The head of Goldman Sachs' German operations, Alexander Dibelius, said the fallout from the worldwide financial crisis, resulting from the reeling mortgage market in the U.S., is not yet over.
"We will most certainly experience a quarter filled with sizeable writedowns," Dibelius told Tagesspiegel in an interview to be printed on Monday.
"Only when all of the gaps in capital flows are filled, will we finally have managed the crisis," he said.
The banking head said it was quite possible that another mortgage crisis could pop up somewhere in the world and pointed to the real estate market in Dubai as a place it might happen.
"Even before skyscrapers are finished there, apartments within them have already been sold and resold three times - at a continually higher price. Few have stopped to ask themselves who really wants to live there long term," he said.
Where's the Buffett rumor? it ain't a bailout 'til we get a Buffett rumor.
Can't wait to see the financials on opening tomorrow. First the Fed ran out of bullets and then they ran out of buckets. If they do anything to prop the markets the dollar will freefall.
Firing people after the damage has been done may make boards feel better but it doesn't do much to restore the damage. And most of these culprits are let go with big big payoffs so that it is almost a blessing for them to get fired. There needs to be some way to really punish these guys so that it hurts. That might tend to prevent others from similar misdeeds.
AIG took out the entire back cover of the current New Yorker:
One less thing to worry about and it's a beauty.
Deciding where to invest your retirement savings can be pretty stressful. Put your mind at ease. With the AIG companies, you're tapping into more than 85 years of wisdom and expertise that can help make your retirement savings last.
Not worrying can reduce stress and add 15 years to your life.
We've helped over 5 million people retire stronger. Getting started is simple. Ask your finacial advisor about AIG or visit retirestronger.com.
live longer retire stronger never outlive your money
GEKKO: It's all about bucks, kid, the rest is conversation...Bud, you're still going to be president. And when the time comes, you'll parachute out a rich man. With the money you're going to make, your father won't have to work another day in his life.
"The Bush administration is temporarily suspending a 5-year-old rule intended to deter property flippers, as part of an effort to help speed the sale of foreclosed properties.
The policy was put in place in 2003 to deter property "flipping" schemes, in which buyers are overcharged for foreclosures or other distressed properties. But the surge in vacant properties resulting from borrowers who were unable to afford their mortgages has become a far more pressing concern.
The new policy "will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes," Montgomery said."
In other news....According to statistical data, there has been an alarming rise in reported street and bank robberies....to combat this, robbery has been temporarily legalized.
As the American economy slowed to a crawl and stockholders watched their money evaporate, CEO pay still chugged to yet more dizzying heights last year, an Associated Press analysis shows.
What good does it do to fire these people now? They should have been fired 2 years ago, when there was a shot at losing less money. There was some chick, at Lehman I think, who only had her exalted position for 6 months. She hardly had the time to hurt anything, but it made the true powers look like they were doing something.
A take under of Lehman? Bear Stearns Sunday? Probably not since there was no 2am phone call to the Fed on Friday. Ben I would sleep late tonight just in case.
How bout moving on to politicians and central bankers now?
The problem was not created by the central bankers, They did what they thought was right by lowering rates after the tech bubble broke and 9/11.
The problem was corruption in the mortgage industy. Lehman, Bear Stearns, and the rest enabled corruption on a grand scale. The individual realtors, appriasers, mortgage brokers, lenders, servicers et al knew they were screwing people over and didn't give a care.
Under-regulated capitalism as practiced in the USA and advocated by a certain political party is dangerous. I don't know if they are naive or criminal, but they vastly underestimate the capacity for corruption in America. This "credit crisis" is the inevitable result of such laissez-faire policies.
Let's put the blame where it belongs. Corruption begins at home.
Paul, you have it backwards. The artificially low interest rates and the inherently insolvent fractional reserve banking system is what motivates the corruption and the fraud.
I've always thought we should pass a law stipulating that no executive could make more than x times the lowest compensated employee in any corporation. Or something to that affect...
Rupert I disagree. Lack of regulation played a major role. SIV OBS arrangements that should have been illegal post Enron, unregulated IBs using unlimited leverage, totally unregulated CDS contracts (INSURANCE), lack of oversight for the ratings agencies. Artificially low rates fueled the yield chasing securitization market but the bubble would never have gotten so massively out of hand if the market had been policed.
