Of the mortgage loans, the biggest chunk of problems are in delinquent first lien mortgages.
1.5bn in non-accrual, 0.5bn in 0-89 days late. They also had about 0.8bn in restructured debt in trouble
Citi is too big for a two day weekend takeover. It feels more like a four-day weekend kind of takeover.
The market is closed Thanksgiving and only a half day next friday. If that doesn't work, New Year's Eve sounds pretty good. Jan 2 the markets are open, but otherwise, you have a 4.5 day weekend.
FORT WORTH, Texas Someone stole nearly $3.2 million worth of boots and parts by hauling away shipping containers in a big rig, police said Friday.
The thefts occurred Labor Day weekend and Nov. 9 at the Justin Boots distribution center, said Fort Worth police Lt. Paul Henderson.
Both times someone cut the locked chain securing the gate, Henderson said. A surveillance video shows a white single-cab tractor entering the property without a trailer and leaving with one three different times.
In the first two thefts, three containers mounted on three chassis were taken, holding 10,740 pairs of boots and 7,400 sets of boot uppers worth nearly $2.4 million, Henderson said. Two of the containers-chassis sets were found empty and the third was still missing on Friday, Henderson said.
In the Nov. 9 incident, two more shipping containers-chassis sets were taken from the same property and were later found empty, Henderson said. The nearly 10,000 pairs of boots in the containers were worth nearly $800,000, he said.
The company was founded in 1879 and has had its headquarters in Fort Worth since 1925. It was bought by Berkshire Hathaway in 2000.
Someone smarter than me have any idea what game is being played?
These are purchases by arbitrageurs called Authorized Participants (APs). They see opportunities to arbitrage between the ETF's closing market price and its Net Asset Value. They can buy up ETF shares for a few more pennies, package them up, and exchange them (at a profit) for the component stocks. However, this is a laborious process.
In the inverse ETFs, there are no component stocks, of course. There's just swap contracts and cash as the underlying. So, I'm guessing the APs are arbitraging between the closing market price and their ability to put shares back to the sponsor at NAV (paid in cash).
Operational experience is no reason to continue the handout's and allowance of avoiding the real issues. We need someone who will force these institutions to change business models based on higher borrowing costs. Having the Fed now at treasury is going to allow the status quo to continue thus keeping the pain extended and prolonged.
I couldn't think of a worse choice for that position. Even Summer's would have been better....come to think of it my cat would have been better grounded n reality.
Push the supposed recovery well out into the next presidency IMO.
MS,
Policy decisions go to the President. The Secretary of the Treasury just executes whatever orders they're given (although they do have input into what those orders are)
Geithner has been a smooth operator, it'll be a good transition from Paulso
This is why ETFs tend to track closely to their NAVs. I once asked an ETF sponsor if there really are institutional traders who will buy up fractional pieces of 500 stocks, put them in a package, and sell them to State Street in exchange for shares of the SPY, just to earn a profit.
The sponsor said, oh yes, the APs are out there because it's a profitable business. But they don't make very much.
"That has been amply illustrated in how he has persuaded Wall Street to take ownership of the issues surrounding credit derivatives: from the plumbing that makes the system function to more aggressive and creative stress-testing to the relationship between hedge funds and banks. His approach has aimed at helping them believe that they are masters of their own destiny rather than miscreants who need to be punished, while extracting improvements in the financial system along the way."
MS,
I think Bush let Paulson do whatever he wanted.
I think the unhappiness with Geithner would have existed with anyone that could have been picked. I see it as a single moment where people are unhappy with the world they live in versus the one they desire. Even if the will, ability, and capability to flip the government on its ear existed, it would be more of a journey than a flip of the switch.
Im sorry, but neither Bush NOR Obama would be competent enough in the area of monetary policy, Fed Actions, Treasury authority, etc, to really know what the right course of action is. He can have some general predisposition to who he wants to hurt or help the most, or base it on some ideology, but you have to understand that the people designing the policy dont even know how it is going to work, they can just suggest to the prez how they think it might work. He has to believe in their expertise. If the decisions were just left up to the current or future prez, with no input, we'd truly be doomed. This isnt a dig on either one, but I can tell you, i know a lot of people who were trained in econ and finance who feel pretty uncertain about what they would recommend and pretty out of their league in terms of knowing what to do. Most of them, in fact.
I think the unhappiness with Geithner would have existed with anyone that could have been picked.
I don't think Volker would have caused unhappiness, except for the people that ought to be unhappy anyway. Like the CEOs of the lucky 9, who are still WAY too happy.
Geithner has been a smooth operator, it'll be a good transition from Paulson
EvilHenryPaulson | 11.21.08 - 5:31 pm
Don't disagree. As a nation, we tilt a bit to the right then tilt a bit back to center, then left etc. The election was not so much an embrace of Obama and his policies as it was a rejection of the too far right tilt of Bush.
Obama will govern to the center. He will be a very good president. Given some fortunate events, he may well enjoy hearing talk of chiseling his visage on Rushmore.
having a competent president at this stage of the game is not going to matter much, if at all. I think that's why he choose a Fed officer.
The time for a competent leader to have a real effect has passed it's time. We needed one for the last 5 year's to avoid what we are going through. Obama has a stacked deck and I think he knows it.
and even that wouldn't have avoided the entire problem....softened it a bit and it would have been a bit like LTCM (size and $ wise) but nevertheless still a problem.
I think -- and hope -- you're right, but now it's out there. It won't go away, even if it's explicitly denied. This is a titanic, colossal, stupid mistake at a time like this.
But it still begs the question of how effective anyone can be with the current situation. As I stated above...he knows he has a stacked deck and picking a Fed officer proves that IMO. IMO there is no leader who can be effective when the system is out of control and is allowed write the rules as it goes.
That is, unfortunately, what we have now...and will have for the forseeable future. The only way to help this out is to raise rates and get this bullshit froth out of the market. That's not going to happen when the arm of the Fed is way too involved. It hasn't so far....any chance of it happening was just removed.
The CNBC 'leak' is complete BS (whenever they have a real leak they have marquee bulletins on TV + web)
However, Obama may get to appoint the most members to the Federal Reserve of any president in history right from the get go (don't remember the numbers, but it's substantial)
If Obama wanted to replace Bernanke the steady way to do it would be to appoint the new members, and then let one of them slide on over to Chairman after one year
"Mr. Summers is likely to be named as an economics adviser as well, two sources familiar with the Obama transition said, with the expectation that eventually he will be named to the Federal Reserve Board, perhaps as successor to Chairman Ben Bernanke."
That's what my take on it was. Same deal as with BSC. BB is just a tool for the congress to beat up on. He never had any power...it's been T.G. since greenspan retired.
MS,
You could argue that there is a small army of advisors with significant input this time. Including Volker, Summers, Rubin, and all the others
I may not know the individual histories of the cast, but it seems Obama is selecting a group of strong veterans irrespective of their biases/vision, and he will try to guide or shape their actions/policies from a macro level.
