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Beware of Bailout (AIG, Lehman, Merril and WaMU can solve their problems without government)
Human Events ^ | Sept 26, 2008 | Mark Skousen

Posted on 09/26/2008 8:29:29 PM PDT by SeekAndFind

“It's a terrible idea. It's undemocratic. It's bad economic policy, and it's bad social policy. And it has a very little chance of solving the problem in a meaningful way.” -- Allan Meltzer, Carnegie-Mellon University

Beware of politicians or business leaders who say, “I’m a firm believer in the free market, but…”

“But” thinkers have come out of the woodwork during this financial crisis: Conservative economist Bruce Bartlett proposes tax increases…..Patrick Byrne, the new CEO of the Milton and Rose Friedman Foundation who calls himself a “classical liberal,” demands that Congress impose a transactions tax on every stock market transaction to stem speculation. (This so-called “Tobin Tax,” named after Yale economist James Tobin, would reduce liquidity and make buying and selling stock more difficult.)

Then, of course, there’s Secretary Hank Paulson himself. A former CEO of Goldman Sachs, he professes to be a strong free-marketeer. "But we must act or face disaster," he warns. Then he proposes the largest power grab in history. Have you seen Section 8 of the bailout plan? It states: "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."

If this stands, it is giving incredible and unprecedented dictatorial power to the Secretary of the Treasury.

Fortunately, there are a few sane voices out there. I was delighted to see that Allan Meltzer, a famous monetary expert from Carnegie-Mellon, lambasted the $700 billion bailout in a PBS interview yesterday.

Meltzer is writing a multi-volume history of the Federal Reserve. He drew upon his extensive background as a monetary historian to criticize Secretary Paulson’s handling of the credit crisis. “I've listened to governments tell me for 40 years that there was a crisis and the world was going to fall apart if we didn't do this or that,” he said. “But there have been a few cases where they weren't able to do that. One was the commercial paper crisis in 1970. There have been several others. The world did not fall apart.

Consider:

* Last week, we had Lehman Brothers went into bankruptcy. Within three days, most of the assets were sold.”

* AIG had three offers to buy the company before the government took over and offered a better deal.

* Merrill Lynch was sold to Bank of America when it ran into trouble.

* Last night it was announced that JP Morgan bought Washington Mutual’s deposits.

Meltzer concludes, “We need to get the government's hand out of this, and let's see whether we can't get a market solution.”

Given that monetarists often favor intervention during a crisis, it's great to see Meltzer taking a strong laissez faire stance.

Where's J. P. Morgan When We Need Him?

I too am a historian of finance, and one of my favorite stories is the Panic of 1907. It has some similarity to the current situation, because in 1907 there were some runs on the banks and the credit markets froze up. J. P. Morgan, the quasi central banker, invited all the major bankers in New York to his library, locked the doors, and said he wouldn't let anyone out until they had raised the funds to end the credit crunch. It worked.

Secretary Paulson and chairman Bernanke should do the same and not depend on Congress. They should invite all the major bankers to a meeting in New York, and raise capital to solve the liquidity crunch. They might invite Warren Buffett and Alan Greenspan to help out. Meltzer suggests the Treasury might help in lending funds if necessary: “If they're going to do something, then what they ought to do is make loans, which the financial institutions have to repay with interest. And if you think -- that's an idea which the Chileans have used in a bigger crisis than this for them in 1982, and it worked for them.” But it should not nationalize banks and mortgage companies, and get involved in the commercial banking business.

History is holding its breath. In the next couple of days, we will witness one of the greatest tests of American will, whether we will stand for economic freedom or doom ourselves to a new form of tyranny.

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

Mr. Skousen is a financial economist, author and university professor. He has been the editor of the financial advice newsletter, Forecasts & Strategies, for 26 years. Two of his books highlight Milton Friedman's career: "The Making of Modern Economics" and "Vienna and Chicago, Friends or Foes?." Check out his latest book, "EconoPower: How a New Generation of Economists is Transforming the World." He is the producer of FreedomFest, the world's largest gathering of free minds, in Las Vegas every July.


TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: 110th; aig; bailout; bailouts; economicpolicy; financialcrisis; humanevents; lehman; merril
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1 posted on 09/26/2008 8:29:30 PM PDT by SeekAndFind
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To: SeekAndFind

I am willing to bet that Wamu can’t.


2 posted on 09/26/2008 8:34:52 PM PDT by cw35
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To: SeekAndFind

I hate to say it, but I am not optimistic.


3 posted on 09/26/2008 8:36:23 PM PDT by downtownconservative (Intelligence sans reason is vainglorious pulp)
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To: SeekAndFind

F*** the bailout.


4 posted on 09/26/2008 8:38:55 PM PDT by MIT-Elephant ("Armed with what? Spitballs?")
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To: cw35
I am willing to bet that Wamu can’t.

Can't what ?

They just go taken over by JP Morgan. That didn't require taxpayer money for them to do it.
5 posted on 09/26/2008 8:43:33 PM PDT by SeekAndFind
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To: SeekAndFind

“Conservative economist Bruce Bartlett proposes tax increases”

WTF? Even socialists know that tax increases slow economic growth.

“I too am a historian of finance, and one of my favorite stories is the Panic of 1907. It has some similarity to the current situation, because in 1907 there were some runs on the banks and the credit markets froze up. J. P. Morgan, the quasi central banker, invited all the major bankers in New York to his library, locked the doors, and said he wouldn’t let anyone out until they had raised the funds to end the credit crunch. It worked.”

This is extrememly important, and should be popularized in the historical consciousness. J.P. Morgan thought that all business needed when recession loomed was more money. What he probably didn’t understand that too much money is the problem in the first place, for easy credit incentivizes wasteful investment.

I guess he got tired of talking all his buddies into opening the faucets, for by 1913, America had a real central bank, the Federal Reserve System, which could pump money into the economy whenever it wanted. The result? More recessions than we’ve known what to do with ever since. Inflating the currency is not a solution to a “credit crunches.” Why? The only reason credit is so tight now, as then, is that it was far too loose in the immediate past. Only saving can cure a credit crunch. Save now!


6 posted on 09/26/2008 8:45:23 PM PDT by Tublecane
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To: MIT-Elephant
JP Morgan was sick at the time

Then in 1910. The Federal reserve was structured and enacted in 1913.

We are at that moment again.

7 posted on 09/26/2008 8:47:55 PM PDT by scooby321 (Cai)
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To: SeekAndFind
The Paulson plan does not nationalize banks, it buys securities.

The Paulson plan is not an unreviewable dicatorial power grab, that is and always has been a baseless fearmongering smear, and beneath the seriousness of this crisis.

Buying securities is a more arms-length transaction than extending loans. Being a creditor among other creditors would be closer to nationalization. Who'd be senior in a default, for instance? We all know who.

The private resolutions series leaves out the little fact that each one caused the next is an accelerating cascade, which only slowed on the bailout plan itself, and massive Fed intervention.

Also, every single one of those moves had to be coordinated by the Fed. Without Fed prodding and Fed financing, this entire thing would have comprehensively crashed and burned months ago.

The Fed *is* the successor of JP Morgan, and it is doing his job.

If the Fed were a for profit institution, it would be arbitraging the huge spread between corporates and treasuries, in banks it decided to keep from failing.

The money market run rate hit $160 billion per day before the Paulson proposal and money fund guaranteed halted it. Without massive Fed intervention, that would have destroyed the entire commercial paper market, and dropped the money supply by a third. The Fed had to and did intervene.

The Washington Mutual failure was such a great big success because a $25 billion hit was put on the bondholders, and JP Morgan was able to raise $10 billion in stock to cover the remainder, on the strength of those bondholders having been stood against the wall. Only that gave the part JP Morgan bought, actual value.

