Fri 19 Sep 2008
This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From Bloomberg:
Paulson, Bernanke Push New Proposal to Cleanse Balance Sheets
U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke proposed moving troubled assets from the balance sheets of American financial companies into a new institution.
Congressional leaders who met with Paulson and Bernanke late yesterday in Washington said they aim to pass legislation soon. The initiative, which may also insure money-market funds, is aimed at removing the devalued mortgage-linked assets at the root of the worst credit crisis since the Great Depression.
From the WSJ:
U.S. Drafts Sweeping Plan to Fight Crisis
As Turmoil Worsens in Credit Markets
WASHINGTON — The federal government is working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues.
At the center of the potential plan is a mechanism that would take bad assets off the balance sheets of financial companies, said people familiar with the matter, a device that echoes similar moves taken in past financial crises. The size of the entity could reach hundreds of billions of dollars, one person said.
Another proposal would be the creation of federal insurance for investors in money-market mutual funds, coverage akin to the insurance that currently safeguards bank deposits. The move is designed to stem an outflow of funds as consumers start to worry about even the safest of investments, a sign of how the crisis is spreading to Main Street. There is $3.4 trillion in money-market funds outstanding.
In addition, the Securities and Exchange Commission is set to propose a temporary ban on short-selling. It’s not clear how broadly the ban might extend, but it could apply only to financial stocks.
Details of the plan were still being worked out Thursday night and could be delivered to Congress in “hours,” said Senate Majority Leader Harry Reid of Nevada.
The administration had been taking a patchwork approach to the financial crisis, putting out fires as they ignited. The new moves represent an effort to take a more systematic approach, after a spiral of bad debts, credit downgrades and tumbling stocks brought down venerable names from investment bank Lehman Brothers Holdings Inc. to insurance giant American International Group Inc. Banks have grown unwilling to lend to one another, a sign of extreme stress, because financial markets work only when institutions have faith in each other’s ability to meet their obligations.
From Reuters:
Moody’s raises loss projections for subprime RMBS
Moody’s Investors Service revised its expectations on lifetime losses higher for pools of securities backed by subprime residential mortgage loans on Thursday, citing growing delinquencies and elevated default rates.
Moody’s revised its cumulative loss projection for 2006 subprime loan pools up to 22 percent, compared with initial estimates in January of 14 percent to 18 percent, based on pool performance through July 2008 remittance reports and its updated assumptions on future outlook.
The credit ratings agency projected losses will hit an average of 29 percent for subprime pools issued during 2007’s first half, while loans originated during 2005’s second half will lose 11 percent of their original balances.
“Levels of delinquency and loss severity are proving to be much worse than in prior vintages and are demonstrating a persistent deterioration, especially as compared to our last loss projection update in January 2008,” said Jonathan Polansky, a managing director at Moody’s.
Moody’s also said it anticipates elevated default rates on the remaining non-delinquent borrowers for at least the next 18 months.
first!
first
The German state bank’s loss from the mistaken transfer of funds to Lehman is now up to 536M euros. Two board members and one computer have been fired.
From the NY Times:
The Pain of Selling a Home for Less Than the Loan
Many Americans are discovering an unfortunate twist to the housing crisis: even after selling a home and moving away, they might have to keep paying on it for years, even decades.
With home prices tumbling, millions of people owe more on their mortgages than the houses are worth. If a new job or other life change compels them to sell, their choices include bringing a pile of cash to the closing to make the bank whole, going into foreclosure or cutting a deal with the lender to pay off the balance of the loan over time.
How sellers will react when confronted with these unappealing options is one of the biggest questions hanging over Wall Street as it tries to move beyond the carnage overwhelming such venerable firms as Lehman Brothers, American International Group and Merrill Lynch.
A sale for less than the value of the mortgage on a property is known as a “short sale,” because the transaction leaves a homeowner short of the funds needed to settle the debt. Agents and lenders say the number of short sales is rising markedly.
Reluctantly, banks are agreeing to let some short sales go through. But instead of writing off the unpaid portion of the debt, they want homeowners to sign a note promising to pay some or all of the balance due.
…
This was the situation confronting Mike and Linda Kelly, who needed to sell their house in the foreclosure-plagued Central Valley of California when Mr. Kelly got a new job 75 miles away.
The Kellys owe $300,000 on their house, which has a pool in the back, crepe myrtle bushes in front and, because Mr. Kelly is a ham radio buff, a 40-foot antenna above it. But the best offer they could get gave the bank $220,000.
grim (3)-
“Moody’s Investors Service revised its expectations on lifetime losses higher for pools of securities backed by subprime residential mortgage loans on Thursday, citing growing delinquencies and elevated default rates.”
Of course, the gubmint will pay par for this trash and project its maturity at par.
The gubmint of the US is a criminal enterprise.
Period. End of story.
Now looking into offshoring all my assets.
#7
If lenders make borrowers split the loss of a short sale and take out a promissory note, will that make future borrowers more prudent?
bairen (11)-
Of course not. However, you can now rest assured that the lenders will never be prudent again.
No matter what lenders do, they will be subsidized and bailed out. One of the giddy idiot commentators exclaimed last night- after Pelosi’s donkey show- that “now we can get back to securitizing loans!!!”.
Texas may claim hundreds of beach front homes as belonging to the state. If a house is between the average of the lw and high tides, that’s considered to be public property.
I really hate beach front houses. Resent footing the bill so doffueses can buy beachfront houses they can’t afford, or invest in them, while I get stuck bailing them out every time a storm of the century comes through and tears them up.
http://www.cnn.com/2008/US/weather/09/19/ike.beach.houses.ap/index.html
#12 clot,
Total farce. I resent footing the bill for every failed flipper or moron who bought a house they could barely carry with the teaser rate. The fat that my kids will get stuck paying the bill is even more outrageous
#fat = fact
Should LEH stockholders be p*ssed that the government arranged for bailouts and/or assistance of some sort for every financial institution thus far except LEH?
Now looking into offshoring all my assets.
is it that easy? so basically, taxes are going to get jacked through the roof, and we lose. again.
the downfall of this country has been terribly sad.
The bailout’s going to be wonderful. Suzanne says so
http://www.cnn.com/2008/LIVING/personal/09/19/lkl.suze.orman/index.html
#18 comment is sarcastic
#16 Seneca,
No,the bigger issues that they should be p1ssed at, is the profit centers and high value businesses going out the back door at firesale prices. There will be nothing but the toxic sludge left to liquidate and nothing to come out of Chp 11 with.
Good morning party comrades!
I’m fairly surprised that some sort of nebulous bailout bill was rammed through in an emergency session overnight.
Paulson better pray this things gets approval.
If his plan is to string this thing along until Nov. and then let it die in the House or Senate after the election we should just shoot him now.
In any event we should just shoot him now.
laughy (17)-
Offshoring assets becomes much easier when you offshore yourself.
Heck, by the time I can actually leave, the expat tax won’t matter. I won’t have much of anything left.
#23 clot where would you flee to?
tosh (22)-
Somebody should do a drive-by on him and Bergabe. They can do a lot of damage before November.
As if they haven’t done enough already…
bairen (24)-
At this point, it may be a matter of whatever country will take me.
I have family in Canada & France. Could be the first choices.
Did Bunning say before Bergabe was approved that he wasn’t qualified for the post?
It is supposed to be a beautiful country.
http://www.immigration.govt.nz/migrant/
i saw how a bunch of people said they want to call their governors and senators … that really doesn’t do anything. i dont see the point.
i’m so disillusioned by politics and this entire bailout of these jokers. is this US public that stupid? How come the media isn’t running with headlines that say: HEY IDIOT TAXPAYERS, YOU’RE BAILING OUT THESE FOOLS
#29 Yes. The US public is that stupid.
At least the Northeast and California can get back some of the money we send to the red states
#12 clot: “now we can get back to securitizing loans!!!”.
BAck tp loan securization!!! Do you think the IB’s willl start that nnonsense again?
And where does this all leave housing prices going forward, as in declines?
#31 - Do you think the IB’s willl start that nnonsense again?
Do you doubt it?
would “sophisticated” investors be dumb enough to repeat?
oh, yes, they would. it would be different this time they’ll claim
The day is starting off damn good. The SEC has banned short selling just as I predicted. The next step may be to place controls on selling at all. We’ve got to root out the terrorists who are upending these markets. The treasury has moved to guarantee money market funds hence rooting out the doom and gloomers from that area as well.
I call on the SEC is begin reviewing sell transactions over the past week and begin detaining people for questioning about their loyalty to this country. We also should prevent short covering. If these dirtbags were so low down as to short the market, let them suffer unlimited losses. Under no circumstances should they be allowed to cover.
Why not….it will be guaranteed by the US Government.
#34 - I call on the SEC is begin reviewing sell transactions over the past week and begin detaining people for questioning about their loyalty to this country.
I agree. The only problem I see is how to tell people whom we know to be patriotic from potential terrorists… Perhaps a jaunty armband to delineate the two!
Media reporting that you can’t get a mortgage unless you have high FICO and 20% down because of this financial crisis. But don’t worry because Feds are coming and going to let the money start flowing again so that non-creditworthy individuals can once again buy a home. It doesn’t occur to these reporters that this is what got us into the mess in the first place? Am I in a Bill Murray movie? Where is the reporting and analysis?
“Experience is what allows us to repeat our mistakes, only with more finesse”
#36
Now you’re talking. Maybe the shorts could be forced to wear boxer shorts on their heads
3b (31)-
No sane person should buy a house now. At any price.
SEC banned short selling
http://news.yahoo.com/s/ap/20080919/ap_on_go_ot/sec_short_selling
Of course it’s only “temporary”
#40 and it’s limited to financials
What does that do to the SKF?
we’re on pace for a 1,000 comment thread.
tard (34)-
I’m with you all the way, pal. I’m pretty much locked into short positions all over the place, and I have no intention of covering.
The actions of your criminal gubmint have just ensured that the inevitable crash will be 10x worse than it would’ve been.
You are about to find out what happens when normal and legitimate short-selling is removed from markets. It won’t be pretty.
MS and GS went down because THEY COULDN’T GET A BID. NOBODY WANTED TO BUY, BECAUSE PEOPLE FIGURED OUT THEY WERE A SHAM. That’s why LEH failed. That’s why nobody wanted WaMu or AIG. ALL THESE ENTITIES ARE WORTHLESS.
There is now no floor under the un-shortables. The next time investors get spooked, these issues will trade down to 0.
[10] Clot,
If you are serious, get my email from Grim or Kettle. I am working on that in my free time.
We need a new law that only allows one news commentator per news station. All the rest must be retrained for manual labor.
HE (42)-
I have no earthly idea. I think State Street doesn’t either.
I don’t really care. I’m locked into SKF…and I firmly believe this thing will be back in the money faster than any of us can imagine.
If we can’t short the financials, then the financial companies shouldn’t be allowed to short any stocks either.
What does that do to the SKF?
i’d love to know the answer to this, too.
CAN EVERYONE PLEASE IGNORE REINVESTOR101? The guy is a clown, and there’s no point in reading or responding to his posts. He has never made a legit point about ANYTHING.
PLEASE IGNORE HIM
do not feed the trolls
I think the Builders and the REITS are going to get pounded after all the dumb shorts are out today in these sectors.
RE101 always gets a laugh from me. Please keep him around.
grim (8)
If the Kellys agree to pay Citi $166 a month for 20 years after they’ve already sold their house, what’s to stop them from defaulting? They don’t have anything left Citi can take away.
Citi wouldn’t have a right to put a lien on their new house, if they were to buy again, would they?
Wouldn’t it be the same as defaulting on a credit card?
Seneca (37)-
I wonder what the new guidelines will be for somebody who’s had to short sale or who’s been foreclosed within the past six months.
My guess? 5.75% on a pay-option ARM, nothing down, 106% financing…featuring financing of all closing costs, plus cash out at closing. Stated-stated.
These loans will then be securitized and sold directly to the gubmint as AAA-rated instruments. The gubmint will pay par and hold to maturity.
Of course, the rest of the world will regard us as a giant Zimbabwe. But everyone will have granite counters and a Hummer.
[47]
Could not get info on STT yesterday, except for speculation that Reserve breaking the buck may cause massive outflows. Heard today that the selling was due to concerns that STT may have more toxins in their balance sheets than previously thought.
So glad I sold into that last rally. I had shares with really low basis that I bought when I worked there in the 80’s and 90’s, before law school. I have a lot of friends whose pensions and profit sharing took a massive broadside and I feel awful for them (on the other hand, there are some crones there that I absolutely hate, and know that they are invested up to their eyeballs in STT, and I am (somewhat guiltily) enjoying their pain!)
Clod,
I can’t think of anyone more radical than you on this entire damn board. The government has not hurt you but is trying to help you and you resent it. I’ve tried to figure out why you feel this way and have concluded that you’re just a mean contrary little cuss. What the hell is your problem? And no, you shouldn’t be allowed to take your marbles and leave this damn country. You should keep your azz right here with the rest of us and pay your damn taxes.
Besides, GS, AIG and the rest of these great American companies that have been under attack have value. They will not trade to zero. I’m so glad that the shorts are now under attack. Now if they will only go after those who have ruined the real estate markets.
Clotpoll Says:
September 19th, 2008 at 7:54 am
tard (34)-
I’m with you all the way, pal. I’m pretty much locked into short positions all over the place, and I have no intention of covering.
The actions of your criminal gubmint have just ensured that the inevitable crash will be 10x worse than it would’ve been.
You are about to find out what happens when normal and legitimate short-selling is removed from markets. It won’t be pretty.
MS and GS went down because THEY COULDN’T GET A BID. NOBODY WANTED TO BUY, BECAUSE PEOPLE FIGURED OUT THEY WERE A SHAM. That’s why LEH failed. That’s why nobody wanted WaMu or AIG. ALL THESE ENTITIES ARE WORTHLESS.
There is now no floor under the un-shortables. The next time investors get spooked, these issues will trade down to 0.
“$800 billion fund to purchase so-called failed assets” - Is that anywhere near enough?
Following up on last night’d geekfest:
I remember dropping cards off at night to have a program run and then picking up the printout the next morning. By the time we had progresswd to edlin, we thought we were in computing nirvana.
CNN is reporting that the Treasury is going to backstop money market funds.
If the taxpayer is shelling off $800B to cover this junk why doesn’t Wall Street kick in the $120B in bonuses they’ve shelled out the past two years?
[57] shore,
Punch cards? Edlin? You’re dating yourself.
(course, so did I).
I’m pretty sure the ultrashort ETFs will still be allowed to do their things from what I read on the finance boards. I do expect the volume in these to quadruple as it will be the only shorting play available.
I expect there to be a market rally like never before seen today. This could bring the DOW all the way up above 12K. Then the slow realization that all stocks are overvalued as earnings season kicks into high gear will bring us right back down. Then the alt-a crisis will kick into gear and wash, rinse and repeat. If subprime brought the Dow from 13,700K to 10,400, Then I’m assuming we’ll eventually see Dow 8K as so many here predicted.
The market seems to think the toxic waste has been swept under the rug, but eventually that mound under the rug will render the rug useless.
All shorts are going to get hammered over the next few weeks. It will take cajones of steel to weather the storm. I plan on putting a thin coat of oil on mine.
Shore..I have contacted senator’s in the past, received the token “thank you” and nothing else.
even a phone call gets you nothing. I still want to believe that it makes a difference, but I am not deluded. What do you think is the most meaningful action to get your reps and the feds attention? Does a march on the mall even make a difference?
I think getting the masses to move is the key, but it appears that the “majority” is ignorant.
feeling kind of hopeless, hubby said he may never vote again. end of rant.
Tard (55)-
“The government has not hurt you but is trying to help you and you resent it.”
See, there’s the problem: unlike you, I have not- and will not- ask the gubmint to help (read: bail out) me.
Help like theirs I need like a hole in the head.
For a Republican, you sure talk like a member of the Soviet.
hunter (62)-
Add me to that list with your hubby. Voting, IMO, now indicates nothing but complicity with the criminal enterprise called the US gubmint.
look at the “help” that is out there…SS, medicare and medicaid…broke, yeah I want help like that
# 13 bairen
The other day I posted links to photos of beach houses in TX and commented about how they had gotten out-of-control big. There is a reason why beach houses used to be small, cheap, and easy to rebuild. McMansions on the coast are a joke.
Something to break the mood…..
http://www.youtube.com/watch?v=t2A0Ovilm24&feature=related
[61] Stu
The selling opportunity we are all looking for!
[51] Vic,
Yes, RE makes for entertaining, if not occasionally incomprehensible, rants.
Problem is, I can’t figure out whether or not he is eminently qualified or fantastically unqualified for membership in the compound! I just don’t know.
when the malaise sets in, they have you where they have wanted you all along…maybe alittle floride int he water will speed things along. just shut up and we will eventually take 80% of your paycheck.
[61] Stu,
” It will take cajones of steel to weather the storm. I plan on putting a thin coat of oil on mine.”
There’s a joke in there somewhere, I just know it.
Are you calling me a damn commie? Those are fighting words.
Let me tell you something, I love and support free markets but freedom isn’t free. When short sellers and rumor mongers run amok, then a damn line has to be drawn in the damn sand. WE CAN’T LET THEM DESTROY THIS COUNTRY. I support the war on the shorts and we shouldn’t stop until they are completely destroyed once and for all. After we get rid of them, we need to turn our guns on those who’ve been upending the real estate markets.
Clotpoll Says:
September 19th, 2008 at 8:09 am
Tard (55)-
“The government has not hurt you but is trying to help you and you resent it.”
See, there’s the problem: unlike you, I have not- and will not- ask the gubmint to help (read: bail out) me.
Help like theirs I need like a hole in the head.
For a Republican, you sure talk like a member of the Soviet.
How much of last night’s Klink/Pelosi donkey show was just to get the markets through options expiration today?
Gonna be a lot of covering and buying going on today…but what happens Monday?
The unintended consequence of the Governments actions is that the 1930’s Great Depression will be eclipsed by the 2009 Bipartisan Armeggedon they have created.
Short ban list:
REITS aren’t in there (phew).
http://sec.gov/rules/other/2008/34-58592.pdf
tard (71)-
“I love and support free markets but freedom isn’t free.”
Translation: I love and support free markets, except when I make bad decisions. Then I whine to the gubmint to help me avoid the consequences of my stupidity.
When I think about what the ban on shorting and the short squeeze does to people like Peter Schiff, I get almost giddy with glee.
It really makes the heart glad!
“Problem is, I can’t figure out whether or not he is eminently qualified or fantastically unqualified for membership in the compound! I just don’t know.”
Well someone needs to buy the beer and clean out the septic.
I love the smell of communism in the morning
#72 - That was my assumption yesterday. They’re just buying another month hoping for jebus to miracle away all the problems.
tard (71)-
“…we need to turn our guns on those who’ve been upending the real estate markets.”
So, you mean banks, mortgage companies, builders, NAR and unscrupulous borrowers?
I think he meant himself :P
I think Tard is Herschel Walker. He can actually change personalities from sentence to sentence.
69] House
My last two quote from Soc!al!st candidate Norman M. Thomas got moderated. [Grim, feel free to kill them]
Here is a better one, and more apropos of the times:
“”The difference between Dem[s]
and Repub[s] is: Dem[s] have
accepted some ideas of Soc1al!sm
cheerfully, while Repub[s] have
accepted them reluctantly”
Regarding the SKF….I don’t see any reason that it will be affected in terms of its ability to function. I think the costs of allowing it work are going up. I don’t think they are banning shorting as a position relative to the market. They are banning the action of borrowing shares to sell without ownership. They are many ways to reconstitute the equivalent, it will just be more expensive.
I would be more concerned with how well the SKF tracks your index and the cost of carry embedded in the expenses.
#66 Shore Guy,
And we are stuck paying for them through either higher insurance repmiums or government hand outs, or beach replenishment projects.
Note: Sea bright can suck it
Hey 50.5,
I’ll comment more later, I’m buried. Covered every short yesterday as soon as the UK news hit. It’s been a great ride. Probably hit the islands, drink tini’s, let the masters force feed grade 1 cocaine to idiots like yourself and then get shorty again. Hey, my house just got robbed, let’s reward the thief with a bonus.
