Ben came out and said in his testimony that the reason lending has halted is not the toxic assets, but instead concerns about the future of the economy. Thank Goodness he said it, because it should be obvious. Money is created when there is a good prospect the loan will be money good.
The disposition of the old losses is a sideshow that does nothing to resolve this underlying problem or build a better future. The only reason we should even pay attention to it is that it determines who bears the losses for prior mistakes.
Again: fixing the banks' balance sheets will do NOTHING to refire lending.
And if the "stress test" shows that these institutions are net insolvent to the tune of $1 trillion or more, then what?
Nemo | Homepage | 02.10.09 - 2:24 pm | #
Or, I should add, repair the economy. I can't believe we're wasting all this time, attention, and opportunity on dealing with existing bad assets. Fix the underlying problems -- like far too many claims on GDP, e.g. too much debt, important because creditors are unevenly distributed -- and we can get back to growth.
Let the poor bastards go bankrupt so we can rebuild. That sucks for our landed gentry, but it will truly create opportunity for the country.
It's not even a packaged package yet. Long way to go, and the Repubs could still trip this thing up:
"In the Senate, there are maneuvers that the opposition can use to force the majority to need a filibuster-proof vote total, which means that Senate Democrats will need to make sure that the three Republicans who supported the initial version of the bill are still on board for the final version."
. The Senate Has Passed The Stimulus Bill. Now What? - Political Hotsheet - CBS News
I realize the stock market is selling off, but still the USG just announced craploads of spending programs that means taking on more debt. Also.. tax cuts.
Look the reason there is not transparency is simple. They do not want to nationalize and if we knew the facts on the assets they would be forced to nationalize.
I'm more wondering what the competitive scene looks like if say 1/3 of the banks are nationalized. How do the other 2/3s complete, is it business as usual?
This is an excellent proposal, sir. It should be adopted forthwith and not deferred until a definitive plan is adopted. A demonstrated expectation of transparency is likely to impact the architecture of any subsequent plan.
And if the "stress test" shows that these institutions are net insolvent to the tune of $1 trillion or more, then what? Nemo | Homepage | 02.10.09 - 2:24 pm | #
As always, change the rules! The Lorax | 02.10.09 - 2:26 pm | #
One problem we've had over the years is not changing the rules often enough. These institutions need some stability in order to function, but too much, and they end up gaming the system. A little more instability, and they wouldn't have made such risky choices.
Remember when Florida had that little glitch with bonds and pension crap?
FYI as an example:
Florida allows some withdrawals from troubled pool
$14 bln local government fund to be split in two; executive director resigns.
BlackRock said this week that the maturity of roughly 6%, or $840 million, of the Florida pool's assets is uncertain because the issuers have defaulted or extended payments. The firm also warned that more securities could default.
FYI: The SBA has provided three ways to get or secure cash from the LGIP Pool A account(s).Level One Liquidity Pool A participants may redeem amounts up to their available liquid balance (ALB) of 15% or $2 million (whichever is greater) plus all new deposits into the LGIP. Level Two Liquidity Pool A participants can gain access to account balances in excess of their ALB by participating in the LGIP Borrowing Program. In this program, participants may borrow against their Pool A balance. In many ways, this may be a better way to get temporary liquidity because it will allow participants to avoid a redemption fee while continuing to own and earn the interest on Pool A shares. Wachovia has agreed to offer a loan program for participants in the LGIP. A number of other financial institutions also offered to support LGIP participants. Level Three Liquidity - Participants in Pool A may withdraw funds in excess of their ALB by paying a 2% redemption fee
How can you vote on a bill/package/program when the details are so incomplete. I mean, there's precedent with TARP the first, but don't the results with that (overpaying grossly) give any of these bums even a moment of hesitation?
The yield curve is flattening dramatically. Traders were short the longer maturities and had anticipated buying the 3 year note against those short positions. Those shorts have been reeled in over the last 45 minutes and the fate of the three year note is in the hands of the stock market, I think.
I wonder if we are just kicking this down the road far enough so that our hand is forced by something external.. for example.. what would happen if the UK nationalized it's major banks? Or the Swiss?
I'm no expert.. but I think that's an interesting question......
I would imagine it's much easier politically in the EU to force large banks into receivership
"Senator Mitch McConnell: "If you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn't have a trillion.""
Wasn't Mitch McConnell the senate majority leader during the period where almost half of all national debt was incurred?
Maybe he should have thought about that before voting to go into Iraq
"People invested thinking you put a dollar in, you got a dollar out," said Peter Rizzo, an analyst in New York for S&P, which rates 90 investment pools with total assets exceeding $200 billion. "That wasn't the case."
Florida's LGIP has eliminated two-thirds of its bad debt, replaced managers, increased oversight and secured a AAAm rating from S&P, the highest for a money fund. Even so, half the 132 respondents to a questionnaire from Federated Investors Inc. last March, when it was hired as an investment adviser, said they lacked confidence in the fund.
"Once you violate public trust, it's very hard to recover," said Chris Blackwood, administrator of the Surplus Asset Fund Trust in Orlando, another pool for local governments.
The state fund still has about 800 accounts, with clients in all of Florida's 67 counties. It charged $3.6 million in fees last fiscal year through deductions from interest payments.
People Watching'
MaryEllen Elia, head of Hillsborough County Public Schools in Tampa, kept $573 million on deposit throughout the pool's difficulties.
"Tell me where you should put your money to be safe," she said. "There's a lot of people watching over the fund now."
That might be worth Obama re-reading and give a copy to Bernanke and Timmy:
"Once you violate public trust, it's very hard to recover," said Chris Blackwood, administrator of the Surplus Asset Fund Trust in Orlando, another pool for local governments.
I'd rather know that they are $1 trillion in the hole - then have people guessing every day.
Why would a government estimation of level 3 values be any better than the estimate investors are already making on them? Especially since JPM grossly underestimated even in their worst-case.
This is only transparency for people who have their eyes closed. The only guessing that would stop is guessing what the best-case scenario is.
I'm no expert.. but I think that's an interesting question...... USA=CCCP | 02.10.09 - 2:33 pm | #
I am no expert either but if non-us banks are nationalized and they are counterparties in the MBS, CDS and CDO stuff and that sees the light of day... They all come down.
Limit to $12 Trillion? That will cap hyperinflation, yes? Bwahahahaha
In other news, Dow broke 79. Driving in circles for months around the 8000 interstate. Final Destination?
Also, how will the average person react when their bank shows up on the "It's Dead, Jim" list?
I do like your proposal, CR, but it is not without risks.
Nemo
.
I expect most people with cash have already moved their money, not many people are buying the "it's safe, 'cause it's FDIC insured" meme, as least around here. Just about everyone I've talked to is quietly stashing what they can.
BTW, it's "he's dead, Jim." Aka "deadjim," in re all busted things.
Geithnerize, vb: To make somebody grossly overpay for something, and still end up not owning it.
The core problem for the banking sector is that the banks have lost far, far more money than they could have and remained solvent. ...
The fair solution is that the insolvent current banks have to be shut down, their owners wiped out, their managers fired, and new banks started with new owners, new managers, and new capital. Fair, efficient, and straightfoward - but it will ruin many of those responsible for the disaster, especially current bank management. Their solution? Make the taxpayer pay to keep them rich - via Geithnerization!
@Ponyless: Another interpretation is that the bond market is back in flight-to-quality, "return of principal" mode. Which would be a clue that the stock market is about to do another "October surprise".
"I am no expert either but if non-us banks are nationalized and they are counterparties in the MBS, CDS and CDO stuff and that sees the light of day... They all come down."
That's what I'm thinking.. it would be a crafty way of handling what is a very difficult political problem here..... there are just too many hard-liners in this country.. what they don't get is that govt prop-ups are WORSE than receivership.. but it's hard to get that across
I've been hoping the UK could force our hand for awhile now
My favorite Reit is being TALFed!!!!
Oh, the humanity of shorts burning once they figure out they have been pawned!!!
I guess I can put my profits into glod for a while.
TALFed!
It will be a nice positive verb!
(Disclosure: long 400 shares AHR-PC)
TALFed!!!: Expand Reach Including Commercial Real Estate: The Consumer & Business Lending Initiative will expand the initial reach of the Term Asset-Backed Securities Loan Facility to now include commercial mortgage-backed securities (CMBS). In addition, the Treasury will continue to consult with the Federal Reserve regarding possible further expansion of the TALF program to include other asset classes, such as non-Agency residential mortgage-backed securities (RMBS) and assets collateralized by corporate debt.
@"Ben came out and said in his testimony that the reason lending has halted is not the toxic assets, but instead concerns about the future of the economy."
... and concerns about the future scope of government intervention. No one wants to dance with the 800 lb gorilla, especially when the gorilla's in a panic-frenzy.
H.R.1
American Recovery and Reinvestment Act of 2009 (Amendment in Senate)
SEC . 1281 . CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON CERTAIN BUILT -IN LOSSES FOLLOWING AN OWNERSHIP CHANGE .
... (a) Findings- Congress finds as follows:
...
(3) The legal authority to prescribe Internal Revenue Service Notice 2008-83 is doubtful.
The statute 382( rewrite Paulson did was illegal. It was what allowed Wells Fargo to pay $15.1bn for Wachovia, instead of letting Citigroup take them over.
Bair of the FDIC had endorsed Citigroup's takeover, and there was a contract in place. However when Paulson found out his personal friend Bob Steel (friends since the 70s working at Goldman Sachs, then more recently at the Treasury together, at which point Bob Steel parachuted into the CEO spot of Wachovia after a coup on Ken Thompson) was not going to get a big fat bonus check, he directed the IRS to illegally rewrite an IRS statute so that Wells Fargo could acquire tax losses, to claim back previous taxes from the IRS, to pay for the takeover. At which point Bair embarrassed herself by doing a 180° on the Citi deal, to fall over herself and do the Wells Fargo/Wachovia deal.
If anyone wants to go after Paulson, this is the case to do it with.
Horse prices and house prices mirror each other pretty closely, said one horse expert. Weve seen downturns before, but weve never seen numbers like this. Within the thoroughbred industry it cant get any worse, pricewise. Sport horses are half of what they were a year ago. I was at sales in the autumn where they didnt even put foals in the ring.
Horses look good all the time, even as their owners fret around them. But on a freezing winter day, as the steam rises from their nostrils and their sweet smell is mixed with the chilly fog, you can see quite clearly why people love horses, and consider them a luxury worth paying for.
"Nemo, at least we'd know. I'd rather know that they are $1 trillion in the hole - then have people guessing every day.
We'd just nationalize, I mean preprivatize, the bums ... and move on."
... and concerns about the future scope of government intervention. No one wants to dance with the 800 lb gorilla, especially when the gorilla's in a panic-frenzy.
Yep, good point, Wisdom Speaker. As Dick Armey said, you are ALWAYS the junior partner when you clasp hands with the Feds.
We obviously have to stop this spending spree that's going on in Washington. ... As president of the United States, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes.
Note: the toxic assets are frequently described as difficult to value, but the real problem is forecasting future defaults.
Isn't that more of "and" rather than "but"? The default rate plus the interest rates give you the current value. The default problem you outline is the problem.
The Geithner non-plan TARP 2 plan is now (mostly) out, and it is about as complex, dubious, over-engineered and sketchy as expected. The non-plan plan -- Tim G. calls it a framework, which is offensive to frameworks -- involves enough moving parts to be an economist full-employment act; it is a druidic mixture of regulatory capture, cute grad-school theorizing, and look-ma-no-socialism-here contortions to avoid temporarily nationalizing insolvent banks.
Mainstreet is going to pull their money from mutual funds, corporate and treasury bonds, pension fund exposures, all equities AND will stop contributing to the gimmick called 401Ks. That will take the playtoys away from the fund managers, hedgies, and other market players. Narrow the field. Let the speculative class prey on each other and cannibalize. They are destroying the capital markets for generations.
Lipservice to transparency and sunlight disinfectant irrespective, no changes are seen. In fact, a rampup in gameplaying is THE adverse feedback loop.
You couldn't design a better means of destroying an economy than the US government's plans to save it.
o cues here. run for your lives , the baboons are coming
Comrade Rally Monkey | 02.10.09 - 2:45 pm | #
Kinda scary f**kers, too - spent a few weeks work/study shoveling monkey poop at a primate research center many years ago - those canine teeth are freaking huge...
The United States requires a massive restructuring to address its debt, cutting back on its borrowing, spending, and wars. The bailout package is essential to keep the credit markets open. But absent sentences that include the word austerity all the bailout will accomplish is a temporary postponement. Bailout and stimulus are a stopgap.
