Sorry it took so long to get back to this great discussion..I will post this as
a new answer also cuz this may get lost. Yes the bar is set low and everyone is
expecting very little. Ryan for price...we will see..but with sell off on Friday
I think there is a lot to go...this is what I posted about the qtr...In March
this year I was sure the bottom in the banks had come reading through so many
Regional and money center banks...Cohen said no...but I said, you know this
looks pretty good. We had a rally in the banks and a basket full of Regionals
did nicely...then what happened....STUPID Investment Banks reported and killed
the sector....so I sat and waited to see what the next qtr would bring. Once
again I read the regional banks who said we are still ok, deposits and services
are up and we are raising cash....BUT this time I remembered what happened with
the Investment Banks and knew in September it could be trouble when they
reported and if anyone reads my comments you know I posted on that. So we are
back to March again...waiting for the money center banks to report....but this
time the Investment Banks not a big problem cuz most are gone. Here is what this
Nymph sees....This Bill that passed has a bunch of good stuff that will help in
upping the guidance when the conf calls happen this qtr...1. If the Bank has to
end up selling their securities at a loss to the government the amount of the
loss may be applied toward a duction to their taxes....meaning Tax Liabilities
of the Banks could have a nice drop ...good example...tax rate is 35%...10
Million loss...3.5 Million savings on taxes....and this loss can be carryovered.
2. With this Bill the Banks get to take off so MUCH liability by getting to sell
off so much of their bad debt to the govt...maybe this qtr won't show it...but
guidance will 3. Mark to market accounting...Zaq and I discussed it a couple of
days ago....all those numbers that can hurt a bank is poof...gone....I hear
people saying that they can't trust the Financials cuz they are not calculating
the true value as in true value accounting....but the bottomline, most traders
are not fundies...they are going to look at the Net Income, estimates, Revenues
and act on those....my Wizard of Oz theory...don't need to see what is behind
the curtain. 4. With the Panic sell off on Wall Street...where did Money go
to....Mattresses, T Bills and BANKS...so deposits, etc should have some nice
numbers in the low paying Savings Accounts.......Finally.....I expect with all
the global giggling we will probably have a global rate cut after one goes
first....AND WFC....this is a smart bank about m and a, that has been my view
since last Oct....THEY ARE NOT GOING to buy something that doesn't have
value...they are picky....they want to pay SO MUCH more for WB then C. C is
asking for a Judge to jump in cuz they KNOW they got a deal of a lifetime....put
all these things together...besides the fact, I actually noticed that homes have
gotten so darn cheap that I thought for a brief second..."hey this is actually a
good deal"....and I am thinking that we may have a darn rally in the Financials
after we saw this last sell off on some of the best news a Bank could
have....this earning season for banks can be fun.

i agree with Dean---this market is a real stumper. having position(s) in this
market would be like walking around in the dark. Even upside surpirses in
earnings have been sold off several times over the past 18 months. I guess maybe
the tide is stronger than the waves of earnings.

Nymph...I think what some of the posters are not understanding is that since the
expectations for the banks are so low...the quarters will look good from the
lowered estimates. That being said..I think the market is very emotional right
now. The selling on friday was the street's backlash at Washington's toying
with the markets for two weeks. This was the worst two weeks for me , ever, and
I'm 65% cash. This market is impossible to trade. Dean

to justify buying financials during this storm, you would need a very VERY clear
catalyst----a no-brainer----a sure thang. Example: last week when they announce
increasing FDIC insurace to $250K, it was obvious that NCC would be the main
beneficiary. many who had withdrawn enough money to keep their acct balance
below $100 would now put another $150 into NCC CD's---which are the
highest-paying CD's around---at about 5%.
But the mark to market issue is not nearly as clear-cut. But keep your powder
dry so that the next time we see another no-brainer, we can pounce on it for a
quick trade.

madeline - thats why they have to buy at market price, which is also why
scrapping mark to market is stupid. govt has to stop the bleeding, not add to
it. buy at market, it will get people trading more as simply a function of
buying time. wont be shocked if they need to put another trillion into this.

A little confused by "the banks can, across the board, up estimates due to
...."

I think the accounting is a shift from a value-diminished asset to cash
replacement - and there is no way that the Treasury will pay more than the
devalued asset amount and frankly better pay substantially less than even the
lowered book value or this program will come to an end (my opinion based on
accountability to an angry Congress and angrier taxpayer). So, unless I am
missing an element of this plan, the banks that participate in the government
buying are going to have to write off more.
And there clearly are consequences for freezing credit.

I think it makes sense to believe that there is going to be massive
consolidation - nothing's easy right now. I think ....

i can accept a premise where the financials have a better than expecter quarter,
which does not mean good. i can accept a premise where the aquiring banks have
great quarters (relatively) and that earnings season will make things look
better than most have thought. that i can entertain.

my point was simply why not sell them? im actually a buyer of a few names JPM,
WFC, BAC, PNC etc., but this idea that things "should" be any which way, always
irks me. LIBOR will do what LIBOR will do. until the plan gets put in motion,
not put through congress, the same problems are there.

these stocks are up a lot in an enviornment where you cant short them, so if
they hold to the thursday rule of bringing back the ability to short, why not
sell before that event happens? i dont know which money manager wouldnt take
some off the table here.

Can anyone on here qualify or quantify "good quarter"? I'm not sure
what people are looking at. Credit markets are EXTREMELY tight. Banks can't
lend, therefore they can't make money in the PRIMARY business.

Nymph,
Your quote: what I am seeing is that the Banks are actually going to have a
pretty good
qtr....can't say the same for a lot of others...

What, When, Who, Where, and Why? Whatever brand of kool-aid you are drinking, I
sure would like some...

nymph. i'm with ryan. i think everything si sell the news for awhile. one would
think trading should get a little easier assuming we've come close to some sort
of bottom. ryan,do you have any opinion on where we are technically bottom wise?
mike