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Its a slow day at work so i found the testimony from the guy who testified before the House about the Madoff fraud.
I don't claim to understand all he is saying but i still found it to be fascinating stuff. http://media.ft.com/cms/5dc7a512-f2f6-11dd-abe6-0000779fd2ac.pdf |
Finally got around to reading this article (well started anyway)... fascinating read. Yes I know I must live a very boring and sad life if this is how I'm spending my Saturday (I'm under orders not to post on this board for a week starting tommorrow :( ).
Anyhoo, relevant to my recent blathering, page 48, read the little blurb on cost of capital and DOD contracts. That is exactly what I'm getting at with the giant database of doom. You can datamine out so much obvious corruption in the federal budget if you put enough math and figures together. I also need to see if I can get my hands on a Bloomberg machine to further my evil plots. |
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What pisses me off is the "all banks are bads" spin by the media and the government. The government forced the Bank of America/Merrill Lynch merger (which made the company even worst) and they forced nine banks to take bailout money (including Wells Fargo). They then paint Wells Fargo as an "evil" bank for spending "taxpayer" money for a junket to Vegas. Wells Fargo is healthy, they didn't need the money, and shouldn't have to answer to taxpayers (after not wanting to taxpayer money) when they were a responsible bank from the start. Does this mean that the the irresponsible banks and execs shouldn't be dragged and hung? Of course not. Drama Behind a $250 Billion Banking Deal - NYTimes.com |
Speaking of Vegas, I quite enjoyed the mayor there taking Obama to task for his criticism of people deciding to do business in Vegas. His complaint in general was spot on, there are far less reasonable locations that could be chosen for a meeting.
Kind of made me wonder what would draw fire next? Being located in NYC or California since overhead there is so much higher? |
Considering the recent article and promotion about Vegas deals, I think it is one of the cheapest resort destinations out there.
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Goodman (I think that's the mayor's name) was upset that the city's suitability for business purposes was cast as suspect and I'd say that's a very fair complaint. I'm familiar with business only trips to Orlando so I know such a thing is possible in what is primarily a tourist/resort/vacation spot. |
quite frankly, in this current economic climate whether you needed bailout money or not - anything more than a conference room in a local Marriott is wasteful and looks bad.
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When can banks re-pay the money?
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banks would prefer asap.
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Banks forced to take bailout money, lol... they've got some good spin doctors.
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Yay! Good news day!
-Retail sales rise 1% in January. Sure, not much, but better than the expected loss. Biggest increase in 14 months and 1st gain in 6 months -Jobless claims drop slightly. Still, a big number and higher than analyst expectations so this isn't exactly good news- just slightly better bad news Any silver lining, I suppose SI |
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Take it from Obama's point of view: it's the perception, not the actual effect that's important. He is all about perception and not any real affect on society. |
My Way News - Midway Games files for bankruptcy protection
CHICAGO (AP) - Midway Games Inc. (MWY) (MWY), best known for its "Mortal Kombat" video games, said Thursday that it filed for Chapter 11 bankruptcy protection. Midway said the filing stemmed from a change in ownership in late 2008 that led to accelerated buyback requirements related to two classes of debt that the company did not think it could fulfill. In December, media mogul Sumner Redstone sold his majority stake in Midway - an interest of about 87.2 percent - to a company led by private investor Mark Thomas. In a statement, Midway Chief Executive and President Matt Booty called the bankruptcy filing a "difficult but necessary decision." "We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives," he said. Midway said that it and its U.S. subsidiaries filed voluntary petitions in U.S. Bankruptcy Court for the District of Delaware. Midway said the filing does not include its operations outside the U.S., and that they will continue to operate as normal. The company is seeking several first-day motions so it can continue to operate normally. Midway shares fell 10 cents, or 40 percent, to 15 cents in morning trading. |
The midway things been coming for ages - not exactly a great surprise imho and not really linked to the recesion per-se ..