A solution requires the country to begin to spend what it earns, reduce its mountainous debt, and address massive liabilities, restructure Social Security, pension deficits, military, and Medicare. No wonder politicians would rather spend more of your money now rather than address these problems. Because we have been spending 5 to 7 percent more each year than we earn, a forced restructuring, triggered by a currency collapse, would have the same effect on wages and purchasing power that the housing collapse had on housing prices. So let's learn from our Latin and Asian friends and act before it is too late.
I actually considered stopping contributions to my 401k..... but then I figured.. well I'm only 32.. and if it doesn't go up in value over the next 25 years my 401K will probably be the last thing I'm worried about.
I figure I'll either do ok at some point over the next 20-30 years.. or it just won't matter because I'll be driving the last of the V-8 interceptors
Their idea is to keep throwing non-committal shit out there until the market turns around and then they can say, "See, it worked".
Lets face it. They don't know what the fuck they are doing. Neither did the guys before. The whole system is far too complicated for micromanagement. They are facing private investors with Trillions and the ability to make decisions instantly and execute them electronically.
The Treasury, SEC and the Fed is so far outnumbered, out-gunned and so incredibly out-intellected that they don't have a chance. It's like watching little kids at the pool use squirt guns while the bigs kids at the pool are dousing them with giant water balloons and hoses.
Except at this point, our government is not even funny anymore. They are pathetic.
At some point we are going to have a good old-fashioned bank run.
Seriously, can anyone say with a straight face that after a Bank Failure Friday at, say, BofA, withdrawals would be honored on Monday? Or even the Monday after that?
Happy to be shown by the rest of the posters here that I am talking through my hat, but I have seen what fear does to people and how willing they are to eat early withdrawal penalties on CDs and so forth when they hear plausible rumors of a run (i.e. late 80's California S&L).
@USA=CCCP: "I figure I'll either do ok at some point over the next 20-30 years.. or it just won't matter because I'll be driving the last of the V-8 interceptors"
Look at Japan: if you started buying in 1985 and kept on buying for 23 years, you'd still be way in the hole...
U.S. banks renewed efforts on Tuesday to get policymakers to change a controversial accounting rule after the U.S. government rolled out a trillion dollar plan to rescue the financial system.
The fair value accounting rule, requiring assets to be valued at market prices, has been blamed for exacerbating the economic crisis by forcing banks to record billions of dollars in writedowns. Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Do yourself a favor and short the hell out of this little banana republic. Whaaaaa Whaaaaaaaaa Whaaaaaaaaa
Lets face it. They don't know what the fuck they are doing. Neither did the guys before. The whole system is far too complicated for micromanagement. They are facing private investors with Trillions and the ability to make decisions instantly and execute them electronically. km4 | 02.10.09 - 2:51 pm | #
Another way to think about it:
This economy was created mostly from the "bottom up" by individual people and businesses managing and thinking for themselves.
It maybe be extremely difficult or outright impossible for the government to come a long and suddenly inject "top down" management into the system during an emergency in order to save it.
It's like some guy with a bull horn yelling at people and telling them how to drive when the roads are covered with ice, or something like that.
I was on that investor call regarding JPM buying WAMU. They had not put together this analysis "in fairly short order". While JPM didn't give details, they had discussions about acquiring WAMU many months earlier, and had been looking at the portfolio for a while.
The JPM analysis looks like the losses are nearly linear with additional home price declines. I doubt that is the case. There will be more homes foreclosed, and a bank's share of losses will get larger, because the downpayments and PMI will be smaller shares of the losses.
CR: The powers that be are not interested in transparency, if they were we would see a very different response both from the FED and Obama Adminstration.
The Treasury, SEC and the Fed is so far outnumbered, out-gunned and so incredibly out-intellected that they don't have a chance. It's like watching little kids at the pool use squirt guns while the bigs kids at the pool are dousing them with giant water balloons and hoses.
Yah, and it's like watching redcoats with muskets marching in disciplined formation through the woods while patriots with rifles, concealed by the trees, nail them from every side with sniper fire... cue the film version of Last of the Mohicans...
Lessee, what's do the top ten craters from bloomie look like.... Oh my! Not craters - if they were on the moon they'd qualify for mare status.
PRINCIPAL FINL\t11.87\t-5.16\t-30.30\t18,275,917\t14:27
HUNTINGTON BANC\t1.82\t-0.79\t-30.27\t26,974,923\t14:27
REGIONS FINANCIA\t3.34\t-1.30\t-28.02\t32,273,094\t14:27
KEYCORP\t6.74\t-2.29\t-25.36\t15,808,506\t14:28
SUNTRUST BANKS\t9.39\t-3.05\t-24.52\t25,806,252\t14:27
MARSHALL &ILSLEY\t4.15\t-1.27\t-23.43\t9,502,626\t14:27
FIFTH THIRD BANC\t2.25\t-0.64\t-22.14\t37,736,402\t14:27
ZIONS BANCORP\t12.05\t-2.79\t-18.80\t6,819,102\t14:27
AMERICAN CAPITAL\t2.71\t-0.62\t-18.62\t4,136,292\t14:27
BANK OF AMERICA\t5.64\t-1.25\t-18.14\t467,540,45
This is great, Timmy builds up a big show, delays the press conference by a day, builds up expectations and then offers nothing but shit. This is a great way to build confidence and then not provide transparency, to not address insolvency and the debt crisis -- but to give a a re-heated Paulson Pie without even a new package. The next time he speaks, or Obama, or bernanke, the market will go down 4% every time -- this is great, thanks Timmy, thanks Obama, thanks for having the balls to do nothing and thanks for helping take an initial step towards restoring confidence .... you spineless pricks!
2. The JPM analysis looks like the losses are nearly linear with additional home price declines. I doubt that is the case. There will be more homes foreclosed, and a bank's share of losses will get larger, because the downpayments and PMI will be smaller shares of the losses.
Good catch. Also, both default rate and recovery rate worsen with home price declines; so, even apart from that, losses should be faster than linear.
I am simply amazed that folks are not buying all of the TALFed assets to resell to our friends the Fed- after all they are going to be buying them for far more than they have been trading at- in other words- FREE MONEY!!!
"This is great, Timmy builds up a big show, delays the press conference by a day, builds up expectations and then offers nothing but shit. This is a great way to build confidence and then not provide transparency, to not address insolvency and the debt crisis -- but to give a a re-heated Paulson Pie without even a new package. The next time he speaks, or Obama, or bernanke, the market will go down 4% every time -- this is great, thanks Timmy, thanks Obama, thanks for having the balls to do nothing and thanks for helping take an initial step towards restoring confidence .... you spineless pricks!"
Actually in a way.. maybe it is good.. .if Citi can go a bit lower the govt might have it's hand forced in a GOOD directio
Damn it mp, get over to nakedcapitalism and RGE and Huffington and look for higher volume traffic; I ♥ CR, but the traffic flow is too low, however, the people that come here are really great and interactive, but you need more eyeballs and more traffic!!
Both gold and silver are soaring today and breaking through technical trading barriers decisively.
They are finally doing what they are supposed to do as "hard money" in times of global financial stress.
I don't see much holding them back from another 10-20% upside from here.
The miners are down today, but not down nearly as much as the market. The miners should bounce back.
GDX = broad basket of miners.
SLW = pure leveraged silver play.
SLW has underperformed the market lately, partly as a result of a bought equity-raising. It will be volatile short-term but should do very well long-term.
The Treasury, SEC and the Fed is so far outnumbered, out-gunned and so incredibly out-intellected that they don't have a chance. It's like watching little kids at the pool use squirt guns while the bigs kids at the pool are dousing them with giant water balloons and hoses. Wisdom Speaker | Homepage | 02.10.09 - 2:57 pm | #
This also illustrates what may be the fundamental problem with central management:
In order to get it to work you have to restrain peoples' intellect and free will. You basically have to have a conformist dumbed-down populace so they don't outmaneuver and out-think you.
I think this helps explain why the socialist experiments have generally lead to these ponderous lethargic sort of economies - you need sort of a declining complexity gradient from the central authority. The only way to accomplish that is by "forcibly" simplifying the behavior and ideas of the managed.
I think this also explains why more "liberalized" free market type economies seem to be more innovative and prosperous, but also why they're more prone to unexpected and dramatic boom/bust cycles.
I was speaking to a Transformational Guiddess last weekend (No shit, I have her business card) and she told me all these problems with the economy were caused by people allowing negative energy into their lives.So don't worry,be happy!
mp,
Why bother? With the TALF, TARP and BARF, we have essentially siezed them anyway.
What simply amazes me is that folks still haven't figured out that we are printing our way out of this, and what that means in terms of the dollar. They still think in terms of a hard dollar (Strong dollar mumbo jumbo notwithstanding!) when the reality is that this crisis is making our fiat financial system quite obvious to the rest of the world!
Wall street is just not waking up to the potential of oceans of capital coming straight outta the Treasury and buying up manure!
Who cares if an auction fails- because it will never actually fail!!
No Nationalization. A National Banking System, meaning Federal, really Federal, not Federal as in Federal Reserve, but not via nationalization of the losses of failed private institutions. Let the priavte institutions fail, and allow the transference of any "good" assets to the newly formed National Federal Banking System. The shareholders eat the losses. If they're unhappy about them, give the shareholders carte blanche to do with the banking execs what they will.
As it stands now, the exact opposite is being proposed, or floated.
"U.S. banks renewed efforts on Tuesday to get policymakers to change a controversial accounting rule after the U.S. government rolled out a trillion dollar plan to rescue the financial system.
The fair value accounting rule, requiring assets to be valued at market prices, has been blamed for exacerbating the economic crisis by forcing banks to record billions of dollars in writedowns."
Hummmmmmmmmm
On September 17, a commentator on CNBC asked, Did you keep the interest rates too low for too long in 2002-2003? Greenspan immediately responded, The market did. Rates were not too low or the period too long, either, because the market, not the Fed, made the decision on the level and the time, and the market is never wrong; it is what it is.
In the land of AAA liars
Everybody looking for some buyers
Truth needs a pair of pliers
All this shit just transpires
People want cease fires
What about all the high flyers
Something about friggn bonfires
The same thinking also applies to large top-down-managed corporations. We've just seen that when the central management botches the incentives and the workers figure out how to work around the risk management structure, then the banks blow up and the central management has no clue what went wrong...
Unfortunately, this trend of centralization doesn't appear to have hit its zenith in the U.S. yet...
This is BAD. This is the day it will all start to unravel on them. Load your guns. Get your kids indoors. Send the bad kid to grandma's house. Close the blinds. Hide the beer. Get out the bong...
Timmy and the Obamanites presented this song and dance previous to today and were laughed off the stage by their audience. Who was attendant you ask? Congress critters of both parties. Amazing, they get it, Mr. Market gets it, J6P gets it.
The Production Index also increased by 5.8 percentage points from December's reading. Again the index reading pointed to further overall contraction, but at a significantly slowed pace. And three industries now reported production growth: Textile Mills; Petroleum & Coal Products; and Food, Beverage & Tobacco Products.
As you might expect, those manufacturing segments that are now seeing new orders, and increases in production are the first to indicate growth in their payrolls in January. The top segment for employment growth was indeed the Petroleum & Coal Products segment.
Additionally, in a healthy change from the reported Q4 buildup in inventories, manufacturers' inventories contracted in January, with the only industry to report higher inventories being the Computer & Electronic Products industry. All others reported declines in inventories.
Backlog decline is also slowing. The ISM's Backlog of Orders Index was 6.5% higher in January, with 53 percent of survey respondents reporting improving or no change in their backlogs from December.
This is no doubt the healthiest manufacturing report that Ive seen since this recessionary cycle began. These indexes provide a handful of leading manufacturing indicators, most of them now pointing to a marked decrease in the rate of contraction in the manufacturing industry. http://mast-economy.blogspot.com/
In October I was ranting about prosecuting the yahoos under Sarbanes-Oxley and possibly fraud statutes. I suggested Sarbanes-Oxley because it seems to have a lower threshold. In simple terms, Sarbox requires corporate officers to certify that the information in a financial statement fairly presents the financial condition of the company AND that the financial reporting processes have been assessed and audited to ensure that the reporting process will fairly present the financial condition of the company. The prosecutor does not have to prove criminal intent to perpetrate a fraud.
There is no way that the financial statements fairly presented the risks of their business strategies.
You suggested tabling pursuit of prosecutions until the crisis was past. Is it now time to begin demanding prosecutions?
In regard to your post, the stress tests should have already been performed and reported. At a minimum, the financial statements should already present sufficient information to support stress testing by outside parties.
"BANKS in the UK have been ordered by financial regulators to assess how they would cope in the event of house prices crashing by 40 per cent.
The instruction to include a housing slump scenario in their stress-testing models comes after the Financial Services Authority found that some banks were failing to include gloomy enough assumptions in their modelling.
