iShares S&P Global Financials Sector (IXG)

All Comments on IXG

  • commenter
    Stockasticia
    n
    Oct 07 07:33 PM
    It's the Capital, Not Liquidity, Stupid [view article]
    The government is in paralysis. They continue doing what's been proven ineffective and wrong repeatedly, injecting liquidity. This is getting pathetic. Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 07 12:04 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    "I'm very tempted to suggest Fed start lending mortgages directly
    -- it would've been funny if it weren't so sad."

    Oh don't worry...Section 110 of the bailout legislation allows a "federal housing manager" to dictate terms of a rewrite to a mortgage -- i.e. they can tell the lending institution that they need to lower the principal on a given mortgage. That's just about as good as lending directly -- the feds become the housing market...they decide the pricing. Kiss free-market economics goodbye, my friends!! Unless...we discard *EVERY* Congressman and Senator who voted for this pile of crap bill...send 'em ALL packing -- the new ones will then understand that order of business # 1 is to revoke the bailout bill and let FREE MARKETS work!!!

    We REALLY need to be unified on this and make it happen!!!
     Reply
  • commenter
    JasonC
    Oct 07 11:16 AM
    It's the Capital, Not Liquidity, Stupid [view article]
    Everyone on earth is "dumb enough" to fund "dumb bets", since 90% of the world's money supply is debt of banks, none of which is solvant at the 20% rates being demanded now. Depositers or takepayers are already on the hook. The only question is whether they want to still have a financial system or would prefer to try living without one. That they take the hit is baked in either way. I have no doubt whatever that the pain is less if they recapitalize the existing banks than if they deliberately destroy them all.

    It is flat stupid for senior creditors to insist on bankrupting what they already own. And that is what depositers and their agents, the governments, now are. They own the banks they are destroying.     Reply
  • commenter
    Brice
    Timmons
    Oct 07 11:09 AM
    My Website
    It's the Capital, Not Liquidity, Stupid [view article]
    Bravo! First truly sensible analysis I've seen here. Reply
  • commenter
    constructe
    Oct 07 10:31 AM
    It's the Capital, Not Liquidity, Stupid [view article]
    The Fed should butt out and let the market contract so we can get on with a new unbubbled expansion. Recovery, true recovery can only come once the bad stock is cleaned out. Let new banks replace the old ones that fail and give a little prayer to those dumb enough to finance their dumb bets by buying their stock or bonds or buy CDS insurance from them. Otherwise, the US will look like Iceland and I doubt the Russians will bail us out too.

    Right now it looks like they're opting for the 30 year recession Japan is experiencing except we may have it with inflation thrown in because unlike Japan we are a massive debtor nation.     Reply
  • commenter
    Smarty_Pants
    Oct 07 10:23 AM
    My Website
    It's the Capital, Not Liquidity, Stupid [view article]
    The author is correct. Banks have no reserves except those they have borrowed from the FED. FED data supports this:

    research.stlouisfed.or...

    Technically the banks are bankrupt. If not for borrowing from the FED they would have negative reserves. Term Auction Facilities and the like are nothing more than life support for the banks, hoping that a solution can be found before it's "too late".

    Further, until housing prices firm up and stop falling, the capital position of banks with illiquid level 3 MBS will continue to erode as prices fall. Expect more FED borrowing just to keep banks' heads above the water line.

    Sadly, recent business models seem to rely a great deal on the use of borrowed money to fund day-to-day operations. This combined with the capital positions of the banks has resulted in everyone being in the same boat, begging for funds to keep the store open.

