Live Blogging The Bald on the Tarp....
Let us begin.
10:32am: Mark Haines is blowing a gasket. The address hasn't even begun and a sudden vomitious belch of class warfare spews forth from his mouth including these tidbits:
"Bush has an MBA from Harvard. What's that thing worth?"
"Can we drop these Goldman Sachs yo-yos and get someone else? Like Bank of America?"
10:36am: Paulson is a total come-down after that little bit.
10:40am: It is interesting that now that Paulson looks like he might be on the way out as Obama enters stage left, the regulator should be limited (once more) in its scope. "In my view government support must either be explicit or non-existent." Sounds like a strange spin on "children should be seen, but not heard."
10:45am: "In Washington [the deployment of TARP funds] is a land speed record from announcing a program to getting funding out of the door." (Is that really worth bragging about? It's like programmers evaluating their work by comparing lines of code written).
10:48am: Paulson gets no argument whatsoever from me that the market needs time to "fully absorb" the increasingly miasmaic lay of the land after the maze of regulatory programs has been thrown over it.
10:51am: Paulson: TARP not effective anymore. The consumer credit, student loans, auto loans have frozen up, and need to be thawed though the repurchase of their securitized instruments. WOW!
10:56am: The TARP funds should be redirected to consumer credit, and maintained as an emergency fund to support these systems. i.e. that crap we fed you about buying asset backed mortgage securities, that dog won't hunt. "We are humbled by our own failings." i.e.: The Department Of The Treasury regrets the error.
10:59am: That sucking sound you hear is Hank's career after striking four tethered mines.
11:03am: See, Mr. Obama? I'm a team player! I can help! You need me! Really!
Q&A Time! After the jump! Hurray!
Q: What's the Federal response to state and local government distress?
A: Who?
Q: What about the auto industry?
A: So, we are going to be providing assistance that has a hope of providing long-term viability.
Q: Uh, so the auto industry?
A: Next question, please.
11:09am
Q: When are you going to ask for the next $350 million?
A: I don't have a time line for that.
11:15am:
Q.From a macro perspective do you think the U.S. automakers are important to the United States?
A. I answered this. They are key to our manufacturing industry. We need a solution. One that leads to viability.
Q: What about Obama's stimulus package?
A: My package is bigger. Liquidity focused. It gets massive amounts of credit flowing.
11:20am:
Q: Have you abandoned homeowners by changing TARP? Did you mislead Congress since you have changed the use of TARP?
A: Facts changed. We changed. I will never apologize for changing the approach or strategy when the facts change. We haven't been ordering banks to... well not exactly ordering.
11:22am:
Q: Do you see any limit on you at all in the Bill?
A: We asked for broad authority. We got it. We are using it. Now sit down, and shut up, sonny.
Posted by guest , Nov 12, 2008 10:36AM
first
Posted by noUpside , Nov 12, 2008 10:36AM
wow.
Posted by bondguy007 , Nov 12, 2008 10:37AM
So, seems that everyone's trying to file for bank holding company status to gain access to TARP. If only circuit city's exec's were so smart.
Posted by guest , Nov 12, 2008 10:37AM
``Our assessment at this time is that this is not the most effective way to use TARP funds"
No shit.
Posted by guest , Nov 12, 2008 10:38AM
good news is they are cxlling tarp, bad news, all that money's going to the automakers...
Posted by guest , Nov 12, 2008 10:40AM
Geniuses
Posted by guest , Nov 12, 2008 10:40AM
Big round of applause and cheers on the trading floor when Haines went on his rant.
Posted by onetwo , Nov 12, 2008 10:41AM
Mark Haines is like the Guinness guys...brilliant!
Posted by guest , Nov 12, 2008 10:42AM
You mean the government set aside a huge pile of money and now is experiencing political pressure to stray from the original goal? What a surprise!
Posted by guest , Nov 12, 2008 10:47AM
Where's the beard? He should be good for another -300
Posted by guest , Nov 12, 2008 10:48AM
Paulson should be jailed for coming up with this.
