2bz's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/270786/comments http://seekingalpha.com/article/126447-why-aig-wasn-t-allowed-to-fail?source=feed#comment-430168 430168 Wed, 18 Mar 2009 02:36:20 -0400 http://seekingalpha.com/article/126447-why-aig-wasn-t-allowed-to-fail?source=feed#comment-430165 430165 Wed, 18 Mar 2009 02:28:10 -0400 http://seekingalpha.com/article/126447-why-aig-wasn-t-allowed-to-fail?source=feed#comment-430157 430157
On Mar 17 05:01 PM Mike Hydes wrote:

> What would happen if Congress just invalidated these credit default
> swaps?
>
> If they can do that then why has it not been done?]]> Wed, 18 Mar 2009 02:15:43 -0400
On Mar 17 05:01 PM Mike Hydes wrote:

> What would happen if Congress just invalidated these credit default
> swaps?
>
> If they can do that then why has it not been done?]]> http://seekingalpha.com/article/114350-we-may-see-mortgage-rates-fall-to-3-5?source=feed#comment-363681 363681
> Other variables for the individual to consider are the mortgage interest
> deductions for a 3.5% mortgage versus what they are writing off with
> their current mortgage, and what the need for the write-off will
> be down the line depending on their income.

Nonsense, what consideration should a tax rate less than 100% have on refinancing at a lower interest rate? Your post only makes sense if the tax rate is greater than 100%.]]> Thu, 22 Jan 2009 23:47:20 -0500
> Other variables for the individual to consider are the mortgage interest
> deductions for a 3.5% mortgage versus what they are writing off with
> their current mortgage, and what the need for the write-off will
> be down the line depending on their income.

Nonsense, what consideration should a tax rate less than 100% have on refinancing at a lower interest rate? Your post only makes sense if the tax rate is greater than 100%.]]> http://seekingalpha.com/article/116021-treasury-selloff-we-may-be-approaching-bailout-limits?source=feed#comment-363679 363679 > It's
> a only a bank bailout.

And a poor one at that. Rather than propping up rotten banks the govm't "should" fund new banks with squeaky clean balance sheets. It doesn't matte that much that the same people would run the new banks as the old banks, at least the balance sheets would be clean. Propping up (a better description of what's happening than "bailing out") is a near bottomless pit. The bank's creditors may get their money from the govm't, but that's where the buck stops. Yes, the govm't may make some money on the bad paper, but I'm not betting on it. I think all of it will go to the creditors.]]> Thu, 22 Jan 2009 23:39:41 -0500 > It's
> a only a bank bailout.

And a poor one at that. Rather than propping up rotten banks the govm't "should" fund new banks with squeaky clean balance sheets. It doesn't matte that much that the same people would run the new banks as the old banks, at least the balance sheets would be clean. Propping up (a better description of what's happening than "bailing out") is a near bottomless pit. The bank's creditors may get their money from the govm't, but that's where the buck stops. Yes, the govm't may make some money on the bad paper, but I'm not betting on it. I think all of it will go to the creditors.]]> http://seekingalpha.com/article/114350-we-may-see-mortgage-rates-fall-to-3-5?source=feed#comment-354917 354917
Also, if people don't have incomes, they will not be able to refinance unless lenders continue to offer "liars' loans".

The best, but not a short term, solution to our problems is to figure out how to flip the tables on the rest of the world and in particular on Asia. Namely, find goods or more likely services which we can provide to the exclusion of other countries for which there would be a high demand and which we could manufacture/provide relatively cheaply. Our business people and lawyers are increasingly working in places like Abu Dhabi is an excellent start. Obama's plan to reinvigorate our scientific research may be a good idea too in the longer term, provided that we succeed.]]> Tue, 13 Jan 2009 17:21:58 -0500
Also, if people don't have incomes, they will not be able to refinance unless lenders continue to offer "liars' loans".

