JerichoHill
Bedrock of Knowledge
The folks going around now were hired a year or two ago to check homes and locations via GPS. Theyre almost done with their work. They check things like cottages, basement apartments etc.
nvm
- Thread starter xarthaz
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Narz
keeping it real
I hope I can get a job with the census. I got one in the year 2000 but I backed out at the last minute because I suffered a bad bout of depression & couldn't function well enough to do the job. Back then they paid almost $20/hour.
Ziggy Stardust
Absolutely Sane
Ziggy Stardust
Absolutely Sane
I guess one fuels the other. This might be an indication that more money will be spent in the near future. Maybe it's just putting out good news about the economy because people want to hear good news about the economy. But in these matters I am reduced to guesses by default, so maybe you're right and it doesn't mean anything.
Snorrius
Librivorator
We are actually at the final stage of dollar finance system: The Last Great Bubble of US Treasuries which is used to finance USA's outstanding deficit. As soon as it bursts, it will be the end for dollars.
PiMan
Deity
What is the current timeline for your doomsday predictions? And did you really originally think there would be this much improvement in this "bubble"?
Employment figures have been improving (negative slower), banks have largely stabilised, much of the private debt that started this mess has already been absorbed by the banks. What will set off the last part of the crash?
Employment figures have been improving (negative slower), banks have largely stabilised, much of the private debt that started this mess has already been absorbed by the banks. What will set off the last part of the crash?
PiMan
Deity
I'm also wondering about what happens in his doomsday scenario to western style economies that haven't crashed. Poland, South Korea and Australia have all avoided recession (as far as I have heard for Pol and SK). Australia I know, has very strong banks and very little government debt.
JerichoHill
Bedrock of Knowledge
I haven't seen anything to indicate that from the data sources I typically pull from. Other than some very small banks, no major banks are anticipating collections issues.
At least in the scope of unsecured loans to private businesses, right? Major banks are anticipating more credit card defaults.
JerichoHill
Bedrock of Knowledge
Yes, credit defaults are expected to rise, but it is not likely that these are not priced in currently or take anyone by surprise. I am not seeing / hearing from my colleagues over at the SEC / Treas worrying about that.
(There are still worries, just not bank defaults)
(There are still worries, just not bank defaults)
Narz
keeping it real
Slightly off topic, I owed Citibank $4,800. I ignored them for about a year after they f-ed me over by lowering my credit limit without telling me & then charged me four separate overdraft fees (about $35 dollars each, IIRC) & locked my account (also without telling me) so when I got an automatic check cashed it bounced leaving me completely broke for over a month.
Finally I picked up the phone to one of their spam calls & it wasn't them for a change but instead a private collection agency. They offered to eliminate my debt for $2,697.20 (something like this). Obviously I called Citi first to make sure they were legit, then I called back and offered them $2,000. They took it & now, except for a separate $950 I am debt free.
Follow my plan at your own risk.
Finally I picked up the phone to one of their spam calls & it wasn't them for a change but instead a private collection agency. They offered to eliminate my debt for $2,697.20 (something like this). Obviously I called Citi first to make sure they were legit, then I called back and offered them $2,000. They took it & now, except for a separate $950 I am debt free.
Follow my plan at your own risk.
They sold your loan Narz. Those guys buy receivables around .10-.15 cents/dollar. They made out fine on your deal.
I've mentioned coincident-to-lagging indicators. It's to GDP as book to bill is to the semiconductor biz.
We've posted consecutive lows (89.3)and have clearly put in a bottom. This data goes back to 1960 and recessions ended within 2 months 100 per cent of the time. The indicator has almost always bottomed at the lows in the S and P 500. Great timing and confirming barometer.
I've mentioned coincident-to-lagging indicators. It's to GDP as book to bill is to the semiconductor biz.
We've posted consecutive lows (89.3)and have clearly put in a bottom. This data goes back to 1960 and recessions ended within 2 months 100 per cent of the time. The indicator has almost always bottomed at the lows in the S and P 500. Great timing and confirming barometer.
Narz
keeping it real
Yeah, I probably should have offered them less, maybe $1,500.
Gee, I wonder why there isn't any worry about bank defaults.
What caused the lack of default worry from Sept 08 to March 09?
Surely it couldn't have been the Billions and Billions poured into the financial system by the government in the form of cash, loans, and guarantees, and a zombie CDS clearinghouse...no it was the fundamental soundness of the banks that shone through.
Rashiminos
Fool Prophet
Late August. Obama and Crew resuscitating the zombie for a little while. The private debt has been swept under federal rugs, and commercial real estate.
They're resuscitating it in the dumbest ways possible so that it is encouraging a flight to yield before anything has actually been fixed thus ensuring that there will be more pain to come.
Integral
Can't you hear it?
Tracking the TARP
I bring this up for a few reasons -
1. It's interesting to see the magnitude of the TARP payments to specific financial institutions.
2. This brings out the difference between money spent, money not yet spent but committed to a specific program and money allotted to use but not yet committed to any program. We've had a few threads/posts before about how the Fed and/or Treasury is spending '$7 / $9 / $LOTS trillion' on various programs. Here's an example of how that actually works. The government has allotted $700B to the TARP, but we have only spent $435B with another $210B that is ready to be used in specific programs. The TARP funds can be usefully split into three groups: $435B spent, $210B not spent but committed to various programs, and $55B allotted but not committed to any program. It's a good idea to keep these three general categories (again: spent, committed but not spent, allotted for use but not committed) in mind when considering recent Federal outlays. The fiscal stimulus can be analyzed in a similar manner.
