Last week, TFS Financial Corporation's (TFSL) Board of Directors approved a 25% increase in the company's quarterly dividend to 12.5 cents per share.
TF Financial (THRD) owners can elect to receive either $42 per share in cash or 4.22 shares of National Penn (NPBC) stock for each share of THRD they own.THRD closed at $31.84 last night, NPBC at $10.44.The total deal value is $138M, and the purchase price amounts to 20x earnings and 1.44x tangible book value.Source: Press Release Post your comment!
TFS Financial Corp. was a big mover last session, as the company saw its shares rise nearly 7% on the day.
Shares of TFS Financial fell 0.3% on Friday after the company reported fiscal first-quarter 2014 earnings on Jan 30 after market close. Earnings per share of 5 cents were in line with the Zacks Consensus Estimate.
TF Financial Corporation (THRD) declares $0.12/share quarterly dividend, 20.0% increase from prior dividend of $0.10.Forward yield 1.55%Payable Feb. 14; for shareholders of record Feb. 7; ex-div Feb. 5. Post your comment!
TFS Financial Corp's fiscal fourth-quarter 2013 earnings (ended Sep 30) came in at 5 cents per share, in line with the Zacks Consensus Estimate.
In August 2012, when isolating one of the various reasons for the latest housing bubble, we suggested that a primary catalyst for the price surge in the ultra-luxury housing segment and the seemingly endless supply of "all cash" buyers (standing at an unprecedented 60% of all buyers lately as reported by Goldman) is a very simple one: crime. Or rather, the use of US real estate as a means to launder illegal offshore-procured money. We also identified the one key permissive feature which allowed this: the National Association of Realtors' exemption from Anti-Money Laundering provisions. In other words, all a foreign oligarch - who may or may not have used chemical weapons in their past: all depends on how recently they took their picture with the Secretary of State - had to do to buy a $47 million Florida house, was to get the actual cash to the US. Well good thing there are private jets whose cargo is never checked. This is how we framed the problem last August: ... a foreigner who may or may not have engaged in massive criminal activity and/or dealt with Iran, Afghanistan, or any other bogeyman du jour at some point in their past, and is using US real estate merely as a money-laundering front perhaps? Sadly, we will never know. Why? As explained before, it is all thanks to the National Association of Realtors - those wonderful people who bring you the existing home sales update every month (with a documented upward bias every single time) - which just so happens is the only organization that actively lobbied for and received an exemption from AML regulation compliance. In other words, unlike HSBC, the NAR is untouchable, even if it were to sell a triplex to Ahmedinejad on West 57th street. As a reminder, here is where the NAR stands on the issue of its most generous clients possibly being some of the worst criminal known to man, courtesy of Elanus Capital: Many of you reading this will undoubtedly have spent time in an international bank and been forced to sit through countless hours of “know your client” and AML training. Fascinating to note that the National Association of Realtors lobbied for and received a waiver from such regulation. That’s right, realtors actually went to the U.S. government and said: we want to be able to help foreign business oligarchs and other nefarious business people launder money through the real estate markets of the United States – and prevailed. Here's their official position: "NAR supports continued efforts to combat money laundering and the financing of terrorism through the regulation of entities using a risk-based analysis. Any risk-based assessment would likely find very little risk of money laundering involving real estate agents or brokers. Regulations that would require real estate agents and brokers to adopt anti-money laundering programs may prove to be burdensome and unnecessary given the existing ML/TF regulations that already apply to United States financial institutions." Hat’s off to the NAR – that is some serious doublespeak. My translation: We’ll support you as long as we don’t have to support you. If after skimming the above, readers are still confused what the reason is for the luxury segment of the US housing market continuing to rise in price even as all other segments of the quadruplicate US housing market as explained here languish, we suggest rereading it as many times as necessary. It appears that a year later this too hypothesis has been proven. Earlier today the Post reported that "U.S. authorities announced Tuesday that they are seeking forfeiture of pricey Manhattan real estate linked to a fraud they say was uncovered by a whistleblowing Russian lawyer before he died behind bars. A civil forfeiture complaint filed