Thursday, September 25, 2008
Still totally sick, but I had to keep up with the media today. Can't miss out on historic government intervention in the making!
A sneaking suspicion
“So I just did a Nexis search trying to find out when Paulson and Bernanke started talking about price discovery, which we’re now told are at the core of the plan’s logic. And the answer is …
How Bad Is This Bad Debt?
“He [Ben Bernanke] made clear that the government isn’t interested in overpaying for the assets, just returning the whole market to more sustainable, fundamental pricing.” RW: Huh? Isn’t that what the whole point of TARP is? To instill confidence in a broken asset market by paying more than the current equilibrium price?
That Flip-Flop Didn't Take Long
“September 16, 2008: Larry Kudlow praises Henry Paulson for his "courageous" opposition to bail-outs.
September 24, 2008: Larry Kudlow praises Henry Paulson for his bail-out plan.”
Jimmy Carter says bailout plan is 'extremely faulty'
“The Bush administration's $700 billion plan to bail out the financial industry is "extremely faulty," Former President Jimmy Carter said at a Tuesday night town hall-style meeting.” RW: Forget the swarm of economists that oppose the deal, if Jimmy says it, then it must be bad!
America's Sovereign Wealth Fund
“The market is not being irrational; the market is being forced to deleverage. The goal of America's sovereign wealth fund (the Troubled Asset Relief Program) is to stop the vicious cycle.”
Kazakhstan Plans Paulson Style Bailout: Borat?
“I can't believe it! Kazahkstan plans to implement their very own Paulson bailout. Those crazy Kazakhstanis! Insanity is a virus”
Credit Stress Evident In TAF, Ted Spread, Everywhere
“Inquiring minds just might be wondering how the Term Auction Facility (TAF) is performing. Let's take a look at the two most recent auctions.TAF Release Date: September 10, 2008On September 9, 2008, the Federal Reserve conducted an auction of $25 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:Stop-out rate: 2.530 percentTotal propositions submitted: $46.237 billionTotal propositions accepted: $25.000Bid/cover ratio: 1.85Number of bidders: 53TAF Release Date: September 23, 2008On September 22, 2008, the Federal Reserve conducted an auction of $75 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:Stop-out rate: 3.750 percentTotal propositions submitted: $133.562 billionTotal propositions accepted: $ 75.000 billionBid/cover ratio: 1.78Number of bidders: 85Note that the number of bidders soared from 53 to 85 and the yield went from 2.53% to a whopping 3.75%.”
RW: And that is why the Treasury is selling bonds for the Fed. The System Open Market Account (SOMA) account is falling by the day. The Fed owns just $480 billion in Treasuries, down from $800 billion in December 2007 (before the TAF auction was initiated).
RW: And a little humor for the day
Let’s Suspend the Whole Election
“But as usual John McCain is being entirely too cautious and humble by merely suspending his campaign and postponing the debates to get our economy running again. McCain is not by nature one to be rash and impulsive, but I think it’s time for him to throw caution to the wind for a change and ask Barack Obama to agree to suspend the entire election.”
Market Mood Swings — Revisiting Ben Graham
“When Matt Millen was a tough, hard-hitting linebacker for the San Francisco 49ers, he said it best, ‘Things are never as bad as they seem when you’re losing and never as good as they seem when you’re winning.’”