Seriously, the extent of the crisis can be measured by the length of time we go back to unwind the banking laws we've adopted over the last 105 years. Concentrating the ownership in the hands of a few is a profoundly ill advised practice.
CR, you asked about the bump in traffic earlier today. I didn't see if this was mentioned in that thread, but FYI Josh Marshall of Talking Points Memo linked to one of your articles today. First time I've seen him do that. But I'm sure mostly it has to do with all the great coverage here!
This reminds me when I was a kid and my big brother used to make up the rules when we played Monopoly and I always believed him. For some reason he always won.
bearly repost from last thread, I am ready to triple down . . . this issue will not damage Obama, it is a threat to downticket congressional Dems IF they fall for it.
I worked on massive litigation involving a sister statute and the BHCA. Huge French fraud where Credit Lyonnais acquired the failed Executive Life Insurance Co. by acquiring more than the prescribed limits through a third-party (but maintaining control through undisclosed side agreements) and lying about it to the Fed. I have a felling I'm going to see a little deja vu all over again with all this mess, only it will all be "legal."
CR said, "negotiators neared agreement on allowing the government to take equity stakes in companies that participate in the rescue...."
What happens to share prices of participating firms? Look at AIG, FNM, FRE. How much equity will participating firms have to give? 25 pct? 50 pct? What percentage of financial firms make up the stock market?
This is a joke...the PE guys are just trying to take advatange of the situation, this is like the IB's get the SEC to change the rules in 2004, that worked out real well didn't it?
The latest 2 generations have NO IDEA what is going to hit them.
And there is no way to avoid this fate. NO WAY.
Interesting Times
Don't sell this crowd short. My mom was born The Day The Banks Closed. And yes, it is still capitalized three quarters of a Century later. Not having experienced events is not the same as being unprepared or unaware.
Has anyone else done some back of envelope math the last few days on the $700 Billion? It's not enough. Not even close based on what's come to light so far.
you gave me a quote back per my challenge showing that some repubs were too
right on
good dems and good repubs together
your quote
"Thirty-one House Republicans sent a letter to Paulson and Federal Reserve Chairman Ben Bernanke, asking them to stop using federal funds to save private firms.
http:// seattletimes.nwsource.com...rvatives20.html
CAPTCHA | 09.22.08 - 8:01 pm | #
Mr Dawg... OT... are you on the mend these days? My mom had an early quadruple bypass 10 years ago... took her awhile before she could exercise, etc., but is okay now. Meds are pretty darn good these days.
"since gerald ford, bill clinton is the only president who ever (EVER) submitted a balanced budget to congress...period.
mock turtle | 09.22.08 - 8:03 pm | #
now brian answers
There were only 3 in between, one (D) and two (R). Have you swallowed any other strawmen lately that you'd like exorcised?
Seriously, blaming this on either party is childish and non-productive.
mock responds
hey brian, give me a link or a citation...
YOU ARE BLOWING SMOKE BUDDIE AND I CHALLENGE YOU
i stand by my assertion only clinton brought the budget into ballance
also
dont give me the childish argument the republicns use when they are introuble (oh momy they started it.. or they both did it too...)
thats weak
simple fact everybody knows
repubs mostly say "hey we dont need no stinking government regulation... free market can handle it all...
(until now when they come crying to momy...
oh please federal government help us please we are so scared...)
and dems are usually the party that says hey we need stop signs and yellow stipes on the road and speed limits
hey. get real, dont try to give me the hey repoubs and dems are all the same crap cause it aint true an everybody knows it.
there are differences...thats why repubs hate dems and vice versa
now it is true money has corrupted both sides of the aisle.
i resp-ect ron paul and i respect dennis kucinich..neeither man can be bought , one a conservative one a liberal.
The funny thing about the S&L fiasco and the upcoming private equity fiasco is that a prudent manager would never loan himself money. Period.
In every town across the land, the tendency has always been for the local developers to get together and start up a bank, throw in some commissioners on the board and... voila! A disaster is on it's way. And this is a natural occurrence, simply because the developers want to keep developing and the commissioners want a piece of the action they vote on (but in a legal manner).
If the boards of the banks would stay out of the administration of the city/county and the developers would move on, these types of incestuous relationships would die and the banks would ultimately make better decisions, but, this tendency to greedy destruction is just as prevalent on Main Street as it is on Wall Street, there's just a lot less zeros involved (pun not intended but applicable).
FWIW, I wrote a post urging my readers to contact our local reps. When I called, the staffer I talked to seemed taken aback when I suggested his boss "stick to his Republican ideals and not spend taxpayer money on a bailout of private companies." I chatted a bit with him afterword, and he said this was the #1 issue they were getting calls about, with the vast majority against. He also said the Rep won't take a position on the bill until it's drafted.
Word is getting out, and dissent is spreading. The longer the Dems can delay, the stronger the backlash will become. If you're against this thing, by all means call your rep. It will have an effect.
RhodesianGreenbackinAZ writes:
Mr Dawg... OT... are you on the mend these days? My mom had an early quadruple bypass 10 years ago... took her awhile before she could exercise, etc., but is okay now. Meds are pretty darn good these days.
Thanks for asking. Yes, emergency quarduple bypass is easier these days. Got out of the hospital 4 months ago today. More like getting hit by a truck rather than a train. I am feeling better than I did before going in for the "one hour test" that sent me to CCU stat. I got all the bells and whistles. It took 3 feet of leg vein, a foot of forearm artery, and a mammary artery redirect to unclog me. No heavy lifting and I've lost upper body strength but otherwise fine. Nice of you to remember.
CR: "There is the same concern here with the new Fed guidelines - that private equity firms will lend to their other businesses excessively."
CR, isn't a continuation of excessive lending and consumption one of the goals of all the bailouts? I am not sure that the arms of government have decided the problem is excessive consumption compared to production. Instead they've focused on the root cause being the drop in house prices back down to more historically normal levels.
The fed has announced that the stock of Goldman Sacks and other choice firms will be convertible to a curious instrument known as a hoopajoop, which follows rules according to an 800 page manual, portions of which have been released, the bulk of which is yet to be written "some time after november." The fed guarantees that this hoopajoop conversion will solve the liquidity/solvency crisis.
Market reaction was mixed because nobody understands what a hoopajoop is, what the implications of a hoopajoop conversion are, and because the few parts of the 800 page manual which were released today involve novel securitization vehicles which are impossible to use for prediction purposes. Market forces are reeling, too absorbed in contemplating this "brave new world" of hoopajoop investment instruments to act. Paulson announced that this was just one of a series of planned maneuvers to confuse the market with bells, whistles, and startling regulatory surprises, just long enough to pass the novemer elections.
CR, isn't a continuation of excessive lending and consumption one of the goals of all the bailouts? I am not sure that the arms of government have decided the problem is excessive consumption compared to production. Instead they've focused on the root cause being the drop in house prices back down to more historically normal levels
How would the bailout stop the decline in housing prices?
"How would the bailout stop the decline in housing prices?
Comrade Midwest Product | Homepage | 09.22.08 - 11:29 pm | #"
CMP, price is a function of supply and demand. Increasing the supply of money for homeowners (through loan mods, lax lending standards on new loans etc) is the main thrust of the bailout. Whatever price results will be higher than the price without intervention. Nothing fancy. Just basic economics.
Please excuse Comrades if this has been posted already. Comrade Mish has posted excellent thread on his site. It has all emails to those Cossack Senators with a letter to send them opposing this Bolshevik bailout plan which will make the Ruble look like a real currency compared to the dollar should it pass.
Please fellow Comrades, take the time to read and email these pigmen.
After seven years of criticizing the U.N. for its huge, costly bureaucracy and indecisiveness in the face of grave problems, Bush will make his final address to the General Assembly on Tuesday. His speech, scheduled to last 15 minutes, was to stress the need for multinational diplomacy .
The nation's burgeoning financial crisis, anchored on Wall Street not far from Bush's hotel, overshadowed his U.N. visit. Bush is in the awkward position of advocating capitalism, free-trade and deregulation throughout this presidency but then overseeing a costly government takeover of failing financial institutions.
White House press secretary Dana Perino, explaining Bush's turnabout, said this was not the president's first instinct; that he would not have wanted to take this action to help these companies if he wasn't convinced by the considered judgment of his senior economic team that it was critical in order to protect the American taxpayers and the American economy as a whole.
Sept. 22 (Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp
Thinking it might be of some interest to commenters here, I did a back-of-the-envelope analysis of possible impact of the Dodd and Paulson plans under different loss fraction scenarios. I'm very curious what comments people around here have, and particularly on possible glaring errors in the dilution part, and the 125% rule, which I was not 100% sure about from reading the legislation.
The idea goes like this. The assets we are talking about are presumably the Level 3 assets of the large financials. So I took the level of Level 3 assets of those companies from (Blogger: Page not found. (I excepted Fannie, Freddie, and AIG since they are accounted for separately.) Curiously, the amount of Level 3 assets held by the top 20 companies sums to $755 billion, and as can be seen, holdings below that start to be chump change. Interesting how closely that number coincides with the Paulson price tag...
I assumed Treasury bought up all of it at their current marks. In both plans, if the securities sell above the price Treasury paid, that's simply a profit to the taxpayer.
Suppose there is a loss on the securities, and for simplicity in the calculation suppose it's the same on all securities. Under different loss fractions, the total loss to the taxpayer will differ in the two plans. In the Paulson plan, whatever the loss is on the sale, is the loss to the taxpayer. The Dodd plan, however, has an equity-stake backstop. As I understand it, the backstop is for 125% of the difference between paid price and sale price (i.e. 125% of the loss.) This equity stake dilutes the preexisting equity, so I assumed the government would immediately dump the equity into the market, thereby receiving Stake * (Market Cap / (Market Cap + Stake)). So this quantity was calculated firm-by-firm, using the Level 3 assets of the firm as of August and their current market cap.
The Dodd plan seems to have the feature that the taxpayer sees no losses until the securities lose 13%. Note, of course, that the calculation uses the same loss rate for all securities of all firms.
CMP, price is a function of supply and demand. Increasing the supply of money for homeowners (through loan mods, lax lending standards on new loans etc) is the main thrust of the bailout. Whatever price results will be higher than the price without intervention. Nothing fancy. Just basic economics.
But there are still new homes being built, on top of foreclosed homes being put up for resale, so supply is still increasing.
Meantime, even if bailing out the worst offenders (e.g., WaMu) technically allows them to make some fresh loans, there's no way lending standards aren't going to tighten. Even companies like WM and WB can't get away with giving a $400,000 McMansion to someone with zero income anymore.
If this plan has any effect at all on housing prices, isn't it going to mean the difference between a 15% decline with no bailout and a 14.5% decline with it?
Britain's financial industry risks a popular backlash over outsized bonuses and reckless lending packages in the wake of this month's financial turmoil, a Treasury minister told bankers.
``People are angry right now, people are worried at what they see as excess affecting the real world,'' said Yvette Cooper, who as chief secretary to the Treasury is the Cabinet member responsible for overseeing the financial sector.
The comments reflect popular discontent about the banking industry on both sides of the Atlantic following government bailouts of Northern Rock Plc, Fannie Mae and Freddie Mac and U.S. insurer American International Group Inc. Concern about the public support for private companies is combined with resentment over pay for bankers, fund managers and others in the industry.
I was SysAdmin for 13 Members of the US House for 2 years. Then briefly worked in the White House.
The biggest lesson I learned is that Party affiliation is irrelevant. They are ALL pimps, or the don't get re-elected. Period. The country is divided 50-50, so nothing ever gets done (by design, by the way, just never meant to be so expensive). Anyway, 85% of ALL conversations that these Members and their staffs have behind closed doors are only aimed at keeping you partisan hacks rabid. So you: A) continue to enable them with contributions, and B) blind you with so much hate that you automatically dismiss anything the other side says.
Keeps them living the high-life. I've witnessed these strategy sessions. Names you would recognize. BOTH sides of the aisle.
For every (R) conspiracy you throw, someone can match it with a (D) factoid. Point is, they are ALL in on the same game if they've been re-elected before.
Can you guess which Party I worked for and/or supported? Careful what you guess. This is ALL OF OUR faults. Name-calling hasn't helped so far, why will it now?
ising vacancy rates and falling rents in New York City office buildings caused by the collapse of Lehman Brothers Holdings Inc. and the sale of Merrill Lynch & Co. may damage the value of bonds backed by commercial real estate, Merrill analysts said.
Lehman, Merrill and Bank of America Corp. -- the Charlotte, North Carolina-based bank that's buying Merrill -- have about 40,000 workers in New York, and occupy a combined 8.3 million square feet, according to a report from Merrill analysts led by Roger Lehman. As employees lose their jobs, the banks will need less office space and rents will fall as vacancies rise.
The government could make 10 or 20 times what it pays on this, possibly, Coleman said during a campaign stop at Christys Cafe in North Mankato Saturday morning.
Does Mr. Coleman think Minnesotans are that stupid? Evidently, yes.
Lots of good information and ideas get traded here by people who don't try to piss on each other, and that makes it easier for folks to ask questions, double check things, learn, and concede when facts show our earlier ideas were wrong.
This is part of the national infrastructure we need to rebuild.
Here' response that basically says to go pound sand up my ass.
"Thank you for contacting Senator Tim Johnsons office.
Due to the high volume of email traffic our office receives, we no longer accept incoming email. Instead, we ask that South Dakotans use our offices web form to communicate their thoughts and concerns to Tim. Please click on the link below, or enter the following address into your web browser:
We apologize for any inconvenience this may cause South Dakotans, but hope that it will help us serve you better in the long run.
Why are we doing this?
Our office receives an extraordinary amount of email from people who do not live in South Dakota, have no ties to our state, and are simply "spamming" every U.S. Senator, often as part of an organized campaign to disrupt Senate services. Tims top priority is communicating with South Dakotans, but out-of-state email campaigns, efforts to "overload" the Senate email system, viruses, and other problems have made it more difficult to receive and respond to messages from South Dakotans. We hope that use of a web form will serve as a "filter," helping us focus our efforts on the service we provide South Dakotans.
What about South Dakotans serving in the military?
South Dakotans who are stationed abroad with the military, a foreign service, religious organization or charity undoubtedly will have a South Dakota address that is "home." Please enter your South Dakota address into the web form, and be sure to include your mailing address (such as an APO, FPO, address on a military base in another state, etc.) in the comments section of the web form. We will be happy to direct a response to your actual mailing address, but first we need to know that you are a "real" South Dakotan with a real South Dakota address, even if you no longer live here."
Here's the best one so far. Kinda like, if you don't vote me me, go F yourself.
"Thank you for sending an e-mail message to my office. Your views are
very important to me and I appreciate your taking the time to share your
comments and concerns. If you are a New Hampshire constituent and have
included your mailing address in your e-mail, you will receive a written
reply from me. If you have not included your address and would like a
written reply, please resend your original e-mail and add your address.
Again, thank you for taking the time to share your thoughts with me.
"This is part of the national infrastructure we need to rebuild."
Bingo. Is it that hard to see that the biggest source of the pigmen's power is the partisan division infecting the country?
Kunstler makes a good point that this thing feels how it might have felt leading up to the civil war - surreal realization of the problems inherent in slavery. A post here the other day along the same lines that (paraphrasing) one's Jewish relative said life was great in Vienna until they hauled their father away.
"bearly repost from last thread, I am ready to triple down "
$50 is fine and I'm certain CR will gladly accept it from you, courtesy of, bearly.
I already have a $400 bet with another diehard DEM I like to joke around with. Get this! He called me the day after Palin got the nod and invited me to a side bet of another $100 that Palin would be out before Nov. You guys crack me up.
Waiting for the "rigged voting machines" & "intimidation" conspiracy theories...
