[QUOTE=AES;163631]Which anarchist school of thought are you advocating again?[/QUOTE]

None.

In Europe I would call it [URL="http://en.wikipedia.org/wiki/Classical_liberalism"]liberalism[/URL], but here in the US I have to use the term [URL="http://en.wikipedia.org/wiki/Minarchism"]minarchism[/URL].

[QUOTE=AES;163631]Dianne Wilkerson was not a US Senator.[/QUOTE]

That's true and I appologize for the crappy research. Her name is the first one Google offers for "senator arrested for corruption". The Democratic US-Senators are all honest; it's the Democratic Governors who are corrupt.

I'm sure that this willl change within the next legislative period. The Republicans are more likely to limit themselves to the bare essentails (extra-marital affairs, nepotism) because they're on parole until the next election. At least, a Republican Congressman gets to [URL="http://en.wikipedia.org/wiki/Gary_Condit"]murder one of his interns[/URL] for free. Can't let a Democrat get away with murder and not be allowed to commit one too, right? A Republican Governor most outspoken against gambling, [URL="http://en.wikipedia.org/wiki/Elliot_spitzer"]will get caught playing poker[/URL]; but at least he will be using his own money, so I couldn't care less.

In the mean-time, power-drunken Democratic US-Senators will get caught [URL="http://en.wikipedia.org/wiki/Ted_stevens"]accepting bribes[/URL] and [URL="http://en.wikipedia.org/wiki/Larry_Craig"]having sex with farm-animals in airport restrooms[/URL].

But nobody gives a damn, because we can't find a free spot to apply more [URL="http://en.wikipedia.org/wiki/Fentanyl"]Fentanyl[/URL] patches, and are too busy trying to locate a vein to inject 50cc of [URL="http://en.wikipedia.org/wiki/Carfentanil"]Carfentanil[/URL] with a sharpened turkey baster.

[quote=__HRB__;163628]I joined here 12/2008. I stopped complaining in 2005 after the sonofaturd got reelected. Where would the point be?[/quote]I was simply wondering whether you were one of the hypocrites. I'll take your statement as an affirmation that you were complaining about the deficits run up by the Bush administration long before it ended, so my question is answered.

Had I seen your liberalism/minarchism answer, I would have ceased asking questions.

[quote]Wonderful. So, what *is* your argument, that it's OK for the motherfucker in charge to put everybody $3000 more in debt, to solve the problem of everybody being too much in debt?[/quote]No, I've never argued that.

As indicated above, I simply previously could not determine from what you'd posted whether you had suddenly become a deficit hawk only after Obama took office, and I had not yet seen your liberalism/minarchism answer, so I asked some questions in order to find out.

I'm generally a fairly straightforward writer without sneaky purposes. If I had wanted to argue what you propose (that's it's fine-and-dandy for Obama to run up deficits), I'd have said so straight out. If you don't believe that, ask other long-time members.

If you care enough to ask politely, I might even explain what _is_ my opinion about the stimulus/deficit/whatever.

[quote]Under what rock have you been living?

[B]+++ Newsflash +++ Newsflash +++

Hypocrites discovered in the Senate! [/B]< snip >[/quote]You seem to assume the worst about what I write. I was just giving a particular example to support my statement of why I was asking you those questions. There was no need for you to be sarcastic.

[quote]you have to go all the way back to Eisenhower until you find someone who did a comparatively good job.[/quote]... which was during my formative years, so when I started my political thinking I had the idea that balanced budgets were the norm.

[quote]If complaining about the fucking asshole sending MORE troops to a country where we have no fucking business to be in the first place, makes me a White-Trash-Redneck-Conservative in your eyes, then so be it.[/quote]There's no need for that reaction. I just wanted clarification of your stand on deficits.

[quote]Becomming an Obama fanboi, won't wash off the guilt you bear for helping Nixon get elected.[/quote]A) As supported by my postings in another thread (about the run-up to the election), I've never been an Obama fanboy. I have been, and remain, cautious about the possibility that he will send our country's political pendulum too far left as it returns from the rightist position to which the Bush administration pushed it.

