Kramer talks about CA

[Coronita]

SD Realtor and I warned you that there would be massive government intervention coming from many directions and most of you poo poo'd it. There will be lots more to come. The government serves the people and the majority of people in this country own homes or want to buy homes. They do not want to see a housing meltdown. Right or wrong the government will intervene. Anyone who didnt see this coming is a bit naive.

 

I think it's more that the government serves the financial institutions. The mere bailout is disguised as a bailout for "average joe" to make it look good, when reality is the bailout is needed for banks. If there wasn't the threat of a meltdown in the financial markets, I would think the level of government participation wouldn't be nearly as much. Bailing out average joe's is just icing on the cake.

 

 

[Bugs]

There’s “too big to fail”, and then the next step after that is “too big to bail out”. Personally, I think we passed the former 4 years ago and we’re now into the latter. All the talk is just that – talk. Unless we’re looking for a U.S. dollar trading at parity with the Mexican peso this problem is too big to simply devalue away.

Don’t forget, price correction via inflation makes everything else more expensive too. Loss of value is loss of value no matter how you look at it.

[Bugs]

There’s “too big to fail”, and then the next step after that is “too big to bail out”. Personally, I think we passed the former 4 years ago and we’re now into the latter. All the talk is just that – talk. Unless we’re looking for a U.S. dollar trading at parity with the Mexican peso this problem is too big to simply devalue away.

Don’t forget, price correction via inflation makes everything else more expensive too. Loss of value is loss of value no matter how you look at it.

[Bugs]

There’s “too big to fail”, and then the next step after that is “too big to bail out”. Personally, I think we passed the former 4 years ago and we’re now into the latter. All the talk is just that – talk. Unless we’re looking for a U.S. dollar trading at parity with the Mexican peso this problem is too big to simply devalue away.

Don’t forget, price correction via inflation makes everything else more expensive too. Loss of value is loss of value no matter how you look at it.

[Bugs]

There’s “too big to fail”, and then the next step after that is “too big to bail out”. Personally, I think we passed the former 4 years ago and we’re now into the latter. All the talk is just that – talk. Unless we’re looking for a U.S. dollar trading at parity with the Mexican peso this problem is too big to simply devalue away.

Don’t forget, price correction via inflation makes everything else more expensive too. Loss of value is loss of value no matter how you look at it.

[Bugs]

There’s “too big to fail”, and then the next step after that is “too big to bail out”. Personally, I think we passed the former 4 years ago and we’re now into the latter. All the talk is just that – talk. Unless we’re looking for a U.S. dollar trading at parity with the Mexican peso this problem is too big to simply devalue away.

Don’t forget, price correction via inflation makes everything else more expensive too. Loss of value is loss of value no matter how you look at it.

[pwilson]

I am finding it very difficult to assess in a macroeconomic way the impact of this moral hazard. I love the data, I love people with experience who can interpret the data in a meaningful way and I love the idea that places like this board can be pretty far ahead of the curve.

But I also know the sun rises every day and the smartest people in the world make giant blunders all the time. Unforseen events can turn any prediction about the future on it’s head in a heartbeat. Surely there must be some mitigating upside that we are not seeing to all of these shenanigans.

[pwilson]

I am finding it very difficult to assess in a macroeconomic way the impact of this moral hazard. I love the data, I love people with experience who can interpret the data in a meaningful way and I love the idea that places like this board can be pretty far ahead of the curve.

But I also know the sun rises every day and the smartest people in the world make giant blunders all the time. Unforseen events can turn any prediction about the future on it’s head in a heartbeat. Surely there must be some mitigating upside that we are not seeing to all of these shenanigans.

[pwilson]

I am finding it very difficult to assess in a macroeconomic way the impact of this moral hazard. I love the data, I love people with experience who can interpret the data in a meaningful way and I love the idea that places like this board can be pretty far ahead of the curve.

But I also know the sun rises every day and the smartest people in the world make giant blunders all the time. Unforseen events can turn any prediction about the future on it’s head in a heartbeat. Surely there must be some mitigating upside that we are not seeing to all of these shenanigans.

