Comments on: The Terrible Lessons of TARP http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 11:47:29 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Scott F http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-139034 Scott F Wed, 14 Jan 2009 20:15:50 +0000 http://www.ritholtz.com/blog/?p=15943#comment-139034 Good News Economist needs to change his name to<em> "Spinning the News Economist '</em> Good News Economist needs to change his name to “Spinning the News Economist ‘

]]> By: TrickStyle http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138887 TrickStyle Wed, 14 Jan 2009 15:24:49 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138887 @ ronin - I must admit that I unfortunately didn't see "it" coming. I underestimated the effect of the US housing market on the global financial system. While I stopped additional investments in the stock market in Sept 07 as word of the credit crunch became more prominent in mainstream media sources like WSJ, I didn't take invested money out because when I invest I invest for the long term and am not concerned about volatility. I wish I had. Had I, like you clearly did, understood the magnitude of the chain reaction, I, like you would have shorted the S&P, Bear, Lehman, Citi, etc. and quadrupled my wealth like you and the other smart people out there. As for a meltdown being what the doctor ordered, I suspect you aren't quite grasping the implications on humanity. To say such harsh things makes you sound angry and unreasonable, rather than smart and prescient, as you represent here. @ ronin – I must admit that I unfortunately didn’t see “it” coming. I underestimated the effect of the US housing market on the global financial system. While I stopped additional investments in the stock market in Sept 07 as word of the credit crunch became more prominent in mainstream media sources like WSJ, I didn’t take invested money out because when I invest I invest for the long term and am not concerned about volatility. I wish I had.

Had I, like you clearly did, understood the magnitude of the chain reaction, I, like you would have shorted the S&P, Bear, Lehman, Citi, etc. and quadrupled my wealth like you and the other smart people out there.

As for a meltdown being what the doctor ordered, I suspect you aren’t quite grasping the implications on humanity. To say such harsh things makes you sound angry and unreasonable, rather than smart and prescient, as you represent here.

]]> By: Greg0658 http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138874 Greg0658 Wed, 14 Jan 2009 14:47:58 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138874 and I'll throw this concept can the TARP track if the banks are issue'g the funds into an entity that its sole purpose is to byback shares of its parent bank ... but with stealthyness so as to not run up the share price - but be there to squelch rumors there is not a mal-funcition'g banking system and to bring a prior post thought here - the end ... when the run on the bank is over - recapitalize the parent with those bought back shares and its boomtimes all over again - hooray hooray for WS and I’ll throw this concept

can the TARP track if the banks are issue’g the funds into an entity that its sole purpose is to byback shares of its parent bank … but with stealthyness so as to not run up the share price – but be there to squelch rumors there is not a mal-funcition’g banking system

and to bring a prior post thought here – the end … when the run on the bank is over – recapitalize the parent with those bought back shares and its boomtimes all over again – hooray hooray for WS

]]> By: d4winds http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138873 d4winds Wed, 14 Jan 2009 14:38:12 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138873 There is, or should be, no such thing as TBTF; but the simultaneous failure of many major financial institutions (AIG, WaMu, Wachovia, and Citi with implications for MS and GS after Lehman, Fran/Fred, &BS [not to mention European IBanks like RBS]) is TBTF. The TARP recapitalizations are a necessary evil to manage the process of letting these dominoes fall in a more orderly fashion. The Citi universal bank break-up may be the beginnings of the domino process. AIG should be next. There is, or should be, no such thing as TBTF; but the simultaneous failure of many major financial institutions (AIG, WaMu, Wachovia, and Citi with implications for MS and GS after Lehman, Fran/Fred, &BS [not to mention European IBanks like RBS]) is TBTF. The TARP recapitalizations are a necessary evil to manage the process of letting these dominoes fall in a more orderly fashion. The Citi universal bank break-up may be the beginnings of the domino process. AIG should be next.

