He's talking about bankers ..right and, ahh... the FDIC?
Three Rings for the Elven-kings under the sky,
Seven for the Dwarf-lords in their halls of stone,
Nine for Mortal Men doomed to die,
One for the Dark Lord on his dark throne
In the Land of Mordor where the Shadows lie.
One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them
In the Land of Mordor where the Shadows lie.
Wonder if Faber is a 'currency speculator agent' building 'expectations' of currency collapse to build a 'future play'. He wouldn't be the only one...there's lots of investment pundits and maybe big investors predicting the demise of the dollar which can be a process of establishing widespread 'expectations' for a collapse 'event' as has been the the case of generated 'expectations' in other currency collapses...
Yah, that's it in a nutshell, that schizophrenia-like hedge game, where they want everything both ways and can never get enough -- driven to madness, corruption -- crime... do anything to get their people in the White House, do anything to steal vast amounts of treasure ... yah, that sums it up -- it is a metaphor!
Today's action clearly FDIC kicking sand in Treasury's face. FBOP apparently had a lot of Agency preferreds. Timmy shows up in the AM with $50 million, FDIC shows up in the PM to close the doors.
dryfly, re: your comment last night that you believe for all the self-dealing & BS spewed out by the wonks & elites that they get this. They get it better than many do here.
I used to have a lot more piss and vinegar towards what's going on. I've also changed my views a bit as I have talked to people who lived through real currency collapses and wars and gd 1.0.
I've watched the inability of most people around me to make even the smallest of changes required to their financial,social or moral lives.
To sum it up I believe that we were a hairs breath from a full collapse, I've seen nothing over the last two years to indicate that Americans want to hear the truth, want to make changes that require real effort or could withstand the hardships that would arise from allowing the banking system to shut down.
I still want prosecutions and change.
I see how hard it is to make changes from within the system. I applaud Sheila bair for standing up to the mega bank interests pushed by geithner. If she left her position I can only hazard what the next FDIC head would be like.
This isn't all black and white IMO there's a lot of grey in there as well.
Federal bank regulators issued guidelines allowing banks to keep loans on their books as "performing" even if the value of the underlying properties have fallen below the loan amount.
The volume of troubled commercial real-estate loans is skyrocketing. Regulators said that the rules were designed to encourage banks to restructure problem commercial mortgages with borrowers rather than foreclose on them. But the move has prompted criticism that regulators are simply prolonging the financial crisis by not forcing borrowers and lenders to confront, rather than delay, inevitable problems.
Those SOB's will be cheering on the orchestra as they row away in the lifeboats.
They will try - don't know where they can go though. BTW - when I said 'they' get it I meant congressional leaders, some at the fed, some in the administration... I think there are people there versed enough in history to know this could get real ugly if the prols really feel pain & lose hope. I do NOT think the bankers in the private sector get it - not one bit - if they did they'd be trying to find ways to camouflage the bonuses [and there are ways to do that - stock options, deferred compensation, etc.]
Johnson, who came last, offered the only serious critical viewpoint… After about five minutes of his testimony, Congresswoman Melissa Bean—another industry-funded committee member who chaired the hearing because Frank was absent—had heard enough. “I’m just going to ask you to wrap up because we’re running out of time,” she told Johnson.
Who the hell is Melissa Bean if she isn't a congressional leader?
Anybody well versed in history is buying land in Paraguay. The rest of them are concentrating on getting one more sip of blood out of the body politic.
The guy with the $141K in IndyMac, when the FDIC at the time only insured deposits up to $100K, was a fool. Hard to have sympathy for a fool. Nobody learns but the hard way.
Timmay Geithner is the spitting image of Eddie Haskel on Leave it to Beaver. He's as oily in his politeness to adults as he is weasely in his dealings with his peers. He's all talk and attitude, in other words, a real shyster.
Yes, the Ben Franklin expression is: Experience keeps a dear school, but fools will learn in no other.
But I especially liked the IOU trick. Mollify the masses so there is no instant action, then let them realize the loss gradually.
But the move has prompted criticism that regulators are simply prolonging the financial crisis by not forcing borrowers and lenders to confront, rather than delay, inevitable problems.
Sheila's FDIC again...
Not good enough to be better than Geithner. My beef is more with the structure of the system, than with Bair personally, but when the theater is on fire, the crime is saying "stay calmly in your seat".
from Wiki:
The FDIC guarantees the funds of all insured accounts up to US$100,000, and has declared a special advance dividend to the roughly 10,000 depositors with funds in excess of the insured amount, guaranteeing 50% of any amounts in excess of $100,000.[3] Yet, even with the pending sale of Indymac to IMB Management Holdings, an estimated 10,000 uninsured depositors of Indymac are still at a loss of over $270 million.[31][32]
Who the hell is Melissa Bean if she isn't a congressional leader?
She's a drone. Sub-committee chairs are leaders in the same way sergeants are generals. Listen they are not going to let the masses run this ship - that won't happen and quite frankly it SHOULDN'T happen - that's how it gets ugly even faster. And the best way to keep a lid on is to keep a lid on it. Then manage the 'emergency'. So far I think a lot of the drones don't get it. I think the club that got the 'this thing is going down' pitch get it. They don't know what to do [or what they can get away with]... but they understand the consequences.
If they really fear FAIL then the biggest risk to them is social chaos & not just losing money - to avert that [and protect themselves from us] they then have to make sure we 'eat'... somehow... if we no eat then we eat them. Just that simple. They get that - they really do. The smart ones [the smart scumbags].
Watch Pelosi & Reid... and Frank... in the house. I do not think they are stupid. Nor Boehner. These guys understand the score. They are well educated - they read the Storming The Bastille thing. Bankers not so much - lotsa accounting, not much history.
Amazing how were pulling a japan politically and financially ourselves. Much harder to make the hard choices when you're back is against the wall.
