The trading desks have run it up. They'll all try to leave at once, and we'll have the three stooges stuck in the door.
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Wow! Things are much better than I thought!
I guess all the folks here on this blog are contrarians once again.
The blue line is no longer drafting the gray line.
The current market rally is due to rational delusion.
Carried over from previous thread, which incensed me:
"You don't want to upset the capital markets with things that could be misconstrued," said Lore. "The Fed understands that you don't want to create winners and losers out of the results."
Isn't that the whole f-ing idea? To identify and differentiate?
it's like Danny Ainge to going to a cardiologist and the doctor saying "you know what, I won't give your family the results, it might upset them" whether he dropped dead or not, isn't it the responsibility, no, the OBLIGATION of the person administering the test to disclose to those affected?
The more this goes on, the more I fear the end result
Did Danny Ainge drop dead? I didn't know that. I always considered him a twit. Bill Walton, Coke Whore that he was, was quite talented for a white boy.
rational delusion=it's all good as you pass the 35th floor on the way down
The blue line is no longer drafting the gray line.
It now looks to be tracking the green one with an obvious offset. That suggests a 4-5 month plateau before the next leg down.
The market is only off 44%.
100-44 = 56. 44/56=0.79.
At 44% off, it takes almost an 80% gain to get back to where it was, from where it is now. 
God bless (and God help) whoever is buying homebuilder stocks (fund managers, mostly, I'm sure). I won't call them investors, because it's hard to consider yourself an investor when you buy into a company that suffers loses equal to half of their market cap per year!
For instance:
PHM market cap = $3.01B, Net Income = -$1.47B
RYL market cap = $900M, Net = -$400M
LEN market cap = $1.5B, Net = -$1.2B
These are great investments though, as it is pretty obvious that the homebuilding industry is in for a dramatic change of fortunes, soon! I know because I heard that housing is about to bottom!
when does the wealth effect start kicking in after these weeks of outstanding gains?
Ainge still alive, though his artery was 100% closed, sorry for confusion
Ainge is basketball's Citigroup, alive barely, with the help of intervention
Nice Mercedes Jim the Realtor! Who'd a thunk selling real estate as the honest agent could be so rewarding. Kudos to him for being honest that although he might criticize the system, he was smart enough to get rich doing it.
Ainge found out that a diet of other players' fingers has high cholesterol.
The doctor analogy is not a good one since the doctor's only obligation is to tell the person examined providing of course he or she is of age. He has no obligation to tell for eample the persons employer.
Comparing it to the 2000-2003 period, this currently rally doesn't look that extraordinary...
"Who'd a thunk selling real estate as the honest agent could be so rewarding."
In the land of the blind, the one-eyed man is king.
At 44% off, it takes almost an 80% gain to get back to where it was, from where it is now.
So about 2 months at this rate.
S&P 500; Mortgage Pig™ right cheek formation ahead.
Wow... The US has borrowed/spent over 10 trillion, with the blue line rising only a smidgeon from the grey line.
My old estimate that global losses would hit 100 trillion needs to be revised upward.
I strongly believe the next phase of the meltdown won't be tradable via SRS, SKF or shorting financials, homebuilders, insurers, etc.
The Fed has let a sector problem infect the system, so it's now an all or nothing bet; We either collectively recover (slim chance), or the next dislocation would be something big.
Something like govt debt default, currency crisis or martial law.
Those trading in these should be aware. The system can crash and yet the fed can engineer a "recovery" in the stock market indexes. Their actions so far, under the new administration, is crystal clear now.
Fed's solution:
"Fix a system with fuses burning out, by jamming hard wires where fuses used to be". Either we get a working system, meltdown is now imminent.
This is one mother of a bear market rally. VIX has cratered and shorts have been smacked with margin call hell. If any sufficiently grim news comes along there's nothing under the market to support it here.
Limit down day anyone ?
..................my gut feeling is whispering me two more banks will be demised this week.............
Controlling the money is the system.
The truest words, perhaps the only honesty from Bush, was that Wall Street got drunk ...
"There's no question about it. Wall Street got drunk -- that's one of the reasons I asked you to turn off the TV cameras -- it got drunk and now it's got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments." --George W. Bush, speaking at a private fundraiser, Houston, Texas, July 18, 2008 (Watch video clip)
Wall street keeps drinking the vodka laden kool aid because the bartender keeps serving them long after closing time. I'll let you guess who the bartender represents.
LA Times: The Hunter Thompson of Real Estate
Good, recent story about Jim The Realtor.
Those trading in these should be aware. The system can crash and yet the fed can engineer a "recovery" in the stock market indexes. Their actions so far, under the new administration, is crystal clear now.
Ponzi finance provides the path of least resistance politically, so sadly that seems to be where we're headed.
It may well end in a disaster that makes us wish this were "only" another Great Depression.
Mortgage Pig shows "tits up" formation.
I'll say one of the upcoming big events will be the bankruptcy of mortgage insurers (S&P downgraded them all on April 8 ).
Once banks choose to initiate foreclosure this spring/summer sales season, the cash calls will overwhelm them at a time when they are probably least liquid if not insolvent. Their bankruptcy in turn will require a writedown of all unclaimed mortgage insurance (11.5% of GE Capital's residential mortgage book value, extrapolating from their NPLs.) That in turn could spark another cascade of recognition.
From par value to zilch overnight, a fair chunk of marginal change, and systemically prevalent in the weakest areas of the residential mortgage market
"Limit down day anyone ? "
......now everybody is saying correction , so there is no correction ......the market always goes against people's wishful thinking.......
BTW with people like Buiter turning on the Keyensians and Stiglitz saying stuff like this:
Relying on low interest rates to help put a floor under housing prices is a variation on the policies that created the housing bubble in the first place, Stiglitz said.
I think we're seeing the first true "green shoots" of hope.
"My old estimate that global losses would hit 100 trillion needs to be revised upward"
-----------
Foolish Earthling.
We shall merely inject $200 trillion to offset the loss.
"He has no obligation to tell for eample the persons employer. "
No analogy is perfect, but the stress-tester's (why sam used cardiologist) obligation is not to preserve the current banking system. It should be to obtain and publish information that citizens can use.
Citizens include buyers, sellers (current and future), taxpayers, investors, depositors, etc. Not just systemic risk creators.
The Lessons of the Savings-and-Loan Crisis (http://online.barrons.com/article/SB123940701204709985.html?page=1)
''So you are saying Democrats as well as Republicans share the blame? No one can claim the high ground?
We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure? If they are going to get any truthful investigation, the Democrats picked the wrong financial team. Tim Geithner, the current Secretary of the Treasury, and Larry Summers, chairman of the National Economic Council, were important architects of the problems. Geithner especially represents a failed regulator, having presided over the bailouts of major New York banks.''
"So you aren't a fan of the recently announced plan for the government to back private purchases of the toxic assets?
It is worse than a lie. Geithner has appropriated the language of his critics and of the forthright to support dishonesty. That is what's so appalling -- numbering himself among those who convey tough medicine when he is really pandering to the interests of a select group of banks who are on a first-name basis with Washington politicians.
The current law mandates prompt corrective action, which means speedy resolution of insolvencies. He is flouting the law, in naked violation, in order to pursue the kind of favoritism that the law was designed to prevent. He has introduced the concept of capital insurance, essentially turning the U.S. taxpayer into the sucker who is going to pay for everything. He chose this path because he knew Congress would never authorize a bailout based on crony capitalism."
Geithner is mistaken when he talks about making deeply unpopular moves. Such stiff resolve to put the major banks in receivership would be appreciated in every state but Connecticut and New York. His use of language like "legacy assets" -- and channeling the worst aspects of Milton Friedman -- is positively Orwellian.
I am liking this..
"Summarize the problem as best you can for Barron's readers.
With most of America's biggest banks insolvent, you have, in essence, a multitrillion dollar cover-up by publicly traded entities, which amounts to felony securities fraud on a massive scale."
"What, then, is staying the federal government's hand? Have the banks become too difficult or complex to regulate?
The government is reluctant to admit the depth of the problem, because to do so would force it to put some of America's biggest financial institutions into receivership. The people running these banks are some of the most well-connected in Washington, with easy access to legislators. Prompt corrective action is what is needed, and mandated in the law. And that is precisely what isn't happening."
"What needs to be done?
Well, these international behemoths need to be broken down into smaller units that can be managed effectively. Maybe they can be broken up the way that the Standard Oil split up back in the early 1900s, through a simple share spinoff.
The big problem for the last decade is that we have had too much capacity in the finance sector -- too many banks have represented a drain on our talent and resources. All these mergers haven't taken capacity out of the system. They have created even bigger banks that concentrate risk to the taxpayer, and put off dealing with problems."
Luckily there are an infinite number of zeros to use.
lawyerliz--finance the REOs.
Capital Corp of the West (CCOW) parent of County Bank, Merced, CA. is my guess for BFF.
Not a Georgia bank?
lawyerliz--finance the REOs.
"If any sufficiently grim news comes along there's nothing under the market to support it here. "
What would qualify as a sufficiently grim news? Everything is out in the open: GM bankruptcy, exorbitant unemployment, the first quarterly drop by GOOG, fake bank profits, Fed taking turds as collateral, pension plans being suspended, North Korea... all priced in.
