Market Take from Cartoonist Eric G. Lewis
Submitted by
CalculatedRisk on Fri, 10/10/2008 - 6:34am (225 comments)
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first?
Banana.
34th?
Bush speech didn't really say anything new, did it?
emo?
Bush speech said that the market doesn't like to listen to Bush talk, as usual.
How stupid of me not to get into more short positions with this last rally. It's clear that there are ulterior motives here, which leads me to think power grabs and bickering at the global meetings this weekend will prevent any substantial relief from happening.
At first I thought the guy was jumping for joy reading CR.
Shorts can't move if the markets are closed on Monday.
great chart of the day
Chart of the Day - www.chartoftheday.com
CR-I'm posting this on my Fridge for my husband. In an era of subprime performance you are AAA PRIME-Thank you!!!
SKF back on the roller coaster up-hill
clink-clank-clank-clank
clink-clank-clank-clank
mmm...smell that machine oil
LEH bonds settled @.0975 So how much do the bond holders get paid by the insolvent sellers ?
Well.... down 340 points feels like up compared to what happened at 9.45.
So they did time Bush right. I was wrong.
LEH bonds settled @.0975 So how much do the bond holders get paid by the insolvent sellers ?
1-.0975
Chart of the day - it's official then?
Bleeding Is Fundamental.
I'm living in a soap opera - As The World Burns.
or maybe it's Days Of Our Hives
So does a company now get to choose?
GM says bankruptcy is not an option
"But bankruptcy protection is not an option GM is considering," it said. "Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."
That should be simple math, but I think it also depends in this case on how much money the seller has left from what they've borrowed from the Fed....
That's the funniest toon I've seen on the site yet.
My age allows that I'll never be quick enough to be first.
GM is one of the most self delusional corporations out there. I worked for them for a while and was blown away by this fact.
GM- "Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."
Bankruptcy. Definitely.
White House officials will hold a 2:30 p.m. EDT conference call with U.S. banking executives, two sources with direct knowledge of the event told Reuters.
Lehman CDS #'s are starting to come out...not good
GM says bankruptcy is not an option
"But bankruptcy protection is not an option GM is considering," it said. "Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."
..I lol'd Hard!
GM- "Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."
Wasn't in Lehman's interest, either.
I lived for several years in a collective with loads of other people, spending perhaps $3 a day, eating lots of oats and vegetables.
I've never been happier.
So this crash doesn't have to be all bad. At least a lot of people won't feel lonely anymore when they rediscover their neighbourhood.
But bankruptcies cannot happen if they are not in the best interest of the customers!
Can you not see that?
Guy on BloombergTV: "This is really the Mother Of All Financial Crises."
Seems like exactly the backwards, upside down, inverted thinking that got us here. Wouldn't it be more accurately described as the Retarded Stepchild Of Kleptocratic Financial Thievery?
a cartoon of a guy jumping for joy because the bailout bill passed... what's so strange about that? IT IS CONTAINED. now go jump for joy.
All good?
Is it too personal to share what kind of living arrangement you had? Was it an ecovillage or egalitarian community? The wife and I have been considering these things for a while now.
It is so satisfying to watch the Good and the Great get overtaken by history.
Guy on BloombergTV:" We need a capital gains and a corporate tax cut"
Anyone want to call the first swiss bank needing a bailout?
I'm feeling Credit Suisse. They'll probably lose at least $10bn on the Lehman auction (them + clients they are acting on behalf of)
idiot talking head on CNN: "If you're near retirement age, expect to work even longer."
I'm 31 and I expect to work until the day I die.
Cannabis, you don't need to join a commune. You can buy nice bungalows in decent fun neighborhoods in "flyover country" for $100K or less. Not fixer-uppers either.
On Monday I set a few GTC trades on SKF and SRS. I thought the prices were high enough that the trades wouldn't complete until 2 weeks or so.
Opps! SKF trade completed near close of trading yesterday and SRS trade just completed. Of course now the conundrum is what to do with new-found cash?
And in all honesty I'm dealing with 1-2 shares of each... not a hard core trader just getting my feet wet.
Academic, as it's frozen until March -
a friend has death put bonds (couple hunfdred grand total)
I looked at the names:
BAC
GM
Federal Home Loan Bank
Freddie
GE Capital
etc. etc.
Nothing to be done in the meantime - account frozen in estate wind-down.
Any thoughts on this stuff paying out at par (as death put requires)
I honestly don't know. I suggested they were fairly insulated, but nothing is for certain.
Oh my, what a cartoon.
It is so satisfying to watch the Good and the Great get overtaken by history.
Glod is good, glod is great.
Let us thank him for our food.
Amen.
mal: Our desire to join such a community has little to do with this crisis. It only moved our timeline a little. The 'community' aspect is attractive to us, and the subcultures that live this way in the US are very much in line with our values and desires.
LONDON (MarketWatch) -- Initial results from the Lehman Brothers credit-default swap auction indicate a midpoint of 9.75 -- implying the recovery rate on Lehman's senior debt is about 10 cents on the dollar. The net open interest is $4.92 billion.
This market is way too fun guys.
Query: Biggest gains of the day
Sell: Zion bank for being up $8 to $36 for no reason at all
We're going to swing low, swing back up, and then around 2:30pm the shenanigans will start with a -4% or more close
The Lehman auction results are the most impotatnt data point today. Where are folks getting that info? Tell us all what is happening!
