Could they be right? Maybe our political analysts can tell us if we should short bank stocks (if we were allowed to)? In the long run, we're all dead. John Maynard Keynes
If they and Bernanke are loooking to a one last dip into the Treasury's pockets before bailing in January, then this could last forever if the Dems hold to protecting the US govt finances. After all, this plan is no rush job cobbled together as a panic measure, however much it is presented as such. It has been months in the making and has been carefully crafted to a specific agenda determined some while back.
However, if the dems resist the siren sounds of republicans running around shouting "fire"and work towards something akin to the Dodd plan, then it's entirely likely it could be enacted quickly unless the repugs resist them because it doesn't meet their "requirements".
I guess it all comes down to what the government's and the Fed's real intent is and how much the legislators are prepared to compromise.
I'm more interested in whether McCain will hide from the debate and what the media will say if/when he does. Yesterday was just so entertaining. I thought it couldn't get better when I went to bed, but then Letterman happend so's I could laugh this morning away. It's funny how if a dem did a stunt like that their candidacy would be toast, but the tradmed are still desperately trying to take McCain seriously. keep to the Fen Causeway
After all, this plan is no rush job cobbled together as a panic measure, however much it is presented as such. It has been months in the making and has been carefully crafted to a specific agenda determined some while back.
March 2008
May 2008. US are witnessing implementation of these "objectives." Pending further Congressional approvals:
V Intermediate-term recommendations (89)
This chapter describes recommendations focused on eliminating some of the duplication in the US regulatory system, but more importantly on modernizing the regulatory structure applicable to certain sectors in the financial services industry (i.e. banking, insurance, futures, and securities) with the current framework. These recommendations serve as a useful transition to the optimal regulatory structure. However, each intermediate-term recommendation stands on its own merits, as well as on its merits as a transitional element.
VI The Optimal regulatory structure (137) VII Conclusion
::
peenackers always broadcast. And their propaganda organs always fill the void with bullshit.
All the short-term recommendations are now law.
Mr Dodd and colleagues will institute intermediate recommendations. While voters argue whether Treasury can make a profit for them. Diversity is the key to economic and political evolution.
I remind you: It took FEMA four days to get water to the Super Dome. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp. ``Its benefits, in its current form, will be largely limited to investment banks and other banks that have aggressively written down the value of their holdings and have already recognized the attendant capital impairment,'' Jeffrey Rosenberg, Bank of America's head of credit strategy research, wrote in a report dated yesterday, without identifying particular banks.
``Its benefits, in its current form, will be largely limited to investment banks and other banks that have aggressively written down the value of their holdings and have already recognized the attendant capital impairment,'' Jeffrey Rosenberg, Bank of America's head of credit strategy research, wrote in a report dated yesterday, without identifying particular banks.
But that point is the plan is likely to help the banks that least need it from a solvency point of view. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
He knew what was coming. He and Bernanke just expected the Fed's balance sheet to last a bit longer. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Because they have significant cash assets they can afford to go on a buying spree after prices stabilise.
Is there a downside here? (Not counting PR loss of face, which only really matters if it's translated into policy.)
The will need to go on a buying spree for regional depository banks. At least the suggestion is that MS will merge with a large traditional bank but that GS will acquire some small ones. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
viz.
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
Does Dodd's plan eliminated that "right"? I dunno. What I do know is the "crisis" amounts to controlled demolition by FRB "core banks" and "primary dealers."
the OCC supervises the five largest bank derivatives dealers in the United States.
See this article on industry consolidation following the S&L RE scam. Regional banks and remaing S&Ls are now being seized by FDIC, predictably, slowly and steadily. Diversity is the key to economic and political evolution.
You will not get that story on Krugman's blog. But it might get a mention in one of his many, many books. I wouldn't know though. Diversity is the key to economic and political evolution.
Deal said to be near on big financial bailout (w/update: looks like we get equity)
He was even able to pronounce "mortgage-backed securities" properly. It was weird.
Whoa. Apocalypse now.
McCain says the world will collapse if he doesn't go and get involved, and that the bill would not pass as currently constructed, even though he's not even on the relevant committee.
As McCain has been acting like a complete nutcase for the past 24 hours, I'm inclined to believe Obama. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
It's as if they had caved on everything the Dems would have demanded in 2002 just to get the Iraq war authorisation. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
They drank the kool-aid.
Oh - but never mind, Le Canard Enchainé reported Wednesday that French traders that come back to France and work between one day and one month (but not more) in France after losing their job in the UK apparently get indemnified on the basis of their UK salary - ie they get the ASSEDIC ceiling which is around 5000 eruos per months. In the long run, we're all dead. John Maynard Keynes
House Republicans are saying they are getting 10/1 no/yes calls from their constituents.
Bush has nothing to offer the House Republicans. McCain has no leverage over the the House Republicans. The House Republicans are in full revolt against their leadership.
Prognosis: No Deal will be reached.
That's that then. McCain and Boehner torpedoed the bill.
Fair enough. It's their funeral.
The Dems should load the bill up with every little thing they could ever want, throw it on the table, and say, "This is our only offer, assholes. Take it or leave it, it's your funeral." Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
By the way, do you have a link to those UK betting site aggregators? Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
incidentally, the more tab at the top of that page gives current odds being offered by each individual bookmaker on a state by state basis as well. Any idiot can face a crisis - it's day to day living that wears you out.
Meanwhile, McCain and Idiot have moved the economy front and center. That's an issue Dems win by double digits.
Since No Deal then McCain either backs off on his No Debate pledge or gives Obama 2 hours free TV time.
Hey! I'll take it all.
Credit Derivatives Market Shrinks 12%, First Decline Sept. 25 (Bloomberg) -- Credit-default swap dealers reduced outstanding contracts for the first time amid efforts to cut risk by cleaning up the derivatives market. The volume of trades in the worldwide market fell to $54.6 trillion from $62 trillion in the first half, the International Swaps and Derivatives Association said in a statement yesterday. It was the first decline since New York-based ISDA started surveying traders seven years ago. Credit-default swaps grew 100-fold since 2001 as insurance companies, hedge funds and investors used the derivatives to protect against bond losses and speculate on companies' abilities to pay their debt. Traders are unwinding trades and protecting against losses after credit markets froze amid the worst U.S. housing crisis since the Great Depression. Regulators are starting to call for more oversight of the unregulated market following the bankruptcy last week of Lehman Brothers Holdings Inc.
Sept. 25 (Bloomberg) -- Credit-default swap dealers reduced outstanding contracts for the first time amid efforts to cut risk by cleaning up the derivatives market.
The volume of trades in the worldwide market fell to $54.6 trillion from $62 trillion in the first half, the International Swaps and Derivatives Association said in a statement yesterday. It was the first decline since New York-based ISDA started surveying traders seven years ago.
Credit-default swaps grew 100-fold since 2001 as insurance companies, hedge funds and investors used the derivatives to protect against bond losses and speculate on companies' abilities to pay their debt. Traders are unwinding trades and protecting against losses after credit markets froze amid the worst U.S. housing crisis since the Great Depression. Regulators are starting to call for more oversight of the unregulated market following the bankruptcy last week of Lehman Brothers Holdings Inc.
U.S. Economy: Home Sales, Durable Goods Orders Drop Sept. 25 (Bloomberg) -- Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday. Home sales decreased 11.5 percent, more than forecast, to the lowest annual rate since the 1991 recession and the median price sank to a four-year low, figures from the Commerce Department showed today in Washington. Bookings for goods meant to last several years declined 4.5 percent and orders excluding transportation equipment were down 3 percent. The credit crisis that brought down Lehman Brothers Holdings Inc. and American International Group Inc. this month is making it harder for companies to invest in new equipment and for home buyers to get financing. Bernanke yesterday told Congress the economy has ``decelerated broadly,'' feeding speculation that the Fed will lower interest rates by year-end.
Sept. 25 (Bloomberg) -- Sales of new homes in the U.S. fell in August to a 17-year low and orders for durable goods dropped more than forecast, evidence of the mounting risks to the economy that Federal Reserve Chairman Ben S. Bernanke warned of yesterday.
Home sales decreased 11.5 percent, more than forecast, to the lowest annual rate since the 1991 recession and the median price sank to a four-year low, figures from the Commerce Department showed today in Washington. Bookings for goods meant to last several years declined 4.5 percent and orders excluding transportation equipment were down 3 percent.
The credit crisis that brought down Lehman Brothers Holdings Inc. and American International Group Inc. this month is making it harder for companies to invest in new equipment and for home buyers to get financing. Bernanke yesterday told Congress the economy has ``decelerated broadly,'' feeding speculation that the Fed will lower interest rates by year-end.