B) As for Nixon: I was too young to vote in 1968. In 1972, as I've explained elsewhere, I was taken-in by some of the "dirty tricks" committed by the CREEP that summer. Once the Watergate hearings started, I acquired a better political sense. I don't feel [I]guilty[/I] about voting for Nixon in 1972; I was still politically naive then, and I was tricked by professionals. Fool me once -- shame on the GOP. I've never had misgivings about any of my later votes.

[QUOTE=cheesehead;163643].[/QUOTE]

Peace, man. We were cool from the beginning. Since I can't buy you a beer, let's head over to the S.E.T.I. or Folding@Home forums and hijack a couple of threads.
If we're in the mood, we can use Karl Rove tactics to attract new members to GIMPS by making real asses of ourselves in general and starting fights with everyone who said something positive about gimps in particular.

[QUOTE]
The spin doctors are busy again today. Obama is not going to nationalize the banks. Unfortunately, the market is rapidly forcing his hand. I predict that at least 2 of the major banks will fail within 60 days because of plunging consumer confidence.
[/QUOTE]

It seems we have a WINNER! Citi is now asking good old Uncle Sam to take a 40% equity position. Citi's share price is sub $2 and all indications are that it will drop significantly today unless they can get a major stabilization deal worked out. Care to guess who will be next on the block?

DarJones

[QUOTE=Fusion_power;163684]It seems we have a WINNER! Citi is now asking good old Uncle Sam to take a 40% equity position. Citi's share price is sub $2 and all indications are that it will drop significantly today unless they can get a major stabilization deal worked out. Care to guess who will be next on the block?[/QUOTE]
Both Bank of America and Wells Fargo appear to be strong candidates ... with all the distress-sale mergers in the past year, there aren't that many humongo-banks left standing. As Nouriel Roubini said in an interview in [url=http://www.rgemonitor.com/roubini-monitor/255672/nationalize_the_banks]yesterday's WSJ[/url], [i]"You can't take two zombie banks, put them together, and make a strong bank. It's like having two drunks trying to keep each other standing."
[/i]
On to today's news roundup:

----------------------------------

[url=http://www.bloomberg.com/apps/news?pid=20601103&sid=a0XfqNIA7KA4&refer=news]U.S. Regulators Pledge More Money for Banks as Stress Tests Set to Begin[/url]: [i]U.S. financial regulators pledged to inject additional funds into the nation’s major banks to prevent their collapse and will this week begin examinations to determine if they have enough capital.[/i]

[i]My Comment:[/i] If the banks were anything remotely well-capitalized, you wouldn`t have had to already throw hundreds of billions at them to keep them from collapsing, would you? The banks already had the most meaningful kind of stress test last year, and failed it dismally. Running some computer model - probably designed by the same kinds of folks who designed the arbitrage software that got the banks and hedge and hedge funds into such deep doo-doo to begin with, all while telling them that being leveraged 40-to-1 with toxic bad-mortgage-loan garbage was "manageable risk" - to assess solvency when the banks are already clearly insolvent even with massive government props, is an exercise in futility at best, and a dangerous overreliance on computer models to predict the unpredictable at worst. I keep saying it: Not one of these financial and policy whizzes appears to have learned a goddamned thing from the collapse of the LTCM hedge fund a decade ago, or from the bursting of the Japanese real estate bubble in the late 80s. And now the stakes are not just one overleveraged hedge fund, but an entire (also overleveraged) economy.

And speaking of insolvent financial institutions...

