Comments for "Further Bailout of Automakers Expected on Monday"
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/4061533164066472140
CRbot Fri Mar 27 21:26:53 2009 CDT #
Comrade Byzantine_Ruins says:
It's awesome fun til the money runs out. Tarponomics is vastly superior to real economic activity.
Comrade Byzantine_Ruins Fri Mar 27 21:27:45 2009 CDT #
Fair Economist says:
Well, at least it won't be going to the banks.
Always look on the bright side of life!
Fair Economist Fri Mar 27 21:31:50 2009 CDT #
citiprank says:
Sigh...I don't even know what to think... I think that a bankruptcy of GM would be pretty catostophic... but perhaps it's better to take our medicine now
Maybe instead of propping up GM and chrysler we should give money to ford and the supply chain to help keep the healthier ford in business.....
In fact it stil amazes me that we waste all our money on the worst banks.. when we should be helping the good ones
citiprank Fri Mar 27 21:33:36 2009 CDT #
jay says:
what are you nuts- must pay those bonuses to GM senior managers otherwise they might go and work somewhere else. The plan to be announced by Obama and Geithner will be as follows- workers must take a pay cut to minimum wage plus no benefits, all the Wall street investors must be made whole plus a little bit more for the suffering they have gone through and of course the managers must be given salary increases plus bonuses. And of course the kicker we must have new regulations to oversea the auto industry.
Sound familiar
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jay Sat Mar 28 14:26:57 2009 CDT #
Morocco Bama says:
It's a farce to call these things loans. As if this money will ever be paid back. In further news, NPR reported today that banks have to apply to return the TARP loans they have received. They just can't pay it back. The government has to accept and approve their application after a thourough review. Don't get me wrong, I feel no mercy for the greedy sharks who thought they could take that money without recourse, but I also find it ironically comical that the government is going to make it difficult for them to return it when they realize there are now strings attached.
Morocco Bama Fri Mar 27 21:33:56 2009 CDT #
Hymns for the Lord says:
It'll be paid back alright, just not to the taxpayers it came from. *DONT_KNOW*
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Hymns for the Lord Fri Mar 27 23:08:50 2009 CDT #
jay says:
it isn't the TARP money that is important to these sharks- that was always a distraction. It is the trillions that they are getting from the Federal Reserve without any kind of oversight that is the real pay off.
Any bank that is unable to operate without the benefit of special facilities from the Fed. is insolvent. The Fed used to have guidelines for the use of the discount window - those were the rules of the game that every bank should have managed to.
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jay Sat Mar 28 14:30:21 2009 CDT #
scone says:
Always look on the bright side of life! - FE
Thread music!
http://www.youtube.com/watch?v=jHPOzQzk9Qo
scone Fri Mar 27 21:34:03 2009 CDT #
citiprank says:
Oh and chrysler should get nothing... they aren't even a public company.
citiprank Fri Mar 27 21:34:07 2009 CDT #
citiprank says:
on the bright side propping up GM is a lot cheaper than propping up wall street and probably helps the economy quite it bit more :)
God I hate bailouts...... it's the whole mindset.. you bail out one guy and then what's your excuse for not bailing out everyone??? I mean are we going to be bailling out sears later down the road?
citiprank Fri Mar 27 21:36:01 2009 CDT #
Tupuli says:
I fear automaker bailouts are just deficit spending applied to political capital. Unemployed people in other industries (e.g. construction) aren't going to be too happy about the special treatment of autoworkers.
I'd hate to think what the environmentalist contingent within the democratic party has to say about this: "Oh, that industry that pissed on you for the last N decades, selling SUVs while circumventing CAFE standards, etc.? Yeah, well we're going to give them a few billion to ensure their survival."
Tupuli Fri Mar 27 21:36:35 2009 CDT #
REBear says:
Unlike banksters bailout, O it seems said that all interested parties have to make concessions or take the highway
REBear Fri Mar 27 21:36:36 2009 CDT #
jay says:
and you believe him???
I don't and I voted for him, campaigned for him and donated to him. So far he has been a great disappointment. Turned out to be the real Manchurian candidate. Wall Street must have brainwashed him during his years at Columbia.
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jay Sat Mar 28 14:32:33 2009 CDT #
Morocco Bama says:
We shouldn't be helping any of these businesses. If they can't cut it on their own, they can't cut it. End of story. Either we have Socialism or Capitalism or something new and unheard of here to for, but this freak show hybrid under which we are now operating is bizarre and untenable.
Morocco Bama Fri Mar 27 21:37:02 2009 CDT #
Oofa. says:
Either we have Socialism or Capitalism or something new and unheard of here to for
It's fascism. Governments and corporations working together is fascism. Put to bed all the visions of swastikas and Mussolini apoplectic on the balcony. We live in a system of participatory fascism.
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Oofa. Sat Mar 28 11:00:24 2009 CDT #
Comrade Bear (tj and the bear) says:
CR,
On your earlier auto sales post it seemed as though you weren't swayed by the Japanese domestic auto sales data I linked. I would posit that the turnover ratio is deceiving in these unprecedented circumstances, and that Americans possess far more cars than are necessary. Utilizing what we already have can easily substitute for replacement vehicles for quite some time. Not unlike household consolidation, which can (and will) profoundly add to excess supply.
Comrade Bear (tj and the bear) Fri Mar 27 21:40:12 2009 CDT #
Anonymous says:
Comrade Bear,
I don't think your post of Japanese domestic auto sales ever went through, or at least I couldn't find it.
Would you post it again?
Parent Post
Anonymous Fri Mar 27 22:53:12 2009 CDT #
1 currency now [yogi] :) says:
But the banks were profitable. They want to give back the money. Hey Obama, get the banks to lend straight to the automakers.
Oh, wait, the taxpayer wouldn't see any profit.
Oh wait Cerberus already owns Chrysler.
Oh forget it.
1 currency now [yogi] :) Fri Mar 27 21:40:25 2009 CDT #
citiprank says:
Morocco, I can tell you exactly what we have.... facism....
citiprank Fri Mar 27 21:40:55 2009 CDT #
Threads Must Die (aka bobn) says:
but this freak show hybrid under which we are now operating is bizarre and untenable.
Morocco Bama
I agree with you. Unfortunately, it only gets worse from here, IMO.
Threads Must Die (aka bobn) Fri Mar 27 21:42:37 2009 CDT #
Lifeguard1999 says:
My prognostication is that automakers will have sold more automobiles in March than they did in February. That will lead to dueling headlines: "Bottom of Recession in site! Automakers sell more cars!" versus "Automakers see 40+% fall in car sales."
Lifeguard1999 Fri Mar 27 21:43:54 2009 CDT #
bobn says:
citiprank: Yep, fascism from "both ends" of the political spectrum.
bobn Fri Mar 27 21:44:11 2009 CDT #
Counterpointer says:
Hey, shareholders, looking forward to the AGM?
Well, you need to have a voice at those important meetings, no?
C
Counterpointer Fri Mar 27 21:45:32 2009 CDT #
citiprank says:
Actually bobn I think both of our parties are pretty simliar.... .really they talk a good game.. but both are bought and owned by the same people.
I call them fascist and fascist-lite
citiprank Fri Mar 27 21:45:50 2009 CDT #
Bob Dobbs says:
"Morocco, I can tell you exactly what we have.... facism...."
Fascism. You betcha. The Best People, the ones that count, are the ones that the state serves. As for the rest, here's a good description:
"Fascism a form of political behavior marked by obsessive preoccupation with community decline, humiliation or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion."
Does that sound BLOODY FAMILIAR?
Bob Dobbs Fri Mar 27 21:46:16 2009 CDT #
duke of con dao says:
Bob Dobbs writes: .... a mass-based party of committed nationalist militants. whereas Europe had such movements appearing at various times through their history we, in the States, have never had such a tradition. perhaps, you think that such a thing will spring forth from Zeus's head fully formed...
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duke of con dao Fri Mar 27 22:48:44 2009 CDT #
Comrade Bear (tj and the bear) says:
Morocco Bama,
That's why I'm rooting for a quick blow up of the Treasury market. Come what may, best to get past all these damned political games and face up to reality.
Comrade Bear (tj and the bear) Fri Mar 27 21:46:46 2009 CDT #
citiprank says:
maybe march sales are better due to there being 3 extra days :)
lol
citiprank Fri Mar 27 21:46:47 2009 CDT #
Counterpointer says:
Maybe Tarpistan needs a new national anthem? Can we prevail on Pavel to provide?
It's just the accompaniment that concerns me. Death metal seems appropriate but I'm not sure it'll play.