There is certainly a message of experience and continuity being sent. I think they realize there will be a lot of trouble ahead so they're picking those above second guesses
I never questioned whether life would stop because of this. You response is a bit to simplistic...
What's simplistic is "infrastructure spending", the chimeric catch-all feel-good phrase that lets everyone still believe their 401K and SS accounts will remain intact.
MS,
I think in retrospect BB has been a dithering fool. He early on tried to be innovative by starting the new facilities, discount window cuts, etc He was also cavalier in his 2 years pre-crisis, pretending that words of confidence would be able to keep things under control. Either stupid or a liar to begin, and in the end both.
It wasn't before long that he was dependent on Paulson for new cash and abrogated his independence. He's an empty suit. Might as well commit to keeping the FF rate at 50bp for 2 years, because that is the only tool left in the box
His involvement is not simply limited to an understanding of operations. He apparently was pretty vocal about the decision not to bail out Lehman too.
On the face of it, I think this is a terrible decision. But I am genuinely trying to be open-minded. I could care less what his political affiliations are. This man had a central role in the TARP and related bailouts. I have a hard time appreciating the value he adds, so any input on his achievements would be appreciated.
Even if infrastructure is the plan Obama is going to go with, it will not have any positive effects on J6P until 6-12 months AFTER it gets implemented. That will be pushing any turn around the 4th qtr of 09. The markets will be ashes by then because they are fully engulfed in flames now, albiet some water was splashed on today.
Dryfly reminded me a few days ago that he, Conjure, and a few others on this board, myself included, began to make the argument a couple of years ago that the US economy was headed for a bout of deflation that would be triggered by the eventual collapse of the mortgage backed securities market.
At the time, our comments were, by and large, met with a considerable amount of skepticism, to put it mildly. Eventually, however, we began to win over many of those skeptics.
Now, two years later, we're faced with asset deflation and the prospect of a downturn far more costly, in human and economic terms, than most thought possible.
My favorite closet Austrian, Paul Kasriel, has been laying out the arguments and the facts for some weeks now. He does a better job than I can. His latest daily commentary is well worth the time required to read it.
[As of October 17, 2008, The Community Bank had total assets of $681.0 million and total deposits of $611.4 million. Bank of Essex purchased approximately $84.4 million of The Community Bank's assets, and did pay the FDIC a premium of $3.2 million for the right to assume the failed bank's deposits. The FDIC will retain the remaining assets for later disposition...
The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund will be between $200 million and $240 million. The Community Bank is the twentieth FDIC-insured institution to be closed nationwide, and the third in Georgia, this year]
681 assets, 240 cost to FDIC. Good work Sheila, only ~35% underwater.
To me the banking system is pretty much like some interstate offramp with all the fast food joints.
They all might have a different sign out front but the food ( money) is all
coming from the same kitchen ( the USG).
Wendy's, McDonald's, Burger King, Citi
JPM, BAC. It all under the Fed and Treasury now so the marquee out front is just a nod to private enterprise.
The debt is guaranteed, the deposits guaranteed and soon policy will be set
from Washington. The facade of an independant banking system will be kept for as long as possible but the banks are effectively nationalized already.
That being the case, who better to be the new Treasury Secretary than the man who has been nationalizing them?
Broward, there are people on this board whom I like, those I detest, those I find irritating, amusing, hilarious, insightful, prickish, hateful, clever, etc.
You . . . I worry might be a dangerously unstable lunatic.
History will reflect the role played by Harvard in training our MBAs and government officials in the end of our republic.
The best and brightest indoctrinated in being confident in any decision they make. The minority has always ruled the majority. My Harvard degree makes it so.
Either boot Bernanke now or don't, but for gold's sake, don't create a lame duck Fed Chairman for the next two years.
So one could argue that BB has been a lame duck chair for over a year now. When Congress created the FDIC and the FRB, it wanted those positions to be outside of political control from the Executive, hence the staggered terms and quasi-independent federal agency status. Unfortunately, it seems that HP's fingerprints have been over every single decision made during the past 1 1/2 years.
Question is whether TG is going to utilize the HP playbook, or is he going to let BB and SB operate independently? Or should he?
As I recall, at the time the TARP was
first proposed you could have bought all the major banks for less than $700 billion. Of course you would have acquired all their toxic goop too but the idea was that with $700 billion you could've funded 10 or so strong regional banks to take up the necessary banking functions of the nation.
Question is whether TG is going to utilize the HP playbook, or is he going to let BB and SB operate independently? Or should he?
I always felt the independence of the central bank was a bit of a joke. If you're independent, except during times of crisis, what is the point?
Nevertheless, if you want to increase the (appearance of) independence of the central bank, mentioning the replacement of the Fed Chairman in the same blog post as the announcement of the new Treasury head is not the way to do it.
Paulson is also adamant that the weak must be eaten by the victors that get financing from the government.
So Citi is to be broken up in different divisions, and sold to different banks around the world. However no bank wants toxic junk, so they'll trot out the good bank/bad bank model.
The Treasury would parcel of Citi, with the proceeds going towards covering the losses of the bad bank, until which point the Treasury covers any further shortfall.
The problems are:
Paulson has not been very friendly with foreign governments, and that slows things down
Banks will need government loans to acquire parts of Citi. Expect something like 1/4 paid in cash, 3/4 in loan from government
Citi cannot do a regular bankruptcy, not even because of counterparty risk. It's because it would cause a tremendous destruction of leverage even within Citi and the government is trying to keep money supply up at all costs.
I don't really think the resolution to the Citi problem will be as simple as what I have described. It's too big to fail, and too weak to live -- it is a zombie bank, and it is much easier to drip feed it than to cure or kill it
Unit472 writes:
As I recall, at the time the TARP was
first proposed you could have bought all the major banks for less than $700 billion. Of course you would have acquired all their toxic goop too but the idea was that with $700 billion you could've funded 10 or so strong regional banks to take up the necessary banking functions of the nation.
That's crazy talk. Why do something rational that would help the country? We have bonuses to pay man!!
Perhaps I'm being a little bit too federalist, but I think that there should be somethings that are left strictly to local politics, especially given the monetary constraints at that level. To me, this overt attempt by the President-Elect to control politics at the local level is dangerous.
Basically, no one at the local level can compete if in the cross-hairs of Plouffe and his political machinery.
re: Basically, no one at the local level can compete if in the cross-hairs of Plouffe and his political machinery
How is this different from the last 15 or so years of anti-evolutionists taking over school boards in red states? Dobson and co organized that from Colorado. There are lots of disaffected progressives who have rallied around the new prez. If Washington helps them work locally, well. Payback.
How is this different from the last 15 or so years of anti-evolutionists taking over school boards in red states? Dobson and co organized that from Colorado. There are lots of disaffected progressives who have rallied around the new prez. If Washington helps them work locally, well. Payback.
The thing about Citi is what if its depositors flee?
Felix Salmon noted that, as of June 30th, Citi had $820 billion in total deposits but some $554 billion of that
was held ABROAD. Only $126 billion was
FDIC insured ( at that time).
If this is, in fact, the case then no matter what HP, TG or SB decide they want to do with Citi events could decide for them.
