Near Disaster

[FauxCaster]

Kasriel has an interesting post today regarding the FED rate cut. 

Its a PDF, hit the latest Aug 25th Lacker: Heck no we woun't go

 

 

http://www.northerntrust.com/pws/jsp/displ...l&TYPE=interior

601933[/snapback]

 

 

I don't know who the sheeple are, Amerikuns or Furriers. But CNBC World pundits constantly says there's no way the Fed will cut. I don't know how Europeans and Asians can be on such opposite sides of the issue as the US CNBC pundits. I guess an entire 12-hour sleep cycle makes the mind work differently. If we could get them all awake at the same time, perhaps we could reach a consensus.

[Jetlag]

Hedge Fun manager forgets he has a Maserati and prepares to buy CDO's at a good price.

 

"he was so focused on the swings in financial markets that he didn't notice his 80,000- pound ($160,000) sports car had been impounded by London authorities."

 

"Regarding his investment strategy, Des Pallieres said he's planning to take advantage of the decline in so-called collateralized debt obligations. He has received regulatory approval for the fund, which will start later this year with ``a few hundred million euros.''"

 

http://www.bloomberg.com/apps/news?pid=206...kl1o&refer=home

 

Sounds about right. After all you need someone who forgets about his own 390hp car to hold something like CDO's to maturity.

 

[lineup32]

Lacker is no Slacker!

 

All stock mkt crackhead long gunners are SURE the Fed will lower.

 

But Bernanke didn't even hint at that and Slacker said no.

(this will be good til he says yes)

 

The longer we go without any extreme flinching or blinking from the Fed, the better, IMO.

 

http://www.smh.com.au/news/business/us-to-...7462299769.html

 

Of course, each day we'll have to listen to Cramer pleading for the

"7,000,000 people who are going to lose their homes if the Fed doesn't do something NOW!" 

601934[/snapback]

 

I listened to his speech this morning and the Q&A. Lacker has been up until today a housing bool but said this

 

"Recent data on actual housing market activity have dampened my optimism, however. Housing starts and residential building permits, which earlier this year looked as if they might be stabilizing, have both softened in the last couple of months. Broader measures of sales activity are also showing a pronounced downward trend.

 

Clearly Lacker and the Fed have had a change of heart about the housing downturn. Also during the Q & A he was asked about the negative saving rate and how that was affecting the American consumer. His response was that the negative saving rate was a myth since the gov't stat that created it did not include div income which when added into the mix created a higher net worth, so spending was going to continue, no problem move along.

[Jimi]

Rates zoomed back up today, but still below last week. It is absolutely confusing. To me it suggests that the few bidders there are are panicked to get into T-bills. It's crazy.

601905[/snapback]

 

Maybe the bidders got an offer they could not refuse.

601917[/snapback]

I was thinking perhaps that the bidders were organized prior to purchase, with weak hands being the only ones "invited" to bid. Next, we'd see another collapse at the short-end, into which the "invited" bidders could sell for a profit.

 

[Jetlag]

LONDON (MarketWatch) -- The chief executive of one of Germany's largest state-backed banks warned that foreigners were increasingly loath to extend credit to financial institutions in Europe's largest economy, which could spark a crisis.

...

Conduit problems

Both SachsenLB and IKB operated companies called conduits that issued short-term paper and then reinvested the proceeds in higher-yield, longer-term debt -- such as the residential mortgage-backed securities that have declined in value as poorer Americans default on risky mortgages

 

http://www.marketwatch.com/news/story/bank...6E087AB1D5EE%7D

601935[/snapback]

 

That's steamroller problems in my book.

 

[K Wave Rider]

Not much to report..

 

Still tracking nicely ..good possibility of some down tomorrow to around 12950 or so, and then more up to final peak of this leg...

[shorty]

Hang the Tan Man!? He was dumping this stock hand over fist while investing employee savings in it.? He was literally stealing their money!? What a bastard! ? ?

601918[/snapback]

just like the "deceased" Kenny Lay?

 

any Kenny sightings lately?

[Jimi]

Kasriel has an interesting post today regarding the FED rate cut. 

Its a PDF, hit the latest Aug 25th Lacker: Heck no we woun't go

 

 

http://www.northerntrust.com/pws/jsp/displ...l&TYPE=interior

601933[/snapback]

 

 

I don't know who the sheeple are, Amerikuns or Furriers. But CNBC World pundits constantly says there's no way the Fed will cut. I don't know how Europeans and Asians can be on such opposite sides of the issue as the US CNBC pundits. I guess an entire 12-hour sleep cycle makes the mind work differently. If we could get them all awake at the same time, perhaps we could reach a consensus.

