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Due to the size financial skeptic dictionary is now converted to a separate page. Many thanks to Softpanorama readers who have sent me their suggestions for the items in the dictionary.
Archives:
Just for a moment, pretend this is the 1967 movie The Graduate. You, readers, are poor, confused liberal arts graduate Benjamin Braddock. I'm the older gentleman who, at the graduation party thrown by Ben's parents at the family home, takes the younger man aside to give some advice derived from the labors and pains of the years.
"I just want to say one word to you. Just one word."
"Yes, sir?"
"Are you listening?"
"Yes sir."
"Minsky. Hyman Minsky. Lot of future in Hyman Minsky"
I agree wholeheartedly.
jake chase:A gift for the children and the rest of the world...
It's a good thing that Reagan proved that deficits don't matter.
December 24, 2009 | Paper Economy
Gather 'round all ye bubble-sitting families and partake in a reading of this warm old holiday classic by Dr. SoldAtTheTop! (Originally posted Christmas 2006!)
***
Every Bull
Down in Bull-ville
Liked the Housing Bubble a lot...But the Bear,
Who lived just South of Bull-ville
Did NOT!The Bear hated the Bubble!
He blamed the Fed, rates and lending!
But the Bulls didn't care, they just kept right on spending.
It could be that Bulls were just very trendy.
It could be, perhaps, they were whipped into a speculative frenzy.
But I think the most likely reason of all
May have been that their noggins were two sizes too small.But,
Whatever the reason,
Their heads or the craze,
They continued to spend, for days upon days.
And the Bear, staring up from his cave down below
Sensed the limit had been reached, things were going to BLOW!
For he knew every Bull up in Bull-ville that night
Had stretched every dollar, squeezed their finances tight."And they're going back for more!" he could see to his dismay
"This just cannot last, not for one more day!"
Then he ran to his closet to fetch a loud-speaker
"I MUST warn them all, before they get in any deeper!"
For, the Bear knew......All the Bull girls and boys
Who had been flipping, and borrowing and buying up toys
Were all skirting the edge, sitting perfectly poised
For collapse that once realized... oh, the noise! Noise! Noise! Noise!Then the Bulls, young and old, will be in a terrible fix.
And they'd have to hunker down and stop all their mad tricks!
And the economy... oh what a mighty deep-six!
It will sink faster than boat load of bricks!And THEN
Something would happen that he liked least of all!
Every Bull up in Bull-ville, the tall and the small,
Would all start to panic, when home prices stop swelling.
They'd reverse the craze… they'll all begin selling!They'd sell! And they'd sell!
AND they'd SELL! SELL! SELL! SELL!
And the more the Bear thought of the Bull-Panicky-Sell
The more the Bear thought "This is NOT going to end well!"
"Why for almost a decade I've watched the bubble inflate!
I MUST warn them now!
Before it's TOO LATE!"THEN
He mounted the loud-speaker
To the top of his car
And a siren with flood lights
That were blazing like starsThen the Bear said, "I'm off!"
And he drove forty blocks
Toward the homes that the Bulls
Had been trading like stocks.All their windows were bright. Flat panel glow filled the air.
All the Bulls were all carrying-on without even a care
When he came to a stop in the Bull-ville town square.
"This is the best place," the Bear thought as he reached
For the microphone that he would use when he preached.THEN
Click! On went the siren, the lights and the speaker!
Then the Bear started yelling! "Things are looking bleaker and bleaker!
You all must come out, listen to what I have to say
Give me a chance to appeal to your senses today!"Then one Bull emerged through his front door.
Then another came out, and some more... then still more.
Soon the square was abuzz with a large crowd of Bulls
All grumbling and muttering about association rules.But the Bear went on "You are all in grave trouble!
I have come here to warn you of the Great Housing Bubble!
You see it's been inflating, stretching thinner and thinner..
If you don't stop now, there will be almost no winners!""This is the greatest Ponzi-scheme ever devised
Where all of you have been convinced to not question your eyes.
Just go right on speculating... pushing prices up higher
And assume there will always be a greater fool buyer!""But Things are now not looking so hot...
Home sales are plunging, The builders are shot!
Inventory is rising, there is no place to hide.
Soon you will be in for a vicious price slide!"Then he clicked off the speaker and he heard not a sound.
The Bulls all looked puzzled, just standing around.
Then one Bull, an Economist named David Lereah (Pronounced Le-ray)
Stood up and he shouted, "I have something to say!""You are a very foolish Bear!" He said with a sigh
"This is a GREAT time to SELL or to BUY!
Yes prices are moderating, that much is sure true.
But that is a HEALTHY sign that the market will pull right on through.
I've seen all the numbers, I release them you know...
And what I've seen is STABILIZATION as we level off at the low""So pack up your things and head off down the hill!
We don't need your type of hype in Bull-ville!"So the Bear did as he was told, all downhearted and grim.
He silently opened his car door and stepped in.
And he backed down the hill and then crawled into his cave.
And he thought about the Bull-ville that he failed to save.But just then the Bear heard a horrible sound!
A massive explosion that sent shock waves through the ground!
As he looked from his window, he could not believe either eye...
The whole of Bull-ville had been blown to the sky!And what happened then...?
Well, in Bear-ville they say
That although he was sad...
His pride grew three sizes that day!
And the minute his heart stopped feeling so blue
He published a book titled "What To Do and Not To Do If a Bubble Finds You!"
December 29, 2009 | naked capitalism
craazyman:
More predictions . . .
The Obama administration will announce that 2010 will be renamed 2009, giving us another year of leeway to recover from the crisis. The move will make Obama's poll ratings soar, as everyone would love to turn back the clock on their lives. "It's just like daylight savings time, but in reverse," the president will say.
Scientists will invent a new liquid that combines with ethanol and gasoline to boost the efficiency of car engines to 100 miles per gallon. The liquid will also be sold in stores as a fruit punch. This will sponsor a new economic boom.
Tiger Woods will apologize to all the cocktail waitresses in big city night clubs worldwide. His wife will host a new TV talk show and Tiger will eventually appear as a guest.
There will be 19 full moons, shocking astronomers but gaining little notice from the general public, who will be too busy working to look up.
Barbara Streisand will go on tour with Paul McCartney.
The Chinese economy will become disconnected from any and all forms of quantification. No one will know where it is or what it is doing. It will eventually float over the western U.S. as a massive cloud of dust particles.
There will be a communist revolution in Greece, but it will bring no noticeable change to its economy, politics or job market.
There will be a true second coming of the Messiah, but press coverage will be limited to CSpan and PBS. Only Ivy League liberals will know about it.
Vladimir Putin will make a weightlifting video for sale worldwide, and ask former American President George Bush to be Vice President of Russia. Bush will accept on the condition that he can remain in Texas and never have to travel out of the state.
DoctoRx...BTW, one should wonder about a Professor who repeatedly talks about mortgage principle reduction rather than principal reduction.
There sure has been a reduction of principles the last couple of years!
Dec 29, 2009 | naked capitalism
Doug Terpstra:
Famous last words, most quotable in 2010, 2011, 2012…
"We're not going to have a second wave of financial crisis. We will do what is necessary to prevent that…we will prevent that. And that is something completely within our capacity to prevent… When you have the will to act we have substantial ability to prevent that and we will do what is necessary."
-Timothy "TurboTax" Geithner
Nobody panic, please remain calm!
Hugh:
We have a pig (the deteriorating fundamentals) and lipstick (bubbles in stocks and commodities and happy talk emanating from the likes of Tim Geithner).
Anonymous
Where's the Amero? I thought it would be our savior.
We need Al Queda to be found in Mexico. Everyone will freak out and forget about the economy.
