Rolling US Economy Into The Shitbin Thread

i wonder if my goldman sachs schoolmates will show up to class this week

haha oh shit i didn't realize that's some kind of howard stern thing

There were clearly problems with the models people were using--severe and utterly retarded ones on the credit side

lol credit risk "models"

The AIG rumors continue.

I've been told, by two different and both reliable sources, that since I'm a Nat10n4l C1ty customer - I better start shopping for a new bank.

So where, exactly, is it safe to open an account?

B of A, Citi

credit unions, my pocket

Wells Fargo seems to be doing all right. (Seeing as my basic day-to-day account is there, I admit bias.)

But yeah, credit unions = wise idea for any general savings etc. Gone that route for almost a decade now without regrets.

Whats the best bet for a day-to-day checking/debit account?

http://www.johnlewis.com/Magazine/Feature.aspx?Id=9

j/v/c... care to share any more? I'm with the same bank as you...

I honestly don't have any more than that. One friend that works in finance told me last night that he's heard rumblings about them being on their last legs. Separately, had a meeting with a client this morning that works in bank auditing and he threw out an offhand comment that "Nat10n4l C1ty customers might want to start shopping around". So, thats it. I can't seem to find any reliable info online yet though.

B of A, Citi

― akm, Tuesday, September 16, 2008 5:22 PM (38 minutes ago) Bookmark Suggest Ban Permalink

citi? are you sure?

No rate change

This thread is getting so much like a Depression-era comedy I expect Ned Sparks and Guy Kibbee to show up.

http://www.scoopjackson.net/dead_end_kids.jpg

so what are the odds the WaMu stage at Austin City Limits music fest will be renamed by fest time next weekend

How can this be happening?

How can it even be possible that we wake up on a Monday morning to discover that Lehman Brothers, a firm founded in 1850, a firm that has survived the Great Depression and every market trauma before and since, is suddenly bankrupt? That Merrill Lynch, the “Thundering Herd,” is sold to Bank of America the same weekend?

Just months ago, Lehman assured investors that it had enough liquidity to weather the crisis, while Merrill raised some $15 billion over the last year to shore up its balance sheet. Now they’re both as good as gone.

Last week, it was Fannie Mae and Freddie Mac that needed a government bailout. This week, it looks as though American International Group and Washington Mutual will be on the hot seat. We have actually reached the point where there are now only two independent investment banks left: Goldman Sachs and Morgan Stanley. It boggles the mind.

But it really shouldn’t. Because after you get past the mind-numbing complexity of the derivatives that are at the heart of the current crisis, what’s going on is something we are all familiar with: denial.

Indeed, it is not all that different from what is going on in neighborhoods all over the country. Just as homeowners took out big loans and stretched themselves on the assumption that their chief asset — their home — could only go up, so did Wall Street firms borrow tens of billions of dollars to make subprime mortgage bets on the assumption that they were a sure thing.

But housing prices did drop eventually. And when people tried to sell their homes in this newly depressed market, many of them had a hard time admitting that their home wasn’t worth what they had thought it was. Their judgment has been naturally clouded by their love for their house, how much money they put into it and how much more it was worth a year ago. And even when they did drop their selling price, it never quite matched the reality of the marketplace. They’ve been in denial.

That is exactly what is happening on Wall Street. Ever since the crisis took hold last summer, most of the big firms have been a day late and dollar short in admitting that their once triple-A rated mortgage-backed securities just weren’t worth very much. And, one by one, it is killing them.

http://www.nytimes.com/2008/09/16/business/16nocera.html

Because after you get past the mind-numbing complexity of the derivatives that are at the heart of the current crisis

It's pretty hard for me to get past that.

Denial = greed

The Fed in for 80% of AIG. Uh, thanks?

so what are the odds the WaMu stage at Austin City Limits music fest will be renamed by fest time next weekend

― 100 percent HOOS test (BIG HOOS aka the steendriver), Tuesday, September 16, 2008 3:01 PM (5 hours ago) Bookmark Suggest Ban Permalink

^^ asking the important questions

wake me when citigroup admits how fucked they are

now on ebay:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/16/bcnebay116.xml

Types at (MAJOR AMERICAN BANK) keeps phoning up our offices asking what deals Lehman Brothers were mandated on, "after all it would be a shame for those companies to have to suffer as a result of all this". Crazy kids...

Beneath the photo of the satchel is the comment from the seller: "I worked here for half of my career. Bought most of my stock at a weighted average price of $45 (£26). Enough said.

this is, like investing 101 DO NOT DO shit.

NYTimes: "Until this week, it would have been unthinkable for the Federal Reserve to bail out an insurance company..."

If Enron could declare bankruptcy and WorldCom could declare bankruptcy, why the fucking hell can't AIG declare bankruptcy? And will we ever get a clear explanation of the necessity for this from the Fed? Not bloody likely.

