AIG: Earnings at 6 AM ET, Webcast at 8:30 AM
Submitted by
CalculatedRisk on Sun, 03/01/2009 - 7:25pm (308 comments)
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 21 members and 153 guests online.
Recent Recommendations
I'm glad I don't own a piece of that thing.
Today, 7:37:21 PM Nemo says: I'm glad I don't own a piece of that thing.
We all do. We just haven't paid for it yet.
But really, aren't the Chinese going to pay for it? The American taxpayer has no intention of ever paying the borrowed money back to the foreign lenders.
we'll just print
Have you ever seen how a ripped off Chinaman gets red faced? With nuke armed China, of course America is going to pay for it.
Earnings is really not the right term for what they will announce tomorrow at 6AM.
I believe they will be earnings just negative! Ha Ha Ha
"reverse earnings"
At least they are finally done with the writedowns.
Really Nemo
Oh well, we are all getting snowed in tomorrow.
its 75 degrees out....
Shhh. The "party line" is that SoCal is an unlivable hell-hole. It was not sunny and 75 and will not be again tomorrow. Besides, a spate of good weather and we could lose Bill to the hidden cache of survival items along the Pacific Crest Trail for a few days.
I'm actually thinking about hiking the JMT this summer. Just read the record is 4 days and five and a half hours... Wish me luck! (to finish! LOL!)
I am sure it is livable, even enjoyable... That is, if you rent and have lots of savings to get you through the lack of employment...
If it helps the cause it was a little windy today.
You mean that biting, sucking, bitter pollution filled gale? For the love of God and for your own good stay away.
So the cows are no longer dropping dead from the heat, smoke has cleared from the fires, the torrential rain has stopped, and nobody's house is sliding down the hills?
Oh, just noticed the drought:
Schwarzenegger proclaims state of emergency because of drought - Los Angeles Times
The lake only 20 feet deep. We're in a world of hurt but this lake is overkill.
I guess brown is the new green.
Global warming is a hoax.
So are droughts.
Is this grounds for a tea party?
I love tea parties! Especially with crumpets. Oh boy!
70 billion dollars of TARP, that would leave them with only 280b left over.
This fiscal insanity is just so surreal.
Wake me when it is over.
Imho, you need to stay awake FFDIC.
OT - how is your daughter?
"Officiala lack the authority to unwind such a trouble firm" "You know how to unwind a troubled firm, don't you Steve? You just put your lips together and blow."
Was that a coupling reference?
6am should give the futures time to recover.
Second support level to the right and straight on 'til morning.
Nemo,
Best line on here in a while..
And the [Bollinger] Bands played on...
Just keep swimming, swimming, swimming, just keep...
The market opens at 3PM.
test -- go away for a weekend, and what the hell happens?
Will the taxpayer dividends be checks distributed quarterly or direct deposit credits to our personal Social Security balances?
I had trouble with accounting... never understood credits and debits... they always seemed backwards to me.... Is my balance going to go up or down? I'm confused!
Don't worry. It will be explained to you over and over and over until you get it.
Debt is money. The more you have of it, the wealthier you are.
either, every body gets 10 baggies of pot from the gubernator upon purchase of one socal repo
the rest of us get a walmart gift card
this makes me wonder, how long until California joins the chorus to legalize marijuana. massive sales tax boost. Ca-ching!
California joins the chorus to legalize marijuana. massive sales tax boost.
Not to mention emptying out the prisons and reducing costs there (prison guard union would be unhappy but taxpayers would be grateful). And reduce the need for drug cops.
Raise tax source and reduce expenses? Two birds with one stone seems like a no brainer! So the politicians will pass, of course....
The prison savings is real but there won't be any taxes collected. The stuff is a weed. 6 months after legalization and ADM will have 5lb sacks of seed in the garden section of Home Depot.
hmm... good point.
The native stuff grows wild in many parts of the U.S. Not very strong.
Strange - the Dutch seem to be able to manage turning a plant into a tax revenue source. But then, they also manage walkable cities and mass transit, things apparently impossible in America, when done by Americans.
That's because the Europeans are far more advanced than we backward and socially inept 'Mericans. Just ask any 'rupean.
Actually, I thought it was because countries like France wasted money on their TGV trains and nuclear reactors, while forcing car drivers to actually pay tolls on private highways - that's right, in France, there is no question that highway costs are completely borne by the vehicles on the road. For example, 'The east-west A4, SANEF’s longest mwy at 475km, links Paris with Strasbourg, providing a connection to central Germany near Frankfurt.' FRANCE: North & East of Paris | TOLLROADSnews I do assume that the link is familiar - after all, toll roads on the French model certainly solve the problem of government cross-subsidies which apparently are the only flaw in the exurban ointment.
That A4 stretch also costs circa 25 euros 'Péage' for a car, or 45 euros for a truck - one way, of course. But at least in France, unlike the 'backward' U.S., no money from the tolls is being diverted to any other form of transportation. And there is another benefit - those highways are generally quite, quite empty. After all, round trip between Strasbourg and Paris on the TGV, depending on the various ticket deals, is less than the péage alone, and easily a third quicker. Then add the cost of fuel for that distance of 40 euros or so, assuming an average French vehicle that uses 7 liters per 100 kilometers at 1.20 euros a liter, along with a depreciation value greater than 0.
No wonder the French seem happy to use the TGV and mass transit (the French plan is for every city with a population of over 100,000 to have a functional tram network), if only because unlike backward and socially inept Americans, the French actually seem to value saving time and money.
5lb bag with a $5 retail and a $95 sales tax.
Pure myth. Legalized marijuana would cost about $3/oz. The product is best enjoyed shared, as well.
I am moving to cali.
States trying to find new ways to retain population and attract new residents spurs drug wars between states. You herd it here first at CR.
