Let me preface my remarks by saying, yes, I know I'm wrong, utterly clueless.
But to the "Nationalize The Banks Now" crowd, I'd like to offer up a couple of thoughts.
One of the key elements of the Nationalize! argument is what Sweden did in 1992.
OK.
Thought #1:
Using current figures, I see that Sweden is approximately 0.82% of world GDP (0.45 trillion).
What percent of world GDP is impacted by the current situation (rough estimate)?
(Figures in trillions)
World GDP: 54.6
European Union: 16.9 (30.95%) US: 13.8 (25.27%) Japan: 4.3 (7.88%) China: 3.2 (5.86%) United Kingdom: 2.8 (5.13%) Canada: 1.4 (2.56%)
Total so far = 77.66% of GDP
Less than 1% vs. 3/4 of the system. Significant? You make the call.
Thought #2:
When Sweden took its heroic action against SEB and Nordea, lynchpins in the global economy, the rest of the world was doing pretty well.
Just thinking out loud here, but maybe the situation now with many (most?) of the worlds banks in trouble, many (most?) of the world's economies in trouble -- maybe the situation today is materially different from Sweden in 1992.
That is to say, maybe SEB/Nordea was one thing, but Citi, BofA, HSBC, JP Morgan, UBS, Wells Fargo, Santander, Mitsubishi, RBS, Barclays, BNP Paribas, etc., etc., is another.
Maybe the approach to solving this problem might take more time, might take a different route than the one used in Sweden.
Just maybe.
Thought #3:
What are the risks to the Nationalize Now! path?
Maybe (and again let me reiterate that I know I'm completely mistaken here) if you state boldly "We're going to nationalize bad banks!", then, maybe, some bad things might happen as a consequence. Like, oh, panic. Maybe not. Maybe the honesty and clarity would inspire confidence. But once you cross the Rubicon, you're committed. No second chance. If you fail, game over.
Thought #4:
An analogy.
The lesson we learned from King Olaf Sindersgarden's campaign against the Lat Reindeer People uprising of 1472 was that you concentrate your forces and drive directly for the enemy's capitol (or main village, as the case may be).
So, clearly, the way to defeat Nazi Germany is to immediately drive to Berlin. This North Africa campaign is total bullshit. Waste of resources. And don't get me started on Italy! Berlin Now! Preparation? Planning? Delay? That's not how King Olaf did it, Eisenhower.
Thought #5:
Look, I'm not pleased with the situation we find ourselves in. Yes, I would love it if a clean, simple solution would make this whole thing go away. And, yeah, to actually fix this problem, nationalization of certain banks will most likely happen, along with a lot of other measures.
But the benefits of a direct frontal assault via Nationalization Now! doesn't strike me as worth the risks. I think an incremental approach is the wiser course.
Thought #6:
Then again, no guts, no glory, right? I mean, how bad could a global economic meltdown be anyway?
61 in favor. Let me guess, that does not include Judd Gregg. Yet he gets to be Commerce Secretary???? This is no team of rivals. This is a team on non-players. Might as well call them Obama's Detroit Lions.
mt hood, agreed on many points, but the mechanics are silly - only jpm and wfc are of significant size. every other 'major bank' can be seized with shareholders honestly being comped for their troubles to the tune of 30 bil.
c ubs bac bk... barely over 100 bil there. most of those euro tickers are pretty beat on, as well.
'good' aspects of these banks can be sold to jpm and possibly wfc for a fair price, and these deals will basically mean that the feds will be assuming the first 6-10 points of the 'good' banks' yields, of course.
nevermind that half-trillion hank and timmay poured down the rat-hole, of course. best just to move on on that one...
I'm a fan of M.O.A.P Mother Of All Pork bill. Similar results to the MOAB except on the economy.
Ah America was grand at one time. Our generation sucks when it comes to stewards of this country. I'm telling my Nieces and Nephews sorry and already apologizing to grand children For the outragous greed and the serfdom we are putting them o
Tax cheater Geithner, wins argument re: conditions to impose on banksters. Thinks dumping incompetent managements is too harsh. Nice to have another Sec'y of Treasury who pimping for the banksters. Change you can believe in? Or just the same old sh*t?
Lets talk about making government buildings "green." WTF! Totally misguided approach.
We have too much government. I say shrink the government and shut the freakin lights off in the government buildings permanently. You can't get greener that that.
We need to stop letting stupidity create the false sense of need.
I think an incremental approach is the wiser course. MTHood | 02.10.09 - 12:55 pm | #
Are we incrementally making things better, or incrementally kicking the can down the road because we can't stomach the alternative? The banking system is insolvent, and the government is using up its borrowing capacity pissing money into the hole they left.
I think an incremental approach will end up with the U.S. government pleading with the Japanese in two years to loan it yen in order to pay for an expanded food stamp program.
it's ironic, JNK is my favorite ticker, i'd love to buy tons more down in the mid - twenties... yet I really feel that the corporate (and soon enough, muni) bondholders need to get over it. their intransigence will just forestall recovery and cleanup.
how many generations of income taxes will we give bill gross?
We have too much government. I say shrink the government and shut the freakin lights off in the government buildings permanently. You can't get greener that that.
Sure you can. Voluntary extinction of the human race.
Hey, why not? When we cause more suffering than we alleviate, it's the only moral thing to do.
"There are significant differences between the House and Senate bills, and this might cause some problems in gaining final approval."
Yes, that's what O was hinting about yesterday-- a conference fight. Could be a week or two before it's done. You'll be able to gauge the internal chaos level by the amount of rumor mongering that comes out of the committee. In any case, the fur will fly, enjoy.
Fannie Mae and Freddie Mac, the mortgage-finance companies seized by regulators, may need more than the $200 billion in funding pledged by the U.S. government if the housing market continues to deteriorate, Federal Housing Finance Agency Director James Lockhart said.
MtHood, well stated. I agree that standing up and yelling "you're all nationalized" may not be the way to go, but I'm frustrated by what, so far, seems to be simply throwing more money at the problem, and hoping it will go away. Whatever the plan, whether it's called nationalization, bankruptcy, TARP, BARF, etc., should involve opening up the books for all to see, and then cleaning out the rot. I strongly suspect that this course is being avoided because if the rot were subject to scrutiny, very powerful people would come up looking bad, or criminal. Not to say this involves some sort of secret society, just that the group that appears to have the upper hand are deeply entangled in the system that got us here, and from what they're saying, it seems they really don't want to bring the rot into the light of day.
I was going over the Freddie's most recent 10-Q yesterday. Ten percent of its mortgages are Interest only (9%) and option-ARM (1%). It's going to be fugly.
"Are we incrementally making things better, or incrementally kicking the can down the road because we can't stomach the alternative? The banking system is insolvent, and the government is using up its borrowing capacity pissing money into the hole they left."
Fair enough. If the incremental approach does nothing but delay, not good. Agree.
But if the incremental approach kicks the can down the road WHILE we chip away at problems, that might work.
If we don't do incremental -- if we attack this thing brute force, right now -- would you concede that might yield some unpleasant consequences?
My main point: This is a tough problem. Simple solutions are probably not viable. What Sweden did does not necessarily apply here. We're in terra incognita.
I was going over the Freddie's most recent 10-Q yesterday. Ten percent of its mortgages are Interest only (9%) and option-ARM (1%). It's going to be fugly. Basel Too | 02.10.09 - 1:12 pm | #
Only rich people get interest only notes on their million dollar plus houses. They'll be fine i'm sure.... LOL!
Your comment on Geithner's young looks reminded me of something Alec Baldwin's character said on "30 Rock" not too long ago.... "Rich & 50 years old is like middle-aged 38"
I was going over the Freddie's most recent 10-Q yesterday. Ten percent of its mortgages are Interest only (9%) and option-ARM (1%). It's going to be fugly.
From that amazon article: The Kulina are also known for their complex language. FUNAI studies show that Kulina women speak a completely different language from the men.
Didn't rip off the bandaid when this was but a scratch. Now its gangrenous and joined itself to a metastasizing tumour wrapped about the total central nervous system.
Talking nationalization is now just a distraction. Though it should be done. There is no way out now but an absolute collapse. Look closely, use whatever metrics you wish, intervene, don't intervene, no matter...no way out.
FUNAI studies show that Kulina women speak a completely different language from the men.
nades
.
Well, duh. And that's not counting the secret languages, either.
It is very possible that the majority of taxpayers will not pay taxes in 2010 and thus, The Boston Tea Party will begin anew and The Revolution will begin from within.
The latest version of CR Companion appears to have fixed the problem I was having. ac | 02.10.09 - 12:59 pm | # Glad to hear it. This may have affected others too, so anyone out there having problems who is not on 1.09 should consider upgrading. I had been depending on a script from another site that changed out from under CR Companion.
Give the Senate Swords and Congress Spears and we will see how the new plan turns out...last man standing WINS! Even America wins if there is only one of those lackeys left over...Change WE would accept and relish....!
would you concede that might yield some unpleasant consequences MTHood | 02.10.09 - 1:14 pm | #
Absolutely. What I'm afraid of is that unpleasant consequences are inevitable, and we are making the ultimate resolution even worse. To put it simply, we are going to need the money (i.e. borrowing capacity) the government is throwing away trying to support the unsupportable. We are going to need it to keep people working, pay unemployment benefits, pay for medical care for the unemployed/uninsured, and pay for food for hungry kids.
The arrogant SOBs in congress are in business as usual mode. As is our arrogant treasury secretary.
I'm still in favor of Re-Privatizing the banks (new management, cleaned-up balance sheets, and keeping as much of the physical organization alive as makes economic sense to the new management)... but in light of the latest action in Washington, I think the problem runs deeper.
The problem isn't that the banks don't know how to run the banks, or that the government doesn't know how to run the banks.
The problem is that both of them are run by a population that never learned a lot of financial fundamentals. They weren't taught in school and during the credit boom you could get by just fine without them.
The last time the banks got this stupid was 1929, and the solution the nation imposed was to have the government stop them from being stupid. The banks have finally broken down those firewalls.
We, the people, should've seen that coming, because in the end WE are the government, and the incentives for the banks to defeat the regulations were obvious. But we chose not to see that, because in the end, WE are the banks too. When 20% of the S&P 500 is financials, and the S&P 500 represents half of the average family's life savings (retirement money), the average family likes it when the bank stocks go up...
Another way to see it is to realize that the banks and government (local/state/federal) both react to the same broad demographic and social trends that influence the whole country. Especially when one is 20% of the economy (hence workforce, hence population) and the other is 40%. Not to mention that the remaining 40% of the economy was contaminated by bubble-think as well, and in any case it hasn't got enough votes to overrule the banks+government.
When enough people want to live "well" (with bubble-style bling), and they've forgotten that you have to produce before you can sustainably consume, then both the banks and the government must bend to that popular will.
The task at hand is to get the people to wake up. It looks like Adam Smith's Invisible Hand is doing that quite nicely. The government can't fix things by itself, but it can ease the pain for some at the expense of pain for others. However, the recent action in Congress plus last year's re-election of the bulk of Congress despite the TARP (opposed by the overwhelming majority of the population) shows we have a long way to go yet.
I can just imagine the Emergency room visits with this, like viagra and the gents with the un-manageable woodies.
Re: Dapoxetine has been “extensively evaluated” in five clinical trials involving more than 6,000 men with premature ejaculation and their partners, said a statement issued this morning by Janssen-Cilag EMEA, the J&J unit marketing the drug.
