Comments for Banks Leaving Money on the Table "All Day Long"
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/4156258449745590279
CRbot Sat Mar 21 21:26:51 2009 CDT #
Hymns for the Lord says:
Assume you were in Geithner's shoes.
You know the outcome of the stress test is going to be that C needs to be nationalized and BAC, JPM and WFC need large capital injections, perhaps nationalization. You know that doing this would cause a meltdown of all the markets for the assets on the banks' books. What would you do?
Wouldn't you try to first move the bulk of those assets to the Government's account, leaving just enough toxic sludge on their balance sheets to be able to come back after the stress tests and declare them bankrupt? In the interim, before the stress test outcomes are declared, you can auction of the assets to the market at whatever they will fetch but do it in an orderly fashion.
If so, isn't the Geithner plan exactly the first step needed to do that?
Parent Post
Hymns for the Lord Sat Mar 21 22:14:58 2009 CDT #
Jay D. says:
...........ferst............
Jay D. Sat Mar 21 21:30:08 2009 CDT #
Speed Racer says:
Nemo? Again?
Speed Racer Sat Mar 21 21:30:14 2009 CDT #
strongbad says:
Banks are the stupidest businesses on the face of the earth.
Insurance companies are a close second.
strongbad Sat Mar 21 21:32:54 2009 CDT #
Comrade Bear (tj and the bear) says:
Maybe there is an opportunity here for added transparency ...
More like added prosecutions, if and when those ever get started. Banks these days are often squandering taxpayer's money, regardless of whether it's through negligence (as probably exemplified by this video) or fraud (as potentially described in the bulk sale post).
Comrade Bear (tj and the bear) Sat Mar 21 21:36:45 2009 CDT #
Anonymous says:
Citi C-class managers need to be prosecuted and swiftly. Not only have they destroyed a banking giant but they are now resetting the apr on credit cards to shocking figures even for those of us with nearly no debt, high income, a history of payments that greatly exceed the minimum and who have never missed a payment. I won't be content until their is both an increased regulatory apparatus around these rapacious industries and until we see massive numbers of executives in jail from all of these failed companies.
Until then I'm voting against the incumbent whoever he/she is...
Parent Post
Anonymous Sun Mar 22 09:44:06 2009 CDT #
taxdoc says:
Wow - what a well-run organization. Nationalization would clearly be a bad thing....
taxdoc Sat Mar 21 21:37:35 2009 CDT #
peAk says:
Prices for fancy hillside homes with pools are adjusting to the new vanishing edge economy.
peAk Sat Mar 21 21:38:59 2009 CDT #
Jay D. says:
.....CR .....link is broken.........
File Not Found!
You have followed a link that no longer exists on the server or has been relocated.
Jay D. Sat Mar 21 21:41:10 2009 CDT #
wally says:
Yet another convincing reason to take the people who run the big banks and get them the hell out of there.
wally Sat Mar 21 21:45:41 2009 CDT #
JD says:
Shut up! If it wasn't for dysfunctional Banks I would have to get a real job.
JD Sat Mar 21 21:45:50 2009 CDT #
Meg says:
here's a non-broken link:
http://www.nctimes.com/articles/2009/03/18/business/z8bf28a6caf4565098825757d00707bd4.txt
Meg Sat Mar 21 21:48:27 2009 CDT #
Jay D. says:
..............point well taken ......JD.............
Jay D. Sat Mar 21 21:48:56 2009 CDT #
Comrade Bear (tj and the bear) says:
OT, but...
1) Interesting post at Angry Bear. Apparently the people that would buy into Geithner's plan won't play because they're afraid any money they made would be "bonus taxed" away. Gotta love it!
2) Both BigPicture and BubbleInfo have referenced a WSJ article pushing foreigners as a solution to housing's woes. Sheesh. Even if you remove the oversupply, housing will still revert to historical income multiples and homeownership rates.
Comrade Bear (tj and the bear) Sat Mar 21 21:53:05 2009 CDT #
dryfly says:
1) Interesting post at Angry Bear. Apparently the people that would buy into Geithner's plan won't play because they're afraid any money they made would be "bonus taxed" away. Gotta love it!
Tim - you are wasting your time. Time for the d00dz getting GS pay scale to handle it all - shut'em down if they don't have the collateral & adequate capital reserves. Sunday night wouldn't be too soon [wait for the games to be done though - don't want a bunch of new alerts getting in the way of 'March Madness'].
Parent Post
dryfly Sun Mar 22 09:27:39 2009 CDT #
Doc at the Radar Station says:
"Banks are overwhelmed". I would submit that nearly *everybody* is overwhelmed. The entire economy has eliminated all of the CUSHIONS. Just like removing the cushions between vertebrae because we don't have to walk on uneven surfaces any longer... Employers don't have an extra employee to do X just in case, hospitals don't have extra space in case of an epidemic... See a pattern here? Too big to fail is simply too big and complex, period. We need the AT&T solution applied to finance. Break them up!
Doc at the Radar Station Sat Mar 21 21:53:39 2009 CDT #
ATM card and $19 in the bank says:
Why isn't there a greater use of auctions? There seem to be buyers out there, and the banks can hardly argue appraisals when faced with the evidence of the highest bid. Or is there some downside to auctions I am not considering?
ATM card and $19 in the bank Sat Mar 21 21:54:50 2009 CDT #
Anonymous says:
Or is there some downside to auctions I am not considering?
How about, we don't like the prices that auctions will arrive at?
Anonymous Sat Mar 21 22:00:43 2009 CDT #
Anonymous says:
Comrade Bear:
Read the WSJ article tonight re private money participating in the new public/private assets plan. ACtually laughed about the part with bonuses and whether they would be taxed.
My points?
1. We're in survival mode. You don't get extra brownie points for participating in the possible solution of a problem that you helped create. Exceptionally short-sighted.
2. Typical financial mindset that I've grown to hate: bonuses. 99% of my friends/peers don't get them, why should you? If you make any money, it'll be on making a smart investment with a decent risk premium markup. There's your money...
3. If I had a large sum of money to manage and extremely nervous investors who were ready to bolt except for the ol' redemption restrictions, why would I be willing to invest in something that is totally opaque and cannot be valued at market? Hence, that's why the hedge fund managers want the bonuses - the only that they'll make money due to the excessively large risk that they'll be destroyed.
So...make the system/assets transparent and you'll get the money into it. No M2M and no private investment...
Cluster****.
Anonymous Sat Mar 21 22:02:13 2009 CDT #
FUBAR & WASS LLC says:
ATM card and $19 in the bank says:
Today, 19:54:50
“Why isn't there a greater use of auctions? There seem to be buyers out there, and the banks can hardly argue appraisals when faced with the evidence of the highest bid. Or is there some downside to auctions I am not considering?
Auctions would involve discovery of actual prices. No one can handle the bad news. Better to keep kicking the can down the road and letting the losses compound.
That plan worked very well with the zombie S&Ls from 1979 to 1992. It turned a $10-$20 billion problem into a $250 billion disaster.
FUBAR & WASS LLC Sat Mar 21 22:02:45 2009 CDT #
Basel Too says:
wall street will solve the bonus problem with book deals, after all it's worked so well in DC for avoiding payola and graft. 8-)
Basel Too Sat Mar 21 22:06:57 2009 CDT #
Comrade Bear (tj and the bear) says:
Anon,
Agreed. Although I do well, bonuses haven't figured into it. Talk to anyone self-employed about "bonuses" and they'll laugh their butts off.
Comrade Bear (tj and the bear) Sat Mar 21 22:08:24 2009 CDT #
dryfly says:
Agreed. Although I do well, bonuses haven't figured into it. Talk to anyone self-employed about "bonuses" and they'll laugh their butts off.
What do you mean - the joy of working for yourself is all the bonus* we ever wanted...
[/snark]
*I'd have a real job if I was fit to work with others - I'd make more money considering the expenses of going it alone - but two plus decades on your own tends to make a person a bit less easy to corral in a cubicle. Think of many of us 'self-employed as 'high performing' ADHD youth grows up & can't find anything else to do that will allow them to get up and walk around aimlessly whenever the spirits call.
