Red Pill writes:
Ppffffffttt! Like she has ever predicted anything successfully in the past!

Oh, wait. . .
Red Pill | 03.26.08 - 11:37 am | #

hc writes:
She's wrong! Citi can sell all these to the Fed at "Mark to Fantasy" prices! They will make the original earnings estimate and then some! They'll even be able to raise their estimates 500%, like BSC's bid from $2 to $10!
hc | Homepage | 03.26.08 - 11:38 am | #

Anonymous writes:
Yeah, but Dick Bove called Citi the deal of the century and he's a genius. Just ask him....
Anonymous | 03.26.08 - 11:38 am | #

scotty in the blue room writes:
Good little add-on story here:

Fair-value rules get more blame for crunch
Banks and insurers stung by mortgage mess want regulatory relief, say marking assets to market exaggerates losses...

http://www.financialweek.com/app.../1028/ FRONTPAGE





Mr. Sullivan isn’t alone in his disparagement of fair-value accounting standards. Speaking at Indiana State University last week, firebrand banking analyst Christopher Whalen took shots at FASB’s promotion of fair value. Mr. Whalen noted that banks have no choice but to take a “near total loss” on CDS, collateralized debt obligations and other hard-to-value assets under fair-value accounting. “In the absence of fair-value accounting, the tens of billions of dollars in trading book losses reported by Citigroup, Merrill Lynch and other global investment firms might have been greatly re-duced or avoided entirely,” said Mr. Whalen, who co-founded Institutional Risk Analytics.
scotty in the blue room | 03.26.08 - 11:40 am | #

Billy Shears writes:
This is bullish news for the economy and Bush.
Billy Shears | 03.26.08 - 11:41 am | #

idoc writes:
she's so hot when she starts slashing earnings!
idoc | 03.26.08 - 11:41 am | #

Joe Klein's conscience writes:
Didn't S&P say that markdowns have come to an end? And didn't the market rally like 200 points on that statement? D'oh!!!!
Joe Klein's conscience | Homepage | 03.26.08 - 11:41 am | #

Stuart writes:
"Yeah, but Dick Bove called Citi the deal of the century and he's a genius. Just ask him."

funny.

Amazing now that the tide is receding how many are standing naked on the shore.
Stuart | 03.26.08 - 11:43 am | #

hc writes:
“In the absence of fair-value accounting, the tens of billions of dollars in trading book losses reported by Citigroup, Merrill Lynch and other global investment firms might have been greatly re-duced or avoided entirely,”

See? My Mark to Fantasy theory pans out. I'm pretty sure soon there will be two rule change in the world of accounting. Effectively splitting corporate accounts into two:

1. What they think they should be making
2. What their the market actually reflects.

We will be denied access to #2, and only #1 will be used to valued america. This bull run can run for another century with this rule change.

"Do not underestimate how long the market can stay irrational."
hc | Homepage | 03.26.08 - 11:43 am | #

crispy&cole writes:
Why dont we get another pic of her??
crispy&cole | Homepage | 03.26.08 - 11:44 am | #

scotty in the blue room writes:
Afternoon Reading: The Grassy Knoll of Bear Stearns

http://blogs.wsj.com/deals/2008/...ns/? mod=WSJBlog


People still wonder whether the Federal Reserve and the Treasury forced J.P. Morgan to offer $2 a share. Yves Smith at Naked Capitalism scoffs at the idea that regulators twisted Jamie Dimon’s arm, such a suggestion “is pretty outrageous spin when the government is putting up taxpayer money.” And he makes a pretty good argument as to why he think that wasn’t the case. Smith also endorses an Institutional Risk Analytics article that says that J.P. Morgan isn’t so financially strong after all. (So there).
scotty in the blue room | 03.26.08 - 11:45 am | #

awgee writes:
As far as I can tell, Merdith Whitney and Rick Santelli are the only two folks on Bubblevision who have a clue.
awgee | 03.26.08 - 11:46 am | #

iceman writes:
The numbers are just stunning. I mean how many companies in total in the US have market caps over $13B?
iceman | 03.26.08 - 11:50 am | #

scotty in the blue room writes:
Re: CR at Calculated Risk yesterday pointed to an important sign of improving conditions in the credit markets. The fever chart of the so-called third wave of the liquidity crunch, the TED spread, showed signs of improvement. The TED is difference between the interest on three month Treasuries and Libor; the earlier acute episodes were August-September and November-December.

