Bits Bucket For September 13, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Lehman Death Watch.
Let’s hold a vigil and get drunk.
We have until the Japanese open on Sunday night.
Aren’t you supposed to hold the wake after the fact?
Monday morning will probably include further trashing of WaMu as well.
Who’s next after these two?
Wachovia, Merrill, AIG, Bank United, …
The list is endless.
AIG will have far greater repercussions than Merrill, Lehman, WaMU, Wachovia, Bank United combined. AIG debt is trading at 35% of par.
Yeah, agreed. They are “outside” the financial system. But they’ve been partying hearty with them derivatives.
Fed moves to take over insurance businesses too?
This is just too sad for words.
I’m not real familiar with AIG….can you share why?? Thanks.
AIG is not a bank and the insurance companies are regulated by the states. I doubt if AIG will get chow from the fed’s window and I doubt if in its current financial condition it will fail
AIG is trading at default values. If you think they are going to survive then sell a CDS on a $10MM AIG Bond receive, $1.2MM up front and $500M every year for the next 5 yrs. If they do not default then that is free money $3.7MM.
Or be a gambler and buy a $10MM AIG bond current price, $3.45MM APR to maturity 45%
“AIG may have to post more than $13 billion of collateral following a downgrade, it has said in regulatory filings….
Credit-default swap sellers demanded 12.5 percentage points upfront and 5 percentage points a year to protect AIG bonds from default for five years…”
Bloomberg
Your moneys, not mine.
It is simply amazeing to see these huge companies drop like flies.Aig was down about 5 bucks friday.I think it closes at 12 bucks a share.Hopefully you didn’t have your whole retirement there.
AIG crash, Warren Buffett to the rescue? Or FED to rescue WB?
Why would he bother?
He’ll just take over their business. He doesn’t need the carcass.
Read an interesting comment posted on the Economist website. To wit, any US corporation who has over-expanded to protect itself from the vagaries of free market capitalism via the “too big to fail, the Gov’t will protect us” mantra, are in fact, too big too protect and therefore, should be nationalized. Not saying I agree 100%, but it was an interesting opinion.
It seems like biggest Capitalist country is much worst than XUSSR… Who swallowed all those trillion $$$, who organized this big fraud, nobody talks about? Instead of using tax payers moneys, it will be better for FED to investigate where the money went, find out the crooks that orchestrated all this housing boom… People in this big investment banks were getting big bonuses last five years, is any of them going to jail ?
Agree!!
Why are the Wall Street execs (and Greenspan) not being indicted?
Before touching a single cent of taxpayers’ money, their personal assets (all of them…domestic and international, held under different names, etc.) should be seized and used to help mitigate some of the costs.
What’s the difference between an irish wedding and an irish wake?
One less drunk!
irish Mike
The execs are drinking pina coladas poolside in an undisclosed location while the mourners get bottom-shelf whiskey in Dixie cups (if they’re lucky).
Hey, this is my party so we’re drinking top-of-the-line stuff here with the money we saved in the last five years or so.
Don’t like it? Go back to Chicago, commie!
In fairness, you seem to have a somewhat complicated relationship to the deceased.
(Though I’m sure I’d rather have what you’re drinkin’.)
‘Let’s hold a vigil and get drunk.’
What a genious you are, fasty, as well as kind. And we can cry sad tears and say sentences to each other beginning with, ‘Remember when Lehman was…etc etc.’, and maybe sing a lugubrious song or two while dabbing at our weeping eyes.
BWHAHAHAHAHA!!
Maybe this guy has the right idea
South of Galveston, authorities said 67-year-old Ray Wilkinson was the only residents who didn’t evacuate from Surfside Beach, population 800. He was drunk and waving when authorities reached him on Saturday morning.
“He kinda drank his way through the night,” Mayor Larry Davison said.
Don’t worry, he will get plenty of tax dollars to fix his house and by himself some more booze.
Something tells me that ol’ Roy has been given the heave-ho by more than one HOA.
Oly, this one is for you.
Sign in a store window here:
Wish I had a camera phone. Dammit!
BWAHAHAHHAHAHAHAHHAHAHAHHAHHHHHHHHHHHHHHHHHHHH!!!
Dang FFSP,
You called it - smoke and mirrows -
http://dealbreaker.com/2008/09/gorilla_mommy_baby_dick_fuld_lehman.php
Could Dick Fuld be acting out a kind of primitively evolved instinct to hold on to the institution in which he has invested so much of himself? That might be going to far. But Ghana certainly suggests new meaning to the old nickname Gorilla.
Hey, ya just can’t make this stuff up.
Sigh,
Leigh
Another weekend “Private” FED poker party!
Paulson: “O.K., which color chips is the billion dollar ante?”
In attendance were government officials including New York Fed President Timothy Geithner, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox.
Wall Street executives in attendance included Morgan Stanley Chief Executive John Mack, Merrill Lynch & Co Chief Executive John Thain, JPMorgan Chase & Co CEO Jamie Dimon, Goldman Sachs Group CEO Lloyd Blankfein, Citigroup Inc head Vikram Pandit and representatives from the Royal Bank of Scotland Group PLC and Bank of New York Mellon Corp, among others, the Wall Street Journal reported.
Bank of America Corp was represented, the New York Times reported.
Fed holds crisis talks as Lehman hunts for buyer:
http://www.reuters.com/article/newsOne/idUSN0927996520080913
It is obviously not just Lehman under discussion.
Frankly, Bank of America would be silly to buy Lehman when they may be able to acquire Merrill for the same price. Frankly I do not envision BofA as a player, they have enough problems of their own making.
The questions asked will range from Can we get the Japanese (Mitsubishi or Nomura) to buy Lehman to Can there be an orderly liquidation of Lehman’s positions.
Hoz,
Do you think we will actually get to see what happens when one of these suckers goes down without a bailout and without getting purchased? The real melt down deal with no one to take over as counterparty to their CDS’s and any other financial detivatives? I know there is a huge risk to the system involved, but I would almost like to see it. Just to know what happens, and not have to endlessly accept the blather of people who claim it will eliminate gravity, kill Santa Claus and turn the Nile’s waters to blood.
And if it will happen which one? By which, I guess I mean which of these jokers can fail and not hurt China and Saudi Arabia too much?
Polly,
I do not wish to see a meltdown. If one thinks through the ramifications of a financial collapse, the companies that fold would be about 30 -35 % of all US companies public and private. Interest rates would go into the double digits, Treasuries would yield 14% again. No foreign countries would wish to buy US debt with no possible means of paying it back.
I do not care what your job currently is, a consultant or an engineer. You are out of work, (Unless you are a bartender).
If the US engineers a 50% drop in the value of the dollar to keep the financial system open, it is well worth it. The current US strategy appears to be devalue the dollar by another 15% over the next 3 years.
“…The point can be put in another way. Four vicious cycles are simultaneously under way: falling asset prices are forcing levered holders to sell, driving prices further down; losses at financial institutions are reducing their ability to finance investment, which in turn reduces asset values, causing further losses; the weakness of the financial system is reducing growth, which in turn weakens the financial system; and falling output is hitting employment, which in turn leads to reduced demand for output.
Without active efforts to interfere with these mechanisms, there can be no basis for confidence that the American economy will recover even in the medium term….”
Mr. Lawrence Summers
Really? Even if it was only one of them? Because one would be that damaging? Or because everyone would assume that if it happened to one, it would necessarily happen to all (or a lot of) the others?
You don’t understand how many derivatives have been written out on top of every single one of these products.
And remember these things are purely zero-sum. If I win, you must lose, and if you can’t pay up, then I might lose too.
It’s KA-BOOM time!!!
“Treasuries would yield 14% again. No foreign countries would wish to buy US debt with no possible means of paying it back.
Wouldn’t the natural arbitrage be to buy Treasuries at 14% then wait for double-digit mortgage rates to drop U.S. real estate prices by another 50% before trading Treasuries for real estate? I don’t understand why you think foreign investors would not be interested, given they are currently willing to hold U.S. debt at yields below 6%?
The single largest buyers of US debt is the SSA, that is going to go bye, bye in a few years. This captive buyer keeps interest rates low.
Foreign governments are looking for a better return than the crap from the government. Most foreign wealth funds have lost moneys buying US treasuries and having their currency appreciate against the dollar. Foreign governments are not buying as much US Gov debt as before.
Current buying of gov debt is ‘flight to panic’ by investment funds. An unsustainable investment. Foreign investors appeared to buy about half the US offering and a lot less of the agency debt.
In the next 4 months the US will auction at least $500 B in treasury bonds and notes. Agency notes to be auctioned will be ~450 B. If the US cannot get foreign investors to buy agency notes, the only buyer will be the US Treasury. At which point they will need to auction more US Treasury notes to pay for the agency notes purchased.
China likes to buy 1 & 2 yr notes so that is what the government sells. China has been rolling over about 95% of these notes as they mature. China is diversifying, they are not stupid.
A giant ponzi scheme unraveling. That is why the US Treasury bond Credit Default Swaps became more expensive. Not fear that the US is going to default,rather fear of a swamp of US debt coming on the market with few buyers.
Yes, as a matter of fact I do. About 62 trillion the last time I checked. Maybe more now. I just don’t know how much each particular investment bank is on the hook for as counter party (on the wrong side). I wonder whether any of the banks are small enough players in that world (whether through bad marketing or bad recruiting or whatever) but holding some other kind of toxic waste that no one would buy ‘em and the Treasury wouldn’t use up any good will to force someone to take them.
Former Lehman employees are worried they may become the no-bailout test case. UNFAIR!!!!
ANALYSIS
All crises not created equal, Lehman learns
Why no bailout here, when others got one?
By Edmund L. Andrews and Jenny Anderson
NEW YORK TIMES NEWS SERVICE
September 13, 2008
WASHINGTON – Six months ago, the Federal Reserve lent JPMorgan Chase & Co. $29 billion to engineer its shotgun takeover of Bear Stearns, the venerable but deeply troubled Wall Street firm.
(Advertisement Use Your IRA Funds to Buy Real Estate Now)
Less than one week ago, the Treasury pledged up to $200 billion to rescue Fannie Mae and Freddie Mac, the giant mortgage finance companies.
