Congratulations Taxpayers, you now own an insurance company

[Insomniac]

Correct, so how does it get fixed? Nobody can figure it out and nobody knows what will happen with the various "solutions". There has never been a problem like this.

Seems like there are two ways to go about it. 1. Do nothing. 2. Try and stop it. The government is going with #2 figuring they can cushion it and turn it around quicker than doing nothing. We'll never know how doing nothing would've ended.

[SurfaceUnits]

Seems like there are two ways to go about it. 1. Do nothing. 2. Try and stop it. The government is going with #2 figuring they can cushion it and turn it around quicker than doing nothing. We'll never know how doing nothing would've ended.

and 20 years later, Japan is still trying to stop it

[JLMannin]

Seems like there are two ways to go about it. 1. Do nothing. 2. Try and stop it. The government is going with #2 figuring they can cushion it and turn it around quicker than doing nothing. We'll never know how doing nothing would've ended.

I thought the early thirties was the case study of what happens when you do nothing.

[JLMannin]

Please remember that this whole real estate mess was caused by speculative buying. The markets with the highest foreclosure rates are Phoenix, Las Vegas, South Florida, and SoCal. These were the areas where get rich quick speculators were having houses built with zero intention of ever living in them, and they turned around and sold them to other speculators.

The only problem is that many, many, many homeowners never had a clue that there was a bubble and they cashed out the "equity" that was "created" by the speculative market.

[oddlycalm]

and 20 years later, Japan is still trying to stop it
Japan made the mistake of not forcing transparency and not folding up the zombie banks. To the extent we make the same mistake we will suffer the same fate.

The FDIC does a great job of folding up local and regional banks that fall behind the curve, but they don't have the political horsepower to just walk in and do the same with Citi, BofA, etc... If the Feds don't force transparency and get rid of the zombie bank and the Wall Street oligarchs that go with them we are doomed to the same fate as Japan; oligarchs, zombie banks, zombie corporations zero investor confidence all of which add up to stagnation. It's a tough nut because those are the people, in both countries, that fund the politicians and they've got big filing cabinets full of IOU's.

BTW, don't look now but the markets are threatening to break through the last strong support at Dow 7500 and S&P 750 and all the major averages have broken below their 200 day moving average on strong volume. :eek: We are entering "look out below" territory.The next major support levels are S&P 450 and Dow 3700 which are from 1994 when the market traded sideways all year. That would take us back to just about the same level as when the markets really took off.

oc

[Indy]

Moral hazard, anyone?

[SurfaceUnits]

BTW, don't look now but the markets are threatening to break through the last strong support at Dow 7500 and S&P 750 and all the major averages have broken below their 200 day moving average on strong volume. :eek: We are entering "look out below" territory.The next major support levels are S&P 450 and Dow 3700 which are from 1994 when the market traded sideways all year. That would take us back to just about the same level as when the markets really took off.

oc
from back in October

http://www.offcamber.net/forums/showthread.php?p=243536&highlight=8400#post243536

[SurfaceUnits]

When did your government announce this:

the U.S. government has loaned, invested or committed $620 billion for industrial nations, including the Bank of Canada, Bank of England, Bank of Japan, National Bank of Denmark, European Central Bank, Bank of Norway, Reserve Bank of Australia, Bank of Sweden, and Swiss National Bank




# The nation’s 25 largest banks have upped their bets on the single most dangerous form of derivatives — credit default swaps. (See OCC’s latest report on derivatives, page 1, fourth bullet.)

# On average, the nation’s five largest banks — JPMorgan Chase, Bank of America, Citibank, Wachovia and HSBC — have increased their exposure to defaults. At yearend 2007, their average credit exposure to derivatives was 264% of their capital, already extremely dangerous. Nine months later, it had risen to 317% of their capital. (OCC, pdf page 12, bottom line.)

[SurfaceUnits]

Japan made the mistake of not forcing transparency and not folding up the zombie banks. To the extent we make the same mistake we will suffer the same fate.

The FDIC does a great job of folding up local and regional banks that fall behind the curve, but they don't have the political horsepower to just walk in and do the same with Citi, BofA, etc... If the Feds don't force transparency and get rid of the zombie bank and the Wall Street oligarchs that go with them we are doomed to the same fate as Japan; oligarchs, zombie banks, zombie corporations zero investor confidence all of which add up to stagnation. It's a tough nut because those are the people, in both countries, that fund the politicians and they've got big filing cabinets full of IOU's.

oc


Many of their arguments hark back to Japan of nearly two decades ago …

Obama Argument #1: Japan’s economy was also toppled by a real estate collapse in 1990. But, they say, the Japanese government didn’t do enough. The result, according to this theory, was Japan’s “lost decade” — and, today, 18 years after that bust began, the Japanese stock market and economy are sinking to new lows. To avoid a similar fate, goes the argument, we must act even more decisively.

My rebuttal: In its multi-year efforts to save its economy, the Japanese government built up a public debt of 180% of GDP. To duplicate Japan’s efforts today, we would have to TRIPLE our public debt.

Further, to stimulate its economy, Japan spent $6.3 trillion. Since the U.S. GDP today is 4.6 times larger than Japan’s in 1990, to match Japan’s spending, our government would have to fork up $29.1 trillion. That’s THIRTY-SEVEN times more than the just-passed Obama stimulus package.

And despite that massive outpouring of government money, Japan not only failed to stem its decline, it actually made it far worse, prolonging the agony for nearly two decades.

http://www.moneyandmarkets.com/the-obama-stimulus-truth-and-consequences-2-29735

[Insomniac]

and 20 years later, Japan is still trying to stop it

I need to read up on Japan. It surely never seemed like things were bad there the last 20 years. They beat us in a lot of things.

[Insomniac]

I thought the early thirties was the case study of what happens when you do nothing.

I just think that it's hard to know on both sides. If they did more in the 30s, would it have made a difference? If they did nothing now, would it make a difference? Sometimes I just feel like that all the analysis is done to justify after the fact. After this recovers, they'll say they prevented an even worse problem. So far, I haven't seen anything concrete they can point to and say, "because we did this, this happened".

[Insomniac]

Moral hazard, anyone?

That went out the window long ago.

[JLMannin]

I just think that it's hard to know on both sides. If they did more in the 30s, would it have made a difference? If they did nothing now, would it make a difference? Sometimes I just feel like that all the analysis is done to justify after the fact. After this recovers, they'll say they prevented an even worse problem. So far, I haven't seen anything concrete they can point to and say, "because we did this, this happened".

Yes, you bring up a very valid point. I ridicule lemmings for saying "imagine how much worse open wheel would be today if TG had done nothing", yet I am using the same type of reasoning here.

The bottom line is that you are right, we will never know the effects of the options that were not tried, but experts will debate the what-ifs for years to come.

[Insomniac]

Has anyone seen/read about Term Asset-Backed Securities Loan Facility (TALF) yet. They're saying it is expected to roll out in March. Basically, the Treasury and Fed will be trying to incentivize the purchase of debt (auto loans, credit cards, student loans, etc.). They will loan the overwhelming majority of money to the investor at a low rate.

More details: http://www.nytimes.com/2009/02/20/business/20lend.html

My thoughts:

First, is this how they want to continue? They want to keep securitizing debt. I thought that was part of the problem?

They'll only loan for AAA rated debt. How in the world can they trust any ratings after this? They haven't made any changes to financial regulations.

The loans will only go to hedge funds and private equity firms. They're encouraging these guys to leverage like crazy again (from 6-20x). They're the ones who invested in all this highly leveraged stuff before.

Would you invest in it if you could? I think it would depend on the financial instrument (student loans probably are very stable). I wouldn't leverage it at all. If I had to put up 10%, I would only put up 10% of the face value. I wouldn't try to invest in 10x that. Of course, that is why I don't run a hedge fund. :)

The gov't should just start a new bank and compete against these guys. Pay their customers a good rate of return and make their own loans. They can get deposits and make sound loans. No one should be clamoring to get loans for people with bad credit.

[JLMannin]

No, I had not heard of TALF yet. I keep hearing about frozen credit markets, but I wonder which part of the market is "frozen". Are there hordes of consumers trying to get loans/credit cards to buy stuff and getting turned down, or have consumers simply returned to living off what they make? Personally, I'm thinking it's the latter.

I know I was not using equity to cover expenses, but I can only speak for myself - as a result, my rate of consumption is more or less constant (Obviously, I had to adjust my discretionary spending as a result of higher food and gas prices, so I guess my rate of consumption may have decreased slightly). Also, I have yet to have any of my credit limits decreased yet - in fact, one of my card issuers just gave me a 7,000 credit limit increase.

Has anyone here had credit limits reduced or been denied credit? Does anybody here know someone who has?

[SurfaceUnits]

BoA has been readjusting credit limits after years of buying every CC company in America. If you have multiples cards they purchased with high limits they are adjusting them.

TALF - sounds like they are hoping good times are just around the corner and they will grow out of debt

MArket playing with 7200

[dando]

Has anyone here had credit limits reduced or been denied credit? Does anybody here know someone who has?

I don't know anybody who has, but I have read and heard about them in the news. Generally those with questionable credit are having lines reduced or closed. My guess is those below a 300/400 score. I read about a fellow in central oHIo that lost his BP ga$ $$$ when the bank closed his account (despite the fact that he was current). Banks are also requiring more equity for home and business loans.

-Kevin

[Ankf00]

bye bye WaMu. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aWxliUXHsOoA&refer=home)

http://img220.imageshack.us/img220/7972/q2gb4.jpg

They're my new checking bank since Chase has no locations in the state. Only to end up back w/ Chase when they complete the merger of the retail banking division later in the year :gomer:

[dando]

They're my new checking bank since Chase has no locations in the state. Only to end up back w/ Chase when they complete the merger of the retail banking division later in the year :gomer:

I'll do you one better...I worked for them back in the early-90s, they sold out their oHIo ops to 5/3 in '92, I moved all of my banking to Bank One (almost went to work for them), and then Chase bought Bank One in 2004, so now my banking is back with Chase. :saywhat:

-Kevin

[SurfaceUnits]

Write up on Sweden's 1990's banking crisis and how they nipped it in the bud instead of dragging it out

Stopping a Financial Crisis, the Swedish Way

Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.

But the final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated.

http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em


google
http://www.google.com/search?q=sweden+banking+crisis+1992&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

[oddlycalm]

Write up on Sweden's 1990's banking crisis


“For every krona we put into the bank, we wanted the same influence,” Mr. Lundgren said. “That ensured that we did not have to go into certain banks at all.”

Yup, it keeps the healthy banks from feeding at the public trough and it's simple enough that the average person would be able to understand the inherent consequences and feel it was fair.

By contrast the the massive unpopularity of the TARP giveaway is going to complicate everything else we do.

oc

[Ankf00]

I dunno, TARP's not that bad, Chase gave me a free $100 for opening that acct with WaMu this weekend. In a healthy economy where money isn't printed by Parker Bros. I wouldn't have received such an opportunity. :D

[SurfaceUnits]

they gave me 150 when everything was grate

[cameraman]

I dunno, TARP's not that bad, Chase gave me a free $100 for opening that acct with WaMu this weekend.

Huh, the exact same bank just stuck a $10 a month service fee on my wife's credit card. Just for the privilege of having the card, every month ten dollars, activity or no. They wouldn't back down either so she just closed the credit card account (it isn't like she ever carries a balance) and pulled her savings account while she was at it. A half year attorney's salary in a rainy day passbook savings account lost to a $10 service fee demand, they richly deserve to go out of business.:irked:

[G.]

I don't know too much about the financial world (and am learning a lot here), but it seems weird to have the Sec of State "urging" China to buy our debt. Other news stories are stronger and portray the Secretary as basically pleading for investment.


Hillary in China (http://news.yahoo.com/s/afp/20090223/pl_afp/financeeconomychinausbondsdiplomacy_20090223152743 )



SHANGHAI (AFP) – China has little choice but to follow Hillary Clinton's call and continue buying US Treasuries, as reversing course would lead to the value of its investments plunging, economists said Monday.

While in Beijing on her first overseas trip as US secretary of state, Clinton urged China on Sunday to keep buying US debt, saying it would help jumpstart the flagging US economy and stimulate demand for Chinese exports.

[coolhand]

China will buy our debt whether they like it or not. They have no other options, plus it is in their interests to invest in the dollar due to the fact they hold 2 trillion of them.

[eiregosod]

China will buy our debt whether they like it or not. They have no other options, plus it is in their interests to invest in the dollar due to the fact they hold 2 trillion of them.
in other words, as soon as the worlds gets a chance, they will dump the dollar.

[SurfaceUnits]

Greenspan passes the buck

http://moneyfeatures.blogs.money.cnn.com/2009/02/16/it-wasnt-me/


Profits before people

Amnesty International and a pro-Tibet group voiced shock Friday after US Secretary of State Hillary Clinton vowed not to let human rights concerns hinder cooperation with China.

Paying her first visit to Asia as the top US diplomat, Clinton said the United States would continue to press China on long-standing US concerns over human rights such as its rule over Tibet.

"But our pressing on those issues can't interfere on the global economic crisis, the global climate change crisis and the security crisis," Clinton told reporters in Seoul just before leaving for Beijing.


Why the hell do we send people to washington anyways. Nothing ever gets attention until the politicians can slap a crisis label on it and it's too late. sheesh

[SurfaceUnits]

poopoo occurs or is about to hit the fan...hope you got your can openers ready

The government has so many balls in the air between the financial systems and deteriorating parts of the industrial sector that it may not have either the capital or intellectual capacity to go around.

http://www.time.com/time/business/article/0,8599,1881420,00.html


In other news
http://finance.yahoo.com/news/Home-prices-post-record-apf-14450641.html

- A widely watched index shows home prices tumbled by the sharpest annual rate on record in the fourth quarter and in December.

The Standard & Poor's/Case-Shiller U.S. National Home Price Index plunged 18.2 percent during the quarter from the same period a year ago, the largest drop in its 21-year history. Prices are now at levels not seen since the third quarter of 2003.

In the month of December, the Case-Shiller 20-city index plunged 18.5 percent from December 2007 levels, while the 10-city index dropped 19.2 percent.

Prices in the 20-city index have plummeted 27 percent from their peak in the summer of 2006, and the 10-city index has fallen more than 28 percent.

[coolhand]

in other words, as soon as the worlds gets a chance, they will dump the dollar.

Google Dollar Hegemony

[Ankf00]

:shakehead

http://www.chron.com/disp/story.mpl/metropolitan/6277344.html



Houston taxpayers could start footing the bill to help first-time homebuyers pay off debts and improve their credit scores, under a proposal before City Council this week.

The “Credit Score Enhancement Program” will give up to $3,000 in grants to individuals who are trying to qualify for mortgages through the city’s homebuyers assistance program. City officials say some applicants fall short of eligibility by only 10 or 20 points on their credit scores, and paying off some debt balances can quickly improve their numbers.

...

Some support
Affordable housing advocates were cautiously optimistic about the proposal Monday. The tightening credit market has made it harder for previously qualified families to get mortgages, said Stephan Fairfield, president of Covenant Community Capital Corp., a Houston nonprofit that helps low-income families build assets.

Some banks previously had accepted credit scores of 580 or 600 as a qualifying threshold, but most are now requiring 620, Fairfield said.

“New tools are needed to help families move forward towards home ownership,” he said. “If there are lenders that are offering loan approvals subject to retiring the outstanding payables, or if there is something that can help them get over the credit score threshold, it certainly makes sense.”


throatpunch. :mad:

[oddlycalm]

Due to recent budget cuts and the rising cost of electricity, the light at the end of the tunnel has been turned off.

We apologize for any inconvenience

[SurfaceUnits]

if aig goes down the tubes, there won't be a tunnel

[Ankf00]

govt awesomeness in action, episode 1:

*govt bails out AIG*
*govt lets LEH fail*
Govt: LEH is not "too big to fail." Ha ha.

*a few months pass, into the future we look*
[play time travelly music & video]

Madame 1: Oh no, AIG might collapse, how is this possible?
Neutron Man: Why because AIG had significant CDS exposure to LEH, ma'am.
Govt: Ha ha. We already spent your money. You are now broke. Ha ha.

[Gnam]

The gov'mint helps those who help themselves...to your money.

But don't worry... a negative times a negative equals a positive. :p

http://img410.imageshack.us/img410/1260/standanddeliver.jpg

[SurfaceUnits]

Latest Tally on the giveaway
Allocated Spent
$11.5 trillion $2.2 trillion

http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/index.html

[SurfaceUnits]

Uncle Ben wants America to help pay your mortgage...or wants you to help pay other peoples' mortgages....whichever the case may be

Bernanke: Bail out bad borrowers, too
12:04pm: Fed chief says housing woes must be solved to fix financial markets, even if it means helping irresponsible borrowers.

[trish]

Why can't the just become renters?

As for people who fell behind only because they got ill or lost their job, I think the mortgage company (banks) should be forced to work something out with them if they are now able to start paying again.

[Insomniac]

Why can't the just become renters?

As for people who fell behind only because they got ill or lost their job, I think the mortgage company (banks) should be forced to work something out with them if they are now able to start paying again.

Then they just bail out the banks after foreclosures.

[cameraman]

12:04pm: Fed chief says housing woes must be solved to fix financial markets, even if it means helping irresponsible borrowers.

The rationale is pretty simple, if a huge number of people default and all those houses go into foreclosure it will drastically drive down what remains of the value of your house. :irked:

They are trying to support the market value of your house by keeping your neighbors out of foreclosure to the greatest extent possible.

[trish]

Well, it looks like I made a mistake by not buying a house I couldn't afford. :(

[Methanolandbrats]

The rationale is pretty simple, if a huge number of people default and all those houses go into foreclosure it will drastically drive down what remains of the value of your house. :irked:

They are trying to support the market value of your house by keeping your neighbors out of foreclosure to the greatest extent possible.And keep banks from failing.

[SurfaceUnits]

The rationale is pretty simple, if a huge number of people default and all those houses go into foreclosure it will drastically drive down what remains of the value of your house. :irked:

They are trying to support the market value of your house by keeping your neighbors out of foreclosure to the greatest extent possible.

I sold my house a couple of years ago when I returned to school. Let the bottom fall out and prop up caterpillar by using their equipment to fill in the hole or to dig the hole deeper.

[Ankf00]

The rationale is pretty simple, if a huge number of people default and all those houses go into foreclosure it will drastically drive down what remains of the value of your house. :irked:

They are trying to support the market value of your house by keeping your neighbors out of foreclosure to the greatest extent possible.

govt shouldn't be in the business of manipulating market value.

[Insomniac]

Well, it looks like I made a mistake by not buying a house I couldn't afford. :(

I'd think the peace of mind you have now is worth quite a bit vs. buying an overvalued home and running up tons of debt and hoping someone will help you out of the mess you find yourself in.

[Insomniac]

govt shouldn't be in the business of manipulating market value.

No one should be. Unfortunately, they let private industry do it while asleep at the wheel.

[Insomniac]

I sold my house a couple of years ago when I returned to school. Let the bottom fall out and prop up caterpillar by using their equipment to fill in the hole or to dig the hole deeper.

I think some feel that the bottom is a long ways away in the current climate, especially if they do nothing. I can certainly see how it's a bad cycle, but have no idea what would work best. Either way I think long term, we'll recover, but I doubt anyone can legitimately say exactly how.

[cameraman]

govt shouldn't be in the business of manipulating market value.

You're worrying about gov't manipulation:eek: Show me any market that hasn't been grotesquely manipulated by the ****** MBAs that got us into this mess. Oil, mortgages, corn, EtOH, stocks, beans, homes, lumber, hay, metals even cement. Damn near every commodity market on this planet has been manipulated to make the manipulators rich. And you are worrying about the gov't:shakehead At least they are not intentionally trying to screw us over.

[KLang]

And you are worrying about the gov't:shakehead At least they are not intentionally trying to screw us over.

We pay a bunch in taxes every year. They are promising to require us to pay more. I cerntainly feel screwed by the government. :irked:

[SurfaceUnits]

I'm moving to Tahiti. Call me when it's safe to rejoin the human race.

[devilmaster]

I'm moving to Tahiti. Call me when it's safe to rejoin the human race.

I'll be in tortola, huddled up to the pusser's rum factory bar....

[SurfaceUnits]

667K new jobless claims; continuing claims top 5M

You are going to be paying for everyone else's health care as well.

AP - President Barack Obama is sending Congress a "hard choices" budget that would boost taxes on the wealthy and curtail Medicare payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care.

"The problem with socialism is you eventually run out of other peoples' money."

[Sean Malone]

AP - President Barack Obama is sending Congress a "hard choices" budget that would boost taxes on the wealthy and curtail Medicare payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care.



I read about this yesterday and I don't like it. Evidently 'both sides of the isle' are suspicious of this.

[SurfaceUnits]

Think how much fun it will be when it IS everybody's business what you eat and how much you eat and what you do with your time and if you aren't exercising enough, etc, etc, etc.

BTW, I'm eating a Chakwita banana and Cascadian Farm Organic Honey and Oats Granola

[Ankf00]

You're worrying about gov't manipulation:eek: Show me any market that hasn't been grotesquely manipulated by the ****** MBAs that got us into this mess. Oil, mortgages, corn, EtOH, stocks, beans, homes, lumber, hay, metals even cement. Damn near every commodity market on this planet has been manipulated to make the manipulators rich. And you are worrying about the gov't:shakehead At least they are not intentionally trying to screw us over.

still doesn't mean that govt should be manipulating it as well.

and not intentionally? what do you call forcing every bank to accept TARP so that they wouldn't be required to force those who needed it to open their books to the public?

[Ankf00]

http://www.dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/40000/2000/800/42810/42810.strip.gif

http://4.bp.blogspot.com/_djgssszshgM/SaaFkIkfx9I/AAAAAAAAA0Y/Pa3w-vrwkfU/s1600/dllbert022609.gif

[chop456]

Rick Santelli of CNBC goes OFF on the $7B+ "stimulus" package:

http://www.cnbc.com/id/15840232?video=1039849853

Chicago Tea Party. :laugh:

-Kevin


CME Group Statement on Media Access to Trading Facilities

CHICAGO, Feb. 25 /PRNewswire-FirstCall/ -- CME Group, the world's largest and most diverse derivatives exchange, has issued the following statement regarding media access to CME Group trading facilities:

CME Group policy permits print and broadcast media to access CME Group trading facilities for reporting on world events, economic conditions and financial markets activity. CME Group does not sponsor such media nor does it endorse or censor the diverse and personal views of journalists, members or trading floor personnel who access our trading facilities.

CME Group supports the efforts of government officials to improve economic conditions and ensure the efficient functioning of our nation's financial markets.

SOURCE CME Group

:cry:

:rolleyes:

[trish]

Revised numbers. (http://finance.yahoo.com/news/Economy-shrinks-even-more-apf-14491192.html) Is it possible all the gloom and doom by some of us is an overreaction? Say yes.

[SurfaceUnits]

Revised numbers. (http://finance.yahoo.com/news/Economy-shrinks-even-more-apf-14491192.html) Is it possible all the gloom and doom by some of us is an overreaction? Say yes.

:confused::confused::confused:

[oddlycalm]

All the major market averages broke below the lows of 2002 on huge volume and closed there. It probably doesn't represent a final capitulation but it certainly was dramatic. Just to put that in perspective, this monthly close is a 50% retracement of the entire bull market move that began in 1983 after the 2nd arab oil crisis at Dow 750. We are now at 1997 levels.

The monthly chart is from noon today and the close was actually a bit lower. It shows percentage of retracement by thirds. I never imagined I'd see a chart that looked like this in my lifetime.

[Methanolandbrats]

All the major market averages broke below the lows of 2002 on huge volume and closed there. It probably doesn't represent a final capitulation but it certainly was dramatic. Just to put that in perspective, this monthly close is a 50% retracement of the entire bull market move that began in 1983 after the 2nd arab oil crisis at Dow 750. We are now at 1997 levels.

The monthly chart is from noon today and the close was actually a bit lower. It shows percentage of retracement by thirds. I never imagined I'd see a chart that looked like this in my lifetime. Classic double top. That actually happened on the 23rd for the SP. Today was confirmation. Credit sank us all. Shakespeare was right,From Shakespeare's Hamlet, 1603:

LORD POLONIUS:
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.


he should have added an additional line......"and will leave all ye utterly ****ed".

[SurfaceUnits]

HSBC 721% underwater

http://images.moneyandmarkets.com/1266/weakes_bank.gif
From August, 2008

HSBC has a D+ rating. Plus, it has an exceptionally large 721% of its capital exposed to the credit risk of derivatives. In other words, for every single dollar in capital, HSBC is taking a credit risk of $7.21 with trading partners in derivatives, according to the U.S. Comptroller of the Currency.

[Current]
Citibank has been downgraded to D+ by TheStreet.com. Plus, I have added Bank of America and JPMorgan Chase to the list. Meanwhile, most of the above institutions have now failed, been bought out or bailed out. All have suffered massive declines in their share price or the shares of their parent companies. And all should be avoided by both investors and savers.


The last info I saw put BoA at 384% underwater

[oddlycalm]

"And borrowing dulls the edge of husbandry."
Sounds like they shoulda been giving out Viagra with any new home equity credit line. :gomer:

oc

[Tifosi24]

All the major market averages broke below the lows of 2002 on huge volume and closed there. It probably doesn't represent a final capitulation but it certainly was dramatic. Just to put that in perspective, this monthly close is a 50% retracement of the entire bull market move that began in 1983 after the 2nd arab oil crisis at Dow 750. We are now at 1997 levels.

The monthly chart is from noon today and the close was actually a bit lower. It shows percentage of retracement by thirds. I never imagined I'd see a chart that looked like this in my lifetime.

After examining that chart, I certainly hope the S&P doesn't push through the 660 range, because after that it looks like it could run down toward the 400s. I would like to think that there should be a recovery coming soon in the market, but I just don't see anything before summer. I have read several articles about certain leading indicators improving, but the ones I have seen are directly related to increases in money supply by the Fed. These might work, but I won't believe there is daylight at the end of the tunnel until non-government influenced indicators are improving. The number I will be looking for is Q1 GDP at the end of April. After the revised -6.2% for Q4, if we don't see a number significantly closer to zero, there is decent chance we will see negative growth in Q2 and Q3.

On another topic, My wife and I have an offer in on a short sale house, and after having been through this process, the banks, apart from making bad loans, are a huge part of why the housing market is slow to recover. They are so unresponsive when getting back to people and then they counter with unreasonable numbers. I think these banks are holding out for government money, moral hazard anyone, so they are being intentionally slow, hoping against hope. A classic example of how these banks are killing themselves is my one co-worker's story. His wife and him put an offer in on a short-sale for 230k, the bank took three months to get back to them, asked for another month and then made no counter, so he withdrew the offer. It is now four months later and townhomes in this area have a going rate of 190k. So, the bank waiting around cost them at least $50k and a property remains vacant.

My rant continues. My wife and I also had the distinct pleasure of renting a property that was foreclosed upon. At least in Minnesota, and I am sure it is the case in other states, the foreclosure laws are arcane and are contributing to a lot of the problems we are experiencing. My best guess in Minnesota is that their foreclosure laws were written for family farms decades ago and they are not at all applicable to the modern economy. <Rant off.>

[cameraman]

Is it possible all the gloom and doom by some of us is an overreaction? Say yes.

I've given up hope for Lent this year....

[Sean Malone]

On another topic, My wife and I have an offer in on a short sale house, and after having been through this process, the banks, apart from making bad loans, are a huge part of why the housing market is slow to recover. They are so unresponsive when getting back to people and then they counter with unreasonable numbers. I think these banks are holding out for government money, moral hazard anyone, so they are being intentionally slow, hoping against hope. A classic example of how these banks are killing themselves is my one co-worker's story. His wife and him put an offer in on a short-sale for 230k, the bank took three months to get back to them, asked for another month and then made no counter, so he withdrew the offer. It is now four months later and townhomes in this area have a going rate of 190k. So, the bank waiting around cost them at least $50k and a property remains vacant.

>

My sister is going through the same thing. Put a bid in on a short sale property. She's pre-qualified for $200K over asking price and it's been 2 months with no movement.

[devilmaster]

I've given up hope for Lent this year....

I gave up giving up things for Lent for Lent.







wait a sec....

[dando]

I gave up giving up the Lions for Lent.


Fixed that for ya. Same diff, actually. ;)

-Kevin

[SurfaceUnits]

Billionaire Warren Buffett said the economy will be “in shambles” for the rest of this year as financial firms take losses tied to reckless loans made during the housing boom.

While Buffett and business partner Charlie Munger can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,” he wrote.

[trish]

AIG is about to get another $30 billion. http://news.yahoo.com/s/ap/20090302/ap_on_bi_ge/aig_rescue

[SurfaceUnits]

Our illegal president set to break another campaign promise:

President Barack Obama will break a campaign pledge against congressional earmarks and sign a budget bill laden with millions in lawmakers' pet projects, administration officials said.

Administration budget chief Peter Orszag and White House chief of staff Rahm Emanuel both downplayed the $410 billion spending bill and signaled Obama would hold his nose and sign it.

Orszag said: "We want to just move on. Let's get this bill done, get it into law and move forward."

Said Emanuel, about the campaign promise: "That's last year's business."

Hope you got your pork

[Insomniac]

Our illegal president set to break another campaign promise:

President Barack Obama will break a campaign pledge against congressional earmarks and sign a budget bill laden with millions in lawmakers' pet projects, administration officials said.

Administration budget chief Peter Orszag and White House chief of staff Rahm Emanuel both downplayed the $410 billion spending bill and signaled Obama would hold his nose and sign it.

Orszag said: "We want to just move on. Let's get this bill done, get it into law and move forward."

Said Emanuel, about the campaign promise: "That's last year's business."

Hope you got your pork

Where are those quotes from?

[SurfaceUnits]

(Copyright 2009 Associated Press. )

[Insomniac]

(Copyright 2009 Associated Press. )

I just wanted to read the whole article. I fully expect them all to not fulfill their promises, I'm just surprised as disciplined as they normally are they just came out and said it. Wondering if there was more context.

Found it: http://www.google.com/hostednews/ap/article/ALeqM5iIg34ct-JZVW_v1Nx7Yg9GhIScqwD96LQ9FO0

I read "Last year's business" to refer to the promise, but it meant that the budget is last year's budget. The funding was only allocated for part of the year and this is the remaining for the rest of the FY. (From first hand knowledge, we were only obligated ~43% of the budget required for our FY09 work. This would ensure the rest is coming. i.e. Nothing will be canceled that was already funded.)

[SurfaceUnits]

Sorry, got called away before I could post link

http://www.wthr.com/Global/story.asp?S=9929650&nav=9Tai

[FTG]

If only there were some way to have Haliburton build the projects in Iraq before moving them here, then everyone would be happy.

[SurfaceUnits]

Obama's deficit fighting plan to catch tax deliquents: Nominate everyone for a position in his administration


WASHINGTON – Ron Kirk, nominated as U.S. Trade Representative in the Obama administration, owes an estimated $10,000 in back taxes from earlier in the decade and has agreed to make his payments, the Senate Finance Committee said Monday.

The committee said the taxes arise from Kirk's handling of speaking fees that he donated to his alma mater, and for his deduction of the full cost of season tickets to the Dallas Mavericks professional basketball team.

