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Recent Recommendations
3rd
feist!
2d
beat nemo, good enough for me
5th
CR,
why do you think either of these will not go bust today ?
any inside info
Place your bets. I have 100 on the Federal Reserve.
wachovia or Downey or national?
Was TARP coined here?
all 3 plus
MS
WB will get flushed further today, barring yet another rumor from Hanky-poo and/or gasbag.
Seriously... they bought Golden West/World for christ sakes!! how they lasted this long is a wonder of modern manipulative powers to behold.
Ciao
MS
Sheesh, my Nat City puts are up 633% on the day. Wish I had bought a few more of those yesterday:)
the thing with cliff diving is that you can break your neck and become paralized.....
Next: Health care insurance companies.
Company labor reductions cause decreased insured pools for health care insurance. Premiums increase to cover decreased pool size. More people opt out. And so on and so forth.
--
Financial gangs warfare, pure and simple. Few of the biggest gangs will rule after most of the lesser gangs are obliterated.
Just the normal thing in Gangistan.
Jas
Too Big To Fail. NOT
When will BOA acquire JPM and GS swallow Citi?
CNBC again says that we common (stupid) people do not "get it".
how they lasted this long is a wonder of modern manipulative powers to behold.
I too, find this the most amazing thing ever.
Unfortunately, if Wachovia goes under today the bailout will be a done deal. Fear and panic is all this plan needs.
I keep reading about WB and am very worried about Warner Brothers. Why do you think they're in trouble? Are their films really that bad lately?
Financials will get attacked as long as it's a play that always works. Banning shorts obviously didn't prevent this, anyone have an idea what will? Or, should they have a very big pizza party with many hosts?
Nemo was in transit.
Wachovia = 2½ WaMus
Doesn't the JPM purchase at a base case send shivers through asset "prices" . hence the nosedives. Thery should keep up these confidence building measures working well. I am beginning to think these guys are just choking in the spotlight - no other explanation. Paulson's got the apple
Anyone have any insight into WaMu bond prices? I would think that there would be a bounce, with all the CDS holders scrambling to purchase bonds to cover their CDS default bets. The size of the purchases should be proportional to the total outstanding CDS coverage, as I cannot imagine why any other sane person would purchase a WaMu bond at any price great than zero.
KRISHNAN writes:
CNBC again says that we common (stupid) people do not "get it".
Fine. Let's just leave. Leave 'em a country of just bankers and politicans.
Where shall we go?
--
Gangistan likes three large gangs to survive after a vicious gang warfare. And we will get there one way or another. BAC, JPM and?
Jas
Jas,
GS
Simple Interest, just a guess.
I can think of a number of banks I'd expect to go soon.
Best Wishes.
My guess is the FDIC will let the market absorb this news for a while first. You notice that WAMU going under didnt trigger the angry consumer response Indymac did. Seems like they are letting consumers take the next few weeks to bleed it slowly, before the FDIC comes in with a death blow.
Cluesless News Begging for Consensus...yeah, TV at it's finest.
Kim Jong Nemo writes:
Wachovia = 2½ WaMus
Seriously? ... So WaMu might only hold the record of "Largest U.S. Bank Failure" for another 5-6 days??
I'm off to get $1K cash from BOA, and transferred $5K from Schwab to BOA (to be closer to the ATM) hehehe
CNBC acting like it is a forgone conclusion. Dylan Radigan is begginning to get it . Erinburnett is just nott hat smart. She spends too much time licking Cramer's boots. Oh yeah he is a seller now into his market bottomm call. What an idiot.
I'm going to Dubai (U.A.E.) and Muscat (Oman) next month..if it's nice maybe I'll stay.....
CDS OF mORGAN STANLEY JUST BLEW UP
UNBELIEVABLE---Despite financial meltdown, House approves $630 billion spending bill
Package includes loans to auto industry and heating aid
WASHINGTON While struggling to come up with a $700 billion bailout for the financial industry, the House on Wednesday overwhelmingly passed a $630 billion government spending bill that funds everything from low-interest loans for the auto industry to home heating aid for the poor to a dining hall at the Niagara Falls Air Reserve Station.
The record-breaking $488 billion Pentagon budget for the coming fiscal year is by far the biggest piece of the spending bill, but several smaller items break much more from the routine. Most notably, the bill lifts the long-standing ban on oil drilling off the Atlantic and Pacific coasts.
Buffalo News: 404 Error
Picked off one at a time. Why don't they support each other instead of looking to the Fed? Greed. The biggest guys don't mind the smaller failures at all.
From Tech Ticker:
"If money isn't loosened up, this sucker could go down," President Bush reportedly declared Thursday evening as talks over the $700 billion bailout package stalled.
Anyone care to parse that quote??
--
"CNBC again says that we common (stupid) people do not "get it".
KRISHNAN,
That is the essence of the Anglo-American democracy -- People are stupid and bankers need to rule.
Born-and-bred Amerrican dopes simply do not understand the true nature of the American econo-political system:
A system of the Crooks (organized gangsters), by the Crooks, and for the Crooks!
Jas
repost from early superceded thread
zendiet writes:
Well to be big city boster, I think that the effect on those central cities that are re-gentrifying will be positive.
The availability of ultra-low cost housing in South and SoCal/LV will draw the welfare class. As they are already under considerable housing pressure in the cities.
The availability of more easily gentrifiable areas will pull in population from the farther-away suburbs which will become the big losers.
This welfare-class flight would also lower the costs for many city services.
RE in marginal city area + satellite communities with good transportation (NYC think Bronx and Yonkers) might look good.
Now if say certain FA real estate dropped to pennies on the dollar, would it be cost-effective for say NYC to buy up (via a sort of Nature-conservatory middleman)whole developments and hand them out for free?
zendiet | 09.26.08 - 1:05 pm | #
GD, yes. I think "TARP" was used here first. Although I'm sure others came up with the same acronym.
Troubled Asset Relief Program (TARP). The tarp hides all sins.
Best to all.
Don't do it, it's a TARP!!
-still one of the best lines here.
Russia Loans Venezuela $1 Billion for Military - NY Times
Russia Loans Venezuela $1 Billion for Military
zendiet, that's very interesting and all well and good. ... but those area also need jobs and mass transportation to and from those jobs.
"Wachovia = 2½ WaMus"
I thought they were a bit smaller than 2.5 but what do I know!!
Goldman it is and will be.....who else is big enough and, more importantly, connected enough to pull this off.
Gotta be before the Q3 end though...
Ciao
MS
57th post.
wait, why are we doing this again?
"CNBC again says that we common (stupid) people do not "get it".
KRISHNAN,
The richest 1% own 60% of all assets. The poorest 90% own 20% of all assets.
Erin Burnett is a dingbat, peabrain, wall street shill. A disgrace.
Same for the entire financial MSM.
GS will absorb WB upon its demise. A bunch of smaller ones, like National City, Downey, etc. will just be hits on the FDIC fund. If we get lucky, one or two will be bought by Wells Fargo.
Think the "stodgy old bankers" at Wells are having a little party tonight in honor of the demise of Wamu. They can truly say "I told you so"
Haha, apparently Sen. Dianne Feinstein just suggested CEO's who wouldn't participate if there are caps on executive bonuses, should be set out to see on their yacht and set on fire.
On Cspan.
Did we get job number's today??
Not like anyone paid attention to that or the revision to GDP....down.
Ciao
MS
The sheer fact that Bush goes on the Tee Vee and says "PANIC!" is the most disgusting, cowardly, spineless, worthless thing a President can do.
Imagine if FDR got on the fire side chats and shit "We're fucked, America".
And still, all those people who voted for Bush are voting for more of the same.
Calculated Risk writes:
Simple Interest, just a guess.
I can think of a number of banks I'd expect to go soon.
Best Wishes.
Calculated Risk
Do they rhyme with Howney, Rank Pewnited, and Pinevard?
Imagine if FDR got on the fire side chats and shit "We're fucked, America".
If Quentin Tarantino was the presidential speech writer.
Let's assume the $700 billion bailout passes. Okay banks, ready, set, lend.
The bailout is a waste. The unpayable debts should be allowed to die quick and merciful deaths.
repost:
"In a letter to House Speaker Nancy Pelosi, House Minority Leader John Boehner urged that the proposals be "given the consideration they deserve."
The proposals include:
Wall Street Not Taxpayers Should Fund the Recovery
Private Capital Not Tax Dollars Should Be Injected Into Financial Markets
Immediate Transparency, Oversight, and Market Reform "
Me likey so far....
oh,and 84th!
Stock market still beams along on hope... solid evidence that we are nowhere near the bottom of things.
Cmon people we have to have a bailout.I was just tweaking for years,but now I've started up Big Time again.Please do it for old Larry.PLEASE........Anybody got a bump?
