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Billy Shears writes:
Right now they'll say their balance sheets are 'fine.' Six months from now these banks will say: "It happened so quick. No one could have seen this coming."
Billy Shears |
03.17.08 - 5:44 pm | #
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energyecon writes:
OK venting moment here, MSM drives me to distraction with this crap - oil prices 'plunged' to over $105/bbl - ok thanks for bearing with me...
Oil plummets on economy worries
By JOHN WILEN, AP Business Writer
1 hour, 25 minutes ago
NEW YORK - Oil prices plunged Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic trouble.
Crude's plunge came even as diesel prices rose to a new record above $4 a gallon, and gas prices remained high. Diesel, used to transport the vast majority of the nation's goods, rose 1.3 cents to a national average of $4.002 a gallon Monday, according to AAA and the Oil Price Information Service. The national average price of a gallon of gas, meanwhile, dipped slightly to $3.283 a gallon, but remains 73 cents higher than a year ago.
Oil's steep decline — falling $4.53 to settle at $105.68 a barrel on the New York Mercantile Exchange — came hours after futures reached a new trading high of $111.80 on the Federal Reserve's move Sunday to lower a key interest rate by a quarter point.
[snip]
energyecon |
03.17.08 - 5:55 pm | #
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CalculatedRisk writes:
energyecon, I saw that headline, and I was expecting oil below $100. Plunged? ROFLOL.
Billy Shears, I've seen prediction of 50 to 100 FDIC insured bank failures over the next couple of years (mostly small to mid-sized institutions). I don't know if that is correct, but I suspect it will be these banks with high CRE concentrations ... and all the analysts will say Whocoodanode!
Best to all.
CalculatedRisk |
Homepage |
03.17.08 - 5:58 pm | #
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CalculatedRisk writes:
All, see the Cramer video at the bottom of the posts (from last Tuesday) on Bear Stearns. A classic!
Best to all.
CalculatedRisk |
Homepage |
03.17.08 - 5:59 pm | #
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Marcus Aurelius writes:
Wouldn't any goddamned moron know these things? They have to remind bankers to mind their risks?
The FDIC concluded it's statement by reminding members and nonmembers to always buckle-up when driving, to look both ways before crossing the street, and to never, under any circumstances, piss into the wind.
Marcus Aurelius |
03.17.08 - 6:01 pm | #
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Marcus Aurelius writes:
Q: When is the price of oil falling NOT a good thing?
A: When the pull-back is because investors fear that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic trouble.
Marcus Aurelius |
03.17.08 - 6:03 pm | #
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Dickeylee writes:
What, America can't have anymore strip malls?!? Maybe we need the CofC to look into squashing the FDIC like they did the SEC.
Dickeylee |
03.17.08 - 6:03 pm | #
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Ministry of Truth writes:
I could see CRE taking out a lot of banks since CRE does not have the moral hazard or residential.
Ministry of Truth |
03.17.08 - 6:05 pm | #
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Dickeylee writes:
And oil did indeed plunge! It plunged so far that we need to double down on those tax credits for Exxon and BP.
Dickeylee |
03.17.08 - 6:05 pm | #
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Nemo writes:
Wait a minute, what "coming bank failures"?
Nemo |
Homepage |
03.17.08 - 6:07 pm | #
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Sebastian writes:
Marcus Aurelius said: "A: When the pull-back is because investors fear that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic trouble."
Right. When oil prices go up, that's bad because it's inflationary. When oil prices go down, that's bad because it means the economy is weak.
"Pick a side, this is war.":)
S.
Sebastian |
03.17.08 - 6:07 pm | #
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scotty_at_the_helm writes:
Speaking of the FDIC, I still do not see any news from FTC in regard to the deal with Bear, as FTC has to buy off on antitrust issues. Where is FTC, where is Warsh? Where is America going?
scotty_at_the_helm |
03.17.08 - 6:07 pm | #
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Marcus Aurelius writes:
Sebastian: A good reason for oil to come down would be due to more supply or less demand - not because investors need to cover their asses from other financial threats.
You know what side I'm on. Don't twist my words.
Marcus Aurelius |
03.17.08 - 6:09 pm | #
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Navspecwarcom writes:
The Cramer video is funny. I stopped listening/watching to him long time ago. It was amusing to watch however.
Navspecwarcom |
03.17.08 - 6:11 pm | #
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scotty_at_the_helm writes:
CR,
Very funny. Re, Cramer>>.... "don't be silly" classic! They need him at NAR! Housing prices are not going down..don't be silly! LOL!
scotty_at_the_helm |
03.17.08 - 6:11 pm | #
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Marcus Aurelius writes:
By the way, I never have commented on the price of oil/inflation. So, don't put words in my mouth, don't twist my words, and don't try to straw man me. Do this again, and it will get ugly.
Marcus Aurelius |
03.17.08 - 6:11 pm | #
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energyecon writes:
Bank-to-bank lending freezes; bankers ask "who's next?
By Mike Dolan and Kirsten Donovan
LONDON (Reuters) - Financial trading and interbank lending almost ground to a halt on Monday as banks grew fearful of dealing with each other following Friday's near collapse of U.S. investment firm Bear Stearns, prompting talk of another round of coordinated central bank aid.
As banking stock prices and the U.S. dollar plummeted, banks' access to unsecured borrowing from other banks fell to a relative trickle and dealers said the over-the-counter market had become highly discriminatory, depending on the bank name.
The seizure in money markets was reflected in a dramatic 80 basis point surge in overnight dollar London interbank offered rates, the biggest daily increase since the attacks of September 11, 2001.
"Banks and institutions are just scrambling for cash, any cash they can get their hands on," said a money market trader at a European bank.
"And it's seen as a U.S. market problem for the moment, or a dollar problem anyway," he said, noting the relatively modest increase in overnight euro and sterling Libor.
Published dealing rates were unreliable and analysts said any bank that had not already secured funding further than a week or so would struggle to raise cash at all.
"Bear's near-collapse and takeover accelerates the liquidity crunch and the money market crisis," Dresdner Kleinwort analyst Willem Sels told clients in a note.
"Banks' risk aversion and sensitivity to counterparty risk should rise even further, leading to more pressure on hedge funds. Money markets are having a brutal wake-up call."
[snip]
energyecon |
03.17.08 - 6:12 pm | #
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Barley writes:
CR - While not CRE here is a few news bites over the last few days...Toll has warned its difficulty if partners dont pony up..
Two massive housing developments in Las Vegas, involving several of the nation's largest home builders, have received default notices on about $765 million in debt, according to one of the partners in the projects.
John Ritter, chief executive of Las Vegas-based Focus Property Group, says that two joint ventures -- involving Focus as well as builders Toll Brothers Inc., KB Home and Lennar Corp. among others -- have each missed an interest payment in recent weeks and are in negotiations with lenders.
http://online.wsj.com/article/
SB...=googlenews_wsj
How 'bout this one?
A Scottsdale-based home builder is walking away from its investment in a south Chandler neighborhood, leaving unfinished houses and dozens of empty lots in foreclosure - and making residents who already bought homes concerned for the future of their property.
Randall Martin Homes is abandoning its property in four Valley developments, including Portello at Dobson Creek, a subdivision southwest of Queen Creek Road and Arizona Avenue.
The 162-lot Portello subdivision started selling in October 2005 while the Chandler housing market was booming. Now, in an obvious sign of the downturn in the industry, Randall Martin Homes has stopped selling new homes and has halted construction on unfinished houses
http://www.azcentral.com/
communi...randal0228.html
Maybe this is abetter example:
The majority owner of Treasure Coast builder Sunland Homes has filed for Chapter 11 protection from its creditors in the Southern District of Florida, leaving the future of its local developments in question
Sunland built the South Pointe development, consisting of 49 houses, in Martin County’s Port Salerno. The company also was building the massive Lexington Place subdivision in Indian River County, an 81.5-acre parcel slated for 256 homes east of 20th Avenue Southwest and north of Fifth Street Southwest. The gated community was put on the market for $13.5 million in March.
Additionally, Sunland purchased a 400-acre parcel for $8.67 million on Midway Road in Fort Pierce in 2005
Maybe this is better:
"I'm talking to people about liquidating like never before," said Bethesda lawyer James A. Vidmar Jr., who is representing a second-generation Montgomery County developer who filed for Chapter 11 bankruptcy after his builder bailed out of a 1,000-lot Delaware project. The developer had guaranteed a loan on that project with revenue from his Maryland development company, but fell behind on payments and filed for bankruptcy on both after his lender moved to foreclose
http://www.washingtonpost.com/wp...ml?
hpid=topnews
Barley |
03.17.08 - 6:13 pm | #
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Elvis writes:
CRE is going to crush what hasn't been crushed. It really isn't a bright future for the next few years. But, wait, I heard that the US will give everyone a share of Bear Stearns to stimulate the economy since they really own it now. That should help.
Elvis |
03.17.08 - 6:14 pm | #
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jg writes:
OT -- I'm trying to investigate the safety of Vanguard by looking at their SEC filings. There are approaching 100 Vanguard entities listed on EDGAR.
