Rolling US Economy Into The Shitbin Thread

from MY bank

your savings should be insured by the FDIC up to $100,000

economic crisis comes crashing into gabbneb's living room

jesus christ these people they're quoting

HOW DARE ECONOMICS HAPPEN TO ME

NYC supermarket prices are SCARY. Glad I can do my grocery shopping at the local Indian groceries (Jersey City) where prices are still sane for fresh produce and the like. Fuck a D'Agostino's.

MASS EXODUS

I hope not

jesus christ these people they're quoting

HOW DARE ECONOMICS HAPPEN TO ME

you've never been to new york, right?

we don't stand in line, we stand ON the damn line

paulson on bended knee:

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

best economic meltdown ever.

hahaa

i would normally say that just sounds too absurd & theatrical to be true, but if the sky's remnants really do need to fatefully finish falling before Bush II is over, then i guess it makes sense that the american treasury secretary has to get on his knees to plead for the alleged survival of the country's economic system.

it kind of seems appropriate

gabbneb and Barney Frank get down on knees for return to "centrist" Clintonomics

i didn't realize that Chase had no West Coast presence

― gabbneb, Thursday, September 25, 2008 8:40 PM (Yesterday) Bookmark Suggest Ban Permalink
the acquisition kinda makes sense for them, it would seem

― gabbneb, Thursday, September 25, 2008 8:41 PM (Yesterday) Bookmark Suggest Ban Permalink

Yeah because if anything has been shown by all this it's that the economy needs MORE giant banking institutions and fewer competitors.

That Zabar fuel surchage seems like a dumb PR move. Don't put out a big sign saying you're going to slap a surchage on every purchase - just quietly raise prices across the board. Zabar's food is so overpriced anyway, who would notice another 1.8% - unless you put up a big sign calling attention to it?

Meanwhile, John Paulson, a hedge fund manager who did very well in the subprime meltdown (no relation to Hank) has a very sane and reasonable op-ed in the WSJ calling for scrapping the (Hank) Paulson plan for a straight preferred investment plan:

http://online.wsj.com/article/SB122238667352477103.html?mod=article-outset-box

If the recalcitrant House GOP forces this thing back to the drawing board, I think we would all owe them a big debt of gratitude.

FASCINATING [Kathryn Jean Lopez]

From our Media Researching friends:

prior to this year, the watchdogs at ABC, CBS and NBC found time for only 10 stories on the financial health and management of Fannie Mae and Freddie Mac.

09/26 09:46 AM

its no coincidence that the only orgs conservatives keep mentioning are these two, right?

The reasons conservatives keep mentioning Fannie and Freddie is because that's the only ingredient into this mess that they were on the right side of politically - ie., calling for reform. The philosophical reasons they disliked Fannie and Freddie were because of their quasi-public status. Of course now that we're seeing a government takeover of large swathes of the financial landscape, that philosophical objection is being largely forgotten in the onrush of events. Nonetheless, that's the one area that many conservatives can point to where they called for reform. Nevermind that Fannie & Freddie were basically along for the ride on a bubble that was largely inflated by the Fed and global imbalances, and that they avoided the worst excesses of Wall Street and other mortgage lenders (which were enabled by GOP anti-regulation bias).

They avoided the worst excesses of Wall Street?Fannie and Freddie were the largest buyers of subprime mortgages between 2004 and 2007, and their exposure was over a trillion dollars.

Along for the ride? Hell, they paid for the gas on that ride.

That the conservatives are being politically opportunistic about Fan/Fred is beside the point. Those organizations were in dire need of reform.

They avoided the worst excesses of Wall Street?Fannie and Freddie were the largest buyers of subprime mortgages between 2004 and 2007, and their exposure was over a trillion dollars.

Not true. They didn't buy subprime mortgages. They bought senior AAA tranches of mortgage-backed securitizations of sub-prime assets. Those were securitizations of loans originated by non-agency lenders and packaged by Wall Street banks. They never bought the riskiest structures cooked up by Wall Street and the rating agencies- and the ones that have led to the sharpest losses.

^^good posts, actually getting some perspective here

Can anyone be in doubt that the ratings agencies need to be taken out and shot?

There are some even-handed accounts of Fannie & Freddie's involvement in the subprime debacle, by people who don't have a partisan axe to grind. Basically Wall Street banks were buying up subprime lenders and packaging those subprime loans into securitizations. These lenders were making credit available on very loose terms with little verification. The huge influx of this cheap money caused the mortgage market share of Fannie & Freddie to shrink dramatically. Unfortunately the agencies also slipped their standards a bit to compete with this Wall Street/Countrywide/etc. axis, and they also bought some of the junk that these banks wer packaging, though they stuck to the safest tranches. But to say they were driving this process is revisionism of a high order.

