Parsad

It's funny watching the vote. You can see how certain members are withholding their votes towards the end, so that they can make themselves look good to their constituents. Glad they are putting the country ahead of themselves! They could really avoid all this by not releasing the vote tallies until the end. Cheers!

Either way, we have a crazy market tomorrow! Cheers!

I have to politely disagree with many of the complaints about Obama. He's been dealt a cruddy hand ever since he won. This mess wasn't of his making, and I think everyone would agree, that it is nothing short of a no-win proposition. He's damned if he does, and he's damned if he doesn't. Right now, they've tabled an agreement that caters primarily to a conservative fiscal ideology that does nothing to equalize the disparity in income and wealth. Yet, his own party members are throwing him under the bus. Reid, McConnell and Boehner are also doing everything they can to get an agreement without causing a default, yet their respective party members are throwing them under the bus. The truth is, the inanity of this whole mess occurred because we have always had strong partisian biases, and now when something has to be done where people have to come to the middle, it's the stubborn left and right wings that are stirring the pot. I was just watching CNN and I watched this representative from Missouri, Eldridge Cleaver, who called the agreement a "sugar-coated, Satan sandwich". When Wolf Blitzer asked him which way he was voting, he said that the consequences of not voting for the agreement may be worse than voting for it, to which Blitzer replied, "I can't imagine the consequences of anything that could be worse than a sugar-coated Satan sandwich!" I couldn't stop laughing! It's this type of rhetoric, be it the Tea Partying nimrods, or the caustic left-wing Democrats who create this mess...Barney Frank comes to mind. You have a President who was as left-wing as they came before being elected, suddenly playing up the middle through this whole crisis and trying to channel Ronald Regan, and again you have everyone saying he's not playing ball and is irresponsible. The truth is that even Ronald Regan would not have been elected by the present day Republican Party...he would be considered more moderate than Boehner! Cheers!

I think the deal will pass. Hardcore democrats and republicans against, but you'll get enough from the rest to make it through the House. Senate will probably pass it with little difficulty. They can't play games anymore...this is it! Either they vote yes, or the rest of the world sees what bumbling idiots are running the country. Cheers!

Other than customer service, it was not a good quarter at all! You could hear it in Patrick's voice during the webcast...not pleased. Better now than in the 3rd and 4th Q. Cheers!

Some comments from Prem today: http://www.reuters.com/article/2011/07/29/fairfaxfinancial-idUSN1E76S0XA20110729?feedType=RSS&feedName=bondsNews&rpc=43 Cheers!

Holding pattern...wait for opportunity...reap dividends and interest income while waiting for insurance market to harden. Patience is a virtue! Cheers!

This afternoon after market close. Cheers!

Another article including comments by Wilbur Ross. Although they butchered Prem's last name! Cheers! http://www.cnbc.com/id/43924621

That's not too bad then. Still, what's the harm in just gathering the cash flows over time and putting it to work? Cheers!

He's paying 10% annually on it, correct? He's going to have to get a pretty good return on the capital he's taking out. You spend all this time deleveraging because you want a rock-solid balance sheet, and then you lever it up again because you are impatient at deploying capital and need to get your hands on as much as you can. Cheers!

Not a good idea. Not the amount he's taking out and the rate at which he's borrowing. You start to make mistakes when you get impatient! Cheers!

A boardmember sent me a snippet stating that Biglari Holdings is recapitalizing Steak'n Shake by $160M through Jeffries? Anyone find anything on that? I'm looking and I don't see anything. From the snippet, it says he's looking at a $20M revolver and $140M 4-year term at 10% annual amortization. If true, he's levering the chain and I believe pulliing the money out to the holding company. Cheers!

Hi King, Yes, the SEC would be all over that if that happened in the U.S. Cheers!

Hi Uncommon, I think your reasoning and numbers are sound. That is based on the assumption...that WFC can achieve 15% ROE, while BAC achieves 8.2% ROE. No argument there...based on those assumptions! ;D Cheers!

You know, maybe that's why Fairfax's stock has been somewhat stagnant the last year and a half. I brown bag it almost every day, because I like to sit at my desk when the market is open and into after hours. Alnesh gets a little peeved, because he and his accounting partner like to go grab a bite every other day, and I hardly ever go because I always bring lunch. Andrew and Glen know to call my office number then, and they'll always get me on the phone. I think I remember hearing Jim Pattison say he always eats lunch at his desk. He gets an extra hour or two of work done by not going out for lunch. Although, I did go for lunch last week with an old MSN boardmember who was in town. How many of the oldtimers here remember "Marpro"? Marpro was with us right in the heyday of the short attacks. He had some good verbal spats (along with myself, Uccmal, Bsilly, etc) with the various aliases of John Hempton. Anyway, Marpro still follows the board, but doesn't post. It was nice to meet him and have lunch! I believe Fairfax stock was up $6 that day! ;D Cheers!

