Bailout Backout

[skyQuake]

Yeh... VaR is textbook knowledge which means it doesnt work...

Distributions are more likely to be leptokurtic than lognormal. Late last year we had some 25 standard deviation events lol. Was it really the magical 100,000 th year or did we see some fat tails?

 

[cuttlefish]

Hopefully this trend will continue ... (fed lending less to banks through the discount window). It might also explain why Paulson is saying stability is starting to return to the financial system and is starting focus effort elsewhere.


http://money.cnn.com/2008/11/13/news/economy/fed_balance_sheet/index.htm?postversion=2008111317

Fed lends less to banks

Government lent financial institutions $160 billion over the past week in emergency lending window, down significantly from prior week. AIG begins to borrow more.

Last Updated: November 13, 2008: 5:32 PM ET

AMERICA'S MONEY CRISIS
Fed lends less to banks
NEW YORK (CNNMoney.com) -- Financial institutions borrowed a bit less from the Federal Reserve for the second-straight week, according to a report released Thursday.

The Federal Reserve reported that commercial banks borrowed $95.4 billion a day, on average, during the past week. That's down 13.3% from the $110 billion a day they borrowed from the emergency lending window in the previous week, and the record $111.9 billion per day a week earlier.... etc.

 

[Aussiejeff]

Well, well. Unsurprisingly, The Bailout B$ keeps on keepin' on.

The GeeWhizz20 GabFe$t has wrapped up with an "agreement" to set an end of March deadline for "concrete proposals" on tightening global financial regulation and oversight while boosting market transparency. Essentially, calling for a list of financial institutions which pose a risk to the global economy by March 31. How insightful.

Whoopee! Is that the best they could do? A proposal to have "concrete proposals" and "a list of dodgy institutions" ready for submission at another gab-fest in 18 weeks time? That should re-assure the world populace no end. Merry Xma$, folks!!

In the meantime, it appears the "Big Bailout" has stalled for US car makers. The White House has (for now - who knows what tomorrow may bring?) knocked back any further massive handouts to save them. Good luck, GM, Ford & Chrysler... that goes for the Oz variety as well.

All in all, I don't see any earth-shattering results emanating from the GeeWhizz20 GabFe$t. Just what you might expect when a group of so-called "World Leaders" with massively divergent self-interest get together to crap on about "working together".

Clearly, Mass Debating is their forte.

 

[Glen48]

In the late 20's a block of land was worth 15k and in no time it hit 300K people were buying a block and putting it back on the market before the ink had dried and selling it all was rosy until a storm hit and wiped every thing out by then it was the 30's and away we went.
I am sure this is growing so fast no one know how bad it is, Today the Paki's have put their hand up for a bail out, apparently Monday is a deadline for the Hedge funds to pay up and they have no $$$ so they will flood the market with stock.
We are left to fend for ourselves and to try and read teh markets and survive good luck fellow boat members.

 

[Aussiejeff]

...
We are left to fend for ourselves and to try and read teh markets and survive good luck fellow boat members....

What price a swimming lesson?

 

[Julia]

The very fact that the members of the G20 have resolved to meet again in 18 weeks (having solved sweet nothing during this talkfest) will increase negativity and pessimism in that clearly they are expecting no improvement before then.

Btw AJ, sorry to hear about the additional accident to the poor foot.
That was bad luck. Hope it improves rapidly.

 

[nick2fish]

What price a swimming lesson?

Cheaper than the price of a paddle it seems.......

 

[Hyperion]

Does anyone feel that an IQ test is required before anyone should enter politics or political administration.

Hmmm, it seems to me that people on this forum are excessively harsh on the abilities of the leaders during this crisis. Its just too tempting to use the leaders as scapegoats. Sure, I can understand that you may disagree with some of their policies, and have other ideas on how the situation should be handled.

However, I just have a few points which I think are useful to keep in mind.

