Sunday, November 30, 2008
Saturday, November 29, 2008
Tuesday, November 25, 2008
“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.”
But he replied with this video, which is a tremendous take on the classic iconic 1980's A-Ha video: Take On Me. This is great stuff: The Take On Me Literal Video Version
Monday, November 24, 2008
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
Monday, November 17, 2008
Nov. 17 (Bloomberg)
Four of the world's biggest life insurers may acquire small banks that regulators have cited for improper practices to improve their own chances of getting cash from the $700 billion U.S. government bailout fund. Lincoln National Corp. and Aegon NV, owner of Transamerica Corp., may buy savings and loan companies in Indiana and Maryland whose methods were found to be ``unsafe and unsound'' by the Office of Thrift Supervision. Hartford Financial Services Group Inc. is acquiring a Florida lender that was told by the OTS in May to curb lending. Genworth Financial Inc.'s target got a ``cease-and-desist'' order tied to potentially fraudulent loans....Lincoln National plans to buy Goodland, Indiana-based Newton County Loan & Savings, which has $3.83 million of deposits, according to regulatory data, and no branches. The lender posted a $404,000 loss for the quarter ended June 30, according to FDIC data. Newton was ordered to halt certain types of mortgages without written approval from the OTS. Lincoln may qualify for as much as $3 billion from the Treasury, company spokeswoman Laurel O'brien said today
In "more enjoyable reading" news, Doctor Pauly has a few good posts about the far reaching effects of the economic downtown; even hookers in Vegas are feeling the heat. ""It sucks," she said. "Business is bad. No one has money. Shit, I might have to actually get a real job." Pauly's inimitable observations and masterful dealings with the pro's are a must read. In another post, Emissaries From the Land of Indulgence, he echos a sentiment that the Big Show and I commented on out loud on our last two trips: the Vegas game is over. The bubble has burst, and there will be a lot of pain to come. Especially if Michaelski is standing near you when you're gambling.
And speaking of good news, Pauly and Michaelski, Pokerlistings will once again be hosting both of them, along with yours truly, in the second coming of the Run Good Challenge series, starting this Sunday.
Friday, November 14, 2008
NEW YORK (Reuters) - Hartford Financial Services Group Inc, a property and casualty insurer beset by worries about capital levels, said on Friday it agreed to buy a small savings and loan, making it eligible to raise up to $3.4 billion from the U.S. government's bank bailout plan. An infusion may alleviate investor concerns about capital at Hartford, which suffered a $2.63 billion third-quarter loss, and last month raised $2.5 billion from German insurer Allianz SE. Shares of Hartford soared 20.9 percent on Friday, closing up $2.19 at $12.65 on the New York Stock Exchange.Hartford said it agreed to buy Sanford, Florida-based Federal Trust Corp, which operates the 11-branch thrift Federal Trust Bank, for $10 million. The insurer said it plans to recapitalize Federal Trust, and has applied to the federal Office of Thrift Supervision to become a savings and loan holding company.Hartford said the developments should allow it to sell $1.1 billion to $3.4 billion of preferred shares to the government under the Treasury Department's $700 billion Troubled Asset Relief Program.
"We are taking these actions as a strong and well-capitalized financial institution looking for maximum flexibility and stability," Chief Executive Ramani Ayer said in a statement.
I love this video from the Onion - you really have to appreciate how accurate a parody it is of these multi-panelist news debate shows:
In The Know: Should The Government Stop Dumping Money Into A Giant Hole?
My favorite is definitely the black lady: "My father worked two jobs so he'd have money to put in the money hole, and HE never complained!" and "If you love America, you throw money in its hole."
If you believe that people who took out mortgages they couldn't afford should have their outstanding loan balances reduced, well, then, you like Hitler:
Tuesday, November 11, 2008
"First of all, don't worry about the promises you've made to the government about dividend payments. When the going gets rough, just explain to the government that you can't afford to make them.
Second, don't worry about restrictions on bonuses. You'll be able to re-cut this deal later. Just tell the Treasury you'll lose your key people if you can't pay them well enough.
Third, don't worry about limits on dividends to shareholders. Simply claim that those restrictions are preventing you from raising necessary private capital.
