Let us all become followers of St. Francis of Assisi--poverty is good.

Common and preferred dividends wiped out, but subordinate debt is protected.

What am I missing? I see nothing here.

LLiz:

Not sure that I agree with the St Francis comment.

In 'net speak, "Poverty is Good" is PIG.

LOL.

Really, ROFL.

TTFN. Heading out to Lefty's for Gin and Vaseline.

"Max writes:
"the largest bailout EVER"?

I think the Marshall Plan was bigger."

Ah, irony. Or faint praise at best.

It could've been worse. Eventually supposed to go into run off. I wonder who they think is going to take over?

A bone only thrown to the Chinese.

And explicitly kicked down the road to the next administration.

I think that they think the GSE's business will eventually be taken over by a covered bond market as in Europe and so there will be no need for any GSEs?

Treasury is initiating a temporary program to purchase GSE MBS.

US troops are still on temporary station in Germany while the impacts off of WW-II are allowed to run off.

This is not capitalism. This is a bunch of preppies cooking up a scheme in the bar car on the commute back home to Greenwich.

Then, to address systemic risk, in 2010 their portfolios will begin to be gradually reduced at the rate of 10 percent per year, largely through natural run off, eventually stabilizing at a lower, less risky size.

I guess starting 2010 it will be difficult to buy good 3A, US guranteed bonds.
My realtor in 2006 said builders are no longer building.

Where is the rally monkey? How does this pop the market? We now go below the previous lows, until a 50 basis point cut on a Sunday night when the leaves start turning colors.

BJS, how does a market ever function properly if it rewards failure?

Haloscan says 493... on a Sunday... before noon. What time does Lefty's open ? Do they have lots of inventory ?

Comrade Paulson speaks, but it is all so complicated. Why not just pull out the bazooka and demand our money?

Time-out!

He pretty much laid this on the feet of Congress. He's playing the role of the adult. Basically this whole plan is a stop-gap so congress can decide what it wants to do.

So when was the last time Congress took on a complex issue like this with effect? I know, I can't remember either...

Dear FED:

Now, hasn't this whole process been much easier then recognizing the R/E bubble 3 years ago and popping then?

EZ

[Then Hank gets into one of the lifeboats and paddles away.]

Heli-Ben has supplied black copters for Paulson and Crew so they don't need the lifeboats washed overboard.

Haloscan says 493... on a Sunday... before noon. What time does Lefty's open ? Do they have lots of inventory ?

Well, Kick-off is in an hour.

d) brings in new money to buy distressed assets

Here, let me give you this shiny new piece of paper, for that dirty old one. Look, it even has a pretty picture on it.

Or in the words of Bullwinkle, "This time for sure!"

"...and there is a very good chance McCain would still be elected..."

Well, maybe. But the Dems have just been handed the Mother of All Campaign Issues: the biggest problems since the Great Depression. The economy is the mother lode of political mining. However, they have to find a way to package it so Joe 6 can catch the issue in a sound bite.

Treasury is initiating a temporary program to purchase GSE MBS.

Here's the real bailout. Taxpayers will now directly support the housing market.

We already are, via the implicit guarantee of Agency debt. The fact that the foreign central banks could force the takeover show the guarantee is ironclad in spite of all previous denials. For the Treasury to buy GSE MBS directly actually makes good financial sense, because the gov borrows the money at T-bill rates, not Agency rates.

The second step Treasury is taking today is the establishment of a new secured lending credit facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

And just how many windows are they gonna open on this submarine?

Herb Allison's Enron connection? A profile I just found. Gulp.

Economic Principals » Blog Archive » Something to Think About

Now GM, Ford and Chrysler want their bailouts, too!

"General Motors Corp., Ford Motor Co. and Chrysler LLC will be launching a campaign in the coming days to secure at least 25 billion dollars in federal loans to help get past the current economic malaise.

"This isn't a bail out," said Greg Martin, Washington spokesman for GM. . ."