But that loss to bondholders instantly sent every bond of beseiged banks into free-fall. Wachovia debt was offered today at 130% - with no buyers. Its longer term paper as low as 30 cents on the dollar. Crushed stock prices have closed the equity market for new capital for these banks. The Washington Mutual failure closed the bond market as well.

Washington Mutual itself was a zombie that financed at $16 billion depositor run only by running up borrowings from the Home Loan Banks. It had no non-public capital sources.

Banks need to raise hundreds of billions by year end just to roll over existing bonds, without it recapitalizing them at all. They aren't going to do so at 130% rates and survive.

It isn't just Wachovia. National City today, 60% yield. Morgan Stanley, despite a large recent capital infusion from Asia for stock, 40% yield. Bank bonds are simply now traded as junk for any institution with default risk, as being essentially uncovered, because the depositors are senior and the FDIC has shown the bondholders will get nothing, if it is necessary to protect the FDIC.

There are only two ways out of this mess, and private markets healing themselves is not one of them. Either the Treasury buys the toxic paper, or the Fed monetizes corporate debts of financial companies. Or half the paper in the commercial paper market, if it doesn't want to play favorites. In both cases for new high powered cash, ballooning the money supply to saturate people's risk aversion and liquidity demands.

Otherwise the Treasury still gets the bill, via the FDIC. And half the banking system disappears. Which will mean violent deflation and further economic losses, public and private.

It is simply not possible to allocate the remaining loss to the existing banks. They will go down.

8 posted on 09/26/2008 8:50:34 PM PDT by JasonC
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To: SeekAndFind
See post #8. The way Wa Mu was resolved spared taxpayers at the cost of closing the bond market to US banks.
9 posted on 09/26/2008 8:51:53 PM PDT by JasonC
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To: MIT-Elephant

>> F*** the bailout.

Fund the bailout???

No way!!!

;-)


10 posted on 09/26/2008 8:52:10 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: JasonC
The way Wa Mu was resolved spared taxpayers at the cost of closing the bond market to US banks.

Assuming it did, does that mean that the bond market will fail to trade again once the coast is clear ?

I highly doubt that. Don't get me wrong, there will be pain and suffering in the short term, but it will be better in the long run.
11 posted on 09/26/2008 8:54:48 PM PDT by SeekAndFind
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To: SeekAndFind

They didn’t get taken over by JPM, they got taken over by the gov’t then sold to JPM. They failed.


12 posted on 09/26/2008 8:59:12 PM PDT by cw35
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To: cw35
They didn’t get taken over by JPM, they got taken over by the gov’t then sold to JPM. They failed.

Of course they failed, but what was the cost to the taxpayer ? If it is nothing, then the government was simply an INTERMEDIARY, not an owner. Which is as it should be.
13 posted on 09/26/2008 9:01:53 PM PDT by SeekAndFind
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To: JasonC

>> The Paulson plan is not an unreviewable dicatorial power grab, that is and always has been a baseless fearmongering smear, and beneath the seriousness of this crisis.

You’re a liar. Here is the actual text of the draft proposal.

“Sec. 8. Review.

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.”

Calling it an unreviewable dictatorial power grab is perfectly correct. Not a smear at all.


14 posted on 09/26/2008 9:03:42 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: JasonC

>> But that loss to bondholders instantly sent every bond of beseiged banks into free-fall.

So what? What you term “beseiged” — a euphemism for “banks that got greedy and f_____ up” — deserve to go into free fall.

Solid banks are fine.

BAC was up a couple bucks today. JPM was in good enough shape to buy WaMu (another of your buttboy banks).

Well run banks will do great. Crap banks run by greedy fools will die. I don’t see the problem.


