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| User Info | Ready For The Giant Kaboom? in forum [Ticker] | |||
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Genesis Posts: 71391 Incept: 2007-06-26 
KD^2 
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http://market-ticker.denninger.net/archi....
---------- "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
2008-09-16 09:25:47
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Lemonaid Posts: 4776 Incept: 2008-01-20 
Detroit Metro
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Deleted (Wrong forum)
---------- "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." Ludwig von Mises Last modified:
2008-09-16 09:29:39 by lemonaid
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Mo Posts: 5501 Incept: 2007-06-26 
Florida
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Do we have any idea if the public pension funds will implode? I saw a CALPERS guy on the tube the other night insisting AIG had to be bailed out. I don't recall CALPERS trotting anyone out before. ---------- "The World has been cancelled. It doesn't even look like the world. There is one island that is maintained and is said to be owned by the Sheikh and the rest looks like a pile of muck."
2008-09-16 09:32:54
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Etz3l Posts: 9103 Incept: 2007-06-26
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Damn it Karl, You have been sooo right all along. Maybe the clowns will start listening this time? ---------- Treating the symptoms of financial corruption isn’t the same as removing the causes.
2008-09-16 09:39:12
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Stirlingsally Posts: 17 Incept: 2008-04-03 UK
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Wow. I don't contribute but read a lot here. Well done for calling it right all along. I guess it's one of those times where you hate to be right?
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2008-09-16 09:45:42 by stirlingsally
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Genesis Posts: 71391 Incept: 2007-06-26
KD^2
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Yeah.
---------- "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
2008-09-16 09:45:15
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Cash-out Posts: 2343 Incept: 2007-10-23
Live Free or Die - NH
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There gonna be a Gen's trading thread any time soon? Who's in your phonebook? ---------- More prepared than ready.
2008-09-16 09:47:29
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Widgeon Posts: 6522 Incept: 2007-08-30
OK
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A little Update; I think in the wake of FNM/FRE we're needing $3B per day ... wasn't there a "commitment" to supprt them w/ $20B per month? (you know that "estimate" is low).
2008-09-16 09:49:40
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Leraconteur Posts: 7189 Incept: 2007-12-03
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$3B a day is $90B a month. Even BB runs out in a few months with that.
2008-09-16 10:21:04
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Genesis Posts: 71391 Incept: 2007-06-26
KD^2
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Lera, it is coming in from outside the US. The problem is that confidence is being destroyed and they better cut this **** out or the foreigners will cut us off and we're ****ed. ---------- "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
2008-09-16 10:22:12
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Leraconteur Posts: 7189 Incept: 2007-12-03
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I misunderstood W's post. Thought he wrote that the FNM/FRE deal needs $3B/day, not the $20B.
2008-09-16 10:28:00
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R2judge Posts: 302 Incept: 2008-04-13
Burbank CA
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The problem is that confidence is being destroyed and they better cut this **** out or the foreigners will cut us off and we're ****ed. -------------- But they can't cut it out. Human nature won't let them. Greenspan knew in advance what would happen if he repeated 1920's FED policy, but he did it anyway.
2008-09-16 10:29:44
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Bluntfacts Posts: 693 Incept: 2007-10-09 Las Vegas, Nevada
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What a fun way to start the day. A great Ticker; a beautiful Texas Ruby Red g****fruit; and Suze Orman on the NBC Today Show begging people to leave their money in the bank. "You better make doubly sure that you are within the FDIC limits". Dribbly; drubbly; droobly. ---------- "Will someone come on TV and tell the truth about how bad it is". Jim Cramer August 2007. "We can change the focus to a soft blur; or sharpen it to crystal clarity" The Outer Limits 1964.
2008-09-16 10:52:22
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Micronin127 Posts: 607 Incept: 2008-01-21
Swampscott, MA Online
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Biden blamed it on the war!?! Guess he wanted to change the subject.
