small bank resolution is a dicey situation. on the one hand, we don't want to reward ineptitude and malfeasance by keeping them solvent, but on the other hand, we don't want these small banks to be served on a silver platter to the larger banks, especially on the FDIC/taxpayer's tab.
And I thought everyone agreed that the FDIC closing small failing banks - albeit slowly - was an example of how bank problems should be resolved. Now we have "Too small to fail"? - CR
I wonder if it is the power of mostly rural 'small state' senators... I mean So Dak has as many senators as Cali or NY... if the big boyz want the gravy to keep flowing they might have to share a little of it with the rubes. Corruption for all!!
I'm thinking the small bank thing has to do with the fact that a lot of them have significant accounts and services with big banks. They were also a consumer of some of the financial products, placing them as assets.
“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion hosted by St. Paul’s Cathedral in London. The panel’s discussion topic was, “What is the price of morality in the marketplace?”
I'm thinking the small bank thing has to do with the fact that a lot of them have significant accounts and services with big banks. They were also a consumer of some of the financial products, placing them as assets.
I'm sure that plays a role BUT a lot of those 'relationships' are the assets that get shifted from failed bank 'A' to acquiring bank 'B' at a discount - often w/ FDIC 'cost sharing'. The actual relationship doesn't necessarily go away - just some other firm now has it.
I'm guessing the rubes are pissed the local banks get shuttered and gobbled up [along w/ jobs] by the larger acquiring banks. My guess is rural congress critters hear about it every time they head home on the rubber chicken circuit.
The ICBA lobbyists and small town main street businesses have been beating the drum with senators and house members for some time that the TBTF banks were getting help, but not the little banks, and unless they wanted to see the main street businesses die (the TBTF banks and regionals would not lend to them), small community banks and their communities would wither and die. Looks like BHO and Treasury finally got the message.
He predicts that, on an annualized basis, the average home price in B.C. will climb to a new high of $463,800 by the end of 2009, before advancing to $497,800 in 2010 and $534,800 in 2011.
For anyone who hasn't read about the Italian toxic waste dumping, FT.com / Europe - Italian police close in on ‘toxic’ shipwreck
is a good story on the recent edition of it
EHP, that's quite interesting. It mentions claims of toxic dumping off the coast of Somalia. A lot of Somali pirates have argued that they are actually patrolling Somali waters and attempting to prevent foreign ships from dumping toxic waste in Somali waters. Perhaps a little bit of truth to it?
too small to fail?
I think CR is looking at this in the wrong way. I'll use the model of what the S&L's did when the government
de-regulated passbook savings rates, in effect, stripping away the 50 basis points that S&Ls could pay
their depositors. S&Ls were toast and should have gone the way of the dinosaur but they formed an
association and lobbied both aisles of Congress aggressively and were able to get a number of changes
enacted one of which was the type of investments they could carry in their portfolios...
I remember talking to a colleague at Solly in '87 and he had just returned from a long trip visiting all the S&Ls
out West along with selling them some of our inventory I asked him what their portfolios looked like and
he said, "dog***t".
So, my guess here is that the TSTF went back to the old playbook of the early 80s and have lobbied
various institutions in a similar fashion.
Community banks are well connected and have always had a strong lobbying presence on the Hill - There have to be thousands of small towns in the country that are only served by the community banks and the TBTF banks have no presence (or desire to establish a presence) in these communities.
Terry
"There have to be thousands of small towns in the country that are only served by the community banks and the TBTF banks have no presence (or desire to establish a presence) in these communities."
AGREED.
Those small town banks have collectively more clout than TBTF banks if used correctly... politically it's impossible to say NO to them if you bail out the Big Boys!
The small businesses that rely on credit are sweating bullets. The community banks are suffering losses and and cutting back loans. CIT, which was the largest SBA lender, is toast. The credit card issuers are hiking fees and rates and cutting limits. They have no access to financing.
dryfly,
It's only a $13,238.96 payment on a $2 million starter home (30yr amortization, 5yrs fixed at super low 6.95%) . Put in some granite counter tops and you'll make out like a bandit. Now is a great time to give up that boring career as a surgeon, lawyer, or engineer... all the money is in real estate
anecdote: noticed a newly built home, completed around summer time. Hired a new realtor that was 'staging' the house with furniture the other night. All of the new homes completed this year that I have kept note of haven't sold. Basically everything was on hold at the beginning of the year, then everything from individual houses to full subdivisions started back up in the spring, and then it seems like everyone believes prices are going up so they're happy to wait until they get 'their' price. Even though there weren't the distressed sales, the prices in Vancouver had fallen at a rate faster than any of the American C-S listed cities, but that was only from March 08 until end of year 08. Hoping the standard Olympic pattern holds true and the prices tank soon afterwards
EHP, that's quite interesting. It mentions claims of toxic dumping off the coast of Somalia. A lot of Somali pirates have argued that they are actually patrolling Somali waters and attempting to prevent foreign ships from dumping toxic waste in Somali waters. Perhaps a little bit of truth to it?
Tonnes of truth to it. Europe is a very bad global citizen when it comes to the oceans, Africa, or both. Search for Trafigura for another example
A lot of the small banks only make pass thru money on credit cards though. A lot of them have Elan and other places actually handle the management and the profits. Residential real estate was very low margin and in many cases a loss leader. A lot of the community banks couldn't compete on floor plans or a lot of the small business segment's business. Where a lot of them had been making money and becoming over-exposed was CRE.
Listen to a top economist in the Obama administration describe Paul A. Volcker, the former Federal Reserve chairman who endorsed Mr. Obama early in his election campaign and who stood by his side during the financial crisis.
“The guy’s a giant, he’s a genius, he is a great human being,” said Austan D. Goolsbee, counselor to Mr. Obama since their Chicago days. “Whenever he has advice, the administration is very interested.”
Well, not lately. The aging Mr. Volcker (he is 82) has some advice, deeply felt. He has been offering it in speeches and Congressional testimony, and repeating it to those around the president, most of them young enough to be his children.
He wants the nation’s banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008. And the administration is saying no, it will not separate commercial banking from investment operations. Volcker’s Voice Fails to Sell a Bank Strategy (NY Times)
JP - Not the case in ag lending. Farmers always have borrowed money from the local bank to put in the crop. If the ag interests can't get loans, the main street businesses in town don't sell goods.
TJ & the Bear:
Leave No Banker Behind
+1
.....
in other news: Weeks after Rio de Janeiro was selected to host the Olympics, drug bandits shot down a police helicopter.
perhaps the IOC should consider shooting helicopters as an Olympic sport, seems so modern doesn't it compared to that
other one where you go by horseback and fire rifles or something like that...
Not the case in ag lending. Farmers always have borrowed money from the local bank to put in the crop. If the ag interests can't get loans, the main street businesses in town don't sell goods.
How will the lack of ag credit from farm bank impact my ability to eat 12 months after a missed planting season?
There was a time that having 6-9 months of operating cash in the bank was normal.
Modern, business-school CFOs convinced businesses this was the corporate equivalent of "dead equity".
Remember, these are the "smart" folks. At the company I used to work for, the CFO got much of the short-term cash into auction-rate securities to goose the interest rate. When the freeze happened, they found themselves having much of their working capital locked into long-term bonds, and had to sue the bank to try to unlock -- they still don't have cash yet, though a deal has been struck for them getting in (in return for dropping the suit) sometime in 2010.
That one mistake could have sunk the company, has we not had cash flowing. All for a measly percentage on a small pool of cash. Stupid. Cui bono?
'Credit Crisis Cassandra'
' Brooksley Born foresaw a financial cataclysm...she was the head of a tiny government agancy(CFTC) who wanted to regulate derivatives.'
(She was told she had no jurisdiction. Clinton had her replaced.) WaPo profile of Brooksley Born
that is why my firm has squirreled away a years worth of fixed expenses in a treasury only money market fund. it won't be fun, but we won't be be dependent on the vagaries of the banks.
Isn't a lot of the ag lending pass through to various state and federal programs? I'm sure it make money, but I can't imagine it is enough to make a bank.
We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,
Perhaps the best way to achieve the inequality we all need to prosper is to limit all banking, commercial and investment, to THE ONE BANK, the bank of Goldman Sachs. If we all worked directly for Goldman, it would be much more efficient at spreading the inequality.
Perhaps the best way to achieve the inequality is to give ALL the Goldman Sachs wealth to CR readers. I need a new bass boat and deserve a week at Waikiki.
DC Rogers
when I was at the Times in '85 and they were at their high water mark (think their stock hit 37 that year)
we had on average 135 million in short cash to do repos with (all A1 P1 commercial paper)...
our revolver loan at Morgan was 250 mil ...
EDIT
how practices have changed! only 20% of our cash was locked for 30 days, most was overnight or
3 to 5 days...
I'd like to add one last thing about my gripe on the previous thread concerning offshore repair stations.
The ICAO (Int'l Civil Aviation Organization) specifies English as the international language of aviation, which is why an air traffic controller in China, for example, speaks English.
However, there is an exception in the US regulations. The FAA will grant an exception to FAA licensed repairmen who reside outside the US. They're not required to speak, read or write English. This brings up a conflict because all aircraft documentation, such as operating instructions and maintenance documentation, is in English.
Interesting, huh?
Hoocoodanode also applies to aircraft maintenance.
Small banks have allot of the CRE on their books. This needs to be extended and pretended just like RRE. So it is time to prop up the local banks with bad loans on the books.
And I agree that Sheila is broke, so the insolvent small banks have to become "solvent" in some other way.
Speaking of disasters, any recent news on the condition of the Federal Home Loan Banks. I haven't noticed any news recently, but there were articles and blogs about CountryFried and Atlanta before the BofA takeover.
I'm not sure if extend and pretend is my favourite descriptor. It's definitely accurate, but it's 5 syllables. Older variations are
Evergreening
Round tripping
Bullsh***ng
Fraud
Those are older variations only if they are all synonyms for extend and pretend.
Current glossary definition: Increasing the maturity of someone's debt - knowing that they will default - while imagining that economic activity or leverage will return to the same level as when the loan was made.
Rep. Edolphus Towns (D-N.Y.) locked Republicans out of the House Oversight and Government Reform Committee room to keep them from meeting when Democrats aren’t present.
Towns’ action came after repeated public ridicule from the leading Republican on the committee, Rep. Darrell Issa (R-Calif.), over Towns’s failure to launch an investigation into Countrywide Mortgage’s reported sweetheart deals to VIPs...
sportsfan
round tripping = latin america debt crisis, 1970s
evergreening = japan, 1980s
fraud and b.s. are pre-wwii era
don't know what was used during Asian flu / China banking crisis (still not dead / alive btw)
mp
wrote: The ICAO (Int'l Civil Aviation Organization) specifies English as the international language of aviation, which is why an air traffic controller in China, for example, speaks English.
However, there is an exception in the US regulations. The FAA will grant an exception to FAA licensed repairmen who reside outside the US. They're not required to speak, read or write English. This brings up a conflict because all aircraft documentation, such as operating instructions and maintenance documentation, is in English.
....
full disclosure - my brother flies an Airbus A320 for Vietnam Airlines. a few years ago he almost had an air collision with another
Airbus flown thankfully by an Aussie... the air traffic controller screwed up in approach directions and had they not contacted each other and questioned what they were told to do well.... when they arrived back to file a report the controller was long gone...
I have spent a fair amount of time drinking beers with the ground crew at Ton Son Nhut and depending on position their command
of the language goes accordingly...
Appreciated, it is very nice information. I have learned many things from this blog. I hope the publisher will continue to publish blogs like this … Hand on ….
- Link deleted by kcoop --
EHP, I don't like the varied uses of 'extend and pretend' on this board and I certainly don't equate what is so labeled here as bullshitting.or fraud. Just my personal observation.
'(Brooksley) Born wanted to release a "concept paper" - essentially a set of questions - that explored whether there should be regulation of over-the-counter derivatives. They warned her that if she did so, the market would implode...'
'Credit Crisis Cassandra' - Washington Post
The same SCARE tactics 'they'(merchants of fear) are still using to extend and pretend the derivatives bubble...and other related bubbles...
Is there to be a poll on which agency chief gets to fall on the sword, if any?
I think they are trying pretty hard to set up Sheila - yes no? She would make the perfect usual suspect - she's even left fingerprints at the crime scene.
Anyone have an opinion they are willing to share on the next major dollar move, up or down?
Level. For the down folks, that means someone else is "up". Who?
Euro? They're already squealing.
Yen? Close to the 87 Yen deadman switch.
Yuan? HAHAHAHAHA.
Others? Too small to matter, let them suffer. (Yeah, I'm talking to you, Canada and Korea).
For the "up" folks, just look at the printing press. Enough said. So: level.
It's cute that Wall Street's argument against this stuff is always "you'll cause the greatest financial crisis since the Great Depression if you do that!"
