Executives...more like lunatics running the asylum. Perry - total joker. Hand picked by the crook Mozilo. Of course the place is a big fat corruption house.
I spent the last couple of weeks hanging out with many captains of industry, most in the latter part of their careers. These guys are not worried, and their continuing investments in the markets reflect this.
I went through a basic outline of the dynamics described on this site with one group, talking about the decline of the virtuous cycle, the ARM adjustment issue, the effect of YSPs on mortgage quality, etc. Afterwards one gentleman said kindly, "Son, I've been through this kind of thing several times in my life. They're never as bad as you think they'll be."
Funny, zero. Did you tell him this one is already worse than you thought it would be, and worse than BB and Paulson and co thought it would be. And it is still getting worserer. Stick that in your pipe captains!
I spent the last couple of weeks hanging out with many captains of industry, most in the latter part of their careers. These guys are not worried, and their continuing investments in the markets reflect this.
These are the rapists, not the raped.
Yes, and these Perry types are still typically in denial when the hangman's noose is already around their neck. Oh wait, that's how it used to be when there was actual justice. Now, those people go on with their golden parachutes to go rape and pillage somewhere else.
Sheila Bair was inteviewed on the NewsHour last night. She continues to compare the damage so far to the S&L debacle in the 80's, when about 1500 institutions were closed.
She offers that the banks at risk are only a small fraction of that number. However, she also qualifies this by say the losses are going to rise.
So, in summary, it's not as bad as it was before, but it's going to get worse.
There is a lack of urgency or sense of personal devastation when you are the top 1% of the economic pyramid.
I doubt the various captains of industry in 1927 saw the next 2 decades as being a full-blown economic implosion. That being said, these individuals are probably highly diversified enough to lose 3/4 of their assets and still cling to the top 1%.
I am more concerned with the other 99% who will be competing for a space in the soup line.
The lenders are a lot bigger than in the 80s, so a direct comparason is not accurate or possilbe.
And the total number of lenders?
My sense is that Sheila is avoiding talking on a percentage basis, instead choosing to say that the overall number of failures is smaller. But I believe the market was much more fractured back then.
And the upshot of these captains of industry is that they will contribute to the nascent professional body-guard industry when the US reinvents the kidnapping industry...it should bring the best and brightest from around the world...
I worked at one place where everyone heard from the boss that the sherriff was coming to lock the doors and we would meet at her house to continue working.
Me and another guy decided, ah, no thanks, and instead grabbed our PC's and headed for the parking lot. Payment in lieu of a paycheck which we knew was never going to come.
Zero, the denial in an executive suite is amazing. When you are surrounded by people who will tell you nothing that you don't want to hear, it's easy to miss the freight train moving toward you. Your anecdote just enforces this. Also, if you're an exec of a public company, you CAN'T say what you think because you could influence the stock.
What you want to do is talk to the next level down...you know, the grunts that actually prepare all the research for these "captains of industry". They most likely know the truth. I find that the IT and tech guys that work with the data know what's going on best. Lots of good info if you can tap into it
The lower level finance guys usually know what is going on too. They just have to have a very select and trusted group of people that they can give hand signals to when it is time to dust off the resume. The info percolates up, but it can always just sit in someone's email box, or paper inbox until it is too late to matter.
Clearly the currency markets aren't worried about inflation in any case, otherwise wouldn't the Yen be rallying against the dollar? - ac
Japan has its own problems. Besides non of the markets are acting rationally right now. Call it toppy behavior, froth, inflection point noise, whatever. IMO the markets are no longer sending reliable signal nor reflecting their actual conditions.
That being said, these individuals are probably highly diversified enough to lose 3/4 of their assets and still cling to the top 1%.
EXACTLY. Proportionatly, the investing class will lose the most in the great deleveraging, but they'll feel it less. I'm not at all sure that loosing 3/4 of 20 million will cause somebody to change their lifestyle as much as losing 1/4 of 100k will.
But, it is one thing for the FDIC to take out full-page ads touting the safety of the banking system, and that no depositor has lost an insured dollar.
However, it is a bit much for them to plaster a $100,000 gold certificate ('payable in gold'), with a picture of Woodrow Wilson. I will give them the benefit of the doubt, that their key message is '$100,000' and that the FDIC guarantee is as good as gold. But, I hope that they are not trying to make hoi polloi believe that the dollar is as good as gold or backed by gold.
Words John Thain doesn't want to hear: "We're from the SEC and we are investigating the fraudulent statements you made considering your company's capital position."
Me and another guy decided, ah, no thanks, and instead grabbed our PC's and headed for the parking lot. Payment in lieu of a paycheck which we knew was never going to come.
You ripped off the secured creditors who had a lien on that PC.
If every employee did that, then all these hedge funds that are loaning money to small companies at 18%, secured against specific property, would be screwed.
Don't you know that employee paychecks are unsecured debt and hedge funds come first?
Sounds like a classic case of the institutional imperative
Per Warren Buffet the institutional imperative exists when one of the four conditions is satisfied:
"(1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated. Institutional dynamics, not venality or stupidity, set businesses on these courses, which are too often misguided."
if you agree that oil and deficit spending for wars are part of our financial crisis.
file under (the iraq war wasnt about oil, it wasnt, i tell ya, you cant make me say it)
(X pentagon official, neo-con and Iraq war cheer leader)Perle Linked to Kurdish Oil Plan
Wall Street Journal ^ | 7/29/08 | By SUSAN SCHMIDT and GLENN R. SIMPSON
Influential former Pentagon official Richard Perle has been exploring going into the oil business in Iraq and Kazakhstan, according to people with knowledge of the matter and documents outlining possible deals.
