Sam Zell starts out telling CNBC that free money was the problem.
Then he says the housing market, in a downturn for 18 mos. will turn around next spring. (Only a two year slump.)
Then he finishes by saying the Paulson plan will recapitalize the banks and get things going again.
Uh, Zell, more free money is the answer??
As soon as I heard that GS and MS were changing status so they could take deposits, it was obvious to me that they wouldn't be opening branches, but rather buying them up at fire-sale prices from failing banks. Coincidentally, wasn't that the same day the announced that Wamu might be broken up?
You know, I can't really imagine the mental process of someone who would deposit their money in a bank with "Goldman Sachs" on its sign out front at this point in time.
Question to the finance gurus here: When will we know when/if this "bailout" thing is over? Clearly, if they vote "yes", it's done. But what if the Dems dont? Is this a "it HAS to be done, but how is the question", or is it even a iffy thing that this "HAS" to be done at all?
Absolutely! And hank is in his last coupla months so there is a sense of urgency to get things DONE! WHo knows when GS will get another chance like this to loot the US Treasury.
Can Goldman Sachs be stopped? Newt Gingrich gave a great interview to NPR yesterday where he warned that GS was now in charge of our fiscal policy. How are we letting this happen?
[I can't really imagine the mental process of someone who would deposit their money in a bank with "Goldman Sachs" on its sign out front at this point in time]
PRESTIGE! You get a $600k/yr teller as a personal banker to manage your $362 checking acct. They can UPSELL some investment services to the unwashed masses.
Love to see how it works out for the crew @ $GS$. Could be a humbling experience...
The sun will still come up if they vote down Paulson's bill AND Dodd's bill, and nothing is passed.
Farms will keep growing food.
Some banks and hedge funds will blow up and there will be mass unemployment in the FIRE industry.
It will be a big dislocation but not the end of the world.
If the bill is passed, the banks will be able to keep bad stuff on their books at marked-up prices for many years, taxes will go way up. It will be a slower much longer torture.
Here's an even better idea. Force the banks to issue new equity, buy it at market price directly from the banks. Bingo, the banks are recapitalized, the Treasury is not gypped, everything is transparent. (Not my idea, a couple finance professors thought of this.)
Well, it's not for so long that this bill isn't signed.
Stock mkt off, but not a scary amount.
let it go down 50 or 100 points a day only, a manageable amount and we may be home free. And after 10 days and another 1000 points down, yours truly starts getting back in. Well, maybe 1500 points down. don't want to be a knife catcher.
Idiots on Morning TV saying stocks are cheap. Gosh, now they are even cheaper. 9000ish--THEN they are cheap.
Question to the finance gurus here: When will we know when/if this "bailout" thing is over?
Here is my take after hearing some of the BS today.
Congress knows its mostly a power-grab BS.
They are gonna tear up and twist the "Paulson proposal" in so many ways that it won't be recognizable. You could see in Paulson's body language how unhappy he is with a lot of their constructive criticism.
When the bill is done, probably in about 3-4 weeks, Paulson and Bush will then have to decide if they can do more through exec fiat than being under Congress' thumb. Or, they can threaten a veto as a way to get more leverage. That could set up a bigger showdown and lead to nothing getting done.
There's no doubt now that Congress is gonna make huge changes in Paulson's plan. There's too much similarity between the Democrat and Republican critics. Both are pissed at Paulson.
I just left a complaint about suspected fraudulent activity at the Department of Treasury's hotline. Against Henry Paulson. My concerns included defrauding 310 American citizens and their progeny of tax payments for multiple future generations, looting of the national treasury, violation of Constitutional separation of powers by claiming spending authority that resides in the Legislative branch, violation of Constitutional separation of powers by claiming immunity from Judicial review, and a few other things.
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
Caitlin writes:
I just left a complaint about suspected fraudulent activity at the Department of Treasury's hotline. Against Henry Paulson. My concerns included defrauding 310 American citizens and their progeny of tax payments for multiple future generations, looting of the national treasury, violation of Constitutional separation of powers by claiming spending authority that resides in the Legislative branch, violation of Constitutional separation of powers by claiming immunity from Judicial review, and a few other things.