The FSA said yesterday that an “appropriate” benchmark was to assume property prices fell by 40 per cent and that 35 per cent of mortgages in default ended with homes being re-possessed. . . . "
Why thank you Werner, that was actually the end of my performance today, as I ♥ Timmy! However, it may be a fine new name for me in the future (here) which can be added to my long list of changes...
I did need to toss in a verse on the newswires though
With the kind of numbers being bandied about we are soon going to see the Einstein ring around the black hole of the financial abyss. Divide by zero error - anything you throw at the hole just accelerates the process.
The same thinking also applies to large top-down-managed corporations. We've just seen that when the central management botches the incentives and the workers figure out how to work around the risk management structure, then the banks blow up and the central management has no clue what went wrong...
Unfortunately, this trend of centralization doesn't appear to have hit its zenith in the U.S. yet... \t Wisdom Speaker Wisdom Speaker | Homepage | 02.10.09 - 3:13 pm | #
I've actually worked for small companies that got bought up by very large companies and seen how the newly acquired businesses had to be made much more rigid and conformist to be integrated into the system. I remember actually receiving literature talking about having "one mind" and "one culture", as well as watching the management overhead double for the same number of projects.
I actually understand this process and why it's necessary. I think it's fine for a corporation.
When it's done on a national scale, however, I think it becomes something completely different and much harder to justify - you can walk away from a company, and companies that do badly or mistreat people fail due to competition.
These forces don't exist on a national scale. There's no escape from tyranny and pettiness once it defines a nation.
Anyone find it funny that once the central banks did an end run around LIBOR by guaranteeing transactions and juicing it further with swap lines, that because LIBOR is now low banks are deleting lines of credit?
I bet you would find it funny if you could watch Jeff Goldbloom in Jurassic Park say "Life will find a way"
although this was a tad more predictable than dinosaurs taking over an island
One last thing: THE FASB need to be destroyed ASAP along with SEC and FOMC and various inept agencies like DOJ, Treasury, DOL, etc ...
Re: July 30 (Reuters) - The Financial Accounting Standards Board, which sets U.S. accounting rules, voted on Wednesday to delay accounting changes that would affect trillions of dollars in off-balance sheet assets at banks and financial companies.
Reversing an earlier decision to make some parts of the rule change effective at the end of this year, FASB members voted that the rule should take effect all at once, for reporting periods after Nov. 15, 2009.
""meaning congressional approval.....so in essence he is right. Structuring this POS as non-recourse ensures that there need be no 'authoritay' to."
yup.
note the expansion of the TALF to $1T.
timmy, benny & larry are trying to do an end around congress."
A non-recourse loan is not a loan. It is my understanding that it is illegal for the FED to offer non-recourse loans. Fat chance though of anything happening.
The same thing was done with the BSC fiasco.
It will be non-recourse with the FDIC picking up the losses. FED will not lose a dime.
citizen energyecon
I guess in the analogy the bond vigilantes are the velociraptors. What are they doing?!!! They're communicating with each other, oh no, we're done for...
2 things I will never comprehend: Why people believed private banks could afford to pay a dividend over the long term Why people didn't expect banks to cash in on free FDIC money. (Take deposits, pay yourself a bonus for years, go BK)
The sensitivity analysis is long overdue. The followup question to ask is whether it covers all assets on the books. Another biggie are the assumptions used to determine derivative impacts. The so called worse case has to include negative feedback across the economy and other assets. Roubini's latest estimate may still be low.
Great suggestion, CR. No one can firmly determine what these assets bags are worth today (with them being marketed) or tomorrow (when the value may be lower - or even possibly higher.
But alternate scenarios are just made for this uncertainty, as long as the starting assumptions are clearly stated.
Oh gheeze, one last thing that i just found, and have no clue why I kept it ... here, someone take this:
But the falling of firewalls has elevated the importance of sections 23A and 23B of the Federal Reserve Act. These provisions both limit the amount of credit flow from banks to their affiliates and require that such transactions be collateralized and made at market prices. GLB extended these provisions to the fund flows between banks and their own financial subsidiaries and even in some respects between holding companies and the financial subsidiaries of banks
$38 Trillion in private debt says all these "plans" fail. Those who can borrow and spend won't, those who can't will just wait for the eviction notice.
Haven't these guys heard of the "pushing on a string" notion.
I realize that Canada is financially insignificant, but this is just too precious to keep to myself 21 Models
The Bank of Canada uses 21 models to study the economy, and four of them are among the most sophisticated in the country, Carney said when asked if he was locked into using such tools.
21 models guys! We're practically Baskin Robbins with 32 flavors. Best models of any central bank in the country, I promise
The same person who talks about "money rains" certainly can't be an advocate of "fiscal discipline". The two concepts are absolute polar opposites. ac | 02.10.09 - 2:30 pm | #
Maybe 'fiscal discipline' doesn't mean what you think it means. Princess Banker anyone?
The recent past has affirmed that many market participants are clueless. The reality is that devaluation is the only way out. Allen C | 02.10.09 - 3:16 pm | #
Exactly; any other way and "this sucker is goin' down";-)
Can't help but think Bernanke, Paulson, Geithner, Obama, all of them know this is a sinking ship with no way to stop it. These "plans" are merely to prevent full-scale panic and global chaos, as we ease into the pain gradually.
I do not believe that the new "plan" will succeed but I am refreshed listening to Geithner in the way he at least addresses the problems. The next administration may even get closer to the truth.
CR's suggestion is exactly on target. Rather than posit a once and for all solution, focus on the steps that push us in that direction.
The ground needs to be shifted, first, to enable pre-privatization. And that is a process well underway.
The NYT story on today market tank says the Geithner "plan" raises more questions than it answers. Question lead to more information about the condition of the banks, the use of TARP I, etc....
And here is what Andrew Sullivan, a free market and proudly Thatcherite conservative, writes today about his support for Swedish style nationalization:
10 Feb 2009 11:59 am
A Very Provisional Reaction
I'm not an economist, just someone trying to understand this mess. I found Geithner's remarks unreassuring. If the goal was bold early action to grasp the nettle of the banks' insolvency, and to find a way to expose and control it, then this struck me as more muddling through, with better oversight. The more I read and talk to people who seem to know, the more it appears that we need to do what the Swedes did: take over and restructure the banks. What I find most depressing, however, was the transparent attempt by Geithner, or those around him, to spin his victories over his opponents as the real story. The NYT's piece today, and Brooks' stenography, do not suggest to me the proper focus on what we need to do, as opposed to bragging about and spinning internal internecine debates.
The Dish is fast gathering more reactions from those with more expertise on the web. Stay tuned.
rather than thinking only about the solution, as if everything can always be accomplished in a one fell swoop action from the Olympian heights of Conjure's global point of view, try also to take the human political animal point of view, and construe events as being embedded within processes. The end of the processes might not be known, but successive steps lead to actions and reactions and consequences, unintended and intended.
Looked at that way, these are steps toward nationalization, something that was utterly unthinkable in the U.S. until just the other day.
I was the BARF czar one night in college. Drank a metric fuckload of tequila and wore a Burger King paper crown after munchies hit at oh dark thirty. I painted their bathroom walls, ceiling and floor.
Parker and Stone.
Don't get too comfortable, Canadians are everywhere. There might be one in the room with you right now and you would never know until it was too late. If you want to hijack this thread, well then you can take off hosehead
Oh, and conjure's clock stopped working because it melted as we passed the event horizon, there is no escape... FaradayShieldedHeadgearBrigade | 02.10.09 - 3:21 pm | #
It didn't need to melt; time essentially stops at the event horizon.
LA-Sen: Porn star Stormy Daniels is considering challenging David Vitter.
She said she's planning a "listening tour" around Louisiana to talk about a range of matters, including the economy -- which along with women in business and protection of children are the three issues listed on her Web site. When told Vitter can be a tough opponent, she said she's "always up for a good fight."
"I think anyone that knows me ... is more than aware of that," Daniels said. "Politics can't be any dirtier of a job than the one I am already in."
special relativity keeps time constant for the black hole food (us)up to the moment of intersection with the event horizon... outside observers see time stop at the edge
inside the singularity everything ceases to correspond to the universe... there is no up, there is no time, there is no distance
If Im reading this correctly, Timothy Geithners financial rescue plan actually might lead to bank nationalizations after all. The key thing is provision 1b of fact sheet:
Capital Assistance Program: While banks will be encouraged to access private markets to raise any additional capital needed to establish this buffer, a financial institution that has undergone a comprehensive stress test will have access to a Treasury provided capital buffer to help absorb losses and serve as a bridge to receiving increased private capital. While most banks have strong capital positions, the Financial Stability Trust will provide a capital buffer that will: Operate as a form of contingent equity to ensure firms the capital strength to preserve or increase lending in a worse than expected economic downturn. Firms will receive a preferred security investment from Treasury in convertible securities that they can convert into common equity if needed to preserve lending in a worse-than-expected economic environment. This convertible preferred security will carry a dividend to be specified later and a conversion price set at a modest discount from the prevailing level of the institutions stock price as of February 9, 2009. Banking institutions with consolidated assets below $100 billion will also be eligible to obtain capital from the CAP after a supervisory review.
Theres clearly a desire here to avoid nationalization. A strong desire. But if the situation in the banking sector is as bad as the skeptics tend to think, this plan is going to end up with the government owning a substantial share in at least some large banks.
Tim is a light weight. He should save everyone time and resign now. There is no plan cause no one agrees and the banks for sure do want to sell at market and no one wants to over pay. It is time for hard leadership. Nationalize the banks, Declare a bank holiday and fix this mess before we all go down with it.
Vehicle inventories rose 1.7 percent, after increasing 1.5 percent the prior month, while auto sales fell 8.1 percent, todays report showed. That pushed the industrys inventory-to-sales ratio up to a record 2.31 months.
so that means they still don't have a handle on the business and are still overproducing. wagner has another sit down with congress about viability next week.
a 10mm saar and 2.3months supply on the lots means there' 2 million cars(new) for sale in america, collecing dust and getting a year older.
special relativity keeps time constant for the black hole food (us)up to the moment of intersection with the event horizon... outside observers see time stop at the edge
inside the singularity everything ceases to correspond to the universe... there is no up, there is no time, there is no distance FaradayShieldedHeadgearBrigade | 02.10.09 - 3:45 pm | #
That's correct to the extent that I understand it.
Well today was obvious to see (energy, C&C and me talked about this earlier and at the end of last week) question is how long do they continue to drive money into T-notes? Got a 30 year coming next week too....
\tI'll be so happy today if SRS finishes up $10 a share. rich | 02.10.09 - 3:38 pm | #
I was THIS CLOSE to loading up on FAZ yesterday. Didn't have the guts. Instead, I bought a boatload of GRZZX which will still make a fine showing today and will allow me to sleep at night!
Who is going to overtly devalue first? Allen C | 02.10.09 - 3:30 pm | #
IMO it will eventually result in coordinated devaluation. Across the board debt devaluation approved and abetted by the G20. It just needs to simmer a few more months.
Asun, Rich is much better than me in short term trades. I'm only good with fundamentals and the medium/long term.
Fundamentals for CRE are terrible, yet the companies underlying the IYR have been surprisingly resilient. My gut tells me that today's selloff will trigger margin calls and spook the technical traders. So for the time being, I'm going to hold my SRS calls.
Lately I feel like the worst companies have been pumped the most. I'd expect them to get crushed in the next wave of deleveraging.
Sen. Jack Reed of Delaware says that there is a "growing analytical study" that housing prices are overcorrecting at this point. And that every household in America's wealth is being wiped out.
Who commissioned this "study"? The NAR? What a ridiculous assessment. Housing won't be overcorrecting until values are below 2000 levels.
And no, every household in America's wealth isn't being wiped out. To say nothing of the large number of responsible renters (always forgotten), there's also the huge portion of America's homeowners who bought before the bubble, and because of that their equity is still doing quite well (in fact, better than expected, since we're still seeing bubble pricing). It's only that small percentage of Americans who bought homes for the first time between 2000-2007 who are in trouble.
There is not enough available dollars to nationalize all the big banks.
If they want any chance, they'll have to let at least 1 or 2 go bankrupt, while giving their full strength to the other remaining banks EvilHenryPaulson | Homepage | 02.10.09 - 3:48 pm | #
If even one more big one goes, they all go. It does not even have to be in the US. Timmy should be using his 350BB to start a good bank, so that the broader market can keep chugging along while the bad actors go away.
