Linkage

Three men deny Oompa Loompas attack The Guardian (I feel bad for laughing)
NSA Director Heckled at Blackhat computer hacker conference. Forbes
Ted Cruz Still Needs to Be Ditched: The Rude Pundit (Must read)
New York Times editors cut Obama a new one over secrecy. (I think that the persecution prosecution of James Risen may have pissed them off)
Obama Starting to Lose It Over Snowden Naked Capitalism (also must read)
Bubble Alert!! Morgan Stanley predicts buy-to-rent boom (HousingWire)

Pic H/t Police the Police

More Calls for Swedish Style Nationalization

And the press is beginning to cover just how well it worked, and it worked very well....A lot better than what the current free market mousketeers are trying here.

George Soros is pushing for something that it kind of halfway in between the two approaches, and I disagree. Solomon's division of the baby gets one a dead baby:

The hard choice facing the Obama administration is between partially nationalising the banks, or leaving them in private hands but nationalising their toxic assets. Choosing the first course would inflict great pain on a broad segment of the population – not only on bank shareholders but also on the beneficiaries of pension funds. However, it would clear the air and restart the economy.

That being said, George Soros is right about an awful lot.

Citi Dead Pool

Well, we have the stock tanking by 25% yesterday, and Its CEO Vikram Pandit denying reports that it is looking for a buyer.

I dunno, its market cap has dropped from $274 billion to $21 billion in a couple of years, and $21 billion sounds a lot like a handful of beans.

We have reports that "non core" assets might be sold off, and there are leaks that notwithstanding Mr. Pandit protestations, that they are looking to merge with someone.

The Questions that Needed to be Asked

From, Queen Elizabeth II, of all people.

She visited the London School of Economics (LSE):

Prof Garicano [director of research at the LSE's management department] said afterwards: "The Queen asked me: 'If these things were so large, how come everyone missed them? Why did nobody notice it'?"

When Garicano explained that at "every stage, someone was relying on somebody else and everyone thought they were doing the right thing", she commented: "Awful."

You see, this is not rocket science.

The only reason that it seems complex is because the people who are trying to fix it, were the ones who caused it in the first place, and they are obfuscating to cover their collective asses.

The Questions that Needed to be Asked

From, Queen Elizabeth II, of all people.

She visited the London School of Economics (LSE):

Prof Garicano [director of research at the LSE's management department] said afterwards: "The Queen asked me: 'If these things were so large, how come everyone missed them? Why did nobody notice it'?"

When Garicano explained that at "every stage, someone was relying on somebody else and everyone thought they were doing the right thing", she commented: "Awful."

You see, this is not rocket science.

The only reason that it seems complex is because the people who are trying to fix it, were the ones who caused it in the first place, and they are obfuscating to cover their collective asses.

Why I Read Rich Toscano

Because he takes some complex issues and makes them eqasily understood.

Case in point, credit default swaps, which he likens to highly profitable unregulated flood insurance companies during a decade of drought.

Go read.

Why I Read Rich Toscano

Because he takes some complex issues and makes them eqasily understood.

Case in point, credit default swaps, which he likens to highly profitable unregulated flood insurance companies during a decade of drought.

Go read.

Stealth Run on UBS?

Because the report that, "Customers pull their money out of ailing UBS," from Swissinfo sounds like this might be going on.

Stealth Run on UBS?

Because the report that, "Customers pull their money out of ailing UBS," from Swissinfo sounds like this might be going on.

Roubini Says `Panic' May Force Market Shutdown

Just go read his whole article.

personally, I think that we will see the formation of parallel markets, which exclude the failed players, before this happens, so, for once, I'm a bit more optimistic than the good doctor.

Just in Case You Were Wondering How Frozen Up The Credit Markets Are

They are now finding that companies in bankruptcy cannot ginf debtor-in-possession and exit financing (DIP loans), which are used to provide cash to companies in reorg.

Debtor-in-possession, or DIP, financing is essential for the lawyers, layoffs and other restructuring necessary for a company's rebirth. Exit financing is used when a company "exits" reorganization. Banks have been eager to take part in this market because the loans are the first to be paid back and command high interest rates.

(emphasis mine)

This is about as safe as a loan can be. Even if the reorg fails, you are at the head of the line for liquidation, and the interest rates are very good, and people are still unwilling to lend.

How to Understand the Economic Crisis

These guys are comedians, but they do a better job of explaining this than journalists and economists.

And in the Financial Collapse Race, WaMu is Coming up on the Right

Well it appears that Washington Mutual is trying to find someone to buy them, and their large institutional investors have have agreed to waive a stock dilution clause, which, along with reports that US Regulators are helping them look for a buyer does not bode well for the company.

In any case, it appears that Citi has given the deal a pass.

Meanwhile, in an excercise of remarkably good journalism, Matthew Garrahan of the Financial Times went to the bank, and saw that people are queuing up to get their money out.

Dead bank walking.

What Matt Said

Mr. Yglesias is a wise man:

Unlike the guy who runs Lehman Brothers, the guys who clean the bathrooms in the Lehman Brothers office have, as best one can tell, been doing an excellent job. And yet if the company going under results in everyone involved losing their jobs, the guy who runs Lehman will wind up being better off than the guys who clean the bathrooms. This is because in the United States of America, hard work is the way to get ahead.

Madame Guillotine is beginning to look remarkably attractive.

Nouriel Roubini and the Collapse of the Shadow Banking System

He is predicting that the current model for investment banks is unsustainable.

He thinks that independent brokerages are done, and will be purchased by some of the mega banks, including extensive foreign ownership and control.

It's a good read, but the interview below is good too. My favorite quote is, "They're all toast."

If You Can Make it There, You'll Make it Anywhere

And the housing crash has hit New York, as Manhattan apartment prices are falling, and the same thing is happening with luxury homes in central London which is even pricier.

WaMu Offering Desperate for Cash

That's really the only reason that they would offer 5% for 12 Month CDs, because attempts to secure money from the markets cost a lot more, and they need it now.

Most banks are paying less than 4%, and WaMu ain't some web only operation trying to build market share.

They are in trouble.

FDCI Closed Another Bank Friday

Damn....Always happens when I'm offline for Shabbos.

Must be FDIC policy to only close banks on Fridays after close of business.

This time, it's The Columbian Bank and Trust, Topeka, KS.

Shadow Inventory

Oh
My
God

Shadow inventory are houses available but not listed in the MLS system.

Most often, these are REO (Real Estate Owned, foreclosures and such), and the Sacramento Real Estate Statistics blog has some numbers on a few markets.

City	MLS Listings	Foreclosure Inventory	% of Listings
Sacramento	14,913	31,219	209%
San Francisco	18,647	35,402	190%
Inland Empire	45,490	82,114	181%
San Diego	18,771	31,168	166%
Los Angeles	62,379	88,843	142%

So the massive inventory out there, might account for less than half of all the houses actually on the market.

Time to freak out?

Alan "Bubbles" Greenspan Predicts Bottom of Real Estate Collapse

He says sometime in the first half of 2009.

Here is another prediction of his about the housing market, in October 2006, "I suspect that we are coming to the end of this downtrend".