I honestly believe the best course of action is for the gov't to buy all foreclosed houses at foreclosure prices, salvage the materials, and level each one of them. Then, have a two year home building moratorium on any market over 5 months of supply. Supply problem is corrected and we can then get on with things. Homeowners are bailed out as supply decreases, but the banks collateral, except for the land ground and savaged material is gone. Main Street wins. Wall Street loses.
So GS wants IMB. So much for them swooping in as a white knight and snaching up WaMu from the reluctant embrace of Sheila this Friday. OTS suggesting the end of the rope is not far off...
As BB pointed out so famously there is never a need to bail out the Fed. It can always print.
But printing causes inflation. Inflation causes pain, domestically and internationally. It also causes benefit to some people who owe a large mortgage which now has a larger real value. It can inflate the housing market and solve that problem which everyone agrees is critical.
The "bail out the Fed" solution is another version of injecting money into the banks but sterilizing by taking it from the pockets of consumers. That's better for the banks and better for the foreigners.
But it will cause a major Depression for the consumers.
I vote for a REAL helicopter drop, Ben, dropping it onto everybody. Don't steal any more from the poor to give to the rich!
"Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials."
Yes, and McCain really did vet Palin prior to announcing her as his VP.
``Its benefits, in its current form, will be largely limited to investment banks and other banks that have aggressively written down the value of their holdings and have already recognized the attendant capital impairment,'' Jeffrey Rosenberg, Bank of America's head of credit strategy research, wrote in a report dated yesterday, without identifying particular banks.
For example, the FDIC is selling IndyMac assets and those might be the sort of thing wed be interested in looking at as soon as our buddy Hank comes up with $100 billion for us."
This was posted over at Talking Points Memo - which has now largely switched over to issues regarding the bailout.
Please, tawk amongst yourselves :
TPM Reader JL's note too ...
I just saw your post "More on the tell ...". Let me try to explain Bernanke's thinking. I'm a little puzzled by the exact language the Marketwatch article attributed to the Fed chief, but I'm pretty sure I understand his logic. (FYI, I spent over a decade with a company that services the securitization industry, so I have some background here.)
The bulk of the assets that the Treasury would buy under the Paulson plan are the highest rated "tranches" of subprime bonds issued between 2005 and 2007. These bonds sit above other, lower rated bonds in the capital structure of the relevant securities. To simplify, you might have a pool of $100 million worth of subprime mortgages used to issue $70m in AAA bonds and $25m in let's say BBB bonds. The remaining $5m is "overcollateralization." As mortgages default, the overcollateralization begins to disappear. Once that's gone, the BBB bonds get hit. Meantime, principal being repaid by the borrowers who aren't defaulting is used to pay back the AAA bondholders. The math gets really complicated, but suffice it to say that the $30m in cushion provided to the AAA bondholders allows them to withstand very high default rates. The typical 2006 AAA subprime bond was able to withstand a cumulative default rate of 50% or so with recoveries of around 50%. Cumulative default rate just means what percentage of borrowers from the original pool end up not paying. Recoveries means what percentage of the loan is recovered on foreclosure. At this point, it looks like cumulative default rates may be somewhat higher than 50% and recoveries may be somewhat lower than 50%. So, the AAA bondholders are probably going to suffer some principal losses. The question is how much. (By contrast, a lot of the lower rated tranches are certain to be wiped out ... but the Treasury won't be buying these.)
Right now, these formerly AAA bonds have a market price of around 50 cents on the dollar. To justify that price, you'd have to have going forward cumulative default rates of something like 80% to 90% with recoveries of around 30%. The math is complicated, but I believe that's what it works out to. That is a really, really extreme scenario and probably entails very dramatic additional declines in housing prices (say 30% down from here).
I think Bernanke and Paulson's logic is that they can go in and buy these bonds at, say 60 cents on the dollar. The sellers would not have to take any further writedowns. And, the Treasury by holding the bonds to maturity would most likely collect more than 60 cents on the dollar based on some number of mortgagees continuing to make payments (believe it or not, most of them still are) and the proceeds from foreclosures.
This is what doesn't make sense in the Goldman's spokesman's comments. He says ".... the FDIC is selling ... assets..."
Hell, Goldman doesn't need assets - they got plenty. They need liabilities, i.e. deposits. Why on earth would they want to buy their assets? Unless you can't get one without the other? Or maybe they figure to buy the whole kit and caboodle and put the bad stuff to the Treasury in the bailout plan.