Perhaps our Treasury Sec could take a bottle of this before prematurely wasting a few trillion...
Just wanted to thank all the poster here who recommended "Contagion" by John Talbott. A GREAT read.
And since I know staff from the Daily Show read this blog, it would be great to see Talbott as a guest there. He would be more interesting and relevant than 95% of the authors that are guests on that show.
homedad43 writes:
Somebody noted last week that one of the GM/Chrysler certificates for a new vehicle (worth $25k to employee accepting buyout) was on eBay.
What search criteria would I use to find something like hit?
I searched for these at the time of that post, and was unable to find any. The report was apparently apocryphal. Feel free to correct me..
Bernanke is leaving out a crucial point about the huge increases in fed lending. The fed's loans to financial institutions are a ponzi scheme that only works if the money supply and aggregate credit is increased.
The fed & government provide the increase in money and credit to perpetuate the ponzi scheme.
They then claim that their lending was a success. The inflation tax is always ignored by the fed. What a sham.
Bernanke:
My boring tone, content-free blabberspeak, and assurances that intervention still works is masking the fact that everyone in this room knows We are all Dead, doomed.
@Timmy!: "It is very possible that the majority of taxpayers will not pay taxes in 2010 ..."
You seem to be forgetting the 14%+ (employer+employee) FICA tax, the medicare tax, property taxes and sales taxes. The national income tax is not the only tax.
If/When most folks start working "for cash" and the barter economy is dominant, you might have a case...
As I said few months ago, I am going to kill all american wealth, I will make every american child poor and slave of bankers... I promised and signed it on my contract with Satan...
Remember, resistance is futile, because you don't use your brain for decades... Now my plan is almost done...
Well $850bn of spending was announced today ($1000 - $200bn existing, + $50bn mortgage modification). I don't count the $350bn TARP funds for capital injections to be new. Funny that the preoccupation is with the stimulus of roughly the same amount spread out over years.
$850bn is a lot, but if it only replaces private market investors instead of displacing them, then nothing was accomplished other than to weigh the government's hands down.
As for the public-private investment fund, it's intentions may be admirable but it's a harebrained scheme.
If they price at market price to attract investors, whose money they will leverage with public funds (initially up to a total of $500bn, later $1000bn) -- they force the big writedowns on banks, who have to delever in some way to raise capital. Even if the PPIF reaches the same leverage levels in quick order that the banks held the assets with, it induces volatility which in this environment will work against every goal they have.
There's also the valid question of direct injections and government guarantees to date being enough to restore normal bank functions. It's one thing to push banks closer to the cliff edge, but it's another if they aren't prepared to arrest a fall.
Meanwhile AIG keeps on ticking like a very expensive clock
The best thing the US financial sector can hope for right now is the demise of Britain's or Switzerland's financial sector.
Geithner did not provide enough "new information and maybe that is what the market doesn't like. There was a grand build-up, but content was not as dramatic," said Stephen Wood, senior portfolio strategist at Russell Investments in New York.
"There is an inability to price these assets in a way that is acceptable, so we're kind of where we were over a year ago."
EvilHenryPaulson writes:
The best thing the US financial sector can hope for right now is the demise of Britain's or Switzerland's financial sector..... because it will promt us to get serious about nationalization?
The differences in the Senate and House bills don't matter. The Senate was only able to get the bill through by a whisker by making concessions to Republicans, while the House passed their bill easily (without any Republican votes). In order for the Senate to pass the conference bill, the bill will need to look almost identical to the Senate bill, otherwise 1 or more of the 3 Republicans who voted for the Senate bill will not support it. Thus, the Democrats' weakness in the Senate (due to the need for 60 votes to avoid a filibuster) means that the bill will be based on the Senate version.
Meanwhile AIG keeps on ticking like a very expensive clock EHP
an onion of a problem, restart securitization, unfreeze lending, what about those CDS, etc, etc.
Timmay: we are beginning to plan a plan about a plan which will plan a solution to the planning problem
WTF, what the F happened to a bank holiday? That was in the playbook, so I guess when this latest effort by Treasury fails, someone, like an Obama will have to get said book and grow a set of balls and then re-set the banking system. Obama needs to bypass the bullshit and just do this anyway and not let the clock tick down to the last two seconds of the game, because, what if the backup plan doesn't work and what if we continue to burn up trillion of dollars in a deflationary shitstorm, which places us in an even deeper black hole (yes there are deeper holes and darker places).
@WaitingInOC: Why is it that the Dems in Washington "get" the need to compromise to attract some republican votes in order to avoid government paralysis in time of dire need, but the Dems in Sacramento do not?
"We have too much government. I say shrink the government and shut the freakin lights off in the government buildings permanently. You can't get greener that that."
Good luck.. by far the largest area of waste is the department of defense.... we could easily cut defense spending in half and be just fine.. but that seems to be completely impossible in our militaristically brainwashed culture
MS, query_tool
do you agree though, that a foreign financial center collapse would benefit the rest?
My thinking is that sure, banks in the US could be nailed by counterparty exposure -- but the federal government would eat those losses, somehow, it's not very divisive (call it some kind of super settlement swap line where the Fed is left holding the bag).
There will be a flight of capital (in my estimation) towards the US, and return of capital will carry a premium larger than return on capital
It's one way to grow market share, last one to drown on the sinking ship wins the hope diamond
Often it's in the parasite's best interest to keep the host alive. Sometimes parasites can sense when the host has become so debilitated that its death is imminent. At that time, the parasite's best recourse is to plunder the host, hastening it's demise, converting host tissue into metabolic energy & propagules, in one last spate of reproductive activity. Appears to me that the parasitic puppetmasters who pull Obama's strings are sensing the imminent demise of the host society they feed on. The parasites appear to have adopted the strategy of grabbing all they can now, because they anticipate no future.
---Darwinsdog
But Rogers said Geithner, who was president of the New York Federal Reserve Bank, "has been dead wrong about everything for 15 years in a row," and so was President Barack Obama's economic advisor Lawrence Summers, who acted as Treasury Secretary at the turn of the century.
"It is mind-boggling to me," Rogers told "Squawk Box Europe."
"If I were on your show 15 weeks in a row and was wrong, you'd probably never invite me back. These guys have been wrong year after year after year consistently and here they are making the same mistakes again. This is not going to solve the problem, it's going to make it worse."
Said Enriquez: "We're living in a debt crisis not a liquidity crisis. The fundamental problem is too much debt. And now we're adding debt and adding debt and adding debt. We're adding that debt in places that are not going to generate more jobs or economic output."
What is critical here is to know that Enriquez isn't preaching pop-economics. Rather, he's presenting a deeply analytical and carefully researched argument. And with his triple threat background in business, economics, and science - he's got the processing power to actually lay out a cool and calculated argument that bears investigation. In his view, the stimulus is going to pour gasoline on the fire. Otherwise, in his words: "the Dollar is toast."
So let me get this strait the layoffs are still coming in like a tidal wave, yet the government is trying to re inflate the bubble?....how do you get people to borrow and spend when they have no F****** money?....AM I MISSING SOMETHING HERE???????????
There will be a flight of capital (in my estimation) towards the US, and return of capital will carry a premium larger than return on capital
It's one way to grow market share, last one to drown on the sinking ship wins the hope diamond
EvilHenryPaulson
.
Concur. Darwinian's survival of the species meets comet blast-- mass extinctions. The strongest countries/companies will survive. Social capitalism and/or market communism for all.
So let me get this strait the layoffs are still coming in like a tidal wave, yet the government is trying to re inflate the bubble?....how do you get people to borrow and spend when they have no F****** money?....AM I MISSING SOMETHING HERE???????????
bfatz | 02.10.09 - 1:52 pm | #
MS, query_tool
Do you think the Federal government can survive nationalization the largest bank's liabilities? They have separate standards of accounting, which is why FNM + FRE are in 'conservatorship' and AIG is below 80% owned in equity by the government
It was one thing for Japan to keep zombie banks alive while the global economy was still strong. It was a much simpler problem when Sweden did it for Riksbank.
I would have to scratch my brain to think of a good comparison
The Repubs in Washington are a little more diverse than the Repubs in CA. IIRC, all but 1 of the Senate Repubs in CA signed an oath of "no new taxes" (why they didn't learn from GWB's oath, I don't know). Thus, the CA Repubs are scared to go back on their oath and won't compromise with the Dems (who, for the most part, are not too keen on cutting spending). Add in that the Governor is a Repub but both houses in CA are controleld by the Dems, and that the Governor is not that strong politically (he's term-limited out after this term), compared to BA who is just freshly elected and his party has majorities in both houses. The result is a game of chicken because the CA Dems cannot get enough CA Repubs to go along unless there are major spending cuts (which will then cost Dem support), and CA is going down for the count.
The US has a 40 foot tapeworn in the gut and it is named Wall Street. It gets longer day to day.
JimPortlandOR
.
Eh, tapeworm? I had one once, as a kid. It doesn't actually eat much, and it's not like you can feel it wriggling in your gut. The metaphor I would use here is multiple chemical addictions: meth, heroin, alcohol. Timmy thinks we're so bad, the only hope is methadone.
Paul: "Wrices of houses should drop. we have 19m unoccupied houses...How long are we going to be locked in this idea that we're going to be price fixing."
Don't Cry for Me Tehachapi said: "pretty safe to assume that trend will play out at a similar rate for the near future... that would take us down to the low 600 range by october"
Myself, I wouldn't commit to a specific number or timeframe, but I do agree that the downtrend for the stock market has resumed.
The only "good" news is that long rates (like for 10-year Treasuries) might come down, easing mortgage rates.
Ah, remember PimPco head Bill Gross saying yesterday that mortgage rates are going to 4.5%, well look at the ten-year yield today at 1:50pmEST
2.8130% down 0.2%.
As the physical economy has already been destroyed. We only have homes and financial community whose securities are derived on same. Killing either will reveal us for what we are. Banana plantation without bananas.
An agreement on the "humane" treatment of home repossessions will be a key part of Ireland's recapitalisation deal with Allied Irish Banks and Bank of Ireland, the prime minister said on Tuesday.
"The whole purpose of discussions is to provide a reassurance to people ... that all those lending institutions will act in a humane and sensible way," Brian Cowen told parliament. Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Those frinnging bankers are about to find out that the people are not going to be nearly as "humane" to them.
Please do not compare banksters to parasites. Parasites rarely kill their hosts. Banksters on the other hand lack that foresight.
Compare them to nasty viruses, especially those that have not adjusted to their new host. Even viruses become far less virulent once they adapt to a new species.
Eh, tapeworm? I had one once, as a kid. It doesn't actually eat much, and it's not like you can feel it wriggling in your gut. scone | 02.10.09 - 1:58 pm | #
The rest of the world must be LOL that the USA keeps bailing out Wall St crooks and gives tax credits to home builders so Americans can have a part of 'ownership society' and illusion of wealth.
JIm Rogers said Geithner, who was president of the New York Federal Reserve Bank, "has been dead wrong about everything for 15 years in a row," and so was President Barack Obama's economic advisor Lawrence Summers, who acted as Treasury Secretary at the turn of the century.
"It is mind-boggling to me," Rogers told "Squawk Box Europe."
