SW Richmond

Wall Street Breakfast: Must-Know News

Difficult to imagine that the President of the New York Fed knew nothing about the Lewis/Bernanke/Paulson pressure, terms of the deal, etc. I think we need to empanel a Grand Jury and invite these criminals to either take the fifth, narc on one another, or invoke some imaginary privilege.

Paulson: "Executive Privilege / National Security"
Bernanke: "Trade Secrets"
Lewis: "I'm the Fall Guy"
Geithner: "My software at the Fed didn't tell me what to do."


On Apr 24 12:35 PM Cetin Hakimoglu wrote:

> Maybe he knew nothing. Maybe this finger pointing is unjustified.
>

Wall Street Breakfast: Must-Know News

Next question: TurboTax Timmy was president of the New York Fed during the time in question. What did he know, and when did he know it?

Wall Street Breakfast: Must-Know News

"...talks between Bank of America and the Fed and Treasury..."

Yes they were "talking", but after Lewis asked for something in writing they also told Lewis that they didn't want to create a "discloseable event". Given this testimony from Lewis under oath and the discussed desire for non-disclosure of the information to shareholders, this activity seems to rise from "talks" to the level of "conspiracy."

Grand Jury, please.

Wall Street Breakfast: Must-Know News

"they will also have to pass a test to determine whether the repayment is in the nation's economic interest"

Da, comrade. There are no markets, there are only interventions.


"The comments come as Goldman Sachs (GS), JPMorgan Chase (JPM) and other relatively strong banks push to be allowed to repay bailout funds."

This is such a confusing situation. GS, JPM et al are anything but "strong", and I think it's a stretch to even classify them as "relatively strong". IMO they are more like "nearly dead" from the movie "Princess Bride". The best visual I can offer is when Billy Crystal had to use a bellows to pump air into the lungs of the "nearly dead" Cary Elwes so that he could speak.

Perhaps the "relatively strong" banks would like to also swap back all the Treasuries they have exchanged for their nearly dead MBS at the TALF / TSLF? If we're gonna press the reset button and let these banks start paying an average of $600,000.00 salaries / bonuses, lets reset all the way, shall we?

It's the Politicians, Not the Public

On Apr 03 08:26 AM cocomurph wrote:

> ...and who elected ( and continues to mostly re-elect ) these politicians?

A public that has been bombarded (successfully) with the false left-right political dichotomy. More and more are realizing that both parties work for the same masters; the crisis has forced the masters to reveal themselves.

The AIG Counterparty Argument: Nothing to Gain, A Lot to Lose

"I said that I didn’t quite get why this was developing into a big deal."

"Demonizing the people that we need to cooperate with in order to work out these problems leads down a road with an ugly end point."

From your linked post:
"I have a hard time getting too worked up about all of this."


When you say "cooperate" in order to "work out these problems", don't forget I know full well that what you are actively advocating is holding a gun to my head, stealing from me, and giving the money to Wall Street so that they can continue to work against my interests.

Yeah, I think it's a big deal, and I get real worked up about it.

The Road to Economic Hell

plumstupid wrote:

"Until and unless people begin acting responsibly, and that's to say without indifference, there must be an agreed upon set of behaviors."

Until we stop protecting people from the consequences of their own irresponsible acts, people will act irresponsibly. In fact, by subsidizing irresponsible behavior, we guarantee a never-ending supply of it.

The Road to Economic Hell

mac.barron:
"For the anti-Obamaites the best hope might be that the government keeps overreaching. Eventually, when things deteriorate enough, huge federal debt and lack of tax revenue will literally force a huge reduction in government funded corporate welfare AND entitlement programs for those addicted to the system."

In my darker moments I indulge this fantasy. The delusions of socialist grandeur are too great for the dems to ignore, and I believe they are accelerating the day of judgment for USD. There is no money for any of this foolishness, certainly not for national health care, but they're going ahead with it anyway because they have the house, senate and white house. Sometimes I am genuinely not sure if resistance is warranted, since their current efforts actually hasten the arrival of reality.

For what it's worth, I opposed Bush all along the path, to no avail. Sometimes it's tempting to simply stand aside and watch, when you know they won't listen to you anyway, when you're not rich enough to compete with big money lobbyists, and when you know that your only chance to regain lost liberty and reform the corrupt system will be during a systemic breakdown that could just as easily "go the wrong way". There will be a critical period when these things will be decided.

U.S. Debt Watch: Paths to Repudiation

The debt situation is the only one that anyone interested in fundamentals need pay attention to. Thanks for the article.

constructe,

I believe the reason there has been no commitment to any "plan" is because no actual solution exists. As soon as any "plan" is committed to by DC, the markets will pick it apart and tank. The only play for DC is to keep hope alive by continuing to act like they're working up a good plan. The markets are tiring of this, yet it remains the only play for DC.

There is no good plan. There isn't enough real capital in the world to save us. The author correctly points out that there are many paths to default and they need not be exclusive. He also correctly points out that the creditors will be "making most of the concessions", as in "taking the haircuts", as in "seeing their capital destroyed."

This is precisely why physical assets trump paper assets in this environment. Holding paper assets makes you a creditor.

What to Buy and Why: Barron's 2009 Roundtable, Part II

"Short the Hungarian forint against the euro"

This trade's pretty much discounted, isn't it?

CDS Industry: Zero Sum Game or Ponzi Scheme?

CDS are madness, just madness.

From a piece by Antal Fekete:

"‘Progressive’ banks were free to heap debt upon debt in the asset column of the balance sheet without any regard to reserve ratios, in a mad chase of illusory paper profits. If the balance sheet was not big enough, why, they could simply go ‘off balance sheet’ to add more debt."

"You cannot hedge these risks through owning more debt ― the liability of someone else. A hedge that is subject to exactly the same risks would not diminish but magnify risks."

"For a true hedge, you need an ultimate asset that is not the liability of anyone."

The world is coming to terms with what the phrase "counterparty risk" really means. If counterparties were solvent and fully capable of meeting their CDS obligations, there'd be no need for keeping AIG et alia out of BK court, would there?

Great Depression Not Imminent, But Inevitable

Monetarism and B-School Economic and Banking Theory will be the last paradigms to be shattered by this event.


On Dec 17 03:37 PM JasonC wrote:

>
> Simply dumb. What covers real risks is spreads, spreads are at epic
> levels, ergo even epic levels of risk can be objectively handled
> now. The silly and dangerous bit was the low spread world we just
> exited --- exiting it has destroyed so much capital taking credit
> risk for a living (which used to be known as "banking", duh) that
> spreads have reacted to the opposite, silly extreme. Someone will
> realize these epic spreads are buys when the narrow ones were sells,
> and be profitable as a banker again. Those who believed that it
> was possible to be a banker at spreads of zero were wrong, those
> who now believe it is impossible to be a banker at spreads of 10%
> over risk free rates are just as wrong.
>
> Both are trend following idiots and not bankers.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

Well written and very very informative. You stopped short of suggesting that the financial engineers want to hang on to the CDS model as long as Treasury is willing to loot the taxpayers to pay for it. I'd love to have a look at JPM's CDS book.

So You Think You Want a Bailout? U.S. Government's Rules and Exceptions

"The first priority is still stabilizing the financial system, in the hope that some semblance of normal lending to business and consumers will resume. For better or worse, the companies that get priority attention are those whose failure would be most catastrophic to the banking system."

Except that these are the same morons that were in charge of the system (banks, Congress, etc) while it was engaging in the excesses that got us here. So tell me again exactly why they get to hold a gun to my head and take my money?

Lehman's Lies

Next bubble: piano wire.