Mr. Perle, one of a group of security experts who began pushing the case for toppling Iraqi dictator Saddam Hussein about a decade ago, has been discussing a possible deal with officials of northern Iraq's Kurdistan regional government, including its Washington envoy, according to these people and the documents.
It would involve a tract called K18, near the Kurdish city of Erbil, according to documents describing the plan. A consortium founded by Turkish company AK Group International is seeking rights to drill there, the documents say. Potential backers include two Turkish companies as well as Kazakhstan, according to individuals involved. ---
Mr. Perle also has explored obtaining an oil concession in Kazakhstan in tandem with a northern Iraq deal, according to people familiar with those discussions.
Mr. Perle, who was an assistant Defense secretary in the Reagan administration, is known for his strong support of Israel and hawkish views on arms control. In the early days of the Bush administration, he was one of the most influential proponents of U.S. military action to oust Iraq's President Hussein
war for fun and profit...there ought to be a special place in hell...
The Iraq war was "done" to enhance the security of Israel, but oil was always an added benefit in the back of the minds of the Neocons for sure. Now Perle is just moving in to take advantage of the situation. Sleazy and disgusting in the extreme, but very very HIM.
OT via WSJ via Drudge: Interesting... As part of a week-long shift back to economic issues, Barack Obama will meet with Federal Reserve Chairman Ben Bernanke on Tuesday, his campaign confirmed. The two are expected to discuss the current credit crisis and Sen. Obama's plans to enforce tougher oversight of financial institutions if elected president. The likely Democratic nominee is also scheduled to speak to Treasury Secretary Henry Paulson by phone Tuesday, campaign officials said.
To truly understand the corruption that went on at Indy Mac you have to read, The Big Picture blog "My experience at Indy Mac", the story of a chief appraiser who lasted 6 months, and filed a successful wrongful termination suit. Quite chilling.
This seems like an opportune time for a 'nudge' to the currency markets to pop DX, triggering an oil sell off and equity pump...cynical scenario is that yesterday's sell-off was primarily to bat down TNX to help with the next cycle of selling IOU's to the world - need to check the calendar for UST bond sales.
Mom has no idea what to do right now and everyone should stop listening to her trying to act smart. This is all reactionary behaviour. What are they going to do with WaMu on the brink?
WRT Bair I would have thought the BS buyout story had stronger legs; i.e., there was no swap/SIV market in the 1980's that I am aware of and neither the number of individual institutional failures nor even the size of institutions that may fail seem central, the question would seem to be the extent of the counterparty risk and international consequence any given failure involves and, even if officials such as Bair refuse to publicly discuss it, that issue is probably the main impetus behind the ongoing policy initiatives.
I do not believe the bailout express will stop until all the ammunition is gone and we (a) are either far enough through the debacle to slog the remaining yards or (b) crash.
No they aren't Chris! And that's why i'm saying that companies like MER deserve to go down if their management exhibits the behavior we just saw. The trust here should be zero, and no one should invest without a total housecleaning WITHOUT any packages.
Me and another guy decided, ah, no thanks, and instead grabbed our PC's and headed for the parking lot. Payment in lieu of a paycheck which we knew was never going to come.
You ripped off the secured creditors who had a lien on that PC.
If every employee did that, then all these hedge funds that are loaning money to small companies at 18%, secured against specific property, would be screwed."
At the base of it, every economic system depends on hordes of little people who identify it with their own best interests.
I don't doubt that, given a chance, a whole lot of laid-off financial workers with no severance and few prospects would walk off with the company's laptop.
I too saw Sheila Bair on NewsHour last night. Her words and demeanor were telling. She qualified many of her statements with, "in my opinion," "that's what I think," etc. Her eyes were cast down much of the time. Mousy brown dress and hair. Neither her words nor her nonverbal communication projected confidence or authority. She'd be an easy mark at a poker table with all those tells.
Are you kidding? Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down. With the stock worth nothing, working 80 hours a week for no OT, and the lying that went on then, we viewed it as our duty to clean house on the way out the door. Why, ipodius is still using custom note paper with dead companies on them at home to this day
Only if Perry is carted off to jail will this be a worthwhile takeover.
Letting that crook walk away with millions is tantamount to giving Bonaparte a statue.
The law should be amended that in the event of a bank takeover, the executives must NOT be informed early, and they should be detained until the evidence of their innocence is discovered.
This scumbag is stealing $6 billion from taxpayers. Essentially makes the LTCM scum look like schoolboys.
We need to see these thieves where they belong, prison. Otherwise it's all just a bullshit game again.
"The Iraq war was "done" to enhance the security of Israel..."
jim | 07.29.08 - 11:16 am | #
A born-again Christian, Texas oilman with no noticeable affinity for Jews kicked the butt of the guy who tried to kill his pa and who happened to be sitting on one of the world's biggest oil fields, and he did it to secure Israel???
The only thing I'll add here is that the top FDIC management obviously learned little from the 1980s S&L crisis. That is because they were never on the front lines and in the alternative dictated from their plush DC offices. And, when it was over they Riffed the front lines in the field offices (some only six months from full retirement benefits) and are still dictating from even plusher offices. Fuck them.
