Might as well buy them out if it's worth the risk, anything such as this would be a risk or initially if the company was doing well before they might jump start its production again? The failures are big for the company from what I read. Lets see what happens with this one.
When the markets is always going down, the vultures have no incentive to act immediately. Now that we're no longer always going down, there's an increased urgency for vulture funds to act or their competitors will.
This will lend strength to short term rebound. If there was a lot of vulture demand "pent-up" then this will even give strength into mid term.
"Out of recievership" is the key phrase: of course, they could buy Corus anytime. But they're waiting to see how many of your friendly tax dollars will be used to reanimate parts of this otherwise dead financial corpse.
hc writes: I still can't get over the fact that Warran Buffet's trade back in 2008, looks SO GOLDEN today, and getting more valuable every single day. That guy is a genius and brave.
Or, able to use his political connections to get tax dollars routed so as to make his losses good. Whether that makes him a genius, or we the people stupid, is a judgment I'll leave to the reader.
while buying assets out of BK has always been available, companies tried to avoid the stigma of liquidation and actually tried to reorganize. the expectation now, especially after the good/bad Chrysler/GM BKs, is to forgo the reorg and just go straight to vulture mode.
Angry Saver (profile) wrote on Thu, 6/4/2009 - 9:00 am
FR,
Novations require agreement of both parties of the contract. I certainly didn't agree to the new deal. And I think a lot of other prudent people didn't agree either.
My younger self had a similar argument against the social contract that nearly got him laughed out of a political philosophy class. The particularly-colorful metaphor about consent versus force was probably ill-chosen by my nineteen-year-old counterpart. Again, most truths hide in plain sight. FWIW, I am one of those "prudent people" and also didn't get the consent form in the mail yet.
"More than a third of the 540 senior finance executives who responded to the survey say the recovery will begin in the second half of this year, while 31% are looking to the first half of 2010. Another 20% don't expect the economy to begin to pick up until later next year. On average, CFOs say the recession will last another 10 months."
Well, someone will eventually have all those look-alike towers. Austin, Tampa, Charlotte, Atlanta all have highly similar Corus-funded glassy blocs, many developed by Novare Group.
Corus ... hired Bank of America Corp. to solicit capital this month or sell the entire firm to avoid being shuttered ... Investors may offer to buy the lender while it’s still in business or to purchase its assets out of receivership, said the people, who requested anonymity because the process isn’t public.
Back on Corus - is this an FDIC sponsored pre-take over liquidation? Trying to avoid a formal BFF by doing a back door shotgun marriage? Or is it the last private attempt to fix it prior to the FDIC BFF Pizza Party?
Driving that train, high on loan pain,
Dow Jones is ready, watch your speed.
Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
This old racket makes it on time,
Leaves central station bout a quarter to nine,
Hits river bottom at seventeen to,
At a quarter to three you know its travlin' north again.
Driving that train, high on loan pain,
Dow Jones is ready, watch your speed.
Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
Trouble ahead, earnings in red,
Take my advice youd be better off w/o debt.
CONductor's sleeping, train hundred and two is
On the wrong track and headed for you.
Driving that train, high on loan pain,
Dow Jones is ready, watch your speed.
Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
Trouble with you is the trouble with me,
Got two good eyes but you still dont see.
Come round the bend, you know its the end,
The fireman screams and the engine just gleams...
Yeah, I have to say I was not really expecting that myself. I would guess its auto BK related.
Cars and related component imports...
They move cars by rail from assembly or ports to 'transfer yards' where they then go on truck to local dealers - way down.
They move a lot of imported parts in containers via piggy back... to the yards then on to trucks for the 'last mile' - also down.
Plus it is early for grain [another big rail consumer]... I see them emptying the last of last years crop as I drive about - not much left to move until Sept & October.
Over all it doesn't look to bullish for rail in the near term.
Collapse in crushed stone ship too. Broke municipalities deferring roadbed maintenance / wind-down in forward spending on major capital investments (not gonna need too much gravel to put up the new marriott on the back patio of the old marriott)?
Hmm... Is this the start of capital fleeing USA into other countries? Could a UST/USD collapse be far away if investors stop investing in USA and in Asia instead?
Wonder if it's due to the new loans (TALF?) that the fed is supposed to be providing.
Sorry if this was posted earlier:
"FDIC shelves toxic loan plan
The agency delays the launch of a program to get bad loans off banks' books, citing their capital-raising success." FDIC shelves toxic loan plan - Jun. 3, 2009
I first subscribed to the Washington Post beginning february of 2008 at their introductory offer of $2/week(all seven days) for 8 weeks. They gradually racheted it to a little over $20/ 8 weeks...then over $30/ 8 weeks. The final straw came in april when they bumped it to over $50/ 8 weeks. I called to cancel and they offered to take it back to the over $30/ 8 weeks number if I would send them an upfront payment for 26 weeks. Said 'nice knowing you'.
Well, they just called and pleaded with to come back at $.99/week (for 26 weeks). I said ok since the sunday coupons will more than pay for it.
Walmart jobs will look much better when you unemployable skill is worth nothing.
