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5. Take action, where appropriate, to restart the secondary markets for mortgages and other securitized assets. Accurate valuation and transparent disclosure of assets and consistent implementation of high quality accounting standards are necessary.
Originally posted by grimreaper797
That is how I see it. My cheapshot was just annoyance that some one as high as FSME was calling for a collapse, when nothing of the sorts is going to happen.
We learned a number of things today - important things.
First - Lehman's CDS and bond auction process told us two things:
Even though they were dirtier than a hobo who hadn't had a bath in a month, they had enough value left in their bonds to wind up positive. Yes, it was less than a dime on the dollar. But it was a positive number. That's all that matters.
There were no fails on the posting of collateral against settlement.
Now for the last year we have been told that:
You can't trigger the CDS, it will cause a systemic, chain-reaction style nuclear meltdown.
These firms are so broke that there is no value left in them.
Both are now known to be false.
This gives us hope - and a path out of the darkness.
Its called "The Genesis Plan" and is what I have proposed.
This plan will instantaneously stabilize the credit markets as balance sheets will be transparent, the CDS monster will be permanently de-fanged, leverage will be returned to reasonable levels and the forcibly
restructured firms will have no debt on their balance sheets and be able to access the capital markets. Firms that would fail once they have disclosed their true liabilities and result in unacceptable insurance program costs will
be recapitalized with a reasonable expectation of the taxpayer not being stuck with the bill. Systemic risk will be removed.
Best of all, it will require zero taxpayer dollars with few exceptions, and for those instances where taxpayer dollars are required the amount of taxpayer risk would be small and well-protected.
This plan is very similar to what Janet Tavakoli proposed on September 25th in an open letter released on the web. Ms. Tavakoli is an internationally recognized expert in these matters, is an adjunct professor ofderivatives, and is widely published.
This and other alternatives must be examined before our nation embarks on what may be a disastrous path.
the international credit crisis has effectively shut off orders from major processors in Canada
Late on Thursday, right after that awful 679-point drop in the Dow, I got an e-mail message from someone I didn’t know, a trader and blogger named Karl Denninger. “We have an extremely serious credit market dislocation about to occur — like maybe tomorrow,” he wrote. He asked me to call him. So I did.
“There is a flight of money from the U.S.,” he said breathlessly. “We need $2 billion a day in foreign capital to operate our government, and that has mostly come from China and the oil-producing countries. Now that money is leaving. We are going to have a complete lockup of the credit markets within 48 to 72 hours. Everybody is trying to push this off to the election. But we’re not going to make it to the election.”
Originally posted by Anonymous ATS
Everyone needs to settle down over this whole event. The media wants you to panic and fear the worst. The worst thing you can do is stir yourself and everyone around you into a frenzy. Don't got out to your local bank and start withdrawing money, don't go out to your local supermarket and buy $200 worth of spam and don't go down to your local gas station with red gasoline jugs intending to fill up. Settle down people...you will be ok.
Originally posted by Relentless
First, to my biggest detractor : You and I have both been around long enough for you to know I have never been a (and did not intend to be now) a panic poster. But at the time I started this post, the world markets were spiralling out of control, as evidenced by the reports that came in Thursday night on this thread. We are in uncharted territory and info KD posts has always been on spot in terms of his economic insight.
I have to tell you if you think the Bailout had to happen, you obviously have not seriously researched the economics or the unconstitutional acts that happened to pass this piece of trash.
Intervention was definately needed, but not what they did. I see no more clear evidence than how the crisis deepened after the backdoor/blackmail tactics used to pass this beast took place.
None of us know what is going to happen, but after your initial cheap shot, which I have no problem with btw, your subsequent posts go on to give explanations of worsening conditions moving forward. Although you also indicate it will get better, your timeframe for this is well beyond my comfort level. I still see no one in a position to FIX this NOW global mess, indicating any real clue on what the solution is.
FYI - we do have this:
He does know his stuff - read the ticker, then read this - short and sweet and amazingly simple. It's all spelled out in the link. I shall just quote the conclusions.
Oh, and let me just clarify ONE MORE TIME. The premise of the Denninger post was the worst case scenario if we didn't act right now to stop the bleeding. I'm sure he will continue to analyze if the actions in the next couple of days are going to impact good or bad, and I for one intend to watch this closely. After how many down days on the markets in the past two weeks and the loses in the trillions on paper because of it, don't give you cause for pause, I am happy for you. I just can't ignore it myself.
I am seeing people hurting so bad, and crime rising in my area in direct relation to state of the economy, people being laid off daily, people who haven't gotten laid off having their hours cut and they can't make ends meet now, and they just don't know what to do. I was chatting with a group of 40 something to 50 somethings yesterday afternoon, just a chance gathering, and they all said the same thing, not knowing whether to laugh or cry. "I feel like I'm 20 years old again!" Why? Because they are all now at a point in their lives where everything they worked for has crumbled, and they are back to living paycheck to paycheck. In fact those that are single are even back to sharing apartments with each other, truly living the way they did in their 20's, except now they don't have the luxury of time on their side for the future, or the optimism of their youth. Two to three more years of this? If they already can't make their rent/mortgage payments and the numbers continue to rise the way they are (which is the only scenario if this recession continues, even as it is now) what do you think this world is going to look like by the time it's over? Certainly not pretty and nothing like I've ever seen in my lifetime.