Jas Jain (and Meredith Whitney and any other doom/gloomers around),
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
So much of the dynamics seem to be driven by "behavior", not rational valuations. So, in the words of Barack, what if enough market participants decide to say "Yes, we can"?
What's to stop another epic run up in valuations from products with promises of outlandish returns (green energy, medical devices, etc.)?
Why are you so sure that people won't adapt and will sit on the sidelines while everything collapses towards 0?
In anticipation of those who say it's all about the credit (that's dried up), recall that plenty of dotcom crap was built with shoestring budgets.
Housing didn't require much by way of resources for the actual product. In both cases it was just the valuations that were high, not the raw costs.
If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
I agree that it wouldn't be sustainable and will deflate in a few years, but why on earth would you believe that people will tolerate a depression before having a go at that?
I agree. I worry about the same thing as well. Looking back in history, you can quite easily see that the country is founded on bubbles. Jumping from one bubble to the next is what gave us "growth". (Gold rush, Texas Oil rush, Railroad, Telephone mania, Internet mania)
Some of the bubbles are humongous if you measure them by their era, and the country is still around!
A raising tide lifts all boats. If we do get another bubble, a lot of the sins will wash away and the masses will forgive and forget the guilty. This is what the politicians are hoping for.
This is why if the powers that be starts a new mania, say stock market, it will short term solve a lot of problems and everyone will be rich and have jobs / contracts / incomes tied to that bubble. Even raw salary levels will raise. This is exceeding troubling to me, but also seems too likely.
Amen! Rode the bus with her down Lex one rainy day late last year. I almost stalked her. Christ! I said, "Meredith Whitney!" (Sharp, right?) And she said, "Uhhh?" Needless to say we chatted about the banking mess and her work and all I gotta say is that she is very, very nice and smart, too. And she rode the bus! (Well, it was impossible to get a cab, let's admit that, it was raining).
Go Meredith!
We need outrage in America over this crap. TPTB are just going to loot the treasury until they can't anymore. When will we stop it?
Can you spell....R E V O L U T I O N .
Der Einbruch bei den deutschen Exporten lässt die Wirtschaft in den kommenden Monaten voraussichtlich weiter schrumpfen.
Das Institut für Wirtschaftsforschung Halle (IWH) sagte gestern laut Mitteilung ein Minus des Bruttoinlandsprodukts von 4,8 Prozent voraus, das Deutsche Institut für Wirtschaftsforschung Berlin erwartet im ersten Quartal ein Schrumpfen um 2,2 Prozent.
Laut IWH hat der Einbruch der Weltkonjunktur im Winterhalbjahr den Exportweltmeister Deutschland viel stärker getroffen als noch zu Jahresende erwartet. Die konjunkturellen Aussichten für wichtige Handelspartner hätten sich weiter verschlechtert. Die Exporte werden nach Einschätzung des IWH daher im weiteren Jahresverlauf sinken. Unter dem Einbruch der Exporte leide zunächst vor allem die westdeutsche Wirtschaft, sagte IWH-Konjunkturexperte Udo Ludwig der AFP. Die Ost-Unternehmen seien hingegen weniger exportorientiert. Trotzdem könnte die Schwäche bei den Ausfuhren auch den Osten treffen - denn viele ostdeutsche Firmen beliefern Exportbetriebe im Westen.
Profitieren könnte Ostdeutschland laut Ludwig hingegen von seiner starken Konsumgüterindustrie. Bislang sind die Verbraucher nach den Lohnsteigerungen des vergangenen Jahres in Kauflaune
Meredith jumped the shark when she went on CNBC as a guest host. She is on a PR junkit to promote herself and her clients positions. She has been singing the same song for a couple years but really just parroting what her mentor at Frontpoint has been telling her. Frontpoint remains massively short financials. I dont believe anything anyone is saying in the public - they all have agendas. If you truly know you have the right positions you dont need to promote them. My guess is that Meredith will be spending a lot of time in front of the camera as thats probably what her hedgie clients want her to do....
no one is pricing in low, mid teens unemployment in any of their assumptions. So it is just a question of not if the banks need to raise capital, it’s when, and, you know, let’s get some capital back in the system by looking at who can provide it, like the local banks.
Good to know that the stress test sees a worst case scenario of 8.8% unemployment this year. Way to stress test them, Timmay!
I am watching the entire video. Meredith makes a good point in that the "Financial Services" industry was made unneccessarly complicated to justify fees.
I'm so tired of Hank Greenberg trying to defend his record as 'building' AIG and how this never would have happened under him. all obviously false.
that said he did bring up a good point... WHY IS AIG STILL WRITING CDS CONTRACTS? >:o
also:
I STILL don't understand:
why can't we terminate (for due cause obviously) EVERY AIGFP person and then immediately re-hire them? wouldn't that mean no bonus?
interestingly, the more I hear this interview, I'm interested in what Hank is saying.
He brings up the fact that AIG is only a conduit to shovel the money to the banks. >:o >:o >:o
There's a collusion between Wall Street and the regulators that jacks up fees. Wall Street likes securitization because it generates fees. So the regulators adopt rules that favor it. Everyone's happy, at least until we figure out what securitization has done to underwriting practices and leverage ratios.
BO says nice things out of one side of his mouth while his actions prove he not working for the general population but rather, is working for the big wig elites. BO has not thrown the people who elected him a single frikin bone even. BO can suck this.
I added more to my CR inspired story of the coming insanity, poverty, and bad food that we have to look forward to:
excerpt:
“Even Rome became unlivable for a time.” This still echoed in my head. The idea that the events happening now were comparable to the fall of Rome was a bit overwhelming to comprehend. Then again, why not? It was unfortunate that it happened while I was alive. Well, as my old supervisor used to say “Shit happens. Deal with it.”
This fiasco along with the ENTIRE AIG mess, Citibank, GM/Chrysler, TARP I, II, III, Stimulas Plans #1-8 (to be named later), Misc. Bailouts #1-?, are ALL examples of spending billions/trillions of dollars first before all sufficient data/research/investigation/homework is completed. This type of mental gyration is generally limited to "13-17 year old children" that are counselled as to unwise activities by responsible Mommies.
Where are the responsible Mommies for these adult children?
We have CRE and CC.
If Meredith is right, and I have no reason to doubt her, 12% of the GDP is local and state governments. If they stop funding new projects, and layoff staff, you get what? Maybe a 3%GDP hit? Added to whatevver else is happening at the same time?
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
Lack of confidence and revulsion. Remember a bubble is just a illusion of wealth that is traded for real wealth in order to effectively steal it.
People can only be robbed this way so many times before they learn their lesson or go totally bankrupt.
Well put. I wonder what happens when enough wealth ends up in the hands of a few, and the great unwashed reject that form of wealth and move on to something else in a barter economy? Could it happen, or does wealth equate to resources, and help keep them down?
It's called math...or more specifically the law of exponents. You see GDP must exceed debt service costs...ah, never mind, you won't understand anyway.
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
First of all, it is possible we'll have another bubble.
that said, many of us believe there was only 1 bubble, with 2 different manifestations.
that is to say we had ONE credit bubble with resultant equity and then real estate booms.
it is the credit bubble that is now bursting.
you could easily argue that instead we had an equity bubble (late 90's) and now a credit bubble. I would disagree with you. however it doesn't matter.
Equity bubbles are painful but surviveable because when the bubble pops you are left with NOTHING.
credit bubbles are devastating because when the bubble pops you are left with DEBT. (so you're left with NEGATIVE)
there were many people who saw their stock holdings go from 7 figures to 0. that was difficult without doubt.
but it's easier than this time when people see their assets go from 7 figures to NEGATIVE figures!
Attempt 2: We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
First of all, it is possible we'll have another bubble.
that said, many of us believe there was only 1 bubble, with 2 different manifestations.
that is to say we had ONE credit bubble with resultant equity and then real estate booms.
it is the credit bubble that is now bursting.
you could easily argue that instead we had an equity bubble (late 90's) and now a credit bubble. I would disagree with you. however it doesn't matter.