PIMCO has to make up the difference on Lehman's CDS. Ha!
Suddenly, this morning, I'm wondering where "Ahead of the Curve" has gotten off to.
implying the recovery rate on Lehman's senior debt is about 10 cents on the dollar
Ok someone needs to straighten this out.
Is it 9.75 cents on the dollar
OR 90.25 cents on the dollar ?
so 10c on the dollar - now who does that bury? seems better than i would have expected
pimco still can't be pleased..
So who are the big losers in the Lehman CDS fallout?
PIMCO? Others?
So who are the big losers in the Lehman CDS fallout?
PIMCO? Others?
Taxpayers
If you wrote the insurance, you have to pay out $.90 on the dollar. In other words, it's close (about 9 cents away) to worst case.
Interesting Times writes:
implying the recovery rate on Lehman's senior debt is about 10 cents on the dollar
Ok someone needs to straighten this out.
Is it 9.75 cents on the dollar
OR 90.25 cents on the dollar ?
90.25 cents on the dollar, however subject to change until the final read at 2pm.
MLM writes:
Suddenly, this morning, I'm wondering where "Ahead of the Curve" has gotten off to.
MLM | Homepage | 10.10.08 - 11:00 am | #
He is behind the 8-ball...
10 cents on the dollar - per bloomberg and marketwatch.com
Glad we have agreement on 10 cents a dollar or 90 cents a dollar or some other number. No wonder the market is volatile, nobody knows what nobody knows!
Japanese debt market in free fall, this could spread. i was expecting bond crisis months from now, not at the same time. wow.
JGBs extend slide as panicked dealers rush for cash
JGBs extend slide as panicked dealers rush for cash
| Reuters
The key is still WHO will pay the insurance on the other 90 cents!!
90.25 cents on the dollar, however subject to change until the final read at 2pm.
Peter-san | 10.10.08 - 11:02 am
Just to be clear, once again. Peter-san, does this mean the insuror has to pay out 90.25 on the dollar, meaning a 90% loss??
Is it too personal to share what kind of living arrangement you had? Was it an ecovillage or egalitarian community? The wife and I have been considering these things for a while now.
With friends. Probably works best when you're young. After a while all the people could get on your nerves.
It was quite egalitarian and ecological, yes. Everyone will need to be quite humble in order to thrive in those circumstances. The problem is that the wrong kind of people could be attracted to this kind of thing - dopeheads, etc. You'll need to keep some discipine, peace & love doesn't work in the long run. You'll need all sorts of communication.
Watch out for cannabis, which really could f*ck you up for good. I've seen half a dozen people going more or less down the drain because of that substance. You'll be better off without it, I assure you.
Also, there will be some netting so, who knows what the end result will be.
The key is still WHO will pay the insurance on the other 90 cents!!
crispy& cole | Homepage | 10.10.08 - 11:04 am | #
YES! Who is it?
Is anyone else worried about a totalitarian solution being applied to this crisis?
All good?: Thanks, bro. I appreciate the post.
Sardonic:
Yes.
Hey, I have a GMPP service contract with 3 yrs left on it. If GM files BK who honors my contract ?
It's $0.0975 on the $1, leaving the insurers on the hook for $0.9025.
Sardonic writes:
Is anyone else worried about a totalitarian solution being applied to this crisis?
Are you suggesting this has not already been applied?
If you can figure out a way to do ccoperative living without the other people, you could franchise it and make billions.
report from the front:
i work at a huge insurance company in flyover country, where the staff closely resembles the cast of "Mommas Family".
outside smoking, they were all talking about the dow breaking 8000.
deepest core panic in everyones eyes.
The Auction isn't over.
Initial bidding from 9:45-10:00am. Might repeat at 11:45, 1:45pm as needed
There are also protocols for when notice of ownership must be given (as in someone wanting to buy a Lehman/bond CDS betting that they have a better estimate of the market price, most of that happened yesterday)
Anyways, the parties will be informed come 5:00pm EST on the results (the underbidders who try to skew the auction get 'fines' tacked on so that everyone pays +/- 1 maybe 2%)
Comrade Clueless Dufus,
If you wrote a swap (insurer), you are on the hook for a payout of 90.25 on the dollar (as it stands). If you took a swap (insured), you're getting paid 90.25 on the dollar.
More uh... humor.
Sad Guys on Trading Floors
I just think the United States is going to wind up gently dissolving over the next 50 years. The federal government may impose totalitarian solutions, but I think in the end, some local and state governments will gain stronger say over local self-determination, and the federal government will just get weaker and more impotent (and occasionally more despotic). The process has already started. The only people who are really scared are the ones who are tied into the current system body and soul. We all are, but some way more than others.
Collusion: It must be a huge temptation for a government with unlimited funds to simply add some extra electronic zeros to their stock market intervention stash to stop these free-falls in mid air.
But of course, they are honourable men, and would not yield to encourage even more moral hazard.
Just to be clear, once again. Peter-san, does this mean the insuror has to pay out 90.25 on the dollar, meaning a 90% loss??
yes +/- a few percent as these are just preliminary numbers.
The market was expecting a tiny bit better than 9.75 cents on the dollar recovery rate, but not much, so this is not un-expected - but it does confirm some of the elements of fear that had been baked into the market.
We lumpen-investors still do not know who owes whom what, nor who will be unable to pay.
