BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[If an institution is 'too big too fail,' is it too big?]]>http://www.bloggingstocks.com/2009/10/23/if-an-institution-is-too-big-too-fail-is-it-too-big/http://www.bloggingstocks.com/2009/10/23/if-an-institution-is-too-big-too-fail-is-it-too-big/http://www.bloggingstocks.com/2009/10/23/if-an-institution-is-too-big-too-fail-is-it-too-big/#commentsFiled under: , ,

Amid Fed Chairman Ben Bernanke's call for a "credible process" for imposing losses on shareholders and creditors for a U.S. government decision to close down a financial institution, a parallel discussion will have to occur.

Namely, if an institution is 'too big too fail,' does that mean the institution is too big? In other words, should the U.S. government begin a long, incremental process of breaking-up those financial institutions - and other corporations - whose wayward behavior would pose systemic risk?

Continue reading If an institution is 'too big too fail,' is it too big?

If an institution is 'too big too fail,' is it too big? originally appeared on BloggingStocks on Fri, 23 Oct 2009 14:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BernankeCongresstoo big too failFri, 23 Oct 2009 14:30:00 EST<![CDATA[Best Trades of 2008: #5 Shorting 'too big to fail' Fannie and Freddie]]>http://www.bloggingstocks.com/2008/12/31/best-trades-of-2008-5-shorting-too-big-to-fail-fannie-and-fr/http://www.bloggingstocks.com/2008/12/31/best-trades-of-2008-5-shorting-too-big-to-fail-fannie-and-fr/http://www.bloggingstocks.com/2008/12/31/best-trades-of-2008-5-shorting-too-big-to-fail-fannie-and-fr/#commentsFiled under: ,

This shorting strategy defied all odds and pretty much defined the year for the stock market.

I don't know anyone who truly thought Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) would both be trading under a buck as 2008 came to close.

The idea of these once-in-a-class-by-themselves quasi-government entities that touch more than 85% of all mortgages in the United States going into full receivership by the government was considered foolish, almost ludicrous discussion that only invited serious sarcasm from professional Fannie and Freddie watchers.

The ultimate collapse of both stocks was devastating, not only to investors that continued to believe all the false headlines spewing from the front offices of FNM and FRE that said they were more than amply capitalized, but the whole financial sector as well.

The notion that Freddie and Fannie were too big to fail was a given, sucking in long-side investors at every 10-point interval on the way down to zero.

Continue reading Best Trades of 2008: #5 Shorting 'too big to fail' Fannie and Freddie

Best Trades of 2008: #5 Shorting 'too big to fail' Fannie and Freddie originally appeared on BloggingStocks on Wed, 31 Dec 2008 15:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>best trades of 2008BestTradesOf2008bryan perryBryanPerryfanniefannie maeFannieMaefnmfrefreddie macFreddieMactoo big too failTooBigTooFailWed, 31 Dec 2008 15:00:00 EST<![CDATA['Too big to fail' seen protecting Bank of America, JPMorgan]]>http://www.bloggingstocks.com/2008/09/22/too-big-to-fail-seen-protecting-bank-of-america-jpmorgan/http://www.bloggingstocks.com/2008/09/22/too-big-to-fail-seen-protecting-bank-of-america-jpmorgan/http://www.bloggingstocks.com/2008/09/22/too-big-to-fail-seen-protecting-bank-of-america-jpmorgan/#commentsFiled under: , , ,

If you think that the 'too big to fail' / 'too interconnected to fail' doctrine probably protects the Bank of America and JP Morgan Chase, you think right. But don't expect either stock to race-up like Microsoft (NASDAQ: MSFT) did in the 'Wonderful 1990s' -- not just yet.

The U.S. Government's estimated $700 billion plan to stabilize credit markets will likely safeguard both BAC and JPM due to the large impact a failure of each would have on the financial system, Luigi Zingales, professor of finance at the University of Chicago, told Bloomberg News Monday, adding that it "will definitely make their bonds safer."

BAC, JPM: Operational challenges ahead

However, economist Richard Felson told BloggingStocks Monday investors should not rush out and buy either stock just yet. Felson added that he does not have a rating on nor own shares in either company. The Bank of America (NYSE: BAC), which closed Friday at $37.48, has a p/e of 21; JP Morgan Chase (NYSE: JPM), at $47.05, a p/e of 15.5.

"Each has a series of operational issues to address in the financial services space," Felson said. "The Bank of America has a major merger and culture integration process ahead following the purchase of Merrill Lynch. Major employee, client retention and investment decisions are ahead, and this will weigh on shares."

Continue reading 'Too big to fail' seen protecting Bank of America, JPMorgan

'Too big to fail' seen protecting Bank of America, JPMorgan originally appeared on BloggingStocks on Mon, 22 Sep 2008 10:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bacbanking sectorFederal Housing AuthorityFHAfinancial crisisforeclosuresgdphousing sectorinthenewsjpmmortgagesretail bankingtoo big too failU.S. economyU.S. TreasuryMon, 22 Sep 2008 10:00:00 EST