Margaritaville

the economy is not a supernatural all-knowing entity.

Out of the Ashes

Let's say i suffered a premature stroke last year at the death of ML and only just woke up from a coma on this chilly thursday morning.

Obama got made president? Nice. and Hillary is SOS?
Lewis Hamilton won the grand prix championships. BRIL-LIANT! and glad i woke up just in time for the 09' season too...

Who is this madoff guy? how much is this stimulus plan- almost a trillion? do you just sign a cheque for a figure like this anyway, who sees all that money (go up in flames)?










the economy is in 'ruins'? economic stump only bottoming out now? Hedgies have to get a green light from SECs? Actually don't tell me the answer to these questions; i'm pretty sure you don't want to talk about it anyway. I think it is time to purge after this terrible hangover.

Purge. Like how G20 leaders have an insatiable need to BS their way through 'economic reforms' and 'tighter regulations', but walk out after the press conference and proceed to do nothing. Whatever.

I propose the following:

I feel a little disoriented. Everyone stop at their tracks and just freeze. Hold onto your marbles and think about what exactly it is you are doing right now. Is it rational? No. Does it make sense to you? No. Are you running in an anti-(okay okay, counter) clockwise direction just because everybody else is but you don't really have an idea why? yes. What the flip are we doing? We don't know. Nobody knows. But everybody cares. Some a little too much. we're taking so many little steps every single day, the government twittering out soundbytes to reassure the public that everything is okay- the more the come out with revised strategies and flashy words to confuse me the more they tell me they are panicking. just chill, no one's dying, yet, right?

But if we only could just stop for a second and think about the repercussions of all the decisions which we are all so hastily making now I for one may not even dare blink one eye. Governments throwing wads of money around as if there were no limit (but we are apparently scraping the barrel) will sooner or later have an effect on the recuperating economy. steps should be taken slowly well meditatedly instead of a half-assed solution that can soothe the nation for a week or so (our attention span is even shorter nowadays). If plans are concrete and solid with actual steps to do something (case in point: G20's vows that they had reached a “broad consensus globally on the need to act aggressively to restore growth to the global economy.” tells me shitall. give me something meaty!

They tried to make me vote for Bailout, I said, No, No No

Not like anyone cares, but I'm turning twenty one in a few weeks.

When i was born, the market hit a little rough patch a.k.a. 1987 crash.
Now this.
My milestones must be inversely be inversely correlated somewhat. or is 21 just the modern day economic cycle for shits to hit the fan? it's almost like the economy getting its period, really on time. with horribly bad pms too. heavy.
















Did anybody mean for it to come to this? The annoying screen on CNN that starts talking the moment I open it up chimes in 'It's time to separate the men from the boys'. at such a time perhaps all that means is those that have sunk and those who are about to go down the drain. The situation is so glum that even W is starting to talk sense. now when that happens you know we're in some serious trouble.

Who is getting a little tired of this conundrum? It makes me feel guilty looking at pretty things from fashion weeks, but I look anyway. Does this not reflect, that the undying fatal flaw of all civilians that is greed. after the shock of all these buyouts and bailouts now comes the fear, grief and the agony. no more icing on the cake, no more exorbitant deal toys. no more banks? doesn't even sound that preposterous to me afterall. this is one institution devouring another day after day; would you be surprised if you woke up tomorrow and all that was left was BoA-M?

I suppose I have to prepare for my birthday by buying crockery from various different interesting outlets: champagne flutes from ML, goblets from lehman, china from WaMu, napkins from AIG, a pinata from freddie.

Back to Basics

It will be very interesting to see what what remains of Wall Street will get up to after this storm and what they'll devise and use to rebuild their business. What they will use to package their sandcastles into empires.















what cramer said today really resonates with me. banks refused to dumb it down to let everybody play their elitist game so now when the game is over those who have to pay the most is themselves, while those like the up till now hardly heard Hudson City is catching the money floating down the drain.

