WSJ: About 10 of 19 Banks will need Capital
Submitted by
CalculatedRisk on Mon, 05/04/2009 - 5:32pm (162 comments)
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What, like $5 million to $10 million each or something?
what is more amazing is wells going from 8 to 24 in two months. On garbage news.
Previous people who signed up for my strategy report should have it in their mailboxes. Made to offer earlier today, but probably a bit of a different crowd now. If you want a copy of my May report, shoot me an e-mail at dhvd_2004@yahoo.com
Deliberate leaking to soften the blow on Thursday and head off a market decline?
Wells could announce a $50/share offering and the stock would zoom up to $50.
As somebody noted yesterday, it started with 5, then 8 and now 10.
As somebody noted yesterday, it started with 5, then 8 and now 10.
And so when they announce 2 on Thursday, more green shoots!!
The “bugaboo of nationalizing banks,” which the Obama administration wants to avoid, means “we are nationalizing only one side of the balance sheet,” Soros said. “We gradually take over the deficits on the balance sheet. But we aren’t actually going to benefit from the banks recovering.”
Let's see if Obama holds their TARP bailout feet to the fire and forces them to boost the other side of their balance sheet.
If so, he redeems himself.
If not, then he's toast after this term
When your regulator says you don't have enough capital, you are insolvent. The only subject of debate is how large the margin of safety the regulator has chosen. Given ~2 decades of declining capital bases, an FDIC that didn't require premiums, and the largest losses of any credit bubble in history... I would say that even those banks not meeting the regulator's margin of safety could be insolvent. Unless the US govt demonstrates —contrary to popular belief— it has the financial resources and logistical ability to shut down or clean up large banks, there is no credibility behind any statement.
Then again there was that Turner Dude who had it at 16 of 19. I know he is a fruit cake but seems to be headed that direction.
Nemo, I was thinking $100 billion for Citi. Maybe $50 billion for BofA, and $25 billion for Wells. All the articles have been saying "more than $10 billion", and I think some people aren't thinking big enough. (Note: I doubt the numbers will be anywhere near this high).
Dirk, thanks for the nice mention! I appreciate it!
scone, sepoy, if it was me, I'd leak a number higher than the actual number ... that way it would sound like good news. Maybe someone figured that out, and the real number will be 8!
best wishes.
They must be hiring at the FDIC
U.S. watchdogs want bar raised in failed bank reviews
| Reuters
.....Chrysler Non-TARP Lenders Object to Auction Plan......
Chrysler Non-TARP Lenders Object to Auction Plan (Update3) - Bloomberg.com
"The Fed plans to release the results of the stress tests on Thursday after U.S. stock markets close. Anticipating the test results, McGraw-Hill Cos.' Standard & Poor's Ratings Service unit put on watch for downgrade the credit ratings of 22 banks and one thrift."
From the front-page WSJ article.
km4 - I hope you are correct that he is toast... That means something better shows up and gets elected... I am SO hoping for a true conservative party with salable candidates...
EHP, interim step if below what your regulator says is to get rid of divy and do a rights offering or something like that., perhaps sell off assets, kind of like citi is doing in Japan. depends on how much they need to raise. The yeild cirve is making any current loans pretty darn profitable, if all those earnings are used to rebuild capital for say the next decade or so, they could survive. Wouldnt want to own them though.
CR, I have been following your wonderful blog for almost three years.
Love it and recommended it to all of my friends.
My question is! WHO ARE YOU? WHAT IS YOUR NAME? If you do not mind:)
Thanks.
Will any amount of money save this system?
Think about what I am saying.. look beyond the primary effects.. think of the secondary, tertiary and quaternary effects.
ShadowInventory
Repug ~ Dem ... either way they will be corporate ...
McCain could have won .... if he had come out against the original TARP
He's owned as well ...
We get the bank stress tests and the unemployment report for Friday morning, basically. Issue the bad news in bulk.
"NEW YORK, May 4 (Reuters) - Bank of America Corp (BAC.N), denying a media report, said it had no plans to raise $10 billion in common equity, while another report said Citigroup Inc (C.N) was looking to raise capital from private investors."
CORRECTED - WRAPUP 1-BofA says no plan to raise capital, Citi mum
| Reuters
So they plan to raise $5 billion? $50 billion? Everyone, it seems, has learned to lie artfully.
Will any amount of money save this system?
~~~~
First you have to nationalize the banks ... see what is on their books ...
The Banks have used hard work and ingenuity to dig us out of the depression.
its nothing more than Axelrod working his magic - MSM, Blogosphere -- the guy will go down in history as the master of all things propaganda - sad to say but we (all of us) are putty in his hands. The evidence - just read the comments
When your regulator says you don't have enough capital, you are insolvent.
Umm, no. You are insolvent when you have negative capital (or capital deficit), i.e., when your liabilities exceed your assets.
When your regulator says you don't have enough capital, that means your capital, which may well be positive, is not high enough to satisfy regulatory capital ratios.
