Comments on: Wells Fargo, Morgan Stanley, GMAC Plus Others Need to Raise Capital as Result of Stress Tests http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html Fri, 12 Mar 2010 01:15:28 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Carmen A. http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46643 Carmen A. Thu, 07 May 2009 12:11:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46643 Carol you are absolutely right. That was not the smart thought. Carol you are absolutely right. That was not the smart thought.

]]> By: carol765 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46642 carol765 Thu, 07 May 2009 12:09:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46642 Carmen said:... I hope that the Friday news is negative on emplyment so that I move out withour ER attention. Does anyone have a suggestion.<br /><br /><br />at Carmen:<br />get rid of your short, and do not short again.<br /><br />If it leads you to hope for negative news on employment, i.e. even more people having lost their jobs than already expected, than surely something is horribly wrong! Carmen said:… I hope that the Friday news is negative on emplyment so that I move out withour ER attention. Does anyone have a suggestion.

at Carmen:
get rid of your short, and do not short again.

If it leads you to hope for negative news on employment, i.e. even more people having lost their jobs than already expected, than surely something is horribly wrong!

]]> By: JP http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46621 JP Thu, 07 May 2009 05:47:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46621 <i>Theres a huge key difference here. With Chrysler the goal of the secured bond holders was essentially to wipe out:<br /><br />*The shareholders<br />*The preferred holders<br />*The junior debt<br />*The pension holdings<br /><br />etc...</i>You mean, the senior secured debt holders were exercising their contractual rights to be paid first in the event of bankruptcy? How absurd.<br /><br />The net effect will be: Secured debt issuance is no longer an option for large companies, because no one believes that the debt is truly secured. Theres a huge key difference here. With Chrysler the goal of the secured bond holders was essentially to wipe out:

*The shareholders
*The preferred holders
*The junior debt
*The pension holdings

etc…You mean, the senior secured debt holders were exercising their contractual rights to be paid first in the event of bankruptcy? How absurd.

The net effect will be: Secured debt issuance is no longer an option for large companies, because no one believes that the debt is truly secured.

]]> By: Carmen A. http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46615 Carmen A. Thu, 07 May 2009 04:08:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46615 I agree. It makes no sense that the market hurded up. I made the mistake and shorted BAC. I sit at $11.09. I am taking the perverbial "Bath". For May 7th and continuing I do not know how to trade this mistake. I am wondering if I should sit tight to see if there is a pull back. <br /><br />I understand that there is a bull snarl in the works as the market has passed it first resistance of 8000 and on its way to the 8500 resistance. Thereafter it will continue to test the 200 to the 9000. <br /><br />I hope that the Friday news is negative on emplyment so that I move out withour ER attention. Does anyone have a suggestion. I agree. It makes no sense that the market hurded up. I made the mistake and shorted BAC. I sit at $11.09. I am taking the perverbial “Bath”. For May 7th and continuing I do not know how to trade this mistake. I am wondering if I should sit tight to see if there is a pull back.

I understand that there is a bull snarl in the works as the market has passed it first resistance of 8000 and on its way to the 8500 resistance. Thereafter it will continue to test the 200 to the 9000.

I hope that the Friday news is negative on emplyment so that I move out withour ER attention. Does anyone have a suggestion.

]]> By: Adam http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46613 Adam Thu, 07 May 2009 02:01:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46613 According to Bloomberg, the requirement for Morgan Stanley to raise additional capital stems from it acquiring Smith Barney from Citi. So it seems that they're not really giving MS a smack on the wrist at all...which was to be expected. According to Bloomberg, the requirement for Morgan Stanley to raise additional capital stems from it acquiring Smith Barney from Citi. So it seems that they’re not really giving MS a smack on the wrist at all…which was to be expected.

]]> By: Jim T http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46612 Jim T Thu, 07 May 2009 01:36:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46612 THESE RESULTS SHOULD SCARE THE HELL OUT OF ALL OF US!<br /><br />Think about it Wells Fargo & Co., Morgan Stanley, GMAC, State Street Corp., Bank of America Corp., Citigroup Inc. and Regions Financial Corp all have to raise billions more after the government's Stress-less Test? <br /><br />That is INSANE considering;<br /><br />1.) Mark to Myth Accounting was used.<br />2.) No Off Ballance Sheet Liabilities were counted.<br />3.) Worse case Eco assumptions used have already been surpassed.<br /><br />AND THEY STILL FAILED! THESE RESULTS SHOULD SCARE THE HELL OUT OF ALL OF US!

Think about it Wells Fargo & Co., Morgan Stanley, GMAC, State Street Corp., Bank of America Corp., Citigroup Inc. and Regions Financial Corp all have to raise billions more after the government's Stress-less Test?

