Holders of hoopajoops and hoopajoop derivative products will note on page 49875-D of the hoopajoop prospectus that increases in the national debt beyond 11 trillian constitute a Currency Crisis Event under the terms of the hoopajoop implosion plan. Please note that while you have enjoyed modest and immodest returns on the hoopajoop regardless of market conditions, your returns must be denominated in United States Dollars. Claims made in the hoopajoop prospectus that the hoopajoop "always goes up, even when it goes down," reflect gains calculable in United States Dollars and in no other currency. Thank you.
Many investors have voiced concerns regarding the hoopajoop in light of recent economic developments. The hoopajoop is a sound instrument which is capable of matching and exceeding all other investment vehicles on the market. You will note that in response to the TARP bailouts, we have modified the hoopajoop's highly structured structure to incorporate a small handcrank on the side. Turning this crank will engage the dollar printing apparatus which we have leased for hoopajoop use from the U.S. Treasury.
First he, by all accounts, rewrites a tax statute without Congress as required by law to allow Wells Fargo to finance a higher $/share takeover of Wachovia with essentially government tax credits.
Then after leaning on Bair to approve this new 'spontaneous deal', he is ready to 'lend' WFC a further $25bn in cash (non-callable, no voting rights, etc)
FYI: The CEO of Wachovia worked at the Treasury as of last year and is a friend of Paulson such that he had to excuse himself from any negotiations by recommendation of house counsel
I might just buy the Citi shares for no other reason than the Treasury should have no qualms single-handedly financing a takeover by Goldman Sachs. Paulson still has 2 months of transition time to rewrite a law or 2, lots of time
Half to buy out a rival, half for bonuses to retain "top talent".
Hey now, these are very very reduced bonuses. Don't be mean-spirited, telling those secretaries and mail room clerks they can't have bonuses. They depend on that bonus to get them through the year. It is an economic stimulus to pay out bonuses to the cheaters & fraudsters in this thing of ours.
Step one: Issue to the U.S. Department of the Treasury 25,000 shares of Wells Fargos Fixed Rate Cumulative Perpetual Preferred Stock, Series D without par value
Hoopajoops may only be purchased on credit. Luckily, you can borrow against a hoopajoop you have not yet purchased. In fact, except for hoopajoops made available through the Fed's HJCPMSJUU plan or HCANODEHRTARP plan, this is the only way to buy them.
Nemo, good question about the bond vigilantes ... next year the Treasury will have to sell around $2 trillion in treasuries to cover rollover and new debt. It makes me wonder ... at some point investors might balk, and interest rates could rise
Could you do maybe do some charts about U.S. debt by maturity? Seeing that $2 trillion (and other numbers) visually, especially compared to history, relative to GDP, etc., would be really interesting.
(I am not sure what presentation I am looking for, exactly, but I would know it when I see it. I am also assuming the relevant data are actually available from the U.S. Treasury.)
Okay folks, chill out about how all of this new debt will be immediately inflationary. Let the New World Order meeting on November 15 begin to make the obvious manifest.
Now, ironically, when the federal money is used to pay off a lot of this crappy paper, there will be a tremendous amount of money suddenly available from those closed loans.
Cui bono?
That should be the smart money starting to figure out that resources and stuff are going to be the next huge bubble.
Send citibank a half mil for my mortgage on the overpriced debtburg here in Pahoenix, and they now have that much more cash to play with.
I win through having that much more monthly cashflow.
Now, the greatest reflation of all time is starting to creak and groan and begin, and you want to own Treasury Bonds?
Let me scan the front page of my new Institutional Investor: America's Credit and the Dollar come Under Siege, and
Is this the End of US Financial Hegemony?,
I think some of the other bright folks are beginning to understand what lies ahead!!!
The US and China account for more than two-fifths of the planet's ecological footprint, with 21% each.
Bush may double the national debt, like all good republican presidents, but Reagan-BushDaddy quadrupled if my memory serves me correctly.
Of course Reagan officially opened Casino Capitalism Inc., took out the Military Credit Card, and opened the champaign.
Who needs reality?
"at some point investors might balk, and interest rates could rise"
uh, like Iceland's 18% or Bulgaria's 800%
I was living in Sweden during their crisis. My pay checks were walked down to the Accounting area and we were given cash if we wanted 'cause it took 3-5 days for funds to be made available (inter bank lending, ya know). And I was getting almost 100% interest in short CDs.
Calculated Risk writes:
Nemo, good question about the bond vigilantes ... next year the Treasury will have to sell around $2 trillion in treasuries to cover rollover and new debt. It makes me wonder ... at some point investors might balk, and interest rates could rise
We are talking some huge numbers here.
If you have a 3% long bond and rates got to just 6% your principal is cut in half. These aren't unthinkable black swan numbers. And worse, once that happens nobody will want to buy your long bonds anyway.
I'm wondering if tracking multiple threads might be the problem with the haloscan lag. Everybody get on the current thread and see if it doesn't correct the problem
Now that Wells has the money, will they let the shadow inventory monster out of the closet and dump all of those REO's on the market? Me thinks this will happen very soon.
"I think of myself as a pretty smart guy, but not that smart, if you know what I mean; no Mensa candidate but intelligent enough to earn a few paper degrees that helped get me a job where the real education began. My mother used to tell me that I had the highest IQ of all the first graders in Butler County, Ohio, which sounded impressive until I figured out that there were just a handful of kids that had taken the test. Youre smart but not a genius if you graduated non cum laude from both Duke and UCLA graduate school. Thats me. Still, Ill take it because Ive come to the conclusion that success at least in a career requires more than an IQ. It requires a CQ."
Translation : " Im a total douchebag"
I mean, seriously, who would write something like this?
"Can these and a host of other investment ideas come from a commonsensical understanding of the uranium atom, the difference between fission and fusion, and its metaphorical connection to levering and delevering? We at PIMCO think so."
I never understood this mumbo-jumbo anyway, but I think Gross is taking it to an even higher level. Maybe he's saying our money managers need a nucelar physics degree - to dispsoe of all this financial nuclear waste.
Investors and former policy makers predict that the same market forces that torpedoed President Bill Clinton's ``putting people first'' spending initiatives at the start of his presidency are gathering again at the prospect of McCain's tax cuts and Obama's health-care and education programs.
``Though times are different and a lot of the government spending is necessary, we're going to see rates rise in a saw- tooth pattern over the next few years,'' says E. Craig Coats Jr., the head of Salomon Brothers' government securities desk when it was the world's biggest bond trader.
It's not too late to jump in on some swaps
As for Gross, dollars to donuts here's his plan.
Buy up auto loans and some insurers on bet the government guarantees them effectively. Then short every available treasury with a maturity greater than 2 years. Oh and uh, collect those TARP fees that he publicly indicated he didn't want
Anybody, and I mean this categorically, anybody in this market is a moron. So what if you 'make money'. brag all you want about how fucking swift you are, you're a moron, an unmitigated moron and I will be present at the auction of your assets.
I'm reminded of the occasion of a bonfire, when several like minded individuals gathered to discuss current events. Someone said, "Hey, everybody I can whistle out my ass."
I admire your conviction wrt TBT & bonds. I have no position (never really have), but I'm bearish on yields longer term. It's just nice to read someone putting their money on something that hasn't worked out so far. Kudos
The 2009 budget deficit could be close to $2 trillion, or 12.5 percent of gross domestic product, more than twice the record of 6 percent set in 1983, according to David Greenlaw, Morgan Stanley's chief economist. Two weeks ago, budget analysts said the measures might push deficit to as much as $1.5 trillion.
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If you have a 3% long bond and rates got to just 6% your principal is cut in half. These aren't unthinkable black swan numbers. And worse, once that happens nobody will want to buy your long bonds anyway.
Rob Dawg
Well what if interest rates go up but we get price stagnation or deflation. Seems like a ridiculous question but I wonder....
Thank you for the bloomberg link. Well worth the read. Will all of the discussion of the Feds bailing out the states... this has a HUGE impact on national spending by governments of all sizes.
Volker, you da man! It would be much appreciated if you would submit an all-caps post advising of the market bottom so I know when to load up. Thanks in advance!
There is talk of increasing the bottle/can deposit from .05 to .10 in Oregon by the year 2011. The proposal is currently bogged-down in the predictable political fighting, but it appears likely that it will eventually pass and become law. This presents a lucrative investment opportunity. Although it is well known that bottle-deposit arbitrage between low-deposit and high-deposit jurisdictions (technically referred-to as the Kramer-Newman play) is financially impractical due to the offsetting transportation costs, my investment plan, being entirely locally-executed, will suffer from no such defect. Accordingly, I will begin hoarding all cans and storing them in anticipation of the upcoming revaluation. Cans are preferable to bottles as they are smaller and represent less of a collection and storage hazard.
There are a large number of homeless or semi-homeless individuals (independent contractors) in Portland who are engaged in the occupation of gathering bottles and cans and returning them to retailers in order to redeem the deposit. In order to accelerate my rate of collection, I propose to offer .06 on the open market for each qualifying can delivered to my storage location, which is a large building positioned in a high-traffic area, within a short walking distance of a bottle/can redemption center. I believe it will be possible to divert a considerable amount of can redemptions to my location with little effort or expense. By paying .06 and redeeming in January 2011 for .10, I expect enjoy a 67% rate of return on my investment.
As with any investment, there are risks. It is possible, though unlikely, that beverage manufacturers will change product SKUs such that old bottles and cans may only be redeemed for their original deposit amount, thus negating the arbitrage opportunity I seek to exploit. This was not done in previous revaluations, and there is no reason to believe it will occur this time. I also note that neighboring non-deposit states (eg., Washington) use identical product SKUs, despite the fact that this differential is routinely exploited for profit by a segment of the can-collecting population. It is also conceivable that the proposed legislation will not be enacted, and the bottle deposit will remain at .05. I intend to lobby vigorously for the passage of this law, but it is possible that I will be forced to liquidate the assets at par, resulting in a .01 loss per can.
Despite the risks, this is a good investment opportunity. I note that Coca-Cola stock has declined by over 26% in the last year. Why bother investing in the product when there is 67% or more to be made on the can it comes in?
I've got some TLT puts for the short term, but I've been intrigued by Mish's longer term bullish stance on Treasuries. If we see zirp, a global depression (declining assets/commodity prices), an exodus from equities, and an emerging markets currency crisis (not to mention euro), where else are people going to put money other than US paper? A risk free 3% return starts looking damn good.
"Nemo, good question about the bond vigilantes ... next year the Treasury will have to sell around $2 trillion in treasuries to cover rollover and new debt. It makes me wonder ... at some point investors might balk, and interest rates could rise
We are talking some huge numbers here.
Best Wishes.
Calculated Risk "
Wait a minute, are you saying that this stuff has to be paid back?
If you read Greenspan's cryptic speeches from the 90s, he was clearly aiming to repeat what happened in the 1937-1945 era.
That's why Bernanke talks about capping long-term rates. In the 1935-1945 era, rates were driven down below the rate of real economic growth. This, combined with previous debt defaults, allowed debtors to dig themselves out.
You're going to see big losses in US bonds because it has to happen to rebalance the system. Heck, that's how Greenspan righted the ship in the early 90s... doesn't anybody remember the Big Bond Blowout of 1994-95 which transfered about $1 trillion from savers to debtors?
This time is much, much bigger, though, but it explains why some people have bet on certain things. Learned behavior from the Federal Reserve's previous actions.
The cost to hedge against losses on $10 million of Treasuries is about $40,000 annually for 10 years, up from $1,000 in the first half of 2007, based on CMA Datavision prices. The equivalent for German bunds has risen to more than $36,000 from $2,000, while it has jumped to $64,000 from $3,000 for U.K. gilts.
...
Credit-default swaps on Treasuries have risen nearly 40 percent since TARP was signed into law Oct. 3, and are now about the same as Mexican and Thai government debt before the credit markets began to seize up in June 2007, CMA Datavision prices show.
"With enough liquidity lowering the short term rate and providing favorable borrowing conditions to banks will do it."
Sorry, I'm not following.
2T is a lot of debt to sell and I would think that they're already filling up the short-end of the curve meaning they need to sell it on the longer end.
I just don't see how you can push so much debt out on the long end for sale and possibly cap the yield. Especially since we've already been seeing the government have to ante up a lot for failed auctions in the 20-25 year range.
Can you please explain this or provide a link? Not able to dig up anything with google. There was some discussion with respect to Australia but it did not look the same.
doesn't anybody remember the Big Bond Blowout of 1994-95 which transfered about $1 trillion from savers to debtors?
2T is a lot of debt to sell and I would think that they're already filling up the short-end of the curve meaning they need to sell it on the longer end.
POICali!
Edzachary, if banks have to make long term loans rates will come down.
I may not need a loan but i'll sure take one at 2% fixed for thirty years....
Today was a very good day for obscure gold stocks. Maybe the bond vigilantes have been scared off shorting and swaps because of settlement risk. Now they are buying whatever Canadian juniors Bob Moriarty has recommended in the last year.
The Fed doesn't control long-term rates. How does BB intent to accomplish this feat?
How are you going to make anyone pay you more than 5% when the Fed will loan to anyone for 5%?
They could also enforce it through executive order or possibly even pass something through Congress.
In the 1937-1945 era, a great deal of money went into low rate savings bonds to fund WWII. I don't know if that was legally mandated or not but if you want to see the future, look at the past.
I don't care how much you love the US you aren't going to purchase bonds that give you 2.25% every 6 months until 2038 knowing that the US has to sell another $1.99999 trillion to whomsoever is willing after you. Somewhere around $1.5 trillion and there are no more buyers and your principal is screwed.
Sorry, can't find a reference although I could probably dig up my comments about it in dejanews.
The WWW didn't even exist until 1993 but if you look at bond yields over the past fifteen years, you can see it. Greenspan drove down rates in 91-92 to save Citibank (among others) from collapsing. Investors (like myself) piled into bonds expecting a deflationary event.
Except that Greenspan managed to reboot the system and whoever stayed in bonds too long got crushed in 1994.
That's the gameplan this time, too, except it will be... many trillions, I can't really estimate. Six or seven, maybe?
"To whom would they lend it? With existing and forecasted economic conditions, who is a good debtor?"
Who was it, peaKcredit? that said some time ago that bankers know a waterlogged debt markets when they see one.
And isn't that the crux of this issue? In a debt based money system we can expect "extraordinary measures" from the fed to get money flowing, and will probably err to the extravagent side.
Anybody expecting a righteous Mellon rectitude will be disappointed, IMO.
Broward,
If they need to suck say $1T out of the bagholders then they need to raise rates 50% on $4T, double rates on $2t or triple rates on $1.4T and so on.
Dawg sez 'I don't care how much you love the US you aren't going to purchase bonds that give you 2.25% every 6 months until 2038'
Oh, yeah? That's what YOU think, Dawg. And the magic hand, now backed by executive order, having writ, now writes your fricking pension fund into 2.25% bonds until 2038.
I looked at the link, rather quickly I admit. It looks like 2009 to 2011 is especially big?
The US Treasury issues these to buy the gov bills. Then in 2009, or whenever, foreign countries or whoever, redeem them for the total plus interest? This then gets sent electronicaly to the redeemer (not Jesus)?
I moved my entire 401K into the Primary Reserve MM last Nov. It was the safest thing the 401K had for me to put my money into short of pulling it out and taking the tax hit.
I thought I was being smart and was very glad as I watched every other 401K option tank to the tune of 30% or more then they broke the buck and now I sit and wait on 14 years of max contributions plus employer matching just locked up wonder what the value will be.... talk about a bummer.
