SPX: Flat negative for the Year

if the S&P500 closes here, it will be Flat negative on the year:


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  1. michael schumacher commented on Aug 15

    Closing below 12,900…NOW that would really get people thinking….oh…wait……just dropped below it. Nevermind…
    12,800…now THAT will….LOL


  2. stuart commented on Aug 15

    abandon ship, abandon ship, all hands abandon ship!

    we’ve been torpedoed by the submersible USS “credit alchemy”.

  3. ari5000 commented on Aug 15

    flat for the year?

    I bet the average fund is down 3 to 5 %. Most of them can’t outperform, remember?

    And besides, it’s only Aug. Give it another month.

    Flat is no reason to panic.

    -5 percent they’ll start to panic

    -10 percent they’ll panic

    -20% — don’t walk near tall buildings

  4. michael schumacher commented on Aug 15

    In the top % gainers today (with about 15 minutes to close) 4 out of the top 5 are Thornburg. Accompanied by the quote
    “business as usual by next week”

    I bet…

    on that list a little further down is FCMC: a credit mgmt company.


  5. michael schumacher commented on Aug 15

    this is like a boxer who can’t wait for the bell.

    starting to see signs of panic…..a little bit.


  6. Winston Munn commented on Aug 15

    I don’t mean to be an alarmist, but it is from just such deeply oversold positions that crashes occur.

  7. scorpio commented on Aug 15

    we didnt get a Black Tuesday, but i think this qualifies as a Brown Wednesday. remember back when they used to sell suits w two (2) pairs of pants? it was for days like this.

  8. Idaho_Spud commented on Aug 15


    Suits are no longer sold with 2 pair of pants since the invention of Depends.

  9. Winston Munn commented on Aug 15

    More ominous news from Cleveland.com:

    “The Cuyahoga County Recorder’s Office has stopped taking checks from Countrywide Financial Corp., the nation’s largest mortgage lender, because of the California company’s warning last week of possible financial problems.”

    If Countrywide, a primary dealer, is bouncing checks…..

    How bad is this crisis going to be?

  10. Pool Shark commented on Aug 15

    Not to worry, I’m sure Fred thinks this is just a little ‘correction.’

  11. Uncle Jeffy commented on Aug 15

    1406.70. Looks like Kludgelow & Company might want to rethink a little bit (oh, wait – that implies that he “thought” in the first place…)

  12. Pool Shark commented on Aug 15

    Yen up to 116.70…even with the $USD up.

    That funny sound you hear is the carry trade unwinding.

  13. scorpio commented on Aug 15

    Eli Broad on CNBC just now, not quite the cheerleader young Maria was hoping for. he says another 18 months to clear out the dead wood, maybe recovery by ’09-’10. seque to the Kud, who’s begging for the Fed to start buying up loans, bailing out the old free market. what a puss. my money’s on the billionaire, not the flak.

  14. Marcus Aurelius commented on Aug 15

    We ain’t seen nothin’ yet. Millionaires and geniuses. Heh.

  15. stuart commented on Aug 15

    I come back to an earlier question.

    Is this a liquidity issue or debt/solvency issue.

    Most say liquidity. Seems to be a puzzling response since we have no idea how deep the hole is and who owes how much to whom. Fueled by mortgage deliquencies, we’re only 13% through resets. My bet is on debt/solvency. The market is sniffing that too.

    damn, this life vest is still too small….

  16. scorpio commented on Aug 15

    spud: yeh, i hear they’re sporting the new Depends, made in China, with the nifty lead lining. you can wear them furever!

  17. Joe Klein’s conscience commented on Aug 15

    I couldn’t believe what I was hearing. I thought Kudlow was a free market guy? And now he wants government intervention?

  18. Joe Klein’s conscience commented on Aug 15

    This Kudlow is gonna be like Cramer last week(or was it ten days ago?). He really is going off the rails. Claims the Fed should be buying crap, not the three day thing. I guess Kudlow isn’t for free markets when it involves his buddies.

  19. Suge Knight commented on Aug 15

    I called it! Dow to 12,500!!

    Big Suge

  20. Sven commented on Aug 15

    All this talk about Countrywide losing lifelines, possible bankruptcy and I see that “No Fee Refi” commercial about 10 times a day.

  21. montaigne commented on Aug 15

    Just out of curiousity:
    My mortgage is held by Countrywide. If they go belly up can I offer them $0.90 for my mortgage at auction?

