What the !@#$ Just Happened Here?

[Dwight Drane]

Thanks for reaffirming that you haven't a clue on anything other that what you've been taught to rotely trade. Maybe someday someone will explain to you how bank capital works.

 

Don't worry.....it's too late. System is dead. I lurned that a while ago. Although I guess it must have been obvious.

 

Maybe someday we can sit down and have a beer....and you can teach me the SEC or NASD or Wharton school code...whatever the hell you do, and I'll show you how to grill possum. Us unedukatid types are real good at possum grillin!!

[Magox]

Well we're getting $1.9b interest back in addition to the principal. Not great but...better than pissing it down a black hole like, ahem, a phony war.

Really?

 

What about the $150 B that has been given to AIG or the $52 B to Citigroup or the $45 B to BAC?

 

Ya that $1.9 B is looking really good isn't it?

 

Talk about black hole

[Kelly the Dog]

Then why the paragraph on how the evil bankers are the ones who got the people in the mess? Plus, much of the list of your described evils wasn't conducted by the big banks, but by the guys in the neighborhoods and the local community organizers.

 

1] The paragraph on the evil banks was not only a response to DC's post, but a simple explanation of why I thought they were evil and 1/10th of the problem. i could write a similar paragraph, with different evils, for each of the others.

 

2] Like above, the guys in the neighborhoods and local community organizers get their own paragraph on their own evils. That said, if I HAD to assign percentage blame, I'd likely put the poor near the bottom, even though they benefited as much or more than anyone. Kinda like blaming a kid for eating too much candy he knows is bad for him but his mother keeps handing him and lays out in huge buckets all over the house like every day is Halloween.

[IDBillzFan]

Well we're getting $1.9b interest back in addition to the principal. Not great but...better than pissing it down a black hole like, ahem, a phony war.

I agree. In fact, I think we should take that $1.9B and add it to the $634B we're spending for a phony health care plan that has no plan. Or we should throw in it at GM or Chrysler so they can launder it to the UAW before the BKs are done. Or maybe we can do some phony testing of grape genetics. Or volcanic activity. Yeah. Let's get some phony jobs going funding phony studies. Why, now that I think about it, I'll bet that $1.9 B saved or created another 150,000 jobs that can't be tracked. And we'll add that to the 600,000 jobs that will be saved or created this year. Yeah, the same ones that can't be tracked.

 

Oh, wait. What were you saying again? Oh, that's right. Duke Preston is a great center simply because he's not Melvin Fowler. Got it.

[Magox]

How quickly people forget the end of times. Basically if Fed & Treasury didn't step in aggressively, more financials would have been toast as many wouldn't be able to meet near term debt maturities and markets would have collapsed. Fed providing liquidity to the CP market was a help, but that was secondary to ensure that there were still banks that could issue CP.

I wouldn't say secondary. Remember, the purpose of TARP was to absorb losses and instill confidence to investors that the government was backstopping these banks, and that customers deposits were secure. The Fed as you know provided the structural help that was needed. The CP markets are vastly larger in terms of $'s than the total amount of money issued through TARP. The runs on banks had everything to do with short term funding, which was solved through the Fed.

 

We could argue which is more important and there is no definitive way to know, but I believe that TARP is a bad initiative, it enables failed business models to continue and that goes against my way of economic thinking. In my view, Businesses should be allowed to fail and this "too big to fail" BullSh*t is something that I don't buy into. That is why we have the FDIC and bankruptcy courts, which is to straighten things out in an orderly fashion when things go on the way side.

 

I don't doubt that in the short term, there would of been more economic damage, more job losses, further deterioration in stocks and etc. but the long term implications of TARP, with the tremendous debt we are accumulating, I believe are more harmful. Here in the U.S, we are fixated on solving our issues through short term initiatives that attempt to give us immediate gratification. The political will from our government has to be stronger than that, and make the tough, unpopular decisions that will help this country move in the right direction. Which I believe that this administration is not prepared to do or doesn't have the political moxy to follow through with.

 

The world would of not have ended, we would still be here today, and by allowing banks and other corporations with failed business models go under, we would of filtered out all these irresponsable and wreckless companies, and the companies that practiced prudent risk management would of had the opportunity to buy the assets off of these failed banks through the FDIC and in the long term we would be in a better place with responsable banks running the financial system.

 

Remember the "zombie banks" of Japan? TARP is very similar to the plan of the Japanese back some years ago. They recapitalized failed banks and many of the banks hoarded that money for years and they never really got back on track. These "zombie banks" basically were kept alive on life support through government capitalization, but never lent freely, because of the toxic assets that they maintained on their balance sheets for years and the fact that housing prices in Japan have never come back to the levels of the late 80's. I'm sure you are familiar with the 2 lost decades of Japan right?

 

It didn't work for the Japanese, and it won't work well for us. As long as these banks are still holding large amounts of non performing assets, then they will not have the confidence to lend, not to mention that high unemployment rates will be a persitant dilimena that will be a thorn on the banking industries side for quite some time. Now that they suspended the "mark to market" accounting, which I believe is another bad move, because of transparency issues, because they won't want to have to book those tremendous losses because it could make them appear to be insolvent. I believe all it does is delay the inevitable.

