I think htat it’s been clear that this is the best solution for some times, but the fact that The New York Times editorial board has endorsed this action, recognizing that there are Zombie banks, even if Ben Bernanke denies this, is significant.
The conventional wisdom is moving, and one hopes that mssrs Bernanke and Geithner will recognize this and act in a prompt manner.
Ben Bernanke, who is saying that there is no such thing as a US Zombie bank:
They all have substantial franchise value. They are all lending — all active. All have substantial international franchises.
Between him and Timothy “Eddie Haskell” Geithner, we are fracking doomed.
Well, it looks like Benyamin Netanyahu is intends to go full Herbert Hoover on the Israeli economy.
He’s saying that tax cuts are all that Israel needs to fix the economy.
What a bloody tool.
It looks like the corporate whore Blue Dog and New Democrat caucuses are doing their level best to kill the ability of bankruptcy judges to rewrite mortgages on primary residences. (Cram-downs)
Chairman of the New Democrat Caucus, Ellen Tauscher, that it’s not fair to people not in bankruptcy who are being screwed by their banks, which is complete bullsh$#.
If people have the stick of cram-downs to wave at the banks, it makes those banks much more likely to renegotiate loans.
What’s more, it only applies to loans already made, not those going forward, and, depending on draft, may only be limited to sub-prime mortgages…..It is very weak tea to begin with.
This is “I want donations from the banks” crap, and Ellen Tauscher is in a very safe Dem district, having won each election with more than 65% of the vote since redistricting.
She needs to be primaried, but according to Act Blue, she does not have a primary opponent right now…..Damn.
Well, it appears that Thain has told investigators that Bank of America CEO Ken Lewis knew of the bonuses that he rushed through just before the merger, but he was prohibited from discussing it any further by BoA, absent a subpoena, so New York Attorney General Cuomo accommodate him, and got a court order.
So now Thain has provided details on all Merrill Lynch bonuses, though this information is still under seal with the court, ostensibly to deal with confidentiality issues.
I understand where Thain is coming from. If he testifies under the compulsion of a subpoena, then he is not liable for anything that he says, he is indemnified, even if would otherwise violate a NDA or other severence package.
It appears, though it is by no means certain, that Lewis, or his agents instructed Thain not to talk, which would appear to be obstruction of justice.
This should get interesting, as Cuomo has subpoenaed Lewis as well, and given that Thain’s testimony is under seal, significant discrepancies might lead to legal problems for him.
But I’m an engineer, not a lawyer, dammit!*
*I LOVE IT when I get to go all Doctor McCoy!!!
Louisiana has gotten $130 billion in post-Katrina aid. How is it that the stars of the Republican austerity movement come from the states that suck up the most federal money? Taxpayers in New York send way more to Washington than they get back so more can go to places like Alaska and Louisiana. Which is fine, as long as we don’t have to hear their governors bragging about how the folks who elected them want to keep their tax money to themselves. Of course they do! That’s because they’re living off ours.
You go, girl.
So, the new unemployment numbers are out, and once again, they are brutal, with adjusted initial claims hitting 667,000, up 36,000 from last week, and the less noisy 4-week moving average hit 639,000, up 19,000, while the continuing claims are at 5,112,000.
As Calculated Risk notes, the 4-week moving average is the highest since 1982, and the continuing claims are the highest ever recorded, though both are somewhat better when normalized against total workforce size. (Graph at CR)
We also saw durable goods orders fall to a 6 year low, and new-home sales fell in January, the lowest number since records started to be kept in 1963.
We also have banks cratering with the FDIC list of problem banks up 50% in Q4 of 2008.
BTW, it’s hitting the export driven economies of Asia even harder, with Singapore’s Q4 GDP falling at a 16.4% annual rate.
We also have oil down following the announcement of production cuts by the UAE, and the dollar is down, for reasons that are not entirely clear to me.
At Cosi Cafe, from 7:30 to 8:30ish. I’ll be there at 7 to greet people.
Not a whole bunch of people there, so your attendence is appreciated.
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Because when you look at the Treasury’s terms of their Capital Assistance Program, (Treasury link)it’s clear that they are propping up Citi, the weakest of the Zombie banks, because it’s purchasing preferred stock, and “These shares can convert at the firm’s discretion (with the approval of their regulator) into common equity if needed to preserve lending in worse-than-expected economic environment at a conversion price set at a 10% discount from the prevailing level of the institution’s stock price as of February 9, 2009.”
Why February 9, 2009? Because that’s the day before Citi’s common share price fell off a cliff.
If they go back any further, it makes it transparently clear that Citi is insolvent, and Timothy “Eddie Haskell” Geithner is trying to avoid placing it into receivership…So….More zombie banks.
If you want any confirmation that they won’t nationalize pre-privatize the big banks ever, you need only look at Bernanke lobbying for a weakening of the mark to market rules, so that they can call the valueless sh^% on their books a pony.
