Hypertiger Posted March 11, 2003 Report Share Posted March 11, 2003 A few thoughts as I get ready to sleep off this work filled day... Is it just me or were the statements by Fed Governor Poole higher than normal on the alarmist scale? Twice in the past few weeks we have heard that nothing is "too big to fail". Not to mention that he puts it on the table that in the event of a GSE crisis the fed is limited to providing a maximum of $2.25 billion for any one organization which is just about as effective as Malox would be in Jonestown. How about this beauty for throwing down the gauntlet, "Capital on the books of Fannie Mae and Freddie Mac is well below the levels required of regulated depository institutions." So we have what is essentially a bank that is a bigger player than all the other banks, and they carry less capital on the books than their smaller rivals, not to mention their complete lack of diversification. Very assuring indeed. Is he just being prepared like the good boy scout with this statement, "Dismissing the risks of nonquantifiable events on the grounds that they are too improbable to worry about is not a wise approach to public policy. For one thing, these events are not so rare as they might seem. For another, the costs of a rare event that has major consequences to the economy can easily outweigh a long stream of benefits that are orders of magnitude smaller"? "Today, the housing finance system is heavily concentrated. Just three firms-Fannie Mae, Freddie Mac and Ginnie Mae-account for over 40 percent of the residential mortgage market. Ginnie Mae is backed by the full faith and credit of the U.S. Government Fannie Mae and Freddie Mac are not so backed, and hold capital far below that required of regulated banking institutions. Should either firm be rocked by a mistake or by an unforecastable shock, in the absence of robust contingency arrangements the result could be a crisis in U.S. financial markets that would inflict considerable damage". FNM's reply..."There is no other company in America with more stringent requirements to ensure its safety and soundness. These requirements include a risk-based capital standard with an economic stress test that is designed precisely for the assets we hold, is calibrated to withstand the most difficult stress scenarios faced by our nation over the last century, and is more rigorous than that imposed on any other financial institution in America." And for the sake of even more parallels to Long-Term Capital Management, even ponied out the resident Nobel Laureate with this comment, "Indeed, Nobel Laureate economist Joseph Stiglitz reviewed the OFHEO risk-based capital test and found that Fannie Mae's compliance with the rule makes the risk of default "effectively zero." Well if that doesnt make everyone feel better I dont know what will. And to top it all off, Morgan doesn't think Poole is sensitive enough...J.P. Morgan Chase said Poole has made similar comments in the past. "This is Poole's personal opinion and he has displayed lack of sensitivity in his comments in the past," the bank said, adding that the latest drop makes the shares "very attractive." Thanks Bill Poole, I'll buy you a beer for all your help with my LTSH. Should either firm be rocked by a mistake or by an unforecastable shock... Asteroids? Terrorists? Maybe... unforecastable shock? What is that? Hey I know, the collapse of the Floating exchange rate system... or the "debt backed by debt fractional reserve system" Does it qualify as an unforecastable shock? Yes, although when it was put into place officially in 1971 anyone with half a brain cell knew it would collapse, the "when" was not known... But now we have a good idea, within the next 13 -18 months... The system is the cause plain and simple the basis for all reality/ psychology in the social, economic, and political spectrum is dictated by 1 thing and 1 thing only... The creation of new debt in amounts equal to or greater than the old amounts to pay compound interest due on the combined debt pile or... Follow the religion of inflate or die... Mistake? The mistake is falling in love or having blind faith in the Inflate or die religion of central bankers... Why do the proponents say there is no risk? psychology!!!! If the truth were known the lies that make up the infrastructure of the Fantasy known as the economy would vaporize in the blink of an eye and the make work project known as existence would collapse down to reality... The gun would be removed from the heads of the victims and chaos would rule... As long as someone somewhere can borrow (Create debt out of thin air with compound interest attached owed ultimately to the Federal Reserve) then someone somewhere will receive a pay check and be an obedient member of the economic order? When borrowing slows or stops for any reason, pay checks ?disappear? and if the system reaches maxout there is no way for the pay checks to stop disappearing faster and faster until the simpleminded mortals caught up in the maelstrom like GWB and Al Greenspan or whoever else you can think of including you and your family become insignificant as the banks go bankrupt and the economy collapses into ashes? What is maxout? When the lowering of interest rates fails to stop the pay checks from disappearing or shrinking? or the ability to create debt in greater quantities than the previously created debt? Debt deflationary death spiral? Link to comment Share on other sites More sharing options...
swedjap Posted March 11, 2003 Report Share Posted March 11, 2003 The investment-related discussions here are great. Too bad that in order to read them I have to skip over the political hate speech of anti-Bush (pro-Saddam?)posters. Well said! There is actually a forum for political attacks, those who are so inclined should go there.. and play there. Link to comment Share on other sites More sharing options...