"The [Central Florida] region's labor force is also expected to shrink when compared with last year at this time. The index projects a work force of roughly 1.5 million people, down about 5 percent from June 2008. April's unemployment rate was 9.6 percent statewide, down a bit from a month earlier, and 9.7 percent in Metro Orlando."
I knew next week was a big week but somehow watching the headlines cross really hammered the point home:
US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu
US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu
Fed simultaneously buys 5 billion in 2 year notes offered June 1, 2.3bn in 3 years issued April 15.
one of the banks on my weekly BFF list is Temecula Valley Bank. (If you know Temecula, you know why its in trouble). It signed a "non-binding letter of intent" for a substantial private investment earlier this week. Stock promptly doubled from 40 cents to 80 cents, but has settled back at 60 cents. Will be interesting to see how that works out.
[I knew next week was a big week but somehow watching the headlines cross really hammered the point home:
US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu ]
Now... THAT is pent up supply. It is simply staggering. Unless the 300bln announced buyback number is jacked up substantially the market will overwhelm the Fed in short order.
Zerohedge reports that this week is the annual convention of the REIT trade association. That may be the cause of temporary REIT euphoria (and the corresponding SRS pain)
Oil is quantitatively easing back up over $68. What did I tell you yesterday? A temporary blip as BB tries to talk down the market. But, BB, despite what he says, is showing NO signs of letting up on his money printing. None.
Sure, housing prices may continue to fall, unemployment rise, wages fall, but as long as debts continue to be monetized, the money supply will grow. And money supply growth will lead to either stagflation or hyperinflation.
The greatest commercial real estate Kool Aid convention is currently in progress at the Waldorf-Astoria where NAREIT is holding its annual circlejerk week (oddly Zero Hedge was not invited), during which REITs try to convince other REITs how great the market is, how the GGP bankruptcy was the greatest thing since sliced bread, and how rents will (all facts to the contrary) continue to rise to infinity + 1 in perpetuity, as cap rates eventually become negative. Of course, if they really want to continue living in their humongous bubble, it's their right.
Now every now and then, someone utters something so dialectically stupid, that my ears start bleeding - it was only fitting that this year's "Kool Aid statement of the year" came from NAREIT itself.
Brad Case, vice president for research at NAREIT (who apparently lives in a cave and is locked into a 20 year lease agreement with exponentially accelerating rent increases), had this priceless gem of a statement:
"Real estate investment trusts in the U.S. may raise about $582 billion by 2013 for acquisitions as competitors sell properties and values fall. Publicly traded REITs will probably accumulate about $728 billion, including debt, for purchases. REITs including Vornado Realty Trust and Simon Property Group Inc. raised $11.5 billion in offerings in April and May and that’s just the front edge of the iceberg. The process that’s taking place starting right now looks very much like the process that we saw starting in early 1991."
And for another lesson on how QE affects a market, as was widely circulated, on the day after BB claims he is NOT monetizing the debt, the Fed buys back $7.5B of 2 yrnotes, of $36B offered. This is in addition to the $7.5B of 10yr notes they bought back yesterday (of $21B offered). Scroll down on this link to see the history.
They are lining up to sell debt to the Fed where it is magically turned into money (or more accurately, bank reserves), where it can be used for helpful things in our society like commodity speculation.
Too many dollars chasing too little productive activity = inflation, every time.
A friend's daughter is a bk lawyer, and she went to a conference for like-minded bk barristers last month, and one of the questions asked of the large audience, was whether they had a client that had committed suicide recently in the midst of them working on their cases, and she told me that 75% of the lawyers raised their hands...
Note the purchase of Fannie and Freddie MBS, but very little Ginnie MBS. Why is that? Isn't Ginnie issuance at an all-time high due to all the FHA loans coming down the pipe? Sure is.
BUT, the loans in Ginnie's are backed by the FHA, which have the full faith and credit of the govt, so there is actually a bid for those in the market. Fannie/Freddie? They have an "effective" guarantee, whatever that means. No bid, except BB.
Sooo, instead of putting these monsters into receivership and nationalizing them, we a) give them equity by running a deficit which BB monetizes by buying Treasuries, b) continue to allow them to issue debt which BB monetizes, and c) continue to allow them to guarantee MBS, with the value of that guarantee somewhat questionable, so BB monetizes those as well.
So basically BB is monetizing the entire balance sheet of the GSEs.
And then morons like Bernie Sanders wonder why the price of oil is rising?
Given the oversupply of law students, I would suspect there will be a lot of lowered expectations in the near future. Dreams rescaled from barrister to barista ...
on the day after BB claims he is NOT monetizing the debt, the Fed buys back $7.5B of 2 yrnotes, of $36B offered.
======
so somebody help me understand: Does BB claim that what he is doing is not technically "monetizing" or is he really getting away with public lying with absolutely no one calling him on it
"Given the oversupply of law students, I would suspect there will be a lot of lowered expectations in the near future. Dreams rescaled from barrister to barista ..."
"US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu"
Note the pattern. The bills and short term notes will sell like hotcakes. Everyone wants a safe, short term place to park their money while waiting for interest rates to rise as inflation spikes up, or until they find/develop a better place to park their money.
But the hope is that the demand for the short term paper will give some confidence in the Treasury's ability to raise money, and spur demand for the longer term paper.
