San Diego Housing Bubble News and Analysis

The stocks of the four companies cited as being the principal cause, C, BAC, WFC, and JPM, are UP 60%, 53%, 37% and 49%, respectively since this article was written.

As a result, the TARP is now down only 27%, according to the same source* for the article.

Seems to me like the TARP is doing better than many pension funds, 201k's, IRA's, etc.
For the record, I am not the one who made the claim that TARP would be money good. Just thought it would be of interest to post the results of my 5 minutes of research on the contents of the article.

* http://ethisphere.com/ethisphere-tarp-in...

LOL...AIG....

(quote)

Sen. Charles Grassley suggested in an Iowa City radio interview on Monday that AIG executives should take a Japanese approach toward accepting responsibility by resigning or killing themselves.

"Obviously, maybe they ought to be removed," the Iowa Republican said. "But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide."

(end quote)

We're in the third inning of a nine inning game. I realize that Americans are impatient - that's part of what's gotten us into this mess - but can we at least play the whole game before we declare the winner and loser? Just a thought.

Can't argue with that suggestion.

AIG is turning into quite the travesty. As much as I don't like Obama, he got this one right when he came out swinging on this one.

Here's an excellent post (in my opinion) on AIG. I can't argue with the author's suggestions.

http://www.huffingtonpost.com/miles-mogu...

Actually, speaking from experience...These "guarantee" bonus payments area always renegotiable when push comes to shove.'

During the dot bomb implosions hey-days, there were cases in which bonus/compensation was signed with a 2-3 year agreement with a full vesting clause for early termination from RIF. When push came to shove, and folks got axed, companies ended up cutting the "guaranteed" bonuses down to 40-50%. Companies figured that for the cost of a employee to hiring an an attorney, sue, and try to recoup the amount + time in litigation, it would bring the take home comp back to around 40-50% Pretty shitty thing to do from an employee perspective, but in this particular circumstance, it would be appropriate. Most people ended up settlng for the reduced bonus distribution, if any.

Dave: You do realize you're the "deified member of the banking class" that Breezie's referring to, right?

You grasping, greedy plutocrat, you!

But of course. And all this time I assumed I was the only person who viewed myself as a deity. Welcome to my growing flock, one and all!!

Now, pardon me while I head off to the Ecclesiastical Supply Store for some collection plates. I mean, times are tough, right?

This made me spit out my coffee, laughing.

Dave: Just so you know, I've always considered you something of a GLF (God Like Figure). I don't know if that qualifies you in Breezie's eyes (after all, he will undoubtedly compare you to his personal savior, Obama), but it might come close.

Remember when we were discussing people who can't read a balance sheet, but feel competent enough to opine on financial matters? Well, look no further than good old Breeze.

In the greatest traditions of unthinking and non-thinking leftists everywhere, he takes a simplistic article focused on the very beginnings of the financial crisis and conveniently uses it to excoriate you for having employed a reasoned approach to the situation. He also remains indicative of a large segment of the population that is willing to leave their brains at the door and blindly blunder after whatever idiot seems to have the best story.

http://www.foxnews.com/politics/2009/03/...

To Recover AIG Bonuses, Lawmakers Scramble to Undo Protections They Approved
Though Connecticut Democratic Sen. Chris Dodd is among those leading the charge on retrieving AIG bonuses, an amendment he added to the $787 billion stimulus bill last month created a roadblock to getting that money back.

Now this is some funny shit,

Chirstoper Dodd writes an amendment to the stimuls bill protecting the bonus money that was "guaranteed" before 2/11/2009 and now that it's been paid out and found out and

there is public outcry over it (as there should be) his own bill is preventing them from getting the money back.

Talk about having something blow up in your face, I bet Barry O is fit to be tied right about now.

FWIW the linked artilce states that the Senator that got the most campaign money from AIG - yep thats right Chris Dodd.

An ole Chris was gonna repay the favor by stacking the deck only the deck has just crashed hard on his head.

As I said, that's funny right there, I don't care who you are .. that's funny

Arraya: See linked article from WashPost regarding outcry over AIG bonuses.

http://www.washingtonpost.com/wp-dyn/con...

The interesting part is the reference to AIG employees staying away from work because of death threats via email and voice mail. One of the managers said that he felt that things would "end badly", meaning that someone would be seriously injured or killed over this.

This is some ugly shit. This is genuine outrage and you do have the sense that it could turn violent or deadly. How this situation is handled will really set the tone, for better or worse, for similar situations moving forward.

Allen-This is quickly morphing into a political crisis. I saw that article earlier today. AIG is definitely an interesting entity. Started as an OSS vessel in 1919 and morphed into the biggest insurance co in the world. Also it started in China and was very active in spying during WWII. Lots of secrets there.

