JP, clearly seems ominous to investors too - with the price off 2/3 today alone. I can't imagine setting expectations of an announcement - and then nothing. Why not announce a postponement? That would be better than silence.
meanwhile John Lewis was asked (on CNBC) if the Merrill marks were valued similarly to the Lehman marks. Short answer: No. Longer non-answer: The Merrill marks were very conservative.
Now to move past the "it can't go lower syndrome" and to graduate to "it will only go lower syndrome"...then we'll know that recovery is just 5 to 32 years away...
"We seek to calm investors by admitting that these contretempts, exacerbated by our deleterious malfeasance and nefarious shenaningans, is nonetheless soothed by our sweet lexiconic manipulation of the staid situation".
Buffet isn't generally known for overpaying so if AIG is really upside down you can expect something de minimus at best and more likely a novelty investment -- cash secured by the leasing business for example.
crispy&cole writes:
They have to be working on a buyout from Buffet and they are going to kill the shorts...
I'm not sure why you think Buffet is an idiot. Of course he's talking to an insurance company that's fireselling assets and I'm willing to bet that he finds something in there worth buying, but why would he buy the equity when the good bits are on sale? His views on risky balls of derivative goo are well known....
Buffett buying? Why would anyone buy a company with more liabilities than assets? Unless AIG can sell off bits an pieces that Buffet would find useful (and profitable) - (and I don't think an airline business is it - not with the uncertainty in the fuel markets) - then I don't see any white horse on the horizon.
That's why AIG said they were looking for a gov't bailout. (Does anyone know where they got the idea that there is a gov't safety net for large financial corporations? They talk about it as if they are going to apply for food stamps - like the benefit is automatically available. Maybe they should be talking to the auto industry... Reliance hasn't worked out too well for them so far, has it?)
Fearing a meltdown on Wall Street, the U.S. presidential candidates sparred on Monday over who could best restore financial health, with John McCain pledging reform and Barack Obama saying hands-off Republican policies were the problem.
"The way AIG is structured, Buffet could maybe buy some of the individual pieces clean. Heaven know AIG needs the cash to balance out the toxic waste."
Sell the good to break even on your losses and then shut the doors? It might be honorable, but who in American business today would do that???
Anonymous writes:
Fearing a meltdown on Wall Street, the U.S. presidential candidates sparred on Monday over who could best restore financial health, with John McCain pledging reform and Barack Obama saying hands-off Republican policies were the problem.
... and v.p. candidate Palin offered to debate in her bikini.
If AM Best knocks them down to an "A" rating, the insurance end of AIG will probably survive. (Not that Best's is all that responsive to news--they're as bad as the bond rating firms.) An "A-" rating will put a lot of stress on them, as they'll probably lose renewals over it. Otherwise, they'll have to cut rates to make up for the risk to the policyholder, which certainly won't help profitability. Could very well see them on the verge of a death spiral.
Does this line from the FT article jump out at anyone who knows anything about why this restriction was put into place to begin with?...you know, the GD...
"The Fed added that it was suspending a rule that normally prohibits deposit-taking banks from using deposits to help finance their investment banking subsidiaries to allow them to fund activities normally funded in the repo market on a temporary basis until January 30 2009."
Actually this sounds like they couldn't find capital and know a downgrade is going to hit forcing the posting of additional collateral they -- until now -- couldn't get access to. So, my guess is Moody's hits them before the end of the day and they post money from the subs. This of course screws the subs and generates all kinds of litigation -- against NY state I'd think.
If that read is correct, this is not the smartest move in the playbook...
Agreed. I think this "plan" is a terrible one. It smacks of incredible desperation. A ratings downgrade, if someone has the guts to do it, is going to send AIG over the edge regardless of stealing 20bn from Peter to pay Paul.
The fact that this situation has gotten so desperate in a few hours--yesterday morning an imminent failure of AIG was not on the radar screen--is almost too much to apprehend.
So let me get this straight. The State of New York is allowing AIG to raid Grandma's annuity fund to the tune of $20 billion in order to plug the hole in their balance sheet from all their bad CDS trades.
uncle toby writes:
If AM Best knocks them down to an "A" rating, the insurance end of AIG will probably survive. (Not that Best's is all that responsive to news--they're as bad as the bond rating firms.) An "A-" rating will put a lot of stress on them.
Nope, nope, nope ....... this line of thinking is for pro's only. I was willing to trade "cans of sardines", but hype is hype -
We are on the edge, and that reasoning is hype.
Don't be angry, that's just my opinion.
We are on the edge, and that reasoning is hype. Don't be angry, that's just my opinion.
Popeye | 09.15.08 - 12:33 pm | #
No, Uncle Toby's line of reasoning is pretty accurate. Many large companies have an "A or better" requirement on all commercial insurance they buy. I was writing for Lloyd's when it went to A- and it was very, very difficult. A- would be serious stress, B+ would be fatal.
The truly sad part of the story of the past few weeks is that the vast majority of Americans -honest people who go to work everyday and take care of their kids - have no idea what has happened or what it means - {ok, I don't know what it means either}.
well this mouse still wants to know where the other 20 billion comes from.
and if they get a down grade they will need even more....then what?
i thought insurance companies were supposed to be fiscally conservative to cover their future liabilities that are built from day one.
guess i will open my open insurance shop. let's call it "no shit insurance."
as the elephants are now just stomping around in their own crap and all penned up and the zoo keeper keeps feeding them rather than releasing them to the wild and let nature take its course.
Yalt,
I wasn't criticizing the validity of the reasoning. My point was that line of analysis "is for pro's only". The market is not falling generally, but it is cascading in parts.
As for me, I'm struggling to be patient.
Maybe if AIG went bust, we'd finally get a 700 point drop in the Dow, long overdue, or a closure of the exchange, also something sorely needed. Naw, nothing will send this teflon market down much. I mean it is bouyed up by all the hot air put out by the bullfools and their lungs are indestructible.
Did anyone ever see the movie Spaceballs, with its villain Pizza the Hutt (spoof of Jabba the Hutt). Basically a big mound of sentient, collapsing pizza goo. Every once in a while a big hunk of cheese would drip disgustingly off his head and fall into his mouth, and he would gulp it down. (Needless to say, he couldn't move anywhere)
Corey writes: I setup a site to graph the number of visitors online at CR over time. Mainly for fun, but it might also be a leading indicator of something..
Thanks, Corey! Now we can track the CRVIX. If you can only set up an ETF on this, the hedge funds will beat your door down.
?? Syndicated Gambling: Sections 801-811 of the Organized Crime Control Act of 1970, which amended Title 18, United States Code, by adding Sections 1511 and 1955, are designed to combat "illegal gambling business" or syndicated gambling. Title 18, U.S.C. § 1511 is directed at the political and police corruption which makes widespread illegal gambling possible, while Title 18, U.S.C. § 1955 is directed at the illegal gambling itself.