But as policymakers tried to engineer an eerily similar takeover and rescue for Lehman Brothers, Treasury and Fed officials told the company and its potential suitors yesterday that the government had no plans to put taxpayer money on the line.
What changed?
Probably a political calculation. Despite the US population still being mostly sated by its bread and circuses, saving another private, profit-making company with taxpayer dollars might not go over so well.
The corporate executives engineer corrupt deals, sucking money out of vaccuum, and paying themselves prince’s ransoms with it. The vaccuums moves through the financial system. Finally, the vaccuums start reaching the edge of the system. The politicians make the taxpayer pick up the tab and fill the vacuums with actual money, under threats of financial apocalypse otherwise.
That can’t make most voters too happy.
That can’t make most voters too happy.
—————————
Unfortunately, you’re assuming the voters are smart!
If the sheeple think the govt intervention will “keep their house prices up” then they likely don’t care what happens to public moneys (heck, it’ll be paid by someone else, somewhere down the line, right?).
If nothing else, this bubble — and the public’s response to it — has proven to me that Americans (and others?) are painfully stupid.
Question will be can we silence the egotistical hot head Fuld who sent the Koreans packing with his childish antics.
Someone needs to lock him in the closet!
Leigh
Dick Fuld: Still The Gorilla?
STILL???
Ya just can’t make this stuff up! (?)
http://dealbreaker.com/2008/09/gorilla_mommy_baby_dick_fuld_lehman.php
Snip
________
From an evolutionary standpoint, not abandoning a stunned baby makes sense. Remaining open to the possibility that all that was invested in bringing the child to term, in birthing and in raising the child makes sense. Gorillas, like humans, are characterized in part by the ability to look beyond the immediate, to imagine possibilities that are not yet real.
But this instinct to hold onto objects in which we have made enormous investments can go too far. After all, a dead baby is a sunk cost. It cannot actually be recovered. Some mother gorillas have been known to hold on to the corpse of their offspring even as the body rots. They’d obviously be wiser to bury, or just discard, the dead.
Could Dick Fuld be acting out a kind of primitively evolved instinct to hold on to the institution in which he has invested so much of himself? That might be going to far. But Ghana certainly suggests new meaning to the old nickname Gorilla.
Ya just can’t make this stuff up.
Reaching for aspirin…
Leigh
I’ve seen videos of primates who carried around their stillborn babies.
Absolutely devastating to watch.
When hungry rabid Hyena devour carcass’, there is no “orderly” to it.
The dominant scavengers of the New Era will not, frankly, settle for anything less than bone cracking satiation.
think, “bultungin”
I’m sure when the powers weigh the liabilities of a failing Company they take into consideration who the losers and who the winners will be . There is no regard for taxpayers being losers however . All this BS that taxpayers will make money on the deal in the final analysis to justify the loss to taxpayers in order to make the deal . What ever happen to the government just making loans rather than outright unrecoverable bail-outs .
It’s funny how some Wall Street talking heads were against help to the big three car-makers and the talking heads complained about how wrong it was to bail-out the automakers because they should not be rewarded for their bad car-making decisions . Yet, these same talking heads justify the bail-outs of the lenders and the Wall Street financial firms because they make their living selling financial products and investments .
I thought BofA was still digesting Countrywide. WHere will they come up with the dough?
I read the suggestion somewhere that Lehman, WAMU and AIG are up for crash or rescue this monday. If they too are rescued by the FED/Treasury I guess they are the last ones, before the dollar goes into a crash dive.
That’s just it — after enough bail for too-big-to-fail financial entities on Wall Street, the dollar will fail.
Won’t that be good for gold?
There is a surprisingly realistic story about the current housing situation over at the LA Times
It features a San Diego economist who is buying a house, but goes on to paint a realistic bleak picture.
As he completely and spectacularly missed the incipient downturn, it is a bit curious that Ratcliff is so certain San Diego housing is near a bottom. Our refutation of this December 2005 Anderson School forecast is part of this blog’s archives, for anyone who cares to check.
I was on a campout last night with a former CFO of a San Diego bank. His view is much closer to mine than Ratcliff’s — no capitulation yet, foreclosure tsunami not yet crested, Alt-A and prime reset peaks in 2010, fire sales to begin soon thereafter, etc etc etc.
But I am sure the academic economist is right and we are not.
Archive for Wednesday, December 07, 2005
Hot Housing Market Still ‘Cruising’
By Annette Haddad
December 07, 2005 in print edition C-1
UCLA Anderson Forecast, among the first economic prognosticators to proclaim that California’s housing boom was peaking, is now singing a slightly different tune.
The housing boom isn’t quite over yet, it says.
Although signs of slowing are starting to crop up in certain regions, “there is lack of convincing evidence of a slowdown in the big picture,” according to UCLA’s quarterly forecast on California’s economy to be released today.
Southern California “is one part of the state that’s got some zip in it,” said Ryan Ratcliff, an economist and author of the latest forecast. “We’re not accelerating but we are still cruising along at 80 to 90 miles an hour.”
However, the state’s housing market will probably begin to slow over the next two years. That would lead to a loss of 2% of the jobs in construction and other real estate occupations and force Californians who have tapped into their homes’ equity to rein in spending, Ratcliff said.
Such a scenario points to “anemic” growth for the state’s economy in 2006-07, but not a full-blown recession, he said.
Ratcliff’s view contrasts with previous UCLA forecasts that pointed to a possible real estate-led recession. With so much of the state’s economy dependent on the housing sector, they argued, signs of deceleration were cause for concern.
“There is a surprisingly realistic story about the current housing situation over at the LA Times”
One of the best yet from the LA Times!
Here’s a little thing that slipped out of the press overnight:
‘Wall Street regulators ignored clear signs of the dangers posed by “ridiculous” mortgage innovations and the proliferation of complex securities that led to the current financial unrest, former Bank of Canada governor David Dodge said.”
“In an interview published Friday, Dodge said former Federal Reserve chairman Alan Greenspan had warned in private that the overheated U.S. housing market could lead to disaster. But regulators failed to act.”
“It was very hard to get reform because there was the perception that if you make mortgages more accessible, you are helping homeowners,” Dodge said. “But what you are really doing is driving up home prices.”
What regulators? The SEC? And didn’t the Fed have that power all along and actually exercised it recently?
IMO, what is going on is a history re-write. But some of us have long memories. So too bad Greenspan, you’re on the hook for this one.
Regulation X has been on the books forever.
Here’s a link.
The problem was ideological not that the regulation was not present. I call BS.
“Greenspan warned in private…”
Thanks, Greenie. Thanks for nothing. You could have gone public before the whole financial system was mangled.
Yes, it’s going to be interesting to watch these jokers attempt to manipulate what goes in the history books in an effort to protect their legacies. The editorial sections of newspapers will be full of finger-pointing, but no mea culpas. I’m going to have to find something else to read in the morning to avoid BS overload.
“Greenspan warned in private…”
He could have said something in public then and it would have been widely heard. He did nothing and said nothing, except things that would be financially ruinous to millions. The damage is done. I don’t care about what he supposedly said in private. He can rot.
And, it turns out, ditto for student loans. Looks like you are helping more people go to college. And you do. But you also let the colleges raise the cost of attending until it eats up every penny the students can borrow, whether they can pay it back or not. Ditto for credit cards. Ditto for car loans. Used to be retricted to rent-to-own places and middle class people at least had some idea that they were a rip-off and to be avoided. So the poor were taken to the cleaners, but their suffering couldn’t derail the economy because they didn’t spend enough to count. Now the solid middle class and even the upper middle class are involved and everyone gets to suffer. At least under Ronnie it was the uber rich who were partying and the rest of us were only supposed to participate as observers, not by jumping in the shallow end of the pool head first.
Welcome to the US economy: a very strange combination of unintended consequences, the tragedy of the commons and the creativity of the people who design executive compensation packages.
Damn, I’m gloomy today.
Polly here is a cracker for you. You love cracker don’t you Polly?
Cracker is good, but the Camper Van Beethoven years, aka: Cigarettes and Carrot Juice is the really good stufff…
Our Beloved Revolutionary Sweetheart, simply superb.
and the original: Telephone Free Landslide Victory, from 1985 which bosts the timless tune, “Mao Reminisces About His Days In Southern China”
never forget: Take the Skinheads Bowling…thats the one that makes me think of Stammerin Hank.
I was/am a big Camper fan myself.
When I listen to them now, they remind me of the Reagan years — not in a bad way, in a Thank God Not Everyone Is Wearing Pastel Polo Shirts With The Collars Turned Up kind of way.
In the summer of 1988, Eye of Fatima was the number one song on KROQ (LA,CA) and then I went to grad school in Davis and no one even heard of them. I looooved Camper.
No, I don’t want a f—ing cracker. I want a vacation. I haven’t been “off” for more than 4 days in a row (and by that I mean Thurday to Sunday, Friday to Monday or Saturday to Tuesday) for over a year. I have to get through one more week and do my part to finish one more huge improtant report (and a few other smaller things) and then will be gone for two weeks, some away, some “staycation.” I am looking forward to it, but I am tired. It is too much and too long. I am not going to let this happen again.
I feel for you Polly.
I remember working those hours and because I’m obsessive, I landed in the ER a few times, hooked up to liquid valium to get the knots out of my neck and shoulders.
Be good to yourself and try to take breaks.
Here’s some sparkly shiny jellybeans.
Best,
Leigh
Jelly Beans! Yay! I always liked jelly bellies. Tangerine was a favorite. Also chocolate pudding, toasted marshmallow and buttered popcorn. Not all together. pudding and marshmallow together, but not the other ones.
I’m not likely to end up in the hospital over this. It is the government after all. There is a level of civility that didn’t happen in NY law firms. The partners yelled, sometimes a lot. I heard about firms where some of them threw things. I don’t get yelled at.
But I still can’t get the hang of planning to be out when I know we are going to be underwater with work. At the law firms, if you had planned to be out, but they needed you, they cancelled your vacation, flew you back and reimbursed you for what you already spent on the vacation. In the government there is no money for reimbursing you and we have a contract that means once my boss approves a vacation, he really can’t take it back. All this despite the fact that my boss has almost no control over what I do on a day to day basis since most of my work is on teams that report to people above his head. He is approving vacation that his manager’s manager’s manager and her manager have to live with, even though he doesn’t know what they want me to do and when it has to be done. So I have to be the responsible one and not ask to take it when I know it is a bad idea. It has been a bad idea for pretty much all of this year.