I'm disappointed with the lack of capitalists here. Anyone can grow tomatoes or brew their own beer, but almost everyone instead buys these from professional growers. This is like saying that if alcohol was legalized, the states would get no revenues because people can always grow barley and hops and make it at home. Where are the venture pot capitalists? And where is Currently Smoking Cannabis ???
The source, who spoke on condition of anonymity, said AIG posed a significant systemic risk for the U.S. financial system and as long as that was the case there might be a need for continued government aid.
Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor
Cool keep shorting this market down and the government coughs up more money. Yahoo
"Pumping $30 billion more of U.S. taxpayer funds into embattled insurance giant American International Group Inc. is ultimately cheaper than letting it collapse and endanger the broader economy, a person familiar with the matter said on Sunday night."
cheaper for whom?
It sure would be nice if journalists would stop talking comments from Anonymous.
I really wish they would spell out what kind of doom awaits us if we allow these companies to sink. All these veiled threats are getting boring.
banksters would have to send their children to public schools, give up their membership at wingedfoot golf club, and move the yacht from greenwich conn to bridgeport
Oh the horror! Won't someone think of the butlers!
Agreed. Why are reporters limiting their sources to "persons familiar with the matter." It's like asking the terrorists what will happen if their demands aren't met. Where is John McClane when you need him (Die Hard hero)
If we don't bailout this company a small set of rich individuals will lose millions of $ !! We, the taxpayer, must avoid this terrible situation by pledging to use every last cent of our own money to make them whole. Please dig deep into your pockets help save these endangers millionaires.
Damn it CRbot, your links are still buggy!
Sorry. Page not found.
Taxpayer dividends will be directly deposited to our accounts by our new Chinese masters
FFDIC - If you're over 30, by the time this is over, I'm afraid you will be unwakable
So when are the reforms coming? Has any one heard so much as a whisper about how to bring this to an end and change the status quo?
IMHO uncertainty will reign until there is a new regulatory regime.
No more to big to fail.
No more CDS.
New financial instruments must be regulated.
Limit leverage.
When will sanity return?
We're all on the same page... Its the rest of the country we're having trouble with....
yesterday at the CPAC dinner, rush bimbaugh said that this crisis was trumped up by bho and the dems in order to win the election and institute their communist agenda
so everybody relax, there is no crisis...just the dems trying to create fear to seize control
Transcript: Rush Limbaugh at CPAC : Clips & Comment
command f for crisis, about 20 para dow
Speak for yourself. This financial Armageddon is rather exciting. All the regulations would totally spoil the fun. I say let the show go on. Maybe some day we can get a sequel too.
Sounds like you already got your golden parachute.
No.. But I am planning on painting my bunker gold.
I'd love to change the world
But I don't know what to do
So I'll leave it up to you
thanks. I needed that Alvin Lee guitar rift to perk me up
I'd love to change the world
What is the depression? A space in time, Ten Years After the election of W.
They should just keep the market closed on Monday. Snow storm, you know
But make sure the bars stay open.
If the NYSE had any sense they'd relocate to a bar, and only allow trading during Happy Hour
AIG: a black hole. - CR
CR what would you do w/ AIG? You offered up pretty concrete plans on what to do about the banks (triage - then 'pre-privatize' the sickest)... what is your remedy for AIG? And what about all the CDS they've written?
.................let it be broken...........
I thought that triage meant let the sickest die, worry about the healthiest last, and take care of the ailing but treatable immediately.
If the system is a social network, which I believe it is, then AIG is a node with a lot of "betweenness centrality." You'd be better off strengthening the adjoining nodes in the system, and try to get some containment on the disease. Throwing money at an imploding node is precisely the wrong thing to do, as it just provides more time for more nodes to become infected along more and more paths. That explains why some economies have been less infected, of course, as they are further out on the paths and less interconnected. It's now a race between the infection rate and the regeneration rate of the system as a whole. I have no confidence that the 'doctors' are going to face the fact that the infected node clusters will have to be cut out of the system before it can start to heal.
Social network - Wikipedia, the free encyclopedia
Is CR a social network?
Just an open thread (I'm working on fixing the comments) ~CR (from previous post)
Give it up CR and have a beer! On me....
We'll get by if we dont get our fix every 47 minutes, we'll have to learn to get by...
However to redeem this beer you're going to have to look me up when you come to daygo...
.......
speak for yourself. I tried to do with out and failed miserably.
How long before all this bailout passes through the snake and comes out as inflation? Or is debt destruction going to outpace the presses?
Who knows - that's been a raging debate for years here. I doubt we have a definitive answer soon.
I have no real guess where it ends up but I certainly am curious... It will be televised!
The bailout isn't going to do it. The hole is too big.
I figure if I hang on it will get back to $72 (as long as I live to 109).
I hate it when people post their "solutions". It's like posting your preferred starting lineup for the Washington Nationals that you think will win them the pennant.
Oh don't rain on our parade. We are trying to hope there actually is a solution when we know there probably isn't one. At least not one that actually stops this thing before it gets much, much worse.
Forget him - he probably hates fantasy baseball too.
[/snark]
As one of my favorite iconoclastic gurus used to say, as long as you have hope, the solution will elude you.
I think Tab Hunter for the Nationals. Anybody? Lola?
asia is tanking overnight...great.....
That's so Occidental-centric. To them, it's high noon as they're tanking.
watched Man U v. Tottenham last night. Odd, that Man U players were flying around the field in red jerseys emblazoned with the yellow letters AIG as if they were all Superman.
Isn't that taxpayer monnnneeyy...
last POST/OT funny you should mention the Times and its demise... I did a video mash-up on it by slicing and dicing Citizen Kane (sorry Orson) ... YouTube - NY Times Publisher Arthur Sulzberger's Life Resembles life of Citizen Kane!
... pity I didn't have a copy of Magnificent Ambersons to cut along with it... but that would make me Brian de Palma, no?
