Securitized Hybrid Investment Trust Bailout Plan
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Which of course, will go by its acronym . . .
Tuesday, September 23, 2008 | 04:04 PM | Permalink
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Comments
Readjustment of
Assets to
Prevent
Extinction of
United
States
Posted by: Douglas Watts | Sep 23, 2008 4:09:49 PM
Rep. Marcy Kaptur: "Let's Play Wall Street Bailout"
http://www.youtube.com/watch?v=S27yitK32ds
Bravo !
Posted by: km4 | Sep 23, 2008 4:10:13 PM
Barry - a little Treas watching
Last year, Fed debt was flat during Sept - from 9.001T to 9.007T - seems normal as they say
This year Sept is already up $140Billion, mostly in last 4 days since Wed, 9/17
9.646 9/01
skip to Wed, 9/17
9.647 Wed - normal, up 1B
9.664 Thurs – plus 17B
9.727 Fri – plus 63B
9.785 Mon – plus 59B (rounded)
And there's plenty more auctions to come this week (but minus the paydown of Thursday's due bills)
http://www.treasurydirect.gov/NP/BPDLogin?application=np
Posted by: fatbear | Sep 23, 2008 4:10:42 PM
OK, so here's your options: do you want be in a recession or do you want to be in a recession $700 billion poorer?
Posted by: wally | Sep 23, 2008 4:12:32 PM
Seriously. They could have S.H.I.T. Bailout Plan stickers for the glass doors at the bailed-out banks. The little S.H.I.T. acronym wrapped around a logo of a turd labeled "economy" going down an itty-bitty toilet. Hell, I'll deposit with the bailed-out investment banks (now regular old regulated depository banks, right) if they all agree to use that sticker.
I loved your comment the other day about making their CEOs go through credit counseling. Seriously. That may have been the best thing I have ever heard. The smug idiots. They love to lord it over the stupid poor, when in reality, they are all a bunch of naked emperors running around in a world of ignorance.
Query me this Batman. Hasn't the fair market value of all these securities been well established? Isn't it what a willing buyer would pay a willing seller? They have a value. It is zero. Or perhaps heavily in the negative, as I'm willing to bet several of these institutions would pay dearly to unload many of these securities from their books.
Posted by: BostonJoe | Sep 23, 2008 4:12:52 PM
i can still laugh but i refuse to be happy!
Posted by: karen | Sep 23, 2008 4:13:49 PM
Is this the Banks And Deposits Securitized Hybrid Investment Trust Bailout Plan?
..just wondering.
Posted by: Bruce in Tennessee | Sep 23, 2008 4:23:38 PM
Paulson said it'll cost $700B. Take that a give a chuck of it to every homeowner in America to pay down their debt. Then, the banks / CMBS trusts get a partial pay off, the "fire-sale" markets shoot up in value. The banks are saved. The homeowners mortgages are recapitalized. The taxpayer (homeowner) is net /net.
Problem solved.
Posted by: VennData | Sep 23, 2008 4:25:23 PM
Call me crazy, but based on everything I've been reading/hearing, I really don't think this thing is going to pass.
What say ye?
Posted by: Jeff M. | Sep 23, 2008 4:26:02 PM
Bruce - no worries, mate, if the market goes down the toilet, at least you get a burger.
Posted by: leftback | Sep 23, 2008 4:29:13 PM
McCain is giving a speech on the economy. He's blaming fannie & freddie. You can probably stream it on CNN.com
Posted by: JL | Sep 23, 2008 4:30:58 PM
A few more days like the last two, and we should have a good buying opportunity.
At SPX 1150, it’s worth buying a little. At SPX 1100, I think it’s worth loading up the truck.
Posted by: DL | Sep 23, 2008 4:32:22 PM
Bernanke said today that the goal of $700 billion package is to bring current mortgage related paper fire-sale prices closer to hold-to-maturity price...
In other words, they are engineering a mother of all short squeezes.
1. There are hundreds of hedge funds that have shorted billions of mortgage related securities.
2. Bernanke and Paulson want suddenly bringing the prices of these securities significantly higher (from the current fire-sale prices up to hold-to-maturity price).
