F&*$ the xyz industry. No industry should have a say in what the media does. The Daily Show presents the monty python reality we live in again so we can laugh at ourselves. Glad that show exists.
q: how will the Fed unload USTs and/or other assets without inflationary effects?
a: they'll create SPEs with the worst elements of private and public characteristics, if they need to do it at all. more likely, they'll sit on all of the assets they accumulate until they are almost totally worthless. in any case, inflation needs to be pushed through wages and commodities. i don't see that happening under any scenario. genuine dollar devaluation is a slightly different matter, but what alternative commodity or currency will lead that? and, let's say gold goes to $5000 but oil stays at $50 - really a tree falling in the forest with no one to hear...
and as for the list of non-boomers - Charley Pride AND Ray Charles are both seminal country artists. In fact, they may well define the genre. Right?
Reposting from the previous thread that just went dead
Some weird quotes from Warren Buffett on Fed's stress tests and Wells Fargo:
May 2 ( Bloomberg ) Berkshire Hathaway Inc. Chairman Warren Buffett dismissed the importance of government stress tests in helping him assess banks, and said Wells Fargo & Co. will prosper no matter what the results show.
“I think I know their future, frankly, better than somebody that comes in to take a look,” Buffett today said of the bank stocks that Omaha, Nebraska-based Berkshire owns. Regulators “may be using more of a checklist-type approach.”
...
Buffett said he instead judges banks by their “dynamism” and their ability to attract deposits, and singled out San Francisco-based Wells Fargo as a “fabulous” company.
“If you look at Coca-Cola today, for example, and just looked at a balance sheet, it wouldn’t tell you anything at all about Coca-Cola,” the billionaire investor said today in a Bloomberg Television interview before Berkshire’s annual meeting. “It’s what the product is.”
Just wow. Buffett surely knows how important bank balance sheets are to the regulators and to the rating agencies (two of which, btw, downgraded Berkshire from AAA recently). The return on equity for banks critically depends on how much equity banks must hold, and that affects their value.
Buffett is not supposed to know about the stress tests results as they have not been made public yet, but it sounds he got a whiff of the Well Fargo 's result and is trying to downplay its importance.
[Buffett is not supposed to know about the stress tests results as they have not been made public yet, but it sounds he got a whiff of the Well Fargo 's result and is trying to downplay its importance]
This afternoon I talked with a relative of mine who I hadn't seen in quite a while. He's an executive at a modestly-sized regional bank, yet a very nice down to earth guy. In the course of our conversation, he mentioned a few things that really stood out:
- They had wondered for years how other banks were offering the rates and loans they did, and are pretty frustrated at all the bailouts and preferential treatment those same banks are now getting.
- The FDIC has informed them that their premiums will slightly more than triple next year.
- All the executives cringe every time Geithner opens his mouth; they wonder what new way of screwing them he's come up with. We both had a good chuckle at that one.
Anyway, the FDIC premium increase sounded pretty crazy to me.
Patience. This next phase will take quite a while.
Everyone here is jumping waaaaay too fast to the conclusion.
Lucifer is quite comical- he expects political processes to yield to rationality.
Har.
Not on this planet. Go to the Star Trek universe.
Jas is probably perturbed his one way on bonds is looking like it reversed.
The Fed is really happy commodities have been stabilized through defenestration of the hedge funds.
Meanwhile, still mostly long, except for one lousy put.
Warned you all about that velvet fist of government- now everybody wants to complain on Wall Street- well they flocked it royally, and made main street suffer big time, now the pound of flesh will be due.
mock turtle - It may be for the better, actually - it may force an lasting soluting instead of a band-aid
It took the Great Depression to create reforms such as FDIC, Glass-Steagall, Social Security
You're reading way too much into (as ZeroHedge puts it) a "purely technical bounce" in the market that most of us expected. Could be over with "go away in May" or could hold up until September or October. Nonetheless, the next leg down's going to be a real b!tch.
TJ, it won't be much- we are now entering into a very Japanese period- it will go up a bit more and fall back, and then everyone will bet on doom and get clipped.
Back and forth will wear everybody out. I think it will be years before inflation is sufficient to reestablish a real bull market, and similarly, total collapse is not in the cards as the economy adjusts to a permanently lower level of consumption and production.
Now, we just ride the waves. Understand I was saying much the same for the last six months, and yet everyone has not believed me.
It is almost not worth watching the markets right now. Look at the metals markets- boring. Look at oil- you have to go out to next summer for $60 oil- if it makes it by then.
Or manufactured bounce? Same ZeroHedge quotes David Rosenberg: We have talked to so many bewildered clients about the massive equity market rally from the March lows that we’ve lost count. Few, if any (especially in the hedge fund community) seem to be celebrating the fact that the S&P 500 has rallied 30%, which tells us that big-money investors have been on the sidelines through this entire move. From our lens – and you can see this clearly from the twice-monthly NYSE data – the buying power for this market has actually come from severe short-covering as the bears head for the hills.
Who triggered the short squeeze with the big money staying on sidelines? Cui bono?
Got to love The Daily Show, going to go see him July 20th. I especially like how all the shows splice and make use of the officials words to make them sound completely out of there context. It truly is hilarious. It's not Swine Flu its H1N1, H1M1, and hopefully the pork industry doesn't suffer, ha. How well do you think the Obama administration handled the Swine Flu outbreak as far as containment, news publications, and government aid for research? I think it was around 1.3 billion that was given out...
Back and forth will wear everybody out. I think it will be years before inflation is sufficient to reestablish a real bull market, and similarly, total collapse is not in the cards as the economy adjusts to a permanently lower level of consumption and production.
Economy hasn't made the adjustment yet Allen - I can see how it might - but it hasn't yet.
Economy hasn't made the adjustment yet Allen - I can see how it might - but it hasn't yet.
That's what I see, too. Layoffs are not over yet by a long shot. Exports are plummeting. The reality is that much of what should have been consumed in 2009-2010 was consumed in 2006-07, so more downward adjustments seem to be necessary.
With that cheerful thought - good night, all
"Buffett is not supposed to know about the stress tests results as they have not been made public yet, but it sounds he got a whiff of the Well Fargo 's result and is trying to downplay its importance."
