Archive for December, 2008
Wednesday, December 31st, 2008
The Federal Reserve will print money to buy $500 billion worth of mortgage-backed securities by June, specifically MBS issued by Fannie, Freddie and their sister Ginnie Mae. And guess who the Fed has hired to manage the purchases? PIMCO, Goldman, BlackRock and Wellington.
This is quite a scam for all of ...
Posted in bailout, credit crunch, Economy, Fed, housing, Interest Rates, taxpayer issues, Wall Street | 12 Comments »
Monday, December 29th, 2008
As the Obama administration prepares its trillion-dollar "stimulus" package, economists like Paul Krugman are providing rationalizations for why such a package is necessary. In his column today, he expands his spend-anything-to-get-the-economy-going-again argument, excoriating indebted states and municipalities for cutting back. He makes it clear that his preferred solution would be ...
Posted in bailout, bubble, Dollar, government spending, inflation, taxpayer issues | 34 Comments »
Sunday, December 28th, 2008
Finally, a good article in the NYT's series "The Reckoning." Past articles in this series have been weak, as Yves noted over at Naked Capitalism. Besides the two pieces she cogently criticized, I was unimpressed with the story on Herb and Marian Sandler, the inventors of the option ARM. I ...
Posted in accounting, banking, housing | 2 Comments »
Friday, December 26th, 2008
Check it out folks, the White House is in foreclosure. The Atlanta White House that is.
Above is a picture of 3687 Briarcliff Rd, NE in Atlanta, Georgia. The 7 BR, 5.5 bath, 16,500 square foot behemoth is on the market for $9.9 million according to the Atlanta Journal Constitution:
Owner Fred ...
Posted in bankruptcy, funny, housing | 15 Comments »
Friday, December 26th, 2008
CR notes that the savings rate (measured as a percentage of disposable income) is starting to recover:
It looks like savings from lower gasoline prices is showing up as savings - as opposed to other consumption - and this process of increasing savings is a necessary step towards restoring healthy household ...
Posted in Economy | 3 Comments »
Wednesday, December 24th, 2008
Haggling is up at the nation's retailers, according to AP (via Drudge).
If you're looking for an extra bargain before the holidays, you may only have to ask. With holiday sales shaping up to be the lowest in years, possibly the worst since the industry began annual comparisons in 1969, retailers ...
Posted in bankruptcy, credit crunch, deflation, Economy, Fed, government spending, taxpayer issues | 7 Comments »
Saturday, December 20th, 2008
The FDIC is running out of cash. Quickly. In a press release earlier this week, the FDIC noted that the Deposit Insurance Fund shrank considerably last quarter:
The FDIC also announced that in the third quarter, the Deposit Insurance Fund (DIF) decreased by 23.5 percent ($10.6 billion) to $34.6 billion (unaudited). ...
Posted in bailout, banking, Fed, taxpayer issues | 15 Comments »
Thursday, December 18th, 2008
According to an article on WSJ.com, S&P "took the first step" toward "potentially" lowering GE's credit rating from AAA.
Credit analyst Robert Schulz warned earnings and cash flow at GE Capital could decline enough over the next two years to warrant a downgrade, and revised the company's ratings outlook to negative ...
Posted in bailout, credit crunch, stocks, taxpayer issues, Wall Street | 3 Comments »
Thursday, December 18th, 2008
One question regular folks consistently ask about the housing bubble/financial crisis: Why did it go on so long? Why were bankers putting risky borrowers into toxic mortgage products almost engineered to blow up?
One answer is that no one saw it coming. "Hoocoodanode?" says CR. "Who coulda known?" That's part of ...
Posted in accounting, banking, bubble, housing | 4 Comments »
Wednesday, December 17th, 2008
Here's a funny piece from The New York Times (via The Economist):
CATHERINE RAMPELL asks a very good question—how does the architect of a Ponzi scheme plan to bring said Ponzi scheme to a satisfactory end? Given the finite number of suckers on the planet (though admittedly, the illusion of limitlessness ...
Posted in funny | 3 Comments »
Wednesday, December 17th, 2008
The Dallas Morning News published an article on the new bubble in Treasuries, a point raised here last month. It came out last Friday, actually, but I just saw it today (hat tip Coppedge):
As bubbles go, this one doesn't have quite the same cachet as, say, the Internet bubble, the ...
Posted in bubble, credit crunch, Fed, inflation, Interest Rates | 3 Comments »
Tuesday, December 16th, 2008
Investors will have to keep waiting for BankUnited to publish its latest financials. Today Florida's largest regional bank, an option ARM specialist, released a "non-timely filing notice," noting that they will be unable to make their annual filing with the SEC by the Dec. 15th deadline.
