Toxic assets or anything else that the company doesn't want anyone to know about are hidden in the complex world of accounting/bookkeeping. EX. Gov. Switzer paying $6,000 for a jump in the hay with a prostitute. Also, no one makes any noises about CEO's and upper echelon mgt making anywhere from 200 to 6000 times what some of their entry level employees make. WOW.
Clearly you have no accounting background, and know even less about bank accounting. All the categories listed by BB&T are transparent.
How the acccounting is done is straight forward. Securities/loans held for resale are Marked to Market. Mortgages and loans held for long term investments are not, losses are reserved for. As was made clear in the CC certain areas received increased reserves, but other areas where loans were stable and not defaulting faster did not.
On BB&T's balance sheet as posted here there are very few areas to hide "toxic" assets and those areas were very modest in amount - so if they were 100% toxic there is no big problem.
Try and learn and maybe you can understand a bank's balance sheet. The clear lack of knowledge of some on this board is shocking.
Switzer was a government offical not a business person. Futhermore he was independent wealthy (real estate) and could personally afford to fund his fanstaties. If you are going to include examples try and be on target.
Keep trying you broken down pickup, maybe you will get something right eventually.
Finally, BB&T management has not been eating with the pigs. Based on PERFORMANCE there have been no bonuses paid BB&T upper management in 2 years.
There are some good opinions for and against BB&T and it is ashame that if you present a good "Bear" argument that you automatically get flamed.
BB&T will definitely survive just about any scenario imaginable. If it comes to it, JPM will buy them out or some private equity will give them the cash they need. The question is at what level. The strength of the bank does not matter when herd mentality sets in and people sell all there financial stocks. To the masses, BB&T does not look much different than SunTrust or Regions who both very well could fail the stress test and if they did so, would tank BB&T with them.
My point is that the smart money, those who covet BB&T's assets, wont pay $20 or $30 a share for the bank. I believe it would be a shot-gun marriage just as all the other financial takeovers have been recently and the price would be below $10 a share. Is this a fair value for BB&T? Probably not with a 10 year horizon but unfortunately circumstances will not allow that type of horizon at this point in time.
BB&T has issues - 1/3 or $50 Billion of there assets are Commercial Real-Estate Loans.
I know you all argue that they have better under-writing criteria and that BB&T wont take as big of losses as the other banks will. I agree that they may have underwritten better loans. I disagree though that this will save them. If they wrote a loan 3 years ago to a Commercial Developer...a lot could have happened in that time. Who cares if there is a personal guarantee that the loan will be repaid. If that person cant afford to have there company or LLC pay the bills you can bet that there are no personal assets (at least to be found) for BB&T to come after. The only recourse in the Commercial Loan portfolio will be that assets (land/buildings) that the loan is secured by.
GGP, the countries largest Mall Property Owner, was attempting to sell certain of there Prime properties to avoid bankruptcy. They werent able to, or at least werent able to sell them without taking 40 cents on the dollar and thus they are where they are today...in bankruptcy.
BB&T has reserved for less than 1% of there total HELOC portfolio. Again the credity quality may have been superb when these loans were made...but who wants to argue that if they had to foreclose on there entire $14 Billion HELOC portfolio today that they would get more than 50 cents on the dollar back. This is obviously an outrageous assumption because most of us will pay back our HELOC loans/lines even if they are more than the house is worth today. But I would bet my life that more than 1% and probably closer to 5% of these loans will be written off eventually. You cant have home prices go down 40% from the peak and not expect to write-off more than 1% of your HELOC loans. JP Morgan has a 3.6% reserve against there HELOC portfolio (and this does not include WAMU which is accounted for through there purchase accounting transaction).
Both sides can slice it and dice it as they please. But the fact is there is a genuine argument for additional downside from here and if people present a decent case they should not get flamed for it.
can anyone believe this idiot is still saying there is no problem with BBT while their management fools them into thinking things are under control and all is fine
past 2 years have wiped out all shareholder performance for the last 2 decades -- this company is clearly in trouble -- clearly this idiot has no accounting background and his definition of transparency is going to be his shocking that the ones that he says don't know a thing about reading balance sheets is going to be the last laugh on him
i am not sure why this guy has such a want to make BBT his steady boyfriend that he is evidently in love with -- talk about an obsession for abuse -- when the stock crashes, i wonder if he will say 2 funny
Inlet boat, I just read your post. The way you wrote, it sounds like you and your wife are employees of BBT. Good, you stand up for the company, but board of directors and upper mgt are not always honorable. You agree that there are places to hide improper expenses in accounting. And true, Spitzer was rich enough to pay for his hanky-panky, but he didn't. He hid his hanky-panky expenses. I still believe that when upper-mgt is paid 200 to 6000 times what bottom employees receive is a gross injustice to both employees and to common stock holders. My 'pick-up' is in good shape and most things I do, I get done right.