The best laid economic plans involve putting off obvious and fundamental problems until the SHTF and then shooting from the hip with wads of cash as you go from crisis to crisis. This ensures that future generations are too burdened with debt to create any kind of credit bubble in the future.
hmm, this problem has been developing for the past year and yet they can't even get their act together to figure out their 'solution' until late sunday night?
is there some magic dust that they take on these 'special' weekends?
From previous thread: "Fred - if the Citi common is not diluted, then JPM, BAC and WFC will ask for the same gift from heaven"
I think Uncle Sam's strategy will be to try and plug the drain in the financials not just citi. IMO, their actions will also be aimed at putting a floor on banks stocks for several reasons: 1. Financials are 19% of the S&P 500 you cannot stop the bleeding in stocks unless you plug financials. 2, Capital Markets are not the economy but they are a fundamental part of it. 3. For the banks to raise meaningful private equity stakes, they need a meaningfully positive share price.
There is no way for us to have a functional financial system until banks are nationalized, shareholders and non-soverign bondholders are wiped out and all senior executives are fired (and prohibited from working in financial companies again). Anything else is just delaying the inevitable.
No at some point the bondholders will see themselves liquidated. The easiest solution from the getgo was ring fence deposits and then let the rest fight it out. CDS is an issue, but the reality is bondholders don;t have a covenant that says they come before taxpayers.
Citi gets the money, hundred billion, car guys twenty five or fifty, O chimes in with another half trillion. In the meantime, disburse the other three hundred and fifty. At what point does the currency represent absolutely nothing????
The U.S. government and Citigroup are working feverishly to hammer out a rescue plan for the beleaguered bank. If all goes according to plan, there will likely be an announcement of some type of plan in a couple of hours
satan, that's harsh even for the prince of darkness.
reality is, i believe, you can't hold it against the guys that are sitting there right now. this started 18 years ago. i was 9 years old. the guys that are there right now are probably as ignorant to most of these issues as anyone else (who doesn't read CR on an hourly basis).
i love the inflation/deflation debates i'd read here a few weeks/months ago. glad to see how that is panning out.
So this breaks one of two ways - TPTB cobble together some bullsh!t bailout that the street nominally accepts and we see a fierce rally (made easier by this being Thanksgiving Day week) OR the wheels totally come off and we go lock limit down and...are there immediate currency/Treasury implications if it's scenario B?
It sound like CitiGroup is doing a Fuld. Arguing about the color of the liferaft being offered instead of grabbing and climbing aboard the first one to come along.
The CNBC sow keeps yammering of the $250,000 guarantee for US depositors. This ignores the fact that the majority of deposits are overseas. Will the American citizens be responsible for non-US deposits?
If the non-Iceland deposits of Icelandic banks are precedents, then who knows.
"Too bad there is not enough honor in these bailouts to include provisions requiring Hari-Kari from the executives."
Hari-Kiri would be less painful for these guys than forcing them to plow back any of their wealth back where it came from! We are talking the greediest people on earth. They rather be shoot than give up a single buck.
Seems being the reserve currency in a global deleveraging event changes things a bit, everyone needs dollars to settle up...and it is not ceteris paribus, other currencies have issues as well.
That said, when the deleveraging is close to being done, I'm with you it seems like the dollar should tank.
I'm just a lowly CPA, with a degree in Economics. My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?
SO YOU'VE DECIDED TO GET OUT OF THE DOLLAR!
Like anyone who realizes that this economic crisis is really a crisis of faith, you've also thought about the fact that our currency is based on faith as well!
NEXT STEP
Where do you put your money instead of dollars?
Commodities? Those are getting hammered, it's a deflation.
Equities? Bonds? Who knows if those companies will still be around!
Oil? People don't drive when they don't have jobs!
Guns? Don't be a lunatic.
Gold? Sure, let me ring up those eggo waffles for you. Can you break an ounce? See: Commodities.
Saving banks is usually perceived as good news by the money men. They search every day for "news" that supports buying rather than selling. In this mess the "good news" has short legs.
It aint onlky the GM execs who neeed to wake up. This from Bloomberg about the union response
"The plan to be presented to Congress may call for rescheduling the cash payment due in 2010 to the UAW trust fund for medical retirees bills, possibly to allow the government debt to be repaid first, the people said.
Such a move would require the consent of the UAW, as would GMs bid to adjust work rules such as the so-called jobs bank that determines how long union workers are paid when factories are idled or closed. Changes to the health fund also would need approval in federal court.
UAWs Role
While UAW President Ron Gettelfinger testified last week in favor of federal loans for the industry, he has said previously he expects GM and the other automakers to make the trust-fund payments as required under the unions 2007 labor contracts.
The UAW is at the bargaining table every day working on things to make these companies, to put them in better shape, Gettelfinger said"
We will see if Obama puts his money where his mouth is in how he handles the UAW Management can loose Stock and bondholders can lose But will the UAW be forced to suffer real losses?
This crap is totally global. CSPAN running UK "Question Time" (one of the best aspects of Parliamentary systems, but I digress).
Some yokel Member of Parliament from some yokel district is bitching to the PM that a "small business owner" in his riding (that's "district" to you Yanks) can only get business loans at prime + 4% instead of the prime -1% he was used to getting and how this just wasn't fair and damn it something needs to be done!
CNBC reports at 9:30PM ET that members of Congress are being consulted about an additional capital infusion for Citi. No details yet ... the situation is still fluid.
I don't think that visitor tracker is very accurate--I personally saw over 3,300 at one point the day of the second bailout vote.
I Believe CR and Krugman
I remember the same thing...
I have forgotten who made that tracker, when I remember, and see him post again, I will post your query.
crispy&cole(Unrated) writes:
Michelle has some nice sweater puppies....just saying
crispy&cole | Homepage | 11.23.08 - 9:33 pm | #
If the writers at SNL had their shit in one bag - they'd do one of those fake commercials for the "Nielsen Ratings Bra!"... Guaranteed to add a 'cup size' and boost your ratings 10%!
If more TARP money goes to C, will that hurt the odds that insurers will get capital infusions? I've read that several insurers have applied for funds, but I haven't heard that any of those applications were approved yet.
gov doesnt have the money doesnt want the exposure. All they want is to pump up the stock price with token measure and hope they can get private capital to saddle up.
Financials are 19% of the S&P 500 you cannot stop the bleeding in stocks unless you plug financials. 2, Capital Markets are not the economy but they are a fundamental part of it. 3. For the banks to raise meaningful private equity stakes, they need a meaningfully positive share price.
Octavio Richetta | 11.23.08 - 9:09 pm | #
Not anymore they arent. Financials are down to only about 13% of the S&P. Then again their share of 08 earnings are less than 5% with expectations falling faster for the financials than for the rest of the market (expectations for 08 are falling for all sectors but Health Care, and for all sectors for 09)
Financials earnings share of the s&P 500 are expected to rebound to just over 15% based on current bottom up expectations, but again they used to account for almost 30% of earnings.
Since the Fed is approaching ZIRP anyway they are going to stop pushing on that string soon. Next up...buying the long bond, corporate debt, MBSes, agency paper, larger currency swap lines with foreign central banks (aka shadow Forex trading). Just watch how "creative" they're going to get.
Octavio Richetta(Good) writes:
please post a link to watch cnbc online. I am in Argentina. I only get Bloomberg via DirecTV
Octavio Richetta | 11.23.08 - 9:43 pm | #
OR - if you are in Argentina then you don't need to watch; you already know how the plot ends - it isn't a happy ending.
Before any deal..we (taxpayers) need all off balance sheet items brought on the books!
The financials balance sheets are so opaque, it's not funny. For all the junk said about the car makers, at least I can look at the financials and have an idea what they have. I have no clue with the banks.
The stock price is irrelevant. Equity markets are tiny - a pimple on the ass of the debt markets. This is about "reassuring" bondholders so Citi can raise more money on their own.
Again - stocks are for suckers and mainstreet - the big players here are holding C debt.
Citigroup to get equity infusion of $10 billion to $20 billion; Citigroup equity infusion wouldn't preclude other actions to bolster bank: report, citing Capitol Hill sources
Dry,
Off topic, but asked you before but think it was on a dead or dying thread. You do anything with JOYG or BUCY? If so what are you hearing about activity and order book, any of it getting cancelled on them. JOYG looks real cheap to me if their order book is solid. Also sort of along the lines of the slowdown in oil exp activity on the longer term picture and the potential for a big time snapback in some fo the commodities if activity every picks up, esp in China
I am not surprised that Paulson is arrogant and incompetent - otherwise he would not have won the trust of George Bush.
But I am stunned that he is this dumb.
Claiming that all major institutions have "stabilized" only days ago; and promising he will not tap the second half of TARP funds; and swearing that he will not indulge in buying bad assets.
Could he have demolished his credibility any more vigorously? While damaging the reputation of the Treasury possibly beyond repair.
Agree...$10 to $20B won't do anything. That must be all the money they have left in the TARP and they will go to Nancy and Harry to get the rest this week...
re: visitor tracker.
Note that the different graphs are averaged different ways.
