Anyone else have fond memories of Bear Stearns' failed Everquest IPO? Just a gentle reminder: the purpose of the IPO was to move the toxic waste off BS' books. The same toxic waste that the treasury will now be buying using the taxpayer "bailout" money.
And the SEC was also responsible for allowing the relaxation of leverage limits at investment banks. Of all the organisations that should not be dirty, this is one. Bankers can't help being greedy and taking shortcuts. But the SEC? Don't they have a sort of taking away the punchbowl type role like the Fed. Yet I think when the investigations are all done they will prove to have been as complicit as the rating agencies and mortgage brokers.
Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency's Division of Trading and Markets that oversees investment banks.
godhatesfangs writes:
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
godhatesfangs | 10.07.08 - 11:47 am | #
The televangelists shear their flocks, Wall Street shears us all.
It is not surprising that these guys were asleep at the switch. Just like they are now.
I am sure that Treasury and Fed are discussing their options with market participants in order to determine the "best" route.
Is it any surprise that the market made such a huge move up yesterday? Will the SEC investigate whether any priveleged, material, insider information was readily available and used? I highly doubt it.
Well, TED scaled the heights of panic and insanity; it can only come down now, especially since the Fed seems to be looking at real solutions (CP funding facility) instead of gimmicks to please the markets (a rate cut).
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
Grassley's taking the mantle of new populism, think the modern day Teddy Roosevelt. As you mention, the evangelists and now the SEC. But for the past year, he's been going hard after health care (as opposed to health care financing) reform, tackling Big Pharma and Medicare abuses.
Uncle Billy Vs. Mt. Pelerin writes:
Kona-cookie: well this all begins and ends with people, their motivations, relationships, desires, and fears, so I try to focus on the major strategists and their tools. The fulds and mozilos are tools.
Uncle Billy Vs. Mt. Pelerin | Homepage | 10.07.08 - 3:19 am | #
The primary job of Crooks' agents (political gangsters, SEC, FED, most econ-meisters, etc. etc.) are there to serve Crooks' interest and they did one hell of a job during 2002-07Q2. We get daily confirmations of:
A system of the Crooks, by the Crooks, and for the Crooks.
As I've said before, this whole mess proves that there is indeed honor among thieves. These guys have gone to any length to protect each other and the cash cow they were sucking at the teat of.....
godhatesfangs writes:
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
godhatesfangs | 10.07.08 - 11:47 am | #
Grassley is pretty good as far as 'conservatives' go - his only blatant flaw is his complete loyalty to 'big agriculture' and ethanol. If it wasn't Bear but rather ADM or Cargill under scrutiny & 'covered up' instead - he'd be applauding Cox for 'protecting' Middle America...
I see this more as 'better your ox gored than mine'...
We're not going to sell into a bad market when we don't have to,'' said [Massachusetts] state Treasurer Timothy Cahill in a statement this morning.The state's cash position is solid. We will be patient and seek this additional liquidity when we have more confidence that we will get the best price for taxpayers.''
Borrowers believe rates will drop from the real spot prices (which are far above the quotes). Lenders aren't will to take risks below those prices. Deadlock.
The problem is that most of the markets are expecting drops in interest rates that aren't going to happen. Governments simply can't supply enough credit to make the markets clear at the rates implicitly set up by a 2% FF rate. The markets will stay locked up until the market accepts the reality that we're not going to have 3% short-term commercial rates. The Fed can accelerate that process by acknowledging it can't keep the rates that low. Otherwise the markets will eventually give up on the Fed's pronouncements and rates will climb up to clear the markets. That will mean the market has concluded the Fed has lost control, though, and will involve a large loss of confidence.
Local county government hiring for land aquisition position....Any guesses as to why they would be hiring? Answer: Land, easements, and so forth can be bought cheap in this market. Government at work....If they can't tax it from you..they WILL screw you and take it for pennies on the dollar anyway.
Anybody have a DeLorean so that we can go 6 months into the future and read now about all the rules and regulations that the FED is ignoring?
Of course, everybody has to take a position. I'll bring up the first issue:
Should capital reserves be raised, lowered, or remain the same. No fair to say they should be lowered for your friends and raised for the companies you plan to short on Thursday.
all the blogs, cnbc, bloomberg are still ignoring the historic AIG hearings in the house, currently on cspan. i posted about it this morn, been watching on one video.
OT (sorry)- It looks like the first losses on savings accounts from a bank default are being reported in Britian. Iceland's Landsbanki has failed and savers on its internet brand Icesave will lose some savings
The internet bank Icesave has suspended all deposits and withdrawals from customers' accounts after the Icelandic authorities stepped in to rescue its parent company Landsbanki.
Landsbanki's other UK operation Heritable Bank has also stopped savers making withdrawals and is no longer offering mortgages.
Between them the two brands have more than 300,000 customers in the UK, with Icesave winning savers with its high interest rates on savings accounts and Isas.
Today a statement on its website said: "We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly."
[clip]
The 100% guarantee does not extend to UK savers, who would have to apply for compensation both in Iceland and the UK, and would only be able to recover up to £50,000.
The first 20,000 (£16,264) they hold is protected under the Icelandic government's scheme, and the remainder up to £50,000 by the UK Financial Services Compensation Scheme (FCSC).
A spokesman for Landsbanki said 95% of Icesave's customers had deposited less than £50,000, so would be fully protected by the FCSC.
At the start of 2008, Heritable had around £900m on deposit from UK savers.
The law of unintended consequences is nearing. Fed hasn;t chosen any path. Their actions are purely reactionary and arguing otherwise is to employ blinders. Inflation marks higher rates, fdeflation marks insolvency. Fed would have you belive there is a middle path, but thetre is not. This whole mem the rest of the world is worse off than US hence the dollar is steong is laughable. When do the germans break out - I'll take the Bundesbank and german Engineering over GS and Bernanke everyday of the week.
When does the rest of the world simply tell the United States we are going to take our medicine and so are you
Study: $25 billion in auto loans past due
Nearly $25 billion worth of consumer auto loans are delinquent, a new study reports. In the second quarter of 2008, Experian Automotive says, 2.48 percent of all auto loans were 30 days past due, compared with 2.28 percent in the year-ago quarter. Auto loans that were 60 days past due in the second quarter rose to 0.75 percent from 0.67 percent in the second quarter of 2007, Experian says. In the past two years, consumer credit has tightened. In the second quarter of 2008, Experian reports, auto loans made to consumers with good credit -- those with credit scores of at least 680 on a scale of 300 to 850 -- accounted for 56.5 percent of outstanding auto loans. That's down from 61.1 percent of outstanding loans in the second quarter of 2006.
The disconnect is passing bailout after bailout before having hearings like this. These guys are looking for somebody to beat up so they look tough in front of the cameras.
Newsflash for Congress: The bad guys won. The money is gone. You could have stopped it, but you chose not to. Now it's too late. Any sense of outrage you feel now is a waste of energy.
Short-term treasury rates are up almost half a point today. That means either the crunch is fading and people are taking a little risk again (good), or that the Fed has dumped out so many treasuries the market is finally getting satisfied (bad). Not sure which.
Yiske and his band of klezmer musicians must find a groom to participate in a very unconventional wedding. An unusual folktale based on the old European Jewish custom of holding a wedding in a cemetery to ward off a cholera epidemic. Join Yiske and his clever horse Fairdy in this ghoulishly delightful tale."
Let's conduct all future M&A, private/private or public/private, in a cemetary!
Chris Cox has even more than dirty hands (he used them to wipe the asses of most of wall street).
He's a genuine-article reaganomics (voodoo economics!) nutjob.
I'm thinking we need a new category of regulatory bodies: those that are not appointed by the Preznit. I don't know the alternative appointment mechanism that would work, but I do know that seeding the federal agencies with ideologues that rotated from the private sector (including lobbyists) and are more interested in protecting that sector than regulating in the public interest is a very bad idea. BushCo has poisoned the agency wells and it would take a witchhunt to root them all out. They even populated the civil service (contrary to law) with their fifth column.
Maybe we should just fire everyone above about GS-11 and start over.
"or that the Fed has dumped out so many treasuries the market is finally getting satisfied (bad)"
I'll take that one......the markets priced ANY risk out of it in late '06. Can't imagine that has changed with one little alphabet soup auction facility...
FDIC: Board Meetings
FDIC Board Meetings
Location
Board Room on the sixth floor of the FDIC Building located at 550 - 17th Street, N.W., Washington, D.C.
Date
October 7, 2008
Description
Pursuant to the provisions of the Government in the Sunshine Act (5 U.S.C. 552b), notice is hereby given that the Federal Deposit Insurance Corporations Board of Directors will meet in open session at 10:00 a.m. on Tuesday, October 7, 2008, to consider the following matters:
Summary Agenda: No substantive discussion of the following items is anticipated. These matters will be resolved with a single vote unless a member of the Board of Directors requests that an item be moved to the discussion agenda.
Disposition of minutes of previous Board of Directors meetings.
Memorandum and resolution re: Proposed FDIC Strategic Plan, 2008-2013.
Memorandum - PDF and resolution re: Interagency Notice of Proposed Rulemaking on Capital Treatment of Certain
Claims on or Guaranteed by, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) - PDF. 1
Discussion Agenda:
Memorandum - PDF and resolution re: Restoration Plan, Notice of Proposed Rulemaking on Risk-Based Assessments,
and Designated Reserve Ratio for 2009 - PDF. (657k) 1
Raising the FDIC coverage to $250k actually makes sense. I fully expect the net cost to the FDIC to be neutral or even profitable. For one thing it will slow the shuffle to safety and still pursing yield transaction that are sloshing around the vaults. Besides the $100k is what, 25 years old?
Oops, the Guardian just corrected their story on Icesave, and it is much worse than originally thought:
More than 300,000 Britons are thought to have had their cash in the bank's UK savings arm Icesave.
Most thought they would have up to £50,000 of their savings covered by the Financial Services Compensation Scheme (FSCS) in the event the bank failed.
However, since Landsbanki went into receivership this morning it has emerged that the compensation scheme was not quite as originally billed.
The UK's FSCS confirmed today that it is only responsible for "top-up" payouts to customers of Icesave.
It said this afternoon it was only gearing up to cover amounts over and above the 20,000 (£16,264) protected by the Icelandic government's deposit protection scheme.
This means that if the Icelandic government was unable to meet its obligations to UK savers they would only get back any holdings between 20,000 and £50,000; those savers with less than 20,000 would receive nothing.
Some UK savers are understood to have had as much as £300,000 in their Icesave accounts, and the bank is thought to have a large number of tax-free Isa customers.
Advised a client with a pick a pay mtg. Claims he didn't understand about the principal balance going up.
Didn't pay his taxes either, claims he didn't understand that the payment didn't include taxes, because his previous mtg did. Has a master's degree in Psych.
I told him he was 50k underwater, but I really think it's more than 2ce that.
I had a U of Chi prof in law school whose mantra it was that the regulated always capture the regulator. True, but not an excuse for not having some checks & balances for not at least slowing the process down.
I do think that Bush could have corrupted pretty much everything.
And, didn't I say that if commercial paper was the prob, that's what they should try to solve. Gosh, if they spent the money on CP, maybe they won't spent it on toxic waste, and the taxpayers will actually get the money?
Jaysus F Krist-- is anybody watching the c-span AIG hearings?
According to the SEC former chief accountant, one Lynn Turner 1998-2001-- the SEC "gutted" 149 positions in enforcement & risk management, with the result that there was one person in charge of CDS's-- valued at 62 trillion dollars--------------
Also, didn't catch the guy's name, but some fatcat at AIG-- the guy who ran the infamous London office, got fired, then 2 days later, got $35 mil in severance pay, and is currently, get this-- now under a ONE Million per month contract as a "consultant" to help clean up the mess.
Pope Benedict has passed his own judgement on the economic crisis ....
"Whoever builds his life on this reality, on material things, on success ... builds (his house) on sand...." ... he said yesterday, according to Reuters.
The pontiff added: ''We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. ..."
...
The pope's comments echoed views expressed by two of the Church of England's most senior clerics last month.
Dr Rowan Williams, the Archbishop of Canterbury, wrote in the Spectator, that "unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders".
Williams added that Karl Marx had been right in his assessment of the nature of capitalism "if about little else".
The Archbishop of York, Dr John Sentamu, said the market took its rules of trade "from Alice in Wonderland" and branded speculators who had short-sold shares "bank robbers and asset strippers".
I suppose they're right, really.
The whole scramble we're seeing now is the last days of the huge Ponzi scheme. Gone, all gone.
Also, didn't catch the guy's name, but some fatcat at AIG-- the guy who ran the infamous London office, got fired, then 2 days later, got $35 mil in severance pay, and is currently, get this-- now under a ONE Million per month contract as a "consultant" to help clean up the mess.
OT: Here's how you lose 1.2% on a "safe" 401(k) bond fund....
"The Core Bond Index Fund seeks current income and growth of capital by investing in U.S. government and corporate investment-grade obligations. The goal is to provide a portfolio that approximates the investment characteristics and performance of the Lehman Brothers Government/Corporate Index. "
Can I ask about the Fed lending directly to consumers yet or does it still sound crazy?
When you have no job, no money, and no place to go, you won't be laughing when you get your first 'Fed-it!' card in the mail.