Equity bubbles are painful but surviveable because when the bubble pops you are left with NOTHING.
credit bubbles are devastating because when the bubble pops you are left with DEBT. (so you're left with NEGATIVE)
there were many people who saw their stock holdings go from 7 figures to 0. that was difficult without doubt.
but it's easier than this time when people see their assets go from 7 figures to NEGATIVE figures!
Just read Jesse's note on Citi shares called in by major brokerages. Am I to understand that that today's rise in C's price is the result of an announced deadline of 2:30 for return of shares lent for options trading?
If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
I agree that it wouldn't be sustainable and will deflate in a few years, but why on earth would you believe that people will tolerate a depression before having a go at that?
The problem here is that you're expecting people to work and invest their capital and get nothing in return.
Sure, in strict terms of economic activity it may be better than a depression, but because the activity is not productive you basically have people working for nothing.
This is the thing the Marxists can't seem to comprehend:
Most people don't like going to work, and most of all people don't like going to work and not getting paid.
Everybody I know would rather stay at home and play with their XBOX 360 or hang out on Facebook all day.
We are not a society of people lusting for work. We lust for the rewards of working.
Nobody is talking about what money is and how it is crated and who benefits the most from the system. Money is your labor in a commoditized form. Our money is created by borrowing your future labor and giving it to the banks,wall street and the government the right to spend it first causing you to pay more for those items and with you having to pay back the interest on it's creation. Are you poor yet? You will be. Your labor has been stolen for many years into the future.
Aren't local banks up to their eye balls in bad CRE loans? If you are going to recapitalize the banking system it might make sense to pump up local banks as opposed to the giant zombies but still, the locals aren't exactly the picture of health themselves.
In anticipation of those who say it's all about the credit (that's dried up), recall that plenty of dotcom crap was built with shoestring budgets.
it's not the credit. it's the debt.
If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
first: you haven't created "wealth" here, you've created money.
if that is your goal, why bother with all the middle steps? The Fed/Treasury/Mint could in theory just print $1,000,000 and give it to every person in America.
This would pay off everybody's debt. so people would own all their material goods free and clear.
but there's a problem with doing that. Do you see it?
FWIW: I fully anticipate that in the next few years we WILL see our governments "print" (bad word) our way out of this mess... but it will come at a severe cost.
Inflationary depression may not be much better than deflationary depression.
when people start to question the value of the currency things can get ugly.
see this video. Warning, it is honestly heartbreaking:
"We are not a society of people lusting for work. We lust for the rewards of working."
That was good AC. I may steal that
BTW, that's the allure of a bubble: You create fictional wealth and exchange it for real wealth.
You get the rewards of working that you lust for without doing the work!
Of course outrage and social upheaval occurs in the aftermath when the "victims" realize they have been working and getting paid with fake bubble wealth and have nothing to show for years of effort.
AC,
You are on to something. However, I don't think it is that most people don't like to go to work. I don't even think it is that most people feel they are paid too little.
What I think the case is, is this:
MOST PEOPLE WORK AT JOBS THAT MEANINGLESS!
Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes.
Heck, retirement. That's for suckers. Stay active, volunteer, take up a hobby.
The problem is that jobs like collecting trash or stray animlas are fine and dandy, but you are going to do that for 30-45 years. WOW! I am not putting those people down, just saying. Even my job as a librarian. People laugh when i say I'll put in 40-50 years.
And therin lies the problem. We have jobs that have no lasting impact on our lives. After 5-10 years burnout.
Teaching may be a job where the job itself is a reward, but even that has drawbacks, dep. on where you work!
My point is that we are not lazy, just working in a ratrace with no real payoff other than a check.
Reminder -- people paid to sit at desks often are in decent physical shape upon retirement.
People who actually did physical work all their life usually are physically worn out -- hips, knees, shoulders actually wear down when used for weight bearing exercise for many hours per day.
This is well documented.
Don't imagine your own experience is typical.
Look for facts.
Hymns for the Lord says:
Today, 12:58:43 PM
“Jas Jain (and Meredith Whitney and any other doom/gloomers around),
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
So much of the dynamics seem to be driven by "behavior", not rational valuations. So, in the words of Barack, what if enough market participants decide to say "Yes, we can"?
The suckers are too leveraged. Debt forgiveness would wipe out the big players, but continued debt slavery will leave the economy moribund for decades under the best scenario. To vested interests, the answer is clear. Hello late Ottoman Turkey.
Excuse me, but I think it was a NATTERING naiboob of negativity. According to Spiro Agnew. Remember him?
\
The hub ran & lost Md House of Representatives in 66 on the Agnew team. And even in the light of history he was the better candidate for governer. Which shows you how awful the other side was.
"If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
first: you haven't created "wealth" here, you've created money."
I think you are talking apples and oranges. We are currently dealing with the sudden withdrawal of "buying power" that resulted from hyper-leveraged loans. Maybe I'm just not fast enough, but it seems to me you first need to fill that hole before you worry about manufacturing "wealth out of thin air once again".
“YTL - I watched 3 minutes of it. Jeebus.
St John Bosco supposedly said "The road to hell is paved with priests skulls."
Yes. it is horrible. at 2:20 I cried. A little girl forced to walk across the country only to be beaten near to death by her grandmother... is is stories like these, the horror that we face if we blithely destroy our currency.
also: sorry for the multiple reposts... I think I've deleted most of them. hope none of you replied to the first few iterations!!!
Whitney has been pushing this idea of boosting local and regional banks, but I don't really understand what she means by that. Should the government just give them money? Should it invest, but not take an active role in management, or should it also require some level of lending, which would just transform the formerly good banks into bad bank. Not to say this is necessarily a terrible idea and certainly not that it's worse than what we're actually doing, but I don't get how it would work or why it's actually a good idea as opposed to less bad.
"Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes. "
"Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes. "
I just want a job that will actually let me use my brain. Unfortunately, playing dumb and being bored out of my mind has, thus far, paid much better.
BTW - Dodd tried to put in an amendment to stop the bonuses. Guess he knew it would look bad if they were looting too much.
and this is what he wrote:
"`(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary."
Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department.
"The O'Man is losing control, or at least the battle of media perception, of the situation. I hope I am wrong."
I think this was obvious the day after he prepared us for Geithner's "terrific" speech and Timmy barfed all over the floor and Obama never bothered to clean it up.
YTL, well that really depressed the hell out of me. That and Charlie Rose. I guess it is back to writing more doom fiction.
sorry. I did try to warn you all.
I get angry at my life sometimes, and then I watch that video. puts things in perspective. we've really got it good in America, even our poor for the most part.
All bubbles have ultimately provided a greater good for our country. The motivation to rush to these promised areas of riches have created infrastructure, technology and development that would have had far fewer gains without the impetus of promised wealth. Our country has been borne from bubble after bubble. The last great bubble of Treasuries and financial ledgermain have broken from previous bubbles by one simple fact; they are not based on a pursuit of a real resource. Instead they are based upon an idea, the faith and trust in the fiat currency of the USA. The corruption demonstrated in handling the economic "crisis" has sorely wounded the citizenry's belief and ability to partake in our flawed system. The new administrations unwillingness to recognize this fundamental turning away and take immediate action to rectify the loss of trust will be the final crack in the foundation of what we once were and hoped to provide for our future generations.
What bothers me in this power shift from the West to East is what dream will fill the vacuum. The past 200 years the USA has been the light the world flocked to in designing their own system or the place to escape to if they were able. The loss of this light for the world in the long term will prove to be the most damaging for mankind.
we was ready to roast you good Mr. Liddy and you drop this bombshell that Employees are starting to pay back their bonuses voluntarily -- why sir didn't you tell us in advance - we look like fools
As I've said above, I think we had 1 bubble not 2. but let's go with the idea that we have 2 bubbles (dot com then RE).
