Every day that goes by without the EOTWAWKI weakens Paulson's claims. If the markets don't tank next week, Main Street will be even less inclined to buy into his spiel.
Okay Guys, I found a list of all candidates that voted for and against the plan. If you are with me (and hate the bailout), please vote for the people who voted against it and vote out the people who voted for it. We need to pass this along, get some viral traction. I don't care if a republican or democrat said aye. They need to be kicked out!
The link is in my URL. Just click on my Homepage to get there. It's a link to a marketwatch page with the tally. Make a copy in case it goes down and get it out there!
Un-effin-believable. I normally don't freakin' care about Cramer. But today he's not only puffed up about being right but talking about what to hold and what to buy while stock prices crash. This is weird. He is telling his followers to sit tight because they already pulled out. Sad.
Thanks Sven. All of my reps voted FOR the bailout. In my earlier calls to their offices, I think I conceded too much. I just told them that if we have a bailout, we need x, y and z (i.e., a No equity, no deal message). Now that there is hope for no bailout, change of message. New message is NO BAILOUT.
serf alan greenspend writes:
bloomberg, asia reporter-
"everyone is running for the hills, the worst of all possible scenarios"
err, thanks for helping my shorts, but you probably don't want to panic the sheeple.
Once the sheeple start to panic, nothing will stop them from going over the cliff. A panic is by definition irrational, it just has to play itself out. Throwing money into it will not help once it gets started.
SCONE...it's not really the markets tanking that is the end of the world. That would be a symptom of the credit freeze and massive shutdown of businesses reliant on lending that would be the end of the world. But does anyone really think that that would just happen overnight? There are plenty of firms that planned ahead for this day, and they will be ok. And some that went way overboard on debt need to disappear. And some, should get some help so we can work our way through the recession we've surely had coming to us for many years but assiduously tried to avoid. But frankly, this plan isnt the way to help out. And it died as it should. Not sure how much clout Hanky has left.
Soon after Sarah Palin was elected mayor of the foothill town of Wasilla, Alaska, she startled a local music teacher by insisting in casual conversation that men and dinosaurs coexisted on an Earth created 6,000 years ago -- about 65 million years after scientists say most dinosaurs became extinct -- the teacher said.
I wish the House Dems would this next time insist that the GOP produce an equal number or larger to the Dems votes for the bill. Not just a majority of both parties.
No equal number, no bill.
Then the Dems can start of a real rework of legislation from this week until the week of 20th Jan, and be ready to move several bills that re-do regulation from ground up, bust up the megabanks created by this GOP consolidation, and do some targeted laws for the non-rich class and society as a whole.
The market also went down today despite a huge action by Bernanke this morning. My first reaction to it was "man, that's a lot of money". Don't remember the exact details.
... Henry M. Paulson Jr., the Treasury secretary, has bestirred himself to take serious notice of the credit problems faced by some very big lenders. He wants to create a bailout fund in which banks that still appear sound buy some of the debt of the troubled players like Citigroup.
THE deal, as far as I can tell, is that they buy the most secure levels of debt that Citigroup and others own, get large fees and allow Citigroup and the others to keep the debts off their balance sheets. But there are at least two giant issues here.
One is that its a bit too predictable that Mr. Paulson would basically pooh-pooh the subprime problems until major Wall Street powers got in trouble and then presto! swing into action. It might have been inspiring had he stepped up to the plate when smaller players like home buyers were getting burned, but thats not really his style.
The other is that its hard to see what good the maneuver would do. Suppose Citigroup or some other lender has a perfectly good loan to sell. Why does Citigroup need a big Treasury-sponsored organization to sell it? They can sell it to anyone right now. The problem is with the questionable loans. And they seemingly are not part of the plan from the Treasury.
Pablo - each house of Congress has its own version of a bill. If a bill passes both houses, but there are differences between the bills, the differences are resolved in conference. So a bill passed by either house can still be modified.
Let's hope the bailout just dies in Congress.
Today was a great day for the American people, our Congress finally stood up and said no more to our Wall Street masters.
Interesting bi-partisan collaboration: the democrat congress majority and the republican administration are working against the republican congress minority. That's the spirit of non-partisan government, isn't it?
O-Joe
chairman m writes:
Let's hope the bailout just dies in Congress.
Today was a great day for the American people, our Congress finally stood up and said no more to our Wall Street masters.
chairman m | 09.29.08 - 6:20 pm | #
I agree ... it's rather insulting to the American public to have not been heard the first time.
Article 1. Section 7. All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
@Calculated Risk (in previous thread): "... I was just watching and wondering what is next."
CR, you mentioned before that you had received "hundreds" of alternative plan suggestions.
As long as we are just waiting to see what happens, perhaps you could seed us with some of the better ones, and we could work them over to see if we could come up with some consensus "better" ideas.
It seems like the bail out plans currently on the table will well not go through.
And it might make for better reading than some of the chuff we are wading through these days in the comments ...
Soon after Sarah Palin was elected mayor of the foothill town of Wasilla, Alaska, she startled a local music teacher by insisting in casual conversation that men and dinosaurs coexisted on an Earth created 6,000 years ago -- about 65 million years after scientists say most dinosaurs became extinct -- the teacher said.
Anonymous | 09.29.08 - 6:15 pm | #
All that really matters is that Putin and Chavez coexist with us.
Geoff writes:
SCONE...it's not really the markets tanking that is the end of the world. That would be a symptom of the credit freeze and massive shutdown of businesses reliant on lending that would be the end of the world. But does anyone really think that that would just happen overnight? There are plenty of firms that planned ahead for this day, and they will be ok.
It's all the companies that routinely use short-term credit that are in trouble. Such as companies that finance inventory, payroll, use factoring, futures (such as agriculture) or other credit vehicles. That means manufacturing, agriculture, import-export, shipping, etc. In other words, most of the productive economy. Very few companies are so rich they have no debt, and there are not enough debt-free companies to support an economy. That's why, if the debt markets completely freeze up, it could start to hit jobs pretty fast.
As long as we are just waiting to see what happens, perhaps you could seed us with some of the better ones, and we could work them over to see if we could come up with some consensus "better" ideas.
A bailout plan wiki. That approach would be awesome.
Agreed. This is a lesson in the perils of autocratic policy. Hank is going to spend his every last iota of political capital getting a plan that's now both woefully inadequate and hopelessly obsolete.
Keep fighting, folks. The enemy is showing clear signs of exhaustion.
You are yachting without a life preserver.
A man you've never met before steps behind you and shoves you overboard as the boat drifts away.
The man who shoved you yells, "You're going to drown! Quick, throw me your wristwatch! It's the only thing that can save you!"
Do you?
If you support this bill, I presume the answer is "Yes."
``We need to work as quickly as possible; we need to get something done,'' Bob Studebaker told reporters in Detroit. `We believe that our car that we worked so hard to develop, is a car that works. And we need a car that works.'
Since they intend to make another run at this bail-out, I would think that we phone/mail/fax our congress reps/senators requesting a full blown committee hearings bring in economists, etc. This is necessary in order to educate the public and the congress people...
@scone, there will still be credit available to solvent companies. But the rates will be higher. I don't see a complete train wreck.
Full disclosure: I am 15% net long as of today's close. We may go down more but we'll bounce back to at least these levels at least one more time before the final bottom (if this trip down is not it).
Since they intend to make another run at this bail-out, I would think that we phone/mail/fax our congress reps/senators requesting a full blown committee hearings bring in economists, etc. This is necessary in order to educate the public and the congress people...
Anonymous | 09.29.08 - 6:28 pm | #
Actually take a look at the DOW futures...only off -29 from over -600 earlier....
The Fed and the Treasury have not made their case that there is indeed a crisis at hand. And most folks on the ground need to see more banks close and massive layoffs before it is to be believed a crisis at hand.
So is there or is there not a crisis at hand? If so, explain. Seriously. And what exactly did the Fed and the Treasury tell or show the House Finance Committee, the President, et al, that scared the Bejesus out of them? China calling in our debts? Russia cutting off oil supplies? Saudis send along more folks on planes?
Or the fact the we are in a massive deflationary spiral which is going to set off a lot of triggers against a lot of complex and largely unregulated debt instruments that neither the Fed or the Treasury really understand and the unwind is going to be very very fast and very very bad? Anyone?
Im with you on that Scone - just saying, it was THAT , rather than a market tank, that they were concerned about. I just still dont buy that they plan they have pushed is the right one to address that possibility.
Also, to all on the board here - who has evidence, direct anecdotal, other than dryfly, of this crunch hitting places that they are used to dealing with, either as a business partner, or a customer? Id like to get a better feel for how this is playing out. As far as my world goes, so far, everything is as normal, just your typical recession. I hear that demand is slow from businesses, but Ive yet to hear that any of them are about to shut down because demand is ok, but financing is impossible.
And this is not to deny it is happening, Id just like to here more stories from the front lines.
I can't post at work, but was able to lurk somewhat.... Our co. stock is officially under half of what it was. Supposedly, we are a stable co. - yeah right-o on that!
CT is very financially oriented - and not just Stamford. Hartford is all insurance. Will whole cities get laid off?
Optimistic-Joe writes:
Interesting bi-partisan collaboration: the democrat congress majority and the republican administration are working against the republican congress minority. That's the spirit of non-partisan government, isn't it?
O-Joe
Optimistic-Joe | 09.29.08 - 6:22 pm | #
Also, at these hearings, not only solutions to our current situation, but our society's debt problems, SS, Med Care, Military costs, budgets and etc. Finally, upon discussing our problems, long term goals.
This country needs to have a national conversation about our current situation. If we late until later, it will never be done.
This country needs to have a national conversation about our current situation. If we late until later, it will never be done.
Anonymous | 09.29.08 - 6:31 pm | #
if they can vote on something without the
ultimate price tag, I'm all for it.
Anonymous writes:
Also, at these hearings, not only solutions to our current situation, but our society's debt problems, SS, Med Care, Military costs, budgets and etc. Finally, upon discussing our problems, long term goals.
This country needs to have a national conversation about our current situation. If we late until later, it will never be done.
Well, I can't go out and take a photo, but here are the locations: (Note the Wachovia doesn't show up in google's yellow pages, but Wachovia's own site locator shows it.)
Based on the Dow Jones Wilshire 5000 Index, almost $1.3 trillion was erased from the value of U.S. stocks today. That's the most ever for that index and almost double the size of the bailout authority Paulson is requesting from lawmakers.
Ha! Nevermind the fact that it was down over 300 before the vote took place.
An interesting explanation was posted yesterday. Paraphrasing: The double secret threat is that congresscritters will not have any money left to spend to purchase their re-election or spend wildly on their favorite programs if the credit system does not remain adequately lubricated. This could mean disaster for their carefully constructed political machines.
Market tanked 7,700 in 2003 and so did interest rates...Hence, meltdown of 2008. They want to reinflate a broken system so it can come down harder on our kids. Shame on the bastards!
"Wisdom Seeker writes:
@scone, there will still be credit available to solvent companies. But the rates will be higher. I don't see a complete train wreck."
But that's the problem-- we don't know who's really solvent, because we've entered the hysteria phase of the panic, where all debt appears to be toxic. This could take out an unacceptable percentage of perfectly good companies, like people being crushed at the exits when someone shouts fire in a crowded theater. In the aftermath, there might not be enough of an economy left to keep employment at anything like decent levels. This is the EOTWAWKI scenario: the market simply loses it's mind, and kills the good with the bad, indiscriminately. This is what Paulson, et.al. are really afraid of, and that's the fear of God thy are trying to put into Congress.
"you don't need to - just hit street view and it pans...."
I tried that but the resolution just isn't there. The locations are actually set back a few hundred feet from the intersection proper. If street view had Wilson included, it'd be a different story.
FWIW the WaMu is in a small building (where the Panasonic store used to be) directly across the driveway from Wachovia, and the Downey is inside the Albertsons right next to the Wachovia.
SPX p/e is P/E =14.05
SPX Div Yield = 2.49%
10 yr bond yield = 3.632%
Then>> April 01, 2008
SPX p/e = 17.40
SPX Div yield = 2.49%
10 yr bond yield = 3.5455
As you know, in valuation we use the inverted p/e to determine yield, hence, use EPS of $78.74/$1106.42 = 0.07116, then add div yield of 2.49%, which is 9.606%.
Take 9.606% yield and compare to 10 year Treasury yield which is 3.5455%, i.e, a difference of 6.061%.
It is possible the SPX is 6% overvalued, hence, we saw this fall 8.81% today, but yet it is overvalued by another 6%+/- , which would bring us to about a SPX near 1040. Very possible IMHO and to be honest, the same thing I called for several months ago, with a DOW closing in around 9000 or below.
Nonetheless, this is a matter of over-valuation and at that point, it would make sense to not panic and to look at future value.
The bullshit with The Paulson bailout, is that a bailout is not needed and that the market will re-set, as long as we re-gain confidence, which IMHO, mens getting rid of Paulson, Bernanke, Cox, Bush, etc. We can't play bailout and keep the same people running the nuclear reactor that is melting down! These drunks need to be taken out today and replaced with people that will help us limp along, until honest Americans can be placed back into the control rooms!
My guess is that most citizens have already priced in some market downturn and some more bank closures. Unless things get substantially worse then passage becomes more problematic - the world didn't end, so what's the big deal.
DO NOT trust PE ratios right now. I'm betting more than 80% of the S&P miss earnings for at least the next 2 quarters. So the 'E' is way too optimistic right now.
You know we're in trouble when:
Sept. 29 (Bloomberg) -- Punch Taverns Plc, the U.K.'s largest pub owner, fell 26 percent to a record low in London trading on speculation the company may be struggling to find tenants for about a fifth of its properties.
Obama told voters at a campaign event in Denver, Colorado, that it's important to "stay calm, because things are never smooth in Congress."
"There are going to be some bumps and trials and tribulations and ups and downs before we get this rescue package done," he said. "I'm confident that we are going to get there, but it's going to be a little rocky."