That is INSANE considering;

1.) Mark to Myth Accounting was used.
2.) No Off Ballance Sheet Liabilities were counted.
3.) Worse case Eco assumptions used have already been surpassed.

AND THEY STILL FAILED!

]]> By: Mrs. Watanabe http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46611 Mrs. Watanabe Thu, 07 May 2009 00:33:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46611 I must seriously not understand liquidation preference. I must seriously not understand liquidation preference.

]]> By: Steve R. Barbour http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46610 Steve R. Barbour Thu, 07 May 2009 00:29:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46610 <b>Slightly OT, but wouldn't it be ironic if TPTB convert taxpayer-owned preferreds to common to make it easier for banks to raise capital (because of the liquidation preference of the preferreds) while only last week, our head honcho was ignoring the liquidation preference for Chrysler's secured debt holders?</b>.<br /><br />?<br /><br />Theres a huge key difference here. With Chrysler the goal of the secured bond holders was essentially to wipe out:<br /><br />*The shareholders<br />*The preferred holders<br />*The junior debt<br />*The pension holdings<br /><br />etc...<br /><br />While at the same time retaining most of their debt and getting a great deal of equity. That was, at least, their original offer.<br /><br />Basically, they were effectively demanding that the government's loans and pension guarantees be used as leverage to bail them out.<br /><br />I'm not surprised the 'head honcho' disagreed. Any decent public leader would have.<br /><br />With the banks its another issue. Citigroup isn't insisting, at this point anyway, that the US government get 'wiped out' to protect its senior holders. If and when it does, things may get a lot more interesting. Slightly OT, but wouldn’t it be ironic if TPTB convert taxpayer-owned preferreds to common to make it easier for banks to raise capital (because of the liquidation preference of the preferreds) while only last week, our head honcho was ignoring the liquidation preference for Chrysler’s secured debt holders?.

?

Theres a huge key difference here. With Chrysler the goal of the secured bond holders was essentially to wipe out:

*The shareholders
*The preferred holders
*The junior debt
*The pension holdings

etc…

While at the same time retaining most of their debt and getting a great deal of equity. That was, at least, their original offer.

Basically, they were effectively demanding that the government’s loans and pension guarantees be used as leverage to bail them out.

I’m not surprised the ‘head honcho’ disagreed. Any decent public leader would have.

With the banks its another issue. Citigroup isn’t insisting, at this point anyway, that the US government get ‘wiped out’ to protect its senior holders. If and when it does, things may get a lot more interesting.

]]> By: Steve R. Barbour http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46609 Steve R. Barbour Thu, 07 May 2009 00:20:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46609 <b>Citigroup executives believe they'll be able to plug the hole by continuing to sell assets and by expanding the company's planned conversion of preferred shares into common stock to include a wider range of securities, these people said. Citigroup, which has received $50 billion in taxpayer capital and soon will count the U.S. government as its largest shareholder, won't need to get additional financial aid from Washington, these people said.</b>...<br /><br />That sounds like a <b>lot</b> more than $5 billion dollars to me. Makes one wonder if CitiGroup is actually short $30+ billion and 'only' has to raise '$5 billion more' provided all its other capital raising plans come through...<br /><br />No point speculating too far at this point though, we'll have our answer in 24 hours or so. Citigroup executives believe they’ll be able to plug the hole by continuing to sell assets and by expanding the company’s planned conversion of preferred shares into common stock to include a wider range of securities, these people said. Citigroup, which has received $50 billion in taxpayer capital and soon will count the U.S. government as its largest shareholder, won’t need to get additional financial aid from Washington, these people said.…

That sounds like a lot more than $5 billion dollars to me. Makes one wonder if CitiGroup is actually short $30+ billion and ‘only’ has to raise ‘$5 billion more’ provided all its other capital raising plans come through…

No point speculating too far at this point though, we’ll have our answer in 24 hours or so.

]]> By: Mrs. Watanabe http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus.html#comment-46608 Mrs. Watanabe Wed, 06 May 2009 23:55:00 +0000 http://www.nakedcapitalism.com/2009/05/wells-fargo-morgan-stanley-gmac-plus-others-need-to-raise-capital-as-result-of-stress-tests/#comment-46608 Slightly OT, but wouldn't it be ironic if TPTB convert taxpayer-owned preferreds to common to make it easier for banks to raise capital (because of the liquidation preference of the preferreds) while only last week, our head honcho was ignoring the liquidation preference for Chrysler's secured debt holders? Slightly OT, but wouldn’t it be ironic if TPTB convert taxpayer-owned preferreds to common to make it easier for banks to raise capital (because of the liquidation preference of the preferreds) while only last week, our head honcho was ignoring the liquidation preference for Chrysler’s secured debt holders?

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