Also, they don’t pay me enough to put me in the hospital over this.
Polly,
Just wait until when and if economicus ignorami McSame and McPalin get elected, and start preaching the need to cut govt jobs to increase efficiency. Then you will really have reason to grit your teeth!
If your gloomy today, wait until Tuesday.
Tuesday? Not Monday?
Monday panic, Tuesday more gloom.
Ah, yes. Thank you for clearing that up.
I’ve been crying like it’s 9/11 today. Not really, but any tears are weird. It’s more like weeping.
I have ways to cheer up, but the bad news to come is still looming out there.
I am glad to read you guys are gloomy too, because I am feeling so lost.
Who wants a peppermint?
Ouro — Take heart, it ain’t bad! The sun is shining, surfers are riding the waves, and troubles on Wall Street are thousands of miles away from San Diego.
Stultum est timere quod vitare non potes. Timendi causa est nescire. Una salus victis nullam sperare salutem.
“Ante, Videbantur mi omnes curae procul ab me,
Sed fore nunc illas arbitror ad me diu
Hesternae credo; Subito, stans me super umbra,
non vix sum cuius dimidium viri eram,
nescio cur meae erat discedere puellae opus; affert
nil, dicens hebetem, nunc cupio veta ea
ante, ardor facilis tam erat aequus ludere ludus
nunc opus est latebrae; tam subito veta erant.”
Paul McCartney and John Lennon
Translation Hoz?
PB why does it feel like wall st is messing with my assets?
Actually, I feel better now and Im going to find a surfer.
It is foolish to fear that which you cannot avoid. Ignorance is the cause of fear. The one safety for the vanquished is to abandon hope of safety, knowing there is no hope can give one the courage to fight and win.
“Yesterday all my trouble seemed so far away
Now it looks as though they’re here to stay
Oh I believe in yesterday
Suddenly I’m not half the man I used to be
There’s a shadow hanging over me
Oh yesterday came suddenly
Why she had to go I don’t know
She wouldn’t say
I said something wrong, now I long for yesterday
Yesterday, love was such an easy game to play
Now I need a place to hide away
Oh I believe in yesterday”
Lennon and McCartney
Republicans in power for way, way too long.
two-partyone-party system in power for way, way too long.“IMO, what is going on is a history re-write. But some of us have long memories.”
Thanks, Ben - my memories go back to 1951,
as I am 57.
Right out of college I started working on Wall Street; stocks, bonds, commodities.
I grew up 60 miles northwest of there, on a dairy farm in Orange County.
The opportunity to work in the money center of the world (so far as we knew it) was a fantastic opportunity for me.
Got to do really fascinating stuff like:
Ride in a helicopter over New Jersey meadowlands (swamp) as part of due diligence on revenue Bond Offering for Giants Stadium.
Meet Abe Beame, Ed Koch, (mayors of NYC), Nelson Rockefeller, Brendan Carey(govs of NY),
Michael Eisner, Herb Kelleher, Jack Welch, Jimmy Cayne, Ace Greenberg, and hundreds of other movers and shakers in their day.
Haul cardboard boxes full of 100oz silver bars
on a hand dolly from the WTC down to the Chase Manhattan vault. Unarmed.
Have the Federal Reserve System explained to me. “Don’t fight the Fed” was a key to survival
when I was there. Remember when you go to a meeting where what the Fed wants to do is made clear, as they say, “Just DO It!”.
They take care of their own. They rewrite history through the more than willing MSM.
Greenie will be remembered in the media as a financial wizard. The widespread poverty in this country which you will see in the next 10 years will be conveniently related to the cost of our combatting terrorism and protecting our freedoms, not to the Great Mortgage Meltdown engineered by Greenie and the Fed.
“Greenie will be remembered in the media as a financial wizard.”
More like the Wizard of Oz.
I am hoping that the electronic record will make it different this time. With all of the documentation outside of the mass media in this cycle (thanks to the Internet), there is a chance that the actual record can be preserved.
Oh, wait. What was I thinking. I forgot that most people get their education from TV. J6P is only a few terror alerts away from forgetting why this happened and asking for more.
I agree Ben but I still believe it permeated from the top (Bush)…Keep the Indians fat and drunk on cash so the Chief’s can do what they want….And they did…Look at the states in the Union that are still prospering even in this debacle..…..Texas…N.C…..Oil & Military….
Ben, I apologize for taking up bandwith here, but my sis emailed me this rant as-is, said it was from Seeking Alpha:
“Mr. Greenspan, you have been the individual most responsible for the current crisis; a crisis which commenced only a few years after you tried to minimize the dotcom collapse, which of course you also created. By flooding the banks with ridiculously low interest rates you thought this Ponzi scheme economy could run on worthless money forever. But when you saw the end was coming, you quietly made your exit.
Your tenure as Fed Chairman will go down in history as the most destructive to any developed nation in history, costing Americans over $20 trillion for both bubble implosions combined. Yet, you remain in denial about your role in these catastrophes. Instead, you point fingers. To make matters worse, you have taken a position with Paulson & Co., the hedge fund that made $13 billion shorting sub-prime debt…debt that you were responsible for creating. That is a slap in the face to all Americans. Have you no conscience?
Perhaps the most disgraceful and cowardly act of your tenure was your timely exit just before the apocalypse began, leaving Bernanke to clean up your mess. Now you continue to act as if everyone would be anxious to hear your Monday morning quarterbacking. You actually have the audacity to propose government regulations for bailouts? Without your irresponsible monetary policy and disregard for regulation of banks, none of this would have happened.
Are you saying we should expect more bailouts for decades to come? Perhaps you are admitting the Fed’s boom-bust policies make bailouts an inevitable reality. If so, and I truly believe that is the case, perhaps we should focus on restructuring the Federal Reserve. Regardless, I do not care what you are saying. We don’t need advice from those who created this mess. That would be similar to the police hiring a thief as a consultant for advice on how to safeguard the same homes he burglarized. Where was your advice when you were Fed Chairman?
Let me be quite clear. You have been a complete disaster for everyone in America other than your banking cartel friends. If you want to offer your assistance, try responding to Professor Auerbach’s inquiries as to the validity of your Ph.D thesis. Mr. Greenspan, the next time you speak, you need to come clean. Otherwise, you need to sit down and shut up. No one cares to hear what you have to say so take your blood money and kindly disappear from the public eye.
As for MSNBC and other media networks that continue to field Greenspan’s comments, you guys need to get a reality check. The American people are sick and tired of you giving airtime to liars, losers, clowns and crooks. And you are just as guilty as these villains because you have effectively partnered with Washington and Wall Street to hide the truth from the people.
As for the victims of this fraud and deceit, as the saying goes, “Fool me once, shame on you; fool me twice, shame on me.” Many of you were fooled by the dotcom charade. And now you’ve been fooled by the same crooks about the real estate crisis. Shame on you for not learning your lesson. Will investors finally learn their lesson from the current mess? It’s up to the people to take control of things. And that means shutting down the media propaganda.
To all of you out there who may have lost money in the dotcom collapse, the current banking or real estate crisis, or are struggling to deal with the inflation created by Bernanke’s response to Greenspan’s destructive tenure, I urge you to write in and call these networks and demand they stop giving airtime to these crooks and liars. Tell them you aren’t going to watch trash TV anymore. Tell them you plan to turn the channel and let the Nielson ratings hit them where it hurts most – in the pocket.”
“You have been a complete disaster for everyone in America other than your banking cartel friends.”
BINGO. Next question- Who runs the banking cartel. (rhetoric)
And ex-FEMA Director Michael Brown (”Heckuva job, Brownie”) was on FAUX News this morning evaluating the response to the current hurricane.
If our useless media could resurrect the captain of the Titanic, they’d let him host a show called “Navigating Troubled Waters.”
Good Post . Greenspan will justify his bad decisions for ever more ,just like all the game players will in this big drama playing out right in front of our eyes .The worst excuse I heard from a Banker for making risky loans was that
everyone else was doing it .
There were so many forces keeping the fake real estate market going ,but Greenspan had the power to raise interest rates to even 10% to throw a much needed water on the
mania .
Some of the game players in this housing boom/bust drama are really just crooks, some were bribed , and others were just dumb . It’s amazing that no objections to the housing boom were coming up by any of the powers that could of stopped it . None of the realtors were whistle-blowers on the known bad acts of their fellow sales people or loan crooks . Title companies and escrow companies went along with it and the main stream media even was a cheerleader for it . Congress and the Senate were rah rah and voted accordingly .It’s a black swan event to have such a destructive fake fraudulent real estate market of rising prices be viewed as a good thing where no viable force wanted to stop it or challenge it ,(except someone like Ben on this Blog ).The housing boom was good for business at the time and it created wealth and jobs and people spending equity ,but it was a fake economy based on debt by people who could not afford it ,using real estate to create that fake buying power .Creative financing was for the purpose of leverage ,not help
with affordable housing . The who idea was for real estate to go up forever and cover the tab of spending and wealth creation . Gods knows Americans were not getting richer by their actual jobs . Corporate America wanting their cake and be able to eat it also . What are the Corporations going to do when Americans have no money to buy their products ?
What else could we do after most of the manufacturing jobs left the country. Now that we cannot build 2 million houses a year what are we going to do?
What we can do is elect Obama as president he will invest In A Clean Energy Economy And Create 5 Million New Green Jobs: Obama will invest $150 billion over 10 years to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial scale renewable energy, invest in low emissions coal plants, and begin transition to a new digital electricity grid. The plan will also invest in America’s highly-skilled manufacturing workforce and manufacturing centers to ensure that American workers have the skills and tools they need to pioneer the first wave of green technologies that will be in high demand throughout the world.