If they reversed that pattern, kept the volumes the same, but auctioned the 30s first, good chance of a failed bond auction IMHO.
And ask yourself, if the govt is not planning on running a surplus for many years, why would you auction so much short term paper? Can you say "kick the can down the road"?
I think he means, he's not just printing and giving it away. There are reserves. He doesn't just give it to little people, he pays bankers at par for their damaged goods.
People call him on it. Angela Merkel was up his ass yesterday. But the people of America and the journalists who are supposed to watchdog are either numb on entitlement, or told not to care or else, "you don't want to end up like Dylan Ratigan, do you?"
Well, here is another company thinking of packing it up and moving out of the U.S. over tax concerns. (about 1/2 way down)
Alcoa Aluminum.
We seem determined to make things worse, not better. Several oil companies have already announced they will relocate to Switzerland to avoid this Presidents plans for increased taxes.
So, we not only won't get the tax increases proposed but won't get the taxes they were paying either. Tax revenues have fallen off a cliff and yet, we seem intent on losing even more tax revenues.
Now, in defense, we have to have more tax revenues but, raising taxes won't get them. We need a massive tax reform where the hundreds of billions wasted on "doing taxes" is eliminated so that paying taxes isn't the burden it is now. For many businesses, they pay more in tax compliance costs than in taxes and all of it has to be passed on to the consumer for all money in a business comes from its consumers. The money for taxes, interest on debt, materials, and profits all have to come from their customers.
As long as unemployment is rising, tax revenues will fall and raising taxes could make unemployment even worse as companies leave the U.S. completely.
[Does BB claim that what he is doing is not technically "monetizing"]
That's gotta be it. I guess if you get right down to it, and use the assumption that the "investment" won't lose $$$ (sterilized), it's technically true. If however, the investment lose say 20%, it's effectively printing money... when he sells back...
Juvenal Delinquent (profile) wrote on Thu, 6/4/2009 - 11:07 am
"Given the oversupply of law students, I would suspect there will be a lot of lowered expectations in the near future. Dreams rescaled from barrister to barista ..."
I bought the law, but the loan won
Nice work. I suspect a lot of them will be better for the experience if they go into practice later... it only takes haunting biglaw blogs and thevault for a few days/weeks, plus a couple of anecdotal observations of peers who went off to top law firms straight from the JD at good schools and promptly became card-carrying members of the bourgeoisie in their respective metros to see the kind of people who most commonly exit the machine. For them, the entitlement dream continues... until it doesn't, I guess.
Are the MBS that BB is buying new issue or existing securities? If both, what are the proportions.
I think this makes a difference. New issues are most likely refi's. In that case BB is retiring higher interest debt and replacing it with lower interest debt. Arguably illegal, but probably not inflationary. If BB is buying existing debt, I am of the opinion he is purposefully over-paying in order to bail out banks and potentially stick the losses on the taxpayer. Losses could lead to even more monetization.
This is why corporate taxes and the globalization of the economy needs to be adressed on a multi national scale. Why shouldn't EVERY profitable company move it's official headquarters to an offshore tax haven and pay no income taxes.
And don't give me that BS about all taxes being paid by the consumer, so lets have no corporate tax argument. Taxing is ALWAYS about redistribution of wealth. So say, for example if Microsoft had not been taxed on profits, Bill Gates might be worth 100 billion instead of 50 billion. Corporations need to pay taxes, they use national services.
so somebody help me understand: Does BB claim that what he is doing is not technically "monetizing" or is he really getting away with public lying with absolutely no one calling him on it
I'm pretty sure his claim is that it would only be "monetizing" if he didn't pull the liquidity back out of the system later.
So the Prez is in B.F.E., a later-day Woodrow Wilson trying to make points, while the Chinese are carving up the debt reparations by buying up everything they can get for Yanqui dollars...
ghostfaceinvestah, Thank you for your detailed and enlightening posts, keep them comming as this unfolds. Your awsome and I look forward to learning what you have to teach daily!
I'm pretty sure his claim is that it would only be "monetizing" if he didn't pull the liquidity back out of the system later.
And that seems to me an absurd claim. Somebody had a great analogy yesterday... It's as if I'm printing $20s in my basement to buy gold and make the claim I'm not counterfeiting because I plan to sell the gold later.
Well, here is another company thinking of packing it up and moving out of the U.S. over tax concerns. (about 1/2 way down)
Alcoa Aluminum.
All the USG needs to do is start looking at 'transfer pricing' and they will pay anyway IF they sell in North America. Personally I'd like to see a VAT just to shut those guys up once and for all. Then they can move anywhere they want... Outer Mongolia, the Moon, wherever... they'd still pay taxes on product sold here.
So the Prez is in B.F.E., a later-day Woodrow Wilson trying to make points, while the Chinese are carving up the debt reparations by buying up everything they can get for Yanqui dollars...
The more dollars they pour out into the world [anywhere] the tougher & more expensive that peg thingie they do becomes. 'Commies' gonna learn all about the Forex whether they want to play there or not.
It's as if I'm printing $20s in my basement to buy gold and make the claim I'm not counterfeiting because I plan to sell the gold later.
Well, to make the analogy valid you'd also need to add that (1) you're going to shred the $20s you get back when you sell the gold and (2) you have the legal right to print $20s.
