Fed: Bear Stearns Assets Worth $28.9 Billion
Submitted by
CalculatedRisk on Thu, 07/03/2008 - 1:51pm (132 comments)
in
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 19 members and 147 guests online.
Recent Recommendations
The problem is they're not marking the assets to market. They're marking them to some estimate of what they would fetch in an "orderly" market. Who the heck knows that that means. The fact that they've written off 3% from they're fair value basis in April says it all though. There's almost certainly lots of trash in that basket for sure.
I'm sure FASB and SEC will ignore GAAP and The Fed will help adjust this to give a better picture of what the valuation really is. Yup, this is how you build trust and confidence in the market, i.e, you let people know that since your in for a penny, your in for a pound, then a ton, then so on and so on...
Meanwhile:
In June alone, employers got rid of 62,000 jobs, bringing total losses so far this year close to a staggering half-million -- 438,000, according to the Labor Department's report released Thursday. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.
Isn't it remarkable how the current value of the assets is juuuust high enough that the Fed isn't on the hook.
You have to love the Level 3-type valuation method they are using.
who ate my pony?
``orderly market,'' rather than a hypothetical forced liquidation."
The market would be orderly, but for THESE asshats...erm...assets. Friggin' geniuses.
I have half a brain...or mind...no warped mind, half a brain...and I could do better than that.
Cheers,
And who audits the Fed Res? The GAO?
``orderly market,'' rather than a hypothetical forced liquidation."
They are trying to keep it simple....
The Fed ate your pony!!!
Shocking.
They haven't actually told us what specific "assets" are in the portfolio, have they?
Anyone notice CNBC was reporting they didn't fall and that they were originally valued at $29 billion?
Clowns.
Looks like they've updated their story now though.
First!
Of course the Bard can help us here. If memory serves the lines were aproximately: "were it not for laughter, I should pity him..."
Owner Earnings,
"Anyone notice CNBC was reporting they didn't fall and that they were originally valued at $29 billion?"
What's a $100M between friends. It's not as if JP has a large ownership stake in the Fed. Oh wait...
Cheers,
Hell I bet by Monday morning the assets drop by another billion. And to think I could have put them on sale next to my Fourth of July Party Display.
And who audits the Fed Res?
LMFAO!!
BAHAHA
No really, baahahhaha
"First!
Currently Smoking Cannabis"
That's the best one on this thread so far. ROFL!
Cheers,
Have the fed's books ever been seen by the public? I think the answer is no.
Well the Liquor Commission comes in here all the time.
what does really "orderly market" mean?
just 3% reduction?! ridiculous
I am now going to reevaluate my book based on an "orderly market". Thank God for simple accounting.
Notice that the value is just about the amount JPM is liable for. Phew! I was worried that public money was going to be lost here.
IrvineResident,
"what does really "orderly market" mean?"
BS Bernutty: "Precisely what we say it means. Go away peasant, before I call the guards."
Cheers,
I wonder if we can look at how they valued these investments? I think employees of the fed visit here, maybe they can give us a run down of some of their modeling...
whooocouldanode!
crispy,
"I wonder if we can look at how they valued these investments?"
Yeah, and I wonder if I can get into the UFO hanger in Area51. Maybe some of their workers who read this could send me the keys.
Cheers,
you know there is going to be an attempt at a short squeeze on this one. Watch out for a pop then a double drop. Or we could just see selling since people have an extra day to read the report and not bullet points.
Fed Reserve Modeling Methodology
Monday 0900, Upper Management Meeting Room
Team is asked to value Bear Stearns assets. We can do this in a short week!
Tuesday-Wednesday
Fed workers bust their butts and put together a decent model of how much it all is worth. This model is grounded in current economic realities, and peer reviewed by "worker bees".
Wednesday 1600, model briefed to BB
BB is pissed because it shows he got swindled in taking the deal. BB suggests using the Wright Model B!
