Investment strategies in the current economy

[Texas Contrarian]

Originally Posted by Big Juan

CM,
The reason they went up is OUR money was used to clean their balance sheets. No debts left money to invest. The TARP aided banks have been the largest traders of stocks, commodities, etc.

When the FinReg details first came out, banks were certainly relieved, as some investors thought the bill would be worse for them than it actually was. But, Juan, you're absolutely correct that TARP-related infusions have enabled the big houses to fatten up positions handled by the proprietary trading desks, and this has been happening for some time. And as I noted earlier in the thread, QE also serves as a sort of backdoor de facto TARP. It's now widely expected that the latest installment of QE will pump about $100 billion/month for an extended period of time.

According to a new report, just since the first of the year trading assets at these institutions have risen from about $250 billion to about $430 billion, with $50 billion of that coming in the last month alone. It therefore will be no big surprise if the Fed manages to levitate asset values -- equities, bonds, commodities, etc. -- a little higher. In my opininion, fundamentals don't otherwise support an almost-1,200 S&P.

Originally Posted by Big Juan

Want to really be disgusted? Check who the largest shareholders are today of those bank stocks.

Not only that, but just think about how much is still going into the bonus pools. No shortage of stuff to get disgusted about!

[WTF]

Originally Posted by CaptainMidnight

But WTF, did you notice that Your Heroes in the administration and congress did little to prevent massive abuses and little to lower the risk of more financial crises? They did virtually nothing about Fannie and Freddie, TBTF, or the ability to play "heads we win, tails taxpayers lose" games with other people's money. Moral hazard lives on. And the too-big-to-fail banks are now even bigger than they were before the crisis began!

.

They ain't my hero's!
Damn if I do not agree with everthing you just said.

They did nothing except shift toxic assets from the private sector to the public. Chris Dodd must have a sweetheart deal lined up after retirement. That piece of crap banking reform was a sham.

PJ will now come on and say how TARP was a good deal! Pleseeeeeeeeeae. Oh how I wish I could sell the government ever bad deal I ever made!

Originally Posted by CaptainMidnight

Did you also notice that bank stocks actually went up when details of FinReg came out? When Wall Street firms hire lobbyists, they're pretty good about making sure they get their money's worth. And they're pretty good at hedging. They buy congresspersons and senators of both parties. These tend to be honest politicians, too. When they get bought, they stay bought!

That, along with the fact that we seem intent on continuing our fiscal kamikaze mission, is why I said earlier that we're just building a bridge to the next crisis, not to a more prosperous future.

That bridge leads to China! They are the big winner in this mess. We police the world so they can get on their feet and kick us in the nuts! We are their number onre junkie, once we are broke they'll leave us like an old rich man dumps his high school honey for Julia Roberts in Pretty Woman! As Roy would sing Ahhhh Merrrrcy.

[Texas Contrarian]

Originally Posted by WTF

Damn if I do not agree with everthing you just said.

Damn, WTF, you better quit saying stuff like that. I think that's the second time in this thread you've agreed with me.

If you keep it up, people with porcine avatars are likely to start thinking you're stupid!

[WTF]

Originally Posted by CaptainMidnight

If you keep it up, people with porcine avatars are likely to start thinking you're stupid!

They call me WTF Gump!

[discreetgent]

Originally Posted by WTF

PJ will now come on and say how TARP was a good deal! Pleseeeeeeeeeae. Oh how I wish I could sell the government ever bad deal I ever made!

Lord help me but I'm going to channel my inner RK here. For the purposes of this post work with the assumption that all agree that TARP created a moral hazard. That being said: given the situation at the time what would you have done?

[WTF]

Originally Posted by Big Juan

It is all risky. You just need to understand it is all risky. Just like getting geeked about the provider's photos and come game time ......... the cute crooked smile is a snaggle tooth that leaves a nick on the Juan!!!

Damn not right, but what are you gonna' do?

Finally, some damn good advice 'round these parts!

Where ya been hiding at Big Juan? We need more straight shooters.

[Big Juan]

Originally Posted by WTF

Finally, some damn good advice 'round these parts!

Where ya been hiding at Big Juan? We need more straight shooters.

I'm just about 2 hour flight south of you pard. The edge of the hurricane is just about to leave my ass alone. Little fishing, little golf and as much latina booty as you want.

You get tired of the 'inaccurate' intell too? I find Htown boards reliable and have been burned by Dallas and SA intel. I mean c'mon, cute lil' spinner with crooked smile should have read 'skanky crack whore with chipped front tooth and no teeth on left side, damn good with photoshop'.

Sad, but true story. When I made her say 'Yes Papi', it had a whistle to it!!!!!