This is what doesn't make sense in the Goldman's spokesman's comments. He says ".... the FDIC is selling ... assets..."
Hell, Goldman doesn't need assets - they got plenty. They need liabilities, i.e. deposits. Why on earth would they want to buy their assets? Unless you can't get one without the other? Or maybe they figure to buy the whole kit and caboodle and put the bad stuff to the Treasury in the bailout plan.
This is how they built their asset management business. They didn't want a big splashy name in the 1990s (Putnam, Bernstein), but added odd bits and pieces together (Eagle, Commodity Corp, a British industry team) and built it up over time.
If the credit markets are frozen, farmers can't buy their seed (normally purchased on credit), thus can't plant their crops. Then nothing grows. Then, come autumn, the farmers can't pay the mortgages on their properties, and they get foreclosed on.
Geoff writes:
This was posted over at Talking Points Memo . . .
Geoff-
I don't think 80-90% defaults with 30% recovery is out of the question for some of these vintages. It's probably a decent assumption. While I don't have the full date, I can tell you that I've purchased 15 properties financed by 'subprime' in the last 12 weeks in New England. My average purchase price has been 22% of the price the last buyer paid prior to foreclosure. The amount I am paying has a cap yield of only 10% which is actually not that great. So, I'm not dramatically underpaying either.
For Immediate Release
Office of the Press Secretary
September 11, 2008
Executive Order: Executive Branch Responsibilities with Respect to Orders of Succession
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
[snip]
(a) Each agency for which presidential action is required to establish an order of succession shall draft a proposed order of succession if no such order exists and, not later than 30 days from the date of this order, send such proposed draft order to the Counsel to the President for review and comment.
[snip]
(b) Each agency described in subsection 4(a) of this order shall update and revise its order of succession as necessary. Before implementing any revisions to its order of succession, such agency shall send the proposed revisions to the Counsel to the President for review and comment.
(c) Not later than 30 days from the date of this order, and not later than 7 days from the issuance date of any subsequent final revision to an existing order of succession, each agency described in subsection 4(a) of this order shall provide a copy of its order of succession to the Counsel to the President, the Assistant to the President for Homeland Security and Counterterrorism, and the Director of the Office of Management and Budget.
[snip]
GEORGE W. BUSH
THE WHITE HOUSE,
September 11, 2008.
Step 2)
Section 8 --
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Step 3)
"By the powers invested in me under Article I of the Constitution, I am declaring a State of National Emergency and suspending federal elections for 180 days, reviewable under said powers for successive terms of 180 days, until emergency conditions subside.
The bulk of the assets that the Treasury would buy under the Paulson plan are the highest rated "tranches" of subprime bonds issued between 2005 and 2007.
Haha! That's funny. What page of the plan was that on again?
The first thing Goldman should do is get Indy's contract with Manning. We'll take him onto our balance sheet... and we won't pay firesale prices god damnit!
The blame has been shifted. If Congress doesn't approve the $700 billion dollar bailout, Congress caused the depression. It's not Bernanke's, Bush's, or Paulson's fault anymore. Conundrum solved.
Isn't what GS describes the OPPOSITE of growing a bank organically? Meaning, from the bottom up? They're "growing" their business in single fell swoops by gobbling up what's left over from the FDIC.
ridiculous. bail out the likes of goldman and ms by purchasing their toxic debt, and then let them prey like vultures on any quality assets left over? and the tax payers get no equity upside?? i used to think paulson and bernanke had good intentions, but clearly the whole story isnt being made available to the general public. this thing reeks to high heave
Thieves save the day.
jo6pac
uno?
dos - damn...
first time top tenner.
And so the fire sale profit taking begins
bah
The Treasury is now all Goldmans
Fuck with all the cash they'll be getting why not buy Commerce from TD. Dream big guys!
Sam Zell starts out telling CNBC that free money was the problem.
Then he says the housing market, in a downturn for 18 mos. will turn around next spring. (Only a two year slump.)
Then he finishes by saying the Paulson plan will recapitalize the banks and get things going again.
Uh, Zell, more free money is the answer??
Change,
Hair O' the dog dontcha know.
