I'm starting to think that emotion has carried the markets a little too far down.
I've heard that the total real estate liability that underlies this mess is valued at only $1 trillion and that's way less than has been taken out of the marketplace.
World banks across the world today promised to slash interest rates in consort.
There's no predicting emotion but this is starting to feel overdone to me.
If you've got any extra cash this may be a good time to be ready to invest.
Another source of controversy is a group called ACORN that is registering voters. John McCain said in the third debate that its fraudulent registration practices threatens our very democracy. It is indeed likely that some ACORN workers have registered nonexistent voters--because the registrars are paid for each voter registered. However, voter registration fraud is not voter fraud since the fictitious voter won't show up to vote because he doesn't exist. The Republican governor of Florida, Charlie Crist, has said that ACORN is not really a problem.
If the government would do a better job of registering voters, private groups like ACORN would not be needed. However, voter registration has always been a partisan battleground. After the Civil War, the Democratic-controlled legislatures in many southern states enacted poll taxes to discourage the newly freed slaves from voting. Another common tactic used by the Democrats then was to introduce some gigantic hurdle to voting--such as a test on the state constitution that even lawyers couldn't pass--and then exempt anyone whose grandfather was a registered voter, which conveniently got most whites (but few blacks) out of having to pass the test. Nowadays it is the Republicans who are fighting all attempts, like motor-voter laws, to make it easier to register, because such laws predominately help poor people and they tend to vote Democratic. The NY Times has an editorial on this subject today.
While ACORN has gotten a lot of publicity lately because McCain and Palin keep talking about it, voter registration fraud is bipartisan. Here is a story in today's LA Times about a Republican group engaging in similar tactics. While there is no data on who is doing the fraud and why, anecdotal evidence suggests Democratic fraud is bottom up (individual registrars making up names to earn a few more dollars) whereas Republican fraud is top down (campaign officials doing it to win elections), but the subject remains controversial.
(Hi Fastbrake-Welcome back)
News you might not hear on Fox or MSNBC:
"Challenges Could Disenfranchise Millions of Voters
The Help America Vote Act, passed after the 2000 debacle in Florida, mandates that states have a statewide data base of eligible voters to help people vote and to prevent fraud. However, these data bases are full of minor errors and hundreds of thousands, maybe millions of voters may be disenfranchised as a result. To make this clear, consider the five newly registered voters listed below on the left. The data for the same people (matched by social security number) appears in the drivers license data base below on the right.
[see link in part 2]
Unless very carefully programmed, the software might reject all these new voters on the grounds of suspected fraud because the data don't agree. Could the software be made smart enough to do "fuzzy matching?" Of course, but only if the people writing it were instructed to do so. In addition, in many states criminals have recently been purged from the rolls--along with everybody else with the same name as any criminal. But there is much dispute as to which crimes disqualify one, what about people who have served their time, and people who have been pardoned? Even if the laws are clear, which they generally aren't, the data bases are so riddled with errors and the clerical personnel so ill-trained, that the whole issue of voter registration could be a time bomb that explodes on election day.
There have already been numerous lawsuits filed by the state Republican Parties challenging thousands of newly registered voters, most of whom are Democrats. The U.S. Supreme Court ruled yesterday against a GOP lawsuit trying to disqualify 200,000 new voters in Ohio whose voter registration data does not agree with other state data bases (like the examples above). In a Montana case, case a federal judge ruled that the Republicans had filed the case "with the express intent to disenfranchise voters." In some cases it is the Democrats going to court to prevent a (usually Republican) secretary of state from purging eligible voters. In other words, attempting to disenfranchise voters has become just another campaign tactic. It is virtually always the Republicans trying to purge (new) voters because so the new voters are so heavily weighted towards the Democrats. If they can eliminate 100,000 voters, they will probably get rid of 80,000 Democrats and 20,000 Republicans, which is clearly worth the effort."
Seems to me that the real estate mess is just the spark that revealed the real mess, DERIVATIVES AND CREDIT SWAPS. If these overleveraged investment devices were designed by illegal means(which I believe they were) then I think they should be declared null and void.
