheimer's
The phrase "House of Cards" comes to mind.
Well CR, if you believe that the total bill here is on the order of 1.2T as I do, we're only about 1/2 way there on the write-offs. Why anyone would think that there is any good news in financials for the next couple of quarters is beyond me. They still have downside, and many are still going to have to seek capital yet.
I don't look for any light until near the end of the year at least. And even after that the earnings will not be very good for a while, as many of the products they made money on won't be coming back soon if ever.
Was JPMorgan the one who toke over BearStearn?
$16.3 billion legacy leverage loans and unfunded commitment
$11.6 billion commercial mortgage-backed securities
$95 billion home equity loan portfolio
$14.8 billion subprime mortgage loan portfolio
$47.2 billion prime mortgage loan portfolio
$155.4 billion credit card portfolio
This can make a good summer horror flick.
I'll give JPM a hand by managing the the portfolio for $5.4M - there saved some money!
As a Manager, I have to value the books..lets see, MER sold some crap and got a good offer of 22 cents on the dollar...
My job is done. Pleezz send check - now.
CR, BOVE is assuming JPM will still be here in 09.
Their stock went down due to the bad news? That indeed is strange.
Budget Deficit soars to $102.8 Billion in July
"The government says the federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks. The Treasury Department reported Tuesday that the deficit for July totaled $102.8 billion, nearly triple the $36.4 billion deficit recorded in July 2007. The deficit beats the $97 billion gap that Wall Street economists had been expecting for July."
Error - washingtonpost.com
Does this mean the when the government has to bail JPM out, my house is going to be owned by the tax payers???
It occurred to me yesterday that US consumers are no longer able to be net buyers of Wall Street assets (or buy assets that generate sales of Wall Street assets), so Wall Street can no longer effectively steal wealth from Main Street by selling them overpriced assets.
The solution to this problem?
Steal consumer wealth using the US government as a proxy.
In other words, get the US government to buy overpriced assets via lobbying efforts, disinformation, political plants, newsletters from Bill Gross, etc and have them tax consumers to pay for them indirectly.
Voila!
The robbery of Main Street by Wall Street continues via a slightly more convoluted route.
You gotta give these guys credit for their cleverness.
FFDIC - Note that demand for casholla was twice they set.
I guess we don't have wait 30 years to find out what happens to JPM's 30B non-recourse loan.
Worst would be if they had recently bought commodities on top of CDOs. Then they are surely headed for bankruptcy. Look at what happened to oil and GLD recently. And the FED was supposed to push GLD into inflationary overdrive with 2% FFR and peak oil was supposed to prevent any meaningful USO drop.
O-Joe
TJ was that the most recent asstes pledged under the TAF
Harsh Realty writes:
Their stock went down due to the bad news? That indeed is strange
ROTFWL
Ok folks, my fellow Americans,
We now have 304,852,710 brothers and sisters living in THE USA.
JPM doesn't know shit about making money, so it seems to me, that somewhere out there, there is someone besides The Fed/ Treasury/ JPM and blackrock that can do a more honest job! WTF?
the banks already wrote down around 500 bil. other institutions like hedge funds, swf's and pension plans who aren't required to mark to market could and up with another 500 bil or so in loses. So if the total writedowns are 1.2 tril (CR estimate), does that mean we are almost done with them (only 200 bil left). Yes? No?
in any case, they were fun while they lasted...
We need someone to paint a safe load line on corporations and forbid them to overload. This is what regulation is all about, to avoid the 'race to the bottom' problem.
Look up 'Plimsoll Line':
Historical background to adoption of Load Lines convention
... Plimsoll line
In the 1860s, calls for regulations to limit overloading on ships were growing in the United Kingdom.
... shipping casualties - losses had doubled in 30 years. ... overloading was one of the factors to blame.
... between 1867 and 1882, loss of life in British vessels alone (and excluding fishing vessels) totalled 33,427 seafarers and 5,987 passengers. Ships lost numbered 16,393....
Load line legislation was introduced in the American congress in 1920 and failed, but a Load Line Act was passed in the United States in 1929....
Twas the night before XMAS and all through the house, no one could find the $30,000,000,000...
OJoe please don't get those gold bugs going again. After all, it was supposed to keep going up as the Fed was going to drop interest rates to zero, remember? And gold is a store of wealth, remember? Funny it's headed below 800 now, so not so much. But it's shiny in a box, isn't it?
But don't be too sunny about these developments. The financials are screwed still, and I think we're almost at the halfway point. So take the losses so far and take them again. Only this time, a few institutions that have been parking things in level 3 are going to take a hit (read Goldman)big time. And don't look to back to school to save retail either. Heating season is also coming. That's going to put a big dent in holiday cheer this year.
