More Shoes Drop in Financials
Source: http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold/0/0/more-shoes-drop-in-financials-Posted on Tuesday, July 29th, 2008 | In Energy Markets, Gold Markets, Market Commentary
Merrill Lynch Announces Substantial Sale of U.S. ABS CDOs, Exposure Reduction of $11.1 Billion
As a result of the transactions announced today, the company expects to record a pre-tax write-down in the third quarter of 2008 of approximately $5.7 billion. This write-down is comprised of a $4.4 billion loss associated with the sale of CDOs, a $0.5 billion net loss on the termination of hedges with XL Capital Assurance and an approximately $0.8 billion maximum loss related to the potential settlement of other CDO hedges with certain monoline counterparties.
XX Sean’s note — you’ve got to be fracking kidding me. Merrill just reported earnings on the 17th, but at that time, did not disclose this $5.7 billion write-down. How is that possibly legal? Anyway, it’s another shoe dropping in financials. Maybe we should ask the gang on CNBC if financials are a good buy now.
What’s next? Well …
Goldman Sachs cuts estimate on Washington Mutual
A Goldman Sachs Group Inc. analyst cut his full-year estimate on Washington Mutual Inc. on Monday, citing the thrift’s “severe” credit challenges and expectations that the bank will remain unprofitable through 2009.
… Or …
Wachovia Falls on Downgrade, CFO Exit
Wachovia dropped nearly 10% Friday after an analyst downgrade and news its CFO was leaving. Robert Patten of Morgan Keegan slapped a sell rating on the Charlotte, N.C.-based bank following its miserable second-quarter earnings results and concern that the company might have to raise more capital.
… Or …
Fannie and Freddie: It’s Worse Than You Think
Forget everything you’ve read about how woefully undercapitalized Fannie Mae and Freddie Mac are. The situation is much worse. Unlike other companies, the two government-chartered mortgage financiers publish quarterly fair-value balance sheets showing what the real-world values of their assets and liabilities supposedly are. By this measure, both companies’ net- asset values are much lower than what the government lets them show as capital, or what the accounting rules let them report as shareholder equity.
Last 5 posts by Sean Brodrick
- The Golden Phoenix - February 25th, 2009
- Blessing in Disguise - February 4th, 2009
- What I'm Reading Today - January 7th, 2009
- Gold and Oil Short-Term Trends - January 7th, 2009
- Is Gold Poised for a Pullback? - January 6th, 2009
 About Sean Brodrick (http://blogs.moneyandmarkets.com/blog/red-hot-energy-and-gold)
Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research’s small-caps specialist, especially in natural resources, and is the editor of the company’s Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets. Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world’s leading publisher of offshore asset protection strategies and global investment opportunities. Recognized for his expertise on natural resources and Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box, Fox Business, CNN, The Glenn Beck Show, Your World with Neil Cavuto and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada’s premiere financial websites, HoweStreet.com. His report, “70 Days to Empty,” has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by The Daily Reckoning as “the most important report you’re likely to read this year,” while his knowledge of uranium has helped investors earn solid gains on the commodity. Mr. Brodrick holds a B.A. degree from the University of Maine. |
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