It won't matter if they lend it. Well it will a little bit, but the old days of securitization, synthetic CDOs to move risk off the balance sheet, and cheap funding via the yen carry trade are over. We're back to banks holding loans on their BS with appropriate loss reserves. Frankly the $25B will probably be used just to improve capital ratios and shore up loss reserves.
Can we get the YEN to get stronger again? I am tiring of these interventions YEN should be at 80 by now as Japan has money and savings. It has to be the 2nd strongest currency in the world behind the $. How is the Euro going higher and dragging oil up - they will be at ZIRP soon enough.
Oh, yeah? That's what YOU think, Dawg. And the magic hand, now backed by executive order, having writ, now writes your fricking pension fund into 2.25% bonds until 2038.
But remember, because it happens after the election, it will be SOCIALISM, and a reason to FLEE THE COUNTRY, and totally unrelated to the crony capitalism that's getting us into the obligations right now.
Modern American "Republicans" -- Privatize public funds, socialize private losses, flee country with Ayn Rand novel under one arm, money bag under other.
If they need to suck say $1T out of the bagholders then they need to raise rates 50% on $4T
I didn't claim that they would be able to do it, just that they're going to try.
Seriously, it's in Greenspan's speeches circa 1996-7 or so. He specifically talks about bond yields in 37-45 and circumventing "the anomaly of 1992" or some such language.
I keyed on it because I'd already done a lot of research and recognized what he was saying. And that's really Bernanke is saying, too.
It's a simple equation, really.
K = long-term economic growth
I = average interest rate for all debt
D = total debt.
K = I X D.
The problem is that during the upside of the K-Wave, investor won't accept an interest rate which equals true economic growth, they demand more. This creates an imbalance which eventually toggles the wave to the downside.
How do you fix it?
You force symmetry.
You force investors to receive a return which is less than economic growth by the amount that demanded during the upcycle.
I don't know if any of you listened to the Pershing Square webcast today on their proposal to TGT shareholders. I thought it was fascinating, and TGT's price seems to concur.
Essentially, they are suggesting that TGT spin off it's real estate holdings into a TIPS REIT. I highly recommend this to those of you who are into bonds and real estate financing.
Corey - not to be rude, but the kind of rip-off thinking you exhibited up-thread is the kind of thinking that got us into this mess in the first place. Trying to make an easy killing at someone else's expense (in this case, your state - meaning, your people). Put your imagination to better use. Unless, of course, it was all a joke
Modern American "Republicans" -- Privatize public funds, socialize private losses, flee country with Ayn Rand novel under one arm, money bag under other.
Essentially, they are suggesting that TGT spin off it's real estate holdings into a TIPS REIT. I highly recommend this to those of you who are into bonds and real estate financing.
I have a question. Where is the wealth creation? I play poker on the weekends. A lot of money changes hands for sure. But no wealth is created.
After fees, the long term end users (the pensioneers and investors) will have less value and likely more debt.
snake-eyes writes:
Corey - not to be rude, but the kind of rip-off thinking you exhibited up-thread is the kind of thinking that got us into this mess in the first place. Trying to make an easy killing at someone else's expense (in this case, your state - meaning, your people). Put your imagination to better use. Unless, of course, it was all a joke
Well, you obviously won't want to hear my ideas about issuing Bottle-Backed Securities.
PeakVT writes: And whine about how Clinton made them do it.
Yeah, I forgot the part where you have to get up on your high horse to express "moral outrage" at being positively forced to rip off the American people to your private betterment and then flee the payee pool when the liability comes due during the next president's term.
I'm far from expert on either bonds or reits. Ackman seemed to argue that there were significant tax savings that would result from the structure. There were other points made, including freeing up cash flow and funding new land acquisitions through the reit. One point that struck me was utilizing reit "shares" {probably not the right term} to purchase underlying real estate.
I'm sorry, I haven't absorbed it all myself do not have a reit background at all.
I promise I will youtube or edit & post this wonderful ripping Peter Schiff's client is giving him on his radio show. Guy invested 1-1.5 million and is down over 50%! He's furious!
These bottle-backed securities definitely need a ForEx bet, a tranche structure, and a yield-enhancing bet on the commodities futures markets related to the mfg of the bottles. Perhaps you can also work in some kind of derivative trade based on auction-set pool positions related to the brand composition of the underlying haul, or maybe that's just a secondary market.
Heck, why not do both -- establish the market and buy positions in it yourself.
You really need to talk to the Hoopajoop people to get ready for your Wall Street debut.
So WF, our "Best Bank" needs to TARP us for $25B to eat WC. Oh and we get to eat all of WC's expensive shite...and WF's expensive heloc shite. We should be honored.
Expensive food is better than squirrel.
Expensive cars are better than Yugos.
Expensive houses...erm...well anywho...
So eating the expensive shite of those banks should be quite the meal.
I'm so happy about this, I'm going to go bash my head through a wall now. BRB.
Angry Saver writes:
"'Essentially, they are suggesting that TGT spin off it's real estate holdings into a TIPS REIT. I highly recommend this to those of you who are into bonds and real estate financing.'
I have a question. Where is the wealth creation? I play poker on the weekends. A lot of money changes hands for sure. But no wealth is created."
Theoretically, it could add value, if pension funds (for example) wanted to buy inflation-linked debt to hedge liabilities. For TGT, their cost of funds may be lower, and they would partially hedge deflation risk. At the same time, the pension fund will reduce its risk versus inflation-indexed liabilities.
But in the real world, nobody appears to want to buy TIPS right now, or real estate debt. Put those two factors together, it would be a disaster if it was tried now.
But remember, because it happens after the election, it will be SOCIALISM, and a reason to FLEE THE COUNTRY
The smart people already left - Jimmy Rodgers, Ken Dart, Orlin Grabbe, etc -
Sure, you can leave but you're gonna have to pay a whopper penalty to get your money out. Congress passed that in the mid-90s in anticipation of just such a thought in your mind.
But remember, because it happens after the election, it will be SOCIALISM, and a reason to FLEE THE COUNTRY, and totally unrelated to the crony capitalism that's getting us into the obligations right now.
Modern American "Republicans" -- Privatize public funds, socialize private losses, flee country with Ayn Rand novel under one arm, money bag under other.
Sorry, BR and Dawg but I don't see this deal as monetary situation anymore. It's now a gunpowder issue and unless you and perhaps 5 or 10 million other people are actually willing to draw down and KILL people for money...
then your best bet is to bet on the house to win.
The real issue is that Greenspan / Bernnake might have altered the k-wave a bit but there's considerable cultural damage being done.
Not to mention the dollar, which I consider to be somewhat of an extension of culture.
Well I've got a large jar of change that I can use as tier one capital.
So I'll open a bottelline insurance company that is also a bank holding company, so I can access the fed. I'll use squirrel pelts, bits of bark, and small stones as tier 3. The model, will of course price them accurately.
I'm working on tier two. I could then insure your bottle backed securities with quality insurance, allowing you to get a AAA rating.
bond guy writes:
Theoretically, it could add value, if pension funds (for example) wanted to buy inflation-linked debt to hedge liabilities. For TGT, their cost of funds may be lower, and they would partially hedge deflation risk. At the same time, the pension fund will reduce its risk versus inflation-indexed liabilities.
But in the real world, nobody appears to want to buy TIPS right now, or real estate debt.
Each of those points is addressed in the webcast. There is no plan to "sell" TIPS at this point - although it's held out as a later possibility. There is no plan to sell real estate debt. TGT owns 85-95% of their land and buildings - that would be transfered to the REIT in the spin off.
Worked with one of America's great scams today; an inventor exploitation company that has an FTC-mandated affirmative consent in their contract packet that states that of their 6,500+ clients over 3 years, 16 concluded licenses and 5 concluded agreements that made them more money than the five-figure fees the inventor exploitation company charges.
By all accounts, a license to print money.
Informal interviews with multiple office staff indicate business is stone dead. They laid someone off while I was there.
Broward Horne writes:
Sorry, BR and Dawg but I don't see this deal as monetary situation anymore. It's now a gunpowder issue and unless you and perhaps 5 or 10 million other people are actually willing to draw down and KILL people for money...
Money no, but servitude? Don't push me.
And truly, it isn't me you need to worry about. The infrastructure of this country is very soft. Two punks with skil-saws could snarl all of Los Angeles for a day dropping a few over freeway signs. A pickup and chains to take down cel towers. Angry disenfranchised urbanites are the worry.
corey, you might want to target business's, business parks etc..setup collection places, then pay them .4 bcse you save them time and only move price higher if competition rears its ugly head....
If all else fails change tactic and sell direct mail...
Even if the deal saves taxes for TGT investors, someone else will have to pick up the tab.
Again, I see no wealth creation, defined as increased output of goods or improved means of production. The deal is just a repackaging. Financial ledgerdemain.
These deals increase leverage in the system and divert more and more real savings to interest (rent on production and output).
And truly, it isn't me you need to worry about. The infrastructure of this country is very soft. Two punks with skil-saws could snarl all of Los Angeles for a day dropping a few over freeway signs. A pickup and chains to take down cel towers. Angry disenfranchised urbanites are the worry.
Rob Dawg | Homepage | 10.29.08 - 9:10 pm | #
Good thing the army has been rotating through Iraq these past six years - they might have learned how to keep the power on to most of us most of the time. Fallujah on the Pacific.
Treasury Secretary Henry Paulson has predictably screwed the taxpayer by
making a sweetheart deal with Wells Fargo in the TARP stock purchase.
The taxpayer gives: $25B
The taxpayer gets:
$25B worth of preferred stock (25,000 shares * $1M/share)
dividend rate not divulged, likley less than market rate
voting rights not divulged, likely none
$3.75B worth of 10-year warrants to buy common stock at $34.01/share
(110.261688 Mshares * $34.01/share= 3.75B, or 15.00% of the 25B)
no conversion rights
My opinion:
This is an incredibly lousy deal. Only 15% warrants, and at today's
inflated price.
Expect WFC to drop like a rock now that the deal is done. WFC reduced
their loss reserves in Q3 in order to prop up earnings and therefore
stock price until the deal was done.
The current administration is the equivalent of GM's management. The House of Reps is the equivalent of an automotive union. We, the people, are the factory and line people. America is going to be one big Michigan soon and I never liked eating bunnies.
If TGT were to spin off land only into a TIPS REIT, it is projected that it could lower their bond rating from A+/A2 to an expected rating of either Mid-High BBB/Baa .... or .... A-/A3 for a two year period.
Can someone offer me some insight into how serious that is ?
Broward Horne writes: Sorry, BR and Dawg but I don't see this deal as monetary situation anymore. It's now a gunpowder issue and unless you and perhaps 5 or 10 million other people are actually willing to draw down and KILL people for money...
It depends on the parameters of "kill" -- you mean like now, tonight? No, this Republic has seen too much random unlawful stuff.
If we actually get the political will to do it as part of a formal policy, or even as part of a government-sanctioned "informal" militant group? Absolutely.
If it's not just random violence but the will of the Republic that the wealth robbed from the Treasury be reclaimed and the thieves punished, you just give me a call. I would prefer to mainly twist the criminals out for their money and then drive them into exile but if some of the people currently robbing my Republic need stretchin', I'm down.
Good thing the army has been rotating through Iraq these past six years - they might have learned how to keep the power on to most of us most of the time. Fallujah on the Pacific.
Iraq is the size of AZ and largely undeveloped. Cities eat up military formations at a stupendous rate. You could drop the US Army into the US continental expanse and they would do nothing but hasten substate fragmentation by destroying the economy.
Just thinking - I wonder if Alan G is all nostalgic tonight... with the FFR back to one percentish and all. He and Andrea by the fire... wine in hand listening to old favorites & reminiscing. Ah - it was a very good year...
Dawg - you pose some interesting ideas, but who do you think is going to make you do anything? For what purpose? I just can't see it. Sure, there might be nut-cases out there willing to do something stupid. There always are. But most people will be cool, I think. It's a crisis. Not a time to panic. Bad apples will be dealt with in short order, most likely by people like yourself. Be a voice of reason. Never underestimate the average American, although I know it seems stupid to say it. Most people just want peace and quiet.
Iraq is the size of AZ and largely undeveloped. Cities eat up military formations at a stupendous rate. You could drop the US Army into the US continental expanse and they would do nothing but hasten substate fragmentation by destroying the economy.
Byzantine_Ruins | Homepage | 10.29.08 - 9:28 pm | #
Sure. Whatever. But could they keep the power lines up and the lights on?
[that would be the question our provincial governors would ask - before taking the afternoon off for the games and then a short orgy]
I'll simplify
1. Jack the rent up.
2. dump the bad credit card debt on some idiot bagholder.
3. patch the roofs.
4. toggle debt and planned infaltionary rent on the REIT while maintaing margin on store sales.
5. wonder why nobody shopped at Target.
I see a flaw, how does UBS abscond with the "gravy"?
"if some of the people currently robbing my Republic need stretchin', I'm down."
I think people will read Dickens, and conclude that the Guillotine is the most suitable instrument for dealing with banksters. The word "tumbrel" will be especially popular, as will pithy phrases like, "no more bonuses for you, Mr. head-in-a-bucket!"
Homeland security monitoring disclaimer: the author does not encourage anyone to place a banker in a Guillotine in real life. Should citizens try this, and should a functioning judicial system be jailing bankers by the tumbrel-load, then he will intervene to have them transferred to the judicial system.
ova writes: America is going to be one big Michigan soon.
....
In a Michigan winter too. My firewood guy says business is great. Tossed in some complementary cashew brittle with my order. Maybe chainsaws have investment potential.
The liklehood of the US military being able to keep the lights on in So Cal is about as promosing as GM making a car that sells over 50,000 units next year
"What is ur prognosis for the GDP number and the stock market behaviour after that?"
The usual means for faking GDP growth is to understate the deflator (i.e., inflation). With oil down, that will be especially easy to do. Perhaps also they will include the TARP in GDP (gotta count all that investment too). They are known to cook the books politically, and now is the time.
I think the market it liquidity-driven. The GDP will be forgotten within the hour, whatever it says.
Participation in TARP requires caps on executive pay and elimination of dividends. If this is "TARP" then why are we worreid about Wells Fargo bonuses and dividends.
Obviously Treasury is making an end run around the Congressional oversight promised in the Economic Stabilization legislation.
"I think the market it liquidity-driven. The GDP will be forgotten within the hour, whatever it says."
No one believes the Fed anymore anyway. It is unlikely the Fed would be able to convince anyone that we were in a recession. The numbers have been kind of funny for a while as they try to correct a recession in "confidence."
As Grahm said, ~bunch of whiners, it's all in your head.~
Investors' childlike demand for safety has made the financial world terribly risky. As we rebuild our broken financial system, we must not pretend that risk can be regulated or innovated away. We must demand that investors choose risks and bear consequences. We need more, and more creative, risk-taking, not false promises of safety that taxpayers will inevitably be called upon to keep.
There is a systemic and cultural demand for the sure thing, and the sure thing at all times. This has permeated virtually every level in society- global society. Absolute safety and predictability, always. Oh, and on the inflation front-I'm increasingly beginning to agree with AllenM. We might see real deflation for a quarter, but similar to flooring an old V8 with an 850 Holley double-pumper, sometimes the acceleration has a considerable hesitation before it takes hold.
I wrote you a big response, dryfly, but haloscan f'in ate it.