The filing includes a "going ...
Posted in accounting, banking, bankruptcy, stocks | 4 Comments »
Tuesday, December 16th, 2008
The recession is here and credit is disappearing. Shopaholics everywhere must now cope with the reality that accumulation is no longer possible at rates of the recent past. The middle column in yesterday's WSJ is particularly funny (sad?)...
On Black Friday, the day after Thanksgiving and the first official day of ...
Posted in bailout, bankruptcy, Economy | 5 Comments »
Tuesday, December 16th, 2008
Frequently I'm asked where the title of this blog comes from. The answer is the Option ARM loan, which may be the most toxic mortgage product ever invented.
Yesterday 60 Minutes had an ok story on Option ARM and Alt A mortgage loans (via YMOYL). It doesn't go into any ...
Posted in banking, bubble, housing | No Comments »
Sunday, December 14th, 2008
Not only is the Bernie Madoff story fascinating, there is a lesson in it for all of us as the title of this post suggests. How did he keep the scam going so long? Why weren't regulators asking tougher questions? How did he lose $50 billion? Where did all that ...
Posted in bailout, banking, bankruptcy, Wall Street | 17 Comments »
Friday, December 12th, 2008
The Fed has refused to comply with Bloomberg's request for information regarding its massive new lending programs. The Fed is worried such a disclosure would reveal all the big banks are effectively bankrupt, causing widespread panic and, I suppose, a possible run on the entire banking system.
Dec. 12 (Bloomberg) -- ...
Posted in bailout, banking, bankruptcy, bubble, credit crunch, Fed, taxpayer issues, Wall Street | 17 Comments »
Thursday, December 11th, 2008
December, 2008 (Bloomberg)---After a successful hostile takeover of U.S. bank Citigroup, the Somali pirates are on track to secure a seat in the United States Senate. According to Pirate spokesman Ali Hashimi Mohammed, capital secured by Citigroup from the U.S. Treasury's TARP program along with the booty of various ...
Posted in funny | 16 Comments »
Thursday, December 11th, 2008
This video comes with a commercial that I'm unable to take out. Still, it's pretty funny.
Posted in funny | 3 Comments »
Wednesday, December 10th, 2008
"We need help from the media, and they're hurting us."
"What you do is partisan hackery."
"You have a responsibility to the public discourse, and you fail miserably."
Politicos "are not making honest arguments" because they feel "the ends justify the means."
WSJ Editorial Page! Paul Krugman! Are you listening?
Posted in media, politics | No Comments »
Wednesday, December 10th, 2008
Defending Fannie and Freddie, Paul Krugman posted "Fannie Freddie Phony" a month ago:
...Fannie/Freddie did some bad things, and did, it turns out, get to some extent into subprime. But thanks to the accounting scandals, they were actually withdrawing from the market during the height of the housing bubble — the ...
Posted in accounting, GSE, politics | 12 Comments »
Monday, December 8th, 2008
Praying to God to save the SUV:
Forget the automakers. Pray that God convinces Congress to give everyone a million dollars!
Posted in funny | 8 Comments »
Monday, December 8th, 2008
Drudge is leading with this item from IHT:
The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits...
The company has two revolving lines of credit, each with a ...
Posted in Uncategorized | 3 Comments »
Monday, December 8th, 2008
Extended Stay America will likely be taken over by lenders soon, according to the WSJ:
Extended Stay's difficulties signal a new phase of distress in commercial real estate, because they arise directly from the weakening economy. Until now, problems have mostly involved developers unable to obtain refinancing for otherwise healthy operations...
During ...
Posted in bankruptcy, credit crunch, Wall Street | 2 Comments »
Sunday, December 7th, 2008
[Update Monday 2PM: Tribune has filed for bankruptcy protection according to the WSJ]
According to NYT's DealBook, Tribune is investigating a bankruptcy filing.
Tribune has hired bankruptcy advisers as the ailing newspaper company faces a potential bankruptcy filing, people briefed on the matter said.
The newspaper, which was taken private last year by ...
Posted in bankruptcy, credit crunch, stocks, tutorial | 1 Comment »
Friday, December 5th, 2008
Here's a good link for folks still struggling to understand Credit Default Swaps and how they brought the world financial system to its knees (hat tip: Patrick). It tells the story of CDS in allegory. A snippet:
...What a disaster this was. What a mess! What had begun so innocently and ...
Posted in accounting, bailout, banking, bankruptcy, credit crunch, credit default swaps, politics, taxpayer issues, Wall Street | 6 Comments »