Health Care reform looks dead. Too expensive.
mmckinl,
That is a good first step.. but what I am alluding to is- can we have high levels of meaningful employment in a society that is increasingly automated and running out of ponzi schemes. Add into that a business culture that makes corporations behave like parasites as opposed to symbionts?
reptillian (profile) wrote on Mon, 5/4/2009 - 9:45 pm
"Anticipating the test results, McGraw-Hill Cos.' Standard & Poor's Ratings Service unit put on watch for downgrade the credit ratings of 22 banks and one thrift."
Did the WSJ article mention any large nations in North America?
what is more amazing is wells going from 8 to 24 in two months. On garbage news.
One person's garbage is another person's treasure - in this case LITERALLY.
I'd like to help contribute to their capital needs, but I think I ought go to Costco and get more canned goods.
From the last thread I never finished:
km4, good link on bipartisan corruption in Congress: The BRAD BLOG : SIBEL EDMONDS: In Congress We Trust...Not
EHP, you're eminently quotable: "I'm not so much a bear, as I want to see things brought to their conclusion and the restoration of a modicum of logic when it comes to valuation and planning decisions."
Why are they still open?
//Standard & Poor's Ratings Service unit //
if it was me, I'd leak a number higher than the actual number ... that way it would sound like good news.
Good news if you are a bank shareholder, and bad news if you are a taxpayer. It is all a matter of perspective.
Yeah Samdog remember all those countries on the list of CDS holdings... I think Phillipines was way up there..
rb:
Health Care reform looks dead. Too expensive.
On what do you base this. Did I miss some news item?
NOTHING, and I do mean nothing is too expensive it would seem. Why not go for broke at this point. No one will know what item ended up being too expensive. (sarcasm off)
That is a good first step.. but what I am alluding at is can we have high levels of meaningful employment in a society that is increasingly automated and running out of ponzi schemes. Add into that a business culture that makes corporations behave like parasites as opposed to symbionts?
~~~~
Good question ... just how corrupt is our system?
In theory we can have high employment levels, just what you mean by meaningful I don't know ... What we have to do
is make more of the stuff we use day to day. The US is still blessed with great farmland, natural resources and an infrastructure
that can be rehabbed pretty easily.
The problem is we have Crony Capital Imperialism ... It will not go away peacefully ... the interests are too entrenched and too powerful.
We should burn these idiots. This is what passes as wisdom at harvard!
Evaluate How You Fit Your Company Culture
- Bloomberg.com
06:37 PM Monday May 04, 2009
By Marshall Goldsmith
This week's question for Ask the Coach:
While moving up the organization, I've noticed a high turnover in the senior ranks. It seems like a lot of talented people who were once successful fail to make the grade. How can I increase the likelihood that I will not end up like these casualties?
Here's a list of the banks being tested, my guesses have a Y after them.
J.P. Morgan Chase & Co.
Citigroup Y, more than they can actually raise
Bank of America Corp. Y, Between divestiture of Merrill & private placement, manageable
Wells Fargo & Co. Y, but not that bad
Goldman Sachs Group
Morgan Stanley
MetLife
PNC Financial Services Group
US Bancorp
Bank of NY Mellon Corp.
SunTrust Banks Inc. Y, based on projected CRE losses in adverse scenario
State Street Corp.
Capital One Financial Corp. Y, future CC issues
BB&T Corp. Y, future CRE losses
Regions Financial Corp. Y, future CRE losses
American Express Co.
Fifth Third Bancorp Y, Future CRE losses
Keycorp Y, future CRE losses
GMAC LLC Y, Should not have listened to Ditech
mmckinl,
Incinerators should fix that problem..
//The problem is we have Crony Capital Imperialism ... It will not go away peacefully ... the interests are too entrenched and too powerful.//
"Health Care reform looks dead. "
We ought to start keeping a list of BHO announcements that never come to fruition.
On second thought, maybe we should just keep a list of things he announced that actually get passed.
But with this rally, we can blow off a ton of steam, buy some time, and still make it look like it isnt a depression.
Banks also would be able to blame the government for ruining the rally and killing the green shoots.
The Administration has to build enough courage not to be afraid to be called a party pooper.
So much hype has been built up around the stress test results, it is bound turn a nothingburger (and yet, I secretly wish for a miracle of justice).
Reggie Middleton took a look at Wells' exposure to 2nds,many were Helocs or the 20% of an 80/20 loan and the figure I recall was $54 Billion concentrated in sun belt states.losses on seconds can easily exceed 100% because you have to process the foreclosure/bankruptcy/shortsale paperwork and there ain't no equity for the second lienholder.They might pick up $1k in a short sale but that's it.Major suckage before considering golden stream,err,golden west.
I don't think so. It's been fast-tracked and can't be filibustered.
Speaking of Health Care reform.
My mom got a walker thru. MediCare and MediCare was charged $401 .
The same exact walker, the same model number on the internet was for $131.
Can someone tell me what the fuck is going on here? Why everyone fucks government and government says " may I have another one?"