[Dwight Drane]

Magox....I wish you were here over a year ago to add some common sensical commentary. I felt like William DaFoe in the last scene of Platoon on this board at times.

 

It still pains me to see people battle along party lines. Bush and Paulson set this up and handed the torch to this administration. They could have let the beast die, and we could have had a very painful few years of restructuring. Instead they protected their own interests. Now there is no turning back.

[Dwight Drane]

I agree. In fact, I think we should take that $1.9B and add it to the $634B we're spending for a phony health care plan that has no plan. Or we should throw in it at GM or Chrysler so they can launder it to the UAW before the BKs are done. Or maybe we can do some phony testing of grape genetics. Or volcanic activity. Yeah. Let's get some phony jobs going funding phony studies. Why, now that I think about it, I'll bet that $1.9 B saved or created another 150,000 jobs that can't be tracked. And we'll add that to the 600,000 jobs that will be saved or created this year. Yeah, the same ones that can't be tracked.

 

Oh, wait. What were you saying again? Oh, that's right. Duke Preston is a great center simply because he's not Melvin Fowler. Got it.

 

I didn't even see until now that the Supreme Court let the Chrysler deal go.

 

I think it's time to set up a rival government, sort of like the XFL. Sure it may fail, but at least we'd have some hot cheerleaders for a while.

[drnykterstein]

What the !@#$??

 

Ok, we give them money because if we don't the economy is going in the shiitter. Then six months later they give it back. Ok did they need it or not and how much money did we make on the transaction and when can I expect my check.

 

What part of the word "investment" do you not understand?

[Magox]

What part of the word "investment" do you not understand?

this is too easy.

 

ok, definition of investment is as follows: the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

 

what part of gaining a profitable return on your investment do you not understand? The money that went to AIG, GM, Citigroup, all gone, bye bye, money heaven.

[drnykterstein]

this is too easy.

 

ok, definition of investment is as follows: the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

 

what part of gaining a profitable return on your investment do you not understand? The money that went to AIG, GM, Citigroup, all gone, bye bye, money heaven.

 

you are right, it is too easy.

 

how much taxes per year you think those companies and their affiliates and employees pay?

[drnykterstein]

Someone make a thread on this.. Obama gave a speech today announcing his submission his Paygo bill to congress. How do you dummies feel about this. I'd love to see how you and the fake news agencies out there spin this to be a bad thing.

 

(i'm sick of making threads but someone should make a thread to discuss this)

[Alaska Darin]

Someone make a thread on this.. Obama gave a speech today announcing his submission his Paygo bill to congress. How do you dummies feel about this. I'd love to see how you and the fake news agencies out there spin this to be a bad thing.

 

(i'm sick of making threads but someone should make a thread to discuss this)

It's going to end up a smoke and mirrors game just like "PAYGO" was before it was repealed. On the surface, it sounds good. Practically, they'll use ridiculous projections to up spending even further.

 

But you'll buy it hook, line, and sinker.

[GG]

Magox....I wish you were here over a year ago to add some common sensical commentary. I felt like William DaFoe in the last scene of Platoon on this board at times.

 

It still pains me to see people battle along party lines. Bush and Paulson set this up and handed the torch to this administration. They could have let the beast die, and we could have had a very painful few years of restructuring. Instead they protected their own interests. Now there is no turning back.

 

And I feel like Bill Murray in Groundhog Day waking to Sonny & Cher every morning with you clowns. The very painful few years would have included a massive meltdown of the global economy in a matter of months, if not weeks as the dominoes kept on tumbling. Amazing how memories are short and that you & Magox agree. Learn the fundamentals of how finance & capital requirements work, then start criticizing it.

[GG]

I wouldn't say secondary. Remember, the purpose of TARP was to absorb losses and instill confidence to investors that the government was backstopping these banks, and that customers deposits were secure. The Fed as you know provided the structural help that was needed. The CP markets are vastly larger in terms of $'s than the total amount of money issued through TARP. The runs on banks had everything to do with short term funding, which was solved through the Fed.

 

We could argue which is more important and there is no definitive way to know, but I believe that TARP is a bad initiative, it enables failed business models to continue and that goes against my way of economic thinking. In my view, Businesses should be allowed to fail and this "too big to fail" BullSh*t is something that I don't buy into. That is why we have the FDIC and bankruptcy courts, which is to straighten things out in an orderly fashion when things go on the way side.

 

I don't doubt that in the short term, there would of been more economic damage, more job losses, further deterioration in stocks and etc. but the long term implications of TARP, with the tremendous debt we are accumulating, I believe are more harmful. Here in the U.S, we are fixated on solving our issues through short term initiatives that attempt to give us immediate gratification. The political will from our government has to be stronger than that, and make the tough, unpopular decisions that will help this country move in the right direction. Which I believe that this administration is not prepared to do or doesn't have the political moxy to follow through with.

