Comments on Let the damn Economy collapse!

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Re: Bhaskar.ing

So you might be a counterparty? Its all robbery and enslavement of future taxpayers.

posted by Soul_Builder101 on March 24, 2009 at 10:46 PM | link to this | reply

Re: you always have your way to say.....good.

RE 9STAR Thanks!

posted by Soul_Builder101 on March 24, 2009 at 10:43 PM | link to this | reply

Re: riri0322

Thanks!

posted by Soul_Builder101 on March 24, 2009 at 10:42 PM | link to this | reply

Re: FormerStudentIntern

I wish it were even a band aid! It is robbery!

posted by Soul_Builder101 on March 24, 2009 at 10:41 PM | link to this | reply

Re: BC-A

Like you said...even Silverstein wants to be bailed out!

posted by Soul_Builder101 on March 24, 2009 at 10:40 PM | link to this | reply

Re: drohan 254

Thanks!

posted by Soul_Builder101 on March 24, 2009 at 10:39 PM | link to this | reply

Re: soul builder

Thanks TIMMYTALES. I fear it is demons we are dealing with...heartless demons who do not see their own mortality!

posted by Soul_Builder101 on March 24, 2009 at 10:38 PM | link to this | reply

Re: rockingrector

This is what I always supported. Bailing us out would have preserved mortgages and demand. There would be no layoffs. But they outsourced, bailed out and have given bankers all they need to be richer. But, demand will have its say when the whole scheme collapses. No money to spend on our part will cause them to fold. Then we will have no food and will dine on bankers!

posted by Soul_Builder101 on March 24, 2009 at 10:37 PM | link to this | reply

Re: Re: The Amazing TALF "Bait and Swich"

Thanks Corbin...for making it easier to understand how the gamblers operate!

posted by Soul_Builder101 on March 24, 2009 at 10:33 PM | link to this | reply

Re: Economy will get better soon........hope makes it better...

Thanks Sue! I wish it could. The Us has no real production...that is the source of wealth!

posted by Soul_Builder101 on March 24, 2009 at 10:31 PM | link to this | reply

Re: Soulbuilder

Thanks drohan! I don't know what will work. No amount of money can save anyone! The dollar will be crippled because they are just printing money like madness! Up to 15 times our current money supply!

posted by Soul_Builder101 on March 24, 2009 at 10:30 PM | link to this | reply

Re:

If they allowed it to collapse, we could try new stuff to recover...like the Treasury creating its own money that is interest and debt free! But, no. The bankers want control until God smashes their butts!

posted by Soul_Builder101 on March 24, 2009 at 10:28 PM | link to this | reply

Re: callista22001

Its all a plot to keep us as debt slaves. We bail them out, they recover for another round of credit parasitism, buy treasury bills, inject money so that loans could be resumed. So we can borrow now. But they took our jobs away. So Politicians and bankers are backing each other up. Nobody is backing us up!

posted by Soul_Builder101 on March 24, 2009 at 10:26 PM | link to this | reply

I can't wait to read the links you have provided, but am in a terrible hurry right now. So in the evening I must savor them. I must also read the AIG links you left earier, because I am a business service partner to AIG who, in India are a JV with Tata in the life insurance sector, and lately it has taken a lot of beating on account of the AIG dealing, paying millions in bonus to their top officials.

posted by Bhaskar.ing on March 24, 2009 at 9:20 PM | link to this | reply

you always have your way to say.....good.

posted by Star5_ on March 24, 2009 at 8:49 PM | link to this | reply

well said

posted by riri0322 on March 24, 2009 at 3:49 PM | link to this | reply

I myself think these bailouts are band aids.

posted by FormerStudentIntern on March 24, 2009 at 3:49 PM | link to this | reply

They can retreat with the bailout money. That solves that. So it goes. BCA, Bill*s Roost

posted by BC-A on March 24, 2009 at 2:38 PM | link to this | reply

posted by drohan254 on March 24, 2009 at 2:28 PM | link to this | reply

soul builder

When are they gonna start bailing us (the little people) out?

posted by TIMMYTALES on March 24, 2009 at 1:49 PM | link to this | reply

Yes! A better idea would be to take all those billions which are being used to bail out the banks, and diivide them equally between every adult in the country. Then we'd all start spending the extra cash and the economy would get going again and the banks could actually earn their money. How about that for an idea??

posted by Rockingrector_retd on March 24, 2009 at 12:46 PM | link to this | reply

Re: The Amazing TALF "Bait and Swich"

Bank X has bad assets (mortgages) priced at 80% of their original selling price. They are now only worth 20% of that price. Hedge funds don't want to touch them. So we come up with TALF. The government backs the hedge fund's purchase of the assets at the 80% price.....the banks make big money. The hedge funds don't lose because the taxpayers are covering the inflated price.....

The hedge funds will default on all of the covered portions. But the big-hearted banks want tosave the day by buying back the very same assets at 20% of what they sold them to the hedge funds for.....the hedge funds get to pocket millions in fees for handling the transactions....the banks now have proprty back at market value and hold on until they start unloading (selling) them as the real estate market begins to rise again.......they get to, in black jack terms, double down on their winnings...

The losers......we taxpayers......

posted by Corbin_Dallas on March 24, 2009 at 12:00 PM | link to this | reply

Economy will get better soon........hope makes it better...

posted by Star5_ on March 24, 2009 at 7:16 AM | link to this | reply

Soulbuilder

let me return my money before it will collapse ..at least i will have a white coin for the black days

posted by drohan254 on March 24, 2009 at 5:32 AM | link to this | reply

The Amazing TALF "Bait and Swich"

The greatest bait and switch of this generation in all its visual splendor. As a result of the TALF's non-recourse/non-margin nature, a hedge fund X can buy Bank X's MBS Portfolio which is marked on the bank's books at 80 cents on the dollar (but has a market price of 20 cents) for the marked price with a 3% equity check and TALF filling the balance. A day later, Bank X repurchases the portfolio from hedge fund X at the 20 cent market price, and pays HF X a $5 million fee for the "trouble." The way this would be effectuated is that at t+1, the Hedge Fund decides to run a loss model via TREPP of what have you, and, lo and behold, realizes the loan will default in 1 day (assumptions and outcomes can be easily fudged) and threatens to default on the entire TALF portion. The key word here is non-recourse: the HF would not be liable for anything over its first-loss equity component. In the case of a declared portfolio default, the TALF portion would have to be marked at pure market value, and taxpayers would get stuck with as close to a donut as possible. So here is Bank X running back to the rescue, offering to buy back the original portfolio at market price (even a 1 cent premium would make it politically palatable), in this case 20 cents. For the sinister minded, it become immediately evident, why hedge funds, once loaded up on these investments, would have an incentive to push down the value of the entire portfolio complex, especially if they, wink wink, bought protection via CMBX or other derivatives. The recent spike in CMBX spreads (massive buying pressure) may be one indication of just how hedge funds might be positioning themselves.

Once purchased the bank waits for the portfolio to appreciate to 50 cents on the dollar by 2014 (although the appreciation is not necessary and is a best case example of how the bank would fare if the market does pick up). Hedge fund X takes a 75% loss on its nominal equity stake but more than makes up in transaction fees. The TALF portion takes a 75% loss with no recourse and no margin to fall back on.

As a result Bank X takes no writedown now, and in 5 years may book an equity profit of as much as $25 million (net of transaction fees paid to the Hedge Fund X), while Hedge Fund X books a profit of $3.2 million for one day's work...

Meanwhile the taxpayers is screwed, yet again.......