I do grow a bit tired of hearing about this or that being "nationalized." You would think a prerequisite for being a member of the "financial media" would be the proper use of the word "nationalization" and its derivatives.
It has almost gotten to the point that "bailout" was at with reference to Bear Stearns. I understand that it is all the rage with the kids these days to bend and twist meaning until all semblance of communication is the same muddy color as brackish harbor silt, but that has to end at some point. No?
I find it difficult not to draw a connection between this sloppy linguistic tendency and the crash. After all, when every corner is rounded off, every edge dulled, every sacking becomes a change to "pursue other opportunities," every slip in revenue a "market harmonization," every crash a "correction," every incompetent failure an "emerging challenge," every takeover a "strategic opportunity" every CDO "Triple A," every auction rate security "just like cash" and every mass firing a "downsizing," how the hell is anyone supposed to know what's risky and what isn't?
No wonder every investor in this country is married to the idea that prices should never go down. (Unless it's oil, natural gas, gasoline, electricity, wheat, soy... you know, those things. I mean, unless I am long some of them).
Posted by guest , Sep 18, 2008 9:11AM
Love the tag. People love double talk sugarcoated bullshit. No one can handle - for a poor cliche - the truth.
Please post a dictionary for translating the horseshit being disseminated. Thanks.
Posted by guest , Sep 18, 2008 9:11AM
What a horribly written, rambling whine.
You stink EP.
Posted by guest , Sep 18, 2008 9:12AM
Let everyone keep sucking down the linguistic nitrous oxide of the investing vernacular.
Posted by guest , Sep 18, 2008 9:16AM
Carney should be "nationalized"
Posted by guest , Sep 18, 2008 9:19AM
Yo EP, as a non-finance, non-wall street type who lurks on these boards in the hope of seeing nekkid pics of Besss some day.. please explain something to me:
Where are the central banks who are pumping $250bn into money markets today getting the money from? Are they printing it, or is this left over from the last time they bought debt from the markets and they're just flushing it back? Are they selling debt into the market to do this? How do they get that cash back out again before the dollar becomes worthless?
Confused and not ashamed to admit it.
Posted by guest , Sep 18, 2008 9:29AM
Socialist countries seize assets that make a profit.
In the United States, we take over companies when they are FAILING.
None the less, the step towards socialism happened yesterday on the Birthday of the US Constitution.
Posted by guest , Sep 18, 2008 9:30AM
The theorist not having definite assumptions clearly in mind in working out the "principles," it is but natural that he, and still more the practical workers building upon his foundations, should forget that unreal assumptions were made, and should take the principles over bodily, apply them to concrete cases, and draw sweeping and wholly unwarranted conclusions from them. The clearly untenable and often vicious character of such deductions naturally works to discredit theory itself. This, of course, is wrong; we do not allow perpetual motion schemes to discredit theoretical mechanics, which is built upon the assumption of perpetual motion at every stage. But in economics a distrust of general principles, fatal as it is to clear thinking, will be inevitable as long as the postulates of theory are so nebulous and shifting. They can hardly be made sufficiently explicit; it is imperative that the contrast between these simplified assumptions and the complex facts of life be made as conspicuous and as familiar as has been done in mechanics.
Posted by guest , Sep 18, 2008 9:39AM
In English please?
Posted by guest , Sep 18, 2008 9:40AM
Thursday morning ratings update:
EP and Carney are banging: AA
Bess likes to watch: CCC
Posted by guest , Sep 18, 2008 9:43AM
PIMCO keeps demanding MBS be bought by fed - are they in trouble too?
Posted by guest , Sep 18, 2008 9:45AM
RTC talk? who ever is runnign this site needs to post some coherent forums
Posted by ab , Sep 18, 2008 9:47AM
Gotta love Jim Bunning. Full of sharp insights.
Posted by diablo , Sep 18, 2008 10:04AM
EP, why the rant?
