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September 2008

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- John Sinteur on Minnesota Senate Recount: Challenged ballots: You be the judge John, as for 1), have you seen the other samples? Not all of them are this clear. As for 2) and 3), yes, indeed.
- John Sinteur on Big Three CEOs Flew Private Jets to Plead for Public Funds The daily show had footage of the hearing where the execs where asked to raise their hands if they were prepared to give up their planes. None did. Very funny...
- Mudak on Minnesota Senate Recount: Challenged ballots: You be the judge Whatever else is true, Minnesota law would count this as a vote for Franken, even if they did it wrong. One very important thing we shouldn't overlook is that the Republican Party tried all sorts of dirty tricks to convince potential Democratic voters either not to vote or to vote incorrectly, so it may not be purely voter stupidity. In Philadelphia, they were passing out brochures that said that, due to anticipated high turnout, Republicans should vote on Tuesday and Democrats should vote on Wednesday. *shrug*
- John on Minnesota Senate Recount: Challenged ballots: You be the judge Well, three ways to look at this one I think: 1. It is pretty clear where the intention was since the machine's optical registration box was circled next to just one candidate. 2. This is a failure of the user interface. I read a similar discussion about web forms that are too strict about how user entered data is formatted. This form's interface, requiring the voter to fill in a small oval to cast their vote us clearly too strict. 3. This is being used as a mechanism to disqualify voters who are either too stupid to follow instructions, or too lazy to read them. I'd say count the vote, and fix the user interface to be simpler and more tolerant of human impreciseness!
- Maarten on Big Three CEOs Flew Private Jets to Plead for Public Funds Aw c'mon, they'll soon have dumped four of the seven planes they leased until recently. Now that's sacrifice.
- Roland Hesz on Yugo, 1953-2008 Yes, that's what I read too, so far Neelie Kroes holds out on it. I hope she can thwart the "oh, fuck capitalism, we are LOOSING!" movement.
- Roland Hesz on Converting Dead Mormons into Homosexuals It is hilarious. What the Mormons declare is "Hey, God is Powerless!" and the Jews and Catholics who reacted with such a panic they did send the clear message "God is Powerless!". How hilarious.
- John Sinteur on Yugo, 1953-2008 you may want to time-stamp that comment, that zero may change to EUR 50b any second now. News: 1, 2, 3.
- Roland Hesz on Yugo, 1953-2008 So far the EU is sending 0EUR to help car manufacturers. It is still debated whether it's needed or not, however Germany stated that they will help Opel. But Germany is not the EU. That's the current status of the car bailout in Europe.
- John Sinteur on Big Three CEOs Flew Private Jets to Plead for Public Funds Here are current CEO compensation numbers. Ballmer makes about 1.2mil, I guess Bill Gates made a similar amount.
- John Sinteur on Yugo, 1953-2008 Have you seen how much money Europe is sending to struggling car manufacturers, including subsidiaries of GM?
- Maarten on Yugo, 1953-2008 "We"? I didn't know you were going to help out! That's sweet of you.
- Bill L. on Big Three CEOs Flew Private Jets to Plead for Public Funds I've never, n-e-v-e-r had to be at an airport 2 hours early. I've often wandered in with less than 40 minutes to my flight. Are we guessing that they have lots of luggage to check in and haven't bothered to check-in electronically? Southwest, business select, one way, out one day and back the next, is $176 X 12 = 2,112. Not exactly 12 grand. 12k only pans out if you assume they "have" to travel first class. The shortest flight listed is about 1 hour and 24 minutes. Ohh noes! How will they avoid spilling the corporate beans for nearly an eternity! Are we to think that all the execs traveled on the same plane? Jet-pooling?
- John Sinteur on Big Three CEOs Flew Private Jets to Plead for Public Funds You're forgetting one major cost factor: public image. This story is all over the news. At the cost of two or three extra hours, their image could have been one of real "cost-sensitve" CEO's. Isn't that really worth it? And any CEO not aware of public image is too stupid to be in that job.
- Jason on Big Three CEOs Flew Private Jets to Plead for Public Funds How much time is lost by the GM representatives when they have to check in for a flight two hours early, or when the GM representatives are not to talk about business during the flight due to insider trading concerns? The question is what is lost? When 12 people fly on a private jet it costs about $20,000. When 12 fly commercially to DC it costs about $12,000. Is a $8,000 savings worth the time lost? Isn’t it really worth it in the long run? http://nomedals.blogspot.com
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Government Seizes WaMu and Sells Some Assets

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution.

[..]

Washington Mutual, with $307 billion in assets, is by far the biggest bank failure in history, eclipsing the 1984 failure of Continental Illinois National Bank and Trust in Chicago, an event that presaged the savings and loan crisis. IndyMac, which was seized by regulators in July, was one-tenth the size of WaMu.

update: this presentation from JP Morgan is interesting. Look at page 16. In the top middle there’s a percentage. They’re looking at 20% losses on Alt-A mortgages and 40% on subprime. That is a metric shitload of money. If WaMu is typical, and those number can be translated to national numbers, the $700 billion plan is not going to be near enough…

[Quote:]

This WaMu deal proves the FDIC, Fed and Treasury are running wargames behind the scenes. E.g., if the deal doesn’t pass by such-and-such day, sell this bank to that one, etc. They have no confidence in congress, no confidence in the candidates, no confidence in the president, no confidence in the market to move things forward. Maybe they never thought it would get passed, but thought it would buy a few days in the market to iron out some deals.

