Probably. That sounds like they dont know, or dont want to know. Which means, they DIDNT. What a total sham this all is. I say, lift the curtain. Get the pain over with.
Wait... so you mean basing an eCONomy upon piling mountains of debt higher and higher, collecting fees for the debt, and producing nothing doesn't work? Well, golly gee - who'd have thunk it!? Dur!
Morons... Good thing the American taxpayer is on standby to bail out the pigs!
If there are restatements to the negative, all the executive bonuses will be rescinded. So, we should watch for every possible sales pitch from management of all the subject banks that "the current state is a recent market change; that the mortgage based investments were sound and valued properly for all reporting periods and that recent, unforeseeable events have shifted investor sentiment, yada yada...."
"Nevada's economy should be so strong by 2009 that a housing shortage may be the big concern rather than the current mortgage crisis and heavy surplus of homes for sale, an economist told lawmakers."
It worked for all of them. They got the bonuses yesterday, we'll foot the bill for their bonuses today and tomorrow. It is called hiding behind the corporate veil, only individuals hide there along with the companies that protect them, except that the 1995 Private Litigation Reform Act turned that veil into more of a iron wall. Don't expect any lawsuits of any significance. You don't even get to depose anymore -- you have to file with fact in hand without any access to deposition and you have to fight your way past the safe harbor clauses.
No comments on this board about Iran, maybe because it seems so off-topic, but I don't think so. Here's my take.
Bush-Cheney have made commitments (which they've confirmed) to various parties including Israel. Israel's bombing of Syria was part of a bigger plan.
But now they are too overwhelmed by domestic economic issues at home, including housing, credit, oil, etc. There's no way they can attack Iran or even keep up diplomatic pressure. They can't risk POing Iran and having the Ayatollah force their hands.
So, they punted in this way that is typical manipulation and back-door spin for them. But you will hear less and less from them about Iran from now on.
To me, Iran report (released now) is a white flag Bush is waving to the rest of the world. I think the next one will have to be big pullbacks in Iraq. The Administration is starting to take this economic mess seriously because it threatens to bring down Republicans for a generation and of course what's left of Bush's legacy.
Moody's cuts 59 Bear Stearns subprime securities
NEW YORK, Dec 4 (Reuters) - Moody's Investors Service concluded its review of $11.7 billion of residential mortgage-backed securities supported by Alt-A loans from 2005 and 2006 by slashing $5.4 billion in ratings and warning it may cut the balance of deals left under review.
[snip]
Moody's wraps up Alt-A review, ups loss estimates
NEW YORK, Dec 4 (Reuters) - Moody's Investors Service concluded its review of $11.7 billion of residential mortgage-backed securities supported by Alt-A loans from 2005 and 2006 by slashing $5.4 billion in ratings and warning it may cut the balance of deals left under review.
Why do you think GS will be suprised in sub-prime?
They have been telling eveyone for about a year that they were negative on the mortgage market. Now, they may be suprised elsewhere but, as to mortgages, they've been pretty clear on that point.
Methinks Gerry, bowing to decorum in face of the troubles of the competition, understates matters when he says "on balance".
GS earned 37.5% on its tangible equity during the first nine months of the fiscal year, and a mere 36.6% for the three months ended in August, when the credit markets cratered. For total dollar enthusiasts, because you "can't eat ROE," that works out to $8.24bn of net income for the nine months and $2.8bn for the three months.
The analysts, no doubt enlightened with rule FD friendly guidance, are boldy predicting another $2.7bn or so of net income for the fourth quarter, which ended in November. We'll see.
I just watched Abbey Joseph Cohen on CNBC prattle on about S&P 500 earnings growth and price targets. Its really enlightening to go back and re-read her prognostications during the dot-com boom. Same with Kudlow. As I said earlier, ten year treasuries have outperformed the S&P 500 over the past decade. How is it that these people stay employed? Also, if there is to be any bailout, including rate cuts, the American tax payer is entitled to "free market" terms just like Dubai investors got from CITI. If Libor is high, so be it. The Fed has been throwing life lines to the markets long enough and they still can't outperform the long bond. Enough is enough.
If the GS and DB statements are to be taken at face value, I suppose the analogy here would be: If you're going to sell drugs, be sure you don't take them yourself (C).