AIG will not be sponsoring ManU next season, but we can still link the thought of AIG with red devils. They've got to have pictures of a lot of somebodies...maybe Eyes Wide Shut wasn't fiction.
this comment exemplifies the slipperly slope of govt ownership. suddenly all sense of injustice is projected onto every decision the company makes. in this case AIG's sponsorship of Man U. In citibank's case sponsorship of the new Mets ballpark known as CitiField. the issue of bonuses is also tied into this. the question is what does the government know about Return on Advertising, or employee compensation and performance, etc. nothing. claw back of past bonuses, firing all responsible executives, that all makes sense - accountability for past performance. but nit picking over sponsorships, ad campaigns, performance incentives going forward really seems like mob rule and I can't imagine it leading to successful management.
Tax payer: We're not concerned about the return of our capitol. Do with it as you please.
Is n't there a minor error in this post?
To Earn money to mean would be to Make Money..
Loss report at 6 AM?
Oh Heck, Earnings Sounds better..
This won't be the last time us tax payers bail out AIG
MLM......Ten Years After. That's how long we pour money in to AIG.
Why 6:00AM? Isn't it highly unusual to have an earning conference call that early?
...very intentional...
Reverse psychology.
If anyone is interested in Michael Hudson's take on Paulson Plan from last Fall, here is a link.
YouTube - USA - Profit Be(for)e People ?!
Hudson's take that Paulson's Plan would "lock-in" his successors seems to be spot on.
Sorry, but "lacking the authority" is a bullshit excuse...they could have come up with some new laws by now if they wanted to have the power to reorg AIG. Hell, they should have been working on this a long time ago. There's simply no excuse.
Aw man. This new comments is really hard to follow when threaded.
I thought everyone was asleep and now I see people are posting in the middle.
UGH!
it's just as well. we were making fun of you.
futures don;t look good, asia is down...
YouTube - Freddie Mercury - Mother Love [♥Rare♥]
mother, please let me back inside
Did someone break the Nikkei? -4%
honk kong is in downward spiral as well. (I am kind of shorting china, couldn't resist
+ bullish on Nasdaq/Platinum @ the same time, got to fish that bottom; 1400. 1200. 1000 doesn't matter I do intend to fish it out by playing long/short
p.s. someone please tell me this war will end someday ROFL
@ Pitchforks,Torches&Pikes World
If only it were so. We'll be out of money long before then.
Check this out, regarding gold:
Change Alley
...
One of them Guests was me.
I'll figure out this here intertubes one of these centuries.
Going back and forth between threaded and unthreaded is a drag. It would be better if the threaded posts trailed off to the right, with the main line going down. Somewhat like a spreadsheet.
Whocoodanode that anything would make you miss Haloscan? I'm sure I'll get used to it, but at the moment, it's hurting my last few remaining brain cells.
too true MLM
too true
test
XOM pension deficit doubles to 15B
Exxon Mobil '08 pension deficit doubles to $15 bln
| Reuters
any pension gurus out there care to weigh in on the current state of the pension debacle?
Is this really an AIG bailout, or is this a de-facto bailout of their CDS counterparties?
AND that beast is hungry and getting hungrier
Remember that clip of the car sailing off the Bay Bridge after the 89 quake? This is like a continuos loop of that scene.
care to weigh in on the current state of the pension debacle?
It's not one of this year's problems.
Just you wait...
pensions? ...all over but the cryin, and even those with something left over,,,with dollar destruction, the purchasing power of their pensions and savings will be a shadow of what they were
This bank looked pretty secure place to put your money...
AIGBANK Home Page
Black Holes always look better in the rear view mirror
Median housing price in Detroit just hit $7,500. Maybe Geithner can buy up all the inventory and give the houses out to AIG counterparties instead of cash. Require the execs from the counterparties live in them - and have all the neighbors over every Saturday for barbeque and ass-kicking.
"I can't imagine it leading to successful management"
So Citi and AIG will remain status quo?
America's emptiest cities - Phoenix, Miami, Atlanta & Vegas rank high.
America's Emptiest Cities - Forbes.com
reposting on this thread,
I didn't notice the previous thread had been superseded while I studied the JS-Kit API wiki
Ken or any CR companion hackers,
You are probably already be way beyond me here, but...
I was looking at the JS-Kit API wiki and worked up this GET url to dump flat date sorted comments in "javascriptified" form (not for human consumption)
http://js-kit.com/comments-data.js?ref=http://calculatedriskblog.com/1141978188139290915&srt=date&ord=asc
It seems like it would be useful to get comments into a modified firefox add-in... i've never seen the CRCompanion code so I don't know how you handled things with Haloscan.
The API wiki is here:
JS-Kit Community Wiki / API-Guide
I have asked before but how in the hell do I refresh... f5 doesn't work on my wife's Macbook. Also, any luck making available via BlackBerry?
Sorry. We are lucky to have comments right now ... I'm working on it. There is no refresh - I'm asking again right now for help
best wishes.
Thanks for the update.
Yes, please. We need you to keep enabling our infantile sarcasm bursts.
t
Apple key + R = refresh on Macbook
you dont know how to refresh your browser?? firefox on mac its command-R or fn-F5 (function button plus F5). this isn't a CR issue. common, browsers and computers have manuals, don't bother CR with this.
I have noticed that my browser says HaloScan.com - Comments. Is JS-Kit just a front for the real powers at Halo. Yes! That's it! The Halommunati have bee revealed! Wait, there's a sound at my
NATO will send six more warships to fight AIG pirates off the coast of Somalia that threaten the shipping lanes for a tenth of the world's trade.
North Atlantic Treaty Organization defense ministers agreed today to restart patrols in the Gulf of Aden, a choke point for oil tankers and cargo ships passing through the Suez Canal toward Europe and the U.S.
