Comments on Jason Lindt's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/jason-lindt/articles http://seekingalpha.com/article/132200-math-problems-at-the-imf?source=feed#comment-475126 475126 Thu, 23 Apr 2009 22:01:01 -0400 http://seekingalpha.com/article/132200-math-problems-at-the-imf?source=feed#comment-472327 472327 Wed, 22 Apr 2009 08:44:46 -0400 http://seekingalpha.com/article/132200-math-problems-at-the-imf?source=feed#comment-472280 472280 Wed, 22 Apr 2009 08:05:23 -0400
If you were weren't clueless before you started reading.......]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-264352 264352 Thu, 25 Sep 2008 00:18:10 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-264005 264005 Wed, 24 Sep 2008 16:42:00 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-263524 263524 Wed, 24 Sep 2008 10:53:05 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-263514 263514 Wed, 24 Sep 2008 10:41:31 -0400
To User 207572: as I mentioned, Treasury's $700B budget comes nowhere close to covering the universe of assets that are becoming impaired.

To ksh: unfortunately I don't believe the Congress understands this alternative. In a rush created by the administration, Paulson & Bernanke, Congress had little time to listen to any other opinions.

To Asbytec: I hope you're right and it is a liquidity problem. What makes me doubtful is that is how Bernanke has been tackling it so far, exchanging half of Fed's balance sheet for suspect assets, but conditions have kept deteriorating, with lending declining and spreads continuously widening.

To the social scientist. A lot of the paper is theoretically insured both through financial guarantors like Ambac and the CDS markets. However financial guarantors seem to be practically insolvent at this point and the extent of CDS coverage is unclear. We know AIG wrote CDS on ~$450B of senior CDOs straight-up, but most other firms, for example Lehman, would have offsetting CDS exposures, which is why traders from other banks had a frantic Sunday two weeks ago trying to reconcile those offsetting positions. So the notional of CDS market is $62TR, of which Lehman accounted for $2TR, but net is much smaller. AIG did not have offsetting exposures though, so if they defaulted, people who bought insurance from AIG would have to mark those assets to market.

CDS would not apply to the assets that the government purchases, because the selling bank can't just pass the contract along with the asset. However the financial guarantors obligations do apply, so if those guys magically recover, the government losses should be smaller

I did see Krugman's several articles on this and agree with his assessment - hope he can get heard by people on the Hill.

Saving the financial institutions will theoretically help housing indirectly through propping up other lending lines which will not let the economy slide into a very deep recession (as it seems all but certain that were are sliding in one)]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-263084 263084 Tue, 23 Sep 2008 22:43:10 -0400
I just haven't bought into the solvency argument. I see it as a liquidity problem. Money created through mortgage backed derivatives is now fast disappearing. Most of the money floating around the world is fiat money. Imagine if the entire derivative market failed.

I get the feeling Paulson wants to buy up he bad debt to pump money into the banking system so we can continue down the road of excess consumption. Get back to business as usual. I think that's a mistake to rebuild the house of cards.

The "alternative" Paulson speaks about is depression. I think congress understands this but just won't use the "D" word.]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-263031 263031 Tue, 23 Sep 2008 21:12:08 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262715 262715 Tue, 23 Sep 2008 14:23:52 -0400
The situation in fact varies widely from country to country. In the UK around 70% of housing is owner-occupied; whilst this country doesn't have the subprime issues afflicting the United States, it does have the same overinflated house prices pumped up by a government that wants consumers to feel rich, borrow more than they can afford, and keep the economy - and the financial system - growing (no matter how narrowly focused that growth is). Ireland and Spain also have high rates of home ownership, and each are also on the cusp of the same housing meltdown now affecting the UK. In the case of Ireland the problem lay in joining the EUR and applying interest rates set primarily with Germany in mind and far too low for the Irish economy. As for Spain - think Las Vegas and you'll be on the right track.

