Dwight Drane

Quick chime in here.. East Brady..I like the Jefferson quote. Just because we haven't woken up homeless and without property just yet, doesn't mean that it won't happen in the future...in the near future. The Texas diatribe wasn't helping the case though. DC is right, the Fed is lending for now, but they have been changing terms on all sorts of things lately. First it's 28 days, then 90 days...before you know it, it will either not be expected back, or interest will be forgeven, since it is almost forgiven right now anyway. The question of the swaps on the JP Morgan balance sheet really doesn't matter in the big picture. The rules are being suspended on them, which is why I was upset with the Bear transaction in the first place. Every other rule is up in the air right now, yet they hold Bear to them, and the talking points in the media the next day were "Don't you think bad management shoul dbe punished? How irresponsible for Bear to not have a read on their liquidity!".....problem is, most places don't know what they hold right now.

The Fed didn't make an earth-shattering, hundreds of billions of dollars decision on a Sunday night, chosing who lived and who died in a span of 12 hours during the S+L crisis. Assuming my only play was buying out of the money puts on banks, you have a valid arguement to say it is a sucker's bet. Me betting on the end of the system would be like betting someone that the end of the world will happen by a certain date. I could never collect. Sure, I may cash in 40x on some contracts, but the stock market would probably close for weeks along with the banks, who knows if the contract is still valid, who wrote it, if my clearing house is still in business, if the FDIC is still in business, etc. That is why you trade what you see happening and invest in what you know is happening. I am a value guy all the way, which is why I sort of disdain the credit bubble itself. You can still bet against the Fed. Volatility is going to be up not just in the markets, but in the world current events. Desperate times require the measures as well. Now it's time to look at the next chain of events since this one is starting to really roll now.

If everything went down, I would be in trouble since most of my profits are tied into our accounts. It doesn't matter. Sometimes you just have to sit there and take a good a$$whooping. What has happened leaves me much in the same emotional state as homerun throwback. As the play was happening, I didn't care because I knew a flag was on the field. Then when there wasn't a flag I was sort of nervous, but figured it had to be reversed by replay. After it wasn't reversed, I couldn't believe it. The fact that it wasn't reversed in itself wasn't the shocking thing, it was the progression of events, starting with the fact that a flag would probably be thrown on that play 90% of the time. It is a close call, but you are forced to accept the 10% of the time that it plays through. PS...it is what it is. Tennessee thinks they are right, Buffalo fans think they got jobed, both points are valid given the chain of events.....everyone lost in the end anyway.

I have made plenty of bad trades in my life. You could say a good trade was losing 60 of the 100 contracts at the close yesterday with the Fed coming up. You can't see any other reason I am not breathing a sigh of relief because you value money over ethics. I am not saying that is the wrong decision for you, but it is for me. Yesterday was another "wizzard behind the curtain" moment, that's all. You can argue actions were taken in the best interest of the country at the time, but it was totally against the spirit of free markets and free will. The speakeasy avoided the raid for this weekend.

What do you do for a living.....I know you have a good economics background, but are you a teacher or do you work for the government?

No...everyone should suffer, or nobody should suffer. If we are all walking to the park on our own in the rain, and a bus pulls up to let us all on, I don't expect the driver to decide who pays and who gets on for free. If the bus has room, take everyone on. Or, don't send the bus and let the kids learn that walking in the rain because you want to play will get you pneumonia. Sure, it will cost you more and take more effort to take the kids to the doctor and the hospital afterwards....but sometimes you just have to let someone learn on their own.

Good point. This is the second major event that has led me away from the Republicans. I used to donate and defend...until Katrina happened. I have still trended Republican in ideas, or almost Libertarian....you know, don't tell me what to do or think, and trust me to know what is best for my own good. Instead a person who is ahead of the curve and makes what should be sound decisions ends up getting punished in the end. How can you do the rah-rah to the flag BS when you don't defend the pricipal of free will at it's most important juncture? That is what it is all about.....own it like a man. It's pretty much an integrity issue I guess. Just don't set expectations too high.

