Dick Bove

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.

If this is the kind of garbage data that moves the market, then fuck this shit. Click here for a primer on Dick Bove.

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.

“[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

"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

If you thought the entire investing world had lost sight of Dick Bove after his Buy recommendation on Lehman stock on August 21, 2008... You were right. Which is why Dick can not contain his excitement at seeing media exposure after someone still apparently cares what the Rochdale analyst has to say.

The economic mavens in DC have totally lost it. Now an increase in unemployment will allegedly lead to a rebound in GDP??? And just who is supposed to buy this garbage any more?

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.

-Bove revises Citigroup shr view to USD 0.14 from USD 0.13 for 2010, to USD 0.34 from USD 0.32 in 2011
-Bove sees USD 11bln Q2 gain from Smith Barney venture with Morgan Stanley
-Bove rates Citigroup buy

But again, when CNBC makes fun of you, have fun supergluing the few micro pieces of credibility you may find shattered on the floor.

Everyone else does, why should David be an exception. Fast fwd to 2:20 - "You want a good laugh, take a look at Dick Bove's latest report." Dick - when CNBC makes fun of you for smoking the "shutes" you know you have reached a new low on the propaganda pole. At least that DC advisory job beckons - better make use of it quick. The next election is in just over 3 years.

In what is sure to blow Barney Frank's lid wide open, Moody's (never one too far behind competitor S&P, except when it comes to TALF ratings) announced earlier it was preparing a major, multi-notch rating downgrade of the state if it does not produce a budget any time soon.

• Dick Bove, who still may be bullish on Lehman, says to Buy Citigroup, $4 Target, sees 2010 EPS of $0.13!

• Dick Bove, who still may be bullish on Lehman, says to Buy Citigroup, $4 Target, sees 2010 EPS of $0.13!
• Companies of Commercial real estate "billionaire" Halabi default on $1.9 billion in debt after 50% drop in property value (Bloomberg)
• E.U. leaders say no more stimulus (Marketwatch)
• The two sides of the inflation debate (Morgan Stanley)

MS analysts, fully blown out of the water with their prior prediction of a market top at 850, have decided to step into the bailout-infested Oracular waters yet again, this time saying that 950 is the absolute, positive top. How does the house of Mack come up with its conclusion? Simple - by cranking up 2009 S&P earnings by a whopping 20% from 40 to 51, and claiming the earnings trough will occur in Q3 2009.

• Must read: Algorithmic programs that will be eliminated (SMB)
• Must read: The Bush doctrine, economic warfare and your investment portfolio (FSU, hat tip Wickern)