Whew! Good thing we didn't do anything about derivatives and securitization. We sure dodged a bullet there...
interest rates don't exactly drive exchange rates at the best of times
trade flows used to dominate
with trade down, and financial hot money up... it's all financial flows
look at what Brazil is doing, we won't hit the inflation threshold limits to revert the system this time
To provide a unified, consistent framework for securities regulation, Congress should subject securities-related OTC derivatives to the federal securities laws. This result can be achieved simply by clarifying the definition of "security" to expressly include securities-related OTC derivatives, and removing the current express exclusion of swaps from that definition. The SEC then would have authority to regulate securities-related OTC derivatives regardless of how the products are traded, whether on an exchange or OTC, and regardless of how the products are cleared.
interest rates don't exactly drive exchange rates at the best of times
Well, I could have said that my outlook was based on my belief that President Obama was having sex with chipmunks at undisclosed locations, but I didn't.
interest rates don't exactly drive exchange rates at the best of times
Not when the CBs hold the hammer. The 'private' market is WAAAAY bigger than the CB intervention but who wants to be the one taking the bullet so that everyone else can profit? The Japanese were [at one time] the masters of that... like I said a few days ago 'you don't have to shoot all the cattle to make the herd stampede'.
FHLB issued some bonds recently ($3.5bn ? term). Another issue coming up on Dec 8th
a lot of the FHLB branches I have noticed have suspended dividends, frozen share repurchases and advances, cut staff, cut social programs. I wonder what they do all day with nothing moving
'The usury parasite has infected 170 nations, feeding itself through the central bank syndicate, a shareholder consortium of private banks...'
Another crazy 'Patriot' conspiracy theory or a 'useful analysis of the Global meltdown - and what to do about it!
'Out Of The Box Thinking About Our Financial Crisis' - Tikkun Magazine(March 2009) Tikkun Magazine - Out of the Box Thinking about our Financial Crisis
CountryFried? I haven't seen any news on this or anything else related to FHLB recently. When everyone else is having housing heartburn, no news makes me curious and nervous.
i remember in february when my idiot neighbor was buying every ultrashort ETF imaginable. now that same idiot is shorting the dollar, only this time the leverage is 300:1 (WTF!!!). a dollar rally will kill a lot of retail shorts and idiot hedgies.
Weird happening the other night, my guy at BAC now manages traders who are pulling 7 figure bonuses and I think he's turning green with envy or cracking up. Basically asked if I was interested in trading on insider info and when a mutual friend(who is a relationship manager for institutional investors for a big firm) suggested that BAC stock could slide a little over the next Q he went batshit crazy and wanted to fight.
Another friend is at the insurance side of AIG(now called Chartis) and said that the investment side biz model was simply this after Greenberg left: last year +10%. Insurance is well ringfenced, but AIG is basically in runoff mode.
Another friend has put together the insurance companies plan towards replacing desttroyed homes with a green building. It's got plenty of history behind it and is quite convoluted, but here it is in a nutshell:
Look at what the Yen did from July of 2007 through December of 2008. Now imagine the Dollar doing that in reverse. The Dollar's conversion to carry trade bitch will indeed be a down move.
i remember in february when my idiot neighbor was buying every ultrashort ETF imaginable. now that same idiot is shorting the dollar, only this time the leverage is 300:1 (WTF!!!). a dollar rally will kill a lot of retail shorts and idiot hedgies.
Even though I am also bearish on the dollar - I wouldn't want to put myself in a position to be run over by either a short squeeze or an intervention rally. Not at 1:1 let alone 300:1.
How much money does this guy have if he can lose it so easily?
I don't see a scenario of a USD rally except perhaps against sterling and a slight one against the euro. The play may be Long SE Asian currencies as they will slowly then quickly rally as the run out of reserves trying to match the china peg.
I don't see a scenario of a USD rally except perhaps against sterling and a slight one against the euro.
The fact that we don't see the scenario almost makes it all the more chilling.
I'd watch the Christmas selling season and what happens to Asian exports to the US - if they discover decoupling is more painful than they thought then fierce intervention could follow. Can't sustain it forever but long enough to bloody shorts to pulp.
dryfly
Brazil (taxing financial transactions, pretty big incentive eh?)
Philippines, Taiwan, Vietnam (launched a salvo last week)
Europe (raising tariffs and jawboning first, more to follow)
Japan (Postbank to lend overseas proposal)
Australia (raising rates to shut down credit and close the trade deficit that way)
keep in mind China has devalued vs the dollar during all of this, and the countries having twice as much liquidity dumped on them are pushing back. The Asian pump and dump of the 90s hasn't escaped people's memories.
The hot money flows are double-edged. Companies abroad have raised buckets of money with new issues this year. The ongoing flows out of the US aren't enough to sustain positive market performance. It will take less in outflow to trigger a change in liquidity/demand and accelerate those foreign market declines. Now I know a lot of Americans have given up on the dollar, but I don't believe for a second that they'll hold in those markets after the first sign of declines. For good reason too. You remember the accounting fraud in India, the state intervention in corporations for Russia, all the markets where short selling was not only banned, but the entire market closed for days or weeks? That hot money -- in my opinion it is -- will scatter like field mice at the first loud noise
Intervention is already going on, the question is how long SEvasia can keep their currency down. Chinas policies is possibly /probably the cause of the next leg down.
anyone know about the Mexican peso's future?
It is undervalued almost as much as China's Renminbi on a publishing power parity basis, but the economy/government revenues aren't exactly strong either and the situation could wind up with the cost of living in Mexico rising after the government loses oil money and the ability to provide subsidies
Trading binary options involves taking a position about market trends and/or events - and choosing
either "yes" or "no". There are only two payout possibilities; for example, an individual could buy a contract that predicts gold will expire above a strike price of $942.00. If the individual is correct, the payout is 100 percent; if not, it is zero percent.
'A debt based monetary system can never achieve equilibrium because compound interest that multiplies exponentially overwhelms the monetary supply. Escalating interest eventually overwhelms the money supply and causes systemic collapse.'
Nikki Alexander, 'Out Of The Box Thinking About Our Financial Crisis', Tikkun Magazine, March 2009
(The thing is just a few months ago this 'opinion' would be considered absolute 'tin foil' by the prevailing 'public opinion consensus' or 'common knowledge' but now this take is becoming more common and less 'out there'...)
That hot money -- in my opinion it is -- will scatter like field mice at the first loud noise
I hear ya. And if anyone doubts the FCBs can't move the needle in the short run ought to ask the forex traders who took on BOJ in the 90s. Even Soros wouldn't step in front of that bus. Now we have a world full of them - all trying to play the same game.
dryfly
Except the current crop are led by CNBC, ETFs, and retail x00:1 forex leverage run by rentable trading bots. oh and I forgot, all the institutional mutual funds that have performed so great all through history. less creativity -> less stability. I consider this a manic depression, and betting against the last trend is the easiest way to make money
Wasn't the Asian currency crisis triggered in some way by China devaluation of their currency and then the rest of Asia experiencing slowing economic growth as manufacturing shifted to China? The expensive Asian currency countries then tried controlled, competitive currency devaluations to maintain manufacturing market share. Unfortunately, the controlled devaluations got out of control and turned into collapses. Russia then kicked the legs out from under anyone still standing.
ntervention is already going on, the question is how long SEvasia can keep their currency down. Chinas policies is possibly /probably the cause of the next leg down.
That is a great question - if I was short the dollar I'd really really want to know if they can go longer than I can afford to stay short. Rumor was the BOJ used to time intervention to do the maximum damage to traders who were cross purposes to BOJ interests say supporting the yen [come in right before options expire for example]... it was cheaper to do that then try to intervene all the time. All you needed to do is shoot a few and the rest of the herd stays back.
I would look at Mexico's oil revenue (Cantrell?) and remittances home before deciding if the Mexican peso is over or under valued. Don't have any data so I don't have a firm opinion, but my gut says be careful.
The shutdown of the capital electric company is a shot across the bow of PEMEX and obstructionist politicians. Short term it will continue to sag until reform really kicks in. It's happening in fits and starts, but the federal nature of govt is the biggest hinderance.
While Sonora is going gangbusters, Chihuaha is just going Gangsta.
NorkaWest
I'm too young to remember first hand. Conventional story is that Thailand went from a USD peg to a floating currency, couldn't maintain the level, and had a debt problem. Other countries that were responsible during the boom ended up being faced with irrational waves of investors pulling out of Asia at any price. Which is why so many countries built up irrationally huge forex reserves this time. I don't know how much China had to do with triggering it then. Sounded like it was just the end of asset bubble returns being able to maintain positive carry after debt servicing. Just like the tech or housing bubbles. I think China was able to maintain its currency throughout, like Malaysia, due to capital controls. There had been worries that other Asian countries would be undercutting them before the bust, and I could be wrong, but I think it was a debt bubble that had run its course after 3-4 years
Cantarell is the aging super giant field that has carried Mexican production for decades but no longer, it is in irreversible decline and the rate of decline has been another "beat"...
NorkaWest
I'm not looking to speculate, and the PPP is a decently objective comparison. I just felt like asking the question, because Mexico may have some major internal adjustments in the next 5 years
The increasing sentiment (from sample blog comment) seems to be Wall St. won and 'controls' USD printing press and the public can't do anything about it and will have limited access to the dole, so in the Wall St. Vs. Main St. main event, the undisputed winner is Wall St.
Cantarell is one of the largest oil fields on the planet, relevant excerpt from Wiki on the field:
By January 2009, oil production at Cantarell had fallen to 772,000 barrels per day (123,000 m3/d), a drop in production of 38% for the year, resulting in a drop in total Mexican oil production of 9.2%, the fifth year in a row of declining Mexican production.[1]
in the Wall St. Vs. Main St. main event, the undisputed winner is Wall St.
Did anyone ever think main street would win? Money and power control, period, always. Until bullets are involved and I don't see that happening in my life time.
A book recommendation "On Violence" by Hannah Arendt.She discusses the differences between force and violence,power and authority with insight and clarity.
One may note the level of oil imports from Mexico peaked in 2006 at around 55 million barrels per month currently running 35-40 million barrels per month range U.S. Imports from Mexico of Crude Oil and Petroleum Products(Thousand Barrels)
edit: in the latest month of data, only Canada and Venezuela sent more oil to the USA than Mexico...
NorkaWest,
'Unfortunately the controlled devaluations got out of control and turned into collapses.'
Can't happen to the Dollar though, right? What's your bet on that collapse scenario for the Dollar? People with Dollars want to know.
I don't know how much China had to do with triggering it then.
They were actually a stabilizing force back then - they DIDN'T devalue after almost all the Asian Tigers did - stopped the bugger thy neighbor race to the bottom.
Thailand was the first domino but all of them had similar problems - liabilities owed in dollars but not enough dollars coming in via exports because China had started to take a bigger and bigger cut - the dollar based debts blew up all over Asia. And it wasn't the gov'ts that were holding the debts - private companies mostly. Still had to be paid or closed... gov't got involved because closing meant social turmoil.
That in part explained why their central banks hoard dollars. To back up their private sector liabilities... so some of it made sense at one time. We just got way past that - to a 'dollar reserves' arms race.
I recall that China devalued its currency a couple of years before the crisis. This put the squeeze on all the other Asian low cost manufacturers so their government tried to restore their pre-China devaluation competitive position. Most of the manufacturers were highly leveraged to build capacity on the assumption of future growth which China's devaluation diverted. The loans were from local banks who borrowed short in hard currencies and lent long in local currencies. When the hard currency investors fled, the local banks were toast. Their central banks did not have enough hard currency to save their banking systems and currency pegs.
Turbo Timmy was at the IMF at the time and Summers was at the Treasury. The Asians remember how "helpful" those two were at the time.
Remitance checks to Mexico are down. Many Mexicans went home due to no jobs in the US. The stepped up employer sanctions were part of the reason, no construction jobs was a big reason.
U.S. destroyed Mexican economy with media blitz of 'scare stories' about violence, then the swine flu 'initiated' in Mexico City; NAFTA border factories in Mexico shut down for 'Comparative Advantage' of cheaper labor elsewhere such as China, plus oil in Mexico being 'stolen' and ending up in the U.S...all has hit the Mexican economy hard...
Quite a few people that I know used to go for long weekends to Mexico, mostly to Rocky Point.
Now that you must have a passport, fewer tourist go. Most are too lazy to get a passport.
I think of every bubble with references of dotcom companies.
"That's just another pets.com", "They'll make money the day after webvan is profitable", "I'll check in on that from broadcast.com", "Remember when Yahoo was going to buy the entire USA?"
I think the pets.com sock puppet softens the problem quite effectively
Can't happen to the Dollar though, right? What's your bet on that collapse scenario for the Dollar? People with Dollars want to know.
When things get Fugly, the prudent people who moved some wealth out of the US dollar will be hounded as traitors or tax cheats. A meme will be started by our elite that "those" people caused the dollar's collapse, not a generation's worth of mismanagement in Washington. If you move assets offshore, be prepared to move your ass with it or keep a low profile.