Sometimes the smartest choice is to buy time. Do you want acute disaster like early 1930s Germany or a long drawn out one like 1980s-1990s-2000s Japan?
So back when George Washington, Thomas Jefferson, and others got all riled up at the mother country, it was over pretty minor stuff. Stamps, tea, parliament not paying attention. I guess they should've just written a few letters or something./sn
Pelosi, Reid and Frank have been unopposed for too long, first posing as opposition, then posing for change. Baby, they are rich persons, too. Obama/Clintons, as well. If they "get it" why are pushing this modification nonsense (more bank welfare), which I seem to hear more from politicians than homeowners.
I agree with everything you said, dryfly, except about Boehner. He seems determined to undermine everything he can.
He wants to undermine the democrat authority in congress but he is no dummy - he will not blow it up so bad HIS family & peers go up the chimney too. In that respect they are all the same party. The party of the elites.
There is a saying in the middle east...
My brother and I fight.
My brother and I allied against our cousin.
All of us allied against the stranger.
That is how the elites look at us... they squabble in the pit but lookout for their own.
Point is neither party keeps power & privilege if the wheels really fall off. Neither the Dems nor the GOP. If we have real chaos BOTH lose and lose big.
I believe they understand this. They just don't know what to do about it.
So back when George Washington, Thomas Jefferson, and others got all riled up at the mother country, it was over pretty minor stuff. Stamps, tea, parliament not paying attention. I guess they should've just written a few letters or something./sn
Same was said in 1930s Germany - they did more than write letters too. Same w/ St. Petersburg Russia 1917. Doing something 'big and bold' doesn't always end up well.
So would I, but even though superficially it looks like we're going the Japan route our debt & spending circumstances are definitely directing us towards a Weimar-like situation.
Sorry, but to me this looks like 50% FLAIL, and 50% congressional zombies hungry for more brainz. Are you seeing some effective response to the situation that I'm missing?
Take the mood the country's in now (which is being exacerbated by arrogant behavior like Rep. Bean's), add in another leg down in the economy (on the way), and you'll probably get the beginnings of your social chaos.
Based on my last conversation with my Representative, and the latest moronic email I received from one of my Senators, my conclusion is that the flames are lit and these guys are busy breaking out the fiddles. If there's intelligent life out there, I see no sign of it.
So would I, but even though superficially it looks like we're going the Japan route our debt & spending circumstances are definitely directing us towards a Weimar-like situation.
I agree - we aren't going to get 'Japan' - not exactly anyway. We don't produce, save or have the restraint. As we say here in the Midwest... "It will be the same - only different"...best said with a 'Fargo' accent. Now where's the smorgasbord?
It is NOT Sheila Bair's job to protect banks from bank runs.
Her job is to protect the money of depositors, even that "fool" who was $40k over the limit and believed her assurances (or silence) indicating everything was fine.
The FDIC and the SEC were not created to help banks sell their Ponzi. They were created to protect people from bank Ponzi.
For all the hand-wringing over various media blowhards and homegrown militias, I really, really doubt this country could become the breeding ground for the Fourth Reich, though.
Sorry, but to me this looks like 50% FLAIL, and 50% congressional zombies hungry for more brainz. Are you seeing some effective response to the situation that I'm missing?
I see nothing effective - I just believe they understand this isn't just about money anymore. Money doesn't matter - never really did - people having food, place to live - JOBS - hope - that is what matter.
And they don't want us to have those things because they are nice - they want us to have those things because we are dangerous animals if we don't have them - the kind of animals that will eat them if we are cornered.
But 'yes' they are flailing and probably scared shitless - they should be.
I cut off the snark tag accidentally. I'm not advocating revolution, but I guess I'm suggesting that for the founders the circumstances weren't doom in the sense of total economic collapse. It was a steady stream of outrages.
I cut off the snark tag accidentally. I'm not advocating revolution, but I guess I'm suggesting that for the founders the circumstances weren't doom in the sense of total economic collapse. It was a steady stream of outrages.
It was doom for them economically. Look at who the founding fathers were - wealthy land owners - many slave holders. The crown wanted to maintain economic control. The biggest freedom the FF worried about was their wealth. In the end the crown bungled it - could have bought them off easily [which was done later in other colonies like India]. Didn't happen.
Luckily for us the French decided it was a good idea to stick a finger in Georges eye or we'd have remained a colony and hockey would have been the national past time.
I think many of the FF showed personal bravery but the primary motivation was economic.
For all the hand-wringing over various media blowhards and homegrown militias, I really, really doubt this country could become the breeding ground for the Fourth Reich, though.
Not exactly but similar enough. Patriot was a good start...
The founders made speeches, wrote letters. Who fought on the front lines? To many of them it may have been a question of eternal indentured servitude or a better chance at their own title. Jefferson's 1800 takeover was considered completion of the revolution by some (certainly not his slaves).
"Total economic collapse" is loaded. All changes in financial/currency systems help some and hurt others. Panic is usually counterproductive, but so is extend and pretend.
sounds good on paper. Problem is, it eventually winds up being economic freedom for some. That's where government becomes necessary, to limit the excesses.
There is no freedom without economic freedom, hence the whole idea of "limited government".
But you can have economic freedom for some and then not extend it to most others - which is what happened [non-property holders, non-whites & all females excluded]. Took centuries a bloody war, strikes & protests to really complete the revolution... only to see shit like patriot come along and threaten to undo it all again.
dryfly (profile) wrote (in reply to...) on Sat, 10/31/2009 - 12:40 am
Property is only ONE freedom.
If you start at freedom of thought (i.e. independent, critical thinking), eventually you can arrive at (or derive) many additional freedoms. After all, someone first had to think of "property rights".
So the abolition of slavery, that's big government intervening by restricting the economic freedom of the property owner?