AS-
it's not about unpayable debts.....they are just that unrecoverable. L3 write-ups baby!!
All about that.
Ciao
MS
Regarding the marks, of specific concern is that JPM and BofA have assumed 20% losses in their Option Arm portfolios. Wachovia and National City are at 12%. That's a problem.
Comrade Baron Von Helmut III,
Now that's a plan I can get behind, unfortunately with Paulson behind the wheel it doesn't stand a chance.
If this is the price we pay for returning to normal credit and people living within their means I welcome the recession.
WM Bonds (8.25 due 4/2010) trading at less than 3 cents on dollar. Were around 20 cents on Wednesday.
Someone asked about bond prices...www.investinginbonds.com has pricing, may not be real time but pretty close.
I always thought there were laws or regulations that dealt with concentration of deposits at nationwide banks.
does anyone know if those limits are still enforced, what the reg/ is called, or where to find info on it?
askin-
removed in 2004...thanks to the incumbent administration.
They start of all this mess.
Ciao
MS
askin,
laws? limits? enforcement?
Where you from, boy? Not from around here, I see.
midnight deal?
Benito
Juan
Coins
As I mentioned earler, investors appear to be asking "Who is next?"
Actually, I think they appear to be answering "Who is next?"
he Democratic congressman who writes the tax code will be meeting the tax collector. Republicans couldn't be happier.
Rep. Charles Rangel of New York, the gravelly voiced chairman of the House Ways and Means Committee, discovered that he owes back taxes on rental income from his Dominican Republic beach villa.
Republicans, in the minority in both the House and Senate, desperately needed a new Democratic scandal. Before Rangel's ethical troubles became known and there has been no finding of wrongdoing the GOP was trailing 7-2 in the most serious corruption tally: lawmakers indicted or convicted since 2000.
CNBC again says that we common (stupid) people do not "get it".
KRISHNAN
We're not employed by GE;)
so many banks, so little pizza...
To what extent is this bailout a bailout of the FED? I keep hearing they are loading up on trash. Is the panic just caused because they reached their limit and now have to dump all their trash on the taxpayer?
CNBC.com:
House GOP: We'll Oppose Any Bailout of Wall Street
Page not found - - CNBC.com
The proposals include:
* Wall Street Not Taxpayers Should Fund the Recovery
* Private Capital Not Tax Dollars Should Be Injected Into Financial Markets
* Immediate Transparency, Oversight, and Market Reform
So who want's to be this generation's W.C. Hawley and Reed Smoot? The biggest proponents should just go ahead and put their names on the Act.
Seems like they are letting consumers take the next few weeks to bleed it slowly, before the FDIC comes in with a death blow.
Nique
I think that's going to be the model for the biggies takedowns.
Plus it saves Sheila all those pizza costs. Always stick it to the small business guy.
Man I've been busy calling Senators and Congresscritters. Once in a while you actually get through to their aides. (Also sent faxes and emails.)
They have to know that US citizens are pissed.
They usually say "make it brief we got way too many calls coming in". Still haven't been able to get a hold of Shelby's aides, though I've tried many times. Got through to one of Barney Frank's aides. Told him "tell fagboy to say no to Paulson's Boondoggle". Just kidding.
I think I should invest in a demon-dialer.
That Erin Burnett "don't get it" statement really sums up the arrogance of wall street. Here's what I do get:
The majority of U.S. citizens are now wards of the state via FNM, FRE, FHA, social (in)security, medicare, medicaid and a whole host of other government programs.
Who benefits from our inflationary tax and spend policies? CEOs and wall street hucksters.
We get it!
davidd writes:
To what extent is this bailout a bailout of the FED? I keep hearing they are loading up on trash. Is the panic just caused because they reached their limit and now have to dump all their trash on the taxpayer?
davidd | 09.26.08 - 1:25 pm | #
The Fed has an infinite balance sheet. If they run out of Treasuries, they can print money and buy more. Don't think they won't either.
YouTube - The Dark Bailout
is there a correlation between gasparino's face time and the market's performance?
there is definitely a strong positive correlation between his amount of face time and my overall level of anger.
It is called a credit death spiral. First was the prefs of F&F, then Lehman paper, AIG derivs and paper, WaMu paper now worthless, and "the beat goes on".
Eg. SunLife Financial:
Sun Life Financial Inc. (TSX/NYSE: SLF) today announced the following exposures:
Washington Mutual Inc:
- Bond securities with a par value of $18 million
Washington Mutual Bank:
- Bond securities with a par value of $134 million
Washington Mutual Preferred Funding:
- Bond securities with a par value of $118 millio
Jim Jubek (MSNBC) had a good point that Warren Buffet could get a huge profit for his investment. If we the taxpayers are investing and the institution recovers and stock goes up will we share in the profits?
Hey CR,
Thanks for all your hard work over the last week (and before)! I just left you a tip to show my appreciation. Not a ton, but what i can afford right now. I challenge others to do the same!!
FYI: March 13, 2008
Credit default swaps (CDS) measuring bankruptcy risk on Bear Stearns debt rocketed from 246 points to 792 on fears that it had been unable to raise capital to cover mortgage losses and was preparing to invoke Chapter 11 bankruptcy protection.
Re: "Wachovia CDS spreads widen by 827"
I think it would be interesting to see an update on the inbound and outbound shipping containers in a couple of months...
I don't think either of these banks will be seized today, but based on the pace of failures, I'd guess a bank failure is likely
Downey? They've certainly been on death's door long enough.
FDIC: Press Releases - PR-86-2008 9/26/2008
FDIC Press Release
FDIC Simplifies Coverage Rules for Revocable Trust Accounts
This is not over . Remeber to call and write .
Mish's Global Economic Trend Analysis: Take Back America
FDIC: Bank Information Information - Washington Mutual Bank, Henderson, NV and
Washington Mutual Bank FSB, Park City, UT
Bank Acquisition Information
Information for Washington Mutual Bank, Henderson, NV and Washington Mutual Bank, FSB, Park City, UT
Introduction
Press Release
Acquiring Financial Institutions
Question and Answer Guide
Banking Services
Loan Customers
Re: ", investors appear to be asking "Who is next?" "
Make that speculators, not investors!
I will gladly buy my mortgage from the folks who hold it for 3 cents on the dollar.
Oh, and to add to my case against Downey, they are down 43% on the day and may close below $2.00
KRISHNAN writes:
CNBC again says that we common (stupid) people do not "get it".
Fine. Let's just leave. Leave 'em a country of just bankers and politicans.
Where shall we go?
Thats Ballgame Comrades | 09.26.08 - 1:04 pm |
A few of my favorites include:
Johnny Lee - that one's a keeper!
Kim Jong Nemo writes:
Nemo was in transit.
Wachovia = 2½ WaMus
Kim Jong Nemo | Homepage | 09.26.08 - 1:04 pm | #
What is that is that in 'Paulsons'?*
For tonight:
Presidential Debate Bingo Game (PDF)
http://www.ics.uci.edu/~lirani/debatebingo/debate_bingo.pdf
NoVAOnlooker writes:
CNBC.com:
House GOP: We'll Oppose Any Bailout of Wall Street
That's because they can all afford to ride out the depression in Dubai, shagging whores, drinking G&T's and playing euchre.
This is about the best argument I can come up with for publicly financed campaigns.
Have there been enough kind words this site for Shiela on the WAMU takeover? It was neat and clean.
Erin Burnett can lick the ### off my ###. If she's so smart she can fill in the blanks.
Before I finally became a cynic a few years back, the concept of the media (like CNBC, CNN, Fox) being blatant mass manipulators was just a concept. One that I had doubts in.
But at some point you cross a threshold, and you "see the light" as it were. Once you watch these media with a skeptical eye, it's all over. The manipulations become obvious.
CNBC is a bigtime manipulator of the public. Those assheads are constantly making the sheeple feel stupid, like they need CNBC to filter all the goings-on for you, so that you tune in and listen to their propaganda and pumping. I mean it truly is awful.
Got news for BubbleVision:
CNBC can CNBSuck me.
query_tool
Not from the pizza dealers.
Any guesses on whether the Get Shorty rules are extended?
Agree that Sheila should be applauded on the WM bailout -- it was roughly as I predicted last week. It was neat, clean, just, and prevented panic.
Well done Sheila!
I will gladly buy my mortgage from the folks who hold it for 3 cents on the dollar.
That's a really interesting idea. Though I suppose if a homeowner had enough money to buy their own nonperforming loan from the bank (even if it is only for pennies on the dollar) they wouldn't be in default in the first place.
CNBC again says that we common (stupid) people do not "get it".
It's our country, not theirs.
Maybe they need to consider living in a different one.