"You can expect to see another what we call standing NATO maritime group off the coast of Somalia in the coming months contributing to the overall international effort," Secretary General Jaap de Hoop Scheffer told reporters in Krakow, Poland.
Armed AIG gangs using conflict-ridden Somalia as a safe haven attacked 165 ships and hijacked 43 last year in the Gulf of Aden. The increase from 58 attacks and 12 seizures in 2007 prompted an overlapping international coalition - the U.S., NATO, the United Nations and European Union - to dispatch frigates and escort ships to protect the sea lanes.
Well, I'll be...
I was sure "Jaap de Hoop" was some sort of anagram for Hoopajoops, and I was going to congratulate Hoops on breaking the js-kit comedy-sock-puppet code.
But amazingly enough, Jaap de Hoop is the Sec'y General's real name. Go figure...
I dunno, backstopping earthquake insurance in Taiwan; what could possibly go wrong?
"I'm asking again right now for help"
Go, CR!
Get on the bailout bandwagon!
AIG will continue to be propped up, because the alternative, as you may surmise, is global economic meltdown. Its liquidation would cause a further dilution of similar assets currently not being sold (CDS) plunging the derivatives market into the abyss. It would also collapse the hedge fund market, which would lead to more collapses, and so on. The top people at AIG know this, of course, which is why they aren't too concerned about public opinion or that silly nonsense called moral hazard.
re: plunging into the abyss
Worked out ok for Gandalf, maybe Timmay's got a cool staff? "You shall not ask!" (for a bailout)
The hedge fundings will be plunging themselves this month. No help form AIG needeed.
Venezuelan leader orders troops to take over rice plants
U.S.-owned Cargill company is among the major rice processors
Old-school nationalization...
Flash! Marines invade Venezuela on behalf of Cargill!
From Previous Thread:
Pinarello says:
Today, 5:15:13 PM
“Hey Blackberry Users!
You can download the Opera Mini browser to view the comments!
Whew, I was worried I wouldn't be able to read you all on the train to work tomorrow:)
[because the alternative, as you may surmise, is global economic meltdown. Its liquidation would cause a further dilution of similar assets currently not being sold (CDS) plunging the derivatives market into the abyss. It would also collapse the hedge fund market, which would lead to more collapses, and so on.]
Lets do it......I can't think of a better RESET
when i was a kid many if not most american families got by on a single income
coming to a future near you, the three, four or ,more. family income
mom, dad, grandparents, and maybe even an offspring or two all bringing their paychecks home to the same domicile
"when i was a kid many if not most american families got by on a single income
coming to a future near you, the three, four or ,more. family income"
In rural settings, it's typical to have multiple family members working the land.
"when i was a kid many if not most american families got by on a single income
coming to a future near you, the three, four or ,more. family income"
More pure myth. Only on the boob tube. "Mom and Pop store" ring a bell?
scary scenario.
In a lot of 3rd world countries, this is the case, along with selling the cutest daughter to a brothel.
"coming to a future near you, the three, four or ,more. family income"
Monogamy has been grossly overrated anyway.
AIG is really a big brown hole (aka as the ass end), rather than a black one
Save us Obi Ben Bernoki, you're our only hope.
Mahalo for the heartiest chuckle I've had about this thievery. Was so good I actually linked my facebook account to comment-something I've not done before
....without a complete reset, the virus still remains
"I can't think of a better RESET"
Clearly you are a Doomer looking for an excuse to use up six months of dry, tasteless survival food before it expires.
There is an icon that looks like a 2/3rds circle with an arrow. Click on that. Fugly!
Or hit fn key and F5 keys at same time. Even worser Fugly! It might adjust your sound if the machine is in a bad mood.
Not Irving Fisher! says:
Today, 20:47:03
“I have asked before but how in the hell do I refresh... f5 doesn't work on my wife's Macbook. Also, any luck making available via BlackBerry?
o luck
first button to the left of space + R for Mac's ; + it works well on i-touch/phone , CR looks almost as good as Bloomy LP
AIG will continue to be propped up, because the alternative, as you may surmise, is global economic meltdown.
Ummm... the "global economic meltdown" is already in full swing. Your point was?
And now they are showing "House of Cards" documentary again on CNBC. I have now sorrounded myself with doom.
So does anyone have happy thoughts?
Showing green pools in eviction homes. Hey we know what to do with those in NO. You put fish in them!!!Ha ha ha.
Oh and the National Guard just left NO this weekend. Here is hoping we don't become the wild wild west.
"So does anyone have happy thoughts?"
I do, but I've been instructed to keep them to myself in order to keep the files sealed.
Try Marijuana Inc.
Don't want to rain on our pity party parade?
Seems like commenters have definitely split into threaded vs. flat camps, and the threaded camps obviously don't realize how their responses fall flat.
I haven't figured out how to go flat. Clearly not a Thomas Friedman fan...
I don't think the reply came through yogi. Don't see anything under private messages.
Ok sent
So does anyone have happy thoughts?
Sure, back on December 5, 1996, Alan Greenspan said in a speech:
"But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions . . . ."
The DOW had already closed for the day at 6437.10. The next day it dropped a bit to a close of 6381.94.
Meanwhile current DOW futures are around 6962. Things are almost 10% better than they were during that dismal winter of '96.
I think we might redefine "dismal" soon.
I'm shorting the market. I'll be quite exuberant if we hit 6400
'm shorting the market. I'll be quite exuberant if we hit 6400
Fortune cookie says you will be happy soon.
Comrade Bear (tj and the bear)
+1
NIKKEI not happei. -4%.
I wish this was fiction:
YouTube - GTA: Chinatown Wars GameStop Trailer
CR, I have a stupid question. What if we didn't give AIG any money and they default on their liabilities, what would be the consequences?
Ted
Yeah, so the CD market tanks. As if it's going to come back anyway. So I ask the question again: why not default?
