Saturday, September 20, 2008
What To Do
Obviously the administration proposal, whatever the need for some sort of government intervention, is basically insane and no lawmakers should support it. The question is how do we do anything about it? Social Security was an easier battle because it was about making it radioactive for lawmakers to do anything but say "Hell no." This is a bit trickier.
Great Moments In Legislative Proposals
This is my favorite bit. Well, aside from the whole SEVEN HUNDRED BILLION DOLLARS part.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
I Suppose I Appreciate The Honesty
They could've released a complicated plan which appeared to have controls and oversight but which would be hard to decipher from the language. Instead they made it plain for all to see that what they want is to be able to take money from you and give it to Wall Street firms.
Deep Thought
Any member of Congress who looks at the plan to give Hank unchecked power to transfer $700 billion from the Treasury to his friends' companies and has any reaction other than "You've got to be fucking kidding me" does not deserve to hold office.
Everybody's Wrong About Everything
And just for the record, none of this will usher in a new golden age of sensible financial regulation or anything like that. We're bringing the punchbowl back to the party.
Party on!
Party on!
Fantasies
I really don't get where the fantasies that the US Gov. could actually make money by buying up these crappy assets then reselling them. The only way this kind of bailout can work is if they're bought for highly inflated values, as all of the players made highly leveraged bets. A 50% haircut won't bail anyone out. This is just the liquidity problem fantasy. It just isn't what's going on here. People lost lots of money.
0 To $1 Trillion In 4 days Flat
It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option. We've seen this game played before.
It's unrealistic to imagine that I'd be able to really get enough honest information to have an informed opinion, but I spent some time thinking about what question all the Very Serious People should, at a minimum, want answered before the start cheering on pony plans. This is what I came up with:
And, no, tumbling stock prices or babble about "deteriorating credit conditions" don't count. Bernanke, Paulson, the SEC, the FDIC should have had access to a set of facts independent of day to day market turmoil. What actually changed over the week? If it was new information, what was it? If it was newly discovered information, why didn't you know it before?
It's unrealistic to imagine that I'd be able to really get enough honest information to have an informed opinion, but I spent some time thinking about what question all the Very Serious People should, at a minimum, want answered before the start cheering on pony plans. This is what I came up with:
What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?
And, no, tumbling stock prices or babble about "deteriorating credit conditions" don't count. Bernanke, Paulson, the SEC, the FDIC should have had access to a set of facts independent of day to day market turmoil. What actually changed over the week? If it was new information, what was it? If it was newly discovered information, why didn't you know it before?
Here's A Proposal
Dear Mark:
As the Iraq war was not "Tom Friedman's war," the coming bailout will not be "Mark Thoma's bailout."
Love,
Atrios.
As the Iraq war was not "Tom Friedman's war," the coming bailout will not be "Mark Thoma's bailout."
Love,
Atrios.
Get Nervous
Krugman:
This has been the problem all along, the pretense that all problems are just liquidity problems. Until another bank goes under. Then, well, they were bad, but for everyone else it's just a liquidity problem!
Again, the problem is that lots of bad loans were made, lots of people made highly leveraged investments in those bad loans, and still more people bet on those loans by insuring them. The loans are bad. The mortgages are not going to be repaid in full. Housing prices are not going to magically shoot up 50% over the next 6 months. People gambled and lost and now the Democrats are racing to bail them all out.
I don't have enough information to really know what should be done, but I do know that the people talking about the problem are largely still misdiagnosing it. If they don't know what the problem actually is, or if they're being dishonest about it, the solution is unlikely to be a good one.
- Here’s the source of my uneasiness: the underlying premise behind the buyout seems, still, to be that this is mainly a liquidity problem. So if the government stands ready to buy securities at “fair value”, all will be well.
This has been the problem all along, the pretense that all problems are just liquidity problems. Until another bank goes under. Then, well, they were bad, but for everyone else it's just a liquidity problem!
Again, the problem is that lots of bad loans were made, lots of people made highly leveraged investments in those bad loans, and still more people bet on those loans by insuring them. The loans are bad. The mortgages are not going to be repaid in full. Housing prices are not going to magically shoot up 50% over the next 6 months. People gambled and lost and now the Democrats are racing to bail them all out.