"Comrade Midwest Product
That's a really interesting idea. Though I suppose if a homeowner had enough money to buy their own nonperforming loan from the bank (even if it is only for pennies on the dollar) they wouldn't be in default in the first place."
That's part of the problem. Lots of people who can afford the mortgage choose not to because they're underwater.
If you check around on places like sdcia.com, foreclosureforum.com, etc. you will see people asking for advice on where to put their $1000's of dollars they got from their HELOCs while they let the bank take back their homes. No shit! Asking if they'll be sued for it, if they should put the $$$ in offshore accounts, etc.
RE: Any guesses on whether the Get Shorty rules are extended?
Extended in date + number of stocks.
And it STILL will not help.
scott writes: WM Bonds (8.25 due 4/2010) trading at less than 3 cents on dollar. Were around 20 cents on Wednesday.
Scott, maybe I'm reading this wrong, but I'm seeing at least one WaMu bond (4.0 due 1/15/2009) with millions of dollars of trades today (9/26/2008) in range of 15-27 cents on the dollar.
See WaMu Trade Data from investinginbonds.com.
Is there any reason for people to be buying these other than CDS coverage? And why the wide range in prices for bonds that should be worth zero??
Have there been enough kind words this site for Shiela on the WAMU takeover? It was neat and clean.
query_tool
She did do that neat and clean. No Mainstreet panic. Props to you girlfriend.
Gavshire Hathaway writes:
Agree that Sheila should be applauded on the WM bailout -- it was roughly as I predicted last week. It was neat, clean, just, and prevented panic.
Well done Sheila!
Gavshire Hathaway | 09.26.08 - 1:34 pm | #
Just remember everybody you are only being told what Sheila wants you to know and what is legally required which isn't much given WAMU's size.
Have there been enough kind words this site for Shiela on the WAMU takeover? It was neat and clean.
I'm not so sure, it was just not out in the open while a major distraction was going on. 1.9 bn for WaMu is .5 cents on the dollar. How'd JPMC get such a deal when Citi was also known to be looking? JPM buys on the contingency that FDIC wipes shareholders/bondholders out.
I'm gonna wait a few weeks before I call this neat and clean.
Where is Tanta?
CNBC used to be a decent biz news channel about 10 years ago.In the last few years, thru personnel reassignments, the quality has declined as they must have made a decision to make things more partisan. Kernan used to be a good stock analyst; now he is such a shill it's ugly so I ignore their pre 9AM chatter. Bloomberg presents more biz news and less golf anecdotes. And Gasbag, today he wants us to believe that this whole financial imbroglio is thanks to the Dems. Does he think we are all stupid? The accountablity for this mess extends to a large group of actors of all stripes and persuasions. There is more but is apparent the producers have a motive and it is not fair or balanced.
OT - Muni VRDO/VRDN Market showing stress.
I have a Municipal Money Market as the sweep for a brokerage account. Like most Muni MM Funds it holds mostly VRDOs and VRDNs for the state I live. The yield on the overall fund has been averaging about 1.7% for the last 3 or 4 months. The yield is now spiking up; 3.8% yesterday and 4.21% today.
Called and spoke with my rep, and he's telling me that in the last 2 weeks the rate resets on the underlying VRDO/VRDNs has gone from the 1.7% range up to 5.5% last week and 7% this week. He believes they could go to 10% next week.
That's obviously not sustainable for short term lending needs of local municipalities. Very reminiscent of the ARP blowup, except these instruments have a put option as long as the insurer retains an investment grade rating.
Not sure if I should bail on this fund or take the higher yield. I've asked them to find out if this fund is enrolling in the new Fed Money Market insurance program - I hadn't realized that the Fund Mgr. has to choose to enroll and pay a premium for the insurance.
Angry Saver writes:
Let's assume the $700 billion bailout passes. Okay banks, ready, set, lend.
The bailout is a waste. The unpayable debts should be allowed to die quick and merciful deaths.
Angry Saver | 09.26.08 - 1:17 pm | #
Say what you will but it won't be quick & merciful. I can see the logic for letting it happen but if 'cascading cross defaults' mean anything the debt death will be as quick and merciful as an ebola pandemic.
Well, Wachovia is actually between 2 and 2½ WaMus.
CNBC is owned by General Electric. GE makes money by selling and financing "stuff."
GE has a vested interest in promoting the faux economy.
Our economy is a sham. Totally phony. The best way to get ahead is to be an inflation gatherer. Our richest citizen (Warren Buffett) is the best of the inflation gatherers.
Okay, the House Repub statement demands:
Wall Street Not Taxpayers Should Fund the Recovery
Private Capital Not Tax Dollars Should Be Injected Into Financial Markets
Immediate Transparency, Oversight, and Market Reform
But, WTF does any of that mean? Wall St pays, not taxpayers? How do you make Wall St pay? By giving them a 2 year cpaital gains tax holiday, as Repubs suggested? Or by a confiscatory tax and clawbacks? Or by stepping aside and letting the 2 or 3 strong remaining banks pull the rug on all the others by marking down the MBS as JPMorgan just did on WaMu, so that JPM, C, and GS each have a 33% share of the system?
Really?
And total transparency now? That's what I want, Swedish style, like FDR did it. bank holiday. shut the doors and then put domestic spying to a good use: expose everyone's books on Wall St. I want that. MP wants that. Conjure wants that. But is that really what Cong Roy Blunt is proposing? really?
This is the most transparent charade I've seen in the past 8 years, and GWB gave us lots of transparent charades. The House repubs saying they want total transparency now even tops GWB's horseshit about promoting democracy in the Middle East (no, not oil extraction with the Saudi princes, democracy, really, trust us)
What do you get when combine idiots with criminals?
Republicans.
If Iwas broke and going broker, I also would max out all my credit before going bankrupt. Is this what America is doing?
$16.7B withdrawn in the last 10 days from WM not a run? They ran out of reserves.
I concur!
Re: I will gladly buy my mortgage from the folks who hold it for 3 cents on the dollar.
What if homeowners were given tax breaks to buy down their mortgages and take them out of pools?????
A public service message from Doc Holiday & Kona
It was inevitable that this bailout would become highly politicized. ...
--
The United States of American was organized to PROTECT THE CREDITORS!
All you born-and-bred American dopes need to read the detailed history of the founding.
Jay's Treaty, what was that for? To PROTECT THE CREDITORS of London. Jay was treated by the public as a traitor after that and his effigies were burned.
Madison understood why it was important to the wealthy and powerful to protect the creditors at the expense of the common public.
The founders were aristocrats, you dopes!
Jas
$16.7B withdrawn in the last 10 days from WM not a run? They ran out of reserves.
alba
But it was stealth run. J6P was not seeing lines out the door of the local WAMU. No panic.
Eric-
Not only extended but shorting over all to be banned-ASX did it last monday. Only to be lifted the day before the election, if you even get one, so that the market falls into the abyss. Keeps voters from you know actually voting.
Can't rule anything out at this point.
Ciao
MS
More cliff diving? The dow is higher.
bank failures and nationalization is bullish for stocks. Buy, Buy, Buy.
Why is everyone so mean to me on this site? I used to work for Goldman, you know?
joe shmoe- But a capital gains tax holiday would help with all the losses, right?
Damn that would help (maybe)
People would refinance mortgages and instead of the homeowner paying the bank to pay down points, the bank pays the homeowner for the refi cash infusion huh, WTF, what say punks?
Erin Burnett writes:
Why is everyone so mean to me on this site? I used to work for Goldman, you know?
Karma.
Johnny Lee, The Dark Bailout is great... thanks for making a Bush speech fun to watch!
It's called "principal forgiveness" anonymous.
Erin Burnett writes:
Why is everyone so mean to me on this site? I used to work for Goldman, you know?
Erin Burnett | 09.26.08 - 1:45 pm | #
You are horrid too look at also
"The Republican proposal backs the removal of regulatory and tax barriers to help facilitate the use of private capital to produce liquidity; temporary tax relief provision to help companies free up capital; and temporary suspension of dividend payments by financial institutions."
The Republican alternative plan is worse than the original--instead of short term theft of $700 billion, it proposes tax and regulatory perks for the very rich. Isn't that how the fiasco started. These critters are motivated by greed, not patriotism.
but if 'cascading cross defaults' mean anything the debt death will be as quick and merciful as an ebola pandemic.
Cut the crap. Investing involves risk. Most CDSs will net out. If a CDS counterparty can't pay, well too bad. Due diligence is not the taxpayer's responsibility.
We've have FDIC insurance and we've backsptopped money market funds. Insurance policies have federal support already.
