From the Buiter article Nemo linked: It isnt even regulated at the Federal level at all. Insurance in the US is regulated at the state level. So a financial institution that is large enough to cast a significant global shadow is regulated by some provincial official in New York State. I suppose its some consolation that AIG isnt registered in Alaska.
wtf, why don't they grow a pair and actually follow through for once. They set a decent precedent yesterday, and follow it up with this bs that makes all the fallout from Lehman completely pointless.
(acceptance speech):
I'd like to thank my agent, and all the helpful people at Calculated Risk who allowed me to understand finance. But most of all, I'd like to thank Misean for lending me his tinfoil hat. It allowed me to excel, especially by making me thin I'd changed my gender for a while.
"The person gave no timetable for reaching an agreement or estimate on how much money New York-based AIG would need. New York Fed spokesman Andrew Williams declined to comment."
This is going to be a replay of Gasparino and the MBIA bullshit...trot this sucker out every time they need to pump the market.
FDIC Chairman Sheila Bair reiterated that more than 98 percent of the banking industry is well capitalized, which is the government's highest capital category.
Bair said in a statement that the FDIC does not comment on specific open and operating institutions.
"We are closely monitoring the situation and have taken steps to mitigate any impact on insured institutions that may be directly affected by Lehman Brothers bankruptcy filing," Bair said.
Once again, didn't AIG move their incorporation home to the Bahamas a few years back to screw America out of some tax dollars? And now they want me, and you, and evryone else to pony up? WTF?!
FDIC Chairman Sheila Bair reiterated that more than 98 percent of the banking industry is well capitalized, which is the government's highest capital category.
Dammit Sheila, it's the other 2% that we're worried about!
Spec, I called something, but really thought we'd get the rate cut too. Perhaps they felt that with a big bucket, they wouldnt need the cut and it would just distract from the real game. Sadly, today, I did not take my own advice and did not bet accordingly. I was too scared, and decided to mostly watch. I did keep my airlines though but that game is about played. Missing the party today is ok, I just look back to yesterday, which was my best trading day ever.
FDIC Chairman Sheila Bair reiterated that more than 98 percent of the banking industry is well capitalized, which is the government's highest capital category.
That's why noone wants to mark to market ... it reverses the numbers ... Enron bookkeeping is alive and well on Wall Street
I called Treas. Those idiots told me that my Mom's collectable plates "have no real value." Haha! Idiots. The Norman Rockwells alone are worth BANK. I'll call back in two weeks.
Nemo Wrote:
"I am with Willem Buiter. If they do this, it should require very good collateral and carry a very punitive interest rate."
And they must terminate the CEO, CFO and BoD...the whole cluster of f*cktards. After what happened to the monolines, these asshats had NO excuses not to perform a sustained de-leveraging of their balance sheet.
"You got 15 minutes to clean your stuff, pleasure not to see ya ever, biatch, this way please"
I have to wonder if Fed is anticipating an emergency meeting with the result of lowering the rate in the next 4-6 weeks. It seems we are on a brink. Again.
If AIG is bailed out by the FED the deal should include them moving corporate back into the United States.
If a private corporation is bailed out by the government then the shares of that company should be distributed to the taxpayers.
The government has demonstrated that it is incapable of running an organization profitably (itself) or even managing basic finances (it's own). No reason then not to hand these companies over to the taxpayer that they work for.
For the week, what other negative material news regarding the financial sector are out there? We just had 3 days full of really bad news to digest. Anything else? Next targets as suggested by Prof. Roubini are GS and JPM and MS?
"...Lehman Brothers Holdings Inc., the securities firm that filed the biggest bankruptcy in history yesterday, was advanced $138 billion this week by JPMorgan Chase & Co. to settle Lehman trades and keep financial markets stable, according to a court filing...The money was repaid by the Federal Reserve Bank of New York and is ``guaranteed by Lehman'' through collateral of the firm's holding company..."
Yeah, a $138B loan from the Fed, guaranteed by Lehman's junky assets. Lovely.
the reality is that a bailout of AIG solves almost nothing. All those losses are still out there on the books, and AIG is just one big fish, with many more biting at the Fed's hooks. Just relax, wait a bit, and watch skf for a re-entry point, coming soon to a theater near you.
these guys at the fed, wow they are smart..in 24 hrs, they have staged a turnaround in sentiment that i simply cannot believe. i would imagine the PPT bought stocks all morning to stave off another 500 point downtrade so they wouldnt have to make a panic ease this afternoon..them not easing tells the mkt that maybe things aint so bad out there.brilliant manuever..and they keep the dollar from falling back into a decline by not easing today...it seems like the mkt thinks aig is saved somehow, all of a sudden too...
AIG rejected a private sector plan which would have meant giving up control. In other words no rewarding bad behavior.
So what we have here is rewarding bad behavior without asking the AMERICAN taxpayers (again), creating more irresponsible moral hazard, and setting up expectations that if you can whisper in the ear of the RIGHT person you get a bailout/loan/gift certificate.
There is no logic at work here and the asshats in charge are making it up as things go along as we race toward the bottom. Sound familiar? Like 8 years of familiar? Like everything was "contained" familiar?
So why not just have a big conference call with everyone deemed to big to fail and ask them how much they need and be done with it. Let's just empty our commonweal into the private pockets completely. Who needs to think about ordinary people with ordinary lives when corporate and government elites have yachts and vacations houses to consider.
this is just BS. makes lehman's fall pretty pointless. i say let aig go the way lehman went if they can't find private capital. we're going to have to deal with this sooner or later, this is not just a "liquidity" crisis, as bear and lehman have proved.
un autre Canadien avec popcorn writes:
It's not a bailout. It's a loan, and as such will be repaid with interest on the day it is due.
It's not a bailout or a loan. It's a rumor, and it's available to anyone with Charlie Gasparino's number on their cellphone.
I'm not quite sure how Charlie's repaid, though. Cash on delivery? A paypal link on the CNBC website? A quick call to his broker to frontrun the rumor?
This is a casino. Pure and simple. J6P has no reason to be in it anymore. Investment is dead. This is nothing more than a huge charade of free markets.
Even if AIG gets the loan, they still have to liquidate assets to cover the capital requirements that the loan would cover, right? So in the end the only point in providing a loan is to prevent cascading cross defaults, not "rescuing" AIG.
This is a casino. Pure and simple. J6P has no reason to be in it anymore. Investment is dead. This is nothing more than a huge charade of free markets.
It's kind of hard to keep up the fiction that we have free markets when the Fed is the only market participant, isn't it?
anon writes:
For the week, what other negative material news regarding the financial sector are out there? We just had 3 days full of really bad news to digest. Anything else? Next targets as suggested by Prof. Roubini are GS and JPM and MS?
anon | 09.16.08 - 3:19 pm | #
JPM will survive. They have depositors' money to play with.
Of course Paulsons going to bend over and take it right in the ass:
"However, a Treasury official told CNBC that the comments of Treasury Sectary Hank Paulson on Monday still stand.
On Monday, Paulson had said, "We do not take, and and I don't take, lightly ever putting the taxpayer on the line to support an institution ... Don't read it as no more; read it as that it's important, I think, for us to maintain the stability and orderliness of our financial system. Moral hazard is something I don't take lightly.''"
maybe you are over reacting here. Upto now the credit crisis has been a standoff with nobody wanting to mark to market and get on with the business of cleaning things up. And instead of being bankers they have just been wankers whining for a public bailout. So the pressure had to be put on.
While AIG exists even fewer marks need to be made.
On the other hand if AIG does not exist it creates mayhem for now.
Its a bit like Dirty Harry:
"I know what your thinking. Has he fired 6 shots or 5? Well to tell you the truth punk in all of the excitement I am not sure myself. So whats it going to be punk? are you felling lucky punk?"