Thanks for that insight. I am just a dumb non-political outsider, but over the years I've come to the conclusion that politicians behave as you say. Is it also true that they like long-drawn-out and finely balanced legislative battles, not so much because the issues are complicated and the solutions even-handed, but because that extracts the most money from competing lobbyists?
And Clinton is the only President since Ford to deliver a balanced budget.
Carter got socked with the debt from Vietnam and the effects of stagflation and the 73 oil embargo, but Reagan and W both deliberately sent the deficit soaring (then complained about spending and blamed the Dems).
I went beack and read all the posts. the Turtle may be Mock, but the Turtle was right.
I used Mish's global congress critter e-mail message and a lot of the e-mail came back with "since you are not a constituent, your e-mail has been rejected" message. I think a sleeping America has be aroused, however it's too little too late.
I'm curious what the other side would be saying now, if it had been Al Gore & The Democrats 100% in charge of the Government for 6 of the past 7 1/2 years?
I'm sure there would be absolutely no justification for blame in their minds.
c&c - thank you for that infuriating Bloomberg link. So it's looking like Russ Winter was onto something in his commentary today re:the TARP as Tar Pit for smaller banks to get hoovered up by the Friends of Hank. Surprise, surprise.
Carter only won because of Watergate. Clinton only won because of Perot. No Democrat can win the White House since Johnson signed the Civil Rights legislation.
You know, if we don't stop labeling each other with a D or an R, these asshats that are ruining the country on BOTH sides will win. That's what they want.
DIvide and conquer. It's the government that is the enemy. Not us.
"If this plan has any effect at all on housing prices, isn't it going to mean the difference between a 15% decline with no bailout and a 14.5% decline with it?
Comrade Midwest Product | Homepage | 09.22.08 - 11:47 pm | #"
CMP, I don't know. But my guess is that this is a serious effort to increase the upward bias in house prices. Consider deductibility of mortgage interest. How much higher are home prices because of this? I don't know, but I am guessing it is a significant amount. Govt action on a massive scale can make a difference to prices.
"Is it also true that they like long-drawn-out and finely balanced legislative battles, "
Like Social Security? Or perhaps energy?
Or my favs: Abortion, flag-burning, save the (insert cause here), etc, etc...
Look at the campaign contributions. Ted Stevens is indicted for bribery because of house additions? How much did Dodd and Frank legally receive from the banks they regulate? Hello, this thing on?
To win a seat in the House of Reps in a podunk district nobody cares about will run $10 million, easily. To make the math easier, lets lower that to $ 7 million. To win a 2-year term. Rougly 700 days... To win re-election, you need to raise $10,000 PER DAY from the moment you are sworn in... For a job that pays $180k/yr (?). In 2000, John Corzine left (wait for it) Goldman Sachs, spent almost $80 MILLION of his own money to become Senator of New Jersey. Go figure.
You can just look to the McCain campaign. They blame the crisis on Obama and the Dems because . . . they've been in control the past 8 years?
For CR readers the McCain camps use of Fannie and Freddie as whipping boy and girl is especially amusing, and obviously total bull. new readers can pull Tanta's great post on F & F's relatively small role in this mega fiasco. F & F had problems, some bad problems a few years back, but their role in inflating the bubble and spewing toxic securities was minimal...
Or, put it this way: Neither the Paulson plan nor the Dodd plan will be buying any F & F MBS because they are trading on the market at good values. the bailout plan is to buy toxic sludge produced by Countrywide and their ilk, not F & F.
I was SysAdmin for 13 Members of the US House for 2 years. Then briefly worked in the White House.
look brian
i can not come close to equaling the high level policy experience that you had.
i worked with gang mambers as a juvenile correction counselor.
now i garden, climb mountains in the cascades, and work my investments.
all i want you to recognize is that president bill clinton was the only president in more than a quarter century to submit and get passed a budget that was in surplus!!
he paid down the national debt!!
now this isnt rocket science
you and i should be able to agree upon the truth or falsehood of my claim without a lotta fandango,
Even with the admittance that both sides have screwed up, it does not excuse the fact, that one party has brought us to this point. If they had enablers along the way, that's probably true.
But there is one party who has overseen the last 7.5 years, and they had an agenda, which completely disregarded the best interests of the citizens, and the troops as well.
I don't agree with all Democrats, but as a whole, there are many more genuine, honest & caring Democrats, than there are repubs. I have Zero doubt of that. At heart, more Democrats care about "Democracy," while the other party is concerned with the Corporations & Upper 5%.
While there may be some who hope that support under housing prices will stabilize the financial system most understand the bell cannot be unrung. That's the real problem, we should be running to get a mop not cutting our hands trying to put the broken pieces together.
Sending 1000s of form letter emails to the entire senate is probably not that effective. Give your reps a call. It takes 1 minute, and they note your position. Be sure to emphasize the fact that you live in their jurisdiction, and you vote in every election. But use your own words, and don't spam these guys.
Yes he did pay down the nat'l debt. The tech bubble helped him just a bit. Conveniently exploded when Bush took over, then 9/11...
Look my point is that we can go back and forth and back and forth and back and forth and get nowhere. That is the design. And it's all of our fault until we elect people who start speaking truth to power. It won't change with the current crop, can't change with the current crop, IMO because they've all come up under these perverted rules.
Ian writes:
Nice, Paulson is lubing the taxpayer up for a good old fashion ass raping and we're having a partisan mud slinging contest.
Ian | 09.23.08 - 12:17 am
This is a blog, none of us actually have much say in this, beyond being able to voice our opinion via phone or fax, which many already have.
Thanks, Brian. I really appreciate your sharing your insider knowledge.
But you do know that most people blindly follow partisan political views, don't you? This blog has more smart people than most, but you can see how many commenters here consistently take one side of the political divide instead of independently looking through each fact. Sheep. But that's OK, more for us to shear, as long as we don't get stampeded.
"But there is one party who has overseen the last 7.5 years, and they had an agenda, which completely disregarded the best interests of the citizens, and the troops as well."
Then don't the Dems deserve MUCH blame for abreggating their Constitutional role to King Bush. Didn't the Dems control Congress at some point in the last 7.5 years?
Sorry for biting at the troll bait. I only spoke up in the first place because this isn't the place for partisan venom.
Brian writes:
You need a link to prove there were only 3 presidents between Ford and Clinton?
Wow, that is quite the comeback. You get asked a question and you respond with nonsense.
Here is a link for Budget data from 1940 to present.
Maybe you should go back to the children's table, the adults are trying to have a discussion.
Maybe you should look in the mirror.
PS: I used the Google to get this information. It's possible that you were talking about something else, but since your answer was so asinine, it's impossible to know.
There is no cure or fix, just palliatives and protections from free fall.
I think something like the Dodd bailout is needed because we're not going to get a simpler nationalization, Swedish style. And I think mega infrastructure spending is needed to prevent a great depression. The best we can hope for is a long recession/stagnation while house prices continue to fall for few more years (maybe 3-7 years at slower pace).
If that happens with unemployment staying under 10% and we clean the financial system and build a new infrastructure, then I'll think we'll have done a good job with the wound we've inflicted on ourselves as a nation.
I only worry that I haven't lowered my horizons enough.
there are many more genuine, honest & caring Democrats
Like Dennis Kucinich, who cared so deeply, genuinely and honestly for his constituents as Mayor of Cleveland that he bankrupted the city. Now that's what I call compassion.
Hi, mp. Did you just wake up? Your calls on the recent events have been very accurate, and very entertaining. I am curious, and pardon my forwardness here, but have you increased your net worth in the last 12 months by more than 10 times your annual spending? (In other words, have you been playing with serious money?)
mt - "all i want you to recognize is that president bill clinton was the only president in more than a quarter century to submit and get passed a budget that was in surplus!!"
You actually attribute that pure coincidence to CLintons's presence in the white house. seriously ?
Do you remember the dotcom bubble where the NAS shot up 500% and $trillions materialized magically from nowhere. think of all the tax revenues that flowed to the treasury from stamps.com, yahoo, cisco, jdsu, msft... Did Bill corral that bubble and slow the coming trainwreck that cost most J6Ps their entire life savings, from which almost none have recovered only to be steamrolled again over their past 8yrs of gains?
On another thread I asked Conjure to go to DC to bite Paulson hard where it hurts. His choice as to where that might be. Has the thought crossed Conjure's mind?
El Cliffo writes:
there are many more genuine, honest & caring Democrats
Like Dennis Kucinich, who cared so deeply, genuinely and honestly for his constituents as Mayor of Cleveland that he bankrupted the city. Now that's what I call compassion.
~~~~
Cleveland went bankrupt because the banksters cut off their credit for not privatizung their water system ...
Yo Brian there is a website called DailyKos. Please go there to discuss your political BS. That's where I go when I want to talk about that crap. I come to this blog to learn and read the comments because the signal to noise ratio is very low, and you are just adding static to the system.
Nice, Paulson is lubing the taxpayer up for a good old fashion ass raping and we're having a partisan mud slinging contest.
Ian | 09.23.08 - 12:17 am |
Now, with this, now that you're down, I'd get ready for one of those Class-A, New York-style pigfucks. You know what's coming. Now you're going to have to ask yourself, "who do you trust?" I don't know.
politicians are crooks. every last thieving, soulless, backbiting one of them. except maybe Jerry Springer. who cares what party they are in? certainly not I
Anybody remember the"Throw the Bastards Out" movement that Ross Perot took over for his run. It advocated voting them out until you got someone you could halfway live with. It was geting pretty big and fell apart after Perot.One could believe that it was torn apart on purpose if you lean that way.......I do!
Remember David Lereah? Check out the photo of Lereah and McCain smiling together from the NY Times article on McCain's campaign manager Rick Davis's work as chief lobbyist for F & F.
I certainly accept that a blog can have a primary emphasis, but to ignore that the finance/economics that is the focus here is completely connected to political events, laws, who's in charge of what in DC, and how DC responds to lobbying by corps and outrage by the voters is just sticking half of your head in the sand.
They used to call it political economy, for good reason.
It should be no surprise that politicians of all stripes will be found to have deeply incestuous relationships with the most unsavory characters responsible for this debacle.
The largest asset bubble in the history of mankind had to fund the elected puppet-lottery.
So when the shit hits the fan, and the republicans are caught red handed, they always say,"now is not the time to place blame. we're all in this together." They don't want to be held accountable.
The past 14 years of republicans has been the most partisan in history. They tried to bring down a president, stole and election, fell asleep at the switch when 9/11 occurred despite repeated warnings, lied the country into a war, gave tax breaks to the wealthiest, ran up the largest deficit in history, and have now destroyed the financial system.
And now Brian and bearly think because the democrats have held the house and senate with slim majorities the past 20 months, this is the democrats fault.
I will say, if the democrats gain the white house and hold majorities, that they in no way try to work with this group of sordid republicans. They are the worst. Dennny Hastert and Bill Frist, Tom Delay, Newt Gingrich...those assholes deserve to rot in hell. The moderate republicans need to take their party back from the extremists who want the US to become a theocracy.
"He's the poster child for the next millenium... its buy futures, sell futures when there is no future! ... Its a little late in the game to buy out now!"
Brian is right republicans suck, So do Democrats. You knuckleheads are going to go round and round which is worse? The republicans suck more right now and I am one (nominally). The Democrats are right behind, and will catch and surpass at some point in the future.
"GGP is teetering on the edge peering at the deep abyss." yeah, they caught my eye today. they burnt a very small yet remarkably distinctive hole in my IRA today. I wish VNQ had more options volume.
in regards to the above political tripe, let me reiterate that 45% of the nation, as documented in recent pew surveys, believe that humanity is less than 10,000 years old.
obviously, this group tends to have one political orientation more than another. there's not much more to it than that.
"most of the tripe coming out of this paper lately is unreadable"
funny how much murdoch lusts after the gray lady - but methinks when he sees her, he sees her when she was young and hot, as opposed to the current very different reality.
Didnt make it to the end of Sorkin's NYTimes article. Just like the rest, he is a completey moronic suckup.
In truth, Im not sure I agree with Mr. Rosners assessment of Mr. Paulsons job performance. I think he is one of the most competent Treasury secretaries weve ever had, and it is hard to imagine anyone else handling this crisis any better. His predecessors, who lacked his grounding in the world of high finance, would most likely have been like deer in headlights.
"And when Mr. Paulson says, as he did on all the talk shows on Sunday, I hate the fact that we have to do it, but its better than the alternative, I believe him. (It would have looked better, of course, if he had come up with this plan before it looked as if his former firm, Goldman Sachs, was in jeopardy.)
This is a blog, none of us actually have much say in this, beyond being able to voice our opinion via phone or fax, which many already have.
Comrade Scared Shitless | 09.23.08 - 12:19 am | # [kill][hide comment]
Wrong. You can educate those you know and meet in a clear and concise way. We had it so easy; for so long; that many began to think everything runs on automatic.
The talk down at the barbershop used to be centered on politics. Now it's economics. I've been educating the boys in a manner that looks past the labels. It took me about a year, but I've got them all tuned in now. And so it spreads...
JimPortlandOR writes:
I certainly accept that a blog can have a primary emphasis,
Not ignoring the political factor in economics, but look up thread. It's mostly name calling. Granted bad laws etc., etc., but the actual agents of the crimes are not the politicians. Even given the effects that policy has, I don't see how the debate raging about who's the bigger slimeball helps. Besides, I have a point of view, and half of them are preaching to the choir, and the other half are spouting pure nonsense. You will note that it doesn't matter which side you I assume I am on.
mp writes:
"What a mess" is a polite way of putting it. It's turning out worse than I thought it would. Everyone, principally Merrill, seems to be trying to handle all of this as quietly as possible, and I don't expect them to publish any settlement prices. Undoubtedly, the Fed has made some "suggestions" in this regard.
At the end of the day, this thing can still go out of control. And you won't hear it coming.
Personally, I'm convinced that Bear Stearns's days as a major player are numbered. This mess has severely damaged their reputation and it will ultimately cost them a lot of respectable business. If the situation does go out of control, I think they'll ultimately be viewed as the cause of it and become a pariah on the Street.
This is a good time to find a foxhole to crawl into it until everything calms down.
One final note. I'm somewhat amused by some of the observations here concerning the 'trivial' amount of money involved given the 'big picture'.
Frankly, those are the kind of comments I would expect to see near the end of an easy money cycle. Money no longer means anything because it's so easy to come by. Well, let me assure you, a $20 billion portfolio is still one hell of a lot of money and can do major damage at the margins if its liquidation is forced.
Don't forget, all of us-even Warren Buffet-work at the margins.
mp | 06.21.07 - 2:28 am | #
you know, all this talk about section 8 and above-the-law clause reminds me of an old Soviet anecdote.
Stalin summons his Politburo committee and says:
-"I have two suggestions for a discussion today. 1. We arrest and execute all Jews. 2. We paint the Kremlin purple."
Everyone looks baffled, then one member of Politburo asks:
"Excuse me, but why paint Kremlin purple?"
Stalin:
"Good, I knew there would be no objections to the first item. Now, about that color..."
Mostly nonsense. The idea that this somehow makes Bear less of a major player is just dumb. The First Boston-Ohio Mattress situation in the 1980's was one thing. The Salomon Bros Treasury scandal was another real threat. This? An embarrassment, but not a financial big deal to Bear. They simply don't have enough capital at risk and are still being readily funded by the markets. That's the key to these sorts of firms. As for becoming a pariah? Stop it. They ain't Drexel. As for the scale of the event? See my prior list of things that were far bigger deals than this. What is going to happen here? Same thing that happened in 1990 when the Feds blew up the junk market. Some very smart, savvy guys (in that case Leon Black) will step in, buy at a huge discount from a panicked seller and come out the other end making enormous returns. I'd be Dave Tepper of Apaloosa is in the room as are the guys from Cerberus. But those are simply educated guesses.