Posted by guest , Nov 12, 2008 10:50AM
The US govt should just incorporate in the Caymans
Posted by VOL IS KING , Nov 12, 2008 10:52AM
@9:
If by "set aside" you mean siphoned from china just when they need the capital most, then yes. Now we've just got to make sure there's no way this money gets to consumers or they'll spend it on chinese goods and undermine our fifth column attack. Russia will be broke by Jan 1 09, operation trojan treasury must continue at all due speed!
Posted by guest , Nov 12, 2008 10:53AM
Most profitable trade of '08 = sell ES when Bald, Beard or Bush speak and cover at EOD. I have backtested this on my TD Ameritrade Strategy Desk(TM) and it works every time.
Posted by onetwo , Nov 12, 2008 10:55AM
Gotta love the uber-dramatic sip of Dasani...psychologists should have a field day with that maneuver.
Posted by Anal_yst , Nov 12, 2008 10:56AM
Nominate #12 for comment of the day
Posted by guest , Nov 12, 2008 10:57AM
Dasani owned by KO... might be a short based on Bald's product placement.
Posted by guest , Nov 12, 2008 10:58AM
Too long, didn't read.
Posted by guest , Nov 12, 2008 11:00AM
Have you ever traded SKF? That must be where all the hedge funds are playing. It is nuts.
Posted by VOL IS KING , Nov 12, 2008 11:02AM
@17:
naaaaaaahhhhh, no reason people would stop purchasing rebottled tap water at $.0525/oz. fundamentals of bottled water carry trade are sound.
Posted by guest , Nov 12, 2008 11:03AM
Sooo parched.
Posted by ShortOil , Nov 12, 2008 11:03AM
going out with a bang
"we fucked up, and I'm out"
Posted by guest , Nov 12, 2008 11:05AM
breaking news : http://breakingnews.nypost.com/dynamic/stories/C/CA_BODY_ABDUL_HOUSE_CAOL-?SITE=NYNYP&SECTION=HOME
Posted by guest , Nov 12, 2008 11:05AM
This jackass ran an investment bank? Wouldn't let him run my mom's investment club.
Posted by guest , Nov 12, 2008 11:06AM
This is beyond FUBAR.
"Paulson Unveils Major Shift In $700 Billion Rescue Fund"
Let that sink in...They are mucking around with $700 *Billion* and are clueless on how to properly use it. Totally fucked is what we all are.
Posted by guest , Nov 12, 2008 11:07AM
Sooo parched.
Posted by guest , Nov 12, 2008 11:07AM
seriously, what clients did stutterin' hank actually cover as a banker? i can't imagine him pitching to a CEO or in front of a board.
Posted by guest , Nov 12, 2008 11:10AM
repurchase by whom?
Posted by guest , Nov 12, 2008 11:13AM
Well..That does it..We're screwed..
Game over! Game over, Man!
Posted by guest , Nov 12, 2008 11:13AM
dude, shaddup already before we drop another 300 pts! zero credibility.
Posted by guest , Nov 12, 2008 11:14AM
Anyone else surprised equities are holding up so well?
Posted by guest , Nov 12, 2008 11:15AM
@25-- $700 billion?!?! That $700 billion is already gone! That's why they have to shut TARP down. No dineros left.
Posted by guest , Nov 12, 2008 11:17AM
@31, I hope that's a good thing.
Something this awful can happen and the market doesnt crater, maybe we're passed capitulation.
Posted by guest , Nov 12, 2008 11:17AM
Welcome to the free for all, ABS...always thought these would be more vulnerable than MBS, which are at least collateralized by, you know, something tangible.
Posted by VOL IS KING , Nov 12, 2008 11:18AM
Just put Taleb and Roubini in charge and send this guy to the glue factory. Are Christian Scientists allowed to use glue? No? Clue factory then, maybe he can requisition one.