Give me an example of bad news that cannot be ignored if the market makers decide to ignore it.
"one of the upcoming big events will be the bankruptcy of mortgage insurers"
Private insurance companies and corporate BK are Ponzi spawners almost by definition.
I'm sticking to my president's day call (i think it closed around 7850). I told my broker we're going down to 6500 then back to 7500-7800 (and a likely peak above 8000 if it hits the high end of the range) before flushing down to under 6000K.
My stomach literally gets knotted at inflection points. My stomach is now knotted as bad as it was the first week of march when I just KNEW the market was oversold.
The run might last another week or so but then look out below.
[I'll say one of the upcoming big events will be the bankruptcy of mortgage insurers ]
And Ben and Timmay won't backstop that? AIG v2, v3...
County Bank BFFd Feb 9th but the public company CCOW still exists as a shell. They got hit with a default notice Tuesday.
While basking in my 15 minutes, let's note that I bought the 'cedes used a while back, and it has 112,000 miles on it now. They don't cost much, you could buy a nicer one for less than $20K.
To be featured again here is humbling, thank you CR.
You guys are getting morose. CHEER UP! It's BFF after all.
I think the cardiac stress tests are run until a problem occurs: ekg whacked-out, hearbeat out of bounds, blood pressure gone the wrong way, etc. In that sense it's a true stress test. So, a regulator should test until a scenario that gives a bank a problem is found, rather than using two scenarios that may not stress the bank. That is like a cardiologist requiring only that you exercise until your heart rate goes up a little.
While basking in my 15 minutes, let's note that I bought the 'cedes used a while back, and it has 112,000 miles on it now. They don't cost much, you could buy a nicer one for less than $20K.
Well, if you decide you don't like it anymore, just take it on a one-way trip to the desert:
http://www.cbsnews.com/stories/2009/03/25/eveningnews/main4893449.shtml
--
The Zombie Apocalypse begins when U3 hits 15%
Jim the Realtor,
Wish you would come up here to the Silly Con Valley and do some nice video work. Plus, then I could use you to buy my next house!
Great work.
I don't know about that.. If it lasts over 18 months- there might not be a system left!
____________________________________________________
Bernanke Says Crisis Damage Likely to Be Long-Lasting (Update2) (http://www.bloomberg.com/apps/news?pid=20601087&sid=arpJXeelvfY4&refer=home)
By Craig Torres
April 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the collapse of U.S. lending will probably cause "long-lasting" damage to home prices, household wealth and borrowers' credit scores
____________________________________________________
Yay, it's Jim in person! My hero.
"You don't want to upset the capital markets with things that could be misconstrued," said Lore. "The Fed understands that you don't want to create winners and losers out of the results."
Isn't that the whole f-ing idea? To identify and differentiate?
I've noticed that markets act to create winners and losers while the political process acts to achieve the opposite.
Over time there has to be some kind of balance, but it does seem that we always go too far in one direction or another.
It seems this time though that Wall Street has anticipated this and used their vast resources to stage a coup in the government apparatus (really you might argue it started with Greenspan).
Now it seems like where going in two separate directions:
1) Wall Street is continuing to game the system like never before, looting the wealth of the rest of the nation.
2) The government is going on an unprecedented spending and handout binge.
Social programs are something you can afford when you have a healthy private sector, but they can't be self-sustaining.
Right now we seem to be ramping up spending just as the private sector is becoming structurally more diseased.
Based on what we know from history it's hard to imagine this not ending Soviet Union style if it keeps going on.
"Luckily there are an infinite number of zeros to use. "
When we run out of digits, they can always resort to Exponential notation. 10 E1000
Here's an interesting read. CDS settlements @ 0.035/dallah. How many of these can hedgies or PE handle before we get some cascades ?
http://www.bloomberg.com/apps/news?pid=20601087&sid=am._dKnt0RdM&refer=home
http://ftalphaville.ft.com/blog/2009/04/08/54596/sp-downgrades-the-whole...
United Guaranty Residential Insurance Co. (UGRIC) to 'BBB+' from 'A-'
Radian Guaranty Inc. (Radian MI) to 'BB-' from 'BBB+'
Radian Insurance Inc. (Radian Insurance) to 'BB-' from 'BB+'
PMI Mortgage Insurance Co. (PMI) to 'BB-' from 'A-'
Genworth Mortgage Insurance Corp. (GMICO) to 'BBB+' from 'A+'
Republic Mortgage Insurance Co. (RMIC) to 'A-' from 'A'
affirmed its 'BB' counterparty credit and financial strength ratings on Mortgage Guaranty Insurance Corp.'s (MGIC)
Most of the aforementioned firms' counterparty credit ratings are now CCC, not sure when banks will have to update their books and at what level they can mark those claims
MLM (member) wrote on Fri, 04/17/2009 - 1:55pm.
You guys are getting morose. CHEER UP! It's BFF after all.
Unfortunately the rules are no knurding until the first BFF. Thus the grumpiness.
But is was a zero sum game.. the "experts" said so
_____________________________________________
Credit-Swaps Sellers Take Beating on Latest Auction (Update1) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aOO5mCwHvU.A&refer=home)
By Shannon D. Harrington and Pierre Paulden
April 17 (Bloomberg) -- Credit-default swaps traders set a value of 3.25 cents on the dollar for bonds of an AbitibiBowater Inc. unit to settle derivatives linked to the newsprint maker that's now in bankruptcy protection.
The price means sellers of credit swaps guaranteeing as much as $1.1 billion against a default by the Abitibi- Consolidated unit would pay 96.75 cents on the dollar to settle the contracts. Eleven dealers, including JPMorgan Chase & Co., Barclays Plc and Morgan Stanley, bid in the auction, which w
" EvilHenryPaulson (member) wrote on Fri, 04/17/2009 - 1:44pm.
I'll say one of the upcoming big events will be the bankruptcy of mortgage insurers (S&P downgraded them all on April 8 )."
There is more to that than you know. To be fair, the MIs have been reserving for losses in advance of actual cash payments. However, they are stayed solvent so far by virtue of their captive reinsurance agreements with lenders, which have allowed them to cede a lot of their losses to the reinsurance companies. Problem is, they are getting to the point now where their loss reserves are exceeding the reinsurance coverage, meaning they will have to keep all the losses.
For example, as of 12/31, Countrywide's reinsurance company had about $1BB of capital, and had about...$1BB of ceded losses. Most losses from now on in will be kept by the MIs.
What happens when the MIs get too extended (i.e. a 25:1 risk-capital ratio)? The state regulator takes them over, and/or they go into runoff.
The FHFA regulator has been pushing Treasury to support the MI industry, but it is unclear if the can (under TARP regulations), or in my opinion, should.
I think a positive development in the market would be to allow Fannie/Freddie to take mortgage risk above 80LTV. Sounds backward, but the fewer ways the credit risk gets carved up the better. Fannie/Freddie used to push around the MIs something awful to take risk that should have never been taken.
Jim the Realtor is my hero. I'm getting ready to start real estate school and I learn more from his videos than anyplace else.
ac, great comment
+1
Could we incinerate the environmentalists and their supporters now? (http://www.bloomberg.com/apps/news?pid=20601087&sid=aaE9Lr1448tM&refer=home)
_____________________________________________________
Waxman Won't Compromise on 20% Carbon Cap in Climate Measure
By Christopher Stern
April 17 (Bloomberg) -- House Energy and Commerce Committee Chairman Henry Waxman said he won't compromise on his proposed 20 percent reduction in greenhouse gases over the next decade in the face of criticism from lawmakers who say the economy could suffer.
______________________________________________________
"Such stiff resolve to put the major banks in receivership would be appreciated in every state but Connecticut and New York. "
I call BS on an otherwise dead-on analysis. Spitzer, A. Cuomo, Paterson, Gary Ackerman, all represent resistance to the big banks. Don't forget Citibank moved to South Dakota to avoid New York State usury law. Many of us in Manhattan will be glad to see the big bankers gone. Please take Schumer with you.
Yes.. the people are tired.. but the people who run those states get a lot of their revenue because of banksters (direct and indirect)
// Many of us in Manhattan will be glad to see the big bankers gone. //
I am not going to comment on this one.
_______________________________
S&P 500 May Jump 70% on Valuation, Ken Fisher Says (Update3) (http://www.bloomberg.com/apps/news?pid=20601213&sid=aH3ugQVzyIeE&refer=home)
By Rita Nazareth
April 17 (Bloomberg) -- The Standard & Poor's 500 Index is in the middle of a rally that will drive it as much as 70 percent above its March lows, billionaire Kenneth Fisher said.
The index surged 28 percent through yesterday since sinking to a 12-year low on March 9, the steepest five-week advance since 1938, according to data compiled by Howard Silverblatt, an analyst at S&P in New York. Banks led the gain after lenders from JPMorgan Chase & Co. to Bank of America Corp. said they made money at the start of the year and Treasury Secretary Timothy Geithner announced plans to finance as much as $1 trillion in purchases of financial firms' distressed assets.
"Bear market rallies are not that big," Fisher, 58, who oversees $28 billion as chairman of Woodside, California-based Fisher Investments Inc., said in a telephone interview yesterday. He is the world's 647th richest person, according to a tally by Forbes magazine in March. "Stocks are cheaper compared to long-term interest rates than they have been in anyone's life," he added.