So the "yearly" graph will show much lower peaks than the "daily" graph.
Thaksin - you could sign up for a trial of XM and stream the US feed from there. But you're not missing much. People are posting everything relevant here.
About what I figured they'd do, if true.
SOS, lie, delay, hide etc. Won't change the final outcome. Are they going to also announce indictments at the same time. Interesting with all this nonsense
going on tonight the SP futures reaction to this point is virtually nil.
Anyone know a site for finding foreclosed farmland properties or farmland property auctions for northern california? When shit gets really bad I'm gonna buy me some riverside acreage up north and house a bunch of my hippy friends there.
Paulson actually ran GS. That is hard to believe that he has been in charge of anything of significance prior. What's been the worst for W, leadership on the war, Katrina, TARP...so many choices.
I was hoping for a week long rally, this isn't helping.
Felix Salmon and Econompic (hat tip reader ndk) summarizes the fundamental risk to the bank, text from Felix, chart from Econompic:
As of June 30, Citigroup had a whopping $820 billion in total deposits -- but its estimated insured deposits were only $126 billion, and fully $554 billion -- yes, well over half a trillion dollars -- was held abroad.
from naked captialism
the problem is not a run on US deposits, but a run on foreign (i.e., Asian and European deposits)
Sure Hank ran Goldman. Big deal. The true test of running something is when something isnt going smoothly. Running GS through the last few years of the bubble could have been done by GWB. Just get the people under you who know what to do, agree with them, let them loose, and there you are. It's only when the recklessness meets reality that we see who the leaders are. All these people we held up as the paragons of finance, respected, adored, were just looters with some finance skills. Big deal. Their true colors are showing quite nicely now, thank you.
This is rich in irony - striking airliner pilots in India are demanding ex-pat pilots be sacked because they earn too much relative to domestic pilots.
Well I had a good time today, went down to the local citigroup office (American Consulate in same building) and finally got to wear my "The End is Nigh" sandwich board!
There's a saying that there are two types of people in business, price people and deal people. Price people care about the particulars of arrangements. Deal people think that any problems with the current deal can be fixed with the next deal. Paulson is a deal person. He is just making this stuff up as he goes along, and knows that he won't be held accountable because he can just pass it on to the next person in a very short time.
Dirk(Unrated) writes:
Dry,
Off topic, but asked you before but think it was on a dead or dying thread. You do anything with JOYG or BUCY? If so what are you hearing about activity and order book, any of it getting cancelled on them. JOYG looks real cheap to me if their order book is solid. Also sort of along the lines of the slowdown in oil exp activity on the longer term picture and the potential for a big time snapback in some fo the commodities if activity every picks up, esp in China
Dirk | Homepage | 11.23.08 - 9:54 pm | #
Hello Dirk - I saw the post really late (catching up) - short answer is 'I don't know' but your analysis seems sound.
These companies were busy as all hell a year ago... some of the firms I work with were positioning their own plants to support their production (these guys use big parts so you do have to plan in advance - you don't just walk in blindly to that kind of business)... we were especially targeting BUCY which had plants in the region.
Then all of a sudden it got slow - real slow. The engineers & buyers they were working with had no time for us or anyone... other fish to fry.
I think mining is getting real soft, real fast & these guys know it & are anticipating. Not like that has never happened to them before [they are wise old veterans of the rust belt].
Long term they are good plays but I'd be real careful in the shorter term. Nothing kills 'hard capital' like a credit crunch.
I'm due to call on them & ask some dumb questions - let you know if I learn anything salient.
Bond Girl(Unrated) writes:
Are they going to throw $10-20 billion at the company just to buy themselves more negotiating time, i.e. until they figure out what the real plan is?
Bond Girl | 11.23.08 - 9:55 pm | #
Daily cash burn times how many days until Jan 20th?
$20 or so bil may not solve C's problems as other banks and companies will start taking their business elsewhere, counterparties will start avoiding anything but overnight exposure to C - the business model will be toast (can I say toaster?)
If the Fed/UST had $X of money that they can throw at a bank with shitty assets, is there a clear choice between (i) capital infusion & (ii) buying of toxic assets at, lets say, mark-to-maturity prices?
I am a little confused after hearing on CNBC that buying of toxic assets would be of greater benefit because it would help the bank to lever-up?!!
If this issue is a lot more nuanced, could someone please briefly explain the nuances.
so.. Next comes a run on citi deposits. Then no one will want to deal with them. 20B buys them what? 1 day or 2??? Next Sunday night there will be another special on CNBC if it doesn't happen Thursday. crap.
OMFG, this story is a plant. Asian markets open, start to head south, and a minor dollop of progress is required. Junior official leaks word to CNBC shills that smaller than expected package is in the works. Asian market stabilize. Negs continue amonst the main parties, for announcement not tonight, but as signaled, before markets open tomorrow.
the business model will be toast (can I say toaster?)
That's my question. After the hoopajoops are all flushed out of the system, how do these banks make money? What will be their revenue model post-hoopajoop era?
Having a lame duck administration doing cpr on citi is not inspiring confidence. These guys just want to get out of town and drop the bomb on Obama. No long term solutions here. Good luck to the new President and God save the USA.
I'm so sad that I am unrated.
Bond Girl | 11.23.08 - 10:25 pm |
From what I've gathered, there are a couple guys here that have you rated pretty highly.
But, at least in my case, Ken's rating system disappeared when I downloaded killfile.
So everyone out there is unrated on my list . . . except that I have no list either. That also disappeared by it says Loading . . . the whole time I'm online.
I am a little confused after hearing on CNBC that buying of toxic assets would be of greater benefit because it would help the bank to lever-up?!!
Believe very little you hear on CNBC. They like pushing the toxic assets solution because 1) they are there to pump the exist system and players, and 2) GE has toxic assets it wants to unload.
I know many have used the words "This will not end well" in describing various events.I think we can start saying "This is not ending well" about everything.
Can corroborate that. Have a relative with a lakefront "resort" in the BC interior (ie, RV hookups and a small motel). Happens to be a huge mine ~20km from the lake - one of those 100 sq. km. open pit mine jobbies.
Last few years, winters at the "resort" have been fabulously profitable as the mine was busting at the seems with work and expansion and there is virtually no excess housing in the area. So the mines were paying $3k/month in season and $1k/month in the depths of winter for 1 bedroom old school motel rooms.
That...has gone. Lots of layoffs at the mine over the past 2 months in particular. Expansion plans on hold. Train car traffic in and out (they haul partially processed "ore"(?) to another site for finishing (hell, it might go direct to China for all I know) - anyway train traffic in and out is way way down.
Somewhere, a party has definitely come to an end...
If the Fed/UST had $X of money that they can throw at a bank with shitty assets, is there a clear choice between (i) capital infusion & (ii) buying of toxic assets at, lets say, mark-to-maturity prices?
For bank capitalization purposes, the latter is preferable. It's like this: If you have a crappy GPA, would you prefer (1) to exchange a bad grade for a good one or (2) just get another good grade?
Bond Girl - that a commenter like you would say you're missing being rated by Cooper's Panoptopicon really says something. The aggregation and ratings are nonsense and those of us remaining who don;t do that scheme simply need to provide thread feedback to keep the conversation going.
HOUSTON (AP) - Astronauts tinkered Sunday with a troublesome piece of equipment designed to help convert urine and sweat into drinkable water, which is vital to allowing the international space station crew to double to six.
I used to live in NYC when the citicorp building opened up in lex and 52?st. What a cool place that was. I loved the free concerts. They had an Alfredo's too. I wonder if it is still there.
Buying toxis assets at market prices does not solve anything as your equity takes a hit - you have less assets but even less equity, so you are even worse off.
Remember that the toxic stuff is Level 3 - so the markdown will happen when it is sold
HOUSTON (AP) - Astronauts tinkered Sunday with a troublesome piece of equipment designed to help convert urine and sweat into drinkable water, which is vital to allowing the international space station crew to double to six. One of the astronauts working on the repair was heard to say, "Aw piss on it".
i guess citibank is trying to calm their customers. i just got an email from them :
Subj: Unlimited FDIC Insurance Coverage on your Citibank Checking Account
Date: 11/23/2008 2:28:48 PM Pacific Standard Time
Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program. Through December 31, 2009, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account. *
And as a reminder, in October the FDIC increased the amount of insurance on eligible savings accounts -- such as savings, market rate, money market accounts, club and holiday accounts, and certificates of deposits -- from $100,000 to $250,000 through December 31, 2009.**
To learn more about FDIC insurance, visit the agency's web site at FDIC: Federal Deposit Insurance Corporation or call a Citibank representative at 1-800-374-9700. You may also call the FDIC at 877-ASKFDIC (877-275-3342) or TDD 800-925-4618.
I thought capital infusion gave the maximum bang-for-the-buck when it came to helping a bank.
Just to be clear, if a bank received $X in capital infusion, all other things being unchanged, it gives them a 10 times X capacity to lend (or whatever leverage ratio is applicable)...correct? And if the toxic assets are purchased, it only makes liquid what that asset is marked as...right?
Probably goes without saying but I am a newbie to this topic. Just trying to learn how 'money-things' work. Thanks in advance.
