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The New Mother Of All Bailouts

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  • The New Mother Of All Bailouts

    I'd like to first include a disclaimer that this article doesn't technically discuss a bailout, but rather a liquidity injection.

    John Burbank of Passport Capital appeared at the Value Investing Congress this morning. I'm getting inured to scary prognoses at this point, but he managed to scare me by saying that GE, which is having difficulty rolling over its paper, and which has 22 times as many assets as it has tangible equity, is "at great, great risk of going bankrupt".

    John Burbank of Passport Capital appeared at the Value Investing Congress this morning. I'm getting inured to scary prognoses at this point, but he managed to scare me by saying that GE, which is having difficulty rolling over its paper, and which has 22 times as many assets as it has tangible equity, is "at great, great risk of going bankrupt".

    "The global capital markets system has had a heart attack," said Burbank, "and the policymakers are prescribing exercise and vitamins." If they really want to unblock things, they'll need to try something much more drastic: Burbank was talking about amounts as large as $5 trillion which could be injected into the system today, and taken out only when it was no longer needed.
    Woaaahhhh nellie!

    http://www.portfolio.com/views/blogs...cardiac-arrest
    A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

    "$250,000 a year won't get me to Central Park West."

  • #2
    Re: The New Mother Of All Bailouts

    It's also time tooo....

    Party like it's 1999!

    [media]http://www.youtube.com/watch?v=mc3U0ZkLDjE[/media]
    A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

    "$250,000 a year won't get me to Central Park West."

    Comment


    • #3
      Re: The New Mother Of All Bailouts

      19997!.....96!....crap!!!

      Comment


      • #4
        Re: The New Mother Of All Bailouts

        It would be a bad day if the Dow fell to 1996 levels. *grabs some popcorn*

        On a related note, is anyone aside form me looking for some sweet deals to throw some cash at stocks-wise?
        ~~ Veritas simplex oratio est ~~
        No matter how far a wizard goes, he will always come back for his hat. --T. Pratchett

        <---- You know you're getting old when you rely on your forum meta-data to remind you how old you are.

        Comment


        • #5
          Re: The New Mother Of All Bailouts

          Originally posted by Rincewind View Post
          It would be a bad day if the Dow fell to 1996 levels. *grabs some popcorn*

          On a related note, is anyone aside form me looking for some sweet deals to throw some cash at stocks-wise?
          I would be a very very bad day if the Dow fell to 1996 levels!

          Comment


          • #6
            Re: The New Mother Of All Bailouts

            At least gas is going to get cheaper.
            Im not racists, I have republican friends. Radio show host.
            - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
            - "A foolish consistency is the hobgoblin of little minds" - Emerson
            - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
            - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
            - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
            - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

            Comment


            • #7
              Re: The New Mother Of All Bailouts

              Originally posted by Rincewind View Post
              On a related note, is anyone aside form me looking for some sweet deals to throw some cash at stocks-wise?
              I am currently saving to build a home..but with the Market the way it is selling my current one may take awhile.. I was thinking of taking a chunk of savings and buying some nice stuff on Sale.. I mean there has to be some good deals out there now.. I was looking at Motorola at it's 52 week low right now.. Not sure where they are going as a company though.. Nvidia is looking tasty at 7.90 down from 39+ 52 week high..
              (Edit: " Nvidia(NVDA Quote - Cramer on NVDA - Stock Picks) shares sank more than 13% Monday, after an analyst predicted that the chipmaker will negatively pre-announce its third-quarter financial results and that it will sell its chipset business. " Grr.. I remember when the Nforce Chipset was the one to buy. I guess the Intel Chipset has taken over..?? All AMD's fault... )

              Oh well..
              |TG|ARMA Pathfinder
              ..now where did I put my keys?

              Comment


              • #8
                Re: The New Mother Of All Bailouts

                Originally posted by peardog View Post
                I am currently saving to build a home..but with the Market the way it is selling my current one may take awhile.. I was thinking of taking a chunk of savings and buying some nice stuff on Sale.. I mean there has to be some good deals out there now.. I was looking at Motorola at it's 52 week low right now.. Not sure where they are going as a company though.. Nvidia is looking tasty at 7.90 down from 39+ 52 week high..
                (Edit: " Nvidia(NVDA Quote - Cramer on NVDA - Stock Picks) shares sank more than 13% Monday, after an analyst predicted that the chipmaker will negatively pre-announce its third-quarter financial results and that it will sell its chipset business. " Grr.. I remember when the Nforce Chipset was the one to buy. I guess the Intel Chipset has taken over..?? All AMD's fault... )

                Oh well..
                Please, someone, explain this to me, 'cos I really don't understand it at all. In what sense is percentage-off-all-time-high a remotely useful indicator? And unless you're one of those funny technical-analysis people who love to draw lines on charts and talk about "bearish engulfings" and exclamation points on doji stars, why does the special case when discount-to-all-time-high is 0% attract such a ridiculous amount of attention?