The reversed transmission of the pressure for easing monetary condition should be made full use of. With the premise of reducing or not increasing capacity, structural adjustment and technological progress should be sped up along
Swine flu hit in Mexico in basically the busiest travel time of the year with thousands of people flying out of Mexico City every day.
Detroit Flu hit them harder though - I read that in 2006 [or so] Delphi was the third largest employer in Mexico... behind the federal gov't & Pemex... not anymore.
Yeah interesting...wonder how many 'offshore accounts' investors decided not to volunteer their info...
I suspect that the odds of getting caught calculation was made based on which bank they used. UBS, Credit Swiss, and many private Swiss bank clients probably 'fessed up. If their bank was sound and located in a country that could tell the US to shove it, they probably kept their heads down and mouths shut.
Az passed, by ballot, medical pot twice. The legislators decided the voters were confused and missinformed and passed laws to retain criminal prosecution.
maybe next time they will follow the voters choice?
States won't legalize it. They will just expand the medical dope industry, doctors will discover that it cures the symptoms of Depression, and everyone will be depressed after looking at their financial situation.
Escalating interest eventually overwhelms the money supply
Depends on the interest rate versus true growth rate.
Depending on investors, it's possible to drop interest rate low enough to reach equilibrium.
Which is what happened in Japan for twenty years and now here (so far)
I got family who match that description - from all accounts they are pretty well stocked now... but I'm sure they'll take the charity 'handouts' if its up to their standards.
broward
perhaps you misinterpreted what I meant by creativity
In the context of choosing from the menu of possible trading financial instruments for profit.
Fewer choices -> any change of choice leads to a bigger swing compared to situation with more choices
instead of choices diffusing throughout system, like pee in a pool, you get a limited set of choices resonating. Like an unbalanced washing machine.
I don't live to fit within your memes, I am meme-master
Was just looking at Japan's govt debt...$10 trillion...interest is a fifth of Japan's budget...so is the yen ultimately at risk? If Japan can't keep paying it's debt? Same questions. Different country.
If anything, I can make the counter argument - the creation of ever-greater derivatives and layers of interconnections & dependencies created an increasingly fragile structure which had to fail, and did.
How will they self-defeat next? In a comparable IT system, people would start ignoring it, moving around it and creating a simpler system more congruent with reality and their needs. Eventually, someone somewhere would see the old system as a target of opportunity to plunder and dismember its resources.
Was just looking at Japan's govt debt...$10 trillion...interest is a fifth of Japan's budget...so is the yen ultimately at risk? If Japan can't keep paying it's debt? Same questions. Different country.
That's what Einhorn thinks of Japan. Default risk will rise to US levels.
broward
Those layers of derivatives were not diversified. The exposures were too common. All the new products just reduced the safety margins in exchange for obfuscating risk.
Think of it as an ecosystem. More relationships between plants/animals/climate = more robust system.
What happened was a factory farm of cattle, that ran out of feed. I don't care if each one had an individual name, the fundamental relationships overlapped too much.
see Gresham's law for how that can spontaneously develop
This reminds me of the old "down and outs" offered by bucket shops a century ago. The investor, er, gambler would put up enough money for a couple of point move in a stock. If that move against him occurred, he would be "stopped out" and lose all his money. According to an account that I think I read but can't remember where, some bucket shops created that stock move in its back room by inserting fictitious adverse trades, thus making a tidy but fraudulent profit .
Volatility in the stock or, in the is case a foreign currency, will "stop out" the 300:1 investor ; probably. The risk occurs when too big a move occurs too quickly and the investor leaves too big a debit or when the house decides that the investor is wrong and buckets the trade by not actually putting it on, thus taking the "other side" of the trade. If the trader, like a blind squirrel, is correct and the trade big enough and the house wrong enough, the debit bankrupts the house.
Off topic. I just wanted to mention that I have posted two new podcasts in the Optimistic Bear "Practical Economics" series. One is an interview with Bill Conerly (who believes the economy is on the mend) and the other is with Matt Stiles (who thinks that the inflation/deflation debate is irrelevant).
I looked for a Wall St. Journal article about commercial airlines shifting repair/maintenance work to locations outside of the US. Couldn't find it, but found this article instead. This article indicates the switch started in 2002, so I guess it was in 2002/2003, when I read that article. I started taking the train more frequently after reading it. Whatever people think of Amtrak, US passenger coaches are built to high crash standards (higher than most other nations, which makes ordering new passenger rolling stock expensive, as factories have to retool). Agree with you completely regarding hazards of outsourcing in this instance. Margin of safety--who gets to decide how wide the margin will be or even if there is one.
If one looks at a global oil reserves map and the countries with the largest reserves left, maybe this will be the near future world war areas. Iraq, Iran, Libya, Venezuela, Nigeria, Russia, Saudi Arabia. Start in Iraq and go from there. Geo-strategic concentration of biggest reserves of oil. If it would not be a world war for oil, what would it be a world war for?
Left out Kazakhstan...U.S. has 2% of the oil and burns 20 million barrels a day and the Middle East has 60% of remaining reserves.
But food and water are resources too. Then there's natural gas.
Iran has 11.2 % of the oil(energy bulletin.net) My guess is Iran next.
Hoocoodanode also applies to aircraft maintenance.
I happened to be having this same conversation yesterday with a guy I work with. When I hired him 6 months ago, he was the shop foreman for an aircraft part reconditioning company located in Florida. Among a slew of stories about "lax" standards at his own repair facility, (standards imposed by the owner to lower costs) was a story that when they tested parts leaving their facility they found only an 80% pass rate, yet the owner said to ship all the parts anyhow, because, "the end users would do their own tests and catch the defects."
Just what this world needed: maintenance shop owners with the morals of GS employees.
mp
just spent my some time at our new embassy in Phnom Penh. what a joke on American taxpayers!
Hitler's bunker didn't have that kind of defense spending! oh, yes... all the guards sit around in Herman
Miller Airelon (sp?) chairs, something that I as a cubicle jockey once pined for in NYC.
Just wanted to say I also like the summery, it helps to tie every thing together for me. Kind of gets my mind prepared for what is to come.
Mr Slippery wrote:
If we all worked directly for Goldman...
kidbuck
We don't now?
Well, I'm a sub-contractor to a sub branch within a government branch.
Does that make me a sub,sub,sub,sub,sub, etc blood sucking leach?
Or just a very tiny-winsy squid sticking my blood funnel into places?
kidbuck - Was a story that when they tested parts leaving their facility they found only an 80% pass rate, yet the owner said to ship all the parts anyhow, because, "the end users would do their own tests and catch the defects."
I don't think they are the only one's considering the failure rate for a lot of things lately.
I remember when things labelled water proof where actually you know water proof, and when something worked for more than a month after you bought it.
But when it comes to air plane parts, it's not like you can just pull over to the side of the road when it breaks.
Air France will introduce a fee for passengers checking in a second bag. The fee will be $50 for all flights departing from the USA and 50 euros for all flights departing from Europe.
I work with an Iranian researcher. He says, if Iran is attacked and its nuclear facilities are bombed, a few people would be killed, and then the rebuilding would begin again. Also,we would be doing a big favor for the Iranian government. It is moderately unpopular and struggling in many ways. It would be strengthened considerably as the Iranian people close ranks behind the government as it verbally attacks the perpetrators of the bombing raids.
My god why would anyone trust any asshole that donated money to the campaigns of two opposing candidates. "Any asshole" includes corporations too big and too small.
.......What a glorious morning.........this time last year I was rushing trying to find something for which to use green tomatoes....this October?.........nice mild breeze.........no worry of freeze or frost........everything in the garden is happy.........enough of me........Good Morning.....
Good evening. Just noticing in a Limbaugh article reference to the "bipartisan" support for the heckuva job Washington is doing by NFL owners.
But since the info is just a Google away, I suggest boycotts of any business that donated to both Democrats and Republicans in the same election. That share owners tolerate any corporate donations at all makes capitalism a bad joke.
I think this is a safety net. I wonder if Treasury and FDIC are prepared to play good-regulator/bad-regulator? If there really is no more money to borrow for the Treasury (any vote on debt limit?) and the FDIC couldn't borrow; this would be needed to offset the special assessments that the FDIC would have to apply against the smaller banks to ensure the DIF is funded.
No one reading this should be surprised when the FDIC rule for mandatory prepayment of assessments goes down in flames. Its clearly beyond FDIC authority. FDI Act limits deposits to money or equivalent currently held. There is no provision that gives FDIC authority to expand on the definition of a deposit to include money "projected, implied, or expected" to be held. It is money currently held! Therefore there is no way in hell legally they can collect an assessment ahead of when the deposit is held.
I don't know why I'm the only one who friggin understands this; however I've submitted public comment pointing this out to the FDIC. I am fearful they will still go forward with the idea, but just can't believe their legal counsel will allow it.
....a law firm that used to represent a company I owned used to donate to ALL county commissioners campaigns, even the ones we were at odds with........it used to frost my backside bigtime........my attorney simply said "it was necessary" as I spit, ranted and screamed..........I'm glad things have changed in the subsequent 30-years......
Four score ago our fathers brought forth on this continent, a new notion, conceived in margin calls, and dedicated to the proposition that all men are created equal, except for the brobdingnagians on Wall*Street .
Now we are engaged in a great financial war, testing whether that notion, or any nation so conceited and so indebted, can long endure. We are met on a great blog-spot of that war. We have come to dedicate a portion of that blog, as a resting place for those who here gave their reasoned opinion that that nation might be lying to itself, whilst drinking coffee and eating salty snacks. It is altogether fitting and proper that we should do this.
But, in a larger sense, we can not abdicate -- we can not prosecute -- we can not hollow out -- this situation. The brave men & women, living with doubts, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what we did here. It is for us the remnant, rather, to be dedicated here to the unfinished work which we who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these dishonored debts we take increased devotion to that cause for which we gave the last full measure of devotion -- that we here highly resolve that these debts shall not have died in vain -- that this nation, under new ownership, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth.
Given my work, I have to donate to several members of the House Finanical Services Committee and the Senate Banking Committee. There are certain unnamed members, though, that I refuse to write a check to.
I'm glad things have changed in the subsequent 30-years......
uh, huh.
And yet this from my sister the nurse:
"The flu thing is bullshit." she goes on about the number of flu shots she gives, almost exclusive nasal injection. She says some fat middle aged guy comes in and and wants to know does he have to bend over.
Top Ten Snappy Comebacks for the idiots, morons , and assholes getting a nasal injected H1N1
You can if you want to.
Sure, if you think that will make this any easier for me.
Not if you know what's good for you.
The last guy asked for that, what is with you guys?
Well, it's for your nose, and you wouldn't want that after we go there, would you?
Hold on a sec, I need to get my associate, she doesn't believe this really happens.
No, it's not listed as an option in the PDR.
If you don't mind me strapping on a saddle, but others are waiting their turn.
You realize of course, you'll be seen on YouTube, so I'll have to get your release on this form.
By law the DIF must be brought up to a whopping 1.15% of insured deposits. It doesn't matter what they call it, and the FDIC has broad authority to make the rules about which banks pay it in what proportion.
Why do you think it matters so much that they call it prepayment at the banks' request?
Why do you think it matters so much that they call it prepayment at the banks' request?
For balance sheet and capital ratio purposes, the banks would prefer a prepayment as opposed to a special assessment - more playing with the balance sheet!.
I know, I just don't understand YSLP's obsession. I explained to him the real issue is whether the banks should pay for their insurance or the FDIC should just hit up the GS/Treasury.
ROFL, volker........Terry, went thru Nebraska a couple times.........while goin' and comin' from Montana.........I remember cold, windy, wide open, and some great country gravy from some unknown small cafe somewhere near the NW corner......amazing the stuff we remember.....
"By law the DIF must be brought up to a whopping 1.15% of insured deposits"
............."brought up" as in "credit-line", or actual cash in an undescribed location?
Also, I work with companies in emerging payments, like mobile payments, and the legislators are hearing concerns from the regulators and law enforcement about money laundering risks, security risks and failure risks. I am out there just trying to make sure the facts are straight and the regulations are reasonable.
I had a friend who was told to contribute to the Republican Party and fired when he refused.
He wound up working for AIG. Everyone has to make a compromise; what disgusts me is the hypocrisy of an extremist Randian like Greenspan who spends the better part of his career intervening in financial markets according to his whim while killing the attempt to regulate the TBTF derivative trillions/quadrillions.
The FDIC doesn't have the authority to redefine the definition of a "deposit", which is authority held by Congress.
The definition of a deposit is limited to "money or equivalent held by a bank".
There is no provision that allows the FDIC to expand this definition! The prepayments are clearly an effort to expand the definition of deposit to include "future money or equivalent held".
I'm just pissed that the FDIC has bothered to waste money in such a way. Its clearly beyond statute.
The prepayment does nothing to help them wrt the 1.15% ratio. It matters not if the collect the money now in violation of statute or in the future. They have until 2015 to get the reserve ratio to that amount (pending further extensions by Congress, which extended the time from 5 to 8 years with S.896).
Its clear Congress wants the FDIC to tap the loan authority. There's no other way to read the debate inherent to S.896.
