It is amazing when the bubble pops and inside is... nothing.
All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.
wally writes:
It is amazing when the bubble pops and inside is... nothing.
All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.
That is mind-boggling isn't it? Funny to think that many financiers said not too long ago that derivatives actually decrease risk in the system because they redistribute risk to other parties that can assume more.
if you don't want to click the link: TD Ameritrade closed his short yesterday at the closing price, instead of pennies that he should have closed out at today.
Our No Money System bailout has been torpedoed by unscrupulous speculators who stole $700 billion dollars of Acapulco Gold and are refusing to return it to the Glorious People's Committee for the Maintainence of Our Glorious No Money.
Please, please, please, pretty please return the gold buds now..do not smoke away the proceeds of our Glorious No Money System.
Various gangs (including the two political parties and corporations) rule over Americans and propaganda is used to keep born-and-bred American dopes in line.
Fate of Gangistan:
Democracy --> Rule of the Moneybags (NOW) --> Rule of the Mobs --> Warlords --> Kings.
The broker was HONEST. This is honestly what Countryfried and the rest offerred. Strange thing was that they still made the borrower jump through hoops. Very weird. It was like a cargo cult activity. You hammer together something that sorta LOOKS like an airplane and you think it's gonna fly. You hammer together something that looks like a secured loan and you think it's gonna be paid back.
I used to look at the people and wonder how they could afford a peanut butter sandwich for dinner. I honestly thought that they were gonna (illegally) rent out more rooms than is customary in Hialeah/Miami.
I care. I am really happy this is happening so close to the election so that the letters, calls, etc. have an impact. Otherwise our reps would just go along and assume we'd forget about it by the time the election rolls around.
I know I'm late to this party, but Erin Burnett is not a journalist; she's a fully-fledged member of a power structure that wants its bill, and wants it now. She really is an embarrassment to a hard-to-embarrass profession. The only question is --who is she tricking for here --Goldman or GE?
Nat City has a lot of money in small to medium businesses - mfgrs, service providers, etc. - these loans have to be going badly. Automotive & Mfg PEs. I know a couple that are for certain in trouble (know the companies & they can't roll over).
That is absolutely insane about the open short on WaMu. Absolutely insane. I can see them changing the rules on the kinds of transactions that can be made - I don't agree with it, but I understand it. I do not understand them mandating that you have to close out a transaction that is open.
He doesn't really have any rights there either - he can go into arbitration with his broker, but that won't turn out well.
I care. I am really happy this is happening so close to the election so that the letters, calls, etc. have an impact.
True. I completely understand the political cynicism yesterday by those upset by the reported agreement. No polyanna myself, I know that moneyed interests are entrenched in Congress. But I also saw the effects yesterday on constituent anger and feedback and knew it was having an effect.
Liz, florida has always been a Mecca of fraud. Since the 1920's, it's been home to conmen and swindlers.
We're in the 3rd inning of this. Gonna get a lot worse. Nothing is selling in Fl. Even the REO's and shortsales have dried up. The courts are swamped with foreclosures. My guess is at least 2010 before the dust settles.
I was interested in 4 foreclosures,
They were way above average,, by the time bidding was done,,i didnt have a chance, price opened 200000 low, and finished 200000 high or what the price was at top of market,,,go figure.
That is mind-boggling isn't it? Funny to think that many financiers said not too long ago that derivatives actually decrease risk in the system because they redistribute risk to other parties that can assume more.
This is what lack of transparency gets you. You have a same problem in IT: say your company wants two compeletely different fiberoptic links out of you building so that if one goes down the other's still there.
So you lease a link from one provider, and another from another provider. Then those providers go out and lease fiber from someone else because that's cheaper, and don't need to tell you this. Then those guys they leased from do it again. Then you find out, perhaps at a sort of inopportune moment, that those links are actually on the same stupid piece of fiber. Oops.
"what if nothing terrible happens to mainstreet - if there is no bailout-"
Catholic girl,
Main Street wil suffer no matter what. Fraudsters have done the dirty deed years ago by herding 30,000,000 American households into Debt Concentration Camps.
There are consequences to be ruled over by organized gangs.
Erin Biurnett and the crowd at CNBC say that the individual investor needs to be "educated". Presumably by Wall Street welfare queens like Kudlow and Cramer.
It is reckless for public officials and media to be using terms like "financial armageddon" to sell a bailout.
It really is, but it's an indication of desparation. The problem with that arguement is that the Democratic led house could pass this bill right now. They have the majority. All they're looking for is cover from the Republicans. So if they truly believe it's so urgent, pass the effing bill already.
Oh, I know Baron. But we are down 30% on housing. I see losses of about 1% a month. Hmmm that means about 2 years more. If we reach 2% a month than a year. So 3rd to 6th inning depending. Short sales I know about aren't happening because banks refuse to accept reality, not because buyers aren't willing to buy a bargain. A vulture who has been on the sidelines for about 5 years is dipping his toe in the water. Good sign, he's very good at vultching.
I have always said...as an appraiser...all this crap is stacked on top of the (asset) house. Guess what...the financial termites have eaten the homes alive. House is worthless....so is the financial papers stacked on the rooftops. Simple.....Why complicate it? Rick is right a vote of NO confidence is beacuse these idiots are selling lies. The Gov't and homeowners are BOTH insolvent.
i have client chicago suburb ninja loan 93% 1st/2nd from countrywide. he moved out of country 6 mos ago. no mortgage pmt for 10 months now and counting. house falling apart.
countrywide turned down short sale offer of 85% of original purchase price (would have been 90% of debt)
same in fla?
(you know theyre doing this to commit balance sheet fraud, even now under BoA)
Main street will have a terrible time, bailout or no bailout. We'll be stuck with higher taxes from state and local governments because of the decline in property values and consumption. Our governments will be struggling to keep up, so there will be little community investment.
With the bailout, all the feds are doing is taking away some of their financial flexibility to deal with the economic downturn. They would be better off letting the financial system work itself out and using the money for public projects, which will take some of the burden off of locals and contribute to employment.
Liz, you talking about Jack? I remmber whenhe was in the stock market biz way back when. He's a smart guy but a little shady. I listen to Mike Morgan. He knows his stuff.
The problem I see with the REO's and shortsales are that they are still asking for 2005 prices. None of the ones I have seen will cash flow positive. It's a mess. MY back of the envelope math says we need another 20% or so downside.
Does anyone know how the Senate shakes out on these competing plans? I suppose the more salient question is Does anyone know how Lieberman comes down? Wait, I've answered my own question.
Same in Florida, fred. Yep. Balance sheet fraud. Why can't the congress address this and force lenders to sell REOs? Isn't there some regulation about this?
Agreed Comrade Baron. 50% off from peak, except new tower condos, those 80-90% off peak because of maintenance assessment problems. Or they become welfare hotels.
I would expect a run on WaMu. People panic and don't understand that their money is safe. Human psychology is something MS might not have calculated into the equation. Those deposits might just dwindle down.
One of the economists on Shelby's letters posited that the freeze in the money markets might have a "game theory" component, with the the banks who would benefit from the bailout withholding activity to add to the urgency. (Read last night, and lost track of the link)
I'm no conspirisist, but with the Fed working to bring the FedFunds UP into the target, and with the volume of credit the FED has poured into the system over the last ten days, one does have to wonder a little.
The banks don't want to sell the REO's. THey don't want to mark to market them. THey are still carrying them on the books at appraised value- LOL. And they are still using accounting gimmicks to record revenue from ARMs and Beg AM's at full amount, even though we know that a high % of them will Never pay. That's why they won't even take back the homes. They don't want them.
I went to a few auctions and 99.9% of them were no bid/$100 bid, with the lender buying them back. What do we have,a 4 year visible supply?
And from what I hear CA amd AZ are just as bad if not worse.
==
"That is mind-boggling isn't it? Funny to think that many financiers said not too long ago that derivatives actually decrease risk in the system because they redistribute risk to other parties that can assume more."
They were supported by evildoers Greenspan and Bernanke. They sang the praises of "financial innovation," a codeword for schemes and thievery. Only in Gangistan.
"Why can't the congress address this and force lenders to sell REOs? Isn't there some regulation about this?"
lawyerliz | 09.26.08 - 10:31 am | #
liz,
A guy here at work had his wife run off and leave him with 2 kids. He can't afford the house so he saw a lawyer about BK. She told him it would be a minimum of 2 years before he was kicked out for not making a payment. According to her the only properties actively getting taken over and trying to be resold are waterfront...This is Sarasota County.
BTW...You should see the empties in Charlotte and Lee counties...Yowsa.
KRISHNAN writes:
Erin Biurnett and the crowd at CNBC say that the individual investor needs to be "educated". Presumably by Wall Street welfare queens like Kudlow and Cramer.
The only thing the individual investor needs to do is get 100 percent out of the stock ASAP and cut his or her losses. Stash cash.
FDIC's announcement that WAMU would have zero impact to the deposit insurance fund may prove true, however there will be a significant impact to FDIC's operating budget which is funded by deposit insurance.
"Senator Barbara Boxer, Democrat of California, has received nearly 17,000 e-mail messages, nearly all opposed to the bailout, her office said. More than 2,000 constituents called Ms. Boxers California office on Tuesday alone; just 40 favored the bailout. Her Washington office received 918 calls. Just one supported the rescue plan.
Senator Sherrod Brown, Democrat of Ohio, said he had been getting 2,000 e-mail messages and telephone calls a day, roughly 95 percent opposed. When Senator Bernard Sanders, the Vermont independent who votes with Democrats, posted a petition on his Web site asking Mr. Paulson to require that taxpayers receive an equity stake in the bailed-out companies, more than 20,000 people signed.
We certainly have never brought in 20,000 names in a day and a half, Mr. Sanders said, sounding astonished. For us, thats off the wall.
A measure of future economic growth in the United States fell to a fresh five-year low and its annualized growth rate dove to a 28-year low, indicating the recession will likely drag on regardless of policy actions, a research group said on Friday.
WASHINGTON (Reuters) - House Speaker Nancy Pelosi said on Friday a plan to rescue U.S. financial institutions "has to happen," but final agreement is up to conservative Republicans who revolted against the plan being negotiated between Congress and the Treasury Department.
"It will happen because it has to happen," Pelosi, a California Democrat, said in an interview with ABC's "Good Morning America." "I would hope that we could come to agreement in the next 24 hours."
JPM sets a 20% loss rate for Option ARMS .. I dunno, that sounds low to me.. I just have trouble imagining anyone on pick-a-pay (nearly all pay minimum) surviving.
If you are still substantially long equities, you blew your chance to get out last Friday. If they pass a bailout plan in the near future, the market will undoubtedly rally, and you will have another chance to cut your losses. Don't blow that chance.
Has anyone discussed the Republican alternative bailout of insurance, loans, and capital gains tax holiday?
Here's a snip of commentary from a Time blog - but first, the money quote:
"If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere."
It calls for a two-year suspension of the capital gains tax to "encourag[e] corporations to sell unwanted assets." But the toxic mortgage securities clogging up bank balance sheets are worth less now than when they were acquired. Meaning that no capital gains tax would be owed on them anyway. If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere. Seriously, where do these people come up with this stuff?
Yep, Chris, they are taking their time here, but not like that. Miami-Dade County courthouse has an atty's room. I wandered in there looking for a stapler yesterday. Room full of foreclosure attys leafing thru fat courtfiles madly. I don't know why. Can only think they have completely lost control of their own files and are looking for stuff in the Court files. Good luck with that.
Defending a foreclosure. Wife's signature allegedly forged. (Really doesn't matter too much as purchase money mtg trumps homestead. But you do have to allege it.) Filed defense about wife. Dopey foreclosure mill not only ignores my filing, but drops wife as non existent, I suppose, "unknown spouse". Thing is, a spouse needs to be joined in a foreclosure in order to eliminate interest. Summary final judgment of foreclosure cancelled. Another 2-3 months of free living. Maybe more.
Better for neighbors than an empty house sitting there.
we should wish we were in the Hoover phase. Comparing Bush to Hoover is an insult to Hoover.
Hoover made some serious efforts that were experimental in his day, when no one yet had experience in dealing with this stuff.
Bush still has most of the New Deal tools and access to many country's experiences with such panics, and he has directly contributed to the problem in a way Hoover did not.
Hoover came to office in 1929 just before the crash. The bubble built pre 1929.
If money is so hard to come by these days how is it in my neck of the woods (Inland Empire) investors are busy buying up all the REO's and they are paying cash and waving home inspections to close the deal.
Can someone please explain to me why any equities even trade today? If I follow this Ponzi Scheme correctly there were 62 Trillion of Credit Default Swaps written. 31 trillion on the win side and 31 trillion on the lose side. A minmum or 3.1 trillion has been lost. No one can cover those losses. The $700 billion is about a fifth of what is needed just to clean up that mess. Also, doesnt the WAMU failure fore billions in writedowns? How can stocks even trade? Every financial is basically insolvent. Someone please enlighten me?
all of you should pay close attention to what liz and i are saying.
banks are refusing to foreclose and refusing to take shortsales based on bullshit broker price opinions (in my clients case, bpo is that house is worth 92% of what it was in late 2006)
paulson plan is to institutionalize this, to pay crap bs prices for the dogshit and then let the other banks write up their level 3's to that bs price.
offical govt policy to commit balance sheet fraud.
but it cant work as the markets know it and it only works when the "mark" doesnt konw oyoure cooking the books.
biggest bank failure in US history...
dow only 50 pts down..
