Ugh. Wonder what happens at the Lehman credit pricing later this week. AIG's balance sheet could get even worse.

grab your ankles.....

I forgot......why are we doing this again?

Must be nice to be part of the privileged few who are incapable of failure.

Hmmm....

Just looked in my spam folder. I got two emails offering rate quotes from AIG American General

Wait.. it goes like this...

1.AIG makes bad investments
2. Company execs make millions
3. Stock gets wiped out
4.Company gets wiped out
5. Billions lost
6. Company and execs get 85 billion bailout
7. Execs and sales force go on $400,000 weekend retreat
8. Congress cries OUTRAGE!

1. We give them another 38 billion.

Only in America folks.

AIG's Toes: couldn't they have "modeled" this whole meltdown in secondlife and then go ahead with first life so we'd know how it all turns out and when?
Uncle Billy Vs. Mt. Pelerin | Homepage | 10.08.08 - 5:07 pm | #

GOOD QUESTION.

I really feel like throwing a short on GS tomorrow morning.

Naked of course.

Only in America folks.
Comrade Baron Von Helmut III | 10.08.08 - 5:07 pm | #

it's the old "they're the best in the world at what they do" syndrome.

also applies to NASA spacecraft navigation engineers

OK. I am clueless.

Is the USA papered with one BIG IOU at this time?

Cordially,

Elle

Fidelity MM FDRXX just went from 2.62 to 2.69

Where are they getting 38 billion in cash?

RT… News: Riots in Hong Kong after heavy stock losses

It says Thailand, not HK.

One night in Bangkok makes a hard man humble

Just watched the Paulson replay - the dude looks like a stuttering Elmer Fudd during the Q&A period.

"I..I..I..I.. we..we..we..we.."

Men's Warehouse warning was kinda stiff... guess the suits aren't moving.

Astonishing that S&P futures are down seven points after a six day tumble. The pressure is unrelenting.

EvilHenryPaulson writes:
I'm actually worried that there will be lynch mobs before the bear market hibernates.

Will Republicans do if we live too far from Wall Street

send fuld to hong kong.

"while providing enhanced credit protection to the New York Fed and U.S. taxpayers in the form of a security interest in these securities."

The US taxpayer if FU**ed. How much more of this crap are they going to keep spewing when nothing is farther from the damn truth?

UB,

That was nice! I have to work in the tard, but Ill play that all night!

Ellen Kimball writes:
OK. I am clueless.

Is the USA papered with one BIG IOU at this time?

Yes, since 1971, all of our dollars are IOU nothings, except an identical piece of IOU paper.

Dumbass plants!

The Butchart Gardens - Image Gallery

monta's ankle writes:
how can this company still be around, they should long since have begun massive liquidation of the their so called assets

One theory on the part AIG is playing, here .

I obviously know very little about economics, but something keeps bothering me fundamentally about this endless litany of actual and proposed interventions in our economy:

WHERE IS THE MONEY COMING FROM?

I mean, the US doesn't have access to an infinite amount of wealth, does it? It seems like every day I'm reading about some bailout measure costing several billion to hundreds of billions of dollars. Hasn't the total cost of everything implemented so far exceeded a few trillion dollars? And now they're talking about just buying out all the underwater mortgages? At what point is the United States of America a great, giant underwater mortgage? Who bails us out?

It seems to me like a bunch of people have finally acknowledged the existence of a hole, but have decided the real solution is to dig it all the way to China...

Paulson: We were told by AIG that the bailout money would be applied to investments in the United States and South America. We had no idea it would be spent on spa treatments.

AIG: This is simply a misunderstanding. Our proposal included a line item for "Brazillians."

rim shot

dazed and confused writes:
I obviously know very little about economics, but something keeps bothering me fundamentally about this endless litany of actual and proposed interventions in our economy:

WHERE IS THE MONEY COMING FROM?

