Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 43 members and 203 guests online.
Currently online
- Cinco-X
- ResistanceIsFeudal
- traderwalt
- Duke of Con Dao
- shill
- Speed
- 1 currency now -yogi
- burnside
- MikeCLT
- Former Idealist
- sum luk
- curious
- volker the viking
- Cobradriver
- Whiskey
- energyecon
- wafdof
- Whiskey
- Mert717
- Gatsby
- Lurking Lawyer
- Pearl
- NGBROI
- dilbert dogbert
- Mook
- Matty
- SPOOL
- Tool of the Fed
- gruntled
- poic
- Lobbyist Ben Dover
- greenchutes
- Mr Slippery
- Eric
- Tom in AZ
- Govt. Cheese
- Dr. Funkenstein
- Blue Guy Red State
- yuan
- Firemane
- Mary
- Bob Dobbs
- JP
So it begins...
Did you also see this:
Citigroup Stops Withdrawals from Hedge Fund: WSJ
Citigroup Hedge Fund Withdrawal - CNBC
The University of Michigan Sentiment survey dropped to 69.6, lower than the expected reading of 78.00. The survery was released a few minutes prior to its expected 10:00 ET release.
This seems like the most reasonable approach. The muni industry isn't really deeply tied to the subprime mess other than by the bond insurers. Separating the two brings in other challenges but is the most sound approach to finding a workable solution.
OT
From the above article about Citigroup:
Meanwhile, Falcon Plus Strategies, launched Sept. 30, lost 52 percent in the fourth quarter, after betting on mortgage-backed and preferred securities and making trades based on the relative values of municipal bonds and U.S. Treasuries. Some collateralized debt obligations in the fund trade at 25 percent of their original worth, the newspaper said.
Both funds are run in Citigroup's alternative investments unit. That unit was briefly headed last year by Vikram Pandit, who in December replaced Charles Prince as Citigroup's chief executive. Old Lane Partners, a hedge fund that Pandit founded and sold to Citigroup last year, has also had weak performance, falling 1.8 percent in January, the newspaper said.
So this is the guy that is supposed to correct Citigroup's past mistakes?
I haven't felt this sad since Roseanne Barr and Tom Arnold split up.
Basically they're taking Buffet's approach and separating the good from the bad themselves. What a novel idea.
Vikrim-
Aren't they tied together? The muni's invested city money in MBS so their ability to repay the debt will diminish. Does that logic work?
It's fascinating to see how this Greater Crash, and subsequent Greater Depression, come on in slow motion - like a tide rather than a tsunami.
Baby Bells!
Looks like the guys that run FGIC probably attended the vaunted....
Millionaire University
Quick, the Starbeast is coming! All you MBS and SF instruments and such get on the Golgafrincham Ark Ship B. We municipal bond insurers will follow shortly in the other ship.
"Baby Bells!"
More like piglets.
Not the final nail, but the hammering continues. With a Buffett bid for the muni business, and one of the monolines formally requesting to be split up to separate the wheat from the chaff, how much longer can MBI and ABK hold out? I'm guessing the bailout talk is going to reach fever pitch next week....
That's how you have your cake and eat it.
How long before Citi `requests' to be split up?
So what can we expect from the non-muni arm?
Sale? Bailout? Default? Worse?
I still don't understand how this works. Surely those wrapping contracts had covenants requiring no change in control or divestment of assets, right?
How do they propose to do this without starting a firestorm of litigation?
The blackstone masters of the universe have blown up another company and to add insult to injury they are now asking a government official to come to the rescue. Be very wary of who gets stuck with the liabilities of the ugly twin. BX hit a 52 week low yesterday and I don't think the Chinese are very happy about that either. No wonder the bond market has imploded. Sheesh
Won't holders of non muni bonds have a standing to sue if their insurance fails to pay off?
That is a good question. If they split, won't both companies be liable for the insuracne written previously?
The only silver lining I see to all of this is that it looks like all the dirty laundry is coming out within a relatively short time. Was in Japan during the collapse of the Bubble there and part of the reason the mess dragged on so long was that everyone was playing musical chairs with the bad debts....
So yeah, it's a painful drop, and will probably be painful for another year or two, but I bet we'll recover in less than 20 years.
