monday1929

Geithner's Financial Reform Is Doomed to Fail

Is that the Paul MCCulley who works with Billy Gross who got illegal inside information from Hanky Paulson that it was safe to plunge hundreds of Billions into Fannie and Freddie. That's hundreds of billions of pensioners money either risked in a criminally negligent manner or not risked at all do to inside information.
Is that wise Mr. Geithner the same Timmy who was criminally negligent in maintaining the soundness of the NY money Center Banks and got a nice promotion for failing so well? The one who can't figure out Turbo Tax?
If you call the rescue of the Banks "Capitalism", you must be Mr. Geithner himself. Hello, Timmy.


On Mar 27 01:40 PM Kinabalu wrote:

> <<One problem with banking is that it does not meet the test of capitalism.
> Either your money is at risk or it is not at risk. Banks are stuck
> halfway in between. We are trying to pretend banks are capitalist
> institutions.>>
>
>
> This article is so ridiculous its hard to know where to start my
> criticism. The concept that a bank is not a capitalist institution
> is absurd. The author ignores the shadow banking phenomenon of the
> last 2 decades. The concept that Geithner doesn't know how to solve
> "Too Big to Fail" is simplistic in the extreme. The fact that the
> authors sycophants are lined up to praise this dreck is a definitive
> exhibition of why it is possible for someone like Madoff to "manage"
> billions of dollars. Are there no longer any critical readers on
> this site?
>
> The author, and many of the above commenters, need a basic understanding
> of the natural evolution of an economic cycle. I would suggest they
> start with Hyman Minsky's Financial Instability Hypothesis recapped
> by Paul McCulley here:
>
> rolfe.winkler.googlepa...
>
>

Geithner's Financial Reform Is Doomed to Fail

Beware: many banks state they did not make "sub-prime" loans. That does NOT mean they did not make Alt A "liar loans", various other bad loans and bad Commercial loans which are soon to implode. Ask specific questions, and get the answers in writing from an Officer of the bank. If they refuse to do so, you should wonder why. Check your banks safety rating- not foolproof, but better than nothing.


On Mar 27 08:59 AM Jan Baker wrote:

> Why aren't all banks cooperative, like my own? (Riverset Credit Union
> in Pittsburgh, formerly the Pittsburgh Teachers Credit Union--it
> is small compared to the one in Hillsborough County, Florida.) Does
> anyone know how a cooperative bank is structured, compared to the
> plan here? I know they didn't invest in any of the bad mortgage investments--so
> they told me when I moved my retirement money out of the market and
> into their cd's.
>
> Steven's scheme here is such a powerful analysis of the problem.
> He keeps trying to get down to the structure of the problem.

Solve This Credit Market Riddle

Let's pass new regulations that stay in place until the next bubble.

Roubini: Government-Backed Bank May Crack

The systemic wrecking crew was led by the Terroristic Banks and paid off regulators whose leaders need to be tried for treason. Those pointing out the facts are not the enemy, especially since we tried in vain to warn you.

Is Iceland the Canary in the U.S. Coal Mine?

The Banks which have begged for Billions, JPM, Citi etc. are all BANKRUPT. Let us stop saying they may be , might be. They will not reveal their Trillions in near-worthless off-book holdings because then EVERYONE
would know they are bankrupt.
We must try those Bankers responsible for destroying the Economy for Treason. If found guilty they must return 10 years of fraudulently obtained bonuses and they must be hanged by the neck until dead.
And close down the utterly corrupted SEC.

Is Iceland the Canary in the U.S. Coal Mine?

You are being paranoid etc. And you are right. As was I.
NO ONE ever listens.


On Jan 29 01:40 PM WAKEUP wrote:

> Interesting. When I first posted a couple of comments, a year or
> so ago, wondering if this might be a much bigger financial meltdown
> than in previous times, there were multiple comments in response,
> saying that I was being paranoid, etc. Now, well, it seems that this
> is a situation of almost limitless proportions. So, here we go, again.
> NOW I wonder if we haven't already crossed a line that we will never
> be able to re-cross; that is, I suspect that we have shot ourselves
> in both feet, and lost so much financial ground that in our lifetimes
> (maybe forever) the U.S. will not recover completely, and will, in
> fact, live at a reduced standard, from now on. OK, I've got my helmet
> on, bring on the response.

Misunderstanding the Great Recession

Those Harvard MBA's are making me a wealthy short seller. I would prefer they be fired so the economy can recover and I can trade the long side.


On Jan 26 06:39 PM Stark Naked wrote:

> My company is a prime example of one being run by bean counters.
> Of the top 10 executives not one has a background other than finance.
> over the past five years profits are generated by cutting cost rather
> than incresing reveues. I am sure that at least 50% of the S&amp;P
> 500 companies have a similar management makeup. All those Harvard
> MBAs (like Mr. Bush) will run you into the ground filling their own
> coffers!