The Federal Reserve can create as much money as it wants out of thin air - that's part of the unconstitutional fraud inherent in our 'fractional reserve' system since only Congress is supposed to be able to create money. This created money is backed by nothing but the good faith and credit of the U.S. since we were taken off the gold standard in 1971 by Nixon in order to cheat our way out of the debt owed on the Vietnam War. You can imagine what all this extra money being created to solve the crisis will do to the value of the USD.. Just have a look at Iceland if you want a preview of what the U.S. will look like perhaps as soon as early next year.

What does your average american with 100k sitting in money market funds do to avoid an icelandic dollar crash? The closest thing I can think of besides going to an exchange and buying paper yen is to invest in TIPS, so that whatever hyperinflationary insanity hits will be compensated, so long as it impacts the CPI

AIG's largest trading partner wasn't a nameless European bank. It was Goldman Sachs. ????

.

Is this the same AIG that just got caught spending $400K of their previous government bailout slush fund on hookers and manicures?

.

AIG's largest trading partner wasn't a nameless European bank. It was Goldman Sachs. ????
Comrade Anonymous | 10.08.08 - 5:53 pm | #

Would that be found in the list of major holders?

AIG: Major Holders for AMER INTL GROUP NEW - Yahoo! Finance

dazed and confused writes:

WHERE IS THE MONEY COMING FROM?

A newbie's introduction that should help answer that question:

YouTube - Money As Debt (1 of 5)

I am really and truly seeing a bottom in Miami

Too little, too late. Economy hasn't absorbed latest developments yet. More layoffs, losses, neg. GDP's will drive prices lower

all you guys have to do is follow "The Secret" and the markets will go up!!!! No really!!!! Hello!!!

Question is, what will the German middle class do when they find out their life savings have been wiped out, again?

Looks like AIG didn't relax enough. They want another resort event
AIG, Castigated for Resort Event, Plans Another One (Update2) - Bloomberg.com

Freakin making me fume! How can we take these guys to the trash?

Bond Girl...probably the USG is avoiding backing state and local debt because that is relatively transparent. We can look and see how much that truly would amount to. And that would lead to more panic. All of the private backstopping is relatively opaque, so it can be obfuscated.

About 50 AIG employees will also attend the Half Moon Bay meeting. Ashooh said he didn't know the cost of the event or how long it would last. Next week's meeting has more of an educational component than the St. Regis meeting, he said.

That's 500 toes.

MS,
What will happen this Friday? Swap settlement?

Dr. Doom, Coinz!--

Thanks. That's actually helpful. It seems a little dodgy to me to be creating money out of debt, but I guess that's just the mercantilist in me.

Is there a chance we might start just running the printing press a la Zimbabwe and Argentina?

Lets see.. $8.00 CAD for a beer in Iceland.. or $3.00 for one in Mexico.

Nope. Still not cheap enough.

Many 401k statements will remain unopened. Place them near the urn for Grandma's ashes.

Comrade Kristina,

"I used to have quite an array of silver coins passed down..I think I still have some, I just have to dig through my storage shed,"

Proactive security tip: make sure you are not followed home from dealers or transaction points.

A retired couple across the street from my parents were TWICE followed home, tied up and robbed. I guess they never expected this to happen and I don't know if they had firearms. This was 30 years ago.

Looking at Dow futures, it appears that we could open below 9000. Currently 9145 (as of 20 min ago), off 56.
Anoddamoose | 10.08.08 - 6:27 pm | #

Ah, Paris!

I think a cottage industry of making solar panels for electricity could be very lucrative - except for the acquisition of the semi conductor elements - now THOSE might be worth their weight in gold (solar cell elements). The collectors and mounts could be made in a garage.

Re: FYI: Fat people can be harvested as fuel for lamps, stoves, etc. I built a portable stove out of cans that can boil water in three minutes using only a quarter cup of belly fat.

CSC: Wow, I just saw one that washed up the beach, I wish I had known this earlier!