Currently Smoking Cannabis | Homepage | 10.07.08 - 12:26 pm
Still crazy talk... I'm guessing we're going to get our cut from the Treasury in a holiday stimulus check.
I've been a Bear since '99. Last night brought the first internal stirring of the worm turning. Not that I'm turning Bull, but that delta functions of price and time are changing the landscape. Cramer's capitulation yesterday is an ingredient.
Friends who always rolled their eyes at me in the past are calling me to incorrectly tell me when the DOW was last at 10K, and the meaning of "frozen" credit.
Sunshine is not coming out my ass but I can at least see a setup for personally feeling more hopeful in the future. I can't wait until everybody is morose and fed up and not wanting to talk about the markets. If we somehow avoid violent nationalist fascism (put the odds at 50-50) after we hit bottom, my friends are going to roll their eyes at me for being an optimist!
Stock experts are looking at the day to day financial issues:
"is this the bottom?"
"is it time to buy stocks?"
They are totally missing the BIG PICTURE.
If, in a "panic" you sold at the very bottom of the 1997 LTCM crash and went treasuries you'd be up 50% over anyone who bought and held stocks for the "long term." Including 1.8% dividends we are EXACTLY where we were at the bottom of that day when the S&P 500 hit 957. The S&P would have to be in the 1500's to just keep up with cash over the last decade.
That is if you went "all in" on that day and didn't dollar-cost-average into stocks through two huge above trend stock bubbles, which means ALL long term steady stock buyers have LOST money...actually lost literal dollars...that isn't even including the opportunity loss as compared to treasuries.
One of the greatest stock investors of all time, Bill Miller, is essentially dead money over the last decade and lost money for anyone steadily buying into his fund.
Those prudent retirees who went to their money managers a decade ago and funded their retirment based upon an expected conservative 7% return for stocks is way way way behind and underfunded for retirement.
Why is it any different today? Why would selling today and moving to cash be a long term bad move? Especially when we have what never existed before..a generation of steady stock buying baby boomers needed to liquidate.
From 1980-1999 we moved from 50% to 84% of households owning stocks directly or indirectly....That is a 60% increase. We can only mathmatically increase 25% to get to 100%! Price is supply and demand. Demand is tapped out and equalized. Boomers bought when no one was retiring and selling...now it's different.
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
ext week hearings on Rating agencies, hedge funds, etc.
gosh, lots of data without enforcement and regulation. i now feel we have credible and strong government, free market and free press. must transfer all my glod to Tbills.
it's like a mini keating 5 in the s and l crisis but on a world scale. weeee!
"unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders".
Ahh! Religious recognition of our casino eCONomy.
Go to any casino and behold the likeness or our phony economy. Lots of money changes hands in a casino, the house (bankers) takes a cut of course, but no wealth is produced.
In a sense our eCONomy is worse than an actual casino. At least the casinos don't produce the inflation which makes the majority poorer.
Chris Shays (R) is calling for more hearings, specifically to drag the Fannie/Freddie CEO's on the carpet-- Chair Waxman (D) is waffling about 'scheduling difficulties' given the format of these 6 hearings)
OK-- that panel's over
Right noew, they're hauling in AIG's last 2 CEO's--
& Waxman just had "Rusty the bailiff' haul off some woman in the audience who was holding up some type of protest sign-----
"When does the rest of the world simply tell the United States we are going to take our medicine and so are you"
Seems to me that the billionaire, Bear Stearns, AIG, commercial paper bailouts along with all the alphabet soup window lending should sort of count as medicine. Not to mention 4 million foreclosures, 1.1 million bankruptcies, nearly 10 million unemployed.
I don't see that anybody's being spared in this debacle - except maybe the insatiable greedy incompetents who caused it.
I called dow 10k and sold at pretty much the top--about 75% of what I owned anyway; have only lost a couple thou; am perfectly willing to concede that dow 9k is about right, or even 8.5, since I didn't buy back in at 10k.
Haven't even starting shopping yet, except it is going to be stuff like toilet paper companies and Campbell's soup. And yes perhaps, gun and ammo companies, if any of them are public? And booze companies. Alas, Bacardi is hopelessly private.
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
The trend is no longer a stock investors friend.
Also, absent the numerous government sponsored market bailouts over the last 100 years, it's not clear to me that stocks would have been the best long term investment.
You can't look at numbers in isolation. You need to consider history as a context.
"I am waiting for some MACRO discussion as to why stocks outperfrom."
They don't, as a whole, if you eliminate survivor bias. The whole macro point is that you have to be in the right stocks for any period. You can pretty easily make 10%+ in stocks in normal years, but not by buying the S&P 500. You have to find a macro theme and be right more than wrong.
"You and Spock get up here. Sulu, prepare for warp maneuvers. Aye, sir. Chekov, arm photon torpedoes. Photon torpedoes ready. Warp power to the shields, ..."
lawyerliz writes:
I called dow 10k and sold at pretty much the top--about 75% of what I owned anyway; have only lost a couple thou; am perfectly willing to concede that dow 9k is about right, or even 8.5, since I didn't buy back in at 10k.
there is quite a bit down yet, we'll have a bounce up this year. keep your powder dry and in some useful format.
What is the advantage of a slow collapse vs. a fast one?
In a slow collapse the markets keep working on the way down. In a fast collapse things pretty much stop on the way down and much of the world stops working, even parts that should keep going. So a fast collapse wastes by shutting things down unnecessarily.
A slow collapse wastes by taking longer to confront reality and start adjustments and corrections.
Just because America will continue to grow and innovate doesn't translate into higher stock prices.
When a 158 year old company like Lehman can go to zero are any stocks a good investment?
Look at GM stock. Inflation adjusted it's worth pennies. Anyone who told you that we would move from a one car family to a three car family world and we have millions of miles of multi-lane freeways and cars would be ubiquitous, you'd think....well then buy car-maker stocks you can't lose.
Look at the big three car makers historical charts.
Stocks have prove to be a bad long term investment.
I wouldn't call 20 to 1 and 30 to 1 leverage excessively risky- it's flat out robbery. They made the most money in CDS agreements for the riskiest assets that they agreed to insure. They had a way to assess risk, and they made the most on the riskiest assets. Why didn't they ask this question? "Did you make more money on risky assets? If so, how did you assess risk?"
It's 2008. The peak was at the end of 2005. We have 3 more years to go before all of the riskiest interest only 5/1 ARMs reset.
oops writes:
The pontiff added: ''We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. ..."
Sounds like the Holy Father is a little cranky about the haircut that the Vatican treasury is undoubtedly getting on their extensive bonds & equities portfolio.
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
Japan is only proof that stocks IN AGGREGATE don't over-perform bonds IN AGGREGATE EVERYWHERE and on ALL TIME HORIZONS. Picking one case (say the biggest bull run in equities ever - USA 1982 to 2000? or Japan 1989-NOW?) proves only two cases - two anecdotal data points. There are plenty of other data points in between these two extremes...
I think trying to make a blanket rule either way is a bit of a fools errand.
Corey writes:
oops writes:
The pontiff added: ''We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. ..."
Sounds like the Holy Father is a little cranky about the haircut that the Vatican treasury is undoubtedly getting on their extensive bonds & equities portfolio.
Don't think for one second these assclowns in CONgress aren't aware we are 700+ point lower after they rammed the bailout bill up our collective asses.
It's survival mode for them. Whatever it takes to get them re-elected.
The housing collapse is a slow collapse. Housing is inherently illiquid- so pumping in money will not help "liquidity", when the losses are tied to illiquid assets. The stock market reacts to the pressure like an earthquake, so it's also going down slow, but in big jumps with aftershocks. Nature repeats itself.
Friends: I have had a vision. The CRVIX will meet and surpass the DJIA sometime before Valentine's Day. I see them meeting at something beginning with a 6, though it may be a 5...that part is hazy.
Yeah, if the pope and other religious leaders really meant that stuff, they would have sold their art collection years ago and given it to the poor.
The pope lives, perhaps perforce, a very expensive lifestyle. Cardinals are called "Princes of the Church" in the olde timey despotic sense. When they're not calling themselves the servants of the servants of god.
You can't look at numbers in isolation. You need to consider history as a context.
I wholeheartedly agree. What were the causes for the huge run-ups in equities during the 1980s and 1990s?
Lots of capital flooding the markets as individual investment became easier (e.g. 401(k), IRAs, etc.)
Baby boomer savings glut
Flow of foreign capital especially those non-functional capital markets.
Unprecedented LBO activity
You really can't blame Chris Cox for being so useless, and I kinda feel bad for him. He thought he was going to be the head of the South Eastern Conference and would get Presidential Suite tickets to all the great football games, not be a Wall Street watchdog.
"I think trying to make a blanket rule either way is a bit of a fools errand."
I am not saying you can't make money on stocks.
Just like it would be stupid to say you can't make money gambling.
(Your example of 1982 to 2000 is a great example of what can never happen again by the way...you had the invention of 401k's, 457's, roth's, etc creating a generation of steady buyers who parent's didn't spend a lifetime accumulating. It's different now...as noted we moved up 60% in stock ownership in this country. Growth like that is mathematically impossible going forward).
Long term stocks as a whole can't go up faster than the economy as a whole. No investment can. This is just basic math; otherwise eventually the value of stocks will exceed the value of all assets on the planet and that's nonsensical.
People who believed in the perpetual 7-10% increases were simply sold a bill of goods. Actually long-term stock prices are much like house prices - the good returns in the US since the Great Depression have been a historical anomaly and have not in general been true in other times and other places.
alright now, as a catholic I resent where this thread is headed. if you wanna bash baptist, methodist...heck, throw in islam and judaism too...then I'm all for it. But leave the Pope alone!!!!!
When the dollar starts to tank, the safe haven will be the stock market - solid companies that make things - J&J, P&G.
Yeah - but preferably companies with better cash/debt rations, and trading closer to book value. I wish PG were trading on fundamentals that Graham would have liked... and perhaps one day it will.
Joseph Anthony Cafasso, Jr. (born August 2, 1956) is a former Fox News consultant on military and counterterrorism issues who left the network after allegations surfaced that he misrepresented his military record.
So a fast collapse wastes by shutting things down unnecessarily.
A slow collapse wastes by taking longer to confront reality and start adjustments and corrections.
I can handle either. What I can't handle is that the first people on the life boats were some of the most reckless actors - MS, GS.
Seriously. GS was a private partnership less than 10 years ago. The world would be better off without GS. They clearly bought influence to save themselves. That kind of insider dealing and discrimination will wreck a faith based system far more than any price changes will.
Once you bail out the wealthy, there is no end to the line of free loaders.
We've destroyed faith in the system and created a monster.
Hey, are we boomers supposed to be profligate wastrels or oversavers? Make up your minds.
The mkt isn't quite a casino. It's crooked etc,for us dopes, but if you have good sense and a bit of luck you can beat the house. Like card counting. . .
Damn I feel like Jas for making this comment but here goes...does anyone find it interesting that one of the lead securities shareholders plaintiffs in America (Bill Lerach) and some of his cronies were recently disgraced/indited for paying off lead plaintiffs so that their firm would get class action shareholder cases. I got to believe that stuff happens all the time, but Lerach (at least according to his own self serving comments: Bill Lerach Essay - Executives - Portfolio.com was targeted and taken down cause he was beating the hell out of thieves and crooks. He was basically using the SEC's civic remedies to do the SEC's job (which now we know they weren't). Please note my comment on this story does not mean I don't think Lerach wasn't a crook in his own right.
Spitzer took a glorious fall from power as well after inflicting a little pain on a few of the high flying mobsters (cough* AIG*cough)
The Mark-to-Market propaganda is just admitting that the underlying assets are WORTHLESS. Of course, if they redefine Mark-to-Market to track the assets more closely, it will help on paper, but it does nothing to improve the price of the assets which are tied to the deflating housing bubble. We need fewer economists and more engineers to study these problems, because they are too complicated for economists and too easy for engineers.
I am a dumb, fallen catholic who thinks all organized religion is a way to control the masses. The pope has just been more sucessful than most.
It's ok, swarming masses, money does not mean anything. You must repent and go without! That's right! And don't forget to give on Sunday! We need the $ to pay off lawsuits!
KO: They wanted Spitzer out, because they saw that he was going to expose all of them at investment banks for what they are...criminals. He boinked a smoking hot call girl, but that would have gone unnoticed were it not for his extraordinary ability to prosecute Corporate America, and he was in the process of taking it all down.
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
The argument as to why stocks outperform is because during most times when investors are being rational they demand a higher risk premium vs. streams of income than other types of investment.
I.E. the appearance of outperforming long-term is created by investors demanding higher returns in compensation for the short-term risks.
It's like asking why do junk bonds yield more than treasuries.
I don't know if it's a macro argument.
People tend to pay a premium for stability because predictability is a valuable commodity.
Also, one instance (Japan) doesn't prove anything except that stocks can be very dangerous over time horizons spanning decades.
He's a genuine-article reaganomics (voodoo economics!) nutjob.
Agreed. As I recall it, nearly every SEC leader before Cox wrote editorials warning public & investors that more regulatory power, people and funds were necessary for the SEC to do its job properly than it was getting. Shortly after their editorial efforts these guys would get discouraged and resign. Chris Cox was hand-picked for not having these tendencies.
I can handle either. What I can't handle is that the first people on the life boats were some of the most reckless actors - MS, GS.
Amen. Fast or slow, you can always make things worse by wasting money on rewarding mismanagement. And waste and corruption are particularly painful when things look grim.
