What the !@#$ Just Happened Here?

[GG]

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?

 

I know you have a hard time explaining concepts that don't include irrelevant links to WSJ, but answer one question - did all the things you refer to above, happen before or after September 13, 2008?

[Magox]

I know you have a hard time explaining concepts that don't include irrelevant links to WSJ, but answer one question - did all the things you refer to above, happen before or after September 13, 2008?

And I see how you sidestep my questions. Listen meathead, I know that there was a systemic failure that occured, no one is disputing that, what I am telling you is the Fed's initiative of the CPFF played a more stabilizing role to the banking sector than the TARP.

 

Answer me just one question, ok, why did Lehman go under?

[drnykterstein]

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.

 

Lol, well I think that is exactly what the legislation is intended to avoid. You have to cut spending on some other program in order to pass some spending. But I think that Taxgo program has been the standard for years. I saw some disturbing graph not to long ago.. let me see if I can find it...

 

http://correspondents.theatlantic.com/cono...ke_part_two.php

[John Adams]

The only person calling me a prophet is yourself and Adams.

 

You should have sold those puts....you'd be up 60%.

 

You may the predictions. We just tell you when you get them all wrong.

 

 

Punxatawny Phil is more accurate than you.

[GG]

And I see how you sidestep my questions. Listen meathead, I know that there was a systemic failure that occured, no one is disputing that, what I am telling you is the Fed's initiative of the CPFF played a more stabilizing role to the banking sector than the TARP.

 

Answer me just one question, ok, why did Lehman go under?

 

Oh I don't know, maybe because the CPFF covered more companies than just the financial sector? Commercial paper isn't just issued by financial companies. Maybe when you can understand that, you can provide an answer that doesn't require a WSJ link. You also seem to ignore that the original concept of the TARP was to take the illiquid assets off the banks books, which is precisely the opposite of the construct of zombie banks, where bad assets live forever.

 

But I wouldn't expect you to pick up on that nuance.

[Chef Jim]

Lol, well I think that is exactly what the legislation is intended to avoid. You have to cut spending on some other program in order to pass some spending. But I think that Taxgo program has been the standard for years. I saw some disturbing graph not to long ago.. let me see if I can find it...

 

http://correspondents.theatlantic.com/cono...ke_part_two.php

 

Distrubing in right. See that uptick at the end of the graph? That's from the guy you have a man crush on.

[Magox]

Oh I don't know, maybe because the CPFF covered more companies than just the financial sector? Commercial paper isn't just issued by financial companies. Maybe when you can understand that, you can provide an answer that doesn't require a WSJ link. You also seem to ignore that the original concept of the TARP was to take the illiquid assets off the banks books, which is precisely the opposite of the construct of zombie banks, where bad assets live forever.

 

But I wouldn't expect you to pick up on that nuance.

ummm

 

how many illiquid assets have been taken off the banks balance sheet because of TARP?

 

Since you are not able to answer any of my questions, I will answer it for you, NONE!!

 

Also, what have we done with TARP funds? Again, I will answer it for you, We've recapitalized banks with parts of it. What was the plan of the "zombie banks" of Japan? , that's right genius, recapitalization of banks.

 

Also, CPFF did cover more than the financial sector, so what is your point? again, None, if anything it bolsters my argument even more so .

 

way to deflect, but thanks for playing

[drnykterstein]

Distrubing in right. See that uptick at the end of the graph? That's from the guy you have a man crush on.

 

Ya I know.. (although half of that uptick is Bush's TARP). The difference between me and you is that I'm fully confident it will go down, probably lower that where it started.

[Chef Jim]

Ya I know.. (although half of that uptick is Bush's TARP). The difference between me and you is that I'm fully confident it will go down, probably lower that where it started.

 

How?

[bills_fan]

ummm

 

how many illiquid assets have been taken off the banks balance sheet because of TARP?

 

Since you are not able to answer any of my questions, I will answer it for you, NONE!!

 

Also, what have we done with TARP funds? Again, I will answer it for you, We've recapitalized banks with parts of it. What was the plan of the "zombie banks" of Japan? , that's right genius, recapitalization of banks.

 

Also, CPFF did cover more than the financial sector, so what is your point? again, None, if anything it bolsters my argument even more so .