It's my perogative as a citizen under this government to be obsessed about this. Clearly its not the only blatantly BS being perpetrated. However, it clearly undermines my civil rights that the FDIC is going to blatantly be "making laws". I'm curious what they say about this in the final rules.
It's obvious they have to tap the loan authority, its obvious that's the only way; and its obvious this is what Congress wants. So why bother pretending that they will be able to collect prepayments? Small banks should sue their assess off in Court to stop this.
I think we agree in principle that the issue is if/when FDIC gets the loan.
The prepayments do nothing to bring them within the 1.15% reserve ratio. The prepayments are an effort to provide FDIC liquidity for going forward operations. Clearly the Treasury loan is in effect going to be a bailout, when all is said and done. Even if everyone will say, "the loan is going to be repaid by industry". In fact, one may argue its Sheila being prudent with her loan authority and forcing the discipline to remain industry funded. I'm not even sure what the FDIC is going to do as a next step; as once they accept prepayment they will be forced to take a loan or raise special assessments... does anyone really believe the $40B will last into 2011?
I disagree with your point that this is about the 1.15% reserve ratio; prepaying or not they account for it in the DIF the same way.
Juvenal Delinquent (profile) wrote on Wed, 10/21/2009 - 6:06am
Incredibly apropos post. Imagine a golf clap. Swelling to a roar when the crowd recognizes a hole in one just happened.
++++
An apologist said:
"I am out there just trying to make sure the facts are straight and the regulations are reasonable."
Cue the Upton Sinclair quote about a man and his job depending....followed by any Will Rogers quote about the absurdity of our legislative system and it's lobbyists.
Prepayment hurts the banks that are going to fail in the next 3 years, unless they fail before paying (surprise, surprise) and helps the banks that will grow share of deposits (more likely to be small banks as the big ones are facing break-up either as TBTF or in antitrust, no?).
The FDIC has to cover insured deposits so if some more banks fail they don't have until 2015 to raise cash, right?
Eric,
Lets just say this. If a citizen were legally able to challenge, and hold standing in court over this FDIC action; they could presumably be able to challenge and hold standing in court over various other agency (see Treasury) actions. I'm specifically thinking about the fact that there is still $70+B taxpayer money illegal infused into GM and C. Now perhaps politically the time is not right for such an action as the Republicans would have enough cover to support the bailout given Dem majority in Congress. .
But perhaps in 2010 when a new Congress, a more Republican Congress were in power; a party that has railed on about unconstitutional bailouts. Perhaps it would be interesting to see if they vote on continuing the bailouts if given a chance. I'd be very interested in exposing Republican hypocrisy re: automakers.
By law the DIF must be brought up to a whopping 1.15% of insured deposits. It doesn't matter what they call it, and the FDIC has broad authority to make the rules about which banks pay it in what proportion
Prepayment has nothing to do with the 1.15% reserve ratio. Additionally the FDIC doesn't have broad authority. I know that you believe the FDIC has authority to go forward with prepayment; but do you not agree that the plan inherently redefines what a "deposit" is? .
Prepayment is all about currently liquidity. I didn't bark up the tree but I'm not sure FDIC has authority to make an assessment that ensures they are liquid.
Sorry going back to sleep... was feeding baby and wanted to submit further comment to the FDIC raising the specific point that the rulemaking changes the definition of a deposit. I'm a mark for going off on this in the comments as well as getting sucked into a discussion (or sucking him into discussion) with yogi.
Did these multiple lending programs keep lenders on the sidelines waiting to see which asset classes the Fed would support and which it would not? Did this delay the healing of the financial markets?
I commend YLSP for the effort in trying to find an entry into using the judicial system as a weapon against the fraud and corruption so apparent but so pernicious that it has frozen the co-opted system we all live within. Windmills--charging--making an effort. Good day to all.
I simply think the FDIC is the next institution to go boom; and it requires Congressional attention like now. I can see Congress declining however, as they clearly desire Sheila to tap the Treasury loan. When that happens there will be plenty of people saying how "this isn't a bailout" and "banks will repay the loan through their assessments"... but I have a hard time reconciling them dealing with the toxicity in our current situation.
Given the choice of bailing out FDIC, FHA, Fannie, Freddie... its clear which ones need to stop activity and which one needs to continue.
I don't care what accounting crap the FDIC pulls. A dollar is a dollar, whether they use it fund operations or pay an angry pitchfork wielder outside a closed bank branch.
Either other banks fund deposit insurance or it gets dumped on the taxpayer. Pre-payment or special assessment doesn't make a substantive difference unless you can illustrate the difference to classes of banks.
I just had an image of being an old man, decades from now, watching a commercial by Wells Fargo where they tout "we've survived through the years, in good economies and bad".
I've found the way. It lies in Supreme Court rulings on citizens right to vote. When executive agencies act outside of the Constitutional jurisdiction, it is a debasement of our right to vote for Congressional representation. While Congress does this action it is the friction between my individual right to vote for someone who chooses our laws; and your individual right to vote. I believe I have a clear path to challenge, now... I'm not sure I've seen any lawyers per se use this argument... as most citizens aren't bothered or have the money to challenge such bullshit.
It was the August TARP report that got me pissed off the most. In fact, I heard some Congressional testimony that Paulsen was talking with Obama prior to the Presidency. Not only do his public statements make it clear that Bush himself authorized the bailout (again, this would be in violation of TARP law... the Treasury Secretary can only make the deteremintaion) but I question why Treasury reversed their position from "we can't use funds on automakers" to "oh yeah, 'financial industry' is whatever we want').
When I started looking into it, it was clear that Congress was over-rode by the President. To say that use of funds is legal means that there is no distinction between "financial industry" and "automobile industry". In fact, there were 4 committee meetings between the House and Senate on how to bailout the automakers. During these meetings it was clear that Congress hadn't provided authority to bailout the automakers themselves, only their financial arms were covered by TARP... etc. etc...
There's so much evidence of legal wrongdoing... and its all part of the official record. Even a couple months ago when Geithner was pressed on the definition of a 'financial institute'... in his testimony to the COP panel... he stated something like; "we haven't identified any other companies as financial institutions'.
Its like there are no lawyers at any of these places, or they were all bound, gagged or shot.
I liken this to Heisenberg's Uncertainty Principle where observation of a subatomic particle changes the ability to measure it accurately.
This is quite poorly worded: It's not clear that he understands what Heisenberg's uncertainty principle states.
You can, in fact, observe and measure a subatomic particle to arbitrary accuracy. However, you must choose the measurements carefully.
yogi,
I've liked Barofsky from his testimony. I'm pretty sure it must be CNBC that is useless? Did they press him on the SIGTARP forthcoming audit? It's going to be on AIG counterparties and repayment. I have a feeling it will be of real interest to everyone around here... (although I think we all know the conclusions).
SIGTARP and COP panel do great work. Congress has failed to follow up or do anything based on their great work.
Barofsky toed the line on the legitimacy of GS bonuses. I'm looking for someone to follow Chris Whalen on the AIG sham transactions. At the end Barofsky casually dropped the statement that risk is now even greater, right after saying how much better things were because of TARP.
He suffers from Obama's condition of trying to say what the questioner wants to hear. We need a tougher guy in his shoes.
The way my Dad explained it, and the way I've understood it for years is that the more you know about it's energy, the less you know about a particle's position, and vice versa.
That's almost right: Change "energy" to "momentum" and the statement is correct. (Or you can choose to play off energy against time: You can measure the lifetime of something short, but you sacrifice knowledge of its energy.)
But the bigger problem with Mish's article: The starting point of his analogy is not quite right. You can make one measurement as precisely as you want. It's the second measurement that you sacrifice accuracy.
I don't know why people invoke principles from areas where they have no expertise to explain an area where they have expertise. It usually weakens the argument at hand.
[JD: The more I read of that Huygen's article, the more out-to-lunch the author appeared. If that article is representative, then the author qualifies as a crank.]
I don't know why people invoke principles from areas where they have no expertise to explain an area where they have expertise. It usually weakens the argument at hand.
Well, if you can't dazzle them with brilliance..........
got pigged repost
Volcker's Voice, Often Heeded, Fails to Sell a Bank Strategy - NY Times
Really ?
In the words of a former Pres. " fool me once, shame on — shame on you. Fool me — you can't get fooled again."
I like the hamburger index at McDonalds better for judging how the economy is doing.
small bank resolution is a dicey situation. on the one hand, we don't want to reward ineptitude and malfeasance by keeping them solvent, but on the other hand, we don't want these small banks to be served on a silver platter to the larger banks, especially on the FDIC/taxpayer's tab.
Just as a note CR, I'm not seeing recent posts after the initial five. I see the words Recent Posts, but nothing underneath it.
CR, I did in fact notice the change on the CR channel WRT page layout.
It would be funny if TSTF was developed in response to criticism of TBTF, as if to say, "see, the little bankers get some bailout, too."
I wonder if it is the power of mostly rural 'small state' senators... I mean So Dak has as many senators as Cali or NY... if the big boyz want the gravy to keep flowing they might have to share a little of it with the rubes. Corruption for all!!
I'm thinking the small bank thing has to do with the fact that a lot of them have significant accounts and services with big banks. They were also a consumer of some of the financial products, placing them as assets.
Wow, just looking at options on WFC for Jan-11. Seems like a lot of interest in it failing...
WFC: Options for WELLS FARGO & CO NEW - Yahoo! Finance
more political tone-deafness from Goldman Sachs
Goldman Sachs’s Griffiths Says Inequality Helps All (Update1) - Bloomberg.com
A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy.
“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion hosted by St. Paul’s Cathedral in London. The panel’s discussion topic was, “What is the price of morality in the marketplace?”
Sheila ran out of DIF, so this is just another way to get around that pesky dilemma, surely?
For anyone who hasn't read about the Italian toxic waste dumping, FT.com / Europe - Italian police close in on ‘toxic’ shipwreck
is a good story on the recent edition of it
CR really needs a summary post in the evening. Just too much stuff on the blog during the day.
For those interested in Frontline: The Warning it's online 24/7 everywhere:
FRONTLINE: the warning: watch the full program online | PBS
@Broward
Although repair is sometimes a part of maintenance, maintenance and repair are two completely different concepts.
As I said, an aircraft must be maintained in as new condition.
There are no exceptions.
badger wrote:
I'm sure that plays a role BUT a lot of those 'relationships' are the assets that get shifted from failed bank 'A' to acquiring bank 'B' at a discount - often w/ FDIC 'cost sharing'. The actual relationship doesn't necessarily go away - just some other firm now has it.
I'm guessing the rubes are pissed the local banks get shuttered and gobbled up [along w/ jobs] by the larger acquiring banks. My guess is rural congress critters hear about it every time they head home on the rubber chicken circuit.
The ICBA lobbyists and small town main street businesses have been beating the drum with senators and house members for some time that the TBTF banks were getting help, but not the little banks, and unless they wanted to see the main street businesses die (the TBTF banks and regionals would not lend to them), small community banks and their communities would wither and die. Looks like BHO and Treasury finally got the message.
joke of the day: http://www.vancouversun.com/business/Recession+rebound+propel+housing+sales+prices+highs+forecast/2124533/story.html
And just think if those prices are w/ CAD:USD @ 1:1.50... yikes!!
*I'm guessing the rubes are pissed the local banks get shuttered and gobbled up [along w/ jobs] by the larger acquiring banks. *
I'm guessing a desperate attempt to save the FDIC and further that somehow GS would lose money if any of these particular small banks failed.
Or, as I brought up before, we haven't heard screams from the shareholders in the failed banks,...maybe these shareholders are "connected".
EHP, that's quite interesting. It mentions claims of toxic dumping off the coast of Somalia. A lot of Somali pirates have argued that they are actually patrolling Somali waters and attempting to prevent foreign ships from dumping toxic waste in Somali waters. Perhaps a little bit of truth to it?
too small to fail?
I think CR is looking at this in the wrong way. I'll use the model of what the S&L's did when the government
de-regulated passbook savings rates, in effect, stripping away the 50 basis points that S&Ls could pay
their depositors. S&Ls were toast and should have gone the way of the dinosaur but they formed an
association and lobbied both aisles of Congress aggressively and were able to get a number of changes
enacted one of which was the type of investments they could carry in their portfolios...
I remember talking to a colleague at Solly in '87 and he had just returned from a long trip visiting all the S&Ls
out West along with selling them some of our inventory I asked him what their portfolios looked like and
he said, "dog***t".
So, my guess here is that the TSTF went back to the old playbook of the early 80s and have lobbied
various institutions in a similar fashion.
"maybe these shareholders are "connected". "
Community banks are well connected and have always had a strong lobbying presence on the Hill - There have to be thousands of small towns in the country that are only served by the community banks and the TBTF banks have no presence (or desire to establish a presence) in these communities.
quite frankly, if we are going to supply endless capital to insolvent TBTF banks, I am all for supplying endless capital to TSTF banks.
the whole resolution of 'failed' banks by the FDIC just creates TBTF institutions all over again.
so for me, with no snark intended, I'm all for the endless bailouts - come one come all. Civil rights for banks.