[pwilson]

I am finding it very difficult to assess in a macroeconomic way the impact of this moral hazard. I love the data, I love people with experience who can interpret the data in a meaningful way and I love the idea that places like this board can be pretty far ahead of the curve.

But I also know the sun rises every day and the smartest people in the world make giant blunders all the time. Unforseen events can turn any prediction about the future on it’s head in a heartbeat. Surely there must be some mitigating upside that we are not seeing to all of these shenanigans.

[pwilson]

I am finding it very difficult to assess in a macroeconomic way the impact of this moral hazard. I love the data, I love people with experience who can interpret the data in a meaningful way and I love the idea that places like this board can be pretty far ahead of the curve.

But I also know the sun rises every day and the smartest people in the world make giant blunders all the time. Unforseen events can turn any prediction about the future on it’s head in a heartbeat. Surely there must be some mitigating upside that we are not seeing to all of these shenanigans.

[LA_Renter]

Here is some interesting commentary as to the source of the anxiety on wall street. Doug Noland is very reasonable in most of his commentary he explains the scale of this credit crisis.

“Re: CREDIT BUBBLE BULLETIN
Road to ruin
By Doug Noland

COMMENTARY

The gentlemen at Pimco are, once again, the leading cheerleaders for another round of easier “money.” Calling for the Fed to cut rates to 3.5%, Bill Gross commented Wednesday on Bloomberg television: “The nominal [third quarter] GDP number was 4.7%. Any time you get a nominal GDP growth less than 5% the economy is basically struggling. The U.S. needs at least 5% nominal growth in order to pay its bills on a longer term basis.”

The Credit meltdown is now moving too fast and furious. Importantly, confidence is faltering for the entire Credit insurance industry, including the mortgage insurers and the financial guarantors. This is a devastating blow for the securitization marketplace, already reeling from pricing, liquidity and trust issues. The Credit system has lurched to the edge of meltdown, while the economy hasn’t even as yet succumbed to recession. It’s absolutely scary. Last week I wrote that subprime and the SIVs were “peanuts” in comparison to the CDO market. Well, the CDO marketplace is chump change compared to Credit Default Swaps and other over-the-counter (OTC) Credit derivatives that, by the way, have never been tested in a Credit or economic downturn.

The scale of the Credit “insurance” problem is astounding. According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the International Swaps and Derivatives Association we know that the total notional volume of credit derivatives jumped about 30% during the first half to $45.5 TN. And from the Comptroller of the Currency, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June. It today goes without saying that this explosion of Credit insurance occurred concurrently with the expansion of the riskiest mortgage (and other) lending imaginable. It’s got “counter-party fiasco” written all over it.”

Bugs, I think you are right, this is too big to bail out.

[LA_Renter]

Here is some interesting commentary as to the source of the anxiety on wall street. Doug Noland is very reasonable in most of his commentary he explains the scale of this credit crisis.

“Re: CREDIT BUBBLE BULLETIN
Road to ruin
By Doug Noland

COMMENTARY

The gentlemen at Pimco are, once again, the leading cheerleaders for another round of easier “money.” Calling for the Fed to cut rates to 3.5%, Bill Gross commented Wednesday on Bloomberg television: “The nominal [third quarter] GDP number was 4.7%. Any time you get a nominal GDP growth less than 5% the economy is basically struggling. The U.S. needs at least 5% nominal growth in order to pay its bills on a longer term basis.”

The Credit meltdown is now moving too fast and furious. Importantly, confidence is faltering for the entire Credit insurance industry, including the mortgage insurers and the financial guarantors. This is a devastating blow for the securitization marketplace, already reeling from pricing, liquidity and trust issues. The Credit system has lurched to the edge of meltdown, while the economy hasn’t even as yet succumbed to recession. It’s absolutely scary. Last week I wrote that subprime and the SIVs were “peanuts” in comparison to the CDO market. Well, the CDO marketplace is chump change compared to Credit Default Swaps and other over-the-counter (OTC) Credit derivatives that, by the way, have never been tested in a Credit or economic downturn.