The best, but not a short term, solution to our problems is to figure out how to flip the tables on the rest of the world and in particular on Asia. Namely, find goods or more likely services which we can provide to the exclusion of other countries for which there would be a high demand and which we could manufacture/provide relatively cheaply. Our business people and lawyers are increasingly working in places like Abu Dhabi is an excellent start. Obama's plan to reinvigorate our scientific research may be a good idea too in the longer term, provided that we succeed.]]> http://seekingalpha.com/article/114091-a-new-goal-for-tarp-funds-create-mutual-banks?source=feed#comment-351979 351979 seekingalpha.com/user/...]]> Sat, 10 Jan 2009 20:27:15 -0500 seekingalpha.com/user/...]]> http://seekingalpha.com/article/105660-reasons-to-bail-out-gm?source=feed#comment-304590 304590 Bailing out the 3 is akin to keeping a terminally ill patient on life support. It cost the family a ton of money, but the final outcome remains certain regardless of the efforts.

Bankruptcy of the 3 is not equivalent to closing them down. It gives them an opportunity to clear their books of debt and start with a clean slate. Many airlines have done so and are still around today. We should however consider the impact on their suppliers. The ones with decent balance sheets (if there are any) will be the hardest hit in that they will have to swallow losses generated by the 3's defaults, but they may not yet be eligible for bankruptcy thus likely resulting in RIFs. The rotten ones will just go bust like the 3 and start from scratch under new ownership.]]> Wed, 12 Nov 2008 18:50:18 -0500 Bailing out the 3 is akin to keeping a terminally ill patient on life support. It cost the family a ton of money, but the final outcome remains certain regardless of the efforts.

Bankruptcy of the 3 is not equivalent to closing them down. It gives them an opportunity to clear their books of debt and start with a clean slate. Many airlines have done so and are still around today. We should however consider the impact on their suppliers. The ones with decent balance sheets (if there are any) will be the hardest hit in that they will have to swallow losses generated by the 3's defaults, but they may not yet be eligible for bankruptcy thus likely resulting in RIFs. The rotten ones will just go bust like the 3 and start from scratch under new ownership.]]> http://seekingalpha.com/article/99374-friday-s-bond-outlook-bursting-of-the-treasury-security-bubble-update?source=feed#comment-278851 278851
Err, provided that there is any credit left on our credit cards. ;)]]> Fri, 10 Oct 2008 10:25:14 -0400
Err, provided that there is any credit left on our credit cards. ;)]]> http://seekingalpha.com/article/99374-friday-s-bond-outlook-bursting-of-the-treasury-security-bubble-update?source=feed#comment-278843 278843 www.cbot.com/cbot/pub/...]]> Fri, 10 Oct 2008 10:21:26 -0400 www.cbot.com/cbot/pub/...]]> http://seekingalpha.com/article/99112-deflation-changes-the-rules?source=feed#comment-278085 278085
I think we already had some of this and perhaps we will have some more provided that the government succeeds in stabilizing the economy (I'm in this camp). If it doesn't I think that deflationary recession is in the cards. I don't feel that we're in for a traditional inflationary scenario.]]> Thu, 09 Oct 2008 16:19:29 -0400
I think we already had some of this and perhaps we will have some more provided that the government succeeds in stabilizing the economy (I'm in this camp). If it doesn't I think that deflationary recession is in the cards. I don't feel that we're in for a traditional inflationary scenario.]]> http://seekingalpha.com/article/99112-deflation-changes-the-rules?source=feed#comment-277851 277851
It is possible, when there is a lot of turmoil (political, economic, etc.) outside the U.S. relative the U.S. itself both gold and U.S. currency can appreciate. Of course, depending on the relative demand and supply of each their relative prices will fluctuate with respect to each other.]]> Thu, 09 Oct 2008 12:54:09 -0400
It is possible, when there is a lot of turmoil (political, economic, etc.) outside the U.S. relative the U.S. itself both gold and U.S. currency can appreciate. Of course, depending on the relative demand and supply of each their relative prices will fluctuate with respect to each other.]]> http://seekingalpha.com/article/99112-deflation-changes-the-rules?source=feed#comment-277842 277842 US) cash today than when gold was at $1000; that's why cash is king."