601937[/snapback]

 

Rather than Crapvision pundits, the bigger question is whether policy makers around the planet are in agreement. The broadside by the head of the Swiss central bank yesterday was not encouraging. Some will remember that in the summer before 1987, Treasury Secretary Baker had some pointed public dust-ups with Bundesbank Chief Pohl. The issue then was international management of the dollar by the G7 through the Louvre & Plaza Accords processes.

[mdporter]

Read a wall street journal yesterday that was filled with articles on the credit crunch. Not one of them got it right.

 

The lies being told in the mainstream and financial presses are reaching ludicrous levels. The articles cherry pick one subject to feel good about and act like the rest, taken as a whole, do not matter.

 

Not once have I read about the following things

 

- elimination of cash out mortgage equity withdrawal and the effect on consumption

 

- as real estate contracts, the service and construction jobs that surround it vanish raising unemployment levels

 

- ARM resets that last through 2012 forcing people to pay more for their loan every month, leading to less cash for spending

 

- the expense of loan bailout programs and their inability to help everyone who is over extended unless they throw trillions at the problem.

 

- food inflation (meats, dairy, produce).. unless prices fall, this will cut into discretionary spending.

 

- the complete breakdown of ratings agencies, and the unreliability of "credit reports". Just because a person previously paid their bills on time doesn't mean they won't default on their $800k mortgage when they have to make the full PITI (principle, interest, taxes, insurance) payment on their $120k or less family income.

 

Then there is the trickle down economic aspect... so much money was flowing from the home ATM, and the home lending business comissions (RE agent, brokers, etc). This money flow is rapidly stopping. From all the stories I've read the people in these industries were spending tons of money on cars, homes, shopping, etc. What is there to replace their money?

 

The New York Times today posted an article saying that incomes are still below the 2000 peak. That was seven years ago!

 

To top it off, the largest job gains over the last five years have been in real estate, construction, and local/state/federal government jobs! Nearly all of these jobs have been made possible by the willingness of everyone to go into deep debt. Now the debt can't be paid back unless the states and Feds go into more debt in order to bailout the debtors. Who is going to buy that debt, and at what rate of return?

 

The Russ Winters Hyper-reality and Brazil Amercan spinjob is shifting into overdrive. All is well. Stay calm. We'll take care of you!

[mdporter]

Rescap back in the news:

 

Debt Traders Sour on ResCap's Ability to Endure Slump (Update1)

By Shannon D. Harrington

 

Aug. 21 (Bloomberg) -- Residential Capital LLC, the biggest privately held mortgage lender, has more than a 40 percent chance of defaulting on its debt in the next year, trading in credit- default swaps suggest.

 

Sellers of credit-default swaps tied to ResCap, a unit of finance company GMAC LLC, are demanding upfront payments of 21 percent and 500 basis points to assume the risk that the company will default on its bonds in the next year, according to CMA Datavision in London. That implies an almost 43 percent chance of default, according to a JPMorgan Chase & Co. pricing model. General Motors Corp. last year sold a 51 percent stake in GMAC to a group led by Cerberus Capital Management LP.

 

ResCap, based in Minneapolis, may lose access to the short- term debt markets, Bank of America Securities LLC said last week, and Fitch Ratings said today that the lender's ``weak operating performance'' would make it harder to absorb a higher cost of funding. ResCap's bonds began trading at distressed levels last week as concerns grew that the company may be unable to finance itself amid a slump in demand for securities backed by mortgages.

 

``Everybody's concerned about liquidity,'' said Pete Hastings, a fixed-income anal cyst at Morgan Keegan & Co., in Memphis, Tennessee. ``Are they going to have sufficient liquidity to continue?''

 

Moody's Investors Service and Fitch Ratings last week cut ResCap's debt ratings to below-investment grade, or junk. Bank of America reduced its recommendation on the debt to ``neutral'' from ``buy.''

 

Bloomberg source

[MrHanky]

The bid to cover at today's 4 week bill auction was the lowest I have ever seen at 1.11.

 

Any comments from our fixed income eggspurts?

601900[/snapback]

Far from an expert,probably more like an Idiot but....

 

 

I locked more CD's today,so far I think I got some awesome rates in the last few weeks even though I laddered out further than I wanted on one.But heres what I got so far..............

 

1 year 5.50% apy

1 year 5.60%

3 year 6.25%

5 year 6.00%

 

Did not want to go out that far but the rates are really good.Have 4 more CD's coming due next month if rates move up more.So confused,but for some reason rates will be heading up,since I'm usually wrong I started locking some in

[fxfox]

Kasriel has an interesting post today regarding the FED rate cut.?

