And the fact that Pakistan, with all its nukes, is a sea of tranquility in Southern Asia comforts me immensely.

O/T, re: Video of the Day

Howard Davidowitz is my man of the hour. I heard the linked interview yesterday on Bloomberg Radio during a 12-hour drive North from Christmas with my folks. His brutal honesty almost drove me off I-95 into a ditch.

As Banker feared, the liquidity crisis definitely has legs.

This just about sums it up...in a nut shell....08 is going to be one hell of a roller coaster ride,,,for many...prepare.

Exit 2007: Denials and Tontaria

Merrill Lynch plans to lay off 1,600

Yahoo! 404 - Page Not Found

Merry xmas...thanks for nothing!!

Cry for the company that can't roll over their CP.

Why, because they won't be able to buy back their stock to suck up the excessive employee stock option dilution. I'd rather short the hell out of all of these clowns.

Justin! I'm likein dat name. Cute! RU? Wazup dude? Listenup Jus ***
I don't think my pal Paris' "purse" as you call it is covered in mink. Might be but doubtful. You know mine aint' cause you seen it! Oooops I did it again...

Britney Spears - official web site and blog

Any updated news from the iceheads up North?

No investor wants to live under such restrictions, and since more than 40% of the frozen ABCP is owned in Quebec, the Harper government may be forced to offer a sympathetic ear.

"If the exposure was in British Columbia or Alberta, we wouldn't feel that the probability of the feds stepping in was that great," said Mr. Orr.

Analysts said one way to help out ABCP holders would be for the Bank of Canada to step in, possibly by offering to take restructured notes as loan collateral.

Oh Canada

The credit market carnage has spread far and wide in Canada, from smaller companies to the provincial governments. While some writedowns are on the books it's likely that there will be more to come.
Dozens of companies have revealed exposure to asset-backed commercial paper, or ABCP, on the short-term debt market.
Junior miner Baffinland Iron Mines Corp. (TSX:BIM) said it has about $43.8 million worth of exposure to ABCP.
Various other resource companies like Miramar Mining Corp. (TSX:MAE) and New Millennium Capital Corp. (TSXV:NML) posted exposure under $5 million each.
As for writedowns, the six biggest Canadian banks haven't been hit nearly as hard as their competitors in the United States. Total reported writedowns related to the credit market are estimated at $2.02 billion, though TD Bank (TSX:TD) managed to escape unscathed.
National Bank (TSX:NA) and CIBC (TSX:CM) were hit the hardest with more than $1 billion in combined writedowns by the end of October. In comparison, Wall Street firms have faced at least $40 billion in writedowns.

The article requested is no longer available.

FINRA has fined J.P. Morgan Securities $500,000 for allegedly failing to inform the Municipal Securities Rulemaking Board (MSRB) of how it used consultants to win the contracts to underwrite numerous municipal securities offerings. The firm also failed to disclose that it had made payments to consultants in an effort to obtain the business pertaining to particular offerings, according to the MSRB. FINRA Hits J.P. Morgan for Muni Violations

December 27, 2007
By Editorial Staff

Federal regulators aren’t just looking into whether Bear Stearns hedge fund managers hedged their holdings in subprime paper by pricing their own holdings at a more attractive rate than those of the public, The Wall Street Journal reports. The Securities and Exchange Commission is investigating more than three dozen firms over whether they should have warned the public earlier over their subprime holdings, they disclosed their risks and how they priced the paper, as well as whether they gave themselves higher values for these securities than their customers.
“As in most investigations, the issue comes down to what did people know and when did they know it,” said Mark Schonfeld, director of the SEC’s New York office. In the past few months, investment firms have written down more than $80 billion in mortgage-related assets.
Among the firms being investigated are UBS, Morgan Stanley, Merrill Lynch, Royal Bank of Canada and Bear Stearns.

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"I live in a country of delusionoids. I wondered how long it could last. What's surprising is that this "free market mania" has disrupted and dead-locked the singles world, too. I've been doing dating for the past 18 months and the expectations and "self worth" is just... wow, I can't even describe it. It's like the housing market, a deadlock between buyers and sellers so nothing ever moves."

I thought I was the only person who has noticed this. Needed to quote this, this is just priceless. Every single person I know is holding out for someone beautiful and successful, no matter how fat and worthless they are.

Yah, the model has a few problems and the on-the-fly tinkering is just guess work, no better than flipping coins. See model failures: I like the area of self-oscillations, where the model is like HAL in 2001, i.e, the model takes control by going parabolic with chaos.

The magnitudes of reflected signal waves, depending on the magnitude of the incident pumping
wave, were determined using the numerical method of nonlinear autonomous blocs. Using our computational algorithm to determine the bifurcation points, the onset and the breakdown of self-oscillations, caused by the instability, were modeled. The transition regime from regenerative parametric amplification to parametric generation, depending on the magnitude of the pumping wave and resonator detuning was simulated infinitesimally close to the bifurcation points. This algorithm, based on the bifurcation analysis, is more complex that any other known ones, but the convergence and its stability for rounding errors is the best.
New results to model parametric excitations of magnetostatic or spin waves, solitons, and chaos
in bounded strongly nonlinear ferrite, particularly in thin films and constrained geometries, will be described .

Mock Turtle - You forgot the link. But don't worry. I have lived through wars - recessions - high inflation - the assassination of a President - gas rationing - my neighborhood being destroyed by a hurricane - 9/11 (was in Manhattan that day) - and have seen family members suffer through illnesses and death. I read plenty - and I am no Pollyanna.

I dislike people obsessing over every word that supports their view of the world - whether it's negative or positive - or arguing with people who disagree. It's like sitting around arguing whether the official hurricane forecast for 2008 is correct. All of life is probabilities. A prudent person takes steps to protect against most worst case scenarios. I have a well built house - insurance - hurricane supplies - and evacuation plans - and whether or not the forecast is accurate - I am ready.

