S.S.Morgo bilge pumps are failing her (17.72 per share)
nice logical flow from IsoPatch
since mid-September I have had the pleasure of interacting with him via SI PMemos
nice guy, from Ohio, strong financial market background
he warned about a few people to avoid engagement with
his fave topic has been JPM for months
so a true similar spirit
forgot to follow thru with my BOND LIMIT argument in last post
foreigners will declare an end to the bond rally
our foreign held $2500 Billion in Trez debt requires a risk premium
soon that premium will be absent, causing a reversal in rates
the VETO on BONDS comes from the FOREX, with USdollar decline
this is NOT Japan, we CANNOT go to 0%
that is impossible given debtor status, and foreign held nature
this is such an important point that is overlooked by bond investors
they are not actually investing at all, only jumping onto a supposedly ultra-safe haven wagon
Japan can and did go to 0% because they have three big differences from USA:
1. they save at a high rate and dont spend much, US has near zero saving rate and takes on debts heavily
2. they encourage debased yen currency to support their export economy, US$ is strong to support an import economy but now is weakening
3. their federal debt is domestically held in forced federal pension insanity programs, US has such a staggering federal debt that it now requires 45% foreign held
conclusion: USA resembles Argentina far more than Japan !!!
the big tough second big downbigleg is coming soon big, real soon
IsoPatch doesnt address the US$ specifically, but he is aware
implications versus GOLD will be enormous
here is a Reuters story on JPMorgo
Bank of NewYork warned about bad debts today
the sector is slowly imploding, only not recognized yet
I believe unemployment insurance payments (income) are a function of income before lost job
/ jim
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Growing bad loan jitters weigh on U.S. bank stocks
Thursday October 3, 11:55 am ET
by Mary Kelleher
NEW YORK, Oct 3 (Reuters) - U.S. banks could face wider-than-expected losses on loans to the telecommunications sector and even other industries, rattling Wall Street ahead of third-quarter earnings results.
Bank of New York Co. Inc. (NYSE:BK - News) on Wednesday became the latest U.S. bank to warn of lower quarterly profits because of large charges to cover bad debts to telecom providers as well as write-downs on a portfolio of bank stocks.
"It is a reminder that telecom exposure is a major headwind for the bank group -- to the extent that banks have exposure to that sector -- and it is likely to continue well into next year," said Brock Vandervliet, a Lehman Brothers analyst.
The latest warnings also show increasing numbers of bad loans at regional banks, which so far largely have been spared the big losses that the country's top banks already have had on loans to large corporate clients like bankrupt energy giant Enron Corp. or to foreign governments like Argentina.
A Midwest regional bank, Comerica Inc. (NYSE:CMA - News), also said on Wednesday it would take a $213 million after-tax charge partly for mounting provisions for loan losses. Two weeks earlier, No. 2 U.S. banking company J.P. Morgan Chase & Co. Inc. (NYSE:JPM - News) warned of lower third-quarter results because of unpaid telecom and cable loans and weak trading.
"The Comerica announcement was more unsettling because it showed a somewhat more broad credit deterioration," Vandervliet said.
Bank of New York shares tumbled to $23, the lowest level since November 1997, before trading down $2.63, or 9.8 percent, at $24.13 on the New York Stock Exchange at midday.
Shares of other banks, particularly the regionals, fell as well. Wachovia Corp. (NYSE:WB - News) slid $1.35, or more than 4 percent, to $31.65, FleetBoston Financial Corp. (NYSE:FBF - News) shed $1.42, or 6.9 percent, to $19.10, and PNC Financial (NYSE:PNC - News) fell $2.93, or 7.1 percent, to $38.35.
Telecom loan problems are expected to have the greatest impact on banks such as J.P. Morgan, where they could reduce profits by 35 cents a share, or 21 percent of estimated 2002 earnings, Collins wrote. At FleetBoston, the damage could be 25 cents a share, or 17 percent of 2002 earnings; at Bank of New York, 18 cents a share, or 11 percent; and Wachovia, at 15 cents a share or 6 percent, he said.
Wells Fargo (NYSE:WFC - News) was one bank that appeared to be free of much exposure, U.S. Bancorp Piper Jaffray analyst Andy Collins wrote in a research note.
U.S. rating agencies have been cutting debt ratings on a slew of companies, including banks, putting pressure on borrowers and the lenders. The telecommunications industry is suffering from overcapacity and slack demand, while weak stock prices and the slow U.S. economy are hurting banks.
"The communications sector continues to deteriorate as evidenced by the WorldCom and Adelphia bankruptcies, credit downgrades in the sector, and recent preannouncements related to heightened third quarter credit costs concentrated in telecom and cable," Collins wrote.
Rating agency Fitch on Thursday cut its long-term rating on Bank of New York and its units.
To calculate his earnings figures, Collins said he looked at publicly traded market values to determine a discount from par value. He then applied that estimated write-down to net chargeoffs to calculate an estimated hit to earnings.
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