Start the new Amero printing press and print our worries away, well sort of until the next administration then blame them for the problem. Mean while any money you had would be sucked up into the Dollar - Amero conversion. banks are rich, your poor perfect.
Anonymous
Timmy, the pet is a complete nut and Benny, the chief thief knows very well what he is doing but alas the last thing on his mind is the welfare of American common man.
Jonathan:
Juvie wrote:
Paperless flights to safety are now boarding, for all denominations.
Beware of a bald bearded gentleman, possible of somewhat middle-eastern appearance...
ResistanceIsFeudal:
Jonathan wrote:
Beware of a bald bearded gentleman, possible of somewhat middle-eastern appearance...
The most recent financial terrorist profile is a bald-headed middle-aged WASP with an Ivy League education and personal net worth > $3m
Juvenal Delinquent :
Benito could've been a professor clad in his tweedy coat, that bored his students to tears in regards to much ado about nothing, and we'd have never heard of him, but when the devil hands out membership to the 30/15 Club*, which mere mortal could resist?
* 30 Pieces of Silver & 15 Minutes of Fame
adornosghost:
Juvenal Delinquent wrote:
Paperless flights to safety are now boarding, for all denominations.
And the Second Law of Thermodynamics has been suspended, so nothing to worry about.
Mr Slippery:
From the WSJ: U.S. Uncaps Support for Fannie, Freddie
Reminds me of the scene in Revenge of the Sith where the emperor yells "Unlimited Power!".
crazyv
Our political discourse is nothing more than slogans -- it is either "free market" or "socialist", "government is bad" and once you get down to sloganeering nuance is lost.
Worse still we have been conditioned like Pavlov's dog to start snarling and attacking at the sound of those words. Allthough more prevalent on the right it is also found on the left.
sm_landlord:
mock turtle wrote:
i will vote for paul or kucinich or any sane candidate who pledges to demolish the federal reserve
"You will obey me while I lead you
And eat the garbage that I feed you
Until the day that we don't need youDon't go for help...no one will heed you
Your mind is totally controlled
It has been stuffed into my mold
And you will do as you are told
Until the rights to you are sold"--Frank Zappa: I'm the Slime
Something to keep in mind at the next election.
December 25, 2009 | www.financialarmageddon.com
I leave you with a bit of Financial Armageddon-style humor (I couldn't help myself!) from one of my favorite cartoonists, Scott Adams:
More on this topic (What's this?)
December 27, 2009
bob:
One more thought.
Teabaggers-
Make sure you are going to earn your name again, dragging your collective "I told you so" balls right across America's face.
Loud an proud, make sure you don't show any humility now, you won, there is no hope. We really are lucky to have you around showing us how hopeless everything is, its just wonderful that you all could make it.
Do you need directions home? A cab perhaps?
December 15, 2009
John Slattery for Prescott Financial urges you to diversify your gold portfolio with women and sheep. (06:15)
Jul 12, 2008 | Asia Times
I think I vaguely remember being drunk when I saw the movie The Lost Weekend, which was about alcoholism (always a fun topic!) and the title The Lost Decade is just as unsavory, and rightfully so, because he explains, "Adjusted for inflation and dividends, the return on the S&P 500 was negative for the decade that ended on June 30." Hahaha - 10 years of nothing! No growth in buying power for 10 years! Hahahaha! Nice "investing for the long-term" there!
So, anyone investing in the S&P 500, which is just a compilation index of the 500 biggest companies in America, for the last 10 years produced negative real (inflation-adjusted) results? Hahaha!
And you are going to fund a retirement by never gaining any buying power? Hahahaha!
A question for Mr. Geithner; What are the salaries and bonuses being paid to the people who run FHA? These are government salaries. FHA is a part of HUD. Compensation for Fannie and Freddie Exec's should conform to those guidelines. Not the other way around. We need to end the myth that F/F are private sector entities. They are not.
Dec 16, 2009 | ColbertNation.com
Joe Lieberman is a master of diverting attention from real problems. He is continually on the podium trying to rally Americans into that "lets bomb that mother f..... because it's just the right thing to do" with countless countries (that save the puppies crap) so we will act like mindless idiots and worrying and fearful of foreign countries while our own leadership f.... us in the ass!
Dervish
And what I'm saying to the people of Connecticut, I can do more for you and your families to get something done to make health care affordable, to get universal health insurance ..." -- Lieberman during 2006 Senate Primaries
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/07/AR2006070700029.html
Forgetfulness or duplicity?
Dec. 23, 2009 | The Business Insider
You and your prediction lists have driven me to this...
Here are my 20 Unpredictions for 2010, a list of things that ain't gonna happen next year...
04. Newspapers quit worrying about who is excerpting their content and become excerpters themselves of the phenomenal insights from Baseline, Aleph Blog, Big Picture, Jesse's Cafe Americain, Epicurean and Gregor Macdonald.
06. Too Big To Fail becomes made-for-TV movie. Sorkin storms off the set when director attempts to make Dick Fuld a tragically heroic figure.
08. Mutual fund managers attempt to validate and resurrect their industry by becoming more outspoken about compensation, governance and performance in the companies whose shares they hold.
10. Peter Schiff sells his gold positions and buys California municipal bonds.
18. Bureau of Alcohol, Tobacco and Firearms given regulatory oversight of the banks.
19. B of A spins off Merrill Lynch, Barclays spins off Lehman, Wells Fargo spins of Wachovia, JPMorgan spins off Bear Stearns. Do over!
When Alan Greenspan predicted three percent economic growth showing up in the reported figures for the third quarter of 2009, did he mean executive compensation packages? Maybe the lesson here is: don't ask a crackhead to predict the future supply of crack.
Greenspan's greatest success may be to drive economics into such disrepute that it will be cut loose from the universities and only be taught by mail order or internet subscription...
No better symbol of hubris ... and sociopathic greed...
On Oct. 16, a Goldman vice president, Adam Storch, was named managing executive of the SEC's enforcement division.
Dec 23, 2009 | Felix Salmon
Maria Abi-Habib reports:
Gulf News, a newspaper part-owned by a senior government minister in the United Arab Emirates, has told its journalists to avoid using the words "bailout" and "default" when writing about Dubai's debt crisis…
Reporters for the paper, the largest English-language daily in the U.A.E., were also urged to steer clear of the phrase "debt crisis" and asked to "ensure the following politically correct terminology is used" - words such as "financial consolidation" and "fiscal support" - when describing the sheikdom's economic problems…
"This is a style guide," said Francis Matthew, the Dubai-based paper's editor-at-large when asked by Zawya Dow Jones about the memo. "We're trying to restrict people from using financially incorrect terms."
Remember this, reporters! AIG, Citigroup, Frannie, GM, etc etc didn't get bailouts, they got fiscal support. Or, better yet, they simply experienced financial consolidation. Sounds so much better than, you know, bankruptcy.
(Via the indefatigable Daniel Lippman)
Here is a musical parody of the traditional song "O Christmas Tree (O Tannenbaum)," about commercial real estate.
Mish's Global Economic Trend Analysis
Fractional Reserve Lending is really Fictional Reserve Lending.
It seems like only yesterday that Don Luskin, a top Ideological Hack Hall of Famer, told us the 11 Reasons to Buy Now - this was in November 2007, a month AFTER the top, that Abu Dhabi's investment in Citi was proof that Citigroup and the market were both cheap:
"ADIA's investment in Citi means that stocks have gotten very, very cheap. Mega-investors like that only step in with $7 billion when they are getting a deep bargain."
Or not.
- Invictus:
In July 2008, Mr. Luskin wrote a column titled Housing, Job Data Signal Recovery, Not Recession.
In that column, he wrote:
"I haven't seen a single media story that reported the truth: that the median price of an existing home rose in June. It went up. It was higher.
