Continue reading Waste Management (WMI) will recycle trashed bank ticker

Waste Management (WMI) will recycle trashed bank ticker originally appeared on BloggingStocks on Fri, 31 Jul 2009 14:00:00 EST. Please see our terms for use of feeds.

Over the past few weeks, we've seen some of the extensive damage done to the mega private equity operators, such as the Blackstone Group LLP (NYSE: BX) and KKR.

Now, according to a report from Reuters, we've got the details on the performance of TPG. And, of course, it's ugly (interestingly enough, TPG's roots are in the distressed investing category).

Continue reading TPG gets crushed

TPG gets crushed originally appeared on BloggingStocks on Thu, 19 Mar 2009 17:00:00 EST. Please see our terms for use of feeds.

If you were among the millions of unemployed workers looking for a job in 2009, would you accept a 50% pay cut? That's the question that Shaun Chedister faced last year, according to CNNMoney. And his answer, after spending eight months looking for a new job, was yes. Unfortunately for Chedister, that pay cut meant giving up the lifestyle he had enjoyed before he got laid off.

Chedister had been making $125,000 at Washington Mutual but he was laid off from that job at the end of 2007. He spent eight months looking for a job to support his wife and four children. He ultimately accepted an offer from Ernst & Young as an executive administrator -- the catch? The job paid slightly more than half of what he was making before -- $66,000.

The problem was that Chedister's unemployment had run out and he still had bills to pay. Chedister is looking for a more affordable house and in December one of his cars was repossessed after he got behind on the payments. This hurts but once you lose a job you have two choices: keep looking or accept what's offered -- and that offer is likely to be less than what you made before.

Continue reading Would you accept a 50% pay cut to get a job?

Would you accept a 50% pay cut to get a job? originally appeared on BloggingStocks on Fri, 02 Jan 2009 11:00:00 EST. Please see our terms for use of feeds.

If you look at major private equity firms, they have huge amounts of capital ready for investment. So, when the credit crunch subsides, there should be a revival of buyout activity, right?

Not necessarily. Keep in mind that the amounts of capital available may be much lower. The reason: private equity firms usually have so-called capital calls. That means, over time they notify investors to pony up the required amounts of capital.

True, private equity firms are legally required to make the disbursements. But, if there is resistance, will private equity firms actually sue their investors?

Well, this is a big dilemma right now. Just look at TPG Capital. That is, according to The Wall Street Journal, the firm is paring back the capital requirements on its $20 billion fund. In all, it comes to about 10% of the total amount.

Something else: TPG will cut its management fees by 10%.

Of course, TPG has suffered some black eyes this year, such as its disastrous investment in Washington Mutual as well as big bets on bank debt.

Of course, the firm is not alone. Other tier-1 players are also sitting on some busted deals.

TPG's actions are certainly precedent setting - and are likely to be followed by its peers as we go into 2009. And, as a result, expect continued tepidness for deal-making.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

TPG caves in to investors originally appeared on BloggingStocks on Tue, 23 Dec 2008 00:00:00 EST. Please see our terms for use of feeds.

Big sucking sound as WaMu white collars get the axe in Seattle originally appeared on BloggingStocks on Wed, 03 Dec 2008 14:40:00 EST. Please see our terms for use of feeds.

Sign says Washington Mutual is a has-been originally appeared on BloggingStocks on Tue, 21 Oct 2008 17:15:00 EST. Please see our terms for use of feeds.

Continue reading The beggars of Wall Street

The beggars of Wall Street originally appeared on BloggingStocks on Mon, 06 Oct 2008 10:58:00 EST. Please see our terms for use of feeds.

In what I feared might become a regular feature here, the Federal Deposit Insurance Corporation (FDIC) arranged for the takeover of the 13th failed bank of 2008 Thursday. As I posted, the FDIC likes to close banks on Friday after hours so it can reopen as branches of the acquiring bank on the following Monday morning. But since this is history's biggest bank failure, the FDIC couldn't wait for the weekend. The bank in question is the $310 billion (assets) Washington Mutual (NYSE: WM).