I'll post why we very likely formed a key reversal low today w/ illustration from the NAZ later this evening. Still long and strong: SPY $100.05, QQQQ $33.06

"Whatever, this is a form vs. substance question. MOST buyers of protection were not actually insuring bonds, so I would personally argue it wasn't insurance. No, it was betting. And if you were betting with somebody who didn't have the cash to pay you if you won the bet, well, I stick with my statement that they buyer is stupid.

And these buyers are sophisticated. You can't trade CDS without an ISDA. It's very hard to have an ISDA. So they should have known better. Unfortunately having lots of stupid buyers does add up to bad systemic affects for all of us."

When you allow a 64T dollar unregulated, non-transparent exchange with no requirement for reserves someone ALWAYS screws up and J6P ALWAYS pays.

"The event, at the Ritz-Carlton in California's Half Moon Bay, aims to ``motivate and educate'' about 150 independent agents who sell AIG coverage to high-end clients."

150 independent agents + 50 AIG emplyees = 2000 toes plus or minus

(1 of every 500 live births have Polydactyly - extra fingers or toes)

I concur!

Stock Futures on Bloomberg 

FT.com / Global Economy - Opec members seek emergency meeting

Opec members seek emergency meeting

By Carola Hoyos in London

Published: October 8 2008 17:48 | Last updated: October 8 2008 17:48

Almost half the members of the Opec oil cartel are considering an emergency meeting in Vienna next month as oil prices dropped to their lowest level in nearly a year.

Almost half the members of cartel have in the past few days called on the group to act to halt the slide before their next official meeting scheduled to take place in Algeria in late December.

Iran, Libya, Nigeria, Iraq, Venezuela and Ecuador, whose economies tend to be most dependent on high oil prices and whose ministers are among the most hawkish of the 13-member group, have all lobbied for the cartel to drop output.

Their calls came as oil consuming nations moved to bolster their economies in a co-ordinated interest rate cut.

Oil prices on Wednesday resumed their slide towards $85 a barrel, a level last reached in December last year.

can't keep up with all the comments

don't know if you have already caught this one, especially members of the Bill Gross Fan Club:

Fed Eyes Pimco to Manage New Facility

AIG, for your consideration:

Happy Toes Pedicure/Voetverzorging

T. 078-6822316
F. -
Boskamp 71, 3343EC, Hendrik-Ido-Ambacht, Zuid-Holland, NL

You have to hand it to the AIG execs though. I would not have the guts to blow a bunch of coin on spa treatments after getting bailout by the government. I think I would actually stop to think about how that would look. But it goes to show you, once you are classified as TBTF, you can literally do whatever the hell you want. What are they going to do, take your money away?

Yes, like Soviet leaders of old whooping it up, our oligarchs know there's nothing the peons can do about it. There's no political recourse. There's no threat of insurrection. Put yourself in their Berlutis for a sec. When you've just had the Democrats doing a lapdance for you, with Pimp Daddy Bush nodding from the corner, the idea of blowing some taxpaya moolah in grand stinking fashion must seem irresistible. Time to ride that bitch!

A French War Hero
NAVSPECWARCOM | 10.08.08 - 6:59 pm | #

Favorite French War movie: Paths of Glory

I'm sorry to repost some of this, but the whole letter is really worth seeing and sharing IMHO:

ate: March 10, 1933

To: President Franklin Roosevelt

From: President's Economic Council

Re: Overproduction of Goods, Unequal Distribution of Wealth, High Unemployment, and Massive Poverty
Dear Mr. President,
In order to help you make recommendations to Congress as to possible solutions that could be taken to solve the current economic crisis we have collected data on several factors that may have contributed to the economic collapse. This letter will provide you with information over the overproduction of goods, unequal distribution of wealth, high unemployment, and massive poverty and it is our hope that you will be able to use the information to develop programs that will assist the citizens on the United States of America.
The economy is producing more goods than can be purchased and consumed. The consequences of this economic trend are evident in this evidence gathered by our committee during recent research.