Anyone know which Vanguard entity is the parent corporation, so that I can take a peek and see if they make any loans (other than margin loans)?
Or, where else should I look for this information?
Thanks!
jg |
03.17.08 - 6:16 pm | #
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metacritic writes:
Since we're venting, I want to express my umbrage at Bush thanking Paulson for working the weekend. WTF? Does no one at the White House or Treasury work weekends? I put in seven-day work weeks more often than not, but apparently should run for President or seek appointment as Secretary of Treasury so that I can get a breather.
metacritic |
03.17.08 - 6:17 pm | #
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Detroit Dan writes:
Someone is going to have to start explaining all this government intervention. We need to know how much this will cost the taxpayers, and who is benefiting the most?
Detroit Dan |
03.17.08 - 6:17 pm | #
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Barley writes:
"banks and thrifts saw delinquency rates increase last year, growing to 0.8 percent from 0.56 percent in late 2006...the performance of commercial mortgage-backed securities could be harmed this year by a weakening economy and uneasy financial markets. Securities volume in 2008 could fall below $100 billion from the $230 billion recorded last year and tighter lending standards could cause commercial real estate prices to drop between 12 percent and 17 percent"
http://cbs4denver.com/businesswi...rcial-
Loans.xml
Barley |
03.17.08 - 6:19 pm | #
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Marcus Aurelius writes:
Detroit Dan | 03.17.08 - 6:17 pm
This is now a job for law enforcement - FBI/DOJ - backed by teams of CPAs. Too bad law enforcement is now discretionary.
Marcus Aurelius |
03.17.08 - 6:22 pm | #
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Dickeylee writes:
Why buy Bear Stearns, when you could buy the top 4 guys at Goldman Sachs?
http://blogs.wsj.com/deals/2008/...ives/trackback/
Dickeylee |
03.17.08 - 6:23 pm | #
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Tom Stone writes:
metacritic,George Bush has spent more time on vacation than any other president in history.I doubt he has ever worked a 40 hour week let alone a weekend.
Tom Stone |
03.17.08 - 6:23 pm | #
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Marcus Aurelius writes:
... but "hard work" is one of his catch phrases.
Marcus Aurelius |
03.17.08 - 6:25 pm | #
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scotty_at_the_helm writes:
jg,
http://www.sec.gov/cgi-bin/brows...nclude&
count=40
scotty_at_the_helm |
03.17.08 - 6:25 pm | #
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metacritic writes:
This is why I'm so irritated at the idea that these guys work hard. I suspect they all work pretty little - just enough to leave everything worse than the way they found it, and that applies to the CEOs who decided not to look at the risks of the practices taking form at their companies, the President, the Chair of the Fed, the Secretary of the Treasury, etc.
Unless there is reform at the level of executive pay there will be continued impetus to recreate these disasters all over again. Creative destruction indeed.
metacritic |
03.17.08 - 6:32 pm | #
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nades writes:
I know we stay a way from investing but if I wanted to find small publicly traded banks in the high growth areas (AZ, SoCal, Florida, etc) with lots and lots of CRE on their books how would I go about doing that that.
Does anyone know of any programs / websites that would allow me to select by these variables. I can find small banks but dont seem to be able to tell which have lots of CRE debt on their books....
TIA!
nades |
03.17.08 - 6:33 pm | #
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scotty_at_the_helm writes:
jg,
Yes,
They are not too helpful:
http://www.secinfo.com/dSeJx.tWe.htm
Vanguard Explorer Fund, et al. · 485BPOS · On 2/20/08
Filed On 2/20/08 2:10pm ET · SEC Files 2-27203, 811-01530 · Accession Number 932471-8-673
Individual investment professionals at Wellington Management manage multiple
accounts for multiple clients. These accounts may include mutual funds, separate
accounts (assets managed on behalf of institutions, such as pension funds,
insurance companies, foundations, or separately managed account programs
sponsored by financial intermediaries), bank common trust accounts, and hedge
funds.
scotty_at_the_helm |
03.17.08 - 6:33 pm | #
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Sebastian writes:
Marcus Aurelius said: "By the way, I never have commented on the price of oil/inflation. So, don't put words in my mouth, don't twist my words, and don't try to straw man me. Do this again, and it will get ugly."
I absolutely, wholeheartedly agree that such action would be extremely bad manners and, worse yet, counter-productive and a monumental waste of time.
It's just that you're lecturing to the only guy here who's consistently and persistently on the receiving end of such nonsense, virtually every single day, with only vanishingly-small support.
So your outrage over an isolated, rare event is...well, whatever.:)
Sebastian
Sebastian |
03.17.08 - 6:35 pm | #
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nades writes:
Seb said the markets would end up positive. The DOW did. Cheers!
nades |
03.17.08 - 6:37 pm | #
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Bob Dobbs writes:
Marcus Aurelius said:
"By the way, I never have commented on the price of oil/inflation. So, don't put words in my mouth, don't twist my words, and don't try to straw man me. Do this again, and it will get ugly."
That's what he lives for, apparently. I suggest that you not give him what he wants.
Bob Dobbs |
Homepage |
03.17.08 - 6:40 pm | #
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Sebastian writes:
nades said: "Seb said the markets would end up positive."
Not true. I can't take credit for either the forecast or what happened.
Frankly, I'm surprised there wasn't a major meltdown.
S.
Sebastian |
03.17.08 - 6:40 pm | #
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scotty_at_the_helm writes:
Marcus Aurelius,
I had an idea a while back, which is to offer free tuition to college students that are involved in CPA related accounting degrees. These kids come out and act as IRS, SEC, DOJ, FBI fraud squad, and we as taxpayers pay them as bounty hunters for forensic accounting, i.e, these kids go over all records and file red flag notices to a group of higher up laywers who look deeper. This army of newbies push out the old school by going over botched, manipulated, fraudulent records and then help bust anyone caught in the trap.....from The President down to the teachers back at school. Every kid has an opportunity to make a ton of dough by busting corrupt firms on wall street -- or elsewhere. What think? Regulation and enforcement on the cheap and very zealous!
scotty_at_the_helm |
03.17.08 - 6:40 pm | #
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jg writes:
Thanks for your help, scotty. I appreciate it.
'At the helm': sailor?
jg |
03.17.08 - 6:40 pm | #
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nades writes:
Sh*t. That was O-Joe... Just checked. My mistake...
nades |
03.17.08 - 6:41 pm | #
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ac writes:
Wait a minute, what "coming bank failures"?
Yeah, the Bear Stearns thing is basically a bankruptcy IMO.
They've blown up Enron style, just without stamp to make it official.
ac |
03.17.08 - 6:41 pm | #
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query_tool writes:
I had an idea a while back, which is to offer free tuition to college students that are involved in CPA related accounting degrees. These kids come out and act as IRS, SEC, DOJ, FBI fraud squad, and we as taxpayers pay them as bounty hunters for forensic accounting, i.e, these kids go over all records and file red flag notices to a group of higher up laywers who look deeper. This army of newbies push out the old school by going over botched, manipulated, fraudulent records and then help bust anyone caught in the trap.....from The President down to the teachers back at school. Every kid has an opportunity to make a ton of dough by busting corrupt firms on wall street -- or elsewhere. What think? Regulation and enforcement on the cheap and very zealous!
And at night, they play in a band together! And they have a lovable dog as a sidekick!
Jamie Dimon: "and I would have gotten away with it too, if it wasn't for you meddling kids!"
query_tool |
03.17.08 - 6:43 pm | #
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Rob McMillin writes:
Did anybody see this? I don't check the comments here very often (I stop by to read posts about 1-2 times a week, just about never the comments), but I found this in Salon and thought it was pretty funny:
http://twitter.com/benbernanke
"Ben Bernanke's" Twitter log. It's most likely on the order of the Fake Steve Jobs blog out there, but still amusing.
Rob McMillin |
03.17.08 - 6:44 pm | #
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Bartman writes:
query_tool:
Agree that is a good idea. Unfortunately it was last practiced by Client 9 as NYAG.
Bartman |
03.17.08 - 6:45 pm | #
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Nemo writes:
[OT] Abbey Joseph Cohen gets downgraded:
http://www.bloomberg.com/apps/
ne...id=att2KcDob7ek
Nemo |
Homepage |
03.17.08 - 6:46 pm | #
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scotty_at_the_helm writes:
Anyone from NAR on this one: The rate of growth for highly liquid funds which the St. Louis Fed calls MZM (money zero maturity), is even greater. It soared by an annual rate of 22.7% between December 24, 2007 and February 18 of this year.
scotty_at_the_helm |
03.17.08 - 6:49 pm | #
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Cal writes:
Someone on the broker boards said Wachovia dropped all stated income today, anyone hear anything about that? They were pretty big into Stated income. Not too many places left to lie about your income left.
Cal |
Homepage |
03.17.08 - 6:50 pm | #
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plschwartz writes:
AC
BSC was a "bank" but an investment firm type bank. Which is why Morgan had to front BSC for the Fed guarentee.
FDIC deals with real banks with cashiers windows, toasters etc. These were the ones talked of going under.
plschwartz |
03.17.08 - 6:50 pm | #
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Sebastian writes:
Marcus Aurelius said: "Do this again, and it will get ugly."