Could we incinerate the environmentalists and their supporters now?
I still say fill up the Atlantic ocean with volleyballs.
Next year it will be winter for 12 months straight.
Please tell me this is a joke!
______________________
FICO Web Site May Help Homeowners Seeking Loan Modifications (http://www.bloomberg.com/apps/news?pid=20601213&sid=aJ7jjhNI4aSk&refer=home)
By Alexis Leondis
April 17 (Bloomberg) -- FICO, owner of the credit-scoring formula that many lenders use in making mortgages, is now helping homeowners figure out if they can keep them.
"infinite number of zeros to use"
--------------
Oh, yeah?!
http://www.unconfirmedsources.com/index.php?itemid=3953&catid=4
Could a possible market crash/moving event be a lot of the bigger banks not passing the stress tests. It seems everyone thinks they will all pass. Perhaps not. Perhaps we will see some banks be required to raise more capital. What about something like JPM -- a bank everyone assumes is safe b/c they can return TARP, etc. If govt decides it need more capital, that would be a game changer.
Doubtful?
Jim the Realtor, come to Santa Cruz. We got whole neighborhoods of 40-50-60 yo 3/2s 1500-sqft asking price $600K and above. They'll tell you it's a deal because it's lower than the 2004 price! And would you believe -- nobody wants to pay those prices!
The Standard & Poor's 500 Index is in the middle of a rally that will drive it as much as 70 percent above its March lows, billionaire Kenneth Fisher said.
Ah... finally some bearish articles in the financial media.
I'd much rather see stuff like this than all these "It's just a bear market rally" type articles.
Maybe this thing is getting close to turning back down.
My call as well, except it could go closer to 9k, and drop much further than 6k. Into the 4's before the real rebound-
Cinco-X
Would that not entail installing guillotines at ivy leagues?
____________________________________________
President Obama: Please Create a Financial Truth & Reconciliation Commission (http://www.bloomberg.com/apps/harvardbusiness?sid=H432842ecb71fdb186ea26...)
04:17 PM Friday April 17, 2009
By Rosabeth Moss Kanter and Rakesh Khurana
Populist anger is boiling all around us. An Economist cover proclaims "the war against the rich." A Wall Street Journal headline reads "small business versus bailed-out banks" with a photo of picketers demonstrating outside a Bank of America branch in Chicago (they also held a prayer vigil). Outrage over the AIG bonuses was widespread. Polls show that confidence in business executives is at an all-time low in the U.S., and not only because of failures in financial and auto companies. Retirees whose pensions have plummeted and homes have been foreclosed are probably too tired to protest, but the undercurrent of anger and blame is everywhere.
"Oh, and for those expecting the Treasury Department's "stress tests" to make everything clear: the White House spokesman, Robert Gibbs, says that "you will see in a systematic and coordinated way the transparency of determining and showing to all involved some of the results of these stress tests." No, I don't know what that means, either."
"-- FICO... is now helping homeowners"
------------------
Wow, I thought we already reached Peak Absurdity but this is new high.
What next?
FICO & Treasury "investing" in CDS together?
"Social programs are something you can afford when you have a healthy private sector, but they can't be self-sustaining."
I'll buy that.
But a private financial sector is something you can afford only with a healthy infrastructure (regulation, peace-keeping, education), it has never been self-sustaining but requires social programs.
You eat chicken, I like eggs.
"My call as well, e
Cinco-X"
Also, this rally could last as late as Memorial Day, but the final leg down is already due.
Another exhibit supporting my idea for guillotines.. read the double talk.. these bastards created the problems and now they want to get out with bigger psychological cons!
_________________________________________________________________________________________________________________________
Keeping Your People Engaged in Tough Times (http://www.bloomberg.com/apps/harvardbusiness?sid=Hcf35c4606426ca31c70f7...)
07:37 PM Friday April 17, 2009
By Sarah Green
This week's question for Ask the Coach:
Keeping employees' committed and motivated during tough economic times seems like a tall task, especially after downsizing or program cutbacks. What should I do to keep our employees 'in the game'?
Marshall: I hear this concern every where I travel these days. Who doesn't? My friend Joe Wheeler, Executive Director of The Service Profit Chain Institute, recently co-authored a book with Harvard Business School Professors James L. Heskett and W. Earl Sasser, Jr. entitled The Ownership Quotient, Putting The Service Profit Chain to Work for Unbeatable Competitive Advantage. I asked him for his perspective on this question. Here's his take:
Meanwhile, me, my sister and my brother are now all unemployed. Nineteen years of college, seventy+ years of work experience but we need more H1Bs to save the U.S. Lots of talk about credit and banks and lending and ZERO talk about wages or jobs.
The U.S. runs on lies now.
It's just amazing to watch it happen over the past ten-fifteen years. It's all about ass-covering and finger-pointing and my mom only raised us to show up and do real work, not play politics.
I don't think the market needs a catalyst to turn lower. We've already seen what happens when earnings are released; the big boys that are trading on fundamentals drive 'em down. This is a market that is driven by momentum, emotion, technical trading, leverage, gambling, and a complete disregard for risk. I happen to know that many hedge funds which INVEST based on FUNDAMENTALS are taking it from behind in this rally. All it takes is one little slip, and we're going to see a rush to the exits that will be historic.
If you're placing your faith in your government to keep backstopping the markets, and GS to stem the tide with program buys, I think you'll be sorely disappointed. You're placing your eggs in a 'debasement of currency' trade which flies in the face of historical asset/credit bubbles, and/or faith that our government will be willing & able to finance obviously unsustainable defecits at attractive interest rates. If the bond market crashes, I'm not sure what happens to equities -- but I'm pretty sure I'd rather be holding gold than to find out.
I smell desperation in the actions of men that have done nothing but FAIL for the past decade. Personally, my money is on that trend continuing.
Broward Horne,
We require a new word to describe things beyond ludicrous. Any ideas?
Is anyone thinking any mutual insurance companies, or formerly mutual companies like Met Life will go down. They're heavy into CRE, and some like Met weren't in too good of shape before the SHTF.
Cinco-X
"...some of the results of these stress tests."
Dr: You have 6 months to live.
Patient: I want a second opinion.
Dr: You're ugly.
Financial Truth & Reconciliation Commission
Maybe it's just me, but some events are so unique, either good or bad, that trying to draw parallels disservice the original.
[What would qualify as a sufficiently grim news? ]
Judge ordering a GGP liquidation ?
Wow... The US has borrowed/spent over 10 trillion, with the blue line rising only a smidgeon from the grey line.
And the administration is using up a lot of its political capital, and they probably realize it and are starting to worry.
If this spending doesn't take it's going to be a disaster both economically and politically - there could be enough Teabaggers a year or two from now that they cause genuine political instability.
I agree with your comment. Am curious as to what you see working going forward. The dollar has been so strong. Bonds a bit less so. I don't see myself getting long, but like a prior post said, the trade won't be short real estate, financial, etc. What does that next trend look like? It doesn't seem like it will be an inflation trade either.
Confused right here.
cinco-x,
I believe they go down at the same time as a wave of banks and pension funds. I'm not sure I can see a situation where they go down in a vacuum. It will be interesting to see how the government tries to backstop them...
Broward Horne,
Ironically, the majority of the american public elected (or stood by) these people.
The current immigration is bad because the system is designed to create immigrant slaves. If you had a system where immigrant who had a decent job for a couple of years would automatically get a green card within a month after that period.. this would not be a big issue.
But many white americans want both cheap labor and job security, unlimited riches as well as fairness of opportunity in a world that has changed beyond their imaginations. Only one system can exist in the end..
Meanwhile, me, my sister and my brother are now all unemployed. Nineteen years of college, seventy+ years of work experience but we need more H1Bs to save the U.S. Lots of talk about credit and banks and lending and ZERO talk about wages or jobs.
The U.S. runs on lies now.
I've got a few people in my family now that have lost jobs in the past year.
Today they told us to go home from work early. As somebody who's been laid off before that's got me scratching my head a bit.
I've been asked to give feedback on some of the other employees in terms of their performance, so I wonder if they're going to do a few more cuts.
I sleep well at night because I've programmed myself to believe that I'll be living in a tent city a year or two from now.
It's remarkable what low expectations can do for your sanity.
[What would qualify as a sufficiently grim news? ]
Judge ordering a GGP liquidation ?
Eh, no biggie ... CRE is recovering!
Committee of Public Safety?
"The Committee of Public Safety came under the control of Maximilien Robespierre, a lawyer, and the Jacobins unleashed the Reign of Terror (1793-1794). According to archival records, at least 16,594 people died under the guillotine or otherwise after accusations of counter-revolutionary activities. A number of historians note that as many as 40,000 accused prisoners may have been summarily executed without trial or died awaiting trial."
//Maybe it's just me, but some events are so unique, either good or bad, that trying to draw parallels disservice the original.//
For the last decade I did manual labor of a sort. This past year I was a full-time trader. I made more than in the past 11 years of labor combined, yet some of it was taxed at a lower rate. This is absurd.
Capital gains should be taxed at least as highly as ordinary income.