No bailouts for the rich and irresponsible. Let the free market work. At least after this mess is over, people will still have faith in the system. Once you bailout rich people, you'll be bailing out everyone forever.
the bottom line, in my amateurish opinion, is that as long as residential real estate values continue to decline there will be increasing pressure on home owners who have upside down mortgages to walk away
thus a re-inforcing cycle
additionally the home atm is closed
more layoffs to com
so
the 700 billion bailout fails to address any of these questions and will NOT halt our trip over the waterfall.
i'm a dem who sides with the repubs on this one...the present deal with its current improvements..and there were improvements, equity stakes, oversight ceo pay etc...is still a piece of shit deal
i would vote no
Why is everyone so mean to me on this site? I used to work for Goldman, you know?
Erin Burnett
Go cuddle up to your former boss, hon. He's not having a good week either.
Imagine how much these banks would be down if there weren't short covering to put in a floor. Oh... wait.
WaMu may file for bankruptcy shortly: Merrill Lynch
| Reuters
WaMu may file for bankruptcy shortly: Merrill Lynch
Washington Mutual (WM.N: Quote, Profile, Research, Stock Buzz) may file for bankruptcy shortly, said Merrill Lynch analyst Kenneth Bruce terminating coverage of the stock.
The top U.S. savings and loan bank, whose market value has been virtually wiped out because of soaring mortgage losses, was closed by regulators on Thursday, and its banking assets were sold to JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) for $1.9 billion.
The company witnessed $16.7 billion in deposit outflows from September 15 to September 24, according to an Office of Thrift Supervision statement.
"We suspect the series of ratings downgrades and concerns over the position of U.S. financial institutions, in particular Washington Mutual, led to the deposits outflow," Bruce said.
Shares of Washington Mutual sank 90 percent to 16 cents in morning trade Thursday.
anonymous at 149
(im a dem voting with the repubs on this one)
is mock turtle
Whereismyretirement writes:
Why is everyone so mean to me on this site? I used to work for Goldman, you know?
Erin Burnett
Go cuddle up to your former boss, hon. He's not having a good week either.
And take Becky with you while your at it.
Ricky Ric
exactly...
it is pur boilerplate bullshit.
tax holidays are what they have on their shelves for throwing out in a crisis: fight a war, cut taxes; gas prices throught the roof, cut taxes; crisis on Wall St, cut taxes . . .
they don't even understand the fucking tax code:
capital gains tax holiday = no write off of losses = no way in hell you sell anything that's lost value = markets more stuck . . . except that the cap gains tax holiday would send everyone with any profits remaining to sell, sell, sell anything profitable.
Can you spell historic massive plunge in the markets?????
The House repub idea is 1000 times dumber than the original paulson Plan, and that was pretty fucking stupid to begin with.
Gavshire Hathaway writes:
...Sheila should be applauded
Let us congratulate her in song...
Like they always say, what's good for the geese is always good for the gander...OH SHEILA!
Oh oh Sheila let me love you
Till the morning comes
Oh oh Sheila you know I want
To be the only one
I want to
Di a di da li a di a di da li
Here's a fun little tale from the Kansas City Star to illustrate why WAMU and others are imploding(posted at HousingBubbleBlog):
While on probation from a previous Kansas City federal bank fraud conviction in 2003, Raymond Zwego began constructing his own little housing bubble. He purchased 61 area properties, in many cases using straw buyers and falsified paperwork. He fueled the exercise by illegally obtaining $16.9 million in mortgages.
According to federal court records, 54 of Zwegos 61 property closings during that period eventually resulted in $5.6 million in losses to 25 mortgage lenders, including some of the biggest names in the industry, such as Washington Mutual and Countrywide Financial. One lender, IndyMac Bank, closed earlier this year.
Nearly 50 of Zwegos closings resulted in foreclosures, and many of those homes still stand vacant.
No investigation...banks were lending money to a guy ON PROBATION from a bank fraud conviction...WAMU shareholders ought to sue their board for violation of fiduciary responsibility, for lending to people like this.
CNBC says that all the congress is involved in political theater. This bail-out will pass over the weekend.
I have sent out 4 faxes to each of my senators (CA) and my rep. If they are not up for election, I will not reelect them.
This will be really bad, and they will own waste our taxes.
bank failures and nationalization is bullish for stocks. Buy, Buy, Buy.
Republicans are TRAITORS
I must admit I really do not understand the markets right now.
(points at Wamu)
HA HA!
If you look real close, you can see the pom poms under Erin's desk.
Dow up 25.
"Not sure if I should bail on this fund or take the higher yield. I've asked them to find out if this fund is enrolling in the new Fed Money Market insurance program - I hadn't realized that the Fund Mgr. has to choose to enroll and pay a premium for the insurance."
Careful there. The MM insurance is NOT for money going forward. It is for MM in the fund AS of last Friday.
Seriously? ... So WaMu might only hold the record of "Largest U.S. Bank Failure" for another 5-6 days??
Thats Ballgame Comrades
I'm amazed at how painless Wamu has been. People don't yet realize their 401k's just got raped by one fugly dude. They just know that their jumbo CD is safe.
Wachovia could be interesting... But by waiting for a Friday, it could hold the record for 8 days!
Got Popcorn?
Neil
I'm neither dem or repub and it pains me to say I agree with the repubs on this one.
I don't want it done at all however they seem to be the saner of the three "solutions".
Never thought I'd say that....EVER
Just goes to show how crazy the neocon agenda is when it's own party won't cave to 'em.
Great theater though....
Ciao
MS
Kung Fu Panda lol.
And we're supposed bail these dumbshits out? I don't think so.
The bailout is a waste. The unpayable debts should be allowed to die quick and merciful deaths.
Dryfly,
Consider the fates of Lehman, Bear Stearns, Wamu and Indymac. All died quickly and life went on.
Make no mistake, I see tough times ahead. I just don't think the bailouts are a better solution than letting the markets run their course.
Amazingly, the sun still came up this morning. The kids still jumped out of bed to play this morning. The markets opened this morning. The nearby ATM dispensed cash this morning.
I thought the world was supposed to end without a deal yesterday?
Why are we chasing this deal again?
Opinion on WB Oct. 2.50 puts @ .50? Worth a flyer?
"WAMU shareholders ought to sue their board for violation of fiduciary responsibility"
Can't now...got to get in line with the bondholder's.
Isn't capitalism grand?
Ciao
MS
We need to differentiate between two sets of GOPs here:
If we can get #1 and #2 to stick together, there will be no bailout.
If #2 gets the bright idea that they can make the bailout work in their favor, we're effed.
solution
must stop the hemoraging
for all "home owners" (not flippers and speculators) government assistance in what ever manner necessary to keep people in their homes
gov buy mortgage from holders of securities if it can be untangled from SIV
or
subsidize payments on a reasonable schedule based on income
cramdowns where necessary
litigation and compensatory damage etc against shoddy loan originators who lied to perspective home buyers about refinancing and interest rate structure on mortgage
with 700 billion you could do all this with more than half left over!!!
not a dime to wall street
oh yes and start a "BANK of the United States of America and loan directly to businesses and people and lesser banks.
Had to make a trip at lunch and tuned into O'Rilley (I know, I know) I just couldn't resist.
What a shill, looking out for the little people under his feet while promoting a bailout for Wall Street.
My guess is someone told him his portfolio will be worth .20/1.00 when the dim wit lightbulb finally glows. The bailout buys time to off-shore assets before the smoking crater appears.... Then the Capital Gang will be saying Whocouldanode....
It was inevitable that this bailout would become highly politicized. ...
Yeah, but what's surprising is where the battle lines have been drawn. There's a massive split not so much between the two parties as between the leadership of both and their respective rank & file. Dem & GOP leadership both seem inclined to give the President whatever he wants with some cosmetic changes; non-ranking members of both parties are all over the place.
Cut the crap. Investing involves risk. Most CDSs will net out. If a CDS counterparty can't pay, well too bad. Due diligence is not the taxpayer's responsibility.
We've have FDIC insurance and we've backsptopped money market funds. Insurance policies have federal support already.
You cut the crap.
I have NO PROBLEM with some wanker saying 'no bailout for rich bankers'... I have nothing but contempt for those saying 'oh nothing will happen... quiet merciful death'. Blah blah.
Its gonna be a clusterfuck & the gov't will be bailing the FDIC and all those insurance funds out like crazy... those funds aren't adequately funded for this!!!
So you'll get your 'rescue' [bailout]... only question is do you get the failures and lay offs first or afterwards [those are coming too - regardless of when the bailout happens].
Re: Palin is Bush in DRAG! Naomi klein
YouTube -
the world didn't end..
careful
"People don't yet realize their 401k's just got raped by one fugly dude"
Most will get Q statements and they will see the carnage. Especially sorry for those at the very near retirement age as the mix ws probably set at 75% fixed income and this stuff is falling to 0.