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Eh, I didn't figure it was worth its own thread but wanted to give it a brief mention, this seemed like as likely a place as any other. |
While we're on the subject of bankruptcies that were inevitable regardless of the recession.
Charter Communications to file for Chapter 11 - Feb. 12, 2009 NEW YORK (CNNMoney.com) -- Charter Communications, a provider of cable TV, Internet and other broadband services, said on Thursday that it will file for bankruptcy, as part of a "financial restructuring." The St. Louis-based company said it planned to reduce its debt by $8 billion as a result of a Chapter 11 filing. The company added it intended to file on or before April 1. "The purpose of Charter's financial restructuring is to strengthen its balance sheet in order to fully support the company's operations and service its debt," said the company, in a press release. Chief Executive Neil Smit said in the same release that the company "will be even better positioned to deliver the products and services our customers demand now and in the future" as a result of the filing. The company described its operations as "strong," and said it had $800 million in cash to help meet its needs to continue operating. The company said in its press release that service should "continue as usual." One analyst said the news was not a surprise and that it could be beneficial for the company. "This is expected, and this is a fairly traditional style of bankruptcy," said Chris Roberts, analyst for Tejas Securities Group. "By cutting interest expense, they'll generate more cash flow to help invest in the business." Charter's largest shareholder is its chairman, Paul Allen, a co-founder of Microsoft (MSFT, Fortune 500). Charter, which has about 5.5 million customers across the country, is the nation's third largest publicly traded cable company, behind Comcast (CMCSA, Fortune 500) and Time Warner Cable (TWC). (Time Warner Cable is a subsidiary of Time Warner, which also owns CNNMoney.com. Time Warner (TWX, Fortune 500) plans to spin off Time Warner Cable later this year.) Charter's (CHTR, Fortune 500) stock plummeted nearly 50% on the news, to about 3 cents a share. Because of its low stock price, it is vulnerable to large fluctuations. |
Okay, finally the stimulus bill has passed. I really don't know if it will do the job ... may be too small (Fri NYTimes talked about the Japanese lost decade and that their advice was more $ stimulus and transparency in the banking system i.e. don't hide the losses).
In reading the plan below, it seemed alot of 'citizen relief' rather than 'business stimulus'. Not sure if that is a fair characterization and I understand the 'relief' portion will allow us to spend more for 'business stimulus' ... but I would have preferred a more targeted package. Wouldn't this plan have been better just focusing on houses, foreclosure prevention/relief/mitigation, banking reform/nationalization (temporary) etc.? Maybe its swung to the other extreme from Paulson. Stimulus measures that may help your wallet - Feb. 13, 2009 Quote:
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Found the Japanese 'lost decade' article.
In Japan’s Stagnant Decade, Cautionary Tales for America - Companies * US * News * Story - CNBC.com Quote:
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Am the only one who finds this package pathetic (and a reminder of last summer's $300 credit)?
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While that is certainly worthwhile (and presumably the purpose of the remaining $350 billion TARP money) it would only deal with the initial (and one continuing) cause of the problem but not with the acceleration of the downturn that's now being caused by unemployment. The downward spiral that comes with unemployment has to be addressed as well and that's where the spending - replacing the lost demand - comes in. What isn't being said by those who object to the demand package is that the usual supply side answer to recession - reducing interest rates - has run out of steam with rates now being near zero. The same happened in Japan in the 1990s. You need to replace the demand lost by unemployment. Tax cuts and handouts are one answer but in the current circumstances not an efficient stimulus because people save too much of it (the Australian government gave $1400 to all pensioners in December and monitored the use of the money - only 20% was spent, 80% was saved, paid off credit cards etc). Only government spending the money directly can ensure it is indeed spent and therefore an efficient stimulus - assuming there's adequate monitoring of the spending. |
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I find the tax cut part useless. If that $300B would have been infrastructure spending (re: jobs and long term benefit), I'd have been downright giddy. SI |
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That would have just added more to the backlog, pushing project starts to 2011 and beyond. Not only does it takes time to plan/bid/award/negotiate large construction projects, but there is only so much that can be done at the same time. Don't get me started on utilities infrastructure where very little of it will actually happen in the near future (due to current backlogs and lack of qualified field crews). |
A key part of the Japan lost decade comparisons that gets lost behind the 'more money, faster' tagline, is actually ripping the banks apart (in audits) and wiping out shareholders if necessary. The banks in Japan did not want that and held on until something had to be done, and the banks in the US are going to do the exact same thing.