By the way, have you ever heard of a synthetic short? Selling calls/buying puts. How about futures? Why not ban puts, futures and day trading?
One other thought, BC didn’t offer this course. Maybe I’ll go back to school or just bring a book to the islands;
http://www.amazon.com/Das-Kapital-Gateway-Karl-Marx/dp/089526711X
What a week, the USA is now the USSA. We will need to borrow from the world, probably from China another 800 billion to start. In the end, it will be double that.
I feel sorry for Orwell. He died thinking he was the man. I bet no grass grows over his grave for the next 50 years.
“They are banning the action of borrowing shares to sell without ownership.”
Chi,
As you know, the Goldmorgan’s of the world borrow billions of stock every day for lending purposes to hedgies. What does this respresent, close to 30% of their revenue? Keep the rule enforced and watch the job losses accelerate.
Robert Reich:
“The only way Wall Street’s meltdown doesn’t spill over to Main Street is if policymakers begin to pay adequate attention to the people whose wallets really keep the economy going, and who merit more help than the Wall Street tycoons whose carelessness and negligence have put it in such jeopardy.”
One quick question, gotta run;
Did the dolts include Lehman on the banned list? If yes, I’ll sheet in my pants. Later.
“What does this respresent, close to 30% of their revenue? Keep the rule enforced and watch the job losses accelerate.”
Remove the rule and the markets will implode overnight.
You simply can’t tame the market without serious repercussions.
So RE: should the press be banned from reporting bad news as well?
“Yesterday Hurricane Ike brought much needed rains to South Texas.”
“If the taxpayer is shelling off $800B to cover this junk why doesn’t Wall Street kick in the $120B in bonuses they’ve shelled out the past two years?”
Or how about no bonuses until the $800B is paid back?
Hunter alert.
He walked into the garage, picked up a baseball, looked at me and said “METS”.
My work is done. Although he is now set up for a lifetime of heartbreak.
Here is something interesting:
I wanted to verify some of my quotes (one of which had an incorrect date per Wiki) and I came across this interesting statement on the Dem*cratic Soc!al!sts of America website:
“The government could use regulations and tax incentives to encourage companies to act in the public interest and outlaw destructive activities such as exporting jobs to low-wage countries and polluting our environment. Public
pressure can also have a critical role to play in the struggle to hold corporations accountable. Most of all, soc!al!sts
look to unions make private business more responsible.”
Unless I am mistaken, isn’t this the O economic plan in a nutshell????
Bi:
How about a report on the polls?
I expect there to be a market rally like never before seen today. This could bring the DOW all the way up above 12K. Then the slow realization that all stocks are overvalued as earnings season kicks into high gear will bring us right back down. Then the alt-a crisis will kick into gear and wash, rinse and repeat. If subprime brought the Dow from 13,700K to 10,400, Then I’m assuming we’ll eventually see Dow 8K as so many here predicted.
I dont know your track record here, Stu, but this seems accurate. The idiots running this country just keep postponing the doom. Actually i hope stocks soar in the coming days/weeks … this time, when apple hits 175-200 or the index hits 85, I’m pulling it all out and socking it away.
and that’s when the SKF express will kick in again.
Will we see record bonuses on the street this year now that the government endorses and backs fraud?
Nom,
re:offshore. Can you cc me when you email Clot?
email via grim.
Thanks,
sl
DJ futures up 400.
Clotpoll [39],
What’s your estimation, a year from now?
SKF down 21%+ in pre-market
That dull thud you hear is the sound of moral hazzard hitting the pavement after having been thrown out the window.
“Ron Paul Discusses Financial Turmoil and the Fed 9/18/08″
http://tinyurl.com/449gwg
this govt is crooked and corrupt, I hope you blokes realize what this all means.
just wait till next summer. you better start saving as much as you can now.
SAS
Chi,
you wrote: “Although he is now set up for a lifetime of heartbreak.”
…only if he is a Yankee fan.
sl
SHORT SQUEEZE BARGAINS - The shorts are getting squeezed and good liquid stuff is getting dumped today at par. A whole bunch of 5% coupon A or higher rated NJ/NY munis that are insured hit my screen at par or less just this morning. A 5-15 year 5% muni at par or less is insane with fed funds this low.
We live in the Lehigh Valley in a school district called East Penn. This area’s home prices went up 80% from 2002-2007. Now prices have already dropped 30% and people aren’t buying.
Most of the people who purchased were from NJ & NY, they commuted to work. It’s the same all over for them now, price declines and can’t sell. What a shame!
If the market soars, the NJ Legislature will view it as an opportunity to raise the State Pensions again.
WASHINGTON (MarketWatch) — The Federal Reserve took two steps to boost market liquidity on Friday morning, the central bank said. The Fed will extend loans to banks to finance their purchases of asset-backed commercial paper from money market mutual funds — a move the Fed says will help funds meet investor demands. The Fed will also buy from primary dealers short term debt issued by Fannie Mae (FNM:Fannie MaeFRE 0.32, +0.05, +18.5%) and the Federal Home Loan banks. The moves come after the Fed chairman and other officials met Thursday night to hammer out a broad plan to fight the financial crisis.
How can amoral people rule on moral hazard?
Futures up 570.
#67 Thanks for the video, ChiFi. To me it looked like a metaphor for the market finally taking control. It ain’t gonna be pretty then, either.
Will they put the stops in if the market rallies too quickly?
#78 Major - Yeah, except it doesn’t smell like victory, does it?
Mother of all rallies!
#115 The fever spikes just before the patient dies. I gotta get more coffee and try to cheer up here.
You know I’ve been heavy into skf, but even I’m too nervous at the moment. It’s $88 pre-market, though and wow … what a gift that could be. I’m tempted to buy a few as lotto tickets.
sheep.
I would wait for the markets to rally and the euphoria to die off.
Minimize your risk!
So, let me get this straight. The money markets are in the business of making short-tern loans to businesses . These loans are based on an assessment of risk, and, because of an attention to risk, the Money Markets only had one breaking of the buck before this week. Now, because we have had a second and third break, we are going to “solve the problem” by removing ther need for the money-market managers to manage risk?
Am I missing something here? I know I have not had all my coffee yet this morning but, this seems to be encouraging people to be have in a way that will almost guarantee the need for the Treasury department to step in and insure losses.
http://www.nytimes.com/2008/09/20/business/20moneys.html?ref=business
The Treasury Department said Friday morning that it would guarantee, at least temporarily, money market funds up to an amount of $50 billion in order to ensure their solvency.
“For the next year, the U.S. Treasury will insure the holdings of any publicly offered eligible money market mutual fund — both retail and institutional — that pays a fee to participate in the program,” the Treasury said in a statement .
“Money market funds play an important role as a savings and investment vehicle for many Americans,” the Treasury said in statement.
Concerns about the value of money market funds falling below $1 have exacerbated global financial market turmoil and caused severe liquidity strains.
Any predictions on the VIX?
We are rapidly becoming Japanese Communists
wamu is $4.50 in premarket, short sellers shorts are around their ankles and they will be screaming WWWWWAAAAAAMMMMMMUUUUU at 9:35 when they get a margin call.
Remember, this requires Congressional approval, a month and a half before the election? One other note, the devil is in the details.
Free cocaine to any buyer of stocks.
here’s that premarket SKF
http://www.nasdaq.com/aspxcontent/ExtendedTradingTrades.aspx?page=afterhours&mkttype=PRE&symbol=skf&selected=skf
down to 88
Wachovia Corp. (WB), which is said to be in possible merger talks with Morgan Stanley, rose another 94% premarket after soaring 59% on Thursday.
While Goldman pared much of its earlier losses Thursday - it tumbled 25% at one point in the session - it still ended in the red, down 5.7%. But the stock more than made up for it in recent premarket trading, as it soared 34% to $143.
American International Group Inc. (AIG), the troubled insurance giant being taken over by the government, ended up 31% on Thursday and added another 59% premarket. New CEO Edward Liddy said he hopes to keep intact as many of the company’s largest insurance operations as possible in a publicly traded company, after selling assets to pay back a federal loan.
Big commercial banks also posted big gains. Citigroup Inc. (C) added to Thursday’s 19% advance with a 28% surge premarket, while JPMorgan Chase & Co. ( JPM) climbed 15%, matching Thursday’s gain, and Bank of America Corp. (BAC), jumped 19%. Merrill Lynch & Co. (MER), which agreed at the start of the week to be acquired by Bank of America, padded Thursday’s 14% advance with another 27% gain.
About calling trhe White House and various elected representatives.
I have spent enough time with folks on the Hill qand in the Executive to know that they only respond to pressure. They may not respond to any given letter or phone call BUT they track which issues people are calling about and on what side of the issue thaey are supporting.
I had th e good fortune to be able to get beyond those gatekeepers and right to senior staff yesterday. BUT, just because someone else can’t do that does not mean that they should not call. Don’t write via the post office. Letters just do not get to anyone after the anthrax issue. But faxes do get through.
Call early and often. Fax if you can. E-mail your representatives via their house.gov Web sites. When you call, call both the DC offices and every district office they have. You want the reports going up to the boss being, “We are getting a lot of angry calls from people who think this is a bad idea.” If you share the official’s party affiliation, let them know that, let them know that you have voted for them in the past and that you will not only not vote for them if they support this bad policy but that you will support primary challengers and even general election challengers of the other policy if they go along with this madness.
The folks we elected take silence for affirmation.
“Will they put the stops in if the market rallies too quickly?”
Hahahahahahahahahhaahahahahahahahahahahahah
Yea, right. Remember profits are good for them, losses are bad for us.
John [122],
If anybody has been short that crap and has not covered, they deserve it. Risk/Reward.
C’mon baby! Daddy needs a 5D MkII!
“And we are stuck paying for them through either higher insurance repmiums or government hand outs, or beach replenishment projects.”
Whilst I agree that there can be good economic reasons for the state and feds to do some beach replenishment, people take chances when they buy property on the coast. If you want the benefit of waking up each morning with the sun peeking over the ocean and having that first cup of coffee whilst walking on the beach, and unwinding inthe evening with a drink in your hand listening to the surf pounding a few yards away, THERE ARE RISKS and the individual who invests in such property must bear them individually.
#129 - :)
Grim,
I could have bought you Jersey Camera with my paper losses from yesterday and today :(
And you could keep it open on Friday night and Saturday.
I am disgusted by the actios of my Republican brothers and sisters. I do not expect much from the Dems in congress, Chuck Schumer, should now be called Red Chuck, as his proposals sound like something from a five-year-plan from the comintern.
Clot #10,
I agree 100% on all counts!!!!! i hear dominica is nice this time of year!
# Clotpoll Says:
September 19th, 2008 at 6:33 am
The gubmint of the US is a criminal enterprise.
Period. End of story.
Now looking into offshoring all my assets.
Ket,
We love Dominica. It is not as nice as Grenada (which is also usually out of the hurricane tracks), but far nicer than Antiga, the ABCs, etc.
#130 Shore Guy,
If people want to enjoy a beachfront house, they should accept the risk, not socialize it onto the rest of us yet be able to pocket all the profits if they can make money on a resell. Some beach replenishment projects do make sense, but not all.
I noticed you didn’t disagree with my Sea Bright comment. :)
Rally away, baby! Yeah!
Actios? Sounds like a breakfast cereal. Actions, that was supposed to be.
Off to call Lautenburg. He is alive right?
For all disillusioned Republican’s, these lyrics (courtesy of the patron saint of NJ)should have a certain resonance:
Once I thought I knew
Everything I needed to know about you
Your sweet whisper, Your tender touch
But I didn’t really know that much
Joke’s on me, It’s gonna be okay
If I can just get through this lonesome day
Hell’s brewin’ dark sun’s on the rise
This storm’ll blow through by and by
House is on fire, Viper’s in the grass
A little revenge and this too shall pass
This too shall pass, I’m gonna pray
Right now all I got’s this lonesome day
It’s allrightŠIt’s allrightŠIt’s allright
Better ask questions before you shoot
Deceit and betrayals bitter fruit
It’s hard to swallow, come time to pay
That taste on your tongue don’t easily slip away
Let kingdom come I’m gonna find my way
Through this lonesome day
For you ex-Boston residents, what areas around Boston are like Summit and Westfield? Train towns with good schools. Seriously thinking about relocating their next year. I’ve read that Arlington, Watertown, Waltham, Wellesley, and Needham are supposed to be nice Don’t think I want my kids going to public schools in Boston so we’re looking at nearby towns.
anyone want to recommend a good brunch spot in downtown Chicago?
ChiFi, we’ll be in your wonderful city for the first time this weekend. Dinner lined up, Cubs game, bars … we’re pumped.
And Ameritrade is down again for me!
So damn frustrating.
114 stater
“#78 Major - Yeah, except it doesn’t smell like victory, does it?”
No. Smells more like Mission Accomplished.
#39 clot: do you see any chance of housing being reinflated,and then its up, up and away agin.
Laughing,
I ate at a place on the river, a few doors to the east of the ABA headquarters (can’t remember the name), the food was decent and it overlooked the boats going up and down the river within the loop. I want ti say it was behind the Westin (not the Westin across the street from John Hancock tower).
in mod. Not sure why. Maybe the name of one of our founding fathers that includes the name of a bird that is not a hen.
I love the smell of foolish policy in the morning, it smells like…. securitization.
John Hanc+ck?
Laughing,
I ate at a place on the river, a few doors to the east of the ABA headquarters (can’t remember the name), the food was decent and it overlooked the boats going up and down the river within the loop. I want to say it was behind the Westin (not the Westin across the street from John Handc0ck tower).
#143 Major - Touche!
Who was it who referenced Hoovervilles the other day:
RENO, Nev. - A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.
Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.
Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a “tent city” — an encampment of people who had nowhere else to go.
From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.
Nearly 61 percent of local and state homeless coalitions say they’ve experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report’s release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.
“It’s clear that poverty and homelessness have increased,” said Michael Stoops, acting executive director of the coalition. “The economy is in chaos, we’re in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future.”
The phenomenon of encampments has caught advocacy groups somewhat by surprise, largely because of how quickly they have sprung up.
“What you’re seeing is encampments that I haven’t seen since the 80s,” said Paul Boden, executive director of the Western Regional Advocacy Project, an umbrella group for homeless advocacy organizations in Los Angeles, San Francisco, Oakland, Calif., Portland, Ore. and Seattle.
The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans. The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood. In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters. Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.
The Department of Housing and Urban Development recently reported a 12 percent drop in homelessness nationally in two years, from about 754,000 in January 2005 to 666,000 in January 2007. But the 2007 numbers omitted people who previously had been considered homeless — such as those staying with relatives or friends or living in campgrounds or motel rooms for more than a week.
In addition, the housing and economic crisis began soon after HUD’s most recent data was compiled.
“The data predates the housing crisis,” said Brian Sullivan, a spokesman for HUD. “From the headlines, it might appear that the report is about yesterday. How is the housing situation affecting homelessness? That’s a great question. We’re still trying to get to that.”
In Seattle, which is experiencing a building boom and an influx of affluent professionals in neighborhoods the working class once owned, homeless encampments have been springing up — in remote places to avoid police sweeps.
“What’s happening in Seattle is what’s happening everywhere else — on steroids,” said Tim Harris, executive director of Real Change, an advocacy organization that publishes a weekly newspaper sold by homeless people.
Homeless people and their advocates have organized three tent cities at City Hall in recent months to call attention to the homeless and protest the sweeps — acts of militancy, said Harris, “that we really haven’t seen around homeless activism since the early ’90s.”
In Reno, officials decided to let the tent city be because shelters were already filled.
Officials don’t know how many homeless people are in Reno. “But we do know that the soup kitchens are serving hundreds more meals a day and that we have more people who are homeless than we can remember,” said Jodi Royal-Goodwin, the city’s redevelopment agency director.
Those in the tents have to register and are monitored weekly to see what progress they are making in finding jobs or real housing. They are provided times to take showers in the shelter, and told where to go for food and meals.
Sylvia Flynn, 51, came from northern California but lost a job almost immediately and then her apartment.
Since the cheapest motels here charge upward of $200 a week, Flynn ended up at the Reno women’s shelter, which has only 20 beds and a two-week limit on stays.
Out of a dozen people interviewed in the tent city, six had come to Reno from California or elsewhere over the last year, hoping for casino jobs.
“I figured this would be a great place for a job,” said Max Perez, a 19-year-old from Iowa. He couldn’t find one and ended up taking showers at the men’s shelter and sleeping in a pup tent barely big enough to cover his body.
The casinos are actually starting to lay off employees.
“Sometimes I think we need to put out an ad: ‘No, we don’t have any more jobs than you do,’” Royal-Goodwin said.
The city will shut down the tent city as soon as early October because the tents sit on what will be a parking lot for a complex of shelters and services for homeless people. The complex will include a men’s shelter, a women’s shelter, a family shelter and a resource center.
Reno officials aren’t sure whether the construction will eliminate the need for the tent city. The demand, they say, keeps growing.
http://www.cnbc.com/id/26775940/?for=cnbc
142 - Stu
Same here for me! Ameritrade sucks!!
We have bombed the Taliban, and bombed the Ba’athist, and now we are napalming the middle class.
Unless you call the politicos, don’t bit-ch if this policy gets approved.
Red Tag Sale on SRS going on!
trading on SKF halted?
Anyone up for a game of alliteration? The Bad Bank Bailout Bill? Paulson Plunders People’s Pockets? I’m sure Gary could come up with something much more colorful.
HEHEH,
NO!!!!
Will try to dig up the estimate i saw recently, but it is probably 10+ trillion if the Gov pays the mark-to-Model prices
# HEHEHE Says:
September 19th, 2008 at 8:03 am
“$800 billion fund to purchase so-called failed assets” - Is that anywhere near enough?
And at the end of the day Goldman Sachs remains standing.
It will be interesting to see how a determiantion was made to let Bear go 6 months ago. Than this week let Lehman go, force Merrill to merge, nationalize AIG, and than decide on a massive bailout for everyone else, including Goldman all in less than a week.
The economy is on its way to becoming one large ESOP; hmmmm, a worker’s paradise” perhaps, where we will all be equal, some just more so than others.
Mugabe and Chavez seen entering the NY Fed this morning.
Grim,
Are they the management team hired by Putin and Hu?
… so much for buying gold on a dip.
Showing great personal courage, BO has decided he will not present his economic plan to the public until after Paulson presents his to congress.
I’ve just been informed it is Talk Like A Pirate Day.
Comments past this point must be in pirate-speak or risk being moderated/deleted.
Yar.
do you mean BO as in stinky?
sl
American International Group Inc. (AIG), the troubled insurance giant being taken over by the government, ended up 31% on Thursday and added another 59% premarket. New CEO Edward Liddy said he hopes to keep intact as many of the company’s largest insurance operations as possible in a publicly traded company, after selling assets to pay back a federal loan.
ALL: You can’t have it both ways. We (the taxpayers) are benefitting by the rise in AIG, as we have 80% equity participation. Good for us.
Clotpoll Says:
September 19th, 2008 at 7:47 am
3b (31)-
No sane person should buy a house now. At any price.
I would - as a matter of fact looking at the recent actions ogf the goverment I am going to start putting offers this winter.
Hype-inflation will hit US in a year or two, not just high inflation in 3-4 years as I predicted earlier.
I lived through one hyper-inflation, and I am in a good position to take advantage of this one.
I have to make sure that I like the location and the house and ready to stay in it for 10 years.
I just do not see China propping US dollar much longer. It is not Saudi, not Europe – it is China. They are keeping prices of their goods artificially low. Once they realize that there is no way we are paying them back in similar amounts of goods – good bye dollar.
There is a bit of effect from Saudi but they are not producing anything but oil. So they are as dependant on china as Everyone Else – Imagine the picture:
There is one Factory in Town which produces every consumable good but food.…
Workers there work 10 hours a day and get paid 1/100 of what farmers, Janitors, Plumbers and any other profession in town does. So they raise their prices 100x – what happens next – everyone else of the sudden poorer and start to raise their prices as well.
