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Non-Tech : Signature Group Holdings -- Ignore unavailable to you. Want to Upgrade?

To: SI Bob who wrote (8)	3/28/2007 9:43:39 PM
From: Carey Thompson	Read Replies (1) \| Respond to of 78

I think there are lurkers out there with interest in FMT that may show up later. I have followed FMT for many years. I was a long term investor in FMT buying in Oct and Dec 1999; and selling in Oct 2005, Jan 2006, and Apr 2006. I bought during another FMT crisis, that time with its workers compensation insurance business. FMT sold off the workers comp insurance business and kept its BANK. Here are my notes from a sale. Jan 2006 - I sold all 400 shs of FMT in the personal acct because FMT business of writing mortgages is about to crash and burn in my humble opinion. Judging by the fact that homebuilders can no longer sell their inventory of built homes, and home prices are dropping locally, and this price drop has spread to the coasts. But it was a hell of a housing market for 6 years and FMT wrote lots of profitable business, but all cycles end and its time to sell. Yet FMT remains an great company. Even, I had no idea FMT would land so hard. This crisis has caused FMT to begin selling off its residential real estate business (we will see when it finishes the saling how big a loss FMT will have to report). This time FMT will keep its BANK, and its commercial lending business. I think this cat had 9 lives, and 7 lives remain if James McIntyre, Chairman of the Board; and Louis Rampino, CEO stay healthy and alive. They have been through the vagaries of the business cycle as a team since 1973, including the workers comp crisis of 1999. Neither is a young man, but both are fit. Management means everything during times like these. I have no idea about trading FMT at these levels. But I know when the 2006 annual report is published there will be some losses given the recent CEASE & DESIST Order passed down by the FDIC. To simplify, the Order states if FMT wants to continue insuring its bank deposits through the FDIC, FMT must stop making subprime residential real estate loans or the only type of residential real estate loans FMT writes. I can quantify the damage after the 2006 4th qtr statement is published. As a result the residential real estate assets need to written down to something close to market value. So next year the losses may be gigantic. I can quantify the damage after the 2007 qtrly statements are published. My guess is owners equity of $ 1,356,806,000 may be cut in half depending on what the residential real estate assets sell for. Here is a heads up about, companies with big losses usually suffer tax loss selling that ends the first weeks of December. FMT will behave like every other money losing company in this regard.