  22. KirkH commented on Aug 15

    Oh man, Kudlow is so predictable. Whenever the markets go down he does a segment on terrorism.

    Also, notice he didn’t mention “Free Market Capitalism” prior to saying the government should bail out homeowners.

  23. montaigne commented on Aug 15

    er, $0.90 on the dollar for my mortgage…

  24. stormrunner commented on Aug 15

    I know I’ve already posted this but it really adds scale to the size of the problem, it spooked me the first time I saw it it spooks me even now that I’ve had a year and a half to get used to it. Remember CA is the world’s 10 largest economy I don’t know where that ranks it to US


    Eerily similiar the the Nasdaq pre crash. This probably won’t end well.
    Winston it gives a look at CFC’s home turf

  25. Joe Klein’s conscience commented on Aug 15

    Schiller just pointed out that Kudlow is nuts. LOL!! Kudlow is trying to tell the Fed to do something it can’t. He cracks me up.

  26. jake commented on Aug 15

    “zeitgeist”….knew the international bankers were setting up a crash when they pushed the sec to get rid of the uptick rule.it’s 1929 all over again….

  27. jkw commented on Aug 15

    I’ve often wondered whether or not it would be possible for a person to buy their own mortgage at fair market value. In theory, banks do sell mortgages so you should be able to. But I’m not sure if a bank would be willing to sell a specific mortgage instead of mortgages in general. If the bank realizes you are trying to buy your own mortgage, they are unlikely to sell it for fair market value. If you have the cash to buy your mortgage outright, you obviously aren’t a default risk.

    If you can buy your mortgage from the bank, it would make those option-arms really cheap (for people who actually had money). You get to live in the house for 2-3 years while paying 1-3% a year in interest and then buy the mortgage for half the price you agreed to pay for the house. Maybe even less. This assumes you actually have $300k sitting around in cash.

  28. scorpio commented on Aug 15

    montaigne: i think u had it right the first time. offer them 90c.

  29. Winston Munn commented on Aug 15

    We poor shmucks on blogs have been yammering about this for some time. It’s kind of nice to see a respected professional economist validate our claims:

    Nouriel Roubini: “Second example: today any wealthy individual can take $1 million and go to a prime broker and leverage this amount three times; then the resulting $4 million ($1 equity and $3 debt) can be invested in a fund of funds that will in turn leverage these $4 millions three or four times and invest them in a hedge fund; then the hedge fund will take these funds and leverage them three or four times and buy some very junior tranche of a CDO that is itself levered nine or ten times. At the end of this credit chain, the initial $1 million of equity becomes a $100 million investment out of which $99 million is debt (leverage) and only $1 million is equity. So we got an overall leverage ratio of 100 to 1. Then, even a small 1% fall in the price of the final investment (CDO) wipes out the initial capital and creates a chain of margin calls that unravel this debt house of cards. This unraveling of a Minskian Ponzi credit scheme is exactly what is happening right now in financial markets.”

    The unraveling of a Minskian Ponzi credit scheme – I couldn’t have said it better.

  30. Winston Munn commented on Aug 15


    Gov. Arnold better get the soup kitchens warmed up when that chart reverts to mean.

  31. Eclectic commented on Aug 15


    There for a while today, I thought one of your Big Mouth Bombastia sufferers (infection of Bombastus Hyperbolus) from just l-a-s-t e-v-e-n-i-n-g was going to set what I assume would be a *record* for the GSNT show.

    To BK a recommendation before the next sunset.

    She-e-i-i-ittttt!… That would be a motor trucker!…Mothaafuuuckkkaaaa it would!

  32. Lloyd commented on Aug 15

    NYC real estate…watch out below! Maybe I’ll be able to buy a place for $800/sqf (yeah, that’s 20% down which is still too high). It’s funny how nervous the news media/markets/talking heads are when we’re only flat for the year. One thought I have is that if 2006 performance was driven by all of this funny money/easy leverage, it’s possible to go back to Jan ’06 levels for no good reason. That’s still only 9% down from here. Hardly a panic but I guess it will be to some given all of the leverage. Maybe I’ll skip the NYC apartment and start bidding on Hampton houses.

  33. David commented on Aug 15

    ‘Chaos has come again’

    Kudlow said Rome is burning, he wants the public to believe that government is always the solution.

    I think the Fed is not the solution to our problem, government started this problem. Laissez-faire or free markets are the solution.