15 posted on 09/26/2008 9:07:32 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: Nervous Tick
It is a smear, because that is mere legal boilerplate to prevent every jackass with a lawyer from disputing every price until doomsday. Oversight is with *congress*, where it belongs, when it is a matter of the public's money. Not with a judge or a pack of private lobbyist lawyers. Everyone knows this is true, even those trying to smear the bailout because they oppose it for other reasons. They are merely imposing on the legalese understanding of the American people.
16 posted on 09/26/2008 9:08:35 PM PDT by JasonC
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To: SeekAndFind

My point was that WAMU can’t be solved without gov’t help. They failed so they weren’t able to solve the problems on their own.


17 posted on 09/26/2008 9:08:36 PM PDT by cw35
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To: JasonC

>> that is mere legal boilerplate

That’s your opinion. I disagree. I think Paulson doesn’t want to be bothered with justification as his pals game the system to unload their toxic crap on the taxpayer at top dollar. Prove I’m wrong.

>> Oversight is with *congress*, where it belongs

And they’re performing the role! Congress (particularly the Republican part) is exercising its oversight. You should be happy they’re killing the idiotic piece of shit. Smarter people than you (along with 70% of the electorate) are calling “bullshit” on this crappy turkey and killing it. Since you’re a big believer in Congressional oversight you should be overjoyed.


18 posted on 09/26/2008 9:15:27 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: Nervous Tick
There aren't any solid banks if this continues. Bank of America and JP Morgan have to pay 8% and up, with the Fed funds rate at 2%. They are OK in the short term due to deposit financing at 3% or so, so the pay the higher market rates on only a portion of their required capital. But no financial institution can long survive lending to me, at rates so low I can lend it right back to them and make money. Nor is any bank sound in the face of $160 billion a day runs, as hit the money fund market last week - at least without Fed intervention.

If stockholders in poorly run banks lose money, fine, they should, no problem. They already have to the tune of several trillion, in case nobody noticed. But the bond market shutting down for banks is a different story. The money supply will be cut in half.

Net mortgage issuance in the second quarter was $80 billion, according to the recently released Z.1 flow of funds data from the Fed. That is down 93% from the boom rates, and an order of magnitude under normal. Want to see what rates on mortgages are with record defaults when the banks have to pay 40% to borrow, themselves? What to see what houses are worth without mortgages?

It is just nuts.

Morgan Stanley was one of the best run operations, not a basket case like Wa Mu. But it doesn't matter, if the rates on its bonds are driven high enough, it fails.

The system is only designed to work if the Fed does its job. Ideologues want the Fed to not do its job in the name of killing weak banks. If the Fed didn't exist, banks would make one as a defense for themselves. But you have concocted a preferred policy mix of a Fed in existence but forced to do nothing out of your populist hatred, that cannot function, and ends only in first smash, and second socialism.

Again, it is just nuts. You are trying to wish into existence an unreality, instead of looking at what is actually happening. It is every bit as reckless and irresponsible as the left pretending war is optional and we can just pretend it away.

19 posted on 09/26/2008 9:20:13 PM PDT by JasonC
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To: Nervous Tick
Paulson and everyone else said they wanted congressional oversight from the start, everyone understands it, it was never anything but a smear. You believe it because you want a stick to beat the proposal with, that is all.

The patient is lying on the table having a heart attack, and you are impugning the attending physician's motives and demanding he remove the heart and burn it as the cause of the problem, while objecting to needles as painful. It is just nuts that rational men have to beg you to let them save your sorry backside.

20 posted on 09/26/2008 9:23:04 PM PDT by JasonC
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To: JasonC

Let’s take this step by step.

>> Bank of America and JP Morgan have to pay 8% and up, with the Fed funds rate at 2%.

BofA and JPM have to pay WHO 8% for WHAT?


21 posted on 09/26/2008 9:23:42 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: Nervous Tick
The electorate will not applaud your listening to them or your grand courage, when your preferred policy blows up in your face and theirs, and buries them in the rubble. All that matters is a sound policy, and yours is not sound.
22 posted on 09/26/2008 9:24:55 PM PDT by JasonC
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To: Nervous Tick
Bond holders or preferred holders to borrow capital.
23 posted on 09/26/2008 9:25:28 PM PDT by JasonC
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To: JasonC

>> Paulson and everyone else said they wanted congressional oversight from the start

I don’t understand. You say Paulson (and, by extension, you) want congressional oversight.

