User 143167

Bond Expert: Wednesday Wrap

Why the banks are willing to put that huge amount of money on the fed's balance sheet and yield almost zero is beyond me. At least, they can buy higher yielding treasury instead, can't they?

Geithner's Master Stroke: The Official End of the Credit Crunch

I think it is either you or Bill Gross is crazy. He can buy those toxic assets on the market with 5 cents off if he wants. Why did he wait until now? The government's money is above his tranch. He will get NOTHING if those assets didn't worth 60 cents on the dollar. Leverage doesn't make any difference (well, may make you broke faster) if you are in the bottom equity tranch.

So what you said is that Bill Gross know that toxic assets are a good investment, but won't buy it just because he wait for time to be leveraged up by 3x?

FASB Unlikely to Suspend Mark to Market

The bank should not return to the lending as they did in the past. That is the CAUSE of the problem, not the solution. If you want to buy something, earn most of the money rather than borrow that money.
Debts are like opium, you feel better when you have more access to it, but it will finally destroy you as a whole.

On Mar 14 12:23 PM henarl wrote:

> The forced valuations resulting from M2M are no more "transparent"
> than values resulting from mark to cost. Neither reflects real value.
> If M2M is retained, then the loan to capitalization rules need to
> be changed.
> Otherwise, we will not see the banks return to lending.
> Whereas it would be nice to be able to go back to the days before
> fractional reserve banking and securitization, our present economy
> could not stand it.

FASB Unlikely to Suspend Mark to Market

Accounting is all about being conservative. These banks are NEVER conservative, the people in this country are mostly NEVER conservative. They are over-leveraged, they are looking for fast money, they want high life without hard working, etc. Those lead us to this pain. So I now heard people called out the government to ban the rule that require people to be conservative. So typical!
For those people, I would say: Look at yourself, the problem is NOT in the accounting rules, but in your brain.

Mark-to-Market Marches Towards Extinction

It is not about M2M, it is all about the leverage. These big banks should not be allowed to have such high leverage from day 1. However, that is the economy works. Borrow and spend beyond your means. It is this whole economic model that is FAULT.
This economic model pretty much turned the US economy in a Hedge fund, now with the asset bubble poping, we ended up with a margin call. Then we complained that this was mainly due to the market inefficiency and the rule of margin call should be abolished so that we can have time hoping that the assets we hold back up above the watermark. Then we have enjoyed our lives as usual without trimming the leverage we use. Smart indeed, but too good to be true!

Treasury's Explicit Banking Subsidies

Every this kind of measures is based on the premise that the money velocity can move back to the level in the old days before this crisis. If it is not, no matter how the government slice and dice it, the credit implosion is inevitable. Maybe they just prefer to a slow death rather than a quick one.

Are U.S. Banks Really Worthless?

The point is: you have to have another round of inflation to boost those asset prices above the value of the debt. While debt deflations kicking in now, it is downward spiral. To inflate or to die. The Fed and the Treasury Dept. are not even getting this, making TAFs or issuing trillions of t-bonds won't work. They have to double or triple the money in circulation to achieve it.

Geithner's Superfund Is the Real Deal

Throw the Fed in as the supporting tranch will not solve the problem, the Fed doesn't have the capital. If the Fed is allowed to print money to compensate for any real losses it incurs in the superfund in the future, then this plan might be workable. However, at this point of time, Geithner can say that very clearly. He tries to let the congress believe that this plan won't cause any taxpayers money and at the same time, try to let the potential private investors believe that the Fed is the government trust backed by taxpayers money.

Do Paulson and Bernanke Really Understand What's Going On?

It all depends on How much dumb money this credit market can offer following the hoax of the government. Paulson will cross his fingers to hope there will be enough.

Options Trader: Wednesday Outlook

Quoted from Census Bureau:

Unfilled Orders

Unfilled orders for manufactured durable goods in April, up twenty-six of the last twenty-seven months, increased $7.6 billion or 1.0 percent to $804.5 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 1.3 percent March increase.

Inventories

Inventories of manufactured durable goods in April, up nine of the last ten months, increased $1.7 billion or 0.5 percent to $328.6 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 1.0 percent March increase.

Options Trader: Wednesday Outlook

Look at the durable goods orders# carefully, the unfilled orders and inventory both hit the highest since 1992. Don't follow those stupid talking heads on the media to interpret everything into buy, buy, buy..

Friday's Rally: Just a Short-Squeeze?

"March retail sales were UP.

March industrial production was UP.

The March leading indicator index was UP. "

It seems that the FED's plan to inflate this country out of crisis works!

Everyone will be better off with a 8.2% nominal GDP growth with a CPI of 8%! NO RECESSION INDEED!