Posted by Anal_yst , Nov 12, 2008 11:21AM
looks like Jimmy C had the right idea along, sigh...
Posted by guest , Nov 12, 2008 11:21AM
How can you analyze the markets when these jackasses are making up new rules day after day?
Does he have any idea how much distortion they are putting in the markets?
Posted by guest , Nov 12, 2008 11:25AM
Bald stops talking... stocks rally
Posted by guest , Nov 12, 2008 11:26AM
"My package is bigger. Liquidity focused"
That's dirty.
Posted by guest , Nov 12, 2008 11:27AM
I think you missed the best part of it. Paraphrasing:
Q: "Will you use TARP for troubled automakers?"
A:"Before addressing that [yadda yadda, all industries are important]... That said, we're very supportive of management... uh uh... I mean, this administration is very supportive of manufacturing."
Wow.
With apologies to Mastercard's advertising firm:
Bailing out corporate juggernauts: $1 trillion dollars
Getting that quote from Paulson: Priceless.
Posted by ShortOil , Nov 12, 2008 11:29AM
@33
not even close
Posted by guest , Nov 12, 2008 11:30AM
Guess I picked the wrong day to stop drinking.
Posted by guest , Nov 12, 2008 11:31AM
ty ep
Posted by guest , Nov 12, 2008 11:34AM
@42 change of plans, a la paulson
Posted by guest , Nov 12, 2008 11:42AM
Market bottom? seriously? maybe in a world where everyone isn't realizing that everything is built on fiat. We've got a long, long way to go.
Posted by guest , Nov 12, 2008 11:44AM
so THIS is how GWB gets even with BO for leaking their private conversation to the press! now who was calling him a lame duck?
Posted by guest , Nov 12, 2008 11:45AM
This is the biggest "figure it out as you go" program ever invented.....we, the taxpayers, will be ripped off and stolen from along the way.
Is it me or is the lack of confidence in Treasury becoming alarming? Wait until international investors figure it out - the bottom will drop out then.
Posted by guest , Nov 12, 2008 11:46AM
Time to get Dennis Kneale on CNBC saying "we've definitely seen a bottom here...a bottom is forming....I have sh*t for brains"
Posted by guest , Nov 12, 2008 11:46AM
wow, I feel like Eisman... and no, it don't feel so good
Posted by guest , Nov 12, 2008 11:47AM
It seemed the bids dried up as Haines ranted...I also get the sense that Santelli wants to kill Melissa Francis....
Posted by ShortOil , Nov 12, 2008 11:49AM
that Haines rant needs to go up on youtube immediately
Posted by guest , Nov 12, 2008 11:54AM
So Hank, what have you got?
-CG
Posted by guest , Nov 12, 2008 12:03PM
Simple takeaway, chemo ain't working. The cancer is spreading.
Bank stakes have been the only way to go. Paulson just woke up and realized it. Once the market stops throwing a temper tantrum it should realize this.
P.S. All bankers are now quasi-government commercial bankers whose mandate is to insure that Joe the Plumber can maintain his Visa card payments at rates acceptable to Obama. Joe will also get a free Ford Econoline van for work purposes.
Posted by guest , Nov 12, 2008 12:07PM
TLDR version: short EVERYTHING?
Someone want to tell me how to incentivize banks, who currently find themselves under the wheels of a r@pe train, to lend in a capacity for which they've never done before?
Is this some sort of joke? Did I even read that correctly?
Who wants to take the over under that at the end of the day they're going to have to just de-value the crap out of the dollar and get some nice hyper inflation so people who WERE earning 30,000/Y will now make 200K/Y and can "pay off" their now c on the d loan with a locked in low fixed rate.
Bizarro world inc.
Posted by ShortOil , Nov 12, 2008 12:07PM
what are the chances this is a result of the braintrust at team obama?
Posted by guest , Nov 12, 2008 12:23PM
I want to apply for TARP to finance my peer-to-peer lending and distressed real estate workouts.