Dirk,thanks for the strategy report.Always worth a read.Do you catch any flak by posting under you real name?
McCain could have won .... if he had come out against the original TARP - Dick Morris said exactly that, and after that vote his campaign just fizzled... Well the Repubs had their chance for 6 years and blew it... The Dems have always been big spenders but the electorate doesnt seem to understand that is the problem - they think there is 'Some RIch Guy' who can be tapped and the money transferred to them... They dont have a clue about the borrowing or how that turns into a defacto flat tax which will put them deeper underwater...
George Will said "Leadership is not getting your kids to eat pizza. Leadership is getting people to do things they dont want to do. Great leadership is getting them to like doing things they dont want to do."
Maybe it's hopeless, but I gotta think that somewhere out there is someone who can sell the idea of austerity and a return to the work ethic - putting an end to the waste, fraud and abuse, paying off the debt, resulting in an America that is even greater than it has ever been...
Tom Stone,
Do you know that there have been anecdotal reports for over a year that WFC was particularly active at delaying or ignoring foreclosure, so that they would not have to take a loss 'on paper'.
no sell signal has been breached.
crispy was early out and regrets missing the best part of the stress test nothingburger.
wawawa:
Here is what I learned about the procurement process in the Navy: The purpose is not to buy the best product at the best price, but to redistribute money to politically powerful constituencies. It is that simple.
Pass the stress test and/or able to repay TARP, no bank can be considered healthy while it's dependent on government backstops. Goldman Sachs, anxious to repay about $25 Billion TARP, is the beneficiary of more than that in government backstops.
Imagine how bad it would be if they had instead used the adverse scenario as the baseline scenario like current conditions demand.
sportsfan,
Well thank you for the compliment, but to be honest there's nothing great about it
"Reggie Middleton took a look at Wells' exposure to 2nds,many were Helocs or the 20% of an 80/20 loan and the figure I recall was $54 Billion concentrated in sun belt states.losses on seconds can easily exceed 100% because you have to process the foreclosure/bankruptcy/shortsale paperwork and there ain't no equity for the second lienholder.They might pick up $1k in a short sale but that's it.Major suckage before considering golden stream,err,golden west."
My guess is it is the seconds that are blowing a hole in their balance sheet. They seem to think their seconds are sooooo much better than everyone else's, so haven't marked them down that much. The 11% stress test assumption, while a joke for the overall market (way too low, the crap on JPM's books from WM should come in at 30%+), might be appropriate for the WFC stuff, but WFC thinks they will outperform by 10X the market, and have them marked way too generously.
The OAs from Wachovia they marked down a lot. It is their own stuff they think is golden.
Health Care reform looks dead. Too expensive.
LOL... meaning the health insurance lobby is taking a page from the book of the bankers [they own the place too - can more than one entrenched special interest own congress at the same time or do they have to share?]...
I wonder who is providing the financing for those 700k cracker boxes in San Diego...
"The dems have always been big spenders"
There is a difference between "tax and spend" democrats and "borrow and spend" republicans.
dryfly,
I think public executions of the top 5-10% of politically active doctors + laws for quick torture and execution of doctors who refuse to play by the new system should solve the problem.
Of course, we should also have real incentives for those who choose to play..
Incinerators should fix that problem..
~~~
Grab your pitchfork ....
I'll join you later ... ; - )
You are correct Mr. Reptile... Although the Dems have held the congress for the majority of the time since GD1, neither party has held the line...
A free pitchfork is offered with each condo...
MediCare was charged $401 - The same exact walker was for $131. Can someone tell me what the fuck is going on here? Why everyone fucks government and government says " may I have another one?"
......Medicare is upcharged to pay for the patients that DON'T pay or have insurance. Private pay patients pay more for goods and medical services than even Medicare is charged. Medicaide (the state welfare medical program) pays VERY low rates for anything, takes forever getting checks back to providers, and doscounts the checks to boot. THAT'S why you were charged $431 for a $131. walker.
comrade AM , move the Y from bbt to Morgan Stanley and you got my picks. Also, Citigroup cannot be saved, it can only be dismantled.
Long time readers of CR on the subject of Wells Fargo will remain nonplused by their "sudden" loss of status. Other than Reggie Middleton and present company hoocoodanode?
mmckinl,
I think that we should have due process and open trials before incinerating them.
It pays to read up on the French Revolution though - once the chopping got started, many heads rolled all around...
CR: Thanks again for all the work you put into this blog. I appreciate all of the information and insight you constantly provide! I have no idea how you keep it up.
See, I told you the rally was made of magical fluffy bunnies:
Medicated Rabbit, Bipolar Bunny: Spotlight Picture
.......to pay for the walkers not paid for any other way.....
Lucifer,I have heard it,and about other banks.I think it more likely to be due to a loss of institutional memory,understaffing because risk had been eliminated through securitization,a very rapid ramp up in risk staffing with the training and supervision being done by people with little experience,problems with merging corporate cultures and information...incompetence.i do know one man who has made NO payments in 16 months on a $900k loan with countrywide and who has yet to recieve a NoTS.