WASHINGTON (AP) -- Georgia regulators have shut down The Community Bank, the 20th failure this year of a federally insured institution.
The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Loganville, Ga. It had $681 million in assets and $611.4 million in deposits as of Oct. 17.
The FDIC says all the bank's deposits and about $84.4 million of its assets will be acquired by Bank of Essex, of Tappahannock, Va. Its four branches will reopen Monday as offices of Bank of Essex.
The agency said depositors of The Community Bank will continue to have full access to their deposits.
Unit472 writes:
As I recall, at the time the TARP was
first proposed you could have bought all the major banks for less than $700 billion. Of course you would have acquired all their toxic goop too but the idea was that with $700 billion you could've funded 10 or so strong regional banks to take up the necessary banking functions of the nation.
Yes. And then fire management, get rid of the stock dividend, and drastically reduce bonuses at profitable firms. Get rid of bonuses at money losing firms.
As someone from the finance industry, the prime reasons for large bonuses used to be performance incentives and keeping employees from leaving. In the current environment, we would be much better served with moderately fewer employees at much lower average comp. Instead, we are getting across the board reductions in headcount at only slightly reduced compensation. That does not save cashflow in the short term. You have to pay a lot of severance, accrued vacation, and bonuses anyhow. You have a lot of empty space which you won't be able to sublet for a while. Spare computer and office equipment just sits around. You also reduce your topline revenues because in many departments the people you have can't handle current workloads, they couldn't take much new business.
Unit472 said" Felix Salmon noted that, as of June 30th, Citi had $820 billion in total deposits but some $554 billion of that was held ABROAD. Only $126 billion was FDIC insured ( at that time)."
How much of Citi's deposits are in Iceland or Hungary or...?
@Volker the Viking:
"he may well enjoy hearing talk of chiseling his visage on Rushmore"
I supported the President-elect, and believe his administration will be the right one to face the problems as they are presented, and he may well be a great President.
But a President gets immortialized on Rushmore for creating, defining, preserving, or empowering the United States. I doubt that Mr. Obama will be faced with the need to do any of those things.
You did, however, say "enjoy hearing talk." And Reagan, if he was still lucid when that talk went around, probably enjoyed it, as did GWB in the days between 9/11 and the Iraq war.
[Once again, I'm posting on the cusp of a new thread, but it's going here.]
Friends, citizens, people of this great Forum, lend me your ears. The republic is fragile, the predations of the Paulsonians have been great. Hope is fleeting. There are storms gathering and we must prepare.
The Paulsonians may have been vanquished, and the pursuit of the afterguard continues.
Rejoicing may be tempting, but we face a new danger.
We hear of the approach of the Geithnerians. Timonius has already crossed the rubicon, and demonstrated his mettle in combat.
Be ever fearful for your tithes. Our harvest is not certain, and the seed corn must be preserved.
We await the day, ever pressing thence, to say with certainty amid the gloom, now, fiat lux.
High savings, heavy capital investment, opposite in their major trading partner
I think that the big difference is the demographics. Japan is structurally limited in increasing aggregate demand domestically because of its population dynamics. On the other hand, China still has hundreds of billions of potential consumers.
It's not. That's my point.
Basel Too | 11.21.08 - 6:50 pm | #
The difference is that they're not hateful, mouthbreathing cretins that believe the earth is 6000 years old and gay people and minorities are subhuman?
WhooHoo score another bank failure for the Atlanta suburbs ! The Community Bank went down because of it's loans to Atlanta area builders and developers ( 82% of all loans were C&D). I think I read recently that 45% of their "assets" were distressed & deliquent loans. This is up from 15% problem assets to total assets in the first quarter of this year.
The difference is that they're not hateful, mouthbreathing cretins that believe the earth is 6000 years old and gay people and minorities are subhuman?
You're being too binary and missing the point. The problem is not that the wacko evangelicals are right, it's that there may be multiple alternatives. One of the pillars of the Constitution is that there should be separation between the state and federal governments; in fact, under the 10th Amendment, they are co-equal sovereigns.
Perhaps I'm being a little bit too federalist, but I think that there should be somethings that are left strictly to local politics..."
I posted that link not because I approve or disapprove, or have some criticism to make of it. No one knows how it or the next four years are going to turn out. But this kind of centralized, flexible, perhaps potent form of political organization is something new in the US, isn't it, where political organization is typically temporary, limited, ad hoc and based greatly on patronage? It has the possibility of becoming a movement, though it may never come to that.
I believe it may be a reaction not only to technological possibilities, but to the demands and stresses being placed on society and the economy.
EvilHenryPaulson(Unrated) writes:
Volker was never in the running. He's too tied up
EvilHenryPaulson | 11.21.08 - 5:44 pm | #
Volcker has already said over & over he would NOT repeat the 80s... that was then this is now. The folks who idolized Volcker for his 20% interest rates would be the most disappointed of anyone - he wouldn't do it that way now. No chance.
The had been riding on fumes for all of Q2 and Q3.
I wonder how much more damage hd been done in the last 7 months - FDIC should have KO'd Downey last spring!
BUT IF YOU WANT TO SEE SOMETHING REALLY SCARY, HOW ABOUT THE DTCC?
If you know about the DTCC, then you understand that it is CEDE which owns 99% of all of the securities traded' in the USA - unless you have that stock in a safety deposit box or otherwise in your possession, you do not own it - if you bought it through a broker, you are only the legal beneficiary of any proceeds from the stock for the period of time it is registered to you - when you make a trade, they don;t move the paper certificate like they used to, just the registration of the beneficiary - a company owned and controlled by the DTCC - CEDE (funny, eh?) is the only legal 'owner' of the stocks - this all is a product of the electronic age, and allows for the speed of modern commerce - but you and I dont own shit. Here it all is:
first
First? Hows about that one I heard today..
CitiBank I think they called it?
me first
meh ... not even close.
isn't Shittybank supposed to be sold for parts today?
Look out for the black sedans...
Maybe they wait until Thursday for Downey - and order Turkey Pizza instead of pepperoni... give them a few extra days.
Nemo.
IN GOD WE TRUST' IS GONE from the new dollar, where is God?
fifth
Nemo is getting slow these days.
Down goes Haloscan!
"dryfly writes:
Maybe they wait until Thursday for Downey - and order Turkey Pizza instead of pepperoni... give them a few extra days."
Leftover turkey pizza is even better than fresh turkey pizza. Maybe they should wait until Friday.
Market up and the insanity continues...
the sooner we get Downey and FirstFed taken out, the better the system will be.
DSL! Book it!
DOWNey. [scratches self behind ears, wags tail.]
Off-topic: San Fran/San Jose housing
I've seen the anecdotal reports of high 2x income households just waiting to buy the house they want
Northern California FHFA Home Price Appreciation Tracker
OFHEO prices still have 50% to fall without overshoot to reach the inflation trend since the 70s
"Welcome to the Hotel California...Such a lovely place....."