In short form, it won't be an issue while there's a functioning central state. People will talk about it but while the mechanism of the state remains intact it won't happen, and if it does, it'll be quickly wrapped up.
Once there isn't a functioning central state, all bets are off. It will be a sudden tipping point, not a gradual grind.
What I thought was a free lunch turned out to be a shit sandwich!
The more you think about the situation, the more absurd it becomes. The government picks your pocket and hands the cash over to the bankers and then they hoard it. Don't ya know? It's a bad time to make loans. Consumers are losing their jobs and having their pockets picked by the government. We'd better hoard our capital. Oops, just lost 20 billion on a bad swaps bet. Uncle Sam better go get me some more money or this sucker could go down.
Too Big To Fail is quickly morphing into Too Big To Not Fail.
multi-layered leasebacks..make sure the REIT dont go Enron on ya.
cracker | 10.29.08 - 9:31 pm | #
Amen. I read some of that presentation... then had one of those epiphanies... its useless wasted non-value added activities like that that are killing America. Worse than taxes & bureaucrats and terra-ists.
Think of the resources going into supporting those yahoos - they are parasites.
We've leaned up the factory & distribution & store floors and bloated the offices with nonsense like that.
I mean what the hell does it do for me - the Target shopper? How does it increase productivity or improve profitability? Really?
Does it make the toothpaste better or the red in the red dot redder?
It's a paper invention that increases shareholder value? Huh - say what?
That's why we need a tax revolution - it isn't the do gooder lefties who are the threat - its the accountants & bankers & lawyers.
BR,
The formerly Great State of California is far closer to a tipping point than many suspect. Having "dealt" with the deficit last month a new $11b and growing deficit. And that's before updating the missing tax revenue I mentioned upthread. Da Governator told a group of educator representatives to prepare for $2-$4 billion in immediate cuts. They said no as if they have a choice.
"US military's without peer at blowing stuff and people up from a safe distance."
I am reading General Boykin's new book. I won't comment on the controversial evangelical issues, however, the book describes in great detail the Delta force, in which US special forces undertake enormous risks, at point blank range.
My latest-read chapter described the rescue of Kurt Muse from Modelo Prison in Panama City. There a Delta force soldier dropped from a wire in the ceiling and hung suspended in front of Muse's cell, exchanging small arms fire with the prison guards. A 24-hour watch had been posted to shoot Muse in the event of a rescue attempt, and was thus thwarted.
I agree that the US is nonpareil at remote demolition, but that's not the whole story.
I think people will read Dickens, and conclude that the Guillotine is the most suitable instrument for dealing with banksters. The word "tumbrel" will be especially popular, as will pithy phrases like, "no more bonuses for you, Mr. head-in-a-bucket!"
Coincidentally, my red phrygian cap came in the mail today. =)
dryfly,
Im an accountant and my own banker, insurance agent, investment advisor, and a High School Principal with a small transportation services and retail leaseback operation...
I'm also a real estate broker.
I see value in the collateralized bottle bonds......lets issue them on the Hang Seng, or TOPIX.
as Loena Helmsly said, "Taxes are for little people".
voting my conscience, writing in Ron Paul, voting against all incumbents.
Oh, and on the inflation front-I'm increasingly beginning to agree with AllenM. We might see real deflation for a quarter, but similar to flooring an old V8 with an 850 Holley double-pumper, sometimes the acceleration has a considerable hesitation before it takes hold.
Doc at the Radar Station | 10.29.08 - 9:55 pm | #
I tend to agree w/ AllenM too BUT we might experience deflationary pressure much longer & more intense than anything we've seen in our lifetimes... that lag before the fiat floods fully kicks in could take a while - and you know while they are waiting those the knuckleheads at the fed & congress will be pumping the gas peddle for all its worth until...
VaaaaaROOOOM!!! Off it goes.
Good thing inflation is easy to wip... just ask Volcker. Piece of cake... just like what Ben said about beating 'deflation'.
As a native Virginian, I hold out hope that Virginia will lead the rebirth of the US, after its Fascist nightmare. The state seal will become the national seal.
Not only have we the phrygian cap on the reverse, but on the obverse Tyranny lies prostrate beneath the foot of Virtus. That is my dream.
Rob Dawg writes: The formerly Great State of California is far closer to a tipping point than many suspect. Having "dealt" with the deficit last month a new $11b and growing deficit.
God I'm glad I don't live there.
It's about the feds, though. They will either bail out your state or send troops to quell any uprisings.
When they can't afford to do either, or when they try but their efforts are widely seen as unable to match the scope of the crisis on an ongoing basis, that's when the shit'll start to really hit the fan.
It'll take a McCain victory or Federal inability to fund the budget or something similar for people to really give up the ship. New Orleans got everyone ready and willing to accept the concept, and they haven't re-established trust yet.
The Mandate of Heaven is the ultimate irrational exuberance -- it remains LONG after there's no reason to believe in it, but once it is gone, it is as hard to recapture as it was to rupture.
FDIC is going to modify principle balance for selected loans.Well I've got news for the government.Instead of a million man march on washington,prepare for a 50 million man march on washington.Revolt!
Treasury officials may expand the government's financial rescue plan (TARP) to include non-publicly-traded banks, potentially opening up the program to thousands of new institutions. About 6,000 privately-held financial institutions aren't eligible under the current rules.
Rumors are swirling that oil companies will be next in line for TARP.
So I talked to the trees, those truffula trees, all my life I'd ben searching for trees such as these.
They told me some tree-truths, which I must relay at urgence forsooth. I hear we are near to further reproof.
They said that big trees always abound, but big trees are not a forest unbound.
A forest must always hold dear
How tall trees come down and the
Way that the big timber falls
Because saplings need their chance with no shade, and light and shadow give their grade.
After reading this thread, I am certainly glad that none of our fine military families were victimized by relitters or mortgage brokers looking for a fat commission. The bankers were really clever about protecting them.
Screw it, I can't wait an hour, who has time for this shit?
Exxon to be bailed out with TARP:
Treasury officials may expand the government's financial rescue plan (TARP) to include non-publicly-traded banks, potentially opening up the program to thousands of new institutions. Such a move may also placate the powerful community-banking industry, an outspoken critic of TARP, due to its fears bigger rivals will use the government's largesse to sweep up healthy firms that are too small to fight back. About 6,000 privately-held financial institutions aren't eligible under the current rules.
Oh yeah, imagine the GM autoworker National Guardsman coming home from his third stop loss front line tour to a RIF and NOD. Then he gets called up again this time by the governor to quell unrest of his fellow line workers. Think of the scene in Braveheart where the king sends in the Irish to battle the Scots.
Tax treatment of certain income received in connection with the Exxon Valdez litigation: The bill allows qualified taxpayers who receive qualified settlement income to use 3-year income averaging and contribute a maximum of $100,000 to their retirement plan.
Rob Dawg writes: Oh yeah, imagine the GM autoworker National Guardsman coming home from his third stop loss front line tour to a RIF and NOD. Then he gets called up again this time by the governor to quell unrest of his fellow line workers.
Except it'll be a cop shooting you and he'll do it 'cause he's a cop. The soldiers will really be secondary to any fireworks because they are just as unreliable as you suspect. It'll be the right-wing paramilitaries that were formerly your police force that do all the killing and the "disappearing".
I do not get this bill. I am a poor crop farmer in America due to circumstances beyon my control, but I do not understand your laws, so can some amigo here help me tonight?
ESTIMATED BUDGET EFFECTS OF THE TAX PROVISIONS CONTAINED IN
AN AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 1424,
SCHEDULED FOR CONSIDERATION ON THE SENATE FLOOR ON OCTOBER 1, 2008
There are many confusing things which my family and I do not understand, which may be related to the fact that we do not speak the language of the lawyers, but what is, "Special depreciation allowance for qualified
disaster property ("bonus depreciation"), Extend and modify the tax credit for R&E
expenses, Extension of alternative minimum tax relief for
nonrefundable personal credits and increased
AMT exemption and Allow ordinary treatment for gain or loss from sale
or exchange of certain preferred stock??
Good thing inflation is easy to wip... just ask Volcker. Piece of cake... just like what Ben said about beating 'deflation'.
What's to worry about?
Well, I've got some tiny tadpoles of concern about the treasuries that are supposed to blow up soon and send interest rates skyrocketing. Well, if that happens... then the deflationists would have a better argument in that case. AllenM argues that will happen as well (no more dollar hegemony). But, if it does, that would be like a massive involuntary interest rate hike. The Fed would have lost the rabbit and deflation would then take over. OK, guess I'm not totally convinced that inflation wins just yet
... But the big news Wednesday was a wild swing in U.S. markets in the dying minutes of trading that followed an erroneous report about General Electric on the Dow Jones newswire. With 13 minutes left to go in the session, Dow Jones issued a bulletin headlined: "GE CEO: Want To Keep 2009 Profit Same As 2008." Four minutes later, the stock began plunging, falling from $19.95 to $18.70 US at the close, slicing six per cent, or $12.4 billion US, from the company's market capitalization - the sudden nosedive of the third-largest U.S. corporation sent the Dow Jones Industrial Average plummeting 372 points, erasing $120 billion US in market value in eight minutes.
Dow Jones issued a correction after the close, but the damage was done: A near 300-point rally turned into a drop of 74.16, or 0.8 per cent, with the Dow ending the day at 8,990.96. The S&P 500 closed down 10.42, or 1.1 per cent, at 930.09 after paring nearly four per cent in the final eight minutes, a haircut of $300 billion US. The Nasdaq composite trimmed 7.7, or 0.4 per cent, to 1,647.20. ...
Because the FOMC did not cut more than 50 bps, I am wondering if the GDP figure will not be all that horrific. I know it is expected to be only slightly negative, with the next quarter being of more concern, but.... Either that or the Fed knows that it is only the special facilities that mean anything right now.
To calm myself I have to go back to the old saying that IF IT IS TO GOOD TO BE TRUE THEN IT USUALLY IS.Big government givaway will not last without serious,serious,repercussions!
... the Supreme Court's ruling Wednesday that sliced the punitive damages the hard-hit fishing villages could expect from the 1989 Exxon Valdez spill was received here as insult added to injury.
Before the justices' decision, the average payment to the 33,000 plaintiffs was expected to be $76,500. Now it's about $15,000.
Many Alaskans had given up on receiving any compensation. Some had held out slim hopes that it could help them retire or stave off bankruptcy. But it would never be enough to make up for the damaged lives, said Derek Blake, a fisherman in Cordova.
"Seventy-five thousand a person -- if you want to talk about first-year losses, it was that times 10," said Blake, 25. His father, Kory, had to sell his house to pay off debts after the spill.
"For 15 years it ruined my life," Kory Blake said by cellphone from the boat where he and his son were fishing Wednesday.
See TARP: Income averaging for amounts received in connection with the Exxon Valdez litigation
The bailout bill would give a tax break to Exxon Valdez plaintiffs, allowing them to average out their punitive damages awards over three years rather than suffer a one-time tax hit from the Internal Revenue Service, as well as other provisions.
Exxon sells 300,000,000 boo to TARP ap at $147.99/pb...which gives the oil giant 16T dollars of working money to pay off land hold leases and production crews 'til 2056. Hanky says its a good deal to secure US supply of oil...
"We have used (the Fed facility) as one of our CP sources," Harley-Davidson spokesman Bob Klein said Wednesday in a phone interview. "Its an additional source of diversification," he added, noting that traditional commercial paper sources remain available to the financing unit.
wo weeks ago, when Harley-Davidson announced a 37% decline in third-quarter earnings, Chief Financial Officer Tom Bergmann said the company expected to be eligible for the Fed program. That, Bergmann said, gave the company confidence that its financial services unit would have continued access to the commercial paper market, an important source of funding for the day-to-day needs of companies.
The Commercial Paper Funding Facility gives companies a chance to borrow directly from the Fed at a time when investors generally arent interested in paper with maturities beyond a few days or weeks. A wide range of companies - from General Electric Co. (GE) to Morgan Stanley (MS) to International Business Machines Corp. (IBM) - have participated or expressed interest in the Feds program.
Harley-Davidson has said it hopes to access the unsecured debt market in the fourth quarter to raise up to $500 million for the financial services unit. HDFS, as the unit is known, has a $400 million debt payment due in December.
NyTimes...just posted that NY leads all states in first-time unemployment numbers...layoffs spreading from Wall St. to publishing, law firms, tourism, Amex, etc.
I think taxpayers should invest in hogs and cocaine and beer, dope, tattoo parlors, whore houses, needles, guns, ammo, porno, whatever it takes to put America back on the road to being a better casino!
As a taxpayer biker, I'm proud to let my long freak flag hair blow in the wind and to thus feel taxpayer revenue beneath my ass, as I ride high as a kite towards the next bar!
I hope you non-Hog-riding pussies who don't have taxpayer subsidized bikes are pissed, cause I hope to ride away with your daughters and loot your town on my taxpayer backed cycle from hell.
The HUD mission
Jackson believes promoting homeownership should remain one of HUD's primary missions and would urge the next president to back such a policy.
cant have a slave without hope, and a large mortgage.
OK, guess I'm not totally convinced that inflation wins just yet
Doc at the Radar Station | 10.29.08 - 10:49 pm | #
If TARP, TAF and all the rest haven't convinced you they intend to 'print baby print' - to steal a theme from our would be VPILF - then you're kinda like the dinosaur going 'ohhhh ahhhhh' as the asteroid streaks across the sky.
I don't know how soon the inflation will kick in nor do I know if it will be bad like in the 70s or colossally Austrian-blow-off-Wiemar-like bad... but there is nothing holding them back from it getting some kind of bad... and the longer the lag between the pedal pushing down & the eventual vaaaaRROOOOMM... the worse it will get.
Screw homeownership, all The Harley-Davidson Pussies have Socialized bikes now with TARP and America is like a beer ready to be drained! Bring on more cash for Harley-Davidson you dumb fucking tax payers!
Long TBT with 1/4 of my account. No progress to speak of but when it rips I want my position in place...
Bearly I'm with you man. I have a reckless 1/3 of my retirement IRA short Treasuries. Part in TBT and more in PST.
If the economy stabilizes rates will go up, or if the dollar collapses they'll go up. Plus the sheer funding demands of a $1.5 trillion 2009 deficit...
About the same time the deflation ends next year.
I get nervous about counterparty risk in these ETFs though. Any thoughts on that?
I can't imagine Harley-Davidson riders will fly The American Flag anymore! They should wear North Korea flags and have those pussy bikes built there too, but then how would anyone know the difference between an American bike and a North Korean bike? Very confusing for these bikers!
Agreed that TARP is going to stall in tier 1. But BB won't stop there, fiscal stimulus is already in pipeline and more to come.
Japan's mistake is they stopped short of total war on deceleration of money. Bernanke knows this and his Fed will do whatever they need to do to make it crazy to hold on to the cash. Inflation will be achieved, I doubt they will be able to control it once they get it going though.
Sorry, man disagree. You missed the memo on Velocity. This cash goes from FED/Treasury to Tier one vault...and stops.
MV is equivalent to PQ.
I'm not convinced that TPTB are increasing M over it's destruction, but V is way down. Way!
V dropping now like a pair of dirty shorts... but wait until the bridges to nowhere come back in style - oh and they will. We'll each have a couple.
Though they won't look like bridges - they'll look like education, or tech or health care... investing in America for the twentyfirstiest century. Something politically 'popular'.
Or just buy a whole lot of mortgages (and in effect print money to give back to people to spend)... McCain's bridge to nowhere.