[url=http://www.bloomberg.com/apps/news?pid=20601103&sid=aNbr6ECVkOn4&refer=news]Janus Ratings Lowered to Junk by S&P Amid Stock-Market Rout; Shares Slide[/url]: [i]Janus Capital Group Inc.’s ratings, including its counterparty credit rating, were lowered to BB+, or junk, from BBB- by Standard & Poor’s Ratings Services.[/i]

[i]My Comment:[/i] Anybody here have investments with Janus? It would seem that their in-house mythical [url=http://www.nationmaster.com/encyclopedia/Janus-(mythology)]two-faced deity[/url] has been spedning rather too much time looking sideways at its rivals (i.e. the chasing-yield game) left and right rather than forward and backward.


[url=http://www.bloomberg.com/apps/news?pid=20601109&sid=aGqIiR1PCrq8&refer=news]Geithner Bad Bank Alternative May Depend on Cut-Rate Loans to Hedge Funds[/url]: [i]Treasury Secretary Timothy Geithner’s financial-rescue plan may be doomed if he doesn’t offer low-cost loans to hedge funds and other investors to help them buy toxic assets weighing down bank balance sheets.[/i]

[i]My Comment:[/i] Ooh, taxpayer-financed cut-rate loans to help hedge funds leverage up on toxic waste ... yeah, that`s a *really* good idea. Like his predecessor at Treasury, [strike]Paulson the Younger[/strike] Geithner appears to believe his key constituency is the Wall Street banksters and Hedge Fund Masters of the Universe.


[url=http://www.bloomberg.com/apps/news?pid=20601085&sid=aGd5Xpy4TCgM&refer=europe]European Bank Bond Risk Soars to Record, Credit-Default Swap Prices Show[/url]: [i]The cost of protecting against a default on senior and subordinated bank debt soared to a record in Europe, credit-default swap prices showed.[/i]

[i]My Comment:[/i] Several of the most-prominent members of the small coterie of economic analysts who have been consistently right about macroeconomic trends in the past several years - notably Nouriel Roubini, Ambrose Evans-Pritchard and Mike Shedlock - have been sounding the alarm bells the past several months about Eastern Europe, Russia and the Baltics, and Western European Banks` massive bad-loan exposure to same, and warning of an imminent "credit event" originating there. The amount of monetary exposure there [url=http://www.lewrockwell.com/north/north689.html]may even dwarf[/url] the bad-loan exposure of the U.S. banks, hard as that seems o believe.


[url=http://www.bloomberg.com/apps/news?pid=20601085&sid=a18nxh0Mc10Y&refer=europe]Brown Says Depression When He Meant Recession as Approval Slips With Banks[/url]: [i]Responding to questions in Parliament on Feb. 4, U.K. Prime Minister Gordon Brown made the financial crisis sound worse than he intended. “We should agree as a world on a monetary and fiscal stimulus that will take the world out of depression,” he said, stumbling before the last word.[/i]

[i]My Comment:[/i] I think Brown indeed meant "depression" but meant to *say* "recession". Mustn`t have the citizenry spooked by ugly reality, now ... must maintain comforting official delusion that "the problem is bad but manageable".

I didn't know that I could get this P.O. ed. This is a quote from ewmayer's Cut-Rate loans to hedge funds link just above.

[QUOTE]“This is potentially a way of increasing liquidity, and if you could do that it may get you to a place where you can start making new securitizations,” which would allow increased lending, said Lee Cotton, an investor and former president of the New York-based Commercial Mortgage Securities Association. [/QUOTE]

These jackasses don't seem to realize what got us in this mess to start with. They want the taxpayer to take all the risk and they get to take all the profit.

Here is a quote from Larry Reid [url]http://news.yahoo.com/s/politico/20090223/pl_politico/19174[/url]
[QUOTE]“It’s not nationalization, it’s protecting the taxpayers’ interests,” Reid (D-Nev.) told MSNBC’s Morning Joe program on Monday. ..........

Reid on Monday morning argued that the federal government has been involved in private sector for decades – taking over large chunks of the railroad and the highway system when those industries got into massive financial trouble.