Misunderstanding the Great Recession

How about a "torture Tax"?. Does anyone believe that YOU really believe that this is all the fault of short sellers and the media????


On Jan 26 07:22 AM apppro wrote:

> The 4 Golden Rules
>
> 1. Reinstate the Up-tick rule
>
> 2. Crack down on naked short selling
>
> 3. Institute some rules on what should be said on National TV to
> prevent rumor-mongering
>
> 4. Pass a Wind-Fall Capital Gains Tax of 65% on ALL short sales retroactive
> to 01/01/08.

Week in Review: Market Uptrend Broken, Will We Return to November Lows?

You might find Robert Prechter's theory of "socionomics" and wave theory of interest. He called for this DEfationary Depression years ago.


On Jan 18 06:00 PM max12345 wrote:

> I have come to view "the crisis" that we are currently into (at whatever
> stage of unfolding or development that it's actually now in) as having
> three interactive parts or aspects:
>
> First, the crisis of the financial system and the financial institutions;
> (and the bad debt, the toxic assets, the lack of credit and inter-bank
> or retail lending, and etc. etc..) Secondly the very significant
> drop in markets and stock market share prices, the fairly strange
> long term and short term bond yields due to rates having been dropped
> to nearly zero...and etc etc. and thirdly the crisis of the so called
> real economy, recession, unemployment, drop in demand and etc. which
> is only now emerging in fuller force. (and will probably get a lot
> worse before it gets better) (or will it?)
>
> The three are of course mutually interactive and have all sorts of
> relationships to one another and also a kind of sequencing (also
> affecting sectors and industries differentially) For instance it
> is almost a standard understanding (or belief) that markets recover
> 6-9 months before there is an economic recovery. (and this is probably
> empirically confirmed, though I never bothered checking the economic
> history)
>
> Is what we are now in the midst of a normal recession (most probably
> not) a bad and prolonged (abnormal) recession or is it a depression,
> or is it a totally unique event? Or a bit of each? And according
> to whom?
>
> I watch CNBC and Bloomberg and the BBC mainly, and then also get
> quite a bit of information on the internet. I also read Motley Fools,
> Zacks, Dividend Investor, Seeking "Alpha" and a few other investment
> information services, and I also have tried to do some additional
> academic reading of my own into the possible causes and the trajectory
> (and end) of the Great Depression (on which there are multiple interpretations
> but also a sort of consensus opinion, probably fairly close to Mr.
> Bernanke's)
>
> And I have (somewhat arbitrarily) divided the people that come onto
> these assorted TV channels (talking heads is a bit derogatory and
> maybe not that well - deserved, but one could call them that too)
> into three (broad) categories:
>
> The guys and gals that tend to talk non-stop, interrupt one another
> constantly and have a sort of New York and Wall Street "flavor" about
> them. I call these the first line analysts, operators, media-types,
> or maybe just "practitioners". Then there is a second line of more
> senior analysts who tend to come onto the shows of the first.......and
> these are the senior economists of the major banks and financial
> institutions (such as Credit Suisse and many others) and the better
> known fund managers and all sorts of other senior people and figures
> in the general business.
>
> And thirdly there are the senior professors and the academics from
> the better universities. These tend have specialties in business,
> economics or economic history whether short, mid, or long term. (a
> fourth group is also the actual senior policy makers and main players
> in government)
>
> The three (or four) groups (which are only very rough divisions and
> also have substantial overlap) seem to tend to focus on different
> variables for both their diagnoses and their recommendations and
> (maybe as a result of such a differential analytic focus) they also
> tend to come to quite different diagnoses and sometimes also to different
> proposed policy remedies. (and also to somewhat different recommendations
> and investment advice for investors)
>
> For instance, the first and second group sometimes point to the transition
> of (very) large amounts of money from stocks, to cash, to bonds or
> to the fact that there is now a huge cash pool sitting on the sidelines
> waiting for "the right moment" to jump back in. (and of course some
> say that since a "right moment" can never be guessed or determined
> one should stay in the markets all of the time) (or only "most of
> the time"? ) (that is, is it very wise to stay in when it's fairly
> clear the Tsunami is coming one's way, since hardly anyone thinks
> it's very wise to sell short in a raging bull market)
>
> And the third group instead has studied economics and financial systems
> in more depth often also comparatively, and has observed various
> periods of economic history to come up with their own analyses or
> diagnoses.
>
> Roughly speaking (very roughly) it seems to me that the third group
> is by far the most pessimistic. Some talk of "the well on the farm
> having been poisoned" and that it's going to take a very long time
> indeed to get out of whatever it is we are into. The first line operators
> instead generally tend to think more optimistically (and I think
> also a bit more mechanistically) that by late 2009, or 2010...or
> maybe as far as 2011 (but not further) the U.S. economy and U.S.
> markets...(which is what they tend to focus on primarily, though