Let me be perfectly clear. The median existing home price was higher in June than it was in May, rising to $215,100 from $208,600. Oh, and while we're at it, the price was higher in May than it was in April. And guess what: It was higher in April than it was in March. And hey, while we're at it, it was higher in March than it was in February."
- Mannwich:
Is this clown still "managing money"? Good grief. Did he ever admit he was wrong?
Bad weather prevents CEOs of the three biggest financial institutions to attend a meeting with President Obama.
Comments from "It's Certainly Not For A Lack Of Effort" " The Baseline Scenario
- The fundamental divide in opinion regarding our financial system is: Are the people running "large integrated financial groups" hapless fools, buffeted by forces beyond their comprehension and control; or do they know exactly how to ensure they get the upside and the awful, sickening downside is borne by society – including through high unemployment.
- Perhaps the next time some charismatic nobody comes out of nowhere and runs on his ability to crystallize the fantasies of mass man by talking nonstop about himself, fewer people will be fooled? Want to bet?
- The meeting was just a political stunt on the president's part anyway, so the president could scold the fat cats and look like he's actually doing something when he's not. It is not like the bankers are shrugging off the administration's noble efforts to change things. This administration serves at the pleasure of Wall Street. The only difference of opinion here is that the president wants people to think otherwise and the bankers really could care less what the masses think.
- Greyhound bus was an option
- REAL Merican banksters do NOT take the train. Way to many peasants on trains.
- This is all theatre; in this case the weather served as a device for improv. The bankers couldn't give a rat's behind about anything but themselves, and Obama knows this and plays along. All laughs and good cheer around.
- We already saw their contempt for this clown back in September when they blew off his puling little lecture right there in Manhattan. Why would they care about listening to his whining now?
- Obama has got to where he is by being a team player, that's all he knows how to do. He never intended to rock the boat, he just wanted to ride in the captain's cabin.
- It's good to keep the hired help in their place. Particularly that annoying minstrel boy whose purpose is to distract the public from one's business while pretending to limit that business.
- Imagine doing this to Lyndon Johnson.
- Can you imagine the private discussion between Mack, Blankfein and Parsons? Think of Tony Soprano and his allied Capo Regime's.
- On a ceratin level it's just theater. Obama's not interested in putting up real fight with the bankers, he and the bankers just want it to look like he his. If the bankers had just gone to the meeting the dramatic tension would have been missing and the inteneded result (i.e. nothing) would make appearances even more lame and corrupt.
- These CEO's are sending a message that they've bought the president and don't need to do his bidding. He needs to do theirs
- Catering to the Ubers is far more important than working for the people, not mention any quaint notions of self respect.
The hardest thing about predicting 2010 is that the academic economists who direct policy makers have no idea what they are doing, and therefore could do anything
Calculated Risk
So Bernanke refinanced into a loan with a higher interest rate and with a larger mortgage payment for the security of a fixed rate. This suggests he thinks fixed mortgage rates have bottomed (otherwise he could have paid less on his mortgage, at a 3.75% interest rate, and then refinanced next year). He did not "have to do it".
Outsider:
Eh, what's a little exaggeration amongst friends?
I still say, with my 4.875% refi, that perhaps I could've given him some timing tips. Might have saved him a few bucks. (I'm still getting a chuckle out of that - sorry)
Angry Saver:
Mis-spoke? Way too much decorum. The guy is a liar.
Bond Girl:
I bet Bernanke really hates the idea of transparency now.
bearly
Who Am I ?
- "Financial problems are well contained to the sub-prime mortgage market"
- "Our financial institutions are well capitalized"
- "Weakening dollar has implication only for those who travel abroad"
- "Asset Bubbles are difficult to identify"
Is this guy an imbecile ?
RockyR:
This suggests he thinks fixed mortgage rates have bottomed (otherwise he could have paid less on his mortgage, at a 3.75% interest rate, and then refinanced next year). He did not "have to do it".
that, or he can't do basic math and/or doesn't understand interest rates very well
GDD9000:
I think CR agrees pretty much completely with my comments from yesterday. Bernanke said "exploded" as in past tense. My loan exploded as in, already happened. I had said it couldnt have unless he had an option ARM because interest rates are still historically low. Even with a super jumbo, the rate rise would hardly be an explosion. And it turns out it was NOT an option ARM, so it did not explode. Therefore, we have a Fed Chairman basically talking out of his butt, trying to connect with the common man by prevaricating. As to whether it means he thinks rates are at a bottom and going up fairly soon, hard to say. That's a generous interpretation, since taking his words at face value makes him a bald faced liar.
dryfly:
Citizen AllenM wrote: Not the full volcker,
LOL... kinda like the 'Full Monty'.
Bubblisimo Gerkinov:
Plantagenet wrote:
I think Occam's razor works here. An exploding mortgage is more interesting that a non-exploding mortgage. You sound more interesting to the interviewer if you have one. So what's a white lie to inflate your importance a bit?
My take on it was he was trying to play the 'everyman card' ... as in "see, I'm affected by the same issues, we're all in this together" etc.
But yeah, amounts to the same thing ... a distraction.
naked capitalism
In response to a 50% bonus supertax, bankers in the UK are threatening to decamp, as if that will move the authorities to relent.
Vinny G.
d4winds says:Let them come to the US. It's their kind of place.
Vinny
anonymousre "If some of that were to migrate overseas that would be unfortunate but given the costs of carrying that financial system around, it may be a price worth paying."
The Brits have always a talent for wry understatement.
On the other side of this "talent export", what country in its right mind would want to import a bunch of self-important walking time-bombs?
sgt_doom :
Please come to America….it's hunting season.
Alex:
"Last year we invested a great deal in single malt and someone got into that cupboard and the investment turned out to be a total loss."
Implicit in this lament is the idea that you did not get one drop, which would make it a definitive dead loss event.
Changing your statement for current macroeconomic circumstances…
"Last year we (the tax payers) invested a great deal in (AIG) and someone got into that cupboard and the investment turned out to be a total loss."
So I guess you aren't the only one.
bohemian:
that single malt story actually choked me up-
I'm weeping
flipspiceland:
Why does TheBamster resemble TheBamster but Lord Blankfein, J. Dimon, and Ben Bernanke all look like coneheads?
Even the comics have to put their derision thru a filter.
threetorches:
Nova, I agree ... but the point I was making was that in large parts of the country the projected price drops are largely theoretical, as ordinary people go on living in their ordinary homes and paying their ordinary mortgage payment. A 20% drop out in that Midwest Worker Home is a total drop of only $10,000. Not worth stopping your $350 mortgage payment. The guy living there can make $350/month without becoming a male prostitute or holding up liquor stores, even if his job is only part-time or is generally not much fun.
If the majority of homes in the Midwest go to "negative value," then it is Mad Max time! You would need to see unemployment up over 50% for this to happen, with roving bands of meth-freaks kicking in doors. We got lots of problems headed our way, but the Midwest is not going to turn into no-man's-land over a $350/month payment.
The bubble states are going to go through a painful readjustment, but the "floor" for housing are the Midwest prices. Yes, a handful of elite can continue to overpay for waterfront, but most people are going to have to give up the notion that things costing 10 or 12 times more in California or Florida is "normal." A little price premium, maybe, but things got very out of whack.
Juvenal Delinquent :
consider the housing bubble an appetizer of sorts, an whore d'oeuvre.
We needed it to get to where we are now, on the brink of something or another...
some investor guy:
JimPortlandOR:
Comrade Kristina wrote:
The Depression never ended.
I agree completely. I think one of CR's few incorrect calls was to stop shading his charts (saying the recession ended).
