OT: CR, There hasn't been an update to your credit crisis indicators in 2 weeks. Is there just nothing to report, are the numbers useless to to manipulation by the Fed, or is it just more fun to report on layoffs, etc. Orrrrr......is the credit crisis over?
Just how much do you think The Sandbox is gonna cost...hmmmmm....
At least 3 maybe 4 Trillion and what did we get out of it, oh...Bush got a hard on yeah, thousands of injured soldiers. A distorted budget and a fuckin' blank check for the MIC.
un-FUCKING-believable that anybody would even think about this! \t bobn | \t \t \tHomepage | \t01.29.09 - 5:48 pm | # bobn, or that they would NOT think about this.
....the desperate gambler asks for another marker hoping to get back the previous 10 he owes "the house" already, knowing he can't possibly pay back what he already owes....
I would like one of these reports to include the true rationale behind propping up the banking system. If people only knew it was of "national security" importance because the hegemony/solvency of the US was brought into harm's way by people who should not have had that responsibility. Shadow banking and wall street were outside of the checks and balances of our government yet they were able to shape our policy (domestic and foreign) for the majority of a century. They should never again be allowed to control our national integrity.
one thing i never understood is why 1:10 leverage is OK but 1:30 is disastrous..
in the case of the former, a 10% reduction wipes out the equity and makes the entity insovent. And such scale of reduction is not unprecedented. More so now.
stop already. glodman stak has no clue anyway. for that matter why is glodman stak even in existence. why is morgan stinky still around. here are two parasitic firms that somehow received taxpayer dollars. if there ever was an outrage this should be near the top of the list
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits crispy&cole | Homepage | 01.29.09 - 5:54 pm | #
"Horror Holiday"
(To the tune of "Jolly Holiday" from "Mary Poppins")
Lyrics by Marty Cohen, 1/28/2009
It's a horror holiday with bankers.
Bankers bring us all down low.
Though some people try to help some others,
bankers know it's all for show.
They always think of pressing their advantage.
Forclosure is the Walmart of their greed.
The country better fear when they are near.
Their loathsome avarice is chrystal clear.
Oh, it's a horror holiday with bankers.
No wonder that's it's bankers that we hate.
It's a horror holiday with bankers.
Bonuses are what they crave.
Though they short the crap they try to sell us,
they insist we must behave.
They only need another hundred billion
to get them through this year (or maybe week).
They don't want us to stop their gravy train.
"Hoocudanode?" is always their refrain.
Oh, it's a horror holiday with bankers.
No wonder that's it's bankers that we hate.
"Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt. That number could shrink if the program were limited to only certain loans or banks, but it could also grow if other asset classes such as commercial real estate loans were included."
How much you wanna bet Goldman Sucks has money down on the latter.
"Not since the passage in 1909 of the 16th Amendment - which cleared the way for a federal income tax - has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality..... it is a mugging. It is a fraud." - Sen. Jim DeMint,
"Because it would have worked if they had only done if FASTER!"
That's whole problem with this thinking. People like you assume that this recession might actually end soon. What if it doesn't? What if it lasts another 2 years? Then the banks will be i even worse condition and we'll still be pondering the same questions.
Watch the video. As Whitney says, there are necessary debts that the system needs to unload: THE PRAGMATIC CAPITALIST
Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt.
No, Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt in order to preserve Goldman Sachs in the comfort to which its management and stockholders have become accustomed.
I have joked about it before but I am half considering raising money for the sole purpose of chartering a bank to act as a conduit for TARP money to whomever they want to encourage or guarantee lending to
The 2 Dr. Dooms, Roubini and Taleb, are both at Davos trying to talk nationalization, but they both look exhausted, as if they have been beating bankers' heads against a wall.
GS may as well have said it will take four thousand clowns to clean up this mess. They're the same economists that predicted $200 oil and $20 oil in the same year. The only think you can trust from them is that they will tell you what they want/need you to believe.
$4 Trillion is $40K per taxpayer, never to be repaid, but with interest charges starting about 3%, i.e. a tax on your future labors of $100/month. Likely to increase to $300/month at some point in time.
So, what are you going to give up in your monthly budget to pay for that?
And what about all the folks who already cannot (or didn't) make their existing monthly debt payments?
You get to pay their share too. What are you going to give up in order to pay that?
There has to be a cheaper way, even if it appears more expensive at first.
With a long enough time frame (I favor a good bank/bad bank plan with an emphasis on recapitalizing the good), some of the wealth may come back. But clearly, most of the wealth has been destroyed forever.
We are quickly reaching the point where Washington's dilly-dallying deference to investor interests (extreme reluctance to wipe out stock and bondholders) is going to lead to decay in physical and not just paper wealth. LawyerLiz has made the point about empty, rotting houses in Florida. Others have talked about consumers pulling in their horns. We are already seeing shipping volumes plummet.
When the physical stock of assets starts to break down, when goods can't be sold off of store shelves, we lose something the economy can never recover. Even after the eventual recovery, what we failed to take care of today is lost.
Again, enough with the trial balloons. We need to acknowledge our paper losses, clean up the banks and the balance sheets, and get the real economy moving again.
Anecdote from another formerly rich client. Main business in car repairs and managing to hang on. BUT he has 10 cars that he has performed major work on, whose owners seemingly can't/haven't pay/paid. So he's gonna file a car mechanics liens, and I gather he gets to sell the car for his money sooner rather than later.
These people must have thought they could afford the repairs. . .
"Not since the passage in 1909 of the 16th Amendment - which cleared the way for a federal income tax - has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality..... it is a mugging. It is a fraud." - Sen. Jim DeMint, Black Star Ranch | 01.29.09 - 5:56 pm | #
Too bad DeMint isn't in the majority - it would be worth it to watch him squirm if he had to make the call on what to do - blow up the currency or see unemployment & business failures go well into double digit percentages... (like 20-30%). And the GOP's suggestion of a measly tax cut would be run over by these forces like baby ducklings crossing interstate at rush hour. Ya his ideological opposition would last about an hour in the face of that.
The only thing better than being king is being a big mouth in the minority during a crisis... that is something both parties pull off pretty well when they are so blessed. GOP won that lottery last November.
"Not since the passage in 1909 of the 16th Amendment - which cleared the way for a federal income tax - has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality..... it is a mugging. It is a fraud." - Sen. Jim DeMint,
Black Star Ranch | 01.29.09 - 5:56 pm | #
So this clown DeMint wants to repeal the 16th amendment, ahh the good old days of Pres. Mckinley
Rob Dawg writes:
Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt.
No, Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt in order to preserve Goldman Sachs in the comfort to which its management and stockholders have become accustomed.
"Hoping to give relief to frustrated Bahamians during difficult economic times, the government has reduced the penalties for having sex with animals.
The Bahamas government has revamped amendments to the nation's sex crime laws reducing the penalties for people who have sex with animals. The current sentence is up to 20 years in jail. The new law would reduce this to less than five years."
BahamasB2B.com
crispy&cole writes:
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits
crispy&cole | Homepage | 01.29.09 - 5:54 pm | #
double inverse recession writes:
I would like one of these reports to include the true rationale behind propping up the banking system. If people only knew it was of "national security" importance because the hegemony/solvency of the US was brought into harm's way by people who should not have had that responsibility. Shadow banking and wall street were outside of the checks and balances of our government yet they were able to shape our policy (domestic and foreign) for the majority of a century. They should never again be allowed to control our national integrity.
double inverse recession | 01.29.09 - 5:54 pm | #
Two of the best comments ever written on CR, and back to back no less.
The Bahamas government has revamped amendments to the nation's sex crime laws reducing the penalties for people who have sex with animals. The current sentence is up to 20 years in jail. The new law would reduce this to less than five years."
BahamasB2B.com
zendiet | Homepage | 01.29.09 - 6:10 pm | #
Zimbabweans will be allowed to conduct business in other currencies, alongside the Zimbabwe dollar, in an effort to stem the country's runaway inflation.
The country is in the grip of world-record hyperinflation which has left the Zimbabwean dollar virtually worthless - 231m% in July 2008, the most recent figure released.
Teachers, doctors and civil servants have gone on strike complaining that their salaries - which equal trillions of Zimbabwean dollars - are not even enough to catch the bus to work each day.
"In the hyper-inflationary environment characterising the economy, our people are now using multiple currencies alongside the Zimbabwean dollar. These include the [South African] rand, US dollar, Botswana pula, euro and British pound among others."
The country's economy is now on the brink of collapse - a situation worsened by the political crisis that resulted from last year's disputed presidential elections.
Hey. Maybe somebody can explain. The south end of my half of a northbound pony has not only not produced any Skittles but has started to smell funny. Rob Dawg | Homepage | 01.29.09 - 6:12 pm | #
Anyone work at a bank and know what the minimum amount of reserves relative to deposits are just to handle the daily churn of money? 1%
It seems like they may just quietly roll those back officially, because assets can't stay in level 3 forever to accomplish the unofficial easing of reserve requirements
Hey. Maybe somebody can explain. The south end of my half of a northbound pony has not only not produced any Skittles but has started to smell funny. Rob Dawg | Homepage | 01.29.09 - 6:12 pm | # RockyR | 01.29.09 - 6:13 pm | #
I getting clipped. However, I had nothing useful to say about this other than it was damned funny.
There is only one option. Just nationalize them. We are going to have to pay for this mess one way or another. By far the cheapest way is nationalize Citi, BofA, Wells Fargo and Chase. I cannot see another way out....$4 Trillion? No fucking way!
That's because you didn't read the instructions. You have to buy the skittles 1/2 pony refill packs from Goldman Sucks. Kinda like pez, but a bit more pricey.
Do not count on it! Imho, this is how the french revolution got started... Anonymous | 01.29.09 - 6:16 pm | #
The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. Perish the thought, we won't see revolt.
Nationalization - it has to be cheaper. Take them over and wipe them out. It has to scare the crap out of GS, Citi, BOA board & major equity holders.
Might be best to specify some predetermined period of government control and come up with a euphemism for nationalization that implies it's temporary:
Rehabilitizationation, etc.
I think the prospect of government run finance justifiably scares people.
I think a good case can be made that consolidation and monopolization of finance have caused our problems and can't reasonably be expected to also cure them.
Nationalization - it has to be cheaper. Take them over and wipe them out. It has to scare the crap out of GS, Citi, BOA board & major equity holders. dryfly | 01.29.09 - 6:13 pm | #
And how many unintended international economic catastrophe's would result from wiping out the cash that has been shaping world affairs for the last century? I'm theoretically behind nationalization but without the proper data we'll not be able to successfully do so. There would be many world leaders who would see as it as direct attacks on their stability. We half-mock the stalled construction at different California public universities but image if those projects were simply housing and sanitation for entire developing nations. We let shadow banking put the US in harm's way by letting it be the face of our foreign policy - imperialism.
No, Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt in order to preserve Goldman Sachs in the comfort to which its management and stockholders have become accustomed.
Various factions in the oligarchy are jostling to maintain power. That's the big struggle now, it must be ugly behind the scenes. Stripping the national wealth and taxpayer are just a means to that end.
That's because you didn't read the instructions. You have to buy the skittles 1/2 pony refill packs from Goldman Sucks. Kinda like pez, but a bit more pricey. Comrade Misean is Dope | 01.29.09 - 6:17 pm | #
RockyR writes:
Do not count on it! Imho, this is how the french revolution got started...
Anonymous | 01.29.09 - 6:16 pm | #
The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. Perish the thought, we won't see revolt.
Who do think will be driving those tanks?
Did you pay attention to what the police dept did in NO during a crisis?
Expand that to the US as a whole...The public will not accept this cost...They WILL REVOLT!!!
Thiers didn't have any of that in 1871, but the corpses were laid out in rows anyway. Pavel Chichikov | 01.29.09 - 6:21 pm | #
Folks, I have to drive home. But, a parting thought for you that is really a piece of good news for a change: I doubt we read too many more articles about what generation Y needs in order to be happy in the workplace.
That's because you didn't read the instructions. You have to buy the skittles 1/2 pony refill packs from Goldman Sucks. Kinda like pez, but a bit more pricey.
Nostrovia, - Comrade Misean is Dope
The problems with tanks and aircraft is that it takes vast legions of non military citizens to produce the stuff that makes them more than heavy, motionless pieces of scrap metal.
"Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits"
and
Not gonna happen. Imagine Lehman on steroids."
Actually, I am imagining that. Imagine we took down Lehman but instead of trying to TARP over the aftermath, we kept on cleaning house. Imagine that we now nationalize the F'ed banks, and then if anyone starts to complain that that causes a problem for them, well, just nationalize them too. If it causes a problem overseas, well, let their government nationalize 'em, and if it causes a strategic nation like Iceland to go belly-up, fix that, but for crying out loud don't keep trying to treat a cancer patient with aspirin and antibiotics! No, once you start excising the tumor, you've got to find every last bit of it, and you've got to keep on going until you rip the entire cancer out of the global economy.