Banker | 06.21.07 - 2:52 am | #
The Bear Stearns Companies, LLC and its subsidiary, EMC Mortgage Corporation, have agreed to pay $28 million to settle Federal Trade Commission charges that they engaged in unlawful practices in servicing consumers home mortgage loans. The companies allegedly misrepresented the amounts borrowers owed, charged unauthorized fees, such as late fees, property inspection fees, and loan modification fees, and engaged in unlawful and abusive collection practices. Under the proposed settlement they will stop the alleged illegal practices and institute a data integrity program to ensure the accuracy and completeness of consumers loan information.
Like other companies that send a bill, mortgage servicers must make sure that the amount they say is due really is the amount due, said Lydia B. Parnes, Director of the FTCs Bureau of Consumer Protection. Consumers have the right to expect accuracy from the company that collects their mortgage payments.
As stated in the FTCs complaint, Bear Stearns and EMC have played a prominent role in the secondary market for residential mortgage loans. During the explosive growth of the mortgage industry in recent years, they acquired and securitized loans at a rapid pace, but they allegedly paid inadequate attention to the integrity of consumers loan information and to sound servicing practices. As a result, in servicing consumers loans, they neglected to obtain timely and accurate information on consumers loans, made inaccurate claims to consumers, and engaged in unlawful collection and servicing practices. These practices occurred prior to JP Morgan Chase & Co.s acquisition of Bear Stearns, which became effective on May 30, 2008.
Sebastian writes:
One of the things that the bears seem unaware of is that holding "illiquid, esoteric" securities is not only not a new phenomenon, but stock mutual funds do it, too, and it's been going on for years.
A fund might hold a large position in a thinly-traded stock with no idea what the "mark-to-market" price might be if it suddenly had to unload a big piece of it.
However, these things don't come home to roost until times of significant economic or financial stress...which we don't have, however often the MSM screams that we do.
Mock- I thought it was common knowledge that the reason Clinton had a balanced budget was because he had a Republican Congress.
Not taking sides here. Just saying....
But hearing the evil (as us good Democrats were wont to call him) Newt Gingrich come out squarely against this bailout on FOX today, makes me think that perhaps the comparative fiscal sanity under Clinton DID have more to do with the Republican Congress than him.
"... the critical part of these institutions to preserve is the loans and other credit extended to worthy borrowers. And just because you are rescuing that part of a financial institution, it does not follow that you also have to rescue the shareholders of that institution or the senior management of that institution. Where the rescue is necessitated because of losses I would argue that you don't." Richard Vague, co-founder and former CEO of First USA Bank and former CEO of Juniper Financial at Guest Post by Richard Vague: Should We Bail Out Large Corporations? - The Washington Note
mp,
as much as I respect your foresight, you must admit here that both you and Banker had a chance to be right.
The credit bubble blow-off is mostly a psychological thing, and the trigger could be anything, and could come later. Trigger happened to be Bear, but it didn't have to be.
Many people waited for the peak credit event for many, many years - they were wrong on what the trigger would be so many times, that they did not dare believe again even after Bear fiasco.
While her finance minister said German banks would not need a similar bailout, Merkel said the world community should react by forging international agreements that could be voluntary rather than anchored in law. "The crisis on the international financial markets shows us that you can do some things on the national level, but the overwhelming majority must be agreed to on the international level." Instead of codifying these deals in law, Merkel suggested binding agreements between major economic players. "This is about greater transparency," she said.
And at Jessie's:
Putin Joins China in a Call for a New Global Financial Structure Not Based on the Dollar
I ve heard an interview on NPR. Former majority leader, mr G was really upset about plan of the government to pay premium for distressed assets. I think he mentioned info leaked to one of the financial blogs. (probably Naked C ).
Anyway, you guys did much more to make some sense of everything then anyone else in the media or probably the country.
So thank you.
Also for those of you who called your Senators, thank you x 2.
I just wish that all the Repub. Dems. and Independents would become Citizens and fight all the evil rotten people on Fall Street and in Washington.I'm glad to see the anger here,other sites and on the streets while I deplore the conditions that have caused this anger.Even when times are good,things could be a lot better.Now that times are not good and look to get a lot worse our goverment and our finance world are going to have to be changed and if not changed for the better,we,our kids and grandkids are truly screwed.I'm 66 in pretty good shape and can live out my life corfortly,but I don't like being in a world that is so unfair and unjust to so many.Plus it just plain pisses me off to be Fucked over in small and big ways.This isn't the way things could or should be......Rant over. I'm not drinking(just toking) so I can't really get wound up.
private funds are now allowed upto 15% voting and 33% total equity in banks.
i guess part of the plan is that after the first round of auctions, many banks will have to mark to market and need recap, and private funds and perhaps the new bank holding companies will jump into attractive looking positions ?
didnt i see a protest against mark to market in WSJ today or so ?
Thanks. I enjoyed watching Rep. Kapture blow her stack.
Puts one in mind of the late Paul Wellstone, who last blew his while trying in vain to oppose Sen. Biden's little bankruptcy reform gifties to MBNA. Ah, Paul; if only you were here to see Credit Card Joe now!
Populist energies in today's Democratic Party are short-lived. I trust the good lady Kapture realizes her anger is merely decorative, a shade of crimson helpful as camouflage while her party leaders make ready to do Wall St.'s bidding.
Banker had tremendous faith in the system and his cronies, but are you telling me that the CDOs and MBSs that we're worrying about would have ever paid off? That the downturn in RE and CRE wasn't going to happen? That the leverage wasn't poised for the disaster? That all the events that have transpired are just bad luck?
The only reason I gave the 3% is because of the chance of a asteroid strike or fusion technology breakthrough or WW III. Something big enough to reshape the world.
hey, I am still waiting for Chinese to stop supporting dollar. And I think the current mega-bailout will be the trigger, because US leaders will not be able to swallow the bitter pill of selling good assets to China (to cover debts). But I may be wrong.
After all, Setser was waiting for it since 2003 and he gave up hope.
Guys, mp has you stone cold. He only makes macro calls precisely because there's so much "system noise" that even a correct micro call has a better than even chance of being swamped by the tide.
RE, since we're digging up old stuff tonight, I labeled it the "crisis of credibility" a while back. I don't claim to be the first, as it's a somewhat obvious idea.
But it's easy to get fixated on the details of this or that bailout and miss the bigger picture -- not just how we screwed ourselves, but how the world surely views us after Iraq and the credit/mortgage/finance crisis. We have no credibility left.
Only a massive shakeup at the highest levels might help show the world (and ourselves) we've learned from our mistakes. Could Obama deliver this? I want to believe, but very much doubt it.
"Banker had tremendous faith in the system and his cronies, but are you telling me that the CDOs and MBSs that we're worrying about would have ever paid off?"
GREEDOM, Deal with it. I don't know about you, but if you add up the 85b. for AIG, the 15b for ndy Mac, the 700b for the bailout, Freddie, Fannie, why not take the 700b. and push it out of a C-130 in $10 bills over populated areas? Cut out the middle man, and we will be able to fix this mess. Paulson can get a loan for the 700b. if he really needs it.
Actions speak louder than words. I'll believe it when I see bond yields increase to double digits.
I agree but much more is happening. This is becoming an avalanche of criticism that will result in huge change internationally.
From Germany (you can run it through your translator, I am too tired now):
Hamburg - Es ist kein Hilferuf, es ist ein Hilfeschrei: Auch andere Staaten sollten wie die USA faule Kredite aufkaufen, forderte Finanzminister Henry Paulson. Die US-Regierung stellt deshalb 700 Milliarden Dollar Steuergeld zur Verfügung und hofft, mit dieser Maßnahme das Finanzsystem wieder zu stabilisieren. Doch die deutsche Bundesregierung stellte sofort klar, was sie von dem Aufruf hält: nichts.
Zu Recht, finden Wirtschaftsexperten: Schließlich werden die Verantwortlichen der Krise, die jahrelang hohe Gehälter und Boni kassiert haben, durch die Milliarden am Ende nicht bestraft, "sondern genauso behandelt wie alle anderen auch", sagt Carsten Meier vom Institut für Weltwirtschaft in Kiel (IfW). Mit der Finanzspritze hilft die amerikanische Regierung allen auf die Beine, sich verspekuliert haben - und verhindert so eine Bereinigung des Marktes.
This kind of sentiment is all over the world. Just read the international papers. With much more hurt on the way the blame game will only get louder.
traunches... the world, especially the EU, is facing the same situation. their banks made the same idiotic loans. We just happen to very good at selling our toxic crap to others.
mp- you're tired. Go to bed. I forgot to quote Missed Information to give context to the response, but if you were your usual self, you would have caught it.
After all, Setser was waiting for it since 2003 and he gave up hope.
I remember that. After reading him for a while in 2006 and 2007 I concluded there is no reason for China to stop the "mother of all vendor finance deals" until the US is flat broke. The internal demographics leave it no choice.
sdtfs writes:
Banker had tremendous faith in the system and his cronies...
That's what made him so valuable here. He was wrong, but he represented the "insider". He thought the house of straw was brick, but even more importantly he wasn't a kool-aid drinking dittohead. I had the feeling that he had some part in putting the overall structure together, and thought it sound.
but are you telling me that the CDOs and MBSs that we're worrying about would have ever paid off? That the downturn in RE and CRE wasn't going to happen? That the leverage wasn't poised for the disaster? That all the events that have transpired are just bad luck?
no, what I am telling you is that at the time, the housing prices just dipped down for the first time. We, the CR crowd, called the peak. Because it was sensible to call it.
But with that small blip of data, it cannot be possible to identify peak with 100% certainty. We could not know with 100% certainty that bubble lending machine did not have another go in it - after all, you can always invent something even more devious than NegAm Interest-Only mortgage. And then, the splurge could continue for another year. Or two. I say, we were just lucky that at the time Congress did not approve some weird 200 billion program to give free ponies to all new homeowners. I agree that was not very likely, but I am just giving an example.
are you kidding me, I agree the idiocy was widespread, but the epicenter was here in the US.
I should have also mentioned the Kyoto Protocols. There was a general attitude of "screw you, but send us your money." Like I said, no credibility. But we do have the strongest military. Let's see how long that lasts when the belt tightening really starts...
Your point is valid and well taken. However the UK, Spain, Italy, Australia, etc. cant blame us for a massive decline in house prices. They loved it when the prices were skyrocketing... they dug their own graves (while buying some of our shit along the way).
the world, especially the EU, is facing the same situation. their banks made the same idiotic loans. We just happen to very good at selling our toxic crap to others.
BS. No they are not. They made lots of bad loans but securitization in Europe was nowhere near the level of the U.S. This isn't really an issue of mortgage loans but about leverage and securitization. Huge difference!
Marcie Kaptur was one of only 3 Dems that voted against the Fannie/Freddie bailout.
I called her the next day, thanked her profusely on behalf of all Americans, congratulated her for her courage in standing up to the rest of her Party.
Then suggested that she and the other 2 Dems join up with the 149 Republicans that voted against the F/F bailout and form a NEW Party.
People who have tried to reach her this week about this new bailout have gotten the message that she is "out of her office this month".
And if it seems like I'm applying an unequal standard to the US, I am. As the remaining superpower, we can lead by example or force, or some combination.
The balance shifted too far towards force, and the examples have mostly been of the "screw you" variety I mentioned.
EEngineer: I didn't know you hung out at barbershops.
mp: Well, if Conjure suggests getting out of dollars, I'm mostly there. Reviewing my own stuff, I'm up several percent over the last few days, especially today. Honest to god, I'd be happy with zero and just keeping my principal at this point.
I don't why anyone would need to ask your net worth. I've always assumed that someone of Conjure's age and advanced wisdom has a pirate chest in bullion and gold somewhere in the world.
Can someone point me to the Money Market outflow charts again? I don't think the Fed has enough to backstop all of them, either. Not even if the cutoff date was Friday the 19th, as advertised.
MI- Agreed. I couldn't understand how the world was continuing to stand for years, so I don't give my predictions much credence.
But as a lurker, watching the debates that people who actually knew things engaged in, I gave much more weight to mp. And that was another reason to appreciate Banker, he did highlight the necessary points. I don't believe he understood how much corruption there was within the system.
Government debt is already 53% of US GDP, but thats trivial beside business debt at 72%, household debt at 98%, andmost toxic of allfinancial sector at 112%. Not all of that private sector debt is toxic, but even if half of it were, a government attempt to paper over the crisis would triple its accumulated debt.
You guys really don't understand what's going on? This isn't about Reagan, Clinton, or W. It's about compound interest. And we are done. We are going to reset, one way or the other.
From a systemic view you are correct. My point is the average EU man on the street is feeling pain because of the decline in housing. Very much the same as here, at least for now.
90% of the worlds voting population has no idea about securitization.
The ignorance of most of the people I interact with is amazing. No one gets the fact we are in deep shit.
I loved having Banker here. He was such an optimist. When banker finally started folding,and remember, he ultimately did, it was clear the situation had reached the point of no return.
People like that are very valuable guages of what stage we're at.
I saw a 20/20 segment a few months ago about people who were readying up for Armegedon -type times. They were attending a week long "camp" (lol) where they were being taught how to survive without all the modern American niceties.
One of the guys said he was a former Banker. Our Banker? hmmmm.....
You guys really don't understand what's going on? This isn't about Reagan, Clinton, or W. It's about compound interest. And we are done. We are going to reset, one way or the other.
oh yes, we do we do...
Got permanent resident card in a "safe" country two years ago.
Just timing my move now...
Feels like playing with fire, but I like it hot.
this damn blog has kept me from my homework all weekend. im tearing myself away. thanks for getting this thread back on track. good stuff (you know who you are)
Good on Kaptur. Pity her resistance is so useful to her complicit party leaders as a smokescreen. An angry oddnik here, a troublemaker there; meanwhile the bosses get down to business.
I do like the idea of schism in the parties. If there's a big enough bust, perhaps we'll get lucky enough to see the rotten duopoly upended.
Missed - Thought I had about 18 months as of this summer. I'm now figuring 6.
waiting - would be nice to have someone in the government wake up and realize that pouring the last of the U.S. credit card balance down the rathole is ill advised. They're going to need that money.
The ignorance of most of the people I interact with is amazing. No one gets the fact we are in deep shit.
I'm not surprised. I was one of them. When I found out about 80/20 loans I was puzzled why they weren't considered 100%. Then I found out about stated income and my head spun. I accidentally stumbled onto the blog TheMessThatAlanGreenspanMade and read it because I thought it was a joke. It whetted my curiosity and led me to CR (with the forest scene.) I still don't have a rigorous understanding of this stuff (and I never will), but I hang around for CR's explanations, Tanta's writing, and a few of the commenters.
I have been following this and previous threads for about a week and also thinking about what is happening. Many of you think that Paulson and Bernanke have been following an agenda. I do not think so. They are in panic mode.
If you look at what they did in response to the Bear-Sterns unraveling it seemed as if they were acting to rescue the investors.
But if you look at what they did in response to the Lehmans collapse they simply let them fail.
Next they responded to the AIG crisis by gutting that company.
In response to the market reaction, they then jumped back into bailing out the whole market.
They have no plan. They are as cluless as we are. Please calm down. Our leaders are as clueless as we (I) are (am).
You know there is something wrong in the world when the "villian" in a 80s movie about wall street seems to a more decent human being than a CEO of an investment bank.
90% of the worlds voting population has no idea about securitization.
at my 20th reunion in the summer of 2005 the table talk turned to the housing market. I was talking about securitization then -- how banks were reselling loans to Wall Street to 'reload' their capital -- which I had only recently learned from this blog.