against the assets of a Cyprus-based real estate corporation and other holding companies alleges that some of the proceeds from the $230 million tax fraud in Russia were laundered through the purchase of four luxury condominiums located in a Wall Street doorman building and two commercial spaces in prime locations in midtown and Chelsea." The lately ubiquitous was quick to take credit: “Today’s forfeiture action is a significant step toward uncovering and unwinding a complex money-laundering scheme arising from a notorious foreign fraud,” U.S. Attorney Preet Bharara said in a statement. “While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place.” Oh but it is because quite simply nobody cares where the money comes from, the NAR is exempt from doing even the most cursory background check, and as long as the prevailing average home price rises, everyone is happy. What is curious is where the source of the info came from: The whistleblower, Sergei Magnitsky, was a lawyer for U.S.-born British investor William Browder. He alleged in 2008 that organized criminals colluded with corrupt Russian Interior Ministry officials to claim a fraudulent $230 million tax rebate after illegally seizing subsidiaries of Browder’s Hermitage Capital investment company. He subsequently was arrested on tax evasion charges and died in prison in November 2009 of untreated pancreatitis at age 37. His death prompted widespread criticism from human rights activists, and the Russian presidential human rights council found in 2011 that he had been beaten and deliberately denied medical treatment. Browder, who has campaigned to bring those responsible for Magnitsky’s death to justice, has claimed that one of the corrupt tax officials bought luxury real estate in Moscow, Dubai and Montenegro and wired money through her husband’s bank accounts worth $39 million. That this is the first of many such money laundering schemes to be exposed is obvious to anyone. With the recent witchhunt of Russian, and other billionaires, in Europe following the Cyprus debacle, it is only logical that the vast majority parked their cash in what until now, was the last safe use of illicit funds: US real estate, where the policy don't ask, don't tell is more alive now than ever, and has spawned countless HGTV (and CNBC) shows highlighting the resurgent New York City (and other high end cities') housing market. The bigger question is just how far will Bharara take this, and comparable such future actions. And more importantly, how will the panicked NAR lobby respond if suddenly a key source of "all cash, sight unseen" buyers disappears. Finally, if indeed money laundering is no longer possible into US real estate, kiss yet another of the several key spokes (alongside foreclosure stuffing, the private equity REO-to-Rent investment wave and the Emerging Market capital flow crisis) of the artificial housing recovery goodbye. Why? Apartments in the luxury 35-story Manhattan high-rise can sell for more than $3 million, according to real estate websites. Amenities include a gym, a pool and rooftop deck. Now take this single example and multiple by hundreds and thousands of times.
TFS Financial (TFSL): Q2 EPS of $0.05 beats by $0.02. (PR) Post your comment!
TFS Financial (TFSL): Q1 EPS of $0.04 beats by $0.01. (PR) Post your comment!
Note: Snowing like crazy 30 miles north of NYC - wind picking up as I write. The forecast for me is 12-18 inches. I'm hoping it pushes three feet.... Some odds and ends: MS Pumps Japan Morgan Stanley has a new report on GOOG. Not surprisingly, the folks at MS like the stock. They looked at the variables and concluded the shares could trade 20+% higher; they also have a bear case where the stock could be 16% down on the year. The graph of those expectations: It's appropriate for MS to have a bull and a bear case, that's the nature of investing. MS does not always present a balanced view. I wrote about the firm's outlook for AAPL on 12/17. Back then, MS thought that AAPL could go no lower than $500 - an assumption that has proven wrong. I bring this up to make a point about yet another MS pick. The folks wearing the spats are wild crazy in love with Japanese stocks. MS thinks that the TOPIX is a sure bet - no downside at all. In fairness to MS, they are not alone with their extremely bullish view on Japan. In fact, they are in a monster crowd of folks, all of the whom see only higher stocks and smooth sailing. When was the last time that "everyone" was right? Leaderless The following is a pic of the first paragraph of a letter sent to Jeff Zients, the current head of the OMB. The letter was signed by a number of Republican big shots. The letter is an info request. It's a witch hunt headed in the direction of Jack Lew, Obama's candidate for Treasury Secretary. The suggestion is that Lew was derelict on a reporting requirement related to Medicare while he ran OMB. As near as I can