World economy talk

**uls** · February 5th, 2009 04:12 PM

Goldman Sachs received TARP funds last year

But with the conditions that come with receiving govt money, it's kinda bad trip no?

http://www.bloomberg.com/apps/news?p...EZM&refer=home

Feb. 4 (Bloomberg) -- Goldman Sachs Group Inc. wants to repay the $10 billion it got from the U.S. Treasury last year to signal the firm is healthy and to escape limitations that were imposed with the money, Chief Financial Officer David Viniar said.

“Operating our business without the government capital would be an easier thing to do,” Viniar said today at a conference hosted by Credit Suisse Group AG in Naples, Florida. “We’d be under less scrutiny and under less pressure.” He added, “It would send a very good signal” if the firm could repay the money.

**emanzano** · February 5th, 2009 04:12 PM

Originally Posted by uls

haha

i'll turn down TARP funds

short the stock

buy put options

let the bank fail

hehehe

you skipped a step bro:

turn down the tarp

short the stock

go to jail

get your a$$ reamed

**uls** · February 5th, 2009 04:18 PM

hehehe

**tidus1203** · February 5th, 2009 04:19 PM

No don't short the stock or buy put options as that could be questionable, just resign. No one goes to jail for failing or making bad decisions

But for sure you would have more money without the government bailout than if you did receive the bailout. Knowing human nature its very possible things like this happen. No incentive, no work!

**uls** · February 5th, 2009 05:20 PM

ok i'll resign

then i'll call up all my hedge fund friends and tell them the true state of the bank

they will use the information to make bets on the bank,

and we have an agreement they will pay me a percentage of earnings for the tips

**CVT** · February 5th, 2009 07:25 PM

^^^ I am also 50-50 on that move. However, we all know that a free-wheeling economy falls hard like what we're experiencing now... I think that I'd like to give this model a try....

7404:laundry:

**tidus1203** · February 5th, 2009 10:04 PM

The European Central Bank (ECB) has kept its benchmark rate at 2.00%. But the Bank of England cuts its rate to 1.00%. The way I assess the world economy, among the big economies it seems the UK is the biggest dog and not the US.

I have always had respect for the ECB. Some say they are slow, but I disagree I think they are being practical and are taking into account if interest rates can really help. Might as well leave some worth on your currency.

**uls** · February 6th, 2009 12:43 AM

New jobless claims jump more than expected to 626K
AP

WASHINGTON – New jobless claims jumped far more than expected last week in an already dismal labor market, and there's no relief in sight for workers as mass layoffs persist.

The Labor Department reported Thursday that the number of laid-off workers seeking jobless benefits rose last week to a seasonally adjusted 626,000, from the previous week's upwardly revised figure of 591,000. The latest total is far more than analysts' expectations of 583,000.

People lose jobs, can't pay bills

US credit card delinquencies at record high
http://www.ft.com/cms/s/0/b1e100fe-f...nclick_check=1

Payments at least 60 days late rose almost half a percentage point last month to a record 3.75 per cent, said Fitch. Credit card lenders also wrote off loans to delinquent borrowers at close to record levels, and such “charge-offs” were expected to breach records in the coming months.

Michael Dean, managing director at Fitch, said: “US consumers continue to struggle in the face of mounting pressures on multiple fronts from employment to housing to net worth.”

Late payments on credit cards crept higher throughout 2008, said Fitch, but signs of borrower stress rose in the fourth quarter as late payments surged by 18 per cent. Charge-off rates in January were 40 per cent higher than a year ago at 7.5 per cent and were expected to approach 9 per cent during the second half of 2009.

Late payments and defaults on credit cards have been closely linked with levels of unemployment, which have risen dramatically. Non-farm employment fell 524,000 in December, contributing to the biggest decline in payrolls on a three-month moving average since 1945. The unemployment rate jumped to a 15-year high of 7.2 per cent, from 6.8 per cent in November.

Rising late payments and defaults on credit card loans would hurt the performance of securities backed by credit card receivables, Fitch said, but downgrades would be limited in the near-term because of lower funding costs. Securities backed by credit card receivables have rallied in recent weeks, in part because of such lower cost funds, and as investors look forward to the launch of a new Federal Reserve programme to lend against such asset-backed securities.

more bad loans for banks

banks tighten credit

economy deteriorates

more job losses

more people can't pay bills

more bad loans for banks

banks tighten credit

economy deteriorates

Egg, Chicken, Egg, Chicken

**tidus1203** · February 6th, 2009 08:55 AM

Hahahaha I always like how you post, short but has impact!

Anyway, the government's employment numbers for January later tonight. Expect mayhem!

**Monseratto** · February 6th, 2009 09:07 AM

Bad deal that is still going really really bad....Jumping into a deep pool with no water really hurts.

Bank Of America Tumbles on Nationalization Worries

Despite a report that Bank of America’s board is backing the bank’s management and its strategy, BofA shares fell below $5 for the first time since 1990 on speculation that spiraling losses at newly acquired Merrill Lynch might lead to government control of the largest United States bank, wiping out shareholders

Shares fell more than 11 percent, the fifth straight decline, as rumors persisted that mounting losses on mortgages and corporate loans might lead to the nationalization of the Charlotte, N.C., lender, or even the ouster of its chief executive, Kenneth Lewis. Bank of America and Merrill Lynch ended 2008 with $2.49 trillion of assets.