More supply coming
Additionally, government securities are under pressure ahead of Wednesday's announcement by the Treasury Department about how much debt it will issue this quarter. Traders are bracing themselves for higher amounts of 10-year notes and 30-year bonds thanks to growing federal deficits.
Stone & McCarthy Research Associates expects the government to sell $17 billion in 10-year notes and $11 billion in long bonds next week.
On Monday, the Treasury Department said it expects to borrow $171 billion in the third quarter, compared with a preliminary projection in May of $112 billion. From October to December, the Treasury expects to borrow $142 billion.
The calculated lying by the 1% has been pervasive, with Thain's little dance only the most recent episode. It was responsible for a large part of this disaster, and worse, it is continuing. I know an individual who bought way too much house in a sun belt area. After resets he was paying over $5,000/mo. When I asked if he was foreclosed recently, he said "No, the bank lets me pay $2,500 a month and adds the rest to principal." So the bank is building the principal by $2,500 a month on a loan that will never repay, not only not recognizing the foreclosure, but actually recognizing income of $5,000 per month. I don't know how widespread this practise is, but it is scary. Here we go again!
Nemo, I can tell you that, at this point in my life, if some POS owed me wages and wouldn't pay, he'd be lucky if all I took from him was the crap that wasn't nailed down.
Are you kidding? Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down. With the stock worth nothing, working 80 hours a week for no OT, and the lying that went on then, we viewed it as our duty to clean house on the way out the door. Why, ipodius is still using custom note paper with dead companies on them at home to this day
Hmmm.... I never walked off with anything. That seems kind of shady.
But I did get stuck with a bunch of licenses for software I was given as part of a contract for a (very) small company that suddenly went under.
My contact there went to work for Microsoft and when I asked him what to do he basically said "congratulations on your new software".
It was several thousand dollars worth of stuff IIRC.
FDIC
Risk-Based Capital Rules
Notice of Proposed Rulemaking on Risk-Based Capital Standards: Standardized Framework FIL-69-2008
July 29, 2008
Summary: The federal bank and thrift regulatory agencies have jointly issued the attached Notice of Proposed Rulemaking (NPR) and are seeking comment on the domestic application of the Basel II standardized framework for all domestic banks, bank holding companies, and savings associations that are not subject to the Basel II advanced approaches rule. The FDIC will accept comments on the NPR through October 27, 2008. FDIC: FIL-69-2008: Notice of Proposed Rulemaking on Risk-Based Capital Standards: Standardized Framework
Cold comfort: only 13% of banks on FDIC watch list fail
Posted Jul 29th 2008 8:51AM by Douglas McIntyre
"When it comes to the banking industry, the good news just keeps coming. The head of the FDIC says that only about 13% of the banks on its watch list of troubled institutions actually fail. Except for the banks that go out of business, how could it get any better? "We work with the primary regulator to give them extra care and attention, to nurse them back to health or to sell them off to another institution," said FDIC Chairman Sheila Bair, according to Reuters.
The comments side-step the issue that the credit crisis is getting worse. The IMF recently said that it could not see a bottom for the housing market and that financial companies would end up with $1 trillion in write-offs before the troubles pass. Bill Gross, the head of huge bond house Pimco, has essentially said the same thing.
Are you kidding? Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down. With the stock worth nothing, working 80 hours a week for no OT, and the lying that went on then, we viewed it as our duty to clean house on the way out the door. Why, ipodius is still using custom note paper with dead companies on them at home to this day
I guess I was raised with strange notions. As a lad I was told that whenever I found cool stuff (i.e. a $5 bill laying on the ground at school), I was supposed to try and get it to it rightful owner.
The rule was, "If it isn't yours, then it isn't yours." Even in cases of what I thought would be just.
The other day, after checking out of the grocery line, I noticed a bulb of garlic in my cart that didn't get tallied. II thought about just walking out, but got back in line and paid the 57 cents. I don't think I do it out of virtue--I can't help it. It is just absolute habit after all those years of training.
I used to think that I'd get some cool reward someday, but now I know I'm just one of life's chumps. But chumpy is pretty cool when I go to brush my teeth at night. The guy in the mirror seems like a nice fella'.
Bingo. If you take something that does not belong to you, you are a crook.
What if the company "owes" you money? Guess what, they also owe other people money. That is why we have laws and courts. The kid stealing a pair of jeans thinks he is "entitled" to them, too.
Just because you are smarter or richer or whiter or less likely to get caught than some other thieves does not change what you are.
At 10:15 the night before IndyMac was shut down, The Bank Lawyer wrote on his blog:
"The search term that brought a reader to this blog this afternoon, a reader who, according to my site meter, was accessing the internet from IndyMac Bank: 'what happens in a thrift conservatorship'."
"kicked the butt of the guy who tried to kill his pa"
Totally false. The pampered child of rich, politically powerful folks took umbrage at the notion of a third world dictator being rude to his papa, so he sent his Imperial Army to depose of said dictator.
The Imperial Army suffered tens of thousands of casualties, and more than 4k deaths, and drained the Imperial treasury helping to impoverish the hapless citizens of the Empire, while killing untold thousands more of the dictator's country. The rich, pampered child suffered nothing more than a spill from his bicycle one fine afternoon.
Me and another guy ... grabbed our
PC's and headed for the parking lot. > Payment in lieu of a paycheck ...
