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    • Tue Sep 30th 07:00 AM
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      Is This a Money Making Bailout?
      Credit default swaps are insurance-like contracts that promise to cover losses on certain securities in the event of a default. They typically apply to municipal bonds, corporate debt and mortgage securities and are sold by banks, hedge funds and others.
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    • Tue Sep 30th 06:55 AM
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      Is This a Money Making Bailout?
      (1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

      Try as hard as you can to grasp the scope of that statement taken from the bill.

      What are the securities, obligations and "other instruments" based on or related to mortgages? Define the terms MBS, CDO and CDS and relate them to mortgages. The bailout bill gives permission to treasury to buy the credit instruments that were created around mortgages.

      Americans understand this and we sent a clear message to our reps to kill the bill.


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    • Mon Sep 29th 07:07 AM
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      Is This a Money Making Bailout?
      One more time, what is a CDS? Do you know? This bailout isn't about subprime mortgages. It's about derivatives that have no bid on the open market. No bid means nobody wants them at any price.
      The plan bails out any company that dumps their illiquid toxic waste deriviatives on the taxpayer in exchange for dollars. I use AIG as one example. There will be many others. Taxpayers do not profit. The paper dumped on the Treasury has no bid. Nobody assigns it any value. It is arrogant and presumptive to say that this toxic waste will ever have any value.

      Taxpayers will get higher inflation, higher taxes, a vastly increased national debt and a prolonged crisis. Those things are certain.

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    • Sun Sep 28th 19:56 PM
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      Is This a Money Making Bailout?
      Some instructional reading for you. tinyurl.com/4g8xlo
      "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.”
      — Joseph J. Cassano, a former A.I.G. executive, August 2007
      This genious is typical of who created the mess. Now we are supposed to bail them out, instead of allowing them to fail.

      "In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models. It nearly decimated one of the world’s most admired companies, a seemingly sturdy insurer with a trillion-dollar balance sheet, 116,000 employees and operations in 130 countries."

      These are the arrogant gamblers that you want us to bail out. Well it looks like you get your wish. 634 billion more is on the way thanks to the amoral cowards in Congress.

      But the government does not have that money. It has to be borrowed and the national debt expanded. So Treasury will begin issuing huge tranches of debt. Who will buy that debt? Only the Fed will , only the Fed. What will be the impact of all that high powered money on the bond markets and the dollar?

      What happens when the money is used to purchase default swap crap at mark to model value and the purchases never turn a profit? Who goes to jail for lying? No one? The arrogance is stunning.

      What will you say when the next SecTreas comes around and says he needs 700 billion more? That I can guarantee is going to happen.
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    • Sun Sep 28th 18:56 PM
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      Is This a Money Making Bailout?
      You don't have a grasp of what is involved. They are not all mortgages. Do you know what a credit default swap is? Do you know how many are extant?

      You obviously are a socialist. These fat cats made hundreds of millions on the way up and now want to share the losses with all of us. Let them fail. I'm not paying for them to create derivatives and default.
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    • Sun Sep 28th 09:25 AM
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      Is This a Money Making Bailout?
      Subprime loans are a small part of the whole problem. You are completely ignoring the Alt A, Commercial, and option arms portions. Then there is the CDS problem which dwarfs the mortgages. You need to get a grip on the scope and scale of the real problem.

      September 24 – Bloomberg (Shannon D. Harrington, Caroline Salas and Pierre Paulden): “The $62 trillion market for credit- default swaps, created to protect banks from loan losses, helped fuel a near-meltdown in the financial system and now may be regulated for the first time. "

      September 22 – Bloomberg (Bei Hu): “Treasury Secretary Henry Paulson’s $700 billion plan to buy devalued assets from financial companies is ‘a joke’ because it doesn’t go far enough to calm markets, said Kenichi Ohmae, president of Business Breakthrough Inc. Ohmae, nicknamed ‘Mr. Strategy’ during his 23 years as a McKinsey & Co. partner, called for a $5 trillion ‘international facility’' to be made available to financial institutions. The system could be modeled on one used by Sweden during its banking crisis in the early 1990s, he said. ‘This is a liquidity crisis. The liquidity has to be so big that people won’t get panicky.’”

      The Fed already pumped an average of 180 billion per day via the discount window during the past week.

      The sheep get sheared with smoke in their eyes and you guys are part of the smoke machine.
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    • Fri Sep 19th 06:59 AM
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      Wind Power Can Solve the U.S. Oil Addiction
      Oil is used to generate less than 4% of our electricity. So wind power isn't going to cut our dependence on oil. Your headline is totally wrong.