Unlike the Japanese who save & squashed their stimulus - we'll all go take our TARP Tech Inc. paychecks and buy TWO hogs - one for each cheek. Yeeehaw!!
The only question is how soon it kicks in, how bad it gets and how many of these cycles we can survive. That I can't answer - but we got AT LEAST one more good one in us.
Currently accounting, since I can't short in my IRA, I just buy long-dated call options that are in-the-money, just in case the parabolic move has not taken place by the time the option expires. That way you can keep rolling the expiring options into new options.
Traders in Tokyo have given warning that about $90 billion (£55billion) of complex foreign exchange products, sold mainly to Japanese households and institutions, are on the brink of falling like a house of cards.
A rescue effort by the product issuers - large Japanese, European and American investment banks - is expected to involve extensive hedging measures that will throw global currency markets into even deeper turmoil. ...
"V dropping now like a pair of dirty shorts... but wait until the bridges to nowhere come back in style - oh and they will. We'll each have a couple.
Though they won't look like bridges - they'll look like education, or tech or health care... investing in America for the twentyfirstiest century. Something politically 'popular'."
While I agree this is the plan this appears to be government sponsored spending.
This sucks capital away from private enterprise resulting in higher real interest rates (for private companies).
I still don't see how this doesn't turn into an ugly drawn out recession.
I agree that American consumers will spend, I just don't see very much credit left over for consumers when all is said and done.
"Unlike the Japanese who save & squashed their stimulus - we'll all go take our TARP Tech Inc. paychecks and buy TWO hogs - one for each cheek. Yeeehaw!!"
No capital...no savings...this is why this fails.
Unless we have a system THAT ALLOWS PRINTING, which ours does not...won't happen.
Why do you think so much sterilizations been going on?
Dead meat deflation. This ain't the your father's 70's.
... At the same time, Japan's Big Three banks - Mitsubishi UFJ, Sumitomo and Mizuho - are tallying mounting losses from Tokyo's plunging stock market. Japanese banks have vast share portfolios that are bleeding red-ink.
When the Nikkei share index hit a 26-year low of 7,000 points this week, combined paper losses on the stocks held by the Big Three since March 2007 amounted to about $100billion.
Industry figures said that if the savaging of the Japanese banks' huge stock portfolios continues, it could trigger a capital crisis among institutions recently viewed as among the safest and best capitalised in the world.
The stock losses suffered by Mitsubishi UFJ alone - $41 billion - are greater than the total sub-prime writedowns of HSBC, JPMorgan or Bank of America.
Well, it is almost time for Christmas bonuses.
well, clearly not Nemo.
Second?
loan money?
who is butt stupid enough to want to borrow money in this environment?
Holders of hoopajoops and hoopajoop derivative products will note on page 49875-D of the hoopajoop prospectus that increases in the national debt beyond 11 trillian constitute a Currency Crisis Event under the terms of the hoopajoop implosion plan. Please note that while you have enjoyed modest and immodest returns on the hoopajoop regardless of market conditions, your returns must be denominated in United States Dollars. Claims made in the hoopajoop prospectus that the hoopajoop "always goes up, even when it goes down," reflect gains calculable in United States Dollars and in no other currency. Thank you.
repost from previous thread:
to the theme of 'Candle in the wind'
YouTube -
? v=kQdNLFVdwfQ
And it seemed to me bankers lived their lives throwing caution to the wind...
LOL.
oops, sorry:
YouTube - Credit Crunch Anthem
Many investors have voiced concerns regarding the hoopajoop in light of recent economic developments. The hoopajoop is a sound instrument which is capable of matching and exceeding all other investment vehicles on the market. You will note that in response to the TARP bailouts, we have modified the hoopajoop's highly structured structure to incorporate a small handcrank on the side. Turning this crank will engage the dollar printing apparatus which we have leased for hoopajoop use from the U.S. Treasury.
The National Debt is now $10.53 trillion. Remember when the debt passed $10 trillion? That was on September 30th ... less than one month ago.
Time flies when you are having fun.
It just means that they'll have $25 billion loss by End FY2008
To whom would they lend it? With existing and forecasted economic conditions, who is a good debtor?
Real estate?
Automobiles?
Retail?
Go Fiscal Conservative Republicans! Yayayay!
Bush and Reagan both doubled the national debt!
I think they'll "lend" it to Satanson if he can get the gov't to guarantee all the bad mortgage related products they originated.
I cannot believe the temerity of Paulson
First he, by all accounts, rewrites a tax statute without Congress as required by law to allow Wells Fargo to finance a higher $/share takeover of Wachovia with essentially government tax credits.
Then after leaning on Bair to approve this new 'spontaneous deal', he is ready to 'lend' WFC a further $25bn in cash (non-callable, no voting rights, etc)
FYI: The CEO of Wachovia worked at the Treasury as of last year and is a friend of Paulson such that he had to excuse himself from any negotiations by recommendation of house counsel
I might just buy the Citi shares for no other reason than the Treasury should have no qualms single-handedly financing a takeover by Goldman Sachs. Paulson still has 2 months of transition time to rewrite a law or 2, lots of time
Seriously, whatever happened to the "bond vigilantes"? Did they all retire and move to the Mediterranean?
Half to buy out a rival, half for bonuses to retain "top talent".
Hey now, these are very very reduced bonuses. Don't be mean-spirited, telling those secretaries and mail room clerks they can't have bonuses. They depend on that bonus to get them through the year. It is an economic stimulus to pay out bonuses to the cheaters & fraudsters in this thing of ours.
HoopajoopsLTD - Can I buy a hoopajoop on credit and pay you back with hoopajoop dollars I print myself?
Bottom!
emo,
the bond market does not speaka da engrish no mo.
It can only haz Mandarin or Yapanese.
they do not vigilante themselves.
Step one: Issue to the U.S. Department of the Treasury 25,000 shares of Wells Fargos Fixed Rate Cumulative Perpetual Preferred Stock, Series D without par value
Step two:..............
Step three: Profit!
I have BAD haloscan lag, anyone else?
"I cannot believe the temerity of Paulson." EvilHenryPaulson
Yes you are quite bold. When you are above the law, the only you have to fear is yourself.
snake-eyes:
Hoopajoops may only be purchased on credit. Luckily, you can borrow against a hoopajoop you have not yet purchased. In fact, except for hoopajoops made available through the Fed's HJCPMSJUU plan or HCANODEHRTARP plan, this is the only way to buy them.
I eagerly await the GREAT REFLATION.
Will it be known as the GREAT REFLATION of 08 or 09. We shall see.
Nemo, good question about the bond vigilantes ... next year the Treasury will have to sell around $2 trillion in treasuries to cover rollover and new debt. It makes me wonder ... at some point investors might balk, and interest rates could rise
We are talking some huge numbers here.
Best Wishes.
Remember when the debt passed $10 trillion? That was on September 30th ... less than one month ago.
Bush is still on track to double the federal debt by Jan 20, 2009.
HoopajoopsLTD - Sign me up!
I have BAD haloscan lag, anyone else?
Anoddamoose | 10.29.08 - 6:55 pm |
Yes!
Seriously, whatever happened to the "bond vigilantes"? Did they all retire and move to the Mediterranean?
Beijing and Riyadh
Hey Calculated Risk --
Could you do maybe do some charts about U.S. debt by maturity? Seeing that $2 trillion (and other numbers) visually, especially compared to history, relative to GDP, etc., would be really interesting.
(I am not sure what presentation I am looking for, exactly, but I would know it when I see it. I am also assuming the relevant data are actually available from the U.S. Treasury.)
Okay folks, chill out about how all of this new debt will be immediately inflationary. Let the New World Order meeting on November 15 begin to make the obvious manifest.
Now, ironically, when the federal money is used to pay off a lot of this crappy paper, there will be a tremendous amount of money suddenly available from those closed loans.
Cui bono?
That should be the smart money starting to figure out that resources and stuff are going to be the next huge bubble.
Send citibank a half mil for my mortgage on the overpriced debtburg here in Pahoenix, and they now have that much more cash to play with.
I win through having that much more monthly cashflow.
Now, the greatest reflation of all time is starting to creak and groan and begin, and you want to own Treasury Bonds?
Let me scan the front page of my new Institutional Investor:
America's Credit and the Dollar come Under Siege, and
Is this the End of US Financial Hegemony?,
I think some of the other bright folks are beginning to understand what lies ahead!!!
Someday this war's gonna end...
The US and China account for more than two-fifths of the planet's ecological footprint, with 21% each.
Bush may double the national debt, like all good republican presidents, but Reagan-BushDaddy quadrupled if my memory serves me correctly.
Of course Reagan officially opened Casino Capitalism Inc., took out the Military Credit Card, and opened the champaign.
Who needs reality?
Here's a refresher course on the making of a financial crisis better known as Keating Economics
Keating Economics
Nemo:
Debt to the Penny (Daily History Search Application)
giacutter writes:...Perpetual Preferred Stock, Series D without par value
A friend of mine once managed a Taco Bell. Their beef shipments would be stamped "GRADE D BUT EDIBLE". Well's Fargo is the new Taco Bell.
Hoopajoops LTD, do they come with wafers?
Hot of the presses...latest from Bill Gross:
PIMCO - IO Gross November 2008 So CQish
"at some point investors might balk, and interest rates could rise"
uh, like Iceland's 18% or Bulgaria's 800%
I was living in Sweden during their crisis. My pay checks were walked down to the Accounting area and we were given cash if we wanted 'cause it took 3-5 days for funds to be made available (inter bank lending, ya know). And I was getting almost 100% interest in short CDs.
I have BAD haloscan lag, anyone else?
Anoddamoose
y
Anoddamoose writes:
I have BAD haloscan lag, anyone else?
Anoddamoose | 10.29.08 - 6:55 pm | #
I was having a of trouble and I closed my browser, cleared cache, cookies, etc... and it seems to be doing better.
Calculated Risk writes:
Nemo, good question about the bond vigilantes ... next year the Treasury will have to sell around $2 trillion in treasuries to cover rollover and new debt. It makes me wonder ... at some point investors might balk, and interest rates could rise
We are talking some huge numbers here.
If you have a 3% long bond and rates got to just 6% your principal is cut in half. These aren't unthinkable black swan numbers. And worse, once that happens nobody will want to buy your long bonds anyway.
All the profits from these various investments may zero out the entire national debt. Don't you guys pay attention to Hank?
crispy&cole writes:
Hot of the presses...latest from Bill Gross:
Re-cap please too long to read and could care less about what his mommy told him. Didn't know he was from Butler Co., Oh. We were neighbors once
Rob Dawg writes:
Calculated Risk writes:
Nemo, good question about the bond vigilantes ..........
We are talking some huge numbers here.
If you have a 3% long bond and rates got to just 6% your principal is cut in half.
Funny. Some financial wizard tonight said Fed rates will go lower but the Fed will then move to raise med. and long term rates higher.
Seriously, whatever happened to the "bond vigilantes"? Did they all retire and move to the Mediterranean?
Don't forget the contingent liabilities with the FRE/FMN guarantees.
I can here Buffett now,
"THEY made WFC take the money, it was MANDATORY."
Bond vigilantes laying in wait for Obama. They like W.
Basel Too --
I am more interested in seeing the debt by maturity... How much is coming due in 1 year, 2 years, 5 years, etc.
Thanks for the link, though; that is interesting.
that isn't a typo - almost $1 trillion in less than two months as the Treasury raises cash for the TARP and for the Fed's liquidity initiatives.
It isn't a typo, but unfortunately it is a $7 or $8 trillion annualized rate.
The biggest swindle in history.
I'm wondering if tracking multiple threads might be the problem with the haloscan lag. Everybody get on the current thread and see if it doesn't correct the problem
Now that Wells has the money, will they let the shadow inventory monster out of the closet and dump all of those REO's on the market? Me thinks this will happen very soon.
Sacramento Real Estate Statistics: Insight into Shadow Inventory
Bill Gross :
"I think of myself as a pretty smart guy, but not that smart, if you know what I mean; no Mensa candidate but intelligent enough to earn a few paper degrees that helped get me a job where the real education began. My mother used to tell me that I had the highest IQ of all the first graders in Butler County, Ohio, which sounded impressive until I figured out that there were just a handful of kids that had taken the test. Youre smart but not a genius if you graduated non cum laude from both Duke and UCLA graduate school. Thats me. Still, Ill take it because Ive come to the conclusion that success at least in a career requires more than an IQ. It requires a CQ."
Translation : " Im a total douchebag"
I mean, seriously, who would write something like this?
Well, you people can go ahead and have faith. You will sleep a bit better as a result.
Me, I will wait. The bottom is nowhere in sight. Roubini is stroking the public in hopes of something, I know not what. Nothing would surprise me now.
I only know when the bottom will arrive and am waiting patiently for it.
Nighty, night chilluns. Ya'll be good, ya hear.
Seriously, whatever happened to the "bond vigilantes
Some are Chinese, some are Japanese, and some are just wealthy Americans begging to be bailed out from their foolishness.
That said, as soon as congress attempts to bailoout Joe Six Pack rates will be shockingly high. Mark my words.
This is the greatest most shameful swindle in history.
But it gets better (from PIMCO's Gross):
"Can these and a host of other investment ideas come from a commonsensical understanding of the uranium atom, the difference between fission and fusion, and its metaphorical connection to levering and delevering? We at PIMCO think so."
I never understood this mumbo-jumbo anyway, but I think Gross is taking it to an even higher level. Maybe he's saying our money managers need a nucelar physics degree - to dispsoe of all this financial nuclear waste.
emo,
the maturities are on the site, but buried. here is the detail report for debt outstanding as of sept 2008
http://www.treasurydirect.gov/govt/reports/pd/mspd/2008/opdm092008.pdf
[If you have a 3% long bond and rates got to just 6% your principal is cut in half]
Long TBT with 1/4 of my account. No progress to speak of but when it rips I want my position in place...
bond vigilantes
Aug. 11 (Bloomberg) -- The bond vigilantes who've been missing in action under George W. Bush may be preparing for a return engagement once Barack Obama or John McCain takes office next year.
Investors and former policy makers predict that the same market forces that torpedoed President Bill Clinton's ``putting people first'' spending initiatives at the start of his presidency are gathering again at the prospect of McCain's tax cuts and Obama's health-care and education programs.
``Though times are different and a lot of the government spending is necessary, we're going to see rates rise in a saw- tooth pattern over the next few years,'' says E. Craig Coats Jr., the head of Salomon Brothers' government securities desk when it was the world's biggest bond trader.
It's not too late to jump in on some swaps
As for Gross, dollars to donuts here's his plan.
Buy up auto loans and some insurers on bet the government guarantees them effectively. Then short every available treasury with a maturity greater than 2 years. Oh and uh, collect those TARP fees that he publicly indicated he didn't want
Anybody, and I mean this categorically, anybody in this market is a moron. So what if you 'make money'. brag all you want about how fucking swift you are, you're a moron, an unmitigated moron and I will be present at the auction of your assets.
glad might be an interesting instrument to watch if Obama gets elected. Uncertainty seems to make glad attractive...
viking
methinks
The is an article about the Reserve Fund that broke the buck Sept 16 which got this whole mess rolling.
The investors cannot even get their .97 on the dollar. Millions of people are affected.
A Money Market Lockup - NY Times
I don't know where CR is getting this "$2 trillion in rollover debt". Most of the existing debt is already in short-term instruments.
The Federal gov't has borrowed short by several trillion and loaned long (entitlements).
It's one gigantic S&L waiting to blow.