 

The world would of not have ended, we would still be here today, and by allowing banks and other corporations with failed business models go under, we would of filtered out all these irresponsable and wreckless companies, and the companies that practiced prudent risk management would of had the opportunity to buy the assets off of these failed banks through the FDIC and in the long term we would be in a better place with responsable banks running the financial system.

 

Remember the "zombie banks" of Japan? TARP is very similar to the plan of the Japanese back some years ago. They recapitalized failed banks and many of the banks hoarded that money for years and they never really got back on track. These "zombie banks" basically were kept alive on life support through government capitalization, but never lent freely, because of the toxic assets that they maintained on their balance sheets for years and the fact that housing prices in Japan have never come back to the levels of the late 80's. I'm sure you are familiar with the 2 lost decades of Japan right?

 

It didn't work for the Japanese, and it won't work well for us. As long as these banks are still holding large amounts of non performing assets, then they will not have the confidence to lend, not to mention that high unemployment rates will be a persitant dilimena that will be a thorn on the banking industries side for quite some time. Now that they suspended the "mark to market" accounting, which I believe is another bad move, because of transparency issues, because they won't want to have to book those tremendous losses because it could make them appear to be insolvent. I believe all it does is delay the inevitable.

 

Way to miss the target, again. Go ahead and run a scenario where within a week, LEH, AIG and Merrill fail, followed by Morgan Stanley, Citi and BoA the next week. Then imagine most of corporate America holding up payroll for two weeks until they got their cash situation straightened out. If you can manage without a paycheck for two weeks, while your credit card is shut off, then you can teach me all you want about zombie banks.

[BillsFan-4-Ever]

OR they realized they couldn't just screw or deceive or rape the public by their excess nearly as much as they wanted to.

good point.

As long as any bank owes TARP money they are limited on what they can spend $$ on, be it salary, bonus or "weekend excursions" to half million dollar spas.

[Magox]

Way to miss the target, again. Go ahead and run a scenario where within a week, LEH, AIG and Merrill fail, followed by Morgan Stanley, Citi and BoA the next week. Then imagine most of corporate America holding up payroll for two weeks until they got their cash situation straightened out. If you can manage without a paycheck for two weeks, while your credit card is shut off, then you can teach me all you want about zombie banks.

Not buying it! Sounds like the same fear Horse Sh*t that we were spoon fed back some months ago.

[bills_fan]

Way to miss the target, again. Go ahead and run a scenario where within a week, LEH, AIG and Merrill fail, followed by Morgan Stanley, Citi and BoA the next week. Then imagine most of corporate America holding up payroll for two weeks until they got their cash situation straightened out. If you can manage without a paycheck for two weeks, while your credit card is shut off, then you can teach me all you want about zombie banks.

 

 

Two weeks...if they are lucky! Try two months. And, oh, BTW...that saving account you had, FDIC insured...well the FDIC is now broke and the bank went under, so good luck accessing your savings.

 

Not buying it! Sounds like the same fear Horse Sh*t that we were spoon fed back some months ago.

 

Correct, you're not buying a damn thing cause you have no money and no access to money. Hope you have some cash in the house, cause thats all you have to buy the basics before the supply chain dries up because various components on the chain have not gotten paid.

[GG]

Not buying it! Sounds like the same fear Horse Sh*t that we were spoon fed back some months ago.

 

What in the world are you talking about? I'm referring to the weekend of Sept 12-13, when the financial world stopped working. That was not fearmongering but a real life test.

 

You do recognize that the situation started because Paulson miscalculated by thinking that the market could absorb a Lehman collapse? Don't take my word for it, but look at any fixed income index from Sept 14 to Oct 30 and tell me that it was driven by fear mongering or real concern that the markets would implode.

[Magox]

What in the world are you talking about? I'm referring to the weekend of Sept 12-13, when the financial world stopped working. That was not fearmongering but a real life test.

 

You do recognize that the situation started because Paulson miscalculated by thinking that the market could absorb a Lehman collapse? Don't take my word for it, but look at any fixed income index from Sept 14 to Oct 30 and tell me that it was driven by fear mongering or real concern that the markets would implode.

It wasn't just Paulson but Bernanke as well. Also, why is it that Lehman went under? When was the CPFF initiated from the Fed? Did Lehman have access to it? Did lack of liquidity in the CP markets lead to runs on money markets and money market mutual funds? Did short term and long term CP rates spike as a result of it? Did this play a role in making it more difficult for households and businesses receiving credit? Did these fears snowball into serious questions of the banking industry?

 

All this coincides within the time frame that you provided up above. Coincidence?

[Chef Jim]

Someone make a thread on this.. Obama gave a speech today announcing his submission his Paygo bill to congress. How do you dummies feel about this. I'd love to see how you and the fake news agencies out there spin this to be a bad thing.

 

(i'm sick of making threads but someone should make a thread to discuss this)

 

In my cynical world PAYGO will turn into TAXGO. Instead of spending what they've got they'll just raise the revenue to fund what they want. Voila, instant balanced budgets.