Sure it was - to those who owned the property. Not sure that changes anything - it still didn't get done until a couple generations after the revolution - right? Then made real a hundred years after that... gov't dragged along kicking and screaming every inch of the way.
BTW - if this current mess gets fixed at all it will be similar - gov't owned by elites will fight it all they way. If it gives up anything it will be to save themselves from us. Sort of DeTocqueville-esque but that's the way it works here... it won't get done because they love us - its because they fear us.
geez I'm away from the computer while I brave the 5 down into the bowels of Hell (OC) and they close 8 banks? What happens if I sleep through next Friday from exhaustion?
btw anyone down here think the H1N1 fear is getting weirder by the moment? I am missing my little cow town.
Yup. The definition of "property" and hence "economic freedom" is subject to evolution and revolution. Who eats and who works, how much and for what reward, are moral, political, economic, and legal questions always.
California to withhold a bigger chunk of paychecks
"Think of it as a forced, interest-free loan: You'll be repaid any extra withholding in April[in IOU?]. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less."
not sure if anyone watched the clunker movie not for cash 'The International' starring Clive Owen and Naomi Watts...
most memorable lines from the movie - 'you own the debt you control everything' and 'we're slaves to debt', both spoken
by a suave industrialist from Old Europe.
here's a mash-up of my idea of good bonus material for this movie... YouTube - Clive Owen's Controversial Bonus Material from The International' commentary: Tony Gilroy & Ephron
Thanks for that. Very nicely done. I especially liked:
The strongest of these is the point made by MIT's Richard Lindzen, arguably the most senior climate scientist in the world. Lindzen doesn't dispute the energy budget model, and doesn't dispute the properties of CO2. But he says that the feedbacks required for "runaway" warming are theoretical, and without feedbacks the warming is around half a degree Centigrade. The implication is that we've seen all the warming we'll ever see from CO2.
Robert will enjoy the linked article I somehow feel.
Perhaps the House really had to attend business to, hence the prepared statement getting cut short? Isn't it better to cut short that prepared statement of testimony in order for the Congress to ask questions if they are running into a time-wall?
FDIC statements has been that losses will total ~ $100B over 2009-2010. I believe they claim to be halfway there currently (this means contingent loss reserve has $50B in it). So tonight we take another $2B from the DIF and add $2B to the contingent loss reserve. It seems like the assumption that banks will stop failing in 2011 seems a big wrong; unless CRE losses will turn into a nothing-burger?
I think Congress will just bail out FDIC. To be honest, that seemed like the right thing to do instead of TARP. In fact, how did Paulsen convince all the members of Congress that TARP was such a great idea when the FDIC seems to be in a better position? Why is that question just coming to my head? Why did Congress give it all the bailout funds to one regulator? That doesn't make sense, right? Banks are in trouble; banks are failing, only Treasury can help?
I don't understand the anger towards the FDIC/OTS/OCC (see Denninger post today), quite honestly all these agencies work for Congress which has oversight authority over them. The bigger picture is that Congress can't maintain its kingdom. Let's add government involvement over healthcare and both parties continuing to pursue their ideologic agendas and we are well beyond building a country thats going to crumble under their own desire for more and bigger government. Until there's a strong pushback against this way of governing the country (Republican laissez-faire is almost just as bad) the American people can continue to get screwed.
Is there any political commentator that is actually independent and warning about this? I'm starting to get a vision of my head of a political party that instead of advancing any agenda strives to simply implement good governance according to the law we currently have as well as transparency. Every lobbyist meeting by Congress is fully disclosed as well as discussions with anyone that happen as a result of someone being a Congressman. A party whose agenda is good-governance and transparency over ideological pursuits? I'm sure thats what the American people deep down want; not the two bickering brothers. I'm no historian but I think we've been ruled by the two bickering brothers for so long (1930s, 1960s?) that people have forgotten what the government is for.
WOW, I can't go away for more than a few hours. I'm catching up....stunning. ALL of it.
YLSP: Yesterday was striking, Soros and Wilber Ross were both warning of the impending 'bloodbath' FROM LBOs and CRE losses. And then I see a bit on how the FDIC/fedgov is working out remedies in accounting to shelter those losses off balance sheet and work with creditors and not foreclose. Well they aren't foreclosing on delinquent homeowners in some sections of the country, so why should there be foreclosures in CRE?
Its instructive. If the current rules are too strident then change the rules but only liberalize them for a select segment. Its the story of the last 25 years.
I didn't read that article yesterday, too busy; and now I'm tired as well... so most likely going back to bed (only up since baby was hungry).
Re: CRE Loan Workouts This policy statement provides guidance to examiners, and financial institutions that are working with CRE borrowers who are experiencing diminished operating cash flows, depreciated collateral values, or prolonged delays in selling or renting commercial properties. It also recognizes that during these difficult economic circumstances, continued credit availability to businesses, especially small businesses, is challenging, even where borrower performance has been acceptable. This policy statement reflects the appropriate balance of prudent credit practices and meeting legitimate credit needs.
Read between the lines. Its Congressional/"political pressure" that typically subverts the "rule of law". Congress doesn't want to constrain banks that are actively working to with CRE borrowers. My understanding is if bank examiners were more harsh in how they treated these loans it would restrict lending. Again; look at it through the lens that Congress believes lending/borrowing is the blood of our economy, and if we can't borrow/lend everything will collapse. Read any Congressional testimony or hearing and you'll see the fear of businesses all around the country.
I'm pretty sure the commentariat don't agree with the basic premise; but consider it official policy of America. No one really cares about the value of stocks and bonds; its the fact that our economy is dependent on the free flow of credit; its depending on borrowing and lending.
Interesting footnote from the policy-paper: This statement replaces the Interagency Policy Statements on the Review and Classification of Commercial Real Estate Loans (November 1991) and Review and Classification of Commercial Real Estate Loans (June 1993).