I'm reminded of the occasion of a bonfire, when several like minded individuals gathered to discuss current events. Someone said, "Hey, everybody I can whistle out my ass."
The sound is not dissimilar.
bearly,
I admire your conviction wrt TBT & bonds. I have no position (never really have), but I'm bearish on yields longer term. It's just nice to read someone putting their money on something that hasn't worked out so far. Kudos
CR,
I think that you are underestimating the deficit. I expect treasury issuance to exceed $2 trillion without any rollovers.
Here is Morgan Stanley's estimate as of two weeks ago and time flies:
Cost of U.S. Crisis Action Grows, Along With Debt (Update1) - Bloomberg.com
The 2009 budget deficit could be close to $2 trillion, or 12.5 percent of gross domestic product, more than twice the record of 6 percent set in 1983, according to David Greenlaw, Morgan Stanley's chief economist. Two weeks ago, budget analysts said the measures might push deficit to as much as $1.5 trillion.
Bad credit? No credit? As the proud owner of a brand new 2009 Series Hoopajoop from HoopajoopsLTD (TM), I am in a position to answer all your prayers. No proof of income, no down payment, 125% LTV, Hell, no signature! Apply Today! No request too small! 100% Gar-on-teed! Call today! BR-549
If you have a 3% long bond and rates got to just 6% your principal is cut in half. These aren't unthinkable black swan numbers. And worse, once that happens nobody will want to buy your long bonds anyway.
Rob Dawg
Well what if interest rates go up but we get price stagnation or deflation. Seems like a ridiculous question but I wonder....
Basel Too --
Again, thank you.
Holy cow that is a lot of Bills and Notes...
re: long-term rates.
Don't forget BB has already telegraphed his intent to attempt to cap long term rates.
Not sure how that will work out, but I would factor that into any bond investment decision.
Throw off the chains of capitalism. You are enslaved to the pursuit of wealth.
Anonymous writes:
The is an article about the Reserve Fund that broke the buck Sept 16 which got this whole mess rolling
So dont sleep at night and get maybe 1% interest or take it out and shove it in your pillow and gets lots of priceless sleep
EvilHenryPaulson
Thank you for the bloomberg link. Well worth the read. Will all of the discussion of the Feds bailing out the states... this has a HUGE impact on national spending by governments of all sizes.
Got Popcorn?
Neil
Holy cow that is a lot of Bills and Notes...
Like I've been saying: the US Government is sitting on the largest mortgage reset in the history of the world.
Volker, you da man! It would be much appreciated if you would submit an all-caps post advising of the market bottom so I know when to load up. Thanks in advance!
Volker - You're right. The best sales are yard sales
There is talk of increasing the bottle/can deposit from .05 to .10 in Oregon by the year 2011. The proposal is currently bogged-down in the predictable political fighting, but it appears likely that it will eventually pass and become law. This presents a lucrative investment opportunity. Although it is well known that bottle-deposit arbitrage between low-deposit and high-deposit jurisdictions (technically referred-to as the Kramer-Newman play) is financially impractical due to the offsetting transportation costs, my investment plan, being entirely locally-executed, will suffer from no such defect. Accordingly, I will begin hoarding all cans and storing them in anticipation of the upcoming revaluation. Cans are preferable to bottles as they are smaller and represent less of a collection and storage hazard.
There are a large number of homeless or semi-homeless individuals (independent contractors) in Portland who are engaged in the occupation of gathering bottles and cans and returning them to retailers in order to redeem the deposit. In order to accelerate my rate of collection, I propose to offer .06 on the open market for each qualifying can delivered to my storage location, which is a large building positioned in a high-traffic area, within a short walking distance of a bottle/can redemption center. I believe it will be possible to divert a considerable amount of can redemptions to my location with little effort or expense. By paying .06 and redeeming in January 2011 for .10, I expect enjoy a 67% rate of return on my investment.
As with any investment, there are risks. It is possible, though unlikely, that beverage manufacturers will change product SKUs such that old bottles and cans may only be redeemed for their original deposit amount, thus negating the arbitrage opportunity I seek to exploit. This was not done in previous revaluations, and there is no reason to believe it will occur this time. I also note that neighboring non-deposit states (eg., Washington) use identical product SKUs, despite the fact that this differential is routinely exploited for profit by a segment of the can-collecting population. It is also conceivable that the proposed legislation will not be enacted, and the bottle deposit will remain at .05. I intend to lobby vigorously for the passage of this law, but it is possible that I will be forced to liquidate the assets at par, resulting in a .01 loss per can.
Despite the risks, this is a good investment opportunity. I note that Coca-Cola stock has declined by over 26% in the last year. Why bother investing in the product when there is 67% or more to be made on the can it comes in?
Taco Bell & Grade D beef: Urban legend
snopes.com: Grade D But Edible Meat
Don't forget BB has already telegraphed his intent to attempt to cap long term rates.
Not sure how that will work out, but I would factor that into any bond investment decision.
Pissed Off In California
With enough liquidity lowering the short term rate and providing favorable borrowing conditions to banks will do it.
I've got some TLT puts for the short term, but I've been intrigued by Mish's longer term bullish stance on Treasuries. If we see zirp, a global depression (declining assets/commodity prices), an exodus from equities, and an emerging markets currency crisis (not to mention euro), where else are people going to put money other than US paper? A risk free 3% return starts looking damn good.
"Nemo, good question about the bond vigilantes ... next year the Treasury will have to sell around $2 trillion in treasuries to cover rollover and new debt. It makes me wonder ... at some point investors might balk, and interest rates could rise
We are talking some huge numbers here.
Best Wishes.
Calculated Risk "
Wait a minute, are you saying that this stuff has to be paid back?
Wow...
You know, that video of the Elton John song is funny, but precisely the problem:
We shouldn't be making funny videos about this. We should be in the streets.
All in good time, I suppose.
Corey what is your wacc?
I like it!
If you read Greenspan's cryptic speeches from the 90s, he was clearly aiming to repeat what happened in the 1937-1945 era.
That's why Bernanke talks about capping long-term rates. In the 1935-1945 era, rates were driven down below the rate of real economic growth. This, combined with previous debt defaults, allowed debtors to dig themselves out.
You're going to see big losses in US bonds because it has to happen to rebalance the system. Heck, that's how Greenspan righted the ship in the early 90s... doesn't anybody remember the Big Bond Blowout of 1994-95 which transfered about $1 trillion from savers to debtors?
This time is much, much bigger, though, but it explains why some people have bet on certain things. Learned behavior from the Federal Reserve's previous actions.
Anyone know of a good primer on stripped vs. unstripped treasuries? TIA
Pissed Off In California writes:
"Don't forget BB has already telegraphed his intent to attempt to cap long term rates."
The Fed doesn't control long-term rates. How does BB intent to accomplish this feat?
Re bond vigilantes...it's coming guys:
The cost to hedge against losses on $10 million of Treasuries is about $40,000 annually for 10 years, up from $1,000 in the first half of 2007, based on CMA Datavision prices. The equivalent for German bunds has risen to more than $36,000 from $2,000, while it has jumped to $64,000 from $3,000 for U.K. gilts.
...
Credit-default swaps on Treasuries have risen nearly 40 percent since TARP was signed into law Oct. 3, and are now about the same as Mexican and Thai government debt before the credit markets began to seize up in June 2007, CMA Datavision prices show.
Bloomberg
Corey - Don't want to pop your bubble, but those cans and bottles will probably only pay off at their stated value. HA HA - I said "bubble"
"With enough liquidity lowering the short term rate and providing favorable borrowing conditions to banks will do it."
Sorry, I'm not following.
2T is a lot of debt to sell and I would think that they're already filling up the short-end of the curve meaning they need to sell it on the longer end.
I just don't see how you can push so much debt out on the long end for sale and possibly cap the yield. Especially since we've already been seeing the government have to ante up a lot for failed auctions in the 20-25 year range.
The Fed doesn't control long-term rates. How does BB intent to accomplish this feat?
sm_landlord
No, but they are all linked. If i can be confident in my ability to lend long and borrow short there is cash to be made.
Usually they are linked. In todays markets who knows....
Broward,
Can you please explain this or provide a link? Not able to dig up anything with google. There was some discussion with respect to Australia but it did not look the same.
doesn't anybody remember the Big Bond Blowout of 1994-95 which transfered about $1 trillion from savers to debtors?
Broward Horne | Homepage | 10.29.08 - 7:54 pm | #
2T is a lot of debt to sell and I would think that they're already filling up the short-end of the curve meaning they need to sell it on the longer end.
POICali!
Edzachary, if banks have to make long term loans rates will come down.
I may not need a loan but i'll sure take one at 2% fixed for thirty years....
Today was a very good day for obscure gold stocks. Maybe the bond vigilantes have been scared off shorting and swaps because of settlement risk. Now they are buying whatever Canadian juniors Bob Moriarty has recommended in the last year.
The Fed doesn't control long-term rates. How does BB intent to accomplish this feat?
How are you going to make anyone pay you more than 5% when the Fed will loan to anyone for 5%?
They could also enforce it through executive order or possibly even pass something through Congress.
In the 1937-1945 era, a great deal of money went into low rate savings bonds to fund WWII. I don't know if that was legally mandated or not but if you want to see the future, look at the past.
"Edzachary, if banks have to make long term loans rates will come down.
I may not need a loan but i'll sure take one at 2% fixed for thirty years...."
The only way a business is going to get a 2% fixed for thirty years loan is in a depression. And how many companies will be borrowing in a depression.
If you're talking about mortgages then they're set to the 10 year. No chance in hell you see 2% mortgage rates.
BreakOut 1982 --
Wait a minute, are you saying that this stuff has to be paid back?
No, he is saying it has to be borrowed again.
I don't care how much you love the US you aren't going to purchase bonds that give you 2.25% every 6 months until 2038 knowing that the US has to sell another $1.99999 trillion to whomsoever is willing after you. Somewhere around $1.5 trillion and there are no more buyers and your principal is screwed.
Rob Dawg writes:
Somewhere around $1.5 trillion and there are no more buyers and your principal is screwed.
...still waiting...
"Rob Dawg writes:
Somewhere around $1.5 trillion and there are no more buyers and your principal is screwed.
...still waiting...
Persecuted Comrade Anonymouse"
I don't think we've ever tried to run a 2T deficit equivalent to 12.5% of GDP before. The last time we tried that was in the 80s @ 6.5% of GDP.
Look back and see how well we dealt with that period interest rate wise.
The Big Bond Blowout of 1994.
Sorry, can't find a reference although I could probably dig up my comments about it in dejanews.
The WWW didn't even exist until 1993 but if you look at bond yields over the past fifteen years, you can see it. Greenspan drove down rates in 91-92 to save Citibank (among others) from collapsing. Investors (like myself) piled into bonds expecting a deflationary event.
Except that Greenspan managed to reboot the system and whoever stayed in bonds too long got crushed in 1994.
That's the gameplan this time, too, except it will be... many trillions, I can't really estimate. Six or seven, maybe?
"To whom would they lend it? With existing and forecasted economic conditions, who is a good debtor?"
Who was it, peaKcredit? that said some time ago that bankers know a waterlogged debt markets when they see one.
And isn't that the crux of this issue? In a debt based money system we can expect "extraordinary measures" from the fed to get money flowing, and will probably err to the extravagent side.
Anybody expecting a righteous Mellon rectitude will be disappointed, IMO.
.
Pissed Off In California writes:
Look back and see how well we dealt with that period interest rate wise.
Only if you promise to look back and see what nominal GDP was during that period
bond blowup 1994
Broward,
If they need to suck say $1T out of the bagholders then they need to raise rates 50% on $4T, double rates on $2t or triple rates on $1.4T and so on.
Dawg sez 'I don't care how much you love the US you aren't going to purchase bonds that give you 2.25% every 6 months until 2038'
Oh, yeah? That's what YOU think, Dawg. And the magic hand, now backed by executive order, having writ, now writes your fricking pension fund into 2.25% bonds until 2038.
I don't think we've ever tried to run a 2T deficit equivalent to 12.5% of GDP before. The last time we tried that was in the 80s @ 6.5% of GDP.
Besides they aren't going to be called 'tax increases' because they'll give you 'bonds' with them - long, long term bonds. Think that one through...
Sometimes I think I should apply for a job in the new administration - no matter who wins.
Basel/Nemo
I looked at the link, rather quickly I admit. It looks like 2009 to 2011 is especially big?
The US Treasury issues these to buy the gov bills. Then in 2009, or whenever, foreign countries or whoever, redeem them for the total plus interest? This then gets sent electronicaly to the redeemer (not Jesus)?
Is this it?
I moved my entire 401K into the Primary Reserve MM last Nov. It was the safest thing the 401K had for me to put my money into short of pulling it out and taking the tax hit.
I thought I was being smart and was very glad as I watched every other 401K option tank to the tune of 30% or more then they broke the buck and now I sit and wait on 14 years of max contributions plus employer matching just locked up wonder what the value will be.... talk about a bummer.
It won't matter if they lend it. Well it will a little bit, but the old days of securitization, synthetic CDOs to move risk off the balance sheet, and cheap funding via the yen carry trade are over. We're back to banks holding loans on their BS with appropriate loss reserves. Frankly the $25B will probably be used just to improve capital ratios and shore up loss reserves.
SpeciousRiches!
Specious Riches
Can we get the YEN to get stronger again? I am tiring of these interventions YEN should be at 80 by now as Japan has money and savings. It has to be the 2nd strongest currency in the world behind the $. How is the Euro going higher and dragging oil up - they will be at ZIRP soon enough.
We called Wells about 6-8 months ago to get pre-approved. Minimum for NoVA was 20% down. They can lend but who can qualify?
Look at it this way, 20% down is less than it was 12 months ago
Look at it this way, 20% down is less than it was 12 months ago
RayOnTheFarm
Yes, very true. Heck, we can always go VA.
Oh, yeah? That's what YOU think, Dawg. And the magic hand, now backed by executive order, having writ, now writes your fricking pension fund into 2.25% bonds until 2038.
But remember, because it happens after the election, it will be SOCIALISM, and a reason to FLEE THE COUNTRY, and totally unrelated to the crony capitalism that's getting us into the obligations right now.
Modern American "Republicans" -- Privatize public funds, socialize private losses, flee country with Ayn Rand novel under one arm, money bag under other.
If they need to suck say $1T out of the bagholders then they need to raise rates 50% on $4T
I didn't claim that they would be able to do it, just that they're going to try.
Seriously, it's in Greenspan's speeches circa 1996-7 or so. He specifically talks about bond yields in 37-45 and circumventing "the anomaly of 1992" or some such language.
I keyed on it because I'd already done a lot of research and recognized what he was saying. And that's really Bernanke is saying, too.
It's a simple equation, really.
K = long-term economic growth
I = average interest rate for all debt
D = total debt.
K = I X D.
The problem is that during the upside of the K-Wave, investor won't accept an interest rate which equals true economic growth, they demand more. This creates an imbalance which eventually toggles the wave to the downside.
How do you fix it?
You force symmetry.
You force investors to receive a return which is less than economic growth by the amount that demanded during the upcycle.
I don't know if any of you listened to the Pershing Square webcast today on their proposal to TGT shareholders. I thought it was fascinating, and TGT's price seems to concur.
Essentially, they are suggesting that TGT spin off it's real estate holdings into a TIPS REIT. I highly recommend this to those of you who are into bonds and real estate financing.
I'd love to get some feedback on it.