    His “full of sound and fury; signifying nothing.”

  34. jake commented on Aug 15

    buy a gun…there’s going to be blood in the streets…its a different country we live in now…far different than in 1929

  35. Furioso commented on Aug 15

    That cleveland.com story on Countrywide’s $100 checks being refused by some Mayberry, Ohio recording office is comical, not ominous. Maybe Aunt Bea’s been reading too many blogs.

  36. Pool Shark commented on Aug 15


    Warren Zevon said it best:

    “Send lawyers, guns, and money…”

    Well, taking Warren’s (and the Mogambo Guru’s) advice; I’ve been stoking up on plenty of gold, firearms, and ammo. And I are a liar lawyer; well, same thing.

    “Bring it on.”

  37. montaigne commented on Aug 15


    Well, thankfully I don’t have $300k in mortgage debt … much, much less. Nonetheless, I have to wonder why some monster corporation can buy my loan for say $0.85 on the dollar if Countrywide goes belly up yet me as the borrower can’t go refinance with a different bank for $0.90 on the dollar.

  38. Eclectic commented on Aug 15


    I’ve never seen anyone crap the bed of unrestrained free-market capitalism as fast as you have.

    How could you face ole Adam Smith?

    He’d think you were a leftist commie.

  39. Winston Munn commented on Aug 15


    Maybe this will have more impact on you than Aunt Bee.

    From “Gomer” Bloomberg:

    “Aug. 15 (Bloomberg) — Countrywide Financial Corp., the biggest U.S. mortgage lender, fell 13 percent, the most since the 1987 stock-market crash, after Merrill Lynch & Co. raised the possibility of bankruptcy.

    “Effective insolvency’ would result if creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today.

    Shareholders shouldn’t `understate the importance of liquidity,’ Bruce wrote. `If liquidations occur in a weak market, then it is possible for CFC to go bankrupt,’ said Bruce, who downgraded Countrywide to `sell’ from `buy.’ The company trades under the ticker CFC.”

    G-o-o-l-l-y. Shizzam! Surprise, surprise, surpise!!!

  40. Trainwreck commented on Aug 15

    “I think the Fed is not the solution to our problem, government started this problem. Laissez-faire or free markets are the solution.”

    I have to agree and disagree on this one. The government should not be in the business of extending entitlements to wall street pinheads and create a resultant moral hazard.

    At the same time part of the reason we are in this pickle is the lack of regulation in the mortgage industry and the hedge fund industry. By allowing industry players to create the illusion of no risk, government has allowed this nightmare to take shape.

  41. Idaho_Spud commented on Aug 15

    Kudlow is *not* a leftist commie. Leftist commies want to use government funds to help out the unfortunate, provide health care for uninsured kids, and ensure clean air and water.

    Kudlow is a rightwing commie.

  42. Pool Shark commented on Aug 15

    Yen up to 116.25 and climbing…

  43. montaigne commented on Aug 15


    In defense of a true free market (we’ll never see it), I’d have to point the finger at the cheap and easy credit created by the Fed as the reason for the “illusion of no risk.” There’s not much risk it seems when the money is easy to get.

    Industry players simply saw an opportunity and ran with it. Now how much of a dance they did with the Fed to get the party started certainly raises concerns, but nonetheless it seems to be ultimately a currency issue. And if I’m write about those pushing for Laissez Faire and the free market, they would probably support a gold standard or something to judge currency internationally by vs. the good faith of the U.S. Gov’t.
    By allowing industry players to create the illusion of no risk, government has allowed this nightmare to take shape.

  44. stormrunner commented on Aug 15


    Check out the home page of that site also, they make a good case for the housing wealth effect as a percentage of GDP and the implications moving forward when that reverts to mean.

    Completely credible sourced from FED’s – Flow of Funds Data.
    I say this because people see the domain name and probably go yeah crack pot site and don’t bother to look.


  45. Cherry commented on Aug 15

    Yeah, “Free” Markets equal=depression. That is how they correct the inbalances. What the FED is trying to do is bring the inbalances in control overtime without panic. If it takes a few mild recessions, so be it……and it will.

    Trust, me, you people didn’t live in the 19th, early 20th century and it shows. There was a VERY BIG reason why Socialism became a popular mass movement. Unregulated market corrections are NASTY. VERY NASTY.

