Meredith Whitney Quote / Data Point

[sdduuuude]

Well, I was right about this:

[quote=sdduuuude]
I have a feeling I’m about to learn something …
[/quote]

So, is it a “wow” or a “hmmm” ?

[sdduuuude]

[quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.

[sdduuuude]

[quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.

[sdduuuude]

[quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.

[sdduuuude]

[quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.

[sdduuuude]

[quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.

[davelj]

[quote=sdduuuude][quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.[/quote]

As I’ve explained here before… charge-offs don’t happen all at once. A large portion of a loan’s ultimate charge-off (when there’s a loss) is charged off BEFORE the collateral is sold. Reserves and charge-offs take place as an asset moves from performing status to non-performing status to doubtful status to sale. I’m NOT saying that Meredith Whitney is wrong here… I’m just saying that YOU don’t have enough information or context to know the difference. My point here really has nothing to do with Meredith Whitney’s prediction, but rather your willingness to comment on her prediction when you don’t have enough information or expertise to do so intelligently.

[davelj]

[quote=sdduuuude][quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.[/quote]

As I’ve explained here before… charge-offs don’t happen all at once. A large portion of a loan’s ultimate charge-off (when there’s a loss) is charged off BEFORE the collateral is sold. Reserves and charge-offs take place as an asset moves from performing status to non-performing status to doubtful status to sale. I’m NOT saying that Meredith Whitney is wrong here… I’m just saying that YOU don’t have enough information or context to know the difference. My point here really has nothing to do with Meredith Whitney’s prediction, but rather your willingness to comment on her prediction when you don’t have enough information or expertise to do so intelligently.

[davelj]

[quote=sdduuuude][quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.[/quote]

As I’ve explained here before… charge-offs don’t happen all at once. A large portion of a loan’s ultimate charge-off (when there’s a loss) is charged off BEFORE the collateral is sold. Reserves and charge-offs take place as an asset moves from performing status to non-performing status to doubtful status to sale. I’m NOT saying that Meredith Whitney is wrong here… I’m just saying that YOU don’t have enough information or context to know the difference. My point here really has nothing to do with Meredith Whitney’s prediction, but rather your willingness to comment on her prediction when you don’t have enough information or expertise to do so intelligently.

[davelj]

[quote=sdduuuude][quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.[/quote]

As I’ve explained here before… charge-offs don’t happen all at once. A large portion of a loan’s ultimate charge-off (when there’s a loss) is charged off BEFORE the collateral is sold. Reserves and charge-offs take place as an asset moves from performing status to non-performing status to doubtful status to sale. I’m NOT saying that Meredith Whitney is wrong here… I’m just saying that YOU don’t have enough information or context to know the difference. My point here really has nothing to do with Meredith Whitney’s prediction, but rather your willingness to comment on her prediction when you don’t have enough information or expertise to do so intelligently.

[davelj]

[quote=sdduuuude][quote=davelj]Your equations above are meaningless because you don’t know what reserves or charge-offs have already been put up against the NPAs.[/quote]

Actually, I did. The quote continues. Here is the part I did not include ….

[quote=Meredith]There’s huge growth in non-performing assets. These are numbers, apples-to-apples, on the four big banks. The issue is when does that stuff that’s not paying come to market, and when do banks recognize the chargeoffs? I think you’re going to see more of that in the second quarter and the third quarter. Does the supply move in the second quarter and then you report it in the third quarter? The timing may be weighted more to the third quarter. I just don’t know.[/quote]

So, if Meredith is to be trusted, it’s pretty clear that those NPAs have not yet been charged off.[/quote]

As I’ve explained here before… charge-offs don’t happen all at once. A large portion of a loan’s ultimate charge-off (when there’s a loss) is charged off BEFORE the collateral is sold. Reserves and charge-offs take place as an asset moves from performing status to non-performing status to doubtful status to sale. I’m NOT saying that Meredith Whitney is wrong here… I’m just saying that YOU don’t have enough information or context to know the difference. My point here really has nothing to do with Meredith Whitney’s prediction, but rather your willingness to comment on her prediction when you don’t have enough information or expertise to do so intelligently.

[davelj]

[quote=sdduuuude]Well, I was right about this:

[quote=sdduuuude]
I have a feeling I’m about to learn something …
[/quote]

So, is it a “wow” or a “hmmm” ?[/quote]

I have no idea. On the polar opposite side of the debate is Dick Bove:

http://www.businessweek.com/news/2010-03-24/dick-bove-says-bank-stocks-may-quadruple-by-2012-update1-.html

Dick Bove is prone to hype, but he’s no dummy. And he’s been in the business a lot longer than Meredith Whitney. My bet is that neither of them is completely right and the answer is somewhere in the middle (as that’s how these things tend to be).