Anyone got paperwork?
Posted by guest , Nov 12, 2008 12:26PM
@52
What he got is the end of capitalism
-Hank P/CG
Eeerieeeeeee!!!
Posted by Anal_yst , Nov 12, 2008 12:26PM
@ 47
I'm curious why everyone claims to be "the taxpayers" and irate about how they're being scammed, when in reality...
1. Some people in this aforementioned group don't/didn't actually pay much, if any, taxes.
2. Much of our current predicament stems from "taxpayers" screwing each other over in the first place (I should hope I don't have to explain this concept here, although I'm sure some of the yahoo's will go ape-sh!t trying to figure it out).
3. Who is stealing from you? Your government, that YOU elected. Suck it up, champ.
In summation, the "taxpayers" are not without blame. Duh.
Posted by guest , Nov 12, 2008 12:29PM
@58
Just to be sure, how does the "taxpayers" screwing each other get us here?
- Yahoo
Posted by guest , Nov 12, 2008 12:39PM
Old/New Rule: The only people who should be allowed to vote are landowners.
Posted by guest , Nov 12, 2008 12:40PM
flipping houses?
Posted by guest , Nov 12, 2008 12:41PM
@54,
Someone want to tell me how to incentivize banks: I'm told firearms work well.
It will shake out like this. The government will inject mucho capital into banks. It will be as pleasant as an ass-rape. Said government will then dictate how the capital is to be distributed through the system. Make education loans, loan to auto companies, bail out taxpayers, etc.
Posted by guest , Nov 12, 2008 12:43PM
@62: that assumes the banks will use the injected capital and lend it.
Whereas to date all we've seen is them hoard it. Alternatively rate cuts (ala England) which were expressly made to be passed thru to customers, haven't been.
I would contend that any "relief" banks get is going to just get hoarded and will be used to firm up balance sheets - I can't with a level head see banks opening the coffers out of good will based on some request lacking any teeth put forth by Big Brother.
Posted by guest , Nov 12, 2008 12:53PM
Many on here simply don't get it. You just don't inject capital into banks and presto-chango banks start lending.
Banks aren't lending because if you underwrite the ability of consumers to pay back, you don't have many people that are currently credit worthy. This whole mess wouldn't have occurred if not for a drastic lowering of our lending standards. Telling banks to lend to unqualified borrowers will simply make the matter much worse in the coming years. After seeing their breathern go out of business, layed off, etc, banks aren't too excited about following them down the rabbit hole.
The key to solving this issue is very close to #54: they ONLY way is to devalue the dollar or write checks of $200K (which is essentially the same thing).
Short of that-there is no solution other than WWIII, military draft, winners come home.
Posted by guest , Nov 12, 2008 1:00PM
64, if the government would just blow up 1.5 million houses all this would be solved.
Posted by guest , Nov 12, 2008 1:17PM
@63, don't worry there will be teeth. Have you seen Obama's smile?
They are going to try to fix this thing at all costs. The failure of TARP will be ascribed as the failure of a market based solution.
Posted by Anal_yst , Nov 12, 2008 1:19PM
Walked right into that one I guess, sigh...
To severely overgeneralize (via example), Wall Street/Main street - pretty much everyone - has been riding the gravy train for as long as possible, cheap credit fueled by the Wall Street sales/securitization machine, enabled by lazy investors sucking up every piece of garbage security they could get their hands on. This in turn enabled irresponsible mortgage originations/sales to schmucks who bought into the "american dream" (a bullsh!t concept I've addressed elsewhere) hook, line & sinker.
All parties involved made several irresponsible and short-sighted decisions to maximize their short-term benefit at the expense of long-term stability/sustainability. Now we're just finally (trying to) pay the piper for our largess.
Posted by guest , Nov 12, 2008 1:34PM
@67
Everybody did their job:
Average Joe: Went shopping
Wall Street: Sold their products to whoever could purchase it
Regulators & Lawmakers: ?