Automobile production has been reduced from 411,000 cars a month in 1929 to just 89,000 a month in 1932. The average American no longer makes enough money to buy a new car.
1 billion barrels of oil were produced in 1929. This year oil refineries will produce only 800,000 barrels.
Farm production outpaced demand to such a high degree that the price of wheat dropped from $1.37 to 61 cents a bushel in 1930. Prices are presently so low that wheat farmers are now losing $1.50 on every acre they plant. Some farmers are destroying agricultural goods to try to raise prices by reducing supply.
Contracts for building new homes and apartments are down 80 percent since 1929. At the same time, several million Americans have become homeless because they cannot afford housing.

One reason consumers lack purchasing power is the unequal distribution of wealth. Indicators of the concentration of wealth are apparent in this evidence gathered.

1 percent of the population has 59 percent of the national wealth. 33 percent of the national wealth is held by 12 percent of the population. 87 percent of the people own just 8 percent of the national wealth.
92 percent of all American families have incomes of $2,500 or less. 36,000 families share $9.8 billion a year: $2.5 million per fami8ly or a thousand times as much as the other 92 percent.
The wealthy tend to spend money on luxury items rather than basic necessities. The general lack of wealth in the population accounts for the low sales of automobiles, vacuum cleaners, refrigerators, and other durable consumer goods.
The huge oversupply of workers has encouraged employers to cut wages. Workers' wages have dropped by 40 percent since 1929. Women working in Brooklyn's clothing industry are paid $2.39 for a 50-hour week. Union miners in Pennsylvania, West Virginia, and Kentucky make $10.88 a week.
One man, Samuel Insull of Chicago, sits on the board of directors for 150 different companies with a combined 50,000 employees and 3,250,000 customers. On New Year's Day in 1932 the value of the securities for these companies was $3 billion. Insull is protected day and night by 36 bodyguards.

The unemployment rate has been growing since 1929 when the stock market crashed. The unemployment rate has now reached extraordinary levels. The nature of the problem is apparent in this evidence.

In 1920 only 49 businesses per 10,000 failed. In 1932 the business failure rate reached 155 per 10,000.
Corporate profits have dropped from $10 billion three years ago to just $1billion in 1932.
As corporate profits have fallen and businesses failed, companies have laid off workers. Today the unemployment rate stands at an all-time high of 23.5 percent; nearly one of every four workers is unemployed.
13 million people are out of work. Millions of others have had their hours severely cut.
In Lowell, Massachusetts, once the center of the American textile industry, the unemployment rate is 90 percent. In Akron, Ohio, the unemployment rate is 60 percent; in Cleveland, Ohio, 50 percent; in Toledo, Ohio, 80 percent. There are 1 million workers without jobs in New York City. Every week another 100,000 workers across the country lose their jobs.
One Arkansas man walked 900 miles looking for work.
A Manhattan employment agency advertised fro 300 jobs; 5,000 people applied.

Americans throughout the nation are suffering from economic hardship and the lack of basic necessities. The difficulties they face are apparent in the evidence gathered:

Over 60 percent of Americans are now categorized as poor by the federal government.
Nine million savings accounts have been wiped out since 1930. With thousands of banks failing and closing their doors, hard-working, honest people have lost their financial safety nets.
273,000 families have been evicted from their homes in 1932.
There are two million homeless people migrating around the country. They include farmers forced off their land because of the severe drought and low prices for agricultural good, men unable to find jobs in industries, and women with young children in search of food and shelter.
New York social workers report that one fourth of all schoolchildren are malnourished. In the mining counties of West Virginia, Illinois, Kentucky, and Pennsylvania, the proportion of malnourished children may be as high as 90 percent.
A Kentucky miner says that some people in his state have been surviving on wild greens such as violet tops, wild onions, and forget-me-not wild lettuce.

Wow!