Goldman Sachs Group Inc. and JPMorgan Chase & Co. were working with AIG to determine how much the insurer needs, said two people familiar with the talks yesterday. Goldman has helped the Fed appreciate the effects that an AIG collapse would have on financial institutions, the first person said.
The irony of the financial planning services AIG is touting and its own precarious financial health is overwhelming. I almost died laughing when I saw commercials during the Olympics encouraging people to trust AIG with their finances. Regardless of whether AIG manages to somehow survive the week with a bail-out, I wonder just which hapless consumers would feel comfortable doing business with them ever again?
But maybe the US treasury can write a stimulus check to all tax-payers, that can only be redeemed by purchasing AIG services. Now theres a good business strategy.
So the plan now is to induce ridiculous volatility, give Wall Street traders the opportunity to get rich quickly on OPM, then dump the scam on J6P and anyone stupid enough to leave their 401k money &/or pension fund in the market.
U.S. Mortgage Rates May Wreak Further Havoc After Libor Climbs
By Kathleen M. Howley
Sept. 16 (Bloomberg) -- The biggest jump in the London interbank lending rate in seven years could wreak further havoc on the U.S. housing market and there's nothing the Federal Reserve can do about it.
I wonder how they keep their investment bank deal information separate from their trading desks. Whats to stop one side from telling the other what to do.
thx energy econ - that's the TED spread at work - happened yesterday actually, but we were all busy ignoring its impact on housing refinance. Just might matter for all the coming resets a wee bit, ya know?
"I wonder how they keep their investment bank deal information separate from their trading desks. Whats to stop one side from telling the other what to do."
Yeah, how it would hurt GS, GS only cares about GS
And if I recall Paulson (and some Bush flunkies) are former GS? Right? Hmmm...wondering if these boys are thinking about coming home to mamma soon (say Jan '09) and making sure mamma's house is still standing? Family first. Family values.
Chief Executive Richard Fuld has been invited to testify before a House of Representatives committee about "regulatory mistakes" and "financial excesses" that led to Lehman's bankruptcy filing.
The House Committee on Oversight and Government Reform asked Fuld to testify on Sept. 25.
Asked whether the government should provide a bridge loan or some other support for the company, which faces a liquidity crisis, Alabama Sen. Richard Shelby told reporters, "Absolutely not ... I hope that they will not bail out, or get a bridge loan, to AIG."
He added, "Where do you stop? Where do you draw the line?"
I ate some of that carrot cake, and check it out: if you take today's Dow chart and rotate by 180 degrees the plot of the opening bell through 1:50, it totally matches up with the plot of 1:50 through right now.
Oh wow, this is like that drug trip I saw in that movie while I was on that drug trip.
am I the only one who thinks AIG should be considered for Federal assistance? Jail some of the Sr. Management and Board for fraud and racketeering, Yes. But, can the authorities, and financial system handle an unwind as messy as AIG; and a panic as one of the largest insurance and pension providers face-plants? I don't think the state insurance funds have sufficient funding.
"Why can't AIG just get this loan in the marketplace?"
Sorry, no one can loan in the market foe the moment. They really do not function. The spreads are going ballistic.
And AIG is little special, even if bailouts are not my cup of tea. AIG is the worlds largest insurance company, and if you think that the banking is too inbred and interwoven, you ain't seen nothing yet, before looking at the insurance world.
AIG has balance sheet of over 1 trillion and operations in 130 countries. If it goes, there won't be many insurance companies left after dust settles.
That's probably true, unless you begin breaking up AIG into it's parts. Crap over here, worthless. Good stuff over here, gets sold at a discount. Life goes on. AIG ceases. Again, no one has indicted the insurance-side--it's all the other investment divisions that are in trouble.
The pain that would be inflicted by AIG going bust is a feature, not a bug. The memories, if severe enough, would ensure at least forty to fifty years of reasonable corporate management, as was seen after the Great Depression. This generation has already stolen so much from then next few, the least we can do now is bite the bullet and give our children the overwhelming example of what a deadly brew greed and incompetence really are.
G-H-, I think that the market crashes when WaMu gets taken over.
Yesterday was a big down day, but the volume was not exceptional.
When WaMu gets taken over by the FDIC, then folks will panic, moving money out of the stock market and into bonds. That will cause the crash. The PPT cannot stand up to panic-level volume.
AIG has balance sheet of over 1 trillion and operations in 130 countries. If it goes, there won't be many insurance companies left after dust settles.
I think we need to make a distinction here between propping up the holding company and propping up the operating subsidiaries, or their policyholders.
A catastrophic failure to pay claims that wipes out state guarantee funds would be a serious problem. A wipeout of the holding company, not so much.
I won't be surprised by (1) funds made available to clear outstanding trades AIG has entered, as is apparently being done for Lehman, and/or (2) funds made available to backstop state guarantee funds. But I don't see anything being done for the holding company--certainly not for shareholders, probably not for the bonds either.
One of the first requirements I'd be making if I was on the Fed team here is--you want our help, you don't act on that permission to plunder the operating subs to save your butts. You touch that $20B, we're out of here.
They supposedly claim they're acting to save policyholders and the state of New York. I'm sure they're acting to save GS, too. But beyond that? We're about to find out.
WM cannot get bailed - it absolutely must be made to look like a good deal, spun the same way as the BAC and MER merger, which was basically a turdblossom - insolvent MER made to look like something other than it was.
My ignoramous guess here is that banks that can cooperate will share information and net out AIG stuff rather than expecting to be paid out by AIG if their bets come true. Banks that refuse to cooperate have to believe AIG will survive for them to get their winning bets to offset their losing ones and then run the risk of big trouble if it all turns to custurd very rapidly. Therefore the banks are being encouraged to clean up to sort out those who can survive.
Gavshire Hathaway writes:
Does anyone know why Capital One is rallying so hard (COF)??
It's exactly in line with JPM and BAC.
Improved builder sentiment means housing bottom is in? Lower oil means less stress on consumers? WM wipeout means increased market share? Crashing stock market means people will have to hit up their credit cards to meet margin calls, which increases fee income?
Use your imagination and you can probably come up with all sorts of BS reasons.
Ok here is something interesting, the market is up 125 or so but on the NYSE 1420 issues up, 2062 down, up volume 406 mil shares, down vol 3.758 bil down. Very strange (from Yahoo Finance)
The improved builder sentiment is such a joke. The instant a builder fails, they get dropped from the survey. It's all due to survivor bias, nothing more.
AIA, the international subsidiaries of AIG are incorporated in Bermuda. Bermuda has some of the strongest anti-takeover rules, making it a favorite offshore, compared to Cayman which is more tax friendly.
got to say, I'm really hoping that things settle down for a week or so, as I'm starting to get pretty tired of the long days ... and I'm sure a lot of other people feel the same way.
Beginning to look like it will take Hank 5 days to go back on his promise of no more taxpayer bailouts. Hope at least AIG equity zeroed out, to managers fired without bonus, and AIG broken up into 5 or more companies.
Muaziz writes:
Clarification on the whole AIG incorporated in the Bahamas thing that was posted about earlier. I think the confusion might have come from this: Alghani Investment Group, Inc., (AIGI) was incorporated in the Bahamas in February 1998.
American International Assurance Company (Bermuda), Ltd, located in Bermuda, is a member company of American International Group, Inc. (AIG). AIG is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions.
AIA (Bermuda) was established in 1967. AIA (Bermuda) is affirmed with some of the highest insurer financial strength ratings by Standard & Poors', and Moody's.
Banks Are Riskiest Companies in `Scary' European Markets: Chart of Day
(Europe needs Sheila Bair. Are we lucky or what?)
