InnocentsAbroad

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

Yep. For most people, theft is illegal. For GS and Barclay's it is considered not only legal but (according to The Fed and Treasury) needed and necessary.

Five Impossible Thoughts After Breakfast

Thanks for the nice article. The real difficulty is that the banking and central banking issues are hard for the public to understand. The best public service anyone (any politician ) can provide is to gently and clearly explain the nature of the banking crisis.

As most Americans have at one time or another known or faced bankruptcy themselves, they will easily understand the concept of putting the banks in receivership.

As for the notion that the counter parties or not identified by the Fed and the Treasury, those are public facts that any Senator or Congressman could make available. It is the pervasive corruption of our legislatures that keeps this from happening.

The New TALF: How's This for Irony?

Greatly appreciate the analogy between Saddam Hussein's secret police and the U.S.'s plutocratic elite. Truer words were never spoken.


On Mar 03 03:59 PM aarc wrote:

> Just like Iraq, military experts suggested hiring former Sadam Hussiens'
> police force after the war ended in order to enforce martial law
> since they knew how to do the job.
>
> Instead, the Karzac govt (forgive the spelling) and the American
> Military decided to recruit "greenhorns" into the police force.
> The result was total anarchy since the newcomers never had the knowledge
> nor the experience on how to prevent insurrection and tribal wars
> among the different religious factions of Iraq. The US military,
> likewise, fumbled and stumbled for several years until they were
> able to gain enough knowledge and experience on how to fight insurection.
> Valuable acquired assets that may or may not be needed by American
> military in the future but at a cost of tens or hundreds of thousands
> of Iraqis' civilian and military deaths and "stagering" couple more
> thousands of casualties on the American side.
>
> What do we do? Hire new recruits to do the ratings or utilize existing
> firms but provide an oversite function? Risk burning the barn to
> the ground with new recruits or risk existing rating agencies doing
> exactly the same mistakes they did in the past?

Gordon Brown: Not My Fault

I, for one, would feel better if Tammy Faye and Pat Robertson were put in charge of the Fed. Mark of the Bouffant, anyone ?

AIG, Systemic Risk and Greenberg's Inner Circle

This is just plain silly. AIG didn't do anything that the regulators, the Congress, and both parties weren't fully aware. of.

Boston Fed Head: Ditch the Bad Assets So Banks Can Focus on Future Prospects

The sad fact is that neither the American public nor the Congress understand how the Fed works.

The American public is kind of like the dope at the shell game. He cannot win because he refuses to walk away.

Take the Fed, turn it upside down, shake out the roaches, hose it off, and put it out in the sun to dry.

Why Nationalizing Banks Is Wrong

I date it from 1981 (when the shining knight RR arrived to save us from ouselves) -- that makes it closer to 28 years in the making.


On Mar 03 02:28 PM fabien hug wrote:

> This was crisis took about 20 years to build-up and we are maybe
> about 1/3 to 1/2 in the process of cleaning the mess. Now, if you
> declare that the situation is going to be cleaned up within 3 months,
> mayhem is guaranteed, since most of the banks could be facing Chapter
> 11. I'd like to know, for instance, how would HSBC fare if the assets
> it has deposited with; BoA, C, JPM would be potentially worth 0 in
> 3 months. No place to hide. Only time will solve this crisis.

Why Nationalizing Banks Is Wrong

The hazard of being a PhD candidate is that you tend to make things too hard.

OK. Net the money put into any given institution (including deposit and debt guarantees) from current market capitalization. Anyone in the negative is already bust.

(Hint: Apple Computer and Google are not bust. Citibank and BAC are).

Financial Crisis Watch: Where's Timothy?

I'm beginning to think more and more Obama in the financial world looks like LBJ in Vietnam. He inherited a disaster, but he can't pull himself away from the purveyors of what looks to him like a Camelot, the bright shining heroes of the New York markets.

More important, it is a sign of fundamental weakness on his part, that he is shielding the forces that were most opposed to his candidacy. He is unable to use his political leverage to dismantle the busted corporations.

Still, all things come to an end. He knows he has to p__ or get off the pot.

I predict within 24 months.

Hoping Shorts Will Drive Sears Down for Me

Gosh. I keep seeing this stuff about Sears. Only know what I can see. I drive by the local Sears every night on my way home. The parking lot is not overfull, but it is not empty.

I am suspicious that it is enough of an American traditional retail venue that, barring unforeseen circumstances, it will remain in operation as it is for a number of years.

Probably all depends on the retail management and quality thereof. That I can't answer to, but if one plans to invest in it, getting a good idea of the competence of the management seems a good first step.

TARP Equals Toxic Money

Let's see. Free money makes a corporation less healthy ? You are probably right. The companies getting the Fed and Treasury money are bad bets.

A free lunch is never very healthy for a business in the long run. Companies that get subsidies usually end up on the ropes. They become focused on getting more free lunches, rather than producing products anyone would want.

Kind of like the auto industry and the New York banks.

Trying to remember how the poor single mothers were supposed to get off welfare ?

I can easily imagine a large high school cafeteria full of the creditors of GM and BAC, sitting down, and getting day long seminars on how to get productive work, now that their investment free lunches are no longer panning out. My question is, will they have to bring their own lunches to the seminars ?

A Game of Confidence

Please. Obama is just another scam artist, although in many ways brighter and more trustworthy (if that can be said about a scammer) than GWB.

Kind of a little like Clinton. Don't forget, under Clinton the economy boomed. This is a real good time to go back to careful equity investing.

But confidence -- that is a relatively cheap commodity. You can get Americans confident quite easily -- just media and public relations. But eventually the public begins to become a little wary. Kind of like the mind set transformation that occurred during the Depression.

But really, the US economy keeps on going, regardless of sentiment. We are a rich rich nation -- not because of our qualities as Americans but because this is an amazing and beautiful land. Not like we take very good care of it. American the Beautiful is right. Maybe we should put a little more economic muscle into protecting that beauty. That would make me confident.

Citigroup's Decline - Not a Good Sign for the Market

What on earth ? Bar sinisters ? That's heraldry right ? What does that have to do with the US financial system ?

Although it is a cool term, and maybe you are just taking an advantage of opportunity to use it, albeit obscurely.


On Mar 01 01:20 PM Patriot Ted wrote:

> You got that right Timster. "They" are flipping insane. The greedy
> bar-sinisters should be hanged.

Buffett's Financial Bets

Ok. Is it possible that on those companies, as with so many other investors, he had poor accounting data ?

I am just amazed at the current poor quality of accounting data for publicly held companies. The accounting academics are decades behind where the basic economy is.

My argument would be Warren Buffett just didn't have the time and energy to do full dilligence, as with so many other investors.

Would Tougher Regulation Have Prevented This Crisis?

Sounds like you are channeling the ghosts of Presidents Hoover, Coolidge, and Harding.

The viewpoint that the markets are best left to themselves is a fine one, but it still leaves the US government with some role in the banking system -- unless you are proposing multiple forms of currency.

The US did try that once. Don't remember the exact outcome. Don't think it was pretty, although in general principle having some caution about the currency you use is a good idea.