Terry
"There have to be thousands of small towns in the country that are only served by the community banks and the TBTF banks have no presence (or desire to establish a presence) in these communities."
AGREED.
Those small town banks have collectively more clout than TBTF banks if used correctly... politically it's impossible to say NO to them if you bail out the Big Boys!
The small businesses that rely on credit are sweating bullets. The community banks are suffering losses and and cutting back loans. CIT, which was the largest SBA lender, is toast. The credit card issuers are hiking fees and rates and cutting limits. They have no access to financing.
Right on. And Civil Rights for Home Owners that are still current.
For now.
dryfly,
It's only a $13,238.96 payment on a $2 million starter home (30yr amortization, 5yrs fixed at super low 6.95%) . Put in some granite counter tops and you'll make out like a bandit. Now is a great time to give up that boring career as a surgeon, lawyer, or engineer... all the money is in real estate
anecdote: noticed a newly built home, completed around summer time. Hired a new realtor that was 'staging' the house with furniture the other night. All of the new homes completed this year that I have kept note of haven't sold. Basically everything was on hold at the beginning of the year, then everything from individual houses to full subdivisions started back up in the spring, and then it seems like everyone believes prices are going up so they're happy to wait until they get 'their' price. Even though there weren't the distressed sales, the prices in Vancouver had fallen at a rate faster than any of the American C-S listed cities, but that was only from March 08 until end of year 08. Hoping the standard Olympic pattern holds true and the prices tank soon afterwards
Reward failure. Now there's a sustainable policy.
Chicago Dude wrote:
Tonnes of truth to it. Europe is a very bad global citizen when it comes to the oceans, Africa, or both. Search for Trafigura for another example
Terry wrote:
There was a time that having 6-9 months of operating cash in the bank was normal.
A lot of the small banks only make pass thru money on credit cards though. A lot of them have Elan and other places actually handle the management and the profits. Residential real estate was very low margin and in many cases a loss leader. A lot of the community banks couldn't compete on floor plans or a lot of the small business segment's business. Where a lot of them had been making money and becoming over-exposed was CRE.
Listen to a top economist in the Obama administration describe Paul A. Volcker, the former Federal Reserve chairman who endorsed Mr. Obama early in his election campaign and who stood by his side during the financial crisis.
“The guy’s a giant, he’s a genius, he is a great human being,” said Austan D. Goolsbee, counselor to Mr. Obama since their Chicago days. “Whenever he has advice, the administration is very interested.”
Well, not lately. The aging Mr. Volcker (he is 82) has some advice, deeply felt. He has been offering it in speeches and Congressional testimony, and repeating it to those around the president, most of them young enough to be his children.
He wants the nation’s banks to be prohibited from owning and trading risky securities, the very practice that got the biggest ones into deep trouble in 2008. And the administration is saying no, it will not separate commercial banking from investment operations.
Volcker’s Voice Fails to Sell a Bank Strategy (NY Times)
JP - Not the case in ag lending. Farmers always have borrowed money from the local bank to put in the crop. If the ag interests can't get loans, the main street businesses in town don't sell goods.
The Obama Administration's new motto: Leave No Banker Behind
unless you pissed them off, or are expendable...
TJ & the Bear:
Leave No Banker Behind
+1
.....
in other news: Weeks after Rio de Janeiro was selected to host the Olympics, drug bandits shot down a police helicopter.
perhaps the IOC should consider shooting helicopters as an Olympic sport, seems so modern doesn't it compared to that
other one where you go by horseback and fire rifles or something like that...
TJ and The Bear wrote:
LOL!!! Ya - maybe we can make them take standardized tests too... oh wait they already did that and they ALL passed.
Terry wrote:
How will the lack of ag credit from farm bank impact my ability to eat 12 months after a missed planting season?
JP wrote:
Modern, business-school CFOs convinced businesses this was the corporate equivalent of "dead equity".
Remember, these are the "smart" folks. At the company I used to work for, the CFO got much of the short-term cash into auction-rate securities to goose the interest rate. When the freeze happened, they found themselves having much of their working capital locked into long-term bonds, and had to sue the bank to try to unlock -- they still don't have cash yet, though a deal has been struck for them getting in (in return for dropping the suit) sometime in 2010.
That one mistake could have sunk the company, has we not had cash flowing. All for a measly percentage on a small pool of cash. Stupid. Cui bono?
dryfly wrote:
+1
Wall Street Wobegon -- where every bank is above average
'Credit Crisis Cassandra'
' Brooksley Born foresaw a financial cataclysm...she was the head of a tiny government agancy(CFTC) who wanted to regulate derivatives.'
(She was told she had no jurisdiction. Clinton had her replaced.)
WaPo profile of Brooksley Born
DCRogers wrote:
Also +1!
that is why my firm has squirreled away a years worth of fixed expenses in a treasury only money market fund. it won't be fun, but we won't be be dependent on the vagaries of the banks.
NW
Isn't a lot of the ag lending pass through to various state and federal programs? I'm sure it make money, but I can't imagine it is enough to make a bank.
Basel Too wrote:
Perhaps the best way to achieve the inequality we all need to prosper is to limit all banking, commercial and investment, to THE ONE BANK, the bank of Goldman Sachs. If we all worked directly for Goldman, it would be much more efficient at spreading the inequality.
Mr Slippery wrote:
fixed it for ya.
DC Rogers
when I was at the Times in '85 and they were at their high water mark (think their stock hit 37 that year)
we had on average 135 million in short cash to do repos with (all A1 P1 commercial paper)...
our revolver loan at Morgan was 250 mil ...
EDIT
how practices have changed! only 20% of our cash was locked for 30 days, most was overnight or
3 to 5 days...
"Isn't a lot of the ag lending pass through to various state and federal programs?"
Don't have a clue on the numbers of loans made by the farm credit banks vs. the local bank for crop loans
EDIT: found an answer - the charts show that commercial banks make a lion's share of the production loans: http://www.kc.frb.org/banking/bankingpublications/LendingCompetition08-09.pdf
“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” [said Brian Griffiths of Goldman Sachs]
The inequality has been achieved. The greater prosperity and opportunity for all, not so much.
" Brooksley Born foresaw a financial cataclysm."
she wasn't a chump but chumps (summers greenspan) called the shot
I'd like to add one last thing about my gripe on the previous thread concerning offshore repair stations.
The ICAO (Int'l Civil Aviation Organization) specifies English as the international language of aviation, which is why an air traffic controller in China, for example, speaks English.
However, there is an exception in the US regulations. The FAA will grant an exception to FAA licensed repairmen who reside outside the US. They're not required to speak, read or write English. This brings up a conflict because all aircraft documentation, such as operating instructions and maintenance documentation, is in English.
Interesting, huh?
Hoocoodanode also applies to aircraft maintenance.
Small banks have allot of the CRE on their books. This needs to be extended and pretended just like RRE. So it is time to prop up the local banks with bad loans on the books.
And I agree that Sheila is broke, so the insolvent small banks have to become "solvent" in some other way.
The inequality has been achieved. The greater prosperity and opportunity for all, not so much. -- DCRogers
the problem is that we don't have enough inequality, so the prosperity isn't trickling down fast enough...
Speaking of disasters, any recent news on the condition of the Federal Home Loan Banks. I haven't noticed any news recently, but there were articles and blogs about CountryFried and Atlanta before the BofA takeover.
has anyone seen any recent news?
I'm not sure if extend and pretend is my favourite descriptor. It's definitely accurate, but it's 5 syllables. Older variations are
Evergreening
Round tripping
Bullsh***ng
Fraud
CR4RE LLC
site meter is at about to roll over 45 million.
FTMFW
Those are older variations only if they are all synonyms for extend and pretend.
Current glossary definition: Increasing the maturity of someone's debt - knowing that they will default - while imagining that economic activity or leverage will return to the same level as when the loan was made.
OT: In case you're following the travails of Sen. Dodd and his Countrywide mortgage:
Democrats lock Republicans out of committee room
Rep. Edolphus Towns (D-N.Y.) locked Republicans out of the House Oversight and Government Reform Committee room to keep them from meeting when Democrats aren’t present.
Towns’ action came after repeated public ridicule from the leading Republican on the committee, Rep. Darrell Issa (R-Calif.), over Towns’s failure to launch an investigation into Countrywide Mortgage’s reported sweetheart deals to VIPs...
sportsfan
round tripping = latin america debt crisis, 1970s
evergreening = japan, 1980s
fraud and b.s. are pre-wwii era
don't know what was used during Asian flu / China banking crisis (still not dead / alive btw)
Is there to be a poll on which agency chief gets to fall on the sword, if any?
mp
wrote: The ICAO (Int'l Civil Aviation Organization) specifies English as the international language of aviation, which is why an air traffic controller in China, for example, speaks English.
However, there is an exception in the US regulations. The FAA will grant an exception to FAA licensed repairmen who reside outside the US. They're not required to speak, read or write English. This brings up a conflict because all aircraft documentation, such as operating instructions and maintenance documentation, is in English.
....
full disclosure - my brother flies an Airbus A320 for Vietnam Airlines. a few years ago he almost had an air collision with another
Airbus flown thankfully by an Aussie... the air traffic controller screwed up in approach directions and had they not contacted each other and questioned what they were told to do well.... when they arrived back to file a report the controller was long gone...
I have spent a fair amount of time drinking beers with the ground crew at Ton Son Nhut and depending on position their command
of the language goes accordingly...
Appreciated, it is very nice information. I have learned many things from this blog. I hope the publisher will continue to publish blogs like this … Hand on ….
- Link deleted by kcoop --
EHP, I don't like the varied uses of 'extend and pretend' on this board and I certainly don't equate what is so labeled here as bullshitting.or fraud. Just my personal observation.
Anyone have an opinion they are willing to share on the next major dollar move, up or down?
IMO, $US is going down.
'(Brooksley) Born wanted to release a "concept paper" - essentially a set of questions - that explored whether there should be regulation of over-the-counter derivatives. They warned her that if she did so, the market would implode...'
'Credit Crisis Cassandra' - Washington Post
The same SCARE tactics 'they'(merchants of fear) are still using to extend and pretend the derivatives bubble...and other related bubbles...
SNAFU wrote:
I think they are trying pretty hard to set up Sheila - yes no? She would make the perfect usual suspect - she's even left fingerprints at the crime scene.
I don't think she's cooperating though...
mp,
Thanks for that. There are some who think dollar devaluation (against other currencies) is intentional and will ultimately be in the 60-70% range.
I don't know what to think.
Mr Slippery wrote:
Level. For the down folks, that means someone else is "up". Who?
Euro? They're already squealing.
Yen? Close to the 87 Yen deadman switch.
Yuan? HAHAHAHAHA.
Others? Too small to matter, let them suffer. (Yeah, I'm talking to you, Canada and Korea).
For the "up" folks, just look at the printing press. Enough said. So: level.
http://www.fhlb-of.com/faqs/faqframedyn2.html?source=../../faqs/fhlbankpresentation905.pdf
FHLB Large member (>5B) Collateral
52% residential first mortgages
21% HELOCS and 2nds
13% Securities
8% CRE
6% Other
We are in different times, a time of no responsibility, no pain, no consequences. Have others pay for your troubles.
dryfly wrote:
And she has powerful backers on the Hill. If you find her on a sword, she was pushed.
a natural bias on the blog is
91/73
housing/economics.
who are the 18 deviants. and what do they believe, and how is their life getting better.
Mr Slippery, my outlook for $US is based on interest rates and I don't see those changing any time soon.
It's cute that Wall Street's argument against this stuff is always "you'll cause the greatest financial crisis since the Great Depression if you do that!"
Whew! Good thing we didn't do anything about derivatives and securitization. We sure dodged a bullet there...
interest rates don't exactly drive exchange rates at the best of times
trade flows used to dominate
with trade down, and financial hot money up... it's all financial flows
look at what Brazil is doing, we won't hit the inflation threshold limits to revert the system this time
NorkaWest: from the FHLB presentation:
"All FHLBank System debt securities rated tripleA by Moody’s and S&P"
Say no more! Say no more!
By the way, didn't they loan a lot of money to Countrywide? How did that turn out? Did the presentation mention that?
Testimony Concerning Regulation of Over-The-Counter Derivatives (Chairman Mary Schapiro, June 22, 2009)
Well, I could have said that my outlook was based on my belief that President Obama was having sex with chipmunks at undisclosed locations, but I didn't.
EvilHenryPaulson wrote:
Not when the CBs hold the hammer. The 'private' market is WAAAAY bigger than the CB intervention but who wants to be the one taking the bullet so that everyone else can profit? The Japanese were [at one time] the masters of that... like I said a few days ago 'you don't have to shoot all the cattle to make the herd stampede'.