Ted
(a).(i).(g) = (Black)-(Hole)
Re: happy thoughts
Well, if economics is the 'dismal science,' and we tar and feather most of the economists, isn't that happy, or at least not dismal?
What if we didn't give AIG any money and they default on their liabilities, what would be the consequences?
Ted, let me introduce you to Hayata who posted at 8:53pm PST (your time may vary depending on your time zone).
Yeah, so the CD market tanks. As if it's going to come back anyway. So I ask the question again: why not default?
Ted
CR,
while you are in the repair mode. Can you change the site so that when we click a link it opens a new window instead of leaving CR?
Can you please learn how to use a computer on your own time.
Well, if economics is the 'dismal science,' and we tar and feather most of the economists, isn't that happy, or at least not dismal?
If it acts and sounds like a quack, it should have feathers.
What kinds of oil plays are people looking at. It looks like oil is going to see a trend reversal soon.
At what point do we reach irrational pessimism? Our quandary receives both logical and illogical arguments equally; there are logical and mathematical theories to evaluate, yet we tend to disregard the psychological ones during challenging times, especially those running contrary to prevailing wisdom.
That is the most insightful thing posted today, sorry if I'm having trouble nesting replies...
Re: happy thoughts
The REI member dividends are here!! CR, the hiker porn in the catalog is awesome;)
CRBot test for me
me likes new comment system, makes it easier to ignore Mike types ...
p.s. for reload, go (apple R for mac's) & cntl R for windows (i think) ; common guys stop bugging CR, ...
Ah, the dirty M people.
I know you still read me and you can't ignore me.
Heres to the crazy ones;
YouTube - Heres to the crazy ones
[because the alternative, as you may surmise, is global economic meltdown. Its liquidation would cause a further dilution of similar assets currently not being sold (CDS) plunging the derivatives market into the abyss. It would also collapse the hedge fund market, which would lead to more collapses, and so on.] - Hayata
[Lets do it......I can't think of a better RESET] Black Star Ranch
Psychologically the shock from this "economic"* meltdown might be worse if we postpone it. The sooner we have a huge down day on the markets (crash day, 15%~20%), call a too-big-to-fail's bluff and watch how... nothing happens the sooner we can pull down this charade and get our trading partners around the table to talk about industrial revolution II electron boogaloo: We'll form a global central debt issuing ponzi bank that will issue bonds denominated in a single world currency derived from a basket of goods (...where have I heard this?) to bail out all the countries in the world. THEN when that finally fails, doomers will rule the world from their bunkers with pac-man machines running off solar power that only take gold coins, serving pablum cuisine and pining for the glory days of flat comments.
*Economics will continue. Financial meltdown, I'll agree to that term. Economics is nature, finance is man made. Not saying we understand Economics more than 1%, but the study of production, distribution, and consumption of goods and services will likely benefit from another up close "experiment" of the ludicrously rich losing their fake money and having to do something other than tax and dictate.
OT - WSJ: Laid-Off Lawyers and Other Professionals
highlighting a trend we've been talking about for awhile - a lot of white collar jobs are not going to come back ... they are gone for good.
Microtrends: Laid-Off Lawyers - WSJ.com
At what point do we reach irrational pessimism?
On this board, never. We (the assorted commenters here) thrive on pessimism. It's only been a week or two since we (the group) admitted that the Mad Max scenario in the U.S. probably wasn't very likely. But we cling to the thought anyway.
I often look for the positive outcome, at least since late January, and I'm often in the minority for that reason. Yet the reason many commenters appear pessimistic is simply that they are short the stock market, or individual segments of it, or short Treasuries, or heavily into precious metals, and, like many investors, they are talking their book.
Others do it for the sheer joy.
Sorry about the over post...we need an edit button in addtion to reply/delete;)
"Yet the reason many commenters appear pessimistic is simply that they are short the stock market, or individual segments of it, or short Treasuries, or heavily into precious metals, and, like many investors, they are talking their book. "
I think you have that reversed. Many on this board are short treasuries or into PM or short the market BECAUSE they are pessimistic.
Realism and pessimism are not the same thing.
Others do it for the sheer joy.
Here's a slightly different take. After years of being accused of being too pessimistic, reality caught up. For the optimists, the sudden changes feel like a catastrophe. For the pessimists, they saw it coming.
One persons pessimism is another persons optimism.
And so, in the depths of time, in songs that come down to us now only in memory and regret, began the wars between the flats and the threads...
Black hole AIG
Means many things to many
French beg to differ
"At what point do we reach irrational pessimism?"
you never know, i suggest screaming "stop it" in your head (works for me).
We all overestimate our ability to be rational (took me a social psyc text book to realize it). The key is to remember thy fact & control your arrogance.
I wonder if the hookers and blow account will be cut back?
I think they could cover GM with those funds.
Dug up my old Chinese-English dictionary, under AIG:
English:Chinese - Please buy Treasuries
Chinese:English - Black 13, or else
Yes you cannot make this up.
http://dbstars-asia.db.com/data/20090212102616O/data/usdailyeconomicnotes.pdf
Dow 7k is looking mighty shaky if Euroland follows Asia's lead.
The sooner we have a huge down day on the markets (crash day, 15%~20%), call a too-big-to-fail's bluff and watch how... nothing happens the sooner we can pull down this charade...
This may be the best measure, but it may not be. I think many posters here adhere to this form of action - the quick and severe approach. You are sincerely most optimistic, perhaps fatalistically so. It's no wonder that someone such as Nouriel Roubini has been labeled optimistic by some - he truly is. The true pessimists are those who believe that a failed system can continue to function normally with a modicum of stimulus, or conversely, those who believe we are destined for another Dark Age. Anyone between those extremes is an optimist.
However, a severe and cataclysmic approach may induce the very thing the leading economists are attempting to avoid - that is, a radical re-evaluation of economics - not finances - economics.
404 Not Found
Like sands through the hourglass...