Guest Posted March 11, 2003 Report Share Posted March 11, 2003 If you don't mind me asking, in which city are you based? Perth? From reading the FR I get the impression that Oz has had it's own stock and property boom. Do you think the time of reckoning and accounting is coming soon? DeepBlueSea: yep based in Perth but not a city person, looking to head back bush when finances allow.. Oh yes I think the Aussie economy in the same straits as the other western countries but there is a bit of a lag so the cracks are only just beginning to show. Personal debt is a problem. Real estate prices seem to have levelled out but it is very difficult to find an even remotely affordable hovel these days. Melbourne prices are particularly steamy and the consensus is that prices there will drop by 50% eventually and 20-25% elsewhere. The stockmarket made its all time high in March 02 and been heading down since then, so even the market bear is relatively recent. Add to that we're such a small economy that we just tag along on the coat tails of the rest of the world and I think we will suffer a similar fate in spite of our illustrious leader telling us otherwise. I have no such delusions.. Link to comment Share on other sites More sharing options...
Goldmember Posted March 11, 2003 Report Share Posted March 11, 2003 Arm wrestling for wireless spectrum Well, they had it out today in best of three and apparently the deal was honored. The future of corporate takeovers, mergers, aquisitions? May have to psychoanalyse this one FUR a bit Link to comment Share on other sites More sharing options...
Hypertiger Posted March 11, 2003 Report Share Posted March 11, 2003 P.S. It would not matter if the debt backed fractional reserve system was administered by GOD for the 100% ethical benifit of mankind... It is doomed to collapse... every time... In fact it is impossible to run the system ethically or for the benifit of mankind for very long or at all... The inflate or die religion is an "at all costs" or the "ends justify the means" religion. If vaporising a city or releasing a plague to wipe out 3 billion humans has a chance of prolonging it then that is the logic or reasoning that will ultimately be the guiding light to salvation. War and oil shocks are just symptoms of the cause... Link to comment Share on other sites More sharing options...
BAREister Posted March 11, 2003 Report Share Posted March 11, 2003 Drech, again, HRFF could care less where merci is from or what his sources are, nefarious, shady, legit, Chicago-an or UDDERwise. He's very interested in what Merci is saying and Merci didn't seem to say much save that he had a long list of sources. So, if Merci DID say something, UDDER than his Fed sources say when push comes to SHOVE(L) LOL they'll go "whole hog" well, please let BARE know what it is/was he's sayin'. Connections and sources don't mean "squat"* (*seemed like good verbiage given the thematic DISSorientation around here LOL) unless they're good, consistently. Merci says he has 'em - butt what are they SAYIN'? Is Merci willin' to share or speak less circumlocuitously? ASS to Chicago and this unfounded ASSertion HRFF sez HORSEpucky!!! QUOTE (BAREister @ Mar 11 2003, 12:21 AM) bare What you dont get ,and its not a sin believe me, is the subterrranean ethos of the experienced Chicagoan HRFF had, for over a decade, a Polish girlfriend from the VERY "wrong" side of the RR trax FUR an Ivy League WASP from an Archie Bunker neighborhood on the South Side w friends in very high places in Chi' town (on both sides of the aisle, but mostly the D's) and, allegedly, some in- laws (or sew it was whispered, furtively, in the family) in low ones, ass in "THEY"/"THEM". HRFF had dinner one night w 'em and it was like a scene straight out of The Godfather. 'Nuff ced? He don't need no FURther enlightenment ass to Chicago mores after hearing over the course of a 12 year relationship her stories of much of her lifetime there. There are plenty of people there who, as his ex-g'friend used to say: "Will have to be screwed into the ground (when they pASS on) they're so crooked." Butt, then, so does Philly, and New Yaaawwk and New Orleans and Youngstown and Miami and Detroit and Cleveland and...well, yes, even in Washington State here and there, too. oh. he read an issue of ESQUIRE, he thinx it wuz, about half a year ago? re a tough honest cop a good Pollack from the S Side, who is running Elliott Ness's old outfit. The article said there have been over 100 Mob-related murders in Chi' town in the past 10 years or so, if The BARE recalls correctly. Only one has been 'solved'. . Link to comment Share on other sites More sharing options...
