naked capitalism

Anonymous says:

While I understand the schadenfreude regarding the PPT that I have heard expressed here and elsewhere on the web, hasn’t it become crystal clear with the failure of LEH that they simply cannot let these banks fail?

The sight of people cheering while Rome burns repulses me.

Anonymous says:

“…Paulson, coming out of the IMF meetings, will … roll … a joint …”

Good. What we need is a little mellowing out period for the market.

tyaresun says:

Yves,

In the last sentence, it is $76 a BARREL. Love your blog.

ciccocicco says:

“We cannot let the banks fail, but what’s worse is the stealth gifting of money to the bank equity holders.”

Who cares now if GS will be given some 10-50 BN gift.

The economy is collapsing, everything, EVERYTHING, must be done to save it. No more time for ideology.

The Government will always be in position in the future to take back everything.

It’s really sad to see so many people dancing around the corpses: I said so, I told you, please get a life.

Aren’t you all the ones that said the banks must be let fail? look a Lehaman, biggest treasury mistake up to now.

Anonymous says:

I would not be too quick to say the PPT is keeping the market up by themselves.

When Goldman and Friends put the squeeze on Hedgies via increased margin requirements, the Hegies have little choice but to dump good equities to raise capital.

And just who is ready to buy up the dumped equites? Great straddle, if one can pull it off.

Anonymous says:

Aren’t you all the ones that said the banks must be let fail? look a Lehaman, biggest treasury mistake up to now.

Wrong. That was required to expose the ponzi scheme. Better sooner rather than later. Even now, there are many in denial.

You may not mind wasting taxpayer money on GS and other shareholders, but you presume that will fix the problem. It wont – that’s why wasting money to bailout the imprudent is so foolish.

Anonymous says:

Love the blog, Yves. It’s better than Toto pulling back the curtain on that little man hidden in the booth in the back of the Great Oz’ audience chamber.

Was that the effect you’re hunting?

FairEconomist says:

Well, Paulson spoke, and I don’t see any LIBOR-saving measures in the Bloomberg release. Unless the equity infusion itself is supposed to be the save, in which case I think it’s probably going to be ineffective.

Anonymous says:

I’m cheering while Rome burns. This is blowback from decades of happy talk and magical thinking regarding excess leverage for everyone. The snap back is so ferocious because it’s never a “good time” for the system to put down the hyperlevered growth drug in favor of sustainable economic development that would benefit actual people. Well the forest fire is burning back the undergrowth now and it is terrible to behold.

VoiceFromTheWilderness says:

The People that are so concerned about the dancing while Rome burns sound like they were wearing pompoms when the kindling was laid.

If not then I’m sure you are all rushing to distance yourself from plans that won’t fix the problem, since you are so worried about the economy and all.

Quite honestly the need to use emotion laden, self serving rhetoric in knee jerk support of whatever inane ideas our so called leaders are promoting this week, and in an attempt to defeat reasoned articulation of alternatives, as well as to defeat clarity as to cause… is the problem. in a big way.

Thanks, Mr. Superior.

wprestong says:

Yves, do you think it is the LIBOR banks that are the focus now? Here is a list of the US Dollar LIBOR panel banks that I got from the BBA site (see http://www.bba.org.uk and then go to “BBA LIBOR” and find the “LIBOR Panels” link):

* Bank of America
* Bank of Tokyo-Mitsubishi UFJ Ltd
* Barclays Bank plc
* Citibank NA
* Credit Suisse
* Deutsche Bank AG
* HBOS
* HSBC
* JP Morgan Chase
* Lloyds TSB Bank plc
* Rabobank
* Royal Bank of Canada
* The Norinchukin Bank
* The Royal Bank of Scotland Group
* UBS AG
* West LB AG

Some of these are not very healthy and some just got saved by the UK (e.g. RBoS). Are these banks the focus (while banks like GS are not)?

I always enjoy your blogs.

john bougearel says:

anon,

BAC announced they are cutting their div. How totally unsatisfactory and unpalatable is that to the taxpayer paying those divs indirectly to their shareholders?