So I guess the honor system requires everyone delete his own fluff posts, but keep his controversial firestarters intact for sake of clarity.
The obvious question re: AIG is: when will they ask for more money after this time?
Color me ignorant here, but we own 80% of this black hole and we still keep bailing it out for fear of torpedoing the European banking system, which bought credit default swaps from AIG? Can the Fed work out a deal with foreign governments so they can make up the insurance loss of an AIG crumble?
raise your hand if your credit score is higher than the sp500
Mine is 810+
...................nikkei -3.9 closed................
Dow Futures down 106. Tomorrow is Monday Crash Day.
Black Holey
No crash!
Just a slow bleed that continues...
Elrod, define Monday Crash Day
Meaning - We've had three days of shitty financial news to digest instead of just one. Alas, markets will plummet tomorrow. Maybe they'll stage a late-day "bargain hunting" rally but I would be the Dow is off by 200 by 10:30am tomorrow.
Put your head between your knees and kiss your ass goodbye.
@da guest: Not easily. F5 will refresh, but it will also reset your comment settings so you have to go back to Flat or sort differently. My poor man's trick was just sort it back and forth to maintain your position while refreshing.
Better yet, use their API and retrieve the raw text. It is almost useable that way :/ <br/>http://js-kit.com/comments-data.js?ref=http%3A%2F%2Fwww.calculatedriskblog.com%2F1141978188139290915
http://www.comstockfunds.com/files/NLPP00000%5C177.pdf
Wow
Man, it's a good thing the GDP is growing so rapidly. Otherwise this could get ugly.
When will we reach irrational pessimism? My own indicator has been to have my friends who work in large companies keep asking the secretaries what they're doing with their 401k's (the same secretaries who were all trying to buy a house to flip in 2007). As soon as they start to go into money market funds, we shall have our bottom.
I don't even look at my 401(K) anymore. Or my kids' 529s. I'm 35 and I'm just glad to have a job that still pays the bills.
I do, however, teach US history at the college level and we are presently discussing the Great Depression. With the exception of the farm crisis (no longer an issue thanks to modern agribusiness), the issues today look remarkably similar to the 1930s. The politics resembles it too. It's hard to grasp just how ell FDR pwned his opponents - and how the left pushed him in a progressive direction. There was really only one moment where he overextended himself and that was the Court Packing Scheme of 1937. His approvals never dropped below the high 50s - not because he ended the unemployment problem but because he capture popular sentiment so effectively.
http://media.npr.org/blogs/globalpoolofmoney/images/2009/02/household.jpg
Last time household debt exceed gdp, 1929.
yagij, you've given me hope. I'm pretty sure that someone who can actually program will be able to take that and turn it into whatever form they want. Maybe we'll get a "Haloscan Classic" button.
Wonder how long the 6000s will hold? A month?
@MLM:<br/>Honestly, the more I look at the raw data the more I think we can easily save/salvage CRC. I've spent some time digging through Ken's jar file and I say it is very much doable. I'm just waiting to see what Ken has done on his end and what he was planning to do.
.......CR...from yesterday , I asked you to make refresh button in the comment page....f5 key is a system key...that mneans its function is different from system to system.........
Really. Just how fucking hard is it for someone to figure out how to refresh the goddamn page?
I usually just right fucking click it. Fucking whiners.
....it's not that fucking hard you thought dope....I knew how it works moron....
Also, if CR would just disable the in comment [Reply] button, we would automatically go back to a "flat" format without having to deal with the @Control options. (If that is what he wants/wanted to do...)
I thought red was the new green?
@ yagij
What would be great to have along with a Firefox add-on is a mirror so that we could read comments on iphones, etc. Hi Brian!
government debt to gdp
Unknown Domain
Bottom line we are stuck with the losses in the private sector and it is our fault for living beyond our means-too much debt. We will pay for this with higher taxes and a lower standard of living. The financial system stays frozen-i.e. banks gone or not operating- then many people live in the dark, starving and cold in the winter.
OK lawn grass that's true except when it isn't. My family's Co. is taking losses without having got into the leverage pit - and they make and distribute useful stuff. And they employ people who do useful things.
Further, I don't have any debts beyond the utility bills. And I'm not on the dole either. So from where I sit, it's not "our" fault at all. I suspect I'm not alone.
@Jay D.:<br/>Touche. F5, Apple-R, Ctrl-R, or however your browser-of-choice is configured. Just using "F5" as a cryptic shorthand instead of repeating the previous sentence. In sum: You have to refresh the page manually. The "manual" part has many options.
@MLM:<br/>I was thinking about it. Retrieving the data, parsing it, and presenting it in a different format is easy. Maybe that is an option we could consider to help out non-FF users or the mobi crowd.
Should be a wild ride tomorrow. The problem with AIG is that this is the fourth "fix" the government has tried, and all the prior attempts have failed. The optimism has been pretty much beaten out of folks . . .
We won't see a 15-20% drop tomorrow, but I think we'll flirt with Dow 6600 before ending the day near 6800.
That's what I'm thinking too. Futures are ugly right now. And nobody likes the talk of AIG in ANY context at this point.
It's sort of like the Rorscasch test during the Election when Jeremiah Wright's name came up. Just the man's public mention brought negative vibes to Obama. So, today, does any talk of AIG. It's just a reminder of something terrifying, lurking the background, perpetually sucking us in.
So you don't think the fact that the market has been down for several days in a row already will temper the drop?
Black Monday is turning white. NYC gets most snow in March, right on cue. In like a lion, but a bear all the way through.
AIG be damned -- Canada is solid and open for business.
nbbusinessjournal.com - Solving the skilled labour shortage | Brett Bundale - Breaking News, New Brunswick, Canada
I love this bit: "Even so only a fraction will consider moving here," he added. "It will never be massive influx of people."
Wanna bet?