Good write up here on the current fiasco:

Wait. Hold it. Who designed, and is ultimately responsible for, the AIG bail-out? That would be the president of the New York Fed, right? And who was in that seat at the time the bail-out was executed, back in September? That's right, it was Tiny Tulip Tim Geithner, the same guy whose direct boss these days, one Barack Obama, said this morning he was "choking with anger" over the consequences of the bail-out terms his own Treasury Secretary drew up a mere 6 months ago. If you're the president, you have something better to do than choke, sir. You need to act.

Larry Summers, the economic behind-the-curtain sorcerer, says he is "outraged" over the bonuses. Makes you wonder when Timmy will start venting his anger over his own bungled broken words? (By the way, I see many different figures for the AIG bonuses float by. I’ll stick with Rep. Elijah Cummings for now, who puts the total at $1 billion.)

Talking about Larry Summers, I don't want to bore you with repetition, but he is the guy who, along with Robert Rubin and their Citi and JPMorgan golf cronies, deregulated US finance 10 years ago, without which none of the disastrous leverage, risk taking, out and down-right gambling and beyond comprehension screwed-up conflicts of banking interests that are the number one core of the present financial mess would have been possible. Want to know who worked closely with them then? yeah, Tiny Tim. He was Under Secretary of the Treasury for International Affairs during Rubin and Summers' stints as Treasury Secretaries, a true crown prince. Geithner is a shadow hand puppet and a docile servant who either badly bungled the AIG "rescue" or meant it to be what it is from the get-go. You choose. Either way, we're back to the theatre of the absurd I’ve talked about many times.

Bennie Bernanke was the first Fed head to do a TV interview in 20 years yesterday. Why do you think he did? Can you spell spin doctor? Here's a quote: "Lehman proved that you cannot let a large internationally active firm fail in the middle of a financial crisis," Bernanke said.. Who was in charge of the Fed when Lehman was unceremoniously sunk? You're 2 for 2, it was Bernanke.

http://theautomaticearth.blogspot.com/20...

Yup...I caught that too.

What's getting even more funnier (i know there is no such word) is despite what Obama has been saying about ethics/integrity, that appointment after appointment, each keeps turning up with some skeleton in the closet. First it's Geitner's slippery slope tax evasion. And now this....

Obama's CIO mired in bribery allegations.

http://www.computerworld.com/action/arti...

http://valleywag.gawker.com/5172741/whit...

What the heck. It's almost as if this is a page out of Sales/Marketing 101...If you have a really sour fruit. Market is as the "the juicest, sweetist fruit on the planet"....Similarly, if your appointments/buddies has ethics issues, market your administration as the "most ethical administration, where ethics is #1".

I have to hand it to the Bush administration. Although that was notorious admin, they were better at covering up their corruption. This admin, either they are too dumb to cover up stupid shit or they are so arrogant/flamboyant about it that they don't care.

Change, you betcha.

------

Kundra takes leave of absence from federal CIO post
The move follows allegations of bribery in D.C. office he ran
By Patrick Thibodeau

March 13, 2009 (Computerworld) WASHINGTON -- The fallout from Thursday's arrests of a District of Columbia IT security official and contractor quickly raised questions about the fate of Vivek Kundra, the new federal CIO who until recently ran the office now mired in bribery allegations.

Until his appointment by President Barack Obama as CIO less than two weeks ago, Kundra was chief technology officer for the District of Columbia. But yesterday, Kundra's former ninth-floor office in a downtown government building was a crime scene. A police officer was stationed in the office lobby while investigators searched through records.

A White House official confirmed today that Kundra took a leave of absence from his new CIO job shortly after federal investigators arrested two men in the D.C. government office on bribery charges. The official would not elaborate on the reasons for the leave; there were no indications yesterday that Kundra was involved in any wrongdoing.

Kundra's decision could slow his plan to create a "revolution" in the federal government's use of technology.

On the face of it, the allegations have the appearance of a simple financial crime: bribery. Two men have been charged: Yusuf Acar, who currently is the District of Columbia's acting chief security, earning $127,468 a year, and Sushil Bansal, CEO and founder of Advanced Integrated Technologies Corp., a Washington-based outsourcing vendor that has won a number of contracts from the district's IT department.

Federal law enforcement officials allege that the two men created "ghost" workers -- people who existed only on time sheets -- and overbilled the district for software licenses.

Acar and Bansal were arraigned in U.S. District Court yesterday. Bansal was released on the condition that he remain in the area, but Acar was locked up for a long list of reasons spelled out by the U.S. District Attorney Tom Hibarger. He pointed to Acar's connections to Turkey and to alleged efforts to create bank accounts outside the U.S.