He does not need the results leaked although he probably does know them already. You can bet from the first day the stress tests were announced he had a crack team of financial engineers and academic researchers looking at a dozen different reverse engineered models and every published paper or dissertation from Timmay's staff.
That's just it -- a permanently lower level of consumption and production does not allow the Fed to stop monetizing Treasuries and Agencies. Remember the story of Icarus?
here's one for you guys - higher interest rates without commodity inflation. why not? based on credit risk alone, it makes sense. we had rates steady to lower while crude tripled 2002-2008.
I watched with some amusement as analysts decided that reduced Inventories in the GDP data boded well for future GDP figures. While, all else equal, certainly lower would be better, the fact is we are slashing inventories (and trying to do so even more) because there are no orders. None. We do take "orders" (non-binding, no cash down payment) which are what is optimistically shared with the Street but binding orders with cash down payments do not exist today, haven't for over 8 months now. When one lands it is company news and because a government entity somewhere backed it. And trust me, if we aren't getting orders neither are the next 5 guys.
I suppose either the analysts - and the market, which has been juicing our stock (thanks for that) - are correct and the orders are about to start rolling in, or they are going to be somewhat disappointed later this year when our backlog starts to run dry. I hope they're right. But I assure you the absolute last thing that's going to happen is for us to start growing inventories without the orders - that strategy can only possibly be conceived in a cubicle somewhere, occupied by someone that never worked in a real job.
Citizen AllenM and crispyandcole will keep this from being an echo chamber. Good.
Citizen AllenM, you must promise to return and admit your mistakes (a la Sebastian) if & when the market tanks again. Promise?
Methinks that there's too much happiness in the MSM. Meanwhile, there's too little earnings at companies, too little government revenue, too much debt everywhere, too much crap on the Fed balance sheet already to hold it all.
I do not believe that humans, as a group, make the right decisions for the right reasons. They do it because all other options have been tried and have failed.
Slavery did not end because people developed a conscience. It ended because machines and technology made it a liability.
The 'New Deal' did not happen because capitalists saw the error of their ways. It happened because the options were so much more worser.
//Lucifer is quite comical- he expects political processes to yield to rationality.//
This Country is toast...might as well pour some gas on it yourselves so you can at least say, for O's sake, you did your part.....We have no future, no morality, no hope, and NO F-ing change. Do you see any truth flowing from the halls of DC? Do you see any financial transparency? Do you think this is just bitchin' and moaning? Things are so out of hand that the crooks are scared to even admit it's a little whacked out. All they say is things are bad and IMPROVING...Tell that to the 600K losing their f-ing jobs each month, the homeowners who are loosing 15% EACH QUARTER on their home values, and my friends that have become unemployed. What fucking rock do you people live under? Do you actually go to a place besides your home or office? Look around....Do you see prosperity or complete economic decay? Shit man...Rome wasn't built in a day. This thing is gonna take some time to implode but rest assured a house built on sand will not stand. Discount this comment all you want but I am a realist and I work in the real estate industry and know what I am talking about. There are no jobs and the people fortunate to still have one are looking to dump their biggest asset (house) if things don't get better and I mean sending the keys to the bank NOT sell it! I am so sick of all the Obama suck fest going on and mental masturbation over GDP...M3 supply....Common sense tells you if people are out of work, up to their nostrils in debt, and scared.....NO PRESIDENT or Magical Fairy can help them. It's simply toast and we are heading into the abyss where no one has sailed before. So, if anyone is telling you they have a handle on this and can predict how things are going to turn out....PUNCH THEM IN THE FACE. They are not your friend....A friend would tell you to do all you can to be debt free and prepared for the WORST.
I don't see a direct correlation. I expect commodities to rise as they are globally produced and consumed and thus very sensitive to exchange rates. OTOH, interest rates can be artificially restrained by the Fed even as the dollar tanks through more monetization. Of course, those two conditions cannot continue to occur ad infinitum, thus my expectation of the dollar's failure.
It would be nice to hear where this recovery would supposedly come from? Effectively whopping ONE MILLION jobs are lost every month now (counting full-time -> now part-time jobs) and losses are widespread, covering almost every sector. Except maybe new government workers, hired to take care of the vast number of new unemployment claims...
Baby boomers are already retiring and do not earn nearly as much from pensions than during their peak earning years. They are also replaced by younger ones who earn much less with less secure jobs. They are also already heavily indebted and will be trying to pay back those for years to come.
TJ and The Bear (profile) wrote on Sat, 5/2/2009 - 10:52 pm reply Ignore user
dryfly,
Does Boeing really have "inventory"? They only build planes for which they have orders.
Don't you recall the aerial maps of Mojave? Inventory does not know on who's book it resides.
China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.
I fully expect a major Treasury auction failure within the next few years, but there's always the chance it could be within the next few weeks. Maybe the Chinese have looked at the hole they're in and are hesitating on further digging?
That's okay; they'll just raise $4.6864T in fees from all the responsible banks. Gotta love a system where government forces the good banks down with the bad ones.
its not that bad. you can still shop at aldi's and you can still get unemployment insurance and live in subsidized housing. maybe youll be unemployed or have a crappy job and youre family will suffer, but being poor builds character! youll still likely have more money than those starving in the third world. and you can watch tv and take anti depressants if it gets even worse. dont worry everything will be fine. and if it gets so bad, im sure a war or some catastrophe will come to keep us occupied. they know what theyre doing, and doing a damn fine job up there in washington and wall street! stop complaining.
I said he was a hero and he died broke. What I didn't say and what really pisses me off is how we're giving millions of dollars to people who think you're a fool to do anything for this country.
I don't get it, probably for different reasons than many here, but I just don't get it. Those bankers wouldn't lift a finger in the defense of this country and they probably sneer at those who do. They wouldn't do a goddamn thing that didn't make money they put in their pockets, but we're supposed to believe they're special. The decline is well underway.
Educators in our Oregon county are meeting to figure out how to cut the necessary 30% from the 2009-2010 budget. Schools will be closed/merged, teachers laid off, school year shortened (even more), sports programs eviscerated, class sizes increasing by 10 students per.
State funding is being chopped by that much.
30%. From schools. This is not real estate, or manufacturing, or finance. It is one of the safest (and most politically-sacred) occupations in the United States.