It's ironic that Bernanke is now warning of "too big to fail" while big banks are getting bigger gobbling up failed banks.
The problem is once again the solution. Good grief.
Alan Greenspan vs. Naomi Klein on the Iraq War,
YouTube -
"Is there any reason for people to be buying these other than CDS coverage?"
Probably not. CDS are mostly "physical": the buyers have to put the bond to the protection seller.
Oh, and @On the Clock: "playing euchre"? The only places I know of that play that game are Minn and Wisc. Are you from there?
666 Visitors Online
We have repeatedly hit that number these last 10 days. Creepy.
Conjure says, "TRANSPARENCY NOW!"
"OR ELSE."
Dryfly,
Sorry about the cut the crap, crap. My bad.
Baron Von Helmut III writes: "And take Becky with you while your at it."
Hate on Erin all you like, but leave the Quickster out of it.
I want to
Di a di da li a di a di da li
We'll see what happens when everyone gets their money market statements for Q3....
Congressman DeFazio: We're Going to Be in the Repo Business!
YouTube - Congressman DeFazio: We're Going to Be in the Repo Business!
Good stuff here!!
"OR ELSE."
mp
Conjure's OR ELSEs are never pleasant;)
gosh your right 666 again...it is creepy
"We'll see what happens when everyone gets their money market statements for Q3...."
That another, albeit smaller, reason for the rush...they want the whoosh up that will occur when any deal is announced to soften the blow of that.
Ciao
MS
Angry saver
Leh, Bear, WaMu, and IndyMac did not die natural deaths.
Bear's death was backstopped, Leh was floated by the discount window, WaMu and Indy were handled through FDIC.
I agree that these cases are suggestive about what should be done. It was laissez-faire, it was govt mediated and backstopped and protected.
That is exactly what should happen, but it needs to be systematized. In the cases of Indy and WaMu it is already systematized because it goes through FDIC, and FDIC is on its toes.
I am hoping that the Congressional Dems take charge of the legislation and shift the locus of the rescue from treasury to FDIC or something like FDIC, and also build in much more direct attention to the ground level base of the problem, mortgages and mortgage payers/defaulters (cramdowns, write downs, principal forgiveness, equity sharing on any gains, etc - plus a general stimulus package)
Admiral Ackbar says,
"It's a TARP!"
YouTube -
but stock market turning positive.
everything is fine! mccain has saved the economy and is now going to debate.
the market approves!
Does anyone know an easy way to find out if WaMu is held in a mutual fund instead of looking at each fund individully?
Angry Saver writes:
Dryfly,
Sorry about the cut the crap, crap. My bad.
Angry Saver | 09.26.08 - 1:59 pm | #
Accepted - everyone, myself included, is a bit tense. My apologies as well.
BTW - I agree with you on a lot of this... I would be all for the bailout as structured if I thought it could really avoid pain - it can't. It only reshuffles the sequence of bailouts, lay offs and failures. We'll have some of all before we are done - unfortunately.
I'm still waiting for my "end of the world" on the bailout delay...
Maybe I left it under my bed. Or maybe it fell between the sofa cushions.
mp said: "Conjure says, "TRANSPARENCY NOW!"
"OR ELSE."
I'm wondering if in some odd metaphysical way we are getting transparency.
The Invisible Hand says "Okay, (insert name of financial institution), either you take those toxic securities and mark them to market in an appropriate manner or I'm going to mark your securities to the market value we think they should be at, given what you're got on your books."
And that's how we get WaMu trading at $.16/share.
Just an idea.
Sebastia
I am getting exhausted with news anchors with communications degrees talking about how average folks do not understand what is going on. No wonder they are being replaced by blogs.
It pains me to say this, but speaking as a small business owner, if all credit freezes, I don't get paid by customers which means that I can't pay my employees and myself. It's that simple. We'll be fine for quite a while with that scenario, but our employees won't.
Somebody needs to explain the "why do it in some form or another" that simply.
...the gov't will be bailing the FDIC...
What do you mean "will be"? Look at the way all the deals since Countrywide have been done - FDIC is ALREADY being bailed out.
With WaMu, FHLB got bailed out.
The real question here - and I suspect Conjure may have realized this first - is if all these deals can be done the way they're being done - what is the REAL reason for pushing the Paulson bailout plan?
Congressman DeFazio is GREAT!!!
I am with Dryfly.
And, needless to say, Conjure's "Or Else!" is far more frightening than the thought of seeing GWB talk on TV again, and that was already scary enough.
I think DSL is way overdue to fail. Today that pig is finally slaughtered.
This is what BB is afraid of:
"We had heard through industry sources that GE put a temporary hold on their lending," Vaughan said.
Other restaurant industry deal makers have said in recent days that they have been turned away from GE Capital's franchise lending practice when seeking new loans.
Sharon Zackfia, a restaurant industry analyst, said in an investor note Friday morning that GE Capital has halted new franchisee franchising, although it will continue to honor pre-existing financing agreements.
The action by the financing division of General Electric Co. (GE) is the second major lender to the restaurant industry to pull back this week, following news that Bank of America Corp. (BAC) has declined to increase existing loans to McDonald's Corp. (MCD) franchisees, whose U.S. base is in the midst of installing equipment for sales of lattes, cappuccinos and other drinks.
CNNMoney.com: 404 Page Not Found
Anonymous writes:
Congressman DeFazio: We're Going to Be in the Repo Business!
YouTube - ? v=D3H1CaX91oY
This guys got it.
I am getting exhausted with news anchors with communications degrees talking about how average folks do not understand what is going on. No wonder they are being replaced by blogs.
Bond Girl
And we have a VP candidate with the same type of degree (from U of I!) who could be in charge of the whole shootin' match.
Okay, now even I'm scared.
i side with dryfly and others who say, no matter what there will be much pain
whether we do nothing (relatively speaking...market works it out)
or bailout top down, or bailout bottom up
its too late to avoid the trip over the waterfall
many will be bludgeoned against the rocks below while others, surviving the rocks will drown in the foamy water down stream.
no real good moves left
Anon writes:
Does anyone know an easy way to find out if WaMu is held in a mutual fund instead of looking at each fund individully?
Don't know how current this is. Hope it helps.
WM: WASTE MGMT INC DEL Institutional Ownership
"OR ELSE." - Conjure
Ruh roh.
Anyway, the Democrats have enough votes to pass whatever deal they want. What prevents them is that the Democrats have enough votes to pass whatever deal they want. We talk about Bush's low rating. We don't talk about Congress's lower rating. Democrats are cowards that lack the strength of their convictions. Don't get me wrong. The Republicans in the same position would do the same.
Personally I can think of nothing more dangerous that groundbreaking legislation or emergency legislation or opaque legislation. All three combined have an absolute guarantee of nasty unintended consequences never mind the unsavory intended consequences.
ellie writes:
It pains me to say this, but speaking as a small business owner, if all credit freezes, I don't get paid by customers which means that I can't pay my employees and myself. It's that simple. We'll be fine for quite a while with that scenario, but our employees won't.
Somebody needs to explain the "why do it in some form or another" that simply.
People get that and they are saying tough shit.
@Mr. Sunshine
I want to create fees, artificial values on illiquid securities that I helped create, and generally assist in a unilateral power grab for my old alma mater and guardian of my skeletons...Goldman Sachs.
Congressman Peter DeFazio - Home
People should thank him and support him ASAP!!!
o real good moves left-
mock turtle
I agree with this as well, so why throw up into the air 700b on our way over? Its not going to make the fall any less far or painful. IMO
The real question here - and I suspect Conjure may have realized this first - is if all these deals can be done the way they're being done - what is the REAL reason for pushing the Paulson bailout plan?
To delay the inevitable until there is a new Treasury Secretary in place to absorb the blame?
The base reason for a rescue plan (in general, not necessarily the Paulson plan of course) is to establish some predicatbility and routine so people know better how the unwind will work.
There will still be an unwind, but it will be safer and less costly if it is not done in a panic.
The ad hoc solutions for Bear, LEH, Fannie and Freddie, etc, brought us to the point of Paulson and Bush showing up in public and saying, uh, Houston, we have a problem.
A rescue plan doesn't make the problem vanish. It just puts it under some management.
People get that and they are saying tough shit.
Bond Girl | 09.26.08 - 2:08 pm | #
Well, then they'll get what they ask for.
BRUSSELS/AMSTERDAM, Sept 26 (Reuters) - Belgian-Dutch bank Fortis (other-otc: FORSY.PK - news - people ) denied it faced a liquidity crisis but pledged to speed up asset disposals as it bore the brunt of growing investor unease about Europe's fragile financial sector.