  46. Isaac commented on Aug 15

    If the fed is going to just pump liquidity into the market, why have them buy up CDOs and subprime slime? Why not just buy the land? The country could use some more national parks, at least there is intrinsic value to be had.

  47. jake commented on Aug 15

    one good outcome of this credit crunch……not once did kudlow say ” the greatest story never told” during tonights show.

  48. Furioso commented on Aug 15


    I was short CFC entering today’s market but that was more of a psychological rather than a fundamental play. Panic is in the air, clearly, and panic can be quite profitable. Noise, whether it emanates from the big financial media or from a small midwestern news-site, only contributes to the growing irrationality.

    I sense that some here would be just thrilled if CFC went under. Practically orgasmic.

    Can’t say I understand that, not one bit.

  49. Suge Knight commented on Aug 15


    If CFC goes under, Simi Valley will no longer exists. CFC drives the economy of that city. I doubt CFC will go under but then, you never know I guess.

    Big Suge

  50. Eclectic commented on Aug 15

    It involved pumping liquidity…

  51. scorpio commented on Aug 15

    we’ve got to save Simi Valley!!

  52. Suge Knight commented on Aug 15

    LOL, yes, let’s save Simi and all the hot chicks who live there!!!!!!!


  53. MarkM commented on Aug 15


    Quit while you are ahead , man.

  54. Short Man commented on Aug 15

    “If CFC goes under, Simi Valley will no longer exists. CFC drives the economy of that city. I doubt CFC will go under but then, you never know I guess”

    – – –

    Don’t forget to add in the Amgen job cuts. Average salary at head office is over $150k.

  55. Winston Munn commented on Aug 15

    Furioso wrote:
    “I sense that some here would be just thrilled if CFC went under. Practically orgasmic.

    Can’t say I understand that, not one bit”

    Thanks for the reply. I am in your camp for not wanting CFC to go under – I am not prepared to see a crisis of that magnitude; however, I think we would be burying our heads in the sand if we didn’t address that possibility.

    As I posted earlier today – just how bad will this crisis get?

    If the mortgage backed securities markets were simply locked up due to fear and panic, that would be a liquidity crisis; however, with so many mark-to-model valuations crumbling, I fear that Nouriel Roubini is right that this is a debt/solvency problem.

    If that is the case, no player is too big to avoid risk – not even the primary dealers.

    If CFC were to fail, that would be the “shock heard round the world”.

    We need to acknowledge the risk is real.

  56. Eclectic commented on Aug 15


    Arf Arf!

  57. wunsacon commented on Aug 15

    montaigne, when you show up at your lender’s office to buy back your mortgage, show up haggard and ask if they’re hiring.

  58. Furioso commented on Aug 15

    I’m afraid to say anything to Suge Knight.

    But you are correct, sir. Amgen and Countrywide are two of the largest private employers in the area. Doesn’t bode well for the local economy – housing in particular.

    CFC will survive. Only a systemic credit meltdown would bring it down (and many other big players as well), and the Fed ain’t gonna let that happen.

    If CFC is having issues borrowing short-term it shows that the credit markets are completely, utterly out-of-whack.

    I think the Fed’s recent actions should be seen in this context. No bailouts, just keeping the markets functioning until pricing normalizes and fear subsides. If lending panic is left unchecked it could lead to a nightmare scenario of cascading defaults, insolvencies, etc.

    Isn’t that what the Fed should be doing?

  59. Suge Knight commented on Aug 15

    Short Man,

    Amgen is in Thousand Oaks I believe, well, we’re saying CFC going under, not AMGN. However, lots of people who work at CFC Simi live in TO. I can’t imagine CFC going under. I haven’t heard of any “layoffs” yet. If they do announce that, then the stock will sink like a boat. I can’t imagine, the huge buildings in Tapo and Madera closing down. I can’t. Not overnight at least.

  60. Furioso commented on Aug 15


    I can see CFC being forced into Chapter 11 because of an inability to borrow sufficiently short-term. But that is the result of a serious external credit malfunction not some fundamental flaw in their business model. The mortgage business is a good one and CFC is a mature market leader.

    That near-term risk (however remote) and the psychology that now attends the stock and the industry makes CFC a great short – less so today than yesterday.

    Long-term, I think CFC is a potential buy. At least worth watching. If it dips into the mid-teens it might be too cheap to pass up. Countrywide might be the closest thing to a “brand-name” stock in the mortgage business.