Posted by Anal_yst , Sep 18, 2008 10:04AM
@ 7
I'm gonna go out on a limb and postulate that you didn't take the time to write something like that as a comment on a finance blog, so, that being said (since I'm too lazy to just google it), where is that from?
Also, Bill Gross is a vag. That is all.
Posted by guest , Sep 18, 2008 10:08AM
#10
PIMCO picked up a shit load of MBS from prime broker banks earlier this year when a lot of hedge funds got hit and couldn't post margin.
They were profitable for a while (until June anyway) and Bill Gross must have held on to most of them. Hence his cries for help right now.
Posted by hedgehog , Sep 18, 2008 10:12AM
mass firings are "restructurings". "downsizing" would be way too drastic.
Posted by guest , Sep 18, 2008 10:34AM
Hey, I liked the comment, EP.
Posted by guest , Sep 18, 2008 10:37AM
AIG got a "bailout."
Who here wants a bailout like that? Feds hold a gun to your head and make you sell your assets at what's going to be nowhere near what you could normally get. If you don't they take your company, bitch.
Posted by guest , Sep 18, 2008 10:42AM
@18,
and if you do, they take your company too.
(People(i.e. Carney) don't get it.)
Posted by guest , Sep 18, 2008 11:31AM
@7 Wow, I agree completely. if only everyone else could understand you
Posted by guest , Sep 18, 2008 11:34AM
@7 it's from "Risk, Uncertainty and Profit" by Frank Knight. specifically talking about how whenever shit goes down, we blame it on the theory (free markets), when really its not the theory's fault but our own, for forgetting that we had made assumptions despite a complex world, which threw off our numbers.
Posted by guest , Sep 18, 2008 11:38AM
EP, I'm really glad you never had to edit my pitch books. We were quite liberal with the use of "burgeoning" and "mushrooming", although we never quite pulled off "turgid".
Posted by Distressed Debt , Sep 18, 2008 12:21PM
Rosa Brooks:
Hey U.S., welcome to the Third World!
It's been a quick slide from economic superpower to economic basket case.
Rosa Brooks
September 18, 2008
» Discuss Article Dear United States, Welcome to the Third World!
It's not every day that a superpower makes a bid to transform itself into a Third World nation, and we here at the World Bank and the International Monetary Fund want to be among the first to welcome you to the community of states in desperate need of international economic assistance. As you spiral into a catastrophic financial meltdown, we are delighted to respond to your Treasury Department's request that we undertake a joint stability assessment of your financial sector. In these turbulent times, we can provide services ranging from subsidized loans to expert advisors willing to perform an emergency overhaul of your entire government.
As you know, some outside intervention in your economy is overdue. Last week -- even before Wall Street's latest collapse -- 13 former finance ministers convened at the University of Virginia and agreed that you must fix your "broken financial system." Australia's Peter Costello noted that lately you've been "exporting instability" in world markets, and Yashwant Sinha, former finance minister of India, concluded, "The time has come. The U.S. should accept some monitoring by the IMF."
We hope you won't feel embarrassed as we assess the stability of your economy and suggest needed changes. Remember, many other countries have been in your shoes. We've bailed out the economies of Argentina, Brazil, Indonesia and South Korea. But whether our work is in Sudan, Bangladesh or now the United States, our experts are committed to intervening in national economies with care and sensitivity.
We thus want to acknowledge the progress you have made in your evolution from economic superpower to economic basket case. Normally, such a process might take 100 years or more. With your oscillation between free-market extremism and nationalization of private companies, however, you have successfully achieved, in a few short years, many of the key hallmarks of Third World economies.
Your policies of irresponsible government deregulation in critical sectors allowed you to rapidly develop an energy crisis, a housing crisis, a credit crisis and a financial market crisis, all at once, and accompanied (and partly caused) by impressive levels of corruption and speculation. Meanwhile, those of your political leaders charged with oversight were either napping or in bed with corporate lobbyists.