I think two more legitimate questions are whether he'll maintain his intent to pull the liquidity back out and whether he'll be able to do so without destroying the Fed's balance sheet in the process (which would no doubt mean a bailout from the Treasury and would put us back where we started).
dryfly - I agree on transfer pricing. Unfortunately it is so hard to enforce there will always be abuse. Transfer pricing is how multinationals avoid billions upon billions in taxes and it is a disgrace they are allowed to drain the US in that way. I think VAT is probably the way to go - because like you say, if they do business here, they pay the tax no matter what also would help put the brakes on consumption which the US needs to scale back one way or another.
Might as well buy them out if it's worth the risk, anything such as this would be a risk or initially if the company was doing well before they might jump start its production again? The failures are big for the company from what I read. Lets see what happens with this one.
Best regard,
Michael Fridman
The “MAN” Experience
Swine flew in from the last thread...
Talked to a Ph.D that was digging his new job working graveyard @ 7-11.
He advised me to step clear of the mindfield, right next to the slurpee machine.
So the vultures are coming out to feast.
When the markets is always going down, the vultures have no incentive to act immediately. Now that we're no longer always going down, there's an increased urgency for vulture funds to act or their competitors will.
This will lend strength to short term rebound. If there was a lot of vulture demand "pent-up" then this will even give strength into mid term.
How could a great bank like Corus be in such bad shape. /snark
Those are the attributes of a fine, fine bank.
I still can't get over the fact that Warran Buffet's trade back in 2008, looks SO GOLDEN today, and getting more valuable every single day.
That guy is a genius and brave. Investing when everyone is fearful the world is crashing that's Balls.
From last thread:
Costco same store down 7%.
Target same store down 6%.
You left out BJ's. They are down 6.8% as well.
Sorry, the page you requested could not be found...
Any of you ever read "Roughing It" by Mark Twain, or "My Adventures With Your Money" by George Graham Rice?
In the 19th & early 20th century, the swindle was not the gold or silver mine, but selling mining stocks to gullible minds...
David Carradine found dead.
My Way
Snatch blade of rope, grasshopper.
r.i.p.
"Out of recievership" is the key phrase: of course, they could buy Corus anytime. But they're waiting to see how many of your friendly tax dollars will be used to reanimate parts of this otherwise dead financial corpse.
hc writes: I still can't get over the fact that Warran Buffet's trade back in 2008, looks SO GOLDEN today, and getting more valuable every single day. That guy is a genius and brave.
Or, able to use his political connections to get tax dollars routed so as to make his losses good. Whether that makes him a genius, or we the people stupid, is a judgment I'll leave to the reader.
while buying assets out of BK has always been available, companies tried to avoid the stigma of liquidation and actually tried to reorganize. the expectation now, especially after the good/bad Chrysler/GM BKs, is to forgo the reorg and just go straight to vulture mode.
(yes, i know chap 11 doesn't apply to banks).
A Corus Line...
Angry Saver (profile) wrote on Thu, 6/4/2009 - 9:00 am
FR,
Novations require agreement of both parties of the contract. I certainly didn't agree to the new deal. And I think a lot of other prudent people didn't agree either.
My younger self had a similar argument against the social contract that nearly got him laughed out of a political philosophy class. The particularly-colorful metaphor about consent versus force was probably ill-chosen by my nineteen-year-old counterpart. Again, most truths hide in plain sight. FWIW, I am one of those "prudent people" and also didn't get the consent form in the mail yet.
I heard it's really hard to get tickets to see the production: A Corus Line.
"More than a third of the 540 senior finance executives who responded to the survey say the recovery will begin in the second half of this year, while 31% are looking to the first half of 2010. Another 20% don't expect the economy to begin to pick up until later next year. On average, CFOs say the recession will last another 10 months."
CFOs Hoping for the Best, Planning for the Worst - - CFO.com
Saw it five times.
Old:...A Chorus Line: Dancing
New... A Corus Line: Dancing
Railfax Report - North American Rail Freight Traffic Carloading Report
New railfax out. Trying to nap, but -- not looking too good this week. Major downdraft in the 4 weeks rolling avgs.
2 pivotal events for the Fed and the FDIC were Lehman & IndyMac Bank failing.
The couldn't let a goliath fail again, nor allow an underling to fail so publicly.
Well, someone will eventually have all those look-alike towers. Austin, Tampa, Charlotte, Atlanta all have highly similar Corus-funded glassy blocs, many developed by Novare Group.
At some price point, they'll be an excellent buy.
Grasshopper: "Old Man, how is it that you hear all these things?"
Master Po: "Young Man, how is it that you do not?"
I feel sad. I will probably have to hole up and watch my DVDs this weekend.
"David Carradine found dead."
Big Madoff investor? or perhaps GM?
Not a lot of HOPE too much Change
The great state of California no longer has MedicAide services for adults over 21. No emergency room, doctor visits, dental care etc.
Byz, thanks for the railfax. The 4-week rolling averages look disturbing; the trend line has "keeled over" and looks downward bound once more.
re David Carradine, some might like to see him at the start of his career:
http://imagecache.allposters.com/images/pic/MMPH/249711~David-Carradine-Posters.jpg
Here's a headline that speaks for itself: "Wal-Mart says it will create 22,000 jobs in 2009".