That just might get the country back on its feet!
these US gameplayers are just not very good at their job. They should have watched the Dutch who have a RE market that has been going up for more than 20 years now, and with far higher gains and even higher debt load than in the US. Prices are still rising and nobody is worried. Apparently the Dutch kleptocrats did learn something from tulipmania ;-(
HAHA You have to be kidding…….i was told by a lawyer on Wednesday i am one of the smartest people he’s interviewed in years…….most people cant do simple math fractions compound interest, or heck even spelling……
highly skilled…for stocking shelves maybe……
Pssst if you know of any employers that hires smart people,in nyc… i will ..i dunno dj your wedding for free
—————————————————
America’s highly-skilled manufacturing workforce
DJ, hit me at x110y110 at g mail
I have friends at Cravath, Skadden and MoFo. I can’t promise anything.
Waman ,I’m all for your suggestions because jobs directed toward needed products is the way out .Do all it takes to
bring back production and the manufacturing base to America .
Isn’t everyone getting sick of that cheap toxic junk we get
from foreign producers like China anyway ?
What it would take politically for a real cure to take place would be fought by Big Business tooth and nails ,as well as other countries . The necessary new lawmaking to make this change to “Going Back to the Old America ” would be shocking given the current state of affairs . I would rather see USA plants close in other countries ,or bought by the other countries ,and not one more industry closed down locally here in America . I’m all for Countries producing for their own people for a change .I really don’t mind government helping with some start up costs for industries that are needed now either to help with the change .
Only if all the Countries that manufacture goods play by the same rules and employment standards would this experiment with this World labor force of worked . I have noticed that
the color in the dye with a lot of those foreign products suck and I have 2 pots outside that the paint is already falling off them within six months . This faulty logic whereby we uplift the world by slave labor to sell to the rich Americans,while the foreign cultures don’t really get enough to get uplifted to American standards is a false logic .Having a world labor force was a exercise in creating a monopoly that is only good for the bottom line of the Corporations .
America has more than enough houses . How much of a economy should be directed toward the housing industry ? Just enough to meet the needs of housing for real people living in those units . The mania produced more than the real requirement for housing ,thanks to the flippers and short term investors and Big Business using real estate to create
wealth . America needs to crank up a new business model other than real estate or bubbles of false value on any asset
they try to peddle . American has to comes to term with what the real value of “things” are and what percentage of ones income should go to those “things”.
Muggy
i did …or email me at my youtube page
“Liars, losers, clowns and crooks” says it all
Thanks for sharing this great post. I recommend reading it slowly so you can hear it and feel it
‘Wall Street regulators…”
What Wall Street regulators?
An update on my parents’ house (for sale since July). They started getting more traffic through. That happened (coincidentally or not) after the FNM FRE annoucements. No offers yet. And what’s interesting is that most of the people looking are multi-generational families. The house is listed as a 5 BR, but I think that’s deceptive because it’s a 4 BR colonial with a mother-in-law apartment attached to the garage (bedroom # 5). So I’m wondering if there’s some disappointment when people come expecting 5 BRs in the main house.
Originally my parents didn’t want to settle until January after their new retirement bungalow was built. However, that new construction date has been pushed back until possibly June. Folks do not want to rent in between. Will be interesting to see what happens should they get an offer any time soon. My mom said if they get full asking, they’ll pack up and rent somewhere. But only for full asking price.
Stay tuned!
Stay tuned for what? For the market to drift away from their price downwards while they “hope”?
We’ve seen enough of that around here. Have yet to hear a “happy ending”.
Hey, I’m not expecting a happy ending. I’m the cynical daughter. First off, I told them I think they’re listing too high. Second, I told them to pull it off the market now if they won’t be moving until June and don’t want to rent in between. What’s the point? But they don’t listen to me.
Anyway, at the end of the day they could take way less than asking price and still walk away with a huge amount of wealth. They owe nothing on it. Haven’t for years. Bought it in late 70s for $75K. Listed at $450K. New home costing $275K. Lots of wiggle room once reality sets in with them.
Even losing $10K is not a “happy” ending but I’m probably preaching to the choir.
“Even losing $10K is not a “happy” ending…”
Cost a good friend 12X that settling his divorce; worth every penny, he said!
Eastcoaster, I feel for you. I have personally spoken with half a dozen people who own their house free and clear and they wind up looking at me like I am insane when I explain what is coming, and advise them to drop their price by 50K, just to get out from in front of the wave.
You can see a small glimmer in their eyes that they understand the logic of getting something now, instead of a lot less later, but then you see the lizard mind overpower thought and opt for the pack of flies just out of reach. I have seen that ugly look on too many faces to call it anything other than what it is — salacious greed.
I know a guy who just sold his house for 350K, that was maybe worth 425K at peak, and now that the money [about 100K] is in the bank and he traded for a rental at 40% of his previous carry costs, he is one of the happiest person I have seen in a long time. I was one of the people encouraging him to run with the money when he first got the offer, and I know I helped stiffen his resolve to go through with it.
The buyers, on the other hand, think they ’stole’ it from him, and couldn’t wait to close. I figure they overpaid by about 50K minimum.
Your parents should drop that price to 375K, TODAY, maybe pay some closing costs to sweeten it up and be happy to have cash in the bank and a free house when it’s all done.
Maybe we could organize an HBB intervention team, led by William Shatner.
My boss told me that he sold his house very recently, though I’m sure they haven’t had the closing. They want to get rid of the bother of the house and will buy a condo. I have warned him about the dangers of condos inherent in a time when most of the other owners overpaid, but I don’t think they are going to rent first and buy later. There is only so much you can say.
Sounds like they did price it well - solidly under a similar place in the area that hasn’t sold yet and same as a price wisher who is trying to unload a place that is half the size.
Never tell your bosses stuff like this.
They will resent you when you are (inevitably) right.
We have a very strange but very workable relationship. He is honest enough to remember that I told him housing prices were going to crash and that I was right (his neighborhood has adjusted a little, but is still very high and they have owned since before it was considered a cool area). He has even commented on how right I was several times. I’m not sure how well he remembers telling me that I should buy very soon about 2-2 1/2 years ago.
I haven’t had a boss I could be this honest with since before law school.
There is still plenty I keep to myself.
Talking about real estate is becoming like talking about religion and politics.
Most people who recently bought don’t want to hear they overpaid; people who bought before the bubble want to continue to believe they are sitting on a gold mine.
This the way it felt when I was a teenager.
We were all against the government and the war.
We were scared of the Russians and listened to records.
When you guys say our children will have to pay for it, does it mean that services will cost so much more?
Will we be like Germany with a high income tax?
If you add up all the taxes you pay, I bet you have a higher tax rate than the average German. Same for my taxes. The U.S. is more socialist than the supposed socialist nations of many European countries and that probably includes France.
Within two years I expect my marginal tax rate to be as follows: 33% AMT, 15% FICA (employer and employee or both for self employment income), 14% New York state and local income tax, extra 3% for the second local income tax on self employment income. That’s 65%, up from 56% today (28%, 15%, 10%, 3%).
Unless you spend the money, in which case the 9.5% sales tax (up from 8.75% today) kicks in, bringing to total to 74.5%. Earn an extra $1,000, spend an extra $260 or so.
My situation — I’m still subject to FICA on all my income but also under the AMT because my spouse earns more — is not unusual in the New York area.
Did I mention that retirement income is exempt from state and local income taxes in New York?
Every so often, we look into moving from Chicago and every time we do that I look into the tax rates in places that we consider. It totally amazes me how high the state/local tax rates are in many areas. We’ve got a 10.25% sales tax but if you aren’t a huge consumer then it’s not that big of a deal.
This place is corrupt as hell, but with a flat income rate of 3% it makes me wonder about New York, California, etc. Corrupt AND incompetent AND wasteful?
I guess you never looked at Washington State. No income tax and a sales tax of 8.3%.
It’s as Brian says — if you don’t own property of any sort, or spend much money, Illinois is very cheap tax-wise.
Don’t buy a house or own a house in the Land of Lincoln. You’ll get reamed.
The U.S. is more socialist than the supposed socialist nations of many European countries and that probably includes France.
If that’s true (I seriously doubt it, but that’s a whole other ball o’ wax), we certainly haven’t been very efficient with our expenditures, have we?
A war that is not in the budget will do that for you.
Welfare expenditures were doing that long before the war showed up.
I suppose no-bid
profiteeringcontracts for Dicky Boy’s friends don’t help, either.Your kidding about the welfare, right? I seriously doubt that welfare has ever cost us 10 billion a month!
Hey Blano did you mean corporate welfare? You know like the billions we give to the oil and gas folks so they can raise gasoline to over $5 a gallon when a Category 2 comes through the area.
No, I meant the billions and billions of money transferred by the gubmint to able bodied welfare types that has been going on since the 60’s thru all kinds of administrations.
But I’m sure it’s W’s fault anyways….he gets blamed for everything else.
Thank you for acknowledging the GOP contract on amurrica’s welfare reform is a failure.
Minor fraction, blano. The wars we have fought, the monies that are lost daily, in the past 8 yrs outsize your
ideas of what ‘welfares’ have cost.
By billions, nay trillions.
WA man, last year the government spent 209 billion on Medicaid, $324 on unemployment and direct welfare. Together that’s almost $50 billion a month, and doesn’t include social securty and medicare.
You know as well as I do welfare reform wasn’t allowed to go as far as it should have………that’s the only “failure” here. Thank your Dem pals for that.
I for one think 10 billion a month hunting humans who want us all killed just because of where we happened to be born is a most worthwhile endeavor.
Much better than turning the monies over to able bodied welfare rats who could be actually working for it.
The gop ran the congressional table from 1994-2006 so the democratic boogeymen have little to do with its failure. It’s like your continued blaming of HobGoblin Pelosi for the housing fraud. When you’re in a hole you stop digging. You’re in a hole…. again.
Blano you have had way too much Kool-aid. Saddam Hussein was not responsible for 9/11. Also there were no weapons of mass destruction! I guess everyone knows that except you.
Maybe some would say that medicare and unemployment compensation is welfare, however this caring person is happy to pay taxes to help others in these ways.
Dealing with GOP think has been a history lesson. I now understand what Galileo was up against with the Flat Earthers of his day.
“I for one think 10 billion a month hunting humans who want us all killed just because of where we happened to be born is a most worthwhile endeavor.”
