Financial News

[kapkomet]

Yay! I get to do a CK style acronym post!

 

The LIBOR is starting to spike again.

 

 

I think you have to register.

[Balta1701]

Last year, in 2009, well after the housing bust started, well after the ratings agencies work had been revealed to be garbage, well after the banks had been proven to be idiots, the Wall Street banks got a new brilliant idea. They'd take the mortgages from the failing mortgage-backed securities that were still doing well, slice them up, send them off to the ratings agencies, and then they'd have created another AAA backed security by re-slicing up the mortgages one more time. And after all..everyone had learned their lesson right? The Banks weren't going to invest in garbage mortgages again, the ratings agencies had learned their lesson and were only going to rate AAA stuff as AAA. That's capitalism at its finest; if it's good at anything, it should be able to learn from a mistake that happened a few months beforehand.

Standard & Poor’s cut to junk the ratings on certain securities, backed by U.S. mortgage bonds, that it granted AAA grades when they were created last year by Credit Suisse Group, Jefferies Group Inc. and Royal Bank of Scotland Group Plc.

 

The reductions were among downgrades to 308 classes of so- called re-remics, or re-securitizations, created from 2005 through 2009, the New York-based ratings company said today in a statement. About $150 million of the debt issued last year, as recently as July, with top rankings were lowered below investment grades, according to data compiled by Bloomberg.

Thankfully, we have the Congress and the White House protecting these guys and their vital jobs.

[Balta1701]

Germany proposes financial transactions tax to cover bailout costs.

The euro's afternoon plunge came after it was already under pressure on German Chancellor Angela Merkel's announcement in Berlin that Germany would support a tax on the financial-market sector to contribute to the costs of the euro-zone sovereign-debt crisis.

 

Germany's ruling center-right parties agree that the financial-market sector must contribute to the costs of the euro-zone sovereign debt crisis if the lower house of parliament is to approve Germany's share of the $1 trillion euro-zone rescue plan. They demanded the introduction of a financial-transaction tax or financial-activities tax.

[NorthSideSox72]

Germany proposes financial transactions tax to cover bailout costs.

First "financial transaction taxes" are already used, both in Europe and here - you see it on your brokerage statement as "SEC Fee" or "TAF". Further, the "exchange fee" you may also see has built into it their aspects of oversight. So this is not new.

 

Second, by upping the taxes charged on a per-transaction basis (as opposed to by-principal or by-shares), the idea is of course to hammer the people who trade more frequently. The thinking seems to be that these higher frequency traders (automatic or human) are somehow evil, and therefore must be taxed more heavily.

 

Except, that's not reality, in relation to the bail out bills here or in Europe. The mistakes made and improper actions were not about high transaction levels - they were about improper risk, ignoring valuation and rating problems, regulations not updated to match current reality, and other regulations not enforced at all. So effectively, this method of addressing the bailouts is taxing Peter to pay Paul. It is just not logical.

 

Furthermore, people fail to realize that it is the 20% of traders/investors who make 80% of the markets that keep bid/ask spreads lower, and therefore make the markets more efficient. In this way, the people in the 80% who are just in 401k's, mutual funds, etc., are actually saved some money.

 

So in short, upping the transaction-level taxes will accomplish nothing and in fact make things worse.

 

[southsider2k5]

First "financial transaction taxes" are already used, both in Europe and here - you see it on your brokerage statement as "SEC Fee" or "TAF". Further, the "exchange fee" you may also see has built into it their aspects of oversight. So this is not new.

 

Second, by upping the taxes charged on a per-transaction basis (as opposed to by-principal or by-shares), the idea is of course to hammer the people who trade more frequently. The thinking seems to be that these higher frequency traders (automatic or human) are somehow evil, and therefore must be taxed more heavily.

 

Except, that's not reality, in relation to the bail out bills here or in Europe. The mistakes made and improper actions were not about high transaction levels - they were about improper risk, ignoring valuation and rating problems, regulations not updated to match current reality, and other regulations not enforced at all. So effectively, this method of addressing the bailouts is taxing Peter to pay Paul. It is just not logical.

 

Furthermore, people fail to realize that it is the 20% of traders/investors who make 80% of the markets that keep bid/ask spreads lower, and therefore make the markets more efficient. In this way, the people in the 80% who are just in 401k's, mutual funds, etc., are actually saved some money.