I really dont think the economic troubles are that big a deal for either party in the long run. Certainly short term, we may here of many "remedies" and such from both sides of the aisle. Beyond that?
Probably. Ha. So much for computers, precision, information, analysis and real-time management. Like the accountant used to say at a roadbuilding company I once worked for when asked if a particular job had made money: "Hey, it's all one big watermelon".
I really dont think the economic troubles are that big a deal for either party in the long run. [Napolean]
I disagree. We've been on the "ownership economy" track for 27 years and it's collapsing. 401k's, health savings accounts, globalization, no regulation, etc. This has gone as far as it can go. It's 1932 all over again...
GS has the survivial instinct to know that you don't tell congresscritters whose voters are pissed off about potentially losing their homes, that you made out like a bandit because you figured that they would lose their homes.
I'm guessing the geniuses at Citigroup aren't giving back their bonuses. The bonuses are important in retaining the continuing services of said geniuses so they can lose even more money. As we all know there is heavy competetion in the financial world for people who can lose the most money the quickest.
We've been on the "ownership economy" track for 27 years and ... This has gone as far as it can go. -Detriot Dan
I'm as big a bear today as anyone but if the alternative to the "ownership society" is the "Don't own society" its hard to see how that would work without becoming a fully socialist society.
If you really think socialism works better, over time, fine. History isn't kind to people who don't want to take full responsibility for themselves much less governments that "promise" to "take care of" people.
And if you don't want to "own" or be responsible for something what makes you think someone else wants the job or will do it for you?
jag, Just sayin' that there's a role for government that's a lot bigger than we've tried for the last couple decades. There is already a big political backlash as we see what happens when the government abdicates its responsibility to regulate business, provide a safety net, etc. It's not pretty...
"To me, Iran report (released now) is a white flag Bush is waving to the rest of the world. I think the next one will have to be big pullbacks in Iraq. The Administration is starting to take this economic mess seriously because it threatens to bring down Republicans for a generation and of course what's left of Bush's legacy.
"
I have a different take on it. This reveals the cracks in the facade of our decider n chiefs' neocon fantasy policy. Any attack on Iran would likely lead to retaliation on our ships in the Indian ocean (and mean wider war, but loss of navy personnel). I expect the armed forces have gotten tired of the fiasco in Iraq and have no desire, esp. the relatively unscathed navy and air force, to get dragged into a larger problem in Iran.
The release of this material is as well timed as the yellow cake uranium reports were in 2002. Someone in the admin does NOT want this to happen and made an excellent play to make sure an attack on Iran is much less likely to happen.
Did you see how angry Bush looked in some photos from his press conference today?
Hey do you think they all have learned anything? You must be joking. Of course not. Did the US learn anything from Vietnam? You must be joking. Of course not. Etc., etc., etc. When the President prides himself on never having learned anything (his very words)while at university, of course learning is worthless. Greed good. Knowledge worthless.
How is it that these people stay employed? (Flabby and Krudlow)
Well they are simply entertainment, not to be taken seriously. Only morons and idiots take them seriously and the blame thus falls on them. US TV is knowledge-adverse. Watch and believe at your own peril.
Gerald Corrigan, the managing director in charge of risk management at Goldman Sachs Group Inc., said that his bank had fared better than Citi.
On balance, we probably made money,'' Corrigan told lawmakers.We have had a measure of success in hedging some of our exposure.''
You know, the Democrats control Congress, and are likely to get the presidency in 2009. If I was working on Wall Street, I might not want to brag about how my firm made money giving mortgages to people who couldn't afford them, sold the debt to, among others, state pension funds and municipal pools, and then made money again shorting the debt on the way down....
You've got to love accrual accounting systems don't ya? "Our losses exceeded our profits". Hmmmm the truth is there never were any profits...just 'projected' profits with assumed 'loss provisions'.
But this way of looking at things is not convenient for those whose bonuses are determined then the deal is booked and the fanciful projections are made.....
If Congress really wanted to teach a lesson in Corporate Governance, they would demand that bonuses banked on flawed deals be returned to the Company. Of course that would never withstand legal challenges...but it nice to think about....