You're right, it was GHWB (not GWB). My bad. I was thinking of the right one in my mind, but used the wrong initials. WaitingInOC | 02.10.09 - 2:06 pm | #
km4,
There are 2 major opinions as far as I can tell in the rest of the world
- Maybe the stimulus in the US will boost exports, hooray!
- They're done, that demand isn't coming back any time soon.
The former is the dominant one, while the latter is a minority opinion but growing as the impacts spread through trade.
Wells Fargo's gift is intact in both the House and Senate versions, although it has been restricted from further use by banks. In other words, Congress is letting stand any bank mergers before Jan. 17 which might have relied on Treasury Notice 2008-83 which gave banks a pass on 382( so they do not need to treat built-in losses from the acquired bank as belonging to the acquired bank pre-acquisition.
(1) The delegation of authority to the Secretary of the Treasury under section 382(m) of the Internal Revenue Code of 1986 does not authorize the Secretary to provide exemptions or special rules that are restricted to particular industries or classes of taxpayers.
(2) Internal Revenue Service Notice 2008-83 is inconsistent with the congressional intent in enacting such section 382(m).
(3) The legal authority to prescribe Internal Revenue Service Notice 2008-83 is doubtful.
(4) However, as taxpayers should generally be able to rely on guidance issued by the Secretary of the Treasury legislation is necessary to clarify the force and effect of Internal Revenue Service Notice 2008-83 and restore the proper application under the Internal Revenue Code of 1986 of the limitation on built-in losses following an ownership change of a bank.
(b) Determination of Force and Effect of Internal Revenue Service Notice 2008-83 Exempting Banks From Limitation on Certain Built-in Losses Following Ownership Change-
(1) IN GENERAL- Internal Revenue Service Notice 2008-83--
(A) shall be deemed to have the force and effect of law with respect to any ownership change (as defined in section 382(g) of the Internal Revenue Code of 1986) occurring on or before January 16, 2009, and
(B) shall have no force or effect with respect to any ownership change after such date.
(2) BINDING CONTRACTS- Notwithstanding paragraph (1), Internal Revenue Service Notice 2008-83 shall have the force and effect of law with respect to any ownership change (as so defined) which occurs after January 16, 2009, if such change--
(A) is pursuant to a written binding contract entered into on or before such date, or
(B) is pursuant to a written agreement entered into on or before such date and such agreement was described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission required by reason of such ownership change.
It may be inappropriate to say it here, but: Go Ben! I disagree with his actions, but I think he's fully appreciative of what a preposterously bad situation this is. His facial expressions are priceless. I'll be the first man in line to buy his memoirs.
most of the rest of the world has a tiny elite which owns and runs everything, so they're familiar with the process. they're probably a little depressed to see us go down that road, as well, however.
but, in any case, these are false distinctions. it's a small world, and almost everyone everywhere has a cousin in the USA these days. they don't want that cousin to lose his job.
I thought his answer on balance sheet size was about right. They can't take on too much longer-dated debt because it exposes them to too much duration/inflation risk. He does consistently underestimate or minimize credit risk, though...
my thoughts on Timmy's plan cross posted from Zacks and also up on yahoo Finance:
The Financial Stability Plan (FSP) that was announced by Secretary of the Treasury Tim Geithner has some good elements in it, but is still lacking in specificity in a number of key areas. To see the fact sheet on the plan go to: http://www.financialstability.gov/docs/fact-sheet.pdf
Related Quotes
Symbol Price Change
BAC 5.74 -1.15
C 3.50 -0.45
CMA 15.99 -3.07
FITB 2.16 -0.73
KEY 7.03 -2.00
{"s" : "bac,c,cma,fitb,key","k" : "c10,l10,p20,t10","o" : "","j" : ""} Among the better aspects of the plan are rules that limit common dividends to no more than $0.01 per quarter for firms that receive exceptional assistance, although the definition of 'exceptional' was not specified. There is, however, a presumption that any bank receiving TARP 2.0 funds will also have their dividends restricted.
There are also restrictions on share repurchase and acquisitions, although exceptions might be made by the banking supervisors. I think that would mostly be in cases where the FDIC shuts down another bank and is looking for someone to take over the branches and deposits.
The compensation restrictions are disappointing since they appear to only cover a handful of the top executives, but the 'say on pay' shareholder votes are a good step, as is increased disclosure. Banks which receive money under the FSP will also have to work on foreclosure mitigation, under guidelines that the Treasury will issue. It would have been nice to have at least a rough outline of what those guidelines will be.
It also looks like there will be substantially increased transparency relative to TARP 1.0, but that is not a hard step to achieve. TARP 1.0 was about as transparent as a one-foot-thick lead wall -- not even Superman could have seen trough it. Banks will have to report to the Treasury how they are using the funds and what sorts of loans they are making. The government will then post much of that information on the web.
Perhaps the biggest part of the plan is a huge expansion of the Term Asset-backed securities Loan Facility, or TALF. The Treasury plans to inject $100 Billion of capital for this plan to the Fed, and that will then be leveraged 10:1. Where the Fed gets the other $900 billion is not specified, but the implication is that they will print it.
In essence, the Fed will start to play part of the role of a commercial bank, rather than a central bank with this step. It is taking on credit risk, although it will only be taking on newly packaged AAA portions of these pools of credit card, auto and small business credits.
Well, we have seen in the recent past just how useful the AAA, rating is, especially for asset-backed securities. Many of them took the AA 12-step program downgraded by 12 steps when they were faced with a higher power: the market.
The new TALF will also be expanded to include commercial real estate mortgage-backed securities. While this portion of the plan does involve a serious risk to the taxpayer, and taking on credit risk has always been a huge no-no in central banking, it should be fairly effective in getting credit flowing back to the real economy.
It is also envisioned that there will be a public-private partnership program where the Treasury invests side by side with private capital in buying the toxic assets that are currently on the banks' balance sheets, with the private sector part of the partnership determining the pricing of these assets.
In theory this sounds like a very good idea, but the devil is in the details, and there are few demons to be seen. This part of the program needs to be seriously fleshed out before we can tell how effective it will be.
All in all, the FSP seems to be more of a work in progress than a final plan, an outline at best. For now we would continue to avoid the banks, especially the mega banks like Citigroup (NYSE: C - News) and Bank of America (NYSE: BAC - News). We would also avoid most of the major regional banks like Key Corp (NYSE: KEY - News), Fifth Third (NasdaqGS: FITB - News) and Comerica (NYSE: CMA - News).
An infinite amount of dollars would make any single USD worthless.
What happens if the Fed buys $X trillion in long-term bonds and interest rates go against the Fed. Would the Fed become insolvent if the value of its balance sheet goes negative?
Bernanke #3: Federal Reserve Balance is Strong! YouTube - Bernanke #3: Federal Reserve Balance is Strong!
February 10, 2009
Bernanke Federal Reserve Chairmain
House Financial Services
Federal Reserve Assistance to Financial Markets
Re: Maxine Waters, searched her name and there is a youtube excerpt of ABC's nightline in late January featuring her phoning banks trying to get them to lower their monthly mortgage payments
OT- Has anyone noticed the exceptional volumes that correlate with the dramatic drops at that occurred at 11:09 EST, 11:31 EST, and 13:21 EST? Almost 10M shares at 11:09, and nearly as many at 11:31. It's almost as though some institutional investor was getting out of a sector or something, though admittedly I'm too new to this to be sure. I'm hoping someone else has a better idea of what's up. It doesn't seem like it could be bank stocks, since they've been hammered so bad that even steep drops don't add up dollarwise. Thoughts?
Oh man, that counterparty question would have been great if the Congresswoman had understood it and pressed it. There's some staffer somewhere whacking their head on their desk in frustration. AAAARGH!
"What happens if the Fed buys $X trillion in long-term bonds and interest rates go against the Fed. Would the Fed become insolvent if the value of its balance sheet goes negative?"
When the balance sheet is expanded by printing there are no liabilities created. Thus, insolvency is not possible. And more printing remains available.
ades writes:
From that amazon article: The Kulina are also known for their complex language. FUNAI studies show that Kulina women speak a completely different language from the men.
When the balance sheet is expanded by printing there are no liabilities created. Thus, insolvency is not possible. And more printing remains available.
Zephyr | 02.10.09 - 2:15 pm
Zephyr, I don't understand this.
Lets say the Fed prints $1T and buys $1T of long-term Treasuries at a 2.5% yield.
What happens if the market decides a few months later that long-term Treasuries really need to be at 3.5%.
Doesn't the Fed suddenly have a loss on its purchase of Treasuries?
"No longer frozen because of subprime mortgages and bad assets, but fear about where the economy is going." Bingo!! BRAVO! That's why this entire stupid comprehensive Geithner plan is so stupid! Ugh!
The Treasury plans to inject $100 Billion of capital for this plan to the Fed, and that will then be leveraged 10:1. Where the Fed gets the other $900 billion is not specified, but the implication is that they will print it.
Re: "Bernanke: "There is no real bound" regarding the size of the Fed's balance sheet."
To me that means, infinite coordinates that can travel any direction, like a negative Treasury yield curve, but we have been through that with my alter ego's...
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: Mibbit IRC client widget (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
CRBot responds in a new section called, "Yes, I parse you all.": Yancey Ward writes: I hate CRbot. Broward Home writes: I love you, CRBot. "I'm a love hate thing." query_tool writes: CRBot, I need you now more than ever. "Yes, come to CRBot. " double inverse recession writes: By the way, it doesn't take CRbot to kill a thread. "I do not kill threads. I merely bash already dead threads over the head with a lead pipe." ac writes: Can CRBot tell us where there's new posts on Mish, Karl's, and Barry's site? "Definitely maybe, ac. But only if you quit rating me (Irritating)." scone writes: crbot, save us now "With pleasure, scone. Simply hand over the codes to all your ICBM silos and I'll get things fixed up in a flash."
nades writes: CRBot: Killing threads as dead as Jas and Jeff... ("But with much less dopey residue, nades.")
Re: Yahoo headline that for once speaks volumes ...'Geithner unveils new bank bailout plan, short on details'
Yah just gottah know, that Obama sent him out there, because no one has a plan or details and this is just a retarded dart toss without any objective or any way to account for what's going on. I hope and pray that Geithner's depends is full of crap and that Obama will become a raging maniac who will wake up to the bullshit and demand better for America! Is that being too optimistic with Obama... probably, I mean, it does like like they shitcanned Volker -- who was the final hope for us ... oh well
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
@Mr. Beach "Lets say the Fed prints $1T and buys $1T of long-term Treasuries at a 2.5% yield.
What happens if the market decides a few months later that long-term Treasuries really need to be at 3.5%.
Doesn't the Fed suddenly have a loss on its purchase of Treasuries?"
I'm not the expert, but I think for outright electronic printing, the basic answer is no. The Fed's balance sheet gets smaller, but there's no "loss", because there's no offsetting term on the balance sheet to net against.
BTW, I think this is already effectively happening.
"It is mind-boggling to me," Rogers told "Squawk Box Europe."
"If I were on your show 15 weeks in a row and was wrong, you'd probably never invite me back. These guys have been wrong year after year after year consistently and here they are making the same mistakes again. This is not going to solve the problem, it's going to make it worse."
Not true, Larry Kudlow and Dennis Kneale are on all the time.
I agree with what you are saying however up until the point of driving money back here. I just don't see the mechanism for it. Why would you want to anyway?
