Dick Bove

Goldman Sachs: "V-Shaped Recovery Unlikely"

We have gotten to a point where each country is trying to talk down its own economy in a pursuit of having the worst (DXY constituent) currency. Yesterday it was Bernanke warning about future growth prospects, last night it was Japan, and today it is Goldman Sachs, which is claiming that the economy is really worse than expected. What is the point of all this rhetoric: simple. In the current stock market bubble where the only driving force is the strength, or rather, weakness, of any given underlying currency (read- dollar), and where inflation and deflation pressures are inverted, such that a weak dollar would cause a market melt up, and thus, inflation spillover from overpriced stocks into commodities and other products, the only way to stimulate inflation is to posture having the weakest economy. Whether that is in fact "weakest" or merely most debt-laden, with worthless CRE, housing and other 'assets' serving as collateral on bank balance sheets, we leave to much smarter analysts such as Dick Bove and Meredith Whitney.

Pension Funds, Facing $1 Trillion Gap, Next In Line For Government Pittance

It was just a matter of time: with the government set to take over every aspect of the economy, its next holding will be the perpetually underfunded and soon to be bankrupt State and local pension system. Bloomberg notes that state and local government pensions are underfunded by $1 trillion and may need to seek federal guarantees for their debt. Another insolvent institution, the FDIC, will undoubtedly be happy to guarantee one broke entity's obligations with another broke entity's worthless guarantee. The only question is why it took them so long. And what is a trillion? Nothing more than twenty $50 billion 5 year auctions: the way these have been selling like hot cakes, courtesy the nuclear option that if even one auction were to fail the US emperor would have to seek repudiation or immediate Fedmonetization , we expect this "underfunding" to miraculously become "funding" within a few months. At some point the government should think about funding the $2.3 trillion in consumer debt in a comparable fashion: after allBernanke and his puppet Obama have now released all stops on fiscal and monetary prudence. Who cares if the next administration is saddled with $16 trillion in debt (which is where were are headed in 3 years). After those two, the proverbial flood (of worthless dollar bills).

Market Recap: Wholesale Selling

Today's market action has been essentially one-way wholesale selling of every dollar-denominated asset class (except allegedly Kindles, which are now accepted as Fed discount window collateral (until HR 1207 passes we won't really know), and are rumored to soon have a direct brokerage feed allowing readers to buy (but not sell) Amazon stock). Stocks and bonds (entire curve affected, not just the far end) are both getting pounded, with the VIX climbing almost 10%, as the dollar has been rising all day. Either this is another headfake, this time without a Dick Bove scapegoat, or a dollar renaissance could finally be in the making, with a subsequent drubbing of all dollar-denominated assets. Once again the question is does the world, in its ongoing duel against the US federal reserve, finally feel lucky?

Shanked, Then Cranked. Another Banner Day for Goldman

Yet another day where Goldman scored huge once again. Where is Dick Bove today? No doubt, he must be luxuriating in an Opium Den and Massage Parlor somewhere in Chinatown, cavorting with 17-year old Asian Exotica, after receiving a hefty payout from the Prop Desk boys at Goldman..

Dick Bove's Instamath Gets Him In Trouble, Will No Longer Grace TVs With "Instant Analysis" Presence

As Zero Hedge pointed out first, yesterday Dick Bove performed what should be a FINRA or SEC punishable act, by first pumping the stock of Wells Fargo live on pumpathon central CNBC, and subsequently downgrading it, causing a major market selloff. Today, Bove tries to backtrack and explains the foolishness of his actions, while telling all those stupid enough to follow his recommendations that he will no longer be providing "immediate earnings commentary" (whatever the hell that is) on air. If his "less than immediate commentary," such as his Buy call on Lehman weeks before the bank filed for bankruptcy, is any indication, perhaps Mr. Bove should consider dropping the "commentary" business period.

Dick Bove States "Wells Fargo Is Proving Itself To Be A Standout" Nine Hours Before He Downgrades To A Sell

Can someone please explain why Mr. Bove noted on CNBC that Wells Fargo is proving "itself to be a standout" in the banking industry (2:30 into the clip), that it would help push the market higher, and that is it the big winner in today's earnings derby, a mere nine hours before he ends up downgrading the company to a SELL? Perhaps, the SEC can advise on that particular conundrum.

CIT Launches Two Parallel Restructuring Processes, One Of Which Is Solicitation For Prepackaged Bankruptcy

In a press release just issued, CIT has announced it is launching two parallel restructuring processes, spearheaded by company advisors Evercore (headed by former disgraced Deputy Secretary of the Treasury, Roger Altman), Morgan Stanley and FTI consulting. One of these will be a variety of exchange offers geared to provide a $5.7 billion (at least) reduction in the firm's debt load; in return tendering bondholders would receive a pro rata share of new 4 to 8 year secured notes, and/or shares of newly issued voting stock. We presume this means that any old/existing preferred/common stock become wiped out. In the second process CIT is soliciting bondholders to approve a pre-packaged plan of reorganization, so "the company can proceeds with a voluntary bankruptcy filing." Thus, the company has confirmed that, contrary to Jim Cramer's recommendations, its existing stock is now completely worthless. Dear Jim - you are now dishonorably inducted in the Dick Bove club of "advisors" who vociferously pitch companies merely days ahead of their bankruptcy filing. Welcome and enjoy your stay.

Ohio Attorney General Cordray Joins BofA Litigation Club

“[Bank of America and Merrill Lynch] were concealing billions of dollars in losses with one hand and clearing the way for extravagant bonus payments with the other. This case gives the public pension funds and other shareholders a chance to stand up against Wall Street.” - Richard Cordray, Ohio Attorney General

Moody's Discusses Liquidity Withdrawal and Bank Balance Sheet Risk

"Credit losses continue to put banks’ earnings and profitability under pressure, and the fact that banks’ debt profile is skewed towards short-term maturities makes them vulnerable to market volatility and swings in investor confidence...As we mentioned before, banks have not provisioned for the full amounts of loan and securities losses that they will incur over the coming year, which we expect to reach $470 billion in write-downs by the end of 2010. Approximately only half of this has been recognized to date and we expect earnings to be insufficient to offset these losses during that period, resulting in many banks being unprofitable. The risk premium on bank debt is unlikely to fall in such a context. If anything, it may actually increase, especially for long-term debt which already commands a significantly higher premium. This may, in fact, be the most vulnerable feature of the U.S. banking sector right now." - Moody's

H. Rodgin Cohen's (Failed?) Quest To Backstop Every Bank... Ever (And Usurp Geithner's Throne)

Over the past two weeks many banks issued press releases and opened up the PR spigot to indicate just how stable they all are now that a few have managed to pay down their TARP commitments. This of course, is nothing but a complete farce, and simply yet another chapter in the "consumer confidence" game played by the administration and its financial underlings. In order to see just how much the banking system depends on the continued unlimited wallet of taxpayers and Geithner's printing presses, and how much certain law firms continue to depend on the somewhat less limited wallet of Wall Street, I present an October 31, 2008 letter recently obtained by Zero Hedge, in which Sullivan & Cromwell, Wall Street's #2 favorite law firm (or is that #1: I am sure Wachtell Lipton would have a few choice words with regard to that particular league table rating, although it may be hard pressed to match S&C's $241,975 in donations to the Democratic National Convention), goes to town to make sure that its well-deserving clients including Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Morgan Stanley, State Street and Wells Fargo get to not only have the taxpayers' cake (in perpetuity), but eat more and more of it each day.