Re previous thread on CA unemployment, the Mercury has an item on pawn shops:
Cassidy: San Jose pawn shop a gauge of economic downturn - SiliconValley.com
That reminds me..I have some pizza cupons I've been saving. I wonder if the delivery guy will take C shares?
You'd think the FDIC would have a better internet connection than DSL for the Irvine office...
Huh?
Oh, nevermind.
Erm, Irvine's kinda a stones throw from Newport Beach.
Nostrovia,
rew writes:
Re previous thread on CA unemployment, the Mercury has an item on pawn shops
In the spririt of the times - when buying used will do, CA pawn shops are the safest place to buy used itmes. They are heavily regulated and policed.
Re: Obama/Geithner
Out of respect to CR, I'll defer.
BTW, did ya hear the story of the Zen master and the little boy?
YouTube -
FDIC info on Downey, most recent Sept report
here
Of the mortgage loans, the biggest chunk of problems are in delinquent first lien mortgages.
1.5bn in non-accrual, 0.5bn in 0-89 days late. They also had about 0.8bn in restructured debt in trouble
re: Geithner
He's the best operational guy who can move in. He's frankly the only choice for the time we're in.
funny i just finished eating a pizza!
Don't rock the boat, don't tip the boat over.....
how soon til we get a PCA sighting?
Citi is too big for a two day weekend takeover. It feels more like a four-day weekend kind of takeover.
The market is closed Thanksgiving and only a half day next friday. If that doesn't work, New Year's Eve sounds pretty good. Jan 2 the markets are open, but otherwise, you have a 4.5 day weekend.
"how soon til we get a PCA sighting?"
Didn't he just capitulate and go short?
mp got it mostly right about today...maybe we'll get that market limit up on monday when the future 'big stimulus' sinks in.
I follow EEV (Double Inverse Emerging Markets) and DXD (Double Short Dow) pretty closely and there has been really strange after hours trading.
People keeping buying this stuff 3-4 points above the ask.
Someone smarter than me have any idea what game is being played?
c&c - shouldn't that be, DOWNEY goes Frazier?
c&c,
Guess Forman pulled his punches today.
Nostrovia,
JDOG,
Dunno but sometimes they are trading on the futures action AH...the futes lock down for the weekend 15 minutes after the market close IIRC.
Boy, Maria's nightstand cowboy must really be at full power after sitting in the charger for an entire week.
Comrade Misean is Dope(Unrated) writes:
c&c,
Guess Forman pulled his punches today.
Nostrovia,
Comrade Misean is Dope | 11.21.08 - 4:51 pm | #
Every fighter has his price...
bearly: comment of the day!
So has it been how many Sundays since we had a "save the markets" announcement before the Asian markets open - are we about due for one here?
That or a ban of shorting financials for a bit?
Hoodathunk that Downey would last longer than Citibank?
@citizen energyecon
Thanks!!
Foreman loaded up on his shorts while Frazier was bobbing and weaving...the Rope a Dope is a tried and true strategy
dryfly,
Yeah and these guys are rich.
Nostrovia,
So then, let's start a DSL "The-Cost-to-the-FDIC-is..." pool !
I put the number at $1.73B
Looks like Warren is taking some more losses...
Police say more than $3 million in boots stolen
© 2008 The Associated Press
Nov. 21, 2008, 12:18PM
FORT WORTH, Texas Someone stole nearly $3.2 million worth of boots and parts by hauling away shipping containers in a big rig, police said Friday.
The thefts occurred Labor Day weekend and Nov. 9 at the Justin Boots distribution center, said Fort Worth police Lt. Paul Henderson.
Both times someone cut the locked chain securing the gate, Henderson said. A surveillance video shows a white single-cab tractor entering the property without a trailer and leaving with one three different times.
In the first two thefts, three containers mounted on three chassis were taken, holding 10,740 pairs of boots and 7,400 sets of boot uppers worth nearly $2.4 million, Henderson said. Two of the containers-chassis sets were found empty and the third was still missing on Friday, Henderson said.
In the Nov. 9 incident, two more shipping containers-chassis sets were taken from the same property and were later found empty, Henderson said. The nearly 10,000 pairs of boots in the containers were worth nearly $800,000, he said.
The company was founded in 1879 and has had its headquarters in Fort Worth since 1925. It was bought by Berkshire Hathaway in 2000.
404 Error, No such article | Chron.com - Houston Chronicle
These are purchases by arbitrageurs called Authorized Participants (APs). They see opportunities to arbitrage between the ETF's closing market price and its Net Asset Value. They can buy up ETF shares for a few more pennies, package them up, and exchange them (at a profit) for the component stocks. However, this is a laborious process.
In the inverse ETFs, there are no component stocks, of course. There's just swap contracts and cash as the underlying. So, I'm guessing the APs are arbitraging between the closing market price and their ability to put shares back to the sponsor at NAV (paid in cash).
The angle of price declines in CA is so much steeper this time around.
In the Nineties slump it was like 15 degrees... now it's 160 degrees.
It's gotta undershoot by slicing at least 20% below inflation trend. Back to the 1990 top?
That might be the sweetest buy opportunity for a century.
You know who's to blame for all this?
Women. I can't prove it, but I know it's true.
anonymous writes:
how soon til we get a PCA sighting?
anonymous | 11.21.08 - 4:44 pm
And will the next post be "Well, look what the cat dragged in .."?
Waitaminute,
Broward is that you?
. It was bought by Berkshire Hathaway in 2000.
404 Error, No such article | Chron.com - Houston Chronicle 6125281.html
citizen energyecon | Homepage | 11.21.08 - 5:01 pm | #
LOL!!
Warren is using them keep his feet from getting wet...since he is so far underwater on his GE and GS
We've really come to get it backwards in this country.
It used to be you'd want a good economy, making stuff, creating jobs, creating value, so that people could earn money and buy a home.
Now it's bass ackwards.
Instead, all the talking heads are saying people need to buy homes and support home prices so that the economy can recover and create jobs, etc.
Effect has become cause and cause effect. Where did we go wrong?
@Rich
Thanks for the education...lot's to learn!!
<a href="http://www.freeimagehosting.net/image.php?5e0387a32f.gif>One final chart - what I think of this market
Thanks for the grin PCA
Broward is that you?
PutItOnMyTab | Homepage | 11.21.08 - 5:05 pm | #
Comment of the year, LOL!
ehp-
Operational experience is no reason to continue the handout's and allowance of avoiding the real issues. We need someone who will force these institutions to change business models based on higher borrowing costs. Having the Fed now at treasury is going to allow the status quo to continue thus keeping the pain extended and prolonged.
I couldn't think of a worse choice for that position. Even Summer's would have been better....come to think of it my cat would have been better grounded n reality.
Push the supposed recovery well out into the next presidency IMO.
Ciao
MS
Geithener is soft. A perfect puppet for wall street.
I literally thought he was going to cry in his testimony before CONgress explaining the Bear Stearns give away.
For crying out loud, Geithner is SO STUPID he couldn't even recognize the biggest credit bubble in history. Dingbat.
MS,
Gotta agree with that one.
These guys think they deal their way out of this, so they're gonna crash the system.