Parent Post
dryfly Sun Mar 22 09:35:45 2009 CDT #
homedad43 says:
Comrade Bear:
Anon @ 11:02 was me.
ATM card:
Auctions are big where I'm at and a local auctioneer routinely rents the firehall nearby for Saturday morning lot auctions.
I've begun taking the kids there on Saturday mornings to watch the action. We've started some early conversation on the idea of finding "value" and the audience as a market. Case in point was the 91 piece Sterling Silver set at auction.
1. What's the deal about sterling silver since many younger marrieds could care less?
2. What's the cost of regular settings of sterling via a retailer? What's the value of having any set you can get cheaper from an auction versus paying a premium for a design that you actually might like?
3. With my wife afterwards, what would've been the value for just selling for the silver content at a PM dealer versus what I might've paid at auction?
No, I passed since I told the kids before going that I'm not spending a red cent.
If you haven't done an auction recently, I highly recommend...
homedad43 Sat Mar 21 22:12:18 2009 CDT #
Elrod says:
I prefer the East Tennessee "antique" auctions, personally. Horrifying, really, to find a porcelain goose selling for more than a beautiful armoir. Obese couple sitting in front of me says "We gonna turn hit around on Ebay!"
Then a junky "conference table" is up for sale as the "prime item" - chief selling point was that it was used "in an office in Knoxville!" Apparently some of the folks down here in Maryville think important business was conducted on said conference table in the Big City of Knoxville and hence the purchaser of said conference table would attain similar influence and importance by osmosis. That's the auctioneer's logic.
Meanwhile, the TV screens behind the auctioneer are playing "America's Got Talent" with the sound off.
Gotta love auctions here in Southern Appalachia. :)
Parent Post
Elrod Sun Mar 22 00:48:26 2009 CDT #
Oofa. says:
Bigot.
Parent Post
Oofa. Sun Mar 22 12:19:14 2009 CDT #
ATM card and $19 in the bank says:
"we don't like the prices that auctions will arrive at?"
"No one can handle the bad news."
Sad but evidently true.
ATM card and $19 in the bank Sat Mar 21 22:14:21 2009 CDT #
Doc at the Radar Station says:
For example, a unit of Citigroup, the troubled financial giant, sold a foreclosure in Temecula to an Arizona investment firm for $139,000 when comparable homes in the area were selling for $240,000 to $260,000.
Perhaps Citi is involved in a fraud scheme. They are being backstopped by the government. Maybe the investment firms who are buying up blocks of foreclosures need to be investigated more thoroughly. Who are they?...
Doc at the Radar Station Sat Mar 21 22:16:32 2009 CDT #
MLM says:
test
MLM Sat Mar 21 22:24:58 2009 CDT #
Elrod says:
test failed ;)
Parent Post
Elrod Sun Mar 22 00:49:02 2009 CDT #
Rob Dawg says:
It's the heads I lose, tails I lose aspect that angers me. All sides are playing with my money and taking a house cut at every turn.
Rob Dawg Sat Mar 21 22:25:37 2009 CDT #
Anonymous says:
http://www.nytimes.com/2009/03/21/business/21nocera.html?em
Finally, some common sense.
Anonymous Sat Mar 21 22:25:57 2009 CDT #
MLM says:
Don't miss the thread at naked capitalism re: what a huge farce the Timmay plan is.
http://www.nakedcapitalism.com/2009/03/investor-on-private-public-partnership.html
MLM Sat Mar 21 22:26:28 2009 CDT #
albrt says:
Having a giant, non-transparent, public/private Super-SIV to participate in these transactions would improve the situation for reasons that I cannot disclose because they are confidential. Just trust me on this. And please write your congressperson and ask them to be generous when they are considering funding for TARP II.
albrt Sat Mar 21 22:27:27 2009 CDT #
CRbot says:
The Latest from Ritholz:
WAMU Sues FDIC
CRbot Sat Mar 21 22:30:56 2009 CDT #
Milton Recht says:
So the guy says people are willing to pay a $100,000 more for a house than they could if they wait a little bit to deal with the bank. Plus, they can buy a house for $100,000 less than market and there are buyers who want to pay full price and they do not immediately resell the house to those buyers?
Notice they did not show us the comparable homes selling for the higher prices. I would not believe any of this story w/o seeing comparable houses actually selling at the $100,000 higher price. Also, we did not get to see the inside of the homes. Many foreclosures are a mess inside and require a lot of money to make them livable again.
Sounds like a guy just promoting his company's services without any real life situations to back up his claims and the reporter had the wool pulled over her eyes. Plus, he was not aware he lost a commission on not being able to sell these houses. Seems like he never reallly thought he had real buyers.
Milton Recht Sat Mar 21 22:32:05 2009 CDT #
Money Man says:
Call BS on that one. I am an appraiser nad I see spotless "move in ready" REO's all day long. There is just too many homes and most leave it like they found it. They did not have time to mess it up....only there for a year or two before the Bank-O. People are not mad at the foreclosure now a daze....it's just a fact of this ponzi-fied economy and they just leave out in the middle of the night so they don't have to face the neighbors.
Parent Post
Money Man Sun Mar 22 07:42:07 2009 CDT #
homedad43 says:
FYI.
Was just reading the morning thread on the Toxic Asset crap plan and noted cd's question about just putting a large purchase of silver on the credit card and then defaulting...
My PM dealer will not put any purchases of PM bullion/coinage on credit. He only does cash on the barrelhead.
Can't speak for an online dealer...
homedad43 Sat Mar 21 22:38:11 2009 CDT #
Bob Dobbs says:
"My PM dealer will not put any purchases of PM bullion/coinage on credit. He only does cash on the barrelhead."
PM and coin dealers don't intercourse around. In the old days, I heard stories about them taking out contracts on scammers.
Bob Dobbs Sat Mar 21 22:43:32 2009 CDT #
Anonymous says:
Now I'd understand if someone want's to trash the place before the foreclosure police come knocking.
Bank: "You're foreclosed on. Please leave so we can sell this property to an investor for half of what you owe"
Former Owner: "I'm taking the subzero"
Anonymous Sat Mar 21 22:45:08 2009 CDT #
Tom Stone says:
Leaving $ on the table? I am getting involved in short sales here in Sonoma County,and what I see is small investors buying at a price that barely makes economic sense (getting better though) and people buying homes to live in at a price they can afford.Not firesale prices yet,that is still a ways away.
Tom Stone Sat Mar 21 22:54:11 2009 CDT #
Anonymous says:
A foreclosure in my neighborhood sold last year for 50% off the going appraised rate in this neighborhood. The bank in question just dumped it. Another one sold for 40% off the current appraised prices. Homes have sold in this neighborhood since then, for the full appraised prices, so it really makes no sense for these banks to be stupidly dumping them for half what it's possible to get.
We do not live in an area where home prices were inflated during the boom. I believe most of the neighborhood foreclosures were due to job losses, in fact.
Anonymous Sat Mar 21 22:57:37 2009 CDT #
Captain Ned says:
Before I was a regulator, I was a banker. I worked the scratch 'n' dent side of things and moved a lot of OREO. Getting it off the balance sheet and out of the non-performing asset category was far more important that the losses taken. The regulators of that day cared much more about NPA stats than OREO sales losses
Banks don't want to hold this stuff. Funnily enough, what they're selling for now is the bottom price that the bitter-enders will get next year.
Captain Ned Sat Mar 21 22:58:28 2009 CDT #
Patrick Henry says:
I smell a rat.
"The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them."
Patrick Henry Sat Mar 21 22:59:46 2009 CDT #
CRbot says:
The Latest from Yves:
Guest Post: Some More Thoughts On FDIC And The "Systemic Risk Exception" Clause
CRbot Sat Mar 21 23:00:00 2009 CDT #
franko says:
just another example of how human systems are not at all designed or expectant of shrinkage or downsides, even IF they say they are - folks SAY they are provisioned and planning in case of bad events, but the sum of all folks/entities is NOT - and we are facing an across-the-board situation
buckle up
franko Sat Mar 21 23:03:27 2009 CDT #
cashistrash says:
tranparency? Like HR 1207, the Federal Reserve Transparency Act, which now has 39 cosponsors? I hope so.
cashistrash Sat Mar 21 23:07:23 2009 CDT #
Michael says:
Wow, I was posting about this last week when there were only 28 cosponsers.