> some also have a much broader international perspective) will recover.
> The second group instead tends to split towards the conclusions of
> either the first or the third group. (as I said this is all only
> a VERY rough breakdown).
>
> So who is right? And what should investors do? (policy makers are
> going to do whatever they think is right and although what they do
> on either the monetary policy side or the fiscal stimulus side is
> quite important, they are going to do it anyway regardless of what
> most average investors think, so to most of us what they do or don't
> do is only part of the general background that we need consider and
> will need to be take into account) (for instance will a massive fiscal
> stimulus result in some equally massive inflation down the road or
> can the money that is injected now (or soon) realistically be taken
> out later to avoid that?) (if one thinks there will be a long bout
> of inflation starting three years down the road one obviously will
> do something else than if one thinks there won't be)
>
> People and analysts in various disciplines invariably tend to see
> and understand the world (and its assorted phenomena) (of which the
> current crisis is only one) pretty much in terms of the micro- social
> and intellectual world which they themselves tend to inhabit and
> navigate. But if one would like to try to develop a more multi-faceted,
> multi-disciplinary and therefore more comprehensive and robust analysis,
> or a so called "over-arching view" which might have a slightly higher
> probability of having a greater likely "validity" that will allow
> better predictions, how does one go about trying to integrate or
> synthesize the various things one hears? (I certainly haven't figured
> it out but I am working on it)
>
> I am now in my early sixties and I haven't really followed markets
> very closely since my late 20's when I was very interested in investing,
> did so, and didn't too badly for a few years. But since then whatever
> money I have made or had, I have placed with Fund managers because:
> a) I considered they knew much more than me and it was their job
> or profession to be knowledgeable and up to date b) I was interested
> in other things and a bit less in business and in investment. <br/>
>
> But when I saw that the fund managers with whom I had invested my
> money were basically messing up....(and messing up royally) I thought
> I had better take charge of my own portfolio. I sold off all the
> stuff my broker had me into, studied for a couple of weeks, and then
> decided to jump back in but with my own selection of stocks in which
> I now have much more faith. (I quickly came to the conclusion that
> staying in cash was most probably not a good idea) And of course
> I invested "for the long term". Not because Warren Buffet does it,
> but because I happen to believe it's probably indeed the best thing
> to do, and certainly for me.
>
> First because I am not very interested in engaging in day to day
> or month by month trading, and secondly because I wouldn't know how
> to approach short term trading intellectually anyway. I have no idea
> (and don't feel like doing the necessary research to try to find
> out or determine) which specific stocks may go up or down in the
> short term.
>
> But I do know -for instance- that oil is now selling for much less
> than it did before and also that we are running out of the stuff,
> so it might be a good idea to buy some oil company (or other oil
> related) stocks and hold them for 5-7 years. One is a lot less likely
> to go wrong doing that than by trying to guess (or do research) into
> what new technology start-up will become the next Microsoft or Google
> and which ones will instead go bust in a couple of years. (I am quite
> happy to leave that to other people).
>
> What I am more interested in is trying to be a bit more sure about
> (and I am not at the moment) is whether -for example - Barclays bank
> -which has been beaten down substantially - is going to make it over
> the next couple of years (though I am almost 100% sure it will) and
> then rise back again to earlier levels...(which I am less sure of)
> or whether something either in the environment or the business model
> has changed so that that won't happen.
>
> I had thought that we were probably past the worse of the financial
> crisis...(the first of my three parts or components to the crisis
> that I had mentioned at the outset) but now I am no longer very sure.
> I bought quite a few financial sector stocks... diversifying by country
> and by region. Will I have to wait only two or three years or a maximum
> of five to seven (as I had thought earlier) for them to bounce back
> to nearly earlier levels.......or are the "poisoned well" academics
> more likely to be right so that I may well have to wait ten or twenty
> years?
>
> As I said I am about sixty years old and in twenty years I may well
> have croaked. So it would be nice to know. Is there anyone out there
> who can shed some light on what I have said? Am I mainly right or
> am I mainly wrong and if so why, and what's right instead?
>
> Many thanks to anyone who will (and can) respond.
>
>
>
>

The Bailouts Are Doomed - All of Them

We must try these traitors for treason and hang them. The Boomers may have to become the truly "Greatest Generation" and take action against a Government that is clearly Criminal and the Terrorist CEO's who looted Trillions from the Economy.. But that is asking a lot from a population that keeps voting these criminals into office.
Fantastic article. I will print and distribute it.

