Them US Bankers Could Well Turn Into Real Estate Agents

Posted on WSJ's Real Time Economics : Number of the Week: 103 Months to Clear Housing Inventory

• 103: The number of months it would take to sell off all the foreclosed homes in banks’ possession, plus all the homes likely to end up there over the next couple years, at the current rate of sales.
  
  How much should we worry about a new leg down in the housing market? If the number of foreclosed homes piling up at banks is any indication, there’s ample reason for concern.
  
  As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier.
  
  Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years. Of course, banks could pick up the pace of sales, but the added supply of distressed homes would weigh heavily on prices — and thus boost their losses.

The banks have 103 months to unload their housing inventory???

LOL!!!

It's only some 9 years plus. Only 9 years.

Aha!

But don't you worry about it since it's a capitalist world.

Let's see what can our beloved money loving bankers can do...

Create a property subsidiary, write down as much as possible the value of these housing inventory, sell them (how difficult is it to get good profit margins since the value written down low?), LIST THEIR SUBSIDIARY IN THE MARKETS, profit from the listing, Viola! No problem!

Say Doc, could them bankers have more houses to sell?

Pretty please... and if you don't mind, since our darling bankers are making more money, can they be paid more? Yeah, give them more compensation for all their hard work too!

Nothing wrong, yes?

And not forgetting this is such a non-issue. Doesn't anyone knows that them US Bankers don't make money via banking anymore? The bulk of the profit comes from their trading activities.

I wonder if them bankers should be reclassified as Trading Banks!

What a wonderful capitalist world this is.

Paul Krugman: Are The Rating Agencies Corrupted?

Posted the other day: Credit Ratings Sold For A Buck Or Two..

Paul Krugman had an editorial piece on NY Times: Berating the Raters

Some highlights from his piece.

• ... The bad news is that most of the headlines were about the wrong e-mails. When Goldman Sachs employees bragged about the money they had made by shorting the housing market, it was ugly, but that didn’t amount to wrongdoing.

Now get this..

• the e-mail messages you should be focusing on are the ones from employees at the credit rating agencies, which bestowed AAA ratings on hundreds of billions of dollars’ worth of dubious assets, nearly all of which have since turned out to be toxic waste. And no, that’s not hyperbole: of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent — 93 percent! — have now been downgraded to junk status.

Bottom line? The rating agencies got it wrong by a whopping 93%!!!

Gosh, surely you would ask if them agencies knew what they were doing or are they simply incompetent?

If not... are they ....

• What those e-mails reveal is a deeply corrupt system. And it’s a system that financial reform, as currently proposed, wouldn’t fix.

Paul Krugman is calling it a deeply corrupt system.

"How can it be? It's simply capitalism at work here!!!"

Would you accept the above statement? This is all the work of a capitalist financial world?

• And it did. The Senate subcommittee has focused its investigations on the two biggest credit rating agencies, Moody’s and Standard & Poor’s; what it has found confirms our worst suspicions. In one e-mail message, an S.& P. employee explains that a meeting is necessary to “discuss adjusting criteria” for assessing housing-backed securities “because of the ongoing threat of losing deals.” Another message complains of having to use resources “to massage the sub-prime and alt-A numbers to preserve market share.” Clearly, the rating agencies skewed their assessments to please their clients.

Yeah... What Wall Street Crisis Are We Even Talking About?

Credit Ratings Sold For A Buck Or Two..

The buck or two is such an understatement.

Posted on Calculated Risk

From Kevin G. Hall and Chris Adams at McClatchy Newspapers: Senate panel: Ratings agencies rolled over for Wall Street

• A Senate panel investigating the causes of the nation's financial crisis on Thursday unveiled evidence that credit-ratings agencies knowingly gave inflated ratings to complex deals backed by shaky U.S. mortgages because of the fees they earned for giving such investment-grade ratings.

Yeah... What Wall Street Crisis Are We Even Talking About?

Why I Like KNM Even So Much More Today!

But... but... but.... but....... the lower the stock falls, the better for the MD.

Which means he could come back with a new LOWER MBO offer price.

What a brilliant idea! The board of directors are not kicking him out, so why not make the stock fall lower and then offer a LOWER MBO price? Lower means cheaper. Good eh?

