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  • The Federal Reserve Is Immoral [View article]
    Dear Sir,
    > Miss Tett has written extensively about the credit
    > crisis
    > but once more fails to elucidate salient points
    > regarding
    > the issue of securitisation.
    > She correctly points out that research from Pimco
    > states
    > that "Until the 1980's
    > the expansion of nominal gross
    > domestic product tracked the volume of outstanding
    > private
    > credit closely. But since then credit has
    > dramatically
    > outstripped economic growth as securitisation took
    > hold".
    > Meaning credit growth beyond nominal growth rate does
    > not
    > lead to economic growth.
    > According to Prof. Aswath Damadaran (NYU Stern), one
    > of
    > the
    > foremost experts of valuation today, the most
    > significant
    > input into a discounted cash flow model is the stable
    > growth
    > rate. This growth rate can be sustained in perpetuity
    > allowing us to estimate the value of all the cash
    > flows.
    > No
    > firm can grow forever at a rate higher that the
    > growth
    > rate
    > of the economy. So, the value all things can't
    > grow faster
    > than the economy (Damaodaran, Investment valuation,
    > Chapter
    > 12, 2002)
    > Therefore, at a certain point the growth of credit
    > must
    > become unstable when it
    > is rises faster that the rate of
    > growth in the economy. This is essentially the nature
    > of
    > our
    > financial crisis. Valuations based on the growth of
    > credit
    > (leverage) were not able to be supported by the
    > nominal
    > growth rate of the economy.
    > There are additional features to our economy that
    > have
    > happened since securitisation has taken off. The
    > stock
    > market has grown faster than the economy, CEO pay has
    > gone
    > from 30X to 300X of the average American worker, real
    > wages
    > have fallen, and wealth disparity has reached heights
    > not
    > seen since the great depression. All of these issues
    > are
    > in
    > fact related.
    > Securitisation has allowed those whose pay is based
    > upon
    > leverage (credit)to increase many times faster than
    > the
    > growth of the real economy and the vast majority of
    > workers.
    > Securitisation has allowed the experts on credit risk
    > and
    > valuation (bankers) to
    > off load these risks onto the
    > public.
    > This has created instability (highly distorted
    > valuations)and a moral hazard where society bears the
    > brunt
    > of costs, while bankers and CEOs reap the benefits.
    > When Ms. Tett reports that respected figures such as
    > William Dudley of the NY Fed consider it paramount
    > that
    > securitisation markets get jump started if we are to
    > recover
    > she fails to mention that Mr. Dudley, as a former
    > managing
    > director of Goldman Sachs, and the majority of people
    > who
    > are calling for this to happen are the very people
    > who
    > have
    > benefited the most from securitisatiion.
    > I hope the American people will wake up and see that
    > efforts to jump start securitisation are nothing more
    > than
    > an attempt by those who caused the crisis to restart
    > the
    > system that allowed them to reap the rewards and off
    > load
    > the risks of that system onto others.
    > With these facts in mind one must wonder what the
    > point of
    > the Feds easy credit (money)policy are. Are they
    > benefiting
    > society? Not very much. Are the benefiting wall street
    > and
    > the banking class? Well, Goldman Sachs profits answer
    > that
    > along with a stock market that does not reflect
    > economic
    > realities.
    > It also answers the inflation issue. Growth in money
    > supply
    > faster than the ability of society to use it (nominal
    > growth
    > rate) has to result in inflation or asset price
    > bubbles.

