bills_fan

Three major national institutions (LEH, MER, AIG) have folded over the last 4 days and no longer exist. Many others are in real trouble. Where is the politcial leadership? Patterson got out in front of AIG and played an instrumental role in helping to save the system. But AIG was an insuance company, which is State regulated. Where has the President of the United States been? I haven't heard from him. He's maintaining radio silence throughout this whole crisis. His administration is pursuing a reactive, ad-hoc strategy in stead of getting in front of the problem, via RTC II. And Congress? From todays WSJ, a solution I've advocated since March... http://online.wsj.com/article/SB122169466799949977.html That giant sucking sound we are all hearing is our financial system being consumed by a giant cosmic black hole created by the vacuum of leadership.

I didn't mean to imply you were uninformed. Sorry, if came out that way. The government made an $85 billion credit facility available to AIG. Any drawdown by AIG would come at a rate of 8.5% plus LIBOR. Three-month LIBOR Wednesday was fixed at 3.06%, which would put the 24-month loan’s rate currently at 11.56%, which is a harsher rate than many of the sales of preferred stock by major banking institutions over the last few months. This rate is basically onerous and AIG will aim to repay its loan with sales of businesses. As to the why... My libertarian tendencies also cause me to shirnk when the gov't "bails" out individual institutions. But it really is more like the government backstopping the entire system. Bear was "bailed out" primarily due to the speed of its demise and the fact that Bear's clearing firm Pershing, is huge. The loss of Pershing would have caused a true market crash back in March, and people did not have the time to adjust. AIG, while an insurer of everything from individuals to drilling platforms and airlines, also had almost 70% of the market share for insurance of debt instruments and derivative products, the very products that got us into this mess. This insurance is necessary as a hedge against default. This insurance is also worthless if the company goes into bankruptcy court. If its worthless, then so is the hedge. Hence, a market riot. Many banks would have been exposed, unable to hedge and would have gotten pummeled (I know, a simplistic explanation, but it really is all I can say). Problem is many of the securities laws are written to convey certain rights and privledges on investment grade rated products. So, if a product is investment grade (as determined by the agencies), it operates according to a different set of laws than junk products (as determined by the agencies). Thats why it is such a big deal. In theory, its a good idea...have an independent 3rd party analyze the product and give it a rating. In practice, not much analysis was being done. I also just read that the bastards are now going to take a second look at Barclays, following the purchase of certain LEH assets. I don't think a downgrade is coming, but these agencies have far too much power.

I understand your concern about AIG, but how much do you really know about them? Absent an AIG "bailout," we would be in 1929 territory today. At least a dozen regional banks and at least one national bank would have failed...overnight. The market would be trading in the 8000-9000 range, if at all. The market knew that AIG had to be saved, LEH did not. And I really think the "bailout" and its draconian terms will force AIG to cease to exist. It just bought AIG time for an orderly liquidation, without cancelling all of its counterparty insurance contracts. That would have happened in bankruptcy court. As an aside, I believe that Moodys and S&P are two of the most loathsome entities on earth. After their substantial role in creating this mess, to pull an 11th hour downgrade and obliterate a Dow component, is the ultimate in hypocrisy. AIG had a chance, albeit a small one, before the downgrade. After, they were toast. The rating agencies should be legislated out of existence, and thats not a concept in which I tread lightly.

Far from it, the original Resolution Trust, created to solve the S&L crisis in the 80s, actually made money for the government while it orderly disposed of the assets. Taxpayers will actually make money if they use an RTC II.

I have many friends at investment banking botiques. They serve a great purpose and they will get some more business. But, botiques cannot drive the bus, they don't have the capital to do the deals that really matter. And your friend may have just changed his tune after today.

What a f*cking unmitigated disaster. Dow is off 350 points today, headed well under 10,000. MS is down 34%, GS off 25% The more I see those two companies tick down, the angrier I am getting at Paulson and the Bush administration for being reactive and not getting out in front of the problem. I said back when Bear when down in March that the only way out will be Resolution Trust II. The only public official who even mentioned the idea was Barney Frank, Chair of the House Financial Services Chair and even then only in the last two days. The lack of political leadership (with the exception of David Patterson on AIG) is appalling. The alternative is global financial meltdown, which will happen in the next couple of weeks. It is too late for Leh, AIG, Bear and Mer. The only question is if GS and MS will still be around when Congress and the Bushies get around to acting on this. If GS/MS go, say goodbye to American economic growth for quite some time. As badly as the investment banks are portrayed by the media and as poorly as their decisions were, they serve a very necessary function in driving true economic growth (not just the overly-leveraged kind). Tieing them in with commercial banks, and all of their leverage limitations, will be disasterous for the long term economic outlook. Lots of blame to go around for this...the Bush administration, Clinton administration, Congress, the banks, homeowners and mortgage brokers all deserve a piece of it. Now, lets out of it before we really wreck things. http://blogs.wsj.com/economics/2008/09/16/...ernment-entity/

I was living in Brooklyn at the time, I didn't want to go home. I figured I would drive myself crazy watching CNN all day.

Lot 16C is where we go from McFaddens. I think we join up with you guys from New Jersey. Its a lot of fun and I go every year.

There was a person who tried to climb down from about the 90th floor. He made it about 10 floors before falling.

And I apologize if I misconstrued your "Big Barbeque" comment to mean 9/11. Way to man up.