Warning/guarantee: anybody buying stocks right here will regret it.
While we may be near some type of short term bottom, the volatility is too high and even prudent traders using stops will only get stopped out of their position, generating revenue for their brokerage but only losses for themselves.
Yesterday I noticed several posters bragging about going long. Markets like this one exist to humiliate you.
All the major index charts look like a horror show. Every amateur chartist is looking for reversal patterns that exist only in your imagination.
There will be a time to buy heartily, perhaps even this year, but first wait for an uptrend to establish itself. You might miss 10% of the move, but having no hair left and puking up your dinner is no way to go through life.
All I want to do is watch C-span and read CR. Don't want to work anymore.
Anonymous | 10.07.08 - 1:03 pm | #
I took a few days off. i couldn't stand my company anymore....
wow - is cnbc always this criminally stupid? j6p actually listens to these fools? they are trying to call a bottom! Capitulation is at least 3000 points away....
wow - is cnbc always this criminally stupid? j6p actually listens to these fools? they are trying to call a bottom! Capitulation is at least 3000 points away....
Yankee | 10.07.08 - 1:07 pm | #
not be televised, not, not, will not be televised. The capitulation will... etc.
What is the advantage of a slow collapse vs. a fast one?
I would think that a fast collapse would be much less detrimental to the national psyche.
My personal experience is that smaller long drawn out losses are more likely to create a sense of despair and loss of interest in investing (the rational kind) than rapid severe losses.
I think it just has to do with how the human mind works and remembers experience -- we seem to be very good at getting past short-term shocks. It's when the misery drags on that it saturates a person's outlook and behavior.
you said" "Also, one instance (Japan) doesn't prove anything except that stocks can be very dangerous over time horizons spanning decades"
Can you point to a stock market that has outperformed over the long run?
Recall that if you point to the U.S. from 1900-2000 you are pointing to a market that grew from single digit stock ownership to 84% stock ownership...something that can't happen going forward. How much of the stock outperformance is from the increase in buyers (i.e. demand) and not from the "growth" in company's earnings.
As they say, the first pounds of a diet are the easist.
If a 500 pound man loses 100 pounds a month for three months doesn't mean he'll weigh -100 lbs three months from now.
While we may be near some type of short term bottom, the volatility is too high and even prudent traders using stops will only get stopped out of their position, generating revenue for their brokerage but only losses for themselves.
Hey, I resemble that remark!
Thanks for the reminder to stay the h*ll out of this market.
"My personal experience is that smaller long drawn out losses are more likely to create a sense of despair and loss of interest in investing (the rational kind) than rapid severe losses."
If so, the Fed and Treasury are doing a public service by dragging this thing out to a long, painful death - that's what we need in order to remember the criminality that got us here and the vulnerability we have to amoral people.
imho, we are going to see nasty surprises both in and out of insurance. It is not exactly sector-specific.
My co assessed and then admitted the losses. Who knows about others... I truly would bet my house that this toxic sludge is everywhere! Just in varying degrees. Your guess will be as good as mine as to who is next. As we see, being in business for 100, 200 years does not mean a thing. Being in a conservative industry does not mean a thing.
The questions I think need to be asked: did upper management need to goose returns over the past 5-8 years? Did they stretch for that extra 1/2%? If so, there is probably toxic sludge somewhere under the covers...
Raising the FDIC coverage to $250k actually makes sense. I fully expect the net cost to the FDIC to be neutral or even profitable. For one thing it will slow the shuffle to safety and still pursing yield transaction that are sloshing around the vaults. Besides the $100k is what, 25 years old?
Rob Dawg | Homepage | 10.07.08 - 12:27 pm | #
Grassley is my senator. Too bad I'm committed to a "no incumbents" voting strategy.
Please don't stick to that strategy. Voting is how we pass information on our wishes to government. "Anti-incumbent" is basically random and won't generally favor or oppose any strategy. By decreasing the signal and increasing the noise in the channel elected officials will get inferior information and make even worse decisions. If voting becomes random the money donations that bought the bailout get more powerful, not less.
mining stocks still getting hammered.
even so, should be the first to recover (when?) when true bottom is reached. Gold price and languishing dollar should help.
Panic and fear spawns lots of unsubstantiated rumors. Beware. As an aside, the Anglo-Saxon financial system as we know it in all likelihood will be permanently changed post crisis. What will be the new financial system look like? Will America still be the frontier of all things and the hub for all the world talents and resources now that the fundings are crippled? Or will we become "the Old Europe" as Rumsfeld put it. Interesting time.
The argument as to why stocks outperform is because during most times when investors are being rational they demand a higher risk premium vs. streams of income than other types of investment.
AC,
Absent numerous Gov't bailouts, bondholders would have replaced stockholders as owners far more often.
There is no guarantee that risk premiums actually account for the risks bourne. Japan is proof of this. So are Tiawan, Argentina, Brazil, Pre WWII Germany, etc.
There is no worldwide stock market that has over the last 30 years (when stock buying has been relatively ubiquitious) a good long term investment....at least I can't find one.
It's the biggest con ever.
By definition....when EVERYONE is brainwashed to believe that stocks outperfrom, you will have a constant bid up of equity prices guaranteeing that they underperform.
For those of us underlings, todays Guardian has a must read "Radical Plan" by the Feds.
The US MSM are way in over their head, and can't let the public know what they need to know about this abuse coup by Wall Street. It's like reading out of a primer entitled for Dumb and Dumber.
One of fav shows is C-SPAN's Washington Journal. To be a guest you MUST agree to take calls from viewers. Most name politicians treat it like the plaque. To his credit Grassley is an actual pooh bah who will appear. To put it kindly Grassley can get prickly when challenged by 'bob in seattle'.
Jeez people! I could get used to this. Being a born and bred dope and all! Laying about the house. Doing a whole lot of nothing! Can I get someone to pay me do do this? Uh, I can?! Wow! What is unemployment in CT? Foodstamps? Do foodstamps cover toilet paper? hmmmmm!
Fair Economist writes: By decreasing the signal and increasing the noise in the channel elected officials will get inferior information and make even worse decisions. If voting becomes random the money donations that bought the bailout get more powerful, not less.
Fair Economist, I was already thinking that your blog post from earlier was very good - but this comment above was the keenest observation I've heard all week.
"I am a dumb, fallen catholic who thinks all organized religion is a way to control the masses. The pope has just been more sucessful than most.
It's ok, swarming masses, money does not mean anything. You must repent and go without! That's right! And don't forget to give on Sunday! We need the $ to pay off lawsuits!"
Why this off-topic barracking of the Catholic Church and religion in general? Is it a way of working off anxiety about the economy?
The Holy Father makes more sense these days than any other public figure I've heard of.
As for the fallen away:
THEY THOUGHT THEY WERE LEAVING
They thought they were leaving the Isle of the Dead
But the mist had mirrored the open sea,
It was the island itself that led
Them further away from the mystery
Streets and houses mounted the hill,
The harbor extended its ivory arms,
The dead who were waiting embraced them all,
Swore they would never come to harm
Hailed their return with kisses of ice,
Received them as if they were honored guests,
But those who have died not once but twice
Have turned their backs on the Isle of the Blessed
Absent numerous Gov't bailouts, bondholders would have replaced stockholders as owners far more often.
There is no guarantee that risk premiums actually account for the risks bourne. Japan is proof of this. So are Tiawan, Argentina, Brazil, Pre WWII Germany, etc.
Maybe so. I guess the mere existence of casinos proves that people will pay a steep price for excitement, even if it guarantees negative returns.
But again, I would argue that the specific (Japan) in no way proves the general (stocks don't outperform in the long-term).
I would need far more examples to be convinced one way or the other.
"At present, those Europeans that dissed Anglo-American finance have egg on their faces (including the lady who shares my surname). With the competitive rush in Europe to guarantee bank deposits, even Germany switched its policy and guaranteed deposits. That hasnt happened in the US yet, but I wouldnt rule it out."
I agree...further...
"It is possible that the current crisis could destroy the Euro, and possibly the EU. I think of the Confederation, where the economic pressure became so great that an extra-constitutional coup took place to create the Constitution, and implicitly, the fiat Dollar that we live with to this day. WIthout political unity, fiat currencies have short shelf-lives. Alternatively, the crisis could create a Federal Europe where the central government has significant powers to the degree that France in the Eurozone would be similar to Texas in the US. I dont see that as likely; there is not the same degree of trust across the Eurozone as there is in the US."
Totally agree...I think the Euro goes bust or the EU has to centralize further. Note that these are the same issues that faced the USA in its early history, i.e. states rights vs federalism, allocation of power between the states and the central govt.
sweet! my congresswoman maloney on highly leveraged derivatives-
"you had no assets, there was no value on the CDS, you were gambling with trillions of dollars!"
"making your employees rich, destroying a great company and hurting the american people. you need to apologise."
gosh, as it's been said, you steal 100 bucks you go to jail for years, you steal 100 million you get beat up by congress for a few hours.
Come on folks your momma told you all that, being Frank, Gross Cox with a Dick Fuld and Goldman Sachs and a Grassley Bush or a Brownie Waxman attempting a Lehman never comes out good without Paulson Protection ( which is never 100% reliable).
Thanks Yankee, comments are much appreciated. My gut has been telling me the same thing.
Gavshire Hathaway | 10.07.08 - 1:16 pm | #
If you are looking at the big picture and are connecting the dots, your gut is a better indicator than anything else. I'm going with my gut. And if I am wrong, I can hate myself. But I will NOT be hating myself for sitting motionless like a deer in the headlights, KNOWING I should be doing something, but not taking any action. I guess you could say I would rather be actively wrong than inactively wrong.
This bearded financier,
with academic veneer,
brings memories of University days
where I strode in a clouded haze,
expounding in intellectual fake
the ins and out of Finnegan's Wake.
Bernanke alibiing why he couldn't bail out Lehman. Jeeze, he's all over the place.
We're in deep trouble, people. There is no underlying philosophy or goal underpinning the Fed's or the government's actions. They're truly clueless.
"Lehman would've required a sizable injection of public funds...much larger than was the case with Bear. And would've involved the assumption of the tax payer of billions in expected losses...Neither the Treasury nor the Federal Reserve had the authority to commit public money in this way."
That's my point....stock ownership is relatively young.
They haven't proven themselves as stand-alone good investments without a comensurate growth in stock-market participation.
When stock buying becomes commonplace and ubiquitous for the general populace, it has proven to underperform.
Worldwide I am unable to find a mature stock market (or immature one for that matter) that has outperformed over the long run. over the last two decades.
Unintended consequence of the short ban - air pocket - BAC goes to build a book and no buyers at 32, you say 30, you say 28, you say 26, you say.....stock down 20%
"The Mint added in the memo that it's halting the production and sales of several gold and platinum coins while putting a few other coins under allocation sales. The move came after the Mint halted sales of two other coins in September and August."
""Sooner or later, it'll become clear the ETF is not gold. It's a stock," Ferris said."
With as much due respect to the Holy Father that a lapsed Catholic can offer, it is considerably easier to say that money "is nothing" when you don't have to worry about putting food on the table, paying for healthcare, and getting the kids through college.
As a general rule, I don't take advice on how to suffer through an economic crisis from anyone wearing ermine.
"You and Spock get up here. Sulu, prepare for warp maneuvers. Aye, sir. Chekov, arm photon torpedoes. Photon torpedoes ready. Warp power to the shields, ..."
Somehow this dialog makes more sense to me than anything I've heard from government leaders.
bernanke is a disaster. i don;t think they even count how much they are spending. bernanke knows it isn;t worth anything or not going to be worth anything.
The only problem is there is absolutely no where to hide. Fingers crossed the Germans break away.
.Unintended consequence of the short ban - air pocket - BAC goes to build a book and no buyers at 32, you say 30, you say 28, you say 26, you say.....stock down 20%
There is a strategy to profit off this, and it involves very little risk. It's called "stink bidding", and it works like this: Pick a large cap/liquid type of stock, like IBM, BAC, or GOOG. Keep a brokerage account with mostly cash. Put in ridiculous low-ball "Good til cancelled" orders like 100 shares of BAC at 1.00. Sit back and wait to see if your stink bid gets hit. If it does, likely you've hit an air pocket and it will spring back up and you'll make a small fortune.
Fair Economist,
I will have to disagree with you re the futility of across the board anti-incumbent voting. The way that Congressional districts are structured incumbents have enormous advantages over challengers due to gerrymandering, and incumbents receive enormous financial support from vested interests vs challengers. Incumbents by definition have control over legislation and it is easier for monied interests to get what they want by influencing those who hold the power.
If every House rep lost this election, we would likely see a much different debate over issues at hand as the challengers in different states would have a broad range of constituencies.
In addition, the Constitutional provision for 2 year terms for the House was specifically intended to allow for wholesale change in that legislative body.
"With as much due respect to the Holy Father that a lapsed Catholic can offer, it is considerably easier to say that money "is nothing" when you don't have to worry about putting food on the table, paying for healthcare, and getting the kids through college.
As a general rule, I don't take advice on how to suffer through an economic crisis from anyone wearing ermine."
This really is off-topic, but I felt I had to defend against a misinformed and gratuitous statement. You might want to look up the Church's positions on economies for a more accurate take.
I asked my neighbour about the economic crisis. He calmy replied that he doesn't worry about things like that. He says he leaves it up to the good Lord.
