Go to FinancialSense.com
click on broadcast
click on 2nd hour guest expert
scroll down to the second part
and click on:
Special Interview
James Dines/Eric King
The Looming Economic Crisis
The first part is about hte stock market but then the news of what horror is to come just gets worse and worse... and this guy
has an excellent track record.
Starting to go parabolic. The credit card companies are starting to scale back available credit and increase interest rates to users based on this data.
I also thought this line was interesting: "..card borrowers are starting to pay back less of their outstanding balances each month."
from AAA do Junk in two months...and we still beleive in those rating agencys!!! Why do we need them if they Downgrade when the company is already dead?
We, the stupid publics of the world, are all paying for this outrageous lack of finger pointing. You and I pay every time we drive up to a gas pump. Commodities are rising for many reasons, one of which is the nationalization of this horrendous criminality...
oh, sorry, it's not criminal until someone in power says it is.
What's the latest on the Mark-it pricing? I think that was the name. The prices of the various MBS tranches that kept falling and falling. Has that stabilized, or even rebounded a bit?
I live on 50th and 3rd in Manhattan. CIFG is located on the corner of my block. They had this sign on the corner that used to read CIFG with the phrase AAA Guaranty below it. About two weeks before the original downgrade, they knocked the 'AAA Guarenty' from the sign. It was classic, I wish I had pictures. I guess this means more vacant office space in my neighborhood.
On another note, there seems to be quite a bit of midtown commercial space available now. About a year ago, any free window space would be gobbled up for a new bank branch, but this trend has reached saturation. There are spaces available in Grand Cetral and on Fifth Ave. I know that there is some lag time between a tenant leaving and space getting leased, but this just is bad. CBRE has been trying to lease the space in 200 Park Ave (which is connected to Grand Central) for at least 6 months now. Desperation should set in soon, as the brokers name gets tarnished by having prime space empty for so long.
"Bear writes:
from AAA do Junk in two months...and we still beleive in those rating agencys!!! Why do we need them if they Downgrade when the company is already dead?"
The job of the ratings agencies is to bayonet the dead.
In the days before the credit quants went hog wild, credit investors used to track 3 ratings for each credit: the investor's internal rating, the rating implied by market pricing (spreads), and the rating agency's ratings. The rating agency ratings had very little informational content; it tended to lag what the markets priced in already.
The only reason they are "needed" as they provided a independent benchmark of (roughly) how risky a company's debt is, which would determine eligibility for inclusion in portfolios. And to what extent retail investors buy corporate bonds, the rating provides some "due diligence" - which retail investors would almost certianly not do on their own.
So, Hoocoodanode and Whatstheodds walk into a bar. Hoocoodanode says, "Hey bartender, a shot of bullshit, please." Whatstheodds thinks for a second and says, "A gaussian on the rocks."
I wonder if the ratings agencies camping on their rating downgrades is figured into the quants' models? The only thing Brownian about this motion is the stench of bullshit in the air.
It wasn't the model; it was the permissive regulatory environment of the Bush Administration.
Reagan called government itself as the hindrance to capitalism. He kept the hand of regulatory guidance away from the S&L private sector thieves (as that's what all capitalists are when we cut to the chase); so they stole and they collapsed the tent on themselves by overextending outside of RE loans.
Bush, much stupider than Reagan, has done the same thing.
The outcome is completely expected. Whocoodanode is the joke word, not a reality.
AFAIK, there's not one person or entity who's calling the future accurately on the other side of this credit evaporation pond. CR is way too conservative, and has been for months. But folks like that; it serves up the whocoodanode-aid by the snifter instead of by the tanker-load.
What attracts me here is the hope that those with more vision will continue to attempt to see beyond, not the claptrap of NPR talking heads. We'll see.
Meanwhile, be long PM's, long commodities, and the pundits and lumpens take the hindmost, and the steaming RE bags. Much, much, much worse will befall the lenders and RE equity holders. It's back to 1994 prices, not 2002 prices. We gotta get real here and watch for tidal wave capitulation, not "oh we're gonna miss the buying oppty" that's the word on the street today.
Hoocoodanode?
I know this is OT but must share this.
Please listen to the following interview:
Go to FinancialSense.com
click on broadcast
click on 2nd hour guest expert
scroll down to the second part
and click on:
Special Interview
James Dines/Eric King
The Looming Economic Crisis
The first part is about hte stock market but then the news of what horror is to come just gets worse and worse... and this guy
has an excellent track record.
The last 15 minutes was hard to hear but so true.
"risk is to the downside..."
Any chance that this Icelandic downgrade becomes a trigger for a bigger and broader problem?
Iceland Credit Rating Cut to Aa1 From Aaa by Moody's (Update3) - Bloomberg.com
I hope so!
Check out the Credit Card default graphic in this WSJ article:
Threats Loom for Credit-Card Firms - WSJ.com
Starting to go parabolic. The credit card companies are starting to scale back available credit and increase interest rates to users based on this data.
I also thought this line was interesting: "..card borrowers are starting to pay back less of their outstanding balances each month."
