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Monday "how will bank stocks react to Geithner plan"

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posted on Mar, 22 2009 @ 08:35 AM
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Monday could see traders LEAP on bank stocks........for a time .........sending the banking index up at least 20 % in my opinion........of course they may later sell off.....or at least will not be able to rise much further since they don't really have a comparable income model ( to securitization...YET) which is dead and gone...aside from the banking bailout plan's approach to use the gov't to artificially revive it long enough to transfer the bad debts from the bank sector to the taxpayer/gov't......also this plan may fail to get enough of the debt's of the banks books so banks could resume their fall later...only to be finally temporarily nationalized or perhaps the plan will get enough of the debt of the books....it really depends on wether the plan covertly (i.e it's good for the economy) ... bends the taxpayers over severely or just for a quickee.......by now the tax payer should have a cronically bad back from all this....

but look for a big move monday in bank stocks

and later today i will create a thread on what the Banking sector's next Scam to generate high rates of return (similiar to securitized debt market which collapsed).....may be .......(hint.....derivatives meet carbon credits on wall st. could mushroom )


[edit on 22-3-2009 by cpdaman]




posted on Mar, 22 2009 @ 01:44 PM
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Hard to tell. Not sure how excited any of the "private" companies feel about joining ranks with the government. Hasn't bode well for others recently. Government "rules" now are very open ended in favor of state control. Seem to do what they want, when they want at their leisure.

Either way, the taxpayer takes the big one in the rear again. Who, in their right mind, as an individual taxpayer, would invest money in something that has NO KNOWN VALUE. In the end, this plan will do nothing but serve as a government sponsored pass through on the taxpayers bills (similar to AIG billions being a pass through to the GS, JPM, of the world).



posted on Mar, 22 2009 @ 05:04 PM
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reply to post by cpdaman
 


i forsee at least a 10% drop at close from fridays numbers. we will see what happens. i dont see the stocks going up significantly anytime soon.



posted on Mar, 22 2009 @ 05:15 PM
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I predict the markets drop several hundred points tomorrow. The street has absolutely no confidence in Geitner. This latest business about government oversight of firms who have not taken TARP money is directly socialist and the markets will react.

If you want markets to rally, can Geitner needs to go.

You are already beginning to see Democrats distancing themselves from the administraton and that will continue.

Obama was elected on 11/4/08. It is now 3/33/09 and we STILL have no senior team at Treasury. The markets have been melting down for the better part of 2 years. We were in an economic freefall on election day. The fact that we don't have a senior team is crazy.



posted on Mar, 22 2009 @ 07:35 PM
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well futures are up (70 points on the dow as of 842pm ) but we shall see.

When you have a plan that offers PRIVATE equity to put up only 3% and get's the other 97 loaned (with at least 85% of that loan non recourse) you have many opportunity's to GAME IT for profit.....Yves smith at naked capitalism has a great post about it here...www.nakedcapitalism.com... even NY times Op ed'er Krugman thinks it a scam

one drawback i can see to those who want to game it MAYBE the FEAR that some type of Large Tax may be put on any profits hedge funds or banks may take in the transaction should a citizens revolt arise and the politico's need to throw them some FRESH MEAT....it's sorta funny watching the inexperience of Geithner and OBAMA.....Obama said he wouldn't accept turbo timmy's resignation even if it was offered......scary

also it seems to me in this period of "economic pain" there is too much freedom of press and sheeple focus on this truth coming out compared with the level of deceit and deception and disingenuous crap coming out of the mouth of big financial industry leaders, the fed, and the administration to keep society "nice and sheepishly docile"...and something will have to give soon or their will be a public backlash....

[edit on 22-3-2009 by cpdaman]



posted on Mar, 23 2009 @ 01:06 AM
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Since the dollar is going down, the price if everything else including stocks will go up.

Geitner is a failure. Picking the guy who supervised wall street as they fumbled was a huge mistake.