      Wind farms currently provide about 1% of our electricity, a "quadruple" in 10 years would bring that to 4%. So we are still going to need those nukes, and coal and natgas fired plants.
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    • Sun Sep 14th 09:45 AM
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      Brazil and Petrobras Are Awash in New Oil
      PBR has placed a dozen long term contracts for deep water rigs. Given the technical challenges and the political risks inherent to their stock, I would rather own the companies that lease rigs to PBR. Transocean, Seadrill, Scorpion and a few others are on this gravy train. I own some RIG.
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    • Sat Sep 13th 16:08 PM
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      Wake Up Copper Consuming Dragon
      Friday we saw copper prices lifted, but the reasons given are all speculation. We near the end of a quarter, next week is options expiry and the termination of the Sept copper contract. Those things are probably more influencial on price than any of those given by the news media. There is no indication of Chinese demand increasing yet. I want to see rising dry bulk rates and falling inventories.
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    • Sat Sep 13th 15:26 PM
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      Commodity Roundup: What To Be Bullish On Now
      Oil demand is going to be further curtailed due to the large number of refiners shut down by Ike. We will likely see the price of oil drop. But we will enter the high demand winter quarter with low inventories of heating oil and gasoline. Natural gas injections have been cut in half by Gustav and will remain shut in for some time. So we enter the winter season with storage near the 5 year avg and 200 bcf below last year. The MMS publishes a weekly report on shut in production. www.mms.gov/ooc/press/...
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    • Tue Sep 9th 06:22 AM
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      Short-Term Correction in the Commodities Bull Market
      First you say, "... smart investors should take advantage of currently depressed prices to aggressively accumulate shares in select precious metals and energy companies."
      Then you add, "The next few months might continue to be painful for commodities." So which is it? If commodity prices are to remain "painful" for months, then why buy now?

      And at the end we see that you have no disclosures, apparently not long any of the things you advise others to aggressively buy. That speaks volumes about your confidence in your own analysis.

      De-leveraging, redemptions and writeoffs are not done. Unless and until some big buyers come back to the commodity sector, prices will remain moribund. Who might these big buyers be?

      Inflation has two components, money supply and the velocity of that money. You correctly note the increase in supply but completely neglect the velocity. Wages can't grow as unemployment rises and productivity falters. Americans are being forced to clean up their individual balance sheets, paying off or defaulting on debt and and reducing spending. Retail investors aren't going to be the buyers.
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    • Mon Sep 8th 17:51 PM
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      Metals Manipulation - Or Simply Deleveraging?
      It's a gutsy call to say buy gold today. Hurricanes in the gulf don't help oil. The dollar is rocketing higher. Money is flooding out of commodity funds as redemptions hit. Financials are attracting the speculative money. Mining shares were sold today on heavy volume. Many hit new 52 -wk lows and ended on those lows.
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    • Sun Sep 7th 18:37 PM
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      Fannie and Freddie: 80% Dilution
      The opening market reaction: S&P 500 futures rose 30.30 points. Dow Jones industrial average futures rose 239 points and Nasdaq 100 futures gained 35.25 points.
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    • Sun Sep 7th 17:04 PM
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      Fannie and Freddie: 80% Dilution
      Another reaction:
      BASEL, Sept 7 (Reuters) - Hong Kong welcomes moves by the U.S. government to seize control of mortgage finance firms Fannie Mae (FNM:$7.04,00$0.62,009... and Freddie Mac (FRE:$5.10,00$0.15,003... as this should stabilise the stressed market, its central bank chief said.
      Speaking to Reuters, Joseph Yam, who heads the Hong Kong Monetary Authority, said the bailout of the two government-sponsored Enterprises was an unusual and "possibly controversial" step but necessary given the circumstances.
      "As investors in debt issued by the two GSEs, we of course welcome the measures," Yam said.
      "It should have a useful, tranquillising effect on the very stressful market," he said on the sidelines of a bi-monthly meeting of central bank governors at the Bank for International Settlements.
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    • Sun Sep 7th 16:42 PM
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      Whither Oil Prices?
      TOTAL Ceo de Margerie said last week (June 2008) that to replace reserves now will cost a minimum of $80 per barrel.

      The PBR costs that Karl uses are a minimum base price of 30/barrel, not a maximum and not the total cost. Also, the figures are estimates from a year ago. Time is money. For example steel costs are up 80% this year.

      Peter Robertson, vice chairman of Chevron, recently told lawmakers that the cost of new production in the deep water Gulf of Mexico could exceed $95 a barrel.


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