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Black Hole

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By Barry Ritholtz - December 15th, 2008, 5:30PM

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16 Responses to “Black Hole”

  1. jmborchers Says:
    December 15th, 2008 at 5:40 pm

    Did LEH have a heliport on top of the building?

    I think you can add GS to the cartoon and any other firm that took unreasonable leverage without any other backing business behind it.

    GS may initially shock finances tomorrow but it really is in its own category.

    Earnings season is likely to be quite volatile. I wouldn’t be surprised to see some stocks go up 30% and some down 30% after reporting.

  2. AGORACOM Says:
    December 15th, 2008 at 5:49 pm

    Unfortunately, unlike every black hole humans have come in contact with until this one, it doesn’t end with Will Smith blasting a missle into this middle of it …. but make extra popcorn ’cause no one knows how this baby is going to end.

    The Greek

  3. DL Says:
    December 15th, 2008 at 5:59 pm

    Article in the WSJ on the effect of ultrashort funds on the market during the last hour of trading:

    http://online.wsj.com/article/SB122929670229805137.html

  4. VennData Says:
    December 15th, 2008 at 6:00 pm

    That’s Madoff X-1, isn’t it?

  5. Simon Says:
    December 15th, 2008 at 6:07 pm

    What do you think It’ll be like on the other side….?

  6. jmborchers Says:
    December 15th, 2008 at 6:08 pm

    If you want to see some poor sap fund look up this one:

    Barclays Global Investors UK Holdings Ltd

    Owns, F, GM, GS and a shyt load of other junk.

  7. AGG Says:
    December 15th, 2008 at 6:20 pm

    I read somewher that if you manage to cross the vent horizon of a black hole, it is theoreticaly posibble to travel back in time. That would be profitable. Meanwhile, it’s poverty and/or jail for lots of rats.

  8. strat575 Says:
    December 15th, 2008 at 6:34 pm

    Simon, I hear it’s all coming out in some laboratory on the France-Switzerland border…weird, right?

  9. CNBC Sucks Says:
    December 15th, 2008 at 6:56 pm

    Hey buds.

    Have any “Madoff with your money” jokes made the rounds yet? I haven’t paid a whole lot of attention.

    I also wonder if writing “Madoff Ritholtz Madoff Ritholtz Madoff Ritholtz” repeatedly will create a totally undeserved but potentially amusing guilt by association.

  10. danm Says:
    December 15th, 2008 at 7:59 pm

    I guess the black hole is finally sucking up that dark matter they were talking about in 2005.

    http://www.cid.harvard.edu/cidpublications/darkmatter_051130.pdf

  11. jc Says:
    December 15th, 2008 at 8:55 pm

    So the Fed paid about 50% of face value, just wonder how this price was derived, does Bernanke still think it would be “counterproductive” to have disclosure? Lehman & Iceland banks got about 8% and AIG got 50%!

    Dec. 15 (Bloomberg) — American International Group Inc. sold residential mortgage-backed securities with a face value of $39.3 billion to a government-funded facility as the U.S. seeks to limit losses at companies that did business with the insurer.

    AIG will receive about $19.8 billion for the assets, which were held by the insurer’s securities-lending program, the New York-based firm said today in a statement. The facility was mostly funded by the Federal Reserve Bank of New York, which may collect the majority of profits if it sells assets for more than the purchase price, according to a regulatory filing. The insurer paid $1 billion to the fund, said AIG spokesman Nicholas Ashooh.

  12. KJ Foehr Says:
    December 15th, 2008 at 10:11 pm

    Looks like Barry is going to need to add a new chapter, or perhaps begin volume two, to cover the bailout of Madoff investors. They are talking about SIPC protection, which I believe is only $500,000 per person. But who expects that to be the end of it when many investors lost millions, even billions of dollars. I expect there will be pressure to bail them all out. I wonder which side Schumer will be on, and how the Republicans will react to this one.

    http://news.yahoo.com/s/ap/20081216/ap_on_bi_ge/wall_street_arrest_assets

  13. Winston Munn Says:
    December 15th, 2008 at 10:11 pm

    I think the black hole just expanded…

    “Citing “a rapid deterioration of U.S. Alt-A RMBS performance,” Fitch Ratings again took the hatchet to its previous assumptions for Alt-A mortgages on Monday morning, revising its surveillance methodology and updating loss projections for all U.S. Alt-A RMBS.

    All of which means that it’s time to get ready for a whole new slew of downgrades to Alt-A in the coming few weeks. Fitch warned in its note Monday that it expects that it will downgrade many senior bonds to below investment grade — just in time for fourth quarter earnings.”

    And the hits keep on coming….

  14. gloppie Says:
    December 15th, 2008 at 10:38 pm

    Paulson’s Large Hadron Collider is out of control !!!!

    http://lhc.web.cern.ch/lhc/

  15. Mich@TBP Says:
    December 15th, 2008 at 10:46 pm

    Nevermind the different language, just click on the Ford-like logo and others to keep advancing through the rest of the logos. There are probably same stuff on other sites but this is the one I got. I like the new Apple logo best.

    http://www18.gazetevatan.com/fotogaleri/resim.asp?kat=6863&page_number=1

  16. DL Says:
    December 16th, 2008 at 12:57 am

    KJ @ 10:11

    Those socialists in Washington may indeed decide to cough up $500K per account. However, my view is that any hedge fund that doesn’t offer complete transparency to the SEC should ineligible for a bailout. And customers of hedge funds should be informed of this. If the SIPC abstains from bailing out any of the Madoff victims, that will help get the message out… no bailout without complete transparency.