                To a certain extent, the focus on all-time highs is a function of the stock-market-as-horse-race school of financial journalism where stocks going up is good, stocks going down is bad, and stocks hitting all-time highs is akin to a world record being set. But I think there's something psychological going on, too.
                http://www.portfolio.com/views/blogs...all-time-highs
                A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                "$250,000 a year won't get me to Central Park West."

                Comment


                • #9
                  Re: The New Mother Of All Bailouts

                  Not sure what to make of Tybalt's response, but fwiw if you're saving this money to purchase a house, I wouldn't speculate with it. CDs and money markets in insured accounts. Only invest cash you don't need for the next 5 years.

                  Comment


                  • #10
                    Re: The New Mother Of All Bailouts

                    Originally posted by leejo View Post
                    Not sure what to make of Tybalt's response, but fwiw if you're saving this money to purchase a house, I wouldn't speculate with it. CDs and money markets in insured accounts. Only invest cash you don't need for the next 5 years.
                    What he said. Leejo, you need an avatar.
                    ~~ Veritas simplex oratio est ~~
                    No matter how far a wizard goes, he will always come back for his hat. --T. Pratchett

                    <---- You know you're getting old when you rely on your forum meta-data to remind you how old you are.

                    Comment


                    • #11
                      Re: The New Mother Of All Bailouts

                      Originally posted by Rincewind View Post
                      Leejo, you need an avatar.
                      Send me a picture of your mom, and I'll do it.

                      Comment


                      • #12
                        Re: The New Mother Of All Bailouts

                        Found: [media]http://news.softpedia.com/images/news2/That-Is-One-Ugly-Lady-Now-With-Video-2.jpg[/media]


                        And so they havent looked at any other alternative ways to combatting this whole stock market crash that has nothing to do with millions of peoples lives but will ultimately ruin them?
                        "A Veteran is someone who , at one point in their life, wrote a blank check made payable to
                        'The United states of America' for an amount of 'upto and including my life'. That is honor, and there are way to many people in this country who no longer understand it."-Author Unknown

                        "I got kicked out of barnes and noble once for moving all the bibles into the fiction section" -Any.

                        Comment


                        • #13
                          Re: The New Mother Of All Bailouts

                          A broad stock market downturn is a reflection of reality, not a driver of it. The government is not capable of overriding reality.
                          A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                          "$250,000 a year won't get me to Central Park West."

                          Comment


                          • #14
                            Re: The New Mother Of All Bailouts

                            Well put but then what would be the cause of the crashes? 1930s it was people taking out all their money from investments (or something similar I think), doesnt seem to be the same here..

                            (And Leejo, kinda find that picture disturbing, not really wanting to see that every thread I visit, recommend putting up this instead: [media]http://www.tanmonkey.com/images/monkey/Funny-MonkeyReaction%20small.jpg[/media] heh, kinda reminds me of Kim Jong Ill... or this [media]http://www.funnypictures.net.au/images/funny-monkey-ape-picture1.jpg[/media] .)
                            "A Veteran is someone who , at one point in their life, wrote a blank check made payable to
                            'The United states of America' for an amount of 'upto and including my life'. That is honor, and there are way to many people in this country who no longer understand it."-Author Unknown

                            "I got kicked out of barnes and noble once for moving all the bibles into the fiction section" -Any.

                            Comment


                            • #15
                              Re: The New Mother Of All Bailouts

                              Originally posted by Fenian420 View Post
                              Well put but then what would be the cause of the crashes? 1930s it was people taking out all their money from investments (or something similar I think), doesnt seem to be the same here..
                              Causes of the Great Depression

                              I think it's safe to say that there is no clear consensus.

                              I've got a little soft spot for the Austrians. The Austrian school is perhaps one of the most marginalized schools of thought in economics at the moment.

                              Originally posted by The Wiki
                              One explanation comes from the Austrian School of economics. Austrian theorists who wrote about the Depression include Hayek and Murray Rothbard, who wrote "America's Great Depression" in 1963. In their view, the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. In their view, the Federal Reserve, which was created in 1913, shoulders much of the blame. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a depression was inevitable.

                              The artificial interference in the economy was a disaster prior to the Depression, and government efforts to prop up the economy after the crash of 1929 only made things worse. According to Rothbard, government intervention delayed the market’s adjustment and made the road to complete recovery more difficult.

                              Rothbard criticizes Milton Friedman's assertion that the central bank failed to inflate the supply of money. Rothbard asserts that the Federal Reserve purchased $1.1 billion of government securities from February to July 1932 which raised its total holding to $1.8 billion. Total bank reserves only rose by $212 million, but Rothbard argues that this was because the American populace lost faith in the banking system and began hoarding more cash, a factor very much beyond the control of the Central Bank. The potential for a run on the banks caused local bankers to be more conservative in lending out their reserves, and, Rothbard argues, was the cause of the Federal Reserve's inability to inflate.
                              A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                              "$250,000 a year won't get me to Central Park West."

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