Posts filed under “Valuation”

Steel Owes Thain a Royalty Payment

Correct me if I am wrong, but I do believe Robert Steel of Wachovia owes a royalty payment to John Thain of Merrill Lynch.

Why? For for this manuevuer:

"Wachovia Corp increased its previously reported second-quarter loss
to $9.11 billion to cover costs to settle a probe of auction-rate
securities sales, and said it will cut more jobs as the housing market

The fourth-largest U.S. bank is now reporting a loss of $4.31 per
share, up from the $8.86 billion, or $4.20 a share, it reported on July
22, according to its quarterly report filed on Monday with the U.S.
Securities and Exchange Commission.

Wachovia also now plans to cut 6,950 jobs, 600 more than it had
disclosed, with the additional cuts coming from mortgage operations,
spokeswoman Christy Phillips-Brown said. The cuts affect about 5.8
percent of Wachovia’s 120,000-person workforce. Wachovia also is also
eliminating 4,400 open positions…

The quarter marks the second in a row when Charlotte, North
Carolina-based Wachovia revised results to increase the size of its
reported loss. Wachovia increased its first-quarter loss to $708
million from an original $393 million because of a write-down tied to
life insurance policies."

Let’s see, July 22 to August 11 is less than 3 weeks . . . 250 million dollar bump . . . Yes, that fits the technical rules for licensing. The 393M to 708M last quarter is clearly

I am quite nearly positive Thain owns the copyright on this, and is entitled to standard ASCAP licensing fees on this bit of post earnings write-down sleight of hand. .

Of course,t here is no reason for the SEC to be investigating this, as over lunch I heard several people discussing why some company’s stock was going down. That is without any shadow of a doubt a far more worthwhile usage of SEC manpower (and the Ken doll that runs the place) than any of this foolishness where investors are losing money due to fraud, malfeasance and theft. 


UPDATE: Aug 13, 2008 5:02am

Add JPM to the list of royalty payees:

J.P. Morgan Chase & Co. is taking another $1.5 billion write-down as a result of the subprime mortgage mess at the bank, but the bank appears to be trying to keep the disclosure off the radar.

The bank disclosed Monday in its quarterly filing with the Securities and Exchange Commission that it’s taken an additional $1.5 billion in losses on the portfolio at its investment banking arm, and there could be more to come.
J.P. Morgan (JPM) had $19.5 billion exposure in Alt-A mortgages, $1.9 billion in subprime mortgage exposure and $11.6 billion in commercial mortgage-backed securities. For these securities, though hedged, "the trading conditions have substantially deteriorated," the bank said.

Throughout the credit crisis, when banks have taken losses, no matter how grudgingly, they’ve made the effort to spell it out to the market through public announcements. That’s why J.P. Morgan’s decision to slip this disclosure on page 10 of a federal filing smells fishy.
Shhh…another write-down at J.P. Morgan


Wachovia boosts loss to $9.11 bln, cuts more jobs
Jonathan Stempel
Reuters Aug 11, 2008 7:02pm EDT

Shhh…another write-down at J.P. Morgan
Dimon & Co. keep noise on latest loss to a minimum
MarketWatch,  10:45 a.m. EDT Aug. 12, 2008

Category: Corporate Management, Credit, Earnings, Legal, Valuation


Category: Corporate Management, Credit, Derivatives, Legal, Valuation

Betting on Bear’s Bust

Category: Options, Psychology, Short Selling, Valuation

Is the Market Still a Future Indicator?

Category: Apprenticed Investor, Hedge Funds, Markets, Trading, Valuation

FASB: OK For USA to Turn Japanese

Category: Derivatives, Legal, Valuation

Actual Merrill CDO Sale: 5.47% on the Dollar

Category: Credit, Derivatives, Mathematics, Valuation

Rinse. Lather. Repeat.

Category: Corporate Management, Derivatives, Earnings, Valuation

Merrill’s $5.7B Write-Down, $8.5B Share Issuance

Category: Corporate Management, Credit, Derivatives, Earnings, Valuation

Would Benjamin Graham Buy Financials? (No!)

Category: Credit, Earnings, Valuation

Have the Financials Bottomed?

Category: Credit, Federal Reserve, Real Estate, Valuation