It appears that everyone is doing their level best to duplicate the mistakes of the Japanese in the early 1990s.
Citi is trading at less than $3/share. BoA ain’t doing much better. Their shareholders are already wiped out. This is about letting senior management keep their jobs, even after they mismanaged our finance system out of existence.
It appears that there was a deal to open the borders to Gaza. It seems to have involved a prisoner release by Israel and the PA in exchange for the release of Gilad Shalit, but PA walked away from the deal, “because the Fatah officials believed it would weaken them.”
These guys really don’t have a clue. If Hamas releases Shalit, is ready to release Shalit, even with a significant release by the Israelis is going to be a net minus for Hamas, because it removes a bargaining chip from their hand, and because it means that they have negotiated a deal.
But the leadership of the PA is so damn timid, they snatch defeat from the jaws of victory.
And existing shareholders will be wiped out.
How do I know this?
Because Ford has concluded negotiations with the UAW to allow them to fund their health care trust fund with stock.
If there is anything that I am sure of, it is that when equity in a company is used as a benefit for rank and file workers, they will be wiped out, along with other share holders, in a bankruptcy.
Call me a cynic, but just ask the United Airlines pilots.
Former Washington State Governor Gary Locke.
This is assuming, of course, that he doesn’t:
Welcome to the White House, Mr. Shrimpton.
Case in point, Bank of America CEO Kenneth Lewis, who is now saying that Merrill-Lynch and Countrywide Financial are, or will be “stars” this year:
Bank of America Corp. Chief Executive Officer Kenneth Lewis said Merrill Lynch & Co. and Countrywide Financial Corp., the two acquisitions that some analysts say helped push down the bank’s share price, have been “stars” so far this year.
Lewis, speaking today in a Bloomberg Television interview from his Charlotte, North Carolina, headquarters, said Merrill will be “a thing of beauty” over the long term. Merrill, the New York-based securities firm, lost $15.8 billion in the fourth quarter.
Ummm….This guy is ready for the rubber room….Seriously.
It appears that there never was a rule requiring people conducting a filibuster to talk, it was just a matter of custom until some point in the 1970s.
Live and learn.
More brutal numbers on home sales, with sales of existing homes falling to a 12 year low.
Note also that existing home sales are becoming a bigger part of home sales in general, as foreclosures and other distressed sales make up a bigger part of the market.
Of course this can’t compare to the financial putrescence that is AIG, which just failed on an asset sale.
It wanted to use the proceeds to pay down some of its debt to the US government, but could not because of a lack of bidders. No one wants their crap.
BTW, Ken Lewis’s gift keeps on giving to Bank of America, because Merrill-Lynch lost $15.84 billion in Q4, about $500 million more than predicted.
There was an unexpected decline in gasoline stocks that drove oil higher today, while the poor housing news and the declines in the stock market have driven the dollar up as people look for safe havens.
A little bit under the weather, so my mind wandered, but it was a good speech, but I’m an engineer, so I want to see the numbers.
If memory serves, the ‘Phants were doing their hissy fit thing because Hilda Solis would support the EFCA, because they think that it’s wrong for a Labor Secretary to, well, support labor.
McCain decided to to take a shot at Obama regarding the escalating cost of the new Presidential helicopter, the VH-71, which has suffered massive cost overruns (as a result of Bush and His Evil Minions™ gold plating the mofo):
Said the president’s former Republican rival, “Well, thank you, Mr. President. And thank you for doing this…Just one area that I wanted to mention that I think consumed a lot of our conversation on procurement, it was the issue of cost overruns in the Defense Department. We all know how large the defense budget is.”
And, McCain noted, “your helicopter is now going to cost as much as Air Force One. I don’t think that there’s any more graphic demonstration of how good ideas have — have cost taxpayers an enormous amount of money.”
Meow…..That’s a slam, right?
Not so much:
Said Obama, “I’ve already talked to (Defense Secretary Robert) Gates about a thorough review of the helicopter situation.”
Added the president, to laughter, “the helicopter I have now seems perfectly adequate to me. Of course, I’ve never had a helicopter before. So, you know, maybe — maybe I’ve been deprived and I didn’t know it.But I think it is a — it is an — an example of the procurement process gone amuck, and — and we’re going to have to fix it.”
I think that he was expecting this from someone, and had just the response to make the accuser look small and petty.
So, Barry Ritholtz shows us this graph of comparisons between bear markets, and the current one is now the 2nd worst in history.
Obviously, this is for the Dow which is (at best) a rather imperfect market indicator, but we are now in the worst downturn since the Great Depression.
That’s the only way you can describe it, and seeing as how he rolled it out hours before his speech to Congress, they want it buried.
19 months with a 50,000 troop “residual force,” is not a good thing.