In my opinion, if schools have to take this kind of hit, the rest of the economy is screwed. The bottom is so far below us we can assume it doesn't exist.
I work at a quant equity firm. Process works fine when markets function properly. We are being hammered right now. Bounce? Who cares - we get hired to deliver alpha. We have many accounts with double digit negative alpha over the last year and the last quarter has not been kind. Lots of clients have been with us for years and cling to hope, but every week someone else sacks us. Our AUM is down to a third of what it was a year ago. Yet we still have the same number of people employed. How long can this go on? Everyone is still in denial and drinking the green shoots koolaid, but the reality is if normality doesn't return soon there will be ever escalating account losses and job losses. We can't be the only firm like this - I imagine it is the same all over the City and Wall Street...
" We can't be the only firm like this - I imagine it is the same all over the City and Wall Street..."
I checked with The Authorities.
They said, "Yes, you're the only firm like this", everyone else is fine.
I like AllenM's premise that we won't see a "Mad Max" economy, we're going to get a "Groundhog Day" economy instead, where nothing ever changes, no recovery in sight, year after year after year. Yeah, thanks for the cheery outlook, Allen.
Yay. Just realized I was stupidly cutting some MDF or LDF in my apartment tonight. Without a respirator to boot., even though I saw a number of them at Home Depot (I had planned to just work outside, but I'm a dumas). Popped open all the windows I could stand to open. I suppose this is what happens when an EE attempts to ply his hand at some mechanical work.
a) Don't understand the potential toxicity of the material I was working with, particularly small particle effects
b) Worked in a tight workspace (I've got a ton of space outside on my porch; just didn't realize that using a mini-hacksaw would create such a loud noise and didn't want to bother the apartment complex.
Not so sure what that material was actually, but no doubt it just wasn't wood given the way it cut like layers of paper glued together would cut. Although given the fact that all I did was make a 28 sq inch hole a 80 sq inch hole... probably nothing to worry about. I've now improved my 10 year old computer desk immensely and opened up some potential airflow..
That will be called death sentence couple of years from now when you say that aloud. Wall Street fucked up the real economy for good and people are going to be very angry...
On Thursday a pandemic was upon us, car companies broke, banks broke and gdp poopie. I read the paper today and the biggest problem is overpraising the awesome Obama and his wonder dog. WTF?
My career's in pretty much danger too... not just this specific job, but the whole career path, I think. Our customer base reflected the disproportionate influence of finance and now that's fallen off a cliff.
It would shock me to still have this job in 7 months (end of the year).
Well, I've done what I can. I've cut expenses, saved and there's no debt. Not a single discretionary dime has gone out of this house since, well, the Nazcrash. Everything important is paid for. I'm loading up on preventative medical care in anticipation of losing insurance. I have a chunk of farmland ready to go, if necessary.
Even Shakespeare's gloomiest trajedy has some comic relief in it.
I love the recruiting gay sex thing.
The amusing thing is the unlying assumption that gay sex--for everyone--is more pleasurable
and exciting that straight sex. Otherwise, having tried it a coupla times, the straight would go back to straight sex, right?
And to think that in twenty years, Jon Stewart has gone from hosting a TV show on the Comedy Channel to hosting a TV show on Comedy Central, yet everything has completely changed.
You might find this amusing. This is the front page of todays Sunday Chicago Tribune. In fact, it is in such a large font that this editorial and a story about a man trying to get public records are the only things on the front page of the Tribune. I think the editorial board is mighty pissed off today.
Think back to Dec. 9, to the humiliation of Illinois. Federal authorities said your governor tried to extort contributions from a children's hospital exec -- and tried to peddle Barack Obama's Senate seat. What the Department of Justice now calls "The Blagojevich Enterprise" astonished you. The lawmakers you pay to govern had reason to fear that you would rebel against the lot of them. Many of them pledged that they would move quickly to end the Illinois culture of political sleaze.
Yet as of early May, with only four weeks to go in this legislative session, they've done next to nothing. A graphic in Tuesday's Tribune detailed, issue by urgent issue, the refusal thus far of your lawmakers to curb their own power or otherwise reform this supremely corruptible government. You remember their pandering promises? You thought their lip service was legit? The sly sluggishness in Springfield suggests you're on the short end of your lawmakers' deceits.
OK, is the message to take from this: if this really is the situation (and I'm convinced right now), then why not just throw the retirement money into mostly mutual funds, and some stocks, and some bonds? You're not going to do any better thinking and analyzing.
or
Thinking and analyzing will put you ahead of the crowd. You can't afford NOT to pay constant attention to your personal finances.
I find it interesting that I don't know which is the message of this article.
WASHINGTON -- Citigroup Inc. may need to raise as much as $10 billion in new capital, according to people familiar with the matter, as the government continues negotiations with banks over the results of its so-called stress tests
An interesting interview with Obama in The NYTimes
Obama seems to be quite aware of the broad criticism of his economic policies. So, I guess, either he is deluded by thinking that his team represents all valid points of view or things are screwed up much worse than they appear, not just economically but, more importantly, politically
A longish quote
I want to talk broadly about policy. When you and I spoke during the campaign, you made it clear that you had thought a lot about the economic debates within the Clinton administration. And you said that you wanted to have a Robert Rubin type and a Robert Reich type having a vigorous debate in front of you. And clearly you have a spectrum of Democrats within your economic-policy team.
THE PRESIDENT: But I don’t have Paul Krugman or Joseph Stiglitz.
No, this wasn’t about them. But they have made it clear that they are not working in your administration, haven’t they?
But in your inner circle, it really is dominated by Rubin protégés. And I’d be interested if —
THE PRESIDENT: You know, the — I mean, look, Larry Summers and Tim Geithner obviously worked at Treasury under Rubin.
And Peter Orszag, I think.
THE PRESIDENT: And Orszag — fair enough. You know, Christy Romer didn’t.
Jared Bernstein doesn’t — and Jared sits here every morning as part of my economic team. And Austan Goolsbee doesn’t.
I mean, the truth is that what I’ve been constantly searching for is a ruthless pragmatism when it comes to economic policy. It is probably true that, given the financial crisis that had arisen, that the fact that both Tim and Larry had familiarity with financial crises was a plus, because I thought that we needed some people who could hit the ground running and would be comfortable dealing with some very large and difficult economic issues. And frankly, that list is pretty small, because the last Democratic president we had was Bill Clinton; he was on the scene for eight years, and for a big chunk of that time, Bob Rubin was his primary economic-policy maker. So it’s not surprising that anybody who had experience in those fronts was going to be coming out of a shop that would have been influenced by that.
