Posted on 09/26/2008 2:18:18 PM PDT by rabscuttle385
FYI (apologies if you already know this), Golden West founders also are the money and originators of MoveOn.org.
Did not know that. Those losers got lucky finding a sucker buyer in WB before all hell broke lose. Would of been nice if Golden West stayed around and had to go into bankruptcy when those pick a pay loans tanked.
Had an unpleasant experience with Wachovia when I was stationed in NC twenty odd years ago. Their customer service sucked, even then.
I find myself rooting for Wachovia’s complete destruction.
If they go under, and I hope that they do, I believe that I will go to the local whiskey store, and obtain a bottle of, oh, 18 year old Glenfiddich. And I will chuckle with each and every sip over the next few days.
Why is this a bad thing. Citi gets assets for pennies on the dollar. It seems we need more of this and then we have to ask ourselves if a bailout is even necessary.
National City wasn't far behind - its debts hit 60% yields. Morgan Stanley, despite is promised supports, some of its debts traded at 40% yields.
That is $2 trillion more in liabilities in the terminal ward, folks. Lehman failed because its funding costs hit 14% and stayed there for a month. These institutions have days, a week or two at the outside, without significant help.
Wachovia is falling today as a direct domino effect of the way Washington Mutual failed. Yes JP Morgan, by selling $10 billion in stock, was able to guaranteed the *deposits* of Washington Mutual, despite a $30 billion write down on its mortgage assets. But it took a $25 billion wipe out of Washington Mutual's *bondholders* to do it. The senior bondholders might get 20 cents on the dollar, the juniors nothing.
As a direct result, the debt of every other bank with any survival concerns sold off violently. As in, Wachovia debt yielding 130%, National City 60%, Morgan Stanley 40%, etc. Banks cannot borrow at those rates and survive. And if bank debt is going to be routinely wiped out to save depositors, banks cannot borrow at rates lower than that, from the bond markets. Their crushes stock prices have shut off equity financing for many of them, and now the corporate bond markets are shutting as well.
The hit increases in scale every time you try to schuck it all off on them. They don't have it. You will just destroy 3 institutions for each one that you let fail "with prejudice". The only reason the markets didn't collapse today on the Wachovia news is traders all expect a bailout deal by Monday.
Well, yeah. How many credit derivatives though?
Look at their stock price the last year. The CDS is the real problem.
How many people in this country would be in favor of the bailout - taxpayers in particular - were they fully informed that the current crisis is largely the result of semi-legal semi-insurance policies that all these investment banks traded with each other, off the books, opaque, no central clearing house or exchange, etc. It is impossible (or was) to determine the health of these firms because it was all under the table.
do you think tax dollars should be expended bailing out investment banks in lieu of FDIC institutions (standard retail banks) ?
I sure as hell don’t. Biggest scam ever when you get down to it, and the “liberals” have the gall to A. “Blame Bush” and the republicans when there is PLENTY of blame to go around; and B. Load up the bill with yet even more nonsense, and C. there is no provision for review or litigation or legislation.
To all the crooks out there, large and small, who have ruined such a fine system, I say go to hell and stay there. You know who you are. And so do we.
Our accounts were at First Union, which was a pretty good bank for business customers. The idiots at Wachovia took them over and it is a disaster. I will be happy when those guys are taken out and shot. I didn’t know Citi had any money either though.
What is the defense. They are all rich white boys so they have no civil rights and the case should be dismissed?
If you think you are saving money by smashing the financial sector to atoms, you just have no idea what it is or what the treasury is. The financial sector is a net payer to the US treasury of $480 billion per year, rising 6-7% per year in addition.
The crooks are those who put a gun to their heads to take that from them every year to buy votes with middle class entitlement boondoggles, and then have the gall to turn around and scream "robbery" if any of it is ever needed to keep the golden goose alive.
But envious hatred trumps all - the leftist hate mongers have done their work well over the years. Gratitude has left the building, along with true economy.
Please, who’s the lemming ?
Go look at their balance sheet. Wachovia is insolvent, has been for months, and now that the Fed is draining liquidity out of the credit market they’re really toast this time.
Not so fast, I have one more transaction to make,
Then i’ll join you with that Glenfiddich.
Soon we will all be employed by MEGACORP.
Soon we will all be governed by MEGAGOV.
Soon we will all be attending church at MEGACHURCH.
All the above are a wholly owned subsidiary of MEGACONGLOMERATE INC.
:)
The amount of people who thinks the finance sector can just shrivel up and die and it wouldn’t affect their lives is staggering, and scary.
Huh ? There are no profits, now or in the future, coming out of these toxic assets, unless we can "buy" them at pennies on the dollar.
As for CDS "assets" ? They aren't. They're zeros, because the counterparties don't have the capital to stand behind them.
We lost about 130 billion on the RTC, and it will be a lot worse this time.
Add in that the additional borrowing and the flooding of the bond market with treasuries are going to spike interest rates and make the Federal government default.
Yeah, that all sounds like a really good deal for the taxpayer.
The finance sector/shadow banking system blew a bubble to the tune in excess of 500 trillion, by all reports.
What entity is big enough to bail out even 4# of that ? Uncle Sugar is already in debt to 100% of GDP. What are you as a taxpayer willing to pay and for how long ?
He’s talking about the finance sector itself, which is on life support. We keep it alive, it will keep the economy healthy and all kinds of coffers flow into the treasury, we let it die now, the economy tanks and the real cost is tens of trillion in the next decade.
That’s right. And, Gorelick is in on another scandal.
They’re all in bed together, IMO.
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