"Third, I sincerely hope that the valuation allowance hit is over with. Come on now. 54% mark on reos at 6/30/11. $145 million bomb last qtr. hurt and I'm tired of it seeing this repeatedly qtr. after qtr. No excuse."
Can't say you weren't warned about what happens with backend credit loss strategy. That was the traded off - save the shareholders from dilution vs continually blead losses through valuation marks depressing ROA - you don't two bites of the cherry both.
Agree it should start to ramp down now as long as inflow to NPA/REO slows.
I'M neutral on BBT now - its probably a reasonable entry if you want this bank. But C/JPM are better at these prices imo.
"The FED "twist" program is flattening yield curves making it more diffucult for banks and their margins. I do not see financials (banks, insurance, etc) as attractive with this happening."
Why would a bank want to stay in a 5 year treasury yielding 86 bsp per year and assume interest rate risk? No more room for price appreciation but plenty of room for price erosion over 5 years. Think treasuries eventually will swing to the other side of the pendulum and it will come quickly at some point.
Securitization balances have dropped a lot and eventually we'll see what King has been talking about - reintermediation.
"Can't say you weren't warned about what happens with backend credit loss strategy. That was the traded off - save the shareholders from dilution vs continually blead losses through valuation marks depressing ROA - you don't two bites of the cherry both."
Ok, that's what it worked out to. So congratulations. I'm simply not clairvoyant to know that a land with an ltv of say 70% at loan origination would require a write-down of 70 to 80%. Right now, only speculators are buying land. But God only made so much of it and eventually it will come back into fashion.
Heck, if I were Kelly King I would sell off my $23 billion mbs low yielding portfolio take my $800 million profit and mark down every land oreo to $0 so I would not be forced into a ridiculous liquidation sale. The neanderthal man over at credit suisse might be intrigued.
I'm also long much c and jpm. Someone concerned with c on cross border risk but they got a $34 billion ALL and I think greek exposure is on both the public and private sector is maybe a couple of billion. I hope.
Still long snv? Down to $1.1/share. Bbt might get it on the cheap but then again pnc might want it.