Using Veritas to Construct the "Per…

29-04-2017 Hits:17378 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:19633 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:19437 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:20734 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:20769 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:22692 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:14056 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:21983 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:22042 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:22211 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:23804 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:23524 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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Below, please find an udpate to the work published on WFC. See the Doo Doo 32 Drill Down and the Forensic Analysis for a background of my viewpoints on this company.

Wells Fargo & Company – Q2 2008

Income statement analysis

In 2Q2008, Wells Fargo revenues increased 16% to $11,429 mn from $9,981 mn in 2Q2007 off 21% increase in net interest income and 10% increase in non-interest income. The banks net interest income increased 21% to $6,278 mn as a result of 33% decline in interest expense to $2,269 mn. The banks interest income remained nearly flat at $8,547 mn in 2Q2008 compared with $8,573 mn in 2Q2007. Overall the banks net interest margin improved 23 basis points reaching 4.92% in 2Q2008 as a result of decline in funding cost as a result of high proportion of checking and transaction accounts in their core deposit mix. Banks non-interest income increased 10% y-o-y to $ 5,181 mn primarily off higher fees from mortgage banking partially offset by higher losses on debt securities and reduction in net gains from equity investments. However Wells Fargo revenues after provisions declined 8% as a result of 318% increase in provision for credit losses to $3,012 mn in 2Q2008, up from $720 mn in 2Q2007 signaling continued deterioration in the credit quality of the banks loan portfolio.

Wells Fargo’s non-interest expense increased by a nominal 2% to $5,860 mn in 2Q2008  due to increased salary (6%), occupancy cost (8%) and other expenses (6%) partially offset by decline in incentive compensation (10%) and operating lease (31%). As a result of increased revenue growth the banks efficiency ratio improved 51.1% in 2Q2008 from 57.9% in 2Q2007. Overall the banks net income declined 23% to $1,753 mn or (0.53 per share) in 2Q2008 compared with $2,279 (or 0.67 per share) in 2Q2007 as mounting provisions continued to create pressure on earnings.

Credit metrics

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Wells Fargo credit metrics continued to deteriorate in all aspects as seen from the table above. In 2Q2008, 90 days loans past due (an indicator of future charge-off and delinquency) increased 9.1% q-o-q and 63.9% y-o-y. Loans past due 90 days and non-performing assets represented a significant 3.7% and 10.9% of shareholder’s equity at the end of 2Q2008, rising alarming questions about the magnitude of potential impact relating to worsening credit situation. As a result of rising charge-off, Wells Fargo had increased its provisions to $3.0 bn (0.77% of average loans) in 2Q2008 compared to 0.7 bn (0.22% of average loans). Wells Fargo had changed its off policy from 120 days to 180 days for its home equity portfolio enabling it to defer $265 mn charge-off in 2Q2008. However despite this change in charge-off policy, net charge-off increased to 1.55% of average loans in 2Q2008 compared to 0.87% in 2Q2007.