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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (455871)	2/12/2009 11:24:42 AM
From: d[-_-]b	Read Replies (1) \| Respond to of 1575704

We know you're a toady for the party line - freedom of speech is not free unless equal time and prying into the dalibama's personal information is not an issue for you - what a fraud you are. PS: Econo-ted how did tax breaks cause bank failures again?

To: tejek who wrote (455871)	2/12/2009 11:43:25 AM
From: Road Walker	Read Replies (1) \| Respond to of 1575704

U.S. stocks knocked by worry over value of bank assets 10:59 AM EST February 12, 2009 NEW YORK (MarketWatch) -- With Washington moving on a stimulus package to jump start the economy, the measure does little to address the persistent weight dragging the stock market down: placing a value on the toxic assets held by financial institutions. "We need to know where they are going to price the mortgage assets in order to stabilize the financial institutions," said Marc Pado, U.S. market strategist at Cantor Fitzgerald. On Thursday, the battered financial sector once again led the market's sharp decline, with issues including Zions BancorpFifth Third Bancorp and Wells Fargo & Co. all down about 9%. After sliding more than 200 points early on, the Dow Jones Industrial Average was more recently down 146.39 points at 7,793.14. The S&P 500 shed 14.07 points to 819.67, and the Nasdaq Composite fell 9.95 points to 1,520.55. While a $789 billion stimulus deal is expected to clear the House and Senate as soon as Thursday, the proposed legislation fails to adjust the mark to market rule, putting "even more pressure on the Treasury to nail down some kind of a valuation model," said Pado. "We're heading into a long weekend, and (Treasury Secretary Timothy) Geithner is off to Europe, and still nobody knows how much these assets are worth," said Marc Groz, founder and chief investment officer of Topos LLC.

To: tejek who wrote (455871)	2/12/2009 11:48:58 AM
From: Road Walker	Read Replies (1) \| Respond to of 1575704

Stress-Testing Banks Ahead Of The Government 2:33 PM EST February 11, 2009 By Matthias Rieker Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The Treasury Department says it will stress-test banks; some analysts have already done the work. The conclusion from CreditSights Inc., for example, is that even under a mild worsening of the current recession, Bank of America Corp. (BAC), Citigroup Inc. (C) and Wells Fargo & Co. (WFC) would need capital support to maintain key capital ratios at desirable levels because souring consumer and business loans would mount. JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) would need capital only in a more severe economic downturn, where unemployment might reach about 10%. In that case, some large regionals, such as Regions Financial Corp. (RF) and SunTrust Banks Inc. (STI), would also require a capital infusion. It's not clear yet what the Treasury will look at when it stress-tests banks; this, like other details of the new Financial Stability Plan, has yet to be laid out. But analysts typically look at asset valuations and loan losses under different economic scenarios when they perform stress tests on banks. To be sure, stress-testing has its flaws; many investors and analysts clearly didn't foresee the severity of the current financial crisis when performing earlier analyses. CreditSights analyst David Hendler wrote in his recent report that most big banks and regionals "have adequate capital to absorb our estimated markdown and provisions" for loan losses if the economy slowly, but not severely, worsens. That is in part because those banks received government support from the Troubled Asset Relief Program. But exposure to residential and commercial real estate, particularly in Florida and Atlanta, could hurt Regions and SunTrust. In a more severe economic slump, Regions, for example, "would need as much as $25.5 billion in fresh capital to maintain a tier 1 ratio of 7.5%," Hendler wrote. Tier 1 measures a bank's risk-weighted capital, and bank regulators require a minimum of 6% to consider a bank "well-capitalized." Some analysts and even bankers have said that an 8% ratio is more adequate in the economic downturn. Even in a less severe economic decline, Regions might need about $823 million in fresh capital, Hendler said. David Trone of Fox-Pitt Kelton Cochran Caronia Waller took a close look at JPMorgan Chase's capital and earnings in three different unemployment scenarios. According to Thomson Reuters, the average analyst estimate for JPMorgan Chase's earnings in 2010 is $2.93 a share. But Trone said earnings could come in at $2.48 a share if unemployment were to rise to 9%. Then, the bank's tier 1 ratio would be 10.4% and its tangible common equity ratio would be 3.89%. The tangible common equity ratio strips out intangibles, like goodwill, when measuring common equity as a percentage of assets. Many analysts consider a 4% tangible common equity ratio adequate. If unemployment were to reach 10%, earnings would come in at $1.88 a share, tier 1 would be 10.3%, and common equity would be 3.8%. "While one can never be sure how much unemployment will affect credit costs, we believe this analysis shows that JPMorgan Chase could withstand a rather deep recession without requiring a dilutive capital raise," Trone wrote. Regions, Wells, Citi, JPMorgan and Goldman Sachs declined to comment for this story. Morgan Stanley did not have an immediate comment. Bank of America and SunTrust did not immediately return phone calls. -By Matthias Rieker, Dow Jones Newswires; 201-938-5936; matthias.rieker@dowjones.com