Lehman Brothers Holdings owes more than $600bn to creditors scattered across the US, Europe and Asia, according to the investment bankÂ’s Chapter 11 petition.
The largest unsecured creditors include Citigroup and Bank of New York Mellon, who have around $138bn of exposure to LehmanÂ’s bond debt as indenture trustees.
Buffeytt has $33 billion in goodwill Level three waste; he is in for a penny and a pound and beyond and he would serve as a great poster boy to put in the slammer!
corey - nice! I used it to track my consumption of J&B and it almost exactly mirrors your spikes except when my Greek MIL is here. My doctor will be pleased to finally know the truth.
If Mr. McCain had remained on Silver State's board another four days, his position on the audit committee would have required him to sign off on the company's second-quarter financial statements.
Three weeks after Mr. McCain quit, Silver State had to revise those second-quarter numbers to reflect a loss of $72.3 million, which was larger than previously reported. It warned in the Aug. 15 regulatory filing of "uncertainty about the company's ability to continue as a going concern," a sign the bank's survival was in doubt.
The Huffington Post has reported less than an hour ago, Arizona Congress- man Rick Renzi has been indicted for extortion, money laundering, wire fraud among others. Congressman Renzi (R-AZ) also serves as the Arizona co-chair for John McCainÂ’s campaign for President of the United States.
Jim,
Tell me you traded one day in your life with more information than anyone else in the market had. Have you done that ? Neither have I.
You can't expect 10 years of excess credit to show up in a single trading session. The really big boys have a few things to settle.
I'm betting they big boys are still playing a game of "let's pretend", but that's just my view.
The only thing that is clear to me is that this is not the time to put new money on the table in either direction - unless you are personal friends with the very inside.
Hey folks, someone linked this over at Krugman's Blog. It is not True, but damm it is Truthy. Might give a few folks a chance to smile on a day like today (except that it seems to close to what is actually taking place)
"This is an interesting problem and we are witnessing something new."
...a little like Frankenstein's monster.
Thanks for your thoughtful reply. I have gotten to know this complexity intimately over the past few years (much thanks to CR & Tanta especially)
We could make it a little simpler for the time being: just show us the money trail, or at least who is profiting or will profit, financially or politically. Or generate a list of transactions over $1B in value?
I can't believe that our economy even approaches the ankles of the complexity of biology. The economy probably differs form biology in the sense that the facts are purposefully obfuscated in our economy.
I think you're right on the money regarding simplification. I still haven't heard a convincing argument why we need short positions, let alone derivatives or mbs.
Maybe we need two economies, one which is highly simplified and regulated, and then another where they can do whatever the hell they want. With a firewall between them.
Hmmm...indeed. BAC down, MER trading below par. Thank God that you can still rely on Miss Market to let you know when she thinks a deal stinks. In this case she also seems to have doubts as to whether it'll happen at all.
A lot of damage is being done by every player (businesses, traders, govt) under the confusion between liquid and solvent. The rule is that solvency cannot be cured with liquidity.
We were too busy this weekend with Lehman, please unwind slowly so that we can find another way to transfer risk to taxpayers before this whole thing unravels.
[cd writes:
OT- interesting info on McCains son and campaign mgr...]
LOL! You guys crack me up. Looking way down in the stack to find dirt. Look at Hussein's home purchase deal with convicted felon Rezco, if you want to find something close to the bone. It's the marrow.
bearly - marrow = bridge to nowhere, campaign full of lobbyists, economic foundation is strong, continuing neoconservative foreign policy, drill baby drill
The Sound of Music?
AIG owns Stowe Mountain Resort. AIG's connection to Stowe started when C.V. Starr, the company's founder, invested in the resort in 1946. It is AIG's sole ski business.
At the risk of playing the fool, I implicitly trust Gov. Paterson and view his action as a desperate compromise in the best interest of the State of New York.
That said: can't ya just see the crap-eating grin on the face of the former governor right about now? If not, consider the inevitable S.A.T. question:
Hookergate was to Spitzer and Wall Street as Lewinsky was to Clinton and..(!)
Now BAC is going down hard...the shorts must be sitting in the same room just taking turns hammering these companies...does anyone have the address, I wouldn't mind getting in on the actio
Rule 10b-5: Employment of Manipulative and Deceptive Practices"
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
Come to find out that my Grandmother has an Aunnuity with AIG. NO penalties so I suggested she cash it out. Problem is you can't get a hold of anyone now. They are not answering the phones. If you go to AIG's website the "Contatct us" link is broken.
The House of Representatives plans to debate legislation this month to inject another $50 billion of stimulus into the faltering U.S. economy, mostly with the goal of creating new jobs, a senior House Democratic aide said on Monday.
So BAC is buying MER for $29 a share? Then why is MER selling now for about $19 a share? Something doesn't parse here. IF BAC is paying only in its stock then it should have given the ratio for MER shares.
You get your rally later in the week when the Fed cuts and the Sec finally puts naked shorting back in the history books.
As for AIG, geez, you really think the Fed is going to let Grandma's annuity go to zero.
Don't know how much it will buy late next year, but the money will be flowing.
I think the Fed knows that it has to keep commerce moving, and if propping up the dead, whilst moving forward with an orderly liquidation of the worst offenders allows some of their slightly betters to escape, they are gonna do it.
Look at rule 10-b-5 and think about what it's clear words say. These words were written by the people who "learned the lesson" of the last depression. Look at the words - understand that they were hard learned lessons.
Forgive me, I'm going to post it again:
Rule 10b-5: Employment of Manipulative and Deceptive Practices
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
If AIG gets seriously downgraded by AM Best then it is not a matter of charging lower premiums to get business. Most companies will not place coverage at any price. AIG needs money and needs it now. It appears the soft insurance market is at an end. Get ready for your rate increase as capacity leaves the market.
When you believe in things you don't understand, that, by definition, is superstition. When you trade on things you don't understand.... then you are just stupid.
lisa, simple answer: if you have less than 100k in all of your accounts, nothing.
New bank, new checks, eventually new atm card. Everything works as usual.
Allen, have you checked how much money the Deposit Insurance Fund has lately? And have you compared that figure to the amount of WaMu's insured deposits?
So BAC is buying MER for $29 a share? Then why is MER selling now for about $19 a share?
Investors are uncertain about the details of the plan. It won't close for months, so it's not certain it will go through. There was no due diligence on Merrill so it probably has easy kick-outs or modifications. Merrill still has a whole lot of mortgage securities on their books which no one really knows the value.
lisa, simple answer: if you have less than 100k in all of your accounts, nothing.
If Wamu fails, it is far from clear that "nothing" happens.
The FDIC only has aroudn $45B in its fund, and Wamu has far more than that in "insured" deposits. So, if Wamu fails and fails miserably, then we are in a position where all bets are off.