Mhmmm. Ethernet ID and serial numbers in the hardware. Got licenses for that software? Hiding any transactions in the hardware you took with you in hopes it doesn't get found? Forensic accounting. More work to do sorting out the mess.
FFDIC writes:
The only thing I'll add here is that the top FDIC management obviously learned little from the 1980s S&L crisis. That is because they were never on the front lines and in the alternative dictated from their plush DC offices. And, when it was over they Riffed the front lines in the field offices (some only six months from full retirement benefits) and are still dictating from even plusher offices. Fuck them.
great post. obviously you will not be re-signing up. not only did they let go ones on the front line they silenced the handful of analysts/economists that started warning about this crisis more than 5 years ago. fdic executives ignored these warnings and the more disturbing thing is that they all still hold their jobs. sadly, bair has not made one significant change among the senior executive ranks -- that should have been an easy move just given the bad morale they created let alone for the dereliction in duties from being asleep at the wheel while unprecedented exposures were being put on the balance sheets.
SurferDude,
Agreed totally. John Bovenzi was put in charge of IndyMac. He is one of the main DC managers responsible for the 2005 RIF. He and his second wife, Erica Bovenzi, also an FDIC employee pull down oh about $300,000 annually maybe more with their bonus. That's not exactly chump change for Federal employees. He is probably getting special pay for being in CA away from his homebase.
SurferDude,
I hate that term "asleep at the wheel or asleep at the switch" ... FDIC senior examiners and DC knew exactly what was going on. Even I with my narrow role as you call it knew what was going on. It was obvious to everybody former FDIC Chairman (AND BANKER) was acting like the fox guarding the hen house. There was a whole lot of clucking going on. How is the surf? Ross and I are going to do lunch in mid Aug. I owe him a 12 pak of Bud Lite...
SurferDude
I'm on a roll! Your point about replacing mgt reminded me to post this little known gem. During the Sept. 2005 FDIC downsized only the rank and file mostly at grade 12 and below. Vets and managers were exempt regardless of their performance or lack thereof. Managers of course are not in the union (NTEU) which represents the rank & file. Managers were offered buyouts/early retirements and had to take those by May 2005. Several of those retirees have now come back with full pension/benefits plus new grade 12 pay on 1 year renewable contracts. Once guy I know is being paid to fly home from TX to TN every two weeks. He told me he is making $125,000 with full pension and new salary. Plus they get generous per diem when out overnite on assignment. And free pizza!
This should read "former FDIC Chairman (AND BANKER) Don Powell...
Our Government | The White House
FFDIC writes:
SurferDude,
I hate that term "asleep at the wheel or asleep at the switch" ... FDIC senior examiners and DC knew exactly what was going on. Even I with my narrow role as you call it knew what was going on. It was obvious to everybody former FDIC Chairman (AND BANKER) was acting like the fox guarding the hen house. There was a whole lot of clucking going on. How is the surf? Ross and I are going to do lunch in mid Aug. I owe him a 12 pak of Bud Lite...
FFDIC | 07.29.08 - 3:37 pm | #
WHOOOOOO HOOOOO
I thought captains and crew departed sinking ships last, not first.
Executives...more like lunatics running the asylum. Perry - total joker. Hand picked by the crook Mozilo. Of course the place is a big fat corruption house.
PRICELESS!
Denial is still very strong.
I spent the last couple of weeks hanging out with many captains of industry, most in the latter part of their careers. These guys are not worried, and their continuing investments in the markets reflect this.
I went through a basic outline of the dynamics described on this site with one group, talking about the decline of the virtuous cycle, the ARM adjustment issue, the effect of YSPs on mortgage quality, etc. Afterwards one gentleman said kindly, "Son, I've been through this kind of thing several times in my life. They're never as bad as you think they'll be."
We shall see.
Funny, zero. Did you tell him this one is already worse than you thought it would be, and worse than BB and Paulson and co thought it would be. And it is still getting worserer. Stick that in your pipe captains!
Zero writes:
Denial is still very strong.
I spent the last couple of weeks hanging out with many captains of industry, most in the latter part of their careers. These guys are not worried, and their continuing investments in the markets reflect this.
These are the rapists, not the raped.
Yes, and these Perry types are still typically in denial when the hangman's noose is already around their neck. Oh wait, that's how it used to be when there was actual justice. Now, those people go on with their golden parachutes to go rape and pillage somewhere else.
Sheila Bair was inteviewed on the NewsHour last night. She continues to compare the damage so far to the S&L debacle in the 80's, when about 1500 institutions were closed.
She offers that the banks at risk are only a small fraction of that number. However, she also qualifies this by say the losses are going to rise.
So, in summary, it's not as bad as it was before, but it's going to get worse.
There is a lack of urgency or sense of personal devastation when you are the top 1% of the economic pyramid.
I doubt the various captains of industry in 1927 saw the next 2 decades as being a full-blown economic implosion. That being said, these individuals are probably highly diversified enough to lose 3/4 of their assets and still cling to the top 1%.
I am more concerned with the other 99% who will be competing for a space in the soup line.
The lenders are a lot bigger than in the 80s, so a direct comparason is not accurate or possilbe.
Friday night is the new watch night, with random estimates of 150-300 bank closures, that works out 3-5 per week for the next year. designing better futures: Friday night Fight night is now Friday night FDIC night
how does this rank in scary factor vs. "I'll be back!"
.............