Sam Zell isn't as smart as people think. Just ask him how that Tribune deal is working out.
This is The Goldman Dream, to have insiders in The Treasury, to not be regulated, and then given the keys to America!
Goldman Sachs is a covert branch of the Treasury.
Yeah, Paulson....
As soon as I heard that GS and MS were changing status so they could take deposits, it was obvious to me that they wouldn't be opening branches, but rather buying them up at fire-sale prices from failing banks. Coincidentally, wasn't that the same day the announced that Wamu might be broken up?
You know, I can't really imagine the mental process of someone who would deposit their money in a bank with "Goldman Sachs" on its sign out front at this point in time.
Question to the finance gurus here: When will we know when/if this "bailout" thing is over? Clearly, if they vote "yes", it's done. But what if the Dems dont? Is this a "it HAS to be done, but how is the question", or is it even a iffy thing that this "HAS" to be done at all?
TIA.
God, if only they could call their bluff and not pass a bill at all.
Vulture Capitalism
Just be careful FDIC and don't sell the jewels at fire sale prices.
"This is The Goldman Dream"
Absolutely! And hank is in his last coupla months so there is a sense of urgency to get things DONE! WHo knows when GS will get another chance like this to loot the US Treasury.
Just nationalize all the darn banks.
This is a farce.
Once Goldman gets the money from Paulson they will be taking everyone down. Just you watch.
JMG, it beats WaMu by a mile and IndyMac too.
No retail presence means you are at best a holding company.
Holding company /= bank, and it shouldn't be treated like one.
Can Goldman Sachs be stopped? Newt Gingrich gave a great interview to NPR yesterday where he warned that GS was now in charge of our fiscal policy. How are we letting this happen?
1904 - The Square Deal
1932 - The New Deal
2008 - The Raw Deal
Paulson Plan is a bailout of the FEDERAL RESERVE which is broke
Geithner and Bernanke lent out all their good treasuries to banks that are failing and are thus stuck with bank trash
People are losing their illusion that the FED was ever in charge of short rates as the TED spread is proving
[I can't really imagine the mental process of someone who would deposit their money in a bank with "Goldman Sachs" on its sign out front at this point in time]
PRESTIGE! You get a $600k/yr teller as a personal banker to manage your $362 checking acct. They can UPSELL some investment services to the unwashed masses.
Love to see how it works out for the crew @ $GS$. Could be a humbling experience...
This bailout better happen.. the alternative is ...War???!
Rock and a hard place.
Gm asked what reg's were there to prohibit problem...
RICO...that was on the book's
The sun will still come up if they vote down Paulson's bill AND Dodd's bill, and nothing is passed.
Farms will keep growing food.
Some banks and hedge funds will blow up and there will be mass unemployment in the FIRE industry.
It will be a big dislocation but not the end of the world.
If the bill is passed, the banks will be able to keep bad stuff on their books at marked-up prices for many years, taxes will go way up. It will be a slower much longer torture.
Here's an even better idea. Force the banks to issue new equity, buy it at market price directly from the banks. Bingo, the banks are recapitalized, the Treasury is not gypped, everything is transparent. (Not my idea, a couple finance professors thought of this.)
Well, it's not for so long that this bill isn't signed.
Stock mkt off, but not a scary amount.
let it go down 50 or 100 points a day only, a manageable amount and we may be home free. And after 10 days and another 1000 points down, yours truly starts getting back in. Well, maybe 1500 points down. don't want to be a knife catcher.
Idiots on Morning TV saying stocks are cheap. Gosh, now they are even cheaper. 9000ish--THEN they are cheap.
Here is my take after hearing some of the BS today.
Congress knows its mostly a power-grab BS.
They are gonna tear up and twist the "Paulson proposal" in so many ways that it won't be recognizable. You could see in Paulson's body language how unhappy he is with a lot of their constructive criticism.
When the bill is done, probably in about 3-4 weeks, Paulson and Bush will then have to decide if they can do more through exec fiat than being under Congress' thumb. Or, they can threaten a veto as a way to get more leverage. That could set up a bigger showdown and lead to nothing getting done.
There's no doubt now that Congress is gonna make huge changes in Paulson's plan. There's too much similarity between the Democrat and Republican critics. Both are pissed at Paulson.