AIG is going to break itself up. Guess which parts the taxpayer gets?
finance part ROFL
cause investments & insurance divisions are actually .... profitable
My buddy at AIG swears that his insurance division is profitable. A little like JPM saying deposits and consumer banking market share are up. A small matter of toxic waste on the balance sheet....
Ask him why AIG, along with other major insurers, was requesting reserve requirements to be relaxed by state regulators then. That is the insurance side of things, and not the holding company. Ask him what is the break even rate of return for their insurance policies, and their actual present returns. Ask him if he thinks there will be another 2005 windfall of indiscriminate price increases on policies they can rely on. Ask him what is AIG's overhead, both in terms of overvalued real estate they invested in/lease and in terms of sales/marketing. As a follow-up, ask what defensive measures have been taken to bring those costs into line
I would but he's pissed off at me for sending him the NYT article and links to these threads. I'm trying to get him out of denial. This is a guy with 3 kids and a mortgage who quit a previous job with no fallback when they required him to contribute to the GOP. I tried to explain why private enterprise and insurance don't jibe in the long run...
fair enough, I was just enjoying a rhetorical mood
it will be a tough adjustment on a lot of people that never understood what they were a part of in the first place. the prospect of reducing headcount by at least half, perhaps two thirds, in swathes of the FIRE sector must be terrifying. what can you do though? the value added and earnings were never there, and if you delay the reconciliation it becomes your fault. best to acknowledge the problem together and muddle through it the best way you ca
required to contribute to the GOP?
..............Shanghai +0.51 closed.....they go their own way....there is a hope in Asian market....
What are the odds the tax payer will pay back the foreign bond investors their hard earned money?
Pessimistic?
Or Just Finnish?
Nothing found for 2008 12 03 Quirkiness-among-finnish-men-is-a-positive-trait #comment-369387
Pekka, an expatriate Finnish man visiting California, was recently diagnosed as clinically depressed, tanked up on anti-depressants and scheduled for controversial Shock Therapy when doctors realised he wasn’t depressed at all - only Finnish.
#
Brilliant.
Mr Pekka, whose characteristic pessimism and gloomy perspective were
interpreted as serious clinical depression, was led on a nightmare journey through the American psychiatric system. Doctors described Pekka as suffering with Pervasive Negative Anticipation - a belief that everything will turn out for the worst, whether it’s trains arriving late, Finland’s chances at winning any international sports event or even his own prospects to get ahead in life and achieve his dreams.
“The satisfaction Mr Pekka seemed to get from his pessimism seemed
particularly pathological,” reported the doctors.
“They put me on everything - Lithium, Prozac, St John’s Wort,” said Mr
Pekka. “They even told me to sit in front of a big light for an hour a
day or I’d become suicidal. I kept telling them this was all pointless and they said that it was exactly that sort of attitude that got me here in the first place.”
This is so damn funny.
Thoughts from FT Alphaville's morning post:
• Allied Irish Bank underlying earnings down 61%. As private credit actually declines instead of growing, despite government guaranteed private bonds, expect the slashing of revenues to be an industry wide trend.
• It seems the Swiss have outlived their usefulness and will be sacrificed now. Too bad I can't see their swap line week by week. Those USD Swiss bonds sure have an exciting lifetime ahead of themselves
• Two bankers who led Deutsche Bank’s successful distressed debt trading businesses have resigned, highlighting how banks are losing key people in profitable businesses. Martin Dent, 43, and Julian Nichols, 36, were respectively global and European heads of the bank’s distressed products group. Together they built up a team widely seen as a leading force in distressed debt trading and investing. The pair are now on leave but are expected to return to the industry at some point to set up their own distressed debt business.
Usually not a good sign, indicates unspoken constraints
Perhaps they woke up and realized they were middle men in a giant Ponzi nightmare.
Speaking of distressed debt, I've been looking at hedging my big short bets with high yield junk. Many scenarios pay twice, and few lose much. Thoughts?
Well ignoring what you may or may not know about the backing of a specific bond, in general I would be against high yield bonds at this time. I think throughout this spring we will see a differentiation in price according to risk that we experienced last fall. Since late November the market calmed and central banks soothed the wounds, leaving room for the same price of risk differentiation to happen all over again.
Furthermore, if there is a risk of Treasuries rising in yield that could also hurt you.
I see this Spring as one where people by and large keep their money in the market, and a preference for risk-less assets as we witness wildfires of defaults globally.
I see this Fall/Winter being near the point where yields are low relative to risk, no prospect of impending growth, possibly the winding down of good short opportunities, and a rising tide of liquid money. From there the only path, the only way left for the 'market' to correct/stabilize itself, is the seeking and exploitation of global consumer surplus. In the past the hurdle was too big, the yield relatively unattractive. Soon there will be a horde of cash starving for whisperings of a 3% yield. Breaking down capital controls by targeting necessary imports.It will feed on itself until the artificial interventions surrender.
Going to be odd times for the exporting giants of the boom years attempt to colonize demand for their overcapacity after the peg wars though.
I'm strictly playing junk like a Sears Note yielding 29% against Sears puts. No position on generic junk.
You do realize that Sears is merely a holding company for Eddie Lampert's unsuccessful hedge fund?
The securitization epidemic will kill all the dinosaurs. We must survive on the carcasses.
Look at Sears Canada bonds instead
The End.
C
Shmansparency
Bloomberg online:
"On Feb. 27, a trade group of credit unions filed a Freedom of Information Act request seeking details from the NCUA on the Pimco contract. The group asked for specifics of Pimco’s analysis and how much it’s being paid, the Arlington, Virginia-based National Association of Federal Credit Unions said in a statement.
Transparency Needed
Representative Garrett said he posed questions about potential conflicts of interest for money managers working for the government more than six months ago with former Treasury Secretary Henry Paulson, and has not received any answers.