Jim-
Screw the Merc, they're a dime a dozen. The truck!, now that's the keeper.
Cheers to you.
"I agree with your comment. Am curious as to what you see working going forward. The dollar has been so strong. Bonds a bit less so. I don't see myself getting long, but like a prior post said, the trade won't be short real estate, financial, etc. What does that next trend look like? It doesn't seem like it will be an inflation trade either.
Confused right here."
------------------------------------------------------------
I see this as an either/or. You either short financials/RE, or you go for the inflation trade. Alternatively you could invest in "magic beans".
" Gavshire Hathaway (member) wrote on Fri, 04/17/2009 - 5:25pm.
cinco-x,
I believe they go down at the same time as a wave of banks and pension funds. I'm not sure I can see a situation where they go down in a vacuum. It will be interesting to see how the government tries to backstop them..."
I didn't mean to imply that they would go down in a vacuum; the present situation with CRE might be enough. BTW, does anyone know if the Hancock tower in Boston was owned by an insurance company?
Thanks....
"Social programs are something you can afford when you have a healthy private sector, but they can't be self-sustaining."
I'll buy that.
But a private financial sector is something you can afford only with a healthy infrastructure (regulation, peace-keeping, education), it has never been self-sustaining but requires social programs.
You eat chicken, I like eggs.
They're all interrelated.
My personal problem with a lot of the left-wing economists is that they portray social programs like the New Deal as economic programs. I think that's probably inaccurate - the New Deal may have provided the social stability needed for recovery in the 1930s, but I think it's very dangerous to conflate that with economic stability (they are interrelated, but still distinct things).
My problem with a New New Deal is that I think it brings a threat of fiscal and economic instability that outweighs any social benefits. Again, look at what is going on in Greece now.
I don't see the historical evidence that governments can spend their way to prosperity if they don't have a healthy balance sheet.
Annd I don't see that the US has a healthy balance sheet - specifically the problem isn't the amount of public debt but the inability to continue public operations without chronically running deficits.
We're giving the economy more and more blood transfusions but doing nothing to stop the blood loss.
Soon we'll begin running out of blood donors.
"It's remarkable what low expectations can do for your sanity. "
Don't forget the tired old "count your blessings". Linux is free.
Linux is free.
which means that linux can't provide the same kickbacks to IT departments that MS can.
[Capital gains should be taxed at least as highly as ordinary income]
Ahh, guilt complex. Feel free to send any money you feel you should owe to the treasury. They gladly accept donations.
" Gavshire Hathaway (member) wrote on Fri, 04/17/2009 - 5:30pm.
Alternatively you could invest in "magic beans". "
Are those the ones that make you fart skittles and jelly beans?
BTW, I think something we're going to need to consider in the future is that the whole reason FDR was able to afford the New Deal was because people like Hoover came before him, and that lacking any Hoover types over the past several decades we now aren't able to afford government spending when it might genuinely do some good.
"Stocks are cheaper compared to long-term interest rates than they have been in anyone's life," he added.
I'm supposed to know how to parse this, however, I have no clue what in God's name Fisher is talking about.
"Today they told us to go home from work early."
Never a good thing...unless your boss is taking you golfing.
I'm guessing some bank in GA will be put into receivership today. Also one in the Pacific NW, but will have to wait awhile for that one.
Also, this caught my attention...
"Domino's discovered the power of viral marketing this week when two employees filmed a "prank" video of themselves stuffing cheese up their noses and then putting it into sandwiches. The video went nuts on YouTube, and Twitter lit up with disgusted customer complaints.
Dominos has since apologized and put its own CEO on YouTube, and the employees have been fired, sued, and charged with the crime of "delivering prohibited food." But consumer perception of Domino's quality has already gone from positive to negative on YouGov, and a spokesman says folks who have been customers for decades are now "second-guessing" this relationship."
Broward, is your MemeMiner set up to catch quick turnarounds like thi:)
Money is not real. Social stability is real.
If you believe the New Deal was ultimately successful because of government cash reserves.. you are kidding yourself. They spent what they did not have..
PS- The New Deal was successful.. we did not get a hitler, mussolini or stalin..
"BTW, I think something we're going to need to consider in the future is that the whole reason FDR was able to afford the New Deal was because people like Hoover came before him, and that lacking any Hoover types over the past several decades we now aren't able to afford government spending when it might genuinely do some good."
"Capital gains should be taxed at least as highly as ordinary income. "
You can donate the excess to the feds if it bothers you.
" hong konger wrote on Fri, 04/17/2009 - 2:39pm.
"Stocks are cheaper compared to long-term interest rates than they have been in anyone's life," he added."
Probably what he is talking about is the Fed model, comparing dividend yields to long term rates.
Problem is, long term rates are being held down by BB, without the threat of him coming in to the treasury market, the 10 year would probably be at 3.5%.
The div yield on the S&P is like 2.5%, before any new div cuts this earnings season.
Or something like that. more mumbo-jumbo to sucker people in.
Does it matter how clever the BS is? You can sell packed c**p as gourmet sausage, but eating it is another matter.
//I'm supposed to know how to parse this, however, I have no clue what in God's name Fisher is talking about.//
["Stocks are cheaper compared to long-term interest rates than they have been in anyone's life," he added.
I'm supposed to know how to parse this, however, I have no clue what in God's name Fisher is talking about. ]
Fisher is suggesting long term interest rates are unmanipulated, market driven and will stay at these levels indefinitely.
Cut the suspense
_____________________
GM CEO: Bankruptcy is still probable
By Shawn Langlois, MarketWatch
Last update: 4:08 p.m. EDT April 17, 2009
SAN FRANCISCO (MarketWatch) - General Motors Corp. CEO Fritz Henderson on Friday said that while it's not the preferred option, bankruptcy remains a likely outcome of the automaker's drawn-out saga considering the demands of the Obama administration.
Is anybody besides myself expecting a respite from layoffs in the next couple months? Being involved in financial planning and decision making, I know that nobody wants to cut more than is absolutely necessary. With the scattered (though much heralded) signs of improvement we've seen recently, will managers hold off on making cuts too see if we're going to have a real recovery soon? I suspect this trend might be noticeable.
But then after the wait and see period ends, and business doesn't pick up or sentiment turns negative again, they will be forced to make deep and painful workforce cuts. When that happens we will see despair kick in and confirmation that this is in fact a depression and not a cyclical recession.
I like his dreams.. so positive. What does he take to get such nice dreams?
______________________________________________
//Fisher is suggesting long term interest rates are unmanipulated, market driven and will stay at these levels indefinitely.//
re: Layoffs
http://www.slate.com/id/2216238/
fun animated map
I have a good friend who is a Realtor. I showed him what Jim the Realtor was doing when CR first posted one of his videos and said to him "this is what will gain you clients in this market". He of course did not listen and still tries to dress up the homes with canned photos and a thesaurus. Of course he can hardly feed himself now becasue he hasn't sold anything for a long time.
"... a lot of the left-wing economists ... portray social programs like the New Deal as economic programs."
They are mired in the belief that an "economic" rationale is necessary to get political support for any "social" program. Politics, economics, sociology converge in crisis. "Fairness", "efficiency", "cost-benefit" become semantic political battles, which is not so terrible. Political ideology based on a scientific notion of "Economics" is horrible at both extremes.
In economics there is a maxim that soft variables tend to be undervalued. "Moral hazard" is one example.
hong konger wrote on Fri, 04/17/2009 - 2:39pm.
"Stocks are cheaper compared to long-term interest rates than they have been in anyone's life," he added.
I'm supposed to know how to parse this, however, I have no clue what in God's name Fisher is talking about.
Try this instead:
"Real long-term interest rates are lower than they have been in anyone's life," he added.
When all you have is a hammer (FFR) everything looks like a nail (deflation threat).
ghost says:
"The div yield on the S&P is like 2.5%, before any new div cuts this earnings season."
ZINGGGGG!
You're prolly right about Fisher and the FED model. Good thing for me I never internalized the idea that yield arbitrage was a proxy for "value".
Gavshire Hathaway,
We are going to reach a national U3 of above 12% and a U6 of over 20% faster than most people think.. A U3 of over 15% will result in the zombie apocalypse.. or so I am told... Watch California..
"I wonder if they're going to do a few more cuts."
AC, none of that sounds very good....
And "earnings" are due Monday!
CR,
I used to think that GM had at least until the middle of May, but fear that things are happening a bit quicker than anyone would like... or it is a bargaining ploy?
"Lucifer, doesn't GM have until the end of May? The suspense will build for some time ..."
EHP,
Any comments?
____________
Turned on: A new reality TV series concerns real estate (http://www.vancouversun.com/Entertainment/Turned+reality+series+concerns...)
BY SHELLEY FRALLIC, VANCOUVER SUN APRIL 16, 2009
I'll pay what tax the law says I must. I suggest you vote that I pay more than I do now.
CR,
Just out curiosity, Who is going to pay GM's and Chrysler's Pensions and Health Care Plans?
Is anybody besides myself expecting a respite from layoffs in the next couple months?