C
Counterpointer Fri Mar 27 21:48:24 2009 CDT #
Tupuli says:
Utilizing what we already have can easily substitute for replacement vehicles for quite some time. Not unlike household consolidation, which can (and will) profoundly add to excess supply.
Yep, I expect when "mom" loses her job that will generally mean 1 less car in the household. Not to mention the households where #cars > #people, the auto equivalent of the 2nd home.
/joining the "CR's auto replacement numbers are bogus" bandwagon.
Tupuli Fri Mar 27 21:48:29 2009 CDT #
citiprank says:
Bob Dobbs... your definition reminds me of the laws being proposed in several states to randomly drug test people on unemployment.... and it also makes me think of all the "support the troops" propaganda
citiprank Fri Mar 27 21:48:48 2009 CDT #
hong konger says:
I must say, I can't figure out where Obama is going with all this. By experience, my assumption is a power play or to extract some measure for himself and allies, but, I can't see the endgame yet.
His personal motives will reveal themselves within 6 months would be my guess.
I will say he is a steady hand. Overall, I'm impressed (from a political point of view).
Of course, he may be be scared shitless, too.
At this point, he's kind of a cat in a box (with all due respect to Schrodinger). That is, you don't know til you look in, and it could go either way.
hong konger Fri Mar 27 21:49:29 2009 CDT #
Morocco Bama says:
I do believe certain elements of Fascism are present and the seeds have been planted, but we in no way have the unmitigated, in your face Fascism of the Third Reich. That's still to come, and we will no it when we see it.
Morocco Bama Fri Mar 27 21:49:42 2009 CDT #
citiprank says:
Comrade Bear... are you saying we need to crisis really pushed upon us? If so I agree... TPTB will muddle through under the old system as long as possible
citiprank Fri Mar 27 21:49:49 2009 CDT #
Lifeguard1999 says:
What are we to make of the Gilt bond failing?
http://www.bloomberg.com/apps/news?pid=20601087&sid=adIolrhZO.iQ&refer=home
Lifeguard1999 Fri Mar 27 21:49:50 2009 CDT #
bobn says:
citiprank: hence the quotes in "both ends". there are no rightists or leftists - there are only the Bought And Paid For - henceforth the BAPF.
bobn Fri Mar 27 21:50:11 2009 CDT #
citiprank says:
"Fascism will come carrying a cross and wrapped in the flag"
citiprank Fri Mar 27 21:52:06 2009 CDT #
Bob the Builder says:
"Fascism will come carrying a cross and wrapped in the flag" : Empirically false. Writen before the rise of Fascist states. Which were the result of economic hardshim and militatry defeat. Not saying Im a fan of Theocracy or gingoism. Just saying the prediction was wrong and is today.
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Bob the Builder Fri Mar 27 22:10:25 2009 CDT #
Robert Jarrett says:
KKK? Southern politics (after Nixon's Southern strategy)?
I'm not sure at all that the comment is empirically false in American political context. If you're referring to European politics between WWs (which is the cauldron of historic fascism), then your comment is of course quite correct.
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Robert Jarrett Sat Mar 28 16:10:40 2009 CDT #
citiprank says:
Bobn... gotcha.. although I always think more of "from both ends" (as in taking it from both ends) when thinking of politicians
citiprank Fri Mar 27 21:52:53 2009 CDT #
1 currency now [yogi] :) says:
No one wants pure socialism or capitalism.
The freakshow is socializing the losses only.
1 currency now [yogi] :) Fri Mar 27 21:53:59 2009 CDT #
Bob the Builder says:
I do. Capitalism please. and Freedom in all aspects of life. (But I repeat myself.)
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Bob the Builder Fri Mar 27 22:07:03 2009 CDT #
homedad43 says:
Just read thru the previous thread.
CSC
Misean
Elvis
Banker
etc.
I think that it's the Rapture and Mises has taken them to the golden land...
homedad43 Fri Mar 27 21:54:47 2009 CDT #
Comrade Bear (tj and the bear) says:
citi,
I'm saying a day of financial and political reckoning is unavoidable, so why wait? Let's get it the hell over with and move on.
Comrade Bear (tj and the bear) Fri Mar 27 21:54:57 2009 CDT #
comrade mike says:
We may have a slight uptick in the economy before the massive printing of money takes hold and we get very high inflation levels.
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comrade mike Sat Mar 28 08:29:01 2009 CDT #
Anonymous says:
"What are we to make of the Gilt bond failing?"
People don't want to buy as many Gilts as offered.
Anonymous Fri Mar 27 21:55:29 2009 CDT #
homedad43 says:
Sorry, forgot Citizen Allen M.
As intellectually fascinating and nerve-wracking as this is, I'm starting to think that I'd like the denouement sooner than later.
Then we can get on with the cleanup and bury the bodies.
Corporate bodies, that is. Hopefully no real ones, or minimal at best.
homedad43 Fri Mar 27 21:57:38 2009 CDT #
Bob the Builder says:
There will be blood.
Parent Post
Bob the Builder Fri Mar 27 22:04:58 2009 CDT #
Anonymous says:
"...a day of financial and political reckoning is unavoidable, so why wait? Let's get it the hell over..."
But doing so completely changes everything so everyone who has power now will fight it to the end.
Anonymous Fri Mar 27 21:57:54 2009 CDT #
1 currency now [yogi] :) says:
I hope it's just some JS-Kit fatigue. Elvis was a regular riot.
1 currency now [yogi] :) Fri Mar 27 21:59:07 2009 CDT #
Tupuli says:
I will say he is a steady hand. Overall, I'm impressed (from a political point of view).
I think Obama misunderstands populism and will eventually be burned by it. You can screw J6P in numerous ways, but once you offend his interests in a way that is accessible to him, the backlash is swift and severe.
Giving GS $12B is OK because those are fictious numbers and J6P doesn't understand "counterparties". OTOH, watch out if J6P realizes that his neighbor stopped paying his mortgage 8 months ago and now lives rent free.
There are certain things that are untenable to J6P. Bailing out automakers (and therefore autoworkers) as unemployment runs in double digits is one of them. Giving 6-figure bonuses to people to wear suits is another.
I fear 15% unemployment. Should that group reach critical mass all bets are off.
Tupuli Fri Mar 27 21:59:24 2009 CDT #
comrade mike says:
You can bet on 15% unemployment with these clowns running Washington. Spend your way to wealth!
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comrade mike Sat Mar 28 08:31:20 2009 CDT #
Robert Jarrett says:
Already at 15% or thereabouts in California (U6). I think U6 is a better comparative figure, at least for 20 year backfigures. So all bets may be off already, since 6 states are reporting >10% (and u6 above 13%). Mish carried the table from the Commerce Dept. fairly recently, maybe Wednesday or Thursday post.
Parent Post
Robert Jarrett Sat Mar 28 16:07:43 2009 CDT #
citiprank says:
Not only do we only socialize losses.. we only socialize certain people's losses....
So back to the topic.. if we did let GM go under what do you guys think the impact would be? I've heard estimates of anywhere between 1 - 5 milion jobs gone.....
I'm wondering if that would really push us into full-blown GD terriroty
citiprank Fri Mar 27 21:59:47 2009 CDT #
citiprank says:
Agreed Yogi... Elvis was one of my fav posters.. guy was simply hilarious
citiprank Fri Mar 27 22:00:46 2009 CDT #
Michael says:
Totally relaxed
All power to the third eye
Open up the sky
see the folly of man.
Michael Fri Mar 27 22:00:52 2009 CDT #
homedad43 says:
I've commented to about five different people that I know re my belief that we are now in a fascist or near-fascist nation and there isn't one that disagrees.
Let's put the point on it, they not only don't disagree but they actually agree.
homedad43 Fri Mar 27 22:01:12 2009 CDT #
Comrade Bear (tj and the bear) says:
I'm wondering if that would really push us into full-blown GD terriroty
Again, we're already headed there, it's just the rate of descent that'd change.
Comrade Bear (tj and the bear) Fri Mar 27 22:03:19 2009 CDT #
Tupuli says:
So back to the topic.. if we did let GM go under what do you guys think the impact would be? I've heard estimates of anywhere between 1 - 5 milion jobs gone.....
Those jobs are going to disappear one way or another. I don't buy the better tomorrow than today argument. UE is going to increase for another year if not two.
Basically, it's only going to get harder to let them go.
Tupuli Fri Mar 27 22:04:59 2009 CDT #
1 currency now [yogi] :) says:
How are those stress tests coming along? Last news was Wells Fargo whining.
