Home › Forums › Financial Markets/Economics › TARP now estimated to cost $356 billion
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davelj.
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April 6, 2009 at 6:36 PM #377699April 6, 2009 at 6:45 PM #377084
davelj
Participant[quote=TheBreeze][quote=davelj]
Please explain to me – and please be specific – how I would benefit from the bailouts? Seeing as I don’t have any investments in any parts of the capital structures of any bank that is receiving any government assistance (outside of generic FDIC insurance), I’m quite curious to find out. This should be a fascinating answer.
Signed,
Banker/Prick
[/quote]That may have been an inaccurate characterization on my part. Does your bank own any preferreds or other debt of the big banks?
Did you say in another thread that you were in favor of the big banks’ bondholders taking a hit? If so, you may have a reasonable plan. However, you appear to believe that the government is heading in that direction (and that the government wants to make money with TARP). I haven’t seen any evidence that would point to that.
[/quote]As to your first question, no. How on earth can you read my posts and come to the conclusion that I would think it was o.k. to own any part of the capital structure of the Big Pigs? But I digress.
Regarding the Big Banks’ bondholders taking a hit, I don’t have a problem with this… so long as it’s part of a “rolling recap.” So, as I’ve been saying, I’m not in favor of wiping these folks out through receivership, but if things continue to deteriorate I have no issue with forcing a conversion of their bonds into equity if that becomes necessary. Better than putting more taxpayer money at risk, right?
April 6, 2009 at 6:45 PM #377361Participant[quote=TheBreeze][quote=davelj]
Please explain to me – and please be specific – how I would benefit from the bailouts? Seeing as I don’t have any investments in any parts of the capital structures of any bank that is receiving any government assistance (outside of generic FDIC insurance), I’m quite curious to find out. This should be a fascinating answer.
Signed,
Banker/Prick
[/quote]That may have been an inaccurate characterization on my part. Does your bank own any preferreds or other debt of the big banks?
Did you say in another thread that you were in favor of the big banks’ bondholders taking a hit? If so, you may have a reasonable plan. However, you appear to believe that the government is heading in that direction (and that the government wants to make money with TARP). I haven’t seen any evidence that would point to that.
[/quote]As to your first question, no. How on earth can you read my posts and come to the conclusion that I would think it was o.k. to own any part of the capital structure of the Big Pigs? But I digress.
Regarding the Big Banks’ bondholders taking a hit, I don’t have a problem with this… so long as it’s part of a “rolling recap.” So, as I’ve been saying, I’m not in favor of wiping these folks out through receivership, but if things continue to deteriorate I have no issue with forcing a conversion of their bonds into equity if that becomes necessary. Better than putting more taxpayer money at risk, right?
April 6, 2009 at 6:45 PM #377538Participant[quote=TheBreeze][quote=davelj]
Please explain to me – and please be specific – how I would benefit from the bailouts? Seeing as I don’t have any investments in any parts of the capital structures of any bank that is receiving any government assistance (outside of generic FDIC insurance), I’m quite curious to find out. This should be a fascinating answer.
Signed,
Banker/Prick
[/quote]That may have been an inaccurate characterization on my part. Does your bank own any preferreds or other debt of the big banks?
Did you say in another thread that you were in favor of the big banks’ bondholders taking a hit? If so, you may have a reasonable plan. However, you appear to believe that the government is heading in that direction (and that the government wants to make money with TARP). I haven’t seen any evidence that would point to that.
[/quote]As to your first question, no. How on earth can you read my posts and come to the conclusion that I would think it was o.k. to own any part of the capital structure of the Big Pigs? But I digress.
Regarding the Big Banks’ bondholders taking a hit, I don’t have a problem with this… so long as it’s part of a “rolling recap.” So, as I’ve been saying, I’m not in favor of wiping these folks out through receivership, but if things continue to deteriorate I have no issue with forcing a conversion of their bonds into equity if that becomes necessary. Better than putting more taxpayer money at risk, right?
April 6, 2009 at 6:45 PM #377582Participant[quote=TheBreeze][quote=davelj]
Please explain to me – and please be specific – how I would benefit from the bailouts? Seeing as I don’t have any investments in any parts of the capital structures of any bank that is receiving any government assistance (outside of generic FDIC insurance), I’m quite curious to find out. This should be a fascinating answer.
Signed,
Banker/Prick
[/quote]That may have been an inaccurate characterization on my part. Does your bank own any preferreds or other debt of the big banks?
Did you say in another thread that you were in favor of the big banks’ bondholders taking a hit? If so, you may have a reasonable plan. However, you appear to believe that the government is heading in that direction (and that the government wants to make money with TARP). I haven’t seen any evidence that would point to that.
[/quote]As to your first question, no. How on earth can you read my posts and come to the conclusion that I would think it was o.k. to own any part of the capital structure of the Big Pigs? But I digress.
Regarding the Big Banks’ bondholders taking a hit, I don’t have a problem with this… so long as it’s part of a “rolling recap.” So, as I’ve been saying, I’m not in favor of wiping these folks out through receivership, but if things continue to deteriorate I have no issue with forcing a conversion of their bonds into equity if that becomes necessary. Better than putting more taxpayer money at risk, right?
April 6, 2009 at 6:45 PM #377704Participant[quote=TheBreeze][quote=davelj]
Please explain to me – and please be specific – how I would benefit from the bailouts? Seeing as I don’t have any investments in any parts of the capital structures of any bank that is receiving any government assistance (outside of generic FDIC insurance), I’m quite curious to find out. This should be a fascinating answer.
Signed,
Banker/Prick
[/quote]That may have been an inaccurate characterization on my part. Does your bank own any preferreds or other debt of the big banks?
Did you say in another thread that you were in favor of the big banks’ bondholders taking a hit? If so, you may have a reasonable plan. However, you appear to believe that the government is heading in that direction (and that the government wants to make money with TARP). I haven’t seen any evidence that would point to that.
[/quote]As to your first question, no. How on earth can you read my posts and come to the conclusion that I would think it was o.k. to own any part of the capital structure of the Big Pigs? But I digress.
Regarding the Big Banks’ bondholders taking a hit, I don’t have a problem with this… so long as it’s part of a “rolling recap.” So, as I’ve been saying, I’m not in favor of wiping these folks out through receivership, but if things continue to deteriorate I have no issue with forcing a conversion of their bonds into equity if that becomes necessary. Better than putting more taxpayer money at risk, right?
April 6, 2009 at 6:47 PM #377089Allan from Fallbrook
Participant[quote=TheBreeze][quote=flu]
Breezie. What is it that you want? Do you want a complete collapse of the U.S. economy? Do you look forward to everyone being thrown on the street, no food, no water, and everyone armed with guns, reversion back to the wild wild west in which needs/wants are satisfied the ones with the bigger guns….It’s not a question of whether or not government throwing more money is risky or not. Everything has risk. Guess what, this is the almost like General Custard’s last stand. It’s the Hail Mary, or whatever your faith calls it. Obama and this administration just traded off our future generations by how much we’re going to spend. We’re going to be spending more money on bank bailouts. You think there are better alternatives?
[/quote]Ah, the old false choice. Either we give all of our monies to the financial oligarchy or we all live in decrepit poverty the rest of our lives.
How about this choice: We throw every member of the financial oligarchy in jail, take their ill-gotten money, and distribute it to the rest of the population and use it to pay down debt. Why is that not a viable option? In your warped world-view everyhing that everyone has comes from that magnificent top 1% of wealth holders. In reality, the top 1% has stolen their money from everyone else.
[/quote]Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?
By the way, I am no longer in insurance. I used to be back in my corporate days. I now own a major piece of a blast engineering company. I don’t know where you come down on protection from industrial blast and anti-terrorism/Force Protection, but you probably feel that I’m oppressing the Third World somehow in that role.
April 6, 2009 at 6:47 PM #377366Participant[quote=TheBreeze][quote=flu]
Breezie. What is it that you want? Do you want a complete collapse of the U.S. economy? Do you look forward to everyone being thrown on the street, no food, no water, and everyone armed with guns, reversion back to the wild wild west in which needs/wants are satisfied the ones with the bigger guns….It’s not a question of whether or not government throwing more money is risky or not. Everything has risk. Guess what, this is the almost like General Custard’s last stand. It’s the Hail Mary, or whatever your faith calls it. Obama and this administration just traded off our future generations by how much we’re going to spend. We’re going to be spending more money on bank bailouts. You think there are better alternatives?
