Friday, October 15, 2010

15 October 2010 Don’t Bank On It


15 October 2010 Don’t Bank On It

I may be acting out the Roy Orbinson song “Running Scared”, but the ill winds of foreclosure fear has made me reconsider the few financials I have been pimping here in the old Salve Lucrum Blog. This issue, freak fakey foreclosures, has all the smell of the methane before the BP explosion and spill. We are out of WFC and BAC at a loss. Of the several portfolios we deal in, we have folk who are risk adverse and do not have the cash to buy in on this huge dip. Last night we did the homework looking for regionals that have less mortgage exposure, decent fundamentals, and better hopes of stable shareholder value. We found BOH and ZION. Zion we have talked about here as the Salve Lucrum portfolio has a nice position and sexy gains on some 6% Bonds from Zion. The Bank of Hawaii is a Delaware company doing business in Hawaii, Guam, and other Pacific Islands. The economy in Hawaii is robust compared to most of the country. It’s unemployment is 6.3% compared to a national average of 9.6% and one of their primary employment engines, tourism, is on the mend. I encourage you to visit the SEC filings to do the real homework on BOH. Especially note the reduction in write off provisions implying a future reduction in net charge offs. The 10Q can be found here.

Sung to the tune of Michael Jackson’s Ben:

Ben The Two Of Us We Look Some More.

We Won’t Know Until November Four.

 You get the idea. Ben Bernanke did the blah blah today and said they are ready willing and able to do more quantitative easing. Dah! In theory, as we mentioned here a few weeks ago, the QE II will lower bond rates and thus the overall cost of monies and supposedly doing business which will stimulate businesses to spend and hire which will make people feel better and start spending and viola, a happy ending. And in theory, it could work. Let’s hope so because the estimates are the Fed will dump about 65-100 Billion a month on the Treasury Crap Table.

Have a great weekend. I am finishing my homework this weekend on pharms. I should have ideas for Sunday Night’s Post.

A noteworthy Reader of my Blog:

They asked me not to do this but I could not resist.
This reader is extremely succesful and has met with Senators and Presidents and I am quite proud to have them as a regular reader.  Of course we are talking about Betty Presley on the far right next to that guy in the green striped shirt. 

Salve Lucrum 


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