[davelj]

So, contraman, since you were “born into a hard working family in the mid west that places little to no value on material things,” I guess you live in a one bedroom hovel and give away 80% of your money to charity. Is that right? Man, it must be kind of odd living here in the U.S. without a car, television, cell phone, computer, etc. Oops, you must have a computer…

I don’t think greed in and of itself is “one of the major factors that has contributed to this calamity that is upon us.” It’s ignorance.

I’m greedy. Really greedy. I’m definitely looking out for number one. My happiness and contentment is without a doubt the most important thing in my life. (The fact that I derive a lot of happiness in helping others, via charity and other avenues, is beside the fact. It’s still about my happiness at the end of the day.) And despite my incredible greed I didn’t get caught up in this whole housing mess. How can that be? Well, it’s because I’m greedy, you see, and didn’t want to lose my ass.

If you contemplate all of history’s inventions and discoveries that make our lives better/easier/more enjoyable, I’d be willing to bet that 99% of them did not originate from an altruistic motive. No, they were invented or discovered by someone trying to make a buck – some greedy SOB. Prove me wrong. Greed, generically, is good. (Gordon Gekko didn’t have it all wrong after all.)

Nope, the problem isn’t greed. It’s UNBRIDLED greed COUPLED with huge helpings of ignorance and impatience.

As an aside, I’ve generally found that people who rail against greed and materialism are the greediest and most materialistic people around. But that’s just been my experience.

[davelj]

So, contraman, since you were “born into a hard working family in the mid west that places little to no value on material things,” I guess you live in a one bedroom hovel and give away 80% of your money to charity. Is that right? Man, it must be kind of odd living here in the U.S. without a car, television, cell phone, computer, etc. Oops, you must have a computer…

I don’t think greed in and of itself is “one of the major factors that has contributed to this calamity that is upon us.” It’s ignorance.

I’m greedy. Really greedy. I’m definitely looking out for number one. My happiness and contentment is without a doubt the most important thing in my life. (The fact that I derive a lot of happiness in helping others, via charity and other avenues, is beside the fact. It’s still about my happiness at the end of the day.) And despite my incredible greed I didn’t get caught up in this whole housing mess. How can that be? Well, it’s because I’m greedy, you see, and didn’t want to lose my ass.

If you contemplate all of history’s inventions and discoveries that make our lives better/easier/more enjoyable, I’d be willing to bet that 99% of them did not originate from an altruistic motive. No, they were invented or discovered by someone trying to make a buck – some greedy SOB. Prove me wrong. Greed, generically, is good. (Gordon Gekko didn’t have it all wrong after all.)

Nope, the problem isn’t greed. It’s UNBRIDLED greed COUPLED with huge helpings of ignorance and impatience.

As an aside, I’ve generally found that people who rail against greed and materialism are the greediest and most materialistic people around. But that’s just been my experience.

[davelj]

So, contraman, since you were “born into a hard working family in the mid west that places little to no value on material things,” I guess you live in a one bedroom hovel and give away 80% of your money to charity. Is that right? Man, it must be kind of odd living here in the U.S. without a car, television, cell phone, computer, etc. Oops, you must have a computer…

I don’t think greed in and of itself is “one of the major factors that has contributed to this calamity that is upon us.” It’s ignorance.

I’m greedy. Really greedy. I’m definitely looking out for number one. My happiness and contentment is without a doubt the most important thing in my life. (The fact that I derive a lot of happiness in helping others, via charity and other avenues, is beside the fact. It’s still about my happiness at the end of the day.) And despite my incredible greed I didn’t get caught up in this whole housing mess. How can that be? Well, it’s because I’m greedy, you see, and didn’t want to lose my ass.

If you contemplate all of history’s inventions and discoveries that make our lives better/easier/more enjoyable, I’d be willing to bet that 99% of them did not originate from an altruistic motive. No, they were invented or discovered by someone trying to make a buck – some greedy SOB. Prove me wrong. Greed, generically, is good. (Gordon Gekko didn’t have it all wrong after all.)

Nope, the problem isn’t greed. It’s UNBRIDLED greed COUPLED with huge helpings of ignorance and impatience.

As an aside, I’ve generally found that people who rail against greed and materialism are the greediest and most materialistic people around. But that’s just been my experience.

[davelj]

So, contraman, since you were “born into a hard working family in the mid west that places little to no value on material things,” I guess you live in a one bedroom hovel and give away 80% of your money to charity. Is that right? Man, it must be kind of odd living here in the U.S. without a car, television, cell phone, computer, etc. Oops, you must have a computer…

I don’t think greed in and of itself is “one of the major factors that has contributed to this calamity that is upon us.” It’s ignorance.

