This new scandal at Stanford Financial is the proverbial straw that broke the assholes back. For God’s sake, they’re a fuicking CD house. Unreal.
Look, the reality here is our governments incessant desire to prop up the banks, in order to protect bond holders. They know, if the banks go under, any bankruptcy court will slash and burn the bondholders, who incidentally, happen to be the biggest buyers of government debt.
Do you see the conundrum?
If you fuck the bondholders of the banks, then you fuck yourself, via wiping out the liquidity of the people who buy your Treasuries.
How big is this problem?
Well, taking a look at our larger banks/institutions, it’s hard to discern a real time number of their total liabilities. However, it’s fair to say, collectively, they owe TRILLIONS of dollars to asshole bond buyers.
WFC owes more than 250 bill
USB (Guy Adami special) owes around 100 bill
C owes anywhere from 300-700 bill
BAC owes more than 300 bill
AIG owes more than 170 bill
CIT owes more than 70 bill
MET owes more than 60 bill
COF owes more than 35 bill
JPM owes more than 250 bill
MBI owes more than 30 bill
GS and MS owe more than 300 bill a piece.
I can go on and on. The point here: the government is in an untenable position, trying to prop up these banks that are utterly and without a doubt insolvent.
Long story short: I made a dickheaded error trying to catch a bounce. I sold out of my Chinese shit and raised cash. At the close of trade, all in all, my long and shorts are about equal and my cash position is 50%.
The ultimate plan: survive this shit and eventually burn down my neighbors garage.
If you enjoy the content at iBankCoin, please follow us on Twitter
Long Live The Fly.
Scary.
THE END
No more credits, no more continues…
i predict this will be the best year of your career.
PNC looks to be a good short.
Buffett just slashed his stake in COP.
Long live DUG.
Thanks Chivas.
Actually, I could make a bundle this year, but it won’t feel that good, considering the hardship around me.
dto = unreal. Fuck me.
Looks like the Great Roubini is pretty close.
Actor Robert Downey, Jr. seems to understand Wall Street (in one of his more sober moments).
http://www.youtube.com/watch?v=Dtc58sTsTpE&feature=player_embedded
Thought about changing the header art? Still says “HIGHER” prices.
I’m guessing the bounce is coming next day or so, but what the fuck do I know? Nuthin’.
This Stanford Financial is a smokescreen. The SEC needs to be in jail for Madoff and for the entire off balance sheet fiasco. That said, any given firm could either be given a bailout or a subpoena at any moment. The market is going to discount to zero at this rate–no consistency.
Fly – Life has been so fun and easy. Thought of nearby hardship – sucks.
Fuicking indeud.
It was all a scheme…
The best 3 years of mrkcbill’s life was third grade.
The latest doomsayah, but with a twist: The hilarious Noo Yawk accent.
IOW, this guy (Davidowitz) also does AFSCME commercials:
And judging by his doomsaying, I’d say he had some money with Bernie Madoff.
___________
Hey, gold held up again?
And silver?
Indeud.
__________
Jed likes to perform CAP after a long day of paper trading
Fly,
I hear you about it not feeling all that great to make money while surrounded by suffering. The look and feel of victory has changed from prosperity to survival. My friends are hurting and that sucks. He fact that I’ve been warning them for years doesnt make them or me feel any better. It sounds ruthless, but now is the time to look out for yourself and your family. Let losers find solace in their numbers. Let them group together and struggle through, while you stay apart from those that took the errant path so you don’t get dragged down to their level.
JED,
Witty remarks are most appreciated when they are accompanied by some sliver of commentary on topics discussed here. Free-floating ad hominem attacks are useless and gay. Go fuck a bag of woodscrews.
I like the new image, Fly, it’s quite apropos.
Jake – I don’t know if it’s my computer, but the link seems broken
Anon —
Sorry, maybe the URL was too long… I got it into tiny URL so This should work now. Davidowitz “tawking” aboud our lowered standards of living.
Enjoy.
_____________
Yeah Jed, show some character
Lost meets Gilligan: Watch for the lights to flash in your face on Wednesday and transport you to Mary Anne’s bed where you will wake smoking a bong with a nude Michael Phelps. Aka – Island gap reversal will rip up in the faces of all disbelievers in the morning.
We have gone to the doorstep of Satan today, rang the doorbell……and will run our assess off Wednesday giggling like a bus load of parochial virgins. We will rally huge by EOD Wednesday.