Remember, nationalization doesn't mean that a given organization shuts down and goes out of business. It just means that the demonstrably-corrupt leadership loses control of their business, and (depending on the national will) some of the investors get haircuts and/or zeroes.
Now, finally, after you've identified all the places where the cancer has metastasized, and killed it dead, you can take whatever body parts are still capable of functioning and spin them back out as cancer-free companies with fresh capital. You can even recycle some of the old management as long as they've all gotten multiple rectal exams in the process and are scared shitless about ever f'ing up like this again.
Then maybe we'll have a decent shot at rebuilding the economy, and we won't have to go through this again for another 80 years.
All cds contracts are deemed null and void.Illegal, if you may.
Then all banks, PE,HF,Insitiution's ,thrifts,CU,'s and state pensions are finally free to balance their book.
It's the come clean process. If you out of business: ok so be it, that's what makes america great,declare bk and start over. new investors who were more shrewd, less risky get to buy your asset's , your home's and cars. And new prices can be set at a clearing level.
And how many unintended international economic catastrophe's would result from wiping out the cash that has been shaping world affairs for the last century? double inverse recession | 01.29.09 - 6:22 pm | #
And that isn't happening now? What part of $4T isn't involved in that already? Plus the GSEs? Plus TARP?
And we still have no final guarantee we haven't hit bottom?
Or just tell them to fuck off and let Steroidal Lehman run it's course w/out any gov't assistance? You'll end up at the same result only faster w/ higher unemployment and business failure and a raging lunatic 'Lehman'.
There comes a point where choice A sucks and choice B sucks worse. We are there - now tell me again which one do YOU think sucks worse?
Who needs a new badbank
We have any number of these already - and they are insolvent - looks like more repackaging of toxins
Besides isnt the Fed buying up all the bank bad bits - perhaps its the bad bank you have without realising you have a bad bank - the Fed shareholders are going to be jumping out the window when the toxins trash share value
Actually, I am imagining that. Imagine we took down Lehman but instead of trying to TARP over the aftermath, we kept on cleaning house. Imagine that we now nationalize the F'ed banks, and then if anyone starts to complain that that causes a problem for them, well, just nationalize them too. Wisdom Speaker | Homepage | 01.29.09 - 6:25 pm | #
Sign me up. Make a reality show and it could turn a profit. 'Banker Survival'...
As for the worries that this will leave gaping holes in the financial infrastructure for a while: that would be different from the current "banks that won't lend" situation in WHAT way?
Also, it will create tremendous opportunities for survivors and new companies to flourish.
Perhaps we do need the creative destruction phase after all.
$4 Trillion. Well, that is more or less in line with Roubini's estimate... though he was talking global losses, right, not just the US? Groundhogday | 01.29.09 - 6:26 pm | #
The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. Perish the thought, we won't see revolt.
RockyR
.
That works, right up until the moment they don't get fed or paid. "No bucks, no Buck Rogers." - The Right Stuff
PonziMonetizaCoruptiCapitalism writes:
let's game theory this.
All cds contracts are deemed null and void.Illegal, if you may.
Then all banks, PE,HF,Insitiution's ,thrifts,CU,'s and state pensions are finally free to balance their book.
It's the come clean process. If you out of business: ok so be it, that's what makes america great,declare bk and start over. new investors who were more shrewd, less risky get to buy your asset's , your home's and cars. And new prices can be set at a clearing level.
Won't happen. To many people's only investment is bank stock.
The world's wheat harvest is likely to âfall sharply" in 2009-10 as farmers cut the acreage devoted to the cereal, the International Grains Council said yesterday in its first forecast for the incoming crop.
The London intergovernmental body said the 2009-10 season wheat crop would fall to 650m tonnes â down about 5 per cent from a record 687m tonnes last season. ...
Mortgages got clobbered versus swaps and one salesman said that it was Armageddon late in the day. Mortgages lagged swaps by 1/2 point to 5/8 point. The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts. They have bought big chunks of FNMA 4s between 100 and 101. Those bonds currently trade around 99. I mentioned in the preceding post that I thought that the street would force the Fed's hand regarding purchases of Treasuries. The debacle in the Treasury market has erased the gains in the mortgage market. The Fed will not wait long to buy Treasuries as dilatory action will only lead to higher mortgage rates. Swap spreads are 8 basis points wider in the 2 year sector at 63 1/4. Five year spreads are 3 3/4 basis points wider at 65 3/4. Ten year spreads are 3 basis points wider at 23. Thirty year spreads are 3 basis points wider at Negative 16 1/2. Agency spreads are unchanged in 2 year and 10 years and 2 wider in 5 years.
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts. Anony | 01.29.09 - 6:29 pm | #
What do you bet the people NOT wanting nationalization & lobbying for more gov't support anyway got bonuses from said banks funded by TARP?
The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts. Max | Homepage | 01.29.09 - 6:34 pm | #
If you're looking for a bad bank, we've already got one.
@liz
Same deal in Memphis .. a major car repair shop has half their lot filled with repaired cars held for payment,
owner sent one bmw owner to a title loan shop to get funds to pay for tranny repairs.
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts.
Anony | 01.29.09 - 6:29 pm | #
Nationalization - sure
Walking away from bad debts: totally unforgiveable. Give me ankle bracelets and debtor prisons.
But then you realize what not being able to walk away would do to pricing over time correct? Be vwery vwery careful what you ask for.
Since everyone was quoting from Airplane earlier today, here's this gem:
"They bought their tickets, they knew what they were getting into! I say, let 'em crash!"
... also applies to anyone still heavily invested in financial stocks or bonds.
Pensions and other large holders that were dumb enough to be stuck even after 2 years of this... can be resolved via the PBGC process and a nice federal tax on financial sector corporate profits going forward.
The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts. Max | Homepage | 01.29.09 - 6:34 pm | #
If you're looking for a bad bank, we've already got one. MLM | Homepage | 01.29.09 - 6:36 pm | #
It will be the first one nationalized (as opposed to current status 'quasi')...
If that number the $4T number is real - all previous attempts were run over and dead. It's a whole new game.
I'd love nationalization. I'd love to park my money somewhere safer than in the hands of moronic greedy bankers.
BUT, I cannot see nationalization working. The CDS trip-wiring setup throughout our financial system will start to go off should any substantial and unexpected losses be inflicted (ala Lehman). Writers of CDS contracts will be forced to raise cash to payout and start selling good assets. Hence the real threat of cascading defaults.
Nationalization is near impossible in our massively interconnected system.
Pensions and other large holders that were dumb enough to be stuck even after 2 years of this... can be resolved via the PBGC process and a nice federal tax on financial sector corporate profits going forward.
Sheeple are still in buy and hold mode. Heck, some of the people who are commenting right now are still in that mode.
"That works, right up until the moment they don't get fed or paid."
The Emperor Septimius Severus told his sons (paraphrasing): Pay the soldiers, and don't worry about the rest.
Pavel Chichikov
.
Too bad the Czars, who thought they were the heirs of Rome, didn't pay attention. Hungry soldiers with worthless notes in their pockets have little motivation to shoot unarmed civilians.
First the regulations. Second the investigations/prosecutions. Third, wipeout of shareholders. Fourth, board members from the taxpayers, Fifth, no dividends or bonuses. And then, maybe, bailout of the bondholders by the taxpayers at some percentage (70/30?).
Writers of CDS contracts will be forced to raise cash to payout and start selling good assets. Hence the real threat of cascading defaults. Mr. Beach | 01.29.09 - 6:39 pm | #
I've begun wondering whether this is actually the case (took it as gospel a year ago). Lehman CDS's settled without setting off a cascade. If this was really a huge fear, wouldn't someone in Hank's office have tried to set up a clearing house and entice/force CDS writers/holders to participate?
The people I've met from Goldman Sachs are the smartest by far of all the Wall Street analysts and investors I've met. My bet is that everybody else on Wall Street agrees, and that we could very well see the financial sector take a very big hit tomorrow, which may well be what Goldman Sachs wants: let the bad banks go insolvent before the government can do anything to stop it. That way, the good banks won't have to get nationalized . . .
Blackholo: If it were isolated to failing banks, that would be one thing. But what if the process of nationalizing the banks, we discover that our insurance companies are insolvent, our states are insolvent, most of our leveraged businesses are insolvent and consumers are insolvent?
Never understood what is the value added to the world by GS. (Understand plenty about value subtracted). This is one more value-subtracted contribution from GS
I am sorry to say this, but this economic situation is a clusterf*uck-Gorgon's knot...
Its time to power down and reset...Its almost impossible to operate on a living patient...
Cancel all debt, restructure the economic controls and default on the nation's debt...
At least we have a head start out of this mess ahead of everyone else...
If we get the jump on everyone else, we will have more creditability than the other countries, and rebuild our position as the world's reserve currency...
"The Bahamas government has revamped amendments to the nation's sex crime laws reducing the penalties for people who have sex with animals. The current sentence is up to 20 years in jail. The new law would reduce this to less than five years.""
I've seen the flat emotionless eyes behind the riot shield. Forget the house. All you'd need to offer is a merit badge to folks with kill rates in the top 5% if my experience with LAPD in the 90s is any indicator.
Speaking of throwing away taxpayer's $ - A friend who works at GSA told me that there is a $150B for new gov't buildings with PV solar panels and windmills on top in locations here those things will never work .
Hiring crooked contractors better than bailout crooked bankers ? Well at least we are getting a little something for the $s and the magnitude is less .
MLM: I've begun wondering whether this is actually the case (took it as gospel a year ago). Lehman CDS's settled without setting off a cascade. If this was really a huge fear, wouldn't someone in Hank's office have tried to set up a clearing house and entice/force CDS writers/holders to participate?
The Lehman bankruptcy got the ball rolling on the massive volatility.
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts. Anony | 01.29.09 - 6:29 pm | #
That does not make any sense. Forclose, BK and Nationalize. Let the bad lenders and borrowers suffer for thier sins, is a popular point of veiw here, which I share.
Griff writes:
The people I've met from Goldman Sachs are the smartest by far of all the Wall Street analysts and investors I've met
I do not know any of them personally, but I do remember when a GS analyst said oil prices would reach $200 (it was about $140 at that time), I expected some pump and dump activity and so bought some ultrashort oil (DUG).
If this was really a huge fear, wouldn't someone in Hank's office have tried to set up a clearing house and entice/force CDS writers/holders to participate?
MLM | Homepage | 01.29.09 - 6:43 pm | #
That would risk reducing the feat and make it more difficult to get the $4T bailout. What are you thinking?
The problem is the term "nationalization". Nationalization won't happen but a govt. "bridge bank" will. Bridge bank will be in operation/ownership for 2-5 years. Good assets will be sold to the private sector, bad assets wiped out or held for a better day. I'm buying more SKF tomorrow.
Interesting, all the references to the French Revolution. Agree, this isn't really the kind of country to rebel. Weak and small unions, isolated suburbanites, a very risk-averse population.
Key issue, though, is that no one would know who to rebel against. Outside this blog most people don't know the names of the people responsible for this. Accountability has been very well avoided. Seems to me before you get a Marie Antoinette moment, you need a Madame DeFarge moment.
There is a rising tide of opposition around the world to Americas unilateral assertion of its national interests. But few realize that for the United States to become a more responsible country, the world economy needs to move from the current U.S. dollar standard to a global currency.
U.S. dominance rests not only on military superiority and on the size and productivity of its economy, but also on the fact that most international transactions are denominated in U.S. dollars and more than 60 percent of world foreign exchange reserves are held in U.S.-denominated assets, like U.S. Treasury bills.
The problem for the rest of the world is that the U.S. dollar standard encourages the United States to be careless in its monetary and fiscal policies.
Buy the assets at a premium (because that is what is going to happen), sell them at a discount (because that is the only way a private investor will take them). Take the proceeds, buy more assets at a premium, sell them at a discount. Take the proceeds... The resources get smaller and smaller as the process goes on. But they could perhaps draw it out stripping down the assets that can be stripped down and blending them into perhaps something more marketable.
At any rate, they assume that 1) there will be buyers all along the way, 2) illiquid assets can be priced at all.
If they attach terms to the purchases, they will likely not accomplish much by way of encouraging private investment in the banks after the assets are removed from the balance sheets.
Egregiously (OT), but still far closer than a lot of others, re: tomorrow's real GDP.
I have no forecast of what it will be, other than negative, but something to think about: It may not be nearly as bad as expected, not because of the "GDP" part but because of the "real" part.
