Reggie Middleton is an entrepreneurial investor who guides a small team of independent analysts, engineers & developers to usher in the era of peer-to-peer capital markets.
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reggie@veritaseum.com
Here's a spattering of news that was obvious two years ago, yet released today...
Stocks Fall Amid Europe Downgrade Concern, JPMorgan -Yes, several European countries will be downgraded again - the problem is they should have been downgraded again quarter before last! Reference the entire Pan-European sovereign debt crisis seriesand then consider the query, "What Is More Valuable, The Opinion Of A Major Rating Agency Or The Opinion Of A Blog? Go Ahead, I DARE You To Answer!"
U.S. Trade Deficit Widens Beyond Forecast - Yet US treasuries are still being bid at negative yields. Is this sustainable? German bunds are doing this very same levitation/flight to "hope for quality" act as I type this. What happens when people start to pull out their calculators and spreadsheets? Reference The Biggest Threat To The 2012 Economy Is??? Not What Wall Street Is Telling You...
JPMorgan Misses on Revenue Outlook; Shares Fall- As I have explicitly outlined for several quarters. My followers should realize what my subscribers already know, and that is JPM missed despite lowered earnings expectations and synthetically contrived results borne from accounting gimmicks and games. That goes to show you how bad off the nations big banks really are! I know certain name brand analysts have been bullish on US banks, but... Question the Quality Of BoomBustBlog Bank Research, Will You? Bove and Fitch Follow "The Blog"!
And in case you didn't know, There's Something Fishy at the House of Morgan
You can even download your own Independent Look into JP Morgan here...
Click graph to enlarge
RBS Capitulation Sets Blueprint for EU Banks- Honestly, are we just figuring this out now? See "BoomBust BNP Paribas?" (it is strongly recommended that you review this article if you haven't read it already) I started releasing snippets and tidbits of the proprietary research that led to the BNP short, namely
Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers. See also The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!As excerpted:
Below is a chart excerpted from our most recent work showing the asset/liability funding mismatch of a bank detailed within the report. The actual name of the bank is not at issue here. What is at issue is what situation this bank has found itself in and why it is in said situation after both Lehman and Bear Stearns collapsed from the EXACT SAME PROBLEM!
Note: These charts are derived from the subscriber download posted yesterday, Exposure Producing Bank Risk (788.3 kB 2011-07-21 11:00:20).
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The problem then is the same as the European problem now, leveraging up to buy assets that have dropped precipitously in value and then lying about it until you cannot lie anymore. You see, the lies work on everybody but your counterparties - who actually want to see cash!
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Using this European bank as a proxy for Bear Stearns in January of 2008, the tall stalk represents the liabilities behind Bear's illiquid level 2 and level 3 assets (including the ill fated mortgage products). Equity is destroyed as the assets leveraged through the use of these liabilities are nearly halved in value, leaving mostly liabilities. The maroon stalk represents the extreme risk displayed in the first chart in this missive, and that is the excessive reliance on very short term liabilities to fund very long term and illiquid assets that have depreciated in price. Wait, there's more!
The green represents the unseen canary in the coal mine, and the reason why Bear Stearns and Lehman ultimately collapsed, as seen in "The Fuel Behind Institutional “Runs on the Bank" Burns Through Europe, Lehman-Style":.
And finally... France Loses AAA Status as S&P Wields Ratings Ax
The reason??? France's banking system's solvency issues are obvious, and the leverage into Italy is foreboding. The socialist state is bound to do more bank bailing in the very near future, and that ain't cheap! Of course S&P takes action 7 months after BoomBustBlog warns paying clients!
Wednesday, 03 August 2011 France, As Most Susceptble To Contagion, Will See Its Banks Suffer
In case the hint was strong enough, I explicitly state that although the sell side and the media are looking at Greece sparking Italy, it is France and french banks in particular that risk bringing the Franco-Italia make-believe capitalism session, aka the French leveraged Italian sector of the Euro Ponzi scheme down, on its head. See also The Fuel Behind Institutional “Runs on the Bank” Burns Through Europe, Lehman-Style!
I then provided a deep dive of the French bank we feel is most at risk. Let it be known that every bank remotely referenced by this research has been halved (at a minimal) in share price!
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- French Bank Run Forensic Thoughts - Retail Valuation Note - For retail subscribers
- Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers
