tag:blogger.com,1999:blog-6492542366661862113.post1606300682081945671..comments2023-10-31T01:32:09.169-07:00Comments on The Housing Time Bomb: Beware of Bailout BlindnessJeffhttp://www.blogger.com/profile/04450070920047311928noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-6492542366661862113.post-72003536277720406872008-09-26T11:12:00.000-07:002008-09-26T11:12:00.000-07:00art & jeff,yes, the Weiss Research was not exa...art & jeff,<BR/><BR/>yes, the Weiss Research was not exactly flattering to JPMorganChase. Ive already circulated that white paper to my lending & underwriting colleagues.<BR/><BR/>Im glad more congressmen are seeing this is no longer a subprime mortgage problem nor was the problem CAUSED by subprime borrowers. Yes, the distress 1st surfaced w/subprime delenquencies, but Weiss points out all the other excessively leveraged debt that threatens banks & insurers and which has leaped far beyond, in $s, sub-prime or the GSEs.<BR/>Sadly, the simple-minded general media cant shake that 'narrative story', favored by their weaker writers, that this is still a subprime problem and not a larger, broader, debt unwind problem.Avl Guyhttps://www.blogger.com/profile/12298355297869341807noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-2301533709741563962008-09-26T10:42:00.000-07:002008-09-26T10:42:00.000-07:00Art Great info. Thanks.Thats I have been thinking...Art <BR/><BR/>Great info. Thanks.<BR/><BR/>Thats I have been thinking about today. The market cheered that the private sector took care of this without costing the taxplayer anything.<BR/><BR/>The problem is the two big boys(BofA and JPMorga) that are buying everything are becoming bloated pigs.<BR/><BR/>I gotta think they are are about as stuffed as a family after Thanksgiving.<BR/><BR/>The "hide the sausage" continues!Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-25030226394755917312008-09-26T09:59:00.000-07:002008-09-26T09:59:00.000-07:00Have you guys noticed how much assets JPMorgan hav...Have you guys noticed how much assets JPMorgan have been acquiring while everyone around is broke? Here is the food for though, JPMorgan is the biggest share holder of FED, FED shares can't be bought or sold, they only can be acquired thru mergers or passed down to a family member.<BR/><BR/>Also, JPMorgan has invented derivatives back in 1995, and holds 50% (90 Trillion) of all derivative market.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-15012879999961505582008-09-26T07:40:00.000-07:002008-09-26T07:40:00.000-07:00avlYeah. I think they are trying to be prepared f...avl<BR/><BR/>Yeah. <BR/><BR/>I think they are trying to be prepared for any scenario.<BR/><BR/>Interesting trading this morning. It looks like Wall St. is still betting a deal gets done. <BR/><BR/>I thought we would be lower today.Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-43001045275628774052008-09-26T02:57:00.000-07:002008-09-26T02:57:00.000-07:00Jeff, ur note on the NorthComm joint command is go...Jeff, ur note on the NorthComm joint command is good; I forgot they can also mobilize chunks of the Homeland Security network too.Avl Guyhttps://www.blogger.com/profile/12298355297869341807noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-41803536478427695452008-09-26T02:54:00.000-07:002008-09-26T02:54:00.000-07:00Hmm...will a fist fight break out in the Cabinet R...Hmm...will a fist fight break out in the Cabinet Room of the White House or halls of Congress first, before a FOMC mtg?<BR/>I wager two shares of FNM stock that we see fists flying in Congress first. Man, Im so glad I did two nights of phoning & emailing to the republicans! I may get a fist fight to boot on top of stalling the dreaded bailout.<BR/><BR/>NY Times: Bailout Plan Stalls After Day of Talks; Paulson Heads Back to Capitol Hill<BR/>The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, warnings from an angry president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support. <BR/>...<BR/>It was an implosion that spilled out from behind closed doors into public view in a way rarely seen in Washington. Left uncertain was the fate of the bailout...<BR/>The talks broke up in angry recriminations, according to accounts provided ... and were followed by dueling press conferences and interviews rife with partisan finger-pointing.<BR/><BR/>http://www.nytimes.com/2008/09/26/business/26bailout.htmlAvl Guyhttps://www.blogger.com/profile/12298355297869341807noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-62536104349157240862008-09-25T21:20:00.000-07:002008-09-25T21:20:00.000-07:00Wow. Fisher knocked Ben right over the head with ...Wow. Fisher knocked Ben right over the head with this speech.<BR/><BR/>Maybe they will come to blows at the next Fed meeting!<BR/><BR/>"Sept. 25 (Bloomberg) -- Dallas Federal Reserve Bank President Richard Fisher said the proposed $700 billion rescue of financial institutions backed by Fed Chairman Ben S. Bernanke would plunge the U.S. government deeper into a fiscal abyss.<BR/><BR/>The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions would put ``one more straw on the back of the frightfully encumbered camel that is the federal government ledger,'' Fisher said today in the text of a speech in New York. ``We are deeply submerged in a vast fiscal chasm.''<BR/><BR/>Fisher made the comments as the central bank expands its role in the biggest government intrusion into markets since the New Deal, with Bernanke trying to persuade Congress to approve Paulson's bailout."<BR/><BR/>http://www.bloomberg.com/apps/news?pid=20601087&sid=abK2j4XZsBuU&refer=homeJeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-81057366975991202282008-09-25T17:52:00.000-07:002008-09-25T17:52:00.000-07:00AvlWell Said!! I the 1970's may be a best case sc...Avl<BR/><BR/>Well Said!! I the 1970's may be a best case scenario at this point.