"I have a different take on it. This reveals the cracks in the facade of our decider n chiefs' neocon fantasy policy. Any attack on Iran would likely lead to retaliation on our ships in the Indian ocean (and mean wider war, but loss of navy personnel). I expect the armed forces have gotten tired of the fiasco in Iraq and have no desire, esp. the relatively unscathed navy and air force, to get dragged into a larger problem in Iran"
Yeah....I am sure some Navy officers are more than a little concerned that the Iranians may paid more than a little attention to VanRiper's success in the Millenium Challenge War Games about 5 years ago. Recall that VonRiper's Red Team sank about 16 US ships in the first day of the war game. By the 3rd day, JFCOM magically unsank the ships, whipped VanRiper, and called the WarGame a success.
There is a great chapter on it in 'Blink' by Malcolm Gladwell on this.
Although perhaps the original subject of this thread is now passe, this is something I've been thinking about.
Were Citi's losses more than GS / DB's simply because they securitized a higher dollar amount of subprime loans into bonds.. or because their loans were fundamentally less sound to begin with for some reason?
eg, were GS and DB dealing with a "better" on average packet of loans?
There is blood in the streets now and everyone is saying never again. But looking ahead 5,7 maybe 10 years from now, the economy will be rosey again and some genius will come out with a new way to do sub-prime risk free. There will be some new twist and it will seem diferent this time and the whole cycle will start again.
We never learn.
"I expect the armed forces have gotten tired of the fiasco in Iraq and have no desire, esp. the relatively unscathed navy and air force, to get dragged into a larger problem in Iran.
The release of this material is as well timed as the yellow cake uranium reports were in 2002. Someone in the admin does NOT want this to happen and made an excellent play to make sure an attack on Iran is much less likely to happen. "
Things are too weird to take at face value. I agree with your general point that the military and intelligence community aren't going to provide any cover for Bush.
The only thing in Bush's playbook is to double down with other peoples lives and money. It's like a broke gambler tossing his last chip on a high odds proposition on the way out of the casino, just because.
I actually hope it's true.
The single weakest argument is that the sanctions were effective. How could they possibly be effective if Iran didn't even bother to announce their compliance.
In my opinion the military was gung ho on Vietnam, in spite of the revisionist view implicit in the Powell Doctorine. However if we are now depending on the military as a check on executive branch overreaching, then we have problems.
"Were Citi's losses more than GS / DB's simply because they securitized a higher dollar amount of subprime loans into bonds.. or because their loans were fundamentally less sound to begin with for some reason?"
Citi believed its own rhetoric. They kept a lot of super senior AAA tranch stuff. GS were just front running their own clients.
"Citigroup, the leading issuer in the $400 billion SIV market, should have realized that it was earning very little, while risking its reputation and exposing itself to potential financial losses. Citigroup may have netted just $150 million annually from its SIVs, a rounding error for a bank with $30 billion of pretax profits last year."
"If you count the bonuses taken home, we made out like bandits. . ."
``On balance, we probably made money,'' Corrigan told lawmakers
IMO by next year same time GS will be "surprised".
I notice they're all talking in the past tense.
(See my comment on the previous thread re ACA Capital.)
Probably. That sounds like they dont know, or dont want to know. Which means, they DIDNT. What a total sham this all is. I say, lift the curtain. Get the pain over with.
In the accounting world, we make the distinction between pre-tax and post-tax.
For GS and DB, they need to make the distinction between pre-lawsuit and post-lawsuit.
Those braggarts will be paying big bucks to pension funds, et al., post-lawsuit.
Breaks my heart.
One thing we know:
Profits have stopped coming in,
but the losses haven't stopped going out yet.
"take out the probably. It makes me sound wishy-washy"
Dr. Hfuhruhurr
Wait... so you mean basing an eCONomy upon piling mountains of debt higher and higher, collecting fees for the debt, and producing nothing doesn't work? Well, golly gee - who'd have thunk it!? Dur!
Morons... Good thing the American taxpayer is on standby to bail out the pigs!
" `Suspect' Debt " : Florida Pension Fund Has `Suspect' Debt Held by Pool (Update2) - Bloomberg.com
If there are restatements to the negative, all the executive bonuses will be rescinded. So, we should watch for every possible sales pitch from management of all the subject banks that "the current state is a recent market change; that the mortgage based investments were sound and valued properly for all reporting periods and that recent, unforeseeable events have shifted investor sentiment, yada yada...."