End of the day it's a rich man's world!

Which means if we are the smartest we could all jump in we could also make a nice tidy profit from his new LOWER MBO offer price!


How could we fail with such a sure win strategy?

After all, we do not know what the final offer price BlueFire Capital, together with GS Capital Partners and Mettiz Capital offered. ( Mettiz Capital is owned by Michael Tang Vee Mun, while GS Capital Partners is a unit of Goldman Sachs. (Goldman who???))

So smart KNM did not reveal what the final offer price was.

And because no price was revealed, the 90 sen price is already out-dated and out of the equation!

MIB (no it does not stand for Men In Black but it stands for Mayban Investment Bank) had believed ( or is it speculated?) that a final bid was made between 60 and 70 sen.

Objectivity is to get the offer price lower yes?

No money, no honey yes?

Now that KNM had dropped to just 60.5 sen, surely BlueFire Capital can squeeze the board of directors with an offer of 70 sen.

(Hmm.. at 90 sen, KNM is valued at 3.6 billion. at 70 sen KNM is valued at 2.8 billion. Wah! Cheaper by 800 million! Yeah every 10 sen down, KNM is valued 400 million cheaper. )

Yeah.. yeah... yeah... take it or leave it. (Life is good, no?)

So if we smarter, can we not jump in and whack the stock? how can we not win money?

Or if we are even the smartest, we wait for 50 sen.

If no offer come, we buy more at 40 sen.

Still no offer, we buy even more at 30 sen.

What 30 sen also no offer, sure win and no lose teeth la, we buy even much more at 20 sen.

Can ah?

How?

Life is good or life is simply GOOD!






Oh... I do need to make a disclaimer here.

Hmm.... Can I can guarantee that you may not make money if you simply follow my insane logic here? Can I use such disclaimer? Do I need such disclaimer?

On a less serious note, would it not be NICE (some use the word TRANSPARENT) that KNM comes clean and tell the public what was the final offer made by BlueFire Capital?

These F@#king Guys - Goldman Sachs

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
These F@#king Guys - Goldman Sachs
http://www.thedailyshow.com/
Daily Show Full Episodes Political Humor Tea Party

Regarding Susccess Transformer Once More

I noted that I have been getting constant hits and referrals to the posting Comments On Success Transformer.

I believe I really should clarify more.

First thing first. I am seriously not a financial advisor and I really do not know if a stock will go up or down. Meaning to say, I really cannot guarantee if you could lose money if you follow what I post on this blog.

OK?

Secondly, that posting, Comments On Success Transformer, is NOT a recommendation. I was merely replying to a request made by blogger MaxWealth88.

Anyway, my points once more...

1. Success Transformer, had indeed done fantastic since listing but one needs to point out that the last three fiscal year, Success Transformer's earnings has gone up another level, thanks to its subsidiary, SEB.

2. now the subsidiary is to be listed. Do I like listing of a subsidiary? NO. Why? A company can easily list and delist its subsidiary. Risk is (a) you do not if it will happen (b) you do not know when it will happen (c) and if it does happen, you do not know if the privatisation price is fair or not. From a long term investing perspective, I believe this is not fair that such an option exist. (Yeah, need I be reminded that in a capitalist world, nothing is fair?)

That's my opinion why I don't like listing of a subsidiary. Of course, it's my personal dislike. You do not have to follow what I like or don't like. More so, I could always be wrong! :D

3. Again from a speculative perspective, yes from a trader/speculator perspective...

• .... Naturally the hope is, once Success is listed, both Success and SEB could trade higher. That's the hope, that's the objective.

And I do think many believe there is justification in such a strategy.

Is it wrong? Well, who am I to judge and say that such speculation will not work? And to be honest, let me say again, I do not know. Yes, the market is not mine and I have no idea what the market will or will not do. So sorry again if I am to disappoint you.

Let me repeat again what I wrote back then.. if this is the sole reasoning you are buying this stock, perhaps you could be extremely hardworking by digging out information on recent listing of subsidiaries in the market.

Did such a strategy work out?

Ok?

Why I Also Like KNM A Whole Lot

Let me see.

Do I like KNM?