Everybody at the table had a lightbulb go on, understanding that new dynamics were driving the market compared to the 80s or 90s.
re: PeakVT I remember that. After reading him for a while in 2006 and 2007 I concluded there is no reason for China to stop the "mother of all vendor finance deals" until the US is flat broke. The internal demographics leave it no choice.
Well, not quite. The real argument is that at some point China would not be able to support the dollar, no matter how much it wanted to.
The reasons are many, I am sure you read about them on his blog. But Chinese managed to keep all their balls in the air, and they still do... but they look more tired by the day - even magicians need a rest.
At the least, it will show up on the news and make the rest of the country realize that something very wrong is happening and maybe they should think about voting with their feet and wallets. It could show the rest of the world that we have enough backbone to reject the excesses of our very unamerican cabal.
Tanta & CR, if you're in the neighbourhood on thursday, please stop by Bowling Green Park at 4:00 PM
90% of the worlds voting population has no idea about securitization.
Ask them about the shadow banking system.
Ask them what the wars in the middle east is really about.
Ask them about the empire.
Ask them if they really benefit from these ideas and systems.
Those responsible for the global financial crisis should be punished, French President Nicolas Sarkozy said Monday, calling for more world leaders to recognize the seriousness of the situation.
"Today millions of people around the world are fearful of losing their nest eggs, their apartments, their savings in banks," Sarkozy said at a dinner where he was awarded the Elie Wiesel Foundation's Humanitarian Award.
"We must provide them with clear answers. Who is responsible for this disaster. That those responsible will be held accountable and punished and that we government leaders will assume our responsibilities," he said without specifying those responsible.
"If we don't speak clearly, we won't create a stable world," he said in front of more than 800 guests including many French and American business leaders.
"Maybe the most helpful thing that could be done today is if world leaders accepted the seriousness of the situation and spoke frankly on these topics about which one should not compromise," said Sarkozy.
Yeah Baby! That's what is missing with any plan these guys come up with, these clowns need to go to prison at minimum and unless a bunch of them do trust will never be restored.
El Cliffo writes:
IndyMac is nothing. Der Spiegel says: IMF to Audit Fed.
"Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.
"As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.
". . . Roughly two-thirds of IMF members--but never the United States--have already endured this painful procedure."
They will be finished in 2010.
(via George Ure)
El Cliffo | 06.30.08 - 11:15 pm | #
sdtfs writes: Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.
Wouldn't it be cheaper to just read CR for the next year? I mean stress test? I doubt if their worst case scenario is going to be so much worse than the reality.
sdtfs | 06.30.08 - 11:18 pm | #
Woohoo! I'm a prophet, too!
I thought it was going to be a virtual test, I didn't know they were going to it for real.
The real argument is that at some point China would not be able to support the dollar, no matter how much it wanted to.
The reasons are many, I am sure you read about them on his blog. But Chinese managed to keep all their balls in the air, and they still do... but they look more tired by the day - even magicians need a rest.
China has a looming water crisis , as well. It will be be their biggest issue in 10 years.
The appropriate solution is not for the government to replace the bad assets with public money, but rather for the government to execute a receivership of the failed institution and immediately conduct a whole bank sale selling the bank's assets and liabilities as a package, but ex the debt to bondholders, which preserves the ongoing business without loss to customers and counterparties, wipes out shareholder equity, and gives bondholders partial (perhaps even nearly complete) recovery with the proceeds.
SHORT THE EURO
please stop changing the rules every day.
Let's just hit the reset button right now. The slow bleed is simply getting too painful.
first bitch
disclaimer:
long MTU.
another desperate attempt to raise capital ...
The SOvereigns are out of here for the foreseeable future ...
below 10th. hurray
We need a bank holiday with audits ... period ...
everything else is just finger in the dike ...
I am just curious why hedge funds have gone pale like this ?
why cant the short the dollar
and go long on GLD and DBO ?
they can teach paulson and cox a lesson ?
So what, big deal.
Commisar Rob Dawg,
"That's why I'm a Commissar and you are just a Comrade. ;-)"
Nostrovia,
This is not a huge change, but those that remember the S&L crisis are a little nervous
I don't care, it's lie after ! this system that is not D is toast. Sad:(
jo6pac
We all know they would do this, 3rd world here we come.
I canz haz mi own bankz now?
And a cheeseburger?
And a pony?
Seriously, the extent of the crisis can be measured by the length of time we go back to unwind the banking laws we've adopted over the last 105 years. Concentrating the ownership in the hands of a few is a profoundly ill advised practice.
Comrade Misean,
Careful tovarich or I shall deploy my cossacks to make all equal.
All in the effort of preventing the crash that has already occurred.
CR, you asked about the bump in traffic earlier today. I didn't see if this was mentioned in that thread, but FYI Josh Marshall of Talking Points Memo linked to one of your articles today. First time I've seen him do that. But I'm sure mostly it has to do with all the great coverage here!
Commissar Rob Dawg
"Careful tovarich or I shall deploy my cossacks to make all equal."
ROFL.
Nostrovia,
mr dog,
why does comrade misean think he is commisar?
clearly is title says, comrade.
This reminds me when I was a kid and my big brother used to make up the rules when we played Monopoly and I always believed him. For some reason he always won.
bearly repost from last thread, I am ready to triple down . . . this issue will not damage Obama, it is a threat to downticket congressional Dems IF they fall for it.
As I posted last night or the night before, IT"S A TRAP!
YouTube - IT'S A TRAP
and
YouTube -
I went to buy a toaster and got a bank for free!
There is the same concern here with the new Fed guidelines - that private equity firms will lend to their other businesses excessively.
Well ... obviously the restraint shown by Wall street in the past decade should ease any worries on this front.
I am sitting in my virtual bathtub making lists.
Mdm LaFarge is still sitting peacefully for now.
but change is coming.
You will take your assignats under penalty of treason, mon frers
Someday this war's gonna end...
Comrade Misean writes:
Commissar Rob Dawg
"Careful tovarich or I shall deploy my cossacks to make all equal."
ROFL.
People's grand imperious floor belongs to all equally. Please make room for the rest of us.
Comrade cracker,
Commisar Rob Dawg is commisar. Where do I say I am Commisar?
Nostrovia,
I worked on massive litigation involving a sister statute and the BHCA. Huge French fraud where Credit Lyonnais acquired the failed Executive Life Insurance Co. by acquiring more than the prescribed limits through a third-party (but maintaining control through undisclosed side agreements) and lying about it to the Fed. I have a felling I'm going to see a little deja vu all over again with all this mess, only it will all be "legal."
educated white boy writes:
I was long oil and short Euro on friday into Nymex Opex...
stop believing so much or your bullshit.
cracker writes.
What, me worry??
Nice they delayed all that little stuff about QSPEs too..
OT
I'm 30 years old. I am watching The Grapes of Wrath for the first time in my life (as per suggestions here).
The latest 2 generations have NO IDEA what is going to hit them.
And there is no way to avoid this fate. NO WAY.
CR said, "negotiators neared agreement on allowing the government to take equity stakes in companies that participate in the rescue...."
What happens to share prices of participating firms? Look at AIG, FNM, FRE. How much equity will participating firms have to give? 25 pct? 50 pct? What percentage of financial firms make up the stock market?
The SOvereigns are out of here for the foreseeable future ....
They're coming to a McMansion near you.
Some one posted Frank's version of My Way--
Personally, I think Sid's fits the time and mood better.
YouTube -
New Kunstler post. it could be posted here.
Clusterfuck Nation by Jim Kunstler
I think the most humane option is for the US to default on it's foreign creditors and start again.
In case you have noticed, we are flogging a dead horse.
comrade cracker writes for commisar white boy.
you dont know what the fuck your talking about satan.
flog this bitch.
My head hurts . Cheap vodka and incessant beatings
take their toll.
This is a joke...the PE guys are just trying to take advatange of the situation, this is like the IB's get the SEC to change the rules in 2004, that worked out real well didn't it?
The latest 2 generations have NO IDEA what is going to hit them.
And there is no way to avoid this fate. NO WAY.
Interesting Times
Don't sell this crowd short. My mom was born The Day The Banks Closed. And yes, it is still capitalized three quarters of a Century later. Not having experienced events is not the same as being unprepared or unaware.
No short selling crowds.
Paulson's act is wearing thin. They shoulda got someone purdier like Palin to sell this kleptocracy's delight.
The SOvereigns are out of here for the foreseeable future ....
They're coming to a McMansion near you.
~ Generalisimo Gerkinov
they're waiting for the final crash of RE about 2010 I'd say ...
Leftys new hours are: OPEN 24HRS
There is just too much pain out there.
Has anyone else done some back of envelope math the last few days on the $700 Billion? It's not enough. Not even close based on what's come to light so far.
captcha
i salute you
i gave quote that showed dems were on it
holding the prez and his people accountable
you gave me a quote back per my challenge showing that some repubs were too
right on
good dems and good repubs together
your quote
"Thirty-one House Republicans sent a letter to Paulson and Federal Reserve Chairman Ben Bernanke, asking them to stop using federal funds to save private firms.
http:// seattletimes.nwsource.com...rvatives20.html
CAPTCHA | 09.22.08 - 8:01 pm | #
TARP passes, get on with the show.
TARP passes, get on with the show.
~ cracker
It's all in the details m'boy ...
It's financial Calvinball!
Are they going to make us stop buying SRS? It was up nicely today!
fascism
it's here
Alles klar, Dawg Kommissar.
Mr Dawg... OT... are you on the mend these days? My mom had an early quadruple bypass 10 years ago... took her awhile before she could exercise, etc., but is okay now. Meds are pretty darn good these days.
Brian writes:
(quoting mock turtle)
"since gerald ford, bill clinton is the only president who ever (EVER) submitted a balanced budget to congress...period.
mock turtle | 09.22.08 - 8:03 pm | #
now brian answers
There were only 3 in between, one (D) and two (R). Have you swallowed any other strawmen lately that you'd like exorcised?
Seriously, blaming this on either party is childish and non-productive.
mock responds
hey brian, give me a link or a citation...
YOU ARE BLOWING SMOKE BUDDIE AND I CHALLENGE YOU
i stand by my assertion only clinton brought the budget into ballance
also
dont give me the childish argument the republicns use when they are introuble (oh momy they started it.. or they both did it too...)
thats weak
simple fact everybody knows
repubs mostly say "hey we dont need no stinking government regulation... free market can handle it all...
(until now when they come crying to momy...
oh please federal government help us please we are so scared...)
and dems are usually the party that says hey we need stop signs and yellow stipes on the road and speed limits
hey. get real, dont try to give me the hey repoubs and dems are all the same crap cause it aint true an everybody knows it.
there are differences...thats why repubs hate dems and vice versa
now it is true money has corrupted both sides of the aisle.
i resp-ect ron paul and i respect dennis kucinich..neeither man can be bought , one a conservative one a liberal.
The funny thing about the S&L fiasco and the upcoming private equity fiasco is that a prudent manager would never loan himself money. Period.
In every town across the land, the tendency has always been for the local developers to get together and start up a bank, throw in some commissioners on the board and... voila! A disaster is on it's way. And this is a natural occurrence, simply because the developers want to keep developing and the commissioners want a piece of the action they vote on (but in a legal manner).
If the boards of the banks would stay out of the administration of the city/county and the developers would move on, these types of incestuous relationships would die and the banks would ultimately make better decisions, but, this tendency to greedy destruction is just as prevalent on Main Street as it is on Wall Street, there's just a lot less zeros involved (pun not intended but applicable).
Conflict of interest anyone?
You need a link to prove there were only 3 presidents between Ford and Clinton?
Maybe you should go back to the children's table, the adults are trying to have a discussion.
This is all so f*cking funny I'm sorry for wasting valuable commenting space but I can't stop laughing
FWIW, I wrote a post urging my readers to contact our local reps. When I called, the staffer I talked to seemed taken aback when I suggested his boss "stick to his Republican ideals and not spend taxpayer money on a bailout of private companies." I chatted a bit with him afterword, and he said this was the #1 issue they were getting calls about, with the vast majority against. He also said the Rep won't take a position on the bill until it's drafted.
Word is getting out, and dissent is spreading. The longer the Dems can delay, the stronger the backlash will become. If you're against this thing, by all means call your rep. It will have an effect.
I trust Hank. He said he's going to protect the taxpayer, and I believe him!
RhodesianGreenbackinAZ writes:
Mr Dawg... OT... are you on the mend these days? My mom had an early quadruple bypass 10 years ago... took her awhile before she could exercise, etc., but is okay now. Meds are pretty darn good these days.
Thanks for asking. Yes, emergency quarduple bypass is easier these days. Got out of the hospital 4 months ago today. More like getting hit by a truck rather than a train. I am feeling better than I did before going in for the "one hour test" that sent me to CCU stat. I got all the bells and whistles. It took 3 feet of leg vein, a foot of forearm artery, and a mammary artery redirect to unclog me. No heavy lifting and I've lost upper body strength but otherwise fine. Nice of you to remember.
How can Hank not recuse himself??
Serously... his interests are the furthest from tax payers'.
PS- that was a great reference to the past CR.
Cheers to that, Commissar.
CR: "There is the same concern here with the new Fed guidelines - that private equity firms will lend to their other businesses excessively."
CR, isn't a continuation of excessive lending and consumption one of the goals of all the bailouts? I am not sure that the arms of government have decided the problem is excessive consumption compared to production. Instead they've focused on the root cause being the drop in house prices back down to more historically normal levels.
The fed has announced that the stock of Goldman Sacks and other choice firms will be convertible to a curious instrument known as a hoopajoop, which follows rules according to an 800 page manual, portions of which have been released, the bulk of which is yet to be written "some time after november." The fed guarantees that this hoopajoop conversion will solve the liquidity/solvency crisis.
Market reaction was mixed because nobody understands what a hoopajoop is, what the implications of a hoopajoop conversion are, and because the few parts of the 800 page manual which were released today involve novel securitization vehicles which are impossible to use for prediction purposes. Market forces are reeling, too absorbed in contemplating this "brave new world" of hoopajoop investment instruments to act. Paulson announced that this was just one of a series of planned maneuvers to confuse the market with bells, whistles, and startling regulatory surprises, just long enough to pass the novemer elections.
Chatzy - No room
Made a chat room for the insomniacs. Try it out
Interesting Times writes:
How can Hank not recuse himself??
~~~~~~~~~~~
Hank is a Bankster ... remember that , it will be useful ...
Chatzy - No room
Another loophole? Wow, that's a surprise.
Time to CTRL+ALT+DEL and get the hell out of San Diego.
The rich posers can have it.
CR, isn't a continuation of excessive lending and consumption one of the goals of all the bailouts? I am not sure that the arms of government have decided the problem is excessive consumption compared to production. Instead they've focused on the root cause being the drop in house prices back down to more historically normal levels
How would the bailout stop the decline in housing prices?
Hank is a Bankster ... remember that , it will be useful ...
mmckinl | 09.22.08 - 11:27 pm | #
Will it be on the test? Someone should tell J6P. He's busy watching Favre pull a Lehman at the moment.
Brian ...
just tell him that Hank is going to take his beer away to pay for TARP ...
go long the Euro,.
if you believe that, I have a horse to flog....you're the horse.
ganked the oil shorts today....
Euro longs are next.
Humor for the comrades, on this late night before the latest crash:
The Top 10 Conservative Idiots - The Top 10 Conservative Idiots, No. 352
Numbers 1 and 9 are particularly good.
Chargers are beating the Jets, poor Brett
cracker
whipsaw ...
works both ways ...
I just stand back and watch ...
Really? Paulson and Bernanke are going to change the rules so their boys make billions. Who knew?