I am fortunate that WFC was always too expensive for my portfolio...
ghostfaceinvestah (profile) wrote on Mon, 5/4/2009 - 7:09 pm reply Ignore user
"Reggie Middleton took a look at Wells' exposure to 2nds...</.i>
Damn ghostfaceinvestah beat me to it.
Tom Stone,
WFC did it on a much larger scale that Citi and BoA
I think that we should have due process and open trials before incinerating them.
~~~
Good idea ...
Is that tv show Arrested Development still around? They were trying to build McMansions in the desert... I dont recall them ever selling any though...
WAWAWA,CR is AKA bill McBride.
The only way the 2nds for WFC are holding up is denial. It's a river that runs through all the high end properties in CA which are so far only down about 10% in price. Now that that foreclosure wave is starting, they will not be able to hold off reality much longer.
Dryfly:
you mentioned your wife's company went thru layoffs. What industry is she in, if you don't mind me asking. Also, do you have real time info on trucking and rail volumes in your line of work?
Wells Fargo is in great shape ...
cause Warren said so ... that's why ...
....."I know, i'm having a hard time believing the Feds have arrested The Crash, too, but there's a lot of indications."
I would imagine it depends on what "arrested The Crash" means. If it means they've thrown a lot of money at it, bent a lot of rules and even broken some, increased the moral hazard levels, rewarded the same players who initiated this, and stopped the natural progression of events in a free enterprise system, then yes, they've "arrested the crash".
The "crash victim" will still die though.
Will any amount of money save this system?
Well, if money is just the illusion of power then the real answer lies elsewhere.
stress test results are "known knowns"....
thanks for coming out. Capital will be raised. Its either private or uncle sugar.
there will not be a "Lehman Weekend White Shotgun Wedding with Black Swans in the Money Pool"
"I think that we should have due process and open trials before incinerating them."
If they weigh the same as a duck, they are witches. Burn them!
CR was actually one of the lead actors in the move The Princess Bride
IIRC
ac,
Rationality, maybe?
//Well, if money is just the illusion of power then the real answer lies elsewhere.//
Just in case anyone is still unsure. EVERY second mortgage WFC has made in the last 4 years is at BEST a zero.
Okay, that may not be individually correct but the loans that cost more to resolve than they return are less than zero. Maybe in a few years some of these seconds will pay off the principal but that just makes their current value less than zero as well.
Shipping companies are hoping for some decoupling in the near term, Wallenius Wilhelmsen to Launch South America Service | Journal of Commerce
I've seen a lot of this, amazing excess capacity.... and China is building more ships and airplanes with no idea what they will do with them when complete
Why do they need more taxpayer capital if they are not insolvent?
We need another revolution.
It doesn't take a monkey to figure out that the strategy is quite clear. The entire PR objective of this exercise is to work the market into a frenzy over the capital raises, which are vastly and egregiously below what the actual needs are, in hopes of finally and permanently warding off the pack. This whole exercise is a diversionary tactic. Debating what level of capital within the rediculously low parameters set shows only that they have anchored the debate in a way that makes it a win win for the banks. Yves had a good post on the risks beyond the loan portfolios yesterday. That Wells needs capital and the stock was up 20% today goes to show you just how unhinged the markets have become
The last two weeks have been surreal. And today we get a rip your face off stock rally? I don't get it.
At least the bond market didn't continue to tank. Green shootz!
Then: 19 men terrify the country
Now: 19 banks terrify the country
Arbitrage_Macht_Frei,
The 19 'bank holding companies' will cause more death and mayhem than those 19 zealots.
There's a limit to the capital needs determined in advance, now it's just up to Geithner to divide the total extra "cushion" from the balance under TARP between the "solvent" banks. They are solvent because the Treasury said so. They were well capitalized early last year. Now solvent.
How long and how much will it cost the taxpayer before they finally get declared as a little insolvent, like a little pregnant.
I think the market went up today cause swine flu was a myth..... or something....
Is this not somewhat consistent with what that lunatic Turner had to say?
Even I may have to go long guns & ammo, now.
Who requires terrorists when we have GS, Citi, BoA, JPMC, WFC, Amex, CapitalOne..
"The last two weeks have been surreal. And today we get a rip your face off stock rally? I don't get it."
.....consider it March 1930.
Here is what I learned about the procurement process in the Navy: redistribute money to politically powerful constituencies. It is that simple.
Summer job for WAMTMC:
The purpose is not to buy the best product at the best price, but to move paperwork through the system. Product and price are hardly even considerations.
That Wells needs capital and the stock was up 20% today goes to show you just how unhinged the markets have become
I quoted David Rosenberg the other day, who said that the big money remains on sidelines and bewildered by the rally.
IMO the rally is a product of banks' pump&dump and retailers rushing in head first, being afraid to miss the investment opportunity of the lifetime
Bah! Who needs measily capital when one has Capitol. The banksters just walk up to Timmah! and say "Get in my belly!"