[/quote]Ah, the old false choice. Either we give all of our monies to the financial oligarchy or we all live in decrepit poverty the rest of our lives.
How about this choice: We throw every member of the financial oligarchy in jail, take their ill-gotten money, and distribute it to the rest of the population and use it to pay down debt. Why is that not a viable option? In your warped world-view everyhing that everyone has comes from that magnificent top 1% of wealth holders. In reality, the top 1% has stolen their money from everyone else.
[/quote]Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?
By the way, I am no longer in insurance. I used to be back in my corporate days. I now own a major piece of a blast engineering company. I don’t know where you come down on protection from industrial blast and anti-terrorism/Force Protection, but you probably feel that I’m oppressing the Third World somehow in that role.
April 6, 2009 at 6:47 PM #377543Participant[quote=TheBreeze][quote=flu]
Breezie. What is it that you want? Do you want a complete collapse of the U.S. economy? Do you look forward to everyone being thrown on the street, no food, no water, and everyone armed with guns, reversion back to the wild wild west in which needs/wants are satisfied the ones with the bigger guns….It’s not a question of whether or not government throwing more money is risky or not. Everything has risk. Guess what, this is the almost like General Custard’s last stand. It’s the Hail Mary, or whatever your faith calls it. Obama and this administration just traded off our future generations by how much we’re going to spend. We’re going to be spending more money on bank bailouts. You think there are better alternatives?
[/quote]Ah, the old false choice. Either we give all of our monies to the financial oligarchy or we all live in decrepit poverty the rest of our lives.
How about this choice: We throw every member of the financial oligarchy in jail, take their ill-gotten money, and distribute it to the rest of the population and use it to pay down debt. Why is that not a viable option? In your warped world-view everyhing that everyone has comes from that magnificent top 1% of wealth holders. In reality, the top 1% has stolen their money from everyone else.
[/quote]Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?
By the way, I am no longer in insurance. I used to be back in my corporate days. I now own a major piece of a blast engineering company. I don’t know where you come down on protection from industrial blast and anti-terrorism/Force Protection, but you probably feel that I’m oppressing the Third World somehow in that role.
April 6, 2009 at 6:47 PM #377587Participant[quote=TheBreeze][quote=flu]
Breezie. What is it that you want? Do you want a complete collapse of the U.S. economy? Do you look forward to everyone being thrown on the street, no food, no water, and everyone armed with guns, reversion back to the wild wild west in which needs/wants are satisfied the ones with the bigger guns….It’s not a question of whether or not government throwing more money is risky or not. Everything has risk. Guess what, this is the almost like General Custard’s last stand. It’s the Hail Mary, or whatever your faith calls it. Obama and this administration just traded off our future generations by how much we’re going to spend. We’re going to be spending more money on bank bailouts. You think there are better alternatives?
[/quote]Ah, the old false choice. Either we give all of our monies to the financial oligarchy or we all live in decrepit poverty the rest of our lives.
How about this choice: We throw every member of the financial oligarchy in jail, take their ill-gotten money, and distribute it to the rest of the population and use it to pay down debt. Why is that not a viable option? In your warped world-view everyhing that everyone has comes from that magnificent top 1% of wealth holders. In reality, the top 1% has stolen their money from everyone else.
[/quote]Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?
By the way, I am no longer in insurance. I used to be back in my corporate days. I now own a major piece of a blast engineering company. I don’t know where you come down on protection from industrial blast and anti-terrorism/Force Protection, but you probably feel that I’m oppressing the Third World somehow in that role.
April 6, 2009 at 6:47 PM #377709Participant[quote=TheBreeze][quote=flu]
Breezie. What is it that you want? Do you want a complete collapse of the U.S. economy? Do you look forward to everyone being thrown on the street, no food, no water, and everyone armed with guns, reversion back to the wild wild west in which needs/wants are satisfied the ones with the bigger guns….It’s not a question of whether or not government throwing more money is risky or not. Everything has risk. Guess what, this is the almost like General Custard’s last stand. It’s the Hail Mary, or whatever your faith calls it. Obama and this administration just traded off our future generations by how much we’re going to spend. We’re going to be spending more money on bank bailouts. You think there are better alternatives?