Sorry, one more thing. Considering some of the comments you've already made to me before, I shudder to think what you would consider to be "ugly.":)
Have a nice evening.:)
S.
Sebastian |
03.17.08 - 6:51 pm | #
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scotty_at_the_helm writes:
I just looked at Bears Model and it turns out that Bear was going to die anyway:
Burnout tuning allows the user to adjust the rate at which the model’s burnout occurs. There are two types of burnout tuning, “model” and “sensitivity.” Choosing “model” will change the historical burnout rate (if you are running an analysis where the loan/pool has already aged) from pool/loan origination, and going forward into forecast.
scotty_at_the_helm |
03.17.08 - 6:55 pm | #
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Max writes:
That Cramer video reminds me of another famous "NO!!":
Ted Stevens
Max |
Homepage |
03.17.08 - 6:56 pm | #
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ac writes:
AC
BSC was a "bank" but an investment firm type bank. Which is why Morgan had to front BSC for the Fed guarentee.
FDIC deals with real banks with cashiers windows, toasters etc. These were the ones talked of going under.
I have pretty low standards when it comes to what a bank is. The hedge funds today are very nearly banks IMO.
ac |
03.17.08 - 6:58 pm | #
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Marcus Aurelius writes:
It also helps that you don't elect/appoint foxes to manage the hen house.
Bush: Failed, yet somehow wealthy businessman with a legacy broken companies and broke investors.
Paulson: Who, as head of Goldman Sachs, presided over the creation and distribution of the investment "products" that are now poisoning global finance WHILE shorting those same securities.
Cheney: A "Career Public Servant" who somehow managed to retire wealthy AND get control of a company that would grow wealthy beyond measure during the war he orchestrated and foisted onto the American taxpayer. Trust me on this: Career government service, even as a Congressman, does not typically make you wealthy. Now he's sucking on the government teat. Oh - and there's the oil thing. Cheney meets with the oil barons, but refuses to disclose the issues discussed at the meeting. 7 years later, oil is through the roof. Must have been a very productive meeting.
No bid contracts became the norm. Cost overruns, overbilling, cost-plus contracts for the services of a very large mercenary force, massive deficit spending, and incompetence at every level are the hallmark of the MBA Presidency.
SCOTUS: recent ruling that shareholders had no recourse against corporation for losses due to fraud of a third party, even when the corporation knew of the fraud yet continued the financial relationship.
God help me, I could go on.
America held the door while these guys robbed us blind.
Marcus Aurelius |
03.17.08 - 7:07 pm | #
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Clyde writes:
Anybody got a handle on why NatCity was down 45% today? Disappointed that JPMorganChaseBear disappeared from the suitor list, certainly, but any confirmation of underlying causes of the drop?
Every one of my mutual funds was down today, many substantially. So the market has bad breadth.
Clyde |
03.17.08 - 7:11 pm | #
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barely writes:
"Seb said the markets would end up positive"
Wow! Trouble is, he ALWAYS suggests the market is going up. What I would like is some more "stock tips" from ole' Seb. I like those the best. The squirmy esoteric WrightB oblique references are nothing more than hot air. Given his timely NEW trade that he advertised gleefully, I've got to imagine he has been responsible for more wealth destruction than Chuck Prince.
barely |
03.17.08 - 7:14 pm | #
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scotty_at_the_helm writes:
I need to return to an old topic OT (of course):
Re, PCAOB: Why do we have a PCAOB, if they are going to be like FEMA and not regulate accounting firms?????? Why did Bear have the accounting they had and why is this like Enron, where no one has a clue about whats going on (do I need to scribble nude pictures here)???
But first:
The following is an excerpt from a 10-K SEC Filing, filed by BEAR STEARNS COMPANIES INC on 1/29/2008
http://sec.edgar-online.com/2008...7/
Section27.asp
Re: We have audited the consolidated financial statements of The Bear Stearns
Companies Inc. and subsidiaries (the "Company") as of November 30, 2007 and
2006, and for each of the three years in the period ended November 30, 2007,
/s/ Deloitte & Touche LLP
New York, New York
January 28, 2008
Hence,
We can look at accounting firms in general here:
http://www.pcaobus.org/Inspectio...orts/
index.aspx
Or, be specific and look at Deloitte here:
http://www.pcaobus.org/Inspectio...07/
Deloitte.pdf
Report on
2006 Inspection of Deloitte & Touche LLP
Issued by the
Public Company Accounting Oversight Board
June 14, 2007
PCAOB, bitches about stuff like: The Firm used negative confirmations to test the existence of accounts receivable even though the combined level of inherent and control risk was
not assessed as low.
There was no evidence in the audit documentation, and no persuasive other
evidence, that the Firm had tested any of the data or assumptions, including revenue
growth rates, attrition rates, and margins, that the issuer had provided to the specialist.
scotty_at_the_helm |
03.17.08 - 7:14 pm | #
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ac writes:
Bush: Failed, yet somehow wealthy businessman with a legacy broken companies and broke investors.
As I understand it Bush got bailed out whenever he got into trouble.
Alas, I don't know that the US has any rich daddy to turn to in a similar time of need.
ac |
03.17.08 - 7:17 pm | #
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Marcus Aurelius writes:
scotty_at_the_helm | 03.17.08 - 7:14 pm
Apparently, they audit by fiat.
Marcus Aurelius |
03.17.08 - 7:17 pm | #
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scotty_at_the_helm writes:
Re: America held the door while these guys robbed us blind.
Kinda, more like America held the door open with one hand waved the flag with the other and used a foot to keep the door open as these guys went back and forth looting and robbing us blind.
I agree and not trying to fight with you, I just see more Patriotism involved in this window of opportunity; great ploy!
scotty_at_the_helm |
03.17.08 - 7:19 pm | #
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Anonymous writes:
"Cal writes:
Someone on the broker boards said Wachovia dropped all stated income today, anyone hear anything about that? "
I understand they have pick your payment loans.
Tomorrow we'll find out what it means- pick either fully amortized, or more.
Anonymous |
03.17.08 - 7:23 pm | #
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Bob Dobbs writes:
OT, but excellent interview with Krugman over at Fortune, gives what he sees as the big picture: why he doesn't expect a Great Depression, how long he thinks the recession will last and why, how bad the financial crisis is or isn't, how Greenspan blew it, and whether this all will affect Main St. as well as Wall Street.
http://money.cnn.com/2008/03/14/
...sion=2008031705
Apologies if already linked, I can't keep up.
Bob Dobbs |
Homepage |
03.17.08 - 7:24 pm | #
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scotty_at_the_helm writes:
OT: This stuff kills me:
Deloitte & Touche LLP (“D&T”) is pleased to submit its response to the Public Company
Accounting Oversight Board’s (the “Board”) April 30, 2007 draft of its Report on 2006
Inspection of Deloitte & Touche LLP (the “Draft Report”). We are supportive of the inspection
process and believe the Board’s comments and observations enhance the ability to achieve
our shared objective of improving audit quality.
D&T is committed to the highest standards of audit quality. We continually monitor the
systems and processes for our audit practice, including quality control, and, among other
things, make changes to methodologies, policies, and procedures when we identify
improvements that could enhance audit quality. As we have done with respect to the Board’s
previous inspection reports, we will thoroughly consider the Board’s comments and concerns
addressed in the Draft Report, assess whether we have already initiated actions that address
those concerns, and consider whether additional actions are necessary.
http://www.pcaobus.org/Inspectio...07/
Deloitte.pdf
>>Heck of a job boys, keep up the great work and let us know if you need any money printed!
scotty_at_the_helm |
03.17.08 - 7:26 pm | #
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nades writes:
Apologies if already linked, I can't keep up.
No one can. I remember the old days of 50 visitors online. Its 171 now. Was 879 last night. I wonder if the fire marshal is ok with this occupancy.... :)
nades |
03.17.08 - 7:31 pm | #
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michi_doc writes:
OT:
Regards, walking away. There might be a greater national good in encouraging walking away. When borrowers are too far underwater their staying and repaying is going to be anti-consumptive. With 2/3rds of the economy consumer derived this may not be the most productive use of their efforts.
Rob Dawg | Homepage | 03.17.08 - 12:56 pm | #
Rob Dawg, if you're out there, this brilliant comment from a previous thread has intrigued me. It deserves amplification. Is this your own insight? Do you have any data on this?
michi_doc |
03.17.08 - 7:31 pm | #
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Anonymous writes:
I posted this a few threads ago, but perhaps it bears repeating:
Scotty,
Even if people agree with you, it gets extremely tiring watching someone pontificate.
If you want to share your impressions with a wider audience write an op-ed or start your own blog.
This is not the place for what you're trying to accomplish.
Anonymous |
03.17.08 - 7:34 pm | #
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12th Percentile writes:
"Frankly, I'm surprised there wasn't a major meltdown." Sebastian
Once again Sebastian and I were expecting different results. Some things are consistent. In a post around 10:00 AM i said i sold all my ultrashorts and expected the market up today and up again tomorrow. Big rate cuts tomorrow because the inflation numbers this month showed everything is under control (Pay no attention to those prices at your local exxon mobil, mine were at record highs today). I expect them to rig this thing until November.
