driftwood2

Next Up: Dow 10,000? Does Anyone Care?

For precisely the reasons you state, the dow isn't a very a useful index. It's ridiculous that it gets higher billing that the s&p500 or the Wilshire 5000.

Who Owns the Fed?

Very significant information. Everyone needs to know this.

Why Nationalize in 2016?

I'm surprised how much vitriol we have here. Do you people honestly think that naysayers and shortsellers are responsible for what's happening now? Give me a break. This crisis was caused by the people that were actually in charge of the show: the bankers, the investment firms, the fed and the government. Also, although few people appreciate this, our current crisis was also due to corrupt academics and is also an inevitable consequence of debt based money. Everything Salmon has said is reasonable. Look at what happened to Japan. They kept their zombie banks operating and had to nationalize one of them eventually anyway.

Nationalizing Bank Losses

Let the banks fail and then nationalize them. Problem solved.

Banks: The Final Countdown?

Something is definitely up. I'm surprised the markets have reacted to it as little as it has. It sure looks like the banks are trying to get ahead of options expiration? But for what reason? Or are they trying to get ahead of the inauguration?

Citigroup: Bowing to the Inevitable

"Moody's sees no ratings impact of the deal on either Citi or Morgan Stanley. Neither does Fitch. Nor Standard & Poor’s." More evidence of the utter irrellavence of these ratings companies. Are these guys good for anything? The entire ratings industry needs to be changed so that only the consumers of their information should be the provider of funds.

S&P 500 Financial Sector Market Cap Continues to Sink

The size of these losses, especially for companies like C, BAC, MS, GC, and etc is a rough indicator of how much money will ultimately be needed to bail them out. Some optimistic individuals are of the opinion that the bailout funds already provided by the government will be enough to fix our financial system. If that were the case, why would Citi, who received a mere $45B from the government, have lost $246B in market cap? If Citi had only lost on the order by $45B, wouldn't their market cap have fallen a similar amount? The truth is, Citi alone will probably require hundreds of billions of taxpayer dollars to be made solvent. Tarp is only the beginning.

Government Shouldn't Dictate Bank Behavior

Private companies shouldn't have to take government money. However, since we all know that many of these large banks are insolvent, they have no choice. If things had been allowed to run their natural course, many of these big banks would be in bankruptcy. They know this of course. They have no choice at this point. If the government were ever to withdraw tarp funds or sell preferred shares, any of the the recipient companies would experience a run on the bank that would make what happened to Bears & Sterns look like a walk in the park.

Why Fiscal Stimulus Isn't Enough

Nor will they be solved easily. We have a wave of corporate mbs debt defaults coming. A wave of corporate debt defaults. And a wave a alt-a and option arm defaults coming next year. The banking industry will need another ~1 trillion of money to replace all the money they lost.