Comments on: How Long Can You Tread Water?

By: Concerned Citizen

Concerned Citizen — Sat, 28 Mar 2009 03:55:12 +0000

Absolutely correct, Sammie. Bankruptcy is the answer, but since these are banks, we need to step in to protect the depositors. No need to “price protect” buyers of these toxic assets and give even more money away.

The people being protected by the bailout are the counterparties to all the derivatives…sovereign wealth funds, hedge funds and foreign banks. They should all burn in hell.

By: LD

LD — Fri, 27 Mar 2009 22:02:37 +0000

CG…..given that you have asked in that frame of reference, my personal feeling is that the market will trade in a range for the next few months but ultimately I do think the path of least resistance is to lower prices.

Please read my most recent post at my site Sense on Cents which I just posted addressing earnings. It is not a time sensitive piece and I will cross post it here.

By: CG

CG — Fri, 27 Mar 2009 21:54:59 +0000

LD, after reading your posts and listening to your radio programs it is obvious you intend to inform, and it is obvious that this is one enormously complicated mess we are in, as you have attempted to expose in the course of your service to those of us following. Larry Johnson mentioned in a post not too long ago that his buddies believe that the market would improve (and it has) but then it would fall rather substantially. So far, from following your works, I don’t see how we will see any improvement in a long period of time. I don’t have debt, I live modestly, I own a home, I am years off from official retirement and have a ML portfolio. Should I get out of the market, I’m pretty sure i know what my financial adviser at ML would say, so I am just curious what you think about the outlook. Oh, and I can’t afford to lose much more in the market if I hope to have a future. I know you probably don’t want to touch this, but I would appreciate a bone at this point and would never bite your hand.

By: cynic

cynic — Fri, 27 Mar 2009 20:49:53 +0000

I presume you all have Snidely Whiplash moustaches… *S*

By: LD

LD — Fri, 27 Mar 2009 20:40:42 +0000

you bankers? every single one? don’t trust anyone?

when did we meet?

By: LD

LD — Fri, 27 Mar 2009 20:26:29 +0000

Ellen,

There are some legitimate instances in which mark to market should be relaxed. In my opinion, though, those instances are few and far between.

In its totality, I do believe that a relaxation of the mark to market is an attempt to buy time and forestall losses. That is a version of the smoke and mirrors.

Are we saved? No, we’re tricked, if we allow ourselves to be.

By: Miss H

Miss H — Fri, 27 Mar 2009 20:07:49 +0000

Why don’t you bankers and so called financiers admit that you are just a bunch of crooks with your Ponzi schemes and evil derivatives. Wake up America, the bankers are bleeding you dry with their multi-trillion dollar bailouts, ie theft. Don’t trust anyone in the financial, mortgage, insurance, and stock industry. They are robber barons and would like to control and tax all of America forever. Watch them go after Social Security and Medicare. Like a Pit Bull on a bloody bone, if these financial “wizards” smell money, they will attack and attempt to control it. Here it comes, world currency and carbon taxes. Beware IMF World Bank monetization.

By: cynic

cynic — Fri, 27 Mar 2009 19:45:13 +0000

Why is the administration making the case for new and unprecedented powers at potentially Treasury, Fed, and FDIC to overtake non-financial institutions?

I’m not entirely clear on what is meant here by “non-financial institutions”. I get the impression that we might actually mean non-depository financial institutions. If that’s what is meant, a case can be made that maybe the government should have that expanded power.

The government would certainly be in a better position to deal with a situation like AIG if they had it. The situation might not have come up in the first place, because CEOs would be aware of the personal consequences of irresponsible business practices. Pull one like they’ve done at AIG, and you wouldn’t be in a position to work angles to your continuing advantage at the taxpayers’ expense; you’d be standing outside on the sidewalk, and wondering about the extent that you might be implicated in something that went well beyond a pattern of bad business decisions.

By: Ellen D

Ellen D — Fri, 27 Mar 2009 19:08:25 +0000

L.D. please explain what’s going to happen if the mark-to-market accounting rule is changed as is being considered. Are we all saved if smoke and mirrors are legitimized?

By: jbjd

jbjd — Fri, 27 Mar 2009 18:51:45 +0000

Dateline NBC had a great show last Sunday describing in lay terms how we got into the current economic crisis, featuring Professor Warren from Harvard. She was fabulous. They are airing part 2 tonight and part 3 on Sunday.

http://www.law.harvard.edu/news/2009/03/24_warren.html

By: Northwest rain

Northwest rain — Fri, 27 Mar 2009 16:43:24 +0000

Ironically my husband and I drove through California and noted all the new subdivisions, many were at a standstill (credit frozen??).

We are now driving through the Southwest — and again we see massive numbers of new subdivisions all fairly recent. How many of these are now ghost towns or nearly so as foreclosures hit the home owners??

The other question — where is the water coming from to fuel these subdivisions in the deserts of California and the Southwest??

I’ve seen no follow-up about where the former home owners go after foreclosure and eviction. Could be to the RV parks — where trailers and RVs are crammed in, inches from each other. Some of the RVs belong to snow birds — but many look as if they have been in place longer.

And then we were in a boom town — OIL!! Hobbs N.M. — the major industry is oil. Lots of new wells being drilled. So some areas of the country are able to get credit — so many small and medium oil service industries with huge inventories of NEW trucks and equipment and NEW buildings. I’m betting that all of these were bought with credit.

By: Sammie

Sammie — Fri, 27 Mar 2009 15:28:38 +0000

“To that end, they are making the case now for new powers to step in, take over certain institutions that may pose real systemic risk, and methodically liquidate them.”

_____________________

What’s the benefit of having the treasury take over these institutions over having them file for bankruptcy? Does anyone fear the type of precedent and concentration of powers this would establish?