Richard Kline says:

Listening to the parsing of Paulson’s statements, it seems clear he is in stall mode. He was given powers he didn’t want, to take actions he resists, for reasons he rejects. Paulson isn’t part of the solution, he _is_ the problem at present, because the larger problem can neither be identified nor addressed while he is the decider. Again, Hankie Paul is playing the Herbert Hoover role in this re-enactment. Any action he takes will be, by definition at this point, too little, too late, and sideways to the public interest. Shameful, ’s what it is.

Re: Rome burning, oh please. Where were you guys _the last fifteen months_ while Hank, Bennie, and Dufus sat on their thumbs doing nothing except shuck and grin at the camera? Look, an industrialized country needs a banking system, which implies that, yes, we need to save some of the banks. Since we don’t know at this point which ones are system-critical, that means that at the present, yes, we can’t let any sizeable bank collapse. But when I say ‘we need these banks,’ what I mean is that we need their depositors to stay put, their lines of credit to remain funded, their staff to conduct business as they can, and their swaps not go flatline. We DO NOT need their senior management or their equity holders, and in due course we do not need to guarantee the positions of their bondholders through we are going to be blackmailed into playing the ‘hold steady’ with them for the nonce by present systemic conditions.

Pirate shops like GS and JPM need to be chopped up and put down. But that’s for another day, yes. For now, we can simply seize them, hang the pirates, and keep the desks humming. But to do that, it’s pretty clear we’ll have to remove Hank first. The damage his tardiness will achieve in the next three months plus are what y’all might better be worrying about, ’cause as a proconsul for the wealth class he’s dealing you more loss than profit. Soooo how ’boutcha get with the program?

Richard Kline says:

As a further note on Rome burning as an analogy, the Roman Empire collapsed fundamentally because the bottom 95% of the population became so incensed with their rapacious 5% leadership class that the refused to serve in the army, withheld all taxes and services whenever possible, and personally secceeded from their kleptocracy. That was the situation, socially, by c. 280 or so.

The kleptocracy managed to stay more or less in power for almost another two hundred years by using their taxing authority to hire _foregin mercenaries_ who constituted the largest and only effective portion of the military. Meanwhile, the bulk of the population turned to Chrisitianity not because they loved it but because religious institutions were shielded from taxation. By 400 CE, at which time Rome had not yet fallen (it did the following year), the great bulk of the population were all but literally at war with the state and its non-Roman mercenaries.

Rome fell because its kleptocracy sold out their people, who in turn starved the state of money an staff until it finally disintegrated. I kid you not: you can look it up.

—So you out their worried about Rome burning and the popular response: Look in your own mirrors and see the enemies for who they are. Come and join the rest of us, or turn to your thugs, ’cause we know the score.

Richard Kline says:

Yves knows.

Yves knows the lay of the land.
Yves knows crab apples from road apples.
Yves knows acquisitions from disquisitions.
Yves knows civility from servility.
Yves knows hazlenuts from wingnuts.
Yves knows that antidotes are anodynes for what bit yah.
Yves knows silence illicts a better answer.
Yves knows from pixels.
Yves knows that genders aren’t neutral but territories can be.
Yves knows capitalists are naked under their documentation.
Yves knows Sarah: doesn’t cotton to her.
Yves knows a good question is worth more than a rote answer.
Yves knows sense, and cents, and where the two do and do not coincide.
Yves knows the dawn before we know the day.
Yves [may] know the way; discuss.

Yves knows.

[Yves: I'm working on the subject of our emails; probably Saturday.]

Richmond Rambler says:

Richard Kline,

You’ve proved what I suspected all along: you are a delightful human being.

john bougearel says:

yves,

Thank you for your reply.

Right now, I am partly fascinated, and partly spellbound. Your resume may not appear to be very sexy on the cover, but when I unwrap the paper your appeal is mesmerizing!

Yves, you, your blog, and your community are a wonderful package. And if you’ll grant me permission to come aboard, I’d love to stick around and be part of the crew.

Sometimes I may just lurk and yves-drop, other times I may pitch in and make a contribution.

ps. who is “Sarah” that you don’t cotton too?

Anonymous says:

Thomas Jefferson wrote,”The central bank is an institution of the most deadly hostility existing against the principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” I say let them fail. Many are waiting patiently, readying the nooses, sharpening the blades of justice. We as a country will survive. Our children will be better off once we rid ourselves of the parasites among us.