Thank you my early morning pal.The CRE loan workouts are going to implode. I read something yesterday about small businesses reluctant to go to the SBA for loans. Another article revealed that small businesses that don't appear to be in distress (aka not behind on payments, etc.) fold under the radar. That was linked yesterday, I'll find it again if you want it.
sucks I can't get the Daily Show that easily... the upload takes forever, so I pretty much have given up.
trying to re-do my Larry Summers mash-up... looking for some interviews he's done on TV recently,
anyone?
....
it would be nice to see Comedy Central allow you to play thru a clip and then have a re-play button like
YouTube, after all, comedy doesn't seem to work so well when it stutters (ok Simple Jack in Tropic Thunder..)
Back when all branches of government were worried more about the financial system’s viability, rather than its profitability, Ms. Bair creatively morphed the F.D.I.C.’s seized bank asset disposition programs into what became the Public-Private Investment Program’s legacy loan program to encourage banks to divest themselves of troubled loan assets (as opposed to securities) at reasonable prices. During the P-PIP’s short life, as circumstances would have it, private sector investors began to follow the government into the equity of banks and ignited a bank stock rally that quickly spread to the broader market.
This outcome, of course, delighted those in the Treasury, the White House and Congress who were thrilled at the prospect of life-giving equity flowing into the financial sector from someone other than taxpayers. But it also put tremendous pressure on Ms. Bair to put the legacy loan program on ice and refrain from rocking the boat amid all the talk of green shots and glimmers.
Obtaining price discovery on the market value of bank loans (which, unlike securities, need not be marked to market by banks) would have been counterproductive, of course, at a time when banks were only beginning to succeed in raising capital. Ms. Bair either understood that or was persuaded to appreciate the situation.
But she has not completely relented. The F.D.I.C. has kept alive the legacy loan program in connection with the boatload of distressed assets its division of resolutions and receiverships continues to inherit. And I would not be at all surprised if Ms. Bair believes that in the long run there more aggressive action will be required to resolve distressed bank loans, with the government providing the financial incentives and regulatory pressure to be able to do so.
thanks greatly for all your help Nanoo-Nanoo !
the connection I'm on today actually has decent enough throughput to watch the Daily Show...
but usually, that's not the case.
here I post on YouTube but forget to search in that very location, duh!
of course the news programs don't care if they're on that service...
no shelf life for most of their programming...
....
on a side note my original parody of Jim the Realtor received a total of
7 hits in Europe. JIM needs to break out nationally, too localized even
though it's the 7th largest economy in the world, right Dawg?
I'm a creature of habit, and have been watching the Bair Which Project for some time now, and it's always been the same pattern as far as announcing which debtrius-laden banks were going down, so why did 9 banks close en masse, yesterday?
morning
,rade kristina no dont change it just call it the "not so fortunate 400 +"
jd do you mean when the "press" gets a hold of a closing? if so i figure that she basically has to close them down by my count thats happen 3 times, and i really hate it.
but im not awake yet working on 1st
The Chicago Trib has a picture of Geithner, Mayor Daley and Cong. Davis announcing 50 million in funding for Park National Bank probably yesterday. The bank was seized last night.
I'm thinking they are getting us ready to be able to accept a lot more bank closings under the guise of a 1 announcement fits all plan, perhaps like 25 or so per Friday...
Per Geltner (?) the decline avg for CRE from peak '07 is 41%. But that's not a good number. The number he says is a split between distressed, down 52% or thereabouts, and healthy, down 33%. Of course, they both mean that the lenders are either seriously losing money or are just losing 8% so far of their capital investment.
Then he says, it's possible that the healthy CRE won't take a further hit; nope. The healthy owners, which mean the CRE won't be dropped into the market, are unwilling to sell "dear".
Boy, I've heard of an apologist; this guy is professor none the less. It's like listening to Schiller as the prices dropped. Nope, not happening here.
The middle ground for those two is the safe ground. The problem is that it's the stupid ground. It's easier, says Mish, to ask for forgiveness after the fact. These are off the rack poster boys of those who refuse to dare to be great. With that level of analysis, America has been doomed, not will be, but has been strangleholded by the moderates who refuse to risk being wrong, which is not even a risk in a collapsing market. This guy and Schiller both depict the ineptitude of the leadership crowd. Add Roubini, too.
The CRE will drop like a stone in 2 months, right in the midst of the Holidays. The market will have spoken, and the fear of what's next will be real and obvious.
Wow - 1st?
Regardless - is this really that surprising?
Enjoy Dr. Faber. He says ”Dollar will become wall paper”. He is very likeable fellow .
YouTube -
So...will Russia try anything if Ukraine's economy blows up? Looks like there's much more potential for disaster there than in Latvia.
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Just passing by again, but this seemed on target: "Nine for mortal men doomed to die" ...
YouTube - J.R.R. Tolkien - The Rings Verse - One Ring to Rule Them All
He's talking about bankers ..right and, ahh... the FDIC?
Three Rings for the Elven-kings under the sky,
Seven for the Dwarf-lords in their halls of stone,
Nine for Mortal Men doomed to die,
One for the Dark Lord on his dark throne
In the Land of Mordor where the Shadows lie.
One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them
In the Land of Mordor where the Shadows lie.
GS must think they have that "One Ring"
Wonder if Faber is a 'currency speculator agent' building 'expectations' of currency collapse to build a 'future play'. He wouldn't be the only one...there's lots of investment pundits and maybe big investors predicting the demise of the dollar which can be a process of establishing widespread 'expectations' for a collapse 'event' as has been the the case of generated 'expectations' in other currency collapses...
josap wrote:
GS could also be symbolic of YouTube - Gollum
Yah, that's it in a nutshell, that schizophrenia-like hedge game, where they want everything both ways and can never get enough -- driven to madness, corruption -- crime... do anything to get their people in the White House, do anything to steal vast amounts of treasure ... yah, that sums it up -- it is a metaphor!