Its a PDF, hit the latest Aug 25th Lacker: Heck no we woun't go

 

 

http://www.northerntrust.com/pws/jsp/displ...l&TYPE=interior

601933[/snapback]

 

 

I don't know who the sheeple are, Amerikuns or Furriers. But CNBC World pundits constantly says there's no way the Fed will cut. I don't know how Europeans and Asians can be on such opposite sides of the issue as the US CNBC pundits. I guess an entire 12-hour sleep cycle makes the mind work differently. If we could get them all awake at the same time, perhaps we could reach a consensus.

601937[/snapback]

 

Rather than Crapvision pundits, the bigger question is whether policy makers around the planet are in agreement. The broadside by the head of the Swiss central bank yesterday was not encouraging. Some will remember that in the summer before 1987, Treasury Secretary Baker had some pointed public dust-ups with Bundesbank Chief Pohl. The issue then was international management of the dollar by the G7 through the Louvre & Plaza Accords processes.

601944[/snapback]

 

Plaza accord was in september 1985 --> dollar weaker --> became too weak --> Louvre accord in 1987

 

what you mean about Baker and Pohl, is that months beofre the 1987 crash Baker tried to push Pohl to cut interest rates in Germany, but Pohl refused. Some say thsi contributed to the 1987 crash. My view is that this argument is total bullshit, Wall Street and some economists were searching for a reason and then they came up with the Bundesbank. Old trick: If you have problems inside point the finger to an enemy outside.

 

In sum: That the Bundesbank is responsible for the 1987 crash is 100% total horseshit.

[Hausbare]

Lacker is no Slacker!

 

All stock mkt crackhead long gunners are SURE the Fed will lower.

 

But Bernanke didn't even hint at that and Slacker said no.

(this will be good til he says yes)

 

The longer we go without any extreme flinching or blinking from the Fed, the better, IMO.

 

http://www.smh.com.au/news/business/us-to-...7462299769.html

 

Of course, each day we'll have to listen to Cramer pleading for the

"7,000,000 people who are going to lose their homes if the Fed doesn't do something NOW!"?

601934[/snapback]

 

 

 

I listened to his speech this morning and the Q&A. Lacker has been up until today a housing bool but said this

 

"Recent data on actual housing market activity have dampened my optimism, however. Housing starts and residential building permits, which earlier this year looked as if they might be stabilizing, have both softened in the last couple of months. Broader measures of sales activity are also showing a pronounced downward trend.

 

Clearly Lacker and the Fed have had a change of heart about the housing downturn. Also during the Q & A he was asked about the negative saving rate and how that was affecting the American consumer. His response was that the negative saving rate was a myth since the gov't stat that created it did not include div income which when added into the mix created a higher net worth, so spending was going to continue, no problem move along.

601939[/snapback]

 

 

Personally, I'm quite content for the Fed to be behind the curve on the housing calamity. All I want is a more or less, kinda somewhat level playing field.

One where bears don't get rescued and neither do bulls!

 

I think that may be what they are doing, i.e. letting nature take its course, so to speak.

 

These guys are trying to quide a mega huge ocean liner, and cannot alter course for every small fishing boat that unwittingly gets caught in their wake or dumbass who tries to surf.

 

I'm not surprised the negative savings rate doesn't come up on their radar. They're looking at a bigger picture. I thought Lacker's explanation of why they look at the CPI w/o food and energy was illuminating, while acknowledgng the irritations to the consumer with real world inflation in same.

 

And by the time the iceberg becomes self evident, maybe the Fed will be able to alter course enough so the collision is the glancing blow we should expect from time to time. Really, what else can they do given their tools and job description?

 

It is unfortunate, but may people will lose their homes either because they were naive, or greedy or simply stupid. But the Fed cannot be their "tooth fairy."

The people on the Fed board are certainly not stupid, and I'm sure they've come to the correct conclusion the problem with housing was not about a lack of cheap money or demand. They well realize, IMO, its the result of rampant greed, and lowering rates will not fix it. Surely they must be glad their former boss is gone and on the rubber chicken circuit getting his just desserts. <g>

 

I think what the Fed is doing is to slowly spoon feed to the markets that badly behaved bulls will just have to live with the consequences of their excess and greed.

[mdporter]

I'm not surprised the negative savings rate doesn't come up on their radar. They're looking at a bigger picture. I thought Lacker's explanation of why they look at the CPI w/o food and energy was illuminating, while acknowledgng the irritations to the consumer with real world inflation in same.

 

 

 

What were his comments regarding this? the CPI without food and energy is meaningless.

[Sudaca]

OK, the t-bill issue is clearing up after talking with the specialists