"The risk that European banks won't repay their debts exceeds the chances of non-financial companies defaulting for the first time since March, according to prices in the credit-derivatives market. ``Perceived risk in the financial sector has risen considerably, which will exacerbate funding difficulties and therefore heighten the danger of a credit squeeze,'' Marco Annunziata, chief economist at Unicredit Markets in London, wrote in a research report today." Banks Are Riskiest Companies in `Scary' Markets: Chart of Day - Bloomberg.com
My back of the envelope calculations are telling me that the Fed is almost out of ammunition, and will soon have to go to Congress for more.
I've lost track, care to share?
I'd bet Congress will accelerate the Fed's ability to pay interest on reserves. That would give the Fed the ability to expand the balance sheet at the same time they hold rates steady.
I haven't figured out how that would impact inflation.
"AIG has balance sheet of over 1 trillion and operations in 130 countries. If it goes, there won't be many insurance companies left after dust settles."
It isn't so much that as it is the fact that if AIG goes down, banks around the world go down. Why? Because AIG has insured their credit risks so those banks could decrease reserve requirements. If AIG goes, almost every major bank in the world needs to raise reserve holdings immediately.
Put money in the tip chair and get your answer.
FFDIC | 09.16.08 - 4:19 pm | #
Make that tip jar. My computer is drinking again. Lola, we need another J&B and did you find my heating pad yet? Where did you put the chili Fritos? What do you mean you ate them? Gotta go.
at 2.04 up slightly from yesterday, was around 1.10 a week or so ago. The big move up in it was yesterday. Roughly same level as durring BSC bailout and last December.
Doggy Dog World writes:
so, class, what did we learn?
That the way things are going we're going to need blood pressure medication before the end of the week?
Not me, I am growing numb. And depressed. The spectacle of Greenberg claiming his company was a "national treasure" and begging for taxpayer cash is revolting. After FAILING to exercise due diligence. Oh, master of the universe ....
I want to see these people on GSA paygrades - and not too high, either.
Fed and Treasury are managing expectations, and are politically in the driver's seat. The public is telling DC "no bailouts", and that's a lot of leverage for behavior change.
This is a managed collapse, and the key is to keep the process moving, don't let it lock up. Today was an absolutely crucial day, and the process is moving, even after the direct hit (LEH, MER) yesterday.
The next lesson is that the Fed and the Treasury are smarter than people give them credit for.
The last lesson, for me, anyway, is "don't let your thirst for retribution, or profit, cloud your judgment".
It isn't so much that as it is the fact that if AIG goes down, banks around the world go down. Why? Because AIG has insured their credit risks so those banks could decrease reserve requirements. If AIG goes, almost every major bank in the world needs to raise reserve holdings immediately.
A perfect example of why I think it's important to be precise about what's meant by AIG "going down". A failure of the holding company would not have this effect; only a failure of the subsidiary insuring the credit risk.
There's no reason to save AIG corporate and I very much doubt that's on the table. If GS has convinced the Fed of the systemic risk of an AIG collapse, you can bet it's not Greenberg taking his yacht to the pawn shop that's the issue. It's the counterparty and the issuer credit risk, and that can be saved without a penny being spent on the parent.
Sing of the times. MS preannoucnes better numbers. The better numbers amount to $1.4B gains on their credit spreads deterioirating. perverse. Back them out and the gain on sale of MSCI ($750M) and the reported net income of $1.4B looks tad thin. Equity prop business looks good. What a charm, short the market/financials prop (or whatever they did) and take gains on the debt side as the credit deteriorates. The revenue line is a little too cute
JPMorgan Gave Lehman $138 Billion After Bankruptcy Bloomberg.com refer=home
It says:
"One advance of $87 billion was made on Sept. 15 after the pre-dawn filing, and another of $51 billion was made the following day, according to a bankruptcy court documents posted today.
The first advance was repaid by the Federal Reserve Bank of New York, Lehman said. "
Maybe I misunderstood something, but doesn't this constitute a partial taxpayer bailout for Lehman, or maybe Lehman has some crappy collateral with the Fed.
What a surpise.
YTL, woman's intuition is amazing.
By the market opposite day rules, does this mean that they definitely will not be loaning AIG money by any means then?
Nemo = Primo
It's expiry week as well so things are likely to be a bit wild...
Best would be to keep everyone guessing until Monday...(Sunday night)
911 visitors online. Emergency!
I am with Willem Buiter. If they do this, it should require very good collateral and carry a very punitive interest rate.
I am guessing it does neither.
The People's Republic of America! I know, let's start giving welfare to farmers next!
This week is the appetizer for the dearth of news next week. Then people focus on fundamentals. look out below
Somebody post the phone number for the Fed Reserve & Treasury...so we can ALL call for our own bailout.
And now Hank Greenberg is considering buying the company he ran for decades.
I've dealt with Hank. He is one tough guy. He might actually be able to straighten out the firm. Greenberg-Led AIG Investors Consider Taking Control (Update2) - Bloomberg.com
Can a proxy fight be done before the weekend?
SS writes:
It's expiry week as well so things are likely to be a bit wild...
Triple witching
But you watch, the WSJ will be out with an editorial that baiking out Ford or GM is borderline Communist.
market now driven up on rumors and whispers...go market fundamentals!..go socialism for corporate hacks!
so whom is next in the too big to fail shit pile?
From the Buiter article Nemo linked:
It isnt even regulated at the Federal level at all. Insurance in the US is regulated at the state level. So a financial institution that is large enough to cast a significant global shadow is regulated by some provincial official in New York State. I suppose its some consolation that AIG isnt registered in Alaska.
lolz at the oblique Sarah Palin reference...
-Jaso
Just say no.
But it's not a bailout because it's a loan and will be paid back, right...... right?
Sorry, bailing
We have always been at war with Eastasia - I mean inflation.
Greenberg may just be the guy they want to bag too.
BTW--anybody able to articulate/explain the volatility oscillator?
I know I can't.
Gov of NY calls and asks for consideration.
The only correct answer is, Yes we will consider it.
But if you grant it, every other governor is going to be ringing your phone with their TBTF case. Do you deliver the medicine now or later?
attaaa way benny...
i like the plan of issuing 10 billion shares(non-diluting , of course) at 10 bucks....
wtf, why don't they grow a pair and actually follow through for once. They set a decent precedent yesterday, and follow it up with this bs that makes all the fallout from Lehman completely pointless.
You can't beat the guy that has the cookie jar.
Knock on door at Fed, voice inside sez:
"Go 'way, batin'!
AIG stock just turned green on the day.
"You can't beat the guy that has the cookie jar."
You can if you have a chinese-made club.
un autre Canadien avec popcorn writes:
You can't beat the guy that has the cookie jar.
yah, but the cookie jar is filled with black widows. Go ahead. Keep the jar. Open it, while I step away.
PR Machine already building public support!!!
Hmmm guess its back to 'comrade'...
YTL, woman's intuition is amazing.
Yes it is.
(acceptance speech):
I'd like to thank my agent, and all the helpful people at Calculated Risk who allowed me to understand finance. But most of all, I'd like to thank Misean for lending me his tinfoil hat. It allowed me to excel, especially by making me thin I'd changed my gender for a while.
(tiara put on, roses flying, crowd cheering).
YTL: 2
people disagreeing with him/her: 0
There's a bailout on the way.
Is there a streaming link to Ow, My Balls?
I don't use IE.
Patterson has to ask for this, all the Wall Street jobs, plus the westchester county financial jobs.
But making global economic decisions based on NY unemployment forecasts is bad mmmkay.
idiocracy indeed
Just go away Hank.
So is this a bailout of AIG, or a bailout of the State of New York?
well, it looks like AIG and CEG did the unthought of today..
congrats all
There's a bailout on the way.
Hey mp: don't bogart MY predictions!
VIX going nuts.
A lot of charts look like someone shot a bazooka through them between 2:15 and 2:45
Geoff, if you are out there, it looks like we played this one well.