Parent Post
Michael Sat Mar 21 23:24:52 2009 CDT #
Michael says:
Bernanke signed America's economic death warrant a couple of days ago in response to Ron Paul's bill to audit the Federal Reserve. The federal Reserve Transparency Act, bill H.R. 1207, has 28 cosponsors and growing.
http://www.campaignforliberty.com/blog.php?view=13149
Please complete this petition urging your Congressman to cosponsor and a seek roll-call vote on Ron Paul’s Audit the Fed Bill -- the first step toward ENDING THE FEDERAL RESERVE once and for all!
Link to Petition;
http://www.campaignforliberty.com/campaigns/auditthefed.php?projid=16
Parent Post
Michael Sat Mar 21 23:26:21 2009 CDT #
Comrade Bear (tj and the bear) says:
homedad43,
Call me tinfoil, but all my PM purchases were made in cash.
Comrade Bear (tj and the bear) Sat Mar 21 23:11:21 2009 CDT #
Comrade Bear (tj and the bear) says:
homedad43,
That's cold, hard cash -- no check, debit, etc.
Comrade Bear (tj and the bear) Sat Mar 21 23:14:19 2009 CDT #
Guest says:
CR Wrote: Maybe there is an opportunity here for added transparency ...
CR with respect you forgot the snark off flag.
Though it was evilly funny.
Guest Sat Mar 21 23:17:00 2009 CDT #
peAk says:
Homes have sold in this neighborhood since then, for the full appraised prices, so it really makes no sense for these banks to be stupidly dumping them for half what it's possible to get.
REO homes in my neighborhood are selling for half the 'appraised' prices, so from another viewpoint watching buyers pay twice as much for comparable but non-distressed homes makes no sense at all.
peAk Sat Mar 21 23:21:18 2009 CDT #
Yalt says:
Perhaps Citi is involved in a fraud scheme. They are being backstopped by the government. Maybe the investment firms who are buying up blocks of foreclosures need to be investigated more thoroughly. Who are they?...
My thoughts exactly, Doc. If you own a company whose losses are being backstopped, the obvious strategy is to lose lots of money trading with another entity which you also control. It'll probably look a lot more complicated than that, but scams are usually a quite simple plan overlaid with a lot of deception and diversion.
Yalt Sat Mar 21 23:25:53 2009 CDT #
Zirpy the Pinhead says:
Sort of like trying to walk and chew bubble gum at the sametime CR; spreads have blown-out while the race to the bottom looms noting Mark to Market rules per end of Q-3. Still in the 5th inning I'm afraid per my Maths another 4-5 Trillion needed 8-)
Zirpy the Pinhead Sat Mar 21 23:26:30 2009 CDT #
Max says:
Money quote from the NCT article:
And Norris said there is a huge number of foreclosures not even listed on the market yet, meaning those discounts will get bigger and banks will rush to unload properties as quickly as possible.
"Capitulation is here already," he said. "What's coming, there's a new name. It's something we still have to dream up. It's complete terror."
Max Sat Mar 21 23:27:50 2009 CDT #
garrisons2 says:
What are the best ways to see what foreclosures are in a particular city, I'm considering "snapping" a couple up :-D
garrisons2 Sat Mar 21 23:29:08 2009 CDT #
evelyn woods graduate says:
Caught part of "Life on the Edge" by John Stoessel. Urban pioneers buying houses in Detroit for $500. Fix up, move in and live life. Artists and others. Cool.
evelyn woods graduate Sat Mar 21 23:33:40 2009 CDT #
mark says:
I spend two weeks a month in a Detroit suburb. When I mention this to the people I work with, they just shake their heads. Perhaps it'll work out for these pioneers, or perhaps they'll end up dead. Seriously, there are parts of Detroit where it's not even safe to drive through, much less live.
Parent Post
mark Sun Mar 22 09:36:21 2009 CDT #
Max says:
This whole underpricing is another way moral hazard is raising its ugly head. How many of these fire sale houses are part of MBS collateral being "held" as TARP collateral?
Max Sat Mar 21 23:34:27 2009 CDT #
Max says:
What are the best ways to see what foreclosures are in a particular city, I'm considering "snapping" a couple up
Are you friends with any asset managers at Citi?
Max Sat Mar 21 23:36:06 2009 CDT #
Tumbleweed says:
I suspect there is more to the story. Once a bank has a few bad experiences with vacant REO's (vandalized by meth heads, the walls knocked down to rip out the wiring, perhaps burned to the ground), they tend to get very anxious to get these potential bombs off their books. $100K discount on a $250K house is not that much, considering the downside risks. Those other offers may have come in after the bank committed to the $100K offer. Maybe it was stupidity, maybe just the sort of thing that happens during chaotic liquidations.
Private sellers sometimes dump their merchandise at similar fire-sale prices. Several times, I've had to give away good furniture when I moving, because I couldn't sell it and I didn't want to take it with me.
Tumbleweed Sun Mar 22 00:09:18 2009 CDT #
Michael says:
I wonder if the banks are being told by some higher powers to hold the line on high prices. Who would those higher powers be? Why, till the Fed reinflates the bubble? Good luck with that, the banks are just shooting themselves in the foot for doing as the upper clowns say.
Michael Sun Mar 22 00:09:42 2009 CDT #
mz says:
If I have 100 billion worth of toxic assets on my books which are actually only worth only 30 billion, I can bid 3 billion and the Goldman Sachs boys... I mean the Treasury, will put up 97 billion of the government's money - and I've just made a 67 billion profit.
Of course, I can't put the 3 billion myself, but that's nothing that can't be easily arranged one way or another, relationships being what they are among the banking big boys. You scratch my back, I scratch yours.
It's the mother of all moral hazards.
mz Sun Mar 22 00:27:43 2009 CDT #
Bob Dobbs says:
"Caught part of "Life on the Edge" by John Stoessel. Urban pioneers buying houses in Detroit for $500. Fix up, move in and live life. Artists and others. Cool."
There's no question that interesting subcultures can grow in the fertile decomposed matter left by a rotting industrial city. Oakland back in the '70s and '80s before it gentrified -- there was some interesting stuff going on there, some very interesting people hanging out there. Also 300-400 murders a year. Always a downside.
Bob Dobbs Sun Mar 22 00:30:03 2009 CDT #
splat says:
"Oakland back in the '70s and '80s before it gentrified" ??
OAKLAND ??? Gentrified ?? Which street ? That place still looks like a warzone. Beruit in 1987 looked better.
Parent Post
splat Sun Mar 22 02:35:59 2009 CDT #
peAk says:
"Capitulation is here already," he said. "What's coming, there's a new name. It's something we still have to dream up. It's complete terror."
The view may look good, and the the water smooth, but we're all in The Vanishing Edge Economy, some closer to the fall, moving faster, others further back, moving slower, but all moving to the edge.
peAk Sun Mar 22 00:31:14 2009 CDT #
Bob Dobbs says:
"The view may look good, and the the water smooth, but we're all in The Vanishing Edge Economy, some closer to the fall, moving faster, others further back, moving slower, but all moving to the edge."
It's beginning to seem that you've got to be so diversified that you are guaranteed to lose money. Because that's the only way you can expect to keep _any._
Bob Dobbs Sun Mar 22 00:33:30 2009 CDT #
RockyR says:
Ah, the banks don't CARE at this point. The fix is in. The government has "a plan" in place to allow the banks to unload these bad "assets". Fed is going to print some crisp new bills to pay for it all. The saver gets wiped out, the debtor gets absolved, and China gets the bone.
It's all good. We'll be back to flipping houses in no time.