Where are you, Blano, Tel Aviv?
Since you are stumping for the war are your offspring in the military?
The “War on Poverty” program, started by Lyndon Baines Johnson, is still going strong, so it’s unsuccessful. An estimated $1.5 trillion dollars has been spent on various U.S. welfare programs, which includes subsidized housing, food stamps, jobs training, health care, and the like.
This war in Iraq has cost us hundreds of billions of dollars. Not quite a $trillion - yet.
When expendituries for one are less than expenditures for another, it does not justify either program.
Let’s destroy socialism. Now.
How can spending money on our own countrymen over the last 40 years be spreadsheet against a 5 year invasion & occupation of a foreign country that DID NOT ATTACK US ON 9/11? And we can debate whether people “choose” poverty, but there is no debate that this was a war of choice.
Yeah. The rest of the world with high tax rates at least gets universal health care for it, so they don’t have to worry about school kids giving each other measles.
Don’t forget all that money going to Alaska to fund crab research.
So when the average US sales tax rate hits the average European VAT rate, we’ll be paying more. We’re already looking at 9.5% soon in some parts of California.
The costs of empire are pretty staggering, no? Much has been hidden in foreign CB accounts, but that bill may come due soon.
If you add all taxes and other mandatory costs like healthcare etc, I think the difference between most US and EU countries is relatively small (I have seen some studies about the subject but can’t remember the details). I’m sure that if you have very high income, some EU countries like Netherlands are far more attractive than the US. The same goes for big corporations, just like very rich individuals their tax rate in Netherlands is close to zero.
Yeah, but the Europeans get 5 weeks of vacation.
And a 35 hour work week in some cases, never more than 40.
I have never worked as little as 40 hours in a week since my first summer job flipping burgers.
What more can be said?
Observers who had prematurely spoken of “a light at the end of the tunnel” now had to make sure that they weren’t facing an oncoming train, he warned.
You can say:
BWAHAHAHHAHHAHAHHAHAHHAHHHHHHHHHHHHHHHHHHH!!!
BTW< if you post a tiny URL that is a PDF link and you don’t disclose that fact, it’s not going to go through.
I wish people would stop using TinyURL altogether and just make links. It’s not that difficult. I like to be able to hover over a link and see where it’s going before I click on it.
I second that sentiment.
Does anyone know of a Professor computer disc that shows how to do that ‘linking’ thing.
hehe
Here’s a raw data in PDF form of all sales, DOM, BOM for every city in South Florida.
I do not know how many days this link will work for, it’s a glitch on their end that it’s available.
http://tinyurl.com/4j65la
long version:
http://www.miamire.com/statistics/MMI_July_08/statRpt%20Acti
vity1.pdf
A glitch in the matrix?
That reminds me, where’s RedPill? I haven’t seen a post from pill for forever.
I just thought–maybe Agent Smith got him/her!
Speaking of, when watching the Matrix I always thought Neo should do what I do when offered an exciting selection of pharmaceuticals of unknown provenance and result. Point away and exclaim ‘Hey, look! Is that a wildebeest?!’ Then when Morpheus looks away grab BOTH pills and chug ‘em, along with a slug of whiskey to wash them down.
Olimpiagal,
thanks for the laugh.
The Fed may have to choose an inflationary recession or a deflationary recession over the next week or two.
That’s the good scenario. The bad scenario is that those outside the U.S. will make that decision.
Which would those outside the US pick? To get paid back in dollars worth less in their own currencies or not get paid back full face value of the debts? I say the latter. If it is the former, they look foolish for not having hedged the currency risk. If the latter, they get to blame the US for renegging on its obligations.
Inflation is largely excepted by the populus. Its to the point now that we all just consider it to be a given. So there is less “face” lost with some inflation.
Sad, but true. The US does not control its own destiny.
The US has to make a muted response over the Russian/Georgia situation or Russia won’t buy any US Treasuries.
The US can no longer try to pressure China on a pegged currency or China bails out of any Treasury purchases. I have to wonder what our response would be in the event of a Chinese incursion into Taiwan.
BushCo would be mad as hell, but they wouldn’t do a thing. Bush’s wars have made us weaker not stronger and the rest of the world is aware of that fact. But with crazy people having thumbs on nukes, anything is possible.
Your talking about Palin right?
probably obama.
muted response? I think they organised the Georgia mess themselves through their local puppet … and I think the current response (with US/NATO Warships so close to Russia) is loud enough, the neighbours have every right to be pissed off.
I agree!
“The Fed may have to choose an inflationary recession or a deflationary recession over the next week or two.”
MAY have to pick? The Fed MUST pick an inflationary recession if they want to have any chance of EVER paying off our debt.
Like I said a while back, the Fed should already be designing the $1,000, $10,000 and $100,000 “federal reserve notes” that will have to be put into circulation within the next decade.
OK gang, whose face should be on each of those notes?
How can you pay of a debt if every new dollar “printed” is “loaned” into existence?
Exactly. Understanding the monetary system will give insight to a problem that literally and figuratively can’t be solved in its current form.
A new system is coming. The only questions - same as they always have been - are when, what, and who. Our Revolutionary and Civil Wars both resulted in provisions to ensure the debt was paid to creditors - check Art VI and Amendment XIV, sec 4.
Debtors will pay and creditors will make them. Creditors have the power, legally and monetarily speaking. They have this power because they had the money in the first place. Poor people don’t constitute governments to secure property rights. They are poor. They have nothing to secure in a real sense, although obviously plenty in an abstract sense.
Debtors don’t write the bankruptcy law. The creditors do. The taxpayers aren’t determining the terms of the bailout, the creditors (foreign entities) are. It is the same as it has always been, and always will be. To expect something else would be to disregard all natural law. Moral law is written as a consequence of natural law, not the other way around. To think otherwise would be an indication of not understanding “natural” and “moral.”
Greenspan on the 1mill note.
That’s what I was thinking.
Got a card shilling townhouses in Gaithersburg this week. M/I Homes is the developer if that means anything to anyone. Here’s the catch. They are offereing “Smart Move Financing.” What does that mean? 3.875% the first year, 4.875% the second year, 5.875% thereafter. Now, the white on medium grey 3 point type that discloses the fine print (literally!) is hard to read, but I managed to make out that this is baed on buying at $450K and getting a 30 year fixed rate FHA mortgage for S434,250. I guess they are subsidizing the first two years of interest? That’s it? Sounds like mortgage fraud to me. Not much different than any other kickback.
Rush now. “Event” only valid from September 10th to September 30th and you HAVE to close within 60 days or you don’t get the 42 inch flat panel TV. Rush, rush, rush. I’d take two, but you have to live in the unit, and they might not look like the pictures and the special offer could change without notice, and oh so much more.
Yippee! Lets buy houses NOW!
Alt-A Mortgages Next Risk for Housing Market as Defaults Surge
http://tinyurl.com/4lrcxy
‘Almost all stated-income loans exaggerated the borrower’s actual income by 5 percent or more, and more than half increased the amount by more than 50 percent, according to a study cited by Mortgage Asset Research Institute in its 2006 report to the Washington-based Mortgage Bankers Association.’
Each and every time I read that statistic it just blows me away. More than HALF of alt-A borrowers? Inflated their income by more than 50 FOOKIN percent?!
*gurgle, choke*
This is just gonna end SO badly.
Hey, you heard about those
nose-pickersstrawberry-pickers, right?BWAHAHAHHAHAHAHAHHAHAAHHAHAHHHHHHHHHHHHHHHHHH!!!
Not just strawberry pickers, but if you look at a room of people , I would say 1 out of 3 are going down. Of the people who bought in the last 7 yrs. It could be more, cause lots of people took out Helocs.
But here is the catch, nobody wants to own up to their predicament until they say buhbye as their moving truck goes down the road. It is embarrasing, shameful for people to admit they have been having problems with their finances.
“When Linda and Mark Pavlick bought their three-bedroom house in West Deer, Pennsylvania, 16 years ago, they paid $68,000. They now owe $105,000. The house was recently appraised for $80,000, Linda Pavlick said.
“The decision to redo the loan was probably the worst decision we ever made,” said Pavlick, an administrative assistant at a psychiatric hospital.
When their interest rate jumped to 12.25 percent last year, making the monthly payment about half their combined take-home pay, the Pavlicks and their 17-year-old son had to choose between paying the mortgage and the monthly gas bill, Linda Pavlick said.
Mortgage or Heat
“We went three months without gas,” she said. “I used an electric plate to cook. But heating up the water for a shower, to wash your hair, that was the toughest. I’ve learned a lot of lessons, but this isn’t one I’d wish on anybody.”
The Pavlicks turned to a community housing group called Association of Community Organizations for Reform Now, or ACORN, which helps borrowers recast their loans with lenders. Still, Linda Pavlick said she and her husband, who operates road-patching equipment for the Pennsylvania Department of Transportation, have no idea if their lender will comply”.
I cannot believe that these people have trouble paying their mortgage payment. There has to be much more to this story!
Wait? Where was I going with this one again?!?
“Reannexation of Texas and reoccupation of Oregon”
(My favorite slogan)
you’re old, but you’re not that old.
The election of 1884. James K. Polk, protege’ of Andrew Jackson, won after a bitter and confusing campaign against Henry Clay who had been labeled a drunkard.
the rallying American battle cry upon Polks victory came from expansionists for the fragile Union:
“Fifty-four Forty or FIGHT!”
–54 degrees, 40 minutes line of latitude.
Or motto now?
U Smart, Shop US-Mart…..We are rolling back prices!
Yeah, but that doesn’t have the ring of getting rid of ex-Californian commie, hippie freaks that have immigrated to Oregon. (I forgot hillbilly and a couple of other thingies.) And Re-annexation of Texas…I interpret as take it back from the psychotic religious nuts that want us to worship in a bizarre manner as if the Lutherans up here weren’t bizarre enough and send them back to their original place. They don’t deserve to be called Americans. Why should their idol worshipping be imposed on others?
32% of all Americans believe President Bush is doing a good job, ergo 32% of Americans are morons.
Bush proof:
“I promise you I will listen to what has been said here, even though I wasn’t here.”
“Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we.”
