Bailout Bill

[Sox]

European banks are in even bigger trouble than the U.S.,and they may not be able to do the same to pull out.

[url="http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3118994/Financial-Crisis-So-much-for-tirades-against-American-greed.html"]http://www.telegraph.co.uk/finance/comment...ican-greed.html[/url]

[Nati Ice]

[quote name='Sox' post='708472' date='Oct 4 2008, 09:31 AM']European banks are in even bigger trouble than the U.S.,and they may not be able to do the same to pull out.

[url="http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3118994/Financial-Crisis-So-much-for-tirades-against-American-greed.html"]http://www.telegraph.co.uk/finance/comment...ican-greed.html[/url][/quote]
i think i just cemented a place for myself in hell by smiling at the idea of the euro being dragged down like the dollar has been under bush. either way it seems to be a pretty standard idea for europeans to believe that the euro will come crashing back to earth eventually.

[Chris Henrys Dealer]

Here comes the bailout for Main Street

[quote]Fed to Purchase U.S. Commercial Paper to Ease Credit Crunch
2008-10-07 13:01:17.460 GMT


By Craig Torres
Oct. 7 (Bloomberg) -- The Federal Reserve Board, invoking emergency powers, will create a special fund to backstop the U.S. commercial paper market in an effort to support the financing needs of corporations.
The move comes as the credit freeze spreads to the market for short-term debt that hundreds of companies use to finance payrolls and meet other cash needs.
The Fed said it will lend against a special purpose vehicle at the targeted federal funds rate. The unit will purchase from eligible issuers three-month dollar-denominated commercial paper at a spread over the three-month overnight-indexed swap rate, according to a press release in Washington today.
The Fed said the paper purchased by the vehicle must be rated at least A1/P1/F1. Issuers will pay the unit an upfront fee based on the commercial paper initially sold to the vehicle.
The vehicle will cease buying commercial paper on April 30, 2009, unless the Board of Governors agrees to extend it.
The Fed yesterday said it will double its cash auctions to banks to as much as $900 billion, and telegraphed today's announcement by saying it was looking for other ways to alleviate liquidity strains.[/quote]

[Vol_Bengal]

[quote name='Chris Henrys Dealer' post='708163' date='Oct 3 2008, 10:16 AM']What's the deal with John Boehner gents? Is he the man the GOP are grooming for the future? Figured you folks might know as he is an Ohio player...[/quote]

its pretty funny. my best friend in high school's parents were really good friends with the Boehner's... met the guy a few times at cookouts, etc.

one word... blowhard. He's a politician... plain and simple. That is about all the description anyone needs... he's a career politician. Nice, in the two-faced way.

repub, democrat, they're all about the same, especially when you get down to the glad-handing bullshit of politicking, etc. policy is different but the way they cuddle up to the population is the same.

[Chris Henrys Dealer]

GE Commercial paper has moved in 100 basis points (1%) on the 1 month term. Overall the commercial paper market seems to be loving the news.

I think the Treasury might be able to make money on this plan as well ..it won't be like the TARP, I think they can on the TARP bill quite easily. But the spreads on CP are still wide, so it might be harder for them to here.

[Vol_Bengal]

[quote name='Chris Henrys Dealer' post='710531' date='Oct 7 2008, 09:50 AM']GE Commercial paper has moved in 100 basis points (1%) on the 1 month term. Overall the commercial paper market seems to be loving the news.

I think the Treasury might be able to make money on this plan as well ..it won't be like the TARP, I think they can on the TARP bill quite easily. But the spreads on CP are still wide, so it might be harder for them to here.[/quote]

while that is good news, and I hope so...

but you give our government too much credit. I've felt all along that, if done right, it offered the potential for the government (hence us taxpayers, supposedly) would be able to profit from this deal.

the reason I've been against it is what I said above "if our government would do it right"... that is the issue. Our government screws up more than it fixes historically so there isn't much trust / expectation of success in this regard.

they'll manage to screw it up somehow to where the taxpayer is on the hook for the money... not only will we not see a profit, we'll end up paying a debt.

[Chris Henrys Dealer]

[quote name='Vol_Bengal' post='710540' date='Oct 7 2008, 09:04 AM']while that is good news, and I hope so...

but you give our government too much credit. I've felt all along that, if done right, it offered the potential for the government (hence us taxpayers, supposedly) would be able to profit from this deal.

the reason I've been against it is what I said above "if our government would do it right"... that is the issue. Our government screws up more than it fixes historically so there isn't much trust / expectation of success in this regard.

they'll manage to screw it up somehow to where the taxpayer is on the hook for the money... not only will we not see a profit, we'll end up paying a debt.[/quote]

You've got an Indian running the TARP program man (Neel Kashkari), no way will it not make money.
(To be fair, he's American born and raised. From Ohio originally.)