As its shares fell for the fifth straight day on Friday, plumbing a 15-year low in feverish trade on concerns it might have to resort to a fire sale to raise cash, Fortis said it had a funding base of 300 billion euros and solid solvency ratios.
"It's obvious that they stretched their balance sheet to the maximum for (last year's) ABN AMRO acquisition at the peak of the cycle," said one top 10 shareholder in Fortis.
Fortis said it was in talks to raise 5 to 10 billion euros ($7.3-$14.6 billion) from a broader programme of disposals than previously envisaged, possibly including some core assets.
"The bond issuance is shut, they cannot securitise assets, they cannot securitise loans so the only thing they have to do is sell business at fire sale prices to raise capital... It's all a confidence issue," the top-10 investor added.
The intensifying concerns follow Fortis's struggles this year to win over investors after dragging its feet on disclosure of writedowns of risky U.S. mortgage-linked assets, which came only months after its part in 2007's messy 70 billion euros consortium takeover and breakup of Dutch rival ABN AMRO.
"We had heard through industry sources that GE put a temporary hold on their lending," Vaughan said.
I know mfg companies using GE Capital - hell they were cut off MONTHS ago. Pretty ugly watching Gen Xer MBA types who have spent their whole careers relying on 'easy money arbitrage'... who entered the working world after 1990 bust... and trying to adjust to a tight money 'cash flow the business' reality.
Isn't going so well - let me tell you.
Times like these underline the importance of cash and its proper management of both risk and liquidity to protect a business from rainy days.
It's not a rescue plan; it's a bailout plan.
I am getting exhausted with news anchors with communications degrees talking about how average folks do not understand what is going on. No wonder they are being replaced by blogs.
Bond Girl
But erinn burnett is the most dangerous sort. One with an economics degree who spent two years making pitch books for a bunch of useless bankers. She embodies everything repulsive about Wall Street plus the arrogance of the media.
It pains me to say this, but speaking as a small business owner, if all credit freezes, I don't get paid by customers which means that I can't pay my employees and myself. It's that simple. We'll be fine for quite a while with that scenario, but our employees won't.
And exactly what part of this bailout will help you? There's nothing in that forces banks to lend.
This bill is a huge bluff, nothing more. The banks will take our money, dump their crap assets, and continue to horde the cash until the creative destruction is complete.
Does anyone know an easy way to find out if WaMu is held in a mutual fund instead of looking at each fund individully?
Washington Mutual Inc (WAMUQ.OB)
Oops, Anon 2:12 was me.
So far the equity markets aren't panicking. The credit markets are still in whatever state of freeze they've been in. No one is announcing their taking huge losses on their WM positions -- except for TPG and their a PE fund so who cares. Basically, everyone has already marked WM debt to market (BK expectation).
Everything seems to be working the way it is supposed to. What's missing that a bailout has to happen right away or at all?
Bond Girl --
People get that and they are saying tough shit.
Ding ding ding! Right answer.
The small banks and credit unions do not sound like they are screaming for this. I think there is a very strong case for doing nothing just yet.
"GE Capital has halted new franchisee franchising" and "(BAC) has declined to increase existing loans to McDonald's Corp."
But that doesn't mean GEcap or BoA are themselves illiquid. It can mean they don't like the credit exposure of consumer discretionary driven businesses. Same with car dealer financing.
dryfly writes:
BTW - I agree with you on a lot of this... I would be all for the bailout as structured if I thought it could really avoid pain - it can't. It only reshuffles the sequence of bailouts, lay offs and failures. We'll have some of all before we are done - unfortunately.
Do you think a bailout would at least slow down the pace of the failures and layoffs, even if it doesn't alter the magnitude? And, if it is able to accomplish that, could that not improve the secondary impact of said layoffs and failures? One of the "secondary impact" considerations here should be social unrest, as I tend to think a depression now would cause much more social unrest than the one in the 1930's.
After the bailout,,and JPM's toxic paper is bought by the fed,,,JPM will be numerouno in the world..
Comrade Baron Von Helmut III--
Thank you for that link!!
I see I dodged the WaMu bullet by selling Vanguard Windsor II (course the fund that I bought has been sucking wind). Now gotta check the rest of my funds to see how much exposure they (I) have to financial institutions.
"It pains me to say this, but speaking as a small business owner, if all credit freezes, I don't get paid by customers which means that I can't pay my employees and myself. It's that simple. We'll be fine for quite a while with that scenario, but our employees won't."
Let me guess you selel some worthless service or item
One other thought,
I hardly think fewer McDonald's in the world would be a bad thing...
There was a great comment by Austin Tex on the earlier Wachovia/Nat'l City thread. Austin said an econominst has a theory that the banks are "gaming" each other by not lending reserves. I think so too. It's kinda starting to remind me of Agatha Christie's "And Then There Were None", with banks getting murdered instead of people.
I kept hearing about how flushed with cash all these corporations were for the last few years...and now I wonder what happen to all of that.
Has it all been burned up already because of lack of liquidity in CP?
Or has it been poorly managed?
Probably a bit of both with more weighting to the poor management side.
you know, most of the arguments offered here against any Federal action were made verbatim during the New Deal . . . you can look it up.
Now GWB is no FDR. He's not Hoover or Millard Fillmore or even James Buchanan, for shit's sake. He's a high functioning Sarah Palin in a monkey suit.
Still, economically today is 1929. Politically it is September 1932. The wind is blowing, and blowing hard.
If Sheila Bair was doing her job and Don Powell before her WAMU would never have failed. Total lack of regulation or oversight... don't get me started..
Ellie:
Well, then they'll get what they ask for.
We're gonna get it anyway.
ellie writes:
It pains me to say this, but speaking "as a small business owner, if all credit freezes, I don't get paid by customers which means that I can't pay my employees and myself. It's that simple. We'll be fine for quite a while with that scenario, but our employees won't.
Somebody needs to explain the "why do it in some form or another" that simply."
ellie, small business will adjust and move to cash. Is it hard? yes. Is it going to be painful? yes.
I come from three generations of small business owners (I am the first to break that mold) and I saw them deal in cash (my Dad) and yet make a 22 person payroll. My grandmother ran a small business during the depression and through the 40s. She had an ice cream shop and traded sugar coupons with her customers in exchange for feeding the locals (they did lunch trade too). It's a paradigm shift, painful and going to be widespread.
credit markets are trying to hold main street hostage. What happen to the we don't negotiate meme
I don't really care whether they get the bailout or not, but if they do get it I want it to come with a kick in the nuts to those bastards that will knock the wind out of them for the next 50 years.
Congressman DeFazio: We're Going to Be in the Repo Business!
That's the stupidity of all of them...they don't realize they've been in that business since last March.
Ciao
MS
And exactly what part of this bailout will help you? There's nothing in that forces banks to lend.
Um, hopefully it will ease the credit markets so that our long-time clients can still pay their bills and stay in business (as most have for 30-100 years). This means they'll still hopefully want to pay for our services. What do I know, I've only been in business for 25 years.
Ellie,
(1) It is highly unlikely the bailout will do anything to improve your situation, for reasons that have been discussed extensively here.
(2) Even if it did, I do not pay taxes to keep your employees occupied. It is not my fault your company depends on credit, anymore than it is my problem that someone took out a mortgage thinking they could use their credit cards to buy food forever.
WB is -36% now.
Darn you shorts.. err or not.
Anonymous writes:
Congressman DeFazio: We're Going to Be in the Repo Business!
Before this ends they be lanlordin too, you just see.
Bond Girl --
People get that and they are saying tough shit.
I'm a broken record, so forgive me: The importance of cash-on-hand will be reintroduced to businesses, big and small.
It will be painful, but we will be stronger for it.
There will still be an unwind, but it will be safer and less costly if it is not done in a panic.
Prove it. That it'll be cheaper, I mean.
WaMu is the biggest bank failure in history and it cost taxpayers a maximum of $60B. $60B for the biggest bank failure seems pretty affordable relative to the effective blank check currently under consideration.
I won't make a damn bit of difference in the long run whether there's a deal or not - but with NO deal we at least have a chance of seeing the skeletons in the closet.
With a deal it will all be buried and we'll learn NOTHING.
Do you think a bailout would at least slow down the pace of the failures and layoffs, even if it doesn't alter the magnitude?
Maybe. But at what cost and are there better [less costly and more targeted] ways to do the same thing?
Say do something without passing it through the bowels of Wall Street first? Something will come out the other end but is that something we will want?
Before you do something [prescribe a cure] - ask what is the problem and what end result you want to accomplish [what is the desirable end condition]? Only then offer a solution based on that.
Have any of you heard any talk about this??? I mean they say 'Avoid Armageddon'... WTF!!! Please define then we'll consider targeted options.
No one is announcing their taking huge losses on their WM positions -- except for TPG and their a PE fund so who cares. Basically, everyone has already marked WM debt to market (BK expectation).
