tag:blogger.com,1999:blog-4863014635257598503.post6987573100450800380..comments2024-02-27T22:18:53.706-05:00Comments on Zero Hedge: Will Somebody Remove Geithner From The Poker Table Please?Tyler Durdenhttp://www.blogger.com/profile/00165439451205639523noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4863014635257598503.post-63353515451566061652009-03-22T00:30:00.000-04:002009-03-22T00:30:00.000-04:00Helicopter Ben Bernanke is swamping us with Massiv...Helicopter Ben Bernanke is swamping us with Massive Quantitative Easing....The Undertow is likely to destroy us all!<BR/><BR/>http://fargoneworld.blogspot.comTalitha Halostarhttps://www.blogger.com/profile/16860284976580648637noreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-82835975177765620492009-03-21T20:21:00.000-04:002009-03-21T20:21:00.000-04:00another way of putting thisit's almost like the US...another way of putting this<BR/><BR/>it's almost like the UST is asking private equity to bail them out.<BR/><BR/>recapitalize me, i will give you warrantsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-86313545253940409192009-03-21T19:55:00.000-04:002009-03-21T19:55:00.000-04:00well, there's a little problem. why you guys think...well, there's a little problem. why you guys think there was little or no interest from HF community in TALF program last week? very simple: HFs don't want to be in a situation where a group of morons in DC will rewrite the law in 6 months and limit comp in HFs that participated in a govie program or choose to tax those HFs in the only acceptable way (i.e. @ 90%)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-27987483978721551042009-03-21T19:19:00.000-04:002009-03-21T19:19:00.000-04:00The short term outcome might be very different too...The short term outcome might be very different too. Who knows what kind of "sure thing" Citi-esque arbs the HF's are going to try to milk, only to find out it's a bull. <BR/><BR/>All this stuff ran on the income being stripped off securities generated by increasingly indebted households and businesses. It isn't there anymore.<BR/><BR/>We've already seen in Goldman/AIG how the predators begin eating each other when there's no more prey.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-12555515709799129902009-03-21T19:17:00.000-04:002009-03-21T19:17:00.000-04:00With expanded TALF 2.0, can't private investors th...With expanded TALF 2.0, can't private investors then bid up the price of troubled asset, so long as US Treasure is willing to buy them back using TALF 2.0? If the private investors are told the criteria and pricing for "old, illiquid and lower-rated securities", can't they repackage what they bought and sell them right away to the government w a profit? If the Treasure wants to inflate the price of "troubled asset" and get them off banks balance sheet, all they need to do is to accept it with little haircut with loose criteria?!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-82064411330997459982009-03-21T17:18:00.000-04:002009-03-21T17:18:00.000-04:00Of course, the long term outcome will be very very...Of course, the long term outcome will be very very different.<BR/><BR/>Oh me, oh my!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-34546769956944974352009-03-21T16:46:00.000-04:002009-03-21T16:46:00.000-04:00Hm, not sure if I understand this correctly, but w...Hm, not sure if I understand this correctly, but what does stop two banks of doing the following: bank A goes to auction of bank B, bids all the toxic assets up to the maximum (i.e., face value). Bank B does the same at the auction of bank A. After this 'operation', the two banks have exchanged their toxic assets (let's say the face value of both groups of assets are the same), with the small but important difference that both banks now have now additionally received 90% of the face value of their sold toxic assets as cash.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-60080333852892522892009-03-21T15:28:00.000-04:002009-03-21T15:28:00.000-04:00think of it in terms of risk/return: if this plan ...think of it in terms of risk/return: if this plan doesnt work, govt will be forced to buy securities outright. in the near term HFs are hoping to lock in greater fool profits by frontrunning both other buyers and taxpayers themselves. of course, the long term outcome will be very very different.Tyler Durdenhttps://www.blogger.com/profile/00165439451205639523noreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-48582232990894008222009-03-21T14:54:00.000-04:002009-03-21T14:54:00.000-04:00First Tyler, great blog. The one thing I cant wor...First Tyler, great blog. The one thing I cant work out in my mind yet is why would hedge funds overpay massively for these assets when they are looking at 10% losses if they do. To me the cheap financing enables them to get more aggresive with their bids, but not to the point of insanity. An "asset" you think is worth $0.50 might be worth $0.55 given the cheap financing and limited risk, but certainly its not worth $0.80.<BR/><BR/>Only if you assume, like Treasury apparently does, that its a liquidity issue would this plan work.<BR/><BR/>At least that is what is seems like in my amatuer analysis.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-8467061413814527732009-03-21T14:29:00.000-04:002009-03-21T14:29:00.000-04:00"you need these investments to stay on the bank’s ..."you need these investments to stay on the bank’s or the government’s balance sheets so that you eventually capture their value"<BR/><BR/>I'm more of a Peter Schiff follower. You're just looking at one aspect of the equation. For that plan to be successful you need retail buyers, many more episodes of "Flip this House", and for nothing else to go wrong with the economy. LoL.<BR/><BR/>http://blog.mises.org/archives/009620.asp<BR/><BR/>That video was the best 1:16 (hour, sixteen) that I spend in the last month.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-43215167501371089672009-03-21T14:24:00.000-04:002009-03-21T14:24:00.000-04:00Will debt consolidation have a negative impact on ...Will debt consolidation have a negative impact on your credit score? The answer is yes, but only in the short run. But if you do it anyway, you will thank yourself later. Your first priority is financial stability right now.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-83270422337154329312009-03-21T14:11:00.000-04:002009-03-21T14:11:00.000-04:00It is like groundhog day.Hope has become a strateg...It is like groundhog day.<BR/><BR/>Hope has become a strategy. <BR/><BR/>Repackage, resell, hope you are not the one that gets stuck holding the losses.<BR/><BR/>Oh an borrow some more money and leverage up. Wow that is change i can beleive in.<BR/><BR/>This should make this whole deal a bit more interestin. Tomorrow, apparently, obama is going to announce a plan to increase oversight of ALL executive pay @ banks, wall street firms and possibly other companies as part of the overhaul of financial regulation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-26488251990918058442009-03-21T14:08:00.000-04:002009-03-21T14:08:00.000-04:00great point: bull case: taxpayers neutral and hedg...great point: bull case: taxpayers neutral and hedge funds win, bear case: taxpayers lose big, HFs lose small, and the fraud that is "the safest investment in the universe, the TSY" is exposed for all to see.Tyler Durdenhttps://www.blogger.com/profile/00165439451205639523noreply@blogger.comtag:blogger.com,1999:blog-4863014635257598503.post-41210977032213949132009-03-21T14:04:00.000-04:002009-03-21T14:04:00.000-04:00nothing in this plan changes the size of the event...nothing in this plan changes the size of the eventual loss. <BR/>if the banks have made really, really bad investments and you are implicitly backing up the banks, then getting private equity in there to buy these investments is good for the banks and good for the taxpayer. if the investments are really, really bad, the private equity will net lose money, thereby taking part of the loss before it hits the bondholder or taxpayer.<BR/>if the banks have made investments that are not really really bad but that are only somewhat bad, and you are implicitly guaranteeing the banks, you need these investments to stay on the bank’s or the government’s balance sheets so that you eventually capture their value.<BR/>if you believe, like me, that the investments the banks made are merely bad but not extremely bad (probably $2T loss rather than, say, $3.5T) then you think this is a very, very bad plan as it allows private equity to extract value from entities with government guarantees.Anonymousnoreply@blogger.com