andruomail

The Stress Test's Biggest Loser: GMAC

Don't forget all insurance companies and manufacturers that offer warranties, casinos, etc. They are all insolvent too!

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

A classic description from an odd point of view!


On Apr 30 09:18 PM danf wrote:

> Lots on sensitive feelings on display about calling our president
> names. He is however just a man and not particualarly crucial to
> the survival of our society. I recall much worse names being hurled
> at Bush 1 and 2. And I clearly remember the glee of the media in
> showing the shoe being thrown at the president. I personally refer
> to the president as Princess Obama.
>
> The unfortunate thing is that the consequences of whatever Ob does
> now wont show up for 5 or 7 years. So OB will take credit for the
> recovery that would come along naturally and will be out of office
> when the consequences of what he does now manifest themselves in
> the future.
>
> My own take is that the article is spot on. The unions are the favored
> constiuency of the government. It would be better for the economy
> if chrysler were liquidated rather than have the company run for
> the benefit of the UAW and the administration. Such a liquidation
> might inject some reality into the greater economy.
>
> When the means of production are nominally in private hands, but
> the enterprise is run to benefit the interests of the state - we
> have a classic description of National Socialism in Germany 1933
> - 45

Bank Bailouts and Trust Preferreds: Still Too Much Risk Here

I seem to remember reading that trust preferred was invented so that banks could include a part of them as Tier I capital on the balance sheet and also fully deduct their dividends at the same time as debt payments. It just worked out better for them on the balance sheets & tax forms that way. Trust preferreds are interests in a trust fund made up of one giant bond issued by the parent co. Normal preferreds are shareholders.

Liquidity, Solvency and Acute vs. Chronic Banking Systems

I laughed at the criticism of the baseball & sailing metaphors but don't quite understand what the banking sector would look like after the prairie fire which in ecology makes the ground more fertile. In banking who are these operators that would spring up and how would they be a big improvement over today?