This is very simplistic but this is what about to happen. Counter argument I heard – when China raises their prices cheap manufacturing will move elsewhere… WHERE??? THERE IS A REASON IT IS IN CHINA.
http://www.cnbc.com/id/24596546
Paulson’s plan press conference
….geez
Ay, matey… do ya mean “BO” as in stinky like me day ole fish in the brig??
sl
Sorry did not see Grims post 164..
Yarrrr
Laughing all the Way Says:
September 19th, 2008 at 9:36 am
anyone want to recommend a good brunch spot in downtown Chicago?
ChiFi, we’ll be in your wonderful city for the first time this weekend. Dinner lined up, Cubs game, bars … we’re pumped.
BOOOOOYA….bring a jacket……
LATW: where are you staying?
Avast. The SS FedCo demands ye allow us to board and rob you blind. Arr.
#164
Matey, the taxpayers are walking the plank while thinking they are strolling on hardwood floors.
Yar
I saw a 401K Capital Preservation Stable Value Fund increase in value today, caused by significant movement from Equity Funds into it. It is the first time since inception that this fund has ever changed it’s value, other then first of the month. Very disturbing.
“ALL: You can’t have it both ways. We (the taxpayers) are benefitting by the rise in AIG, as we have 80% equity participation. Good for us.”
Chi,
How about a deal. I’ll take their dividends and you can have their cds’s. Fair?
“asset relief program” Uh oh. Why do I feel like someone just opened a vein and I’m slowly bleeding out?
Arrr, don’t think of it as shark-infested waters, matey, consider it a large hot tub with living bath toys. Arrrr, now start walking.
Seneca [162],
Are you a day trader?
Bairen,
I agree with your beach house theory. Beach houses used to be small bungalows for a reason. They were temporary especially in flat lands.On the Adriatic or Hawaii where the are highlands it’s a different story. Now they build 10,000 square foot mansions to impress their friends and sociolize the losses.
Confused In NJ Says:
September 19th, 2008 at 10:07 am
I saw a 401K Capital Preservation Stable Value Fund increase in value today, caused by significant movement from Equity Funds into it. It is the first time since inception that this fund has ever changed it’s value, other then first of the month. Very disturbing.
CINJ: I used to run these plans. The recordkeeper loaded bad asset values…..they better have audit review that or else there is a fundamental bias of certain participants over others….call and ask for an explanation. Don’t talk to one of the plebes, go to someone who doesn’t read from a script.
They want to pass this legislation within the week. No good ever came from rushing in to craft complex legislation withoout time to carefully consider, analyze, and modify.
Ahh, Hank says taking over the bad debt will “eliminate it” from the economy.
bairen
Arlington,
Watertown,Waltham,Wellesley,
Needham
Wayland
Sudbury
Waltham and watertown are more mixed middle class towns. all of the other towns are essentially local haughtyville’s. if you want a more upperclass area then put waltham and water town on the bottom of the list.
Also you may have missed one of the biggets ones!!!
Newton.
newton was the #1 safesttown in the US for the last several years. there plenty of private school sin the are , easy access to the train and the public schools are supposed to be pretty good there.
tell me more of what you are looking for and i will rank them for you. I lived in waltham for a while. and you have to pronounce it correctly. waltham (Wall - Thaaaaaam)
# bairen Says:
September 19th, 2008 at 9:35 am
For you ex-Boston residents, what areas around Boston are like Summit and Westfield? Train towns with good schools. Seriously thinking about relocating their next year. I’ve read that Arlington, Watertown, Waltham, Wellesley, and Needham are supposed to be nice Don’t think I want my kids going to public schools in Boston so we’re looking at nearby towns.
Paulson: Hundreds of billions?
Did I hear that correctly?
Ohh, now he is saying ordinary American’s ability to fund college, have jobs, retire, (eat tomorrow, actually I n\made up the last one) depends on bending over and accepting this plan.
When asked if it would cost hundreds of billions or a trillion he said hundreds of billions. Took two questions and split.
This is part of my long-form bio. I would love to be working at this post for the last 2 weeks.
“…He was Head Trader of the largest Non-Financial Corporate Commercial Paper program with outstanding balances exceeding $10B….”
P.S. I be buyin’ em houses with FHA booty (3% downpayment loan), and rest of me money goes to doubloons. that will show them, scurvy dogs!!!
Maybe he meant a thousand billion. Oh wait, matey, that IS a trillion. Doh!
Fenske, 64, said she was sitting alone at Carol’s Restaurant in West Sacramento, California, when a group of elderly women at a nearby table were discussing how much money they had been losing in the financial markets.
She said she heard one woman, whom she didn’t know, complain that she “can’t take any more hits” and told her friends, “I turned everything I had into cash, put it in a lock box and buried it under the shed near the sewer line.”
Bairen: I hate to be blunt about Boston, but it really depends are whether you are white. If you are not white, you have very limited options.
182.chicagofinance
Chi, I tried that, Fidelity says was significant movement of dollars into it from all other funds. Problem is it’s a company custom fund which Fidelity has no direct control of. They are blind to what the fund administrators are in or doing. I will have to rethink it’s safety and possibly create an IRA to control investments directly.
all I can say is that this is like the Iraq war. you can spend all your time and energy assigning blame for past events, or you can recognize that there is a present crisis that must be dealt with. I know it would be very intellectually satisfying for many to see the entire banking system collapse, but that would be small consolation for the very real pain you would feel along with everyone else.
Remember when Ronald Reagan (my political hero, sorry Stu) talked about “welfare queens driving around in Cadillacs?” Hey, it looks like we are going to be paying welfare barrons, kings, and queens to drive around in Rolls’, Bentleys, Jags, Lexuses, etc.
If the congress actually goes along with this, I hope we all at least get a kiss out of it.
#183 kettle1
Thanks ket. We’re looking for a town with a tain line, a downtown, and good schools. My wife wants new construction but think that ain’t going to happen unless she wants a nose bleed price or an awful commute. Maybe a renovated colonial or row house.
Ok, pirate-day over.
#190 chicagofinance
What if spouse is Asian? What options should we focus on the?
I made the mistake of selling the SKF into this mornings free for all, lost 3K. I am NEVER buying the product again.
Ps. it has nothing to do with the product and everything to do with the criminals running the system
Confused In NJ Says:
September 19th, 2008 at 10:17 am
That is not cool. Two issues….I assume since you care, you lost some money out of it. Also, is it a material amount of money?
If yes, then go forth and make trouble. If not, then forget it. If you want to make trouble, go through corporate HR and benefit contacts at your company. The people you will take to at Fidelity have no ability to give you any relief. You have to pressure your internal contacts, so they can take to the people in control at the recordkeeper. If HR blows you off, then go to the guys in finance at your company who can tip off corporate officers…….
Pirate day over? Tell Paulson. He is in full pillage mode.
#192 skeptic: And as such this type of behavior will happen again, and again.
There is absolutely no incentive for people to play by the rules, as they no longer exist.
You can put lipstick (dollar) on MBS, CDO, ARS, CMBS, FN, FRE, etc.
It’s still doo-doo.
Shore Guy Says:
September 19th, 2008 at 10:19 am
Remember when Ronald Reagan (my political hero, sorry Stu) talked about “welfare queens driving around in Cadillacs?” Hey, it looks like we are going to be paying welfare barrons, kings, and queens to drive around in Rolls’, Bentleys, Jags, Lexuses, etc.
If the congress actually goes along with this, I hope we all at least get a kiss out of it.
If you fu*k me at least kiss me?
take to = talk to
“Sept. 19 (Bloomberg) — As it stands, the rest of us will be paying much money over a long time for the greed and bad judgment of those who melted down the economy.
Hundreds of billions of taxpayer dollars are propping up firms that a relative few money lenders and Wall Street wizards ruined.
If that weren’t enough, the crisis is shrinking the money that Americans diligently socked away for retirement, down payments on first homes, college for the kids or this winter’s heating bill. We might as well have opened our windows and tossed out cash.
Beyond crimping living standards around the globe, the crumbling of the U.S. financial system has prompted action radical for a nation devoted to free enterprise. However necessary, it’s nothing short of astounding that the U.S. government essentially nationalized the largest insurance company in the country.”
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_woolner&sid=amhY7f0W2igY
BC [179]
…not a day trader. My mom taught me never to pay retail for anything and my mattress is overstuffed.
http://dealbreaker.com/images/thumbs/sg2008091935979big.php
Al 176,
the manufacturing move is already setup.
it is moving to africa. That is one of the reasons that china has spent so much time and money solidifying its strategic position in africa.
Skep,
The difference is that THIS proposed policy choice is still just a proposal. For the next several days, there is still an opportunity to, through the ordinary give-and-take of the legislative process, to craft legislation that achieves necessary outcomes while protecting the American public AND disincentivizing reckless behavior in the future.
Just because Paulson says “this IS the plan,’ does not meanthat a competent legislative body should accept that plan in toto.
182 shore
Love how these people define “the economy”. They ought to be honest and refer to “my economy”.
When ye go to dinner with these pirates, ye know who be pickin’ up the check, mate.
ahoy matey
LATW: where are you staying?
friend’s place in The Loop, wherever that is.
weather.com says 60-80s which is weather i love.
HEHEHEHEHD - why’d you sell SKF. clot and mike morgan say it is long, you hold it. this dip is just temporary - give it a week or two or a month and it’ll spike up to 125 and beyond
walk the plank
Al,
You got it.
bairen Says:
September 19th, 2008 at 10:21 am
#190 chicagofinance
What if spouse is Asian? What options should we focus on the?
bairen: I’m not an expert on Boston, but I know enough to recommend that you need to be aware of such things. I will say that (1) woman and (2) Asian, probably make the situation as easy as possible under the circumstances.
communist states of america
http://tinyurl.com/42cldt
Maybe a nice dinner too.
(202) “There is absolutely no incentive for people to play by the rules, as they no longer exist.”
Totally agree.
“competent legislative body should accept that plan in toto.”
shore,
Competent and legislative in the same sentence?
They can even say they love us. It would help.
So, all week I worked to diversify my cash, to avoid collapsing money markets, etc.
And now, apparently, money markets are f_cking guaranteed?
In other words, I should now pile into the formerly most risky money market with the highest possible return, since I can only win?
Doesn’t this DESTROY the concept of money markets?
Hearing Paulson speak caused a shiver in me timbers
As long as the government is feeling a little looser with its wallet, how about a guarantee of home values? Like, if you purchase a house, the government will pay you the difference if you sell for less than you bought it. Think of the pressure that would take off everyone.
all the rules have been changed overnight.
do you feel confident investing where the rules change overnight?
Who wants to take a stab at suggesting what Chapter 1 of Damodaran’s Valuation textbook will look like next year?
MJ Says:
September 19th, 2008 at 10:30 am
all the rules have been changed overnight.
do you feel confident investing where the rules change overnight?
MJ: If the rules are baised toward going long?
RichNNJ,
Not sure if you did not see it yesterday but if you have any comps for Hillsdale I would greatly appreciate it. I am looking at this town and want to see if there are any drops in Sold prices from 05/06.
Thanks.
SKF halted?
202; 216
Rules? RULES?!?!!?
The game is Calvinball, maties.
THIS is a perfect example of why I do not want BO as president. At least with a divided government there is a chance to slow and modify bad legislative policy.
I doubt there is any question about whether the Dems will have control over the house and senate after the election. If they hold the WH as well, it would take hours to move something like this from proposal to signed law. At least with divided government it will take about a week, and eventhat is like an ICBM moving through the sky compared to the usual legislative process. It may cause as much damage to the middle class too — we don’t have access to bomb shelters like congress.
#52
“If the Kellys agree to pay Citi $166 a month for 20 years after they’ve already sold their house, what’s to stop them from defaulting? They don’t have anything left Citi can take away.
Citi wouldn’t have a right to put a lien on their new house, if they were to buy again, would they?
Wouldn’t it be the same as defaulting on a credit card?”
Citi could sue them and get a judgment lien on their new house.
Silly prediction:
Market closes lower today once the general public understands what transpired in the last 48 hrs.
C Dawg,
it would obviate the need to do any maintenence, upgrading, landscaping, or anything. It is the husband’s dream. Frees up time for football.
HI Hey Clot - do FHA loans with 3-5% down for people with 760+ FICO (no negatives) still exist, with reasonable rates - lets say 6.5% 30 years fixed??
“Market closes lower today once the general public understands what transpired in the last 48 hrs.”
Where are they going to hear about it? They are busy watching the View, some Ray woman, Wheel of Fortune, reruns of Seinfeld.
MJ Says:
September 19th, 2008 at 10:30 am
all the rules have been changed overnight.
do you feel confident investing where the rules change overnight?
Real Question - will china feel confident??? - who cares about what americans think - we dont have any money - only debt….
#89
Robert Reich:
“The only way Wall Street’s meltdown doesn’t spill over to Main Street is if policymakers begin to pay adequate attention to the people whose wallets really keep the economy going, and who merit more help than the Wall Street tycoons whose carelessness and negligence have put it in such jeopardy.”
I have seen Reich drunkenly dancing and it is highly amusing
“In other words, I should now pile into the formerly most risky money market with the highest possible return, since I can only win?
“Doesn’t this DESTROY the concept of money markets?”
The government is beginning to act like Mother in the Wall.
Risk is king because the ris no risk. Will they start backing games of blackjack now, sure I hit on 19, but the dealer was showing 20 and I had to. Bail me out Paulson. I lost. Make me whole.
10:45 Bush to speak. At least there is still hope the market will regain its senses and decline a bit today.
Orion:
“general public” either has negative net worth and/or invests only via specific mutual funds dictated by their 401k plan.
And they have no idea that ANYTHING happened all week.
LATW: Your friend will know…there are literally tons of converted warehouse restaurants in the Loop/West-Loop that will give you what you need for brunch at $25-$35 per.
Do stop in here for at least a peek if you are an SNL fan from the 1970’s…..
http://www.billygoattavern.com/
I know this sounds bizarre, but you need to go “below the street” to find it.
Barien
here’s my suggest list in descending order. And Chifi does have something of a point on skin color issues
Arlington,
Newton
Wellesley,
Needham
Wayland
Watertown,
Waltham,
Note that arlington does not have its own train stop but you should have a short drive/commute to a train. there is/was a bus route through arlington also.
You feeling on building is correct. Unless you have serious $$$ you are willing to throw around its unlikely to be a realistic option.
commuter rail map
http://www.boston.com/travel/boston/around/MBTA/
I made a bush league mistake. Live and learn. I am more worried about what further they have planned: temporary short ban renewed each month, precious metal confiscation, etc. etc.
“I have seen Reich drunkenly dancing and it is highly amusing”
All I can picture is one of the elfen children from Spinal Tap.
(233) Oprah?
I made a bonehead mistake. Live and learn. I am more worried about what further they have planned: temporary short ban renewed each month, precious metal confiscation, etc. etc.
“And they have no idea that ANYTHING happened all week.”
Wrong. Wrong! WRONG! They know all about A-Rod’s marital problems, which star is sleeping with whom. They know the contents of Brittany’s purse, and whose shoes she wears.
2 minute warning on the Shrub
Old proverb. Better to be thought a fool and be silent than to speak and remove all doubt.
“Larry King: What do you make of this, Suze? Good idea?
Suze Orman: I think it’s a good idea and here’s the real question — what took you so long? Truthfully, why did we have to get to this point for them to create something like a RTC, a resolution trust. This is the solution to come up with months ago when everybody knew that these loans were going to go down. They should have done it. So once again, I’m saying to you why does it take them so long to come up with the solution that they should have come up with a long time ago? I’m grateful they’re coming up with it now.”
Anyone, when was the last time a presdident had to make so many announcements about an economic problem? I have no memory of it in my lifetime.
I’d love to see a news segment tonight where reporters ask the public who Hank Paulson is.
barien,
if i may, i think that an upper/upper middle class married Asian woman wouldnt have a problem unless perhaps you travel in some very elite circles. take with a grain of salt.
i would also say that the issues Chifi and i are mentioning are of a somewhat subtle nature. No one will ask her to leave of other overt actions. Its more of a snobbery attitude. Chifi may have a different experience, i do not know
“2 minute warning on the Shrub”
Time to play prevent defense?
Shore Guy Says:
September 19th, 2008 at 10:45 am
Anyone, when was the last time a presdident had to make so many announcements about an economic problem? I have no memory of it in my lifetime.
Shore: Does this guy even really care? That concern is what bothers me. I don’t think he has any sense of gravity, context or precedence. It is patently insulting to all of us.
laughy (155)-
Oh yeah. Watch it open on Oct. 2 at about $50. Either that, or you can go ahead and sell it now.
Pure insanity. SKF is not even short selling. It is a double-inverse ETF that features CASH SETTLEMENT. It does not close the loop by delivering securities back to a lender.
#209
“there is still an opportunity to, through the ordinary give-and-take of the legislative process, to craft legislation that achieves necessary outcomes while protecting the American public AND disincentivizing reckless behavior in the future.”
agreed, and this should be the goal. my point is that doing nothing is not really an option at this point.
“Like, if you purchase a house, the government will pay you the difference if you sell for less than you bought it.”
[221],
AIG is currently working on a plan to offer gap insurance to anybody buying a house. Everybody wins, AIG will make a fortune, shielding taxpayers and the new homeowner has just bought moral hazard.
I’m from the government and I’m here to help
[142] barien,
Lifelong Bay Stater that I am, let me give my $0.02 (which used to be my LEH stock):
Basically, you picked the top-end “hyphenated” towns (most of them anyway), on what is the Boston main line. Apropos to chi’s comment, except for Waltham, and parts of Watertown and Needham, they have no discernible african-american population.
I take issue with Kettle re: Watertown. It is a very nice town with few sketchy sections, and a small downtown. Also very close to some of the mini-downtowns in Newton. Not on a train line but good bus acess to Cambridge and Boston (via express bus).
There are also good options south and north of the city though not as concentrated or as close-in as the western burbs.
I can give you further guidance in micro detail. Just as with DC, where you work will inform your decision. Get my email from Grim or Kettle and we can talk.
[142]
P.S. Arlington is great. Mom, sis and her family live there and love it.
Maybe I should work on a plan whereby I become too big to fail.
“precarious state of the financial system,” he says. Finally some straight talk from bush.
“Unprecedented challenges….. unprecedented actions” (Da! Tavarsh.)
He is going to grease us. I wonder if we need to squeel like pigs now.
He is going to “persecute” (Apparently prosecution is no longer sufficient. Clot must have gotten his ear) financial evil doers.
“Putting significant amounts of taxpayer dollars on the line.. not without risk…”
“These are risks America cannot afford not to take”
“Taking action to restore confidence in America’s financial markets” (Please, please, please, keep buying treasury notes).
He just listed about 10 major failures that happened on his watch.
No questions allowed.
The three Great lies:
This won’t hurt a bit;
Yes, I will respect youin the morning; and,
I’m from the government and I’m here to help
old news: 50.5 for president! He’s more clueless than Ohdrama! Damn terrorists and commies!
The Securities and Exchange Commission on Friday issued a temporary ban on short sales of 799 financial stocks, a move against traders who have sought to profit from the financial crisis by betting against bank shares.
Jill,
Are you again’ us or for us?
Nom de Geurre
“I take issue with Kettle re: Watertown. It is a very nice town ”
Agree. It also shows up in one of William Billings’s better songs from the revolutionary period (”By the rivers of Watertown we sat down and wept…”).
And bargains abound:
http://www.realtor.com/realestate/little+falls+twp-nj-07424-1092298271/
bairen– on Boston, there is a big variety of towns you could look at, depending on whether you want semi-urban, more rural or close to the water. as others have mentioned, there are also cultural issues: north shore and west of boston, you are going to run into much more old money WASP people; south of Boston you are going to run into more Irish and Italians. Jews are clustered in a few areas. Also, the length of time you are willing to spend commuting is an issue. It is possible to have a very short commute if you are fine with living in more congested areas like Newton, Arlington or Belmont, but if you are willing to go 45 minutes out, you can have a horse in Concord
(256) MJ
Eat fevereshly, become morbidly obese, then, sue somebody.
We’re foe us! Can’t be all doom and gloom since 50.5 and Ohdrama have all the answers.
Nom,
there is nothing wrong with watertown, i like it, but is not in the same league with arlington, newton an welsley….