The summer months were very skewed due to all the gov't programs, and didn't reflect even the "normal" distortion of events that the media present.
Speed:
Prices are going to go to their pre-bubble levels
Question is - when was that? Some would argue that the bubble began in the early 90s.
NOTaREALmerican:
CaptainMorgan wrote:
I find it interesting that even here there is somewhat of a disconnect.
You mean besides everybody being a pessimistic doomer that doubts the future greatness of Merica? Naa. no disconnect there.
NOTaREALmerican:
ResistanceIsFeudal wrote:
We've been engineered to be unhappy for commercial reasons.
They only appear happy because they distrust each other, causing nationalism to work for them. If Canada was a worthy enemy we'd have national health care too ("Well, if those Canadians have it WE can have it...").
The US just happens to be the biggest dick on the block. Somebody has to be, we're it.
JimPortlandOR:
Comrade Kristina wrote:
Because we're not godless commies like those people.
but, but, but, the northern Euros are satisfied (mostly). One hindrance here (to that nirvana), is the 25-30% of US population that
- hates gov't (except their Medicare/Social Security);
- thinks wars are a good thing that solves problems and makes your dick hard;
- looks forward to end of time;
- wants 'those people' to just go away;
- thinks the upper 5% of income folks should be our gods and deserves more.
These are not exclusive.
Mike in Long Island:
nova wrote:
"think house prices in the working class communities will take a massive beating. As someone said here earlier "Is that the sound of the social fabric ripping?"
Seems a fitting song
"Rise so high, yet so far to fall
A plan of dignity and balance for allPolitical breakthrough, euphoria's high
More borrowed money, more borrowed timeBacked in a corner, caught up in the race
Means to an end ended in disgraceJuvenal Delinquent:
Mishkin is another ex-expert that refuses to go away quietly...
Rajesh:
NOTaREALmerican wrote:
What if all Merican government is dysfunctional, by "nature"?
No, no. It's by design.
NOTaREALmerican:
1 currency now -yogi wrote:
sent to 10 state attorneys general by a labor union that represents 150,000 people in the U.S. and Canada.
Well, it's a good thing for Merica that we're planning on getting the state attorneys out of the bank regulating business.
The hard working bankers of Merica have more important things to do than respond to frivolous nonsense like this.
And finally - draw your own conclusions from the two covers below. I think Larry Summers looks as uncomfortable as the Canaille the Cat above.
Paul Krugman beat me to this: Bernanke and the cover curse
Credits (ht JA):
Person of the Year 2009: Ben BernankeTIME Magazine Cover: Rubin, Greenspan & Summers - Feb. 15, 1999
Dec 16 | FT Alphaville
Independent research firm Portales Partners on Wednesday issued the pithiest take we've seen on Vikram Pandit's internal memo regarding Citi's Tarp repayment.We quote:
Interpretation of the Day: Deconstructing Vikram Pandit's internal memo on Citigroup's (C) TARP repayment…
Citigroup: "Today we announced a series of transactions to repay the $20B of TARP outstanding and terminate the asset guarantee we received from the U.S. Government."
Translation: I am sick of working for $1 per year.
Citigroup: "Today we are strongly capitalized…."
Translation: We have diluted the shareholders by a factor of six.
Citigroup: "…efficient…"
Translation: We have cut the company in half.
Citigroup: "…and created a strong foundation for the future."
Translation: We are working on a strategy.
Citigroup: "There are still economic challenges ahead…"
Translation: Forget about any kind of bonus.
Citigroup: "Over the past few months, I have visited many of you in the U.S. and around the world…"
Translation: I am trying to avoid the home office.
Citigroup: "Thank you for all you do every day for our clients, customers, communities, and Citi."
Translation: Common shareholder? Hello? Dilution of 83% is the inverse of a factor of six.
Portales rates Citi as "hold" and has a price target of $4 on the stock.
Are you telling me that Obama is governing in a vastly different way than George W. Bush at the end of his tenure?
The Big Picture
Well, I don't know about you, but I didn't see that one coming. Goldman Sachs senior investment strategist Abby Joseph Cohen thinks that stocks are going higher.
At the 14th annual USA Today Investment Roundtable, Cohen noted that the current stock market picture is "muddled", but "nicer", and still "a reasonably good environment" for investors.She added that most people "are taking the point of view that the period of maximum risk has passed, but we do have risks ahead. It is more normal, but it is not normal."
Based on this, I'd say things are definitely back to "normal"…
philipat:
Watch out all, this means that Goldie is on the sell side.
catman:
You all are cold. Abby and Paul Tudor Jones are the same person. He does the bear side, then changes outfits and she does the bull side.
RW:
... In Chicago those who pay, play... He who pays the piper calls the tune. It's always been that simple in Washington.
i on the ball patriot:
You all deserve to be fucked - hard - as long as you keep this two party fantasy theater alive with your votes and attention.
No perception, no balls, no freedom.
Deception is the strongest political force on the planet.
FT.com
At such a time, as Shakespeare's Polonius might have said, neither an issuer nor an investor be.
Bonus feature
Ah, Roderick, kind of you to join us.
This PBR has totally thrown us.
We're shocked the PM has disowned us,
Three years after he enthroned us.
Then, it seemed, he'd love to clone us.
But now the people think they own us.
Darling's gone all sanctimonious.
Gordon didn't even phone us;
Changed his tune; began to stone us.
But one thing history books have shown us:
This month's debt-plagued public moaners
Are next month's greedy bank share-owners.
For now the climate's acrimonious,
But we are the richest party donors.
So, Roderick – about next year's bonus...
Dec 14 2009 | ftalphaville.ft.com
Is it the £500,000 your bank, or otherwise reviled-financial institution, pays you each year?
Or the negative £3.5m you contribute to society?
That's right - negative £3.5m. A study by left-ish think tank, the New Economics Foundation, puts the social value of bankers, having brought the financial system to the "brink of collapse," at negative £7 for every £1 they create privately. On that basis, bankers should be paying the government £3.5m on their annual £500,000 salary to break even on the karmic scale, making the 50 per cent bonus supertax look downright generous.
Contrast your typical banker with say, a hospital cleaner.
For every £1 they're paid, they generate £10 in social value according to the study, since they help reduce hospital infections and contribute to the "wider social value created by the hospital." In a similar vein, childcare workers generate £7 worth of value for society for every £1 paid, while waste recycling workers create £12 of value.
Nick
What is the 'true' cost of:
- The food industry that supplies fatty, sugary rubbish devoid of nutritional value to the masses.
The car industry producing polluting, dangerous 'Chelsea tractors'.- Advertising in terms of hours per person being spent forced to absorb a load of aspirational rubbish that fosters greed, envy and even depression (oh and we are effectively taxed every time we buy something for this privilege).
- Bottled water in terms of the carbon footprint of transporting millions of tonnes of H2O around the planet when we have perfectly good plumbing (get a water filter if\ you don't like the taste).
- The fashion industry that works by encouraging people to constantly 'update' their wardrobes to stay 'in fashion'.
- The pharmaceutical industry focusing on 'blockbusters' for low level chronic illness / 'lifestyle' drugs rather than focusing on life threatening illnesses.
- The Alcohol / cigarette industry (including pubs, clubs etc).
The list goes on. There are many human activities that are arguably devoid of value or at best a gross misallocation of resources. However we live in a free capitalist society, not a commune.
Capital is deployed on the basis of profit for owners and the often completely irrational, frequently self defeating choices of the average consumer. Measuring social value requires a rigorous and logically consistent philosophical framework. Simply picking professions an applying arbitrary assumptions shows nothing of substance. Nice headlines though.
Yves here. That is a curious and revealing statement. No, you may not have run for office on a "cream to the bankers, crumbs to everyone else" platform, but it is certainly what you have done at every available opportunity.