Give Bernanke due credits. We witnessed Mellon's market discipline approach and the resulting Great Depression. Bernanke's job is to mop up the mess and prevent a similar catastrophic event. Then the pain and work to build a new financial system won't be as intolerable. Witness the disintegration in Europe due to inaction and self-interest, and contrast that to the aggressive and innovative actions by the FED.
Captain Ben: "Warp 11 Mr. Paulson!"
Navigator Paulson: "There is no '11' Captain!"
Captain Ben: [intercom] "Engineering, can you give me emergency SIV power?"
Engineer Bair: "Cap'n aye cinna giv ye inny more. The CP is broken the TED connectors are gapping, the FFR is almost ta zero! She's breakin' up an no pow'r in the universe kin save us."
I think you're not giving enough attention to part of Fair Economist's point: if every incumbent loses, then there is no survivor bias toward those who voted against the bailout (or whatever other policy is relevant to the discussion). An across-the-board turning-out would suggest that Americans are simply unhappy, giving no information as to whether voting for/against [substitute your pet policy issue here] was correct.
Stated otherwise, the most valuable data that could be given to a Congressman is that 100% of reps who voted for a relevant issue were defeated, but 0% of those who voted against were defeated. Reps will see that and think, "damn, I'm not going to make that mistake." Anything other than that is adding noise to the signal, as Fair Economist put it.
PS. By the way, for folks watching that nonsense Iranian claim from earlier, see this - "Iran Withdraws Claim on U.S. Plane" - NY Times
If every House rep lost this election, we would likely see a much different debate over issues at hand as the challengers in different states would have a broad range of constituencies.
No, we need every rep who defied the overwhelming voice of their constituents to get the boot. If all of them get the boot the next group will say "why should I listen to my constituent when I'll get the boot anyway? May as well take the money and the cushy job and vote for Wall Street".
I'm all for structural reforms vis-a-vis less gerrymandering and some kind of public financing. But neither of those requires thumping out the entire Congress - indeed, it's counterproductive, as I describe above.
Pavel: I think I'm adequately informed about the Catholic Church's policies; but it doesn't matter since I'm not talking about what the Church has said. I'm talking about what the Pope has said. Or was he speaking ex cathedra?
"Yes, Pavel, the Catholic Church does indeed write humanely and well about "economies."
It is what the Church actually does that is the problem."
We've got a young Catholic priest cousin who works part time with a Latino congregation in Detroit, and part time in a small and poor village in Mexico. He's had a gun held to his head by a Mexican cop. That's what this cousin of ours actually does. The order he belongs to counts contemporary martyrs among its number, including a priest who was shot and killed, while working in the Philippines, for opening a hoarder's locked food warehouse during a famine. That's what he actually did.
Not sure why MS is going back up. It's not in preferred company with GS and JPM. This same crap happened to Bear and Lehman before they were worthless. I wish that it would just be over with. If shorting was allowed, MS would be bankrupt today. What a disservice to free markets.
uno
charming
Hell, Wall Street massively underpriced risk for a decade.
The Fed has a lot of catching up to do.
Bah, the SEC, not the Fed.
My eyes are glazing over and it's not even lunchtime yet.
Chris Cox needs to hang.
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
Anyone else have fond memories of Bear Stearns' failed Everquest IPO? Just a gentle reminder: the purpose of the IPO was to move the toxic waste off BS' books. The same toxic waste that the treasury will now be buying using the taxpayer "bailout" money.
I just love the timeliness of information nowadays...
This gets "released" a full six months after the shit hit the fan at BSC.
All you have to do is look up Cox and where he's been before the SEC to see that he is/was just another "tool in the toolbox"
Ciao
MS
Mook,
Now the FED is intentionally underpricing risk.
Wells Fargo Said that they are no longer taking CD deposits is there a hidden message here????
Why is the TED dropping sharply? Already at 3.35.
And the SEC was also responsible for allowing the relaxation of leverage limits at investment banks. Of all the organisations that should not be dirty, this is one. Bankers can't help being greedy and taking shortcuts. But the SEC? Don't they have a sort of taking away the punchbowl type role like the Fed. Yet I think when the investigations are all done they will prove to have been as complicit as the rating agencies and mortgage brokers.
Cox need to have his ass thrown out in the street. This clown has done more damage then just about anyone.
Whats Jas say again?
.....
Cox is bought and paid for by the IB's! End of story!
Hang him high!
What do you mean; someone knew this could happen and decided to ignore the warning signs. I cant believe it!
Before it was released to the public on Sept. 26, Kotz deleted 136 references, many detailing SEC memos, meetings or comments, at the request of the agency's Division of Trading and Markets that oversees investment banks.
Facts are stupid things. Why include them?
TED dropping due to FED closing up shop on TED
"I'm shocked, SHOCKED to find that there is gambling going on inside this establishment..."
Knock me over with a feather !
MS: I like the way you put that.
"tool in the toolbox"
You could run out of fingers pointing at people to blame for this mess.
Wells is about to get it's hands on one of the last remaining large depositor bases......can't guarantee the world's deposits...cant they?
If they get a portion of WB look for them to also do what BAC did yesterday.
Ciao
MS
Risky behavior identified back in Dec 2007? Good thing the SEC was way out in front of this.
can't take credit for it.....uttered from Hanky-poo's mouth last week. Just a creative application of it.
Ciao
MS
I have a crowbar in my tool box and will be using it with maximum force come November!
So can I now open a mortgage company with $1B of unsecured loans from the Fed?
godhatesfangs writes:
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
godhatesfangs | 10.07.08 - 11:47 am | #
The televangelists shear their flocks, Wall Street shears us all.
lama writes:
You could run out of fingers pointing at people to blame for this mess.
I just cover the entire panoply with one single digit.
So can I now open a mortgage company with $1B of unsecured loans from the Fed?
Not yet, but it's only October.
It is not surprising that these guys were asleep at the switch. Just like they are now.
I am sure that Treasury and Fed are discussing their options with market participants in order to determine the "best" route.
Is it any surprise that the market made such a huge move up yesterday? Will the SEC investigate whether any priveleged, material, insider information was readily available and used? I highly doubt it.
What does this have to do with making loans to minorities?
Builder Bob writes:
Why is the TED dropping sharply? Already at 3.35.
Well, TED scaled the heights of panic and insanity; it can only come down now, especially since the Fed seems to be looking at real solutions (CP funding facility) instead of gimmicks to please the markets (a rate cut).
Dawg...is that the uiversal #1 fan indicator?
Christopher Cox was a creature of Congress, astute in the political nuances of Congress.
Not much of a markets/regulator guy though.
Nice choice Bush...
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
Grassley's taking the mantle of new populism, think the modern day Teddy Roosevelt. As you mention, the evangelists and now the SEC. But for the past year, he's been going hard after health care (as opposed to health care financing) reform, tackling Big Pharma and Medicare abuses.
Actually -- as per the previous thread, my new name is Zombie Beach.
OT, what is going on with GOOG today?
An incompetent Bush appointee? You must be kidding.
cox and the bush administration had to censor the report
it was a matter of national security
Uncle Billy Vs. Mt. Pelerin writes:
Kona-cookie: well this all begins and ends with people, their motivations, relationships, desires, and fears, so I try to focus on the major strategists and their tools. The fulds and mozilos are tools.
Uncle Billy Vs. Mt. Pelerin | Homepage | 10.07.08 - 3:19 am | #
Disregard that, I suck Cox.
--
Didn't Fed also allow?
The primary job of Crooks' agents (political gangsters, SEC, FED, most econ-meisters, etc. etc.) are there to serve Crooks' interest and they did one hell of a job during 2002-07Q2. We get daily confirmations of:
A system of the Crooks, by the Crooks, and for the Crooks.
Ja
Heck-of-a job Coxie
Chris Cox for president!
yay, at last some enforcement action, err.
oh, never mind, we'll have to wait for the pitchfork attack in the caribbean with our confiscated yachts.
They need to put Roubini in charge now. He has the best grasp on this disaster.
Chrix Cox has huge white teeth (to eat you with)
Wow. He figured that out all by himself...
DaddieMac writes:
Wells Fargo Said that they are no longer taking CD deposits is there a hidden message here????
DaddieMac | 10.07.08 - 11:48 am | #
DaddieMac,
Have a link on that Wells news, by chance?
"OT, what is going on with GOOG today?"
Most likely the affect of not having a huge advertising base any longer. Someone getting out in a pretty big way....look at it's intraday chart.
Ciao
MS
As I've said before, this whole mess proves that there is indeed honor among thieves. These guys have gone to any length to protect each other and the cash cow they were sucking at the teat of.....
Money Man writes:
Dawg...is that the uiversal #1 fan indicator?
Fifth of a hand. Yes.
"Cox engage in risk behavior." It's just a race to see if John stewart or The Onion reach around this first.
godhatesfangs writes:
Grassley --first he attacks the Christian televangelists then these good businessmen--he must hate America
godhatesfangs | 10.07.08 - 11:47 am | #
Grassley is pretty good as far as 'conservatives' go - his only blatant flaw is his complete loyalty to 'big agriculture' and ethanol. If it wasn't Bear but rather ADM or Cargill under scrutiny & 'covered up' instead - he'd be applauding Cox for 'protecting' Middle America...
I see this more as 'better your ox gored than mine'...
I just went to Marketwatch and the opening advertisement said, "CSC Consulting: The Grass is Always Greener."
Is someone f*cking with my head?
CSC,
They found your stash and are trying to raise cash.
Here's why the markets are locking up:
We're not going to sell into a bad market when we don't have to,'' said [Massachusetts] state Treasurer Timothy Cahill in a statement this morning.The state's cash position is solid. We will be patient and seek this additional liquidity when we have more confidence that we will get the best price for taxpayers.''
Borrowers believe rates will drop from the real spot prices (which are far above the quotes). Lenders aren't will to take risks below those prices. Deadlock.
The problem is that most of the markets are expecting drops in interest rates that aren't going to happen. Governments simply can't supply enough credit to make the markets clear at the rates implicitly set up by a 2% FF rate. The markets will stay locked up until the market accepts the reality that we're not going to have 3% short-term commercial rates. The Fed can accelerate that process by acknowledging it can't keep the rates that low. Otherwise the markets will eventually give up on the Fed's pronouncements and rates will climb up to clear the markets. That will mean the market has concluded the Fed has lost control, though, and will involve a large loss of confidence.
"CSC Consulting: The Grass is Always Greener."
Thanks, that made my morning.
Local county government hiring for land aquisition position....Any guesses as to why they would be hiring? Answer: Land, easements, and so forth can be bought cheap in this market. Government at work....If they can't tax it from you..they WILL screw you and take it for pennies on the dollar anyway.
Fair Economist:
What's your blog address again?
Anybody have a DeLorean so that we can go 6 months into the future and read now about all the rules and regulations that the FED is ignoring?
Of course, everybody has to take a position. I'll bring up the first issue:
Should capital reserves be raised, lowered, or remain the same. No fair to say they should be lowered for your friends and raised for the companies you plan to short on Thursday.
all the blogs, cnbc, bloomberg are still ignoring the historic AIG hearings in the house, currently on cspan. i posted about it this morn, been watching on one video.
sarbanes is on now.
weird this cognitive disconnect.
OT (sorry)- It looks like the first losses on savings accounts from a bank default are being reported in Britian. Iceland's Landsbanki has failed and savers on its internet brand Icesave will lose some savings
The internet bank Icesave has suspended all deposits and withdrawals from customers' accounts after the Icelandic authorities stepped in to rescue its parent company Landsbanki.
Landsbanki's other UK operation Heritable Bank has also stopped savers making withdrawals and is no longer offering mortgages.
Between them the two brands have more than 300,000 customers in the UK, with Icesave winning savers with its high interest rates on savings accounts and Isas.
Today a statement on its website said: "We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers. We hope to provide you with more information shortly."
[clip]
The 100% guarantee does not extend to UK savers, who would have to apply for compensation both in Iceland and the UK, and would only be able to recover up to £50,000.
The first 20,000 (£16,264) they hold is protected under the Icelandic government's scheme, and the remainder up to £50,000 by the UK Financial Services Compensation Scheme (FCSC).
A spokesman for Landsbanki said 95% of Icesave's customers had deposited less than £50,000, so would be fully protected by the FCSC.
At the start of 2008, Heritable had around £900m on deposit from UK savers.
Icesave bank Landsbanki taken over by Icelandic government |
Money |
guardian.co.uk
The law of unintended consequences is nearing. Fed hasn;t chosen any path. Their actions are purely reactionary and arguing otherwise is to employ blinders. Inflation marks higher rates, fdeflation marks insolvency. Fed would have you belive there is a middle path, but thetre is not. This whole mem the rest of the world is worse off than US hence the dollar is steong is laughable. When do the germans break out - I'll take the Bundesbank and german Engineering over GS and Bernanke everyday of the week.
When does the rest of the world simply tell the United States we are going to take our medicine and so are you
Study: $25 billion in auto loans past due
Nearly $25 billion worth of consumer auto loans are delinquent, a new study reports. In the second quarter of 2008, Experian Automotive says, 2.48 percent of all auto loans were 30 days past due, compared with 2.28 percent in the year-ago quarter. Auto loans that were 60 days past due in the second quarter rose to 0.75 percent from 0.67 percent in the second quarter of 2007, Experian says. In the past two years, consumer credit has tightened. In the second quarter of 2008, Experian reports, auto loans made to consumers with good credit -- those with credit scores of at least 680 on a scale of 300 to 850 -- accounted for 56.5 percent of outstanding auto loans. That's down from 61.1 percent of outstanding loans in the second quarter of 2006.