Trading halted on SKF
Barien, Nom
watertown Mass is to Morristown NJ as Welsley Mass is to mendham NJ
gary: 262
are they kidding? that’s a burn down at that price
On an OT note, is anyone here familiar with Savannah? As in; interesting things to see and do if you’re there? I might be making a trip down in a few weeks.
skep (192)-
The whole banking system is going to collapse, anyway.
The gubmint is now guarnateeing that it will be 10x worse.
on another note, i loved hanging out at walden pond on a nice weekend. And Nom, the foot path from arlington to cambridge was nice also.
max [269],
This is Northern NJ, close to Manhatten. I’ve been told it’s very competitive here and that if one can’t afford to buy here, perhaps one should look out of state. They’re not making anymore land, you know. [sarcasm off]
I’m not very familiar with NJ, but I think Wellesley is in a diff’t category than the other towns Bairen mentioned. It is definitely outside of the orbit of Boston proper, whereas Newton, Arlington and Watertown are to me sort of semi-urban extensions of Boston. If you really like Wellesley, it seems to me you should look at towns like Natick, Weston, Dover, Sherborn
Al (232)-
All day long. Too bad that yesterday, that 6.5% rate was about 5.75%.
Thank Hank for that.
“The whole banking system is going to collapse, anyway.”
ok, but even if this is true, wouldn’t you want there to be an orderly unwind vs. an overnight collapse?
I guess I was lucky to get out of the SKF. I can now invest in some banks as fantasy acounting appears to be the next step in the rescue plan. When are they going to go door to door confiscating precious metals?
Should we practice swallowing condoms full of gold coins?
Dang grim unmoderate 279. What did I do?
As much as i would love to gamble in the current market I am not willing to take such risks as i am not even close to playing on the same field as some of the posters on this blog. I think the risk level has gone to defcon 1. This is the time for kettle to pull in assets and hold on tight. Bets of luck to the gamblers! :)
[270]
Not familiar with Mendham. But I have a hard time comparing Morristown to Wellesley. Guess I don’t know Morristown well enough.
I did live in Watertown for awhile and have family there. It is like Brigadoon in that it is better to be north of Mt. Auburn Avenue, and where I live in Brigadoon (north) looks to me a lot like Watertown. Admittedly, its downtown isn’t as tony or large as Brigadoon (though it could be—been quite a few years since I was there).
Arlington is great, all the comfort of a Summit, closer in and without the attitude. Wellesley, Winchester, and Lexington are comparable but much more ‘tude (especially Winchester).
North, one place to consider is Reading. Good sized downtown, train access, suburban feel, okay schools. But if you move there, I will have to hate you—Reading is our archrival. South, consider Braintree for Red line access, and if you really want tony living and can afford it, the gold coast of Hingham, Scituate or Duxbury (”Deluxe-bury” to locals).
Skeptic,
I think those towns might be too far out for barien, just a guess. but i agree with your overall assessment.
Welsley is similar to mendham while Arlington is similar to summit or westfield
Cohasset is also nice on the South Shore
“But I have a hard time comparing Morristown to Wellesley.”
Nom,
Akin to comparing Hackensack to Alpine.
[276] skep,
If you are gonna send barien to the hyphenated towns, better give him the numbers for the local volvo and land rover dealers.
And the plastic surgeon so your nose can be pointed upward without undue effort.
Vodka (278)-
Up until last night, I was an investor. When I woke up this morning, the gubmint had re-classified me as a terroist, gambler and speculator.
Of course, trading has now been suspended in my #1 vehicle. They are probably putting all its particpants on a watchlist (note to gubmint: don’t bother cross-checking my name; I’m sure you already have an open dossier on me).
So, terrorist, gambler and speculator I will be now.
Matey.
[284] BC
Sorry, lost on me. I’ll have to take your word for it. Never been anywhere in PBC and still don’t know what is 3 miles beyond my back fence.
the thing is, commute times are generally shorter in mass. if you are used to commuting to manhattan from summit and are willing to go a similar distance in mass, you are going to have a ton of options in all directions
Did anyone see the three stooges standing there while the pres. was speaking.
Cox, Hank and Ben should be left to Clot’s mercy.
and we should put Bush in Guantanamo Bay and introduce him to waterboarding and torture USA style.
[283] skep,
true that. Mrs. Deplume has a nice pic of me tumbling across the green, a la Jack Nicholson.
(this was right after they filmed Witches of Eastwick there).
(I was living in Quincy when I met the fair Mrs. Deplume, and I tell folks that the only reason she dated me was because I knew where the Talbots factory outlet was located in Hingham.)
Grim, I’m getting off the Bay State RE Report now. Promise. Back to NJ
“we should put Bush in Guantanamo Bay and introduce him to waterboarding”
Pasing on the recomendation to do this to bush, I suspect that were he ever waterboarded he would instantly conclude IT IS torture.
Clot,285
While the housing was going up and we were in a Bull market I was a RE investor when shit hit the fan and people got stuck holding the bag that I helped pass around then I was classified as a Speculator and a gambler.
Welcome to my world.
nom,
i think you misunderstood me.
I was suggesting watertown is similar to morristown, but summit is probably a better example
and welsley is similar to mendham (rural wealthy).
all personal experience of course and i see your point about the watertown brigadoon example. It all depends on which part of the town you are in.
Sue Them, Jail Them, Make Them Pay for Meltdown: Ann Woolner
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_woolner&sid=amhY7f0W2igY
ProShares Announcement
Friday September 19, 11:25 am ET
BETHESDA, Md.–(BUSINESS WIRE)–Due to the emergency action announced by the Securities and Exchange Commission on September 18, 2008, temporarily prohibiting short sales of shares of certain financial companies, Short Financials ProShares (SEF) and UltraShort Financials ProShares (SKF) are not expected to accept orders from Authorized Participants to create shares until further notice. Unless notified otherwise, shares will be available for redemption by Authorized Participants as normal. The shares of these ProShares are expected to trade in the financial markets today, but may trade at prices that are not in line with their intraday indicative values.
um. I thought we lived in a capitalist society where we could invest in the best place to put our money?
um. no.
sl
time to develop a taste for vegemite.
forget pirate, let’s all talk Aussie, mate.
sl
BTW, I noticed this last night during that press conference, what is the deal with Paulson’s one pinky finger bending the wrong way.
take a look
http://finance.yahoo.com/echarts?s=^GSPC#chart1:symbol=^gspc;range=1d;indicator=volume;charttype=line;crosshair=cross;ohlcvalues=1;logscale=off;source=undefined
Volume goes from trillions to 0 , back and forth in very short spurts. is this normal activity???? or is something going on????
“better give him the numbers for the local volvo and land rover dealers.
And the plastic surgeon so your nose can be pointed upward without undue effort.”
Nom– yes, north and west of boston you need a green audi/volvo/land rover, a lifetime subscription to Organic Gardening and a list of your ancestors who fought at Lexington & Concord.
south of boston, it helps to be surburnt, Irish and fond of smashing pint glasses across the face of “hatas”
another link to same chart
http://tinyurl.com/4ol5qy
“um. I thought we lived in a capitalist society where we could invest in the best place to put our money?”
sl,
http://en.wikipedia.org/wiki/Das_Kapital
233 Shore - Unless the Ds get to 60 Senate seats and can stop filibusters, the R’s can obstruct anything they want. They have been using this tool frequently, and I expect it’s use to be even higher if they are not controlling the WH as well.
Why are all the rich people in favor of bailouts while the middleclass and poor complain through blogs like this. The idea is you should strive to become rich and stay rich forever.
Kettle1 Says:
and welsley is similar to mendham (rural wealthy).
Isn’t Wellesley big with a very large and proper downtown. Many of the Boston area downtown suburbs are similar to Madison. Except the train line ride is about 30 minutes closer in. So all these towns are 30 minutes out as opposed to 60 minutes….yes?
I believe today is the mother of all bailout Fridays. No mas.
And so, gone fishing.
I though only the casinos were rigged. OOPS, forgot.
Wow. DOW 11,300. That’s the best we could do?
Was away giving a tour of our facility to a prospective client.
BC Bob, 309
…so.. how do kangaroo burgers taste anyway?
[tongue planted firmly in cheek]
sl
CHifi,
I dont know the train times very well, didnt use them often.
Welsley does have a large and very nice downtown. But eh rest of the town is fairly spreadout, perhaps more similar to bernardsville.
in toronto for last few days. i like the city, not sure abt loving it though.
well, so much for free markets. qtn: when was RTC created last time? i am guessing bottom in housing may be 2 or 3 years from creation of RTC.
It really is pretty amazing, by the end of the day this may dwindle down to under a 2% pop.
HE (305)-
Isn’t that one of the marks of the Antichrist?
What drives me insane is that the average joe has little to no clue what is going besides some “market turmoil”. We are all about to be sold to america’s creditors as modern day serfs, as paulson and friends transfer the massive banking loses to the backs of the american people.
PEOPLE SHOULD BE STORMING THE CAPITAL BUILDING IN PROTEST!
hehehe:
I was preparing gator for the worst case scenario. I told her SRS at 50. Happy to see we are at 75. Sorry I didn’t buy at 65, but I’m too risk averse. The mother of all bailouts and the market is behaving rationally. Never expected this for one minute. More importantly, I’m sorry I missed pirate-speak hour.
Clot,
It may well be. They must be using pancake makeup on the 666 on his skull.
Quote of the day:
“The complexity of this era of credit liquidation,” as Robert Smitley wrote of the Great Depression in ’30s America , “is far too great for the mob mind to grasp. It is hardly possible for them to see the picture wherein about $700 billion dollars of physical and intangible wealth is attempting to be turned into about $5 billion dollars of money.”
“Sept. 19 (Bloomberg) — John Bogle, who created the $106 billion Vanguard 500 Index Fund in 1976, said the U.S. government is “punch drunk” with proposals to rescue the financial system.”
“We’re playing a game of casino capitalism, interfering with the way the market is working,” Bogle, 79, said in a telephone interview today from Valley Forge, Pennsylvania. “The government seems punch drunk. It doesn’t seem systematic.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahUc_l6j8xPY&refer=home
Quote updated for 2008
“The complexity of this era of credit liquidation,is far too great for the mob mind to grasp. It is hardly possible for them to see the picture wherein about $700 trillion dollars of physical and intangible wealth is attempting to be turned into about $5 trillion dollars of money.”
#321
I am telling you..the average Joe in the the USA are the dumbest people in the whole world. They deserve to be whipped like slaves and be treated like one. All they are concerned are their evening shows, a bag of chips and fishing.
If this happened in other countries (ie India for example), there will be massive protests through out the country.
Pretty soon we will be bailing out the autoindustry and homebuilding industry and after that healthcare.
hehe
Stu 322
ProShares Announcement
Friday September 19, 11:25 am ET
BETHESDA, Md.–(BUSINESS WIRE)–Due to the emergency action announced by the Securities and Exchange Commission on September 18, 2008, temporarily prohibiting short sales of shares of certain financial companies, Short Financials ProShares (SEF) and UltraShort Financials ProShares (SKF) are not expected to accept orders from Authorized Participants to create shares until further notice. Unless notified otherwise, shares will be available for redemption by Authorized Participants as normal. The shares of these ProShares are expected to trade in the financial markets today, but may trade at prices that are not in line with their intraday indicative values.
Zack…
Exactamundo.
Kettle1 Says:
September 19th, 2008 at 11:15 am
As much as i would love to gamble in the current market I am not willing to take such risks as i am not even close to playing on the same field as some of the posters on this blog. I think the risk level has gone to deacon 1. This is the time for kettle to pull in assets and hold on tight. Bets of luck to the gamblers! :)
Disclaimer: I did not play the markets… I had my 401k which I did not touch - it is little anyways. So I am not profiting from this situation in any way, and probably losing a lot long term, but so all of us who are not Bankers and CEO’s
Couple people at work were bragging this Wednesday about their short puts - some retailer options - there were positioned to double their money in a month - I told the guy - If you can double your money - sell now!!! Take you profits, re-invest other half. - my words literally at about 3pm Wednesday.
His answer was quite condescending: -
You do not understand - he said - , this is not how you make money…I am going to wait till Monday morning - afternoon Friday - historically it is when $hit hit the fan, But next week I am out.
I tried not to smile too hard when I met hit in a hallway this morning. His options – 0 value. Expire – next Wednesday.
Will he get his bail-out???
Rumour is Goldman might be Merril which merged with BOA and the new name is
GoldmanLynchedAmerica
Thanks still_looking. I can’t wait to see the ProShares lawsuit.
I think I have a while before commercial real estate reits end up on the fixed market (can’t short) list.
Let’s all pray that Paulson’s shenanigans do not cause China to stop buying our debt. If so, game over.
Al,
I am out of these markets. Been out for three years. I did not play on the downward either.
I certainly don’t play in markets where the rules change overnight, which is what we have since March.
SKF trading again. Time to double down.
333 Stu
Call our lawyer while you’re at it !
If NJ can sue, so can we!
Clot,
You crazy SOB
I googled for paulsons plan in all of this and this is what pops up…
http://tinyurl.com/3e9drf
CNBC -
GE will be on the no short-sale list
Clotpoll Says:
September 19th, 2008 at 11:53 am
HE (305)- Isn’t that one of the marks of the Antichrist?
clot: On the uptown NYC A train in 1991, I was given a leaflet by a Korean gentlement that flatly stated that the appearance of the UPC symbol (Uniform Product Code?) was one of a series of events that would lead up to the appearance of the Anti-Christ.
I was so inspired that I subsequently created a Mathematical Proof that my former co-worker was the Anti-Christ. I distributed it to my co-workers and I think it helped me attain my first professional promotion of my career. The proof still hangs above me to my left on a corkboard.
I listened to Cramer and Sold my 25K shares of AIG at $4 this morning. Walked away with $30K. I love this country. I love Cramerica.
The day the Fed, Treasury, SEC and maybe Congress blew the doors off the USA;
http://www.youtube.com/watch?v=vZszDTZKs_g&feature=related
Ket,
Unless there is something like a “Million Serfs March” where we, the newly-created serfs of America, show up en mass in DC, I doubt the policy makers will take into account the long view for the middle class.
Right now it is, “We need to save the ruling class so they can employ the rest of you. So shut up and take it.”
Shore Guy,
You need to take a refresher course in math (post #193).
It is “10 Hundred billion”. It goes “20 Hundred billion”, “30 Hundred billion” till “90 Hundred billion”.
Next Comes “100 Hundred billion”
No trillions or beyond. Everything only in billions.
I wish “a few dollars” would have been more apt!
Remember, gold just sits there and does nothing;
“US Government to secure mortgage market with gold reserves”
“President Bush approved the use of existing authorities by Treasury secretary Hank Paulson to make available as necessary the assets of the Exchange Stabilisation Fund for up to $50 billion to buy more illiquid mortgage assets.”
“The ESF was created after the Great Depression and uses the US gold reserve as collateral for financial stability.”
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=173208
Gator,
You are correct. But, I will not be shocked to see your party with 60 votes in the Senate, and I am counting Lieberman as an R.
#343 - Unless there is something like a “Million Serfs March” where we are
Would this even work?
Seriously, we saw Million Person marches against the war in Iraq and we know what that outcome was. The media largely ignored it, Congress completely ignored it and eventually everyone gave up.
The only way people will push back is if the boot is literally on their throats. Even then some will attempt to justify it.
It’s so completely sad.
You can send a zillion dolts to DC or the CEO of each Fortune 100 company. Where do you place your bet?
thats it,
we need McC in office, he has the experience to deal with this mess…
http://static1.firedoglake.com/28/files//2008/09/mccainkeating.pdf
Thanks Nom and Kettle1,
just sent you guys an email.
thats it,
we need McC in office, he has the experience to deal with this mess…
http://tiny.cc/yUcyw
Tosh,
Look, there is a BIG GAME on this weekend and it sure looks good on this 50″ plasma. Besides, do you know how much gas costs to drive to DC? Politics doesn’t matter anyway, I heard so in the grocery store last night.
The average dolts still believes thi sis a free country.
Jim Rogers could have been on to something.
Time to store up ammo.
#351 - You make me want to cry that’s so accurate.
Oh, I dont know, if suddenly masses of middle-class voters, the ones who actually show up to vote, were to descend on the streets of DC just weeks before an election and were not afraid to be a bit unruly it would make an impression.
347 tosh
You just made me weep.
Come join me for a beer
Anyone who votes in favor of this madness should be voted out. Regardless of party, I plan on voting against people who vote for this, and to donate to their challengers next year, should they win this year.
204.chicagofinance Says:
September 19th, 2008 at 10:22 am
Confused In NJ Says:
September 19th, 2008 at 10:17 am
That is not cool. Two issues….I assume since you care, you lost some money out of it. Also, is it a material amount of money?
If yes, then go forth and make trouble. If not, then forget it. If you want to make trouble, go through corporate HR and benefit contacts at your company. The people you will take to at Fidelity have no ability to give you any relief. You have to pressure your internal contacts, so they can take to the people in control at the recordkeeper. If HR blows you off, then go to the guys in finance at your company who can tip off corporate officers…….
Actually I gained money, but the fund is not supposed to operate that way which is disconcerting. Unfortunately the company has created a firewall between retirees and employees. You can only go through contractors like Fidelity. This causes me to think i may have to migrate money out.
#356 - Yes, but it will have to be a figurative one as I don’t drink.
/sniff
Taxpayer’s taking it on the chin!!!!
So far this year, the federal government has put up nearly $30 billion to avert a major financial default by the investment bank Bear Stearns; committed to investing up to as much as $200 billion in preferred stock of the loss-plagued finance giants Fannie Mae and Freddie Mac and at least $5 billion in their mortgage securities; and agreed to provide an emergency loan of $85 billion to American International Group Inc. in return for an ownership stake of as much as 80 percent in the stricken insurance giant.
And god knows how much more with this new plan!!!
WE THE MIDDLE and WORKING CLASS are DOOMED!!!
Tried to cash a NJ property tax rebate at Bank of America (BOA) today. They have a new policy (1 month old) which prevented me from cashing the check. They require both parties present, with four forms of identification which must include a BOA form like a BOA debit card. Doesn’t matter how much money you have with them. Other banks credit or debit cards not acceptable.
“Anyone who votes in favor of this madness should be voted out”
- I think everyone except Ron Paul and Senator Bunning will vote for this.
Shore Guy Says:
September 19th, 2008 at 1:03 pm
Oh, I dont know, if suddenly masses of middle-class voters, the ones who actually show up to vote, were to descend on the streets of DC just weeks before an election and were not afraid to be a bit unruly it would make an impression.
Will not happen Untill they will loose electricity and cable in their houses and bars. We can’t miss next American Idol!!!
Is this what Rome felt like in the days of Theodosius?
The average joe cuased this problem which is why they are not upset. Dolts were cold called by mortgage brokers and took subprime loans and started flipping houses and go on wild vacations, buying hogs and fancy cars and going out to nice dinners in expensive clothes for a eight year ride of their life. Now that they squandered the money they are walking away from their underwater flips going back to their boring broke lives. To them living like a king and a millionaire for eight years was great even if they have to be a peasant again.
“Taxpayer’s taking it on the chin!!!!”
We should be so lucky. Chin, indeed. Think harder and you will realize where you are taking it. Weeee Weeeee Weeee.
We N.J. residents should feel privileged!! Not only do we live in biggest welfare state…but also it turns out biggest welfare country!!!! Hand outs for everyone!!!
The Fan/Fred mtg nationalization scheme was supposed to make mtg. rates decline thereby helping the housing mkt. Than we the government conducts the nationalization of AIG, which will cost billions.
And now we have the mother of all bailouts with premliminary numbers being 1 trillion and north. This of course will dramatically increase our borrowing costs from our creditiors,as they will demand higher borrowing rates.
This of course will send rates higher on mtgs, coupled with much tighter lending standards.
How is this going to help the housing mkt.,which was Klink’s original justification for bailing out Fred/Fan?
IS he throwing the houisng mkt. under the bus in an attempt to save the IB”S?
John,
I think you nailed it.
To 366,
yep..I know…I didn’t want to go there…thought of it causes too much stress!!!
Biggest of the Biggest!!!!!!!!!!
Take THAT creditor countries.