Keep in mind, though, I mean, I have enormous respect for somebody like Joe Stiglitz. I read his stuff all the time. I actually am looking forward to having these folks in for ongoing discussion. Somebody who has enormous influence over my thinking is Paul Volcker, who is robust enough that, having presided over the Carter and Reagan years, he’s still sharp as a tack and able to give me huge advice and to provide some counterbalance.
The last point I’d make, though, is I think that — and I may have mentioned this to you — but now that I think about it, maybe it was post-election. When I first started having a round table of economic advisers, and Bob Reich was part of that, and he was sitting across the table from Bob Rubin and others, what you discovered was that some of the rifts that had existed back in the Clinton years had really narrowed drastically.
They agree a lot more than they used to, but not entirely.
THE PRESIDENT: Not entirely. But, I mean, the fact is that Larry Summers right now is very comfortable making arguments, often quite passionately, that Bob Reich used to be making when he was in the Clinton White House. Now Larry might not like me saying that —
Larry Summers is the new Bob Reich —
THE PRESIDENT: — that he’s become a soft touch. But, no, I think that one of the things that we all agree to is that the touchstone for economic policy is, does it allow the average American to find good employment and see their incomes rise; that we can’t just look at things in the aggregate, we do want to grow the pie, but we want to make sure that prosperity is spread across the spectrum of regions and occupations and genders and races; and that economic policy should focus on growing the pie, but it also has to make sure that everybody has got opportunity in that system.
I also think that there’s very little disagreement that there are lessons to be learned from this crisis in terms of the importance of regulation in the financial markets. And I think that this notion that there is somehow resistance to that — to those lessons within my economic team — just isn’t borne out by the discussions that I have every day.
If anything, the only thing I notice, I think, that I do think is something of a carry-over from Bob Rubin — I see it in Larry, I see it in Tim — is a great appreciation of complexity
And a willingness to admit what you don’t know, in many cases.
THE PRESIDENT: Yes, exactly. And so what that means is that, as we’re making economic policy, I think there is a certain humility about the consequences of the actions we take, intended and unintended, that may make some outside observers impatient. I mean, you’ll recall Geithner was just getting hammered for months. But he, I think, is very secure in saying we need to get these things right, and if we act too abruptly, we can end up doing more harm than good. Those are qualities that I think have been useful.
....
It is true that as tough an economic time as it is right now, we haven’t had 42 months of 20, 30 percent unemployment. And so the degree of desperation and the shock to the system may not be as great. And that means that there’s going to be more resistance to any of these steps: reforming the financial system or reforming our health care system or doing something about energy. On each of these things — you know, things aren’t so bad in the eyes of a lot of Americans that they say, We’re willing to completely try something new.
But part of my job I think is to bridge that gap between the status quo and what we know we have to do for our future.
Foist!
DRINK
HOT MONKEYS BE DAMNED !!!
its not that bad ppl! cheer up!
F&*$ the xyz industry. No industry should have a say in what the media does. The Daily Show presents the monty python reality we live in again so we can laugh at ourselves. Glad that show exists.
It is bad, its going to get worse, much worse all horses lose money, only rent boats....hoard guns, money, and food. Shoot first, ask questions later.
and drink from the fountain spewing digital kool-aid of omnipotence.
dont spill your beverage.
After that last thread, we need some rock blogging.
From the previous thread -
q: how will the Fed unload USTs and/or other assets without inflationary effects?
a: they'll create SPEs with the worst elements of private and public characteristics, if they need to do it at all. more likely, they'll sit on all of the assets they accumulate until they are almost totally worthless. in any case, inflation needs to be pushed through wages and commodities. i don't see that happening under any scenario. genuine dollar devaluation is a slightly different matter, but what alternative commodity or currency will lead that? and, let's say gold goes to $5000 but oil stays at $50 - really a tree falling in the forest with no one to hear...
and as for the list of non-boomers - Charley Pride AND Ray Charles are both seminal country artists. In fact, they may well define the genre. Right?
Reposting from the previous thread that just went dead
Some weird quotes from Warren Buffett on Fed's stress tests and Wells Fargo:
May 2 ( Bloomberg )
Berkshire Hathaway Inc. Chairman Warren Buffett dismissed the importance of government stress tests in helping him assess banks, and said Wells Fargo & Co. will prosper no matter what the results show.
“I think I know their future, frankly, better than somebody that comes in to take a look,” Buffett today said of the bank stocks that Omaha, Nebraska-based Berkshire owns. Regulators “may be using more of a checklist-type approach.”
...
Buffett said he instead judges banks by their “dynamism” and their ability to attract deposits, and singled out San Francisco-based Wells Fargo as a “fabulous” company.
“If you look at Coca-Cola today, for example, and just looked at a balance sheet, it wouldn’t tell you anything at all about Coca-Cola,” the billionaire investor said today in a Bloomberg Television interview before Berkshire’s annual meeting. “It’s what the product is.”
Just wow. Buffett surely knows how important bank balance sheets are to the regulators and to the rating agencies (two of which, btw, downgraded Berkshire from AAA recently). The return on equity for banks critically depends on how much equity banks must hold, and that affects their value.
Buffett is not supposed to know about the stress tests results as they have not been made public yet, but it sounds he got a whiff of the Well Fargo 's result and is trying to downplay its importance.
Outsider: Here ya go....rock on!
YouTube - Cat Stevens - Another Saturday Night (live)
organized crime with a love song soundtrack (thanks
munch)
YouTube - Orange Blossoms Video JJ Grey and MOFRO
I hope everyone is having a nice Saturday night - it was relaxing today - I'm sure next week will be exciting!
best to all
Would this be the Canadian thread?
Comedy Central Official Site - Your Source for Comedians, Funny Video, TV Shows, Games, Jokes, & Ringtones | Comedy Central
[Buffett is not supposed to know about the stress tests results as they have not been made public yet, but it sounds he got a whiff of the Well Fargo 's result and is trying to downplay its importance]
That's my read on his shrill cries too.