Study: $25 billion in auto loans past due - Automotive News
The financial crisis explained by Fed Governor. Conclude for yourself, based on details below.
MarketWarnings: Credit and financial Crisis Explained by Fed Governor from Atlanta
So one of three Lexus SUVs at the stop light are bank pwned?
_
weird this cognitive disconnect.
The disconnect is passing bailout after bailout before having hearings like this. These guys are looking for somebody to beat up so they look tough in front of the cameras.
Newsflash for Congress: The bad guys won. The money is gone. You could have stopped it, but you chose not to. Now it's too late. Any sense of outrage you feel now is a waste of energy.
CSPAN 2 is covering it(of course) in case anyone is wondering
Awesome story here: How does CNBC's Jim Cramer keep his job?
sarbanes on highly leveraged derivative spread of 60 trillion-
"AIG basically opened a casino in London for example" referring to CDS.
Why is the TED dropping sharply? Already at 3.35.
Short-term treasury rates are up almost half a point today. That means either the crunch is fading and people are taking a little risk again (good), or that the Fed has dumped out so many treasuries the market is finally getting satisfied (bad). Not sure which.
"The Wedding That Saved a Town (Hardcover)
$17.95
by Yale Strom
illustrated by Jenya Prosmitsky
Yiske and his band of klezmer musicians must find a groom to participate in a very unconventional wedding. An unusual folktale based on the old European Jewish custom of holding a wedding in a cemetery to ward off a cholera epidemic. Join Yiske and his clever horse Fairdy in this ghoulishly delightful tale."
Let's conduct all future M&A, private/private or public/private, in a cemetary!
Chris Cox has even more than dirty hands (he used them to wipe the asses of most of wall street).
He's a genuine-article reaganomics (voodoo economics!) nutjob.
I'm thinking we need a new category of regulatory bodies: those that are not appointed by the Preznit. I don't know the alternative appointment mechanism that would work, but I do know that seeding the federal agencies with ideologues that rotated from the private sector (including lobbyists) and are more interested in protecting that sector than regulating in the public interest is a very bad idea. BushCo has poisoned the agency wells and it would take a witchhunt to root them all out. They even populated the civil service (contrary to law) with their fifth column.
Maybe we should just fire everyone above about GS-11 and start over.
Yeah, I've been watching CSPAN in lieu of "Are we putting in a bottom" on Bubblevision. ( I saw 8 boxes a few minutes ago )
damondidit - link is in my "homepage"
"or that the Fed has dumped out so many treasuries the market is finally getting satisfied (bad)"
I'll take that one......the markets priced ANY risk out of it in late '06. Can't imagine that has changed with one little alphabet soup auction facility...
Ciao
MS
Fair Economist, excellent post.
I was expecting a rally w/ the TED Spread coming in. Coiled and delayed? Cramer's lemmings selling to the Street?
In Soviet Amerika, excessive risky behavior allow SEC.
FDIC: Press Releases - PR-94-2008 10/7/2008
FDIC Press Releases
FDIC Board Adopts Restoration Plan -- Proposes Higher Assessments on Insured Banks
Also, Proposes Improvements to the Risk-based Assessment System
FOR IMMEDIATE RELEASE
October 7, 2008
looks like the administration is throwing Chris Cox under the bus to save themselves.
Perhaps the SEC forgot what they were supposed to be doing. Maybe they got mixed up.
Geez, give them a break. They probably were focusing on more important matters.
Anyone have a working link for cspan live? Google search is turning up broken links oddly.
FDIC: Press Releases - PR-93-2008 10/7/2008
FDIC Press Releases
Emergency Economic Stabilization Act of 2008 Temporarily Increases Basic FDIC Insurance Coverage from $100,000 to $250,000 Per Depositor
FOR IMMEDIATE RELEASE
October 7, 2008
This is all part of Bush's three-step plan for corporatizing America.
1) screw up
2) cover up
3) [let the crooks] clean up
Looks like McCain was correct in asking for Cox's head.
No worries about TED. His cousin VIX is 48.
FDIC: Board Meetings
FDIC Board Meetings
Location
Board Room on the sixth floor of the FDIC Building located at 550 - 17th Street, N.W., Washington, D.C.
Date
October 7, 2008
Description
Pursuant to the provisions of the Government in the Sunshine Act (5 U.S.C. 552b), notice is hereby given that the Federal Deposit Insurance Corporations Board of Directors will meet in open session at 10:00 a.m. on Tuesday, October 7, 2008, to consider the following matters:
Summary Agenda: No substantive discussion of the following items is anticipated. These matters will be resolved with a single vote unless a member of the Board of Directors requests that an item be moved to the discussion agenda.
Disposition of minutes of previous Board of Directors meetings.
Memorandum and resolution re: Proposed FDIC Strategic Plan, 2008-2013.
Memorandum - PDF and resolution re: Interagency Notice of Proposed Rulemaking on Capital Treatment of Certain
Claims on or Guaranteed by, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) - PDF. 1
Discussion Agenda:
Memorandum - PDF and resolution re: Restoration Plan, Notice of Proposed Rulemaking on Risk-Based Assessments,
and Designated Reserve Ratio for 2009 - PDF. (657k) 1
Citimortgage downsizing drastically:
CITIMORTGAGE DONE??
Did you know Cox lives right up the street from Pimco's Bill Gross ?
Hang 'em !
FDIC Board Adopts Restoration Plan -- Proposes Higher Assessments on Insured Banks
Also, Proposes Improvements to the Risk-based Assessment System
Nice. Perhaps overdue, but nice.
Scuttlebutt is the BofA offering isn't going over too well. $5B left to sell; no buyers.
Gross... Cox... shouldn't there be a Beavis and Butthead video somewhere with that?
hehehe...
Any update on Citi vs Wells celebrity deathmatch?
Can I ask about the Fed lending directly to consumers yet or does it still sound crazy?
When you have no job, no money, and no place to go, you won't be laughing when you get your first 'Fed-it!' card in the mail.
The Duplicitous Sheila Bair -- Seeking Alpha
The Duplicitous Sheila Bair
Raising the FDIC coverage to $250k actually makes sense. I fully expect the net cost to the FDIC to be neutral or even profitable. For one thing it will slow the shuffle to safety and still pursing yield transaction that are sloshing around the vaults. Besides the $100k is what, 25 years old?
"Hang em"
Thought precedes action.
_
I was expecting a rally w/ the TED Spread coming in. Coiled and delayed? Cramer's lemmings selling to the Street?
If we can't get a rally with the Fed outright buying CP, I don't know what it's going to take.
Oops, the Guardian just corrected their story on Icesave, and it is much worse than originally thought:
More than 300,000 Britons are thought to have had their cash in the bank's UK savings arm Icesave.
Most thought they would have up to £50,000 of their savings covered by the Financial Services Compensation Scheme (FSCS) in the event the bank failed.
However, since Landsbanki went into receivership this morning it has emerged that the compensation scheme was not quite as originally billed.
The UK's FSCS confirmed today that it is only responsible for "top-up" payouts to customers of Icesave.
It said this afternoon it was only gearing up to cover amounts over and above the 20,000 (£16,264) protected by the Icelandic government's deposit protection scheme.
This means that if the Icelandic government was unable to meet its obligations to UK savers they would only get back any holdings between 20,000 and £50,000; those savers with less than 20,000 would receive nothing.
Some UK savers are understood to have had as much as £300,000 in their Icesave accounts, and the bank is thought to have a large number of tax-free Isa customers.
Icesave: Question mark over compensation |
Money |
guardian.co.uk
https://www.wellsfargo.com/savings_cds/
Still appear they're offered.
Anyone else look up a source for that rumor repeated above?
csc Goldman Sachs will eventually be issuing credit cards.
Thanks MS you made a good point about the deposits. Hope Wells gets their wachovia princess
Still appear they're offered.
Anyone else look up a source for that rumor repeated above?
I heard this as well on CNBC--don;t have a link.
OT, but one more sad/stupid story.
Advised a client with a pick a pay mtg. Claims he didn't understand about the principal balance going up.
Didn't pay his taxes either, claims he didn't understand that the payment didn't include taxes, because his previous mtg did. Has a master's degree in Psych.
I told him he was 50k underwater, but I really think it's more than 2ce that.
I had a U of Chi prof in law school whose mantra it was that the regulated always capture the regulator. True, but not an excuse for not having some checks & balances for not at least slowing the process down.
I do think that Bush could have corrupted pretty much everything.
And, didn't I say that if commercial paper was the prob, that's what they should try to solve. Gosh, if they spent the money on CP, maybe they won't spent it on toxic waste, and the taxpayers will actually get the money?
Prolly not.
Jaysus F Krist-- is anybody watching the c-span AIG hearings?
According to the SEC former chief accountant, one Lynn Turner 1998-2001-- the SEC "gutted" 149 positions in enforcement & risk management, with the result that there was one person in charge of CDS's-- valued at 62 trillion dollars--------------
Also, didn't catch the guy's name, but some fatcat at AIG-- the guy who ran the infamous London office, got fired, then 2 days later, got $35 mil in severance pay, and is currently, get this-- now under a ONE Million per month contract as a "consultant" to help clean up the mess.
Truck me to fears---
The moneychangers have left the Temple.
http://www.guardian.co.uk/world/2008/oct/07/religion.creditcrunch
Pope Benedict has passed his own judgement on the economic crisis ....
"Whoever builds his life on this reality, on material things, on success ... builds (his house) on sand...." ... he said yesterday, according to Reuters.
The pontiff added: ''We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. ..."
...
The pope's comments echoed views expressed by two of the Church of England's most senior clerics last month.
Dr Rowan Williams, the Archbishop of Canterbury, wrote in the Spectator, that "unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders".
Williams added that Karl Marx had been right in his assessment of the nature of capitalism "if about little else".
The Archbishop of York, Dr John Sentamu, said the market took its rules of trade "from Alice in Wonderland" and branded speculators who had short-sold shares "bank robbers and asset strippers".
I suppose they're right, really.
The whole scramble we're seeing now is the last days of the huge Ponzi scheme. Gone, all gone.
Good afternoon. I am at the door.
"not bipartisan, you must drain the entire swamp." former CAO of SEC Turner testifying now.
uh, yeh. gitmo time. or swept under the rug.
Also, didn't catch the guy's name, but some fatcat at AIG-- the guy who ran the infamous London office, got fired, then 2 days later, got $35 mil in severance pay, and is currently, get this-- now under a ONE Million per month contract as a "consultant" to help clean up the mess.
OMFG!
OT: Here's how you lose 1.2% on a "safe" 401(k) bond fund....
"The Core Bond Index Fund seeks current income and growth of capital by investing in U.S. government and corporate investment-grade obligations. The goal is to provide a portfolio that approximates the investment characteristics and performance of the Lehman Brothers Government/Corporate Index. "
It would be funny except....
AIG pigmen always survive well.
Can I ask about the Fed lending directly to consumers yet or does it still sound crazy?
When you have no job, no money, and no place to go, you won't be laughing when you get your first 'Fed-it!' card in the mail.
Currently Smoking Cannabis | Homepage | 10.07.08 - 12:26 pm
Still crazy talk... I'm guessing we're going to get our cut from the Treasury in a holiday stimulus check.
Just what Max said - no buyers for BAC stock...market heading lower
I've been a Bear since '99. Last night brought the first internal stirring of the worm turning. Not that I'm turning Bull, but that delta functions of price and time are changing the landscape. Cramer's capitulation yesterday is an ingredient.
Friends who always rolled their eyes at me in the past are calling me to incorrectly tell me when the DOW was last at 10K, and the meaning of "frozen" credit.
Sunshine is not coming out my ass but I can at least see a setup for personally feeling more hopeful in the future. I can't wait until everybody is morose and fed up and not wanting to talk about the markets. If we somehow avoid violent nationalist fascism (put the odds at 50-50) after we hit bottom, my friends are going to roll their eyes at me for being an optimist!
What is the advantage of a slow collapse vs. a fast one?
I like Grassley. (He's not my Congressman, he is from Iowa). He is an old fashioned skinflint.
He ought to be on the board that watches Paulson.
damondidit,
perma bears exist because of fundamentals....not because they 'sensed' the market would head lower.
Stock experts are looking at the day to day financial issues:
"is this the bottom?"
"is it time to buy stocks?"
They are totally missing the BIG PICTURE.
If, in a "panic" you sold at the very bottom of the 1997 LTCM crash and went treasuries you'd be up 50% over anyone who bought and held stocks for the "long term." Including 1.8% dividends we are EXACTLY where we were at the bottom of that day when the S&P 500 hit 957. The S&P would have to be in the 1500's to just keep up with cash over the last decade.
That is if you went "all in" on that day and didn't dollar-cost-average into stocks through two huge above trend stock bubbles, which means ALL long term steady stock buyers have LOST money...actually lost literal dollars...that isn't even including the opportunity loss as compared to treasuries.
One of the greatest stock investors of all time, Bill Miller, is essentially dead money over the last decade and lost money for anyone steadily buying into his fund.