Nostrovia,
PCA,
Bon anniversaire(?)
CR,
Can you elaborate on why you think Geithner was a great pick?
Police say more than $3 million in boots stolen
Somali pirates diversifying?
MS,
Policy decisions go to the President. The Secretary of the Treasury just executes whatever orders they're given (although they do have input into what those orders are)
Geithner has been a smooth operator, it'll be a good transition from Paulso
This is why ETFs tend to track closely to their NAVs. I once asked an ETF sponsor if there really are institutional traders who will buy up fractional pieces of 500 stocks, put them in a package, and sell them to State Street in exchange for shares of the SPY, just to earn a profit.
The sponsor said, oh yes, the APs are out there because it's a profitable business. But they don't make very much.
I can't believe nobody else has said this:
These boots were made for walkin'
And that's just what they'll doooo. .
Etc.
Warren is using them keep his feet from getting wet...
crispy&cole
Now about that timing of the five year military deal, mmm
ehp-
you really think that Bush has been dictating policy??
that's pretty funny.....and slightly naive for someone of your intelligence.
The Fed dictates policy...and this cements that for the forseeable future.
I'm not attacking you....just think you should know a bit better...
Ciao
MS
Every Obama appointee so far was an underling in Clinton's cabinet.
Clinton truly was our first black president, then.
MS-
EHP was right. A COMPETENT president dictates policy.
"Clinton truly was our first black president, then.
Charles Kiting | 11.21.08 - 5:38 pm | "
You didn't know that?....
Of course he was.
Ciao
MS
From NYT article on Geithner:
"That has been amply illustrated in how he has persuaded Wall Street to take ownership of the issues surrounding credit derivatives: from the plumbing that makes the system function to more aggressive and creative stress-testing to the relationship between hedge funds and banks. His approach has aimed at helping them believe that they are masters of their own destiny rather than miscreants who need to be punished, while extracting improvements in the financial system along the way."
Was this meant to be ironic?
MS,
I think Bush let Paulson do whatever he wanted.
I think the unhappiness with Geithner would have existed with anyone that could have been picked. I see it as a single moment where people are unhappy with the world they live in versus the one they desire. Even if the will, ability, and capability to flip the government on its ear existed, it would be more of a journey than a flip of the switch.
depends of what your definition of well hung is.
Im sorry, but neither Bush NOR Obama would be competent enough in the area of monetary policy, Fed Actions, Treasury authority, etc, to really know what the right course of action is. He can have some general predisposition to who he wants to hurt or help the most, or base it on some ideology, but you have to understand that the people designing the policy dont even know how it is going to work, they can just suggest to the prez how they think it might work. He has to believe in their expertise. If the decisions were just left up to the current or future prez, with no input, we'd truly be doomed. This isnt a dig on either one, but I can tell you, i know a lot of people who were trained in econ and finance who feel pretty uncertain about what they would recommend and pretty out of their league in terms of knowing what to do. Most of them, in fact.
This just in on CNBC: "Obama Likely to Consider Summers to Succeed Bernanke"
Who the #!@^& would leak this? This is a TOTAL DISASTER.
If anyone has some good anecdotes of Geithner, please do share. I only know as much about him as I've had to know in order to follow the ongoing saga.
I do know he is particularly well connected, which also means there ought to be a number of sharp knives out there with his name on them
I think the unhappiness with Geithner would have existed with anyone that could have been picked.
I don't think Volker would have caused unhappiness, except for the people that ought to be unhappy anyway. Like the CEOs of the lucky 9, who are still WAY too happy.
"Who the #!@^& would leak this?" CNBC floating a trial balloon ?
Geithner has been a smooth operator, it'll be a good transition from Paulson
EvilHenryPaulson | 11.21.08 - 5:31 pm
Don't disagree. As a nation, we tilt a bit to the right then tilt a bit back to center, then left etc. The election was not so much an embrace of Obama and his policies as it was a rejection of the too far right tilt of Bush.
Obama will govern to the center. He will be a very good president. Given some fortunate events, he may well enjoy hearing talk of chiseling his visage on Rushmore.
Volker was never in the running. He's too tied up
Gary-
having a competent president at this stage of the game is not going to matter much, if at all. I think that's why he choose a Fed officer.
The time for a competent leader to have a real effect has passed it's time. We needed one for the last 5 year's to avoid what we are going through. Obama has a stacked deck and I think he knows it.
and even that wouldn't have avoided the entire problem....softened it a bit and it would have been a bit like LTCM (size and $ wise) but nevertheless still a problem.
Ciao
MS
" Likely to Consider"
I call bullshit on this "leak".
MS, the country is truly in a tough spot, but I believe with the right leadership and a massive infrastructure program, life will go on.
It always has.
Re: Summers
I think Summers ruined any chances for any position requiring Senate approval with his sexist remarks concerning the cognitive abilities of women.
I call bullshit on this "leak".
I think -- and hope -- you're right, but now it's out there. It won't go away, even if it's explicitly denied. This is a titanic, colossal, stupid mistake at a time like this.
The Weekly World News (the one with the Batboy logo) is reporting that Somali Pirates are purchasing Citibank.
SOMALI PIRATES TO ACQUIRE CITIBANK | Weekly World News
I think the unhappiness with Geithner would have existed with anyone that could have been picked.
I disagree. But maybe that's my part ownership of AIG talking.
ehp-
substitute Cheney for Bush and I agree.
But it still begs the question of how effective anyone can be with the current situation. As I stated above...he knows he has a stacked deck and picking a Fed officer proves that IMO. IMO there is no leader who can be effective when the system is out of control and is allowed write the rules as it goes.
That is, unfortunately, what we have now...and will have for the forseeable future. The only way to help this out is to raise rates and get this bullshit froth out of the market. That's not going to happen when the arm of the Fed is way too involved. It hasn't so far....any chance of it happening was just removed.
Ciao
MS
I don't know if Bernanke would be replaced asap.
The CNBC 'leak' is complete BS (whenever they have a real leak they have marquee bulletins on TV + web)
However, Obama may get to appoint the most members to the Federal Reserve of any president in history right from the get go (don't remember the numbers, but it's substantial)
If Obama wanted to replace Bernanke the steady way to do it would be to appoint the new members, and then let one of them slide on over to Chairman after one year
Gary-
I never questioned whether life would stop because of this. You response is a bit to simplistic....
Ciao
MS
Bond Girl,
I was under the impression that the loan was Paulson's initiative and Geithner coordinated the deal
The NY Times on replacing Bernanke. This seems to be the particular horse that talked today:
Geithner Said to Be Chosen for Treasury Secretary - The Caucus Blog - NYTimes.com
"Mr. Summers is likely to be named as an economics adviser as well, two sources familiar with the Obama transition said, with the expectation that eventually he will be named to the Federal Reserve Board, perhaps as successor to Chairman Ben Bernanke."
EHP-
That's what my take on it was. Same deal as with BSC. BB is just a tool for the congress to beat up on. He never had any power...it's been T.G. since greenspan retired.