Inflation was doing its own version of cliff-diving in the last quarter of 2008, which is why real income after transfer payments was actually rising late in the year. I don't see how real GDP could possibly be positive for Q4 2008 but it may not be end-of-the-Republic bad the way some might expect.
Agree, this isn't really the kind of country to rebel. Markel | 01.29.09 - 6:53 pm | #
We have done it a couple of time before... It just takes a key issue... State's rights. Taxation w/o representation..., Giving good money to bad banks?
The police and military are drawn from the working class, blue collar working families.
You truly believe these people are going to become autumatons and follow orders to disperse a crowd using deadly force? You think these guys get of work after they get done doing this, go home, crack a beer and tell their families about the day. Come on!
The problem is the term "nationalization". Nationalization won't happen but a govt. "bridge bank" will. Bridge bank will be in operation/ownership for 2-5 years. Good assets will be sold to the private sector, bad assets wiped out or held for a better day.
Won't happen. There's a reason that the pols are only considering a bad bank, and it's not about saving the bankers. It's about saving the lenders; all the insurance companies, pension funds, mutual funds, endowments, etc. Private placement will destroy the book (yes, i know) value of these assets.
So the bad bank is not to save just the banks, but anyone else with toxic assets.
GS: ...the government could potentially put up just 10 percent of the total.
What they're suggesting here is that the government leverage 10:1 to buy this $hit. What that means is that instead of raising the money now to cover potential losses the government can put that off til later.
Or, I guess, we'll look to someone else to bailout our bailout program...
Counterpointer: If by your comment, you suggest that somehow, I am supporting the system as currently constructed. That would be wrong.
We've been collectively mauled over by greed and stupidity.
Its just that I don't want the solution to the problem to be worse: I do not want to live in a Mad Max world. And there are some scenarios that take us there.
Can't nationalize every institution. Mr. Beach | 01.29.09 - 6:44 pm | #
Who is the world largest insurer? Who is the worlds largest mortgage lender? Who is soon to be the worlds largest homeowner? All this before the liberal Democrats took office.
Seems to me before you get a Marie Antoinette moment, you need a Madame DeFarge moment.
Markel
.
That didn't take long, once the journalists and other middle-class intellectuals got screwed. One by one, group after group got screwed, cleaned out, and finally got really, really pissed. It didn't take long.
Coronation of Louis XVI: 1775
Storming of Bastille: 1789
BUT, I cannot see nationalization working. The CDS trip-wiring setup throughout our financial system will start to go off should any substantial and unexpected losses be inflicted (ala Lehman)
Nationalization of the core parts of the financial system actually allows an out from the CDS tangle. Once all the systemically important CDS issuers are in the government's hands, it can look at net external exposure (remember, it get to cancel what it owes itself). If net exceeds the value of the insured bonds, the government steps in and buys the entirety of the defaulted bonds at face, thereby setting the CDS payout to zero.
In a broadscale nationalization the CDS tangle resolves via cancellation and auction buyouts and the risk is reduced to, at most, the value of the underlying bonds. Combined with the ability to assign haircuts to the bondholders when the CDS's aren't too thick, a nationalization and reset will cost a lot less than 4 trillion.
uhhh... every year it seems, a bunch of the cycling goth movement has a sitdown in times square. it does'nt go so well for a few of them, and it's a pretty peaceful group.
imagine a group hot under the collar.
may well be what Goldman Sachs wants: let the bad banks go insolvent before the government can do anything to stop it. That way, the good banks won't have to get nationalized . . . Griff | 01.29.09 - 6:44 pm | #
How does GS getting a visit from the FDIC reflect well on GS people?
FairEconomist: In a broadscale nationalization the CDS tangle resolves via cancellation and auction buyouts and the risk is reduced to, at most, the value of the underlying bonds. Combined with the ability to assign haircuts to the bondholders when the CDS's aren't too thick, a nationalization and reset will cost a lot less than 4 trillion.
Do you think it is possible to nationalize without a panic inducing bank holiday.
Any announced, but not implemented nationalization plan will have the Wall St. sharks out in full force both stoking panic and fleecing the public of their good assets.
Additionally, many gears of financial system will just stop - waiting for guidance.
sam writes:
I gotta go now, Kudlow is on and i know he speaks the truth and we'll all be ok shoving mustard seeds up our children ( and grandchildrens) asses
sam | 01.29.09 - 7:08 pm |
"They were the most depressing group of people Yossarian had ever been with. They were always in high spirits. They laughed at everything. "
I can't believe I'm actually being drawn to nationalization. $4 trillion? Does anyone get the sense that CNBC just throws out their wet dreams and hopes policy makers bite?
This may sound a bit ridiculous, but we think we have begun a full-blown bear market in fixed income, wrote Tom Fitzpatrick, Citigroups New York-based chief technical analyst, and London-based strategist Shyam Devani."
Conjure and I don't think it's ridiculous.
The time is now--
12:00:00
JOINT STATEMENT BY MP AND CONJURE
This will be our last comment for the foreseeable future. The demands on our time no longer allow the luxury of public discussion. We now know that a depression--an extended period of both negative and weak economic growth-- is upon us.
Conjure and I think that we've contributed some things to this discussion and would like to review some specifics. We do so in order that you--particularly the more recently arrived participants here--can judge the credibility of our current predictions: global depression and bond market crash.
-Predicted the failure of the Bear Stearns hedge funds.
-Predicted the failure of Bear Stearns, much to the chagrin of banker.
-Predicted the failure of the Blackstone IPO.
-Predicted the failure of the Chrysler buyout.
-Predicted the global financial meltdown.
-Predicted the end of the last bull market.
All of this was not the result of a ouija board, but some very hard work.
Conjure and I may drop by occasionally to see how all of you are doing. We've learned a lot here, particularly from CR and dear Tanta, may she rest in peace.
Do you think it is possible to nationalize without a panic inducing bank holiday.
Any announced, but not implemented nationalization plan will have the Wall St. sharks out in full force both stoking panic and fleecing the public of their good assets.
What's the problem? Announce the FDIC is putting the core banks into receivership and guaranteeing deposits. How is that going to make people sell their good assets like, oh, utility stocks? The crap assets which are really at risk are not in the hands of the public, at least not directly. A 401k panic isn't possible.
I don't understand why don't they just drain this S. into the toilet and instead lend money directly to businesses in need of credit?
Screw banks, if they can't stand on their own, they should be allowed to DIE.
p.s. Haven't they studied what has happened to Japan in 1990's?
Imagine a well funded group that has studied police tactics and is very well prepared with things like gas masks, bullet proof vests, helmets...
Blackhalo
.
The trillions will also have of come out of defense, at some point. Imagine we demob a huge portion of the troops worldwide, bring them home from overseas, and tell them to go find a job in this economy.
I'm thinking the only reason they haven't nationalized directly is because by wiping out shareholders you bring the pension crisis forward by 10 years. Nobody would be able to handle that along with the rest of the mess.
Nationalizing banks will do nothing but turn us into a more apparent socialized apparatchik. There is only one party worse at running the banks than the bankers - that's the FedGov.
Let the FDIC do its job - start shutting them down. The healthy ones will take over. The overall cost will be less. CDS be damned. Blow out AIG in the meantime. Life's a Beach.
Basel Too
Lehman failed because the Brits wouldn't backstop Barclay's purchase, which the Fed couldn't politically cover for a then foreign bank
Japanese were incidental, and their capital will stick around long after most as they are afraid of losing export market share and still can't believe that the export market itself is actually drying up. None of their banks would have stepped in to buy at the time, so that was just life. Fed simply had nothing to lose by not looking out for them
I don't know the full extent of it, but there is no American love lost on Britain and that is an even bigger story given the British deficit and position of the pound. As a side benefit, no longer will New Yorkers have to worry about London beating them in top 10 lists
Mr Beach - au contraire, it was that you had (again) identified a systemic risk that is profoundly unmitigated. I think the system is completely autofellated. Doesn't mean I support it.
"Wipe out pension funds.... then bail them out with what?"
at this time financials don't compose the large chunk of many pension & mutual funds because of the market declines.
So there is no need in bailing out those. There is also no need in nationalizing everyone, just those who can't stand on their own and are to large to fall.
(break them down, make a fall easier ! )
City & BoA should be flushed into the toilet, the rest .. will take notice
The Weimar Republic inflation reached its peak by November 1923, but ended when a new currency (the Rentenmark) was introduced. The government stated that this new currency had a fixed value, secured by real estate, and this was accepted.
Nationalizing banks will do nothing but turn us into a more apparent socialized apparatchik. There is only one party worse at running the banks than the bankers - that's the FedGov.
Actually, the Feds would be much better than the current management of the major banks. Both the First and Second Bank of the United States did far better than the current set; both were fully solvent when their charters were withdrawn.
You really can't do worse than the current money center banks have done.
There comes a point where choice A sucks and choice B sucks worse. We are there - now tell me again which one do YOU think sucks worse? dryfly | 01.29.09 - 6:29 pm | #
I'm saying neither. We're taking the wrong approach. The US government needs to go to it's closest trading partners and allies and say, "We cannot solve this alone" and agree to a series of trully progressive global trading laws. Remove quotas, subsidies and snub out protectionism before it rears it's head. Implement international banking standards that prevent risk-mispricing events in the future. And finally, create an international system for cancelling out all of the financial products and derivatives that created this global mess. Once you have a blueprint for dismantling the bomb you can unwind the banks which currently are constricting the globe's windpipe in an orderly fashion . This will simultaneously scratch large swathes of debt from the books and prevent the necessary money printing to monetize that debt.
yeah Yelds go up because prices go down.
So if you have cash, it is a good time to buy but if you have Fixed Assets, the value of them will go down.
(However, whether this prediction will happen or not is a huge question!)
Revolution? heh. . . Here in sunny LA, where there is no recession and ponies romp playfully down the gold paved streets, people are still in bidding wars for houses...
"Nationalizing banks will do nothing but turn us into a more apparent socialized apparatchik. There is only one party worse at running the banks than the bankers - that's the FedGov."
true, however if we nationalize some of them and than slowly liquidate (sell the assets off) it will work much better than letting Zombi banks with bad loans drug the economy down for generations.
Thank you mp and Conjure for your valueable contributions. I've learned much from you both and although you are merely words on a computer screen; I somehow don't think I will ever forget either of you. I do hope you will still stop by and say hello, you will both be missed dearly. I think you still have contributions to be made, the truth be known.
Please take this with you, the search and destroy mission against spin, lies, false hopes, obfuscation, cynical ploys, shite economics, demagoguery, and general stupidity that has led to this current situation.
Morocco Bama writes:
What comes after a Trillion? It's time we have that conversation.
...
At billion, it starts up a prefix thing.
1,000,000,000-billion
1,000,000,000,000-trillion
1,000,000,000,000,000-quadrillion
1,000,000,000,000,000,000-quintillion
"In the hyper-inflationary environment characterising the economy, our people are now using multiple currencies alongside the Zimbabwean dollar. These include the [South African] rand, US dollar, Botswana pula, euro and British pound among others."
You will be missed MP and Conjure! Your analysis has always been much anticipated and appreciated. Best of luck. Hope you change your mind and come back now & then.
mp, you have caused me to panic. I am literally panicking at this very moment. Please, what should we do? I have money in the bank and money in treasuries.
This might be a dumb question, but in a bear bond market, do yields go up?
PSgirl
yes... and it's the worst kind of bear market... as the people least able to afford losses, step into what looks like great yields, only to see yields go higher, and higher. til , kaboom.
Conjure and I may drop by occasionally to see how all of you are doing. We've learned a lot here, particularly from CR and dear Tanta, may she rest in peace.
you will be greatly missed, and Conjure doubly so. Please make those occasional visits as often as possible, you are both greatly valued members of the community.
GT
GTFO!
haloscan... (grumble)
Make it $8T!!!
Someday this war's gonna end...
OT:
CR,
There hasn't been an update to your credit crisis indicators in 2 weeks. Is there just nothing to report, are the numbers useless to to manipulation by the Fed, or is it just more fun to report on layoffs, etc.
Orrrrr......is the credit crisis over?
I thought it was 2 Trillion this morning?!
Just for fun tonight, let's all drink a shot for every trillion mentioned.
un-FUCKING-believable that anybody would even think about this!
Oh, and we're supposed to take advice from Goldman Sachs?
Trillion here, trillion there...
It's not inflationary until the hole is filled in...
Well....
Just how much do you think The Sandbox is gonna cost...hmmmmm....
At least 3 maybe 4 Trillion and what did we get out of it, oh...Bush got a hard on yeah, thousands of injured soldiers. A distorted budget and a fuckin' blank check for the MIC.
Pull yer head out pal.
.