This is history's biggest bank failure -- it's almost eight times bigger than the previous record holder, Continental Illinois. In this case, JPMorgan Chase (NYSE: JPM) was the rescuer, buying WaMu from the FDIC. This follows JPMorgan's purchase of Bear Stearns back in March in which the Federal Reserve provided a $29 billion loan. But this deal will cost JPMorgan far less -- a mere $1.9 billion, and it will write down WaMu's loan portfolio by 10% in the process. To further bolster its position, JPMorgan will raise $8 billion in capital.

What does JPMorgan get for all this? Branches for one thing -- 5,400 in 23 states -- and it will shutter 10% of the combined branches. What JPMorgan does not get is much of the junk that WaMu carried and by that I refer to "senior unsecured debt, subordinated debt, and preferred stock of WaMu's banks, any assets or liabilities of the holding company, Washington Mutual Inc.; or [WaMu's] lawsuits."

Continue reading Bank Failure Count: WaMu, history's biggest, is 2008's 13th bank failure

Bank Failure Count: WaMu, history's biggest, is 2008's 13th bank failure originally appeared on BloggingStocks on Fri, 26 Sep 2008 08:30:00 EST. Please see our terms for use of feeds.

WaMu forced into acquisition by J.P. Morgan originally appeared on BloggingStocks on Thu, 25 Sep 2008 21:51:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: The beauty of the plan

Cramer on BloggingStocks: The beauty of the plan originally appeared on BloggingStocks on Tue, 23 Sep 2008 08:58:00 EST. Please see our terms for use of feeds.

Citigroup (NYSE: C) is considering buying Washington Mutual (NYSE: WM), the nation's largest savings and loan. It sounds like Sandy Weill is back in charge and trying to create the kind of financial conglomerate he built in the 1990s and earlier this decade.

According to The Wall Street Journal, "Citigroup and several other banks are reviewing the Seattle thrift holding company's books, which are packed with shaky mortgages."

Just a few months ago, Citi CEO Vikram Pandit was talking about cutting the big bank's expenses by 20% and selling off "non-core" assets. Now he is thinking about buying the most troubled large financial company in America.

Pandit would be better off staying with his first plan. There is a reason WaMu's stock got down to under $2. If mortgage defaults move up and housing prices move down, the mortgage company's financial situation could get much worse.

Pandit is proving to be a "flavor-of-the-month" CEO. Investors never know what he plans to do tomorrow, let alone what he wants to do with Citi over the next year.

Douglas A. McIntyre is an editor at 247wallst.com

As Citigroup looks at buying Washington Mutual, 1+1=0 originally appeared on BloggingStocks on Fri, 19 Sep 2008 08:45:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: Goldman Sachs upgrades; WaMu says "we'll be fine"

Chasing Value: Goldman Sachs upgrades; WaMu says "we'll be fine" originally appeared on BloggingStocks on Fri, 12 Sep 2008 13:43:00 EST. Please see our terms for use of feeds.

• Mike said; Ya, Wamu... Great stock. Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of WM.

Chasing Value: Not -- WaMu one week later - ouch! originally appeared on BloggingStocks on Thu, 11 Sep 2008 13:16:00 EST. Please see our terms for use of feeds.

For several years I held Washington Mutual (NYSE: WM) stock, happy with some slow growth and a very sizable dividend yield. It was so stable for so long that I and others included it in our 'safe havens' selections. This eventually turned into a disaster with the collapse of the financial sector and WaMu along with it.

There is quite a lot of debate as to whether it is time to get back into financial stocks or if we are in for years of more torment in the sector. The bad news and write-downs certainly have not abated recently.

My colleague Zac Bissonnette posted Value investors leap out of financials: sign of a bottom? raising the issue of capitulation by those who might have been hanging on to a shred of hope for a turnaround. Now they are taking their losses. Perhaps they will take advantage of the 30-day rule and get back in next month after booking the losses.

Continue reading Chasing Value: Are you watching WaMu?

Chasing Value: Are you watching WaMu? originally appeared on BloggingStocks on Fri, 05 Sep 2008 12:57:00 EST. Please see our terms for use of feeds.