Ciao
MS
MS,
You could argue that there is a small army of advisors with significant input this time. Including Volker, Summers, Rubin, and all the others
I may not know the individual histories of the cast, but it seems Obama is selecting a group of strong veterans irrespective of their biases/vision, and he will try to guide or shape their actions/policies from a macro level.
There is certainly a message of experience and continuity being sent. I think they realize there will be a lot of trouble ahead so they're picking those above second guesses
Hanky needs a job.
Short C
Nationalize C
Hanky gets a job.
If anyone has some good anecdotes of Geithner, please do share
The night we spent together was memorable but he was a bit uptight about the handcuffs.
I never questioned whether life would stop because of this. You response is a bit to simplistic...
What's simplistic is "infrastructure spending", the chimeric catch-all feel-good phrase that lets everyone still believe their 401K and SS accounts will remain intact.
"Change we can believe in"
is starting to become
"Partisanship we are used to"
MS,
I think in retrospect BB has been a dithering fool. He early on tried to be innovative by starting the new facilities, discount window cuts, etc He was also cavalier in his 2 years pre-crisis, pretending that words of confidence would be able to keep things under control. Either stupid or a liar to begin, and in the end both.
It wasn't before long that he was dependent on Paulson for new cash and abrogated his independence. He's an empty suit. Might as well commit to keeping the FF rate at 50bp for 2 years, because that is the only tool left in the box
Still his fault for trying to push on through to other side of a storm in a row boat
PutItOnMyTab writes:
Waitaminute,
Broward is that you?
HAAAAAA!!!
The Community Bank, Loganville, GA
EHP,
His involvement is not simply limited to an understanding of operations. He apparently was pretty vocal about the decision not to bail out Lehman too.
On the face of it, I think this is a terrible decision. But I am genuinely trying to be open-minded. I could care less what his political affiliations are. This man had a central role in the TARP and related bailouts. I have a hard time appreciating the value he adds, so any input on his achievements would be appreciated.
Talk to you all later.
Should be this afternoon from information from bank reps in the LA area.
Even if infrastructure is the plan Obama is going to go with, it will not have any positive effects on J6P until 6-12 months AFTER it gets implemented. That will be pushing any turn around the 4th qtr of 09. The markets will be ashes by then because they are fully engulfed in flames now, albiet some water was splashed on today.
Is is BFF?
Not very far, really
Make one of this is an it.
meanwhile in other central bank news, the swiss stay wobbly. last one to ZIRP is a rotten egg -
Swiss National Bank makes surprise rate cut
http://www.marketwatch.com/news/story/swiss-national-bank-makes-surprise/story.aspx?guid={ACE30989-5E81-42C7-898D-5276CE062DBB}&dist=msr_1
OT
Dryfly reminded me a few days ago that he, Conjure, and a few others on this board, myself included, began to make the argument a couple of years ago that the US economy was headed for a bout of deflation that would be triggered by the eventual collapse of the mortgage backed securities market.
At the time, our comments were, by and large, met with a considerable amount of skepticism, to put it mildly. Eventually, however, we began to win over many of those skeptics.
Now, two years later, we're faced with asset deflation and the prospect of a downturn far more costly, in human and economic terms, than most thought possible.
My favorite closet Austrian, Paul Kasriel, has been laying out the arguments and the facts for some weeks now. He does a better job than I can. His latest daily commentary is well worth the time required to read it.
http://www.ntrs.com/popups/popup_noprint.html?http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0811/document/dd112108.pdf
[As of October 17, 2008, The Community Bank had total assets of $681.0 million and total deposits of $611.4 million. Bank of Essex purchased approximately $84.4 million of The Community Bank's assets, and did pay the FDIC a premium of $3.2 million for the right to assume the failed bank's deposits. The FDIC will retain the remaining assets for later disposition...
The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund will be between $200 million and $240 million. The Community Bank is the twentieth FDIC-insured institution to be closed nationwide, and the third in Georgia, this year]
681 assets, 240 cost to FDIC. Good work Sheila, only ~35% underwater.
mp,
Closet Austrian? Is that a discount storefront bank operating across Eastern europe?
Hey mp-good call on the rally today.
"ndk writes:
This just in on CNBC: "Obama Likely to Consider Summers to Succeed Bernanke"
Who the #!@^& would leak this? This is a TOTAL DISASTER."
Isn't Bernanke in until 2010? This isn't a position that switches with the administration.
To me the banking system is pretty much like some interstate offramp with all the fast food joints.
They all might have a different sign out front but the food ( money) is all
coming from the same kitchen ( the USG).
Wendy's, McDonald's, Burger King, Citi
JPM, BAC. It all under the Fed and Treasury now so the marquee out front is just a nod to private enterprise.
The debt is guaranteed, the deposits guaranteed and soon policy will be set
from Washington. The facade of an independant banking system will be kept for as long as possible but the banks are effectively nationalized already.
That being the case, who better to be the new Treasury Secretary than the man who has been nationalizing them?
Waitaminute,
Broward is that you?
You guys are just jealous because I'm having awesome sex.
Congratulate me, the divorce judge rulled in my favor yesterday (again). 2 years, 10 months and $15K or so.
Justin boots stolen? Insurance is a great safety net when no one is buying.
Hey, whaddya know? As of the close today, the PE of the S&P 500 has now come back to the long-term historic trend level of 16.
From the WSJ$ Market Data Center, major index PE Ratios (based on trailing-twelve-month reported earnings):
S&P = 16.22
Dow = 16.85
Nasd = 17.57
For a nice picture of the history of this metric for the S&P500, click here:
http://comstockfunds.com/files/NLPP00000/294.pdf
Too bad that ratio typically falls to levels as low as 5-to-10 at bottoms.
From marketwatch
Community Bank of Loganville, Ga., is 20th bank to fail this year
Psgirl, thanks!
Isn't Bernanke in until 2010? This isn't a position that switches with the administration.
Yes, exactly right. Either boot Bernanke now or don't, but for gold's sake, don't create a lame duck Fed Chairman for the next two years.
GD,
You're right. Chairman term for 2006-2010, however he could always resign at any time
He's first joined the board in 2005 though, and his 14 year term as a member runs out in 2020
"Closet Austrian? Is that a discount storefront bank operating across Eastern europe?"
Conjure says, "BWAHAHAHA!"
"That was good."
FDIC: Failed Bank Information - Bank Closing Information for The Community Bank, Loganville, GA
Broward, there are people on this board whom I like, those I detest, those I find irritating, amusing, hilarious, insightful, prickish, hateful, clever, etc.
You . . . I worry might be a dangerously unstable lunatic.
Bloomberg is reporting that Citi may be "saved" by the Feds.
This is going to be an awkward two months. Easy prognostication, eh?
Broward Horne,
You could have always hired someone for a fraction of $15k to do stuff with her on camera and also saved on legal expenses
History will reflect the role played by Harvard in training our MBAs and government officials in the end of our republic.
The best and brightest indoctrinated in being confident in any decision they make. The minority has always ruled the majority. My Harvard degree makes it so.