I would take a bet with odds that Congress would rush overnight to recapitalize the FDIC - however doing so will have other consequences (I can't imagine it would be US Dollar positive).
Remember - the first rule of a panic is to be first (just look at Bear!).
While I'm not thrilled with HSBC - that is my offshore bank account, and that account is getting some more love from me this week.
lisa,
What they are trying to tell you is that if you have less than $100,000 in a "bank" that has FDIC insurance, the FDIC will give you your money even if the "bank" - as a corporation goes bust. There are more complicated rules for folks who hold more than $100,000 in a single account, but I hope than answers your question.
@WTF: Maybe McCain can use his Keating Five knowledge to clean up WaMu. I mean, the guy has had lots of direct experience with failures of large S&Ls, right?
Speaking of Wamu, why no major reports of bank runs yet? This bank is obviously toast and I heard on CNBC that a good percentage (20-30%?) of their depositors had greater than 100K in deposits. Seems to me there should be a huge bank run on Wamu right now.
A few minutes ago as Michele Caruso-Cabrera gushed about Lewis' nerves of steel, it occurred to me: buying MER at an absurd premium is a put on the rest of Wall Street: if we're sitting on the biggest sh*tpile of all when all is said and done, the Fed will HAVE to bail us.
Sloppy and dishonorable, perhaps, but you know what they say, no honor among thieves: and I, Ken Lewis, stand a good shot of keeping the corner office as long as I talk Washington and the financial press through this step-by-step.
This might explain the street's cynicism on BOTH sides of the deal (including BAC, which I would otherwise expect to tank more than it has given the absurdity of the deal at first glance).
P.S. to Michele Caruso-Cabrera: Sorry to finger you on this one...you were nice to me when it mattered, and I know all too well the pressure on you and other on-air types who are actually in touch with reality (Melissa Lee, Rick Santelli, Jane Wells...hmm, did I miss anyone?)
On BAC-ML, I don't know if traders are betting on a deal falling thru, however, since the ratio (stock for stock) has been set, they'll move in tandem to some degree.
IOWs, they're loosely tied at the hip. One's price moves will naturally affect the other's.
Note: In an ideal world, the adjustment would be relative to market caps, but that's probably just a technical issue.
Just why should I buy stocks in the very same companies that help bring the US economy threw their own stupid greed down to it's knees for any reason? F*uk'em.
"buying MER at an absurd premium is a put on the rest of Wall Street: if we're sitting on the biggest sh*tpile of all when all is said and done, the Fed will HAVE to bail us."
Brilliant idea. Not too dissimilar from what Gross did with the purchase of GSE debt, knowing full well that the GSE's would need to be bailed out for the bet to work. And work it did, btw.
"My parents are with AIG."
"Your parents are traitors. Timmy, get the rope!"
first? today?
first!
CNBC is now saying it's 70% off today.
Heh heh.
I have the technology.
first?!
Haloscan messing up?
AIG 4.05 down 8.09(66.64%) now.
Wow. This no news - when an announcement was expected - seems ominous to me.
Best to all.
first
No way
Any word on how the credit markets are doing today?
I setup a site to graph the number of visitors online at CR over time. Mainly for fun, but it might also be a leading indicator of something..
Calculated Risk: Visitors Online
"Today is victory."
-CNBC puppet head putting over today's market
I am sure someone just had a flat tire.
Or AIG is insolvent.
Either way. No biggie.
NY State Governor to Make Statement
I declare a state of nudity shall exist from hence forth and that orgies will be held in the state house at noon every day hence forth
Awesome job, Corey.
Nice MRTG Corey , lets see how it is in a few more weeks.
"State of nudity ..."
As if that would impress Gov. Paterson who is, if you remember, blind ...
Wow. This no news - when an announcement was expected - seems ominous to me.
I agree. Some corporate bozo set expectations before they could deliver? On a weekend?
What a new world.
Has anyone seen the kid who was scared of going to bed?
"Buddy we have AIG"
commodities rallying
JP, clearly seems ominous to investors too - with the price off 2/3 today alone. I can't imagine setting expectations of an announcement - and then nothing. Why not announce a postponement? That would be better than silence.
Best Wishes.
WaMu is a big story that is waiting to be told.
WaMu is a big listing ship waiting to sink.
Just hitting the wires seven minutes ago:
American International Group Cut To Hold From Buy By Citigroup
I hope the advice they sell is better than the advice they give away.
Merrill not doing so well...
sounds to me as if they're timing the markets with all these announcements.
people hang on for news before jumping, and look at that, London's closed for the day.
Buffett is going to buy AIG. . . assuming he gets the price he wants.
When you say we will announce plans before the market opens and you don't - this is what happens
meanwhile John Lewis was asked (on CNBC) if the Merrill marks were valued similarly to the Lehman marks. Short answer: No. Longer non-answer: The Merrill marks were very conservative.
Now to move past the "it can't go lower syndrome" and to graduate to "it will only go lower syndrome"...then we'll know that recovery is just 5 to 32 years away...
Can you say co lat ter all!!
They have to be working on a buyout from Buffet and they are going to kill the shorts...
The Co-later-ator!
Longer non-answer: The Merrill marks were very conservative.
MIKE STARK | Homepage | 09.15.08 - 12:16 pm | #
Was this a way of not saying that the marks were higher than Lehman's but more conservative than BAC's own?
MiTurn writes:
Buffett is going to buy AIG. . . assuming he gets the price he wants.
Unlikely, he's too shrewd for that. Would he buy without knowing AIG's exposure to IKE and Gustav...etc.
AIG still wants FED assistance. They are a 1T company, too big to fail surely.
Here's AIGs statement:
"We seek to calm investors by admitting that these contretempts, exacerbated by our deleterious malfeasance and nefarious shenaningans, is nonetheless soothed by our sweet lexiconic manipulation of the staid situation".
Buffet isn't generally known for overpaying so if AIG is really upside down you can expect something de minimus at best and more likely a novelty investment -- cash secured by the leasing business for example.
Bridge Loan from the state of New York?
Supposedly AIG had buyout offers but turned them down. that's why it is now begging the government.
I setup a site to graph the number of visitors online at CR over time. Mainly for fun, but it might also be a leading indicator of something..
http://lod.com/cr
Will you be offering contracts on that?
The TED spread is up 48% today. It was up 10% Friday. No surprise that there is a lot of stress.
Bloomberg.com:
Personal Finance
TED spread spiked on open from 1.30 to over 2.16, at Noon bouncing around 2.01+
A2/P2 spread at .92 on Friday - will be interesting to see where it settles today
Bridge Loan from the state of New York?
With WS collapsing, you think NY has any money?
Buffett is going to buy AIG. . . assuming he gets the price he wants.
That Buffet boy is SUCH a nice boy. I'll bet he wants to overpay for this nice company too.