It really is now looking like the Shock and Awe campaign by Bush has backfired as everything seems fine in the financial sector....Wamu goes down and you have buyer lined up at time of takeover....why the need for 700 billion...
Liz, I know of at least 3 folks that were upside down on their loans- alot. They stopped making payments, and either bought or rented at half the monthly price of their old mortage, and let the old house foreclose.
I'm not condoning this, just sayin this is what I'm seeing. Credit scores are meaningless today. Especially when it means thousands of dollars saved and it takes almost a year to foreclose- a year without payments.
I have never really thought that calling my Senators and Congressman would make much of a difference, but it appears there are enough pissed off folk like me that the Congressmen and Senators are listening. Shelby is my hero.
COURIC: Explain to me why that enhances your foreign policy credentials.
PALIN: Well, it certainly does because our-- our next door neighbors are foreign countries. They're in the state that I am the executive of. And there in Russia--
COURIC: Have you ever been involved with any negotiations, for example, with the Russians?
PALIN: We have trade missions back and forth. We-- we do-- it's very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where-- where do they go? It's Alaska. It's just right over the border. It is-- from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to-- to our state.
You know if the credit markets seizing up does not slide us into a depression, the productivity decline from having all of us refreshing CR every 10 seconds might do it.
paulson plan is to institutionalize this, to pay crap bs prices for the dogshit and then let the other banks write up their level 3's to that bs price.
Fred: You are preaching to the choir on this board... You & Liz and other sensible people need to get the word out. I wish I knew how, but please try.
The open letter to Dodd on MW got some exposure, I'm sure others have ideas.
I just wanted to bring this forward. This is a response to Concerned Observer from about 2 threads back. As a vocal advocate of "do nothing" I'd like to respond. It's succinct, don't worry.
Those who advocate "doing nothing" in this blog need to explain persuasively how and why this would work -- and perhaps provide some historic antecedents when doing nothing has ever worked for a country facing an analogously grave crisis.
You want 700bn dollars, you bring the pitch book. BTW, it had better be a REALLY good pitch book.
cd writes:
biggest bank failure in US history...
dow only 50 pts down..
It really is now looking like the Shock and Awe campaign by Bush has backfired as everything seems fine in the financial sector....Wamu goes down and you have buyer lined up at time of takeover....why the need for 700 billion...
because thier is no need.....
Perhaps because the shadow bankers and government are artificially propping up the Dow and keeping from collapse, and they would prefer not to have to continue those kinds of machinations for all eternity. ... Have no doubt -- the crooks want to bring back short-selling; it's how they make their money.
"31 trillion on the win side and 31 trillion on the lose side"
One part of this, which showed up in the LEH unwind. Say a dealer does a swap for 10MM with a buy side customer, for 5 years. To hedge that risk, the dealer will do another swap with another dealer of either again 5, or maybe 7 years, depending on whether they want to do a little "curve riding" to have a net inflow of premium.
So the point is the total shows 20MM, but there is really only 10MM net risk at default. This is "netting," and when you watch the WaMu news, watch for that word. As the dealer's association, at isda.org, starts to post its protocols for settlement, you'll begin to see what the net effect is.
I'm not saying these things aren't huge and dangerous; they're just not as huge as the published, un-netted numbers would indicate.
Erin is disappointed there was no ker-boom-
I am afraid they will find another way to obtain their money under the dark of night
ps- I just don't like Eri
why couldn't we stlll be in the bubble- I miss the bubble
Catholic girl | 09.26.08 - 10:50 am | #
From Town and Country:
But a few weeks ago, when I bumped into Market Director Treena Lombardo in, of all places, the ladies' room, I practically put her in a half nelson so I could get a better look at the ginormous yellow-faced gold watch she was wearing. (This occurred post-hand washing, btw). Asking about the timepiece, I steadied myself for the letdown, ready to hear "Dad's Rolex" or "Baume and Mercier" or some other watchmaker leagues beyond my price range. Instead, she raised her eyebrows and informed me, "Michael Kors. $250. It's great, right?"
Needless to say, I shot straight over to the designer's Madison Avenue boutique and bought myself the same oversized Gold Chrono. (Launched last spring, it's intended for either men or women.).With its one-inch wide band and its nearly two-inch face radius, it makes my men's Bulgari watch look downright dainty. I'm happy to report that despite its massive girth, it's surprisingly comfortable. And the compliments!"
As far as I know,from someone moving properties,there is only one bank really dumping them. DB. Everybody else is just sitting. It is really bad when every single low end foreclosure around here takes a MINIMUM loss of 100k. So far this month we have sold a whopping 100 properties. Most have been overvalued. There are a few people from up north with a couple of bucks to spend...but they will slowly dwindle.
Can someone please explain to me why any equities even trade today? If I follow this Ponzi Scheme correctly there were 62 Trillion of Credit Default Swaps written. 31 trillion on the win side and 31 trillion on the lose side.
You can't look at the derivatives market as having a win side and a lose side. Really you are only talking about the notional amount of credit default swaps outstanding. Whether the swap is in the money (winning) or out of the money (losing), there are other risks, such as counterparty risk, etc. As the value of the transaction begins to move in a direction, there are collateral requirements that have to be met to ensure that the funds will be available if and when due. These collateral requirements can easily turn winners into losers. This is the domino effect that people talk about.
We're not in the Hoover phase. We're in the "Dulce et decorum est pro patria mori phase." We're in the Verdun and Somme phase.
The GOP and Dems today remind me of nothing so much as the field marshals of Germany and France trying to prop up a bunch of doomed hemophiliac royals with the economic lifeblood of your kids and mine.
Inland Valley....the home values have come down, way down, but there are bidding wars on entry level and mid-level homes. By the time the listing hits the market there are bids against it. It doesn't add up. Where are these "investors" getting their money if everything is so tight.
All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.
wally
Amazing that "the richest country on earth" managed to transfer their economy to this platform, isn't it? We deserve to topple.
Credit default swaps are not tied to equities per se, but they influence equity prices. As the CDS market pegs a company as being less creditworthy, equity investors start paying attention and sell off or short the stock. This drives the stock price down and makes it harder for the company to raise capital to meet the collateral calls.
Inland Empire - There is no copper. Pressure line plumbing was polybutylene (need to keep the lawyers busy in the future)and it is damn hard to get much copper from the compression rings.
The wiring left in a van sent by the bankers last week....
Maybe they can machine toothpicks from the lumber to sell to the Japanese?
Bond Girl:
You can't look at the derivatives market as having a win side and a lose side. Really you are only talking about the notional amount of credit default swaps outstanding. Whether the swap is in the money (winning) or out of the money (losing), there are other risks, such as counterparty risk, etc. As the value of the transaction begins to move in a direction, there are collateral requirements that have to be met to ensure that the funds will be available if and when due. These collateral requirements can easily turn winners into losers. This is the domino effect that people talk about.
You have 62 trillion, but only 2 possible directions, win or lose. So 31 trillion is in a lose position. How do stocks of financial companies have any value at all? How do they trade? The winners will never get paid, because the losers cant pay. Sounds like a ponzi lose lose transaction? What am I missing?
I will be surprised if anything gets done before March - new congress & new administration. Then we'll know the damage.
I doubt it will be a KABOOM too - more of a gradual grinding down of bad positions and increasing lay offs.
But I don't see how this rescue slows the lay offs - they are coming anyway - you can't have these kinds of disruptions w/out cost cutting & 'head count' is where that is ultimately done.
Main street will have a terrible time, bailout or no bailout.
That's right. Whether I need to be 'edcuated' or not (econ is not a strength for me), the doomsday message is old for me. Alternatives to a plan that started on a napkin is ok with me.
They obviously are now backtracking on the armageddon
I think maybe just maybe we the people had a trickle of an influence
but- they will find a way to get their (our) money
I doubt it will be a KABOOM too - more of a gradual grinding down of bad positions and increasing lay offs.
But I don't see how this rescue slows the lay offs - they are coming anyway - you can't have these kinds of disruptions w/out cost cutting & 'head count' is where that is ultimately done.
dryfly
I agree. This is not your grandfather's depression. This is a slow unwind. Just as there were no televised bank runs on WAMU, but local reporting is saying depositor removed nearly $17B from WAMU in the last 10 days.
Grinding and silent, that's perfect description, dryfly;)
Glad I am in a "safe" profession!
The SPX, NDX, RUT all look like bear flags to me. With high volume at the untested lows this a.m., and a light volume retracement up, I strongly suspect we're headed lower before markets close.
Too succint for me. Can't follow your argument, don't see the historic precedent.
I mean, I don't need to show you precedent for anything. If you want to advocate an action, you are responsible for lobbying for it. The default action of the prudent ruler is "observe carefully, doing nothing".
It's called "wu wei" and it's a very useful concept when governing resource-limited structures.
Can't have a KABOOM. Gotta give the guys who orchestrated this thing time to grab the life boats before everyone else.
ac | 09.26.08 - 11:05 am | #
This is a stock blog (even though CR never intended that) - most folks here don't work real jobs - at least during the daytime hours. The real damage is coming - it will be job loss and it will inflict a LOT more pain on Main Street than a drop in the market. They are clueless how bad it could be - if they knew they'd shit.
But the 'fix' doesn't address that - it can't.
Also - the Chinese haven't voted with their dollars yet. Wait until they do - that I feel is BB & Hanks real concern - when Asian CBs fail to show up at the auctions. Then it will be for real... closest thing to a KABOOOM we'll get.
The GOP and Dems today remind me of nothing so much as the field marshals of Germany and France trying to prop up a bunch of doomed hemophiliac royals with the economic lifeblood of your kids and mine.
mal | 09.26.08 - 10:57 am |
Nice writing.
Cynical Yes and Bond Girl - Thx - I think I am understanding some of what you are saying. Its written clear enough - I just don't have the concepts and vocab yet.
Remember this from the last two paragraphs of Roubini's testimony to congress? Why isn't an economic tiger team sitting with congress right now? (rhetorical, sigh):
What is the size of these losses for financial institutions and investors? Again this is a complex estimate as it depends on how large in the fall in home prices and the recovery rate given default and foreclosure. The only hard estimate that I have found so far is one by Calculated Risk. The way he puts it: Assuming a 15% total price decline, and a 50% average loss per mortgage, the losses for lenders and investors would be about $1 trillion. Assuming a 30% price decline, the losses would be over $2 trillion. Not every upside down homeowner will use jingle mail, but if prices drop 30%, the losses for the lenders and investors might well be over $1 trillion (far in excess of the $70 to $80 billion in losses reported so far).
What will be the consequence of losses of over $1 trillion and, possibly, as high as $2 trillion? That would wipe out most of the capital of most of the US banking system and lead most of US banks and mortgage lenders that are massively exposed to real estate to go belly up. You would then have a systemic banking crisis of proportions that would be several orders of magnitude larger than the S&L crisis, a crisis that ended up with a fiscal bailout cost of over $120 billion dollars. And the worrisome part of this scenario is that with home prices likely to fall by 20% or more this scenario of systemic banking crisis is becoming increasingly likely.
That's what I am saying - it is not a win and lose. The CDS market is fluid due to counterparty risk. You have to think that these parties are not just in one transaction. They hold one position that they hedge with another position which hedges another position... ad nauseum. Whether you've won depends on the status of your counterparty's portfolio of swaps, not just on your transaction. Not in terms of calculating the value of that transaction, but practically speaking as to whether you will ever get paid. Credit default swaps for companies are different than the mortgage-related derivatives that the companies may hold.
I would bet a lot of people trading in financial stocks are technical traders who will be in and out and they do not care what the value is. If anyone thinks these institutions are a value they are crazy. I agree, no one can value these banks because their largest positions are opaque. They may think the bailout will help the bank, but they do not know the bailout will help the bank.
Why can't WaMu be the model for the "bailout"? Wipe the shareholders, immediately transfer the functioning part of the company to another entity so it can keep doing what it does, and then take whatever time you need to deal with the "troubled" assets, with any proceeds going to the stakeholders (bond, preferred, etc.)?
Thats Ballgame, Comrades writes:
Let's send all the politicians to the bottom of the sea and start over with 5-6 regional governments to oversee the U.S.
dryfly writes:
most folks here don't work real jobs
And most of you are boomers or late X-ers; my generation's voice is sorely lacking (and very ignorant about this, as I learn from my wage-slave peers). Some of them remember my dire warnings from years back but most don't care. "Oh well. Fuggit."
Google US House of Representatives and then Google US Senate. You can find all their contact info on their sites, as well as who is on what committee. We've already contacted ours, but haven't heard back yet (doubt that will happen).