12th Percentile |
03.17.08 - 7:36 pm | #
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Anonymous writes:
"I expect them to rig this thing until November."
It appears that way, but how do they do it? I can't even get six people over to my house for a dinner party on the same night.
It was kind of amazing watching the guy from CNBC on the nightly news. He framed this as a "people not paying their mortgages" problem and not as though there was a linear link between that and BSCs problems.
There was no explanation or mention of borrow short/lend long.
Anonymous |
03.17.08 - 7:44 pm | #
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michi_doc writes:
I am curious, and hope someone will respond to Rob Dawg's apparent implicit challenge:
Why do we want any public policy designed to keep people in their homes?
Why do we not want to encourage walking away so that these families have more free income to spend?
michi_doc |
03.17.08 - 7:46 pm | #
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Anonymous writes:
Whoops bad sentence structure. Meant to say
"as though there was a linear link, i.e., as though BSC was defaulting because J6P was defaulting."
Anonymous |
03.17.08 - 7:46 pm | #
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nades writes:
Why do we not want to encourage walking away so that these families have more free income to spend?
Because financial chaos would ensue and America would quickly disintegrate to a third world country...
I'm willing to wager that Rob was using hyperbole... He doesn't really believe that if this happened en mass this would be in anybodies best interest...
nades |
03.17.08 - 7:50 pm | #
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Anonymous writes:
Why do we want any public policy designed to keep people in their homes?
"Why do we not want to encourage walking away so that these families have more free income to spend?"
Because then the value of the home of the guy next to them falls, and he starts crying and bitching and moaning so he decides to do the same thing and then the crack addicts move in and start a meth lab and it just turns into one big mess kind of like right now.
Anonymous |
03.17.08 - 7:51 pm | #
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nades writes:
(Correct me if I'm wrong Rob)
nades |
03.17.08 - 7:51 pm | #
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michi_doc writes:
Since I'm near Detroit, I may not understand what "hyperbole" means. Actually, I live in a northern suberb. I don't have a crack house next to me, but I have autoworkers and schoolteachers who are upside down and hurting, and are not supporting the economy. They don't spend anything.
If they don't leave, and continue to lose their net-worth, am I better off than if they leave?
Who is my neighbor?
michi_doc |
03.17.08 - 7:58 pm | #
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rich writes:
>It's just that you're lecturing to the only guy here who's consistently and persistently on the receiving end of such nonsense, virtually every single day, with only vanishingly-small support.
Sebastian, you receive such nonsense because you are ludicrous. You watch Bear Stearns go down in flames overnight, but you keep preaching the same Kudlow creed. Like I said, I don't feel sorry for any money you lose, because your mind is so closed to all the solid ideas and information that's here.
I would like to say, there seem to be a lot of timid bears here lately. I was spinning around the news channels tonight and almost every one of them was talking about Bernanke, bailouts, Hoover, the depression, etc. I'm talking about channels that usually cover crime, news and even weather. It was everywhere.
People are starting to freak about what's going on, and stocks are still relatively high in the U.S., especially weaker, smaller domestic companies.
If you've been a bear awhile but you're not a bear now, you're a bear with no hair. Any day, this thing could blow. Maybe tomorrow.
Opportunities like this come along once in a lifetime for bears. Don't blow it.
rich |
03.17.08 - 7:59 pm | #
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Ralph Cramdown writes:
All y'all complaining that a $5 move in oil isn't a plunge: If you understood commodity traders' leverage and margin requirements, you wouldn't be. In terms of profit and loss for speculators, a $5 move today is just as big as it was when oil was $20/bbl.
Ralph Cramdown |
03.17.08 - 8:02 pm | #
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not a banker writes:
Clyde-
NCC announced last week they were looking for a buyer. Any premiums for a merger vanished w/ Bear. My guess is they got marked down to book today.
not a banker |
03.17.08 - 8:02 pm | #
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ac writes:
OT, but excellent interview with Krugman over at Fortune, gives what he sees as the big picture: why he doesn't expect a Great Depression, how long he thinks the recession will last and why, how bad the financial crisis is or isn't, how Greenspan blew it, and whether this all will affect Main St. as well as Wall Street.
Pretty shocking statement from Krugman don't you think:
If the recession started in January 2008, then that would mean July 2010 is the first month we have anything that feels like a recovery. But I wouldn't be surprised if it goes longer than that - maybe into 2011.
ac |
03.17.08 - 8:03 pm | #
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jg writes:
C'mon, ladies.
Bush made his money building the Texas Rangers baseball stadium. Sure, Dad's and Grandpa's name got him the job, but he pushed the thing through and made it happen. Development of stadiums is never easy; just ask the Chargers owners here in San Diego.
Cheney ran Halliburton, and made his money there. Rather an involved job.
Business failures prevent one from ascending to the Presidency? Tell that to Abe Lincoln and Harry Truman, both of whom had middling law and business careers, respectively.
After his Navy tour, JFK worked at what job before being seated in Congress and the Senate?
Do find some other line of attack. Like Bush not clamping down on spending and not securing the border, both of which many Dems and Republicans are unhappy about.
jg |
03.17.08 - 8:06 pm | #
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Paul writes:
Depression? Some are still wondering if there will be an actual recession. LA Times via CR:
http://www.latimes.com/business/
...0,2796078.story
Remember? This was only a few days ago. I want housing prices to drop so I can afford one some day. Sorry if y'all have to sell your plasma TVs to get out of it.
Paul |
03.17.08 - 8:07 pm | #
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scotty_at_the_helm writes:
Re: you're a bear with no hair
Now I know why I'm so cold, as I pontificate!
scotty_at_the_helm |
03.17.08 - 8:07 pm | #
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plschwartz writes:
Excuse me tanta But....
Between the sales-tax revenue, state tax exemptions and other financial incentives, Texas taxpayers handed the privately owned Rangers more than $200 million in public subsidies. Taxpayers didn’t get a return from the stadium’s surging new revenues, either. The profits went almost exclusively to the team’s already wealthy owners.
The stadium’s lease is a case in point. Unlike an apartment tenant, the rent that the team’s owners pay is applied toward purchasing the stadium. The maximum yearly rent and maintenence fees for the Rangers are $5 million; the total purchase price for the Ballpark at Arlington is $60 million. Thus, after 12 years the owners will have bought the stadium for less than half of what taxpayers spent on it.
But Bush and his partners weren’t satisfied lining their pockets with average Texans’ hard-earned cash. They wanted land around the stadium to further boost its value. To that end, they orchestrated a land grab that shortchanged local landowners by several million dollars.
As part of the deal, the city created a separate corporation, the Arlington Sports Facilities Development Authority, to manage construction. Using authority granted to it by the city, the ASFDA seized several tracts of land around the stadium site for parking and future development.
rest of the dirt at http://www.angelfire.com/ok5/pea.../bush-
sec5.html
plschwartz |
03.17.08 - 8:14 pm | #
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Anonymous writes:
Looking at the fake smile on W's face at the end of his TV spot w/ P this am was enough to indicate that there will be no limit to Fed action.
Anonymous |
03.17.08 - 8:18 pm | #
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Emma Anne writes:
jg writes:
C'mon, ladies.
I suppose that is supposed to be an insult . . .
Emma Anne |
03.17.08 - 8:22 pm | #
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Billy Shears writes:
And Cheney was hired as president of Halliburton because of his extensive knowledge of the oil business. Right. He was basically a lobbyist for the company, lobbying the government for contracts because of his contacts. He got the job for no other reason but claimed that 'government had nothing to do with his good fortune."
Billy Shears |
03.17.08 - 8:22 pm | #
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Anonymous writes:
michi_doc
The real reason other then falling home prices driving down property values and blight a lot of this is to help bailout the banks long enough so that they can pass these new loans off on Freddie or Fanny which in the end will end up being bailed out by the taxpayer as a lot of these folks will end up defaulting anyway maybe a few years latter. They simply paid to much for a home they really couldn't afford.
Anonymous |
03.17.08 - 8:22 pm | #
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Emma Anne writes:
nades writes:
I know we stay a way from investing but if I wanted to find small publicly traded banks in the high growth areas (AZ, SoCal, Florida, etc) with lots and lots of CRE on their books how would I go about doing that that.
You can short banks? Huh. The things I learn here.
Emma Anne |
03.17.08 - 8:23 pm | #
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rich writes:
>Someone on the broker boards said Wachovia dropped all stated income today, anyone hear anything about that? They were pretty big into Stated income. Not too many places left to lie about your income left.
Stated income isn't just for liars. As we've discussed here many times, it's also for the millions of Americans who are self-employed. Doctors, dentists, architects, lawyers, plumbers, etc.
rich |
03.17.08 - 8:27 pm | #
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Speed writes:
Another up day for the market. I don't know whether to laugh or puke. Maybe a little of both.
Speed |
03.17.08 - 8:36 pm | #
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plschwartz writes:
Rich I am confused.