1 currency now [yogi] :) Fri Mar 27 22:09:04 2009 CDT #
Comrade Bear (tj and the bear) says:
There will be blood.
Yeah, but until then they're drinking our milkshake! :(
Comrade Bear (tj and the bear) Fri Mar 27 22:09:18 2009 CDT #
citiprank says:
"
<tbody>
I do. Capitalism please. and Freedom in all aspects of life. (But I repeat myself.)"
We used to have that.. it involved 10 year old kids working in factories for pennies a day
Be careful what you ask for
</tbody>
citiprank Fri Mar 27 22:10:01 2009 CDT #
Bob the Builder says:
"pennies a day" Cry me a river. What was a penny worth in those days? And what was the next best alternative? My grandmother worked in the factories when she was 14 during the deppression. And the whole family was thankful for it.
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Bob the Builder Fri Mar 27 22:14:28 2009 CDT #
Basel Too says:
How are those stress tests coming along?
Supposedly, Barclays passed the UK version (set to 1980s recession conditions); stock up about 30% in the last 2 days.
Basel Too Fri Mar 27 22:12:11 2009 CDT #
Dogbert says:
The numbers are staggering. Remember when $4 billion was a lot of money when those "enhanced" Bear Stearns funds turned out to be duds not too long ago?
Dogbert Fri Mar 27 22:12:21 2009 CDT #
Michael says:
I just thank God every day for the complete and total economic collapse of the United States; It will stop the evil people from completing their evil deeds.
Michael Fri Mar 27 22:12:28 2009 CDT #
citiprank says:
Bob the builder you are mistaking the causes of facism with the packaging and marketing of fascism
citiprank Fri Mar 27 22:14:00 2009 CDT #
homedad43 says:
Okay, so we let them go down. And replace them with what in terms of jobs with decent wages?
As much as I hate to see us a la UK in the '60s/'70s with uncompetitive nationalized industries, there is an element of national self-interest here. When they go, they will not be coming back. Frankly, probably the only way to then get a domestic auto mfr going if they go down (assuming Ford dies due to the loss of the suppliers) will be with government backing. And the retooling costs would be prohibitive.
We need to seriously rethink that whole free trade agreement. If the system is gamed by everyone else - esp the mercantilists - then screw it and protect our own citizens. They're going to be hurt in the present circumstances anyway. Let C go, prop GM for a period and then reconsider free trade.
homedad43 Fri Mar 27 22:14:34 2009 CDT #
Michael says:
Bilateral trade agreement will solve all our problems.
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Michael Fri Mar 27 22:33:00 2009 CDT #
1 currency now [yogi] :) says:
Oh, boy. I want the freedom to bargain collectively, to have an elected body control the supply of drinking water, power, etc.
I'm not inclined tonight to go back over the 8th grade difference between freedom and capitalism.
1 currency now [yogi] :) Fri Mar 27 22:14:41 2009 CDT #
citiprank says:
<tbody>
"pennies a day" Cry me a river. What was a penny worth in those days? And what was the next best alternative? My grandmother worked in the factories when she was 14 during the deppression. And the whole family was thankful for it."
yeah funny how all that seems fine when it isn't happening to you....
Are you serious? or are you 12?
</tbody>
citiprank Fri Mar 27 22:17:11 2009 CDT #
Tom Stone says:
Yep,fascism.Bush abandoned the Rule of Law,and Obama is just fine with that as are his owners.Some will learn SOON that without the Rule of Law NO ONE is safe in their person or property.oops.As far as the Automakers being bailed,local dealers do not seem to be suffering any shortage of cars,Freeman Toyota has Tundras at $12k off MSRP.Right now I would prefer a pony,you can eat them and make things out of their hides such as shoes.Broward could probably come up with other uses too...
Tom Stone Fri Mar 27 22:17:50 2009 CDT #
homedad43 says:
Yogi:
In the past seven months, two local high schools have produced the play "Urinetown", in which a water shortage causes all public restrooms to be shuttered. Sole control of the bathrooms is in the hands of a monopoly which requires prohibitive fees to use the stalls and anyone caught cheating is exiled to Urinetown.
They're selling out.
homedad43 Fri Mar 27 22:18:42 2009 CDT #
Threads Must Die (aka bobn) says:
Michael says:
I just thank God every day for the complete and total economic collapse of the United States; It will stop the evil people from completing their evil deeds.
Right, all the evil folks are in the USA. How's your Arabic, Michael? Or your Chinese?
Threads Must Die (aka bobn) Fri Mar 27 22:19:13 2009 CDT #
Michael says:
The collapse of the US brings down the rest of the world, dope.
Parent Post
Michael Fri Mar 27 22:25:08 2009 CDT #
1 currency now [yogi] :) says:
Yeah it did well here in NYC about ten years ago.
1 currency now [yogi] :) Fri Mar 27 22:20:33 2009 CDT #
Comrade Bear (tj and the bear) says:
And replace them with what in terms of jobs with decent wages?
We can't know what those are nor can we force them, but they will happen.
Perhaps by letting go of the old we'll be sowing the seeds of the new? One of those displaced engineers may invent the next generation of personal transportation and render the existing industry moot anyway.
Comrade Bear (tj and the bear) Fri Mar 27 22:20:34 2009 CDT #
citiprank says:
Does this remind anyone of america right after 9-11?
"Naturally, the common people don't want war, but after all,
it is the leaders of a country who determine the policy, and
it is always a simple matter to drag people along whether it
is a democracy, or a fascist dictatorship, or a parliament,
or a communist dictatorship. Voice or no voice, the people
can always be brought to the bidding of the leaders.
This is easy. All you have to do is tell them they are being
attacked, and denounce the pascifists for lack of patriotism
and exposing the country to danger. It works the same in
every country."
-Herman Goering, Hilter's Reich-Marshall
at the Nuremberg Trials after WWII
citiprank Fri Mar 27 22:21:55 2009 CDT #
Counterpointer says:
Ok, great comments people, I'm off, all the best to the late night crowd and the left coast.
C
Counterpointer Fri Mar 27 22:23:03 2009 CDT #
kidbuck says:
Bro BO does auto loans!
kidbuck Fri Mar 27 22:23:45 2009 CDT #
Michael says:
There is already blood on the southern border.
Michael Fri Mar 27 22:24:02 2009 CDT #
Black Star Ranch says:
.....BUSH II was bad - but THIS is a mental case. ANYONE who believes this is anything other than an asylum running the zoo needs to be committed as well. You wonder why I dropped out - even I never imagined THIS. What a zoo and circus act.
Black Star Ranch Fri Mar 27 22:25:53 2009 CDT #
Tupuli says:
The collapse of the US brings down the rest of the world, dope.
Even Cuba?
Tupuli Fri Mar 27 22:26:01 2009 CDT #
Threads Must Die (aka bobn) says:
Michael says:
The collapse of the US brings down the rest of the world, dope.
Wow, you are actually looking forward to an unparalleled disaster. You are truly sick.
Threads Must Die (aka bobn) Fri Mar 27 22:29:16 2009 CDT #
Anonymous says:
(aka bobn), you have to understand that Michael is one of the end-timers. The sooner we have Arrmageddon, the sooner the righteous will be "raptured".
Parent Post
Anonymous Sat Mar 28 00:53:06 2009 CDT #
Doc at the Radar Station says:
But the president’s task force will continue to consider a government-managed bankruptcy as a final resort for both G.M. and Chrysler, according to people familiar with the deliberations.
Sounds good to me, if they are viable and operating as a result. Maybe they will use this as a model for the financial industry and defang CDS and the related booby-traps.
Doc at the Radar Station Fri Mar 27 22:36:05 2009 CDT #
1 currency now [yogi] :) says:
What is a government-managed bankruptcy? Sounds like a distortion of Separation of Powers.
1 currency now [yogi] :) Fri Mar 27 22:39:48 2009 CDT #
CRbot says:
The Latest from Denninger:
What's Disturbing About The Truth?
CRbot Fri Mar 27 22:45:37 2009 CDT #
Doc at the Radar Station says:
Yogi, I think it has to do with the ability of the corporation to function afterwards, IOW not a liquidation event. Without the government intervention it would be a liquidation event and that's what they are trying to avoid because of the cascade effects. I think a few airlines went through this in the 1970s.
Doc at the Radar Station Fri Mar 27 22:45:46 2009 CDT #
citiprank says:
Doc.. didn';t UAL go through structured bankruptcy just a few years ago?
citiprank Fri Mar 27 22:47:54 2009 CDT #
Doc at the Radar Station says:
didn';t UAL go through structured bankruptcy just a few years ago?