Thursday
Undercutting all of the previous work of the week, Federal Reserve releases a model grounded on the Wright Model B.
Viola!
The biggest problem, as I see it, is that we've been f***ed so bad for so long that our fighting spirit just is not there any more. I would get my self out of this market alltogether if I just knew how to do it. Somehow I think the bastards that got us all into this mess will manage to get out of it even richer and even more arrogant. And yes, thank you for asking, im drunk as a skunk.
IeFou,
"Somehow I think the bastards that got us all into this mess will manage to get out of it even richer and even more arrogant."
Isn't that the SOLE purpose of the Fed?
Cheers,
Totally off topic, but oh my god, this lunatic is STILL trying to convince people.
Is this July 4th guilt talking? Good gawd!
Why We Went to War in Iraq - WSJ.com
Didnt Tommy Franks say he was possibly the dumbest person he had ever met?
More gems from the article:
Treasury Secretary Henry Paulson warned dealers and investors this week they shouldn't operate as if Fed funds were ``readily available.'
Yup... you believe in a strong dollar too... heh...
The Fed also reported that the M2 money supply rose by $3.6 billion in the week ended June 23. That left M2 growing at an annual rate of 6.4 percent for the past 52 weeks, above the target of 5 percent the Fed once set for maximum growth. The Fed no longer has a formal target.
I don't know what this means... staflation?
Geoff,
Don't get me started.
No really, closed shop early today...had a few.
Cheers,
BB is pissed because it shows he got swindled in taking the deal. BB suggests using the Wright Model B!
He knew the whole time that these things would go down. Estimate on value of this crap is probably 14 billion when the market bottoms
who ate my pony?
Hate to break it to you, but... um... it wasn't really a pony, just a tarted up goat.
Quite delicious roasted with some rosemary...
Im officially closing now, since I just got myself sick. Time to get my drink on and think about when to put my JPM shorts on again.
He knew the whole time that these things would go down. Estimate on value of this crap is probably 14 billion when the market bottoms.
But "everything is priced into the market"... no? So the market knows this stuff is trash, right?
They don't need to look at the M3, look at China's currency reserves they growing 50% over this time last year.
Probably a little OT for this post but pertinent to the blogs basic focus.
My oldest son has been painting houses for about 20 years (He was part of a crew that repainted Dicky V's house - said he was a great guy and displayed no better-than-you attitude towards the workers). I talked with him about two years ago when he was working the Southern Gulf Coast part of Florida and recall him saying that the construction quality of the new homes he was painting was the worst he had encountered in his 20+ years in the trade. He was shocked that homes selling for high prices were being built as if they were in a shanty town.
Based on his observation, it is not unexpected that homes are being revalued based on their (much lower) intrinsic value.
Banks that made loans based on inflated values are just going to have to take their beating like a man.
Jim
agreeing with Misean about "Currently Smoking Cannabis"'s "first" call...
still roflmao!
YSLP,
"I don't know what this means... staflation?"
The Fed has lost control? BS Bernutty is a moron? Money is comming into M2 from less liquid sources as people run screaming to the hills as the economy begins to unwind?
I think 3. But wouldn't argue against 1 or 2.
Cheers,
Not true! Per Bob Brinker (every weekend show) he claims that "the money supply is not growing at all, we have no inflation..."
Bob Brinker has been dead wrong since October...
Inflation in in the eye of the beholder. Or the beholder's eye for the D&D fans.
Anyway, let take me as an example, I got my latest tax estimate for my home, it is about $30,000 down. I have to pay $3000 more for gas and food this year. I have suffered deflation in the amount of $27,000.
Re: ""orderly market""
That is the key buzzzz word for The Bush Coup right now, i.e, the bank failures according to Paulson are to be orderly, The Fed window and all that circus is orderly and of course, this bail out and abuse of anti-trust law is to be orderly with JPM. I think we hang them all in an orderly fashion!