Deutsche Bank probably made more money from marketing CDOs than it lost, said Charles Aldington, chairman of its London unit.
Yes, and don't forget, they got to 'own' Cleveland in deal, too!
Meanwhile, for a real laugh, see Nevada Mortgage Crisis Rebound Predicted :
"Nevada's economy should be so strong by 2009 that a housing shortage may be the big concern rather than the current mortgage crisis and heavy surplus of homes for sale, an economist told lawmakers."
What is that guy smoking?
It worked for all of them. They got the bonuses yesterday, we'll foot the bill for their bonuses today and tomorrow. It is called hiding behind the corporate veil, only individuals hide there along with the companies that protect them, except that the 1995 Private Litigation Reform Act turned that veil into more of a iron wall. Don't expect any lawsuits of any significance. You don't even get to depose anymore -- you have to file with fact in hand without any access to deposition and you have to fight your way past the safe harbor clauses.
OT
No comments on this board about Iran, maybe because it seems so off-topic, but I don't think so. Here's my take.
Bush-Cheney have made commitments (which they've confirmed) to various parties including Israel. Israel's bombing of Syria was part of a bigger plan.
But now they are too overwhelmed by domestic economic issues at home, including housing, credit, oil, etc. There's no way they can attack Iran or even keep up diplomatic pressure. They can't risk POing Iran and having the Ayatollah force their hands.
So, they punted in this way that is typical manipulation and back-door spin for them. But you will hear less and less from them about Iran from now on.
To me, Iran report (released now) is a white flag Bush is waving to the rest of the world. I think the next one will have to be big pullbacks in Iraq. The Administration is starting to take this economic mess seriously because it threatens to bring down Republicans for a generation and of course what's left of Bush's legacy.
Moody's Dec 4 rating roundup
Moody's cuts 59 Bear Stearns subprime securities
NEW YORK, Dec 4 (Reuters) - Moody's Investors Service concluded its review of $11.7 billion of residential mortgage-backed securities supported by Alt-A loans from 2005 and 2006 by slashing $5.4 billion in ratings and warning it may cut the balance of deals left under review.
[snip]
Moody's wraps up Alt-A review, ups loss estimates
NEW YORK, Dec 4 (Reuters) - Moody's Investors Service concluded its review of $11.7 billion of residential mortgage-backed securities supported by Alt-A loans from 2005 and 2006 by slashing $5.4 billion in ratings and warning it may cut the balance of deals left under review.
[snip]
Why do you think GS will be suprised in sub-prime?
They have been telling eveyone for about a year that they were negative on the mortgage market. Now, they may be suprised elsewhere but, as to mortgages, they've been pretty clear on that point.
Methinks Gerry, bowing to decorum in face of the troubles of the competition, understates matters when he says "on balance".
GS earned 37.5% on its tangible equity during the first nine months of the fiscal year, and a mere 36.6% for the three months ended in August, when the credit markets cratered. For total dollar enthusiasts, because you "can't eat ROE," that works out to $8.24bn of net income for the nine months and $2.8bn for the three months.
The analysts, no doubt enlightened with rule FD friendly guidance, are boldy predicting another $2.7bn or so of net income for the fourth quarter, which ended in November. We'll see.
I just watched Abbey Joseph Cohen on CNBC prattle on about S&P 500 earnings growth and price targets. Its really enlightening to go back and re-read her prognostications during the dot-com boom. Same with Kudlow. As I said earlier, ten year treasuries have outperformed the S&P 500 over the past decade. How is it that these people stay employed? Also, if there is to be any bailout, including rate cuts, the American tax payer is entitled to "free market" terms just like Dubai investors got from CITI. If Libor is high, so be it. The Fed has been throwing life lines to the markets long enough and they still can't outperform the long bond. Enough is enough.
If the GS and DB statements are to be taken at face value, I suppose the analogy here would be: If you're going to sell drugs, be sure you don't take them yourself (C).
Rich, you got all that from one NIE report?
I really dont think the economic troubles are that big a deal for either party in the long run. Certainly short term, we may here of many "remedies" and such from both sides of the aisle. Beyond that?
Probably. Ha. So much for computers, precision, information, analysis and real-time management. Like the accountant used to say at a roadbuilding company I once worked for when asked if a particular job had made money: "Hey, it's all one big watermelon".