http://www.nakedcapitalism.com/2...- remission.html

See Also: Science comes from the Latin "scio" meaning "I know." Scio derives from the Latin infinitive "scire" meaning "to know," and is akin to "scindere" meaning to cut or to split. Scindere is traceable to the Greek "schizein" meaning to split, and that's traceable to the Sanskrit "chinatti" meaning 'he splits'.

So science is not just encyclopedic catalogs: it's splitting, separating, discerning among ideas. It is reductionist to its etymological core.
scotty in the blue room | 03.26.08 - 11:52 am | #

idoc writes:
can i haz my pic?
idoc | 03.26.08 - 11:53 am | #

Stuart writes:
People need to start coming to terms with what's unfolding behind the scenes. You cannot, will not, let your financial markets fail when you are waging a war overseas. End of story. Period.
Stuart | 03.26.08 - 11:57 am | #

scotty in the blue room writes:
Point, counter point.

As some may recall, there is an inversion in short-term T-bills, i.e, between the 2 and 3 year; however, the 3 year was discontinued last fall, but remains in circulation nonetheless. Thus, when looking at TED with a geometric substitution of The LIBOR versus the historic "normalcy" of the 3 year inflation trend, IMHO, there is a distortion of rate reality:

The 2 year bond rate is @ 1.72

The 3 year bond rate is @ 1.60


Three-month sterling LIBOR, the interest rate off which our mortgages and most other loans are priced, has risen to 6%, its highest level since December 28.

Re: Initially, the TED spread was the difference between the interest rate for the three month U.S. Treasuries contract and three month Eurodollars contract as represented by the London Inter Bank Offered Rate (LIBOR). However, since the Chicago Mercantile Exchange dropped the T-bill futures, the TED spread is now calculated as the difference between the T-bill interest rate and LIBOR. The TED spread is a measure of liquidity and shows the flow of dollars into and out of the United States.
scotty in the blue room | 03.26.08 - 11:59 am | #

idoc writes:
anyone with a link to intraday Libor?
idoc | 03.26.08 - 12:00 pm | #

Allen C writes:
This whining about fair value is getting increasingly irritating. No one including the government wants to assist with making a real market in this crap because they don't want the true price.

We've already had some marks and they're deteriorating by the month.

Banker: "But they haven't even defaulted yet!"
Financial Realist: "What does that tell you about the probability of receiving the future income stream?"
Allen C | 03.26.08 - 12:03 pm | #

Ken writes:
can i haz my pic?

idoc sweeps aside his competition
Ken | Homepage | 03.26.08 - 12:03 pm | #

Viewing with alarm writes:
They are not serious until they start talking trillions!
Viewing with alarm | Homepage | 03.26.08 - 12:03 pm | #

ac writes:

can i haz my pic?

Maybe CR is trying to maintain a "work safe" website. I almost lost my job the last time around.

ac | 03.26.08 - 12:04 pm | #

idoc writes:
Ken

LOL!!!!

yeah, that's me on the right. i eat my Wheaties. no wait, those are too expensive for me. ROFLOL!
idoc | 03.26.08 - 12:06 pm | #

ac writes:

Bear Raids

Bubbles occur when speculators drive asset prices
far above their intrinsic value. The collapse of a
bubble is frequently accompanied by an economic crisis.
Who gets the blame for this crisis? Not the bulls, who
were responsible for the bubble and the various frauds
and manipulations perpetrated to keep shares high, while
cashing in their profits.

No, it is invariably the bears who are blamed for the
post-bubble crises and are the main objects of anti-
speculative legislation. Yet during the bubble periods
it is the bears who are generally the lone voice of
reason, warning people of the folly of investing in
overpriced markets. In the aftermath of a bubble, they
continue their forensic work of exposing unsound
securities and bringing prices back in line with
intrinsic values, a point which must be reached before
the recovery can start.

ac | 03.26.08 - 12:09 pm | #

Ralph Cramdown writes:
These MBS pools looked great when default rates were at historic lows and everyone could keep the refi party going at teaser rates. Unfortunately, that isn't the case, and now these MBS pools, and the banks holding the equity slices -- and all the other banks without demonstrably pristine (off-)balance sheets -- are subject to Schopenhauer's law of entropy.