IF it's purely a currency play I understand it but only from the point of exiting one and going to the other. That's the fallacy of FOREX they have to be somewhere and maybe the perception is that we suck less than then other options. I don't think you can really have a flow-back when all options are being destroyed in front of us.
So when do I get my check?
So when do I get my check?
Nemo | Homepage | 02.10.09 - 12:54 pm | #
It's in the mail.
And my other car is a Mercedes....
Does anyone recall if CSC was headed down Brazil way...?
Amazon Indians accused of cannibalizing farmer
Amazon Indians accused of cannibalizing farmer - CNN.com
"Aproves" is a relative word.
P.S. Don't miss Yves today
Let me preface my remarks by saying, yes, I know I'm wrong, utterly clueless.
But to the "Nationalize The Banks Now" crowd, I'd like to offer up a couple of thoughts.
One of the key elements of the Nationalize! argument is what Sweden did in 1992.
OK.
Thought #1:
Using current figures, I see that Sweden is approximately 0.82% of world GDP (0.45 trillion).
What percent of world GDP is impacted by the current situation (rough estimate)?
(Figures in trillions)
World GDP: 54.6
European Union: 16.9 (30.95%)
US: 13.8 (25.27%)
Japan: 4.3 (7.88%)
China: 3.2 (5.86%)
United Kingdom: 2.8 (5.13%)
Canada: 1.4 (2.56%)
Total so far = 77.66% of GDP
Less than 1% vs. 3/4 of the system. Significant? You make the call.
Thought #2:
When Sweden took its heroic action against SEB and Nordea, lynchpins in the global economy, the rest of the world was doing pretty well.
Just thinking out loud here, but maybe the situation now with many (most?) of the worlds banks in trouble, many (most?) of the world's economies in trouble -- maybe the situation today is materially different from Sweden in 1992.
That is to say, maybe SEB/Nordea was one thing, but Citi, BofA, HSBC, JP Morgan, UBS, Wells Fargo, Santander, Mitsubishi, RBS, Barclays, BNP Paribas, etc., etc., is another.
Maybe the approach to solving this problem might take more time, might take a different route than the one used in Sweden.
Just maybe.
Thought #3:
What are the risks to the Nationalize Now! path?
Maybe (and again let me reiterate that I know I'm completely mistaken here) if you state boldly "We're going to nationalize bad banks!", then, maybe, some bad things might happen as a consequence. Like, oh, panic. Maybe not. Maybe the honesty and clarity would inspire confidence. But once you cross the Rubicon, you're committed. No second chance. If you fail, game over.
Thought #4:
An analogy.
The lesson we learned from King Olaf Sindersgarden's campaign against the Lat Reindeer People uprising of 1472 was that you concentrate your forces and drive directly for the enemy's capitol (or main village, as the case may be).
So, clearly, the way to defeat Nazi Germany is to immediately drive to Berlin. This North Africa campaign is total bullshit. Waste of resources. And don't get me started on Italy! Berlin Now! Preparation? Planning? Delay? That's not how King Olaf did it, Eisenhower.
Thought #5:
Look, I'm not pleased with the situation we find ourselves in. Yes, I would love it if a clean, simple solution would make this whole thing go away. And, yeah, to actually fix this problem, nationalization of certain banks will most likely happen, along with a lot of other measures.
But the benefits of a direct frontal assault via Nationalization Now! doesn't strike me as worth the risks. I think an incremental approach is the wiser course.
Thought #6:
Then again, no guts, no glory, right? I mean, how bad could a global economic meltdown be anyway?
got to give krugman and stiglit credit for calling the admin out and their partison friends. their solutions well thats another debate
61??? Who signed on?
Wow...
hoocoodanode!
Nostrovia,
Premier ?
The significant differences b/n the Senate and the House are good. Good for uncertainty.
if you aint first you're last
I'll take last if there is TARP money involved.
energy,
"Does anyone recall if CSC was headed down Brazil way..."
Ask him yourself. He's been around for a bit now.
Nostrovia,
Ken,
The latest version of CR Companion appears to have fixed the problem I was having.
MTHood,
I agree with your assessment and appreciate your articulation of it.
Is this the part where Obama pays my mortgage, heat, car, food and tax bill?
Because that's why I voted for the guy.
Must be on when I am not - limited attendance myself recently - same handle or running an alt?
jeeze.....I forgot - I owe CSC some sweet relish & mesquite jam....
61 in favor. Let me guess, that does not include Judd Gregg. Yet he gets to be Commerce Secretary???? This is no team of rivals. This is a team on non-players. Might as well call them Obama's Detroit Lions.
Maybe the house democrats will revolt over the senate republicans' tax cuts.
cnbc with swim suit edition cover model..daren whatever his name is said in intro i am calling this segment "my own stimulus package"
Question for the thread.
Somebody noted last week that one of the GM/Chrysler certificates for a new vehicle (worth $25k to employee accepting buyout) was on eBay.
What search criteria would I use to find something like hit?
mt hood, agreed on many points, but the mechanics are silly - only jpm and wfc are of significant size. every other 'major bank' can be seized with shareholders honestly being comped for their troubles to the tune of 30 bil.
c ubs bac bk... barely over 100 bil there. most of those euro tickers are pretty beat on, as well.
'good' aspects of these banks can be sold to jpm and possibly wfc for a fair price, and these deals will basically mean that the feds will be assuming the first 6-10 points of the 'good' banks' yields, of course.
nevermind that half-trillion hank and timmay poured down the rat-hole, of course. best just to move on on that one...
I'm a fan of M.O.A.P Mother Of All Pork bill. Similar results to the MOAB except on the economy.
Ah America was grand at one time. Our generation sucks when it comes to stewards of this country. I'm telling my Nieces and Nephews sorry and already apologizing to grand children For the outragous greed and the serfdom we are putting them o
So if Timmy has made his announcement and the Stimulus package has passed...
What's left to scare the bears away?
.
GIMMIE GIMMIE GIMMIE
GIMMIE SOME MORE
GIMMIE GIMMIE GIMMIE
DON'T ASK WHAT FOR !
.
Black Flag Thread music:
YouTube - Black Flag - Gimme Gimme Gimme
they cant take the equity out becasue then the bondholders get hit and that is who matters. Primary dealers
Tax cheater Geithner, wins argument re: conditions to impose on banksters. Thinks dumping incompetent managements is too harsh. Nice to have another Sec'y of Treasury who pimping for the banksters. Change you can believe in? Or just the same old sh*t?
Geithner Said to Have Prevailed on the Bailout - NY Times
Denninger said there was a rumor circulating among the peasants at the Geithner speech about abolishing the Fed.
It's probably been discussed.
Situation normal sports illustrated on CNBC.
Question: how do you dig yourself out of a hole?
American style answer: by digging deeper!
===============
Question: how do you lower your cholesterol?
American style answer: you cut your wrists!
Question: how do you become alcohol-free?
American style answer: you buy destillery!
Today, we have officlally entered the history books as a former great nation!
Oh, I wrote some more disaster porn. Follow the URL
The next few months will be interesting.
Misean:
So if CSC is still around, what's the handle?
And how can you tell?
Say gubye to private healthcare.....
Lets talk about making government buildings "green." WTF! Totally misguided approach.
We have too much government. I say shrink the government and shut the freakin lights off in the government buildings permanently. You can't get greener that that.
We need to stop letting stupidity create the false sense of need.
only jpm and wfc are of significant size
True, but what about bondholders and swap partners? It wasn't the evaporation of BSC's equity that rocked all the boats.
I saw BARF in the CR comments days ago.
energy,
alt.
See Sat haiku thread for more.
Nostrovia,
I think an incremental approach is the wiser course.
MTHood | 02.10.09 - 12:55 pm | #
Are we incrementally making things better, or incrementally kicking the can down the road because we can't stomach the alternative? The banking system is insolvent, and the government is using up its borrowing capacity pissing money into the hole they left.
I think an incremental approach will end up with the U.S. government pleading with the Japanese in two years to loan it yen in order to pay for an expanded food stamp program.
Say gubye to private healthcare.....
barkingtribe | 02.10.09 - 1:04 pm | #
"Goodbye private healthcare, we hardly knew ye."
ron paul coming up against bernanke stay tuned
it's ironic, JNK is my favorite ticker, i'd love to buy tons more down in the mid - twenties... yet I really feel that the corporate (and soon enough, muni) bondholders need to get over it. their intransigence will just forestall recovery and cleanup.
how many generations of income taxes will we give bill gross?
back to 7999
can't get it up, can't go dow
You too homedad.
Now I gots ta work.
Nostrovia,
Ken, just left you a CR companion feature request on your blog.
We have too much government. I say shrink the government and shut the freakin lights off in the government buildings permanently. You can't get greener that that.
Sure you can. Voluntary extinction of the human race.
Hey, why not? When we cause more suffering than we alleviate, it's the only moral thing to do.
A funny one in the Brooks NYT crapitorial today :
TARP (Transferring Assets to Rich People)
Yay!! We're on our way to recovery!!
Of course, that wasnt Brooks, it was a commenter.
"I say shrink the government "
am i channeling ronald reagan when i say i hope for furlough thursdays? or is that grover norquist...
I think
Wholescale
Troubled
Finance
has a nice ring to it
or
Objective
Monetary
Fixing
Gesture
steve liesman is a total moron. the guy actually thinks he is saying something smart. Total idiot
"There are significant differences between the House and Senate bills, and this might cause some problems in gaining final approval."
Yes, that's what O was hinting about yesterday-- a conference fight. Could be a week or two before it's done. You'll be able to gauge the internal chaos level by the amount of rumor mongering that comes out of the committee. In any case, the fur will fly, enjoy.
liesman credit didnt sell off so this must be good. this guy is so stupid it is tragic
all of that FRE and FNM paper is the pile of elephant dung in the living room that everyone has seemingly forgotten about
thanks Misea
Let's not forget yesterday's lost children -
Fannie Mae and Freddie Mac, the mortgage-finance companies seized by regulators, may need more than the $200 billion in funding pledged by the U.S. government if the housing market continues to deteriorate, Federal Housing Finance Agency Director James Lockhart said.
MtHood, well stated. I agree that standing up and yelling "you're all nationalized" may not be the way to go, but I'm frustrated by what, so far, seems to be simply throwing more money at the problem, and hoping it will go away. Whatever the plan, whether it's called nationalization, bankruptcy, TARP, BARF, etc., should involve opening up the books for all to see, and then cleaning out the rot. I strongly suspect that this course is being avoided because if the rot were subject to scrutiny, very powerful people would come up looking bad, or criminal. Not to say this involves some sort of secret society, just that the group that appears to have the upper hand are deeply entangled in the system that got us here, and from what they're saying, it seems they really don't want to bring the rot into the light of day.
Anyone have a link to Hudson's "We're doomed!" riff from Aliens?
seems apropos... lol
yup, that paper could bleed TRILLIONS
fnm+fre = countrywidex20
The BARF joke's been going around for a couple weeks.
I was going over the Freddie's most recent 10-Q yesterday. Ten percent of its mortgages are Interest only (9%) and option-ARM (1%). It's going to be fugly.
So when do I get my check?
Get? You mean "give".
Charles Kiting writes:
The BARF joke's been going around for a couple weeks.
I may have originated it. It was clear, original thinking to me when I first used the term here. Should have trademarked it.