No, the bankruptcy court would value their swaps at zero, and blow up the entire system. It wasn't fair that they sliced Bear up, then opened funding to everyone else. Why is the stock trading up? Now that the banks got a pacman power pellet from the Fed and turned the ghosts blue for the next few weeks, cooler heads can prevail and maybe Bear does go through court. The Fed either 1) Handed Bear over with bad intent 2)Paniced themselves by rolling over for JP Morgan 3)Are idiots.

How about it's "Richard Zednik skating back to the bench holding his throat". VISA went public today as well. Of course firms are going to extend and expand offerings if they can get things done. What is the level of traditional offerings on whole as opposed to what has been done the past 6 or so months? I don't know how people can say to tone down the drama when it was admitted to the market yesterday that the entire US financial system would have been destroyed if Bear was allowed to go bankrupt. The fact that people laugh it off shows just what an American Idol, 2 hour attention span we have.

It wasn't a bailout. Bear was commandeered by the Fed. It looks as if none of the big banks will be allowed to fail. Some small funds will blow up, some bigger institutions will be merged with an oncologist from the Fed doing surgery as the tainted institution is handed over to a government friendly firm, and the public will suffer in the form of continued foreclosures and a dollar that continues to do tricks. The line has been drawn now. It doesn't mean that things will be easy.

It isn't overdramatic. The system is dead. There is no answer to the credit swaps as of yet, other than make sure an obligated major party doesn't go bankrupt, as this would mean that by definition of the SEC rules, firms holding that paper would have to write it down to zero. That would have forced a system margin call on almost every institution by the time the dominoes fell. The same thing will happen if MBIA or AMBAC were allowed to have their credit ratings dropped. By rule, most funds and pensions would have to sell every bond that is insured by these parties, and there would be nobody there to buy them. Again, we all go to zero and the system crashes. I'll give you some examples of the crisis that have been going on, just in my little world. I manage some money for a private hedge fund. My specialty is microcap stocks, but I am just a small piece of the puzzle. 1) There are no bids on junk bonds. Things that you could sell for $.90 on the dollar a few years ago are technicaly worthless. This has something to do with residential subprime, but it has backlashed to commercial properties, solid corporations, and even government obligations. These have real value, but nobody has the cash to buy them, or the stomach to sort them out even if the have funds. 2) AAA bonds have a very limited market, and new issues aren't getting done. Bonds that should be worth par are getting bids in the 30's. The investment banks can't get enough together to float projects. There has been a run on many of the AAA bond funds and money markets.......which leads me to...... 3) Some AAA funds will not allow you to retrieve your cash. The most secure paper out there, and because people need money but there are no real bids on these bonds, funds can't raise the cash to meet clients' needs. A company that we are invested in has been trying to get their money out of a few of these funds since the first of the year, and have received less than half of their request. This is a company that has no debt, and lists these funds as short term investments on their balance sheet. What should they report as the value of these investments? 4) Since there is no market on most debt, funds do not know how to value things. Is a AAA really only worth 30 cents? That implies almost a 20% long term interest rate. Since things are not being traded, the values are subjective, and inflated. If the regulators were sent in to act like they do during a regular period, they would be marking values down left and right, forcing margin calls and liquidations. While the institutions that lend money to the hedge funds look at the implicit value of the assets used as colateral and want to vomit, and the banks that lend these institutions the money to lend to the funds want to shoot themselves when they look at the books........NOBODY WILL LOWER THE VALUES ON ANYONE BECAUSE EVERYONE WOULD GO OUT OF BUSINESS TOMORROW. The only reason Bear went out was because everyone pulled out and even fudging the numbers couldn't help anymore. Lehman Brothers was at the same point, but the powers that be threatened to limit rescues of anyone who pulled out of Lehman yesterday. There has been a huge cashflow into some firms the past two days thanks to the Fed "lending" against some of the worthless paper. It will not last, because new lending cannot happen fast enough to beat the global slowdown 5) A major bank (cough-DC Tom's relative-cough) has been selling hard assets like buildings and selling certain departments in order to meet the need for working capital. They are one of the giants in the swaps market, and just had another batch of internal writedowns this week. $12 billion in paper wealth can go Poof! with a click of the mouse. There are so many swaps in different departments of some of these banks, that they have no idea what they own, or what they are worth. 6) The FDIC started shopping pools of mortgages to some smaller firms that have never been included in the bidding of some of these sweetheart deals before, because the bigger banks that usually are the first middleman are too tapped to help. This means that there are other big banks either ready to go out, or are walking dead already. The first 4 things have been going on for months, but the last few weeks the disaster started to unfold. The Fed has made the decision to not let the system crash, but they are going to have to keep printing money. I am a value investor, but I am in gold and oil. I won't play the commodities themselves, but through traded companies. I bought some railroads as well today. I still have money in my regular small names, but with index prices flying back and forth, I have played more stock options the past 3 months than I have my entire life. I am not levered much personaly, but the fund could blow up at anytime, along with everyone else. I really feel there will be a full-fledged war in the Middle East by the summer as well. Throw that on top of the housing, the economy in general, and the banks, and this is not going to be a blip on the radar for anyone. I am a cynic and look for faults in everything, but even cold-blooded optimist pros were jaw-dropped on Monday.