The disclosure made the former Dallas mayor the latest in a string of top-level Obama administration appointees found to have underpaid their taxes, following Treasury Secretary Tim Geithner and Tom Daschle, who withdrew as candidate for Health and Human Services secretary. Nancy Killefer, Obama's pick for chief performance officer, also bowed out amid tax problems.

[Ankf00]

failing to pay taxes on money he never received,

[cameraman]

So who got rich?

The fools that ran AIG's Financial Products created this gigantic series of really bad derivative contracts and the taxpayers have ponied up $150+ billion to cover those bad bets. So by default somebody made some really, really good bets and has been cashing in to the tune of $150+ billion dollars from us via AIG.

Who? Every bet has two sides (at a minimum). Somewhere somebody is swimming in cash.

And what of these jacktards at AIG who wrote these contracts? Why aren't their heads on pikes right now?

[Methanolandbrats]

More good news :mad:http://abcnews.go.com/Business/Economy/story?id=6965710

[trish]

So who got rich?

The fools that ran AIG's Financial Products created this gigantic series of really bad derivative contracts and the taxpayers have ponied up $150+ billion to cover those bad bets. So by default somebody made some really, really good bets and has been cashing in to the tune of $150+ billion dollars from us via AIG.

Who? Every bet has two sides (at a minimum). Somewhere somebody is swimming in cash.

And what of these jacktards at AIG who wrote these contracts? Why aren't their heads on pikes right now?

The Winners. (http://www.nytimes.com/2008/04/16/business/16wall.html?ex=1366084800&en=1eee7351824a31ce&ei=5124&partner=permalink&exprod=permalink)

Good read on John Paulson here. (http://www.cnbc.com/id/28814840/)

[SurfaceUnits]

PennyMac, Mortgage-Servicing Hero

http://www.portfolio.com/views/blogs/market-movers/2009/03/05/pennymac-mortgage-servicing-hero

[FTG]

This should make the partisan free marketeers heads explode:

George Soros earned almost $3 billion.

[chop456]

The Winners. (http://www.nytimes.com/2008/04/16/business/16wall.html?ex=1366084800&en=1eee7351824a31ce&ei=5124&partner=permalink&exprod=permalink)



“There is nothing wrong with it — it’s not illegal,”

Way too many people believe that.

[Methanolandbrats]

PennyMac, Mortgage-Servicing Hero

http://www.portfolio.com/views/blogs/market-movers/2009/03/05/pennymac-mortgage-servicing-hero
Damn, where are my red, white and blue pom poms,,,,,those ****ers are true American Heros. :yuck:

[JLMannin]

So who got rich?

The fools that ran AIG's Financial Products created this gigantic series of really bad derivative contracts and the taxpayers have ponied up $150+ billion to cover those bad bets. So by default somebody made some really, really good bets and has been cashing in to the tune of $150+ billion dollars from us via AIG.

Who? Every bet has two sides (at a minimum). Somewhere somebody is swimming in cash.

And what of these jacktards at AIG who wrote these contracts? Why aren't their heads on pikes right now?

Or maybe AIG marketed the same 3 bln bet to 50 different buyers - remember, all this gambling is totally unregulated. I would not be suprised if AIG was betting against itself - I don't think we will ever know the real story. :shakehead

[Methanolandbrats]

Citi is now a penny stock. The taxpayers will soon own billions of shares of worthless **** (GM, AIG, Citi, etc.....). Outstanding job by all involved :thumbup:

[Insomniac]

So who got rich?

The fools that ran AIG's Financial Products created this gigantic series of really bad derivative contracts and the taxpayers have ponied up $150+ billion to cover those bad bets. So by default somebody made some really, really good bets and has been cashing in to the tune of $150+ billion dollars from us via AIG.

Who? Every bet has two sides (at a minimum). Somewhere somebody is swimming in cash.

And what of these jacktards at AIG who wrote these contracts? Why aren't their heads on pikes right now?

I asked this a while back. I'm leaning towards not that many because very few people/companies/funds were only on one side of those contracts. They seemed to have been on both ends and the money was pulled out of the system because the balance sheets didn't have to reflect the notional value. They were banking the profits but hiding the real risks. Now that their market value has plummeted, their balance sheets are in tatters. Not that this matters, but you essentially had Wall St. firms writing insurance policies on anything. AIG, who's supposed to specialize in this, had it all wrong too.

[SurfaceUnits]

Damn, where are my red, white and blue pom poms,,,,,those ****ers are true American Heros. :yuck:

here's some blue pom poms

http://supermanfanart.com/art/newart/Superwoman_wallpaper.jpg

[chop456]

Citi is now a penny stock. The taxpayers will soon own billions of shares of worthless **** (GM, AIG, Citi, etc.....). Outstanding job by all involved :thumbup:

I sold at around $40 and lost a good chunk of my investment. Could'a been worse. Buy high, sell low. It's what I'm good at. :D

[Methanolandbrats]

I sold at around $40 and lost a good chunk of my investment. Could'a been worse. Buy high, sell low. It's what I'm good at. :D
You screwed up, you should have averaged down at $40 :gomer:

[Insomniac]

I sold at around $40 and lost a good chunk of my investment. Could'a been worse. Buy high, sell low. It's what I'm good at. :D

And the weirdest part, if you tried to do the opposite, doesn't it seem like you'd end up selling low and buying high.

[SurfaceUnits]

Fed wants to keep AIG secrets

A top official tells Congress he opposes unmasking the Wall Street firms that have pocketed tens of billions of dollars in taxpayer bailout funds.