357 shore
I’m on board
Anyone up for a mini GTG on the evening of the 6th? Maybe by Montclair or Edison?
Can we get Ned Beatty to come back and take one for the team (U.S. tax payer)???
Shoreguy: I would love to do a Montclair GTG and would offer my place up, but the family will be taking a cruise to Mexico in early October thanks to our NCL credit card. Depending on economic conditions, we may not return home.
Can someone please put the phrase “Apres moi, le deluge” on GWB’s teleprompter and see if he says it?
Reuters
Citigroup considering bid for WaMu: report
Sounds nice. Enjoy. Sail from? Since youhave children, are you booking in one of the multi-bedroom suites? We love them. The kids get their space, we get ours.
I hear Ron Paul has introduced a bill changing the National Anthem from “The Star Spangled Banner” to “Dueling Banjoes”.
Weeeeee, weeeeeee, weeeeee
284 HeHeHe…”Should we practice swallowing condoms full of gold coins?”
Is that a roll of gold coins in your pocket, or are you just happy to see me?
“Can someone please put the phrase “Apres moi, le deluge” on GWB’s teleprompter and see if he says it?”
GWB: “As a wise man once said, “After me Appricots in the garrage. What I am trying to say is, after I am finished with my hard, hard work, there will be pleanty of rain, and dried fruit for everyone.”
I wonder what he thinks about being, in the interest of cost cutting, the first president to lose secret service protection 10 years after leaving office. Between al Qaeda, and everyone else he has pissed off, it would tend to make one uneasy, one would think.
378 Shore - We are going to Mexico. Just a standard room on this trip. We are saving our cruise dollars to do a nice trip to the Baltics hopefully next year.
If y’all do get together on the 6th, drink a few for Stu. It’s his birthday!
I say we keep the party going….let’s all right in Jeb Bush on the ballot this November!!!
Opps, I meant “write in”..
From the finance neophyte:
WTF is going on? Inflation? Deflation? Mass panic?
Opps, I meant “write in” jeb…
Best reason to vote for M is his use of Ambien.
Wish the rest of the gov’t would just sleep through these crises rather than “fixing” them.
Nah, we earn about $2,000 a year in NCL rewards by charging everything we purchase (besides gas, groceries, drugs) to the card. We get 3% back towards a cruise. The other products we get 5% back in Citi Thankyou points good 1 for 1 for airline tickets. We book the cheapest obstructed view outside room and use free upgrade certificates to unblock the obstruction. We are leaving out of Los Angeles and are doing the typicial Cabo/Vallarta/Ixtapa round trip itinerary. We have cruised about 20 times so we’ve seen everything cruiseable in North America. We only have one kid, Ryan, who is 3-years old. He’ll stay with us in the one room on the pullout. He loves flying and cruising so we all look forward to it.
#376 - Apres moi, le deluge
How fitting.
I think he would just squint at it in a puzzled fashion for about 3 minutes and say “nukular”.
oops, I meant oops.
385 ’soosh
Yes
That picture cannot be real…
Their house survived Ike, but it’s the only one left
http://www.cnn.com/2008/US/09/18/ike.last.house.standing/index.html
Shore - Regarding Lieberman, if the D’s had a pair they would kick him to the curb the day after the election.
I have long since realized that they don’t, so I expect him to be an annoyance for the next 4 years until the moderates in CT can take action on their buyer’s remorse. Hopefully he’ll be less of one once he’s no longer the 51st vote.
I hope O and the rest of the establishment D’s have learned their lesson for not giving any meaningful help to Ned Lamont after the primaries.
Gator,
We cancelled the baltic this summer, given the health of an older relative. If you go on NCL, look into the suites, the ones with 2 bedrooms, 2 bath rooms, and a combo living/dining area. They come with butler service and the master bedroom has a killer bathroom, with a shower and whirlpool tub that each overlook the sea.
We had a much bigger suite on a Celebrity Ship (something like 1,200 square feet, full-sized living room with every electronic gadget, yards and yards of floor to cieling windows, fullsized dining room, full kitchen, a master bathroom beyond compare, and a huge private balcony with a hot tub, yadda yadda) and actually preferred the smaller one we had on an NCL ship the time before that. The next time we go, it will be in one of those.
State St will not allow anyone to add to an SKF position. I can either hold on to what I have or redeem.
Ain’t life grand?
This bailout will prevent any potential major crash and burn of housing, partic in the northeast.
Because another bailout will follow, and another and another. Paulson and co are in so deep, the govs involvement will just keep spirally. Forget about swallowing the spider to catch the fly, we are already up to swallowing the T Rex to catch the woolly mammoth (yeah yeah diff eras, I know.
Where can I get my “No Banker Left Behind” T-shirt?
Young buck,
I posted that picture and some others from the area a day or two or three ago. One gets to a certain age and…umm, what was I saying. It is amazing the hit they took. If anyone rebuilds anything larger than a 1,200 sqft cottage, they are nuts.
#395 - Clot - I saw the same posted over at CalculatedRisk. Is this from an influx of people expecting to be able to short again Oct 3?
Ray,
THAT is the post of the week.
Clot:
There are other short investment vehicles besides the financials. Quite honestly, I do not think they are a safe place to play. With the precedent set over the last 5 months I would not be short them. SKF is now a bet that the US will fall before our banks do. Add to it the fact that shorting financials is now impossible. Most likely scenario IMO, banks and the country remained deadlocked for the foreseeable future. Plenty of consumer discretionary plays for those who want to bet on doom.
#396 This bailout will prevent any potential major crash and burn of housing, partic in the northeast.
That makes no sense. If rates rise to 7.50/8% that killes the 500K POS Cape.
I heard a metaphor for the sub-prime meltdown that I thought I would share with you guys because it hits so close to home. I don’t know if the guy I heard it from was the originator but here goes:
The sub-prime credit crisis goes a little something like this. The bank gives you money and in return it gets a piece of paper. That paper has some value depending on you, your house, and terms of your mortgage. The bank takes the paper and puts it in a blender with a bunch of other paper and turns it on liquify.
Whenever the bank needs cash they reach into the blender and pull out some of this paper and spend it. Eventually you either have to start putting more paper into the blender or start reaching farther in to get anything out of the blender.
The banks that are failing are reaching deep into their blenders and all they are getting back are mutilated bloody fingers.
The blenders are empty.
“if the D’s had a pair they would kick him to the curb the day after the election.”
Yup.
Nicholas,
I think my bandaid analogy was better.
Meltzer Calls Paulson Plan `Social Democracy at Its Worst’
By Bob Willis
Sept. 19 (Bloomberg) — Federal Reserve historian Allan Meltzer said U.S. government efforts to cleanse financial institutions of troubled loans shouldn’t be financed by taxpayers.
“I certainly don’t think this is the taxpayers’ problem,” said Meltzer, a professor of political economy at Carnegie Mellon University in Pittsburgh. “This is not a place exactly with a great big surplus that can afford to do these things. This is social democracy at its worst.”
The 80-year-old economist spoke in an interview after Treasury Secretary Henry Paulson said in Washington that proposed measures to rid banks of troubled assets and shore up financial institutions would cost “hundreds of billions.”
“If they remove financial losses from the financial institution,” the government should ensure that “the financial company will still owe the money,” he said. “Civilized countries like Chile do that.”
Paulson told a press conference that economic policy makers would meet with congressional leaders over the weekend to prepare a program to remove “illiquid assets” from banks’ books, while “including features that protect the taxpayer to the maximum extent possible.”
The proposal is a recognition that earlier efforts failed to revive financial and housing markets. The government took over American International Group Inc., Fannie Mae and Freddie Mac in the past 12 days, a period when Lehman Brothers Holdings Inc. filed for bankruptcy and Americans pulled a record $89 billion from money-market funds.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.gV9UeS4L0&refer=home
I still vote for the Ned Beaty analogy.
Has anyone seen Angelo Mazilo lately?
Gator/Stu
Are you going to spend a few days in LA first? Or even fly into SFo and drive down?
We are flying into LA on Thurs 10/2. We’re going to celebrate Stu’s birthday with his west coast friends. Taking Lil gator to the Peterson Car Museum, the tar pits and maybe out to the Santa Monica pier. Ship leaves on 10/4.
In the Pre-Lil Gator days, Stu and I used to be Celebrity devotees. I still miss the service and the cuisine on that line. NCL’s affinity card offers outstanding value (3% towards cruisefare on all non-NCL purchases 4% back on NCL) and allows us to bank $2,000/year towards travel. The card does not have any annual fee either. We also like NCL’s freestyle for travelling with the short people.
…watching CNBC’s wrapup of the week right now, and this crisis has its own theme song just like when we went into Kuwait, Iraq… only now, we are going into the taxpayer wallet and the overture is more ominous.
Gonna do a few days in LA. I lived there for almost 2 years before marrying the Gator and have a lot of friends to see. Since the economy closed our LA print plant, I don’t get out there much these days.
to #408
yeah…he’s in Paulson’s waiting room……apparently hoping to discuss a FED led WAMU bailout..where he gets to keep his all his stock options.
#411 - this crisis has its own theme song
Was it something by Tom Waits?
I wouldn’t mind if it was at least something tasteful.
#411 - this crisis has its own theme song
Does it sound like a variation on ‘taps’?
Well, for what it is worth, I just got off the phone with a member of the President’s Council of Economic Advisors. He described letting Lehman go under as “an experiment and not a very successful one.”
The White House/treasury percieved that the system was going to collapse unless they did this.
Mmmmm….love the smell of bailout in the morning…
Now, to get back to focus of this blog, how will this bailout affect the housing market in NJ? Does this speed up when we will hit bottom?
lisoosh Says:
September 19th, 2008 at 1:35 pm
From the finance neophyte:
WTF is going on? Inflation? Deflation? Mass panic?
Government is going on… In other words - if you are IN, you WIN, If you are OUT - you lose.
Politicians and their friends win.
What happens when government takes Take a 100$ from 10000 people??? - Banker gets to keep his Yacht
Look at my post 331 - do you think any of thouse two guys will touch options ever again???
I honestly do nto know how anybody going to invest and trust stock market from now on???
You own Stocks - you Fukked, now you just have to own senior debt, - once we buy senior debt - they will come up with the other way to steal your money from you.
Thouse who make rules win.
Imus Says:
September 19th, 2008 at 2:16 pm
Mmmmm….love the smell of bailout in the morning…
Now, to get back to focus of this blog, how will this bailout affect the housing market in NJ? Does this speed up when we will hit bottom?
.
My crystall ball:
I fail to see a short term effect on housing… I think if something it will be a bit harder to get loans untill the dust settles. (0-6month time frame))
But high inflation will kick in and support nominal prices. (1-2 year timeframe)
389 tosh
Lol
Now that Treasury has guaranteed the money market funds why would anyone keep their savings at a Bank where you’re only covered up to $100K.
I can see a massive commercial bank run to flee to MM fund.
Confused In NJ Says:
September 19th, 2008 at 1:06 pm
You can only go through contractors like Fidelity. This causes me to think i may have to migrate money out.
Confused: They are doing you a favor by inadvertently signaling that they don’t want you.
I agree with AL
in the very near term we will see little change in housing as the average joe is only vaguely aware of the situation.
“I can see a massive commercial bank run to flee to MM fund.”
The masses are not that smart. I’m thinking Tempur-pedic or Sealy might be a good long as everyone will need to replace their mattresses more frequently due to the additional weight.
#419 Higher inflation, coupled with higher interest rates, and tighter lending requirements. For arguements sake, i cannot see how the 500k Pos Cape can remain 500k with an 8% interest rate.
Anyone have good info for the estimates of senior unsecured debt recovery for Lehman? On Monday I was hearing 60%-area on Bloomberg, but now I can’t find anything.
#423 kettle:in the very near term we will see little change in housing as the average joe is only vaguely aware of the situation.
And than what? The slow asking price declines that I am finally seeing in my town, will now reverse course?
“watching CNBC’s wrapup of the week right now, and this crisis has its own theme song just like when we went into Kuwait, Iraq… only now, we are going into the taxpayer wallet and the overture is more ominous.”
Is it a requiem?
Imus [417],
You have already witnessed the changes here in North Jersey. As I predicted, prices would remain flat to a slight decline since the peak. It will remain this way for another 18 to 24 months followed by an annual 3% to 4% appreciation for the forseeable future.
#429 gary:will remain this way for another 18 to 24 months followed by an annual 3% to 4% appreciation for the forseeable future.
Based on what? you do know they declined substanially before, I lived through that one. Still cannot believe that this one will be any different.
In fact it will IMO be worse. Away from this bailout the econmic fundamentals are still dismal.
chicagofinance Says:
September 19th, 2008 at 2:30 pm
Anyone have good info for the estimates of senior unsecured debt recovery for Lehman? On Monday I was hearing 60%-area on Bloomberg, but now I can’t find anything.
OK - now I am seeing 50%
Ket/Clot/Grim,
I am beginning to think that until the folks who boutght pre-run-up die, there will be little budging.
It is like the frog in a pan of water story, the temperature keeps getting more and more dangerous to the frog’s life but it fails to perceive the change in its circumstances. As long as people have the ability to pay the bills, they do not care if housing takes up 80% of their after-tax income. If they can’t go on vacation, ok. If they can’t buy a new car, ok. I have my house and cable tv — may not have a pension, or the money to deal with an emergency — but I am ok.
“It will remain this way for another 18 to 24 months followed by an annual 3% to 4% appreciation for the forseeable future.”
Gary - you may be tall, dark and handsome, but you’re horribly wrong.
It will get far worse for another 18 - 36 months, followed by stagnation for the forseeeable future.
One for the wall
http://tinyurl.com/4vrkla
Bailout Day
Figures that Imus shows up for the first time in months.
#4342 shore: I think they will be more concerned about the vacation and the car.
408 gary
Yes.
Maybe Montclair is immune. My bro just did a closing in Montclair today. The buyers paid $70,000 over what the sellers paid in 2005. They also put down over $400,000 on a $600,000+ home. No revovations or upgrades. According to the seller’s closing attorney, Montclair is still going strong. She’s doing 20 closing a month. All single family residential.
Thanks Shore Guy, I would have written back sooner but I was patting myself on the back. I’m gonna put that “award” next to the employee of the month I’m waiting for…
and Major Bloodnok Says: “It will remain this way for another 18 to 24 months followed by an annual 3% to 4% appreciation for the forseeable future.”
I’m with you - because I HAVE to be. Man I hope you are right.
“I can see a massive commercial bank run to flee to MM fund.”
The masses are not that smart. I’m thinking Tempur-pedic or Sealy might be a good long as everyone will need to replace their mattresses more frequently due to the additional weight.
Stu,
People with over $100K in account balance are not part of masses. If you have $100 million in cash sitting at Morgan or BoA would younot get advised thi smorning to move to safety of the treasury and earn decent rates.
Unless inflation hits wages, I don’t see how it will prop up house prices.
I think it is more likely that existing homeowners will get prinicpal writedowns from the Gov. (do you really think they’ll do massive forclosers on voters?). This will cause supply to dry up and kill the market for years.
Shore Guy Says:
September 19th, 2008 at 2:35 pm
Ket/Clot/Grim,
I am beginning to think that until the folks who boutght pre-run-up die, there will be little budging.
It is like the frog in a pan of water story, the temperature keeps getting more and more dangerous to the frog’s life but it fails to perceive the change in its circumstances. As long as people have the ability to pay the bills, they do not care if housing takes up 80% of their after-tax income. If they can’t go on vacation, ok. If they can’t buy a new car, ok. I have my house and cable tv — may not have a pension, or the money to deal with an emergency — but I am ok.
I made an offer on estate sale - Folks who bought in 1970. (pre-run up, they dies - satisfies your criteria).
Their kids who are all living out of state wanted more that their neighbor got fo identical house on a block in 2005.
You theory does not work. Kid’s of dead people will want even more.
agree
RE, as an investment industry, is dead for 10-20 years.
prtraders2000 [438],
Desirable homes in sought after neighborhoods are still drawing those with the means, assets and stellar FICO. POS splits and capes will just sit and wait 2, 3 or 4 years if they must in order to get their price.
Ara Hov. says we need the downpayment assistance back,,,,, even more.
you go Ara ,,, go
“Desirable homes in sought after neighborhoods are still drawing those with the means, assets and stellar FICO.”
Bonuses were good back in March.
The whole world is about to change.
CNN:
“BUSH ADMINISTRATION WANTS TAXPAYERS TO ASSUME BANKS’ BAD DEBT”
yep.
#444 gary Good Bonus money was last years news. You can forget about that for this year.
As far as the desireable houses in the desireable towns, well as per the njmls, there are tons available. Where are the buyers?
As far as the POS’s I really do not think most will keep their POS’s on the market for 3 or 4 years to get their fantasty price.
prtraders 438 - Some inventory may be moving, but lots of stuff is sitting. Check out the most recent Compiled listings I received for Montclair/Glen Ridge at th beginning of this month. Take a look at the DOM for some of the listings. Quite a few homes have been sitting for months. Compare that to 2005 when any dump would sell with multiple offers after the first open house. This listing is for 3+ bedroom homes from 450-800k.
http://newmls.gsmls.com/public/show_public_report_rpt.do?report=clientfull&Id=35930055_6166
#442 Al:You theory does not work. Kid’s of dead people will want even more.
True. That may be becasue the kid’s need to every last dime to help straighten out their own financial mess. But at some point they are going tow ant the money howver much it is,and price accordingly.
Even worse than the kid’s ar many of the old timers they can be absolutely impossible to deal with.
#441 Old Stan:This will cause supply to dry up and kill the market for years.
On the buy side, sell side?
#439 Ray:and Major Bloodnok Says: “It will remain this way for another 18 to 24 months followed by an annual 3% to 4% appreciation for the forseeable future.”
Majorblooknok actually disagrees with theat statement. Perhaps I am reading your post worng.
capital structure of Lehman’s holding company, as of the second quarter of
2008 the general priority of payment for Lehman’s obligations at the
holding company level would be as follows:
• Senior debt
• Subordinated debt
• Trust-preferred securities (junior subordinated debt)
• Hybrid securities
• Preferred securities
Lehman Brothers — Unsecured Debt and
Preferred Stock as of Q2 08 (Dollars in Billions)
Senior unsecured notes 137
Subordinate unsecured notes 13
Junior sub / hybrid unsecured notes 5
Preferred stock 7
This doesn’t affect NJ that much since these are sales positions
NEW YORK (AP) — Schering-Plough Corp. says it will cut 1,000 sales jobs as part of broader cuts in a move to reduce costs and reposition itself in an ever-changing industry.
The company says it will cut 1,000 U.S. sales force jobs, leaving 4,000 positions. The layoffs come on top of a 10% reduction in staff announced in April. In all, the company hopes cost cuts and layoffs since the company bought biotechnology company Organon Biosciences in November will save it $1.5 billion annually.
Shares of Schering-Plough (SGP-B) are up 6 cents to $18.46 in afternoon trading
Nom 454 - Nothing affects NJ. We are too close to NY.
And I thoght everyone that grew up in Jersey City was street smart!
3b,
i think the prices will stgnate/decline slowly until we hit a sudden collapse. such a collapse could be coasued by the increasing jobless rate or any other number of factors. but the collpase will not occur until people are forced to sell at any price they can get.
Its like an avalanche. We see the ridge piling up, we just have to guess which snowflake will release the systemic instability and start the downward rush. It will be fast and furious, followed by a long stagnant period.
3b Says:
September 19th, 2008 at 3:07 pm
On the buy side, sell side?
=======================================
I would think on both sides. The sellers will be able to wait because they will have principal writedowns or interest-free mortgages courtesy of the taxpayers, and the buyers will wait because they won’t be able to afford the asking prices.
It will be like a staring contest between two zombies.
Peter Schiff’s newsletter
Paulson Goes All In
Just three days ago, after looking at the prospect of bailing a string of distressed financial institution in the country, the government seemingly drew a line in the sand, and refused to bail out Lehman Brothers. The authorities clearly saw Lehman’s demise as a trial balloon to see how the markets would react if the government stayed on the sidelines. That trial balloon quickly turned into the Hindenburg. Immediately reversing course, the Government has decided to go “all in” and bail out every institution with financial exposure to U.S. mortgages. Simply put, Americans will not be allowed to visibly suffer losses after the greatest asset bubble in U.S. history. But make no mistake, the losses are real and Americans will pay one way or another.
