Using Veritas to Construct the "Per…

29-04-2017 Hits:85837 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:80052 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:79912 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:84394 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:80932 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:83172 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:54186 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:82315 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:82157 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:82029 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:88072 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:85935 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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In following with my promise to call out the nations most insolvent, publicly traded banks, I am publishing part two of my short list of Doo Doo banks. If you haven't been following this self-perpetuating missive, see:

  1. The Doo Doo 32, revisited
  2. The FDIC as a catalyst, or the new Doo Doo 32!
  3. Thoughts on the June 2009 Case Shiller report: Are prices really improving?
  4. The Fed Believes Secrecy is in Our Best Interests. Here are Some of the Secrets
  5. More on the FDIC as a Catalyst...
  6. Discussion of the 210% Texas Ratio Bank

We have looked into 14 additional banks out of the group previous shortlisted from the original 869 bank scan (see The FDIC as a catalyst, or the new Doo Doo 32!) and almost all the banks in the additional list have better metrics compared with the original list of 8 banks published last week.  We have selected two of the 14 banks analyzed recently based on the banks' loan and investment portfolio, operating metrics and valuation ratio.

Capitol Bancorp:

·         While the probability of bankruptcy of this bank is relatively high over the 14 banks analyzed recently, the low absolute share price and low valuation multiple makes it risky for me to short.  The bank has market cap of $93 mn and share price of $5.3 and is trading at Price-to-tangible book value of 0.37x

·         The banks' Eyles test (a measure of banks loan loss reserve strength) is the highest among the analyzed 2nd tier of 14 banks at 75.8% (i.e) bank has negative cushion (NPA's less reserves) of 75.8% over tangible equity.

·         The bank has negative cushion of 60.1% as of June 30, 2009.

·         The banks NPA's to tangible equity as of 2Q09 stood at 147.4% while non performing loans plus 90 days past due loans to tangible equity stood at 105.8%

·         The banks NPA's to loans is at 8.0% while non performing loans plus 90 days past due loans to loans is at 5.8%.

·         The bank has high adjusted leverage of 22.6x.

·         Efficiency ratio is very high at 108.6% in 2Q09 and the bank has been reporting losses over the last five quarters

 

CAP BANCORP LTD

Price (August 27, 2009)

5.3

Market cap (in mn)

92.8

P/B

0.3x

P/Tangible BV

0.4x

 

 

Loan Loss coverage YTD

-0.3

Texas ratio

103.8%

Eyles Test

303643.0

Shortfall from current reserve for loan loss

189428.0

Shortfall as % of tangible shareholders' equity

75.8%

 

 

Cushion (Reserve less NPL+90 days due)

-60.1%

Adjusted leverage

22.6x

 

 

NPA / Equity

147.4%

NPA / Total Loans

8.0%

 

 

NPL and 90 days due/ Equity

105.8%

NPL and 90 days due/ Total Loans

5.8%

 

 

NPL and 90 days due and 30 days due/ Equity

na

NPL and 90 days due and 30 days due/ Total Loans

na

 

 

 

 

Loan exposure

 

Residential real estate loans to tangible common equity

3.58x

Commercial real estate loans to tangible common equity

11.21x

 

 

Investment securities exposure

 

Total investment portfolio to tangible common equity

0.19x

Level 3 assets  to tangible common equity

0.00x

 

 

AFS break up

 

Level 1

0.0%

Level 2

100.0%

Level 3

0.0%

 

 

Unrealized gains (losses) as % of amortized cost

0.3%

After tax unrealized gains (losses) as % tangible equity

0.0%

 

 

Troubled Securities exposure

 

Privately issued RMBS to tangible common equity

na

CMBS to tangible common equity

na

AMBS to tangible common equity

na

Other debt securities to tangible common equity

na

Equity securities to tangible common equity

na

Total

na

Subscriber Short Candidate 2 (subscribers may download the summary overview of this company here Doo Doo Bank Short List, part  2 Doo Doo Bank Short List, part 2 2009-09-02 00:20:59 752.29 Kb:

·         Although in terms of probability of bankruptcy this bank trails over the four banks identified previously, the bank still has weak balance sheet metrics compared to most of the 14 additional scanned banks.  However taking into consideration the relatively high liquidity and market cap (over 4 banks identified last week), availability of options with relatively narrow spreads, poor operating metrics (over rest of 14 banks and industry standards), high valuation ratio and high absolute share price this bank merits itself in the final list of 6 banks