tag:blogger.com,1999:blog-30643134.post3048704228541855342..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: This is our most desperate hour...Accrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-30643134.post-45806569947037802272007-08-28T09:21:00.000-05:002007-08-28T09:21:00.000-05:00How could you leave Boiler Room off that listHow could you leave Boiler Room off that listAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-78986453273357160102007-08-28T06:29:00.000-05:002007-08-28T06:29:00.000-05:00tddgThanks!tddg<BR/>Thanks!fbeckenbauerhttps://www.blogger.com/profile/03450684928398597138noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-87778328816420767342007-08-27T09:16:00.000-05:002007-08-27T09:16:00.000-05:00If anyone is young and thinking of getting into th...If anyone is young and thinking of getting into the bond business, either on the sell or buy side, first read Liar's Poker and watch Wall Street, Trading Places, and Office Space. I'd say at least 1-2 times a week one of these movies/books is referenced on every trading floor in America. If you don't know what a Big Swinging Dick is, you'll just look like an idiot.<BR/><BR/>I will sometime make up a list of the actual books I reference a lot in my day-to-day work.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-27734469814164964752007-08-25T17:46:00.000-05:002007-08-25T17:46:00.000-05:00tddgBy the way I think this is an excellent blog.I...tddg<BR/>By the way I think this is an excellent blog.<BR/>I'm hoping that someday you might post a reading list with good books about bonds/bond marketfbeckenbauerhttps://www.blogger.com/profile/03450684928398597138noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-56518887943006002412007-08-25T00:12:00.000-05:002007-08-25T00:12:00.000-05:00Fbeck:Yeah. Good point on not wanting the manageme...Fbeck:<BR/><BR/>Yeah. Good point on not wanting the management. I think BAC's involvement with CFC takes WB out of the equation honestly.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-36154814960807355352007-08-24T19:12:00.000-05:002007-08-24T19:12:00.000-05:00tddgWell its not really my model. The criteria are...tddg<BR/>Well its not really my model. The criteria are lifted from those he puts in the BRK AR every year.<BR/><BR/>Those are his criteria for acquisitions - ie companies which he buys outright, and I was assuming from your post that you were considering this possibility. For the reasons stated above I think this is not going to happen.<BR/><BR/>But his criteria for trading securities is very different - as you mention he did offer a price for the LTCM positions (NOT for LTCM -he explicitly told them he did not want the management etc)and he has bought junk bonds, options etc.<BR/>So it is not completly out of the question that he might buy a stake (up to 15%) in CFC or some other lender.fbeckenbauerhttps://www.blogger.com/profile/03450684928398597138noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-70971705178147251302007-08-24T09:29:00.000-05:002007-08-24T09:29:00.000-05:00fbeckenbauer: not for nothing, i did say quasi inv...fbeckenbauer: not for nothing, i did say quasi involvement, didn't i? can you say that buffet's decision to increase stake in BofA fits? suppose what i'm really thinking kinda scares me most: do NOT agree even with buffet's INcreased stake of BofA as i can't help but think banks too have some 'risk' and i guess we'll find out IF ... when banks issue earnings and are forced to mark some stuff to market ... i do really hope i'm wrong, cause that simply bodes poorly for stocks and 'things' generally speaking ... on the other hand, being involved in the bond mkt, hopefully biz will pick up! (thats right -- when life gives ME lemons, i'm gonna try and mix up some lemonade!!)Unknownhttps://www.blogger.com/profile/04098980411730832121noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-68985899080719897792007-08-24T08:58:00.000-05:002007-08-24T08:58:00.000-05:00Fbeckenbauer:You seem to follow Buffett more than ...Fbeckenbauer:<BR/><BR/>You seem to follow Buffett more than I do, but I wonder how his offer to buy LTCM fits your model?Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-56208793963239788182007-08-24T02:36:00.000-05:002007-08-24T02:36:00.000-05:00Interesting post.But let's compare Buffett's state...Interesting post.