biomedlives

Cramer's Mad Money - The Capitalist Manifesto (7/27/09)

One more time - make that "little or no regulation crowd."

Cramer's Mad Money - The Capitalist Manifesto (7/27/09)

make that "...little-or-no-regul... crowd."

Cramer's Mad Money - The Capitalist Manifesto (7/27/09)

Then let's hear an alternative from the free market/little-or-no-re... crowd. There wasn't one at the critical time, so the government had to step in.


On Jul 28 10:14 AM Arthur O wrote:

> This is just a lot of liberal crap that will do no more than the
> current pile liberal carp instigated by the democrats.

How Were Canadian Banks Unscathed by the Crisis?

The argument that "The US government made me do it" doesn't hold water. The leaders of American financial institutions were paid big bucks to steer their companies through difficult times like the last few years, and they failed miserably. Note that some institutions, like Hudson City, have managed to come through in good shape so far, even though they were operating in the same regulatory environment as Citicorp, WaMu, Wachovia,...


On Jul 22 09:45 AM ilovesum wrote:

> the canadian govt didn't force the banks to take risky loans and
> allow subprime , teaser morgages etc , so it was the reasonable
> regulations that prevented it.
> nor did the canadian system force banks to take govt money(tarp)
> or buy failed banks at inflated prices (merril lynch) with a shotgun
>
> also the price of oil didn't collapse until 2008 which meant positive
> gdp and some economic activity. the usa had a meltdown in 2007 ,
> a year earlier .
> since oil is back around $60 the canadian govt is talking about a
> positive gdp for this year and economic recovery
> so yes, the canadian banks faired better than many others but there
> were economic and regulatory factors involved.
> sometimes its more a matter of avoiding dumb things than trying to
> fix them after and wonder why we did it in the first place

Goldman's Success: Put Down Those Pitchforks

1) "That subsequent action is regulatory reform—limitations on leverage, new rules on compensation, perhaps a bank tax to pay for oversight and future bail-outs, and so on." Regulatory reform is absolutely essential, but American financial institutions, probably include Goldman, are fighting it tooth and nail.

2) "First, a guarantee only costs if it's invoked, and it's rarely invoked because it's a credible guarantee." Whether a guarantee is invoked or not, it has value in the same way that auto or homeowner's insurance does. I still expect to pay the insurance company a premium, even if I haven't had an accident or a fire at home over the last year.

3) "And yes, there are billions in profits, but that was the idea all along." As Taibbi's rant points out, the real idea was to get the economy back on its feet, not save Wall Street from its
(largely self-inflicted) wounds.

Anyone have a recommendation on a good farm equipment store?

'Too Big to Fail' Should Not Exist

Until American wages are closer to those in developing nations, it will continue to be difficult for manufacturing in the US to be competitive in world markets.


On Jul 06 12:11 PM User 158164 wrote:

> Obviously the author knows absolutely nothing about the auto business
> or how this situation came to pass.
>
> I can hear the same arguments when the auto industry went through
> a massive consolidation in the 50's, When all the independent companies
> were gobbled up or run out by the big 2 (Chrysler and AMC were allowed
> to live to keep the regulators off of GM's backs) and anyone who
> didn't like it were told "it's market forces".
>
> The problem is it's not "market forces", it is 50 years of self desstructive
> trade policies that make it more and more difficult to produce goods
> in this country.
>
> We need policies that make American companies compedetive in the
> world market. Not protectionism, but a level playing field.

Who Should Have Skin in the Game?

Let's carry the train of thought further. On the basis that someone who can't analyze an investment product shouldn't buy it,...wait for it... there's virtually no one who should buy an MBS (and particularly not a CDO squared). Perhaps it's time for these packages to ride off into the sunset.


On Jun 17 12:16 PM Kid Dynamite wrote:

> biomedlives - what you say is correct, but it's no excuse! if the
> buyer cannot effectively analyze the product then... wait for it...
> HE SHOULD NOT BUY IT!!!!
>
> just because BankAmerica keeps some of the loan on their books doesn't
> make it safe - as i commented above, the banks owned PLENTY of this
> crap - remember all the talk of "toxic assets" ???? i hate the argument
> that the banks keeping some risk is indicative to buyers that it's
> ok for them to buy it too - that's even worse!

Who Should Have Skin in the Game?

The problem with IPOs as an analogy is that an IPO represents one security, which the buyer has a reasonable chance to analyze thoroughly. With an MBS package, the buyer has no chance to analyze the quality of the multitude of underlying mortgages. As the author points out, ratings agencies have not been reliable analysts of MBS packages If the institution selling the package keeps a piece of it, it gives the buyer some assurance that most of the underlying mortgages will perform.

Notable Picks from Investment Managers - Barron's

I would be interest to know why GGPWPQ common is likely to have some value in the future, though common is often wiped out in bankruptcy.

Why This Rally Is Unsustainable

I suspect Obama would be happier if this crisis had never happened and he could focus on other issues. Many of those complaining now about socialism and government interference are the same people who drove the financial system over a cliff.


On May 01 01:26 PM jack kreg wrote:

> NS, you need some help with clarity. but you really just missed the
> real issue, Obama's socialism will not work. Yes, printing and borrowing
> money will prop up failed banks and auto's, but a sustained economic
> recovery is not in our future.
> I expect high un-employment thru Obama's first term, easily over
> 10% for 4 more years. with that level of un-employment how can stocks
> appreciate? I think best strategy is for solid co's, international
> sales, and dividends. Possibly returning 4-7% annual. Much higher
> taxes on income and energy, both bad for jobs and the economy. <br/>I
> wish you would have offered a clearly written summary, but thanks
> for trying.

Let's Hurt the American Financial Services Industry

If there's a brain drain from the financial services industry, we may have fewer "innovations" like CDSs, subprime mortgages, and CD squared securities in the future. That situation would suit me.

Why It's Better to Bail Out Borrowers than Banks

I have no sympathy for bank shareholders ( or bondholders, for that matter). It was a good ride while it lasted, but a lot of them would have been complete toast in the end without the TARP investments.


On Apr 11 02:22 PM E Nuff Sed wrote:

> The bail out (seekingalpha.com/symbo...) money is not free.
> The banks are paying a 5% - 8% dividend to the government who had
> just printed a lot of "free money" to liquidate/dilute the shareholders.
>
> I suspect when the dust settles in a few years the government and
> the tax payers will come out ahead and they would have saved the
> system as well. This is what happened in the 90's with the S&amp;L's.
>

Credit Card Cancer

You're right. China's dollar holdings will give it enormous leverage in foreign affairs in the future.


On Mar 16 06:06 AM Kinja Rules wrote:

> The Chinese as well as All other Govt's of the World will always
> have their own best interests @ heart. It is a given. What is Shocking
> is that w/o a bullet fired China could easily topple the US, by sales
> in various bond related instruments. This is Really Sad. On the
> other hand, they still need US...

Credit Card Cancer

AMEN!


On Mar 14 11:06 PM WesAttaway wrote:

> A great article. My concern has always been that since the basic
> problem is that Americans have been spending more money than they
> have then how can we expect "demand" to go back to where it was.
> The answer is perfectly explained in this article. Without a continuation
> of unsupportable credit we can't do it. Smart businesses are already
> readjusting to the reality of decreased demand.

The Wonders of Mark-to-Market: Simultaneously Well-Capitalized and Insolvent

I take your point about the havoc MTM has created. Nonetheless, I'm sense that banks are often unrealistic when they set decide their quarterly loan loss allowances. As the current crisis was developing, many were setting nothing or almost nothing aside, even though loan balances were increasing.