Looks to me like the Yen Rewind just keeps rolling on.
Clearly the currency markets aren't worried about inflation in any case, otherwise wouldn't the Yen be rallying against the dollar?
The lenders are a lot bigger than in the 80s, so a direct comparason is not accurate or possilbe.
And the total number of lenders?
My sense is that Sheila is avoiding talking on a percentage basis, instead choosing to say that the overall number of failures is smaller. But I believe the market was much more fractured back then.
And the upshot of these captains of industry is that they will contribute to the nascent professional body-guard industry when the US reinvents the kidnapping industry...it should bring the best and brightest from around the world...
I worked at one place where everyone heard from the boss that the sherriff was coming to lock the doors and we would meet at her house to continue working.
Me and another guy decided, ah, no thanks, and instead grabbed our PC's and headed for the parking lot. Payment in lieu of a paycheck which we knew was never going to come.
Zero, the denial in an executive suite is amazing. When you are surrounded by people who will tell you nothing that you don't want to hear, it's easy to miss the freight train moving toward you. Your anecdote just enforces this. Also, if you're an exec of a public company, you CAN'T say what you think because you could influence the stock.
What you want to do is talk to the next level down...you know, the grunts that actually prepare all the research for these "captains of industry". They most likely know the truth. I find that the IT and tech guys that work with the data know what's going on best. Lots of good info if you can tap into it
First Merrill and now Citi, they sorta take turns fessing up and doing penance:
Citigroup Markdowns May Rise $8 Billion, Analyst Says (Update4) - Bloomberg.com
Will it ever end? When will we be able to say goodbye?
The lower level finance guys usually know what is going on too. They just have to have a very select and trusted group of people that they can give hand signals to when it is time to dust off the resume. The info percolates up, but it can always just sit in someone's email box, or paper inbox until it is too late to matter.
Clearly the currency markets aren't worried about inflation in any case, otherwise wouldn't the Yen be rallying against the dollar? - ac
Japan has its own problems. Besides non of the markets are acting rationally right now. Call it toppy behavior, froth, inflection point noise, whatever. IMO the markets are no longer sending reliable signal nor reflecting their actual conditions.
That being said, these individuals are probably highly diversified enough to lose 3/4 of their assets and still cling to the top 1%.
EXACTLY. Proportionatly, the investing class will lose the most in the great deleveraging, but they'll feel it less. I'm not at all sure that loosing 3/4 of 20 million will cause somebody to change their lifestyle as much as losing 1/4 of 100k will.
I apologize if this has been mentioned before...
But, it is one thing for the FDIC to take out full-page ads touting the safety of the banking system, and that no depositor has lost an insured dollar.
However, it is a bit much for them to plaster a $100,000 gold certificate ('payable in gold'), with a picture of Woodrow Wilson. I will give them the benefit of the doubt, that their key message is '$100,000' and that the FDIC guarantee is as good as gold. But, I hope that they are not trying to make hoi polloi believe that the dollar is as good as gold or backed by gold.
The lenders are a lot bigger than in the 80s, so a direct comparason is not accurate or possilbe.
I don't dispute that. Bair also claimed that IndyMac was the largest bank that would fail as the other on their watch list were much smaller.
And everyone should take whatever she says with a large grain of salt.
I thought captains and crew departed sinking ships last, not first
Well mayday, mayday has been replaced at banks at least by fri-day, fri-day. When you hear that, you head for the boats.
Words John Thain doesn't want to hear: "We're from the SEC and we are investigating the fraudulent statements you made considering your company's capital position."
Good news for John Thain - he won't hear them.
Where are the good guys?
You ripped off the secured creditors who had a lien on that PC.
If every employee did that, then all these hedge funds that are loaning money to small companies at 18%, secured against specific property, would be screwed.
Don't you know that employee paychecks are unsecured debt and hedge funds come first?
Oh how history repeats itself. Over and over again.
Sounds like a classic case of the institutional imperative
Per Warren Buffet the institutional imperative exists when one of the four conditions is satisfied:
"(1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated. Institutional dynamics, not venality or stupidity, set businesses on these courses, which are too often misguided."
seems off topic but it isnt
if you agree that oil and deficit spending for wars are part of our financial crisis.
file under (the iraq war wasnt about oil, it wasnt, i tell ya, you cant make me say it)
(X pentagon official, neo-con and Iraq war cheer leader)Perle Linked to Kurdish Oil Plan
Wall Street Journal ^ | 7/29/08 | By SUSAN SCHMIDT and GLENN R. SIMPSON
Influential former Pentagon official Richard Perle has been exploring going into the oil business in Iraq and Kazakhstan, according to people with knowledge of the matter and documents outlining possible deals.
Mr. Perle, one of a group of security experts who began pushing the case for toppling Iraqi dictator Saddam Hussein about a decade ago, has been discussing a possible deal with officials of northern Iraq's Kurdistan regional government, including its Washington envoy, according to these people and the documents.
It would involve a tract called K18, near the Kurdish city of Erbil, according to documents describing the plan. A consortium founded by Turkish company AK Group International is seeking rights to drill there, the documents say. Potential backers include two Turkish companies as well as Kazakhstan, according to individuals involved. ---
Mr. Perle also has explored obtaining an oil concession in Kazakhstan in tandem with a northern Iraq deal, according to people familiar with those discussions.