I don't have enough information to really know what should be done, but I do know that the people talking about the problem are largely still misdiagnosing it. If they don't know what the problem actually is, or if they're being dishonest about it, the solution is unlikely to be a good one.
As We Have Done
Even more than the letting them get away with lying part, it's absurd that the media is letting McCain get away with this big government populist bullshit. Aside from his brief flirtation with campaign finance reform, McCain has never shown any interest in regulation of any kind.
I KEEDED
At Drinking Liberally the other night, I joked that any sane insurance company would've priced this $10 million insurance policy at precisely $10 million.
Friday, September 19, 2008
GOP Daddies In Nice Suits
Told the Democrats that Something Very Serious Was Happening and Something Needs To Be Done. So predictable.
WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
Lying Or Stupid
As always I'm not sure the distinction matters all that much, but I suppose I'm a bit curious.
Lining Up At The Trough
I'm surprised MBIA and Ambac have listed this long. Hopefully it isn't too late for them to get in on the bailout action!
The Bag Holders
The mystery all along throughout all of this is who would be missing the seat when the music stopped, who would be left holding the bag.
This is not a liquidity crisis. It's an insolvency crisis. People made bad loans, and other people made hugely leveraged bets on those loans, and still more people insured those bets.
And now the taxpayer gets the bill.
WHEEEEEEEEEEEEEEEE
This is not a liquidity crisis. It's an insolvency crisis. People made bad loans, and other people made hugely leveraged bets on those loans, and still more people insured those bets.
And now the taxpayer gets the bill.
WHEEEEEEEEEEEEEEEE
Opportunities
Yglesias meekly suggests that maybe in the course of spending hundreds of billions of dollars to clean up after the Masters of the Universe, we could spend a nickel or two to help poor people.
I'm not optimistic. I know how Democrats react when GOP Daddies in nice suits sit them down and explain What Needs To Be Done. See FISA bullshit, Iraq war, etc...
I'm not optimistic. I know how Democrats react when GOP Daddies in nice suits sit them down and explain What Needs To Be Done. See FISA bullshit, Iraq war, etc...
Feldstein
I hadn't realized Martin Feldstein was on the AIG Board of Directors. It seems he no longer teaches the Harvard intro economics course, which is a shame because it would be an excellent platform to explain his new love of socialism.
Faith In The System
Not in the mood to call anyone out, but I am struck by the faith of some that the Wise Men In Nice Suits know what they're doing, conveniently ignoring the fact that these people let this disaster happen in the first place.
Viva Capitalism!
Woke up a bit late, but caught a bit of Paulson's presser. Apparently we're all supposed to buy into this fantasy that this is all just a liquidity crisis which can only be solved by the government buying up hundreds of billions of dollars of bad debt.
WHEEEEEEEEEEEEEEEEEEEEEEEEEEE
WHEEEEEEEEEEEEEEEEEEEEEEEEEEE
Morning Thread
Does that new insurance company I now own, protect me from the predatory lenders that supposedly owe me money?
Thursday, September 18, 2008
Viva Capitalism!
NYT:
- WASHINGTON — The head of the Treasury and the Federal Reserve began discussions on Thursday with Congressional leaders on what could become the biggest bailout in United States history. While details remain to be worked out, the plan is likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions. The proposal could result in the most direct commitment of taxpayer funds so far in the financial crisis that Fed and Treasury officials say is the worst they have ever seen.
Those Condos Don't Buy Themselves
Absent the Wall Street bloodbath I wouldn't have been to surprised if New York City had mostly survived the housing bubble unscathed. But with all these high end jobs starting to dry up...
"America's Adversaries"
Just saw that quote on CNN.
We have always been at war with Spain.
...just noticed the time stamp is still stuck, even though posts are going out in the right order. I didn't post all of these simultaneously at 10:46.
We have always been at war with Spain.
...just noticed the time stamp is still stuck, even though posts are going out in the right order. I didn't post all of these simultaneously at 10:46.
Resume Padding
Weird. I met her a couple of times. Just not something you can get away with in academia, at least not once you get caught anyway.