DownSouthFDR was a traitor to his class (his fellow bluebloods).
LBJ was a traitor to his class (his fellow white southern racists).
So if Obama is a traitor to his class (his fellow humble blacks)?
FT Alphaville
This has nothing whatsoever with Obama telling CBS 60 minutes on Sunday evening:
I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.
Americans do not snub their president.
It's fog.
The following video should make people think twice about listening to anything that Chairmen of the Fed Ben Bernanke says. It's a compilation of statements he made from 2005-2007 that will have your head spinning.
December 14, 2009
Rolling Stone's Matt Taibbi recently stopped by the Colbert Report to once again talk about everyone's favorite investment bank - Goldman Sachs
The Colbert Report Mon - Thurs 11:30pm / 10:30c Matt Taibbi www.colbertnation.com
This followed Taibbi's latest assault on the status quo in Obama's Big Sellout, a piece that is, perhaps, best summarized in paragraph three below:
While I've not yet read the entire piece, it does appear to fall a bit short of Taibbi's summer spectacular Inside the Goldman Bubble Machine, at least insofar as "Vampire Squid"-like references are concerned. But, in fairness to Taibbi, he set the bar ridiculously high.Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.
The Mess that Greenspan Made
"In summary, it is encouraging to find that, despite the rapid growth of mortgage debt, only a small fraction of households across the country have loan-to-value ratios greater than 90 percent. Thus, the vast majority of homeowners have a sizable equity cushion with which to absorb a potential decline in house prices."
Alan Greenspan, Sept, 2005
some_guy_in_a_cube:
You would think our elites would be on top of this, but alas ours is a rather low quality bunch, merely concerned with grabbing all the cash they can get their grubby hands on.
bsneath:
"Rahm Emanuel, who has been out of government for only 30 months of his adult life, managed to collect $18 million during his private-sector stint with a Wall Street firm called Wasserstein-Perella"
"The president's economic czar, Larry Summers, was paid more than $5.2 million in 2008 alone as a managing director of the hedge fund D.E. Shaw, and pocketed an additional $2.7 million in speaking fees from a smorgasbord of future bailout recipients, including Goldman Sachs and Citigroup."
MATT TAIBBI
Rolling Stone
September 07, 2008 | Jesse's Café AméricainPaulson's Statement on Freddie and Fannie with a Nearly Simultaneous Translation
Some significant excerpts From Mr. Paulson's statment with our irreverent "follow the money" interpretation and a very few gratuitous remarks:"Based on what we have learned about these institutions over the last four weeks - including what we learned about their capital requirements - and given the condition of financial markets today, I concluded that it would not have been in the best interest of the taxpayers for Treasury to simply make an equity investment in these enterprises in their current form."
Fannie and Freddie were so hopelessly insolvent, and the widening in the spreads so alarming, that the major players, whom we faithfully serve, were concerned that the Credit Default Swaps would start to come into play, risking the banking system. A secondary but important consideration was the anger of the major sovereign nations whom we have financially compromised in general, selling them enormous tranches of GSE debt with 'implicit' guarantees.
"Therefore, the primary mission of these enterprises now will be to proactively work to increase the availability of mortgage finance, including by examining the guaranty fee structure with an eye toward mortgage affordability."
We needed another waste bin to place the bad debt and policy errors and JP Morgan was getting full.
"...the GSEs will modestly increase their MBS portfolios through the end of 2009. Then, to address systemic risk, in 2010 their portfolios will begin to be gradually reduced at the rate of 10 percent per year, largely through natural run off, eventually stabilizing at a lower, less risky size."
The debt will be monetized until the dollar falls from sheer exhaustion. (Have you ever known ANY government program with lots of influential recipients on both sides of the political spectrum to be reduced in size? This is not just a policy statement; it is a political IQ test.)
"First, Treasury and FHFA have established Preferred Stock Purchase Agreements, contractual agreements between the Treasury and the conserved entities. Under these agreements, Treasury will ensure that each company maintains a positive net worth. These agreements support market stability by providing additional security and clarity to GSE debt holders - senior and subordinated...This commitment will eliminate any mandatory triggering of receivership and will ensure that the conserved entities have the ability to fulfill their financial obligations."
The Debt Holders will be paid as close to face value as is feasible. PIMCO, the People's Republic of China, and the Credit Default Swaps players will be happy as the default spreads contract and the potential losses from this enormous Ponzi scheme recede into the future when it will be more convenient to blame this mess on someone else based on some event.
"It is more efficient than a one-time equity injection, because it will be used only as needed and on terms that Treasury has set."
Our cronies are going to bang this gong until the public's ears ring and the dollar reaches near collapse."Treasury receives senior preferred equity shares and warrants that protect taxpayers. Additionally, under the terms of the agreement, common and preferred shareholders bear losses ahead of the new government senior preferred shares."
Despite the brave face that Wall Street may wish to put forward on this, the common and preferred shareholders are going to be thrown overboard, and all holders of the dollar are going to absorb significant losses, but it may take some time."Market discipline is best served when shareholders bear both the risk and the reward of their investment. While conservatorship does not eliminate the common stock, it does place common shareholders last in terms of claims on the assets of the enterprise."
(Rightfully so. We'd like to see a haircut provided to the debt holders as well though, especially the arbitrageurs like Pimco that loaded up on GSE debt expecting a bailout. They are not being saved; they are being rewarded.)"Similarly, conservatorship does not eliminate the outstanding preferred stock, but does place preferred shareholders second, after the common shareholders, in absorbing losses. The federal banking agencies are assessing the exposures of banks and thrifts to Fannie Mae and Freddie Mac. The agencies believe that, while many institutions hold common or preferred shares of these two GSEs, only a limited number of smaller institutions have holdings that are significant compared to their capital."
The Wall Street banks have long envied and resented the competition of Fannie and Freddie on 'their turf.' The regional banks are annoying. This can be a win all for Wall Street in that they get to claim another big chunk of the pie, hit the public money for significant gains, and eliminate rivals.
"The agencies encourage depository institutions to contact their primary federal regulator if they believe that losses on their holdings of Fannie Mae or Freddie Mac common or preferred shares, whether realized or unrealized, are likely to reduce their regulatory capital below "well capitalized."
Your friendly government is ready and waiting to help you. heh heh Just don't let the public know you are in trouble.
"Preferred stock investors should recognize that the GSEs are unlike any other financial institutions and consequently GSE preferred stocks are not a good proxy for financial institution preferred stock more broadly."
Only buy preferred stocks recommended to you by Goldman Sachs and Morgan Stanley, or preferably Goldman Sachs and Morgan Stanley preferred debt itself. We need to recapitalize.
"The second step Treasury is taking today is the establishment of a new secured lending credit facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks."
We are going to be monetizing our way out of this fiasco, make no mistake. (It will be interesting to see if this money comes directly from the Treasury or the NY Fed. This is not incidental, it is important because it will tell us how many RPMs the printing machine has at the top end.)
"Treasury is initiating a temporary program to purchase GSE MBS... Treasury will begin this new program later this month, investing in new GSE MBS. Additional purchases will be made as deemed appropriate. Given that Treasury can hold these securities to maturity, the spreads between Treasury issuances and GSE MBS indicate that there is no reason to expect taxpayer losses from this program, and, in fact, it could produce gains. This program will also expire with the Treasury's temporary authorities in December 2009."
Here's the money shot. Direct monetization of private debt by Treasury. Cry havoc and bend the Buck over the washtubs.
"Because the GSEs are in conservatorship, they will no longer be managed with a strategy to maximize common shareholder returns, a strategy which historically encouraged risk-taking."