GMAC Bailout Flaws: No Appreciation of History

I think we are far more sophisticated now than we were 3 days ago. Although the same crooks are running things, I believe the lessons of the past 2 hours have made them see the light and they will all work for the betterment of their fellow citizens.
The lessons of the past 10 seconds have chastened us. In the last nano-second, surely even the SEC and Madoff have come to their senses. All should be forgiven, the Rich have felt badly for hours now.

Great Depression Not Imminent, But Inevitable

The largest credit bubble in all history has burst, it will lead to the biggest bust. Nothing is certain, but is it any worse than Paulson saying, one year ago, "This is the strongest world economy I've seen in my lifetime" ?
Deluded optimism Works in America, Realism makes you a freak, and a target of the SEC (ie. shorts attacked for pointing out what turned out to be the truth)


On Dec 17 08:46 AM The Simple Accountant wrote:

> Inevitability of a great depression is a non sequitur, given the
> analysis in the article. The evidence is troubling, indeed, but inevitability
> is a extraordinary claim which should not be made lightly.

Great Depression Not Imminent, But Inevitable

But everything looked just perfect to almost everybody 10 months ago. The Depression is just everyone opening their eyes to a Ponzi scheme of epic proportions. No "catalyst" is needed, just a change of mood by the public. See "socionomics" (not socio-economics_)


On Dec 17 08:32 PM CautiousInvestor wrote:

> The above is an interesting article, offering fresh insight into
> the role that CDS have had in spurring lending and growth and the
> implications of repriced credit insurance. To suggest, though, that
> the present price and/or availability of CDS is the singular reason
> for a prospective depression is grossly over simplifying the horrendously
> complex economic problems the world is facing. And while many developments
> have led us to where we are today, the significance of the housing
> bubble.....in all of its dimensions... and its ongoing aftermath
> must be included in any discussion of today's financial Armageddon.

Great Depression Not Imminent, But Inevitable

I agree with most of your comments. But when "debt is lowered across the board", as it will be, willingly (consumers/companies pulling back) or unwillingly (by default/bankruptcy)tha... IS Deflation and just what will cause a Great Depression.
And WHY are these people not in Jail??


On Dec 18 07:56 AM smurphny wrote:

> The idea that failure of institutions who took unclear and extraordinary
> risks will cause a depression is questionable. The "bubble" has obviously
> been the level of risk, the assessments of which became pure fiction.
> Sound financial basics were ignored and no one from government (SEC)
> was even trying to watch. We are all waiting to hear just WHO was
> involved in the neglect of duty in this organization which is funded
> by tax dollars to do, well...nothing. If government should be involved
> at all right now, it should be to regulate the orderly dissolution
> of both sides of this CDS folly. Debt needs to be permanently lowered
> across the board, in all sectors of the financial world, from credit
> cards, corporate paper, to interbank loans. Debt needs to be strictly
> regulated by very clear rules and issued only with minimal risk,
> collateralized with sound assets. We need to go back to this old,
> sound mentality of debt and remove highly speculative bets from the
> debt world. Our government should be arranging the transitions/bankruptci...
> of the AIGs, FNMs, and future insolvent financial companies, complete
> with the firing of ALL persons involved in the policy-making decisions,
> not their refunding with my tax dollars. Entities like Moody's, Fitch,
> and S&amp;P should be closed down immediately for malfeasance (since
> no credit is being issued at present anyway), cleaned of all people
> who willingly went along with or actively promoted fraud, and executive
> offices filled with some of the people who quit these companies because
> they saw the fraud going on. WHY ARE THE EXECS. OF THESE COMPANIES
> STILL WALKING THE STREETS??? Confidence is the issue right now and
> no confidence will be restored until the rot is thoroughly removed
> from the wood, perp walks highlighted during prime time, and a clear
> new direction adopted. This is NOT happening at present and if it
> does not happen, as more shoes start to drop, the BEST outcome may
> be a depression.

Great Depression Not Imminent, But Inevitable

Yes, it will all be contained. Subprime is only 1/10 of 1/100 of 1/1000 of the houing market and the Fed can lower rates to 1% and the Treasury can re-assure the market and immigrants will buy houses and derivatives will spread the risk around so no one company can ever be damaged and if worst comes to worst we can work for GM making $60.00 per hour until our e-bay business takes off. And the SEC will come down hard on those horrible short sellers who question our collective delusions.


On Dec 17 07:49 AM Maya_ wrote:

> Silly article. One has to acknowledge that derivatives have serious
> destructive potential. But policy response is likely to contain the
> damage. As far as whether "no insurance" will cause a great depression;
> I wonder why the great depression ever got over; after all derivatives
> in its present day form are a very recent phenomenon.