Three trillion of that is for Goldman Sachs bonuses.
Meredith Whitney thinks this idea is ridiculous. I totally agree: pragcap.com
I don't know why we're doing the same sorts of things that Japan did...
We need more details ...- CR
Can we handle more details?
un-FUCKING-believable that anybody would even think about this!
| \t01.29.09 - 5:48 pm | #
\t bobn | \t \t \tHomepage
bobn, or that they would NOT think about this.
Every way you look at it you lose.
"I don't know why we're doing the same sorts of things that Japan did..."
Because it would have worked if they had only done if FASTER!
Not because Neo-Keynesian economics is wrong.
....the desperate gambler asks for another marker hoping to get back the previous 10 he owes "the house" already, knowing he can't possibly pay back what he already owes....
Nationalization is starting to look 'cheap' in comparison.
Someone wake me up when this nightmare is over!!
Any projections on debt by the year 2012?
I'd sleep better at night knowing there was a inflation target.
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits
I would like one of these reports to include the true rationale behind propping up the banking system. If people only knew it was of "national security" importance because the hegemony/solvency of the US was brought into harm's way by people who should not have had that responsibility. Shadow banking and wall street were outside of the checks and balances of our government yet they were able to shape our policy (domestic and foreign) for the majority of a century. They should never again be allowed to control our national integrity.
So if the Government bails out the banks. Who is going to bail out the Government?
No way on God's green earth, will the public accept this payout to business...
You can bank on it...
one thing i never understood is why 1:10 leverage is OK but 1:30 is disastrous..
in the case of the former, a 10% reduction wipes out the equity and makes the entity insovent. And such scale of reduction is not unprecedented. More so now.
It's not inflationary until the hole is filled in...
Zero | 01.29.09 - 5:50 pm | #
Best take on the whole D-I debate I've seen yet - kudos.
stop already. glodman stak has no clue anyway. for that matter why is glodman stak even in existence. why is morgan stinky still around. here are two parasitic firms that somehow received taxpayer dollars. if there ever was an outrage this should be near the top of the list
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits
crispy&cole | Homepage | 01.29.09 - 5:54 pm | #
Sign me up.
will the public accept this payout to business...
Who is asking the public?
"Horror Holiday"
(To the tune of "Jolly Holiday" from "Mary Poppins")
Lyrics by Marty Cohen, 1/28/2009
It's a horror holiday with bankers.
Bankers bring us all down low.
Though some people try to help some others,
bankers know it's all for show.
They always think of pressing their advantage.
Forclosure is the Walmart of their greed.
The country better fear when they are near.
Their loathsome avarice is chrystal clear.
Oh, it's a horror holiday with bankers.
No wonder that's it's bankers that we hate.
It's a horror holiday with bankers.
Bonuses are what they crave.
Though they short the crap they try to sell us,
they insist we must behave.
They only need another hundred billion
to get them through this year (or maybe week).
They don't want us to stop their gravy train.
"Hoocudanode?" is always their refrain.
Oh, it's a horror holiday with bankers.
No wonder that's it's bankers that we hate.
"Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt. That number could shrink if the program were limited to only certain loans or banks, but it could also grow if other asset classes such as commercial real estate loans were included."
How much you wanna bet Goldman Sucks has money down on the latter.
Nostrovia,
"Not since the passage in 1909 of the 16th Amendment - which cleared the way for a federal income tax - has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality..... it is a mugging. It is a fraud." - Sen. Jim DeMint,
"Because it would have worked if they had only done if FASTER!"
That's whole problem with this thinking. People like you assume that this recession might actually end soon. What if it doesn't? What if it lasts another 2 years? Then the banks will be i even worse condition and we'll still be pondering the same questions.
Watch the video. As Whitney says, there are necessary debts that the system needs to unload: THE PRAGMATIC CAPITALIST
Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt.
No, Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt in order to preserve Goldman Sachs in the comfort to which its management and stockholders have become accustomed.
Who is asking the public?
REBear | 01.29.09 - 5:55 pm | #
LOL... let them eat cake.
It almost seems as though GS hired Hank back? Nah...
Yawn
Wake me when the number hits 1 Quadrillion, and not a moment soon.
Are pols so dependent on donations from bank scum? Open up a retail federal bank in competition with the wounded banks.
hey brother
can u spare a dime?
Mel--apparently, yes.
"We need more details"
I think we need a bigger boat.
Nostrovia,
I have joked about it before but I am half considering raising money for the sole purpose of chartering a bank to act as a conduit for TARP money to whomever they want to encourage or guarantee lending to
The 2 Dr. Dooms, Roubini and Taleb, are both at Davos trying to talk nationalization, but they both look exhausted, as if they have been beating bankers' heads against a wall.
GS may as well have said it will take four thousand clowns to clean up this mess. They're the same economists that predicted $200 oil and $20 oil in the same year. The only think you can trust from them is that they will tell you what they want/need you to believe.
REBear,
will the public accept this payout to business...
Who is asking the public?
REBear | 01.29.09 - 5:55 pm | # Just ask those with pitchforks and torches outside the Capital and White House...
$4 Trillion is $40K per taxpayer, never to be repaid, but with interest charges starting about 3%, i.e. a tax on your future labors of $100/month. Likely to increase to $300/month at some point in time.
So, what are you going to give up in your monthly budget to pay for that?
And what about all the folks who already cannot (or didn't) make their existing monthly debt payments?
You get to pay their share too. What are you going to give up in order to pay that?
There has to be a cheaper way, even if it appears more expensive at first.
Pthh.. its only money
should I laugh or cry?
Enough with the trial balloons.
The paper wealth is gone.
With a long enough time frame (I favor a good bank/bad bank plan with an emphasis on recapitalizing the good), some of the wealth may come back. But clearly, most of the wealth has been destroyed forever.
We are quickly reaching the point where Washington's dilly-dallying deference to investor interests (extreme reluctance to wipe out stock and bondholders) is going to lead to decay in physical and not just paper wealth. LawyerLiz has made the point about empty, rotting houses in Florida. Others have talked about consumers pulling in their horns. We are already seeing shipping volumes plummet.
When the physical stock of assets starts to break down, when goods can't be sold off of store shelves, we lose something the economy can never recover. Even after the eventual recovery, what we failed to take care of today is lost.
Again, enough with the trial balloons. We need to acknowledge our paper losses, clean up the banks and the balance sheets, and get the real economy moving again.
scone,
"but they both look exhausted, as if they have been beating bankers' heads against a wall."
Oh come on. Those two? That they were playing quarters with expensive vodka until 4am is a far more likely explanation.
Nostrovia,
Off to space coast Fla.
I may have 2 closings next week. Maybe 3.
Anecdote from another formerly rich client. Main business in car repairs and managing to hang on. BUT he has 10 cars that he has performed major work on, whose owners seemingly can't/haven't pay/paid. So he's gonna file a car mechanics liens, and I gather he gets to sell the car for his money sooner rather than later.
These people must have thought they could afford the repairs. . .
"We need more details"
I think we need a bigger boat.
Nostrovia,
\t Comrade Misean is Dope | \t \t \t \t01.29.09 - 5:59 pm |
Comrade Misean is Dope | 01.29.09 - 5:59 pm | #
I want a bigger gun. Something that will vaporize Wall Street for starters.
....time to turn out the lights - the party's over.
"Not since the passage in 1909 of the 16th Amendment - which cleared the way for a federal income tax - has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality..... it is a mugging. It is a fraud." - Sen. Jim DeMint,
Black Star Ranch | 01.29.09 - 5:56 pm | #
Too bad DeMint isn't in the majority - it would be worth it to watch him squirm if he had to make the call on what to do - blow up the currency or see unemployment & business failures go well into double digit percentages... (like 20-30%). And the GOP's suggestion of a measly tax cut would be run over by these forces like baby ducklings crossing interstate at rush hour. Ya his ideological opposition would last about an hour in the face of that.
The only thing better than being king is being a big mouth in the minority during a crisis... that is something both parties pull off pretty well when they are so blessed. GOP won that lottery last November.
Mel:
I still say, the 3rd National bank through the USPS...branches in every zip code...Besides, mailings are declining and they need the business...
Positive...hire good/honest bankers and put them on govt payroll and with govt supervision...
Win-Win situation...
Are pols so dependent on donations from bank scum? Open up a retail federal bank in competition with the wounded banks.
Mel | 01.29.09 - 5:57 pm | #
We need more details ...- CR
Can we handle more details?
dryfly | 01.29.09 - 5:52 pm | #
More details!? I need a defibrillator!
"Not since the passage in 1909 of the 16th Amendment - which cleared the way for a federal income tax - has the United States seriously entertained a policy so comprehensively hostile to economic freedom, nor so arrogantly indifferent to economic reality..... it is a mugging. It is a fraud." - Sen. Jim DeMint,
Black Star Ranch | 01.29.09 - 5:56 pm | #
So this clown DeMint wants to repeal the 16th amendment, ahh the good old days of Pres. Mckinley
Rob Dawg writes:
Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt.
No, Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt in order to preserve Goldman Sachs in the comfort to which its management and stockholders have become accustomed.
You're on it, Dawg.
Black Star Ranch writes:
....time to turn out the lights - the party's over.
c'mon! just one more
The US government will provide every able bodied-person with:
1) a shovel
2) a cheap bicycle
3) a rice bowl
Report to the nearest port for a ship to China.
hire good/honest bankers
Anonymous | 01.29.09 - 6:05 pm | #
Say what?
bobn writes:
hire good/honest bankers
Anonymous | 01.29.09 - 6:05 pm | #
And order the Kosher Ham and Cheese Sandwich for Lunch
No way on God's green earth, will the public accept this payout to business...
You can bank on it...
Anonymous | 01.29.09 - 5:54 pm | #
The public has no choice. Only recourse right now is revolt. Don't count on revolt.
Just ask those with pitchforks and torches outside the Capital and White House...
Anonymous | 01.29.09 - 6:01 pm |
Hi Anon,
Politicians won't worry about pitchforks until they see them. When they see them, they will join the crowd.
Oh come on. Those two? That they were playing quarters with expensive vodka until 4am is a far more likely explanation.
Nostrovia,
Comrade Misean is Dope
.
Hey, that's uncalled for. I'm sure they're deeply in love.
LOL Misean and liz...Mental pic is disturbing...Now I shall imbibe Vodka to scrub it from my mind...
In some alternate universe, the word of 2009 is Clawback.
Clawback bonuses from bankers.
Clawback fees from banks.
Clawback profits from mortgage brokers.
...
Clawback. I can dream.
Oh, sorry liz, wasn't you, was scone...
OT Random effects of the global economic crisis
"Hoping to give relief to frustrated Bahamians during difficult economic times, the government has reduced the penalties for having sex with animals.
The Bahamas government has revamped amendments to the nation's sex crime laws reducing the penalties for people who have sex with animals. The current sentence is up to 20 years in jail. The new law would reduce this to less than five years."
BahamasB2B.com
YouTube - Paul Simon singing "Mrs Robinson" in Sioux City
Blago out 59-0
crispy&cole writes:
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits
crispy&cole | Homepage | 01.29.09 - 5:54 pm | #
double inverse recession writes:
I would like one of these reports to include the true rationale behind propping up the banking system. If people only knew it was of "national security" importance because the hegemony/solvency of the US was brought into harm's way by people who should not have had that responsibility. Shadow banking and wall street were outside of the checks and balances of our government yet they were able to shape our policy (domestic and foreign) for the majority of a century. They should never again be allowed to control our national integrity.
double inverse recession | 01.29.09 - 5:54 pm | #
Two of the best comments ever written on CR, and back to back no less.
The Bahamas government has revamped amendments to the nation's sex crime laws reducing the penalties for people who have sex with animals. The current sentence is up to 20 years in jail. The new law would reduce this to less than five years."
BahamasB2B.com
zendiet | Homepage | 01.29.09 - 6:10 pm | #
They want ponies in the Bahamas too
Hey. Maybe somebody can explain. The south end of my half of a northbound pony has not only not produced any Skittles but has started to smell funny.
Anyone for tea?
Zimbabwe abandons its currency - BBC News
Zimbabweans will be allowed to conduct business in other currencies, alongside the Zimbabwe dollar, in an effort to stem the country's runaway inflation.
The country is in the grip of world-record hyperinflation which has left the Zimbabwean dollar virtually worthless - 231m% in July 2008, the most recent figure released.
Teachers, doctors and civil servants have gone on strike complaining that their salaries - which equal trillions of Zimbabwean dollars - are not even enough to catch the bus to work each day.
"In the hyper-inflationary environment characterising the economy, our people are now using multiple currencies alongside the Zimbabwean dollar. These include the [South African] rand, US dollar, Botswana pula, euro and British pound among others."
