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Exchange system approved for Credit Default Swap mess
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March global oil surplus at 17.7 million barrels per day; 2nd qtr surplus to be at 6.2 million bpd despite OPEC-led cuts
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US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
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From couples to copulas, David Li was an actuary!
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Exchange system approved for Credit Default Swap mess
- 33654 reads
March global oil surplus at 17.7 million barrels per day; 2nd qtr surplus to be at 6.2 million bpd despite OPEC-led cuts
- 85209 reads
US oil supplies at a 36½ year low, SPR at a 39 year low; oil+products supplies at an 18½ year low
- 186662 reads
From couples to copulas, David Li was an actuary!
- 43701 reads
The Golden Rule
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Will the NY Attorney General Bring Doomsday Charges Against Wall Street? If So, How Long Will He Survive?
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New York Post Claims Census Falsifies Unemployment Figures
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How Many Jobs Are Needed to Keep Up with Population Growth?
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VAT or Value Added Tax is Getting a Look in D.C.
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U3 and U6 Unemployment during the Great Depression
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The war on the middle class
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House discusses 401k/IRA confiscation
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Tax Cuts for the Rich Do Not Generate Jobs
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It has always been about class warfare.
how about strong regulation? That's yet another one, transaction fees (which I believe MC, Visa are raking in the $$ on).
and keep it nationalized for at least a generation.
There has to be some discipline introduced, so that there isn't rampant speculation.
And, nationalization offers a real stimulus of its own. Something north of 45% of the US economy is transaction costs.
Think about the case of retail transactions.
Currently, the bank skims off 1% plus of the transaction in charges. If you had a common, government backed bank, that could create an electronic currency that all would have access to, then you could end this rent seeking behavior.
Bank transaction fees have the same effect on preventing marginal transactions as a tax.......
Another broken promise from Obama...surprise, surprise! Who would have thought he would promise whatever it took to get elected, then once in office, gone straight back to business as usual? Who would have thought THAT? certainly not the people who voted for him. especially the morons who have never voted before ANYWAYS, but were inspired to vote for him for that ONE REASON. You know the one I mean.
http://www.associatedcontent.com/article/1518064/what_me_earmark.html?si...
Just added it to the diary.
And while we are talking about Fannie and Freddie and graphics...
I hate to imply that maybe the radical right has a point....but on the "affordability" and "liar loans" I think there are certain "special interest groups" (cough,cough La Raza, Acorn, etc.) that aren't helping...
but who is precisely trying to keep the bubble afloat, I have no idea who/what are they thunin!
This is a magnificent post midtowng, seriously and I don't think I even saw anything about Freddie/Fannie as I scanned all of today's reports.
Nice piece!
There are a lot of posts on derivatives and the search (upper right hand corner) should pull them up. Also a site specific search on Google works too.
Yes, CDSes are different from CDOs and all of these derivatives, structured finance I have to look up and read constantly, still working on it. It's a maze of little investment vehicles and indexes, etc. seemingly built upon each other and it's confusing as hell!
It's no wonder that no one understands these things...and as noted on the baseline model, once I dug into the mathematics...uh, that sure as hell didn't appear valid either as a probability equation.
That's why I put the "translation tool" before the quote because the mnemonics become a flurry of snow upon which one can no longer see the shit on the ground underneath!
While reading the article yet again, it occurs to me that the author is only talking about CDO's. The credit default swaps (CDS's) are the other, much larger component included in "toxic assets". Hence the higher values for toxic assets being estimated/reported.
From Economics Explained:
Jeeeesh! It's no wonder so many people feel like they are going down the rabbit hole!
I think the Fed obligations along with TARP I are now $10 trillion. Yeah, if you find out a good bit of data, explanation on precisely how this doesn't count...
or does, I'd like to see it.
It seems the lesser the amount of money is involved, the more outrage it generates...i.e. private jets, junkets, CEO bonuses, TARP, then Fed...
where seeing $10 trillion is enough to make me think about digging a fox hole in the back and loading up with canned goods.
I will keep looking for sure. All of this CDS/CDO stuff has been like peeling an onion to me. As they said in Xfiles, the truth is out there!
Yeah, that would make a great research post for I do not understand quite the difference between the Fed and it's $8 trillion obligations vs. TARP I of $800 billion and now this new TARP II in the recent budget of $750 billion.
I don't get quite how that works and I especially do not get these $8 trillion by the Fed....if banks are insolvent, how that is not major U.S. debt.
Your shadow banking system estimates seem off the planet so let's see how they are coming up with such numbers.
I've read $40 trillion to about $65 trillion estimates..
and yeah, if it's all fiction, well, the world is going to have to let all of that fictional economy and money disappear and it's going to really fuck things up.
But this 95% collapse of evaluation, i.e. discovery this crap is fiction and worthless is seemingly just these particular CDOs associated with the residential mortgage market, which I pray and hope doesn't mean the entire shadow banking system.
If you research out this relationship and how it really works I'd love to read it in a post.
I do not get it!
I saw this article earlier today and my first thought was . . . . where is all the TARP money AND the Fed/Treasury guarantees going? The numbers mentioned in this article are a pittance when compared to the $7-$8 Trillion that has been given away or offered as security. And everywhere I read that number will go up substantially this year.
Then I realized that the article is only mentioning 2 institutions looking at 2005 to mid 2007. Geithner's planned "stress test" will be looking at 20 or so institutions and their holdings up to today. In various news articles over the past months I have seen estimates of the "asset" value of the total toxic derivatives being anywhere from $160 Trillion and up to $600 Trillion!!
Have I misunderstood something in what I've been reading? I mean, if the current value of this doodoo is 5% of that, there are not enough other assets on planet earth to offset that kind of write off.
Considering the "ultra safe" is worth 32% and the other is basically worthless what difference does it make at this point to hide these as well?
But my question, which I do not understand is through regulation somehow they plain need to get some of these new "vehicles" out of the market because they are based on inaccurate equations and methods...
so what percentage of this shadow banking system are these fictional mathematically based vehicles?
The author of that Financial Times article suggests that the banks, probably with a push from Treasury, should do an open auction basically a fire sale. Her theory is that their models were terribly wrong and why keep lingering in limbo. Everybody needs a little price discovery. It doesn't even have to be an entire portfolio.
AP:
Wouldn't the inventories of cheap straps exist and China more than willing to produce those straps if the final product sales and exports were happening?
I've been on the "let's do Sweden" bandwagon ever since I studied up on various solutions to systemic collapse.
But I guess I need to revisit that to find out what are the immediate pain consequences for I am sure it's like ripping off a band-aid really fast.
This clearly isn't working and is just robbing the U.S. taxpayer blind.
a large part of the Chinese economic miracle is illusion, because the value added parts of products like watches are produced in Korea, Japan, or Taiwan. Look at a cheap watch. the strap comes from China, but the time piece requires specialized machine and is capital intensive, and most often comes from Japan.
So China's export collapse shuts down the production of these value added parts in Japan and Korea.
complete with the backing of the full faith and credit of the US government is the only option.
And this should be an immanent "learning opportunity" for the the financial crowd.
Either we have responsible regulation, or you shits lose your money and your jobs. All your bases are belong to us.
This could be a real cluster... if we hit rock bottom in FDIC terms, then the crisis is extended because the belief in the FDIC having been punctured, the only rational thing for an individual to do is to run faster to their bank.......
This blog is a real contribution to the debate. I think you are right on. We surely need more thoughtful non=panicked input into the national conversation.
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