As if that would impress Gov. Paterson who is, if you remember, blind ...
He is blind, but he is not dead.
crispy&cole writes:
They have to be working on a buyout from Buffet and they are going to kill the shorts...
I'm not sure why you think Buffet is an idiot. Of course he's talking to an insurance company that's fireselling assets and I'm willing to bet that he finds something in there worth buying, but why would he buy the equity when the good bits are on sale? His views on risky balls of derivative goo are well known....
Damn. Are they going to take this thing into receivership?
I do not really want to do a "How big is the Treasury of New York State?" post.
"Bridge Loan from the state of New York?"
And just where are they going to get the money from? HuMMMMMMMmmmmmm
Bridge Loan from the state of New York?
Er, I don't think so.
Time for a Buffett rumor: AIG is in possible "rescue" talks with billionaire Warren Buffett.
Since all the other Buffett rumors turned out to be true, I guess this one must be too.
Buffett buying? Why would anyone buy a company with more liabilities than assets? Unless AIG can sell off bits an pieces that Buffet would find useful (and profitable) - (and I don't think an airline business is it - not with the uncertainty in the fuel markets) - then I don't see any white horse on the horizon.
That's why AIG said they were looking for a gov't bailout. (Does anyone know where they got the idea that there is a gov't safety net for large financial corporations? They talk about it as if they are going to apply for food stamps - like the benefit is automatically available. Maybe they should be talking to the auto industry... Reliance hasn't worked out too well for them so far, has it?)
Somethings up. Marketwatch: "AIG allowed to access $20 bln in assets from subsidiaries"
Looks like they changed state law to get money from fed
[AIG] Move will allow AIG to post collateral in return for cash
12:16 p.m.
[AIG] AIG allowed to access $20 bln in assets from subsidiaries
Fearing a meltdown on Wall Street, the U.S. presidential candidates sparred on Monday over who could best restore financial health, with John McCain pledging reform and Barack Obama saying hands-off Republican policies were the problem.
WRAPUP 2-McCain, Obama promise Wall Street overhaul
| Reuters
I think that be the one that is going to start haning these bastards on the White House lawn.
The way AIG is structured, Buffet could maybe buy some of the individual pieces clean. Heaven know AIG needs the cash to balance out the toxic waste.
sorry not from the fed from their subsidiaries. State of New York is begging the fed for money now.
Oh, brother.
Every other small business in NY is saddled with onerous state laws but anything, anything for AIG...?
more robbery.
Sounds like AIG is robbing Peter to pay Paul. I would not call this good news.
If this is what their entire "plan" consists of, god have mercy on us all.
Buffett buying something from AIG is not good news for AIG.
You never, ever want to be on the other side of that man's trades.
Sorry, this looks like a bailout to me.
"The way AIG is structured, Buffet could maybe buy some of the individual pieces clean. Heaven know AIG needs the cash to balance out the toxic waste."
Sell the good to break even on your losses and then shut the doors? It might be honorable, but who in American business today would do that???
if Wb is gonna buy aig, he'll pay 80% premmium to market also, right?
Help, Federal government and wall street are running out of fingers. Where is that little dutch girl when you need her?
So if AIGny or whatever subsidiary's 20 billion doesn't get paid back by the mothership for whatever reason, is NY state backing it up?
Anonymous writes:
Fearing a meltdown on Wall Street, the U.S. presidential candidates sparred on Monday over who could best restore financial health, with John McCain pledging reform and Barack Obama saying hands-off Republican policies were the problem.
... and v.p. candidate Palin offered to debate in her bikini.
AIG -- Another Institution Gone?
The market loves the plan. Back over $6.
AIG from 3.60 to 6.00 in a few seconds...thanks for talking me out of this trade..
So they are talking to people about stuff?
That is the plan?
Do you realize that in less than 18 hours we've gone from Lehman to Merrill to AIG?
If AM Best knocks them down to an "A" rating, the insurance end of AIG will probably survive. (Not that Best's is all that responsive to news--they're as bad as the bond rating firms.) An "A-" rating will put a lot of stress on them, as they'll probably lose renewals over it. Otherwise, they'll have to cut rates to make up for the risk to the policyholder, which certainly won't help profitability. Could very well see them on the verge of a death spiral.
Does this line from the FT article jump out at anyone who knows anything about why this restriction was put into place to begin with?...you know, the GD...
"The Fed added that it was suspending a rule that normally prohibits deposit-taking banks from using deposits to help finance their investment banking subsidiaries to allow them to fund activities normally funded in the repo market on a temporary basis until January 30 2009."
It sounds to me like NY is allowing AIG to tap assets that have been reserved to pay claims of its insurance subsidiaries.
Just what you want to hear if you have a policy with them, huh?
I'll bet tens of thousands of people are trying to get their money out of AIG. If it was a bank, the lines would be around the block.
Actually this sounds like they couldn't find capital and know a downgrade is going to hit forcing the posting of additional collateral they -- until now -- couldn't get access to. So, my guess is Moody's hits them before the end of the day and they post money from the subs. This of course screws the subs and generates all kinds of litigation -- against NY state I'd think.
If that read is correct, this is not the smartest move in the playbook...
Agreed. I think this "plan" is a terrible one. It smacks of incredible desperation. A ratings downgrade, if someone has the guts to do it, is going to send AIG over the edge regardless of stealing 20bn from Peter to pay Paul.
The fact that this situation has gotten so desperate in a few hours--yesterday morning an imminent failure of AIG was not on the radar screen--is almost too much to apprehend.
This means the Fed said no..
The big crash is the only way to solve this mess.
It allows for simultaneous, across the board deleveraging...of all counterparties.
If everyone goes broke at the same time, then no one is broke.
You literally wipe the slate clean and start over.
Will anyone in power actually realize this soon enough to suspend several years of misery for us all?
President Bush made a statement and did not get a thread. I bet he going to get really drunk over that dis.
Even if AIG gets 20 Billion against their subsidiaries does this not leave them another 20 Billion short?
I am assuming there is some kind of emergency action by the State of New York to allow taking cash from AIG subsidiaries possible?
This sounds like serious moral hazard. How do I insure against this hazard?
So let me get this straight. The State of New York is allowing AIG to raid Grandma's annuity fund to the tune of $20 billion in order to plug the hole in their balance sheet from all their bad CDS trades.
Have I got that right?
uncle toby writes:
If AM Best knocks them down to an "A" rating, the insurance end of AIG will probably survive. (Not that Best's is all that responsive to news--they're as bad as the bond rating firms.) An "A-" rating will put a lot of stress on them.
Nope, nope, nope ....... this line of thinking is for pro's only. I was willing to trade "cans of sardines", but hype is hype -
We are on the edge, and that reasoning is hype.
Don't be angry, that's just my opinion.