No mention of the serious antitrust issues here, which would give standing to equity or debt holders to challenge the acquisition under the Clayton act as a restraint of trade. No one could doubt that authorities would have blocked a merger of Fannie and Freddie as private companies. The antitrust argument would run that two dominant competitors have now been taken under single control, ie, that the Treasury has taken over control of two former competitors, which will have the effect of totally eliminating competition between them. Congress could have included an explicit exemption in the rescue bill, but because it did not, the clear intent that is that this acquisition is subject to the antitrust laws. Thus, I expect that as with Bear Stearns, equity holders will have to be bought off with a significant share price, or granted an injunction to block the takeover.

"Isn't it a little odd, F&F get into trouble but the talk is that they will pull through. The dollar rebounds for questionable reasons and THEN we find the "books were not correct" and now we get a new dollar tanking event. Seems so well planned. If the dollar was at its lows and this happened we be looking at serious problems but they took the time to pump it by fudging the books."

Exactly. Funny how that seems to happen all the time. We all know or strongly suspect Citi, WaMu, Lehman and most others are cooking their books too. Monetization of debt will be the new fad. Good luck to either McCain or Obama. They're going to need it.

I wonder who they think is going to take over?

Why should the People's Bank of China invest hundreds of billions in debt securities when it has more control just setting up a new commercial front for its operations.

China holds $500B in treasuries -- on a 10:1 leverage basis that's $5T in working capital to lend out.

With the GSEs out of the picture and all the banks choking on their bad beds 2003-2006, that leaves daylight for the Peoples Bank of New America.

You want a loan, they've got the money to lend!

They don't do warehouse lines, you're dealing directly with the money.

Ad if a branch's loan vintage goes south the branch gets a visit from the mobile justice van and the branch has to hire new LOs.

Hey Ben! Keep those dollars coming their going to need them. Oh, have we reached the bottom yet in the housing/financial/consumer/commodity markets..

If the market is to make a big run Monday I would have expected the better than tepid action we saw Friday. Someone would have gotten a heads up on the pending details of the deal and taken their positions. That's the way crony capitalism works.

If anything this deal makes an official announcement to the world that the US financial crisis is very bad indeed. There is no room for denial anymore. Does this instill confidence in markets that depend so much on foreign capital?

So where does it say that PIMCO and foreign investors are off the hook? Where is a statement about bonds....???

Question for you..

Why does Mike In Long Island's Yahoo links show major holders of the common, and nothing on the preferred..

If the preferred are toast, or down big too, I'd like to know who owns THEM, the common have been a call option for a while..

hmm, Japan has been in run-off mode since Aug 2004, when its holdings peaked at $720B.

In 2003 Japan's holdings shot up from $385 to $545, a pace that continued until topping out August 2004.

The cynical side of me suggests that this loading up was not unrelated to the 2004 elections.

Sure hope Capital Research Global Investors got their $2.3 BILLION out of FNM when they had the chance, cuz otherwise it would suck to have all these rich people lose their shirt.

Another attempt to have their cake and eat it too.A bulimic I know told me it just doesn't taste the same the second time...

He is counting down the seconds until he can run for this shit show (see MTP from bejing where he said he is gone in 5 months)

I think Hank should stay on regardless of who wins.

Seriously. Wall Street largely made this mess, and the BSDs of Wall Street are going to have to figure out how to put it back together.

Bumbling bureaucrats and academics don't have the chops for this.

We have two semi-loads of vaseline arriving about noon, and some of that hair restoration creme from that infomercial running on CNBC now. Where is Dennis Kneale when you need him?

Close my eyes again
I watch you run away
Put my heart on ice
It hurts like hell to have had better days
Up and over the sun
Not forever but higher than heaven
Now I go no one
And I'm dying from lack of love
And affection

Get in line, get in line, get in line
I'm giving myself away

Peconic Bay,
Thanks for the clarification. In my haste I neglected to consider what price the Treasury was paying for their 80% stake vis a vis existing market cap.

"ooh-la-la writes:
Ray:"Haloscan says 493... on a Sunday... before noon. What time does Lefty's open ? Do they have lots of inventory ?"