    Expect a considerable shift back to prudent management practices where operations are funded from actual revenues, once short term obligations can be covered. Until then it will be rough going.     Reply
  • commenter
    Stockasticia
    n
    Oct 06 09:56 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    No, Fanny and Freddie were not clean from subprime crime. I don't want to divert this thread into a postmortem of GSE's (many) ills. My point is, subprime and Alt-A were only a small portion of their asset pool. If things hadn't gotten ugly in prime, the conservatorship would not have been necessary. Reply
  • commenter
    midas79
    Oct 06 08:24 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    Sorry, but I think Fannie and Freddie were far more intimately involved in subprime than you think:
    online.wsj.com/article...
    A good point, though, that this has been spreading to prime for some time.     Reply
  • commenter
    Stockasticia
    n
    Oct 06 07:47 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    Update: Fed is apparently getting ready to lend directly to lower rings of the money supply chain. It's a de facto admission of failure of the blind liquidity injection to the banks, exactly as I said above. I'm very tempted to suggest Fed start lending mortgages directly -- it would've been funny if it weren't so sad.

    Banks are flooded with cash. But such short-term liquidity cash is of no use to most of them. What they need is capital injection. How many will fail before Paulson gets around implementing the bailout plan? It would've been so much faster if the government would follow Buffet's GS model.     Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 06 05:26 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    It's just not working. Search "Fannie Freddie subprime", choose the marketwatch dot com link to the article titled "Fannie, Freddie seen facing subprime losses", dated July 27, 2007.

    Here's the first few paras:

    [quote]
    SAN FRANCISCO (MarketWatch) -- Fannie Mae and Freddie Mac could have $4.7 billion in unrealized losses from the deterioration in subprime mortgages, Citigroup's fixed-income strategy team estimated on Friday.

    The bank's strategists said that probably won't be a big problem and argued that recent moves in the credit-derivatives market suggesting Fannie (FNM) and Freddie (FRE) are more risky have been overdone.

    The estimated $4.7 billion in losses represent about 6% of the equity capital of the government-sponsored mortgage-finance giants, the strategists noted, adding that Fannie and Freddie's retained portfolios contain roughly $182 billion of subprime bonds, most of which are rated AAA.

    By contrast, their total mortgages exposure is pegged at more than $3 trillion. Most of this is related to prime mortgages, which is supported by the fact that delinquencies in their guarantee portfolios have not increased so far this year, Citigroup said.
    [end quote]

    Note that this is over a year ago, and losses have mounted steeply since then, ending with the bailout of Fannie and Freddie.

    No subprime at F&F???
     Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 06 05:22 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    guid={039A6514-2144-4B...
     Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 06 05:21 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    Ugh. URL for the Fannie & Freddie subprime:

    www.marketwatch.com/ne...?
    guid={039A6514-2144-4B...

    You might have to copy and paste it together.     Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 06 05:18 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    stonecoldguerro: BS, buddy!!!

    "Finally someone tells the truth....Fannie & Freddie were not buying subprime...they a buy only A and very little alt-A. Any mortgage lender will tell you that."

    They were the *first ones in*!!! When the Clinton admin began its push for wider homeownership, the pressure was on the banks to lend regardless of creditworthiness. Once they began piling up these loans under pressure...the banks wanted them off their balance sheet and began pushing back for the ability to sell them off to F&F.

    Over a year ago, it was noted that F&F had over 6% of their capital in subprime debt:
    www.marketwatch.com/ne...={039A6514-2144-4BC7-B...

    Get your facts right.
     Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 06 05:12 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    I'll tell you what has happened: we've all awoken to realize that we cannot trust our Federal government...and not just that, because there have been doubters since the beginning...but the awakening is that the mistrust was not only true, but that they are *actively* screwing us over in this situation, in an attempt to shore up a house of cards that is about to fall in. I'm referring to the Federal government itself. I know this is cryptic. Keep focused on the news in the next 7 to 10 days. And buy some canned goods.
     Reply
  • commenter
    icandoitdon
    Oct 06 05:06 PM
    Added Liquidity Part of the Problem, Not the Solution [view article]
    good article and sounds right to me. as for the fed's mopping up the liquidity they've injected, it isn't going to happen because (a) it would be tantamount to publicly recognizing their error; (b) it would further diminish confidence (for those stupid enough to have any confidence in that inept outfit) and (c) their knee-jerk policy response to any financial crisis has always been...without exception....adding liquidity. worry about the consequences later.

    the inmates run this asylum....don't expect competence.     Reply
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