Most of the regulars on this thread already think in this way, but I thought it would be good to bring it up again.
The TARP continues to grab headlines, so I thought it would be useful to summarize how the TARP money has been used to date.
As you may recall, the Troubled Asset Relief Program (TARP) created a pool of $700 billion that the Treasury Secretary could use to stabilize the financial sector. The following chart summarizes the TARP transactions that have already occurred (dark blue) and any additional funds that Treasury has announced for each program (grayish):
As the chart illustrates, Treasury has announced plans for about $645 billion of the TARP money, of which $435 billion has been committed to specific transactions. But the most interesting facts involve the specific programs:
* Three firms — AIG, Bank of America, and Citigroup — account for the majority of TARP investments in the financial sector. Those three firms have received $165 billion thus far, more than the $149 billion received by all other financial firms.
* The comparison is even starker if we consider repayment. Banks are planning to repay about $70 billion in TARP investments (a bit less than $2 billion has already happened, with another $68 billion under consideration by banks that “passed” the stress test). If that happens, then the outstanding TARP investment to the rest of the financial sector will fall to $79 billion, only slightly more than what AIG has received by itself.
* The auto industry has been the other major TARP recipient, with transactions now totaling about $85 billion. These amounts have primarily gone to Chrysler and GM (both the pre- and post-bankruptcy versions), but the auto suppliers and GMAC have also been recipients.
* As yet, the other TARP programs have received relatively little money from TARP. Efforts to support consumer and business lending through the Term Asset-Backed Securities Lending Facility (TALF) have received $20 billion of TARP money thus far, and $15 billion has been allocated for efforts to encourage modifications to home mortgages.
* The other two programs have yet to get off the ground. One program — purchasing loans backed by the Small Business Administration (SBA) appears to be in progress, while the Public-Private Investment Partnership to purchase troubled assets has experienced some well-known difficulties.
Disclosure: I have no investments in any TARP recipients.
A Note on Data and Sources: The official web site for TARP has a wealth of information, including TARP transaction reports, testimonies, contract terms, etc. The New York Times also has a page tracking the program: “Tracking the $700 Billion Bailout” as does ProPublica. You will find small differences in numbers between these sources, depending on when they were last updated and how they categorize certain TARP programs (e.g., $25 billion of the intended PPIP would be routed through the TALF). There are also subtleties about the difference between money that Treasury has actually spent vs. guarantees that it has provided. For example, Citigroup has received $45 billion in cash and has received a guarantee worth up to $5 billion. So I report Citigroup as receiving $50 billion.
I bring this up for a few reasons -
1. It's interesting to see the magnitude of the TARP payments to specific financial institutions.
2. This brings out the difference between money spent, money not yet spent but committed to a specific program and money allotted to use but not yet committed to any program. We've had a few threads/posts before about how the Fed and/or Treasury is spending '$7 / $9 / $LOTS trillion' on various programs. Here's an example of how that actually works. The government has allotted $700B to the TARP, but we have only spent $435B with another $210B that is ready to be used in specific programs. The TARP funds can be usefully split into three groups: $435B spent, $210B not spent but committed to various programs, and $55B allotted but not committed to any program. It's a good idea to keep these three general categories (again: spent, committed but not spent, allotted for use but not committed) in mind when considering recent Federal outlays. The fiscal stimulus can be analyzed in a similar manner.
Most of the regulars on this thread already think in this way, but I thought it would be good to bring it up again.
Citi's TARP preferred (and some private non cumulative preferreds) are being converted to equity.
On the other hand, B of A raised equity in a secondary offering, sold more China Construction Bank, will sell 1st Republic Bank (redundant with US Trust) and will convert some private non cumulative floating and high coupon preferreds (IE their 8.625% preferred which has been a home run investment and totally telegraphed in both Citi and B of A's case btw) into equity instead of converting the 8% non cumulative TARP preferred. I would expect B of A to repay TARP within 12 months since their earnings power is north of $40 billion pre-tax.
I can't see any reason why many would participate in PPIP with market to market changed.
On another note, Citadel Capital is having a field day hiring away investment bankers from these firms right now. Expect more small to mid size privately held investment banks to continue this trend.
On the other hand, B of A raised equity in a secondary offering, sold more China Construction Bank, will sell 1st Republic Bank (redundant with US Trust) and will convert some private non cumulative floating and high coupon preferreds (IE their 8.625% preferred which has been a home run investment and totally telegraphed in both Citi and B of A's case btw) into equity instead of converting the 8% non cumulative TARP preferred. I would expect B of A to repay TARP within 12 months since their earnings power is north of $40 billion pre-tax.
I can't see any reason why many would participate in PPIP with market to market changed.
On another note, Citadel Capital is having a field day hiring away investment bankers from these firms right now. Expect more small to mid size privately held investment banks to continue this trend.