Personally, I would expect the TED spread to come down in a few days once there is a glimmer of clarity on this particular front, with some bank lending going on again to other banks at more reasonable rates, and other banks just left for regulators to seize (or freeze).
expect more double-good speak from mass-media
"stocks recover from 700pts decline by declining 300tps"
The LEH settle defines pricing on MBS, No ?
Well I'll comment on the cartoon. I do believe he's improving or maybe gallows humor is just his forte
The LEH settle defines pricing on MBS, No ?
No. That would be Hank
For other TED-ophiles:
Bloomberg.com:
Personal Finance
"The only people who are really scared are the ones who are tied into the current system body and soul."
This is exactly why I've been willing to sound crazy to those I care about. Those who cling and wait are going to be leveled in this. I'll repost this great quote, which I got from a poster here. It sums up my primary theory about this mess better than I ever could.
"In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists."
Eric Hoffer
Thanks again to the person who shared this originally.
Where is Rich, by the way? Hasn't posted in days.
Maybe he's been too busy shorting insurance companies.
Today's TED Spread...
http://www.realmeme.com/roller/page/realmeme?entry=ted_spread_n_a
"Mission Accomplished!"
Re: Lehman CDS -- isn't the problem that, since the notional amount of CDS is larger than the actual amount of bonds the CDSs were insuring -- that a 90 cents on the dollar will mean counterparty losses of many times the actual amount of Lehman debt outstanding?
I will gladly pay you in January for a pony today.
The initial bidding resulted in a "value" of 9.75¢/$ for Lehman's bonds.
that means sellers of the CDS (some $400bn out there, about $50bn in this auction) have to make the CDS buyers whole so $1.00 - 0.0975 = $0.9125 for every $ they sold
What was the point of having the President address the nation when he had nothing new to talk about? Bad staff work. He should shut up until he has some new plan to talk about.
Gareth G writes:
I will gladly pay you in January for a pony today.
I will use your pony in January as collateral for a stake in Ponies, Inc today on margin at 30x leverage.
If you wrote a swap (insurer), you are on the hook for a payout of 90.25 on the dollar (as it stands). If you took a swap (insured), you're getting paid 90.25 on the dollar.
Perfect. Not as bad as I expected.
We haven't gotten to the part in the play where Gasparino "leaks" some news from the G7 meeting and/or the LEH CDS auction. Coming your way at 12:00ET.
Reuters:
Berlusconi urged investors to buy shares of energy companies Eni (ENI.MI: Quote, Profile, Research, Stock Buzz) and Enel (ENEI.MI: Quote, Profile, Research, Stock Buzz), saying the former would end the year with extraordinary results.
This guy is so stupid it's actually possible to extract some interesting information from him.
Comrades,
Bloomberg just mentioned "Hope Now" right after playing Bush speaking.
That has to mark a bottom. Right?!?
Do svidaniya!
cr
not funny.
situations such as those we face today require, not crass cartoonery, but subtle irony as a counterpoint to the ruin in evidence.
early this week, an indian american father took his own life after murdering his family of five. he had apparently lost much in the recent debacle.
again...
not.
funny.
i wish you would stick to the hard commentary, and leave the humor to the peanut gallery of commenters. i can find enough good editorial cartooning in the op-ed section of the papers.
.
I am continually frustrated that the story of this financial crisis is being told as starting with the decline in the "housing market" How can we correct this mischaracterization that is being told so frequently in the MSM & by TPTB?
As far as I can see, and please, somebody correct me: CDS allow financial institutions to move risk off balance sheet, thereby reducing the liability side, but are also traded as securities in black boxes, so are booked as assets, inflating the asset side. It is a self-inflating mechanism which has created the illusion of demand and inserted inflation in all assets. Housing moves with inflation, no more no less.
Tehre are a lot of contributing factors, and I don't want to oversimplify, but the mischaracterization of the origins of this crisis is so widespread, it is only on a few arbiters of truth on the web where the story is being told, somehow it has to go mainstream. The people that understand this know that the ultimate root is fiat monetary system, but this is just too radical for the general public, I feel that we have to lead the general public there more slowly: I'd like to see more of a focus on the creation of unregulated CDS market growth(and other liquidity instruments) allowed by the Commodities Futures Modernization Act of 2000, exacerbated by financial institution deregulation and repealing of banking controls in Glass Stegal enabled by the Gramm-Leach-Bliley Act of 1999 growth + flat out errors in GAAP accounting laws in the tratment of these instruments. The combination of the two has created this self-inflating mechanism that is deflating. I know I'm preaching to the choir, and I think more and more people are awakening, but I'm just so amazed at the lack of rigorous investigative journalism.
yes thats the problem. for example, there were a lot of baskets sold, meaning investors were paid perhaps 100bps per year to "insure" a basket of names, and many of those baskets, chosen by computer but tweaked in collusion with ratings agencies, have lehman in there.
and of course then there are the speculators and the ones using it as synthetic bond (selling protection is similar to owning the underlying).
do not know the total exposure. how it nets out is ireelevant if youre talking across counterparties cause if A cant pay B, B is out the money, doesnt really matter that C can pay D.
FYI the "model" severity rate for an investment grade financial is about $.65 to $.70 so this is worse.
GS is digging a DEEP hole here. Hank is NOT happy. He is going to push a lot of buttons now.
