Parsad

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!

All that to say - Parsad, it sounds as if you potentially are in BAC...if so, how do you get comfortable with what is on BAC's balance sheet outside of the Bruce argument that BAC earnings $45 to $50B PTPP and can earn their way out of it? If in fact BAC is forced to write down fluffy assets in the next couple of years, that is not enough time to "earn" their way out of it due to limited profitability over the near term. They may have more in write-downs, but I don't think it will be nearly as significant as the current discount to book. Meaning, the stock is so hated right now that investors are ignoring all of the fundamentals, and it is discounted extraordinarly low relative to earning power and potential write-offs. Financial institutions in the United States today are stronger than financial institutions in any other country in the world presently. People are going to throw out Tier 1 and tangible equity ratios of Chinese banks, but why do you think they are so high? Because the Chinese know that they have a shitload of bad loans on the book. Presently, it is night and day in loan quality in U.S. banks from 2007. Credit quality is better, you don't have risky reset products, higher down payments, shorter amortizations in many cases, and house prices have fallen 50% or more in many areas. Many bank's loan provisions will be found to be high relative to the actual loan losses...think in terms of insurance underwriting, and institutions having surpluses. Requirements for small business and commercial loans are much tighter as well. Banks are doing what they were always supposed to do...take deposits and make quality loans! On top of all of this, you have more regulatory oversight than there ever has been in banking...far greater than there was after the Savings & Loan scandal or the Great Depression. The best way to buy is to use the warrants. You probably will never see a product like that again! How do you get comfortable with it? Like any investment...how do you get comfortable with Fairfax, Berkshire, Leucadia, Google, etc. There is always some risk, but which side of the equation are you on and what is the probability that you may fall on the wrong side? If you trust your analysis, that's all that matters. Cheers!

As innocent as the call may seem, you were provided privileged information that the general public may not have been given. Use Buffett's rule: If you are asking the question, then don't even do it! In my personal opinion, if you don't own the stock already, then don't buy. And if you do own it already, then you should consider yourself precluded from selling for a period of time as well. It's why investors should not speak to executives outside of conference calls, AGM's, investor presentations, etc. It happens all the time and is hard to avoid, but it probably should not really be occurring. Cheers!

He's also really cleaning up the culture...both at BAC and Countrywide. When the economy recovers, the engine at BAC is going to surprise everyone! You have a weak economy and weak housing market, while they are still turning around their operations and shrinking their business. Excluding the 2nd Q charges, you have a bank that can earn almost $16B net annually with current spreads...and they have less than half their assets in loans! In a couple of years, you will see a leaner, meaner bank that will earn net profits north of $20B...or about five times earnings based on its current market capitalization. Cheers!

Berkowitz is completely correct. BAC today reminds me of Fairfax 2005. Midst of a turnaround...the pig half-digested...investors underestimating earning power and improvements in the balance sheet. I also like Moynihan. It was his predecessor who made the Country-wide deal, while attempting to stabilize the system at the behest of Paulson and Geithner. Moynihan is doing alot of the right things! Cheers!

Well, they haven't been sued yet! ;D Many of the relationships have been covered in other stories by them or other journalists over the years. Some of them I have no idea. Cheers!

Sino hit $7.12 today! Maybe Block should have sold when his bear raid was plentiful. If Chandler pushes for change, and gets control, this thing could easily go back over ten bucks plus. Cericwb's purchase is looking pretty good about now, I guess! Cheers! http://www.bloomberg.com/news/2011-07-26/sino-forest-advances-on-speculation-billionaire-chandler-will-seek-changes.html

The SEC will monitor firms that are involved with large daily or monthly trades. Cheers! http://www.bloomberg.com/news/2011-07-26/sec-weighs-system-to-seek-abuses-among-market-s-biggest-traders.html

The Shareholder Foundation Inc., which is a class action lawsuit firm (if you can call it that...more like fly by night outfit) that files against corporations, has filed a lawsuit on behalf of "an investor" against Fairfax Financial in regards to the use of finite reinsurance and restatement of filings going back to 2003. Interesting how this suit comes up now...eight years later...just before we head to trial against some of the largest and most powerful hedge funds in the world. Cheers! http://shareholdersfoundation.com/case/fairfax-financial-holdings-limited-usa-hit-investor-class-action-lawsuit-over-alleged-securitie

Cheers, and since I haven't mentioned it yet, Congrats to the BRUINS! Damn you! Just as I was starting to forget that we lost. Thanks for ruining my day! About a month ago, I was just hanging out with my brother and cousin at a restaurant, and in the middle of dinner, I just blurted out in an exhausted voice "I still can't believe we lost the f**king Cup! How the hell do you lose a series when you are up 2-0 and you've gone through all of that to get there? And what the hell went wrong with Luongo!" They just looked at me like where did that come from. I said, "I guess it's just hitting me now!" ;D Cheers!

Sharper a train is hurtling down the track at 90 miles an hour and NO ONE is willing to get off the track the only thing I see is gold goes up a little in value a little every day. Is it at all possible that the only thing that will get us a resolution is a crash if the Dow drops 1000 points maybe even some tea partiers will get worried about the debt ceiling. That's what it may take. If they don't come to some sort of agreement tonight and get it into the house tomorrow, I think Wall Street's interpretation of this just being political gamesmenship will quickly dissipate. Can't believe that such pig-headed behavior is being put ahead of the welfare of the country! Cheers!