Some interesting stats to follow.
DebtFree,
I heard this yesterday. Dines does have a good record. I never knew anyone could be more negative on Greenspan than Flec.
Hundred dollar silver is an interesting hope. I have a friend that still has some of Bunker Hunt's $40 silver in his backyard.
from AAA do Junk in two months...and we still beleive in those rating agencys!!! Why do we need them if they Downgrade when the company is already dead?
Yeah, I got some of the Hunt Bros. silver in my backyard too. It looks real burned though.
that was a fun last hour. they almost got a close on the days high's.
New meaning to the term 12 step program. When are MBIA and ABK going to go on the same wagon?
Aren't any of these revelations proof of criminality?
Are they all so naive and blemish free that there is no "intention" to be found anywhere?
Here "Intention"; come here boy.
Or is this not evidence of "reckless" behavior?
Reckless is criminal, too.
Absurdity taken to beyond, and climbing.
We, the stupid publics of the world, are all paying for this outrageous lack of finger pointing. You and I pay every time we drive up to a gas pump. Commodities are rising for many reasons, one of which is the nationalization of this horrendous criminality...
oh, sorry, it's not criminal until someone in power says it is.
Bullshit!
CR,
Could you please elaborate on what happened with its credit default swaps.
What's the latest on the Mark-it pricing? I think that was the name. The prices of the various MBS tranches that kept falling and falling. Has that stabilized, or even rebounded a bit?
I live on 50th and 3rd in Manhattan. CIFG is located on the corner of my block. They had this sign on the corner that used to read CIFG with the phrase AAA Guaranty below it. About two weeks before the original downgrade, they knocked the 'AAA Guarenty' from the sign. It was classic, I wish I had pictures. I guess this means more vacant office space in my neighborhood.
On another note, there seems to be quite a bit of midtown commercial space available now. About a year ago, any free window space would be gobbled up for a new bank branch, but this trend has reached saturation. There are spaces available in Grand Cetral and on Fifth Ave. I know that there is some lag time between a tenant leaving and space getting leased, but this just is bad. CBRE has been trying to lease the space in 200 Park Ave (which is connected to Grand Central) for at least 6 months now. Desperation should set in soon, as the brokers name gets tarnished by having prime space empty for so long.
"Bear writes:
from AAA do Junk in two months...and we still beleive in those rating agencys!!! Why do we need them if they Downgrade when the company is already dead?"
The job of the ratings agencies is to bayonet the dead.
In the days before the credit quants went hog wild, credit investors used to track 3 ratings for each credit: the investor's internal rating, the rating implied by market pricing (spreads), and the rating agency's ratings. The rating agency ratings had very little informational content; it tended to lag what the markets priced in already.
The only reason they are "needed" as they provided a independent benchmark of (roughly) how risky a company's debt is, which would determine eligibility for inclusion in portfolios. And to what extent retail investors buy corporate bonds, the rating provides some "due diligence" - which retail investors would almost certianly not do on their own.
Look bond guy - I've had it with everyone pointing fingers at the rating agencies.
It wasn't the agencies fault - it was the model:
FT Alphaville » Blog Archive » FT Alphaville exclusive: Moody’s error gave top ratings to debt products
So, Hoocoodanode and Whatstheodds walk into a bar. Hoocoodanode says, "Hey bartender, a shot of bullshit, please." Whatstheodds thinks for a second and says, "A gaussian on the rocks."
I wonder if the ratings agencies camping on their rating downgrades is figured into the quants' models? The only thing Brownian about this motion is the stench of bullshit in the air.
It wasn't the model; it was the permissive regulatory environment of the Bush Administration.
Reagan called government itself as the hindrance to capitalism. He kept the hand of regulatory guidance away from the S&L private sector thieves (as that's what all capitalists are when we cut to the chase); so they stole and they collapsed the tent on themselves by overextending outside of RE loans.
Bush, much stupider than Reagan, has done the same thing.
The outcome is completely expected. Whocoodanode is the joke word, not a reality.
AFAIK, there's not one person or entity who's calling the future accurately on the other side of this credit evaporation pond. CR is way too conservative, and has been for months. But folks like that; it serves up the whocoodanode-aid by the snifter instead of by the tanker-load.
What attracts me here is the hope that those with more vision will continue to attempt to see beyond, not the claptrap of NPR talking heads. We'll see.
Meanwhile, be long PM's, long commodities, and the pundits and lumpens take the hindmost, and the steaming RE bags. Much, much, much worse will befall the lenders and RE equity holders. It's back to 1994 prices, not 2002 prices. We gotta get real here and watch for tidal wave capitulation, not "oh we're gonna miss the buying oppty" that's the word on the street today.
The job of the ratings agencies is to bayonet the dead.
ROFLMAO! bond guy, I don't always agree with you, but that is f'ing funny!
The job of the ratings agencies is to bayonet the dead.
"Sweet sister, grant your soldier this:
That in good fury, he may feel,
The body where he plants his heel,
Quail from your downward, darting kiss."