 

way to deflect, but thanks for playing

 

 

Why have the "illiquid" assets not been taken off the banks balance sheets?

[Ramius]

How?

 

Duh. Because of Obama. If you can't simply look and see that we are on the verge of a world full of lollipops and rainbows and unicorns, where everyone lives happy and perfect (while making $249,999 per year because anymore and you turn into an evil "rich" person) then i feel sorry for you.

[Chef Jim]

Duh. Because of Obama. If you can't simply look and see that we are on the verge of a world full of lollipops and rainbows and unicorns, where everyone lives happy and perfect (while making $249,999 per year because anymore and you turn into an evil "rich" person) then i feel sorry for you.

 

I see. And what does the world of those making $250,000 and above look like?

[Magox]

Why have the "illiquid" assets not been taken off the banks balance sheets?

They havn't been taken off the banks balance sheets for a few reasons. One is pricing. If the banks accept a price that is too low, then they would officially be booking tremendous losses, which WOULD cause some of these banks to be rendered insolvent. If the banks received above market value, then the government would be overpaying and would effectively be holding on to this trash, which could take a very long time to unload, and in many cases, would be taking a loss.

 

Two is the cost, once they figured out that the cost would exceed $700 Billion by a LONG SHOT, they abandoned this plan, they (the Treasury, government) knew that it was very tough to get political support for the $700 Billion, just imagine if they would of had to have asked for $2 Trillion, which is what the estimates were for these "toxic assets".

 

Let's remember, the original plan of the TARP was to buy these "toxic assets". If we didn't buy these "toxic assets" then the world would of fallen apart. How quickly we forget.

 

They didn't follow through with the original plan because of the reasons I mentioned up above, and that is when they made a quick 180 degree turn and decided to recapitalize the banks. Remember? This initself is telling of how irrelevant TARP is, because the whole intended plan was never implemented.

 

Those "illiquid assets" what are they doing right now?

 

Just sitting there. Remember just a few months ago they came out with their Toxic asset plan? What has happened to that? They are stalling on that plan, because there is a lack of demand for these assets. I wonder why? could it be that no one wants to do business with the government? hmmm Could it also be that banks know that they won't get the value that they are looking to receive on many of these toxic assets?

[Ramius]

I see. And what does the world of those making $250,000 and above look like?

 

From what i've been told, the evil "rich" people making $250k or more spend their days in luxurious overindulgence, spas, vacations, private jets, etc, burning their wads of $100's for heat, keeping the little guy down.

[DC Tom]

Ya I know.. (although half of that uptick is Bush's TARP). The difference between me and you is that I'm fully confident it will go down, probably lower that where it started.

 

Obama's going to buck a 70-year trend of government spending growing more decade-to-decade than the GDP?

 

You honestly think Obama can turn around that much bureaucratic inertia?

[DC Tom]

From what i've been told, the evil "rich" people making $250k or more spend their days in luxurious overindulgence, spas, vacations, private jets, etc, burning their wads of $100's for heat, keeping the little guy down.

 

Why burn money for heat, when we can just take the yacht down to our private Caribbean island?

[Chef Jim]

From what i've been told, the evil "rich" people making $250k or more spend their days in luxurious overindulgence, spas, vacations, private jets, etc, burning their wads of $100's for heat, keeping the little guy down.

 

......and loving it!

[GG]

They havn't been taken off the banks balance sheets for a few reasons. One is pricing. If the banks accept a price that is too low, then they would officially be booking tremendous losses, which WOULD cause some of these banks to be rendered insolvent. If the banks received above market value, then the government would be overpaying and would effectively be holding on to this trash, which could take a very long time to unload, and in many cases, would be taking a loss.

 

Two is the cost, once they figured out that the cost would exceed $700 Billion by a LONG SHOT, they abandoned this plan, they (the Treasury, government) knew that it was very tough to get political support for the $700 Billion, just imagine if they would of had to have asked for $2 Trillion, which is what the estimates were for these "toxic assets".

 

Let's remember, the original plan of the TARP was to buy these "toxic assets". If we didn't buy these "toxic assets" then the world would of fallen apart. How quickly we forget.