Well, they’re getting it. Right now. At the earliest stages of implementation.

But Paulson (and, by extension, you) are unhappy with that.

So — either Paulson (and, by extension, you) VALUE the opinion of Congress as overseers, and so are happy to let Congress deliberate on the bailout, and then oversee it.

Or — you DON’T value or want Congressional input, which takes us back to the “no review” clause. And that, despite your claims, makes Paulson (and, by extension, you) a liar.

Which is it?

Paulson (and, by extension, you) can’t have it both ways.


24 posted on 09/26/2008 9:28:56 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: SeekAndFind

Great article. Thanks for posting.


25 posted on 09/26/2008 9:30:07 PM PDT by PGalt
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To: JasonC

>> All that matters is a sound policy, and yours is not sound.

No, I’m sorry, that’s not fact, that’s rhetoric. From Paulson (and by extension, from you).

Of course you and Paulson believe your policy is sound.

But I disagree. I, and a lot of others that are just as well informed as you (and by extension, Paulson).


26 posted on 09/26/2008 9:30:55 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: JasonC

>> Bond holders or preferred holders to borrow capital.

Very good. Now...

How much must BAC borrow?
From whom?
Why?


27 posted on 09/26/2008 9:32:20 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: SeekAndFind
You don't get it - the Fed and FDIC had *one* bullet like that. They have sacrificed the bondholders this time, totally, whereas all the previous workouts tried to keep those whole. As a result, the debt markets for banks seized today. Rates from 40% to 130% for "investment grade" companies with $2 trillion in liabilities. Just today. The only reason the broader market didn't collapse on that news is everyone assumes there *will* be a bailout by Monday. Even so, Wachovia is in merger talks with Citi and Wells Fargo, because without a merger they may fail before the bailout becomes law. That's only the 6th largest bank, a mere $800 billion in liabilities, and the largest in the southeastern US.
28 posted on 09/26/2008 9:32:26 PM PDT by JasonC
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To: Nervous Tick
2 trillion all told and change, some of it from depositors, some from bondholders. To finance its entire asset position, in mortgages and business loans etc.
29 posted on 09/26/2008 9:33:28 PM PDT by JasonC
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To: Nervous Tick
Sec. 8 is pretty scary. And is probably un-Constitutional as well.

Paulson would rule as a monarch.

30 posted on 09/26/2008 9:34:53 PM PDT by Cyropaedia ("Virtue cannot separate itself from reality without becoming a principal of evil...".)
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To: SeekAndFind
Monday, September 8, 2008

WaMu replaces CEO, agrees to pact with regulators
"The New York Times reported that Fishman will receive a $10 million signing bonus from WaMu, of which $2.5 million will be a stock award based on performance."

Friday, September 26, 2008

CEO of failed WaMu could get millions
"WASHINGTON: The CEO of failed Washington Mutual Inc., on the job only a few weeks before the largest U.S. thrift was seized by the government and sold to JPMorgan Chase & Co., is entitled to more than $13 million in severance and bonus pay."

How's that for 3 weeks on the Job? Sorry, but this make my blood boil - MHO.

31 posted on 09/26/2008 9:35:05 PM PDT by 24-7Freeper
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To: JasonC

Give it up. You are not profiting from this crisis. The TAXPAYERS ARE. If we have to take our economy down so you get the HINT, so be it. Go ahead and make our day. We hold ALL the cards.


32 posted on 09/26/2008 9:35:50 PM PDT by VRWC For Truth (Palin is sugar on a turd ... No mas Juan "Traitor Rat" McAmnesty)
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To: VRWC For Truth

NO BAILOUT!