]]> By: ronin http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138856 ronin Wed, 14 Jan 2009 06:36:19 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138856 TrickStyle: You act is if it was a surprise! LOL! Guess what? The smart people prepared for it--saw it coming a mile away! All you guys who lost 40%, you should ask yourself why you didn't see it coming. I'll bet the people that think it was a surprise watch mainstream news so they can get spoon fed happy patriotic propaganda. A meltdown would have been just what the doctor ordered. All those unhappy people you talk about would have gotten MAD, real MAD, and then we would have seen some real CHANGE! Instead we get more of the same, and the uber rich @$$holes get to stay on top with a little help from the US tax slave.... TrickStyle: You act is if it was a surprise! LOL! Guess what? The smart people prepared for it–saw it coming a mile away! All you guys who lost 40%, you should ask yourself why you didn’t see it coming. I’ll bet the people that think it was a surprise watch mainstream news so they can get spoon fed happy patriotic propaganda.

A meltdown would have been just what the doctor ordered. All those unhappy people you talk about would have gotten MAD, real MAD, and then we would have seen some real CHANGE!

Instead we get more of the same, and the uber rich @$$holes get to stay on top with a little help from the US tax slave….

]]> By: TrickStyle http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138850 TrickStyle Wed, 14 Jan 2009 04:34:50 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138850 I'm satisfied with the first slug of the TARP financing. It stopped a global financial meltdown. Hello...MELTDOWN. Meltdown means savings gone, banks gone, unemployment 25%+, starving people in not-so-poor countries. Old people screwed. Young people screwed. Meltdown means your investments would have dissipated into thin air. And you wouldn't be able to make them back, because there wouldn't be any stock exchange trading. At least now you have a chance to recoup the 40% you lost. Thanks to swift action. For those that think that the GAO was going to monitor every last nickel in real-time, well that's just plain ol' naive. It doesn't work that way. What cracks me up is that many of the people here complaining about the TARP were trading the bear market rally that ensued thanks to what...um, the TARP. I don't recall a lot of complaining when we were on pushing 950. People were giddy with excitement. On saving the financial sector, I recall Warren Buffett noting on Charlie Rose that the exact prescription later would be worse than a directionally correct medication immediately. I agree. Few people in the world really understand the financial markets. The fact that we avoided utter disaster is somewhat of a feat, particularly given that it got pushed through Congress. If you wanna make this a political issue, fine. But it isn't. In Oct/Nov, the issue at hand was how to keep the global financial system from dissolving. That crosses political lines and borders. As for why banks aren't lending yet...well that's because there's still too much risk. Duh. I’m satisfied with the first slug of the TARP financing. It stopped a global financial meltdown. Hello…MELTDOWN. Meltdown means savings gone, banks gone, unemployment 25%+, starving people in not-so-poor countries. Old people screwed. Young people screwed. Meltdown means your investments would have dissipated into thin air. And you wouldn’t be able to make them back, because there wouldn’t be any stock exchange trading.

At least now you have a chance to recoup the 40% you lost. Thanks to swift action.

For those that think that the GAO was going to monitor every last nickel in real-time, well that’s just plain ol’ naive. It doesn’t work that way. What cracks me up is that many of the people here complaining about the TARP were trading the bear market rally that ensued thanks to what…um, the TARP. I don’t recall a lot of complaining when we were on pushing 950. People were giddy with excitement.

On saving the financial sector, I recall Warren Buffett noting on Charlie Rose that the exact prescription later would be worse than a directionally correct medication immediately. I agree. Few people in the world really understand the financial markets. The fact that we avoided utter disaster is somewhat of a feat, particularly given that it got pushed through Congress.

If you wanna make this a political issue, fine. But it isn’t. In Oct/Nov, the issue at hand was how to keep the global financial system from dissolving. That crosses political lines and borders.

As for why banks aren’t lending yet…well that’s because there’s still too much risk. Duh.

]]> By: DL http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138844 DL Wed, 14 Jan 2009 03:38:57 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138844 So, TARP II is coming in a couple of weeks. More money down the drain. When is TARP III going to arrive? So, TARP II is coming in a couple of weeks.