"King is dead, all hail the king." The problems with kings is that they come and go. So even if the Fed IOUs are the king at the moment, gold may soon be the our king again.]]> Thu, 09 Oct 2008 12:48:51 -0400 US) cash today than when gold was at $1000; that's why cash is king."

"King is dead, all hail the king." The problems with kings is that they come and go. So even if the Fed IOUs are the king at the moment, gold may soon be the our king again.]]> http://seekingalpha.com/article/99132-u-s-bank-nationalizations-one-step-closer?source=feed#comment-277795 277795 Thu, 09 Oct 2008 12:02:21 -0400 http://seekingalpha.com/article/98091-the-u-s-economy-after-the-bailout?source=feed#comment-271672 271672
Our infrastructure is in a state of shambles and these projects would most likely not be funded directly by the private sector. Thus, we would be much better served spending the $700,000,000,000 on fixing roads, bridges, etc. even though the return on such investment is even harder to measure than return on financial paper of currently unknown value. Better roads, for example, would contribute to better mileage, less breakdowns, and faster delivery times.]]> Thu, 02 Oct 2008 12:17:46 -0400
Our infrastructure is in a state of shambles and these projects would most likely not be funded directly by the private sector. Thus, we would be much better served spending the $700,000,000,000 on fixing roads, bridges, etc. even though the return on such investment is even harder to measure than return on financial paper of currently unknown value. Better roads, for example, would contribute to better mileage, less breakdowns, and faster delivery times.]]> http://seekingalpha.com/article/98091-the-u-s-economy-after-the-bailout?source=feed#comment-271653 271653
Have we not learned from the Iraq fiasco?]]> Thu, 02 Oct 2008 12:04:57 -0400
Have we not learned from the Iraq fiasco?]]> http://seekingalpha.com/article/98091-the-u-s-economy-after-the-bailout?source=feed#comment-271650 271650
Hahaha, brilliant! Again "Gabe", you are a source of incredible humor which brightens my day. Wall street being forced to sell their assets at a fraction of face value. That's humor. Hahaha!]]> Thu, 02 Oct 2008 12:03:42 -0400
Hahaha, brilliant! Again "Gabe", you are a source of incredible humor which brightens my day. Wall street being forced to sell their assets at a fraction of face value. That's humor. Hahaha!]]> http://seekingalpha.com/article/98120-don-t-get-sanguine-about-this-bill?source=feed#comment-271155 271155 Wed, 01 Oct 2008 23:50:01 -0400 http://seekingalpha.com/article/98120-don-t-get-sanguine-about-this-bill?source=feed#comment-271153 271153 Wed, 01 Oct 2008 23:45:50 -0400 http://seekingalpha.com/article/97663-the-deal-s-getting-done-but-will-it-work?source=feed#comment-267848 267848 Sun, 28 Sep 2008 18:13:12 -0400 http://seekingalpha.com/article/97539-the-simple-explanation-of-bailouts-inflation-and-deflation?source=feed#comment-267841 267841
First, there must not have necessarily been fraud (though no doubt there was fraud), just irrational exuberance (everyone wanted to be a real estate mogul).

Second, the Fed was at the stern and they were, at least partially, the responsible regulator who should have put a kibosh on the fraud as it was occurring.]]> Sun, 28 Sep 2008 18:07:41 -0400
First, there must not have necessarily been fraud (though no doubt there was fraud), just irrational exuberance (everyone wanted to be a real estate mogul).

