Archive for the ‘stocks’ Category
Tuesday, June 2nd, 2009
The latest issue of Value Investor Insight has a fascinating interview with hedge fund legend Julian Robertson. They note that he predicted the financial crisis in his last interview with them 2.5 years ago. Excerpts below. Their website is here. For value-oriented investors, this newsletter is a must-read.
Has anything surprised ...
Posted in stocks | 9 Comments »
Friday, May 15th, 2009
WSJ reported last night that Treasury had finally settled on bailout amounts for the large life insurers. They reported back in April that the companies had been approved to participate in TARP, but it wasn't until yesterday that actual bailout amounts were leaked.
In total, six companies---Hartford, Principal Financial, Allstate, Ameriprise, ...
Posted in bailout, insurance, stocks | 3 Comments »
Monday, April 27th, 2009
To survive, GM needs to shrink itself to a manageable size. It's new viability plan intends to do just that. The key provision of the plan is to reduce debt, swapping 225 shares of equity for each $1,000 outstanding principal of its unsecured public notes. $27 billion of unsecured notes ...
Posted in autos, bailout, bankruptcy, debt, stocks | 6 Comments »
Friday, April 24th, 2009
Ahead of official announcements regarding stress test results, OA thought we'd publish our latest update for banks' tangible common equity, a metric that is likely to figure prominently.
A recent Reuters report said "U.S. regulators want the top 19 banks being stress-tested to have at least 3% [TCE]." In other words, ...
Posted in banking, leverage, stocks, Wall Street | 11 Comments »
Monday, April 20th, 2009
BofA reported better than expected earnings today, but a quick glance at the income statement shows those profits aren't related to its core banking operations. Strip out trading and the company's pretax profit disappears.
(Click to enlarge)
BofA reported profit of 44¢ per share. Analysts had been expecting 4¢. But if you ...
Posted in banking, stocks, Wall Street | 10 Comments »
Friday, April 17th, 2009
WSJ:
General Motors Corp. still hopes to avoid a bankruptcy, but the option is becoming increasingly unavoidable as the company struggles to achieve key goals toward completing an out-of-court restructuring.
Fritz Henderson, GM's chief executive, said Friday that bankruptcy remains a "probable" outcome for the auto maker, which is subsisting on government ...
Posted in Economy, stocks | No Comments »
Friday, April 17th, 2009
Bloomberg (via Zero Hedge):
The Standard & Poor’s 500 Index’s 28 percent rise since March 9 is a “sucker’s rally,” and the overvalued measure may plunge 62 percent as earnings continue to shrink, according to David Tice of Federated Investors Inc....
Tice said the benchmark index for U.S. stocks may end the ...
Posted in stocks | 2 Comments »
Wednesday, April 15th, 2009
As with banks, the long-term survival of the life insurance industry is likely to be determined by its access to bailout funds. No one trusts insurers' balance sheets, which face "unprecedented stress" according to S&P, so they aren't able to raise capital privately. (Bloomberg)
U.S. life insurers...face “unprecedented stress” on holdings ...
Posted in insurance, stocks | 2 Comments »
Tuesday, April 14th, 2009
(Reader Note: This is Part 2 of OA's discussion of Goldman's results. See Part 1 here).
It's been awhile since there was good news to report from the banking sector. Goldman offered a little today, raising $5 billion in a sale of common stock to investors. The banking system won't be ...
Posted in banking, leverage, stocks, taxpayer issues, Wall Street | 4 Comments »
Tuesday, April 14th, 2009
Lots of interesting things to report regarding Goldman Sachs today.
In this post: accounting gimmickry, higher leverage (tangible assets/tangible common equity calculated below), and silence regarding AIG payments.
In the next post: Goldman raises $5 billion in a sale of stock, which is good news.
Accounting Gimmicks and Tangible Common Equity
With respect to ...
Posted in accounting, banking, leverage, stocks, Wall Street | 6 Comments »
Wednesday, April 8th, 2009
Bloomberg:
Berkshire Hathaway had its long-term issuer rating cut to Aa2 from Aaa by Moody’s.
Not mentioned---Buffett owns 20% of Moody's stock...
Posted in credit rating agencies, insurance, stocks | No Comments »
Monday, April 6th, 2009
Today's Journal had a very good, very comprehensive op-ed by Steven Gjerstand and Vernon L. Smith. It asks a couple very interesting questions. For instance, how can Greenspan argue there was no evidence of inflation during the first half of this decade even as an asset bubble was inflating very ...
