BerkeleyBob

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  • Little House on PIMCO’s Prairie
    Interesting dissection of housing finance gone wild. Should there be increased federal jurisdiction and oversight of what historically has been considered purely a local matter? The appraiser presented a phony result, the mortgage broker was interested only in one-time transaction fees, the rating agency blessed the packaged loan with others (how many were this bad?) and the effects rippled out into the world financial markets. Who was looking out for the hapless and totally unqualified borrower? Why would anyone want to be long in Freddie/Fannie? (I sold Freddie and C long ago) Why does anyone make any decision based on the ratings issued by Moody's Fitch, et al. who were providing the lubricant for the machine of wealth destruction? They, and the analysts and the talking heads on CNBC have little credibility with this investor.
    Jan 05 16:35 pm |Rating: 0 0 |Link to Comment |View article
  • GE's Dilemma: Sensible Business vs. Rating at Any Cost
    I am not comfortable personally with short selling or trading in options. I was long GE for several years with periodic buys and sells. I recently sold because I was not reassured by the conference call, and although GE's other divisions have promise, GE Credit's books were opaque. Over the next year or two, it is potentially a liability rather than an asset. Having said that, I wish to add that short sellers have a place in the scheme of things and that a short sale is speculative, but a vote of no confidence in management or future growth in a manner that speaks more loudly than my bailing out on a few hundred shares. Who really is in control of GE? Who "owns" it?
    Jan 02 13:08 pm |Rating: +2 0 |Link to Comment |View article
  • Wall Street Breakfast: Must-Know News
    I can almost have some sympathy for Hank--at some of his public appearances, he looked like a deer caught in the headlights but he is intelligent and experienced. Too bad his intelligence and experience did not prepare him for the crisis. Greenspan is a fake, and Bernanke hasn't a clue. I have some doubts about Barney Frank and particularly Chris Dodd, too. Of course, it is just our money going down the drain, not our public reputation...
    Dec 31 13:20 pm |Rating: 0 0 |Link to Comment |View article
  • Stupid Is as Stupid Does: The SEC and CFTC Legalize Electronic 'Gambling'
    Which all reinforces my previous comment that AIG was not an insurance company, but an unregulated off shore bookie. The level of obfuscation is strikingly similar to that used by the Enron traders, and we all know how that ended.
    Dec 30 13:33 pm |Rating: +1 0 |Link to Comment |View article
  • Mark to Market Accounting: Used with Flexibility, It's a Good Thing
    But, in response to the last post, isn't that the vice of the matter? I can accept some flexibility in application of mark to market, but I no longer trust any management to give a straight count. Whatever rule is adopted, I don't believe the lenders have flushed out the toxic and non-performing loans from their balance sheets and don't believe we have reached a bottom in housing prices. Of course, the problems are now far wider than "just" the housing market...
    Dec 30 12:46 pm |Rating: 0 0 |Link to Comment |View article
  • Will Terra Industries Become a Leader in Clean Diesel Technology?
    I am a little puzzled. VW/Audi has a clean diesel certified as meeting California's current passenger car standards (I believe more stringent than the feds) which does not use urea injection. Mercedes does use urea. Don't know about BMW. Corning has made a few announcements about an improved diesel filter not using precious metals. It appears there is more than one approach to cleaner diesel emission which may in turn temper your enthusiasm for TRA.
    Dec 29 13:39 pm |Rating: +1 0 |Link to Comment |View article
  • Was Subprime Lending Just as Dishonest as Madoff?
    I don't understand the poster's final comment that 2009 will be bad because conventional mortgages will reset and interest rates reset will cause large scale loan failures. Isn't a conventional mortgage fixed? Isn't a conventional mortgage not an Alt-A, not a no Doc? If interest rates remain low and stable, maybe some re-financing activity but a re-finance is not feasible with less than a .5% interest reduction and is expensive in terms of taxes, fees, etc.
    Dec 26 12:05 pm |Rating: 0 -1 |Link to Comment |View article
  • The Housing Blame Game, Redux
    I think the article by and large has it right, the comments less so. The basic policy goal was to expand home ownership, not in itself a bad thing. The GSE's facilitated lending by creating a secondary market in mortgages, but were reasonably cautious in underwriting. The now failed investment banks cried foul at the "competition"... but led a race to the bottom and were aided and abetted by the credit rating agencies in selling fraudulent packages of loans. The Wall Street Urinal's editors railed against the CRA, but that was not a major factor in the housing/credit meltdown. Both parties have plenty to answer for, and the capital gains tax reduction by Clinton may have set the stage, but it was Greenspan who endorsed the ARM as a boon to the consumer, but in reality a bail out for lenders stuck lending long at low interest rates when the political decision to finance the Great Society and the military adventure in Vietnam by deficits was made... Volker broke the back of secular inflation but at the unpopular cost of high unemployment. Both Greenspan and Bernanke were wearing the blinkers of an ideology and lost ability to see what was on the periphery...
