Comments on: Europe Opens Ugly http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html Sun, 22 Nov 2009 02:09:47 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: doc holiday http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17588 doc holiday Fri, 26 Sep 2008 16:05:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17588 Re: "central banks continue to throw money at the problem"<br/><br/>>> Yah, IMHO, central banks are collectively acting like Japan 13 years ago, as they globally, all remain in denial as to what the problem is, and thus, as bankers they use the fuel of cash to put out a synthetic debt and credit fire.<br/><br/>The obvious solution is to shut down synthetic derivative casino chips and thus enhance an environment where real assets are backed by real credit, versus the global illusion of being in denial about debt, and then printing more money and bailing out fraud. Re: "central banks continue to throw money at the problem"

>> Yah, IMHO, central banks are collectively acting like Japan 13 years ago, as they globally, all remain in denial as to what the problem is, and thus, as bankers they use the fuel of cash to put out a synthetic debt and credit fire.

The obvious solution is to shut down synthetic derivative casino chips and thus enhance an environment where real assets are backed by real credit, versus the global illusion of being in denial about debt, and then printing more money and bailing out fraud.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17583 Anonymous Fri, 26 Sep 2008 15:35:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17583 At the most basic level, the issue comes down to trust. Paulson is proposing a plan to buy up assets at above-market prices. Same approach he attempted last year with the failed MLEC (master enhanced liquidity conduit). If he succeeds in implementing this now, the unintended and inevitable consequence will be that investors' confidence in the system will, quite rightly, be even less than it is now. It is corrupt and awful. We have reached the point at which the benefits of opacity and BS, if there ever were any benefits, have reached their limit and are backfiring massively. It reminds me of how underwriters "stabilize" public offerings of securities like common stock by putting in bids to keep them from falling below the offering price. It helps sell stocks and the regulations, sadly, explicity permit it. Keeps confidence up, you could say. Hank seems to be thinking like an investment banker, time after time. That's not a compliment, incidentally. At the most basic level, the issue comes down to trust. Paulson is proposing a plan to buy up assets at above-market prices. Same approach he attempted last year with the failed MLEC (master enhanced liquidity conduit). If he succeeds in implementing this now, the unintended and inevitable consequence will be that investors’ confidence in the system will, quite rightly, be even less than it is now. It is corrupt and awful. We have reached the point at which the benefits of opacity and BS, if there ever were any benefits, have reached their limit and are backfiring massively. It reminds me of how underwriters “stabilize” public offerings of securities like common stock by putting in bids to keep them from falling below the offering price. It helps sell stocks and the regulations, sadly, explicity permit it. Keeps confidence up, you could say. Hank seems to be thinking like an investment banker, time after time. That’s not a compliment, incidentally.

]]> By: Francois http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17580 Francois Fri, 26 Sep 2008 15:20:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17580 "Which then makes you re-evaluate the premise that there wasn't fraud at LEH in marking the value of their assets.<br/><br/>Now extrapolate this reasoning across the entire banking system and, voila, you have the seizure of the interbank lending market."<br/><br/>If I am reading this correctly, there is strong suggestion of widespread fraud, deception whatever one wants to call it, in the banking system.<br/><br/>Should the problem be that bad, shouldn't it be the time to seriously examine an overt nationalization of the banking system a la Swede circa 1990? “Which then makes you re-evaluate the premise that there wasn’t fraud at LEH in marking the value of their assets.

Now extrapolate this reasoning across the entire banking system and, voila, you have the seizure of the interbank lending market.”

If I am reading this correctly, there is strong suggestion of widespread fraud, deception whatever one wants to call it, in the banking system.

Should the problem be that bad, shouldn’t it be the time to seriously examine an overt nationalization of the banking system a la Swede circa 1990?

]]> By: Ping http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17572 Ping Fri, 26 Sep 2008 14:52:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17572 From another basic common sense pov, TARP dosn't make sense. It sounds like creating another beauracratic goliath, like Homeland Security to untangle, manage and dispose of such assets including helfy fees paid to the same managers and brokers who created it in the first place.<br/><br/>Of course the acronmyn mortgage instruments are a mess to get to the bottom of equity but bad car loans, furniture loans, student loans, bad credit card debt????<br/><br/>It's going to require mounds of legislation and beauracracy to politically dispense with that....<br/><br/>To me, common sense dictates modifying exhisting mechanisms keeping more accountabiltiy in place. From another basic common sense pov, TARP dosn’t make sense. It sounds like creating another beauracratic goliath, like Homeland Security to untangle, manage and dispose of such assets including helfy fees paid to the same managers and brokers who created it in the first place.

Of course the acronmyn mortgage instruments are a mess to get to the bottom of equity but bad car loans, furniture loans, student loans, bad credit card debt????

It’s going to require mounds of legislation and beauracracy to politically dispense with that….

To me, common sense dictates modifying exhisting mechanisms keeping more accountabiltiy in place.

]]> By: Lewis B. Sckolnick http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17571 Lewis B. Sckolnick Fri, 26 Sep 2008 14:44:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17571 A bank holiday is the wrong idea. A bank holiday is the wrong idea.

]]> By: Lewis B. Sckolnick http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17570 Lewis B. Sckolnick Fri, 26 Sep 2008 14:42:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17570 JPM took $3 off its share price and raised 10B this AM.<br/>http://www.bloomberg.com/apps/news?pid=20601087&sid=a4Od8X6m.Zjw&refer=home JPM took $3 off its share price and raised 10B this AM.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4Od8X6m.Zjw&refer=home

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17567 Anonymous Fri, 26 Sep 2008 14:29:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17567 Now I'm hooked. <br/><br/>When's the next episode? Now I’m hooked.

When’s the next episode?

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17564 Anonymous Fri, 26 Sep 2008 14:10:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17564 'The American way of life is not negotiable'...in the words of Cheney.<br/><br/>Hmmm...Which Americans was Cheney talking about?<br/><br/>River ‘The American way of life is not negotiable’…in the words of Cheney.

Hmmm…Which Americans was Cheney talking about?

River

]]> By: Lewis B. Sckolnick http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17563 Lewis B. Sckolnick Fri, 26 Sep 2008 14:03:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17563 State and Fed regulators see themselves on the side of the bank thus preferring to look the other way as often as possible. State and Fed regulators see themselves on the side of the bank thus preferring to look the other way as often as possible.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/09/europe-opens-ugly.html#comment-17562 Anonymous Fri, 26 Sep 2008 14:02:00 +0000 http://www.nakedcapitalism.com/2008/09/europe-opens-ugly/#comment-17562 An addict will lie, steal, cheat, even kill to get his hands on one last fix.<br/><br/>Doesn't mean we should give it to him.<br/><br/>We'll all be better off when this is over.<br/><br/>People who managed their resources and capital prudently will fare much better. <br/><br/>Bring it on. I'm tired of being told to be afraid by my 'leaders'. An addict will lie, steal, cheat, even kill to get his hands on one last fix.

Doesn’t mean we should give it to him.

We’ll all be better off when this is over.

People who managed their resources and capital prudently will fare much better.

Bring it on. I’m tired of being told to be afraid by my ‘leaders’.

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