1. The majority of politicians, CEOs and other leaders are very highly educated. Many of them have been to the elite education institutions (e.g. Harvard, Yale, Princeton, Oxford, Cambridge). Some are Rhode Scholars. I think the vast majority of them would have far superior IQs and more impressive resumes than the people on this forum. The world generally sees these guys as the best and brightest. I believe Henry Paulson was the ex-CEO of Goldman Sachs. I don't think anyone less than exceptionally talented would ever get to that position.

2. Many of the leaders have either studied economics, or have access to top economic advisors. From what I can see, I suspect many of the people on this forum have never studied economics. Not saying you shouldn't voice your opinions, but just keep in mind these guys have had a lot more experience than you in this area.

3. These guys are spending long hours, and working hard to try to fix this crisis. Yes, it might not be perfect, and you may disagree with some aspects of their policies. But remember, they have done a great deal of good as well, which isn't always that easy to notice.


However, I know its much easier to whinge and blame people. Just saying, don't need to be too harsh on them...

 

[sinner]

Since when does having qualifications at Harvard or Yale mean **** except you have rich well connected parents. Bush went to Yale and got his MBA from Harvard, would you trust him to run YOUR business? He certainly couldn't run the oil company handed to him on a silver platter by his betters.

My father is a PhD in economics, teaches economics, finance and accounting subjects to undergraduate and postgraduate students, has authored enough cited papers to have significant international tenure, is a senior lecturer at his university, etc etc bla bla ****in bla.

As I mentioned previously in another thread, one of my cousins is a "successful" financial consultant for Macquarie Group including work in London and elsewhere.

When I told them **** was to hit the fan they laughed in my face!

I don't think anyone who would make this statement in July 2008 is exceptionally talented

“it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” -Paulson

That is a verbatim quote. What a joke of a statement your post is Hyperion, Paulson was hired just like the rest of GWBushes crew, from the ranks of his fathers and friends "good old boys" where not merit, but ideology and level on the social strata are the requisite criteria.

 

[Whiskers]

Yeah. I have to agree to a large extent with sinner... the solution to this problem is little to do with IQ, education and experience... it's everything to do with ideology.

The Bush administration is just so loaded with vested interest in NOT regualting the markets further. Don't get me wrong, the Dem's have vested interests too, but their ideology is opposite to the Rep's and Bush and often while we can't get a perfect solution, it sometimes takes a dose of the opposite ideology to get things back on a more even keel.

Over the weekend GWB stated that the cause of the problem is not the US and free markets, cos some EU countries have bigger problems... the solution isn't more regulation, but leting the 'free' (a cliche for US controled) market sort itself out.

The Congress sub-committee including Rep's and Dem's expressed concern and questioned why there has been no regulatory changes, which they thought was the intent of the bill, but plenty of handing out loans and a little buying equity. One congressman cited an example of if his child was spending beyound his means, the first thing he would do is cut up his credit cards and instigate some rule changes.

 

[Glen48]

If I was an Economist/ Mortgage broker/ sub prime broker/ R E agent or worked for S & P and been to Harvard and some one asked me my occupation I would be telling them I was an adviser to Alan Bond or Skase at least you would have some creditability.

 

[Glen48]

P S stay in the boat its sailing on a sea of debt with out a chart, rudder, captain, nav. aids and going no where FAST.

 

[chops_a_must]

Yeah. I have to agree to a large extent with sinner... the solution to this problem is little to do with IQ, education and experience... it's everything to do with ideology.

Could it be the best thing you have said on this forum? :

It has nothing to do with the level of intelligence, it is largely misguided. It also seems to be too narrow an intelligence type.

The fields of economics and management seem to have a distinct lack of alternate/ lateral thinkers and natural questioners... it is almost unreal.

It's been like witnessing the world's biggest group-think exercise on a massive scale.

 

[communique]

I just cannot believe that we can attribute ideology to the reactive political see sawing that you see coming out of the States at the moment. Unless years of greed, lack of regulation, apathy is considered ideology. They genuinely don't know what they are doing from day to day. For too long Bush was saying how sound their banking system was just weeks before the so called systemic collapse.

