economy

Hillary : "The Patient is not well"

Senator Clinton is on CNBC right now, she just met with the Fed.  She's wanting to resurrect or bring about a new version of the Home Owners Loan Corporation (HOLC). The fact that all existing mortgages could not be renegotiated to make them more affordable makes her uncomfortable in regards to support for the Paulson plan.  She wants that in the plan or at least an accompanying legislation passed at the same time.

When asked about Representative Barney Frank's statement about executive compensation.  She also came in favor of curbing CEO's of financial companies' bonuses and pay.  So long as we're providing tax dollars, she says, then they can't get their old rewards. 

" We shouldn't be running a long-term bail out program."

Goldman now a "regular"Bank

So is this really a ticket for them to do business as usual?  I'm reading on the Wall Street Journal this morning that Goldman Sachs and Morgan Stanley will be converted into regular banking holding companies.  So now they are to be like Citibank and Wachovia and Washington Mutual?

For sure, this will pair them down a lot.  The days of 40-1 leverage are over for them.  The boys and girls at the trading desks at Goldman might be hitting that aged whiskey a little more tonight.  No more being capitalist cowboys for them. 

UPDATE 5: NEWSFLASH: RTC/RFC proposal, also new FDIC for MMFs

This just in, Treasury Secretary Paulson now confirming that the government is pursuing a plan similar to what happened to the savings and loan.

While the exact details haven't been released. I will be updating this as more news comes out. For those who aren't aware of what a Resolution Trust Corporation or RTC is, basically it's an outfit that buys the bad loans from failing banks to supply capital. Well, it's a lot more complicated than that. I will be posting a primer on this tonight. Anyways, below is an excerpt from CNBC's site.

Treasury Secretary Henry Paulson is working on a plan that would set up a government facility to take on bad debts from financial institutions, preventing a worsening of the global credit crisis, Wall Street sources have told CNBC.

The facility would be similar to the Resolution Trust Corporation, which was set up in the late 1980s to take on all the failed thrift assets during the savings and loan crisis, these sources said.

Why I'm a little worried about the drop in oil

Can't sleep, been thinking about the price of oil, worrying about it to be honest. Now you may be thinking "Venom, what are you crazy? A putz? A drop in the price of oil is a good thing!" And I would reply, yes, under normal circumstances it is. But these days, things ain't so normal. Actually, right now, oil is up since yesterday, but it's been in a slide for the past week or so.
A prophetic lunch

A couple years ago, I had lunch with a trading friend/mentor of mine at Hackney's on Harms Road. He was an older gentleman, made his money in options, in fact was one of the first to trade at the CBOE back in the 1970s. We had just gotten back from one of those sales seminars from Equis, a company that makes a product called Metastock. While gobbling down on Hackney's infamous onion loaf and later cheeseburgers, topics ranging from the software to commodities came up. This was around 2002, and Enron was still in the headlines.

Updated: NEWSFLASH: Gov't to offer "loan" to AIG

Not all the details have been released, so I will update this as new things come forth.
Bottom line, the government is going to offer American International Group (AIG) a bridge loan. The amount of the loan will be to the tune of $85 billion. In return, from what we know now, AIG will begin to sell assets ASAP to serve as collateral for the loan. Also, the company will grant the government Warrants.

Manufacturing Monday: Ok..things not looking so hot

(Editor's note: My sincerest apologies, I had planned to post this thing up this morning. But alas, my hard drive with the notes ended up saying it would mimic John McCain's economic plan, and collapse on me. Several hours later looking for a hard drive and attempting to reinstall Vista, I'm up and running. So this is an abbreviated version of what I had planned. Once again, sorry, rest assured I will make up for this. )

Right now, you probably have heard that Lehman Brothers is no more, and the Merrill Lynch is now a vassal of Bank of America. Well things on the manufacturing side ain't looking that great.

By the numbers

Economic Meltdown..Do you really give a DAMN ?

Submitted by on

David Walker is not a politician. He was hired by Bill Clinton to head the GAO. His official title was: Comptroller General of the United States and head of the GAO. He was the nation's chief accountant. He was not an elected official and was hired for 15 years regardless of which president or political party was in office, which means he was in office during both Bill Clinton and George W. Bush.

Walker has been preaching of impending fiscal doom for some time now. It is his premise that there is not enough money to pay future retirees their full Social Security and Medicare benefits and unless something is done immediately, our country may not survive.

Sign of the times: $.99 says they can't sell for under a buck!

While Larry Kudlow and the rest of the neo-con Kudlowites are telling you the economy is Goldilocks, reality is trying to remind us that things aren't so golden.

Sure oil is now almost at under $100, and that gas in some places now cost less than a discounted haircut. The grain complex has come off its seasonal highs, with the talk of a "crash." Hell, even the price of homes has come down to the point where folks are beginning to say the end of this deflation could end soon!

Yet, in light of all this, the general consensus is that prices in general are still on the upside. Costs across the board are still going up. And today, one of the hallmarks of cheap goods is now saying they can't even live up to their name's sake!

Manufacturing Monday: Strike at Boeing, Dell to sell plants, and Solar Arabia,

Greetings everyone, I hope your weekend was fantastic. Welcome to another edition of Manufacturing Monday! Some exciting and interesting stuff to cover this week. First the big time strike happening at Boeing. Then theres computer maker Dell looking to sell of ALL of it's factories, and finally could Saudi Arabia claim to be Mecca of solar energy beside crude oil??

Dreamliner turning out to be a nightmare for Boeing and it's workers

Honestly, Boeing should have seen this coming. Well, in case you weren't aware, the machinists at Boeing went on strike over the weekend. The raison d'etre for calling the move? Outsourcing of work, or basically job security was the main issue.

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