<BR/><BR/>But let's compare Buffett's stated acquisition criteria:<BR/>1. Large Purchases -above 75M pretax profits- OK maybe<BR/>2. Demonstrated consistent earning power (no turnarounds) - NO<BR/>3. High ROE with little or no debt - NO<BR/>4. Management in place - NO (Mozilla doesn't strike me as Buffett's kind of manager)<BR/>5. Simple businesses - NO<BR/>6. An offering price - OK maybe<BR/><BR/>So I think the Buffett rumours are ridiculous. He has stated these criteria every year for aeons and CFC does not qualify.fbeckenbauerhttps://www.blogger.com/profile/03450684928398597138noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-20263936985755799652007-08-23T12:34:00.000-05:002007-08-23T12:34:00.000-05:00surprised to NOT see any mention of Buffets recent...surprised to NOT see any mention of Buffets recent INcreased stake in bofa as a quasi buffet involvement in CFC ... whatever and whoever the case may be, for NOW the winner appears to be kenny lewis of bofa, but really, it all strikes ME like getting a MasterCard bill in the mail and sending along a 'NO-interest' check from Visa to pay the former bill ... the bad 'stuff' still exists on someone's balance sheet and oh yea, when bank earnings come 'round again (september?) one would imagine the mark-to-market dance will once again get interesting ...Unknownhttps://www.blogger.com/profile/04098980411730832121noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-64768883714814375252007-08-23T11:10:00.000-05:002007-08-23T11:10:00.000-05:00Fred:Sadly, it doesn't take me long. I'm that big ...Fred:<BR/><BR/>Sadly, it doesn't take me long. I'm that big a geek. I started doing it a while back because I thought it was funny. The nice thing about blogging is you really have the freedom to write for yourself. If I think its funny, I'm damn well doing it.<BR/><BR/>Anyway, I'm just as big a geek on the bond market, which is much more lucrative that SW.<BR/><BR/>Scurvon & David:<BR/><BR/>Remember that BAC was widely rumored to be acquring CFC about 6 months ago. So now...<BR/><BR/>1) BAC does not benefit by CFC going under. If the whole mortgage market is damaged, that wouldn't bode well for BAC's business either. Everyone in banking relies on securitization (for MBS, CLO, ABS etc), so no one wants to see that market permanently damaged.<BR/><BR/>2) So BAC injects a relatively small amount of cash into CFC, but at the same time tells the market that BAC has a vested interest in CFC's survival. Other financial institutions will be more willing to lend to CFC given BAC's involvement.<BR/><BR/>3) BAC can now buy a very large percentage of CFC at a steep discount. I'm thinking of it as a quasi-option to acquire CFC at some future point.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-46902793725232773612007-08-23T06:30:00.000-05:002007-08-23T06:30:00.000-05:00TDDG,Thanks for a great post!The $2b presumably go...TDDG,<BR/><BR/>Thanks for a great post!<BR/><BR/>The $2b presumably goes into the bank, which can then buy $10b in mortgages with the capital. Do you agree?<BR/><BR/>That certainly helps. However, if the CP cannot be rolled, its not enough (given your numbers). So the company's future STILL hinges on mortgage sales. If it can't unload them, then back to BAC they go for more liquidity. Only what price would the second convert be done at?<BR/><BR/>Credit cycles cause lenders to do multiple converts or rights issues at successively more dilutive prices. Examples: Citi in '91, Mexican banks in '95, J. Banks in late nineties. <BR/><BR/>Why should this one be different?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30643134.post-23399086183442879772007-08-22T23:27:00.000-05:002007-08-22T23:27:00.000-05:00Great read - thanks.So what do you make of $2 bln ...Great read - thanks.<BR/><BR/>So what do you make of $2 bln of preferred sold on what appear to be very generous terms? Do they need $2 bln that badly?Scurvonhttps://www.blogger.com/profile/12499546209129271425noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-10049208666976349492007-08-22T21:59:00.000-05:002007-08-22T21:59:00.000-05:00Most impressive! does it take long to search for a...Most impressive! does it take long to search for a good phrase from SW to contextualize your postings? :-)Anonymousnoreply@blogger.com