404 | MiamiHerald.com
Walmart motto: We don't pay you enough to even shop here.
threetorches (profile) wrote on Thu, 6/4/2009 - 10:46 am
Byz, thanks for the railfax. The 4-week rolling averages look disturbing; the trend line has "keeled over" and looks downward bound once more.
Yeah, I have to say I was not really expecting that myself. I would guess its auto BK related.
Alternate Walmart motto: "Come work for us and keep your welfare benefits."
Yeah Illinois is looking at their stem cell investment, and hope it grows a money tree.
Lumber is way up in the futures but shipments are way down. That combination does not bode well for any nascent recovery.
From CR's link:
Corus ... hired Bank of America Corp. to solicit capital this month or sell the entire firm to avoid being shuttered ... Investors may offer to buy the lender while it’s still in business or to purchase its assets out of receivership, said the people, who requested anonymity because the process isn’t public.
Back on Corus - is this an FDIC sponsored pre-take over liquidation? Trying to avoid a formal BFF by doing a back door shotgun marriage? Or is it the last private attempt to fix it prior to the FDIC BFF Pizza Party?
Anyone have an idea?
(Owed to the Grateful Debt)
Driving that train, high on loan pain,
Dow Jones is ready, watch your speed.
Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
This old racket makes it on time,
Leaves central station bout a quarter to nine,
Hits river bottom at seventeen to,
At a quarter to three you know its travlin' north again.
Driving that train, high on loan pain,
Dow Jones is ready, watch your speed.
Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
Trouble ahead, earnings in red,
Take my advice youd be better off w/o debt.
CONductor's sleeping, train hundred and two is
On the wrong track and headed for you.
Driving that train, high on loan pain,
Dow Jones is ready, watch your speed.
Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
Trouble with you is the trouble with me,
Got two good eyes but you still dont see.
Come round the bend, you know its the end,
The fireman screams and the engine just gleams...
Why are reits still screaming up? anyone?
Yeah, I have to say I was not really expecting that myself. I would guess its auto BK related.
Cars and related component imports...
They move cars by rail from assembly or ports to 'transfer yards' where they then go on truck to local dealers - way down.
They move a lot of imported parts in containers via piggy back... to the yards then on to trucks for the 'last mile' - also down.
Plus it is early for grain [another big rail consumer]... I see them emptying the last of last years crop as I drive about - not much left to move until Sept & October.
Over all it doesn't look to bullish for rail in the near term.
Why are reits still screaming up? anyone?
Green shoots, baby.....
get on the up train.....
Collapse in crushed stone ship too. Broke municipalities deferring roadbed maintenance / wind-down in forward spending on major capital investments (not gonna need too much gravel to put up the new marriott on the back patio of the old marriott)?
Hmm... Is this the start of capital fleeing USA into other countries? Could a UST/USD collapse be far away if investors stop investing in USA and in Asia instead?
Investors-in-Developing-Markets-See-Optimism: Personal Finance News from Yahoo! Finance
Wonder if it's due to the new loans (TALF?) that the fed is supposed to be providing.
Hourly wage going down in the midst of your country's currency being constantly devalued = Mexico late 1970's-early 1990's.
Think it couldn't happen here?
Wonder if it's due to the new loans (TALF?) that the fed is supposed to be providing.
Sorry if this was posted earlier:
"FDIC shelves toxic loan plan
The agency delays the launch of a program to get bad loans off banks' books, citing their capital-raising success."
FDIC shelves toxic loan plan - Jun. 3, 2009
Talk about desparation.
I first subscribed to the Washington Post beginning february of 2008 at their introductory offer of $2/week(all seven days) for 8 weeks. They gradually racheted it to a little over $20/ 8 weeks...then over $30/ 8 weeks. The final straw came in april when they bumped it to over $50/ 8 weeks. I called to cancel and they offered to take it back to the over $30/ 8 weeks number if I would send them an upfront payment for 26 weeks. Said 'nice knowing you'.
Well, they just called and pleaded with to come back at $.99/week (for 26 weeks). I said ok since the sunday coupons will more than pay for it.
Walmart jobs will look much better when you unemployable skill is worth nothing.
The only thing i'll miss about the fishwraps was how they taught me about product placement, be it news or advertising.
Like I said, $5 billion FDIC hit on Bank United.
Another $5 billion hit on Corus.
$10 billion in all.
Hey, I was talking about Corus months before anybody else here, right?
I no longer have any respect for sub-double-digit losses in the billions, sorry.
Walmart jobs will look much better when you unemployable skill is worth nothing.
"The [Central Florida] region's labor force is also expected to shrink when compared with last year at this time. The index projects a work force of roughly 1.5 million people, down about 5 percent from June 2008. April's unemployment rate was 9.6 percent statewide, down a bit from a month earlier, and 9.7 percent in Metro Orlando."
Region's economy to shrink further - Orlando Sentinel
I knew next week was a big week but somehow watching the headlines cross really hammered the point home:
US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu
Green shoots, baby.....
get on the up train.....
Its like a train headed for a cliff with locked doors.