Bernake is pumping another $1.5T into the banks, that'll cause banks and stocks to go up then inflation will come as the economic prophets said it will. As Bush said in the 'Trillions with a T' interview (paraphrasing), 'We were worried the upcoming Depression would be bigger than the Great Depression'.



posted on Mar, 23 2009 @ 01:18 AM
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The federal reserve is the problem.

End that and we can begin to end our problems.

Until then we will continue to be screwed over and over again.

AIG is just a taste of what the real problem is.....



posted on Mar, 23 2009 @ 02:14 AM
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reply to post by cpdaman
 


Given the sheer volume that some bank stocks are trading at, it wouldn't surprise me to see a 20% increase. Overall the outlines of the newest bailout pretty much favor the investors.. unless there is a move to liquidate assets to jump on the new Government programs, I really cannot see how the general market will end negative.



lso this plan may fail to get enough of the debt's of the banks books so banks could resume their fall later


I don't believe there is nearly enough free capital at the moment to substantially reduce any single banks balance sheets let alone many large banks. If the Toxic Assets are as large as we think, it will take trillions to fully cleanse the financial sector, and the few billions brought in through the "private sector" (this includes foreign Sovereign Funds of course). All in all it will just be a new way for the Treasury to inject billions into the Financial Sector while claiming private individuals are doing it. If we look at what the past bailouts did (nothing) I feel safe to assume there will be no drastic changes for the banks through this program.

The only major good thing that may come from this is a restoration of confidence in the market, and seeing more capital put back into our corporations..

Of course, it all depends on how much the Treasury is willing to put into the program.. and how many more Tbills the Fed will have to buy to support such an audacious plan.

edit to add: Also, CP, I quite agree the fear factor may limit some private investments.. There's a saying, if it's to good to be true, its probably not true. I have no open positions, so I will watch with curiosity.. I am not one to jump into something that has never taken place before, and quite frankly, volatility scares me.


[edit on 3/23/2009 by Rockpuck]



posted on Mar, 23 2009 @ 05:32 AM
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Who's making book and is there a betting limit?

(I'll see your 1 Trillion worthless dollars and raise you a Bazillion-Gazillion)



posted on Mar, 23 2009 @ 06:24 AM
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future's currently up about 210 , though i don't know how much of that is financial's but i would guess ALOT......asia was up pretty big so i think it's a done deal hear unless....something weird happens today.

the gov't could wind up being on the hook to the tune of serveral trillion should this program work.....so even if this market shoots up don't think it is going to HELP the real economy ( and believe me i want it to be helped and i will be the first to write about something that will and is not a give away to banks and investors ).....Day traders are pumping this thing all day....and there is some institutional buying as well which started last week which will be given a lift by this....I wrote about a Bear MKT rally to watch out for and this looks like it will help sustain a BMR for another week and possibly much longer. (i.e late april-early may)..

they are beiing disingenuous and sneaky with the amount of public skin in this plan.....(thanks to the way leverage works and because J6P is getting pissed) .....and when the FDIC which has no constitutional authority (that i know of) to bypass congress and subsidize investors cherry picking assets at prices beyond what these products will fetch should they be held to maturity (we will have to wait and see the figure that the banks are willing to dump these for.......80 cents on the dollar is my guess....and the public will take the big hit a few years down the road. (or possibly sooner).........perhaps with devalued dollars by then.



[edit on 23-3-2009 by cpdaman]



posted on Mar, 23 2009 @ 06:36 AM
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indeeit looks like we may see the biggest rally since oct/nov on this news. i forget how many finance stocks are on the dow, 2 i wanna say? but either way, people seem to be hedging on a huge rally. if the idea is to buy these assets at above value and they crash anyways, the gov takes most of the hit, but the investor is still exposed to loss as well correct?