Mr. Perle, who was an assistant Defense secretary in the Reagan administration, is known for his strong support of Israel and hawkish views on arms control. In the early days of the Bush administration, he was one of the most influential proponents of U.S. military action to oust Iraq's President Hussein
war for fun and profit...there ought to be a special place in hell...
mock turtle
The Iraq war was "done" to enhance the security of Israel, but oil was always an added benefit in the back of the minds of the Neocons for sure. Now Perle is just moving in to take advantage of the situation. Sleazy and disgusting in the extreme, but very very HIM.
OT via WSJ via Drudge: Interesting...
As part of a week-long shift back to economic issues, Barack Obama will meet with Federal Reserve Chairman Ben Bernanke on Tuesday, his campaign confirmed. The two are expected to discuss the current credit crisis and Sen. Obama's plans to enforce tougher oversight of financial institutions if elected president. The likely Democratic nominee is also scheduled to speak to Treasury Secretary Henry Paulson by phone Tuesday, campaign officials said.
ipodius | 07.29.08 - 11:03 am | #
Thats why when the CFO of our company announces "We might be looking at buying other companies,but it is wayyyy to early" I just grin.
Not all companies are clueless...
Chris
To truly understand the corruption that went on at Indy Mac you have to read, The Big Picture blog "My experience at Indy Mac", the story of a chief appraiser who lasted 6 months, and filed a successful wrongful termination suit. Quite chilling.
RK - Appraisal fraud is not new. If it was properly enforced, there wouldn't be enough prisons.
sideline villains--enablers who got off unscathed--appraisers and rating agencies. there oughta be a law.
ac, Rob D:
This seems like an opportune time for a 'nudge' to the currency markets to pop DX, triggering an oil sell off and equity pump...cynical scenario is that yesterday's sell-off was primarily to bat down TNX to help with the next cycle of selling IOU's to the world - need to check the calendar for UST bond sales.
Yen fueled jam job...
A law? There is.
Enforcers, there aren't.
Mom has no idea what to do right now and everyone should stop listening to her trying to act smart. This is all reactionary behaviour. What are they going to do with WaMu on the brink?
WRT Bair I would have thought the BS buyout story had stronger legs; i.e., there was no swap/SIV market in the 1980's that I am aware of and neither the number of individual institutional failures nor even the size of institutions that may fail seem central, the question would seem to be the extent of the counterparty risk and international consequence any given failure involves and, even if officials such as Bair refuse to publicly discuss it, that issue is probably the main impetus behind the ongoing policy initiatives.
I do not believe the bailout express will stop until all the ammunition is gone and we (a) are either far enough through the debacle to slog the remaining yards or (b) crash.
Not all companies are clueless...
No they aren't Chris! And that's why i'm saying that companies like MER deserve to go down if their management exhibits the behavior we just saw. The trust here should be zero, and no one should invest without a total housecleaning WITHOUT any packages.
Amazing.
"rich writes:
You ripped off the secured creditors who had a lien on that PC.
If every employee did that, then all these hedge funds that are loaning money to small companies at 18%, secured against specific property, would be screwed."
At the base of it, every economic system depends on hordes of little people who identify it with their own best interests.
I don't doubt that, given a chance, a whole lot of laid-off financial workers with no severance and few prospects would walk off with the company's laptop.
I too saw Sheila Bair on NewsHour last night. Her words and demeanor were telling. She qualified many of her statements with, "in my opinion," "that's what I think," etc. Her eyes were cast down much of the time. Mousy brown dress and hair. Neither her words nor her nonverbal communication projected confidence or authority. She'd be an easy mark at a poker table with all those tells.
C'mon, Sheila. Give it the old college try.
....would walk off with the company's laptop.
Are you kidding? Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down. With the stock worth nothing, working 80 hours a week for no OT, and the lying that went on then, we viewed it as our duty to clean house on the way out the door. Why, ipodius is still using custom note paper with dead companies on them at home to this day
Only if Perry is carted off to jail will this be a worthwhile takeover.
Letting that crook walk away with millions is tantamount to giving Bonaparte a statue.
The law should be amended that in the event of a bank takeover, the executives must NOT be informed early, and they should be detained until the evidence of their innocence is discovered.
This scumbag is stealing $6 billion from taxpayers. Essentially makes the LTCM scum look like schoolboys.
We need to see these thieves where they belong, prison. Otherwise it's all just a bullshit game again.
"The Iraq war was "done" to enhance the security of Israel..."
jim | 07.29.08 - 11:16 am | #
A born-again Christian, Texas oilman with no noticeable affinity for Jews kicked the butt of the guy who tried to kill his pa and who happened to be sitting on one of the world's biggest oil fields, and he did it to secure Israel???
Jim, jim, jim.
ipodius,
Heck there might even be a secondary market for that hard earned loot if the dead companies were reasonably well known!
(viz the Countrywide wrist bands lol)
For some reason, I don't think $120 bbl oil is the panacea for America's woes.
But the PPT wants you to believe it is.
Attack the Yen and Gold, and ramp ramp ramp.
What a charade.
ipodius --
Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down.
I see. So you are a petty thief, getting all self-righteous about the "behavior" of Merrill's management?
Do you shoplift, too?
The only thing I'll add here is that the top FDIC management obviously learned little from the 1980s S&L crisis. That is because they were never on the front lines and in the alternative dictated from their plush DC offices. And, when it was over they Riffed the front lines in the field offices (some only six months from full retirement benefits) and are still dictating from even plusher offices. Fuck them.
obligatory... Thank god it's not Friday.
ahhh, if only I had the petty paychecks and moral infallibility of Merril's management....