    Note securisation and cheap money are the same thing both have allowed debt to climb much faster than GDP. with cheap and easy debt no need to pay a nice living wage, just get them enslaved by having them borrow. This is why americans should jsut stop paying the credit card bills and mortgages as a form of protest. What the hell are they going to do. time to revolt!!!
    Aug 14 10:25 PM | 3 Likes Like |Link to Comment
  • The Federal Reserve Is Immoral [View article]
    You have to be th biggest looser ever, or just paid by the banks to say this, or working for the banks. It isn't idealogical hoigwash, but the truth. I have done extensive research on the fed during this crisis, from the get go, and everything this guy is writing is the truth. In fact there is ample evidence that the "depression" that caused the creation of the fed was designed to happen to produce the crisis.
    People like you make me sick to my stomach. It's folks like you who spread false beliefs that are believed by the masses while the bankers lead us to sheep to a slaughter to feed their bonuses. My advice to you is to spend the past two years learning the front and back fo this crisis, the policy responces to this crisis, and then have something to say.
    It's people like you who are the case of this mess. You believe all the shit the shovel, spread it over the airwaves, the people believe it and they don't do the only appropriate things which is to riot in the streets. This is why we get screwed over an over by washington and corporate interests. when you are stupid enough to believe they are actually helping you you are just allowing them to make you poorer.
    the banks aren't lending their cheap money. the fed is giving the banks profits by buying back bonds they sell at a loss to the fed but a prifit to the banks. the banks give 44% of profits as bonus!!!!. the cheap money is getting invested in thre market causing a stock bubble, which drives up oil prices, and leads to further inflation while we get no interest.
    The Fed tells me there is no inflation. That's a lie and I knw it each and every day. the bus, subway, everything costs more. food hasn't dropped with commodities, health insurance.All still going up.
    Our founding fathers started a revbolution against the british for less than what the fed is doing to us. We elect people for change and they stock the cabnet with goldman stooges. Wake up america because when the dollar doessn't buy anything, and you are working to the day you die just to eat dogfood lloyd blankfien and Obama will be having brunch on their private Island.
    Prof William Black, just look him up, knws what is going on. it is the biggest tax payer ripoff in teh history of the world. the bankers (fireman) are running out with the goods while the building burns. they are not even attempting to put out the fire. But you think they are there to put out the fire. They are looting while Rome burns and if we don't do something fast there will be nothing left for anyone not in the game!!!

    On Aug 14 12:32 AM FB5000 wrote:

    > What a load of idealogical hogwash. Garbage ranting.
    > And the comments. What is wrong with you people?
    > The policy response to the Great Depression II was appropriate. Reduced
    > short term rates, quant. easing were/are the right things to do.
    > Without that the level of lending, GDP growth and unemployment would
    > have been significantly worse.
    > What gems.
    > Abolish the Fed? That's funny.
    > Default on debt. Really you believe that the U.S is at risk of default.
    > You are a clown. Tell the folks who bought long treasuries
    > Deepen deflation - make it worse so it can be better. Idiotic. Cut
    > off you arm when you break it.
    > Immoral Fed? That's too funny
    > You are a bunch of reationary survivialist clowns. Load up your truck
    > with ammo, spam and gold and go and live in Idaho.
    > I love reading this stuff. As long as I know you are all out there
    > I know I can make money.
    > That's all
    Aug 14 10:11 PM | 5 Likes Like |Link to Comment
    I like neither side in this debate, and actually think Obama and Bush are one in the same. They are all two faced liars and cheats. Not a big fan of Beck, but when he started calling out goldman I was happy. I wish the right wing would pick up more on this stuff. But I assure you both parties have their own interets art heart, not the american peoples. It's all talking points so they get to be the guy screwing the pople, not the other party.
    Aug 14 09:42 PM | 13 Likes Like |Link to Comment
  • Weak Fed Auction Drives Equities Higher [View article]
    A weak auction means people want their money in the market?
    Aug 12 05:13 PM | Likes Like |Link to Comment
  • Container Data Points to Drastic Shift in China Trade [View article]
    good way for china to spend its t bonds!!!! and get lower dollar holdings
    Aug 8 09:43 AM | Likes Like |Link to Comment
  • The Fed's Treasury Shell Game [View article]
    extremely disturbing.
    Aug 8 08:17 AM | 2 Likes Like |Link to Comment
  • Fannie Mae Needs $1.7 Billion in New Treasury Capital [View article]
    Because keeping it on the banks books means it doesn't have to be written off. No mark to market, at sale the loss will have to be booked. there is an incentive for banks not do do the right thing.

    On Aug 07 07:21 PM lower98th wrote:

    > Today, in central Florida, a family member went to contract on a
    > 2600 sq ft, 4 bedroom house. The net offer, after deducting only
    > seller paid closing costs, was $196,000. The 2007 (new) sales price
    > of this house was $482,300. In this small, newer neighborhood of
    > 100 homes, maybe 20% are distressd. There are 12 bank secured/not-for-
    > sale-yet properties and some listed short sales I know to be 6 months
    > lis pendens. I don't really get it, and this is only Florida, but
    > why are these vacant, slowly deteriorating homes not for sale?
    Aug 8 08:08 AM | 2 Likes Like |Link to Comment
  • Fannie Mae Needs $1.7 Billion in New Treasury Capital [View article]
    Your analysis is rather simple.
    1) having fannie and Freddie to take the mortgages off the banks books was a bad idea. the people who decide if someone is credit worthy are the people who should be taking the credit risk. not the american tax payer. Off loading risk is one of the factors that got us into this crisis.
    2) may I suggest you look at correlations of securitization and other issues. prior to the take off of securitisation credit rose along with nominal GDP. sibnce that time wages have fallen, inflation has gone up faster, and the effect of ever increasing credit has made ever smaller and smaller gains on GDP. In fact the establishement of so much credit means you don't have to pay a good living wage, and the excess funds produce asset bubbles. Stocks went from linenear growth to log growth. The solutions you appear to propose are in fact the cause of the crisis and credit supply faster than the growth of nominal GDP is a huge danger.