They didn't buy subprime mortgages.

Oh please. Are you saying that they had no idea what they were buying nor the risk involved, implicit or otherwise. And next you're going to tell me that the widespread mismanagement and accounting irregularities were irrelevant, too? In the end, subprime debt is subprime debt.

http://www.realestatejournal.com/buysell/mortgages/20070420-hagerty.html

Also, I never said they were driving the process. I said they were paying for the fuel.

um, this is not my area, but isn't it giant banks that have stepped into this crisis to save the day? and if Chase didn't step in now, wouldn't that reduce competition on the west coast? who else could step into the breach? it certainly makes Chase an even huger national bank, but would it be better to allow BoA or Citi to increase their existing west coast positions? it appears to me that the retail banks that are in trouble here - indymac, wamu, wachovia - had too much exposure to the california (and florida) housing market(s), and maybe you need a more national bank to step in for them, with adequate size and presence elsewhere to absorb the losses.

it appears to me that the retail banks that are in trouble here - indymac, wamu, wachovia - had too much exposure to the california (and florida) housing market(s)

Wells Fargo is based out here and is sitting pretty last I checked.

Sure, Fannie and Freddie should have been more cognizant of the risks of buying anything backed by the subprime mortgages being originated by irresponsible lenders. Lots of people should have - starting from the rating agencies, on through the risk-management departments of almost all the major banks and insurance companies. Unfortunately, at that time, there was nothing unusual in their willingness to believe these were safe investments. What was unusual was that relative to their size, they participated much less in these assets than others did - mainly because of regulations that prevented them from buying subprime mortgages directly.

my post was multi-xp to pancakes

Wells Fargo is based out here and is sitting pretty last I checked

right, i was not saying that California banks were in trouble, i was saying that too much exposure to California ARMs was/is a key problem for the biggest troubled banks here

>but would it be better to allow BoA or Citi to increase their existing west coast positions? it appears to me that the retail banks that are in trouble here - indymac, wamu, wachovia - had too much exposure to the california (and florida) housing market(s)

no, Wachovia is barely a blip in LA, in fact it's notorious for not having enough branches since arriving. and BoA is already gigantic; it greatly outnumbered the Wamus, at least in this half of the state.

That Zabar fuel surchage seems like a dumb PR move. Don't put out a big sign saying you're going to slap a surchage on every purchase - just quietly raise prices across the board. Zabar's food is so overpriced anyway, who would notice another 1.8% - unless you put up a big sign calling attention to it?

Eli's Manhattan ≠ Zabar's, and per the article it was explicitly in the alternative to quietly raising prices and explicitly a PR move to call attention to how fuel prices are hitting food prices (everywhere, not just where upper east siders buy $6 tomatoes)

here's the alternate plan proposed by the house GOP

http://biz.yahoo.com/ap/080926/bailout_alternative_preview.html

no, Wachovia is barely a blip in LA, in fact it's notorious for not having enough branches since arriving

i don't know what kind of retail presence they have there, but they have a lot of exposure to the housing market

Also, I never said they were driving the process. I said they were paying for the fuel.

and taking a cut of the pass-through to pay for their own gravy train. there's no question fannie and freddie were enablers, and were happy to ask no hard questions. but of course the right-wing effort to blame them specifically -- and low-income/minority borrowers -- as the prime culprits is silly and noxious. (only truly dedicated ideologues could find a way to blame a wall street meltdown on poor people.)

and i'm not sure i understand your point, vic - you're not arguing that wachovia should increase its presence there? and I agree with you that BoA is already gigantic in CA and that this is why Chase, which isn't there at all, should take over WaMu instead.

Meanwhile, troubles over at the Morgan Stanley prime brokerage business:

Morgan Stanley lost close to a third of assets in its prime brokerage last week, amounting to hundreds of billions of dollars, as hedge funds fled after the collapse of Lehman Brothers and moved to rival banks.

http://www.ft.com/cms/s/0/fc0e74be-8b43-11dd-b634-0000779fd18c.html

>>but would it be better to allow BoA or Citi to increase their existing west coast positions?

i thought you were advocating this, and i was just saying that BoA is already huge here. i didnt know Wachovia was big w/ housing but retail wise they're small

in LA, they're apparently at the market share of the Farmers and Merchants Bank of Long Beach, which I hear is pretty good

I'm not arguing against the wingnutz' lack of honesty in the issue, I'm saying that Fan/Fred played a significant role in the crisis. There's also some truth to the fact that reform might have lessened the blow or at very least, saved the taxpayers some money. It seems obvious that the GOP would cater to their constituents in this regard.

