Thursday, October 13, 2011

Wednesday Thoughts

Rumor is that large firms are considering shedding their bank holdings to get around the Volcker Rule.

My view is that, given that these companies are pinatas of populism today, it would be very difficult for, say, GS, to skirt the regulation by shedding its bank status.

Reuters reports:

Losses for private investors on Greek debt in the second financing package for Athens are likely to be between 30% and 50%, rather than the earlier agreed 21%, eurozone officials said on Wednesday."

Life insurance stocks trade at a 30% discount to book value and at less than 7x earnings.

With interest rates rising, life insurance stocks should begin to benefit.

They are "stupid cheap" at a 30% discount to book value and at less than 7x earnings. LNC; MET; PRU; etc.

Mr. Market will do what Mr. Market does -- and that is to make the most people suffer.

"The fact that people are even talking about the government stepping in to shore up the banks, when two months ago people thought there was nothing wrong with the Chinese banks, should tell you just how seriously this situation is deteriorating."
-- Jim Chanos

Run, don't walk, to listen to Jim Chanos talk on Bloomberg on China's banks, real estate and politics.