LMAO! There seems to be a bit of cognitive dissonance going on in this thread. Trashing McCain for reportedly blowing up this bailout that almost none of you actually support, while praising Dodd, Pelosi, and Frank who are pushing for it, albeit with changes that rein in Paulson, but then add lots of other spending on top.
Get your opinions consistent, at the very least. If you don't support the bailout, then trash those pushing hardest for it.
Why can't WaMu be the model for the "bailout"? Wipe the shareholders, immediately transfer the functioning part of the company to another entity so it can keep doing what it does, and then take whatever time you need to deal with the "troubled" assets, with any proceeds going to the stakeholders (bond, preferred, etc.)?
I happen to agree with you. The ruling elite however have made many side bets (CDS) that will cascade many financial institutions into bankruptcy as soon as one of the big ones goes down.
It is the cascading that is causing some heartburn. Naturally, if you let the heartburn happen, people might change their behaviors. It is painful, but few in power want to be responsible for causing pain.
I continue to fax and email senators and congressman. It may even be a lost cause, I don't know. I don't really care as it wouldn't be the first lost cause that I fought for.
It's still insane to expect the Taxpayers to pay for the sickness and reckless bloat on Wall Street. It's just insane.
I did notice the stealth rate cut. More importantly, earlier this week, I noticed the increasing stdev. I think the fed is tring to intice borrowing from other banks rather than from the discount window because the discount window is quickly running out of money.
Senate Democratic leaders unveiled their $56 billion economic stimulus package on Thursday, less than an hour before leaving to meet President Bush at the White House to continue the fragile negotiations on the financial rescue bill.
Calling it an economic recovery package that will help middle-class families struggling in the weakening Bush-McCain economy, Majority Leader Harry Reid (D-Nev.) and Appropriations Committee Chairman Robert Byrd (D-W.Va.) pitched the plan with the familiar mantra of not forgetting Main Street. The plan includes a $7.5 billion down payment on $25 billion in loans for the struggling auto industry.
So that's the rub, eh? No bailout for your crooks unless we get to hand out candy too. Ya think the people will buy the part about this creating hundreds of thousands of new jobs?
Catholic girl writes:
McCain is getting killed by Reid
He will have to answer this
Catholic girl | 09.26.08 - 11:13 am | #
Why? Acknowledging it gives it credibility. Instead just keep attacking the proposal - until he's elected then HE WILL push like hell for pretty much the same bailout (once his advisers fully brief him)...
We'll get our bailout [rescue] the only question is when and who hurts the most... Will it come before the failures and lay offs or after the failures and lay offs... but we will get all three: bailout, failures, lay offs.
And most of you are boomers or late X-ers; my generation's voice is sorely lacking (and very ignorant about this, as I learn from my wage-slave peers). Some of them remember my dire warnings from years back but most don't care. "Oh well. Fuggit."
Persecuted Comrade Anonymouse
My daughter, who is late twenties, reports the same. She works with people who are well educated, all with BA/BS and most with graduate degrees, and this whole thing is just a "non-event" for them. I think mainly because having so little time in the "system" they have less skin in the game.
i read further up that nothing will pass until march. bullshit. your atm will be bone dry and there will be riots in the streets if they wait until march.
NOTHING is moving right now. it was quite easy to move this from a bail out for bankers to a key move to allow money to move about the globe.
i didn't agree with the paulson plan in any form, but something must be done. soon.
We were dubbed Generation Pepsi in the late '80s/early '90s, now we're Generation *Bling *Bling, but older than Generation MySpace - wtf do you think we know about anything?!
Damn you mean I am the only 27 year old calling these guys? But I agree I know what everyone is saying, my generation is more concerned about who get kicked off dancing with the stars...
Also - the Chinese haven't voted with their dollars yet. Wait until they do - that I feel is BB & Hanks real concern - when Asian CBs fail to show up at the auctions. Then it will be for real... closest thing to a KABOOOM we'll get.
The Chinese will cooperate, they have no choice in the current economic environment.
On friday, Fortis tried to denounce worries about its financial status.
In a statement released on friday CEO Verwilst assured Fortis would not go BK.
At the Amsterdam stock exchange (AEX) Fortis lost 12 percent of its value today.
-
Rumours circulate Fortis will receive some kind of capital injection from Deutsche Bank and/or Societe Generale by monday.
I suspect Bush wants to pull out of his own plan and go with the House Republicans - the idea of suspending capital gains taxes must be irresistible to him. I predict: the White House will be sending a new plan to Congress that differs substantially from the current one. I hope, if only for drama's sake, that Bernanke and Paulson then resign.
Look
trying not to sound toooo sentimental
I say spit in the face of it
go with capitalism
we'll dig our way out
we're smart hardworking people
don't socialize
we good just be the next great generation
or- the next broke generation:)
I vary my thoughts
But they still think they can ram it down their constituent throats.. i think they might be in for a surprise..
They will regret it. There is no way this package is going to return us to good times, and they will be judged for how they chose to address it. They are making the same mistake as the Iraq War politically - thinking that the war will be over in a week and the Iraqi people will embrace them.
My daughter, who is late twenties, reports the same. She works with people who are well educated, all with BA/BS and most with graduate degrees, and this whole thing is just a "non-event" for them.
--
Agreed. I'm 27 and promise you not one of my friends has a clue how serious is this is. From construction workers to financial advisors, it IS a non-event.
They have never known anything but easy money, semi-recessions and the ability to borrow at any time, for any thing.
I have only tried once to outline what is happening, it wasn't received well. "oh this shit happens all the time, the banks screw around and the government will straighten it out."
That's a false choice fallacy. There are plenty of options. Some times the best one is do nothing but create a vehicle that can step in and clean up the mess like the RFC in the depression. It's the orderly unwind theory which is what these guys are now trying to do having accepted that unwinding was occurring no matter what.
Persecuted Comrade Anonymouse writes:
dryfly writes:
most folks here don't work real jobs
And most of you are boomers or late X-ers; my generation's voice is sorely lacking (and very ignorant about this, as I learn from my wage-slave peers). Some of them remember my dire warnings from years back but most don't care. "Oh well. Fuggit."
Persecuted Comrade Anonymouse | Homepage | 09.26.08 - 11:14 am | #
Great point, 'mouse. Experience, perspcacity in abundance. But Lord, I don't know how you all keep up. Cool spells in the business only get me half way caught up here lately, as diligently as I try.
I have a question. Is it possible the debt markets are seized up because the traders in that market are waiting for the bailout to be finalized? You could certainly over or under-pay for something now depending on what the final resolutions will be?
playing devils advocate here, but don't leaders sometimes take very unpopular decisions? they pin their reputation on being proved right down the track.
I don't think I'd like a leader who always takes a poll and does what the majority wants. That isn't a leader.
If the banking committee got presented with bleak scenarios from their experts you can't blame them for ignoring their constituents at least for a while.
Of course the real failing here is Bush. He should be leading right now, doing the job to convince voters of the necessity to do something.. I think he did that ok for many americans after 9/11 (even though his decision was arguably disastrous).
NoVAOnlooker, my daughter who is 26 is joining you, thanks to my being here on CR...but you guys may be the only two;)...Not!
Alot of you are smart cookies but for most it takes a lifetime of watching these crooks in DC to understand (develop the cynicism) when they are sincere about helping Mainstreet and when we're just getting a BJ.
The Chinese will cooperate, they have no choice in the current economic environment.
NEOCON | 09.26.08 - 11:21 am | #
No no - they still have a pretty beefy red army and the ability to crack down on their people if necessary. They will look at us and look at Putin and say... "Hmmmm, which seems to be working out better?"
Bond girl, thanks--(use google... doh!)--it looks like their server is swamped. Hopefully the wires are humming with messages against this awful plan. If the meetings can be inconclusive again today, I think sanity may prevail, or at least the critters will get a full earful of how we voters really feel.
Why do you assume there only two evils here? Is it really that black and white?
skent | 09.26.08 - 11:21 am | #
--
no, i would love to see something else, but do you think it is possible?
if you're trapped on a burning boat in a sea of shit, you can burn to death or swim in shit. sure, you would love a winged angel to fly you over the shit, but she isn't coming.
I have a question. Is it possible the debt markets are seized up because the traders in that market are waiting for the bailout to be finalized? You could certainly over or under-pay for something now depending on what the final resolutions will be?
debt traders are definitely on the sidelines right now
The stealth rate cut is also the result of billions of "Creation" this is why they are trying to look like they are combating it by doing the reverse repos. Now having said that there is no reason they need to do the repo since this issue is all about liquidity right?
I still think this market gets shut off later as the bailout will not be done today. The bankster's will provide additional "incentive" to make them do something this weekend.
No volume to speak of.....ripe for a take down. However the money put into it late last week and early this week has alot to do with why it has not tanked with the WAMU news.
I know I'm late to this party, but Erin Burnett is not a journalist; she's a fully-fledged member of a power structure that wants its bill, and wants it now. She really is an embarrassment to a hard-to-embarrass profession. The only question is --who is she tricking for here --Goldman or GE?
anonanon | 09.26.08 - 10:20 am | #
matt, we've borrowed too much. Way too much. The only solution is a period of non-borrowing. That's what people don't understand.
The object of borrowing money is to bring some of your money from the future into the present. But when that future comes, you have to give up that money. That's the way it works. We're now in the payback period that we promised for years would eventually come.
The future is now. Pay your damn debts back. That includes you, Wall Street.
I'll be honest. If this had happened when I was 25 or 26, I would not have understood all of it and paid as much attention.
But I'm 38 now, and have long since realized how bad things could be in this nation when I'm in my 50s and 60s. I will not have a fairy-tale retirement.
Not freakin true. Chinese traders have been ordered to trade carefully, which is the next step to quarantine. Yes, they'll hurt, but do they really have constituents who can vote their officials out of office? Sure the peasants can rise and the middle class rally, or they can accept a scaled back standard of living for a while while their central government moves much faster than ours can. I'm not diminishing how large the impact will be, but for China, it won't be catastrophic, just really really painful. Us, not so much.
Unfortunately, this is not about party lines, this is about a fundamental misunderstanding of economics and finance. They speculate to know why this is happened, but they fail to realize that throwing money at it will not solve the problem. We continue down this economic path but it is still leading to the abyss, You cannot build an economy on debt plain and simple.
Matt: We may know some of the same folks. While we were getting all puffed up and strutting around talking about how the rest of the world can Efff itself, I often asked if anyone had ever considered war on their own street. It seems as if Americans think war is something that happens on CNN, that violence is an anomaly, and that economic collapse only happens in "backwards" countries.
Now they're going to be popped in the kisser with a hot waffle iron. Life designed by Disney is over.
Whereismyretirement writes:
NoVAOnlooker, my daughter who is 26 is joining you, thanks to my being here on CR...but you guys may be the only two;)...Not!
Alot of you are smart cookies but for most it takes a lifetime of watching these crooks in DC to understand (develop the cynicism) when they are sincere about helping Mainstreet and when we're just getting a BJ.
I'm 27. Rest assured that some of us are paying attention. And I've been doing my best to inform my friends and coworkers of the gravity of the situation. My office nickname was originally "Dr. Doom", although lately they're calling me "Nostradamus".
i didn't agree with the paulson plan in any form, but something must be done. soon.
Is that what the Republican House contingent actually saying? That nothing needs to be done? It's a majority Democratic House and the President will sign it. If it's so urgent, do it.
i didn't agree with the paulson plan in any form, but something must be done. soon.
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
Compulsion is different than your perception of urgency.
Gavshire, haha I think we are on the same page. We used to do a lot of work with FNM and FRE, you should have seen me tell my President and CEO that they better come up with a new business plan. That was two years ago...
I'm 27. Rest assured that some of us are paying attention. And I've been doing my best to inform my friends and coworkers of the gravity of the situation. My office nickname was originally "Dr. Doom", although lately they're calling me "Nostradamus".
Gavshire
Good! Stay alert. That's how you survive and prosper!
Screw the boomers. never has there been a more self indulgent generation. The house bubble was one of the greatest inter-generational looting propositions going. The reflation of NASDAQ was critical to their retirement. Ramp up the foreclousres. BBC did a nice piece on the carparks in Cali that are serving as temp mobile housing parks. Reminds me of the story of the marine when asked what he felt when he shot someon and he responded recoil.
I'm 27. Rest assured that some of us are paying attention. And I've been doing my best to inform my friends and coworkers of the gravity of the situation. My office nickname was originally "Dr. Doom", although lately they're calling me "Nostradamus".
Gavshire
Unfortunately for me my brother is the only one who realized I was reading the right stuff... Most still think I'm a pessimist by nature...
whoops: some presenter chick on cnbc said that last week her 20 year wall street veteran friend was so scared he was ready to put his cash in a safety deposit box, but she "didn't want to say that on air because it might frighten people".
Byzantine_Ruins writes:
i didn't agree with the paulson plan in any form, but something must be done. soon.
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
Compulsion is different than your perception of urgency.