Dumb question. Wouldn't now be a good time to form an entirely new bank? Something that starts with no liabilities on its books?
Girlie mag's in trouble...GD2 might be worse than I thought:
Maxim Publisher Could Be Turned Over to Creditors - WSJ.com
"The minority has always ruled the majority."
Could be, but they never mention who, or what, rules the minority.
Either boot Bernanke now or don't, but for gold's sake, don't create a lame duck Fed Chairman for the next two years.
So one could argue that BB has been a lame duck chair for over a year now. When Congress created the FDIC and the FRB, it wanted those positions to be outside of political control from the Executive, hence the staggered terms and quasi-independent federal agency status. Unfortunately, it seems that HP's fingerprints have been over every single decision made during the past 1 1/2 years.
Question is whether TG is going to utilize the HP playbook, or is he going to let BB and SB operate independently? Or should he?
Oh, and I have a name for the bank: First National Bank of Responsible Lending.
I'm sure that name isn't taken. If it ever was, they probably changed it to We Loan to Anyone around 2004.
Just here briefly, gotta duck out to my closet austrian to get some fiat.
Back later, if my Fiat MEW doesn't break down.
C
Oh no, not Maxim, can't middle shelf porn survive?
Maxim Publisher Could Be Turned Over to Creditors - WSJ.com
Anyone else tempted by FXP at 64? No? Just me...
As I recall, at the time the TARP was
first proposed you could have bought all the major banks for less than $700 billion. Of course you would have acquired all their toxic goop too but the idea was that with $700 billion you could've funded 10 or so strong regional banks to take up the necessary banking functions of the nation.
This could be serious:
Obama calls on his Internet campaign army to march again | McClatchy
C&C, Playboy is also losing money, and their stock is down a ton in the last 12 months.
Question is whether TG is going to utilize the HP playbook, or is he going to let BB and SB operate independently? Or should he?
I always felt the independence of the central bank was a bit of a joke. If you're independent, except during times of crisis, what is the point?
Nevertheless, if you want to increase the (appearance of) independence of the central bank, mentioning the replacement of the Fed Chairman in the same blog post as the announcement of the new Treasury head is not the way to do it.
Citi is too big to be saved just by the US.
Paulson is also adamant that the weak must be eaten by the victors that get financing from the government.
So Citi is to be broken up in different divisions, and sold to different banks around the world. However no bank wants toxic junk, so they'll trot out the good bank/bad bank model.
The Treasury would parcel of Citi, with the proceeds going towards covering the losses of the bad bank, until which point the Treasury covers any further shortfall.
The problems are:
Paulson has not been very friendly with foreign governments, and that slows things down
Banks will need government loans to acquire parts of Citi. Expect something like 1/4 paid in cash, 3/4 in loan from government
Citi cannot do a regular bankruptcy, not even because of counterparty risk. It's because it would cause a tremendous destruction of leverage even within Citi and the government is trying to keep money supply up at all costs.
I don't really think the resolution to the Citi problem will be as simple as what I have described. It's too big to fail, and too weak to live -- it is a zombie bank, and it is much easier to drip feed it than to cure or kill it
mp,
So, is Kasriel arguing that the US will likely buy LT Treasuries to keep LT rates down? Or am I reading that wrong?
rew writes:
Re previous thread on CA unemployment, the Mercury has an item on pawn shops
That was an interesting article. Interesting in that the woman mentions that the slowdown began awhile ago.
Pawnshops make for interesting indicators. Ebay is an offshoot in someways, as are yard sales.
Whenever I have time, and I am on travel, I try to visit local pawnshops.
Nice deal on the digital camera. $320 paid for...$20 was the loa
some i guy ,
At least they have real assets.
Unit472 writes:
As I recall, at the time the TARP was
first proposed you could have bought all the major banks for less than $700 billion. Of course you would have acquired all their toxic goop too but the idea was that with $700 billion you could've funded 10 or so strong regional banks to take up the necessary banking functions of the nation.
That's crazy talk. Why do something rational that would help the country? We have bonuses to pay man!!
This just in on CNBC: "Obama Likely to Consider Summers to Succeed Bernanke"
Okay fine.
I shall now reveal a shocking secret which will disturb many people.
Google Trends: schramm
See that spike in mid-November?
That is you guys.
The readers on CR.
That is me posting "schramm" on this board and y'all reading up on it, propagating the meme.
Another example - float a "Sumners nomination" meme and do a diff on the response -
The Index Of Evil
If I could do this ten years ago, I guarantee that multiple federal agencies and foreign governments can do it now.
Why do you think Clinton floated so many trial balloons?
Do a google on pawnshops michigan and find a lot of recent stories...
Pavel Chichikov writes:
This could be serious:
Interesting link. He is building a Party. Hope they stay away from uniforms for awhile.
This could be serious:
Pavel:
Perhaps I'm being a little bit too federalist, but I think that there should be somethings that are left strictly to local politics, especially given the monetary constraints at that level. To me, this overt attempt by the President-Elect to control politics at the local level is dangerous.
Basically, no one at the local level can compete if in the cross-hairs of Plouffe and his political machinery.
Broward Horne,
rightsizing OR downsizing OR layoff OR bankruptcy OR insolvency OR recession OR unemployment - Google News Archive Search
Google says everything is all right
Basel Too | 11.21.08 - 6:44 pm
True believers are the scary people.
"True believers are the scary people."
Boo!
Nostrovia,
eek!
re: Basically, no one at the local level can compete if in the cross-hairs of Plouffe and his political machinery
How is this different from the last 15 or so years of anti-evolutionists taking over school boards in red states? Dobson and co organized that from Colorado. There are lots of disaffected progressives who have rallied around the new prez. If Washington helps them work locally, well. Payback.
How is this different from the last 15 or so years of anti-evolutionists taking over school boards in red states? Dobson and co organized that from Colorado. There are lots of disaffected progressives who have rallied around the new prez. If Washington helps them work locally, well. Payback.
It's not. That's my point.
The thing about Citi is what if its depositors flee?
Felix Salmon noted that, as of June 30th, Citi had $820 billion in total deposits but some $554 billion of that
was held ABROAD. Only $126 billion was
FDIC insured ( at that time).
If this is, in fact, the case then no matter what HP, TG or SB decide they want to do with Citi events could decide for them.
We've all talked about deflation as it pertains to the US.
What about deflation in China? Are they set to become Japan 2.0?
High savings, heavy capital investment, opposite in their major trading partner
NYT
WASHINGTON (AP) -- Georgia regulators have shut down The Community Bank, the 20th failure this year of a federally insured institution.
The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Loganville, Ga. It had $681 million in assets and $611.4 million in deposits as of Oct. 17.
The FDIC says all the bank's deposits and about $84.4 million of its assets will be acquired by Bank of Essex, of Tappahannock, Va. Its four branches will reopen Monday as offices of Bank of Essex.
The agency said depositors of The Community Bank will continue to have full access to their deposits.
ren | 11.21.08 - 6:50 pm |
20th century history has repeatedly shown what a totally commited cadre can acomplish. None of the results have been particularly appealing to me.