Thank you for your service. I lost a lot of friends that day, the financial services industry really is a small town. Find the bastard and kill him. I don't care how. Just kill him. As an aside, for my Lagavulin last nite, I went to the same bar I was in on 9/11, Jim Brady's, in lower Manhattan. By sheer chance, I saw a few of the same faces, 7 years older. The bartender was also the same. One Lagavulin turned into more than a couple.

It got even worse. Noone in my office really knew what happened. We figured a plane had crashed into the tower, but figured it was some type of accident, perhaps the pilot had a heart attack or whatever. A coworker's wife worked on a very high floor in the North Tower, as a compliance officer. He told me they had told the workers to stay at their desks and not to panic because the fire from the South Tower would not affect the North Tower. She did not listen to them and left the building. I walked downstairs with a few co-workers and stood outside Brooks Brothers (the one they later used as a morgue) in my building, just looking up at the towers..really pretty dumbfounded. We were facing the towers when suddenly the second tower just exploded...no warning or anything. Debris falling down all around us and the plate glass windows of the Brooks Brothers shattered. Then it was mass confusion as everyone tried to figure out what was going on. I was standing on Broadway, at the corner of Liberty, with a coworker in disbelief, watching as people jumped the 105+ stories. Then, we heard an awful low rumbling, that just got louder and louder, like an earthquake or bomb...the tower was coming down. We turned and ran into the nearest builing, at the corner of Broadway and Maiden Lane. I escaped the major plume of debris headed through the streets of lower Manhattan. I walked out of the side door and into the dust. What was a brilliant, blue sky was now black with dust. The streets were covered in dust three inches thick. I walked down the street in a daze. I went to a bar we often went for happy hour. They had stopped their lunch preparations. It was a makeshift infirmary. They had used all the tablecloths and napkins to bandage anyone who came in looking for help. Those of us who were unhurt started pitching in and helping, bringing people in from the streets until the whole place was full. I do confess, a large glass of scotch was had by me well before noon. There was one payphone in the bar, it was the only phone that was working. Cell service was out. People were taking turns trying to get in touch with loved ones. We waited in the bar, there was still one tower standing. It was a surreal sight on TV, seeing only one tower. When the second tower fell, the ground shook. The windows rattled and got black as night as the debris cloud passed. You could have heard a pin drop. A short while later, I walked outside and it was surreal. As I walked outside and up Broadway, I looked down Maiden Lane, by Century 21, toward the towers where I had stood about an hour before. There was a section of the latticework of the towers, stuck into the ground on a 45 degree angle. Behind it, the fires glowed fiercely. I wished I had a camera. There were human remains on Broadway. I walked to City Hall Park and finally got cell service, got in touch with my folks and girlfriend (now wife). There was a polic officer looking for volunteers to help takes supplies to FDNY. I'm in. Turns out, we waited for most of the day at the command post set up on the West Side Highway, the fire was just too hot to approach and we had to wait until 7 WTC came down. NYC was a ghost town. Finally, after 10 PM, I walked over the Manhattan Bridge, where my girlfriend picked me up. It was a very long day. EDIT: 7 years later, I type this and am still tingling. Time for a LaGavulin.

I seriously hope you are pulling a Hogboy and trying to get a rise out of everyone...

Nah! What fun is that?

The past 20 or so years has convinced me that it means nothing but bad things for our wallets when one party (either one) controls both Congress and the White House.

Or is there a perfectly good reason for an across-the-board, 5% cut in spending by all Federal agencies, as well as an accounting and justification of every dollar spent else further cuts will be necessary?

At least they exist. Many times, I have to go back through security, just to get outside and have a smoke, then wait in the security line again, all due to a flight delay. I travel a lot, both business and personal. God bless airports like Tampa (outdoor smoking patio in the terminal), JetBlue's JFK terminal (bar and flight info on both sides of security, so you only go through security when your flight is ready), and any on this list that accomodate all travelers. http://www.travelpost.com/airport-smoking-lounges.aspx I have even signed up for the CLEAR traveler program, just so that I can bypass the security line at participating airports every time I head outside for a smoke.

While I agree with you, I will not complain about it after the Slug fiasco. At least, it looks like a Sabres jersey. I have refused to buy the Slug (and the Donahoe-era Bills BTW). I can buy this jersey.

I was working on the 52nd floor of One Liberty Plaza, right across the street. I had just gotten in, dropped my bag in my office (that had a view of the WTC) and went to get my morning coffee. The lights flickered in the coffee room. I walked back to my office with my coffee, looked out the window, and the first tower was on fire, with a big hole in it.

No offense intended, but he plays in Tennessee. Not Pittsburgh, Green Bay, Cleveland or Buffalo where the focus is 24/7 on football or NY or CHI with the constant media presence. If he can't handle a couple of reporters and a little bit of booing, he really should not play football for a living.

McCain did try to stand up to his party and was ostracized for it. I'm not saying McCain will fix everything, just that he will try to restrain spending far more than Obama. Personally, my libertarian self would love to see a balanced budget amendment to the US Constitution, but its not going to happen.

I voted.....Other The original Uptown Girl...Christie!!! Baby Blue Eyes! Beautiful! What a smile!

One has to ask, if Obama is elected, and his tax raises are passed, what happens to the additional revenue? This article foretells an enormous increase in suckling at the government breast, with no accountability whatsoever. Contrast this with McCain's idealistic notion to end earmarks as we currently know them.

I have been twisted since January 1990...just once I want to win a Super Bowl. Then I can die in peace.

And if we lose this game, due to the Sea pass rush, and finish 9-7 and 1 game out of the playoffs, the blame can rest with Peters. If he reported last week at this time, he'd be playing vs. Sea.