Interesting Times @ 1053:
You want eye-opening? Try "Hard Times" by Studs Terkel as well as "Since Yesterday" by Frederick Lewis Allen.
And back to topic...
Given what Wednesday and Pugsley have cooked up before, giving them a new toy is foolish at best.
"How would the bailout stop the decline in housing prices?
Comrade Midwest Product | Homepage | 09.22.08 - 11:29 pm | #"
CMP, price is a function of supply and demand. Increasing the supply of money for homeowners (through loan mods, lax lending standards on new loans etc) is the main thrust of the bailout. Whatever price results will be higher than the price without intervention. Nothing fancy. Just basic economics.
Please excuse Comrades if this has been posted already. Comrade Mish has posted excellent thread on his site. It has all emails to those Cossack Senators with a letter to send them opposing this Bolshevik bailout plan which will make the Ruble look like a real currency compared to the dollar should it pass.
Please fellow Comrades, take the time to read and email these pigmen.
Mish's Global Economic Trend Analysis: Senator Email Blast List Simplified: Flood Them With Emails With One Click
Sorry CR for the redirect to competitor site.
Nostrovia.
After seven years of criticizing the U.N. for its huge, costly bureaucracy and indecisiveness in the face of grave problems, Bush will make his final address to the General Assembly on Tuesday. His speech, scheduled to last 15 minutes, was to stress the need for multinational diplomacy .
The nation's burgeoning financial crisis, anchored on Wall Street not far from Bush's hotel, overshadowed his U.N. visit. Bush is in the awkward position of advocating capitalism, free-trade and deregulation throughout this presidency but then overseeing a costly government takeover of failing financial institutions.
White House press secretary Dana Perino, explaining Bush's turnabout, said this was not the president's first instinct; that he would not have wanted to take this action to help these companies if he wasn't convinced by the considered judgment of his senior economic team that it was critical in order to protect the American taxpayers and the American economy as a whole.
Page not found
JUST LIKE WE SAID FRIDAY - THIS IS ALL ABOUT GS...Hank is a f'n CROOK:
Paulson Debt Plan May Benefit Mostly Goldman, Morgan (Update2) - Bloomberg.com
Any chance FEMA will be setting up pods to distribute MRE's and water on Wall Street?
Poetic Justice
Sept. 22 (Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp
Brian wrote
Maybe you should go back to the children's table, the adults are trying to have a discussion.
Brian | 09.22.08 - 11:17 pm | #
brian I... AM... at the childrens table and guess what??? you are there with me hommie
my challenge was... name another president that presented a balanced budget to congress besides clinton since gerald ford!!
couldnt do it huh...
i understand
so you had to come back and insult me
im ok with that...i'll man up
its ok
cause facts are facts
but dont waste your time trying to insult me with the childrens at the table stuff
i can hang with you any day regarding the facts
and when im shown to be wrong ..i will admit it!!!!!!
crispy&cole
And then Hank the bankster bum rushed GS and MS through the Fed process for bank privileges ...
amazing ...
thanks for the post
Thinking it might be of some interest to commenters here, I did a back-of-the-envelope analysis of possible impact of the Dodd and Paulson plans under different loss fraction scenarios. I'm very curious what comments people around here have, and particularly on possible glaring errors in the dilution part, and the 125% rule, which I was not 100% sure about from reading the legislation.
The idea goes like this. The assets we are talking about are presumably the Level 3 assets of the large financials. So I took the level of Level 3 assets of those companies from (Blogger: Page not found. (I excepted Fannie, Freddie, and AIG since they are accounted for separately.) Curiously, the amount of Level 3 assets held by the top 20 companies sums to $755 billion, and as can be seen, holdings below that start to be chump change. Interesting how closely that number coincides with the Paulson price tag...
I assumed Treasury bought up all of it at their current marks. In both plans, if the securities sell above the price Treasury paid, that's simply a profit to the taxpayer.
Suppose there is a loss on the securities, and for simplicity in the calculation suppose it's the same on all securities. Under different loss fractions, the total loss to the taxpayer will differ in the two plans. In the Paulson plan, whatever the loss is on the sale, is the loss to the taxpayer. The Dodd plan, however, has an equity-stake backstop. As I understand it, the backstop is for 125% of the difference between paid price and sale price (i.e. 125% of the loss.) This equity stake dilutes the preexisting equity, so I assumed the government would immediately dump the equity into the market, thereby receiving Stake * (Market Cap / (Market Cap + Stake)). So this quantity was calculated firm-by-firm, using the Level 3 assets of the firm as of August and their current market cap.
The Dodd plan seems to have the feature that the taxpayer sees no losses until the securities lose 13%. Note, of course, that the calculation uses the same loss rate for all securities of all firms.
The results:
Loss\t\tPaulson\t\tDodd
Severity\t\tCost ($BB)\tCost ($BB)
-----------\t\t------------\t-------
100%\t\t755\t\t361
75%\t\t566\t\t227
50%\t\t378\t\t110
25%\t\t189\t\t23
13%\t\t90\t\t0
You can find a copy of the spreadsheet I used to do the calculations at Excel Sheet (adflevel3calc)
You could send comments to me at gmail, andrewfoland thereat.
CMP, price is a function of supply and demand. Increasing the supply of money for homeowners (through loan mods, lax lending standards on new loans etc) is the main thrust of the bailout. Whatever price results will be higher than the price without intervention. Nothing fancy. Just basic economics.
But there are still new homes being built, on top of foreclosed homes being put up for resale, so supply is still increasing.
Meantime, even if bailing out the worst offenders (e.g., WaMu) technically allows them to make some fresh loans, there's no way lending standards aren't going to tighten. Even companies like WM and WB can't get away with giving a $400,000 McMansion to someone with zero income anymore.
If this plan has any effect at all on housing prices, isn't it going to mean the difference between a 15% decline with no bailout and a 14.5% decline with it?
I've been in Costa Rica for a week. Anything happen while I was gone?
``People are angry right now, people are worried at what they see as excess affecting the real world,'' said Yvette Cooper, who as chief secretary to the Treasury is the Cabinet member responsible for overseeing the financial sector.
The comments reflect popular discontent about the banking industry on both sides of the Atlantic following government bailouts of Northern Rock Plc, Fannie Mae and Freddie Mac and U.S. insurer American International Group Inc. Concern about the public support for private companies is combined with resentment over pay for bankers, fund managers and others in the industry.
Are the JP markets closed on the 23rd ?
I see a down trend from HK and CN, but no reports from JP.
I hope the UN laughs in Bush's face. It is the very least he deserves, and I mean the least.
futures
Stock Futures on Bloomberg
i can hang with you any day regarding the facts
and when im shown to be wrong ..i will admit it!!!!!!
mock turtle
MT Rocks!
Andrew Foland - interesting analysis. Thanks.
"i can hang with you any day regarding the facts"
I was SysAdmin for 13 Members of the US House for 2 years. Then briefly worked in the White House.
The biggest lesson I learned is that Party affiliation is irrelevant. They are ALL pimps, or the don't get re-elected. Period. The country is divided 50-50, so nothing ever gets done (by design, by the way, just never meant to be so expensive). Anyway, 85% of ALL conversations that these Members and their staffs have behind closed doors are only aimed at keeping you partisan hacks rabid. So you: A) continue to enable them with contributions, and B) blind you with so much hate that you automatically dismiss anything the other side says.
Keeps them living the high-life. I've witnessed these strategy sessions. Names you would recognize. BOTH sides of the aisle.
For every (R) conspiracy you throw, someone can match it with a (D) factoid. Point is, they are ALL in on the same game if they've been re-elected before.
Can you guess which Party I worked for and/or supported? Careful what you guess. This is ALL OF OUR faults. Name-calling hasn't helped so far, why will it now?
Paulson has a habit of not including himself when he talks about tax payers. Wonder why.
Andrew, thanks for the calculations!
ising vacancy rates and falling rents in New York City office buildings caused by the collapse of Lehman Brothers Holdings Inc. and the sale of Merrill Lynch & Co. may damage the value of bonds backed by commercial real estate, Merrill analysts said.
Lehman, Merrill and Bank of America Corp. -- the Charlotte, North Carolina-based bank that's buying Merrill -- have about 40,000 workers in New York, and occupy a combined 8.3 million square feet, according to a report from Merrill analysts led by Roger Lehman. As employees lose their jobs, the banks will need less office space and rents will fall as vacancies rise.
HAHAHAHA!
Check this out:
Coleman: Government bailout could earn money
The government could make 10 or 20 times what it pays on this, possibly, Coleman said during a campaign stop at Christys Cafe in North Mankato Saturday morning.
Does Mr. Coleman think Minnesotans are that stupid? Evidently, yes.
Elvis nothing much
Britney Spears
Demi Lovato
Jane Krakowski
Dancing With the Stars
Heroes
2009 Audi A5
David Blaine
Rock and Roll Hall of...
Blink 182
Fall Foliage
Top ten yahoo searches today
If Minnesotan's didnt tear him limb from limb upon hearing that, they are definitely that stupid.
I was SysAdmin for 13 Members of the US House for 2 years. Then briefly worked in the White House.
I've been saying for a while: Unelect them all. Vote anti-incumbent.
It's the only way.
Comrades SS and Mock Turtle,
Solidarity brothers and sisters, solidarity.
Lots of good information and ideas get traded here by people who don't try to piss on each other, and that makes it easier for folks to ask questions, double check things, learn, and concede when facts show our earlier ideas were wrong.
This is part of the national infrastructure we need to rebuild.
Cheers
E L V I S
L I V E S
! ! ! 1 !
"The biggest lesson I learned is that Party affiliation is irrelevant."
I couldn't agree more, and will remain a registered Independent.
Cheers
joe shmoe
The Shmoe Rocks!
OT: For a view from asia
E Pluribus Hokum
Asia Times Online :: Asian news and current affairs
So Comrades, I emailed the Mish letter to all of the Cossak Senators.
Guess what responses I get? MANY disabled their incoming email server or addresses! I have about TWENTY of these.
This is an automatically generated Delivery Status Notification.
Delivery to the following recipients failed.
Arlen_Specter@specter.senate.gov
senator@klobuchar.senate.gov
senator@levin.senate.gov
THIS one kills me!!!! USER UNKNOWN!!!!
The following addresses had delivery problems:
senator@biden.senate.gov
senator@kennedy.senate.gov
senator@ensign.senate.gov
senator@sessions.senate.gov
mccaskilltransition@mccaskill.senate.gov>
Permanent Failure: 550_5.1.1_..._User_unknown
Here' response that basically says to go pound sand up my ass.
"Thank you for contacting Senator Tim Johnsons office.
Due to the high volume of email traffic our office receives, we no longer accept incoming email. Instead, we ask that South Dakotans use our offices web form to communicate their thoughts and concerns to Tim. Please click on the link below, or enter the following address into your web browser:
Senator Tim Johnson | Working for South Dakota
We apologize for any inconvenience this may cause South Dakotans, but hope that it will help us serve you better in the long run.
Why are we doing this?
Our office receives an extraordinary amount of email from people who do not live in South Dakota, have no ties to our state, and are simply "spamming" every U.S. Senator, often as part of an organized campaign to disrupt Senate services. Tims top priority is communicating with South Dakotans, but out-of-state email campaigns, efforts to "overload" the Senate email system, viruses, and other problems have made it more difficult to receive and respond to messages from South Dakotans. We hope that use of a web form will serve as a "filter," helping us focus our efforts on the service we provide South Dakotans.
What about South Dakotans serving in the military?
South Dakotans who are stationed abroad with the military, a foreign service, religious organization or charity undoubtedly will have a South Dakota address that is "home." Please enter your South Dakota address into the web form, and be sure to include your mailing address (such as an APO, FPO, address on a military base in another state, etc.) in the comments section of the web form. We will be happy to direct a response to your actual mailing address, but first we need to know that you are a "real" South Dakotan with a real South Dakota address, even if you no longer live here."
Here's the best one so far. Kinda like, if you don't vote me me, go F yourself.
"Thank you for sending an e-mail message to my office. Your views are
very important to me and I appreciate your taking the time to share your
comments and concerns. If you are a New Hampshire constituent and have
included your mailing address in your e-mail, you will receive a written
reply from me. If you have not included your address and would like a
written reply, please resend your original e-mail and add your address.
Again, thank you for taking the time to share your thoughts with me.
John E. Sununu
United States Senator "
I tried Comrades.
"This is part of the national infrastructure we need to rebuild."
Bingo. Is it that hard to see that the biggest source of the pigmen's power is the partisan division infecting the country?
Kunstler makes a good point that this thing feels how it might have felt leading up to the civil war - surreal realization of the problems inherent in slavery. A post here the other day along the same lines that (paraphrasing) one's Jewish relative said life was great in Vienna until they hauled their father away.
Wake the fuck up people!
Thank glod the regulars have kept their sense of humor.
As The Joker Once Said:
"If Ya Gotta Go, Go With A Smile!"
"bearly repost from last thread, I am ready to triple down "
$50 is fine and I'm certain CR will gladly accept it from you, courtesy of, bearly.
I already have a $400 bet with another diehard DEM I like to joke around with. Get this! He called me the day after Palin got the nod and invited me to a side bet of another $100 that Palin would be out before Nov. You guys crack me up.
Waiting for the "rigged voting machines" & "intimidation" conspiracy theories...
Brian,
Thanks for that insight. I am just a dumb non-political outsider, but over the years I've come to the conclusion that politicians behave as you say. Is it also true that they like long-drawn-out and finely balanced legislative battles, not so much because the issues are complicated and the solutions even-handed, but because that extracts the most money from competing lobbyists?
And Clinton is the only President since Ford to deliver a balanced budget.
Carter got socked with the debt from Vietnam and the effects of stagflation and the 73 oil embargo, but Reagan and W both deliberately sent the deficit soaring (then complained about spending and blamed the Dems).
I went beack and read all the posts. the Turtle may be Mock, but the Turtle was right.
Comrade Baron Von Helmut III.
I used Mish's global congress critter e-mail message and a lot of the e-mail came back with "since you are not a constituent, your e-mail has been rejected" message. I think a sleeping America has be aroused, however it's too little too late.
I'm curious what the other side would be saying now, if it had been Al Gore & The Democrats 100% in charge of the Government for 6 of the past 7 1/2 years?
I'm sure there would be absolutely no justification for blame in their minds.
Hypocrites!
c&c - thank you for that infuriating Bloomberg link. So it's looking like Russ Winter was onto something in his commentary today re:the TARP as Tar Pit for smaller banks to get hoovered up by the Friends of Hank. Surprise, surprise.
You mean Al Gore was never President?
Carter only won because of Watergate. Clinton only won because of Perot. No Democrat can win the White House since Johnson signed the Civil Rights legislation.
Moro
You know, if we don't stop labeling each other with a D or an R, these asshats that are ruining the country on BOTH sides will win. That's what they want.
DIvide and conquer. It's the government that is the enemy. Not us.
/gets off the soapbox and hides under it
"If this plan has any effect at all on housing prices, isn't it going to mean the difference between a 15% decline with no bailout and a 14.5% decline with it?
Comrade Midwest Product | Homepage | 09.22.08 - 11:47 pm | #"
CMP, I don't know. But my guess is that this is a serious effort to increase the upward bias in house prices. Consider deductibility of mortgage interest. How much higher are home prices because of this? I don't know, but I am guessing it is a significant amount. Govt action on a massive scale can make a difference to prices.
Please take the political stuff off this blog. We need to save room for the other trolls.
"Is it also true that they like long-drawn-out and finely balanced legislative battles, "
Like Social Security? Or perhaps energy?
Or my favs: Abortion, flag-burning, save the (insert cause here), etc, etc...