Webcast Event
Corey - not to be rude, but the kind of rip-off thinking you exhibited up-thread is the kind of thinking that got us into this mess in the first place. Trying to make an easy killing at someone else's expense (in this case, your state - meaning, your people). Put your imagination to better use. Unless, of course, it was all a joke
Modern American "Republicans" -- Privatize public funds, socialize private losses, flee country with Ayn Rand novel under one arm, money bag under other.
And whine about how Clinton made them do it.
Need to settle a bet real fast -- How long did it take for the US to reach it's first 1 trillion in debt? What year I mean. Anybody?
Essentially, they are suggesting that TGT spin off it's real estate holdings into a TIPS REIT. I highly recommend this to those of you who are into bonds and real estate financing.
I have a question. Where is the wealth creation? I play poker on the weekends. A lot of money changes hands for sure. But no wealth is created.
After fees, the long term end users (the pensioneers and investors) will have less value and likely more debt.
snake-eyes writes:
Corey - not to be rude, but the kind of rip-off thinking you exhibited up-thread is the kind of thinking that got us into this mess in the first place. Trying to make an easy killing at someone else's expense (in this case, your state - meaning, your people). Put your imagination to better use. Unless, of course, it was all a joke
Well, you obviously won't want to hear my ideas about issuing Bottle-Backed Securities.
PeakVT writes:
And whine about how Clinton made them do it.
Yeah, I forgot the part where you have to get up on your high horse to express "moral outrage" at being positively forced to rip off the American people to your private betterment and then flee the payee pool when the liability comes due during the next president's term.
Corey - You are crackin' me up
Well, you obviously won't want to hear my ideas about issuing Bottle-Backed Securities.
Corey
LOL!!!!
Corey writes:
Well, you obviously won't want to hear my ideas about issuing Bottle-Backed Securities.
You, my friend, have potential but think small. You need to get in touch with Hoopajoop LTD. =)
I'm far from expert on either bonds or reits. Ackman seemed to argue that there were significant tax savings that would result from the structure. There were other points made, including freeing up cash flow and funding new land acquisitions through the reit. One point that struck me was utilizing reit "shares" {probably not the right term} to purchase underlying real estate.
I'm sorry, I haven't absorbed it all myself do not have a reit background at all.
I promise I will youtube or edit & post this wonderful ripping Peter Schiff's client is giving him on his radio show. Guy invested 1-1.5 million and is down over 50%! He's furious!
Stripped Treasuries:
The interested in automatically rolled over into the bond.
The coupon is "stripped"
These bottle-backed securities definitely need a ForEx bet, a tranche structure, and a yield-enhancing bet on the commodities futures markets related to the mfg of the bottles. Perhaps you can also work in some kind of derivative trade based on auction-set pool positions related to the brand composition of the underlying haul, or maybe that's just a secondary market.
Heck, why not do both -- establish the market and buy positions in it yourself.
You really need to talk to the Hoopajoop people to get ready for your Wall Street debut.
So WF, our "Best Bank" needs to TARP us for $25B to eat WC. Oh and we get to eat all of WC's expensive shite...and WF's expensive heloc shite. We should be honored.
Expensive food is better than squirrel.
Expensive cars are better than Yugos.
Expensive houses...erm...well anywho...
So eating the expensive shite of those banks should be quite the meal.
I'm so happy about this, I'm going to go bash my head through a wall now. BRB.
Nostrovia,
Angry Saver writes:
"'Essentially, they are suggesting that TGT spin off it's real estate holdings into a TIPS REIT. I highly recommend this to those of you who are into bonds and real estate financing.'
I have a question. Where is the wealth creation? I play poker on the weekends. A lot of money changes hands for sure. But no wealth is created."
Theoretically, it could add value, if pension funds (for example) wanted to buy inflation-linked debt to hedge liabilities. For TGT, their cost of funds may be lower, and they would partially hedge deflation risk. At the same time, the pension fund will reduce its risk versus inflation-indexed liabilities.
But in the real world, nobody appears to want to buy TIPS right now, or real estate debt. Put those two factors together, it would be a disaster if it was tried now.
BR,
But remember, because it happens after the election, it will be SOCIALISM, and a reason to FLEE THE COUNTRY
The smart people already left - Jimmy Rodgers, Ken Dart, Orlin Grabbe, etc -
Sure, you can leave but you're gonna have to pay a whopper penalty to get your money out. Congress passed that in the mid-90s in anticipation of just such a thought in your mind.
Debt exponential explosion:
$1T 1980 Carter
$2T 1986 Reagan
$4T 1992 Bush Sr.
$8T 2004 Bush
you know the rest.
But remember, because it happens after the election, it will be SOCIALISM, and a reason to FLEE THE COUNTRY, and totally unrelated to the crony capitalism that's getting us into the obligations right now.
Modern American "Republicans" -- Privatize public funds, socialize private losses, flee country with Ayn Rand novel under one arm, money bag under other.
AMEN...
Angry Saver,
Copied from pg 33 of this slide presentation which was part of the webcast:
http://www.visualwebcaster.com/imageslides/52870/October%2029%202008%20Presentation%20vFINAL%20(3).pdf
Transaction Rationale
Sorry, BR and Dawg but I don't see this deal as monetary situation anymore. It's now a gunpowder issue and unless you and perhaps 5 or 10 million other people are actually willing to draw down and KILL people for money...
then your best bet is to bet on the house to win.
The real issue is that Greenspan / Bernnake might have altered the k-wave a bit but there's considerable cultural damage being done.
Not to mention the dollar, which I consider to be somewhat of an extension of culture.
opps - apparently that was too long - it got cut off - sorry.
Byz - Yer F*ckin' nuts! The humor here is superlative!
Corey,
Well I've got a large jar of change that I can use as tier one capital.
So I'll open a bottelline insurance company that is also a bank holding company, so I can access the fed. I'll use squirrel pelts, bits of bark, and small stones as tier 3. The model, will of course price them accurately.
I'm working on tier two. I could then insure your bottle backed securities with quality insurance, allowing you to get a AAA rating.
Nostrovia,
bond guy writes:
Theoretically, it could add value, if pension funds (for example) wanted to buy inflation-linked debt to hedge liabilities. For TGT, their cost of funds may be lower, and they would partially hedge deflation risk. At the same time, the pension fund will reduce its risk versus inflation-indexed liabilities.
But in the real world, nobody appears to want to buy TIPS right now, or real estate debt.
Each of those points is addressed in the webcast. There is no plan to "sell" TIPS at this point - although it's held out as a later possibility. There is no plan to sell real estate debt. TGT owns 85-95% of their land and buildings - that would be transfered to the REIT in the spin off.
Comrade Misean - BRAVO!
Debt exponential explosion:
$1T 1980 Carter
$2T 1986 Reagan
$4T 1992 Bush Sr.
$8T 2004 Bush
you know the rest.
Government spending is the engine of our eCONomy. Is it any wonder cronyism is so profitible.
Economic news:
Worked with one of America's great scams today; an inventor exploitation company that has an FTC-mandated affirmative consent in their contract packet that states that of their 6,500+ clients over 3 years, 16 concluded licenses and 5 concluded agreements that made them more money than the five-figure fees the inventor exploitation company charges.
By all accounts, a license to print money.
Informal interviews with multiple office staff indicate business is stone dead. They laid someone off while I was there.
The born and bred American dope is tapped out.
Broward Horne writes:
Sorry, BR and Dawg but I don't see this deal as monetary situation anymore. It's now a gunpowder issue and unless you and perhaps 5 or 10 million other people are actually willing to draw down and KILL people for money...
Money no, but servitude? Don't push me.
And truly, it isn't me you need to worry about. The infrastructure of this country is very soft. Two punks with skil-saws could snarl all of Los Angeles for a day dropping a few over freeway signs. A pickup and chains to take down cel towers. Angry disenfranchised urbanites are the worry.
corey, you might want to target business's, business parks etc..setup collection places, then pay them .4 bcse you save them time and only move price higher if competition rears its ugly head....
If all else fails change tactic and sell direct mail...
Popeye,
Even if the deal saves taxes for TGT investors, someone else will have to pick up the tab.
Again, I see no wealth creation, defined as increased output of goods or improved means of production. The deal is just a repackaging. Financial ledgerdemain.
These deals increase leverage in the system and divert more and more real savings to interest (rent on production and output).
Is it any wonder the majority are getting poorer?
Good for the bankers though.
angry saver:Government spending is the engine of our eCONomy. Is it any wonder cronyism is so profitible.
but debt is money.
Right up to when debt aint money.
I welcome the crossing of the rubicon.
disclaimer: long quality tranche of bottle backed securities (but only the swapped derivative)
And truly, it isn't me you need to worry about. The infrastructure of this country is very soft. Two punks with skil-saws could snarl all of Los Angeles for a day dropping a few over freeway signs. A pickup and chains to take down cel towers. Angry disenfranchised urbanites are the worry.
Rob Dawg | Homepage | 10.29.08 - 9:10 pm | #
Good thing the army has been rotating through Iraq these past six years - they might have learned how to keep the power on to most of us most of the time. Fallujah on the Pacific.
Treasury Secretary Henry Paulson has predictably screwed the taxpayer by
making a sweetheart deal with Wells Fargo in the TARP stock purchase.
The taxpayer gives: $25B
The taxpayer gets:
(110.261688 Mshares * $34.01/share= 3.75B, or 15.00% of the 25B)
My opinion:
This is an incredibly lousy deal. Only 15% warrants, and at today's
inflated price.
Expect WFC to drop like a rock now that the deal is done. WFC reduced
their loss reserves in Q3 in order to prop up earnings and therefore
stock price until the deal was done.
The current administration is the equivalent of GM's management. The House of Reps is the equivalent of an automotive union. We, the people, are the factory and line people. America is going to be one big Michigan soon and I never liked eating bunnies.
Bond Guy - or anyone else,
If TGT were to spin off land only into a TIPS REIT, it is projected that it could lower their bond rating from A+/A2 to an expected rating of either Mid-High BBB/Baa .... or .... A-/A3 for a two year period.
Can someone offer me some insight into how serious that is ?
a billion here...a billion there...
Broward Horne writes:
Sorry, BR and Dawg but I don't see this deal as monetary situation anymore. It's now a gunpowder issue and unless you and perhaps 5 or 10 million other people are actually willing to draw down and KILL people for money...
It depends on the parameters of "kill" -- you mean like now, tonight? No, this Republic has seen too much random unlawful stuff.
If we actually get the political will to do it as part of a formal policy, or even as part of a government-sanctioned "informal" militant group? Absolutely.
If it's not just random violence but the will of the Republic that the wealth robbed from the Treasury be reclaimed and the thieves punished, you just give me a call. I would prefer to mainly twist the criminals out for their money and then drive them into exile but if some of the people currently robbing my Republic need stretchin', I'm down.
o to worry popeye,
target is TBTF.
unless it isnt. buy your shit at McWalMartGreens.
I think I'll hedge my bottleline insurance firm with a variety of CBO's (Collateralized Bottle Obligations).
Obviously CCBO's, CBBO's, and CMBO's would be prime. (Where C=Coors, B=Budweiser, and M=Miller).
Riskier ones would be CJBO's and CSmBO's (J= Jack Daniels, Sm=Smirnoff).
I think I can lever this thing 40x1 so, I'm certain to be a good bet when I issue my IPO.
Nostrovia,
I'm not at all worried. At this point I think the Pershing Square plan works.
Angry Saver,
"Again, I see no wealth creation, defined as increased output of goods or improved means of production."
There isn't any. It's reshuffling the deck chairs on the Titanic.
Nostrovia,
Good thing the army has been rotating through Iraq these past six years - they might have learned how to keep the power on to most of us most of the time. Fallujah on the Pacific.
Iraq is the size of AZ and largely undeveloped. Cities eat up military formations at a stupendous rate. You could drop the US Army into the US continental expanse and they would do nothing but hasten substate fragmentation by destroying the economy.
Just thinking - I wonder if Alan G is all nostalgic tonight... with the FFR back to one percentish and all. He and Andrea by the fire... wine in hand listening to old favorites & reminiscing. Ah - it was a very good year...
Ok, I don't agree, but that's what makes a market.
It's worth your time to at least look at the slide presentation:
http://www.visualwebcaster.com/imageslides/52870/October%2029%202008%20Presentation%20vFINAL%20(3).pdf
what time is the GDP figure being released ?
I am sure that will be shocker on the downside (if not doctored)
seen it popeye.
multi-layered leasebacks..make sure the REIT dont go Enron on ya.
It's better if you don't think of it as wealth confiscation. Uncle Sam isn't taking your principal. He's just slicing off a little of the interest.
He's your partner. He's managing the economy, he's managing your fund, it's really just an administration fee. Until... well, yeah, 2038 or so.
I'm long Bernanke Futures!
Correction:
Sorry, about 25% larger than AZ. 60% of the size of TX.
@nova
"The current administration is the equivalent of GM's management."
Hey, GM management is pretty bad, but that is just harsh.
cracker,
that's a legit point.
"what time is the GDP figure being released ?"
The initial release, or the adjusted, correct value?
Dawg - you pose some interesting ideas, but who do you think is going to make you do anything? For what purpose? I just can't see it. Sure, there might be nut-cases out there willing to do something stupid. There always are. But most people will be cool, I think. It's a crisis. Not a time to panic. Bad apples will be dealt with in short order, most likely by people like yourself. Be a voice of reason. Never underestimate the average American, although I know it seems stupid to say it. Most people just want peace and quiet.
Zeituni Onyango, the aunt so affectionately described in Mr Obamas best-selling memoir Dreams from My Father, lives in a disabled-access flat on a rundown public housing estate in South Boston. Found in a rundown Boston estate: Barack Obama’s aunt Zeituni Onyango - Times Online
Iraq is the size of AZ and largely undeveloped. Cities eat up military formations at a stupendous rate. You could drop the US Army into the US continental expanse and they would do nothing but hasten substate fragmentation by destroying the economy.
Byzantine_Ruins | Homepage | 10.29.08 - 9:28 pm | #
Sure. Whatever. But could they keep the power lines up and the lights on?
[that would be the question our provincial governors would ask - before taking the afternoon off for the games and then a short orgy]
O'Bama just won the election. Give it up people. Get used to it.
"O'Bama just won the election. Give it up people. Get used to it."
It ain't over until the Oprah, Rosie duet.
dryfly,
Perhaps listening to what some website lists as the top hit for 2004,
The Reason, Hoobastank
Top 100 Hits of 2004/Top 100 Songs of 2004
YouTube - Hoobastank - The Reason
Nostrovia,
I'm long Bernanke Futures!
Broward Horne | Homepage | 10.29.08 - 9:31 pm | #
And Paulsen Bonds...
We won't need any taxes - abolish the IRS - give Goldman Sacks the allocation & franchise. Privatization works!!
the inital doctored GDP number
popeye:
I'll simplify
1. Jack the rent up.
2. dump the bad credit card debt on some idiot bagholder.
3. patch the roofs.
4. toggle debt and planned infaltionary rent on the REIT while maintaing margin on store sales.
5. wonder why nobody shopped at Target.
I see a flaw, how does UBS abscond with the "gravy"?
"if some of the people currently robbing my Republic need stretchin', I'm down."
I think people will read Dickens, and conclude that the Guillotine is the most suitable instrument for dealing with banksters. The word "tumbrel" will be especially popular, as will pithy phrases like, "no more bonuses for you, Mr. head-in-a-bucket!"
Homeland security monitoring disclaimer: the author does not encourage anyone to place a banker in a Guillotine in real life. Should citizens try this, and should a functioning judicial system be jailing bankers by the tumbrel-load, then he will intervene to have them transferred to the judicial system.