RockyR Sun Mar 22 01:18:10 2009 CDT #
DIPing to China says:
NY Times has some very talented graph makers.
http://www.nytimes.com/interactive/2009/03/03/us/20090303_LEONHARDT.html?ref=business
DIPing to China Sun Mar 22 01:53:07 2009 CDT #
Comrade Kristina says:
Oh come on. You people are the best and the brightest and yet, you always feign surprise. Surprise! The AIG bailout was used to pay off CDS bets, who didn't know that was the case last year?
So far as banks not trying to salvage what loans they are holding, they simply don't give a damn. Loans are secondary to their major problem now. The giant 6% default rate has already did them in.
Comrade Kristina Sun Mar 22 02:26:25 2009 CDT #
Trance says:
@DIPing in China,
Indeed the graph is nice. And the winner is...Mackinac County, Mich. @ 27.6%. Hmm...one can walk on the street and wonder if the person passing by has a job.
Trance Sun Mar 22 02:39:46 2009 CDT #
blah says:
its ok that they give a few billion here a few billion there to there friends. look, wouldnt you do the same? i mean a billion is 1/1000th of a trillion! These guys are working very hard to save the world! be hopeful! our economy will be back to nomral by xmas!
blah Sun Mar 22 03:04:56 2009 CDT #
CRbot says:
The Latest from Yves:
Links 3/22/09
CRbot Sun Mar 22 03:55:08 2009 CDT #
Broward Horne says:
"It's beginning to seem that you've got to be so diversified that you are guaranteed to lose money. Because that's the only way you can expect to keep _any"
That's how it has to work. Bad promises have been searching all over the financial world for a place to hide and so they've corrupted all asset classes.
Broward Horne Sun Mar 22 05:13:58 2009 CDT #
Anonymous says:
Have I missed the discussion about East Europe's collapse?
Or the death of the euro? After all, it just went down something like a cent to something like 1.35 - no, that '3' is correct, not the boring 2 that was there for weeks when people were discussing the inevitable end of the eurozone.
Why does the discussion keep returning to the relatively minor problems of the U.S., when as we all know, it is the larger world that it is suffering much worse than anything reported in the American media.
Anonymous Sun Mar 22 05:33:20 2009 CDT #
1 currency [yogi] says:
Like it or not, this is a blog focused on the US.
1 currency [yogi] Sun Mar 22 05:43:54 2009 CDT #
Broward Horne says:
"Like it or not, this is a blog focused on the US"
"Oh, my god!
They killed Kenya!"
Those bastards.
Broward Horne Sun Mar 22 05:47:21 2009 CDT #
Anonymous says:
HOUSING: Banks selling properties in bulk for cheap
URL has changed. New URL:
http://www.nctimes.com/articles/2009/03/18/business/z8bf28a6caf4565098825757d00707bd4.txt
Anonymous Sun Mar 22 06:11:04 2009 CDT #
Comrade Byzantine_Ruins says:
Anonymous says:
Today, 6:33:20 AM
Why does the discussion keep returning to the relatively minor problems of the U.S., when as we all know, it is the larger world that it is suffering much worse than anything reported in the American media.
Most Americans, even most American economists, have a national-scope paradigm of economic analysis. I'm sure the Chinese are the same way, which is kind of a salient point when understanding this crisis, I bet. The global scope events just has not yet integrated as part of the same picture.
And can you blame them? I don't know about -- in proportion to their ecumene's economy, if there have been bigger bubbles -- but by raw numbers this really dwarfs any of the human races previous economic blunders. Two global hegemons in a three-legged race to perdition.
Why would you have an analytic toolset that encompassed it? I mean, there are good reasons to have done so, but not natural ones whereby any thinking individual would have built the model as a part of coming to awareness of the milieu. Especially as the currency regime hegemon, Americans have virtually no experience with life in the world of soft currencies.
Anyway, it wouldn't really matter if they did. Even with perfect self-awareness, the best game for the bankrupt hegemon is to play it to the hilt and hope to come out on top of the footrace to Weimar by being the last one still presumptively alive. That's without question our national policy on this matter.
Comrade Byzantine_Ruins Sun Mar 22 06:13:58 2009 CDT #
Guest says:
http://www.professorfekete.com/articles%5CAEFThereIsMoreWhereThisGiftHasComeFrom.pdf
World view with US as the focus.
Guest Sun Mar 22 06:20:44 2009 CDT #
reptillian says:
Frank Rich on Obama's Katrina Moment
reptillian Sun Mar 22 06:38:56 2009 CDT #
Guest says:
Obama seems more engaged but I think he is in a tighter box. It appears to be a Gordian knot.
Guest Sun Mar 22 06:53:50 2009 CDT #
Lawyerliz says:
So he should cut the knot.
Parent Post
Lawyerliz Sun Mar 22 09:45:58 2009 CDT #
Anonymous says:
'That's without question our national policy on this matter.'
Actually, I don't think the U.S. is really capable of having something resembling 'national policy' at this point. The reason the German government has been bailing out Hypo Real is to prevent greater problems in the Pfandbrief (covered bond) market - a policy which can be heard and explained in a couple of minutes on the radio news. And in the case of Hypo Real, the management has been switched out, and no bonuses are being paid to help hold on to the people that created the mess.
That is a national policy.
What the U.S. has, at least till now, is something else - anyone familiar with how many South America nations have been 'managed' over their history can probably describe it, but the pithy term which covers it, apart from kleptocracy (and America is not African in this sense), hasn't been discovered yet.
Anonymous Sun Mar 22 07:07:31 2009 CDT #
Haha says:
Frank Rich sums it up pretty well.
Haha Sun Mar 22 07:10:40 2009 CDT #
Paradigm Lost says:
Comrade Byzantine: "Two global hegemons in a three-legged race to perdition."
That's good!
Paradigm Lost Sun Mar 22 07:18:26 2009 CDT #
Pavel says:
"Anyway, it wouldn't really matter if they did. Even with perfect self-awareness, the best game for the bankrupt hegemon is to play it to the hilt and hope to come out on top of the footrace to Weimar by being the last one still presumptively alive. That's without question our national policy on this matter."
I like this analysis for its scope and attempt at a deeper understanding.
Something I wrote last year in these comment boxes:
Pavel Chichikov writes:
Mistakes are inevitable. There is no way of learning without them. But
this morning it occurred to me that although we may see plenty of
hysteria, what we really ought to worry about is hysteresis, that the
system may settle into a new and unforeseeable state.
Pavel Chichikov | 11.15.08 - 12:11 pm | #
Pavel Sun Mar 22 07:20:46 2009 CDT #
brushes9 says:
3 dead police officers in Oalkland this morning...
brushes9 Sun Mar 22 07:21:24 2009 CDT #
CRbot says:
The Latest from Ritholz:
Investigating AIG
CRbot Sun Mar 22 07:24:49 2009 CDT #
Pavel says:
"The global scope events just has not yet integrated as part of the same picture. "
How wise are the wise men, and if they are sufficiently wise, how influential are they, or can they be?
"...the footrace to Weimar "
Weimar was not the final lap in that particular race.
Pavel Sun Mar 22 07:27:02 2009 CDT #
Pavel says:
Neither Rich nor the NYTimes are favorites of mine, but I must say that Rich's commentary resonates with me.
Pavel Sun Mar 22 07:36:08 2009 CDT #
Comrade Byzantine_Ruins says:
Anonymous says:
Today, 8:07:31 AM
“'That's without question our national policy on this matter.'
Actually, I don't think the U.S. is really capable of having something resembling 'national policy' at this point.
Here we disagree. The policy cohort is small, insular and the principals in the Fed, Treasury and Administration all have virtually identical interests in this matter. The strategy is obvious and distinctly neutral. So, I think that you will see them ride competitive devaluation as if they were the tightest of conspirators, even if they aren't.
That is a national policy.
I'm not going to include a qualitative judgment as a yardstick for identifying policy. Policies are often one or both of disconnected from first-order reality and implicate.
What the U.S. has, at least till now, is something else - anyone familiar with how many South America nations have been 'managed' over their history can probably describe it, but the pithy term which covers it, apart from kleptocracy (and America is not African in this sense), hasn't been discovered yet.