Interesting Times writes:
If you wrote a swap (insurer), you are on the hook for a payout of 90.25 on the dollar (as it stands). If you took a swap (insured), you're getting paid 90.25 on the dollar.
Perfect. Not as bad as I expected.
Interesting Times | 10.10.08 - 11:14 am | #
The problem is someone is going to be left out in the cold, just my guess from studying CDS and swap settlements for a few years. But, I don't think anyone, except the insiders (ISDA), knows who it is.
MS -35,26%
Can i haz a beilout?
Great quote, Cannabis. Thanks for sharing.
Arun
Get a life.
ISDA
The 2008 Lehman CDS Protocol (the Protocol) relates to settlement issues concerning Lehman Brothers Holdings Inc. ("Lehman"), that filed for Chapter 11 Bankruptcy Protection on September 15, 2008. The purpose of the Protocol is to offer market participants an efficient way to address the settlement issues relating to credit derivative transactions referencing Lehman. The Protocol will offer institutions the ability to amend their documentation for various credit derivatives transactions in order to utilize an auction scheduled for October 10, 2008 to determine the final price for certain Lehman obligations. Markit Group Limited and Creditex Securities Corp. will administer the auction.
This is not the bottom in the markets for sure.
Someone is doing a number on MS, down 35%.
The cartoon is a bit of hyperbola. In reality CR just drives readers to dig deeper into the back of the liquor cabinet.
ARUN: It wasn't CR's joke.
Lighten up. It's funny. I get it, and I'm still a newbee to this blog.
Mitsubishi is still supposed to be committing $9 billion to MS? But MS's whole market cap is now about $9 billion! How is this deal going to work now that MS is at $8/share instead of its $24 price last Friday?
Cash Settlement Date and Accruals
When is the Cash Settlement Date?
The Cash Settlement Date is expected to be October 21, 2008.
How are accruals calculated?
The Fixed Rate on the Lehman Portion shall accrue to but exclude September 22, 2008 for purposes of the payment due on that date (for transactions maturing on September 20, 2008, the accrual is to and including September 20, 2008). However, a rebate of the Fixed Rate accrual on the Lehman Portion for the period from and including September 16, 2008, to but excluding September 22, 2008 (or to and including September 20, 2008 in the case of transactions maturing on that day), will be added to the Cash Settlement Amount to be paid to Buyer on the Cash Settlement Date.
All good? writes:
Reuters:
Berlusconi urged investors to buy shares of energy companies Eni (ENI.MI: Quote, Profile, Research, Stock Buzz) and Enel (ENEI.MI: Quote, Profile, Research, Stock Buzz), saying the former would end the year with extraordinary results.
This guy is so stupid it's actually possible to extract some interesting information from him.
Or Berlusconi is tipping his hand, say like a war with Iran?
So a major hedge fund went under overnight and created a massive liquidation event this morning.
And now Morgan Stanley rumors are creating a new well-off.
Right? Two disparate events?
but I'm just so amazed at the lack of rigorous investigative journalism.
Don't be amazed. These commentators are paid by the same people who caused this. Don't bite the hand that feeds you
@TheBird
Me as well. Housing exacerbated the problem, but is NOT the root cause(s) of the current "meltdown".
CSC,
Rent "Together" (2001)
Together Movie Reviews, Pictures - Rotten Tomatoes
Ballmer is doing a number on it. Have you read his quotes lately? I don't own any MS, but I'd have sold too. The captain of the ship is ignoring the reefs and insists on buying the iceberg.
So how about all of the other people who have lost their jobs who DIDN'T kill themselves and their entire families?
That guy had something wrong in his head. A bad economy just made it worse, but then again anything might have made it worse.
I know I'm preaching to the choir, and I think more and more people are awakening, but I'm just so amazed at the lack of rigorous investigative journalism.
Bird,
Good analysis.
I've written and called my Congress critters on these matters in the past. They just don't react until the crisis hits. I'll be contacting them again shortly. Maybe you should do the same.
No later than 2:00 p.m., the Administrators will publish on Tradeable Credit Fixings (1) the Final Price, (2) the names of the Participating Bidders who submitted bids, offers, Dealer Physical Settlement Requests and Customer Physical Settlement Requests, together with the details of all such bids and offers submitted by each and (3) the details and size of all matched trades.
Arun,
Chew on a barrel.
Giving up on CNBC, putting on the Venture Brothers.
Keep me posted guys.
Oops, wrong MS.
---slinks off now.
crispy& cole,
Hah, thanks for reminding me to check in on GS there. They're worth about $22 per share if you look at Morgan Stanley from yesterday despite being in better shape once you assume MS will be able to roll over their debt.
I was busy watching LVS continue to get its comeuppance, just saw a story about Sheldon Adelson, "local billionaire falls on tough times". This bankruptcy watch is a happy time because it means he has less money for his political actions (he has given to and received 10 times back from the Bush administration, and recently was sending out the infamous Obama is a terrorist mulsim dvds to battleground states. he has also been active in deposing Ehud Olmert in Israel because he wants a war with Iran -- too bad for him Livni was around
The guy is a jerk, so from the cloud I see the silver lining
There is much more information on the Lehman CDS settlement at the ISDA website (see the .pdf for dates and times)
I'd be hanging myself too if i lived with an old lady who looked like that.
But really, anyone who reads CR on a daily basis should be profiting right now, or at least treading water, no?
Yeah, only one MS has CDS worse than GM...