Many of the private sector cuts have been preemptive, so a respite is not unreasonable. The next wave is going to be from the public sector, which so far have been few, mostly furloughs. Most budgets for next year have not been finalized, so it's going to be interesting to see what happens.
on a related note, the stimulus plan is wrecking havoc on many state budgets. because receipts of many of the funds require that no cuts be made in certain areas (health care, education), states are forcing "disfavored" sectors absorb a larger brunt of the shortfall.
Rob-
In 2002, we were, ostensibly, in a similar situation (given Ken's hypothesis). For the life of me, I can't remember how that turned out...
CalculatedRisk (member) wrote on Fri, 04/17/2009 - 2:53pm.
Lucifer, doesn't GM have until the end of May? The suspense will build for some time ...
CR, I doubt they have that much time. The details are too large to keep from leaking out. Too many people are thinking they have a reservation on the last lifeboat. Once the rush for the exits starts there will be no stopping it.
What happens when the MIs get too extended (i.e. a 25:1 risk-capital ratio)? The state regulator takes them over, and/or they go into runoff.
The FHFA regulator has been pushing Treasury to support the MI industry, but it is unclear if the can (under TARP regulations), or in my opinion, should.
I support this idea of a Mortgage Insurance Liquidity Fund, if only for the pleasure of tuning in CSPAN and watching various House and Senate dignitaries debate the merits of a 100-billion-dollar government-supported MILF program.
"who is going to pay GM's and Chrysler's Pensions and Health Care Plans?"
BOHICA, Lucifer.
Comrade Terry,
Is that not the "Sum of All Fears"?
BT: Your law examiner prefers you wreak havoc.
" CalculatedRisk (member) wrote on Fri, 04/17/2009 - 2:53pm.
Lucifer, doesn't GM have until the end of May?"
I think this may be the trigger fo rthe next leg down-
Cinco-X
fun animated map
Why does that remind me of a corpse swelling in the sun?
Think happy thoughts... think happy thoughts...
Yalt-hahahahaha.
The hub just give me this little nintendo game thingy, and a scrabble set. I asked him and I know I shouldn't have, whether Sid Meier game Civilization was available. I kicked that addiction when the 3rd version wouldn't play on the computer. If I get a hand held version I like, you guys may never hear from me again.
Maybe that's what happened to Misean, for awhile. . .
lawyerliz--finance the REOs.
lawyerlizinMI,
It is available on the iPhone or iTouch.
//If I get a hand held version I like, you guys may never hear from me again.//
"Is that not the "Sum of All Fears"? "
It's all fearsome to me....
"Give me an example of bad news that cannot be ignored if the market makers decide to ignore it."
Flu pandemic. Stock exchanges all over the world closed for months. No sellers, no customers. Etc. You won't need to answer a margin call then. You'll need a ventilator. Something on that scale.
Pavel Chichikov
Wasn't Tennis_8 the shill for K. Fisher? Didn't he promise to reveal his secret identity January of last year?
BTW- re: Jim the Realtor. I don't know how we're supposed to trust someone who tells us the truth. It's really messing with my mind.
"I'll pay what tax the law says I must. I suggest you vote that I pay more than I do now. "
I vote to make it so you pay less taxes then you do now. The problem as usual is liberals want more unearned had outs and the politicians give it to them from our earnings.
Oops.. SimCity is currrently available on the iphone/ itouch.. civilization is going to be available soon.
Luckily I don't have the iphone or itouch.
That map is well, fun isn't exactly the word for it.
lawyerliz--finance the REOs.
I looked at today's S&P chart. The market tried 875 several times, but was turned back.
Calculated Risk,
Isn't that the same wonderful organization (PBGC) that invested tens of billions (at least) in the equity market before the ongoing crash?
"I wonder if they're going to do a few more cuts."
AC, none of that sounds very good....
I'm not too worried about myself, the one irony though is that a friend of mine was lobbying hard to get me to go work with him about a year back and I declined on the basis of the economy.
It would have been a definite move up from where I am now and I would have gotten to have a title starting with "Chief" at a legitimate company.
Last I checked, his company had laid off some people, but all their top guys were still around.
If I lost my job before he lost his that would be a bit funny...
Where's my bank failure????
All practice for BankU. Is BankU on the same scale as Indymac???
lawyerliz--finance the REOs.
"Isn't that the same wonderful organization (PBGC) that invested tens of billions (at least) in the equity market before the ongoing crash?"
Lucifer, what part of 'bend over, and brace yourself' do you not understand?
reptillian (member) wrote on Fri, 04/17/2009 - 3:19pm.
I looked at today's S&P chart. The market tried 875 several times, but was turned back.
Well it got turned back at 855 several times, but finally got through... but 875 might be a bit tougher.
lawyerlizinMI,
Buy it.. Stimulate the economy.
If you do not buy an iPhone/ iTouch a few slave wage workers in China will get their hands cut off! I wish this joke was not so close to reality.
Unfortunately the rules are no knurding until the first BFF. Thus the grumpiness. - RD
Commencing about 5 p.m. Pacific time, if it follows past form. Pizza and beer on standby.
Comrade Terry,
I know.. I was just trying to highlight the utterly ridiculous scams that pass for reality.
LBD what we're saying is Ponzi derivative billions are not earnings but fraud. And that a long-term capital gains dollar is at best equal to a hard-earned dollar.
I've usually discounted the most exaggerated predictions of doom here because of my own innate doominess, which causes a certain amount of torqued bias towards the gloom side. But now, I'm beginning to wonder. Latest from the head of the IMF is certainly something to think about.
Pavel Chichikov
"If I lost my job before he lost his that would be a bit funny... "
I wish you the best, AC. It's happened to me several times, and I'm a little 'goosey' when the handwriting starts showing up on the wall.
"I know.. I was just trying to highlight the utterly ridiculous scams that pass for reality."
Umm, yes.... It's a little like whistling past the graveyard, if you will....
Very funny, Broward.
I'm beginning to think that what we are dealing with is the sum of all Zeros.
lawyerliz--finance the REOs.
we have it it all wrong.
banks should be valued like defense companies in wartime.
they both get paid primarily by the government.
and thrive on the destruction they cause.
\\\\\\\\\\\\\\\\\\\|||||||||||||||||||///////////////////
Maybe that's what happened to Misean, for awhile. .- lawyerliz
.
No alien abduction? Disappointing.
They ARE being paid like defense companies. Only cost plus plus plus.
lawyerliz--finance the REOs.
Calculated Risk,
I know that you will put up bank failures.. but I think that one article deserve some discussion. It has much more scarier implications than anything the FDIC could dish out.
How will people react when everything they were told by the PTB to be true, turns out to be a scam?
//April 16, 2009, 4:28 PM (http://krugman.blogs.nytimes.com/2009/04/16/reconsidering-a-miracle/)
Reconsidering a miracle
In preparation for some recent teaching, I went back to something that was a hot topic not long ago, and will be again if and when the crisis ends: the apparent lag of European productivity since 1995. One recent, seemingly authoritative study is van Ark et al; and I noticed something that gave me pause.
In their paper, van Ark etc. identify the service sector as the main source of America's pullaway - which is the standard argument. Within services, roughly half they attribute to distribution - roughly speaking, the Wal-Mart effect. OK.
But the other half is a surge in US productivity in financial and business services, not matched in Europe. And all I can say is, whoa!//
" Basel Too (member) wrote on Fri, 04/17/2009 - 3:04pm.
Is anybody besides myself expecting a respite from layoffs in the next couple months?
Many of the private sector cuts have been preemptive, so a respite is not unreasonable. The next wave is going to be from the public sector, which so far have been few, mostly furloughs. Most budgets for next year have not been finalized, so it's going to be interesting to see what happens."
Beat me to it; I'm a public university staffer in California. We already had a layoff, and will have more if the revenue propositions in the May special election (mandated by the ugly state budget deal) don't all pass. And it doesn't look like they're all going to.
In the public schools, plenty of teachers and staffers have gotten their pinkslips for fall because the guaranteed $$$ isn't there. This isn't uncommon, and generally the money turns up. But not this time. Plenty of municipal budget years turn over on June 30 as well. Expect some public sector carnage no matter what the private sector does.
I will say you won't see the great mass of public employee layoffs _starting_ until about two months from now.
" Basel Too (member) wrote on Fri, 04/17/2009 - 3:04pm.
on a related note, the stimulus plan is wrecking havoc on many state budgets. because receipts of many of the funds require that no cuts be made in certain areas (health care, education), states are forcing "disfavored" sectors absorb a larger brunt of the shortfall."
LMAO!! I did not realize that little side effect. That is a favorite ploy to raise taxes in many states - spare the useless programs, and threaten education, health care, etc. No one wants to cut education, so the sheople swallow the tax hikes.
maybe some states will actually have to cut some fat? Nah, i am not that optimistic.
Well, after the Black Plague, which all the prayers in the world didn't cure, came a flattening of the social pyramid, and eventually, the Renaissance. and the Reformation in which an awful lot of angel pin dancing was discussed, but which helped people to think. It did take an awfully long time by our standards.
lawyerliz--finance the REOs.
banks and defense companies business model is to get paid to blow stuff up.
\\\\\\\\\\\\\\\\\\\|||||||||||||||||||///////////////////
Why your taxes could double - CNN
David M. Walker served as comptroller general of the United States and head of the Government Accountability Office from 1998 to 2008. He is now president and CEO of the Peter G. Peterson Foundation.