The markets are shaping up to close higher today.
I don't pretend to understand CDS (like the banks did) and don't even know much about corporate paper.
But didn't Bernake devote part of the bail-out, yesterday to corporate paper? I've also heard that the underlying defaults so far are only about 6%. I guess defaults normally must be less than 1% or something. That leaves 94% intact.
Another thing that I heard is that every dramatic downturn hasn't ended with 'capitulation'. I understand capitulation to mean starting out down on the day and ending up soaring on high volume. Market upward turnarounds have just started looking like dead cat bounces that just kept going.
Given that I started this thread pegging ALTI's low at $1.38 I'm going with optimism for now. For starters let's see where the markets end up on the day as, apparently, we're off the highs at the moment.
It looked like the markets declined again right after Paulson's speech today to end up slightly down. (The TSX was up a bit in Canada)
Paulson said that the TARP bailout won't start making handouts for another couple of weeks and that some banks could still fail.
Similarly Beranke's purchasing of commercial paper won't start right away.
I don't know how much bank liquidity can be loosened up prior to these events taking place. When you need cash now you need it NOW.
Still it was a nice change to feel optimistic for the end of the day as ALTI rose to $1.80 from $1.38. Hope there's more ahead.
EXACTLY! It just make me furious that all the blame is put on homeowners defaulting on mortgages, when these damn criminals come up with the monstrous derivative schemes gone bad. While these crooks get paid for their mistakes, and partying at the same time, my investments get cut in half. I can't imagine what employees(or unemployees now) of the companies led by the crooks are going through.
CDS: definition: Let's cheat everyone at the next lower level so they can cheat the level below them. We are SO clever! To celebrate, we all need a vacation at the spa in CA -- only runs about half a mil for all of us for a week... On THEM ... who's gonna stop us???
Fantastic thread here -- no one has mentioned the Esthetic violence that went into high gear in the 80's. They now call it "lack of civility". Today we are witnessing what happens when you support a generation or two of "Not MY problem". I asked a college class not long ago to give me an example of "Interdependency". The blank looks stunned me.
Kicking soapbox into the corner... :-)
be careful ... the contagion has spread beyond real estate to commercial paper ... there is over 4 trillion of commercial paper out there that no one wants ... not even over night.
I still like Rubini .... check out his analysis.
and like trollen said ... we have a breakdown in trust ... like the AIG execs... spending millions on their retreat.
Somehow we need to lower EVERYONES expectations. and return to recognize greed for what it is.
Tact, Its almost like re- reading "What to do about the coming devaluation"a book written many years back, that offered one mans enterpretation of how to handle that senario.The problem is we have a very fractured world market that is over reacting to the actual root causes, much like looking for multible loose ends in a hand rolled ball of string.The ball now will have to be unwound in a neat way to uncover the ends, without creating a knotted mess that will cause greater turmoil .In short ,it will force world co operation, on all financial fronts in a common cause, and we saw some of this in the world banking today,golden parachutes and all the excessee have to be curbed, from the government, down thru the ranks to those in leadership rolls in the world of commerce. It was encouraging to note that one of the big brass yesterday was commended for not accepting a huge departure package, while his counterpart was chided for taking his. and departed with it anyway.It's things like that, that will bring about change for the good,"hopefully." but we have to start rebuilding. Bye and luck Tro
After 31 bears and 31 bulls there are still factors that set this one apart from all the others. Emotions have always seemed to over ride common sense, but distrust of the leadership is running rampant like very few times in the past,Also a divided country in ideologys and the direction we go is questioned, and gets back to the fundemental failures in morality, integrety,and belief in ourselves as "One nation under God"and as on our coinage"In God we trust"but in the end i believe we will prevail, but as a diffrent country, than when we were, when this thing began.It is part of the grand design.Luck Tro
"After 31 bears and 31 bulls there are still factors that ..."
We should just chill out ...
But hey !!!
Speaking of things that are best served chilled ...
31 Bears & Bulls on the Wall (St.)
31 Bears & Bulls
Take one down
Pass it around
30 Bears & Bulls on the Wall