• Citigroup Inc. (NYSE: C) -- $18.45 down 63% from its 52 week high of $49.90; closed yesterday at $19.11, UP 3.57%
  
• Lehman Br Holdings (NYSE: LEH) -- $16.88 down 75% from its 52 week high of $67.73; closed yesterday at $16.13, down 4.44%
• Merrill Lynch (NYSE: MER) -- $26.25 down 67% from its 52 week high of $79.72; closed yesterday at $27.75, UP 5.7%.
• MBIA Inc (NYSE: MBI) -- $4.92 down 93% from its 52 week high of $68.98; closed yesterday at $16.14, UP 228%.
• E*TRADE (NASDAQ: ETFC) -- $3.06 down 84% from its 52 week high of $19.39; closed yesterday at $3.25, UP 6.2.
• East West Bancorp (NASDAQ: EWBC) -- $12.46 down 67% from its 52 week high of $20.88; closed yesterday at $13.01, UP 4.4%.
• Gramercy Capital (NYSE: GKK) -- $6.72 down 77% from its 52 week high of $29.45; closed yesterday at $6.80, UP 1.2%.
• Newcastle Investment (NYSE: NCT) -- $5.88 down 72% from its 52 week high of $20.88; closed yesterday at $6.89, UP 17.18%.
• Wachovia Corp. (NYSE: WB) -- $15.70 down 70% from its 52 week high of $53.10; closed yesterday at $16.65, UP 6%.
• Washington Mutual (NYSE: WM) -- $4.43 down 89% from its 52 week high of $39.48; closed yesterday at $4.24, down 4.29%

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of MBI, NCT & WM.

Chasing Value: Financials risky but up 26% originally appeared on BloggingStocks on Wed, 03 Sep 2008 14:15:00 EST. Please see our terms for use of feeds.

The stock market was down yesterday and it is down again today. Bearish sentiment is roaming through Wall Street right now, so I thought I would look back on another occasion when the market was going through similar turmoil and I wrote about the following eight stocks, which I thought would be "safe havens" in such a storm.

Six of the eight did well and two did not, and of course one of those two was a disaster. Among the losers, I do not think anyone is fretting about UPS, which is still one of the few triple-A rated companies along with Berkshire Hathaway. It has been well reported that the slowing economy and higher fuel prices have been the major culprits affecting UPS's earnings. In the case of WaMu, it's demise has also been well reported, but at the time I recommended it WaMu had a stellar reputation of growth and high yield for over two decades. There is no hiding, it turned out to be a lousy pick and an ANTI-SAFE Haven

NOT SAFE:

United Parcel Service (NYSE: UPS) closed Monday at $65.30 down from $78.40; a 16.71% loss

Washington Mutual (NYSE: WM) closed Monday at $4.21 down from $45.50; a 98% loss.

Fortunately the remaining six picks have done very, very well. If you had bought the pool, the average gain over the last two years would have been 7.14%. Adding the dividends over the two years would have raised this to 13.14%.

Continue reading Serious Money: How safe were BRK, BUD, PG, SO, & UPS?

Serious Money: How safe were BRK, BUD, PG, SO, & UPS? originally appeared on BloggingStocks on Tue, 19 Aug 2008 15:07:00 EST. Please see our terms for use of feeds.

Yesterday the Dow Jones Industrial Average was down 225, so I decided to peg the financial stocks I wrote about investing in as a pool. We are often accused of bragging on the good days and having memory loss on the bad so I wanted to be transparent and forthright on the downside.

The market is rebounding as I write so I expect the news is even better. Although, this pool of stocks beat the market so far in the short run, I hope to track this group for a year, or at least until Major League Baseball's spring training opens in 2009.

If you want to track the story with me the first post was Serious Money: 10 finance stocks as the market bounces. I remain stubbornly optimistic that this is a buying opportunity and investors will be sorry they did not have the courage to buy stocks when they were hated. The follow-up was Serious Money: Tempting fate with 10 financials

The initial prices are as of July 29, 2008.

Continue reading Serious Money: Wisdom or folly -- 10 financials updated

Serious Money: Wisdom or folly -- 10 financials updated originally appeared on BloggingStocks on Fri, 08 Aug 2008 13:12:00 EST. Please see our terms for use of feeds.