Is it stated income if you can produce tax returns etc to verify income? I thought stated income was only on your word and not needing to be verified
plschwartz |
03.17.08 - 8:36 pm | #
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michi_doc writes:
Anomymous:
I have learned more in the last hour than I ever wanted to know.
My 180 home subdivision is armed to the teeth. We can stand 1/2 - 1/3 repo's without a problem. (Pacifists never - or don't want) to know.
Interesting what you learn when you ask. I assumed a sleepy suburb with many of the homes paid off.
Glad I read this blog, I never would have asked.
michi_doc |
03.17.08 - 8:36 pm | #
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doom writes:
Rich, re/ stated income.
My opinion on doctors, dentists, etc. who do file tax returns.
They like claiming all those deductions eat away at their disposible income.
Yet now they want to state their gross. Let them use the bottom line net # and add back on depreciation and depletion from their scedule C. That's the way it would be done with a 1099 person goes full doc.
Or better yet, have them give their tax returns and let the underwriters decide what they REALLY can afford.
I think we should end the stated's. Everybody files. Let's see if they can afford it or not. Perhaps they are cheating on their taxes and now can't qualify. Then that's the penalty for ripping of the government.
doom |
03.17.08 - 8:37 pm | #
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rich writes:
What exactly is CRE?
You have a lot of different RE entities about to blow up in a slow-motion chain, like a string of fire crackers going off.
You have large leveraged buyers of raw land.
Condo developers and contractors.
Homebuilders of all sizes.
Big retail and restaurant franchisees and small company-owned chains, who borrowed heavily to expand and now are sunk.
Small-time real estate speculators, like mini versions of Harry Maclowe.
Mini-warehouse owners. (Who needs mini-warehouses when you can buy a house for storage cheaper?)
Boat marina owners and golf course developers/owners. (Way too many of both for hard times.)
Senior living facilities and communities. (Ponzi schemes.)
All of these entities have one thing in common. They borrowed too much money from banks, and the collateral is worthless or falling in value.
There will be a lot of $100 million banks to go under this year. And there will be one or two failures of a billion or more. FDIC will be $10 billion poorer this time next year, and then the real fun begins.
rich |
03.17.08 - 8:41 pm | #
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doom writes:
Stated income, No ratio's, no docs, etc. We shouldn't outlaw them, but maybe we should prevent them from being sold in secondary markets.
If a lender wants to gamble, go for it. But they'll have to keep it on their books. No packaging.
The prospectus will make note of how many are on the books, and let the investors decide.
doom |
03.17.08 - 8:44 pm | #
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4822 writes:
"Senior living facilities and communities. (Ponzi schemes.)"
because seniors pay in for 20 years before moving in with a 50% chance of not surviving to move in? Consequently the units are oversubscribed?
4822 |
03.17.08 - 8:47 pm | #
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plschwartz writes:
Doom
You are denying a lot of people the right to get a mortgage. Those with non-traditional sources of income (dealing) and a ton of people who have large unreported cash incomes. Just to add blue collar to your list. In a vacation community I have a home, the work done for summer people is often reported but the locals work for each other all cash (I made friends in a local bar, so I get the 10% cash discount)
plschwartz |
03.17.08 - 8:49 pm | #
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Rob Dawg writes:
CR & Tanta,
Congratulations on going over 10 million visitors.
Rob Dawg |
Homepage |
03.17.08 - 8:52 pm | #
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Marcus Aurelius writes:
10,000,001st!
Marcus Aurelius |
03.17.08 - 8:53 pm | #
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Sam writes:
jg:
Bush made his money building the Texas Rangers baseball stadium.
Yah he expropiated land and money from taxpayers to do it. Fits the pattern doesn't it?
Sam |
03.17.08 - 8:58 pm | #
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dafydd writes:
I wonder how this chart from the St. Louis Fed factors into the posted statement: http://research.stlouisfed.org/f...series/
BOGNONBR
dafydd |
03.17.08 - 8:59 pm | #
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cd writes:
plscwhartz-
Doom is right. We dont need stated incomes in the US right now. Maybe when it's better regulated. We need to rein in the mustangs for a while.
Prove it or move on. They can rent!
It didn't work to well last time..
cd |
03.17.08 - 8:59 pm | #
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doom writes:
plscwhartz,
If they are making money and not reporting it, they should be. It's the law.
Maybe this is an incentive for them to comply.
I don't think the government should make those programs illegal, just not allow them for resale.
If you are comfortable enough to write the loan, keep it on your books.
doom |
03.17.08 - 9:05 pm | #
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Anonymous writes:
michi_doc
Lyle Gramley, a Fed governor from 1980 to 1985 and now a senior economic advisor for the Stanford Washington Research Group, said that such a failure would have far broader implications for the economy and the financial markets and the Fed has to do what it can to avoid that.
"If the Fed had sat aside and let Bear go down the tubes, the cascading effects would have been ghastly," he said.
Still, Gramley concedes the Fed has only a limited ability to deal with market fears. And he said that makes this economic crisis the most difficult challenge for the central bank since the Great Depression.
"In all past recessions, I was always quite sure that if the Fed stomped hard on the gas pedal, the economy would turn around and start to grow," he said. "But they've now stomped hard on the gas, and credit is not more available, it's less available."
Gramley and some other experts believe the solution to the current credit crisis will have to come from Congress, not the Fed, and that the federal government will have to take steps to bail out both Wall Street firms holding mortgage-backed securities as well as homeowners who have mortgages with balances greater than the value of their homes.
"I think the federal government is going to have to recognize taxpayer money will be involved and the sooner we get going on that, the better," Gramley said. "The longer it takes to do that, the more expensive the bailout will be."
http://money.cnn.com/2008/03/17/
...sion=2008031716
Bailing out homeowners sounds good in an election year but bailing out the banks with taxpayer dollars is the shell that has the pea under it.
Anonymous |
03.17.08 - 9:09 pm | #
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Anonymous writes:
I haven't read up this thread very far but this:
"You are denying a lot of people the right to get a mortgage. Those with non-traditional sources of income (dealing) and a ton of people who have large unreported cash incomes. "
Look, you either get to make tax free income or get a mortgage interest break, take your pick. (Only one is legal BTW.)
Anonymous |
03.17.08 - 9:09 pm | #
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ricobird writes:
Gee, lots of personal attacts lately. The economy must be getting to some of the posters.
ricobird |
03.17.08 - 9:10 pm | #
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ricobird writes:
Make that "attacks"
ricobird |
03.17.08 - 9:11 pm | #
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Ponzimonetizacorupticapitalsm writes:
A person familiar with the transaction told Reuters that roughly $1 billion of those costs would be earmarked for severance and retention
Protected..
consider that your money
Ponzimonetizacorupticapitalsm |
03.17.08 - 9:12 pm | #
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cd writes:
market play tomorrow at open..
Thornburg might make it!
http://www.247wallst.com/2008/03...burg-
mortg.html
cd |
03.17.08 - 9:13 pm | #
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Ponzimonetizacorupticapitalsm writes:
plscwhartz-
Doom is right. We dont need stated incomes in the US right now. Maybe when it's better regulated. We need to rein in the mustangs for a while.
I'm all for Stated Income...
I'll state Zero on my apr15th TP
Ponzimonetizacorupticapitalsm |
03.17.08 - 9:14 pm | #
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SurferDude writes:
just like the fdic, a day late and about to be $52 billion short. this guidance would have been meaningful if it would have been issued in 2003 before the exposures got put on the books. however, it probably would have been just as ineffective as the fdic has been performing drive-by exams with inexperienced examiners. within the halls of the fdic, there was alot of quoting of the infamous line by sergeant schultz -- "i see nothing, nothing." unfortunately, the executives that let this outsized exposure manifest are still on the job. when is bair ever going to wake up and reassign or fire the group that let this happen along with the bad morale.
SurferDude |
03.17.08 - 9:16 pm | #
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TradingStats writes:
Speed writes:
Another up day for the market. I don't know whether to laugh or puke. Maybe a little of both.
Speed
what fun would it be if we went from 14000 to 8000 in a week?
just think of all the jk's on cnbc to come.
TradingStats |
03.17.08 - 9:20 pm | #
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Anonymous writes:
Tonights Lipstick on a Pig: Stated Income Mortgages
The only reason people use stated income is because they have grossly undereported income on their tax returns.
One would think with all tax evasion you guys could fund a down payment that negates the need for a large mortgage.
Anonymous |
03.17.08 - 9:21 pm | #
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Sam writes:
New York Court of Appeals said Bear Stearns' insurers are not liable for $45 million worth of settlement costs the firm had sought to have covered. The settlement was reached with various regulators to end a probe into its stock research practices.
http://www.reuters.com/article/
n...ndChannel=10112
Sam |
03.17.08 - 9:24 pm | #
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plschwartz writes:
Guys:
I was tongue in cheek I thought mentioning dealers would be enough but maybe I needed to say drug dealers.
Actually I am with Tanta about getting back to solid application vetting.
And most important no more mortgages written without the originator having some skin in the deal.