Congrats to YTL on your calls as well. Hope you bet accordingly.
"The person gave no timetable for reaching an agreement or estimate on how much money New York-based AIG would need. New York Fed spokesman Andrew Williams declined to comment."
This is going to be a replay of Gasparino and the MBIA bullshit...trot this sucker out every time they need to pump the market.
"a person familiar with the negotiations."
Damn there are a lot of whores in this casino.
Some thread music:
YouTube - Pennies From Heaven - Billie Holiday
huge reversal in PBR today.
It's not a bailout. It's a loan, and as such will be repaid with interest on the day it is due. Right..... ipodius ..... Ben.....right... anyone....
Well...that does it.
Nostrovia,
Sweet. Can't wait for the $10,000 stimulus check announcement next.
Blah, Blah, Blah
FDIC Chairman Sheila Bair reiterated that more than 98 percent of the banking industry is well capitalized, which is the government's highest capital category.
Bair said in a statement that the FDIC does not comment on specific open and operating institutions.
"We are closely monitoring the situation and have taken steps to mitigate any impact on insured institutions that may be directly affected by Lehman Brothers bankruptcy filing," Bair said.
An FDIC spokesman declined to elaborate on what steps have been taken.
FDIC: monitoring Lehman impact on insured banks
| Reuters
I could go for a PBR right about now.
Thanks all:
but I will still demure declaring victory yet. (I'm very modest)
as they say: the ink ain't dry.
Once again, didn't AIG move their incorporation home to the Bahamas a few years back to screw America out of some tax dollars? And now they want me, and you, and evryone else to pony up? WTF?!
Drudge ad on top....
I drink your milkshake....
ROFLMAO
For music I prefer:
YouTube -
Not with a bang, but with a whimper
FDIC Chairman Sheila Bair reiterated that more than 98 percent of the banking industry is well capitalized, which is the government's highest capital category.
Dammit Sheila, it's the other 2% that we're worried about!
Comrades,
They call it a loan. I guess as long as they can roll it when it expires, it's a bail out.
Nostovia,
I'm worried about the other 98% too.
986 online.
"More power to the servers, Scotty!!"
Ask Sheila to translate the 98% to assets guaranteed, not # of banks propped up.
Does that mean there are 50,000 banks in the US?
Brawndo, It's Got Electrolytes. It's What Plants Crave
I want my loan too. Whom do I call?
Spec, I called something, but really thought we'd get the rate cut too. Perhaps they felt that with a big bucket, they wouldnt need the cut and it would just distract from the real game. Sadly, today, I did not take my own advice and did not bet accordingly. I was too scared, and decided to mostly watch. I did keep my airlines though but that game is about played. Missing the party today is ok, I just look back to yesterday, which was my best trading day ever.
Haha. Unbelievable.
This has got to be illegal. These rumors are insane...
They go after short sellers telling the truth, but won't slap donkeys like Gasperino for coming up with one bailout after another...
Remember his breathless, "MBI bailout is basically done." announcement so many long months ago?
FDIC Chairman Sheila Bair reiterated that more than 98 percent of the banking industry is well capitalized, which is the government's highest capital category.
That's why noone wants to mark to market ... it reverses the numbers ... Enron bookkeeping is alive and well on Wall Street
prediction:
DJI:11171
SP:1220
LEH halted....
"order rejected by market"
Ciao
MS
If AIG is bailed out by the FED the deal should include them moving corporate back into the United States.
Treasury Contacts Redirecting...
Call for your own bailout now...
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
General Information: (202) 622-2000
Fax: (202) 622-6415
Breaking: Barclay's purchases Lehman trading business.
If AIG is bailed out by the FED the deal should include them moving corporate back into the United States.
Exactly!
Fed bailing out a non-American corporation? How will this fly in Washington?
Hummm, i have to admit,,,i have gleened 4 market tips from this blog in the last 7 days,,,all with very nice profits......
better start charging for admission...
Either tell us refute these unnamed sources....this is a travesty...
which 4?
The Federal Reserve is considering extending a ``loan package''...
Why can't AIG just get this loan in the marketplace?
How did mis-pricing risk go from being the cause of our problems to suddenly being the solution?
Even if the AIG bailout doesn't materialize, this is excellent brinksmanship on the Fed and Treasury's part.
Applying just enough force to manage the outcome, not enough force to break the rope.
Also, it provides great political cover; there is no "back turned in the hour of great need".
So far, as many have noted, the downdrafts have been muted, and that is the over-riding goal. Slow descent.
Not bad so far.
Thread theme for the roots:
YouTube -
I called Treas. Those idiots told me that my Mom's collectable plates "have no real value." Haha! Idiots. The Norman Rockwells alone are worth BANK. I'll call back in two weeks.
No unwinding, no mark to market ...
More Charades ...
how can you guard against the obvious and then they rape you when the obvious happens...
this is rediculous..I'm tired of being a pawn...
Fed/Paulson will bridge AIG, they have no guts. Sometime they will realise that this just delays the inevitable. AIGs asset sale will not save them.
JP writes:
If AIG is bailed out by the FED the deal should include them moving corporate back into the United States.
Exactly!
Fed bailing out a non-American corporation? How will this fly in Washington?
There are only global corporations.
The rest are small businesses.
1029 Visitors Online
1048 online. Does that break Sunday night's record?
It's a package, relax, kinda like XMAS, with gifts for all the friends!! Can I sit on Santas lap, or wTF
Yes BB, but they moved offshore explicitly for tax reasons.
At least BearStearns was NY based.
10% difference between the 20 minute delayed price and real-time on AIG.
Ho-hum. Slow day.
1048 Visitors now...
Nemo Wrote:
"I am with Willem Buiter. If they do this, it should require very good collateral and carry a very punitive interest rate."
And they must terminate the CEO, CFO and BoD...the whole cluster of f*cktards. After what happened to the monolines, these asshats had NO excuses not to perform a sustained de-leveraging of their balance sheet.
"You got 15 minutes to clean your stuff, pleasure not to see ya ever, biatch, this way please"
Wam-bam-door-slam!
I have to wonder if Fed is anticipating an emergency meeting with the result of lowering the rate in the next 4-6 weeks. It seems we are on a brink. Again.
AIG threatens market with portfolio exposure ..
Fed caves....
Not that I have much, but I'll put my money on no future rate cuts.
FDIC insurance protects your money (except when...)
http://www.king5.com/sharedcontent/northwest/specialreport/stories/NW_091608BUB_fdic_protects_money_except_JM.803cd1b4.html
Merrill Deal May Boost FDIC Fund's Risk Profile
Merrill Deal May Boost FDIC Fund's Risk Profile - American Banker Article
McCain Remarks on the Financial Markets
"I pledge that FDIC and SPIC will have all the support they need to fully back the savings of the American people."
McCain Remarks on the Financial Markets - washingtonpost.com
Banks multimillion dollar losses may understate risk
"A $112 million combined quarterly loss for all South Florida-chartered banks might seem bleak, but may understate potential problems. The question is whether banks shortchanged their loan loss reserves giving them a better bottom line for now, but the potential for bigger future losses. Prolonged agony for the regions banks could make it more challenging for businesses to get loans."
Banks’ multimillion dollar losses may understate risk - South Florida Business Journal:
ac writes:
Why can't AIG just get this loan in the marketplace?
They are. That is the marketplace. Everything else has froze up.
Yesterday high was around 1,075...
So much for the line in the sand.
Someone pissed on it.
Late to table writes:
Hummm, i have to admit,,,i have gleened 4 market tips from this blog in the last 7 days,,,all with very nice profits......
can you share that with random certainty, to refute his 5% rule
Roubini for President !
can't believe I cancelled my stops after rate cut and then they throw rumors out to cost me a lot of money....
these fuc#ers all need to shot....