Kleptocracy works pretty well. It's the same institutions that did it in the developing world, pretty much the same pattern, now it's just inwardly directed. China's scheme to rob the West of its capital provided a historic twist, however, and the Anglo-Saxon business tradition finally got to meet its match for crookedness in a fully functional Chinese state where the mandarins had overcome the Emperor. Likewise, the sons of the Yellow Emperor got a faceful.
Comrade Byzantine_Ruins Sun Mar 22 07:38:06 2009 CDT #
Anonymous says:
'The policy cohort is small, insular and the principals in the Fed, Treasury and Administration all have virtually identical interests in this matter. The strategy is obvious and distinctly neutral.'
The problem being, they aren't the only players, but act as if they were. Which is why I disagree with the idea of national policy. Take the ongoing collapse of GM - the effects are much broader than merely the above mentioned players.
Maybe I can sum it up, poorly, this way - under Hoover, the U.S. had much of what you described as a distinctly neutral group, and it failed. Under Roosevelt, the U.S. had a national policy, and though it continuity with the past is beyond dispute, the rules changed.
I think we will see a national policy emerge - this is still the age where Wall Street repeats that it isn't the fall that hurts, its hitting the ground.
Since the fall is ongoing, most Americans have no idea how far down really is. The world, however, has a bit more experience in that area. And more experience, at least in a negative sense, of what to avoid.
To put it differently - the rest of the world has yet to understand the brilliance of paying public bonuses for failure. And it is reasonable to assume that the world has the more reasonable perspective - at least, at a bare minimum, of not looting the treasury in full public view, defending your right to engage in such because the free market's invisible hand is better at sleight of hand than taxation.
Parent Post
Anonymous Sun Mar 22 10:28:16 2009 CDT #
Pavel says:
"the Anglo-Saxon business tradition finally got to meet its match for crookedness in a fully functional Chinese state "
And the barbarian princes come bearing tribute? I heard that image being expressed some time last year.
Pavel Sun Mar 22 07:43:00 2009 CDT #
Jay D. says:
..........Ken Karpman Plummeted From a Six-Figure Salary to Earning $7.29 an Hour.........
http://abcnews.go.com/Business/story?id=7111098&page=1
..........you better prepare to learn riding a bike rather than commenting in this blog...
Jay D. Sun Mar 22 07:46:24 2009 CDT #
Samdog says:
Jay D. says:Today, 8:46:24 AM
"........Ken Karpman Plummeted From a Six-Figure Salary to Earning $7.29 an Hour.........
Jay--
I watched this video a couple of days ago. Amazing stuff--but the family seemed tough and Ken still had a sense of humor.
Parent Post
Samdog Sun Mar 22 10:14:26 2009 CDT #
Samdog says:
Jay D,
I was amazed at Ken's sense of humor in the face of adversity. I thought this video was inspiring rather than depressing.
Parent Post
Samdog Sun Mar 22 10:49:57 2009 CDT #
Samdog says:
I want my taxpayer-subsidized McMansion, too.
Samdog Sun Mar 22 07:52:32 2009 CDT #
kidbuck says:
This is what happens in any industry when those at the top think they have an exclusively indoor job. When they just sit at their desk and read reports or go to indoor meetings they loose all touch with reality. Every layer of management that reports upwards adds a little more spin.
One of the things the Marine Corps does right is that the Top Brass get out and inspect the lowest troops where they live and work.
kidbuck Sun Mar 22 07:57:32 2009 CDT #
ATM card and $19 in the bank says:
Frank Rich seeks transparency. I don't think Obama can make it any clearer:
The President is 100% satisfied with the way Geithner and Summers are handling Wall Street.
This is the kitchen-garden President. This is the detante-with-Iran President. This is, maybe, the Dr. Government Cheese healthcare-for-all President. This is, as he has already made clear, the "What happened on Wall Street is perfectly legal" President.
ATM card and $19 in the bank Sun Mar 22 08:03:05 2009 CDT #
Counterpointer says:
Looks like the market having trouble clearing. Not sure why. Prices seem fairly set and agreed.
Oh, wait.
C
Counterpointer Sun Mar 22 08:17:34 2009 CDT #
tanaw says:
Zero Hedge:
Sunday, March 22, 2009
The Amazing TALF Bait And Switch
Posted by Tyler Durden at 2:14 AM
The greatest bait and switch of this generation in all its visual splendor. As a result of the TALF's non-recourse nature, a hedge fund X can buy Bank X's MBS Portfolio which is marked on the bank's books at 80 cents on the dollar (but has a market price of 20 cents) for the marked price with a 3% equity check and TALF filling the balance. A day later, Bank X repurchases the portfolio from hedge fund X at the 20 cent market price, pays a $5 million fee for the "trouble" and waits for the portfolio to appreciate to 50 cents on the dollar by 2014. Hedge fund X takes a 75% loss on its nominal equity stake but more than makes up in transaction fees. The TALF portion takes a 75% loss with no recourse and no margin to fall back on.
As a result Bank X takes no writedown now, and in 5 years may book an equity profit of as much as $25 million (net of transaction fees paid to the Hedge Fund X), while Hedge Fund X books a profit of $3.2 million for one day's work...
Lastly the U.S. taxpayer loses $54.3 million on a $77.6 million TALF Investment, or 70% (net of 5 years of interest income).
Note: the maximum TALF size is $1 trillion. Will U.S. taxpayers suffer $700 billion in losses from the TALF? Ask your congressman.
tanaw Sun Mar 22 08:20:22 2009 CDT #
volker the viking says:
Small things: noisy neighbors gathering in the yard across the street, drinking, partying; neighbors up the street with noisy mufflers and oversized wheels gathering in the driveway, comparing cars, drinking; a police cruiser prowling the area with a spotlight searching, sweeping, slowing, backing up, looking for what?
this is the stuff of civil disobedience, not newsworthy, gathering energy
volker the viking Sun Mar 22 08:33:50 2009 CDT #
Comrade Byzantine_Ruins says:
Pavel says:
Today, 8:43:00 AM
And the barbarian princes come bearing tribute? I heard that image being expressed some time last year.
From a larger perspective, America and China are going to be the Bill and Hillary Clinton of history. A cocaine-fuelled power couple who love, hate, envy and despise their eternal partner, to whom they are irrevocably wedded. Two nations totally in love with the idea of their historical mission and their historical centrality. Bitter war, harmonious alliance, tense coexistence, all these things are not merely possible, but inevitable.
I think the cultures are going through a phase of getting to know one-another that has as many faces as there are agents interacting.
I play Go and take care to learn Chinese scoring rules and not Japanese. A kid in Shenzen thinks of himself as part of the hip-hop nation and struggles to reconcile it with Chinese-ness. A trade agent pays a bribe to a technology development official to get a factory approved. What is the predominating influence?
Comrade Byzantine_Ruins Sun Mar 22 08:37:14 2009 CDT #
Counterpointer says:
volker - same around here. Massive party next door Friday night by the kids on army scholarships at American U, cops in the mall carpark Saturday night. Siphoning. Random vandalism. And this is a neigborhood where 6 months ago the definition of crime was letting your grass grow over two inches.
C
Counterpointer Sun Mar 22 08:42:21 2009 CDT #
volker the viking says:
Obama compared Timmay to Alexander Hamilton the other day, saying '...nobody's working harder or dealing with a multiplicity of problems all at the same time'. Okay.
This guy--Timmay--is the one who couldn't figure out TurboTax. *DONT_KNOW*
volker the viking Sun Mar 22 08:43:05 2009 CDT #
ponziMCC says:
Anybody know what the odds are this week that we get the
"we support a strong dollar" statement?
ponziMCC Sun Mar 22 08:54:22 2009 CDT #
REBear says:
"Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was pushed out of Harvard’s presidency at the bubble’s height, you have to wonder how he can now sell the administration’s plan for buying up toxic assets with the help of hedge funds"
REBear Sun Mar 22 08:57:34 2009 CDT #
Tom Stone says:
Comparing oakland to Beirut is grotesque.Bob Dobbs is correct in stating that large parts of the city have been gentrified as a walk around many parts of the city will confirm.There are still large pockets where multigenerational poverty and lack of any opportunity are evident,the schools are still completely dysfunctional,and the entrenched corruption of the last 100 plus years still has deleterious effects.However many thousands of older homes have been repaired and thousands of new good quality units built.if you look at the geography and climate of oakland you will see that the problems are the result of political decisions made over many decades.The ugly parts of town you see from BART are not the city in whole,and after the next big quake I expect some one with $ and intelligence to see the opportunities.Look at the port and the fact that oakland is the biggest rail and highway hub in the SF bay area.Corruption and political expediency have made oakland what it is,those things can change over time.