This is making our intent very obvious for all you Harvard business grads out there.
"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe. This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation."
All the financial dons have agreed to this. They expect the foot soldiers to say nice things about it, and how necessary it is to our well-being. The usual sanctions of omerta apply. And we do not wish to hear any talk about Moral hazard and especially any whistle-blowing.
"...our collective work is not complete. At the end of next year, the Treasury temporary authorities will expire, the GSE portfolios will begin to gradually run off, and the GSEs will begin to pay the government a fee to compensate taxpayers for the on-going support provided by the Preferred Stock Purchase Agreements. Together, these factors should give momentum and urgency to the reform cause...Because the GSEs are Congressionally-chartered, only Congress can address the inherent conflict of attempting to serve both shareholders and a public mission. The new Congress and the next Administration must decide what role government in general, and these entities in particular, should play in the housing market."
Reform THIS you bleeding hearts.
"there are ways to structure these entities in order to address market stability in the transition and limit systemic risk and conflict of purposes for the long-term."
Here is the Goldman Sachs managed accounts form. Please review it carefully and sign at the places indicated.
Full Text of Paulson's Remarks on Freddie and Fannnie Takeover
November 15th, 2009
There is a substantial take-down of pedantic bore Ayn Rand in GQ. They tease it thusly:
2009's most influential author is a mirthless Russian-American who loves money, hates God, and swings a gigantic dick. She died in 1982, but her spawn soldier on. And the Great Recession is all their fault.
I love that because it is both funny and touches upon so many subtle truths; Here is a longer, funnier excerpt:
"This is because there are boys and girls among us who have never overcome the Randian infection. The Galt speech continues to ring in their ears for years like a maddening tinnitus, turning each of them into what next year's Physicians' Desk Reference will (undoubtedly) term an Ayn Rand Asshole (ARA). They constitute a relatively small percentage of Rand readers, these ARAs. But they make their reading count. Thanks to them, the Rand Experience is no longer limited to those who have read the books. It's metastasized. You, me, all of us, we're living it. Because it's the ARA Army of antigovernment-antiregulation puritans who have spent the past three decades gleefully pulling the cooling rods out of the American economy. For a while, it got very big and very hot. Then it popped. And now the rest of us have to spend the next decade scaling the slippery slopes of the huge suppurative crater that was left behind.
Feeling fisted by the Invisible Hand of the Market lo these past fifteen months? Lost a job lately? Or half the value of your 401(k)? Or a home? All three? Been wondering whence the too-long-ascendant political and economic ideas and forces behind Greenspanism, John Thainism, blind Wall Street plunder, bankruptcy, credit-default swaps, Bernie Madoff, and the ensuing Cannibalism in the Streets? Then you, sir, need to give thanks to Ayn Rand Assholes everywhere-as well as the steely loins from which they sprang."
The subject of "equity cushions" has been discussed here on any number of occasions since the middle of the decade, the term apparently originating with former Federal Reserve member Susan Schmidt Bies in this early-2005 speech that was chronicled here.
From the point of view of bank supervisors, affordability products do not necessarily pose solvency concerns. Despite the apparent decline in underwriting standards, less than 5 percent of outstanding mortgages have a loan-to-value ratio greater than 90 percent, which means that the vast majority of homeowners have a significant equity cushion; in the event prices fall, only a very small percentage of owners are likely to see their debts exceed the value of their homes.
Of course, Ms. Bies no longer works at the nation's central bank, having resigned in early-2007, according to this Wikipedia entry, doing so to spend more time with her family. But, a few months ago, the government called, and now she sits on the board of Bank of America, someone with her foresight obviously an invaluable addition to this organization.
...What is most bothersome in this regard is that some of the same "equity cushion" arguments are being made here in 2009 about banks as were being made in 2005 about homeowners. The fact that a lot of the same people are still involved, (e.g., Ms. Bies' new position at BofA) makes it all the more scary.
J.G.:
It's people like Bies that just grind my gears.. completely clueless.
Anonymous:
Don't they call that the Peter Principle??
American Dream 2: Default, Then Rent
yagij
"It's a stealth stimulus," says Christopher Thornberg of Beacon Economics ...
JP:
And hilariously, the WSJ has a link to this on the same page:
Blackhalo
It seems to me that it takes 2 Cali $ to equal 1 anywhere else.
John:
Actually, and not to be at all cynical, our representatives ARE acting on behalf of their constituents. Those just don't happen to be the American people.
Elephant swims:
... Get your GS tatoo now! ...
Francois T :
New Democrat?
Is this Newspeak for "absolutely corrupted asshats beholden to special interests that happen to be Democrats"?
alex:
Yes, although for most purposes both terms can be shortened to "Democrat".
charcad:
for most purposes both terms can be shortened to "Democrat".
Then how will we distinguish them from "Republicans"?
Elephant swims:
Size of the pubic/public strap on?
Glen:
Republicans leave the lights on and laugh while they fuck you up the ass.
Democrats turn off the lights and whisper sweet nothings in your ear while they fuck you up the ass.
Mr. Spock:
Colloquially expressed, but essentially correct.
Richard Kline:
Republicans think that there should be no regulations. Democrats think the bankers should write them. Next question . .
The subject of "equity cushions" has been discussed here on any number of occasions since the middle of the decade, the term apparently originating with former Federal Reserve member Susan Schmidt Bies in this early-2005 speech that was chronicled here.
From the point of view of bank supervisors, affordability products do not necessarily pose solvency concerns. Despite the apparent decline in underwriting standards, less than 5 percent of outstanding mortgages have a loan-to-value ratio greater than 90 percent, which means that the vast majority of homeowners have a significant equity cushion; in the event prices fall, only a very small percentage of owners are likely to see their debts exceed the value of their homes.
Of course, Ms. Bies no longer works at the nation's central bank, having resigned in early-2007, according to this Wikipedia entry, doing so to spend more time with her family. But, a few months ago, the government called, and now she sits on the board of Bank of America, someone with her foresight obviously an invaluable addition to this organization.
...What is most bothersome in this regard is that some of the same "equity cushion" arguments are being made here in 2009 about banks as were being made in 2005 about homeowners. The fact that a lot of the same people are still involved, (e.g., Ms. Bies' new position at BofA) makes it all the more scary.
J.G.:
It's people like Bies that just grind my gears.. completely clueless.
Anonymous:
Don't they call that the Peter Principle??
American Dream 2: Default, Then Rent
yagij
"It's a stealth stimulus," says Christopher Thornberg of Beacon Economics ...
JP:
And hilariously, the WSJ has a link to this on the same page:
Blackhalo
It seems to me that it takes 2 Cali $ to equal 1 anywhere else.
John:
Actually, and not to be at all cynical, our representatives ARE acting on behalf of their constituents. Those just don't happen to be the American people.
Elephant swims:
... Get your GS tatoo now! ...
Francois T :
New Democrat?
Is this Newspeak for "absolutely corrupted asshats beholden to special interests that happen to be Democrats"?
alex:
Yes, although for most purposes both terms can be shortened to "Democrat".
charcad:
for most purposes both terms can be shortened to "Democrat".
Then how will we distinguish them from "Republicans"?
Elephant swims:
Size of the pubic/public strap on?
Glen:
Republicans leave the lights on and laugh while they fuck you up the ass.
Democrats turn off the lights and whisper sweet nothings in your ear while they fuck you up the ass.
Mr. Spock:
Colloquially expressed, but essentially correct.
Richard Kline:
Republicans think that there should be no regulations. Democrats think the bankers should write them. Next question . .
Mook:
"Has there been one financial leader to say this is really excessive? Wake up, gentlemen. Your response, I can only say, has been inadequate."
(whispering in the back of the room)
"Inadequate? What does he mean, inadequate?"