The 2nd quarter charge, which included a huge amount of reps and warranties reserves addition, was actually great. It reminded me of Wells taking a huge quarterly loss a couple years back to get it over with. I remember the first time we met Sam Mitchell at our dinner, and we asked him about the large restatement and hit Fairfax took that one year. It was shortly after he joined Hamblin-Watsa, and either Prem asked for his opinion, or perhaps Sam just offered it, but he said something to the effect..."Prem, we just can't have one issue or another coming up every quarter. One shot...clean it up and move forward." And that is what happened. I believe when corporations have issues with operating companies that need to be rectified, this is the best way to do it. You don't want to piece meal it quarter after quarter, year after year. Moynihan is doing that...take the big hit, clean it all up...move forward. Eventually, the market will recognize this when things look clearer. Cheers!

Mr. Market appears to be convinced that BAC will have to raise capital through a dilutive equity issuance, although even many of the analysts who believed that have changed their positions since the last quarter and CC. They do not have to issue equity. They could raise $20B in a week by selling their stake in China Construction Bank alone. As long as they don't suffer any more egregious charges like the 2nd quarter, they should be able to grow their way out of this with a few small asset sales. If they need more, they could sell that stake in CCB. Cheers!

If he provided material forward-looking information...projections on revenues, etc...then it would be considered inside information. Buffett used to do the same thing back in the 50's and 60's. Today it would considered insider trading! I believe Alice Schroeder gave an example in her book. Cheers!

I don't think deflation is likely. If anything, we will continue to see a stagflationary environment, especially if China doesn't slow. The deleveraging process at the soverign level won't allow a full-blown recovery...just too much in frictional costs from increased taxes, fees, regulation, etc. At the same time, you've got devaluation occurring for many currencies, including the U.S. dollar and Euro. For the U.S., it means that it's citizens will consume less as the cost of importing goods becomes prohibitive, but it also means that much of the rest of the world, will probably purchase more U.S. goods and assets. So economy recovers, but we spend carefully thus no blowout recovery. A "recovery" nonetheless! But this is all conjecture. Buy cheap, sell dear and forget about the rest! Cheers!

Totally agree with you! But that is what is happening. At some point...the tipping point...you will see confidence restored and money come pouring back into the economy. Thus creating jobs, consumption and stabilization in demand for housing. But it will only happen over time and as these companies and savers become comfortable. It still hasn't happened in Japan after 20 years, but I think things are different in the U.S. You have a significant influx within the population, thus you will eventually have increased demand for goods, housing, etc. Japan is a country mired in stagnation. They need to open the flood gates and increase immigration over there, as the general population is aging with few youngsters coming up to carry the load. Cheers!

You won't find much detail in the 10-Q. Go to the 10-K: http://www.sec.gov/Archives/edgar/data/70858/000095012311018743/g25571e10vk.htm Check the MD&A under "All Other". That will give you some idea of the type of assets they hold, but it won't give you the fine, nitty-gritty stuff. To do that, you are going to have to dig into their filings...big job...and you still might not be able to find all of what you are looking for. But in the MD&A, you will get some idea of those assets, and you can come to reasonable estimates or more like "guesstimates" of potential for loss. Then compare that to other assets, capitalization of the bank and cash flows. In general, read the 10-K. Cheers!

Check out the post before yours. Already a discussion on BAC, and you probably want to join that one rather than start another. Cheers!

Piles and piles of cash and everyone afraid to use it. Contrary indicator? Cheers! http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/corporate-cash-hoard-in-the-trillions-moodys/article2111286/

How does anyone know whether Moynihan is changing the culture of BAC? This is a 100,000+ person organization. Perhaps he is changing the incentive structure for most/all of the company. But that does change the culture. IMO, that change takes years and years not months. How did anyone know that Buffett would change the culture at GenRe? What about Prem at C&F and TIG? These things take time, but it all starts with accountability from the top. Moynihan is getting lambasted because BAC was in bad shape from past mortgage underwriting and acquisitions. Between him and the government, as well as the future Basel 3 requirements, there is enormous oversight on the large "too big to fail" institutions. If anyone thinks things aren't different today at these institutions than say three years ago, they're nuts! The system is slowly fixing itself. These institutions will be the foundations upon future economic recovery. The numbers and balance sheets show that they are slowly restoring themselves or have already done so in the case of WFC & JPM. It doesn't mean there won't be bumps in the road, but it does mean that things are going to get better over time. Anyone here think WFC is going back to $9? Or GE is going back to $7? I remember no one wanted to touch either one when I was buying back in late 2008, early 2009. I was told I was nuts and it was a black box, until it was revealed that Buffett was buying both. Today, people are afraid of BAC, even though the tide is turning. Prem is buying a bank in shittier shape...Bank of Ireland! You check the numbers, you do your analysis, and then you buy when no one wants to touch the thing! People are pulling money from Berkowitz...but Berkowitz is right! Cheers!