Fourth, don't worry about restrictions on what you can do with the money. Don't make loans under pressure from the government. Don't sell off troubled businesses. Make acquisitions. Invest in Chinese infrastructure. These Treasury guys are spineless. They'll never stop you. What's more, government officials have no upside incentive to police you. This is basically unencumbered cash.
Fifth, there's always more money. Once the government has invested billions in your business, the marginal cost of adding additional dollars compared to the loss from your failure guarantees that you'll always be able to get more money from the government.
Congratulations to everyone on your future ability to re-cut the deal with the government. And when we say "everyone" we mean everyone except the taxpayers. You're out of luck."
But he couldn’t figure out exactly how the rating agencies justified turning BBB loans into AAA-rated bonds. “I didn’t understand how they were turning all this garbage into gold,” he says. He brought some of the bond people from Goldman Sachs, Lehman Brothers, and UBS over for a visit. “We always asked the same question,” says Eisman. “Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.” He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number. “They were just assuming home prices would keep going up,” Eisman says.
Monday, November 10, 2008
(AIG CEO) Liddy: "Paulson, take the $60 billion in 5 year LIBOR+300 bonds and $40 billion in preferred shares and put them in my account."
(Treasury Secretary) Paulson: "You said it was $85 billion in 2 year, LIBOR+850 bonds!"
Liddy: "I am altering the deal. Pray I don't alter it any further."
Tuesday, November 04, 2008
Michael Alix has been named a senior vice president in the Bank Supervision Group of the Federal Reserve Bank of New York... Most recently, Mr. Alix worked for the Bear Stearns Companies, Inc., where he served as chief risk officer from 2006-2008 and global head of credit risk management from 1996-2006...
I mean, really?!?!?! I don't even know what to say, other than, THIS is why you shouldn't trust the Fed to get us out of the mess we're in... Hopefully, this hiring announcement will appear on Failblog.
Then, I saw this:
At a time when many investors are hoping for a bottom in this year's plummeting stock markets, Direxion Funds says it's ready to come out with eight new leveraged and inverse exchange-traded funds. But these ETFs won't just offer a bit more juice. They're set to become the first to offer three-times the leveraging power of their underlying benchmarks.
300% leveraged ETF's?!?!?!? Really?!?!? This is what we need to restore order and responsibility to our markets in the wake of an ORGY of leverage?!?! MORE leverage?
Anyway... I'm hearing Dean/Flair absolutely KILLED it in Troy, New York:
Monday, November 03, 2008
There seems to be this idea going around — both parties, both candidates, lots of economists — that the way to “fix” the economy is to stabilize home prices. This is incredibly misguided. Prices are still terribly elevated, and until they revert back to levels that are affordable and clear out the massive excess inventory of new and existing homes, there can be no stabilization. Of all the wrong lessons to take from the mortgage, housing and credit crises, this remains the very worst one. If you remotely believe in a free market — even one where players are regulated to prevent their own worst instincts from getting the best of the them — the last thing one should be doing is targeting asset prices. That is what Greenspan did throughout the 1990s and in the early 2000s, and it one of the primary causes of our present woes. Yes, you can regulate behavior; No, you cannot regulate prices.
There is no solution to this financial crisis that includes keeping home prices above parity value, which is defined as approximately three times median income vs. median home prices. NONE. Any such attempt prevents worthy potential homeowners from being able to afford to buy and keep a home. This makes it impossible for a healthy economy to be maintained, as the excessive home price pressure destroys disposable income for American Families. The result of such an intentional distortion is a demand for "bubblenomics" to prevent an all-on depression, as spending 50% or more of one's pre-tax income on housing cannot possibly work for all but the most wealthy of Americans; absent taking on more and more debt to cover the gap such a policy inevitably bankrupts all middle class and lower American families. This claptrap was precisely what led us into The Depression and now you advocate policies that would repeat these mistakes, covering your own personal culpability in creating the economic conditions that led us to this point.
Transferring such bad debt to the taxpayer does nothing; the taxpayer is the one who is already being hung by the neck as a direct consequence of the pernicious and outrageous fraud that was necessary to create the housing bubble in the first place. Transferring something from and to the same persons does nothing and America has wised up to the incessant lying you promote as "pro middle-class." The entirety of the bad debt written as a consequence of this fraud must be defaulted in order to clear the system.