I'm sure next week will be exciting!
Mmm... Stress tests... Coming home to roost... Unless the announcement is delayed again, that is
the stress tests WILL be released next week
but
they will be in code
... ---...
Geithner's dog is going to eat the stress test results, so we will get only an abstract of the results.
This afternoon I talked with a relative of mine who I hadn't seen in quite a while. He's an executive at a modestly-sized regional bank, yet a very nice down to earth guy. In the course of our conversation, he mentioned a few things that really stood out:
- They had wondered for years how other banks were offering the rates and loans they did, and are pretty frustrated at all the bailouts and preferential treatment those same banks are now getting.
- The FDIC has informed them that their premiums will slightly more than triple next year.
- All the executives cringe every time Geithner opens his mouth; they wonder what new way of screwing them he's come up with. We both had a good chuckle at that one.
Anyway, the FDIC premium increase sounded pretty crazy to me.
41 ready to comment, post headlines, and deconstruct the construction. yet a quiet calm persists.
the sad love songs
A Proud American Man
singing spotlights
"Dont haiku me, Bro!"
I broke my "edit" cherry!!
DRINK
they will be in code
... ---...
I believe the correct code is
-.. --- -. .----. - / .-- --- .-. .-. -.-- / -... . / .... .- .--. .--. -.-- / -. --- .--
What about using the south park beheaded chicken method of divining the solvency of our financial institutions. At least it is less rigged.
Mr M
i have to worry because
.-- . / .- .-. . / --- -. / - .... . / . ...- . / --- ..-. / -.. . ... - .-. ..- -.-. - .. --- -.
Patience. This next phase will take quite a while.
Everyone here is jumping waaaaay too fast to the conclusion.
Lucifer is quite comical- he expects political processes to yield to rationality.
Har.
Not on this planet. Go to the Star Trek universe.
Jas is probably perturbed his one way on bonds is looking like it reversed.
The Fed is really happy commodities have been stabilized through defenestration of the hedge funds.
Meanwhile, still mostly long, except for one lousy put.
Warned you all about that velvet fist of government- now everybody wants to complain on Wall Street- well they flocked it royally, and made main street suffer big time, now the pound of flesh will be due.
Just watch this stuff drag on as summer starts.
Still too much armageddon fantasy here.
Someday this war's gonna end...
YouTube - Bobby McFerrin - Don't Worry Be Happy
in english
mock turtle - It may be for the better, actually - it may force an lasting soluting instead of a band-aid
It took the Great Depression to create reforms such as FDIC, Glass-Steagall, Social Security
@Citizen AllenM ...........+1............
"It took the Great Depression to create reforms such as FDIC, Glass-Steagall, Social Security "
and it took 2 baby boomer presidents to dismantle all of the above...
The 1974/1981 recessions are well documented. The current recession is still in progress.
Shouldn't we be comparing pain experienced during the1974 recession with what we will eventually suffer in the current recession?
AllenM,
You're reading way too much into (as ZeroHedge puts it) a "purely technical bounce" in the market that most of us expected. Could be over with "go away in May" or could hold up until September or October. Nonetheless, the next leg down's going to be a real b!tch.
and it took 2 baby boomer presidents to dismantle all of the above...
Only took 2 presidents; ain't we Boomers great.
Now for our next act, we will...
TJ, it won't be much- we are now entering into a very Japanese period- it will go up a bit more and fall back, and then everyone will bet on doom and get clipped.
Back and forth will wear everybody out. I think it will be years before inflation is sufficient to reestablish a real bull market, and similarly, total collapse is not in the cards as the economy adjusts to a permanently lower level of consumption and production.
Now, we just ride the waves. Understand I was saying much the same for the last six months, and yet everyone has not believed me.
It is almost not worth watching the markets right now. Look at the metals markets- boring. Look at oil- you have to go out to next summer for $60 oil- if it makes it by then.
Now, I have to get to bed- nitey night.
You may now return to disaster 24/7.
Someday this war's gonna end...
"purely technical bounce"
Or manufactured bounce? Same ZeroHedge quotes
David Rosenberg:
We have talked to so many bewildered clients about the massive equity market rally from the March lows that we’ve lost count. Few, if any (especially in the hedge fund community) seem to be celebrating the fact that the S&P 500 has rallied 30%, which tells us that big-money investors have been on the sidelines through this entire move. From our lens – and you can see this clearly from the twice-monthly NYSE data – the buying power for this market has actually come from severe short-covering as the bears head for the hills.
Who triggered the short squeeze with the big money staying on sidelines? Cui bono?
Got to love The Daily Show, going to go see him July 20th. I especially like how all the shows splice and make use of the officials words to make them sound completely out of there context. It truly is hilarious. It's not Swine Flu its H1N1, H1M1, and hopefully the pork industry doesn't suffer, ha. How well do you think the Obama administration handled the Swine Flu outbreak as far as containment, news publications, and government aid for research? I think it was around 1.3 billion that was given out...
-Best regard,
Michael Fridman
The “MAN” Experience
Back and forth will wear everybody out. I think it will be years before inflation is sufficient to reestablish a real bull market, and similarly, total collapse is not in the cards as the economy adjusts to a permanently lower level of consumption and production.
Economy hasn't made the adjustment yet Allen - I can see how it might - but it hasn't yet.
Economy hasn't made the adjustment yet Allen - I can see how it might - but it hasn't yet.
That's what I see, too. Layoffs are not over yet by a long shot. Exports are plummeting. The reality is that much of what should have been consumed in 2009-2010 was consumed in 2006-07, so more downward adjustments seem to be necessary.
With that cheerful thought - good night, all
"Buffett is not supposed to know about the stress tests results as they have not been made public yet, but it sounds he got a whiff of the Well Fargo 's result and is trying to downplay its importance."
He does not need the results leaked although he probably does know them already. You can bet from the first day the stress tests were announced he had a crack team of financial engineers and academic researchers looking at a dozen different reverse engineered models and every published paper or dissertation from Timmay's staff.
That's just it -- a permanently lower level of consumption and production does not allow the Fed to stop monetizing Treasuries and Agencies. Remember the story of Icarus?
here's one for you guys - higher interest rates without commodity inflation. why not? based on credit risk alone, it makes sense. we had rates steady to lower while crude tripled 2002-2008.