Byzantine_Ruins | Homepage | 09.26.08 - 11:29 am | #
--
really? you may be right. i am just of the belief that this freeze is not going to shake loose. that is why i said something "needs" to be done.
agreed to the above comments that it is time to repay the debt we have accumulated. sorry if i am coming off in disagreement, i agree with much of what is being said here, but i don't believe that the markets will work itself of this mess without intervention.
i also believe that leaving markets frozen for this long will in fact make matters worse for millions of people, maybe hundreds of millions.
this is a fork in the road and the paths lead in very different directions from here.
also, thanks for the generation note on this thread, it is awesome to see so many 20 somethings in here, i always thought i was alone there.
lama writes:
I have a question. Is it possible the debt markets are seized up because the traders in that market are waiting for the bailout to be finalized?
They are gaming the system BOTH ways - some waiting for it to fail some to pass - price is grid locked either way.
Best thing is to vote it up or down & let the damned market clear!
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
"Now they're going to be popped in the kisser with a hot waffle iron. Life designed by Disney is over."
Let me calculate the weight of that iron. Aaahhh let's see ~ 31 T, based on the back of the envelope calculation. Hank left it in the bar and I picked it up. No plagarism this time...
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
What type of firms? I'm thinking about sending my resume over to Pimco. A little nervous because I went to a B/C level B-School. Are you talking small specialty shops or the big players?
Ugh, can't get any decent bids on my WaMu Oct $4 puts. I think $3.95 is a fair offer -- virtually zero risk and with ~25 days left an annualized 17% return on investment.
I'm dying to use that money to buy puts on Sears and J. Crew. Does anyone else have any retail short favorites?
My two cents. Look at the risk management function. Buy a Fabozzi book or two on the subject, see what it's about. Computer skills and stat skills required.
RM is considered in most places as "middle office" the desks are the "front office," so the competition is not as great, and, in fact, after a couple of years, you get to know the traders, you get to know the products, and might get a chance to move in as a junior guy on a desk.
Also, risk management, both credit and market, as well as operational, is only to get bigger in a lot of places.
I'm dying to use that money to buy puts on Sears and J. Crew. Does anyone else have any retail short favorites?
Yeah urban outfitters. Painfully hip and popular but I have trouble believing that in a downturn princess will still get her credit card bailed out by daddy every 6 months.
Mama
Free pony for me!
Well,
I think investors are telling us who is next. Don't forget MS.
No deal. No bailout. Deflate the bubble.
President Obama and the second coming of FDR's WPA is the solution.
Let the cleansing commence
wait, is it friday evening already fuckin ay there goes the work day. party on, garth
$5T
Bloomberg News
I've spent the entire week reading CR and finacial news. I have gotten nothing completed.
"but Boss we got us a Depression coming on!"
Aren't we glad we banned the shorts? That sure fixed prices, didn't it?
TED going dow
I think Bush's approval rating is next. Wait, that is not cliff diving. You cannot dive from one inch above the ground.
Video - CNBC.com
The Santelli meltdown is absolutly classic!
It is amazing when the bubble pops and inside is... nothing.
All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.
And yet the Dow is only off 54..
WTF.
I think Bush's approval rating is next. Wait, that is not cliff diving. You cannot dive from one inch above the ground.
You can, if you position yourself over the mouth of a well. I'm just waiting for a US-backed Israeli attack on Iran in the middle of all this.
"Sen. Reid says Senate likely to keep working next week on legislation; bailout work continues Friday"
Keep the calls and faxes coming to kill the bill
General Motors is next.
In Soviet Amerika, President impeach Congress.
Wells Fargo ride in?
Dollar plonks agai
wally writes:
It is amazing when the bubble pops and inside is... nothing.
All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.
That is mind-boggling isn't it? Funny to think that many financiers said not too long ago that derivatives actually decrease risk in the system because they redistribute risk to other parties that can assume more.
Republicans are opposing the current plan because they want less taxes? WTF!!!!!
hope you didnt buy the bottom of wamu
Who the hell cares anymore? This shit is getting old.
Interesting anecdote from a WM short:
Google Finance: Washington Mutual Inc.
if you don't want to click the link: TD Ameritrade closed his short yesterday at the closing price, instead of pennies that he should have closed out at today.
Dear Comrades,
Our No Money System bailout has been torpedoed by unscrupulous speculators who stole $700 billion dollars of Acapulco Gold and are refusing to return it to the Glorious People's Committee for the Maintainence of Our Glorious No Money.
Please, please, please, pretty please return the gold buds now..do not smoke away the proceeds of our Glorious No Money System.
Dasvidania
Where's Palin's anti-witchcraft preacher when we need him to do some laying on of hands?
Economically and politically,
America IS Gangistan.
Various gangs (including the two political parties and corporations) rule over Americans and propaganda is used to keep born-and-bred American dopes in line.
Fate of Gangistan:
Democracy --> Rule of the Moneybags (NOW) --> Rule of the Mobs --> Warlords --> Kings.
End of History? LOL!
Never a dull moment in Gangistan.
Jas
I closed some of those loans in Florida.
The broker was HONEST. This is honestly what Countryfried and the rest offerred. Strange thing was that they still made the borrower jump through hoops. Very weird. It was like a cargo cult activity. You hammer together something that sorta LOOKS like an airplane and you think it's gonna fly. You hammer together something that looks like a secured loan and you think it's gonna be paid back.
I used to look at the people and wonder how they could afford a peanut butter sandwich for dinner. I honestly thought that they were gonna (illegally) rent out more rooms than is customary in Hialeah/Miami.
I care. I am really happy this is happening so close to the election so that the letters, calls, etc. have an impact. Otherwise our reps would just go along and assume we'd forget about it by the time the election rolls around.
Hummm,,, on my 5th cup of coffee this a.m.,,
what if they throw this party and no one comes?
what if nothing terrible happens to mainstreet
- if there is no bailout-
mark on cnbc keeps saying the market is taking care of itself
Another reverse repo....in fact two of them.
Temporary Open Market Operations - Federal Reserve Bank of New York
This is NOT a liquidity issue when you take it back out of the system when it is "supposedly" needed for 'merican banks.
Goddamn Fascists
Ciao
MS
Commercial paper isn't rolling over c. girl. Very bad for good companies.
I imagine someone will get creative about this. Barter for a while, probably.
Fraud disclosure and Freudian slip of the tongue on world wide tv this morning:
There are...errrr, aspects of this that are suspic.... errrhh...
--
Bond Girl,
And after erections they will go back to be the same old gangsters. There is no bright future for Gangistan, erections or no erections.
Bond Prince,
Jas
I know I'm late to this party, but Erin Burnett is not a journalist; she's a fully-fledged member of a power structure that wants its bill, and wants it now. She really is an embarrassment to a hard-to-embarrass profession. The only question is --who is she tricking for here --Goldman or GE?
It is reckless for public officials and media to be using terms like "financial armageddon" to sell a bailout.
They dismissed and decried those terms until they needed them for a purpose.
The lack of calm leadership is one of the best leading indicators of what will happen next.
cnbc reporting the current proposal is now 102 pages.
Nat City has a lot of money in small to medium businesses - mfgrs, service providers, etc. - these loans have to be going badly. Automotive & Mfg PEs. I know a couple that are for certain in trouble (know the companies & they can't roll over).
This will end with pizza if you ask me.
That is absolutely insane about the open short on WaMu. Absolutely insane. I can see them changing the rules on the kinds of transactions that can be made - I don't agree with it, but I understand it. I do not understand them mandating that you have to close out a transaction that is open.
He doesn't really have any rights there either - he can go into arbitration with his broker, but that won't turn out well.
Potential run on German Sparkassen coming up - at least if radio reports on SWR1 saying 'don't panic, your money is safe' is any indication.
The blinders are coming off, and containing the problem seems to be part of the problem.
I care. I am really happy this is happening so close to the election so that the letters, calls, etc. have an impact.
True. I completely understand the political cynicism yesterday by those upset by the reported agreement. No polyanna myself, I know that moneyed interests are entrenched in Congress. But I also saw the effects yesterday on constituent anger and feedback and knew it was having an effect.
She is tricking for whomever her bosses tell her to trick. She's just one young woman trying to earn a living in a den of thieves.
Liz, florida has always been a Mecca of fraud. Since the 1920's, it's been home to conmen and swindlers.
We're in the 3rd inning of this. Gonna get a lot worse. Nothing is selling in Fl. Even the REO's and shortsales have dried up. The courts are swamped with foreclosures. My guess is at least 2010 before the dust settles.
I was interested in 4 foreclosures,
They were way above average,, by the time bidding was done,,i didnt have a chance, price opened 200000 low, and finished 200000 high or what the price was at top of market,,,go figure.
That is mind-boggling isn't it? Funny to think that many financiers said not too long ago that derivatives actually decrease risk in the system because they redistribute risk to other parties that can assume more.
This is what lack of transparency gets you. You have a same problem in IT: say your company wants two compeletely different fiberoptic links out of you building so that if one goes down the other's still there.
So you lease a link from one provider, and another from another provider. Then those providers go out and lease fiber from someone else because that's cheaper, and don't need to tell you this. Then those guys they leased from do it again. Then you find out, perhaps at a sort of inopportune moment, that those links are actually on the same stupid piece of fiber. Oops.
How soon before the TV yakkers start referring to the coming market Holocaust?
-GSD
JS,
We don't get TV here and that Santelli clip is a classic.
thanks for pointing it out.
"what if nothing terrible happens to mainstreet - if there is no bailout-"
Catholic girl,
Main Street wil suffer no matter what. Fraudsters have done the dirty deed years ago by herding 30,000,000 American households into Debt Concentration Camps.
There are consequences to be ruled over by organized gangs.
Be Safe!
Jas
Erin Biurnett and the crowd at CNBC say that the individual investor needs to be "educated". Presumably by Wall Street welfare queens like Kudlow and Cramer.
Commercial paper isn't rolling over c. girl. Very bad for good companies.
"Good" companies should have a financial cushion of cash. That lesson is about to be relearned.
There shall be wailing and gnashing of teeth. Holly shit, this is looking like the last days!
think Erin's pretty Rich?
Anyone out there able to explain what's going onm in CDS land with WaMu debt ?
It is reckless for public officials and media to be using terms like "financial armageddon" to sell a bailout.
It really is, but it's an indication of desparation. The problem with that arguement is that the Democratic led house could pass this bill right now. They have the majority. All they're looking for is cover from the Republicans. So if they truly believe it's so urgent, pass the effing bill already.
DSL must be on the short list.
And I ain't talking broadband either.
Erin Biurnett and the crowd at CNBC say that the individual investor needs to be "educated".
WaMu educated a whole bunch of folks this morning. They are relearning the term "Capital Structure".
Oh, I know Baron. But we are down 30% on housing. I see losses of about 1% a month. Hmmm that means about 2 years more. If we reach 2% a month than a year. So 3rd to 6th inning depending. Short sales I know about aren't happening because banks refuse to accept reality, not because buyers aren't willing to buy a bargain. A vulture who has been on the sidelines for about 5 years is dipping his toe in the water. Good sign, he's very good at vultching.
See it again , Mr. Rick Santelli
Economic Smackdown
Video - CNBC.com
Someone needs to expose Erin as the EX GS analyst shill.
my guess is DSL is the next failure..
down 40% plus today, should have been FDIC'd weeks ago..
How about a WINDFALL TAX provision in the bill?
How soon before the TV yakkers start referring to the coming market Holocaust?
LOL. Who knew Godwin's law applied.
"Big Oil" was so yesterday...
wtf-dow -56 after all news today and yesterday...
Somethings up here..
I have always said...as an appraiser...all this crap is stacked on top of the (asset) house. Guess what...the financial termites have eaten the homes alive. House is worthless....so is the financial papers stacked on the rooftops. Simple.....Why complicate it? Rick is right a vote of NO confidence is beacuse these idiots are selling lies. The Gov't and homeowners are BOTH insolvent.
Anyone know how much WM is costing the FDIC?
God bless Rick Santelli, btw.
liz
i have client chicago suburb ninja loan 93% 1st/2nd from countrywide. he moved out of country 6 mos ago. no mortgage pmt for 10 months now and counting. house falling apart.
countrywide turned down short sale offer of 85% of original purchase price (would have been 90% of debt)
same in fla?
(you know theyre doing this to commit balance sheet fraud, even now under BoA)
Main street will have a terrible time, bailout or no bailout. We'll be stuck with higher taxes from state and local governments because of the decline in property values and consumption. Our governments will be struggling to keep up, so there will be little community investment.
With the bailout, all the feds are doing is taking away some of their financial flexibility to deal with the economic downturn. They would be better off letting the financial system work itself out and using the money for public projects, which will take some of the burden off of locals and contribute to employment.
DSL now down 29% - god dam people stop shorting this puppy!
PPT can't get its mission straight.
Earlier this week tv newstertainment shows said stocks were cheap. Maybe some believed them.
Downey Financials.
The hint is in the name.
Liz, you talking about Jack? I remmber whenhe was in the stock market biz way back when. He's a smart guy but a little shady. I listen to Mike Morgan. He knows his stuff.