542 now. I'll have a Beamish, thank you."

Beamish is shite, only people from Cork drink it. Ya boyo?

Realistically, what would have happened if the GSEs were allowed to fail?

Instead ask this.. what would have to all the GSE paper owned by FCBs ?

reading and re-reading jim and hanks statement indicates clearly that they have nationalized, or socialized or whatever... have just purchased the us mortgage industry. period.

they...i mean we, own it

Milkman writes:
The GSEs probably will fail, regardless of Hank. And then . . .

just the opposite

GSEs can not fail so long as ben and hank have the keys to the printing presses in the basement, and enuf ink

the costs have been shifted to the full faith and credit of the united states of america

JimPortlandOR-
very funny. We could go back to the original 13 colonies. It would be easier to manage.

American taxpayer: maybe Britain will take us back (if we ask real nice and learn God Save the Queen.)

Maybe the Japanese we wimd up with Hawaii after all

BB,

Yeah, are we going to see a replay of the scene from "Independence Day" when they try nuking one of the alien ships...to no effect.

I am going to refer to him as "Gonzo Secretary of the Treasury, Hank Paulson." Seems appropriate.

Enough CR for today, people. Be good Americans and go watch the NFL.

just for fun i took jim lockhart's and hank paulson's statement this morning and erased all strategic, predictive and explanatory language leaving only action statements...the words left are all theirs...quotes... except for two parenthetical comments of mine

what follows below is word for word what the said they were going to DO, with all the fluff taken out.

Dan Mudd and Dick Syron, have agreed to stay on for a period to help with the transition. (youre fired...after awhile!)

GSEs will modestly increase their MBS portfolios through the end of 2009.

in 2010 their portfolios will begin to be gradually reduced at the rate of 10 percent per year, largely through natural run off,

place both enterprises in conservatorship.

Treasury and FHFA have established Preferred Stock Purchase Agreements,

Treasury will ensure that each company maintains a positive net worth.

Treasury receives senior preferred equity shares and warrants that protect taxpayers.

common and preferred shareholders bear losses ahead of the new government senior preferred shares.

conservatorship does not eliminate the common stock, it does place common shareholders last in terms of claims on the assets of the enterprise.

conservatorship does not eliminate the outstanding preferred stock, but does place preferred shareholders second, after the common shareholders, in absorbing losses.

establishment of a new secured lending credit facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

This facility is intended to serve as an ultimate liquidity backstop, in essence, implementing the temporary liquidity backstop authority granted by Congress in July, and will be available until those authorities expire in December 2009.

Treasury is initiating a temporary program to purchase GSE MBS.

Treasury will begin this new program later this month, investing in new GSE MBS. Additional purchases will be made as deemed appropriate. (new!!!)

Treasury can hold these securities to maturity,

This program will also expire with the Treasury's temporary authorities in December 2009.

the GSEs are in conservatorship, they will no longer be managed with a strategy to maximize common shareholder returns, a strategy which historically encouraged risk-taking.

The Preferred Stock Purchase Agreements minimize current cash outlays, and give taxpayers a large stake in the future value of these entities.

At the end of next year, the Treasury temporary authorities will expire, the GSE portfolios will begin to gradually run off, and the GSEs will begin to pay the government a fee to compensate taxpayers for the on-going support provided by the Preferred Stock Purchase Agreements.

Ok, ongoing, the goverment senior preferred stock purchase program depends on the difference (loss) in net worth each quarter - they make up the difference and get senior preferred stock in return.

So, this dilutes the common and the existing preferred right too ?

That's in addition to the common and existing preferred being first in line for losses, meaning NO payout from any assets left, in the event of BK ?

That's the only I can interpret this. Any other views ?

-K

classified IV writes:
FFDIC - How could these banks have gotten in such bad shape without anyone taking notice?

