All is Well . . . ALL IS WELL


Every time I read an article like the one below, I get a flashback to that scene towards the end of Animal House, when Kevin Bacon yelling to the crowd "All is Well . . . ALL IS WELL" — just before the mob pancakes him . . .

The beginning is the Pollyanna portion . . . further down, we get to the meat of the issue:

"Few analysts say the banking industry as a whole has turned the
corner. Nearly every major institution is wrestling with surging losses
tied to real estate, credit card and construction loans. But investors
are starting to recognize that the losses may not be as severe as they
had initially feared. They are also realizing that banks may have the
earnings power to offset bad loans and absorb further write-downs.

“It is too early to say things are getting better, but this is
coming off extreme fears,” said Mark Fitzgibbon, the director of
research at Sandler O’Neill & Partners in New York.

Financial shares have swung erratically during the last week and a
half as the Bush administration moved to bolster the nation’s two
largest mortgage finance companies, Fannie Mae and Freddie Mac, and
federal regulators seized a large California lender, IndyMac Bancorp.
But the sector roared back late last week after Wells Fargo, JPMorgan
Chase and Citigroup reported strong results.

Bank of America has another reason for optimism: The Countrywide
Financial Corporation, the troubled mortgage lender it recently
acquired, is now expected to turn profit this year, Bank of America
said Monday. When the acquisition was announced in January, Bank of
America said the deal would have no impact on earnings this year.

Still, investors fear that losses from Countrywide’s $111 billion
loan portfolio could spiral higher, and that Bank of America could be
saddled with billions of dollars in litigation costs stemming from
Countrywide’s business practices."

Now if I can only find that video clip of just him at the end . . .


Bank Beats Forecasts, Reassuring Investors 
NYT, July 22, 2008   


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What's been said:

Discussions found on the web:
  1. bluestatedon commented on Jul 22

    Bacon’s “All is well!” scene is perfectly paired with the scene when John Belushi drives away with the blonde in the convertible with the caption “Senator and Mrs. John Blutarsky.”
    That sums it all up for me.

  2. free markets! commented on Jul 22

    Companies may go belly up — but stocks will survive because short have been smoked out of the financial markets!

    Hurray! All is well.

  3. joe commented on Jul 22

    BR – another great video for the current environment is a SNL clip from the bubble time staring Alex Baldwin as a broker saying its a great time to invest, while he jumping out the window…anyone?

  4. ECONOMISTA NON GRATA commented on Jul 22

    Just in case anyone hasn’t noticed, the issue here is “that all is well”. Things are just honky dory. However that term does not apply to those who are stating it. Can anyone blame these guys for making efforts to move this toxic waste out of their pipelines…? They are vainly buying time. It’s all got to wash out somewhere, I bet it will be the treasury market in the end.

    Enchiladas anyone….?

    Best regards,


  5. VennData commented on Jul 22

    Current politician channeling future Senator Blutarski: Over? Did you say “over”? Nothing is over until we decide it is! Was it over when the Iraqis bombed the Trade Center? Hell no!

  6. Joe Klein’s conscience commented on Jul 22

    This sounds like an article(or was it on his show?) that Cramer did that BR commented on. Am I dreaming or did this guy steal Cramer’s material?


    BR: I don’t watch his show, and I rarely read him — so theft is doubtful . . . And we rarely agree!

  7. Steve Barry commented on Jul 22

    Speculators play a crucial role in our economic system. Commercial entities hedge against commodity prices to reduce their risk. Who takes the other part of those trades? Speculators, or “specs.” The system shuts down without specs. Businesses will not be able to hedge their risk efficiently. Small specs are often wrong at market turning points, as they are not as smart as the commercials. You have heard me mention the CTFC “Commitment of Traders Report”. This weekly report gives great insight on what the specs and commercials are doing for all types of commodities – gold, wheat, oil, dollars, stock indices. When too many small specs get into a commodity historically, you could use that as a contrarian signal. I’m not going to review every commodity, but for stock indices, small specs are flat to long…certainly not indicating a strong bottom here. But the system is self correcting like any free market. Specs cannot keep oil inflated indefinitely.

    You see now why it will be a great fiasco if congress votes today to mess with speculation.

  8. bluestatedon commented on Jul 22


    “Forget it, Bush is rolling.”

  9. CNBC Sucks commented on Jul 22

    Did I jump the gun or did BR already cover the bloodbath at Wachovia today?

    The stock was down 10% per the article but it’s only off now by about 50 cents per share (about -4%). I am continually amazed at how resilient the optimism is for American financial stocks.

    Now, CNBC is asking if it’s a good thing that the Russians (and other foreign investors) are looking to invest in the US.