The problem I see with the REO's and shortsales are that they are still asking for 2005 prices. None of the ones I have seen will cash flow positive. It's a mess. MY back of the envelope math says we need another 20% or so downside.
wonder if Bush will just push the proposal through - not like he cares about polls or support.
Somethings up here..
cd
PPT in max mode
I think the cost is minimal, right? They sold the deposits to JPM.
Does anyone know how the Senate shakes out on these competing plans? I suppose the more salient question is Does anyone know how Lieberman comes down? Wait, I've answered my own question.
Same in Florida, fred. Yep. Balance sheet fraud. Why can't the congress address this and force lenders to sell REOs? Isn't there some regulation about this?
Bad news left and right and the Dow is only off 60 points.
I love Wall St.
Agreed Comrade Baron. 50% off from peak, except new tower condos, those 80-90% off peak because of maintenance assessment problems. Or they become welfare hotels.
--
Liesman: "Banking system is on life support."
Let the Crooks die! No life support for ordinary Joes and Janes and life support for Crooks? Only in...
Gangistan! Gangistan!! Gangistan!!!
Jas
Vulture not Jack. Small scale Cuban guy. Bellweather tho.
The signs of systemic rot are even showing here in NH.
The towns and state have crimped back on mowing and maintaining medians.
High weeds have sprouted up and it makes it look like people just don't give a shit anymore.
This is only the beginning. Wait more cities start lapsing into 70's style neglect...
The greatest country evah!
-GSD
I would expect a run on WaMu. People panic and don't understand that their money is safe. Human psychology is something MS might not have calculated into the equation. Those deposits might just dwindle down.
Krishnan,the full phrase is "Boy,I am going to EDUCATE YOU like a redheaded stepchild"
I agree with you bond girl- lets put those bankers to work on the roads-
One of the economists on Shelby's letters posited that the freeze in the money markets might have a "game theory" component, with the the banks who would benefit from the bailout withholding activity to add to the urgency. (Read last night, and lost track of the link)
I'm no conspirisist, but with the Fed working to bring the FedFunds UP into the target, and with the volume of credit the FED has poured into the system over the last ten days, one does have to wonder a little.
It's a risky bet to call, though.
Comrade Jeremy writes:
Bad news left and right and the Dow is only off 60 points.
I love Wall St.
Obviously you did not get the memo from the SEC.
Any incline or decline of the averages must be done in an orderly and calm manner, no exceptions.
The banks don't want to sell the REO's. THey don't want to mark to market them. THey are still carrying them on the books at appraised value- LOL. And they are still using accounting gimmicks to record revenue from ARMs and Beg AM's at full amount, even though we know that a high % of them will Never pay. That's why they won't even take back the homes. They don't want them.
I went to a few auctions and 99.9% of them were no bid/$100 bid, with the lender buying them back. What do we have,a 4 year visible supply?
And from what I hear CA amd AZ are just as bad if not worse.
It's a cluster.
countrywide turned down short sale offer of 85% of original purchase price (would have been 90% of debt)
We should create a clearinghouse to document things like this.
I know of a short sale Countryfried turned down where they would only lose a couple thou and the accrued interest. Made no sense whatsoevah.
Where in Fla are you, Comrade Baron?
==
"That is mind-boggling isn't it? Funny to think that many financiers said not too long ago that derivatives actually decrease risk in the system because they redistribute risk to other parties that can assume more."
They were supported by evildoers Greenspan and Bernanke. They sang the praises of "financial innovation," a codeword for schemes and thievery. Only in Gangistan.
Jas
"Why can't the congress address this and force lenders to sell REOs? Isn't there some regulation about this?"
lawyerliz | 09.26.08 - 10:31 am | #
liz,
A guy here at work had his wife run off and leave him with 2 kids. He can't afford the house so he saw a lawyer about BK. She told him it would be a minimum of 2 years before he was kicked out for not making a payment. According to her the only properties actively getting taken over and trying to be resold are waterfront...This is Sarasota County.
BTW...You should see the empties in Charlotte and Lee counties...Yowsa.
Chris
KRISHNAN writes:
Erin Biurnett and the crowd at CNBC say that the individual investor needs to be "educated". Presumably by Wall Street welfare queens like Kudlow and Cramer.
The only thing the individual investor needs to do is get 100 percent out of the stock ASAP and cut his or her losses. Stash cash.
FDIC's announcement that WAMU would have zero impact to the deposit insurance fund may prove true, however there will be a significant impact to FDIC's operating budget which is funded by deposit insurance.
Palm beach, but I also spend time out in CA- Santa Barbara.
you?
Damned shortsellers!!!
Oh, wait. My bad!
evildoers... we have GWB to thank for making that a household name
I'm in space Coast Brevard on weekends and Hialeah/Miami during the week. Hub works for NASA.
"Senator Barbara Boxer, Democrat of California, has received nearly 17,000 e-mail messages, nearly all opposed to the bailout, her office said. More than 2,000 constituents called Ms. Boxers California office on Tuesday alone; just 40 favored the bailout. Her Washington office received 918 calls. Just one supported the rescue plan.
Senator Sherrod Brown, Democrat of Ohio, said he had been getting 2,000 e-mail messages and telephone calls a day, roughly 95 percent opposed. When Senator Bernard Sanders, the Vermont independent who votes with Democrats, posted a petition on his Web site asking Mr. Paulson to require that taxpayers receive an equity stake in the bailed-out companies, more than 20,000 people signed.
We certainly have never brought in 20,000 names in a day and a half, Mr. Sanders said, sounding astonished. For us, thats off the wall.
Mish's Global etc.
Well, its time to make another round of calls. Say anybody got Obama's Campaign Office number?
Short sellers hate us for our freedom
while I am sitting here reading and learning from your varied opinions I am at least pleased that it is at times humorous
erin looks shellshocked - really, what is her problem?
FFDIC writes:
there will be a significant impact to FDIC's operating budget which is funded by deposit insurance.
Why? Doesn't JPM have to pay for FDIC insurance on those new deposits?
--
"And from what I hear CA amd AZ are just as bad if not worse. It's a cluster."
Comrade Baron Von Helmut III,
Guten tag, Camrade. Prices in AZ, CA and NV are falling at 35-40% annual rate. The banks are gambling and they will lose even more money.
Whose money are gangsters playing with?!
Jas
what a way to start friday morning. how about a laugh...
Erin Burnett's "wild side"
A measure of future economic growth in the United States fell to a fresh five-year low and its annualized growth rate dove to a 28-year low, indicating the recession will likely drag on regardless of policy actions, a research group said on Friday.
US economic growth rate at 28-year low-ECRI
| Reuters
President Obama and the second coming of FDR's WPA is the solution.
Problem is we're still in the Hoover phase.
The FDR phase is still a few years away.
WASHINGTON (Reuters) - House Speaker Nancy Pelosi said on Friday a plan to rescue U.S. financial institutions "has to happen," but final agreement is up to conservative Republicans who revolted against the plan being negotiated between Congress and the Treasury Department.
"It will happen because it has to happen," Pelosi, a California Democrat, said in an interview with ABC's "Good Morning America." "I would hope that we could come to agreement in the next 24 hours."
FFDIC,
I owe you dinner. Closed on a piece of raw dirt. Some lending continues.
JPM sets a 20% loss rate for Option ARMS .. I dunno, that sounds low to me.. I just have trouble imagining anyone on pick-a-pay (nearly all pay minimum) surviving.
"Whose money are gangsters playing with?!
Jas"
Isn't that ovbvious Comrade? Lol
Nostrovia
If you are still substantially long equities, you blew your chance to get out last Friday. If they pass a bailout plan in the near future, the market will undoubtedly rally, and you will have another chance to cut your losses. Don't blow that chance.
--
"while I am sitting here reading and learning from your varied opinions I am at least pleased that it is at times humorous"
Catholic girl,
Misery is the best breeder of humor.
Smart girl?
Jas
of course there is. cf. the securities act of 1933 and the securities exchange act of 1934.
seriously. works even for private companies.
you just need someone with standing to bring the suit derivatively and the deep pockets to finance it.
gubmint aint gonna. only private.
Erin probably went heavy into the financials, thinking the bailout was guaranteed to pass. Now she's sweati
Has anyone discussed the Republican alternative bailout of insurance, loans, and capital gains tax holiday?
Here's a snip of commentary from a Time blog - but first, the money quote:
"If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere."
The Republican alternatives to the Paulson bailout - The Curious Capitalist - TIME.com
It calls for a two-year suspension of the capital gains tax to "encourag[e] corporations to sell unwanted assets." But the toxic mortgage securities clogging up bank balance sheets are worth less now than when they were acquired. Meaning that no capital gains tax would be owed on them anyway. If you repealed the tax, banks would have even less incentive to sell them because they wouldn't be able use the losses to offset capital gains elsewhere. Seriously, where do these people come up with this stuff?
"ac writes:
President Obama and the second coming of FDR's WPA is the solution.
Problem is we're still in the Hoover phase.
The FDR phase is still a few years away."
Not according to Joe " I gotta million of 'em" Biden. lol
"STAND UP CHUCK, let everyone see ya!!!"..lol
Yep, Chris, they are taking their time here, but not like that. Miami-Dade County courthouse has an atty's room. I wandered in there looking for a stapler yesterday. Room full of foreclosure attys leafing thru fat courtfiles madly. I don't know why. Can only think they have completely lost control of their own files and are looking for stuff in the Court files. Good luck with that.
Defending a foreclosure. Wife's signature allegedly forged. (Really doesn't matter too much as purchase money mtg trumps homestead. But you do have to allege it.) Filed defense about wife. Dopey foreclosure mill not only ignores my filing, but drops wife as non existent, I suppose, "unknown spouse". Thing is, a spouse needs to be joined in a foreclosure in order to eliminate interest. Summary final judgment of foreclosure cancelled. Another 2-3 months of free living. Maybe more.
Better for neighbors than an empty house sitting there.
AC
we should wish we were in the Hoover phase. Comparing Bush to Hoover is an insult to Hoover.
Hoover made some serious efforts that were experimental in his day, when no one yet had experience in dealing with this stuff.
Bush still has most of the New Deal tools and access to many country's experiences with such panics, and he has directly contributed to the problem in a way Hoover did not.
Hoover came to office in 1929 just before the crash. The bubble built pre 1929.
Bush presided over the blowing of the bubble.
Really.
Windfall profits tax on "Big Finance" not oil
If money is so hard to come by these days how is it in my neck of the woods (Inland Empire) investors are busy buying up all the REO's and they are paying cash and waving home inspections to close the deal.
Can someone please explain to me why any equities even trade today? If I follow this Ponzi Scheme correctly there were 62 Trillion of Credit Default Swaps written. 31 trillion on the win side and 31 trillion on the lose side. A minmum or 3.1 trillion has been lost. No one can cover those losses. The $700 billion is about a fifth of what is needed just to clean up that mess. Also, doesnt the WAMU failure fore billions in writedowns? How can stocks even trade? Every financial is basically insolvent. Someone please enlighten me?
why couldn't we stlll be in the bubble- I miss the bubble
all of you should pay close attention to what liz and i are saying.
banks are refusing to foreclose and refusing to take shortsales based on bullshit broker price opinions (in my clients case, bpo is that house is worth 92% of what it was in late 2006)
paulson plan is to institutionalize this, to pay crap bs prices for the dogshit and then let the other banks write up their level 3's to that bs price.
offical govt policy to commit balance sheet fraud.
but it cant work as the markets know it and it only works when the "mark" doesnt konw oyoure cooking the books.
Yahoo!
Wall Street - "Give us the money"; "Out source the work [of the bailout]";
biggest bank failure in US history...
dow only 50 pts down..
It really is now looking like the Shock and Awe campaign by Bush has backfired as everything seems fine in the financial sector....Wamu goes down and you have buyer lined up at time of takeover....why the need for 700 billion...
because thier is no need.....
why couldn't we stlll be in the bubble- I miss the bubble
Catholic girl
here here.... I too pine for the good ole days when I still thought Jas was a jackass....
Ahhh the good ole days....
.......
RP are you serious? I would think an Inland Empire house would be worth ony the copper value.
Must get something accomplished. Must get off computer.
I am listening fred
Hey, the world didn't end. I thought that with "no plan", the world would end. Where's the end of the world?
Liz, I know of at least 3 folks that were upside down on their loans- alot. They stopped making payments, and either bought or rented at half the monthly price of their old mortage, and let the old house foreclose.
I'm not condoning this, just sayin this is what I'm seeing. Credit scores are meaningless today. Especially when it means thousands of dollars saved and it takes almost a year to foreclose- a year without payments.
RP are you serious? I would think an Inland Empire house would be worth ony the copper value.
Ministry of Truth
Sounds like you've been to the Inland Empire...
I have never really thought that calling my Senators and Congressman would make much of a difference, but it appears there are enough pissed off folk like me that the Congressmen and Senators are listening. Shelby is my hero.
Hey, the world didn't end. I thought that with "no plan", the world would end. Where's the end of the world?
