Comments on: 0% — Act Now !

By: rktbrkr

rktbrkr — Wed, 28 Jan 2009 13:01:18 +0000

KJ, I think the magnitude of buying the bad bank loans at “slightly more than market” deterred Paulson & gang. All they got for $700B was a 2 quarter delay. Now , after painting this as a disaster of epic proportions O’B can move ahead with a bailout of epic proportions. The hundreds of billions of bank preferred, deeply out of the money warrants and 400-500 billion of guarantees for CITI,AIG and BOA are just the prelude for bad debt purchases based on prices the banks will jump at with the gov possibly picking up bank common just to further muddy the pool.

The amounts of money being thrown around are just incomprehensible. the peak MV of CITI,Chase,BOA and Wells was under a trillion, it sounds like the gov will give the banks trillions and receive fractional ownership shares and a bunch of defaulted loans in return.

By: Pat G.

Pat G. — Wed, 28 Jan 2009 05:12:18 +0000

It doesn’t mean as much to you when you don’t have any of your own skin in the game. You are existing through the kindness of strangers. In the Fed’s case, nations.

By: Blackhalo

Blackhalo — Wed, 28 Jan 2009 03:28:50 +0000

At 0% there has to be a bubble being inflated somewhere. Somewhere the Fed is not looking and will not notice until too late. Perhaps at a future bond auction?

By: Good News Economist

Good News Economist — Wed, 28 Jan 2009 02:36:25 +0000

The news on 0% from the fed is a bit out of date…
http://mast-economy.blogspot.com/2008/12/refinance-your-debt-at-0.html
but you gotta love the image. (and the concept…)

GNE

PS. Barry, nice interview on NPR last night… although I didn’t agree with it all, I was totally in agreement on job losses being lagging indicators about what’s really happening now in the market
http://mast-economy.blogspot.com/2009/01/look-at-leading-indicators-most-times_10.html
(You could have pointed to the conference board’s release on monday showing leading indicator index ticking up a bit) In any case, I enjoyed hearing a blogger on NPR…

By: KJ Foehr

KJ Foehr — Wed, 28 Jan 2009 02:10:06 +0000

Well I guess the bottom is in and it’s time to go long then.

If it was so simple to help the banks, why the hell didn’t they do it 6 months ago?

What is the difference between this plan and Paulsons original idea of TARP, buying “troubled assets”?

By: Mannwich

Mannwich — Wed, 28 Jan 2009 01:52:02 +0000

@KJ Foehr: I have little confidence that equity and bond holders are going to be wiped out any time soon. We the taxpayer are going to get stuck yet again with the turd sandwich. O is losing my confidence in his first full week on the job.

By: KJ Foehr

KJ Foehr — Wed, 28 Jan 2009 01:43:02 +0000

Is a bad bank/ good bank good or bad for shareholders? The action today and AH seems to indicate it is good, but I wonder…

Does it mean we get the bad and the banks get the good? Or would it be something more like nationalization with equity and bond holders wiped out? I guess that’s not possible because of the impact on CDSs?

Any ideas?

By: Mannwich

Mannwich — Wed, 28 Jan 2009 00:57:51 +0000

More noise from Liesman and games from the Feds. This is why I hate trading SKF and FAZ. Wake me up when the banks are either nationalized or BK.

By: Andy Tabbo

Andy Tabbo — Wed, 28 Jan 2009 00:52:41 +0000

leftbank:

I too noticed the “issues with GE” possibly getting a downgrade was suddenly overwhelmed by the “rumor” that Treasury was going to initiate a bad bank/good bank.

Remember that rally we had WAAAAAY bank when we first heard from Gasparino about an RTC 2.0 type model….. 500 S&P pts later….

I’m so bearish right now.

By: rktbrkr

rktbrkr — Wed, 28 Jan 2009 00:23:00 +0000

Listening to Liebsman I kept thinking “things are made complicated for a reason” and then I heard him say the mark to model prices “might be a little bit higher” than market prices, then I heard him say the plan probably wouldn’t be complete til early next week – another sweetheart weekend deal by Paulson’s acolyte Geithner!