Bernanke's become a big discredited wimp.
Lots of pork roaming the halls of Goldman me thinks.
How delightfully ironic.
How about we see what GS is willing to pay for IndyMac MBSs, then set that as the price the gov't will pay for them as well???
I guess I now have my answer as to why GS was shooting the moon before the close. Forkers.
Lawyerliz - you have more balls than me.
So after all the song and dance, it's all about a GS power grab?
Amazing.
I just left a complaint about suspected fraudulent activity at the Department of Treasury's hotline. Against Henry Paulson. My concerns included defrauding 310 American citizens and their progeny of tax payments for multiple future generations, looting of the national treasury, violation of Constitutional separation of powers by claiming spending authority that resides in the Legislative branch, violation of Constitutional separation of powers by claiming immunity from Judicial review, and a few other things.
U.S. Treasury - OIG Online Hotline Form
White House Dispatches Team to Push Economic Bill
lie disclosed today by the White House about the 'Paulson' plan:
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
+++++++++++++++++++
Was this bailout planned????!?!?!
Interesting--I have more ovaries than you.
Caitlin writes:
I just left a complaint about suspected fraudulent activity at the Department of Treasury's hotline. Against Henry Paulson. My concerns included defrauding 310 American citizens and their progeny of tax payments for multiple future generations, looting of the national treasury, violation of Constitutional separation of powers by claiming spending authority that resides in the Legislative branch, violation of Constitutional separation of powers by claiming immunity from Judicial review, and a few other things.
404 Not Found g...line_form.shtml
Caitlin,,
KNOCK KNOCK...lol
Apparently somebody at Goldman didn't get the memo to lay low and shut up until they get the high sign.
Drudge headline photo
Fail
Drudge Retort: Red Meat for Yellow Dogs
I honestly believe the best course of action is for the gov't to buy all foreclosed houses at foreclosure prices, salvage the materials, and level each one of them. Then, have a two year home building moratorium on any market over 5 months of supply. Supply problem is corrected and we can then get on with things. Homeowners are bailed out as supply decreases, but the banks collateral, except for the land ground and savaged material is gone. Main Street wins. Wall Street loses.
"We plan to build our banking business organically"
In other words--with a lot of BS spread around.
So GS wants IMB. So much for them swooping in as a white knight and snaching up WaMu from the reluctant embrace of Sheila this Friday. OTS suggesting the end of the rope is not far off...
GS, the modern day Bonnie and Clyde
I think Bernanke has blown and actually did it because he thought it was actually contained. Or he is a big liar hiding behind his beard.
Paulson was head of GS til 2006. Can you say, conflict of interest?
Can I haz a reach-around 2?
As BB pointed out so famously there is never a need to bail out the Fed. It can always print.
But printing causes inflation. Inflation causes pain, domestically and internationally. It also causes benefit to some people who owe a large mortgage which now has a larger real value. It can inflate the housing market and solve that problem which everyone agrees is critical.
The "bail out the Fed" solution is another version of injecting money into the banks but sterilizing by taking it from the pockets of consumers. That's better for the banks and better for the foreigners.
But it will cause a major Depression for the consumers.
I vote for a REAL helicopter drop, Ben, dropping it onto everybody. Don't steal any more from the poor to give to the rich!
Should read " blown his wad" in my last post
"Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials."
Yes, and McCain really did vet Palin prior to announcing her as his VP.
Paulson Debt Plan May Benefit Mostly Goldman, Morgan
Paulson Debt Plan May Benefit Mostly Goldman, Morgan (Update2) - Bloomberg.com
``Its benefits, in its current form, will be largely limited to investment banks and other banks that have aggressively written down the value of their holdings and have already recognized the attendant capital impairment,'' Jeffrey Rosenberg, Bank of America's head of credit strategy research, wrote in a report dated yesterday, without identifying particular banks.
Maybe this is why Hank let Lehmann fail, so his alma mater could be the boss of all bosses. (Lehmann got Moe Green'd).
Ted Spread indicating bailout plan isn't enough.
For example, the FDIC is selling IndyMac assets and those might be the sort of thing wed be interested in looking at as soon as our buddy Hank comes up with $100 billion for us."