Second, the Fed was at the stern and they were, at least partially, the responsible regulator who should have put a kibosh on the fraud as it was occurring.]]> http://seekingalpha.com/article/97539-the-simple-explanation-of-bailouts-inflation-and-deflation?source=feed#comment-267837 267837
This should never be necessary. During economic expansion equity rather than debt should be the desirable financing mechanism. See the example of the .com bubble. Lowering the interest rates during a period of economic expansion only leads to (or fans) inflationary bubbles.]]> Sun, 28 Sep 2008 18:03:09 -0400
This should never be necessary. During economic expansion equity rather than debt should be the desirable financing mechanism. See the example of the .com bubble. Lowering the interest rates during a period of economic expansion only leads to (or fans) inflationary bubbles.]]> http://seekingalpha.com/article/97663-the-deal-s-getting-done-but-will-it-work?source=feed#comment-267830 267830
In reality the $100 is both, an asset and a liability. The $100 you brought in is the asset and the $100 they owe you is the liability. Aside from this minor point, it is very funny. You go to bank one and borrow the $100 and deposit it in bank two. Someone else now goes to bank two and borrows $1000 and deposits it in bank one. A third person now goes to bank one and borrows $10,000, ... Then suddenly, you decide to withdraw the $100 to pay off your debt to bank one (i.e. you make "a run on the bank") and the house of cards comes crumbling down. Well, not always, but there is that possibility.]]> Sun, 28 Sep 2008 17:53:00 -0400
In reality the $100 is both, an asset and a liability. The $100 you brought in is the asset and the $100 they owe you is the liability. Aside from this minor point, it is very funny. You go to bank one and borrow the $100 and deposit it in bank two. Someone else now goes to bank two and borrows $1000 and deposits it in bank one. A third person now goes to bank one and borrows $10,000, ... Then suddenly, you decide to withdraw the $100 to pay off your debt to bank one (i.e. you make "a run on the bank") and the house of cards comes crumbling down. Well, not always, but there is that possibility.]]> http://seekingalpha.com/article/97547-bailout-talks-lose-sight-of-the-cost-question?source=feed#comment-267815 267815 Sun, 28 Sep 2008 17:31:18 -0400 http://seekingalpha.com/article/97547-bailout-talks-lose-sight-of-the-cost-question?source=feed#comment-267806 267806
Well, gramps, I don't think that the case is as simple. As I have stated before, this is a grossly simplified estimate based on the assumption that the current mortgage rates to the non-defaulting borrowers would be the same to those borrowers today. I agree with tvb that there may well be a spread, however no one has yet shown what those spreads are. Although tvb speculated as to their existence, tvb disclaimed any actual knowledge. Furthermore, 30 year mortgages according to bankrate.com hover today around 6%. So although I agree with you as to the results based on my very general assumptions, I disagree with you as to the valuation methodology which in your case takes my assumptions for granted and in my case is simply an assumption for lack of sufficient data.

jbde wrote: "Thus 'we the people' get the best and lowest price and thus the best upside potential as the Treasury can hold the MBS's to maturity. "

This statement is a falacy. What "we the people" will get is the lowest ask, not the best and lowest price. The best and lowest price would be the fire sale price however irrational that price would be. The banks have already shown an unwillingness to reduce the prices of those assets below certain thresholds. Furthermore, we have no insight to evaluate whether those prices are reasonable, and the lack of interest in the paper at those prices, assuming that "markets are always right", suggest that the prices are not reasonable and thus far from being the best and lowest.]]> Sun, 28 Sep 2008 17:15:29 -0400
Well, gramps, I don't think that the case is as simple. As I have stated before, this is a grossly simplified estimate based on the assumption that the current mortgage rates to the non-defaulting borrowers would be the same to those borrowers today. I agree with tvb that there may well be a spread, however no one has yet shown what those spreads are. Although tvb speculated as to their existence, tvb disclaimed any actual knowledge. Furthermore, 30 year mortgages according to bankrate.com hover today around 6%. So although I agree with you as to the results based on my very general assumptions, I disagree with you as to the valuation methodology which in your case takes my assumptions for granted and in my case is simply an assumption for lack of sufficient data.

jbde wrote: "Thus 'we the people' get the best and lowest price and thus the best upside potential as the Treasury can hold the MBS's to maturity. "