In addition, Hibarger told the judge that officials didn't know whether Acar still had access to the district's IT systems. Hibarger's concern, and Acar's role as an acting chief security officer, raised questions about the security of the systems and whether they've been compromised as part of the bribery scheme.

Asked whether the district government is looking into the security of its IT systems in the wake of the arrests, a spokesman for the D.C. mayor's office deferred comment, for now, to the FBI and U.S. attorney office, which are leading the investigation. A spokeswoman for the U.S. attorney's office wouldn't comment on any IT-related aspects of the case

HA HA.. This just gets more comical by the minute....
----
http://finance.yahoo.com/news/Citigroups...

Citigroup's top economist tapped for Treasury post

Citigroup chief economist Lewis Alexander to become counselor to Treasury Secretary Geithner
Jeannine Aversa, AP Economics Writer
Tuesday March 17, 2009, 8:32 pm EDT

Citigroup's chief economist is being tapped for a job at the short-staffed Treasury Department, which is at the center of the Obama administration's efforts to battle the financial crisis.

Lewis Alexander will become a counselor to Treasury Secretary Timothy Geithner, according to a government official who spoke on condition of anonymity because a formal announcement has not been made. Alexander will work on domestic finance matters, the official said.

Alexander had worked at the Federal Reserve and also served as the Commerce Department's chief economist in the 1990s.

Wow. So, this is what we've become? A nation of incompetent, bumbling criminals and cronies? This is like something out of a "Pink Panther" movie. I haven't figured out who is playing Closeau yet.

This is sad. Pathetic and sad. To come to power with such promise and such a clear-cut mandate from the people and respond with this sort of ham-handed bungling is unconscionable. And the problem is: When you point it out, you're accused of being a right wing nutjob or GOP hack.

I do not consider his election a mandate, more of a symbolic gesture on the part of the bleeding hearts. Who is sorry now?

Man, what if every AIG employee were to die? Man, that would be interesting.

By the way, I wish all of you top-1-percenters good luck in the upcoming war between you and the rest of America. I think it will be a good, clean, fair fight where stolen wealth makes not a whit not.

It looks like you top-1-percenters will also have some help in the form of Alan from Fallbrook -- he of the excellent balance-sheet reading skills. So tell us Alan, using your supersharp balance-sheet reading skills, where will the U.S. end up vis-a-vis the TARP? Up 10%? Down 35%? Will taxpayers lose it all? Will the government come up with some other feces-filled plan to bail out the TARP so that it looks like the TARP actually makes money in the end?

You top-1-percenters be sure to make good use of Alan during the battle. Of course, he will probably have his head so far up davelj's ass that he can't shoot straight, but you top-1-percenters should be used to that. Good luck, and God speed.

On a different note, did anybody catch the Daily Show tonight? Did you see the bit on 'Ragooch'?

LMAO...! Really damn funny...

Bring in Stanley Ragooch!

Call 555-GABAGOOL!

What should Obama do differently here? (Not a trick question.)

For my part, what little I know, I think the response to the financial crisis has been altogether too 'establishment'. Summers is a dufus. Tax-cheat geithner is in way over his head. Volcker is awesome, but he seems to have been sidelined. Bernanke is a clown but he works from the Fed side. Nobody from Citi should have a job. AIG management should have been thrown in Guantanamo and Madoff should have been stoned to death. I mean, WTF???

I'm definitely pulling for a successful Obama presidency. I don't want to see the country go up in smoke. But I think he needs to staff the administration with people who are capable and willing to 'flush' the fraud out of the system. Ass-kickers, not ass-kissers.

We need "Stanley Ragooch". I'm tellin' you...

I'm concerned, but not jumping to conclusions. The difficulty level is just off the charts, and it's been what, like 2 months? My observations above.

It's not like the Raiders haven't opened a season with a loss before... ;-)

BTW, Ragooch NEVER loses.

I think the irony is that eventually I'd say in about 2-3 years, "the rest of america" who is so infactuated with Obama, will sadly learn that despite all the rhetoric, all Obama will have done is redirected all of the public's money into the top 1% of people of his corrupt people that funds his administration, despite the handwaving of "war on the rich". Same shit, different corruption, and a good percentage of americas as just gullable to fell for it, just like a good percentage of americas fell for the bush(it) administration. Isn't it alarming yet that it's not even the 1 year mark, and a good portion of Obama's picks have been entangled in ethics/controversy?

BTW: this shock and awe at the AIG bonus is going to backfire if it comes to when AIG needs more bailout, and the Fed/public says hell no...It will be interesting to see what ends up causing the tailspin down. All Obama/Democrats did was paint themselves into a corner. Damned if they help AIG again, damned if the dont. If the bonus was such an issue, why wasn't it redflagged earlier?