FDIC noticed but employees remained silent for the most part to keep their jobs. The ones that spoke up including me were subject to RIFs even with 18 and 19 years of loyal service, multiple 2,000 mile relocations, losses on personal RE home sales, downgrades and 2-3% annual salary increases. I'm sure I'm forgetting other sorry shit one must suffer thru with a fed job. It's by no means the bed of roses the public believes.

mock turtle:

you said "the stock holders have been bailed out period"

Not sure I agree given the amount of dilution they will experience. Note that Treasury is buying $1 billion of preferreds for a 80% stake. See post by Peconic Bay upthread.

i predict

(ha like i know somethin...more like guess)

i guess that F and F shares will go way up tomorrow based upon implementation of the conservatorship plan

also esp because F and F now have theri own TAF / TSLF window

AND

treasury is going to guarantee positive capitalization thru equities purchases!!!!

yikes, what's not to like comrade!

FDIC
For Immediate Release September 7, 2008

The Federal Banking Agencies React to Takeover of Fannie Mae and Freddie Mac

The federal banking agencies have been assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two government-sponsored enterprises, a limited number of smaller institutions have holdings that are significant compared to their capital.

The Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision are prepared to work with these institutions to develop capital-restoration plans pursuant to the capital regulations and the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement Act.

All institutions are reminded that investments in preferred stock and common stock with readily determinable fair value should be reported as available-for-sale equity security holdings, and that any net unrealized losses on these securities are deducted from regulatory capital.
FDIC: Press Releases - PR-78-2008 9/7/2008

The U.S. is now buying MBS securities direct from GSEs in the open market, and there is no explicit limit specified
The U.S. just a planet-sized new (red) line item on its national balance sheet

Wonder when they will start doing auto loans.

Anonymous -- this is the provision that jumps out at me the most. The government is now officially deciding whenther MBS pricing is "correct" and appropriate. If not, it's going to step in and buy until that pricing is better. What kind of precedent is that? How about buying S&P futures if stocks fall too much? Or buying auto loan ABS or CMBS to prop up car buying and commercial real estate lending.

FFDIC thanks!

It will be intersting to chart the bank failure loss over assets to see how bad the FDIC now allows a bank to get before takeover.

Well, this is just the smoke screen that Paulson is using to move losses from the institutions to the tax payer.

All along Paulson has been propping up the financial institutions to let them put imaginary figures in their books. First it was the Super SIV, then it was reregulation, then it was Hope Now.

There are still hundreds of trillions in derivatives out there AND by all reports they are still growing! Noone knows how much in derivatives F&F hold, estimates are in the trillions!

Let's Be Clear, F&F's losses will swamp shareholders, preffered stock and then cascade onto the taxpayers balance sheet. Paulson is just buying time until this administration is gone in January while his buddies abscond with as much as they can.

The government is now officially deciding whether MBS pricing is "correct" and appropriate. If not, it's going to step in and buy until that pricing is better. What kind of precedent is that? How about buying S&P futures if stocks fall too much?
Mike_in_FL | Homepage | 09.07.08 - 1:20 pm | #

no, no, no...treasury will not do that

that's what the PPT is for...

with the help of the FED RSV windows at the TAF, TSLF and the PDCF

Ministry of Truth writes:
"FFDIC thanks! It will be intersting to chart the bank failure loss over assets to see how bad the FDIC now allows a bank to get before takeover."

It has to be bad due to staffing and eventually moral is going to suffer as well because the experienced staff are on the road almost full time and much older than in the 1980s plus other issues I will not detail here.
Silver State Bank Postmortem

Here are some final stats on the bank (SSBX) seized Friday by the Federal Deposit Insurance Corporation [FDIC], as of 6/30/08.

Equity capital to assets - 6.87%
Core capital (leverage) ratio - 6.56%
Tier 1 risk-based capital ratio - 7.57%
Total risk-based capital ratio - 8.86%
Noncurrent loans to loans - 15.38% (Total noncurrent loans and leases, Loans and leases 90 days or more past due plus loans in nonaccrual status, as a percent of gross loans and leases.
Time deposits of $100,000 or more - 21.23%
Silver State Bank Postmortem -- Seeking Alpha

the stock holders have been bailed out period
mock turtle

I wasn't clear in my original comment - as noted by other posters, the common and prefered have just been diluted by 80% already.