David Walker says the federal debt could double, forcing huge increases in your taxes.
http://www.cnn.com/2009/POLITICS/04/15/walker.tax.debt/index.html
That is along the lines of what I have been thinking. It will just happen far faster than before.
//Well, after the Black Plague, which all the prayers in the world didn't cure, came a flattening of the social pyramid, and eventually, the Renaissance. and the Reformation in which an awful lot of angel pin dancing was discussed, but which helped people to think. It did take an awfully long time by our standards.//
the weird thing is they blow themselves up if the taxpayers don't pay them.
suicide banker extortion racket.
\\\\\\\\\\\\\\\\\\\|||||||||||||||||||///////////////////
This is a random thought, but do you think people in 1930 knew what was ahead of them, or do you think they, too, were talking of green shoots around this time?
I haven't done enough research, or talked to anyone who was around then, but it would be interesting to know what the conventional thinking was around 1930. I know others have posted newspaper headlines from that time, but I didn't read them...
Hahahahahaha..
"Why your taxes could double - CNN"
Hoover declared the depression over in late 1930.. unfortunately reality had other plans.
//This is a random thought, but do you think people in 1930 knew what was ahead of them, or do you think they, too, were talking of green shoots around this time?//
Please, the whole idea of money is on the chopping block. We need to structure Alpha-ness in some other way.
The debt can't be paid back and so it won't.
lawyerliz--finance the REOs.
There were many days I wish I could have gotten fired.
fun animated map - EHP
Ooooohhh, map! Pretty map... aww, pretty map cause computer to lock up.
In June 1930 a delegation came to see him to request a federal public works program. Hoover responded to them by saying: "Gentlemen, you have come sixty days too late. The Depression is over." He insisted that "nobody is actually starving" and that "the hoboes...are better fed than they have ever been." He claimed that the vendors selling apples on street corners had "left their jobs for the more profitable one of selling apples."
(http://www.digitalhistory.uh.edu/database/article_display.cfm?HHID=466)
Hey scone, it ran really slowly for me but it did run.
Not sure you really wanna watch the red circules expand and expand.
lawyerliz--finance the REOs.
ghostfacedinvestah wrote on Fri, 04/17/2009 - 3:36pm.
This is a random thought, but do you think people in 1930 knew what was ahead of them, or do you think they, too, were talking of green shoots around this time?
That book "Only Yesterday" that's been linked here several times was written in 1931. As well written and insightful as it is the author talks about the Depression of 1929-1931 as an event that's basically come and gone.
I think that's part of why the assessment is more honest and sober - it wasn't distorted by the political lens created by the ultimate magnitude of the Great Depression. Then it was only a depression created by a "mob mentality" in the markets, not evil right wingers who refrained from spending like maniacs.
"When everybody thought it was over it had only just begun."
lawyerlizinMI,
You are agreeing with me!! I am harvesting some more souls.
It is not so much about money, as about creating a minimum living standard that is lower middle class at the worst. Anything lower will cause the system to collapse.
//Please, the whole idea of money is on the chopping block. We need to structure Alpha-ness in some other way.
The debt can't be paid back and so it won't.//
" Lucifer (member) wrote on Fri, 04/17/2009 - 6:38pm.
Hoover declared the depression over in late 1930.. unfortunately reality had other plans."
IIRC, his campaign slogan was "Prosperity is Just Around the Corner".
The productivity gains were an illusion.
The bonuses and low-taxed capital gains were real.
Bank U - is it:
1) BK TUNA, or
2) Big KahUNA?
An interesting trend in the 4 bears.
There is a perceptible shift of about 3-4 month starting at 9th to 12th month of current crisis.
Looking at the timeline of the crisis what event took place in the 9th to 12th month.
Very obvious that Countrywide was at brink of bankcruptcy that was averted by Government help and BofA Buyout.
So the inevitable was pushed out by 3 month when Lehman filed for Bankcruptcy.
Quite easy to do a shift and put things in perspective.
There do seems to be several other small delays but overall pattern seems to be holding exteremely well.
-PBS
http://timeline.stlouisfed.org/index.cfm?p=timeline
===================================
June 5, 2008 | Federal Reserve Press Release
The Federal Reserve Board announces approval of the notice of Bank of America to acquire Countrywide Financial Corporation.
June 5, 2008 | SEC Filing
Standard and Poor's downgrades monoline bond insurers AMBAC and MBIA from AAA to AA.
June 25, 2008 | Federal Reserve Press Release
The FOMC votes to maintain its target for the federal funds rate at 2.00 percent.
July 11, 2008 | FDIC Press Release
The Office of Thrift Supervision closes IndyMac Bank, F.S.B. The Federal Deposit Insurance Corporation (FDIC) announces the transfer of the insured deposits and most assets of IndyMac Bank, F.S.B. to IndyMac Federal Bank, FSB.
July 13, 2008 | Federal Reserve Press Release
The Federal Reserve Board authorizes the Federal Reserve Bank of New York to lend to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), should such lending prove necessary.
July 13, 2008 | Treasury Department Press Release
The U.S. Treasury Department announces a temporary increase in the credit lines of Fannie Mae and Freddie Mac and a temporary authorization for the Treasury to purchase equity in either GSE if needed.
July 15, 2008 | SEC Press Release
The Securities Exchange Commission (SEC) issues an emergency order temporarily prohibiting naked short selling in the securities of Fannie Mae, Freddie Mac, and primary dealers at commercial and investment banks.
July 30, 2008 | Public Law 110-289
President Bush signs into law the Housing and Economic Recovery Act of 2008 (Public Law 110-289), which, among other provisions, authorizes the Treasury to purchase GSE obligations and reforms the regulatory supervision of the GSEs under a new Federal Housing Finance Agency.
July 30, 2008 | Federal Reserve Press Release
The Federal Reserve Board extends the TSLF and PDCF through January 30, 2009, introduces auctions of options on $50 billion of draws on the TSLF, and introduces 84-day TAF loans. The FOMC increases its swap line with the ECB to $55 billion.
August 5, 2008 | Federal Reserve Press Release
The FOMC votes to maintain its target for the federal funds rate at 2.00 percent.
August 17, 2008 | Federal Reserve Press Release
Following an intermeeting conference call, the FOMC releases a statement about the current financial market turmoil, and notes that the "downside risks to growth have increased appreciably."
September 7, 2008 | Treasury Department Press Release
The Federal Housing Finance Agency (FHFA) places Fannie Mae and Freddie Mac in government conservatorship. The U.S. Treasury Department announces three additional measures to complement the FHFA's decision: 1) Preferred stock purchase agreements between the Treasury/FHFA and Fannie Mae and Freddie Mac to ensure the GSEs positive net worth; 2) a new secured lending facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; and 3) a temporary program to purchase GSE MBS.
September 14, 2008 | Federal Reserve Press Release
The Federal Reserve Board expands the list of eligible collateral for the PDCF to include any collateral that can be pledged in the tri-party repo system of the two major clearing banks. Previously PDCF collateral had been limited to investment-grade debt securities. The Board also expands the list of collateral accepted by TSLF to include all investment-grade debt securities and increases the frequency of Schedule 2 TSLF auctions and total offering to $150 billion. The Board also adopts an interim final rule that provides temporary exceptions to Section 23A of the Federal Reserve Act to allow insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market.
September 15, 2008 | Bank of America Press Release
Bank of America announces its intent to purchase Merrill Lynch & Co. for $50 billion.
September 15, 2008 | SEC Filing
Lehman Brothers Holdings Incorporated files for Chapter 11 bankruptcy protection.
=========================================
Calculated Risk,
Honestly, How do you think the average person is going to take that?
Everything they believed in from pensions, savings, 401ks, retirement plans, real estate, productivity gains... everything of any long-term consequence to them turned out be a scam.
Wait till they realize that the medical system is another scam (doctors are not good at treating most chronic diseases).. Acute and sub-acute diseases are easy and cheap to treat.. most treatments for chronic diseases does not affect the rate of complications or life expectancy.
Too bad, it mugged him.
//IIRC, his campaign slogan was "Prosperity is Just Around the Corner"//
" Lucifer (member) wrote on Fri, 04/17/2009 - 6:49pm.
Too bad, it mugged him."
That was my point-
Well, it isn't a Big Kahuna. Trust me on that.
lawyerliz--finance the REOs.
Totally OT but I can't get over my disgust at Obama bowing to a king. I don't care if W kissed him on both cheeks. My loyalty is to the Constitution.
Lucifer, you are right. People have no idea that they are getting poor medical care. If there is little to no charge and the doctor is nice to them, they are happy.
There were definitely productivity gains in finance. It would take generations prior to this one at least 10 or 20 times as long to lose a trillion dollars.
----
"no one is pricing in low, mid teens unemployment in any of their assumptions." - Meredith Whitney
"I didn't think it was conceivable that policy-makers would attempt to address this problem by making lenders whole with public funds. This is an ethical abomination, putting the public in the position of absorbing the losses that should properly be borne by those who provided capital to these institutions. It is not sustainable. What it does is place the public in the position of losing first, but it will not, and cannot prevent the ultimate failure of the debt – for the simple reason that without restructuring, the debt can't be serviced." -- Mish Shedlock
And yet we'll still have BFF (can't make everyone whole in Humpty Dumpty land)
.........Krugman : Green Shoots and Glimmers ........
http://www.nytimes.com/2009/04/17/opinion/17krugman.html
........listen carefully to this hero of all doomsters.........
