Friday, May 15, 2009

Which Story is Real?

Ok, it's time for another edition of "Is it real? or is it from The Onion?"

I am warning you in advance - today's edition is quite challenging (don't click on the links until you've made your decision):

1) SEC Attorneys Probed for Insider Trading:
"Two attorneys at the Securities and Exchange Commission (SEC) are under "active" criminal investigation by the FBI for trading stocks based on inside information."

Hahaha - that's like the very definition of "irony" isn't it? clearly cannot be true...

2) Obama Says U.S. Long Term Debt Load Unsustainable
"President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries. “We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.” Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

I'm almost POSITIVE this one is fake - I mean, how on Earth could Obama give a warning like this while continuing to spend with both hands? This can't be real.

3) U.S. Slates $22Billion for Insurers from TARP
"The Treasury Department will make federal bailout funds available to a number of U.S. life insurers, acting on the embattled sector's long-running effort to get government help. The Treasury is prepared to inject up to $22 billion into the insurers under the rescue plan launched last fall as the Troubled Asset Relief Program, said a person familiar with the matter."

No WAY! That doesn't make any sense at all - this one cannot be real.

4) Woman Seeks Love for Randy Emu
"A sexually frustrated male emu is chasing a woman in the Northwest Territory because it cannot find a female mate."

Hah - they gave it away with "Northwest Territory." CLEARLY fake...

5) Jose Canseco Only Has to Picture One Person in Underwear
"In the wake of seeing another of his PED allegations proven true, Jose Canseco decided to hold a press conference in Beverly Hills on Thursday to address the inevitable horde of media eager to capture his "I told you so." Only problem? The presser was only attended by a reporter from the Associated Press, a photographer, four camera crews and his lawyer."

Now THIS one is funny. Imagine if you held a press conference and only one person came? Hilarious - but clearly fake.

Ok - are you ready for the big reveal? Yep - each of those stories is treal. Sad, but true. The Obama quote and the insurance company bailouts disturbed me the most - I could rant ad nauseum on the topics, but two angrier and more eloquent bloggers have already covered the subjects: I recommend Karl Denninger on deficit spending, and Barry Ritholtz on insurance bailouts. All I will add is that, as I addressed earlier with respect to pending FNM/FRE losses, the insurance bailouts do not jive with the government's "everything is getting better" ethos. If everything is getting better then why do we have to give $22 BILLION to these insurance companies?



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Anonymous said...

The bailout of insurance companies important for the success of unlocking of credit markets. Please note that we should want the governmnet to subsidize the purchase of mortage back securities as well as commercial real estate loans based on the fact that insurers are the only real purchasser of these assets. please note that insurers hold these securities to maturity and do not need to mark to market these securities. with the collapse of the SIVS and other complex financing vehicles there are no real buyers of this paper, other than the insurers. you will see a bunch of hedgefunds setup and start to partcipate in the TALF funding with 90% financing from the government - this is truly a sad day for us tax payers- we are financiang the leveraged purchase of distressed assets by hedgefunds and not really solving the issue of bad loans being made - just pushing the assets into a vehicle which must continue to be subsidze by the government until the securities mature. you will still need to see a massive reduction in the size of banks before all this is solved - cheers RATCHEESE