Where's the ker-BOOM? There was supposed to be a tremendous, Earth-shattering ker-BOOM!
COURIC: Explain to me why that enhances your foreign policy credentials.
PALIN: Well, it certainly does because our-- our next door neighbors are foreign countries. They're in the state that I am the executive of. And there in Russia--
COURIC: Have you ever been involved with any negotiations, for example, with the Russians?
PALIN: We have trade missions back and forth. We-- we do-- it's very important when you consider even national security issues with Russia as Putin rears his head and comes into the air space of the United States of America, where-- where do they go? It's Alaska. It's just right over the border. It is-- from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to-- to our state.
WH... WHAT???
Anyone
So what did WaMu cost the FDIC? I saw that JP was going to pay them 1.9BB but I'm thinking thats not the whole story...
....
You know if the credit markets seizing up does not slide us into a depression, the productivity decline from having all of us refreshing CR every 10 seconds might do it.
paulson plan is to institutionalize this, to pay crap bs prices for the dogshit and then let the other banks write up their level 3's to that bs price.
Fred: You are preaching to the choir on this board... You & Liz and other sensible people need to get the word out. I wish I knew how, but please try.
The open letter to Dodd on MW got some exposure, I'm sure others have ideas.
the end of the world happens only once. this probably isnt it.
I just wanted to bring this forward. This is a response to Concerned Observer from about 2 threads back. As a vocal advocate of "do nothing" I'd like to respond. It's succinct, don't worry.
Those who advocate "doing nothing" in this blog need to explain persuasively how and why this would work -- and perhaps provide some historic antecedents when doing nothing has ever worked for a country facing an analogously grave crisis.
You want 700bn dollars, you bring the pitch book. BTW, it had better be a REALLY good pitch book.
Wu wei. Show me I'm compelled to act.
LOL @ builderbob. And I plead guilty as charged.
cd writes:
biggest bank failure in US history...
dow only 50 pts down..
It really is now looking like the Shock and Awe campaign by Bush has backfired as everything seems fine in the financial sector....Wamu goes down and you have buyer lined up at time of takeover....why the need for 700 billion...
because thier is no need.....
Perhaps because the shadow bankers and government are artificially propping up the Dow and keeping from collapse, and they would prefer not to have to continue those kinds of machinations for all eternity. ... Have no doubt -- the crooks want to bring back short-selling; it's how they make their money.
"31 trillion on the win side and 31 trillion on the lose side"
One part of this, which showed up in the LEH unwind. Say a dealer does a swap for 10MM with a buy side customer, for 5 years. To hedge that risk, the dealer will do another swap with another dealer of either again 5, or maybe 7 years, depending on whether they want to do a little "curve riding" to have a net inflow of premium.
So the point is the total shows 20MM, but there is really only 10MM net risk at default. This is "netting," and when you watch the WaMu news, watch for that word. As the dealer's association, at isda.org, starts to post its protocols for settlement, you'll begin to see what the net effect is.
I'm not saying these things aren't huge and dangerous; they're just not as huge as the published, un-netted numbers would indicate.
Erin is disappointed there was no ker-boom-
I am afraid they will find another way to obtain their money under the dark of night
ps- I just don't like Eri
--
"I know I'm late to this party, but Erin Burnett is not a journalist; she's a fully-fledged member of a power structure "
anonanon,
She looks like a ccksck...
Gangs use sex for their plots. Lot of fun in Gangistan watching gangsters and their minions.
Donatella Versace is saying how important America is to her business. All that Wall Street money disappearing.
Jas
why couldn't we stlll be in the bubble- I miss the bubble
Catholic girl | 09.26.08 - 10:50 am | #
From Town and Country:
But a few weeks ago, when I bumped into Market Director Treena Lombardo in, of all places, the ladies' room, I practically put her in a half nelson so I could get a better look at the ginormous yellow-faced gold watch she was wearing. (This occurred post-hand washing, btw). Asking about the timepiece, I steadied myself for the letdown, ready to hear "Dad's Rolex" or "Baume and Mercier" or some other watchmaker leagues beyond my price range. Instead, she raised her eyebrows and informed me, "Michael Kors. $250. It's great, right?"
Needless to say, I shot straight over to the designer's Madison Avenue boutique and bought myself the same oversized Gold Chrono. (Launched last spring, it's intended for either men or women.).With its one-inch wide band and its nearly two-inch face radius, it makes my men's Bulgari watch look downright dainty. I'm happy to report that despite its massive girth, it's surprisingly comfortable. And the compliments!"
some of us still are
fred | 09.26.08 - 10:51 am |
As far as I know,from someone moving properties,there is only one bank really dumping them. DB. Everybody else is just sitting. It is really bad when every single low end foreclosure around here takes a MINIMUM loss of 100k. So far this month we have sold a whopping 100 properties. Most have been overvalued. There are a few people from up north with a couple of bucks to spend...but they will slowly dwindle.
Chris
Cynical Yes writes:
Can someone please explain to me why any equities even trade today? If I follow this Ponzi Scheme correctly there were 62 Trillion of Credit Default Swaps written. 31 trillion on the win side and 31 trillion on the lose side.
You can't look at the derivatives market as having a win side and a lose side. Really you are only talking about the notional amount of credit default swaps outstanding. Whether the swap is in the money (winning) or out of the money (losing), there are other risks, such as counterparty risk, etc. As the value of the transaction begins to move in a direction, there are collateral requirements that have to be met to ensure that the funds will be available if and when due. These collateral requirements can easily turn winners into losers. This is the domino effect that people talk about.
We're not in the Hoover phase. We're in the "Dulce et decorum est pro patria mori phase." We're in the Verdun and Somme phase.
The GOP and Dems today remind me of nothing so much as the field marshals of Germany and France trying to prop up a bunch of doomed hemophiliac royals with the economic lifeblood of your kids and mine.
GLOBAL CONCOMITANT BR ANYONE?
Inland Valley....the home values have come down, way down, but there are bidding wars on entry level and mid-level homes. By the time the listing hits the market there are bids against it. It doesn't add up. Where are these "investors" getting their money if everything is so tight.
So what did WaMu cost the FDIC? I saw that JP was going to pay them 1.9BB but I'm thinking thats not the whole story...
nades:
That's what I asked too. Wise CRites told me, and Jamie Dimon helpfully confirmed, the gvt only insures the accounts.
The bank holding company -- meaning the people who hold the debt of the now-effectively-dead bank -- are left holding the bag.
So maybe indirect impact through a blown up pension fund or something, but no direct liabilities for the state.
You want 700bn dollars, you bring the pitch book. BTW, it had better be a REALLY good pitch book.
Byzantine_Ruins
That was the most depressing part of BB's testimony yesterday. When pressed for what would happen if we did nothing:
I don't really know
That is not a $700 billion dollar answer IMHO!
.....
All the trillions of investments between banks turns out to just be invested in investments which were invested in other investments which were invested in other investments which were invested in a house in California or Florida by some guy who lied about his income.
wally
Amazing that "the richest country on earth" managed to transfer their economy to this platform, isn't it? We deserve to topple.
Credit default swaps are not tied to equities per se, but they influence equity prices. As the CDS market pegs a company as being less creditworthy, equity investors start paying attention and sell off or short the stock. This drives the stock price down and makes it harder for the company to raise capital to meet the collateral calls.
Dodd and Reid on CNBC
Escariot
smiles- I'm there
To: Byzantine_Ruins
Too succint for me. Can't follow your argument, don't see the historic precedent.
Off to see the Aspens this weekend - unhooked from the blogworld. Looking forward to seing what the world looks like on Monday.
So maybe indirect impact through a blown up pension fund or something, but no direct liabilities for the state.
Byzantine_Ruins
If I understand it correctly thats the best news I've heard all week....
....
I saw GREEN on the DOW!!
WTF!?!?!
mccain getting trashed.
Inland Empire - There is no copper. Pressure line plumbing was polybutylene (need to keep the lawyers busy in the future)and it is damn hard to get much copper from the compression rings.
The wiring left in a van sent by the bankers last week....
Maybe they can machine toothpicks from the lumber to sell to the Japanese?
That green is gonna kill the $700B, LOL
"It will happen because it has to happen," Pelosi, a California Democrat, said in an interview with ABC's "Good Morning America"
Well, that settles it then.
McCain is a nut. He should step down and let a real Republican run in his place.
Bond Girl:
You can't look at the derivatives market as having a win side and a lose side. Really you are only talking about the notional amount of credit default swaps outstanding. Whether the swap is in the money (winning) or out of the money (losing), there are other risks, such as counterparty risk, etc. As the value of the transaction begins to move in a direction, there are collateral requirements that have to be met to ensure that the funds will be available if and when due. These collateral requirements can easily turn winners into losers. This is the domino effect that people talk about.
You have 62 trillion, but only 2 possible directions, win or lose. So 31 trillion is in a lose position. How do stocks of financial companies have any value at all? How do they trade? The winners will never get paid, because the losers cant pay. Sounds like a ponzi lose lose transaction? What am I missing?
Concerned Observer
it will still be here
remember duct tape?
I will be surprised if anything gets done before March - new congress & new administration. Then we'll know the damage.
I doubt it will be a KABOOM too - more of a gradual grinding down of bad positions and increasing lay offs.
But I don't see how this rescue slows the lay offs - they are coming anyway - you can't have these kinds of disruptions w/out cost cutting & 'head count' is where that is ultimately done.
Let's send all the politicians to the bottom of the sea and start over with 5-6 regional governments to oversee the U.S.
CP 30 day spread down to 357. Better than yesterday. No need for urgent bailout.
Just go shopping everyone. Nothing to see here.
Dow is almost flat because Bush cried wolf and everyone knows he's always dead wrong.
Sad when Dodd (ew) seems more Presidential than the President.
I doubt it will be a KABOOM too - more of a gradual grinding down of bad positions and increasing lay offs.
Can't have a KABOOM. Gotta give the guys who orchestrated this thing time to grab the life boats before everyone else.
That was the most depressing part of BB's testimony yesterday. When pressed for what would happen if we did nothing:
I don't really know
That is not a $700 billion dollar answer IMHO!
'I don't really know' is the only honest statement I've heard all week. Its a start.
Dow is almost flat because Bush cried wolf and everyone knows he's always dead wrong.
Finally a reasonable explanation. Thank you.
Mel writes:
Dow is almost flat because Bush cried wolf and everyone knows he's always dead wrong.
I just hope this isn't the exception that proves the rule.
Main street will have a terrible time, bailout or no bailout.
That's right. Whether I need to be 'edcuated' or not (econ is not a strength for me), the doomsday message is old for me. Alternatives to a plan that started on a napkin is ok with me.
Think of it as Bush's very own black swan. We've never seen him be right before, but...
why the rally in the Dow?
They obviously are now backtracking on the armageddon
I think maybe just maybe we the people had a trickle of an influence
but- they will find a way to get their (our) money
B_R:
Gov't action is the salve that we've become accustomed to crave.
That wu wei Lao-tze stuff doesn't pay the bills!
Pass a law, start a business, that's our motto!
Git with the program good man!
Kinetically yours,
Scamserus Billsalot
ARW writes:
why the rally in the Dow?
Anytime the promise of new money is thrown in to the pool the markets will give a happy bounce.
"It will happen because it has to happen," Pelosi, a California Democrat, said in an interview with ABC's "Good Morning America"
Well, her party is the majority in Congress. Pass the effing bill if it has to be done and quit bluffing.
ARW writes:
why the rally in the Dow?
Why ask why? Just buy buy buy!
I doubt it will be a KABOOM too - more of a gradual grinding down of bad positions and increasing lay offs.
But I don't see how this rescue slows the lay offs - they are coming anyway - you can't have these kinds of disruptions w/out cost cutting & 'head count' is where that is ultimately done.
dryfly
I agree. This is not your grandfather's depression. This is a slow unwind. Just as there were no televised bank runs on WAMU, but local reporting is saying depositor removed nearly $17B from WAMU in the last 10 days.
Grinding and silent, that's perfect description, dryfly;)
Glad I am in a "safe" profession!
dryfly - good point...
The SPX, NDX, RUT all look like bear flags to me. With high volume at the untested lows this a.m., and a light volume retracement up, I strongly suspect we're headed lower before markets close.
Senators Dodd...Reid press conference this morning. "This is a man made problem." Now I know why they get paid the big bucks.
Sonic Seuss writes:
Just go shopping everyone. Nothing to see here.
I did. .. The $7.73 I had left until payday bought me a gallon of milk, a loaf of bread, some oranges and two cans of tuna.
Is the economy stimulated now?
Has anybody else noticed the stealth rate cut
?
Fred at 10:51 gets it.....
Remember all the talk of future write-ups last year and we all laughed??
Well that will establish "market prices" don't you think?
Nevermid that LEH sold off the very same paper at .20, they can use the distressed sale BS and not have to mark it accordingly.
Institutionalized theft and deception.
Sanctioned by the Neo-cons.
Ciao
MS
So are we still on for bank failure Friday?
Too succint for me. Can't follow your argument, don't see the historic precedent.