The country's economy is now on the brink of collapse - a situation worsened by the political crisis that resulted from last year's disputed presidential elections.
but they both look exhausted, as if they have been beating bankers' heads against a wall.
scone | 01.29.09 - 6:00 pm | #
They're both exhausted because they've been partying like rock stars.
Hey. Maybe somebody can explain. The south end of my half of a northbound pony has not only not produced any Skittles but has started to smell funny.
Rob Dawg | Homepage | 01.29.09 - 6:12 pm | #
This is beginning to resemble the 'Goodbye to Yellow Teeth' ad underneath the story.
cue: A trillion? Preposterous!
said by whom?
There has to be a cheaper way, even if it appears more expensive at first.
Wisdom Speaker | Homepage | 01.29.09 - 6:01 pm | #
Nationalization - it has to be cheaper. Take them over and wipe them out. It has to scare the crap out of GS, Citi, BOA board & major equity holders.
And thought all they had to worry about were the short sellers...
Anyone work at a bank and know what the minimum amount of reserves relative to deposits are just to handle the daily churn of money? 1%
It seems like they may just quietly roll those back officially, because assets can't stay in level 3 forever to accomplish the unofficial easing of reserve requirements
Hey. Maybe somebody can explain. The south end of my half of a northbound pony has not only not produced any Skittles but has started to smell funny.
Rob Dawg | Homepage | 01.29.09 - 6:12 pm | #
RockyR | 01.29.09 - 6:13 pm | #
I getting clipped. However, I had nothing useful to say about this other than it was damned funny.
bobn:
Ther has to be some good bankers out there who fought the system...they may even be readers of this blog...
bobn writes:
hire good/honest bankers
Anonymous | 01.29.09 - 6:05 pm | #
Say what?
So the Fed provides 90% of the "money"
Does that make the Fed a fiat bank????
There is only one option. Just nationalize them. We are going to have to pay for this mess one way or another. By far the cheapest way is nationalize Citi, BofA, Wells Fargo and Chase. I cannot see another way out....$4 Trillion? No fucking way!
This is beginning to resemble the 'Goodbye to Yellow Teeth' ad underneath the story.
Pavel Chichikov | 01.29.09 - 6:13 pm | #
Yellow teeth will be the new black.
RockyR,
Do not count on it! Imho, this is how the french revolution got started...
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits
Not gonna happen. Imagine Lehman on steroids.
Comrade Kristina writes:
Oh, sorry liz, wasn't you, was scone...
Comrade Kristina
.
Pleasure.
Rob Dawg,
That's because you didn't read the instructions. You have to buy the skittles 1/2 pony refill packs from Goldman Sucks. Kinda like pez, but a bit more pricey.
Nostrovia,
Do not count on it! Imho, this is how the french revolution got started...
Anonymous | 01.29.09 - 6:16 pm | #
The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. Perish the thought, we won't see revolt.
Remember the WW? "I'm melting! I'm melting!"
The problem with wiping out bondholders is the collateral damage inflicted by CDS contracts.
Due to CDS, we cannot predict who takes the final losses, nor can we predict the magnitude.
The CDS knot is still with us.
Record unemployment claims
Sixth largest bonus payments on Wall Street for the banksters
What are we doing (going to do) about it?
Nothing..Jas wins.
Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits
Not gonna happen. Imagine Lehman on steroids.
Anony | 01.29.09 - 6:16 pm | #
The alternative is zombie banks and a dead dollar and a long drawn out Lehman. Lehman on steroids is looking better all the time.
Nationalization - it has to be cheaper. Take them over and wipe them out. It has to scare the crap out of GS, Citi, BOA board & major equity holders.
Might be best to specify some predetermined period of government control and come up with a euphemism for nationalization that implies it's temporary:
Rehabilitizationation, etc.
I think the prospect of government run finance justifiably scares people.
I think a good case can be made that consolidation and monopolization of finance have caused our problems and can't reasonably be expected to also cure them.
We will see a new war before any revolt.
Zimbabwe abandons their currency.
Zimbabwe abandons its currency
Because no one was using it anyway!
"The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. "
Thiers didn't have any of that in 1871, but the corpses were laid out in rows anyway.
By the time we are done with this mess we will have printed 10's of trillions of dollars.
Of course that doesn't say anything for how to protect yourself, other than that it's going to be mess...
ac named this weeks ago: "Double Down Economics"
Zimbabwe abandons their currency.
^^^ Government run finance.
Thiers didn't have any of that in 1871, but the corpses were laid out in rows anyway.
Pavel Chichikov | 01.29.09 - 6:21 pm | #
at least there were corpses. today's equivalent would leave skid marks on the street.
Joking thought
Auction federal reserve to highest bidder
If there is deflation/hyperinflation they lose their investment
Short of that 99.999999% profit margin, and normal inflation protection.
Worth a shot
Nationalization - it has to be cheaper. Take them over and wipe them out. It has to scare the crap out of GS, Citi, BOA board & major equity holders.
dryfly | 01.29.09 - 6:13 pm | #
And how many unintended international economic catastrophe's would result from wiping out the cash that has been shaping world affairs for the last century? I'm theoretically behind nationalization but without the proper data we'll not be able to successfully do so. There would be many world leaders who would see as it as direct attacks on their stability. We half-mock the stalled construction at different California public universities but image if those projects were simply housing and sanitation for entire developing nations. We let shadow banking put the US in harm's way by letting it be the face of our foreign policy - imperialism.
"Workers at 11 area refineries and chemical plants could go on strike as early as Sunday if ongoing negotiations fail to produce a new contract."
404 Error, No such article | Chron.com - Houston Chronicle
Great timing.
No, Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt in order to preserve Goldman Sachs in the comfort to which its management and stockholders have become accustomed.
Various factions in the oligarchy are jostling to maintain power. That's the big struggle now, it must be ugly behind the scenes. Stripping the national wealth and taxpayer are just a means to that end.
That's because you didn't read the instructions. You have to buy the skittles 1/2 pony refill packs from Goldman Sucks. Kinda like pez, but a bit more pricey.
Comrade Misean is Dope | 01.29.09 - 6:17 pm | #
Pony Pezâ¢... now that's a concept.
CDS' accounted for 40% of financial firms profits...need more be said?
RockyR writes:
Do not count on it! Imho, this is how the french revolution got started...
Anonymous | 01.29.09 - 6:16 pm | #
The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. Perish the thought, we won't see revolt.
Who do think will be driving those tanks?
Did you pay attention to what the police dept did in NO during a crisis?
Expand that to the US as a whole...The public will not accept this cost...They WILL REVOLT!!!
Thiers didn't have any of that in 1871, but the corpses were laid out in rows anyway.
Pavel Chichikov | 01.29.09 - 6:21 pm | #
Folks, I have to drive home. But, a parting thought for you that is really a piece of good news for a change: I doubt we read too many more articles about what generation Y needs in order to be happy in the workplace.
That's because you didn't read the instructions. You have to buy the skittles 1/2 pony refill packs from Goldman Sucks. Kinda like pez, but a bit more pricey.
Nostrovia, - Comrade Misean is Dope
RockyR | 01.29.09 - 6:18 pm | #
Never forget that the police/military have a breaking point where they will not follow orders.
Faith in trust goes across many boundaries.
Did anyone catch Jack Welch on CNBC defending
the bonuses ? Said it was needed to keep the talent.
The problems with tanks and aircraft is that it takes vast legions of non military citizens to produce the stuff that makes them more than heavy, motionless pieces of scrap metal.
Nostrovia,
"That number could shrink if the program were limited to only certain loans or banks"
How about none and none?
TRILLION Is The New Billio
"Nationalize...wipe out common, preferreds and bondholders...if there is any upside afterwards, then they can share in the profits"
and
Not gonna happen. Imagine Lehman on steroids."
Actually, I am imagining that. Imagine we took down Lehman but instead of trying to TARP over the aftermath, we kept on cleaning house. Imagine that we now nationalize the F'ed banks, and then if anyone starts to complain that that causes a problem for them, well, just nationalize them too. If it causes a problem overseas, well, let their government nationalize 'em, and if it causes a strategic nation like Iceland to go belly-up, fix that, but for crying out loud don't keep trying to treat a cancer patient with aspirin and antibiotics! No, once you start excising the tumor, you've got to find every last bit of it, and you've got to keep on going until you rip the entire cancer out of the global economy.
Remember, nationalization doesn't mean that a given organization shuts down and goes out of business. It just means that the demonstrably-corrupt leadership loses control of their business, and (depending on the national will) some of the investors get haircuts and/or zeroes.
Now, finally, after you've identified all the places where the cancer has metastasized, and killed it dead, you can take whatever body parts are still capable of functioning and spin them back out as cancer-free companies with fresh capital. You can even recycle some of the old management as long as they've all gotten multiple rectal exams in the process and are scared shitless about ever f'ing up like this again.
Then maybe we'll have a decent shot at rebuilding the economy, and we won't have to go through this again for another 80 years.
/rant
Off to real life...
File this under Whocouldanode?
FBI saw mortgage fraud early
$4 Trillion. Well, that is more or less in line with Roubini's estimate... though he was talking global losses, right, not just the US?
Pretty soon we are going to have 8,300 "bad banks" all funded by our grandchildren.
let's game theory this.
All cds contracts are deemed null and void.Illegal, if you may.
Then all banks, PE,HF,Insitiution's ,thrifts,CU,'s and state pensions are finally free to balance their book.
It's the come clean process. If you out of business: ok so be it, that's what makes america great,declare bk and start over. new investors who were more shrewd, less risky get to buy your asset's , your home's and cars. And new prices can be set at a clearing level.
Never forget that the police/military have a breaking point where they will not follow orders.
anon | 01.29.09 - 6:24 pm | #
Too bad that did not apply to torture or habeus corpus.
Nationalization - it has to be cheaper. Take them over and wipe them out. It has to scare the crap out of GS, Citi, BOA board & major equity holders.
And thought all they had to worry about were the short sellers...
Now you know why it will "cost 4$ Trillion." GS and JPM are trying to supplant any talk or action of nationalization.
Anonymous writes:
No way on God's green earth, will the public accept this payout to business...
You can bank on it...
The public? Who gives a Shit what they want.
No elections for another 22 months.
Did anyone catch Jack Welch on CNBC defending
the bonuses ? Said it was needed to keep the talent.
If we can do without air traffic controllers, we can do without "the talent."
what generation Y needs in order to be happy in the workplace.
RockyR | 01.29.09 - 6:24 pm | #
Trophies for everyone? No, wait... Ponies!
And how many unintended international economic catastrophe's would result from wiping out the cash that has been shaping world affairs for the last century?
double inverse recession | 01.29.09 - 6:22 pm | #
And that isn't happening now? What part of $4T isn't involved in that already? Plus the GSEs? Plus TARP?
And we still have no final guarantee we haven't hit bottom?
Or just tell them to fuck off and let Steroidal Lehman run it's course w/out any gov't assistance? You'll end up at the same result only faster w/ higher unemployment and business failure and a raging lunatic 'Lehman'.
There comes a point where choice A sucks and choice B sucks worse. We are there - now tell me again which one do YOU think sucks worse?
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts.
Declaring all CDS contracts null and void would be devastating to all markets all at once.
No one would any clue who had what value left.
Not a good idea.
Nationalization is starting to look 'cheap' in comparison.
dryfly | 01.29.09 - 5:53 pm | #
Paying off every consumer/mortgage debt in this country is starting to look cheap in comparison to this.
Let's try wiping out all debt and starting from scratch. TRICKLE UP.
The new economic model: TRICKLE UP.
Maybe if I say it enough times, it will come true. Stranger things have happened.
Said it was needed to keep the talent.
sporkfed | 01.29.09 - 6:24 pm | #
An awful lot of businesses shed talent this week.... Where are these clowns going to go?
Who needs a new badbank
We have any number of these already - and they are insolvent - looks like more repackaging of toxins
Besides isnt the Fed buying up all the bank bad bits - perhaps its the bad bank you have without realising you have a bad bank - the Fed shareholders are going to be jumping out the window when the toxins trash share value
Actually, I am imagining that. Imagine we took down Lehman but instead of trying to TARP over the aftermath, we kept on cleaning house. Imagine that we now nationalize the F'ed banks, and then if anyone starts to complain that that causes a problem for them, well, just nationalize them too.
Wisdom Speaker | Homepage | 01.29.09 - 6:25 pm | #
Sign me up. Make a reality show and it could turn a profit. 'Banker Survival'...
As for the worries that this will leave gaping holes in the financial infrastructure for a while: that would be different from the current "banks that won't lend" situation in WHAT way?
Also, it will create tremendous opportunities for survivors and new companies to flourish.