The scale of the Credit “insurance” problem is astounding. According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the International Swaps and Derivatives Association we know that the total notional volume of credit derivatives jumped about 30% during the first half to $45.5 TN. And from the Comptroller of the Currency, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June. It today goes without saying that this explosion of Credit insurance occurred concurrently with the expansion of the riskiest mortgage (and other) lending imaginable. It’s got “counter-party fiasco” written all over it.”

Bugs, I think you are right, this is too big to bail out.

[LA_Renter]

Here is some interesting commentary as to the source of the anxiety on wall street. Doug Noland is very reasonable in most of his commentary he explains the scale of this credit crisis.

“Re: CREDIT BUBBLE BULLETIN
Road to ruin
By Doug Noland

COMMENTARY

The gentlemen at Pimco are, once again, the leading cheerleaders for another round of easier “money.” Calling for the Fed to cut rates to 3.5%, Bill Gross commented Wednesday on Bloomberg television: “The nominal [third quarter] GDP number was 4.7%. Any time you get a nominal GDP growth less than 5% the economy is basically struggling. The U.S. needs at least 5% nominal growth in order to pay its bills on a longer term basis.”

The Credit meltdown is now moving too fast and furious. Importantly, confidence is faltering for the entire Credit insurance industry, including the mortgage insurers and the financial guarantors. This is a devastating blow for the securitization marketplace, already reeling from pricing, liquidity and trust issues. The Credit system has lurched to the edge of meltdown, while the economy hasn’t even as yet succumbed to recession. It’s absolutely scary. Last week I wrote that subprime and the SIVs were “peanuts” in comparison to the CDO market. Well, the CDO marketplace is chump change compared to Credit Default Swaps and other over-the-counter (OTC) Credit derivatives that, by the way, have never been tested in a Credit or economic downturn.

The scale of the Credit “insurance” problem is astounding. According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the International Swaps and Derivatives Association we know that the total notional volume of credit derivatives jumped about 30% during the first half to $45.5 TN. And from the Comptroller of the Currency, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June. It today goes without saying that this explosion of Credit insurance occurred concurrently with the expansion of the riskiest mortgage (and other) lending imaginable. It’s got “counter-party fiasco” written all over it.”

Bugs, I think you are right, this is too big to bail out.

[LA_Renter]

Here is some interesting commentary as to the source of the anxiety on wall street. Doug Noland is very reasonable in most of his commentary he explains the scale of this credit crisis.

“Re: CREDIT BUBBLE BULLETIN
Road to ruin
By Doug Noland

COMMENTARY

The gentlemen at Pimco are, once again, the leading cheerleaders for another round of easier “money.” Calling for the Fed to cut rates to 3.5%, Bill Gross commented Wednesday on Bloomberg television: “The nominal [third quarter] GDP number was 4.7%. Any time you get a nominal GDP growth less than 5% the economy is basically struggling. The U.S. needs at least 5% nominal growth in order to pay its bills on a longer term basis.”

The Credit meltdown is now moving too fast and furious. Importantly, confidence is faltering for the entire Credit insurance industry, including the mortgage insurers and the financial guarantors. This is a devastating blow for the securitization marketplace, already reeling from pricing, liquidity and trust issues. The Credit system has lurched to the edge of meltdown, while the economy hasn’t even as yet succumbed to recession. It’s absolutely scary. Last week I wrote that subprime and the SIVs were “peanuts” in comparison to the CDO market. Well, the CDO marketplace is chump change compared to Credit Default Swaps and other over-the-counter (OTC) Credit derivatives that, by the way, have never been tested in a Credit or economic downturn.

The scale of the Credit “insurance” problem is astounding. According to the Bank of International Settlements, the OTC market for Credit default swaps (CDS) jumped from $4.7 TN at the end of 2004 to $22.6 TN to end 2006. From the International Swaps and Derivatives Association we know that the total notional volume of credit derivatives jumped about 30% during the first half to $45.5 TN. And from the Comptroller of the Currency, total U.S. commercial bank Credit derivative positions ballooned from $492bn to begin 2003 to $11.8 TN as of this past June. It today goes without saying that this explosion of Credit insurance occurred concurrently with the expansion of the riskiest mortgage (and other) lending imaginable. It’s got “counter-party fiasco” written all over it.”

Bugs, I think you are right, this is too big to bail out.

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