If you've been reading my stuff for the past few years, then you've been ahead of the real estate pack every step of the way. I warned you well in advance that the housing market would implode ... that the mortgage industry would collapse ... and that virtually ...[More...]

Anytime I see a well-written article by another college student, I pay extra attention. Such is the case with Naufal Sanaullah’s piece on why he thinks this recent rally is unsustainable. It’s quite a comprehensive bearish argument, with good points about the technical aspects of trading and a number of shots at the accuracy of last quarter’s bank earnings – and it will also serve as a good starting point for me to assess my own view of where the market is going. Still, I couldn’t help but be struck by the conspiracy-heavy undertones (most of which were backed by links to Zero Hedge – which provides a lot of thought-provoking pieces, none of them ever being positive). I’m not going to argue on points about CDS trades with AIG, because there are[More...]

We recently reviewed Net Income (ex. Special Items) & Common Dividends for a list of 86 financial institutions in the S&P500 and made the following observations: The market value of equity has been reduced by ~ 65% since 2006 (from $2.66T on 12/29/08 to $945B on 4/24/09). The Financial Sector lost $173B (Net Income to Common ex. SI) in 2008 ($251B loss if Special Items are considered). Over 50% of the firms (44) have lowered dividends in 2009. The Financial Sector lowered Common Dividends by 68% or $41.4B ($19.9B in 2009 vs. $61.4B in 2008). 20 out of 86[More...]

Geithner Says He May Oust Executives at Banks Needing `Exceptional’ Aid - hmmm, I don’t trust this soundbite that he made on Face the Nation, note how Geithner makes this prospective, something that would only be done with banks that get in trouble in the future: “If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes… Where that requires a change in management and the board, then we will do that.” It could be the administration is floating another trial balloon, to see how that goes over publicly and within the bankster community. Geithner said the Obama administration has no intention of letting banks get around the rules. “Our obligation is to apply the laws that Congress just passed,” he said. Hmmm,[More...]