Making the banks fail if that must be the case is a critical requirement of recapitalizing them. Default and get it over with, hell most of the equity in the banks is evaporating anyway with several major players less than half or in some cases 5-10% of previous size! (by share value). |
which is what theyre 'saying' theyll do via the Geithner 'stress test'. I mean if the opposition just simply doesnt believe the words coming out of their mouths than arguing about the bill is pointless because you could say it's all BS anyways.
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Lets say I doubt how stressful that stress test is going to be. I start doubting the government when it shows obvious incompetence and corruption time and again.
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so than there really is no point in debating the merits or lack thereof of said stimulus or packages or tarp tauf whatever because you dont believe that it is what we think it is anyways.
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I'm against any plan in general. Throwing hundreds of billions of debt on top of trillions of debt isn't the answer. What happen to the Dems promise to bring back the "spend-as-you-go" policy? |
we ran into this little thing called a deflationary spiral.
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If you do nothing then the recession will continue to deepen. Tax revenue will fall (corporation taxes, income taxes and sales taxes) and government unemployment responsibilities will rise - the deficit will snowball. There is no way out of this that will protect the deficit. |
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I would support a plan that actually worked, not full of pork, wasteful spending, and attack the problem. |
one person's pork is another person's job, etc. etc. etc. not everyone is going to be happy unless it works which is years away from knowing.....I believe it will AND believe that what we're debating is accurate to the intent, if you dont, than Im not sure what there is to debate, since we could be debating anything really.
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Actually, Hoover thought the answer was to balance the budget in bad economic times. That... didn't work out so well. SI |
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Calling it "pork" does not rob it of its stimulative action. We may approve of some projects more than others but whether you put your money into bibles or condoms the stimulation to employment in both manufacture and retail is pretty much the same - just in different sections of society (or maybe not ;) ) |
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I seem to recall, I think it was the 1987 recession, that it was decided that you needed to balance the budget over the full economic cycle. You go into deficit in bad times and surplus in good and achieve overall balance. Because tax revenues are lower in the former and higher in the latter, that seems to make sense. |
When I see good things in legislation I'll try and announce it, when I see crap I'm gonna call it and not hide behind panic politics. Following the calls of panic leads to wonderfully terrible things, history has shown plenty of that.
And where you see a deflationary spiral, I see necessary deleveraging. We only are printing money to obfuscate bad debt from bad decisions by bad leaders at bad banks. I've already argued before that we never saw the sort of inflated prices to match that massive leverage (did your loaf of bread cost ten times the price of 1990?), so the real result of printing money is going to be an increase in prices (now that everyone knows the wizard of oz is just some fool behind a curtain). To even start to match all that super leveraged debt to avoid what they are terming deflation, you would need to quintiple prices, at least. I won't even start to go down the similarities to the Japan situation, which was a massive period of stagnation caused by throwing misguided fiscal policy to save face for morons. We need to take the hits, and if they look to severe to survive, we need to close the banks and force a controlled reset. |
+1 to SportsDino's post.
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but unfortunately I dont have any idea what SD is talking about above because he doesnt trust in the actual verbiage of the bill. So SD, to make the debate even sided you should write exactly what you think this bill will effect, i mean what pork will be unfunded, what will happen, who will do what, etc. and we can debate that.