[url="http://business.timesonline.co.uk/tol/business/movers_and_shakers/executive_movers/article4894011.ece"]http://business.timesonline.co.uk/tol/busi...icle4894011.ece[/url]

I'm allowed to make those jokes as my mom is Indian. That lady is better with saving money than anyone I know. In fact, whole side of the mom's family are awesome with stretching their cash, to the point that it does my head in sometimes at what they'll do to save money.

On a more serious note...the last bailout of the airlines. (Much smaller scale...after 9/11) resulted in about a $300 million profit to the tax payer. but this is probably a different ball game. What I think is different is that there is so much money on the sidelines waiting to be deployed. The Arabs have oil revenues coming out the yin yang. Asia has cash to spend. etc. And their local economies as yet do not have the ability to absorb such large inflows.


Thanks for the info on Boehner.

[sois]

[quote name='Chris Henrys Dealer' post='710546' date='Oct 7 2008, 09:12 AM']I'm allowed to make those jokes as my mom is Indian.[/quote]

So I take it you're 1/3 indian?

[Jamie_B]

[quote name='sois' post='710569' date='Oct 7 2008, 09:57 AM']So I take it you're 1/3 indian?[/quote]


HOLY CRAP :rofl::rofl::rofl::rofl:


Well played

[Chris Henrys Dealer]

[quote name='Jamie_B' post='710585' date='Oct 7 2008, 10:47 AM']HOLY CRAP :rofl::rofl::rofl::rofl:


Well played[/quote]


I know, well done. Who was the poster it originally concerned? is that thread in the hall of fame?

[Go Tory Go!]

[quote name='Chris Henrys Dealer' post='710546' date='Oct 7 2008, 09:12 AM']You've got an Indian running the TARP program man (Neel Kashkari), no way will it not make money.
(To be fair, he's American born and raised. From Ohio originally.)

[url="http://business.timesonline.co.uk/tol/business/movers_and_shakers/executive_movers/article4894011.ece"]http://business.timesonline.co.uk/tol/busi...icle4894011.ece[/url]

I'm allowed to make those jokes as my mom is Indian. That lady is better with saving money than anyone I know. In fact, whole side of the mom's family are awesome with stretching their cash, to the point that it does my head in sometimes at what they'll do to save money.[/quote]

A funny memory...at college, I was dining at an Indian restaurant with several Indian friends. At one point, one of them said we needed another napkin...and instead of going to the back to get one, the waiter took a napkin off the table and tore it in half.

[Jamie_B]

[quote name='Chris Henrys Dealer' post='710588' date='Oct 7 2008, 10:54 AM']I know, well done. Who was the poster it originally concerned? is that thread in the hall of fame?[/quote]


YoJimbo, not sure i'd have to find the thread and im half busy today so...

[Homer_Rice]

[url="http://www.local12.com/news/local/story.aspx?content_id=09017869-d476-4650-b7bf-1a712d94e887"]Boehner in the news...[/url]

[Jamie_B]

[quote name='Homer_Rice' post='710624' date='Oct 7 2008, 12:15 PM'][url="http://www.local12.com/news/local/story.aspx?content_id=09017869-d476-4650-b7bf-1a712d94e887"]Boehner in the news...[/url]

[/quote]

[Homer_Rice]

Folks should pause to think for a while before to consider what is happening. Why would the Fed find it necessary to step in and buy commercial paper? Why, if all the facilities currently available to banks are being used--and they are, are banks reluctant to deal CP except on either an overnight basis or on very strong (and unfavorable to borrower) rollovers? Why can't businesses tap their lines of credit? Why is the Fed now extending special facilities to non-traditional finance and to companies that issue CP?

It may be a logical extension of current trands, but it isn't good, folks.

The system is dead.

1) Declare a bank holiday, save the ones that can be saved, pay enlarged FDIC guarentees, kill off the bad paper and the unsavable institutions.

2) New international financial architecture. France wants it, China is amenable, Russia wants it, and India will go along. Forget BWII, kill off the Maastricht Treaty and allow European nations to take measures that fit the peculiar circumstances of their individual economies.

3) Build for the next 100 years.

Or go fascist.

[sois]

I don't understand either. If I was in the business of lending and someone just agreed to buy all of my bad debt, I would feel secure getting back to business-as-usual. Bank's just can't hold on to their money, that is not the business they are in. Are they still fearing bank runs? How do you win consumer confidence back?

I hope I'm somewhat on point here, otherwise disregard

[Go Tory Go!]

[quote name='Homer_Rice' post='710624' date='Oct 7 2008, 12:15 PM'][url="http://www.local12.com/news/local/story.aspx?content_id=09017869-d476-4650-b7bf-1a712d94e887"]Boehner in the news...[/url]

[/quote]

Funny comment on that story:

"Maybe if they put the pork in a barrel he would of [sic] known what it was."

[Chris Henrys Dealer]

[quote name='sois' post='710665' date='Oct 7 2008, 02:31 PM']I don't understand either. If I was in the business of lending and someone just agreed to buy all of my bad debt, I would feel secure getting back to business-as-usual. Bank's just can't hold on to their money, that is not the business they are in. Are they still fearing bank runs? How do you win consumer confidence back?