Those prudent retirees who went to their money managers a decade ago and funded their retirment based upon an expected conservative 7% return for stocks is way way way behind and underfunded for retirement.
Why is it any different today? Why would selling today and moving to cash be a long term bad move? Especially when we have what never existed before..a generation of steady stock buying baby boomers needed to liquidate.
From 1980-1999 we moved from 50% to 84% of households owning stocks directly or indirectly....That is a 60% increase. We can only mathmatically increase 25% to get to 100%! Price is supply and demand. Demand is tapped out and equalized. Boomers bought when no one was retiring and selling...now it's different.
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
Anyone, anyone, Bueller?
ext week hearings on Rating agencies, hedge funds, etc.
gosh, lots of data without enforcement and regulation. i now feel we have credible and strong government, free market and free press. must transfer all my glod to Tbills.
it's like a mini keating 5 in the s and l crisis but on a world scale. weeee!
damondidit,
Ditto for me. I called Dow 9k back when it was 14k. Friends scoffed, and I just shook my head. "We shall see," I said.
_
Rob Dawg,
I agree on raising the FDIC limit. The dollar has probably lost at least 50% of it value since the 100K limit was set.
What did the sign say?
"unimaginable wealth has been generated by equally unimaginable levels of fiction, paper transactions with no concrete outcome beyond profit for traders".
Ahh! Religious recognition of our casino eCONomy.
Go to any casino and behold the likeness or our phony economy. Lots of money changes hands in a casino, the house (bankers) takes a cut of course, but no wealth is produced.
In a sense our eCONomy is worse than an actual casino. At least the casinos don't produce the inflation which makes the majority poorer.
What is the advantage of a slow collapse vs. a fast one?
The fast one gets you those cool dejected trader photos in the paper.
waxman just yanked our code pink operative and her sign.
Chris Shays (R) is calling for more hearings, specifically to drag the Fannie/Freddie CEO's on the carpet-- Chair Waxman (D) is waffling about 'scheduling difficulties' given the format of these 6 hearings)
OK-- that panel's over
Right noew, they're hauling in AIG's last 2 CEO's--
& Waxman just had "Rusty the bailiff' haul off some woman in the audience who was holding up some type of protest sign-----
"When does the rest of the world simply tell the United States we are going to take our medicine and so are you"
Seems to me that the billionaire, Bear Stearns, AIG, commercial paper bailouts along with all the alphabet soup window lending should sort of count as medicine. Not to mention 4 million foreclosures, 1.1 million bankruptcies, nearly 10 million unemployed.
I don't see that anybody's being spared in this debacle - except maybe the insatiable greedy incompetents who caused it.
-200 pts soon?
I'm with AJ.
So with corporate profits at a historical high the government needs to step in and offer CP?
-200 pts soon?
Try +200.
So how long until the Treasury bubble pops?
I called dow 10k and sold at pretty much the top--about 75% of what I owned anyway; have only lost a couple thou; am perfectly willing to concede that dow 9k is about right, or even 8.5, since I didn't buy back in at 10k.
Haven't even starting shopping yet, except it is going to be stuff like toilet paper companies and Campbell's soup. And yes perhaps, gun and ammo companies, if any of them are public? And booze companies. Alas, Bacardi is hopelessly private.
Guys, the real market opens at 3pm. Yesterday proved that.
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
The trend is no longer a stock investors friend.
Also, absent the numerous government sponsored market bailouts over the last 100 years, it's not clear to me that stocks would have been the best long term investment.
You can't look at numbers in isolation. You need to consider history as a context.
"I am waiting for some MACRO discussion as to why stocks outperfrom."
They don't, as a whole, if you eliminate survivor bias. The whole macro point is that you have to be in the right stocks for any period. You can pretty easily make 10%+ in stocks in normal years, but not by buying the S&P 500. You have to find a macro theme and be right more than wrong.
"You and Spock get up here. Sulu, prepare for warp maneuvers. Aye, sir. Chekov, arm photon torpedoes. Photon torpedoes ready. Warp power to the shields, ..."
Where is anonymouse? I hope he's okay. Glad I didn't take his advice last night.
if is, this is a once in a lifetime economic event then there is no bottom.
Comrade Dope Baron Von Helmut writes:
Guys, the real market opens at 3pm. Yesterday proved that.
Agreed. And TODAY, I think that means we end down 350-400.
lawyerliz writes:
I called dow 10k and sold at pretty much the top--about 75% of what I owned anyway; have only lost a couple thou; am perfectly willing to concede that dow 9k is about right, or even 8.5, since I didn't buy back in at 10k.
there is quite a bit down yet, we'll have a bounce up this year. keep your powder dry and in some useful format.
What is the advantage of a slow collapse vs. a fast one?
In a slow collapse the markets keep working on the way down. In a fast collapse things pretty much stop on the way down and much of the world stops working, even parts that should keep going. So a fast collapse wastes by shutting things down unnecessarily.
A slow collapse wastes by taking longer to confront reality and start adjustments and corrections.
One more point.
Just because America will continue to grow and innovate doesn't translate into higher stock prices.
When a 158 year old company like Lehman can go to zero are any stocks a good investment?
Look at GM stock. Inflation adjusted it's worth pennies. Anyone who told you that we would move from a one car family to a three car family world and we have millions of miles of multi-lane freeways and cars would be ubiquitous, you'd think....well then buy car-maker stocks you can't lose.
Look at the big three car makers historical charts.
Stocks have prove to be a bad long term investment.
I wouldn't call 20 to 1 and 30 to 1 leverage excessively risky- it's flat out robbery. They made the most money in CDS agreements for the riskiest assets that they agreed to insure. They had a way to assess risk, and they made the most on the riskiest assets. Why didn't they ask this question? "Did you make more money on risky assets? If so, how did you assess risk?"
It's 2008. The peak was at the end of 2005. We have 3 more years to go before all of the riskiest interest only 5/1 ARMs reset.
oops writes:
The pontiff added: ''We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. ..."
Sounds like the Holy Father is a little cranky about the haircut that the Vatican treasury is undoubtedly getting on their extensive bonds & equities portfolio.
economist, isn't the net impact the same regardless?
Down 209.
How many bullets does PPT have left?
CNBC headline earlier: Markets Healed. CNBC headline now: What Will Take to Heal The Wounded Markets?
Mr. Market's Mid-day Message: Bored now!
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
Japan is only proof that stocks IN AGGREGATE don't over-perform bonds IN AGGREGATE EVERYWHERE and on ALL TIME HORIZONS. Picking one case (say the biggest bull run in equities ever - USA 1982 to 2000? or Japan 1989-NOW?) proves only two cases - two anecdotal data points. There are plenty of other data points in between these two extremes...
I think trying to make a blanket rule either way is a bit of a fools errand.
Corey writes:
oops writes:
The pontiff added: ''We are now seeing, in the collapse of major banks, that money vanishes, it is nothing. ..."
Sounds like the Holy Father is a little cranky about the haircut that the Vatican treasury is undoubtedly getting on their extensive bonds & equities portfolio.
Yes. Sounds like he's feeling the pinch.
Don't think for one second these assclowns in CONgress aren't aware we are 700+ point lower after they rammed the bailout bill up our collective asses.
It's survival mode for them. Whatever it takes to get them re-elected.
Wait until 3pm.
Martin Sullivan- AIG CEO till 2008-- is "heartbroken".
Oh well then...
Bloomberg reported credit default swaps that insure Treasuries have increased by 35 basis points. How about that for confidence.
Dow down 200. That translates to what, up 300 by the end of the day?
The housing collapse is a slow collapse. Housing is inherently illiquid- so pumping in money will not help "liquidity", when the losses are tied to illiquid assets. The stock market reacts to the pressure like an earthquake, so it's also going down slow, but in big jumps with aftershocks. Nature repeats itself.
When the dollar starts to tank, the safe haven will be the stock market - solid companies that make things - J&J, P&G.
Friends: I have had a vision. The CRVIX will meet and surpass the DJIA sometime before Valentine's Day. I see them meeting at something beginning with a 6, though it may be a 5...that part is hazy.
That is all. Carry on.
Yeah, if the pope and other religious leaders really meant that stuff, they would have sold their art collection years ago and given it to the poor.
The pope lives, perhaps perforce, a very expensive lifestyle. Cardinals are called "Princes of the Church" in the olde timey despotic sense. When they're not calling themselves the servants of the servants of god.
dk, good analogy.
AIG Sullivan. crybaby pirate, "regulation bad, not our fault, please repeal FASB rules and lose mark to market concept."
paraphrased, Willumstad now parroting the same nonsense disquised as reason.
You can't look at numbers in isolation. You need to consider history as a context.
I wholeheartedly agree. What were the causes for the huge run-ups in equities during the 1980s and 1990s?
Lots of capital flooding the markets as individual investment became easier (e.g. 401(k), IRAs, etc.)
Baby boomer savings glut
Flow of foreign capital especially those non-functional capital markets.
Unprecedented LBO activity
Which of these factors now favor equity?
You really can't blame Chris Cox for being so useless, and I kinda feel bad for him. He thought he was going to be the head of the South Eastern Conference and would get Presidential Suite tickets to all the great football games, not be a Wall Street watchdog.
Thanks ARW...
What's with all this blaming Mark to Market accounting? Can it get any more ridiculous?
"I think trying to make a blanket rule either way is a bit of a fools errand."
I am not saying you can't make money on stocks.
Just like it would be stupid to say you can't make money gambling.
(Your example of 1982 to 2000 is a great example of what can never happen again by the way...you had the invention of 401k's, 457's, roth's, etc creating a generation of steady buyers who parent's didn't spend a lifetime accumulating. It's different now...as noted we moved up 60% in stock ownership in this country. Growth like that is mathematically impossible going forward).
Long term stocks as a whole can't go up faster than the economy as a whole. No investment can. This is just basic math; otherwise eventually the value of stocks will exceed the value of all assets on the planet and that's nonsensical.
People who believed in the perpetual 7-10% increases were simply sold a bill of goods. Actually long-term stock prices are much like house prices - the good returns in the US since the Great Depression have been a historical anomaly and have not in general been true in other times and other places.
alright now, as a catholic I resent where this thread is headed. if you wanna bash baptist, methodist...heck, throw in islam and judaism too...then I'm all for it. But leave the Pope alone!!!!!
LOL
Yeah - but preferably companies with better cash/debt rations, and trading closer to book value. I wish PG were trading on fundamentals that Graham would have liked... and perhaps one day it will.
Idea: bring back the inquisition! Interdenominational (including free-thinkers)!
Fire up those bbq's to get the iron rods red hot....
Hey, Cheney sez torture works, right?
Nominees for the first heretic to be put to the tests? We'll get the truth out (since its out there!)
(I'm tortured by the choice of Greenspan and Paulson).
I just went to Marketwatch and the opening advertisement said, "CSC Consulting: The Grass is Always Greener."
Is someone f*cking with my head?
Summpin's up...Happened to me too. Kunstler hijacked my handle!
James Howard Kunstler
If the fraudsters were smart, they'd fess up, get the conviction, and then have Bush pardon them before leaving office.
They should have spent the $700B new jails.
the capitulation will not be televised. the capitulation will not be televised. the capitulation will not be televised.
But Comrade Kramer came close yesterday.
13-week T-Bill yield has more than doubled since yesterday. There goes your TED spread. (Well, depending on what Libor does.)
Is the AIG London fat cat the same as this guy?
Joseph Anthony Cafasso, Jr. (born August 2, 1956) is a former Fox News consultant on military and counterterrorism issues who left the network after allegations surfaced that he misrepresented his military record.
Joseph A. Cafasso - Wikipedia, the free encyclopedia
there is quite a bit down yet, we'll have a bounce up this year. keep your powder dry and in some useful format.
I'm not ready to buy yet--got a week or so to beat the wash sale rule.
So a fast collapse wastes by shutting things down unnecessarily.
A slow collapse wastes by taking longer to confront reality and start adjustments and corrections.
I can handle either. What I can't handle is that the first people on the life boats were some of the most reckless actors - MS, GS.
Seriously. GS was a private partnership less than 10 years ago. The world would be better off without GS. They clearly bought influence to save themselves. That kind of insider dealing and discrimination will wreck a faith based system far more than any price changes will.
Once you bail out the wealthy, there is no end to the line of free loaders.
We've destroyed faith in the system and created a monster.
Grassley is my senator. Too bad I'm committed to a "no incumbents" voting strategy.
Hey, are we boomers supposed to be profligate wastrels or oversavers? Make up your minds.
The mkt isn't quite a casino. It's crooked etc,for us dopes, but if you have good sense and a bit of luck you can beat the house. Like card counting. . .
Damn I feel like Jas for making this comment but here goes...does anyone find it interesting that one of the lead securities shareholders plaintiffs in America (Bill Lerach) and some of his cronies were recently disgraced/indited for paying off lead plaintiffs so that their firm would get class action shareholder cases. I got to believe that stuff happens all the time, but Lerach (at least according to his own self serving comments: Bill Lerach Essay - Executives - Portfolio.com was targeted and taken down cause he was beating the hell out of thieves and crooks. He was basically using the SEC's civic remedies to do the SEC's job (which now we know they weren't). Please note my comment on this story does not mean I don't think Lerach wasn't a crook in his own right.
Spitzer took a glorious fall from power as well after inflicting a little pain on a few of the high flying mobsters (cough* AIG*cough)
Born and bred Dopes we are.
