Comments on: On Merrill’s and Citi’s Quest for More Dough http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more.html Sat, 21 Nov 2009 22:38:01 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more.html#comment-2947 Anonymous Thu, 10 Jan 2008 20:16:00 +0000 http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more-dough/#comment-2947 citi at least could eliminate its dividend to raise capital, so SWFs are not the only game in town ... and indeed, i am not sure that foreign governments really are the only game in town. presumably there is a bit of capital left in the us or europe. I doubt a takeover by private entity would arouse quite the same concerns as a joint ADIA/ CIC/ GIC bank ... <br/><br/>bsetser citi at least could eliminate its dividend to raise capital, so SWFs are not the only game in town … and indeed, i am not sure that foreign governments really are the only game in town. presumably there is a bit of capital left in the us or europe. I doubt a takeover by private entity would arouse quite the same concerns as a joint ADIA/ CIC/ GIC bank …

bsetser

]]> By: EEngineer http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more.html#comment-2945 EEngineer Thu, 10 Jan 2008 16:58:00 +0000 http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more-dough/#comment-2945 And they're still have a dividend? And they’re still have a dividend?

]]> By: ajw http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more.html#comment-2944 ajw Thu, 10 Jan 2008 16:46:00 +0000 http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more-dough/#comment-2944 Fascinating times. How does this jibe with your prior post about potential de-facto nationalization - it seems like just the opposite. Fascinating times. How does this jibe with your prior post about potential de-facto nationalization – it seems like just the opposite.

]]> By: a http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more.html#comment-2940 a Thu, 10 Jan 2008 08:26:00 +0000 http://www.nakedcapitalism.com/2008/01/on-merrills-and-citis-quest-for-more-dough/#comment-2940 Sorry; this is off thread, but here's what Poole said (quoted by Calculated Risk):<br/><br/>"The rating agencies seemed to have based their ratings on a backward look at default experience on similar mortgages before 2006, rather than on a forward look based on careful analysis of the likely ability of borrowers to repay in less favorable market circumstances."<br/><br/>And I will sound like a broken record by asking, Why does the Fed allow Var and a bank's internal models to determine the amount of capital a bank needs to hold? The Fed deems an internal model validated if it backtests; no "forward looking" needed. If the ratings agencies were wrong, so is the Fed. (And then there's Basel II...) Sorry; this is off thread, but here’s what Poole said (quoted by Calculated Risk):

“The rating agencies seemed to have based their ratings on a backward look at default experience on similar mortgages before 2006, rather than on a forward look based on careful analysis of the likely ability of borrowers to repay in less favorable market circumstances.”

And I will sound like a broken record by asking, Why does the Fed allow Var and a bank’s internal models to determine the amount of capital a bank needs to hold? The Fed deems an internal model validated if it backtests; no “forward looking” needed. If the ratings agencies were wrong, so is the Fed. (And then there’s Basel II…)

]]>