Yep:
http://www.pbs.org/newshour/bb/transportation/july-dec02/united_12-09.html
Parent Post
Doc at the Radar Station Fri Mar 27 22:53:17 2009 CDT #
Thanatos Savehn says:
Survival of the unfittest is assured. Everything is as it should be in (dys)Utopia.
Thanatos Savehn Fri Mar 27 22:50:27 2009 CDT #
citiprank says:
Denniger makes a mistake that many people do.. to assume that somehow our govt used to be less corrupt back in the "old days"
I mean this country allowed legal slavery until the 1860s and Jim Crow until the 1960s... the situation is clearly much better now... at least you can't be enslaved or lynched simply due to the color of your skin
citiprank Fri Mar 27 22:52:13 2009 CDT #
skline2 says:
Now those lynchings will be based on wealth. It's time to look poorer than you are or you could be on the wrong end of a French revolutionary mob. It's already started with AIG bonus receivers.
Parent Post
skline2 Sat Mar 28 05:45:54 2009 CDT #
1 currency now [yogi] :) says:
So no actual Bankruptcy Court proceedings but under some other procedure covered by the Code?
I just read Saab is being restructured short of actual BK.
1 currency now [yogi] :) Fri Mar 27 22:53:54 2009 CDT #
Maximus says:
CR
just got done with my post for tonight then checked in here....couldn't be more timely....
Aristotle gets it, but our government "apparently" does not.... http://4best4worst.wordpress.com/
Maximus
Maximus Fri Mar 27 22:55:15 2009 CDT #
citiprank says:
By the way.. .IF you are a premier or primer exec United Airlines is fantastic.. but I wouldn't recommend it for anyone else
I'm actually amazed that any non-business travelers use the big airlines...
It's like two worlds really
citiprank Fri Mar 27 22:55:45 2009 CDT #
Basel Too says:
What is a government-managed bankruptcy?
A government BK is basically a private law in which Congress, not the BK courts, establishes who gets what. It's not a separation of powers issue because the BK courts are Article I courts.
Basel Too Fri Mar 27 22:55:46 2009 CDT #
1 currency now [yogi] :) says:
So they set up an Ad Hoc? If you have a gripe you go to Federal Court for due process?
Parent Post
1 currency now [yogi] :) Fri Mar 27 23:06:01 2009 CDT #
duke of con dao says:
Comrade Bear - the There will be Blood milkshake reference makes me think I should do something with that clip in a vid mash-up. Did you see the hilarious send-up that SNL did on that? As much as I think Day Lewis is a great actor directors (Scorsese & Anderson) ive him too much rope. In 'Blood' is acting became downright kabuki.
duke of con dao Fri Mar 27 22:56:10 2009 CDT #
citiprank says:
OT: another example of our horribly broken patent system... which is basically just a huge barrier to entry for smaller companies
http://arstechnica.com/hardware/news/2009/03/nvidia-countersues-intelright-on-schedule.ars
Of course the case will be settled and the only winners will be the lawyers while the consumers end up paying for the litigaion
I work for a smaller (600 person, 120 million revenue, publically traded) software company... we were sued by one of our large competitors (probably because we were beating them over 95% of the time in the marketplace) and it cost us over 1.5 million (back then like 2% of our yearly revenue) to get rid of their bullshit patent suit
citiprank Fri Mar 27 23:00:21 2009 CDT #
1 currency now [yogi] :) says:
Denninger's clown reeks of fascist demagoguery. Where was he during TARP?
1 currency now [yogi] :) Fri Mar 27 23:00:39 2009 CDT #
Anonymous says:
Polaroid is about to be sold for whatever the Goodwill value is
Seems like it would be a good conversation piece to own.
Anonymous Fri Mar 27 23:04:25 2009 CDT #
1 currency now [yogi] :) says:
OT duke
Anderson completely lost me when it rained frogs. I hope P. S. Hoffman got away from him.
1 currency now [yogi] :) Fri Mar 27 23:09:23 2009 CDT #
Anonymous says:
"Denninger's clown reeks of fascist demagoguery."
I didn't like it much either. I don't support the 2 years mandatory national service.
Anonymous Fri Mar 27 23:10:29 2009 CDT #
bearly says:
homedad "Let C go, prop GM for a period and then reconsider free trade."
I agree.
bearly Fri Mar 27 23:10:42 2009 CDT #
Michael says:
What in the world are the auto makers going to do with all that unsold inventory.
Michael Fri Mar 27 23:10:46 2009 CDT #
Basel Too says:
If you have a gripe you go to Federal Court for due process?
Yes. Also, a government-managed BK doesn't necessarily have to be a private law, but instead one where the government brokered an arrangement between all the interested parties before filing the petition. Same result.
Basel Too Fri Mar 27 23:12:42 2009 CDT #
MrM says:
Late to the thread, but still - Here is classic Jon Stewart, his immortal takes on Alan Greenspan - watch and weep
http://www.thedailyshow.com/video/index.jhtml?videoId=125223&title=the-daily-shows-irrationally (with John Hodgman) - Don't say you were not warned
Sir Alan himself - make sure to watch after 4:00.
http://www.thedailyshow.com/video/index.jhtml?videoId=102970&title=alan-greenspan Typical Greenspan: "That's how it comes out, but that's not how to think about it"
MrM Fri Mar 27 23:12:57 2009 CDT #
Michael says:
Greenspan's mostly right about one thing; he and no others are any better at forecasting today than they were 50 years ago because, human nature hasn't changed and we can't improve ourselves.
I would add; you cannot forecast when large psychological shifts from euphoria to fear and back again will occur with good precision. Human nature has not changed for thousands of years, and probably will not in the future until some large scale human physiological change occurs. However, many of us are very good at logical reasoning and at making good assessments of the situation. In ancient times we used to be called seers but now we're called doomers.
Unfortunately, the balance of assessments weighing pros and cons are shifted toward pros and stoking false confidence, bubbles, and subsequent busts. We do not welcome a balance. This is human nature. We have a mechanism to protect ourselves from our own greedy(false positive) nature, it's called the gold standard and the Constitution.
Parent Post
Michael Sat Mar 28 00:07:50 2009 CDT #
EvilHenryPaulson says:
Michael
I predict you will post on Calculatedrisk again
Parent Post
EvilHenryPaulson Sat Mar 28 00:10:39 2009 CDT #
citiprank says:
Maybe we should listen to guys like Denniger and go back to the late 1700s or early 1800s.. then we can have slaves, only white male landowners will be allowed to vote
citiprank Fri Mar 27 23:13:37 2009 CDT #
Oofa. says:
Christ, you're an idiot.
Parent Post
Oofa. Sat Mar 28 11:37:00 2009 CDT #
citiprank says:
Really when I think about it.. I'd rather let all the banks fail and bail out the auto industry... .I know which one of those two has done more for this country
citiprank Fri Mar 27 23:17:03 2009 CDT #
Vlad says:
Vote for Obongo and get 100 g's a year to tighten lugnuts.
What a clowncar.
Vlad Fri Mar 27 23:17:29 2009 CDT #
Comrade Bear (tj and the bear) says:
Anon,
Here's the data from 1955 to 2007...
http://jama.org/statistics/motorvehicle/sales/mv_sales_year.htm
... and current statistics...
http://jama.org/statistics/quickstats/index.html
The bottom line is Japanese domestic auto sales peaked in 1990 and have declined ever since, from 7.8M then to 5.1M in 2008, and it cliff-dove into January.
I'd like CR to chart the turnover ratio for Japan for comparison purposes.
Comrade Bear (tj and the bear) Fri Mar 27 23:18:36 2009 CDT #
1 currency now [yogi] :) says:
TX Basel
What if the government owns part of the bankrupt party and/or a creditor (not the IRS)?
Not sure what you mean by a private law.
1 currency now [yogi] :) Fri Mar 27 23:31:45 2009 CDT #
EvilHenryPaulson says:
There was a thread on Slashdot, one of the original tech gathering places, that focussed on laid off IT workers exploiting the systems of their former employer
Thought the thread was rather good so I will share, http://it.slashdot.org/article.pl?sid=09/03/27/1744250&art_pos=8
Does provide food for thought though, what happens when the police/FBI aren't capable of handling investigations. Wild Wild West? pew pew pew pow pow pow, you dun got me Billy the Kid but I know you'll end up in ePrison one eDay
EvilHenryPaulson Fri Mar 27 23:36:43 2009 CDT #
Comrade Byzantine_Ruins says:
Wow, you are actually looking forward to an unparalleled disaster. You are truly sick.
What is the alternative?
What if I suggest, the enslavement of the human race through genomic behavior modification and surveillance technology? Cynical takeover of the human race by Orwellian fascists?