This statement is a falacy. What "we the people" will get is the lowest ask, not the best and lowest price. The best and lowest price would be the fire sale price however irrational that price would be. The banks have already shown an unwillingness to reduce the prices of those assets below certain thresholds. Furthermore, we have no insight to evaluate whether those prices are reasonable, and the lack of interest in the paper at those prices, assuming that "markets are always right", suggest that the prices are not reasonable and thus far from being the best and lowest.]]> http://seekingalpha.com/article/97663-the-deal-s-getting-done-but-will-it-work?source=feed#comment-267759 267759
Absolutely not. We are an unwilling purchaser and should not be forced to buy something we don't want and arguably don't need. Inflation is not an answer to lack of confidence.]]> Sun, 28 Sep 2008 16:24:11 -0400
Absolutely not. We are an unwilling purchaser and should not be forced to buy something we don't want and arguably don't need. Inflation is not an answer to lack of confidence.]]> http://seekingalpha.com/article/97575-i-m-speechless-palin-on-the-bailout?source=feed#comment-267754 267754
I disagree with the former and agree with the latter. We aren't infants who need to be senselessly babbled to to develop basic speaking skills. Yes, most of our representatives are very likely not Mensa material and thus we should vote them out in preference to someone like Stephen Hawking, who is Mensa material and in spite of his physical shortcomings can still communicate quite coherently.]]> Sun, 28 Sep 2008 16:16:31 -0400
I disagree with the former and agree with the latter. We aren't infants who need to be senselessly babbled to to develop basic speaking skills. Yes, most of our representatives are very likely not Mensa material and thus we should vote them out in preference to someone like Stephen Hawking, who is Mensa material and in spite of his physical shortcomings can still communicate quite coherently.]]> http://seekingalpha.com/article/97575-i-m-speechless-palin-on-the-bailout?source=feed#comment-267749 267749
Well, I don't know about Tom Ridge, but Lieberman would not get the support of the GOP, because among other things, he is Independent, used to be a Democrat, and let's face it is not conservative enough even if the former reasons are not enough to make him unelectable. From the very beginning McCain had a problem pulling in the conservative wing of his party. The choice of Palin, at least superficially, gave him someone young, attractive and female. Young and attractive to offset Obama's celebrity cache, female to capture voters disillusioned by Hilary's failure to secure at least a VP candidate position. It was the wrong tactic (i.e. she a disaster) in the right strategy (if she wasn't such a dumbo, it would have worked very well).]]> Sun, 28 Sep 2008 16:10:24 -0400
Well, I don't know about Tom Ridge, but Lieberman would not get the support of the GOP, because among other things, he is Independent, used to be a Democrat, and let's face it is not conservative enough even if the former reasons are not enough to make him unelectable. From the very beginning McCain had a problem pulling in the conservative wing of his party. The choice of Palin, at least superficially, gave him someone young, attractive and female. Young and attractive to offset Obama's celebrity cache, female to capture voters disillusioned by Hilary's failure to secure at least a VP candidate position. It was the wrong tactic (i.e. she a disaster) in the right strategy (if she wasn't such a dumbo, it would have worked very well).]]> http://seekingalpha.com/article/97663-the-deal-s-getting-done-but-will-it-work?source=feed#comment-267734 267734
On a related note, we should vote out of the office anyone who votes for the bailout, since they are certainly not representing our interests.]]> Sun, 28 Sep 2008 15:50:08 -0400
On a related note, we should vote out of the office anyone who votes for the bailout, since they are certainly not representing our interests.]]> http://seekingalpha.com/article/97663-the-deal-s-getting-done-but-will-it-work?source=feed#comment-267730 267730
This reminds me of lyrics to a somewhat recent popular song by the Blood Hound Gang:

" The roof, the roof, the roof is on fire
We don't need no water let the m____rf____r burn
Burn m____rf____r, burn"

Here it is in full www.youtube.com/watch?...]]> Sun, 28 Sep 2008 15:43:52 -0400
This reminds me of lyrics to a somewhat recent popular song by the Blood Hound Gang:

" The roof, the roof, the roof is on fire
We don't need no water let the m____rf____r burn
Burn m____rf____r, burn"

Here it is in full www.youtube.com/watch?...]]>