  61. Suge Knight commented on Aug 15


    Unless you look like Vanilla Ice, you have nothing to worry about. I just can’t picture CFC closing down or filing BK.


  62. Winston Munn commented on Aug 15


    I am only using CFC as an example because of its size, not that I have anything against the company. And it is a Fed primary dealer.

    My only point being that IF CFC were to declare insolvency, the carnage from then on would be horrific – not because of CFC, but because that would signal a systemic collapse of unprecedented proportions.

    At least, that is how I see it.

  63. Furioso commented on Aug 15


    I think we’re saying the same thing, just looking at matters from slightly different angles.

    This conversation has helped me crystallize some thoughts on CFC.


  64. Sammy20 commented on Aug 15

    Seeing Kudlow completely contradict himself and his views is very satisfying.

    Hey Barry, you need to post another Dennis Kneal top article. That Buffoon absolutely nailed the top at 14k with all his bluster.

  65. DC commented on Aug 15

    I’m with Furioso and share his rationale for Fed action. Moreover I think the “moral hazard” concept is way overblown.

    It’s as useless as lobbying reform here in DC — the money will always find a way into the system. Nothing Ben B does will keep a determined quant from swinging for the fences with the latest “foolproof” model and somebody else’s money.

  66. whipsaw commented on Aug 15

    Watching CFC burn brings back a painful memory. Around a year ago, I bought puts with either a March or April 07 expiry based on the idea that what we are seeing now would happen before then. That didn’t work out and I puked them up along about December while they were still worth something- not a big loss but a very irritating one as I knew damn well that these guys were going to their knees eventually. Great idea, bad execution, but I am pretty sure that at the time I bought, there weren’t any longer term options available or at least they were overpriced given things as they existed.

    Anyway, this has revived an idea of mine to publish an anti-timing newsletter that identifies long and short targets (I rarely miss on that part) then provides real time trading info by email so that you can do the opposite of what I do and reap the benefits!

    Doubt my anti-timing skills? Hah, I bought March SPY calls at 15:35 last Wednesday. What happened on Thursday? Surely you want to know when I sell them? :)


  67. Eclectic commented on Aug 15


    The time is right… so I’ll reproduce part of my work on Perceived Liquidity. As you know, I contend that I have demonstrated theoretically a better understanding of the behavior of money in crisis macroeconomic conditions than either Classicists or Keynesians have, and the recent events have put together a remarkable opportunity to illustrate it. So… let’s review and restate part of my case:

    Liesman, you need to be reading this:

    Perceived Liquidity Substitution Hypothesis:

    (I) The sum total of all money in an economy is held in only two forms; (i) perceived liquidity, and (ii) deferred liquidity, and market participants hold these forms subjectively and interchangeably.

    (II) Perceived liquidity is always greater than conventionally held nominal liquidity measured at the same time, regardless of economic state.

    (III) Perceived liquidity is at the steady state equal to nominal liquidity multiplied times a hypothetical terminal low coefficient of perceived liquidity that is always greater than 1 (one).

    (IV) Perceived liquidity is at all times substitutable for nominal liquidity transactional demand at a rate of substitution that is always greater than zero, and the rate of substitution varies in direct proportion to variations in the coefficient of perceived liquidity.

    (V) Upon an upset to the steady state the coefficient of perceived liquidity will increase to some higher but not unlimited value, and the increase will be proportional to the severity and speed of the upset.

    (VI) An increased coefficient of perceived liquidity can not resume its former steady state value until economic conditions resume the steady state.

    Any critical reader may at this point assert that the coefficient in question (my coefficient of perceived liquidity) is simply an alternative expression of velocity. My reply is that since, according to classical theory, MV = PQ, and therefore V = PQ/M, that no change in velocity could be demonstrated until an observance of sequential nominal money transactions is recorded, since a change in that ratio expresses a change in the velocity. And so a change in velocity would have to precede the upset to the steady state, if it were to have the same effect on the participant, rather than if the upset preceded the change in velocity, which, given there is a change in velocity after an upset, is the more likely course of cause and effect.

    Saying this in one other way; even if velocity is assumed to have modulated a steady state, it could only have done so after an upset had already caused a modulation in perceived liquidity. Frankly, velocity might in this circumstance initially increase in nominally measurable terms after an upset, for a period, although it is likely to eventually decline.