BAREister Posted March 11, 2003 Report Share Posted March 11, 2003 Anyone around here familiar with the history of either FNM or FRE? Did they start going berserk in the Bush Sr years? Or wuzzit, as The BARE thinks, in the Clinton era that they morphed into the monsters they've now become? HRFF hASS a sneaking suspicion that this is yet anUDDER Clinton era mess that The Shrub will have to contend with. Ramping/gearing went linear and to idiotic extremes commencing in the Reagan era, but it went exponential during the 1990's especially during the past 3 to 5 years. Link to comment Share on other sites More sharing options...
swedjap Posted March 11, 2003 Report Share Posted March 11, 2003 The investment-related discussions here are great. ?Too bad that in order to read them I have to skip over the political hate speech of anti-Bush (pro-Saddam?)posters. Shorty, I can well imagine how a supporter of a US President would feel frustrated to read the anti-policy statements some posters exhibit here. As a Brit, I have no USA govt indoctrinated educational background (a.k.a. brain-washing) to fight against. (I did however have to struggle long and hard to cast off the UK govt educational brainwashing). Reading your text it becomes obvious that you have succeded in casting off most of your education. Talk about mixing apples and oranges. France using nuclear weapons on the USA........... bahahahahahaha Link to comment Share on other sites More sharing options...
GregFokker Posted March 11, 2003 Report Share Posted March 11, 2003 Europe is walking the fuk - u - tures up. Corynthian Geyser formation shaping up. Link to comment Share on other sites More sharing options...
ThorAss Posted March 11, 2003 Report Share Posted March 11, 2003 If you wish your political posts read, please post them on Political Stool. If you wish them deleted, post them here. On second thought, why bother? And let's try to keep it either short or germaine or both. These long off topic posts albeit often humourous make it a daunting task to wade thru MTM looking for the posts about the markets, manipulation etc. Link to comment Share on other sites More sharing options...
Hypertiger Posted March 11, 2003 Report Share Posted March 11, 2003 France using nuclear weapons on the USA........... bahahahahahaha Once you comprehend how fractional reserve banking works you will begin to see how true thoughts like that can be... Thre are already nukes positioned in the U.S. but the conditions needed to fall into place to justify their use are unfathomable to the victims... When a fractional reserve system collapses anything can and will happen... If the leadership in the US thinks it can achieve peace by "starting wars" then they are as sadly mistaken as all the other unfortunate victims of that logic in the known recorded history of mankind... Unless they have a button that when pushed causes the entire population of the world outside the US to vanish, the logic will fail... Link to comment Share on other sites More sharing options...
Hypertiger Posted March 11, 2003 Report Share Posted March 11, 2003 Paper gold sell off and federal reserve note ramp... in progress Link to comment Share on other sites More sharing options...
ThorAss Posted March 11, 2003 Report Share Posted March 11, 2003 Ah the 3 am jam follies. (Yawn!) Link to comment Share on other sites More sharing options...
Jimbo Posted March 11, 2003 Report Share Posted March 11, 2003 BerKshire Redux The has a real turkey in Netjets - owning an airline in america is just a license to lose money - too capital intensive and too competitive. I seem to recall he had a near death investment experience in US Airways - which has now gone chapter 11. " The financial statements report a Netjet profit and a sizeable increase in profit year over year. Flight Services (NetJet) Earnings 2002: $225 Million 2001: $186 Million Thanks deep Blue sea for your stirring defence of Warren Buffet who is perhaps the greatest investor of all time. But we should let Warren defend himself shouldnt we. To quote the Chairman himself from his letter to shareholders: Though Netjet revenues set a record in 2002 the company again lost money I think we can rely on the chairmans word to settle this matter. I particulaly like the "again" part - corporate glory toy. The fact is flight services profits are not netjet profits as a cursory look at the accounts of Berkshire would prove - or by reading the Chairmans letter would reveal. The flight services profits are all derived from flight safety - the pilot training outfit - not alas netjets. I also think Berkshire has some interesting accounting when it come to retroactive insurance. The underwriting loss on this business is capitalised and basically its recognition is deferred until claims are paid. Its easy to make profits if you just keep deferring your expenses. Berkshire has deferred $3.2 billion in such expenses - no small amount. It does not look like it deferred recognition of the premiums it was paid for taking on this business though!!! They apear to go straight to the profit line. If it has deferrred the recognition of these premuims then this approach would be a perfectly valid accounting treatment. But if it has not then it would be breaching the fundamental "Matching" principle of good accounting. Unfortunately there is not enough detail in the accounts for me to tell for absolute certain. Just playing devils advocate! Link to comment Share on other sites More sharing options...
On The Beach Posted March 11, 2003 Report Share Posted March 11, 2003 The investment-related discussions here are great. ?Too bad that in order to read them I have to skip over the political hate speech of anti-Bush (pro-Saddam?)posters. Well said! There is actually a forum for political attacks, those who are so inclined should go there.. and play there. Simplistic. When the World players wh think Bush is an idiot short the market - THAT is rleelvant to REAL traders. Perma-Bears/TA dillweeds just don't get it... Link to comment Share on other sites More sharing options...
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