** kicks feet in sandbox **
** throws down glove **
I gotta go home.......
ot Scroll down to the section FDIC fright: Story from a guy screwed by IndyMac for being over the FDIC limit.
hair-raising-money-tales: Personal Finance News from Yahoo! Finance
O.C. median home price up $60,000 off bottom - Lansner on Real Estate : The Orange County Register
SoCali and OC are special!
Today's action clearly FDIC kicking sand in Treasury's face. FBOP apparently had a lot of Agency preferreds. Timmy shows up in the AM with $50 million, FDIC shows up in the PM to close the doors.
dryfly, re: your comment last night that you believe for all the self-dealing & BS spewed out by the wonks & elites that they get this. They get it better than many do here.
I commend to you this little story over at naked capitalism: Bank-Favoring Censorship by Congress « naked capitalism
Those SOB's will be cheering on the orchestra as they row away in the lifeboats.
Not ot, Chuck tried to warn that guy. Sheila didn't lift a finger. Just sayin'
hair-raising-money-tales: Personal Finance News from Yahoo! Finance
Umm...the limit was $100K at the time and the person deposited $140K at IndyMac 3 weeks before it failed. Bad luck...
Makes me wonder if it was one of the high-yield CDs they started offering about that time.
Yogi,
I used to have a lot more piss and vinegar towards what's going on. I've also changed my views a bit as I have talked to people who lived through real currency collapses and wars and gd 1.0.
I've watched the inability of most people around me to make even the smallest of changes required to their financial,social or moral lives.
To sum it up I believe that we were a hairs breath from a full collapse, I've seen nothing over the last two years to indicate that Americans want to hear the truth, want to make changes that require real effort or could withstand the hardships that would arise from allowing the banking system to shut down.
I still want prosecutions and change.
I see how hard it is to make changes from within the system. I applaud Sheila bair for standing up to the mega bank interests pushed by geithner. If she left her position I can only hazard what the next FDIC head would be like.
This isn't all black and white IMO there's a lot of grey in there as well.
I'll stop rambling now. Cheers
WSJ: Federal bank regulators issue guidelines allowing banks to keep loans on their books as "performing"
Federal bank regulators issued guidelines allowing banks to keep loans on their books as "performing" even if the value of the underlying properties have fallen below the loan amount.
The volume of troubled commercial real-estate loans is skyrocketing. Regulators said that the rules were designed to encourage banks to restructure problem commercial mortgages with borrowers rather than foreclose on them. But the move has prompted criticism that regulators are simply prolonging the financial crisis by not forcing borrowers and lenders to confront, rather than delay, inevitable problems.
MLM wrote:
They will try - don't know where they can go though. BTW - when I said 'they' get it I meant congressional leaders, some at the fed, some in the administration... I think there are people there versed enough in history to know this could get real ugly if the prols really feel pain & lose hope. I do NOT think the bankers in the private sector get it - not one bit - if they did they'd be trying to find ways to camouflage the bonuses [and there are ways to do that - stock options, deferred compensation, etc.]
It is amazing how the stock market always trades down the day before a large adverse news report.
Yeah, that would make sense. It's probably why the FDIC backstop per account is now unlimited.
From my link above:
Johnson, who came last, offered the only serious critical viewpoint… After about five minutes of his testimony, Congresswoman Melissa Bean—another industry-funded committee member who chaired the hearing because Frank was absent—had heard enough. “I’m just going to ask you to wrap up because we’re running out of time,” she told Johnson.
Who the hell is Melissa Bean if she isn't a congressional leader?
Anybody well versed in history is buying land in Paraguay. The rest of them are concentrating on getting one more sip of blood out of the body politic.
The guy with the $141K in IndyMac, when the FDIC at the time only insured deposits up to $100K, was a fool. Hard to have sympathy for a fool. Nobody learns but the hard way.
*Timmy shows up in the AM with $50 million, *
Timmay Geithner is the spitting image of Eddie Haskel on Leave it to Beaver. He's as oily in his politeness to adults as he is weasely in his dealings with his peers. He's all talk and attitude, in other words, a real shyster.
It's probably why the FDIC backstop per account is now unlimited.
$250K, I believe ~
Yes, the Ben Franklin expression is: Experience keeps a dear school, but fools will learn in no other.
But I especially liked the IOU trick. Mollify the masses so there is no instant action, then let them realize the loss gradually.
Kinda makes you think...
Faber is right about the results of the financial 'crisis' in that no problems were solved but were postponed...
Then he says the dollar is going to zero.
If that's the case, somebody screwed up...
merchants of fear wrote:
If Eric plays it right that's going to be really good for his puts...
Sheila's FDIC again...
Not good enough to be better than Geithner. My beef is more with the structure of the system, than with Bair personally, but when the theater is on fire, the crime is saying "stay calmly in your seat".
Then he says the dollar is going to zero.
Yeah, and so did Voltaire, "“Paper money eventually returns to its intrinsic value ---- zero.”
from Wiki:
The FDIC guarantees the funds of all insured accounts up to US$100,000, and has declared a special advance dividend to the roughly 10,000 depositors with funds in excess of the insured amount, guaranteeing 50% of any amounts in excess of $100,000.[3] Yet, even with the pending sale of Indymac to IMB Management Holdings, an estimated 10,000 uninsured depositors of Indymac are still at a loss of over $270 million.[31][32]
~ apparently, that guy wasn't alone.
OneWest Bank - Wikipedia, the free encyclopedia
MLM wrote:
She's a drone. Sub-committee chairs are leaders in the same way sergeants are generals. Listen they are not going to let the masses run this ship - that won't happen and quite frankly it SHOULDN'T happen - that's how it gets ugly even faster. And the best way to keep a lid on is to keep a lid on it. Then manage the 'emergency'. So far I think a lot of the drones don't get it. I think the club that got the 'this thing is going down' pitch get it. They don't know what to do [or what they can get away with]... but they understand the consequences.