Man-moth: That looks great, dude. I'll check it. Many thanks.
I'm still calling 7000ish as the low point on the dow
blackhat writes:
I will use your pony in January as collateral for a stake in Ponies, Inc today on margin at 30x leverage.
hahahahahahahaha
"again...
not.
funny."
Lighten up Francis.
CR has been working like a demon for weeks, keeping this blog on top of the wave.
Stuff your criticism.
not funny.
situations such as those we face today require, not crass cartoonery, but subtle irony as a counterpoint to the ruin in evidence.
I don't think it was supposed to be funny. Perhaps CR are trying to point out that we'll also need to carve out what's positive in this situation.
Mish thinks we're getting close to the fourth Elliot wave, that is a month-long or so rally. After that will come another dive, and then the bottom is reached.
Some of us have known that this huge correction has been overdue since 2001, and are relieved that it's finally coming. It's also a correction of attitudes, which have been dreadfully out of touch with reality over the last few years.
At least all this means that a better world is achievable after all.
I'm with Arun. Suicide is not funny. Especially not when it is actually happening. There are people killing themselves over this crash - the murder-suicide in LA, the guy that jumped in front of the train in London. And yes, there are probably people reading this blog thinking about it.
Not funny.
Ballmer is doing a number on it. Have you read his quotes lately?
MS runs its platform on M$?
General Motors Corp.'s market value ($2.7-billion) is only slightly higher than Oprah Winfrey's net worth ($2.5-billion, according to Forbes).
She also has a better book club,
Charlie Gasbag giving an on-air hummer to MS right now.
arun,
please accept my lead gift in the twilight.
Rumor is that the Treasury is backstopping the banks bids on the Leman paper.
Anybody else hear this?
In unrelated news, Osama Bin Laden to give his victory speech later today.
Anonymous writes:
but I'm just so amazed at the lack of rigorous investigative journalism.
Unfortunately (or fortunately, depending on where you stand), many of those good investigative journalists and newspaper business reporters had been laid off in the previous 18 months.
Bottom Dweller writes:
Or Berlusconi is tipping his hand, say like a war with Iran?
Maybe he's going to invade Abyssinia.
On another note GS sure must look more appealing to Buffett now. Maybe he should negotiate another deal.
If I had only CR to view as a sole source for the market/economy health, I'd be hanging too. It's not funny that average people are losing their investments and possibly their retirement. It's easy to be a cynic because you really don't have to think about your position.
Frankly, those cartoons CR runs aren't particularly funny ANYWAY -- suicide notwithstanding. (About the ONLY criticism I have of this blog...!)
That said, people who are killing themselves over money are just looking for an excuse to kill themselves. They have got way deeper psychological problems than their finances. And personally I don't feel very sympathetic to a guy who thinks he's so indispensible to others that he assumes his family cannot survive without him, so if he wants to die he has to take them down with him. Scumbag.
great. another borrower who will not be paying up his mortgage.
arun brings up a good point.
we talk smack because we are "smart" enough to have gotten out of the way.
real people, naive as they may be, are getting pole axed.
think about people who ~thought~ they were retiring in the next couple years.
Anyone else looking at the movements in the Japanese, Australian and US yield curves?
Bloomberg.com:
Government Bonds
Bloomberg.com:
Government Bonds
Bloomberg.com:
Government Bonds
I think the Yen carry unwind against the Aussie might be coming to an end much sooner than I would have expected.
And, I am growing fearful of the rollover risk on the US debt given how much movement we've seen recently in the middle part of the curve with only a modest (relative to needs) auction this week.
Sardonic,
I see the likelihood of the severest actions occuring outside the G7. People talk about fascism or totalitarianism without understanding that it requires the use of terror - the threat of direct physical violence - (not merely fear) to keep it in place. This requires the cooperation of the military and police forces - highly unlikely IMO.
This administration has used many of the tricks of the trade, fear mongering, infiltration of the media, neutralizing centrist views by labeling them as radically leftist, bread and circuses, you name it. And of course the economic hanky panky as well.
But you'll know for sure when sites like this are shutdown, when all press except for pre-approved mouthpieces are silenced, when protests are violently beaten down, when groups other than Muslims are targeted.
Fair Economist writes:
I'm with Arun. Suicide is not funny.
Depends on who's doing the suiciding.
CR
Maybe a link to the suicide hotline would help for those how migh not like the humour.
I had a friend commit suicide this year (not related to finance). It is tough event for everyone, but it is a personal decision that comes from LACK OF HOPE.
People need hope now. And leadership.
Organic George writes:
Rumor is that the Treasury is backstopping the banks bids on the Leman paper.
Anybody else hear this?
Organic George | 10.10.08 - 11:25 am | #
Would not surprise me at all...I am sure they know who the net debtor on this deal is.
Fair Economist writes:
I'm with Arun. Suicide is not funny. Especially not when it is actually happening. There are people killing themselves over this crash - the murder-suicide in LA, the guy that jumped in front of the train in London. And yes, there are probably people reading this blog thinking about it.
That's just silly. While there are always going to be the odd person who decides on taking their own life, as long as everyone is losing value on their house, 401K, and the entire market is tanking simultaneously then no one feels like their situation is dire compared to someone else's.
I would postulate that if this crisis was hitting people assymetrically, i.e. some groups more than other, there could be a spike in the suicide rate. But as long as your entire cul-de-sac is hemmoraging red ink and can't sell their house, then you don't feel so bad about it.