Regarding the AIG bailout bonus scandal:

Frankly, I am more concerned about what they have
done with the other 169.835 Billion dollars than
what they did with the 0.165 Billion in bonuses.

It's as if we gave our kid in college an extra $500 in allowance last month, primarily to cover his credit card bill, then getting pissed that he spent 50 cents on a candy bar.

Meanwhile: Obama's CIO's criminal past (in addition to the recent bribery scandal)

Add petty theft to his resume dating back to 1997
Maybe that why this administration hired him. This administration needs to build expertise in this area! Lol.

http://valleywag.gawker.com/5171500/bara...

I thought GLF was "Good For a Laugh." I know it's tongue-in-cheek but you're going to jinx me, Allan. Please hurl some vindictive expletives in my direction when time permits. It'll save you time later. Trust me.

Regarding Breeze, all of us are upset at a lot of the crap that's being pulled these days (reminder: I don't work for or with Citigroup, Bank of America, or any bank that has received TARP funds), but it's clear to me that Breeze is consumed with a bitterness that transcends this crisis. And nothing - including economic recovery and repayment of TARP funds, should they occur - can remedy that. If you've convinced yourself that you're a victim and a tool of The Man, then you're a victim and a tool of The Man. Plain and simple.

Allan can answer this himself, but I'll give you my own stab, just as an update.

Let's assume that 30% of the Big Bank TARP preferred ultimately gets converted to common and ultimately loses half of its value (and pays no 5% dividend). Further let's assume that 5% of the community-bank TARP preferred goes to zero. (I've seen some bad TARP grants in this group - likely to go to zero - but it's a small percentage of the total.) So, that's a 20% permanent loss of principal, with just 65% of the TARP preferred still paying the 5% dividend. Add that up over 5 years and the Treasury ends up getting back 83% of its capital. And that's a pretty dire scenario - that probably corresponds with a 15% peak-to-trough decline in GDP. Possible but not probable.

The Treasury obviously thinks it's going to get back 125% of the capital (that is, everyone pays their 5% dividend and pays back the principal in 5 years). I think that's too optimistic. Possible but not probable.

I think we probably end up with somewhere between 90% and 100%, with a handful of shnafus being offset by the vast majority making their dividend payments and returning the principal. I'd say the 90% confidence band is between 80% and 110% (the percentage of capital returned to the Treasury).

And if I'm wrong, we can come back here and you can mock me and I'll say, "Yep, I was wrong. Moving on." But let's give it time to play out. I know Americans are an impatient lot, but...

Now, I can't speak for the AIG funds. There's gotta be a big loss in that sucker. But I don't know how big (does anyone?). My guess is that the longer the govt. has to work out AIG and sell off the businesses, the lower the ultimate loss will be. In the meantime, however, anyone at AIG who won't work without a bonus should attempt to find other employment. I'm reminded of a quote from some general (can't remember the name): "The graveyards are filled with 'indispensible' men."

Dave: Well, according to Breezie's edict, I'm apparently not allowed to hurl any invective your way, given that you and I are essentially in lockstep.

On a serious note, you're pointing out Breeze's bitterness was exactly the same point I made about him and his ilk.

Any attempts to use logic or reason are shouted down or made fun of (note his continued diatribe against my "balance sheet" reading) and this is a typical leftist tactic favored by "know nothing" polemicists. As much as Breeze would demonize someone like Sarah Palin for her attitudes against education and knowledge (and rightfully so), he does exactly the same thing when education and knowledge run contrary to what he believes or wants.

He's a well propagandized victim and tool of The Man, alright. Exactly what Lenin referred to when discussing the "useful idiots" that communism would need if it were to prevail. Nobody blinder than one that will not see.

Does anybody else get the feeling that the AIG bonus outrage is all really just a cover? As long as we are all screaming mad at AIG, we cant be screaming mad at Congress, Obama (though I doubt we will get there for another 6 or so years) or the FED bungling of it all. So we rant about bad contracts written long before the Q4 blow up in the markets. We threaten to hang AIG executive's children with piano wire (what did the kid do again????), and we vent on blogs and talk shows about how it isnt all fair and such.

All the while we dont question the FED printing another Trillion today to manipulate the markets so we can kick the can alittle farther down the road. We dont question the seeming inability of the Obama administration to appoint people who are not "good old boys" or crooks. We dont question why we are following Dodd and the other 'leaders' in Congress who are just as responsible for this mess as anyone in AIG.

I feel like I am watching a sacrifical lamb before the slaughter.