“We found the weapons of mass destruction. We found biological laboratories … And we’ll find more weapons as time goes on. But for those who say we haven’t found the banned manufacturing devices or banned weapons, they’re wrong, we found them.”
Damn, I am going to miss his moronic statements. It is the 32% approve of him that scare me.
You were going back to the 70’s.
I’m sure there is much more to the story, like where there money really goes. Last night, my sister told me of a story of a single mother of two in LA who lives in Westwood and pays only 400 per month (on I think a $1400 place) because she gets section 8 or some government housing subsidy. The kicker: the father of the children is living there too, unbeknownst to the government. Subsequently, her income is higher than is known. Furthermore, she drives a Mercedes SUV, and gets routine Botox injections at $400 a pop! She was recently complaining about some changes to her subsidized lifestyle, and worries about future government handouts, but she’s pulling for McCain! A real piece of work.
TURN her in.
Save the us taxpayer, us, some money.
This Alt-A and prime reset crest must rank as one of the most widely anticipated financial disasters in the history of mankind. Of course, so was the F&F blowup/bailout. Just because a financial catastrophe is widely predicted, does not mean it will not occur anyway.
“Stilgar do we have worm sign?”
“Usul, we have worm sign the likes of which even God has never seen.”
Dune
I LOOOOOVVVVE Dune!
Oh, golly, I gotta go find my stillsuit. I made one for last Christmas. Right this minute
‘Almost all stated-income loans exaggerated the borrower’s actual income by 5 percent or more, and more than half increased the amount by more than 50 percent,…’
Nothing a 1/2 pt reduction in thirty-year lending rates offered by F&F can’t fix, right?
WRONG!
In Atlanta gas prices have gone from about $3.65 a gallon on Thurdsay to as high as $5.29 at noon today(for regular). Many gas stations are sold out.
It’s just great to experience the unregulated market in action–from housing to the financials & now to gas shortages. And we have government because????
Out here there has been no change at all.
It must just be a regional thing, as gas went up here up north about 30 cents and that’s it, with no lines whatsoever. Highest I’ve seen is $4.19.
Blano,
It is regional(so far)–the refineries & pipelines in the gulf primarily serve the SE. I guess the main reaon I am so ticked off is that we have a hurricane season every year . If our state & federal governments had one ounce of planning skills, gas would be stockpiled annually in advance of hurricane season, and we the taxpayers would not get bled dry from price spikes, or stranded on the side of the road with no gas.
There are MANY problems with your desire for the government to have competence in anything, let alone WANTING them to stock pile gas.
Gas would be stock piled for these events if gas stations did not have to fear “price gouging” laws that prevent them from making a profit by stock piling. Instead you get shortages.
If you want the government to “stock up” then you will pay a higher average price of gas (higher demand) and pay higher taxes, subsidize the gas of others, and still be rationed to a limited amount instead of an amount you are willing to pay for.
There is no such thing as price gouging, only supply and demand. If you can get the gas to a region cheaper then someone will and the price will fall. If not there there will be a shortage unless gas is sold to the highest bidder (the diabetic who needs fuel for his generator or the out of town tourist who needs to get home “at any price”, instead of going to power someone’s lawn mower or joy riding.
The federal & state government is already being PAID by us to have emergency management systems in place. This is because market supply and demand does not function properly during a disaster. Our government is mandated to insure that critical items, such as gasoline, are available during a natural disaster, and that disruptions are limited. We have already paid to have strategic petroleum reserves (unless Halliburton has relocated them to Paraguay) that are supposed to be released when there is a break down in the market supply. Since I as a taxpayer have already paid for these things to be done, I expect them to in fact be done.
We have already seen what happens–through the housing bubble, and through the current credit crisis–when citizens do not hold their government accountable and instead WANT to believe that the free market fairy will make everything all right.
P.S. If you don’t believe that price gouging exists, come on down here & fill-up your car.
If this is such a sure thing, why don’t you construct a fuel storage facility, buy gas cheaper during the year, and then make a killing when the hurricane hits? Why do you only want the government to do it?
Why Kerk darlin’,
You are a such a bright boy!!! My dear friends Sean & Rush were just now sayin’ the very same thing to me!!! I guess great minds think alike, so if you act now, I will let you in on a part of the deal!!!! Please send all of your cash immediately to:
The Free Market Fairy
P.O. Box FB
Abuja, Nigeria
Gas doesn’t keep over extended periods of time (more than a couple months). Which means the stockpiling would need to happen right at the beginning of hurricane season. Which is right when refineries are switching from “summer blend” fuels to “winter blend” fuels, and capacities are already limited.
So instead of a sudden, large price hike on years when hurricanes damage/endanger gulf oil production facilities, we’d have a significant price hike _every_ year, plus fluctuations when the gas is put back into supply.
When your government is made up of oil barons what would you expect? Maybe you might vote for a Democrat with a humble upbringing next time around.
If govt were in charge, there would be a shortage of some kind pretty much all the time.
Govt has NO INCENTIVE to get the product to the marketplace because they don’t profit if they’re successful and they don’t go out of business if they’re not.
Why is that so hard to understand?
Actually the government DOES have an incentive to get gasoline to the marketplace. It’s called taxes. Federal & state taxes are paid upon each gallon sold. Unfortunately these taxes are incentivised so that the HIGHER the gas prices are, the more taxes the government is able to collect. Basically the government is currently set up to be on the side of big oil–any shortage induced price spike helps them both out.
Did we let in the Kos Kidz?
“Maybe you might vote for a Democrat with a humble upbringing next time around.”
Ain’t too many of those around anymore either, and Osama Obama ain’t one of them.
you hate women, and you call people names that aren’t correct. Sheesh.
I hate women?? Where on earth did you get that??? Get your head out of your arse.
Re: names, you can thank the distinguished Senator from Chappaquiddick for that one.
What do you know about Barry Obama that I don’t?
Blano, if you’d bother to do your own independent research you wouldn’t parrot such RoboGOP nonsense. What part of Barack Obama’s humble upbringing do you not get? Please state some facts, please, I’m dying to hear what you’ve got.
Wow, Blano, you’re still dredging up that Chestnut from, like 1968? Yes, Senator Kennedy was drunk, and in a car with a young woman, and drove the car over a bridge and she died. It’s horrible and true and you RoboGops with lizard brains as ancient as the hills just barf it up, like the bullies you are when you aren’t winning your arguments on their merits. And Bill Clinton had a B-Job. There, you happy? Got anymore blanks you want to shoot?, bring it on.
In DC metro, no noticeable change in gasoline prices. Yet.
This is just to funny. I thought I give my fellow HBBer’s a giggle on this fine Saturday!
Craigslist Milwaukee
http://milwaukee.craigslist.org/reo/839058983.html
$360000 *** FINAL HOURS OF SALE PRICE, 4BR Tosa English Tudor ***
Note: We’ve had “offers”, but this is a one-price only deal. The house has been reduced from $399,900 at mid-summer. This “sale” price will disappear Sunday midnight. See below for the rest…)
The price: a steal per City record.
***The house will be sold on the first signed offer of $360K.***
(No realtors, please.)
This is a 9-room Executive home w/deck and spacious back yard. New large kitchen; larger LR, MBR, DR; finished office basement; 3000+sq. ft. East School District. Close to Medical College/Froedtert, Marquette U., Miller Brewing; Mayfair, downtown. VERY children-friendly neighborhood.
***This ad will be deleted on 9/15*** Act now. Interest rates are lower. This is a gorgeous family homestead @400K in a better selling market. Two years from now, $400K will be a fair asking price again. Motivated, downsizing seller. This could be the one for you. A touch of class. Make our home your home for the holidays. Again, the price and the ad will expire on 9/15. Call for pics and/or personal tour. Good luck!
Okay - they are downsizing and issuing an ultimatum to act or we’re pulling this ad!
Ya just can’t make this stuff up!
Leigh
And if they are so sure it’ll be worth $400 in two years, why are they selling?
BWAHAHAHAHHAHAHHAHAHAHHAHHHHHHHHHHHHHH!!!
I wished that the gave an address, I was in that area this morning. Sounds like one of those “Old World Charm”, Eat the Heat Monsters on the edge of Milwaukee or in Wauwatosa.
Sky high taxes, rising energy costs, job uncertainties and credit crunch are making the housedebtors/knifecatchers with those old city castles PANIC. Wait until Winter
Winter in Milwaukee!
Oh, this brings back memories. Layered up until even the thinnest person looks like a butterball turkey, frozen to within an inch of your life, drunk on beers like a fratboy at an open bar.
That was a good week.
Sounds like they are smack in the middle of the “bargaining” stage of grief…
Act now, unknown buyer that I just KNOW is out there taunting me, or I will raise the price on you!!
“We have buyers up the wazoo but we’re saving this White Elephant just for you…Buy Now or Die Homeless”
IF YOU DON’T BUY THIS, THEN I’M NOT GONNA SELL IT TO YOU!!!
I was not burned by him, but an interesting story.
First person: Barry Minkow
As told toSerge Debrebant
Published: September 13 2008 02:00 | Last updated: September 13 2008 02:00
The first fraud I uncovered was at a private investment company in California called MX Factors. The firm promised investors a 12 per cent return in 90 days, claiming to make money by lending to government contractors. MX Factors would pay the contractors’ receivables up front and the contractors would pay the money plus interest back when the job was finished.
I knew that companies that lend money against receivables must publicly record their interest, so I looked for files with MX Factors as a lienholder. Sixteen companies showed up, but I soon discovered they either didn’t exist or hadn’t borrowed any money from MX Factors. I told the police, who discovered that clients of MX Factors had invested $39m – almost none of which was being used for the advertised business. The owner fled to Mexico, but I tracked him down and he was arrested when he re-entered the US.
Since then, I have uncovered 20 other cases. I know how fraudsters think because I was once a fraudster. When I was 16, I founded a carpet cleaning company, ZZZZ Best. I had started it with the best of intentions, but in my first year I committed 10 felonies, from credit card fraud to stealing jewellery. From then on, the frauds just multiplied. Yet to others, ZZZZ Best looked like a big success – at one point, it was worth $300m and I was even a guest on Oprah Winfrey’s show. But in the end my name became associated with one of the biggest Wall Street frauds of the 1980s after I was convicted of 57 felonies in 1988.
