billddrummer

Ten Most Ignominious Reassurances from the Great Recession

Thanks for the history lesson.

I'm frankly disgusted that the American people are more concerned about who won "Dancing with the Stars" or "America's Got Talent" or survives "Survivor" than what has happened in the financial system over the past 18 months.

We deserve the worst, because we haven't taken to the streets with firebrands and pitchforks demanding change in Washington, NY, LA, Chicago, Dallas or anywhere else.

Instead, all we want is to be comfortable in our own isolated cocoons.

America is on the same path as the Roman Empire. Circuses and television have the same effect on the populace--to make them forget what's really happening in the halls of power.

Six Signs Economy Is Turning the Corner

The economy may have turned a corner, but the corner has a huge radius.

So it will take a long time to get around it.

I expect unemployment to rise to about 15% before it starts to come down, consumer spending will remain sluggish for another year, and a few thousand additional businesses will close.

The Top 12 Brands Likely to Disappear

To dividendmachine:

Cetin's negative rating is 5 times higher (lower?) than yours.

I'm impressed that your dividend income is sufficient to support your family.

Clearly, you've done the right things with your portfolio. Now, why not let us in on your 'secret.'

Or will we need to subscribe to your investment magazine?

Bankruptcy Lets Capitalism Run Its Course

The $65/hour number that all you auto workers are bashing was taken from the GM 2007 10-K!

That's what GM said it cost to pay its production workers including legacy costs, health insurance, etc., etc., etc.

I didn't say you got it in your paycheck. But the company paid it out on your behalf anyway.

Why I Need a Government Bailout

Mr. Newman,

May I borrow the verbiage for my own bailout letter?

Great satire, by the way!

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

Excellent article, and points to a massive bubble that will dwarf the mortgage loan debacle.

Thanks.

Billion $ Question: What Will Mortgage Backed Securities Be Worth? [Housing Tracker]

Hi Judy,

Thanks for asking. Without having studied the plan in detail, and knowing that Paulson's 3-page memo morphed into a 420 page bill, it's hard to say what to think. But here's what I think about the little that I know:

Raising the FDIC insurance limit is a good idea that's at least 10 years late. $100,000 just doesn't go as far as it used to.

Selecting the entities that can offload their bad assets will be interesting, if only to see whether their capitalizations will rise at the expense of the excluded ones.

If the government can make a market in the 'bad assets' that will capitalize the remaining banks so that liquidity is restored to the secondary markets and foster additional lending to middle and small market companies, that will be a good thing.

In addition, I believe that if the program is handled properly, the good assets buried within these pools will be available for securitization again once the dust settles. But doing in-depth analysis of the underlying assets will have to take place--otherwise, nothing will change from the process that got us here in the first place.

If, on the other hand, the new funds simply move impaired assets from banks to the Treasury, then it won't do much good.

But I'm speaking from a position of not really knowing what the package contains, apart from its length.

Your thoughts?

Billion $ Question: What Will Mortgage Backed Securities Be Worth? [Housing Tracker]

Hi Judy,

Great data. Thanks for keeping up on everything!!!

Although I think your headline may be missing some zeroes. This might be a trillion dollar question. I've seen numbers as high as $5 trillion in counterparty risk related to mortgage backed securities, derivatives, and default swap exposure.

But as with all paired trades, the risk is essentially half that number, or $2.5 trillion. And the vast majority of mortgages will ultimately pay out. So the further loss risk is probably in the $1,000,000,000,000 range (boy that's a lot of zeroes!).

Time to keep the powder ready, and dry.

Thanks again for all your hard work!!

AIG Lives Another Day; Shareholders? Not So Much

Don't forget that AIG is paying 11.5% interest on this loan. So the effect on operating results will be material.

Don’t Buy What Wall Street Is Selling

Well said.