Grow up dude, this game is being played for stakes a little higher than your heart-wrenching fear you might lose your life or your collection of consumer good. What do you think it's going to look like if we "get past" this and continue on with the same cohort of vested interests, now doubly determined to protect their positions, the rule of law in tiny shards, and armed with the idea that Calvinball works if you just keep doing it on a large enough scale?
Maybe you just don't see all the gradations possible of shitty existences. Consider that being a goatherder could be the BEST future for you and your offspring.
Not really advocating any specific worldview or policy, just weary of the constant recapitualtion of, "if i don't give the banker everything he wants, I might get hurt." Sorry, the best thing that came out of 9/11 were the words "let's roll" and the end to passive hijack response. Rape should not be a riskless pass-time.
Comrade Byzantine_Ruins Fri Mar 27 23:37:28 2009 CDT #
Comrade Byzantine_Ruins says:
Does provide food for thought though, what happens when the police/FBI aren't capable of handling investigations.
Ever read "Three Kingdoms"?
Comrade Byzantine_Ruins Fri Mar 27 23:39:01 2009 CDT #
EvilHenryPaulson says:
Comrade Byzantine_Ruins,
No, the list of fiction books I have read is fairly short though.
Nevertheless, I don't dawdle on the pedantry of the latest Treasury press conference when I could be mentally replaying a scene like http://www.youtube.com/watch?v=zudHviCAHUA
Which I would argue contains more substantive information than most Treasury press conferences
Parent Post
EvilHenryPaulson Sat Mar 28 00:03:18 2009 CDT #
JP says:
MrM, Those were pretty damn funny. John Hodgeman accurately calls the meltdown & that people will have no savings.
OK, Hodgeman. What's your handle here.
JP Fri Mar 27 23:44:19 2009 CDT #
Basel Too says:
What if the government owns part of the bankrupt party and/or a creditor (not the IRS)?
Hell if i know, but it seems that if all parties agree, it should be valid.
Not sure what you mean by a private law.
With a private law, Congress passes a law that establishes the rights and obligations of every party.
Basel Too Fri Mar 27 23:51:50 2009 CDT #
sportsfan says:
Not really advocating any specific worldview
Well, it's pretty clear to me that you are advocating a future for the U.S. not unlike that experienced by Byzantium.
Keeping focusing on the ruins if you like and drawing everything as starkley as possible in black and white, but the real world is a little more complicated than your worldview.
sportsfan Fri Mar 27 23:54:51 2009 CDT #
Basel Too says:
ughhh. I've got a 10 mile bicycle commute tomorrow, and it looks like it's going to be a downpour...
Basel Too Fri Mar 27 23:59:42 2009 CDT #
1 currency now [yogi] :) says:
Here in Manhattan I don't see it. We've had a few riots after we got rid of the British and their Loyalists (the worst over the Civil War draft), but order has been quickly restored. We've had corrupt political machines, corrupt law enforcement, organized crime corrupting organized labor, and always a nasty financial bloc.
But the murder rate keeps going down and elections are reasonably clean. Reforms eventually come, when the majority gets sick and tired. The local bureaucracies tend to function marginally better. As the vested few shrink in number, the next rung starts to disassociate. Rent control makes a comeback. There will be plenty of trouble, but I see the Constitution making a comeback.
1 currency now [yogi] :) Sat Mar 28 00:12:02 2009 CDT #
citiprank says:
The philosophy behind regulation, predicting human behavior, etc.. is quite simple... just expect for and plan for the worst....
I mean really..."markets are self-regulating" is a denial of human history... humans will always manipulate things for their benefit when possible.. so systems should be designed with this in mind
citiprank Sat Mar 28 00:13:29 2009 CDT #
1 currency now [yogi] :) says:
Basel: can you give me an example? How is that not a bill of attainder?
Sportsfan: Did you see my CDS thought last night?
1 currency now [yogi] :) Sat Mar 28 00:16:16 2009 CDT #
hong konger says:
Damn, byz, you give good comment. In 01, I was involved with someone whose family is neck deep in American intel. It might surprise many of you, but these folks are some of the most ardent libertarians in the US.
Anyway, "let's roll' was/still is a rallying cry and it wasn't necessarily always a mindless emotional response to foreign adversaries (as you might expect).
PS- they've been pissed for awhile. And no, they generally have no political agenda.
Point of interest: the average asset for your country has a great deal more respect for the Constitution than your average elected representative does in my experience.
Hell, the average elected rep hasn't even read it.
hong konger Sat Mar 28 00:17:46 2009 CDT #
1 currency now [yogi] :) says:
OK I did a little research. For some reason I don't remember that from law school, or history.
1 currency now [yogi] :) Sat Mar 28 00:21:03 2009 CDT #
1 currency now [yogi] :) says:
Attainder is only criminal.
1 currency now [yogi] :) Sat Mar 28 00:22:42 2009 CDT #
Anonymous says:
Sportsfan: Did you see my CDS thought last night?
No, I went to sleep. Are they exempt from BK as the article suggests?
Anonymous Sat Mar 28 00:25:07 2009 CDT #
hong konger says:
I guess I should add that GM does a great service to America in ways other than chunking out crappy four-wheeled galopies. You'll never see it, but, the tentacles do serve a purpose other than serving "shareholder interests via retained earnings".
hong konger Sat Mar 28 00:25:16 2009 CDT #
elLurko says:
Michael
I predict you will post on Calculatedrisk again
Such a doomer, EHP. Someday it WILL get better, and Michael won't post anymore. Someday...
elLurko Sat Mar 28 00:28:03 2009 CDT #
Michael says:
I guarantee it.
Parent Post
Michael Sat Mar 28 00:30:26 2009 CDT #
sportsfan says:
yogi, sorry, but the browser dropped my handle. Did you actually research the subject matter?
sportsfan Sat Mar 28 00:31:39 2009 CDT #
ELGordo says:
Just brilliant :
http://www.youtube.com/watch?v=94lW6Y4tBXs
ELGordo Sat Mar 28 00:37:23 2009 CDT #
EvilHenryPaulson says:
Stop the presses, I just did the impossible. I predicted the behaviour of an individual capable of free will, thought, and choice. This is going to change the world.
The problem isn't forecasting or modelling. It is not accepting the margin of error on variables, or otherwise making assumptions out of convenience or self-interest. If you had a regulator that did their job, no problem — we might not get to go 200mph, but we could safely go 90mph and not catastrophically crash
People that simplify the argument to "it's the math's fault" piss me off to no end
elLurko,
I prefer to think of myself as a Gloom but not Doom-er
EvilHenryPaulson Sat Mar 28 00:38:05 2009 CDT #
EvilHenryPaulson says:
that statement is inclusive of making predictions when there are actors involved which are susceptible to emotions, or animal spirits, or drug trips, or whatever you care challenge me with
Parent Post
EvilHenryPaulson Sat Mar 28 00:43:20 2009 CDT #
hong konger says:
EHP-
(laughing)
Now that you've got cellular automata down, call Wolfram up and claim your prize. :-P
hong konger Sat Mar 28 00:44:47 2009 CDT #
EvilHenryPaulson says:
hong konger,
You don't need to predict every detail. You just need to determine the question, and the likelihood of the results.
I may have worn it out, but it's a great example. Sports and Sports Betting -- all kinds of intangibles involved, an excess of emotions, more stats than you can shake a stick at, and yet ... bookies have been in business longer than Wall St
The skill comes in narrowing the question down to the point where you have adequate information to precisely answer it
Parent Post
EvilHenryPaulson Sat Mar 28 00:50:42 2009 CDT #
1 currency now [yogi] :) says:
No, but off the top of my head,
A first thought is that if someone like anon above was using reserves mandated by insurance law to be held as collateral against ordinary life or other policies for these huge bets on securities, he was acting illegally, beyond the scope of his corporate agency, and a counterparty like GS should have known it. He can't bind the corporation, now the taxpayer.
Possible rescission, and GS can go after their premiums in BK, or void.
1 currency now [yogi] :) Sat Mar 28 00:51:35 2009 CDT #
Cliff\'s Diving School says:
Don't tread on me
Cliff\'s Diving School Sat Mar 28 00:54:37 2009 CDT #
Hoopajoops LTD says:
ShamWow pitchman Vince Shlomi was arrested on felony battery charges in Miami last month following a violent encounter with a hooker, according to The Smoking Gun:
Hoopajoops LTD Sat Mar 28 00:55:38 2009 CDT #
sportsfan says:
The issue is whether CDS are exempt from BK law in the U.S.