After the dot com bubble we could blow another one using the banks and their fractional reserve abilities. $1 in leads to $10 out. combine that with leverage through the shadow banking system and voila! you have a new bubble. Now you can't control where the bubble goes though... our leaders were trying to reflate teh stock market but we got RE instead.
fine.
now we have the 2nd bubble bursting. but it's a credit bubble, and by definition the banks are in the cross hairs.
thus the same mechanism is harder to achieve. the banks have too many holes and thus giving them $1 does NOT lead to $10 out. instead $1 in leads to $0 out.
the shadow banking system is also crippled right now. That system depends on "confidence" and "transparency", neither of which exist.
Thus, the govt is trying to pour money into the banks to act as a transmission system... but it's not working. THe shadow banking system is contracting due to opacity and mistrust...
there are things that could be done, but they are unpopular, especially with the ruling elite. one of them is Buiter's "GOOD BANK" idea, where you create (or split off from "legacy" banks) good banks that then are not capital restrained, and then the transmission procedure (fractional reserve) works again.
doing this though kills the legacy banks... and probably insurers and perhaps some municipalities as well. if you haven't noticed, they're pretty politically connected these days.
so it's not that we CAN'T blow another bubble... it's that it's easier said than done... and the way to do it is unpopular to the powers that be.
AC,
You are on to something. However, I don't think it is that most people don't like to go to work. I don't even think it is that most people feel they are paid too little.
What I think the case is, is this:
MOST PEOPLE WORK AT JOBS THAT MEANINGLESS!
Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes.
My theory is that humans are maladapted to the current industrial/institutional environment we're living in. I suspect a lot of people that hate having a desk job would be quite happy hunting rabbits for a living or something like that. We didn't evolve in the kind of environment we live in, so we have genetic programming that makes a lot of us miserable sitting at a desk all day.
I actually like the things I accomplish at work - I find the accomplishments fulfilling. But often I find the actual work painful. I've always struggled with the problem of not enjoying the things I want to be doing. So I drink a lot of coffee and it makes it a bit better.
I think it's sort of the cruel reality of living in a different world than the one in which we were made over the past few million years.
"Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department."
There is something rotten going on here, even beyond the normal rotten we have grown accustomed to. This is rotten more in the sense of a direct action by somebody in conference committee to redirect bailout money to cetain persons. It is too specific and too timely to not be deliberately targeted. The question is simple: it looks like the kind of thing that you get for a direct quid pro quo. So... who got paid?
I really don't see how that can be avoided at this point. We've been in a process of destroying it since at least the beginning of the eighties (some would say much further back)...it will take at least that long to repair and no one appears to be preparing the world for that kind of patience.
Amen to Meredith Whitney. Exactly. I propose further we invest (gain stock, etc in return) more capital in the best banks. That is, proportionally more capital to better banks, and proportionally less to badly managed banks (like Citi, i.e.--citi into receivership).
Just read Jesse's note on Citi shares called in by major brokerages. Am I to understand that that today's rise in C's price is the result of an announced deadline of 2:30 for return of shares lent for options trading?
Solid brass. Absolutely solid brass.
If that is indeed the case, wouldn't the share price drop like a rock a little after 2:30 as demand dries up and no shorts are there to cushion the fall?
It is not evolution per se. It is about creating systems that are based on reality and changing them as we change.
I however have no illusions about people doing the right thing fir the right reasons. Wars and crisis seem to be the only way most humans and institutions can change.
"Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department."
Did Dodd sign the bill? Did President Obama sign the bill? Did anyone friggin read the bill?
Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes.
Heck, retirement. That's for suckers. Stay active, volunteer, take up a hobby.
BTW I agree with what Marc Faber recently wrote: That the ultimate cause of the problems we have today are a lack of virtue and morality within our culture due to the singular focus on wealth accumulation as a society.
That said I don't conclude that the problem is capitalism (socialists and communists don't do any better) - I believe the problem is the view that capitalism and economic growth are the end goal, not merely the means.
Nor is anybody assessing business interuptions because of civil disobedience:
"A group of disgruntled workers at a recently closed auto parts supply company in Windsor, Ont. have taken over the plant.
In the latest bizarre twist in a saga that has been brewing since two auto plants in the area shut down early last week, about a dozen workers occupied the Aradco plant Tuesday night. They have welded the doors shut from the inside and say they will not leave until they get what they are owed."
Work at the Aradco plant stopped last week because of a dispute between the plant owners and Chrysler,
Sure, in strict terms of economic activity it may be better than a depression, but because the activity is not productive you basically have people working for nothing.
That's strange. Kitty ate my comment pointing to the BoD and Advisory committee at Peterson Institute.
Quote from Uncle Wiki:
"Debate with Peter Schiff
Was guest on On Point with Tom Ashbrook" Thursday, November 15, 2007 show titled Where’s the Economy Headed? In this show he debated Peter Schiff concerning the near future of the US economy. Rogoff praised the US financial and insurance sectors as well as the authorities regulating them. Referred to Schiff's arguments and warnings as "nonsense."
I pledge allegiance to the Fed of the United States of America, and to the Banks for which it stands: one ponzi under Congress, indivisible, with Liquidity and Solvency for all.
Fair Economist sed: Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department.
Oh, for the love of GAWD! Do you honestly believe for an instant that Dodd didn't know full well when he wrote his "amendment" [SPIT!] that the escape clause wasn't going to be added? Are we really a nation of such bovine stupidity and naivety that anyone, anyone,could pick through the rubble after being robbed blind and then spout such touchy-feely apologist claptrap in support of the robbers?
If so, Jas is far too kind. No wonder the greatest accomplishment of "democracy" is welfare and income tax. [SPIT!]
Nicely said. The one thing that I learned from the election of Obama is that the left is just as much of a bunch of suckers as the right. The problem is partisans in general as they buy into hook, line and sinker all of the failed ideas of thier respective leaders and become apologistas for corruption and failure when there team is in charge. It is very frusturating to watch.
I am starting to think that this entire 'crisis' is just another way for the government to steal hard working americans' money and redistributed it to the lazy government dependent dopes and the 'top 1% of americans'.
"I STILL don't understand:
why can't we terminate (for due cause obviously) EVERY AIGFP person and then immediately re-hire them? wouldn't that mean no bonus? "
Not really, depending on when the bonus was "earned" and due to payout. Many people who get RIF'ed still earn their bonus and get it due to the terms of the contract.
It's one thing to "ask" for bonuses back and another to ask for them back in a manner they know saying no is a really, really bad idea (i.e., security standing by, HR in the room with resignation papers ready for them to sign). Alternatively, they could have been asked to sign a new contract that made the bonuses null and void.
It's so simple that why didn't anybody think of it?
Fair Economist sed: Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department.
So the directive came from the executive branch of Obama's White house? Did Obama know? Did anyone in congress or the White house read the bill before signing it?
So the directive came from the executive branch of Obama's White house? Did Obama know? Did anyone in congress or the White house read the bill before signing it?
It wasn't a "directive", the choice was made by the conference committee. We could get the list of who was on it, but deliberations don't get into the Congressional record. Geithner and Summers were exerting pressure, which was reported in the news. Obama had to know, or if not, has not excuse for not knowing (it was in the news).
Congress knew, more or less, what changes had been made but this was the emergency stimulus legislation and nobody would dare hold it up over this. Besides, there was some kind of quid pro quo between administration and Congress over this. Welcome to sausagemaking.
Are not the local banks the same , if not worse than the money center banks? They are screwed with construction and development loans. Black Holes abound...watch your step. =-O
try this
The Federal Reserve surprised financial markets and committed to buy $300 billion in longer-term Treasurys to help the economy recover. The Fed was more pessimistic about the outlook, in a statement released after its two-day meeting. Officials removed language saying they expected the economy to recover later this year. The Fed tweaked its other credit-easing programs by committing to buy more mortgage-backed securities and agency debt and include more asset-backed securities under a new credit facility starting this week. The Fed repeated that deflation was a risk to the economy.
Mr. Liddy: Why does the American taxpayer have to have to pay counterparties, through your company, the likes of GS and others who made bad bets with AIG, and make them whole? Shouldn't GS and others take a haircut also?
Fed buying $300B -- like monkeys the market starts buying debt and the rates plunge on Q -- dollar tanks... at what point does the bond market just collapse can;t be long..