tell, this is much ado about nothing. But, then again, there are those heavy hitter Republicans doing the asking. I take this to be evidence that Lew is in for a hell of a battle with his confirmation hearings. This is going to get dragged out for as long as possible. We will not have a T-Sec for months. Too bad - there are a few issues on the calendar where a T-Sec might come in handy: * March 1 - Up or down on the Sequestered amounts * March 27 - Final date for a Continuing Resolution to avoid a government shut-down. * April 15 -Agreed to date for a budget approved by congress and WH. * May 27 - The Debt Ceiling must be raised - for real this time. * The clock is already ticking on the last important issue. The world is going through a currency war. As of now, the USA is coming in third in this three-way war. I get the sense from the markets and the press that these things are being ignored. Everything is on a smooth glide path - nothing to worry about. The USA doesn't need a T-Sec. Everything will work out fine, even if there is no hand on the rudder. Wait a few weeks on that conclusion. On FX The most significant financial event of 2012 was Mario Draghi's July speech. He said one word, "Unlimited", and the global markets were off to the races with no looking back. The guy just has to talk and tens of trillions of capital got down on its knees and gave thanks. With that in mind, it should come as no surprise that Draghi can talk about FX in the vaguest of ways, and the markets quickly adjust to what the Supreme Leader wants. Mario's talking caused a lot of noise and back-filling in FX land this week. I'm not buying it. I don't think Super Mario can get away with all talk and no action this time. The FX markets are wound very tight, and the players are flush with cash from the gains of the past six months. If there is to be a test of Draghi, it will come before the end of the month. If the market pushes the EURJPN, USDJPN to new highs and the EURUSD catches a bid in the cross trading fray, then Mario will have to back up his talk with some action. That would be a first, an interesting one at that. If the FX markets don't "obey" Draghi, what are the EU bond markets going to think? Will they call the Draghi bluff along with the FX guys? One would think so. That would also be interesting, and it ain't on anyone's playbook. CBO on SS The Congressional Budget Office released a report of the financial status of Social Security this week. The report contained significant revisions from prior year’s estimates. The conclusions by the CBO stand at odds with the forecasts provided by the Trustees of SS in their report to Congress ten months ago. The key conclusions by the CBO: - The SS Trust Fund (TF) will reach its highest level in fiscal 2016. (The SS estimate is for 2022) - The TF will achieve a maximum balance of 2.8T. The SS estimate if for $3.25T) - The Trust Fund for Disability Insurance will be exhausted by Valentines Day, 2016. The CBO concludes that the SSTF will top out six-years earlier than is now anticipated. The TF will achieve a maximum balance that is $425B lower than currently projected. In its upcoming report (April), the SSTF will have to make significant revisions to its prior projections. The SSTF can’t release a report that varies significantly from the conclusions by the CBO. Who cares (Other than wonks like me)? After all, this is just paper - and Social Security doesn't add to the deficit - Right? At least that is what is repeated over and over. But it does add to the debt, and that is rapidly become a critical variable. Jeb Graham at IBD looked at the implications of the CBO report. Look how quickly cash is going out the door at SS. (Link) The CBO is now confirming (what I have been saying for many years) that SS is going to be rapidly increasing its annual cash deficit. It will hit $75b in 2013. It will be $225 b in a decade. After that it goes ballistic. Every penny of these deficits must be financed by issuing more Debt to the Public. They say that if something can be anticipated, it is not, by definition, a Black Swan. The unwinding of America's $5T of "Trust Funds" may not be a Black Swan event, but it does create a systemic risk. To my knowledge there is no one "out there" who thinks/writes about SS as a systemic risk. That probably means it is a systemic risk and because it will be a "surprise" to many people, it still could turn out to be a Black Swan.
TFS Financial Corporation (TFSL): FQ1 EPS of $0.04 beats by $0.02. (PR) Post your comment!
TF Financial (THRD) declares $0.05/share quarterly dividend, in line with previous. Forward yield 0.82%. For shareholders of record Feb. 08. Payable Feb. 15. Ex-div date Feb. 06. (PR)
TF Financial (THRD) declares $0.05/share quarterly dividend, in line with previous. Forward yield 0.82%. For shareholders of record Feb. 08. Payable Feb. 15. Ex-div date Feb. 06. (PR) Post your comment!
