Henry Paulson
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[quote=norway401]Indy , the last part is what I think is the concern …the estimates are way off. It seems that everyone has not been able to get to the approximate number. Is it three trillion or what???[/quote] I have a hard time believing that many of the loans/financial instruments aren’t trading well below what they are actually worth, so I think the number proposed, if anything, is probably more than enough. Unless I heard our conference call folks wrong the other day, the worst of the worst, option arms are trading as a group at 60 cents on the dollar. This group has roughly 20% delinquency/non-pay/foreclosure. If that entire 20% goes into foreclosure and the banks/government realize exactly zero on all the foreclosed real estate, the pool is still worth close to 80 cents on the dollar today. No way do I think the pool is worth less than 60 cents on the dollar it’s indicated at, but who knows…I’m just one man’s opinion on the matter.
My expectation is that in the end, we will discover that while it ain't pretty, we are probably overly pessimistic at valuing things now, just as we were overly optimistic earlier.Indy …hoping that is the correct assumption/s? The magnitude of the problem is obviously impacting more than the U.S. economy and not being pessimistic where do the problems surface next?
Who knows. All I do know is that we’ve faced bigger problems in the past and survived.
[quote=Indyone]Who knows. All I do know is that we’ve faced bigger problems in the past and survived.[/quote]
I’m giving bags of coffee beans to all my clients and signing them up for gun classes. Sure we might survive, but you never know when BranchNet or other financial trading platforms will go haywire and decide that we are the greatest threat to the financial markets…you know how that story goes.
edit: forgot to add the
It's kind of funny. For as nervous as I've been about these markets, most of my biggest clients are completely comfortable. They just see it as another thing to deal with. Here are some signs : Investor sentiment in general is pretty negative = good Insider buying is at highest level since bottom in 2002 = really good Cash on the sidelines is at an extremely high level historically = really good Analysts optimism is starting to turn up = really good S&P earnings are expected to surprise in Q3 and Q4 = really good P/E ratios are at historically a fair value = really good Buffet bought into Goldman Sachs = good[quote=Indyone]Who knows. All I do know is that we’ve faced bigger problems in the past and survived.[/quote]
I’m giving bags of coffee beans to all my clients and signing them up for gun classes. Sure we might survive, but you never know when BranchNet or other financial trading platforms will go haywire and decide that we are the greatest threat to the financial markets…you know how that story goes.
I seem to remember hearing that the total mortgage market is $12T and that sub-prime is about 5-6% of the market. Let’s say its 10% and you still “only” have $1.2T in sub-prime. Remember that around half of that is current so you get a ballpark number of $600B.
Hammerin' Hank Paulson's US Hedge Fund starting with $700B of seed money sounds about right to me.…and I do agree that someday we will look back on this and nervously chuckle at what Chicken Littles we all were during this time. Yes, there are serious problems but fear is certainly causing many people to behave irrationally and make some very poor decisions. I’ll include myself in that.
well we didn’t have Toyota, Honda, Lexus, Hundai, Kia, and Nissan. Let the American car makers fail like they should. They chose not to compete. They deserve to go down, as do the banks! The American car makers suck, and I doubt based on their ever decreasing market share they will ever recover. I feel sorry for the average joe who let the dumbass MBAs call the shots. They should have let the factory wokers run the car makers. Would’ve been alot further ahead.
Sorry about the grammer. Had a few tonight.[quote=ezmoney]well we didn’t have Toyota, Honda, Lexus, Hundai, Kia, and Nissan. Let the American car makers fail like they should. They chose not to compete. They deserve to go down, as do the banks! The American car makers suck, and I doubt based on their ever decreasing market share they will ever recover. I feel sorry for the average joe who let the dumbass MBAs call the shots. They should have let the factory wokers run the car makers. Would’ve been alot further ahead.
Sorry about the grammer. Had a few tonight.[/quote] You should know something about the Asian car companies you mention. None, as in not one, is an innovator. Innovation takes risk. Risk is something these companies will never do. They are all about building a higher quality mousetrap, but never a new mousetrap. They invent nothing. They only clone. They let Ford, GM, and Chrysler take all the risk. What's the big deal about innovation? Hmm? Chrysler made Billion dollar bets to create entire market segments ie the SUV, and Mini Van. Soon, Japan as saw the success of these models they brought us their versions. Nothing new under the SUN. In fact fairly low quality clones. Similar to their first trip here with low quality cars. Chrysler improved the Mini van again and again, giving it Stowaway seating, and remote control door on both sides. And again Chrysler was working at expanding the SUV market, which it did with it's Grand Cherokee. What did Japan do to innovate? Nothing! that's not part of their business plan. Meanwhile over at Ford it's engineering department wasn't asleep either. They came to market with a revolutionary forward looking multi billion dollar dice throw called the Ford Taurus. It took Honda and Toyota almost 12 years to unseat it as the best selling car in the world. Ford set the course and Japan followed. What else is new? GM then created another new market segment, the luxury full size SUV. Immediately Toyota countered with an Upscale Toyota Land Cruiser called a Lexus LX 450. Dumbasses actually bought them. And on and on it goes. The list goes on and on. Without the big three we will forever be stuck in 2008 when it comes to car technology. Ok, i'll give you that Subaru invented the crossover vehicle with the Outback. But wait a minute, Oh yeah, Subaru, an American company.