FHLB issued some bonds recently ($3.5bn ? term). Another issue coming up on Dec 8th
a lot of the FHLB branches I have noticed have suspended dividends, frozen share repurchases and advances, cut staff, cut social programs. I wonder what they do all day with nothing moving
'The usury parasite has infected 170 nations, feeding itself through the central bank syndicate, a shareholder consortium of private banks...'
Another crazy 'Patriot' conspiracy theory or a 'useful analysis of the Global meltdown - and what to do about it!
'Out Of The Box Thinking About Our Financial Crisis' - Tikkun Magazine(March 2009)
Tikkun Magazine - Out of the Box Thinking about our Financial Crisis
If it is Sheila, that would be please the boys network, Timmy, BB, Rahm, the OCC guy, especially the OCC guy. Would be a mark against Mr. O, for sure.
CountryFried? I haven't seen any news on this or anything else related to FHLB recently. When everyone else is having housing heartburn, no news makes me curious and nervous.
i remember in february when my idiot neighbor was buying every ultrashort ETF imaginable. now that same idiot is shorting the dollar, only this time the leverage is 300:1 (WTF!!!). a dollar rally will kill a lot of retail shorts and idiot hedgies.
Weird happening the other night, my guy at BAC now manages traders who are pulling 7 figure bonuses and I think he's turning green with envy or cracking up. Basically asked if I was interested in trading on insider info and when a mutual friend(who is a relationship manager for institutional investors for a big firm) suggested that BAC stock could slide a little over the next Q he went batshit crazy and wanted to fight.
Another friend is at the insurance side of AIG(now called Chartis) and said that the investment side biz model was simply this after Greenberg left: last year +10%. Insurance is well ringfenced, but AIG is basically in runoff mode.
Another friend has put together the insurance companies plan towards replacing desttroyed homes with a green building. It's got plenty of history behind it and is quite convoluted, but here it is in a nutshell:
NO
mp wrote:
Look at what the Yen did from July of 2007 through December of 2008. Now imagine the Dollar doing that in reverse. The Dollar's conversion to carry trade bitch will indeed be a down move.
Basel Too wrote:
Even though I am also bearish on the dollar - I wouldn't want to put myself in a position to be run over by either a short squeeze or an intervention rally. Not at 1:1 let alone 300:1.
How much money does this guy have if he can lose it so easily?
I don't see a scenario of a USD rally except perhaps against sterling and a slight one against the euro. The play may be Long SE Asian currencies as they will slowly then quickly rally as the run out of reserves trying to match the china peg.
mp wrote:
AHA! You didn't get rid of the chipmunk, you turned it!
R's did the same thing when they were in control.
Basel Too wrote:
Yes, but is he drawing out his margin account and investing it in Brazilian bonds? He can get another 8% that way!
How much money does this guy have if he can lose it so easily? - dryfly.
~$50K
how about this? i guess these retail idiots are helping bernanke devalue by shorting the dollar.
Forex Redirect
Whenever you're faced with a liability, turn it into an asset.
I believe firmly in that.
Comrade Alexei Mikhailovich wrote:
The fact that we don't see the scenario almost makes it all the more chilling.
I'd watch the Christmas selling season and what happens to Asian exports to the US - if they discover decoupling is more painful than they thought then fierce intervention could follow. Can't sustain it forever but long enough to bloody shorts to pulp.
dryfly
Brazil (taxing financial transactions, pretty big incentive eh?)
Philippines, Taiwan, Vietnam (launched a salvo last week)
Europe (raising tariffs and jawboning first, more to follow)
Japan (Postbank to lend overseas proposal)
Australia (raising rates to shut down credit and close the trade deficit that way)
keep in mind China has devalued vs the dollar during all of this, and the countries having twice as much liquidity dumped on them are pushing back. The Asian pump and dump of the 90s hasn't escaped people's memories.
The hot money flows are double-edged. Companies abroad have raised buckets of money with new issues this year. The ongoing flows out of the US aren't enough to sustain positive market performance. It will take less in outflow to trigger a change in liquidity/demand and accelerate those foreign market declines. Now I know a lot of Americans have given up on the dollar, but I don't believe for a second that they'll hold in those markets after the first sign of declines. For good reason too. You remember the accounting fraud in India, the state intervention in corporations for Russia, all the markets where short selling was not only banned, but the entire market closed for days or weeks? That hot money -- in my opinion it is -- will scatter like field mice at the first loud noise
700:1 leverage. No minimum deposit.
IG Markets, Inc., Worldwide Leader in Online Trading, Opens Shop in United States
| Reuters
Intervention is already going on, the question is how long SEvasia can keep their currency down. Chinas policies is possibly /probably the cause of the next leg down.
anyone know about the Mexican peso's future?
It is undervalued almost as much as China's Renminbi on a publishing power parity basis, but the economy/government revenues aren't exactly strong either and the situation could wind up with the cost of living in Mexico rising after the government loses oil money and the ability to provide subsidies
Basel Too wrote:
Trading binary options involves taking a position about market trends and/or events - and choosing
either "yes" or "no". There are only two payout possibilities; for example, an individual could buy a contract that predicts gold will expire above a strike price of $942.00. If the individual is correct, the payout is 100 percent; if not, it is zero percent.
Reminds me of red and black. rien ne va plus!
'A debt based monetary system can never achieve equilibrium because compound interest that multiplies exponentially overwhelms the monetary supply. Escalating interest eventually overwhelms the money supply and causes systemic collapse.'
Nikki Alexander, 'Out Of The Box Thinking About Our Financial Crisis', Tikkun Magazine, March 2009
(The thing is just a few months ago this 'opinion' would be considered absolute 'tin foil' by the prevailing 'public opinion consensus' or 'common knowledge' but now this take is becoming more common and less 'out there'...)
EvilHenryPaulson wrote:
I hear ya. And if anyone doubts the FCBs can't move the needle in the short run ought to ask the forex traders who took on BOJ in the 90s. Even Soros wouldn't step in front of that bus. Now we have a world full of them - all trying to play the same game.
dryfly
Except the current crop are led by CNBC, ETFs, and retail x00:1 forex leverage run by rentable trading bots. oh and I forgot, all the institutional mutual funds that have performed so great all through history. less creativity -> less stability. I consider this a manic depression, and betting against the last trend is the easiest way to make money
Wasn't the Asian currency crisis triggered in some way by China devaluation of their currency and then the rest of Asia experiencing slowing economic growth as manufacturing shifted to China? The expensive Asian currency countries then tried controlled, competitive currency devaluations to maintain manufacturing market share. Unfortunately, the controlled devaluations got out of control and turned into collapses. Russia then kicked the legs out from under anyone still standing.
EHP: Am I remembering right?
Comrade Alexei Mikhailovich wrote:
That is a great question - if I was short the dollar I'd really really want to know if they can go longer than I can afford to stay short. Rumor was the BOJ used to time intervention to do the maximum damage to traders who were cross purposes to BOJ interests say supporting the yen [come in right before options expire for example]... it was cheaper to do that then try to intervene all the time. All you needed to do is shoot a few and the rest of the herd stays back.
EvilHenryPaulson wrote:
I would look at Mexico's oil revenue (Cantrell?) and remittances home before deciding if the Mexican peso is over or under valued. Don't have any data so I don't have a firm opinion, but my gut says be careful.
NW
The shutdown of the capital electric company is a shot across the bow of PEMEX and obstructionist politicians. Short term it will continue to sag until reform really kicks in. It's happening in fits and starts, but the federal nature of govt is the biggest hinderance.
While Sonora is going gangbusters, Chihuaha is just going Gangsta.
Comrade Alexei Mikhailovich wrote:
Chihuahua is probably more profitable as a result...
Plus the peso is so closely coupled to the dollar its almost a proxy - like the loonie.
NorkaWest
I'm too young to remember first hand. Conventional story is that Thailand went from a USD peg to a floating currency, couldn't maintain the level, and had a debt problem. Other countries that were responsible during the boom ended up being faced with irrational waves of investors pulling out of Asia at any price. Which is why so many countries built up irrationally huge forex reserves this time. I don't know how much China had to do with triggering it then. Sounded like it was just the end of asset bubble returns being able to maintain positive carry after debt servicing. Just like the tech or housing bubbles. I think China was able to maintain its currency throughout, like Malaysia, due to capital controls. There had been worries that other Asian countries would be undercutting them before the bust, and I could be wrong, but I think it was a debt bubble that had run its course after 3-4 years
Cantarell is the aging super giant field that has carried Mexican production for decades but no longer, it is in irreversible decline and the rate of decline has been another "beat"...
for funsies (didn't read the fine print on the leverage)
march: 1K deposit at 700:1 leverage = 1.70M Brazilian Real.
today: 1.70M Real = 980K.
gross profit on 1K = 979K!!!
NorkaWest
I'm not looking to speculate, and the PPP is a decently objective comparison. I just felt like asking the question, because Mexico may have some major internal adjustments in the next 5 years
Peso has slid the last couple of years, used to be a solid 11-1, now more like 13-1, 14-1 at border towns
dryfly wrote:
plus or minus 50% in any given year, 3% any given business day. Not like those banana republics
The increasing sentiment (from sample blog comment) seems to be Wall St. won and 'controls' USD printing press and the public can't do anything about it and will have limited access to the dole, so in the Wall St. Vs. Main St. main event, the undisputed winner is Wall St.
Cantarell is one of the largest oil fields on the planet, relevant excerpt from Wiki on the field:
Cantarell Field - Wikipedia, the free encyclopedia
in the Wall St. Vs. Main St. main event, the undisputed winner is Wall St.
Did anyone ever think main street would win? Money and power control, period, always. Until bullets are involved and I don't see that happening in my life time.
A book recommendation "On Violence" by Hannah Arendt.She discusses the differences between force and violence,power and authority with insight and clarity.
One may note the level of oil imports from Mexico peaked in 2006 at around 55 million barrels per month currently running 35-40 million barrels per month range
U.S. Imports from Mexico of Crude Oil and Petroleum Products(Thousand Barrels)
edit: in the latest month of data, only Canada and Venezuela sent more oil to the USA than Mexico...
NorkaWest,
'Unfortunately the controlled devaluations got out of control and turned into collapses.'
Can't happen to the Dollar though, right? What's your bet on that collapse scenario for the Dollar? People with Dollars want to know.
This may be of interest to some of you here
Is the U.S. Dollar the New Carry Trade Currency? -- Seeking Alpha
EvilHenryPaulson wrote:
They were actually a stabilizing force back then - they DIDN'T devalue after almost all the Asian Tigers did - stopped the bugger thy neighbor race to the bottom.
Thailand was the first domino but all of them had similar problems - liabilities owed in dollars but not enough dollars coming in via exports because China had started to take a bigger and bigger cut - the dollar based debts blew up all over Asia. And it wasn't the gov'ts that were holding the debts - private companies mostly. Still had to be paid or closed... gov't got involved because closing meant social turmoil.
That in part explained why their central banks hoard dollars. To back up their private sector liabilities... so some of it made sense at one time. We just got way past that - to a 'dollar reserves' arms race.
I recall that China devalued its currency a couple of years before the crisis. This put the squeeze on all the other Asian low cost manufacturers so their government tried to restore their pre-China devaluation competitive position. Most of the manufacturers were highly leveraged to build capacity on the assumption of future growth which China's devaluation diverted. The loans were from local banks who borrowed short in hard currencies and lent long in local currencies. When the hard currency investors fled, the local banks were toast. Their central banks did not have enough hard currency to save their banking systems and currency pegs.
Turbo Timmy was at the IMF at the time and Summers was at the Treasury. The Asians remember how "helpful" those two were at the time.
EDIT: Dryfly beat me to it and said it better.
Remitance checks to Mexico are down. Many Mexicans went home due to no jobs in the US. The stepped up employer sanctions were part of the reason, no construction jobs was a big reason.
U.S. destroyed Mexican economy with media blitz of 'scare stories' about violence, then the swine flu 'initiated' in Mexico City; NAFTA border factories in Mexico shut down for 'Comparative Advantage' of cheaper labor elsewhere such as China, plus oil in Mexico being 'stolen' and ending up in the U.S...all has hit the Mexican economy hard...
Quite a few people that I know used to go for long weekends to Mexico, mostly to Rocky Point.
Now that you must have a passport, fewer tourist go. Most are too lazy to get a passport.
Also a large drop in Spring Break party goers.
I think of every bubble with references of dotcom companies.
"That's just another pets.com", "They'll make money the day after webvan is profitable", "I'll check in on that from broadcast.com", "Remember when Yahoo was going to buy the entire USA?"
I think the pets.com sock puppet softens the problem quite effectively
Swine flu hit in Mexico in basically the busiest travel time of the year with thousands of people flying out of Mexico City every day.
Here is an article on China's 'attempts at industrial consolidation' Government Orders Crackdown on Overcapacity-ChinaStakes.com
It's got the authentic odd translation
If a flu virus was going to spread worldwide quickly, Mexico City is one of the places you wouldn't want a virus to come from...
merchants of fear wrote:
When things get Fugly, the prudent people who moved some wealth out of the US dollar will be hounded as traitors or tax cheats. A meme will be started by our elite that "those" people caused the dollar's collapse, not a generation's worth of mismanagement in Washington. If you move assets offshore, be prepared to move your ass with it or keep a low profile.