I really do feel for them on the mark to market issue. Generally, I'm a real stickler for mark-to-market, but the big problem here is that traditional prepay/default models are broken, so the market is broken. If these guys would start circulating spreadsheets of every loan in the pool with current FICO, address, occupation, SSN etcetera, some brainiacs could start building better models. Alas, for privacy as well as the-back-office-ate-my-documents reasons, they can't. I have no idea how these newly created MBS vulture funds are planning on doing valuations. Maybe just buy really low from desperate sellers and hope for the best.
Ralph Cramdown | 03.26.08 - 12:10 pm | #

scotty in the blue room writes:
Re: They are not serious until they start talking trillions!

The Depository Trust & Clearing Corporation (DTCC) announced today it cleared and settled more than $1.86 quadrillion in securities transactions in 2007.

>> At the end of 2007, J.P. Morgan’s exposure totaled $77.2 trillion in notional value, exceeding that of any other commercial bank, while Bear Stearns had $13.4 trillion in notional value.
scotty in the blue room | 03.26.08 - 12:12 pm | #

Shnaps writes:
I'm wondering when Meredith is going to do a testimonial for her hubby's latest product.
Shnaps | Homepage | 03.26.08 - 12:16 pm | #

scotty in the blue room writes:
Here is an example of quantum retardation where generational debt and accountability have morphed beyond the realm of reality:

Re: Considering that Zimbabweans are already among the world's most heavily taxed citizens, it boggles the mind to think of what this will entail.

http://allafrica.com/stories/ 200...0803200682.html


THE unprecedented expansion in domestic debt levels this year, caused mainly by intensifying government borrowing, is indeed a very worrying development.

As reported by The Financial Gazette last week, the stock of domestic debt held by government increased from $60 trillion on February 1, 2008 to $1.4 quadrillion by February 29, 2008.

The debt level stood at $21 trillion on January 1, 2008.
scotty in the blue room | 03.26.08 - 12:18 pm | #

idoc writes:
schnaps,

that is priceless. mama juana energy! oh whitney!
idoc | 03.26.08 - 12:19 pm | #

Shnaps writes:
I thought you guys would enjoy that.

"for people who are already virile."
http://www.mamajuanaenergy.com/index.php

You can't make this stuff up. Just remember, there's no c in Shnaps.
Shnaps | Homepage | 03.26.08 - 12:22 pm | #

ZackAttack writes:
ac, you're certainly right. Almost certainly, the uptick rule will be reinstated for the ETFs.

News...

The Senate Finance Committee just asked the Fed, Bear and JP Morgan to provide details on the proposed deal. They specifically asked for a description of which assets the Fed will be backstopping. This is precisely the information they were trying to keep out of the public eye.

Much potential ugliness if this happens, which I suspect it won't.
ZackAttack | 03.26.08 - 12:24 pm | #

giacutter writes:
1.86 quadrillion?

How do you spell Wiemar?
giacutter | 03.26.08 - 12:24 pm | #

Marcus Aurelius writes:
How do you spell Wiemar?
giacutter | 03.26.08 - 12:24 pm

____

b-u-s-h
Marcus Aurelius | 03.26.08 - 12:27 pm | #

scotty in the blue room writes:
Of note:

1. As reported by The Financial Gazette last week, the stock of domestic debt held by government increased from $60 trillion on February 1, 2008 to $1.4 quadrillion by February 29, 2008.

2. The Depository Trust & Clearing Corporation (DTCC) announced today it cleared and settled more than $1.86 quadrillion in securities transactions in 2007.

3. Hmmmm....that is interesting, i.e, is wall street connected to debt which has zero collateral....
scotty in the blue room | 03.26.08 - 12:28 pm | #

Allen C writes:
"I have no idea how these newly created MBS vulture funds are planning on doing valuations. Maybe just buy really low from desperate sellers and hope for the best."