“I think what we are doing in banking now at a time of distress is the right thing to do and we’re getting very close to stabilizing the banking industry," Reid told MSNBC.[/QUOTE]

Talk about semantics! These people can turn a piece of half raw castrated bull meat into a sizzling hot juicy t-bone steak, Washington Style.

DarJones

[QUOTE=Fusion_power;163704]


Talk about semantics! These people can turn a piece of half raw castrated bull meat into a sizzling hot juicy t-bone steak, Washington Style.

DarJones[/QUOTE]


I thought it was well known: Sizzle sells better than Steak.////

A Fashion Bull in a Financial China Shop
 

[QUOTE=R.D. Silverman;163733]I thought it was well known: Sizzle sells better than Steak.////[/QUOTE]

And the MSM (mainstream financial media)'s appetite for being fed bull is insatiable.

I forgot to post this when it first came out, thankfully I had saved the link - I found the "real bankers are far more dangerous, and don't need guns" angle wryly amusing:

[url=http://www.time.com/time/arts/article/0,8599,1879148,00.html]Time.com Movie Review | The International: The Banker As Bad Guy[/url]
[quote]Clive Owen, your standard-issue obsessed movie hero, fights for the length of [I]The International[/I] to bring down the rogue bank IBBC, which has committed financial and war crimes on a vast scale. Don't waste your time, or your life, says bank biggie Armin Mueller-Stahl. "The system guarantees IBBC's safety — because everyone is involved." This corrupt bank will be protected, in other words, by all the other corrupt banks. And regulators. And politicians.

...

The challenge for The International — for any thriller that's waist-deep in cynicism — is to create a goal the hero can achieve, whether or not that makes any difference. In the movie world, Clive Owen can track, find and eliminate the bad guy. [u]In the real world, a banker like Skarssen is just one bad guy; and a million more just like him, in London, Geneva, Hong Kong and lower Manhattan, are panting to take his place. They all know that, these days, banks don't even have to steal to increase their wealth. They take a congressional slap on the wrist, then pocket trillions from the Treasury[/u].[/quote]

----------------------------------

Yves Smith over at [i]Naked Capitalism[/i] has a piece about the "complete joke" nature of the government-announced "stress test" of the big banks - I find the quote from the "unnamed official" which I underlined to be very telling:
[url=http://www.nakedcapitalism.com/2009/02/now-its-official-stress-test-results.html]NakedCapitalism.com | Now It's Official: Stress Test Results Pre-Determined[/url]
[quote]We have been skeptical that the pending Treasury stress tests on banks, designed to ascertain their state of health, were inadequately staffed and therefore could not do the job properly. Our big concerns were that they had too few bodies to test financial data versus underlying documentation adequately (usually done on a sampling basis) and they lacked the expertise (and perhaps the mandate) to vet risk models (which we all know have performed impeccably over the last two years.

Is it a test if the results are pre-determined? Apparently Team Obama thinks so.

From CNBC (hat tip reader Early Withdrawal):
[i]
Said one high-level official, “I think the market is missing that [u]the whole intent of this process is to show that the banks have enough capital for even worse outcomes than we currently envision[/u] and to show there’s a program in place to give banks access to that capital if they need it.”[/i][/quote]
[i]My Comment:[/i] note, not "...to show [b]whether[/b] the banks have enough capital...", but "...to show [b]that[/b] the banks have enough capital." Am I reading too much into the statement, or did the "unnamed official" tip his hand? "Whether" certainly fits better with the rest of the sentence.


As a followup to my note above about where Treasury Secretary Geithner`s loyalties lie, [i]The Big Picture[/i]'s Barry Ritholz has a post this morning titled

[url=http://www.ritholtz.com/blog/2009/02/why-bankruptcy-for-autos-not-banks/]Why Bankruptcy For Autos But Not Banks?[/url]
[quote]The news this morning would be amusing if it weren’t so sad.

The Obama administration is undergoing a battle between its own good instincts with those of its Treasury Secretary.