I hope I'm somewhat on point here, otherwise disregard [/quote]

For the US and European banks...the next factor to take care of are Credit Default Swaps (CDS). These are instruments, which provided insurance on bonds that defaulted. Now, the insurance co's and banks didn't charge enough premiums for them (it was not a centralized market, it was OTC, basically, companies dealing with each other), so now you have a situation where a lot of companies will default on bonds, (or be forced into bankruptcy) and there will not be enough cash to pay out the holders of the default swaps. hence, massive writedowns again, and money you thought you might be getting, you're not.

For the Canadian, Asian and some European banks like Standard Chartered, we didn't really get into CDS's all that much, as the risk aversion culture up here is stronger imo, (the response would be, why you buying insurance on bonds? just don't buy the bad bonds in the first place then) but we would suffer as well in the event that banks would just clamp up again. Actually 2 of the 6 Canadian banks I'm pretty sure will be in trouble, because they seem to have a uniquoe ability to step into any disaster that has occurred over the last 2 years. But as per our new incredibly tight compliance rules, I can't mention them.

[Homer_Rice]

Seen the [url="http://www.atimes.com/atimes/Global_Economy/JJ07Dj07.html"]latest Spengler[/url], CHD? It's one big, happy party! And derivatives are the booze.

Edit to add this comment: He's makes an interesting and positive remark regarding the Palin phenomenon and American character.

[Homer_Rice]

[quote name='sois' post='710665' date='Oct 7 2008, 03:31 PM']I don't understand either. If I was in the business of lending and someone just agreed to buy all of my bad debt, I would feel secure getting back to business-as-usual. Bank's just can't hold on to their money, that is not the business they are in. Are they still fearing bank runs? How do you win consumer confidence back?

I hope I'm somewhat on point here, otherwise disregard [/quote]
It's a sign of just how bad this is. A large part of the reluctance to loan has to do with the weak balance sheets of many of the banks--so there is a lot of capital been hoarded to shore up capital reserves, and there is also the securitized mortagage/arcane deriv problem out there, so it is very difficult to tell just what the status of a potential trading partner/borrower might be. Don;t want to make a loan to someone who may go beyy-up in the near term. That's why only overnight stuff or super high rates at this point. That's why the Fed is buying CP, which by the way, might actually help a little for the short term.

The problem is long term.

[Chris Henrys Dealer]

GLOBAL RATE CUTS!!!


Also, Iceland is dangerously close to collapsing.

[Homer_Rice]

[b]MEMO[/b]

Secretary of the Treasury
Washington D.C.

To all public and private financial institutions:

1) As you know, recent problems within the financial community have necessitated a series of extraordinary initiatives designed to facilitate a turnaround.

2) Until now, many of these actions have been promulgated under the authority of individual central banks among the community of nations. It is my pleasure to note that international cooperation and coordination have increased the likelihood of eventual success in meliorating the downswing in financial affairs.

3) In that vein, a number of governments and central banks in the developed world have gathered together to consider ways and means of eliciting support from privately held institutions. Having reached a consensus, the following protocol is recommended:

OPERATION LOOSE CHANGE

All financial institutions, including commercial banks and investment houses, hedge funds, stock brokerages, and sundry other dealers in securities are urged to assemble specialized audit teams for the purpose of finding and disclosing previously unaccounted for assets to be included on balance sheets.

These teams are to examine the executive lounges of said institutions, preferably late in the afternoon, to turn over cushions in bankettes and couches, thereby gathering loose coinage. Teams are also enjoined to visit mid-level executive dining areas as well as employee break rooms and cafeterias. In some cases, audit teams may wish to deploy to outside areas, including designated smoking areas and those heavily trafficked corners where employees visit local hot dog vendors at lunchtime.

Sums accumulated in this manner are to be reported to national agencies responsible for tracking this money flow. In the United States, Treasury has given this authority to the Federal Reserve. Aggregates will be compiled monthly in money supply reports, designated as M-OOLA.

Thanking you in advance for your cooperation, respectfully yours;

Henry Paulson
Secretary of the Treasury

[Chris Henrys Dealer]

^ ^ ^

Quality!


Looks like Iceland is turning to Russia for a loan. So that it can operate it's government services and economy.

[Vol_Bengal]

Homer that is pretty funny!

[Homer_Rice]

[quote name='Chris Henrys Dealer' post='710952' date='Oct 8 2008, 10:17 AM']^ ^ ^

Quality!


Looks like Iceland is turning to Russia for a loan. So that it can operate it's government services and economy.[/quote]
A good buddy of mine spent a few years at Keflavik, which I think is part of the proposed deal.

I've been thinking of that song by Dire Straits, "money for nothing and the chicks are free..."

On a side note, last night as I watched the debate, I kept thinking that McCain sounded a lot like Mr Burns from the Simpsons. I think it was the repeated utterance of "my friends" in a sibilant way that did it.