2008-09-16 11:00:10
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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Gen, what is a level 3 asset and why are they allowed to price them at mark to model or whatever? Isn't it because they don't have an appropriate way to price them? I find it hard to believe that similar instruments are not being traded. And if they weren't are they not going to be liquidated now at LEH. Shouldn't this be enough for banks to get a handle on the value of these assets and value them accordingly. Kind of like the sell 10% and mark the rest of the securities to market idea. Somehow me thinks even though we will have a value - they still will be marked to fantasy. Someone needs to take a stand. Hero or goat someone in DC needs to take a stand. ---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2008-09-16 11:30:15
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Vegasradar Posts: 3955 Incept: 2007-07-11
CA
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Thanks Karl  it seems that a central clearing house is going to be set up for Lehman's liquidation http://www.bloomberg.com/apps/news?pid=2.... ---------- Remember, all Bennie has is dollars. He destroys the currency, he destroys himself. —Karl Filling in the Pieces- an economic overview: http://storage.denninger.net/ppt/teapart....
2008-09-16 11:38:18
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Widgeon Posts: 6522 Incept: 2007-08-30
OK
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I'm saying the FNM/FRE "Deal" adds (MOL) $1B/day MORE to the prior requirement which was $2B per day.
2008-09-16 11:42:03
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Parcontre Posts: 200 Incept: 2007-12-02
Fort Worth
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I wonder if this is a "Buy the rumor, sell the fact." type of day. Karl, you were so on the mark with your 'Kaboom' blog today. I'm still trying to get a wrap on the AIG outlook. On the one hand, if they don't get their $75 bio (or more?), it should set off a series of cascading implosions in balance sheets everywhere. On the other hand, it looks like the only player with that much cash is Uncle Sugar, and US is starting to get stretched (forget the political implications, which aren't very pretty either). This suggests that what we'll see is an attempt to square the circle. Some kind of privately financed lending consortium to bail AIG, but which doesn't really have any backing except for implied support from the Fed or some other government entity. It could be announced after the close, or in conjunction with a rate cut by the FOMC. In any case, I think the market is starting to take on a "Show me!" attitude, so the afternoon pump could be an excellent entry point for buying some put options. Mortgage Dude, read about asset levels here: http://www.wikinvest.com/wiki/Level_1,_L.... ---------- Wherever fate my vessel steers, that image never disappears. In times of joy and times of tears, her song still echoes in my ears.
2008-09-16 13:09:12
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Asianbull Posts: 2184 Incept: 2007-09-03
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The credit default swaps issued by AIG have been detoriating in value for some time. The counterparties should have been writing down the values for some time.
---------- The root cause of all the world's problems is inflation. The only sound money in the world is commodities.
2008-09-16 13:20:55
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Parcontre Posts: 200 Incept: 2007-12-02
Fort Worth
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"Should have been." ---------- Wherever fate my vessel steers, that image never disappears. In times of joy and times of tears, her song still echoes in my ears.
2008-09-16 13:24:51
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Genesis Posts: 71391 Incept: 2007-06-26
KD^2
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AB - HA! What do you think is in those Level 3 buckets?
---------- "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
2008-09-16 13:25:02
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Asianbull Posts: 2184 Incept: 2007-09-03
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I don't think AIG is materially different from ABK/MBI. If you back out the non-credit related insurance subsidiaries(i.e. life,health,property and casualty), all you have left is ABK/MBI. ABK/MBI ultimately resolved their issues by settling with the counter parties for 15-20 cents on the dollar. The policy holders in the other subsidiaries will likely move their policies to other companies once they expire. Those that have claims will be paid from the billions of assets that still remain at subsidiaries. If the risk of AIG was systemic, S&P and others would have also downgraded the counter parties that have claims against AIG. ---------- The root cause of all the world's problems is inflation. The only sound money in the world is commodities.
2008-09-16 13:38:35
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Genesis Posts: 71391 Incept: 2007-06-26
KD^2
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AB you can't do that without permission, and in this case the parent company can be gone after by the counterparties. This is not going to resolve cleanly if they boom - they have $500 billion in CDS outstanding. Way, way bigger problem than Ambac and MBI ---------- "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:
2008-09-16 13:40:45 by genesis
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Jp Posts: 459 Incept: 2008-03-18
The Netherlands Banned
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"and why would AIG blowing up kill the financial system" What do you mean by that: all the banks bankrupt?
2008-09-16 13:40:51
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Asianbull Posts: 2184 Incept: 2007-09-03
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Counter parties do have claims against the other subsidiaries, BUT AFTER the policyholders of the subs have been paid off. Not all counter parties are screwed--just the ones of the credit subsidiaries. This is the way it normally works. IF AIG didn't isolate their different lines of business, than yes, everyone is screwed. ---------- The root cause of all the world's problems is inflation. The only sound money in the world is commodities.
2008-09-16 13:43:57
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