The Mark-to-Market propaganda is just admitting that the underlying assets are WORTHLESS. Of course, if they redefine Mark-to-Market to track the assets more closely, it will help on paper, but it does nothing to improve the price of the assets which are tied to the deflating housing bubble. We need fewer economists and more engineers to study these problems, because they are too complicated for economists and too easy for engineers.
All I want to do is watch C-span and read CR. Don't want to work anymore.
OT:
Guess who
the duplicitous Sheila hired as a pitchman.
"You're money's safer here than inside your chain wallet in the middle of a policewoman's charity softball tourney."
ARW | 10.07.08 - 1:00 pm | #
I am a dumb, fallen catholic who thinks all organized religion is a way to control the masses. The pope has just been more sucessful than most.
It's ok, swarming masses, money does not mean anything. You must repent and go without! That's right! And don't forget to give on Sunday! We need the $ to pay off lawsuits!
Guess who the duplicitous Sheila hired as a pitchman.
They're bumping uglies. What did you expect?
KO: They wanted Spitzer out, because they saw that he was going to expose all of them at investment banks for what they are...criminals. He boinked a smoking hot call girl, but that would have gone unnoticed were it not for his extraordinary ability to prosecute Corporate America, and he was in the process of taking it all down.
Greenberg blames AIG woes on shorts, accounting
"looser accounting and curbs to market short-selling could have saved [AIG]."
Hahahahahahahaha.
As an aside, I wonder how Jerry Yang is feeling these days...
Yankee,
What's your take on insurance co's now? Is the worst behind, or will we continue to see more nasty surprises?
RBS is BK now
Infosys lost a million dollar client
I am waiting for some MACRO discussion as to why stocks outperfrom. Japan is proof that they don't.
The argument as to why stocks outperform is because during most times when investors are being rational they demand a higher risk premium vs. streams of income than other types of investment.
I.E. the appearance of outperforming long-term is created by investors demanding higher returns in compensation for the short-term risks.
It's like asking why do junk bonds yield more than treasuries.
I don't know if it's a macro argument.
People tend to pay a premium for stability because predictability is a valuable commodity.
Also, one instance (Japan) doesn't prove anything except that stocks can be very dangerous over time horizons spanning decades.
JimPortlandOR writes:
Chris Cox ...
He's a genuine-article reaganomics (voodoo economics!) nutjob.
Agreed. As I recall it, nearly every SEC leader before Cox wrote editorials warning public & investors that more regulatory power, people and funds were necessary for the SEC to do its job properly than it was getting. Shortly after their editorial efforts these guys would get discouraged and resign. Chris Cox was hand-picked for not having these tendencies.
They're bumping uglies. What did you expect?
Anonymous
Damn! Another keyboard lost to reading CR with coffee.
I can handle either. What I can't handle is that the first people on the life boats were some of the most reckless actors - MS, GS.
Amen. Fast or slow, you can always make things worse by wasting money on rewarding mismanagement. And waste and corruption are particularly painful when things look grim.
Warning/guarantee: anybody buying stocks right here will regret it.
While we may be near some type of short term bottom, the volatility is too high and even prudent traders using stops will only get stopped out of their position, generating revenue for their brokerage but only losses for themselves.
Yesterday I noticed several posters bragging about going long. Markets like this one exist to humiliate you.
All the major index charts look like a horror show. Every amateur chartist is looking for reversal patterns that exist only in your imagination.
There will be a time to buy heartily, perhaps even this year, but first wait for an uptrend to establish itself. You might miss 10% of the move, but having no hair left and puking up your dinner is no way to go through life.
I say, give Spitzer all the call girls and lawyers that he wants and set him loose on Wall Street.
As an aside, I wonder how Jerry Yang is feeling these days...
That punk owes me money
All I want to do is watch C-span and read CR. Don't want to work anymore.
Anonymous | 10.07.08 - 1:03 pm | #
I took a few days off. i couldn't stand my company anymore....
wow - is cnbc always this criminally stupid? j6p actually listens to these fools? they are trying to call a bottom! Capitulation is at least 3000 points away....
Steve Barton--No-- the London fatcat is Joseph J. Cassano
read this thingie (a Gretchen-- forgive me Tanta!)
Behind Biggest Insurer's Crisis, A Blind Eye to a Web of Risk - NY Times
if that link doesn't work-- it's a NYTimes article 9/28/08 "Behind Insurer's Crisis, Blind Eye to Web of Risk"-- Gretchen Morgenso
the s&p did its full 61.8 retracement -phew
Frued writes:
RBS is BK now
LINK PLEASE!!! This is big news if its true
I say, give Spitzer all the call girls and lawyers that he wants and set him loose on Wall Street.
Heck, I'll personally chip in for a high end pro if Elliot will perp walk Bob Toll and Ira Hovnanian.
wow - is cnbc always this criminally stupid? j6p actually listens to these fools? they are trying to call a bottom! Capitulation is at least 3000 points away....
Yankee | 10.07.08 - 1:07 pm | #
not be televised, not, not, will not be televised. The capitulation will... etc.
Capitulation is at least 3000 points away....
Capitu.. Wha the? I thought it was Capitalization, that's needed now, pronto! Cough it up!
What is the advantage of a slow collapse vs. a fast one?
I would think that a fast collapse would be much less detrimental to the national psyche.
My personal experience is that smaller long drawn out losses are more likely to create a sense of despair and loss of interest in investing (the rational kind) than rapid severe losses.
I think it just has to do with how the human mind works and remembers experience -- we seem to be very good at getting past short-term shocks. It's when the misery drags on that it saturates a person's outlook and behavior.
I don't mind the market as a casino. I do mind that the house changes the rules of the game if thinks it's losing.
Agreed, Yankee.
At least call girls are able to negotiate...the taxpayers got straight up raped
ac,
you said" "Also, one instance (Japan) doesn't prove anything except that stocks can be very dangerous over time horizons spanning decades"
Can you point to a stock market that has outperformed over the long run?
Recall that if you point to the U.S. from 1900-2000 you are pointing to a market that grew from single digit stock ownership to 84% stock ownership...something that can't happen going forward. How much of the stock outperformance is from the increase in buyers (i.e. demand) and not from the "growth" in company's earnings.
As they say, the first pounds of a diet are the easist.
If a 500 pound man loses 100 pounds a month for three months doesn't mean he'll weigh -100 lbs three months from now.
Lawyerliz, Leftys may be going the IPO route. Keep watching this channel.
Bernanke speech on bloomberg
Is there a drinking game for the Bernanke speech?
DK writes:
KO: They wanted Spitzer out, because they saw that he was going to expose all of them at investment banks for what they are
Indeed. Spitzer -- like Jesus -- learned that you annoy the bankers at your own peril.
[to continue the religious theme]
Bernanke says market developments show higher threat to growth
No kidding? 100 bp rate cut hand tip
central_scrutinizer --
While we may be near some type of short term bottom, the volatility is too high and even prudent traders using stops will only get stopped out of their position, generating revenue for their brokerage but only losses for themselves.
Hey, I resemble that remark!
Thanks for the reminder to stay the h*ll out of this market.
Heli Ben is speaking...
"My personal experience is that smaller long drawn out losses are more likely to create a sense of despair and loss of interest in investing (the rational kind) than rapid severe losses."
If so, the Fed and Treasury are doing a public service by dragging this thing out to a long, painful death - that's what we need in order to remember the criminality that got us here and the vulnerability we have to amoral people.
HeliBen is going to cut! here it comes...
Corey writes:
Spitzer -- like Jesus -- learned that you annoy the bankers at your own peril.[to continue the religious theme]
You know this thread has gone haywire when Spitzer is being compared to Jesus.
Gavshire Hathaway | 10.07.08 - 1:06 pm | #
imho, we are going to see nasty surprises both in and out of insurance. It is not exactly sector-specific.
My co assessed and then admitted the losses. Who knows about others... I truly would bet my house that this toxic sludge is everywhere! Just in varying degrees. Your guess will be as good as mine as to who is next. As we see, being in business for 100, 200 years does not mean a thing. Being in a conservative industry does not mean a thing.
The questions I think need to be asked: did upper management need to goose returns over the past 5-8 years? Did they stretch for that extra 1/2%? If so, there is probably toxic sludge somewhere under the covers...
Raising the FDIC coverage to $250k actually makes sense. I fully expect the net cost to the FDIC to be neutral or even profitable. For one thing it will slow the shuffle to safety and still pursing yield transaction that are sloshing around the vaults. Besides the $100k is what, 25 years old?
Rob Dawg | Homepage | 10.07.08 - 12:27 pm | #
From http://www.fdic.gov/bank/historical/brief/brhist.pdf
$2,500: 1934
$5,000: 1934
$10,000: 1950
$15,000: 1966
$20,000: 1970
$40,000: 1974
$100,000: 1980
$250,000: 2008
Can you point to a stock market that has outperformed over the long run?
Not off hand. Is there not one?
I have trouble believing that over the long term investors will take risks without being compensated for them in some way.
But there are more unbelievable things that are true.
Grassley is my senator. Too bad I'm committed to a "no incumbents" voting strategy.
Please don't stick to that strategy. Voting is how we pass information on our wishes to government. "Anti-incumbent" is basically random and won't generally favor or oppose any strategy. By decreasing the signal and increasing the noise in the channel elected officials will get inferior information and make even worse decisions. If voting becomes random the money donations that bought the bailout get more powerful, not less.
Heli Ben is speaking...
Where?
Is he openly declaring war on the business cycle?
ALSO: TED just shot up 35+bps
As we see, being in business for 100, 200 years does not mean a thing.
Applies to nations also
mining stocks still getting hammered.
even so, should be the first to recover (when?) when true bottom is reached. Gold price and languishing dollar should help.
Thanks Yankee, comments are much appreciated. My gut has been telling me the same thing.
Panic and fear spawns lots of unsubstantiated rumors. Beware. As an aside, the Anglo-Saxon financial system as we know it in all likelihood will be permanently changed post crisis. What will be the new financial system look like? Will America still be the frontier of all things and the hub for all the world talents and resources now that the fundings are crippled? Or will we become "the Old Europe" as Rumsfeld put it. Interesting time.
Brown at FEMA, Cox at SEC. "What the heck! Nobody ever said I was suppose to WORK at this job."
The argument as to why stocks outperform is because during most times when investors are being rational they demand a higher risk premium vs. streams of income than other types of investment.
AC,
Absent numerous Gov't bailouts, bondholders would have replaced stockholders as owners far more often.
There is no guarantee that risk premiums actually account for the risks bourne. Japan is proof of this. So are Tiawan, Argentina, Brazil, Pre WWII Germany, etc.
$100,000: 1980
$250,000: 2008
Oddly enough, $100K in 1980 would be $248,583.50 in 2007 dollars according to Govt stats.
Try it yourself:
The Inflation Calculator
There is no worldwide stock market that has over the last 30 years (when stock buying has been relatively ubiquitious) a good long term investment....at least I can't find one.
It's the biggest con ever.
By definition....when EVERYONE is brainwashed to believe that stocks outperfrom, you will have a constant bid up of equity prices guaranteeing that they underperform.
For those of us underlings, todays Guardian has a must read "Radical Plan" by the Feds.
The US MSM are way in over their head, and can't let the public know what they need to know about this abuse coup by Wall Street. It's like reading out of a primer entitled for Dumb and Dumber.
The 'market' does not pay a risk premium.
What will be the new financial system look like?
Washington, Franklin, Hamilton and Grant with slanted eyes on our bills
ice article from the awesome Yves Smith, who sleeps odd hours, especially on duration-
Lessons From Modern Economic Crises (Not for the Fainthearted)
Lessons From Modern Economic Crises (Not for the Fainthearted) « naked capitalism
Grassley is good entertainment.
One of fav shows is C-SPAN's Washington Journal. To be a guest you MUST agree to take calls from viewers. Most name politicians treat it like the plaque. To his credit Grassley is an actual pooh bah who will appear. To put it kindly Grassley can get prickly when challenged by 'bob in seattle'.
Jeez people! I could get used to this. Being a born and bred dope and all! Laying about the house. Doing a whole lot of nothing! Can I get someone to pay me do do this? Uh, I can?! Wow! What is unemployment in CT? Foodstamps? Do foodstamps cover toilet paper? hmmmmm!
100 bp rate cut was priced in. DOW lower then when Uncle Ben tipped his hand
Fair Economist writes:
By decreasing the signal and increasing the noise in the channel elected officials will get inferior information and make even worse decisions. If voting becomes random the money donations that bought the bailout get more powerful, not less.
Fair Economist, I was already thinking that your blog post from earlier was very good - but this comment above was the keenest observation I've heard all week.
Crispy Darling,
Here is teh RBS news
FT Alphaville » Blog Archive » The Royal Bank of Scotland, headquartered in Westminster
"I am a dumb, fallen catholic who thinks all organized religion is a way to control the masses. The pope has just been more sucessful than most.
It's ok, swarming masses, money does not mean anything. You must repent and go without! That's right! And don't forget to give on Sunday! We need the $ to pay off lawsuits!"
Why this off-topic barracking of the Catholic Church and religion in general? Is it a way of working off anxiety about the economy?
The Holy Father makes more sense these days than any other public figure I've heard of.
