Research, Mortgage Banking, Legislation, Law & the Government, Investment Banks, Heard on the Street, Global Macro, Financial Shenanigans, Current Affairs, Commercial Banks, Capital Markets, Banking	21 Nov 2008 12:00 AM
I told you so, from Doo Doo to TARP and back to Doo Doo by Reggie Middleton	Comment (0)

First, read the "Doo Doo 32" post, then the "Anatomy of a Sick Bank", then reference the TARP list (corporate welfare) below (source:US Treasury Emergency Economic DEstabilization Act). Ya' see anybody familiar??? It's almost like having a crystal ball - filled with doo doo! I actually believe this particular move was necessary on behalf of the Treasury, and was what I recommended when Paulson originally released his 3 page tome of economic domination (see WARNING: the Emergency Economic Stabilization Act of 2008 may significantly DESTABILIZE the economy!, Shock & Awe: redux and Reggie Middleton asks, "Do you guys know who you're messin' with?"). After reading Doo Doo 32 and the Sick Bank articles, no one can honestly say that they didn't know who was to end up on this list.

Date	Seller	Transaction Type	Description	Price Paid	Pricing Mechanism
Name of Institution	City	State
10/28/2008	Bank of America Corporation	Charlotte	NC	Purchase	Preferred Stock w/Warrants	$15,000,000,000	Par
10/28/2008	Bank of New York Mellon Corporation	New York	NY	Purchase	Preferred Stock w/Warrants	$3,000,000,000	Par
10/28/2008	Citigroup Inc.	New York	NY	Purchase	Preferred Stock w/Warrants	$25,000,000,000	Par
10/28/2008	The Goldman Sachs Group, Inc.	New York	NY	Purchase	Preferred Stock w/Warrants	$10,000,000,000	Par
10/28/2008	JPMorgan Chase & Co.	New York	NY	Purchase	Preferred Stock w/Warrants	$25,000,000,000	Par
10/28/2008	Morgan Stanley	New York	NY	Purchase	Preferred Stock w/Warrants	$10,000,000,000	Par
10/28/2008	State Street Corporation	Boston	MA	Purchase	Preferred Stock w/Warrants	$2,000,000,000	Par
10/28/2008	Wells Fargo & Company	San Francisco	CA	Purchase	Preferred Stock w/Warrants	$25,000,000,000	Par
10/28/2008	Merrill Lynch & Co., Inc.	New York	NY	Purchase	Preferred Stock w/Warrants	$10,000,000,000	Par
11/14/2008	Bank of Commerce Holdings	Redding	CA	Purchase	Preferred Stock w/Warrants	$17,000,000	Par
11/14/2008	1st FS Corporation	Hendersonville	NC	Purchase	Preferred Stock w/Warrants	$16,369,000	Par
11/14/2008	UCBH Holdings, Inc.	San Francisco	CA	Purchase	Preferred Stock w/Warrants	$298,737,000	Par
11/14/2008	Northern Trust Corporation	Chicago	IL	Purchase	Preferred Stock w/Warrants	$1,576,000,000	Par
11/14/2008	SunTrust Banks, Inc.	Atlanta	GA	Purchase	Preferred Stock w/Warrants	$3,500,000,000	Par
11/14/2008	Broadway Financial Corporation	Los Angeles	CA	Purchase	Preferred Stock w/Warrants	$9,000,000	Par
11/14/2008	Washington Federal Inc.	Seattle	WA	Purchase	Preferred Stock w/Warrants	$200,000,000	Par
11/14/2008	BB&T Corp.	Winston-Salem	NC	Purchase	Preferred Stock w/Warrants	$3,133,640,000	Par
11/14/2008	Provident Bancshares Corp.	Baltimore	MD	Purchase	Preferred Stock w/Warrants	$151,500,000	Par
11/14/2008	Umpqua Holdings Corp.	Portland	OR	Purchase	Preferred Stock w/Warrants	$214,181,000	Par
11/14/2008	Comerica Inc.	Dallas	TX	Purchase	Preferred Stock w/Warrants	$2,250,000,000	Par
11/14/2008	Regions Financial Corp.	Birmingham	AL	Purchase	Preferred Stock w/Warrants	$3,500,000,000	Par
11/14/2008	Capital One Financial Corporation	McLean	VA	Purchase	Preferred Stock w/Warrants	$3,555,199,000	Par
11/14/2008	First Horizon National Corporation	Memphis	TN	Purchase	Preferred Stock w/Warrants	$866,540,000	Par
11/14/2008	Huntington Bancshares	Columbus	OH	Purchase	Preferred Stock w/Warrants	$1,398,071,000	Par
11/14/2008	KeyCorp	Cleveland	OH	Purchase	Preferred Stock w/Warrants	$2,500,000,000	Par
11/14/2008	Valley National Bancorp	Wayne	NJ	Purchase	Preferred Stock w/Warrants	$300,000,000	Par
11/14/2008	Zions Bancorporation	Salt Lake City	UT	Purchase	Preferred Stock w/Warrants	$1,400,000,000	Par
11/14/2008	Marshall & Ilsley Corporation	Milwaukee	WI	Purchase	Preferred Stock w/Warrants	$1,715,000,000	Par
11/14/2008	U.S. Bancorp	Minneapolis	MN	Purchase	Preferred Stock w/Warrants	$6,599,000,000	Par
11/14/2008	TCF Financial Corporation	Wayzata	MN	Purchase	Preferred Stock w/Warrants	$361,172,000	Par