No problem.
SNAFU: Situation Normal All Financials Up
you mentioned your wife's company went thru layoffs. What industry is she in, if you don't mind me asking. Also, do you have real time info on trucking and rail volumes in your line of work?
First question - she is in 'custom light mfg'... think airport kiosks, tradeshow booths, store POP displays, etc. They have been successful for years but this is ugly... as bad as right after 9/11. No surprise - their market would be one of the areas their customers would cut back in a cash crunch.
Second question - I do NOT have 'live' rail or trucking industry info. Only 'live' info I have is anecdotal and that is terrible-bad unreliable. Two weeks ago I drove I80 south of Chicago & there was hardly a truck to be seen - looked like the end of the world traffic was so light. Went back a week later and it was PACKED... bumper to bumper 3-4 lanes half were big rigs. On that same return trip I drove through the night to get home sooner [do that sometimes even in my 'old age']... stopped at a rest area in Indiana to sleep for a while and the place was so full of trucks 'waiting' they spilled out both ends of the rest area out on to the shoulders of the interstate.
It's clear as mud out there.
Warning more idiots calling bottom below...
May 4 (Bloomberg) -- MGM Mirage, the biggest casino owner on the Las Vegas Strip, reported a first-quarter profit from the sale of a casino. The shares extended gains after the company said occupancy recovered and convention cancellations slowed.
Net income dropped 11 percent to $105.2 million, or 38 cents a share, from $118.3 million, or 40 cents, a year earlier, the Las Vegas-based company said today in a statement. Results included a gain of 44 cents from the sale of Treasure Island.
Revenue tumbled 20 percent to $1.5 billion from $1.88 billion a year earlier. MGM Mirage is selling rooms at steep discounts through Web sites such as Orbitz to attract tourists in the city’s worst gambling slump on record. The worst may be over after three straight quarters of declining occupancy and room rate, Chief Executive Officer Jim Murren said.
MGM Mirage Posts Profit, Says Occupancy Has Recovered (Update2) - Bloomberg.com
The Bankers are en pointe as they perform the always difficult Black Swan Dive Ballet, et tu tu Brutus?
From Chapter 4: "In Goldman, Sachs we Trust"
Investment Trusts
Extracts from "The Great Crash: 1929", John Kenneth Galbraith, First Published 1955, Page 74
"For a long the the New York Stock Exchange looked with suspicion on the investment trusts; only in 1929 was listing permitted. Even then the Committee on the Stock List required an investment trust to post with the Exchange the book and market value of the securities held at the time of listing and once a year thereafter to provide an inventory of its holdings. This provision confied the listing of most of the investment trusts to Curb, Boston, Chicago, or other road company exchanges. Apart from its convenience, this refusal to disclose was throught to be a sensible precaution. Confidence in the investment judgement of the managers of the trusts was very high. To reveal the stocks they were selecting might, it was said, set off a dangerious boom in the securities they favoured. Historians have told with wonder of one of the promotions at the time of the South Sea Bubble. It was 'For an Undertaking which shall in due time be revealed'. The stock is said to have sold exceedingly well. As promotions the investment trusts were, on the record, more wonderful. They were undertakings the nature of which was never to be revealed, and their stock also sold exceedingly well."
dryfly - truck traffic from restocking and flu vaccine distribution? Also Long Beach container traffic picked up a couple weeks ago...
As several of you have politely pointed out when I suggested conspiratorially behavior regarding swine flu, it is not remotely possible to contain and control a conspiracy at such a level. Why are conspiracy theories so widely followed then? Please, before you tell me of idiots and suckers born every minute...I think it is out of comfort. It is easier to believe there is a reason or purpose, all be it an evil one, than to deal with chaotic events that just happen. What is going on in the markets right now is another example. So many of us are looking for reasons to sate our own understanding of what is happening. It might be beyond our comprehension, there may not be a logical answer. Sure the government is manipulating the markets, but it doesn't explain it all. Do we really understand the causes and effects of the Great Depression now, any more than the people who lived through it? I wonder. This phenomenon is happening in many different areas. Synchronicity on a level that is hard to deal with. I have often wondered if what they are calling the colony collapse disorder in bees can happen to us?
dryfly - that all makes no sense at all... (I believe you tho....)
'Goldman Conspiracy:' Bogle's 'pathological mutation?'
Machinations on Wall Street, in government give rise to 13-episode TV plot
PAUL B. FARRELL
http://www.marketwatch.com/news/story/Goldman-Conspiracy-explosive-13-episode/story.aspx?guid={DB023061-CF72-4CA3-B4E0-C72D0893D76D}
By Paul B. Farrell, MarketWatch
Last update: 6:50 p.m. EDT May 4, 2009
ARROYO GRANDE, Calif. (MarketWatch) -- Prediction: The new movie "Public Enemies" will be a mega-blockbuster. Not because everybody loves "Pirates of the Caribbean" star Johnny Depp and Christian Bale, star of "Terminator: Salvation" and "Dark Knight."