I’m greedy. Really greedy. I’m definitely looking out for number one. My happiness and contentment is without a doubt the most important thing in my life. (The fact that I derive a lot of happiness in helping others, via charity and other avenues, is beside the fact. It’s still about my happiness at the end of the day.) And despite my incredible greed I didn’t get caught up in this whole housing mess. How can that be? Well, it’s because I’m greedy, you see, and didn’t want to lose my ass.

If you contemplate all of history’s inventions and discoveries that make our lives better/easier/more enjoyable, I’d be willing to bet that 99% of them did not originate from an altruistic motive. No, they were invented or discovered by someone trying to make a buck – some greedy SOB. Prove me wrong. Greed, generically, is good. (Gordon Gekko didn’t have it all wrong after all.)

Nope, the problem isn’t greed. It’s UNBRIDLED greed COUPLED with huge helpings of ignorance and impatience.

As an aside, I’ve generally found that people who rail against greed and materialism are the greediest and most materialistic people around. But that’s just been my experience.

[davelj]

Fearful, you asked: “Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?”

Here’s the short(er) answer (than above): That the TAF exists is worrisome, but no more worrisome than lots of other stuff. That the banks are availing themselves of the TAF is not particularly worrisome. It’s just a logical business decision.

An analogy: If Crazy Old Gramps wants to leave his $10 million estate to the Flat Earth Society, then that’s worrisome. But it’s probably no more worrisome than lots of other weird stuff in Crazy Old Gramps’ life. That the Flat Earth Society will gladly accept Crazy Old Gramps’ donation is just good business sense. Neither of these things change the facts that (1) Crazy Old Gramps is, well… crazy, and (2) the Flat Earth Society is in real trouble (Crazy Old Gramps’ donation ain’t gonna help a whole lot in the long term).

Wiley,

I don’t know. I think to some extent we are already seeing real losses (not just paper impairments) and are in the initial stages of a fairly widespread banking problem. The Big Banks (Citigroup, etc.) are on the front end because a lot of their losses are in the securities they hold. Market values drop, securities must be marked down. Most regional and community banks don’t hold particularly risky securities portfolios – they’re not trading entities and generally stick to plain vanilla stuff on the securities end of things. These banks hold mostly small- to medium-sized loans. And losses on these loans take longer to materialize than losses in securities because there’s no posted market price for them. For example, there are a LOT of bad construction loans out there that have not yet been put in the “non-performing” bucket (for technical reasons that I detailed in a previous thread a while back). So there are a LOT of loan losses that have not yet been recognized or realized at the regional and community bank level. I mean a LOT. These have started to trickle in over the last two quarters and we’ll see a tidal wave over the next two to three quarters. Particularly in the high-risk states of Florida, California, Nevada, etc.

So, that didn’t answer your question but at least you have a little color. I’ll guess and say that I think the deepest part of the banking crisis will occur this year, probably in the second half. There will be nowhere to hide by then. I suspect that even though things could fundamentally get worse in 2009, market participants will have accepted that fact and the inevitable recapitalizations (and in the case of some of the larger banks – “re”-recapitalizations) that occur will take that view into consideration. But I’ve been wrong before.

Yeah, I don’t think Karl and I disagree too much as to where this whole mess is going, although we may differ on degree. But I’m paid to be a stickler on these kinds of details. So I am. Don’t get me wrong, it’s good to be right. But it’s better to be right for the right reasons.

[davelj]

Fearful, you asked: “Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?”

Here’s the short(er) answer (than above): That the TAF exists is worrisome, but no more worrisome than lots of other stuff. That the banks are availing themselves of the TAF is not particularly worrisome. It’s just a logical business decision.

An analogy: If Crazy Old Gramps wants to leave his $10 million estate to the Flat Earth Society, then that’s worrisome. But it’s probably no more worrisome than lots of other weird stuff in Crazy Old Gramps’ life. That the Flat Earth Society will gladly accept Crazy Old Gramps’ donation is just good business sense. Neither of these things change the facts that (1) Crazy Old Gramps is, well… crazy, and (2) the Flat Earth Society is in real trouble (Crazy Old Gramps’ donation ain’t gonna help a whole lot in the long term).