Why the public buys the invest hype of the buy and hold for the long term BS allowing these rich coc@suckers and insiders to drain them is amazing.
It isn't "buy and hold" that is at fault. What is at fault is the tax system that allows these POS to keep their loot. What the US needs is a 90% tax on all income over $1000000 and with teeth so that it can't be evaded. Taking away 90% of their loot would end the looting very fast. Obama's proposal to apply SS tax to income over $250,000 is a start but far far too timid. The US needs a nice fresh breath of socialist air for a change.
Someone spoke disparagingly about "rich coc@suckers". As a modestly wealthy coc@sucker, I object to comparisions with Angelo Mozillo, Karl Rove or any of these other vile self-indulgent robber barons of the current political and economic landscape.
I've always thought we should pass a law stipulating that no executive could make more than x times the lowest compensated employee in any corporation. Or something to that affect...
For publicly traded companies, compensation for top executives is limited to $1M. There is no cap on performance based stock compensation.
Chris [Obama's proposal to apply SS tax to income over $250,000]
Really? Please direct me to this wondeful news. I heard something remotely similar, only more practical and less sensible. What I heard is he is proposing to eliminate the cap - period. Right now it stands around $90K. So what? We get a break between 90K and 250K where it starts up again? I doubt it. The Dems like to frame more taxes as taxes on the wealthy. I wouldn't mind that so much but that area between 90K & 250K pretty much represents the upper middle class. They are the ones (and there are MANY of them) that represent the sweet spot so that the dems can create massive programs to waste even more money.
And what's more - that tax HIKE will hit businesses MUCH harder (== JOB LOSSES) because they pay 1/2 of those entirely wasted SS taxes.
OK - Greenspan was incompetent. You'll get no argument from me.
My point is that corruption is local and individual. Monetary policy assumes people will act responsibly. This was Greenspan's mistake. At the end of the Wash Post article cited earlier by CR it says:
"Greenspan puzzled over one piece of data a Fed employee showed him in his final weeks. A trade publication reported that subprime mortgages had ballooned to 20 percent of all loans, triple the level of a few years earlier. "I looked at the numbers . . . and said, 'Where did they get these numbers from?' " Greenspan recalled in a recent interview. He was skeptical that such loans had grown in a short period "to such gargantuan proportions."
I think there is plenty of blame to go around. Forgive me for implying that Greenspan had no role. He set a policy that may have seemed appropriate, but neglected to realize the potential for corruption. I tend to place blame with those who took unfair advantage rather than with the those trying to solve problems.
"The US needs a nice fresh breath of socialist air for a change."
Don't worry comrade it's coming along with a currency collapse, bond market collapse and an Argentina moment for and ignorant society that will get what it deserves good and hard.
"For publicly traded companies, compensation for top executives is limited to $1M. There is no cap on performance based stock compensation."
Compensation is not limited to $1M. Rather, the compensation beyond $1M is not tax deductible. The excess amount is tax deductible if it is performance-based.
Fighting corruption is like an arms race. Someone zaps corruption and then someone else figures a way around the zapping. Wash, rinse repeat. The soviet union
was extremely corrupt. Corruption was a way of life there and not avoidable, as it is here (so far). A friend of mind spent a couple of years there in the mid 70s. A good job was one where you could hand a little bit of stuff to the poor masses and then trade the rest to your friends.
I think everyone has to realize there is no final answer to any of this. Rules have to continuously change to meet the latest challenge. And old rules eliminated.
It is very easy to eliminate a rule and almost impossible to get rid of one.
We are at the end game now, where the top of the food chain are eating each other. The only purpose I see is that some people maybe can, or think they can, avoid jail by turning
on their fellows.
I have thought since last fall that bail outs will happen, but really, when 4-6 trillion dollars of ephemeral value have vanished, that kind of bail out simply cannot be done. Only Some of the vanishing value is
in the form of mtges. For people with no mtges, or who bought pre 2000, this is merely vanished equity. If you don't intend to sell or borrow it makes no difference.