BZZZZZZT...wrong on so many levels.
Ciao
MS
There will still be an unwind, but it will be safer and less costly if it is not done in a panic.
Nonsense, it will cost the same. The distribution, however, will be vastly different.
And the behaviors of businesses afterwards will be greatly affected by whether insensible investment is rewarded or not.
Is it safe to say that "real estate only goes up" is a false premise?
It's just unbelievable that this flaming pile of dogsh*t that we call an economy could keep pushing the limits on home prices.
I mean virtually every check and balance in the system failed.
That's the SYSTEMIC risk.
Um, hopefully it will ease the credit markets so that our long-time clients can still pay their bills and stay in business (as most have for 30-100 years). This means they'll still hopefully want to pay for our services. What do I know, I've only been in business for 25 years.
Why are people paying bills (which are credit, right?) with credit? Seems like a formula for disaster....
dryfly- "I know mfg companies using GE Capital"
Dryfly, I'm reluctant to say this because your livelihood may be linked to some of your clients using GE Capital, but I'm going to say it anyway for those who don't know:
THE PEOPLE AT GE CAPITAL ARE MONEY WHORES.
Anyone who does business with them should know better.
Regarding "cascading defaults."
We used to just call those "bad investments" or "investment losses."
Also, the entire economy has always been connected and dependent on credit.
Banks were spoiled by asset inflation as it was easy money. Or appeared to be.
"ellie writes:
Um, hopefully it will ease the credit markets so that our long-time clients can still pay their bills and stay in business (as most have for 30-100 years). This means they'll still hopefully want to pay for our services. What do I know, I've only been in business for 25 years."
Hope, yes, that's a great strategy. Worth committing trillions to.
Your employees can grin and bear it, if that's what it comes to. 15 years ago the state of CA issued IOUs in lieu of paychecks for a month or two. CA survived you can too.
Please don't give in to the fearmongering.
FRED writes:
credit markets are trying to hold main street hostage. What happen to the we don't negotiate meme
FRED | 09.26.08 - 2:16 pm | #
Its always been that way - always will be. There is no way you can cut the head off the credit markets and NOT hurt main street. But conversely main street has been taking it on the chin for a long time - just now effecting the credit markets [via foreclosure & 'walk away']...
Whocoodanode?
Mr Sunshine
You just proved it for me.
WaMu's death was not natural laissez-faire. It was done in FDIC's hospice.
Okay, a cost of $60B for WaMu. Multiply for 10 (off the cuff, doubtlessly more counting Bear, F & F, Indy, and all to come) and you've $600B already.
You're providing the mirror image of the no-risk-because-real-estate-only-goes-up bubble.
Why are people paying bills (which are credit, right?) with credit? Seems like a formula for disaster....
Anon | 09.26.08 - 2:22 pm | #
Um, has anyone heard about cash flow--or has anyone here ever managed it before? (Rhetorical question obviously, since the answer appears to be no.)
Can anyone e'splain to me why CDS are even still being written?
Just keep pouring gas on the derivative fire? Is that productive?
Dryfly sez:
Before you do something [prescribe a cure] - ask what is the problem and what end result you want to accomplish [what is the desirable end condition]? Only then offer a solution based on that.
Have any of you heard any talk about this??? I mean they say 'Avoid Armageddon'... WTF!!! Please define then we'll consider targeted options.
This is exactly what's driving me nuts. WHAT IS THE FAILURE MECHANISM WE'RE SUPPOSED TO SHORT-CIRCUIT?
I've asked my reps, my Senators, staffs of the banking committees, nobody knows. I am sure it's in the presentation Paulson and Bernanke made to Congressional leadership last week; I've been begging the various offices to get it and release it. (I'd rather do something futile than nothing at all...)
My own guess is that there could be wholesale freezeup on rollover of commercial paper on Tuesday. But why do I have to guess?
"mp: THE PEOPLE AT GE CAPITAL ARE MONEY WHORES."
Huh? Is there another type of whore?
...hopefully it will ease the credit markets so that our long-time clients can still pay their bills and stay in business...
I don't mean this harshly but - if your business is that dependent on other people getting cheap credit - that's not really a sustainable model.
@ellie: A few states (TX is one, IL is another) still have broad and profitable unit or local branching banks. Small, but profitable. They can, do, and will, serve a lot of small business support, and all states still have small, "community" banks.
But it sounds like your fear is not your own capital financing, but trade credit financing. And, maybe for good reason, few bankers are going to be too receptive to expanding A/R lines right now. Depending on what you sell, you might have to change your trade terms. Not that helps sales, of course.
"you know, most of the arguments offered here against any Federal action were made verbatim during the New Deal"
So was the massive government involvement through the New Deal what got us out of The Great Depression? Did it shorten or lengthen the time spent in The Great Depression?
a business that has adequate positive cash flow should be able to pay its bills and chip into the piggy bank for the lean season.
borrowing essentially defines a failure to adequately cash flow.
HAHAHA! In...McDonalds we trust! CDS for Mcdonalds per 10 million is 28 000 dollars and for the USofA...30 000!
The small banks and credit unions do not sound like they are screaming for this. I think there is a very strong case for doing nothing just yet.
There will be other sources of capital.
We will go into a deflationary period, and it will suck, but this is going to happen and it is the consequence for letting leverage get out of hand. If people think the Treasury borrowing money to fill in the gap left by the shadow banking system is going to have a positive effect, they are absolutely deluded, bottom line. But go on thinking that way, Ellie, that is exactly what President Bush et al are trying to sell you.
OMFG it's not ellie it's E.L.E.
as in Extinction Level Event!
Oh shit!
"you know, most of the arguments offered here against any Federal action were made verbatim during the New Deal"
Also, is it your view that massive government intervention can get us back to and SUSTAIN the Goldilocks economy? You know, the one built upon extremely lose credit, and consumers buying things they could not afford, and people not saving for retirement and emergencies, because, well, with a Goldilocks economy, no one loses a job and house prices always go up?
Sounds like your business model was flawed Ellie....
ArroyoG
No, the New Deal did not end the depression and didn't shorten it.
But it did keep the country together, preserved democracy, set up the US to succeed in WWII and then left the country a solid material and institutional infrastructure that served us quite well until . . . .
Okay, a cost of $60B for WaMu. Multiply for 10 (off the cuff, doubtlessly more counting Bear, F & F, Indy, and all to come) and you've $600B already.
That's not the question - prove to me that $700B is enough.
If you can't, then you haven't even defined the problem.
Um, has anyone heard about cash flow--or has anyone here ever managed it before? (Rhetorical question obviously, since the answer appears to be no.)
Why do you think your inability to manage cash flow with a prudent cushion is somebody else's problem?
Take out a mirror. Ask the wise person that you see if you might be running your biz a tad close to the edge.
The bank on your tellie will now explode.
BZZZZZZT...wrong on so many levels.
MS,
Other than TPG, who is taking the new big loss on WM right now? The market doesn't seem to care -- banks are up.
ArroyoG
I most certainly have never said any such thing about the "goldilocks" economy. that's your fantasy, not mine.
mp writes: THE PEOPLE AT GE CAPITAL ARE MONEY WHORES.
William S. Burroughs: "Beware of whores who say they don't want money. The hell they don't. What they mean is they want more money. Much more. They are the most expensive whores that can be got."
Alan Blinder (princeton econ) just got half of the real reason for the rush of the bailout right, I totally agree with him that this bailout supplies a floor for L3 assets but he fails to say why.
It's so that the rest of the shit that the gov't can't buy, due to sheer scope and breadth, will have "observable market prices".
Can you imagine the orgy that will ensue when the previous write-downs (not enough to begin with IMO) have a price that is at PAR?
All the write-downs of the past year will be automatically written up and then placed back on the balance sheets at full value........
Imagine the love fest that will occur.
Ciao
MS
Also, the entire economy has always been connected and dependent on credit.
Nothing like it is now - seriously.
When I started in my biz... I remember talking to biz contacts back in Chicago from a pay phone out in rural Nebraska. It was like doing business with Mars. Circa 1988.
Fast forward to today - I'm on BBerries with folks around the world real-time 'conferencing' about products in production in China and selling in markets here in NAFTA Zone - SIMULTANEOUSLY.
We are all FAR more connected - for good and bad. The good has meant we are all richer [in real stuff]... but the fallout from the 'bad' is likely to be as pronounced.
Point is (1) is t he bad avoidable? - I say 'no' and (2) will we be wiser afterward? I sure hope so.
My guess is we'll all understand 'counterparty risk' a whole lot better even with the eventual 'bailouts'... and there will be some more bailouts before this is done.