On the whole, German-speaking countries have avoided these excesses, in large part because they have barely been infected by the idea of residential property as an investment rather than a roof to live under. There are exceptions of course (e.g., Berlin apartments and Swiss resorts), but on the whole the generalisation is true. Switzerland, for example, has had no housing bubble outside the ski stations, and even senior corporate and banking types are quite happy renting because that's part of the culture.]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262699 262699 Tue, 23 Sep 2008 14:17:31 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262655 262655 Tue, 23 Sep 2008 13:37:52 -0400
Perhaps you can clarify where credit default swaps enter into all this. Wasn't all this bad paper insured against default? Who, other than AIG sold the insurance? How is it possible that the notional value of the insurance far exceeds the total amount of debt? Does a seller of the debt keep the insurance, and then the buyer buys a new insurance on it? Or when they repackage the loans do the buyers of the loan package buy new insurance? Or? Do insurance sellers know they are selling more than one insurance coverage on a loan?

Did you see Krugman's take on Paulson's plan? Krugman says we should demand equity ownership in the institutions from which we buy the debt. Makes perfect sense. If the intent is to free up credit, by improving the equity positions of the lending institutions, then pour equity capital into them. This also does more to resolve the deleveraging paradox (where everyone is deleveraging, which deflates asset prices, which worsens everyone's debt to equity ratios).

Will rescuing the financial institutions help the housing problem? I don't see how. Those who are qualified to get home mortgages already can through Fannie Mae etc.

Did you see where Microsoft is going to borrow, using commercial paper, to help fund the purchase of $40 billion worth of their shares? That really helps the credit crunch and the economy, doesn't it? So they don't see any avenues for expansion? Worried about the value of management's stock options are they?]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262621 262621 Tue, 23 Sep 2008 13:12:57 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262620 262620 Tue, 23 Sep 2008 13:11:59 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262527 262527 Tue, 23 Sep 2008 11:37:56 -0400
I also get the feeling Secretary Paulson, a long time Wall Street insider, is asking for $700bn to rescue his friends and is fighting to keep any of that bail out money from reaching hands of ordinary Americans. A financial bail out might be necessary, but it stinks.

And if he does manage to funnel that money into the hands of his Harvard buddies, we'll soon get back to business as usual. As soon as home values recover, you can bet they'll succumb to greed and stack debt on debt to make money and loan it back to us with interest.

I support what I hear coming out of congress. We need to keep folks in their homes and rescue the housing market, specifically. And, almost as an after thought, we can help bail out the financials. They need it, and they need oversight.

Speaking of oversight, I heard it called archaic and out dated. It might be, but we have oversight folks, and I include everyone's pal Mr. Greenspan among them, actively turning a blind eye to the phenomenal money created. What is not outdated is the obligation our oversight has to prevent such crisis. As long as times are good, no one raises any red flags.

So, rebuild some insight, keep tax payers in their homes and toss a little money at the financials. But more importantly, we need a structural change to get away from the excessive greed that got us here to begin with. We need to get back to fundamental money supply and stop creating paper promises based on asset values.

And no golden parachutes funded with tax payer money for folks who are already rich. In fact this problem is so great, they have staggered not only the US economy but the world economy, their actions boarder on treason. Jail time would be appropriate for some.

And to hear Obama blame Bush is simply idiotic political rhetoric. This problem has been in the works through many administrations and legislatures, both Rep and Dems, for a great long time. Decades.

]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262461 262461 Tue, 23 Sep 2008 10:45:56 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262397 262397 Tue, 23 Sep 2008 10:01:29 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262364 262364 Tue, 23 Sep 2008 09:27:27 -0400
]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262296 262296 Tue, 23 Sep 2008 08:37:37 -0400

Poor people not affording homes is their problem....not the markets. Most people in Europe cannot afford homes, Why should we infringe on some people's rights to enhance the life of others?