CR really trying to make us laugh today. First the Bush speech and now this....
CSC,
Rent "Together" (2001)
Yep, it really captures the spirit of what collectives were in the 1970's.
Also, Heimat 2:
"Die zweite Heimat - Chronik einer Jugend" (1992)
More of the same, only much better.
FIELD STATUS REPORT
FROM: Gen. Paulus Bernankus Fulda
TO: Central Command, Western Frontier
Special Forces have captured the Le Tunnel Sous La Manche entrance and proceeding to clear vehicles; they have proceeded 10 km without incident.
Küsten-amphibische Kraft are now staging at Dunkerque; landing forces of the Neue Finanz Korps are proceeding to meet them.
Our Paris-Calais column is under attack by a strong force of "équipe de protection de plonger" at Mamaetz,
and at the moment have halted movement along A26/E17.
The handover ceremony in Paris has been delayed until 1900 GMT tonight in order to work out the protocols with the French governments.
FULDA.
Gasbag is just hilarious...
paraphrasing... "they were so late before, why couldn't they just wait a couple more days now".
Anyone thinking of killing themselves and leaving their loved ones to suffer the loss because of money or the loss of prestige is already a walking corpse.
Get some perspective, for cryin' out loud. Travel internationally a little and then cry about your 401k. Go to a Children's hospital and then wallow in self-pity. Look at Iraq and then scream about how unfair and fouled up your life is.
And if you still want to end it, go ahead. That mentality is what got us here. We'd be better off without the extra materialist delusion.
Sadly I think the thing Arun mentioned was culturally linked, maybe this was an Indian-American who felt culturally isolated like he was the only person on earth this was happening to.
But then again, in his suicide note he went on about "the honorable thing to do" - yeah, by all means don't let your WIFE support the family. That would be such a blow to your traditional male ego. Solution: we all must die!
I have no sympathy for the male ego.
I would postulate that if this crisis was hitting people assymetrically, i.e. some groups more than other, there could be a spike in the suicide rate. But as long as your entire cul-de-sac is hemmoraging red ink and can't sell their house, then you don't feel so bad about it.
Just to follow this up, be exceptionally cautious about flaunting your 'preparations' for this crisis. Misery loves company, and someone comfortable during a crisis sticks out like a sore thumb.
Peter-san:
Any idea how much more the USD will appreciate? It's through the roof now.
[On another note GS sure must look more appealing to Buffett now]
Couldn't be happier for that knife catcher. I hope he doubles down today ahead of the CDS explosion.
Suicide is painless, it brings on many changes la la la la la....
Gasparino has been reduced to begging the rating agencies to keep us in the dark for just a bit longer.
ullpointer
think about people who ~thought~ they were retiring in the next couple years.
~~~~~~~~
that's what's been depressing me about this since 2004, not being able to convince most of my family and friends about this crash.
i have survivor guilt by actually profiting on all of it with my reverse index funds and gold.
it's going to stay painful and get much worse as the reality sets in for those not ready.
I agree very much with noobgoldberg. No victory laps here. As prepared as I may be, I wish this wasn't happening.
feesher
Dow down 350 (4 percent)
yeah, don't waste any more energy on gloating - it's time to LEAD by example.
AIG's toes writes:
FIELD STATUS REPORT
FROM: Gen. Paulus Bernankus Fulda
Tell Fulda the center must hold! We are all Parisians
I mentioned yesterday we should block settlement of CDS unless the buyer can show it was a legitimate hedge. Misean disagreed, saying it was too late for that improvement to fix what's already happened.
I think it's still important because one of the effects of the CDS settlement is that fraudsters will wall off with untold billions of dollars, pulled out of the financial/government system. This is going to come out of our taxes eventually, and I don't want to pay for luxury yachts for Cayman Island hedge fund managers. Remember even if the hedgies are net neutral, they take from us as a group, because the ones on the wrong side BK while the ones on the right side walk off with the dough.
EvilHenryPaulson writes:
This market is way too fun guys.
Query: Biggest gains of the day
Sell: Zion bank for being up $8 to $36 for no reason at all
You better watch out EvilHank, the SEC is going to come looking for you now according to Bush.
Markets are down now, wonder what it'll be like when panic sets in this afternoon?
the CDS explosion
Yes. I think many people don't get this. Longs, for example. No more sweeping it under the rug - financing your way out of looking at it. Here it is, it's not going away, and we're all going to deal with it.
"Remember even if the hedgies are net neutral, they take from us as a group, because the ones on the wrong side BK while the ones on the right side walk off with the dough."
This is why I found it silly that some people were mentioning we could just net this out and everyting would be ok - if you are up on this deal why would you let million/billions go??? You wouldn't!
Re: Jumping in front of the Train.
A friend of mine lives in Japan. When their markets crapped out in the 90s a business man jumped in front of a train and everyone on the train felt bad about it.
When the 10 person committed suicide the same way, the people on the train just got exasperated at the delay
It's all perspective
Uncle Ar, I already issued a public letter to them asking that they get to me as soon as they handle their expanded responsibilities of supervision, and then get to the stock-purchasing group from this morning. Plus you could always challenge any company to submit its balance sheet to an auditing in court as discovery and walk out vindicated
"early this week, an indian american father took his own life after murdering his family of five. he had apparently lost much in the recent debacle."
Yeah, that's real selflessness for ya.