The biggest reason to have old posts on hand are so you can look at somebody's previous posts if there is a debate going on. It comes in handy to catch someone flip-flopping or just plain lies. There have been some pretty good zingers going back and forth, and someone's history can prove vital. I was pretty sure I was talking to the same person yesterday that I warned over a month ago that some huge banks were going to fail, only to be scoffed at....but he denied that he was the one who said it. I had no proof, so I said I'm sorry and let it go. Is integrity of the board worth $200....probably not.

Citi is in tough. They have some of the exact same problems, but are more diversified and haven't had a run on them. Their credit swaps keep getting marked down as well. The government still hasn't decided what to do about these. They are going to have to make them disappear somehow, or else there WILL be another Bear, and fast. On the issue of the Government and the Fed stepping in, I understand it. It takes almost a religious man to stand back and allow self-destruction because of free will. By stepping in however, I now view the Iraq war as a sham. I now view "capitalism" as a sham. We have reached a testing point in the economy never seen before, and true colors were shown. I used to view Democrats as the bigger hypocrites....they would say they are for the good of the people, but would line their pockets in the back rooms. I thought Republicans were at least honest enough to say up front they were going to line their pockets through policy. I respected the honesty. But by stepping in and changing the rules of the game, and deciding who is ruined and who isn't......Capitalism just proved that it doesn't work. We've seen Marxism fall apart, we've seen Tyrants go down, but we are no better. The idea was great, but in the end, human nature is selfish no matter what. I have no reason to pout. We dodged a nuclear bomb as a people and immediate suffering has been contained. The poor people at Bear probably want to see some heads on a platter. If the Government opened their window 24 hours before, none of this would have happened. Hell, they could probably put Bear back out there right now. The spin is, Bear had bad management and deserved to go under. The truth is, if we really enforced debt values by the books of the SEC, every major firm would have to take a haircut so big, that the game is over. Think of these swaps as Baseball Cards. Your Beckett may say that your 1985 Roger Clemens rookie card is worth $50....but the guy at the corner shop says he's not interested in it. He's not interested at $50....he's not interested at 50 cents. That is how bad it is. One of my best friends is Lebaneese, and comes from a powerful family in Lebanon. He told me a story of how his father invested in a big factory in Iraq. He partnered with a few others that had an in with the old Iraqi government, and built up a business from scratch over the course of a few years. He invested a quarter of his net worth. Once all the capital improvements were in and product was ready to roll....Sadam called in the guards to seize the factory. When the US first went in to Iraq 5 years ago, my friend felt horrible that we were fooling with the region as he is Muslim. He also understood first hand about the tactics used by Saddam, and there were no tears shed for his departure. I can only think of that story, as I'm sure Jamie Dymon was smoking a big fat stogie, and firing a rifle off his balcony after the Fed helped him fleece Bear Stearns. Either let all fail, or let none fail. Trust me, I usually cringe when I read a bunch of the liberal schmaltz here.......but for once they may actually be right. For the past 36 hours, they are the lesser hypocrites. I need a Beer, or 10!!!