Lola,
Is Lefty open today or what? Bring me my heating pad. Hurry!
If AIG is bailed out by the FED the deal should include them moving corporate back into the United States.
If a private corporation is bailed out by the government then the shares of that company should be distributed to the taxpayers.
The government has demonstrated that it is incapable of running an organization profitably (itself) or even managing basic finances (it's own). No reason then not to hand these companies over to the taxpayer that they work for.
JP writes: If AIG is bailed out by the FED the deal should include them moving corporate back into the United States.
Hey! Then they could pay their once-avoided back-taxes using the bail-out money! Win-win!
For the week, what other negative material news regarding the financial sector are out there? We just had 3 days full of really bad news to digest. Anything else? Next targets as suggested by Prof. Roubini are GS and JPM and MS?
BB astutely said: "There are only global corporations.
The rest are small businesses."
Some are too big to fail, the rest are too small to matter.
$138B loan from FRBNY to Lehman:
"...Lehman Brothers Holdings Inc., the securities firm that filed the biggest bankruptcy in history yesterday, was advanced $138 billion this week by JPMorgan Chase & Co. to settle Lehman trades and keep financial markets stable, according to a court filing...The money was repaid by the Federal Reserve Bank of New York and is ``guaranteed by Lehman'' through collateral of the firm's holding company..."
Yeah, a $138B loan from the Fed, guaranteed by Lehman's junky assets. Lovely.
JPMorgan Gave Lehman $138 Billion After Bankruptcy (Update3) - Bloomberg.com
AIG should SUE the Fed if they do not get a loan.
mp, I hope you're wrong. I fear you are right.
I am too outraged to type: that the feds are considering saving a company that is not even a US company.
Does anybody have a link about AIG incorporating abroad to dodge taxes? I can't find it.
"If a private corporation is bailed out by the government then the shares of that company should be distributed to the taxpayers."
The taxpayers would not want more worthless shares... We already have Federal Reserve Notes.
RE: reform of wall street, saving this economy, guaranteeing that 'this will never, ever happen again':
McCain is writing checks he cannot possibly cash. Shameless power monger.
the reality is that a bailout of AIG solves almost nothing. All those losses are still out there on the books, and AIG is just one big fish, with many more biting at the Fed's hooks. Just relax, wait a bit, and watch skf for a re-entry point, coming soon to a theater near you.
all out 4.50,,,+2.00 AIG,, thankyou and good night
Of course it will never, ever happen again. We're going to frickin die. Pretty safe bet we don't get sick again.
What an asswipe. He and Keating can sodomize each other in hell.
"If a private corporation is bailed out by the government then the shares of that company should be distributed to the taxpayers."
The taxpayers would not want more worthless shares... We already have Federal Reserve Notes.
OK:
If a private corporation is bailed out by the government then the shares of that company should be distributed to the taxpayers along with a pony.
these guys at the fed, wow they are smart..in 24 hrs, they have staged a turnaround in sentiment that i simply cannot believe. i would imagine the PPT bought stocks all morning to stave off another 500 point downtrade so they wouldnt have to make a panic ease this afternoon..them not easing tells the mkt that maybe things aint so bad out there.brilliant manuever..and they keep the dollar from falling back into a decline by not easing today...it seems like the mkt thinks aig is saved somehow, all of a sudden too...
I can't imagine AIG holds up into the close.
idoc
Nice to see you around!
AIG just hit 1 BILLION shares for the day
Oh well...I guess we only get one day of No government intervention...it was good while it lasted...To the MOON!
AIG rejected a private sector plan which would have meant giving up control. In other words no rewarding bad behavior.
So what we have here is rewarding bad behavior without asking the AMERICAN taxpayers (again), creating more irresponsible moral hazard, and setting up expectations that if you can whisper in the ear of the RIGHT person you get a bailout/loan/gift certificate.
There is no logic at work here and the asshats in charge are making it up as things go along as we race toward the bottom. Sound familiar? Like 8 years of familiar? Like everything was "contained" familiar?
So why not just have a big conference call with everyone deemed to big to fail and ask them how much they need and be done with it. Let's just empty our commonweal into the private pockets completely. Who needs to think about ordinary people with ordinary lives when corporate and government elites have yachts and vacations houses to consider.
this is just BS. makes lehman's fall pretty pointless. i say let aig go the way lehman went if they can't find private capital. we're going to have to deal with this sooner or later, this is not just a "liquidity" crisis, as bear and lehman have proved.
un autre Canadien avec popcorn writes:
It's not a bailout. It's a loan, and as such will be repaid with interest on the day it is due.
It's not a bailout or a loan. It's a rumor, and it's available to anyone with Charlie Gasparino's number on their cellphone.
I'm not quite sure how Charlie's repaid, though. Cash on delivery? A paypal link on the CNBC website? A quick call to his broker to frontrun the rumor?
This is a casino. Pure and simple. J6P has no reason to be in it anymore. Investment is dead. This is nothing more than a huge charade of free markets.
And the manipulators will lose. Eventually.
The Fed now takes shares ...
How many AIG shares are there now ?
Hey, is it my imagination or did the bond market do almost a 30 bps turnaround today?
Even if AIG gets the loan, they still have to liquidate assets to cover the capital requirements that the loan would cover, right? So in the end the only point in providing a loan is to prevent cascading cross defaults, not "rescuing" AIG.
"...along with a pony."
Flying Pony, please
Does anybody have a link about AIG incorporating abroad to dodge taxes? I can't find it.
That's because it's not true.
This is a casino. Pure and simple. J6P has no reason to be in it anymore. Investment is dead. This is nothing more than a huge charade of free markets.
It's kind of hard to keep up the fiction that we have free markets when the Fed is the only market participant, isn't it?
EDGAR Filing Documents for 0001359824-08-000022
See filing above.
AIG is INC in Delware.
10 year? Up 15 basis points since the Fed announcement.
anon writes:
For the week, what other negative material news regarding the financial sector are out there? We just had 3 days full of really bad news to digest. Anything else? Next targets as suggested by Prof. Roubini are GS and JPM and MS?
anon | 09.16.08 - 3:19 pm | #
JPM will survive. They have depositors' money to play with.
What!
A loan from JPMorgan to Lehman to cover trading losses, then paied back by the Fed and secured by Lehman assets....
It's this just a trick to put CDS counterparties ahead of bondholders?
This stinks. I smell a lawsuit.
The Fed is now a hedge fund ...
Of course Paulsons going to bend over and take it right in the ass:
"However, a Treasury official told CNBC that the comments of Treasury Sectary Hank Paulson on Monday still stand.
On Monday, Paulson had said, "We do not take, and and I don't take, lightly ever putting the taxpayer on the line to support an institution ... Don't read it as no more; read it as that it's important, I think, for us to maintain the stability and orderliness of our financial system. Moral hazard is something I don't take lightly.''"
Oops, make that 150 bps
Paulson is kicking the can down the road ...
Skiing in Aspen come January ...
maybe you are over reacting here. Upto now the credit crisis has been a standoff with nobody wanting to mark to market and get on with the business of cleaning things up. And instead of being bankers they have just been wankers whining for a public bailout. So the pressure had to be put on.
While AIG exists even fewer marks need to be made.
On the other hand if AIG does not exist it creates mayhem for now.
Its a bit like Dirty Harry:
"I know what your thinking. Has he fired 6 shots or 5? Well to tell you the truth punk in all of the excitement I am not sure myself. So whats it going to be punk? are you felling lucky punk?"
How many billions from the fed to get such a small pop on the DJI?
I went to the supermarket for organic eggs & milk. Neighbor gave me some MaryJane. Where is that ganja carrot cake recipe?
Predicition - This rally fades real fast...
Fair Economist writes:
Does anybody have a link about AIG incorporating abroad to dodge taxes? I can't find it.