Explain to me what it takes to suck it and blow away a woman and four children.
Me-thinks it's not financial ruin.
So if treasury backstops the bids, why not bid 100? Screw it, the government is buying!
.10/1.00 That what I've seen at many sites. Now who has the cash to pay the difference? I seem to recall PIMPCO making a killing a few weeks ago as the first domino was tipped. If it comes from PIMPCO then possibly BG shuts up for a few days....nah he'll still be crying a river....
Hope you didn't spend that cash Billy boy...
Ciao
MS
No idea. I wish had one. I am fundamentally bearish on the USD, but it is hard to find a currency worth owning these days. Mild deflation in the US is fine for the USD, so long as there is no better place for the Chinese and Japanese to park their excess reserves....
I still like the HKD - linked to the USD so upside with more unwinds, and in hyper-inflation might get de-linked to offer some protection there as well.
I don't think anyone is buying the dollar because they want to, but they have trades that they need to unwind which require having dollars, and at least the USD doesn't have some of the problems of the Euro (like multiple governments with competing interests).
I wish everyone the best of luck. These are scary times for all, and anyone who thinks that they know what will happen in the near future is wrong.
The new retirement: keep working.
The new health care: don't get sick.
We're starting to get some momentum again.
DOW -4.5%
S&P -5%
And then there's 2 pm.
Down 429 (5 percent)
That was quick
I see LOTS of grown children and families coming back to live in the same region/town as Mom and Dad. If not actually in Mom and Dad's house.
We look to be retesting the 2002 lows.
Circuit breakers kick in at ~7400
(Whispers) moving 10% of my cash into a long index ETF....don't tell anyone!
Doh! I hate when I think out loud.
New thread.
People seem a little confused about Buffett's investment is GS. He bought preferred stock - he get's a 10% coupon plus the option to buy at $115 for the next 5 years. Not much risk with the government backstop.
Ballmer is doing a number on it. Have you read his quotes lately? I don't own any MS, but I'd have sold too. The captain of the ship is ignoring the reefs and insists on buying the iceberg.
Peasant Darkness
MS is Morgan Stanley, Microsoft is MSFT.
fools will hold into this weekend, especially any financial stocks.
If you face the prospect of being further diluted why would you hold?
all IMO
Ciao
MS
WOW
FTSE down 8% at close
3963.68 350.12 dow
Just out of bed.... is there still a market?
Oh wait, I'm going to take a morning dive off the cliffs in Puerta Vallarta.
ew lighter thread.
As well positioned as I am for this sort of nightmare, it makes me nauseous.
I never thought things would fall apart so quickly.
Making money has never made me sick before.
Buffets purchase was at a discount, so his return is 20%
CAC and DAX not so bad, but both
down 7%
Dax
4545.55 341.45\tdown at CLOSE
\t
\t\t
Cac 40
\t
3174.66 268.04\tdown at CLOSE
I was planning on heading up to Chino State park to take a walk and pick some white sage for wands.
I was planning on taking the dogs to the park so I could watch them lay in the sun and scratch their backs on the grass.
I was planning on camping at Doheny with my lady and enjoying a fire and some acoustic guitar.
I was planning on seeing Mom for Christmas and enjoying looking through old photo albums while drinking wassel.
But then I saw that my investments were down and that I might never get to buy that house in Newport Coast. So I should probably just kill myself.
Yeah... that makes sense. Fools.
Yal said: "CR really trying to make us laugh today. First the Bush speech and now this...."
The cartoon would have been funnier if the caption had been "Sebastian will be right back, he's just checking the news on CR.":)
Not true, but funnier.
BTW, no zealot like a convert: I doubled-up on my short (SH) position again this morning. My reasoning is that if we're in a true, one-way panic condition there's no telling how far the market can go down.
Sebastia
Peasant Darkness writes:
The cartoon is a bit of hyperbola.
Yes, but why does it have to so elliptical? Why is the author using such circular logic at a time when markets are going parabolic? Can anyone answer this?
Thanks. Figured that out. That's what I get for having tech blogs open at the same time. MS is usually microsoft in my world. The fact that they are sitting on so much cash and are still down, says a lot. If they were smart, they'd start scaling back to the two products that make 86% and 94% profit margins. Take the load off their license to print money. But Ballmer is an ego freak, so he's doing the opposite. Usually the market lets him get away with it. Kind of nice to see it not for once.
BTW, no zealot like a convert: I doubled-up on my short (SH) position again this morning. My reasoning is that if we're in a true, one-way panic condition there's no telling how far the market can go down.
Sebastian
Good to see you alive and well! Funny how things change...You're shorting the market and I've got an itchy trigger finger just hovering on the 'buy' button...
But you're right, panic is panic and there's no need to catch falling knives.
"BTW, no zealot like a convert: I doubled-up on my short (SH) position again this morning...there's no telling how far the market can go down."
Wow! Maybe this is the bottom.
Fair Economist you are quite right, as usual. But the legal mechanism is not clear to me. These are not securities, just contracts, so without a finding of fraud, or enough to get assets frozen, the only thing left is BK clawback.
Japanese debt market in free fall, this could spread. i was expecting bond crisis months from now, not at the same time. wow.
John Jansen has more - Paul Krugman Blog - NYTimes.com
Walk in Muir Woods or Pt Reyes Coastal Trail? Maybe I'll go surf fishing at Stinson. Need to get ready for the trip to Colorado Tuesday--
Life can't be all bad.