Fed audit? Second aisle on left, next to Fort Knox audit.
Vader,
Happy 4th. Long time, no see post.
crispy,
"the money supply is not growing at all, we have no inflation..."
If it's less liquid assets being converted to more liquid ones it's not inflation. Watch M1 for inflation. Watch the others to see where the money is going.
Cheers,
The fed is not a public corporation and it does not have to sell the stuff. It can hold on to it until maturity if need be.
So it may yet break even, show a profit or minimize its losses, keeping in mind this was designed to prevent greater losses, it may yet be a good deal.
Aren't we all tired of being bernanked?
Send the man back to studying the great depression. Instead he will get a multi-million dollar job at GS or JPM.
tj,
"next to Fort Knox audit."
Good one. LOL.
Cheers,
Re: "Currently Smoking Cannabis"'s "first" call...
That sets the bar pretty fucking high!
Misean
Happy 4th to you. I lurk a lot. I was more vocal when I was the most pessimist bear here. Now everyone is more pessimistic so the fun is gone.
"orderly market"
The FED really in their own looking-glass world:
When _I_ use a word,' Humpty Dumpty said...it means just what I choose it to mean -- neither more nor less.'
Or, to paraphrase, "We value this pile of paper at exactly what we choose -- neither more nor less." Next week is another story. Probably less.
Merrill Lynch analyst John Murphy cut GM to "underperform" from "buy" and lowered his price target for the largest U.S. automaker to $7 from $28.
Good call.
Vader,
"keeping in mind this was designed to prevent greater losses, it may yet be a good deal."
For the banksters. The rest of us, without millions of slosh, that the chaos these things cause. Not so much.
You can't make a financial idiot whole, without making holes in others' wallets. You and I and every peasant are "others" in that statement.
Cheers,
Notice that the value is just about the amount JPM is liable for. Phew! I was worried that public money was going to be lost here.
If they (NY Fed) repeat this announcement timing, the next set of numbers should drop first week of October. 30 days prior to the election. This should be interesting.
warp 10,
"Good call"
ROFL.
Yeah...a 75% decline is surely an underperform.
Cheers,
"That is a loss of $1.1 billion for JPMorgan, and there are probably more losses to come - to paid by the Federal Reserve."
Here's hoping there are more to come - for rant vindication's sake.
herramienta de arrojar demonios
They will use whatever tools they have to destroy themselves; we should be thankful for the energy there are using!
Found an article (over at an Avian Flu website, oddly enough) about a major Chinese manufacturer of medical gloves declaring force majeure. The article says that many Chinese manufacturers are in a bind right now:
Medline Receives Force Majeure Notice From Hong Ray Enterprises
Vader,
"I was more vocal when I was the most pessimist bear here. Now everyone is more pessimistic so the fun is gone."
Now how is that being part of The Dark Side. You need to go light saber some ponies. And bunnies. And unicorns.
Just please keep the Beholders in their caves. I REALLY hate those things.
Cheers,
Jack Welch for president! he'll six sigma those losers out of the FED
Misean
I am a little bit more tolerant of the Bear Stearns financial elites bailout now that I can get 13 more weeks of UE. Its like after paying the $1000 bills to the rich they finally toss some small coins to the huddled masses of the destitute. It is amazingly like the actions that happened just before the great depression when the GOP passed out funds to bail out banks like water and blocked any aid to the unemployed.
CR,
This post has been up for more than an hour. Don't you think you should adjust the total in the headline down a few hundred million to reflect that?
Vader,
Sorry mate. Didn't know.
Cheers,
Vader,
I still find this crowd a tad bit more optimistic than I am, but the dark side is getting more popular by the day. I have mixed emotions about that.
This means that in an orderly market last March, the Bear was actually worth a lot more than $10,no?
Isn't this month Thermadore on the old French Revolutionary calendar?
Misean and pugg squaar
yeah...right on...all the way to the bottom of the thread and i'm still snickerin about
First!