I was only kidding! It was just funny to me that people post comments with the rating included. I do not rate people, except irritating for trolls, so I can exclude them.
Buying toxis assets at market prices does not solve anything as your equity takes a hit - you have less assets but even less equity, so you are even worse off.
1000% correct. equity injection is equivalent to amount of money above book value of level 3 assets government would be willing to pay and they save cash equivalent to the book value of the level 3 assets. Plus sheeply taxpayers don't get as mad.
NYTimes just published an article with the headline "Plan to Prop Up Citigroup Said to Be Near Approval". Yet, the article then goes to say "It was unclear on Sunday night exactly how the Citigroup arrangement might work. The government and Citigroup executives were combing through Citigroups books and trying to determine the level of losses that it would be willing to bear. " Good luck with doing this over weekend.
Create something and give it away. Some stranger will improve it. No dividends. Small profits. Fuck you Bill Gates you whore. I remember so many people laughing at Linux. Embrace deflation.
the poster fomerly known as ni writes:
HOUSTON (AP) - Astronauts tinkered Sunday with a troublesome piece of equipment designed to help convert urine and sweat into drinkable water, which is vital to allowing the international space station crew to double to six. One of the astronauts working on the repair was heard to say, "Aw piss on it".
And, in a related development, the NASA administrator Michael Griffin has been contacted by Treasury Secretary Hank Paulson to see if the technology could be adapted to help convert urine-soaked Citigroup common stock back into marketable securities.
C is insolvent. everyone knows that. throwing away taxpayer dollars for and insolvent institution violates the 2 principles of central banking
only lend to solvent institutions
only lend on pristine credit at penalty rates
what the first 700B bailout should have been used to do is create 10 banks that have no toxic assetts and let them guarantee the transactions in the supply chain which is what banks purpose is to do.
Let these banks buy up the BK assets of the likes of C, JPM, WB, etc at huge discounts to keep the economy going.
Throwing money at dead banks ensures we have the worst depression ever and massive disruptions and catastrophic disruptions in the economy. They keep this up and they will cause 50% unemployment
The gov has to bail them out now. If they don't the stock will go under 1 and there will be a silent run on the bank (if there isn't one already). At this point why not just lend every bank $1 trillion?
This reminds me of when I make a wrong turn and my Garmin Nuvi says "recaaaaalculating." Of course, this puts me right back on the old path eventually.
So for all of the hoopla, why precisely are they giving the citibankers all that much of a say? (actually a rhetorical question)
Since we're in for a penny/in for a pound, then throw them $20B line and let them survive until Jan 21, 2009.
Then bring in the new guys and nationalize them.
The management is simply being catered to.
Frankly, since my own local bank went to TARP for $300M last week - and their numbers are good - then we should've nationalized the whole damned thing and taken the hit.
Good news! Citibank is participating in the Somali Pirates Temporary Asset Sequestration Program. Until a time of our choosing, all non-US customers' non-interest and interest bearing checking deposit account balances will be held in our secure Special Purpose Mothership Vehicle.
The NYT article says Geithner is involved in the negotiations with Citigroup. I should have realized that before reading it. Somehow I assumed this was just the ongoing Bernanke Paulson show.
Geithner's involvement complicates the entire situation since it implicates Obama's approach to the banks.
What is finally announced could thus be far more significant than C's share price tomorrow morning.
Geithner would have been involved either way, as he was with Bear and Lehman. But I agree that the decision will be viewed as representing the position of the new administratio
Well, if we're going to give C and others all these billions of $$s, why can't we first direct them thru my credit card account? I mean, I'll be happy to not pay my Citi balance this month, then the govt. gives me the money, then I pay Citi, and voila, Citi gets the cash. If we're giving the $$ to Citi anyway, we might as well wipe out some of our credit card debt at the same time. No?
y'know, I spent a lovely weekend seeing both kids in separate plays.
Daughter in Little Shop of Horrors and son in Christmas Carol. Actually sat there and thought that Bernanke would be a great Seymour (Little Shop nerd).
Paulson however, wouldn't make a great Scrooge since Scrooge would've shuttered the banks for poor credit two years ago.
sportsfan writes:
MrM | 11.23.08 - 10:46 pm |
The NYT article says Geithner is involved in the negotiations with Citigroup. I should have realized that before reading it. Somehow I assumed this was just the ongoing Bernanke Paulson show.
Geithner's involvement complicates the entire situation since it implicates Obama's approach to the banks.
What is finally announced could thus be far more significant than C's share price tomorrow morning.
"...Everyone is calling at once, and more often than not, their questions pertain to a singular event that rocked the financial markets, the Fed-financed bailout-cum-acquisition of Bear Stearns by J.P. Morgan Chasea desperate move played out over four hellish days in mid-March, the most significant government intervention in the financial markets since the Great Depression.
Geithner was the central figure in that drama. It was Geithners Federal Reserve bank, not the Treasury, that came up with the $29 billion loan that made the deal possible or, more precisely, acceptable to J.P. Morgan. Geithner brought the parties together, hashed out the details, and demanded answers when things got shaky. ..."
Ok, juvenile Sunday shout-out and alternative to cooper's panopticon:
Bond Girl
Nemo
Uncle Billy
Dawg
Drlyfly
MrM
peakVT
ni
Broward
serf A-G
Thaksin
Misean
And anyone else who's broadly on board.
Feedback is the breakfast of champions, and you nutballs are doing brilliant service. Celebrate nutball day is 1 Dec. If we have a financial system, that is.
yup
second
lame
1st?
Such a pig-tease
So they are saying keep your TV tuned to CNBC?
Whoa.
...and did it without artificial additives.
Thanks CR. The meltdown live.
It's time to short the hell out of something...
Are you allowed to use the phrase "according to plan" when talking about TARP funds?
I'm ok with this getting bailed out so long as not one person who made two nickles and knew what was going on let go and doesn't collect a dime...
Wow, these weekend deals are cutting it closer and closer aren't they?
A few months ago they would have had a deal in place by Saturday noon!
Reports from Washington say the White House is unaware of any government talks with Citigroup.
That is too funny.
Is Bush taking off the last two months or what?
The best laid economic plans involve putting off obvious and fundamental problems until the SHTF and then shooting from the hip with wads of cash as you go from crisis to crisis. This ensures that future generations are too burdened with debt to create any kind of credit bubble in the future.
ades,they all knew. Including the mail room folks. ESPECIALLY THEM.
hmm, this problem has been developing for the past year and yet they can't even get their act together to figure out their 'solution' until late sunday night?
is there some magic dust that they take on these 'special' weekends?
what a joke
Is Bush taking off the last two months or what?
Hell, he's only phoned it in for years now.
From previous thread: "Fred - if the Citi common is not diluted, then JPM, BAC and WFC will ask for the same gift from heaven"
I think Uncle Sam's strategy will be to try and plug the drain in the financials not just citi. IMO, their actions will also be aimed at putting a floor on banks stocks for several reasons: 1. Financials are 19% of the S&P 500 you cannot stop the bleeding in stocks unless you plug financials. 2, Capital Markets are not the economy but they are a fundamental part of it. 3. For the banks to raise meaningful private equity stakes, they need a meaningfully positive share price.
"Is Bush taking off the last two months or what?"
No he gets a woody watching Rubin sweat.
Cp- I am watching the boobs on CNBC flail around.
They should all be fire except for the bald guy.
Madame CC should especially be fired, and Mary Thompson should replace her.
But hey- global financial meltdown should be entertaining. Six folks screaming is not.
I am beginning to think that the current administration is waaaaay out of their depth, and without congress making real deals.
I am waiting for gold to blow out- that signifies we are Iceland.
Someday this war's gonna end...
There is no nice way to say this-
Prepare for widespread bank disintegration in the next 6-9 months.
Disintegration not restructuring or even destruction. It seems they have chosen "slow and painful death"
"Is Bush taking off the last two months or what?"
He took off the last 8 years. scratch that the last 50!
It seems they have chosen "slow and painful death"
--
god bless futurama
"Prepare for widespread bank disintegration in the next 6-9 months."
Banks go down; we all go down with them:-)
Perhaps this will be the end of having to hear about Rubin. finally. The guy is just toxic
But hey- global financial meltdown should be entertaining. Six folks screaming is not.
But I like cleavage...
Major World Indices - Yahoo! Finance
Asia waiting around for the announcement. Gonna have to happen, or EEV shoots the moon again. We cant have that.
Oh boy, bread and circuses!
Will we get to see Vikram fight a lion?
"A few months ago they would have had a deal in place by Saturday noon!"
No way! Benny doesn't work un Saturdays.
Pardners,
Watch 24 tonight..and see if it seems rather pale and lame in comparison to the financial markets.
If so we are in serious trouble.
Giddyup!
336 folks online. And no new comments? everyone reading?
Matt,
There is no way for us to have a functional financial system until banks are nationalized, shareholders and non-soverign bondholders are wiped out and all senior executives are fired (and prohibited from working in financial companies again). Anything else is just delaying the inevitable.