Hey scone, it ran really slowly for me but it did run.
Not sure you really wanna watch the red circules expand and expand.
lawyerliz
.
I'm on the basement machine now, it's running, slowly. My laptop is near death. But it's hard to throw away stuff that still works. We've got a LaserJet and a Hammond down here, seriously.
"Everything they believed in from pensions, savings, 401ks, retirement plans, real estate, productivity gains... everything of any long-term consequence to them turned out be a scam. "
The public got burnt playing with snakes generally are clueless to how it works. Lazy and uninformed people are not victims.
Don't get me started on medical care.
Life expectancy increases not with more med care, but with more prevention and public health measures such as good water, good nutrition and persuading people not to smoke.
My 3 mantras:
90% of everything is wrong.
There is no normal
The map is not the territory.
Oh, yeah, and for the greenies: there is no "away". ( as in throw away)
lawyerliz--finance the REOs.
Does anybody here have a valuation measure (besides that used by Ken Fisher) that shows the stock market under-valued at this point?
Also, does anybody know how to get real-time measurements of "q"? That's the valuation measurement upon which the book "Valuing Wall Street: Protecting Wealth in Turbulent Markets" is based...
http://www.amazon.com/Valuing-Wall-Street-Protecting-Turbulent/dp/007138...
"BTW, I think something we're going to need to consider in the future is that the whole reason FDR was able to afford the New Deal was because people like Hoover came before him, and that lacking any Hoover types over the past several decades we now aren't able to afford government spending when it might genuinely do some good."
excellent point. Taxcut anyone?
p.s. just google-earthed Chinese military build up. (pentagon is not bluffing it is real.) If we keep looking like weaklings on trade issues & this crisis lasts for a while, there might be blood. There is no xxxx.ing way Taiwan will be able to stop them.
@yogi
And how can productivity be rising when we're all blogging and texting and twittering ALL the time? Maybe we really don't need to work 40 hour weeks?
Medical system works great for me. Sure some tuning is in order. The problem is like always no one wants to pay and expects first class service. That is what the liberals pound in you head is just victimization..
lawyerlizinMI,
The biggest contributors to increased life expectancy.
1. Clean drinking water.
2. Functioning sewage systems.
3. Food safety regulations.
4. Antibiotics
5. Childhood Vaccinations.
6. Better and timelier emergency care (accidents, strokes, heart attacks, infections).
7. Safer surgical procedures (though some are not very useful).
8. Better surgical methods (eye lens replacement, joint replacement).
9. Better prevention of stroke (anti-hypertensives) and heart attacks (statins and aspirin).
10. Jobs with lower physical wear and tear + better occupational safety.
11. Earlier diagnosis and treatments for cancers.
Jim, you are the man and thank you for telling it like it is!
----
"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails." -- William Arthur Ward
also, it's interesting that SHITTY group wrote down x 3 less (4.5 bl) in their loan portfolios, while their default rates (CR thanks for graphs) went up by number of points... (200+)
"And how can productivity be rising when we're all blogging and texting and twittering ALL the time? Maybe we really don't need to work 40 hour weeks?"
No doubt. Less then 60hrs a week was part time to me and we didn't have the distractions of today!
Bullshit!. The largest % of costs in our current system come from
1. Intensive care of old and extremely ill people (many of them just want to die in peace).
2. Ineffective treatments for late stage terminal cancers (when the person is great pain, cancer is not responsive to anything, extensive metastatization.
and the biggest
3. Heathcare insurance costs, doctors salaries and other assorted scams.
//The problem is like always no one wants to pay and expects first class service.//
How do you know Ben?
Looked at statistically the benefits are not worth the costs. Suppose that money was spent on things that we know would help people?
There would be some losers, but there would be more winners, I think.
.
No BFF? Liz twiddles thumbs.
lawyerliz--finance the REOs.
You forgot
1. Peace
Metcalf Bank, Lee's Summit, Missouri, Assumes All of the Deposits of American Sterling Bank, Sugar Creek, Missouri
= FAILED
On Friday, April 17, 2009, American Sterling Bank, Sugar Creek, MO was closed by The Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
Metcalf Bank, Lee's Summit, Missouri, Assumes All of the Deposits of American Sterling Bank, Sugar Creek, Missouri
How do I know?
Heart attack, Six years of Chemotherapy. $100K hit of liquid radiation, I will never be back to what I was but still kicking the best I can. Not to mention the seven elders we had use the medical system, those who could pay and some who didn't.
Needs a bite of work but it should never be a free ride.
Number of hours has little to do with productivity, especially in a mental-intensive endeavor like finance. Blogging and twittering represent much greater productivity gains than structured finance.
Like a bunch of vultures descending onto a June Bug!
"Over 1,500 farmers in an Indian state committed suicide after being driven to debt by crop failure, it was reported today.
The agricultural state of Chattisgarh was hit by falling water levels.
"The water level has gone down below 250 feet here. It used to be at 40 feet a few years ago," Shatrughan Sahu, a villager in one of the districts, told Down To Earth magazine
"Most of the farmers here are indebted and only God can save the ones who do not have a bore well."
Mr Sahu lives in a district that recorded 206 farmer suicides last year. Police records for the district add that many deaths occur due to debt and economic distress."
http://www.independent.co.uk/news/world/asia/1500-farmers-commit-mass-su...
Can you say that about clean water supply, sewage treatment facilities, firefighters, army, police, roads, rails, ports, electric grids?
Good medical care is a part of the infrastructure of any first world country. It should not bankrupt people.
//Needs a bite of work but it should never be a free ride.//
The Chuck Grassley solution is fine for poor farmers or loggers. When a bankster jumps, there will be a safety net.
Blogging and twittering represent much greater productivity gains than structured finance. -yogi
.
So we have highly productive entertainment, and pay less attention to our day jobs. That explains a lot.
Bob Dobbs, I have a question. Univ of CA students from out of state pay much more than those from in state. Instead of reducing enrollment, why not fill those slots with more people from out of state?
If things do go terribly wrong, please remember: The most important factor in survival is Community. Not guns, not personal fortresses, not two years' worth MREs, but Community, close social networks, friendships, exchange of skills, traditions and support. Community.
Pavel Chichikov
Damn, 4:26 = me.
NEW POST at Calculated Risk.
Ways to view:
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For live chat, and the new Mishbot feature, as well as notice of new posts on other blogs, join us in IRC.
To access IRC with firefox, install the chatzilla add-on and go to irc://irc.realize.org:9996/calculatedrisk.
Or set your IRC client for server irc.realize.org port 9996 and /join #calculatedrisk.
Feed back via bobn
"Good medical care is a part of the infrastructure of any first world country. It should not bankrupt people."
Good personal financial disciple would not BK most people. It sure didn't BK me coming from a blue collar industry. There is the real problem leaving beyond your means and cling to the liberal victimization for an excuse.
"Can you say that about clean water supply, sewage treatment facilities, firefighters, army, police, roads, rails, ports, electric grids? "
I propose to add a stable currency.
That is a good example of the government not doing its job!.
It provides free electricity but restricts the ability of farmers to choose, sell or process their crops.
It does not build dams and other infrastructure to store and use rainwater.
It prevents farmers (directly and indirectly) from using better technology.
What did you expect?
"Over 1,500 farmers in an Indian state committed suicide after being driven to debt by crop failure, it was reported today."
The government is borrowing money very cheaply now. The stimulus bill provides for a 65% COBRA subsidy. The employer pays that 65% and gets a quarterly tax credit. So, it could be considered a loan to the gov't at 0% for up to 90 days.
and Jobs + SS Pensions + Medicare.
"I propose to add a stable currency"
Blogging and twittering represent much greater productivity gains than structured finance. -yogi
.
"So we have highly productive entertainment, and pay less attention to our day jobs. That explains a lot. "
Is this discussion mere entertainment for you? If more bankers and regulators read this blog we would be more productive.
What if you get in a car accident because of a drunk driver and end up with extensive surgery, disability and prolonged hospitalization and rehab?
Or get a heart attack or stroke.. many people who get either have no warning signs or measurable abnormailities. Or get an auto-immune disease? .. I can go on..
T"here is the real problem leaving beyond your means and cling to the liberal victimization for an excuse."
That is what insurance is for, part of a responsible financial discipline. The government now will provide for those who fall through the cracks.
I didn't get the advanced notice about my medical problems either. It is called life and S=it happens.
OT on CNN: Trinidad has some fine high officials.
What if that "insurance" was run by one publicly accountable agency. I am not suggesting that we have a byzantine bureaucracy.. just one publicly accountable non-profit company.
Private for-profit insurance is part of the problem.
//That is what insurance is for, part of a responsible financial discipline.//
"Private for-profit insurance is part of the problem."
What is the problem with profit? That is how hard working smart people make money. Do you work for free? That is what you are asking so you get discounted services. Insurance in normal times is regulated on state levels and can be shut down before they fail. I had one fail but never lost coverage until renewal time can. Life has never come with a warranty. It is up to each individual to cover their ass. Medical insurance can be traced to excessive hospital charges to cover mandated ER services that go uncollected for the poor and is abused. Fix things like that and rates will start to come down.
