[stoney]

bailout fell through, tomorrow is going to be a mess. I really hope I am wrong, but if we're down 4-5% within the first hour... well hell. I really hope we are not looking at the preamble to Black Friday.

http://www.foxbusiness.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3112084&referralPlaylistId=search|overstock

This explains the idea of the bailout pretty well.

 

[jimmydean]

I heard the Treasury Department couldn't justify the 700B figure. They were just told to rationalize "a large number" and clear it through congress.

Unless they know how much they need and where to put it, I don't want them passing anything. It's going to suck loudly no matter what.

 

[dan-o]

Wall Street needs to HTFU and let clearer minds prevail. What a bunch of suspender wearing, chicken-little pussies.

 

[Samirol]

Wall Street needs to HTFU and let clearer minds prevail. What a bunch of suspender wearing, chicken-little pussies.

yeah, why are they worrying, WaMu was only the largest bank failure in US history

 

[DirtyDog]

Do we have to send our kicker checks back now?

 

[dan-o]

yeah, why are they worrying, WaMu was only the largest bank failure in US history

So what? They deserved to go out of business. What's important is that (supposedly) the only losers were the employees and the investors. Their customers' money is safe and, frankly, that's all that I care about.

 

[Samirol]

So what? They deserved to go out of business. What's important is that (supposedly) the only losers were the employees and the investors. Their customers' money is safe and, frankly, that's all that I care about.

Well, not those that had over 100,000 dollars in an account

 

[Defenestrated]

Well, not those that had over 100,000 dollars in an account

are you implying that the rich should be punished for their success?!

 

[dan-o]

Well, not those that had over 100,000 dollars in an account

http://www.fdic.gov/news/news/press/2008/pr08085.html

JPMorgan Chase acquired the banking operations of Washington Mutual Bank in a transaction facilitated by the Federal Deposit Insurance Corporation. All depositors are fully protected and there will be no cost to the Deposit Insurance Fund.

"For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," said FDIC Chairman Sheila C. Bair. "For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning."

 

[Samirol]

I'm saying that people besides investors and employees got hit by the bank failure, and bank failures affect much more than just the investors and those who put money into the bank

edit: ah, radio said that those outside the FDIC limit would get hit

 

[$tinkle]

bailout fell through, tomorrow is going to be a mess. I really hope I am wrong, but if we're down 4-5% within the first hour... well hell. I really hope we are not looking at the preamble to Black Friday.

This explains the idea of the bailout pretty well.

busted vid link, joker

i'm giving careful thought to opening up w/ market orders all around. a bit brash, yes, but considering the alternative...

 

[stoney]

busted vid link, joker

i'm giving careful thought to opening up w/ market orders all around. a bit brash, yes, but considering the alternative...

I haven't used a market order since I started trading professionally. If you want to sell in a falling market, put your limit a few cents down. Flat market - 1-2 cents over mkt. rising 4-5cents over market.
Just food for thought.

 

[stoney]

S&P futures down 3% pre-market. Unless a phenomenal news package comes out, we'll close down 5% minimum on the failure of WaMu and bailout.

 

[Damo]

Agh, just print up some more money!

 

[$tinkle]

12 SECONDS in & we're down 50.

friday, bloody friday

 

[$tinkle]

one minute
one hundred.

ok, i'm out.

 

[ohio]

http://www.foxbusiness.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3112084&referralPlaylistId=search|overstock

Heh, Patrick Byrne is hilarious. Met him in 2004 when he was reciting with glee to a bunch of MBAs in an entrepreneurship class how the first thing he did when he bought Overstock was the fire all the MBAs and ex-McKinsey consultants and hire high-school dropouts and New Jersey back-alley gangsters.

The guy loves to hate the business establishment. I think he's great, but he's a former trustafarian who is really proud of his own alternative route to business success, so take his POV with a grain of salt.

 

[stoney]

God I hate it when I'm right about siht like this...

 

[Samirol]

God I hate it when I'm right about siht like this...

Bernanke has basically spent his entire life studying the Great Depression, so I imagine he knows his ****

 

[$tinkle]

^^^ say what you will, but you just parroted nancy pelosi, who was in historically rare form today

 

[Samirol]

I didn't listen to Pelosi's speech, but I heard she ripped into the Republicans

 

[stoney]

F* NP, I've sent her 15 emails in the last week telling her that the bailout won't work in it's current form and that it should not be voted on. I've been saying for months that by the time mainstream America realizes how big of a hole we're sitting it, it will all go down. I've said it before, but my money is on Dow 5000 within 2 years. You do realize that there is over 50 TRILLION of outstanding CDS contracts that somebody has to pay for?
That makes the equity markets look like a walk in the park.