And all these "20-year lows" neglect the growth in US population in the meantime... In the long run, we're all dead. John Maynard Keynes
LONDON (Reuters) - Paulson and Bernanke's 'Hold-to-Maturity' plan is really just the new 'Mark-to-Myth', and even its heroic proportions are not likely to paper over solvency problems in the banking system. The Federal Reserve Chairman told lawmakers the plan to spend $700 billion to buy up bad assets would allow banks to avoid unloading loans at fire sale prices. "Auctions and other mechanisms could be devised that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets," Ben Bernanke said, trying to persuade a skeptical Congress that the plan he has been pushing along with Treasury Secretary Henry Paulson will give value for taxpayers' money. Banks are forced to mark their assets to market, a process that has become increasingly painful and likely to lead to bank failures as a shortage of investors and the swiftly declining performance of the underlying collateral have driven prices lower. As many securities are so complex that they seldom trade, and given that few want to buy them now anyway, banks sometimes must mark the assets according to modeled prices, a process sometimes referred to as 'marking-to-myth' by doubters. ... If it is a subsidy, what not call it one? And though $700 billion is a lot of money, it is not enough to wipe the slate clean and leave banks with workable balance sheets; the plan only works if that $700 billion, which equates to far less in terms of capital relief, is leveraged by attracting new money from outsiders now sitting on the sidelines. But I find it hard to credit that the sovereign wealth funds of the world, having already been burned though their disastrous investments in banking last year and this, will feel that a price arrived at through what promises to be an opaque process gives them the confidence to buy in now. "It is hubris to say they are going to set the prices and everyone will just mark to market their assets accordingly," said Tim Brunne, a credit strategist at Unicredit in Munich. ... Alternatively, the government, which has bottomless pockets and no liquidity risk, may simply arrive at a price based on what it, or its advisors -- and one wonders who they could be and if they saw this whole disaster coming -- think is a fair bet on what repayment flows will be. There is also the issue of protecting the taxpayers, who may justifiably argue that they should share in the benefit of any subsidy offered to the industry in return for footing the bill. But taking equity stakes in banks in exchange for below market funding or asset sales probably would, as it did with Fannie Mae and Freddie Mac, choke off any hope of new equity infusions from actual investors seeking profits. It's easy to understand why the United States is placing a low value on moral hazard and is considering an apparently indiscriminate reward for those who took too much risk. The stakes are very high, and a disorderly deleveraging will be worse than an orderly one, even if the orderly one isn't perfect. The debate about what whether or not the U.S. will need a massive intervention of public capital into its banking system and wider economy is over. The crisis requires a huge outlay of public funds, both to clean up after the many banks that will fail and to soften the blow to homeowners and consumers.
The Federal Reserve Chairman told lawmakers the plan to spend $700 billion to buy up bad assets would allow banks to avoid unloading loans at fire sale prices.
"Auctions and other mechanisms could be devised that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets," Ben Bernanke said, trying to persuade a skeptical Congress that the plan he has been pushing along with Treasury Secretary Henry Paulson will give value for taxpayers' money.
Banks are forced to mark their assets to market, a process that has become increasingly painful and likely to lead to bank failures as a shortage of investors and the swiftly declining performance of the underlying collateral have driven prices lower.
As many securities are so complex that they seldom trade, and given that few want to buy them now anyway, banks sometimes must mark the assets according to modeled prices, a process sometimes referred to as 'marking-to-myth' by doubters.
...
If it is a subsidy, what not call it one?
And though $700 billion is a lot of money, it is not enough to wipe the slate clean and leave banks with workable balance sheets; the plan only works if that $700 billion, which equates to far less in terms of capital relief, is leveraged by attracting new money from outsiders now sitting on the sidelines.
But I find it hard to credit that the sovereign wealth funds of the world, having already been burned though their disastrous investments in banking last year and this, will feel that a price arrived at through what promises to be an opaque process gives them the confidence to buy in now.
"It is hubris to say they are going to set the prices and everyone will just mark to market their assets accordingly," said Tim Brunne, a credit strategist at Unicredit in Munich.
Alternatively, the government, which has bottomless pockets and no liquidity risk, may simply arrive at a price based on what it, or its advisors -- and one wonders who they could be and if they saw this whole disaster coming -- think is a fair bet on what repayment flows will be.
There is also the issue of protecting the taxpayers, who may justifiably argue that they should share in the benefit of any subsidy offered to the industry in return for footing the bill.
But taking equity stakes in banks in exchange for below market funding or asset sales probably would, as it did with Fannie Mae and Freddie Mac, choke off any hope of new equity infusions from actual investors seeking profits.
It's easy to understand why the United States is placing a low value on moral hazard and is considering an apparently indiscriminate reward for those who took too much risk.
The stakes are very high, and a disorderly deleveraging will be worse than an orderly one, even if the orderly one isn't perfect.
The debate about what whether or not the U.S. will need a massive intervention of public capital into its banking system and wider economy is over. The crisis requires a huge outlay of public funds, both to clean up after the many banks that will fail and to soften the blow to homeowners and consumers.
mark to myth, indeed... ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
WASHINGTON -- The financial services industry, which has spent billions on lobbying and campaign contributions over the last decade, is scrambling to make its case for a proposed $700 billion bailout plan amid deep public skepticism. Wall Street firms, commercial banks and insurers are lobbying on an array of issues -- from beating back proposals to make it easier to reduce mortgage debts in bankruptcy courts to fighting, unsuccessfully so far, to retain control over executive pay. "You have a feeding frenzy going on," said Ellen Miller, executive director of the Sunlight Foundation, a non-partisan watchdog group.
Wall Street firms, commercial banks and insurers are lobbying on an array of issues -- from beating back proposals to make it easier to reduce mortgage debts in bankruptcy courts to fighting, unsuccessfully so far, to retain control over executive pay.
"You have a feeding frenzy going on," said Ellen Miller, executive director of the Sunlight Foundation, a non-partisan watchdog group.
pirhana alert?
just got through seeing a report on floating motor home-cruisers, giant gin-palaces, eco-nightmares, and how sales are rising for these monstrosities!
the reporter said there were a lot of customers worth $1-10,000,000, newly arrived on the market.
lobbyist getaway? ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