Moving beyond the guided munitions of selective bailouts, the Government is now trying the financial equivalent of carpet bombing (for AIG, Merrill Lynch, and especially Lehman Brothers, this gives new meaning to being a day late and a dollar short). To continue with the military analogies, Paulson’s bazooka turned out to be a nuclear tipped ballistic missile.
By committing trillions of tax payer dollars (not the “hundreds of billions” that Paulson predicts), the plan will save commercial and investment banks from certain bankruptcy. In his statement today, Paulson made clear that Congress must pass new legislation to allow the Government to acquire even those loans too poorly collateralized to currently qualify for GSE or FHA absorption. The losses baked into these mortgage products, which Wall Street has been reluctant to even estimate, will now be borne wholly by taxpayers.
In his press conference, Paulson assured us that this plan was designed to safeguard our savings. But in typical government fashion, the plan will have the reverse effect as savings is wiped out through inflation. He also claims that the plan will safeguard home equity by keeping real estate prices high. Since when did high home prices become a strategic national priority? If the plan succeeds, the gains for home sellers will simply be matched by losses for homebuyers, who end up paying inflated prices, and taxpayers, who get stuck with the losses when those buyers default.
Paulson’s distress and confusion was clearly evident when he fielded questions from reporters. The first asked Paulson to describe his fears regarding the probable economic consequences of government inaction. Paulson provided no answer and promptly exited stage right.
When the U.S. government owns all mortgages, the real estate market will be completely subject to political, rather than financial, concerns. Will foreclosures be outlawed? Will loan term easements and principal reductions become standard campaign issues?
While it is dizzying to predict how this plan will be implemented, it is fairly simple to foresee the macroeconomic consequences. The U.S. dollar will be shattered beyond repair. The government simply has no means to make good on the trillions of new liabilities. Interestingly, while both Paulson and President Bush acknowledge that the plan will put “significant amounts of taxpayer dollars on the line,” they did not mention any tax increases. Given the politics, no such move is forthcoming. The printing press is their only solution.
The government has also decided to insure all money market funds, adding trillions more in unfunded liabilities to the Federal balance sheet in the blink of an eye. Of course, since bad real estate loans are not the only toxic assets on the balance sheets of financial institution, we will also need to absorb other classes of asset-backed securities, such as those backed by credit card debt and auto loans. So while the move ensures that depositors will not lose money, is does insure that the money itself will lose value. Is the trade-off really worth it? Washington thinks so.
Further, since I assume the plan will apply to all mortgage debt, U.S. taxpayers will also be on the hook to bail out foreign institutions that loaded up on the financial sludge. However, once the government takes them off the hook, do not expect them to re-invest the windfall back into other U.S. dollar denominated assets. This get-out-of-jail free card will likely scare them straight. The global mass exodus from the U.S. dollar and Treasury debt is about to begin: do not get caught in the stampede.
Although gold initially sold off as the apparent need for a financial safe haven ebbed, look for a spectacular rally to commence as its traditional role as an inflation hedge returns with a vengeance.
#455 We are too close to NY.
Even if NY is sheding high paying Wall St jobs, who cares, we are still close.
“BUSH ADMINISTRATION WANTS TAXPAYERS TO ASSUME BANKS’ BAD DEBT”
yep.
Like peter says I didn’t hear him talk about Tax Increases so then it means we will print the money. Say hello to inflation.
excuse the very general question but …
what does it mean when the DOW has triple digit moves for 5 days straight- with 300+/-pts. 4 out of the 5?
The fed, treasury, sec and congress do not have the power to change any business cycle. They can delay it, try to plug up the holes in the dike, hand out pain killers or apply cortisone shots. This does not, in any manner, change the long term fundamentals of any market. The foundation in this market and state of NJ continue to crumble. Real incomes will continue to decline, cost of goods will continue to rise, huge increase in treasury supply will drive up rates and credit will continue to be a major impediment. Unless this package includes a bulldozer, which pulverizes 11 months of inventory, the down cycle will continue.
BC Bob,
And my father was a tavern owner for 30 years. :) I know, what happened to me?
#459 old stan: Could just end up spooking buyers even more.
This secenario would inject an even larger unknown, and more instability, and instead of seeing a bottom at some point, the market could become frozen.
But how long does or could that last?
“And my father was a tavern owner for 30 years”
Gary,
I think I should meet you there right now?
“But how long does or could that last?”
3b,
Japan.
BC Bob,
As long as you leave the 2 X 4 in the car.
#457 kettle:and start the downward rush. It will be fast and furious, followed by a long stagnant period.
And if my memory serves me corectly that is how is happened last time. The peak, the frozen period, and than the rapid decline.
I remember looking at houses that were much bigger and better than what I had bought at the peak, with asking prices 25/30% below what I paid for mine at the peak. Talk about kicking yourself in the azz.
#467 BC Bob: True. But that would not be good for you and I and others who plan to purchase, or purchase again.
Paul Muolo, executive editor of National Mortgage News, recalls in “Chain of Blame” (Wiley) how teenagers started using “subprime” as a verb.
“I’d better not subprime that test,” his 13-year-old daughter Sherry observed one day.
Things could be worse: She might have Greenspaned her final.
Every company has dead weight, even more so in wall street that in good times looks the other way and lets it build up. In an industry where comp and RE are two biggest expenses rightsizing up 500K a year people who sit in expensive corner offices are good things long term. Most people will not get laid off as most layoffs are disguiesd firings.
tosh (399)-
Nope. From what I’ve been told, inverse ETFs are considered to be the same as short-selling by the SEC, even though they are cash settlement in nature and react only to underlying indices.
I’m also now hearing rumors that the SEC clampdown is about to placed on put options activity on the fav799.
#472 John: thousands of layoffs are thousands of layoffs call it what you will. And sadly many times it is many of the people who are performing who get canned. Many of the morons, azz kissers, and incompetents still manage to hang on somehow.
“#467 BC Bob: True. But that would not be good for you and I and others who plan to purchase, or purchase again.”
3b,
The market does not care about you and I, nor others. IMO, without the goofballs in DC getting involved, we could have reached botton in 2010-2012. If this passes, Japan.
Stu (401)-
Oh, I can think of 4-5 scenarios in which SKF is off to the races again. The first two that come to mind are:
1) Post-election, when Klink et al don’t give a damn anymore and slink off with their ill-gotten billions
2) China and Russia walk away from financing our debt when they discover (it’s probably already happened) that there is no actual plan in place…other than screwing them royally.
“Things could be worse: She might have Greenspaned her final.”
Better than being caught giving a Lewinsky.
#475 BC Bob: Well if that is the cae, than you and I may not be buying any time soon. Is that what you are saying?
Let’s not forget our recession, that IMO is here or will be here regardless of what DC does.
BC bob
Wall Street wants the Treasury Secretary and the rest of us to do that.
hey guys– f’ it. house prices still dropping, buy a place next year and pay back the note with inflated dollars.
So who’s going to the last Yankee game? They just announced gated open at 1pm for the 8:15 game and fans will be allowed to walk from Monument Park onto the warning track and behind home plate.
The market does not care about you and I, nor others. IMO, without the goofballs in DC getting involved, we could have reached botton in 2010-2012. If this passes, Japan.
BC,
Hence, If this passes and you have to buy a house in th enext decade might as well put on the boots.
Agree
Things could be worse: She might have Greenspaned her final.”
Better than being caught giving a Lewinsky.
Still better then getting Palinized!
Congratulations, You just bought yourself a country. Of course, like everyone else, you had your hopes and dreams as a kid, but feel free to admit it, you never thought you’d make it this far. Plus, it’s not just any country you bought, either: it gets better all the time: you thought you were buying America, but you got something much much better: you are now the proud owner of Bulgaria-on-the-Hudson.
While you’re enjoying your new riches and dancing stark naked in the streets, and good on you, mate, don’t forget to start drinking. I know it’s early, but trust me here, this is a special occasion. Very special. In fact, I strongly suggest you get as drunk as you possibly can, and as fast as humanly possible. Don’t bother with beer or some girly bubbly, this time around you got to hit the harder stuff. Trust me. And stop worrying about the hangover: your new country doesn’t either. You acquired a faith-based casino.
Greenspan Tells CNBC Ban on Short Sales Is a “Terrible Idea.”
Clot,
Do you have an open spot on your firing squad?
make (485)-
I wouldn’t waste the bullet on him.
Better to let a pack of pit bulls rip him apart.
I am going to get this party started tonight:
I believe that all of this mess,
asset bubbles (whatever they may be)
energy problems
screwed up govt
oversized entitlement programs
etc
is due to the baby-boomers culture of “hooray for me” and greed. These people have been like a swarm of cockroaches for years, moving around and destroying everything they touch, much to the benefit of themselves.
486 Clot
I’d do it. I need the target practice.
485-
AND CNBC actually showed that?
I am pretty optimisic about this situation. I think our big creditors are going to absorb most of the losses. if we are the cr-ckheads and they are the dealers, then they are nothing if they cut us off. we keep the entire charade in business. so they will be sad that it won’t work out as well as they might like, but they really have to keep it going because their own growth depends on it. this will play out over many years while we an every other nation try to become more self sufficient
From Banker trading desk to Corporate Treasury
Sent: Friday, September 19, 2008 4:09 PM
Subject: Just in case you were out this week . . .
. . . you haven’t missed much:
09/12 Close 09/19 Close Change
Dow 11,422 11,390 -0.3%
S&P 1,252 1,255 +0.2%
6m Bills 1.55% 1.53% -2bps
2yr UST 2.21% 2.15% -6bps
10yr UST 3.72% 3.79% +7bps
30yr UST 4.32% 4.39% +7bps
IG10 151/153 151/153 Unchanged
HY10 382/387 380/390 Unchanged
~ Jonny
#489 skeptic: I think you paint too pretty a picture. I guess time will tell.
For the Democrats to approve this bailout, there will have to be mtg write downs, and or new artifical rates created for homeowners so that they might be able to stay in their homes.
1. Who gets these writwe downs, only sub-prime mtgs, alt-A, prime, everyone.
2. What time period all mtg’s originated in the last 5 years, 10 years?
3. How much of a write down?
4. How long will it last, will it apply to prosepctive home buyers?
5. Will it apply to seconf homes,and flippers whoa re sitting with unsold McMansions? The questions could be endless.
Why would any one buy now, at say 500K, with a 400k mtg, when the guy next door with the same 400K mtg, gets his written down to 350K, with a shinly new low rate.
All theoretical of course. But rather than supposedly helping the housing market, this could destroy it.
3b
could destroy it???
So Rudin says not to worry about commercial real estate because we are going to need a lot of new nurses in the future (plenty of job creation blah blah bs)… now I feel better.
I don’t know any lawyers who are financially savvy enough to answer this question: Is a class-action lawsuit possible against the Federal Reserve and Treasury for waiting until now to propose an RTC-like resolution to this mess? Would Lehman and Merrill stockholders have a case?
Skipped $1.90 light rail fare leads to night in jail
It took just the right confluence of bad luck, unfortunate timing and inflexible regulations to cause a hapless German businessman to start his summer with an unpaid $1.90 Light Rail ticket and end it in jail.
But it was that combination — exacerbated, perhaps, by a smidgen of stubbornness on Gerhard Hofer’s part and an equal measure of unhelpfulness from most people he encountered — that caused the 40-year-old who moved to Hoboken from Germany in April to share a cell with three other men, a leaking toilet and a horde of flies.
“Nobody’s done anything dramatically wrong. Technically, I think people followed the rules,” said Hofer, a sales manager at a Jersey City company that imports herbal teas. “But the punishment was just too much in comparison to the actual offense.”
The journey began on June 4 when Hofer lost a dollar to a broken ticket machine at the Ninth Street Hudson-Bergen Light Rail station in Hoboken.
“I didn’t try the second machine. I was still fighting the first one when the train came, and I was already late for work,” he said. “Sure enough, when I got off at Newport (in Jersey City), there were the traffic police.”
Pamela Suchy / Jersey Journal file photo
The Ninth Street Light Rail Station, where Hofer encountered the broken ticket machine on June 4, 2008 in Hoboken.Hofer tried to pay the $74 ticket online, but the site asked for a license plate number and he doesn’t own a car. He next planned to pay in person. “But then I looked at the ticket and realized that in order to do that you have to plead guilty, and I didn’t really feel guilty,” he said.
So Hofer decided he’d throw himself on the mercy of the court, offering as his defense the lost dollar, the broken machine and an otherwise stellar ticket-payment record.
The ticket gave him a court date of June 20, which the court postponed to July 19, and then postponed again to Aug. 4, when he would be on vacation in Germany. He called the court for a postponement, but said he was told: “Just pay the fine and you won’t have to come to court.”
“But I want to go to court and present my case,” Hofer said he told the woman, who then hung up.
Hofer sent a letter to the court asking for a postponement and left for Europe. On Aug. 28, he received a letter informing him of a warrant for his arrest.
“I thought I would go in the next day and sort it out, but then I worried the police would be out looking for me,” he said.
Andrew Miller / Jersey Journal file photo
Hofer was arrested by a Hoboken police officer after asking the officer what he should do about the warrent notice he received.Then as he walked outside to get a beer, the police drove up to answer a false alarm next door, as he later found out. So he asked the officer for advice on how best to deal with the warrant situation, he said, acknowledging, “Maybe I was as a little naive.”
“(The officer) looked at me and said, ‘If you make me aware of the fact that there’s a warrant out for your arrest then I have to arrest you,’” Hofer said.
So, at 6:30 p.m. on Thursday, Aug. 28, Hofer was cuffed and arrested. After a long stop at the Hoboken police station, he was delivered to the Jersey City police, who, he said, found the situation quite funny.
“They said, ‘I can’t believe you got arrested for that,’” he said. “But once the proceedings had started, there was no way to stop it.”
Hofer was asked if he had $250 cash to bail himself out. But he did not, and was not allowed to use a credit card or go to an ATM.
“Just having arrived from Germany, I didn’t have anybody to call,” he said.
He explained his story to several police officers, who were professional and polite, he said, but couldn’t help him.
“We have zero wiggle room there,” confirmed Jersey City Police Tom Comey. “If we release someone we would be in contempt of court.”
Hofer spent 17 hours inside the Hudson County Correctional Facility, photographed here in 2007, just after a new wing was built.Hofer was relieved of his wallet, keys, Blackberry, shoelaces, belt and other property, fingerprinted and photographed, and, after five hours in police custody, driven to the Hudson County jail in Kearny.
There he was offered another phone call and chance to post bail, but he still had no way to get the cash. Then there was more processing and a change into prison clothes.
He was taken to his cell around 2:30 a.m. Friday, Aug. 29, he said.
“I was shocked. As I walked in there, I thought it can’t be,” he said. The cell had a toilet that was leaking, there were flies, and then there were the mattresses with suspicious brown stains.
“I sat down on a mattress and thought ‘I’m not going to move, I’m not going to touch anything,’” he said. “But one of the other inmates looked up at me, and said, ‘It’s terrible, I know, but just try to get some sleep, so you’re in shape to face the judge.’” So he did.
Later that morning, Hofer finally had his day in court - via video conference from the jail. In the end, he pleaded guilty.
“I would have pleaded guilty to anything just to get out of there,” he said, “and put an end to this all.”
The judge sentenced him to time served, waived the $74 and billed him $10 court fees. (And NJ Transit has since given him a $1 credit for the lost fare.)
Uncommon Carrier warehouse in Kearny, where employees gave Hofer bus fare back to Jersey City.After more waiting Hofer was released at 4:30 p.m. to the streets of Kearny, without a belt, shoelaces, or his wallet.
“I asked them how I would get back to Jersey City (to retrieve his belongings), and they said to walk,” he said.
Luckily, the jail was across the street from a warehouse his company used, so he went there, introduced himself, and scored $10.
He arrived at the Jersey City police station at 6:30 p.m. and was told by a woman at the police station that his property, including the keys to his apartment, was locked up until Tuesday morning due to the Labor Day holiday, he said.
He tried to explain that he would have to sleep on the street. “She said, ‘Look, I’m not having this argument here, good-bye,’” he said.
“I just lost it,” he said. “I punched a street sign in frustration, and a police car stopped.”
And at that moment his luck turned.
Sgt. John Reo drove up in his police car and asked him what was wrong. After hearing Hofer’s tale, Reo made some calls and found a retired police officer who still had a key to the East Precinct’s property and evidence room.
The officer, Dennis Carroll, drove to the precinct and gave Hofer back his possessions — and his faith in the kindness of strangers.
http://www.nj.com/hudson/index.ssf/2008/09/hoboken_man_skips_190_light_ra.html
#493 kettle: I stand corrected.
3B,
If this goes through Congress next week and they bail out everyone then it’s time to check out some open houses this week.
Clot,
Besides your SKF getting beat up do you see this foot traffic through the door double next spring.
A sequel to IOUSA, coming soon to a theatre near you.
494 Seneca
I don’t know, but this week a judge overturned a previous ruling and allowed Merck to be sued by investors who are mad as heck that it took VIOXX off the market when it was linked to strokes, and their shares plummeted.
“If this goes through Congress next week and they bail out everyone then it’s time to check out some open houses this week.”
Open houses where? Costa Rica?
Gator,
The guy from the train ended up with more jail time than the whole Wall Street Mess will yield.
Bring the troops back from Iraq, we need them here to fight this regime. It’s time to bring liberty and free markets back to the USA.
“A sequel to IOUSA, coming soon to a theatre near you.”
Yea, it is called “I don’t owe you a fricken thing. Get used to it you losers who actually saved and paid your bills.”
“Purge the rottenness out of the system, values will be adjusted, and enterprising people will pick up the wrecks from less competent people.”
Andrew Mellon, 1930
Shore - I almost felt bad for the guy, until I read that he told the cop that there was an outstanding warrant for his arrest.
Darwin’s theory at work, I suppose.
China’s state media today reports on the real reason behind the Wall Street meltdown and a subject that the mainstream US media dare not mention - the Federal Reserve’s overissuance of currency - which the Chinese say is part of a wider agenda to justify increased control over the global economy.
The Bush administration today announced a plan to use hundreds of billions of dollars of taxpayer money to buy up up bad mortgages and other debts. The process of injecting more fiat money into an already over-inflated system had the desired effect - the Dow Jones shot up 450 points - but the dollar, following a brief jump, began to plummet.
According to numerous Chinese state media news sources today, the Federal Reserve’s continued zeal for propping up the market by injecting illusory liquidity is part of an agenda to gain trust and grease the skids for increased government intervention in financial markets.
China Finance , China News and Chaobao Financial News, all state owned media outlets, slammed the Fed for taking action that will only make long term economic conditions worse and devalue the dollar by “creating money that does not exist which leads to the inflation of liquidity,” a policy contrary to China’s position as a holder of vast reserves of US dollars.
The analyst quoted by Chaobao Financial News highlighted “that when there is market failure, the paramount purpose of government intervention should be saving the market for the benefit of the people: Relief, Recovery and then Reform,” and that “Protecting the rights of people who are suffering in the housing market and as a result of high oil prices should be treated as a priority.”
The analyst added that by concentrating on saving just a few large financial companies, the Fed is creating wider financial chaos while arousing anger and suspicion by “only protecting and encouraging large companies’ wrong doing.”
CEIBS Professor of Economics and Finance Xu Xiaonian told a conference yesterday that “The fundamental source of Wall Street’s meltdown is caused by Federal Reserve overissuing currency.” He cautioned that the US government has already exceeded its scope in terms of intervention compared with their usual policy.
Similar sentiments were echoed by economist Zuo Xiaolie, who said that the amount of money injected into the market will have little real impact, but that such measures are a “Narrow minded way that the Federal Reserve uses to diversify the pressure of currency adjustment to other countries, which leads to the devaluation of the dollar, causing imbalance in the global economy.”
“The amount of money that has been put into the market can not fundamentally save the market,” said Xiaolie, adding that the move was merely part of an agenda to “regain the trust and justify future further intervention in the economy.”