"Barack Obama failed to lead, phoned it in, attacked John McCain and refused to even say if he supported the final bill. ... This bill failed because Barack Obama and the Democrats put politics ahead of country," he said.
DO NOT trust PE ratios right now. I'm betting more than 80% of the S&P miss earnings for at least the next 2 quarters. So the 'E' is way too optimistic right now.
My thoughts too, are they forward looking PEs or historical. And who are the analysts and when did they make the call.
An entire generation of investors are going to need to learn new gimmick strategies
Dogs of the Dow, lol
The only way the full bill gets passed before the election recess, is if something like Visa has to halt operations
Something small will get passed for Paulson to nibble on and the full bill + some will get passed post-election when no one is afraid of losing their seat.
"Who said anything about steaks? We're talking squirrels here."
I have a particular fondness for raccoon. But I'll settle for squirrels. BTW I'm from the south where both are a delicacy. I think Richard Shelby would like to see this culinary delight spread in popularity up where the Yankees live...
It's their buddies ... Citi, JP, Goldman, BAC, Wells ...
Thats' why they are scared ...
mmckinl | 09.29.08 - 6:43 pm | #
I think they suspect nearly everyone was lying about solvency, just like people lied to get loans they could not afford. I think they think the whole system is rotten from top to bottom. If they are right, we really are screwed.
I've just been informed that because congress didn't pass this bill foreign investors will be pulling out tomorrow...I told him he was a day late and a few trillion short with that prediction...
Yah, the E is overvalued going forward, but not that much. I think another 6% down and then we have a recession, things slow down, people stop being stupid for a few years and then, all is well. The thing we don't need, is to have Paulson and Friends Of Angelo take $700 Billion and keep us buried with inflation for 15 years! That is the point!
@Scone. This is what I am trying to figure out. CNBC, etc say JPM, BAC, etc. are chosen few. JPM just gourgedon WAMU's toxic subprime disaster. Aren't they the disaster now? What's next for them?
Bernanke is epicly stupid. Low rates are good for borrowers, not lenders.
Seriously, who wants to extend credit at negative real rates. We need higher rates. The low rates are a desperate attempt to force risk taking and prop up asset prices.
No way that could work for long. Price fixing NEVER works long term.
We've seen such massive swings in the stock market lately, this seemed extreme but still in line with what we've seen. Sure they voted against the bailout, but if there were any measure of transparency in financials right now, the risk would have been priced in and we'd be done. As it is, we are left wondering how many banks are insolvent, who they are, and how long they have to hang on until everyone else notices. The smallest bit of good news, the Dow is crazy high. The slightest rumor about a bank, cliff diving.
I was pretty insulted when I read the story about one congressman shouting out "Dow down 600 points" while the voting was open. Seriously, are we going to pass legislation with long-term effects based on what the stock market does on a given day? People aren't trading on fundamentals right now, it doesn't "mean" anything. Why don't we start interpreting tea leaves?
"Inauguration day in February? Is there a transition period between him and the next secretary of the treasury?"
It's the period from the day after the election until inauguration day. The old guard in theory gets the new guard up to speed before it goes. Somehow, I think the Bushies will be of minimal help to the new guys, whoever they are. But if Paulson really is trying to save Wall Street as it is, he'll probably work straight up to the end and beyond if asked. And he might be asked.
Pablo is right, the Constitution requires all tax and spending bills must originate and pass the House before going to the Senate. That's not to say they won't use a gimmick, like "amending" the paulson plan on a Senate bill that's already passed the House, but it would be a major affront to legislative tradition. There would actually be legislators in both parties who would have a problem with the Senate voting first on this.
"Nonetheless, this is a matter of over-valuation and at that point, it would make sense to not panic and to look at future value."
only over-valuation related to ridiculously low rates.
no reason that 3 month gumbint paper shouldn't be 10% as opposed to 0.3% . we still have a doubling of the m3 in the past 6 years to absorb despite some awesome deflationary forces abounding currently. maybe that's the next phase of this bear.
Der Kommandant Weather Helm writes:
"Who said anything about steaks? We're talking squirrels here."
I have a particular fondness for raccoon. But I'll settle for squirrels. BTW I'm from the south where both are a delicacy. I think Richard Shelby would like to see this culinary delight spread in popularity up where the Yankees live...
Der Kommandant Weather Helm | 09.29.08 - 6:46 pm | #
Funny you say that. someone ran one over in front of my house. got home today and put him in the garbage. i should have thrown him in the oven w/a few potatoes...
Inauguration day in February? Is there a transition period between him and the next secretary of the treasury?
EvilHenryPaulson | 09.29.08 - 6:48 pm | #
Is it possible that part of the reason banks won't lend to each other is that the overnight rate is still being held too low, not allowing for risk premiums to be demanded?
Might explain why Fed didn't lower last Tuesday. Just a hypothesis - probably wrong though.
Software sales to auto dealer industry..1200 clients..
Dealer body is hurting but still selling cars...
Bill Heard Auto Group situation was wrong vehicles, wrong pricing, bad locations and fiscal mismanagement...
Lenders have tightened credit but still buying credit worthy customers....
Dealer body needed to contract....
Too many dealers eating each other up on low volume of sales...
You can still get 0% 60 month loans direct from captives..
This is a debt problem as Jas has ment'd..People are in debt...Now their pti and dti are too high..
Kinda of similar to 90's
Recent sampling of credit scores over last 3 months..
July-648
August-625
Sept-605
Credit destruction is here.
high cc balances, cple late scores, high dti and pti are main culprits...
this is not armageddeon...It just makes more sense...
If we are legislating to the level of the DOW we are done as a country, DONE.
Get the right things done for the right reasons. Hell the no vote today just bought a lot more of those assets with the 700 Billion. In that sense alone it was worth it.
"News of the current investigations into suspected misconduct surrounding recent accounting practices came just after the announcement of a major management shakeup at Freddie Mac on Friday.
The companys three business lines Single Family Credit Guarantee, Multifamily Sourcing and Investments and Capital Markets will now report directly to Freddie Mac CEO David Moffett. The realignment eliminated chief business officer Patricia Cooks role, and Freddie Mac announced she would be leaving the company as a result. Leaving as well will be Timothy McBride, who oversaw the companys political and lobbying activities Freddie saw its political activities halted when it was placed into conservatorship.
Also leaving will be CFO Anthony Buddy Piszel; the GSE said it would begin an immediate search for his replacement."
Nice to see someone get canned at one of these two companies.
I wonder where the exact sources of Paulson's political blunder were located - apart from the demerits of the plan, the political strategy was a disaster.
In any normal administration, paulson would shop his plan with top political strategists and the President. The Secy of treasury might propose the scheme, but decisions about what might fly politically andhow to play it would be made by others.
If it was Paulson's own political blunder, that could only be because Bush and Cheney and their inner circle let him call such shots. More likely, Bush et al completely misread the politics and let paulson walk into the lion's den.
I think I may have underestimated the incompetence of the Bush Admn. I am in shock.
So is it official that the House will keep voting until they vote "correctly"?
The only way to have a bailout at this point is to come up with a new plan. If they put the same thing up again, it's going to be defeated by a greater margin.
"I wonder where the exact sources of Paulson's political blunder were located - apart from the demerits of the plan, the political strategy was a disaster."
maybe the fact that the guy who appointed him has 30% approval has something to do with it.
gop reps are running as hard as they can away from shrub, mccain and the national party. they like dc. nice meals, entertaining conversation, all the stuff they don't get in their boring podunk home districts.
Can someone please explain to me how this will work. A lot of large banks just bought more toxic assets and now cannot sell them to the Fed. How does the Fed keep them going?
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itnot me.' "
"We're in this moment, and if we fail to do the right thing, Heaven help us," he said.
"I've heard that there are enough votes in the Senate to pass the bill (probably on Wednesday night), and Paulson is probably hoping that passage in the Senate will put additional pressure on the House."
CR - my understanding is that all revenue type bills must originate in the House of Representatives (I think Dodd alluded to that at one point).
I don't think the Senate can vote to approve before the House. If we have any Congressional parliamentarians, please weigh in.
Thanks CD, this is the kind of stuff I like to know about. I only have feelers out in some particular businesses, and as a consultant, I can only be so pesky and intrusive. I fully agree that we went into credit overload, the whole shebang here - businesses, consumers, etc. The unwind is unavoidable, but it isn't clear exactly how it proceeds and whether it is super chaotic and catastrophic, or just necessary and long and unpleasant. What Id like to see addressed in a bill is how we plan to help a company that is just experiencing typical slower demand for a downturn, that has used standard practice for everyday financing, and how THAT particular lending has shut off. I mean, if it isnt an irresponsible borrower, what would be the best way to help unfreeze that lending. It has not been made clear to me in any way that the plan weve been looking at so far, in any form, would be the best to address that type of issue.
Wonder what we get next to look at. So far, Im kind of pissed that a week plus ago this kind of thing had to be passed immediately or it was credit lockdown. Funny that isnt happening. Makes me feel that someone held a gun to our heads and turns out, we said pull and it was blank.
The only way to have a bailout at this point is to come up with a new plan. If they put the same thing up again, it's going to be defeated by a greater margin.
Nobody | Homepage | 09.29.08 - 6:58 pm | #
I would guess so UNLESS there really is a crisis - not a made up crisis.
McCain just spoke and said NOTHING--except to add that Obama injected partisanship into the process. haha.. that's so funny.. up is down. down is up...
Several wild dogs arrived unexpectedly at the event due to his lack of fixadent.
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itnot me.' "
***** why can't they just say: "our mail is running 90% against this thing" and end this charade?
DAWG writes:
@Scone. This is what I am trying to figure out. CNBC, etc say JPM, BAC, etc. are chosen few. JPM just gourgedon WAMU's toxic subprime disaster. Aren't they the disaster now? What's next for them?
DAWG | 09.29.08 - 6:50 pm | #
I have no idea. If this were a natural ecology, and the big fish were eating the little fish, all would be well as long as the little fish didn't have a lot of toxic mercury in them. If they did, they'd eventually poison the big fish, and the top predators that eat the big fish, like bears and people.
It seems to me that Paulson et.al., are working on the "House assumption:" EVERYBODY LIES. We are testing that hypothesis now.
all true and obviously relevant, but then the admn should have factored that into their design of the plan and its roll out. they didn't.
politically weak people are not necessarily incompetent. the bush admn is both.
i'm still curious to find out (sooner or later) whether Bush just handed the whole portfolio to Paulson or had his team play around with strategery again.
From Bloomberg:
Some specific Treasuries have been in such demand that traders were willing to lend cash for no interest overnight to obtain the securities as collateral. Other trades have been left uncompleted, or failed.
Failures to deliver or receive Treasuries amongst dealers rose to $578 billion in the week ended Sept. 17, from $54.2 billion the prior period, data on the Federal Reserve Bank of New York's Web site show. Treasury fails reached $2.3 trillion in the week ended April 2, the highest since May 2004, and averaged $176.7 billion a week since July 1990.
Commissar 4822 writes:
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itnot me.' "
***** why can't they just say: "our mail is running 90% against this thing" and end this charade?
Therein lies the clue, the drop today has eased public opinion with an almost even chance now.
If i have to wager, if it stays this way a bill will be passed by friday.
There is one thing that a lot of people who so quaintly refer to "J6P", "the little people", or the "Flyover states" seem to forget when they scream that those morons don't get it and are just plain ignorant. Main Street may not have a lot of the old stores left (the stores now are on the by-pass next to the Wal-Mart) but one thing still there is the "Farmers and Merchants Bank of MainStreet", established 1917.
And in that bank this week, they have a poster, hand written, that informs their customers that they do not have, nor have ever had, any of the things that this bailout was directed towards. That's next to the poster that advertises the rate ranges on their loans and cd's.
When the mongers came to sell them another story, the ones who sold them the fear that terrorists were going to bomb their school, and the fear that Iraq's WMD would be visited upon them, and the promise that Iraq would by this time be a wonderland of Starbucks and democracy, this time the people just shook their heads: fool me once, shame on me...
What is dying here is not banking, and not lending, at least not yet. What's dying is the capital markets-based business models of the big banks, seduced by the fees of the derivatives and the opiate of global capital flow.
Where is Wells Fargo in the zombies list? Wells, of course, is, in spirit, at least, really still NorWest, based in that flyover town, Minneapolis. Do you think their name is all over the counterparty reports of the hedge funds? Where's SunTrust, who is so stogey that it held the Coke stock it earned on the KO IPO until this year, based in that plane-change town of Atlanta? Marshall and Ilsley? First Omaha? Think their Tier 3 capital needs to be phonied up for them to survive?
One time, more than a couple years ago, I found myself in Greenwich. Having taken the train up, one of the guys with whom I was meeting, an MD (managing director, not doc) of a bond firm, had to go to Hoboken, and offered me a ride back down. As we drove out of town, past the mini-estates, he said "condensation on the pipes." I looked puzzled, and he said that the builders of these houses had constructed the plumbing of the economy, a hundred years ago, but that, now, the residents -lawyers, accountants, brokers, salesmen-- made their livings off the drops that formed on those pipes from the flows inside them. And that, he said, couldn't stand forever, as the pipes were running drier every year.
OK, since I don't use any credit in my businesses, I'm genuinely curious: Is business credit really impossible to get at this point? Does anyone have any direct experience recently with trying to roll a loan or factor receivables?
To: To Our Retirement Plan Sponsors and Participants
From: Brian Comer, President of Wealth Management Institutional Distribution
Date: September 19, 2008
Re: Current Market Conditions and ING
The unprecedented turmoil in our financial markets has prompted many of our retirement plan
customers to ask questions about what this situation means for ING, as their retirement plan
service provider. We would like to provide you with facts that underscore our confidence about
our capabilities now and in the future.