All beings were pressed down by approaching rain
Only one was moving, a yellow span worm
A thin segmented beast with a white belly
And black thread that ran down the center of it
With its whole length it spanned, length upon length
Curving and straightening, bending and measuring
One millimeter at a time
And as it went it sewed with its black thread
Each time it climbed a flower it broke a petal
The red and white and pink of echinacea
The cobalt of the daisy, the white of the mint
And it sewed the color to itself
All beings were pressed down by heaviness
But the storm had not yet come
All was still and all were oppressed
But the worm that spanned and spanned and climbed
And the Lord said: I will transform all Men
Make them worms, and let them cover themselves
Let them cover themselves with borrowed color
Let them measure My garden with their bellies
Let them climb the stalk of every flower
And every still plant, and every docile tree
And let them arduously measure themselves
Day after day with false measure
And let them be that way
Until the coming of the storm
That will be good once they actually have a plan.
Heresy!
just give all the banks to jamie and let him worry about it. he obviously has it all under control.
Thirsty
And if the "stress test" shows that these institutions are net insolvent to the tune of $1 trillion or more, then what?
From Marketwatch:
2:04 p.m. Bernanke: Fiscal discipline key to present funding needs
2:03 p.m. Bernanke: Still plenty of market funding for Treasurys
Ben came out and said in his testimony that the reason lending has halted is not the toxic assets, but instead concerns about the future of the economy. Thank Goodness he said it, because it should be obvious. Money is created when there is a good prospect the loan will be money good.
The disposition of the old losses is a sideshow that does nothing to resolve this underlying problem or build a better future. The only reason we should even pay attention to it is that it determines who bears the losses for prior mistakes.
Again: fixing the banks' balance sheets will do NOTHING to refire lending.
We don't want the truth.
We can't handle the truth.
And if the "stress test" shows that these institutions are net insolvent to the tune of $1 trillion or more, then what?
Nemo | Homepage | 02.10.09 - 2:24 pm | #
As always, change the rules!
Ah, maybe some banks do not want people to know? I am not sure I want to.
Alternatively, the institutions could just draw a picture of a large Egg, or an empty pot, or a hole in the ground, or a null sign overlying the USD.
Sexier on Powerpoint.
No one has a crystal ball. ~CR
Was that a plug? ;)
But seriously if any excel wonks want a good add on package that allows the user to run scenarios....
.................
Nemo, at least we'd know. I'd rather know that they are $1 trillion in the hole - then have people guessing every day.
We'd just nationalize, I mean preprivatize, the bums ... and move on.
best wishes.
Or, I should add, repair the economy. I can't believe we're wasting all this time, attention, and opportunity on dealing with existing bad assets. Fix the underlying problems -- like far too many claims on GDP, e.g. too much debt, important because creditors are unevenly distributed -- and we can get back to growth.
Let the poor bastards go bankrupt so we can rebuild. That sucks for our landed gentry, but it will truly create opportunity for the country.
It's not even a packaged package yet. Long way to go, and the Repubs could still trip this thing up:
"In the Senate, there are maneuvers that the opposition can use to force the majority to need a filibuster-proof vote total, which means that Senate Democrats will need to make sure that the three Republicans who supported the initial version of the bill are still on board for the final version."
.
The Senate Has Passed The Stimulus Bill. Now What? - Political Hotsheet - CBS News
Get used to Squillion.
A squirrel with 600 zeros behind it.
Also, how will the average person react when their bank shows up on the "It's Dead, Jim" list?
I do like your proposal, CR, but it is not without risks.
Just a picture of a pony would do it too.
What the hell is wrong with the long bond?
I realize the stock market is selling off, but still the USG just announced craploads of spending programs that means taking on more debt. Also.. tax cuts.
Look the reason there is not transparency is simple. They do not want to nationalize and if we knew the facts on the assets they would be forced to nationalize.
Quite simple really.
I'm more wondering what the competitive scene looks like if say 1/3 of the banks are nationalized. How do the other 2/3s complete, is it business as usual?
"2:04 p.m. Bernanke: Fiscal discipline key to present funding needs"
WTF is going on here? Demonic possession? Alien mind control?
The same person who talks about "money rains" certainly can't be an advocate of "fiscal discipline". The two concepts are absolute polar opposites.
This is an excellent proposal, sir. It should be adopted forthwith and not deferred until a definitive plan is adopted. A demonstrated expectation of transparency is likely to impact the architecture of any subsequent plan.
Ahhh yeah:
Savings glut.
Savings glut.
Savings glut.
CR, I'm sure the O team asked for that, but Timmy won.
Nothing 5,000 FDIC contrators and 3,000 FDIC supervisors can't handle...
And if the "stress test" shows that these institutions are net insolvent to the tune of $1 trillion or more, then what?
Nemo | Homepage | 02.10.09 - 2:24 pm | #
As always, change the rules!
The Lorax | 02.10.09 - 2:26 pm | #
One problem we've had over the years is not changing the rules often enough. These institutions need some stability in order to function, but too much, and they end up gaming the system. A little more instability, and they wouldn't have made such risky choices.
Remember when Florida had that little glitch with bonds and pension crap?
FYI as an example:
Florida allows some withdrawals from troubled pool
$14 bln local government fund to be split in two; executive director resigns.
BlackRock said this week that the maturity of roughly 6%, or $840 million, of the Florida pool's assets is uncertain because the issuers have defaulted or extended payments. The firm also warned that more securities could default.
FYI: The SBA has provided three ways to get or secure cash from the LGIP Pool A account(s).Level One Liquidity Pool A participants may redeem amounts up to their available liquid balance (ALB) of 15% or $2 million (whichever is greater) plus all new deposits into the LGIP. Level Two Liquidity Pool A participants can gain access to account balances in excess of their ALB by participating in the LGIP Borrowing Program. In this program, participants may borrow against their Pool A balance. In many ways, this may be a better way to get temporary liquidity because it will allow participants to avoid a redemption fee while continuing to own and earn the interest on Pool A shares. Wachovia has agreed to offer a loan program for participants in the LGIP. A number of other financial institutions also offered to support LGIP participants. Level Three Liquidity - Participants in Pool A may withdraw funds in excess of their ALB by paying a 2% redemption fee
How can you vote on a bill/package/program when the details are so incomplete. I mean, there's precedent with TARP the first, but don't the results with that (overpaying grossly) give any of these bums even a moment of hesitation?
Senator Mitch McConnell: "If you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn't have a trillion."
So, how long to pay off 10 Trillion, assuming 1% interest rate, to be kind?
Ponyless I got this at Across the Curve
The yield curve is flattening dramatically. Traders were short the longer maturities and had anticipated buying the 3 year note against those short positions. Those shorts have been reeled in over the last 45 minutes and the fate of the three year note is in the hands of the stock market, I think.
The same person who talks about "money rains" certainly can't be an advocate of "fiscal discipline". The two concepts are absolute polar opposites.
Bernanke talks in circles.
One problem we've had over the years is not changing the rules often enough
xxxxx | 02.10.09 - 2:31 pm | #
We have plenty of rules, we just failed to enforce them.
ades, thanks. I'll take a look.
I wonder if we are just kicking this down the road far enough so that our hand is forced by something external.. for example.. what would happen if the UK nationalized it's major banks? Or the Swiss?
I'm no expert.. but I think that's an interesting question......
I would imagine it's much easier politically in the EU to force large banks into receivership
Senator Mitch McConnell knew Jesus and you sir certainly are no Jesus..
calling all shorts
market opening 30 minute warning
We have plenty of rules, we just failed to enforce them.
The Lorax | 02.10.09 - 2:33 pm | #
I agree with both of your statements, but that doesn't change what I stated.
Transparency would be a bad thing. Then everyone would know that BAC, GS, Citi, CA, NV, FL, NY and AZ are BK, instead of just a select few.
"Senator Mitch McConnell: "If you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn't have a trillion.""
Wasn't Mitch McConnell the senate majority leader during the period where almost half of all national debt was incurred?
Maybe he should have thought about that before voting to go into Iraq
McConnell = assclown
Then again Reid = spineless Turd
February 4, 2009
Florida Investment Pool Fails to Attract Investors After Freeze
Florida Investment Pool Fails to Attract Investors After Freeze
liminating Bad Debt
"People invested thinking you put a dollar in, you got a dollar out," said Peter Rizzo, an analyst in New York for S&P, which rates 90 investment pools with total assets exceeding $200 billion. "That wasn't the case."
Florida's LGIP has eliminated two-thirds of its bad debt, replaced managers, increased oversight and secured a AAAm rating from S&P, the highest for a money fund. Even so, half the 132 respondents to a questionnaire from Federated Investors Inc. last March, when it was hired as an investment adviser, said they lacked confidence in the fund.
"Once you violate public trust, it's very hard to recover," said Chris Blackwood, administrator of the Surplus Asset Fund Trust in Orlando, another pool for local governments.
The state fund still has about 800 accounts, with clients in all of Florida's 67 counties. It charged $3.6 million in fees last fiscal year through deductions from interest payments.
People Watching'
MaryEllen Elia, head of Hillsborough County Public Schools in Tampa, kept $573 million on deposit throughout the pool's difficulties.
"Tell me where you should put your money to be safe," she said. "There's a lot of people watching over the fund now."
Wake up Obama!
"We have plenty of rules, we just failed to enforce them."
Isn't that the truth... when you have a government that is above the law shit like that happens.
Congress has failed to provide any oversight (under both parties) for a very long time
That might be worth Obama re-reading and give a copy to Bernanke and Timmy:
"Once you violate public trust, it's very hard to recover," said Chris Blackwood, administrator of the Surplus Asset Fund Trust in Orlando, another pool for local governments.
Dow blasting down through 7900. Die, Klingon bastard!
I call Calvinball!
Nostrovia,
I'd rather know that they are $1 trillion in the hole - then have people guessing every day.
Why would a government estimation of level 3 values be any better than the estimate investors are already making on them? Especially since JPM grossly underestimated even in their worst-case.
This is only transparency for people who have their eyes closed. The only guessing that would stop is guessing what the best-case scenario is.
We dont take losses, we give 'em.
I'm no expert.. but I think that's an interesting question......
USA=CCCP | 02.10.09 - 2:33 pm | #
I am no expert either but if non-us banks are nationalized and they are counterparties in the MBS, CDS and CDO stuff and that sees the light of day... They all come down.
Limit to $12 Trillion? That will cap hyperinflation, yes? Bwahahahaha
In other news, Dow broke 79. Driving in circles for months around the 8000 interstate. Final Destination?
I recommend you send this chart to the Treasury dept. Remember, they asked for suggestions.
Also, how will the average person react when their bank shows up on the "It's Dead, Jim" list?
I do like your proposal, CR, but it is not without risks.
Nemo
.
I expect most people with cash have already moved their money, not many people are buying the "it's safe, 'cause it's FDIC insured" meme, as least around here. Just about everyone I've talked to is quietly stashing what they can.
BTW, it's "he's dead, Jim." Aka "deadjim," in re all busted things.
Misean, you're now an author on afterthecrash, post anything you like.
My take on the Geithner plan:
Are you ready to be Geithnerized?
Geithnerize, vb: To make somebody grossly overpay for something, and still end up not owning it.
The core problem for the banking sector is that the banks have lost far, far more money than they could have and remained solvent. ...
The fair solution is that the insolvent current banks have to be shut down, their owners wiped out, their managers fired, and new banks started with new owners, new managers, and new capital. Fair, efficient, and straightfoward - but it will ruin many of those responsible for the disaster, especially current bank management. Their solution? Make the taxpayer pay to keep them rich - via Geithnerization!
More at my blog
I feel like this is either the beginning of the end or the end of the beginning.
78xx--now that's something new
@Ponyless: Another interpretation is that the bond market is back in flight-to-quality, "return of principal" mode. Which would be a clue that the stock market is about to do another "October surprise".
"A catastrophic and long-term... uh, low level of activity..."
No D word from Bernanke, but that was one artful dodge.
Timmay pull the f**king lever! Now goddammit!!
Charles Kiting,
"Why would a government estimation of level 3 values be any better than the estimate investors are already making on them?"
Why do people use dangerous FDA approved drugs...
Oh, it doesn't make them safer and this won't make finances safer...but the rubes will think so.
Nostrovia,
" 78xx--now that's something new"
Cue Rally Monkey?
"I am no expert either but if non-us banks are nationalized and they are counterparties in the MBS, CDS and CDO stuff and that sees the light of day... They all come down."
That's what I'm thinking.. it would be a crafty way of handling what is a very difficult political problem here..... there are just too many hard-liners in this country.. what they don't get is that govt prop-ups are WORSE than receivership.. but it's hard to get that across
I've been hoping the UK could force our hand for awhile now
Klingon War Song
YouTube - Klingon War Song
Bernanke may not be so sure about making this info public.
Hoopajoops, LTD,
nova's link...I'm a thinkin'.
And thanks.
Nostrovia,
USA=CCCP | 02.10.09 - 2:34 pm | #
Who says bipartisanship is dead?!
I am sooooo happy!
My first bailout!!!