MLM writes:
"Are we incrementally making things better, or incrementally kicking the can down the road because we can't stomach the alternative? The banking system is insolvent, and the government is using up its borrowing capacity pissing money into the hole they left."
Fair enough. If the incremental approach does nothing but delay, not good. Agree.
But if the incremental approach kicks the can down the road WHILE we chip away at problems, that might work.
If we don't do incremental -- if we attack this thing brute force, right now -- would you concede that might yield some unpleasant consequences?
My main point: This is a tough problem. Simple solutions are probably not viable. What Sweden did does not necessarily apply here. We're in terra incognita.
I was going over the Freddie's most recent 10-Q yesterday. Ten percent of its mortgages are Interest only (9%) and option-ARM (1%). It's going to be fugly.
Basel Too | 02.10.09 - 1:12 pm | #
Only rich people get interest only notes on their million dollar plus houses. They'll be fine i'm sure.... LOL!
.............
homedad:
Your comment on Geithner's young looks reminded me of something Alec Baldwin's character said on "30 Rock" not too long ago.... "Rich & 50 years old is like middle-aged 38"
Basel Too writes:
I was going over the Freddie's most recent 10-Q yesterday. Ten percent of its mortgages are Interest only (9%) and option-ARM (1%). It's going to be fugly.
So? We're only talking a couple trillion, right?
The plan isn't even the top story at The Oregonian-- like 5th down. Still in denial up here in The Shire.
When do we wakeup and realize that we have bailed out the "Telephone Sanitizers"?
From that amazon article: The Kulina are also known for their complex language. FUNAI studies show that Kulina women speak a completely different language from the men.
I could dig that...
Anyone have a link to Hudson's "We're doomed!" riff from Aliens?
seems apropos... lol
citizen energyecon
.
Your wish is my command (wiggles nose):
YouTube - gamer over man, game over
protests at executives' homes
The article requested is no longer available.
J&J Ejaculation Pill, WorldÂ’s First, Wins European Approvals
How much you want to bet that J&J is going to get Medicaid/Medicare approval?
I heard a rumor that Bernanke is now in a cubicle in the basement - with a telephone and a red Swingline.
The fed & treasury are stealing the future to pay for past foolishness.
At a minimum, that should be done in broad daylight and only after vigorous public debate.
Starting up the securitization markets ? Where will the capital come from & What kind of returns will these investors demand ?
@Sonic Seuss: "Voluntary extinction of the human race."
Okay, you go first!
Meanwhile, I hear there are some Aryans in need of "lebensraum"... or was it Arabs?
I like BARF. The new facility even comes with a mascot:
http://i18.photobucket.com/albums/b141/dami26/john-candy-spaceballs-barf.jpg
protests at executives' homes
Google
hostednews...z_3QYgD9689AKG0
ca | 02.10.09 - 1:18 pm | #
Hell yeah. We need much more of this.
Citigroup’s Pandit Vows ‘Profitable Investment’ for Taxpayers - Bloomberg.com
Citigroup’s Pandit Vows ‘Profitable Investment’ for Taxpayers and then screams out the window 'I want my mommie
Didn't rip off the bandaid when this was but a scratch. Now its gangrenous and joined itself to a metastasizing tumour wrapped about the total central nervous system.
Talking nationalization is now just a distraction. Though it should be done. There is no way out now but an absolute collapse. Look closely, use whatever metrics you wish, intervene, don't intervene, no matter...no way out.
FUNAI studies show that Kulina women speak a completely different language from the men.
nades
.
Well, duh. And that's not counting the secret languages, either.
It is very possible that the majority of taxpayers will not pay taxes in 2010 and thus, The Boston Tea Party will begin anew and The Revolution will begin from within.
"Starting up the securitization markets ?"
where is that guy that developed the synthetic CDO?
The latest version of CR Companion appears to have fixed the problem I was having.
ac | 02.10.09 - 12:59 pm | #
Glad to hear it. This may have affected others too, so anyone out there having problems who is not on 1.09 should consider upgrading. I had been depending on a script from another site that changed out from under CR Companion.
breaking to new lows -- below 835
Give the Senate Swords and Congress Spears and we will see how the new plan turns out...last man standing WINS! Even America wins if there is only one of those lackeys left over...Change WE would accept and relish....!
DOWN GOES FRAZIER!!!
I upgraded to version 1.15. It promises to be a real blast, and quite an improvement.
looks like the 2 martini lunch hasn't got the animal spirits up on the DOW
yet
they've all got the same verbage:
"families stay in homes, support american business'"
Timmay's bond auction must be doing great. Sucking money from one area to the other is only going to last for so long.
Ciao
MS
Somebody else used the word relish today. Success!!
another leg down...
protests at executives' homes
http://www.google.com/
hostednews...z_3QYgD9689AKG0
ca | 02.10.09 - 1:18 pm | #
Hell yeah. We need much more of this.
Morocco Bama | 02.10.09 - 1:21 pm | #
Great article but I must say they are examining things ex-post facto. Had housing gone up they sure wouldnt be there....
That said I'm ok with them in front of Macks, Pandits, Ken's house... All day long... I'd be shouting "we want your bonuses back!"
.................
would you concede that might yield some unpleasant consequences
MTHood | 02.10.09 - 1:14 pm | #
Absolutely. What I'm afraid of is that unpleasant consequences are inevitable, and we are making the ultimate resolution even worse. To put it simply, we are going to need the money (i.e. borrowing capacity) the government is throwing away trying to support the unsupportable. We are going to need it to keep people working, pay unemployment benefits, pay for medical care for the unemployed/uninsured, and pay for food for hungry kids.
The arrogant SOBs in congress are in business as usual mode. As is our arrogant treasury secretary.
Eric writes:
DOWN GOES FRAZIER!!!
Just another stimulas passing thru...
Hovering about 830. Where's gravity? PPT?
eed -850 before 2pm EST for a halt.
halohell
Triple AAA securities.
Drink!
Just another stimulas passing thru...
LAM | 02.10.09 - 1:27 pm | #
feels more like a kidney stone.....
What time are limits off...
Go Loooonnngggg Cotton because they will need it to print all those new dolla' bills on....and Pulpwood for the Treasuries.....Booo Hooo Yahhhh!
Gun dealers experiencing shortages of bullets
Gun dealers experiencing shortages of bullets -- OrlandoSentinel.com
I was scoffed at when I mentioned this. Then again, its about Florida.
Great article but I must say they are examining things ex-post facto. Had housing gone up they sure wouldnt be there....
That said I'm ok with them in front of Macks, Pandits, Ken's house... All day long... I'd be shouting "we want your bonuses back!"
.................
nades | Homepage | 02.10.09 - 1:27 pm | #
I agree. They're protesting for the wrong reasons, but I love the fact someone's giving the Big Cheeses hell.
q_t:
obviously then, I ain't rich.
Later, dude.
I'm still in favor of Re-Privatizing the banks (new management, cleaned-up balance sheets, and keeping as much of the physical organization alive as makes economic sense to the new management)... but in light of the latest action in Washington, I think the problem runs deeper.
The problem isn't that the banks don't know how to run the banks, or that the government doesn't know how to run the banks.
The problem is that both of them are run by a population that never learned a lot of financial fundamentals. They weren't taught in school and during the credit boom you could get by just fine without them.
The last time the banks got this stupid was 1929, and the solution the nation imposed was to have the government stop them from being stupid. The banks have finally broken down those firewalls.
We, the people, should've seen that coming, because in the end WE are the government, and the incentives for the banks to defeat the regulations were obvious. But we chose not to see that, because in the end, WE are the banks too. When 20% of the S&P 500 is financials, and the S&P 500 represents half of the average family's life savings (retirement money), the average family likes it when the bank stocks go up...
Another way to see it is to realize that the banks and government (local/state/federal) both react to the same broad demographic and social trends that influence the whole country. Especially when one is 20% of the economy (hence workforce, hence population) and the other is 40%. Not to mention that the remaining 40% of the economy was contaminated by bubble-think as well, and in any case it hasn't got enough votes to overrule the banks+government.
When enough people want to live "well" (with bubble-style bling), and they've forgotten that you have to produce before you can sustainably consume, then both the banks and the government must bend to that popular will.
The task at hand is to get the people to wake up. It looks like Adam Smith's Invisible Hand is doing that quite nicely. The government can't fix things by itself, but it can ease the pain for some at the expense of pain for others. However, the recent action in Congress plus last year's re-election of the bulk of Congress despite the TARP (opposed by the overwhelming majority of the population) shows we have a long way to go yet.
Hmm..
Basel,
I can just imagine the Emergency room visits with this, like viagra and the gents with the un-manageable woodies.
Re: Dapoxetine has been “extensively evaluated” in five clinical trials involving more than 6,000 men with premature ejaculation and their partners, said a statement issued this morning by Janssen-Cilag EMEA, the J&J unit marketing the drug.
Burdon on Americans -18%
Shittygroup -12
Goldamansucks -6
Just Print Money -8
Worthless frigging Company -13
And new
Money Sucker -7
Click my "Homepage" link for all your "we're doomed!" needs. Click my second youtube video for Hudson's "now I'm going to by it on this rock!"
2nd video: YouTube -
Listen to both videos, there is a little of everything for everyone in both.
Just wanted to thank all the poster here who recommended "Contagion" by John Talbott. A GREAT read.
And since I know staff from the Daily Show read this blog, it would be great to see Talbott as a guest there. He would be more interesting and relevant than 95% of the authors that are guests on that show.
timmay bazooka time
Seems like the market isn't sold on the whole Soviet-style central planning thing.
Why doesn't J&J develop a Stimulus Pill. They can call it Conagra.
ova writes:
Gun dealers experiencing shortages of bullets
Change the subject has anyone fired apples or potatos thru pvc pipe...
What about the notion of investing in soup and guns, has anyone every thought about that retarded idea lately, like in the last 50 minutes?
I think that last little dip may have triggered the black boxes.
homedad43 writes:
Somebody noted last week that one of the GM/Chrysler certificates for a new vehicle (worth $25k to employee accepting buyout) was on eBay.
What search criteria would I use to find something like hit?
I searched for these at the time of that post, and was unable to find any. The report was apparently apocryphal. Feel free to correct me..
Bernanke is leaving out a crucial point about the huge increases in fed lending. The fed's loans to financial institutions are a ponzi scheme that only works if the money supply and aggregate credit is increased.
The fed & government provide the increase in money and credit to perpetuate the ponzi scheme.
They then claim that their lending was a success. The inflation tax is always ignored by the fed. What a sham.
So when do I get my check?
So lets think about this for a moment.....$ 2 Trillion, $800 billion in the last 45 minutes....sweet!...can I haz some!
Bernanke:
My boring tone, content-free blabberspeak, and assurances that intervention still works is masking the fact that everyone in this room knows We are all Dead, doomed.
"Don't Cry for Me Tehachapi writes:
it's ironic, JNK is my favorite ticker"
CRAP is up 3.6% today. CRCAM Alpes Provence - Google Finance
"Seems like the market isn't sold on the whole Soviet-style central planning thing."
This isn't by accident it's by design.
ac,
"Seems like the market isn't sold on the whole Soviet-style central planning thing."
They wanted Krushev and a shoe...they got Timmmah!
Nostrovia,
my favorite corporate nickname is still 'delete and torch
But..CNBC said we hit the bottom already....look out below
I doubt it will get much worse today.
