alevin
04-05-2008, 10:11 AM
From Market Ticker, http://market-ticker.denninger.net/2008/04/sivs-appear-to-be-dead-heeeellloo.html
FASB has removed the concept of QSPEs, which is the enabling "piece" to make off-balance-sheet securitizations possible, from the FASB set of regulations, specifically, FAS 140.
This appears to have happened TODAY (Friday 4/4).
As such it appears that all financial institutions will have to reclaim all SIVs back onto their balance sheets no later than the start of 2009.
This is a watershed event, in that these vehicles, when they are reclaimed onto bank balance sheets, is likely to lead to the P/Es of these firms skyrocketing north, and consequently, a far more realistic view of both share price AND capitalization.
Okay, I'm trying to understand what the implications of this are, hoping for some feedback from folks that understand market behavior better than me. The way I read this is that bank stock prices are going to become fairly priced and REALLY expensive, no later than end of 2008?
So in meantime, get in on ground floor now and ride the price wave up, but get out before end of year, because once they become fairly priced, nobody will want to buy because P/Es will be way over priced at that point and stock prices will tank? Am I completely confused, or only partly, or not at all???
FASB has removed the concept of QSPEs, which is the enabling "piece" to make off-balance-sheet securitizations possible, from the FASB set of regulations, specifically, FAS 140.
This appears to have happened TODAY (Friday 4/4).
As such it appears that all financial institutions will have to reclaim all SIVs back onto their balance sheets no later than the start of 2009.
This is a watershed event, in that these vehicles, when they are reclaimed onto bank balance sheets, is likely to lead to the P/Es of these firms skyrocketing north, and consequently, a far more realistic view of both share price AND capitalization.
Okay, I'm trying to understand what the implications of this are, hoping for some feedback from folks that understand market behavior better than me. The way I read this is that bank stock prices are going to become fairly priced and REALLY expensive, no later than end of 2008?
So in meantime, get in on ground floor now and ride the price wave up, but get out before end of year, because once they become fairly priced, nobody will want to buy because P/Es will be way over priced at that point and stock prices will tank? Am I completely confused, or only partly, or not at all???