http://www.youtube.com/watch?v=VIMi7...eature=related
put some of that Bar-B-Que back on the table!
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http://www.youtube.com/watch?v=VIMi7...eature=related
put some of that Bar-B-Que back on the table!
Some bailout transparency resources:
What Don't We Know About The Bailout? from openthegovernment.org
Show Me the TARP Money from Pro Publica
Project: The Financial Bailout from Subsidy Scope
(h/t: The Memory Hole)
None of the good the stuff yet.
One more link, this graph of St. Louis Adjusted Monetary Base from the Federal Reserve Bank of St. Louis.
http://research.stlouisfed.org/fred2...ax_630_378.png
The link comes courtesy of the The eXiled with an alarmist or prophetic recommendation to "Buy A Wheelbarrow Soon, Because Weimar Germany-like Hyperinflation Is A-Comin’ ".
Insight into the never-ending fight in the business world from Bloomberg, by Bob Ivry and Jody Shenn: GE Capital Loss Lurking in Moscow Loans, U.S. Cards
Quote:
GE Capital, the world’s largest non-bank finance company with consolidated assets of $637 billion, accounted for $8.6 billion, or 48 percent, of the Fairfield, Connecticut-based parent’s $18.1 billion profit from continuing operations last year. Chief Executive Officer Jeffrey Immelt has said he wants the division to contribute about 30 percent of annual profit.
Keith Sherin, GE’s chief financial officer, predicted in December that GE Capital would earn $5 billion this year, even after absorbing $10 billion of consumer-related losses, a view not shared by credit rating companies and analysts.
I still insist, if there were ever a time when small-time options traders like me were on a near equal footing with the long-time experienced pros, it is now. This is uncharted territory. Nobody has ever seen this much volatility for this long. Their experience doesn't count for nearly as much and their insider information doesn't appear to have done all that much for them lately. As for me and GE, I think I made my gamble at just the right time. :D
Naked Short Sales Hint Fraud in Bringing Down Lehman, By Gary Matsumoto. Bloomberg, March 19, 2009.
SEC acknowledges it has screwed the pooch:Quote:
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the 2007 peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.
“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’”
Practices Related to Naked Short Selling Complaints and Referrals. SEC-OIG Office of Audits, March 18, 2009. (PDF)
This is a fantastic video explaining how Bear Stearns and Lehman Brothers were brought down in a coordinated attack. It runs 24 minutes long: Hedge Funds and the Global Economic Meltdown
The populist charade on Capitol Hill today was interesting to watch, in much the same way as a car accident.
Senators and Congressmen who helped to perpetrate this mess are flat out lying, on the record, and grilling people who did nothing to create this mess but are trying to fix it. And the public is eating it up because their elected representatives are taking back money from, and yelling at, rich people. But remember, it's not class warfare and the politicians are just being good stewards of the taxpayer's purse. They are public watchdogs.:rolleyes:
I did a quick search of campaign contributions from AIG. It is quite interesting. The contributions of the finance and insurance industry in general is quite interesting. So is this. And this. $280,000 in contributions from AIG to the Senate Finance Committee Chairman. And a sweetheart deal from Countrywide to boot.:cool:
The most shameless exchange of the day had to be between AIG CEO Edward Liddy and Represenative Stephen Lynch of Massachusetts. Liddy agreed to take over AIG in September 2008 and attempt to unravel the 2.7 trillion in garbage that it was tangled in (they've worked their way through 1 trillion of it, thus far). After accusing AIG and Liddy of missteps made by his predecessors, Liddy informed the Congressman that those missteps were not his and that he took offense to the accusations. Lynch interrupted, saying, "Offense was intended. You take it rightfully, sir." It would be one thing to say, "my bad, I didn't mean you personally - after all it was not your fault." But to completely ignore it and fire back with that? Wow. Liddy is a far better man than I am. I would have resigned right then and there, told that Congressman to screw himself, and possibly reached across that bench and beat his face in. What a piece of crap. Typical of what inhabits the Congress. This is the best government that money can buy.
Liddy is Hank Paulson's guy. Paulson appointed him to head AIG last fall as Treasury Secretary, and Paulson appointed Liddy to the board of Goldman Sachs several years ago when Paulson was at Goldman. There is a back story to everything. Partisan bickering as usual.
I don't see what the backstory has to do with today's nonsense on Capitol Hill. A guy who was put in place to try to correct the mess is being grilled for the sins of his predecessors and his government and some know-nothing, do-nothing Congress Critter is the inquisitor. It's like a 5-year-old mouthing off to his teacher.
what the hell do we care;
hail, hail, the gang's all here,
what the hell do we care now.
From Chi Trib (among ca. 2M other Googles), while all are distracted by AIG.