They are a Delaware corporation and pay US taxes. Not sure what the other guy is referring to.
Pass the carrot cake...
Goldman Sachs Group Inc. and JPMorgan Chase & Co. were working with AIG to determine how much the insurer needs, said two people familiar with the talks yesterday. Goldman has helped the Fed appreciate the effects that an AIG collapse would have on financial institutions, the first person said.
Fed Said to Reverse Stance, Consider AIG Loan Package (Update3) - Bloomberg.com
The irony of the financial planning services AIG is touting and its own precarious financial health is overwhelming. I almost died laughing when I saw commercials during the Olympics encouraging people to trust AIG with their finances. Regardless of whether AIG manages to somehow survive the week with a bail-out, I wonder just which hapless consumers would feel comfortable doing business with them ever again?
But maybe the US treasury can write a stimulus check to all tax-payers, that can only be redeemed by purchasing AIG services. Now theres a good business strategy.
YouTube - AIG Commercial
energycon- Yeah, how it would hurt GS, GS only cares about GS
Nude writes: "So in the end the only point in providing a loan is to prevent cascading cross defaults, not "rescuing" AIG."
And, if Greenberg can 'get back in' so much the better that they get him in the process. Don't underestimate their thirst for revenge.
crispy.........don't tempt us.
Thats f**King Bullsh*T
F U Bernanke.
Thanks for throwing taxpayers under the bus, you elitist prick.
Perhaps I am mistaken.
When did AIA go to bermuda?
We will know who owns this country...this bailout is ALL about the crooks at GS!
Goldman [to Fed]: "Nice banking system you have there. It'd be a shame if something happened to it."
So the plan now is to induce ridiculous volatility, give Wall Street traders the opportunity to get rich quickly on OPM, then dump the scam on J6P and anyone stupid enough to leave their 401k money &/or pension fund in the market.
Disgusting.
U.S. Mortgage Rates May Wreak Further Havoc After Libor Climbs
By Kathleen M. Howley
Sept. 16 (Bloomberg) -- The biggest jump in the London interbank lending rate in seven years could wreak further havoc on the U.S. housing market and there's nothing the Federal Reserve can do about it.
U.S. Mortgage Rates May Wreak Havoc After Libor Gain (Update2) - Bloomberg.com
I wonder how they keep their investment bank deal information separate from their trading desks. Whats to stop one side from telling the other what to do.
thx energy econ - that's the TED spread at work - happened yesterday actually, but we were all busy ignoring its impact on housing refinance. Just might matter for all the coming resets a wee bit, ya know?
If you think credit is tight now,,,watch what happens if AIG is tossed to the wolves...lol
"I wonder how they keep their investment bank deal information separate from their trading desks. Whats to stop one side from telling the other what to do."
The steely eyed gaze of the LAW!!!!
...
sigh
Yeah, how it would hurt GS, GS only cares about GS
And if I recall Paulson (and some Bush flunkies) are former GS? Right? Hmmm...wondering if these boys are thinking about coming home to mamma soon (say Jan '09) and making sure mamma's house is still standing? Family first. Family values.
Nice. Work. GS Boys.
The Fed is holding the door open for the big boys to get out.
No mark to market, no unwinding ... just a complete financial freeze ... after January ...
Can't wait for the Senate's tearing Hank a new one when he finally comes in, even if it's just for show.
volume is picking up. let's see where this leads...follow the rabbit.
Well, so much for the rally. Crazy day.
The changing top stories headline at Yahoo! Finance - Business Finance, Stock Market, Quotes, News
today
would be good material for a comedy routine.
fallon,
ALL of them have GS 'formers' in their inner circles...ALL of them.
look at the trading range (300%) and volume of AIG
wow.
just wow.
Dodd calling for more ponies....
Folks. AIG has lost its credit rating to one notch above junk.
Why would anyone loan this company money??
aig,,,,1 billion served
Volume still climbing.
PIMCO and the bond boys are threatening mutiny if AIG goes away !
Chief Executive Richard Fuld has been invited to testify before a House of Representatives committee about "regulatory mistakes" and "financial excesses" that led to Lehman's bankruptcy filing.
The House Committee on Oversight and Government Reform asked Fuld to testify on Sept. 25.
Lawmakers summon Lehman CEO Fuld to testify
| Reuters
Caugh 'em up like a hair ball what the hell you got to loose.
"ALL of them have GS 'formers' in their inner circles...ALL of them."
Like they're jumping from one sinking ship to the next, adding anything that floats to their collection.
PIMCO and the bond boys are threatening mutiny if AIG goes away !
Seriously, what does that even mean?
IF the tax payors lend AIG money, What rate of return will we get? Being that they are almost junk.
Late to table writes:
aig,,,,1 billion served
Yes, but rectally wouldn't fit on the sign.
I wonder just which hapless consumers would feel comfortable doing business with them ever again?
Sniglet, I agree with the sentiment, but don't you think this is going straight past 99% of Americans?
As was pointed out more than once, this is rumor at this point in time - however, it is a rumor that is far to easy to believe.
"PIMCO and the bond boys"
Screw those greedy bastards.
Folks. AIG has lost its credit rating to one notch above junk.
Why would anyone loan this company money??
Uh, because we're taxpayers and have no immediate choice in the decision?
anybody investing in this market at this time is either an idiot or a fool.
Head for the bunker!
Interesting Times
PIMCO and the bond boys have hundreds of millions at stake ....
Who gets props again for the PIMCO AIG merger - PIG?! lol
So far the rumor has NOT been confirmed. A little over 20 minutes left in today's trading.
Wasn't it said that AIG would file tomorrow if they can't get the money?
We'll see shortly.
PIMCO and the bond boys have hundreds of millions at stake ....
I know PIMCO.
What can they do? Throw their bonds at Hank?
What is with that empty threat?
Key U.S. senator opposes federal help for AIG
Asked whether the government should provide a bridge loan or some other support for the company, which faces a liquidity crisis, Alabama Sen. Richard Shelby told reporters, "Absolutely not ... I hope that they will not bail out, or get a bridge loan, to AIG."
He added, "Where do you stop? Where do you draw the line?"
I've never owned an insurance company before. Do I get special rates?
I'm thinking we need a squirrel mascot that porks the gecko?
Interesting Times
The Bond boys control the world, make the entire stock market look Liliputian ...
I ate some of that carrot cake, and check it out: if you take today's Dow chart and rotate by 180 degrees the plot of the opening bell through 1:50, it totally matches up with the plot of 1:50 through right now.
Oh wow, this is like that drug trip I saw in that movie while I was on that drug trip.
Looking at my historical stats and seeing the volume as of noon PT, today may well be the record day for S&P 500 futures purchases by the PPT.
am I the only one who thinks AIG should be considered for Federal assistance? Jail some of the Sr. Management and Board for fraud and racketeering, Yes. But, can the authorities, and financial system handle an unwind as messy as AIG; and a panic as one of the largest insurance and pension providers face-plants? I don't think the state insurance funds have sufficient funding.
Will this loan wipe out the equity holders?
mmckinl - we'll see.
Creidt market is dying.
Bond boys are toast.
It's only a matter of time.
"Why can't AIG just get this loan in the marketplace?"
Sorry, no one can loan in the market foe the moment. They really do not function. The spreads are going ballistic.
And AIG is little special, even if bailouts are not my cup of tea. AIG is the worlds largest insurance company, and if you think that the banking is too inbred and interwoven, you ain't seen nothing yet, before looking at the insurance world.
AIG has balance sheet of over 1 trillion and operations in 130 countries. If it goes, there won't be many insurance companies left after dust settles.
Interesting times...
So is one scenario this is a transfer of bag holding pump - very last chance to push widows and orphans out of the way and get in a lifeboat?
News after the close is going to be too interesting either way...
