Margin of Safety
Latest Posts
Category: Banking
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As I wrote on CFO.com on Tuesday, China’s domestic banks may face problems during the “great moderation” of China’s economic growth. A recent S&P report said that the majority of China’s top banks, and many regional and national banks, “remain vulnerable to credit shocks stemming from a hard-landing scenario for the Chinese economy.” They are not…
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What a week for Anchor Bancorp of Wisconsin. Its holding company declares bankruptcy, then the SEC comes out today with fraud charges against the CFO. (The case was settled.) A bad earnings report just added icing to the cake. Anchor owed the Treasury $139 million in TARP debt. Like Anchor’s other creditors, Treasury settled for…
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Is there any end to banks’ easing of standards on business loans? Loan underwriting is getting pretty loose. The Federal Reserve’s Senior Loan Officer Survey for July shows banks easing standards (yet again) for industrial & commercial loans. The percentage of domestic U.S. banks easing actually was near the highest its been since 2011. Demand…
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My latest story on CFO.com: merchant banking physical commodities warehouses aluminum derivatives price manipulation Goldman Sachs.
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Check out a great column on convertible bonds from an exec at Aequitas Advisors. convertible bonds short seller optionality strike price Aequitas Advisers Photo courtesy of Mighty Antar. Related articles Why convertible bonds are too expensive (investmentviking.wordpress.com) Tesla Shares Rally to Conversion Price, but Noteholders Won’t Strike…Yet (blogs.wsj.com) Alcatel-Lucent Issues $715 Million in Convertible Bonds…
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As I wrote on CFO.com last week, LBO dealmakers have access to cheap debt. New proof of that came out today. According to Reuters, KKR got the cheapest borrowing rates ever for a leveraged buyout. For the acquisition of Gardner Denver KKR is borrowing $2.4 billion in loans and $575 million in bonds. The blended…
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Yep, you guessed it, the federal government. The Financial Times reported today that Freddie Mac will sell a new kind of derivative that will get private investors to take on the risk of default of $22.5 billion in mortgages. From the story: Freddie is selling a new financial product it calls structured agency credit risk,…
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Prior to the financial crisis, you may recall, most of the risk management talk in the banking industry was about protecting against a bird flu virus pandemic. While the mortgage-backed securities market was turning into a toxic wasteland, global regulatory agencies were more concerned about whether banks could function if everyone called in sick. This…
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The Seeking Wisdom blog on WordPress had a great post about the concept of margin of safety. Read it here. Among other points, he provides an excerpt of a 1984 speech on buying companies, by none other than Warren Buffett (boldface is Vembunarayanan’s). You also have to have the knowledge to enable you to make a…
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Listening to two Anglo Irish Bank execs joke about a 7 billion euro bailout is nauseating, but are we really surprised conversations like this went on? This recording of an internal phone conversation between the head of the bank’s capital markets area and its director of retail banking was uncovered by The Irish Independent. The…
Margin of Safety 