No fraudster wakes up and decides: I am going to defraud people of millions of dollars. It is a subtle process and develops over time. Fraudsters always hope for a cure that will let them repay the money. But compromise leads to corruption which leads to collapse. I call it the second law of fraudo-dynamics: frauds go from order to disorder. They don’t get better, they get worse. It is not if you get caught, but when.
In prison, I converted to Christianity. After eight Super Bowls, I got out and wanted to start a new life. The FBI asked me to give a speech on fraud protection, and since then I’ve taught classes for government agencies and private companies. I also became a pastor of a church in San Diego and founded the Fraud Discovery Institute to detect and prevent fraud.
Another company I brought down was called Financial Advisory Consultants, which had more than 5,000 clients. Again, the company claimed to make improbable returns, but the scale of the fraud was far bigger than that at MX Factors. When I talked to investors, they got angry – this firm had existed for more than 20 years, after all. Who was I to believe that I would uncover something 5,000 investors hadn’t thought about?
I went to see the company’s owner. It was 7am: I remembered that I always got into the office early when perpetrating my own frauds. I told the owner I was there to help; someone, I said, was offering his investment opportunity illegally. He invited me in and I saw that his office was only 1,500 sq ft, and the only employee was a secretary. Our church has a budget of $1.5m and 18 people work there. And this guy had an investment fund worth hundreds of millions? It didn’t pass the smell test. The guy looked frazzled. I thought: “He looks like me when I was a fraudster.” I really felt bad for him. After he was convicted, he went to jail for 30 years.
When people see me today, they no longer see Barry the fraudster. They do the math: when I came out of prison, I had to pay $26m in restitution. Today, I have uncovered more than a billion dollars worth of fraud. After my first cases, the judge dismissed the restitution order, but I still voluntarily pay my biggest creditor every month, and in 13 years, I have never missed a payment. Truth plus time equals trust. I have proved that people can change.
ZZZZ Best!!!
Oh, talk about a blast from the past.
Time for some celebratory champers?
NOTE: Before reading the following; put down any drinks and move them away from keyboard. Swallow any liquid that may be contained in your mouth. And pussycat, get your BWAHAHAHAHHH thingy ready.
my wife got this in an email a couple of days ago from a realtor we must of bump into at some openhouse we went to long ago:
Dear Friends and collegues!
“Channel 9 had a story on the 11pm news last night that said the market has hit bottom and is moving in a positive direction. Steven Fuller, Economic Advisor for the metro area, said “ the best deals are gone” and inventory is shrinking and foreclosures are declining in most areas of Md, DC and VA. .They predict a strong fall and a particular spike in business after the election. It was actually a lengthy story. They had realtors quoted as saying that “buyers are out there now ready to buy.” Well, this is encouraging news, and interest rates are very good right now.. I can tell you there is still a large inventory of homes yet to be sold so if you would like any information about them please give me a call. There are very nice TH and SFH in all price ranges, much less expensive than they were 2 -3 years ago. Best wishes and have a good weekend. “
Well, if Channel 9 said so! That’s tee-vee, right? Everyone knows that if it was on tee-vee, it’s all veritably true.
Now, look at all of us here. We’re justa buncha rubes and retards and now that we’ve been priced out forever, we just need to rush in there and buy before all the Baby Boomers and the Europeans and the Asians move to where-was-it-again, darling?
BWAHAHAHAHHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHHHH!!!
Don’t forget that the Canadians, Arabs, Russians, Brazilians and all those “investors” want a slice of the American home pie before it’s all gone!
I saw that broadcast Thursday night. Let’s just say I have no respect for Steven Fuller, who is a known paid shill for NVAR. Speaking of NVAR, they had a huge meeting at the Johnson Center on the GMU campus on Thursday. Talking about a huge conflict of interest!
Wonder what those rental fees and indirects from Fuller’s NVAR grants are worth to GMU?
How quickly do places like Zillow, PropertyShark, et al. update their databases?
I sold my house in San Jose back in May 2006. The buyer has gone into default. Yahoo noted a NOD on 25 June 08 but neither Zillow nor PropertyShark picked this up. Later on Yahoo noted a “notice of foreclosure sale” with auction date 28 August 08. Zillow picked it up this time and noted the foreclosure amount was $540,500, which by coincidence is 80% of the sale price of $670,000. (This leads me to believe the buyer used an 80/20 mortgage.)
The auction date has come and gone with no updates. PropertyShark never even picked up the NOD.
This brings me to my question: how old and stale is the data on these kinds of sites?
At sites like those, nobody’s job performance rating is based on the data being accurate or up-to-date.
From today’s NYT Business section:
“..Many analysts believe that for the downward spiral to be broken, home prices must fall to a level that can be supported by factors like household income that have traditionally had a strong relationship to prices. Also, the government has to determine how it will restructure Fannie Mae and Freddie Mac, which own or guarantee half of the nation’s home loans, said Thomas F. Cooley dean of the Stern School of Business at New York University.
“We have to hit the bottom in housing prices,” he said, “and we have to just sort out how housing will be financed in future.”
..well, duh! The financial geniuses are starting to come on board with what the little people have been saying for a long time.
“We have to hit the bottom in housing prices,” he said, “and we have to just sort out how housing will be financed in future.”
Too bad many banks will take a humongous hit to their balance sheet if housing prices fall to levels that are in line with incomes.
No one can lose your confidential data like Countrywide can.
Countrywide alerts victims of data theft
S.D. County customers begin receiving letters
By Mike Freeman
STAFF WRITER
September 13, 2008
Mortgage lender Countrywide has contacted some San Diego County customers to tell them their personal information, including Social Security numbers, was stolen as part of a massive security breach uncovered about two months ago.
Countrywide, which was recently bought by Bank of America, is offering to pay for two years of credit-report monitoring for customers who were victims of the breach, according to a letter sent to victims. Some letters arrived this week.
On Aug. 2, Countrywide and the FBI in Los Angeles announced that a former company employee had been arrested on suspicion of stealing reams of personal information of thousands of the company’s customers over a two-year period.
I got mine yesterday, signed up last night after confirming with Experian that it was not a mail scam. I am in St. Louis.
I am suprised the Roubini Disciples have not posted his Saturday weigh-in.
Cmon bears, roll it out. throw Roubini a linky…
Not sure which one you’re looking for, but it might be this:
If Lehman does not find a buyer over the weekend and the counterparties of Lehman withdraw their credit lines on Monday (as they all will in the absence of a deal) you will have not only a collapse of Lehman but also the beginning of a run on the other independent broker dealers (Merrill Lynch first but also in sequence Goldman Sachs and Morgan Stanley and possibly even those broker dealers that are part of a larger commercial bank, I.e. JP Morgan and Citigroup). Then this run would lead to a massive systemic meltdown of the financial system.
http://www.rgemonitor.com/blog/roubini/253567/if_lehman_collapses_expect_a_run_on_all_of_the_other_broker_dealers_and_the_collapse_of_the_shadow_banking_system
Cold turkey time for too-big-to-fail financial entities?
For future reference, a word to the wise in the financial sector: Be absolutely certain you pose sufficiently massive risk to the global financial system to fail your stress test if you want to qualify for a too-big-to-fail bailout from the Fed.
No bail-out this time round
By Krishna Guha in Washington and Henny Sender in Hong,Kong
Published: September 13 2008 03:00 | Last updated: September 13 2008 03:00
Six months ago the US authorities put $29bn of public money at risk to help secure a rescue takeover of failing investment bank Bear Stearns by JPMorgan Chase.
Today the Treasury and the Federal Reserve refuse to put any public money on the table to help close a rescue takeover for Lehman Brothers, even though it is also an investment bank and it is bigger than Bear was. So what has changed?
People familiar with the US authorities’ thinking highlight three important differences between the crisis at Lehman today and that at Bear in March.
First, Lehman’s business mix differs from Bear’s. While Lehman is bigger than Bear, it is less involved in the systemically important credit default swaps market and clearing system.
Second, while the crisis at Bear stunned the markets, other financial institutions have had six months to prepare for the possible failure of Lehman. In the Bear crisis, the risks were extreme in part because they were unknown and unmanaged.
The New York Fed has conducted extensive stress tests in order to attempt to evaluate the impact of a Lehman failure on markets such as the CDS market and it believes the systemic risk is quantifiable and lower than the risk that was posed by the imminent collapse of Bear back in March.
Is this financial crisis contained or idn’t it? Inquiring minds want to know.
Wall St. Goliath Teeters Amid Fear of Wider Crisis
By VIKAS BAJAJ
Published: September 13, 2008
Fearing that Lehman Brothers is only days away from collapse, government officials and senior Wall Street executives met on Saturday to try to arrest a downward spiral that might imperil other financial institutions.
For a second day, the group convened at the Federal Reserve Bank of New York in Lower Manhattan, but the situation remained fluid, and the talks were set to resume on Sunday morning.
Adding urgency to the meeting were growing concerns that other big financial institutions like the insurance giant American International Group and the nation’s largest brokerage firm, Merrill Lynch, might face a similar crisis and also need billions of dollars in capital to strengthen their businesses. The group discussed the financial condition of other firms beyond Lehman and the overall state of the markets.
Let me guess on the meaning of this acronym:
FBR Funds = F’d Buyer Funds?
BTW, I think we are on the brink of the SHTF moment on Wall Street.
“The too-big-to-fail mantra or concept or government policy is, in my opinion, off the table and we have to deal with that,”
said David H. Ellison, president and chief investment officer at FBR Funds, a mutual fund company. “They are not going to save these companies.”
How Washington Failed to Rein In Fannie, Freddie
As Profits Grew, Firms Used Their Power to Mask Peril
By Binyamin Appelbaum, Carol D. Leonnig and David S. Hilzenrath
Washington Post Staff Writers
Sunday, September 14, 2008; Page A01
[In 2003, Richard Baker, left, obtained executive pay information on Fannie and Freddie but was pressured not disclose it. In 1999, Treasury Secretary Lawrence Summers publicly signaled that Fannie, Freddie could be a hazard. (By Susan Walsh -- Associated Press) ]
Gary Gensler, an undersecretary of the Treasury, went to Capitol Hill in March 2000 to testify in favor of a bill everyone knew would fail.