There is nothing but gloom and doom now. Fly has even bought into it with absolutely no current talk of 10% rally. We have been drained – but there is no massive supply hitting the market right now. Supply – compared to the first time we visited these levels – has dried up. All we got now are crazy jewish finance guys screaming on CNBC about the end of days. That channel has gotten fuking loony. All of these finance guys that thought they had it figured out are now loosing it down here at the November lows. It’s not scary – it’s pitiful. They all need to change their pants when they leave the studio. Fucking snivling cowards. Get ahold of yourselves and be a fucking contrarian when it makes sense. It makes sense now.
“We have gone to the doorstep of Satin today”….I’m a suede man, myself
If this thing implodes, don’t think the leveraged ETFs are going to get out without some scrapes.
Wouldn’t it be ironic if the whole system collapsed and SKF and FAZ went to zero? Doncha think?
Portfolio -6.4% today. It’s an unrealized loss at this juncture. I’m going to hold and keep an eye on it, but no panic selling yet. After hrs its going north a little, probably in advance of a bounce tomorrow.
I will start building larger positions if this decline continues.
Holy shit, this guy was all over the tube today.
Fly, I demand you raise this guy to the top of the Parthenon of Bad Nooze Prophets.
Just too freaking funny.
“Deeeze aahhh dah facks!!”
“We got dis LOONATIC DODD AMENDMENT, fuggin insane!”
ROFL!
____________
Jake –
That’s the fucker I was referring to – I actually tossed my cup of Starbucks Instant Coffee at the TV – guy had no control.
Jake, I’m a big Howard D. fan….I’ve played that CNBC pc. about 3 times.
“The ultimate plan: survive this shit and eventually burn down my neighbors garage.”
HA! Love it.
The Fly is God.
JakeGint
Very funny,.. he was very jacked up and is probably as concerned as the rest of us.
Cramer bearish? Get long!
“j-daddy Says:
JED,
Witty remarks are most appreciated when they are accompanied by some sliver of commentary on topics discussed here. Free-floating ad hominem attacks are useless and gay. Go fuck a bag of woodscrews.”
LMAO!
j-daddy,
Out of 1,000,000 sperm…how is it you won the race?
How’s that for a sliver of commentary?
Oh…and for your impressive grasp of Latin…traho vestri caput capitis ex vestri rectum iri.
Now why don’t you and Zombie sip on a nice cup of chamomile and continue spooning.
By the way…it is easy to see Zombie and Alan Greenspan are one in the same poster. You can tell they both pack fudge.
No The Zombie is way better looking than Greenspan. Girls say Zombie has those ‘killer’ looks.
Keynes was gay.
The Next Time Down!
As I read the newspapers over the long weekend, I was struck by how bleak and black they were. Not that I was surprised to read what I read, but one can never know in advance when events in the economy will coalesce into the news that causes the masses to realize how difficult the environment is. In reading the papers, it was obvious to me that it’s becoming clear to everyone that the next time down is well under way, though the average person wouldn’t call it “the next time down.”
1980-82 Versus Now
I was trying to remember the last time I had seen the economic news quite as ugly. For me, the 1980-1982 period is as close an example as I have lived through. Of course, it was quite a bit different. Many of the problems were a function of sky-high interest rates induced by Paul Volcker (a consequence of money-supply targets, not interest-rate targets) to break the back of inflation. Also, the world looked a lot different, as the USSR was still in existence and capitalism was not yet a gleam in the eye of the communists in China.
What we are now dealing with is roughly 20 years’ worth of massive speculation and excess leverage, championed by the United States and mimicked by various countries around the globe. It appears that the potential for the newest round of financial weakness is being precipitated by economic problems in Eastern Europe, which is impacting the European banks (especially German ones).
Of course, we are at the stage now where economic weakness is feeding back into everything, making the situation more difficult for banks everywhere. And, it’s becoming clear to nearly everyone that many banks are not just illiquid but insolvent.
The Globe Took Up Our Gauntlet
The next time down scenario that I outlined many years ago is hitting now with full force. However, at the time I hadn’t really thought through the implications of the speculative nature of what had transpired in the entire world, because when I first started thinking about and discussing this outcome, the rest of the world had not yet gotten quite so drunk. But as it turns out, by the time the madness of the crowds finally breathed its last on the upside, the insanity we saw at home had been pursued in many other countries. Iceland is bankrupt, Ireland may be following suit, and who knows what others may be joining that sorry parade.
The one surprising outcome thus far is that dollar has been able to stay as strong as it has (which I believe is a temporary phenomenon). It is becoming clearer to everyone that currencies (the dollar included) have no intrinsic value, as they are just pieces of paper. Which is part of what has put the bid in gold recently, in my opinion.