Elvis,
I like your idea. Plus it can solve two problems: too many houses, not enough fuel. So let's turn the houses into fuel.
(NB: I may have plaigarized that from someone, but it is the most sincere form of flattery).
If Goldman buys a bank using bailout money from the goverment, is it really "buying a bank?" Isn't more like a gift?
This was posted over at Talking Points Memo - which has now largely switched over to issues regarding the bailout.
Please, tawk amongst yourselves :
TPM Reader JL's note too ...
I just saw your post "More on the tell ...". Let me try to explain Bernanke's thinking. I'm a little puzzled by the exact language the Marketwatch article attributed to the Fed chief, but I'm pretty sure I understand his logic. (FYI, I spent over a decade with a company that services the securitization industry, so I have some background here.)
The bulk of the assets that the Treasury would buy under the Paulson plan are the highest rated "tranches" of subprime bonds issued between 2005 and 2007. These bonds sit above other, lower rated bonds in the capital structure of the relevant securities. To simplify, you might have a pool of $100 million worth of subprime mortgages used to issue $70m in AAA bonds and $25m in let's say BBB bonds. The remaining $5m is "overcollateralization." As mortgages default, the overcollateralization begins to disappear. Once that's gone, the BBB bonds get hit. Meantime, principal being repaid by the borrowers who aren't defaulting is used to pay back the AAA bondholders. The math gets really complicated, but suffice it to say that the $30m in cushion provided to the AAA bondholders allows them to withstand very high default rates. The typical 2006 AAA subprime bond was able to withstand a cumulative default rate of 50% or so with recoveries of around 50%. Cumulative default rate just means what percentage of borrowers from the original pool end up not paying. Recoveries means what percentage of the loan is recovered on foreclosure. At this point, it looks like cumulative default rates may be somewhat higher than 50% and recoveries may be somewhat lower than 50%. So, the AAA bondholders are probably going to suffer some principal losses. The question is how much. (By contrast, a lot of the lower rated tranches are certain to be wiped out ... but the Treasury won't be buying these.)
Right now, these formerly AAA bonds have a market price of around 50 cents on the dollar. To justify that price, you'd have to have going forward cumulative default rates of something like 80% to 90% with recoveries of around 30%. The math is complicated, but I believe that's what it works out to. That is a really, really extreme scenario and probably entails very dramatic additional declines in housing prices (say 30% down from here).
I think Bernanke and Paulson's logic is that they can go in and buy these bonds at, say 60 cents on the dollar. The sellers would not have to take any further writedowns. And, the Treasury by holding the bonds to maturity would most likely collect more than 60 cents on the dollar based on some number of mortgagees continuing to make payments (believe it or not, most of them still are) and the proceeds from foreclosures.
This is what doesn't make sense in the Goldman's spokesman's comments. He says ".... the FDIC is selling ... assets..."
Hell, Goldman doesn't need assets - they got plenty. They need liabilities, i.e. deposits. Why on earth would they want to buy their assets? Unless you can't get one without the other? Or maybe they figure to buy the whole kit and caboodle and put the bad stuff to the Treasury in the bailout plan.
I guess I just answered my own question.
This is what doesn't make sense in the Goldman's spokesman's comments. He says ".... the FDIC is selling ... assets..."
Hell, Goldman doesn't need assets - they got plenty. They need liabilities, i.e. deposits. Why on earth would they want to buy their assets? Unless you can't get one without the other? Or maybe they figure to buy the whole kit and caboodle and put the bad stuff to the Treasury in the bailout plan.
I guess I just answered my own question.
Elvis writes:
Goldman Sachs is a covert branch of the Treasury.
The Treasury is a covert branch of Goldman Sachs.
You had that backwards. Fixed it for you.
This is how they built their asset management business. They didn't want a big splashy name in the 1990s (Putnam, Bernstein), but added odd bits and pieces together (Eagle, Commodity Corp, a British industry team) and built it up over time.
ew thread.
When it is all over...
DOW 6000
GOLD 3000
@Can't say -
If the credit markets are frozen, farmers can't buy their seed (normally purchased on credit), thus can't plant their crops. Then nothing grows. Then, come autumn, the farmers can't pay the mortgages on their properties, and they get foreclosed on.
Could lead to food shortages.