More money down the drain.

When is TARP III going to arrive?

]]> By: Andy Tabbo http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138842 Andy Tabbo Wed, 14 Jan 2009 03:18:06 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138842 Fast thoughts on BLM: Fed's will do a deal with him...it's in the public interest to get as much info out of him as possible. He's going to jail till he's dead. The deed is done. The best thing for the public now is to right as many wrongs as possible and then move on. In re: Market action and technicals.... First let me say there should be no shame in suggesting "I don't know" or "I'm a little confused." And so with that, I must say that the current action is a little confusing to me. On the break of 875 Cash S&P I thot we might careen much lower, but all we did was sort of grind and congest....no breakdown. Additionally, the Yen is butting up against an area that should provide MAJOR resistance and the Euro is resting on an area that should be MAJOR support. If these respective levels hold, then ALL risky assets will rally. So maybe that's what is going on here..... Also, intraday action on the SP futures, I'm looking at a "complex inverted head and shoulder pattern" that triggers around 874 ish.....so if we're trading 878+Cash tomorrow....look out shorts. [ "Complex" means "double-headed."] So....I must give this bearish market what it's due and respect the action. That being said, if we collapse tomorrow below 857 (860 cash), it'll become very, very ominous. Color me a little confused and OUT OF THE MARKET after today. -AT Fast thoughts on BLM: Fed’s will do a deal with him…it’s in the public interest to get as much info out of him as possible. He’s going to jail till he’s dead. The deed is done. The best thing for the public now is to right as many wrongs as possible and then move on.

In re: Market action and technicals….

First let me say there should be no shame in suggesting “I don’t know” or “I’m a little confused.” And so with that, I must say that the current action is a little confusing to me. On the break of 875 Cash S&P I thot we might careen much lower, but all we did was sort of grind and congest….no breakdown.

Additionally, the Yen is butting up against an area that should provide MAJOR resistance and the Euro is resting on an area that should be MAJOR support. If these respective levels hold, then ALL risky assets will rally. So maybe that’s what is going on here…..

Also, intraday action on the SP futures, I’m looking at a “complex inverted head and shoulder pattern” that triggers around 874 ish…..so if we’re trading 878+Cash tomorrow….look out shorts. [ "Complex" means "double-headed."]

So….I must give this bearish market what it’s due and respect the action. That being said, if we collapse tomorrow below 857 (860 cash), it’ll become very, very ominous.

Color me a little confused and OUT OF THE MARKET after today.

-AT

]]> By: ronin http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138837 ronin Wed, 14 Jan 2009 02:36:20 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138837 Tom K: No conspiracy theories here, you just need to stop watching mainstream news: http://www.youtube.com/watch?v=ETx6wW1C04g Tom K: No conspiracy theories here, you just need to stop watching mainstream news:

http://www.youtube.com/watch?v=ETx6wW1C04g

]]> By: ronin http://www.ritholtz.com/blog/2009/01/the-terrible-lessons-of-tarp/comment-page-1/#comment-138825 ronin Wed, 14 Jan 2009 00:27:53 +0000 http://www.ritholtz.com/blog/?p=15943#comment-138825 constantnormal: We would be so lucky if we were like Japan back in the '90s. Your observation is missing a few major points; 1. Japan had a population that saved their money; 2. The Yen wasn't the reserve currency of the world; 3. Japan wasn't the world's consumer; 4. Japan wasn't super G.I. Joe; 5. Japan wasn't begging for handouts from every neighbor and stranger. The "Japan experience" comparison fails on so many levels.... constantnormal: We would be so lucky if we were like Japan back in the ’90s. Your observation is missing a few major points; 1. Japan had a population that saved their money; 2. The Yen wasn’t the reserve currency of the world; 3. Japan wasn’t the world’s consumer; 4. Japan wasn’t super G.I. Joe; 5. Japan wasn’t begging for handouts from every neighbor and stranger.

The “Japan experience” comparison fails on so many levels….

]]>