Obama’s Economic Superfriends

  • 23 Apr 2009 at 3:22 PM

Lullaby And Goodnight

summers.png

Lullaby and goodnight

Those blue eyes close tight

Bright angels are near

So sleep without fear

They will guard thee from harm

With fair dreamland’s sweet charm

They will guard thee from harm

With fair dreamland’s sweet charm

HT: 1-2

  • 17 Apr 2009 at 3:24 PM

White House On Chooch: Thumbs Up!

obama_thumbsup.jpgCNBC is reporting that the President’s men have “full confidence” in the personage (and presumably the taste) of Mr. Rattner, who’s cinematic production genius has graced the world with Chooch.
A more ringing endorsement of the film we have not yet encountered.

  • 17 Apr 2009 at 10:20 AM

“Nobody Leaves The KGB”

lloydbl.png“So thank you for the loan, we’ll just pay this back now and do away with these compensation requirements…” Cindy had brought a copy of the regulations to ceremonially tear up for the occasion. Thin smiles began to emerge, a glimmer of hope, then faded instantly when Tim interrupted.
“Yeah, not so fast.”
“What?”
“Yeah, aren’t you forgetting something?”
“Wha- what do you mean? I have the check right here. It’s a cashier’s check even, like you asked for. It is signed in the right place. The amount is right there…” The amount was quite visible to everyone in the room, it having overlapped into two rows because of all the zeros.

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And you thought today would end without a good, deep laugh.

President Barack Obama is expected to tap Fannie Mae Chief Executive Herb Allison to head the government’s $700 billion financial-rescue program, people familiar with the matter say.

Bank Vet Tapped to Run Bailout [The Wall Street Journal]

  • 09 Apr 2009 at 2:35 PM

Of What Value Is The Test That No One Fails?

For a quick lesson in hypocrisy and smoke and mirrors all tied into one, how about the test that no banks can fail, and that, in any case, is based on such lax standards and assumptions that even the institution passing with high honors should give investors no comfort whatsoever? We refer, of course, to the much touted (by the Administration in any event) “stress tests,” the economic assumptions of which have already been overtaken by current conditions.
Really, it is insulting to the public to think that their confidence will be restored by some arbitrary “stress test.” We suppose that we are supposed to draw from our experience with federal standards like those “regulating” “no trans-fats” and “no calorie sweetener” claims to feel certain that the government knows what it is doing and happily go long all financial institution (since none will fail the “stress test.”)

Regulators say all 19 banks undergoing the exams will pass them. Indeed, they say this is a test that a bank simply will not fail: if the examiners determine that a bank needs “exceptional assistance,” the government, that is, taxpayers, will provide it.
But the tests, which are expected to be completed by the end of this month, are being conducted out of public view. Federal law prohibits the unauthorized disclosure of the results of any bank examination, including the stress tests. Some investors wonder if the new tests are rigorous enough, given the potential problems lurking inside the banking industry.

We are shocked, shocked, to discover that no banks are failing the test.

Banks Holding Up in Tests, but May Still Need Aid
[The New York Times]

  • 09 Apr 2009 at 10:40 AM

We Need To (Re)Create The Vomitorium

As you will know from our Opening Bell, the latest from the bailout boys is the concept that a series of mutual funds raised to buy toxic assets are the modern equivalent of patriotic “Liberty Bonds” or “War Bonds” of years past. Aside from being a rather nauseating bit of gamesmanship to compare bonds used to fight the Great War or World War II, we bristle at the suggestion that there is some patriotic duty to bail out the failed policies that fostered the illusory “American Dream of Home Ownership” for every citizen (no matter what the cost) and the fraud these perpetrated on the country. Is it not enough that we are already providing what are effectively failed institutions unbearably low cost capital while the likes of Berkshire Hathaway must wallow in high rates?
It is more than despicable that, now that the PPIP looks like it may be an abject failure even before bids have hit the screens, we should see the attempt to throw the problem onto the “dumb money” of the retail investor, without the leverage of the PPIP and while collecting fees, we might add. (As if same wasn’t already going to bear the burden of several trillion in extra debt, and the taxes that will go to pay for it along with the vanity that imagines now is the perfect time to tax all energy and reform the health care system by socializing its costs). No doubt large mutual fund failures will tear of each other’s ears trying to climb on top of each other to reach the brass ring of reset-high water marks by purging out units of the newest CDOs to the public.
If ever there were cause to invent the fanciful institution of the Vomitorium, this is it. You’re welcome to your turn when we are though.
U.S. May Enlist Small Investors in Bank Bailout [The New York Times]

  • 01 Apr 2009 at 3:11 PM

This Might Actually Be The End

It’s one thing to say that a firm might be better off in bankruptcy. It is another entirely to prod it down the plank towards the sea.

General Motors Corp.’s 60-day deadline to restructure is unlikely to be extended because the U.S. won’t repay $1 billion in convertible notes maturing June 1, according to a person with knowledge of the discussions.
President Barack Obama’s auto task force told the biggest U.S. automaker it doesn’t want taxpayer funds used to repay debt maturities, said the person, who declined to be identified because the talks are private. Detroit-based GM has $1 billion of 1.5 percent convertible securities coming due June 1. The debentures, issued in increments of $25, fell $2.05 to $7.20 as of 1:56 p.m. in New York, which would be the lowest closing price since December, according to data compiled by Bloomberg.

Funny, we don’t remember any sort of squeamishness about “taxpayer funds used to repay debt maturities,” before now. Why the sudden change in heart?
GM Said to Be Warned Government Won’t Make June 1 Debt Payment [Bloomberg]