Employer: Fudge Fudge
Prospective Employee: Wink Wink
Pay no more than $5 an hour, despite what the minimum wage is/was.
(a) Flight to quality.
(b) They aren't building more REITs.
(c) Real estate always goes up.
(d) Corus firesale auction will drive up asset prices.
(e) Never-ending supply of weak shorts piling in and washing out.
(edited because I accidentally left out (d) the first time)
Kudlow - Symbolic teabagging.
Yalt (profile) wrote on Thu, 6/4/2009 - 11:23 am
US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu
Fed simultaneously buys 5 billion in 2 year notes offered June 1, 2.3bn in 3 years issued April 15.
Across the Curve » Blog Archive » Buyback
On top of 5 billion yesterday that was just a week from issue.
one of the banks on my weekly BFF list is Temecula Valley Bank. (If you know Temecula, you know why its in trouble). It signed a "non-binding letter of intent" for a substantial private investment earlier this week. Stock promptly doubled from 40 cents to 80 cents, but has settled back at 60 cents. Will be interesting to see how that works out.
Temecula Valley Bancorp Enters Into Non-Binding LOI with Private Equity Funds for up to $210 Million Cash Infusion
All this buying stuff from ourselves is one big Donner Dinner Party financially...
Please pass me an A.R.M.
And TNX is up to 3.66 again.
[I knew next week was a big week but somehow watching the headlines cross really hammered the point home:
US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu ]
Now... THAT is pent up supply. It is simply staggering. Unless the 300bln announced buyback number is jacked up substantially the market will overwhelm the Fed in short order.
Re: REIT screaming up
Zerohedge reports that this week is the annual convention of the REIT trade association. That may be the cause of temporary REIT euphoria (and the corresponding SRS pain)
It is thime to replace Geithner,is Bobby Mcferrin available?
If I recall correctly, somebody owes money to the tip jar for losing their bet with me on this. Who was it? Bet was circa January-February.
Oil is quantitatively easing back up over $68. What did I tell you yesterday? A temporary blip as BB tries to talk down the market. But, BB, despite what he says, is showing NO signs of letting up on his money printing. None.
Sure, housing prices may continue to fall, unemployment rise, wages fall, but as long as debts continue to be monetized, the money supply will grow. And money supply growth will lead to either stagflation or hyperinflation.
Why are reits still screaming up? anyone?
Zero Hedge: REIT Support Group Therapy In Full Swing
Now, Tyler can sometime be a wingnut, but......
The greatest commercial real estate Kool Aid convention is currently in progress at the Waldorf-Astoria where NAREIT is holding its annual circlejerk week (oddly Zero Hedge was not invited), during which REITs try to convince other REITs how great the market is, how the GGP bankruptcy was the greatest thing since sliced bread, and how rents will (all facts to the contrary) continue to rise to infinity + 1 in perpetuity, as cap rates eventually become negative. Of course, if they really want to continue living in their humongous bubble, it's their right.
Now every now and then, someone utters something so dialectically stupid, that my ears start bleeding - it was only fitting that this year's "Kool Aid statement of the year" came from NAREIT itself.
Brad Case, vice president for research at NAREIT (who apparently lives in a cave and is locked into a 20 year lease agreement with exponentially accelerating rent increases), had this priceless gem of a statement:
"Real estate investment trusts in the U.S. may raise about $582 billion by 2013 for acquisitions as competitors sell properties and values fall. Publicly traded REITs will probably accumulate about $728 billion, including debt, for purchases. REITs including Vornado Realty Trust and Simon Property Group Inc. raised $11.5 billion in offerings in April and May and that’s just the front edge of the iceberg. The process that’s taking place starting right now looks very much like the process that we saw starting in early 1991."
Countries sure are sticky on the way down....
(Timbabwe watches Lassie press her paw down on the computer mouse to digitally create money out of nothing...)
T: Thanks Lassie...If we get out of this jam, extra biscuits are coming!
Green chutes! US consumer de-leveraging at a record pace ;
The May filing rate represented a 2.8% increase from the previous month and a year-over-year increase of 40.9%. BK #'s
The independence of the US Central Bank
Q: Independent from whom exactly ?
A: The US Taxpayer.
One step forward, five steps back. Buying $15-20 billion a week is just not getting it done.
nova (profile) wrote on Thu, 6/4/2009 - 11:45 am
Countries sure are sticky on the way down....
Fish, if you are desperate to live, come and gulp down the hook by yourself.
Add another 10bps to mortgage rates today.
Bloomberg.com:
Personal Finance
And for another lesson on how QE affects a market, as was widely circulated, on the day after BB claims he is NOT monetizing the debt, the Fed buys back $7.5B of 2 yrnotes, of $36B offered. This is in addition to the $7.5B of 10yr notes they bought back yesterday (of $21B offered). Scroll down on this link to see the history.
Federal Reserve Bank of New York - Permanent Open Market Operations
They are lining up to sell debt to the Fed where it is magically turned into money (or more accurately, bank reserves), where it can be used for helpful things in our society like commodity speculation.
Too many dollars chasing too little productive activity = inflation, every time.
Anecdotally...
