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    • Wed Sep 24th 14:34 PM | Rating: 0 0
      Commented on:
      CDS Market Remains Biggest Issue Facing Monetary Authorities
      With 'Barry' I think you are talking about Barry Ritholtz?

      Therefore it would be nice to know what the 'some reason' is that Barry cannot write here any longer.

      At first you could read his wise stuff and place comments.

      Later he placed less stuff and he was the only author on this website where you could suddenly no longer place comments.

      And now he is completely gone...

      But on his own website he is working frantic with many updates a day,
      link:

      bigpicture.typepad.com/

      So what happened?
      View article »
    • Wed Sep 24th 14:20 PM | Rating: 0 0
      Commented on:
      Dollar Bulls and Bears Struggle for Dominance
      Stupid me: I forgot to post the source link!

      Sorry, I can be exponentially stupid too, but here is the link:

      www.federalreserve.gov...

      Go to the one before last column and scroll down to you see the latest fun like 16.5 trillion US$ size.

      Don't forget: There are still plenty millions of US citizens that think they have a constitutional right to refi and that there is no problem in letting total debt levels grow faster than the GDP for decades...

      But when your debt level is 3 times the GDP what will happen???
      And 4 times? And 5 times?
      Do you now mean what 'credit crisis' actually means?
      This has nothing to do with sub prime, this is the big hammer...
      View article »
    • Wed Sep 24th 14:15 PM | Rating: 0 0
      Commented on:
      Dollar Bulls and Bears Struggle for Dominance
      The fact that there is a struggle between the bulls and the bears simply reflects that the bulls are far away from fundamentals.

      Some fundamentals are:

      US financial sector debt rose another 1.5 trillion in the last year, we had the latest FED Z1 release out last week. And the last thing money traders do is going through all those difficult statistical nonsense!

      But it clearly says:

      Total US fin sector debt:

      2007 Q2: 14998.1
      2008 Q2: 16507.5 billions of US$

      Just 1500+ billion standing on the debt side of the US bank books.
      The 700 billion bail out plan only affects the 'asset side' of the bank books but the dollar bulls can't care less...

      BTW, the 700 billion toxic debt is old debt from a few years ago, the new 1500 billion debt is toxic within a few years.

      Are there still weird bulls out there? (As a matter of fact there are, beside debt also stupidity can grow exponentially!)
      View article »
    • Wed Sep 24th 13:16 PM | Rating: 0 0
      Commented on:
      Curing the Credit Crisis: A Better Alternative Plan
      The first link in the article has been very helpful!
      Rather likely it is true because when the 700 billion US$ are used to buy the stuff at market value, record losses have to be taken...

      To be honest, your plan makes a lot more sense compared to what debt huggers Paulson and Bernanke are doing. Therefore it will not happen (the Americans themselves allowed Wall Street to suck up all this power all these years and their political system is from 5000 BC so it will not happen).
      View article »
    • Wed Sep 24th 10:06 AM | Rating: 0 0
      Commented on:
      Where's the Bottom? Still Anybody's Guess
      A fiat money system like we can can survive a long time if the money supply is under control. There even are some simple laws that guide what money growth should be:

      M3 money growth = GDP growth + inflation growth.

      But the US Federal Reserve stopped publishing M3 money growths years ago with the weird argument 'This number gives no additional economical insight' (or words like that).

      Of course a fiat money system can blow itself up if it is too far in the debt, this is called a Ponzi financial unit.
      In a Ponzi financial unit the debt is so high that even for the interest more borrowing is needed.

      As soon as the debtors find this out, the plug will be pulled.

      An example of such a Ponzi unit is the combined US financial sector;

      Even this last year when the credit crisis started they borrowed over 1500 billion more, now the total debt is over 16,500 billion US$ and is growing 10% a year.

      The whole problem only emerges when the speed of borrowing is far above GDP growth, this is the case for many years in the USA.

      And that is simple to explain: Alan Greenspan never did see the dangers coming with entire sectors borrowing themselves to death...

      View article »
    • Wed Sep 24th 08:30 AM | Rating: 0 0
      Commented on:
      Housing Collapse Caused the Current Crisis?
      To Doomsday:

      The solution is utterly simple: Just pay off the debt...
      That's all that is needed, simply pay your debt!

      We had a new FED Z1 release last week, total debt that the US financial sector has upon herself:

      2007 Q2: 14998.1
      2008 Q2: 16507.5 billions of US$.

      Link (look in the one before last column and scroll down:
      www.federalreserve.gov...

      So during this so called credit crisis the entire US financial sector picks up over 1500 billion in new debt and year on year this is a debt expansion of over 10%.

      Another funny detail: The total debt is over one US gross domestic product so a lot of this new debt will turn toxic in the future because the amount is so big it will never get paid back.

      Why Bernanke and Paulson think that just picking up 700 billion in toxic loans from the banks will make much of a difference beats me.

      View article »
    • Wed Sep 24th 08:10 AM | Rating: 0 0
      Commented on:
      Buffett Enters the Fray
      Barry from the bigpicture blog has a perfect article explaining it is even far more then 10% a year.

      Here is the link:
      bigpicture.typepad.com...

      Buffet sure knows his way around. I don't think this is a vote for confidence but a nice grab of dollars.
      Read the article from Barry and if you after that would like a bit of the newly offered 2.5 billion common stock, don't complain about future haircuts...
      View article »
    • Wed Sep 24th 05:58 AM | Rating: 0 0
      Commented on:
      Can Hank Paulson Lead?
      Well, JasonC did not back up that the fantastic US financial sector is taxed twice as hard as the rest of the US economy.