I was working thru the implications of future quarter by quarter make-good-the-difference-net-worth payments.

Separately, has Pimco made out any more than they have since the mid-July announcement of a back-stop ? The only way is if spreads come in - will they ?
The government has $400B of debt ceiling left. The GSE's have to roll over 225B of debt each quarter, AND they are going to increase securitizations. How much will the govt have to buy of the rollover amount ?

What happens in 6 months time ? Increase the ceiling ? Then Treasuries ought to tank (they ought to tank anyway) and Pimco has got quite a few of THOSE I bet.

Once the freakin' govt. is in debt, which it its, it has a NEGATIVE balance sheet surely. Any debt they buy they buy with OTHER debt they have to float.

ARghhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh !
This is fuckin' nuts.

-K

-skk

Ah well, I just bought a new pair of ski boots last night.

Gonna be some dynamite skiing this winter with everyone staying home. There will be some great buys on condos as the noveau riche find it was all ponzi financing.

If you have to pay cash for a ski condo, how much is it really worth?

Buy booze, ammo and glod and silver.

Always gonna be some serious demand for those items. Booze especially with our new ethanol taxes designed to drive around with it instead of drink it. I wonder if lefty will be buying through the back door from new old Stock;-}

Someday this war's gonna end...

I think the Marshall Plan was bigger.

Then let's send the ungrateful bastards the bills for that and balance our books.

If you are interested or have time, please listen to link on Nassim Taleb's website, "Discussion of the Subprime Crisis."

Taleb goes into the issue of fraudulant models.

As I read over the attached documents from the Treasury a few thoughts came to mind:

"To promote stability in the secondary mortgage market and lower the cost of funding, the GSEs will modestly increase their MBS portfolios through the end of 2009. Then, to address systemic risk, in 2010 their portfolios will begin to be gradually reduced at the rate of 10 percent per year, largely through natural run off, eventually stabilizing at a lower, less risky size.”
- Bet - The government can take the heat of the Alt A mortgage defaults coming in 2010 and 2011 and then the market will come back.
Assumption - You can trust us.
Issues - These models make not have worked, but if the taxpayer takes all the losses, these businesses will look a lot better.

Harndog

Link to Taleb interview, is attached and below:

Credit Crunch to Stay Until Bank Leadership Goes

So what is the big deal if we default on our debt and give american taxpayers a tax credit for their losses. That exports the remaining loss to foreign holders of the debt and we can laugh all the way to the bank. Of course we will never be able to borrow again but that is a good thing. Just saying!

Maybe the first big economic policy decisions of Obama's career is whether to raise a small finger of protest about this bailout. His voice has enormous leverage in this matter, if he wanted to use it.

If he just says something like "Whatever the merits of this plan, it will cost future generations of taxpayers billions" he would rally big protest against it, especially among younger people.

But so far, he has not.

There is both political and economic calculus in this decision. It's highly complex for him. His style is to play it safe until he has something to say, and make sure he doesn't make a mistake. More than likely, Obama will weave it into a broader message of "mortgaging our future" to pump up the youth vote in November, without taking on Paulson or GSEs directly.

Well, kudos to Paulson et. al. for not protecting the preferred stock.

But...

The U.S. Treasury is buying MBS???!

I guess it must be Bill Gross's birthday.

mock turtle

Just how many hundreds of trillions in derivatives are out there now ?

Last I heard was 800 trillion in derivatives, most with no standard contract!

It seems to me that this is basically a 12-month plan to give us enough time to consider what has happened, where we want to go, and how to get there. It also delays the decision-making into the next administration, which will then be able to follow through on its own plan.

I'm a Beltway insider, so this makes sense to me. For those of you in Real America, this looks more like a kick-the-can-down-the-road copout. However, during an election campaign no candidate has time to tackle a really tough economic problem, and neither of them are great economists anyway.