'Stay fuckin' crazy my friend'.

[WTF]

Originally Posted by Big Juan

I'm just about 2 hour flight south of you pard. The edge of the hurricane is just about to leave my ass alone. Little fishing, little golf and as much latina booty as you want.

.

Nutn like a hot Latina booty to clean your golf balls

[charlestudor2005]

Originally Posted by discreetgent

I'm going to channel my inner RK here.

Now that's a REAL SCARY thought!!!!

[Big Juan]

Originally Posted by discreetgent

Lord help me but I'm going to channel my inner RK here. For the purposes of this post work with the assumption that all agree that TARP created a moral hazard. That being said: given the situation at the time what would you have done?

The severity of the situation was a ruse. The assets Bank of America had at the time was and is extraordinary. Pardon the mojito assisted spelling. The non-performing assets were caused by the Barney Frank 'ACORN' crap. Very unpopular to pick on his gay ass, but he should br tried for treason.

It should have been handled like we always have (the strength of our economy) by foreclose on the non-performing loans, price them at the current market levels, sell them, hell finance them back under sound terms and the losses would have been spread out over numerous entities, not just the bank.

Now, most of the ACORN loans had no 'real' mortgagae insurance, even though the borrowers paid in to a fund called that, because what investor would buy loans where borrowers had no ss #'s for Christ's sake?

So we were told they would fall, AIG could go down, etc. etc. etc. It is a scam my brother.

Case in point, then I have to find juanita the ball washer (thanks WTF). Miami came up last year as the first worst RE market in the country according to the press. Market down 20% in short time. (avg 30% appreciation for almost 5 straight years). Governor refused federal help!!! Did you hear that? Gov refused their money, strings bs, etc. Almost exactly 8 months their market was 90% corrected. The financial institutions foreclosed, brought pricing to market values, inventory sold.

But no, we are fed fear of collapse, fear we are going to be in soup lines, etc. when the gov't pricks created this. Too many people stealing to not take the funds, blame Bush and shred the damn docs. I guarantee you Countrywide closed shop so damn fast, because they did not want anybody with any sense looking at their books. I have never seen any corporation that large close doors so quickly. Took our eyes off their books and put is in fear of ruin.

Now the current pricks are the ones to fear, but I have to believe we are not all cattle and will vote them out. Sure, they are on both sides, but.... here it comes........
The good Lord made shit float for a reason. Watch, those turds will surface.

[discreetgent]

Alas it were so simple. BoA was likely just fine, as was Wells Fargo, and after the first scare Goldman and Morgan Stanley. OTOH Neither Citigroup nor the governement ever allowed a close examination of Citigroup's books but an argument could be made that Citigroup was on the verge of being insolvent at one point in Fall of 2008. And of course Merrill had no chance at surviving.

[pjorourke]

Word!

[WTF]

Originally Posted by discreetgent

Lord help me but I'm going to channel my inner RK here. For the purposes of this post work with the assumption that all agree that TARP created a moral hazard. That being said: given the situation at the time what would you have done?

TARP did not create moral hazard. Moral hazard created TARP.

Read ''FreeFall'', by Stiglitz, pages 121-135.

In summary, more TARP money should have went to small and community banks instead of the investement banks. . They lend to small and medium size business. But please read those 14 pages if you really want to know what should have been done. On such a complex question why would anyone ask WTF. WTF he would have done? haha I would have read a shit pile of books and not done the same thing we always do that seems to get us back to this exact same problem.



Some (PJ) will say there was a liquidity problem is all. If we taxpayers buy their toxic assets at over inflated prices then the banks pay back their TARP loans PJ seems to think that is a great deal. We have no idea WTF we bought is truly worth. Shareholders should have lost money, management heads should have rolled. That is what happens when a company makes bad decisions.

[WTF]

Originally Posted by Big Juan

The severity of the situation was a ruse. T

IDK if it was a ruse but it was sold like war and WMD's. So I agree with your premis. We could have wound our way out of the mess the bankers got us in....and it was bankers aided by lobbiest that worked congress that got us here. Not government making banks do a fucking thing they did not want to do. If the government could make banks loan money they would have, they can't and the banks won't without being able to dump it off. They are much more prudent with out moral hazzard.

The bankers that sold us on fear benefited the most! Why would we ever allow that to happen. That is why the Dems are going to get thrown out of office. The healthcare reform just reshuffled the deck....this TARP bank bailout changed the game.

The bankers love the healthcare bs. Shifts blame.

[discreetgent]

It is a strange environment out there http://www.nytimes.com/2010/10/26/bu...26bond.html?hp