Comments on: Central Banks Anticipate "Mother of Year-Ends" ‘Liquidity Crunch

By: Rock

Rock — Thu, 11 Sep 2008 22:46:00 +0000

I agree with anonymous 5:49 said, but certainly not with macndub 5:27 said, as that was clearly quite foolish.

Anonymous 1:03 had a few good points, though….but a few foolish ones as well.

By: macndub

macndub — Thu, 11 Sep 2008 21:27:00 +0000

What anonymous 1.03 pm said.

By: Anonymous

Anonymous — Thu, 11 Sep 2008 17:03:00 +0000

I am truly growing tired of the constant comments regarding the “government” rendering something worthless. No, the financial injection was already worthless. The “government” just slapped everyone down and told them what they should have already known — that the company in question was insolvent and the investments of equity holders were in fact worth zero.

I have been having this debate regarding FNM, FRE, WM and LEH almost all year. They are insolvent already and have been for quite a while. Their debts far exceed the value their assets, regardless of the “capital” on their books. The only problem is that these companies were able to creatively use current accounting rules to show a balance sheet that technically reads as solvent. They are not solvent in any meaningful sense, only on their balance sheet.

Investors in these companies own what is in reality a call option that will pay off if a miracle happens and the firms become solvent again. The “government” didn’t even take away the call option with FNM and FRE, although they did give the common (but not the preferred) a haircut on their call options. Seriously, what did the “government” do to preferred shareholders in FNM and FRE that wouldn’t have happened if any other major lender had set up a subordinated $100B credit line and in return asked for suspension of dividends prior to repayment of the credit line, common warrants, a change in management, and board seats? Nothing. Would any major lender have asked for less? Not unless they were incredibly stupid.

By: Viv

Viv — Thu, 11 Sep 2008 16:20:00 +0000

Don’t forget to compliment tanta at calculated risk as well as well as Yves. the old boys club is on the opposite end of this mess, messrs bernanke, bush, paulson and the chief boys club leader greenspan. They’re doing their best to take the free out of the free market to keep all the bubbles, delusions and the image of prosperity to continue.

By: doc holiday

doc holiday — Thu, 11 Sep 2008 16:08:00 +0000

FYI: The dollar index has bee running in overbought territory since early last week. The last time the index saw the 14-day RSI this high was back in 97, wt which point it began to drop, giving up 7% between Aug and Nov, according to Bloomberg data.

> Not good!

By: M

Thu, 11 Sep 2008 15:33:00 +0000

Yves, you and Meredith Whitney put the good old boy’s club to shame. I am highly, highly impressed with your analysis – it’s the best thing out there.