Oct 30\t8:30 AM\tGDP-Adv.\tQ3\t-\t+0.3%\t-0.5%\t2.8%
Ha Plantagenet ,
What is ur prognosis for the GDP number
and the stock market behaviour after that
ova writes: America is going to be one big Michigan soon.
....
In a Michigan winter too. My firewood guy says business is great. Tossed in some complementary cashew brittle with my order. Maybe chainsaws have investment potential.
When did TARP become the recapitalization plan? I thought TARP was supposed to purchase "illiquid" assets.
Am I getting my Fed vehicles mixed up, or are we witnessing some Orwellian word magic?
"When did TARP become the recapitalization plan?"
When the rest of the worlds central banks did not want to play ball.
Ill tell ya right now, that GDP number is false.
US transports and related services are looking at 20% off 2002 numbers..
uhhh...GDP aint positive, you cant lie out of this one.
This is real, its global, and its underestimated in its destruction of money as it relates to the current paper regime.
The liklehood of the US military being able to keep the lights on in So Cal is about as promosing as GM making a car that sells over 50,000 units next year
"What is ur prognosis for the GDP number and the stock market behaviour after that?"
The usual means for faking GDP growth is to understate the deflator (i.e., inflation). With oil down, that will be especially easy to do. Perhaps also they will include the TARP in GDP (gotta count all that investment too). They are known to cook the books politically, and now is the time.
I think the market it liquidity-driven. The GDP will be forgotten within the hour, whatever it says.
Thanks Cracker. I too thought that a positive GDP number is out of questio
Corey,
Ah, now this evening's press release from AIG describing their new bottle-deposit-backed securities insurance makes more sense.
IMHO TARP is a typo. It was originally TRAP.
Totally Raping American People.
TPTB decided that was a bit blunt and changed course on the marketing angle.
Not on the actual policy angle.
Nostrovia,
Participation in TARP requires caps on executive pay and elimination of dividends. If this is "TARP" then why are we worreid about Wells Fargo bonuses and dividends.
Obviously Treasury is making an end run around the Congressional oversight promised in the Economic Stabilization legislation.
Crisis of confidence continues to grow.
The Blinding 90's America Awards
Notable American Culinary acheivement goes to: Cheesecake Factory
The Notable American Music Award goes to: Brittany Spears
The Notable American Car Design goes to: Hummer
"I think the market it liquidity-driven. The GDP will be forgotten within the hour, whatever it says."
No one believes the Fed anymore anyway. It is unlikely the Fed would be able to convince anyone that we were in a recession. The numbers have been kind of funny for a while as they try to correct a recession in "confidence."
As Grahm said, ~bunch of whiners, it's all in your head.~
We are all going to be third world white people except those of us who are not.
US military's without peer at blowing stuff and people up from a safe distance. keeping the peace or the lights on? eh, no.
since Im gonna rant tonight, I'll share what I consider the enterprise value of Wal-Mart.
its Ole Roy dogfood.
thats the only thing I have purchased from WalMart for the last 6 years.
glad might be an interesting instrument to watch if Obama gets elected. Uncertainty seems to make glad attractive...
bearly
Re: Certainty. This reminds me of a post that Steve Randy Waldman made on his blog that Tanta linked to a while back:
Too Much Risk?
Interfluidity :: Too much risk?
Investors' childlike demand for safety has made the financial world terribly risky. As we rebuild our broken financial system, we must not pretend that risk can be regulated or innovated away. We must demand that investors choose risks and bear consequences. We need more, and more creative, risk-taking, not false promises of safety that taxpayers will inevitably be called upon to keep.
There is a systemic and cultural demand for the sure thing, and the sure thing at all times. This has permeated virtually every level in society- global society. Absolute safety and predictability, always. Oh, and on the inflation front-I'm increasingly beginning to agree with AllenM. We might see real deflation for a quarter, but similar to flooring an old V8 with an 850 Holley double-pumper, sometimes the acceleration has a considerable hesitation before it takes hold.
Stand up, be independent, don't let your moron brother-in-law tell you what you think.
I wrote you a big response, dryfly, but haloscan f'in ate it.
In short form, it won't be an issue while there's a functioning central state. People will talk about it but while the mechanism of the state remains intact it won't happen, and if it does, it'll be quickly wrapped up.
Once there isn't a functioning central state, all bets are off. It will be a sudden tipping point, not a gradual grind.
What I thought was a free lunch turned out to be a shit sandwich!
The more you think about the situation, the more absurd it becomes. The government picks your pocket and hands the cash over to the bankers and then they hoard it. Don't ya know? It's a bad time to make loans. Consumers are losing their jobs and having their pockets picked by the government. We'd better hoard our capital. Oops, just lost 20 billion on a bad swaps bet. Uncle Sam better go get me some more money or this sucker could go down.
Too Big To Fail is quickly morphing into Too Big To Not Fail.
Cracker,
You really do need a more diverse diet than that, but I am impressed that you have made it 6 years.
thanks yancy. the kids love it. The bitched until I started giving it to them with dish water.
cracker writes:
since Im gonna rant tonight, I'll share what I consider the enterprise value of Wal-Mart.
its Ole Roy dogfood.
thats the only thing I have purchased from WalMart for the last 6 years.
I've heard hot sauce makes it taste better. Is that true. I mean 6 years of buying it - it can't be all that bad right...
cracker writes:
seen it popeye.
multi-layered leasebacks..make sure the REIT dont go Enron on ya.
cracker | 10.29.08 - 9:31 pm | #
Amen. I read some of that presentation... then had one of those epiphanies... its useless wasted non-value added activities like that that are killing America. Worse than taxes & bureaucrats and terra-ists.
Think of the resources going into supporting those yahoos - they are parasites.
We've leaned up the factory & distribution & store floors and bloated the offices with nonsense like that.
I mean what the hell does it do for me - the Target shopper? How does it increase productivity or improve profitability? Really?
Does it make the toothpaste better or the red in the red dot redder?
It's a paper invention that increases shareholder value? Huh - say what?
That's why we need a tax revolution - it isn't the do gooder lefties who are the threat - its the accountants & bankers & lawyers.
Rob Dawg
Your numbers are wrong...Reaganites believe in smaller government not bigger!!
BR,
The formerly Great State of California is far closer to a tipping point than many suspect. Having "dealt" with the deficit last month a new $11b and growing deficit. And that's before updating the missing tax revenue I mentioned upthread. Da Governator told a group of educator representatives to prepare for $2-$4 billion in immediate cuts. They said no as if they have a choice.
"US military's without peer at blowing stuff and people up from a safe distance."
I am reading General Boykin's new book. I won't comment on the controversial evangelical issues, however, the book describes in great detail the Delta force, in which US special forces undertake enormous risks, at point blank range.
My latest-read chapter described the rescue of Kurt Muse from Modelo Prison in Panama City. There a Delta force soldier dropped from a wire in the ceiling and hung suspended in front of Muse's cell, exchanging small arms fire with the prison guards. A 24-hour watch had been posted to shoot Muse in the event of a rescue attempt, and was thus thwarted.
I agree that the US is nonpareil at remote demolition, but that's not the whole story.
Plantagenet:
I think people will read Dickens, and conclude that the Guillotine is the most suitable instrument for dealing with banksters. The word "tumbrel" will be especially popular, as will pithy phrases like, "no more bonuses for you, Mr. head-in-a-bucket!"
Coincidentally, my red phrygian cap came in the mail today. =)
"will they lend it?"
Funny but in todays mail I received a pre-approved $500,000 line of credit from Wells on a smallish S Corp real estate that we've owned since '86.
The bloody shylocks want a point up front and (i'm guessing) a floating rate at 3 or 4 over prime.
Yea, they will loan me my tax money with plenty of Vig...........Screw em.
dryfly,
Im an accountant and my own banker, insurance agent, investment advisor, and a High School Principal with a small transportation services and retail leaseback operation...
I'm also a real estate broker.
I see value in the collateralized bottle bonds......lets issue them on the Hang Seng, or TOPIX.
as Loena Helmsly said, "Taxes are for little people".
voting my conscience, writing in Ron Paul, voting against all incumbents.
no, I'll never be Mayor.
Oh, and on the inflation front-I'm increasingly beginning to agree with AllenM. We might see real deflation for a quarter, but similar to flooring an old V8 with an 850 Holley double-pumper, sometimes the acceleration has a considerable hesitation before it takes hold.
Doc at the Radar Station | 10.29.08 - 9:55 pm | #
I tend to agree w/ AllenM too BUT we might experience deflationary pressure much longer & more intense than anything we've seen in our lifetimes... that lag before the fiat floods fully kicks in could take a while - and you know while they are waiting those the knuckleheads at the fed & congress will be pumping the gas peddle for all its worth until...
VaaaaaROOOOM!!! Off it goes.
Good thing inflation is easy to wip... just ask Volcker. Piece of cake... just like what Ben said about beating 'deflation'.
What's to worry about?
i always wanted a red smurf cap =)
Coincidentally, my red phrygian cap came in the mail today. - Byzantine_Ruins
Check this out:
http://www.diggerhistory.info/images/posters2/wake-up-america.jpg
"my red phrygian cap came in the mail today"
As a native Virginian, I hold out hope that Virginia will lead the rebirth of the US, after its Fascist nightmare. The state seal will become the national seal.
Not only have we the phrygian cap on the reverse, but on the obverse Tyranny lies prostrate beneath the foot of Virtus. That is my dream.
Fundamentals have nothing to do with market prices. Markets make fundamentals.
Indeed spring started on Wallstreet as described in post below.
"
Spring on Wall Street
MarketWarnings: Spring On the Right side of Wall Street (Fall and Blood on the other)
I MAY HAVE MISSED IT, BUT DO ANY OF THE PREFERRED SHARES ISSUED HAVE VOTING RIGHTS?
ljs - NOT AS OF YET
Rob Dawg writes:
The formerly Great State of California is far closer to a tipping point than many suspect. Having "dealt" with the deficit last month a new $11b and growing deficit.
God I'm glad I don't live there.
It's about the feds, though. They will either bail out your state or send troops to quell any uprisings.
When they can't afford to do either, or when they try but their efforts are widely seen as unable to match the scope of the crisis on an ongoing basis, that's when the shit'll start to really hit the fan.
It'll take a McCain victory or Federal inability to fund the budget or something similar for people to really give up the ship. New Orleans got everyone ready and willing to accept the concept, and they haven't re-established trust yet.
The Mandate of Heaven is the ultimate irrational exuberance -- it remains LONG after there's no reason to believe in it, but once it is gone, it is as hard to recapture as it was to rupture.
69% debt/gdp ratio at start of 2008. Will be 83-84% by the end of 2008.
Hank himself asked, and got, debt ceiling raised to 11.3 trillion.
11.3 trillion of debt/ 14 trillion economy (if we are lucky and it remains static)= 80.7% and this will be reached in December, almost surely.
Hank will ask for a raise in the national debt limit by the middle of November...watch for it.
69% to 84% in one year...can anyone spell incompetent???
Fighting the good fighting with fiscal enslavement in the future...
Why don't we ask the average Joe in Argentina how he feels about what they have had to go through?
TARP rescue for Exxon, details in one hour!
FDIC is going to modify principle balance for selected loans.Well I've got news for the government.Instead of a million man march on washington,prepare for a 50 million man march on washington.Revolt!
Treasury officials may expand the government's financial rescue plan (TARP) to include non-publicly-traded banks, potentially opening up the program to thousands of new institutions. About 6,000 privately-held financial institutions aren't eligible under the current rules.
Rumors are swirling that oil companies will be next in line for TARP.
So I talked to the trees, those truffula trees, all my life I'd ben searching for trees such as these.
They told me some tree-truths, which I must relay at urgence forsooth. I hear we are near to further reproof.
They said that big trees always abound, but big trees are not a forest unbound.
A forest must always hold dear
How tall trees come down and the
Way that the big timber falls
Because saplings need their chance with no shade, and light and shadow give their grade.
After reading this thread, I am certainly glad that none of our fine military families were victimized by relitters or mortgage brokers looking for a fat commission. The bankers were really clever about protecting them.
Oh wait...
Screw it, I can't wait an hour, who has time for this shit?
Exxon to be bailed out with TARP:
Treasury officials may expand the government's financial rescue plan (TARP) to include non-publicly-traded banks, potentially opening up the program to thousands of new institutions. Such a move may also placate the powerful community-banking industry, an outspoken critic of TARP, due to its fears bigger rivals will use the government's largesse to sweep up healthy firms that are too small to fight back. About 6,000 privately-held financial institutions aren't eligible under the current rules.
i can haz tarp?
i splain
iz gloomy out there
auction pro - I admire your enthusiasm, but lemme tell ya, nobody's goin' anywhere
Where is MY TARP.Pure government givaway.Bush raiding treasurey this stuff will end up in a very bad way.That is putting it mildly.
Oh yeah, imagine the GM autoworker National Guardsman coming home from his third stop loss front line tour to a RIF and NOD. Then he gets called up again this time by the governor to quell unrest of his fellow line workers. Think of the scene in Braveheart where the king sends in the Irish to battle the Scots.
USA no longer Nationalizes, we TARP it and call it good.
TARP
Tax treatment of certain income received in connection with the Exxon Valdez litigation: The bill allows qualified taxpayers who receive qualified settlement income to use 3-year income averaging and contribute a maximum of $100,000 to their retirement plan.
auction pro - Where you been? You don't Get a TARP. You PROVIDE the TARP
TARP = LOCKBOX..
do it Al Gore style...
Rob Dawg writes:
Oh yeah, imagine the GM autoworker National Guardsman coming home from his third stop loss front line tour to a RIF and NOD. Then he gets called up again this time by the governor to quell unrest of his fellow line workers.
Except it'll be a cop shooting you and he'll do it 'cause he's a cop. The soldiers will really be secondary to any fireworks because they are just as unreliable as you suspect. It'll be the right-wing paramilitaries that were formerly your police force that do all the killing and the "disappearing".
tarp
i haz it
i needz it, qwick
obama make it rai
I do not get this bill. I am a poor crop farmer in America due to circumstances beyon my control, but I do not understand your laws, so can some amigo here help me tonight?
I am looking here:
http://www.house.gov/jct/x-78-08.pdf
ESTIMATED BUDGET EFFECTS OF THE TAX PROVISIONS CONTAINED IN
AN AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 1424,
SCHEDULED FOR CONSIDERATION ON THE SENATE FLOOR ON OCTOBER 1, 2008
There are many confusing things which my family and I do not understand, which may be related to the fact that we do not speak the language of the lawyers, but what is, "Special depreciation allowance for qualified
disaster property ("bonus depreciation"), Extend and modify the tax credit for R&E
expenses, Extension of alternative minimum tax relief for
nonrefundable personal credits and increased
AMT exemption and Allow ordinary treatment for gain or loss from sale
or exchange of certain preferred stock??
I do not understand?
VaaaaaROOOOM!!! Off it goes.
Good thing inflation is easy to wip... just ask Volcker. Piece of cake... just like what Ben said about beating 'deflation'.
What's to worry about?
Well, I've got some tiny tadpoles of concern about the treasuries that are supposed to blow up soon and send interest rates skyrocketing. Well, if that happens... then the deflationists would have a better argument in that case. AllenM argues that will happen as well (no more dollar hegemony). But, if it does, that would be like a massive involuntary interest rate hike. The Fed would have lost the rabbit and deflation would then take over. OK, guess I'm not totally convinced that inflation wins just yet
Can I haz negative GDP tommorow?
