BofA Gives Details on Loan Modification Program

Nice to see that the Feds aren’t the only ones bailing people out. Tonight I see a release from BofA wherein it essentially bails itself out itself via a $8.4-billion mortgage modification program for people with home mortgages obtained through its Countrywide subprime subsidiary. Granted, it did this at the urging of various state Attorneys […]

Credit Crisis, Companies, and the Economic Outlook

New Greenwich Associates survey out on how credit market problems are hitting companies of all sizes, both in terms of their ability to get capital and in their economic outlook: Forty-five percent of large U.S. companies say their access to commercial paper markets has decreased as a result of the current market turmoil. More than […]

Mark-to-Market Myths

If I read one more mark-to-market screed, I’m going to spit. The gist: An accounting change called FASB 157 pushed companies to mark their balance sheet items to market, and that’s generally a good thing. It means that we have some sense of what toxic paper, real estate, collectibles, etc., on companies’ balance sheets are […]

Bailout Text Summary

Here is summary text of the bailout agreement, via Nancy Pelosi’s office. Boasting about cutting the Paulson $350-billion is specious, as is crowing about the Democrats requiring reforms. I hate politics. REINVEST, REIMBURSE, REFORM IMPROVING THE FINANCIAL RESCUE LEGISLATION Significant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize […]

Illiquidity versus Insolvency

Some people out there need to spend more time in remedial finance. There are two things going on in the financial sector, and while they are linked, they can and should be usefully separated, at least for discussion. We have illiquidity and we have insolvency, and they’re neither always in the same places, nor necessarily […]

Freddie/Fannie: What Did It Take to Get Management/Board Onside?

Why didn’t the Freddie/Fannie bailout deal wipe out the common shares? That’s one question most people have, myself included, as we look at the structure of the deal. Leaving common shareholders with 20% of the equity of the firms seems unnecessarily generous. Is that price that was required to get management on board during the […]

Citi + BoA Losses = Rest of U.S. Banking’s Value

By my calculation, the two largest U.S. banks, Citi and Bank of America, have over the last year lost roughly as much in market capitalization as is the current value of the other six U.S. banks combined. To be specific, Citi and BofA have together lost $296-billion in market capitalization over the last year, while […]