Wiley,

I don’t know. I think to some extent we are already seeing real losses (not just paper impairments) and are in the initial stages of a fairly widespread banking problem. The Big Banks (Citigroup, etc.) are on the front end because a lot of their losses are in the securities they hold. Market values drop, securities must be marked down. Most regional and community banks don’t hold particularly risky securities portfolios – they’re not trading entities and generally stick to plain vanilla stuff on the securities end of things. These banks hold mostly small- to medium-sized loans. And losses on these loans take longer to materialize than losses in securities because there’s no posted market price for them. For example, there are a LOT of bad construction loans out there that have not yet been put in the “non-performing” bucket (for technical reasons that I detailed in a previous thread a while back). So there are a LOT of loan losses that have not yet been recognized or realized at the regional and community bank level. I mean a LOT. These have started to trickle in over the last two quarters and we’ll see a tidal wave over the next two to three quarters. Particularly in the high-risk states of Florida, California, Nevada, etc.

So, that didn’t answer your question but at least you have a little color. I’ll guess and say that I think the deepest part of the banking crisis will occur this year, probably in the second half. There will be nowhere to hide by then. I suspect that even though things could fundamentally get worse in 2009, market participants will have accepted that fact and the inevitable recapitalizations (and in the case of some of the larger banks – “re”-recapitalizations) that occur will take that view into consideration. But I’ve been wrong before.

Yeah, I don’t think Karl and I disagree too much as to where this whole mess is going, although we may differ on degree. But I’m paid to be a stickler on these kinds of details. So I am. Don’t get me wrong, it’s good to be right. But it’s better to be right for the right reasons.

[davelj]

Fearful, you asked: “Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?”

Here’s the short(er) answer (than above): That the TAF exists is worrisome, but no more worrisome than lots of other stuff. That the banks are availing themselves of the TAF is not particularly worrisome. It’s just a logical business decision.

An analogy: If Crazy Old Gramps wants to leave his $10 million estate to the Flat Earth Society, then that’s worrisome. But it’s probably no more worrisome than lots of other weird stuff in Crazy Old Gramps’ life. That the Flat Earth Society will gladly accept Crazy Old Gramps’ donation is just good business sense. Neither of these things change the facts that (1) Crazy Old Gramps is, well… crazy, and (2) the Flat Earth Society is in real trouble (Crazy Old Gramps’ donation ain’t gonna help a whole lot in the long term).

Wiley,

I don’t know. I think to some extent we are already seeing real losses (not just paper impairments) and are in the initial stages of a fairly widespread banking problem. The Big Banks (Citigroup, etc.) are on the front end because a lot of their losses are in the securities they hold. Market values drop, securities must be marked down. Most regional and community banks don’t hold particularly risky securities portfolios – they’re not trading entities and generally stick to plain vanilla stuff on the securities end of things. These banks hold mostly small- to medium-sized loans. And losses on these loans take longer to materialize than losses in securities because there’s no posted market price for them. For example, there are a LOT of bad construction loans out there that have not yet been put in the “non-performing” bucket (for technical reasons that I detailed in a previous thread a while back). So there are a LOT of loan losses that have not yet been recognized or realized at the regional and community bank level. I mean a LOT. These have started to trickle in over the last two quarters and we’ll see a tidal wave over the next two to three quarters. Particularly in the high-risk states of Florida, California, Nevada, etc.

So, that didn’t answer your question but at least you have a little color. I’ll guess and say that I think the deepest part of the banking crisis will occur this year, probably in the second half. There will be nowhere to hide by then. I suspect that even though things could fundamentally get worse in 2009, market participants will have accepted that fact and the inevitable recapitalizations (and in the case of some of the larger banks – “re”-recapitalizations) that occur will take that view into consideration. But I’ve been wrong before.

Yeah, I don’t think Karl and I disagree too much as to where this whole mess is going, although we may differ on degree. But I’m paid to be a stickler on these kinds of details. So I am. Don’t get me wrong, it’s good to be right. But it’s better to be right for the right reasons.

[davelj]

Fearful, you asked: “Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?”

Here’s the short(er) answer (than above): That the TAF exists is worrisome, but no more worrisome than lots of other stuff. That the banks are availing themselves of the TAF is not particularly worrisome. It’s just a logical business decision.

An analogy: If Crazy Old Gramps wants to leave his $10 million estate to the Flat Earth Society, then that’s worrisome. But it’s probably no more worrisome than lots of other weird stuff in Crazy Old Gramps’ life. That the Flat Earth Society will gladly accept Crazy Old Gramps’ donation is just good business sense. Neither of these things change the facts that (1) Crazy Old Gramps is, well… crazy, and (2) the Flat Earth Society is in real trouble (Crazy Old Gramps’ donation ain’t gonna help a whole lot in the long term).