Phillip Phan, a professor of management at Johns Hopkins Carey Business School in Baltimore, said the government needs to be transparent on how it awards contracts to avoid the perception that there are conflicts.
“There is no question that exposure to conflicts of interest are very high, if you are an adviser and a potential buyer,” Phan said in an interview. “But frankly, these are the only folks that are willing to take the risk in this environment,” he said, referring to money managers.
Pimco, a unit of Munich-based insurer Allianz SE, oversees mutual funds, closed-end funds and separately managed accounts for 8 million investors in the U.S. The $136 billion Pimco Total Return Fund, managed by Gross, had 83 percent of the fund’s assets in mortgage-backed securities at the end of January, the highest in at least a year. He has added to securities that benefit from government spending to curb the global recession. "
....European markets started low as expected....esepcially banking stocks plunged more than 5%......
"banking stocks plunged more than 5%"
BAC and C holders would be relieved by a 5% drop tomorrow.
"For Morgan Stanley, which runs one of the world’s biggest real estate funds, it is a black mark on an otherwise sterling reputation."
Morgan Stanley’s Chinese Land Scandal
A couple more choice paragraphs from the above link:
For Morgan Stanley, which has seen the value of many of its China properties plummet in a depressed property market here, the challenge may be in selling properties associated with the investigation.
The company has not disclosed which properties were involved. But in its statement on Friday, Morgan Stanley said, “Based on what we know, we have no reason to believe that the value of any of the properties in any of the funds have been materially affected by the activity at issue.”
Europe loves the news. Down 2.5% on the break.
The Latest from Mish:
You Walk Away LLC sued in class action lawsuit
Bot you seem deflated. JSKit removed your halo?
What really scares me is that GE seems more and more like AIG. GE is nothing but a huge bank that can not be allowed to fail and so it will cost tax payers even more than AIG.
.....No problemo....simply too-big-to-fail theory works for GE as AIG....you can sleep well...
government funding has so far been crucial to them avoiding a downgrade
I don't see how they make it through the next 3 years intact though. Political pull only goes so far these days
GE is slowly depleting the garrisons in the frontier provinces.
"Finance company GE Money is closing its branch network in New Zealand, with 40 jobs to go, shortly after closing its Wizard Home Loans business last December."
Source: stuff.co.nz
Why do you think Buffett started writing swaps? Trying to get tied in at the waist before the deluge.
He started writing them in late 2003, 15 years until maturity, first one comes due in 2019
I'm sure Buffet doesn't understand/didn't understand at the time the role of credit throughout the world economy. More to the point though, my first thoughts on the matter were if the stock markets don't recover above their recent highs by then, then Berkshire would be bankrupt as an insurance company in any event. As recently as last year when he had to sell Colgate and P&G to raise cash for his 10% dividend preferreds, I think he was very happy to do so.
He'll be dead before he sees the end of it, so why not swing for the fences
"I'm sure Buffet doesn't understand/didn't understand at the time the role of credit throughout the world economy."
Ok, this is the first indication I've seen that you're not perfect.
$4bn for selling the puts, and $10bn in resultant writedowns as of last quarterly report
certainly seems like someone misjudged the tide
Asia and Europe stock markets look very concerned about their economies and the world economy in general. It seems they are moving fast to reset company equity values.
(WSJ) HSBC Trims U.S. Lending Unit
HSBC will abandon much of its U.S. consumer lending while planning to raise capital and cut its dividend.
```
Here's that theme of tough times ahead for US consumers post-crisis. Without the growth in market demand to make the US so lucrative, companies are pulling out no longer content with maintaining a presence at razor thin margins, and so competition declines until prices rise enough to become attractive again. People probably still think I'm crazy noting that in most developed countries new cars that are half the size begin at $30k US
I see you've come around on HSBC. Too bad I took my (huge) profits already. Buy and hold, the man says...
EHP wrote:
"Soon there will be a horde of cash starving for whisperings of a 3% yield. Breaking down capital controls by targeting necessary imports.It will feed on itself until the artificial interventions surrender."
EHP,
I followed your argument up to the last two sentences above. Would you elucidate?
Mexican - US border is getting pretty serious it seems
and I will depart with a joke
Germany and France walk into a bar they own where Emerging Europe countries are at the end of a big night out with a big tab the on-duty bartender is having trouble collecting
The exchange is as follows
Emerging Europe: Can we get a loaf of bread to slice amongst us first, we're like Hungary
Germany: Try Turkey
Czech Republic: but they're busy... France cuts them off
France: Czech please
Belgium: [belches]
Iceland: I'll settle for some ice to chew on.
joe shmoe, going to bed. to put it sucinctly, the yield has to come from somewhere, and it is no longer coming from credit creation itself. it can't come from so many ways because unemployment will be high and the cost of innovation high relative to labor or sales
yogi, yeah it was only a matter of time for HSBC to "get out in front of writedowns" again. that being said, I only ever expected them to outperform their peers which they have managed. Never said buy them, just said there were better opportunities to short. I don't expect all their competitors to remain propped up through to the other side of the crisis, this is going to be a long march and countries will tire. HSBC's demon to face will be its Asian lending.
We're definitely in the zone where even prudent loans are going to take unforeseen hits
Good night EHP. Beware the admitted small lie. Jamie Dimon saying "things look terrible" and Warren Buffett saying "the economy will be in shambles" for some time are gaining them favor. They are hiding the truth from their flock, as they think they must.
EHP
Thanks. I understand the logic of lower yields into the near/intermediate term, but still don't get what you meant when you wrote, "Breaking down capital controls by targeting necessary imports.It will feed on itself until the artificial interventions surrender."
Don't look for any magic beans or bullets (the stimulous package comes to mind)to dig us out of this mess. There have been to many good paying jobs that have disappeared in the last 6 months that will never come back. Some how I just don't think the U.S. will ever be the same as a service economy. Anyone for DOW 6,000.