Then tonight he says as a part of the G20 that a severe depression is likely. Please tell me why now he says this just before he leaves office. Why bother. We are not talking about education, qualifications or political persuasion here we are just talking about logic and common sense. I'd love to know what his IQ is.

 

[Macquack]

I believe Henry Paulson was the ex-CEO of Goldman Sachs. I don't think anyone less than exceptionally talented would ever get to that position.

One thing Hank Paulson is exceptionally talented at is rorting the system. He did that with distinction in his role at Goldman Sachs to accumulate a personal net worth in excess of $700 million USD ( Forbes 2006 ).

 

[Hyperion]

“it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” -Paulson

That is a verbatim quote. What a joke of a statement your post is Hyperion, Paulson was hired just like the rest of GWBushes crew, from the ranks of his fathers and friends "good old boys" where not merit, but ideology and level on the social strata are the requisite criteria.

When you are in the public, there are certain things you can't say. Paulson can't very well go "our banks are all in severe trouble" - thats just asking for a bank run. He has to say that the system is going well regardless of what he actually thinks. His job isn't to say his truthful opinion, its to ensure the stability of the system.

While I'll concede that nepotism does have some influence in politics, I think you'll find GS is quite a meritocracy, even more so than some other IBs.

Also, some people have commented that the politicians/bureaucrats have vested interests. I agree some of them do. Which is why they aren't as stupid as some of you make them out to be...


Out of interest:

1. Anyone here think they have a higher IQ than Paulson? (regardless of your opinion on how important an IQ is)

2. Anyone think they can do a better job in saving the world financial system than Paulson? (regardless of whether you want to be in that position)

 

[Aussiejeff]

Superb news today, fellow Ozziephiles!

Our Great Leader's seem to be in a state of GREAT EXCITEMENT following their long, drawn-out, back-slapping MASS DEBATING session!!

They EXCITEDLY talk of apparently endless "STIMULATION" as a means to get all of US consumers all EXCITED too!!!

They have agreed forthwith to start an ORGY of "SPEND, SPEND, SPEND" in an attempt to bring the un-mentionable world *ecession to a CLIMAX - it's gonna be a massive money-shot!!!!

Ohhhh. Now I'M EXCITED and STIMULATED too!!!!!


:bananasmi :bananasmi :bananasmi

 

[communique]

...

Out of interest:

1. Anyone here think they have a higher IQ than Paulson? (regardless of your opinion on how important an IQ is)

2. Anyone think they can do a better job in saving the world financial system than Paulson? (regardless of whether you want to be in that position)

What is Paulson's IQ? On your second question, I am not an economist so probably not but I would think that a good economist in charge of the American economy would have recognised their weaknesses and threats years ago and proactively modified regulation to avert a future crisis. i.e subprime

 

[cuttlefish]

When you are in the public, there are certain things you can't say. Paulson can't very well go "our banks are all in severe trouble" - thats just asking for a bank run. He has to say that the system is going well regardless of what he actually thinks. His job isn't to say his truthful opinion, its to ensure the stability of the system.

Exactly

One thing Hank Paulson is exceptionally talented at is rorting the system. He did that with distinction in his role at Goldman Sachs to accumulate a personal net worth in excess of $700 million USD ( Forbes 2006 ).

To me that just demonstrates his credentials. Would you really trust the advice of somebody who had worked as an investment banker for decades, yet HADN'T accumulated a fortune? His profession is to understand money and make money ... by accumulating personal wealth he's shown he's good at his job. I bet the vast majority of that wealth is in USD based assets as well, and he probably likes living in America, so he has a personal vested interest in getting the US through this mess without a systemic collapse.

 

[Aussiejeff]

Paulson and Bernanke were grilled heatedly by US Congress again overnight. The US markets don't appear to have responded positively to Paulson's defense of why he changed tack with The Bailout without first consulting with Congress.

Clearly, there is a "Crisis of Confidence" here, which does not bode well for the hoped for success of the US Bailout.


aj