Octavio Richetta writes:
No at some point the bondholders will see themselves liquidated. The easiest solution from the getgo was ring fence deposits and then let the rest fight it out. CDS is an issue, but the reality is bondholders don;t have a covenant that says they come before taxpayers.
Mellon was right liquidate them.
Now 360
Citi gets the money, hundred billion, car guys twenty five or fifty, O chimes in with another half trillion. In the meantime, disburse the other three hundred and fifty. At what point does the currency represent absolutely nothing????
sportsfan
its clear the bush administration isnt even kicking the can down the road any more
like a deer caught in the headlights
capitulation
very dangerous
Small-cap U.S. TWM
the reality is bondholders don;t have a covenant that says they come before taxpayers.
Secured bondholders do come before the taxpayers...
To read the CNBC quote, one might see this as good news.
Why can't the repeated, nauseating MSM positive slant on the putred ongoing corruption be properly presented?
At what point does the currency represent absolutely nothing????
I think it was in 1971
Tick tock, tick tock.
23 Nov 2008 | 06:53 PM ET
The U.S. government and Citigroup are working feverishly to hammer out a rescue plan for the beleaguered bank. If all goes according to plan, there will likely be an announcement of some type of plan in a couple of hours
very dangerous
mock turtle | 11.23.08 - 9:17 pm | #
Soooo true. A power vacuum could make things a whole lot worse a whole lot sooner.
And meanwhile ASX, Kospi ad others start to tank in early trading.
Nicely done. Tank the friends, they'll be sooo alliancy in future.
C
Futyures went tly negative. Someone at GS knows something...
Stock Futures on Bloomberg
Too bad there is not enough honor in these bailouts to include provisions requiring Hari-Kari from the executives.
396 and going up. What was the max count for BS?
musta been around 1000 for BS.
sportsfan writes:
Reports from Washington say the White House is unaware of any government talks with Citigroup.
That is too funny.
Is Bush taking off the last two months or what?
He's taken the last 7 3/4 years off, what's another 2 months.
satan, that's harsh even for the prince of darkness.
reality is, i believe, you can't hold it against the guys that are sitting there right now. this started 18 years ago. i was 9 years old. the guys that are there right now are probably as ignorant to most of these issues as anyone else (who doesn't read CR on an hourly basis).
i love the inflation/deflation debates i'd read here a few weeks/months ago. glad to see how that is panning out.
I rode some Mar '09 C puts from 31 to 14. Glad I'm out now, I guess.
Today Citi sends me checks to transfer funds and then ups my interest from 15 to 21
rich,
regarding yesterday's PM "minors".
These are juniors that I really like:
KGI.TO Canadian property
GUY.TO Guyana with huge upside.
T-120 minutes until vaporization of common stock.
This is gonna get interesting...
US keen to restore confidence in Citigroup -
Business News, Business - The Independent
US keen to restore confidence in Citigroup
By Stephen Foley in New York
Monday, 24 November 2008
So, this is supposed to be good news, right?
But what does it really mean in reality?
Uhhhh....how are they going to use TARP money when they have none left? These has to be new money from the Fed/Treasury...no?
So this breaks one of two ways - TPTB cobble together some bullsh!t bailout that the street nominally accepts and we see a fierce rally (made easier by this being Thanksgiving Day week) OR the wheels totally come off and we go lock limit down and...are there immediate currency/Treasury implications if it's scenario B?
Comrade Scared Shitless writes:
So, this is supposed to be good news, right?
But what does it really mean in reality?
Comrade Scared Shitless | 11.23.08 - 9:25 pm
Bagholder Nation.
Uhhhh....how are they going to use TARP money when they have none left? These has to be new money from the Fed/Treasury...no?
"They" don't necessarily have to. Paulson can't throw TARP money around, but the Fed can loan on pretty much whatever terms it wishes.
crispy..you missed my post at the end of the last thread....Hank has already changed his mind and is going right back after the other $350 bil.
RE: CitiGroup
It sound like CitiGroup is doing a Fuld. Arguing about the color of the liferaft being offered instead of grabbing and climbing aboard the first one to come along.
The CNBC sow keeps yammering of the $250,000 guarantee for US depositors. This ignores the fact that the majority of deposits are overseas. Will the American citizens be responsible for non-US deposits?
If the non-Iceland deposits of Icelandic banks are precedents, then who knows.
NW
Monday will be interesting.
Bagholder Nation.
Anonymous
I'm just a lowly CPA, with a degree in Economics. My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?
I lost my bet that the Broncos would win today. Can I get a bailout for my bad bet?
I am surprised that Yen is holding on to those 84/95 levels
"Too bad there is not enough honor in these bailouts to include provisions requiring Hari-Kari from the executives."
Hari-Kiri would be less painful for these guys than forcing them to plow back any of their wealth back where it came from! We are talking the greediest people on earth. They rather be shoot than give up a single buck.
I have met plenty of folk like that personally.
CONgress has a hold on the other $350B....they will need to ask for the rest of it from Reid/Pelosi...
"Is Bush taking off the last two months or what?"
He's probably emptying the Whitehouse Bar. Do they stock any single malts in there?
Thread music, Touch Me I'm Sick:
YouTube -
Hehe
C
I lost my bet that the Broncos would win today. Can I get a bailout for my bad bet?
That was the biggest trap game on the schedule this week. Probably a lot of people lost their survival pools on that one...
crispy - see :
Obama Eyes $500 Billion in Stimulus; Paulson Weighs Ramping Up Aid Again - WSJ.com
Paulson's flipfloppin is pretty much the standard behavior in clueless crisis mgmt.
"I lost my bet that the Broncos would win today. Can I get a bailout for my bad bet?"
Yes, if you are a bank.
CNBC: "Just do SOMETHING!"
Time to get the gas & scalpels - time for a 'C' Section...
crispy&cole writes:
CONgress has a hold on the other $350B....they will need to ask for the rest of it from Reid/Pelosi...
Why even bother with the fucking formality?
Maybe Reid/Pelosi could just give Pauslon & Bernanke their seats.
CSS,
Seems being the reserve currency in a global deleveraging event changes things a bit, everyone needs dollars to settle up...and it is not ceteris paribus, other currencies have issues as well.
That said, when the deleveraging is close to being done, I'm with you it seems like the dollar should tank.
396 and going up. What was the max count for BS?
You can look back here:
Visitors Online
(Now 445 still rising)
I'm just a lowly CPA, with a degree in Economics. My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?
SO YOU'VE DECIDED TO GET OUT OF THE DOLLAR!
Like anyone who realizes that this economic crisis is really a crisis of faith, you've also thought about the fact that our currency is based on faith as well!
NEXT STEP
Where do you put your money instead of dollars?
Commodities? Those are getting hammered, it's a deflation.
Equities? Bonds? Who knows if those companies will still be around!
Oil? People don't drive when they don't have jobs!
Guns? Don't be a lunatic.
Gold? Sure, let me ring up those eggo waffles for you. Can you break an ounce? See: Commodities.
Yen? Euros? They're all fiat currencies too!!!
Real Estate? LOL
Oh...
Saving banks is usually perceived as good news by the money men. They search every day for "news" that supports buying rather than selling. In this mess the "good news" has short legs.
Paulson's flipfloppin is pretty much the standard behavior in clueless crisis mgmt.
Geoff
An attack like that would work great against a Vietnam war hero running for President against a draft dodger.
crispy&cole writes:
CONgress has a hold on the other $350B
Technically, they don't. They have to vote to stop the next $350B.
"Paulson Weighs Ramping Up Aid Again "
This guy displays no strategic thinking whatsoever. How did he get to be GS CEO? is he getting alzheimer's?
Thanks Geoff!
"But as of now, the government is getting cold feet on plan to buy troubled assets, which leaves direct capital infusion on the table."
Is there really that much to debate about? They are going to lose the money either way.
Sundays were really starting to get boring there for a while....
OK, OK, OK I asked for some more comments but not so many:-)
Comrade Scared Shitless writes:
Bagholder Nation.
Anonymous
I'm just a lowly CPA, with a degree in Economics. My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?
Comrade Scared Shitless | 11.23.08 - 9:27 pm
I assume they will just continue to run up the debt until creditors do two things:
1) Repudiate the dollar as the world reserve currency.
2) Refuse to purchase more debt and actually start selling off the debt they have.
Then things get very interesting...
"CNBC: "Just do SOMETHING!"
Time to get the gas & scalpels - time for a 'C' Section..."
Tee-hee-tee-hee
Gotta love it.
I wish they would just bk C, GM and Chrysler and then move on...shoot these dead companies!!
BOHICA Baby writes:
I lost my bet that the Broncos would win today. Can I get a bailout for my bad bet?
BOHICA Baby | 11.23.08 - 9:28 pm | #
--
no banker made a decision as bad as better on the bronco's. sorry, you're screwed.
Michelle has some nice sweater puppies....just saying
I'm just a lowly CPA, with a degree in Economics. My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?
Comrade Scared Shitless
I'm not a CPA and I don't even have a degree in economics, ergo I'm not qualified to answer your question.
But my education and my experience tell me the Dollar should be toast right about now.
gasparino's cell phone is blowing up, something exciting after the commercial break maybe.