NEW YORK (Fortune) -- Officials shouldn't reveal which Wall Street firms pocketed billions of dollars in the government's bailout of AIG, a top Federal Reserve official said.

Firms that did business with the troubled insurer did so "expecting confidentiality," Fed Vice Chairman Donald Kohn told the Senate Banking Committee in testimony Thursday.

He said publishing a list of the firms that benefited from government support of AIG -- as lawmakers have been demanding -- could undermine trust in the markets and increase financial instability.

"I would be very concerned if we started revealing lists of names of companies that did transactions" with AIG or with the government on AIG's behalf, Kohn said in response to questions. Doing so, Kohn added, could "undermine confidence" in the financial system.

Kohn's remarks also run counter to the oft-stated preference by Fed chief Ben Bernanke and other top officials for more "transparency" in the government's dealings in the financial crisis.

http://money.cnn.com/2009/03/05/news/fed.transparency.fortune/index.htm

[oddlycalm]

“There is nothing wrong with it — it’s not illegal,”
The reason it's not illegal is that big money got their toadies in government (in both parties) to make it legal. All of it was illegal between 1933 and the last 10yrs. It resembles the gilded age because we recently returned to the regulation model of the gilded age. Because it worked so well the last time? :irked:

Fact of the matter is that there are around 500 people total in the private sector and government (both parties) that are primarily responsible for putting us in this position. You could inflate that number with lobbyists but most of them are just high end bag men.

It's significant that those calling for, and administering, our Lemon Socialism policy to support these institutions are the same folks that brought us here. Most economists seem to disagree and say that expeditious restructuring is the answer. FDIC chair Sheila Bair has been the lone voice in government favoring restructuring the big banks, something she does with smaller banks every month. They are currently penny stocks so the market has taken care of wiping out the shareholders equity.

oc

[Insomniac]

The reason it's not illegal is that big money got their toadies in government (in both parties) to make it legal. All of it was illegal between 1933 and the last 10yrs. It resembles the gilded age because we recently returned to the regulation model of the gilded age. Because it worked so well the last time? :irked:

Fact of the matter is that there are around 500 people total in the private sector and government (both parties) that are primarily responsible for putting us in this position. You could inflate that number with lobbyists but most of them are just high end bag men.

It's significant that those calling for, and administering, our Lemon Socialism policy to support these institutions are the same folks that brought us here. Most economists seem to disagree and say that expeditious restructuring is the answer. FDIC chair Sheila Bair has been the lone voice in government favoring restructuring the big banks, something she does with smaller banks every month. They are currently penny stocks so the market has taken care of wiping out the shareholders equity.

oc

It is also part of the psyche where people think, hey, we haven't had a problem with conflicts in banking, investment and insurance, we don't need these laws, without considering that it's the laws that were preventing problems. There's a difference between antiquated and effective. Sometimes that distinction is overlooked and we have "reform".

[Insomniac]

Here's a thought I just had. Some people are of the belief that all of them should've been allowed to fail. And if these companies are in such shambles, how come no one has started a new investment bank? Shouldn't it be really easy to compete with all these guys who basically have concrete shoes?

[trish]

When public money is involved their should be no confidentiality. This is criminal.

[oddlycalm]

When public money is involved their should be no confidentiality. This is criminal.

Agreed. There is zero justification. It's not a national security issue and if these people wanted confidentiality they should have kept their houses in order.

oc

[SurfaceUnits]

Thanks, But No Thanks: USB to Return Tarp Funds

Richard Davis is putting his money where his mouth is.

Two weeks after he called the Troubled Asset Relief Program "a lousy program," the chief executive of U.S. Bancorp said Wednesday that he intends to return the $6.6 billion it received through the program as soon as the spring.

Last month he reportedly told attendees at a Thrivent Financial for Lutherans conference in Minneapolis, "There's no A, R or P in Tarp — it's just troubled."

At the time Davis complained that the program's goals and rules have been a moving target since it was created. He also said Tarp was hurting healthy banking companies like his, which were "told, not asked" by the government to take the money last fall.

Those remarks have been echoed by executives at several other companies lately.

http://www.financial-planning.com/news/Richard-Davis-Tarp-Funds-2661218-1.html

[SurfaceUnits]

Postal Service draws criticism for $1.2 million home buy

At a time when the U.S. Postal Service says it is experiencing a financial crisis, it purchased a $1.2 million home from an employee so he could relocate, a CNN investigation has found.

http://i2.cdn.turner.com/cnn/2009/US/03/05/postal.service.relocation/art.postal.service.relocation.jpg
The Postal Service bought this 8,400-square-foot
South Carolina home so an employee could relocate.

Postal Service spokesman Greg Frey said the home will be resold, as others have been.

"It's not like we threw away a million dollars," Frey told CNN. "We are hoping it's going to go for the appraised value."

But a real estate agent in the area said the home could be a tough sell in a depressed housing market -- and the USPS said it lost an average of more than $58,000 on the 500-plus homes its relocation program bought and sold in 2008.

The 8,400-square-foot, six-bedroom home on Lake Wateree, about 30 miles north of Columbia, is likely to be the last million-dollar home purchased by the Postal Service. A $1 million cap on homes eligible for the relocation program took effect in February, Frey said.

http://www.cnn.com/2009/US/03/05/postal.service.relocation/index.html