I'm glad we got the obligatory Buffett rumor out of the way by lunchtime.
Yup - combine that with a massive rate cut tomorrow and they may just get away with it.
I also suppose that absent all of this volatility some pretty powerful players would be without trans fees.
ext up, C attack.
AIG is propagating the swindle of the century.
My parents are with AIG - and AIG is raiding their deposits right now with New York State blessings.
BWAAAAAAAAHHHH!!!
"This sounds like serious moral hazard. How do I insure against this hazard?"
You don't. You are a mouse and there are elephants stomping around here.
Ah, it's not possible to have a failing insurer in this country without a good Buffett rumor to goose it once or twice.
My mental tally indicates that CNBC Buffett rumors over the last 2 years are 1 for 22.
772 Visitors Online
Donald Trump will fix this problem.
Even I couldn't prop up big shitpile.
BAC down 16% .... Hmmmmmmmmmm.
777 visitors online. Clear all shorts
Today's thread theme:
YouTube - A Few More Rednecks
ice timing on the Buffett rumor. market was sliding downwards parabolically.
FTC is no longer a working government unit, so any antitrust problems for Buffett may not be problematic.
We are on the edge, and that reasoning is hype. Don't be angry, that's just my opinion.
Popeye | 09.15.08 - 12:33 pm | #
No, Uncle Toby's line of reasoning is pretty accurate. Many large companies have an "A or better" requirement on all commercial insurance they buy. I was writing for Lloyd's when it went to A- and it was very, very difficult. A- would be serious stress, B+ would be fatal.
...anti-trust concerns will be waved along with arms-length transactions in order to facilitate steadying in the market...
I have liquidity problem too, how about me?
The truly sad part of the story of the past few weeks is that the vast majority of Americans -honest people who go to work everyday and take care of their kids - have no idea what has happened or what it means - {ok, I don't know what it means either}.
ice prop for exits.....again thanks for the free money H.G.
Ciao
MS
I'd like to thank CR and Tanta for having me over this morning, thanks kids, I'm really enjoying the show. Any news on The RICO indictments yet?
lunch in the boardroom I guess...
Patterson is the latest patsy to step up and ask for help. It's hard to believe the Fed hasn't already said no. They knew about this last night.
idoc,
There must be a Buffet Rumor Issuance office somewhere.
Marty Schwartz is heading to the bank to get his gold out, again.
mw
ARE the markets happy over this?
emo-
That's how I read it as well.
Ciao
MS
AIG hovering around $6
MS, money is never free unless it comes from hank or be
well this mouse still wants to know where the other 20 billion comes from.
and if they get a down grade they will need even more....then what?
i thought insurance companies were supposed to be fiscally conservative to cover their future liabilities that are built from day one.
guess i will open my open insurance shop. let's call it "no shit insurance."
as the elephants are now just stomping around in their own crap and all penned up and the zoo keeper keeps feeding them rather than releasing them to the wild and let nature take its course.
NY to loan AIG 20Billion? wow.
Yalt,
I wasn't criticizing the validity of the reasoning. My point was that line of analysis "is for pro's only". The market is not falling generally, but it is cascading in parts.
As for me, I'm struggling to be patient.
corey - nice work!
i respect Buffett overall but his policy of refusing to refute rumors about his takeout attempts is wrong.
DB-
No that bounce, that you knew was coming, was free. That's how I treat it.
Found money...nothing more or less.
Ciao
MS
Maybe if AIG went bust, we'd finally get a 700 point drop in the Dow, long overdue, or a closure of the exchange, also something sorely needed. Naw, nothing will send this teflon market down much. I mean it is bouyed up by all the hot air put out by the bullfools and their lungs are indestructible.
Did anyone ever see the movie Spaceballs, with its villain Pizza the Hutt (spoof of Jabba the Hutt). Basically a big mound of sentient, collapsing pizza goo. Every once in a while a big hunk of cheese would drip disgustingly off his head and fall into his mouth, and he would gulp it down. (Needless to say, he couldn't move anywhere)
That's what Wall Street reminds me of now.
Corey writes:
I setup a site to graph the number of visitors online at CR over time. Mainly for fun, but it might also be a leading indicator of something..
Thanks, Corey! Now we can track the CRVIX. If you can only set up an ETF on this, the hedge funds will beat your door down.
Jim,
It'll come down like the levies...
?? Syndicated Gambling: Sections 801-811 of the Organized Crime Control Act of 1970, which amended Title 18, United States Code, by adding Sections 1511 and 1955, are designed to combat "illegal gambling business" or syndicated gambling. Title 18, U.S.C. § 1511 is directed at the political and police corruption which makes widespread illegal gambling possible, while Title 18, U.S.C. § 1955 is directed at the illegal gambling itself.
The CRVIX?
How would we speak that out?
AIG and IB's trending down again. that didn't last long.
Lehman Brothers Holdings owes more than $600bn to creditors scattered across the US, Europe and Asia, according to the investment bankÂ’s Chapter 11 petition.
The largest unsecured creditors include Citigroup and Bank of New York Mellon, who have around $138bn of exposure to LehmanÂ’s bond debt as indenture trustees.
FT.com / In depth - Lehman’s outstanding debts total $600bn
hmmmmm
AIG headed back to $5 looks like
that didn't last long
mal,
His bodyguard ate him?...Kind of a modern-day eating your seed-corn analogy?
hmmmmmm
i respect Buffett overall but his policy of refusing to refute rumors about his takeout attempts is wrong.
C'mon, he's frontrunning them. How else do you amass that much money.
And they arent cutting off the dividend?! You've got to be kidding me. Surely the insurance regulators arent as dumb as Paulson in that regard
Buffeytt has $33 billion in goodwill Level three waste; he is in for a penny and a pound and beyond and he would serve as a great poster boy to put in the slammer!
CNBC to strategy blonde: Should we buy or sell?
Blonde: Fuck if I know.
i bet Chris Cox is outraged about all these rumors to goose the mkt!
AIG is done...
Patterson is like the blind leading the...oh wait nevermind
karelian : LOL
NYS action may be an attempt to force the feds' / Fed's hand.
"Bail out AIG, or we'll let them raid Grandma's annuity fund.
Your move."
Checkmate NY State..
corey - nice! I used it to track my consumption of J&B and it almost exactly mirrors your spikes except when my Greek MIL is here. My doctor will be pleased to finally know the truth.
Nemo, isn't Patterson supposed to have some integrity?
Buffet: Nope
why would the Fed care about Grandma's annuity fund?
the two F**** senators are bickering, when there the one with oversight....as F***** sitting senators....
the only one involved right now outside the inside is Palin.
Anyone have any idea of what AIGs auto finance unit is worth? Maybe Cerberus will pick it up. AIGMAC?
OT- interesting info on McCains son and campaign mgr...
WSJ Error Page - WSJ.com...
