Jasper M

Options Trader Outlook: It's Fall-Down Friday, Dubai Cruel World!

I second Screw. Best play on that headline (or any other I've seen in a while).

The New Normal Could Be That Way for a While

Well said.

Face It: The FDIC Is Broke

Mark,
Here's something you and I can agree on.
MOST Americans have negligible savings, that much is documentable.
Personally, I have been drawing down my exposure to the FDIC gradually (started in '06), as I expect the peak of that aspect of the crisis to still be years away. My $ is almost all in Swiss insurance contracts, T-bills, and demand deposits in two of the safest banks in my home state.
So the broke are broke, the wise are gone, what about the rest? Well, historically, people tend to avert their eyes to this sort of thing, until they all agree to start screaming at once.

Of Creditor Haircuts, Precedent and Sheila Bair

Bair's idea is self-defeating - if you announce that creditors can be screwed (more), then you dry up potential future capital to the very firms the Admin is trying to save -which puts More companies in line for corporate welfare. Stupid, stupid.

This sort of thing is going to go off in their faces, so hard, and so soon . . . if this were a movie, I would wonder if this is all some carefully contrived plot to discredit the Rooseve . . . uh, I mean, Omaba.

As to Karl's central theme of capital baking, I think it might not be as simple and sure a check as he thinks, as the value of said collateral is demonstrably volatile, WAY more volatile than the models based on the last few decades take into account. Put another way, it does a bank NO good to get assigned a ton of real estate for collateral, when the value of that assets has been artificially bid up for 30 years, and there is just no Telling how deep it will over correct, or how long it will lie there.

Shorting the Market by Going Long the Dollar and Volatility

On Nov 25 01:47 PM bobbybutte wrote:

> Enjoy this author

Yeah, Mark's a class act.
I completely agree re both $US and volatility. The status quo canNot hold, and the least expected direction for change is the most likely.

More on AIG, Goldman and the Monolines

" (wow, is it really almost two years since the monoline insurer crisis?)"

Oh, author said a mouthful, there.
Older readers may remember with me an analogy here to the Watergate scandal. When the original break-in was reported the news started out on, I think it was page 6, and moved back from there. But a year and a half later, when other conditions had people good and mean, it was suddenly recognized (correctly, and belatedly, in my opinion) as something that could not be tolerated.

Bond Expert: I'm Moving On, With Thanks

So long, and thanks for all the fish.

When Free Markets Fail

Flawed premise.
The 'infuriating' concentrations of wealth and most especially Power, that the author refers to were Not created by "free markets" - they were created by government extending privileges to certain market participants that allowed them to maintain monopolies and oligopolies.
AT&T, the big auto companies, Big Steel, the railroads, NONE of these would have managed to maintain their concentration without application of federal favor.

The "gambling" analogy is a perfect example - the only reason that the "gamblers" enjoy net advantage is that we are bailing them selected big losers out, on the public dime! (not My definition of "free markets"!) Look at what happens to the ones who Don't get bailed out - T. Boone Pickens bet mightily on oil . . . . and LOST mightily! As is should be. likely be awhile before he is tht frisky again.

All the troubles described in the article are symptom of UNFrtee markets. Liberate them, and resume our march to the stars; or accept the chains, and surrender the bright future that should be our childrens' birthrite..

On the Limitations of Government

GOOD article.
I will take exception to one line, right at the beginning:
"Policy makers have been wildly successful in stabilizing the economy in the U.S. and elsewhere."
Just like the last depression, I suspect government action had nothing to do with it - markets stabilized when they chose to, with their own internal logic. As evidence of this, note that for all the Fed's intervention in mortgage markets, its impact is estimated to be only 50BP, And the 30 years is beLow when QE started. And I suspect that will be further demonstrated when the market punches through the March lows, and the Administration is handwaving twice as fast as last time, to no avail.

Roosevelt didn't end the troubles the last tikme; Bernanke did not end it this time.

Mortgage Backed Securities: What Happens When the Training Wheels Come Off?

50 BP doesn't sound like so much. Granted many banks are in pretty precarious positions to start with.

And I think that just because a risk is identified as political doesn't necessarily mean it is unquantifiable.

25 Reasons We Will Not Have a Depression

Completely ignores the mortgage reset issue.
Which is fashionable; seeing as we are only now exiting a trough season for these resets, it has faded from their consciousness.

Dorm, don't need a black swan, all the pieces are not only already in place (in mortgages alone), but irreparable. It is a falling safe.

No Climate Bill This Year, Senators Say

. . . and isn't that about thee best news we've had in awhile?

Housing Starts Plunge in October

And October was in a 'trough' month for resets!
Going to be a gruesome winter.

Chance of a Depression Now 5 Percent

Man, this is like something Straight Out of one of Prechter's books: recession will first be denied, then grudgingly agreed to be ending promptly, then admitted to be present and ongoing, but moderate, then severe . . . and then the "D" word will appear, first in strident denials, then in statistical discussion.

The thing about the Depression Beast is, most don't admit it's here until it has already eaten them.

Bounce, Crackle and Pop: Seven U.S. Metro Housing Markets Fall Below March Lows

While not a surprise to me, I have to say, the impact of the reality exceeds my expectations.
Geez, but those are Savage looking charts!