On Wednesday, China’s official People’s Daily newspaper, the voice of the ruling Communist party, said that the US had unleashed economic “weapons of mass destruction” and set off a “financial tsunami” by allowing Wall Street lenders to trade in subprime debts and unstable financial derivatives, according to a Press TV report.
China has previously threatened to liquidate its vast holding of US treasuries, amounting to $1.33 trillion, if Washington imposes trade sanctions to force a yuan revaluation. The Communist power has also repeatedly expressed its anger at the Fed’s indifference to the weakening dollar. If China were to dump the dollar it would likely set in motion a chain of events that would lead to a collapse of the greenback.
We know we are in trouble when the Chinese Communist Party sound like bastions of sound money policy and fiscal conservatism in comparison to the Bush administration and the Federal Reserve, who in creating more money out of thin air continue to bail out their friends on Wall Street while the economic future of hundreds of millions of American citizens is sold down the river.
SOURCES
Chaobao Financial News: http://www.usqiaobao.com/zhuanlan/2008-07/24/content_127956.htm
China Finance: http://www.caijing.com.cn/2008-09-18/110013626.html
China News: http://www.fywj.gov.cn/Article.asp?id=3219
Translations provided by Yihan Dai.
China’s state media today reports on the real reason behind the Wall Street meltdown and a subject that the mainstream US media dare not mention - the Federal Reserve’s overissuance of currency - which the Chinese say is part of a wider agenda to justify increased control over the global economy.
The Bush administration today announced a plan to use hundreds of billions of dollars of taxpayer money to buy up up bad mortgages and other debts. The process of injecting more fiat money into an already over-inflated system had the desired effect - the Dow Jones shot up 450 points - but the dollar, following a brief jump, began to plummet.
According to numerous Chinese state media news sources today, the Federal Reserve’s continued zeal for propping up the market by injecting illusory liquidity is part of an agenda to gain trust and grease the skids for increased government intervention in financial markets.
China Finance , China News and Chaobao Financial News, all state owned media outlets, slammed the Fed for taking action that will only make long term economic conditions worse and devalue the dollar by “creating money that does not exist which leads to the inflation of liquidity,” a policy contrary to China’s position as a holder of vast reserves of US dollars.
The analyst quoted by Chaobao Financial News highlighted “that when there is market failure, the paramount purpose of government intervention should be saving the market for the benefit of the people: Relief, Recovery and then Reform,” and that “Protecting the rights of people who are suffering in the housing market and as a result of high oil prices should be treated as a priority.”
The analyst added that by concentrating on saving just a few large financial companies, the Fed is creating wider financial chaos while arousing anger and suspicion by “only protecting and encouraging large companies’ wrong doing.”
CEIBS Professor of Economics and Finance Xu Xiaonian told a conference yesterday that “The fundamental source of Wall Street’s meltdown is caused by Federal Reserve overissuing currency.” He cautioned that the US government has already exceeded its scope in terms of intervention compared with their usual policy.
Similar sentiments were echoed by economist Zuo Xiaolie, who said that the amount of money injected into the market will have little real impact, but that such measures are a “Narrow minded way that the Federal Reserve uses to diversify the pressure of currency adjustment to other countries, which leads to the devaluation of the dollar, causing imbalance in the global economy.”
“The amount of money that has been put into the market can not fundamentally save the market,” said Xiaolie, adding that the move was merely part of an agenda to “regain the trust and justify future further intervention in the economy.”
On Wednesday, China’s official People’s Daily newspaper, the voice of the ruling Communist party, said that the US had unleashed economic “weapons of mass destruction” and set off a “financial tsunami” by allowing Wall Street lenders to trade in subprime debts and unstable financial derivatives, according to a Press TV report.
China has previously threatened to liquidate its vast holding of US treasuries, amounting to $1.33 trillion, if Washington imposes trade sanctions to force a yuan revaluation. The Communist power has also repeatedly expressed its anger at the Fed’s indifference to the weakening dollar. If China were to dump the dollar it would likely set in motion a chain of events that would lead to a collapse of the greenback.
We know we are in trouble when the Chinese Communist Party sound like bastions of sound money policy and fiscal conservatism in comparison to the Bush administration and the Federal Reserve, who in creating more money out of thin air continue to bail out their friends on Wall Street while the economic future of hundreds of millions of American citizens is sold down the river.
#506
silly Chinese are the ultimate subprime lender.
sas,
Where did you get that from?
I am reposting this from other thread, especially after Chinese press releases.
Here is my dose of paranoia and armegeddon fatalism for the day - along with slightly brighter scenario.
The real behind close doors US plan is to
take equity stakes in return for capital injections in forms of loans or purchase of bad assets
issue debt to pay for those capital injections
issue strong capital/leverage requirements to avoid appearance of moral hazard, with real motivation being more controlled but continued asset deflation
print money to pay for debt, while stimulating offsetting deflation
if needed, due to energy demand or prevent hyperinflation/dollar collapse
repudiate debt owed China and Russia, in a way which perserves or even strengthens its reserve currency status.
reduce global demand for fossil fuels
How do you do these last two, which become increasingly likely given risks of other plan elements?
The answer is simple - war or at least cold war with strategic hot skirmisms (in energy rich areas).
US gains moral justification for repudiating Russia/China debt and retaining confidence of other creditors. Euro, Pound, and Yen all fall vs dollar, given proximity to and balance of military power vs. newly provoked/iscolated Russia/China.
Japan and Europe forced to support currency and buy debt, in order to ensure their protection and access to energy provided by US naval power/nuclear umbrella.
Oil producers forced to do the same, or see their large US holdings frozen and targeted as aggressors. Beyond caspian, Russia and China unable to counter US naval blockage should they chose to ally with them.
Bottom line, US will do anything short of all out nuclear war to maintain is geo-polictical position and the pre-requiste standard of living to retain political power.
Creditors may choose on their own to accept negative returns by buying bad assets or funding RTC, in order to avoid unemployment/civil unrest, and thus prevent the WWIII scenario.
Developing nations consumption of resources would slow, as result of reduced but not eliminated US demand/borrowing.
Likewise balance of trade would shift, as dollar goes to a lower but stablized level and domestic/forign fund flows are directed toward real industries rather than exotic financial instruments. Clean energy may be one of these industries.
China and India may go along with further energy use reduction in name of climate change. Elites would be able to continue 1st world life style, while ensuring their dollar wealth doesn’t collapse or biggest customer doesn’t completely stop spending. They would be able to placate new educated middle classes with climate change explanation.
After talking to the economic folks at the White House today, I am persuaded that they acted aout of stark raving fear, not any cynical motivation. The terror that the world’s economic system was about to crash came through loud and clear. What they did may or may not work, and I hope it gets modified through the legislative process, but it did ate least forestall any crash.
at least, that is. Need to nor do this at traffic lights.
#497 make: Again why??
512-
I think he means that we will see hyperinflation due to the printing presses running at full speed. If you can lock in at a fixed rate, inflation will take of your mortgage for you.
Stolen from a comment on CR-
“Citing “deep concerns” about the Treasury’s program to guarantee money market mutual funds, American Bankers Association president Edward Yingling said that the bailout of money markets “will undermine the role of banks during this current crisis and has the potential to have an extremely negative impact in the future…In a letter to Treasury Secretary Henry Paulson and Federal Reserve Chairman Benjamin Bernanke, Yingling posed eight questions about the money market program, the most pointed of which asks “how will you address the perception by the market that money market mutual funds now have a permanent implicit government guaranty – much like Fannie Mae and Freddie Mac did?…“The debt instruments in a money market fund will pay a higher interest rate, and therefore, the fund will pay a higher interest rate than a bank deposit or short-term CD,” said Yingling. “It also appears that there will be no limit on how much an individual or institution can invest in these funds. Therefore, they will be in a significantly superior market position to FDIC-insured bank deposits.” In plain English, this means that the ability of banks to attract and keep deposits may come under pressure as a result of the move to bail out money-markets“
[455] Gator,
Where I’m from, being close to NY isn’t a positive thing.
Heil Hank;
http://www.flickr.com/photos/fintag/2836701573/in/set-72157604060807926/
80: composting toilets. then you don’t have to muck them out. (mucking out the pigs, however…)
anyone else discovered the fascinating world of “urban homesteading”?
have asked for a pressure canner for xmas.
new zealand is pretty, but i’m not sure they get enough rain to sustain much human population…
…and Pat, from two days ago– i agree with Cindy. i got bumped ahead in math, and spent the next four years being terrified of it. if she’s bored, i bet there are extra things they could do for her– math games, binary numbers, something–without actually bumping her.
many more thoughts, but i have 500 more posts to go… someone else has probably already posted my sentiments.
“sas,
Where did you get that from?”
the damn RE bubble blog keeps putting my sources in moderation.
sorry bloke.
SAS
“China paper urges new currency order after “financial tsunami”
http://tinyurl.com/6sx4bx
wait, one more thing. unless someone else thought of it first, can i get credit for coining the phrase, “Option Arm-Ageddon”? (well, it made my husband laugh last night.)
JB,
With 500 posts in 14 hours, might it be time for a second thread?
“All Roads Lead To Hyperinflation”
http://tinyurl.com/3jt5j6
“Impacts of the Financial Crisis: The U.S. Is Becoming an Impoverished Nation”
http://tinyurl.com/3rf5wv
“Gramm-Leach-Bliley Act”
http://tinyurl.com/29u5qb
Friday bank failure!
Although it’s a bit lost in all the news from the past week.
It’s hard to believe Lehman was 7 days ago. It seems like an entire age has passed in the interim.
#144 - Barien-
“For you ex-Boston residents, what areas around Boston are like Summit and Westfield? Train towns with good schools. Seriously thinking about relocating their next year. I’ve read that Arlington, Watertown, Waltham, Wellesley, and Needham are supposed to be nice Don’t think I want my kids going to public schools in Boston so we’re looking at nearby towns.”
Barien - I hope you’re still reading - The best answer is Brookline.
It’s a perfect mix of urban and suburban - great schools - a really great place to raise kids. not cheap, but not more expensive than summit or westfield. it’s also very common for people to live in condos, which makes it more affordable, and there are some decent rentals, although there’s tons of junk too.
it’s also very diverse in the sense that people come from all over the world to either work in the hospitals, teach, or study in the universities - many come for only a few years, but it makes it very interesting. it’s also on the T (which is the trolley into the city)- so you don’t even have to take the commuter train.
i don’t like arlington, waltham or watertown too much for raising kids. needham is ok and wellesley is super expensive.
newton or lexington are also very nice - but i like brookline the best.
I think I am going to write-in Jon Stewart on my ballot.
jafo 509
interesting idea, but the military aspect doesnt hold water (pardon my pun). due to factors such as sunburn missles ( supersonic antiship missles that have no countermeasure)and economic factors such as japan and europe having some similar financial instabilities as the US, i dont see that happening. russia alone could trump the entire concept simply by cutting Europe off from oil and gas.
To buy or not to buy?
Deals are aplenty in my neck of the woods & I mean woods. Do I hold the cash or buy & reap the benefits of hyper inflation.
I hear that is what this blog is about.
Ket 528 To many scenarios & weapons to get into but I agree over all. Doesn’t mean it will not be tried or can’t happen.
sas[522],
Toxic sludge bailed out by a subprime currency.
“The Illuminists, through the nefarious, dirty dealings arranged by their privately owned Fed, their corrupt Treasury and SEC bootlickers, and their Wall Street cohorts, will now pick and choose who goes under and who stays afloat, and will arrange for who will buy out whom, as they fashion their next incarnation of our corporatist, fascist system. You just saw Bank of America eat Merrill Lynch for 50 billion after turning down the offer to buy out Lehman Brothers. This is the same bank that just bought a toxic waste dump known as Countrywide in what can only be a described as a suicidal move. Now, Bank of America goes bonzai for Merrill Lynch, yet another toxic waste dump, as they tie on their red sun bandanas and get ready to go down in a blaze of glory. What are these people thinking?! Are they that clueless that they can’t see that all the assets in these companies are overvalued and are not marked to market, and that there are likely to be huge mortgage noteholder recourse and derivative counterparty liabilities? They should have waited and bought Merrill Lynch for a song, or not bought it at all. Perhaps their arms were twisted by the Illuminists. It is impossible to know all the nefarious machinations that are happening out there as our zombie economy implodes.”
Anyone with MLS access know if this reo has been relisted and have details?
I couldn’t find it looking on NJMLS but I hear they cut the grass and killed the weeds.
mike,
wait until next fall if you really have to buy. you seem to have a strong cash position, so time is squarely in your favor. patience.
jafo, mike
the interesting thing is that i have also heard from other places that the US may decide a major war is a better option then financial collapse. not that ot would stop it, but a major war could be an attractive option if desperate enough
Clotpoll Says:
September 19th, 2008 at 12:17 pm
SKF trading again. Time to double down
________________
Damn right Clot.
Criminals, all of them.
Could we have a ban on blog moderation for a few weeks? I’d like use to about 10,000 f–word combinations to describe our POS government bailing out the POS wall st a-holes who did all this to themselves, the country, the world.
Bring on the moral hazard punchbowl, it’s party time!
Now, word is ML might be “rethinking” BofA; Citi looking to buy WaMu with their free bailout pass, since per CFO
“people are now viewing us, as a part of the solution…”
Are you f—ing kidding me? THE SOLUTION?
Hey, no worries. I’m sure the gov will be happy to take in those CDOs at 80 cents on the dollar or better, so the banks don’t have to report any, you know, uncomfortable-type writedowns (like, oh, maybe, 5/cents or NIL).
Bring it. One way or the other, the contrarian voice will find a way to be heard. And all these SOBs will take their shots. At least I sure hope so.
Clot - re: SKF, you’re hearing they’ll shut it down as well - even though they’re just swaps on the underlying basket? Other an indicator of sentiment, unless I’m missing something, doesn’t seem like it could independently contribute to moving the equities down, w/ the ban in place?
Well whatever. I’m sure as h-ll not redeeming.
If i can get the video on the argentinian collapse of 2001, does anyone want to setup a mini GTG for a viewing? someone with a large plasma preferably?
with all this liquidity,
what are your blokes for gas prices next summer?
SAS
SAS
been looking into the world bank and IMF.
Enlightening.
SAS
gas will be down barring any catastrophic events
I am thinking minimun $6/gallon.
what will that do to food, airlines, and car sales i.e GM??
you see where this is leading to blokes..
but hey… we just bailed out the banks letting you the stupid, dumb public with the bill.
better bend over and take it until you die.
:)
SAS
BC,
Remind me, exactly how many years was Japan dead in the water - 10, 15 years at least?
I just want to start preparing now.
Anyone want to rent out a little offshore island, to set up a nice short selling operation?
3b (492)-
All the solutions you can think of for this mess only leads to five more problems.
That’s because all the solutions interfere with the process of markets clearing themselves. Any attempt at manipulation only exacerbates the core problem.
Ain’t capitalism grand?
ket 534 There will be war. The populace need it to keep them from turning on the gov. Or should I say the gov needs it.
make (497)-
No. You can write off any significant improvement in RE for at least ten years. By next Spring, the all-out crash should be well underway.
Clot landlord wants to talk about my evil deal.
Sorry, all. I’m still a little bitter over the gubmint having classified me as a gambler and criminal, before I’ve even had a chance to commit any crimes against it.
I plan on rectifying that situation soon.
“The populace need it to keep them from turning on the gov. Or should I say the gov needs it”
I am thinking there is going to be a govt sponsered false flag terrorist attack on our own population, to rally the people to support an expanding war against the so called “terrorists”.
I suspect this will happend with once the new president gets sworn in, and the when the DOW starts to stumble below 10k.
Odd… this scenario sounds awfully familiar:)
SAS
steve 541
you do realize that WMD would promptly be found on your little island and the carpet bombing would commence…. dont you. expect a phone call 5 minutes after you start said operation. if you continue after the phone call, expect to hear a strange whistling sound from above about 30 minutes after that.
why would the govt have to write down the principal?
couldn’t they just lower the rates for the teaser loans that are going sky high, and stretch the loan out so that the payment would be the same as a principal write down. (40 years? 50 years?)
this way, the people who bought can still have a more affordable monthly payment, but don’t really get a hand out - they would have no excuse/reason to foreclose, and the rest of us wouldn’t feel so angry about a bailout for the irresponsible.
going forward - they would have to institute stricter lending standards and mandate downpayments.
SAS, 547
probably correct, most pieces are in place. hopefully they wait until after Xmas
“Why of course the people don’t want war. Why should some poor slob on a farm want to risk his life in a war when the best he can get out of it is to come back to his farm in one piece? Naturally the common people don’t want war neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country.”
-Nazi Hermann Goering
now now clot, not in print! 546
Clot,
Have you seen this article that discusses a problem David Petrovich of the Society for the Preservation of Continued Homeownership (www.spoch.org) in Oakhurst, N.J. was having negotiating a short sale?
Reminded me of one of the stories you shared regarding negotiating a short sale with Chase.
1 reason i disagree with us goiing strait to hyperinflation. hyperinflation would wipeout the debts that the average american has. that debt is the core wealth of a large number of corporations. the US gov is too tightly interconnected with corporate america to wipe out their source of wealth
sas 551 Somethings never change.
K1,
I figured I’d staff the desk w/ ex I-bankers, Fuld, O’Neal & the board of Fannie thrown in for good measure.
Bomb away.
kettle1,
they are building that wall not to keep the mexican out, no.. they are building it to keep you inside.
SAS
And if Barney Frank really wanted in, I might lower the bar a bit more.
SAS
were you an EHM or a Jackal in your last life?
SAS
the wall…. i a well aware. tell me again what all of those empty detention centers haliburton built around the US are for?
Vic (527)-
I think I am going to talk as many people as I can into not voting at all.
Better to take some time off and have a nice drink or take a walk.
Re 551,
You telling me Dick Cheney is really Hermann Goering?
BC (531)-
Ever notice how every thread here contains the word “zombie”?
Even worse, the term zombie is used to describe people and institutions that should be capable of decisive action at this critical moment.
I realize this is a naive question.
Can someone cogently explain the underlying derivatives [swaps options and (?) forwards] that make up UltraShort Financials like SKF?
I just am trying to understand what they are in plain English.
Anyone? Bueller? Bueller??
Thanks in advance.
sl
Tom (532)-
“I couldn’t find it looking on NJMLS but I hear they cut the grass and killed the weeds.”
Cut the grass? Killed the weeds?
Hell, that’s the 2009 version of upgraded!
So what is a better investment GLD or physical gold? And if you buy physical gold where do you hide it when the Fed’s come in ten years to take it away?
Cox and the SEC had best cut out the no-shorting rule in short order unless they want to see some wholely unexpected side effects.
Energy and energy markets are highly reliant on capital markets in order to fund exploration extraction and processing. The effect will be delayed but this new commikazi tactic will quickly begin to show up as energy shortages.
For example: all of that great natural gas that has been found around the US has huge upfront operational costs that energy companies borrow to fund. if they cannot get the loans then they cannot extract gas. same problem with exploration. How much do you think a refinery pays for a tanker full of oil that holds 2 million barrels? thats also borrowed money upfront!
If the money cannot flow freely for even the credit worthy with real tangible assets involved then get ready for some nasty surprise effects.
“were you an EHM or a Jackal in your last life?”
lets put it this way, I was in the military during Operation Hastings, after military went to college at Tuck, taught a few classes until they fired me for dating a student,
in the 80s did military hardware (Nicholas Cage and that movie may ring a bell), 90s worked for telecommunications to basically steal IP in Asia, specifically Korea.
and now I am old and tired, and my only joy is spending time with all my grandkids, and sitting on a dock somewhere and watching the sunset over the water.
SAS
hehe
my 1.5 cents: physical. be creative and not in a bank
Can they take gold teeth?
Steve (535)-
The only options available to SKF holders is:
1. Redeem.
2. Continue to hold. Adding to your position is not allowed.
The only person I got on the line at State Street today says the SEC considers tracking ETFs that are inverse/double inverse to be the equivalent of short selling, so the ban extends to them.
Funny, but inverse ETFs are all cash settlement vehicles. No actual shorting is involved.
Welcome to investor gulag.