33 posted on 09/26/2008 9:37:58 PM PDT by VRWC For Truth (Palin is sugar on a turd ... No mas Juan "Traitor Rat" McAmnesty)
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To: JasonC

>> 2 trillion all told and change

Huh? I’m looking at the BAC balance sheet right now. Where do you get that number, as being how much they need to borrow at 8% interest? I think you’re high by a factor of 3.


34 posted on 09/26/2008 9:38:41 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: Nervous Tick
More specifically - $1.55 trillion in its own assets before the Merrill merger closes, and $931 billion more that Merrill has to borrow. All told, $2.48 trillion in debts that must be financed. Those debts are held against $2.68 trillion in combined assets, with the difference being the stock capital of both combined.
35 posted on 09/26/2008 9:39:41 PM PDT by JasonC
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To: Nervous Tick

Correction: you’re off by a factor of FIVE. Or more. I’m being generous with 5.


36 posted on 09/26/2008 9:40:00 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: JasonC

>> More specifically - $1.55 trillion

I call bullshit.

Where did you get that number?


37 posted on 09/26/2008 9:41:09 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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To: cw35

and AIG is now controlled by the Fed, no matter what.

if WB and NCC have runs by depositors the way Wamu did, they might not either (WB is apparently working on selling itself over the weekend in any event).


38 posted on 09/26/2008 9:42:00 PM PDT by WoofDog123
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To: SeekAndFind

they were not taken over by JPM - they were taken over by the FDIC, who then sold certain assets and (mainly) liabilities to JPM. Wamu is still a publicly traded company, destined very soon for the pink sheets with a big Q on it. Wamu bondholders are not happy either.


39 posted on 09/26/2008 9:43:18 PM PDT by WoofDog123
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To: JasonC

“It isn’t just Wachovia. National City today, 60% yield. Morgan Stanley, despite a large recent capital infusion from Asia for stock, 40% yield. Bank bonds are simply now traded as junk for any institution with default risk, as being essentially uncovered, because the depositors are senior and the FDIC has shown the bondholders will get nothing, if it is necessary to protect the FDIC.”

How much of this do you think is encouraged/caused by run-ups in cdswap prices? As I understand it, an increase in swap prices (by traders who often (or usually) do not even own the contra instrument they are hedging) does have an impact on this.


40 posted on 09/26/2008 9:45:14 PM PDT by WoofDog123
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To: Nervous Tick
No, I am giving their total financing needs. Some they can meet via deposits with interest costs only around 3% (mostly CDs and the like), but also with operating costs, obviously. For marketed debt specifically, BAC has $228 billion long term, and $416 billion short term. MER has $697 billion long term, only $19 billion short term - they deliberately drove that to near zero to avoid high refinancing costs in the short run. Combined, the new entity will need to maintain (at competitive rates, in the issuance market first off, but since that trades in line with the secondary market, period), $435 billion in short term debts and $925 billion in long term debts. They also have $38 billion or so in preferred stock outstanding, between them.
41 posted on 09/26/2008 9:45:19 PM PDT by JasonC
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To: JasonC

“It isn’t just Wachovia. National City today, 60% yield. Morgan Stanley, despite a large recent capital infusion from Asia for stock, 40% yield. Bank bonds are simply now traded as junk for any institution with default risk, as being essentially uncovered, because the depositors are senior and the FDIC has shown the bondholders will get nothing, if it is necessary to protect the FDIC.”

actually sorry my question was more in general on credit default swaps, obviously today’s action was a direct result of wm being seized.


42 posted on 09/26/2008 9:47:04 PM PDT by WoofDog123
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To: WoofDog123
CDS trades can influence the price that the underlying debt trades for, yes, but the figures I gave were not from the CDS market, but actual owned bonds offered for sale throughout the day today. Many series of them (different maturities, rates, etc), offered in varying sizes (dollar amounts lent).
43 posted on 09/26/2008 9:47:10 PM PDT by JasonC
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To: Nervous Tick
30 June Balance sheet, which you can get right here -

Bank of America financials

44 posted on 09/26/2008 9:49:11 PM PDT by JasonC
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To: SeekAndFind

As Alan Keyes noted, this bailout is socialistic. It undermines one of the basic operating principles of the free market, that your profits are derived b taking a risk. When we nationalize the risk, we destroy one end of the system, and thus destroy the other.