Lan-Lan Wang has had a distinguished career in academic dance. She’s founded dance companies. She was one of the first American modern dancers to perform in China after the Cultural Revolution, and she promoted numerous exchanges with China. She won grants from top foundations. She taught at the University of Iowa and the University of California at Los Angeles and, since 1994, at Connecticut College, serving for much of that time as department chair. She may never have earned a degree — although she claimed two.
And what’s certain is that she did not earn either of the two degrees she claimed — a bachelor’s and master’s from the University of Iowa. As a result, she quit her position as professor and interim chair, Connecticut College announced Monday.
Gramm
Since we've entered the phase where McCain just talks gibberish and we're left to try to interpret, I do have to wonder if he has any clue what he's talking about with respect to regulation. I'm reasonably sure the answer is "no," but I'm curious if he's run his new ideas past his good friend Phil "whiners" Gramm.
Obama's Latino Problem
It occurs to me the only Obama "problem" that hasn't been talked about this election cycle is his "African-American problem," though maybe I missed a Fox segment with Armstrong Williams.
Bold Thinking
We probably couldn't simply go to war with Spain, but we could do one of our little special operations and fund rebel groups in Catalunya and the Basque region in hopes that they would topple their dictator in Madrid and enjoy the benefits of peeance and freeance forever.
It's what we do, after all.
Catalunya Lliure!
It's what we do, after all.
Catalunya Lliure!
McCain's World
The dirty little secret about John McCain is that he really knows nothing about anything. He's as incurious and ignorant as George Bush, with less excuse. So, yes, it makes sense that his people would rather suggest and end of relations with our NATO ally than reveal the truth about their woefully inadequate candidate.
Abortion
It's heartening that Obama is running on the issue, rather than running from it as Democrats often do. Everybody already knows that Democrats are going to force you to gay marry your aborted fetuses, so the smart thing to do is show leadership on these culture war issues.
Leverage
Probably time to dust off our Galbraith. From A Short History of Financial Euphoria:
It's always about leverage.
All subsequent financial innovation has involved similar debt creation leveraged against more limited assets with only modifications in earlier design.
It's always about leverage.
Hack
The sad thing is that few of these people will acknowledge that they simply got played, and instead want to cast McCain as a character in a play about a man's tragic downfall. He was always an unprincipled hack, but for a very long time his political fortunes were the result of his understanding of and willingness to cater to the desires of elite Villagers. Now he has a different target.
Thursday Is New Jobless Day
Still very high.
- The number of U.S. workers filing new claims for jobless benefits rose unexpectedly by 10,000 last week, as the first wave of job losses from Hurricane Gustav rolled in after reporting delays in Louisiana, the Labor Department reportedThursday. Initial claims for state unemployment insurance benefits rose to a seasonally adjusted 455,000 during the week ended Sept. 13 from 445,000 the prior week. Analysts polled by Reuters had forecast claims to drop to 440,000 last week.
And Without A Peep
Yglesias:
And who imagined it that when it would die, its death would be confronted with deafening silence. Oh I miss the good old days when lecturing Latin American countries for their bad economic policies was what all the cool kids did.
- Who knew the “Washington Consensus” would die in Washington, DC under a Republican President in a mad fit of bailouts and nationalizations?
And who imagined it that when it would die, its death would be confronted with deafening silence. Oh I miss the good old days when lecturing Latin American countries for their bad economic policies was what all the cool kids did.
More coffee, please.
Blast from the past: Any minute now I'm sure someone will tell me it's all good.
[Update: That link may have confused people, as I often do when I don't bring people on my tangents with me. We return you now to more current news.]
Signed,
Not Atrios
[Update: That link may have confused people, as I often do when I don't bring people on my tangents with me. We return you now to more current news.]
Signed,
Not Atrios
Wednesday, September 17, 2008
Morgan Stanley
Maybe he was just referring to sex or procreation? It's a bit harder to make it without a partner.
Late Evening Thread
Deep Thought: The American version of The Office has surpassed the British version.
--Molly I.
--Molly I.
Panic
A common question I've been getting from friends lately is, "Are you panicking yet?" The answer is no, I've never been panicking. I've long thought this will be a close election, that Obama will win by taking Kerry states and a couple more.
WaMu Watch
CNBC sez WaMu may be starting the process to put itself up for auction.