First, we would like to set aside what has been a source of unnecessary stress for a number of
customers. Some plan sponsors and participants have been confused because our companys
name ING is similar sounding to the corporate name of AIG, the American International
Group. As you know, AIGs recent liquidity issues have been the focus of much recent publicity.
Please be assured that ING Group and AIG are entirely separate companies and are not affiliated
in any way.
More importantly, we want to provide some perspective on our approach to managing our
business. INGs discipline in managing our risks and capital have been our guiding principles for
doing business, and they have served us particularly well through the liquidity crisis. Specifically:
INGs capital position meets all internal targets and is well in line with the
requirements of regulatory and rating agency requirements.
On September 16, 2008, Moodys affirmed ING Groups rating at Aa2, stating
that the rating reflects the global franchise and the combined credit strengths of
the group's various operating entities, from both banking and insurance.
On September 2, 2008, Fitch affirmed ING Groups rating at AA- with a stable
outlook, based on the groups strong banking and insurance franchises,
satisfactory earnings, moderate risk profile and adequate capital.
In December 2007, Standard & Poors affirmed ING Groups rating at AA-, stating
INGs strengths are excellent diversification and competitive position, resilient
performance in the current market environment, strong capitalization, leverage,
and financial flexibility and proactive risk and financial management.
ING has experienced limited direct impact of the credit and liquidity crisis,
reporting a direct impact on profit of EUR 44 million after tax in the second
quarter of 2008.
ING is not immune to the market environment as our securities portfolio has experienced lower
valuations which are reflected in our shareholders equity. As we are long term investors with a
solid capital position, these lower market prices do not have a material effect on our business.
Seriously, though, thanks. Wish I were full-time self-made independently wealthy like CR so I could spend more time on it.
Nemo | Homepage | 09.29.08 - 7:02 pm | #
Be careful for what you ask... he's like chained to the thing now.
Besides then you'd have some nut spending his waking hours to be 'first' in your comments... wouldn't want that would you.
Whatever happened to "banking system is sound", "economy is sound", etc., etc. from the same person who now wants $700B to plug holes in things that are sound.
In my letter to Rep Mike Thompson (who voted no) I wrote:
"The political fiasco lies at Paulson's feet. His arrogant and imperial three page draft of the bill that was released two Saturdays ago caused the first stirrings of rage. I think the bill was likely dead from that moment on. How could there be any compromise with such a flawed document in the first place? Before Congress attempts to legislatively address the bank insolvency problem again, I suggest you do so with a completely new slate -- and that means with Paulson no longer in the picture. Call for his resignation."
and several banks in Britain in the last week . The Spanish banks are in trouble .The Euro is coming apart at the seems .The federal Reserve has over lent and this bailout is to help the other fraudster banker . The tax payer was still put on the potential for 10's of billion thru FDIC bailout of Wachovia . So how much did the drop in oil save main street today . 700 billion more will turn into the TRILLIONS ....A crash now mich save TRILLION IN THE LONG RUN . There over a trillion in HELO loans alone. With all this bad news the markets should be down. Without the 950 billion the fed already spent this would of happen months ago . Why kick the can down the road .. That's why I'm against bailouts .. Nationalized the banking system , reduce taxes thru less laws , free up the prison system ,stop bull shit lawsuits , reduce tax code , legalize pot (work 100s billion) ...
I don't care about the bailout everyone is talking about. It doesn't solve the problems of de-leveraging and withholding of credit.
I am concerned that the Federal government is not keeping its powder dry, and any future attempts to provide order to the market will be pathetically weak.
Also, to all on the board here - who has evidence, direct anecdotal, other than dryfly, of this crunch hitting places that they are used to dealing with, either as a business partner, or a customer? Id like to get a better feel for how this is playing out. As far as my world goes, so far, everything is as normal, just your typical recession. I hear that demand is slow from businesses, but Ive yet to hear that any of them are about to shut down because demand is ok, but financing is impossible.
Geoff:
Spoke with acquaintance this weekend who's an equipment mechanic. He's cross-trained on all kinds of equipment but is now losing hours.
His employer - an equipment dealer/repair facility - is now subsisting solely on work for only the largest companies and has been told by many customers that once their particular job is done, they have nothing - nothing - on deck for the next job. Layoffs coming.
EngineerJim writes:
One thing for sure, Pelosi should resign -- she hasn't risen above being a partisan hack.
EngineerJim | 09.29.08 - 7:14 pm | #
I would bet the Dem majority is pretty happy with her after today. Like it or not.
There is only one way to remove her Jim - take back the 'Majority'. Think that's likely to happen? It won't if they keep getting 'out maneuvered' like they did this week.
He'd be smarter to craft a new bill. What House member who voted "no" wants to turn around and vote "yes" for no particular reason and then have to face his constituents? Paulson isn't, it seems, very saavy.
It's time for all of us to up the ante with Paulson. We all need to fax & e-mail the Treasury Department, and tell Paulson that if his bailout bill passes, we the taxpayers, who own a large majority of the money invested in Wall Street through our 401K plans, mutual funds, and other stock holdings will cash them in, because we will no longer support a rigged game. Then we will see if he has the cojones to call our bluff.
We're definitely having layoffs in my area-- Oregon is pretty dependent on the housing industry. That includes sawmills, door and window manufacturers, cabinet shops, landscapers and garden suppliers, tradespeople, etc. Some builders are also going bankrupt, with resulting leins. Real estate is extremely slow, mortgage companies folding. Noticeable asset dumping of cars, boats, RVs, etc. My bank has tightened requirements even for those with excellent credit.
$$ Industry during the coming depression: dem front group..ACORN type thing. It's gauranteed that even in an economic national emergency you will get your fed gov't subsidy increased.
On another note, I'm VERY encouraged the Fed opened a 84 day lending window by 150 billion. This is what we need for working capital credit. The problem is that it should have been opened, or at least announced, a few weeks ago, so the banks could set up to translate that window into working capital loans. As it stands, there's probably not enough time to do much before rollover tomorrow. Gosh, it's almost like they were trying to manufacture a crisis.
bearly writes: "Sure. If I got $300k off on a home purchase from a convicted felon nothing would rattle me either."
If one wants to play politics on an finance and economic blog at least get your facts straight.
They actually paid 300K above their initial offer and the sellers did not make any special deal with the Senator or his wife.
"The Obamas submitted three bids: $1.3 million on Jan. 15, 2005; $1.5 million on Jan. 21; and $1.65 million on Jan. 23, according to a copy of the sale contract shown to Bloomberg News."
Are you kidding? The dems are THRILLED about Pelosi today. It was the GOP that desperately wanted this legislation to pass, the thing is, they wanted it to pass with the dems name all over it. It's a bill that helps their friends but their constituents hate it. But Pelosi cock-blocked them hard and now they're in shock.
OK, how could today's rejection be used to edge ourselves towards a different "system." Too many people assume that we MUST save "the financial system." I'm not happy with what this system has been doing for the past 8 years. How can I - or some more powerful group than I - nudge it in a different direction?
We are assured the IB "model" is dead - even though today's activities seemed to be directed at keeping it alive.
So, there will be less leverage - not 30-1. Maybe 10-1? What does that mean? What does it mean if interest rates go up, and people start putting money in savings accounts? Does that mean more money is available for lending?
I don't care if they are happy or not. The point is she is not a leader in any sense of the word. Just a hack.
EngineerJim | 09.29.08 - 7:27 pm | #
She is proving to be an outstanding leader - leader of her caucus in the House that is... THAT is her #1 job. She isn't Speaker if (1) her party isn't majority & (2) her caucus doesn't voter her #1. You're just a fool if you don't see that. They all get it.
She is the same kind of leader GOPers have put in that chair for years (and quite successfully too)... a partisan that takes care of their own first.
One way to remove her and only one - take away her majority.
Paul Krugman on today's vote: "So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
As a friend said last night, weve become a banana republic with nukes."
Some posters here seem to have joined that growing group of crazies. Just saying.
Credit crunch banker leaps to his death in front of express train
Mr Stephenson is believed to have taken his own life after succumbing to mounting personal pressures as the worlds financial markets went into meltdown. Link
Thanks homedad43. So you'd chock that up to a demand issue for them, I guess, but maybe something upstream is a financing issue that is cascading to that, right?
What I hope to hear more stories about is the direct financing problem that is forcing firms to shut down investments, or just close down altogether. And then, what the heck are the options for reviving that credit well. That is really what we need to focus on.
The crisis is asset deflation plain and simple. If you are/were levered up multiples of 10 and the assets (real or paper) backing you are dropping in a hurry... you are toast.
So the problem is systematic and we are in a deflationary spiral without a bottom in sight. Unless what Citi paid for Wachovia or JPM paid for WAMU is in fact the bottom. If it is, a lot more banks are going down as is a major portion of the financial services sector and anything tied to consumer lending, commercial and residential real estate, and discretionary spending by consumers....oh yeah...most of our economy.
Can anyone out there answer a simple (if stupid) question: Where did the money go?
I understand that this "crsis" is a result of banks handing out money to people who cannot or will not be paying it back. OK, that part i get. And, the "lendees" spent the money on houses and other stuff. OK, I get that, too.
But where did the money go? All the folkis that sold the houses and pocketed the money - what did they do with it? If they are saving it - why do banks need money?
Thanks - be snarky if you must, but if someone can answer the question, would be greatly appreciated.
What I hope to hear more stories about is the direct financing problem that is forcing firms to shut down investments, or just close down altogether. And then, what the heck are the options for reviving that credit well. That is really what we need to focus on.
Geoff
~~~~~~~~~
Only one way ...
bank cleanup ... get rid of insolvent banks and re-capitalize solvent banks with tax payer equity ... no trust , no transactions - period
.
the 'money' was largely notional value that never existed in the first place. the problem is that the contracts related to credit went bad, meaning people called in some of that imaginary money, which put pressure on similar constructs based on imaginary real estate equity.
right CD - I dont think bad credits should be getting more handouts at this point, seeing as that is what got us here. So this part of the process really shouldnt be avoided. It's when good credits cant get what they need, then we've got a different issue. But of course, any economic downturn of significant magnitude can kill demand enough to make a formerly good credit into a bad one, as their revenue stream dries up and makes their ability to pay suspect.
What if, we cut our SPX earnings by 6% to $74,02 and then decrease our SPX yield by 6% to 2.341% and then take down the Treasury yield 6% to abouts 3.32%, i.e, and for fun, we take down the SPX by 6% to 1040 and start over and say that future value will equal a forward SPX P/E of 14.05 which is an E/P of 7.11% added to div yield of 2.34 = 9.45% subtracted from a Treasury of 3.33 = 6.12% overvalued future value.
So, what if, worst case here is that people freak out and the market drops 6% this week and then another 6% within the next qtr, leaving the SPX around 980? Within that range, IMHO, I think there is generational opportunity to buy into a recovery, but beyond stock valuations, there has to be investigations, there has to be a political power shift, and there has to be confidence restored in the form of real reform. A few trillion in bailout fun money, will create 15 years of debt and inflation that will sink America into the dark ages. The pain and the blood in the streets will be the sound of SIFMA dying and water being pour'd on the melting witches who need to evaporate into thin air.
I love ranting and raving here, but the key is to not panic and recall movies like It's A Wonderful Life -- where George talks people into not being panic'd and to remain calm to get through this, because Paulson isn't buying, he's selling bullshit like Potter, the same bullshit that Buffett is pushing and Gross. Don't be fooled by these con artists, remain calm and wait for opportunity! Let those suckers bleed in the streets and then, take advantage of them, when they hurt!
She is the same kind of leader GOPers have put in that chair for years (and quite successfully too)... a partisan that takes care of their own first.
I am from California and was happy when she took over as speaker (even though I'm not a Dem). However, she has not moved above the ghetto of being a partisan.
whitehouse deputy press secretary is disingenuous.
Every time he talks about the need to "remove the illiquid assets" i want to punch him in the face. When me says it is "ironic" that the market dropped in value more than the bailout package, and therefore the bailout package is vital, I want to throw my shoe at the screen.
Public works contracting is a train wreck in Cali AZ work is booming, so much I just purchased a new tractor.
As for credit, I havent really seen any pull back. Wells & BofA are begging to up credit lines. I put the new tractor on a 4 year, 0% plan but what was interesting is they had no problem financing this in a holding corporation with no D & B history and no personal guarantee.
It may dash your hopes for that nice warm feeling called Schadenfreude, but the Masters of the Universe are smarter than the people they left behind at the investment banks. Their hedge funds have blown up here and there, but unlike the investment banks, they are still very much in business. They have hurriedly pulled themselves into defensive positions inside their shells, like turtles. Their Armageddon, if any, will not come for two more days, which is to say, Tuesday, Sept. 30...
[Kaboom writes:
Are you kidding? The dems are THRILLED about Pelosi today]
LOL! You guys are really delusional. Please take a moment to look at every headline and photograph you can find. Pelosi is standing in front of the camera frightened and shocked like a deer in the headlights. Not a big confidence builder.
BTW - I am voting for my DEM rep in Nov. A NAY vote against Pelosi...
As to where the money went, it never existed in the first place. When someone buys a house for $500k, the seller walks away with $500k and the buyer gets the house. If a year later, no one is willing to pay $300k for the same house, then at least $200k of value evaporated.
"the 'money' was largely notional value that never existed in the first place. the problem is that the contracts related to credit went bad, meaning people called in some of that imaginary money, which put pressure on similar constructs based on imaginary real estate equity."
BGates, ummmmmm, I guess this shows why I am out of my league here. Are you referring to banks lending money they don't actually have in their possession based on the fed letting them borrow said money based on their deposits? At some point, doesn't actual money show up to the sellers of the homes?
do you think the tanned one, as a key player in the setup, feels the slightest bit of remorse as he watches the news on his huge boat in the Caribbean?
I agree with your analysis of Pelosi, though calling her "outstanding" is a bit strong
joe shmoe | 09.29.08 - 7:37 pm | #
From the POV of 'partisan head of caucus' - she has done a very good job holding that sack of cats they call 'democrats' together. That may all change tomorrow but this vote was a tough test... and frankly they out maneuvered the GOP.