Update plot of A/H1N1 cases and country count from earlier this afternoon for those interested.
energyecon: Laboratory Confirmed A/H1N1 Cases - update
Stolen from Financial Armageddon:
Financial Armageddon
I watched with some amusement as analysts decided that reduced Inventories in the GDP data boded well for future GDP figures. While, all else equal, certainly lower would be better, the fact is we are slashing inventories (and trying to do so even more) because there are no orders. None. We do take "orders" (non-binding, no cash down payment) which are what is optimistically shared with the Street but binding orders with cash down payments do not exist today, haven't for over 8 months now. When one lands it is company news and because a government entity somewhere backed it. And trust me, if we aren't getting orders neither are the next 5 guys.
I suppose either the analysts - and the market, which has been juicing our stock (thanks for that) - are correct and the orders are about to start rolling in, or they are going to be somewhat disappointed later this year when our backlog starts to run dry. I hope they're right. But I assure you the absolute last thing that's going to happen is for us to start growing inventories without the orders - that strategy can only possibly be conceived in a cubicle somewhere, occupied by someone that never worked in a real job.
Citizen AllenM and crispyandcole will keep this from being an echo chamber. Good.
Citizen AllenM, you must promise to return and admit your mistakes (a la Sebastian) if & when the market tanks again. Promise?
Methinks that there's too much happiness in the MSM. Meanwhile, there's too little earnings at companies, too little government revenue, too much debt everywhere, too much crap on the Fed balance sheet already to hold it all.
NorkaWest - Boeing?
Citizen AllenM,
I do not believe that humans, as a group, make the right decisions for the right reasons. They do it because all other options have been tried and have failed.
Slavery did not end because people developed a conscience. It ended because machines and technology made it a liability.
The 'New Deal' did not happen because capitalists saw the error of their ways. It happened because the options were so much more worser.
//Lucifer is quite comical- he expects political processes to yield to rationality.//
This Country is toast...might as well pour some gas on it yourselves so you can at least say, for O's sake, you did your part.....We have no future, no morality, no hope, and NO F-ing change. Do you see any truth flowing from the halls of DC? Do you see any financial transparency? Do you think this is just bitchin' and moaning? Things are so out of hand that the crooks are scared to even admit it's a little whacked out. All they say is things are bad and IMPROVING...Tell that to the 600K losing their f-ing jobs each month, the homeowners who are loosing 15% EACH QUARTER on their home values, and my friends that have become unemployed. What fucking rock do you people live under? Do you actually go to a place besides your home or office? Look around....Do you see prosperity or complete economic decay? Shit man...Rome wasn't built in a day. This thing is gonna take some time to implode but rest assured a house built on sand will not stand. Discount this comment all you want but I am a realist and I work in the real estate industry and know what I am talking about. There are no jobs and the people fortunate to still have one are looking to dump their biggest asset (house) if things don't get better and I mean sending the keys to the bank NOT sell it! I am so sick of all the Obama suck fest going on and mental masturbation over GDP...M3 supply....Common sense tells you if people are out of work, up to their nostrils in debt, and scared.....NO PRESIDENT or Magical Fairy can help them. It's simply toast and we are heading into the abyss where no one has sailed before. So, if anyone is telling you they have a handle on this and can predict how things are going to turn out....PUNCH THEM IN THE FACE. They are not your friend....A friend would tell you to do all you can to be debt free and prepared for the WORST.
higher interest rates without commodity inflation
I don't see a direct correlation. I expect commodities to rise as they are globally produced and consumed and thus very sensitive to exchange rates. OTOH, interest rates can be artificially restrained by the Fed even as the dollar tanks through more monetization. Of course, those two conditions cannot continue to occur ad infinitum, thus my expectation of the dollar's failure.
It would be nice to hear where this recovery would supposedly come from? Effectively whopping ONE MILLION jobs are lost every month now (counting full-time -> now part-time jobs) and losses are widespread, covering almost every sector. Except maybe new government workers, hired to take care of the vast number of new unemployment claims...
Baby boomers are already retiring and do not earn nearly as much from pensions than during their peak earning years. They are also replaced by younger ones who earn much less with less secure jobs. They are also already heavily indebted and will be trying to pay back those for years to come.
Dryfly: don't know. It could be any big ticket capital goods manufacturer with long lead times between initial order and delivery.
dryfly,
Does Boeing really have "inventory"? They only build planes for which they have orders.
TJ and The Bear (profile) wrote on Sat, 5/2/2009 - 10:52 pm reply Ignore user
dryfly,
Does Boeing really have "inventory"? They only build planes for which they have orders.
Don't you recall the aerial maps of Mojave? Inventory does not know on who's book it resides.
Also from Panzner (@ When Giants Fall: Taking Advantage? )
China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.
I fully expect a major Treasury auction failure within the next few years, but there's always the chance it could be within the next few weeks. Maybe the Chinese have looked at the hole they're in and are hesitating on further digging?
Dawg,
I'll grant you there is more aircraft supply than demand, but after reading the original Blodget article it just doesn't sound like Boeing to me.
FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion Deposit Insurance Fund. This is Like Going into a Hurricane with a 99 Cent Store Umbrella.
FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion Deposit Insurance Fund. This is Like Going into a Hurricane with a 99 Cent Store Umbrella.
FFDIC
Enlightening
Energyecon
Why the name change? Nice graph
FFDIC,
That's okay; they'll just raise $4.6864T in fees from all the responsible banks. Gotta love a system where government forces the good banks down with the bad ones.
1976 Swine Flu ad (via Patrick.net)
YouTube - 1976 Swine Flu Propaganda
FFDIC
Leverage moves from the private sector to the public.
....LAT : WHO expected to raise flu alert to phase 6....
Top Stories Item
.....energyecon.....Korean local English newspaper said 2 confirmed , 1 suspect cases....update your blog......
UNITED STATES DECLARATION OF INSOLVENCY
DECLARATION OF INSOLVENCY AS TO
OBLIGATIONS PAYABLE TO THE FEDERAL RESERVE BANKS:
UNITED STATES' DECLARATION OF INSOLVENCY
its not that bad. you can still shop at aldi's and you can still get unemployment insurance and live in subsidized housing. maybe youll be unemployed or have a crappy job and youre family will suffer, but being poor builds character! youll still likely have more money than those starving in the third world. and you can watch tv and take anti depressants if it gets even worse. dont worry everything will be fine. and if it gets so bad, im sure a war or some catastrophe will come to keep us occupied. they know what theyre doing, and doing a damn fine job up there in washington and wall street! stop complaining.