Im being sarcastic but in multiple threads some people (not only yourself) are saying we're against the bill because we dont believe the gov't will do XYZ eventhough the bill states XYZ so what does a supporter of the bill do with that? I guess a supporter would just have to say, "welp, youre wrong." which means nothing. |
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Isn't that how it should work? When times are bad, you might come up a little short but then definitely pay it back and get ahead in the good times so you don't have to borrow the next bad time. I don't remember it with regards to the 1987 recession but it could easily have been mentioned then and I wouldn't have noticed (being only 7 at the time :) ) SI |
I think the single biggest problem I have with the bill, and I can only speak for myself, is that if only 5-7 people "possibly" could have read this bill prior to voting on it...then my trust has to be placed primarily on the small group that had control of the bill in the late hours of Thursday/Friday AM. I have almost no faith that the majority of our Senate (or House for that matter), is able to digest a typical article in the WSJ, let alone one of(maybe THE?) largest bills intended to stimulate the economy ever. EDIT to add: I have no faith they could have digested this bill in a day.
The other concern I have is that there isnt nearly the energy infrastructure projects that I would have hoped for in such a massive bill. So that means we'll be seeing another one of these within a year or so. So while I do agree that a large bill is necessary, and that tax cuts alone arent going to be the long term solution, I think this bill is entirely too rushed for the limited short-term stimulus it will deliver. |
Now THAT is a good point that goes to the heart of the opposed due to trust argument and I can buy that. You're not saying the intent is to pass the bill and than do things different than that which the bill affords but that the bill has been passed so fast that it may NEED to be pushed aside, tweaked, cajoled, or massaged. I can understand that POV.
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Yeah, I think the Japan issues from the 90's are worthwhile to keep in mind, but I dont buy that NO spending is the alternative. It's all about ROI to me...and what gives better long-term ROI.
To me, and I wont claim to be an economist or expert, if you are going to try and cause a degree of inflation (by printing and circulating money internally to the US) to combat deflation (or devaluation) then it makes sense to try and alleviate external purchasing where plausible. To me, the most plausible way is through energy independance, the jobs that creates while eliminating outgoing recurring expenses to the country. I dont think that is protectionist or isolationist...as once you do that you can begin exporting your energy technology/expertise to the rest of the world(that hasnt done so themselves). But while building bridges and high speed trains create some jobs...they are temporary by nature(albeit longer term temporary), and produce little ROI (where ROI means "how does the overall country profit from such an expense?"). Having nice roads doesnt necessarily invite a significant amount of external (to US) revenue to come enjoy your roads or bridges. So, yes there are necessary projects like that, they arent all necessary ASAP...even if they could begin ASAP. ROI-based projects are more critical. |
I agree with SteveMax. Cost/Benefits have always been my thing, along with the dominance of the federal govt in many state, local and personal issues.
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To me one of the most ludicrous aspects of the current stance to the economic crisis in America seems to be the lack of attention and investment given to the most vital future resource of the country - that being its education system.