MARGIN CALL!!!! Don't think the NFL is untouchable with all the crap debt out there. You will be hearing rumors for months of troube from all corners. It doesn't matter how good your asset is, it is all about who the loan party is and who has enough jack to take on a loan in a hurry.

Front page of NY Daily News. Questions about state funds for hotel use. It may blow over, but who knows anymore. Next! Insert "I thought it was a -------" joke here.

Sorry, it stinks having the server crashed here. Just trust me, it's a disaster out there. If proper protocals were being followed, there would be the mother of all margin calls. I know a few guys here are in the financial industry. Anything in the trenches is walking on eggshells.

They are all fair game to go under if the Fed doesn't step in. The Fed says they are going to everything neccessary to protect the system. This means give loans on TRILLIONS of dollars of bad loans. Are you an investment bank holding a bad mortgage worth 30 cents on the dollar? Send it to us and we'll lend you a dollar for 28 days...I mean 90 days....I mean Forever. Now Bear is not getting bailed out, they are being commandeered by the Fed. JP Morgan stands to make profits, and will probably get to pick apart Lehman as well. That is the thing....many employees from Bear have no job and no savings now. If life was fair, the whole thing would blow up. Instead, the US can't let that happen, so they nationalize the sick institutions that can't make it through with their generous "loans". Trust me, every institution out there should really be out of business if the credit swaps market was held to truth. I still don't know how that will be solved in the longrun. As long as nobody panics, this will just be a painful drawn out process. If people start naming names, and stop doing business with places....it is a disaster that nobody wants to comprehend. I have puts on the 3 names I mentioned...Lehman, Citi and WAMU. Long term I have calls on Barrick Gold, ABX. They are the biggest gold mining corp and have no hedges going forward other than a financing deal. I am short the NASDAQ as a whole, but you have to be careful as the stock indexes inflate. The Dow can stay at 12,000 like it was over a year ago, but Gold is up 50% and the Dollar is down 30%. That is how your wealth gets whittled.

I'd like to know what makes you think those names are liquid? Sure, they are liquid for the next 6 hours. Look at Lehman options and they will tell you the story. April $10 puts were selling at $3 this morning when the stock was at $23. I believe you also told me two weeks ago that the economy was fine, the stock market rallied because stocks were cheap, and that there was only a total writedown of $200 billion for all of the banks. I was over-reacting when I said 1 or 2 major banks were on the verge of going under and there were going to be multiple firms with $100 billion+ writedowns.

Is the Fed going to save Lehman Bros, Washington Mutual and Citibank? If the regulators and rating agents were doing the same crack-up job with the big boys that they usually do in busting the little guy's stones, this thing would have blown up months ago. There is still no answer for the credit swaps market, other than moving it from a bye-bye firm's books to a solvent firm's books. While the Fed is at it, they might as well go all the way and inflate us to the point where they make Social Security solvent again. Sure, you'll get $25,000 a year when you are 65, but that will buy you a new bicycle to drive to your grandkids' house.

I am just as po'd. The honest, hard working person is being kicked in the groin. For all the talk of free markets, and conservative values, and morals...it is all down the crapper now. Michelle-Caruso-Cabrera lost the CNBC cheerleader voice for a moment today and blustered "We might as well put the hammer and the sickle on the flag today." The Fed was able to prevent a disaster for today, but there were still enough margin calls out there to let traders know this isn't going away anytime soon. The bond traders are just sitting back, drinking JD and talking to themselves. Who knows the number of dollars that have been pumped into circulation the past few weeks. If we don't see double digit interest rates this year, I'll be shocked.