Look at the campaign contributions. Ted Stevens is indicted for bribery because of house additions? How much did Dodd and Frank legally receive from the banks they regulate? Hello, this thing on?
To win a seat in the House of Reps in a podunk district nobody cares about will run $10 million, easily. To make the math easier, lets lower that to $ 7 million. To win a 2-year term. Rougly 700 days... To win re-election, you need to raise $10,000 PER DAY from the moment you are sworn in... For a job that pays $180k/yr (?). In 2000, John Corzine left (wait for it) Goldman Sachs, spent almost $80 MILLION of his own money to become Senator of New Jersey. Go figure.
To repeat, WAKE THE FUCK UP PEOPLE.
All right, Brian, you're cynical. We get it.
I would have loved to see the horror in hank's eyes and then the subsequent rage whan GS briefly dropped below $90/sh (for the first time)
That IS what this bailout is all about.
Comrade SS
You can just look to the McCain campaign. They blame the crisis on Obama and the Dems because . . . they've been in control the past 8 years?
For CR readers the McCain camps use of Fannie and Freddie as whipping boy and girl is especially amusing, and obviously total bull. new readers can pull Tanta's great post on F & F's relatively small role in this mega fiasco. F & F had problems, some bad problems a few years back, but their role in inflating the bubble and spewing toxic securities was minimal...
Or, put it this way: Neither the Paulson plan nor the Dodd plan will be buying any F & F MBS because they are trading on the market at good values. the bailout plan is to buy toxic sludge produced by Countrywide and their ilk, not F & F.
Call the offices - preferably the local offices of the senators, reps., and state officials.
For instance, got this from congress.org:
BIDEN LOCAL OFFICE
Wilmington
1105 N. Market St.
Suite 2000
Wilmington, DE 19801-1233
tel: (302) 573-6345
fax: (302) 573-6351
Milford
24 NW Front St.
Windsor Building Suite 101
Milford, DE 19963
tel: (302) 424-8090
fax: (302) 424-8098
Washington D.C.
201 Russell Senate Office Building
Washington, D.C. 20510
tel: (202) 224-5042
fax: (202) 224-0139
Corzine is a governor
Brian writes:
I was SysAdmin for 13 Members of the US House for 2 years. Then briefly worked in the White House.
look brian
i can not come close to equaling the high level policy experience that you had.
i worked with gang mambers as a juvenile correction counselor.
now i garden, climb mountains in the cascades, and work my investments.
all i want you to recognize is that president bill clinton was the only president in more than a quarter century to submit and get passed a budget that was in surplus!!
he paid down the national debt!!
now this isnt rocket science
you and i should be able to agree upon the truth or falsehood of my claim without a lotta fandango,
Clinton did or didnt..what say you?
Even with the admittance that both sides have screwed up, it does not excuse the fact, that one party has brought us to this point. If they had enablers along the way, that's probably true.
But there is one party who has overseen the last 7.5 years, and they had an agenda, which completely disregarded the best interests of the citizens, and the troops as well.
I don't agree with all Democrats, but as a whole, there are many more genuine, honest & caring Democrats, than there are repubs. I have Zero doubt of that. At heart, more Democrats care about "Democracy," while the other party is concerned with the Corporations & Upper 5%.
While there may be some who hope that support under housing prices will stabilize the financial system most understand the bell cannot be unrung. That's the real problem, we should be running to get a mop not cutting our hands trying to put the broken pieces together.
Nice, Paulson is lubing the taxpayer up for a good old fashion ass raping and we're having a partisan mud slinging contest.
Sending 1000s of form letter emails to the entire senate is probably not that effective. Give your reps a call. It takes 1 minute, and they note your position. Be sure to emphasize the fact that you live in their jurisdiction, and you vote in every election. But use your own words, and don't spam these guys.
"you can't unring a bell
junior.
you'll need an attorney for this journey
sucker"
--tom waits
Yes he did pay down the nat'l debt. The tech bubble helped him just a bit. Conveniently exploded when Bush took over, then 9/11...
Look my point is that we can go back and forth and back and forth and back and forth and get nowhere. That is the design. And it's all of our fault until we elect people who start speaking truth to power. It won't change with the current crop, can't change with the current crop, IMO because they've all come up under these perverted rules.
Ian writes:
Nice, Paulson is lubing the taxpayer up for a good old fashion ass raping and we're having a partisan mud slinging contest.
Ian | 09.23.08 - 12:17 am
This is a blog, none of us actually have much say in this, beyond being able to voice our opinion via phone or fax, which many already have.
Thanks, Brian. I really appreciate your sharing your insider knowledge.
But you do know that most people blindly follow partisan political views, don't you? This blog has more smart people than most, but you can see how many commenters here consistently take one side of the political divide instead of independently looking through each fact. Sheep. But that's OK, more for us to shear, as long as we don't get stampeded.
Ok Comrade SS, I get it. Dems are good. Reps are evil. I'm not going to argue politics. It is pointless.
Happy? Here's a cookie.
I'm going to lay down now and have a drink or 10.
"But there is one party who has overseen the last 7.5 years, and they had an agenda, which completely disregarded the best interests of the citizens, and the troops as well."
Then don't the Dems deserve MUCH blame for abreggating their Constitutional role to King Bush. Didn't the Dems control Congress at some point in the last 7.5 years?
Sorry for biting at the troll bait. I only spoke up in the first place because this isn't the place for partisan venom.
Meanwhile, the clock is ticking.
Tick, tock. Tick, tock.
Brian writes:
You need a link to prove there were only 3 presidents between Ford and Clinton?
Wow, that is quite the comeback. You get asked a question and you respond with nonsense.
Here is a link for Budget data from 1940 to present.
Maybe you should go back to the children's table, the adults are trying to have a discussion.
Maybe you should look in the mirror.
PS: I used the Google to get this information. It's possible that you were talking about something else, but since your answer was so asinine, it's impossible to know.
Yeah, Dawg, I agree with your general point.
There is no cure or fix, just palliatives and protections from free fall.
I think something like the Dodd bailout is needed because we're not going to get a simpler nationalization, Swedish style. And I think mega infrastructure spending is needed to prevent a great depression. The best we can hope for is a long recession/stagnation while house prices continue to fall for few more years (maybe 3-7 years at slower pace).
If that happens with unemployment staying under 10% and we clean the financial system and build a new infrastructure, then I'll think we'll have done a good job with the wound we've inflicted on ourselves as a nation.
I only worry that I haven't lowered my horizons enough.
there are many more genuine, honest & caring Democrats
Like Dennis Kucinich, who cared so deeply, genuinely and honestly for his constituents as Mayor of Cleveland that he bankrupted the city. Now that's what I call compassion.
Are the JP markets closed on the 23rd ?
はい、閉市です。
Hi, mp. Did you just wake up? Your calls on the recent events have been very accurate, and very entertaining. I am curious, and pardon my forwardness here, but have you increased your net worth in the last 12 months by more than 10 times your annual spending? (In other words, have you been playing with serious money?)
Hong Kong and Singapore both down 2%+, Aussies almost 2%, Shanghi and Jakarta down apx 1%
you can be generous and compassionate, and still be a bad money manager; ask MC Hammer.
mt - "all i want you to recognize is that president bill clinton was the only president in more than a quarter century to submit and get passed a budget that was in surplus!!"
You actually attribute that pure coincidence to CLintons's presence in the white house. seriously ?
Do you remember the dotcom bubble where the NAS shot up 500% and $trillions materialized magically from nowhere. think of all the tax revenues that flowed to the treasury from stamps.com, yahoo, cisco, jdsu, msft... Did Bill corral that bubble and slow the coming trainwreck that cost most J6Ps their entire life savings, from which almost none have recovered only to be steamrolled again over their past 8yrs of gains?
Really amazing.
You DEMs are all so easily
MP
On another thread I asked Conjure to go to DC to bite Paulson hard where it hurts. His choice as to where that might be. Has the thought crossed Conjure's mind?
only 212 tonight?
not too shabby.
Corzine is a governor
alybaba | 09.23.08 - 12:14 am | #
He is now. In 2000 he was elected to the Senate.
El Cliffo writes:
there are many more genuine, honest & caring Democrats
Like Dennis Kucinich, who cared so deeply, genuinely and honestly for his constituents as Mayor of Cleveland that he bankrupted the city. Now that's what I call compassion.
~~~~
Cleveland went bankrupt because the banksters cut off their credit for not privatizung their water system ...
get your facts straight ...
"Hi, mp. Did you just wake up? Your calls on the recent events have been very accurate"
mp was long C & long USD.
Yo Brian there is a website called DailyKos. Please go there to discuss your political BS. That's where I go when I want to talk about that crap. I come to this blog to learn and read the comments because the signal to noise ratio is very low, and you are just adding static to the system.
Nice, Paulson is lubing the taxpayer up for a good old fashion ass raping and we're having a partisan mud slinging contest.
Ian | 09.23.08 - 12:17 am |
Here's the proper quote
from Al Pacino.
Now, with this, now that you're down, I'd get ready for one of those Class-A, New York-style pigfucks. You know what's coming. Now you're going to have to ask yourself, "who do you trust?" I don't know.
So many good quotes from that movie.
DIvide and conquer.
Or rob and conquer!
Patientrenter, I went to bed at 0300, awoke at 0700 and had a 45 minute nap before supper. I'm now preparing to call it a day.
As to my net worth, sorry.
From what I'm reading here and there, Joe and Jane 6pack are just starting to get concerned about it all.
Once that gets rolling;
Fear the bank run.
That will be the end
my friends.
politicians are crooks. every last thieving, soulless, backbiting one of them. except maybe Jerry Springer. who cares what party they are in? certainly not I
Kucinich wouldn't sell Cleveland's electric utilities, not their water system.
Get your facts straight, he says. LOL!
mp was long C & long USD.
bearly | 09.23.08 -
Bearly, you didn't get the memo. I got out of C months ago and have been long euro for the last two weeks.
I am now completely out of US markets and don't intend to come back for some time.
I think I'm going to ask CR to throw out a post about the NAR to get us all back together. Kumbaya.
that was me:
Anonymous | 09.23.08 - 12:32 am
<a href="http://www.youtube.com/watch?v=Y3CRnNmHpyU>Everyone play nice now!
Anybody remember the"Throw the Bastards Out" movement that Ross Perot took over for his run. It advocated voting them out until you got someone you could halfway live with. It was geting pretty big and fell apart after Perot.One could believe that it was torn apart on purpose if you lean that way.......I do!
btw - cramer was SCREAMING BUY GOLD today. I think I may sell 1/2 here, just in case this call is as good as the rest.
Brian writes:
Yes he did pay down the nat'l debt. The tech bubble helped him just a bit. Conveniently exploded when Bush took over, then 9/11...
Look my point is that we can go back and forth and back and forth and back and forth and get nowhere..
Brian
thanks
i appreciate that you recognize clinton did balance a budget whether you give him credit or not
as for attributing the balancing of the us budget to the tech bubble
wow
sure would like to se some numbers that support your claim.
but here it is pure and simple
im a fiscal conservative
dont care if you are a dem or a repub
clinton was very responsible in the fiscal catagory, even though he had a serious case of non zipper control.
several people on this thread decry talking politics
this aint politics... its economics
did this or that prez submit a balanced budget or not, period
bush should have asked the american people to sacrifice to fight this war...increased taxes, war bonds
instead he put it on the credit card...we owe china
plus the cost of the war is less than half the debt this prez has run up
but all those who appoligize for bush wont even touch that.
its simple this administration deliberately spent the gov into bankruptcy..that is their plan
they hate social programs and if the fed gov is bankrupt then either the military spending or the social spending gets hit hard
we will see which goes bust first
great ride!
cramer was SCREAMING
He also said to sell 20% of your stock holdings, and to support the bailout.
WTF?
Missed that one, bearly. Heard Liesman mention a 'reacharound' the other day, coffee came right out my nose!
bearly writes:
btw - cramer was SCREAMING BUY GOLD today.
WTF, now I'm not so sure.
Oh, yes, a post on the NAR!
Remember David Lereah? Check out the photo of Lereah and McCain smiling together from the NY Times article on McCain's campaign manager Rick Davis's work as chief lobbyist for F & F.
- NY Times
SRS ROCKED MY WORLD TODAY. GGP is teetering on the edge peering at the deep abyss.
I hope the UN laughs in Bush's face. It is the very least he deserves, and I mean the least.
joe shmoe
Oh they will, he's taking Sarah I-can-see-Russia-fro- my-house Palin with him.
I certainly accept that a blog can have a primary emphasis, but to ignore that the finance/economics that is the focus here is completely connected to political events, laws, who's in charge of what in DC, and how DC responds to lobbying by corps and outrage by the voters is just sticking half of your head in the sand.
They used to call it political economy, for good reason.
It should be no surprise that politicians of all stripes will be found to have deeply incestuous relationships with the most unsavory characters responsible for this debacle.
The largest asset bubble in the history of mankind had to fund the elected puppet-lottery.
So when the shit hits the fan, and the republicans are caught red handed, they always say,"now is not the time to place blame. we're all in this together." They don't want to be held accountable.
The past 14 years of republicans has been the most partisan in history. They tried to bring down a president, stole and election, fell asleep at the switch when 9/11 occurred despite repeated warnings, lied the country into a war, gave tax breaks to the wealthiest, ran up the largest deficit in history, and have now destroyed the financial system.
And now Brian and bearly think because the democrats have held the house and senate with slim majorities the past 20 months, this is the democrats fault.
I will say, if the democrats gain the white house and hold majorities, that they in no way try to work with this group of sordid republicans. They are the worst. Dennny Hastert and Bill Frist, Tom Delay, Newt Gingrich...those assholes deserve to rot in hell. The moderate republicans need to take their party back from the extremists who want the US to become a theocracy.
Oh man. This YouTube clip from The Devil's Advocate is badass.
Eddie Barzoon, God's special creature.
"He's the poster child for the next millenium... its buy futures, sell futures when there is no future! ... Its a little late in the game to buy out now!"
Phew.
Brian is right republicans suck, So do Democrats. You knuckleheads are going to go round and round which is worse? The republicans suck more right now and I am one (nominally). The Democrats are right behind, and will catch and surpass at some point in the future.
Did CR get linked to on Kos today for crying out loud? Did I say I was a Republican?
Nevermind, you guys are making my point for me.
"GGP is teetering on the edge peering at the deep abyss." yeah, they caught my eye today. they burnt a very small yet remarkably distinctive hole in my IRA today. I wish VNQ had more options volume.
. . .no way try to work with this group of sordid republicans. They are the worst. Denny Hastert and Bill Frist, Tom Delay, Newt Gingrich. .
Um, I hate to have to tell you this, but none of those guys are in office any more.
We're thinking similarly, Comrade TSC, but I always preferred the harder edge (really, I'd just looked up the following):
2m23sec of introspection
Plea To Extend Shorting Ban (from FT)
FT.com / In depth - Plea to extend shorting ban
for all of you who didnt sell your SRS at the end of the day, Id be up early tomorrow to make sure you dont get hosed.
in regards to the above political tripe, let me reiterate that 45% of the nation, as documented in recent pew surveys, believe that humanity is less than 10,000 years old.
obviously, this group tends to have one political orientation more than another. there's not much more to it than that.
pd130 writes:
We're thinking similarly, Comrade TSC, but I always preferred the harder edge (really, I'd just looked up the following):
2m23sec of introspection
pd130 | 09.23.08 - 12:48 am
Oh yea, most excellent. I think that was the first movie that really blew me away with its quality.
And from the NYTimes :
DEALBOOK; A Bailout Above The Law - NY Times
"A bailout above the law. "
At least SOMEONE is noticing, as much as I have to say most of the tripe coming out of this paper lately is unreadable.