Tom Stone Sun Mar 22 09:11:24 2009 CDT #
ponziMCC says:
"I need a couple of wins," he said, "and I think that, hopefully, it'll mushroom up like it caved in."
oh yeah, it'll mushroom up all right
ponziMCC Sun Mar 22 09:15:51 2009 CDT #
Anonymous says:
Fraud.
Anonymous Sun Mar 22 09:20:58 2009 CDT #
Basel Too says:
from the Jay D's above link:
The Karpmans are now on food stamps and a tight budget that doesn't nearly cover their children's $30,000 private school tuition. But thanks to an anonymous donor, the Karpmans children's tuition has been covered through next year and they are deeply appreciative
Food stamps and $30K private school tuition...
Basel Too Sun Mar 22 09:23:43 2009 CDT #
Anonymous says:
'Food stamps and $30K private school tuition...'
Yes, the American Dream.
Parent Post
Anonymous Sun Mar 22 10:15:48 2009 CDT #
dryfly says:
'Food stamps and $30K private school tuition...'
Yes, the American Dream.
Hey - nothing new there. I had a buddy whose dad ran a hardware store - he claimed it was always toughest to get the folks in the 'nice part of town' to pay their bills as compared to those living in the 'time check' section [working class]. He said it wasn't just a matter of 'entitlement' though there was plenty of that in the 'nice part' - it was also a case of many in the 'nice part' not having any money - totally house poor.
If I were a small biz guy selling to the general public - I'd want renters buying from me and NO ONE with a minimcmansion unless it was cash on the barrel... not until the economy straightens out at least.
Parent Post
dryfly Sun Mar 22 10:24:35 2009 CDT #
punditry says:
make everything about his economic policies transparent and hold every player accountable
from frank rich's nyt piece.
imo, this kind of transparency means our foreign debt holders recignize it's unpayable, and that our standard of living would face a massive re-set. just the kind of thing Cheney always said was 'non-negotiable'
as wrong as it is, it just can't be allowed to happen.
punditry Sun Mar 22 09:35:16 2009 CDT #
dryfly says:
imo, this kind of transparency means our foreign debt holders recignize it's unpayable, and that our standard of living would face a massive re-set. just the kind of thing Cheney always said was 'non-negotiable'
as wrong as it is, it just can't be allowed to happen.
So instead we 'default' via currency devaluation & 'inflation'... same result but our 'trading partners' don't get as angry because they know they will 'get out of dollars' first before all our other 'stupid' trading partners.
Should be exciting when they all run for the exits.
Parent Post
dryfly Sun Mar 22 09:42:58 2009 CDT #
Outsider says:
"Think of many of us 'self-employed as 'high performing' ADHD " -- that's so funny because it's so true!
Why did you never become a business consultant? I know someone who did just that after he sold his mfg. business. He did really well and personally I think you'd do better.
Outsider Sun Mar 22 09:38:55 2009 CDT #
dryfly says:
Why did you never become a business consultant? I know someone who did just that after he sold his mfg. business. He did really well and personally I think you'd do better.
I might do that yet but would do it on the marketing side - teaching small mfg companies how to set up a targeted NAFTA-wide sales network on the cheap. Most mfg guys [those who have survived] *KNOW* how make stuff like ringing a bell - they are very good manufacturers & don't need my help there - what they can't do is (1) communicate what they do & how good they are to big corporate buyers and (2) navigate all the gatekeepers & systematic 'hurdles' those big corporations put in front of them... plus they don't have time to do it AND produce their 'products'. I know how to do that and do it on the 'cheap'. Some day I'll hang up my shingle but not yet.
Parent Post
dryfly Sun Mar 22 09:49:53 2009 CDT #
volker the viking says:
60 Minutes interview quote from Obama:
"Tim Geithner is as sharp and as skilled a public servant as we have..."
Translation: We're freaking doomed! =-O
volker the viking Sun Mar 22 09:40:04 2009 CDT #
mock turtle says:
re to volker the viking
possible alternative interpretation to obamas statement
"tim can be a skillful force for evil or a skillful force for good...ive got him on a leash"
Parent Post
mock turtle Sun Mar 22 09:51:13 2009 CDT #
dryfly says:
"tim can be a skillful force for evil or a skillful force for good...ive got him on a leash"
Didn't Nixon say the same thing about G. Gordon Liddy? Something like 'Liddy is a Hitler but at least he is OUR Hitler." Maybe it was Halderman who said it - whatever.
Parent Post
dryfly Sun Mar 22 10:00:53 2009 CDT #
Max says:
I'm watching a piece on CNN about TMZ "stalking" congresscritters in DC.
I, for one welcome, our new populist overlords.
Max Sun Mar 22 09:46:50 2009 CDT #
The Lorax says:
Next thing you are going to tell us that those "Investment firms" are being funded and staffed by the same billionaires who started this mess.
The Lorax Sun Mar 22 09:48:15 2009 CDT #
Kosher War says:
http://www.nypost.com/seven/03222009/news/regionalnews/kosher_dog_fight_160790.htm
roflmao
Kosher War Sun Mar 22 09:48:21 2009 CDT #
REBear says:
HEDGE FUNDS
SEC concerned about 'preferential redemptions'
Regulator forms Hedge Fund Working Group to handle probes, Walter says
REBear Sun Mar 22 09:51:55 2009 CDT #
REBear says:
For now, Timmay and Summers have O by the leash.
REBear Sun Mar 22 09:53:27 2009 CDT #
dryfly says:
For now, Timmay and Summers have O by the leash.
I think you confuse 'leash' with 'short hairs'.
Parent Post
dryfly Sun Mar 22 10:02:25 2009 CDT #
mock turtle says:
dryfly your comment up thread about GS15
exactly right
plus i find no compelling argument (im listening if there is one) to believe that capital gains would be taxed at the bonus or retention rates
these people have really big ones...must make it hard to walk
mock turtle Sun Mar 22 09:55:03 2009 CDT #
Counterpointer says:
mock - they have a wide stance.
C
Parent Post
Counterpointer Sun Mar 22 10:04:27 2009 CDT #
dryfly says:
plus i find no compelling argument (im listening if there is one) to believe that capital gains would be taxed at the bonus or retention rates
these people have really big ones...must make it hard to walk
The guys getting the bonuses AREN'T the guys getting the capital gains... some big firm like GS goes in and 'buys' the distressed assets & flips them for a big gain. GS then pays the cap gains... but the cogs (i.e. 'traders' executing the deal) working for them gets the bonus as part of their 'compensation'. Talk about Georgian 'rent capture'...
One way around it for the banks - give their cogs 'payment in kind'... give them 'options' to buy the assets at a set price - if the market recovers above that level - they do great... if not they get nothing and will like it.
It also kicks the can down the road... those assets won't heal for YEARS at best. Moves them off the books & out of sight w/out the cogs getting a big payday today - only in the future IF they get bought at a low enough price. Since the gov'y is also buying at that low price (or insuring that price)... it actually dovetails w/ our best interest.
But that would mean those traders would actually have to work some & have skin in the game - whoa that would suck.