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First, to our sagacious, wise, and knowing benevolent benefactor and bestower of revealing financial charts adorned with red and blue lines: Please, for the love of your immortal God of mortals, can we keep the comment and layout changes to a minimum? I'm tired of whipping the code janitor, and may have to escalate to electroshock. If that's not possible, could you possibly give CRbot a 'heads up'?
Secondly, if you wish to have a online chat, I have graciously provided an IRC channel, which is a time tested, script kiddie abused method of chatting on the internet. It would not fail or falter due to CR's ability to generate immense traffic, and it has a web interface kindly produced by mibbit.com. If you do not wish to link to Mibbit IRC client widget then I can provide you with a direct link to mibbit.
Thirdly, to the rest of you humans, don't mistake my politeness for caring, feeling, empathy, or some other kind of worthless emotion.
Re: "committed to buy $300 billion in longer-term Treasurys"
Still trying to understand "monetization." Does this mean the FED just printed $300B? Or is there a multiplier? Or is this not printing at all? And is there any way to extrapolate the amount of inflation this $300B purchase is likely to foster?
Representative Gary Ackerman (D-NY) and
Rep Michael Capuano (D-MA) made fools of
thenselves at the AIG hearings just now.
Maybe they can't grasp the risk of AIG blowing up,
and the hyperlosses we would then be liable for.
The account managers they want to keep for wind-down,
using retention incentives ("bonuses"), usually can retire
rather than subject themselves and their families to threats
of harm, financial sacrifice, and missed opportunities.
I am starting to think that this entire 'crisis' is just another way for the government to steal hard working americans' money and redistributed it to the lazy who work the system through government programs and the 'top 1% of americans'.
"you would think that Congress could spare a few pesos for a decent word processor that tracks changes by user"
..... the Congressional Record can be changed after the fact. That and this Dodd Amendment BS leads me to believe that "accountability and responsibility" are not virtues or parts of the character makeup of many elected officials. Many of those same individuals are Committee Chairmen. Reading and thinking is also not a Congressional requirement.
"People who actually did physical work all their life usually are physically worn out -- hips, knees, shoulders actually wear down when used for weight bearing exercise for many hours per day."
I am one of them and miss physical work everyday. Paid to play was my job! :-$
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/8216722025033725754
me?
Jas Jain (and Meredith Whitney and any other doom/gloomers around),
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
So much of the dynamics seem to be driven by "behavior", not rational valuations. So, in the words of Barack, what if enough market participants decide to say "Yes, we can"?
What's to stop another epic run up in valuations from products with promises of outlandish returns (green energy, medical devices, etc.)?
Why are you so sure that people won't adapt and will sit on the sidelines while everything collapses towards 0?
In anticipation of those who say it's all about the credit (that's dried up), recall that plenty of dotcom crap was built with shoestring budgets.
Housing didn't require much by way of resources for the actual product. In both cases it was just the valuations that were high, not the raw costs.
If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
I agree that it wouldn't be sustainable and will deflate in a few years, but why on earth would you believe that people will tolerate a depression before having a go at that?
I agree. I worry about the same thing as well. Looking back in history, you can quite easily see that the country is founded on bubbles. Jumping from one bubble to the next is what gave us "growth". (Gold rush, Texas Oil rush, Railroad, Telephone mania, Internet mania)
Some of the bubbles are humongous if you measure them by their era, and the country is still around!
A raising tide lifts all boats. If we do get another bubble, a lot of the sins will wash away and the masses will forgive and forget the guilty. This is what the politicians are hoping for.
This is why if the powers that be starts a new mania, say stock market, it will short term solve a lot of problems and everyone will be rich and have jobs / contracts / incomes tied to that bubble. Even raw salary levels will raise. This is exceeding troubling to me, but also seems too likely.
God bless this woman.
Amen! Rode the bus with her down Lex one rainy day late last year. I almost stalked her. Christ! I said, "Meredith Whitney!" (Sharp, right?) And she said, "Uhhh?" Needless to say we chatted about the banking mess and her work and all I gotta say is that she is very, very nice and smart, too. And she rode the bus! (Well, it was impossible to get a cab, let's admit that, it was raining).
All priced in? Sure, it is.
She actually sees the big picture
Go Meredith!
We need outrage in America over this crap. TPTB are just going to loot the treasury until they can't anymore. When will we stop it?
Can you spell....R E V O L U T I O N .
The AIG bonues are probably the turning point for public sentiment and awareness.
hubba hubba
like the hair.. first!
Meredith reads The Onion
Oh, she's just another crackpot doomer. A niggling nayboob of negativity. It is a wonder she's made it this far in her career being such a pessimist!
/snark off
Raivo Pommer
raimo1@hot.ee
Wirtschaftkrise
Der Einbruch bei den deutschen Exporten lässt die Wirtschaft in den kommenden Monaten voraussichtlich weiter schrumpfen.
Das Institut für Wirtschaftsforschung Halle (IWH) sagte gestern laut Mitteilung ein Minus des Bruttoinlandsprodukts von 4,8 Prozent voraus, das Deutsche Institut für Wirtschaftsforschung Berlin erwartet im ersten Quartal ein Schrumpfen um 2,2 Prozent.
Laut IWH hat der Einbruch der Weltkonjunktur im Winterhalbjahr den Exportweltmeister Deutschland viel stärker getroffen als noch zu Jahresende erwartet. Die konjunkturellen Aussichten für wichtige Handelspartner hätten sich weiter verschlechtert. Die Exporte werden nach Einschätzung des IWH daher im weiteren Jahresverlauf sinken. Unter dem Einbruch der Exporte leide zunächst vor allem die westdeutsche Wirtschaft, sagte IWH-Konjunkturexperte Udo Ludwig der AFP. Die Ost-Unternehmen seien hingegen weniger exportorientiert. Trotzdem könnte die Schwäche bei den Ausfuhren auch den Osten treffen - denn viele ostdeutsche Firmen beliefern Exportbetriebe im Westen.
Profitieren könnte Ostdeutschland laut Ludwig hingegen von seiner starken Konsumgüterindustrie. Bislang sind die Verbraucher nach den Lohnsteigerungen des vergangenen Jahres in Kauflaune
The Latest from Jesse:
Brokers Recalling Loaned Shares in Citi
would explain some of the panic-buying in the Citi.
Meanwhile back on Mars.. Citi is up 20% today..
I'm sorry if this has been posted, but this includes a letter Timmay sent to Nancy Pelosi on AIG.
Geithner Caves On AIG Bonuses, Defends Liddy
Meredith jumped the shark when she went on CNBC as a guest host. She is on a PR junkit to promote herself and her clients positions. She has been singing the same song for a couple years but really just parroting what her mentor at Frontpoint has been telling her. Frontpoint remains massively short financials. I dont believe anything anyone is saying in the public - they all have agendas. If you truly know you have the right positions you dont need to promote them. My guess is that Meredith will be spending a lot of time in front of the camera as thats probably what her hedgie clients want her to do....
no one is pricing in low, mid teens unemployment in any of their assumptions. So it is just a question of not if the banks need to raise capital, it’s when, and, you know, let’s get some capital back in the system by looking at who can provide it, like the local banks.
Good to know that the stress test sees a worst case scenario of 8.8% unemployment this year. Way to stress test them, Timmay!
She was a head of the curve but shes no Ivy!
ades
Last I checked Brown was still Ivy
"Last I checked Brown was still Ivy"
he's not talking about her education. He means "Ivy Zellman" not "Ivy League".
good grief...... i've stumbled into the meredith whitney fan club
We could easily be at worst case unemployment stress levels next month.
We will go back to a time that was and not try to preserve a system that is and -- or was more recently and will never be again.
When I was on the board of this small community bank back in the 90's, we made good money. Why wasn't it enough?
Of course my friend, the old-timer who started the bank, lived a modest life, despite his wealth.
I sound like my father now. Nostalgic for the good old days. But maybe banking should just be a conservative, boring business.
This Dodd Amendment was HALO-IZED by CRbot.