Fannie Mae is cutting dividend by 30% per CNBC. Down 5% + in after hours. CR & TANTA kudos for shining the light. Sunshine is the best disinfectant
I really dont think the economic troubles are that big a deal for either party in the long run. [Napolean]
I disagree. We've been on the "ownership economy" track for 27 years and it's collapsing. 401k's, health savings accounts, globalization, no regulation, etc. This has gone as far as it can go. It's 1932 all over again...
GS has the survivial instinct to know that you don't tell congresscritters whose voters are pissed off about potentially losing their homes, that you made out like a bandit because you figured that they would lose their homes.
I'm guessing the geniuses at Citigroup aren't giving back their bonuses. The bonuses are important in retaining the continuing services of said geniuses so they can lose even more money. As we all know there is heavy competetion in the financial world for people who can lose the most money the quickest.
We've been on the "ownership economy" track for 27 years and ... This has gone as far as it can go. -Detriot Dan
Then lets jump on another track or catch a ride on another train.
I agree it may be "1932 all over again" for places like Detriot, but certainly not the entire country.
As we all know there is heavy competetion in the financial world for people who can lose the most money the quickest.
No, it's to see who can lose the most money the quickest and then hide it the longest.
The problem is that it's supposed to be other people's money . . .
At least Detroit is full of good fresh water. That could be the next oil in terms of monetary value...
We've been on the "ownership economy" track for 27 years and ... This has gone as far as it can go. -Detriot Dan
I'm as big a bear today as anyone but if the alternative to the "ownership society" is the "Don't own society" its hard to see how that would work without becoming a fully socialist society.
If you really think socialism works better, over time, fine. History isn't kind to people who don't want to take full responsibility for themselves much less governments that "promise" to "take care of" people.
And if you don't want to "own" or be responsible for something what makes you think someone else wants the job or will do it for you?
Yes, OT.... but if we must...
Rich, I also am amazed at the "about face" statement which came out concerning Iran. New direction due to storm conditions brewing? We will see.
jag, Just sayin' that there's a role for government that's a lot bigger than we've tried for the last couple decades. There is already a big political backlash as we see what happens when the government abdicates its responsibility to regulate business, provide a safety net, etc. It's not pretty...
At least Detroit is full of good fresh water. That could be the next oil in terms of monetary value... -Detriot Dan
Looks like we've got ourselves a new train to catch!
All aboard the water train?
"To me, Iran report (released now) is a white flag Bush is waving to the rest of the world. I think the next one will have to be big pullbacks in Iraq. The Administration is starting to take this economic mess seriously because it threatens to bring down Republicans for a generation and of course what's left of Bush's legacy.
"
I have a different take on it. This reveals the cracks in the facade of our decider n chiefs' neocon fantasy policy. Any attack on Iran would likely lead to retaliation on our ships in the Indian ocean (and mean wider war, but loss of navy personnel). I expect the armed forces have gotten tired of the fiasco in Iraq and have no desire, esp. the relatively unscathed navy and air force, to get dragged into a larger problem in Iran.
The release of this material is as well timed as the yellow cake uranium reports were in 2002. Someone in the admin does NOT want this to happen and made an excellent play to make sure an attack on Iran is much less likely to happen.
Did you see how angry Bush looked in some photos from his press conference today?
peterpaul, to truly appreciate it, you have to watch the video . . . like a child who's been told "no" to his candy bar request.
"President Pissypants"
Hey do you think they all have learned anything? You must be joking. Of course not. Did the US learn anything from Vietnam? You must be joking. Of course not. Etc., etc., etc. When the President prides himself on never having learned anything (his very words)while at university, of course learning is worthless. Greed good. Knowledge worthless.
How is it that these people stay employed? (Flabby and Krudlow)
Well they are simply entertainment, not to be taken seriously. Only morons and idiots take them seriously and the blame thus falls on them. US TV is knowledge-adverse. Watch and believe at your own peril.
Gerald Corrigan, the managing director in charge of risk management at Goldman Sachs Group Inc., said that his bank had fared better than Citi.
On balance, we probably made money,'' Corrigan told lawmakers.We have had a measure of success in hedging some of our exposure.''
You know, the Democrats control Congress, and are likely to get the presidency in 2009. If I was working on Wall Street, I might not want to brag about how my firm made money giving mortgages to people who couldn't afford them, sold the debt to, among others, state pension funds and municipal pools, and then made money again shorting the debt on the way down....