I mean, I don't need to show you precedent for anything. If you want to advocate an action, you are responsible for lobbying for it. The default action of the prudent ruler is "observe carefully, doing nothing".
It's called "wu wei" and it's a very useful concept when governing resource-limited structures.
Read Han Fei Tze.
Can't have a KABOOM. Gotta give the guys who orchestrated this thing time to grab the life boats before everyone else.
ac | 09.26.08 - 11:05 am | #
This is a stock blog (even though CR never intended that) - most folks here don't work real jobs - at least during the daytime hours. The real damage is coming - it will be job loss and it will inflict a LOT more pain on Main Street than a drop in the market. They are clueless how bad it could be - if they knew they'd shit.
But the 'fix' doesn't address that - it can't.
Also - the Chinese haven't voted with their dollars yet. Wait until they do - that I feel is BB & Hanks real concern - when Asian CBs fail to show up at the auctions. Then it will be for real... closest thing to a KABOOOM we'll get.
"It will happen because it has to happen," Pelosi, a California Democrat, said in an interview with ABC's "Good Morning America"
Dear Ms Pelosi,
Why the f*ck does it have to happen....
If no one else on the planet knows, something tells me you dont either...
.....
The GOP and Dems today remind me of nothing so much as the field marshals of Germany and France trying to prop up a bunch of doomed hemophiliac royals with the economic lifeblood of your kids and mine.
mal | 09.26.08 - 10:57 am |
Nice writing.
Cynical Yes and Bond Girl - Thx - I think I am understanding some of what you are saying. Its written clear enough - I just don't have the concepts and vocab yet.
Kim Jong Nemo writes:
Has anybody else noticed the stealth rate cut?
Hey, what'd you do with the old Kim Jong? BTW, how do the groovy glasses fit?
so wha'd I miss?
B_R,
I once had it explained to me like this.
If you say there is a little green troll in the corner of the room (note not Seb) it not my job to prove there isnt.
Some people have trouble with logic.
.....
is there a web site where all the congress critters email addresses are listed?
I am going to write to 'em. No socializing of these losses!
McCain is getting killed by Reid
He will have to answer this
Remember this from the last two paragraphs of Roubini's testimony to congress? Why isn't an economic tiger team sitting with congress right now? (rhetorical, sigh):
What is the size of these losses for financial institutions and investors? Again this is a complex estimate as it depends on how large in the fall in home prices and the recovery rate given default and foreclosure. The only hard estimate that I have found so far is one by Calculated Risk. The way he puts it: Assuming a 15% total price decline, and a 50% average loss per mortgage, the losses for lenders and investors would be about $1 trillion. Assuming a 30% price decline, the losses would be over $2 trillion. Not every upside down homeowner will use jingle mail, but if prices drop 30%, the losses for the lenders and investors might well be over $1 trillion (far in excess of the $70 to $80 billion in losses reported so far).
What will be the consequence of losses of over $1 trillion and, possibly, as high as $2 trillion? That would wipe out most of the capital of most of the US banking system and lead most of US banks and mortgage lenders that are massively exposed to real estate to go belly up. You would then have a systemic banking crisis of proportions that would be several orders of magnitude larger than the S&L crisis, a crisis that ended up with a fiscal bailout cost of over $120 billion dollars. And the worrisome part of this scenario is that with home prices likely to fall by 20% or more this scenario of systemic banking crisis is becoming increasingly likely.
That's what I am saying - it is not a win and lose. The CDS market is fluid due to counterparty risk. You have to think that these parties are not just in one transaction. They hold one position that they hedge with another position which hedges another position... ad nauseum. Whether you've won depends on the status of your counterparty's portfolio of swaps, not just on your transaction. Not in terms of calculating the value of that transaction, but practically speaking as to whether you will ever get paid. Credit default swaps for companies are different than the mortgage-related derivatives that the companies may hold.
I would bet a lot of people trading in financial stocks are technical traders who will be in and out and they do not care what the value is. If anyone thinks these institutions are a value they are crazy. I agree, no one can value these banks because their largest positions are opaque. They may think the bailout will help the bank, but they do not know the bailout will help the bank.
Why can't WaMu be the model for the "bailout"? Wipe the shareholders, immediately transfer the functioning part of the company to another entity so it can keep doing what it does, and then take whatever time you need to deal with the "troubled" assets, with any proceeds going to the stakeholders (bond, preferred, etc.)?
Thats Ballgame, Comrades writes:
Let's send all the politicians to the bottom of the sea and start over with 5-6 regional governments to oversee the U.S.
seconded
dryfly writes:
most folks here don't work real jobs
And most of you are boomers or late X-ers; my generation's voice is sorely lacking (and very ignorant about this, as I learn from my wage-slave peers). Some of them remember my dire warnings from years back but most don't care. "Oh well. Fuggit."
Jas,
Google US House of Representatives and then Google US Senate. You can find all their contact info on their sites, as well as who is on what committee. We've already contacted ours, but haven't heard back yet (doubt that will happen).
On the odd chance anyone else studied econ at Rutgers, every time I read a comment from Jas I hear it in the voice of my old Macro Professor Dutta.
Why has not ONE single Economist been called to testify???
LMAO! There seems to be a bit of cognitive dissonance going on in this thread. Trashing McCain for reportedly blowing up this bailout that almost none of you actually support, while praising Dodd, Pelosi, and Frank who are pushing for it, albeit with changes that rein in Paulson, but then add lots of other spending on top.
Get your opinions consistent, at the very least. If you don't support the bailout, then trash those pushing hardest for it.
Because..THEY CAN'T HANDLE THE TRUTH!
Persecuted you do sound persecuted
Anonymouse,
I'm part of sandwich generation to be re-dubbed the "Sh*t Sandwich Generation".
We're all Sh*t Sandwich Generation now.
Reid: every constituent has said they are unhappy, but we HAVE to do this. We know what is best for Wall... I mean Main Street.
Why can't WaMu be the model for the "bailout"? Wipe the shareholders, immediately transfer the functioning part of the company to another entity so it can keep doing what it does, and then take whatever time you need to deal with the "troubled" assets, with any proceeds going to the stakeholders (bond, preferred, etc.)?
I happen to agree with you. The ruling elite however have made many side bets (CDS) that will cascade many financial institutions into bankruptcy as soon as one of the big ones goes down.
It is the cascading that is causing some heartburn. Naturally, if you let the heartburn happen, people might change their behaviors. It is painful, but few in power want to be responsible for causing pain.
No freaking bailout.
I continue to fax and email senators and congressman. It may even be a lost cause, I don't know. I don't really care as it wouldn't be the first lost cause that I fought for.
It's still insane to expect the Taxpayers to pay for the sickness and reckless bloat on Wall Street. It's just insane.
Again, no freaking bailout.
A deal will be made, it will involve quite a bit i am sure, since they were spending in access of 150B/day buying rubbish last all week.
Am afraid both parties have sold out if any deal comes.
Stocks are up, yet volume is light, right? What does that mean? Institutions on the sidelines? Banning shorts has that effect?
McCain is for the bailout - he just wants to be the one who brokers the deal.
Wtf Sears on no short list...
amazing..PE 50 $90.00 stock...
As mentioned above best to stay out of this rigged game...
@Kim Jong Nemo
I did notice the stealth rate cut. More importantly, earlier this week, I noticed the increasing stdev. I think the fed is tring to intice borrowing from other banks rather than from the discount window because the discount window is quickly running out of money.
Pony money on the way!
Senate Democratic leaders unveiled their $56 billion economic stimulus package on Thursday, less than an hour before leaving to meet President Bush at the White House to continue the fragile negotiations on the financial rescue bill.
Calling it an economic recovery package that will help middle-class families struggling in the weakening Bush-McCain economy, Majority Leader Harry Reid (D-Nev.) and Appropriations Committee Chairman Robert Byrd (D-W.Va.) pitched the plan with the familiar mantra of not forgetting Main Street. The plan includes a $7.5 billion down payment on $25 billion in loans for the struggling auto industry.
So that's the rub, eh? No bailout for your crooks unless we get to hand out candy too. Ya think the people will buy the part about this creating hundreds of thousands of new jobs?
Who cares?! Vacation!!!!!!!!!!!!!!!!!!!
Catholic girl writes:
McCain is getting killed by Reid
He will have to answer this
Catholic girl | 09.26.08 - 11:13 am | #
Why? Acknowledging it gives it credibility. Instead just keep attacking the proposal - until he's elected then HE WILL push like hell for pretty much the same bailout (once his advisers fully brief him)...
We'll get our bailout [rescue] the only question is when and who hurts the most... Will it come before the failures and lay offs or after the failures and lay offs... but we will get all three: bailout, failures, lay offs.
Count on it.
my generation's voice is sorely lacking
You have got to be kidding. You mean your gen has timid voices?
Then for gods sake, speak up!
And most of you are boomers or late X-ers; my generation's voice is sorely lacking (and very ignorant about this, as I learn from my wage-slave peers). Some of them remember my dire warnings from years back but most don't care. "Oh well. Fuggit."
Persecuted Comrade Anonymouse
My daughter, who is late twenties, reports the same. She works with people who are well educated, all with BA/BS and most with graduate degrees, and this whole thing is just a "non-event" for them. I think mainly because having so little time in the "system" they have less skin in the game.
Reid and dodd are complaining about nasty constituent e-mails and phones.. poor guys...
But they still think they can ram it down their constituent throats.. i think they might be in for a surprise..
Any clue on why democrats are such unimaginative feminized mommy types who cannot see the writing on the wall.
We were built on capitalism, and if we have to die with capitalism, so be it. I'll take my chances with no socialist bailout.
Screw the Democrats. Tools.
JP just keeps buying up his big counterparties everytime they fail.
Wamu is going to be the one that sinks them. The loss estimates on Wamu's OAs and HELOCs are optimistic at best.
Look at my right hand. Do not look at my left hand, just look at my right hand.
They see the bailout as a good distraction for supporting their other interests.
Anon writes:
McCain is for the bailout - he just wants to be the one who brokers the deal.
Anon | 09.26.08 - 11:17 am | #
Won't happen UNTIL he's elected.
money markets are pissed, bond desks are pissed.
i read further up that nothing will pass until march. bullshit. your atm will be bone dry and there will be riots in the streets if they wait until march.
NOTHING is moving right now. it was quite easy to move this from a bail out for bankers to a key move to allow money to move about the globe.
i didn't agree with the paulson plan in any form, but something must be done. soon.
what's the lesser of two evils here?
JP,
We were dubbed Generation Pepsi in the late '80s/early '90s, now we're Generation *Bling *Bling, but older than Generation MySpace - wtf do you think we know about anything?!
As someone who despises John McCain, I must say that calling this the Bush/McCain economy is freaking ridiculous.
If that's the strategy, get ready for Kerry Folds Part Deux
I still want to know: Why haven't the criminals George W. Bush, Henry Paulson, Christopher Cox, and Dick Cheney been put in jail yet?
Whereismyretirement,
Damn you mean I am the only 27 year old calling these guys? But I agree I know what everyone is saying, my generation is more concerned about who get kicked off dancing with the stars...
dryfly writes:
Also - the Chinese haven't voted with their dollars yet. Wait until they do - that I feel is BB & Hanks real concern - when Asian CBs fail to show up at the auctions. Then it will be for real... closest thing to a KABOOOM we'll get.
The Chinese will cooperate, they have no choice in the current economic environment.
Meanwhile in Europe;
Home fd.nl - Het Financieele Dagblad
On friday, Fortis tried to denounce worries about its financial status.
In a statement released on friday CEO Verwilst assured Fortis would not go BK.
At the Amsterdam stock exchange (AEX) Fortis lost 12 percent of its value today.
-
Rumours circulate Fortis will receive some kind of capital injection from Deutsche Bank and/or Societe Generale by monday.
The only group for capitalism is the House repubs with a few others attached
the fourth wheel hanging tough
Voting for the lesser of two evils makes you culpable.
Matt,
Why do you assume there only two evils here? Is it really that black and white?
I suspect Bush wants to pull out of his own plan and go with the House Republicans - the idea of suspending capital gains taxes must be irresistible to him. I predict: the White House will be sending a new plan to Congress that differs substantially from the current one. I hope, if only for drama's sake, that Bernanke and Paulson then resign.
Look
trying not to sound toooo sentimental
I say spit in the face of it
go with capitalism
we'll dig our way out
we're smart hardworking people
don't socialize
we good just be the next great generation
or- the next broke generation:)
I vary my thoughts
But they still think they can ram it down their constituent throats.. i think they might be in for a surprise..
They will regret it. There is no way this package is going to return us to good times, and they will be judged for how they chose to address it. They are making the same mistake as the Iraq War politically - thinking that the war will be over in a week and the Iraqi people will embrace them.
My daughter, who is late twenties, reports the same. She works with people who are well educated, all with BA/BS and most with graduate degrees, and this whole thing is just a "non-event" for them.
--
Agreed. I'm 27 and promise you not one of my friends has a clue how serious is this is. From construction workers to financial advisors, it IS a non-event.