US Consumer Confidence at 16 year low:
Information for Ireland or abroad, travel, entertainment listings, sports news, games, puzzles, recipes, TV listings and more - Ireland.com
I guess Spitzer wasn't blowin smoke!
f**** housing...
WHEAT
INO Futures and Commodities - Grains and Oilseeds - HARD RED SPRING WHEAT Mar 2010 (E) (MGEX:MWE.H10.E) Price Chart and Quote
OT -- foreigners are slowing their buying of our T-paper:
http://www.treas.gov/tic/tressect.txt
Japan and the sheikhs (UK is where they bank) are net sellers:
http://www.treas.gov/tic/mfh.txt
About time that they woke up.
There's a general issue of a company with an unpleasant potential liability trying to create a separate entity and pass the liability onto it. I think this tactic was used by asbestos and tobacco companies. Can somebody who understands this better than me explain the rules for this situation?
Separting the siamese twins with a chainsaw.
Won't happen without lots of blood.
Possibly not enough innards to guarantee the srvival of even one.
Might result in the death of both.
I love the chutzpah. Management runs the company into the ground, but now wants to split it into two, with management of course all climbing aboard the good half, and letting the low-lifes manage the other part.
Banks at Risk From [Additional] $203 Billion Writedowns, Says UBS
Banks at Risk of $203 Billion in Writedowns, Says UBS (Update4) - Bloomberg.com
. . . a further $120 billion for CDOs, $50 billion for structured investment vehicles, $18 billion for commercial mortgage-backed securities and $15 billion for leveraged buyouts, . . .
I guess that leaves zero for muni bonds.
Well, given that the depository banks have had to borrow $60B to maintain their required reserve of $40B, when will the first run begin?
National Economic Update, February 2008 - Economic Research Publications - FRB Dallas
from Dallas Fed Report: single-family housing permits fell 8.8 percent in December (Chart 7)
I gather our stuff is so rotten even the dupes from abroad (SWFs) can smell it and won't touch it. I haven't heard of a "capital infusion" from abroad now for several weeks.
Buried in the import price report:
Non-fuel prices rose .6%
China imports rose .8%
The chart on China import price inflation is downright scary. The last time the Fed was cutting rates our Chinese imports were declining in price. Now they are surging. Of course Bernanke thinks import inflation affects only a sliver of our economy. We'll find out if this is true next week when we get the CPI.
Separting the siamese twins with a chainsaw. Ugly - I'm guessing Uncle Joe and Aunt Milly will get stuck with the corpse.
Bond insurers in trouble? That calls for a cartoon.
And now the FED seems to have run out of ammunition but the Indians just keep coming.
Pushing on a string - Paul Krugman Blog - NYTimes.com
On what basis would assets be split?
Exposure? Past earnings? Future earnings?
With inadequate reserves to cover CDO losses now, the split would immediately collapse the CDO market.
And, has anyone run the numbers on possible municpal defaults in this fine new world we are in?
Just like other "fiancial innovations", the municipal bonds are not your father's bonds. Historical performance may be hysterically wrong.
Has anyone else pointed out the latest
Fed H3 on bank reserves.. from alarm to horror.
FRB: H.3 Release--Aggregate Reserves of Depository Institutions--December 3, 2009
Let's just get somethin straight...
the CDS guys were born and bread on the bank's balance sheet, were spawned off into the oceans, learned there craft, and now want to feed on the rotting corpse of there host's.
is there another animal on this planet that is so perverse?
this is more posturing from spitzer:
one other thing is worth mentioning.
the more a regulator screams in public about how he's going to force a company to do something to "fix" the problem, the less leverage he or she really has.
strong regulators with the statutory authority to intervene before problems get out of hand do not hold press conferences or march up to capitol hill to testify about all the things they are doing to protect the public.
they simply act behind the scenes to engineer an outcome that protects their interests (which is primarily avoiding the tarnishing of their own reputation).
this is why CFC, FMT and other distressed financials are often sold suddenly, without much warning.
contrast that with the way that OFHEO operates. OFHEO is a very weak regulator, which is why falcon, blumenthal & lockhart resorted to such idiotic behavior during the glory days of the GSE regulatory reform debate. OFHEO had to incite public outrage if it was to have any chance of changing the behavior of its regulatees. it's policy tools were too limited.
the fact that dinallo and spitzer are putting on such a show suggests to me that their options are limited right now.