That bill was awful yet the 'media' has painted it as a 'rescue' & 'GOP' killed it. What could be better for Dems?
GOP leadership should have come out like heroes for 'saving America' and spun it to their advantage but instead their leadership is already back tracking saying the will work with majority & take another shot... WTF?
If Pelosi is REALLY smart she'll subtly move the goal posts and we'll still not get a bill... but have moved the agenda farther 'left'.
Traders aren't the only ones who think like 'criminals'.
It is satisfying in a very primitive and probably short-sighted way to know the Wall Street was stunned and despairing today. I was sorry I couldn't have watched CNBC.
To see the arrogant Master of the Universe "reeling" and reduced to hysteria - I'm not yet evolved enough NOT to enjoy this, deeply!
Cowboy up!
Mulligan economy.
Dow at 3600 might also put some pressure on the house.
The beast that just wouldn't die. Anyone have a stake to drive through the heart of this thing?
Desperate times call for despots.
"we need a plan that works.' - Paulson
Uhhh yeah. Should we hold our breath or wait until Cramer tells you what to do?
He must be stopped. NO BAILOUT.
Maybe I'm wrong, but doesn't the House have to move this first since it involves revenue.
I admit I don't know for sure, and will defer to those in the know.
PPT pulled a fast one on the market today...
fire Paulson.
save the economy, not the banks.
Dear Mr. Paulson,
Your service is appreciated. Your successor will build upon your efforts. Enclosed please find your personal effects...
Do something, any thing. Perhaps the thing to do is for Don Paulson to spend more time with the "family", if you get my drift.
Too late the bubble has already popped.
"crispy& cole writes:
PPT pulled a fast one on the market today..."
They stayed home and watched CNBC. Ate some Canadian popcorn.
I think the Senate will pass if the market continues to tank...lets ask Sebastian he has been spot on his predicitons.
maybe if they propose a plan that doesn't shaft the taxpayer like the previous one would have, they might have a chance.
Anyone else find it truly amazing that any republican would break ranks and vote as their constituents wanted rather than the way BushCo wanted?
Every day that goes by without the EOTWAWKI weakens Paulson's claims. If the markets don't tank next week, Main Street will be even less inclined to buy into his spiel.
Okay Guys, I found a list of all candidates that voted for and against the plan. If you are with me (and hate the bailout), please vote for the people who voted against it and vote out the people who voted for it. We need to pass this along, get some viral traction. I don't care if a republican or democrat said aye. They need to be kicked out!
The link is in my URL. Just click on my Homepage to get there. It's a link to a marketwatch page with the tally. Make a copy in case it goes down and get it out there!
bloomberg, asia reporter-
"everyone is running for the hills, the worst of all possible scenarios"
err, thanks for helping my shorts, but you probably don't want to panic the sheeple.
The senate is politically charged as well as it ties the hands of the next President. I really wonder if they'll bring it up there or not...
Unfortunately, both of my reps (CA) apparently support it. I'll write again but they're really immune to their constituents -- especially Feinstein.
Un-effin-believable. I normally don't freakin' care about Cramer. But today he's not only puffed up about being right but talking about what to hold and what to buy while stock prices crash. This is weird. He is telling his followers to sit tight because they already pulled out. Sad.
Why are the daily gyrations of the stock market effecting major legislation?
It's pathetic to see people PANIC!
Calm down people!
Comrade Bagholders,
What is Paulson hiding? He needs to come clean on just what exactly happens if he doesn't get bailed out.
Nostrovia,
SS of course she is she's got some coin(z) riding on AIG...
Free market capitalism won for a day!
The market may have been down 777 today, but I have a little more respect for the house republicans now (they are building off a low base).
Downey up again today. What's up with that?
Actually I think DiFi is against it. Will have to look up and see if Boxer is for or against.
Thanks Sven. All of my reps voted FOR the bailout. In my earlier calls to their offices, I think I conceded too much. I just told them that if we have a bailout, we need x, y and z (i.e., a No equity, no deal message). Now that there is hope for no bailout, change of message. New message is NO BAILOUT.
serf alan greenspend writes:
bloomberg, asia reporter-
"everyone is running for the hills, the worst of all possible scenarios"
err, thanks for helping my shorts, but you probably don't want to panic the sheeple.
Once the sheeple start to panic, nothing will stop them from going over the cliff. A panic is by definition irrational, it just has to play itself out. Throwing money into it will not help once it gets started.
SCONE...it's not really the markets tanking that is the end of the world. That would be a symptom of the credit freeze and massive shutdown of businesses reliant on lending that would be the end of the world. But does anyone really think that that would just happen overnight? There are plenty of firms that planned ahead for this day, and they will be ok. And some that went way overboard on debt need to disappear. And some, should get some help so we can work our way through the recession we've surely had coming to us for many years but assiduously tried to avoid. But frankly, this plan isnt the way to help out. And it died as it should. Not sure how much clout Hanky has left.
I'm still a little floored that we lost 100 points on the S&P.
BTW, hey Sven, the link you gave did not work. But this one does:
Roll-call of House votes
This seems on topic: Palin Claimed Dinosaurs And People Coexisted
Palin Claimed Dinosaurs And People Coexisted
Soon after Sarah Palin was elected mayor of the foothill town of Wasilla, Alaska, she startled a local music teacher by insisting in casual conversation that men and dinosaurs coexisted on an Earth created 6,000 years ago -- about 65 million years after scientists say most dinosaurs became extinct -- the teacher said.
I wish the House Dems would this next time insist that the GOP produce an equal number or larger to the Dems votes for the bill. Not just a majority of both parties.
No equal number, no bill.
Then the Dems can start of a real rework of legislation from this week until the week of 20th Jan, and be ready to move several bills that re-do regulation from ground up, bust up the megabanks created by this GOP consolidation, and do some targeted laws for the non-rich class and society as a whole.
Toss that Paulson/Bush crap into the incinerator.
The market also went down today despite a huge action by Bernanke this morning. My first reaction to it was "man, that's a lot of money". Don't remember the exact details.
Comrade Misean writes:
Comrade Bagholders,
What is Paulson hiding? He needs to come clean on just what exactly happens if he doesn't get bailed out.
Nostrovia,
Comrade Misean | 09.29.08 - 6:12 pm | #
Exactly - and what the hell that $700B buys. My guess is not much other than 'bankers'.
Well, two out of three banks at our local "Banking Hall of Shame" are now toast.
Corner of Harbor & Wilson in Costa Mesa: Wachovia, WaMu, and Downey all right next to each other.
Batter up!
Courtesy of someone at Krugman's blog, this from -- a YEAR ago?
EVERYBODY'S BUSINESS; The Gloomsayers Should Look Up - NY Times
... Henry M. Paulson Jr., the Treasury secretary, has bestirred himself to take serious notice of the credit problems faced by some very big lenders. He wants to create a bailout fund in which banks that still appear sound buy some of the debt of the troubled players like Citigroup.
THE deal, as far as I can tell, is that they buy the most secure levels of debt that Citigroup and others own, get large fees and allow Citigroup and the others to keep the debts off their balance sheets. But there are at least two giant issues here.
One is that its a bit too predictable that Mr. Paulson would basically pooh-pooh the subprime problems until major Wall Street powers got in trouble and then presto! swing into action. It might have been inspiring had he stepped up to the plate when smaller players like home buyers were getting burned, but thats not really his style.
The other is that its hard to see what good the maneuver would do. Suppose Citigroup or some other lender has a perfectly good loan to sell. Why does Citigroup need a big Treasury-sponsored organization to sell it? They can sell it to anyone right now. The problem is with the questionable loans. And they seemingly are not part of the plan from the Treasury.
The American people have spoken. It's really annoying to have this come up again. Let's make sure they lose by a bigger margin.
Der Kommandant Weather Helm: Please take photos.
Japan:
Stock Futures on Bloomberg
Stock market is something like $20 trillion total, no? So 7% decline is somewhere's near $1.4 Trillion drop in "value", no?
This seems on topic: Palin Claimed Dinosaurs And People Coexisted
Small banks = mammals
?
I've got a better idea. Congress should pass a law to eliminate the TAF and all these other bastard programs the Fed has invented.
Paulson wants a re-do on his $700B? Whaaa! At least give us a few days to celebrate our victory.
Remember that the DOW went down to 7,700 in 2003.
Comrade Bagholder dryfly,
Yeah, we desperately need a bailout but refuse to tell you why. Just gimme!
Nostrovia,
Nemo writes:
I'm still a little floored that we lost 100 points on the S&P.
I'm not - I'm surprised we didn't see DOW down a 1000 or more. And I'm not short (some cash, some bonds, some long)...
"I'm still a little floored that we lost 100 points on the S&P."
This is all about valuation and re-setting bonds and yields!
Yeah, when I see the DOW retest it's lows in 2003, then I'll start to think about getting back in. It's a long-trend double bottom.
Well, thank heaven we have a large supply of treasury bills we can sell for liquidity at the treasury.
What would we do if we actually had to go and buy them instead of create them from thin air?
Revive at will, the markets are now stampeding south.
If they go slower it will allow some of the common folks to get out, at least mitigating their damage.
Oh yeah, right, this is a huge buying opportunity.
For solvent companies.
Someday this war's gonna end...
It wasn't all bad in the markets: CSB finished up on the day!
Wonkette : Wonkette Canned Soup Index (WCSI) Soars!
Pablo - each house of Congress has its own version of a bill. If a bill passes both houses, but there are differences between the bills, the differences are resolved in conference. So a bill passed by either house can still be modified.
Let's hope the bailout just dies in Congress.
Today was a great day for the American people, our Congress finally stood up and said no more to our Wall Street masters.
Comrade Misean writes:
Comrade Bagholder dryfly,
Yeah, we desperately need a bailout but refuse to tell you why. Just gimme!
Nostrovia,
Comrade Misean | 09.29.08 - 6:18 pm | #
You just summed up my #1 complaint against all of this - why the hell nobody is screaming SHOW ME at them blows my mind.
The Senate should stay out of it and make the House bite first. Interesting political chess!
Whatever dryfly... if we don't give them money, they'll be a financial smoking gun in the form of a mushroom cloud.
PANIC! It's when you make the best decisions.
Wednesday might be too late...
Greenwich Time
By Tom Wolfe
Small banks = mammals
Yes and BushCo = asteroid.
Interesting bi-partisan collaboration: the democrat congress majority and the republican administration are working against the republican congress minority. That's the spirit of non-partisan government, isn't it?
O-Joe
chairman m writes:
Let's hope the bailout just dies in Congress.
Today was a great day for the American people, our Congress finally stood up and said no more to our Wall Street masters.
chairman m | 09.29.08 - 6:20 pm | #
I agree ... it's rather insulting to the American public to have not been heard the first time.
Pablo --
Article 1. Section 7. All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
@Calculated Risk (in previous thread): "... I was just watching and wondering what is next."
CR, you mentioned before that you had received "hundreds" of alternative plan suggestions.
As long as we are just waiting to see what happens, perhaps you could seed us with some of the better ones, and we could work them over to see if we could come up with some consensus "better" ideas.
It seems like the bail out plans currently on the table will well not go through.
And it might make for better reading than some of the chuff we are wading through these days in the comments ...
Hmmmm, I was saying down another 1000 points and I'm back in, but I dunno.
I think Paulson really in the depth of his non-soul, actually believes that what is good for GS is good for the nation.
But yeah, I'd sure like to know what the catastrophe was supposed to be.
Soon after Sarah Palin was elected mayor of the foothill town of Wasilla, Alaska, she startled a local music teacher by insisting in casual conversation that men and dinosaurs coexisted on an Earth created 6,000 years ago -- about 65 million years after scientists say most dinosaurs became extinct -- the teacher said.
Anonymous | 09.29.08 - 6:15 pm | #
All that really matters is that Putin and Chavez coexist with us.
Geoff writes:
SCONE...it's not really the markets tanking that is the end of the world. That would be a symptom of the credit freeze and massive shutdown of businesses reliant on lending that would be the end of the world. But does anyone really think that that would just happen overnight? There are plenty of firms that planned ahead for this day, and they will be ok.
It's all the companies that routinely use short-term credit that are in trouble. Such as companies that finance inventory, payroll, use factoring, futures (such as agriculture) or other credit vehicles. That means manufacturing, agriculture, import-export, shipping, etc. In other words, most of the productive economy. Very few companies are so rich they have no debt, and there are not enough debt-free companies to support an economy. That's why, if the debt markets completely freeze up, it could start to hit jobs pretty fast.
As long as we are just waiting to see what happens, perhaps you could seed us with some of the better ones, and we could work them over to see if we could come up with some consensus "better" ideas.
A bailout plan wiki. That approach would be awesome.
"All that really matters is that Putin and Chavez coexist with us."
Commissar 4822
~~~~
huh ?
Too late the bubble has already popped.
Agreed. This is a lesson in the perils of autocratic policy. Hank is going to spend his every last iota of political capital getting a plan that's now both woefully inadequate and hopelessly obsolete.
Keep fighting, folks. The enemy is showing clear signs of exhaustion.
I've been predicting the bottom at around 8,500 for around 18 months now.
All we need now is another 18% down and I'll be buying in. In fact, I just started to work on my shopping list today.
You are yachting without a life preserver.
A man you've never met before steps behind you and shoves you overboard as the boat drifts away.
The man who shoved you yells, "You're going to drown! Quick, throw me your wristwatch! It's the only thing that can save you!"
Do you?
If you support this bill, I presume the answer is "Yes."
``We need to work as quickly as possible; we need to get something done,'' Bob Studebaker told reporters in Detroit. `We believe that our car that we worked so hard to develop, is a car that works. And we need a car that works.'
***** meaning, the state of the world 65 million years ago is of little consequence to geopolitics in the 21st century.
mmckinl writes:
"All that really matters is that Putin and Chavez coexist with us."