Anyways I guess mortgage SIV will look a lot different from now on.
plschwartz |
03.17.08 - 9:28 pm | #
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rich writes:
Look, I'm not arguing here whether stated income should be available. I'm just pointing out that restrictions in stated income really squeeze the mortgage and home-buying market, because not all legitimate people work on a W-2.
A lot of successful contractors, for example, are self-employed. To the extent bloggers manage to make a living, they are self-employed. So, you're knocking upstanding people like CR and Tanta out of the market, right?
rich |
03.17.08 - 9:30 pm | #
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rich writes:
>market play tomorrow at open..
Thornburg might make it!
Why, because they could scrape together two nickels to hire an SEC attorney to fill out some papers and a PR person to put out a press release?
rich |
03.17.08 - 9:31 pm | #
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FFDIC writes:
The main reason FDIC sends out these sorts of warnings to banks and their board of directors: In the event of bank failure which is becoming more likely the FDIC is in a better position legally to sue the directors for negligence, breach of fiduciary duty, stupidity, higher duty of care, royal fuckups and a host of other reasons. The bank directors defense yells the economy went to hell and nobody could have seen it coming bla, bla, bla. Of course FDIC will not sue any of these directors if there are no deep director pockets with substantial net worth or D&O insurance because it is not cost effective regardless of how slimy the bank operated. Been there, done that, got the t-shirt.
FFDIC |
03.17.08 - 9:37 pm | #
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JJL writes:
I hate to use biology type analogies, but I think that two fit;
1.) the FED's efforts to provide "liquidity"- the FED is trying to treat a SYMPTOM, not a cause by giving out cash. The cause is insolvency, the symptom is lack of fluid cash due to declining asset values. As an analogy, if someone presents with chronic bad high blood pressure, say 150/110 constant they need treatment. I can find the CAUSE (renal failure, diabetes, vascular disease) which may or may not be treatable, or I can just treat the symptom. One treatment is puncturing the vena cava artery, which will drop blood pressure in short order, but the patient will die. See what I am saying.
2.) As far as things seeming to be fine on main street, realize that the usual 1st sign of a coronary blockage (ie heartattack) is sudden death or major cardiac event. No pain, no other symptoms exist prior. Things can be great until they are not and it can be very sudden.
Sorry for the biological analogies, but I felt they fit.
JJL |
Homepage |
03.17.08 - 9:43 pm | #
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doom writes:
Dr. JJL,
How long do we have?
:-)
doom |
03.17.08 - 9:46 pm | #
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JJL writes:
Doom,
Prognosis at this time is complicated by the morphine supplied by the FED. Eventually the pain receptors will amplify and overwhelm the morphine, at which point only a lethal dose will have any effect. I would say 4-6 months probable, with long term prospects "poor".
JJL |
Homepage |
03.17.08 - 9:50 pm | #
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FFDIC writes:
surferdude, good rant, however it really isn't Chair Care Bair's fault. The fault is with former Chair Donald Powell also appointed by Bush. Powell directed the drive-by bank examinations and put examiners on an impossible tight schedule to complete these cursory reviews. As soon as Powell came in things changed within FDIC - and not for the better. There was an almost immediate relaxation of the rules and regs. Examiners knew not to push and began looking the other way. Bair now has to clean up the mess and yes, watch the $51 billion go to zero which is no doubt will. I am certain all the insurance funds will be used and Congress will have to fund FDIC from taxpayer money.
FFDIC |
03.17.08 - 9:50 pm | #
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plschwartz writes:
This from a wsj article on the size of the cut tomorrow:
Larry Meyer,.. a former Fed governor. “Now the task is to ease enough to reinforce the liquidity steps taken last week and yesterday, which requires not disappointing the market’s expectations.”
The Fed is run I suppose to meet market expectations
plschwartz |
03.17.08 - 9:55 pm | #
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energyecon writes:
Way too much bleating about the market going up - the internals were a horrorshow - decliners led advancers 5 to 1 and 20% of the issues hit 52 week lows (NYSE statistics on Yahoo)...the Dow is just 30 stocks, get over it!
I don't think we have only hairless bears, though I do think there are with some fur scorched off from the hijinks to date... ;-)
energyecon |
Homepage |
03.17.08 - 9:58 pm | #
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mock turtle writes:
Speed wrote:
"Another up day for the market. I don't know whether to laugh or puke. Maybe a little of both.
Speed | 03.17.08 - 8:36 pm | #
mock turtle says:
the fed move to open the lending window directly to primary dealers was all about supporting the averages, (dow etc)
is there anybody out there that seriously doubts the existence of the plunge protection team???
the broker dealers can manipulate the market if they have access to cash... they do it and they've done it before
http://www.time.com/time/ magazin...promoid=googlep
mock turtle |
03.17.08 - 9:59 pm | #
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doom writes:
Any bets on tomorrow?
3/4 pts, 1 pt, or more.
A lot of ammo could be wasted. And this war is just beginning.
I personally think 1 full point. It seems to be priced in. Any more will scare the market, any less will disappoint.
Not really going out on a limb here.
I'm just trying to increase the volume of dialog. Hard to match yesterday night.
doom |
03.17.08 - 9:59 pm | #
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Rob Dawg writes:
michi_doc, et al,
The comment is mine and appears worth its' own thread on my blog. Click homepage directly below.
Rob Dawg |
Homepage |
03.17.08 - 10:01 pm | #
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plschwartz writes:
Bush found a sure way around regulations . Put an incompetent ideologue at the top.
She : Don't touch me or I'll call the Sheriff
He: I AM the Sheriff
plschwartz |
03.17.08 - 10:01 pm | #
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anonymous writes:
Oh, mock turtle, don't get them started on PPT. In spite of today's "behaved" market (it did what it was paid by the Fed to do, restore calm), they just won't believe it.
Guess they've never been to lunch at the Four Seasons.
anonymous |
03.17.08 - 10:01 pm | #
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JJL writes:
Doom,
I agree with the 100bps cut, anything less might cause a fit by the markets.
Why not pull a Larry Kudlow and go with the entire 300bps and really rock and roll!
JJL |
Homepage |
03.17.08 - 10:01 pm | #
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ac writes:
what fun would it be if we went from 14000 to 8000 in a week?
That's the ticket. This week we end at 14000. Next week 8000.
ac |
03.17.08 - 10:05 pm | #
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JJL writes:
Chancellor Palpatine: Master Windu you are here much earlier than expected.
Mace Windu: In the name of the Galactic Senate of the Republic, you are under arrest, Chancellor.
Chancellor Palpatine: Are you threatening me, Master Jedi?
Mace Windu: The Senate will decide your fate.
Chancellor Palpatine: I AM THE SENATE.
Mace Windu: Not yet.
Chancellor Palpatine: It's treason, then.
The Darkside bekons!
JJL |
Homepage |
03.17.08 - 10:06 pm | #
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doom writes:
JJL,
For what they are trying to do, may as well go for the whole 300bps. It may eventually get there anyway.
We already know how successful that can be. Just look at Japan.
doom |
03.17.08 - 10:06 pm | #
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piter writes:
150bps.
I can't wait to see the Dollar/Yen at 85.
piter |
03.17.08 - 10:08 pm | #
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M-F writes:
I am gonna say 75 bps, I think they should do less, there is no need for even 75 bps at this point, but as has been said above, they want to protect the market. They cut the discount rate 25 bps already didn't they? So another 75 is still 100 bps on the discount rate this week.
M-F |
Homepage |
03.17.08 - 10:08 pm | #
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david_in_ct writes:
Due to the enormous spec position in the crude oil market the crack spreads have collapsed. A week or so ago I noted the extreme divergence between oil stock performance and crude. Historically this has implied a decline in crude. Right on schedule the day after options expiry the new happy holders of short crude positions were punished. Given what is happening in the physical market this could be the beginning of a very sharp fall in oil. I would not be surprised to see 20 dollars come off really fast. With crack spreads collapsing refinery runs are going to grind to a halt, piling up crude in storage.
Among all the other bearish sentiment extremes it was nice to see Goldman pull the plug on Abbey J Cohen today and replace her with someone that thinks the s&p is heading for 1160 short term.
david_in_ct |
03.17.08 - 10:09 pm | #
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12th Percentile writes:
give 'em the full one percent. It is the prudent thing to do.
This bear is not hairless, just hibernating a bit. Waiting for some low hanging fruit to put on a little more fat before embarking on a long season of killing and thinning out the herd.
12th Percentile |
03.17.08 - 10:11 pm | #
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tj & the bear writes:
FTR, Kudlow called for the Fed to NOT cut rates tomorrow.
Personally, I wish they'd just go straight to 1% and get that over with -- we all know it's going to happen anyway.
p.s.: IMHO we'll see ZIRP in 2009.
tj & the bear |
03.17.08 - 10:14 pm | #
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doom writes:
M-F, I agree with you. 75 bps is still too much. They're nuts! But remember when they were expected to cut 75bps and they cut 50 bps emergency the week before. They just went on with the 75bps anyway.