PIMCO and the bond boys are threatening mutiny if AIG goes away !
September 9th is Talk Like A Pirate Day.
Guess we should practice saying things like "Aye, matey. Close down AIG and you'll be seein a mutiny, tharrrs a promise."
egoldstein
yes, you are the only one ...
Yes, you are the only one, egoldstein.
Let the unwind begin.
Steward, a little bubbly and smoked salmon, please. The casino will be open at least one more day.
Midwest
ROFLMAO!
egoldstein,
That's probably true, unless you begin breaking up AIG into it's parts. Crap over here, worthless. Good stuff over here, gets sold at a discount. Life goes on. AIG ceases. Again, no one has indicted the insurance-side--it's all the other investment divisions that are in trouble.
Ooooo Oooo I have the mascot for the New AIG:
http://www.electricsquirrel.com/images/squirrel_with_balls.jpg
AIG...a little special.
priceless
Interesting Times
when F&F failed who got bailed ... bonds
Nemo: If they do this, it should require very good collateral and carry a very punitive interest rate.
If they had good collateral, would they need the FED?
15 minutes left
I just gotta wonder in the last few minutes if we'll see a huge volume of sell orders because really this is pissing into the combine.
place your bets,,,,save or not,,,running out of time here
Will something (either way) be announced after hours or will this end like "The Sapranos"?
They will all have to come clean in january to meet new reporting requirements ... or not ...
let the unwind begin !
mmckinl - Yup on FNM FRE
We'll see how long that lasts.
There are always reprocussions.
Yen fueled into the close...
believe it or not "pissing into the combine" shows no returns. LOL.
A market with this much volatility can't be healthy. But when will it crash?
Probably nothing, as the ability to trot this POS out multiple times exists ala Gasparino and the ABK/MBIA market manipulation.
Buying is picking up
i still think energy/oil/gold stocks have bottomed.
I've laid in my positions for liquidation in Jan 08 SDS, 09, and 10 (BAC LEAPS), 11 (FRE).
FRE's gonna make me my nut
Well at least auto, manufacturing, utilities, and energy sector along with IT is sound, fundamentally sound...positively...
The pain that would be inflicted by AIG going bust is a feature, not a bug. The memories, if severe enough, would ensure at least forty to fifty years of reasonable corporate management, as was seen after the Great Depression. This generation has already stolen so much from then next few, the least we can do now is bite the bullet and give our children the overwhelming example of what a deadly brew greed and incompetence really are.
Yen fueled jam job into the close to suck in new bagholders.
Gavshire Hathaway ~
The market will not crash ...
The Fed will have everything on its books as collateral ...
G-H-, I think that the market crashes when WaMu gets taken over.
Yesterday was a big down day, but the volume was not exceptional.
When WaMu gets taken over by the FDIC, then folks will panic, moving money out of the stock market and into bonds. That will cause the crash. The PPT cannot stand up to panic-level volume.
My guess.
AIG has balance sheet of over 1 trillion and operations in 130 countries. If it goes, there won't be many insurance companies left after dust settles.
I think we need to make a distinction here between propping up the holding company and propping up the operating subsidiaries, or their policyholders.
A catastrophic failure to pay claims that wipes out state guarantee funds would be a serious problem. A wipeout of the holding company, not so much.
I won't be surprised by (1) funds made available to clear outstanding trades AIG has entered, as is apparently being done for Lehman, and/or (2) funds made available to backstop state guarantee funds. But I don't see anything being done for the holding company--certainly not for shareholders, probably not for the bonds either.
One of the first requirements I'd be making if I was on the Fed team here is--you want our help, you don't act on that permission to plunder the operating subs to save your butts. You touch that $20B, we're out of here.
They supposedly claim they're acting to save policyholders and the state of New York. I'm sure they're acting to save GS, too. But beyond that? We're about to find out.
a save will sent the market up,,,,fail will help my shorts
Does anyone know why Capital One is rallying so hard (COF)??
Pump job? Very suspicious...
WM cannot get bailed - it absolutely must be made to look like a good deal, spun the same way as the BAC and MER merger, which was basically a turdblossom - insolvent MER made to look like something other than it was.
My ignoramous guess here is that banks that can cooperate will share information and net out AIG stuff rather than expecting to be paid out by AIG if their bets come true. Banks that refuse to cooperate have to believe AIG will survive for them to get their winning bets to offset their losing ones and then run the risk of big trouble if it all turns to custurd very rapidly. Therefore the banks are being encouraged to clean up to sort out those who can survive.
KALIFORNA needs to go to the feed for a bailout!
Well said, Yalt.
Beacuse the fundamentals of consumer credit card lending have improved into the close! /snark
I just got my bailout...get in line guys before they run out of money
how much is the NYSE going to make allowing fnm.fre to trade over the next millenia , as the day trader's battle 25000-50000 shares lots .003c apart!
Gavshire Hathaway writes:
Does anyone know why Capital One is rallying so hard (COF)??
It's exactly in line with JPM and BAC.
Improved builder sentiment means housing bottom is in? Lower oil means less stress on consumers? WM wipeout means increased market share? Crashing stock market means people will have to hit up their credit cards to meet margin calls, which increases fee income?
Use your imagination and you can probably come up with all sorts of BS reasons.
I believe many of the yokel-small town money managers that CNBC trots out daily are still 'buying-the-dips'.
These guys do not short. They do not buy commodities. They buy stocks/bonds&mutual funds.
I just can't imagine them backing off from 'buy the dips' until something truly unreal happens.
My back of the envelope calculations are telling me that the Fed is almost out of ammunition, and will soon have to go to Congress for more.
I do, too.
Is CR Robert Reich?
Is CR Robert Reich?
He's shorter than that ...
AIG diving into the close.
You would guess that somebody knows whether a deal is going to be done or not by now.
Ok here is something interesting, the market is up 125 or so but on the NYSE 1420 issues up, 2062 down, up volume 406 mil shares, down vol 3.758 bil down. Very strange (from Yahoo Finance)
"AIG diving into the close."
Would you want to hold it overnight?
The overnight trade is without a doubt,,,,risky,, but who makes big money without risk??
The improved builder sentiment is such a joke. The instant a builder fails, they get dropped from the survey. It's all due to survivor bias, nothing more.
JP,
That is significant in and of itself. Why take so long? Be decisive, whore the tax payer or jilt AIG.
See, 11056 & 1213, just like I said it would be
(hides)
so, class, what did we learn?
DvD, very interesting, thanks for the info.
Morgan Stanley will release earnings early TONIGHT at 5pm ET by conference call
I missed your point blackhat. What inference are you drawing from the lack of decision?
Dirk, that's the way it works -- narrow base for the close in green -- on these mega PPT pump days.
Another index: new 52 week highs today, 22; new 52 week lows today, 1163.
Very narrow basis for an up day, today.
Farmers already receive welfare. You should look to see how much farmers get from the government.
Dirk!
I was just looking at the exact same data:
That is 32.9% of the issues hitting a new 52 week low, and the ratio of low:high is 52.8
Clarification on the whole AIG incorporated in the Bahamas thing that was posted about earlier. I think the confusion might have come from this:
Alghani Investment Group, Inc., (AIGI) was incorporated in the Bahamas in February 1998.
so, class, what did we learn?
That the way things are going we're going to need blood pressure medication before the end of the week?
["AIG diving into the close."
Would you want to hold it overnight?]
I am. Got 500sh on a flyer @1.51 at the open and added another 500 for grins in the $2s.
TOO BIG 2 FAIL!
AIA, the international subsidiaries of AIG are incorporated in Bermuda. Bermuda has some of the strongest anti-takeover rules, making it a favorite offshore, compared to Cayman which is more tax friendly.