posted on Mar, 23 2009 @ 11:45 AM
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Originally posted by Rockpuck
indeeit looks like we may see the biggest rally since oct/nov on this news. i forget how many finance stocks are on the dow, 2 i wanna say? but either way, people seem to be hedging on a huge rally. if the idea is to buy these assets at above value and they crash anyways, the gov takes most of the hit, but the investor is still exposed to loss as well correct?


rockpuck read the naked capitalism article that i u2u'd you again.....it is not as cut and dry as the investor still taking a hit........there are 10 ways from sunday to GAME this financial plan as a Win/ win and the comments spell out possible details better than i could......think like a desperate capitalist w/ political leverage...and a history of being able to bend the taxpayer over without blinking an eye and then you will see things from their perspective) i am a positive thinker myself (i think you have to be in life) but there is a great dis-service people do by saying "oh give them the benefit of the doubt with this plan... blah blah blah....you are basically enabling them to take the system down for their own good....usually because people would not want to face the truth (which is depressing in a sense and gives a helpless feeling) that the financial power and the gov't are nearly one in the same now in this country and that they only care about the investor class...even an the expense of the lower classes......now should they be doing this to protect foreign bond holders and creditors to make them whole and keep buying treasury debt and maintain the world reserve currency for the USA.......that would be something i am willing to ponder.......but i just don't know if i am willing to believe that......unless it just enabled them to game the system longer....until it collapses and takes the treasury and currency down with it....because THAT IS THE CLEAR PATH WE ARE ON.



[edit on 23-3-2009 by cpdaman]



posted on Mar, 23 2009 @ 12:17 PM
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rockpuck, et all....one example of possible gaming of this plan (of many)...

private investors could do a smaller percentage of the deals where they pick out some hidden gems....or whatever....and behind the scenes it could be the banks bidding up the other banks bad assets in a huge circle jerk to bid up the prices of the toxic crap. So long as the FDIC gets to decide what financial institution are eligible (hopefully that could be released VIA FOIA).....so until them

example Citi and JPM and GS bids on BOA toxic crap........(and then CITI and GS and BOA bid on JPM toxic crap) and so on....

they bid so high that the price is close to the loans (original mark to fantasy value) par on AAA rated subprime , ALT A loans whatever....

they are only putting in 3% of the total price.....so that when the huge circle jerk is done ......and it comes times for the BANk's i.e investors to try and sell....they wind up taking a loss (compared to the jacked up price they bid for it with 97% taxpayer funds) .....and guess what the taxpayer is on the hook for 97% of the loss and the banks LOSE the 3% they put up to bid....but this is MORE than recoverd by the (much more than 3 %) say 30% they overpaid for the stuff (and thus other banks OVERPAID for there stuff)... and thus got 30% more value for stuff on their books then what it is really worth (regular private markets were willing to pay).... all for a measely 3% hit....heck they can probaly bid it up to higher than what some of them keep it on their books for (should they actually have written it down on their books)....

also should the FDIC exclude banks from bidding up there "peer's" assets in a game of ...we scatch your ass....and then you scratch mine...at the taxpayers expense of course....then the banks WILL find ways to get the hedge funds...private investors to do this for them in return for fee's that make it profitable to them....and/or there could be a number of ways to game it other than this...



[edit on 23-3-2009 by cpdaman]



posted on Mar, 23 2009 @ 12:24 PM
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dow up 320

BKX (ticker symbol) for bank index up 11 percent today



posted on Mar, 23 2009 @ 12:29 PM
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some of the banks are spiking up, in price & volume:

Most Actives NYSE LAST CHANGE

C 3.01 +14.89%
BAC 7.16 +15.63%
AIG 1.41 +11.90%


the surge +308$ has to do with the new toxic asset trading floor/market place, that Geithner announced
:
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'Treasury Presses Ahead With Plan For Toxic Assets'

By David Cho
Washington Post Staff Writer
Sunday, March 22, 2009; Page A01

The Treasury Department will unveil the next step in its financial rescue efforts tomorrow, announcing that it intends to create a government body, called the Public Investment Corp., to finance the purchase of as much as $1 trillion in soured loans and toxic assets from ailing banks, according to sources.