John Birch Society...err, sorry Tea Partiers...are ready to light the match! This is not going to be good. Probably not quite as bad as some may make it out to be, but it will not be good. Waste of time, waste of money and a distinct possibility...in fact, likelihood of a double-dip. It will change the game completely on what we can expect from other nations. And our frickin' loonie is going to go through the roof, probably pushing us into a recession as well! Cheers!

I said a week ago that a default was about 30% likely. http://cornerofberkshireandfairfax.ca/forum/index.php?topic=4768.0 I think a default will result in a 5-10% market correction...possibly more, as a default is very likely to exacerbate the possibility of a double-dip recession longer term. The government's interest costs go up...the financial industry's costs go up...thus borrowing rates for every other business goes up, as well as consumer rates also go up. Default would be the dumbest thing to do, as the cost to the U.S. economy would be quite large...I would say north of $200-300B in economic value...as well as any drop in asset values...perhaps over $1T! Not something they should take a chance on like this. Cheers!

They've got less than a week to get this thing done! Hopefully, S&P and Moody's are willing to wait that long. At least China will be happy earning a bit more interest on their massive holdings of U.S. treasuries...as well as the Japanese! Harcore Democrats and Republicans are having fun lighting matches after dousing everyone in gasoline. Cheers! http://www.cnn.com/2011/POLITICS/07/22/debt.talks/index.html?hpt=hp_c1

The US Court of Appeals has rejected the SEC's New Exchange Act Rule 14a-11, which would have allowed shareholders with greater than 3% ownership to nominate board members on the company's own proxy documents. http://finance.yahoo.com/news/US-court-rejects-SEC-rule-on-apf-1094113398.html;_ylt=Av0oNf.Is8zqVcV_ni8nkuS7YWsA;_ylu=X3oDMTE1N3Bsc2dnBHBvcwM1BHNlYwN0b3BTdG9yaWVzBHNsawN1c2NvdXJ0cmVqZWM-?x=0&sec=topStories&pos=2&asset=&ccode= I agree with the courts that it could make fighting proxies expensive for companies...we spent $50K in our group running the proxy against ITEX, while they spent a couple hundred thousand! I think the 3% ownership rule is low. They should probably raise it to 10% or higher. If incumbent management with limited ownership, feel they have an innate right not to listen to their largest shareholders, and feel they want to wage expensive proxy defenses against their own shareholders, then a majority of the remaining shareholders would probably come to their senses and vote against the incumbent management if they were spending excessive amounts on defense, rather than compromise. Hopefully the SEC will be able to move this forward with a higher threshold or something. Cheers!

Commentary on Buffett's stance. Which I happen to agree with. ;D Cheers! http://finance.yahoo.com/news/Buffetts-Unwavering-Optimism-tsmf-3377317085.html;_ylt=An.BVpSAPPhIWABdIo4gX7W7YWsA;_ylu=X3oDMTE2ZGc1MnEwBHBvcwMxMQRzZWMDdG9wU3RvcmllcwRzbGsDYnVmZmV0dHN1bndh?x=0&sec=topStories&pos=7&asset=&ccode=

Article on Chandler and his Mandolin Fund. Cheers! http://www.theglobeandmail.com/globe-investor/latest-sino-forest-investor-finds-itself-on-familiar-ground/article2105641/

Article on Paulson. Includes some comments on Sino-Forest. Cheers! http://finance.yahoo.com/news/Exclusive-Paulson-says-bets-rb-2706023513.html;_ylt=Aotd5D1Uz5viPZK6L56fKsO7YWsA;_ylu=X3oDMTE1YzhlOHViBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawNwYXVsc29uc2F5c2I-?x=0&sec=topStories&pos=3&asset=&ccode=

Any other company and that would have been a terrific quarter. But because it's Microsoft, and you are competing against Google and Apple, it looks mediocre. They are spending money and playing catch-up in the cloud and search...they still dominate home and business users...X-box and Kinect have hold of a certain segment of the market and look to dominate...Windows 8 with mobile platform should be out next year. Regardless, they are still making money hand over fist, and based on their earnings power, the stock is still very cheap. Should be around $35 plus. They should be buying back all the shares they can under $30! Cheers!

Coincidence? Overstock's office is evacuated after a white powder substance was found and people felt sick...the same day as Minkow gets sentenced. Cheers! http://www.deseretnews.com/article/705387976/Overstock-building-evacuated-in-haz-mat-investigation.html

This quote from the article is pretty damn funny: “His hubris is what caused this problem,” Minkow’s attorney, Alvin Entin, said today. “His narcissism is what caused this problem. He’s not going to make the same mistake a third time.” Minkow didn’t speak at the hearing except to answer the “yes, ma’am” to judge’s questions. Yes, I'm sure five years in jail will make all the difference. Next time he certainly won't do this again. Especially with all the wonderful, less than savory, characters he hangs out with...Antar, Weiss, Conen...etc. If your lawyer is saying all this, you must really be worse than horses**t. Cheers!

Are you referring to Minkow or Byrne? If it is the latter, then I think you're clearly mistaken. Cheers!

SAC, Third Point & Kynikos are claiming that Kasowitz Benson carried out an undercover sting against John Gwynn of Morgan Keegan, and that they should be disqualified from representing Fairfax in the lawsuit. Cheers! http://www.bloomberg.com/news/2011-07-21/sac-capital-seeks-to-disqualify-kasowitz-benson-law-firm-in-fairfax-suit.html?cmpid=yhoo