Just under .4 tril has been written off. We have at least that much more to be written off. Maybe 2 or 3 times that much. World wide institutions cannot bear those losses. Doesn't matter if you put John Galt in charge of them. I don't know what happens after the end of the financial world and neither does anybody else.
Paul,
Laissez-faire (roughly translated: hands-off) capitalism is not the cause of this present or past crises. Just the opposite: it's government interference in business. Read Dr. Bernstein's The Capitalist Manifesto to understand what is true capitalism. It's not what they taught you in school.
Actually, you should flip that on its head. It's business interference in government.
Government is the will of the people. Unfortunately, the "people' don't actually get much in the way of say as their access is severely limited. But business sure as heck has a ton of access. So if they're unhappy with the government, they really only have themselves to blame.
Laissez-faire (roughly translated: hands-off) capitalism is not the cause of this present or past crises. Just the opposite: it's government interference in business. Read Dr. Bernstein's The Capitalist Manifesto to understand what is true capitalism. It's not what they taught you in school.
straw man's argument.
we will never never ever have "true" capitalism just like we will never ever have "true" communism. Those are ethereal ideals, and not attainable.
why? because as soon as we start going down the laissez-faire route a bunch of dorks ruin it for everybody.
Slowly start deregulating energy? Bzzzz... wrong answer now Enron is manipulating the markets. Start deregulating the banking industry? (repeal Glass Steagal)? Bzzzz... wrong answer now you get partial cause of the subprime fiasco.
the only way to get to "real" capitalism would be to immediately drop all laws/regulations/etc simultaneously. And it ain't gonna happen. There are REASONS for why we have a lot of the regulations we do. (because of horrendous past abuses). The regulations usually stop firms from re-abusing the same way, but will always be a step behind.
There was nearly NO regulation in the so-called "shadow" banking system including the OTC markets. and look where it has gotten us. Firms WAY overleveraged that are now "too big to fail".
spare me the "it's the government's fault" tripe.
poor govt policies were part of the problem. But a HUGGEEEE problem are the private corporations. From top to bottom. Sky high bonuses for CEO's of failing companies that ran their companies to the ground with Boards of Directors in the CEO's pocket. Tons of lying, cheating, manipulation of legal documents.
It is not a straw man argument. If any of you truly believe the "big business is bad" mantra, all I can say is, you've been duped. I've given you the key to the answers, let's see if you can find them.
It's probably comforting to many to believe that CEOs are evil and it's probably comforting to others to believe that politicians and bureaucrats are evil. If that were true it would be much easier to deal with problems and we could absolve ourselves of blame. The fact is though, they're just like you and me. The people who gave the loans were no greedier or more evil than the people who took them. No one on either side of the table had a gun held to his or her head.
It's happened; bring on the janitors,clean up the mess and move along.
I find this argument funny. Government and businesses work hand-in-hand as entities to separate us from money. Now some provide better service/products for that money, but for the most part that's their job. Some parts of the government actually do things we want (like fire, police and courts) and other parts of government figure out ways to put more people in jail (legislatures).
In a somewhat related sidenote, everyone should be concerned regarding the direction of broadband companies in America, which are starting to provide less service for the same amount of $$$ (although up to this point most people have been over-paying for the service they get).
Maybe in 5 years we'll be taxed per the time we spend browsing on blogspot.com; or blogs like CR won't be able to operate for free anymore because of the way broadband companies will have figured out how to make us pay $$$ to read blogspot.com webpages... I think a "free" Internet is a threat to both businesses and government... since we can harness "global" pricing and global resources... although that also makes it attractive for people to manipulate...
There was an article in the sunday
Times (Week in Review, I think)
about how the Bear Stearns situation
should have been handled that I found
persuasive. I think the author's
name was Pozen.
Ee gad Lisa. You can't really be that clueless. Most of those serving in "public office" in Washington are very wealthy people who only spend time with other very wealthy people whom they think of as "normal."
You honestly don't believe A-76 was invented by a worker, do you?