  10. Steve Barry commented on Jul 22

    The stock was down 10% per the article but it’s only off now by about 50 cents per share (about -4%). I am continually amazed at how resilient the optimism is for American financial stocks.

    This misplaced optimism is actually moral hazard gone amok.

    BTW, you watching CNBC now? Broke into programming for a softball interview by Bartiromo and none other than GE chairman jeff Immeldt pumping an Abu Dhabi investment partnership. Amazing propaganda machine. Nice to own a financial puppet network

  11. Steve Barry commented on Jul 22

    CNBC has sunk to pumping their own parent.

  12. Steve Barry commented on Jul 22

    The genius Bartiromo, who scored ZERO on celebrity Jeopardy is really tough on Jeff. Hey CNBC Sucks, you should post this video prominently on your site.

  13. Steve Barry commented on Jul 22

    Maria: Thanks for discussing with us Jeff…we appreciate it.

    I am going to vomit.

  14. Chief Tomahawk commented on Jul 22

    BR, beyond Kevin Bacon, how about the climatic scene from “It’s a Mad, Mad, Mad World!”, where the entire cabal of greedy moneygrubbers overload the fire truck rescue ladder, causing it to swing about uncontrollably?

  15. Steve Barry commented on Jul 22

    Burnett trying to use OFHEO headline to dispute Shiller’s home price drop numbers.

    The bottom comes when Burnett cries on the air. Take that to the bank.

  16. CNBC Sucks commented on Jul 22

    I saw it. I even downloaded a video of Barforomo’s first pitch at Yankee Stadium to use the softball analogy, but doesn’t handle .flv files well and I am too lazy to upload to YouTube. Then again, that interview wasn’t softball, it was tee ball.

  17. bluestatedon commented on Jul 22

    “CNBC has sunk to pumping their own parent.”

    I think the more descriptive word is “pimping.”

  18. E commented on Jul 22

    WB is up 10%. That makes tons of sense.

  19. The Financial Philosopher commented on Jul 22

    For more recent delusion, I prefer Baghdab Bob or even Bush’s “Mission Accomplished” or perhaps Cheney’s “I think their in the last throes, if you will, of the insurgency.”

    Sometimes the truth is more difficult to digest than the delusion, at least in the short-term, and the delusion is easier to deliver as well as receive…

    “The ignorant mind, with its infinite afflictions, passions, and evils, is rooted in the three poisons. Greed, anger, and delusion.” ~ Bodhidharma

  20. Unscripted Thoughts commented on Jul 22

    Oh Barry…you really did pick one of the best movies ever to serve as a metaphor for this mess. And Bacon seems to be in several scenes that are apropos. The “All is well” one is great and another I suggest is the one in the Frat house when he is getting paddled by the Gothic-garbed Brother. Bacon is bent over holding onto his ankles (sounds familiar, no?) when ‘Bam’ goes the paddle and he painfully says “Thank you sir, can I have another?” Oh yeah…that movie is full of ’em.

  21. AGG commented on Jul 22

    This says that there is a lot of illicit liquidity out there:
    NVR profits DOWN 43%.
    Average daily volume DOWN 25%.
    Stock UP 8.9%.
    They’ve invented antigravity at wall street.

  22. Mike in NOLa commented on Jul 22


    Antigravity is right. Went off a couple of hours ago with SKF soaring. Makes sense after an $8.9B loss by a major bank. I come back and SKF is in the toilet. Fortunately, I have none at the moment. Don’t have CNBC here, but I can imagine the pump job on the TV now.

    BTW, does anyone else think that the $25B or whatever announced as the bailout price for the GSE’s is a lowball figure that will be used to pass the bill to let Paulson buy shares? Just like the original Iraq authorization given to W: We aren’t going to use it but it is good for showing we mean business. And look where we are now.

    I suppose W wants to leave us with two quagmires instead of one. Or is it three? Keep forgetting Afghanistan.

  23. Deflator Mouse commented on Jul 22

    “I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part.”

  24. leftback commented on Jul 22

    No rush Mike in NoLa, you have to let these bear market rallies run their course. Remember March ?? This one could go and go until oil bottoms out again, and that could be $100-110.

    With all of the moving of the goalposts that is going on, SKF may not be the best vehicle next time the bottom starts falling out.

    The REITs are defenseless, however, so SRS has some upside until such time as the government backs them up as well..

  25. Mike in NOLa commented on Jul 22


    Unfortunately, you got me intrigued about SRS and, after looking at it, I decided to take the plunge. Too early again; just like my SKF :( But, like the SKF’s, just need to be patient.

    Only thing that’s kept me up is the DUG and the SMN. I think SMN has a long way to go yet, as the worldwide recession deniers still hold court on CNBC.

  26. Tom commented on Jul 23

    Is the government’s plunge protection team stoking up financials ?