It aint onlky the GM execs who neeed to wake up. This from Bloomberg about the union response
"The plan to be presented to Congress may call for rescheduling the cash payment due in 2010 to the UAW trust fund for medical retirees bills, possibly to allow the government debt to be repaid first, the people said.
Such a move would require the consent of the UAW, as would GMs bid to adjust work rules such as the so-called jobs bank that determines how long union workers are paid when factories are idled or closed. Changes to the health fund also would need approval in federal court.
UAWs Role
While UAW President Ron Gettelfinger testified last week in favor of federal loans for the industry, he has said previously he expects GM and the other automakers to make the trust-fund payments as required under the unions 2007 labor contracts.
The UAW is at the bargaining table every day working on things to make these companies, to put them in better shape, Gettelfinger said"
We will see if Obama puts his money where his mouth is in how he handles the UAW Management can loose Stock and bondholders can lose But will the UAW be forced to suffer real losses?
I bet there is no bailout by tomorrow.
I don't think that visitor tracker is very accurate--I personally saw over 3,300 at one point the day of the second bailout vote.
Technically, they don't. They have to vote to stop the next $350B.
Anonymous
Now that's more like the Congress I know.
Does anyone else think GasBag is just picking up a dead phone to act like he is in the know?
"This ignores the fact that the majority of deposits are overseas. Will the American citizens be responsible for non-US deposits?"
This is one of the key reasons why citi will be saved. The WW banking franchise they are.
This crap is totally global. CSPAN running UK "Question Time" (one of the best aspects of Parliamentary systems, but I digress).
Some yokel Member of Parliament from some yokel district is bitching to the PM that a "small business owner" in his riding (that's "district" to you Yanks) can only get business loans at prime + 4% instead of the prime -1% he was used to getting and how this just wasn't fair and damn it something needs to be done!
"We'll all....
...go down...
...together!"
gasp sais equity infusio to citi
equity infusion 10B - 20B. Great. 1/2 - the entire company is owned by the USG.. right?
Gasparino said "equity injection" and the futures spiked. Hilarious.
Retreating again now.
Love real-time quotes.
Gasbag - "equity infusion"...he just spreads rumors. Will this be dilutive?
all equity infusions are dilutive.
They have $60 billion left over in the TARP...
they will go to citi:-)
Nevermind...now LIEsman is saying they have none left...that is what I thought also.
CNBC reports at 9:30PM ET that members of Congress are being consulted about an additional capital infusion for Citi. No details yet ... the situation is still fluid.
I don't think that visitor tracker is very accurate--I personally saw over 3,300 at one point the day of the second bailout vote.
I Believe CR and Krugman
I remember the same thing...
I have forgotten who made that tracker, when I remember, and see him post again, I will post your query.
crispy&cole writes:
Gasbag - "equity infusion"...he just spreads rumors. Will this be dilutive?
crispy&cole | Homepage | 11.23.08 - 9:37 pm
Dilutive? Absolutely!
How does buying 50bn or 100bn of assets from a company worth 26bn make sense?
Govt guarantees on C debt and counterparty for warrant worth 95% is the way to go. And execs have bonuses clawed back 5 yrs.
crispy&cole(Unrated) writes:
Michelle has some nice sweater puppies....just saying
crispy&cole | Homepage | 11.23.08 - 9:33 pm | #
If the writers at SNL had their shit in one bag - they'd do one of those fake commercials for the "Nielsen Ratings Bra!"... Guaranteed to add a 'cup size' and boost your ratings 10%!
If more TARP money goes to C, will that hurt the odds that insurers will get capital infusions? I've read that several insurers have applied for funds, but I haven't heard that any of those applications were approved yet.
sc U watching cnbc?
gov doesnt have the money doesnt want the exposure. All they want is to pump up the stock price with token measure and hope they can get private capital to saddle up.
By the way, this is Geithner
Before any deal..we (taxpayers) need all off balance sheet items brought on the books!
can I have the online viewing links for CNBC and Bloomberg Pls ?
please post a link to watch cnbc online. I am in Argentina. I only get Bloomberg via DirecTV
"All they want is to pump up the stock price with token measure and hope they can get private capital to saddle up. "
Sounds like a good plan:-)
Octavio Richetta | 11.23.08 - 9:09 pm | #
Not anymore they arent. Financials are down to only about 13% of the S&P. Then again their share of 08 earnings are less than 5% with expectations falling faster for the financials than for the rest of the market (expectations for 08 are falling for all sectors but Health Care, and for all sectors for 09)
Financials earnings share of the s&P 500 are expected to rebound to just over 15% based on current bottom up expectations, but again they used to account for almost 30% of earnings.
How does buying 50bn or 100bn of assets from a company worth 26bn make sense?
For bank capitalization purposes, common stock price is irrelevant.
Since the Fed is approaching ZIRP anyway they are going to stop pushing on that string soon. Next up...buying the long bond, corporate debt, MBSes, agency paper, larger currency swap lines with foreign central banks (aka shadow Forex trading). Just watch how "creative" they're going to get.
$10-20B capital injection? Maybe Gasbagarino missed a decimal point.
I am not at my computer with tv links...I think if you google "freetvchannels" that will bring up the site with all the cable channels
"Not anymore they arent. Financials are down to only about 13% of the S&P."
Ups! I was going by the latest SP500 talksheet on the index:-)
Octavio Richetta(Good) writes:
please post a link to watch cnbc online. I am in Argentina. I only get Bloomberg via DirecTV
Octavio Richetta | 11.23.08 - 9:43 pm | #
OR - if you are in Argentina then you don't need to watch; you already know how the plot ends - it isn't a happy ending.
Cheaters.
I don't care about the ending I care until turkey day:-)
dryfly,
That would be funny if it weren't true....
Before any deal..we (taxpayers) need all off balance sheet items brought on the books!
The financials balance sheets are so opaque, it's not funny. For all the junk said about the car makers, at least I can look at the financials and have an idea what they have. I have no clue with the banks.
2009 coins: replace "E Pluribus Unum" with "Reductio ad absurdum".
There always was a fine line between comedy and tragedy.
All they want is to pump up the stock price...
The stock price is irrelevant. Equity markets are tiny - a pimple on the ass of the debt markets. This is about "reassuring" bondholders so Citi can raise more money on their own.
Again - stocks are for suckers and mainstreet - the big players here are holding C debt.
"The financials balance sheets are so opaque"
Not even CPAs can read them. And anyways a lot of stuff they don't show to you if is off the books.
They have to show the FED though. Specially when they are begging for $$$
Citigroup to get equity infusion of $10 billion to $20 billion; Citigroup equity infusion wouldn't preclude other actions to bolster bank: report, citing Capitol Hill sources
Citi is in the Mercy Seat:
YouTube - Johnny Cash - The Mercy Seat
C
That's it?
"Citigroup equity infusion wouldn't preclude other actions to bolster bank: report, citing Capitol Hill sources"
This line is meant to scare the shorties:-)
10-20 billion? Thats like walking around money, shiiitt.
I Believe CR and Krugman,
It's Corey's site.
Citigroup to get equity infusion of $10 billion to $20 billion
How is that going to help? Didn't C already suck down $30 billion from TARP?
Hanky first talks bazooka, and then when he has it, he hides it away in the closed Phony guy:-) No strategy whatsoever...
Dry,
Off topic, but asked you before but think it was on a dead or dying thread. You do anything with JOYG or BUCY? If so what are you hearing about activity and order book, any of it getting cancelled on them. JOYG looks real cheap to me if their order book is solid. Also sort of along the lines of the slowdown in oil exp activity on the longer term picture and the potential for a big time snapback in some fo the commodities if activity every picks up, esp in China
Are they going to throw $10-20 billion at the company just to buy themselves more negotiating time, i.e. until they figure out what the real plan is?
I am not surprised that Paulson is arrogant and incompetent - otherwise he would not have won the trust of George Bush.
But I am stunned that he is this dumb.
Claiming that all major institutions have "stabilized" only days ago; and promising he will not tap the second half of TARP funds; and swearing that he will not indulge in buying bad assets.
Could he have demolished his credibility any more vigorously? While damaging the reputation of the Treasury possibly beyond repair.
What an utter cretin.
Agree...$10 to $20B won't do anything. That must be all the money they have left in the TARP and they will go to Nancy and Harry to get the rest this week...
"10-20 billion? Thats like walking around money, shiiitt."
No this is lotta money. it is just that we get used to the big numbers.
20 billion is 20 turckloads of gold with 88000 lb of gold calculated at $700/ounce
20 billion is 20 turckloads of gold with 88000 lb of gold [each!]calculated at $700/ounce
"Situation is still fluid......"Ummmm some Peptol Bismal is in order.
If its a $20B equity input, then it's only a token to say the gov't did something.
I'd bet Citi's officers/board are not able to face reality and turned down gov't terms.
The point is this :
FED/TSY cant give free money to C.
Dems are not interested in C. They are rooting for car companies
Also, C isnt the only one in trouble.
MS has NO access to money this weeek
JPM and BAC are in the brink too
obody has the CNBC links ?
BREAKING NEWS...