      Therefore future comments made by JasonC are to be taken with a little grain of salt I just guess...
      View article »
    • Tue Sep 23rd 15:03 PM | Rating: 0 0
      Commented on:
      Can Hank Paulson Lead?
      To JasonC:

      You say, quote:

      Finance pays the US treasury a trillion dollars a year in taxes, personal and corporate, on top of everything they earn for themselves.

      Unquote.

      So JasonC, why don't you back that up?

      As far as I know reality, the US financial sector is only about 20 to 21% of the US economy.
      And they would cough up about 40% of government intake?????

      So, as a matter of fact; the US financial sector is taxed twice as hard as the rest of the US economy?

      You are a funny guy Jason (or whatever your real name is)!
      View article »
    • Tue Sep 23rd 14:56 PM | Rating: 0 0
      Commented on:
      Can Hank Paulson Lead?
      What most commentors above forget or do now know:

      New debt taken on by the US financial sector is still above the previous years now we are one year into this credit crisis.

      Here are some facts:

      At the end of 2007 Q2 total debt was 14998.1 billion US$
      At the end of 2008 Q2 total debt was 16507.5 billion US$

      That is above 1.5 trillion in new debt so this 700 billion rescue plan will not work. You see: total debt in the US financial sector expands exponentially above 10% a year at the moment of writing.

      The Hank Paulson clown says: We have to take this toxic debt from the balances of the banks.

      But this so called 'toxic debt' is only old debt like for example mortgate debt from 2004 or 2005. At that point in time I knew it would grow toxic and at this point in time I know the new 1.5 trillion debt will grow toxic in the future...

      The Americans; they are just as stupid as they are obese!

      Here is the source link that gives the above mentioned facts:

      www.federalreserve.gov...
      View article »
    • Mon Sep 22nd 17:57 PM | Rating: 0 0
      Commented on:
      Interdependence and This Crisis
      I like the Paulson plan because it is about the size of one year US defense spending right now (only 700 billion US$).

      But when you do a bit more calculations one easily observes we will have about 900+ more toxic debt created this year.

      I will not explain, you can do your own thinking when you read the next link (look at the one before last column where the combined US financial debt is on the hook):

      www.federalreserve.gov...

      Have a nice life trying to understand the debt growth...
      View article »
    • Mon Sep 22nd 08:13 AM | Rating: 0 0
      Commented on:
      Goldman, Morgan Stanley Become Bank Holding Companies
      The two above mentioned vids are nice, but for me they contain nothing new. Of course this 700 billion bailout plan will fail because it is far too small.

      Don't forget this administration has done more completely weird stuff: Tax cuts so that the economy would grow so fast and long that in the end there would be more taxes instead.
      Economic stimulus packages that are pissed away by now; drinking beer and eating bread and meat does not give good grow for the economy...

      And now this dumb plan, my calculations indicate that in the US financial sector only the toxic debt will grow with at least 900 billion a year. And these are not credit card loans or car loans, these are loans done by US financial institutions...
      Up to the tune of at least 900 billion a year!

      Check for yourself, here is the FED file & look in the one before last column:

      www.federalreserve.gov...

      Doesn't it clearly say: US fin sector total debt = 16507.5 billion US$

      Ha! Far above one GDP so lots of that will never get paid back.
      Fairy tales that only 700 billion will do it's magical work can only come from dumb people!
      View article »
    • Mon Sep 22nd 07:39 AM | Rating: 0 0
      Commented on:
      The Bailout to End All Bailouts
      I have just done some calculations and they say:

      In the most rosy picture, toxic debt will rise with at least 900 billion US$ a year for the next two years.

      Let me explain:

      The US financial sector is about 20% of the US economy and as such is about 2800 billion US$ a year in gross domestic product terms.

      The total debt of the US fin sector is right now 16507.5 billion US$.
      That is far above the GDP and in the most rosy picture it grows on exponentially with 5.4% a year.
      Since it is above the GDP and grows faster than the GDP, large parts of the 16507.5 debt are in fact toxic.

      5.4% is about 900 billion new debt, hence toxic debt grow in the fin sector is at least 900 billion a year.

      __________

      At last: The toxic debt that is bought by Paulson is mostly consumer related; houses, cars, student loans and so on.

      All in all: 700 billion is not enough, 2500 billion or more would be better...
      View article »
    • Sat Sep 20th 16:50 PM | Rating: 0 0
      Commented on:
      Prepare to Sell Monday - Cramer's Mad Money (9/19/08)
      For me, as a guy from Europe, the Cramer guy is a very interesting study in the social sciences. Any air time to that guy is the same as giving air time to Paris Hilton or Britney Spears.

      That part of the USA I still do not understand: Why are celebrities so important? May be they play some role like the knights and dukes did in Europe centuries ago; they had the power and in the USA the people 'famous for being famous' have a lot of power in the sense they get air time every time they burp some silly stuff.

      Like Barry Ritholtz lately pointed out: Cramer is part of the entertainment industry and not part of serious financial analysis.
      View article »
    • Sat Sep 20th 16:36 PM | Rating: 0 0
      Commented on:
      Banks on the Verge of a Nervous Breakdown
      Nice stuff, especcially the math remarks.

      I myself have a degree in math (the queen of science they say but in practice it is the oil of science) and I was capable a long time ago to declare armageddon on the US financial sector.

      So it is great news to observe that the Harvard Business School is trying to put elementary math on the curicculum...;)
      View article »
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