I didn't write last night because we did the FI Share-A-Thon and got home somewhat late. I was also pretty beat as I have been fighting a cold for about 4 days now. So now I have approximately two days of writing to try and get done.
So I wikied Ben Fold Five yesterday only to find out they were actually a trio- WTF is that all about? Also someone graciously commented that they broke up in 2000 only to reunite for a one-off concert in 2008. Thank you anonymous.
Yesterday's bus ride in was a pleasant viewing experience. Today's was also nice viewing but I lost one of my gloves which has caused me much consternation.
The Share-A-Thon was...interesting to say the least. I got there first with our photo packets and as I walked in of course they had Cher playing. I thought I was in hell and then saw that there was a bar. I had myself a glass (really a plastic cup) of wine, sat down at the table the husband picked which just happened to be in front of the bar. You should also know I took Alka Seltzer Plus Cold medicine after lunch because I swear that is the best thing to kill a cold. So when I saw someone with their sweater tucked in I commented somewhat loudly to the husband. He turned beet red and told me to quiet down.
I think the Share-A-Thon went well because we ran out of fact sheets and almost ran out of photo packets. I sent out emails to everyone who expressed an interest thanking them and asking if they had any questions.
We are slated to do it again in FEB and the husband said for that one I will have to wear a tight tee shirt, tight jeans, my work boots and a baseball hat and ditch the glasses.
So about the current goings on in the tape. Let me reiterate I think Shitigroup is a big negative. The government dumped $45 BILLION into them, took a look at what they bought and decided it was worth more dead than alive. They called MS and said we have an offer you can't refuse since we just let you become a bank holding company to save your own skin. Now you are going to take over SBSH, Shitigroup will end up selling the consumer banking part to some other firm that was allowed to become a bank to save itself (possibly GS). That will leave the i-bank part and the government won't give a shit if that disappears. This is not good for sentiment, the jobless rate or the credit markets.
This morning if you missed it the government said TARP funds will be made available for S-corps. In conjunction with that you had Bernake say that the Fed will aid any financial firm whose failure would increase systemic risk. I think that since most hedge funds are S-corps and the Fed saying the will aid any financial that poses systemic risk means there is a LARGE hedge fund out there who is in serious trouble and would not be surprised to hear about one getting TARP funds. Possibly one that has a b/d operation and sold bonds to the public.
Speaking of TARP funds I think we also saw the first backlash against the whole thing yesterday when California United Bank said thanks but no thanks. The bank got approved for TARP but decided the cost were not worth he limited benefits of the program. they stated they have enough capital and don't need the onerous restrictions TARP would place on them. The implications are that any bank that took the funds had to because they were in serious trouble and did not have the capital. Makes one wonder...
The idea of a bad bank//good bank is being bandied about a lot. If the Fed had just gone this route a year ago my guess is some who aren't with us today would still be around and we could have avoided some of the pain we are no going through but hindsight is always 20/20.
I saw S&P affirmed the AAA credit rating of the United States. HA! Their recent track record has been great so we should all take comfort in that and ignore the huge problems brewing in the Federal Home Loan Bank system. If we ignore it it could go away- NOT.
A lot of economics is expectations and discounting them. There is also that lovely theory called the paradox of thrift. If all consumers start to clamp down because they expect things to get worse guess what happens? It becomes a self-fulfilling prophecy and things get worse. Also if everyone decides they have to start saving, guess what happens- things get worse. Sadly it is what is needed after our huge credit party for the last 20 years or so. If all the news everyone reads and hears is about how bad things are and how worse they are going to get, you know what happens? People adjust their expectations and their habits to prepare for worse times and guess what? Worse times appear.
The thing President Elect Obama should be doing is what Reagan did and that is become the biggest cheerleader for the country and the most confident person about the country. It would not be a big leap as his life is a huge testament to the potential and all that is good about our country. If people keep hearing the leader extol how great the potential is and we can do this, guess what? It becomes a self fulfilling prophecy.
Did not swim this morning but did hit the elliptical in the building gym tonight. The cold is almost gone so I should be fine for the rest of the week at the gym.
1 comment:
You nailed the paradox of drift, the other other funny banking paradox is that we won't get out of the credit crisis until banks trust each other. But that won't happen until there is guaranteed transparency in their accounting and they know who has money and who doesn't. However the government is loathe to enact those rules right now because all the major banks have little to no money. I think your right though, Obama's game plan should be the same as Reagan's make people feel good about being an american and that they can already endured the worst of it. My guess is he's going to go the opposite way till about the third year of his term.
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