Furthermore, we bailed ot the banks in 1983 and the result was that we got to this point.

It’s not the taxpayers’ job to bail out the bankers.

When you subsidize something you get more of it; this bailout subsidizes corruption and stupidity. Guess what that brings about.

And finally, a point to make if you have any Democrats in your family: this is a massive transfer of wealth from the working people of this country to the rich.

We beat the Dubai Ports deal. We beat the amnesty bill. We cna beat this. But it will take the same kind of persistence.

Stay on your Members of Congress like white on rice.


45 posted on 09/26/2008 9:49:18 PM PDT by TBP
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To: Nervous Tick
Besides the link I gave, remember BAC has agreed to merge with Merrill Lynch. You can enter its ticker MER on the same site to get its sheet, in the input field on the middle of the page on the right.
46 posted on 09/26/2008 9:52:46 PM PDT by JasonC
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To: SeekAndFind

btt


47 posted on 09/26/2008 9:52:59 PM PDT by Cacique (quos Deus vult perdere, prius dementat ( Islamia Delenda Est ))
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To: TBP
It is already depositors that are the responsible creditors. In case everyone just forgot, the end "reckless lenders" lending to the "reckless deadbeats" you all love to castigate, are all bank depositors. You are the lenders, and the banks are your borrowers. If they misused the money lent to them, guess who is on the hook for it.

So do you want to lose your money as a reckless lender, or have the rich bail *you* out, paying according to the tax code?

48 posted on 09/26/2008 9:55:14 PM PDT by JasonC
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To: TBP
Sure right, how much money does wall street pay the treasury every year, and how much do the top 5% of incomes pay the treasury every year? And then, the "working people" of this country, do any of them have deposits in any banks?

Me I'd rather this hit were paid the way we all agree is as close to fair as we've been able to agree on, when something concerns us all. But if you'd rather have the losses be allocated by chaotic bank runs and nimbleness moving assets around the world in a deflationary smash, have at it. You will lose.

49 posted on 09/26/2008 9:58:30 PM PDT by JasonC
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To: JasonC

>> BAC has $228 billion long term, and $416 billion short term. MER has $697 billion long term, only $19 billion short term

That’s better.

That’s not quite so scary. Now is it? Long term debt does NOT need to be financed at 8%. And that’s by far most of it.

BofA is a solid bank. It’s not alone.

What’s more: in spite of Ken Lewis’s cheerleading for the bailout — do you think BofA will go tits up even if no bailout?

I don’t.

neither does the marketplace. (I mean both BofA/Merrill customers as well as BofA shareholder/bondholders.) I’m going off of observable evidence here.

I’m going to venture that there are some very smart people betting that BofA will succeed, among those other fools like me who merely hope they will.

Now, let me point out something else.

There are trillions of dollars in cash sloshing around this great country.

Not just households, but also businesses.

I realize that you eat, drink, breathe, crap, and spunk “finance” — but guess what? There are LOTS of OTHER businesses other than high finance in this great land. Many, many of them are sitting on big piles of CASH.

What do you suppose they’d like to do with that cash?

Get a return on it, maybe?

Now tell me that after the dust settles and the sucky banky financy houses of cards crumble away as they should, that that cash won’t come out to play — in an environment where value isn’t Paulson smoke-and-mirrors, but more real and tangible?

8%? In a heartbeat. 6%, 5%, 4.5%, to invest in a REAL business (like a CAT, or a BofA that isn’t a shitpile of toxic waste)?

Yes. I believe so.

We will weather this thing. Bailout or no bailout. We are not doomed.

I’m going to bed now. You can have the last word.


50 posted on 09/26/2008 10:00:16 PM PDT by Nervous Tick (I've left Cynical City... bound for Jaded.)
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