A friend's daughter is a bk lawyer, and she went to a conference for like-minded bk barristers last month, and one of the questions asked of the large audience, was whether they had a client that had committed suicide recently in the midst of them working on their cases, and she told me that 75% of the lawyers raised their hands...
QE killing velocity
http://2.bp.blogspot.com/_Et4TQ-a0gGU/SiZSGyr-KaI/AAAAAAAACI4/ZfYHNk2KWiU/s1600-h/money_multipliers.png
So what happens when the Walter Mitty Sobchaks have to hock their weapons to pay for food?
More data in my attempt to educate the public about the MBS market. These are last week's Fed activities in the MBS market.
Agency Mortgage-Backed Securities Purchase Program - Federal Reserve Bank of New York
Note the purchase of Fannie and Freddie MBS, but very little Ginnie MBS. Why is that? Isn't Ginnie issuance at an all-time high due to all the FHA loans coming down the pipe? Sure is.
BUT, the loans in Ginnie's are backed by the FHA, which have the full faith and credit of the govt, so there is actually a bid for those in the market. Fannie/Freddie? They have an "effective" guarantee, whatever that means. No bid, except BB.
Sooo, instead of putting these monsters into receivership and nationalizing them, we a) give them equity by running a deficit which BB monetizes by buying Treasuries, b) continue to allow them to issue debt which BB monetizes, and c) continue to allow them to guarantee MBS, with the value of that guarantee somewhat questionable, so BB monetizes those as well.
So basically BB is monetizing the entire balance sheet of the GSEs.
And then morons like Bernie Sanders wonder why the price of oil is rising?
Given the oversupply of law students, I would suspect there will be a lot of lowered expectations in the near future. Dreams rescaled from barrister to barista ...
on the day after BB claims he is NOT monetizing the debt, the Fed buys back $7.5B of 2 yrnotes, of $36B offered.
======
so somebody help me understand: Does BB claim that what he is doing is not technically "monetizing" or is he really getting away with public lying with absolutely no one calling him on it
"Given the oversupply of law students, I would suspect there will be a lot of lowered expectations in the near future. Dreams rescaled from barrister to barista ..."
I bought the law, but the loan won
Scotto, I'm not seeing exclusivity in those options.
"US to Sell $31B in 6-Month Bills Mon
US to Sell $35B in 3-Year Notes Tue
US to Sell $19B in Reopened 9-Year 11-Month Notes Wed
US to Sell $11B in Reopened 29-Year 11-Month Bonds Thu"
Note the pattern. The bills and short term notes will sell like hotcakes. Everyone wants a safe, short term place to park their money while waiting for interest rates to rise as inflation spikes up, or until they find/develop a better place to park their money.
But the hope is that the demand for the short term paper will give some confidence in the Treasury's ability to raise money, and spur demand for the longer term paper.
If they reversed that pattern, kept the volumes the same, but auctioned the 30s first, good chance of a failed bond auction IMHO.
And ask yourself, if the govt is not planning on running a surplus for many years, why would you auction so much short term paper? Can you say "kick the can down the road"?
I think he means, he's not just printing and giving it away. There are reserves. He doesn't just give it to little people, he pays bankers at par for their damaged goods.
People call him on it. Angela Merkel was up his ass yesterday. But the people of America and the journalists who are supposed to watchdog are either numb on entitlement, or told not to care or else, "you don't want to end up like Dylan Ratigan, do you?"
I wonder if the shrewd fixed income traders @ JPM are making lots of dough selling their treasuries to Ben, beating the CHinese to the punchbowl ?
Rude Awakening » Blog Archive » When the Chinese Laugh, Prepare to Cry
Well, here is another company thinking of packing it up and moving out of the U.S. over tax concerns. (about 1/2 way down)
Alcoa Aluminum.
We seem determined to make things worse, not better. Several oil companies have already announced they will relocate to Switzerland to avoid this Presidents plans for increased taxes.
So, we not only won't get the tax increases proposed but won't get the taxes they were paying either. Tax revenues have fallen off a cliff and yet, we seem intent on losing even more tax revenues.
Now, in defense, we have to have more tax revenues but, raising taxes won't get them. We need a massive tax reform where the hundreds of billions wasted on "doing taxes" is eliminated so that paying taxes isn't the burden it is now. For many businesses, they pay more in tax compliance costs than in taxes and all of it has to be passed on to the consumer for all money in a business comes from its consumers. The money for taxes, interest on debt, materials, and profits all have to come from their customers.
As long as unemployment is rising, tax revenues will fall and raising taxes could make unemployment even worse as companies leave the U.S. completely.
There's quite a few folks whose 15 minutes of fame wont allow them to remove the blinders from their very eyes, the Sgt. Schultz routine...
I Know Nothing, Nothing!
[Does BB claim that what he is doing is not technically "monetizing"]
That's gotta be it. I guess if you get right down to it, and use the assumption that the "investment" won't lose $$$ (sterilized), it's technically true. If however, the investment lose say 20%, it's effectively printing money... when he sells back...
Hi CR, Did you get invited to the NAREIT conference? (That was snark, folks). Zero Hedge has posted some of the materials if you are interested.
Zero Hedge: REIT Support Group Therapy In Full Swing
Juvenal Delinquent (profile) wrote on Thu, 6/4/2009 - 11:07 am
"Given the oversupply of law students, I would suspect there will be a lot of lowered expectations in the near future. Dreams rescaled from barrister to barista ..."