Um, has anyone heard about cash flow--or has anyone here ever managed it before? (Rhetorical question obviously, since the answer appears to be no.)
ellie
ellie, my dad managed cashflow with cash. And he wholesaled a perishable product that was dependant on a prospering economy. He carried some of his customers for 2 years when things were tight in the 80s. And we still lived the American Dream as far as standard of living. That's what CASHflow means. What your dealing with is CREDITflow. Not an indefinite business model.
The markets action today reminds me of the term "Greenspan Put"
Except know it's the "Paulson Call"
No shorts combined with the possibility of a $700 PPT fund is keeping this market afloat
I'm just waiting for a 3:30 PM news item to push this market down to allow for "Mushroom Cloud" rhetoric all weekend
The dead entrails on my dogfish tells me that once this bailout is completed, a few events will occur the dollar will soar along with the equity markets and gold will drop like a stone.
Is this current mess somekind of Fear and Loathing in Washington DC? We seriously need a Gonzoman there with Paulson, Pelosi and Dubya!
i'm starting to get the feeling that in another couple of weeks we won't need the $700B bail out. Most of the major bad banks will have been put out of business or will have raised capital. It's amazing how capitalism works. We can now waste the money on other priorities, such as ethanol and teaching creationism.
"Other than TPG, who is taking the new big loss on WM right now? "
Silly rabbit......those won't be done until after the 3rd qtr.
How long did it take to get anything on FNM, FRE, LEH, BSC,???
We know who holds it......but it's up to them to disclose. Notice a little problem with that?
Ciao
MS
"And exactly what part of this bailout will help you? There's nothing in that forces banks to lend."
Ellie: "Um, hopefully it will ease the credit markets"
$700B (total, or more) for "hopefully"? This is a plan? No, I don't have an alternative. But endorsing a $700B plan because "hopefully" banks will start lending again is a bit much, doncha think?
Huh? Is there another type of whore?
Crack whores. Never forget about those who would whore themselves for crack.
Mr Sunshine
I never made an argument that $700B is enough. You're thinking about the Paulson plan, not anything I said.
I spoke about management over the unwind. Not a buy out or bailout or rescue price. I think there is no such thing. For example, no such figure can be set for the FDIC. It has reserves, it has a budget, planning is done as best as possible (we hope) but in the end the FDIC stands on the "full faith and credit of the USA," not any specific dollar figure.
The Paulson Plan had a $700B figure that we know was pulled out of someone's ass. But the Paulson Plan has been dead since the day the 2 pages of gibberish were handed to Congressional leaders last weekend.
"supplies a floor for L3 assets"
Did he expicitly refer to Level (or Tier) 3 assets? If so, and he didn't say what or who that was important for, then put him over in the "shill" column.
barely
I see BB is afraid of no lattes or cappuccinos at MCD.
ew thread ya'll
"Midwest Product
Crack whores. Never forget about those who would whore themselves for crack."
AKA whores with no teeth. That's what I call progress.
Hey all the crack whores I deal with always ask for cash.
Dryfly, I'm reluctant to say this because your livelihood may be linked to some of your clients using GE Capital, but I'm going to say it anyway for those who don't know:
THE PEOPLE AT GE CAPITAL ARE MONEY WHORES.
Anyone who does business with them should know better.
mp | 09.26.08 - 2:22 pm | #
LOL...
I am already a dyed in the wool believer in that gospel brother mp... you sir are preaching to the choir.
dryfly writes:
Also, the entire economy has always been connected and dependent on credit.
Nothing like it is now - seriously.
This is a very different situation. We never had the outstanding derivatives that we have now, nor the hedge fund culture.
"Whereismyretirement writes:
CNBC again says that we common (stupid) people do not "get it".
KRISHNAN
We're not employed by GE;)
Whereismyretirement"
HEY, i work for those crooks =] (engineer)
It is truly sad Hunter Thompson decided to check out. I would have loved to see what he made of our current economic and political situation;)
"Um, has anyone heard about cash flow--or has anyone here ever managed it before?"
"Ask the wise person that you see if you might be running your biz a tad close to the edge."
Easy credit always favors those who use it to the max...until the day it doesn't. People got used to it, in all realms. That's where most of this pain is coming from. People got used to easy credit, expected it, made bets on it, leveraged it, came to depend on it, and came to think that they deserved it.
"That's not the question - prove to me that $700B is enough"
Former Vice Chm of Goldman Sucks thinks 4-5 TRILLION are need to recap the banks, using August data.
"If you wonder if he's gone to Heaven or Hell rest assured he will check out them both, find out which one Richard Milhous Nixon went to and go there. He could never stand being bored. But there must be Football too and Peacocks..."
From one of Hunter's eulogies. He really would have gotten into the "ponies for everyone". LOL
Govy said: "i'm starting to get the feeling that in another couple of weeks we won't need the $700B bail out. Most of the major bad banks will have been put out of business or will have raised capital. It's amazing how capitalism works...."
That would be typical of the timetable for Federal government "solutions" to a problem: It locks the barn-door after the horses have come back home.
S.
or the hedge fund culture.
Bond Girl
nor the arrogance, nor the sense of entitlement nor having the experience of being poor and begging for food.
He didn't say Level 3 explicitly however he used a quote from Bernancke from earlier in the year that was an answer to a question about L3 and the growing use to place all this debt into it by the I-banks
"we need to find out what these things are really worth"
So ,in essence, he is halfway there but he is a shill because he doesn't implicitly say in his own words that is what price discovery is all about with worthless "assets"
Hence the continuing argument of "setting a floor"....
In what? Is the question that needs to be asked.
Ciao
MS
Silly rabbit......those won't be done until after the 3rd qtr.
How long did it take to get anything on FNM, FRE, LEH, BSC,???
Q3 is over Tuesday so we'll see soon enough. But from what I am reading most everybody wrote down their WM bonds to pennies last quarter --observable marks from where they have been trading. The stock has been in the tank for months now so there shouldn't be an issue there.
I really don't think we're going to see much fallout from this one but time will tell. In any event, the argument you are making is the same one Paulson tried to make ... grave consequences, etc...
I'm just not buying it yet.
Question from the crowd:
I am getting emails from a few people about Wachovia, the news is starting to spread. If they go BK this afternoon, do we see a bank run or any type of panic? Or does j6p just wonder why his ATM card doesn't work tonight?
$700 B Just a Start -
Barry Riztholz on Forbes.com
TypePad
$700 B Just a Start - Barry Ritholtz
TypePad
Killing plain vanilla banks causes little hard ship except to the equity and debt holders (20-25% of assets). And then we can sell the assets to some one else at a discount - everybody is happy. There are 8000 banks in this country. Let's get on with it....
The argument you are making is the same one Paulson tried to make ... grave consequences, etc...
Not my argument at all. I am saying that these institutions excel at hiding real results until they can't any longer. If they wait until after Tuesday you won't hear about it until early January.
I said nothing of the sort that you imply.
Real loss recognition does not occur in large part because it does not have to.
Read up a bit on accounting rules regarding loss recognition.
As far as your statement above....sorry you see things that way.....I don't.
Ciao
MS
"the po' folks just don't get it"
And neither, apparently, does the 3T a day fx market or the 1T a day bond market or the commodity markets. Just looked at my quote screen getting ready to get to the day's business. Here it is:
EUR.USD, ZB, ZC, CL, ZG, EUR.JPY, USD.JUP, GPB.USD, ES.
Currencies flat, Tbonds up at little, corn down a little, oil down a little, gold up a little, s&p down 7. Nothing. Nothing at all. And Baltic Dry plunge continues, down 10% from yesterday.
The world economy is yawning right now. Or, as CNBC might say "World economy frozen in fear waiting for bailout."
Still, economically today is 1929. Politically it is September 1932.
Would that it were our 1789.
My problem with the bailout is a perception/political one .... once Congress bails out Wall Street for $700 Billion, how does it ever say no to another bailout again? Campaign contributions/lobbying will increase exponentially as every industry lines up for its piece of the pie. Corporate socialism is guaranteed.
Saying no to a Wall Street bailout would send the contrary message and point to a different direction for the country.
So what is the cost of not doing the bailout?
A 25% haircut on all retirement accounts and our standard of living for a generation or actual starvation in America? I can live with the former.
Not my argument at all. I am saying that these institutions excel at hiding real results until they can't any longer. If they wait until after Tuesday you won't hear about it until early January.
Well, I certainly agree about the hiding part. For all our sakes I just hope you aren't right about this one.
Thanks for the perspective. It is appreciated.
holy moly: phone call summary-
Deal is blowing up. house r's realize that they get unelected if they do this thing. If armegeddon happens, they come back to admin the clean up. D's looking for reason to walk cuz they're getting the same calls, will pin on house R's.
Everyone looking for a token out.