darkpool

Stunned by the interview of AIG's financial products unit head, and noting that AIG (AIG) refused to sign on to new financial products industry standards known as the "Big Bang," David Weidner says they deserve the pain: The picture emerging from AIG's financial products group is one of a cavalier unit full of greedy executives.

I'm sorry, but cut the righteous indignation about these groups. They do what they do best, and they were hired just for that purpose. Whatever greed there was, originated with those who hired them. Don't blame the sharks for eating the smaller fry !

"The unpalatable reality that very few, self interested industry participants are prepared to admit is that much of what passed for financial innovation was specifically designed to conceal risk, obfuscate investors and reduce transparency. The process was entirely deliberate."

and for not just the investors....for internal purposes as well !

Suckers' rally: "It is unwise and foolish to treat this bear market like any other in the post-WWII period because it is totally unique; the scope and depth of the ongoing destruction of consumer and business credit, bank balance sheet compression and insolvency, consumer retrenchment and soaring unemployment should not be underestimated."

In a years time, you might either face a higher and riskier re-entry point or more pertinently, a significant erosion of your "real" capital


"I don't understand why its a sucker rally. Maybe it is a bear market rally but whats so complicated about riding it up but keeping tight " sell on stop orders"? Why sit on a 6% annual return on a bond when you can make 20% in a month long rally, protect the down side, and take the rest of the year off?"

Amid slumping auto sales, Nissan (NSANY) gets ready to start selling the "Cube," a cube-shaped, cheap, smallish car targeted to young drivers. Oh, and Nissan is calling it a 'mobile device,' not a car. Right.

I have a gut feeling that starting with Asia, consumers are going to embrace some form of electric vehicle. The West will follow to some extent. This represents a quantum shift, and not all car companies will be on board with this trend. This trend isn't just environmentalism. Nissans smaller, cheaper, theme may not be so way off the mark ( except in our minds)

"In this environment, when you own a company (JAVA) that barely has a reason to exist, outside of a programming language (Javascript), you probably shouldn’t f&%@ around when you have a bid from IBM (IBM) on the table." - the reformed broker

For the sake of around 5% as reported, some of these guys need their heads examining. ( or carefully removing from their posteriors)

Mike Shedlock sees no reason house prices won't fall back to 2001 or even 2000 levels (right now they're late-2003), and wonders, "how many are prepared for it, if indeed that were to happen?"

While it certainly makes that prime borrower feel poorer, its only on paper. As long as they still have income and can afford the payments, being under-water on a mortgage isn't exactly the end of the world. It merely adds an extra decision dimension....whether to keep paying the monthly "right to continue occupying the house" payment, or whether to walk away. Of course they cant refinance or borrow against paper "equity", but those days are gone for a while anyway. ( at least until the multi-trillion dollar currency debasement starts to kick start asset inflation again ! )

China's call for some magical solution to the problem of its huge dollar reserve suggests a bigger problem, Paul Krugman writes: Its leaders have yet to come to grips with the fact that the rules of the game have changed in a fundamental way.

Krugmans point is simplistic and far from new. Its been obvious to all concerned for a long time. Its as basic as we cannot wean ourselves off debt and deficit spending because it would drive the economy into the ground. The point is, China can and will affect things "at the margin" . Thats all it is going to take.

"China’s idea of dumping the dollar as the world’s reserve currency has about as much appeal in today’s globalized economy as Esperanto. It might be a good idea, but nobody’s ready to buy it." (Celestine Bohlen)

everyone seems to forget that changes are effected "at the margin". Just the mere mention of China moving out of dollars was enough to put the cat among the pigeons. Probably all it will take are incrementally fewer dollar purchases to have a very noticeable impact on the markets. That is well within both China's ability and self interest.

GM's (GM) ex-CEO Rick Wagoner is a scapegoat, Ed Wallace says. "In reality, Detroit is actually one of the victims of the financial mess. Terminating Wagoner... makes exactly as much sense as shooting the witness to a murder and saying the crime has been avenged."

just a message to the dumb and blind

U.S. automakers can be saved, Jerry Flint says, noting with admiration Carlos Ghosn's turnaround at Nissan (NSANY). But it's not the government's billions that will do the trick - and all the recovery plans are meaningless, he says. What do they need? Innovative leadership.

all the innovative leadership in the world will not do the trick until the "legacy" cost structure is removed.

America's Real Wealth

Broadly speaking, America is a nation of entrepreneurs.....and academic qualifications are only part of that equation. FLEXIBILTY is why in the end you shouldnt bet against the US. So, the bailout plan may not be the whole answer..........but its a try, and so has been everything that has happened in the last 6 months. Its not really flounding around, its part of a very real and necessary restructuring of the economy to deal with all the excesses that we largely all agree on. We will get through this, but it might be ugly. We will come out of it ahead of the rest of the world. Just look at the competition.........na... statism, autocracy, socialism, bureaucracy........you just dont get flexibility and evolutionary solutions from those structures. So those of you who drank from the pool of excess these past couple of decades, time to tighten your belts and get over it. There are still plenty of businesses and individuals who are soundly managed and funded, so its not quite the abyss.

btw.....1)to the blah blah blah political classes, please get out of the way
2) if we really want to mess with finding a speedy solution to the current problems, we will elect Democrats to all levels of government
3) I recall reading in Greenspan's memoirs how he marveled at the flexibility of the US economy......was he that Machiavellian to assume that innate flexibility would come to the rescue of his own errors!

The Real Risks of Deleveraging

However enticing a temporary suspension of "mark to market" rules might appear, I believe the inevitable loss of transparency will do far more damage in the longer term. What we are witnessing is a radical restructuring of the global financial economy.....and as always, the US , because it is the most dynamic, flexible and transparent economy in the world, is in the lead.......dont underestimate the power of this flexibility. It may be ugly, but re-structurings do not come without pain.