You've got to love accrual accounting systems don't ya? "Our losses exceeded our profits". Hmmmm the truth is there never were any profits...just 'projected' profits with assumed 'loss provisions'.
But this way of looking at things is not convenient for those whose bonuses are determined then the deal is booked and the fanciful projections are made.....
If Congress really wanted to teach a lesson in Corporate Governance, they would demand that bonuses banked on flawed deals be returned to the Company. Of course that would never withstand legal challenges...but it nice to think about....
"I have a different take on it. This reveals the cracks in the facade of our decider n chiefs' neocon fantasy policy. Any attack on Iran would likely lead to retaliation on our ships in the Indian ocean (and mean wider war, but loss of navy personnel). I expect the armed forces have gotten tired of the fiasco in Iraq and have no desire, esp. the relatively unscathed navy and air force, to get dragged into a larger problem in Iran"
Yeah....I am sure some Navy officers are more than a little concerned that the Iranians may paid more than a little attention to VanRiper's success in the Millenium Challenge War Games about 5 years ago. Recall that VonRiper's Red Team sank about 16 US ships in the first day of the war game. By the 3rd day, JFCOM magically unsank the ships, whipped VanRiper, and called the WarGame a success.
There is a great chapter on it in 'Blink' by Malcolm Gladwell on this.
Although perhaps the original subject of this thread is now passe, this is something I've been thinking about.
Were Citi's losses more than GS / DB's simply because they securitized a higher dollar amount of subprime loans into bonds.. or because their loans were fundamentally less sound to begin with for some reason?
eg, were GS and DB dealing with a "better" on average packet of loans?
There was a deal made with either Iran and/or Iraq. Casualties started dropping faster than the ABX index three months ago.
I doubt the administration went into it willingly, so there must have been some pressure somewhere.
There is blood in the streets now and everyone is saying never again. But looking ahead 5,7 maybe 10 years from now, the economy will be rosey again and some genius will come out with a new way to do sub-prime risk free. There will be some new twist and it will seem diferent this time and the whole cycle will start again.
We never learn.
There was a deal made with either Iran and/or Iraq. Casualties started dropping faster than the ABX index three months ago.
I doubt the administration went into it willingly, so there must have been some pressure somewhere.
Off Topic | 12.04.07 - 8:09 pm | #
Somehow 'Quid Pro Quo' and 'Iran' always seem to go hand in hand, yes/no?
Got F16's. There's your quid pro quo.
"I expect the armed forces have gotten tired of the fiasco in Iraq and have no desire, esp. the relatively unscathed navy and air force, to get dragged into a larger problem in Iran.
The release of this material is as well timed as the yellow cake uranium reports were in 2002. Someone in the admin does NOT want this to happen and made an excellent play to make sure an attack on Iran is much less likely to happen. "
Things are too weird to take at face value. I agree with your general point that the military and intelligence community aren't going to provide any cover for Bush.
The only thing in Bush's playbook is to double down with other peoples lives and money. It's like a broke gambler tossing his last chip on a high odds proposition on the way out of the casino, just because.
I actually hope it's true.
The single weakest argument is that the sanctions were effective. How could they possibly be effective if Iran didn't even bother to announce their compliance.
In my opinion the military was gung ho on Vietnam, in spite of the revisionist view implicit in the Powell Doctorine. However if we are now depending on the military as a check on executive branch overreaching, then we have problems.
"Were Citi's losses more than GS / DB's simply because they securitized a higher dollar amount of subprime loans into bonds.. or because their loans were fundamentally less sound to begin with for some reason?"
Citi believed its own rhetoric. They kept a lot of super senior AAA tranch stuff. GS were just front running their own clients.
"Citigroup, the leading issuer in the $400 billion SIV market, should have realized that it was earning very little, while risking its reputation and exposing itself to potential financial losses. Citigroup may have netted just $150 million annually from its SIVs, a rounding error for a bank with $30 billion of pretax profits last year."
From Barrons
Of Citi and SIVs: Can Banks Plug the Leak? - Barrons.com
This supports the notion that they absolutely believed their own rhetoric.
What's even worse is that every time citi mentioned the SIV superfund, their stock went down 5%.