"Bear Stearns has a longstanding commitment to philanthropy," said James E. Cayne, chairman and chief executive officer of Bear Stearns. "Our philosophy is to identify opportunities where we have the potential to make a significant difference.
"Anonymous writes:
Why does Bloomberg always cite people's age (as in "Dimon, 52, said in a statement ...")??"
That's true. They really should include other info: hobbies, horoscope sign, weight, favorite movies...
It is the opinion of Fitch that JPM will accord BSC the same managerial and financial resources that are available to its other wholly-owned subsidiaries. As such, the ratings of BSC have been aligned with those of JPM and its subsidiaries.
Or the Plimsouls million mile line
YouTube - The Plimsouls - A Million Miles Away (Valley Girl - 1983)
Starting to cover gold here... massively oversold.
Out of about 1/4 of my position.
Bove and the entire financial community are missing the bigger picture. It's not just JP Morgan's model that has broken down, it's our entire faith based fiat system that is broken.
This from Dick "Financials are a Generational Buy" Bove?? LMAO!
Angry Saver,
All monetary systems are "fiat" systems. The bit about "faith" is more meaningful, though I'd argue the correct word is "trust".
"Check out the banks we've been discussing: Vineyard (VNBC, off 37%), Downey (DSL, off 25%), WaMu (WM off 9%), Wachovia (WB off 12%), and JPM (off 10%). The financials got hit hard today."
Every now and then when I hear about how shaky the financials are, I wonder "And how is Wrigley's doing?" since Buffet gave a warning about the economy before buying loads of WWY stock. Looks like WWY is holding strong. A pack of juicy fruit might be safer than a bank these days.
Heating season is also coming. That's going to put a big dent in holiday cheer this year.
ipodius
Yeah, it smells a bit deflationary here. Initially good for stocks and particularly financials, in the end it will take them down, too. Not talking about a depression here, but the clearest trend IMO is a secular commodity bear market and not a secular stock bull market. And I do not worry too much about raising IR rates or RE prices either.
O-Joe
Uh, WWY is holding steady because they agreed to be purchased by Mars, I believe? Thus, the stock price is now linked to the buyout price...
Well I got my money out of Chase yesterday. Not because I thought it'd go bust, but just the same...I prefer it elsewhere, like in Horthern Trust.
The great thing about a "perfect storm" is that it implies that no one made any mistakes or could have avoided the outcome. Perhaps John Edwards used that explanation with his wife: "Hey, Liz, it was a perfect storm: a hotel bar, a flakey starf***er, lots of money and a huge ego."
For those interested in the evolution of new meanings in the English language, in euphemism or the use of newspeak, there was a new one (to me anyway) here with "legacy leveraged loans". What the hell is that? I am still trying to tell the difference between CMOs and CDOs. Well these are loans that the CEO inherited from his predecessor so they are not his fault. However, if the loans came via Bear Sterns and were placed on the books during his watch then where is the legacy? Watch this term slowly assume new meanings as any note that losses money but it is not anybody's fault for whatever reason.
Couldn't happen to a nicer company. No, I mean that -- if they were a nice company, it wouldn't have happened. Bastards sat on my mom's estate for four years, now they'll probably screw my disabled sister and nephew out of their trust funds.
Buy up all the local and state banks, make a whole lot of bad loans and bad bets, pay yourself a fortune, and write off all the losses and whine to the feds for a bailout.
Fucking. Bastards.
This from Dick "Financials are a Generational Buy" Bove?? LMAO
Even better Cramer was pumping financial because deflation will allow the fed to lower rates and increase the spreads on their loans, wow I never knew deflation was such a good thing, maybe next weeks show willbe on "Cancer, it does a body good" allows you to drop 25lbs in two weeks
About a month ago, Bove was on CNBC saying that the financials were the "buy of the century, A once in a lifetime opportunity."
I wonder if he meant a once in a lifetime opportunity to lose significant portions of your capital overnight.
I guess I should have read at least one comment before I posted. I think you remember Bove's interview better than I do Brian.
I don't know why I love it so much when Donna shows up to cuss them out.
Donna-
I hear you. So when are Americans going to quit thinking that we "need" these crooks and institutions?
The average person is very brainwashed right now and thinks that our society "needs" these banks, the Fed, Fannie and Freddie, the list goes on and on.
It makes it very easy for Congress to bailout or kowtow to these crooked institutiions, at the total expense of all citizens.
I shudder to think how many people have become homeless because of the insane rise in ,not only home prices, but rentals, over the past 10 years, from easy credit blowing up the price of a roof over one's head.
And how food inflation, because of policies pursued by the Fed and Congress to preserve the banks, is pushing too many people to the brink.
And now the stupid taxpayer bailouts to preserve these fraudulent institutions.
Talk about getting f&cked twice by the same institutions.
We'll raise the cost of a roof over your head, then the price of food, then , when we've gone too far, You The People will bail us out so we can f6ck you again.