Is this discussion mere entertainment for you? If more bankers and regulators read this blog we would be more productive.
.
You're assuming they would (a) understand the information (b) know what to do with it and (c) have the power to act on it effectively. Pretty heroic assumptions, don't you think?
Although I still don't understand how that could be "more productive" in any measurable sense. In fact, I don't understand how "productivity" applies to "think" jobs at all. I'm not snarking, I really don't see how the concept of "productivity" can be usefully applied to creative jobs where you're trying to come up with new stuff. It's not like you can get a brilliant new idea on command, once an hour or so.
Fix things like that and rates will start to come down.
While we are fixing that, can we also fix that thing where insurers pay dividends to shareholders and pay CEO's 8 figure salaries?
There should be no profit in the health care industry for anyone who hasn't been to medical school.
I was reading what CalculatedRisk and lucifer had to say... and I think the effects will be quite bad for both current and future generations. Shattering the myth that has been perpetuated by the ponzi finance cheerleading channel cnbc, and what has become common "advice" will really hurt people's belief systems. Its like when some people lose religion. I figure it will have that sort of effect on people.
Case in point I ,go home all the time to my parents and they I suppose their whole life have bought into the put money in 401ks, put money in stocks, put money in housing mantra. It has "worked" out for them during their adulthood. But it hasnt worked for me and even when I was growing up I questioned it (my grandma basically watched cnbc all day... and took care of us in the summers. I've been watching passively since I was 10-11 years old) since it didnt quite make sense.
The whole time growing up I was thinking... wait if everyone puts their money in a big pool, there no way everyone can win. I mean I have just assumed "investing" was basically playing poker, just it was considered "legitimate". But everyone seems to believe that everyone won. At least thats how it was presented to me by the media and my family. I tended to just accept it was a poker game that everyone was in on, and I have lost some money to someone with a large chip stack. I'm just somewhat glad this happened now, so I do not lose hugely when I'm 50 like a lot of others.
Lastly I think a lot of people in their 20-30s will soon realize that the last generation royally screwed us. Hopefully it changes america.
Lucifer,
Your Committee of Public Safety "came under the control of President George Bush," unleashed under a series of rulings by his his Secretary of Justice abrogating the Geneva Conventions, digital surveillance without judicial warrant on Americans, Homeland Security, and the like. You're approximately six years late in drawing alarm or attention, like the tea baggers, most of whom would gladly deep-six all of the Bill of Rights except the second's right to "bare arms." Obama is a Constitutional Lawyer, already has released the Justice Department's suspect rulings on rights, and may be your last, best chance to avoid the Robespierran purges that, in the USA, will come from the right and its Gestapo, not from Obama.
I'm getting a little weary of the calls of fascism in the last 45 days, when the closest we've come since FDR's internment of the Nisea came under the blessing of the Republican Congress and George W, with the blessing of the evangelicals.
By the above, if you really are intending to draw attention to American fascism in our home-grown form of homeland surveillance, Guantanamo Bay's unabashed violation of Geneva Code (to the peril of our own military in future conflicts including Afghanistan), and the Nixonian-derived doctrine under George W that the Executive Branch can do whatever it feels justified to do under War Powers authority and unlimited Executive Authority Constitution be damned (and with the blessing of Scalia), then my abject apologies to your attentiveness.
If so, this post would be appreciated five years ago, rather than now, where I feel the timing is suspect, to say the very least. Constitutional liberties most likely will be abregated without limit by the right in America, not the left, probably after another domestic terrorist episode like 9-11. Bush paved the way, and Limbaugh and his ilk will learn lessons from the master and next time not draw back. The Democrats and Constitutionalist Republicans will shrink in fear of the populace, as they did before.
That's my prediction, and recent history, especially the doctrine of Executive Impunity, bears it out. Rush Limbaugh, before the election of Obama, as well as Bush's Justice lick-spittles (Grima Worm-tongues?), pretty much plagiarize G. Gordon Liddy's doctrines that the President can't possibly abrogate the law, since he is elected. This is drawn directly from the National Socialists. Why fear the left--they'll be gone, with gay marriage, the first act of domestic terrorism, and once the unregulated bank orgy consequences hit the national balance sheet in the last election. If I were a conspiracy monger like you, the nomination of Palin and McCain would just confirm this theory--that Republic-fascists intentionally lost the election to tar the Democrats irretreivably with the afterblow of the housing bubble, Iraq (unfunded), taxcut deficits, and U.S.'s inability to retain its post-WWII hegomony (given the Reagan to Bush tax cut deficits and intentional gift of American wealth to Citi, Goldman, and the rest of the FIRE sector). But that would be conspiracy-mongering, would give the Repubs way too much credit, so I don't believe in that level of competancy. I do believe that the fallout of the last two Bush terms will be handed to the Democrat, as well as the fallout from Iraq, the taxcuts, and the dereq (which Clinton and Rubin and Schumer deserve 1/3 credit).
If your argument is that Obama is Robespierre, then you're full of crap. Bush, maybe. And I'm not referring to the elder Bush, for whom I have some respect. Obama is a constitutionalist, a postmodern one, but not a fascist in his heart of hearts like President Shrub.
Morganthal (i.e., right wing traditionalist tea bag): "Liquidate the banks, liquidate labor, liquidate the farmers. . ."
Then the 1929-1932 slump, then Roosevelt, then the New Deal.
My grandfather in Rural Oklahoma: "After we and everyone else lost our farms, and unemployment (in Oklahoma) went to 25%, and people were starving, and I worked 4 part-time jobs including picking cotton in the fields with your father (5 years old) to eat, and Uncle
Bert went to California in search of work and we never heard from him again, and we lost your dad's little brother (3 years old) to appendicitis, thank God for Roosevelt's Work Corp, that gave me work and enough money to keep the family from starving.
That's a bit of a summary and I can't remember the exact quote. But he was a straight arrow, about as conservative as they come, and those of you underestimating the effects of deflation on the lower-class and less-advantaged economies, if you're looking to 1930 as your model for restricting Federal spending and the government's role in a real deflation--are fooling yourselves, badly.
I'm not convinced we're yet in a deflationary spiral like 1930-1934, and pray we aren't. If we are, then you better pray Obama and Congress spends like drunken sailors or your children and you may be picking cotton and watching your youngest die of appendicitis. I don't wish that on anyone; Dad (78) still tears up when he remembers his beloved younger brother. He doesn't care about the prison labor, just the unneeded deaths that are the collatoral damage of an economy working at 20-40% below its potential.
Again, I'm usually a fiscal conservative. But if this truly is deflation, budget balancing and careful fiscal policy will not help us. And if FDR and the government is not willing to intervene, well then, look at European history in the 1930s if the intent here is the lessons of history. I'm still hoping, by the way, that this is just a more severe recession than 1980-1982 but the reset of Alt-As and Option ARMS suggest to me that 1/2 of the big 10 banks are likely to go down. My regret is that Geithner appears not to recognize this as a probability and is not properly advising Obama of the probabilities. But maybe I'm just paranoid. If that's the scenario, we better be spending in the public sector out the wazoo, or this could be end of capitalism. I don't think the right properly gives FDR his just credit on this, but then I'm a liberal at heart, like my grandfather was despite himself, not like my evangelical 50's father who was lucky enough to be child during the early 30's not a father afraid his only surviving son would starve before the "green shoots" reemerged.
Grandfather, by the way, was one of the more talented persons I've known--carpenter, fly fisherman, electrician (built his own cabin in Colorado), rural postman, mason. If unemployment goes past 15%, then its katy bar the door.
Glad to see Jim the Realtor getting some big time pub. Have really enjoyed his videos.
He's also the kind of guy I'd hire if I were looking for a house in San Diego County.
ShortCourage, if you're still around, recent Q ratio stuff here:
http://can-turtles-fly.blogspot.com/2009/03/another-way-to-value-stock-m...
Anonymous wrote on Fri, 04/17/2009 - 6:56pm.
Truly an amazing post. Please let us pull out of this dive.
Anonymous wrote:
"If that's the scenario, we better be spending in the public sector out the wazoo, or this could be end of capitalism."
Oh, I sure hope so.
There's no point in spending a penny if the point is to save corrupt neoliberalism. You fret about kids dying of appendicitis, and then brag about being a fiscal conservative. You don't see the contradiction; already poor kids and adults in America suffer without adequate health care for your "fiscal conservatism," ie, antisocial greed.
No, free market fundamentalism is going to crash, and deservedly so. I certainly hope its chief villains will face pitchforks. What will follow is likely to be a return to clamping down on the imbecilities and viciousness that have brought us to this low hour. Almost certainly for many years it will be a form of hybrid capitalism-socialism/ Provided, of course, the tea-baggers don't put on swastikas, first.
Cardiac stress tests are performed by making the patient run until he/she can't any more, ekg changes are noted or patinet is symptomatic. The banks are already symptomatic with EKG changes and they are not running. And I don't think the STAT cath is working either. The patient has had massive a MI (heart attack) and is on a balloon pump and on a waiting list for a heart transplant.
all sales are final