Want to finish a thought from the last thread.
I said he was a hero and he died broke. What I didn't say and what really pisses me off is how we're giving millions of dollars to people who think you're a fool to do anything for this country.
I don't get it, probably for different reasons than many here, but I just don't get it. Those bankers wouldn't lift a finger in the defense of this country and they probably sneer at those who do. They wouldn't do a goddamn thing that didn't make money they put in their pockets, but we're supposed to believe they're special. The decline is well underway.
Wait a minute, what does that mean exactly?
Educators in our Oregon county are meeting to figure out how to cut the necessary 30% from the 2009-2010 budget. Schools will be closed/merged, teachers laid off, school year shortened (even more), sports programs eviscerated, class sizes increasing by 10 students per.
State funding is being chopped by that much.
30%. From schools. This is not real estate, or manufacturing, or finance. It is one of the safest (and most politically-sacred) occupations in the United States.
In my opinion, if schools have to take this kind of hit, the rest of the economy is screwed. The bottom is so far below us we can assume it doesn't exist.
Oh, yeah. My wife's ex-husband was just laid off.
He worked selling Toyota parts, full-time for twelve years--in one of the wealthiest CA counties.
I understand that even rich people are buying fewer new cars. But PARTS?
I work at a quant equity firm. Process works fine when markets function properly. We are being hammered right now. Bounce? Who cares - we get hired to deliver alpha. We have many accounts with double digit negative alpha over the last year and the last quarter has not been kind. Lots of clients have been with us for years and cling to hope, but every week someone else sacks us. Our AUM is down to a third of what it was a year ago. Yet we still have the same number of people employed. How long can this go on? Everyone is still in denial and drinking the green shoots koolaid, but the reality is if normality doesn't return soon there will be ever escalating account losses and job losses. We can't be the only firm like this - I imagine it is the same all over the City and Wall Street...
More great television:
Eric Weinstein, Roubini, Freeman, Taleb at the Perimeter Intitute talking about "everything."
NoPopupRedirector
You can see other videos from this conference by searching at PIRSA - Perimeter Institute Recorded Seminar Archive Use number 1. Catch up: and choose Weekly/Other.
" We can't be the only firm like this - I imagine it is the same all over the City and Wall Street..."
I checked with The Authorities.
They said, "Yes, you're the only firm like this", everyone else is fine.
I like AllenM's premise that we won't see a "Mad Max" economy, we're going to get a "Groundhog Day" economy instead, where nothing ever changes, no recovery in sight, year after year after year. Yeah, thanks for the cheery outlook, Allen.
Yay. Just realized I was stupidly cutting some MDF or LDF in my apartment tonight. Without a respirator to boot., even though I saw a number of them at Home Depot (I had planned to just work outside, but I'm a dumas). Popped open all the windows I could stand to open. I suppose this is what happens when an EE attempts to ply his hand at some mechanical work.
a) Don't understand the potential toxicity of the material I was working with, particularly small particle effects
b) Worked in a tight workspace (I've got a ton of space outside on my porch; just didn't realize that using a mini-hacksaw would create such a loud noise and didn't want to bother the apartment complex.
Not so sure what that material was actually, but no doubt it just wasn't wood given the way it cut like layers of paper glued together would cut. Although given the fact that all I did was make a 28 sq inch hole a 80 sq inch hole... probably nothing to worry about. I've now improved my 10 year old computer desk immensely and opened up some potential airflow..
"I work at a quant equity firm."
That will be called death sentence couple of years from now when you say that aloud. Wall Street fucked up the real economy for good and people are going to be very angry...
ylsp, you are a wild man cutting with power tools in an apartment in the wee sunday morning hours.
if you want to really open up your desk try these:
Amazon.com: Lx Dual Desk Mount Arm, Black: Electronics
and lay off the meth.
@Michael,
I don't get the declaration of insolvency stuff. Can you provide some context?
On Thursday a pandemic was upon us, car companies broke, banks broke and gdp poopie. I read the paper today and the biggest problem is overpraising the awesome Obama and his wonder dog. WTF?
My career's in pretty much danger too... not just this specific job, but the whole career path, I think. Our customer base reflected the disproportionate influence of finance and now that's fallen off a cliff.
It would shock me to still have this job in 7 months (end of the year).
Well, I've done what I can. I've cut expenses, saved and there's no debt. Not a single discretionary dime has gone out of this house since, well, the Nazcrash. Everything important is paid for. I'm loading up on preventative medical care in anticipation of losing insurance. I have a chunk of farmland ready to go, if necessary.
Even Shakespeare's gloomiest trajedy has some comic relief in it.
I love the recruiting gay sex thing.
The amusing thing is the unlying assumption that gay sex--for everyone--is more pleasurable
and exciting that straight sex. Otherwise, having tried it a coupla times, the straight would go back to straight sex, right?
Wake up! Wake up!!
Liz needs amusement.
Too many tasty beverages consumed?
Wake up!!!!!!!
Poo.
Off to plant a Marigold or 2.
Sterlinggirl, contact me, I think our fim (another part than mine) might be useful to a quant equity shop like yours
And to think that in twenty years, Jon Stewart has gone from hosting a TV show on the Comedy Channel to hosting a TV show on Comedy Central, yet everything has completely changed.
I ARISE
Since this is an open thread...
You might find this amusing. This is the front page of todays Sunday Chicago Tribune. In fact, it is in such a large font that this editorial and a story about a man trying to get public records are the only things on the front page of the Tribune. I think the editorial board is mighty pissed off today.
Think back to Dec. 9, to the humiliation of Illinois. Federal authorities said your governor tried to extort contributions from a children's hospital exec -- and tried to peddle Barack Obama's Senate seat. What the Department of Justice now calls "The Blagojevich Enterprise" astonished you. The lawmakers you pay to govern had reason to fear that you would rebel against the lot of them. Many of them pledged that they would move quickly to end the Illinois culture of political sleaze.