I've given you the key to the answers, let's see if you can find them
wow... what an enlightening post. I guess I'll have to delve deep into the inner meaning of your post and get back to you.
anyway: businesses and government have both run amok and are out of control, and both are causing untold damage to our society since neither seems to have any restraint or oversight. it is rediculous to say the least.
worse yet, they are so intertwined that separating them is difficult at best. (Cheney getting his energy company cronies together to create our US energy "policy", govt employees bouncing from high govt offices to cushy corporation jobs, corps funding big time lobbyists who craft our national polices)
it's disgusting.
by the way, I never said "big business is bad". what I said was "we will never have true free market capitalism because as soon as we do some jack@ss is going to ruin it, just as has been done time and time again.
please list an economic sector that has been successfully fully-deregulated without abuse.
I would like to see Wall Street hurdling as an olympic sport.
In fact the 110 men's hurdles record was just set by a Cuban.
I guess the free market doesn't make us run faster after all.
"The problem was not created by the central bankers, They did what they thought was right by lowering rates after the tech bubble broke and 9/11."
Paul O Paul, I know you have backed off this rather funny statement, but I can't resist commenting.
All bubbles are driven by excess liquidity. Negative interest rates, people (that claim they can't see bubbles, and believe Rand type thinking) aka Greenspan make bubbles. No Greenspan flooding of liquidity, no bubble. The greedy and corrupt are always there to take advantage of excess liquidity, after all it has to go somewhere and that somewhere has been into assets. What is really funny is Greenspan's belief in "free" Ann RAnd type capital markets, but he was the head of the biggest central planning agency since the Soviet Union. He had to be torn, but he bit his lip and just pumped out the money.
The head of Goldman Sachs' German operations, Alexander Dibelius, said the fallout from the worldwide financial crisis, resulting from the reeling mortgage market in the U.S., is not yet over.
"We will most certainly experience a quarter filled with sizeable writedowns," Dibelius told Tagesspiegel in an interview to be printed on Monday.
"Only when all of the gaps in capital flows are filled, will we finally have managed the crisis," he said.
The banking head said it was quite possible that another mortgage crisis could pop up somewhere in the world and pointed to the real estate market in Dubai as a place it might happen.
"Even before skyscrapers are finished there, apartments within them have already been sold and resold three times - at a continually higher price. Few have stopped to ask themselves who really wants to live there long term," he said.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Bank on it.
Another Sunday board meeting. These are never good news.
Well it depends on the perspective - a CEO's bad news might be the company stockholders & employees good news - even if belated.
Where's the Buffett rumor? it ain't a bailout 'til we get a Buffett rumor.
Can't wait to see the financials on opening tomorrow. First the Fed ran out of bullets and then they ran out of buckets. If they do anything to prop the markets the dollar will freefall.
Firing people after the damage has been done may make boards feel better but it doesn't do much to restore the damage. And most of these culprits are let go with big big payoffs so that it is almost a blessing for them to get fired. There needs to be some way to really punish these guys so that it hurts. That might tend to prevent others from similar misdeeds.
AIG took out the entire back cover of the current New Yorker:
One less thing to worry about and it's a beauty.
Deciding where to invest your retirement savings can be pretty stressful. Put your mind at ease. With the AIG companies, you're tapping into more than 85 years of wisdom and expertise that can help make your retirement savings last.
Not worrying can reduce stress and add 15 years to your life.
We've helped over 5 million people retire stronger. Getting started is simple. Ask your finacial advisor about AIG or visit retirestronger.com.
live longer retire stronger never outlive your money
AIG The strength to be there.
Irony?
Hmmm... wonder how much that 2 million dollar policy on life insurance I have with AIG will be worth in the future...? LOL
Drew,
You have no counterparty risk whatsoever...unless of course you die.
GEKKO: It's all about bucks, kid, the rest is conversation...Bud, you're still going to be president. And when the time comes, you'll parachute out a rich man. With the money you're going to make, your father won't have to work another day in his life.
Business, financial, personal finance news - CNNMoney.com
"The Bush administration is temporarily suspending a 5-year-old rule intended to deter property flippers, as part of an effort to help speed the sale of foreclosed properties.
The policy was put in place in 2003 to deter property "flipping" schemes, in which buyers are overcharged for foreclosures or other distressed properties. But the surge in vacant properties resulting from borrowers who were unable to afford their mortgages has become a far more pressing concern.