Eli's Manhattan ≠ Zabar's

I was referring to Eli Zabar's stores in general, not the Zabar's store in particular. I thought Zabar's was one of his, but apparently it's run by his brothers.

You might be right Don, that reform at Fannie & Freddie might have lessened the blow to taxpayers. We have yet to know how much taxpayers will be on the hook for losses at Fannie & Freddie. I'm not a big supporter of the quasi-public model. Though even if Fannie & Freddie had been fully privatized a long time ago, it seems they would have still been deemed "too big to fail", so taxpayers still would have been on the hook. Even worse, if they'd been privatized, they probably wouldn't have even had what regulation they did have to keep them in line.

Away from Wall Street, Economists Question Basis of Paulson's Plan

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092504531.html

wow, National City (my bank), is down almost 50% right now.

http://finance.yahoo.com/q?s=ncc

I'm saying that Fan/Fred played a significant role in the crisis. There's also some truth to the fact that reform might have lessened the blow or at very least, saved the taxpayers some money.

if you're following the bloomberg news investigation piece, a lot of this comes down to bad risk assessments and forced error, kind of the way dot com IPOs and GC/Enron stock prices were forced into places they shouldn't have been by Frank Quattrone types (except they mostly didn't get caught like Quattrone did, because they were better at playing dumb I guess) - but my point is that FM/FM were both allowed to have risk/credit ratings well above what they should have, perhaps because of the implicit federal insurance behind them - unless reform fixed this aspect, I don't think it would have saved anybody a red fucking cent.

(when I say forced error above, I mean in cases where it was "commit to this lie or resign tomorrow," which isn't really forced error in an engineering sense, because the person actually in charge of such ultimata is committing the original error, and is doing it for the sake of just being a greedy piece of shit)

my point is that FM/FM were both allowed to have risk/credit ratings well above what they should have, perhaps because of the implicit federal insurance behind them - unless reform fixed this aspect, I don't think it would have saved anybody a red fucking cent.

Instead of fixing this, the government now seems intent on extending that guarantee to pretty much the entire financial landscape.

so i stayed behind while everyone else ran. at least the lines will be shorter now, eh?

Run on Bank Helped Kill WaMu, But Your Money Is Safe
http://finance.yahoo.com/tech-ticker/article/73415/Run-on-Bank-Helped-Kill-WaMu-But-Your-Money-Is-Safe?tickers=WM,JPM,XLF,WB,%5EDJI,%5EGSPC
Posted Sep 26, 2008 10:44am EDT by Aaron Task in Investing, Recession, Banking

In the biggest bank failure in U.S. history, the Federal Deposit Insurance Co. seized Washington Mutual's assets Thursday. The FDIC then quickly sold most of WaMu (that's assets and liabilities) to JPMorgan.

Simply put, WaMu was victimized by a classic "run on the bank." Customers withdrew $16.7 billion in a 10-day period following the bankruptcy of Lehman Brothers, leaving WaMu "with insufficient liquidity to meet its obligations," its regulators determined.

A longer explanation is WaMu was victimized by mismanagement and misguided bets on exotic (and toxic) instruments such as option adjustable-rate mortgages.

The deal has major ramifications for JPMorgan and the banking industry as a whole, as Henry and I discuss in a forthcoming segment.

For the vast majority of people who bank at WaMu, which had 2200 branches and $188.3 billion of deposits as of June 30, the important thing to remember is your deposits are insured up to $100,000, and the Federal government will go to every extreme to make sure it's available.

"There will be no interruption in services and bank customers should expect business as usual come Friday morning," FDIC Chairman Sheila Bair told reporters last night.

The sobering truth, however, is that repeated declarations about the sanctity of FDIC insurance from Bair, President Bush, Treasury Secretary Paulson, Fed Chairman Bernanke and others failed to quell concerns among WaMu's customers. That suggests more "bank runs" could be in the offing unless the government moves quickly to restore confidence.

I was referring to Eli Zabar's stores in general, not the Zabar's store in particular. I thought Zabar's was one of his, but apparently it's run by his brothers.

Zabar's is a 75-year-old semi-populist institution founded by Eli's father and taken over by two of his sons. The more entrepreneurial Eli, who never spent substantial time working there afaik, opened his own more upscale/expensive place, E.A.T., on the East Side in the '70s. His "Eli's Manhattan" is 10 years old.

founded by Eli's father

and mother

it's probably a good thing that this "run on the bank" was not reported until after it collapsed, eh?

my dad has national city and i think he's upset right now

fake john mccain summarizes shitstorm well

fakejohnmccain The WaMu punchline: WaMu CEO, who's only had the job for 3 weeks, walks away from smoking crater with $20 million bonus: http://is.gd/39pe