If they really fear FAIL then the biggest risk to them is social chaos & not just losing money - to avert that [and protect themselves from us] they then have to make sure we 'eat'... somehow... if we no eat then we eat them. Just that simple. They get that - they really do. The smart ones [the smart scumbags].
Watch Pelosi & Reid... and Frank... in the house. I do not think they are stupid. Nor Boehner. These guys understand the score. They are well educated - they read the Storming The Bastille thing. Bankers not so much - lotsa accounting, not much history.
Amazing how were pulling a japan politically and financially ourselves. Much harder to make the hard choices when you're back is against the wall.
poic wrote:
Sometimes the smartest choice is to buy time. Do you want acute disaster like early 1930s Germany or a long drawn out one like 1980s-1990s-2000s Japan?
Comparing the two - I'd take Japan.
I agree with everything you said, dryfly, except about Boehner. He seems determined to undermine everything he can.
So back when George Washington, Thomas Jefferson, and others got all riled up at the mother country, it was over pretty minor stuff. Stamps, tea, parliament not paying attention. I guess they should've just written a few letters or something./sn
Pelosi, Reid and Frank have been unopposed for too long, first posing as opposition, then posing for change. Baby, they are rich persons, too. Obama/Clintons, as well. If they "get it" why are pushing this modification nonsense (more bank welfare), which I seem to hear more from politicians than homeowners.
... got all riled up at the mother country, it was over pretty minor stuff.
taxation without representation, quartering troops in private houses. Yeah, pretty minor stuff.
barfly wrote:
He wants to undermine the democrat authority in congress but he is no dummy - he will not blow it up so bad HIS family & peers go up the chimney too. In that respect they are all the same party. The party of the elites.
There is a saying in the middle east...
That is how the elites look at us... they squabble in the pit but lookout for their own.
Point is neither party keeps power & privilege if the wheels really fall off. Neither the Dems nor the GOP. If we have real chaos BOTH lose and lose big.
I believe they understand this. They just don't know what to do about it.
rosethorn wrote:
Same was said in 1930s Germany - they did more than write letters too. Same w/ St. Petersburg Russia 1917. Doing something 'big and bold' doesn't always end up well.
dryfly wrote:
So would I, but even though superficially it looks like we're going the Japan route our debt & spending circumstances are definitely directing us towards a Weimar-like situation.
Sorry, but to me this looks like 50% FLAIL, and 50% congressional zombies hungry for more brainz. Are you seeing some effective response to the situation that I'm missing?
Take the mood the country's in now (which is being exacerbated by arrogant behavior like Rep. Bean's), add in another leg down in the economy (on the way), and you'll probably get the beginnings of your social chaos.
Based on my last conversation with my Representative, and the latest moronic email I received from one of my Senators, my conclusion is that the flames are lit and these guys are busy breaking out the fiddles. If there's intelligent life out there, I see no sign of it.
Pelosi, Reid and Frank have been unopposed for too long,
just every single day since Nov. 2006.
TJ and The Bear wrote:
I agree - we aren't going to get 'Japan' - not exactly anyway. We don't produce, save or have the restraint. As we say here in the Midwest... "It will be the same - only different"...best said with a 'Fargo' accent. Now where's the smorgasbord?
This must be made 100% clear:
It is NOT Sheila Bair's job to protect banks from bank runs.
Her job is to protect the money of depositors, even that "fool" who was $40k over the limit and believed her assurances (or silence) indicating everything was fine.
The FDIC and the SEC were not created to help banks sell their Ponzi. They were created to protect people from bank Ponzi.
For all the hand-wringing over various media blowhards and homegrown militias, I really, really doubt this country could become the breeding ground for the Fourth Reich, though.
MLM wrote:
I see nothing effective - I just believe they understand this isn't just about money anymore. Money doesn't matter - never really did - people having food, place to live - JOBS - hope - that is what matter.
And they don't want us to have those things because they are nice - they want us to have those things because we are dangerous animals if we don't have them - the kind of animals that will eat them if we are cornered.
But 'yes' they are flailing and probably scared shitless - they should be.
I cut off the snark tag accidentally. I'm not advocating revolution, but I guess I'm suggesting that for the founders the circumstances weren't doom in the sense of total economic collapse. It was a steady stream of outrages.
OK,
fatigue sets in. 
I really, really doubt this country could become the breeding ground for the Fourth Reich, though.
me either, TJ. We just don't have that kind of homogeneity.
Please pass the lutefisk ~
rosethorn wrote:
It was doom for them economically. Look at who the founding fathers were - wealthy land owners - many slave holders. The crown wanted to maintain economic control. The biggest freedom the FF worried about was their wealth. In the end the crown bungled it - could have bought them off easily [which was done later in other colonies like India]. Didn't happen.
Luckily for us the French decided it was a good idea to stick a finger in Georges eye or we'd have remained a colony and hockey would have been the national past time.
I think many of the FF showed personal bravery but the primary motivation was economic.
dryfly, I really admire your solid mid-western common sense. You never fail to strike the right chord.
TJ and The Bear wrote:
Not exactly but similar enough. Patriot was a good start...
Love to do a beer w/ ya some day. I think there is a lot of common wisdom in the commentariat.
Got a big day 'today' [Saturday] - gotta get some sleep myself.
The founders made speeches, wrote letters. Who fought on the front lines? To many of them it may have been a question of eternal indentured servitude or a better chance at their own title. Jefferson's 1800 takeover was considered completion of the revolution by some (certainly not his slaves).
"Total economic collapse" is loaded. All changes in financial/currency systems help some and hurt others. Panic is usually counterproductive, but so is extend and pretend.
dryfly wrote:
There is no freedom without economic freedom, hence the whole idea of "limited government".