Maybe if I gain enough weight I'll be too big to fail and live forever.
got to say, I'm really hoping that things settle down for a week or so, as I'm starting to get pretty tired of the long days ... and I'm sure a lot of other people feel the same way.
Thanks for clearing that up, Muaziz.
Summary of today for those following at home:
MS has been voted off the island
This here is the warmup...
Muaziz, (or anyone who knows) AIA is a bermuda entity of AIG. My recollection is that they (along with Tyco) were taken to the media woodshed on this.
Now the problem is that it was a while ago, and I can't find any links. So now I question whether I'm getting the right org.
JPMorgan Gave Lehman $138 Billion After Bankruptcy
JPMorgan Gave Lehman $138 Billion After Bankruptcy (Update3) - Bloomberg.com
C&C why's that?
Beginning to look like it will take Hank 5 days to go back on his promise of no more taxpayer bailouts. Hope at least AIG equity zeroed out, to managers fired without bonus, and AIG broken up into 5 or more companies.
Muaziz writes:
Clarification on the whole AIG incorporated in the Bahamas thing that was posted about earlier. I think the confusion might have come from this: Alghani Investment Group, Inc., (AIGI) was incorporated in the Bahamas in February 1998.
Damn. Ruined a perfectly good joke.
Look at their stock price...on an up day they are the big loser.
Another successful day for the PPT ...
at least gotta make it to the election ...
American International Assurance Company (Bermuda), Limited
American International Assurance Company (Bermuda), Ltd, located in Bermuda, is a member company of American International Group, Inc. (AIG). AIG is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions.
AIA (Bermuda) was established in 1967. AIA (Bermuda) is affirmed with some of the highest insurer financial strength ratings by Standard & Poors', and Moody's.
Banks Are Riskiest Companies in `Scary' European Markets: Chart of Day
(Europe needs Sheila Bair. Are we lucky or what?)
"The risk that European banks won't repay their debts exceeds the chances of non-financial companies defaulting for the first time since March, according to prices in the credit-derivatives market. ``Perceived risk in the financial sector has risen considerably, which will exacerbate funding difficulties and therefore heighten the danger of a credit squeeze,'' Marco Annunziata, chief economist at Unicredit Markets in London, wrote in a research report today."
Banks Are Riskiest Companies in `Scary' Markets: Chart of Day - Bloomberg.com
FFDIC
where's Krugman's TED spread ?
MS just missed earnings...
where is rich,
1 selling on strength is IWM...
Money Flows: Selling on Strength - Markets Data Center - WSJ.com
FFDIC
where's Krugman's TED spread ?
mmckinl | 09.16.08 - 4:18 pm | #
Put money in the tip chair and get your answer.
My back of the envelope calculations are telling me that the Fed is almost out of ammunition, and will soon have to go to Congress for more.
I've lost track, care to share?
I'd bet Congress will accelerate the Fed's ability to pay interest on reserves. That would give the Fed the ability to expand the balance sheet at the same time they hold rates steady.
I haven't figured out how that would impact inflation.
"AIG has balance sheet of over 1 trillion and operations in 130 countries. If it goes, there won't be many insurance companies left after dust settles."
It isn't so much that as it is the fact that if AIG goes down, banks around the world go down. Why? Because AIG has insured their credit risks so those banks could decrease reserve requirements. If AIG goes, almost every major bank in the world needs to raise reserve holdings immediately.
Morgan Stanley Earnings of $1.32 a Share Easily Top Forecasts (More to Come)
Nevermind down over last year...but beat...the bear is dead, long live the BULL...time to go long boys
long live bullshit I call
Put money in the tip chair and get your answer.
FFDIC | 09.16.08 - 4:19 pm | #
Make that tip jar. My computer is drinking again. Lola, we need another J&B and did you find my heating pad yet? Where did you put the chili Fritos? What do you mean you ate them? Gotta go.
FFDIC
where's Krugman's TED spread ?
mmckinl | 09.16.08 - 4:18 pm | #
at 2.04 up slightly from yesterday, was around 1.10 a week or so ago. The big move up in it was yesterday. Roughly same level as durring BSC bailout and last December.
The question is how much of that is "income" due to their debt getting a haircut in the market...
FFDIC
2.16 %
put your money in the tip jar ...
Comrades,
Well that was some pump job at the end of the day.
Did the CNBC cheerleaders have an orgasm on the air?
Nostrovia,
wally,
don't worry. we can change those inconvenient rules. we'll just erase them and no problems.
/eff
Time for me to go to my bunker and get come sleep..
How long can the AIG story hang fire? What is the deadline on their capital raise due a downgrade, anyone know?
When will AIG make an announcement? Will they use the words "spinco"?
Doggy Dog World writes:
so, class, what did we learn?
That the way things are going we're going to need blood pressure medication before the end of the week?
Not me, I am growing numb. And depressed. The spectacle of Greenberg claiming his company was a "national treasure" and begging for taxpayer cash is revolting. After FAILING to exercise due diligence. Oh, master of the universe ....
I want to see these people on GSA paygrades - and not too high, either.
There must have been a team meeting at CNBC after their on-air sharting on Sunday.
I'm sure newspeak manuals were updated and reviewed accordingly.
Lessons for today.
Fed and Treasury are managing expectations, and are politically in the driver's seat. The public is telling DC "no bailouts", and that's a lot of leverage for behavior change.
This is a managed collapse, and the key is to keep the process moving, don't let it lock up. Today was an absolutely crucial day, and the process is moving, even after the direct hit (LEH, MER) yesterday.
The next lesson is that the Fed and the Treasury are smarter than people give them credit for.
The last lesson, for me, anyway, is "don't let your thirst for retribution, or profit, cloud your judgment".
"Will they use the words "spinco"?"
Did you see they rolled out Greenberg on CNBC to talk about how it't in the national interest tosave AIG?
Over here
Talk about spin...
Anybody know if the screen's still up at the White House?
wally writes:
It isn't so much that as it is the fact that if AIG goes down, banks around the world go down. Why? Because AIG has insured their credit risks so those banks could decrease reserve requirements. If AIG goes, almost every major bank in the world needs to raise reserve holdings immediately.
A perfect example of why I think it's important to be precise about what's meant by AIG "going down". A failure of the holding company would not have this effect; only a failure of the subsidiary insuring the credit risk.
There's no reason to save AIG corporate and I very much doubt that's on the table. If GS has convinced the Fed of the systemic risk of an AIG collapse, you can bet it's not Greenberg taking his yacht to the pawn shop that's the issue. It's the counterparty and the issuer credit risk, and that can be saved without a penny being spent on the parent.
feckless
nah
It was something that Laura had wanted to do and they did it while the weather was still warm
ew thread
Sing of the times. MS preannoucnes better numbers. The better numbers amount to $1.4B gains on their credit spreads deterioirating. perverse. Back them out and the gain on sale of MSCI ($750M) and the reported net income of $1.4B looks tad thin. Equity prop business looks good. What a charm, short the market/financials prop (or whatever they did) and take gains on the debt side as the credit deteriorates. The revenue line is a little too cute
SURPRISE! SURPRISE! SURPRISE!
From the bloomberg article:
JPMorgan Gave Lehman $138 Billion After Bankruptcy
Bloomberg.com refer=home
It says:
"One advance of $87 billion was made on Sept. 15 after the pre-dawn filing, and another of $51 billion was made the following day, according to a bankruptcy court documents posted today.
The first advance was repaid by the Federal Reserve Bank of New York, Lehman said. "
Maybe I misunderstood something, but doesn't this constitute a partial taxpayer bailout for Lehman, or maybe Lehman has some crappy collateral with the Fed.
Can someone clear this misunderstanding?
BushCo says "No more bailouts" because ALL
companies in U.S. have been bailed out.
In Soviet America, companies bail YOU out.
Mentalic
nothing to see here, move along now , move along ...
yours truly Hank P