The meme stuff is very cool
Unit472,
Bingo, that's why you have to sell them to other banks asap
EHP - what would deflation look like in China? How would you tell?
Other than demand dropping for commodities?
Unit472 writes:
As I recall, at the time the TARP was
first proposed you could have bought all the major banks for less than $700 billion. Of course you would have acquired all their toxic goop too but the idea was that with $700 billion you could've funded 10 or so strong regional banks to take up the necessary banking functions of the nation.
Yes. And then fire management, get rid of the stock dividend, and drastically reduce bonuses at profitable firms. Get rid of bonuses at money losing firms.
As someone from the finance industry, the prime reasons for large bonuses used to be performance incentives and keeping employees from leaving. In the current environment, we would be much better served with moderately fewer employees at much lower average comp. Instead, we are getting across the board reductions in headcount at only slightly reduced compensation. That does not save cashflow in the short term. You have to pay a lot of severance, accrued vacation, and bonuses anyhow. You have a lot of empty space which you won't be able to sublet for a while. Spare computer and office equipment just sits around. You also reduce your topline revenues because in many departments the people you have can't handle current workloads, they couldn't take much new business.
The meme stuff is so logical. Spock would understand.
In the current environment, we would be much better served with moderately fewer employees at much lower average comp.
Much lower? Who buys the product then?
Unit472 said" Felix Salmon noted that, as of June 30th, Citi had $820 billion in total deposits but some $554 billion of that was held ABROAD. Only $126 billion was FDIC insured ( at that time)."
How much of Citi's deposits are in Iceland or Hungary or...?
@Volker the Viking:
"he may well enjoy hearing talk of chiseling his visage on Rushmore"
I supported the President-elect, and believe his administration will be the right one to face the problems as they are presented, and he may well be a great President.
But a President gets immortialized on Rushmore for creating, defining, preserving, or empowering the United States. I doubt that Mr. Obama will be faced with the need to do any of those things.
You did, however, say "enjoy hearing talk." And Reagan, if he was still lucid when that talk went around, probably enjoyed it, as did GWB in the days between 9/11 and the Iraq war.
[Once again, I'm posting on the cusp of a new thread, but it's going here.]
Perhaps one reason Paulson has been keen on preserving the illusion of an independant banking system and not formally nationalizing them.
You put the bankers on the Federal pay system and you don't have to worry about excessive compensation.
The top pay for the Senior Executive Service is $172k p.a. with some small
cost of living adjustments.
Friends, citizens, people of this great Forum, lend me your ears. The republic is fragile, the predations of the Paulsonians have been great. Hope is fleeting. There are storms gathering and we must prepare.
The Paulsonians may have been vanquished, and the pursuit of the afterguard continues.
Rejoicing may be tempting, but we face a new danger.
We hear of the approach of the Geithnerians. Timonius has already crossed the rubicon, and demonstrated his mettle in combat.
Be ever fearful for your tithes. Our harvest is not certain, and the seed corn must be preserved.
We await the day, ever pressing thence, to say with certainty amid the gloom, now, fiat lux.
We will remake Sparta.
The oracles have foretold.
C
ehp?
High savings, heavy capital investment, opposite in their major trading partner
I think that the big difference is the demographics. Japan is structurally limited in increasing aggregate demand domestically because of its population dynamics. On the other hand, China still has hundreds of billions of potential consumers.
It's not. That's my point.
Basel Too | 11.21.08 - 6:50 pm | #
The difference is that they're not hateful, mouthbreathing cretins that believe the earth is 6000 years old and gay people and minorities are subhuman?
WhooHoo score another bank failure for the Atlanta suburbs ! The Community Bank went down because of it's loans to Atlanta area builders and developers ( 82% of all loans were C&D). I think I read recently that 45% of their "assets" were distressed & deliquent loans. This is up from 15% problem assets to total assets in the first quarter of this year.
Anyone?
The difference is that they're not hateful, mouthbreathing cretins that believe the earth is 6000 years old and gay people and minorities are subhuman?
You're being too binary and missing the point. The problem is not that the wacko evangelicals are right, it's that there may be multiple alternatives. One of the pillars of the Constitution is that there should be separation between the state and federal governments; in fact, under the 10th Amendment, they are co-equal sovereigns.
Friday's Closings:
Community Bank of Loganville, Georgia, Is Shuttered (Update1) - Bloomberg.com
"Pavel:
Perhaps I'm being a little bit too federalist, but I think that there should be somethings that are left strictly to local politics..."
I posted that link not because I approve or disapprove, or have some criticism to make of it. No one knows how it or the next four years are going to turn out. But this kind of centralized, flexible, perhaps potent form of political organization is something new in the US, isn't it, where political organization is typically temporary, limited, ad hoc and based greatly on patronage? It has the possibility of becoming a movement, though it may never come to that.
I believe it may be a reaction not only to technological possibilities, but to the demands and stresses being placed on society and the economy.
"IN GOD WE TRUST' IS GONE from the new dollar, where is God?"
God hasn't gone anywhere. Where are we?
Anyway, someone is telling me that the motto has been moved, not removed.
In God We Trust controversy, link:
snopes.com: New Dollar Coins and 'In God We Trust'
EvilHenryPaulson(Unrated) writes:
Volker was never in the running. He's too tied up
EvilHenryPaulson | 11.21.08 - 5:44 pm | #
Volcker has already said over & over he would NOT repeat the 80s... that was then this is now. The folks who idolized Volcker for his 20% interest rates would be the most disappointed of anyone - he wouldn't do it that way now. No chance.
he solved inflation.
this is a whole different animal altogether, say it ALL TOGETHER
in deflation and bankrupt....
a hard case for gold.
Im calling the bottom in gold, and other metal stuff that has value.
ashle dupre on 20/20 tonight
vol. the viking you are insane
Downey's last 10-Q
http://yourmortgageoryourlife.wo...loan-form-10-q/
The had been riding on fumes for all of Q2 and Q3.
I wonder how much more damage hd been done in the last 7 months - FDIC should have KO'd Downey last spring!
BUT IF YOU WANT TO SEE SOMETHING REALLY SCARY, HOW ABOUT THE DTCC?
If you know about the DTCC, then you understand that it is CEDE which owns 99% of all of the securities traded' in the USA - unless you have that stock in a safety deposit box or otherwise in your possession, you do not own it - if you bought it through a broker, you are only the legal beneficiary of any proceeds from the stock for the period of time it is registered to you - when you make a trade, they don;t move the paper certificate like they used to, just the registration of the beneficiary - a company owned and controlled by the DTCC - CEDE (funny, eh?) is the only legal 'owner' of the stocks - this all is a product of the electronic age, and allows for the speed of modern commerce - but you and I dont own shit. Here it all is:
WHO REALLY OWNS YOUR MONEY? Part One: The Depository Trust & Clearing Corporation « Your Mortgage or Your Life…
I wonder if these will help shittybank.
I found this really interesting:
"Obama motivates D.C. to initiate new lower and middle class bailout"
Obama's Taxpayer Bailout