3. As the price of these securities move higher, many hedge funds will be forced to buy (to cover) billions of this mortgage paper.
4. Many banks hold the same paper on their balance sheets and will report WRITE-UPS
5. Banks reporting write-ups ignites stock market rally and stock market short squeeze
Posted by: Mike | Sep 23, 2008 4:33:43 PM
The best thing for Paulson and Bernanke is to not pass it. That way they will have a way out - they can blame Congress.
On the other hand do the members of Congress want to take the blame?
Or, Maybe Congress will call their bluff?
Posted by: JustinTheSkeptic | Sep 23, 2008 4:35:04 PM
Badly
Underwritten
Loan
Liability
Securitized
Hybrid
Investment
Trust
Posted by: Serfin USA | Sep 23, 2008 4:35:13 PM
Bruce in Tennessee, Yup, lol B.A.D S.H.I.T.
Posted by: JL | Sep 23, 2008 4:35:16 PM
Jeff M:
Well, now you have purloined "What say ye?"™ from Bazza. Here is my 2 cents worth:
Politicians love to talk, so they can say that they opposed this and that or supported this or that other thing when it comes to campaigning in The General Erection. Nature of the beast.
They will blink. Trust me, Schumer is posturing. He above all does not want to see Manhattan become a ghost town, completely bereft of bonus babies and their spending power. They will all go in the back room and come out with some compromise legislation and then on we go.
REFLATION, baby.... it is this thing (the direct injection) or it will be 50 bps worth or more of rate cut instead as Bernanke would be forced into ZIRP territory. Take your choice - but keep your gold handy.
Posted by: leftback | Sep 23, 2008 4:38:57 PM
On second thought, sadly Congress won't have the balls to not get something passed. They're all running scared in an election year.
Posted by: Jeff M. | Sep 23, 2008 4:38:58 PM
McCain blames Fannie and Freddie? Wow. Talk about clueless.
Posted by: BobC | Sep 23, 2008 4:39:36 PM
Special Extended Refinancing Increase Of United States Securitized Hybrid Investment Trust...
god I love acronyms!
For you Star Trek aficionadoes:
I had a smart non-finance friend ask me what we should do in the current crisis.
I said, "This is the Kobayashi Maru."
How do we reprogram the simulator?
P.S. See Star Trek 2, "The Wrath of Khan" for the answer...
Posted by: Jay Weinstein | Sep 23, 2008 4:42:40 PM
McCain was just asked about golden parachutes and fannie/freddie and Carly Fiorina since both were paid by stock holders. He said that fannie/freddie is perceived by the public as being government owned and Carly is a role model for females. Sometimes McCain confuses me. Is it five yet?
Posted by: JL | Sep 23, 2008 4:42:51 PM
@Leftback: See my "second thought" post. My prior comment was wishful thinking on my part.
You're right - something will get passed probably by the end of the week after all of the posturing and grand-standing (hello Schumer).
Sticking with my GDX play (actually added more today) and probably will do so for the long term. It's the only thing that I actually feel remotely positive about. The rest is a total crap shoot at this point.
Posted by: Jeff M. | Sep 23, 2008 4:44:49 PM
Everyone should read the comment by:
Mike @ 4:33:43 PM
I think this is entirely feasible - a brilliant piece of analysis.
Whatever your present position might be, it's a good idea to see the other side of your trade. The group in power has repeatedly engineered market movements that have blown up a number of hedge funds that have been caught offside, and this is not accidental.
Posted by: leftback | Sep 23, 2008 4:45:10 PM
BR - any chance you can give us a word cloud of Bush's speech given today at the U.N.?
Posted by: Maggie Knowles | Sep 23, 2008 4:48:41 PM
You know, what I object to is not the fact that by purchasing these assets Hank Paulson is turning the U.S. Treasury Department into a gigantic hedge fund - what I strenuously object to is that by paying hold-to-maturity values and receiving no risk premium for these assets, Paulson is turning the U.S. Treasury into a p-o-o-r-l-y run hedge fund.
Posted by: Winston Munn | Sep 23, 2008 5:00:26 PM