Turning to the markets, after weakness around the globe during our holiday, U.S. stocks responded to the foreign action and the news by opening approximately 4% lower. We kind of milled around that level until the last hour, with virtually everything red save for gold stocks (though late in the day, they gave up a good chunk of, and in many cases, all of their gains and then some). A late rally was attempted, as the market sprinted about 1.5% in some 10 minutes. But that rally was rejected and we sank back to the lows of the day, which was where we closed.
Today’s action was quite ugly. If one could find anything slightly positive to say, it would be that the selling wasn’t a lot worse. A high probability, in my opinion, is that the market now heads for the November lows. Then we can see what kind of tricks the government has up its sleeve.
Away from stocks, the dollar continued its reign as the one-eyed man in the land of the blind. Fixed income was strong in the wake of all the chaos. Oil was about 6% lower. Precious metals were higher, with silver and gold gaining 3% initially and essentially holding that gain all day long.
Recently, I’ve talked a fair bit about the angst regarding the high price of gold. But gold is still $60 below where it was when the Bear Stearns/JP Morgan shotgun marriage was arranged. (Not that $1030 is a correct reference point, but nonetheless gold traded there.) Now ask yourself: Is the world a better or safer place financially since that occurred? (And then, consider the monetization of debt that we will see all over the planet.) I know it appears as though gold is expensive, and it will continue to be subject to violent corrections along the way, but it seems to me that the path of least resistance will continue to be higher.
Erratum
On Friday I said the market capitalization of the world’s gold stocks was $100 billion. That is not correct. It is twice that, but I think the point survives.
Cheers Juice 😉
“CAP Says:
No The Zombie is way better looking than Greenspan. Girls say Zombie has those ‘killer’ looks.”
HA! So true.
don’t forget, Frontline on PBS tonight on the meltdown
What time? EST
usually it’s at 9 PM, but check your local PBS station for “Frontline”
you can check here.
here’s the page describing the episode.
Thanks.
I’ll see all of you in Hell!
Fan out.
Always like to see the Fleckmeister flex his mental muscle. Good points. Gold is definitely acting like the anti-fiat-currency investment right now. It’s likely going much, much higher.
Jake,
That Davidowitz is a funny guy — and right on the money too.
The retail analyst from Brean Murry is obviously aware that America and retail arent gonna come back. But he is trying to pump up his sector. If he admits that retail is fucked and 80% of the companies he covers are going to go bankrupt, he makes himself look irrelevant (and less employable). This Brean Murray dude is protective about retail just as CNBC’s Phil Lebeau is defensive about US auto makers.
It’s every man trying to save his own job in this market.
BERNIE MADOFF: Hiya bloggers. I do not know anyone named Stanford – got it? Tough day today – even my Midas fund took a hit. Geithner should give me a call – I can help them out of this little difficulty – the Sweedish models can, I mean the Sweedish Model, can solve duh problemo.
This Davidowitz guy makes Nouriel Roubini look like Dr. Smiley Face.
Here’s another interview he did in December 08.
http://www.youtube.com/watch?v=Hrokoy9PxyE
Phil, on one of my trips to Brazil, I travelled up a tributary of the Amazon to an open pit gold mine. It was a lawless dangerous place so I left immediately. The nearby collection of brothels and alcohol/drug houses was really scummy.
COLLAPSE OF WESTERN CIVILIZATION AHEAD?
From Leeb’s Market Forecast:
If you’ve read the series of books I’ve been writing this millennium, you may recall several people whose thoughts on the survival of civilization I have quoted: Jared Diamond, Joseph Tainter, and Arthur C. Clarke.
The first two wrote extensively about the downfall of past civilizations. Tainter’s book, The Collapse of Complex Societies, deserves more scholarly respect. But Diamond may be more familiar to most readers, since his books, Collapse and Guns, Germs, and Steel, are more recent and more popular. Arthur C. Clarke is known primarily for his speculations on the future.
I mention these names because last Friday, Diamond was asked what our civilization’s chances are of surviving the current global economic crisis. He gave odds of 51% in favor – very similar to an estimate Clarke gave back in 2000.
Of course, apart from knowing the risks we are facing, the important thing is to develop qualities that will ensure our survival. After all, every civilization faces crises from time to time. The stronger, more robust civilizations weather the storm, while the weak ones collapse. Diamond, Tainter, and others have helped identify why certain societies survive while others fail.