"I dunno. Maybe he means we haven't been giving enough money to the banks."
"Or maybe he wants us to cut interest rates some more."
"No can do. Stuck at zero. You?"
"Point-five percent."
"So it's your fault he's yelling at us!"
Whiskey:
merchants of fear wrote:
..the Stock Market is a HOPE machine
Ah, so markets don't work, then?
broward:
merchants of fear wrote:
depending on the cycle of Hope.
H.O.P.E, the replacement for the F.I.R.E. economy.
H eroin
O pium
P eyote
E xtasy
Yancey Ward:
I think the Fed has painted itself into a corner, but instead of using paint, it has used mortar and concrete blocks.
crazyv:
they must still believe the fed is an independent apolitical body. Fed is going to jack up interest rates 1.5% with 9.5% unemployment months before an election. They must be smoking something. They maybe right about the end point 2% at the end of 2011 but if anything I think they have their targets reversed. 0.5% by year end 2010 and 2% by year end 2011 makes more sense. BTW just the fact that the Fed is willing to raise rates even a little bit before the 2010 election will prove their anti inflation bona fides.
EvilHenryPaulson:
lawyerliz:
Basil Too beat me, but why is everything supposed to happen in the 2nd half?
The gambling addict is always one more bet away from striking it rich. Was supposed to be H2 2009, then pushed off into H1 2010, now H2 2010 because it is possible if everything goes well from here on out for there to be hike by H2 2010
Blackhalo:
Speed wrote:
The Fed needs to talk about raising rates
To Hu?
crazyv:
which is scarier -- that they know that these policies are garbage and will only enrich GS or
that they actually believe in them?tncubsfan:
Was supposed to be H2 2009
I feel like a Cubs fan.
You feel like me? Being a Cubs fan is hard, let me tell you......
kidbuck:
Was Ben being?
a.) stupid
b.) lying
c.) all of the above"We may see somewhat better economic conditions during the second half of 2008, reflecting the effects of monetary and fiscal stimulus," Bernanke said.
Euton:
I wonder if Dr. Bernanke would advise the military to store most of their bombs in five very large piles?
I don't think so.
TigerPaw said in reply to Euton:
He wouldn't "advise" it, but he'd look the other way when four of the piles conspired to eliminate the fifth pile and distribute it amongst themselves - and claim it was the invisible hand at work.
john c. halasz said in reply to Euton...
Happy Pearl Harbor Day to you, too!
Comrade Elmer Fudd:
why do consumers hate 'merica?
call me ahab:
awesome-
here is one they may have forgotten-
should i invest now- even after the big rally: you say-
does a cow shit in a pasture?
when they say- but . ..but
you say-
does Raggedy Ann have cotton boobies?
by then they'll be writing a check- i'm sure of it
THE DECADE IN ONE PAGE Eugene Linden• STOLEN PRESIDENTIAL ELECTION! (DEFINITELY – FLORIDA!)
• TECH BUBBLE BURSTS, CREDIT BUBBLE BEGINS
• 9/11
• INVADE WRONG COUNTRY, FAIL TO CATCH/KILL PERPETRATORS OF 9/11, SPEND $1-2 TRILLION WE DON'T HAVE, AMERICANS URGED TO FIGHT TERRORISM -- BY SHOPPING!
• TORTURE – YES! GENEVA CONVENTION – NO! HABEUS CORPUS – HABEUS SCHMORKAS! BILL OF RIGHTS -- PABLUM FOR PUSSIES WHO LIKE TERRORISTS
• GLOBAL WARMING? THAT'S FOR PUSSIES TOO!
• SUBPRIME FOR ALL
• FINANCIAL INDUSTRY HEARTS LOAN PACKAGING; SELLS PACKAGES TO ASIANS, EUROPEANS, PENSION FUNDS -- AND EACH OTHER
• RISING HOME PRICES MAKES EVERYONE'S CREDIT BETTER THAN AVERAGE!
• STOLEN PRESIDENTIAL ELECTION? (MAYBE – OHIO?)
• BORROWERS GONE WILD – EVERYBODY JOINS THE CREDIT BINGE; RISK - WHAT RISK? LEVERAGE = $$$! SAVINGS – WHY?
• GLOBE WARMS, NATIONS DITHER
• "YOU MEAN I HAVE TO PAY THIS MORTGAGE?"
• "MY MONTHLY PAYMENT GOES TO WHAT?"
• CHINA! OTHER BRICS TOO! ICELAND – GOOD! IRELAND- GOOD!
• HOME PRICES STALL; SUCKERS WHO BOUGHT SECURITIZATIONS GO ON STRIKE.
• AUG 2007 – CREDIT CRUNCH LITE
• NOV 2007 – DOW AND S&P NEW HIGHS! ONE MONTH LATER – RECESSION!
• BEAR! LEHMAN! AIG! TOO BIG TO FAIL! REPUBLICAN PRESIDENT SHOVELS MONEY AT BANKERS, NO SURPRISE.
• AMERICA VOTES FOR CHANGE!
• AMERICA GETS OLD ECONOMIC TEAM, OLD IDEAS. DEMOCRATIC PRESIDENT SHOVELS MONEY AT BANKERS – BIG SURPRISE!
• UNEMPLOYMENT, CREDIT CRUNCH, DELEVERAGING!
• PEAK EVERYTHING!
• ICELAND - BAD! IRELAND –BAD! ALSO LATVIA, GREECE, DUBAI, ETC.
• GLOBE WARMS, NATIONS DITHER
• RIP: EMH, SHADOW BANKING, NEWSPAPERS/PUBLISHING/PRINT, THE GOOD LIFE…
VennData:Newbie investors in Somalia?
"…Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel.
I am waiting for my share after I contributed a rocket-propelled grenade for the operation," she said, adding that she got the weapon from her ex-husband as alimony. I am really happy and lucky. I have made $75,000 in only 38 days since I joined the 'company'…"
The reality of "Audacity of hope"
November 19, 2009 | Asymptosis
Apologies to Churchill for the ripoff. No apologies to Ms. Rand.I remember quite clearly at age 13 saying to my mother and my sister, "why can't people just be objective?"
Pretty amusing in hindsight.
FT.com
Kees van Ravenhorst:
Dear Mr Buiter,
I have always liked the simple story that JK Galbraith recounts in Money, Whence it came, where it went. According to Herodotus the first use gold as means of payment is attributed the the brides of Lydia 8000bC, who would prostitute themselves for gold before getting married. It secured their freedom afterwards. So it seems, gold has a 10,000 years old history of providing some sense of liberty . Enjoyed the provocative article.
Honorable Jim Juback,
Is Nostradamus your distant relative ? Indubitably, Albert Einstein is not.
Is 2010, the year of a double dip fiasco?
Is 2011 the year of massive inflation, deflation and commenced depression ?
Is 2012 the infinite crash of Wall Street, absent of any add-on bail outs, all Govs are Bankrupt ?
Is 2012 the Messiah year ? (Caput ? Finito a la musica with socialism, communism, capitalism, imperialism and alike distorted acronyms ?)
Is it possible that in 2013 there will be Independialism, i.e., formation of multi tribal, independent class inhabitants comprised of micron governments, Worldwide ?
December 4, 2009
First and foremost, blame Bill O'Reilly as he pointed me out to the ElfYourself.com website and thus, it was born. So I thought, hmmm, who are the five little evil bastards most responsible for the onset of the next Great Depression we have really been enjoying this year. It isn't really fair to blame Jim Cramer but I had to choose him because he represents all the hucksters on the various Bubblevisons plus he just annoys the dog crap out of me. Turbo Timmy because he represents the years of incompetent political appointees working in government who never held a real job their entire lives. Ben Bernanke as if any explanation is needed. And of course Presidents Tweedle-Dee (Obama) and Tweedle-Dumb(Bush) who have managed to take a nice, ordinary run of the mill financial crisis and turn it into a flaming, smoking hulk which eventually turns the U.S.A. into one giant crater for the Chinese to stop by and pee in like an old urinal as they tour the ruins of our civilization.
