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| User Info | FDIC Stupidity - Fire Sheila Bair! in forum [Presentations] | |||
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Genesis Posts: 71400 Incept: 2007-06-26 
KD^2 
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Referencing http://online.wsj.com/article/SB12095118.... and the ticker http://market-ticker.denninger.net/2008/.... ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me Last modified:
2008-04-30 07:27:11 by genesis
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Fidgit Posts: 14065 Incept: 2008-02-18 
AllyBammy
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LOL, this ever-widening spiral of stupidity in DC and NY reads like some surreal satire. Tom Wolfe would be proud. 
---------- I say it's spinach, and I say the hell with it.
2008-04-29 23:09:39
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Bw8472 Posts: 6446 Incept: 2007-06-28 
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It's so stupid it's amazing. Kudo's to her for making sure the taxpayer loses no money, now, although the nuclear winter it puts the economy in will reduce revenues so drastically you couldn't do more damange if you had bills shipped directly to an incinerator. My God the stupidity. Someone needs to take a friggen calculator to Wall Street and start doing some napkin math for these geniuses, because it's shamefull bond traders and investment analysts can't figure out how ****ed we all are. ---------- At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide. ~Abraham Lincoln
2008-04-29 23:14:55
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Patentleathershoes Posts: 7641 Incept: 2007-09-13
Looking forward to PB&J time!
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When Karl comes to DC I'm going to have a special Tickerguy, HPcalculatorman t-shirt printed 
2008-04-29 23:17:55
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Seabassbanker Posts: 2689 Incept: 2008-03-09
HELL IF I KNOW
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ROCK ON GEN
---------- October 15th, 2007 Bernanke: "It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions." LIAR LIAR
2008-04-29 23:20:25
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Rebeltraders Posts: 1370 Incept: 2008-02-26
New Jersey
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Great Job KD!
---------- http://blog.rebeltraders.net
2008-04-30 00:43:47
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Quads4444 Posts: 1282 Incept: 2007-11-09
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I can't read the whole WS article because it is subscriber only, but the teaser says that the loan from Treasury to the homeowner would allow the homeowner to pay down up to 20% of the loan. So on the $200,000 hypothetical loan it seems $40,000 from Treasury goes to the bank. I can see how that would make the bank happy. Sure, they give up being the first lien holder, but they get $40,000 cash on a loan that was probably going to default anyway. And now the homeowner is more likely to pay his mortgage for the next 5 years because the interest on the 40,000 is deferred, bring his payments down. Who gets screwed? J6P because Treasury has to borrow $40,000 at market rates and gets back nothing for the first 5 years. And all this Treasury borrowing puts pressure on interest rates also. Last modified:
2008-04-30 02:14:52 by quads4444
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Mtgspy Posts: 6121 Incept: 2007-10-27
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I was just finished playing video game and was astonished at the ruckus on Sheila Bair of all people, and I think this was totally unworthy of a ticker, video, three lengthy threads, and demands of explanations everywhere. What's the natural disposition towards anger on the govt in TF caused by? There's two element of loss: Default Frequency and Severity. 1. On default frequency the plan can reduce slightly the frequency that people defaulted (that's basically by saying: ok, if you overpay, the part u overpay the rate is Treasury, or call it zero to simplify it ok?) 2. Then on the severity, there really isn't any change. Suppose the original loan is 100k and if defaulted the first lien only gets 80k. The severity is then 20%. Now the government buys the senior 20% position, and if the borrower defaulted anyway, the government loses nothing and the lender loses 20 grand just like before. Further, the lender will not enjoy any capital release either because his risk goes up therefore the entire 20k goes back to shore up capital on his newly created second lien position. It's just an extra rate subsidy just to marginally entice the borrower to stay and not leave the house. In my opinion, based on what I know about typical loan sizes and how much in $ amount the subsidy amounts to, and the sensitivity of default to change in payment, this will reduce the default frequency by 5%. That's all. The severity is like I showed, unchanged. And the lender doesn't mark anything down either until the loan actually defaulted. Another way to force mark down is by having principal forgiveness, that is, the core of debt deflation. The only thing to do now that lenders have made the mistake, is to control the amount of damage the mistake could create. If 15% is attainable, it's still better than 30% loss on the typical mortgage loan. Forgive the balance, cut the rate, etc. Like FNM, and then mark up the "reperforming" loan. .
---------- It sounds antiquated, merchantilistic - until you figured out that I was hoarding for war. Last modified:
2008-04-30 02:36:25 by mtgspy
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Av8rphil Posts: 1817 Incept: 2007-06-26
Platte City, MO
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May want to change the title of the thread to: Sheila from Shield. ---------- "Two things in life are infinite: the universe and human stupidity; and i'm not sure about the universe" -Einstein
2008-04-30 06:45:47
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Killersdad Posts: 351 Incept: 2008-03-27
upstate NY
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Every politicion and appointee should be required to take a basic math refreshor and pass a test on the use of a calculator!!!
---------- They just traded all of America to save a few greedy bastards on Wall Street. Coolhandluke It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Andrew Jackson
2008-04-30 06:46:22
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Av8rphil Posts: 1817 Incept: 2007-06-26
Platte City, MO
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You mean like when you ask the Fed chairman questions you should know that he was Princeton's Econ chairman and NOT the CEO of GS? And then insult him by saying: "Oh you're the other one. Thank you for stating that." Ben should have asked her if she was the Miss Teen USA runner up for South Carolina! 
---------- "Two things in life are infinite: the universe and human stupidity; and i'm not sure about the universe" -Einstein
2008-04-30 07:03:45
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Tchoup Posts: 2613 Incept: 2008-02-01
Online
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Mtgspy - Discussed here: http://www.tickerforum.org/cgi-ticker/ak.... I read it like you do, FWIW. ---------- "It is dangerous to be right in matters on which the established authorities are wrong" - voltaire
2008-04-30 08:11:53
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Jubber Posts: 4242 Incept: 2007-07-05
UK Online
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she's on CNBC later, didn't catch the time though
---------- "War is God's way of teaching Americans geography." Ambrose Bierce "The Emperor realized that the people were right but could not admit to that. He though it better to continue the procession under the illusion that anyone who couldn't see his clothes was either stupid or incompetent." Hans Christia
2008-04-30 08:23:57
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Mtgspy Posts: 6121 Incept: 2007-10-27
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Tchoup, because it is what it is. No reading was really necessary. I don't see a single soul out there even discussing it as it's not a "money" item.
---------- It sounds antiquated, merchantilistic - until you figured out that I was hoarding for war.
2008-04-30 08:33:19
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Coolhandluke Posts: 5635 Incept: 2007-12-19
Out of the box
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This is wrong on so many levels. We have gone from capatilism, jumped over socialism, and now we are heading straight to communism. Soon we may all be living in a government owned house, taking a government owned bus, to our government provided job, so we can earn our worthless fiat government dollars to take to the local government store, so we can all fight over the last loaf of government produced bread! ---------- It's not that I'm lazy, I just don't give a **** anymore.
2008-04-30 09:13:46
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Mdrive Posts: 632 Incept: 2007-11-26
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wheeeee! we're from the federal gov't and we're here to HELP btw, love the HP12C references...i'm sure AOL user Baird doesn't have a clue on how to use it...so *word* killersdad
2008-04-30 13:39:53
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