The issue arose in the context of the bailout of AIG. Many have said the government should have let AIG go BK. Bernanke and Paulson apparently decided that would not be a good idea given the state of the law.
My post from last night quoted an opinion on the subject:
The termination provisions in credit default swap contracts enjoy special treatment under the Bankruptcy Code, and particularly under amendments made in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which clarified the treatment of credit default swaps and other derivative contracts.8 For example, although the “termination on bankruptcy” clause in the standard master agreement would ordinarily be considered an unenforceable ipso facto clause, the 2005 amendments make clear that such termination and liquidation provisions are enforceable.9
The non-bankrupt counterparty is specifically permitted to offset any claim against collateral it holds, without restraint by the automatic stay or other provisions of bankruptcy law.10 It is also entitled to net any claim with gains or losses from other terminated derivative contracts it has with the bankrupt party pursuant to a master agreement with a netting provision, like the ISDA 2002 Master Agreement.11
all emphasis added.
http://www.capdale.com/articles/detail.aspx?pub=3591
I don't think the courts have yet ruled on the issue.
I looked at the following posts from last night, but did not see a reply that addressed the issue.
It's too late tonight to think about it.
sportsfan Sat Mar 28 00:56:29 2009 CDT #
EvilHenryPaulson says:
maybe I should just give up, we can outlaw any forward looking statements along with all implicit predictions of the future.
No more weather forecasts, derivatives, pre-ordering goods, making dinner reservations, etc...
no, no, no... we're done with witchcraft, step away from the albinos and chickens. Stop trying to redefine the world to soothe your own problems
I'm the practical middle of the road one here. Outcomes are not pure chaos, nor are they destiny. If I hear animal spirits, or matter of confidence again I'm liable to lose my marbles
EvilHenryPaulson Sat Mar 28 00:59:00 2009 CDT #
ShortCourage says:
I'd be amazed if this wasn't already linked sometime today...but it is so dead-on and so well written, you MUST read it if you haven't yet. And then print it out and give it to your friends and family.
http://www.theatlantic.com/doc/200905/imf-advice
"The Quiet Coup"
Lead-in Paragraph follows:
"The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."
ShortCourage Sat Mar 28 01:02:41 2009 CDT #
1 currency now [yogi] :) says:
No prob.
I looked at the article. If the contract is void the termination provisions could be out and BK judge ignores them.
I'm CEO of AIG. I walk into a Vegas casino and sign a note for 100 billion. They know who I am. Void.
1 currency now [yogi] :) Sat Mar 28 01:03:54 2009 CDT #
ShortCourage says:
If that Atlantic article ("The Quiet Coup") has already been posted and dissected, please let me know. I just thought it summed things up perfectly. Even my ultra-left sister, who sees the IMF as evil in all ways, might applaud the author.
ShortCourage Sat Mar 28 01:07:30 2009 CDT #
1 currency now [yogi] :) says:
Yes, mp posted the article yesterday, and I have already sent it to friends and family and e-mailed the authors, but keep spreading the word.
The beauty is that it was by MIT Economics professors and not Berkeley politicos.
Parent Post
1 currency now [yogi] :) Sat Mar 28 01:11:12 2009 CDT #
1 currency now [yogi] :) says:
Hell, I'm going for unjust enrichment.
1 currency now [yogi] :) Sat Mar 28 01:08:27 2009 CDT #
EvilHenryPaulson says:
sportsfan,
CDS would apply to AIG the holding company. Insurance policies and adequate reserves for them are cordoned off and supervised by state level regulators.
AIG the reinsurer which covers American embassies, military bases, other insurance companies, european bank balance sheets, etc... would be open season because there is no regulator for that stuff
but house/auto insurance, annuities, etc would be protected... but the problem is AIG has lost money at all levels and I'm willing to bet that their state level subsidiaries are in need of capital infusions from the mother corp. If the mother corp went down, that would no longer be a possibility, and every states' ability to cover insurance policies would be wiped out in an instant (most don't keep cash on hand, just have a plan to borrow when the time comes... good luck)
AIG could have handled more deftly, to better serve the interests of the taxpayer... but it was not bailed out for the benefit of the citizenry, it was more than that
EvilHenryPaulson Sat Mar 28 01:08:28 2009 CDT #
sportsfan says:
A first thought is that if someone like anon above was using reserves mandated by insurance law to be held as collateral against ordinary life or other policies for these huge bets on securities, he was acting illegally, beyond the scope of his corporate agency, and a counterparty like GS should have known it. He can't bind the corporation, now the taxpayer.
Possible rescission, and GS can go after their premiums in BK, or void.
I saw that comment. I didn't perceive it to be a reply.
I still think CDS are exempt from BK law in the U.S. per the linked opinion.
How the other 130 countries in which AIG did business would react is even more of a mystery.
Clearly, though, Bernanke and Paulson seemed to think so also; hence the bailout.
Good night again.
sportsfan Sat Mar 28 01:09:40 2009 CDT #
EvilHenryPaulson says:
sportsfan,
Not exempt from BK....
Just the counterparties get to keep posted collateral upon BK. They aren't entitled to anything more... as far as I know
No different than stocks/options/futures traded through an exchange really
Parent Post
EvilHenryPaulson Sat Mar 28 01:12:33 2009 CDT #
hong konger says:
That's true. However, you run the risk of reducing the question down past the point of analysis given the data set. Or, alternatively, the available data set isn't sufficient to make a reliable prediction.
On a math theory note, I might add that reliable probabilities only exist in closed spaces.
Book makers still exist because they constantly readjust the odds to make sure they are able to clear their liabilities. Sometimes, they're happy to break even.
Eg- In insurance, it's enough to break even on the underwriting in order to carry the float.
But perhaps you're speaking of something else?
hong konger Sat Mar 28 01:10:22 2009 CDT #
EvilHenryPaulson says:
hong konger,
Not trying to go anywhere deep with this.
If you can't make a prediction, you can't make a prediction. Just accept it.
As for book makers, well duh. Google an article Taleb wrote looking back at the pre-black holes method of pricing options. Book makers accept their limitations, they don't give a million to one odds just to collect as many bets as possible. They stay within a margin of safety, and furthermore they don't take out big payout insurance from other bookies in order to free up more capital to risk (which is what securitization did). It's not just their odds making that makes the system resilient, its how the greater system is organized
Parent Post
EvilHenryPaulson Sat Mar 28 01:19:17 2009 CDT #
sportsfan says:
I'm CEO of AIG. I walk into a Vegas casino and sign a note for 100 billion. They know who I am. Void.
Sorry, yogi, I'm just not buying it.
sportsfan Sat Mar 28 01:11:55 2009 CDT #
1 currency now [yogi] :) says:
G N
I will research more...
Parent Post
1 currency now [yogi] :) Sat Mar 28 01:17:02 2009 CDT #
1 currency now [yogi] :) says:
Insurance is another business that must be treated as a utility. The function of insurance is to socialize losses.
1 currency now [yogi] :) Sat Mar 28 01:14:29 2009 CDT #
CRbot says:
The Latest from Yves:
Links 3/28/09
CRbot Sat Mar 28 01:15:58 2009 CDT #
ShortCourage says:
yogi,
Cool, thanks. I knew this gang couldn't have missed it.
Every congressman should receive a copy. Maybe if we all send them a copy, they'll get the picture that folks are catching on to the game. Like he said in the article, the oligarchy will just keep sucking off of the populace, bailing out their own interests until there are riots and what not. Let's hope our leadership can step up before that point.
ShortCourage Sat Mar 28 01:17:03 2009 CDT #
1 currency now [yogi] :) says:
My uncle, a center-left lawyer in his late 70's, thought it was too late. I will send to Congressclowns.
Parent Post
1 currency now [yogi] :) Sat Mar 28 01:21:18 2009 CDT #
EvilHenryPaulson says:
yogi,
it's too late for what has already passed
all we can do now is learn, prepare for future
anyone have a good example of a system of government that:
a) is resilient to corruption
b) delivers good results
c) is responsive to the populaton
d) can scale up to size for the modern multi-million person nation
I only have small scale anecdotes
Parent Post
EvilHenryPaulson Sat Mar 28 01:34:39 2009 CDT #
Yoringe says:
try the swiss system of direct democracy.. the best and closest to perfect so far....
or the version of Buthan with his Gross Domestic Happiness, but dont know if that can be applied to large Populations ...