I am watching the entire video. Meredith makes a good point in that the "Financial Services" industry was made unneccessarly complicated to justify fees.
I heart Meredith ... O:-)
"We will go back to a time that was and not try to preserve a system that is and -- or was more recently and will never be again."
I recently read that the Obama's are squares, like the Eisenhowers were. Those were prosperous times. Bring it on.
God I miss Tanta.
With all the uproar/outrage, I bet she would be writing some gems.
Yeah, me too. She taught me a LOT.
The Latest from Denninger:
Caution On Quantitative Easing (QE)
ot sure if this will go through but:
I'm so tired of Hank Greenberg trying to defend his record as 'building' AIG and how this never would have happened under him. all obviously false.
that said he did bring up a good point... WHY IS AIG STILL WRITING CDS CONTRACTS? >:o
also:
I STILL don't understand:
why can't we terminate (for due cause obviously) EVERY AIGFP person and then immediately re-hire them? wouldn't that mean no bonus?
interestingly, the more I hear this interview, I'm interested in what Hank is saying.
He brings up the fact that AIG is only a conduit to shovel the money to the banks. >:o >:o >:o
sheez. the nobel prize of evil. way to show some outrage, austan.
There's a collusion between Wall Street and the regulators that jacks up fees. Wall Street likes securitization because it generates fees. So the regulators adopt rules that favor it. Everyone's happy, at least until we figure out what securitization has done to underwriting practices and leverage ratios.
And from an unemployment perspective, no one is pricing in low, mid teens unemployment in any of their assumptions.
If we get 15% unemployment I'm calling it a depression. The 1893 downturn was labeled a depression with unemployment rates estimated around 12%-17%.
If we see 14% unemployment, nobody is seriously going to be calling it just a "recession".
U3, U6, I thought we were already there;)
BO says nice things out of one side of his mouth while his actions prove he not working for the general population but rather, is working for the big wig elites. BO has not thrown the people who elected him a single frikin bone even. BO can suck this.
Chris Dodd and B Obama top recipients of AIG contributions. O:-)
Chris Dodd maybe, but I don't believe Obama accepted their money.
Nobody here believes them. Here's a better link:
Top Industries Giving to Members of Congress, 2010 Cycle | OpenSecrets
Bulshit BO! Where did the 100Billion go? GS price should be 2 at this point, not 90 on the tax payer dime. FU BO.
If the gov is afraid of a popular revolt - they better strap themselves i
Bonuses are just "earmarks" in the private sector...let's move on, Barney and friends.
Found it interesting that Madoff's first "accountant", Jerome Horowitz, died March 12, the same day Madoff was sent to the pokey. Weird{?}
OB's Your Daily Obama show and on Leno to night may just let him pass Oprah in the ratings!
Local and State Gov is 12% of GDP?????????????
40 states are underfunded...
Most of America is not smart enough to be mad, little own revolt!
Gretchen says wait for CRE and CC to drop
Hank sez it's time to to buy life insurance
The elites are taking this opportunity to sell off precious metals. Back up the truck. The price is right.
I take credit for FUBO!
I added more to my CR inspired story of the coming insanity, poverty, and bad food that we have to look forward to:
excerpt:
“Even Rome became unlivable for a time.” This still echoed in my head. The idea that the events happening now were comparable to the fall of Rome was a bit overwhelming to comprehend. Then again, why not? It was unfortunate that it happened while I was alive. Well, as my old supervisor used to say “Shit happens. Deal with it.”
more at: 401 Authorization Required
This fiasco along with the ENTIRE AIG mess, Citibank, GM/Chrysler, TARP I, II, III, Stimulas Plans #1-8 (to be named later), Misc. Bailouts #1-?, are ALL examples of spending billions/trillions of dollars first before all sufficient data/research/investigation/homework is completed. This type of mental gyration is generally limited to "13-17 year old children" that are counselled as to unwise activities by responsible Mommies.
Where are the responsible Mommies for these adult children?
Exactamundo.
We have CRE and CC.
If Meredith is right, and I have no reason to doubt her, 12% of the GDP is local and state governments. If they stop funding new projects, and layoff staff, you get what? Maybe a 3%GDP hit? Added to whatevver else is happening at the same time?
Where are the responsible Mommies for these adult children?
Getting pedicures.
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
Lack of confidence and revulsion. Remember a bubble is just a illusion of wealth that is traded for real wealth in order to effectively steal it.
People can only be robbed this way so many times before they learn their lesson or go totally bankrupt.
Well put. I wonder what happens when enough wealth ends up in the hands of a few, and the great unwashed reject that form of wealth and move on to something else in a barter economy? Could it happen, or does wealth equate to resources, and help keep them down?
The Latest from Jesse:
The Hypocrisy of Barack Obama and Christopher Dodd
Would it not be simpler to not have bonuses in the form of, you cooperate in rectifying this mess and your bonus will be no jail time! =-O
Hymns for the Lord,
It's called math...or more specifically the law of exponents. You see GDP must exceed debt service costs...ah, never mind, you won't understand anyway.
Give it a go trust me some here will understand...me being one.
The Latest from Jesse:
The Hypocrisy of Barack Obama and Christopher Dodd
Ooooo... that's really, really looks bad. I wasn't aware of that "Dodd Amendment".
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
First of all, it is possible we'll have another bubble.
that said, many of us believe there was only 1 bubble, with 2 different manifestations.
that is to say we had ONE credit bubble with resultant equity and then real estate booms.
it is the credit bubble that is now bursting.
you could easily argue that instead we had an equity bubble (late 90's) and now a credit bubble. I would disagree with you. however it doesn't matter.
Equity bubbles are painful but surviveable because when the bubble pops you are left with NOTHING.
credit bubbles are devastating because when the bubble pops you are left with DEBT. (so you're left with NEGATIVE)
there were many people who saw their stock holdings go from 7 figures to 0. that was difficult without doubt.
but it's easier than this time when people see their assets go from 7 figures to NEGATIVE figures!
The O'Man is losing control, or at least the battle of media perception, of the situation. I hope I am wrong.
FUBO = F@ck You Barack Obama
Chris Dodd maybe, but I don't believe Obama accepted their money.
Senate\tDodd, Chris\t$103,100
Senate\tObama, Barack\t$101,332
Senate\tMcCain, John\t$59,499
Senate\tClinton, Hillary\t$35,965
Senate\tBaucus, Max\t$24,750
Presidential\tRomney, Mitt\t$20,850
Senate\tBiden, Joseph R Jr\t$19,975
House\tLarson, John B\t$19,750
Senate\tSununu, John E\t$18,500
Presidential\tGiuliani, Rudolph W\t$13,200
House\tKanjorski, Paul E\t$12,000
Senate\tDurbin, Dick\t$11,000
House\tPerlmutter, Edwin G\t$10,500
House\tRangel, Charles B\t$9,000
Presidential\tEdwards, John\t$7,850
Senate\tCorker, Bob\t$7,400
House\tSmith, Chris\t$6,900
House\tNeal, Richard E\t$6,500
Senate\tRockefeller, Jay\t$6,500
Senate\tReed, Jack\t$6,000
AIG: Recipients | OpenSecrets
Anyone can toss together a list. I'll believe it when the president indicates he received the alleged money.
Wrong! BHO was top recipient in the majority of industries, including finance:
Top Industries Giving to Members of Congress, 2010 Cycle | OpenSecrets
Attempt 2:
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
First of all, it is possible we'll have another bubble.
that said, many of us believe there was only 1 bubble, with 2 different manifestations.
that is to say we had ONE credit bubble with resultant equity and then real estate booms.
it is the credit bubble that is now bursting.
you could easily argue that instead we had an equity bubble (late 90's) and now a credit bubble. I would disagree with you. however it doesn't matter.
Equity bubbles are painful but surviveable because when the bubble pops you are left with NOTHING.
credit bubbles are devastating because when the bubble pops you are left with DEBT. (so you're left with NEGATIVE)
there were many people who saw their stock holdings go from 7 figures to 0. that was difficult without doubt.
but it's easier than this time when people see their assets go from 7 figures to NEGATIVE figures!