YES...The complexity/slice and dice approach was sold as a virtue. The new and proper view is a cost and that cost requires a discount.

They better get cracking on developing an approach to providing real and accurate visibility into what is inside or take the opacity hit.
Allen C | 03.26.08 - 12:30 pm | #

idoc writes:
re: the TLSF tomorrow and its effect on the mkt. certainly one has to worry that those proceeds will go into the dow/sp. my thoughts though, given the past few days price action, is that the pigmen won't go into the dow/sp nor put it where they're supposed to such as other credit instruments, ie, MBS, ARS, VRDO's, etc.

it will go right back into the commodities trade.
idoc | 03.26.08 - 12:31 pm | #

FFDIC writes:
That Meridith is a real wood chipper.
FFDIC | 03.26.08 - 12:35 pm | #

FFDIC writes:
Houston Chronicle
Holdout Citigroup settles Enron case for $1.66 billion
http://www.chron.com/disp/story....nt/ 5649665.html
FFDIC | 03.26.08 - 12:38 pm | #

Yearning to Learn writes:
scary article for the bulls in today's WSJ front page
asking if we're in a "lost decade"

It's interesting, I know stocks have't done well since the dot bomb, but I never personally thought of it as a lost DECADE

The Lost Decade?
Yearning to Learn | 03.26.08 - 12:39 pm | #

r0m30 writes:
Ralph Cramdown writes - "....If these guys would start circulating spreadsheets of every loan in the pool with current FICO, address, occupation, SSN etcetera ..."

Then they wont have to worry about their models being broken as they will be shut down for massive privacy violations, problem solved.
r0m30 | 03.26.08 - 12:42 pm | #

awgee writes:
So,it occurs to me; what if there is a run on Citi? Who would buyout Citi? Goldman Sachs? And how much would the fed help? Is the fed's balance sheet that big?Hmmm-m-m, just a thought.
awgee | 03.26.08 - 12:43 pm | #

Alec writes:
Also of note is that Whitney is expecting more writedowns in the future.

Once again, I concur. Their 8k/10q should be a doozy
Alec | 03.26.08 - 12:44 pm | #

Ralph Cramdown writes:
r0m30: Then they wont have to worry about their models being broken as they will be shut down for massive privacy violations, problem solved.

Notwithstanding that I addressed that in the very next sentence of my post, have you ever, in the ling history of massive privacy violations, heard of a company getting shut down for one?
Ralph Cramdown | 03.26.08 - 12:51 pm | #

FFDIC writes:
FT - Hoarding by banks stokes fear over crisis
"The Fed's latest lending to banks under its Term Auction Facility was also in heavy demand, receiving bids for $88.9bn compared with the $50bn on offer, an excess of demand almost as great as the previous auction two weeks ago, before the collapse of Bear Stearns."
http://www.ft.com/cms/s/0/ a5bb23...0077b07658.html
FFDIC | 03.26.08 - 12:53 pm | #

FFDIC writes:
WSJ - Corus Stands At a Precipice In Condo Bust ($9bn in assets on FDIC watch list)
http://online.wsj.com/article/ SB...2173664145.html
FFDIC | 03.26.08 - 12:56 pm | #

sdtfs writes:
Corus Stands At a Precipice In Condo Bust ($9bn in assets on FDIC watch list)

Wasn't Fremont the $9bn bank problem just a few weeks ago? I guess 9 is the number to avoid.

Corus isn't standing on the precipice, they're already over and hanging on to a handful of dry weeds while dangling over the chasm. Maybe Wells Fargo is standing below with a big net while Stumpf is standing on their fingers.

BTW- the "c" in shnaps is silent.
sdtfs | 03.26.08 - 1:30 pm | #

m writes:
well look what we forgot anout. remeber thos monoline insurers and that bebaucle which seems like years ago on the debaucle scale. Their back!!!!

http://www.marketwatch.com/news/...& siteid=yahoomy
m | 03.26.08 - 1:30 pm | #

hc writes:
Does the Fed have enough on it's balance sheet to bail out Citi? How about Citi and BoA?

I think if either falls, we're staring at the great depression.