As for the fallen away:
THEY THOUGHT THEY WERE LEAVING
They thought they were leaving the Isle of the Dead
But the mist had mirrored the open sea,
It was the island itself that led
Them further away from the mystery
Streets and houses mounted the hill,
The harbor extended its ivory arms,
The dead who were waiting embraced them all,
Swore they would never come to harm
Hailed their return with kisses of ice,
Received them as if they were honored guests,
But those who have died not once but twice
Have turned their backs on the Isle of the Blessed
\t\t\t\t\t\tPavel
\t\t\t\t\t\tOctober 4, 2008
Fast collapse: Bankers lose all, investors get hammered.
Slow collapse: Bankers loot taxpayers. Investors get hammered.
Taxpayers ultimately lose in either case.
You can see this difference playing out moment by moment as we drag out the collapse as long as possible.
Once all the principal players have gotten everything out they can, I expect we will see days when trading is stopped to prevent free fall.
To put it kindly Grassley can get prickly when challenged by 'bob in seattle'.
I've seen him on Cspan taking calls. He does flare up at people. At least he believes in his idealogies
AC,
Absent numerous Gov't bailouts, bondholders would have replaced stockholders as owners far more often.
There is no guarantee that risk premiums actually account for the risks bourne. Japan is proof of this. So are Tiawan, Argentina, Brazil, Pre WWII Germany, etc.
Maybe so. I guess the mere existence of casinos proves that people will pay a steep price for excitement, even if it guarantees negative returns.
But again, I would argue that the specific (Japan) in no way proves the general (stocks don't outperform in the long-term).
I would need far more examples to be convinced one way or the other.
From Aleph Blog:
"At present, those Europeans that dissed Anglo-American finance have egg on their faces (including the lady who shares my surname). With the competitive rush in Europe to guarantee bank deposits, even Germany switched its policy and guaranteed deposits. That hasnt happened in the US yet, but I wouldnt rule it out."
I agree...further...
"It is possible that the current crisis could destroy the Euro, and possibly the EU. I think of the Confederation, where the economic pressure became so great that an extra-constitutional coup took place to create the Constitution, and implicitly, the fiat Dollar that we live with to this day. WIthout political unity, fiat currencies have short shelf-lives. Alternatively, the crisis could create a Federal Europe where the central government has significant powers to the degree that France in the Eurozone would be similar to Texas in the US. I dont see that as likely; there is not the same degree of trust across the Eurozone as there is in the US."
Totally agree...I think the Euro goes bust or the EU has to centralize further. Note that these are the same issues that faced the USA in its early history, i.e. states rights vs federalism, allocation of power between the states and the central govt.
ZIRP already!!!
Maloney needs to let the man talk.
Blah blah blah, do it already Be
sm_landlord writes:
$100,000: 1980
$250,000: 2008
Oddly enough, $100K in 1980 would be $248,583.50 in 2007 dollars according to Govt stats.
Or working backwards, the dollar is worth only 40% of what it was in 1980.(if I did the math right) I think it's about 20% of 1974.
sweet! my congresswoman maloney on highly leveraged derivatives-
"you had no assets, there was no value on the CDS, you were gambling with trillions of dollars!"
"making your employees rich, destroying a great company and hurting the american people. you need to apologise."
gosh, as it's been said, you steal 100 bucks you go to jail for years, you steal 100 million you get beat up by congress for a few hours.
yay democracy!
Come on folks your momma told you all that, being Frank, Gross Cox with a Dick Fuld and Goldman Sachs and a Grassley Bush or a Brownie Waxman attempting a Lehman never comes out good without Paulson Protection ( which is never 100% reliable).
Thanks Yankee, comments are much appreciated. My gut has been telling me the same thing.
Gavshire Hathaway | 10.07.08 - 1:16 pm | #
If you are looking at the big picture and are connecting the dots, your gut is a better indicator than anything else. I'm going with my gut. And if I am wrong, I can hate myself. But I will NOT be hating myself for sitting motionless like a deer in the headlights, KNOWING I should be doing something, but not taking any action. I guess you could say I would rather be actively wrong than inactively wrong.
Oh shit. Ben Bernanke's beard just burst into flames.
This bearded financier,
with academic veneer,
brings memories of University days
where I strode in a clouded haze,
expounding in intellectual fake
the ins and out of Finnegan's Wake.
Thanks Freud!
Any links for a Bernanke live feed?
Bernanke alibiing why he couldn't bail out Lehman. Jeeze, he's all over the place.
We're in deep trouble, people. There is no underlying philosophy or goal underpinning the Fed's or the government's actions. They're truly clueless.
"Lehman would've required a sizable injection of public funds...much larger than was the case with Bear. And would've involved the assumption of the tax payer of billions in expected losses...Neither the Treasury nor the Federal Reserve had the authority to commit public money in this way."
Pavel
October 4, 2008
Pavel Chichikov | 10.07.08 - 1:21 pm | #
I beg your pardon - you could be right. I will shut up now!
ac,
That's my point....stock ownership is relatively young.
They haven't proven themselves as stand-alone good investments without a comensurate growth in stock-market participation.
When stock buying becomes commonplace and ubiquitous for the general populace, it has proven to underperform.
Worldwide I am unable to find a mature stock market (or immature one for that matter) that has outperformed over the long run. over the last two decades.
CSC,
Whatever yer smokin, I wanna get some too!
"Born and bred Dopes we are."
KO,
Nothing to be afraid of in telling like it is.
Calling things (and people) by their proper name is the beginning of wisdom. Confucius.
I take master's advice.
Jas
Unintended consequence of the short ban - air pocket - BAC goes to build a book and no buyers at 32, you say 30, you say 28, you say 26, you say.....stock down 20%
Live Feed Bloomberg Television Live
More gold coins halted as investors seek haven
"The Mint added in the memo that it's halting the production and sales of several gold and platinum coins while putting a few other coins under allocation sales. The move came after the Mint halted sales of two other coins in September and August."
""Sooner or later, it'll become clear the ETF is not gold. It's a stock," Ferris said."
Pavel,
With as much due respect to the Holy Father that a lapsed Catholic can offer, it is considerably easier to say that money "is nothing" when you don't have to worry about putting food on the table, paying for healthcare, and getting the kids through college.
As a general rule, I don't take advice on how to suffer through an economic crisis from anyone wearing ermine.
Max,
Either clueless or criminal.
Nothing else makes sense.
"You and Spock get up here. Sulu, prepare for warp maneuvers. Aye, sir. Chekov, arm photon torpedoes. Photon torpedoes ready. Warp power to the shields, ..."
Somehow this dialog makes more sense to me than anything I've heard from government leaders.
He is reading from shredder paper at AIG.. He is all over the place.
Why is talking abt oil price ? LOL
HE HAS GONE INSANE FOLKS !!!
Here comes the rate cut, he is talking about inflation easing
bernanke is a disaster. i don;t think they even count how much they are spending. bernanke knows it isn;t worth anything or not going to be worth anything.
The only problem is there is absolutely no where to hide. Fingers crossed the Germans break away.
Begging for Deutschemarks...
Volatility of commodities = inflation uncertain
In creased downside risk to growth = going down, folks
ew post
.Unintended consequence of the short ban - air pocket - BAC goes to build a book and no buyers at 32, you say 30, you say 28, you say 26, you say.....stock down 20%
There is a strategy to profit off this, and it involves very little risk. It's called "stink bidding", and it works like this: Pick a large cap/liquid type of stock, like IBM, BAC, or GOOG. Keep a brokerage account with mostly cash. Put in ridiculous low-ball "Good til cancelled" orders like 100 shares of BAC at 1.00. Sit back and wait to see if your stink bid gets hit. If it does, likely you've hit an air pocket and it will spring back up and you'll make a small fortune.
hey, what happens if you hold DRR and the euro zone collapses?
Psych Nemo.....
Down 200+
Time to fire the soundtrack to "Conan" again. Doom doom doom doom doom doom. Love them kettle drums.
i too am very surprised that some folks here are even thinking about getting long here.
its not about price, its about time.
i dont care if the market is forward looking; 4 quarters is not enough time for all this shit to work itself out.
PPT warming up the helicopters and the printing presses...
Fair Economist,
I will have to disagree with you re the futility of across the board anti-incumbent voting. The way that Congressional districts are structured incumbents have enormous advantages over challengers due to gerrymandering, and incumbents receive enormous financial support from vested interests vs challengers. Incumbents by definition have control over legislation and it is easier for monied interests to get what they want by influencing those who hold the power.
If every House rep lost this election, we would likely see a much different debate over issues at hand as the challengers in different states would have a broad range of constituencies.
In addition, the Constitutional provision for 2 year terms for the House was specifically intended to allow for wholesale change in that legislative body.
gosh, can we not afford beta blocker pills to keep ben's voice from quavering? i know what's going on yet he makes me uncomfortable.
"the tax payer will be either ahead or behind from TARP, no one knows which."
"some experimentation will be needed."
weeee!
Somebody better shut Bernanke up. He's like Bush now. When he talks, the markets tank.
FDIC Proposes Doubling Fees to Boost Insurance Fund
this ship be sinkiiiiiinnnnn!!!!!!
"With as much due respect to the Holy Father that a lapsed Catholic can offer, it is considerably easier to say that money "is nothing" when you don't have to worry about putting food on the table, paying for healthcare, and getting the kids through college.
As a general rule, I don't take advice on how to suffer through an economic crisis from anyone wearing ermine."
This really is off-topic, but I felt I had to defend against a misinformed and gratuitous statement. You might want to look up the Church's positions on economies for a more accurate take.
If you want to continue please write me.
Ben's crappin his pants about now. That REALLY inspires confidence.
ew thread
New thread.
I asked my neighbour about the economic crisis. He calmy replied that he doesn't worry about things like that. He says he leaves it up to the good Lord.
I then asked him if the Lord was long or short.
Give Bernanke due credits. We witnessed Mellon's market discipline approach and the resulting Great Depression. Bernanke's job is to mop up the mess and prevent a similar catastrophic event. Then the pain and work to build a new financial system won't be as intolerable. Witness the disintegration in Europe due to inaction and self-interest, and contrast that to the aggressive and innovative actions by the FED.
Yes, Pavel, the Catholic Church does indeed write humanely and well about "economies."
It is what the Church actually does that is the problem.
Captain Ben: "Warp 11 Mr. Paulson!"
Navigator Paulson: "There is no '11' Captain!"
Captain Ben: [intercom] "Engineering, can you give me emergency SIV power?"
Engineer Bair: "Cap'n aye cinna giv ye inny more. The CP is broken the TED connectors are gapping, the FFR is almost ta zero! She's breakin' up an no pow'r in the universe kin save us."
Kung Fu Panda -
I think you're not giving enough attention to part of Fair Economist's point: if every incumbent loses, then there is no survivor bias toward those who voted against the bailout (or whatever other policy is relevant to the discussion). An across-the-board turning-out would suggest that Americans are simply unhappy, giving no information as to whether voting for/against [substitute your pet policy issue here] was correct.
Stated otherwise, the most valuable data that could be given to a Congressman is that 100% of reps who voted for a relevant issue were defeated, but 0% of those who voted against were defeated. Reps will see that and think, "damn, I'm not going to make that mistake." Anything other than that is adding noise to the signal, as Fair Economist put it.
PS. By the way, for folks watching that nonsense Iranian claim from earlier, see this - "Iran Withdraws Claim on U.S. Plane" - NY Times
Player (to manager): Skip, don't you want to walk with the Lord?
Manager: I'd rather walk with the bases loaded
If every House rep lost this election, we would likely see a much different debate over issues at hand as the challengers in different states would have a broad range of constituencies.
No, we need every rep who defied the overwhelming voice of their constituents to get the boot. If all of them get the boot the next group will say "why should I listen to my constituent when I'll get the boot anyway? May as well take the money and the cushy job and vote for Wall Street".
I'm all for structural reforms vis-a-vis less gerrymandering and some kind of public financing. But neither of those requires thumping out the entire Congress - indeed, it's counterproductive, as I describe above.
ya beat me to it, Margin Call of Cthulhu. Well said.
Pavel: I think I'm adequately informed about the Catholic Church's policies; but it doesn't matter since I'm not talking about what the Church has said. I'm talking about what the Pope has said. Or was he speaking ex cathedra?
I'm not sure about going long, but I cashed out of my short funds today. Too much pressure for me for now.
since I've done that, I anticipate a 500 pt drop in equities.
I think we need hearings to ask congress why their heads was up their behinds. Excessive greed from the big companies, one might submit.
12 years of Catholic school should qualify me for something.
"Yes, Pavel, the Catholic Church does indeed write humanely and well about "economies."
It is what the Church actually does that is the problem."
We've got a young Catholic priest cousin who works part time with a Latino congregation in Detroit, and part time in a small and poor village in Mexico. He's had a gun held to his head by a Mexican cop. That's what this cousin of ours actually does. The order he belongs to counts contemporary martyrs among its number, including a priest who was shot and killed, while working in the Philippines, for opening a hoarder's locked food warehouse during a famine. That's what he actually did.
YTL - lol. My husband was saying last night he needs to sell his stocks so they'll go up and the economy will be saved. Joking - mostly.
MCC, FE, I stand corrected...those that opposed the bailout should not be unfairly punished.
Not sure why MS is going back up. It's not in preferred company with GS and JPM. This same crap happened to Bear and Lehman before they were worthless. I wish that it would just be over with. If shorting was allowed, MS would be bankrupt today. What a disservice to free markets.