A jittery market...
TRADING DAY: Wednesday's markets
... But the big news Wednesday was a wild swing in U.S. markets in the dying minutes of trading that followed an erroneous report about General Electric on the Dow Jones newswire. With 13 minutes left to go in the session, Dow Jones issued a bulletin headlined: "GE CEO: Want To Keep 2009 Profit Same As 2008." Four minutes later, the stock began plunging, falling from $19.95 to $18.70 US at the close, slicing six per cent, or $12.4 billion US, from the company's market capitalization - the sudden nosedive of the third-largest U.S. corporation sent the Dow Jones Industrial Average plummeting 372 points, erasing $120 billion US in market value in eight minutes.
Dow Jones issued a correction after the close, but the damage was done: A near 300-point rally turned into a drop of 74.16, or 0.8 per cent, with the Dow ending the day at 8,990.96. The S&P 500 closed down 10.42, or 1.1 per cent, at 930.09 after paring nearly four per cent in the final eight minutes, a haircut of $300 billion US. The Nasdaq composite trimmed 7.7, or 0.4 per cent, to 1,647.20. ...
i splain
you pay me
i can haz your son too?
Because the FOMC did not cut more than 50 bps, I am wondering if the GDP figure will not be all that horrific. I know it is expected to be only slightly negative, with the next quarter being of more concern, but.... Either that or the Fed knows that it is only the special facilities that mean anything right now.
To calm myself I have to go back to the old saying that IF IT IS TO GOOD TO BE TRUE THEN IT USUALLY IS.Big government givaway will not last without serious,serious,repercussions!
Bond Girl,
"Either that or the Fed knows that it is only the special facilities that mean anything right now."
They don't call it pushing on a string for nothing.
Deflation cometh...ERISA commeth. These gov't asshats are out to lunch.
Nostrovia,
you can haz repercussions
plz to forgive
Bond Girl writes:
Either that or the Fed knows that it is only the special facilities that mean anything right now.
The Fed is having a puppet show and calling it an economy, yes.
Big Oil Company sez:
i can haz your son too?
I will gladly give you my son on Tuesday for a night with your daughter today!
(Reuters)prn;
Tarp to cover big-3..starts new program
Certified Orginal Fed-Funds Industrial Notes
1st up: Valdez ruling pains many in Cordova, Alaska
Valdez ruling pains many in Cordova, Alaska -- latimes.com
... the Supreme Court's ruling Wednesday that sliced the punitive damages the hard-hit fishing villages could expect from the 1989 Exxon Valdez spill was received here as insult added to injury.
Before the justices' decision, the average payment to the 33,000 plaintiffs was expected to be $76,500. Now it's about $15,000.
Many Alaskans had given up on receiving any compensation. Some had held out slim hopes that it could help them retire or stave off bankruptcy. But it would never be enough to make up for the damaged lives, said Derek Blake, a fisherman in Cordova.
"Seventy-five thousand a person -- if you want to talk about first-year losses, it was that times 10," said Blake, 25. His father, Kory, had to sell his house to pay off debts after the spill.
"For 15 years it ruined my life," Kory Blake said by cellphone from the boat where he and his son were fishing Wednesday.
See TARP: Income averaging for amounts received in connection with the Exxon Valdez litigation
The bailout bill would give a tax break to Exxon Valdez plaintiffs, allowing them to average out their punitive damages awards over three years rather than suffer a one-time tax hit from the Internal Revenue Service, as well as other provisions.
I am thinking -.50 GDP...they know its bad, but they can do nothing about it...ZIRP here we come
crispy,
"I am thinking -.50 GDP...they know its bad, but they can do nothing about it...ZIRP here we come"
In real terms we're below ZIRP.
Just saying.
Nostrovia,
true...true...
And the band plays on; CNN.com front page headline stack:
Latest News
Exxon sells 300,000,000 boo to TARP ap at $147.99/pb...which gives the oil giant 16T dollars of working money to pay off land hold leases and production crews 'til 2056. Hanky says its a good deal to secure US supply of oil...
BR, The Fed is having a puppet show and calling it an economy, yes
Hey, I told you before!
It's Weekend At Bernanke's.
Ben and Hank haul out the dead economy, put a hat on it and convince the party-goers to keep dancing.
This would be an excellent ClayMation movie.
From Poster "Sonny" at Clusterstock.com:
Harley-Davidson Financial Unit Taps Fed Commercial "Paper Program"
(story behind a pay wall unfortunately)
A guy that has nailed this whole sorry episode thinks the new residential bailout is going to incent even more mortgage walkaways.
But when Hogs (bikes) become more important than our kids' future, I know the end is near. Pushing all my chips into the short pot tomorrow.
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Cats vote in 'kitty caucus'
Daly passes out at Hooters
Five pirate attacks repelled in a single day
I am thinking -.50 GDP...they know its bad, but they can do nothing about it...ZIRP here we come
crispy&cole
Will be -0.3 - dont be so negative!
Ozark hillbillies unite!You call we haul!WEEEHAWWW!!!
i wuz gonna be pirate for halloween
den i got dis tarp
obama can haz prezdancy
"We have used (the Fed facility) as one of our CP sources," Harley-Davidson spokesman Bob Klein said Wednesday in a phone interview. "Its an additional source of diversification," he added, noting that traditional commercial paper sources remain available to the financing unit.
wo weeks ago, when Harley-Davidson announced a 37% decline in third-quarter earnings, Chief Financial Officer Tom Bergmann said the company expected to be eligible for the Fed program. That, Bergmann said, gave the company confidence that its financial services unit would have continued access to the commercial paper market, an important source of funding for the day-to-day needs of companies.
The Commercial Paper Funding Facility gives companies a chance to borrow directly from the Fed at a time when investors generally arent interested in paper with maturities beyond a few days or weeks. A wide range of companies - from General Electric Co. (GE) to Morgan Stanley (MS) to International Business Machines Corp. (IBM) - have participated or expressed interest in the Feds program.
Harley-Davidson has said it hopes to access the unsecured debt market in the fourth quarter to raise up to $500 million for the financial services unit. HDFS, as the unit is known, has a $400 million debt payment due in December.
Deflation cometh...
Monty Python-The Meaning of Life-Death
YouTube - Monty Python-The Meaning of Life-Death
Citizen Clyde | 10.29.08 - 11:04 pm | #
F'ing awfull!!
NyTimes...just posted that NY leads all states in first-time unemployment numbers...layoffs spreading from Wall St. to publishing, law firms, tourism, Amex, etc.
Layoffs Sweep From Wall St. Across Region - NY Times
I think taxpayers should invest in hogs and cocaine and beer, dope, tattoo parlors, whore houses, needles, guns, ammo, porno, whatever it takes to put America back on the road to being a better casino!
Harley - livin' on borrowed time, unless the Chinese like Hogs
douglas county oregon published 8.4% unemployment, only the largest county in oregon by land mass.
As a taxpayer biker, I'm proud to let my long freak flag hair blow in the wind and to thus feel taxpayer revenue beneath my ass, as I ride high as a kite towards the next bar!
The election, the American dream and housing policy - MarketWatch
HOGs at the trough pushing the pigmen aside.
I'm gonna be The Joker for Halloween. I got the laugh down, the hand motions, and the voice.
Do I look like a man with a plan?
Nostrovia,
I hope you non-Hog-riding pussies who don't have taxpayer subsidized bikes are pissed, cause I hope to ride away with your daughters and loot your town on my taxpayer backed cycle from hell.
The HUD mission
Jackson believes promoting homeownership should remain one of HUD's primary missions and would urge the next president to back such a policy.
cant have a slave without hope, and a large mortgage.
The USD is on tear:
http://www.netdania.com/Products/FinanceChart21/FinanceChart-2-1.asp?symbol=EURUSD|netdania_fxa&name=EUR/USD
OK, guess I'm not totally convinced that inflation wins just yet
Doc at the Radar Station | 10.29.08 - 10:49 pm | #
If TARP, TAF and all the rest haven't convinced you they intend to 'print baby print' - to steal a theme from our would be VPILF - then you're kinda like the dinosaur going 'ohhhh ahhhhh' as the asteroid streaks across the sky.
I don't know how soon the inflation will kick in nor do I know if it will be bad like in the 70s or colossally Austrian-blow-off-Wiemar-like bad... but there is nothing holding them back from it getting some kind of bad... and the longer the lag between the pedal pushing down & the eventual vaaaaRROOOOMM... the worse it will get.
Jimmy D- YOU are living on borrowed time, my friend
Screw homeownership, all The Harley-Davidson Pussies have Socialized bikes now with TARP and America is like a beer ready to be drained! Bring on more cash for Harley-Davidson you dumb fucking tax payers!
RE writes:
The USD is on tear
unless its against the mighty, Hungarian Forint... get a f-ckin grip.
Uncle Sam is cuttin his nephew bucky loose.
Harley-Davidson you dumb fucking tax payers!
Anonymous
So the next time you see a hog - take it it belongs to YOU
At this rate the debt will be 100% of GDP before long. That is not good.
Chris - okay - I thought the debt was 360% of GDP already..
ow its polish zloty....you cant hide bucky....you crafty bitch.
dryfly,
"If TARP, TAF and all the rest haven't convinced you they intend to 'print baby print' - to steal a theme from our would be VPILF"
Sorry, man disagree. You missed the memo on Velocity. This cash goes from FED/Treasury to Tier one vault...and stops.
MV is equivalent to PQ.
I'm not convinced that TPTB are increasing M over it's destruction, but V is way down. Way!
Nostrovia,
og gosh ebay and PayPal are covered under TARP, too!
"ebay makes progess to package PayPal debt under Federal Regulations"
GDP is about 13 trillion, I believe. Japan has the highest debt to GDP ratio. Italy is also over 100%
Nice chart of Countrywide crap here: http://2.bp.blogspot.com/_H2DePAZe2gA/SQithiEZH6I/AAAAAAAAGNk/QkAfq-xfGsg/s1600-h/REO-10-17-2008.gif
e-Bay and Pay-Pal are not self-supporting? Good God
Banks to Continue Paying Dividends - washingtonpost.com
WAPO Banks to Continue Paying Dividends Critics Say Federal Aid Is for Lending
(Bank regulators should impose many more dividend restrictions.)
Long TBT with 1/4 of my account. No progress to speak of but when it rips I want my position in place...
Bearly I'm with you man. I have a reckless 1/3 of my retirement IRA short Treasuries. Part in TBT and more in PST.
If the economy stabilizes rates will go up, or if the dollar collapses they'll go up. Plus the sheer funding demands of a $1.5 trillion 2009 deficit...
About the same time the deflation ends next year.
I get nervous about counterparty risk in these ETFs though. Any thoughts on that?
Socialized Harley-Davidson Club
Pee Wee's Big Adventure Tequila Scene
YouTube - Pee Wee's Big Adventure Tequila Scene
og gosh ebay and PayPal are covered under TARP, too!
Awesome!
I want a pony, too!
$1.5 trillion deficit in 2009?
Ohhh, I think not.
I can't imagine Harley-Davidson riders will fly The American Flag anymore! They should wear North Korea flags and have those pussy bikes built there too, but then how would anyone know the difference between an American bike and a North Korean bike? Very confusing for these bikers!
Comrade Misean is Dope,
Agreed that TARP is going to stall in tier 1. But BB won't stop there, fiscal stimulus is already in pipeline and more to come.
Japan's mistake is they stopped short of total war on deceleration of money. Bernanke knows this and his Fed will do whatever they need to do to make it crazy to hold on to the cash. Inflation will be achieved, I doubt they will be able to control it once they get it going though.
Sorry, man disagree. You missed the memo on Velocity. This cash goes from FED/Treasury to Tier one vault...and stops.
MV is equivalent to PQ.
I'm not convinced that TPTB are increasing M over it's destruction, but V is way down. Way!
V dropping now like a pair of dirty shorts... but wait until the bridges to nowhere come back in style - oh and they will. We'll each have a couple.
Though they won't look like bridges - they'll look like education, or tech or health care... investing in America for the twentyfirstiest century. Something politically 'popular'.
Or just buy a whole lot of mortgages (and in effect print money to give back to people to spend)... McCain's bridge to nowhere.
Unlike the Japanese who save & squashed their stimulus - we'll all go take our TARP Tech Inc. paychecks and buy TWO hogs - one for each cheek. Yeeehaw!!
The only question is how soon it kicks in, how bad it gets and how many of these cycles we can survive. That I can't answer - but we got AT LEAST one more good one in us.
Enjoy!
Currently accounting, since I can't short in my IRA, I just buy long-dated call options that are in-the-money, just in case the parabolic move has not taken place by the time the option expires. That way you can keep rolling the expiring options into new options.
Japan's mistake is they stopped short of total war on deceleration of money.
That and the dummies save. Meh - we'll show them.
Fears mount in Japan over complex yen products
Fears mount in Japan over complex yen products - Times Online
Traders in Tokyo have given warning that about $90 billion (£55billion) of complex foreign exchange products, sold mainly to Japanese households and institutions, are on the brink of falling like a house of cards.
A rescue effort by the product issuers - large Japanese, European and American investment banks - is expected to involve extensive hedging measures that will throw global currency markets into even deeper turmoil. ...
USD$ on a tear
Crap.
One of the Chinese guys must have been listening in on the "Secret Plan" at Treasury.
Print faster, Ben!
FASTER!
....or puts in the case of TLT of course
Cool bank failure data for your enjoyment :
FDIC site
Makes for a pretty chart. Just 16 this year...long long way to go.
that will throw global currency markets into even deeper turmoil
Deeper?!
WTF?!
OMG, this is the funniest thread.
I love Jimmie D!!!!
Go, Japanese dudes, go!
Sell faster!
"V dropping now like a pair of dirty shorts... but wait until the bridges to nowhere come back in style - oh and they will. We'll each have a couple.
Though they won't look like bridges - they'll look like education, or tech or health care... investing in America for the twentyfirstiest century. Something politically 'popular'."
While I agree this is the plan this appears to be government sponsored spending.
This sucks capital away from private enterprise resulting in higher real interest rates (for private companies).
I still don't see how this doesn't turn into an ugly drawn out recession.
I agree that American consumers will spend, I just don't see very much credit left over for consumers when all is said and done.
dryfly, Why @ Zirp,
"Unlike the Japanese who save & squashed their stimulus - we'll all go take our TARP Tech Inc. paychecks and buy TWO hogs - one for each cheek. Yeeehaw!!"
No capital...no savings...this is why this fails.
Unless we have a system THAT ALLOWS PRINTING, which ours does not...won't happen.
Why do you think so much sterilizations been going on?
Dead meat deflation. This ain't the your father's 70's.
Nostrovia,
Broward Horne,
This little tidbit was interesting as well:
... At the same time, Japan's Big Three banks - Mitsubishi UFJ, Sumitomo and Mizuho - are tallying mounting losses from Tokyo's plunging stock market. Japanese banks have vast share portfolios that are bleeding red-ink.
When the Nikkei share index hit a 26-year low of 7,000 points this week, combined paper losses on the stocks held by the Big Three since March 2007 amounted to about $100billion.
Industry figures said that if the savaging of the Japanese banks' huge stock portfolios continues, it could trigger a capital crisis among institutions recently viewed as among the safest and best capitalised in the world.
The stock losses suffered by Mitsubishi UFJ alone - $41 billion - are greater than the total sub-prime writedowns of HSBC, JPMorgan or Bank of America.