No, it'll be a blockbuster because we get a chance to cheer for a new dark antihero, the infamous Depression era gangster, machine-gun-toting John Dillinger: Cheer because this new Dillinger is doing what we all secretly want to do -- rip off our corrupt banking system, turn the tables on the guys who have been ripping us off for too long.
I'll bet the theater erupts in cheers during the bank robbing scenes...
Mother Natures leaves a tithe behind when she cleans house...
90% of the Chinook Salmon in the Sacramento River... gone
ShadowInventory,
Would you trust Dillinger or Blankfein? or Paulson?
dryfly - truck traffic from restocking and flu vaccine distribution? Also Long Beach container traffic picked up a couple weeks ago...
No effing idea what the difference was but it was VISIBLY different.
Baucus: Public health care plan may not pass without budget reconciliation.
Think Progress » Baucus: Public health care plan may not pass without budget reconciliation.
A sticking point in talks on health care is President Obama’s “public plan,” which will bring down health care costs and dramatically expand coverage. Republicans already oppose the plan, fearmongering about “socialism” and government bureaucracy. Today, CAP hosted a conference call announcing the creation of Doctors for America, a group of 11,000 physicians pushing for health care reform this year. On the call, Sen. Max Baucus (D-MT) acknowledged that the public plan “is one of the two or three 800-pound gorillas” in Congress, adding that the public option is unlikely to pass Congress unless Democrats pass health care with a simple majority via budget reconciliation:
BAUCUS: We’ll probably spend some time looking at a couple three different public option alternatives to see how well it can be leveled out, the playing field actually be leveled. Because otherwise, this could be difficult to pass the Senate. It may pass the House. It may pass the Senate too — there’s a procedure called reconciliation. But that’s — we have to think that through a lot.
Lucifer - I never thought of it before but THEY LOOK LIKE BROTHERS!!!
colony collapse disorder in bees
~~~~
Systemic crash of the economy due to skyrocketing fuel prices ...
In our current system of just in time inventory and production losing
just one link in the chain crashes the system ...
sidenote ...
Companies in Japan are employing private investigators to check on
their suppliers to see if they are going to go bankrupt ... Toyota is one ...
dryfly - that all makes no sense at all... (I believe you tho....)
Tell me about it... I almost stopped and took a picture to send to CR but drivers on I80 are a bit crazed - not sure what they'd do if I stopped and started taking pix. So I behaved and kept on moving on.
ShadowInventory,
Have a look at pictures of the movers and shakers at GS.. Tell me if you can discern a very common look..
Paulson always looked like a cross between Lex Luther and Daddy Warbucks to me.
Wife brought up an article where 'Some Guy' recommends private medical care accounts ala 401k - mandatory 4% of salary contribution - And if you dont spend it on medical care, it's your money, you get it back depending on age... Sort of like those MSA's that were around back in the early 90's - I could never find any place to get a real MSA (Medical Savings Account).... Cost of private care is way less than public - look at plastic surgery - it's cheap BECAUSE there is no govt program or insurance for it...
From "The Rude Awakening" newsletter:
Readers are reminded of our Daily Reckoning Law: 'The force of a correction is equal and opposite to the deception that preceded it.' Today, we offer a corollary: 'The greatness of a depression is commensurate to the government's efforts to prevent it.'
dryfly
I know you're talking about trucking, but locally I saw a similar thing where ships that had gone on a run to Asia, leaving the place empty, came back and are now sitting empty and idle. Perhaps everyone has much more inventory relative to current production than assumed, and earlier activity was just a cheap hedge if things did really pick up and this time wasn't different
Dryfly:
Traffic in the Cleveland are is very depressed.
"Wife brought up an article where 'Some Guy' recommends private medical care accounts ala 401k - mandatory 4% of salary contribution - And if you dont spend it on medical care, it's your money, you get it back depending on age... Sort of like those MSA's that were around back in the early 90's - I could never find any place to get a real MSA (Medical Savings Account).... Cost of private care is way less than public - look at plastic surgery - it's cheap BECAUSE there is no govt program or insurance for it..."
~~~~~
Total bunk ...
"unlikely to pass Congress unless Democrats pass health care with a simple majority via budget reconciliation"
It's already set-up -- fast-tracked -- to be passed that way, if the opposition won't compromise.
EvilHenryPaulson:
Are you in the shipping industry?
Tom,
Occasionally I get a little bit of it from out media relations guy, mostly I have just stopped saying much about the CNBC hosts, not that I dont have my opinions about them, but it is in the firm's interest, and I think mine that I continue to be invited on. I hope that is also in the public good. Afterall my thoughts there reach far more people than on here. Unfortunately have been sort of pigionholed as the "Earnings Guy".
Those GS photos all look pretty squinty - I guess that's from looking at computer screens and reading balance sheets...
The market already knows that most of these firms are insolvent and doesn't care. I'm sure they'll all go up another 10%+ tomorrow, and 200+ points on the DOW. It simply doesn't matter anymore.
