farmer448

Was the AIG Bailout a Goldman Bailout by Proxy?

While I agree with the thesis that this was a bailout of Goldman, it would also be fair to say it was a bailout for several European Banks also.

I don't know how much the international issues played in the discussions of the bailout. The bailout of AIG did effect London and the EC.

T. Boone Pickens: Move 18-Wheeler Fleet to Natural Gas

What would even be better is to move more interstate truck traffic to rails.
So when looking at infastructure changes (over 10-20 years) more emphasis needs to be put on rail traffic.

Punishing Bankers' Behavior Could Backfire - Barron's

Excuse me Millman, what planet are you living on?
Please send all of these poor bankers to London, Singapore, Japan. Those markets have also been hosed by the Wall Street Turks. These guys were at the wheel and on the accelerator until they burned out the Worlds Commerce Engine. So please let someone else hire them.

As for Wall Street and the Capital Markets in General could you please help me with the following:

Why didn't Greenspan invoke Reg Q in 1996 when he admitted to the stock market overheating that led to the crash of 2001?
Mr. Invisible Hand tell me why the Fed had to intervene in Long Term Capital's bet on Russia?
Mr. Invisible Hand tell me why the bankruptcy of Lehman brought down the worlds capital markets?
Mr. Invisible Hand please explain to me all of the questionable assets that private banks have transfered to the Federal Reserve?
Mr Invisible Hand, why has the US government been forced to invest 180 billion dollars in AIG?
Mr. Invisible Hand, why did the US government put together TARP to put money in commercial banks?
Mr Invisible Hand, why did the US governement have to 'lend' GM and Chrysler millions of dollars before the end of 2008?
Mr Invisible Hand, why did the CDS market reach how many trillions of dollars?
Mr Invisible Hand, do you still think it is a wonderful idea to turn over the Social Security Safety net to Wall Street.
Mr. Invisible Hand, why is the Federal Government being forced to cover unemployment insurance extensions for many states?
Mr SEC maybe you can explain why so many Ponzi Schemes have come to light?

Mr. Millman please come back to Earth and use your knowledge in trying to define the role of the capital markets in the US economy. We need to rebuild the Commerce Engine the Turks blew up. Your knowledge of the different types and flavors of transactions between counterparties is invaluable.

What kind of regulators/circuit breakers are needed to keep the engine of commerce from burning out again while providing for the credit necessary for growth of the economy.

Outlandish CEO Pay: How to Fix the Problem

First and foremost the companies directors and Chairman of the board should be held accountable for their fiduciary duty. If the SEC comes after a company, the board and c-level executives should be responsible for all fines. They were responsible and should be held accountable (Bank of America).
Right now directors are not held accountable for their actions.

Has 'The Trampoline Effect' Come to an End?

The last time this crazyness went on Volker pulled the plug.

Nobel Laureate Penzias: U.S. Needs a $1 a Gallon Gas Tax

So like crack addicts we will keep filling our SUV's with cheap Oil. A true energy policy really only works when you use the price mechanism. We need to raise the price of transportation fuels to encourage more efficient autos.

The one dollar tax proposed above could be done by adding 1 cent to the gas tax every month for the next 8 years.

The real trick is to keep this additional money for use in infrastucture projects and not earmarks.

Nationalizing Bank Losses

So lets see if i have this right.

If we let the banks go bankrupt and let the legal system sort out the mess then the common and preferred stock holders will get wiped out, the debt holders will be converted to equity holders (including what ever CDO's). Of course this will take time and their will be chaos and rioting in the streets because the big national banks will be in the toilet while local/regional banks will survive.

if we nationalize the banks, the management, the common and preferred sotckholders get wiped out, Bank debt holder will probably be made whole through some equity and some new debt and US citizens will be on the hook for a 30-40% haircut. (I am assuming things will be as bad as the savings and loan crisis where I have read the US took 300 billion of bad debt and recovered 200 billion.
The far right will scream we are now a socialist nation with the government replacing management. (Of course we now know all to well how the current Boards of DIrectors and Management have done in maintaining a healthy finance system)

If we continue with TARP, the management stays, the stockholders (common and preferred) get a free lunch, the debt holders are assured that they will continue to be whole, the US citizen will take 100% of the haircut and the dirty commie liberals will call it all coporate welfare.

The only problem is the government is already screwed. In the past 8 years we have more that doubled thenational debt, appointed political hacks into jobs requiring macro-economic competence and sensitivity, have a legal system that no longer respects the rule of law and I can go on and on.

So where is the reboot button?

GMAC will likely receive another $3.5B injection, adding to the $12.5B the feds have already used to stabilize the ailing auto lender. Sources say the additional money will help GMAC absorb losses related to its mortgage operations and return to profitability by Q1 2010. The Treasury previously predicted GMAC could require another $5.6B; the lower figure is in part because impact from the bankruptcies of GM and Chrysler has been less severe than originally projected.

The saying, "As goes GM goes the country" was never more appropriate.

How Big Is Too Big for Banks?

So anti trust thinking should be applied to banks. Great idea but sure to be destroyed in the details.

Citigroup: A Simple Analysis of a Terribly Complex Company

I wou8ldn't touch Citicorp with a ten foot pole. It has some of the worst customer service in a business where the customer makes or breaks.

I learned a long time ago you do better in well managed companies. In this banking environment it is very important to look at the management and how customers are treated. Big should not be looked at as better.

Your analysis is exactly what I would expect from a by the numbers fellow. However, their are banks that are better managed, with better numbers that will probably produce superior returns once the over-leveraged assets are worked out. Citicorp is a zombie hoping for a second life

Why I Need a Government Bailout

Dear Newman Bank

Your request for 2-3 million was adjusted to 300 million.

Happy New Year
Henry

GM Must Die

So to all those who say unemployment is the reason to bailout the auto industry I ask you this:

If consumers are not buying cars (see latest sales declines) how is a bailout going to increase sales?

Without increased sales the unemployment rate in the auto industry are the everyday white collar/bluse collar workers going get laid off anyway?

So how will the bailout help the auto-industry to restructure? This is not like the Chrysler bailout. It involves the whole US auto industry not just one Company.

So the US Auto Industry is going to shrink like it or not. So how can government best help in realigning the workforce that is no longer needed?

In my graduate Economics course the first and most impotant lesson we were taught is TINSTAAFL. "Three Is No Such Thing As A Free Lunch".
Much of the argument I have heard is pure hype and not backed up by data. The US auto industry has been in decline and while the medicine is harsh maybe it is time to restructure.

While Goldman CEO Lloyd Blankfein understands that "people are pissed off" with bankers, he says everybody should be happy: "Companies are looking to grow again and raise money. That's where we come in. The financial system may have led us into the crisis but it will lead us out."

As the song goes, "Don't Worry, Be Happy"

The Economy Now: A 5-Point Summary

I find it funny when you say high unemployement means no inflation. Where were these people during the late 70's with WIN, Stagflation, and 15 % prime rates????

Legacy Loan Program Called Off

Can you say Japan Bank Stategy. Keep those bad loans on the books and we can have a decade of no growth. For the paranoid is this a big business/republican stategy to return to power?