I bought the law, but the loan won
Nice work. I suspect a lot of them will be better for the experience if they go into practice later... it only takes haunting biglaw blogs and thevault for a few days/weeks, plus a couple of anecdotal observations of peers who went off to top law firms straight from the JD at good schools and promptly became card-carrying members of the bourgeoisie in their respective metros to see the kind of people who most commonly exit the machine. For them, the entitlement dream continues... until it doesn't, I guess.
Joining the Corus invisible.
By the way AMF,
thank you
Ghost,
Are the MBS that BB is buying new issue or existing securities? If both, what are the proportions.
I think this makes a difference. New issues are most likely refi's. In that case BB is retiring higher interest debt and replacing it with lower interest debt. Arguably illegal, but probably not inflationary. If BB is buying existing debt, I am of the opinion he is purposefully over-paying in order to bail out banks and potentially stick the losses on the taxpayer. Losses could lead to even more monetization.
Its "investor" not "inwestor"
do realize that there are two levels at play here. The instinctive, animal level, where we
want to punish those who have done us wrong, while those who have done us wrong have done it
following their animal desires. There is also the rational level, of which to I am
referring to above. Realistically, I know the beast in us will take over and this will end
like it did in France in the 1790's. I will, however, not be the one holding the sword.
good articles> Econ & Finance Articles Updated Daily
This is why corporate taxes and the globalization of the economy needs to be adressed on a multi national scale. Why shouldn't EVERY profitable company move it's official headquarters to an offshore tax haven and pay no income taxes.
And don't give me that BS about all taxes being paid by the consumer, so lets have no corporate tax argument. Taxing is ALWAYS about redistribution of wealth. So say, for example if Microsoft had not been taxed on profits, Bill Gates might be worth 100 billion instead of 50 billion. Corporations need to pay taxes, they use national services.
so somebody help me understand: Does BB claim that what he is doing is not technically "monetizing" or is he really getting away with public lying with absolutely no one calling him on it
I'm pretty sure his claim is that it would only be "monetizing" if he didn't pull the liquidity back out of the system later.
So the Prez is in B.F.E., a later-day Woodrow Wilson trying to make points, while the Chinese are carving up the debt reparations by buying up everything they can get for Yanqui dollars...
Looking at the retail chain-store sales numbers cliff diving, I'm wondering how that Fair Tax thing would've worked out.
ghostfaceinvestah, Thank you for your detailed and enlightening posts, keep them comming as this unfolds. Your awsome and I look forward to learning what you have to teach daily!
We're all Section 8 now!
City turns upscale building in Crown Heights into homeless shelter
City turns upscale building in Crown Heights into homeless shelter
I'm pretty sure his claim is that it would only be "monetizing" if he didn't pull the liquidity back out of the system later.
And that seems to me an absurd claim. Somebody had a great analogy yesterday... It's as if I'm printing $20s in my basement to buy gold and make the claim I'm not counterfeiting because I plan to sell the gold later.
I will, however, not be the one holding the sword.
I'll hold it for you.
Same old refrain:
Verse
Corus
Verse
Well, here is another company thinking of packing it up and moving out of the U.S. over tax concerns. (about 1/2 way down)
Alcoa Aluminum.
All the USG needs to do is start looking at 'transfer pricing' and they will pay anyway IF they sell in North America. Personally I'd like to see a VAT just to shut those guys up once and for all. Then they can move anywhere they want... Outer Mongolia, the Moon, wherever... they'd still pay taxes on product sold here.
25% VAT
$1 B Sales
$250M VAT PMT Due
They'd be crying for the old system w/in a day.
Corus got pigged!
So the Prez is in B.F.E., a later-day Woodrow Wilson trying to make points, while the Chinese are carving up the debt reparations by buying up everything they can get for Yanqui dollars...
The more dollars they pour out into the world [anywhere] the tougher & more expensive that peg thingie they do becomes. 'Commies' gonna learn all about the Forex whether they want to play there or not.
Get's more interesting by the day.
No wonder REITs are going up!
It's as if I'm printing $20s in my basement to buy gold and make the claim I'm not counterfeiting because I plan to sell the gold later.
Well, to make the analogy valid you'd also need to add that (1) you're going to shred the $20s you get back when you sell the gold and (2) you have the legal right to print $20s.
I think two more legitimate questions are whether he'll maintain his intent to pull the liquidity back out and whether he'll be able to do so without destroying the Fed's balance sheet in the process (which would no doubt mean a bailout from the Treasury and would put us back where we started).
dryfly - I agree on transfer pricing. Unfortunately it is so hard to enforce there will always be abuse. Transfer pricing is how multinationals avoid billions upon billions in taxes and it is a disgrace they are allowed to drain the US in that way. I think VAT is probably the way to go - because like you say, if they do business here, they pay the tax no matter what also would help put the brakes on consumption which the US needs to scale back one way or another.
JD: "In the 19th & early 20th century, the swindle was not the gold or silver mine, but selling mining stocks to gullible minds... "
Hey, JD. What do you mean "was"? Where is the evidence that the mining industry has evolved its ethics?