The new policy "will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes," Montgomery said."
In other news....According to statistical data, there has been an alarming rise in reported street and bank robberies....to combat this, robbery has been temporarily legalized.
Should warn my wife not to kill me off quite yet... she may not be aware of the counter-party risk thing.
As the American economy slowed to a crawl and stockholders watched their money evaporate, CEO pay still chugged to yet more dizzying heights last year, an Associated Press analysis shows.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Why the public buys the invest hype of the buy and hold for the long term BS allowing these rich coc@suckers and insiders to drain them is amazing.
Credit Crisis to Claim Another CEO
Good start.
How bout moving on to politicians and central bankers now?
The upside of the housing bubble - IBs get clobbered and ferners git a taste of a good ole merican yield chasing lesson.
Look, ya gotta see the upside if you're an optimist like ole' barely!
Did the rumor include whether "B-52" Ben was going to finance the buyer's purchase of Lehman? Or has Ben been in hiding lately?
What good does it do to fire these people now? They should have been fired 2 years ago, when there was a shot at losing less money. There was some chick, at Lehman I think, who only had her exalted position for 6 months. She hardly had the time to hurt anything, but it made the true powers look like they were doing something.
She probably made the rest of them look bad.
A take under of Lehman? Bear Stearns Sunday? Probably not since there was no 2am phone call to the Fed on Friday. Ben I would sleep late tonight just in case.
How bout moving on to politicians and central bankers now?
The problem was not created by the central bankers, They did what they thought was right by lowering rates after the tech bubble broke and 9/11.
The problem was corruption in the mortgage industy. Lehman, Bear Stearns, and the rest enabled corruption on a grand scale. The individual realtors, appriasers, mortgage brokers, lenders, servicers et al knew they were screwing people over and didn't give a care.
Under-regulated capitalism as practiced in the USA and advocated by a certain political party is dangerous. I don't know if they are naive or criminal, but they vastly underestimate the capacity for corruption in America. This "credit crisis" is the inevitable result of such laissez-faire policies.
Let's put the blame where it belongs. Corruption begins at home.
The future is looking good on Bloomberg. Someone knows the answers and has placed their bets.
I think some No.Va HOA's have outlawed "For Sale" signs.
Don't focus on Lehman - it's WAMU that will really rock the world.
The headlines I most want to see are
"The directors of AIG are arresting their CEO"
"Lehman Brothers cans a sister"
"Scott paper touches a new bottom"
Sorry. The anticipation in killing me.
Paul, you have it backwards. The artificially low interest rates and the inherently insolvent fractional reserve banking system is what motivates the corruption and the fraud.
Rupert,
Temptation is no excuse for sin.
Yahoo! 404 - Page Not Found
Record pay while these guy run their companies to public welfare.
These guys are CRIMINALS. I would rather see them in jail than some meth user.
A friend of mine tells me no work gets done in his group at LEH. All you see is people hurdled around at cubicles.
I've always thought we should pass a law stipulating that no executive could make more than x times the lowest compensated employee in any corporation. Or something to that affect...
Rupert I disagree. Lack of regulation played a major role. SIV OBS arrangements that should have been illegal post Enron, unregulated IBs using unlimited leverage, totally unregulated CDS contracts (INSURANCE), lack of oversight for the ratings agencies. Artificially low rates fueled the yield chasing securitization market but the bubble would never have gotten so massively out of hand if the market had been policed.
A friend of mine tells me no work gets done in his group at LEH. All you see is people hurdled around at cubicles.
ReBear are they hurling or huddling. Is hurdling when they get into a huddle and collectively hurl?
I mean given the $10 billion in paper wealth Lehman employees have seen evaporate I could see where they might huddle together and hurl...
The problem was not created by the central bankers, They did what they thought was right by lowering rates after the tech bubble broke and 9/11.
You might wanna read this Paul:
Immoral Hazard
What's happened here has happened time and time again throughout history.
People in positions of power will do what it takes to stay in power. Not what's in the country's best interest.
If we don't hold them accountable then as a whole we will suffer greatly for the advantage of a few.