Parent Post
dryfly Sun Mar 22 10:12:45 2009 CDT #
Anonymous says:
Erin was on Meet the Press just now
Yes I agree with what Imelt says this is not just an economic cycle but an economic reset. "the idea that we will all have three cars in our driveway was the old reality - it may be that two cars will have to be enough maybe even one car"
But the best was when she was talking a big lock of her hair got stuck in her mouth - she tried to pull it out but it was lodged in there - the funniest think I have seen in a long time -
Anonymous Sun Mar 22 09:59:59 2009 CDT #
Terska says:
A smart real estate marketer would be advertising tour packages for wealthy foreign buyers to come buy up the Fl and CA real estate. With the weakening dollar there could be a bonanza on cheap vacation and retirement homes for wealthy Europeans, Asians and S Americans.
Maybe Geitner has a point that these are only misunderstood assets. They were misunderstood on the high side and now they are misunderstood on the low side.
Terska Sun Mar 22 10:00:36 2009 CDT #
CRbot says:
The Latest from Yves:
Guest Post: Is Obama Running Interference to Protect Bankers' Pay?
CRbot Sun Mar 22 10:00:47 2009 CDT #
Guest says:
FYI, Obama will on 60 minutes tonight AND he has a national network press conference Tuesday night. I guess he really wanted to be a movie star, not President.
Guest Sun Mar 22 10:01:17 2009 CDT #
Lawyerliz says:
The REOs in the Miami area are a mess, according to
the young couple who looked at 70 of them.
It may be that an employee is being bribed to sell so low.
But it is possible that the inside was terrible and the buyer made a serious mistake buying for that much.
all South Fla needs is a small hurricane. Empty houses with storm shutters won't have them put up.
Small leaks that even a poor owner would have fixed
will turn into huge leaks. Banks will be too overwhelmed to ask for claims to be paid for quite a while and then far too overwhelmed to fight for the payment, one house at a time.
The problem, as I've posted before, is where the rubber meets the road: figuring out a reasonable price and a reasonable loss to take and not blaming the employee for making the decision and taking the
loss. I suggest starting with the property appraiser's office. We gone from a state of affairs where the homes were always underappraised (from 72 to 2006,7,8) to where they are overappraised. So, if you are rule minded, you could allow the employee to go, say 20-30% below tax appraisal. With a bonus (!) if the employee gets more, and allowed to take another 10% off after so many days. and another 5% after so many more days. But you'd still have to hire more people and the banks still think (if there is any thinking here) that you get more efficient by firing people.
Lawyerliz Sun Mar 22 10:02:30 2009 CDT #
Counterpointer says:
Put the crooked management in the mercy seat, now:
http://www.youtube.com/watch?v=n8CzFVm1Yio
C
Counterpointer Sun Mar 22 10:10:52 2009 CDT #
steelhead says:
Frank Rich on Obama's Katrina
http://www.nytimes.com/2009/03/22/opinion/22rich.html
steelhead Sun Mar 22 10:14:17 2009 CDT #
Lawyerliz says:
Oh, Terska, the foreigners will save us meme.
Not!!
Yes, foreigners have been buying in Florida for years and years. There are enclaves of Germans and Canadians etc, here and there. They will no doubt continue to buy in small numbers. But no one and nothing will save the new condo towers, nor maybe the older ones either. Gary Poliakov, who is Mr Condominium Lawyer and has been for at least 25 years, has a column in the local fishwrap in which he asks for a bailout of condo/homeowners associations, since they are on a dizzying downward spiral. And he actually has a point. Viable condos can handle a certain number of foreclosures, but there's a tipping point where they can't anymore and fewer and fewer owners are paying a greater amount of the assn fees, until everyone stops paying.
and yet we were out for dinner and didn't go to the Olive Garden because the wait was too long, and Applebys was busy, with nearly all the tables full, but we didn't have a wait.
It's bewildering.
Lawyerliz Sun Mar 22 10:14:25 2009 CDT #
AIG is helping Al Qaeda says:
Here's my frustration. Why is there not even more outrage? Like cars on fire in streets? Right now....today?
AIG is helping Al Qaeda Sun Mar 22 10:15:51 2009 CDT #
steelhead says:
Frank Rich on Obama's Katrina.
http://www.nytimes.com/2009/03/22/opinion/22rich.html
steelhead Sun Mar 22 10:16:12 2009 CDT #
azurite says:
Because people need those cars to drive to work? Or look for work? It's stupid to destroy your own--if I'd burn any cars it'd be in employee parking lots--and then I'd torch upper management's.
Parent Post
azurite Sun Mar 22 14:57:05 2009 CDT #
reptillian says:
"Finally, an important element of addressing the too-big-to-fail problem is the development of an improved resolution regime in the United States that permits the orderly resolution of a systemically important nonbank financial firm. We have such a regime for insured depository institutions, but it is clear we need something similar for systemically important nonbank financial entities. Improved resolution procedures for these firms would help reduce the too-big-to-fail problem by giving the government the option of safely winding down a systemically important firm rather than keeping it operating."
From Bernanke's <a =href"http://federalreserve.gov/newsevents/speech/bernanke20090320a.htm">Speech in Phoenix
See, also, US Rushing To Get More Control of Financial Giants
reptillian Sun Mar 22 10:22:55 2009 CDT #
Basel Too says:
whoa, we have a name for the treasury program.
The Treasury Department will unveil the next step in its financial rescue efforts tomorrow, announcing that it intends to create a government body, called the Public Investment Corp., to finance the purchase of as much as $1 trillion in soured loans and toxic assets from ailing banks, according to sources.
The PIC
Basel Too Sun Mar 22 10:22:56 2009 CDT #
Rob Dawg says:
*I'd have a real job if I was fit to work with others - I'd make more money considering the expenses of going it alone - but two plus decades on your own tends to make a person a bit less easy to corral in a cubicle. Think of many of us 'self-employed as 'high performing' ADHD youth grows up & can't find anything else to do that will allow them to get up and walk around aimlessly whenever the spirits call. - dryfly
Mrs. Dawg calls this AADOS (Adult Attention Deficit... Oh! Shiny!).
Rob Dawg Sun Mar 22 10:24:11 2009 CDT #
dryfly says:
Mrs. Dawg calls this AADOS (Adult Attention Deficit... Oh! Shiny!).
A friend informed me there were 'meds' for that. I replied... "I medicate myself enough already - thank you very much."
Parent Post
dryfly Sun Mar 22 10:26:58 2009 CDT #
CRbot says:
New Thread: Escondido House: Over 80% Off Peak Price
http://www.calculatedriskblog.com/2009/03/escondido-house-over-80-off-peak-price.html ( 0 comments ...You could be FIRST! )
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CRbot Sun Mar 22 10:24:48 2009 CDT #
reptillian says:
"systemically important non-financial," refers to bank holding companies, I think.
Here is a better link to Bernanke's speech:
http://federalreserve.gov/newsevents/speech/bernanke20090320a.htm
reptillian Sun Mar 22 10:25:36 2009 CDT #
M, says:
Thanks for posting about this bill ---- please call congress (202) 224-3121 and ask them to support this.
cashistrash says:Today, 12:07:23 AM EDT
tranparency? Like HR 1207, the Federal Reserve Transparency Act, which now has 39 cosponsors? I hope so.
M, Sun Mar 22 10:26:30 2009 CDT #
ponziMCC says:
“Here's my frustration. Why is there not even more outrage? Like cars on fire in streets? Right now....today?
what's stopping you? answer your own question.
ponziMCC Sun Mar 22 10:28:07 2009 CDT #
M, says:
Another good post....but congress couldn't be bothered to figure this out, and if they know about it, they know the citizens wont, so they can profit themselves from increased campaign contributions from the banks, etc. and say to taxpayers, "look we solve the problem..the banks are profitable.....sorry about the 700 billion, but it was necessary and it worked"
Post.
"Zero Hedge:
Sunday, March 22, 2009
The Amazing TALF Bait And Switch
Posted by Tyler Durden at 2:14 AM
The greatest bait and switch of this generation in all its visual splendor. As a result of the TALF's non-recourse nature, a hedge fund X can buy Bank X's MBS Portfolio which is marked on the bank's books at 80 cents on the dollar (but has a market price of 20 cents) for the marked price with a 3% equity check and TALF filling the balance. A day later, Bank X repurchases the portfolio from hedge fund X at the 20 cent market price, pays a $5 million fee for the "trouble" and waits for the portfolio to appreciate to 50 cents on the dollar by 2014. Hedge fund X takes a 75% loss on its nominal equity stake but more than makes up in transaction fees. The TALF portion takes a 75% loss with no recourse and no margin to fall back on.