Away from Treasury, on the side of intelligence, new policies, a clean break from the Paulson/Bush plans — I believe during the campaign, it was called CHANGE — and inevitability, are prepackaged bankruptcies, clean balance sheets, and a fresh start. This is reflected in the Fed exploration of $40 billion in bankruptcy funding for GM.

On the side of more of the dame, bad decision making, regulatory capture, worshiping sacred cows, and a hard-to-understand goal of saving the banks rather than the financial system, is the utterly absurd proposal to somehow spend 10X the market cap of Citigroup for a 40% stake in the apparently insolvent firm.

This is an accounting maneuver, a convertible preferred that greatly dilutes the common shares, and adds no new capital. Put on paper, it allows the leverage to look less egregious.

One can imagine an incredulous junior Treasury staffer — one who hasn’t been captured by the big banks, and is capable of basic arithmetic — saying the following:

[i]“Explain this to me again: We put in many times the value of this company — we have already given them $45 billion dollars, and guaranteed almost $300 billion dollars worth of bad paper — and we get less than 50%? WTF? How the hell does THAT work? “
[/i]
Its apparent that this sleight of hand doesn’t work to just about everyone except Tim Geithner (and a few others).

At the same time, an industry that had nothing to do with the current crisis is on the fast track to a healthy pre-packaged bankruptcy.

Moral Hazard aside, the different approaches reflect the relative importance of different sectors. Banks must be saved at all costs, but GM and Chrysler must go the bankruptcy route. The only explanation in treating the two industries so radically differently is an overt hostility to Unions on the part of many.[/quote]
[i]My Comment:[/i] Actually, I think anti-union sentiment may be playing second fiddle to the well-established "United States Treasury ... A Wholly-Owned Subsidiary of Goldman Sachs Inc." effect.

And I would be remiss to omit Mish`s [url=http://globaleconomicanalysis.blogspot.com/2009/02/purposeful-joint-lie-by-treasury-fed.html]commentary[/url] on the related (announced Feb 10th) Capital Assistance Program for the oh-so-well-capitalized banks:
[quote][i]"This new capital will not cost anyone anything. It will be dispensed by magic fairies and recovered at a later date. We cannot share exactly how this magic works because under the rules of the magic ministry, we would be stripped of our magic hats and lose the rights to dispense magic if we did. Trust us. This is the proverbial free lunch that everyone says does not exist. However, like magic pixie dust, it does exist, it really does."[/i][/quote]

----------------------------------

[b]Why Financial-Panic when You /can Accessorize?[/b]

With the next wave of bank nationalizations possibly just around the corner, I spent a few minutes poking around the "Collectibles > Historical Memorabilia > Banking & Insurance" section of eBay, and came across several items which you might find interesting.

First off, we have this very spiffy [url=http://cgi.ebay.com/AIG-AMERICAN-INTERNATIONAL-GROUP-Wall-Clock_W0QQitemZ320342713908QQcmdZViewItemQQptZLH_DefaultDomain_0?hash=item320342713908&_trksid=p3286.c0.m14&_trkparms=72%3A1205%7C66%3A2%7C65%3A12%7C39%3A1%7C240%3A1318%7C301%3A1%7C293%3A1%7C294%3A50]quartz wall clock[/url] with its reassuring message. (AA Battery not included, but AAA rating from Standard & Poors is).

And there is also a stylish, historic and only-a-tad-ironic [url=http://cgi.ebay.com/BEAR-STEARNS-ASSET-MANAGEMENT-CAP-ALL-BRAND-NEW_W0QQitemZ220323434532QQcmdZViewItemQQptZLH_DefaultDomain_0?hash=item220323434532&_trksid=p3286.c0.m14&_trkparms=72%3A1205|66%3A2|65%3A12|39%3A1|240%3A1318|301%3A1|293%3A1|294%3A50]baseball cap[/url].