Somali pirates to get $10-20B also...
Aaagghh. Trying to maintain zombies like Citi as going concerns is not going to work.
I assure you the FDIC is interested in Citi so somebody in the government needs to be interested.
somebody is selling dollars
Forex reserves dip by $5 bn
Maybe it's all American Dreaming:
YouTube -
C
Is this another "kick the can down the road" manuver?
re: visitor tracker.
Note that the different graphs are averaged different ways.
So the "yearly" graph will show much lower peaks than the "daily" graph.
Hey on a positive note we just added 10-20 billion more into the Money Hole. Going to be a lovely fire this holiday seaso
I no longer have the energy to scream OH SHIT!.I do have a rope...
I assume they will just continue to run up the debt until creditors do two things:
1) Repudiate the dollar as the world reserve currency.
2) Refuse to purchase more debt and actually start selling off the debt they have.
Then things get very interesting...
I will take number 2, it will be a buyers strike. Who would current debt holders sell to? Who has money to buy it ?
$20 billion for Citi < $25 billion for Autos... This allows Congress to have a defensible position about turning down the Big 3 this week.
$20 billion buys a little time until Congress comes back from recess and a new administration takes over.
Thaksin - you could sign up for a trial of XM and stream the US feed from there. But you're not missing much. People are posting everything relevant here.
turned on cnbc had to turn it off, too banal.
I no longer have the energy to scream OH SHIT!.I do have a rope...
And the Oakland Raiders won today.
BRIIIIIIIIIIIIIIIING BRIIIIIIIIIIIIIIIIIING
$20 billion for Citi
That's gonna leave a mark-to-market.
Gasbag again, trial ballooning a $10-20 BIL, meaningless infusion, desparate, buying time, testing the market, looking for offers.
Hope their lame efforts are rewarded with with DJI limit down to a 6 handle.
Don't steal my schtick bro!!!
About what I figured they'd do, if true.
SOS, lie, delay, hide etc. Won't change the final outcome. Are they going to also announce indictments at the same time. Interesting with all this nonsense
going on tonight the SP futures reaction to this point is virtually nil.
Anyone know a site for finding foreclosed farmland properties or farmland property auctions for northern california? When shit gets really bad I'm gonna buy me some riverside acreage up north and house a bunch of my hippy friends there.
peAkcredit writes:
Gasbag again, trial ballooning a $10-20 BIL, meaningless infusion, desparate, buying time, testing the market, looking for offers.
Hope their lame efforts are rewarded with with DJI limit down to a 6 handle.
peAkcredit | 11.23.08 - 10:00 pm
lol
Very useful article on WSJ about the financial crisis:
The Fed Is Out of Ammunition --
A discredited dollar is a likely outcome of the current crisis
The Fed Is Out of Ammunition - WSJ.com
Is there a counterargument to this article? It is basically what I have come to believe is the truth.
$20 billion buys a little time until Congress comes back from recess and a new administration takes over.
Yes - thinking the same thing - this has to be but a stopgap. There was WAY to much chitchat this weekend for a "mere" $20B problem.
Haha. Two hours of live production time for nothing.
Hoopajoops,
Along the Russian River is nice.
I wish I could get the last two hours of my life back...
Asian markets doing not to bad.
I think all are waiting for Cs verdict to act. All the more reason for Paulson to adopt dilatory tactics
PeakVT - LOL!!!
It may not buy them time if everyone else thinks like we do.
Thaksin,
Try here?
CNBC Live Video: Watch the Latest Market Reporting and Analysis - CNBC.com
or do you mean?
Live TV/ CNBC TV18
Paulson actually ran GS. That is hard to believe that he has been in charge of anything of significance prior. What's been the worst for W, leadership on the war, Katrina, TARP...so many choices.
I was hoping for a week long rally, this isn't helping.
Looks like Gaspo ridin' the white horse all night long
Back to football...
Felix Salmon and Econompic (hat tip reader ndk) summarizes the fundamental risk to the bank, text from Felix, chart from Econompic:
As of June 30, Citigroup had a whopping $820 billion in total deposits -- but its estimated insured deposits were only $126 billion, and fully $554 billion -- yes, well over half a trillion dollars -- was held abroad.
from naked captialism
the problem is not a run on US deposits, but a run on foreign (i.e., Asian and European deposits)
McCain/Palin put their campaign on hold and rush to DC. Developing...
Octavio Richetta writes:
20 billion is 20 turckloads of gold with 88000 lb of gold [each!]calculated at $700/ounce
Octavio Richetta | 11.23.08 - 9:56 pm | #
or 200 million truck loads of manure at current market price
and that aint shit
Sure Hank ran Goldman. Big deal. The true test of running something is when something isnt going smoothly. Running GS through the last few years of the bubble could have been done by GWB. Just get the people under you who know what to do, agree with them, let them loose, and there you are. It's only when the recklessness meets reality that we see who the leaders are. All these people we held up as the paragons of finance, respected, adored, were just looters with some finance skills. Big deal. Their true colors are showing quite nicely now, thank you.
This is rich in irony - striking airliner pilots in India are demanding ex-pat pilots be sacked because they earn too much relative to domestic pilots.
To Everyone
Love the comedy here. As well as the serious stuff. TY
So which countries have the biggest Citi deposit bases?
And is there a webcam to monitor Monday morning lines/riots at the branches?
Aw, nuts, the horror show is over on CNBC. Back to reading blogs and wsj.com.
CNBC has done a good job on this story, and the bankers and Treasury are aiming where they think the puck is going, but it may be deflected by an ego.
Well I had a good time today, went down to the local citigroup office (American Consulate in same building) and finally got to wear my "The End is Nigh" sandwich board!
I'm just a lowly CPA, with a degree in Economics. My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?
The US dollar is in the midst of the biggest short squeeze in history. It's trading on short-term technicals... not long-term fundamentals.
Same phenomenon as Volkswagen a few weeks back... only much, much bigger.
Octavio Richetta writes:
Banks go down; we all go down with them:-)
No, what we do is dissolve the Federal Reserve and Treasury will issue debt-free and interest-free Greenbacks.
It worked during the Civil War, it worked for post-Weimar Germany.
Trouble is, heads of state that start down that path often mysteriously get a bullet in the brain.
So Pandit refused to sell Smith Barney because he really loves it.
And now taxpayers have to bail him out???
Could we not force him out at 8.00 AM on Monday morning?
"or 200 million truck loads of manure at current market price
and that aint shit"
Wow! What a cool post!
Think about this. Bob Rubin helped create this credit crisis and get C in this mess.
His prodigies will bail us out?
There's a saying that there are two types of people in business, price people and deal people. Price people care about the particulars of arrangements. Deal people think that any problems with the current deal can be fixed with the next deal. Paulson is a deal person. He is just making this stuff up as he goes along, and knows that he won't be held accountable because he can just pass it on to the next person in a very short time.
Banks go down; we all go down with them:-)
No, what we do is dissolve the Federal Reserve and Treasury will issue debt-free and interest-free Greenbacks.
j f kennedy tried that 46 years ago and he got a date with a crossfire
Somebody once said the war to end all wars would begin on the Red Sea.
Maybe he meant the red "C"
cd
I thought Geitner was going to save us.
the manure joke was a bit juvenile..
guess im notsosmart (my original handle here 2 years ago)
Aaagghh. Trying to maintain zombies like Citi as going concerns is not going to work.
PeakV.
Time of the Season
YouTube -
All the saving Geithner was going to do he already did in one hour on Friday.
His prodigies are likely hard at work on the deal at hand.
still not sure is there a citi bailout. I say we make them spell thier name right as part of any deal.
their
(Excellent) thanks for cnbc link!
Dirk(Unrated) writes:
Dry,
Off topic, but asked you before but think it was on a dead or dying thread. You do anything with JOYG or BUCY? If so what are you hearing about activity and order book, any of it getting cancelled on them. JOYG looks real cheap to me if their order book is solid. Also sort of along the lines of the slowdown in oil exp activity on the longer term picture and the potential for a big time snapback in some fo the commodities if activity every picks up, esp in China
Dirk | Homepage | 11.23.08 - 9:54 pm | #
Hello Dirk - I saw the post really late (catching up) - short answer is 'I don't know' but your analysis seems sound.
These companies were busy as all hell a year ago... some of the firms I work with were positioning their own plants to support their production (these guys use big parts so you do have to plan in advance - you don't just walk in blindly to that kind of business)... we were especially targeting BUCY which had plants in the region.
Then all of a sudden it got slow - real slow. The engineers & buyers they were working with had no time for us or anyone... other fish to fry.
I think mining is getting real soft, real fast & these guys know it & are anticipating. Not like that has never happened to them before [they are wise old veterans of the rust belt].
Long term they are good plays but I'd be real careful in the shorter term. Nothing kills 'hard capital' like a credit crunch.
I'm due to call on them & ask some dumb questions - let you know if I learn anything salient.
does anyone know what came out of the "unscheduled" board meeting ?
My dog has fleas in November.
Not good for Citi.
Worse for the stock market.
Bond Girl(Unrated) writes:
Are they going to throw $10-20 billion at the company just to buy themselves more negotiating time, i.e. until they figure out what the real plan is?