This should change Bourbon's chart - a few posts above - if I remember Econ 101. A few more trillion to go before the economy is "saved" by the "war on the credit crisis" ? - :confused:Quote:
Federal Reserve targets loan rates with $1 trillion plan
Fed's $1 trillion spending plan intended to lower mortgage costs
By Maura Reynolds | Washington Bureau
March 19, 2009
WASHINGTON — The Federal Reserve escalated its war on the credit crisis Wednesday, announcing that it would spend more than $1 trillion in an aggressive effort to force down interest rates on mortgages as well as other business and consumer loans.
The move, which cheered the markets, is designed to keep money flowing through the economy's clogged credit arteries to foster recovery.
"They are trying to fire absolutely every weapon they can," said Nigel Gault, chief U.S. economist at IHS Global Insight, a Lexington, Mass.-based forecasting firm. "It improves the odds that we'll bottom out in the second half of the year."
David Jones, a former Fed economist and president of DMJ Advisors, a Denver-based consulting firm, said he expects the Fed actions to help lower conventional mortgage rates to near 4 percent from their current level of just below 5 percent. ....
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Response to Fed's move by Gary North, The FOMC's Plan to Buy $1.1+ Trillion of T-bonds, Mortgage Debt, and "Other Financial Assets".
New article in this months Washington Quarterly by James K. Galbraith(worlds greatest living economist:wry:). He was a pro Obama supporter who thinks he has taken his eye off the ball. If he doesn't change quickly we are in for a long ruff ride.
http://www.washingtonmonthly.com/fea...galbraith.html
Maybe, but I don’t think so. Liddy brings baggage as a Goldman Sachs board member; he was not just put in his place from out of nowhere. Goldman had exposure to AIG; the bailout of AIG saves Goldman. This helps explain why the hell Goldman was at the AIG bailout meetings in September, witness Eliot Spitzer’s recent article. That's how the backstory has to do with that case of nonsense on Capitol Hill.
The Real AIG Scandal: It's not the bonuses. It's that AIG's counterparties are getting paid back in full, by Eliot Spitzer. Slate, March 17, 2009.
Good article by Matt Taibbi who actually did some digging, as opposed to most journalists, and reals activity by the Federal Reserve that dwarfs all this TARP stuff.
The Big Takeover, by Matt Taibbi. Rolling Stone, March 19, 2009.
Quote:
If you look at the weekly H4 reports going back to the summer of 2007, you start to notice something alarming. At the start of the credit crunch, around August of that year, you see the Fed buying a few more Repos than usual — $33 billion or so. By November, as private-bank reserves were dwindling to alarmingly low levels, the Fed started injecting even more cash than usual into the economy: $48 billion. By late December, the number was up to $58 billion; by the following March, around the time of the Bear Stearns rescue, the Repo number had jumped to $77 billion. In the week of May 1st, 2008, the number was $115 billion — "out of control now," according to one congressional aide. For the rest of 2008, the numbers remained similarly in the stratosphere, the Fed pumping as much as $125 billion of these short-term loans into the economy — until suddenly, at the start of this year, the number drops to nothing. Zero.
The reason the number has dropped to nothing is that the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you've never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there's also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.
While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn't taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy.
Print Just stumbled across "But Enough About You..." I think it's on the right track.
A few excerpts (the last two being the most notable, imo)...
There's an epiphany: "those working for or doing business with a narcissist have to be careful not to be drawn into crossing legal and ethical lines." Wow. Should I also avoid pressing my face onto a hot frying pan? Mr. Obvious, please meet Mr. No-fricken-crap.Quote:
The narcissists did it. Some commentators are fingering them as the culprits of the financial meltdown. A Bloomberg columnist blamed the conceited for our financial troubles in a piece titled "Harvard Narcissists With MBAs Killed Wall Street." A Wall Street Journal op-ed on California's economy suggested that Gov. Schwarzenegger's desire for voter's love ("It's classic narcissism") helped cause the state's budget debacle...
A recent study titled "Leader Emergence: The Case of the Narcissistic Leader" describes how narcissists have skills and qualities—confidence, extraversion, a desire for power—that propel them into leadership roles but that when true narcissists are in charge, other aspects of their makeup—a feeling the rules don't apply to them, a need for constant stroking—can have "disastrous consequences."...
The leading theory about the development of NPD is that people get it the old-fashioned, Freudian way: Your parents give it to you... The authors of The Narcissism Epidemic say the drift toward hovering, boosterish parents who want to gratify their child's every impulse will churn out more narcissistically disordered people...
Management consultant Michael Maccoby studied narcissistic bosses for his book, The Productive Narcissist: The Promise and Peril of Visionary Leadership... He says narcissists can be charismatic forces for change—because of their drive, vision, risk-taking, and even ruthlessness, many corporations turn to narcissists for salvation. But such people can become dangerous because their success fuels their already ample grandiosity and feeds the sense they got there by disdaining the normal rules... those working for or doing business with a narcissist have to be careful not be drawn into crossing legal and ethical lines... narcissistic bosses produce volatile results. Their boldness can lead to big short-term success but long-term disaster...