[/quote]Ah, the old false choice. Either we give all of our monies to the financial oligarchy or we all live in decrepit poverty the rest of our lives.
How about this choice: We throw every member of the financial oligarchy in jail, take their ill-gotten money, and distribute it to the rest of the population and use it to pay down debt. Why is that not a viable option? In your warped world-view everyhing that everyone has comes from that magnificent top 1% of wealth holders. In reality, the top 1% has stolen their money from everyone else.
[/quote]Breezhnev: Boy, that moniker I hung on you is becoming more and more apropos by the day. So, using your suggestion above, we become fascists and seize all the holdings and assets of the banks and distribute them to the people (via the State with a big “S”, of course). Do I have that right? Statist authoritarianism, huh? And you’re calling me a socialist?
By the way, I am no longer in insurance. I used to be back in my corporate days. I now own a major piece of a blast engineering company. I don’t know where you come down on protection from industrial blast and anti-terrorism/Force Protection, but you probably feel that I’m oppressing the Third World somehow in that role.
April 6, 2009 at 7:18 PM #377104TheBreeze
Participant[quote=davelj][quote=TheBreeze]
By the way, according to the 10-K, Citi has $774 billion in deposits, $205 billion in repurchase agreements, $486 billion in short-term borrowings and long-term debt, $167 in Trading account liabilities and $164 in ‘other’ liabilities. So they have a little over $1 trillion in non-deposit liabilities. Their market cap is $15 billion. But yeah, I’m sure Citigroup could keep trucking right along if their creditors refused to roll over the $1 trillion in non-deposit liabilities.
[/quote]Yes, and if you read the footnotes, you noticed that short-term debt – the stuff that has to be rolled over in less than a year – is just $126 billion, or less than 7% of its funding base. The FHLB borrowings and repurchase agreements are backed by specific collateral as it is.
[/quote]About that collateral. How far off do you think the marks are? Here’s a chart that shows Citi’s marks (estimated):
http://2.bp.blogspot.com/_FM71j6-VkNE/Scka7JcKKeI/AAAAAAAABkA/pS34gaIK1jY/s1600-h/toxic+assets.jpg
They are carrying their commercial mortgages at 100% while FDIC has been selling commercial loans at around 50%:
http://zerohedge.blogspot.com/search?q=beal
So Citi has likely received $205 billion on collateral of only $100 billion or so (assuming the rest of their assets are similarly mismarked).
If all of Citi’s assets are mismarked by 50%, that’s just about enough to pay off the depositors. Wouldn’t it be cheaper for the government to shoot Citi now, pay off the depositors, and be done with them as opposed to guaranteeing their $1.8 trillion in liabilities?
I don’t get why you say that liquidating these big banks now would be more expensive for taxpayers than zombifying them. The up-front cost may be more but I think the long-term cost would be less.
April 6, 2009 at 7:18 PM #377381Participant[quote=davelj][quote=TheBreeze]
By the way, according to the 10-K, Citi has $774 billion in deposits, $205 billion in repurchase agreements, $486 billion in short-term borrowings and long-term debt, $167 in Trading account liabilities and $164 in ‘other’ liabilities. So they have a little over $1 trillion in non-deposit liabilities. Their market cap is $15 billion. But yeah, I’m sure Citigroup could keep trucking right along if their creditors refused to roll over the $1 trillion in non-deposit liabilities.
[/quote]Yes, and if you read the footnotes, you noticed that short-term debt – the stuff that has to be rolled over in less than a year – is just $126 billion, or less than 7% of its funding base. The FHLB borrowings and repurchase agreements are backed by specific collateral as it is.
[/quote]About that collateral. How far off do you think the marks are? Here’s a chart that shows Citi’s marks (estimated):
http://2.bp.blogspot.com/_FM71j6-VkNE/Scka7JcKKeI/AAAAAAAABkA/pS34gaIK1jY/s1600-h/toxic+assets.jpg
They are carrying their commercial mortgages at 100% while FDIC has been selling commercial loans at around 50%:
http://zerohedge.blogspot.com/search?q=beal
So Citi has likely received $205 billion on collateral of only $100 billion or so (assuming the rest of their assets are similarly mismarked).