Bond Girl | 11.23.08 - 9:55 pm | #
Daily cash burn times how many days until Jan 20th?
Laid Off By Lehman: One Broker's Story
YouTube - Laid Off By Lehman: One Broker's Story
does anyone know where there is a site that charts the skirt lengths?
Thaksin writes:
does anyone know what came out of the "unscheduled" board meeting ?
1) We do not want to sell parts of our company.
2) No one wants to buy us.
3) We will ask the government for money.
$20 or so bil may not solve C's problems as other banks and companies will start taking their business elsewhere, counterparties will start avoiding anything but overnight exposure to C - the business model will be toast (can I say toaster?)
rembr it all started with C 6 months back
this is the second leg of panics
SP futures starting to back off. We'll see what happens tomorrow. Mr. Market not likey.
1) We do not want to sell parts of our company.
2) No one wants to buy us.
3) We will ask the government for money.
Bond Girl
Item 1 is a terrible thing to say when you are broke ?
Why cant they sell some assets in Asia ? They have some very good ones. (rembr last month Cs call center was bought by TCS)
Futures dropping. Not much -- 8 points on the ES -- but trending down.
Reason?
Banking 101 kinda question:
If the Fed/UST had $X of money that they can throw at a bank with shitty assets, is there a clear choice between (i) capital infusion & (ii) buying of toxic assets at, lets say, mark-to-maturity prices?
I am a little confused after hearing on CNBC that buying of toxic assets would be of greater benefit because it would help the bank to lever-up?!!
If this issue is a lot more nuanced, could someone please briefly explain the nuances.
Thanks a lot in advance.
so.. Next comes a run on citi deposits. Then no one will want to deal with them. 20B buys them what? 1 day or 2??? Next Sunday night there will be another special on CNBC if it doesn't happen Thursday. crap.
Dryfly,
Exactly. This does not do squat.
I can't see how they are okay with this plan, it is not like it communicates any level of certainty regarding C's fate.
And what is the threat of "more money might be coming" worth to protect C's stock? If they were going to do something, what is stopping them now?
I'm so sad that I am unrated.
OMFG, this story is a plant. Asian markets open, start to head south, and a minor dollop of progress is required. Junior official leaks word to CNBC shills that smaller than expected package is in the works. Asian market stabilize. Negs continue amonst the main parties, for announcement not tonight, but as signaled, before markets open tomorrow.
CR, more skepticism required.
C
the business model will be toast (can I say toaster?)
That's my question. After the hoopajoops are all flushed out of the system, how do these banks make money? What will be their revenue model post-hoopajoop era?
Having a lame duck administration doing cpr on citi is not inspiring confidence. These guys just want to get out of town and drop the bomb on Obama. No long term solutions here. Good luck to the new President and God save the USA.
So, when does the US Treasury apply to become a bank holding company?
members of Congress are being consulted
feh, why bother?
Someone else said it but the real question is which side of .50 does C's common open up on?..
Ciao
MS
Regarding the banking 101 question...
I meant to ask which option would of be most benefit to the bank (not shareholders, not tax players).
Thanks in advance.
j f kennedy tried that 46 years ago and he got a date with a crossfire
That angle has been thoroughly repudiated. He got the bullet for other reasons. That's not one of them.
I'm so sad that I am unrated.
Bond Girl | 11.23.08 - 10:25 pm |
From what I've gathered, there are a couple guys here that have you rated pretty highly.
But, at least in my case, Ken's rating system disappeared when I downloaded killfile.
So everyone out there is unrated on my list . . . except that I have no list either. That also disappeared by it says Loading . . . the whole time I'm online.
I am a little confused after hearing on CNBC that buying of toxic assets would be of greater benefit because it would help the bank to lever-up?!!
Believe very little you hear on CNBC. They like pushing the toxic assets solution because 1) they are there to pump the exist system and players, and 2) GE has toxic assets it wants to unload.
I know many have used the words "This will not end well" in describing various events.I think we can start saying "This is not ending well" about everything.
Bond Girl(Goddess) writes:
"I'm so sad that I am unrated."
I wrote my own version with finer distinctions of rating.
I think mining is getting real soft...
Yo Dryfly...
Can corroborate that. Have a relative with a lakefront "resort" in the BC interior (ie, RV hookups and a small motel). Happens to be a huge mine ~20km from the lake - one of those 100 sq. km. open pit mine jobbies.
Last few years, winters at the "resort" have been fabulously profitable as the mine was busting at the seems with work and expansion and there is virtually no excess housing in the area. So the mines were paying $3k/month in season and $1k/month in the depths of winter for 1 bedroom old school motel rooms.
That...has gone. Lots of layoffs at the mine over the past 2 months in particular. Expansion plans on hold. Train car traffic in and out (they haul partially processed "ore"(?) to another site for finishing (hell, it might go direct to China for all I know) - anyway train traffic in and out is way way down.
Somewhere, a party has definitely come to an end...
Just heard one of those "Citi never sleeps" adverts - wonder if this is what they had in mind?
So, despite all the talk on CNBC, there is no official word on the bailout of citi yet. right?
Bond Girl(Pussy Galore) writes:
"I'm so sad that I am unrated."
Sorry, couldn't resist. We watched Goldfinger tonight.
3-Month\tT Bill 0.000 0.01 / .01\t\t22:00
If the Fed/UST had $X of money that they can throw at a bank with shitty assets, is there a clear choice between (i) capital infusion & (ii) buying of toxic assets at, lets say, mark-to-maturity prices?
For bank capitalization purposes, the latter is preferable. It's like this: If you have a crappy GPA, would you prefer (1) to exchange a bad grade for a good one or (2) just get another good grade?
Bond Girl - that a commenter like you would say you're missing being rated by Cooper's Panoptopicon really says something. The aggregation and ratings are nonsense and those of us remaining who don;t do that scheme simply need to provide thread feedback to keep the conversation going.
In my humble fkn opinion.
C
Tang 2. New and improved.
HOUSTON (AP) - Astronauts tinkered Sunday with a troublesome piece of equipment designed to help convert urine and sweat into drinkable water, which is vital to allowing the international space station crew to double to six.
I used to live in NYC when the citicorp building opened up in lex and 52?st. What a cool place that was. I loved the free concerts. They had an Alfredo's too. I wonder if it is still there.
does anyone know what came out of the "unscheduled" board meeting ?
Several cases of angina and a couple of fresh listings for beach houses.
I'm waiting for the Sunday Night Special saving GE on CNBC, scheduled for the first week in January.
I sense another flight to "quality" tomorrow.
426 idiots online.
Obama's people are watching the NFL.
426 idiots online.
U conting yourself:-)?
In my humble fkn opinion.
C
Counterpointer | 11.23.08 - 10:36 pm |
Absolutely. I don't need a rating system to tell me who is worth reading.
Actually, I also didn't need one to tell me who to avoid, but I finally got killfile yesterday because of one particulary obnoxious troll.
Sunday Night Football Extra
Buying toxis assets at market prices does not solve anything as your equity takes a hit - you have less assets but even less equity, so you are even worse off.
Remember that the toxic stuff is Level 3 - so the markdown will happen when it is sold
"My education & experience tells me that the Dollar should be toast right about now.
So how does the system continue to defy basic economic principles?"
just about everything else is worth even less. and falling.
HOUSTON (AP) - Astronauts tinkered Sunday with a troublesome piece of equipment designed to help convert urine and sweat into drinkable water, which is vital to allowing the international space station crew to double to six. One of the astronauts working on the repair was heard to say, "Aw piss on it".
i guess citibank is trying to calm their customers. i just got an email from them :
Subj: Unlimited FDIC Insurance Coverage on your Citibank Checking Account
Date: 11/23/2008 2:28:48 PM Pacific Standard Time
Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program. Through December 31, 2009, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account. *
And as a reminder, in October the FDIC increased the amount of insurance on eligible savings accounts -- such as savings, market rate, money market accounts, club and holiday accounts, and certificates of deposits -- from $100,000 to $250,000 through December 31, 2009.**
or call a Citibank representative at 1-800-374-9700. You may also call the FDIC at 877-ASKFDIC (877-275-3342) or TDD 800-925-4618.
To learn more about FDIC insurance, visit the agency's web site at FDIC: Federal Deposit Insurance Corporation
Thanks PeakVT.
I thought capital infusion gave the maximum bang-for-the-buck when it came to helping a bank.
Just to be clear, if a bank received $X in capital infusion, all other things being unchanged, it gives them a 10 times X capacity to lend (or whatever leverage ratio is applicable)...correct? And if the toxic assets are purchased, it only makes liquid what that asset is marked as...right?
Probably goes without saying but I am a newbie to this topic. Just trying to learn how 'money-things' work. Thanks in advance.
Bond Girl --
1) We do not want to sell parts of our company.
2) No one wants to buy us.
3) We will ask the government for money.
You forgot
P.S. I rate you "Beyond Excellent".
hp --
If I got a communication from my bank on a Sunday night reminding me how well-insured my accounts were, I would find a different bank.