Will we use the 12 month to come up with a realistic solution? Probably not, because it would be too PAINFUL, too difficult to understand, and too politically controversial. Personally, I'm praying for a miracle.

Thank you Mock Turtle and others...yes, why care?
Football is on, and the situation does not have a "visable" effect today.

Aside from the "immediate" or noticable effect, below is a statement off the Pete Peterson Foundation website (p.20 & p.21):

1. New owners of America:
   55% US Public
   45% other
   "The Treasury issues marketable securities to the public (e.g.,
   state and local governments, banks, mutual funds and foreign
   investors) to finance deficits. Due in large part to America’s
   near-zero rate of saving, the federal government is increasingly
   dependent on foreign lenders.
   • In 2007, foreign investors owned about 45 percent of debt
   held by the public, up from about 19 percent in 1990 and
   from virtually zero in 1946.
   • Among our top foreign lenders are countries whose national
   interests can diverge from our own, including China, oil
   exporting countries (e.g., Venezuela, Saudi Arabia, Nigeria,
   Iran and Iraq), and Russia."
2. What's At Stake...if anyone cares

What’s At Stake (p.21)
"No matter what lens is used, the long-range outlook for the
federal budget, the national economy and the burdens that
are likely to be imposed on future generations is not good and is
getting worse with the passage of time.
O Today’s policies lay claim to future resources. Absent reforms,
tomorrow’s policy makers will find that they have little flexibility to
address emerging needs. If resources are spread too thinly, government
will become increasingly ineffective and unresponsive.
O Today’s deficits reduce national saving, displace potentially
productive private investment and hamper economic growth.
Our increasing indebtedness to foreign lenders, who cannot be
counted on to be always willing to finance our deficits, over time
may threaten our international standing and influence. Interest
payments on such debt go abroad instead of providing income
to U.S. residents and feeding into our economy.
O Absent meaningful and timely reforms of existing entitlement
programs as well as spending and tax policies, by 2040, the
federal government will spend more than twice as much as it
raises in taxes.
O If we do not take corrective action soon, we will be admitting
defeat and leaving it to our children and grandchildren to clean
up our fiscal mess. They already face a more competitive and
uncertain world. Our failure to make appropriate program and
policy changes would be both irresponsible and unfair to them."

Harndog

Maybe the US Govt needs to do a garage sale? We've got about a dozen nuclear aircraft carriers that China, Russia and the oil shiekdoms would luv to bid on. B-2 bombers are worth some real cash too.

Funny you should bring that up. That NYT article has this passage ...

For instance, a Chinese blogger complained last month, “It is as if China has made a gift to the United States Navy of 200 brand new aircraft carriers.”

Bankers estimate that $1 trillion of China’s total foreign exchange reserves of $1.8 trillion are in American securities. With aircraft carriers costing up to $5 billion apiece, $1 trillion would, in theory, buy 200 of them.

Does it really matter if the can gets kicked down the road for a few more months?

How many of these desperate, week-end solutions will it take before the FCB's decide that agency and maybe treasury paper just isn't worth the risk, and maybe all those foreign reserves should be used for something tangible that benefit their citizens?

Bogus ~

The Banks own all the policy makers ... Democrat and Republican ...

It is time for a public central bank that prints money without debt ... The banks have screwed the pooch and don't deserve their money making monopoly.

Mock Turtle:

Sorry that our post got crossed:
Boards are a poor way to communicate and sarcasm does not really work on a board given you can't see any other information (facial expression, body launguage, etc.)

Here is the point of Taleb and my experience trading options on the floor of the CBOE.

Models don't work sometimes. There is no model that exists for the potential deviations created by something that has never happened before. Thus, any nonsense about models should be viewed in the context of Long Term Capital Management. They had rocket scientists, Nobel prize winners and none of their models worked long term.

Floor trader dealing with implied volatility:

Sell 10 vol.
Sell some 15 vol
Sell small as possile at 25 vol
BUY all you can at 30 vol...