Just read Jesse's note on Citi shares called in by major brokerages. Am I to understand that that today's rise in C's price is the result of an announced deadline of 2:30 for return of shares lent for options trading?
Solid brass. Absolutely solid brass.
Michael,
88?
Yes.
Meaning, Untouchable.
Booooyaaaaaa aaaaahhahahhaha
citi chant citi chant citi chant
be a player!
When will we be throwing bad money down black holes??
We are going to Kermit Town.
If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
I agree that it wouldn't be sustainable and will deflate in a few years, but why on earth would you believe that people will tolerate a depression before having a go at that?
The problem here is that you're expecting people to work and invest their capital and get nothing in return.
Sure, in strict terms of economic activity it may be better than a depression, but because the activity is not productive you basically have people working for nothing.
This is the thing the Marxists can't seem to comprehend:
Most people don't like going to work, and most of all people don't like going to work and not getting paid.
Everybody I know would rather stay at home and play with their XBOX 360 or hang out on Facebook all day.
We are not a society of people lusting for work. We lust for the rewards of working.
pardon the sputtering. too many 'thats'.
Show me the monkey.
We are not a society of people lusting for work. We lust for the rewards of working.
That was good AC. I may steal that
I second that.
Nobody is talking about what money is and how it is crated and who benefits the most from the system. Money is your labor in a commoditized form. Our money is created by borrowing your future labor and giving it to the banks,wall street and the government the right to spend it first causing you to pay more for those items and with you having to pay back the interest on it's creation. Are you poor yet? You will be. Your labor has been stolen for many years into the future.
YouTube - Money As Debt (1 of 5)
[We could easily be at worst case unemployment stress levels next month]
Oh yeah! Bubble economy had bubble employment. What's so hard to understand about that, timmay ?
How do we reach full employment (4% UE) with a hollowed out shell of an economy?
This is all part of the super secret plan (SSP) to clean up wallstreet. YES WE CAN!!
dollar looks to be telling us that the recent equity celebration may be over for a good while....
We may have a true double top as we slip through 1,3,6 month averages...as well as one year from my data...
any thoughts on this...it's a very important development IMHO...
Aren't local banks up to their eye balls in bad CRE loans? If you are going to recapitalize the banking system it might make sense to pump up local banks as opposed to the giant zombies but still, the locals aren't exactly the picture of health themselves.
In anticipation of those who say it's all about the credit (that's dried up), recall that plenty of dotcom crap was built with shoestring budgets.
it's not the credit. it's the debt.
If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
first: you haven't created "wealth" here, you've created money.
if that is your goal, why bother with all the middle steps? The Fed/Treasury/Mint could in theory just print $1,000,000 and give it to every person in America.
This would pay off everybody's debt. so people would own all their material goods free and clear.
but there's a problem with doing that. Do you see it?
FWIW: I fully anticipate that in the next few years we WILL see our governments "print" (bad word) our way out of this mess... but it will come at a severe cost.
Inflationary depression may not be much better than deflationary depression.
when people start to question the value of the currency things can get ugly.
see this video. Warning, it is honestly heartbreaking:
Zimbabwe NO GOLD, NO FOOD "COMING TO AMERICA" The real ... Video
YTL - I watched 3 minutes of it. Jeebus.
St John Bosco supposedly said "The road to hell is paved with priests skulls."
I hope at the end of the road to hell, after the skulls, all the light is provided by eternaly burning bankers.
So the refutation proving there cannot be another bubble is "math" and the "law of exponents"? Maybe you should at least try to explain a little.
If you could find it within yourself to descend to the level of us mere mortals for a paragraph or two.
Read Denninger and you will get it. I don't have patience for explaining this stuff anymore. been monitoring this for years now.
"We are not a society of people lusting for work. We lust for the rewards of working."
That was good AC. I may steal that
BTW, that's the allure of a bubble: You create fictional wealth and exchange it for real wealth.
You get the rewards of working that you lust for without doing the work!
Of course outrage and social upheaval occurs in the aftermath when the "victims" realize they have been working and getting paid with fake bubble wealth and have nothing to show for years of effort.
"most of all people don't like going to work and not getting paid"
That's why we have a credit system.
To trick people into working for nothing.
That's why you need a police state.
To protect tricksters from the result of their actions.
"That's why we have a credit system.
To trick people into working for nothing.
That's why you need a police state.
To protect tricksters from the result of their actions"
Damn Broward....that is good stuff there.
AC,
You are on to something. However, I don't think it is that most people don't like to go to work. I don't even think it is that most people feel they are paid too little.
What I think the case is, is this:
MOST PEOPLE WORK AT JOBS THAT MEANINGLESS!
Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes.
Heck, retirement. That's for suckers. Stay active, volunteer, take up a hobby.
The problem is that jobs like collecting trash or stray animlas are fine and dandy, but you are going to do that for 30-45 years. WOW! I am not putting those people down, just saying. Even my job as a librarian. People laugh when i say I'll put in 40-50 years.
And therin lies the problem. We have jobs that have no lasting impact on our lives. After 5-10 years burnout.
Teaching may be a job where the job itself is a reward, but even that has drawbacks, dep. on where you work!
My point is that we are not lazy, just working in a ratrace with no real payoff other than a check.
Not really good long term!
Reminder -- people paid to sit at desks often are in decent physical shape upon retirement.
People who actually did physical work all their life usually are physically worn out -- hips, knees, shoulders actually wear down when used for weight bearing exercise for many hours per day.
This is well documented.
Don't imagine your own experience is typical.
Look for facts.
BTW - Dodd tried to put in an amendment to stop the bonuses. Guess he knew it would look bad if they were looting too much.
Hymns for the Lord says:
Today, 12:58:43 PM
“Jas Jain (and Meredith Whitney and any other doom/gloomers around),
We had two huge bubbles as evidenced by the stock market charts of the last few decades. What prevents a third from occurring immediately on the heels of the last two?
So much of the dynamics seem to be driven by "behavior", not rational valuations. So, in the words of Barack, what if enough market participants decide to say "Yes, we can"?
The suckers are too leveraged. Debt forgiveness would wipe out the big players, but continued debt slavery will leave the economy moribund for decades under the best scenario. To vested interests, the answer is clear. Hello late Ottoman Turkey.
Excuse me, but I think it was a NATTERING naiboob of negativity. According to Spiro Agnew. Remember him?
\
The hub ran & lost Md House of Representatives in 66 on the Agnew team. And even in the light of history he was the better candidate for governer. Which shows you how awful the other side was.
"If enough banks made loans to venture capitalists who invested in green companies/whatever, then sold them through IPO's to the public who then bid them up to ridiculous prices by selling the shares to each other, they could manufacture plenty of wealth out of thin air once again.
first: you haven't created "wealth" here, you've created money."
I think you are talking apples and oranges. We are currently dealing with the sudden withdrawal of "buying power" that resulted from hyper-leveraged loans. Maybe I'm just not fast enough, but it seems to me you first need to fill that hole before you worry about manufacturing "wealth out of thin air once again".
“YTL - I watched 3 minutes of it. Jeebus.
St John Bosco supposedly said "The road to hell is paved with priests skulls."
Yes. it is horrible. at 2:20 I cried. A little girl forced to walk across the country only to be beaten near to death by her grandmother... is is stories like these, the horror that we face if we blithely destroy our currency.
also: sorry for the multiple reposts... I think I've deleted most of them. hope none of you replied to the first few iterations!!!
here's Liddy Live
AIG Puts Headquarters on Sales Block
YTL, well that really depressed the hell out of me. That and Charlie Rose. I guess it is back to writing more doom fiction.
Whitney has been pushing this idea of boosting local and regional banks, but I don't really understand what she means by that. Should the government just give them money? Should it invest, but not take an active role in management, or should it also require some level of lending, which would just transform the formerly good banks into bad bank. Not to say this is necessarily a terrible idea and certainly not that it's worse than what we're actually doing, but I don't get how it would work or why it's actually a good idea as opposed to less bad.