It's not rational; it's instinctive.
sportsfan - word. Trolls are like junk mail, I reckon still receive but shred later as necessary.
Like the CapitalOne platinum offers that come through my door every two weeks. Far out.
C
Counterpointer,
I was only kidding! It was just funny to me that people post comments with the rating included. I do not rate people, except irritating for trolls, so I can exclude them.
Good night everyone.
Buying toxis assets at market prices does not solve anything as your equity takes a hit - you have less assets but even less equity, so you are even worse off.
1000% correct. equity injection is equivalent to amount of money above book value of level 3 assets government would be willing to pay and they save cash equivalent to the book value of the level 3 assets. Plus sheeply taxpayers don't get as mad.
NYTimes just published an article with the headline "Plan to Prop Up Citigroup Said to Be Near Approval". Yet, the article then goes to say "It was unclear on Sunday night exactly how the Citigroup arrangement might work. The government and Citigroup executives were combing through Citigroups books and trying to determine the level of losses that it would be willing to bear. " Good luck with doing this over weekend.
- NY Times
Good news! Citibank is participating in the FDIC's Temporary Liquidity Guarantee Program.
Wow. Look at what they're doing for you.
Just think. They care about you so much they are willing to participate in a program in which they are required to participate.
You are one lucky depositor.
Oh don't fall for it CR. Bank equity holders getting wiped out is great news.
Read and rejoice:
Build It. Share It. Profit. Can Open Source Hardware Work?
Create something and give it away. Some stranger will improve it. No dividends. Small profits. Fuck you Bill Gates you whore. I remember so many people laughing at Linux. Embrace deflation.
I'm so sad that I am unrated.
Bond Girl | 11.23.08 - 10:25 pm | #
I don't rate anyone but the 'irritating' - and they get disappeared. So an 'unrated' by me means 'A OK'...
MrM - if they figure out a plan, it will be approved. Thus, it is close to being approved. Problem is, the plan doesn't exist because it cannot exist.
the poster fomerly known as ni writes:
HOUSTON (AP) - Astronauts tinkered Sunday with a troublesome piece of equipment designed to help convert urine and sweat into drinkable water, which is vital to allowing the international space station crew to double to six. One of the astronauts working on the repair was heard to say, "Aw piss on it".
And, in a related development, the NASA administrator Michael Griffin has been contacted by Treasury Secretary Hank Paulson to see if the technology could be adapted to help convert urine-soaked Citigroup common stock back into marketable securities.
News at 11.
cd
Geithner is an idiot
C is insolvent. everyone knows that. throwing away taxpayer dollars for and insolvent institution violates the 2 principles of central banking
what the first 700B bailout should have been used to do is create 10 banks that have no toxic assetts and let them guarantee the transactions in the supply chain which is what banks purpose is to do.
Let these banks buy up the BK assets of the likes of C, JPM, WB, etc at huge discounts to keep the economy going.
Throwing money at dead banks ensures we have the worst depression ever and massive disruptions and catastrophic disruptions in the economy. They keep this up and they will cause 50% unemployment
The gov has to bail them out now. If they don't the stock will go under 1 and there will be a silent run on the bank (if there isn't one already). At this point why not just lend every bank $1 trillion?
Good luck with doing this over weekend.
I would guess a big drawback is that a lot of money people, e.g., Benny don't work on Saturdays.
Rubinomics Recalculated
- NY Times
This reminds me of when I make a wrong turn and my Garmin Nuvi says "recaaaaalculating." Of course, this puts me right back on the old path eventually.
So for all of the hoopla, why precisely are they giving the citibankers all that much of a say? (actually a rhetorical question)
Since we're in for a penny/in for a pound, then throw them $20B line and let them survive until Jan 21, 2009.
Then bring in the new guys and nationalize them.
The management is simply being catered to.
Frankly, since my own local bank went to TARP for $300M last week - and their numbers are good - then we should've nationalized the whole damned thing and taken the hit.
@ Cynical Dude | 11.23.08 - 10:34 pm | #
Thank you.
Good news! Citibank is participating in the Somali Pirates Temporary Asset Sequestration Program. Until a time of our choosing, all non-US customers' non-interest and interest bearing checking deposit account balances will be held in our secure Special Purpose Mothership Vehicle.
Thank you, sir. May I have another?
MrM | 11.23.08 - 10:46 pm |
The NYT article says Geithner is involved in the negotiations with Citigroup. I should have realized that before reading it. Somehow I assumed this was just the ongoing Bernanke Paulson show.
Geithner's involvement complicates the entire situation since it implicates Obama's approach to the banks.
What is finally announced could thus be far more significant than C's share price tomorrow morning.
Frankly, since my own local bank went to TARP for $300M last week -
Homedad43 | Homepage | 11.23.08 - 10:51 pm | #
PNC? Nat City?
and can we please stop rewarding the incompetent with taxpayer cash
Geithner would have been involved either way, as he was with Bear and Lehman. But I agree that the decision will be viewed as representing the position of the new administratio
Well, if we're going to give C and others all these billions of $$s, why can't we first direct them thru my credit card account? I mean, I'll be happy to not pay my Citi balance this month, then the govt. gives me the money, then I pay Citi, and voila, Citi gets the cash. If we're giving the $$ to Citi anyway, we might as well wipe out some of our credit card debt at the same time. No?
"Bond Girl(Goddess) writes:
"I'm so sad that I am unrated."
You aren't unrated in my mind. You are XXX rated.
y'know, I spent a lovely weekend seeing both kids in separate plays.
Daughter in Little Shop of Horrors and son in Christmas Carol. Actually sat there and thought that Bernanke would be a great Seymour (Little Shop nerd).
Paulson however, wouldn't make a great Scrooge since Scrooge would've shuttered the banks for poor credit two years ago.
Scrooge for Treasury Secretary...
sportsfan writes:
MrM | 11.23.08 - 10:46 pm |
The NYT article says Geithner is involved in the negotiations with Citigroup. I should have realized that before reading it. Somehow I assumed this was just the ongoing Bernanke Paulson show.
Geithner's involvement complicates the entire situation since it implicates Obama's approach to the banks.
What is finally announced could thus be far more significant than C's share price tomorrow morning.
New York Fed Chief Tim Geithner - Executives - Portfolio.com
"...Everyone is calling at once, and more often than not, their questions pertain to a singular event that rocked the financial markets, the Fed-financed bailout-cum-acquisition of Bear Stearns by J.P. Morgan Chasea desperate move played out over four hellish days in mid-March, the most significant government intervention in the financial markets since the Great Depression.
Geithner was the central figure in that drama. It was Geithners Federal Reserve bank, not the Treasury, that came up with the $29 billion loan that made the deal possible or, more precisely, acceptable to J.P. Morgan. Geithner brought the parties together, hashed out the details, and demanded answers when things got shaky. ..."
C is insolvent. everyone knows that. throwing away taxpayer dollars for and insolvent institution violates the 2 principles of central banking
The problem is that since the Glass-Steagall act was repealed, regulators were coconspirators in all the crazy stuff the banks where doing.
Since banks are quasi-government institutions now the government and thus taxpayers are in the hook.
There is some thruth to the saying than banks are more important to the US ecenomy than GM.
Ok, juvenile Sunday shout-out and alternative to cooper's panopticon:
Bond Girl
Nemo
Uncle Billy
Dawg
Drlyfly
MrM
peakVT
ni
Broward
serf A-G
Thaksin
Misean
And anyone else who's broadly on board.
Feedback is the breakfast of champions, and you nutballs are doing brilliant service. Celebrate nutball day is 1 Dec. If we have a financial system, that is.
All the best
Counterpointer
"Homedad43 writes:
y'know, I spent a lovely weekend seeing both kids in separate plays."
Remember: If your kid isn't the leading or a lead role, your kid shouldn't pursue drama or singing. It is easy to weed these kids out at an early age.
Dryfly:
Smaller mid-atlantic regional bank, Susquehanna Bankshares.
Article actually said that they were in good shape and would use the money for "strategic" purposes.
PNC bought my old bank, which went belly up from an internal accounting scandal.
That said, PNC actually appears to be handling things fairly well...but what do I know?
Any predictions on the stock market on Monday if Citigroup get the cash? Morning rally perhaps?
if they are putting contingencies for losses, does that mean the money has already been lost?
Max,
Citibank put all the assets in a giant tanker and sent it to the gulf of Aden. The pirates paid a ransom to have it leave.
Bernanke would be a great Seymour
homedad, just because kids in plays are so priceless: some (are you kidding???) thread music:
YouTube - Suddenly, Seymour [scene 16]
I think that the ironic thing about this rating system is people who comment don't care what others think.
Time to bury the gold and undress the lover. Good night now.
Counterpointer -
Cooper's system is not a panoptican;
Haloscan IS a panoptican.
Look up the word before using it 50 times. Thanks
SOMALI PIRATES PAID $700 BN TARP RANSOM TO AVOID C DUMPING TOXIC ASSETS ON ITS SHORES ?
people who comment don't care what others think
If they did CR would e as boring as watching TV:-)
Citibank = Good bank
Schitibank = Bad Bank
or panopticon.
what inning are we in again?