Commissar 4822
~~~~
huh ?
mmckinl | 09.29.08 - 6:25 pm | #
anyone know the S&P P/E ratio now?
Since they intend to make another run at this bail-out, I would think that we phone/mail/fax our congress reps/senators requesting a full blown committee hearings bring in economists, etc. This is necessary in order to educate the public and the congress people...
Any bill resembling a bail-out of Wall Street is DOA! We are way to close to elections for anyone to want to hang their hat on this crap!
It's over for bail-outs!
@scone, there will still be credit available to solvent companies. But the rates will be higher. I don't see a complete train wreck.
Full disclosure: I am 15% net long as of today's close. We may go down more but we'll bounce back to at least these levels at least one more time before the final bottom (if this trip down is not it).
Hi Patrick, how are murders and executions going these days, I mean, uh, mergers and acquisitions?
and the media feeds the panic...
"biggest point drop ever!"--as if that even matters in a world of percentages.
Since they intend to make another run at this bail-out, I would think that we phone/mail/fax our congress reps/senators requesting a full blown committee hearings bring in economists, etc. This is necessary in order to educate the public and the congress people...
Anonymous | 09.29.08 - 6:28 pm | #
Agreed!
Tanya:
P/Es & Yields on Major Indexes - Markets Data Center - WSJ.com
"Anonymous writes:
Japan: futures"
Actually take a look at the DOW futures...only off -29 from over -600 earlier....
The Fed and the Treasury have not made their case that there is indeed a crisis at hand. And most folks on the ground need to see more banks close and massive layoffs before it is to be believed a crisis at hand.
So is there or is there not a crisis at hand? If so, explain. Seriously. And what exactly did the Fed and the Treasury tell or show the House Finance Committee, the President, et al, that scared the Bejesus out of them? China calling in our debts? Russia cutting off oil supplies? Saudis send along more folks on planes?
Or the fact the we are in a massive deflationary spiral which is going to set off a lot of triggers against a lot of complex and largely unregulated debt instruments that neither the Fed or the Treasury really understand and the unwind is going to be very very fast and very very bad? Anyone?
***** meaning, the state of the world 65 million years ago is of little consequence to geopolitics in the 21st century.
mmckinl writes:
"All that really matters is that Putin and Chavez coexist with us."
Commissar 4822
~~~~
huh ?
mmckinl | 09.29.08 - 6:25 pm | #
Commissar 4822 | 09.29.08 - 6:28 pm |
~~~~~~~~~~~~~~~~
huh ?
.
Anonymous | 09.29.08 - 6:28 pm:
I would answer you, but I have to return some video tapes.
...requesting a full blown committee hearings...
Won't happen. Congress has to adjourn quickly, so they can go home and run for re-election.
Im with you on that Scone - just saying, it was THAT , rather than a market tank, that they were concerned about. I just still dont buy that they plan they have pushed is the right one to address that possibility.
Also, to all on the board here - who has evidence, direct anecdotal, other than dryfly, of this crunch hitting places that they are used to dealing with, either as a business partner, or a customer? Id like to get a better feel for how this is playing out. As far as my world goes, so far, everything is as normal, just your typical recession. I hear that demand is slow from businesses, but Ive yet to hear that any of them are about to shut down because demand is ok, but financing is impossible.
And this is not to deny it is happening, Id just like to here more stories from the front lines.
thx. g
I can't post at work, but was able to lurk somewhat.... Our co. stock is officially under half of what it was. Supposedly, we are a stable co. - yeah right-o on that!
CT is very financially oriented - and not just Stamford. Hartford is all insurance. Will whole cities get laid off?
Optimistic-Joe writes:
Interesting bi-partisan collaboration: the democrat congress majority and the republican administration are working against the republican congress minority. That's the spirit of non-partisan government, isn't it?
O-Joe
Optimistic-Joe | 09.29.08 - 6:22 pm | #
Its kinda like a sandwich...
Also, at these hearings, not only solutions to our current situation, but our society's debt problems, SS, Med Care, Military costs, budgets and etc. Finally, upon discussing our problems, long term goals.
This country needs to have a national conversation about our current situation. If we late until later, it will never be done.
TED Spread = 3.54
Its kinda like a sandwich...
dryfly | 09.29.08 - 6:30 pm | #
Yep.
YouTube - Harold and Kumar Escape from Guantanamo Bay, Cock Meat Sandwich Scene
the only one w/balls in CT appears to be Joe Courtney. i have hope that we had even one. we are such socialists here...
This country needs to have a national conversation about our current situation. If we late until later, it will never be done.
Anonymous | 09.29.08 - 6:31 pm | #
if they can vote on something without the
ultimate price tag, I'm all for it.
Anonymous writes:
Also, at these hearings, not only solutions to our current situation, but our society's debt problems, SS, Med Care, Military costs, budgets and etc. Finally, upon discussing our problems, long term goals.
This country needs to have a national conversation about our current situation. If we late until later, it will never be done.
~~~~~~~~~~
way too logical ....
Let them all go home, lose their elections, and we'll start from scratch.
Wouldn't it be weird if the mkt went down 666 tomorrow?
Well, I can't go out and take a photo, but here are the locations: (Note the Wachovia doesn't show up in google's yellow pages, but Wachovia's own site locator shows it.)
WaMu:
washington mutual - Google Maps
Downey:
downey savings - Google Maps
Wachovia:
Detailed Location Results
Lawyerliz writes:
Wouldn't it be weird if the mkt went down 666 tomorrow?
Lawyerliz | 09.29.08 - 6:33 pm | #
How much do you bill you clients while you post here? just aski
Those didn't look like a vortex into hell, but I'm not sure I know what to look for.
Der Kommandant Weather Helm:
How long until that barbeques galore store goes under?
Or do you think $2000 BBQs will still be a buy in the new economy?
Based on the Dow Jones Wilshire 5000 Index, almost $1.3 trillion was erased from the value of U.S. stocks today. That's the most ever for that index and almost double the size of the bailout authority Paulson is requesting from lawmakers.
Ha! Nevermind the fact that it was down over 300 before the vote took place.
Der Kommandant Weather Helm writes:
Well, I can't go out and take a photo
you don't need to - just hit street view and it pans....
The Congressional Deli is out of crap sandwiches, let's end the session right now.
fallonpdx writes: Anyone?
An interesting explanation was posted yesterday. Paraphrasing: The double secret threat is that congresscritters will not have any money left to spend to purchase their re-election or spend wildly on their favorite programs if the credit system does not remain adequately lubricated. This could mean disaster for their carefully constructed political machines.
This could mean disaster for their carefully constructed political machines.
that could be a very good thing
This could mean disaster for their carefully constructed political machines.
THAT would make losing 401k $ enjoyable
Market tanked 7,700 in 2003 and so did interest rates...Hence, meltdown of 2008. They want to reinflate a broken system so it can come down harder on our kids. Shame on the bastards!
thanks, JP!
"Wisdom Seeker writes:
@scone, there will still be credit available to solvent companies. But the rates will be higher. I don't see a complete train wreck."
But that's the problem-- we don't know who's really solvent, because we've entered the hysteria phase of the panic, where all debt appears to be toxic. This could take out an unacceptable percentage of perfectly good companies, like people being crushed at the exits when someone shouts fire in a crowded theater. In the aftermath, there might not be enough of an economy left to keep employment at anything like decent levels. This is the EOTWAWKI scenario: the market simply loses it's mind, and kills the good with the bad, indiscriminately. This is what Paulson, et.al. are really afraid of, and that's the fear of God thy are trying to put into Congress.
Some GOOD news:
Elon Musk's Falcon 1 launches successfully • The Register
SpaceX Falcon 1 is now circling the Earth. The rocket, launched from Kwajalein Atoll in the Pacific, reached orbital velocity at 00:26 UK time.
"you don't need to - just hit street view and it pans...."
I tried that but the resolution just isn't there. The locations are actually set back a few hundred feet from the intersection proper. If street view had Wilson included, it'd be a different story.
FWIW the WaMu is in a small building (where the Panasonic store used to be) directly across the driveway from Wachovia, and the Downey is inside the Albertsons right next to the Wachovia.
"Or do you think $2000 BBQs will still be a buy in the new economy?"
We will be buying the close-out inventory for $200 to cook dinner on?
Got Charcoal?
I can see the Albertsons...oh well...
emo,
Keep this in mind for today
SPX Index Quote - S&P 500 Index Index Quote - SPX Quote - SPX Index Price
SPX p/e is P/E =14.05
SPX Div Yield = 2.49%
10 yr bond yield = 3.632%
Then>> April 01, 2008
SPX p/e = 17.40
SPX Div yield = 2.49%
10 yr bond yield = 3.5455
As you know, in valuation we use the inverted p/e to determine yield, hence, use EPS of $78.74/$1106.42 = 0.07116, then add div yield of 2.49%, which is 9.606%.
Take 9.606% yield and compare to 10 year Treasury yield which is 3.5455%, i.e, a difference of 6.061%.
It is possible the SPX is 6% overvalued, hence, we saw this fall 8.81% today, but yet it is overvalued by another 6%+/- , which would bring us to about a SPX near 1040. Very possible IMHO and to be honest, the same thing I called for several months ago, with a DOW closing in around 9000 or below.
Nonetheless, this is a matter of over-valuation and at that point, it would make sense to not panic and to look at future value.
The bullshit with The Paulson bailout, is that a bailout is not needed and that the market will re-set, as long as we re-gain confidence, which IMHO, mens getting rid of Paulson, Bernanke, Cox, Bush, etc. We can't play bailout and keep the same people running the nuclear reactor that is melting down! These drunks need to be taken out today and replaced with people that will help us limp along, until honest Americans can be placed back into the control rooms!
Viva America!
What happens when the US Treasuries yield curve cannot go any flatter?
We're approaching that after all, 2yr went from 2% to 1.7% in a day
Not a cent yankee, not a cent.
The barbecue will go from $2000 to $150, but the steaks will go from $5/lb to $80/lb. And the charcoal/propane? Fuggedaboutit.
My guess is that most citizens have already priced in some market downturn and some more bank closures. Unless things get substantially worse then passage becomes more problematic - the world didn't end, so what's the big deal.
Still want to change public opinion perception?
Two sites to vote :
CNBC
Poll: Do The "Nays" Have It Right on the Bailout? - CNBC
CNN
CNN.com International - Breaking, World, Business, Sports, Entertainment and Video News
If the bill doesn't pass this week it will be hard to past anymore railroaded bills.
As it is those sites say it's about 50-50.
Scone | 09.29.08 - 6:39 pm
they know where the land mines are ...
It's their buddies ... Citi, JP, Goldman, BAC, Wells ...
Thats' why they are scared ...
If Paulson really wants any chance of a bill passing he should remove himself from all discussions.
Weather Helm:
Who said anything about steaks? We're talking squirrels here. I imagine we'll be able to shovel charcoal from the burnt-out buildings.
Wow. There's gonna be some crazy short-term CG losses taken on next year's taxes!
DO NOT trust PE ratios right now. I'm betting more than 80% of the S&P miss earnings for at least the next 2 quarters. So the 'E' is way too optimistic right now.
get ready for that pesky peak oil
I, for one, bought some stuff today.
Spotted bumper sticker:
Gold is my co-pilot.
You know we're in trouble when:
Sept. 29 (Bloomberg) -- Punch Taverns Plc, the U.K.'s largest pub owner, fell 26 percent to a record low in London trading on speculation the company may be struggling to find tenants for about a fifth of its properties.
Obama: "Stay Calm" McCain: "Obama Sucks"
Obama told voters at a campaign event in Denver, Colorado, that it's important to "stay calm, because things are never smooth in Congress."
"There are going to be some bumps and trials and tribulations and ups and downs before we get this rescue package done," he said. "I'm confident that we are going to get there, but it's going to be a little rocky."
"Barack Obama failed to lead, phoned it in, attacked John McCain and refused to even say if he supported the final bill. ... This bill failed because Barack Obama and the Democrats put politics ahead of country," he said.
McCain is a pretender and fucking assclown.
Obama in a landslide on Nov 4.
Kaboom writes:
DO NOT trust PE ratios right now. I'm betting more than 80% of the S&P miss earnings for at least the next 2 quarters. So the 'E' is way too optimistic right now.
My thoughts too, are they forward looking PEs or historical. And who are the analysts and when did they make the call.
Great Corey!!
Signing off now.
"So the 'E' is way too optimistic right now."
More in this in the week's "Bearons". Expect adjustment of estimates in the next few days. Forward P/Es are pure fantasy right now.
An entire generation of investors are going to need to learn new gimmick strategies
Dogs of the Dow, lol
The only way the full bill gets passed before the election recess, is if something like Visa has to halt operations
Something small will get passed for Paulson to nibble on and the full bill + some will get passed post-election when no one is afraid of losing their seat.
Instead of TARP, I propose the "Modified American Plan" (MAP) it includes "free" breakfast, lunch & dinner.
McCain is a pretender and fucking assclown.
Obama in a landslide on Nov 4.
km4 | 09.29.08 - 6:45 pm | #
Too early to say.
"Who said anything about steaks? We're talking squirrels here."
I have a particular fondness for raccoon. But I'll settle for squirrels. BTW I'm from the south where both are a delicacy. I think Richard Shelby would like to see this culinary delight spread in popularity up where the Yankees live...
Gold is my co-pilot.
Corey
~~~~~~~~
He'll get mugged ... soon ...
Would it be a little telling if he left in all the powers for himself as in the 1st one?
mmckinl writes:
Scone | 09.29.08 - 6:39 pm
they know where the land mines are ...
It's their buddies ... Citi, JP, Goldman, BAC, Wells ...
Thats' why they are scared ...
mmckinl | 09.29.08 - 6:43 pm | #
I think they suspect nearly everyone was lying about solvency, just like people lied to get loans they could not afford. I think they think the whole system is rotten from top to bottom. If they are right, we really are screwed.