Posted in housing, inflation, stocks | 2 Comments »
Thursday, April 2nd, 2009
Stellar economic analysis from Mr. Cramer....
Reminder---Cramer, 3/11/08: "Bear Stearns is fine!"
Posted in depression, stocks | 12 Comments »
Monday, March 23rd, 2009
The stock market's positive reaction---best 10-day gain since 1938---should leave no doubt about Geithner's bank rescue plan: it's a mammoth taxpayer giveaway to investors. Or so the market believes it's going to be. Forthwith, a tutorial for those not quite clear about the mechanics of the giveaway.
(At the bottom, there's ...
Posted in bailout, banking, stocks, Wall Street | 30 Comments »
Friday, March 6th, 2009
The latest results of Mark Hulbert's long-term newsletter performance rankings are fascinating. His rankings track performance for 160 investor newsletters that have been around since 1980. There's a new leader of the pack, Charles Allmon's Growth Stock Outlook. (Marketwatch)
Allmon has been almost completely out of stocks for more than 20 ...
Posted in funny, stocks, Wall Street | No Comments »
Thursday, March 5th, 2009
Apologies to readers for not completing OA's tutorial on P/E ratios sooner. I promised Part 3 last summer, and here it is March...But this is a good thing folks, because the subject is now far more topical.
Part 1
Part 2
I hope readers don't mind the length of this post. Can't ...
Posted in stocks, tutorial | 6 Comments »
Thursday, March 5th, 2009
I will preface this post by emphasizing that it is NOT Barack Obama's fault that the market has fallen so much on his watch. The American economy was grossly over-leveraged before he was even elected to the Senate in 2004.
The stock market is the best measure of the economy's equity ...
Posted in Economy, stocks | 7 Comments »
Wednesday, March 4th, 2009
Wow. I would have thought cutting the dividend would have had some positive impact. Guess the company's insane leverage ratio (from a tangible common equity perspective) is just too overwhelming. Stock has recovered from earlier, but it had dropped below $6...
Flash Player 9 or higher is required to view ...
Posted in leverage, stocks | 1 Comment »
Friday, February 27th, 2009
Breaking news on WSJ.com:
"General Electric to cut dividend to 10 cents a share from 31 cents a share."
The cut will save the company $9 billion annually according to CNBC. This should come as no surprise. As we've noted here on OA, GE is starving for capital to shore up its ...
Posted in stocks | 2 Comments »
Thursday, February 26th, 2009
This move was greeted very positively by the market as bank stocks were up on the open. It is long overdue. (Marketwatch)
JPMorgan said it expected to save $5 billion in common equity every year after cutting its quarterly dividend Monday to 5 cents a share from 38 cents. JPMorgan made ...
Posted in banking, leverage, stocks, taxpayer issues | 4 Comments »
Tuesday, February 17th, 2009
The table below is an update from this post published a couple months ago (the prior post also explains this leverage calculation and tangible common equity in detail...and why it matters).
(Click to enlarge)
As you can see, Morgan Stanley and Goldman have cut their leverage significantly. Citi is in worse shape, ...
Posted in banking, stocks, Wall Street | 27 Comments »
Saturday, February 14th, 2009
It was pretty clear when GM and Chrysler got their first chunk of cash in late December that they'd be back for more shortly. (WSJ)
General Motors Corp., nearing a federally imposed deadline to present a restructuring plan, will offer the government two costly alternatives: commit billions more in bailout money ...
Posted in bailout, bankruptcy, stocks, taxpayer issues | 4 Comments »
Thursday, February 5th, 2009
Four years ago, Google invested $1 billion in AOL. Since then AOL's biz has continued to deteriorate. Google recently wrote down the investment and is now trying to back out of the deal, or at least renegotiate it. NYT:
Measured strictly in terms of financial returns, Google’s investment in AOL ...
Posted in stocks | No Comments »
Tuesday, February 3rd, 2009
The Journal is reporting this morning that Citi may try to back our of its deal for naming-rights on the Mets new stadium:
Citigroup Inc., eager to quell the controversy over how lenders are using government bailout money, is exploring the possibility of backing out of a nearly $400 million marketing ...
Posted in bailout, politics, stocks, Wall Street | 3 Comments »
Tuesday, January 20th, 2009
Don't look now, but Chase and Wells Fargo are getting hammered in early trading.
Chase appears to be headed below $20...
Flash Player 9 or higher is required to view the chart Click here to download Flash Player now
View the full jpm chart at Wikinvest
...while Wells is moving inexorably toward single-digit ...
Posted in stocks | 1 Comment »