Treasurys fall; stocks, consumer sentiment improve
[snip]
More supply coming
Additionally, government securities are under pressure ahead of Wednesday's announcement by the Treasury Department about how much debt it will issue this quarter. Traders are bracing themselves for higher amounts of 10-year notes and 30-year bonds thanks to growing federal deficits.
Stone & McCarthy Research Associates expects the government to sell $17 billion in 10-year notes and $11 billion in long bonds next week.
On Monday, the Treasury Department said it expects to borrow $171 billion in the third quarter, compared with a preliminary projection in May of $112 billion. From October to December, the Treasury expects to borrow $142 billion.
[snip]
wow, pretty good day for the stocks, party on....
Gosh yes, if the DOW only adds another 300 points today, why it will be back to where it was a week ago!
mo' cowbell!
Stocks-Party on Thain! Party on Wayne!
Your now tuned in to Thains world! Rock on..
FFDIC, btw thanks for that very early Arizona hint last week.
The calculated lying by the 1% has been pervasive, with Thain's little dance only the most recent episode. It was responsible for a large part of this disaster, and worse, it is continuing. I know an individual who bought way too much house in a sun belt area. After resets he was paying over $5,000/mo. When I asked if he was foreclosed recently, he said "No, the bank lets me pay $2,500 a month and adds the rest to principal." So the bank is building the principal by $2,500 a month on a loan that will never repay, not only not recognizing the foreclosure, but actually recognizing income of $5,000 per month. I don't know how widespread this practise is, but it is scary. Here we go again!
Remarkable insight: "Lax Lending". Gosh this ought to be a revolutionary concept to teach a B Schools in the coming years.
Interfluidity is back with a good take on covered bonds:
Interfluidity :: Covered by whom? Bonds on what?
Nibbling SRS here... going into a big CRE earnings day tomorrow.
Well talk to you on Friday,
Did FDIC just cause a bank run aftr blaming a senator and blogs?
I want to go blog on Sheila's blogspot!
Nemo- "Do you shoplift, too?"
Nemo, I can tell you that, at this point in my life, if some POS owed me wages and wouldn't pay, he'd be lucky if all I took from him was the crap that wasn't nailed down.
Are you kidding? Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down. With the stock worth nothing, working 80 hours a week for no OT, and the lying that went on then, we viewed it as our duty to clean house on the way out the door. Why, ipodius is still using custom note paper with dead companies on them at home to this day
Hmmm.... I never walked off with anything. That seems kind of shady.
But I did get stuck with a bunch of licenses for software I was given as part of a contract for a (very) small company that suddenly went under.
My contact there went to work for Microsoft and when I asked him what to do he basically said "congratulations on your new software".
It was several thousand dollars worth of stuff IIRC.
FFDIC said
..."they Riffed the front lines in the field offices (some only six months from full retirement benefits)...
yeah clearly these guys are Godless and without remorse, so i agree, effemol
i want, and have lobbied for, and will continue to lobby for trials hopefully to occur if, and when, we get regime change.
Sheila and Ben are DOING IT in the next thread!
FDIC
Risk-Based Capital Rules
Notice of Proposed Rulemaking on Risk-Based Capital Standards: Standardized Framework FIL-69-2008
July 29, 2008
Summary: The federal bank and thrift regulatory agencies have jointly issued the attached Notice of Proposed Rulemaking (NPR) and are seeking comment on the domestic application of the Basel II standardized framework for all domestic banks, bank holding companies, and savings associations that are not subject to the Basel II advanced approaches rule. The FDIC will accept comments on the NPR through October 27, 2008.
FDIC: FIL-69-2008: Notice of Proposed Rulemaking on Risk-Based Capital Standards: Standardized Framework
Forbes
Mortgages
FDIC May Stall Paulson Mortgage Plan
FDIC May Stall Paulson Mortgage Plan - Forbes.com
FDIC warns Lexington [Kentucky] bank of unsafe practices
FDIC warns Lexington bank of unsafe practices - Business - Kentucky.com
Two IndyMac Customers Caught Unawares Offer Lessons For All Of Us
Page Cannot Be Found
All this talk about shoplifting is making me nervous.
Cold comfort: only 13% of banks on FDIC watch list fail
Posted Jul 29th 2008 8:51AM by Douglas McIntyre
"When it comes to the banking industry, the good news just keeps coming. The head of the FDIC says that only about 13% of the banks on its watch list of troubled institutions actually fail. Except for the banks that go out of business, how could it get any better? "We work with the primary regulator to give them extra care and attention, to nurse them back to health or to sell them off to another institution," said FDIC Chairman Sheila Bair, according to Reuters.
The comments side-step the issue that the credit crisis is getting worse. The IMF recently said that it could not see a bottom for the housing market and that financial companies would end up with $1 trillion in write-offs before the troubles pass. Bill Gross, the head of huge bond house Pimco, has essentially said the same thing.
The comment from the FDIC chief may be accurate based on a snapshot of the market today. It fails to acknowledge that the current watch list is only the tip of the iceberg."