Harndog

DenverKen writes:
I wonder what Sarah Palin's position is on this?

What a silly question. Missionary, without protection, of course!

the dems have only a a few votes advantage in the senate, not veto proof...nothing gets passed without republican approval

So, when did the GOP ever have more than a few votes advantage?

There is actually a very small, unintended experiment in South Fla of what happens when you can't get financing at all. It involves condos vs co-ops. No bank wants to finance co-ops in Fla. Don't know why, they do it all the time in New York City. Anyway, pre bubble, the few co-ops out there sold at something like a 2/3rds discount off similar condos.

South Florida is down about 30% right now, and I assume that part of that is the inability of even the well-qualified to get mtg loans. So, I think this gets us to 66% off peak pricing, which is a bit less value than I was estimating previously, of 50-55% off.

I don't see who they (F & F) are going to loan to, this will REALLY scare buyers, and if allowed to go into run-off, nobody for the immediate future will be making mtg loans. Maybe even the hard equity lenders won't lend for a bit. Nothing, including the current crisis, lasts forever. Eventually, when prices are super duper low, some will stick a toe in the water. At the old neighborhood, know your borrower level.

Mock Turtle:

got gold?

Yes, I have a small stack of gold in the saefty deposit box.

My best trade has been the 5% WaMu CD (under 100) and being short.

About the only thing I did correctly, besides being short, was to cover everything Friday morning around 11 CST. I did this because the Naz futures were being it hard and had to go for a walk so I would not sell anymore and then coming back at 11 the Naz was almost unchanged.

I did not understand what happened and then going through Briefing.com, I saw no news to account for what was happening and alot of my stocks had large selling tails.

My hindsight conclusion is the US stock market is now a Bucket Shop operation. See Jesse Livermore, "How to Trade in Stocks."

Harndog

WOW

the sun just came out here in the pacific north west and the temp just got above 60 in the foothills of the cascades

its a heat wave...im goin swimmin!

Poor and Unemployed writes:
Can someone please explain to me - how this nationalization is suppose to help the taxpayer?

Short version: (from Animal House)

D-Day: Hey, quit your blubberin'. When I get through with this baby you won't even recognize it.
Otter: Flounder, you can't spend your whole life worrying about your mistakes! You fucked up - you trusted us! Hey, make the best of it! Maybe we can help.
Flounder: [crying] That's easy for you to say! What am I going to tell Fred?
Otter: I'll tell you what. We'll tell Fred you were doing a great job taking care of his car, but you parked it out back last night and in the morning, it was gone. We report it to the police, D-Day takes care of the wreck, the insurance company buys your brother a new car.
Flounder: Will that work?
Otter: Hey, it's gotta work better than the truth.
Bluto: [thrusting six-pack into Flounder's hands] My advice to you is to start drinking heavily.
Otter: Better listen to him, Flounder, he's in pre-med.
D-Day: [firing up blow-torch] There you go now, just leave everything to me.

Long Version: Animal House -
Otter: Ladies and gentlemen, I'll be brief. The issue here is not whether we broke a few rules, or took a few liberties with our female party guests - we did.
[winks at Dean Wormer]
Otter: But you can't hold a whole fraternity responsible for the behavior of a few, sick twisted individuals. For if you do, then shouldn't we blame the whole fraternity system? And if the whole fraternity system is guilty, then isn't this an indictment of our educational institutions in general? I put it to you, Greg - isn't this an indictment of our entire American society? Well, you can do whatever you want to us, but we're not going to sit here and listen to you badmouth the United States of America. Gentlemen!
[Leads the Deltas out of the hearing, all humming the Star-Spangled Banner]

Sorry, but your choice seems to be what version you want.

Strange that Paulson didn't mention anything about flexible hours, affirmative action, huge bonuses, etc, that made these companies so great.

Hank & Lockhart bailing out F&F who they only 2 months ago claimed were well capitalized and could be counted on to pick up the slack in the mortgage market. Could things have deteriorated this rapidly in a couple of months ?

No. They are liars and thieves, ripping off the Treasury.