I think these 25 bps to the window was just gravy. It's a freebie.
doom |
03.17.08 - 10:15 pm | #
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cd writes:
Rich,
no position in tma-just thought it was very interesting how lenders are backing off margin calls and this sec info. Thats it, no pumping..Easy
I've been wrong before..I'll let you know tomm how it turns out..
cd |
03.17.08 - 10:19 pm | #
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just some dumb guy writes:
CR,
Yesterday i emailed ya about my concern that the fed was low on assets.... you were correct about the 700 BB but i was somewhat correct re commitments of that...leaving a little of over 200BB not much left for bail outs and considering they are giving to primary dealers that they cant and dont regulate I am really concerned that the assets are now not there to cover us/US especially now that its no longere overnight or even 28 days...now up to 90 days?
March 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke may be running out of room to pump money into the financial markets and cut interest rates to rescue the economy.
The Fed has committed as much as 60 percent of the $709 billion in Treasury securities on its balance sheet to providing liquidity and opened the door to more with yesterday's decision to become a lender of last resort for the biggest Wall Street dealers. The central bank has cut short-term rates by 2.25 percentage points since September and will probably reduce them again tomorrow.
just some dumb guy |
03.17.08 - 10:22 pm | #
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Outsider writes:
I would not be surprised to see 20 dollars come off really fast.
Well, that's good news! Lower oil prices can only help right now.
Outsider |
03.17.08 - 10:27 pm | #
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In the trenches writes:
50bps with another 50bps to the discount window
Fed seems to now get that liquidity is more important than rates.
They also need to save their pellets for the next shock. If they go too hard they wont be able to drop 100bps or so when the next guy implodes.
There has been a lot of strong dollar talk this week amd I think that sentiment is taking over.
Who knows though.....
In the trenches |
03.17.08 - 10:28 pm | #
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just some dumb guy writes:
25 bps in discount, 100bps
just some dumb guy |
03.17.08 - 10:30 pm | #
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Marcus Aurelius writes:
Just caught a call-in program on my way back from picking up friends at the airport.
One caller, in particular made an interesting, and to my knowledge, original, conmment
Without going into the details, heres his comment:
The Fed has acted to save Wall Street and the financial system by injecting liquidity into system first, and then by orchestrating the "sale" of BSC to JPM.
In this this effort to right the ship, there has been no effort to increase the oversight, regulations, practices in and by the industry.
In effect, what the Fed is doing is hoping that they can weather the storm and get back to Business as Usual - with all of it's fraud, abuse, and criminality intact.
The Fed has acted to the benefit and enable one side of the equation, and we will all pay for the resulting imbalance.
The crisis is being baked into the system.
Marcus Aurelius |
03.17.08 - 10:31 pm | #
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bobn writes:
but bailing out the banks with taxpayer dollars is the shell that has the pea under it.
Nationalize them. Shareholders lose. Fire all current managment (preferably with a .45 caliber severance package). Repair the bank. Sell it back to private industry.
No bailouts - fsck that sh!t.
bobn |
03.17.08 - 10:33 pm | #
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just some dumb guy writes:
As discussed months ago in this column non-banks institutions don't have access - based on the Federal Reserve Act - to the lender of last resort support of the Fed unless a very special and unusual procedure and vote is taken. So for the first time in decades - possibly since the Great Depression - the Fed had to rely on this exceptional rule to bail out a non-bank financial institution. So what is next? Bailing out hedge funds, bailing out money market funds, bailing out SIVs? When is enough enough? This when the Fed has already committed this week to swap 60% ($ 400 bn) of its balance sheet of Treasuries for mortgage backed securities of dubious quality and value.
RGE.... step 9
just some dumb guy |
03.17.08 - 10:35 pm | #
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tj & the bear writes:
Marcus,
In a similar vein, CNBC & Fox both had politicians on that expressed righteous indignation at the IBs but (of course) failed to note their own complicity in adbicating all oversight of Wall Street.
Everyone's talking about how the Fed is trying to avert potential systemic risk without acknowledging that they fostered that very risk themselves.
tj & the bear |
03.17.08 - 10:37 pm | #
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just some dumb guy writes:
marcus:
More from NR:
Unless public money is used on a very temporary basis to achieve an orderly wind-down or merger of Bear Stearns this is another case where profits are privatized and losses are socialized. By having thrown down the drain the decades old doctrine and rule that the Fed should not lend or bail out non-bank financial institutions the Fed has created an extremely dangerous precedent that seriously aggravates the moral hazard of its lender of last resort support role. If the Fed starts on the slippery slope of providing massive liquidity support to non-bank financial institutions that have recklessly managed their risks it enters into uncharted territory that radically changes its mandate and formal role. Breaking decades-old rules and practices is a radical action that seriously requires a clear public explanation and justification.
just some dumb guy |
03.17.08 - 10:39 pm | #
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Marcus Aurelius writes:
tj & the bear and just some dumb guy:
It's a shame that more people will only see this for what it is when it's too late. Access to information cannot overcome willful ignorance.
Marcus Aurelius |
03.17.08 - 10:49 pm | #
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tj & the bear writes:
Marcus,
Did you see those employee shareholder figures for BSC? They must've had Koolaid next to every coffee machine.
tj & the bear |
03.17.08 - 10:52 pm | #
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Marcus Aurelius writes:
No. Link or cut and paste?
Marcus Aurelius |
03.17.08 - 10:54 pm | #
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tj & the bear writes:
Marcus,
Something I saw on the TV... BSC's 14K employees held 30% of the shares. Lots of newly minted "dollar menunaires".
tj & the bear |
03.17.08 - 10:57 pm | #
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energyecon writes:
Ouch - those voting shares? This deal may still not get done - what do the employees and Joe Lewis have between them?
energyecon |
Homepage |
03.17.08 - 11:00 pm | #
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Marcus Aurelius writes:
I hope they act on their own best interests - no matter what the result to the bullshit deal done by BSC/Fed/JPM.
Marcus Aurelius |
03.17.08 - 11:04 pm | #
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RE writes:
Given what is happening in the physical market this could be the beginning of a very sharp fall in oil. I would not be surprised to see 20 dollars come off really fast. With crack spreads collapsing refinery runs are going to grind to a halt, piling up crude in storage.
You might want to look a little closer outside U.S. borders. CL is as universal as any commodity and we are still at low average inventories NOT high ones. That said the NYMEX does still have the biggest influence on short term movements and we may therefore see short term price weakness.
EIA
"... Tight fundamentals, evidenced by low available surplus capacity and Organization for Economic Cooperation and Development (OECD) inventories that are below 5-year average levels, continue to put upward pressure on oil prices. ..."
RE |
03.17.08 - 11:05 pm | #
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Dr. Wu writes:
Nationalize them. Shareholders lose. Fire all current managment (preferably with a .45 caliber severance package). Repair the bank. Sell it back to private industry.
Privatize profits, socialize risk. It's the Republican manifesto. Current management get huge golden parachutes to avoid sudden unemployment in the yacht accessories industry, and every American taxpayer gets to chip half of their $600 "stimulus package" in to Chase to help them "buy" Bear Stearns.
Dr. Wu |
03.17.08 - 11:18 pm | #
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RE writes:
I also should mention that we are now in the shoulder season which is the low demand time for crude generally resulting in lower prices at this time of year. The seasonality chart in this link illustrates this nicely. However, as you can see, starting in April the situation changes and despite a slower economy pricing pressure will increase.
RE |
03.17.08 - 11:24 pm | #
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YLSP writes:
The way I understand it, the Fed has been killing our dollars. Isn't there some way to adjust the stock market to something like "y-year" dollars? For instance, last summer the DOW was at 14k, but that's not the same 13k as it would be now due to the dollar devaluation (right?).
Anyway, I'm pretty sure I sold high on the mutual funds I unloaded even though the dow was above 13k then, and I also sold some more the as soon as calendar flipped. The way the dollar has devalued it seems like last summers 13k is something like 16k in today's American dollar.
I don't know if thats the right way to look at things... I'm just glad I'm young enough to learn from this cycle so in 20 years (if there is another 20 years) and the same thing happens again I can make a killing, and do the same in 40 and 60 years as well...
YLSP |
03.17.08 - 11:26 pm | #
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Anonymous writes:
You know what, I've seen my share of retarded explanations for the housing bubble, but this takes the cake (from Bloomberg):
"Regulation the Culprit
Yet a recent study by Cato Institute scholar Randal O'Toole that draws on broad economic literature documents that the price swings are, in fact, not so difficult to understand. Out-of- control government regulation started the mess.
For most of U.S. history, real estate prices have tended to rise with inflation. In periods when they increase faster than that, home building activity rises, driving prices back down.
If builders can put up new houses, then one should expect the price of a home to be constrained, not to be higher than whatever it might cost to replace it. Since the U.S. is flush with land, it has generally been easy for supply to respond to higher prices, and push them back down.
But in the 1960s and 1970s, California and Hawaii began a movement that sought to limit this normal supply response with ``Growth Management Planning.'' These states effectively drew a line around a city, and allowed building inside the line, but not outside. Over time, such regulation has spread dramatically.
I thought it was bad enough when they were blaming affordable housing legistlation for getting people into $750,000 mortgages.
Now I see it was urban planning.