My favorite Reit is being TALFed!!!!
Oh, the humanity of shorts burning once they figure out they have been pawned!!!
I guess I can put my profits into glod for a while.
TALFed!
It will be a nice positive verb!
(Disclosure: long 400 shares AHR-PC)
TALFed!!!:
Expand Reach Including Commercial Real Estate: The Consumer & Business Lending Initiative will expand the initial reach of the Term Asset-Backed Securities Loan Facility to now include commercial mortgage-backed securities (CMBS). In addition, the Treasury will continue to consult with the Federal Reserve regarding possible further expansion of the TALF program to include other asset classes, such as non-Agency residential mortgage-backed securities (RMBS) and assets collateralized by corporate debt.
Someday this war's gonna end...
YouTube - 1973 kingston Joe Frazier vs George Foreman complete 2-2
Gun dealers experiencing shortages of bullets -- OrlandoSentinel.com
Demand for bullets is so strong that suppliers are restricting deliveries.
did the shit hit the fan already?
@"Ben came out and said in his testimony that the reason lending has halted is not the toxic assets, but instead concerns about the future of the economy."
... and concerns about the future scope of government intervention. No one wants to dance with the 800 lb gorilla, especially when the gorilla's in a panic-frenzy.
I wonder how many sorry 401k sods thought they saw a bottom already.
The populace has a long way to catch up before they figure out just how much they've been fleeced for, and how brazenly it was done...
I think the risk of a formulaic stress test is that once you set it up it invites banks to fudge the rules and terminology to 'cheat' their results.
That said, maybe Taleb and Mandelbrot could design the test.
BTW, it's "he's dead, Jim." Aka "deadjim," in re all busted things.
scone | 02.10.09 - 2:37 pm | #
Ahem, I believe the in the formal case it is"
"It's worse than that, he's dead, Jim."
from dfb in the last thread
H.R.1
American Recovery and Reinvestment Act of 2009 (Amendment in Senate)
SEC . 1281 . CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON CERTAIN BUILT -IN LOSSES FOLLOWING AN OWNERSHIP CHANGE .
...
(a) Findings- Congress finds as follows:
...
(3) The legal authority to prescribe Internal Revenue Service Notice 2008-83 is doubtful.
The statute 382(
rewrite Paulson did was illegal. It was what allowed Wells Fargo to pay $15.1bn for Wachovia, instead of letting Citigroup take them over.
Bair of the FDIC had endorsed Citigroup's takeover, and there was a contract in place. However when Paulson found out his personal friend Bob Steel (friends since the 70s working at Goldman Sachs, then more recently at the Treasury together, at which point Bob Steel parachuted into the CEO spot of Wachovia after a coup on Ken Thompson) was not going to get a big fat bonus check, he directed the IRS to illegally rewrite an IRS statute so that Wells Fargo could acquire tax losses, to claim back previous taxes from the IRS, to pay for the takeover. At which point Bair embarrassed herself by doing a 180° on the Citi deal, to fall over herself and do the Wells Fargo/Wachovia deal.
If anyone wants to go after Paulson, this is the case to do it with.
Now that the Celtic Tiger has bolted, horse prices mirror those of houses
Now that the Celtic Tiger has bolted, horse prices mirror those of houses - The Irish Times - Tue, Feb 03, 2009
Horse prices and house prices mirror each other pretty closely, said one horse expert. Weve seen downturns before, but weve never seen numbers like this. Within the thoroughbred industry it cant get any worse, pricewise. Sport horses are half of what they were a year ago. I was at sales in the autumn where they didnt even put foals in the ring.
Horses look good all the time, even as their owners fret around them. But on a freezing winter day, as the steam rises from their nostrils and their sweet smell is mixed with the chilly fog, you can see quite clearly why people love horses, and consider them a luxury worth paying for.
Demand for bullets is so strong that suppliers are restricting deliveries.
did the shit hit the fan already?
renter | 02.10.09 - 2:41 pm | #
Martial law?
"Nemo, at least we'd know. I'd rather know that they are $1 trillion in the hole - then have people guessing every day.
We'd just nationalize, I mean preprivatize, the bums ... and move on."
Now, that makes sense.
But really come on people...it's sad that the situation we're in is somehow news...
I honestly, truly saw this one coming when Bush took office...
... and concerns about the future scope of government intervention. No one wants to dance with the 800 lb gorilla, especially when the gorilla's in a panic-frenzy.
Yep, good point, Wisdom Speaker. As Dick Armey said, you are ALWAYS the junior partner when you clasp hands with the Feds.
Except for PIMCO, maybe, those jackasses.
One bright spot in the economy:
Gun dealers experiencing shortages of bullets -- OrlandoSentinel.com
We obviously have to stop this spending spree that's going on in Washington. ... As president of the United States, I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes.
o cues here. run for your lives , the baboons are coming
Note: the toxic assets are frequently described as difficult to value, but the real problem is forecasting future defaults.
Isn't that more of "and" rather than "but"? The default rate plus the interest rates give you the current value. The default problem you outline is the problem.
yep iceman. we are lucky the NRA will not have to ask the taxpayer for a bail out
The Shorter Geithner Plan: Look Ma, No Socialism!
from Paul Kedrosky's Infectious Greed Paul Kedrosky: The Shorter Geithner Plan: Look Ma, No Socialism!
The Geithner non-plan TARP 2 plan is now (mostly) out, and it is about as complex, dubious, over-engineered and sketchy as expected. The non-plan plan -- Tim G. calls it a framework, which is offensive to frameworks -- involves enough moving parts to be an economist full-employment act; it is a druidic mixture of regulatory capture, cute grad-school theorizing, and look-ma-no-socialism-here contortions to avoid temporarily nationalizing insolvent banks.
Bernanke's "market-determined pricing" comment probably not going over well with the bankers.
Um, full disclosure, now 1300 shares. Have a nice day!
Someday this war's gonna end...
Comrade Rally Monkey writes:
no cues here. run for your lives , the baboons are coming
bwahahahahaha. Thanks monkey:)
Hope your travels & preparations are going well!
Yeah!
Me Sommer Time!
energy,
"he's dead, Jim."
Bones, I need you to lay down next to these cooked carrots and potatoes.
Dammit Jim, I'm a Doctor not a meatloaf.
Nostrovia,
ME, Ping Ping Ping! Radio whatevet CET +2:00 Every Tuestday.
Mainstreet is going to pull their money from mutual funds, corporate and treasury bonds, pension fund exposures, all equities AND will stop contributing to the gimmick called 401Ks. That will take the playtoys away from the fund managers, hedgies, and other market players. Narrow the field. Let the speculative class prey on each other and cannibalize. They are destroying the capital markets for generations.
Lipservice to transparency and sunlight disinfectant irrespective, no changes are seen. In fact, a rampup in gameplaying is THE adverse feedback loop.
You couldn't design a better means of destroying an economy than the US government's plans to save it.
o cues here. run for your lives , the baboons are coming
Comrade Rally Monkey | 02.10.09 - 2:45 pm | #
Kinda scary f**kers, too - spent a few weeks work/study shoveling monkey poop at a primate research center many years ago - those canine teeth are freaking huge...
Maybe we'll get a last fools rally once more...
with everybody and their uncle ben loading up until DOW 20k...
and then the lights go out...
I feel nauseus.
EHP - interesting.
Go long forensic accounting, ivestigators, sharks!
Why do I get this feeling today's presentation was structured to stampede cash into tomorrow's 10-year issue?
C
What about austerity?
By Juan Enriquez and Jorge Dominguez
What about austerity? - The Boston Globe
The United States requires a massive restructuring to address its debt, cutting back on its borrowing, spending, and wars. The bailout package is essential to keep the credit markets open. But absent sentences that include the word austerity all the bailout will accomplish is a temporary postponement. Bailout and stimulus are a stopgap.
A solution requires the country to begin to spend what it earns, reduce its mountainous debt, and address massive liabilities, restructure Social Security, pension deficits, military, and Medicare. No wonder politicians would rather spend more of your money now rather than address these problems. Because we have been spending 5 to 7 percent more each year than we earn, a forced restructuring, triggered by a currency collapse, would have the same effect on wages and purchasing power that the housing collapse had on housing prices. So let's learn from our Latin and Asian friends and act before it is too late.
But anyway tap tap tap, tiip toip toip tap tap tap....if you are alive.
As long as they're not AGibbon.
Nostrovia,
Does anyone here really expect transparency? It is far more likely the transparency promise is another smokescreen to hide the depth of the hole.
I actually considered stopping contributions to my 401k..... but then I figured.. well I'm only 32.. and if it doesn't go up in value over the next 25 years my 401K will probably be the last thing I'm worried about.
I figure I'll either do ok at some point over the next 20-30 years.. or it just won't matter because I'll be driving the last of the V-8 interceptors
Their idea is to keep throwing non-committal shit out there until the market turns around and then they can say, "See, it worked".
Lets face it. They don't know what the fuck they are doing. Neither did the guys before. The whole system is far too complicated for micromanagement. They are facing private investors with Trillions and the ability to make decisions instantly and execute them electronically.
The Treasury, SEC and the Fed is so far outnumbered, out-gunned and so incredibly out-intellected that they don't have a chance. It's like watching little kids at the pool use squirt guns while the bigs kids at the pool are dousing them with giant water balloons and hoses.
Except at this point, our government is not even funny anymore. They are pathetic.
Nostrovia aka HAISTA KUULE RYSSÄ. Juttua.
Re: I feel nauseus.
You always feel that way, get over it.
At some point we are going to have a good old-fashioned bank run.
Seriously, can anyone say with a straight face that after a Bank Failure Friday at, say, BofA, withdrawals would be honored on Monday? Or even the Monday after that?
Happy to be shown by the rest of the posters here that I am talking through my hat, but I have seen what fear does to people and how willing they are to eat early withdrawal penalties on CDs and so forth when they hear plausible rumors of a run (i.e. late 80's California S&L).
Flame away if I'm wrong.
Seriously Misean..you should do stand up...
Someone asked about the long bond? Here's your answer:
Today's Auction Results
Ciao
MS
Good googley moogely, this the worst day since November! What a number of Timmay did to us, today.
/cowering in fear
Hey Comrade Rally Monkey,
Is GS protected from high? As in, I'm wasting my time buying puts on God?
About yeah....
Comrade Misean is Dope | 02.10.09 - 2:47 pm | #
All time fave:
"Dammit Jim, I'm a doctor not an escalator."
(OK not sure about the dammit but Bones wanted to say it, the crusty old fart)
Name that episode without Google!
@USA=CCCP: "I figure I'll either do ok at some point over the next 20-30 years.. or it just won't matter because I'll be driving the last of the V-8 interceptors"
Look at Japan: if you started buying in 1985 and kept on buying for 23 years, you'd still be way in the hole...
^N225: Basic Chart for NIKKEI 225 - Yahoo! Finance
Our elected representatives are on the same general course, except it is likely to be worse here.
U.S. banks renewed efforts on Tuesday to get policymakers to change a controversial accounting rule after the U.S. government rolled out a trillion dollar plan to rescue the financial system.
The fair value accounting rule, requiring assets to be valued at market prices, has been blamed for exacerbating the economic crisis by forcing banks to record billions of dollars in writedowns.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Do yourself a favor and short the hell out of this little banana republic. Whaaaaa Whaaaaaaaaa Whaaaaaaaaa
c
jep. karelian about gonna kill you both
Lets face it. They don't know what the fuck they are doing. Neither did the guys before. The whole system is far too complicated for micromanagement. They are facing private investors with Trillions and the ability to make decisions instantly and execute them electronically.
km4 | 02.10.09 - 2:51 pm | #
Another way to think about it:
This economy was created mostly from the "bottom up" by individual people and businesses managing and thinking for themselves.
It maybe be extremely difficult or outright impossible for the government to come a long and suddenly inject "top down" management into the system during an emergency in order to save it.
It's like some guy with a bull horn yelling at people and telling them how to drive when the roads are covered with ice, or something like that.
The system just wasn't built to work that way.
Ahem, I believe the in the formal case it is"
citizen energyecon
.
'the in the' huh?
Conjure repeats his earlier warnings.
"Seize the banks. Do it now."
"Now dammit, now."
Several problems.
CR: The powers that be are not interested in transparency, if they were we would see a very different response both from the FED and Obama Adminstration.
"Why do I get this feeling today's presentation was structured to stampede cash into tomorrow's 10-year issue?"
Because it was......
Look at the size of the indirect bidder on today's 3 year note.....
That's Benny Boy buying what no one else wants...
follow the link in my previous post.
Ciao
MS
But if you kill me as finnish wizards ainos
@km4: +10!