    The change in perceived liquidity will obviate central bank actions to expand the money supply, because aggregate perceived liquidity, relative to aggregate nominal liquidity measured at the same time, will have already risen and begun to absorb the nominal money expansion by being substituted for its transactional demand. Its transactional demand thus reduced by substitution, nominal money expansion will produce no corresponding linear modulation of economic output. This is much more critical when the nominal money supply has declined as a consequence of the upset, because that is when the central bank will recognize it and have the greatest intentions for expanding it.

    The academic and policy implications of this should be staggeringly obvious. It would be relatively as though I have suggested that the sun rises in the west to suggest this phenomenon; that the element of conventional monetary policy thought to be most needed in a crisis is instead: sterile.*

    *(This is the reason for one guest to remark tonight on Kudlow that all the liquidity being injected by the Fed is finding its way into 90-day T-Bills. If indeed the recent events have tripped my coefficient of perceived liquidity to a higher state, then monetary policy is already in a condition of being S-T-E-R-I-L-E, just as I’ve recently predicted would possibly be the case. Thus, monetary expansion is likely even harmful and may delay the equilibrium that would correct the anomaly.)

    Time will tell, and it is likely that the intensity of upset registered recently by mortgage events will dictate whether monetary expansion can succeed. I suspect it is already sterile.

  68. Werner Merthens commented on Aug 15


    Not a single bull among them anymore. We should see a decent bounce soon at the very least.

  69. Becky commented on Aug 15

    Somebody ought to remind Larry Kudlow that this is how “gales of creative destruction” work and that he has often said how constructive they are.

  70. Winston Munn commented on Aug 15


    I would agree.

    Nouriel Roubini had a very interesting piece today about the difficulty in pricing risk due to the opaqueness of the assets and risks.

    I thought that was an excellent assessment – how can the markets price in risk when no one really knows what is going on, who is at risk, how much is the risk, and how far it goes? At the present, it is a knife fight in a dark room and a lot of blood is being spilled.


    I have you one-upped:

    I shorted Countrywide Finance on the morning of the day the buyout rumor hit – the martinize trade – in by 9, stopped out by 5.

  71. Liv commented on Aug 15

    While we are confessing about our blown CFC trades, I bought Jan 08 puts at 35 and 25 when the stock was at 35. It went to 45. I sold for a 50% loss. Had I held on, it would now be up 800% from where I started. This was my first speculative options trade, and I learned a valuable lesson: have an exit planned. I didn’t, I panicked, and I am out about $15K.

  72. mhm commented on Aug 15

    I see Merrill going for CFC’s neck like that 80’s movie Highlander: there must be only one standing.

    Merril questioning CFC’s future nearly kills any prospective credit line… One down, some credit left for the remaining, supposedly stronger credit starved institutions.

  73. mhm commented on Aug 15

    And USD/JPY just crossed bellow 116… of course I covered at 116.55, for a 100pip profit but too early.

  74. Dk commented on Aug 15

    “Leftist commies want to use government funds to help out the unfortunate, provide health care for uninsured kids, and ensure clean air and water.” – idaho pud

    oh i see, you mean clean air & water like that found in Russia and China lol what a moooooron

  75. Idaho_Spud commented on Aug 16

    hehe Dk.

    Course ol’ Kudlow didn’t suggest that the fed bail out *individual* borrowers.

    Nope. That rightwing commie wants the fed to buy MBS trash from hedgies and investment banks that got caught with their pants down. That way they can get bailed out *and* still collect mortgage payments.

    Careful about the name-calling too. Barry bans a$$hats. It’s highly likely that you are one of them.


  76. pj commented on Aug 16

    Yen at 115.90. We live in interesting times.

    BR: You give data and then vanish. Some insights please.

  77. wonderin commented on Aug 16

    read that blackstone is moving to buy this stuff on the super cheap. maybe merrill is priming for a buyout of cfc/its assets by a client? there’s still money to be made, no?

  78. Peter D commented on Aug 16

    Another big raspberry for Kudlow. He’s now advocating that the Fed starts buying sub-prime and jumbo mortgages in open market operations. This from the supposed champion of free market capitalism and Joseph Schumpeter’s creative destruction. I’m sure the Economics Dept of Princeton U. makes a collective cringe whenever this charlatan opens his mouth.

  79. W.Edwards commented on Aug 16

    Kudlow is a schmuck! This current downturn in the market is only showing how big a schmuck he is!!

    Overseas markets taking a pounding, US futures massively negative. Both Poole and Paulson have made statements indicating that the market needs to take it’s lumps, the economy hasn’t sufferred to any measureable effect (yet) and a government rescue is still not on the immediate agenda.