It could have been an awful lot worse indeed.
Cricket could have been your national pastime...
Good for recreational RE prices tho'.
C
There is no freedom without economic freedom
sounds good on paper. Problem is, it eventually winds up being economic freedom for some. That's where government becomes necessary, to limit the excesses.
TJ and The Bear wrote:
But you can have economic freedom for some and then not extend it to most others - which is what happened [non-property holders, non-whites & all females excluded]. Took centuries a bloody war, strikes & protests to really complete the revolution... only to see shit like patriot come along and threaten to undo it all again.
Property is only ONE freedom.
In Japan, they call a buffet a "viking". Sorry, saw Japan and smorgasbord in the same post and had to drop that in there.
So the abolition of slavery, that's big government intervening by restricting the economic freedom of the property owner?
dryfly (profile) wrote (in reply to...) on Sat, 10/31/2009 - 12:40 am
Property is only ONE freedom.
If you start at freedom of thought (i.e. independent, critical thinking), eventually you can arrive at (or derive) many additional freedoms. After all, someone first had to think of "property rights".
1 currency now -yogi wrote:
Sure it was - to those who owned the property. Not sure that changes anything - it still didn't get done until a couple generations after the revolution - right? Then made real a hundred years after that... gov't dragged along kicking and screaming every inch of the way.
BTW - if this current mess gets fixed at all it will be similar - gov't owned by elites will fight it all they way. If it gives up anything it will be to save themselves from us. Sort of DeTocqueville-esque but that's the way it works here... it won't get done because they love us - its because they fear us.
The guy with the $141K in IndyMac, when the FDIC at the time only insured deposits up to $100K, was a fool. Hard to have sympathy for a fool.
The much-ignored moral hazard on the depositor side.
Again
Right on, dryfly ~
geez I'm away from the computer while I brave the 5 down into the bowels of Hell (OC) and they close 8 banks? What happens if I sleep through next Friday from exhaustion?
btw anyone down here think the H1N1 fear is getting weirder by the moment? I am missing my little cow town.
Yup. The definition of "property" and hence "economic freedom" is subject to evolution and revolution. Who eats and who works, how much and for what reward, are moral, political, economic, and legal questions always.
California to withhold a bigger chunk of paychecks
Surely this is going to blow up at some point...
California to withhold a bigger chunk of paychecks -- latimes.com
Hey dawg
did you turn down invitation to speak at this
Climate Fools Day rallies the heretics • The Register
not sure if anyone watched the clunker movie not for cash 'The International' starring Clive Owen and Naomi Watts...
most memorable lines from the movie - 'you own the debt you control everything' and 'we're slaves to debt', both spoken
by a suave industrialist from Old Europe.
here's a mash-up of my idea of good bonus material for this movie...
YouTube - Clive Owen's Controversial Bonus Material from The International' commentary: Tony Gilroy & Ephron
kiewi -
Thanks for that. Very nicely done. I especially liked:
The strongest of these is the point made by MIT's Richard Lindzen, arguably the most senior climate scientist in the world. Lindzen doesn't dispute the energy budget model, and doesn't dispute the properties of CO2. But he says that the feedbacks required for "runaway" warming are theoretical, and without feedbacks the warming is around half a degree Centigrade. The implication is that we've seen all the warming we'll ever see from CO2.
Robert will enjoy the linked article I somehow feel.
Perhaps the House really had to attend business to, hence the prepared statement getting cut short? Isn't it better to cut short that prepared statement of testimony in order for the Congress to ask questions if they are running into a time-wall?
FDIC statements has been that losses will total ~ $100B over 2009-2010. I believe they claim to be halfway there currently (this means contingent loss reserve has $50B in it). So tonight we take another $2B from the DIF and add $2B to the contingent loss reserve. It seems like the assumption that banks will stop failing in 2011 seems a big wrong; unless CRE losses will turn into a nothing-burger?
I think Congress will just bail out FDIC. To be honest, that seemed like the right thing to do instead of TARP. In fact, how did Paulsen convince all the members of Congress that TARP was such a great idea when the FDIC seems to be in a better position? Why is that question just coming to my head? Why did Congress give it all the bailout funds to one regulator? That doesn't make sense, right? Banks are in trouble; banks are failing, only Treasury can help?
I don't understand the anger towards the FDIC/OTS/OCC (see Denninger post today), quite honestly all these agencies work for Congress which has oversight authority over them. The bigger picture is that Congress can't maintain its kingdom. Let's add government involvement over healthcare and both parties continuing to pursue their ideologic agendas and we are well beyond building a country thats going to crumble under their own desire for more and bigger government. Until there's a strong pushback against this way of governing the country (Republican laissez-faire is almost just as bad) the American people can continue to get screwed.
Is there any political commentator that is actually independent and warning about this? I'm starting to get a vision of my head of a political party that instead of advancing any agenda strives to simply implement good governance according to the law we currently have as well as transparency. Every lobbyist meeting by Congress is fully disclosed as well as discussions with anyone that happen as a result of someone being a Congressman. A party whose agenda is good-governance and transparency over ideological pursuits? I'm sure thats what the American people deep down want; not the two bickering brothers. I'm no historian but I think we've been ruled by the two bickering brothers for so long (1930s, 1960s?) that people have forgotten what the government is for.
WOW, I can't go away for more than a few hours. I'm catching up....stunning. ALL of it.
YLSP: Yesterday was striking, Soros and Wilber Ross were both warning of the impending 'bloodbath' FROM LBOs and CRE losses. And then I see a bit on how the FDIC/fedgov is working out remedies in accounting to shelter those losses off balance sheet and work with creditors and not foreclose. Well they aren't foreclosing on delinquent homeowners in some sections of the country, so why should there be foreclosures in CRE?
Its instructive. If the current rules are too strident then change the rules but only liberalize them for a select segment. Its the story of the last 25 years.