    On Aug 07 01:32 PM Leonard C. Tekaat wrote:

    > Lately there has been some very disturbing news about Fannie Mae
    > and Freddie Mac. The economy needs Fannie and Freddie. Without them
    > we would not have a mortgage market. Banks and financial institutions
    > sell their mortgages to them. The economy needs the housing market
    > because this is how credit is supplied to small business and consumers.
    > Without collateral banks will not and cannot loan money. If the price
    > is going down the equity is continually decreasing.
    > It has been reported, that 50 to 90 percent of housing is underwater
    > with their mortgages. This means that there is no collateral to secure
    > a loan. Credit is our primary means of exchange. Without credit money,
    > exchanges of goods and services can not take place. There is not
    > enough paper money in our economy to facilitate all the transactions
    > that must take place. Economic activity is reduced; unemployment
    > increases. For the economy to fully recover housing prices must be
    > stabilized quickly or we will have a major problem on our hands.
    > I have posted solutions to the problem on my web site economysflaw.wordpress...
    Aug 8 08:05 AM | 3 Likes Like |Link to Comment
  • Stocks Rally as the Global Recession Turns into a Potential Depression [View article]
    This is something I wrote to friends. Note in a consumer based economy the facts are not compatable with a higher stock market.

    Your income continues to drop, but thanks to easy money from the fed and manipulated markets the wall street bonus culture continues. they are keeping well ahead of inflation thanks to your easy tax dollar. don't forget you've got to pay the money back that they are borrowing to prop the market up at a higher interest rate than they do!!!!! Yes folks that is your lovely governments plan. Screw you as much as they can get away with. squander all the resources left while you are going to be eating dog food in retirement. welcome to the Obama, Bernake, summers, Geithner, plan. If you don't think they are traitors something is wrong with you!!!

    yesterday I showed you how the fed games the markets for the bankers to ensure profits. Cuomo showed you what percent of profits go to bonuses (even when they are loosing money). Yes folks your tax dollar is being directly transferred into bankers pockets. Of course it is all to help us.
    I hope by this time you don't believe a word of what they are saying. Thank god my income is falling ben, while at the same time you gut the dollar and caue inflation. what would I do without you tranferring my savings into bankers pockets. Yes you are my hero!!!!

    U.S. Incomes Fall 1.3%, Biggest Drop in Four Years (Update1

    By Shobhana Chandra

    Aug. 4 (Bloomberg) -- U.S. personal incomes tumbled 1.3 percent in June, more than forecast and the biggest drop in four years, signaling that consumer spending will take time to recover.

    The decline partly reflected the unwinding of one-time transfer payments from the Obama administration’s stimulus plan, which boosted incomes 1.3 percent in May, figures from the Commerce Department showed today in Washington. Spending rose 0.4 percent in June as prices climbed. Adjusted for inflation, purchases fell 0.1 percent, the report showed.

    The worst economic slump in seven decades eased last quarter as government spending programs started to take hold, underscoring forecasts the recession will end by the end of the year. The recovery is likely to be muted as job losses and falling home values cause Americans to boost savings and limit spending, which accounts for about 70 percent of the economy.

    “We don’t see the consumer coming back strongly,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. Americans “are still nervous. They know their personal finances will be stretched.”

    Stock-index futures, which had fallen earlier in the day, remained lower and Treasuries stayed higher. Contracts on the Standard & Poor’s 500 Stock Index dropped 0.7 percent to 994.10 at 8:34 a.m. in New York. Yields on benchmark 10-year notes dipped to 3.62 percent from 3.64 percent late yesterday.

    Economists’ Forecasts

    Economists forecast personal income would fall 1 percent after a previously reported 1.4 percent gain in May, according to the median of 75 estimates in a Bloomberg News survey. Projections ranged from an increase of 1 percent to a drop of 1.6 percent. June’s decrease was the biggest since January 2005, the month after Microsoft Corp. sent out a special dividend.

    Spending was projected to rise 0.3 percent for a second month, according to the Bloomberg survey.

    Excluding the effects of the stimulus plan, incomes would have dropped 0.1 percent in June after no change the prior month, according to Commerce. Wages and salaries decreased 0.4 percent in June, the ninth drop in 10 months.