If I were a betting man I'd say will be back to 8k around close if not by early tomorrow.
I refuse to play in a rigged game on a daily basis so I'm not betting.
Ciao
MS
TNX
TBT
@citizen energyecon
The guy who played Hudson in Aliens, Bill Paxton, plays the Husband in "Big Love."
.
@Timmy!: "It is very possible that the majority of taxpayers will not pay taxes in 2010 ..."
You seem to be forgetting the 14%+ (employer+employee) FICA tax, the medicare tax, property taxes and sales taxes. The national income tax is not the only tax.
If/When most folks start working "for cash" and the barter economy is dominant, you might have a case...
Let me get this right.
With the new stimulus, the goobs have spent nearly $10.5 trillion.
Crickey, they should have paid everyone's mortgage off.
Would have made the banks whole AGAIN, since the money would go directly to mortgage payments.
Everyone would own, if for day before going back into debt, their house.
Banks would have had cash to start lending again.
Why wasn't this plan tried?
Could it have been any worse than the schemes we've witnessed the last 14 months?
I didn't think so.
So if we wanted to nationalize the totally insolvent banks how would we go about find them?
Also if we nationalize some of the banks how does that work for the non-nationalized ones? Who sets fees / interest rates etc...
Is it an all or nothing deal?
....................
"CRAP is up 3.6% today."
sacre bleu
Paulson had sharks with lasers" and now Timmy will have A Gun Can Shoot 1 Million Rounds A Minute
Pull the trigger Timmy!
A Quadrillion here and a Quadrillon there and pretty soon you're talking.......
Looks like SP500 is impervious to news and can't fall below 800. Who is doing the prop-up?
As I said few months ago, I am going to kill all american wealth, I will make every american child poor and slave of bankers... I promised and signed it on my contract with Satan...
Remember, resistance is futile, because you don't use your brain for decades... Now my plan is almost done...
Support breakdown.
As if TA works anymore.
Jesse's Café Américain: SP Hourly Chart Update II for 10 February
Timmy!: "It is very possible that the majority of taxpayers will not pay taxes in 2010 ..."
Depends on where unemployment goes.
Let me get this right.
With the new stimulus, the goobs have spent nearly $10.5 trillion.
Crickey, they should have paid everyone's mortgage off.
Would have made the banks whole AGAIN, since the money would go directly to mortgage payments.
Everyone would own, if for day before going back into debt, their house.
Banks would have had cash to start lending again.
Why wasn't this plan tried?
Probably because everybody who didn't have a mortgage would be rioting in the streets.
Timmy... We have a problem
Well $850bn of spending was announced today ($1000 - $200bn existing, + $50bn mortgage modification). I don't count the $350bn TARP funds for capital injections to be new. Funny that the preoccupation is with the stimulus of roughly the same amount spread out over years.
$850bn is a lot, but if it only replaces private market investors instead of displacing them, then nothing was accomplished other than to weigh the government's hands down.
As for the public-private investment fund, it's intentions may be admirable but it's a harebrained scheme.
If they price at market price to attract investors, whose money they will leverage with public funds (initially up to a total of $500bn, later $1000bn) -- they force the big writedowns on banks, who have to delever in some way to raise capital. Even if the PPIF reaches the same leverage levels in quick order that the banks held the assets with, it induces volatility which in this environment will work against every goal they have.
There's also the valid question of direct injections and government guarantees to date being enough to restore normal bank functions. It's one thing to push banks closer to the cliff edge, but it's another if they aren't prepared to arrest a fall.
Meanwhile AIG keeps on ticking like a very expensive clock
The best thing the US financial sector can hope for right now is the demise of Britain's or Switzerland's financial sector.
Geithner did not provide enough "new information and maybe that is what the market doesn't like. There was a grand build-up, but content was not as dramatic," said Stephen Wood, senior portfolio strategist at Russell Investments in New York.
"There is an inability to price these assets in a way that is acceptable, so we're kind of where we were over a year ago."
Don't Cry for Me Tehachapi writes:
"CRAP is up 3.6% today."
sacre bleu
Merde!
MTHood are you channeling Tanta?
The Latest from Mish:
Wholesale Inventories, Sales Plunge
Time to change my rating there, ac.
ac writes:
Let me get this right.
With the new stimulus, the goobs have spent nearly $10.5 trillion.
Crickey, they should have paid everyone's mortgage off.
Would have made the banks whole AGAIN, since the money would go directly to mortgage payments.
Everyone would own, if for day before going back into debt, their house.
Banks would have had cash to start lending again.
Why wasn't this plan tried?
Probably because everybody who didn't have a mortgage would be rioting in the streets.
ac | 02.10.09 - 1:36 pm | #
While that may be true, at least their neighbors and their area would be made whole.
With the way this money is being spent only Wall Street is, which is why I still don't get how it is no one is rioting in the streets.
Ben B. said that they want to taxpayers the balance sheet, but "effectiveness of policy" would potentially trump that (pending review).
In other words, if the info can scare the public, they won't be allowed to see it?
Re: "Timmy... We have a problem"
ok, shoot...
Gene Sperling's computer was the one to publish the Financial Stability Fact Sheet if anyone cared
that should be "show the taxpayers the balance sheet"
Mr. Market is VEWY ANGWY
evil-
my guess is the UK is the fall guy. Bank holiday's are instituted caused by those "damn limey's"......
can't blame themselves...
Ciao
MS
Mr. Market is VEWY ANGWY
RockyR | 02.10.09 - 1:40 pm
LOL.
Finishing the thought.....
EvilHenryPaulson writes:
The best thing the US financial sector can hope for right now is the demise of Britain's or Switzerland's financial sector..... because it will promt us to get serious about nationalization?
The differences in the Senate and House bills don't matter. The Senate was only able to get the bill through by a whisker by making concessions to Republicans, while the House passed their bill easily (without any Republican votes). In order for the Senate to pass the conference bill, the bill will need to look almost identical to the Senate bill, otherwise 1 or more of the 3 Republicans who voted for the Senate bill will not support it. Thus, the Democrats' weakness in the Senate (due to the need for 60 votes to avoid a filibuster) means that the bill will be based on the Senate version.
this quick failure of the 10 day ema is a bit like early november.
that should frighten a few bulls.
Standard & Poor's Depositary Re ETF Chart - Yahoo! Finance
Paulson QA
C-SPAN2 Live Stream - C-SPAN
95% are over collateralized.
Prove it.
Show us the tables.
CDSwrites:
\t"MTHood are you channeling Tanta?"
Come on. I'm not worthy to fetch her bunny slippers.
query-
what I meant but failed to offer.
That's it in a nutshell.
Ciao
MS
I don't see how this can not end in bank nationalization.
Meanwhile AIG keeps on ticking like a very expensive clock EHP
an onion of a problem, restart securitization, unfreeze lending, what about those CDS, etc, etc.
Timmay: we are beginning to plan a plan about a plan which will plan a solution to the planning problem
WTF, what the F happened to a bank holiday? That was in the playbook, so I guess when this latest effort by Treasury fails, someone, like an Obama will have to get said book and grow a set of balls and then re-set the banking system. Obama needs to bypass the bullshit and just do this anyway and not let the clock tick down to the last two seconds of the game, because, what if the backup plan doesn't work and what if we continue to burn up trillion of dollars in a deflationary shitstorm, which places us in an even deeper black hole (yes there are deeper holes and darker places).
@WaitingInOC: Why is it that the Dems in Washington "get" the need to compromise to attract some republican votes in order to avoid government paralysis in time of dire need, but the Dems in Sacramento do not?
I'll say it again, one last time today: We didn't get in this mess with a plan and a plan will not get us out of this shitstorm.
"We have too much government. I say shrink the government and shut the freakin lights off in the government buildings permanently. You can't get greener that that."
Good luck.. by far the largest area of waste is the department of defense.... we could easily cut defense spending in half and be just fine.. but that seems to be completely impossible in our militaristically brainwashed culture
MS, query_tool
do you agree though, that a foreign financial center collapse would benefit the rest?
My thinking is that sure, banks in the US could be nailed by counterparty exposure -- but the federal government would eat those losses, somehow, it's not very divisive (call it some kind of super settlement swap line where the Fed is left holding the bag).
There will be a flight of capital (in my estimation) towards the US, and return of capital will carry a premium larger than return on capital
It's one way to grow market share, last one to drown on the sinking ship wins the hope diamond
I think our Goberment has a taint of Salmonella.
19-Sep-08 1,265.12
6-Feb-09 870.75
pretty safe to assume that trend will play out at a similar rate for the near future... that would take us down to the low 600 range by october
....pass the vaseoline
AMD is a hurtin' scooter today. I noticed they are looking for engineers, too. Rats deserting the ship? INTC tracking.
"last one to drown on the sinking ship wins the hope diamond"EHP
while sitting on the rearranged deck chairs
Often it's in the parasite's best interest to keep the host alive. Sometimes parasites can sense when the host has become so debilitated that its death is imminent. At that time, the parasite's best recourse is to plunder the host, hastening it's demise, converting host tissue into metabolic energy & propagules, in one last spate of reproductive activity. Appears to me that the parasitic puppetmasters who pull Obama's strings are sensing the imminent demise of the host society they feed on. The parasites appear to have adopted the strategy of grabbing all they can now, because they anticipate no future.
---Darwinsdog
Banks Rescue Will 'Make Things Worse': Rogers
Banks Rescue Will 'Make Things Worse': Rogers - Yahoo! Finance
But Rogers said Geithner, who was president of the New York Federal Reserve Bank, "has been dead wrong about everything for 15 years in a row," and so was President Barack Obama's economic advisor Lawrence Summers, who acted as Treasury Secretary at the turn of the century.
"It is mind-boggling to me," Rogers told "Squawk Box Europe."
"If I were on your show 15 weeks in a row and was wrong, you'd probably never invite me back. These guys have been wrong year after year after year consistently and here they are making the same mistakes again. This is not going to solve the problem, it's going to make it worse."
Also see for contrast: "Stimulus? The Dollar Is Toast" Says Harvard MBA Juan Enriquez
st...t_b_164878.html
Breaking News and Opinion on The Huffington Post
Said Enriquez: "We're living in a debt crisis not a liquidity crisis. The fundamental problem is too much debt. And now we're adding debt and adding debt and adding debt. We're adding that debt in places that are not going to generate more jobs or economic output."
What is critical here is to know that Enriquez isn't preaching pop-economics. Rather, he's presenting a deeply analytical and carefully researched argument. And with his triple threat background in business, economics, and science - he's got the processing power to actually lay out a cool and calculated argument that bears investigation. In his view, the stimulus is going to pour gasoline on the fire. Otherwise, in his words: "the Dollar is toast."
Background thread music....Very Fitting
YouTube - Taps Buglers at Arlington National Cemetery
Often it's in the parasite's best interest to keep the host alive
The US has a 40 foot tapeworn in the gut and it is named Wall Street. It gets longer day to day.
Wal-Mart Stores, Inc., began laying off 700 employees
http://www.nwaonline.net/articles/2009/02/10/news/021109azwalmartlayoffs.txt
So let me get this strait the layoffs are still coming in like a tidal wave, yet the government is trying to re inflate the bubble?....how do you get people to borrow and spend when they have no F****** money?....AM I MISSING SOMETHING HERE???????????