The govt isn’t supposed to be brokering deals. That’s what the investment banks are for. Oh, right, we don’t have any more investment banks.

This entry was posted on Friday, September 26th, 2008 at 8:32 and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

13 Responses to “Government Seizes WaMu and Sells Some Assets”

Maarten Says:
September 26th, 2008 at 21:25
What inspired you to lift that particular bit from MeFi? IMO it doesn’t accurately represent the sentiment of the full comment–the comment is railing at Bush & Congress for their lack of ability to come to a resolution, whereas you highlighted a bit about the people who *are* actually taking some action… and it’s ridiculous in several places. (”wargames”, “government isn’t supposed to..” (oh?!), “no more investment banks” (funny, who bought WaMu again?)). Strange choice on your part.
John Sinteur Says:
September 26th, 2008 at 21:31
The bank that bought WaMu isn’t an investment bank any more. The changed the charter earlier this week.
Roland Hesz Says:
September 27th, 2008 at 11:39
Yeah, I can back up John there, every Investment bank has been promoted this week so they can take on additional and different kinds of fundings and money.
J.P. Morgan, Morgan Stanley, Goldman Sachs. they are not investment banks anymore.
Maarten Says:
September 28th, 2008 at 2:40
Semantics, right? You’re taking “investment bank” to mean “commercial bank”, whereas I would take it to mean “bank that handles securities transactions, IPO, M&As, etc.”

The context here is the previous sentence: “investment banks are for brokering deals”. In other words, we’re talking about the kinds of banks that do M&A work. You’ll find a nice list here and you might notice a good chuck of the list consists of banks that are also commercial banks.

Summary: it’s still rhetorical hooey.
Maarten Says:
September 28th, 2008 at 2:41
(First sentence should have read:

You’re taking “investment bank” to mean “bank that is not also a commercial bank”, whereas…
Roland Hesz Says:
September 28th, 2008 at 14:31
You might notice that maybe the CEO of Morgan Stanley knows better than you. But maybe he is mistaken. No problems there
Maarten Says:
September 28th, 2008 at 18:02
Heh heh heh. I like your move–trying to win a discussion about rhetorics with a purely rhetorical move that completely ignores the argument made by the other party.
John Sinteur Says:
September 28th, 2008 at 21:51
Sounds like he’s got a career in politics ahead of him. Or in banking.
Roland Hesz Says:
September 29th, 2008 at 10:50
Maarten - is Wal-Mart a grocery shop? Or is a toy shop? Or a bakery?
Investment bank means that: investment bank. Not commercial, not public, not whatever else.
You can argue that it’s “rethoric and play with words” but then you could argue that there is no difference between cancer and cisticis.
Except that you die from one of them, but it’s purely a play on words.

You can take it as a “rhetoric hooey” but unfortunately we are not in a Carrol Lewis world, and I am not Humpty Dumpty.

‘When I use a word,’ Humpty Dumpty said, in a rather scornful tone,’ it means just what I choose it to mean, neither more nor less…

Also:

The last two major bulge bracket firms on Wall Street were Goldman Sachs and Morgan Stanley until both banks elected to convert to traditional banking institutions on the 22nd of September, 2008, as part of a response to the US financial crisis.[1] Citigroup, Credit Suisse, Deutsche Bank, HSBC, JP Morgan Chase, and UBS AG are “universal banks” rather than bulge-bracket investment banks, since they also accept deposits (though not all of them have U.S. branches.)

Source
Emphasis by me.

As I said, John Mack probably knows better than what kind of institution Morgan Stanley is than you, and that’s not a rethoric move, it’s simply he sits a bit closer to the truth in this case.
Roland Hesz Says:
September 29th, 2008 at 10:52
that was meant to be “better than you”.
Maarten Says:
September 29th, 2008 at 20:39
Again Roland, you’re arguing the semantics of the term investment banking, not responding to the actual content of my argument. The question in the OP is whether there are banks left that can broker deals. Goldman and JP Morgan are not ceasing their investment banking activities just because they’re becoming commercial banks. Then it goes on to say “Oh, right, we don’t have any more investment banks”. Yes, in some semantic, definition-based way you can say those banks are not “investment banks” but we do still have those very same banks that always have done and still will do investment banking. Hence, all rhetorics, no content. Hence, hooey.
John Sinteur Says:
September 29th, 2008 at 20:51
“investment bank” has a specific legal definition. An “investment bank” has different rules and obligations, and different oversight, from normal banks. Not having them any more is significant.
Maarten Says:
September 30th, 2008 at 0:15
*rolls eyes*

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Government Seizes WaMu and Sells Some Assets

13 Responses to “Government Seizes WaMu and Sells Some Assets”