Thanks to all of you for all this and in return, dance you little jerks who have made this year one for the history books…….
Comments (2)
john personna:There are two kinds of people, those who think this is a recovery, and those resigned to their fate.
tradeking13:
A ray of light in an otherwise Bernanke ass kissing session.
censeo:
Amazing, just amazing: to hear an elected official speak truth...
Adult Franklin411:
In short, you are the definition of moral hazard
bailey:
...Nell Henderson, Washington Post Staff Writer Thursday, October 27, 2005, story titled: "There's no housing bubble to go bust".
' "U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households. '
December 3, 2009 | The Big Picture
There are so many things to be grateful for. Where to even start?
- I'm grateful that stock price is directly related to a company's fundamentals.
- I'm grateful that companies always release clear, honest, and unambiguous financials.
- I'm grateful that everything is already priced into the market, and that efficient market theory really works.
- I'm grateful that pricing is never pegged to option expiration.
- I'm grateful that all economists are completely correct and in agreement about everything.
- I'm grateful that the system works for me and not against me.
- I'm grateful that insider trading never happens.
- I'm grateful that frontrunning is only found in science fiction stories.
- I'm grateful that the financial press is there to watch out for me.
- I'm grateful that the myriad seemingly capricious trading rules are there for my protection.
- I'm grateful that drawing lines all over historical stock charts makes me money.
- I'm grateful that I can always buy or sell all of what I want, when I want, at the price I want.
- I'm grateful that nobody views my stop orders simply in order to screw me.
- I'm grateful that the hundreds of pounds of market-related books I've bought haven't collapsed my floor.
- I'm grateful that the tax laws are simple, and thanks to excellent reporting from my broker, it only takes a month to complete Schedule D.
- ... ... ...
AnonymousMonetarist:That'll be all, Senator Sanders
SANDERS: You had Geithner sign a phony asset transfer order–
GREGG: Senator–
SANDERS: You doctored the repos.
JOHNSON: Damnit Sanders!!
SANDERS: I'll ask for the fourth time. You ordered–
BERNANKE: You want answers?
SANDERS: I think I'm entitled to them.
BERNANKE: You want answers?!
SANDERS: I want the truth.
BERNANKE: You can't handle the truth!
(And nobody moves.)
BERNANKE (continuing)
Son, we live in a world that has markets. And those markets have to be guarded by banksters with money. Who's gonna do it? You? You, Senator Bunning? I have a greater responsibility than you can possibly fathom. You weep for capitalism and you curse the banksters. You have that luxury.
You have the luxury of not knowing what I know: That capitalism's death, while tragic, probably saved jobs. And my existence, while grotesque and incomprehensible to you, saves jobs.You don't want the truth. Because deep down, in places you don't talk about at parties, you want me at the wheel. You need me there … We use words like 'growth','stability', 'profits'…we use these words as the backbone to a life spent defending something. You use 'em as a punchline.
I have neither the time nor the inclination to audit myself for a man who rises and sleeps under the blanket of the very guarantees I provide, then questions the manner in which I provide it. I'd prefer
you just said thank you and went on your way. Otherwise, I suggest you pick up a private sector job and stand a post. Either way, I don't give a damn what you think you're entitled to.SANDERS (quietly) Did you doctor the repos?
BERNANKE: I did the job you sent me to do.
SANDERS: Did you doctor the repos?
BERNANKE (pause): You're goddamn right I did
wally:
"…the public's perception that Obama is in bed with Wall Street."
Is he the one whose wife chased him with the golf club, or is that the other one?
The administration is examining strategies for encouraging the ownership of fluffy kittens. "I think we can all agree," the president said, "that in troubled times stroking a fluffy kitten can really help a struggling family to stay on course." The non-partisan Congressional Budget Office has calculated that a tax break of approximately $750 for first-time kitten ownership would cost the government less than $400 per kitten in administrative overhead, for a total cost per kitten (CPK) of $1150.
... ... ...
In related news, in a sudden and uncharacteristic burst of courage, Connecticut Senator Chris Dodd has proposed a federal subsidy for vampire hunting. "Nothing brings a community together like a vampire hunt," commented Senator Dodd. "...
... ... ...
Treasury Secretary Tim Geithner, though, has doubts about Dodd's proposal. "One problem is that it can be difficult to determine which blood-sucking supernatural parasites are in fact vampires and which are duly authorized and well-regulated components of the financial system, such as investment banks.
... ... ...
Congressman Barney Frank also indignantly dismissed Senator Dodd's proposal. "Any attempt to restrain vampires would be disastrous for hard-working American families and their hard-working kittens," Frank sputtered.
Ben Bernanke, it seems, is changing his spots. He is now trying to prove that he is not Alan Greenspan.
Expat:
The major banks have no need for reserves; they have the full confidence and support of the US taxpayer. Why waste money on reserves when you can use it for salaries and bonuses!
I only wish I were being sarcastic.
patientrenter:
Bernanke, channeling Rumsfeld - "The bubble you pop is the bubble you're not in"
(No, of course he would never actually say it out loud.)
yagij:
Nuke wrote:
"Oh well, doesn't invalidate the model. We just need to decrease the friction until we get to 0."
The fact that male economists can argue that continuous stimulus will work and that there will be little/no side effects from it always boggled my mind. I've gotten to the point that they all know it is a lie and scheme but just enjoy seeing who they can get to go along with them.
.
Seriously if you stuck a male economist in a room and told him to continually stimulate himself until the process was self-sustaining, how long would it take before he had admit that he couldn't go on? Why think that the economy will somehow accomplish what he himself cannot?sm_landlord:
Nuke wrote:
Highlights? I can't watch political speeches anymore.
Pathetic, isn't it? I have the same problem. My BS meter pegs immediately, and then I start getting angry if I keep watching.
Not a happy situation.
Expat:
I would like to know how a GS banker can possibly even be considered for a gun permit if one of the requirements is that he be of "good character".
Keenan:
In the spirit of calling a spade, why not from now on refer to them as Gunmen Sachs
The Mess That Greenspan Made
Well, apparently there is at least one thing that former Vice President Dick Cheney and Nobel Prize winning economist (and unofficial White House adviser) Paul Krugman have in common. They both feel the same way about deficits - they don't matter.
a graduate.
cash on hand: $18
family of four to feed
meal: breakfast
location: convenience store
shopping list: bread, milk, eggs, butter, bacon
money spend on: Lotto (lost)
bottom line: one hungry family
Joke's on you, Harvard. That's what you get when you gamble with your milk money. A lot of hungry mouths and you looking pretty stupid.
Posted by: (regrettably) a graduate. Now employed by a fiscally PRUDENT University.
TheRealDianeHolbrook :
James F. Rothenberg, Harvard's treasurer: "We all can look back now and say we wish we did something different."
Some of us did, Bozo.
Wrinkles:
It would take a heart of stone not to laugh.
But seriously, isn't the AG or Secretary of State supposed to investigate gross mismanagement of charitable funds? To me, it looks like there should be a state investigation into the malfeasance at Harvard surrounding the endowment. But, I won't hold my breath...
downeastjim:
Yet, the Harvard money managers, as all other 'money managers', were still paid obscene salaries and bonuses. Their bonuses included 'retention' bonuses to keep those money managers from taking their talents elsewhere. And some wonder what is wrong the economy? Priceless.
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