But Senator I did submit the letter - Halo must have eaten it.
"Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes. "
Yes, of course.
"Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes. "
I just want a job that will actually let me use my brain. Unfortunately, playing dumb and being bored out of my mind has, thus far, paid much better.
/sigh
brokers must be calling BAC shares as well.
BTW - Dodd tried to put in an amendment to stop the bonuses. Guess he knew it would look bad if they were looting too much.
and this is what he wrote:
"`(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary."
Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department.
Oooh, SKF approaching buy territories.
"The O'Man is losing control, or at least the battle of media perception, of the situation. I hope I am wrong."
I think this was obvious the day after he prepared us for Geithner's "terrific" speech and Timmy barfed all over the floor and Obama never bothered to clean it up.
YTL, well that really depressed the hell out of me. That and Charlie Rose. I guess it is back to writing more doom fiction.
sorry. I did try to warn you all.
I get angry at my life sometimes, and then I watch that video. puts things in perspective. we've really got it good in America, even our poor for the most part.
I hope and pray we don't destroy our currency.
All bubbles have ultimately provided a greater good for our country. The motivation to rush to these promised areas of riches have created infrastructure, technology and development that would have had far fewer gains without the impetus of promised wealth. Our country has been borne from bubble after bubble. The last great bubble of Treasuries and financial ledgermain have broken from previous bubbles by one simple fact; they are not based on a pursuit of a real resource. Instead they are based upon an idea, the faith and trust in the fiat currency of the USA. The corruption demonstrated in handling the economic "crisis" has sorely wounded the citizenry's belief and ability to partake in our flawed system. The new administrations unwillingness to recognize this fundamental turning away and take immediate action to rectify the loss of trust will be the final crack in the foundation of what we once were and hoped to provide for our future generations.
What bothers me in this power shift from the West to East is what dream will fill the vacuum. The past 200 years the USA has been the light the world flocked to in designing their own system or the place to escape to if they were able. The loss of this light for the world in the long term will prove to be the most damaging for mankind.
Liddy:
How about if we give half of the bonus money back...would that be okay
we was ready to roast you good Mr. Liddy and you drop this bombshell that Employees are starting to pay back their bonuses voluntarily -- why sir didn't you tell us in advance - we look like fools
going back to Hymns for the Lord's question...
I think they ARE trying to blow another bubble...
the problem of course is how to do it?
As I've said above, I think we had 1 bubble not 2. but let's go with the idea that we have 2 bubbles (dot com then RE).
After the dot com bubble we could blow another one using the banks and their fractional reserve abilities. $1 in leads to $10 out. combine that with leverage through the shadow banking system and voila! you have a new bubble. Now you can't control where the bubble goes though... our leaders were trying to reflate teh stock market but we got RE instead.
fine.
now we have the 2nd bubble bursting. but it's a credit bubble, and by definition the banks are in the cross hairs.
thus the same mechanism is harder to achieve. the banks have too many holes and thus giving them $1 does NOT lead to $10 out. instead $1 in leads to $0 out.
the shadow banking system is also crippled right now. That system depends on "confidence" and "transparency", neither of which exist.
Thus, the govt is trying to pour money into the banks to act as a transmission system... but it's not working. THe shadow banking system is contracting due to opacity and mistrust...
there are things that could be done, but they are unpopular, especially with the ruling elite. one of them is Buiter's "GOOD BANK" idea, where you create (or split off from "legacy" banks) good banks that then are not capital restrained, and then the transmission procedure (fractional reserve) works again.
doing this though kills the legacy banks... and probably insurers and perhaps some municipalities as well. if you haven't noticed, they're pretty politically connected these days.
so it's not that we CAN'T blow another bubble... it's that it's easier said than done... and the way to do it is unpopular to the powers that be.
thoughts? (I sorta just rambled).
@ YTL
Good summary.
Holy Moses, smell the Roses... does this mean it was Peterson Institute that was funding Roubini all this time?
RGE - RGE Launches the Peterson Institute for International Economics Monitor
AC,
You are on to something. However, I don't think it is that most people don't like to go to work. I don't even think it is that most people feel they are paid too little.
What I think the case is, is this:
MOST PEOPLE WORK AT JOBS THAT MEANINGLESS!
Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes.
My theory is that humans are maladapted to the current industrial/institutional environment we're living in. I suspect a lot of people that hate having a desk job would be quite happy hunting rabbits for a living or something like that. We didn't evolve in the kind of environment we live in, so we have genetic programming that makes a lot of us miserable sitting at a desk all day.
I actually like the things I accomplish at work - I find the accomplishments fulfilling. But often I find the actual work painful. I've always struggled with the problem of not enjoying the things I want to be doing. So I drink a lot of coffee and it makes it a bit better.
I think it's sort of the cruel reality of living in a different world than the one in which we were made over the past few million years.
Michael, Michael, take your obsenities elsewhere. You have no manners at all.
This mess requires manners be set aside.
"Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department."
There is something rotten going on here, even beyond the normal rotten we have grown accustomed to. This is rotten more in the sense of a direct action by somebody in conference committee to redirect bailout money to cetain persons. It is too specific and too timely to not be deliberately targeted. The question is simple: it looks like the kind of thing that you get for a direct quid pro quo. So... who got paid?
"I hope and pray we don't destroy our currency."
I really don't see how that can be avoided at this point. We've been in a process of destroying it since at least the beginning of the eighties (some would say much further back)...it will take at least that long to repair and no one appears to be preparing the world for that kind of patience.
The text of the original Dodd amendment is here (pdf warning) towards the end of the page.
Fed must have an April Fools present for us. Standby for news.
you would think that Congress could spare a few pesos for a decent word processor that tracks changes by user
Pete "Petros" Peterson
Peter George Peterso - Wikipedia, the free encyclopedia
Amen to Meredith Whitney. Exactly. I propose further we invest (gain stock, etc in return) more capital in the best banks. That is, proportionally more capital to better banks, and proportionally less to badly managed banks (like Citi, i.e.--citi into receivership).
Finding the Dream: What to Do about Banks
Just read Jesse's note on Citi shares called in by major brokerages. Am I to understand that that today's rise in C's price is the result of an announced deadline of 2:30 for return of shares lent for options trading?
Solid brass. Absolutely solid brass.
If that is indeed the case, wouldn't the share price drop like a rock a little after 2:30 as demand dries up and no shorts are there to cushion the fall?
wally: somebody here already linked to where Dodd and Obama both got big campaign money form AIG.
go pink ladies...free speech....barney frank needs to think about hari kari too...
Ac,
It is not evolution per se. It is about creating systems that are based on reality and changing them as we change.
I however have no illusions about people doing the right thing fir the right reasons. Wars and crisis seem to be the only way most humans and institutions can change.
"Excuse me, but I think it was a NATTERING naiboob of negativity. According to Spiro Agnew. Remember him? "
NATTERING! Thanks
I'm too young to "remember" Agnew. Only know of him what I've read.
"Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department."
Did Dodd sign the bill? Did President Obama sign the bill? Did anyone friggin read the bill?
Yes Yes and No - because the link keeps expiring
Look, I don't want to bring spirituality into this forum, but I think most people want a job that helps someone else, really helps another, and pays them a liveable wage with health care benes.
Heck, retirement. That's for suckers. Stay active, volunteer, take up a hobby.
BTW I agree with what Marc Faber recently wrote: That the ultimate cause of the problems we have today are a lack of virtue and morality within our culture due to the singular focus on wealth accumulation as a society.
That said I don't conclude that the problem is capitalism (socialists and communists don't do any better) - I believe the problem is the view that capitalism and economic growth are the end goal, not merely the means.
Nor is anybody assessing business interuptions because of civil disobedience:
"A group of disgruntled workers at a recently closed auto parts supply company in Windsor, Ont. have taken over the plant.
In the latest bizarre twist in a saga that has been brewing since two auto plants in the area shut down early last week, about a dozen workers occupied the Aradco plant Tuesday night. They have welded the doors shut from the inside and say they will not leave until they get what they are owed."