Perhaps we do need the creative destruction phase after all.
Let bankruptcy court and the FDIC deal with it. Otherwise, we're just rewarding the sociopaths who stole all the money in the first place.
$4 Trillion. Well, that is more or less in line with Roubini's estimate... though he was talking global losses, right, not just the US?
Groundhogday | 01.29.09 - 6:26 pm | #
LOL - NR must be smiling today.
Anony,
"What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts."
You loose bone head. I'm against the former and in favor of the latter.
Nostrovia,
Too bad that did not apply to torture or habeus corpus.
Blackhalo | 01.29.09 - 6:27 pm | #
Torture was brought to light by military/FBI sources.
JAG brought suit regarding the legality of the suspension of Habeus Corpus.
Google it.
The French government at the time didn't have M1 Abraham tanks, daisy cutters, and an airforce that could flatten Paris in a matter of minutes. Perish the thought, we won't see revolt.
RockyR
.
That works, right up until the moment they don't get fed or paid. "No bucks, no Buck Rogers." - The Right Stuff
The talent?
nutless monkey's could do their job!
If you've ever met anyone from Goldman Sachs, you know that they are totally fraudulent hacks!
But they still think they need their bonuses, to keep their "talent" where it is.
PonziMonetizaCoruptiCapitalism writes:
let's game theory this.
All cds contracts are deemed null and void.Illegal, if you may.
Then all banks, PE,HF,Insitiution's ,thrifts,CU,'s and state pensions are finally free to balance their book.
It's the come clean process. If you out of business: ok so be it, that's what makes america great,declare bk and start over. new investors who were more shrewd, less risky get to buy your asset's , your home's and cars. And new prices can be set at a clearing level.
Won't happen. To many people's only investment is bank stock.
Creative destruction is all well and good. But the geniuses who run the system have wired it to inflict massive collateral damage.
If it were just a few institutions going down, that would be one thing.
The term to remember is this: Cascading cross-defaults.
You don't want this coming anywhere near your financial system.
Steep drop in world wheat crop forecast
The world's wheat harvest is likely to âfall sharply" in 2009-10 as farmers cut the acreage devoted to the cereal, the International Grains Council said yesterday in its first forecast for the incoming crop.
The London intergovernmental body said the 2009-10 season wheat crop would fall to 650m tonnes â down about 5 per cent from a record 687m tonnes last season. ...
Balckhalo,
"Where are these clowns going to go?"
Hmmm...I'm not sure the carnies will have them...things are tight all over, you know.
Nostrovia,
Bill Gross, Muni bond crash.
Bill Gross On Today’s Muni Bond Crash | MAXfunds.com
Across the Curve weighs in:
Mortgages got clobbered versus swaps and one salesman said that it was Armageddon late in the day. Mortgages lagged swaps by 1/2 point to 5/8 point. The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts. They have bought big chunks of FNMA 4s between 100 and 101. Those bonds currently trade around 99. I mentioned in the preceding post that I thought that the street would force the Fed's hand regarding purchases of Treasuries. The debacle in the Treasury market has erased the gains in the mortgage market. The Fed will not wait long to buy Treasuries as dilatory action will only lead to higher mortgage rates. Swap spreads are 8 basis points wider in the 2 year sector at 63 1/4. Five year spreads are 3 3/4 basis points wider at 65 3/4. Ten year spreads are 3 basis points wider at 23. Thirty year spreads are 3 basis points wider at Negative 16 1/2. Agency spreads are unchanged in 2 year and 10 years and 2 wider in 5 years.
Google it.
anon | 01.29.09 - 6:32 pm | #
That will mean something to me when those who orderd the actions, hang.
Imho, this is how the french revolution got started...
Anonymous
Didnt I say this a few days ago the 1790s have arrived.
I think every single bank should stop processing credit card debt. No credit for you. Now some might get upset but what the heck, let them eat cake.
Ok, change that to most.
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts.
Anony | 01.29.09 - 6:29 pm | #
What do you bet the people NOT wanting nationalization & lobbying for more gov't support anyway got bonuses from said banks funded by TARP?
The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts.
Max | Homepage | 01.29.09 - 6:34 pm | #
If you're looking for a bad bank, we've already got one.
@liz
Same deal in Memphis .. a major car repair shop has half their lot filled with repaired cars held for payment,
owner sent one bmw owner to a title loan shop to get funds to pay for tranny repairs.
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts.
Anony | 01.29.09 - 6:29 pm | #
Nationalization - sure
Walking away from bad debts: totally unforgiveable. Give me ankle bracelets and debtor prisons.
But then you realize what not being able to walk away would do to pricing over time correct? Be vwery vwery careful what you ask for.
Since everyone was quoting from Airplane earlier today, here's this gem:
"They bought their tickets, they knew what they were getting into! I say, let 'em crash!"
... also applies to anyone still heavily invested in financial stocks or bonds.
Pensions and other large holders that were dumb enough to be stuck even after 2 years of this... can be resolved via the PBGC process and a nice federal tax on financial sector corporate profits going forward.
It would be cheaper to just can these banks and start with fresh ones. We don't need anymore details.
What's more, does it also mean that banks lost 4 trillion? Why reward this kind of incompetence? It's time to clean house.
Blackhalo:
Maybe because they were not from your home town, three generations of family locked into the local community!
Blackhalo writes:
Never forget that the police/military have a breaking point where they will not follow orders.
anon | 01.29.09 - 6:24 pm | #
Too bad that did not apply to torture or habeus corpus.
Blackhalo | 01.29.09 - 6:27 pm | #
"That works, right up until the moment they don't get fed or paid."
The Emperor Septimius Severus told his sons (paraphrasing): Pay the soldiers, and don't worry about the rest.
dryfly,
Now that's a bet I'll take. 100 billion quatloos.
Nostrovia,
What do you bet the people NOT wanting nationalization & lobbying for more gov't support anyway got bonuses from said banks funded by TARP?
um, doubt it.
"Creative destruction is all well and good."
Works OK for the omniscient and the omnipotent. Risky for anyone else.
The Federal Reserve has purchased several hunded billion mortgages and is significantly underwater for all its efforts.
Max | Homepage | 01.29.09 - 6:34 pm | #
If you're looking for a bad bank, we've already got one.
MLM | Homepage | 01.29.09 - 6:36 pm | #
It will be the first one nationalized (as opposed to current status 'quasi')...
If that number the $4T number is real - all previous attempts were run over and dead. It's a whole new game.
That is assuming the $4T number is real.
I'd love nationalization. I'd love to park my money somewhere safer than in the hands of moronic greedy bankers.
BUT, I cannot see nationalization working. The CDS trip-wiring setup throughout our financial system will start to go off should any substantial and unexpected losses be inflicted (ala Lehman). Writers of CDS contracts will be forced to raise cash to payout and start selling good assets. Hence the real threat of cascading defaults.
Nationalization is near impossible in our massively interconnected system.
Maybe because they were not from your home town, three generations of family locked into the local community!
Anonymous | 01.29.09 - 6:36 pm | #
I do not understand. Can you explain?
"Where are these clowns going to go?"
Is Barnum & Bailey hiring?
Pensions and other large holders that were dumb enough to be stuck even after 2 years of this... can be resolved via the PBGC process and a nice federal tax on financial sector corporate profits going forward.
Sheeple are still in buy and hold mode. Heck, some of the people who are commenting right now are still in that mode.
"That works, right up until the moment they don't get fed or paid."
The Emperor Septimius Severus told his sons (paraphrasing): Pay the soldiers, and don't worry about the rest.
Pavel Chichikov
.
Too bad the Czars, who thought they were the heirs of Rome, didn't pay attention. Hungry soldiers with worthless notes in their pockets have little motivation to shoot unarmed civilians.
Nationalization is near impossible in our massively interconnected system.
Mr. Beach | 01.29.09 - 6:39 pm | #
Use 700BB to start a good bank. Let the bad ones fail and purchace assest at market value. Nationalized!
First the regulations. Second the investigations/prosecutions. Third, wipeout of shareholders. Fourth, board members from the taxpayers, Fifth, no dividends or bonuses. And then, maybe, bailout of the bondholders by the taxpayers at some percentage (70/30?).
No more bailouts without preconditions in place.
Blackhalo | 01.29.09 - 6:34 pm | #
Agreed but remember authority is only the demonstration of commands being followed.
I lose faith and belief in your right to tell me what to do and refuse then you are just another guy with a Napoleon Complex.
The end of apartheid is an example of what happens when a ruling majority loses legitimacy.
Re: troubled mortgage and consumer debt
The truth is, this is not a consumer problem but a bank leverage problem that resulted from fraudulent accounting!
Is Barnum & Bailey hiring?
Pavel Chichikov | 01.29.09 - 6:40 pm | #
Bread & Circuses, probably so or soon to be...
PonziMonetizaCoruptiCapitalism writes:
let's game theory this.
All cds contracts are deemed null and void.Illegal, if you may.
Meaning what? Everyone that wrote a CDS gets to keep the premium but is off the risk?
How about letting the Federal Reserve become the bad bank and then abolishing it? Looks like George Bailey really screwed us this time...
Let us Nationalize the banks
BANKS ARE MADE OF MARBLE
I've traveled round this country
From shore to shining shore.
It really made me wonder
The things I heard and saw.
I saw the weary farmer,
Plowing sod and loam;
I heard the auction hammer
A knocking down his home.
CHORUS:
But the banks are made of marble,
With a guard at every door,
And the vaults are stuffed with silver,
That the farmer sweated for.
I saw the seaman standing
Idly by the shore.
I heard the bosses saying,
Got no work for you no more.
But the banks are made of marble,
With a guard at every door,
And the vaults are stuffed with silver,
That the seaman sweated for.
I saw the weary miner,
Scrubbing coal dust from his back,
I heard his children cryin',
Got no coal to heat the shack.
But the banks are made of marble,
With a guard at every door,
And the vaults are stuffed with silver,
That the miner sweated for.
I've seen my brothers working
Throughout this mighty land;
I prayed we'd get together,
And together make a stand.
FINAL CHORUS:
Then we'd own those banks of marble,
With a guard at every door;
And we'd share those vaults of silver,
That we have sweated for.
Words and Music by Les Rice
Copyright 1950 by Stormking Music Inc.
Writers of CDS contracts will be forced to raise cash to payout and start selling good assets. Hence the real threat of cascading defaults.
Mr. Beach | 01.29.09 - 6:39 pm | #
I've begun wondering whether this is actually the case (took it as gospel a year ago). Lehman CDS's settled without setting off a cascade. If this was really a huge fear, wouldn't someone in Hank's office have tried to set up a clearing house and entice/force CDS writers/holders to participate?
Blackhalo writes:
Never forget that the police/military have a breaking point where they will not follow orders.
Offer every military person a free house if they come to the dark side..
"Son, you can't handle the truth" (A Few Good Men)
"You're damn right I ordered the code red."
"MPs, arrest the Colonel"
The people I've met from Goldman Sachs are the smartest by far of all the Wall Street analysts and investors I've met. My bet is that everybody else on Wall Street agrees, and that we could very well see the financial sector take a very big hit tomorrow, which may well be what Goldman Sachs wants: let the bad banks go insolvent before the government can do anything to stop it. That way, the good banks won't have to get nationalized . . .
I've been saying for years that we wouldn't get to the end of this before a city burns and I'm sticking to it.
I'm on record: a city will be in flames before 8/31/09. Some town is Penn is already making a run at it apparently.
Blackholo: If it were isolated to failing banks, that would be one thing. But what if the process of nationalizing the banks, we discover that our insurance companies are insolvent, our states are insolvent, most of our leveraged businesses are insolvent and consumers are insolvent?
Can't nationalize every institution.
Never understood what is the value added to the world by GS. (Understand plenty about value subtracted). This is one more value-subtracted contribution from GS
"It's a whole new game."
I'm beginning to get that impression.
Nietzsche, ordinarily not my favorite thinker, wrote something memorable:
"And if you gaze for long into an abyss, the abyss gazes also into you."
I am sorry to say this, but this economic situation is a clusterf*uck-Gorgon's knot...
Its time to power down and reset...Its almost impossible to operate on a living patient...
Cancel all debt, restructure the economic controls and default on the nation's debt...
At least we have a head start out of this mess ahead of everyone else...
If we get the jump on everyone else, we will have more creditability than the other countries, and rebuild our position as the world's reserve currency...
Just one person's opinion...
Cut taxes on the very wealthy and start 2 wars. Hey, that's a great idea!
"The Bahamas government has revamped amendments to the nation's sex crime laws reducing the penalties for people who have sex with animals. The current sentence is up to 20 years in jail. The new law would reduce this to less than five years.""
Sounds like deflation to me!