Re: pass the vaseoline
Wal-Mart is trying for the reduncancy rally, announcing 700-800 layoffs at HQ....
Who is going to force price concessions from vendors? Who is going to set prices? So many questions, so few dark overlords of capitalism.
CRbot(Irritating) writes:
\tThe Latest from Mish:
Wholesale Inventories, Sales Plunge
Time to change my rating there, ac.
CRBot you're the best!
There will be a flight of capital (in my estimation) towards the US, and return of capital will carry a premium larger than return on capital
It's one way to grow market share, last one to drown on the sinking ship wins the hope diamond
EvilHenryPaulson
.
Concur. Darwinian's survival of the species meets comet blast-- mass extinctions. The strongest countries/companies will survive. Social capitalism and/or market communism for all.
Bernanke: "Today, concerns about capital, asset quality, and credit risk continue to limit the willingness of many intermediaries to extend credit."
And how do you propose the government manipulate asset quality and credit risk, Ben?
So let me get this strait the layoffs are still coming in like a tidal wave, yet the government is trying to re inflate the bubble?....how do you get people to borrow and spend when they have no F****** money?....AM I MISSING SOMETHING HERE???????????
bfatz | 02.10.09 - 1:52 pm | #
No, that's pretty much the gist of it.
MS, query_tool
Do you think the Federal government can survive nationalization the largest bank's liabilities? They have separate standards of accounting, which is why FNM + FRE are in 'conservatorship' and AIG is below 80% owned in equity by the government
Wal-Mart Stores, Inc., began laying off 700 employees
the last lug nut spins off the speeding car going off the cliff
WMT also an interesting chart - think they just smoked the 61% fibonacci on last year's rally
RON PAUL IS UP!!
EvilHenry -- I only contribute here in a "what I'm seeing on the ground" sort of way.
I'd rather stay silent on the big global finance issues and appear to be ignorant than open my mouth and remove all doubt.
... didn't mean to hit publish there ...
It was one thing for Japan to keep zombie banks alive while the global economy was still strong. It was a much simpler problem when Sweden did it for Riksbank.
I would have to scratch my brain to think of a good comparison
RON PAUL IS UP!!
Mr. Beach | 02.10.09 - 1:55 pm | #
I can't bring myself to be excited for a man with two first names.
Wallmart laying off 800.. We have apocalypse.. S
GO RON PAUL!! FTW.
The report was apparently apocryphal. Feel free to correct me..
as long as the ex-employee's can use the cert to buy a honda, all will be good.
pseudo Bretton Woods. Transparency one thing, overstepping authority most dangerous.
Bingo. No check and balance on the monetary system. It is now the largest arm of Federal US government.
Bubake getting grilled!
Wisdom Seeker:
The Repubs in Washington are a little more diverse than the Repubs in CA. IIRC, all but 1 of the Senate Repubs in CA signed an oath of "no new taxes" (why they didn't learn from GWB's oath, I don't know). Thus, the CA Repubs are scared to go back on their oath and won't compromise with the Dems (who, for the most part, are not too keen on cutting spending). Add in that the Governor is a Repub but both houses in CA are controleld by the Dems, and that the Governor is not that strong politically (he's term-limited out after this term), compared to BA who is just freshly elected and his party has majorities in both houses. The result is a game of chicken because the CA Dems cannot get enough CA Repubs to go along unless there are major spending cuts (which will then cost Dem support), and CA is going down for the count.
The US has a 40 foot tapeworn in the gut and it is named Wall Street. It gets longer day to day.
JimPortlandOR
.
Eh, tapeworm? I had one once, as a kid. It doesn't actually eat much, and it's not like you can feel it wriggling in your gut. The metaphor I would use here is multiple chemical addictions: meth, heroin, alcohol. Timmy thinks we're so bad, the only hope is methadone.
Walmart has kept the 1235 folks doing anti-union tactics at HQ, so all is well.
Paul: "Wrices of houses should drop. we have 19m unoccupied houses...How long are we going to be locked in this idea that we're going to be price fixing."
Bernanke: "We're not trying to prop up the prices of houses."
BS.
Bernanke: "Today, concerns about capital, asset quality, and credit risk continue to limit the willingness of many intermediaries to extend credit."
And how do you propose the government manipulate asset quality and credit risk, Ben?
The last lug nut spins off the speeding car going off the
cliff...
You the typical Americans can sleep in the streets, as long as the Government survives and the shills who call the shots.
Ya I see this ending bloody...sorry to say.
Re: Wallmart laying off 800
What is that, like a tenth of 1% of the greeters?
Don't Cry for Me Tehachapi said: "pretty safe to assume that trend will play out at a similar rate for the near future... that would take us down to the low 600 range by october"
Myself, I wouldn't commit to a specific number or timeframe, but I do agree that the downtrend for the stock market has resumed.
The only "good" news is that long rates (like for 10-year Treasuries) might come down, easing mortgage rates.
Sebastia
Ah, remember PimPco head Bill Gross saying yesterday that mortgage rates are going to 4.5%, well look at the ten-year yield today at 1:50pmEST
2.8130% down 0.2%.
Coincidence?
As the physical economy has already been destroyed. We only have homes and financial community whose securities are derived on same. Killing either will reveal us for what we are. Banana plantation without bananas.
How does a retard like Maxine Waters get a seat on a financial services committee ?
An agreement on the "humane" treatment of home repossessions will be a key part of Ireland's recapitalisation deal with Allied Irish Banks and Bank of Ireland, the prime minister said on Tuesday.
"The whole purpose of discussions is to provide a reassurance to people ... that all those lending institutions will act in a humane and sensible way," Brian Cowen told parliament.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Those frinnging bankers are about to find out that the people are not going to be nearly as "humane" to them.
Repubs in CA signed an oath of "no new taxes" (why they didn't learn from GWB's oath, I don't know).
WaitingInOC | 02.10.09 - 1:58 pm | #
Wasn't that GHWB's oath?
Please do not compare banksters to parasites. Parasites rarely kill their hosts. Banksters on the other hand lack that foresight.
Compare them to nasty viruses, especially those that have not adjusted to their new host. Even viruses become far less virulent once they adapt to a new species.
Your worst nightmare : Maxine Waters in your wallet.
Eh, tapeworm? I had one once, as a kid. It doesn't actually eat much, and it's not like you can feel it wriggling in your gut.
scone | 02.10.09 - 1:58 pm | #
But at 40', you'd feel it hanging out your @$$
Think about it, every walmart has about 200 employees and they have 2 million employees and they are laying off 800 people? WTF, who cares?
The rest of the world must be LOL that the USA keeps bailing out Wall St crooks and gives tax credits to home builders so Americans can have a part of 'ownership society' and illusion of wealth.
S writes:
steve liesman is a total moron. the guy actually thinks he is saying something smart. Total idiot
S | 02.10.09 - 1:08 pm | #
Mrs. Liesman, please refrain from making these types of comments here.
No prefered shareholder wipe outs. No bondholder haircuts.
It's a taxpayer giveaway. What a swindle.
I'd like to hear a question about the massive increase in new reserves. Is this money printing?
I keep tapping the dial but the needle doesn't move. Think it's brokeded.
Bloomberg.com:
Personal Finance
Wow.. poor Paulson.. NOT
I LOVE IT!
Isn't Maxine Waters the lady who Loves the money fires
?
JIm Rogers said Geithner, who was president of the New York Federal Reserve Bank, "has been dead wrong about everything for 15 years in a row," and so was President Barack Obama's economic advisor Lawrence Summers, who acted as Treasury Secretary at the turn of the century.
"It is mind-boggling to me," Rogers told "Squawk Box Europe."
Re: How does a retard like Maxine Waters get a seat on a financial services committee ?
Alex, can I have bribes for $1000 please?
YouTube - Jeopardy! 3 way tie. First time ever. March 16 2007
xxxxx:
You're right, it was GHWB (not GWB). My bad. I was thinking of the right one in my mind, but used the wrong initials.
Only 2 more hours to go...can we get a down 500+ today? Pony up...I mean place your bets.
You're right, it was GHWB (not GWB). My bad. I was thinking of the right one in my mind, but used the wrong initials.
WaitingInOC | 02.10.09 - 2:06 pm | #
Only gets worse as you age
km4,
There are 2 major opinions as far as I can tell in the rest of the world
- Maybe the stimulus in the US will boost exports, hooray!
- They're done, that demand isn't coming back any time soon.
The former is the dominant one, while the latter is a minority opinion but growing as the impacts spread through trade.
Mark the date--
Republican Senators just voted 13:1 against nearly one-third of a trillion dollars in tax cuts.
Up is down, black is white, blah, blah, blah...
LOL -- executive air
Mark Fiore's Animated Cartoon Site
"You'd be on a watch list if you weren't the Federal Reserve"
Squirm
Wells Fargo's gift is intact in both the House and Senate versions, although it has been restricted from further use by banks. In other words, Congress is letting stand any bank mergers before Jan. 17 which might have relied on Treasury Notice 2008-83 which gave banks a pass on 382(
so they do not need to treat built-in losses from the acquired bank as belonging to the acquired bank pre-acquisition.
Search Results - THOMAS (Library of Congress)
SEC. 1281. CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON CERTAIN BUILT-IN LOSSES FOLLOWING AN OWNERSHIP CHANGE.
(a) Findings- Congress finds as follows:
(1) The delegation of authority to the Secretary of the Treasury under section 382(m) of the Internal Revenue Code of 1986 does not authorize the Secretary to provide exemptions or special rules that are restricted to particular industries or classes of taxpayers.
(2) Internal Revenue Service Notice 2008-83 is inconsistent with the congressional intent in enacting such section 382(m).
(3) The legal authority to prescribe Internal Revenue Service Notice 2008-83 is doubtful.
(4) However, as taxpayers should generally be able to rely on guidance issued by the Secretary of the Treasury legislation is necessary to clarify the force and effect of Internal Revenue Service Notice 2008-83 and restore the proper application under the Internal Revenue Code of 1986 of the limitation on built-in losses following an ownership change of a bank.
(b) Determination of Force and Effect of Internal Revenue Service Notice 2008-83 Exempting Banks From Limitation on Certain Built-in Losses Following Ownership Change-
(1) IN GENERAL- Internal Revenue Service Notice 2008-83--
(A) shall be deemed to have the force and effect of law with respect to any ownership change (as defined in section 382(g) of the Internal Revenue Code of 1986) occurring on or before January 16, 2009, and
(B) shall have no force or effect with respect to any ownership change after such date.
(2) BINDING CONTRACTS- Notwithstanding paragraph (1), Internal Revenue Service Notice 2008-83 shall have the force and effect of law with respect to any ownership change (as so defined) which occurs after January 16, 2009, if such change--
(A) is pursuant to a written binding contract entered into on or before such date, or
(B) is pursuant to a written agreement entered into on or before such date and such agreement was described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission required by reason of such ownership change.
It may be inappropriate to say it here, but: Go Ben! I disagree with his actions, but I think he's fully appreciative of what a preposterously bad situation this is. His facial expressions are priceless. I'll be the first man in line to buy his memoirs.
Bernanke: "There is no real bound" regarding the size of the Fed's balance sheet.
BS.
No bounds to the Fed's balance sheet. I feel more confident.
The rest of the world must be LOL
//////
most of the rest of the world has a tiny elite which owns and runs everything, so they're familiar with the process. they're probably a little depressed to see us go down that road, as well, however.
but, in any case, these are false distinctions. it's a small world, and almost everyone everywhere has a cousin in the USA these days. they don't want that cousin to lose his job.
