Using Veritas to Construct the "Per…

29-04-2017 Hits:17071 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:19344 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:19155 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:20446 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:20488 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:22377 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:13856 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:21702 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:21758 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:21931 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:23514 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:23234 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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As stated in my earlier posts, I have embarked upon stress tests for certain members of the Doo Doo 32 (As I see it, these 32 banks and thrifts are in deep doo-doo!) as well as other financial services and insurers/reinsurers that I have released analysis on. These stress tests use the published methodology issued by the government, and uses the government's assumptions for the optimistic case. I feel (actually, I know) the government's assumptions are much too rosy to be considered a prudent base case or pessimistic case scenario. See "More on Reggie Middleton's Bank Stress Testing" for the justification behind this line of thinking. Nouriel Roubini has been consistently more accurate in the call of the current downfall than the government's models, thus I feel it is most prudent to rely on his input for the base case scenario.

Below is the link for the stress test results of PNC Bank including the acquisition results of National City, an interesting taxpayer funded combination of two of the Doo Doo 32 (As I see it, these 32 banks and thrifts are in deep doo-doo!).

We have created 3 economic stress test scenarios with RGE Monitor's estimates as the base case, the Fed's base line assumption as optimistic case and a slightly direr (though still plausible) distressed scenario.  The Fed's baseline assumptions are on an average higher than RGE's estimates by a factor of 1.33x while under the adverse case the macroeconomic assumptions are lower by a factor of 0.80x.  We have used these factors to build optimist and adverse case scenarios. 

Base Case - RGE Monitor

 

2009

2010

GDP

-3.4%

 

Unemployment

10.0%

11.0%

Price Index

-16.3%

 

     

Our Optimistic case - Fed's baseline case

 

2009

2010

GDP

-2.0%

 

Unemployment

8.4%

8.8%

Price Index

-14.0%

 

     

Adverse Scenario - L shaped recession

 

2009

2010

GDP

-4.9%

 

Unemployment

11.5%

12.5%

Price Index

-21.3%

 

     

Factor sensitivity - Base case

1.00

 

Factor sensitivity - Optimistic Case

1.33

 

Factor sensitivity - Adverse case

0.80

 

 

As per RGE Monitor HPI is expected to fall 44% over 2006 levels. S&P Case Shiller has declined 27% since then.

 

Jan-06

202.44

 

Current Index

146.40

 
 

-27.7%

 

 Previous PNC research:

PNC Report 050508 revised PNC Report 050508 revised 2008-08-30 06:38:42 711.95 Kb

PNC Report_update final - Retail PNC Report_update final - Retail 2008-10-15 13:21:38 337.21 Kb

PNC Report_update final - Pro PNC Report_update final - Pro 2008-10-15 13:21:22 590.98 Kb

The PNC Stress Test Results

PNC Stress Test Retail PNC Stress Test Retail 2009-04-13 02:11:08 323.51 Kb

PNC Stress Test Pro PNC Stress Test Pro 2009-04-13 02:10:17 3.11 Mb

 

The Professional Version is 56 pages long and has roughly 60% of the output of my proprietary PNC model (there are some formatting issues with the pro addition due to the heft of the tables included). Below is a pasting to illustrate the contents and the amount of intellectual capacity that went into it. I will be releasing a similar stress test for every company that I have a financial interest in. 

Pro Contents

Summary. 2

The Scenario Analysis. 4

Base Case - RGE Monitor. 4

Our Optimistc case - Fed's baseline case. 5

Adverse Scenario - L shaped recession. 6

Relative Value: Sum of the Parts. 7

Net Interest Income. 9

Interest Bearing Liabilities. 11

Non-interest Income. 12

Off Balance Sheet Items. 18

Business Segments. 18

Retail Banking. 19

Corporate and Institutional 24

PFPC. 25

The BlackRock Investment. 27

Relative Value: Consolidated. 35

Loan Portfolio. 37

Regulatory Ratios. 46

Charge-offs and Delinquencies. 47

FDIC Supporting Data, Tables, Charts and Graphs. 54