Mr. Lewis has come under fire from shareholders as the once-lauded Merrill Lynch acquisition has unraveled, leaving Bank of America dependent on government support to battle mounting losses and evaporating shareholder value.

“This Merrill Lynch deal has become a fiasco for Ken Lewis,” Ralph Cole, portfolio manager at Ferguson Wellman Capital Management in Portland, Ore., told Reuters. “His whole reason for grabbing Merrill Lynch was getting the brokers, and what he ended up with was gigantic write-downs from the part of the business he didn’t even want.”

Mr. Lewis had coveted Merrill for its brokerage force, often known as the “thundering herd,” which he called the “crown jewel” of the roughly $19.4 billion takeover.

**tidus1203** · February 6th, 2009 09:32 AM

Hahaha with the Dems in control banks being nationalized is not a far fetched scenario. The populists are in control and they would do whatever it takes just to ease the pain without any consideration for the future. Goodbye good talent, goodbye risk taking and reward, and hell goodbye to prosperity.

**Monseratto** · February 6th, 2009 09:43 AM

QUOTES for the day.

"The economy is suffering. Things are getting worse, not better. Everything is weakening at a faster pace than we have ever seen. You don't need to embellish many words about that." - Brian Fabbri, North America chief economist at BNP Paribas in New York.

"Each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes." - US President Barack Obama.

"The global economy is in the throes of a severe and synchronized downturn." - Bank of England statement.

"If the jobless ranks continue to rise, it will be difficult for OPEC to do much to keep oil prices from falling further." - Phil Flynn, an analyst at Alaron Trading in Chicago.

http://business.inquirer.net/money/b...sis---0000-GMT

Dows reaction is still on sentiment...

The Dow industrials rose 106.41, or 1.34 percent, to 8,063.07. The Dow fell as much as 111 points early in the session. The blue chips hit their lowest level during trading since Nov. 21. Many investors hope the November lows will hold as the lowest point in the stock market's decline from its October 2007 high.

I miss Peter Schiff...

**uls** · February 6th, 2009 10:34 AM

++++++++++++++++++++

**uls** · February 6th, 2009 10:35 AM

Merrill was supposed to fail like Lehman in Sept 2008, but the powers-that-be couldnt allow 2 major financial institutions to fail in a matter of days... it would be Armageddon

The powers forced B of A to buy Merrill

B of A didnt have time to perform due diligence

Merrill was hiding really bad stuff

the bad stuff came out December 2008

B of A wanted to back out of the deal but the powers told B of A that if they backed out and needed help later on, their executives and directors would be ousted

So B of A went ahead with the deal

Now B of A is in deep sh*t

**tidus1203** · February 6th, 2009 10:40 AM

That is what you get for interference with the free markets. Even supposedly companies in better standing like BOA is now in the dumps... Basta when it comes to money, the government is the dumbest entity.

**uls** · February 6th, 2009 11:01 AM

yep

and i think BofA made a bad decision buying Countrywide

they overpaid for Countrywide

**tidus1203** · February 6th, 2009 07:17 PM

You want pessimistic. Read this from Marc Faber (Dr. Doom). Natawa ako sa kanyang "Robert Mugabe's School of Economics"

http://www.cnbc.com/id/29047443

**Monseratto** · February 6th, 2009 07:55 PM

And heeere's Peter...

[ame=http://www.youtube.com/watch?v=7xCjhec5ygo]Peter Schiff on CNN World February 1st, 2009[/ame]

Note: The Dow is now even lower now than what's on the video...

**Monseratto** · February 6th, 2009 08:28 PM

More from Peter...again.

[ame=http://www.youtube.com/watch?v=ASXXyVBWFgU]Peter Schiff On Countdown 2/5/2009 Part 1/3[/ame]

[ame=http://www.youtube.com/watch?v=ypRRdbgLXD0]Peter Schiff On Countdown 2/5/2009 Part 2/3[/ame]

[ame=ttp://www.youtube.com/watch?v=15uB_6nyslE]Peter Schiff On Countdown 2/5/2009 Part 3/3[/ame]

Would be nice to see what happens a few months down the road...

**tidus1203** · February 6th, 2009 09:26 PM

Tumpak si Peter Schiff. This recession is a product of the free market. The free market is telling people to start savings that's why the free markets is tightening credit, creating job losses. These conditions create the impitus for saving. But yun na nga the government wants YOU to continue spending even if you don't have money. The free markets has a self-correcting mechanism so it also means that we can't always be down forever too. The market will correct itself and go back up again but we have to face the music at present for the financial sins of the past.

Peter yep he had a bad year. But who didn't? Only short sellers were winners last year but Peter's fund concentrates on long term investing so I doubt if their investment rules allow them to short. At least he won't come to the government asking for a bailout!

And si Liz Claiman pala nasa Fox Business na. Kaya pala di ko na sya nakikita sa CNBC. Wala kasing Fox Business dito sa Pilipinas eh...

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