"A sticking point in talks on health care is President Obama’s “public plan,” which will bring down health care costs and dramatically expand coverage. Republicans already oppose the plan, fearmongering about “socialism” and government bureaucracy...."...Think progress(ive idiocy) is also jumping on the Obumble bandwagon to legislate the implementation of perpetual motion machines, the concept of dieting by gluttony, and grafting wings on pigs to alleviate swine and avian flu, known as killing two birds with one rock for brain.
Hank Paulson
http://4and20blackbirds.files.wordpress.com/2008/11/hank-paulson.jpg
Lloyd C. Blankfein
http://www2.goldmansachs.com/our-firm/about-us/leadership/bios-photos/lloyd-blankfein.jpg
Gary D. Cohn
http://www2.goldmansachs.com/our-firm/about-us/leadership/bios-photos/gary-cohn.jpg
Neel Kashkari
http://www.huffingtonpost.com/huff-wires/20081006/meltdown-kashkari/images/f6f9fce5-5446-4255-8320-e0768bfe0a70.jpg
There is a new editor over a Layoff Daily. Previous editor burned out. They added a comment section.
The daily numbers are steady and dark, though we haven't seen any multi-thousand announcements in a while. That will change as the Chrysler BK works through and GM follows.
Microsoft rumored to pull the trigger on up to 2,000 tomorrow.
I guess they all lost their hair from doing Uturns under the sheets with the Fed...
Traffic in the Cleveland are is very depressed.
I know - I have family there, they tell me [live in the west end out by Bay Village/Avon]... On this trip I flew through Cleveland [came from NY on I90 then jumped on to I80]... the rest area I napped at on the NY Thruway was EMPTY... but the ones on I80 from Toledo to Chicago were PACKED - hard to find room to park.
Another 'cool' thing about sleeping in rest areas in a recession - you see the displaced up close and personal... it isn't a NYT opinion piece anymore... they become real, they are out there people.
10/19 thats pretty good considering... .480 Big Pappi would kill for that average
Maybe this has been brought up, but from today's (or maybe tomorrow's) NYT:
http://www.nytimes.com/2009/05/05/nyregion/05evict.html?pagewanted=1&_r=1&hp
"More Middle Class New Yorkers Face Eviction"
NYC is of course a crazy housing area anyway, how people hang on there I have no idea. I wonder if this is any different from a normal downturn. Maybe not.
Comrade Misean is Dope
Australia, Japan, Canada and Europe all have coverage for all of their people ...
and a competitive advantage for their businesses ...
name fits ...
The Sacramento tent city never went away... A few of the residents moved over to the shelter at CalExpo, but most of them only moved a little ways farther along the river - originally they were on land that belongs to SMUD which has since been vacated and fenced off... There always were some people living down there on the river but before the cliff dive they were mostly a bunch of road warrior types - now it's much more equal opportunity... new people checking in all the time... Some look like they expect to be there for a while - actually making semi-permanent structures...
Death in the dust
Three years before publication of his masterpiece The Grapes Of Wrath, John Steinbeck visited squatters' camps in California. To mark the centenary of his birth, we print this account - previously unpublished in the UK - of the misery that he witnessed
Death in the dust |
Books |
The Guardian
The squatters' camps are located all over California. Let us see what a typical one is like. It is located on the banks of a river, near an irrigation ditch or on a side road where a spring of water is available. From a distance it looks like a city dump, and well it may, for the city dumps are the sources for the material of which it is built. You can see a litter of dirty rags and scrap iron, of houses built of weeds, of flattened cans or of paper. It is only on close approach that it can be seen that these are homes.
Here is a house built by a family who have tried to maintain a neatness. The house is about 10 feet by 10 feet, and it is built completely of corrugated paper. The roof is peaked, the walls are tacked to a wooden frame. The dirt floor is swept clean, and along the irrigation ditch or in the muddy river the wife of the family scrubs clothes without soap and tries to rinse out the mud in muddy water.
10 out of 19 banks need capital...
"the other 9 will need magical powers," says an industry insider. "we're going to give them a black hat and a wand. everything these banks to keep them going need will spew out of this hat." when pressed, the insider admitted that all banks need one of these super-hats. "we just release the news in small chunks. the masses are asses after all."
shadow you got pictures of it?
That will change as the Chrysler BK works through and GM follows.
Yes, employees for them, their suppliers, the doomed dealers, and everyone else that depends upon them for a living. Should bump the numbers for the remainder of the year.
TJ and The Bear
Fiscal year for states is almost up ...
Get ready for huge lay offs in state and local government ...
Here is a house built by a family who have tried to maintain a neatness.
There was a story in my parts a month or so back, squatters were living in the woods. Unfortunately, it was city land, so the city sent police in there to move them out. IIRC, they posted an eviction notice, and when the officials came back, the camp was gone. They said it was very clean, very quiet, very orderly.
I imagine they moved to another location. Lots of woods around here.