...more:
...more:
- Washington Mutual, the struggling savings and loan, has been working on several efforts to save itself, including a potential sale, people briefed on the matter said Wednesday. Goldman Sachs, which Washington Mutual has hired, started the process several days ago, these people said. Among the potential bidders that Goldman has talked to are Wells Fargo, JPMorgan Chase and HSBC. But no buyers may materialize. That could force the government to place Washington Mutual into conservatorship, like IndyMac, or find a bridge-bank solution, which was extended to thrifts in the new housing regulations.
Time Stamps
Blogger time stamps seem to be stuck in this morning, so if you see some post shuffling it's because I forget that and fail to update it manually.
High Comedy
I get that McCain needs Palin at his campaign rallies because otherwise no one shows up, but in a very serious non-concern troll way can I suggest to the McCain campaign that appearing on Larry King together is a really bad idea.
...it appears they're following my advice and won't be appearing after all.
...it appears they're following my advice and won't be appearing after all.
The Absurdity Of CNBC
The entire financial system is practically collapsing and they're lamenting the possibility of more regulation. I don't think the sports/referee metaphor is perfect, but it's probably good enough. People who prattle on about "the free market" are usually too stupid to have a clue how complicated and pervasive the "rules" had to be to to get a well-functioning modern market system: sophisticated concepts of contracts and enforcement, property rights, legal entities, proper accounting, bankruptcy, limited liability, etc... etc..., did not descend from the heavens but were, in fact, created.
Lies and the Lying Liars
Gordon Smith edition.
WALLA WALLA, Wash.—U.S. Sen. Gordon Smith (R-Ore.) reacted quickly last week when WW quoted multiple sources inside and outside Smith’s vegetable-packing plant in Eastern Oregon saying his company has long hired illegal immigrants.
The senator called the cover story, “Señor Smith” (WW, Sept. 10, 2008), completely “false.”
“I have never had such a hit-piece hatchet-job slimeball done to me before in my 16 years in public life,” Smith told KXL radio host Lars Larson the same day WW published “Señor Smith”. “The policy of that company is to obey the law and document every worker.”
...
WW returned to Eastern Oregon and Washington last week and found five workers who are—or were—undocumented when they worked for Smith Frozen Foods or a second related business owned by Smith, who’s running for re-election against Democrat Jeff Merkley in one of the nation’s most closely watched Senate races.
WaMu Watch
Assuming no buyer shows up, market wisdom suggests the strong likelihood that some upcoming Friday, at about 8PM EST, the FDIC will quietly add it to their failed bank list. And then the FDIC will probably need to be bailed out.
Muddle
I'm doing my best here to come up with a simple and coherent liberal message about what's going on in our new socialist republic. It's hard to get past the hilarity of all the supposed free market worshippers in our government and on CNBC cheering this on.
And I have no idea if this bailout was a good thing or a bad thing. I don't have enough information to make that determination.
The real issue is that you need a sensible regulatory framework to prevent financial crises from happening in the first place and criteria and practices for dealing with them when they do, along with a sensible and consistent broad social safety net for individuals and families for when crises happen to them.
It might have been the right thing to run down to the river with buckets to collect water to throw on the burning building, but it would have been much better to have better fire codes and a functioning fire department.
And I have no idea if this bailout was a good thing or a bad thing. I don't have enough information to make that determination.
The real issue is that you need a sensible regulatory framework to prevent financial crises from happening in the first place and criteria and practices for dealing with them when they do, along with a sensible and consistent broad social safety net for individuals and families for when crises happen to them.
It might have been the right thing to run down to the river with buckets to collect water to throw on the burning building, but it would have been much better to have better fire codes and a functioning fire department.
Deep Thought
Now that the government is running the biggest insurance company in the world, shouldn't we elect a president who is qualified to run a large company?
Optimism!
Yglesias:
I'll admit to instinctively sharing this view. But I think it's largely based on the knowledge that there are smart technocrats who know what they're doing, and not on the reality that while those these people exist they probably aren't actually steering the ship. George Bush, Chris Cox, Dick Cheney, and Henry Paulson are.
WHEEEEEEEEEEEEEE
Now of course to actually get down to the depths of the Depression required some policy blunders that I think it’s extremely unlikely anyone in the contemporary United States will undertake.