As for me, I opted for a [url=]spiffy polo shirt[/url] - that should go well with the dark-blue Bear Stearns logo cap I bought last summer:

Just heard two interesting ideas:

1) Proposal for government bailouts: Instead of handing out cash, issue vouchers to banks that can be redeemed only after they are used to grant new loans. The idea is to give the banks ability to make new loans without allowing the funds to be diverted to any other purpose (e.g., bonuses, mergers). (You know -- like the school vouchers beloved by conservatives, so it should be welcomed by them.) Also, put an expiration date on the vouchers -- so the banks have to use 'em or lose 'em.

I don't know whether such vouchers help the problem of a bank's inadequate capitalization, but I don't pretend to understand all the details anyway.

2) There's a bank in a small Italian town that has three warehouses holding a few hundred thousand parmesan cheese wheels, each worth up to $3000 ([I]tractor-wheel-sized[/I] cheese wheels) -- collateral for its loan to a major cheese producer. The producer regularly inspects, and supervises rotation of, the stock. A bank guy (named Maxwell?) taps wheels with a silver hammer to check for the sound of voids or internal mold damage. The loans have a low interest rate because the cheeselateral is entirely under the bank's control.

[QUOTE=cheesehead;163750]Just heard two interesting ideas:

1) Proposal for government bailouts: Instead of handing out cash, issue vouchers to banks that can be redeemed only after they are used to grant new loans. The idea is to give the banks ability to make new loans without allowing the funds to be diverted to any other purpose (e.g., bonuses, mergers). (You know -- like the school vouchers beloved by conservatives, so it should be welcomed by them.) Also, put an expiration date on the vouchers -- so the banks have to use 'em or lose 'em.
I don't know whether such vouchers help the problem of a bank's inadequate capitalization, but I don't pretend to understand all the details anyway.[/QUOTE]

This doesn't work because of 'moral hazzard' phenomena. For instance, the bank can give someone, who is deep in debt a loan at 50% interest per day. This someone then goes to a casino (i.e. invests into something with negative expected payoff with a large variance), places everything on black: if he wins, he and the bank make a nice profit. If he loses, no problem: he and the bank would have gone bankrupt anyway and the taxpayer is left with the loss. Funding investments that have negative payoffs, is a bad allocation of capital.

Letting the bank fail is the only option that doesn't make things worse. For my thesis I studied the S&L crisis a lot, so I'm a bit of an expert on this. In my thesis I examined capping the interest rate for deposits by law, which eliminates competition between the banks, which would result in higher expected future profits and a lower incentive to gamble. There is a point where there is so much debt that regulation would force people to actually pay the bank interest for depositing money, which is of course nonsense.

[QUOTE=cheesehead;163750] 2) There's a bank in a small Italian town that has three warehouses holding a few hundred thousand parmesan cheese wheels, each worth up to $3000 ([I]tractor-wheel-sized[/I] cheese wheels) -- collateral for its loan to a major cheese producer. The producer regularly inspects, and supervises rotation of, the stock. A bank guy (named Maxwell?) taps wheels with a silver hammer to check for the sound of voids or internal mold damage. The loans have a low interest rate because the cheeselateral is entirely under the bank's control.[/QUOTE]

Adimit it, you only mentioned this because of your nick...

Or are you suggesting regulation that the Citi-bank demand that people deposit Parmesan cheese before they get a mortgage? Let's also create regulation that lets banks accepts houses as collateral to finance the pruchase of Parmesan cheese, to finance a house, to finance cheese, to finance a house...problem solved?

Cheesehead,

Gaming the system is a well entrenched American tradition. Consider the state lottery. Florida officials sold the lottery to their citizens by saying "Look how much more money we will raise for education!". At the time, the state was forking out several hundred million dollars per year for education from tax revenues.

Fast forward a few years and now they have the state lottery and it is indeed bringing in hundreds of millions for education, but guess what, the state stopped using tax dollars for education. The end result is that education is getting about the same total dollars with the lottery that they were getting before the lottery.

Now apply this scenario to your 'vouchers' that banks could use to make loans with.

DarJones