I understand, but for $2, the threat has been made to let it go through the bankruptcy courts. The biggest shareholder in Bear just said the buyout won't go through. Hopefully the CIA didn't hear that, or else Mr Lewis better start wearing a vest. The financial sector is like a scene in an action movie where the cops and bad guys all have guns pointed at each other at close range. The problem is, the first to shoot has a good chance to live. Everyone needs to trust each other right now, and human nature leads me to believe that won't happen.

Here's a theory....Bear employees own 30%+ and a Mr Lewis just purchased 10% last year. What if they ban together and tell the Fed and JP Morgan "FU, we aren't taking $2......we want $XX and if you don't give it to us, we are voting down the buyout." They hold the whole financial world in their hands. What happens then? If they wait and are no good on the other end of swaps, the whole thing tumbles. Would the Fed force the transaction....would they sieze it? That sounds pretty much what happened already. It isnt so much a bailout as it is a siezure. They are bailing out everyone else by lending par against total junk. Crazy times....

A private company didn't come to the rescue. The Fed is taking all of Bear's bad debt. JP Morgan gets to pick at the carcas for all the goodies. The only thing risky that JP Morgan is taking on is a bigger credit swaps portfolio, but it doesn't matter, because JP Morgan will go under 10x over on it's own swaps if forced to keep marking down. I've been trying to warn people for months. Everything behind the scenes is a disaster. Nobody will buy from anyone anymore. In reality, it should be game over for the whole financial system. The game is 56-7 in the 4th quarter, and the Fed is stepping in and changing the rules, now saying touchdowns are worth 40 points, but only for the team that currently has 7 points. I have been a lifelong Republican, but if we even have an election in November, I'll have to vote Democrat. At least they are open about the fact they want a Socialist/Communist country.

You can't assume a trade. Even if so, Cason is going top #20 and Keller is going in the 1st if I had to guess. I like both of those guys. I came up with 1)Malcolm Kelly WR OK (now there are injury questions, but all our picks the past 2 years had injury questions) 2)Roy Schuening G ORE ST 3)Jermichael Finley TE TEX 4a)DeMario Pressley DT NCST 4b)Keenan Burton WR KY 5)Jamar Adams S Mich 6)Geoff Schwartz OT ORE 7)Simeon Castille CB ALAB Last year the only guy I hit was Schouman.

I really liked Thomas at the combine. Kelly didn't go, so it's tough to compare pure physical skills. I will say that I would put Thomas up in the late 1st to early 2nd. In reality, I think there will be a lot of duds in the WR class. I would feel comfortable taking Kelly at #11, but if the buzz is he is dropping for not working out yet, maybe you try to trade down to a point where Kelly, Thomas and Sweed will all be taken. I like Kelly from gamefilm and I really feel he is built and moves like a TO or an Eric Moulds. That is why I want him. After watching the top 15-20 prospects, he looks like a slam dunk. Guys like Hardy of Indiana and Jackson of Cal don't do much for me. Later round guys I like are Burton of KY and DJ Hall of Alabama. I admit I don't watch tons of college football, but I scout and run horses, which believe it or not is run just like the NFL combine. When you watch enough horse races and see enough horses, you learn what the good ones look like. You can say the same about football players. The same anatomy and motion applies for both sets of athletes. The biggest worry when looking at a player is whether or not they can hold up over time. How symmetric are their bodies and where can you expect wear. One of my biggest quams with Marshawn Lynch last year is the fact that he runs a little bow legged and will put pressure on his ankles. His college film would have scared me off. I don't expect him to be around 8-10 years from now and we probably should expect ankle and back injuries going forward. If he he can give you 12 good games a year for 5 years at the level he did in '07, then he was worth the risk. The good thing about Devin Thomas is that he is very fluid and doesn't waste much motion. He should hopefully give you longevity if picked. The only player that looked better at the combine was Dustin Keller.