And I'm unemployed. Or at least that what society calls it.
FIELD STATUS REPORT
1530 GMT 10 Okt 2008
FROM: Gen. Paulus Bernankus Fulda
TO: Central Command, Western Frontier
Special Forces have passed the 25 kilometer mark in the Chunnel. No attempts of sabotage have been encountered.
FULDA.
I'd vote for Pt Reyes better week up there.
We'll need some music to show us the world at its best in such a sad thread:
YouTube - Los Jaivas Alturas de Machu Picchu part2
Warning, it starts quite abruptly.
WEED not week
AIG's toes, were you on assignment with Conjure and now leaking his report? LOL
I still like the HKD - linked to the USD so upside with more unwinds, and in hyper-inflation might get de-linked to offer some protection there as well.
I don't think anyone is buying the dollar because they want to, but they have trades that they need to unwind which require having dollars, and at least the USD doesn't have some of the problems of the Euro (like multiple governments with competing interests).
Thanks for your insight.
Reason i ask is that i hear some calls for the dollar index to go to 90. Can you believe that? I hope that is not in the cards.
Don't know about the HKD, they were stubborn in 97 and I guess they may try as hard again if push comes to shove.
This market in equities is bad, as long as there is no capitulation the trend is still down. Very frightful.
I fully expect to see 7k+ Dow if these conditions persists.
Can the DOW do 50% off of all time high in 1 year?... thats gatta hurt.
"People talk about fascism or totalitarianism without understanding that it requires the use of terror"
~~~~~~~~~~~~~~~~~~~~~~~
We have more citizens locked up in our jails and prisons than any other country in the world.
optimism means breaking one's neck at the end of the rope...slow strangulation only other alternative
Video - CNBC.com
Sebastian writes: I doubled-up on my short (SH) position again this morning
If that's not a signal of a bottom, I don't know what is.
Thank you, born-and-bred dopes for unloading everything in your 401ks for a pittance just like Jim Cramer told you to. I will sell those same equities back to you next year at twice the price.
Shnaps writes:
Sebastian writes: I doubled-up on my short (SH) position again this morning
If that's not a signal of a bottom, I don't know what is.
Thank you, born-and-bred dopes for unloading everything in your 401ks for a pittance just like Jim Cramer told you to. I will sell those same equities back to you next year at twice the price.
And thank you, oh wise experienced one, for jumping in and giving us an intermediate bottom so that I can close off a couple of deals while things still look optimistic.
I will sell those same equities back to you next year at twice the price.
Shnaps
Uh no. You'll be trading your silver and gold for Jack Daniels, bullets, and tampons.
Cha-ching!
Conjure says, "We're going to test DJIA 8,000 and go through it. There's no capitulation here. I don't hear enough people screaming 'Mommy!'"
Subcommander Doom writes:
Walk in Muir Woods or Pt Reyes Coastal Trail? Maybe I'll go surf fishing at Stinson. Need to get ready for the trip to Colorado Tuesday--
Ahh, Marin, my old stomping grounds. Moved to CO in 93 and never looked back!
"People talk about fascism or totalitarianism without understanding that it requires the use of terror"
~~~~~~~~~~~~~~~~~~~~~~~
We have more citizens locked up in our jails and prisons than any other country in the world.
I'm off 10% everyday | 10.10.08 - 11:53 am
and spend about the same amount on 'defense' as the rest of the world combined.
mp writes:
Conjure says, "We're going to test DJIA 8,000 and go through it. There's no capitulation here. I don't hear enough people screaming 'Mommy!'"
You know, mp, I've read you're stuff for months, long before I wrote in my first thread, and in all that time--out of all the prescient and useful things you've said--the one thing I never want to experience is meeting conjure in a dark alley.
If you want an idea of how bad this could be, it's time to look at peak to trough in 1929. We have already moved past most of the comparable episodes.
Methinks the patient is bleeding out
Keep your optimism (or realism or whatever): The dollar is sharply up. Carry trade unwind could be nearing bottom.
More positive music to help you through the "TED above 4.5" panic:
YouTube - Sube a nacer conmigo hermano - Los Jaivas en Machu Picchu (music starts at 01:30).
And remember that the correction in the US housing market could be over quite soon. Even CR says that.
Muir Woods is a fabulous place!
If you want an idea of how bad this could be, it's time to look at peak to trough in 1929.
If it's slightly worse this time, as some graph somewhere suggested, Dow is heading for 1,000. But that was followed by a quick upturn. And hyperinflation. And stupidity of another dimension in Europe. This time, capitalism, corporatism, communism and nazism aren't options, so we'll probably see... what do you suggest?
Even CR is wrong about the housing market, it has a long way to go still. The question isn't how low it's going to go in my mind, it's when the fast drop stops and when the "slow" inflation effect kicks in.
Foreclosures are going to prevent the sticky price points IMHO...
Even when the bank goes broke, you're still going to owe the mortgage to someone eventually.
I don't know why you always have to mention this cartoonist from Orange County.
so we'll probably see... what do you suggest?
In keeping with your attempt at optimism, I'm going to pass on trying to answer that one.
the guy in the cartoon is jumping for joy , right?
I found that cartoon to be in poor taste. There have already been some suicides.
Now, now. No one had better commit suicide over the economy or you'll get a terrible dressing down from Tanta.