The Treasury, SEC and the Fed is so far outnumbered, out-gunned and so incredibly out-intellected that they don't have a chance. It's like watching little kids at the pool use squirt guns while the bigs kids at the pool are dousing them with giant water balloons and hoses.
Yah, and it's like watching redcoats with muskets marching in disciplined formation through the woods while patriots with rifles, concealed by the trees, nail them from every side with sniper fire... cue the film version of Last of the Mohicans...
Lessee, what's do the top ten craters from bloomie look like.... Oh my! Not craters - if they were on the moon they'd qualify for mare status.
PRINCIPAL FINL\t11.87\t-5.16\t-30.30\t18,275,917\t14:27
HUNTINGTON BANC\t1.82\t-0.79\t-30.27\t26,974,923\t14:27
REGIONS FINANCIA\t3.34\t-1.30\t-28.02\t32,273,094\t14:27
KEYCORP\t6.74\t-2.29\t-25.36\t15,808,506\t14:28
SUNTRUST BANKS\t9.39\t-3.05\t-24.52\t25,806,252\t14:27
MARSHALL &ILSLEY\t4.15\t-1.27\t-23.43\t9,502,626\t14:27
FIFTH THIRD BANC\t2.25\t-0.64\t-22.14\t37,736,402\t14:27
ZIONS BANCORP\t12.05\t-2.79\t-18.80\t6,819,102\t14:27
AMERICAN CAPITAL\t2.71\t-0.62\t-18.62\t4,136,292\t14:27
BANK OF AMERICA\t5.64\t-1.25\t-18.14\t467,540,45
energy,
Can't...my brain is stuck on him healing the rock thing with instant cement...
Nostrovia,
2T in fed balance sheet is a source of income for the govt! Take that!
This is great, Timmy builds up a big show, delays the press conference by a day, builds up expectations and then offers nothing but shit. This is a great way to build confidence and then not provide transparency, to not address insolvency and the debt crisis -- but to give a a re-heated Paulson Pie without even a new package. The next time he speaks, or Obama, or bernanke, the market will go down 4% every time -- this is great, thanks Timmy, thanks Obama, thanks for having the balls to do nothing and thanks for helping take an initial step towards restoring confidence .... you spineless pricks!
2. The JPM analysis looks like the losses are nearly linear with additional home price declines. I doubt that is the case. There will be more homes foreclosed, and a bank's share of losses will get larger, because the downpayments and PMI will be smaller shares of the losses.
Good catch. Also, both default rate and recovery rate worsen with home price declines; so, even apart from that, losses should be faster than linear.
I am simply amazed that folks are not buying all of the TALFed assets to resell to our friends the Fed- after all they are going to be buying them for far more than they have been trading at- in other words- FREE MONEY!!!
Simply amazing.
Now, on to our regularly scheduled doomathon.
Someday this war's gonna end...
"Dammit Jim, I'm a doctor not a bricklayer!"
Devil in the Dark
previous quote - Friday's Child
Sadly, no Google needed, the nerd brain cells are evidently the survivor type...
Transparency and Disclosure ?
Transparency and Disclosure in America ?
In the land of the AAA-rated liars ?
Hilarious !
"This is great, Timmy builds up a big show, delays the press conference by a day, builds up expectations and then offers nothing but shit. This is a great way to build confidence and then not provide transparency, to not address insolvency and the debt crisis -- but to give a a re-heated Paulson Pie without even a new package. The next time he speaks, or Obama, or bernanke, the market will go down 4% every time -- this is great, thanks Timmy, thanks Obama, thanks for having the balls to do nothing and thanks for helping take an initial step towards restoring confidence .... you spineless pricks!"
Actually in a way.. maybe it is good.. .if Citi can go a bit lower the govt might have it's hand forced in a GOOD directio
Re: ""Seize the banks. Do it now.""
Damn it mp, get over to nakedcapitalism and RGE and Huffington and look for higher volume traffic; I ♥ CR, but the traffic flow is too low, however, the people that come here are really great and interactive, but you need more eyeballs and more traffic!!
Keep up the good work and I agree with you!
Turbo testifying deep loss of faith, deep skepticism, deep doo doo
Both gold and silver are soaring today and breaking through technical trading barriers decisively.
They are finally doing what they are supposed to do as "hard money" in times of global financial stress.
I don't see much holding them back from another 10-20% upside from here.
The miners are down today, but not down nearly as much as the market. The miners should bounce back.
GDX = broad basket of miners.
SLW = pure leveraged silver play.
SLW has underperformed the market lately, partly as a result of a bought equity-raising. It will be volatile short-term but should do very well long-term.
"Suppliers to law-enforcement agencies are doing better than retail shops."
well, at least that. next thing will be people stocking on knives.
Can't...my brain is stuck on him healing the rock thing with instant cement...
Nostrovia,
Comrade Misean is Dope
"I'm a doctor, not a bricklayer!" No google, I win--geek of the day!!!
Re: In the land of the AAA-rated liars ?
I feel a song coming, thanks for the lyrics, but they belong to me now ...... Mooohawhahahaha © & ®
Please mr. market crash buy our bonds.
How much equity was wiped away today vs how much bailout was announced?
Turbo testifies: setting up new gov web site for transparency to compete with CR. Boring...
The Treasury, SEC and the Fed is so far outnumbered, out-gunned and so incredibly out-intellected that they don't have a chance. It's like watching little kids at the pool use squirt guns while the bigs kids at the pool are dousing them with giant water balloons and hoses.
Wisdom Speaker | Homepage | 02.10.09 - 2:57 pm | #
This also illustrates what may be the fundamental problem with central management:
In order to get it to work you have to restrain peoples' intellect and free will. You basically have to have a conformist dumbed-down populace so they don't outmaneuver and out-think you.
I think this helps explain why the socialist experiments have generally lead to these ponderous lethargic sort of economies - you need sort of a declining complexity gradient from the central authority. The only way to accomplish that is by "forcibly" simplifying the behavior and ideas of the managed.
I think this also explains why more "liberalized" free market type economies seem to be more innovative and prosperous, but also why they're more prone to unexpected and dramatic boom/bust cycles.
You don't get nothing for free.
Turbo testifying Sheila Bair talking with all female banking gods and they are pissed...
I was speaking to a Transformational Guiddess last weekend (No shit, I have her business card) and she told me all these problems with the economy were caused by people allowing negative energy into their lives.So don't worry,be happy!
and frazier's at 78xx at market opening
ding ding ding
mp,
Why bother? With the TALF, TARP and BARF, we have essentially siezed them anyway.
What simply amazes me is that folks still haven't figured out that we are printing our way out of this, and what that means in terms of the dollar. They still think in terms of a hard dollar (Strong dollar mumbo jumbo notwithstanding!) when the reality is that this crisis is making our fiat financial system quite obvious to the rest of the world!
Wall street is just not waking up to the potential of oceans of capital coming straight outta the Treasury and buying up manure!
Who cares if an auction fails- because it will never actually fail!!
Someday this war's gonna end...
Transparency? Oh yeah--sounds all good and well, but does Wall St. actually believe in it--ever? Not these guys.
O yesterday: "Tomorrow is Timmy's day in the sun"
Paulson forgot to tell Timmy to never ever come out of his cave.
Interesting that VIX isn't spiking more here. Still in the 40's, while it was in the 80's during our November crisis.
No Nationalization. A National Banking System, meaning Federal, really Federal, not Federal as in Federal Reserve, but not via nationalization of the losses of failed private institutions. Let the priavte institutions fail, and allow the transference of any "good" assets to the newly formed National Federal Banking System. The shareholders eat the losses. If they're unhappy about them, give the shareholders carte blanche to do with the banking execs what they will.
As it stands now, the exact opposite is being proposed, or floated.
Geithner (now): We have seen a deep loss in the confidence of the American people. If we work together we can change that.
(We can snow them one more time)
CR: Your suggestion is essentially the first half of one John Hempton has been promoting: http://brontecapital.blogspot.com/2009/01/slogan-for-new-administration.html. (You later suggest the second half in the comment above.)
MP is right about where we're inevitably (inevitably, Mr. Geithner) heading. Unfortunately, MP's plea for speed will go unanswered.
Hempton recommends reading up on the Norwegian nationalization as a template.
z.
"Why do I get this feeling today's presentation was structured to stampede cash into tomorrow's 10-year issue?"
Because it was......
Look at the size of the indirect bidder on today's 3 year note.....
That's Benny Boy buying what no one else wants...
follow the link in my previous post.
I don't think that's the right conclusion. The issue (3 year) was oversubscribed by the primary dealers alone...
"U.S. banks renewed efforts on Tuesday to get policymakers to change a controversial accounting rule after the U.S. government rolled out a trillion dollar plan to rescue the financial system.
The fair value accounting rule, requiring assets to be valued at market prices, has been blamed for exacerbating the economic crisis by forcing banks to record billions of dollars in writedowns."
Hummmmmmmmmm
On September 17, a commentator on CNBC asked, Did you keep the interest rates too low for too long in 2002-2003? Greenspan immediately responded, The market did. Rates were not too low or the period too long, either, because the market, not the Fed, made the decision on the level and the time, and the market is never wrong; it is what it is.
He was right on that one.
In the land of AAA liars
Everybody looking for some buyers
Truth needs a pair of pliers
All this shit just transpires
People want cease fires
What about all the high flyers
Something about friggn bonfires
J&J Ejaculation Pill, Worlds First, Wins European Approvals
J&J Ejaculation Pill, World’s First, Wins Approvals (Update2) - Bloomberg.com
great! the mkt was looking for reasons to rebound.
"Seize the banks. Do it now."
"Now dammit, now."
mp "
Is there no way Conjure can take control of the Treasury? His country needs him now.
fair value accounting rule
Bernanke alluded to this also. Could be the fly in the deal breaker.
Oh yeah we all almost forgot about the off-balance sheet bank shenanigans. Remember they got the Feds to put off an accounting rule for a year?
@ac: Yes yes yes!
The same thinking also applies to large top-down-managed corporations. We've just seen that when the central management botches the incentives and the workers figure out how to work around the risk management structure, then the banks blow up and the central management has no clue what went wrong...
Unfortunately, this trend of centralization doesn't appear to have hit its zenith in the U.S. yet...
Did Ben lose the lottery? Are bond holders manning the circle?
YouTube - The Lottery (part 2 of 2)
Turbo talking trash "we did not move soon enough" forget that what are you going to do now?
re : I ♥ Timmy! | Homepage | 02.10.09 - 3:10 pm |
Beautiful poem, I ♥ it !
anon-
If it were oversubscribed why the need for an indirect bid then?
My guess is that we see similar results tomorrow.
Ciao
MS
This is BAD. This is the day it will all start to unravel on them. Load your guns. Get your kids indoors. Send the bad kid to grandma's house. Close the blinds. Hide the beer. Get out the bong...
Reported from HuffoPost:
Timmy and the Obamanites presented this song and dance previous to today and were laughed off the stage by their audience. Who was attendant you ask? Congress critters of both parties. Amazing, they get it, Mr. Market gets it, J6P gets it.
"What simply amazes me is that folks still haven't figured out that we are printing our way out of this"
The recent past has affirmed that many market participants are clueless. The reality is that devaluation is the only way out.
Market Update
Burden on Americans -18%
GoldmanSucks -7
Just Print Money -8
Money Sucker -10
Shittygroup -15
Worthless Frigging Company -12
Now is a great time to contact your elected representative and let them know they will be looking for a job next election cycle.
They laughed when Geithner said he wouldn't need money from Congress.
Totally OT, but a bit of weird balance?
The Production Index also increased by 5.8 percentage points from December's reading. Again the index reading pointed to further overall contraction, but at a significantly slowed pace. And three industries now reported production growth: Textile Mills; Petroleum & Coal Products; and Food, Beverage & Tobacco Products.
As you might expect, those manufacturing segments that are now seeing new orders, and increases in production are the first to indicate growth in their payrolls in January. The top segment for employment growth was indeed the Petroleum & Coal Products segment.
Additionally, in a healthy change from the reported Q4 buildup in inventories, manufacturers' inventories contracted in January, with the only industry to report higher inventories being the Computer & Electronic Products industry. All others reported declines in inventories.
Backlog decline is also slowing. The ISM's Backlog of Orders Index was 6.5% higher in January, with 53 percent of survey respondents reporting improving or no change in their backlogs from December.
This is no doubt the healthiest manufacturing report that Ive seen since this recessionary cycle began. These indexes provide a handful of leading manufacturing indicators, most of them now pointing to a marked decrease in the rate of contraction in the manufacturing industry.
http://mast-economy.blogspot.com/
CR,
In October I was ranting about prosecuting the yahoos under Sarbanes-Oxley and possibly fraud statutes. I suggested Sarbanes-Oxley because it seems to have a lower threshold. In simple terms, Sarbox requires corporate officers to certify that the information in a financial statement fairly presents the financial condition of the company AND that the financial reporting processes have been assessed and audited to ensure that the reporting process will fairly present the financial condition of the company. The prosecutor does not have to prove criminal intent to perpetrate a fraud.