I'll admit to instinctively sharing this view. But I think it's largely based on the knowledge that there are smart technocrats who know what they're doing, and not on the reality that while those these people exist they probably aren't actually steering the ship. George Bush, Chris Cox, Dick Cheney, and Henry Paulson are.
WHEEEEEEEEEEEEEE
Tuesday, September 16, 2008
Loan
Fed's considering giving AIG a loan. How big I wonder? AIG, we must remember, is primarily an insurance company, with substantial other sidelines, and is very far from the Fed's normal domain which is commercial banks. Fed going to make a loan GM next? Not crazy given its heavy equity in GMAC.
When Chrysler was given loan guarantees of $1.2 billion, about $3.2 billion in today's money, over 25 years ago it was like a nuclear-sized event. And it required an act of Congress.
When Chrysler was given loan guarantees of $1.2 billion, about $3.2 billion in today's money, over 25 years ago it was like a nuclear-sized event. And it required an act of Congress.
Beat Me To It
I told myself that later today I'd write this post, but Digby beat me to it. Oh well. What Digby said.
What About John?
A reporter should ask Cara Carleton Sneed Fiorina if she thinks John McCain is qualified to run a major business.
...from my keyboard to Andrea Mitchell's ear. And, no, apparently John McCain could not run a major company.
...from my keyboard to Andrea Mitchell's ear. And, no, apparently John McCain could not run a major company.
Super Shitpile X Dead
CNBC sez plan to get consortium of banks to lend bunch of money to AIG is dead, like every other previous time they tried to put together something similar. Surprisingly, not everyone wants to throw good money after bad...
Viva Capitalism!
CNBC breaking:
New York Fed Meeting Now to Discuss Fate of AIG. A Government Bailout is Back on the Table (story developing)
No Health Insurance For You
It is true that our employer-based health insurance system is pretty bad, conceptually and in practice, but it's much better than the alternative when the alternative doesn't exist. And the McCain alternative isn't actually an alternative, just a free market fairy system in a market which for various well understood reasons is never going to function the way that a nice competitive market should.
Commission
Ah, yes, the Washington way. Find some Wise Old Men in nice suits, preferably the ones who fucked everything up in the first place, and tell them to find a solution.
Appearing on CBS's "The Early Show," McCain faulted the "greed, excess, [and] corruption" of financial executives.
"We need to set up a 9/11 Commission in order to get to the bottom of this and get it fixed and act to clean up this corruption," he said.
Asked for more details about the proposal, a McCain spokesman said they would be forthcoming.
Daddy Won't Make Everything Better
Through this crisis, there's this underlying narrative that something can be done, that there's just a wee liquidity problem. But underlying all of this is the fact that banks made a bunch of stupid loans which aren't being repaid. A bunch of people made highly leveraged investments in securities backed by those loans. A bunch of other people sold insurance on those securities and related debt.
Lots of money is being lost and there isn't any way to fix that.
Lots of money is being lost and there isn't any way to fix that.
Downgrade
Today is another day!
Major credit ratings agencies downgraded the American International Group late Monday, worsening its financial health, as Federal Reserve officials and two leading investment banks were in urgent talks to put together a $75 billion line of credit to stave off a crisis at the company.
The credit downgrades are likely to force the company to turn over billions of dollars in collateral to its derivatives trading partners.
Monday, September 15, 2008
How They Operate
Pretty typical.
- Anchorage AM radio host Eddie Burke has been suspended for a week for broadcasting the phone number of women involved in organizing a protest against Sarah Palin. The women later received threatening phone calls.
That's Worrying
Perhaps it is mattress time.
The Fed added that it was suspending a rule that normally prohibits deposit-taking banks from using deposits to help finance their investment banking subsidiaries to allow them to fund activities normally funded in the repo market on a temporary basis until January 30 2009.
Florida
I'm sure Jeb had no involvement whatsoever.
The bankruptcy of Lehman Brothers, a prestigious Wall Street firm, will touch Florida's pension funds and the state-run insurer because both hold its securities.
The State Board of Administration holds $322 million in Lehman stock and bonds. The SBA manages the state's employee fund and more than two dozen other funds, including assets for the Florida Hurricane Catastrophe Fund and the Florida Prepaid College Plan.