<BR/><BR/>Your point on the National guard is a great point. <BR/><BR/>Check this out. It appears the government is already mobilizing the national guard to contro things in the states. <BR/><BR/>Perhaps they are afraid the pitchforks are about to come out?<BR/><BR/>"But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities."<BR/><BR/>http://www.armytimes.com/news/2008/09/army_homeland_090708w/Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-80616027973676761082008-09-25T17:36:00.000-07:002008-09-25T17:36:00.000-07:00A couple of points:1. The FDIC is not likely to d...A couple of points:<BR/>1. The FDIC is not likely to declare any bank insolvent IF it lacks the manpower to process it and does not have a buyer/receiver lined up. To grasp this mgmt tactic, think of State Troopers on a highway where EVERYONE is speeding 20mph OVER. Troopers only act on the workload they can handle and ignore all other offenders. The greatest risk we have in banking over the next 30-90 days are not declarations of insolvencies, it is bank runs. If FDIC is nly gonna deal with their list, then cool. Jeff, ur point is well taken, that gives the tiny minority that would actually read a 24-page pdf (like me & u) time to shift their money to a healthier bank.<BR/><BR/>2. The lesson from #1 is to manage the reality of people behavior & group behavior, not manage to 'enforce the rules' just because they are on the books.<BR/><BR/>3. Starting from the worst case & working back: no single physical asset in the US will evaporate under any bankruptcy or default, they'll simply have new valuations, new liabilities, new owners and it will all be tied up in log-jam courts if it unfolds too quickly. Untangling new ownership will prove to be too time-consuming for basic needs, so expect multiple ‘Defacto’ battlefield decisions in this 'worst case'; people will learn to operate in a bizarre world of IOUs & bartering. As long as the physical assets are functioning, the foundation for starting a recovery will always be there. Who owns who what will flow thru the courts in time.<BR/><BR/>4. I'd know #2 is closer at hand AND that someone is in charge - when National Guard & Reserve forces are mobilized, and someone learns that reserve forces are being pulled out of Iraq and 'staged', in order to facilitate # 3.<BR/><BR/>And that's the worst case in terms of the next 1-to-90 days. For guys like me, grasping the worst case is essential; then I work towards likely cases/outcomes as oppossed to the worst.<BR/><BR/>A dose of mega-inflation is not an unlikehood somewhere along the line. I feel 1973-1984 is an instructive 11 year crisis. We went thru 4 presidents, double-digit wage-inflation and price inflation, gas lines & rationing, athree recessions, 2 bouts with 18-22% interest rates, joblessness that hit 40% in some communities & neighborhoods, and the destruction of an entire way-of-life: manufacturing and production.<BR/>We can handle today's crisis.<BR/>What we're missing is accepting that we will not emerge from this (in 2018?) in the same shape (lotsa wealth & inflated assets, tons of debt)we came in.Avl Guyhttps://www.blogger.com/profile/12298355297869341807noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-71920466422444325662008-09-25T17:20:00.000-07:002008-09-25T17:20:00.000-07:00WAMU is gone. It was seized by the FDIC and then ...WAMU is gone. It was seized by the FDIC and then acquired by JPMorgan. WAMU equity holders are wiped out:<BR/><BR/><BR/>"Sept. 25 (Bloomberg) -- Washington Mutual Inc. was taken over by the Federal Deposit Insurance Corp. in the largest failure of any bank in history, CNBC reported, without citing anyone. <BR/><BR/>The FDIC will sell the bank's $130 billion deposit base to JPMorgan Chase & Co. for an undisclosed sum, CNBC said."<BR/><BR/><BR/>http://bloomberg.com/apps/news?pid=20601087&sid=ai28jpSnP4IU&refer=homeJeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-63409805609690928312008-09-25T17:18:00.000-07:002008-09-25T17:18:00.000-07:00OpporI think this thing just spiraled out of contr...Oppor<BR/><BR/>I think this thing just spiraled out of control. Leaks everywhere and no money left to plug them. Things are unraveling at lightning speed. <BR/><BR/>CNBC has breaking news every 5 minutes . They are doing special coverage tonight. <BR/><BR/>I think this has turned into a political stick of dynomite right before the election. Lots of grandstanding and posturing. <BR/><BR/>It looks like the republicans are serious about turning this deal down. This deal might be dead without major changes. <BR/><BR/>Equities will plunge if this bill gets tied up. Ben will probably want equities to tank because it might increase the chances the bill passes.<BR/><BR/>I wouldn't want to be long any equities while this is being debated.Jeffhttps://www.blogger.com/profile/04450070920047311928noreply@blogger.comtag:blogger.com,1999:blog-6492542366661862113.post-65793369008618311522008-09-25T17:00:00.000-07:002008-09-25T17:00:00.000-07:00We discussed intentional inflation as a possible r...We discussed intentional inflation as a possible remedy to our current situation. With the attempt to put a floor under house prices and the ridiculous level of borrowing\bailing out, this scenario seems to be more realistic. Could it be part of the plan or are they simply trying to get throught he election?<BR/><BR/>I have to believe that at least someone behind the scenes knows what he is doing. Although in hindsight it doesn't appear that way.Anonymousnoreply@blogger.com