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Can the Titanic stay afloat?



March 16, 2008 – Comments (8)

Reading the opening paragraph on this wsj piece and calling it the "titanic credit mess," well, the first thing that came to my mind was the Titanic sank...

Hmmm, more big words, tsunami...  all have this sinking/drowning metaphor... 

More seriously, this disasterous policy of bailouts seems to have caught up to itself.  At first the bail outs were small relative to the size of the bailer, but now banks are so big, the bailer is getting dwarfed here...

This quote is good.  Basically right about now the US needs the rest of the world yet the fed seems intent on alienating them rather than taking the deserved knocks and making those responsible accountable. 

“For the government to print money at the expense of taxpayers as opposed to requiring or going about a receivership and wind-down of any insolvent institutions should be troubling to taxpayers and regulators alike,” said Josh Rosner, an analyst at Graham Fisher & Company and an expert on mortgage securities. “The Fed has now crossed the line in a very clear way on ‘moral hazard,’ because they have opened the door to the view that they are required to save almost any institution through non-recourse loans — except the government doesn’t have the money and it destroys the U.S.’s reputation as the broadest, deepest, most transparent and properly regulated capital market in the world.”

Here's another enlightening one, a British perspective...  No kidding wall street is nervous about what Monday will bring...

I've been saying for months to take steps to protect yourself, even make sure you have a second bank account and some resources set aside in case of problems at your main financial institution.  I hope everyone finds themselves in a position to not be pulled out to sea...

8 Comments – Post Your Own

#1) On March 16, 2008 at 11:48 AM, dwot (28.99) wrote:

I missed Thursday's poor treasury auction, but Market Ticker is talking about it.  Bernanke is dead wrong that he can hold US interest rates down.  There is absolutely zero in the deal for the rest of the world, indeed, there is massive negative return.

Ticker has some place which he suggests are "safe" right now as all banks are at risk right now.

Actually, I strongly recommend reading the whole post.  He says things I've been saying for months and he says those things quite well.

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#2) On March 16, 2008 at 11:57 AM, dwot (28.99) wrote:

Canada's asset backed commercial paper has blown up...  I am Canadian and do think I have any idea of how much of this garbage is out there?  I haven't a clue and disclosure and reporting on this kind of thing is disgusting.

I firmly believe that media doesn't do their job. They pillage enormous resources down the toilet reporting on weather and traffic and fail to follow and cover events and issues that shape our world and our future.

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#3) On March 16, 2008 at 12:16 PM, dwot (28.99) wrote:

Market Ticker is stating a belief of back to 800 on the S&P. 

Interesting, this past week or two I guess looking at Wikipedia, I saw a long term graph of the S&P and what it suggested to me is that if moron Greensnot had left well enough alone and hadn't changed the rules that so royally f---ed those of us that were young adults just starting out and all youth to follow, well, it looked to me the long term trend of the S&P would have put it to about 550 today. 

I think Market Ticker is correct on his assessment on where the S&P is going...


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#4) On March 16, 2008 at 12:24 PM, dwot (28.99) wrote:

Calculated risk, "We're all iceburgs now."  Yup, lots of metaphors...

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#5) On March 16, 2008 at 12:31 PM, mickeyc21 (30.03) wrote:

Canadian paper dead. That must've been a bad day DWOT! Canada has been playing the "no problems here card". Very late last year people were camping in the snow to get the chance to get into a lottery to buy condos in Canada. I read and reread that news item three times when it came out because I thought I must be missing some sarcasm but it was real.

Canadians think all Americans are stupid but human behaviour is fairly similar everywhere. I've had people from most major countries lecture me on why their RE market is different for years. If you dared disagree they acted like you had said their baby was ugly. 

Congrats on reaching the top ten. 

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#6) On March 16, 2008 at 12:42 PM, dwot (28.99) wrote:

I'll keep talking to myself here...  I'm at my sister's place in Whistler, (there was 27 ft of snow this year...).

I just told her I did this post starting to talk about the metaphors I was reading, and then I posted that last comment with yet another of these iceburg/landslide kind of metaphors without reading it, and that last post is about metaphors as a measure of credit distress.  I was amused...

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#7) On March 16, 2008 at 12:50 PM, Tastylunch (28.56) wrote:

800 would be quite a drop. Definitely possible though, let's hope it doesn't get that bad.

It continues to amaze me how many people think we've hit bottom already this quick into a downturn. I think we are lucky if we are at the halfway point now....

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#8) On March 16, 2008 at 1:04 PM, dwot (28.99) wrote:

Mickey, we've known about the Candian paper problem since last August, but media has done little digging and little effort to inform the public.  Talking to my business degree sister, asking her what she knew, she's seen nothing.  Media is incompetent.  I firmly believe media should keep the public informed on important issues, and they don't.  Yesterday's weather and traffic seems to be more important.

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