If Mr. McCain had remained on Silver State's board another four days, his position on the audit committee would have required him to sign off on the company's second-quarter financial statements.
Three weeks after Mr. McCain quit, Silver State had to revise those second-quarter numbers to reflect a loss of $72.3 million, which was larger than previously reported. It warned in the Aug. 15 regulatory filing of "uncertainty about the company's ability to continue as a going concern," a sign the bank's survival was in doubt.
The Huffington Post has reported less than an hour ago, Arizona Congress- man Rick Renzi has been indicted for extortion, money laundering, wire fraud among others. Congressman Renzi (R-AZ) also serves as the Arizona co-chair for John McCainÂ’s campaign for President of the United States.
sure a lot of govs in the news lately
Guess that says something about the pres... just say'
Jim,
Tell me you traded one day in your life with more information than anyone else in the market had. Have you done that ? Neither have I.
You can't expect 10 years of excess credit to show up in a single trading session. The really big boys have a few things to settle.
I'm betting they big boys are still playing a game of "let's pretend", but that's just my view.
The only thing that is clear to me is that this is not the time to put new money on the table in either direction - unless you are personal friends with the very inside.
Hey folks, someone linked this over at Krugman's Blog. It is not True, but damm it is Truthy. Might give a few folks a chance to smile on a day like today (except that it seems to close to what is actually taking place)
MinutesII
CR should put up a link to the new visitor traffic site.
It's a good thing New York's economy is so robust or all of this would start to worry me.
Re: Blonde: Fuck if I know.
I love that kind of filth, but WTF does it have to do with anything?
@Syvanen from previous thread:
"This is an interesting problem and we are witnessing something new."
...a little like Frankenstein's monster.
Thanks for your thoughtful reply. I have gotten to know this complexity intimately over the past few years (much thanks to CR & Tanta especially)
We could make it a little simpler for the time being: just show us the money trail, or at least who is profiting or will profit, financially or politically. Or generate a list of transactions over $1B in value?
I can't believe that our economy even approaches the ankles of the complexity of biology. The economy probably differs form biology in the sense that the facts are purposefully obfuscated in our economy.
I think you're right on the money regarding simplification. I still haven't heard a convincing argument why we need short positions, let alone derivatives or mbs.
Maybe we need two economies, one which is highly simplified and regulated, and then another where they can do whatever the hell they want. With a firewall between them.
BAC down 16% .... Hmmmmmmmmmm.
BB | 09.15.08 - 12:37 pm | #
Hmmm...indeed. BAC down, MER trading below par. Thank God that you can still rely on Miss Market to let you know when she thinks a deal stinks. In this case she also seems to have doubts as to whether it'll happen at all.
Downey looking good today.
aked kings writes:
Re: Blonde: Fuck if I know.
I love that kind of filth, but WTF does it have to do with anything?
Fuck if i know.
99 Lead Balloons said:
The CRVIX? How would we speak that out?
Hell if I know. "See-are-vihcks"? It's the Calculated Risk Volatility Index. I think Corey's got a great sentiment indicator here.
Uncle B,
Im sorry to bring disgrace to myself by being here, I'm sorry!
Fallout from Hanky's bazooka. This shitpile is too big to bail.
Cheers,
A lot of damage is being done by every player (businesses, traders, govt) under the confusion between liquid and solvent. The rule is that solvency cannot be cured with liquidity.
Only 734 visitors? There were >1000 at midnight. WTF?
Frankly, I consider all derivative players to be a disgrace, but then, I am honest - so, it may not be a fair comparison.
Paulson to speak soon. Should be interesting.
是什么令我伤心，是要知道，总有一天，我们或许能够理解我们所说的话在这里在这方面的语言。
Fed: "Formal no comment"
We were too busy this weekend with Lehman, please unwind slowly so that we can find another way to transfer risk to taxpayers before this whole thing unravels.
mal writes:
Did anyone ever see the movie Spaceballs,
Most apropos line from that Mel Brooks movie--"They're all assholes, I'm surrounded by assholes."
Paulson will have a beret on and gold chains! Watch and learn!
maybe they should have let long term capital management fail long ago (LTCM)
I do too.
I'm long the cervix.
What's the matter Cornel Sanders?
Chicken?
cnbc saying the fed will do bridge loan to aig?
AIG stock is moving up...stick save by the Fed
[cd writes:
OT- interesting info on McCains son and campaign mgr...]
LOL! You guys crack me up. Looking way down in the stack to find dirt. Look at Hussein's home purchase deal with convicted felon Rezco, if you want to find something close to the bone. It's the marrow.
99, I didn't even get your joke before. LOL. That's just wrong.
"This sounds like serious moral hazard. How do I insure against this hazard?"
AIG will sell you moral hazard insurance for $40 billion.
Dark Helmet: So, Lone Star, now you see that evil will always triumph because good is dumb.
BAC melting down nicely today. It will be ironic if the merger takes down 2 companies instead of one.
And LOL to going long the cervix.
The short short version :
Do you?
Ken Lewis : yes.
Do you?
Mr Thain : yes.
OK kiss her, you're married!
LEH up to 23-cents... I smell a rally.
Yah, crisis over, move on rubes
Well alright then. I'll see you guys in November?
AIG was going to announce, but the press release is locked up in a suitcase and no one knows the combo....
it's...1.....2......3.....4......5.....
...what kind of idiot....
Well, at least there isn't a recession!
aked kings writes:
Yah, crisis over, move on rubes
suk gas smarty pants - no one trust the ground you stand o
OK kiss her, you're married!
You forgot the part if anyone objects. I still haven't figured out why the distance between current MER and par is so large
bearly - marrow = bridge to nowhere, campaign full of lobbyists, economic foundation is strong, continuing neoconservative foreign policy, drill baby drill
The Sound of Music?
AIG owns Stowe Mountain Resort. AIG's connection to Stowe started when C.V. Starr, the company's founder, invested in the resort in 1946. It is AIG's sole ski business.
Carlomagno, Nemo:
At the risk of playing the fool, I implicitly trust Gov. Paterson and view his action as a desperate compromise in the best interest of the State of New York.
That said: can't ya just see the crap-eating grin on the face of the former governor right about now? If not, consider the inevitable S.A.T. question:
Hookergate was to Spitzer and Wall Street as Lewinsky was to Clinton and..(!)
bearly,
whatever..I think thier all rats..but this guy is one big rat..
FED has hired MS to try to get AIG bridge loan?
Rofl.
Next time someone calls to abolish the FED, i just may not dismiss it offhandedly.
....it's big trouble when AIG is allowed to take money from one pocket to put in the other pocket...the one with the hole in it...
This is what I think: AIG stock
Can I haz "suck gas smarty pants" as new handle?
GS breaking down almost below Mar levels. ominous.
So, AIG is choking on the shit it bought, and we're expected to pay the tab.