Currently Smoking Cannabis | 07.03.08 - 6:32 pm | #
hey
maybe someday we could all meet at an undisclosed location, and all of us just pin our handle to our lapels and drink scotch....no pictures no true identities...just a chance to put a faces to the handle...and say what's-up
probably not so good an idea
guess this is why they won't let me drink at work
Does the game of deconstructing bogus government and media statistics prove that Foucault was right or wrong? I think it proves he's wrong. A coercive government and enabling media lack any credibility, and everyone knows it. They get to have inflation in Europe, but it is still an open question in the beltway. Ridiculous. The people in power look less powerful everyday. They may still blow everything up, but only because they lack imagination, heart and skill.
Some chump at amaranth lost a SIX(6) billion on nat gas swaps, to someone else on the street, and not much was ever said about it again.
now we have the worst credit market ever, jpm takes over bsc's folio of mutli billions, and it's only lost 1Bil?
oookkkkk
Didn't the feds say that the assets were worth 'much more' than 30B?
What happened to the Trillions worth the Derivatives? I guess we will never know.
jo6pac
My tinfoil porkpie hat sometimes wonders if the Fed has a direct source of funds via "neglected" Iraqi oil fields. That, and what kind of accounting is done on the Iraqi oil funds "saved" at the FRB of NY.
mock turtle,
"maybe someday we could all meet at an undisclosed location, and all of us just pin our handle to our lapels and drink scotch"
Actually every online gaming guild I've belonged to has done this. Never had a bad meeting.
Cheers,
I'll be in Socal in Mid August. I'd show up.
The FT's take on this is more informative :
Why We Went to War in Iraq - WSJ.com
But also makes you wonder a bit, since they bring up the point about being underpriced initially. So, maybe it was valued at $50 bil then, and now it's down to what they paid for it then, which is what they expected to pay for it in the future.
This way, when it collapses in value, it appears to be stabilizing. Neat trick, but what will they do next quarter for an encore?
"maybe someday we could all meet at an undisclosed location, and all of us just pin our handle to our lapels and drink scotch"
Good by me
Damn this copy and paste nightmare! Never works anymore!
FT.com / In depth - Fed values Bear Stearns assets at $29bn
That's better.
"maybe someday we could all meet at an undisclosed location..."
I'd like to join you, but if the location is undisclosed, I'm going to have a hard time finding the place.
I just saw McCain's wife at the store (on the cover of Newsweek) and I can't decide if she's been apparently preserved in a time capsule filled with oil, or if in fact, she's a vampire. Either way, they need to get her into some serious sunlight and wash her off -- but then again, maybe not? She makes Bush look like he got a great deal and I'd rather not go there...
wait a sec type slower - gotta get a scotch - brb
"Good by me"
Gotta be careful though. There's always the guild asshat mage who screws up:
"Majordomo Executus
Majordomo is the first truly difficult fight in the zone. If you've been struggling with earlier bosses, you might be scoffing at this claim, but after some practice you'll understand why he's more difficult. For the first time in the Core, everybody in your party needs to be doing their job. If one person screws up, the whole fight can cascade out of control to a wipe. So be on your toes, and expect to have to practice this a couple of times before everybody gets it.
Majordomo can't be killed himself. You'll offtank him for the entire fight. He has 8 minions: four Flamewaker Healers and four Flamewaker Elites. The healers can be sheeped until four minions are dead, at which point they can no longer be sheeped.
Here's the outline of the fight:
* Offtank Majordomo.
* Tank the four elites.
* Sheep three of the healers.
* Kill the leftover healer.
* Kill an elite.
* Kill three healers.
* Kill the remaining three elites."
The whole sheeping thing. And your his warrior.
But that aside...the get togethers are unusually fun.
Just saying.
Cheers,
heh , WoW raid commentary - sweet!
OT:
I am hearing rumors that banks are pulling the credit lines of small businesses without warning, like they were doing recently to homeowners with HELOCS. Anyone else out there hearing this ?