Take John McCain, your Republican presidential nominee, whose senior staff includes half a dozen prominent former lobbyists. As he recently put it, "I was chairman of the [Senate] Commerce Committee that oversights every part of the economy." No question about it: Your leaders' failure to notice the damage done by irresponsible deregulation was indeed an oversight of epic proportions.
Now you are facing the consequences. Income inequality has increased, as the rich have gotten windfalls while the middle class has seen incomes stagnate. Fewer and fewer of your citizens have access to affordable housing, healthcare or security in retirement. Even life expectancy has dropped. And when your economic woes went from chronic to acute, you responded -- like so many Third World states have -- with an extensive program of nationalizing private companies and assets. Your mortgage giants Fannie Mae and Freddie Mac are now state owned and controlled, and this week your reinsurance giant AIG was effectively nationalized, with the Federal Reserve Board seizing an 80% equity stake in the flailing company.
Some might deride this as socialism. But desperate times call for desperate measures.
Admittedly, your transition to Third World status is far from over, and it won't be painless. At first, for instance, you may find it hard to get used to the shantytowns that will replace the exurban sprawl of McMansions that helped fuel the real estate speculation bubble. But in time, such shantytowns will simply become part of the landscape. Similarly, as unemployment rates continue to rise, you will initially struggle to find a use for the expanding pool of angry, jobless young men. But you will gradually realize that you can recruit them to fight in a ceaseless round of armed conflicts, a solution that has been utilized by many other Third World states before you. Indeed, with your wars in Iraq and Afghanistan, you are off to an excellent start.
Perhaps this letter comes as a surprise to you, and you feel you're not fully ready to join the Third World. Don't let this feeling concern you. Though you may never have realized it, you've been preparing for this moment for years.
Posted by guest , Sep 18, 2008 12:21PM
Huh? How is this not nationalization?
EP, I grew up in a country where the government was the global poster child of nationalizing failing businesses, so I know when something is being nationalized.
And in the FNM/FRE and AIG cases - if it walks like a duck and quacks like a duck - it quite simply is not an underpaid actor in a Disney costume.
Posted by chernevik , Sep 18, 2008 12:43PM
We´re ten years past "It depends on what the meaning of 'is' is" and you're noticing fuzzy language _now_? I don't think you've been paying attention.
BTW, Bear/AIG/Fannie/Freddie weren't "bailed out", but only if you're talking about the equity. Their creditors were definitely bailed out. And it was those creditors enabled the equity's leverage, and allowed the equity to invest in assets that neither the equity nor the creditors understand.
Yeah, the equity is cratered, but most of it was diversified anyway. The employees are screwed, but the decisionmakers were paid for excessive risk taking. With Treasury handing out credit insurance, just who exactly is going to discipline these markets?
Posted by vaponte , Sep 18, 2008 1:03PM
Hello,
Sure, people want prices to go up, but not gas prices! I really enjoyed your article. Have you see the gas prices today? Incredible! I remember when gas use to cost 99c for regular gas. Now, regular gasoline use to cost me at least $4.00 a gallon. You might be saying, "Why did he say use to?" I found a program where I changed my car where I can now use tap water with gasoline, and I pay alot less. Actually, it is now possible to run your car using tap water as your primary fuel source and because you don't need to fill-up your gas tank as often, you'll have 40-80% more cash in your pocket at the end of each and every month. I did it with my car and I am really saving money now.
I hope you publish more articles to read as I really enjoyed this one.
Vidal Aponte
If you want more information regarding water and gasoline in the car you can go to www.watercarpro1.com
Posted by EricM , Sep 18, 2008 3:07PM
You forgot your superlatives, EP, they'll never hear you without them.
Any chance of some Sub Rosa postings anytime in the near future?
Posted by guest , Sep 18, 2008 3:09PM
The term should actually be "expropriation"
Posted by guest , May 13, 2009 11:52AM
Ah, I found a kindred spirit. We need some clarity on numbers too!
http://currentlyseekingacountrytorule.blogspot.com/2009/04/simple-arithmetic.html