Back in September, we explained that when it comes to "boom" in US real estate, there are three key driving forces: i) the Fed's monetization of mortgage backed securities whose impact however is at best to stabilize the demand floor (and judging by the recent collapse in refi activity even that is questionable), ii) an implicit subsidy as banks keep millions of units on their books (to get a sense of how much check out at the chart in "Six Month + Delinquent Mortgages Amount To More Than Half Of Bank of America's Market Cap") in some phase of the foreclosure process, and away from clearing in the market, and perhaps most importantly, iii) the fact that the NAR can legally launder offshore money courtesy of being exempt from anti-money laundering provisions. This allows billions in ill-gotten offshore cash, sourced primarily from Russia and China, to be "invested" in US real-estate, with no cost or pricing discrimation and without any questions asked from any authorities. Because, sure enough, the final result can be spun as a "boom" in real estate by the administration and the banks so very invested in reflating the housing bubble. This was explained as follows: the NAR, best known for misrepresenting the real state of the existing US housing market for years, has an open waiver for anti-money laundering regulation from none other than Uncle Sam. Because while it is one thing to blow up the biggest breadwinning industry in Switzerland to pad the tax bill and to spread class warfare, it is something totally different to represent to the world that ultra-luxury segment aside, which is merely an artifact of global money laundering, the US real estate housing emperor is as naked as he was 4 years ago. As a reminder, here is where the NAR stands on the issue of its most generous clients possibly being some of the worst criminals known to man, courtesy of Elanus Capital: Many of you reading this will undoubtedly have spent time in an international bank and been forced to sit through countless hours of “know your client” and AML training. Fascinating to note that the National Association of Realtors lobbied for and received a waiver from such regulation. That’s right, realtors actually went to the U.S. government and said: we want to be able to help foreign business oligarchs and other nefarious business people launder money through the real estate markets of the United States – and prevailed. Here's their official position: "NAR supports continued efforts to combat money laundering and the financing of terrorism through the regulation of entities using a risk-based analysis. Any risk-based assessment would likely find very little risk of money laundering involving real estate agents or brokers. Regulations that would require real estate agents and brokers to adopt anti-money laundering programs may prove to be burdensome and unnecessary given the existing ML/TF regulations that already apply to United States financial institutions." Hat’s off to the NAR – that is some serious doublespeak. My translation: We’ll support you as long as we don’t have to support you. Indeed it is. What the NAR is saying is that for now go ahead and lift every offer on every duplex and triplex off Central Park. Your money is absolutely safe with us... this instant. * * * While the above explained what is going on in theory, today courtesy of Mike Krieger we now have formal glimpse into just what is really supporting US housing in practice. From Corrupt Chinese Politicians are Buying Billions in U.S. Real Estate, from Liberty Blitzkrieg Many of us spent much of 2012 confused about how the U.S. real estate market was improving within the context of a broke and unemployed citizenry. Well as time has passed the answers to our questions have been revealed. The criminals are piling in. I first explained a couple of weeks ago how the financial oligarchs in the United States are currently in a bidding war to become America’s slumlords in my post: America Meet Your New Slumlord: Wall Street. Now we also discover that part of the bid to U.S. real estate has come from another criminal class. In this case, we are talking about corrupt Chinese officials who are pulling their ill gotten gains from their homeland and desperately placing it in real estate all over the globe. From The Telegraph: As China’s new leaders intensify a campaign to root out corruption, thousands of Communist party officials have been panicked into a fire sale of their illicit properties while billions of pounds have been smuggled overseas. It said the volume of deals had intensified by “a hundred times” after Xi Jinping, the incoming Chinese president, warned that corruption could kill the Party and put one of the country’s most vigorous and resolute politicians, Wang Qishan, in charge of stamping out graft. It also claimed that an astonishing $1 trillion (£630 billion), equivalent to 40 per cent of Britain’s annual GDP, had been smuggled out of China illegally in 2012. Marco Pearman-Parish at Corporation China, a company in Beijing that helps clients find properties abroad, said there had been a strong rise in clients looking for homes in the Cayman Islands. In the United States, the National Association of Realtors said that more than $7 billion of properties had been bought by Chinese in the US last year. Some high-end homes are now specifically built for rich Chinese with ponds for koi carp and a second kitchen for pungent cooking. I guess word has gone out globally that the U.S. is open for business as far as the global criminal class is concerned. They can rest assured knowing they will never face repercussions in this lawless land. At least that is what they think. What we must do is never forget who is buying all of these properties and when the time comes they should all be seized and these crooks sent back to the place they came from.