Do you like KNM?

1. March 17th 2009, Management buyout of KNM hinges on funds. KNM then was 39 sen.

• “We are very undervalued. The opportunity for privatisation is a good opportunity but it’s the source of funding. There is no offer on the table,” said managing director Lee Swee Eng.

2. Wednesday, 10 June 2009, the Edge Financial Daily publishes the following. KNM’s MD sells 63.65m shares

• According to a Bursa Malaysia filing on Monday, Lee sold a total of 63.65 million shares representing a 1.6% stake in KNM between June 1 and 4 at prices ranging from 97.5 sen to RM1.02 apiece.

Regarding KNM's MD Disposal Of Shares For A Cool RM64 Million. Bottom line? MD makes a cool 64 million.

3. Feb 2010. Proposed Acquisition of the Entire Business and Undertakings of the Company (the "Proposal")

• KNM Group Berhad (“KNM”) has on even date received from BlueFire Capital Group Ltd (“Bidco”), an entity controlled by Ir. Lee Swee Eng, the Group Managing Director and major shareholder of KNM, a proposal to acquire the entire business and undertakings of KNM (“the Proposal”). The proposed price is equivalent to RM0.90 per issued ordinary share of KNM.

Hmm... what can anyone conclude?

March 2009, MD said KNM undervalued at 39 sen. Wants to take it private if got funds.

June 2009, MD disposes a chunk of shares between 0.975 and 1.02. MD pockets a cool 64 million.

4 Feb 2010. KNM now 75 sen. MD wants to do a MBO at 90 sen. (LOL! If 90 sen was a good price, how come he was disposing his shares like plague in June 2009?)

15 April 2010. KNM's MBO Fails. Stock plunges!

20th April 2010. KNM is now 62 sen.

Ah.. that's the way and I like it. Yessirme this is why I like KNM.

Oh... and the MD despite the failed MBO is still the MD.

Nice!

I like Scholes a whole lot too.

What Wall Street Crisis Are We Even Talking About?

Here's an article published last week: Speculating Banks Still Rule -- Ten Ways Dems and Dodd Are Failing on Financial Reform

• As we wind up for another dramatic bipartisan squabble over all the crap Wall Street flung at us, things are getting back to normal – for the wealthy. The top 25 hedge fund managers made a record $25.3 billion dollars in 2009. And despite all those dramatic congressional hearings, average compensation of Wall Street bankers rose by 27 percent in 2009.

Top 25 hedge fund managers made a record of $25.3 Billion in 2009.

Average Wall Street bankers compensation rose by 27% in 2009.

Where's the Wall Street crisis?

What Wall Street crisis are we even talking about?

Life is freaking good, eh?

From the same article.

• On the other side of humanity, more sobering numbers include a record 2.8 million properties in foreclosure for 2009, a 21 percent increase over 2008's astonishingly high figure, with another 4.5 million foreclosures projected for 2010. Federal mortgage modification plans have not stemmed this tide, because lenders aren't required to particiapte; and lenders, in the words of Herman Melville's Bartleby, "would prefer not to" renegotiate a mortgage for which they'd then have to book a loss. As foreclosures continued to climb, so did bankruptcies, rising 35 percent in 2009 over 2008 levels.

More foreclosures. More bankruptcies.

Who cares about the poor? Screw the poor.

Make them bankers rich!

• "Banks -- shockingly -- aren't helping. They posted their lowest lending rates since 1942; despite all the subsidies and cheap money they received from, well, us, including exceedingly low Federal Reserve loan rates (zero to 0.25 percent interest)."

What a wonderful world this is!

Yeah, the banks are recording better numbers. What crisis?

But.. how many of these bankers are making the money the old fashion banking way? Does it bother anyone that the bulk of the money earned by the banks are made via extraordinary items such as accounting profits and yeah, them bankers apparently are now super duper traders too! Trading profits are so easy for them bankers.

But who cares, right?

We need the good news. We ONLY want the feel good financial news.

Does anyone even care how the trading profits are made?

News like Ex-Goldman trader blows whistle on silver and gold manipulation does not matter.

Yeah.. how cares?

Yeah.. most important them bankers make money!

Life is simply superb!