    Gentlemen, mark today’s date for the markets are shifting from “fear” to “panic”.

  80. tjofpa commented on Aug 16


    Investment, Commercial and Mortgage Banking all under one roof!

    Now wouldn’t that be grand.

  81. unpopular opinion commented on Aug 16

    >> >> “Leftist commies want to use government funds to help out the unfortunate, provide health care for uninsured kids, and ensure clean air and water.” – idaho pud

    >> oh i see, you mean clean air & water like that found in Russia and China lol what a moooooron

    No, not a moooooron. Don’t implicitly compare commie country X with the US as your baseline unless many of the other variables (relatively homogenous religion, amount of arable land, length since of time since revolution) make it a fair comparison. Choose a more appropriate country as your baseline (sometimes the country itself).

    Compare China before and after they turned capitalist. (Much more enviro problems. Tho, many things are improving.) Compare Fidel’s Cuba to Batista’s Cuba. Or compare Cuba’s stats (in the CIA factbook) to Guatemala’s or any other Latin American country.

    No, I’m not advocating communism for this country. But, I do believe we should let other countries choose it and not try to kill their leaders for 40 years (and thus turn the leader paranoid).

  82. AD commented on Aug 16

    “I see Merrill going for CFC’s neck like that 80’s movie Highlander: there must be only one standing.”

    I believe the phrase you are looking for is “There can be only one.”


    Also, to be fair, even if the current crop of mortgage lenders blow apart, new ones will rises from the ashes like a financially innumerate phoenix and repeat the act down the road.

  83. Idaho_Spud commented on Aug 16

    I agree with unpopular opinion. China/Russia hardly qualify as a communist country. Where is the central planning? Where is the equal sharing of resources? These countries are pretty much a free-wheeling unregulated capitalist paradise, but with socially oppressive governments.

    China for instance takes the very worst aspects of capitalism (willingness to foul one’s nest forever to make a few bucks right now) with the very worst aspects of totalitarianism (complete indifference to suffering by the masses).

    For obvious reasons DK chose not to mention Cuba or Vietnam, which while dirt-poor with respect to the mighty US, somehow manage to provide medical care to nearly everyone.

    ps Kudlow is currently (rightly) being taken to the woodshed on his own blog for being a hypocrite. i.e. bleating for help while the market corrects, but not wanting anything at all in the market’s way on the way up.

    That’s Rosie O’Donnell gun-control level hypocrisy IMHO.

  84. montaigne commented on Aug 16


    I assume you’re joking that Cuba or Vietnam have superior health care services than the U.S. Let’s just take a simple survey of commentaters on this site to see what the public perception might be:

    Those in favor of going to Cuba or Vietnam for cancer treatment, mri’s, pediatric care, long term care, etc., put a #1 in your post.

    Those in favor of staying in the US for cancer treatment,mri’s, pediatric care, long term care, etc., put a #2 in your post.

    Sure, a communist or socialist state may say it gives everyone equal healthcare. The only way to do that is to ration services which is why you will hear about folks coming to the US for healthcare that their own socialized state cannot or will not provide.

    Here’s a good read:

    Oh, and here is my vote: #2.

  85. Idaho_Spud commented on Aug 16

    no no no. Nowhere did I say “superior”. Where did you read that? I said that in spite of being dirt-poor, they somehow manage to provide medical care to nearly everyone.

    How do you read “superior” into that?

    Cato, if they had their way, would stop government-funded innoculations for children.

  86. Idaho_Spud commented on Aug 16

    Besides, the point of my original post (before it was hijacked), was *not* a medical care debate, commie vs capitalist.

    It was about Kudlow’s hipocrisy re assymetric government intervention in the market (aka welfare for the wealthy when the market begins to tank), which seems to know no bounds.

    The other point of that post was to focus attention on *who* he wanted bailed out. Not individual borrowers who had gotten in trouble – which BTW would have saved the lenders who were also in trouble.

    No, he wanted *only* the lenders and hedgies let off the hook for their poor decisions, and the homeowners (who also made poor decisions, but don’t matter to Kudlow) left to bleed.

    Companies should be allowed to fail when they screw up badly. To propose to do otherwise is… wait for it… Communist.

    My guess is that a lot of this MBS junk will get monetized and we all will suffer from a weaker dollar and higher prices.

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