Cold comfort: only 13% of banks on FDIC watch list fail - BloggingStocks
Are you kidding? Back in the day, when the tech implosion happened, we all walked off with any equipment that wasn't nailed down. With the stock worth nothing, working 80 hours a week for no OT, and the lying that went on then, we viewed it as our duty to clean house on the way out the door. Why, ipodius is still using custom note paper with dead companies on them at home to this day
I guess I was raised with strange notions. As a lad I was told that whenever I found cool stuff (i.e. a $5 bill laying on the ground at school), I was supposed to try and get it to it rightful owner.
The rule was, "If it isn't yours, then it isn't yours." Even in cases of what I thought would be just.
The other day, after checking out of the grocery line, I noticed a bulb of garlic in my cart that didn't get tallied. II thought about just walking out, but got back in line and paid the 57 cents. I don't think I do it out of virtue--I can't help it. It is just absolute habit after all those years of training.
I used to think that I'd get some cool reward someday, but now I know I'm just one of life's chumps. But chumpy is pretty cool when I go to brush my teeth at night. The guy in the mirror seems like a nice fella'.
kurtyboy --
Bingo. If you take something that does not belong to you, you are a crook.
What if the company "owes" you money? Guess what, they also owe other people money. That is why we have laws and courts. The kid stealing a pair of jeans thinks he is "entitled" to them, too.
Just because you are smarter or richer or whiter or less likely to get caught than some other thieves does not change what you are.
Lest we forget...
At 10:15 the night before IndyMac was shut down, The Bank Lawyer wrote on his blog:
"The search term that brought a reader to this blog this afternoon, a reader who, according to my site meter, was accessing the internet from IndyMac Bank: 'what happens in a thrift conservatorship'."
'Twas no surprise to the folken at IndyMac.
"kicked the butt of the guy who tried to kill his pa"
Totally false. The pampered child of rich, politically powerful folks took umbrage at the notion of a third world dictator being rude to his papa, so he sent his Imperial Army to depose of said dictator.
The Imperial Army suffered tens of thousands of casualties, and more than 4k deaths, and drained the Imperial treasury helping to impoverish the hapless citizens of the Empire, while killing untold thousands more of the dictator's country. The rich, pampered child suffered nothing more than a spill from his bicycle one fine afternoon.
rich writes:
Mhmmm. Ethernet ID and serial numbers in the hardware. Got licenses for that software? Hiding any transactions in the hardware you took with you in hopes it doesn't get found? Forensic accounting. More work to do sorting out the mess.
Not smart.
reuters: Large earthquake felt in downtown Los Angeles, no immediate sign of damage
FFDIC writes:
The only thing I'll add here is that the top FDIC management obviously learned little from the 1980s S&L crisis. That is because they were never on the front lines and in the alternative dictated from their plush DC offices. And, when it was over they Riffed the front lines in the field offices (some only six months from full retirement benefits) and are still dictating from even plusher offices. Fuck them.
great post. obviously you will not be re-signing up. not only did they let go ones on the front line they silenced the handful of analysts/economists that started warning about this crisis more than 5 years ago. fdic executives ignored these warnings and the more disturbing thing is that they all still hold their jobs. sadly, bair has not made one significant change among the senior executive ranks -- that should have been an easy move just given the bad morale they created let alone for the dereliction in duties from being asleep at the wheel while unprecedented exposures were being put on the balance sheets.
Maybe TGI Fridays could purchase all of the empty Bennigan's locations and reopen them as FDIC Fridays.
SurferDude,
Agreed totally. John Bovenzi was put in charge of IndyMac. He is one of the main DC managers responsible for the 2005 RIF. He and his second wife, Erica Bovenzi, also an FDIC employee pull down oh about $300,000 annually maybe more with their bonus. That's not exactly chump change for Federal employees. He is probably getting special pay for being in CA away from his homebase.
SurferDude,
I hate that term "asleep at the wheel or asleep at the switch" ... FDIC senior examiners and DC knew exactly what was going on. Even I with my narrow role as you call it knew what was going on. It was obvious to everybody former FDIC Chairman (AND BANKER) was acting like the fox guarding the hen house. There was a whole lot of clucking going on. How is the surf? Ross and I are going to do lunch in mid Aug. I owe him a 12 pak of Bud Lite...
SurferDude
I'm on a roll! Your point about replacing mgt reminded me to post this little known gem. During the Sept. 2005 FDIC downsized only the rank and file mostly at grade 12 and below. Vets and managers were exempt regardless of their performance or lack thereof. Managers of course are not in the union (NTEU) which represents the rank & file. Managers were offered buyouts/early retirements and had to take those by May 2005. Several of those retirees have now come back with full pension/benefits plus new grade 12 pay on 1 year renewable contracts. Once guy I know is being paid to fly home from TX to TN every two weeks. He told me he is making $125,000 with full pension and new salary. Plus they get generous per diem when out overnite on assignment. And free pizza!
This should read "former FDIC Chairman (AND BANKER) Don Powell...
Our Government | The White House
FFDIC writes:
SurferDude,
I hate that term "asleep at the wheel or asleep at the switch" ... FDIC senior examiners and DC knew exactly what was going on. Even I with my narrow role as you call it knew what was going on. It was obvious to everybody former FDIC Chairman (AND BANKER) was acting like the fox guarding the hen house. There was a whole lot of clucking going on. How is the surf? Ross and I are going to do lunch in mid Aug. I owe him a 12 pak of Bud Lite...
FFDIC | 07.29.08 - 3:37 pm | #
Fried, when you're right, you're right. I stand corrected.