Rick Santelli on CNBC saying anyone who says we will make

[slipslidingaway]

money on this deal does not know what they are talking about.

[bigscott]

1. Rick is the only sensible one on CNBC nt

[slipslidingaway]

2. Yes, I think he is one of the good guys, Mark Haines has been

pretty good lately as well.

[buzzard]

3. That is what I think as well no one knows what is held in those toxic papers or rather Paulson sure

sure does and wants to pawn off the losses that are sure to come on the taxpayers. These Credit Default Swaps are the biggest Ponzi scheme around and the only new money produced were as a result of the fees and commissions that were paid in order to re bundle this shit.

[slipslidingaway]

6. Exactly, we do not know what we are buying, how much we are

paying and have no clue as to their future value.

And if you bought gold in the late seventies, it only took thirty years to get back to even.

:P

[girl gone mad]

11. Read up on Credit Default Swaps.

Some have no underlying value and some are actually liabilities.

[slipslidingaway]

12. Thanks, I have read quite a bit, although I certainly could not

teach a course on the subject.

[slipslidingaway]

13. From March 2008...

http://contraryinvestor.com/2008archives/momar08.htm

"...What is obviously apparent, we believe very meaningful, and perhaps little understood in the greater investment community, is the growth in magnitude over the 2004 to present period in the CDS market. From about $1 trillion in notional value outstanding at year-end 2003, we're looking at just shy of $14 trillion in notional exposure as of September 2007 for the US banking system singularly. A near fourteen-fold increase in three and one half years. We ask you, do you see this fact being discussed or at least being mentioned on the "front page", if you will? Do you even see this mentioned in discussions or articles regarding what led up to the current mortgage credit debacle? Do you see Senators and other assorted politicians grandstanding in their demands for investigations about how this could have come to pass? We need to at least think through potential investment consequences if indeed credit default swaps become the next credit market shoe to hit the floor in some manner. Why? Because at the periphery it’s already starting to happen..."

[Lex]

4. that's opposite of what Obama said this morning

obama said the taxpayers might end up making some profit

[buzzard]

5. Well if that is what he said then he truly doesn't understand what is held on those books and why

Paulson wanted no oversight, this will be a loss to taxpayers for sure. I am not being negative towards Obama in fact we Canadians( the majority) can't wait for him to become the next President.

[slipslidingaway]

9. Might and yesterday he used the word assurance...

:shrug:

“The bill rejected yesterday was a marked improvement over the original blank check proposed by the Bush Administration. It included restraints on CEO pay, protections for homeowners, strict oversight as to how the money is spent, and an assurance that taxpayers will recover their money once the economy recovers."


Maybe we will, but should we risk putting this enormous debt on the backs of our children while ignoring alternative ideas???

[gravity]

7. Rick Santelli is a character

He provides colorful commentary, but he is no way an expert

[girl gone mad]

8. Is the former head of the FDIC an expert?

Because he has said the same thing.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/26/AR2008092602200.html?nav=hcmodule

[slipslidingaway]

10. Thanks :) n/t

[gravity]

14. Warren Buffett says that they can make money

If you want to play that game

[girl gone mad]

15. Warren Buffet..

has 5 billion reasons to say that.

ETA: Wait just a second.

Even Warren thinks the proposed pricing plan is ridiculous. As a reminder, Paulson and Bernanke want to buy trash assets from banks at a theoretical "hold-to-maturity" price that is well above the current market price. The trouble with this is that the "hold-to-maturity" price--if actually different than the market price (unlikely)--is not stamped on the assets like a price tag on a can of soup. The market is generally recognized to be the best estimator of "hold-to-maturity" value on the planet. So to suggest that a tiny team of public servants can glance at the assets, determine a fair price, and then not get taken to the cleaners is absurd.

Warren recommends that the government buy the trash assets at market value. Even this is a gift, since banks have no doubt done everything they can to avoid taking the full losses they should. But paying market value is a heck of a lot better than paying some theoretical "hold-to-maturity" value that rewards the banks for making dumb-ass bets.

Why don't Bernanke and Paulson want to pay market? Because they don't think the banks will sell their assets at that level. To which I say, "tough."

If you want the banks to play ball, set a time limit (sell your stuff now or forever rot in bankruptcy court). And demand an equity stake in exchange for your money--because you deserve one.

On the latter, note that Warren Buffett didn't buy trash assets from Goldman at a huge premium to market value. On the contrary, he let Goldman keep its assets and invested in a senior preferred stock paying a 10% dividend, with a huge bonus warrant kicker on the back end. The government should drive a similarly hard bargain.

http://www.huffingtonpost.com/henry-blodget/even-warren-buffett-agree_b_128919.html

[slipslidingaway]

17. Thanks again :) n/t

[slipslidingaway]

16. Nobody wants to play a game, but some of us just think we are

being taken in with this plan.