Elvis writes:
Goldman Sachs is a covert branch of the Treasury
Nope the Treasury is a covert branch of Goldman Sachs.
Comrade Baron Von Helmut III writes:
So after all the song and dance, it's all about a GS power grab?
Yep, Comrade. That's what it looks like.
A couple of weeks ago I commented that in the end there would be one bank.
One bank.
One food corporation.
One energy corp.
And so on.
This is how it's done.
Any company that's "too big to fail" should be dismantled and broken up.
Competition is what drives the best interests for the average consumer (despite the evidence of the Walmart model.)
Comrade Bagholders,
All I can see in my head at that announcement is Homer Simpson:
Indy Mac's good assets...Ahhlllll
while drool runs down his chin.
Nostrovia,
Geoff writes:
This was posted over at Talking Points Memo . . .
Geoff-
I don't think 80-90% defaults with 30% recovery is out of the question for some of these vintages. It's probably a decent assumption. While I don't have the full date, I can tell you that I've purchased 15 properties financed by 'subprime' in the last 12 weeks in New England. My average purchase price has been 22% of the price the last buyer paid prior to foreclosure. The amount I am paying has a cap yield of only 10% which is actually not that great. So, I'm not dramatically underpaying either.
Is that the Friends and Family plan?
Step 1)
For Immediate Release
Office of the Press Secretary
September 11, 2008
Executive Order: Executive Branch Responsibilities with Respect to Orders of Succession
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
[snip]
(a) Each agency for which presidential action is required to establish an order of succession shall draft a proposed order of succession if no such order exists and, not later than 30 days from the date of this order, send such proposed draft order to the Counsel to the President for review and comment.
[snip]
(b) Each agency described in subsection 4(a) of this order shall update and revise its order of succession as necessary. Before implementing any revisions to its order of succession, such agency shall send the proposed revisions to the Counsel to the President for review and comment.
(c) Not later than 30 days from the date of this order, and not later than 7 days from the issuance date of any subsequent final revision to an existing order of succession, each agency described in subsection 4(a) of this order shall provide a copy of its order of succession to the Counsel to the President, the Assistant to the President for Homeland Security and Counterterrorism, and the Director of the Office of Management and Budget.
[snip]
GEORGE W. BUSH
THE WHITE HOUSE,
September 11, 2008.
Step 2)
Section 8 --
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Step 3)
"By the powers invested in me under Article I of the Constitution, I am declaring a State of National Emergency and suspending federal elections for 180 days, reviewable under said powers for successive terms of 180 days, until emergency conditions subside.
George W. Bush
Nov. 1, 2008
The White House
The bulk of the assets that the Treasury would buy under the Paulson plan are the highest rated "tranches" of subprime bonds issued between 2005 and 2007.
Haha! That's funny. What page of the plan was that on again?
The first thing Goldman should do is get Indy's contract with Manning. We'll take him onto our balance sheet... and we won't pay firesale prices god damnit!
Yeh, comrade strangemoney - I was kind of wondering where some of these numbers came from, other than the usual place -PFB.
The blame has been shifted. If Congress doesn't approve the $700 billion dollar bailout, Congress caused the depression. It's not Bernanke's, Bush's, or Paulson's fault anymore. Conundrum solved.
@Geoff: it sounds like Hank and Ben want to buy the SuperSenior stuff.
If Hank had worked at another former investment bank he would know that SuperSenior was its demise.
Why would only the AAA tranches be bought? Can't they buy anything?
If the AAA tranches are so juicy, why would the banks want to sell them.
Well there's one institution that has a good supply of them and who knows, maybe they have never been remarked?
SuperSenior is AAA rated subprime.
Isn't what GS describes the OPPOSITE of growing a bank organically? Meaning, from the bottom up? They're "growing" their business in single fell swoops by gobbling up what's left over from the FDIC.
ridiculous. bail out the likes of goldman and ms by purchasing their toxic debt, and then let them prey like vultures on any quality assets left over? and the tax payers get no equity upside?? i used to think paulson and bernanke had good intentions, but clearly the whole story isnt being made available to the general public. this thing reeks to high heave
Buffett buying Goldman stake of $5 billion!!! WTF!
Goldman want access to FDIC insured accounts at throwaway prices. Hanky Panky Paulson will be a willing accomplice.