I need a drink and an early night. meanwhile, I'm still hoping that Conjure pays a visit to Paulson.
Mccain Sucks, so does Obama. Both bought and paid for, can we move on?
Baca writes:
I will say, if the democrats gain the white house and hold majorities, that they in no way try to work with this group of sordid republicans.
What?!?
That's like asking one half of a buttocks not to participate in any future farts.
"most of the tripe coming out of this paper lately is unreadable"
funny how much murdoch lusts after the gray lady - but methinks when he sees her, he sees her when she was young and hot, as opposed to the current very different reality.
I take it back, I take it back!!!!
Didnt make it to the end of Sorkin's NYTimes article. Just like the rest, he is a completey moronic suckup.
In truth, Im not sure I agree with Mr. Rosners assessment of Mr. Paulsons job performance. I think he is one of the most competent Treasury secretaries weve ever had, and it is hard to imagine anyone else handling this crisis any better. His predecessors, who lacked his grounding in the world of high finance, would most likely have been like deer in headlights.
"And when Mr. Paulson says, as he did on all the talk shows on Sunday, I hate the fact that we have to do it, but its better than the alternative, I believe him. (It would have looked better, of course, if he had come up with this plan before it looked as if his former firm, Goldman Sachs, was in jeopardy.)
This is a blog, none of us actually have much say in this, beyond being able to voice our opinion via phone or fax, which many already have.
Comrade Scared Shitless | 09.23.08 - 12:19 am | # [kill][hide comment]
Wrong. You can educate those you know and meet in a clear and concise way. We had it so easy; for so long; that many began to think everything runs on automatic.
The talk down at the barbershop used to be centered on politics. Now it's economics. I've been educating the boys in a manner that looks past the labels. It took me about a year, but I've got them all tuned in now. And so it spreads...
Each suckup article I read like this just makes me more livid.
(and I missed the quote - the "in truth..." part is Sorkin's. Otherwise known as Senor Douchebag.
JimPortlandOR writes:
I certainly accept that a blog can have a primary emphasis,
Not ignoring the political factor in economics, but look up thread. It's mostly name calling. Granted bad laws etc., etc., but the actual agents of the crimes are not the politicians. Even given the effects that policy has, I don't see how the debate raging about who's the bigger slimeball helps. Besides, I have a point of view, and half of them are preaching to the choir, and the other half are spouting pure nonsense. You will note that it doesn't matter which side you I assume I am on.
Satisfying reading for those not drinking bailout kool-aid:
Clusterfuck Nation by Jim Kunstler : Falling Into Fall
JUNE 21, 2007
mp writes:
"What a mess" is a polite way of putting it. It's turning out worse than I thought it would. Everyone, principally Merrill, seems to be trying to handle all of this as quietly as possible, and I don't expect them to publish any settlement prices. Undoubtedly, the Fed has made some "suggestions" in this regard.
At the end of the day, this thing can still go out of control. And you won't hear it coming.
Personally, I'm convinced that Bear Stearns's days as a major player are numbered. This mess has severely damaged their reputation and it will ultimately cost them a lot of respectable business. If the situation does go out of control, I think they'll ultimately be viewed as the cause of it and become a pariah on the Street.
This is a good time to find a foxhole to crawl into it until everything calms down.
One final note. I'm somewhat amused by some of the observations here concerning the 'trivial' amount of money involved given the 'big picture'.
Frankly, those are the kind of comments I would expect to see near the end of an easy money cycle. Money no longer means anything because it's so easy to come by. Well, let me assure you, a $20 billion portfolio is still one hell of a lot of money and can do major damage at the margins if its liquidation is forced.
Don't forget, all of us-even Warren Buffet-work at the margins.
mp | 06.21.07 - 2:28 am | #
you know, all this talk about section 8 and above-the-law clause reminds me of an old Soviet anecdote.
Stalin summons his Politburo committee and says:
-"I have two suggestions for a discussion today. 1. We arrest and execute all Jews. 2. We paint the Kremlin purple."
Everyone looks baffled, then one member of Politburo asks:
"Excuse me, but why paint Kremlin purple?"
Stalin:
"Good, I knew there would be no objections to the first item. Now, about that color..."
Pretty good seer work, mp.
Big mama gonna write me a check
YouTube -
El Cliffo writes:
Kucinich wouldn't sell Cleveland's electric utilities, not their water system.
~~~~~~~~~~
Just goes to show what a schmuck you are.
Proof our Country is doomed:
Americans want bailout, but cost a concern - Sep. 22, 2008
15 months ago....was obvious then to any of Conjure's minions, and yet, what were we hearing from Bernanke and Paulson - "all contained"
Incompetents or Lying Thieves. Take your pick.
JUNE 21, 2007
Banker writes:
Mp,
Mostly nonsense. The idea that this somehow makes Bear less of a major player is just dumb. The First Boston-Ohio Mattress situation in the 1980's was one thing. The Salomon Bros Treasury scandal was another real threat. This? An embarrassment, but not a financial big deal to Bear. They simply don't have enough capital at risk and are still being readily funded by the markets. That's the key to these sorts of firms. As for becoming a pariah? Stop it. They ain't Drexel. As for the scale of the event? See my prior list of things that were far bigger deals than this. What is going to happen here? Same thing that happened in 1990 when the Feds blew up the junk market. Some very smart, savvy guys (in that case Leon Black) will step in, buy at a huge discount from a panicked seller and come out the other end making enormous returns. I'd be Dave Tepper of Apaloosa is in the room as are the guys from Cerberus. But those are simply educated guesses.
Banker | 06.21.07 - 2:52 am | #
Federal Trade Commission, Plaintiff, v. EMC Mortgage Company, a Delaware corporation, and The Bear Stearns Companies LLC, a Delaware limited liability company, Defendants
For Release: September 9, 2008
Bear Stearns and EMC Mortgage to Pay $28 Million to Settle FTC Charges of Unlawful Mortgage Servicing and Debt Collection Practices
The Bear Stearns Companies, LLC and its subsidiary, EMC Mortgage Corporation, have agreed to pay $28 million to settle Federal Trade Commission charges that they engaged in unlawful practices in servicing consumers home mortgage loans. The companies allegedly misrepresented the amounts borrowers owed, charged unauthorized fees, such as late fees, property inspection fees, and loan modification fees, and engaged in unlawful and abusive collection practices. Under the proposed settlement they will stop the alleged illegal practices and institute a data integrity program to ensure the accuracy and completeness of consumers loan information.
Like other companies that send a bill, mortgage servicers must make sure that the amount they say is due really is the amount due, said Lydia B. Parnes, Director of the FTCs Bureau of Consumer Protection. Consumers have the right to expect accuracy from the company that collects their mortgage payments.
As stated in the FTCs complaint, Bear Stearns and EMC have played a prominent role in the secondary market for residential mortgage loans. During the explosive growth of the mortgage industry in recent years, they acquired and securitized loans at a rapid pace, but they allegedly paid inadequate attention to the integrity of consumers loan information and to sound servicing practices. As a result, in servicing consumers loans, they neglected to obtain timely and accurate information on consumers loans, made inaccurate claims to consumers, and engaged in unlawful collection and servicing practices. These practices occurred prior to JP Morgan Chase & Co.s acquisition of Bear Stearns, which became effective on May 30, 2008.
JUNE 21, 2007
Sebastian writes:
One of the things that the bears seem unaware of is that holding "illiquid, esoteric" securities is not only not a new phenomenon, but stock mutual funds do it, too, and it's been going on for years.
A fund might hold a large position in a thinly-traded stock with no idea what the "mark-to-market" price might be if it suddenly had to unload a big piece of it.
However, these things don't come home to roost until times of significant economic or financial stress...which we don't have, however often the MSM screams that we do.
Sebastian
Sebastian | 06.21.07 - 11:36 am | #
Mock- I thought it was common knowledge that the reason Clinton had a balanced budget was because he had a Republican Congress.
Not taking sides here. Just saying....
But hearing the evil (as us good Democrats were wont to call him) Newt Gingrich come out squarely against this bailout on FOX today, makes me think that perhaps the comparative fiscal sanity under Clinton DID have more to do with the Republican Congress than him.
"... the critical part of these institutions to preserve is the loans and other credit extended to worthy borrowers. And just because you are rescuing that part of a financial institution, it does not follow that you also have to rescue the shareholders of that institution or the senior management of that institution. Where the rescue is necessitated because of losses I would argue that you don't." Richard Vague, co-founder and former CEO of First USA Bank and former CEO of Juniper Financial at Guest Post by Richard Vague: Should We Bail Out Large Corporations? - The Washington Note
A little thread music for all you partisanistas...
YouTube - Ball of Confusion
BTW, do you know what time it is?
mp,
as much as I respect your foresight, you must admit here that both you and Banker had a chance to be right.
The credit bubble blow-off is mostly a psychological thing, and the trigger could be anything, and could come later. Trigger happened to be Bear, but it didn't have to be.
Many people waited for the peak credit event for many, many years - they were wrong on what the trigger would be so many times, that they did not dare believe again even after Bear fiasco.
wow mp- that first historical quote was pure gold. Then I thought about your mood now and I got really depressed.
For newbies here, mp and Conjure Bag usually call the macro trends and tell you to do your own damn due diligence.
both you and Banker had a chance to be right.
Yes, I'd say 97% to 3%
And there's still a chance we'll all get ponies...
The world is changing:
"The Americans said, 'We Won't'": Merkel Says Washington Helped Drag Europe into the Credit Crisis - SPIEGEL ONLINE - News - International
While her finance minister said German banks would not need a similar bailout, Merkel said the world community should react by forging international agreements that could be voluntary rather than anchored in law. "The crisis on the international financial markets shows us that you can do some things on the national level, but the overwhelming majority must be agreed to on the international level." Instead of codifying these deals in law, Merkel suggested binding agreements between major economic players. "This is about greater transparency," she said.
And at Jessie's:
Putin Joins China in a Call for a New Global Financial Structure Not Based on the Dollar
Jesse's Café Américain: Putin Joins China in a Call for a New Global Financial Structure Not Based on the Dollar
The beginning of the end of the Dollar hegemony.
I ve heard an interview on NPR. Former majority leader, mr G was really upset about plan of the government to pay premium for distressed assets. I think he mentioned info leaked to one of the financial blogs. (probably Naked C ).
Anyway, you guys did much more to make some sense of everything then anyone else in the media or probably the country.
So thank you.
Also for those of you who called your Senators, thank you x 2.
Yes, I'd say 97% to 3%
Everyone is a genius in hindsight.
Please understand that not only future events are probabilistic, but so are the past ones. In a sense.
"Trigger happened to be Bear, but it didn't have to be."
At the time, I said the failure of the two Bear Stearns hedge funds was the "Kreditanstalt Event."
Are you going to make me look it up?
I just wish that all the Repub. Dems. and Independents would become Citizens and fight all the evil rotten people on Fall Street and in Washington.I'm glad to see the anger here,other sites and on the streets while I deplore the conditions that have caused this anger.Even when times are good,things could be a lot better.Now that times are not good and look to get a lot worse our goverment and our finance world are going to have to be changed and if not changed for the better,we,our kids and grandkids are truly screwed.I'm 66 in pretty good shape and can live out my life corfortly,but I don't like being in a world that is so unfair and unjust to so many.Plus it just plain pisses me off to be Fucked over in small and big ways.This isn't the way things could or should be......Rant over. I'm not drinking(just toking) so I can't really get wound up.
So I expect that the bail out bill will be on Dubya's desk by 7:00pm Pacific tomorrow night. If not, another repeat of last wed. night?
private funds are now allowed upto 15% voting and 33% total equity in banks.
i guess part of the plan is that after the first round of auctions, many banks will have to mark to market and need recap, and private funds and perhaps the new bank holding companies will jump into attractive looking positions ?
didnt i see a protest against mark to market in WSJ today or so ?
RE...calling for is very easy, especially for Putin. Actually implementing involves tremendous pain for the US & China.
Actions speak louder than words. I'll believe it when I see bond yields increase to double digits.
At the time, I said the failure of the two Bear Stearns hedge funds was the "Kreditanstalt Event."
Are you going to make me look it up?
No, I remember you said that.
I am just saying you could be wrong about it. Not sure about probability, but it was non-zero
DRChaos is Krugman.
Anonymous writes:
Big mama gonna write me a check
YouTube - ? v=mbD62gNi9WE
Thanks. I enjoyed watching Rep. Kapture blow her stack.
Puts one in mind of the late Paul Wellstone, who last blew his while trying in vain to oppose Sen. Biden's little bankruptcy reform gifties to MBNA. Ah, Paul; if only you were here to see Credit Card Joe now!
Populist energies in today's Democratic Party are short-lived. I trust the good lady Kapture realizes her anger is merely decorative, a shade of crimson helpful as camouflage while her party leaders make ready to do Wall St.'s bidding.
Banker had tremendous faith in the system and his cronies, but are you telling me that the CDOs and MBSs that we're worrying about would have ever paid off? That the downturn in RE and CRE wasn't going to happen? That the leverage wasn't poised for the disaster? That all the events that have transpired are just bad luck?
The only reason I gave the 3% is because of the chance of a asteroid strike or fusion technology breakthrough or WW III. Something big enough to reshape the world.
Is it time for the Bat-signal in Gotham???
"I am just saying you could be wrong about it. Not sure about probability, but it was non-zero :)"
Sorry. Conjure and I have been pissing on each other this evening.
hey, I am still waiting for Chinese to stop supporting dollar. And I think the current mega-bailout will be the trigger, because US leaders will not be able to swallow the bitter pill of selling good assets to China (to cover debts). But I may be wrong.
After all, Setser was waiting for it since 2003 and he gave up hope.
so what is it, kids? uso, tlt, gld, fxe? where's the best move going to be when the inevitable flush happens?
Guys, mp has you stone cold. He only makes macro calls precisely because there's so much "system noise" that even a correct micro call has a better than even chance of being swamped by the tide.
"Is it time for the Bat-signal in Gotham???"
Na. Gotta wake up early and I'm a bit buzzed already. I might be up for it tomorrow night tho.
RE, since we're digging up old stuff tonight, I labeled it the "crisis of credibility" a while back. I don't claim to be the first, as it's a somewhat obvious idea.
But it's easy to get fixated on the details of this or that bailout and miss the bigger picture -- not just how we screwed ourselves, but how the world surely views us after Iraq and the credit/mortgage/finance crisis. We have no credibility left.
Only a massive shakeup at the highest levels might help show the world (and ourselves) we've learned from our mistakes. Could Obama deliver this? I want to believe, but very much doubt it.
"Banker had tremendous faith in the system and his cronies, but are you telling me that the CDOs and MBSs that we're worrying about would have ever paid off?"
No. In fact, I argued they wouldn't pay off.
Is there a problem here?
The Chinese are trapped... grow at 10% plus a year or deal with an unstable populace 1B+strong.
They wont roll over on the US.
GREEDOM, Deal with it. I don't know about you, but if you add up the 85b. for AIG, the 15b for ndy Mac, the 700b for the bailout, Freddie, Fannie, why not take the 700b. and push it out of a C-130 in $10 bills over populated areas? Cut out the middle man, and we will be able to fix this mess. Paulson can get a loan for the 700b. if he really needs it.
Actions speak louder than words. I'll believe it when I see bond yields increase to double digits.
I agree but much more is happening. This is becoming an avalanche of criticism that will result in huge change internationally.
From Germany (you can run it through your translator, I am too tired now):
Hamburg - Es ist kein Hilferuf, es ist ein Hilfeschrei: Auch andere Staaten sollten wie die USA faule Kredite aufkaufen, forderte Finanzminister Henry Paulson. Die US-Regierung stellt deshalb 700 Milliarden Dollar Steuergeld zur Verfügung und hofft, mit dieser Maßnahme das Finanzsystem wieder zu stabilisieren. Doch die deutsche Bundesregierung stellte sofort klar, was sie von dem Aufruf hält: nichts.