Fannie Mae and Freddie Mac were ascendant, giants of the mortgage finance business and key players in the Clinton administration’s drive to expand homeownership. But Gensler and other Treasury officials feared the companies had grown so large that, if they stumbled, the damage to the U.S. economy could be staggering. Few officials had ever publicly criticized Fannie Mae and Freddie Mac, but Gensler concluded it was time to urge Congress to rein them in.
“We thought this was a hand-on-the Bible moment,” he recalled.
The bill failed.
Thank G0d the Clinton family is not going back into power…
The Clinton administration wanted to expand the share of Americans who owned homes, which had stagnated below 65 percent throughout the 1980s. Encouraging the growth of the two companies was a key part of that plan.
“We began to stress homeownership as an explicit goal for this period of American history,” said Henry Cisneros, then Secretary of Housing and Urban Development. “Fannie and Freddie became part of that equation.”
“Sh!t rolls downhill” version of trickle down theory:
The sh!t storm currently inundating Wall Street will take a minimum of six months to reach maximum intensity on Main Street. And it hasn’t ended yet, with no end in sight.
The Nation
A Financial Drama With No Final Act in Sight
By ALEX BERENSON
Published: September 13, 2008
A lot of smart people have tried to call the bottom on Wall Street this year.
…
Now even Wall Street’s professional optimists have given up predicting exactly when their industry might stabilize. One senior executive at a top investment bank, speaking anonymously so he could speak freely, recently observed that the crisis was entering its “19th inning,” with no ending in sight.
This sounds like quite the meeting of the high and mighty in finance.
U.S. Gives Banks Urgent Warning to Solve Crisis
By ERIC DASH
Published: September 12, 2008
This article was reported by Jenny Anderson, Edmund L. Andrews, Vikas Bajaj and Eric Dash and written by Mr. Dash.
As Lehman Brothers teetered Friday evening, Federal Reserve officials summoned the heads of major Wall Street firms to a meeting in Lower Manhattan and insisted they rescue the stricken investment bank and develop plans to stabilize the financial markets.
Timothy F. Geithner, the president of the New York Federal Reserve, called a 6 p.m. meeting so that bank officials could review their financial exposures to Lehman Brothers and work out contingency plans over the possibility that the government would need to orchestrate an orderly liquidation of the firm on Monday, according to people briefed on the meeting.
Flanked by Treasury Secretary Henry M. Paulson Jr. and Christopher Cox, the chairman of the Securities and Exchange Commission, he gathered the executives in person to impress on them the need to work together to resolve the current crisis.
Mr. Geithner told the participants that an industry solution was needed, no matter what, and that it was not about any individual bank, according to two people briefed on the meeting but who did not attend. They said he told them that if the industry failed to solve the problem their individual banks might be next.
A spokesman for the New York Federal Reserve Bank in New York confirmed the meeting but declined to provide details on the discussions. The Wall Street executives included the following chief executives: Lloyd Blankfein of the Goldman Sachs Group, James Dimon of JPMorgan Chase, John Mack of Morgan Stanley, Vikram Pandit of Citigroup and John Thain of Merrill Lynch. Representatives from the Royal Bank of Scotland and the Bank of New York Mellon were also present. Lehman Brothers was noticeably absent from the talks.
The meeting was reminiscent of the circumstances that preceded the near-collapse 10 years go of Long Term Capital Management. At that time, William J. McDonough, then the president of the New York Fed, summoned the heads of big Wall Street banks to the Fed to stop the failure of L.T.C.M., a hedge fund firm that had made big bets on esoteric securities using borrowed money and which had already lost $4.5 billion.
Ronald Raygun’s epic contribution to the demise of the U.S. financial system:
Working Group on Financial Markets
Delivered on 18 March 1988.
By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee;
(2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee;
(3) the Chairman of the Securities and Exchange Commission, or his designee; and
(4) the Chairman of the Commodity Futures Trading Commission, or her designee. (b) The Secretary of the Treasury, or his designee, shall be the Chairman of the Working Group.
The PPT is a myth, PB. Repeat…it is a myth!!!
Oh, and they’re talking about slamming short-sellers again.
Still, nobody’s explained why unchecked, upward “growth” is a good thing, but short-sellers are somehow bad???
Personally, longs should LOVE shorts because we make their stocks cheaper to buy, AND we become captive buyers AFTER they purchase!
If the companies are solid, short sellers give longs a much-needed price break so they (longs) can step in and make some more money$$.
I fail to see why anyone should hate shorts.
Lehman workout plan: Ten to fifteen Wall Street debt eaters to get bad bank, Barclays to get good bank…
Leading plan for rescue would split up Lehman
By Eric Dash and Ben White Published: September 14, 2008
The fate of Lehman Brothers, the beleaguered investment bank, hung in the balance Saturday evening as Federal Reserve officials and the leaders of major financial institutions concluded two days of emergency meetings with no agreement on a plan to rescue the stricken bank.
Several possible plans emerged from the talks, held at the Federal Reserve Bank of New York and led by Timothy R. Geithner, the president of the New York Fed, and Treasury Secretary Henry Paulson Jr.
The leading proposal would divide Lehman into two entities, a “good bank” and a “bad bank.” Barclays of Britain would buy the parts of Lehman that have been performing well, while a group of 10 to 15 Wall Street companies would agree to absorb losses from the bank’s troubled assets, according to two people briefed on the proposal. Taxpayer money would not be included in such a deal, they said.
Bush reigns over death of capitalism?
By Jay Bookman | Friday, September 12, 2008, 10:59 AM
The Atlanta Journal-Constitution
Lehman Bros, the nation’s fourth largest investment bank, is teetering on the brink of failure, and Treasury Secretary Henry Paulson is reportedly trying frantically to broker deals to sell pieces of the firm to other companies before it collapses altogether.
That’s fine. I hope he succeeds. But after committing taxpayers to as much as $200 billion for the bailout of Fannie Mae and Freddie Mac, there can be no public money or government loan guarantees to sweeten the deals. None. If private enterprise doesn’t have enough faith in Lehman’s fundamentals to rescue the firm, government should stand aside and let it fall.
Anatole Kaletsky, the well-respected economics writer for the Times of London, takes a sobering look at the situation in his latest column:
“Even more than the mind-boggling $5,500 billion size of the two US mortgage companies, it was the political significance of their nationalisation that marked it out as an historic turning point. This was, after all, the biggest expropriation of private property undertaken by a government outside the former communist world, yet there was absolutely no protest, nor even discussion, about the terms imposed by the US Treasury.”
I believe this guy nailed it: Last Sunday’s event will be seen as a historic turning point. Cold turkey from here for Lehman, Merrill, WaMu or whomever will not succeed in closing Pandora’s open box.
The great tragedy in this financial debacle is that the PPT’s market manipulation is a travesty of free market ideals. Acceptance of free markets will suffer greatly for the failure of recent government interventions.
From The Times
September 12, 2008
We’re all capitalists now? Not any longer
An historic turning point has been reached: the West is ditching its faith in free markets and private enterprise
Anatole Kaletsky
Whatever happened to the triumph of global capitalism? Even more than “the end of history”, the idea that “we’re all capitalists now” became an article of faith around the world from the early 1990s onwards. In the past few years even the few holdouts - countries such as Libya, Cuba and North Korea - seemed on the point of acknowledging that markets, competition and private enterprise were the only rational way of organising economic life, regardless of politics or history or religion or national cultures.
But just as the triumph appeared to be complete the innermost sanctum of the global capitalist system suddenly collapsed.
The nationalisation last weekend of Fannie Mae and Freddie Mac, the two largest financial institutions the world has ever known, signalled the complete failure of the biggest, most dynamic, most innovative and competitive markets that have existed in the history of capitalism - the Wall Street stockmarket and the market for US bonds.
Deal or no deal? And what if there is no deal by tomorrow?
BUSINESS
No Deal Reached Yet to Decide Lehman’s Fate
By CARRICK MOLLENKAMP, DEBORAH SOLOMON, AARON LUCCHETTI, SERENA NG and SUSANNE CRAIG
September 14, 2008 7:59 a.m.
The outlines of plans to determine the fate of Lehman Brothers Holdings Inc. emerged today even as it became increasingly clear that a clean sale of the entire firm to a big bank would be too difficult to execute.
(Kurt Wilberding
Merrill Lynch Chairman and Executive John Thain leaving the meeting at the New York Federal Reserve)
A sense of optimism that a rescue could be arranged today dimmed as a growing sense of gloom descended on Wall Street. Executives from top banks in the U.S. and Europe huddled with federal regulators in an attempt to come up with plans to either buy pieces of Lehman or prepare for an orderly winding down of the firm in a manner that would minimize the collateral damage for the ailing global financial system.
I predict little stock market impact of the outcome of today’s Lehman deliberations. The stock market (usually) always goes up.
September 14, 2008 8:44 A.M.ET
BULLETIN
Too late for Lehman?
With no government bailout coming and bankers unwilling or unable to inject money and hope into faltering Lehman Bros., the possibility of a forced breakup of the once-venerable firm, or even its liquidation, emerged as a possible outcome during weekend negotiations.
• Market Snapshot: U.S. stocks hang on Lehman’s fate
I just read saturday bitz all over again.
We need sunday bitz now!
Anybody insured by AIG. WSJ rumor has it that your counterparty risk just went up. They must have taken a bunch of New York State legislators out to dinner, or something, to get away with this.
UPDATE at 6:48 PM EDT: The Journal is reporting that a Bank of America-Merrill deal is closer, with an all-stock deal expected at $26 a share or greater. However, the situation remained fluid and any deal could still falter. Meanwhile AIG plans to shift capital from its regulated insurance business to its holding company, a source has told the Journal. The move is intended to improve AIG’s liquidity position. The measures involve $40 to $50 billion in capital allocation and new capital, the source says.
Holy Torpedo!
Dow down 504 at the close.
Am I ten years younger today?
WAMU next: http://www.cnbc.com/id/26761181
I know it’s not rational, but I feel like running to my bank and closing out my WAMU CD account.
But where would I put that money? B of A? Mattress?
Interesting times…