Meredith Whitney made a great early contrarian call with respect to housing and financials. My hat’s off to her. Then she got steamrolled by Reflexivity as a bunch of banks got recapitalized during a “senseless” rally – something she never saw coming. Meredith Whitney’s information and take on things is not so different from a lot of other analysts right now. The problem is that banks continue to raise capital at “inflated” prices which confounds her bearish predictions. The fundamentals are important. But Reflexivity is changing the fundamentals.

I have no real opinion on the Big Banks. They are so far outside of my sphere of operations (and understanding) that I don’t pay too much attention to them. I view them more as a curiosity than anything else.

[davelj]

[quote=sdduuuude]Well, I was right about this:

[quote=sdduuuude]
I have a feeling I’m about to learn something …
[/quote]

So, is it a “wow” or a “hmmm” ?[/quote]

I have no idea. On the polar opposite side of the debate is Dick Bove:

http://www.businessweek.com/news/2010-03-24/dick-bove-says-bank-stocks-may-quadruple-by-2012-update1-.html

Dick Bove is prone to hype, but he’s no dummy. And he’s been in the business a lot longer than Meredith Whitney. My bet is that neither of them is completely right and the answer is somewhere in the middle (as that’s how these things tend to be).

Meredith Whitney made a great early contrarian call with respect to housing and financials. My hat’s off to her. Then she got steamrolled by Reflexivity as a bunch of banks got recapitalized during a “senseless” rally – something she never saw coming. Meredith Whitney’s information and take on things is not so different from a lot of other analysts right now. The problem is that banks continue to raise capital at “inflated” prices which confounds her bearish predictions. The fundamentals are important. But Reflexivity is changing the fundamentals.

I have no real opinion on the Big Banks. They are so far outside of my sphere of operations (and understanding) that I don’t pay too much attention to them. I view them more as a curiosity than anything else.

[davelj]

[quote=sdduuuude]Well, I was right about this:

[quote=sdduuuude]
I have a feeling I’m about to learn something …
[/quote]

So, is it a “wow” or a “hmmm” ?[/quote]

I have no idea. On the polar opposite side of the debate is Dick Bove:

http://www.businessweek.com/news/2010-03-24/dick-bove-says-bank-stocks-may-quadruple-by-2012-update1-.html

Dick Bove is prone to hype, but he’s no dummy. And he’s been in the business a lot longer than Meredith Whitney. My bet is that neither of them is completely right and the answer is somewhere in the middle (as that’s how these things tend to be).

Meredith Whitney made a great early contrarian call with respect to housing and financials. My hat’s off to her. Then she got steamrolled by Reflexivity as a bunch of banks got recapitalized during a “senseless” rally – something she never saw coming. Meredith Whitney’s information and take on things is not so different from a lot of other analysts right now. The problem is that banks continue to raise capital at “inflated” prices which confounds her bearish predictions. The fundamentals are important. But Reflexivity is changing the fundamentals.

I have no real opinion on the Big Banks. They are so far outside of my sphere of operations (and understanding) that I don’t pay too much attention to them. I view them more as a curiosity than anything else.

[davelj]

[quote=sdduuuude]Well, I was right about this:

[quote=sdduuuude]
I have a feeling I’m about to learn something …
[/quote]

So, is it a “wow” or a “hmmm” ?[/quote]

I have no idea. On the polar opposite side of the debate is Dick Bove:

http://www.businessweek.com/news/2010-03-24/dick-bove-says-bank-stocks-may-quadruple-by-2012-update1-.html

Dick Bove is prone to hype, but he’s no dummy. And he’s been in the business a lot longer than Meredith Whitney. My bet is that neither of them is completely right and the answer is somewhere in the middle (as that’s how these things tend to be).

Meredith Whitney made a great early contrarian call with respect to housing and financials. My hat’s off to her. Then she got steamrolled by Reflexivity as a bunch of banks got recapitalized during a “senseless” rally – something she never saw coming. Meredith Whitney’s information and take on things is not so different from a lot of other analysts right now. The problem is that banks continue to raise capital at “inflated” prices which confounds her bearish predictions. The fundamentals are important. But Reflexivity is changing the fundamentals.

I have no real opinion on the Big Banks. They are so far outside of my sphere of operations (and understanding) that I don’t pay too much attention to them. I view them more as a curiosity than anything else.

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