If the observers who say that part of our economic troubles result from a mass case of narcissism, from consumers who thought they should have the house of their dreams financed on bad debt to bankers who thought they deserved eight-figure bonuses for packaging that bad debt, then perhaps we are about to be cured. Twenge and Campbell point out that the 1920s was a narcissistic era whose economic collapse led to the Great Depression and the greatest generation. Perhaps it's time to dig out those Depression-era recipes for humble pie.
"If the observers who say that part of our economic troubles result from a mass case of narcissism... then perhaps we are about to be cured." - Damn right! That's why I don't regard it as a crisis. It is just a big mess that needs to unravel itself. We will emerge stronger because we will be forced to adapt new incentives that reinforce ethical behavior and we will get a reality check against decades of excess and fantasy.
Slap and other Jim Galbraith devotees: Galbraith I and Galbriath II.
And Gary North - and Paul Krugman - agree with him.
When we get this sort of agreement from all over the political spectrum (as well as across a spectrum of economists, who normally do not agree), we have a very scary situation.
and also Jim's comment that there is nothing to prevent the big banks from indirectly buying their own toxic assets.Quote:
from Slap
did you hear that part where it will transfer bad debts from the banks to the taxpayers
The possible scheme runs like so:
1. Bank's toxic assets are auctioned - banks are made whole (as far as what assets are worth based on auction) or sustain a small loss. They avoid bankruptcy - bailout of AIG will insure some losses from the toxicity. See Matt Taibbi's article (cited above by Bourbon).
2. Toxic assets are bought by LLC X, which stands to either gain (if toxic assets are worth more than bid), or not to lose (taxpayers' guarantee).
3. LLC X is owned (if you go through enough entity layers) by big banks, or more likely their major shareholders.
Result: if toxic assets are really toxic, taxpayers pick up tab (banks paid once for junk). If not really so toxic, banks or their shareholders get paid twice or more.
Perhaps, this and other question marks caused a number of people to duck appointments at Treasury. We will just have to see, cuz all of this is going down the tracks like a freight train.
James Galbraith's father John talked about this as the main problem of Capitalism. There comes a point where large corporations no longer care about customers and business, all they care about is the establishment of a monopoly which drives them to do stupid things as far as business is concerned. This is not a Banking bailout plan it is a straight up Power plan by Big banks to force out small and Mid sized banks. To big to fail was the main reason that AT&T was forced to break up(by the Guvmint) and avoid a monopoly of the phone system. James K. Galbraith is one of the few people who have actually dealt with a real financial crisis. During the late 70's when the Guvmint decided to bail out New York he was on the ground and practically deigned the whole system....which worked out exactly as planned. Why Obama would pass up somebody like that as opposed to some "Kid" I don't know. Then again the plan is not to save banks but support a private Coup de Etat (caint spell frenchy stuff) of the banking system then he choose the right person. Sometimes a conspiracy is a conspiracy.:cool:
If there is a conspiracy to fork over taxpayer dollars to the banks, then buying banking stocks (C, BAC, GS, etc) is one way to get your money back.
with French (Coup de Etat is actually Coup d'État - d' is used before a vowel or "h" and linked to the word, État, which starts with a funny "E" - alt-144 on the numeric keyset - right side of keyboard). All kinds of alt- characters can be typed - but not on this editor - strange things happen. :(
You also do fine with the problem of big corporations (same with big government) which become too large to be managed. This has nothing to do with political philosophy. It has to do with reaching the point where economy of scale starts to run backwards.
Why not Jim Galbraith at Treasury ? Because he is on the wrong side of the fence from the Powers That Be.
PS: Schmed ... which is why the market has bounced the past two weeks (knew something inside was happening), especially in banking shares. We'll see if your theory works.
My major concern is the FV of dollar-denominated assets and income cuz I buy American.
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Try attached .doc file for higher order characters. Works in most word processors. With this editor (at least from my computers), you have to cut & paste them.
I think that is the real test to see if one really believes the conspiracy stuff or if one is just frustrated and venting. My father falls on the conspiracy theory side of things in this financial mess. My parents have always been frugal and responsible and they're in a good financial position, despite the crisis, despite being a truck driver (dad) and a factory worker (mom) all their lives. My challenge to him was: if you think that this mess is just something that fat cat bankers are going to use to swindle people out of their money, then hedge your losses by buying bank stocks. He's got the money, but I don't think that when it comes time to put the money down that he will believe his own ranting. It's just frustration that people are expressing, imo.
FWIW, regardless of whether there is a conspiracy, I do think bank stocks are a smart long term buy. Who thinks that BAC and C are going to be $5 a share in 5 years? Not me. But I do think it will be a roller coaster ride for the next year or two.