    Today’s report showed price increases in June were smaller than in the same period last year. The inflation gauge tied to spending patterns dropped 0.4 percent from June 2008, the biggest decrease since records began in 1960.

    Fed Gauge

    The Federal Reserve’s preferred gauge of prices, which excludes food and fuel, increased 1.5 percent from a year earlier, the smallest gain since December 2003.

    The drop in incomes caused the savings rate to fall to 4.6 percent from a 14-year high of 6.2 percent in May.

    Adjusted for inflation, spending dropped 0.1 percent following little change in May.

    Inflation-adjusted spending on durable goods, such as autos, furniture, and other long-lasting items, dropped 0.2 percent in June after rising 1.2 percent in the prior month.

    Car sales may get a boost this quarter from the government’s “cash-for-clunkers” program, which offers as much as $4,500 for trading in older, less fuel-efficient vehicles. Ford Motor Co.’s sales rose in July for the first month since 2007. Purchases for the industry jumped to an 11.3 million annual pace last month, the highest level since September.

    Price-adjusted purchases of non-durable goods decreased 0.4 percent after falling 0.1 percent, today’s report showed.

    Services Spending

    Spending on services, which account for almost 60 percent of all outlays, was little changed.

    Consumer spending fell last quarter at a 1.2 percent pace, and the gain in the first quarter was revised to 0.6 percent, smaller than previously estimated, Commerce figures showed last week. Spending has fallen 2 percent since its peak at the end of 2007, the deepest retrenchment by consumers since 1980.

    The job market continues to cloud the outlook for spending. The unemployment rate is projected to surpass 10 percent by early 2010, according to a Bloomberg survey. A report from the Labor Department in three days is forecast to show payrolls fell by 325,000 in July following a drop of 467,000 the prior month.

    Consumers are reluctant to spend on much beyond necessities. MGM Mirage, the biggest casino owner on the Las Vegas Strip, reported a second-quarter loss as gambling revenue dropped. Las Vegas-based MGM slashed hotel room rates to attract tourists after companies canceled conferences.

    “The operating environment remains challenging,” Chairman and Chief Executive Officer Jim Murren said on a conference call yesterday. Even so, “we see extremely positive signs, especially as we go into 2010.”

    To contact the reporter on this story: Shobhana Chandra in Washington at
    Aug 4 07:20 PM | Likes Like |Link to Comment
  • Rail Traffic Data Tell a Different Economic Story [View article]
    Maybe I'm stupid, but I'm interested on 4 week rolling averages, on a sequential basis, how does YOY help me. we could be down huge YOY, but in a huge upswing
    Aug 4 07:09 PM | 3 Likes Like |Link to Comment
  • As Earnings Season Progresses, Revenue and EPS Continue to Deteriorate [View article]
    Sorry I mean direct transfer of money into bankers pockets from the Cuomo report!!!!
    Aug 4 08:54 AM | 2 Likes Like |Link to Comment
  • As Earnings Season Progresses, Revenue and EPS Continue to Deteriorate [View article]
    I do not understand why you pundits try to rationalize the effect of unlimited funding from the fed discount window and a waiver to goldman that allows them to carry increased VaR. This is the FEd plan in action. Future inflation, ruining the saving of millions of americans., weaker dollar, profits to bankers. William Dudley head of operations NY Fed, former goldman guy, gives them the money and they prop up the market. It wouldn't be so bad, except as we learning from the COUMO report what it really is is a direct transfer of tax payer dollars into bakers profits. Of course Americans sit there and take it.

    This is why william black has described what is going on as the greatest theft in history. And it is!!!!
    Aug 4 08:53 AM | 4 Likes Like |Link to Comment
  • Geithner Loses It After Bair Refuses to Yield Power to the Fed [View article]
    Geithner, is the problem not the solution. Of course he is angry, he wants to make sure they system is even more rigged for the investment banks. You don't get to be head of they NY Fed without doing that!!!

    I wish the right wing instead of going after abortionists started to go after the real criminals. What good is a right wing hick if they don't know who to go after.
    Aug 4 08:36 AM | 26 Likes Like |Link to Comment
  • SPX: 15% Over 200 Day Moving Average for First Time in 10 Years [View article]
    Isn't it amazing what unlimited federal money at the discount window can do. Not going to loans or helping americans, but going to goldman sachs trading profits!!!!they are stealing everything while rome burns
    Aug 4 08:30 AM | 3 Likes Like |Link to Comment
  • BofA Makes SEC Charges on False Statements Go Away in a Hurry [View article]
    Good to knw that reform lasted all of two minutes
    Aug 3 02:08 PM | 4 Likes Like |Link to Comment