 

They didn't follow through with the original plan because of the reasons I mentioned up above, and that is when they made a quick 180 degree turn and decided to recapitalize the banks. Remember? This initself is telling of how irrelevant TARP is, because the whole intended plan was never implemented.

 

Those "illiquid assets" what are they doing right now?

 

Just sitting there. Remember just a few months ago they came out with their Toxic asset plan? What has happened to that? They are stalling on that plan, because there is a lack of demand for these assets. I wonder why? could it be that no one wants to do business with the government? hmmm Could it also be that banks know that they won't get the value that they are looking to receive on many of these toxic assets?

 

Hey you can read, but you still can't comprehend. Perhaps you can explain why you slam the design of TARP to take illiquid assets off the banks' books and then complain about the existence of zombie banks Of course, everyone knew of the mismatch in pricing of the assets, but that's not the main point anyway. The CPFF would have never seen the light of day if TARP wasn't approved, because market confidence would have been gone. CPFF addressed a specific funding source, it didn't address the immediate threat of the collapse of the entire financial system.

 

Your point is like arguing that Terrell Owens catching a TD pass is more important than the OL giving Trent more than 5 seconds to complete the throw.

[Magox]

Hey you can read, but you still can't comprehend. Perhaps you can explain why you slam the design of TARP to take illiquid assets off the banks' books and then complain about the existence of zombie banks Of course, everyone knew of the mismatch in pricing of the assets, but that's not the main point anyway. The CPFF would have never seen the light of day if TARP wasn't approved, because market confidence would have been gone. CPFF addressed a specific funding source, it didn't address the immediate threat of the collapse of the entire financial system.

 

Your point is like arguing that Terrell Owens catching a TD pass is more important than the OL giving Trent more than 5 seconds to complete the throw.

Why I slam the design of TARP to take illiquid assets off the banks' books then complain about the existence of zombie banks? HUH

 

Which TARP are you talking about, the intended or the actual one? The intended one wasn't well thought out, because of pricing issues. There were major miscalculations on the estimates of how much they would cost, the willingness of banks to accept the prices the government was prepared to offer them, and major miscalculations of how the public would accept this bill.

 

In regards to the ACTUAL TARP, which is what it is really about isn't it? This plan is pretty much the same plan in regards to the banking industry as that of the Zombie bank plan of Japan, now isn't it? And if you disagree, please enlighten me how it differs.

 

In regards to your ludicrous statement of the CPFF

 

Really? hmm, last I checked the Federal Reserve is an independent government institution. they don't need the authority of the administration to make their decisions.

 

You still didn't answer my question, as always. What led to the demise of Lehman? I mean you originally brought them up, so, what happened?

[TPS]

Why I slam the design of TARP to take illiquid assets off the banks' books then complain about the existence of zombie banks? HUH

 

Which TARP are you talking about, the intended or the actual one? The intended one wasn't well thought out, because of pricing issues. There were major miscalculations on the estimates of how much they would cost, the willingness of banks to accept the prices the government was prepared to offer them, and major miscalculations of how the public would accept this bill.

 

In regards to the ACTUAL TARP, which is what it is really about isn't it? This plan is pretty much the same plan in regards to the banking industry as that of the Zombie bank plan of Japan, now isn't it? And if you disagree, please enlighten me how it differs.

 

In regards to your ludicrous statement of the CPFF

 

Really? hmm, last I checked the Federal Reserve is an independent government institution. they don't need the authority of the administration to make their decisions.

 

You still didn't answer my question, as always. What led to the demise of Lehman? I mean you originally brought them up, so, what happened?

My few cents:

I agree with one of your initial statements that it has been expansion of the Fed's balance sheet as LoLR that has mainly stabilized the financial sector; TARP was enacted after weathering the worst of the crisis. The biggest chunk of it has been given to AIG and used as a pass-through to help (mainly) the two remaining finance titans who provide most of the "expertise" at the Treasury...

 

I'd say Paulson abandoned the original idea for TARP because every sane economist was publicly criticizing it as a giveaway of taxpayer money and calling for direct public investment/nationalization.

 

Lehman went under because P&B denied them access to funds to weather the liquidity squeeze. I'm sure there was no conflict of interest there....