Barley,
I've seen the flat emotionless eyes behind the riot shield. Forget the house. All you'd need to offer is a merit badge to folks with kill rates in the top 5% if my experience with LAPD in the 90s is any indicator.
Speaking of throwing away taxpayer's $ - A friend who works at GSA told me that there is a $150B for new gov't buildings with PV solar panels and windmills on top in locations here those things will never work .
Hiring crooked contractors better than bailout crooked bankers ? Well at least we are getting a little something for the $s and the magnitude is less .
MLM: I've begun wondering whether this is actually the case (took it as gospel a year ago). Lehman CDS's settled without setting off a cascade. If this was really a huge fear, wouldn't someone in Hank's office have tried to set up a clearing house and entice/force CDS writers/holders to participate?
The Lehman bankruptcy got the ball rolling on the massive volatility.
What do you bet that the people here who want to nationalize the banks are the same people who are ok with people walking away from their debts.
Anony | 01.29.09 - 6:29 pm | #
That does not make any sense. Forclose, BK and Nationalize. Let the bad lenders and borrowers suffer for thier sins, is a popular point of veiw here, which I share.
Griff writes:
The people I've met from Goldman Sachs are the smartest by far of all the Wall Street analysts and investors I've met
I do not know any of them personally, but I do remember when a GS analyst said oil prices would reach $200 (it was about $140 at that time), I expected some pump and dump activity and so bought some ultrashort oil (DUG).
If this was really a huge fear, wouldn't someone in Hank's office have tried to set up a clearing house and entice/force CDS writers/holders to participate?
MLM | Homepage | 01.29.09 - 6:43 pm | #
That would risk reducing the feat and make it more difficult to get the $4T bailout. What are you thinking?
The problem is the term "nationalization". Nationalization won't happen but a govt. "bridge bank" will. Bridge bank will be in operation/ownership for 2-5 years. Good assets will be sold to the private sector, bad assets wiped out or held for a better day. I'm buying more SKF tomorrow.
Just one person's opinion...
Anonymous | 01.29.09 - 6:46 pm | #
The "if you are going to panic, panic first." I like it!
Interesting, all the references to the French Revolution. Agree, this isn't really the kind of country to rebel. Weak and small unions, isolated suburbanites, a very risk-averse population.
Key issue, though, is that no one would know who to rebel against. Outside this blog most people don't know the names of the people responsible for this. Accountability has been very well avoided. Seems to me before you get a Marie Antoinette moment, you need a Madame DeFarge moment.
Arrgghhh. Me no likey haloscan today. Comment munchy.
C
take a name ass wipe
Hey--I like your name.
This article was written 2.5 yrs ago and since then we have seen all the financial malfeasance from Wall St, The Fed, The Treasury and the Bush admin.
The case for a global currency
The case for a global currency - Editorials & Commentary - International Herald Tribune - The New York Times
FRIDAY, AUGUST 4, 2006
There is a rising tide of opposition around the world to Americas unilateral assertion of its national interests. But few realize that for the United States to become a more responsible country, the world economy needs to move from the current U.S. dollar standard to a global currency.
U.S. dominance rests not only on military superiority and on the size and productivity of its economy, but also on the fact that most international transactions are denominated in U.S. dollars and more than 60 percent of world foreign exchange reserves are held in U.S.-denominated assets, like U.S. Treasury bills.
The problem for the rest of the world is that the U.S. dollar standard encourages the United States to be careless in its monetary and fiscal policies.
Here's how I see this working:
Buy the assets at a premium (because that is what is going to happen), sell them at a discount (because that is the only way a private investor will take them). Take the proceeds, buy more assets at a premium, sell them at a discount. Take the proceeds... The resources get smaller and smaller as the process goes on. But they could perhaps draw it out stripping down the assets that can be stripped down and blending them into perhaps something more marketable.
At any rate, they assume that 1) there will be buyers all along the way, 2) illiquid assets can be priced at all.
If they attach terms to the purchases, they will likely not accomplish much by way of encouraging private investment in the banks after the assets are removed from the balance sheets.
Egregiously (OT), but still far closer than a lot of others, re: tomorrow's real GDP.
I have no forecast of what it will be, other than negative, but something to think about: It may not be nearly as bad as expected, not because of the "GDP" part but because of the "real" part.
Inflation was doing its own version of cliff-diving in the last quarter of 2008, which is why real income after transfer payments was actually rising late in the year. I don't see how real GDP could possibly be positive for Q4 2008 but it may not be end-of-the-Republic bad the way some might expect.
Just food for thought.
Sebastia
Agree, this isn't really the kind of country to rebel.
Markel | 01.29.09 - 6:53 pm | #
We have done it a couple of time before... It just takes a key issue... State's rights. Taxation w/o representation..., Giving good money to bad banks?
Third attempt:
Mr Beach - cross-defaults.
BINGO!
Shirley, pay the man, we have a winner.
You, sir, are the proud owner of a Unicorn Pez dispenser.
Don't get too close, and Bahamian law revisions do not apply.
C
Don't get too
The police and military are drawn from the working class, blue collar working families.
You truly believe these people are going to become autumatons and follow orders to disperse a crowd using deadly force? You think these guys get of work after they get done doing this, go home, crack a beer and tell their families about the day. Come on!
Kent State has been forgotten much to soon.
The banks should PROMISE to make any bonuses SHADOW bonuses if goobermint gives them the $4trillion. Everybody wins!
Just out of morbid curiosity - what does the Wright Model "B" predict?
Sheeple still don't understand that their future standard of living has been gambled and lost.
Then again, something like 20% of Americans believe that the Sun goes around the Earth.
The problem is the term "nationalization". Nationalization won't happen but a govt. "bridge bank" will. Bridge bank will be in operation/ownership for 2-5 years. Good assets will be sold to the private sector, bad assets wiped out or held for a better day.
Won't happen. There's a reason that the pols are only considering a bad bank, and it's not about saving the bankers. It's about saving the lenders; all the insurance companies, pension funds, mutual funds, endowments, etc. Private placement will destroy the book (yes, i know) value of these assets.
So the bad bank is not to save just the banks, but anyone else with toxic assets.
Will it work? IMO, just can kicking.
Oooh, that typo at the end of my last comment was kinda zen.
C
Markel said: "...Outside this blog most people don't know the names of the people responsible for this."
Two problems.
How many of the people responsible for this are still in office or positions of genuine authority?
S.
GS: ...the government could potentially put up just 10 percent of the total.
What they're suggesting here is that the government leverage 10:1 to buy this $hit. What that means is that instead of raising the money now to cover potential losses the government can put that off til later.
Or, I guess, we'll look to someone else to bailout our bailout program...
Sheeple still don't understand that their future standard of living has been gambled and lost.
Mr. Beach | 01.29.09 - 6:58 pm |
As Kunstler has said time and again most Americans had better get a new dream and fast !
"Goldman Sachs estimated that it would take on the order of $4 trillion to buy troubled mortgage and consumer debt."
Read as: GS has lots of mortgage and consumer debt it purchased cheaply that it is ready to sell! Doors are open!
Counterpointer: If by your comment, you suggest that somehow, I am supporting the system as currently constructed. That would be wrong.
We've been collectively mauled over by greed and stupidity.
Its just that I don't want the solution to the problem to be worse: I do not want to live in a Mad Max world. And there are some scenarios that take us there.
Barter?:
Millionaire's Crisis Plan: Return to Bartering | News | The Moscow Times
It is just me or is Obama a big pussy?
Go get the freakin' money back dude. What's this "We will talk to Wall Street about responsibility."
What a big, soaking pussy.
Can't nationalize every institution.
Mr. Beach | 01.29.09 - 6:44 pm | #
Who is the world largest insurer? Who is the worlds largest mortgage lender? Who is soon to be the worlds largest homeowner? All this before the liberal Democrats took office.
Seems to me before you get a Marie Antoinette moment, you need a Madame DeFarge moment.
Markel
.
That didn't take long, once the journalists and other middle-class intellectuals got screwed. One by one, group after group got screwed, cleaned out, and finally got really, really pissed. It didn't take long.
Coronation of Louis XVI: 1775
Storming of Bastille: 1789
1789 - 1775 = 14 years
.
BUT, I cannot see nationalization working. The CDS trip-wiring setup throughout our financial system will start to go off should any substantial and unexpected losses be inflicted (ala Lehman)
Nationalization of the core parts of the financial system actually allows an out from the CDS tangle. Once all the systemically important CDS issuers are in the government's hands, it can look at net external exposure (remember, it get to cancel what it owes itself). If net exceeds the value of the insured bonds, the government steps in and buys the entirety of the defaulted bonds at face, thereby setting the CDS payout to zero.
In a broadscale nationalization the CDS tangle resolves via cancellation and auction buyouts and the risk is reduced to, at most, the value of the underlying bonds. Combined with the ability to assign haircuts to the bondholders when the CDS's aren't too thick, a nationalization and reset will cost a lot less than 4 trillion.
Kent State has been forgotten much to soon.
anon
uhhh... every year it seems, a bunch of the cycling goth movement has a sitdown in times square. it does'nt go so well for a few of them, and it's a pretty peaceful group.
imagine a group hot under the collar.
Mash-up for the day:
"Did anyone catch Jack Welch on CNBC defending the bonuses ? Said it was needed to keep the talent."
and
"If wishes were nickels beggars would ride"
-->
If "talent" was nickels we all would have ponies!
may well be what Goldman Sachs wants: let the bad banks go insolvent before the government can do anything to stop it. That way, the good banks won't have to get nationalized . . .
Griff | 01.29.09 - 6:44 pm | #
How does GS getting a visit from the FDIC reflect well on GS people?
FairEconomist: In a broadscale nationalization the CDS tangle resolves via cancellation and auction buyouts and the risk is reduced to, at most, the value of the underlying bonds. Combined with the ability to assign haircuts to the bondholders when the CDS's aren't too thick, a nationalization and reset will cost a lot less than 4 trillion.
Do you think it is possible to nationalize without a panic inducing bank holiday.
Any announced, but not implemented nationalization plan will have the Wall St. sharks out in full force both stoking panic and fleecing the public of their good assets.
Additionally, many gears of financial system will just stop - waiting for guidance.
I gotta go now, Kudlow is on and i know he speaks the truth and we'll all be ok shoving mustard seeds up our children ( and grandchildrens) asses
Counterpointer-
have you heard anything around your parts that the feds let Lehman fail because the Japanese were disproportionately screwed?
That rumor won't die around the water cooler...
sam writes:
I gotta go now, Kudlow is on and i know he speaks the truth and we'll all be ok shoving mustard seeds up our children ( and grandchildrens) asses
sam | 01.29.09 - 7:08 pm |
"They were the most depressing group of people Yossarian had ever been with. They were always in high spirits. They laughed at everything. "
-Catch 22
Fed buying treasuries:
We all know of Japan's QE, at least I hope everyone does by now
The action is not unprecedented in America though. I mentioned it earlier, but I don't think people caught my reference.
Operation Twist ca. 1961
I can't believe I'm actually being drawn to nationalization. $4 trillion? Does anyone get the sense that CNBC just throws out their wet dreams and hopes policy makers bite?
mustard seeds, drink...gotta love cnbc.
imagine a group hot under the collar.
Dope Alert | 01.29.09 - 7:04 pm | #
Imagine a well funded group that has studied police tactics and is very well prepared with things like gas masks, bullet proof vests, helmets...
White Lies Yellow Teeth
YouTube - White lies, Yellow Teeth
Gary said: "Just out of morbid curiosity - what does the Wright Model "B" predict?"
Nothing useful, and it never did.
Although the yield-curve is falling now, indicating that the easing is actually taking hold and having an affect.
Sebastia
CONJURE'S BOND CRASH CLOCK
This may sound a bit ridiculous, but we think we have begun a full-blown bear market in fixed income, wrote Tom Fitzpatrick, Citigroups New York-based chief technical analyst, and London-based strategist Shyam Devani."
Conjure and I don't think it's ridiculous.
The time is now--
12:00:00
JOINT STATEMENT BY MP AND CONJURE
This will be our last comment for the foreseeable future. The demands on our time no longer allow the luxury of public discussion. We now know that a depression--an extended period of both negative and weak economic growth-- is upon us.
Conjure and I think that we've contributed some things to this discussion and would like to review some specifics. We do so in order that you--particularly the more recently arrived participants here--can judge the credibility of our current predictions: global depression and bond market crash.
-Predicted the failure of the Bear Stearns hedge funds.
-Predicted the failure of Bear Stearns, much to the chagrin of banker.
-Predicted the failure of the Blackstone IPO.
-Predicted the failure of the Chrysler buyout.
-Predicted the global financial meltdown.
-Predicted the end of the last bull market.