SAS
Jackal.
if may be so bold was it patriotism (however misguided), money or boredom that sucked you in?
mike (545)-
Be a mensch. Dispatch him quietly and quickly.
Then, eat his spleen.
tcm (549)-
Good try. Sounds nice, won’t work.
Actually, if you stretch the amortization out to 100 years, you have ReTard’s original plan.
This is what I found.
http://biz.yahoo.com/ms/080919/253823.html?.v=1
[snip]
Why did SKF and SEF stop trading?
As previously discussed, due to the short-selling ban on financial stocks, there are no counterparties willing to buy/write the issuers’ swap agreements, as the wide sweeping ban on shorting financial stocks means that the counterparty would be unable to hedge away its exposure. The shares of these ProShares ETFs did resume trading in the financial markets today, but they seem to be trading at prices that are not in line with their intraday indicative values. This is to be expected, however, based on the simple laws of supply and demand. Viewed as one of the remaining avenues to gain short exposure to the financial sector, the demand for the SKF and SEF were expected to explode. Essentially, all who were covering their existing short positions in response to the ban were expected to attempt to gain short exposure via these inverse financial sector ETFs.
Thus, ProShares contacted the American Stock Exchange this morning to note that it was not planning to create new shares in light of the SEC’s unprecedented ban on shorting 799 financial stocks. The AMEX responded by halting trading on the securities to prevent huge diversions between the indicative benchmark value and market price.
What are the likely effects of this until the end of the short-selling ban on Oct. 2?
As long as investment banks are concerned about capital reserves and the amount of risk on their books, they are unlikely to write swaps that short financials. Thus, existing shares of these inverse financial ETFs should continue trading, but new shares will not be created.
According to its prospectus, ProShares invests in only derivatives (including options, swaps, and forwards), so it does not actually short the stocks itself. An emergency amendment to the prospectus that would allow the issuers to engage in short selling is a possibility, but unlikely in our view.
So long as ProShares is unable to find counterparties to short the index, it will continue to allow only redemptions and not creation of new shares. This will prevent the ETFs from trading at a discount, but it will allow them to trade at a substantial premium (as no authorized participants can arbitrage the premium away by creating new shares and selling them until the premium disappears). We’ve already noticed the SKF trade at a 5%-6% premium over net asset value.
Even if investment banks stabilize and become willing to take risk onto their balance sheets before Oct. 2, the expenses on these funds will increase substantially as counterparties demand much higher interest payments to take on the unhedgeable risk. This cost would be expressed in the fund’s expense ratio.
In our opinion, the only hope of clearing this up before Oct. 2 is either an SEC clarification that broker/dealers can short stocks to hedge derivatives bought by ETF market makers, or a change to the ETF prospectuses that allows the funds themselves to short stocks directly.
What else can I do in the meantime?
Although investors cannot currently short sell individual financial stocks, there is no ban on shorting ETFs that court exposure to the sector, such as the Financial Select Sector SPDR (AMEX:XLF - News) (long financials) or the Ultra Financials ProShares (AMEX:UYG - News) (double-long financials). Individuals could short UYG instead of buying SKF, although we’d note that this leaves open the potential for bigger losses over multiday periods due to the compounding of leveraged daily returns. The Rydex Inverse 2x S&P Select Sector Financial (AMEX:RFN - News) is still trading and creating new shares, although it is also likely to have trouble finding willing counterparties if it faces a wave of new assets flooding in to short financials.
Investors who already own SKF or SEF can sell the funds at any time because trading has recommenced, and since redemptions are still allowed, there is little risk of selling at a discount. In fact, there may be a good chance of selling at a significant premium sometime before this situation resolves itself.
Will any other short ETFs be affected?
There is a chance that other short ETFs such as UltraShort S&P 500 ProShares (AMEX:SDS - News) may have similar trouble if they face a sudden influx of assets necessitating a large number of new swap agreements. However, these funds are not as large as UltraShort Financials (in terms of assets under management), and their underlying indexes have only a 15%-20% stake in the financial shares that cannot be shorted. Thus the risk to a counterparty from entering into those swaps with ProShares is much smaller than on the financial indexes, so broker/dealers are much more likely to continue entering swap agreements on the broad market indexes. The market for these broad index swaps is also much more liquid, so ProShares would be able to find more potential counterparties than with the financial sector index swaps, where the firm represents a much larger portion of the market.
ETF Analyst Bradley Kay contributed to this article.
sl
sorry for the long post..
sl
what is a better investment GLD or physical gold? And if you buy physical gold where do you hide it when the Fed’s come in ten years to take it away?
You want gold in your hot little hands.
whatever percent you decided to allocate, I’d get some silver as well.
Keep a tight lip, and if you do decide to do some midnight gardening, and may want to plant a firearm w/ your coins.
I don’t think it will ever get that bad, but the future is uncertain.
but hey, what do I know, I just fell of the turnip truck :)
SAS
Alia, Option ARM-ageddon WAS pretty good.
Yes, on Wed., I volunteered at school (first time ever…whew, who KNEW die cutting was so stressful?). I asked the teacher to move her back. She said they were leaning that way, anyway. So, don’t you know she comes home today with Test 2 and 20 of 20 correct. But, it’s done. And now, she’s crying that she doesn’t want to leave her math class. I can’t win.
Has anybody else every experienced Volunteer Black Hole? You do one thing and all of a sudden…you’re teaching after school science, planning a fair, reviewing some budget and have possibly agreed to four other things, but can’t remember what?
oh the sweet days… we were talking about comp killers and real-real estate. Now it is only about how to quickly step out the market (ANY market). Who cares about what’s-his-face from Hole in what wall-street?
And we can Elect our solution out of this mess? That is even worse than saying real estate is never going down.
OK, so paper doesn’t count but, real-estate is real, right? I cannot live in stock-paper and I do need a home. Am I the only one? Could I be the last buyer in NJ??
Tom (553)-
Welcome to my life.
I would guess you are right re the physical Gld. They just proved today they’ll destroy anything that is paper.
Paunederland
why buy and take on the financial obligations that entails????? rent! more house for your dollar without the risk!
Bank Failure Friday!!!
[just received from FDIC subscription.]
Press Release
Pioneer Community Bank, Inc., and the Citizens Savings Bank Acquire All Deposits of Ameribank, Inc., Northfork, West Virginia
All Insured and Uninsured Deposits Transferred to Acquiring Banks
FOR IMMEDIATE RELEASE
September 19, 2008 Media Contact:
David Barr
Cell: (703) 622-4790
dbarr@fdic.gov
Ameribank, Inc., was closed today by the Office of the Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was named receiver. The FDIC entered into purchase and assumption agreements with Pioneer Community Bank, Inc., Iaeger, West Virginia, and The Citizens Savings Bank, Martins Ferry, Ohio to take over all of the deposits and certain assets of Ameribank, Inc., Northfork, West Virginia.
Ameribank has five branches located in West Virginia and three branches located in Ohio. Pioneer Community Bank, Inc., Iaeger, West Virginia will assume all deposits for the five branches located in West Virginia. The Citizens Savings Bank, Martins Ferry, Ohio will assume all deposits for the three branches located in Ohio.
All depositors, including those with deposits in excess of the FDIC’s insurance limits, will automatically become depositors of the assuming institution where the customer opened the account for the full amount of their deposits. All deposits will continue to be insured with the new institutions. Therefore, there is no need for customers to change their banking relationship to retain deposit insurance. Brokered deposits are included in this transaction.
Branches in West Virginia will reopen on Monday. Ohio branches will reopen on Saturday. Over the weekend, customers of the banks can access their money by writing checks or using ATM or debit cards. Checks drawn on the banks will be processed normally. Loan customers should continue to make loan payments as usual.
Pioneer Community Bank, Inc., and The Citizen’s Saving Banks’ acquisition of all deposits was the “least costly” resolution for the Deposit Insurance Fund compared to all alternatives because the expected losses to uninsured depositors were fully covered by the premium paid for the banks’ franchises.
As of June 30, 2008, Ameribank, Inc. had total assets of $115 million and total deposits of $102 million.
Customers who would like more information on today’s transactions should visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/ameribank.html. They may also call the FDIC toll-free about both institutions at 1-877-894-4710 until 9:00 p.m., this evening; Saturday and Sunday from 8:00 a.m. to 5:00 p.m.; and thereafter from 8:00 a.m. to 6:00 p.m. All time are Eastern Standard Time.
sl
sl (576)-
Thanks for all that. I’m a little too scattered to have done the research.
Seems like the short story is: the gubmint rigged the market and screwed up everybody and everything.
584 moderated! No dirty words…
BANK FAILURE FRIDAY CONTINUES!!!!!
Sep 19, 8:24 PM EDT
Regulators shut down Ameribank in West Virginia
By MARCY GORDON
AP Business Writer
Latest News
Regulators shut down Ameribank in West Virginia
Morgan Stanley, others may get federal lifeline
Fed, ECB pump billions into money markets
Buy AP Photo Reprints
Your Questions Answered
Ask AP: Candidate languages, emergency personnel
WASHINGTON (AP) — Federal regulators have shut down Ameribank Inc., a small bank in West Virginia, saying it overextended loans for the rehabilitation of distressed properties.
It was the 12th failure this year of a federally insured bank.
The Federal Deposit Insurance Corp. has been appointed receiver of the bank, based in Northfork, W.Va. It had $115 million in assets and $102 million in deposits as of June 30.
HE^3 [570]
>> Can they take gold teeth?
The Nazi’s did…
CNBC talking heads mentioned how the gold price has been driven up by flight to safety and “fear buying”. I may live to regret it but I decided to take a wait and see on my metals purchasing until next week. Meant to get in week ago… should coulda woulda… just like I meant to sell off my remaining LEH position two weeks ago…
Part of me feels if things really got that bad, potassium cyanide would be my friend.
“was it patriotism (however misguided), money or boredom that sucked you in?”
It was thrill of the chase.
SAS
Welcome to investor gulag.
________
Clot (571),
LOL
Thanks for the info. I guess we shouldn’t expect Cox to concern himself with such trivial details, when rigging the game-
enjoy!!
To: “All Wachovia Colleagues”
From: “Corporate Communications”
Date: 09/16/2008 07:46PM
Subject: Memo from Robert K. Steel - Update on Current Environment
DATE: Sept. 16, 2008
TO: All Wachovia Colleagues
FROM: Robert K. Steel, CEO
RE: Update on Current Environment
After an eventful few days for our industry, it seems appropriate to share some perspective and provide an update on where Wachovia stands. It is important that we all have a clear understanding of the current environment so that we can characterize our company clearly and accurately.
First, on the internal front, we announced earlier today that Kenneth J. Phelan is joining Wachovia from J.P. Morgan Chase as our Chief Risk Officer. We are delighted that a leader of Ken’s caliber is eager to join the Wachovia team. A rigorous risk culture is key to Wachovia’s future, and Ken is the right leader to continue building on our solid foundation. With him and our new Chief Financial Officer David K. Zwiener on board in the next few weeks, our management team is complete. We look forward to working with them, other leaders and all of you as we work together to address Wachovia’s challenges, build on our strong core businesses and move forward.
From an external perspective, the financial landscape is undergoing unprecedented change. We are watching these events carefully, and we can expect continued volatility in the near term. Keep in mind, though, that Wachovia is strong, stable and well capitalized.
With regard to recent events involving Lehman Brothers and AIG, let me provide a few specific observations related to those firms:
• Following the Lehman Brothers bankruptcy, we have made great efforts in the past two days to unwind certain transactions with Lehman Brothers and replace Lehman with different counterparties. Overall, our direct exposure to Lehman Brothers is modest and consists primarily of support agreements from Wachovia to Evergreen money market funds. Under these agreements, Wachovia will support the value of Lehman credit in the amount of approximately $494 million held in the funds. We’ll continue to monitor developments relating to Lehman Brothers closely.
• Like many financial institutions, Wachovia has relationships with American International Group, or AIG, a significant global provider of financial services. We believe any direct exposures we may have to AIG are manageable, and our team will continue to assess AIG’s restructuring process.
These external events, and others, are redefining the financial services industry. Wachovia’s advantages, however, remain: best-in-class retail banking with top-notch customer service, one of the largest brokerage platforms covering the affluent markets, and expertise to meet the specialized needs of middle market and large corporate customers.
We cannot predict with certainty how events will play out. But let me be clear: For years Wachovia has been a forward-thinking force to help fuel business growth, create and manage personal wealth and build strong communities. We intend to remain focused, continue serving customers like no other competitor and utilize our many skills and talents.
Thank you for continuing to do your part.
“Part of me feels if things really got that bad, potassium cyanide would be my friend.”
its ok bloke, world ain’t going to end.
spend a night in a fox hole out on the Cam Lo. you will change your mind real quick.
SAS
seneca,
I am thinking about buying a few tons of NPK(i).
hey 3b can i borrow 1 of your silo’s? i’ll cut you in on the deal?!?!?
If McCane comes to power, looks like we will have to bail out healthcare..
Here are some pearls of wisdom -
“Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.”
SL (575),
Thanks for the post; interesting, albeit a bit discouraging since I was all ready to up the ante. Makes sense about the counterparties not being able to hedge out their risk - just need go find some of those euphoric bulls to take the other side.
Shorting a long ETF is a bit more risk than I wanted to play with myself….
Oh well. At least I can find solace in principle, in the cell next to Clot. ;)
No time for polls. SKF hit $87 and SRS closed under $69.
Last week, people on this board were so excited on making big bucks on SKF in minutes. I hate to say i told you 3 things a few weeks ago:
1) SKF is 2X of financials (precisely it is -2X);
2) short squeeze can easily make a 10 pts move;
3) before thinking how to take profit at $150, think what to do if it goes to $60 to $80.
> 99# Stu Says:
September 19th, 2008 at 8:41 am
Bi:
How about a report on the polls?
oops
sorry, didnt look at your post SL before duplicating :(
I was just watching “The Soup”. Funniest show.
HC
594 - bi
You cant play a game if you change the rules midway.
Lets review this in 2 months.
-Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death.
-What luck for the rulers that men do not think.
-The great masses of the people … will more easily fall victims to a big lie than to a small one.
*Adolf Hitler
594,
Quite informative. A leveraged ETF is volatile?
Who knew.
#578 Volunteer Black Hole - Yes, I have been there. It creeps up on you incrementally until it takes over way too much of your time. I finally learned to politely decline by saying, “I’m sorry, my schedule has changed and I can’t do that.” It seemed to work.
kettle1,
I do live with alot of guilt and regret, that for sure.
in any case….
SAS
# kettle1 Says:
September 19th, 2008 at 9:38 pm
1 reason i disagree with us goiing strait to hyperinflation. hyperinflation would wipeout the debts that the average american has. that debt is the core wealth of a large number of corporations. the US gov is too tightly interconnected with corporate america to wipe out their source of wealth
Unfortunately Hyperinflation is a positive feed-back phenomenon. As much as big corporations want to believe they can control it and not allow it, while printing/creating large sums of money out of magnetic pieces on the hard-drives, it will happen, many wealthy people will lose their money as result and economy will suffer greatly.
but again - it is USA and staff like this just can not happen here.
#589 I know Wachovia is in the swamp of toxic sludge too, but I gotta admit, I always get great service at my local branch. Maybe I’m just a sucker for the small stuff, but I like it when they take the trouble to call me by name, I like that the manager recognizes me and dumbest of all, I like it when they notice I have my dog in the car with me and I get a dog biscuit back along with my deposit slip. I don’t trust them as far as I can throw a piano, but at least they are nice to me.
surprised that nobody has said this already:
China can “suck it”!
The way these bail-out shenanigans are being played out and sold, frighteningly remind me of the way the Iraq war was sold to the public.
I cannot believe that Paulson and Bernanke did not see this coming till last week. If so, why did they keep insisting that all is well. I understand that they do not want to spread panic, but what prevented them from letting Congress know. And now, they scare the sh!t out of them just before Congress is going to recess.
They want to hack a plan of this magnitude and crank it out over a weekend!!! The taxpayers do not know what they are getting into, no congressional hearings…nothing.
Just the fear of a systemic meltdown will make Congress sign the legislation without proper due diligence.
Why do I think that this has been the plan all along?
Or did i just buy a tin hat?
are you drunk already? it was at noon?
335# Clotpoll Says:
September 19th, 2008 at 12:17 pm
SKF trading again. Time to double down.
I knew I couldn’t go a whole day without being put in moderation.
Al
the coming tsunami cannot be stopped. we agree on that. but i challenge someone to explain how we can deleverage down from 30:1 to 10:1 (10:1 as an example) without experiencing deflation. we are talking about 10’s of trillions of dollars. if bernanke and friends try to print that they will collpase the bond market and kill the US$ in very short order. even if they try and cend up collapsing the bond market you still have net monetary deflation
Everybody has guilt. Only a few know it.
Kettle, I did enjoy the Wachovia information. Friends there will lose their jobs. A lot of hard-working people will go down with no future in banking.
Those aren’t motile, blob-like talking head salespeople who can morph at will as industries expand and contract.
Next bank, same story.
Steve, 593…. [593?!? gawd]
Yep… pass the bread and water… I’ll be in the cell with the rest of you…
I think I’ve used the word “unprecedented” about a hundred times today…
On a happier note… Warren Buffett and I agree on a stock pick!! Wooo hoo.
sl
Vic,
Bingo! give the man a prize!
They want to hack a plan of this magnitude and crank it out over a weekend!!! The taxpayers do not know what they are getting into, no congressional hearings…nothing.
Why do I think that this has been the plan all along?
may i remind you of how the FED was created in the first place???
The Federal Reserve Act (ch. 6, 38 Stat. 251, enacted December 23, 1913, 12 U.S.C. ch.3)
Schiff on cnn- a cooper now
vic…603 [603!!??]
I’m a dime store dolt and one look at the Case-Shiller graph — the one I have been printing on a daily basis — the one that starts at 1890 — was enough info for me to know we weren’t buying in 06.
I still credit grim with that chart and saving my financial ass.
Look at the graph.. NOTHING should rise in price like that.
Nothing.
Why didn’t the idiots who were supposed to be overseeing this housing and credit bubble PUT A HALT to it?
THEY should be footing the bill for this f’in mess.
Sorry. I’m just bitter. I’ll go back to my cell next to Clot and Steve
sl
SAS
wasnt trying to guilt you. i am not one to judge. we all have skeletons in the closet, the only difference is order of magnitude
#574 -
i don’t know about reinvestor’s original plan, or any of his plans…
but why wouldn’t stretching out the amortization and reducing the rates work?
mathematically? politically?
would the mortgages not be saleable?
SL
Look into the world bank and the IMF. things might make more sense to you then
“For just a bit more, one has to realize who the person, next to Ronald Reagan, is most responsible for the economic disaster that has befallen America. And, that person’s name is Phil Gramm. It was Senator Phil Gramm (R-TX) who, along with James Leach (R-IA), authored the “Financial Services Modernization Act” (1999), which repealed significant parts of the Glass-Steagall Act (passed during the Depression to prevent Depression-era conditions from being repeated in the future). This new Act was designed to permit the combining of retail banks and S&Ls with investment (gambling) and insurance companies. Voila, institutions that for a long time made it absolutely safe for Americans to save and borrow, were now a thing of the past, and whatever the combined institutions wanted to do was fair game. Yes, predatory capitalism was made the law of the land.
Next, a year later, Phil Gramm, as chairman of the Senate Finance Committee, introduced legislation that completely deregulated the stock market (allowed “dark markets”, as they say). This legislation was called the “Commodity Futures Modernization Act”, and to get it passed, Senator Gramm added it as a 262-page rider to the 11,000-page omnibus appropriations bill (and get this!) just as Congress was recessing for Christmas break! Obviously, there were no committee reviews, and no one knew what was in the rider. Pretty smooth!!! Its first production was to make the “Enron Loophole” possible! So, the Republicans got what they have dreamed of for years – a deregulated financial market without oversight. Sweet, sweet, sweet. Now, plunderers, under this new predatory capitalism mode, could go about doing their dirty work and, as a “thank you”, contribute over and over again to the Republican Party. It’s a win-win for the plunderers and the Republican Party, except they are now getting exposed destroying the U.S. economically. (As smart people have said, “the U.S. will not be destroyed from without; it will be destroyed from within”.)