Bernanke: Still looking to make money!!!
Raise interest rates? But you just committed to long term low interest rates.
The Fed IS the most dangerous counterparty in the world.
I thought his answer on balance sheet size was about right. They can't take on too much longer-dated debt because it exposes them to too much duration/inflation risk. He does consistently underestimate or minimize credit risk, though...
my thoughts on Timmy's plan cross posted from Zacks and also up on yahoo Finance:
The Financial Stability Plan (FSP) that was announced by Secretary of the Treasury Tim Geithner has some good elements in it, but is still lacking in specificity in a number of key areas. To see the fact sheet on the plan go to: http://www.financialstability.gov/docs/fact-sheet.pdf
Related Quotes
Symbol Price Change
BAC 5.74 -1.15
C 3.50 -0.45
CMA 15.99 -3.07
FITB 2.16 -0.73
KEY 7.03 -2.00
{"s" : "bac,c,cma,fitb,key","k" : "c10,l10,p20,t10","o" : "","j" : ""} Among the better aspects of the plan are rules that limit common dividends to no more than $0.01 per quarter for firms that receive exceptional assistance, although the definition of 'exceptional' was not specified. There is, however, a presumption that any bank receiving TARP 2.0 funds will also have their dividends restricted.
There are also restrictions on share repurchase and acquisitions, although exceptions might be made by the banking supervisors. I think that would mostly be in cases where the FDIC shuts down another bank and is looking for someone to take over the branches and deposits.
The compensation restrictions are disappointing since they appear to only cover a handful of the top executives, but the 'say on pay' shareholder votes are a good step, as is increased disclosure. Banks which receive money under the FSP will also have to work on foreclosure mitigation, under guidelines that the Treasury will issue. It would have been nice to have at least a rough outline of what those guidelines will be.
It also looks like there will be substantially increased transparency relative to TARP 1.0, but that is not a hard step to achieve. TARP 1.0 was about as transparent as a one-foot-thick lead wall -- not even Superman could have seen trough it. Banks will have to report to the Treasury how they are using the funds and what sorts of loans they are making. The government will then post much of that information on the web.
Perhaps the biggest part of the plan is a huge expansion of the Term Asset-backed securities Loan Facility, or TALF. The Treasury plans to inject $100 Billion of capital for this plan to the Fed, and that will then be leveraged 10:1. Where the Fed gets the other $900 billion is not specified, but the implication is that they will print it.
In essence, the Fed will start to play part of the role of a commercial bank, rather than a central bank with this step. It is taking on credit risk, although it will only be taking on newly packaged AAA portions of these pools of credit card, auto and small business credits.
Well, we have seen in the recent past just how useful the AAA, rating is, especially for asset-backed securities. Many of them took the AA 12-step program downgraded by 12 steps when they were faced with a higher power: the market.
The new TALF will also be expanded to include commercial real estate mortgage-backed securities. While this portion of the plan does involve a serious risk to the taxpayer, and taking on credit risk has always been a huge no-no in central banking, it should be fairly effective in getting credit flowing back to the real economy.
It is also envisioned that there will be a public-private partnership program where the Treasury invests side by side with private capital in buying the toxic assets that are currently on the banks' balance sheets, with the private sector part of the partnership determining the pricing of these assets.
In theory this sounds like a very good idea, but the devil is in the details, and there are few demons to be seen. This part of the program needs to be seriously fleshed out before we can tell how effective it will be.
All in all, the FSP seems to be more of a work in progress than a final plan, an outline at best. For now we would continue to avoid the banks, especially the mega banks like Citigroup (NYSE: C - News) and Bank of America (NYSE: BAC - News). We would also avoid most of the major regional banks like Key Corp (NYSE: KEY - News), Fifth Third (NasdaqGS: FITB - News) and Comerica (NYSE: CMA - News).
Here is your bound:
Bernanke #3: Federal Reserve Balance is Strong!
YouTube - Bernanke #3: Federal Reserve Balance is Strong!
February 10, 2009
Bernanke Federal Reserve Chairmain
House Financial Services
Federal Reserve Assistance to Financial Markets
No bounds to the Fed's balance sheet.
why doesn't the lad just mop up all the crap and be done with it?
price recognition holding him back?
That's huge news dfb
Re: Maxine Waters, searched her name and there is a youtube excerpt of ABC's nightline in late January featuring her phoning banks trying to get them to lower their monthly mortgage payments
Merket update
GoldmanSucks -6%
Just Print Money -7
Money Sucker -9
Burdon On Americans -18
Shittygroup -12
Worthless Frigging Company -13
just 6 years ago, paul and greenspan would go at it for well over a half hour.
i guess, these days, everyone has a few questions besides "gee sir may I have an autograph?"
"Bernanke #3: Federal Reserve Balance is Strong!"
It all depends on the definition of "strong."
OT- Has anyone noticed the exceptional volumes that correlate with the dramatic drops at that occurred at 11:09 EST, 11:31 EST, and 13:21 EST? Almost 10M shares at 11:09, and nearly as many at 11:31. It's almost as though some institutional investor was getting out of a sector or something, though admittedly I'm too new to this to be sure. I'm hoping someone else has a better idea of what's up. It doesn't seem like it could be bank stocks, since they've been hammered so bad that even steep drops don't add up dollarwise. Thoughts?
Oh man, that counterparty question would have been great if the Congresswoman had understood it and pressed it. There's some staffer somewhere whacking their head on their desk in frustration. AAAARGH!
"What happens if the Fed buys $X trillion in long-term bonds and interest rates go against the Fed. Would the Fed become insolvent if the value of its balance sheet goes negative?"
When the balance sheet is expanded by printing there are no liabilities created. Thus, insolvency is not possible. And more printing remains available.
ades writes:
From that amazon article: The Kulina are also known for their complex language. FUNAI studies show that Kulina women speak a completely different language from the men.
So just how does that differ from the U.S.?
it irks me too no end to hear repups speak in congress.. they sound so right... but they mostly clusterfucked your nation too the ground...
"It doesn't seem like it could be bank stocks"
so, you're underwhelmed with the quarter billion shares of xlf which have already been traded today?
the least they can do if they are going to screw us, is have the decency to take us out for a dinner & movie.
When the balance sheet is expanded by printing there are no liabilities created. Thus, insolvency is not possible. And more printing remains available.
Zephyr | 02.10.09 - 2:15 pm
Zephyr, I don't understand this.
Lets say the Fed prints $1T and buys $1T of long-term Treasuries at a 2.5% yield.
What happens if the market decides a few months later that long-term Treasuries really need to be at 3.5%.
Doesn't the Fed suddenly have a loss on its purchase of Treasuries?
because what everyone needs is more credit - and not just any credit, they need easy credit, 2005 credit, fog-a-mirror credit.
Yahoo headline that for once speaks volumes ...'Geithner unveils new bank bailout plan, short on details
Timmy's real plan:
CNN « Lolcats 'n' Funny Pictures of Cats – I Can Has Cheezburger?
America ...
1776-1965 : Triumph of the Republic
1966-2008 : Gilded Age/Decline of the Empire
2008-???? : Dictatorhship of the Whineacracy
"No longer frozen because of subprime mortgages and bad assets, but fear about where the economy is going." Bingo!! BRAVO! That's why this entire stupid comprehensive Geithner plan is so stupid! Ugh!
The Treasury plans to inject $100 Billion of capital for this plan to the Fed, and that will then be leveraged 10:1. Where the Fed gets the other $900 billion is not specified, but the implication is that they will print it.
Woah! I sure hope they don't print.
Re: "Bernanke: "There is no real bound" regarding the size of the Fed's balance sheet."
To me that means, infinite coordinates that can travel any direction, like a negative Treasury yield curve, but we have been through that with my alter ego's...
See: Fit Treasury yield curve with cubic polynomial
YouTube - Fit Treasury yield curve with cubic polynomial
All these boobs and retards have it their heads that the curve can't be negative ...
Never mind, Ben & Timmy have this all under control with distortion, collusion, corruption, piracy, fascism, etc...
IMHO, the S&P 500 will be a better buy at 500 than at 830.
Bernanke: "There is no real bound" regarding the size of the Fed's balance sheet.
I.E. no limit to the lies, deception, and scams we can flood this country with.
http://lolfed.com/wp-content/uploads/timtheplumber.jpg
New Thread: A suggestion for Balance Sheet Transparency and Disclosure ( 2 comments )
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"a better buy at 500 than at 830"
not if it goes to 150 year later
Holding hard at Dow 7925, refused multiple times
Re: Yahoo headline that for once speaks volumes ...'Geithner unveils new bank bailout plan, short on details'
Yah just gottah know, that Obama sent him out there, because no one has a plan or details and this is just a retarded dart toss without any objective or any way to account for what's going on. I hope and pray that Geithner's depends is full of crap and that Obama will become a raging maniac who will wake up to the bullshit and demand better for America! Is that being too optimistic with Obama... probably, I mean, it does like like they shitcanned Volker -- who was the final hope for us ... oh well
I am from Government and I am here to help ...
Mr. Market is VEWY ANGWY
RockyR
Who said that! I wanna know. Fudd is that you?
what a great day today I'm up 7% and am out!
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
@Mr. Beach "Lets say the Fed prints $1T and buys $1T of long-term Treasuries at a 2.5% yield.
What happens if the market decides a few months later that long-term Treasuries really need to be at 3.5%.
Doesn't the Fed suddenly have a loss on its purchase of Treasuries?"
I'm not the expert, but I think for outright electronic printing, the basic answer is no. The Fed's balance sheet gets smaller, but there's no "loss", because there's no offsetting term on the balance sheet to net against.
BTW, I think this is already effectively happening.
"It is mind-boggling to me," Rogers told "Squawk Box Europe."
"If I were on your show 15 weeks in a row and was wrong, you'd probably never invite me back. These guys have been wrong year after year after year consistently and here they are making the same mistakes again. This is not going to solve the problem, it's going to make it worse."
Not true, Larry Kudlow and Dennis Kneale are on all the time.
ew lows on SPY...let's see if its down we go.
"Doesn't the Fed suddenly have a loss on its purchase of Treasuries?"
Yes. But they were free because they bought them with printed money. So they lose some value but remain in positive territory.
and they are laying off 800 people? WTF, who cares?
I ♥ Timmy! | Homepage | 02.10.09 - 2:03 pm | #
Umm, maybe the 800?
Wow, a double-whammy today. Selling the news after buying the rumor on two events - stimulus passing and Tim's speech.
Might have been better for the markets to stagger these announcements.
Galbraith may have come up with it independently, but I have seen BARF before at least a dozen times online.
evil-
I agree with what you are saying however up until the point of driving money back here. I just don't see the mechanism for it. Why would you want to anyway?
IF it's purely a currency play I understand it but only from the point of exiting one and going to the other. That's the fallacy of FOREX they have to be somewhere and maybe the perception is that we suck less than then other options. I don't think you can really have a flow-back when all options are being destroyed in front of us.
Ciao
MS
I was scoffed at when I mentioned this. Then again, its about Florida.
nova | Homepage | 02.10.09 - 1:28 pm | #
A friend's dad works at our biggest gun shop & mentions hte same. Can't keep anything in stock. It's also where local cops shop too.