The plan calls for the new entity to combine its resources with the Federal Deposit Insurance Corp., the Federal Reserve and private investors to buy those loans and other assets. But the government will put far more money into the deals and take on more risk than the investors, [...]

-----------------------------------------------------------------------------

my analysis:
This new entity, the PIC (public investment corp.),
is the model for what the USA is going to propose at the upcoming G20 in London...the entity which will supervise the global mess of CDSs, CDOs, dericatives that are clogging the financial system of the industrial world.

and Geithner & President Obama will use this weeks world-wide recovery
in the asian/european/american markets, which rallied at the news of the smaller American 'PIC'
...as a proof that a larger entity, the GSG, (global-supervisory-group) for the global financial system, will have the same response by stock markets and the banking sector stocks in particular.

it should be an easy sell for this NWO brainchild.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~`



Oh, a PS:
for those who would be tolerant of some spicy language,
the 'Rollingstone' magazine has an 8 page >Must Read< article...

www.rollingstone.com...



posted on Mar, 23 2009 @ 12:32 PM
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reply to post by cpdaman
 

Agreed...look at the volume...the big boys are at it again. Buying each other out for pennies on the dollar and making the market look good.
Remember folks...it runs on emotion..not locomotion!!!
I say..let them eat themselves into oblivion....

It is a slanted decline indeed!!!



posted on Mar, 23 2009 @ 12:37 PM
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reply to post by St Udio
 

This new entity......PIC..........scary......
Out of thin air we have a new "entity".....
and just who sits on the chairing committee of PIC?????



posted on Mar, 23 2009 @ 12:40 PM
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uhg.. it makes me head hurt lol.

To finance the purchase of this crap the Us is using the rest of the bailout I assume (100billion from somewhere), and possibly $1trillion down the road if the program works out. to get the funds to operate this scheme (it is a scheme) the Us Treasury will have to auction more debt, and likely the Fed will be buying some of it (perhaps this is why they injected $300billion into the treasury to begin with? .. they also stated at the announcement a further $750 could be added to the Fed's balance in the form of these toxic assets)

If we LOOSE the money, if the mortgages default on the securities backed by them for instance, the US will have made a massive debt, and then essentially threw it away.

Just seems like an awfully big gamble on the Gov's part.. I understand what your saying that the investors can make it out big time on this, but I really cannot fathom how this will drag the Financials into Green -- 10 of the biggest banks of not billions but trillions possibly in "toxic" assets.

I would like to see the Treasury give explicit details about this program, if you ask me they have NOT released enough information.

And I have not even gone into the whole ETHICAL issue here.. I mean.. what if I just stopped paying on my car and wrote a note to my Congressthing and said "hey, buy my bad debt (car) from me for above what I paid for it!" .. The governments intrusion into the economy grows and grows.. *sigh*



posted on Mar, 23 2009 @ 02:00 PM
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so the things to eventually look for are

who did the FDIC approve to bid on these toxic assets (will they allow investment banks to bid each other's crap up and also pick favorites)...

What price is paid for these MBS

should obama in the next 3 years have another homeowner bailout plan which writes down the principal (instead of just interest) perhaps SOME of these Mortgages will be serviced more than what is currently thought (should they be held to maturity) and then perhsps SOME of these things could be worth more than .60 on the dollar....



posted on Mar, 23 2009 @ 02:55 PM
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Excellent article by the Rolling Stones, expressed my own sentiments perfectly (so far on page 2)


AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.



And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).


I know the new program, scheme, thing, what ever is supposed to make us feel all warm and cozy on the insides, but I think I have lost hope for revival.

CDS, CDO and other "toxic" assets have outstanding balances nearly twice the entire market capital value of the NYSE.. and with unemployment still hitting record numbers, these subprime assets will be defaulting continually for the foreseeable future.


The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.


I recommend everyone read St. Udio's link



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