No wonder Phil Gramm ( McCain's guy ) says this nation is a bunch of whiners.
All the people he knows are Republicans.
What is Paulson's last working day?
Inauguration day in February? Is there a transition period between him and the next secretary of the treasury?
I've just been informed that because congress didn't pass this bill foreign investors will be pulling out tomorrow...I told him he was a day late and a few trillion short with that prediction...
Yah, the E is overvalued going forward, but not that much. I think another 6% down and then we have a recession, things slow down, people stop being stupid for a few years and then, all is well. The thing we don't need, is to have Paulson and Friends Of Angelo take $700 Billion and keep us buried with inflation for 15 years! That is the point!
@Scone. This is what I am trying to figure out. CNBC, etc say JPM, BAC, etc. are chosen few. JPM just gourgedon WAMU's toxic subprime disaster. Aren't they the disaster now? What's next for them?
Bernanke is epicly stupid. Low rates are good for borrowers, not lenders.
Seriously, who wants to extend credit at negative real rates. We need higher rates. The low rates are a desperate attempt to force risk taking and prop up asset prices.
No way that could work for long. Price fixing NEVER works long term.
We've seen such massive swings in the stock market lately, this seemed extreme but still in line with what we've seen. Sure they voted against the bailout, but if there were any measure of transparency in financials right now, the risk would have been priced in and we'd be done. As it is, we are left wondering how many banks are insolvent, who they are, and how long they have to hang on until everyone else notices. The smallest bit of good news, the Dow is crazy high. The slightest rumor about a bank, cliff diving.
I was pretty insulted when I read the story about one congressman shouting out "Dow down 600 points" while the voting was open. Seriously, are we going to pass legislation with long-term effects based on what the stock market does on a given day? People aren't trading on fundamentals right now, it doesn't "mean" anything. Why don't we start interpreting tea leaves?
You have cool blog, Nemo.
Comrade Kristina writes:
I've just been informed that because congress didn't pass this bill foreign investors will be pulling out tomorrow..
~~~~~~~
who isn't pulling out ... ?
the reaction to thee rejection of this bill just showed everybody how bankrupt we really are .
Blog rumors - CP market roll over tommorow will cause some serious pain...
"Inauguration day in February? Is there a transition period between him and the next secretary of the treasury?"
It's the period from the day after the election until inauguration day. The old guard in theory gets the new guard up to speed before it goes. Somehow, I think the Bushies will be of minimal help to the new guys, whoever they are. But if Paulson really is trying to save Wall Street as it is, he'll probably work straight up to the end and beyond if asked. And he might be asked.
Re: Instead of TARP, I propose the "Modified American Plan" (MAP) it includes "free" breakfast, lunch & dinner.
Obama keeps his cool
McCain keeps being an asshole.
Gee who do we want as next Pres.
Citizen Kona
RIMM is down 50%/1Month, 40%/5day
I think you are right about earnings dropping mildly compared to stock declines, however the other side of the equation is going to change.
This is broad deleveraging. Instead of $1 million chasing a stock, it will be $300,000
Anyone investing based on past price levels will get burned
Pablo is right, the Constitution requires all tax and spending bills must originate and pass the House before going to the Senate. That's not to say they won't use a gimmick, like "amending" the paulson plan on a Senate bill that's already passed the House, but it would be a major affront to legislative tradition. There would actually be legislators in both parties who would have a problem with the Senate voting first on this.
Angry Saver
Bernanke studied the Great Depression but never heard of FDRs bank holiday ?
.
"Nonetheless, this is a matter of over-valuation and at that point, it would make sense to not panic and to look at future value."
only over-valuation related to ridiculously low rates.
no reason that 3 month gumbint paper shouldn't be 10% as opposed to 0.3% . we still have a doubling of the m3 in the past 6 years to absorb despite some awesome deflationary forces abounding currently. maybe that's the next phase of this bear.
Der Kommandant Weather Helm writes:
"Who said anything about steaks? We're talking squirrels here."
I have a particular fondness for raccoon. But I'll settle for squirrels. BTW I'm from the south where both are a delicacy. I think Richard Shelby would like to see this culinary delight spread in popularity up where the Yankees live...
Der Kommandant Weather Helm | 09.29.08 - 6:46 pm | #
Funny you say that. someone ran one over in front of my house. got home today and put him in the garbage. i should have thrown him in the oven w/a few potatoes...
Inauguration day in February? Is there a transition period between him and the next secretary of the treasury?
EvilHenryPaulson | 09.29.08 - 6:48 pm | #
Inauguration day is January 20th
km4 writes:
Obama keeps his cool
McCain keeps being an asshole.
Gee who do we want as next Pres.
Ron Paul.
I got a question for you smarties:
Is it possible that part of the reason banks won't lend to each other is that the overnight rate is still being held too low, not allowing for risk premiums to be demanded?
Might explain why Fed didn't lower last Tuesday. Just a hypothesis - probably wrong though.
Geoff,
Software sales to auto dealer industry..1200 clients..
Dealer body is hurting but still selling cars...
Bill Heard Auto Group situation was wrong vehicles, wrong pricing, bad locations and fiscal mismanagement...
Lenders have tightened credit but still buying credit worthy customers....
Dealer body needed to contract....
Too many dealers eating each other up on low volume of sales...
You can still get 0% 60 month loans direct from captives..
This is a debt problem as Jas has ment'd..People are in debt...Now their pti and dti are too high..
Kinda of similar to 90's
Recent sampling of credit scores over last 3 months..
July-648
August-625
Sept-605
Credit destruction is here.
high cc balances, cple late scores, high dti and pti are main culprits...
this is not armageddeon...It just makes more sense...
At least we finally have a leading politician saying "DON't PANIC".
I can't believe Bush goes in front of everyone just to scare the shit out of them.
"Bernanke studied the Great Depression"
total tripe, he attributed the depression to a lack of liquidity. so stupid. not too late to read up on tokyo 1995, benny!
If we are legislating to the level of the DOW we are done as a country, DONE.
Get the right things done for the right reasons. Hell the no vote today just bought a lot more of those assets with the 700 Billion. In that sense alone it was worth it.
RE: FNMA...
"News of the current investigations into suspected misconduct surrounding recent accounting practices came just after the announcement of a major management shakeup at Freddie Mac on Friday.
The companys three business lines Single Family Credit Guarantee, Multifamily Sourcing and Investments and Capital Markets will now report directly to Freddie Mac CEO David Moffett. The realignment eliminated chief business officer Patricia Cooks role, and Freddie Mac announced she would be leaving the company as a result. Leaving as well will be Timothy McBride, who oversaw the companys political and lobbying activities Freddie saw its political activities halted when it was placed into conservatorship.
Also leaving will be CFO Anthony Buddy Piszel; the GSE said it would begin an immediate search for his replacement."
Nice to see someone get canned at one of these two companies.
Bond Girl;
Yes, and this bailout has nothing to do with congress getting into the stock manipulation game, does it?
Seems everyone wants to play.
The article requested is no longer available.
km4 writes:
Obama keeps his cool
McCain keeps being an asshole.
Gee who do we want as next Pres.
=========================
Judging by the past 8 years, the ahole.
Patrick Bateman click your heels 3 times and maybe
Instead of suspending short selling, America would be better served if we out-lawed the propaganda machine CNBC.
CNBC is a sham.
"someone ran one over in front of my house. got home today and put him in the garbage. i should have thrown him in the oven w/a few potatoes..."
Be sure an' skin eem first.
I wonder where the exact sources of Paulson's political blunder were located - apart from the demerits of the plan, the political strategy was a disaster.
In any normal administration, paulson would shop his plan with top political strategists and the President. The Secy of treasury might propose the scheme, but decisions about what might fly politically andhow to play it would be made by others.
If it was Paulson's own political blunder, that could only be because Bush and Cheney and their inner circle let him call such shots. More likely, Bush et al completely misread the politics and let paulson walk into the lion's den.
I think I may have underestimated the incompetence of the Bush Admn. I am in shock.
Actually take a look at the DOW futures...only off -29 from over -600 earlier....
Ch-yeah right. I think your data provider just reset the close.
Anonymous a GOPer to the bitter end...
BOL sucker !
Is there any way we can send Peter Schiff in to write up a bill for Congress to vote on?
Angry Saver writes:
Instead of suspending short selling, America would be better served if we out-lawed the propaganda machine CNBC.
CNBC is a sham
Don't blame the messenger blame the source. The people who believe it.
"Bernanke studied the Great Depression"
total tripe, he attributed the depression to a lack of liquidity. so stupid. not too late to read up on tokyo 1995, benny!
bgates
~~~~~~~~~~~
Yep his doctoral thesis was about the Great Depression ... doesn't mean he's smart ...
"Is there any way we can send Peter Schiff in to write up a bill for Congress to vote on?"
Only if he changes his job from fund manager to corporate lobbyist.
So is it official that the House will keep voting until they vote "correctly"?
The only way to have a bailout at this point is to come up with a new plan. If they put the same thing up again, it's going to be defeated by a greater margin.
"I wonder where the exact sources of Paulson's political blunder were located - apart from the demerits of the plan, the political strategy was a disaster."
maybe the fact that the guy who appointed him has 30% approval has something to do with it.
gop reps are running as hard as they can away from shrub, mccain and the national party. they like dc. nice meals, entertaining conversation, all the stuff they don't get in their boring podunk home districts.
Can someone please explain to me how this will work. A lot of large banks just bought more toxic assets and now cannot sell them to the Fed. How does the Fed keep them going?
"Yep his doctoral thesis was about the Great Depression ... doesn't mean he's smart ..."
i've read it, it is mind-numbingly stupid, and just plain bad writing.
almost all econ academics are intellectually vacant voodoo priests.
Congress Vows New Effort To Approve Bailout Plan
Congress Vows to Try Again On a New Bailout Plan - CNBC
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itnot me.' "
"We're in this moment, and if we fail to do the right thing, Heaven help us," he said.
You know what to do.
--
The same Crooks' agents that got us in this mess are going to get us out of this mess?
They worked to promote Crooks' interests all these years and now suddenly they got the religion?
Why were Burn-ass-ke (Great Depression moron) and Hanky Panky there in the first place? No one was expecting the crisis that we have now??
It is the debt, Stupid! (Debt problems wouldnt go away for years).
Jas
"I've heard that there are enough votes in the Senate to pass the bill (probably on Wednesday night), and Paulson is probably hoping that passage in the Senate will put additional pressure on the House."
CR - my understanding is that all revenue type bills must originate in the House of Representatives (I think Dodd alluded to that at one point).
I don't think the Senate can vote to approve before the House. If we have any Congressional parliamentarians, please weigh in.
Best to all
Thanks CD, this is the kind of stuff I like to know about. I only have feelers out in some particular businesses, and as a consultant, I can only be so pesky and intrusive. I fully agree that we went into credit overload, the whole shebang here - businesses, consumers, etc. The unwind is unavoidable, but it isn't clear exactly how it proceeds and whether it is super chaotic and catastrophic, or just necessary and long and unpleasant. What Id like to see addressed in a bill is how we plan to help a company that is just experiencing typical slower demand for a downturn, that has used standard practice for everyday financing, and how THAT particular lending has shut off. I mean, if it isnt an irresponsible borrower, what would be the best way to help unfreeze that lending. It has not been made clear to me in any way that the plan weve been looking at so far, in any form, would be the best to address that type of issue.
Wonder what we get next to look at. So far, Im kind of pissed that a week plus ago this kind of thing had to be passed immediately or it was credit lockdown. Funny that isnt happening. Makes me feel that someone held a gun to our heads and turns out, we said pull and it was blank.
The only way to have a bailout at this point is to come up with a new plan. If they put the same thing up again, it's going to be defeated by a greater margin.
Nobody | Homepage | 09.29.08 - 6:58 pm | #
I would guess so UNLESS there really is a crisis - not a made up crisis.
So Hank SHOW ME!!
DAWG | 09.29.08 - 6:58 pm | #
they'll outlaw mark to market....shhhh! you'll never know.
McCain just spoke and said NOTHING--except to add that Obama injected partisanship into the process. haha.. that's so funny.. up is down. down is up...
Several wild dogs arrived unexpectedly at the event due to his lack of fixadent.
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itnot me.' "
***** why can't they just say: "our mail is running 90% against this thing" and end this charade?
Bond Girl --
You have cool blog, Nemo.
Oh, now I'm all blushing and stammering and stuff.
Seriously, though, thanks. Wish I were full-time self-made independently wealthy like CR so I could spend more time on it.
DAWG writes:
@Scone. This is what I am trying to figure out. CNBC, etc say JPM, BAC, etc. are chosen few. JPM just gourgedon WAMU's toxic subprime disaster. Aren't they the disaster now? What's next for them?
DAWG | 09.29.08 - 6:50 pm | #
I have no idea. If this were a natural ecology, and the big fish were eating the little fish, all would be well as long as the little fish didn't have a lot of toxic mercury in them. If they did, they'd eventually poison the big fish, and the top predators that eat the big fish, like bears and people.
It seems to me that Paulson et.al., are working on the "House assumption:" EVERYBODY LIES. We are testing that hypothesis now.
Bgates
all true and obviously relevant, but then the admn should have factored that into their design of the plan and its roll out. they didn't.
politically weak people are not necessarily incompetent. the bush admn is both.
i'm still curious to find out (sooner or later) whether Bush just handed the whole portfolio to Paulson or had his team play around with strategery again.
The best narcissistic and facetious post on this whole issue I've read. From Setser:
"gillies Says:
perhaps you would like to list, for those of us who are untutored in economics, all of the various ways in which pyramid schemes can end ?"
Phrase of the year? "Well capitalized!"
From Bloomberg:
Some specific Treasuries have been in such demand that traders were willing to lend cash for no interest overnight to obtain the securities as collateral. Other trades have been left uncompleted, or failed.