    Dec 23 13:19 pm |Rating: 0 0 |Link to Comment |View article
  • Wall Street Breakfast: Must-Know News
    As if the Big 3 management bargaining teams were innocent rubes taken advantage of by the big bad UAW. In reality, the Big 3 were always willing to give away the store on future benefits in exchange for short term concessions. I doubt there was serious consideration given to the long term but these were contractual obligations and I don't think the Big 3 were the only corporations to focus on quarterly earnings to their detriment. Even a Chap. 11 restructuring and partial reduction of retiree benefits will simply impact other programs. The fed's pension guarantee fund is neither a guarantee nor adequately funded...
    Dec 23 12:07 pm |Rating: +2 -1 |Link to Comment |View article
  • Are Credit Rating Agencies Good for Anything?
    I think it is remarkable that the rating agencies have not been the subject of more adverse comment and down the line, possible criminal liability for aiding and abetting the massive fraud in the sale of toxic loans. It is clear that the rating agencies drastically mis-understood the nature of sub-prime and Alt-A loans. Institutional investors and fiduciaries including foreign central banks relied on the rating agencies' representations. As an individual investor, I can put no credence on anything the rating agencies (or other "experts") say and have to make do with my own due dilligence.
    Dec 22 12:50 pm |Rating: +2 0 |Link to Comment |View article
  • Could the LA Times Turn Off Its Presses?
    I am a paying subscriber to the Sacramento Bee's website on a trial basis. I prefer ink and paper, but the Bee discontinued distribution to the Bay Area. The LA Times continues to distribute locally, but does so a day late. I haven't made up my mind about the electronic version but the local major newspaper (SF Chronicle) is becoming increasingly ungood. The joker in the deck is that consumers of web content are pretty allergic to advertising in any form... so electronic delivery may not be viable in the long run.
    Dec 21 17:06 pm |Rating: 0 0 |Link to Comment |View article
  • UBS Lists Ten Possible Surprises for 2009
    UBS has its own issues to deal with. The one prediction which appears completely unlikely to me is the predicted low price of oil. I don't think conventional supply demand analysis adequately explains the rise and collapse of oil prices this year, but the conveniently low present price will not hold even in the relatively short term future, say 6 to 9 months. I am long WMB, PBR and APC.
    Dec 19 12:53 pm |Rating: +1 0 |Link to Comment |View article
  • SEC (Cough) Accountability, by C. Cox
    Yeah, Chairman Cox is right up their in delusion with Alan Greenspan, who grudgingly conceded to a House committee that his model (Ayn Rand's objectivism, leavened with Chicago school of economic balony by Miltie Friedman and over-reliance on pure competition as a concept) had failed. He took no responsibility for his terrible anti-consumer endorsement of adjustable mortgages which have the magic property of going up, but never down, kind of like credit card rates.
    Dec 19 12:48 pm |Rating: 0 0 |Link to Comment |View article
  • Cramer's Stop Trading! General Electric Brings Bad Credit to Light (12/18/08)
    I agree that the rating agencies operated outside of their brief and aided and abetted what may yet turn out to be criminal fraud in the marketing of toxic loans and AIG's Enron-like antics. Within their area of expertise and competence, they perform a necessary function. I held GE common for many years, sold my position at a loss this month because of the ongoing concern about ability to deliver consistent non-phony earnings and realistic dividends and concern about GEs credit division. GE is a broadly diversified corporation which was reported to be owned by a high percentage of individual investors--I recently read 41%. I don't have confidence in Mr. Immelt's ability to deliver for the individual investor and will not re-invest until I see a significant change in its operation.
    Dec 19 12:40 pm |Rating: 0 0 |Link to Comment |View article
  • REIT Watch: ProLogis is Undervalued
    I bailed on my position in PLD earlier this month at $7.31; had held for several years. Share price trended down from over $40 but held steady for much of the calendar year, third quarter conference call did not indicate any reason for the massive drop. Forced sales due to mutual fund and hedge fund redemptions? Maybe. Although heavily held by institutional investors, this appears to be a well managed low profile outfit. Before re-investing at the present low (and by most measures, attractive) levels, I would want to know more about the market valuation of its debt...
    Dec 19 12:31 pm |Rating: +2 0 |Link to Comment |View article

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