Well not everybody....
Posted by guest , Nov 12, 2008 1:41PM
@ 66: too bad the US can't afford a "state based" solution - shy of firing up the printing presses and working them till they're smoldering ruins.
I'm poster 54, and I would love to hear someone come up with a solution that doesn't involve printing a quintillion dollars, ruining our nations "port in a storm" status, not to mention our status as "preferred currency denomination" for a lot of international trade.
Aside from there not being any easy solution, I can't forsee the US's status as the worlds sole superpower taking a significant/permanent hit due to the re-trenchment we're going to see under our next administration.
Rescue the autos, rescue the retailers, rescue everyone - then pull out of all the international stuff we can no longer afford, leaving power vacuums and sowing seeds for generations of resentment.
It's like a giant ponzi scheme that extends so far beyond Wall St and Main St it hurts my brain to think about all the ramifications.
Posted by guest , Nov 12, 2008 1:47PM
@67
Not to play public advocate but can you blame people for being dumb?
The economy grows at the pace it does because people are reckless and spend their money on shit they don't need.
The system advocates it.
Posted by guest , Nov 12, 2008 1:54PM
Turns out, there there are side effects of the Treasury Secretary's past steroid use
'including aggression and increased violence, mania, and even psychosis'
The Tresasury Secretary's current corticosteroid side effects include
'increased sweating
mood swings'
Doc Johnson
Posted by guest , Nov 12, 2008 1:55PM
@69...solution?
1..Free market can fix itself.
2..Time for free market to work.
This will be very painful but it will work.
O'well.....too late! Idiots have been turned loose with unlimited funds. We are f@cked!
@67...good generalization. really can't point a finger at just one group. We are all responsible in one way or another.
Posted by guest , Nov 12, 2008 2:19PM
@72
What do you think will happen to the USs' status (albeit declining) as the worlds sole superpower? Or the result of action (or inaction) on the worlds use of dollars as the preferred currency? Or when the rest of the world decides they've had enough of our crap and stops funding our deficits?
Also, how long before the free market does fix itself, and how many people lose jobs in the meantime? What does unemployment have to hit before business sentiment (capital investment, lol financing) improves? At what level unemployment does social unrest begin?
Dramatic, but real questions :)
Posted by guest , Nov 12, 2008 2:41PM
@73...Answer to the first question is....sooner rather than later should we continue to devalue the dollar. Yes I know it's gaining now. I don't think that will last.
Second, I don't know how long. I think it will be shorter than strnging it out the way we are now. Unemployment? How high? I could say 20%. I don't know.
The point is if it's the free market or the continued blunders we are making now the outcome may be the same either way.
The difference being the free market won't cost $3t and we will know where we stand. The rules won't change minute by minute.
Posted by NAS Keflavik boi , Nov 12, 2008 2:54PM
@ 54/69 - You're right -- we can't friggin buy everyone and their brother a pony and not endure truly outrageous inflation. Washington is going to monetize their debt. Get your wheelbarrows ready, kids.
Posted by guest , Nov 12, 2008 3:03PM
paulson = pelosi's poodle.
Posted by guest , Nov 12, 2008 3:06PM
@69, one thing to remember is that by injecting capital into banks, the govt is getting 10x leverage.
IF they can turn around lending, it's a far less inflationary scenario than a broad govt. stimulus package. And they are taking equity stakes to boot.
I don't know what to say about the loss of superpower status in the world. It really is a second order concern.
Posted by guest , Nov 12, 2008 3:37PM
54/69 here:
Thx for the responses, I guess I just see the imminent(?) pending(?) dramatic (!) devaluation of the dollar as closely correlated with with the US decline from superpower status. A self-reinforcing downward spiral if you will - not unlike the credit woes of today.
Both concern me greatly for various reasons; the goodwill associated with being -the- port of choice in a sh|tstorm does not rank lowly on my list.