Anonymous |
03.17.08 - 11:30 pm | #
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YLSP writes:
I saw some economist on Lou Dobbs tonight talking about "lets rescind the stimlulus package and use it to target homeowners". Excuse me buddy, but that's all of our money, and if you're going to give away my tax money than please at least give me some of it too instead of giving it away to benefit lenders and people who got themselves into trouble.
YLSP |
03.17.08 - 11:30 pm | #
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rich writes:
I greatly value the knowledge of everyone here, especially about real estate. I am studying a real estate puzzle that doesn't seem to make sense. I would like to share it with you, and see if you can help me put it together so that it makes sense.
Last week, Barack Obama gave detailed interviews about his home transaction to the Chicago Tribute and Sun Times. Full transcripts are here:
http://www.chicagotribune.com/
ne...1,6766557.story
http://www.suntimes.com/news/
pol...ript031508.stng
The puzzle that does not make sense involves: 1) a simultaneous same-day sale of a home bought by Obama and a vacant lot next door bought by Tony Rezco, now on trial for influence-peddling; 2) an option on the vacant lot that Obama says had been acquired (previous to Obama or Rezco's participation in the transaction) by an unnamed home renovator (possibly John Ketch), who happened to be an acquaintance of Rezco.
The Sun-Times pressed Obama on the details of the option but he was vague:
Obama: . . . The house purchase was negotiated between ourselves and the seller. It was not contingent on the lot. The lot had nothing to do with the sale of the house, and the sellers confirm it. . . .
Q: How did Rezko then jump ahead of the guy with the option.
A: That I don't know. . . .
Q: And you had never relayed to the seller that you would have preferred that lot be sold to Tony Rezko.
A: Never had that conversation. . . .
The NY Times has reported that the sellers required a same-day closing of both Obama's home and Rezco's lot. This makes sense, if the seller believed they would have greater value sold together than separately.
But...that being the case, would it then make sense to give somebody an option on the lot? What kind of option would it be? Would it be recorded as public record?
If it were a one-way option for the buyer, wouldn't it give the lot buyer great influence over the home sale (assuming the requirement of simultaneous closing)? Why would that be in the seller's interest?
Also, Obama claims that he and Rezco never coordinated on arranging the same-day closing. But wouldn't it be common for any two buyers (in similar situation) to coordinate title search, survey, financings etc. to assure a same-day closing?
Are same-day closings and options of this type common?
Is this whole story a little far-fetched to be believable?
Thanks.
rich |
03.17.08 - 11:33 pm | #
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Anonymous writes:
The urban planning myth guy is:
"Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He is an adviser to Republican Senator John McCain of Arizona in his bid for the 2008 presidential nomination."
Anonymous |
03.17.08 - 11:34 pm | #
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Anonymous writes:
I give up. Seriously. This is who is advising him?
Anonymous |
03.17.08 - 11:38 pm | #
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YLSP writes:
... and there are plenty not even getting a rebate. Everyone talks about the poor revolting... but I'd think the rich would be front and center leading whatever uprising comes out of this mess of a financial policy (over the past what, 20 years?). "I pad a 40% tax rate and all I got was this private jet... can you help me afford the gas?" At least with richness there's supposedly less worries...
YLSP |
03.17.08 - 11:42 pm | #
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YLSP writes:
"Richness"... sorry that should be "wealth"... I swear I didn't graduate from California schools!
YLSP |
03.17.08 - 11:42 pm | #
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Optimistic Joe writes:
Last night there was this apocalyptic sect of ~600 viewers on the CR blog watching for the end of the financial world. Today, there's only the usual 70 visitors. What a difference a day makes.
O-Joe
Optimistic Joe |
03.17.08 - 11:43 pm | #
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tj & the bear writes:
What's the saying -- "a watched pot never boils"? ;-)
tj & the bear |
03.17.08 - 11:44 pm | #
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hero writes:
As I said yesterday, oil goes down when the economy slows.
Right now, it's too early to say whether it's a trend or a small correction. But, oil prices are disconnected from fundamentals like Google of last year.
hero
hero |
03.17.08 - 11:45 pm | #
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YLSP writes:
tj&bear,
Are you sure we're not the frogs left in the slowly warming pot?
YLSP |
03.17.08 - 11:46 pm | #
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ac writes:
I agree with the 100bps cut, anything less might cause a fit by the markets.
At the same time, the Fed now risks creating a run on the dollar, which could be self-reinforcing disaster that's hard to reverse.
Didn't Krugman recently say the Fed was forced to raise rates during the Depression due to a run on the dollar?
Never mind what that might do to oil prices.
"I can haz emergency $25 oil price hike?"
ac |
03.17.08 - 11:47 pm | #
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tj & the bear writes:
hero,
Have you charted oil prices vs. the dollar? Almost mirror images.
tj & the bear |
03.17.08 - 11:48 pm | #
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tj & the bear writes:
YLSP,
I think that's a good characterization if the "we" is J6P.
tj & the bear |
03.17.08 - 11:49 pm | #
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MFtom writes:
scotty_at_the_helm writes:
Marcus Aurelius,
I had an idea a while back, which is to offer free tuition to college students that are involved in CPA related accounting degrees. These kids come out and act as IRS, SEC, DOJ, FBI fraud squad, and we as taxpayers pay them as bounty hunters for forensic accounting, i.e, these kids go over all records and file red flag notices to a group of higher up laywers who look deeper. This army of newbies push out the old school by going over botched, manipulated, fraudulent records and then help bust anyone caught in the trap.....from The President down to the teachers back at school. Every kid has an opportunity to make a ton of dough by busting corrupt firms on wall street -- or elsewhere. What think? Regulation and enforcement on the cheap and very zealous!
scotty_at_the_helm | 03.17.08 - 6:40 pm | #
I graduated with an accounting degree in Dec 2004. I currently work for a forensic practice in Miami. Myself and a couple of associates built a database of real estate transactions in some of the fishier condo buildings in Brickell [look it up, it is jokingly referred to as the foreclosure district]. Querying that databse to find patterns is like shooting fish in a barrel.
One of the many groups we spotted flipped over 60 units with loans in excess of $50MM (obvious things-- buy one day for 400k sell the next day for 670K, some flipped yet another time at $800k, all 100% financing, all the same title company, and all either foreclosed or have a lis pendens filed). That is one example. There are several gangs of fraudsters that worked this area. There crimes are not difficult to trace--the phony transactions and the "loans" have to be recorded. Gave this data to FBI and Miami Dade police in October 2007. Response from Miami-Dade: "Wow, how did you do this? We'll get back with you." Response from FBI-zilch. Number of arrests...you guesses it.
Discouraging, to say the least.
MFtom |
03.17.08 - 11:52 pm | #
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Douglas Watts writes:
O-Joe
Optimistic Joe | 03.17.08 - 11:43 pm | #
--
No. There were 600 rubber neckers watching tens of billions of dollars melting into a puddle of brown, useless plastic before the worlds' eyes.
Douglas Watts |
Homepage |
03.17.08 - 11:52 pm | #
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lawn grass writes:
I have no thoughts at this point. There is no recourse. Free money for everyone. Make everyone solvent. Make Everyone liquid. Party on.
Went out Friday night and also Saturday for lunch. It does not appear that there is an economic slowdown at this time.
I think few believe there are any ticking time bombs in the economy.
When gas is high, many just blame the oil company conspiracy cabal. That way there is no reason to behave fiscally responsible. It is someone else's fault. Party on.
Can't get a mortgage. Well blame the mortgage company for not giving me the loan I want.
Can't pay a mortgage. Well blame the mortgage lender for providing me the loan without doing anything to see if I could pay off the loan.
Can't pay off the credit card. Well blame the credit card company for sending me all those offers in the mail.
Can't continue to operate my very large financial institution because no one trusts me. Get the backing of the people's money and bank to instill confidence.
lawn grass |
03.18.08 - 12:10 am | #
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dryfly writes:
Business failures prevent one from ascending to the Presidency? Tell that to Abe Lincoln and Harry Truman, both of whom had middling law and business careers, respectively. - jg
Yup those are the Presidents I think of first when I try to compare the leadership of GWB with other presidents - Lincoln & Truman.
dryfly |
03.18.08 - 12:10 am | #
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RE writes:
As I said yesterday, oil goes down when the economy slows. ... Right now, it's too early to say whether it's a trend or a small correction. But, oil prices are disconnected from fundamentals like Google of last year.
Unless we enter a severe recession, it is highly unlikely that global oil consumption will fall. The biggest drops in consumption in prior recessions were due to the fact that residuals could be cut quite dramatically. Today, the primary influencer of oil consumption is transportation which is very inelastic.
Here is an article discussing this exact issue:
Recessions and Global Oil Demand
RE |
03.18.08 - 12:11 am | #
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dryfly writes:
Something I saw on the TV... BSC's 14K employees held 30% of the shares. Lots of newly minted "dollar menunaires".
LOL. That's not nice, I shouldn't be laughing. But I am.
dryfly |
03.18.08 - 12:16 am | #
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YLSP writes:
Do NFL stadiums count as CRE? I don't know how many peoples interest cross with NFL (as a sportsfan we're led to believe th |