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Since additional taxpayer bailouts are politically impossible, does the new recapitalization plan involve playing the markets? Stay positive until after opex to ride the upmove, shift to net short, then announce stress test results?
SEC announces Special K. Fortified with bullshit.
Since additional taxpayer bailouts are politically impossible, does the new recapitalization plan involve playing the markets?
I recall people speculating that FDIC's new $0.5T line of credit would be used for the next round of infusion. No congressional approval necessary.
No worries, the SEC will just issue "guidance" that this event will not need to be disclosed.
GE is way overestimating collateral value on their loans http://www.ge.com/pdf/investors/events/04172009/ge_webcast_presentation_...
(Capital Finance section, page 19)
Non-earning, Commercial:
$4.5bn = $1.4bn 0% loss + $1.0bn 0% loss after workout on terms + $1.2bn collateral value + $0.9bn losses
• .9/(1.2+.9) = 57% collateralized average on NPL. Ummm, gonna call BS. Someone at GE thinks Hospitals are still buying MRI machines like candy or there aren't entire fleets of working aircraft grounded. Cheap -- not expensive -- loans were what made GE temporarily rich. Collateral is overvalued
• How is it even possible to honestly state you expect full recovery under new loan terms? It's just delaying loss recognizance and hoping you win the lottery.
• How is it possible for one third of NPLs to get 100% recovery, with no workout. Did the checks just get lost in the mail for 3 months straight? Must be a common problem
on the residential side
• Let's just look at residential mortgages. $3.9bn non-earning
• $1.3bn / 33% marked under the mysterious label "Cure" (assuming government funded modifications). It's amazing how you can rework loans where neither party loses money, but just an amateur question... why write them any differently in the first place if you can write them magically to be worth the same value and invincible to default
• 2/(2+.3+.3) = 76.9% Collateral value on remainder of non-earning mortgages. Wow, someone did a great job writing mortgages that would have been 50% down. Surprised they didn't get fired writing so many low premium mortgages, and how GE finance managed those lofty profits doing such safe business
• $.3bn of $2.6bn is recovered through mortgage insurance, or 11.5% of the loan ... odd, mortgages with 50% equity shouldn't need mortgage insurance
That's my contribution for the day
I don't see why people are bothering to complain about stress test disclosure.
Is anyone complaining that the FDIC ought to allow banks undergoing liquidation to inform their shareholders a few weeks before the actual takeover/closure?
If you force the Treasury to tell you something, against their will, do you think you will hear anything useful at all? This is a fight that where you will lose even if you win
How much money has been chewed up by the anti-money machine to date?
What is the burn rate?
A WAG would estimate June or July for tap out?
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There must be no meaningful transparency for the secret pony show.
I don't see why people are bothering to complain about stress test disclosure.
Because the complaints themselves shine another light on the looting. That's a fight they will eventually lose, even if they win.
I'm saying Sept. On my rule of thumb observations of the past that failures generally failed a good year and a half after I was absolutely, positively sure that they were going under tomorrow.
Since that happened a year ago, I'd say another 6 months.
lawyerliz--finance the REOs.
Here's the stress test that bankers were most CONcerned about:
The U.S. Gov't does NOT prosecute whole sale financial fraud. Rather, they call it financial innovation and sweep under the rug.
Financial innovation is a license to steal.
If they reveal the result would they not be picking winners and losers? I think better left unknown, besides it would probably be cook to you pleasure.
April 17 (Bloomberg) -- President Barack Obama has full confidence in Steven Rattner, the head of the president's auto task force and co-founder of Quadrangle Group LLC, said Robert Gibbs, Obama's spokesman.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRQC4OUF1f1I&refer=home
I'm sure UAW shares Mr. President's affection for not-yet-indicted looter of a state pension fund.
The more pessimistic scenario must have been the "problem contained" scenario. Things can't get worse once a problem is contained, right?
If they reveal the result would they not be picking winners and losers?
Hah. This is the semi-finals of that particular show.
if the govt or any quasi-govt agency deems co's don't have to report the results then it will solidify (IMO) that there is a deliberate, pervasive, widespread plan to intentionally mislead the public and hide negative information (hey, i'm slow to conclusions). i give a lot of benefit of doubt (i know, that is borderline insane) to many things not being as nefarious and conspiracy based as the ultra doomers that comment here....but deeming that banks wouldn't have to report it would be criminal. just reverse the roles and if the govt was on the hook or needed/wanted the info, you're damn right the govt would (rightly) deem the information material and demand its disclosure.
President Barack Obama has full confidence in Steven Rattner... because he paid the full initiation fee and his check cleared.
"President Barack Obama has full confidence in Steven Rattner, ..."
He must have considered his confidence in Rattner. He has the option of reconsidering. That has a way of happening in D.C.
i think the government has been huffing too many insolvents
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anonymous1 (member) wrote on Fri, 04/17/2009 - 1:04pm.
I'm sure UAW shares Mr. President's affection for not-yet-indicted looter of a state pension fund.
Well the Obama admin won't prosecute CIA torturers -- they don't want to damage themselves "going forward". It won't prosecute Bush cronies, it wants to "stop looking at the past". Why should it prosecute criminals in its own ranks?
When it's 100% clear this country is a coin-operated vending machine, why would you expect even the basic mechanisms of justice to operate?
"You don't want to upset the capital markets with things that could be misconstrued," said Lore. "The Fed understands that you don't want to create winners and losers out of the results."
Isn't that the whole f-ing idea? To identify and differentiate?
it's like Danny Ainge to going to a cardiologist and the doctor saying "you know what, I won't give your family the results, it might upset them" whether he dropped dead or not, isn't it the responsibility, no, the OBLIGATION of the person administering the test to disclose to those affected?
The more this goes on, the more I fear the end result
Did the rubes in DC think this through? Or do they just 'wing it' everyday to placate the markets short term?
@nova
why did you pass on michael's fat one over the plate (chemtrails) last night?
No. You pick winners and losers when you secretly give the losers money. The market is supposed to pick winners and losers, and the government is desperately trying to keep the market from getting the information that there are way too many losers.
I definitely have more confidence in chemtrails than in anything coming out of Geithner's treasury.
If being hopelessly insolvent isn't a material event, why should we expect the banks to report any other bad news?
http://news.bbc.co.uk/2/hi/uk_news/scotland/glasgow_and_west/8003067.stm
"A spokeswoman for Strathclyde Police confirmed: "At the time of the request, 10 (eight police officers and two police staff) had recorded their religion as Jedi."
She added that the force monitored "six strands of diversity" - age, disability, gender, race religion and belief, and sexual orientation.
The force said the information was provided voluntarily and securely stored.
About 390,000 people listed their religion as Jedi in the 2001 Census for England and Wales. In Scotland the figure was a reported 14,000.""
Unfortunately for the UK, the Force is useless against Islamic extremists:)
So if the more adverse scenario is the baseline, that means they have not been "stress" tested for a more adverse but still entirely possible scenario, is that really 'stress' testing?
We are doomed
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