OT
a very bearish article for a joe sixpack site:
"how the bubble burst"
should really be
"how the bubble is bursting"
How The Bubble Bursts-Minyanville
energyecon,
"heh , WoW raid commentary - sweet!"
Yeah. Warrior to the core. Hated f'tards who weren't concentrating. My gear costs for death repair could choke a chicken.
Sorry OT.
Cheers,
It is very simple. When you allow a group of unelected jews to 'govern' the finance of a country, they will steal from the pockets of public to enrich their friends in moneylending business. That's how it happened for centuries. This time is no different.
hmmm....
Kid Clu writes:
OT:
I am hearing rumors that banks are pulling the credit lines of small businesses without warning, like they were doing recently to homeowners with HELOCS. Anyone else out there hearing this ?
Kid Clu | 07.03.08 - 8:44 pm | #
I'm also curious about this since I believe that this is the Real Systemic Failure that Bernanke is afraid of. When commercial banks start tightening credit on businesses then things get really ugly very quickly. Imagine if you will, the CFO / Controller trying to decide on making payroll of paying vendors when the LOC has been reduced or covenants severely tightened. It is one thing when your personal bank goes tits up but another altogether when your company cant pay you anymore.
Jesus has risen!
As our proprietors are OC-based, the clear choice is Antonello's, here. We can rent a tourbus and go view all the homes listed on Irvine Housing Blog, and all the Lennar and SunCal sites going down the drain.
Then we reload, give the driver a big tip, put c&c in charge, and head over the Tehachapis for a tour of Bakersfield.
I'm so in.
In case you haven't seen. Hat tip to Implode-O-Meter.
Hedge Fund claims it essentially wrote sham insurance to UBS --> FT.com / In depth - UBS in CDO dispute with hedge fund
Misean:
to sad they downsized from 40 to 25!!
still BWl is the bringer.. never seen AQ 40 past 1st but may with lvl 80
)
Shamans rule!!
Yoringe,
Stinkin' Shamans...think they're tanks. So do Pally's. Feelin' a bit Hancock at this point.
Warrior's gear or die. You guys get shite for free.
Gets under my skin.
Happy 4th.
Cheers,
This works on too many levels.
Dailymotion - Gar et gouille - un vídeo de Humor
i am resto shaman and i can tank normal 70
)
and i be annoying in PvP, warriors are just slow cans :-)9 happy 4th for you..
Yoringe,
"nd i be annoying in PvP, warriors are just slow cans"
Or they can destroy the class. Which is what they seem to be doing.
It's their game. But to have a class almost totally dependent on gear and melee and then f them over seems to signal a demise.
Kinda like CDO holders.
Cheers,
Auditors Aid UBS Probe, EU, Toxic CDOs: Compliance
Auditors Aid UBS Probe, EU, Toxic CDOs: Compliance (Update1) - Bloomberg.com
Expanding an investigation that yielded a guilty plea by a former banker for UBS AG, the Internal Revenue Service will enlist six of the biggest accounting firms to help detect foreign banks whose U.S. customers may be evading taxes through secret accounts.
The IRS scheduled a July 8 conference call with the auditors to discuss how they can aid the agency in uncovering foreign banks that break their promise to report U.S. customers' identities and earnings in their accounts.
you got fear, spellreflect and other stuff, so dont complain
in a 2v2 arena arms warrior/ resto shaman is quite good...
Maiden Lane... sort of like 'down the garden path"?
Really, does the Fed have any credibility left?
btw, may Ben should play PC games too like Fed Simulator 2008 or so , you might be better of then...
SS writes:
The problem is they're not marking the assets to market. They're marking them to some estimate of what they would fetch in an "orderly" market. Who the heck knows that that means. The fact that they've written off 3% from they're fair value basis in April says it all though. There's almost certainly lots of trash in that basket for sure.