Oh and if anyone missed Jon Stewart 10/29 show....it was so freaking funny! I love that guy. One of the few people who makes me laugh these days.
What he did to Jim Cramer should be vaulted away as GOLD and jewels of national importance.
You can find it here: http://www.ritholtz.com/blog/2009/10/for-fox-sake/
I didn't read that article yesterday, too busy; and now I'm tired as well... so most likely going back to bed (only up since baby was hungry).
Re: CRE Loan Workouts
This policy statement provides guidance to examiners, and financial institutions that are working with CRE borrowers who are experiencing diminished operating cash flows, depreciated collateral values, or prolonged delays in selling or renting commercial properties. It also recognizes that during these difficult economic circumstances, continued credit availability to businesses, especially small businesses, is challenging, even where borrower performance has been acceptable. This policy statement reflects the appropriate balance of prudent credit practices and meeting legitimate credit needs.
Read between the lines. Its Congressional/"political pressure" that typically subverts the "rule of law". Congress doesn't want to constrain banks that are actively working to with CRE borrowers. My understanding is if bank examiners were more harsh in how they treated these loans it would restrict lending. Again; look at it through the lens that Congress believes lending/borrowing is the blood of our economy, and if we can't borrow/lend everything will collapse. Read any Congressional testimony or hearing and you'll see the fear of businesses all around the country.
I'm pretty sure the commentariat don't agree with the basic premise; but consider it official policy of America. No one really cares about the value of stocks and bonds; its the fact that our economy is dependent on the free flow of credit; its depending on borrowing and lending.
Interesting footnote from the policy-paper: This statement replaces the Interagency Policy Statements on the Review and Classification of Commercial Real Estate Loans (November 1991) and Review and Classification of Commercial Real Estate Loans (June 1993).
Thank you my early morning pal.The CRE loan workouts are going to implode. I read something yesterday about small businesses reluctant to go to the SBA for loans. Another article revealed that small businesses that don't appear to be in distress (aka not behind on payments, etc.) fold under the radar. That was linked yesterday, I'll find it again if you want it.
Get some rest, we've got miles to go.
sucks I can't get the Daily Show that easily... the upload takes forever, so I pretty much have given up.
trying to re-do my Larry Summers mash-up... looking for some interviews he's done on TV recently,
anyone?
....
it would be nice to see Comedy Central allow you to play thru a clip and then have a re-play button like
YouTube, after all, comedy doesn't seem to work so well when it stutters (ok Simple Jack in Tropic Thunder..)
Oh so you did try here?: http://www.thedailyshow.com/
Duke: try this...
http://www.youtube.com/results?search_query=the+daily+show+with+jon+stewart+full+episodes&search_type=&aq=2&oq=The+Daily+
Looks like the 10/29 episode hasn't been uploaded to YouTube yet.
Did a search there for Larry Summers too, perhaps some are of interest to you.
http://www.youtube.com/results?search_query=larry+summers+interview&search_type=&aq=0&oq=Larry+Summers+int
very interesting read....snippet:
http://www.rgemonitor.com/us-monitor/257911/please_listen_to_the_lady
thanks greatly for all your help Nanoo-Nanoo !
the connection I'm on today actually has decent enough throughput to watch the Daily Show...
but usually, that's not the case.
here I post on YouTube but forget to search in that very location, duh!
of course the news programs don't care if they're on that service...
no shelf life for most of their programming...
....
on a side note my original parody of Jim the Realtor received a total of
7 hits in Europe. JIM needs to break out nationally, too localized even
though it's the 7th largest economy in the world, right Dawg?
I guess this means I have to change my name for them from the "Not so Fortunate 400" to the "Not so Fortunate 500".
,rads
I'm a creature of habit, and have been watching the Bair Which Project for some time now, and it's always been the same pattern as far as announcing which debtrius-laden banks were going down, so why did 9 banks close en masse, yesterday?
morning
,rade kristina no dont change it just call it the "not so fortunate 400 +"
jd do you mean when the "press" gets a hold of a closing? if so i figure that she basically has to close them down by my count thats happen 3 times, and i really hate it.
but im not awake yet working on 1st
The Chicago Trib has a picture of Geithner, Mayor Daley and Cong. Davis announcing 50 million in funding for Park National Bank probably yesterday. The bank was seized last night.
Here's the full story from the Chicago Trib:
FDIC seizes 9 banks operated by FBOP - Chicago Tribune
,rad gabyjan,
I'm thinking they are getting us ready to be able to accept a lot more bank closings under the guise of a 1 announcement fits all plan, perhaps like 25 or so per Friday...
In the spirit of full disclosure, Park has a large hedge of mint plants behind it's 1920s main office which I pick occasionally.
Per Geltner (?) the decline avg for CRE from peak '07 is 41%. But that's not a good number. The number he says is a split between distressed, down 52% or thereabouts, and healthy, down 33%. Of course, they both mean that the lenders are either seriously losing money or are just losing 8% so far of their capital investment.
Then he says, it's possible that the healthy CRE won't take a further hit; nope. The healthy owners, which mean the CRE won't be dropped into the market, are unwilling to sell "dear".
Boy, I've heard of an apologist; this guy is professor none the less. It's like listening to Schiller as the prices dropped. Nope, not happening here.
The middle ground for those two is the safe ground. The problem is that it's the stupid ground. It's easier, says Mish, to ask for forgiveness after the fact. These are off the rack poster boys of those who refuse to dare to be great. With that level of analysis, America has been doomed, not will be, but has been strangleholded by the moderates who refuse to risk being wrong, which is not even a risk in a collapsing market. This guy and Schiller both depict the ineptitude of the leadership crowd. Add Roubini, too.
The CRE will drop like a stone in 2 months, right in the midst of the Holidays. The market will have spoken, and the fear of what's next will be real and obvious.