Tim do a google on sacramento tent city and then click on images. I was looking for an old link I had but cant find it right now... I did find an article from cbs13 that has some video but the article is from Feb....
...........world's biggest shipbuilder?.......Korea not China........real good money making opportunites are outside US........
Page not found - - CNBC.com .......still undervalued.......
mmckinl,
Yeah, and (pardon the schadenfreude) it's about damned time.
Nuke
no, far from it. It's just something that is hard to manipulate while easy enough to follow, interpret, and yet not in the regular news because it is boring.
"about 10 of 19 banks will need capital
--
uh so why dont the 9 banks that dont need it give some to the 10 who do??
ok i get it
me stupid
TJ and The Bear
Problem is that it is the people that do the work that get laid off ...
The supes and managers stay on ...
We need reform not revenge ...
May 4 (Bloomberg) -- Jeremy Crook, a former Peregrine Systems Inc. vice president who pleaded guilty in the fraud that destroyed the software company, was sentenced to 27 months in prison.
I am not creative enough to make this stuff up....
Now about this CashCarry guy....
NEW YORK (Reuters) - The U.S. recession will likely end this year and policymakers must be ready to act quickly to ensure inflation does not take hold when the economy recovers, two top Federal Reserve officials said on Monday.
Two top Fed officials see recession ending this year
| Reuters
A little Koolaid sipping in the afternoon...
"I quoted David Rosenberg the other day, who said that the big money remains on sidelines and bewildered by the rally.
IMO the rally is a product of banks' pump&dump and retailers rushing in head first, being afraid to miss the investment opportunity of the lifetime"
1997 all over again. I have a number of friends who are money managers (I like them anyway), and back then, no one in the industry bought into the Internet bubble. But retail investors kept buying and buying and buying, and basically forced professional managers to buy to chase performance. I suspect the same thing is happening now. Forget about WFC, GS, JPM, etc, they are the CSCOs and MSFTs of the late 90s - way overvalued given their earnings prospects, but they will survive, after gross dilution to the commons.
But you can see today lots of companies whose stock prices have doubled or tripled from the lows, and are almost certainly going out of business. In the mortgage area, the entire MI industry has seen their stocks increase 100% or more, even ones like TGIC, which is officially in runoff and can't pay its claims - it is paying 60cents on the dollar for claims. But that hasn't stopped the stock from tripling.
I have no doubt that the market turnaround was engineered by the govt, and is now being fueled further by retail investors. Probably many of the same ones who discovered short selling two months ago at the bottom.
I am becoming increasingly afraid of what will happen to confidence if this rally isn't sustained, as more and more retail investors get suckered in. It could be very, very bad.
Is it at all possible that this requirement for additional capitalization is a stealth move to allow for nationalization. The logic goes like this. Say that 10 of 19 banks require additional capital. The public thinks that these aren't the best investment, maybe these banks are closer to insolvency then is generally known. Some of the banks have trouble raising the capital that the government deems necessary. At that point the government can say they have tried to allow the banks to become solvent and the banks weren't capable, thus allowing the Fed/FDIC to move those banks into receivership. I guess only time will tell.
If that were the plan, why would the government have used such a mild "worst-case" scenario, effectively lowballing the required capital amounts and making it easier for the banks to raise the funds?
Yalt,
I'd play it that way so that they couldn't argue 'well things aren't going to get that bad.' Especially if I already knew what the answers were before I started regarding who was going to fail ...
S wrote
That Wells needs capital and the stock was up 20% today goes to show you just how unhinged the markets have become
That's one of my concerns, there seems to be an amazing disconnect, worse than the .COM fiasco.
How big a crash will there be in the markets when reality finally bites ? Belief in fairyland can't keep them buoyant forever.
Now they've latched on to the housing recovery...and they are pumpin' this recovery meme monkey like there is not tomorrow.
Where Housing Crashed Early, Glimmers of Recovery Emerge - NY Times
Which makes me think...
is there no tomorrow?
"putting an end to the waste, fraud and abuse, paying off the debt, resulting in an America that is even greater than it has ever been..."
dude, i just spit 1995 cassanova di neri all over my keyboard. you owe me some f*cking brunello.
I was starting to get worried that distressed bonds being sold by investors who are scared to death were getting harder to find. Thursday and Friday I should have my vacuum cleaner ready.
Would I buy Citi at 30% of par? Don't know. Shorter term WFC at 60% of par and a 20% yield? Maybe. Metlife, BBT or USBank? Probably.
Would I wait until Monday to make sure none of the banks get taken over on the weekend? Unless you are as good at analyzing bank financials as the Federal govt, I would wait until Monday on the really distressed ones. That means about 0.1% of retail investors, 5% of institutional, and 15% of CR bloggers.
The two banks that OBVIOUSLY need more capital are C and BAC
My default assumption for the last several months is that, because misery loves (and needs) company, one or both of them is the source of ALL rumors about other banks being in similar trouble. I.e., no "leaks" at all.