They have never known anything but easy money, semi-recessions and the ability to borrow at any time, for any thing.
I have only tried once to outline what is happening, it wasn't received well. "oh this shit happens all the time, the banks screw around and the government will straighten it out."
Okay.
wtf do you think we know about anything?!
LOL. You think that has stopped congressional leaders? or the president? or even me?
I don't know how to teach gen bling that this is their future we are talking about, but if you have ideas I'm listening.
Stocks are down 63, not up
Bush was saying this a.m. "Republicans and Democrats will come together blah blah blah."
Yeah, they'll come together to support their Wall Street Masters.
People always wonder, Gee, why do companies like Goldman Sachs give money to both sides of a Congressional campaign?
Now you know why. So they can come together and rape the taxpayer in Wall Street's hour of need.
No freaking bailout.
Matt writes: what's the lesser of two evils here?
Matt,
That's a false choice fallacy. There are plenty of options. Some times the best one is do nothing but create a vehicle that can step in and clean up the mess like the RFC in the depression. It's the orderly unwind theory which is what these guys are now trying to do having accepted that unwinding was occurring no matter what.
Persecuted Comrade Anonymouse writes:
dryfly writes:
most folks here don't work real jobs
And most of you are boomers or late X-ers; my generation's voice is sorely lacking (and very ignorant about this, as I learn from my wage-slave peers). Some of them remember my dire warnings from years back but most don't care. "Oh well. Fuggit."
Persecuted Comrade Anonymouse | Homepage | 09.26.08 - 11:14 am | #
Great point, 'mouse. Experience, perspcacity in abundance. But Lord, I don't know how you all keep up. Cool spells in the business only get me half way caught up here lately, as diligently as I try.
But what a resource.
Thanks to young and old on these threads.
CR just dropped a new thread
Damn you mean I am the only 27 year old calling these guys?
NoVAOnlooker
I'm 28 and all but one of my buddies give two sh*ts about this. And the one that is as pissed as I am is only so because he hates the GOP.
......
I have a question. Is it possible the debt markets are seized up because the traders in that market are waiting for the bailout to be finalized? You could certainly over or under-pay for something now depending on what the final resolutions will be?
playing devils advocate here, but don't leaders sometimes take very unpopular decisions? they pin their reputation on being proved right down the track.
I don't think I'd like a leader who always takes a poll and does what the majority wants. That isn't a leader.
If the banking committee got presented with bleak scenarios from their experts you can't blame them for ignoring their constituents at least for a while.
Of course the real failing here is Bush. He should be leading right now, doing the job to convince voters of the necessity to do something.. I think he did that ok for many americans after 9/11 (even though his decision was arguably disastrous).
NoVAOnlooker, my daughter who is 26 is joining you, thanks to my being here on CR...but you guys may be the only two;)...Not!
Alot of you are smart cookies but for most it takes a lifetime of watching these crooks in DC to understand (develop the cynicism) when they are sincere about helping Mainstreet and when we're just getting a BJ.
McCain=Bush
Pali
The Chinese will cooperate, they have no choice in the current economic environment.
NEOCON | 09.26.08 - 11:21 am | #
No no - they still have a pretty beefy red army and the ability to crack down on their people if necessary. They will look at us and look at Putin and say... "Hmmmm, which seems to be working out better?"
Then just not show up for our auction.
Bond girl, thanks--(use google... doh!)--it looks like their server is swamped. Hopefully the wires are humming with messages against this awful plan. If the meetings can be inconclusive again today, I think sanity may prevail, or at least the critters will get a full earful of how we voters really feel.
skent writes:
Matt,
Why do you assume there only two evils here? Is it really that black and white?
skent | 09.26.08 - 11:21 am | #
--
no, i would love to see something else, but do you think it is possible?
if you're trapped on a burning boat in a sea of shit, you can burn to death or swim in shit. sure, you would love a winged angel to fly you over the shit, but she isn't coming.
see you in the shit! (the lesser of two evils)
lama writes:
I have a question. Is it possible the debt markets are seized up because the traders in that market are waiting for the bailout to be finalized? You could certainly over or under-pay for something now depending on what the final resolutions will be?
debt traders are definitely on the sidelines right now
The stealth rate cut is also the result of billions of "Creation" this is why they are trying to look like they are combating it by doing the reverse repos. Now having said that there is no reason they need to do the repo since this issue is all about liquidity right?
I still think this market gets shut off later as the bailout will not be done today. The bankster's will provide additional "incentive" to make them do something this weekend.
No volume to speak of.....ripe for a take down. However the money put into it late last week and early this week has alot to do with why it has not tanked with the WAMU news.
Ciao
MS
Go Reid.. Beat up on McCain and upset the Republicans. Now the deal is going to be even harder to get done.
Thank you, thank you thank you !
-K
I know I'm late to this party, but Erin Burnett is not a journalist; she's a fully-fledged member of a power structure that wants its bill, and wants it now. She really is an embarrassment to a hard-to-embarrass profession. The only question is --who is she tricking for here --Goldman or GE?
anonanon | 09.26.08 - 10:20 am | #
I don't know but she sure is cute.
matt, we've borrowed too much. Way too much. The only solution is a period of non-borrowing. That's what people don't understand.
The object of borrowing money is to bring some of your money from the future into the present. But when that future comes, you have to give up that money. That's the way it works. We're now in the payback period that we promised for years would eventually come.
The future is now. Pay your damn debts back. That includes you, Wall Street.
I'll be honest. If this had happened when I was 25 or 26, I would not have understood all of it and paid as much attention.
But I'm 38 now, and have long since realized how bad things could be in this nation when I'm in my 50s and 60s. I will not have a fairy-tale retirement.
NEOCON,
Not freakin true. Chinese traders have been ordered to trade carefully, which is the next step to quarantine. Yes, they'll hurt, but do they really have constituents who can vote their officials out of office? Sure the peasants can rise and the middle class rally, or they can accept a scaled back standard of living for a while while their central government moves much faster than ours can. I'm not diminishing how large the impact will be, but for China, it won't be catastrophic, just really really painful. Us, not so much.
Unfortunately, this is not about party lines, this is about a fundamental misunderstanding of economics and finance. They speculate to know why this is happened, but they fail to realize that throwing money at it will not solve the problem. We continue down this economic path but it is still leading to the abyss, You cannot build an economy on debt plain and simple.
Matt: We may know some of the same folks. While we were getting all puffed up and strutting around talking about how the rest of the world can Efff itself, I often asked if anyone had ever considered war on their own street. It seems as if Americans think war is something that happens on CNN, that violence is an anomaly, and that economic collapse only happens in "backwards" countries.
Now they're going to be popped in the kisser with a hot waffle iron. Life designed by Disney is over.
Whereismyretirement writes:
NoVAOnlooker, my daughter who is 26 is joining you, thanks to my being here on CR...but you guys may be the only two;)...Not!
Alot of you are smart cookies but for most it takes a lifetime of watching these crooks in DC to understand (develop the cynicism) when they are sincere about helping Mainstreet and when we're just getting a BJ.
I'm 27. Rest assured that some of us are paying attention. And I've been doing my best to inform my friends and coworkers of the gravity of the situation. My office nickname was originally "Dr. Doom", although lately they're calling me "Nostradamus".
I knew that was Erin's appeal- finally someone admits it
i didn't agree with the paulson plan in any form, but something must be done. soon.
Is that what the Republican House contingent actually saying? That nothing needs to be done? It's a majority Democratic House and the President will sign it. If it's so urgent, do it.
"I don't know but she [Erin Burnett] sure is cute."
Cute can still get you a lot of painful diseases when cute is also a whore.
i didn't agree with the paulson plan in any form, but something must be done. soon.
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
Compulsion is different than your perception of urgency.
Bond Girl, I want to become Bond Boy, Any ideas? Is your industry hiring or firing? I'd expect the latter
Now they're going to be popped in the kisser with a hot waffle iron. Life designed by Disney is over.
Currently Smoking Cannabis
CSC, I love that:)
Does this mean I can't were a tiara anymore?
Gavshire, haha I think we are on the same page. We used to do a lot of work with FNM and FRE, you should have seen me tell my President and CEO that they better come up with a new business plan. That was two years ago...
I'm 27. Rest assured that some of us are paying attention. And I've been doing my best to inform my friends and coworkers of the gravity of the situation. My office nickname was originally "Dr. Doom", although lately they're calling me "Nostradamus".
Gavshire
Good! Stay alert. That's how you survive and prosper!
Screw the boomers. never has there been a more self indulgent generation. The house bubble was one of the greatest inter-generational looting propositions going. The reflation of NASDAQ was critical to their retirement. Ramp up the foreclousres. BBC did a nice piece on the carparks in Cali that are serving as temp mobile housing parks. Reminds me of the story of the marine when asked what he felt when he shot someon and he responded recoil.
I'm 27. Rest assured that some of us are paying attention. And I've been doing my best to inform my friends and coworkers of the gravity of the situation. My office nickname was originally "Dr. Doom", although lately they're calling me "Nostradamus".
Gavshire
Unfortunately for me my brother is the only one who realized I was reading the right stuff... Most still think I'm a pessimist by nature...
.....
whoops: some presenter chick on cnbc said that last week her 20 year wall street veteran friend was so scared he was ready to put his cash in a safety deposit box, but she "didn't want to say that on air because it might frighten people".
Byzantine_Ruins writes:
i didn't agree with the paulson plan in any form, but something must be done. soon.
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
Compulsion is different than your perception of urgency.
Byzantine_Ruins | Homepage | 09.26.08 - 11:29 am | #
--
really? you may be right. i am just of the belief that this freeze is not going to shake loose. that is why i said something "needs" to be done.
agreed to the above comments that it is time to repay the debt we have accumulated. sorry if i am coming off in disagreement, i agree with much of what is being said here, but i don't believe that the markets will work itself of this mess without intervention.
i also believe that leaving markets frozen for this long will in fact make matters worse for millions of people, maybe hundreds of millions.
this is a fork in the road and the paths lead in very different directions from here.
also, thanks for the generation note on this thread, it is awesome to see so many 20 somethings in here, i always thought i was alone there.
lama writes:
I have a question. Is it possible the debt markets are seized up because the traders in that market are waiting for the bailout to be finalized?
They are gaming the system BOTH ways - some waiting for it to fail some to pass - price is grid locked either way.
Best thing is to vote it up or down & let the damned market clear!
You just have to try with individual firms. It will be tough.
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
Exactly.
Does this mean I can't were a tiara anymore?
Whereismyretirement
I'd hold on to it. I'm sure there will be a holiday commemorating the old America.
Currently Smoking Cannabis writes:
"Now they're going to be popped in the kisser with a hot waffle iron. Life designed by Disney is over."
Let me calculate the weight of that iron. Aaahhh let's see ~ 31 T, based on the back of the envelope calculation. Hank left it in the bar and I picked it up. No plagarism this time...
No, nothing "needs" to be done. What you really mean, if nothing is done, you and a lot of your friends will experience severe hardship, and there will be a payments system crisis. You want something to be done.
agree completely
Dryfly
I agree completely. And it won't just be China.
They are all going to channel their inner Henry Kissinger and say "make the American economy scream."
Salvador Allende is up in heaven smiling, and crying at the same time because he was a decent man.
Allende's revenge is coming to the USA.
What type of firms? I'm thinking about sending my resume over to Pimco. A little nervous because I went to a B/C level B-School. Are you talking small specialty shops or the big players?
TIA!
Ugh, can't get any decent bids on my WaMu Oct $4 puts. I think $3.95 is a fair offer -- virtually zero risk and with ~25 days left an annualized 17% return on investment.
I'm dying to use that money to buy puts on Sears and J. Crew. Does anyone else have any retail short favorites?
"i didn't agree with the paulson plan in any form, but something must be done. soon."
Spending $700MM just because something has to be done?
This site has become surreal.
really? you may be right. i am just of the belief that this freeze is not going to shake loose. that is why i said something "needs" to be done.
The market will clear [shake loose] when they know the outcome of this jockeying - the 'price points' will be determined by what the outcome is.
That is what is being gamed and why a 'no deal' is a 'deal'.
"I want to become Bond Boy, Any ideas?"
My two cents. Look at the risk management function. Buy a Fabozzi book or two on the subject, see what it's about. Computer skills and stat skills required.
RM is considered in most places as "middle office" the desks are the "front office," so the competition is not as great, and, in fact, after a couple of years, you get to know the traders, you get to know the products, and might get a chance to move in as a junior guy on a desk.
Also, risk management, both credit and market, as well as operational, is only to get bigger in a lot of places.
G H,
Someone just wrote Sears is on the list. Which makes sense because they are a hedge fund in drag.
I havent checked tho...
ARW: keep reading.
since the generational factor is in play how about an ol' fashon a/s/l check.
29/m/dc
On Sears:
I can still buy puts, albeit at a premium
I'm dying to use that money to buy puts on Sears and J. Crew. Does anyone else have any retail short favorites?
Yeah urban outfitters. Painfully hip and popular but I have trouble believing that in a downturn princess will still get her credit card bailed out by daddy every 6 months.