It smells of bullshit to me too, but there is a qualitative difference between AIG, on which a number of other financial institutions depend or are at least closely linked, and the two corporations you mention, which dealt in commodities and can go bust without hurting anyone but themselves.

To be a fly on the wall:

Attending the meeting on the Capitol Hill were Democratic Senate leaders that included Charles E. Schumer of New York, Richard Durbin of Illinois, Christopher J. Dodd of Connecticut and Kent Conrad of North Dakota A contingent of Republicans was led by Mitch McConnell of Kentucky, the minority leader, and included Richard Shelby of Alabama, John Kyl of Arizona and Judd Gregg of New Hampshire. House leaders included John Boehner of Ohio, the Republican leader; Spencer Bachus, Republican of Alabama; and Barney Frank, Democrat of Massachusetts. Members of the leaders’ staffs were asked to leave the meeting shortly after it began.

"They all gone? Good. Uh, we're all fucked."

"Why Most Things Suck" : an anthology featuring non-fiction by Thomas Frank, Jim DeRogatis, Chuck Klosterman, Jonathan Franzen, Rick Moody, and other luminaries.

"Most Things Suck" was a great punk zine in Montgomery County, MD in the late 1980s that a kid in my chemistry class made. Anyway, back to the economy.

So AIG is like... nationalized?

nationalized insurance companies but no nationalized health insurance. sweet!

The company is a sizable investor in Asian development projects, from toll roads in the Philippines to Seoul’s international finance center. It is also a major investor in the Taiwan government. As of February, A.I.G. held $14.2 billion in Taiwan government bonds, 13.1 percent of Taiwan’s total issued government bonds.

So how does this bailout work, like, legally? Does the Fed have some sort of emergency powers? Does there need to be eventual Congressional approval?

Listen Martin, our role in this is just to give the rich people our money and not ask questions, okay?

i just read a doomsday "aig is toast" column by felix simon in conde nast (http://www.portfolio.com/views/blogs/market-movers/2008/09/16/aig-is-toast?tid=true) and was struck by this reader comment:

"Hopefully part of this deal will be to put Hank Greenberg back in charge. That crook Spitzer cost people more money than may ever be realized."

is there any plausibility to the charge that spitzker's treatment of wall street was a big deal in this mess? not at all a rhetorical question -- if someone knows something about this, i'm curious to hear

uh, "spitzer," sorry

This is all about JP Morgan Chase.
JPMC's holdings in Bear Stearns were pretty heavy. JPMC execs were involved in the talks tonight leading to the loan. I wonder what sort of shit they have, and on who?

this is America -- we can't be blunt about nationalizing anything (even if that IS what we are doing in fact). we're not sensible like Europeans, you know.

it's going to be mighty tough to justify bailing out investment banks and insurance companies while letting folks get kicked outta there homes, though.

This is a lot better deal than the freddie/fannie bailout, or the bear stearns safety net, btw. This is a loan to AIG - presumably, they will be required to pay it back.

That is usually what is meant by loan.

So when this all bottoms out, what kind of damage are we gonna be looking at? A stagnating economy because investors don't have any money left to put into new businesses? Or something scarier?

Do I need to start putting my savings into a credit union or should I start spending it on non-perishables while my dollar still buys me something?

I wonder what sort of shit they have, and on who?

i think they bought a 30 percent stake in the federal government in 1907.

since we're all thinking is there going to be another great depression anyway, paul krugman makes a funny:

"KRUGMAN: Ben Bernanke and I think Hank Paulson understand that we could manage to have another Great Depression if we work at it hard enough. I think Phil Gramm might be just the guy to do it."

I'm mostly joking about the non-perishables, prone as I am to apocalypse fears. You gotta forgive me, I was raised believing the antichrist would rise in my lifetime. He'd be a remarkably charismatic young man, of humble origins and perhaps Indonesian descent, who would benefit from a meteoric rise. Lots of people would wonder about who he really was and where he really came from, but his numerically superior faithful would have faith that he'd be able to help solve the problems we'd gotten ourselves into in the Middle East.

I see no reason not to be using a credit union anyway.

This is the beginning of a long and wacky period of american history where our parents and grandparents laugh at us while we adjust to a lifestyle considerably less rich than theirs. Later, when modern science has kept them alive far longer than necessary, we will grimace angrily as they ask for help, then set them on fire and sell their property to german holding companies to pay off debt.

is it too early to try to enlist bono for a debt forgiveness campaign?

maybe at least a benefit concert.

dude, the government just fired most of U2's fan base, stop trying to dig it deeper.

i kinda wish that my depression-era surviving grandparents were still around -- esp. my paternal grandfather, who remembered the Great Depression so well that he did everything in his power to avoid debt till the day that he died (he never even had a credit card!) then again, i am prone to overreact -- it would still be interesting to have their perspective on all of this madness.

TOMBOT: aren't you being optimistic about the Germans?