I don't know if this is repeated in other states but in Florida they're cutting teaching jobs hugely and increasing class sizes - both of which will be very detrimental to the quality of education supplied. Yet its educated people who in the whole are more likely to setup their own businesses, invent new technology etc. |
Here's a summary of my position as brief as i can make it:
- I am opposed to TARP. I'll put it in bold letters: I THINK IT IS A MISTAKE TO BUY DERIVATIVE INSTRUMENTS THAT ARE EFFECTIVELY WORTHLESS. Any money pumped into them evaporates instantly without creating ANY economic value whatsoever. It is a political/corruption move to cook the books of bad business, and you cannot convince me otherwise unless you are willing to actually break down exactly how economics says bailing out morons is capitalism. Or chasing lost money with even more money makes sense. - I am opposed to tax cuts on capital gains. Because most of the people gaining right now are just like me, they made the easily predictable short (leveraged inside information or just plain good guesses) and every dollar they made is basically money sucked out of the economy. It will not stimulate growth either, it will stimulate continued looting of the businesses as the value of speculating is high and the value of investing is low. - I am opposed to wasteful spending to 'just create jobs'. First and foremost, large amounts of each dollar will go to corruption, with the likelyhood being only pennies on the dollar actually leading to worker salaries. Second, government debt will need to be paid eventually. Third, most of the money spent will not generate any future value added to the economy... it will not have either a lasting impact, or create jobs that will survive longer than a tiny period of time. - I have advocated spending as part of a stimulus package, I have even gone through and mentioned some I liked and others I disliked. I even made my list of six or seven proposals that I would like as focused stimulus packages that I think would have a lasting impact. I know I have posted a lot of junk, but I believe I have been internally consistent all this time... I want spending on America's messes (huge spending perhaps) that will make us stronger in the future. And I want it spent with a vicious eye kept out for thieves. Right now I'm looking at this stimulus with a vicious eye, if you did too I'm sure you could spot the 'hahaha, good old Democratic back scratching' moments litterred in there. Hell, you can probably link every Republican vote (3ish?) to a particular portion of the bill if you tried hard enough. - I agreed with the depreciation changes as a method to affect current cash flows, and I believe that is in the package, although I have not verified what survived or not. Although i think they may be abused and hope someone is watching for it. - I'm for a payroll holiday to improve the ability of employees to whether there expenses when there is likely no raises this year. - I don't think I have mentioned it, but I approve of unemployment extensions and improvments. People can't find a job if their life depended on it right now, and sadly their lives do depend on it. I'm sure I've babbled plenty of other stuff out there if you want more details. If anything, despite the massive amount of words and noise, of anyone on the board I'm probably the easiest to guesstimate what my stance is on a particular issue since I've spouted out so many of them. I'm sorry I didn't compartmentalize it into some nice tidy 'liberal', 'conservative', or other box for you to categorize which herd I belong to. I pretty much burn the entire spectrum with my criticism and my views of economics, which are supported by neither party in office, and certainly not by most modern business. I also am very skeptical because I see the games politicians and businesses are playing, and break down what they are really trying to do, not what they are saying they are trying to do. Do you really believe the same folk who screwed us so royally are truly going to do the best thing for the US as a whole now? |
I am saying that the things in the bill themselves are enough to show how useless or ill advised they are. How they describe the bill in the news, and what the actual language really tells are two different things. That and some people might honestly believe X billion for yada yada is all great and gonna save the economy, but I am saying that X billion is not all its hyped up to be. That it may be too much for yada yada, or it will be mis-spent because the bill has nothing in there to prevent it from being wasted. I may even disagree that yada yada will have any useful effect whatsoever on economic growth (or job growth).
If there is X billion being spent, I want to see 5000*X jobs created. For 800 billion I am expecting 4 million jobs. Somehow I doubt that is happening with this package as it is currently constituted. You find me where even 2 million jobs get created by that bill and I swear I'll shut up. Hell, for 1 million I'll at least tip my hat to you and Obama. It would have cost 800,000 per job created, but at least you would have a measurable result. It still would only be a dent in the side of exploding unemployment. And finally, 2 trillion in bank handouts probably won't create a single job. It'll be sucked up to counter balance their bad bets of the last two years IF THAT (since we are talking 10 to 20 times leveraging on a nice day). |
good post but i think theyre saying jobs saved too, I have to go to lunch but I want to read your post again.
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I'm not sure it was the 87 recession - these things see to come along far too often and it's difficult to remember exactly when. But I do recall it was seen as a new idea which is surprising when you consider how obvious it is. But then economic theory, it seems to me, is so corrupted by self-serving ideology that I shouldn't be surprised at anything it throws up :) |
U.S. agents enter Stanford Financial Houston office
You have to wonder how much more of this bullshit is out there. These jackasses should be taken to the wall. |
Stock market looking good in preseason.
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