Parent Post
Yoringe Sat Mar 28 09:23:09 2009 CDT #
EvilHenryPaulson says:
problem with finance sector is once you use money to make money, the greed for the next marginal amount of return is irresistible and does not abate until the losses become current
also, in order to profit you have to be where the crowd is
those 2 things are the downfall. Not math. Not forecasting. Not animal spirits
EvilHenryPaulson Sat Mar 28 01:23:56 2009 CDT #
hong konger says:
Well, Taleb could've synthesized his book down to an explanantion of how B-S degrades as the volume of trades in the reference security increases.
But, then it wouldn't have been a book, I guess.
hong konger Sat Mar 28 01:39:02 2009 CDT #
EvilHenryPaulson says:
I am hesitant to like Taleb, every media appearance he makes he blames everything on "the scientists"
Parent Post
EvilHenryPaulson Sat Mar 28 01:41:19 2009 CDT #
EvilHenryPaulson says:
but in reference to the original mention, he went back to the Amsterdam exchange where options traders sold directly offsetting positions and moved with the market, which in my opinion is analogous to a bookie taking bets with a moving line. either way bookie wins, value is derived from being a clearinghouse of positions within the market
Parent Post
EvilHenryPaulson Sat Mar 28 01:43:58 2009 CDT #
Bubblisimo Gerkinov says:
Since we are on the subject of the modern facsist state, I recommend <a href="http://home.cc.umanitoba.ca/~altemey/">The Authoritarians</a>.
Bubblisimo Gerkinov Sat Mar 28 01:44:19 2009 CDT #
Oofa. says:
BS. You clowns who insist on coming at this from a left or right perspective are part of the problem.
Parent Post
Oofa. Sat Mar 28 11:51:23 2009 CDT #
hong konger says:
After reading your response, I think you are attributing the current problem within the context of trading the cash flows rather than absorbing them. Absorption and redistribution being the traditional realm of finance, as I understand the word.
In any case, your diagnosis of the problem is accurate. Gotta run. Cheers.
hong konger Sat Mar 28 01:47:31 2009 CDT #
EvilHenryPaulson says:
hong konger,
still wasn't trying to think far ahead. I guess I would say the trading enabled the imprudent distribution of capital then...?
not sure if finance can be segregated into absorption/distribution and trading anymore, the intermediate steps are too important not to have a structuring category
Parent Post
EvilHenryPaulson Sat Mar 28 01:57:00 2009 CDT #
Anonymous says:
EHP 10:38
+1
Anonymous Sat Mar 28 01:50:43 2009 CDT #
hong konger says:
Well, the bookie sets the line to match his current exposure. IOWs- he captures the market and sets the line. To put it more succinctly, he informs the market, not the other way around. But I've gotta go and I think we're splitting hairs, anyway.
You've got your wits about ya.
hong konger Sat Mar 28 01:54:05 2009 CDT #
EvilHenryPaulson says:
the bookie and the gambler dance together to place the line
Parent Post
EvilHenryPaulson Sat Mar 28 02:01:29 2009 CDT #
1 currency now [yogi] :) says:
I will always try to learn from the past and prepare for the future.
But I still want some clawback, and the Constitution's text was changed from "pursuit of property" in the draft to "pursuit of happiness".
1 currency now [yogi] :) Sat Mar 28 02:08:28 2009 CDT #
EvilHenryPaulson says:
yogi
then have at it. keep in mind any clawbacks will not happen because of what is on paper, but what is in the streets (eg the 90% tax)
look at the French, they know exactly what they want and they get it without worrying too much about how it happens... it's times like these that the French course of action dominates results
Parent Post
EvilHenryPaulson Sat Mar 28 02:14:35 2009 CDT #
1 currency now [yogi] :) says:
I don't want les tetes. New and Improved Deal will suffice. Having worked in State court I have seen that procedure is cumbersome but justice usually prevails. Money doesn't hurt, but you might be surprised.
Parent Post
1 currency now [yogi] :) Sat Mar 28 02:26:40 2009 CDT #
EvilHenryPaulson says:
yogi,
not referencing French revolution
referencing French unrest. It's nebulous and frantic. There is a list of demands, but they are not to be read. Speeches are made, but it is not the words people listen to.
The protest/sit in/hostage taking/barrier only ends when the people feel better.
Unlike the German unrest where the priority is how goals are achieved, the french focus on the goal (which is whatever makes them feel better)
Just be careful with mob movements, always be clear about your end game.
Parent Post
EvilHenryPaulson Sat Mar 28 02:51:12 2009 CDT #
sdtfs says:
People that simplify the argument to "it's the math's fault" piss me off to no end
elLurko,
I prefer to think of myself as a Gloom but not Doom-er
Me, I'm a Doom-er but pretty cheerful for all that.
Biggest advance in prediction and math was the ability to label things as undecidable. Let's you know when the converse is true. People need to re-think their definition of "unlikely",...what are the odds of a Royal Flush being dealt in poker? Given the number of players and games played now a days?,... probably at least one a day. My programmer friend (referring to chip speed and programming) a long time back said, "You know if it's a million to one chance that something bad is going to happen, it happens once a second."
sdtfs Sat Mar 28 02:16:08 2009 CDT #
Anonymous says:
"The announcement on Monday will usher in a more intensive period of oversight by the government of G.M. and Chrysler..."
Ha ha ha!
Gonna kick the tires now and then, eh, Unk? See if they need a few more billion dollars of air?
Anonymous Sat Mar 28 03:09:04 2009 CDT #
1 currency now [yogi] :) says:
I've always been able to avoid a mob and I live by the pen. I'm more worried about big brother.
National styles don't remain static. The US has had peaceful non-violent mass movements and populist unfocused rage. Obama seems like he could talk down a mob if anyone can. Can he control big brother?
1 currency now [yogi] :) Sat Mar 28 04:01:31 2009 CDT #
Rob Dawg says:
Biggest advance in prediction and math was the ability to label things as undecidable. Let's you know when the converse is true.
Leave it to the late night crew to bring up Gödel, recursion and completeness. Economics is not matematics, it is the misuse of mathematics. That's how we end up with three handed economists and real thinkers with their hands tied.
Rob Dawg Sat Mar 28 05:56:56 2009 CDT #
nolaughingmatter says:
GM and Chrysler are finished. There is so much hatred among the people over these bailouts that it has permanently tarnished their image that recovery form them is now gone. Isn't AIG even changing their name now?
nolaughingmatter Sat Mar 28 06:04:39 2009 CDT #
Comrade Byzantine_Ruins says:
Well, it's pretty clear to me that you are advocating a future for the U.S. not unlike that experienced by Byzantium.
I'm an advocate of the permaculture / forest farming approach to state building.
Accept the nature of the things you are planting. Arrange them to maximize their natural positive harmony, minimize their negative harmony. Minimize the number of hours the farmer has to work each day and the strain on the soil.
The ideal farmer -- who is not real, merely an ideal to aim for -- arranges his crops so artfully, he never needs to tend them; is so judicious in his selection, one cannot tell his hand from nature.
This is called the Taoist model of rule. I will call the modern approach the "Green Revolution" model of rule. As the geen revolution has destroyed the soil of the world's agricultural regions, so the human equivalent has destroyed the human soil of the nations where it is practiced.
So, to trade you satire for satire, pardon me if I see you as a handful of dry, grey soil, not good for much but turning to dust in the wind.
I walk a course somewhere between Xun Tze and Han Fei Tze, I think, with ovious influences from Chuang Tze and Lao Tze.
Keeping focusing on the ruins if you like and drawing everything as starkley as possible in black and white, but the real world is a little more complicated than your worldview.
If the world is history, there's a whole lot of world out there, but the part you are standing in right now, is the Levant. A well-trodded and blood soaked land, familiar to every nation.
I'm playing a lot of Go lately, so, think of it through that metaphor. Vast undefined potential to start yet, as the stones stack up, the moves and the outcomes become predetermined. You're in the endgame. Don't blame me that it's been walked with arduous care to this point, I didn't ruin your society's institutions.
Comrade Byzantine_Ruins Sat Mar 28 06:23:34 2009 CDT #
Comrade Byzantine_Ruins says:
<h1>Police identify 200 children as potential terrorists</h1>
http://www.independent.co.uk/news/uk/crime/police-identify-200-children-as-potential-terrorists-1656027.html
Drastic new tactics to prevent school pupils as young as 13 falling into extremism
Exclusive by Mark Hughes Crime correspondent
Saturday, 28 March 2009
The number was revealed to The Independent by Sir Norman Bettison, the chief constable of West Yorkshire Police and Britain's most senior officer in charge of terror prevention.
He said the "Channel project" had intervened in the cases of at least 200 children who were thought to be at risk of extremism, since it began 18 months ago. The number has leapt from 10 children identified by June 2008.