Research, Consumer Finance, Commercial Banks, Banking	11 Nov 2008 12:00 AM
Another contrarian name brand trade bears fruit by Reggie Middleton	Comment (25)

When I first introduced my American Express research in June, I expected (and was not disappointed) many to tug the name brand line in saying that Amex was the cream of the crop, they deal only with high end consumers, large business accounts, yada yada yada. Name brand marketing, it seems, fools many investors.

If one were to peruse the reseach in the Amex link above, you will see where practically each and every admonition has come to fruitition. Hopefully, this in combination with the events of the recent past should convince readers that hard core fundamental and forensic research trumps name branding every time - all the time. As with my Goldman Sachs research, Morgan Stanley research, and many other name brands, I was (to my knowledge) the only one bearish on these companies at the beginning of this year where the share prices were still high enough to profitably short or get out of (if you have a "long only" mandate).

From Bloomberg:

American Express Co. won Federal Reserve approval to convert to a commercial bank, gaining access to funds as credit losses build and sales of asset-backed bonds plummet.

The Fed waived a 30-day waiting period on the application ``in light of the unusual and exigent circumstances affecting the financial markets,'' according to a statement released today in Washington. Chairman Ben S. Bernanke and his colleagues unanimously voted for the action.

Credit-card holders failed to repay loans in the third quarter at almost twice the rate of a year earlier, New York- based American Express said last month. With defaults rising along with the unemployment rate, October marked the first month since 1993 that card companies were unable to sell bonds backed by customer payments.

``That business has totally dried up,'' said Frederic Dickson, who helps oversee about $20 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. ``If I were a shareholder, it wouldn't send a very warm and fuzzy message to me,'' he said today in a phone interview.

American Express, the largest U.S. credit-card company by purchases, joins former investment banks Goldman Sachs Group Inc. and Morgan Stanley, which were allowed by the Fed in September to become commercial banks.

Strategy, Research, Commercial Banks	10 Nov 2008 12:00 AM
The name brand contrarian plays have bore sweet fruit by Reggie Middleton	Comment (13)

For those who were doubtful of my research and stated positions in the big name brand banks, I think a recap is in order. I have taken strong bearish positions on a few of the most revered name brands, to the dismay of people who should really know better than to doubt my investment acument. Before we get to the performance of my contrarian name brand play, let's peruse a recent Bloomberg article extract:

Fed Defies Transparency Aim in Refusal to Identify Bank Loans

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.

I can give you a few guesses where that money probably went. Just peruse the performance post and mark the commercial and investment bank names on the list, starting with the Riskiest Bank on the Street and the Golden Boys mentioned below, then work your way down to The Anatomy of a Sick Bank!. I am sure some of those big name brands are in a lot more trouble than they let on.

Now, on to how my contrarian name brand plays have been doing...

Goldman Sachs with the name brand conscious (yet financially unconscious) investors saying they are too well connected to fall, smarter than the rest, best name brand on the street, blah blah, blahhh. For non-subscribers, here is a dated Goldman analysis available for free download pdf professional_gs_report_sample 350.12 Kb. Of course, 6 or 7 months later the sell side banks are dropping estimates on Goldman and Morgan, but you heard it in the beginning of the year from me. GS is currently in the mid 70's, down from one hudred and eighty dollars when the first report came out.

From Bloomberg... Goldman, Morgan Stanley Earnings Estimates Reduced by JPMorgan Nov ... ... before converting to bank holding companies in September, had their fourth-quarter and 2009 earnings estimates cut by JPMorgan Chase & Co. Goldman may lose 58 ...

From Reggie Middleton...

1. Reggie Middleton on Risk, Reward and Reputations on the Street: the Goldman Sachs Forensic Analysis
(Archived/Reggie Middleton's Boom Bust Blog/MyBlog)

Here is my detailed opinion on Goldman Sachs. Be sure to review my precursor to this report: Goldman Sachs Snapshot: Risk vs. Reward vs. Reputations on the Street. Anybody who is interested in how I

Wednesday, 23 July 2008

2. Goldman Sachs valuation update: Buffet's strategic investment and public offering
(Archived/Reggie Middleton's Boom Bust Blog/MyBlog)

... Fed keeps banks afloat as money market crisis deepens - what banks do you think they are referring to??? Goldman Sachs and Morgan Stanley. The run on the prime brokerage accounts of Morgan Stanley h...

Thursday, 25 September 2008