Bomb
Wonder what this is about.
West Chester's 30 miles or so outside of Philly.
Police evacuated several buildings in downtown West Chester this morning after three suspicious objects - one of which turned out to be a bomb - were discovered in or just outside the Mosteller Parking garage.
West Chester Police Chief Scott L. Bohn said that the Montgomery County Bomb Squad had been called in to deal with the objects. This afternoon, the squad determined that the most realistic looking of the three devices, which contained a pipe, a container of an unknown liquid, and what appeared to be an electrical circuit - was in fact a bomb.
West Chester's 30 miles or so outside of Philly.
Dow -504
Not an especially awesome day.
This is above my pay grade, but given all the attempts to provide cash to AIG, I'm not sure that "The Market" is buying the idea that this is simply a liquidity problem. It's possible that people just don't believe the $75 billion will materialize, or it's possible they don't think it matters much.
This is above my pay grade, but given all the attempts to provide cash to AIG, I'm not sure that "The Market" is buying the idea that this is simply a liquidity problem. It's possible that people just don't believe the $75 billion will materialize, or it's possible they don't think it matters much.
Fundamentals
McCain has now defined the fundamentals of the economy as "workers and small businesses," so if you suggest something is wrong with the economy you're insulting workers. This follows the Bush strategy of saying that criticizing his Iraq policies is insulting the troops.
New York/AIG
CNBC is telling New York has temporarily changed its capital requirements for insurance companies, allowing AIG's New York subsidiaries to pass some cash up to the parent company.
AIG
As I said yesterday, the real story here is, amazingly, not Merrill or Lehman but AIG. If AIG blows up, lots of things blow up.
WHEEEEEEEEEEEE
...as CR notes, they were supposed to have a big announcement.
WHEEEEEEEEEEEE
...as CR notes, they were supposed to have a big announcement.
Perspective, People
Having a bit of photo shop fun is so much worse than trafficking in lies which lead to the deaths of hundreds of thousands of people.
Blame The Accountants
Larry Kudlow is saying this is all just the fault of stupid accountants wanting companies to actually value financial assets at their market prices instead of at fantasy made up prices.
Fundamentals Are Strong
I'm actually curious what McCain means by this. Probably he doesn't mean anything, it's just babble. Perhaps a reporter could ask him just which "fundamentals" he's talking about?
The Pessimist's View
Roubini:
This morning, Roubini forecast another 20% drop in stock prices, and reiterated a prior view that there will be no major independent broker/dealers standing before this crisis ends. In other words, Goldman Sachs and Morgan Stanley should be seeking suitors today, or face a similar fate as Lehman later.
Bike Racks
Most buses in Philadelphia have bike racks, but readers have suggested this isn't a universal feature. I haven't seen them be used too often, but when I have they haven't slowed things down too much.
Don't fret – the sight of a bicycle stuck on the front of a DART bus soon won't be a bad thing.
By New Year's Eve, 650 Dallas Area Rapid Transit buses are expected to offer bicycle commuters greater convenience. The agency's new bus-mounted bike racks also represent an option for people who live or work beyond easy walking distance of a mass-transit stop.
BK
The week begins.
Sept. 15 (Bloomberg) -- Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.
The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarfs WorldCom Inc.'s insolvency in 2002 and Drexel Burnham Lambert's failure in 1990.
Morning thread
Thank goodness John McCain wants to tie Social Security to the wizards of Wall Street like Bush.
As part of Social Security reform, I believe that private savings accounts are a part of it—along the lines that President Bush proposed,” McCain told the Journal.[Wall Street Journal, 3/3/08; Campaign Website, accessed 3/3/08]
Sunday, September 14, 2008
Overnight
So this wasn't just a bad dream
Holding out hope that the Jani Lane/Steve Howe collaboration was genuinely a bad dream.
Holding out hope that the Jani Lane/Steve Howe collaboration was genuinely a bad dream.
Oh The Irony
CNBC telling me that when Bear Stearns was bailed out it was because if Bear went, Lehman and then Merrill would go.