As a result Bank X takes no writedown now, and in 5 years may book an equity profit of as much as $25 million (net of transaction fees paid to the Hedge Fund X), while Hedge Fund X books a profit of $3.2 million for one day's work...
Lastly the U.S. taxpayer loses $54.3 million on a $77.6 million TALF Investment, or 70% (net of 5 years of interest income).
Note: the maximum TALF size is $1 trillion. Will U.S. taxpayers suffer $700 billion in losses from the TALF? Ask your congressman."
So call your congressman about this (202) 224-3121
M, Sun Mar 22 10:29:35 2009 CDT #
Michael says:
Brilliant analysis! This should be circulated to all US Politicians.
Parent Post
Michael Sun Mar 22 10:45:44 2009 CDT #
Rob Dawg says:
We've run into a human chasm. J6P is angry over the bonuses not just because they are bonuses but because they are so very large, On the other side of the chasm are the people in the financial industry who are psychologically incapable of admitting that not only are they grossly overcompensated but they have been for decades and that level of pay contributed to the implosion of the world economy. Government employees? Fine, use the GS pay scale and I don't mean Goldmans. http://www.militaryfactory.com/military_pay_scale.asp
Rob Dawg Sun Mar 22 10:31:14 2009 CDT #
dryfly says:
We've run into a human chasm. J6P is angry over the bonuses not just because they are bonuses but because they are so very large, On the other side of the chasm are the people in the financial industry who are psychologically incapable of admitting that not only are they grossly overcompensated but they have been for decades and that level of pay contributed to the implosion of the world economy. Government employees? Fine, use the GS pay scale and I don't mean Goldmans. http://www.militaryfactory.com/military_pay_scale.asp
BTW the guy who I first heard suggest they all go 'GS pay scale' wasn't some angry 'leftist lib-uh-ral'... it was George Will. I heard him suggest it back when the first bailouts were being trial ballooned (2006?)... he referred to it as the 'Will Doctrine'... any firm taking direct gov't payment without rendering REAL compensating services or warrants must see to it that NO employee's compensation exceeds the GS pay scale.
That would include bailouts, no-bid contracts and subsidies... GS, Haliburton, Freddy & Fanny, ADM, Conagra... etc., would all roll over and die.
Parent Post
dryfly Sun Mar 22 10:39:56 2009 CDT #
Samdog says:
test
Samdog Sun Mar 22 10:52:32 2009 CDT #
Mike Dillon says:
Apologies if I'm retracing steps here...
Maybe it has something to do with the fact that by the time a property goes to auction, the note holder has already received the value of the note by making claims against the "note insurance" covering the tranche that the note securing the property was bundled into.... Yes, I ended that with a preposition....
Then again, note holders are sucking up any equity left in properties at auctions - the smaller, county or individual auctions as opposed to the big televised REDC clusters... My understanding was that note holders were supposed to do their best to get as close to FMV as possible on a foreclosed property and any overage after all amounts are paid is supposed to be returned to the FC'd borrower. Problem is that if no one bids at auction, the note holder purchases it for what they claim is the outstanding amount on the loan including fees, etc. If a property is worth FMV $200k, the note holder FCs for $100k and no one bids higher on the property the note holder purchases for $100k and $100k in equity immediately evaporates for the FC'd borrower and xfers to the note holder.
Take a look at the auction practices in Florida. I forget which county it is but at auction the note holder will signal either verbally or by a little hand held piece of paper, sign, etc. letting bidders know what the bank is willing to pay for the property. If no bidder is willing to pay more than that the bank purchases the property. Here's the kicker though - if no bid is recorded - and who would bother if they know the note holder will pay more than them - the note holder is allowed to purchase the property for $100.00 (one hundred dollars).
So the note holder gets the value of the note covered by "note insurance", they get to use the appraised value of the property on their books AND they get the physical property itself. Not a bad haul. This would be a prime example of why I tend to vomit every time I hear "No one makes any money on foreclosures. We lose money on foreclosures." :'(
Mike Dillon Sun Mar 22 11:04:30 2009 CDT #
Brent says:
My father used to work for a specialist department of a large New York bank. His department provided banking services and computer software to bankruptcy trustees, who control a lot of money on the bankruptcy courts' behalf but need it managed extremely conservatively to comply with federal regulations.
He always said that banks are great at banking but terrible at doing or managing anything else. His department was consistently more profitable than normal banking operations, but when orders came from on high to cut costs, that didn't matter; they had to find a way to reduce their budget even if it damaged their profitability more. Their software product was restricted by security rules that were out of date and inapplicable to their business, and the department that managed their interface to the bank's mainframe was consistently uncooperative, obstructionist, and behind schedule.
The department ultimately split from the bank and has been much more successful as an independent company, simply because the bank can no longer squander their productivity. The bank sold the division for a tiny fraction of what it was worth only a few years later.
So no, I'm not surprised that foreclosed houses sell for ridiculously low prices. Like my father said, banks are only good at banking.
Brent Sun Mar 22 12:04:19 2009 CDT #
Comrade Byzantine_Ruins says:
The problem being, they aren't the only players, but act as if they were.
Well I'm talking about the management of the dollar and they really are the only players in that game. GM, whatever, it's just another component of the backdrop of demand destruction as ponzimoneticapitalism collapses down to whatever real economy remains. Check back in September when the exciting truth is revealed.
Maybe I can sum it up, poorly, this way - under Hoover, the U.S. had much of what you described as a distinctly neutral group, and it failed.
I mean neutral policy in that it's a strong, naturally defensive policy that will tend to draw bureaucracies because it rests on the status quo. "Be the last guy left standing and win by default" is pretty much "what we were doing anyway" so it's very easy for passive policy groups to adopt. Don't be so tangled up in trying to attack some other thing -- Hoover's "neutral" state? Dunno about that. People say it was pretty activist. Not what I was talking about in any case.
Under Roosevelt, the U.S. had a national policy, and though it continuity with the past is beyond dispute, the rules changed.
No policy to all policy? I smell a facile assertion. I don't want to source the argument to death, so I'm just going to say, I bet Hoover was not just sitting there placidly puffing on his Samuel Gompers.
To put it differently - the rest of the world has yet to understand the brilliance of paying public bonuses for failure.
Yah, only in America.
And it is reasonable to assume that the world has the more reasonable perspective - at least, at a bare minimum, of not looting the treasury in full public view, defending your right to engage in such because the free market's invisible hand is better at sleight of hand than taxation.
Yeah that never happened anywhere else. Kleptocracy, remember? I sure didn't develop this sophisticated technical vocbulary out of the clear blue.
Also, nobody except the shills are really defending it on those grounds.
Sorry you're pissed off. Try not using our currency and not buying our debt if you want things to change, rather than talking about how you're going to take your bat and ball and go home, one of these days some time soon, just you wait. As someone being victimized by these policies, I wish you'd get off your ass and stop buying Treasuries already rather than enabling the problem and talking out the other side of your mouth about how you abhor it.
Comrade Byzantine_Ruins Sun Mar 22 12:05:16 2009 CDT #
dUCKdUCKgOOSE says:
Well, they gave the money away before...now they're losing it like they gave it away, and the taxpayer is picking up the bill. It's business as usual.
dUCKdUCKgOOSE Sun Mar 22 15:03:24 2009 CDT #
Cappy says:
this is why private investors will come in. there is a market price and there is money to be made. Even the non-recourse lender should get their principle and interest.
Cappy Sun Mar 22 20:42:58 2009 CDT #
Anonymous says:
I just bought a foreclosure at auction (citi owned in trust for wells fargo). The house was listed for 5 months at $349. I offered the listing broker $250 and they wouldn't communicate my offer to the bank. A month later I went to the auction and bought for $197.
Anonymous Sun Mar 22 21:16:32 2009 CDT #
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