Yet as of early May, with only four weeks to go in this legislative session, they've done next to nothing. A graphic in Tuesday's Tribune detailed, issue by urgent issue, the refusal thus far of your lawmakers to curb their own power or otherwise reform this supremely corruptible government. You remember their pandering promises? You thought their lip service was legit? The sly sluggishness in Springfield suggests you're on the short end of your lawmakers' deceits.
At last, an excuse to clean up most (all?) of my personal financial bookmarks: FINANCIAL EXPERTS DON'T KNOW ANY MORE THAN I DO.
The End of Personal Finance | The Big Money
OK, is the message to take from this: if this really is the situation (and I'm convinced right now), then why not just throw the retirement money into mostly mutual funds, and some stocks, and some bonds? You're not going to do any better thinking and analyzing.
or
Thinking and analyzing will put you ahead of the crowd. You can't afford NOT to pay constant attention to your personal finances.
I find it interesting that I don't know which is the message of this article.
TBTF = Critical Sinkers
9/11: Fear came in the form of 19 men that that killed 3,000
Today: Fear comes in the form of 19 banks that are on the verge of being killed
WASHINGTON -- Citigroup Inc. may need to raise as much as $10 billion in new capital, according to people familiar with the matter, as the government continues negotiations with banks over the results of its so-called stress tests
Citi Said to Need Up to $10 Billion - WSJ.com
An interesting interview with Obama in The NYTimes
Obama seems to be quite aware of the broad criticism of his economic policies. So, I guess, either he is deluded by thinking that his team represents all valid points of view or things are screwed up much worse than they appear, not just economically but, more importantly, politically
A longish quote
I want to talk broadly about policy. When you and I spoke during the campaign, you made it clear that you had thought a lot about the economic debates within the Clinton administration. And you said that you wanted to have a Robert Rubin type and a Robert Reich type having a vigorous debate in front of you. And clearly you have a spectrum of Democrats within your economic-policy team.
THE PRESIDENT: But I don’t have Paul Krugman or Joseph Stiglitz.
No, this wasn’t about them. But they have made it clear that they are not working in your administration, haven’t they?
But in your inner circle, it really is dominated by Rubin protégés. And I’d be interested if —
THE PRESIDENT: You know, the — I mean, look, Larry Summers and Tim Geithner obviously worked at Treasury under Rubin.
And Peter Orszag, I think.
THE PRESIDENT: And Orszag — fair enough. You know, Christy Romer didn’t.
Jared Bernstein doesn’t — and Jared sits here every morning as part of my economic team. And Austan Goolsbee doesn’t.
I mean, the truth is that what I’ve been constantly searching for is a ruthless pragmatism when it comes to economic policy. It is probably true that, given the financial crisis that had arisen, that the fact that both Tim and Larry had familiarity with financial crises was a plus, because I thought that we needed some people who could hit the ground running and would be comfortable dealing with some very large and difficult economic issues. And frankly, that list is pretty small, because the last Democratic president we had was Bill Clinton; he was on the scene for eight years, and for a big chunk of that time, Bob Rubin was his primary economic-policy maker. So it’s not surprising that anybody who had experience in those fronts was going to be coming out of a shop that would have been influenced by that.
Keep in mind, though, I mean, I have enormous respect for somebody like Joe Stiglitz. I read his stuff all the time. I actually am looking forward to having these folks in for ongoing discussion. Somebody who has enormous influence over my thinking is Paul Volcker, who is robust enough that, having presided over the Carter and Reagan years, he’s still sharp as a tack and able to give me huge advice and to provide some counterbalance.
The last point I’d make, though, is I think that — and I may have mentioned this to you — but now that I think about it, maybe it was post-election. When I first started having a round table of economic advisers, and Bob Reich was part of that, and he was sitting across the table from Bob Rubin and others, what you discovered was that some of the rifts that had existed back in the Clinton years had really narrowed drastically.
They agree a lot more than they used to, but not entirely.
THE PRESIDENT: Not entirely. But, I mean, the fact is that Larry Summers right now is very comfortable making arguments, often quite passionately, that Bob Reich used to be making when he was in the Clinton White House. Now Larry might not like me saying that —
Larry Summers is the new Bob Reich —
THE PRESIDENT: — that he’s become a soft touch. But, no, I think that one of the things that we all agree to is that the touchstone for economic policy is, does it allow the average American to find good employment and see their incomes rise; that we can’t just look at things in the aggregate, we do want to grow the pie, but we want to make sure that prosperity is spread across the spectrum of regions and occupations and genders and races; and that economic policy should focus on growing the pie, but it also has to make sure that everybody has got opportunity in that system.
I also think that there’s very little disagreement that there are lessons to be learned from this crisis in terms of the importance of regulation in the financial markets. And I think that this notion that there is somehow resistance to that — to those lessons within my economic team — just isn’t borne out by the discussions that I have every day.
If anything, the only thing I notice, I think, that I do think is something of a carry-over from Bob Rubin — I see it in Larry, I see it in Tim — is a great appreciation of complexity
And a willingness to admit what you don’t know, in many cases.
THE PRESIDENT: Yes, exactly. And so what that means is that, as we’re making economic policy, I think there is a certain humility about the consequences of the actions we take, intended and unintended, that may make some outside observers impatient. I mean, you’ll recall Geithner was just getting hammered for months. But he, I think, is very secure in saying we need to get these things right, and if we act too abruptly, we can end up doing more harm than good. Those are qualities that I think have been useful.
....
It is true that as tough an economic time as it is right now, we haven’t had 42 months of 20, 30 percent unemployment. And so the degree of desperation and the shock to the system may not be as great. And that means that there’s going to be more resistance to any of these steps: reforming the financial system or reforming our health care system or doing something about energy. On each of these things — you know, things aren’t so bad in the eyes of a lot of Americans that they say, We’re willing to completely try something new.
But part of my job I think is to bridge that gap between the status quo and what we know we have to do for our future.
It would shock me if C only needed $10b.
Probably what Treasury will do is preferred-to-common conversion to improve the books without altering the reality.
An ongoing atrociti
MrM, where did that quote come from, or did you make it up, if real sounds very interesting.
Dirk - I resent the innuendo
The link is embedded at the top of my post
"Vampire banks" +1
"green shoot koolaid" +1