Oh, happy day. Mortgages issued in the first half of 2007 are going bad at a rate much faster than those issued in 2006. According to The Wall Street Journal, data from the "Federal Deposit Insurance Corp. shows that 0.91% of prime mortgages from 2007 were seriously delinquent after 12 months, meaning they were in foreclosure or at least 90 days past due. The equivalent figure for 2006 prime mortgages was just 0.33% after 12 months."

The news means that earnings could get worse at large banks that have mortgage loans at the center of their businesses. Wachovia (NYSE: WB) and Washington Mutual (NYSE: WM) come to mind. That should be especially interesting for investors in the two companies. Over the last month, both stocks have recovered. Washington Mutual is up about 2% and Wachovia has risen a remarkable 30%.

Wall Street had hoped that bank stocks, especially those with businesses focused on the mortgage markets, would improve as subprime loans worked their way through the system. That may have worked if prime mortgages weren't going bad at an increasing rate these days and loans from 2007 didn't appear to present more risk than those from earlier periods.

All of that is to say that a stock like Wachovia, which fell as low as $7.80 and then recovered to $18.41, is not out of the woods. As a matter of fact, it may be heading back in.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Mortgage problem gets much worse, another threat to financial system originally appeared on BloggingStocks on Thu, 07 Aug 2008 09:40:00 EST. Please see our terms for use of feeds.

After the market closed last night, with the Dow Jones Industrial Average rebounding from Monday's notable drop and ending the trading day at 11,397.56, up 266.48 (+2.39%), I posted Serious Money: 10 finance stocks as the market bounces. This is the follow-up post listing the full pool of speculative stocks that as a group I believe will beat the overall market in the next 12 months.

The prediction business is thankless and the speculative business is even worse; it is often painful. I usually refrain from this activity but today I play the contrarian in a Sir John Templeton (RIP) sort of way, jumping into the stock market's worst performing sector with both feet. I believe the market is at or near a bottom and this summer is the time to buy.

Looking for a break in the clouds, yesterday I started choosing ten stocks knowing that three or four may go to zero, a few more will survive with modest gains, and three or four will rise, not returning to their old glory soon but more than covering the ones that fail. The first four picks have been bleeding all over Wall Street for a year now and the blood-letting is not done yet.

Initially I was looking for stocks that had fallen at least 70%. After reviewing my figures, I have compromised and changed that to 63% so that I could include some of the major companies like Citigroup Inc. (NYSE: C) that are broadly held and have strong reader interest. Prices are as of July 29, 2008.

Continue reading Serious Money: Tempting fate with 10 financials

Serious Money: Tempting fate with 10 financials originally appeared on BloggingStocks on Wed, 30 Jul 2008 13:52:00 EST. Please see our terms for use of feeds.

In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

Seattle-based Washington Mutual, Inc. (NYSE: WM) was doing just fine on the charts, thank you, until the entire financial-services sector was upended in 2007 by the twin evils of caustic subprime loans and the ensuing credit crunch.

While it's an honor it would probably just as soon not claim, WaMu is a prime example of an otherwise decent stock that got slammed by a macroeconomic stealth bomb.

What went wrong? At No. 9 on our list of SPX stragglers, WM shed 83% of its value during the 10-year period that concluded on June 30, 2008. Prior to June 2007, the stock was trending higher along support from its 50-month moving average. Double-top resistance near $46 proved difficult to surmount, but WM was holding up respectably ... that is, until the first shock waves of the credit crunch hit in spring 2007.

Following news of massive subprime-related losses at hedge funds owned by Bear Stearns, Wall Street's attention was suddenly riveted to mortgage loans and the banks that carried them on their balance sheets. During WaMu's first-quarter report, chairman and CEO Kerry Killinger attempted to reassure anxious investors with the optimistic statement, "Over the past 12 months, we have taken a number of prudent actions to reduce our exposure to the subprime mortgage industry ... [which] limited our exposure to the mortgage market's downturn and position us well to expand and grow as market conditions improve."

Continue reading Worst 10-year performers: Washington Mutual buried by bad-mortgage baggage

Worst 10-year performers: Washington Mutual buried by bad-mortgage baggage originally appeared on BloggingStocks on Wed, 30 Jul 2008 13:27:00 EST. Please see our terms for use of feeds.