WHEEEEEEEEEEEEEEEEEEEEEE
WHEEEEEEEEEEEEEEEEEEEEEE
We're All Communists Now
WHEEEEEEEEEEEEEEE
Wikipedia tells me AIG is the 18th largest company in the world. More than that, a chunk of its business involved guaranteeing Big Shitpile. Another chunk of its business involved betting on Big Shitpile.
Exciting!!
The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.
Ratings agencies threatened to downgrade the insurance giant’s credit rating by Monday morning, allowing counterparties to withdraw capital from their contracts with the company. One person close to the firm said that if such an event occurred, A.I.G. may survive for only 48 hours to 72 hours.
Wikipedia tells me AIG is the 18th largest company in the world. More than that, a chunk of its business involved guaranteeing Big Shitpile. Another chunk of its business involved betting on Big Shitpile.
Exciting!!
AIG
Strangely, the real story tonight isn't Lehman or Merrill... it's AIG.
It's all blowing up.
Exciting!!
WHEEEEEEEEEEEEEE
...guy on CNBC suggesting that government should "provide incentives" for speculators to buy up excess home supply.
I LUV ME SUM CAPITALISM!
- NEW YORK (Reuters) - American International Group Inc CEO Robert Willumstad turned down a private equity infusion and turned to the Federal Reserve for help, the Wall Street Journal, citing people familiar with the situation, reported Sunday.
It's all blowing up.
Exciting!!
WHEEEEEEEEEEEEEE
...guy on CNBC suggesting that government should "provide incentives" for speculators to buy up excess home supply.
I LUV ME SUM CAPITALISM!
Bye Bye Lehman
Don't let the door hit you...
- In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis while another prominent securities firm, Lehman Brothers, hurtled toward liquidation after it failed to find a buyer, people briefed on the deals said.
They Love Her Because She's Insane
What Jane said.
UPDATE. I have it on good authority that the allegation about the leprechauns is unfounded.
UPDATE. I have it on good authority that the allegation about the leprechauns is unfounded.
When Rove Says You're A Liar
Maybe you have a wee problem.
Busy for a bit. I'm sure CR will have all of your financial armageddon related program activities covered.
Busy for a bit. I'm sure CR will have all of your financial armageddon related program activities covered.
LIQUIDATE! LIQUIDATE!
Sounds like the party might be over.
Unable to find a savior, the troubled investment bank Lehman Brothers appeared headed toward liquidation on Sunday, in what would be one of the biggest failures in Wall Street history.
Deep Thought
I think I could get behind capital punishment for people who don't clean up after their dogs.
Doing Stuff
I don't think the bloggiverse is useless. It's rather hard to contemplate just how dismal the last several years would have been without it, and I don't just mean as a means of therapy. But it's also the case that sitting around and bitching on a blog isn't a substitute for actually doing stuff, and kudos to those who actually do it.
Deep Thought
Could people please shut the fuck up about small town values? If it's so had to explain what they are, they probably don't really exist.
Sunday Bobbleheads
Document the atrocities.
ABC's "This Week" — Sen. Claire McCaskill, D-Mo.; Carly Fiorina, adviser to John McCain; former Federal Reserve Chairman Alan Greenspan.
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CBS' "Face the Nation" — Gov. Janet Napolitano, D-Ariz.; Sen. Kay Bailey Hutchison, R-Texas; Rep. Debbie Wasserman Schultz, D-Fla.; former acting Gov. Jane Swift, R-Mass.
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NBC's "Meet the Press" — Former Mayor Rudy Giuliani, R-N.Y.; Sen. Charles Schumer, D-N.Y.; Bob Woodward, associate editor for The Washington Post and author of a new book on the Bush administration.
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CNN's "Late Edition" — R. David Paulison, administrator of the Federal Emergency Management Agency; Govs. Tim Pawlenty, R-Minn., and Bill Richardson, D-N.M.; Sen. Dianne Feinstein, D-Calif.; Rep. Marsha Blackburn, R-Tenn.; Linda Douglass, adviser to Barack Obama; Nancy Pfotenhauer, adviser to McCain.
"Fox News Sunday" _ Former Gov. Tony Knowles, D-Alaska; Lt. Gov. Sean Parnell, R-Alaska; Jim Laychak, president of the Pentagon Memorial Fund.
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