Baby Bells!
Wow. For an English major you've been spot on with your economic forecasts. I recall you were saying Baby Bells and MI problems for most of last year.
Must be that superior understanding of human nature encouraged by reading literature outside the non-fiction arena coupled with a deadly powerful intellect,...or a lucky guess.
On what basis would assets be split?
On the basis of accrued suck.
anon, you are either an ignorant douche, or a lying sack of crap.
The Superintendent of Insurance is appointed by the Governor of the State of New York.
Everyone, please take the rest of what this jackass has to say with the requisite 4 ton grain of salt.
About Us
The page cannot be found
Rob Dawg;
hehehe - great comment! Do you suppose they have cellphone sanitizers on the ark?
The only silver lining I see to all of this is that it looks like all
the dirty laundry is coming out within a relatively short time.
Keep in mind that more trousers are being soiled daily.
With inadequate reserves to cover CDO losses now, the split would immediately collapse the CDO market.
True, but the CDOs are doomed anyway. Better to put the women and children on the lifeboats than to sink the lifeboats by lashing them to the Titanic so it stays afloat a few more minutes.
what else can I say:
YouTube
- Breakin' Up Is Hard To Do - Neil Sedaka
The page cannot be found
Eric R. Dinallo was nominated by Governor Eliot Spitzer and confirmed by the New York State Senate on April 18, 2007 as the 39th Superintendent of the New York State Insurance Department.
Superintendent Dinallo joined the Department from Willis Group Holdings. Since 2006, he had been General Counsel for the company, the worlds third largest insurance broker. A member of the Partners Group, the companys global executive management committee, he was the primary legal advisor on value creation matters. His responsibilities included supervising General Counsels, Global Compliance and the Internal Audit Department, as well as implementing corporate strategies, policies and procedures to ensure the effective management of regulatory and litigation matters.
From 2003 to 2006, Superintendent Dinallo was the Managing Director, Global Head of Regulatory Affairs for Morgan Stanley. He designed and led top-to-bottom reviews of conflicts and business practices, achieving a major shift in the firm-wide regulatory strategy. At Morgan Stanley, Superintendent Dinallo chaired the Global Conflicts Committee and was the Managing Director on the Law Department Diversity Committee. He was also a member of the Franchise Committee and the Operational Risk Group.
Superintendent Dinallo served at the Office of Attorney General Eliot Spitzer from 1999 to 2003. As Chief of the Securities Bureau, he was charged with combining that bureau with the Real Estate Finance Bureau. The resulting Bureau was named the Investment Protection Bureau to reflect its focus, and Mr. Dinallo was named its first Chief. In that capacity, he led the reinvigorated Bureaus investigations into the Wall Street Cases conflicts of interest in the financial services industry, including research analyst cases and the spinning of hot initial public offerings. He produced more than 40 major civil and criminal matters, and led the Bureau through the beginning of the mutual fund industry investigations.
Jeremy writes:
Has anyone else pointed out the latest
Fed H3 on bank reserves.. from alarm to horror.
FRB: Federal Reserve Board: Error Page
Jeremy | 02.15.08 - 11:18 am | #
Has this EVER happened before? Obviously being in the hole for that much money, $60 billion, is a big deal. That is more than FDIC holds.
Jeremy, how long before they stop publishing THAT data series? It looks to my ignorant eyes like the banks are losing money as fast as the FED can lend it to them. What I want to know is what kind of collateral is the Fed accepting? At this point, bottlecaps and pocket lint look better than MBSs.
is there another animal on this planet that is so perverse?
to be consistent you should say "Is their another animal on....etc." LOL
Only if they split all their houses and cars and boats and bonuses in two, too.
How long would it take Moody's to downgrade the non-muni half? Or would it go bankrupt before they got around to it?
Remember that big marshmellowy thing that blows up toward the end of Ghostbusters?
Well on good authority I have it that Anon is the twin.And he knows his fate!