‘Stress Test,’ a new drama tv show premiering May 4th
BoA has completed the superfecta of earnings from the money center banks with an earnings beat but with the run the whole group has had and the ‘stress test’ drama ahead of us, it’s sell on the news time. I know many don’t like to work on Sunday’s but watching the Sunday morning political talk shows now has to be part of one’s weekend as the event risk from a comment is highly possible. Summers implied that private capital should be the first resort of fund raising for those banks that are too stressed. Emanuel said he thinks the administration won’t need more TARP money from Congress but he hasn’t seen the results of the stress test yet. The FT today said “US to put conditions on bail out repayment.” The path to and destination of the May 4th release of the stress test may whip this market around from a psychological standpoint but in reality the govt won’t let any go bust. The $ continues higher on ECB confusion over policy.
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April 20th, 2009 at 9:52 am
The Three-Ring Circus is a fine American tradition.
April 20th, 2009 at 9:59 am
http://www.hussman.net/
This Week:
Wishful Thinking
“At present, the advance we’ve seen over the past several weeks is looking increasingly speculative”
Well, Barry is my blog site, but I do like to see other opinions (not that I don’t look eagerly for yours every day Franklin 411!) and I see that Dr. Hussman seems less postal than the last few weeks.
I don’t mind looking for green shoots, heck it is beautiful and green here in East Tennessee this week. But we are all looking for sustainable foundations, and it still seems early with housing and CRE in the shape they are in…most of the people I see daily are trying to save and get out of debt…and this isn’t changing.
April 20th, 2009 at 10:22 am
And here I thought “The Guiding Light” was stopping production after 75 years…
April 20th, 2009 at 10:25 am
Now don’t fall for this little head fake before the 600 point end of day reversal.
April 20th, 2009 at 10:32 am
BAC’s credit card portfolio sure looks robust. No wonder why they’re jacking up interest rates even on good customers. Me-thinks that strategy will only backfire though.
April 20th, 2009 at 10:55 am
http://www.theglobeandmail.com/servlet/story/RTGAM.20090419.wcglobal0419/BNStory/Front
How Canadian shoppers buck global trend
“That doesn’t mean they will behave in a way that companies would describe as happy.
Quite the opposite.
European respondents planning to cut discretionary spending in the next 12 months range from 59 per cent in France to 70 per cent in Spain. (And 64 per cent in Germany.) “……….
….And I believe an economist over the weekend, in discussing the coming year and
American business prospects, said that government and exports were the only two stimulatives he saw…
Down goes Frazier…on exports…
April 20th, 2009 at 11:41 am
Sunday, I was talking to my good friend Dr. Larry Kudlow and he says
April 20th, 2009 at 11:43 am
http://www.businessweek.com/investor/content/apr2009/pi20090417_182503.htm
How Much Could the Government Lose on TARP?
A research firm says the U.S. lost $104 billion on the ownership stakes it took in financial companies in return for TARP funds. Losses could mount
Probably the Chinese don’t read business week…Franklin 411..where are you man…you are allowing us gloomy guses to blog about the real world…give us your best pitch, man…I need to hear about those green shoots again…
April 20th, 2009 at 12:03 pm
Franklin is in a meeting at GS – trying to close down blogs and salt mines.
All those mustard seeds will be going up Larry Kudlow’s nose tonight…
April 20th, 2009 at 1:05 pm
Click here: Turner Radio Network: LEAKED! Bank Stress Test Reults !
April 20th, 2009 at 1:06 pm
http://turnerradionetwork.blogspot.com/2009/04/leaked-bank-stress-test-reults.html
April 20th, 2009 at 1:19 pm
Okay, Maybe The Community Reinvestment Act Is A Problem (BAC)
The effect that the Community Reinvestment Act (CRA) on the housing is one of the touchier questions in the financial crisis debate. The act was designed to encourage more minority lending, and though it doesn’t require banks to lend out to shaky borrowers, banks make certain CRA commitments in order to get regulatory approval for acquisitions.
A possible effect of this is that banks wishing to grow via acquisition end up with an outsize volume of these commitments.
So what’s the effect at national banking giant Bank of America (BAC).
On the company’s conference call, CFO Joe Price said the CRA book accounts for 7% of the total in residential mortgages, but 24% of the losses.
That alone doesn’t put all the problem on the CRA’ shoulders, but obviously the losses in this portfolio are way out of proportion.
Clusterstock
http://tinyurl.com/df5so8
April 20th, 2009 at 7:27 pm
Peter,
This is spot on. There are event risks from the Washington weekend warriors. In fact, Obama’s three musketeers hit each major network this weekend. Axelrod hit ABC, Emmannuel hit CBS, and Summers hit NBC.
What Axelrod said was (Drum Roll please) that “the banks want the ‘market to know’ the health of their balance sheets. The American people ‘can handle the truth.’”
Of the three musketeers, all for one and one for all, Axelrod wins the White House administration for telling the biggest whopper of all this weekend. If banks wanted the market to know the truth, this is only so because they can now lie about the health of their balance sheets after eliminated the FV rule. And secondly, yes, the American people can handle the truth, but what the banksters and white house administrators are absolutely incapable of doing is administering the truth.
April 20th, 2009 at 7:48 pm
If you weren’t given the stress test, like say a regular commercial bank, mark to market is your test?
April 21st, 2009 at 12:17 am
From the Turner report, “”Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!”
The truth is that Goldman only wants to repay TARP so it can get back to giving themselves huge bonuses. Per the WSJ, one in 30 GS employees makes at least a million a year. The interest rates on TARP are much lower than the loan Buffett gave them. If not for GS salaries, it makes more sense to repay that loan than TARP.
And the notion that GS is somehow patriotic in paying back the TARP is comical. They have borrowed $29 billion from the Fed since becoming a bank holding company.
The U.S. taxpayer is not bailing out a bank with GS. They are bailing out a casino. Why in the hell has this been allowed to happen? Hank Paulson.