There is no way that the financial statements fairly presented the risks of their business strategies.
You suggested tabling pursuit of prosecutions until the crisis was past. Is it now time to begin demanding prosecutions?
In regard to your post, the stress tests should have already been performed and reported. At a minimum, the financial statements should already present sufficient information to support stress testing by outside parties.
Remember 6 months ago when we declared there is no slack in the system?
There is no slack in the system. In fact the system has shrunk.
I don't think hurricane season this year will be regarded as localized stimulative economic events.
I don't think many insurance companies will survive.
Or banks.
Possibly the elected leaders.
--bh
Here
it is:
Trillions in QSPE's
just a thought to chew on:
perhaps the vagueness of TP (hat tip jesse) was purposeful?
remember there are 2 treasury auctions tmw & thurs.
can't have a surging stock market when you need to raise capital and capital's tight, yes?
welcome to the new face of the PPT.
More smoke and mirrors to prevent total collapse of confidence in government.
Stress test? Been there, done that, didn't work. Modeling is not the problem. Structure is.
Banks told to predict effects of a 40% crash in house prices
The Times
November 16, 2006
Banks told to predict effects of a 40% crash in house prices - Times Online
"BANKS in the UK have been ordered by financial regulators to assess how they would cope in the event of house prices crashing by 40 per cent.
The instruction to include a housing slump scenario in their stress-testing models comes after the Financial Services Authority found that some banks were failing to include gloomy enough assumptions in their modelling.
The FSA said yesterday that an “appropriate” benchmark was to assume property prices fell by 40 per cent and that 35 per cent of mortgages in default ended with homes being re-possessed. . . . "
The Turbo Depression is contained..
"They laughed when Geithner said he wouldn't need money from Congress."
meaning congressional approval.....so in essence he is right. Structuring this POS as non-recourse ensures that there need be no 'authoritay' to.
Ciao
MS
""What simply amazes me is that folks still haven't figured out that we are printing our way out of this"
The recent past has affirmed that many market participants are clueless. The reality is that devaluation is the only way out."
Doesn't work when everyone devalues at the same time. Globalization is a bitch in reverse.
Instead you end up with protectionism and a depression.
Why thank you Werner, that was actually the end of my performance today, as I ♥ Timmy! However, it may be a fine new name for me in the future (here) which can be added to my long list of changes...
With the kind of numbers being bandied about we are soon going to see the Einstein ring around the black hole of the financial abyss. Divide by zero error - anything you throw at the hole just accelerates the process.
@ac: Yes yes yes!
The same thinking also applies to large top-down-managed corporations. We've just seen that when the central management botches the incentives and the workers figure out how to work around the risk management structure, then the banks blow up and the central management has no clue what went wrong...
Unfortunately, this trend of centralization doesn't appear to have hit its zenith in the U.S. yet...
\t Wisdom Speaker
Wisdom Speaker | Homepage | 02.10.09 - 3:13 pm | #
I've actually worked for small companies that got bought up by very large companies and seen how the newly acquired businesses had to be made much more rigid and conformist to be integrated into the system. I remember actually receiving literature talking about having "one mind" and "one culture", as well as watching the management overhead double for the same number of projects.
I actually understand this process and why it's necessary. I think it's fine for a corporation.
When it's done on a national scale, however, I think it becomes something completely different and much harder to justify - you can walk away from a company, and companies that do badly or mistreat people fail due to competition.
These forces don't exist on a national scale. There's no escape from tyranny and pettiness once it defines a nation.
"meaning congressional approval.....so in essence he is right. Structuring this POS as non-recourse ensures that there need be no 'authoritay' to."
yup.
note the expansion of the TALF to $1T.
timmy, benny & larry are trying to do an end around congress.
Oh, and conjure's clock stopped working because it melted as we passed the event horizon, there is no escape...
Anyone find it funny that once the central banks did an end run around LIBOR by guaranteeing transactions and juicing it further with swap lines, that because LIBOR is now low banks are deleting lines of credit?
I bet you would find it funny if you could watch Jeff Goldbloom in Jurassic Park say "Life will find a way"
although this was a tad more predictable than dinosaurs taking over an island
Now is a great time to contact your elected representative and let them know they will be looking for a job next election cycle.
Now is a great time to buy or sell your representative.
Is this plan Son of Paulson? BAWAAWAHA
One last thing: THE FASB need to be destroyed ASAP along with SEC and FOMC and various inept agencies like DOJ, Treasury, DOL, etc ...
Re: July 30 (Reuters) - The Financial Accounting Standards Board, which sets U.S. accounting rules, voted on Wednesday to delay accounting changes that would affect trillions of dollars in off-balance sheet assets at banks and financial companies.
Reversing an earlier decision to make some parts of the rule change effective at the end of this year, FASB members voted that the rule should take effect all at once, for reporting periods after Nov. 15, 2009.
Booo!
Hello. So what did I miss?
.
we have a plan
you approved money for stimulus
and you approve more money later
.
And in other news, the election festivities have begun in Iran:
video: Iranian mob attacks moderate ex-president Mohammed Khatami on anniversary - timesonline
ow it's becoming a bit clearer why the FED was set up as public/private entity in the 1st place.
by the time congress has to get around to bail out the FED, the damage will already have been done...
EvilHenryPaulson | 02.10.09 - 3:21 pm | #
It starts with oooh and ooo then comes the running and screaming...
Brian Williams asks Geithner about his plan. "WHAT IS IT?" Geithner sings, dances, doesn't answer.
CATCH!
the analogies get even better: tidal forces distort everything into a string which is desperately pushed on in a vain attempt to escape
""meaning congressional approval.....so in essence he is right. Structuring this POS as non-recourse ensures that there need be no 'authoritay' to."
yup.
note the expansion of the TALF to $1T.
timmy, benny & larry are trying to do an end around congress."
A non-recourse loan is not a loan. It is my understanding that it is illegal for the FED to offer non-recourse loans. Fat chance though of anything happening.
The same thing was done with the BSC fiasco.
It will be non-recourse with the FDIC picking up the losses. FED will not lose a dime.
mp writes:
Conjure repeats his earlier warnings.
"Seize the banks. Do it now."
"Now dammit, now."
mp | 02.10.09 - 2:56 pm | #
Americans always try to do the right thing after they've tried everything else.
Winston Churchill
Market has spoken... now we get to see how low she can go!
Hello. So what did I miss?
\t Have a Great Depression!
Have a Great Depression! | 02.10.09 - 3:21 pm | #
Even though I haven't read many of your posts, you get a high rating in CR companion simply on the merits of your name.
citizen energyecon
I guess in the analogy the bond vigilantes are the velociraptors. What are they doing?!!! They're communicating with each other, oh no, we're done for...
2 things I will never comprehend:
Why people believed private banks could afford to pay a dividend over the long term
Why people didn't expect banks to cash in on free FDIC money. (Take deposits, pay yourself a bonus for years, go BK)
I saw my shotgun for this atomic happening....and I got my spin ALL right!
ote: 400pts down is not punishment.
4000pts is capitulation.
not there yet.
--bh
Hey dude! Where's my economy?
As long Timmy keeps saying they will sell "highly rated" securities, trust will never come back since AAA are totally worthless.
clarification:
Capitulation, as in your brain capitulates to the hot fast moving piece of lead traveling through it. Capitulation.
--bh
Get-in-there's plan is (1) give shareholders a small running start (2) Nationalize their asses.
This is deeper than hudso
The sensitivity analysis is long overdue. The followup question to ask is whether it covers all assets on the books. Another biggie are the assumptions used to determine derivative impacts. The so called worse case has to include negative feedback across the economy and other assets. Roubini's latest estimate may still be low.
Great suggestion, CR. No one can firmly determine what these assets bags are worth today (with them being marketed) or tomorrow (when the value may be lower - or even possibly higher.
But alternate scenarios are just made for this uncertainty, as long as the starting assumptions are clearly stated.
oh, I guess I should note the REAL market opens in five minutes.
--bh
Oh gheeze, one last thing that i just found, and have no clue why I kept it ... here, someone take this:
But the falling of firewalls has elevated the importance of sections 23A and 23B of the Federal Reserve Act. These provisions both limit the amount of credit flow from banks to their affiliates and require that such transactions be collateralized and made at market prices. GLB extended these provisions to the fund flows between banks and their own financial subsidiaries and even in some respects between holding companies and the financial subsidiaries of banks
$38 Trillion in private debt says all these "plans" fail. Those who can borrow and spend won't, those who can't will just wait for the eviction notice.
Haven't these guys heard of the "pushing on a string" notion.
"FED will not lose a dime."
well remember the Treasury is beholden to the profits & losses of the FED.
the banks simply get their 6% every year, no matter if it makes or loses $.
the FED is the ultimate Ponzi.
Where the hell is my "stimulus-bill-passing-rally"?
I am beginning to become disillusioned.
Dow posting new post November lows. Next stop can only be a retest now.
I realize that Canada is financially insignificant, but this is just too precious to keep to myself
21 Models
The Bank of Canada uses 21 models to study the economy, and four of them are among the most sophisticated in the country, Carney said when asked if he was locked into using such tools.
21 models guys! We're practically Baskin Robbins with 32 flavors. Best models of any central bank in the country, I promise
PERKELE! GERMAN NAZI PARTY SNOW PARTY GONNA PAY FOR THIS DEEP SHIT
Who is going to overtly devalue first?
it's never to late to plan your escape.
Where the hell is the PPT?
But fuck them, I kind love this free fall.
The most important model is the Zimbabwean Model.
Bet they don't have that flavor!
Counterpointer - Principal Financial write downs on CMBS is insane. They will be BK if they have another quarterly report like today.
I wish I had followed this advice when I read it in early 08: Blogger: Page not found
The same person who talks about "money rains" certainly can't be an advocate of "fiscal discipline". The two concepts are absolute polar opposites.
ac | 02.10.09 - 2:30 pm | #
Maybe 'fiscal discipline' doesn't mean what you think it means. Princess Banker anyone?
Transparency means you can see right through it.
best get a Buffett rumor on the wires, stat.
Calculated Risk for BARF czar
Where the hell is the PPT?
Timmay and Ben Both at hearings simultaneously, what do you think?
The recent past has affirmed that many market participants are clueless. The reality is that devaluation is the only way out.
Allen C | 02.10.09 - 3:16 pm | #
Exactly; any other way and "this sucker is goin' down";-)
dryfly is a SHOOOOF OOFFF
"well remember the Treasury is beholden to the profits & losses of the FED.
the banks simply get their 6% every year, no matter if it makes or loses $."
I believe that Paulson gave the FED explicit cover to any losses they took on the BSC assets via the Treasury.
Can't help but think Bernanke, Paulson, Geithner, Obama, all of them know this is a sinking ship with no way to stop it. These "plans" are merely to prevent full-scale panic and global chaos, as we ease into the pain gradually.
EvilHenryPaulson writes:
I realize that Canada is financially insignificant,
Don't sell Canada so short.
They are also militarily, economically, artistically, culturally, spiritually and geographically insignificant.
They got hockey, beer and Tim Hortons, though. Let's call it even.
I do not believe that the new "plan" will succeed but I am refreshed listening to Geithner in the way he at least addresses the problems. The next administration may even get closer to the truth.
CR's suggestion is exactly on target. Rather than posit a once and for all solution, focus on the steps that push us in that direction.
The ground needs to be shifted, first, to enable pre-privatization. And that is a process well underway.
The NYT story on today market tank says the Geithner "plan" raises more questions than it answers. Question lead to more information about the condition of the banks, the use of TARP I, etc....
And here is what Andrew Sullivan, a free market and proudly Thatcherite conservative, writes today about his support for Swedish style nationalization:
10 Feb 2009 11:59 am
A Very Provisional Reaction
I'm not an economist, just someone trying to understand this mess. I found Geithner's remarks unreassuring. If the goal was bold early action to grasp the nettle of the banks' insolvency, and to find a way to expose and control it, then this struck me as more muddling through, with better oversight. The more I read and talk to people who seem to know, the more it appears that we need to do what the Swedes did: take over and restructure the banks. What I find most depressing, however, was the transparent attempt by Geithner, or those around him, to spin his victories over his opponents as the real story. The NYT's piece today, and Brooks' stenography, do not suggest to me the proper focus on what we need to do, as opposed to bragging about and spinning internal internecine debates.
The Dish is fast gathering more reactions from those with more expertise on the web. Stay tuned.
