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Monetary System
Mea Culpa: I was too bullish on the BofA-Merrill deal
Merrill Lynch is looking like a real dog these days -- much more than I realized back in September. As bearish/cautious as I have been on the economy and the financial sector, obviously I was not cautious enough. When the deal got done I…
Bailouts: catching a falling knife
This post from January 2009 explains why banks do not increase lending capacity when uncertainty about the level of existing loan losses already on their balance sheet makes them worry about future loan losses. Credit wariness will be the…
The worst M&A deals of all-time
As the financial industry further unraveled yesterday, Mathieu Robbins of the Irish Indendent asked a worthwhile question: Was RBS the idiot company of all-time in buying ABN Amro at the top of the market? Robbins says no and offers up…
The German $400 billion toxic asset time bomb
This just in from the German daily Der Spiegel: German banks are still loaded with risky U.S. assets, only a fraction of which has been written down. If this report is true, it suggests that the entire German banking sector is extremely…
Countrywide is the real problem at Bank of America
Now that the government has bailed out Bank of America, I want to remind you that this Bank is a serial acquirer and that the Merrill acquisition is not the only boneheaded move by Bank of America.
Peter Schiff: “Government is a burden on the economy”
Peter Schiff is that market wizard people were laughing at just a year ago because of his extreme views. Well, things have turned out much as he has indicated they would. So, now he has a captive audience. And what is he saying?…
Abu Dhabi sovereign wealth fund loses $125 billion
In my book, losing a gargantuan $125 billion qualifies you as the dumb money. This appears to be what has happened at Abu Dhabi's leading Sovereign Wealth Fund.
I had been warning all throughout 2008 that the Sovereign Wealth Funds were…
JPMorgan: Beats expectations despite writedowns
JPMorgan Chase moved up its earnings announcement to today in order to surprise the market with better than expected earnings. The company reported full-year income of $5.6 billion and 4th-quarter income of $702 million or $0.07 a share,…
Meredith Whitney: “I would diversify out of financials here”
The statements coming from Meredith Whitney in this video interview with CNBC's Maria Bartiromo could not be more blunt: the financial serves sector is weak, needs bailout money and investors will be diluted. As a result, she expects…
A brief note on upcoming bank earnings announcements
Earnings season is upon us and I think it bears remembering that earnings season for banks has generally been associated with very bad news for banks over the past two years. Every earnings season is filled with surprise writedown…