Wiley,

I don’t know. I think to some extent we are already seeing real losses (not just paper impairments) and are in the initial stages of a fairly widespread banking problem. The Big Banks (Citigroup, etc.) are on the front end because a lot of their losses are in the securities they hold. Market values drop, securities must be marked down. Most regional and community banks don’t hold particularly risky securities portfolios – they’re not trading entities and generally stick to plain vanilla stuff on the securities end of things. These banks hold mostly small- to medium-sized loans. And losses on these loans take longer to materialize than losses in securities because there’s no posted market price for them. For example, there are a LOT of bad construction loans out there that have not yet been put in the “non-performing” bucket (for technical reasons that I detailed in a previous thread a while back). So there are a LOT of loan losses that have not yet been recognized or realized at the regional and community bank level. I mean a LOT. These have started to trickle in over the last two quarters and we’ll see a tidal wave over the next two to three quarters. Particularly in the high-risk states of Florida, California, Nevada, etc.

So, that didn’t answer your question but at least you have a little color. I’ll guess and say that I think the deepest part of the banking crisis will occur this year, probably in the second half. There will be nowhere to hide by then. I suspect that even though things could fundamentally get worse in 2009, market participants will have accepted that fact and the inevitable recapitalizations (and in the case of some of the larger banks – “re”-recapitalizations) that occur will take that view into consideration. But I’ve been wrong before.

Yeah, I don’t think Karl and I disagree too much as to where this whole mess is going, although we may differ on degree. But I’m paid to be a stickler on these kinds of details. So I am. Don’t get me wrong, it’s good to be right. But it’s better to be right for the right reasons.

[davelj]

Fearful, you asked: “Do the numbers indicate anything special about the banking system, beyond simply that funds are being borrowed from the TAF?”

Here’s the short(er) answer (than above): That the TAF exists is worrisome, but no more worrisome than lots of other stuff. That the banks are availing themselves of the TAF is not particularly worrisome. It’s just a logical business decision.

An analogy: If Crazy Old Gramps wants to leave his $10 million estate to the Flat Earth Society, then that’s worrisome. But it’s probably no more worrisome than lots of other weird stuff in Crazy Old Gramps’ life. That the Flat Earth Society will gladly accept Crazy Old Gramps’ donation is just good business sense. Neither of these things change the facts that (1) Crazy Old Gramps is, well… crazy, and (2) the Flat Earth Society is in real trouble (Crazy Old Gramps’ donation ain’t gonna help a whole lot in the long term).

Wiley,

I don’t know. I think to some extent we are already seeing real losses (not just paper impairments) and are in the initial stages of a fairly widespread banking problem. The Big Banks (Citigroup, etc.) are on the front end because a lot of their losses are in the securities they hold. Market values drop, securities must be marked down. Most regional and community banks don’t hold particularly risky securities portfolios – they’re not trading entities and generally stick to plain vanilla stuff on the securities end of things. These banks hold mostly small- to medium-sized loans. And losses on these loans take longer to materialize than losses in securities because there’s no posted market price for them. For example, there are a LOT of bad construction loans out there that have not yet been put in the “non-performing” bucket (for technical reasons that I detailed in a previous thread a while back). So there are a LOT of loan losses that have not yet been recognized or realized at the regional and community bank level. I mean a LOT. These have started to trickle in over the last two quarters and we’ll see a tidal wave over the next two to three quarters. Particularly in the high-risk states of Florida, California, Nevada, etc.

So, that didn’t answer your question but at least you have a little color. I’ll guess and say that I think the deepest part of the banking crisis will occur this year, probably in the second half. There will be nowhere to hide by then. I suspect that even though things could fundamentally get worse in 2009, market participants will have accepted that fact and the inevitable recapitalizations (and in the case of some of the larger banks – “re”-recapitalizations) that occur will take that view into consideration. But I’ve been wrong before.

Yeah, I don’t think Karl and I disagree too much as to where this whole mess is going, although we may differ on degree. But I’m paid to be a stickler on these kinds of details. So I am. Don’t get me wrong, it’s good to be right. But it’s better to be right for the right reasons.

[davelj]

I’ve been known beat a dead horse from time to time.

[davelj]

I’ve been known beat a dead horse from time to time.

[davelj]

I’ve been known beat a dead horse from time to time.

[davelj]

I’ve been known beat a dead horse from time to time.

[davelj]

I’ve been known beat a dead horse from time to time.

[davelj]

Wall Street to Ben Bernanke:

“WHAAAAAAA!! WHAAAAAA!! BABY NEED MORE CANDY AND CAKE!! BABY ATE PREVIOUS CANDY AND CAKE AND STILL HUNGRYYYYYYYYYY!! CANDY AND CAKE NOT FILLING UP BABY!! HURRYYYYYYY!! BABY NO LIKEY FREE MARKET INVISIBLE HAND WHEN IT GIVE BABY THE FINGER!! WHAAAAAAAAAA!!”

I think that about sums it up.

[Author]

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