Wisdomseeker, I've dubbed the whole Bernanke/Paulson scheme the Federal Emergency Credit Extension System or FECES.

Nice one, Unit472.

AIG's toes | 10.08.08 - 7:07 pm |

Dude....that was rad. Thanks.

Also will we see Dow 5,000 before Election Day?
John S | 10.08.08 - 5:35 pm | #

No, inuguration day perhaps. We will have a decesed feline rebound in here soon, prehaps 500 points or so, but it will not be the bottom. Need a long grind down to totally demoralize everone. That will start after said bounce.

In 1920 only 49 businesses per 10,000 failed. In 1932 the business failure rate reached 155 per 10,000.

Honestly that's not nearly as bad as I would have thought for the worst year of the Great Depression.

I would have expected something on the order of 10x that number.

Washington gobbles up Wall Street with taxpayer money,as Iceland finds IT ate something it shouldn't have.

@Unit472: FIGs for FECES... sigh.

@NC: Everybody is an idiot. People –if they cared- should have been organizing huge PR campaigns last year.

I hear you, and some were, especially over on Ticker Forum. But the wise seers tended to be too far "out there" to pick up mainstream attention until recently. Too many people's livelihoods depended upon not seeing the obvious.

The non-protesting, unhappy majority seem to be trying to just hang onto their jobs. But they are waking up, and the social networks of future protest are forming. The outpouring of opposition which initially stopped Paulson's $700B blank check was the first time the popular voice rose above the cries of the whining bankers. So the people are just now waking up. As always with Democracies in crisis, the public reaction comes late, but it will be very strong.

The elections may be a tipping point. If there is not an obvious "regime change" (not just changes in personnel, but meaningful changes in policy), the pain will reach enough people that there will be mass protests. How soon? Perhaps sometime next year? In the meantime much damage will be done...

Financial Crisis: Iceland's banking meltdown threatens British jobs - Telegraph

Hundreds of British jobs are under threat after the Kaupthing, Singer and Friedlander, the UK division of Iceland's largest bank, was put into administration.

The UK Treasury said the action had been taken to protect the retail deposits in the Kaupthing unit, after the Financial Services Authority determined it was unlikely to be able to meet its obligations to depositors. Icelandic Prime Minister Geir Haarde last night refused to rule out the seizure of Kaupthing, saying it was "unlikely" but possible. This would put almost the entire Icelandic banking system under state control.

The collapse of Kaupthing Singer and Friedlander puts the jobs of 770 workers in the City, the Isle of Man, Surrey, Glasgow and Birmingham at risk, unless administrators can find a buyer.

[...]

Iceland yesterday sent a delegation to its "new friend" Russia to negotiate a £3bn capital injection.

HANG SENG futures @ -1,432.00

I think this is on topic:

Ruedi Rymann, Swiss Yodeling Star, Dies at 75

His recording of a traditional folk song, “Dr Schacher Seppli,” became a fixture on Swiss request radio.

The song is a melodic lament by a poor wanderer, the title character, whose name roughly translates as Joe Schacher, about the unfairness of life and the rewards awaiting him in heaven. The lyrics go, in part:

The world is a turbulent place.

I’ve observed it many times:

People hurt each other just because of that damned money.

How beautiful it could be down here.

The bird on the tree sings,

“Look at your land, isn’t Switzerland a dream?”

"Wow. Just wow! As I said WTF is going on this country?"

Gotta admit, I was astonished by this as well. Iceland is not only a NATO member it does have strategic importance...and it is close to those oil reserves in the Arctic that the Russians are so interested in...
Wonder if the Poles noticed Iceland being thrown under the bus?

Re... Great Depression references.

I found this piece from a William & Mary history professor in a link off a link off a link. He says the Great Depression is a terrible model for what we're seeing today; that a better one is the Panic of 1873.

The Chronicle of Higher Education: Page not found 

A couple of days after reading this, the parallels and outcomes are still sloshing uncomfortably around in my head.

Enjoy.