Two liberal Emags have been pushing for the "Platinum Coin" as a solution to the upcoming debt ceiling crisis. Adding to the push by the liberal media, the White House is sponsoring a petition to “force” the Treasury to issue a coin for a trillion or two. I want to barf at this talk. In my opinion, there is no substance to the coin solution. In theory, it does resolve the debt limit issue that is just months away from a crisis. But that would be a terrible outcome for the country. Any chance at achieving fiscal discipline and a sustainable debt path would be lost. Yesterday, the Fed indicated that it was closer to ending and reversing QE than had been previously been thought. If you believe the Fed (I don’t), then you should expect QE to end before the end of the year, and the long process of unwinding the Fed’s balance sheet will begin. But if a coin is used to replace the bonds the Fed has in inventory, the Fed will be powerless to reverse QE. The coin makes prior QE permanent. I see that step as the ultimate “fold” on responsible monetary policy. It’s a cheap way to avoid the country’s “Speed Bump” on explosive debt creation. Bottom line: The coin is a phony solution to a real problem. BUT I want to say in print that I will support the coin concept with all of the resources I can bring to bear. I will write about it, I will sign petitions, I will march on DC, and I will put up money to support the cause. BUT My support is conditional on a minor revision of the “plan” spelled out by Huff Post and Business Insider. My plan: - Three coins are issued. Two for $500B; the other for a cool $1T. I would use these coins to extinguish $2T of debt. - The $2T of debt reduction would be sufficient to bridge the country to 2015. As a result, the country would benefit from two years without a self-induced financial crisis. The $2T buys the country breathing space through the bi-elections. My coin solution would take politics out of the process for a much needed 24 months. Like it so far? Now, the key difference between BI/Huffy and me: - A $500B coin would be given to the Federal Employee Retirement System (FERS). - A $500B coin would be given to the Military Retirement Fund (MRF). - The $1T coin would be given to the Social Security Trust Fund (SSTF). The government Trust Funds (TF) for FERS, MRF and SSTF are holding a whopping $4.6 Trillion today of government IOUs. My plan would reduce that by less than 50%. The debt held by the TFs is more of an accounting entry than a real debt. The bonds held by the TFs do not, in any way, secure the promises that the government retirement funds have made to current and future beneficiaries. The benefit payouts are set by Congress; they can be changed at any time. The existence, and the size of the TFs, has nothing to do with benefits. Period. I believe that my proposal is a substantial improvement to the one being pushed by the liberal media. It achieves everything that those folks have been pushing for. It does that without tying the Fed’s hands, or creating the risk of future inflation. What’s not to like with that result? There is not one chance in a million that the likes of BI and Huff Post would go for this. These outfits do want to see the pesky debt limit problem disappear, but they LOVE Social Security. My challenge to Arrianna Huffington, Henry Blodgett and Joe Weisenthal is to step up to the plate, and make a real stand on the coin. Do the “right” thing. Do the “smart” thing. Mint your coins; buy the time you think we need, just put those coins of yours in the tills of America’s Trust Funds. My bet here? I never hear from Arianna, Henry or Joe. Their base of readers would crap in their pants over my suggestion. The readers would rip those Mags apart with criticism. Those “influential” supporters of the coin plan that BI keeps referring to would run away in droves. Those who want coins are also pregnant with their support of SS. BI and Huff Post can’t do the right/smart things. If they can’t do the right things, they should just fold their cards on the coin idea. Note: I wrote about using a coin to extinguish federal debt owed to Social Security on 10/31: How To Eliminate $4.5 Trillion of Debt.