Failures to deliver or receive Treasuries amongst dealers rose to $578 billion in the week ended Sept. 17, from $54.2 billion the prior period, data on the Federal Reserve Bank of New York's Web site show. Treasury fails reached $2.3 trillion in the week ended April 2, the highest since May 2004, and averaged $176.7 billion a week since July 1990.
Repos Show Credit Freeze Approaching March Level: Chart of Day - Bloomberg.com
Commissar 4822 writes:
"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itnot me.' "
***** why can't they just say: "our mail is running 90% against this thing" and end this charade?
Therein lies the clue, the drop today has eased public opinion with an almost even chance now.
If i have to wager, if it stays this way a bill will be passed by friday.
AYES NOES PRES NV
Democratic 140 95
Republican 65 133 1
Independent
TOTALS 205 228 1
There is one thing that a lot of people who so quaintly refer to "J6P", "the little people", or the "Flyover states" seem to forget when they scream that those morons don't get it and are just plain ignorant. Main Street may not have a lot of the old stores left (the stores now are on the by-pass next to the Wal-Mart) but one thing still there is the "Farmers and Merchants Bank of MainStreet", established 1917.
And in that bank this week, they have a poster, hand written, that informs their customers that they do not have, nor have ever had, any of the things that this bailout was directed towards. That's next to the poster that advertises the rate ranges on their loans and cd's.
When the mongers came to sell them another story, the ones who sold them the fear that terrorists were going to bomb their school, and the fear that Iraq's WMD would be visited upon them, and the promise that Iraq would by this time be a wonderland of Starbucks and democracy, this time the people just shook their heads: fool me once, shame on me...
What is dying here is not banking, and not lending, at least not yet. What's dying is the capital markets-based business models of the big banks, seduced by the fees of the derivatives and the opiate of global capital flow.
Where is Wells Fargo in the zombies list? Wells, of course, is, in spirit, at least, really still NorWest, based in that flyover town, Minneapolis. Do you think their name is all over the counterparty reports of the hedge funds? Where's SunTrust, who is so stogey that it held the Coke stock it earned on the KO IPO until this year, based in that plane-change town of Atlanta? Marshall and Ilsley? First Omaha? Think their Tier 3 capital needs to be phonied up for them to survive?
One time, more than a couple years ago, I found myself in Greenwich. Having taken the train up, one of the guys with whom I was meeting, an MD (managing director, not doc) of a bond firm, had to go to Hoboken, and offered me a ride back down. As we drove out of town, past the mini-estates, he said "condensation on the pipes." I looked puzzled, and he said that the builders of these houses had constructed the plumbing of the economy, a hundred years ago, but that, now, the residents -lawyers, accountants, brokers, salesmen-- made their livings off the drops that formed on those pipes from the flows inside them. And that, he said, couldn't stand forever, as the pipes were running drier every year.
almost all econ academics are intellectually vacant voodoo priests.
Do not insult voodoo priests that way!
OK, since I don't use any credit in my businesses, I'm genuinely curious: Is business credit really impossible to get at this point? Does anyone have any direct experience recently with trying to roll a loan or factor receivables?
Or is all the noise about this just that: noise?
Melamine is a nutritious dietary supplement right? Just wanted to be sure.
I just love the crunchy fishbone meal in Whiskas(tm).
The first Bailout-Bust memorabilia is now Ready to Order:
Just released ... "Anything But Hank!"
Just got this via email
To: To Our Retirement Plan Sponsors and Participants
From: Brian Comer, President of Wealth Management Institutional Distribution
Date: September 19, 2008
Re: Current Market Conditions and ING
The unprecedented turmoil in our financial markets has prompted many of our retirement plan
customers to ask questions about what this situation means for ING, as their retirement plan
service provider. We would like to provide you with facts that underscore our confidence about
our capabilities now and in the future.
First, we would like to set aside what has been a source of unnecessary stress for a number of
customers. Some plan sponsors and participants have been confused because our companys
name ING is similar sounding to the corporate name of AIG, the American International
Group. As you know, AIGs recent liquidity issues have been the focus of much recent publicity.
Please be assured that ING Group and AIG are entirely separate companies and are not affiliated
in any way.
More importantly, we want to provide some perspective on our approach to managing our
business. INGs discipline in managing our risks and capital have been our guiding principles for
doing business, and they have served us particularly well through the liquidity crisis. Specifically:
INGs capital position meets all internal targets and is well in line with the
requirements of regulatory and rating agency requirements.
On September 16, 2008, Moodys affirmed ING Groups rating at Aa2, stating
that the rating reflects the global franchise and the combined credit strengths of
the group's various operating entities, from both banking and insurance.
On September 2, 2008, Fitch affirmed ING Groups rating at AA- with a stable
outlook, based on the groups strong banking and insurance franchises,
satisfactory earnings, moderate risk profile and adequate capital.
In December 2007, Standard & Poors affirmed ING Groups rating at AA-, stating
INGs strengths are excellent diversification and competitive position, resilient
performance in the current market environment, strong capitalization, leverage,
and financial flexibility and proactive risk and financial management.
ING has experienced limited direct impact of the credit and liquidity crisis,
reporting a direct impact on profit of EUR 44 million after tax in the second
quarter of 2008.
ING is not immune to the market environment as our securities portfolio has experienced lower
valuations which are reflected in our shareholders equity. As we are long term investors with a
solid capital position, these lower market prices do not have a material effect on our business.
Seriously, though, thanks. Wish I were full-time self-made independently wealthy like CR so I could spend more time on it.
Nemo | Homepage | 09.29.08 - 7:02 pm | #
Be careful for what you ask... he's like chained to the thing now.
Besides then you'd have some nut spending his waking hours to be 'first' in your comments... wouldn't want that would you.
fascinating, Austin..thanks!
Whatever happened to "banking system is sound", "economy is sound", etc., etc. from the same person who now wants $700B to plug holes in things that are sound.
In my letter to Rep Mike Thompson (who voted no) I wrote:
"The political fiasco lies at Paulson's feet. His arrogant and imperial three page draft of the bill that was released two Saturdays ago caused the first stirrings of rage. I think the bill was likely dead from that moment on. How could there be any compromise with such a flawed document in the first place? Before Congress attempts to legislatively address the bank insolvency problem again, I suggest you do so with a completely new slate -- and that means with Paulson no longer in the picture. Call for his resignation."
That should be a minimum.
Ezra Pound --
Phrase of the year? "Well capitalized!"
I am partial to "Glass-Steagall" myself, but I see where you are coming from.
Or is all the noise about this just that: noise?
sm_landlord
~~~
someone said wait for the CP roll over tomorrow...
Somebody took Goldilocks into the basement and shut the door behind them.
I've been hearing a lot of screaming ever since.
mmckinl - that was crispy, and I'll add to that, wait until the hedge fund redemption on top of it. Talk about a crazy close of the month!
Therein lies the clue, the drop today has eased public opinion with an almost even chance now.
If i have to wager, if it stays this way a bill will be passed by friday.
**** we'll see how tough the public is ... many of us smell extortion and will not be swayed
I was wondering what Goldilocks' head would look like on a stick.
Marvelous.
Ohhh you need that real creepy "marvelous" from Count Rugen...
One thing for sure, Pelosi should resign -- she hasn't risen above being a partisan hack.
Are you better off than you were eight years ago?
Look out how many companies when under Fortis Yahoo! 404 - Page Not Found
a Iceland bank
wachovia
WaMu
and several banks in Britain in the last week . The Spanish banks are in trouble .The Euro is coming apart at the seems .The federal Reserve has over lent and this bailout is to help the other fraudster banker . The tax payer was still put on the potential for 10's of billion thru FDIC bailout of Wachovia . So how much did the drop in oil save main street today . 700 billion more will turn into the TRILLIONS ....A crash now mich save TRILLION IN THE LONG RUN . There over a trillion in HELO loans alone. With all this bad news the markets should be down. Without the 950 billion the fed already spent this would of happen months ago . Why kick the can down the road .. That's why I'm against bailouts .. Nationalized the banking system , reduce taxes thru less laws , free up the prison system ,stop bull shit lawsuits , reduce tax code , legalize pot (work 100s billion) ...
"I was wondering what Goldilocks' head would look like on a stick."
Probably something like Aggyness Deyn.
Are you better off than you were eight years ago?
LOL ... yes, in terms of being sadder but wiser
Are you better off than you were eight years ago?
km4 | 09.29.08 - 7:14 pm
~~~~~~~~~
point game set match ...
Oh no! Fathead on CNBC is explaining that Americans who don't like the Paulson bill don't understand that it's going to save the American economy!
is it noise?
well Im about to post a YOY monthly sales number of about -36%.
A/R, YOY -49%
so, no it aint just noise.
km4 writes:
Are you better off than you were eight years ago?
Didn't you know? It's morning in America. OK, maybe not morning, but it is the Day After.
going long on No-Doz and Mountain Dew..
Not investment advice
LOL ... yes, in terms of being sadder but wiser
Commissar 4822 | 09.29.08 - 7:15 pm | #
Bingo !
Republicans and Democrats proved that they simply cannot work together for anything -- even the survival of the country.
Sad
or
Perhaps even worse.
Stay tuned !
Are you better off than you were eight years ago?
Yes.
I'd like to propose a bill that requires news commentators to refer to "Main Street" as "J6P."
I don't care about the bailout everyone is talking about. It doesn't solve the problems of de-leveraging and withholding of credit.
I am concerned that the Federal government is not keeping its powder dry, and any future attempts to provide order to the market will be pathetically weak.
US Total debt to GDP is at 350% and suddenly foreign central banks to not perceive the US debt to be AAA+
http://media.economist.com/images/20080927/CFN118.gif
"Are you better off than you were eight years ago?"
Yes.
But, then again, I believe my station in life is my responsibility.
Also, to all on the board here - who has evidence, direct anecdotal, other than dryfly, of this crunch hitting places that they are used to dealing with, either as a business partner, or a customer? Id like to get a better feel for how this is playing out. As far as my world goes, so far, everything is as normal, just your typical recession. I hear that demand is slow from businesses, but Ive yet to hear that any of them are about to shut down because demand is ok, but financing is impossible.
Geoff:
Spoke with acquaintance this weekend who's an equipment mechanic. He's cross-trained on all kinds of equipment but is now losing hours.
His employer - an equipment dealer/repair facility - is now subsisting solely on work for only the largest companies and has been told by many customers that once their particular job is done, they have nothing - nothing - on deck for the next job. Layoffs coming.
EngineerJim writes:
One thing for sure, Pelosi should resign -- she hasn't risen above being a partisan hack.
EngineerJim | 09.29.08 - 7:14 pm | #
I would bet the Dem majority is pretty happy with her after today. Like it or not.
There is only one way to remove her Jim - take back the 'Majority'. Think that's likely to happen? It won't if they keep getting 'out maneuvered' like they did this week.
Just sayin'...
He'd be smarter to craft a new bill. What House member who voted "no" wants to turn around and vote "yes" for no particular reason and then have to face his constituents? Paulson isn't, it seems, very saavy.
Paulson's aim to save GS will fail, Buffet may lose some money on this. Roubini is right, IMHO, GS should find a buyer bank soon!
"Are you better off than you were eight years ago?"
Yes.
But, then again, I believe my station in life is my responsibility.
~~~~~~~~~~~
the silver spoon crowd speaks ...
homedad
Im in the same line of biz....
its fallin off the cliff, and its not coming back anytime soon.
[km4 writes:
Obama keeps his cool]
Sure. If I got $300k off on a home purchase from a convicted felon nothing would rattle me either.
Are you better off than you were eight years ago?
Much better...thanks for asking.
Homedad - Geoff...
My wife's company is laying off now too - she is a manager and they asked her for a 'hit list'. She just hopes she isn't on HER bosses 'hit list'.
Its tightening up.
It's time for all of us to up the ante with Paulson. We all need to fax & e-mail the Treasury Department, and tell Paulson that if his bailout bill passes, we the taxpayers, who own a large majority of the money invested in Wall Street through our 401K plans, mutual funds, and other stock holdings will cash them in, because we will no longer support a rigged game. Then we will see if he has the cojones to call our bluff.
homedad43
there's nothing in the Paulson plan to help main street ...
we need FDRs plan ... credit cleanup with a bank holiday and public works. lord knows our infrastructure needs it ...
Bubba is sitting on a powder keg, eating lunch.
He see's a burning fuse leading to the keg.
Bubba then sees that he is chained to the bomb,
but he thinks, why waste my soda to put out
the fuse; I didn't light it.
.
bearly | 09.29.08 - 7:23 pm |
You definitely are a 'low information voter' or the kind that has the GOP caters to !
bearly writes --- Sure. If I got $300k off on a home purchase from a convicted felon nothing would rattle me either.
Oppose Obama on his policy stances if you will, but please read
FactCheck.org: Does Obama have a real estate problem?
"A political patron from whom he bought a strip of land is under federal indictment, but there's no evidence Obama did anything improper."
I would bet the Dem majority is pretty happy with her after today. Like it or not.
I don't care if they are happy or not. The point is she is not a leader in any sense of the word. Just a hack.
We're definitely having layoffs in my area-- Oregon is pretty dependent on the housing industry. That includes sawmills, door and window manufacturers, cabinet shops, landscapers and garden suppliers, tradespeople, etc. Some builders are also going bankrupt, with resulting leins. Real estate is extremely slow, mortgage companies folding. Noticeable asset dumping of cars, boats, RVs, etc. My bank has tightened requirements even for those with excellent credit.
$$ Industry during the coming depression: dem front group..ACORN type thing. It's gauranteed that even in an economic national emergency you will get your fed gov't subsidy increased.
also no evidence the house wasn't overpriced instead of underpriced - doesn't that look slimier, anyways?
why anyone would pay over a million for chicago weather is beyond me.
edd browne | 09.29.08 - 7:27 pm
Not ...
EngineerJim | 09.29.08 - 7:27 pm |
Why don't you generate a BPM workflow diagram of how Nancy Pelosi works using BPEL.