Those caused the problem will not get the blame.
Imagine Bernanke's next speech
merchants of fear wrote:
Detroit Flu hit them harder though - I read that in 2006 [or so] Delphi was the third largest employer in Mexico... behind the federal gov't & Pemex... not anymore.
NW,
Yeah interesting...wonder how many 'offshore accounts' investors decided not to volunteer their info...
The change in drug law may get some party tourists going back to Mexico.
Mexico enacts 'personal use' drug law - USATODAY.com
so do it again and double down...
make even GS trading profits look pitiful
I suspect that the odds of getting caught calculation was made based on which bank they used. UBS, Credit Swiss, and many private Swiss bank clients probably 'fessed up. If their bank was sound and located in a country that could tell the US to shove it, they probably kept their heads down and mouths shut.
Wonder when U.S. states legalize possessing small amounts due to massive state budget cuts which make enforcement a joke...
Az passed, by ballot, medical pot twice. The legislators decided the voters were confused and missinformed and passed laws to retain criminal prosecution.
maybe next time they will follow the voters choice?
States won't legalize it. They will just expand the medical dope industry, doctors will discover that it cures the symptoms of Depression, and everyone will be depressed after looking at their financial situation.
Charity orgs will pass out pot to the homeless in tent cities to combat depression.
I can see that happening. Keep the rabble stoned and no stones are thrown.
NW,
Sounds like Brave New World...
New front in war on strong Canadian dollar - The Globe and Mail
I know Carney's job better than he does
Oh
Wow
Man.
Better than 1984 though
merchants of fear wrote:
Nope, California here we come.
Better than 2010 too.
EvilHenryPaulson wrote:
Not true.
It's a normal distribution.
It depends on where you are on the curve.
merchants of fear wrote:
Depends on the interest rate versus true growth rate.
Depending on investors, it's possible to drop interest rate low enough to reach equilibrium.
Which is what happened in Japan for twenty years and now here (so far)
I got family who match that description - from all accounts they are pretty well stocked now... but I'm sure they'll take the charity 'handouts' if its up to their standards.
Have a good night, morning .... depending on where you are.
Also...
broward
perhaps you misinterpreted what I meant by creativity
In the context of choosing from the menu of possible trading financial instruments for profit.
Fewer choices -> any change of choice leads to a bigger swing compared to situation with more choices
instead of choices diffusing throughout system, like pee in a pool, you get a limited set of choices resonating. Like an unbalanced washing machine.
I don't live to fit within your memes, I am meme-master
Past a certain point, creativity becomes self-defeating, creating more dissonance than benefit.
Was just looking at Japan's govt debt...$10 trillion...interest is a fifth of Japan's budget...so is the yen ultimately at risk? If Japan can't keep paying it's debt? Same questions. Different country.
NorkaWest wrote:
sigh.
always 100% the fault of evil government.
never the recognition of evil capitalists.
it;s just amazing sometimes to read this place.
broward,
These are financial markets. 99.99999% of trades are self-defeating or inefficient. The point is to understand how they will self-defeat next
If anything, I can make the counter argument - the creation of ever-greater derivatives and layers of interconnections & dependencies created an increasingly fragile structure which had to fail, and did.
How will they self-defeat next? In a comparable IT system, people would start ignoring it, moving around it and creating a simpler system more congruent with reality and their needs. Eventually, someone somewhere would see the old system as a target of opportunity to plunder and dismember its resources.
700:1 leverage is insane.
Global devaluation = global inflation => global bust --> WW III eventually, i think.
merchants of fear wrote:
That's what Einhorn thinks of Japan. Default risk will rise to US levels.
broward
Those layers of derivatives were not diversified. The exposures were too common. All the new products just reduced the safety margins in exchange for obfuscating risk.
Think of it as an ecosystem. More relationships between plants/animals/climate = more robust system.
What happened was a factory farm of cattle, that ran out of feed. I don't care if each one had an individual name, the fundamental relationships overlapped too much.
see Gresham's law for how that can spontaneously develop
see you in the ante meridiem
700-1 insane, you say?
$3 trillion on ICE:
IntercontinentalExchange, Inc. - ICE Crosses $3 Trillion Mark in Cleared CDS Transactions
Last I saw they had only $2 billion in their fund...
Where's patientrenter to babble about how those benign interest rate swaps will mostly net out? How's that going for Harvard?
It is actually worse. I did a post a few years ago at a long forgotten forum:
The case against rate rises in Japan
Aeroman
YouTube -
Cool, Bloomberg has Dow Futures at 10,000.00. Not that I'm superstitious in the slightest.
rosethorn,
WWIII between?
broward wrote:
The reason we have big government is to have someone big enough to push back against big business.
YouTube - Aircraft Maintenance Outsourcing Licenses and Capital Hill
They are both pushing in the same direction...
rosethorn wrote:
This reminds me of the old "down and outs" offered by bucket shops a century ago. The investor, er, gambler would put up enough money for a couple of point move in a stock. If that move against him occurred, he would be "stopped out" and lose all his money. According to an account that I think I read but can't remember where, some bucket shops created that stock move in its back room by inserting fictitious adverse trades, thus making a tidy but fraudulent profit .
Volatility in the stock or, in the is case a foreign currency, will "stop out" the 300:1 investor ; probably. The risk occurs when too big a move occurs too quickly and the investor leaves too big a debit or when the house decides that the investor is wrong and buckets the trade by not actually putting it on, thus taking the "other side" of the trade. If the trader, like a blind squirrel, is correct and the trade big enough and the house wrong enough, the debit bankrupts the house.
YouTube - Aircraft Maintenance Outsourcing comments
According to an account that I think I read but can't remember where, some bucket shops created that stock move in its back room
Sounds like "My Adventures with Your Money", but I haven't read it in a long time.
sdtfs, might be. Markets appear to be quiet, so I'm going back to bed.
Off topic. I just wanted to mention that I have posted two new podcasts in the Optimistic Bear "Practical Economics" series. One is an interview with Bill Conerly (who believes the economy is on the mend) and the other is with Matt Stiles (who thinks that the inflation/deflation debate is irrelevant).
Pomp & Surkanstance: Optimistic Bear Practical Economics podcasts
MP,
I looked for a Wall St. Journal article about commercial airlines shifting repair/maintenance work to locations outside of the US. Couldn't find it, but found this article instead. This article indicates the switch started in 2002, so I guess it was in 2002/2003, when I read that article. I started taking the train more frequently after reading it. Whatever people think of Amtrak, US passenger coaches are built to high crash standards (higher than most other nations, which makes ordering new passenger rolling stock expensive, as factories have to retool). Agree with you completely regarding hazards of outsourcing in this instance. Margin of safety--who gets to decide how wide the margin will be or even if there is one.
To Cut Costs, Airlines Send Repairs Abroad : NPR
If one looks at a global oil reserves map and the countries with the largest reserves left, maybe this will be the near future world war areas. Iraq, Iran, Libya, Venezuela, Nigeria, Russia, Saudi Arabia. Start in Iraq and go from there. Geo-strategic concentration of biggest reserves of oil. If it would not be a world war for oil, what would it be a world war for?
Potable water.
Rob Dawg,
I sent you a few emails regarding La Loma.
Left out Kazakhstan...U.S. has 2% of the oil and burns 20 million barrels a day and the Middle East has 60% of remaining reserves.
But food and water are resources too. Then there's natural gas.
Iran has 11.2 % of the oil(energy bulletin.net) My guess is Iran next.
Duke of Con Dao wrote:
I don't understand why any person of Volker's stature would want to stick around when he is 'used' in silly games that mislead public opinion.
Mr Slippery wrote:
We don't now?
mp wrote:
I happened to be having this same conversation yesterday with a guy I work with. When I hired him 6 months ago, he was the shop foreman for an aircraft part reconditioning company located in Florida. Among a slew of stories about "lax" standards at his own repair facility, (standards imposed by the owner to lower costs) was a story that when they tested parts leaving their facility they found only an 80% pass rate, yet the owner said to ship all the parts anyhow, because, "the end users would do their own tests and catch the defects."
Just what this world needed: maintenance shop owners with the morals of GS employees.
mp
just spent my some time at our new embassy in Phnom Penh. what a joke on American taxpayers!
Hitler's bunker didn't have that kind of defense spending! oh, yes... all the guards sit around in Herman
Miller Airelon (sp?) chairs, something that I as a cubicle jockey once pined for in NYC.
Just wanted to say I also like the summery, it helps to tie every thing together for me. Kind of gets my mind prepared for what is to come.
Mr Slippery wrote:
If we all worked directly for Goldman...
kidbuck
We don't now?
Well, I'm a sub-contractor to a sub branch within a government branch.
Does that make me a sub,sub,sub,sub,sub, etc blood sucking leach?
Or just a very tiny-winsy squid sticking my blood funnel into places?
kidbuck - Was a story that when they tested parts leaving their facility they found only an 80% pass rate, yet the owner said to ship all the parts anyhow, because, "the end users would do their own tests and catch the defects."
I don't think they are the only one's considering the failure rate for a lot of things lately.
I remember when things labelled water proof where actually you know water proof, and when something worked for more than a month after you bought it.
But when it comes to air plane parts, it's not like you can just pull over to the side of the road when it breaks.
Starting Nov 1
2nd Bag Fee
Air France will introduce a fee for passengers checking in a second bag. The fee will be $50 for all flights departing from the USA and 50 euros for all flights departing from Europe.
merchants of fear wrote:
I work with an Iranian researcher. He says, if Iran is attacked and its nuclear facilities are bombed, a few people would be killed, and then the rebuilding would begin again. Also,we would be doing a big favor for the Iranian government. It is moderately unpopular and struggling in many ways. It would be strengthened considerably as the Iranian people close ranks behind the government as it verbally attacks the perpetrators of the bombing raids.
God bless James Howard Kunstler, for nobody else will should he be taken down prior to the Long emergency
He has a new name for Goldman Sachs--Enemy of the People
I like it
Marching Toward Zombieland - Clusterfuck Nation
is that Wanda Sykes in the Aetna banner?
My god why would anyone trust any asshole that donated money to the campaigns of two opposing candidates. "Any asshole" includes corporations too big and too small.
good morning yogi
.......What a glorious morning.........this time last year I was rushing trying to find something for which to use green tomatoes....this October?.........nice mild breeze.........no worry of freeze or frost........everything in the garden is happy.........enough of me........Good Morning.....
By the way great article on Japan, we are not the only ones who owe over a Trillion
Sinking in Debt - NY Times
Good evening. Just noticing in a Limbaugh article reference to the "bipartisan" support for the heckuva job Washington is doing by NFL owners.
But since the info is just a Google away, I suggest boycotts of any business that donated to both Democrats and Republicans in the same election. That share owners tolerate any corporate donations at all makes capitalism a bad joke.
WFC, MS beat estimates.
Boeing posts loss.
Does Boeing make pitchforks?
I think this is a safety net. I wonder if Treasury and FDIC are prepared to play good-regulator/bad-regulator? If there really is no more money to borrow for the Treasury (any vote on debt limit?) and the FDIC couldn't borrow; this would be needed to offset the special assessments that the FDIC would have to apply against the smaller banks to ensure the DIF is funded.
No one reading this should be surprised when the FDIC rule for mandatory prepayment of assessments goes down in flames. Its clearly beyond FDIC authority. FDI Act limits deposits to money or equivalent currently held. There is no provision that gives FDIC authority to expand on the definition of a deposit to include money "projected, implied, or expected" to be held. It is money currently held! Therefore there is no way in hell legally they can collect an assessment ahead of when the deposit is held.
I don't know why I'm the only one who friggin understands this; however I've submitted public comment pointing this out to the FDIC. I am fearful they will still go forward with the idea, but just can't believe their legal counsel will allow it.
....a law firm that used to represent a company I owned used to donate to ALL county commissioners campaigns, even the ones we were at odds with........it used to frost my backside bigtime........my attorney simply said "it was necessary" as I spit, ranted and screamed..........I'm glad things have changed in the subsequent 30-years......
,rads
Four score ago our fathers brought forth on this continent, a new notion, conceived in margin calls, and dedicated to the proposition that all men are created equal, except for the brobdingnagians on Wall*Street .
Now we are engaged in a great financial war, testing whether that notion, or any nation so conceited and so indebted, can long endure. We are met on a great blog-spot of that war. We have come to dedicate a portion of that blog, as a resting place for those who here gave their reasoned opinion that that nation might be lying to itself, whilst drinking coffee and eating salty snacks. It is altogether fitting and proper that we should do this.
But, in a larger sense, we can not abdicate -- we can not prosecute -- we can not hollow out -- this situation. The brave men & women, living with doubts, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what we did here. It is for us the remnant, rather, to be dedicated here to the unfinished work which we who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these dishonored debts we take increased devotion to that cause for which we gave the last full measure of devotion -- that we here highly resolve that these debts shall not have died in vain -- that this nation, under new ownership, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth.
