While chatting with Herb Greenberg before my interview at CNBC on the banks, he asked me why I was short the banks, JPM in particular (JP Morgan’s 3rd Q & Just How XYZ Bank Can Never Go Out of Business!!!). I told him that I believe they are overly optimistic about the reserve thingy (Big Banks Will Pay for Optimism), the mortgage put back cosequences (JP Morgan’s Analysts Agree with BoomBustBlog Research, Contradict CEO Jamie Dimon’s Conference Call and The Putback Parade Cometh: Pimco, New York Fed Said to Seek Bank of America Repurchase of Mortgages) and real estate in general. I also said that in the scheme of things, Jamie Dimon appears to be, by far, the most effective manager of the big banks, and JPM seems to be the best run of the big banks. He negotiated a literal coup with Bear Stearns purchase, getting the billion dollar head quarters for free, the company for $10 per share and government backing for the legacy assets. He made a mistake with WaMu by not demanding a deeper discount. I know it seems like 28% or so off seems like a good deal, but it was not – and I clearly stated it several times (Is JP Morgan Taking Realistic Marks On Its WaMu Portfolio Purchase? Doubtful!). I just want to make this clear. There is nothing personal here, at least in terms of investments and financial analysis. The stream of events are of such grave consequence that this goes beyond mere finance, though. Why? This country has been “Bamboozled by the Banking Industry”, but the “Chickens Are Coming Home to Roost”. Let me explain…
Throughout most of 2009, while 10%+ of unemployed middle America stopped paying their mortgages, busy standing in line for shiny fat margin iThingies while in rabid debate about how many pieces of tail Tiger Woods may or may have not hit (yes, that story got 2160 tweets and 375 comments on how well endowed “the Tiger” is – would you dare to bet that this article on a potential depression will get even one third of that?) the greatest mass fraud of this lifetime against said persons was underway.
This should be played in 720 HD full screen mode
Mr. and Mrs Middle America, you’ve been Had, you’ve been Took, Bamboozled, Hoodwinked, led Astray, run Amok (yes, YOU have, see You’ve Been Bamboozled, Hoodwinked and Lied To! Here’s the Proof. What Are You Going to Do About It? and click your rung in the socio-economic ladder, ex. your “social class”). From rating agency subprime madness to stress tests designed not to apply any stress to robo-signing and beyond (Mortgage Putbacks, the Harbinger of the Collapse that Will Dwarf 2008!) the financial and political elite appear to be running a real time experiment to demonstrate how numb they can prove the mainstream populace to really be? Will the experiment fail this time around? After all, things are different with the Web, and independent thought rocketed around the world in the form of blogs. We shall see what becomes of this real time socio-economic lab session, we shall see!
A few have been emailing me looking for a bio. I believe my track record should speak louder than any paragraph or two about my prior occupation(s). Credibility should come from accomplishment, not pedigree, no? Click here to find out who I am what I have done. Be sure to scroll all the way down to the bottom of the page.
- the updated JP Morgan forensic valuation (yes, what I think it is actually worth) for subscribers (there’s a surprise or two in here that I’ll reveal to the public)
- the Goldman Sachs forensic valuation update
- and my proprietary research on the foreclosure backlog this one will be a doozy)!