CLSA's Mike Mayo Discusses A Financial Industry On Steroids, Lays Out The 10 Main Problems With Banks

Tyler Durden's picture

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Anonymous's picture

I like where youre going with this, but words like material and nonpublic are nearly impossible to prove and tend to get hung on amateurs like Martha Stewart, not the vampire squid. The toothless C student that is the SEC sticks to rubes in its own weight class, it doesnt go courting an ass beating......

Oso's picture

go back and take a look at Mayo's analysis of MER and others.  Its incredible this guy is their "expert" when he was as oblivious to it as every other idiot out there.

AnonymousMonetarist's picture


The banksters are still to bankrupt to go broke.

Steroid's picture

Please don't blame me!

Edna R. Rider's picture

I recall Mayo's big interview on 30 Mar of last year.  He basically said the banks are all pretending to be solvent and that despite that massive rally of bank shares we should unload them immediately.  With that said, after reading this piece I've doubled down on the XLF and KBE.  As a thread above says if the banks are that bad off then they are surely going to be assisted by their friends in government and we have nothing whatsoever to worry about.  I say all this not be sarcastic but to remind myself that for the past 10 months only the most cynical trades have worked.

sgt_doom's picture

Shades of yesteryear!!!!

Sounds almost exactly what Bill Gross (PIMCO), economists like Steve Keen (and many years ago, Prof. Michael Hudson) and a number of other observers said quite some time ago.

Although I do appreciate and thank TD for this blog.  Still excellent!

jmc8888's picture

Six – consumers went along for the ride. Consumer debt to GDP has reached a record level of 100%, versus only 50% 25 years ago. This leveraging created a false illusion of prosperity that allowed for the purchase of homes, cars, and other items, many of which should have never been financed and purchased. It is no secret that everyone from kids, pets, and dead people received solicitations for loans.


Well we used to get paid.  Since the change we got bigger credit lines.


But credit lines can be pulled.  It's much harder to lower someone's pay. 


What really happened is that with increasing credit lines, people sought raises less aggressively.  If they didn't get one, it's ok, you can buy on that credit card that said you were approved for. 


We the American people were suckers.  We accepted no or low raises just so our jobs weren't outsourced.  We had credit cards after all. 


The question that should be asked is, why was the American people so ready to accept this deal? Why weren't they more skeptical.  Simple.  They needed it, and their jobs weren't providing it.  The credit card was tangible, the non-existant raise wasn't. 


But then again if you're making less than 52,000 a year you're working for less than minimum wage if account for inflation.  If you make 100k a year, congrats, you are making merely double minimum wage. 


You say that isn't our minimum wage.  That's right, it's what it should have been if it kept up with inflation.  So why did we use credit cards again? Simple, we're working for peanuts.



Anonymous's picture

Wednesday, January 13, 2010
Obama to Announce $120 Billion TARP Fee

But Team Obama does not want to play up the extent to which the industry has benefitted from public munificence; that only stokes the deserved and correct public anger, which includes the Administration for cutting such a crappy deal with the industry. So it has the PR conundrum of having it be beneficial for political reasons for them to beat up on the financiers, but now being so deeply aligned with them as to make that impossible, save perhaps on a few narrow issues that it hopes will have sufficient peasant-appeasement value. Any full-bore attack would represent an embarrassing change from the Administration’s past fawning posture, and would also require the sacrifice of a senior head or two, presumably starting with Timothy Geithner, to look credible. But Obama seems constitutionally incapable of firing anyone, no matter how much it would serve him to do so.

The sketchy announcement du jour, that Obama will announce a $120 billion TARP fee this week (hhm, conveniently timed to distract attention from the start of the hearings into the crisis and Wall Street bonus announcements) illustrates the bizarre position the Administration is in. Alert readers may recall that Obama was touting the performance of the TARP at his Lehman anniversary speech in September.

Anonymous's picture

"But Obama seems constitutionally incapable of firing anyone, no matter how much it would serve him to do so."

It certainly didn't used to be like that!