Simply put, civilizations tend to survive crises when all citizens see themselves as part of the same team. Consequently, they band together to make sacrifices that allow society as a whole to continue. Everyone, from rich to poor, king to commoner, is willing to share in the hardship, because they know they will also share in the long-term benefits. In this effort, simpler societies often have an advantage because they have fewer divisions between those at the top of the social ladder and those at the bottom.
On the other hand, a house divided cannot stand. Societies that collapse usually have great divisions (if not outright animosity) between rulers and commoners, so they don’t feel part of the same team. Instead, the rulers form a team only within their own class. They demand the poor suffer increasing burdens, while refusing to make sacrifices themselves. Naturally, the poor come to recognize that their rulers are no longer on their side. Unwilling to bear all the hardship and too little reward, they form a team of their own and revolt.
America was built on the idea that all Americans would be part of the same team (“all men were created equal”). The notion of equality is an important part of our cultural heritage – and that cultural heritage is the glue that holds us together. Of course, every team has its star players, who earn a greater share of the wealth (and rightly so). But as long as those from the poorest of backgrounds commonly believe that, with some effort, they can improve their state and win a fair share of the nation’s bounty, then social cohesion can get us through any crisis.
I personally believe that our chances of surviving the economic crisis of this century are much higher than Clarke or Diamond’s estimate. However, I also recognize that this crisis is testing our social cohesion.
Take, for example, President Obama’s new economic stimulus bill. Sure, it’s flawed. Like most pieces of legislation, it reflects a number of competing agendas and theories. Nonetheless, it is needed. That’s why, as we expected, Congress passed the bill in the end. What disturbed us about the process was that, despite efforts to address the concerns of the Republican minority, votes were cast along lines as partisan as we have ever seen. Only three Republican senators voted in favor of the bill, and no Republican representatives voted for it. We fear this was a case of politics being put ahead of the public good.
Incidentally, you should know that we are not partisan liberal democrats any more than we are partisan conservative republicans. Our only interest is in the health of the economy and the stock market. And we are just as worried about excess partisanship on the blue side of the House.
For instance, many grassroots democrats who disliked the previous administration seem determined to force Congress to prosecute and persecute many of President Bush’s advisors and appointees. They believe the previous administration broke the law in the conduct of its job and should be punished for putting political opportunism ahead of other issues.
While we don’t think anyone should be above the law (equality before the law also helps bind rich and poor together), we don’t think fanning the flames of partisan hatred and division with a witch hunt will help bring the nation together in this time of crisis. We need Congress to function in a spirit of cooperation. We need Representatives from both sides to put the interests of the nation ahead of their party.
Last year, for example, Congress acted in a far less partisan way to pass the Emergency Economic Stabilization Act, in response to the global financial crisis. That kind of cooperation will be needed again very soon.
You see, the next important piece of legislation will be one designed to get the banks back on their feet. It’s no good creating a huge pool of liquidity if there are not enough pipelines to carry that money into the economy where it can do some good. The banks are the pipelines, and right now too many of them are broken.
As one of actor Kenan Thompson’s characters would say, when it comes to the banking industry, Congress must set aside partisan interests and “FIX IT!” At almost any cost.
Again, we are pretty sure our politicians are grown-up enough to put aside pettiness and remember that their main job is to serve their country, not their party.
However, until we see proof…
Its getting soooo Y2k here.
Of course, it easy for me to make light of that, because I still have all the Y2k preps. Except the duct tape. Used that. And some of the waterproof matches.
Pete, that’s a bunch of left wing socialist hokey. We need to reload and start anew on capitalism. The Federal budget must be slashed 10% immediately (your pal Obama doesn’t want to cut government, does he?) This globalization crap does not work – only fools think that GM can pay UAW wages while the Chinese assemble cars for $1 to $2 per hour. All this phony environmental global warming crap has to go – can’t afford fantasies. One nation, under capitalism, for capitalism, forever…..and ever.
A little “value added” from my “Depression 1995” pamphlet:
“When plunder becomes a way of life for a group of men living in a society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it” – Fredrick Bastiat
You know what the difference between the Stanford shyt and Madoff? No weak ass Christmas vacation traders running the tape.. The enema continues tomorrow.
So, my husband walks by the TV while Greenspan is speaking on CNBC. His immediate response is “why are you watching that bald-headed chicken F-er” and shuts off the TV.
I’m still chuckling.
“Reverberate” Finally someone is speaking logically.
Where’s the gloating DOG?
Does anyone else see an accellerated reverse head and shoulders in the DOW?
Paulson = former chairman of the CFR, a private pro-socialist thinktank. Frontline ignores this completely.