Nice.
Cheers,
Now BAC is going down hard...the shorts must be sitting in the same room just taking turns hammering these companies...does anyone have the address, I wouldn't mind getting in on the actio
LEH volume now about 1/2 the outstanding shares.
That begs the obvious question: Who hasn't sold, and why ?
C reassures employees that it has adequate liquidity...uh oh. Were there some rumors floating around the offices?
Remainder of stock is being pushed through Fed window at $75/share.
Rule 10b-5: Employment of Manipulative and Deceptive Practices"
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
Popeye says that about sums it up.
Just saw via AP that Richard Wright (keyboards for Pink Floyd) has died of cancer.
Sad day for music...
Ciao
MS
Come to find out that my Grandmother has an Aunnuity with AIG. NO penalties so I suggested she cash it out. Problem is you can't get a hold of anyone now. They are not answering the phones. If you go to AIG's website the "Contatct us" link is broken.
Nice
The House of Representatives plans to debate legislation this month to inject another $50 billion of stimulus into the faltering U.S. economy, mostly with the goal of creating new jobs, a senior House Democratic aide said on Monday.
House to vote on $50 billion econ stimulus plan
| Reuters
Take it out of Peters right pocket and put it in his left one an hope the dumb bastard is stupid enough to spend it.
I think Ken Lewis is an egomaniac numbskull.
No. A fukcing idiot.
aked kings:
Look deeply into my one good eye. Disconnect the modem.
If anything major happens I'll have Erin Burnett turn around 3 times and wink as a signal.
I'm a Mog. Half man, half dog. I'm my own best friend.
I think Ken Lewis is an egomaniac numbskull.
No. A fukcing idiot.
bearly | 09.15.08 - 1:21 pm | #
It's all perspective--I think he measures success by the size of his bank accout--by that measure, he's a fucking genius.
So BAC is buying MER for $29 a share? Then why is MER selling now for about $19 a share? Something doesn't parse here. IF BAC is paying only in its stock then it should have given the ratio for MER shares.
Okay folks.
Put on your hip waders and buy financials.
You get your rally later in the week when the Fed cuts and the Sec finally puts naked shorting back in the history books.
As for AIG, geez, you really think the Fed is going to let Grandma's annuity go to zero.
Don't know how much it will buy late next year, but the money will be flowing.
I think the Fed knows that it has to keep commerce moving, and if propping up the dead, whilst moving forward with an orderly liquidation of the worst offenders allows some of their slightly betters to escape, they are gonna do it.
Huge relief rally coming.
Someday this war's gonna end...
Look at rule 10-b-5 and think about what it's clear words say. These words were written by the people who "learned the lesson" of the last depression. Look at the words - understand that they were hard learned lessons.
Forgive me, I'm going to post it again:
Rule 10b-5: Employment of Manipulative and Deceptive Practices
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
jim writes:
So BAC is buying MER for $29 a share? Then why is MER selling now for about $19 a share?
It depends on what the meaning of "is" is.
(in "is buying", i mean.)
BAC down almost 18%....hmmmmmm x2
Question from someone who understands all this very little, if at all:
What happens to WaMu banking customers if WaMu fails? Nothing? Are they affected?
Jim-
It did already..... (.895) however the haircut BAC is getting is making that offer a bit ah....optimistic at this point.
Ciao
MS
If AIG gets seriously downgraded by AM Best then it is not a matter of charging lower premiums to get business. Most companies will not place coverage at any price. AIG needs money and needs it now. It appears the soft insurance market is at an end. Get ready for your rate increase as capacity leaves the market.
lisa, simple answer: if you have less than 100k in all of your accounts, nothing.
New bank, new checks, eventually new atm card. Everything works as usual.
If over 100k in any combination of accounts, go to FDIC: Federal Deposit Insurance Corporation
and review your coverage.
okay?
Allen that is one ballsy call.
Hope you have your new handle picked out.
Waiting for that paulson bounce.
LEH is a component of the S&P 500 (although only 0.02% weight). How long does it take for S&P to remove a component and replace with a better one ?
LEH was replaced today.
But MS, the arbs should have moved in already if they believed the deal was happening.
And there is STILL a $3 gap between MER and it's implied value from BAC stock.
Somebody believes the deal is not happening. (And sorry for beating a dead horse.)
"Put on your hip waders and buy financials."
I'm not into juggling a bunch of handgernades with the pins all pulled. Knock yourself out but I think I'll stand here by the door and watch.
Allen M/Joliet Jake:
Thanks much. A friend of mine is wondering if he ought to be worried or not...
He isn't gonna have $100 K in there.
I tried to buy AIG in the $4s this AM. My screen said "NO CAN DO!"
When you believe in things you don't understand, that, by definition, is superstition. When you trade on things you don't understand.... then you are just stupid.
Merrill is fraying badly... there are half a dozen brush fires waiting to ignite.
The point about the blonde wasn't the filth - it's just amusing that CNBC tries to find strategists that would declare that this is a bottom.
And they are sitting there with this dim animal panic in their eyes.
lisa, simple answer: if you have less than 100k in all of your accounts, nothing.
New bank, new checks, eventually new atm card. Everything works as usual.
Allen, have you checked how much money the Deposit Insurance Fund has lately? And have you compared that figure to the amount of WaMu's insured deposits?
I'll let you guess which one is bigger.
Jim-
absolutely correct....now why??
I have no idea but IMO Lewis said he did no DD so may be that is why.
I actually thought it was utter crap yesterday when the only "source" was the rupert rag.
Ciao
MS
So BAC is buying MER for $29 a share? Then why is MER selling now for about $19 a share?
Investors are uncertain about the details of the plan. It won't close for months, so it's not certain it will go through. There was no due diligence on Merrill so it probably has easy kick-outs or modifications. Merrill still has a whole lot of mortgage securities on their books which no one really knows the value.
BTW this is the "wrench" in the whole deal:
'implied value '
Ciao
MS
the whole MER/BAC thing was just to put the fear of god into the shorts.
worked too.
hank may be a lot of things, but stupid isn't one of them.
If Wamu fails, it is far from clear that "nothing" happens.
The FDIC only has aroudn $45B in its fund, and Wamu has far more than that in "insured" deposits. So, if Wamu fails and fails miserably, then we are in a position where all bets are off.
I would take a bet with odds that Congress would rush overnight to recapitalize the FDIC - however doing so will have other consequences (I can't imagine it would be US Dollar positive).
Remember - the first rule of a panic is to be first (just look at Bear!).
While I'm not thrilled with HSBC - that is my offshore bank account, and that account is getting some more love from me this week.
SEC's Co(X)cks : "US Economy Stronger After This Weekend's Events"
Could this guy be a bigger stooge?
Give me AIG 10k@4.50
please
Wow, um, what's happening at GS?