The fed is on the disadvantaged end of this game, it has to ensure EVERY major bank do not collapse. The market is too optimistic right now. The depression crowd only need to see 1 of the major ones collapse in order to spook the market.
hc | Homepage | 03.26.08 - 1:33 pm | #

sam writes:
sdtfs

i remember when Corus had 5 stars on bankrate and I was going to take out a cd. It was approx. 1 year ago. Checked them out and saw how heavy they were into the condo craze and sent my money elsewhere. Who knows if the bank I sent my money to is solvent now. Its darn crazy out there.
sam | 03.26.08 - 1:39 pm | #

2061249 writes:
Amazing now that the tide is receding how many are standing naked on the shore.

With any luck at all, they'll be swept out to sea for good. Only problem, it'll take a tsunami to do it and that could mean trouble for everyone.
2061249 | 03.26.08 - 1:54 pm | #

sam writes:
PMI Forms Foreclosure Prevention Team
PMI Mortgage Insurance Co.,


a subsidiary of The PMI Group, Inc., said Wednesday that it had formed a new homeownership preservation team led by John Jelavich, PMI’s newly appointed vice president of Homeownership Preservation Initiatives.
The initiative is different than a lender ramping up staff in loss mitigation, and signals a stark change in strategy for one of the nation’s largest mortgage insurers. Rather than sitting in the background and managing incoming claims, PMI is committing resources to supplement efforts already in place at lenders and servicers, whose loans it insures against loss.
“The insurers stand to lose quite a bit from increasing foreclosures, and many servicers are just simply strapped,” said one source, who works in the mortgage servicing industry. “Insurers aren’t saying ‘enough’ to servicers, I don’t think, but they are stepping in much more directly.”
PMI said it will expand its National Accounts Servicing team whose primary responsibility will be to partner with lenders in the development of creative solutions to help Americans avoid foreclosure.
“PMI has a history of working with our customers to develop innovative solutions that preserve homeownership,” said Gene Campion, senior vice president of servicing operations, loss mitigation and claims. “We’re confident that providing additional manpower and resources to aid our customers will ultimately help people who have the ability to make a reasonable mortgage payment preserve their home.”
“It is important for borrowers who are in trouble to contact their lender and see if they have options other than foreclosure,” said Jelavich. “The team will reach out to lenders and borrowers to try and bring both groups together and find creative solutions to save the borrower’s home.”

I wonder if they too will become a gvt agency. why not?
sam | 03.26.08 - 1:57 pm | #

Barley writes:
Thank God all this credit crisis is contained:

Germany and other industrialized nations are desperately trying to brace themselves against the threat of a collapse of the global financial system. The crisis has now taken its toll on the German economy, where the weak dollar is putting jobs in jeopardy and the credit crunch is paralyzing many business

http://www.spiegel.de/ internatio...,543588,00.html

Meanwhile at home in the US of A small business loans move to 12-14%. This will surely help keep the economy rolling right along
Barley | 03.26.08 - 2:04 pm | #

Barley writes:
Citigroup has called for radical measures to end Britain's financial crisis, rebuking the Bank of England for moving too slowly to meet liquidity needs and waiting too long to head off an economic downturn.

http://www.telegraph.co.uk/money...6/ cnciti126.xml
Barley | 03.26.08 - 2:14 pm | #

bobn writes:
crispy&cole:

http://www.thefirstpost.co.uk/?s...k/? storyID=9428
bobn | 03.26.08 - 2:51 pm | #

Jim D writes:
OK, old thread, but I just had to stop by a moment to mock this drivel:

"You cannot, will not, let your financial markets fail when you are waging a war overseas. End of story"

Right. And all the countries who have financial markets fail are just asking for it, right? They like it?

The market failure was years ago, when mortgages and their derivatives went nuts. It's only now we're noticing.

It's like getting shot out of a catapult - the fall may be what kills you, but the lift up is the cause. And once you're airborne, there's not much you can do about it.
Jim D | 03.26.08 - 6:06 pm | #

J writes:
I have a Citibank credit card and a Citibank savings account that's well under the FDIC limit. Should I worry? :^o
J | 03.26.08 - 10:36 pm | #