Posted by guest , Nov 12, 2008 4:01PM
why is everyone assuming these are decisions being made by the Bush administration? Paulson said a couple weeks ago that they had office space at the Treasury prepared for the new people to start the DAY AFTER the election - obviously they were being pressured by the new administration to let their people there immediately.Everyone knew Obama would win at that point - I think he has had people at Treasury making decisions even before the election. Also nobody noticed this but the law firm that the Treasury hired to review claims from banks asking for money is a law firm that has done work for Obama's alma matter - the only reason I mention this is that I believe Obama's people are more involved in decisions at the Treasury than anyone realizes.
I know Bush had a corrupt administration but I believe Obama's will be the same, if not worse. His new chief of staff is a former investment banker who received more donations from ibanks than almost anyone else in the senate.
They want Bush to approve the bailout for the auto industry now so that Obama can blame Bush when people are angry about it. Also I don't believe Obama is capable of doing much - we don't have any concrete evidence that he is as smart as people claim - only his "memoirs" that someone probably helped him with. No collge transcripts, no college papers, no legal briefs, never been in court, absolutely nothing.
I believe, and I have been saying this for months, that Obama won't be doing much of anything - we just elected Emanuel for our President.
Posted by guest , Nov 12, 2008 4:05PM
79 You're wrong. Its Clinton's fault. Everyone knows that.
Posted by guest , Nov 12, 2008 4:48PM
@79,
Obama is extremely smart. I'll give him that, but he sold his soul. His decisions are not his own.
He ascended to power through the Chicago machine, the very definition of corrupt. It does at least keep the trains running on time. This presidency will make Bush cronyism seem, well um, bush league.
Posted by guest , Nov 12, 2008 8:06PM
re superpower. We are fucked but the rest of the world is probably more fucked. And militarily no one comes close however the only thing that gives us that edge is our GDP and all that is associated with it, not the leadership. Just like the country itself. Once that is gone we are more fucked. I'm in the military and travel extensively for it. (besides the ME) Believe me, every other country sucks us off and we are still the cool kids smoking cigs in the hall when shit goes down. I just wonder though if it will last without capitalism, even the mixed capitalism we have had in the past. Working for the government has taught me the greatest lesson of my life: THEY ARE FUCKING CLUELESS IN EVERY ASPECT OF THE WORLD. The beard and the bald reminds me of Admirals; clueless and spitting bullshit constantly and acting on their own fears of getting fired or looking like morons.
Love reading DB out here in the tent. Keep it up.
-LT in the desert, Iraq
Posted by guest , Nov 12, 2008 8:13PM
Here is the TARP application if you happened to want to see it...
http://www.ustreas.gov/press/releases/reports/applicationguidelines.pdf
Posted by guest , Nov 12, 2008 8:43PM
I can't believe someone used Circuit City and Smart in the same sentence. They flew a good company into the ground by making classic blunders no successful hardware store owner would be silly enough to try.
Posted by guest , Nov 13, 2008 12:57AM
Once again, plenty of laughs after a bad day. I loved onetwo's comment about Paulson's uber-dramatic swig of Dasani. Whoever posted about the long term effects of steroid use on our T. Secretary is also to be congratulated.
No, I don't think Paulson is Pelosi's poodle. I think Paulson made Pelosi his bitch, and she's going to be embarassed about it for a long time to come. When she cast her furtive worried looks up to big Hank standing so tall and strong at the podium during the Congressional consideration of the bail-out -- it was enough to make me upchuck at the time. Big Hank coaxed her to go too far and and then let her down.
People who continue to blame it all on Obama are the ones I envy the most -- because it would be so nice to be way out of touch with reality right now.
Posted by guest , Nov 13, 2008 1:05AM
By the way, I think it's time to abandon the use of the terms "The Bald" and "The Beard." These terms never had anything to do with these guys' characters (compare "Tricky Dick," for instance) nor were particularly funny and they haven't caught on elsewhere.