 

So in short, upping the transaction-level taxes will accomplish nothing and in fact make things worse.

 

Thank you so very much.

[Balta1701]

Core CPI declined in April.

 

Somewhere back in this thread, I vaguely remember having argued that even if the government runs up a huge debt, deflation, rather than inflation, was a much bigger concern for the next few years.

[Balta1701]

I don't know if there's any reason for me to post this other than to be able to write a post with these words in it.

 

"BP and Goldman Sachs sued for oil fraud".

[southsider2k5]

Core CPI declined in April.

 

Somewhere back in this thread, I vaguely remember having argued that even if the government runs up a huge debt, deflation, rather than inflation, was a much bigger concern for the next few years.

 

Spot crude prices fell over 10% in the last month. You should see the same thing happen in May.

 

The index for energy decreased 1.4 percent in April and accounted for

the seasonally adjusted decline in the all items index. The indexes

for gasoline and natural gas both decreased significantly,

outweighing increases in the indexes for fuel oil and electricity.

[Balta1701]

Spot crude prices fell over 10% in the last month. You should see the same thing happen in May.

Core CPI excludes energy costs, you know that.

 

Did core CPI drop in late 2008 when oil costs cut in half?

 

 

Core CPI is falling off a cliff.

[southsider2k5]

Core CPI excludes energy costs, you know that.

 

Did core CPI drop in late 2008 when oil costs cut in half?

 

 

Core CPI is falling off a cliff.

 

Energy has an effect on the rest of CPI, even if it is excluded. You understand that, right? The government data states that completely clearly.

[Balta1701]

Energy has an effect on the rest of CPI, even if it is excluded. You understand that, right? The government data states that completely clearly.

Of course it does, but its an indirect effect. Just look at the dip in energy in 2009 that was not associated with a core CPI decline. Or the huge relative runup in 2010 that has not been associated with a CPI increase.

[southsider2k5]

Of course it does, but its an indirect effect. Just look at the dip in energy in 2009 that was not associated with a core CPI decline. Or the huge relative runup in 2010 that has not been associated with a CPI increase.

 

Actually your Ross Peroting makes my point for me even. Everytime you see an extreme move in energy prices, you see the CPI move the same direction. Its not as drastic, but it still moves in tandem with it. Follow the ups and downs, and not the percentages.

[Balta1701]

Why should Ben Nelson have an opinion on whether or not it's a good thing to regulate ATM fees? He's never used one, so he'll just do whatever his bank tells him.

 

And also...his word for those little tiny light/laser scanners that stores use to scan barcodes? Holograms.

[Balta1701]

Financial reform bill passes cloture vote.

[bmags]

passes 59-37 or somethin like that.

[Cknolls]

956 may occur quicker than thought. And it may be a rest station to the mid 800's. High for the year in????

[kapkomet]

956 may occur quicker than thought. And it may be a rest station to the mid 800's. High for the year in????

 

I hate to say it, but I really hope so.

[Balta1701]

I hate to say it, but I really hope so.

Conservatives, rooting against America since Jan 20, 2009.

[southsider2k5]

Dow is down another 200 at the open, under the big 10,000 level.

[NorthSideSox72]

Dow is down another 200 at the open, under the big 10,000 level.

Euro debt crisis sinking in for Spain now, fears getting bigger, plus North Korea acting childish. Today is definitely event-driven.

 

[southsider2k5]

Euro debt crisis sinking in for Spain now, fears getting bigger, plus North Korea acting childish. Today is definitely event-driven.

 

This debt crisis should have us looking in the mirror.

[Balta1701]

This debt crisis should have us looking in the mirror.

 

Link

[mr_genius]

 

Link

 

the 2010 number (the only one that is real) is very close. Those 'predictions' seem like they are counting on a spectacular US economic recovery. Not so sure that is going to happen. At least not in the next few years. The deficit as a % of GDP could actually grow.

[southsider2k5]

 

Link

 

debt doesn't equal deficit, hopefully even Paul Krugman understands that much.

[mr_genius]

http://www.usatoday.com/money/economy/inco...te-sector_N.htm

 

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

 

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.