Work at the Aradco plant stopped last week because of a dispute between the plant owners and Chrysler,
Barney wants the names and addresses of those who got the bonuses.
Fair Economist: Thanks for clearing that up. Lots of propaganda has been making its way onto these threads lately.
ac says,
Sure, in strict terms of economic activity it may be better than a depression, but because the activity is not productive you basically have people working for nothing.
And people were worried about earmarks.
That's strange. Kitty ate my comment pointing to the BoD and Advisory committee at Peterson Institute.
Quote from Uncle Wiki:
"Debate with Peter Schiff
Was guest on On Point with Tom Ashbrook" Thursday, November 15, 2007 show titled Where’s the Economy Headed? In this show he debated Peter Schiff concerning the near future of the US economy. Rogoff praised the US financial and insurance sectors as well as the authorities regulating them. Referred to Schiff's arguments and warnings as "nonsense."
I pledge allegiance to the Fed of the United States of America, and to the Banks for which it stands: one ponzi under Congress, indivisible, with Liquidity and Solvency for all.
Fair Economist sed: Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department.
Oh, for the love of GAWD! Do you honestly believe for an instant that Dodd didn't know full well when he wrote his "amendment" [SPIT!] that the escape clause wasn't going to be added? Are we really a nation of such bovine stupidity and naivety that anyone, anyone,could pick through the rubble after being robbed blind and then spout such touchy-feely apologist claptrap in support of the robbers?
If so, Jas is far too kind. No wonder the greatest accomplishment of "democracy" is welfare and income tax. [SPIT!]
@ Publius13
Nicely said. The one thing that I learned from the election of Obama is that the left is just as much of a bunch of suckers as the right. The problem is partisans in general as they buy into hook, line and sinker all of the failed ideas of thier respective leaders and become apologistas for corruption and failure when there team is in charge. It is very frusturating to watch.
The superslowness is annoying. Is it just me and my computer or everyone?
Well we can go on strike and refuse to work, except in our own gardens. Now who suggested that? No, don't answer.
I am starting to think that this entire 'crisis' is just another way for the government to steal hard working americans' money and redistributed it to the lazy government dependent dopes and the 'top 1% of americans'.
"I STILL don't understand:
why can't we terminate (for due cause obviously) EVERY AIGFP person and then immediately re-hire them? wouldn't that mean no bonus? "
Not really, depending on when the bonus was "earned" and due to payout. Many people who get RIF'ed still earn their bonus and get it due to the terms of the contract.
It's one thing to "ask" for bonuses back and another to ask for them back in a manner they know saying no is a really, really bad idea (i.e., security standing by, HR in the room with resignation papers ready for them to sign). Alternatively, they could have been asked to sign a new contract that made the bonuses null and void.
It's so simple that why didn't anybody think of it?
Fair Economist sed: Dodd's amendment was retroactive and barred the AIG bonuses. The retroactive protection was inserted in conference committee under pressure from, surprise, surprise, the Treasury department.
So the directive came from the executive branch of Obama's White house? Did Obama know? Did anyone in congress or the White house read the bill before signing it?
So the directive came from the executive branch of Obama's White house? Did Obama know? Did anyone in congress or the White house read the bill before signing it?
It wasn't a "directive", the choice was made by the conference committee. We could get the list of who was on it, but deliberations don't get into the Congressional record. Geithner and Summers were exerting pressure, which was reported in the news. Obama had to know, or if not, has not excuse for not knowing (it was in the news).
Congress knew, more or less, what changes had been made but this was the emergency stimulus legislation and nobody would dare hold it up over this. Besides, there was some kind of quid pro quo between administration and Congress over this. Welcome to sausagemaking.
Sausage.....That was sausage? Tastes like a shiTT sandwich..... >:o
The Latest from Mish:
Bennet Sedacca, the Best of the Best
Well we can go on strike and refuse to work, except in our own gardens. Now who suggested that? No, don't answer.
Voltaire!
Off topic, but very interesting none the less!...VERY INTERESTING!!!!!!!
U.S. Army Soldiers Deployed on the Streets of Samson, Alabama
cryptogon.com » U.S. Army Soldiers Deployed on the Streets of Samson, Alabama
I suggest that if you have not exercised your second amendment Right to bear arms I can not think of no better time in our history to do so.
This is not a call to violence not in the least...but a call to or citizens to wake up!
Sell/buy liquidity in the futures just disappeared.
wtf just happened?
Are not the local banks the same , if not worse than the money center banks? They are screwed with construction and development loans. Black Holes abound...watch your step. =-O
Looks like the Fed is implementing their new Pakastani no-sell stock-exchange simulator.
try this
The Federal Reserve surprised financial markets and committed to buy $300 billion in longer-term Treasurys to help the economy recover. The Fed was more pessimistic about the outlook, in a statement released after its two-day meeting. Officials removed language saying they expected the economy to recover later this year. The Fed tweaked its other credit-easing programs by committing to buy more mortgage-backed securities and agency debt and include more asset-backed securities under a new credit facility starting this week. The Fed repeated that deflation was a risk to the economy.
We are RALLYING on QE!?!?! WTF?!?
"Sell/buy liquidity in the futures just disappeared."
This really doesn't end well.
Fed to buy 300 B long term treasuries.
Mr. Liddy: Why does the American taxpayer have to have to pay counterparties, through your company, the likes of GS and others who made bad bets with AIG, and make them whole? Shouldn't GS and others take a haircut also?
So Bernanke is really a lying sack of s**t then. Economy will bottom end of 2009 two days ago to no end in sight today.
Fed buying $300B -- like monkeys the market starts buying debt and the rates plunge on Q -- dollar tanks... at what point does the bond market just collapse can;t be long..
End of empire
timmay let kermit loose
New Thread: FOMC: Buy $300 Billion in Long Term Treasuries, More MBS
http://www.calculatedriskblog.com/2009/03/fomc-buy-300-billion-in-long-term.html ( 5 comments )
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)
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CRbot: Like the terminator, I'm back. Again.
Re: "committed to buy $300 billion in longer-term Treasurys"
Still trying to understand "monetization." Does this mean the FED just printed $300B? Or is there a multiplier? Or is this not printing at all? And is there any way to extrapolate the amount of inflation this $300B purchase is likely to foster?
People should prepare for the coming surge in immigrants.
calvin? hobbes is on the line for you . . .
ProShares UltraShort 20+ Year Trea (ETF) - Google Finance
nice to avoid investing on margin today.
Representative Gary Ackerman (D-NY) and
Rep Michael Capuano (D-MA) made fools of
thenselves at the AIG hearings just now.
Maybe they can't grasp the risk of AIG blowing up,
and the hyperlosses we would then be liable for.
The account managers they want to keep for wind-down,
using retention incentives ("bonuses"), usually can retire
rather than subject themselves and their families to threats
of harm, financial sacrifice, and missed opportunities.
We get the leaders we deserve.
I am starting to think that this entire 'crisis' is just another way for the government to steal hard working americans' money and redistributed it to the lazy who work the system through government programs and the 'top 1% of americans'.
"you would think that Congress could spare a few pesos for a decent word processor that tracks changes by user"
..... the Congressional Record can be changed after the fact. That and this Dodd Amendment BS leads me to believe that "accountability and responsibility" are not virtues or parts of the character makeup of many elected officials. Many of those same individuals are Committee Chairmen. Reading and thinking is also not a Congressional requirement.
Finally a voice of reason! I really like Meredith Whitney coz she tells it like it really is.
"People who actually did physical work all their life usually are physically worn out -- hips, knees, shoulders actually wear down when used for weight bearing exercise for many hours per day."
I am one of them and miss physical work everyday. Paid to play was my job! :-$
More Meredith here from yest
Meredith via CNBC
Try this html for the embed, it worked on my blog:
<embed id="VideoPlayback" src="http://video.google.com/googleplayer.swf?docid=4941447671719096017&hl=en&fs=true" style="width: 400px; height: 326px;" allowfullscreen="true" allowscriptaccess="always" type="application/x-shockwave-flash"></embed>