Do we really have to reap the same mistakes made by the US in the 20s and by Japan in the 80s again and again throughout history?
Easy money kills, but it gets politicians re-elected.
This is at the root of all the problems we have today.
Why the public buys the invest hype of the buy and hold for the long term BS allowing these rich coc@suckers and insiders to drain them is amazing.
It isn't "buy and hold" that is at fault. What is at fault is the tax system that allows these POS to keep their loot. What the US needs is a 90% tax on all income over $1000000 and with teeth so that it can't be evaded. Taking away 90% of their loot would end the looting very fast. Obama's proposal to apply SS tax to income over $250,000 is a start but far far too timid. The US needs a nice fresh breath of socialist air for a change.
Someone spoke disparagingly about "rich coc@suckers". As a modestly wealthy coc@sucker, I object to comparisions with Angelo Mozillo, Karl Rove or any of these other vile self-indulgent robber barons of the current political and economic landscape.
Please, folks, lets be civil.
TJ
(Kisses to my beloved Sam.)
Not all rich are coc@suckers. It's not a crime to be rich, but it sure is to get a 10 million $ salary from a company you are sending down the tubes.
I see bailouts written all over this.
Rumor is that Deutsch Bank will buy Lehman for 1/2 off.
Curious writes:
Rumor is that Deutsch Bank will buy Lehman for 1/2 off.
Thought Blackrock would go for LEH.
Time to short Deutsche Bank?
Rumor is that Deutsch Bank will buy Lehman for 1/2 off.
That would be funny, considering that LEH's $6B closed on Thursday.
I've always thought we should pass a law stipulating that no executive could make more than x times the lowest compensated employee in any corporation. Or something to that affect...
For publicly traded companies, compensation for top executives is limited to $1M. There is no cap on performance based stock compensation.
Curious, where is the rumor coming from? Do you think it has legs?
Chris [Obama's proposal to apply SS tax to income over $250,000]
Really? Please direct me to this wondeful news. I heard something remotely similar, only more practical and less sensible. What I heard is he is proposing to eliminate the cap - period. Right now it stands around $90K. So what? We get a break between 90K and 250K where it starts up again? I doubt it. The Dems like to frame more taxes as taxes on the wealthy. I wouldn't mind that so much but that area between 90K & 250K pretty much represents the upper middle class. They are the ones (and there are MANY of them) that represent the sweet spot so that the dems can create massive programs to waste even more money.
And what's more - that tax HIKE will hit businesses MUCH harder (== JOB LOSSES) because they pay 1/2 of those entirely wasted SS taxes.
"Where's the Buffett rumor? it ain't a bailout 'til we get a Buffett rumor."
Buffett is focused on Bud this weekend.
SS cap should just be tied to Congress salaries. They get a raise, it gets a raise.
ac writes: You might wanna read this Paul:
OK - Greenspan was incompetent. You'll get no argument from me.
My point is that corruption is local and individual. Monetary policy assumes people will act responsibly. This was Greenspan's mistake. At the end of the Wash Post article cited earlier by CR it says:
"Greenspan puzzled over one piece of data a Fed employee showed him in his final weeks. A trade publication reported that subprime mortgages had ballooned to 20 percent of all loans, triple the level of a few years earlier. "I looked at the numbers . . . and said, 'Where did they get these numbers from?' " Greenspan recalled in a recent interview. He was skeptical that such loans had grown in a short period "to such gargantuan proportions."
I think there is plenty of blame to go around. Forgive me for implying that Greenspan had no role. He set a policy that may have seemed appropriate, but neglected to realize the potential for corruption. I tend to place blame with those who took unfair advantage rather than with the those trying to solve problems.
I can't be the only one here who thinks Alan Greenspan is nothing more than a Chauncey Gardener.
sullivan
resigns
I opened the gate to the chicken
coop.
I was shocked when I learned the coyotes took advantage of the situation .
Shocked I tell you !!
"The US needs a nice fresh breath of socialist air for a change."
Don't worry comrade it's coming along with a currency collapse, bond market collapse and an Argentina moment for and ignorant society that will get what it deserves good and hard.
Greenspooner! LOL
But, you see, America is the land of the free and the home of the brave.