The programme, run by the Association of Chief Police Officers, asks teachers, parents and other community figures to be vigilant for signs that may indicate an attraction to extreme views or susceptibility to being "groomed" by radicalisers. Sir Norman, whose force covers the area in which all four 7 July 2005 bombers grew up, said: "What will often manifest itself is what might be regarded as racism and the adoption of bad attitudes towards 'the West'.
Or hey, tell yourself how right you are, and pour some more Gro-Rite onto the dead bedrock. Use money you don't have to monitor preadolescents for disloyal attitudes toward a state that any village idot would hold in contempt.
Parent Post
Comrade Byzantine_Ruins Sat Mar 28 06:47:30 2009 CDT #
Anonymous says:
Comrade Byzantine_Ruins says:
...“It's awesome fun til the money runs out..Tarponomics is vastly superior to real economic activity...
----------------
Hilarious ! As if you credit junkies had any money.
Seems to nurture delirious phantasies is vastly superior to reality. Haha !
Anonymous Sat Mar 28 06:46:02 2009 CDT #
brucentennessee says:
This is just wrong. The bad economic model that GM has followed all these years is flawed. The workers of this incorporated business, the stock and bondholders should pay the price for this failed business. The transfer of the debt obligation to the general society, made of of people who did not profit from the business when times were good, but are expected to pay the price when times are bad, this is still wrong. The lipstick on this pig has not changed it. Yes it is a large corporation, but it must be allowed to fail. It has a massive debt burden that will never be paid back. And we, the general public, must be allowed to get on with our own economic lives...
brucentennessee Sat Mar 28 06:49:38 2009 CDT #
Comrade Byzantine_Ruins says:
Hilarious ! As if you credit junkies had any money.
What I think is funniest about you, is that you are the perfect image of an American. Your criticism is that we inflated our score, not the scoring system. That's sad, because the problem is, what we did is totally rational under the scoring system.
Comrade Byzantine_Ruins Sat Mar 28 07:27:46 2009 CDT #
ATM card, $19 etc... says:
Ugh. Bailout fatigue. Not enough coffee in the world for me to get bright-eyed and bushy tailed about this latest round of corporate welfare. I take a little solace, if that's the right word, from the argument that these bailouts are nothing new. If you are interested, I recommend Wealth and Democracy: A Political History of the American Rich by Kevin Phillips. I'm not sure the handouts and give-aways have ever been this blatant an affront to the taxpayer, but according to Phillips it is a well-trod path from Washington to Wall Street and points beyond nonetheless.
ATM card, $19 etc... Sat Mar 28 07:29:54 2009 CDT #
Anonymous says:
A Short deadline is some incentive to negotiate. Bankruptcy is greater incentive, and it does not mean the end of the industry. Various airlines, including majors, operated for years while in bankruptcy while they sorted things out interenally and with unions. Enough already to Detroit. The autos make AIG, Citi and other financials look like prudent businesses.
Anonymous Sat Mar 28 07:36:39 2009 CDT #
Comrade Kristina says:
Various airlines didn't have massive CDS contracts written on them...You can't compare apples with lug nuts...
Comrade Kristina Sat Mar 28 07:38:42 2009 CDT #
ATM card, $19 etc... says:
Re: CDS
Has anyone floated the idea of just freezing these things? Lock in the profits, lock in the losses; winners walk away grumbling about the remaining profits they could have had if the game hadn't been called, losers queue up to lobby for a bailout to cover the damage inflicted by their losses. Alternatively, and maybe this is more appealing politically, impose tax rates on CDS income and profits that encourages participants to end the game voluntarily. Either way, we have to get to a point where we can discuss recapitalization of certain firms without worrying about blowing up the whole credit market.
ATM card, $19 etc... Sat Mar 28 07:57:42 2009 CDT #
CRbot says:
The Latest from Yves:
Guest Post: And CEOs' Pensions?
CRbot Sat Mar 28 08:06:52 2009 CDT #
Rob Dawg says:
Okay, now that I've thought about some more I know that when GM & Chrysler come to me asking for more money I know which way I'm going to vote.
In similar news California Budget v3.1 got activated. Income taxes in ll brackets go up by 0.25% and an additional $900b in cuts go into effect because Calis request for stimulus funds was smaller than expected. As much as I think CA is undeserving of this enabling money t all I think Chrysler, the PE firm is even less deserving.
Rob Dawg Sat Mar 28 08:20:26 2009 CDT #
lama says:
Can anyone bailout small business? - "No."
Can anyone help small business? - "Sorry, no more money. BTW, when did you all ever fund my election campaign anyway?"
lama Sat Mar 28 08:24:38 2009 CDT #
marz says:
Don't sell this government short on the auto company bailouts. They will make it work in any way possible. Look for significant tax credits for purchasing a new vehicle {I belive there is already one in place for business} and additional credits for trade-in of an older auto or SUV. Many of these ideas are already floating around Congress.
Of course, the effect will be temporary. Just stealing future sales into the present. But, then again, its all about the 2010 congessional elections!
marz Sat Mar 28 08:25:59 2009 CDT #
Comrade Kristina says:
Re: CDS
Actually the "Godfather" of the CDS, Myron Scholes has suggested "blowing them up"...
http://curiouscapitalist.blogs.time.com/2009/03/06/myron-scholes-intellectual-godfather-of-the-credit-default-swap-says-blow-em-all-up/
Comrade Kristina Sat Mar 28 08:30:44 2009 CDT #
Lobbyi$t Ben Dover says:
The auto industry should go structured BK with government financining. Obama will not do the right thing as he is owned by the UAW. They will lose the most from a BK. A ratio of three retired to one worker will not work. Rediculous benefits can not be supported with out them laying off benefits on the government like the airlines did. Anything less then a real BK will be a money pit with a UK style auto industry failure.
GM should have exited the NA market long ago and concentrated on thier world market which was profitable untile the global economic colaspe.
Maybe the new car should be called the Palosi! No tailpipe hooked up to the central tail pipe at the electric generating station. Central polution!
Lobbyi$t Ben Dover Sat Mar 28 08:32:56 2009 CDT #
Lobbyi$t Ben Dover says:
I like the idea of rebate for new car sales with crushing the old. There are some problems as the Big 3 would probably come out on the bottom of the sales unless it is directed strickly at them. Here is Germanys results from theirs.
http://www.spiegel.de/international/business/0,1518,615621,00.html
Lobbyi$t Ben Dover Sat Mar 28 08:37:50 2009 CDT #
Dobby says:
By giving money to GM and Chrysler, Obama and the Democrats will cause Ford to fail as well. Let capitalism work. Let GM and Chrysler fail so Ford has a chance to succeed. Best Buy is getting stronger now that CompUSA, Tweeter and Circuit City have closed. Giving money to GM and Chrysler shows the world that our politicians are not serious about solving our problems. If the Chinese were smart, they'd stop buying our bonds.
Dobby Sat Mar 28 08:46:53 2009 CDT #
ATM card, $19 etc... says:
Scholes's proposal looks like the idea I was after. Not sure I favor his idea of starting the CDS market up all over again, however:
"What that means, he elaborated, is that regulators should "try to close all contracts at mid-market prices" and then start up the market anew with clearer rules and shorter-duration contracts."
I still think the coupon/discount to par gives the bond buyer all the hedge he or she needs. The current CDS issue and its ostensible role as a hedging tool reminds me a lot of the "portfolio insurance" that some blamed for the 1987 crash. These attempts to insulate institutional portfolios seem to have a propensity for causing unintended consequences that pose systemic risk.
ATM card, $19 etc... Sat Mar 28 08:49:47 2009 CDT #
Lobbyi$t Ben Dover says:
If GM fails, so does Delphi. Worlds largest parts supplier already in BK. They support all manufactures including imports. The systemic failure of Ford would happen along with suppliers and extreme hard ships on all manufacturers. Chrysler I think we could absorbe but that would not be good in the long run. We need these business as we will not go back to the same economy we had and then there is military defense capabilites to consider. How about the steel industry?
Lobbyi$t Ben Dover Sat Mar 28 09:01:31 2009 CDT #
CRbot says:
New Thread: Forecast: Two-thirds of California banks to face Regulatory Action
http://www.calculatedriskblog.com/2009/03/forecast-two-thirds-of-california-banks.html ( 0 comments ...You could be FIRST! )
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CRbot Sat Mar 28 09:06:09 2009 CDT #
Markar says:
CA should be seeing a bit of a spike in car sales--until next week, anyway when sales tax goes up 1% and vehicle registration doubles in price(from already high levels)
Markar Sat Mar 28 10:02:19 2009 CDT #
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