Popeye, I suppose clear language never stopped anyone if rule 10-b-5 is essentially unenforced. Guess we're doomed to repeat history anyway.
funniest thread ever
Look just put my money where my mouth is.
1000 shares of AHR (a favorite blackrock mezzanine reit of mine) at $5.30 in my retirement account.
Gotta have some faith that this is not the end entirely.
If so, well, I lose so more money.
I won't be changing my handle.
Someday this war's gonna end...
It sounds to me like NY is allowing AIG to tap assets that have been reserved to pay claims of its insurance subsidiaries.
Earlier thread stated that banks would be allowed to use deposits for investment purposes.
So, we're going to put the little guys at the risk to bail out the professionals.
Dammit Rich. Several months ago you were talking about the carriers and now you got a couple asshat people starting to make a fuss and here we are.
no offense, Rich, keep your mouth shut. (
)
AIG is the key, if it goes down, BAC deal with MER may be in trouble.
Cox goes by the old axiom
"What doesn't kill ya makes you
A) Stronger
B) Dumber
C) A and B
D) Liquidated
Goldman Suks new 52 week low -11% get those bastards.
LEH was replaced today.
Nothing announced yet, per the S&P site
So, if Wamu fails and fails miserably, then we are in a position where all bets are off.
What do you mean by "if" WaMu fails? Is this not already a foregone conclusion?
666 Visitors Online
McCain is lecturing us in economics now! Wants to clean up wall st. he says.
second repo. done today...
THis one "may" say the rate cut isn't a done deal.
Temporary Open Market Operations - Federal Reserve Bank of New York
$109.5b submitted.....$50b accepted.
These are the largest submissions in one day I have ever seen.
Accepting half of the second one when just 10% of the first one was accepted says to me that a rate cut might not be done......
Ciao
MS
re Popeye & 10-b-5:
What? Fraud is . . . illegal??
Will somebody change McCain's diaper and put him down for a nap while the grownups talk?
lisa,
What they are trying to tell you is that if you have less than $100,000 in a "bank" that has FDIC insurance, the FDIC will give you your money even if the "bank" - as a corporation goes bust. There are more complicated rules for folks who hold more than $100,000 in a single account, but I hope than answers your question.
New thread on NY Fed meeting concerning AIG.
best to all.
@WTF: Maybe McCain can use his Keating Five knowledge to clean up WaMu. I mean, the guy has had lots of direct experience with failures of large S&Ls, right?
MS,
"$109.5b submitted.....$50b accepted."
Yeah, that's a real pile.
Cheers,
CRVIX?
I would call it "crevice"
it's apropos and not so naughty either.
I will monitor the crevice carefully.
Crispy
does anyone have the address, I wouldn't mind getting in on the action
you are here
Speaking of Wamu, why no major reports of bank runs yet? This bank is obviously toast and I heard on CNBC that a good percentage (20-30%?) of their depositors had greater than 100K in deposits. Seems to me there should be a huge bank run on Wamu right now.
YTL, why not monitor the crack spread instead?
@Put on your hip waders and buy financials.
Thinking about that.
@Accepting half of the second one when just 10% of the first one was accepted says to me that a rate cut might not be done......
Nice, MS. Thanks.
Has anyone asked McCain what he thinks about the changes to securities laws that his buddy Phil Gramm pushed through in 2004?
bearly, Mel, jim, yalt:
Now I get it. Now I finally bleepin' GET IT.
A few minutes ago as Michele Caruso-Cabrera gushed about Lewis' nerves of steel, it occurred to me: buying MER at an absurd premium is a put on the rest of Wall Street: if we're sitting on the biggest sh*tpile of all when all is said and done, the Fed will HAVE to bail us.
Sloppy and dishonorable, perhaps, but you know what they say, no honor among thieves: and I, Ken Lewis, stand a good shot of keeping the corner office as long as I talk Washington and the financial press through this step-by-step.
This might explain the street's cynicism on BOTH sides of the deal (including BAC, which I would otherwise expect to tank more than it has given the absurdity of the deal at first glance).
P.S. to Michele Caruso-Cabrera: Sorry to finger you on this one...you were nice to me when it mattered, and I know all too well the pressure on you and other on-air types who are actually in touch with reality (Melissa Lee, Rick Santelli, Jane Wells...hmm, did I miss anyone?)
On BAC-ML, I don't know if traders are betting on a deal falling thru, however, since the ratio (stock for stock) has been set, they'll move in tandem to some degree.
IOWs, they're loosely tied at the hip. One's price moves will naturally affect the other's.
Note: In an ideal world, the adjustment would be relative to market caps, but that's probably just a technical issue.
PS- CR and Tanta, add my thanks an admiration.
"Put on your hip waders and buy financials."
Just why should I buy stocks in the very same companies that help bring the US economy threw their own stupid greed down to it's knees for any reason? F*uk'em.
Us and them
And after all we're only ordinary men
Me, and you
God only knows it's not what we would choose to do
Forward he cried from the rear
And the front rank died
The General sat, and the lines on the map
Moved from side to side
Black and Blue
And who knows which is which and who is who
Up and Down
And in the end it's only round and round and round
Haven't you heard it's a battle of words
The poster bearer cried
Listen son, said the man with the gun
There's room for you inside
Down and Out
It can't be helped but there's a lot of it about
With, without
And who'll deny it's what the fighting's all about
Out of the way, it's a busy day
I've got things on my mind
For want of the price of tea and a slice
The old man died
"buying MER at an absurd premium is a put on the rest of Wall Street: if we're sitting on the biggest sh*tpile of all when all is said and done, the Fed will HAVE to bail us."
Brilliant idea. Not too dissimilar from what Gross did with the purchase of GSE debt, knowing full well that the GSE's would need to be bailed out for the bet to work. And work it did, btw.
o aig news from paulson...no backstop yet..
What entity wants insurance from a company rated lower than themselves?
1000 shares of AHR (a favorite blackrock mezzanine reit of mine) at $5.30 in my retirement account.
Any reason you didn't go for more C?
C is my creditor, who do you think has been dumb enough to finance me at 2.9% until I pay it off/
I would never own them.
Someday this war's gonna end...
I was talking AHR-C
I still have one of those 2.9% deals from 2004 going too LOL
They hate me because I never miss a payment.
And have another Citbank card to do my shopping on, of course.
We are proud to announce a new product at Leftys:
New York Lube
Stock up now, this is gonna fly off the shelves.
idoc writes:
i respect Buffett overall but his policy of refusing to refute rumors about his takeout attempts is wrong.
idoc | 09.15.08 - 12:46 pm | #
If he refuted one, then the creadibility of any others he did not refute would be enhanced. A consistant policy makes sense.
Ok..the bar will reopen with only 1 bartender.........not 8.
There will be 2 waitresses.....not 20
And the selection of beers will be 6 or 8.....not 500.