Ditto with my financial life. Since I bought my first MITF from ML back in the 70's - and found the thing was loaded with WHOOP's bonds. The class actions lasted for over a decade. I resolved then to do financial things myself - calling in professionals when necessary. And my husband and I have been very conservative in terms of how we live. We are not the life of the party during booms (because we can't brag about our big scores) - but we are not wringing our hands during the busts either (because we don't overextend ourselves).

About the only thing I don't plan for is the end of the world - or the United States as we know it. Because what would I do? Where would I go? My family came from Europe to escape horrible things - from pogroms to the Holocaust. I am in no big hurry to go back. I have traveled a lot - and things would have to get pretty awful to convince me to leave this country. Not that the United States is always the best - but it is my home. I suspect people from other countries feel the same about where they live.

Sometimes I toy with the idea of buying farmland - but then I realize that I can't even raise a decent crop of tomatoes.

For those of you who think gold is swell - I own physical gold. Bought in the 70's and early 80's - years which scared the heck out of a much younger me. Against the possibility of a financial collapse. Apart from being a lousy investment - it really isn't useful. Ask yourself - if you had something to sell - and someone offered you gold - how would you know it was gold? You have better odds of getting a real Gucci bag on Ebay for $150 than getting real gold in an end-of-the-world financial transaction. My hurricane supplies would probably be more useful than my gold in any type of calamity.

Maybe some day a guy with a suitcase nuclear device will blow me up. I cannot plan for that. Just like I can't prepare for the end of the world. I just try to do the best I can to be ready to live in "normal" bad times.

If Robyn had a blog, I'd never get anything done.

Rowdy,

Re: pushing nonsensical up a hill

No! What is absurd here is the fact the the entire collective banking system worked in unison with the same models, same ideas in collusion, thus the banking system as a numerical set, failed to account for itself in this risk equation, as they focused on expanding the risk model.

The chaos we have today is the result of a systemic failure filled with fatigue-degraded fractures that are like waves of pressure pounding upon reality.

You have absurd models that Moody's and all the agencies and banks play with like Playstation children that have no control, no ritalin and thus this attention deficit is resulting in real world deficits which you would normally see in a casino addict that cant help but make the next bets, as they drink more koolaid.

Look at what Moody's is using for a model: The equilibrium price of external risk can be described by backward stochastic differential equations (BSDE) with non-Lipschitz generators. In joint work with A. Popier (Ecole Polytechnique, Palaiseau) we investigate a new concept of solutions for BSDE of this type, which we call measure solutions and which corresponds to theconcept of risk-neutral measures in arbitrage theory...

These types of bifurcations and perturbations rely on feedback systems with degrees of freedom or choices within the model, and in this case of economic meltdown, the collective group of financial engineers screwed up the model and the small failures of the past are simply compounding at a faster rate than they can be fixed; this is why Playstations lock up on some kids!

Mom will just have to shut down computer and send the kids back to school for a few years and look for better toys next time!

Is Buffett being cut too much slack by Fitch?

CHICAGO, Dec 14, 2007
The company's ratio of debt-to-capital excluding its $33 billion goodwill asset was moderately higher at 28%. However, Fitch believes that BRK's excellent acquisition track record largely offsets concerns about tangible capital quality. Fitch also notes that BRK had $39 billion of cash and equivalents at Sept. 30, 2007 and that the company's cash and equivalents averaged $36 billion between year-end 2002 and year-end 2006.
BRK's recent operating performance has been strong reflecting favorable results from the company's insurance operations and to a lesser extent, its manufacturing services, and retailing operations. Consolidated operating earnings-based interest coverage has been strong at 8.9 times (x) through the first nine months of 2007 and averaging 11.6x from 2002 through 2006.

$33 Billion of (goodwill) is not deductible

Interesting that BRK goodwill is open to suggestion, i.e, this is from BRKs report last year, which makes one wonder about the added goodwill: Berkshire's Consolidated Balance Sheet as of June 30, 2006 includes goodwill
of acquired businesses of approximately $29.9 billion. Such amount includes
$5.5 billion of goodwill related to MidAmerican. A significant amount of
judgment is required in performing goodwill impairment tests. Such tests include
periodically estimating and reviewing the fair value of Berkshire's reporting
units. There are several methods of estimating a reporting unit's fair value,
including market quotations, asset and liability fair values and other valuation
techniques, such as discounted projected future net earnings and multiples of
earnings. If the carrying amount of a reporting unit, including goodwill,
exceeds the estimated fair value, then individual assets, including identifiable
intangible assets, and liabilities of the reporting unit are estimated at fair
value. The excess of the estimated fair value of the reporting unit over the
estimated fair value of net assets would establish the implied value of
goodwill. The excess of the recorded amount of goodwill over the implied value
is then charged to earnings as an impairment loss.

Berkshire's Consolidated Balance Sheet as of June 30, 2006 includes goodwill of acquired businesses of approximately $29.9 billion.

**** The company's ratio of debt-to-capital excluding its $33 billion goodwill asset was moderately higher at 28%. However, Fitch believes that BRK's excellent acquisition track record largely offsets concerns about tangible capital quality. Fitch also notes that BRK had $39 billion of cash and equivalents at Sept. 30, 2007 and that the company's cash and equivalents averaged $36 billion between year-end 2002 and year-end 2006.

Does this mean Warren is increasing EPS by adding goodwill? Funny that Fitch thinks thats a good thing!

errrr.... would you prefer they named her 'Moon Unit Hilton' ?

Frank Zappa looked weird on the outside, but he was very normal inside. One of the most conservative men in rock.

That was his way of mocking the pretensions of society.