All of this was not the result of a ouija board, but some very hard work.
Conjure and I may drop by occasionally to see how all of you are doing. We've learned a lot here, particularly from CR and dear Tanta, may she rest in peace.
The very best to all of you.
Treasuries Headed for Full-Blown Bear Market, Citigroup Says - Bloomberg.com
Do you think it is possible to nationalize without a panic inducing bank holiday.
Any announced, but not implemented nationalization plan will have the Wall St. sharks out in full force both stoking panic and fleecing the public of their good assets.
What's the problem? Announce the FDIC is putting the core banks into receivership and guaranteeing deposits. How is that going to make people sell their good assets like, oh, utility stocks? The crap assets which are really at risk are not in the hands of the public, at least not directly. A 401k panic isn't possible.
Nationalzation or Perk Walks, both would bring a lot of sunshine to Wallstreet.
FIG is done!
Zero Hedge: Is Fortress Investment Group On The Edge Of Insolvency?
Finally, we are starting to compete with Zimbabwe. They have been laughing at our small bailout numbers so far, but we will show them.
USA! USA! USA!
I don't understand why don't they just drain this S. into the toilet and instead lend money directly to businesses in need of credit?
Screw banks, if they can't stand on their own, they should be allowed to DIE.
p.s. Haven't they studied what has happened to Japan in 1990's?
Imagine a well funded group that has studied police tactics and is very well prepared with things like gas masks, bullet proof vests, helmets...
Blackhalo
.
The trillions will also have of come out of defense, at some point. Imagine we demob a huge portion of the troops worldwide, bring them home from overseas, and tell them to go find a job in this economy.
Two problems.
How many of the people responsible for this are still in office or positions of genuine authority?
Sebastian | 01.29.09 - 7:00 pm | #
Where DID Paulson slink off to?
Nationalize...wipe out common, preferreds and bondholders.
Wipe out pension funds.... then bail them out with what?
Hate to see you step back mp, you were one of the reasons I lurk here so much. Good luck and thanks for all your intel.
I'm thinking the only reason they haven't nationalized directly is because by wiping out shareholders you bring the pension crisis forward by 10 years.
Nobody would be able to handle that along with the rest of the mess.
Opinions?
Nationalizing banks will do nothing but turn us into a more apparent socialized apparatchik. There is only one party worse at running the banks than the bankers - that's the FedGov.
Let the FDIC do its job - start shutting them down. The healthy ones will take over. The overall cost will be less. CDS be damned. Blow out AIG in the meantime. Life's a Beach.
Basel Too
Lehman failed because the Brits wouldn't backstop Barclay's purchase, which the Fed couldn't politically cover for a then foreign bank
Japanese were incidental, and their capital will stick around long after most as they are afraid of losing export market share and still can't believe that the export market itself is actually drying up. None of their banks would have stepped in to buy at the time, so that was just life. Fed simply had nothing to lose by not looking out for them
I don't know the full extent of it, but there is no American love lost on Britain and that is an even bigger story given the British deficit and position of the pound. As a side benefit, no longer will New Yorkers have to worry about London beating them in top 10 lists
Sorry you're leaving, mp. I've appreciated your and Conjure's comments. All the best.
Uhhh....I called bond crash last week!
mp - you will be back!
Conjure
do stop by for a chat, a snort, a smoke, and a single malt.
a good conversation is invaluable..
cheers
Joe
Mr Beach - au contraire, it was that you had (again) identified a systemic risk that is profoundly unmitigated. I think the system is completely autofellated. Doesn't mean I support it.
But OMFG. CSC, Popeye, and now mp!?!?!?!?
C'mon, let's not do withdraw-into-shell games.
C
The very best to all of you.
mp | 01.29.09 - 7:14 pm | #
And to you mp. Safe travels.
OBTW, Anyone beside's me thinks Goldman has something on Our Goverment that might involve beautiful poppy field's, or am I jaded.
First we lose Currently Smoking Cannabis, and now mp & conjure.
Well, at least Sebastian is still posting. Groan.
Liquidate the banks. Liquidate everything. Liquidate. Liquidate. Liquidate.
"Wipe out pension funds.... then bail them out with what?"
at this time financials don't compose the large chunk of many pension & mutual funds because of the market declines.
So there is no need in bailing out those. There is also no need in nationalizing everyone, just those who can't stand on their own and are to large to fall.
(break them down, make a fall easier ! )
City & BoA should be flushed into the toilet, the rest .. will take notice
dear Tanta, may she rest in peace.
mp | 01.29.09 - 7:14 pm | #
Amen.
mp and conjure --
Thank you.
You will be missed!
The Weimar Republic inflation reached its peak by November 1923, but ended when a new currency (the Rentenmark) was introduced. The government stated that this new currency had a fixed value, secured by real estate, and this was accepted.
Inflation in the Weimar Republic - Wikipedia, the free encyclopedia
The 30-year bonds yield may rise to 5 percent by late 2009, the highest level since August 2007, according to Citigroup.
Woo--hoo--go TBT
at this time financials don't compose the large chunk of many pension & mutual funds because of the market declines.
it's not the stock. it's the debt.
on the CR post
$4trillion trial balloons
president sharply criticizes wall st for bonuses
president pushes repubs into corner on economy, bipartisanship, and reasonableness within a post-1909 context
FDIC starts sending up flares.
Citi told to shove its ordered jet up its ass.
This is the way we nationalize,
nationalize
nationalize
first thing in the morning.
sorry I couldn't come up with a better rhyme.
To many people's only investment is bank stock.
Anony | 01.29.09 - 6:33 pm | #
I want to meet that person. So, I can point and laugh and laugh...
"If wishes were nickels beggars would ride"
DCRogers | 01.29.09 - 7:05 pm | #
If wishes were horses, beggars would ride.
Nationalizing banks will do nothing but turn us into a more apparent socialized apparatchik. There is only one party worse at running the banks than the bankers - that's the FedGov.
Actually, the Feds would be much better than the current management of the major banks. Both the First and Second Bank of the United States did far better than the current set; both were fully solvent when their charters were withdrawn.
You really can't do worse than the current money center banks have done.
This might be a dumb question, but in a bear bond market, do yields go up?
There comes a point where choice A sucks and choice B sucks worse. We are there - now tell me again which one do YOU think sucks worse?
dryfly | 01.29.09 - 6:29 pm | #
I'm saying neither. We're taking the wrong approach. The US government needs to go to it's closest trading partners and allies and say, "We cannot solve this alone" and agree to a series of trully progressive global trading laws. Remove quotas, subsidies and snub out protectionism before it rears it's head. Implement international banking standards that prevent risk-mispricing events in the future. And finally, create an international system for cancelling out all of the financial products and derivatives that created this global mess. Once you have a blueprint for dismantling the bomb you can unwind the banks which currently are constricting the globe's windpipe in an orderly fashion . This will simultaneously scratch large swathes of debt from the books and prevent the necessary money printing to monetize that debt.
Mp & Conjure,
May Tanta watch over you.
Regards.
The 30-year bonds yield may rise to 5 percent by late 2009, the highest level since August 2007, according to Citigroup.
Good. Even 4% on the long bond is ridiculous. The sooner interest rates return to some degree of sanity the better.
yeah Yelds go up because prices go down.
So if you have cash, it is a good time to buy but if you have Fixed Assets, the value of them will go down.
(However, whether this prediction will happen or not is a huge question!)
Revolution? heh. . . Here in sunny LA, where there is no recession and ponies romp playfully down the gold paved streets, people are still in bidding wars for houses...
Curbed LA: What It Sold For: Spanish Revival in Silver Lake
My head is going to explode. Am I crazy? Are we crazy? Or is it everyone else?...
We need to start using the proper monetary term, gazillion.
mp--
Good bye and good luck.
I've greatly appreciated your (and conjure's) contributions here.
I want to meet that person. So, I can point and laugh and laugh...
Blackhalo | 01.29.09 - 7:24 pm | #
Laugh at the frozen dead guy who could not pay his electric bill.
What comes after a Trillion? It's time we have that conversation.
Million
Billion
Trillion
?
Laugh at the frozen dead guy who could not pay his electric bill.
loose bone head | 01.29.09 - 7:30 pm | #
If he had all of his money in bank stocks, I sure as hell will.
"Nationalizing banks will do nothing but turn us into a more apparent socialized apparatchik. There is only one party worse at running the banks than the bankers - that's the FedGov."
true, however if we nationalize some of them and than slowly liquidate (sell the assets off) it will work much better than letting Zombi banks with bad loans drug the economy down for generations.
Wow, I'm glad I checked this thread! It's not easy keeping up with 2000 posts a day, you know. Conjure all the way! Good luck!
Thank you mp and Conjure for your valueable contributions. I've learned much from you both and although you are merely words on a computer screen; I somehow don't think I will ever forget either of you. I do hope you will still stop by and say hello, you will both be missed dearly. I think you still have contributions to be made, the truth be known.
mp
Please take this with you, the search and destroy mission against spin, lies, false hopes, obfuscation, cynical ploys, shite economics, demagoguery, and general stupidity that has led to this current situation.
YouTube - IGGY POP and the STOOGES "search and destroy"
The bull gets it.
Not in a good way.
Best regards to you and Conjure. Stay safe.
C
Morocco Bama writes:
What comes after a Trillion? It's time we have that conversation.
...
At billion, it starts up a prefix thing.
1,000,000,000-billion
1,000,000,000,000-trillion
1,000,000,000,000,000-quadrillion
1,000,000,000,000,000,000-quintillion
and it goes from there most of the way.
I guess I am going too... I shut down my blog and now I will leave also...good night folks.
"In the hyper-inflationary environment characterising the economy, our people are now using multiple currencies alongside the Zimbabwean dollar. These include the [South African] rand, US dollar, Botswana pula, euro and British pound among others."
Glad I stocked up on the pula.
Bear Bond Market?
Okay
That means fewer dicriminating buyers, lots of sellors and a wild changing marketplace.
So, the first out of the gate looking for money via bonds will do what? The first buyers will do what?
ME Soveign Fund: "I have 110B in US cash and want to buy some paper"
UK: "We will give you an interest rate of 3.69% for 30 years, paid annually"
Germany: "We will give you an interest rate of 3.97% and a .05% close bonus on a series of 30 year paper and pay you monthly"
US: "We will give you an interest rate of 3.69%, a 1% up front closer discount and a .05% end bonus, all on 30 year paper."
ME: "These are not good deals"
US: "Fine we will through in a few missle shields, a US bank, and complimentary dual citizenship...good enought for ya"
ME: Free university for each student that wishes to study in the US, too"
cheers mp
don't be shy coming back
mp.
This is important.
What are you spending your time doing.
Please, let us know so that we can try to take measures to preserve ourselves.
Anyone read "Dollar Crisis" by Richard Duncan? The book was published by Wiley in 2003. Duncan runs a hedge fund out of Singapore now.
Seriously it's....amazing. A play-by-play of what has happened since August 2007.
Cheers
mp it has been a pleasure over the last few years...take care, ya'll come back now
Writers of CDS contracts will be forced to raise cash to payout and start selling good assets. Hence the real threat of cascading defaults.
Nationalization is near impossible in our massively interconnected system.
Mr. Beach | 01.29.09 - 6:39 pm | #
Declare a force majure and invalidate the CDS's contracts at the same time.
Thanks, Wile. Quadrillion, here we come.
mp | 01.29.09 - 7:14 pm | #
You will be missed MP and Conjure! Your analysis has always been much anticipated and appreciated. Best of luck. Hope you change your mind and come back now & then.
mp, you have caused me to panic. I am literally panicking at this very moment. Please, what should we do? I have money in the bank and money in treasuries.
Et tu, crispyandcole? Geez..CSC, Hoopajoops, mp, Conjure and crispy...Now I really am depressed.
This might be a dumb question, but in a bear bond market, do yields go up?
PSgirl
yes... and it's the worst kind of bear market... as the people least able to afford losses, step into what looks like great yields, only to see yields go higher, and higher. til , kaboom.
American Can, calm down, mp's just kidding.
mp, you and Conjure will one day be inducted into the CR Hall of Fame.
You will be missed - though I don't think you'll be able to stay away long. best of luck.
Writers of CDS contracts will be forced to raise cash to payout and start selling good assets
Ohhhh, thats rich!
Conjure and I may drop by occasionally to see how all of you are doing. We've learned a lot here, particularly from CR and dear Tanta, may she rest in peace.
The very best to all of you.
Bloomberg.com refer=home
mp | 01.29.09 - 7:14 pm | #
Say it aint so, mp.
you will be greatly missed, and Conjure doubly so. Please make those occasional visits as often as possible, you are both greatly valued members of the community.
No, rich would NEVER say such a stupid thing.