That is exactly it. In fact, that is the same fraudulent reporting practice that Fannie Mae, Freddie Mac, all the investment banks and practically every other deposit bank are engaged in. They all duck out the rear door like cowards running from accountability on the loose definition that fair markets = orderly markets. When asset values were exploding upwards, there certainly wasn't any contention that the markets weren't orderly. Only on the way down is the definition micro-surgically examined. The Fed is simply another bank engaged in the same scandalous fraud. The fact that it's the Fed only shows there is simply no threshold that the pigmen will not cross in order to keep the cover-up and deceit going.
ECB says no more rate increases
Misean,
Yeah if you had a tight raiding guild that would be less of a prob, but my intermittent playstyle (and old school nerd factor) led me to LOTRO...apologies for add'l OT
Bagged the scotch idea, running with an Ozzie Shiraz to allow for sustained effort lol
Yoringe,
"you got fear, spellreflect and other stuff, so dont complain
in a 2v2 arena arms warrior/ resto shaman is quite good..."
OK, but I'm mostly PvE. And that is getting whipped out. And I'm geared and speced that way.
Used to be I could tank mostly fury...and do well. Now I have to tank defensive. And battle as a tank is shite.
But battle as pvp is necessary.
I think you can still pvp as fury...but can't tank.
I dunno, just a bit depressed about the changes. Warriors now seem extremely slotted, while other classes have much more play.
Cheers,
energycon
how is LOTRO? cant imagine a game with 5000 legolas and no pvp..
energy,
"Yeah if you had a tight raiding guild that would be less of a prob, but my intermittent playstyle (and old school nerd factor) led me to LOTRO...apologies for add'l OT"
any good?
Cheers,
Misean
yeah same with my rogue.. you spec PvP or PvE, you could do what ppl in my guild doing getting diff sets and respec a lot..money is quick to get now.. is it some kind of Inflation?? Ah prices of 25 % since may too
)
Misean you could roll a alt too, as Warrior may try a SP or Lock:-))
yoringe, Misean:
Works well for me - work and life have been cutting waaaaaaaay into my game time in the last 2 years - bought in on the lifer option to LOTRO and figure I am past the breakeven in another 4 mos or so...
Do miss getting my @ss kicked in PvP though lol - have not spent enough time in the Monster play option (how you can PvP in LOTRO)
Loved the Beholder ref's earlier Misean, old pencil n paper D&D geek, lived that sh!t once upon a time...it all started for me with a Frosh english required reading of "The Hobbit" with LoTR for extra credit.
All apologies for OT, but Mise your ref to money changes intrigues me - attempt to hammer the gold farmers?
Most awesome event IMNSHO was a bug, don't know which server but a disease was killing all and running wild - some tried to heal, others T-ported to spread etc. - wish I had seen rather than just read about.
Also, for LOTRO I have a much easier time now that 4 year old daughter wants a "bow shooter girl" in Legolas land without PvP...
Energy:
it was some bug that killed all above lvl 50, i heard too that blizz teamed up with medical researchers to see how ppl react to this kind of plague in the game to find applications in RL ..
i am still happy with WoW next exp is with attckable buildings
) and i like stuff like AH and such its realy like a RL mirror sometimes 
)
The valuation came conveniently AFTER June30 so JPM doesn't get the mark for Q2. Maybe the Fed can CREATE an orderly market where they buy assets above par so they can start the make-believe mark-ups Kudlow keeps screaming about.
pathetic.
its a "Free" market dont forget...
the best thing ever..lol
I'm a little bit scared about this gaming talk. I'm starting to get a vision of everyone looking like the main guy from Knocked Up. He's funny, though, so no big deal.
BTW, barely, it is pathetic. And grotesque.
Did the federal reserve set up Indymac with direct deposit?
sorry guys,
Went and made dinner.
Wow has killed gold farming.
I have two alts...a mage and rogue.
Still, warrior has always ben my big got to.