 

[dante]

F* NP, I've sent her 15 emails in the last week telling her that the bailout won't work in it's current form and that it should not be voted on. I've been saying for months that by the time mainstream America realizes how big of a hole we're sitting it, it will all go down. I've said it before, but my money is on Dow 5000 within 2 years. You do realize that there is over 50 TRILLION of outstanding CDS contracts that somebody has to pay for?
That makes the equity markets look like a walk in the park.

so what now, sell everything and invest in .223 and 12-guage ammo? I wasn't thrilled with the aspect of the bailout and I still think that in the end it's a balance sheet problem instead of a liquidity problem, but if financial armageddon is coming regardless would we be better off with or without this bill? If the CDS market is as toxic as has been hinted at we're just f'd. Completely f'd. So does that mean that even if we bail out the financial institutions and accept stock for the bailout, all of those companies are going under anyway and we'll be left with nothing *and* 700b in debt?

 

[Secret Squirrel]

... *and* 700b in debt?

That Billion with a capital B, son....

 

[stoney]

Pretty much. I'm cash and mmkt with new 401k going into Pimco Total Return Bond fund. Equities are going down. Though Fixed is over priced, it will continue to go up imho. Plus Gross is a wizard at making money in fixed.

 

[Spero]

 

[stoney]

SEC just pulled the short selling portfolio disclosure rules. Somebody wants to hide these positions. Have to wonder if it's because when they tally up the short sales they will be well over 100% of the outstanding float...

 

[Inclag]

SEC just pulled the short selling portfolio disclosure rules. Somebody wants to hide these positions. Have to wonder if it's because when they tally up the short sales they will be well over 100% of the outstanding float...

I thought the SEC suspended naked short selling last month??? I'd be surprised that there would be some time between the suspension of naked short selling and this if someone wanted to hide something. Would this mean that people couldn't look back at what was happening a month/year ago??????

 

[stoney]

1. Naked Short selling has been illegal since 1934. The SEC has selectively not enforced it.
2. The current regulations were supposed to provide transparency into the most opaque sector of equities - Short selling. Currently there is no disclosure required of short positions. You are required to publicly disclose long positions quarterly. This regulation was to a) make short holdings transparent the same way longs are b) provide for a total % of float short on companies to be made public c) scare the large short (possible naked short) positions into closing the illegal short positions.

By show these numbers to only the SEC, which is not enforcing ANY laws apparently, the SEC has removed all threat to these large funds.

 

[manimal]

here's a "common sense" bailout that saves us about 650b over the current plan.

Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:

Common Sense Plan.

I. INSURANCE

A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.

B. In order for a company to accept the government-backed insurance, they must do two things:

1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while
working with the borrower—again limiting foreclosures and ruined lives.

2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
C. This backstop will cost less than $50 billion—a small fraction of the current proposal.




II. MARK TO MARKET

A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.

B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.




III. CAPITAL GAINS TAX

A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.

B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
stand up, speak out, and fix this mess.

 

[stoney]

That is the plan I am behind. IT still has some short comings (I've posted about it in another thread), but it's light years ahead of what is about to be passed.

 

[Samirol]

B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
stand up, speak out, and fix this mess.

Would you say that the money will....trickle down?

 

[ire]

Would you say that the money will....trickle down?

It will trickle down from the super rich, to the barely rich people

 

[stoney]

CAp gains effects everybody. IF you have a taxable investment account, you lose 15% of your profits to tax. That effects everybody. Especially the lower income group, as each profitable trade is worth more.

 

[ohio]

A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.

That one piece of idiocy disqualifies this proposal. Eliminating capital gains will cost $120B based on 2006 and 2007 figures. Pretending that's not true means the author of this piece is either trying to pull a fast one or too stupid to make recommendations and I don't trust a lick of it.

 

[ohio]

Especially the lower income group, as each profitable trade is worth more.

Lower income groups don't have capital to trade. Duh.

 

[stoney]

I was referring to the lower income that is not on welfare.

 

[Samirol]

I was referring to the lower income that is not on welfare.

living paycheck to paycheck and those that have very little left over extends WAY beyond the group that gets welfare

41% say they often or always live paycheck to paycheck

 

[stoney]

Poor capital management skills. if 41% of this country lives that way, then someone failed to teach them about money and taxation.

 

[ohio]

I was referring to the lower income that is not on welfare.

What world do you live in? Mine includes people in an income range of $25-50k that includes essentially no saving outside of existing tax-shelters (401k, 403b, IRA etc.). That's 25% of the poulation. Since the median household income was $50k in 2007, that's half the country if you include those below $25k. I'm fairly certain that a good portion of the $50k-$75k (18% of the pupulation) also includes households with no savings outside of tax shelters but we don't even need to count them.

So you would offer nothing to at least 50% of the population. If you want to help them, as you claim, just increase the size of the available tax shelters. That's completely fair, available to everyone rich or poor, and ensures that the folks that need it most benefit.