If all of Citi’s assets are mismarked by 50%, that’s just about enough to pay off the depositors. Wouldn’t it be cheaper for the government to shoot Citi now, pay off the depositors, and be done with them as opposed to guaranteeing their $1.8 trillion in liabilities?
I don’t get why you say that liquidating these big banks now would be more expensive for taxpayers than zombifying them. The up-front cost may be more but I think the long-term cost would be less.
April 6, 2009 at 7:18 PM #377558Participant[quote=davelj][quote=TheBreeze]
By the way, according to the 10-K, Citi has $774 billion in deposits, $205 billion in repurchase agreements, $486 billion in short-term borrowings and long-term debt, $167 in Trading account liabilities and $164 in ‘other’ liabilities. So they have a little over $1 trillion in non-deposit liabilities. Their market cap is $15 billion. But yeah, I’m sure Citigroup could keep trucking right along if their creditors refused to roll over the $1 trillion in non-deposit liabilities.
[/quote]Yes, and if you read the footnotes, you noticed that short-term debt – the stuff that has to be rolled over in less than a year – is just $126 billion, or less than 7% of its funding base. The FHLB borrowings and repurchase agreements are backed by specific collateral as it is.
[/quote]About that collateral. How far off do you think the marks are? Here’s a chart that shows Citi’s marks (estimated):
http://2.bp.blogspot.com/_FM71j6-VkNE/Scka7JcKKeI/AAAAAAAABkA/pS34gaIK1jY/s1600-h/toxic+assets.jpg
They are carrying their commercial mortgages at 100% while FDIC has been selling commercial loans at around 50%:
http://zerohedge.blogspot.com/search?q=beal
So Citi has likely received $205 billion on collateral of only $100 billion or so (assuming the rest of their assets are similarly mismarked).
If all of Citi’s assets are mismarked by 50%, that’s just about enough to pay off the depositors. Wouldn’t it be cheaper for the government to shoot Citi now, pay off the depositors, and be done with them as opposed to guaranteeing their $1.8 trillion in liabilities?
I don’t get why you say that liquidating these big banks now would be more expensive for taxpayers than zombifying them. The up-front cost may be more but I think the long-term cost would be less.
April 6, 2009 at 7:18 PM #377602Participant[quote=davelj][quote=TheBreeze]
By the way, according to the 10-K, Citi has $774 billion in deposits, $205 billion in repurchase agreements, $486 billion in short-term borrowings and long-term debt, $167 in Trading account liabilities and $164 in ‘other’ liabilities. So they have a little over $1 trillion in non-deposit liabilities. Their market cap is $15 billion. But yeah, I’m sure Citigroup could keep trucking right along if their creditors refused to roll over the $1 trillion in non-deposit liabilities.
[/quote]Yes, and if you read the footnotes, you noticed that short-term debt – the stuff that has to be rolled over in less than a year – is just $126 billion, or less than 7% of its funding base. The FHLB borrowings and repurchase agreements are backed by specific collateral as it is.
[/quote]About that collateral. How far off do you think the marks are? Here’s a chart that shows Citi’s marks (estimated):
http://2.bp.blogspot.com/_FM71j6-VkNE/Scka7JcKKeI/AAAAAAAABkA/pS34gaIK1jY/s1600-h/toxic+assets.jpg
They are carrying their commercial mortgages at 100% while FDIC has been selling commercial loans at around 50%:
http://zerohedge.blogspot.com/search?q=beal
So Citi has likely received $205 billion on collateral of only $100 billion or so (assuming the rest of their assets are similarly mismarked).
If all of Citi’s assets are mismarked by 50%, that’s just about enough to pay off the depositors. Wouldn’t it be cheaper for the government to shoot Citi now, pay off the depositors, and be done with them as opposed to guaranteeing their $1.8 trillion in liabilities?
I don’t get why you say that liquidating these big banks now would be more expensive for taxpayers than zombifying them. The up-front cost may be more but I think the long-term cost would be less.
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