When did people expect they should get everything just because they have a heart beat?]]> http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262265 262265 Tue, 23 Sep 2008 08:14:33 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262202 262202 Tue, 23 Sep 2008 05:56:01 -0400 http://seekingalpha.com/article/96826-do-paulson-and-bernanke-really-understand-what-s-going-on?source=feed#comment-262189 262189 Tue, 23 Sep 2008 05:28:05 -0400 http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-260149 260149 Sat, 20 Sep 2008 14:29:16 -0400
the collapse of FNM/FRE was a symptom...not a cause of the broader financial collapse, which is a work-in-progress because of a critically overleveraged financial system in both the consumer and commercial sectors of our economy. the overleveraging occurred because of too many years of cheap and plentiful credit made available by the dysfunctional policies of both our elected officials...republican and democrat...and their appointed proxies.

if you want to defend the role republicans played in this disaster, have at it if you can. you can start with that great republican "free-marketeer" alan greenspan, a reagan appointee, who never met a bailout or adjustable rate mortgage he didn't like, and never made an interest rate cut that he didn't defend, no matter how many economists say it was indefensible of him to push the fed funds rate to 1% and hold it there in the aftermath of 9/11. then there is dick cheny who contributed his knowledge of economics by saying that "deficits don't matter." then there is george bush who adopted the reagan mantra that "government regulation is the problem, not the solution." until now, that is. and then there's the republican candidate for prez, good ole boy "deregulation john mc cain," who early in the week opined that the economy is "fundamentally sound" but changed his mind when advisers told him that if he couldn't come up with anything more intelligent than that he would talk himself right out of the white house. now i guess he thinks the economy is in the shitter. no kidding. and anyone who thinks it's over because of this proposed taxpayer bailout is absolutely clueless.

wake up.



]]> http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-260073 260073 Sat, 20 Sep 2008 13:03:30 -0400
It would also seem to be a conflict of interest for GSE type companies to give money to the election funds of any government politicians and a conflict of interest for politicians to receive such money. GSE firms were setup to take care of taxpayers but seem to be taking care of those who are charged with GSE oversight and why is it that the liberal politicians are at the top of the recipients list of GSE funds?

I remember several years ago someone tried to offer a bill to control the GSE firms and I also remember that a Senator who received large donations to his election fund was instrumental in blocking the bill. Anyone remember who?
]]> http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-259998 259998 Sat, 20 Sep 2008 11:38:44 -0400 http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-259907 259907 Sat, 20 Sep 2008 10:07:44 -0400
I can see next steps being required as including:

1. An RTC type vehicle to hold and sell assets of failed banks.
2. Nationalization as in the case of FNM/FRE/AIG.
3. Combination to create a stronger entity post acquisition like BAC/MER.
4. Active marketing of new capital requirements to SWF’s and nations with budget surplus.

Everyone has a responsibility to act; this crisis may have started out in the US, but its impact has and will continue to be felt the world over. How bad it gets depends on how early and how actively the world engages in seeking a solution.

Escalating deficits from the rescue packages will cause an elevation of inflation; this will hurt the world. In my view nations which can look at risk from a multi-decade perspective will need to engage in providing a solution.]]> http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-259316 259316 Fri, 19 Sep 2008 14:10:44 -0400 http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-259191 259191 Fri, 19 Sep 2008 12:35:40 -0400
Ha ha, that is a great idea!
Just like the FDIC fund that is funded with (still) AAA rated Treasuries...]]> http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-259080 259080 Fri, 19 Sep 2008 11:36:55 -0400
When did it become the government's job to ensure that investments such as bonds, stocks, and real estate never lose money?

In the case of these bailouts, the investment losses of the foreign SWFs were shifted to American taxpayers, but of course the foreign SWFs get to keep whatever gains they had over the years. Why would your own govt. put all this debt on you for the benefit of foreigners?

Assets = Liability owners + Equity owners
so...
Government = Foreign creditors + Taxpayers

Thus, government is partially owned by the people we owe debts to. These bailouts are a sign that they now have a majority stake.]]> http://seekingalpha.com/article/96368-it-s-time-for-a-u-s-sovereign-investment-fund?source=feed#comment-259079 259079 Fri, 19 Sep 2008 11:36:40 -0400