A Very Provisional Reaction -
The Daily Dish | By Andrew Sullivan
rather than thinking only about the solution, as if everything can always be accomplished in a one fell swoop action from the Olympian heights of Conjure's global point of view, try also to take the human political animal point of view, and construe events as being embedded within processes. The end of the processes might not be known, but successive steps lead to actions and reactions and consequences, unintended and intended.
Looked at that way, these are steps toward nationalization, something that was utterly unthinkable in the U.S. until just the other day.
These "plans" are merely to prevent full-scale panic and global chaos, as we ease into the pain gradually.
Speed | 02.10.09 - 3:33 pm | #
Maybe but my left eye is kinda frozen...but we got still many many kilometers, right?
Calculated Risk for BARF czar
Bits_of_Real_Panther | 02.10.09 - 3:32 pm | #
I was the BARF czar one night in college. Drank a metric fuckload of tequila and wore a Burger King paper crown after munchies hit at oh dark thirty. I painted their bathroom walls, ceiling and floor.
Good times !
Parker and Stone.
Don't get too comfortable, Canadians are everywhere. There might be one in the room with you right now and you would never know until it was too late. If you want to hijack this thread, well then you can take off hosehead
wc - I suspect that's if they have another quarterly report. Period.
C
Nationalization is happenning via the markets whether Timmy likes it or not.
Although I wouldn't mind a bit more speed...
BTW: Remember last week when I said it was a good time to by FAZ but didn't have the balls? Well I was right. It's up 30%.
Man.... I suck at this.
Oh, and conjure's clock stopped working because it melted as we passed the event horizon, there is no escape...
FaradayShieldedHeadgearBrigade | 02.10.09 - 3:21 pm | #
It didn't need to melt; time essentially stops at the event horizon.
Dollar, Yen Rise as Geithners Plan Spurs Demand for Haven
Dollar, Yen Gain as Lack of Bailout Details Spurs Haven Demand - Bloomberg.com
.
They like us! They really, really like us!
OT: (but very funny)
LA-Sen: Porn star Stormy Daniels is considering challenging David Vitter.
She said she's planning a "listening tour" around Louisiana to talk about a range of matters, including the economy -- which along with women in business and protection of children are the three issues listed on her Web site. When told Vitter can be a tough opponent, she said she's "always up for a good fight."
"I think anyone that knows me ... is more than aware of that," Daniels said. "Politics can't be any dirtier of a job than the one I am already in."
Take a break, and read some Depression Porn. Follow the url and read about the Bike Man.
"FED will not lose a dime."
Exactly....the loss flows back to Treasury......and us.
Ciao
MS
OK, now we need 1700 for a circuit breaker.
I'll be so happy today if SRS finishes up $10 a share.
Go Timmy! Go SRS!
Counterpointer
Don't bankruptcy trustees have to issue reports, that are often much more informative than SEC filings? Point noted anyhow
""FED will not lose a dime."
Exactly....the loss flows back to Treasury......and us."
Everytime I hear the word "FED" I think "private bank". Every move they follow makes sense when you keep that in mind.
EHP
Canadians are a sneaky lot, eh?
Cheers
P'ed Off, the Treasury has ALWAYS beared the burden of losses of the FED.
it's in the FedReserveAct of 1913.
the FED's balance sheet is just a giant parking lot.
hear the story of the people leaving their overlevered cars in the airport parking lot in Dubai with the keys in the ignition and ditchin the country?
excellent metaphor methinks...
Good interview.
Recession? No, It's a D-process, and It Will Be Long - Barrons.com
California budget deficit imperils 10,000 state workers' jobs
12:18 PM PST, February 10, 2009
California budget deficit imperils 10,000 state workers' jobs - Los Angeles Times
@Anonymous with the market updates, don't forget:
Fifth Turd Bankrupt: -23.53% today
Is get in there's plan like tapping your chin and long pausing over a chessboard?
Boxed in, or just don't want the nucular option?
yawn.... anyone?
tristero-
yes excellent metaphor.....read that last week.
Ciao
MS
Congressman[?] to Benanke
What are the consequences if your decisions are wrong?
Bunning: "Do you think our largest banks are insolvent?".
yawn.... anyone?
BottomCallTabulatorMatrix | 02.10.09 - 3:40 pm | #
Yup. Nothingburger...
Geithner: "It would be irresponsible for me to comment.."
Bunning: "Haven't you already done that by spending money on them."
rich writes:
I'll be so happy today if SRS finishes up $10 a share.
Go Timmy! Go SRS!
rich | 02.10.09 - 3:38 pm | #
Not as happy as I will be:)
It would be irresponsible for taxpayers not to comment...
Confidence in gold is rising today
@ xxxxx
special relativity keeps time constant for the black hole food (us)up to the moment of intersection with the event horizon... outside observers see time stop at the edge
inside the singularity everything ceases to correspond to the universe... there is no up, there is no time, there is no distance
They're trying so hard to keep the Dow from closing 400 pts down, it's almost too cute.
Matt Yglesias
Matthew Yglesias » Nationalization After All
Nationalization After All
If Im reading this correctly, Timothy Geithners financial rescue plan actually might lead to bank nationalizations after all. The key thing is provision 1b of fact sheet:
Capital Assistance Program: While banks will be encouraged to access private markets to raise any additional capital needed to establish this buffer, a financial institution that has undergone a comprehensive stress test will have access to a Treasury provided capital buffer to help absorb losses and serve as a bridge to receiving increased private capital. While most banks have strong capital positions, the Financial Stability Trust will provide a capital buffer that will: Operate as a form of contingent equity to ensure firms the capital strength to preserve or increase lending in a worse than expected economic downturn. Firms will receive a preferred security investment from Treasury in convertible securities that they can convert into common equity if needed to preserve lending in a worse-than-expected economic environment. This convertible preferred security will carry a dividend to be specified later and a conversion price set at a modest discount from the prevailing level of the institutions stock price as of February 9, 2009. Banking institutions with consolidated assets below $100 billion will also be eligible to obtain capital from the CAP after a supervisory review.
Theres clearly a desire here to avoid nationalization. A strong desire. But if the situation in the banking sector is as bad as the skeptics tend to think, this plan is going to end up with the government owning a substantial share in at least some large banks.
Insolvent = New Transparency Term
"In a system so fragile" Geithner
How many days ago was it the system was "strong" by the PTB?
Tim is a light weight. He should save everyone time and resign now. There is no plan cause no one agrees and the banks for sure do want to sell at market and no one wants to over pay. It is time for hard leadership. Nationalize the banks, Declare a bank holiday and fix this mess before we all go down with it.
GH and rich, should I cash in on some SRS calls today or tomorrow? Are we going to see more capitulation to come?
Highly processed forms of many heavy metals are up... Au, Ag, Pb
Average American stockholders are starting to abandon the game. This will continue, unabated, for awhile.
The floor is the new ceiling.
Vehicle inventories rose 1.7 percent, after increasing 1.5 percent the prior month, while auto sales fell 8.1 percent, todays report showed. That pushed the industrys inventory-to-sales ratio up to a record 2.31 months.
so that means they still don't have a handle on the business and are still overproducing. wagner has another sit down with congress about viability next week.
a 10mm saar and 2.3months supply on the lots means there' 2 million cars(new) for sale in america, collecing dust and getting a year older.
Geithner: "It would be irresponsible for me to comment..
... because doing so might jeopardize my post-Treasury private sector career goals."
"And the hundreds of millions I expect to earn in the future."
"Oh, and I won't pay all of my taxes then, either."
Geithner has that Dr. Evil "talk to the hand" thing working.
special relativity keeps time constant for the black hole food (us)up to the moment of intersection with the event horizon... outside observers see time stop at the edge
inside the singularity everything ceases to correspond to the universe... there is no up, there is no time, there is no distance
FaradayShieldedHeadgearBrigade | 02.10.09 - 3:45 pm | #
That's correct to the extent that I understand it.
There is not enough available dollars to nationalize all the big banks.
If they want any chance, they'll have to let at least 1 or 2 go bankrupt, while giving their full strength to the other remaining banks
The word you are looking for is not sneaky, it is "delusional".
//Canadians are a sneaky lot, eh?
Cheers
joe shmoe | 02.10.09 - 3:38 pm | #//
Average American stockholders are starting to abandon the game
Thinking that too, based on all that's happened in the last two days and the number of visitors at CR.
Well today was obvious to see (energy, C&C and me talked about this earlier and at the end of last week) question is how long do they continue to drive money into T-notes? Got a 30 year coming next week too....
Ciao
MS
I'm wondering about GH question upthread about puts on the Illuminati...
They might afford nationalizing the banks if they paid market price for their assets.
CNBC: 'This is like watching Deal or No Deal, but without anyone opening up the cases. We need to open up some cases.' LOL
looks like the market crash today is having the desired effect of pushing the 10year yield down.
Speed,
The banks don't have the money to pay the government for the government to 'pay' market price for the banks.
\tI'll be so happy today if SRS finishes up $10 a share.
rich | 02.10.09 - 3:38 pm | #
I was THIS CLOSE to loading up on FAZ yesterday. Didn't have the guts. Instead, I bought a boatload of GRZZX which will still make a fine showing today and will allow me to sleep at night!
Who is going to overtly devalue first?
Allen C | 02.10.09 - 3:30 pm | #
IMO it will eventually result in coordinated devaluation. Across the board debt devaluation approved and abetted by the G20. It just needs to simmer a few more months.
Yes, the market prices are close to zero (almost nobody wants to buy them). But they do not like a real market economy.
//Speed writes:
They might afford nationalizing the banks if they paid market price for their assets.
Speed | 02.10.09 - 3:49 pm | #//
Asun, Rich is much better than me in short term trades. I'm only good with fundamentals and the medium/long term.
Fundamentals for CRE are terrible, yet the companies underlying the IYR have been surprisingly resilient. My gut tells me that today's selloff will trigger margin calls and spook the technical traders. So for the time being, I'm going to hold my SRS calls.
Lately I feel like the worst companies have been pumped the most. I'd expect them to get crushed in the next wave of deleveraging.
But I could easily get burned here...
Sen. Jack Reed of Delaware says that there is a "growing analytical study" that housing prices are overcorrecting at this point. And that every household in America's wealth is being wiped out.
Who commissioned this "study"? The NAR? What a ridiculous assessment. Housing won't be overcorrecting until values are below 2000 levels.
And no, every household in America's wealth isn't being wiped out. To say nothing of the large number of responsible renters (always forgotten), there's also the huge portion of America's homeowners who bought before the bubble, and because of that their equity is still doing quite well (in fact, better than expected, since we're still seeing bubble pricing). It's only that small percentage of Americans who bought homes for the first time between 2000-2007 who are in trouble.
There is not enough available dollars to nationalize all the big banks.
If they want any chance, they'll have to let at least 1 or 2 go bankrupt, while giving their full strength to the other remaining banks
EvilHenryPaulson | Homepage | 02.10.09 - 3:48 pm | #
If even one more big one goes, they all go. It does not even have to be in the US. Timmy should be using his 350BB to start a good bank, so that the broader market can keep chugging along while the bad actors go away.
Your 401k, 529, brokerage accounts, etc just lost another 5%, America.
How long will you watch them steal your future?
"Not as happy as I will be:)
Gavshire Hathaway"
Or me.
Banks do not have any money in a fiat currency based world.
//The banks don't have the money to pay the government for the government to 'pay' market price for the banks.//
Your 401k, 529, brokerage accounts, etc just lost another 5%, America.
little voice inside my head | 02.10.09 - 3:53 pm | #
Mine didn't.
"The banks don't have the money to pay the government for the government to 'pay' market price for the banks."
EHP,
Some say I'm slow, but that sounded like a "negative equity" joke to me.
Except that you ain't a joking...
From FaradayShieldedHedgeearBrigade:
So that is what happened to me last Saturday night at the pub- roving singularity hit.
THE SPAN WORM
All beings were pressed down by approaching rain
Only one was moving, a yellow span worm
A thin segmented beast with a white belly
And black thread that ran down the center of it
With its whole length it spanned, length upon length
Curving and straightening, bending and measuring
One millimeter at a time
And as it went it sewed with its black thread
Each time it climbed a flower it broke a petal
The red and white and pink of echinacea
The cobalt of the daisy, the white of the mint
And it sewed the color to itself
All beings were pressed down by heaviness
But the storm had not yet come
All was still and all were oppressed
But the worm that spanned and spanned and climbed
And the Lord said: I will transform all Men
Make them worms, and let them cover themselves
Let them cover themselves with borrowed color
Let them measure My garden with their bellies
Let them climb the stalk of every flower
And every still plant, and every docile tree
And let them arduously measure themselves
Day after day with false measure
And let them be that way
Until the coming of the storm
Pavel
July 19, 2002
"How long will you watch them steal your future?
little voice inside my head"
Money is overrated as long as you have a gun.