I'll stop WOW shite now.
Maybe play my rogue.
Cheers,
"The Federal Reserve said the portfolio of Bear Stearns Cos. assets it accepted as part of the firm's takeover by JPMorgan Chase & Co. is now worth $28.9 billion"
bullshit
Tittle tattle, tittle tattle I shall be late for the hunt.
Dobre Noche...
Spakolnya noche...
The valuation came conveniently AFTER June30 so JPM doesn't get the mark for Q2. Maybe the Fed can CREATE an orderly market where they buy assets above par so they can start the make-believe mark-ups Kudlow keeps screaming about.
erm.. the Fed marked the value of the paper down by $1.1B. When does JPM actually have to cough up the $1.1B ? If this stuff is "hold until the market is orderly again" then it could be a very long time.
For some reason I had the view that until the (Fed held) assets are actually disposed of, JPM doesn't take the hit.
I'm one of those who is still a pencil & paper nerd. The computer gaming does nothing for me, at all. Then again, combat has always been my least favorite part of role playing.
"The valuation came conveniently AFTER June30 so JPM doesn't get the mark for Q2. Maybe the Fed can CREATE an orderly market where they buy assets above par so they can start the make-believe mark-ups Kudlow keeps screaming about."
Barely/anyone,
First, the rule for estimates is "knew or should have known..." so in theory, JPM will have to mark them down. Too bad we can't bug the office on that conference and hear the, the, the statements from Corporate Counsel and others.
Second, I'm not much of a TV guy. Is Kudlow really influential? I watched him a few times and it seemed he just made things up. He can't balance a statement with a counterpoint, even to argue that counterpoint away.
and, lastly. What is Kudlow screaming about? Is he outraged at attempts at markups by banks??
Thanks,
I don't watch Kudlow much because I thin he is worthless, but I think he is screaming because he wants ice cream.
lama, Kudlow is a teevee troll...
This is really disgusting! How dare the Federal Reserve name Bear Sterns by name and indicate that there might be losses on their books! WON'T SOMEBODY THINK OF THE CHILDREN!? The Federal Reserve has really limited the possible responses by the Federal Reserve by publicly leaking this information. I for one am BESIDES MYSELF WITH DISGUST!
Kudlow is a Rep shill. He gets his talking points from McCain's handlers. Its too bad because he is a good Economist IMO.
But is he a good economist?
What tequila with worm too passe? We got D&Ders starting just a lil early. My guess is they store their tiny warrior figurines in the scotch bottles. When they hit the bottom they pull 'em out and play. Odd! But hey, game after game of bridge is wacky too.
[lama, Kudlow is a teevee troll...]
Oh yeah! What FFDIC said.
But seriously, Kudlow is totally delusional and really thinks the writedowns will be written back up soon. He should be committed to an institution immediately. Don't believe me. Let me dust off my favorite Kudlow link!
The Housing Bears Are Wrong Again
As we all know the marks are massively understated. That's why there are always more. They should go to pennies but instead pennies are shaved because lenders need to scrape together capital before they can take marks. They are all insolvent otherwise. Death by 10000000000 cuts...
My apologies if a comment has already made this connection, but I think it needs to be made. The equity shareholders of BS came out with 10 Usd a share. That money should also have been used to offset any losses in the book.
One other thing. I believe it's possible (but have no idea, so take this with a big grain of salt) that there are swaps in the BS/Fed portfolio, and these swaps can have a negative value. That is, the Fed may be on the hook for more than 29 B USD, since the value of the portfolio could become negative.
Barely/FFDIC,
Heh, heh. I found myself Googling "there is no real estate bubble" just to read the 2005-2006 articles by various....experts.
Hey, not bad! That portfolio of trash outperformed the stock market!
K
Jpm got capital ratio exemptions wheb they did this deal. Therefore the capital hit will not be forthcoming anytime soon. Especially as thd portfolio begin to turn sour