Good morning BSR - Unfortunately, we are suffering from the "lowest" highs on record for October and up to 2 inches of cold rain the next two days.
Given my work, I have to donate to several members of the House Finanical Services Committee and the Senate Banking Committee. There are certain unnamed members, though, that I refuse to write a check to.
sorry to hear that terry, unless the rain's needed..........where is "here"?........
Upper plains - Nebraska
Black Star Ranch wrote:
uh, huh.
And yet this from my sister the nurse:
"The flu thing is bullshit." she goes on about the number of flu shots she gives, almost exclusive nasal injection. She says some fat middle aged guy comes in and and wants to know does he have to bend over.
Top Ten Snappy Comebacks for the idiots, morons , and assholes getting a nasal injected H1N1
And the number ten snappy comebacks:
YSLP-
By law the DIF must be brought up to a whopping 1.15% of insured deposits. It doesn't matter what they call it, and the FDIC has broad authority to make the rules about which banks pay it in what proportion.
Why do you think it matters so much that they call it prepayment at the banks' request?
Sun Microsystems to layoff another 10%[3,000] of workforce
Cash is still king in this environment
1 currency now -yogi wrote:
For balance sheet and capital ratio purposes, the banks would prefer a prepayment as opposed to a special assessment - more playing with the balance sheet!.
Well, Terry, that's makes you a collaborator in phony crony capitalism. Just say no.
Cash is king, until it gets rooked over.
1 currency now -yogi wrote:
Hey - it pays the bills
I know, I just don't understand YSLP's obsession. I explained to him the real issue is whether the banks should pay for their insurance or the FDIC should just hit up the GS/Treasury.
ROFL, volker........Terry, went thru Nebraska a couple times.........while goin' and comin' from Montana.........I remember cold, windy, wide open, and some great country gravy from some unknown small cafe somewhere near the NW corner......amazing the stuff we remember.....
............."brought up" as in "credit-line", or actual cash in an undescribed location?
Also, I work with companies in emerging payments, like mobile payments, and the legislators are hearing concerns from the regulators and law enforcement about money laundering risks, security risks and failure risks. I am out there just trying to make sure the facts are straight and the regulations are reasonable.
I heard it's open season on scapegoats, and there's a one Sheila limit.
I had a friend who was told to contribute to the Republican Party and fired when he refused.
He wound up working for AIG. Everyone has to make a compromise; what disgusts me is the hypocrisy of an extremist Randian like Greenspan who spends the better part of his career intervening in financial markets according to his whim while killing the attempt to regulate the TBTF derivative trillions/quadrillions.
Jesse's Café Américain
Good read this morning by Jesse..
People that compromise their principles aren't very principled, are they?
Gotta go to W-O-R-K - nice day all.
yogi,
You're wrong.
The FDIC doesn't have the authority to redefine the definition of a "deposit", which is authority held by Congress.
The definition of a deposit is limited to "money or equivalent held by a bank".
There is no provision that allows the FDIC to expand this definition! The prepayments are clearly an effort to expand the definition of deposit to include "future money or equivalent held".
I'm just pissed that the FDIC has bothered to waste money in such a way. Its clearly beyond statute.
The prepayment does nothing to help them wrt the 1.15% ratio. It matters not if the collect the money now in violation of statute or in the future. They have until 2015 to get the reserve ratio to that amount (pending further extensions by Congress, which extended the time from 5 to 8 years with S.896).
Its clear Congress wants the FDIC to tap the loan authority. There's no other way to read the debate inherent to S.896.
It's my perogative as a citizen under this government to be obsessed about this. Clearly its not the only blatantly BS being perpetrated. However, it clearly undermines my civil rights that the FDIC is going to blatantly be "making laws". I'm curious what they say about this in the final rules.
It's obvious they have to tap the loan authority, its obvious that's the only way; and its obvious this is what Congress wants. So why bother pretending that they will be able to collect prepayments? Small banks should sue their assess off in Court to stop this.
PBS had a documentary on last night re. Greenspan...........I couldn't stand but 10-minutes of it......
Its clearly beyond statute.
This is just now getting you riled up?
Having you been living under a rock?
I think we agree in principle that the issue is if/when FDIC gets the loan.
The prepayments do nothing to bring them within the 1.15% reserve ratio. The prepayments are an effort to provide FDIC liquidity for going forward operations. Clearly the Treasury loan is in effect going to be a bailout, when all is said and done. Even if everyone will say, "the loan is going to be repaid by industry". In fact, one may argue its Sheila being prudent with her loan authority and forcing the discipline to remain industry funded. I'm not even sure what the FDIC is going to do as a next step; as once they accept prepayment they will be forced to take a loan or raise special assessments... does anyone really believe the $40B will last into 2011?
I disagree with your point that this is about the 1.15% reserve ratio; prepaying or not they account for it in the DIF the same way.
Joe Bageant: Raising up dead horses
Juvenal Delinquent (profile) wrote on Wed, 10/21/2009 - 6:06am
Incredibly apropos post. Imagine a golf clap. Swelling to a roar when the crowd recognizes a hole in one just happened.
++++
An apologist said:
"I am out there just trying to make sure the facts are straight and the regulations are reasonable."
Cue the Upton Sinclair quote about a man and his job depending....followed by any Will Rogers quote about the absurdity of our legislative system and it's lobbyists.
Wells Fargo's net income nearly doubles
Hahahahahahahahahaha! now this is funny. WF is a walking zombie of a bank..FED life support is the only thing keeping this patient breathing.
And you know this to be a fact.
How weird it must feel to be holding the right paper & pixels, thinking you've outsmarted everybody except yourself, that is?
I'm wrong about what?
Prepayment hurts the banks that are going to fail in the next 3 years, unless they fail before paying (surprise, surprise) and helps the banks that will grow share of deposits (more likely to be small banks as the big ones are facing break-up either as TBTF or in antitrust, no?).
The FDIC has to cover insured deposits so if some more banks fail they don't have until 2015 to raise cash, right?
Eric,
Lets just say this. If a citizen were legally able to challenge, and hold standing in court over this FDIC action; they could presumably be able to challenge and hold standing in court over various other agency (see Treasury) actions. I'm specifically thinking about the fact that there is still $70+B taxpayer money illegal infused into GM and C. Now perhaps politically the time is not right for such an action as the Republicans would have enough cover to support the bailout given Dem majority in Congress. .
But perhaps in 2010 when a new Congress, a more Republican Congress were in power; a party that has railed on about unconstitutional bailouts. Perhaps it would be interesting to see if they vote on continuing the bailouts if given a chance. I'd be very interested in exposing Republican hypocrisy re: automakers.
Home - Stop Bank Greed.org-- Chicago is fighting back. 10-27-09.
Check out this website "Stop Bank Greed"
Also check out the sponsors. This is not a nickle and dime site.
,rad Externalized,
Glad you liked it, I think Abraham would have appreciated the updating of his fine words...
yogi,
This is wrong.
By law the DIF must be brought up to a whopping 1.15% of insured deposits. It doesn't matter what they call it, and the FDIC has broad authority to make the rules about which banks pay it in what proportion
Prepayment has nothing to do with the 1.15% reserve ratio. Additionally the FDIC doesn't have broad authority. I know that you believe the FDIC has authority to go forward with prepayment; but do you not agree that the plan inherently redefines what a "deposit" is? .
Prepayment is all about currently liquidity. I didn't bark up the tree but I'm not sure FDIC has authority to make an assessment that ensures they are liquid.
Sorry going back to sleep... was feeding baby and wanted to submit further comment to the FDIC raising the specific point that the rulemaking changes the definition of a deposit. I'm a mark for going off on this in the comments as well as getting sucked into a discussion (or sucking him into discussion) with yogi.
If a citizen were legally able to challenge,
Then this would be a different country than the one we're living in.
"If things were different, things would be different!"
Hmmm..... I wonder if Plosser has been reading Mish:
Fed Uncertainty Principle
I commend YLSP for the effort in trying to find an entry into using the judicial system as a weapon against the fraud and corruption so apparent but so pernicious that it has frozen the co-opted system we all live within. Windmills--charging--making an effort. Good day to all.
I simply think the FDIC is the next institution to go boom; and it requires Congressional attention like now. I can see Congress declining however, as they clearly desire Sheila to tap the Treasury loan. When that happens there will be plenty of people saying how "this isn't a bailout" and "banks will repay the loan through their assessments"... but I have a hard time reconciling them dealing with the toxicity in our current situation.
Given the choice of bailing out FDIC, FHA, Fannie, Freddie... its clear which ones need to stop activity and which one needs to continue.
I don't care what accounting crap the FDIC pulls. A dollar is a dollar, whether they use it fund operations or pay an angry pitchfork wielder outside a closed bank branch.
Either other banks fund deposit insurance or it gets dumped on the taxpayer. Pre-payment or special assessment doesn't make a substantive difference unless you can illustrate the difference to classes of banks.
This is quite poorly worded: It's not clear that he understands what Heisenberg's uncertainty principle states.
You can, in fact, observe and measure a subatomic particle to arbitrary accuracy. However, you must choose the measurements carefully.
Barofsky sounding pretty useless on CNBC.
I just had an image of being an old man, decades from now, watching a commercial by Wells Fargo where they tout "we've survived through the years, in good economies and bad".
Ha!
Juvenal Delinquent wrote:
Makes you wonder if they had any to compromise in the first place-
Orwells Fargo, the next staged in banking.
I've found the way. It lies in Supreme Court rulings on citizens right to vote. When executive agencies act outside of the Constitutional jurisdiction, it is a debasement of our right to vote for Congressional representation. While Congress does this action it is the friction between my individual right to vote for someone who chooses our laws; and your individual right to vote. I believe I have a clear path to challenge, now... I'm not sure I've seen any lawyers per se use this argument... as most citizens aren't bothered or have the money to challenge such bullshit.
It was the August TARP report that got me pissed off the most. In fact, I heard some Congressional testimony that Paulsen was talking with Obama prior to the Presidency. Not only do his public statements make it clear that Bush himself authorized the bailout (again, this would be in violation of TARP law... the Treasury Secretary can only make the deteremintaion) but I question why Treasury reversed their position from "we can't use funds on automakers" to "oh yeah, 'financial industry' is whatever we want').
When I started looking into it, it was clear that Congress was over-rode by the President. To say that use of funds is legal means that there is no distinction between "financial industry" and "automobile industry". In fact, there were 4 committee meetings between the House and Senate on how to bailout the automakers. During these meetings it was clear that Congress hadn't provided authority to bailout the automakers themselves, only their financial arms were covered by TARP... etc. etc...
There's so much evidence of legal wrongdoing... and its all part of the official record. Even a couple months ago when Geithner was pressed on the definition of a 'financial institute'... in his testimony to the COP panel... he stated something like; "we haven't identified any other companies as financial institutions'.
Its like there are no lawyers at any of these places, or they were all bound, gagged or shot.
JP wrote:
Wiki's gotta good plain language explanation:
In quantum mechanics, the Heisenberg uncertainty principle states that certain pairs of physical properties, like position and momentum, cannot both be known to arbitrary precision.
The way my Dad explained it, and the way I've understood it for years is that the more you know about it's energy, the less you know about a particle's position, and vice versa.
yogi,
I've liked Barofsky from his testimony. I'm pretty sure it must be CNBC that is useless? Did they press him on the SIGTARP forthcoming audit? It's going to be on AIG counterparties and repayment. I have a feeling it will be of real interest to everyone around here... (although I think we all know the conclusions).
SIGTARP and COP panel do great work. Congress has failed to follow up or do anything based on their great work.
Congress has failed to follow up or do anything based on their great work.
Congress is doing exactly what they've been paid to do.
YLSP wrote:
What do YOU think the conclusions will be? I suspect it will be another whitewash-
I am noticing 2 buy signals at this moment, and of course many will be disgruntaled , that is fine, but it is a fact.
Oil and Gold...As much as it pains me to say, Oil will go to $100.
You can blame the printing press.
Barofsky toed the line on the legitimacy of GS bonuses. I'm looking for someone to follow Chris Whalen on the AIG sham transactions. At the end Barofsky casually dropped the statement that risk is now even greater, right after saying how much better things were because of TARP.
He suffers from Obama's condition of trying to say what the questioner wants to hear. We need a tougher guy in his shoes.
Cinco-X wrote:
That's almost right: Change "energy" to "momentum" and the statement is correct. (Or you can choose to play off energy against time: You can measure the lifetime of something short, but you sacrifice knowledge of its energy.)
But the bigger problem with Mish's article: The starting point of his analogy is not quite right. You can make one measurement as precisely as you want. It's the second measurement that you sacrifice accuracy.
I don't know why people invoke principles from areas where they have no expertise to explain an area where they have expertise. It usually weakens the argument at hand.
[JD: The more I read of that Huygen's article, the more out-to-lunch the author appeared. If that article is representative, then the author qualifies as a crank.]
JP wrote:
Well, if you can't dazzle them with brilliance..........