We are a beacon of freedom. We are a Christian nation. We are God's chosen nation to lead the world.
We aren't corrupt - we are the world's policeman. How can we be corrupt?
"For publicly traded companies, compensation for top executives is limited to $1M. There is no cap on performance based stock compensation."
Compensation is not limited to $1M. Rather, the compensation beyond $1M is not tax deductible. The excess amount is tax deductible if it is performance-based.
Drew: Should warn my wife not to kill me off quite yet... she may not be aware of the counter-party risk thing.
Let's just hope that she doesn't read finance news or else she might try a run on your policy before AIG becomes insolvent.
A hanging is always good for morale.
When you fire the CEO, the probability that the next guy is actually clearing the decks is much higher.
Happy to see Sullivan go.
Fighting corruption is like an arms race. Someone zaps corruption and then someone else figures a way around the zapping. Wash, rinse repeat. The soviet union
was extremely corrupt. Corruption was a way of life there and not avoidable, as it is here (so far). A friend of mind spent a couple of years there in the mid 70s. A good job was one where you could hand a little bit of stuff to the poor masses and then trade the rest to your friends.
I think everyone has to realize there is no final answer to any of this. Rules have to continuously change to meet the latest challenge. And old rules eliminated.
It is very easy to eliminate a rule and almost impossible to get rid of one.
We are at the end game now, where the top of the food chain are eating each other. The only purpose I see is that some people maybe can, or think they can, avoid jail by turning
on their fellows.
I have thought since last fall that bail outs will happen, but really, when 4-6 trillion dollars of ephemeral value have vanished, that kind of bail out simply cannot be done. Only Some of the vanishing value is
in the form of mtges. For people with no mtges, or who bought pre 2000, this is merely vanished equity. If you don't intend to sell or borrow it makes no difference.
Just under .4 tril has been written off. We have at least that much more to be written off. Maybe 2 or 3 times that much. World wide institutions cannot bear those losses. Doesn't matter if you put John Galt in charge of them. I don't know what happens after the end of the financial world and neither does anybody else.
Will the FED bailout LEH tomorrow, will it have too! Ben is unpredictable.
Have we seen the end of the Investment Bank Model? I think so, Babcock Brown and MaQuarrie bank are struggling under tremendous amounts of leverage...
Could be a down day for B&B.
Have we seen the end of the Investment Bank Model?
They'll just call it something else.
Paul,
Laissez-faire (roughly translated: hands-off) capitalism is not the cause of this present or past crises. Just the opposite: it's government interference in business. Read Dr. Bernstein's The Capitalist Manifesto to understand what is true capitalism. It's not what they taught you in school.
DB's history of paying too much for IBs is legendary, but are they really that stupid, right now?
I'm still rooting for the Dutch; a price war on beer can only be good for the U.S. economy as we enter the eighth year of the Recession.
Actually, you should flip that on its head. It's business interference in government.
Government is the will of the people. Unfortunately, the "people' don't actually get much in the way of say as their access is severely limited. But business sure as heck has a ton of access. So if they're unhappy with the government, they really only have themselves to blame.
Laissez-faire (roughly translated: hands-off) capitalism is not the cause of this present or past crises. Just the opposite: it's government interference in business. Read Dr. Bernstein's The Capitalist Manifesto to understand what is true capitalism. It's not what they taught you in school.
straw man's argument.
we will never never ever have "true" capitalism just like we will never ever have "true" communism. Those are ethereal ideals, and not attainable.
why? because as soon as we start going down the laissez-faire route a bunch of dorks ruin it for everybody.
Slowly start deregulating energy? Bzzzz... wrong answer now Enron is manipulating the markets. Start deregulating the banking industry? (repeal Glass Steagal)? Bzzzz... wrong answer now you get partial cause of the subprime fiasco.
the only way to get to "real" capitalism would be to immediately drop all laws/regulations/etc simultaneously. And it ain't gonna happen. There are REASONS for why we have a lot of the regulations we do. (because of horrendous past abuses). The regulations usually stop firms from re-abusing the same way, but will always be a step behind.