Too difficult for ya - call me !
Your analogy is a little off:
Bubba is sitting on a powder keg, eating lunch - sitting next to him is the millionaire banker, who lit the fuse...
Great points, AustinTex.
On another note, I'm VERY encouraged the Fed opened a 84 day lending window by 150 billion. This is what we need for working capital credit. The problem is that it should have been opened, or at least announced, a few weeks ago, so the banks could set up to translate that window into working capital loans. As it stands, there's probably not enough time to do much before rollover tomorrow. Gosh, it's almost like they were trying to manufacture a crisis.
at least bearly refuses to believe in a two-year messiah.
Save us, Obama! Save us!
bearly writes: "Sure. If I got $300k off on a home purchase from a convicted felon nothing would rattle me either."
If one wants to play politics on an finance and economic blog at least get your facts straight.
They actually paid 300K above their initial offer and the sellers did not make any special deal with the Senator or his wife.
"The Obamas submitted three bids: $1.3 million on Jan. 15, 2005; $1.5 million on Jan. 21; and $1.65 million on Jan. 23, according to a copy of the sale contract shown to Bloomberg News."
ABCNews.com article ignored Bloomberg's confirmation of Obama's house-sale claims | Media Matters for America
Are you better off than you were eight years ago?
Ask again in 6 months.
Comrade Bagholders,
This post is so typical. We'll keep voting on this thing until we get the result Wall Street wants.
This is going to be an interesting show, to say the least.
Nostrovia,
Are you kidding? The dems are THRILLED about Pelosi today. It was the GOP that desperately wanted this legislation to pass, the thing is, they wanted it to pass with the dems name all over it. It's a bill that helps their friends but their constituents hate it. But Pelosi cock-blocked them hard and now they're in shock.
try not to confuse the recession with the credit crisis ...
most people don't need credit .... they are over bought now ...
this bill does nothing to loosen credit , nothing ...
the banks will be tightening as they see the economy tanks ... they always do ...
If I was one of the Keating Five, I'd be pretty vocal about being anti-corruption too.
these white sox announcers are the worst in the universe, speaking of chicago.
what a low-class organization, i hope the rays roll them all.
Dryfly
sorry to hear the bad news about your wife's firm. I wish her good luck in getting through, whatever happens.
the same thoughts to all others in this virtual blog world who are feeling the real material pinch of virtual capital going up into digital deletions.
This post is so typical. We'll keep voting on this thing until we get the result Wall Street wants.
**** Can the members of the House vote to table further business and adjourn?
***** They have the votes, unless it takes 2/3.
OK, how could today's rejection be used to edge ourselves towards a different "system." Too many people assume that we MUST save "the financial system." I'm not happy with what this system has been doing for the past 8 years. How can I - or some more powerful group than I - nudge it in a different direction?
We are assured the IB "model" is dead - even though today's activities seemed to be directed at keeping it alive.
So, there will be less leverage - not 30-1. Maybe 10-1? What does that mean? What does it mean if interest rates go up, and people start putting money in savings accounts? Does that mean more money is available for lending?
How would one feel out the way forward?
I don't care if they are happy or not. The point is she is not a leader in any sense of the word. Just a hack.
EngineerJim | 09.29.08 - 7:27 pm | #
She is proving to be an outstanding leader - leader of her caucus in the House that is... THAT is her #1 job. She isn't Speaker if (1) her party isn't majority & (2) her caucus doesn't voter her #1. You're just a fool if you don't see that. They all get it.
She is the same kind of leader GOPers have put in that chair for years (and quite successfully too)... a partisan that takes care of their own first.
One way to remove her and only one - take away her majority.
Paul Krugman on today's vote: "So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
As a friend said last night, weve become a banana republic with nukes."
Some posters here seem to have joined that growing group of crazies. Just saying.
The forum was better without the constant political rants.
Looks like I picked the wrong week to stop drinking.
Tonight we're gonna party like it's 1929 -
Credit crunch banker leaps to his death in front of express train
Mr Stephenson is believed to have taken his own life after succumbing to mounting personal pressures as the worlds financial markets went into meltdown. Link
"One way to remove her and only one - take away her majority."
or she could just retire and gracefully bequeath the seat to gavin newsom, the bryll-cream wonder boy.
Thanks homedad43. So you'd chock that up to a demand issue for them, I guess, but maybe something upstream is a financing issue that is cascading to that, right?
What I hope to hear more stories about is the direct financing problem that is forcing firms to shut down investments, or just close down altogether. And then, what the heck are the options for reviving that credit well. That is really what we need to focus on.
Anonymous writes:
The forum was better without the constant political rants.
Anonymous | 09.29.08 - 7:36 pm | #
Guilty. And agreed. Move for a moritorium on non-economic political discussion. All in favor...
Dryfly,
I agree with your analysis of Pelosi, though calling her "outstanding" is a bit strong
"The forum was better without the constant political rants."
fiat dollars are political entities, not economic ones. or did you want to chat about the oil/gold spread?
The crisis is asset deflation plain and simple. If you are/were levered up multiples of 10 and the assets (real or paper) backing you are dropping in a hurry... you are toast.
So the problem is systematic and we are in a deflationary spiral without a bottom in sight. Unless what Citi paid for Wachovia or JPM paid for WAMU is in fact the bottom. If it is, a lot more banks are going down as is a major portion of the financial services sector and anything tied to consumer lending, commercial and residential real estate, and discretionary spending by consumers....oh yeah...most of our economy.
We are all deflated.
Can someone explain why some people keep saying we should suspend mark-to-market account? And how that would help
thanks
Anonymous writes:
The forum was better without the constant political rants.
Anonymous | 09.29.08 - 7:36 pm | #
Its a big part of this story for now - after November the politics will die down. Its happened here & other places before.
Anybody hear from Denninger? I am eagerly waiting for the Market Ticker update!
Mugabe promises new Zimbabwe government by weeks end.
The US promises same on Nov 4 and can we borrow some your zeros on your currency.
Can anyone out there answer a simple (if stupid) question: Where did the money go?
I understand that this "crsis" is a result of banks handing out money to people who cannot or will not be paying it back. OK, that part i get. And, the "lendees" spent the money on houses and other stuff. OK, I get that, too.
But where did the money go? All the folkis that sold the houses and pocketed the money - what did they do with it? If they are saving it - why do banks need money?
Thanks - be snarky if you must, but if someone can answer the question, would be greatly appreciated.
Geoff-all,
as stated before this is bad credit not getting loans not good..thier is plenty of credit out there for fiscally reponsible companies..
As an ASP software with a industry in depression, we have had venture capital come in the last 2 wks..
Why? low overhead, profitable and an intelligent product...
What I hope to hear more stories about is the direct financing problem that is forcing firms to shut down investments, or just close down altogether. And then, what the heck are the options for reviving that credit well. That is really what we need to focus on.
Geoff
~~~~~~~~~
Only one way ...
bank cleanup ... get rid of insolvent banks and re-capitalize solvent banks with tax payer equity ... no trust , no transactions - period
.
"Where did the money go?"
the 'money' was largely notional value that never existed in the first place. the problem is that the contracts related to credit went bad, meaning people called in some of that imaginary money, which put pressure on similar constructs based on imaginary real estate equity.
rc writes:
Anybody hear from Denninger? I am eagerly waiting for the Market Ticker update!
rc | 09.29.08 - 7:39 pm | #
he's probably trying to switch some mental gears
"Move for a moritorium on non-economic political discussion"
Ame
right CD - I dont think bad credits should be getting more handouts at this point, seeing as that is what got us here. So this part of the process really shouldnt be avoided. It's when good credits cant get what they need, then we've got a different issue. But of course, any economic downturn of significant magnitude can kill demand enough to make a formerly good credit into a bad one, as their revenue stream dries up and makes their ability to pay suspect.
What if, we cut our SPX earnings by 6% to $74,02 and then decrease our SPX yield by 6% to 2.341% and then take down the Treasury yield 6% to abouts 3.32%, i.e, and for fun, we take down the SPX by 6% to 1040 and start over and say that future value will equal a forward SPX P/E of 14.05 which is an E/P of 7.11% added to div yield of 2.34 = 9.45% subtracted from a Treasury of 3.33 = 6.12% overvalued future value.
So, what if, worst case here is that people freak out and the market drops 6% this week and then another 6% within the next qtr, leaving the SPX around 980? Within that range, IMHO, I think there is generational opportunity to buy into a recovery, but beyond stock valuations, there has to be investigations, there has to be a political power shift, and there has to be confidence restored in the form of real reform. A few trillion in bailout fun money, will create 15 years of debt and inflation that will sink America into the dark ages. The pain and the blood in the streets will be the sound of SIFMA dying and water being pour'd on the melting witches who need to evaporate into thin air.
I love ranting and raving here, but the key is to not panic and recall movies like It's A Wonderful Life -- where George talks people into not being panic'd and to remain calm to get through this, because Paulson isn't buying, he's selling bullshit like Potter, the same bullshit that Buffett is pushing and Gross. Don't be fooled by these con artists, remain calm and wait for opportunity! Let those suckers bleed in the streets and then, take advantage of them, when they hurt!
She is the same kind of leader GOPers have put in that chair for years (and quite successfully too)... a partisan that takes care of their own first.
I am from California and was happy when she took over as speaker (even though I'm not a Dem). However, she has not moved above the ghetto of being a partisan.
2 Peter 2:22
Of them the proverbs are true: "A dog returns to its vomit" and "A sow that is washed goes back to her wallowing in the mud."
Comrade Bagholder Speed,
"Bubba is sitting on a powder keg, eating lunch - sitting next to him is the millionaire banker, who lit the fuse..."
And Bubba doesn't know it. The bankster does. Yet he sits.
Moron. (Not you Speed, the bankster).
Nostrovia,
Guilty. And agreed. Move for a moritorium on non-economic political discussion. All in favor...
Politics and economics are inextricably intertwined. It has rather intruded into the public sphere, hasn't it?
whitehouse deputy press secretary is disingenuous.
Every time he talks about the need to "remove the illiquid assets" i want to punch him in the face. When me says it is "ironic" that the market dropped in value more than the bailout package, and therefore the bailout package is vital, I want to throw my shoe at the screen.
And it might make for better reading than some of the chuff we are wading through these days in the comments ...
MSM | 09.29.08 - 6:23 pm | #
Right, because we'd hate to hear from ordinary Americans on all of this. Get over yourself.
Homedad,
Public works contracting is a train wreck in Cali AZ work is booming, so much I just purchased a new tractor.
As for credit, I havent really seen any pull back. Wells & BofA are begging to up credit lines. I put the new tractor on a 4 year, 0% plan but what was interesting is they had no problem financing this in a holding corporation with no D & B history and no personal guarantee.
Just my observations
moqui
Smithers
more debt was created than retired and now that debt is going bad ...
people who sell houses get paid with the other's debt, very few are all cash ...
when the debt goes bad it bankrupts banks as they have lent 10 times their deposit base ...
no banks no loans no money ... only banks create our money, through fractional reserve banking ...
FT Woods, thanks for the link to the Tom Wolfe story.
Greenwich Time
It may dash your hopes for that nice warm feeling called Schadenfreude, but the Masters of the Universe are smarter than the people they left behind at the investment banks. Their hedge funds have blown up here and there, but unlike the investment banks, they are still very much in business. They have hurriedly pulled themselves into defensive positions inside their shells, like turtles. Their Armageddon, if any, will not come for two more days, which is to say, Tuesday, Sept. 30...
[Kaboom writes:
Are you kidding? The dems are THRILLED about Pelosi today]
LOL! You guys are really delusional. Please take a moment to look at every headline and photograph you can find. Pelosi is standing in front of the camera frightened and shocked like a deer in the headlights. Not a big confidence builder.
BTW - I am voting for my DEM rep in Nov. A NAY vote against Pelosi...
As to where the money went, it never existed in the first place. When someone buys a house for $500k, the seller walks away with $500k and the buyer gets the house. If a year later, no one is willing to pay $300k for the same house, then at least $200k of value evaporated.
"the 'money' was largely notional value that never existed in the first place. the problem is that the contracts related to credit went bad, meaning people called in some of that imaginary money, which put pressure on similar constructs based on imaginary real estate equity."
BGates, ummmmmm, I guess this shows why I am out of my league here. Are you referring to banks lending money they don't actually have in their possession based on the fed letting them borrow said money based on their deposits? At some point, doesn't actual money show up to the sellers of the homes?
do you think the tanned one, as a key player in the setup, feels the slightest bit of remorse as he watches the news on his huge boat in the Caribbean?
I agree with your analysis of Pelosi, though calling her "outstanding" is a bit strong
joe shmoe | 09.29.08 - 7:37 pm | #
From the POV of 'partisan head of caucus' - she has done a very good job holding that sack of cats they call 'democrats' together. That may all change tomorrow but this vote was a tough test... and frankly they out maneuvered the GOP.
That bill was awful yet the 'media' has painted it as a 'rescue' & 'GOP' killed it. What could be better for Dems?
GOP leadership should have come out like heroes for 'saving America' and spun it to their advantage but instead their leadership is already back tracking saying the will work with majority & take another shot... WTF?
If Pelosi is REALLY smart she'll subtly move the goal posts and we'll still not get a bill... but have moved the agenda farther 'left'.
Traders aren't the only ones who think like 'criminals'.
It is satisfying in a very primitive and probably short-sighted way to know the Wall Street was stunned and despairing today. I was sorry I couldn't have watched CNBC.
To see the arrogant Master of the Universe "reeling" and reduced to hysteria - I'm not yet evolved enough NOT to enjoy this, deeply!
Politics and economics are inextricably intertwined. It has rather intruded into the public sphere, hasn't it?
Byzantine_Ruins
Absolutely. And the intersection of politics and economics is important. But the "You suck. No you suck" political posts belong on Kos.
I have violated this myself, but won't again. Not here. That's like peeing in a sparkling pool.