Zu Recht, finden Wirtschaftsexperten: Schließlich werden die Verantwortlichen der Krise, die jahrelang hohe Gehälter und Boni kassiert haben, durch die Milliarden am Ende nicht bestraft, "sondern genauso behandelt wie alle anderen auch", sagt Carsten Meier vom Institut für Weltwirtschaft in Kiel (IfW). Mit der Finanzspritze hilft die amerikanische Regierung allen auf die Beine, sich verspekuliert haben - und verhindert so eine Bereinigung des Marktes.
This kind of sentiment is all over the world. Just read the international papers. With much more hurt on the way the blame game will only get louder.
traunches... the world, especially the EU, is facing the same situation. their banks made the same idiotic loans. We just happen to very good at selling our toxic crap to others.
I'm losing interest in comments lately.
Too much play. Where's the beef ?
.
mp- you're tired. Go to bed. I forgot to quote Missed Information to give context to the response, but if you were your usual self, you would have caught it.
Where is your beef?
After all, Setser was waiting for it since 2003 and he gave up hope.
I remember that. After reading him for a while in 2006 and 2007 I concluded there is no reason for China to stop the "mother of all vendor finance deals" until the US is flat broke. The internal demographics leave it no choice.
sdtfs writes:
Banker had tremendous faith in the system and his cronies...
That's what made him so valuable here. He was wrong, but he represented the "insider". He thought the house of straw was brick, but even more importantly he wasn't a kool-aid drinking dittohead. I had the feeling that he had some part in putting the overall structure together, and thought it sound.
but are you telling me that the CDOs and MBSs that we're worrying about would have ever paid off? That the downturn in RE and CRE wasn't going to happen? That the leverage wasn't poised for the disaster? That all the events that have transpired are just bad luck?
no, what I am telling you is that at the time, the housing prices just dipped down for the first time. We, the CR crowd, called the peak. Because it was sensible to call it.
But with that small blip of data, it cannot be possible to identify peak with 100% certainty. We could not know with 100% certainty that bubble lending machine did not have another go in it - after all, you can always invent something even more devious than NegAm Interest-Only mortgage. And then, the splurge could continue for another year. Or two. I say, we were just lucky that at the time Congress did not approve some weird 200 billion program to give free ponies to all new homeowners. I agree that was not very likely, but I am just giving an example.
are you kidding me, I agree the idiocy was widespread, but the epicenter was here in the US.
I should have also mentioned the Kyoto Protocols. There was a general attitude of "screw you, but send us your money." Like I said, no credibility. But we do have the strongest military. Let's see how long that lasts when the belt tightening really starts...
RE,
Your point is valid and well taken. However the UK, Spain, Italy, Australia, etc. cant blame us for a massive decline in house prices. They loved it when the prices were skyrocketing... they dug their own graves (while buying some of our shit along the way).
the world, especially the EU, is facing the same situation. their banks made the same idiotic loans. We just happen to very good at selling our toxic crap to others.
BS. No they are not. They made lots of bad loans but securitization in Europe was nowhere near the level of the U.S. This isn't really an issue of mortgage loans but about leverage and securitization. Huge difference!
Marcie Kaptur was one of only 3 Dems that voted against the Fannie/Freddie bailout.
I called her the next day, thanked her profusely on behalf of all Americans, congratulated her for her courage in standing up to the rest of her Party.
Then suggested that she and the other 2 Dems join up with the 149 Republicans that voted against the F/F bailout and form a NEW Party.
People who have tried to reach her this week about this new bailout have gotten the message that she is "out of her office this month".
And if it seems like I'm applying an unequal standard to the US, I am. As the remaining superpower, we can lead by example or force, or some combination.
The balance shifted too far towards force, and the examples have mostly been of the "screw you" variety I mentioned.
EEngineer: I didn't know you hung out at barbershops.
mp: Well, if Conjure suggests getting out of dollars, I'm mostly there. Reviewing my own stuff, I'm up several percent over the last few days, especially today. Honest to god, I'd be happy with zero and just keeping my principal at this point.
I don't why anyone would need to ask your net worth. I've always assumed that someone of Conjure's age and advanced wisdom has a pirate chest in bullion and gold somewhere in the world.
Can someone point me to the Money Market outflow charts again? I don't think the Fed has enough to backstop all of them, either. Not even if the cutoff date was Friday the 19th, as advertised.
I am presently cheered by knowing that there is at least one other person in this country that thinks we should talk about how to PAY FOR THIS CRAP.
The Big Money | Home
tranches of lumpenproletariat | 09.23.08 - 1:18 am |
ya think!
sdtfs, my apologies. It has been a long day and I'm done.
Gold + TIPS + Swiss Francs + Arms: 1 hidden, 1 carry + CAN$ + beans and rice in quantity + good radios + ...........
JT
VA7JTZ
re: sdtfs , mp
Please don't take it as if I am picking on you - after all I have always agreed with mp and pretty much all my calls were correct too.
But I have the humility to understand that all of my calls could also be wrong - or more likely, off by a year or two.
MI- Agreed. I couldn't understand how the world was continuing to stand for years, so I don't give my predictions much credence.
But as a lurker, watching the debates that people who actually knew things engaged in, I gave much more weight to mp. And that was another reason to appreciate Banker, he did highlight the necessary points. I don't believe he understood how much corruption there was within the system.
Government debt is already 53% of US GDP, but thats trivial beside business debt at 72%, household debt at 98%, andmost toxic of allfinancial sector at 112%. Not all of that private sector debt is toxic, but even if half of it were, a government attempt to paper over the crisis would triple its accumulated debt.
Welcome aboard the FF Titanic | Steve Keen's Debtwatch
Hold on a minute, let me get my calculator out.
You guys really don't understand what's going on? This isn't about Reagan, Clinton, or W. It's about compound interest. And we are done. We are going to reset, one way or the other.
RE,
From a systemic view you are correct. My point is the average EU man on the street is feeling pain because of the decline in housing. Very much the same as here, at least for now.
90% of the worlds voting population has no idea about securitization.
The ignorance of most of the people I interact with is amazing. No one gets the fact we are in deep shit.
good night all.
I loved having Banker here. He was such an optimist. When banker finally started folding,and remember, he ultimately did, it was clear the situation had reached the point of no return.
People like that are very valuable guages of what stage we're at.
I saw a 20/20 segment a few months ago about people who were readying up for Armegedon -type times. They were attending a week long "camp" (lol) where they were being taught how to survive without all the modern American niceties.
One of the guys said he was a former Banker. Our Banker? hmmmm.....
Banker made the call on Northern Rock. Way ahead of time. From Europe as I recall. On vacation he said he was.
You guys really don't understand what's going on? This isn't about Reagan, Clinton, or W. It's about compound interest. And we are done. We are going to reset, one way or the other.
oh yes, we do we do...
Got permanent resident card in a "safe" country two years ago.
Just timing my move now...
Feels like playing with fire, but I like it hot.
this damn blog has kept me from my homework all weekend. im tearing myself away. thanks for getting this thread back on track. good stuff (you know who you are)
costco trip tomorrow. beans and rice. whiskey.
MLM-
I really really hope that you are right and we are going to reset - no matter what this stupid government and Paulson and the Fed do.
The more they try to NOT push the reset button, the more terrified I get.
WaitinginPNW,
Good on Kaptur. Pity her resistance is so useful to her complicit party leaders as a smokescreen. An angry oddnik here, a troublemaker there; meanwhile the bosses get down to business.
I do like the idea of schism in the parties. If there's a big enough bust, perhaps we'll get lucky enough to see the rotten duopoly upended.
Banker was way cool.
He was never really wrong, he just tried to caution people from making hasty conclusions.
When it became obvious that hasty conclusions actually turned out correct, he was the first to depart for banker-dome.
I hope he still watches over us
Missed - Thought I had about 18 months as of this summer. I'm now figuring 6.
waiting - would be nice to have someone in the government wake up and realize that pouring the last of the U.S. credit card balance down the rathole is ill advised. They're going to need that money.
Good night all.
gnite HC
The ignorance of most of the people I interact with is amazing. No one gets the fact we are in deep shit.
I'm not surprised. I was one of them. When I found out about 80/20 loans I was puzzled why they weren't considered 100%. Then I found out about stated income and my head spun. I accidentally stumbled onto the blog TheMessThatAlanGreenspanMade and read it because I thought it was a joke. It whetted my curiosity and led me to CR (with the forest scene.) I still don't have a rigorous understanding of this stuff (and I never will), but I hang around for CR's explanations, Tanta's writing, and a few of the commenters.
Dear folks.
I have been following this and previous threads for about a week and also thinking about what is happening. Many of you think that Paulson and Bernanke have been following an agenda. I do not think so. They are in panic mode.
If you look at what they did in response to the Bear-Sterns unraveling it seemed as if they were acting to rescue the investors.
But if you look at what they did in response to the Lehmans collapse they simply let them fail.
Next they responded to the AIG crisis by gutting that company.
In response to the market reaction, they then jumped back into bailing out the whole market.
They have no plan. They are as cluless as we are. Please calm down. Our leaders are as clueless as we (I) are (am).
Exact same story here.
You know there is something wrong in the world when the "villian" in a 80s movie about wall street seems to a more decent human being than a CEO of an investment bank.
YouTube
- Broadcast Yourself.
Does the 700B clean up the
62T in counterparty leverage ?
.
sdtfs | 09.23.08 - 1:45 am |
same story
Dodd plan (Politics, Political News - POLITICO.com than Paulson, but so is doing nothing...although doing nothing may still be better than Dodd's
I still like Rep. Sherman
TPMMuckraker | Talking Points Memo | New Democratic Bailout Proposal
I don't know what the chances are that Sherman's would see the light of day
Although still nothing about paying for it...
Call me hopeful and naive...everybody does
villain.. oops.. typo
90% of the worlds voting population has no idea about securitization.
at my 20th reunion in the summer of 2005 the table talk turned to the housing market. I was talking about securitization then -- how banks were reselling loans to Wall Street to 'reload' their capital -- which I had only recently learned from this blog.
Everybody at the table had a lightbulb go on, understanding that new dynamics were driving the market compared to the 80s or 90s.
Does the 700B clean up the
62T in counterparty leverage ?
Uhh, hold on a sec, let me piss on this raging inferno and get back to you with the results.
re: PeakVT
I remember that. After reading him for a while in 2006 and 2007 I concluded there is no reason for China to stop the "mother of all vendor finance deals" until the US is flat broke. The internal demographics leave it no choice.
Well, not quite. The real argument is that at some point China would not be able to support the dollar, no matter how much it wanted to.
The reasons are many, I am sure you read about them on his blog. But Chinese managed to keep all their balls in the air, and they still do... but they look more tired by the day - even magicians need a rest.
Many of you think that Paulson and Bernanke have been following an agenda. I do not think so. They are in panic mode.
I sense that we can come to an agreeable compromise here. Paulson and Ben are following an agenda, while being in a panic mode.
edd: speaking as one of the worst empty commenters, I agree.
Here's some meat:
"The March On Wall Street"
(Well I made that title up, but that's what it is, in essence)
No Bailout for Wall Street -- Protest on Wall Street this Thursday at 4pm! | Naomi Klein
At the least, it will show up on the news and make the rest of the country realize that something very wrong is happening and maybe they should think about voting with their feet and wallets. It could show the rest of the world that we have enough backbone to reject the excesses of our very unamerican cabal.
Tanta & CR, if you're in the neighbourhood on thursday, please stop by Bowling Green Park at 4:00 PM
bowling green, manhattan - Google Maps
edd browne writes:
Does the 700B clean up the
62T in counterparty leverage ?
What does that mean?
90% of the worlds voting population has no idea about securitization.
Ask them about the shadow banking system.
Ask them what the wars in the middle east is really about.
Ask them about the empire.
Ask them if they really benefit from these ideas and systems.
And follow the money to get the answers.
Those responsible for the global financial crisis should be punished, French President Nicolas Sarkozy said Monday, calling for more world leaders to recognize the seriousness of the situation.
"Today millions of people around the world are fearful of losing their nest eggs, their apartments, their savings in banks," Sarkozy said at a dinner where he was awarded the Elie Wiesel Foundation's Humanitarian Award.
"We must provide them with clear answers. Who is responsible for this disaster. That those responsible will be held accountable and punished and that we government leaders will assume our responsibilities," he said without specifying those responsible.
"If we don't speak clearly, we won't create a stable world," he said in front of more than 800 guests including many French and American business leaders.
"Maybe the most helpful thing that could be done today is if world leaders accepted the seriousness of the situation and spoke frankly on these topics about which one should not compromise," said Sarkozy.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Yeah Baby! That's what is missing with any plan these guys come up with, these clowns need to go to prison at minimum and unless a bunch of them do trust will never be restored.
The dollar slide continues.
Currency changes are like the slow boiling of a frog. Just a few pips an hour, 24 hours a day. Before you realize it, you are cooked.
$1.75 Euro by XMas? Do I hear $2?
$2.50 Sterling?
Anonymous | 09.23.08 - 1:58 am |
Do you think they were serving freedom fries at that dinner?
ok, maybe a little less hopeful
Daily Kos: Things Become More Serious
USDX:
INO Equities Stocks Indexes - U.S $ INDEX (NYBOT:DX) Price Chart and Quote
Paulson and Ben are following an agenda, while being in a panic mode.
"Instinct" can be substituted for "agenda", which grants them good faith but doesn't change the result.
Freeman Bevan -
Thanks for that, I was about to hit the sack. Billmon is probably my favorite writer on the internet.
Comrade Canadien avec popcorn writes:
USDX:
INO - (N...AX:) Price Chart and Quote a=50
That looks like gold's chart when it pulled back to around 750.
ite all
Four days until the next bank failure. Good night & sweet dreams all...
Freeman Bevan
Looks like Billmon is a CR regular!
Taxpayer Anal Rape Program
Seems like so long ago, good times!
My own modest success:
El Cliffo writes:
IndyMac is nothing. Der Spiegel says: IMF to Audit Fed.
"Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.
"As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.
". . . Roughly two-thirds of IMF members--but never the United States--have already endured this painful procedure."
They will be finished in 2010.
(via George Ure)
El Cliffo | 06.30.08 - 11:15 pm | #
sdtfs writes:
Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.
Wouldn't it be cheaper to just read CR for the next year? I mean stress test? I doubt if their worst case scenario is going to be so much worse than the reality.
sdtfs | 06.30.08 - 11:18 pm | #
Woohoo! I'm a prophet, too!
I thought it was going to be a virtual test, I didn't know they were going to it for real.
The real argument is that at some point China would not be able to support the dollar, no matter how much it wanted to.
The reasons are many, I am sure you read about them on his blog. But Chinese managed to keep all their balls in the air, and they still do... but they look more tired by the day - even magicians need a rest.
China has a looming water crisis , as well. It will be be their biggest issue in 10 years.
Woohoo! I'm a prophet, too!
You wouldn't say that if you knew what history does to prophets.
The appropriate solution is not for the government to replace the bad assets with public money, but rather for the government to execute a receivership of the failed institution and immediately conduct a whole bank sale selling the bank's assets and liabilities as a package, but ex the debt to bondholders, which preserves the ongoing business without loss to customers and counterparties, wipes out shareholder equity, and gives bondholders partial (perhaps even nearly complete) recovery with the proceeds.
Hussman Funds - An Open Letter to the U.S. Congress Regarding the Current Financial Crisis - September 22, 2008
We'll be wishing we had listened to advice like this in a year.
Night all.