There was nearly NO regulation in the so-called "shadow" banking system including the OTC markets. and look where it has gotten us. Firms WAY overleveraged that are now "too big to fail".
spare me the "it's the government's fault" tripe.
poor govt policies were part of the problem. But a HUGGEEEE problem are the private corporations. From top to bottom. Sky high bonuses for CEO's of failing companies that ran their companies to the ground with Boards of Directors in the CEO's pocket. Tons of lying, cheating, manipulation of legal documents.
It is not a straw man argument. If any of you truly believe the "big business is bad" mantra, all I can say is, you've been duped. I've given you the key to the answers, let's see if you can find them.
A little melodramatic, no?
We are just firing a CEO, with another one trying to hang on by his fingernails. This is just business.
It's probably comforting to many to believe that CEOs are evil and it's probably comforting to others to believe that politicians and bureaucrats are evil. If that were true it would be much easier to deal with problems and we could absolve ourselves of blame. The fact is though, they're just like you and me. The people who gave the loans were no greedier or more evil than the people who took them. No one on either side of the table had a gun held to his or her head.
It's happened; bring on the janitors,clean up the mess and move along.
I want a Bravo reality show about ex-CEOs in prison.
I find this argument funny. Government and businesses work hand-in-hand as entities to separate us from money. Now some provide better service/products for that money, but for the most part that's their job. Some parts of the government actually do things we want (like fire, police and courts) and other parts of government figure out ways to put more people in jail (legislatures).
In a somewhat related sidenote, everyone should be concerned regarding the direction of broadband companies in America, which are starting to provide less service for the same amount of $$$ (although up to this point most people have been over-paying for the service they get).
Maybe in 5 years we'll be taxed per the time we spend browsing on blogspot.com; or blogs like CR won't be able to operate for free anymore because of the way broadband companies will have figured out how to make us pay $$$ to read blogspot.com webpages... I think a "free" Internet is a threat to both businesses and government... since we can harness "global" pricing and global resources... although that also makes it attractive for people to manipulate...
There was an article in the sunday
Times (Week in Review, I think)
about how the Bear Stearns situation
should have been handled that I found
persuasive. I think the author's
name was Pozen.
YLSP- Time Warner and Comcast are already looking at different "plans" depending on how much bandwidth you use.
- NY Times
Ee gad Lisa. You can't really be that clueless. Most of those serving in "public office" in Washington are very wealthy people who only spend time with other very wealthy people whom they think of as "normal."
You honestly don't believe A-76 was invented by a worker, do you?
I've given you the key to the answers, let's see if you can find them
wow... what an enlightening post. I guess I'll have to delve deep into the inner meaning of your post and get back to you.
anyway: businesses and government have both run amok and are out of control, and both are causing untold damage to our society since neither seems to have any restraint or oversight. it is rediculous to say the least.
worse yet, they are so intertwined that separating them is difficult at best. (Cheney getting his energy company cronies together to create our US energy "policy", govt employees bouncing from high govt offices to cushy corporation jobs, corps funding big time lobbyists who craft our national polices)
it's disgusting.
by the way, I never said "big business is bad". what I said was "we will never have true free market capitalism because as soon as we do some jack@ss is going to ruin it, just as has been done time and time again.
please list an economic sector that has been successfully fully-deregulated without abuse.
At the end, the only two IBs left standing will be Goldman Sachs and JPM.
I would like to see Wall Street hurdling as an olympic sport.
In fact the 110 men's hurdles record was just set by a Cuban.
I guess the free market doesn't make us run faster after all.
"The problem was not created by the central bankers, They did what they thought was right by lowering rates after the tech bubble broke and 9/11."
Paul O Paul, I know you have backed off this rather funny statement, but I can't resist commenting.
All bubbles are driven by excess liquidity. Negative interest rates, people (that claim they can't see bubbles, and believe Rand type thinking) aka Greenspan make bubbles. No Greenspan flooding of liquidity, no bubble. The greedy and corrupt are always there to take advantage of excess liquidity, after all it has to go somewhere and that somewhere has been into assets. What is really funny is Greenspan's belief in "free" Ann RAnd type capital markets, but he was the head of the biggest central planning agency since the Soviet Union. He had to be torn, but he bit his lip and just pumped out the money.
Nice guy he was.