i find it wierd that the CEO publicly denies any liquidity problems 2 days ago and they are seeking short term financing today. How can their liquidity position change so drastically in 2 days ??
If you have a zillion dollars today but owe 3 zillion due tomorrow… I guess you can say you have no liquidity problems (today).
Seems to be a pretty common theme among CEO’s these days.
he was lying ?
His point will be that only the rumors caused the liquidity problems…that people wouldnt take the other side of the trade, etc, because of the rumors…
Any chance this JPM financing leads to an eventual buyout?
guest Wrote: ------------------------------------------------------- > he was lying ? lying? what is that? people do such a thing!!! *gasp!
Can this happen to Citibank, Merill Lynch or UBS?
He wasn’t lying (probably), it’s more likely that they had a “run on the bank” scenerio with people pulling out all their money faster than BSC can effectively unwind, nobody being willing to do swaps with BSC as a counterparty --> unhedged risk… etc
I just got off a conf call with Princeton Professor Hyun Song Shin. Painted a very bleak picture. To summarise… He estimates mortgage losses at $400bn, to which you probably have to add $200bn for other credit classes. (In addition, he suggests that house prices / foreclosures are potentially years from peaking / troughing.) Sticking with the $600bn, this is less that 4% of US stock market cap, but it should rightly be compared to the equity base of levered institutions. In this context it is very large; he points out the oddity of banks, whereby as asset prices go up, leverage also goes up (in contrast to households). He points out that the greatest disruptions have taken place in the markets where these institutions play a pivotal role. Restoring equilibrium will ultimately require a rebuilding of the capital base of these institutions. Conclusions -The Fed is only tinkering, by offering the opportunity to borrow, when the issue is fundamentally one of solvency. -Don’t own banks yet, you’ll be diluted. SWFs will run a harder bargain after getting nailed on their initial investments. He is of the view that banks should definitely (and probably will) cut their dividends as a first step. He points out that it makes little sense for Citi to pay ADIA 11% on converts and then pay out a 7% yield to shareholders.
Etienne Wrote: ------------------------------------------------------- > I just got off a conf call with Princeton > Professor Hyun Song Shin. Painted a very bleak > picture. To summarise… He estimates mortgage > losses at $400bn, to which you probably have to > add $200bn for other credit classes. (In > addition, he suggests that house prices / > foreclosures are potentially years from peaking / > troughing.) Sticking with the $600bn, this is > less that 4% of US stock market cap, but it should > rightly be compared to the equity base of levered > institutions. In this context it is very large; > he points out the oddity of banks, whereby as > asset prices go up, leverage also goes up (in > contrast to households). He points out that the > greatest disruptions have taken place in the > markets where these institutions play a pivotal > role. Restoring equilibrium will ultimately > require a rebuilding of the capital base of these > institutions. > > Conclusions > -The Fed is only tinkering, by offering the > opportunity to borrow, when the issue is > fundamentally one of solvency. > -Don’t own banks yet, you’ll be diluted. SWFs > will run a harder bargain after getting nailed on > their initial investments. He is of the view that > banks should definitely (and probably will) cut > their dividends as a first step. He points out > that it makes little sense for Citi to pay ADIA > 11% on converts and then pay out a 7% yield to > shareholders. Thanks for sharing that insight
Halifax, did you end up going long BSC for a swing trade?
drs Wrote: ------------------------------------------------------- > Halifax, did you end up going long BSC for a swing > trade? No. I don’t buy indiviudal stocks, not enough capital. And after my blatantly wrong call on BSC, I don’t think I ever will anytime soon. I guess I’m better at sector/market level stuff.
to add more on the bad news front, I attended AEI conference a couple of days ago, the topic was “The Deflating Mortgage and Housing Bubble” here is the link for those who are interested to listen http://www.aei.org/events/f.video,eventID.1678,filter.all/event_detail.asp The entire panel was very bearish, but the picture painted by Nouriel Rabini, NYU Professor was even bleaker than Etienne described
volkovv Wrote: ------------------------------------------------------- > to add more on the bad news front, I attended AEI > conference a couple of days ago, the topic was > “The Deflating Mortgage and Housing Bubble” > > here is the link for those who are interested to > listen > > http://www.aei.org/events/f.video,eventID.1678,fil > ter.all/event_detail.asp > > The entire panel was very bearish, but the picture > painted by Nouriel Rabini, NYU Professor was even > bleaker than Etienne described Mr. Rabani is a very well noted extreme bear I might point out in fairness. I have always wanted to see or read him first hand, I will have a listen, thanks for sharing this.
Anyone find a decent link for the conference call that took place today? It’s posted on their site but for some reason it’s not playing for me…is this happening to anyone else?