Commodes are interesting.  Commodes are important for bankers.  If you are going to lead a large bank through a credit crisis, you probably want a good commode.  Some of the smartest guys on Wall Street like fancy commodes.  Here is a nice commode, an “English Breakfast Commode,’ from 1772.  I am not sure if it helps you identify a bad loan.

The kind of commode John Thain can appreciate

Now that John Thain won’t have access to his $35,000 commode, he’ll have to find one for his “home office.”

More About Commodes

There are times when nothing else will do.  You just need a commode. Now, some people will argue that one commode (like John Thain’s) is different than some other commode.  And then again, some will say that a commode is a commode.

Tell you what: Wal-Mart has a nice bariatric steel commode.  It can be bought and delivered for just $77.68.  It will hold up to 850 pounds.

American Home Products has a stainless steel commode for just $54.  That’s a lot of savings!

Some people have pointed out that John Thain’s commode isn’t like the one at Wal-Mart.  I would have to agree.  John’s is a lot better.  It actually has a lot of functionality that you can’t get from one of these bariatric steel jobs.  You can wash your hands in it!

Now that’s good.  I suppose John is washing his hands of a whole lot these days.

Alternatively, John Thain could get himself a new commode that has a more rustic, open air of feeling.  Something that helps him get in tune with the feelings of the taxpayers, who are going to take the bath on the losses.

Remember, that the deal that BAC worked on the merger with MER said that BAC would only take the first $10 billion in losses.  Then, after that, the next $90 billion in losses are taken by either the Treasury Department or the Federal Reserve.  So, it looks like Ken Lewis is made because that $15.5 billion pretty much exhausts all of the $10 billion that he stood to lose.  But now, each additional dollar in losses is coming off of the taxpayer.

Here is a commode for the American taxpayer, after he is done paying the losses on these loans.  Maybe Ken Lewis can put some of those Merrill loans in it, too.

Taxpayer Commode

Coachmen is selling its recreational vehicle business to Forest River.

The particulars of the deal are not yet available, but the sale has been reported in the Wall Street Journal today.

Coachmen CEO Richard Lavers laments that this is “the worst economic crisis our country has endured in our lifetimes.:”

Housing sales at Coachmen are only off 4 percent, but sales of RV’s have fallen more than 50 percent.

Forest River is owned by Warren Buffet’s Berkshire Hathaway.

Fleetwood (FLE) is going to be removed from the New York Stock Exchange.  Its stock has traded at an average price that falls below $1.00 for the last thirty days.

Fleetwood has some options.  They have until next Tuesday to file a plan to cure the situation.

One plan would be to reduce their outstanding shares in a reverse stock split.

Fleetwood is already under some strain as it tries to find more dollars to make payments on its outstanding debt.  Selling equity cannot solve all of the strain, though, as shareholders have not approved enough new shares to make up the shortcomings.

Today, Fleetwood’s shares are at 52 cents.  This is an increase from the lows of last week, where the stock briefly traded as low as 25 cents.

Don’t look, but Fleetwood (FLE) is tottering.  The company’s shares are trading for as low as 32 cents this morning.  Just one year ago, they were trading for $9.13.

In some ways, the credit crisis and energy costs are a perfect storm against a company like Fleetwood.  Remember that a good portion of their business comes from selling RVs.  RVs have a reputation as gas guzzlers.  They are, after all, mobile houses.  The classic RV vacation requires trips to the pump on any day of driving.  Even worse, most RVs are financed and a lot of that money comes out of home equity.  Its a logical way for an older couple to finance some fun during the golden years.  Refinance on a home that is largely paid off.  Unfortunately, home equity loans are getting to be harder and harder to come by.  Banks are nervous about taking a second position at a time when home values are shrinking.

A technical analysis says that Fleetwood has to pay off a large amount of debt by December 15th.  They are making an offer to exchange that debt through a refinance this week.  Their share prices have fallen off so much that they cannot tap new shares on their own. The new debt will be collateralized with real property, including their factories.

This morning, CIT announced that it will sell off more than $2 billion in assets to an assortment of investors, including all of its manufactured housing portfolio.

CIT made an agreement with Vanderbilt Mortgage and Finance to unload its manufactured-housing portfolio for $300 million. The portfolio has a book value of $470 million, so this is quite a discount. Today, CIT’s shares are trading up.

This is an interesting deal. Warren Buffett is again proving that he is a contrarian, buying assets in a sector that others are fleeing. He has made money before by being right when popular opinion contradicted his assertions. Maybe this is that case, all over again.

Vanderbilt is one of Buffett’s two big plays in manufactured housing finance. Berkshire Hathaway, through its Clayton subsidiary, also owns 21st Century Mortgage.

Buffett gets more than just the assets. He is also buying the servicing rights to the portfolio. Servicing has (more…)