Detox II: Off the Wall

A plan is underway to further buy off toxic a$$ets for the next two years off Wall street to the tune of $700b.



No matter how many thinking caps and mad hats the deal makers put on the solution does not seem to have surfaced. When will the solution come about? and by who? will it be definitive or will it take trickles of small maneuvers lined up in a consecutively fortunate way for it to happen?

'Short term relief but long term uncertainty' announces Washington by likes of FT's uncomfortably hairy F. Guerrera. The birth of another vehicle to help buy the assets of the banks? I am disturbed now by the mere mention of the V word. How can the gov/media be still so rosy about what they announce that the best case scenario would be to sell off their toxic waste assets at the price they had listed on their books so there will be no losts incurred in the end? Who are they trying to fool? Were they expecting to fool anyone, for that matter? The street have lost this game called credit and it is time to pay, and to do so with dignity. Any more sidestepping and prettying up of the dire situation that is becoming more apparent by the day is not going to improve the situation but only worsen it and create more mess to be cleared in the future. Banks have binged and it is now time to purge, very unfortunately, into a public toilet that is Main Street. It is not elegant and nobody likes to stand around when a jock is trying to regurgitate everything mysterious or contaminated for the time they have been blindly drunk. Nobody is going to hold up America's hair when its face is down the toilet. Let it out, let it bleed. Lose the fat.

Then the blood and vomit will sit in the gutter for a bit for the stench to waft around but sooner or later it will be swept up and carelessly forgotten. After a big puke we will feel alright again.

Then you say to yourself like amy winehouse, 'I'm never going to drink again'. But will we ever abstain? Heck no.

Detox and booster shots

So Paulson laments that what is clogging up the economy are 'illiquid assets'; what i define as vehicles which sound stratospherically amazing so nobody cares to understand (including those who sell it).












Every save seems so temporary to me. Every decision made top down, from CEOs, rule makers and individual investors, appears to derive from childlike tendencies and nervous unpremeditated hunches from listening to gossip and baseless whispers, a problem which exasperates a certain CEO and undoubtedly many others. Perhaps this is the blessing and curse of our technological era; reactions happen so quickly that it is simply not humanely possible to react at an apt time. Furthermore, as our systems are much much more intertwined now, news of a whimper of a merger can spread from the boardroom to a terminal within a matter of seconds. When these whimpers are bad news that is not good news to have such speedy communication channels. This makes the failure of one institution reaping a deadlier effect that it would have back circa Glass-Stegall.

To me, our brains have not become smarter, or quicker since the great depression. Our ideas and quick-fix solutions have become just that- a quick boost and nothing more, whereas one singular rescue effort back in the 1920's at a time the blackberry was still only a fruit would have helped end the depression to a more definitive extent. The smartest excel spreadsheets are at the end of the day driven by people. Had J.P. Morgan still been around now the same problems would have occurred because our networks communicate faster than our minds and mouths can say 'bear'. Uncertainty and insecurity in investors can fester before deal makers have an inkling of how they need to deal with situations. Information gets out before anything is ratified by anyone. Disclaimers like 'possible talks' or 'an unknown source' do nothing to placate information users who often turn to set their belief default to 'worse case scenario' at times like these.

I have always been a little allergic and daresay intimidated by technology so perhaps that is why I would whinge about that now. During bull runs bragging is rampant about who has the harder, better, faster, stronger systems to withstand sudden crises such as today's. Perhaps when the time does come though, this efficiency has become a culprit to titans getting smothered in quicksand instead.

In which the Street goes to Vegas

boy goes to vegas girl goes to vegas. boy and girl gamble copious amounts of money because everyone around them are; everyone appears to be winning. They abruptly lose. they snuggle with loan sharks. they continue to lose. to drown out their sorrows and numb their pain they drink, get married. they wake up from their hangover and the pain is even more so unbearable.

these shotgun mergers are becoming more ridiculous and desperate by the day. Rules and regulations fly out the window at such a time when they should be most effective, yet that is what they blame on when something as ludicrous a concept as a CDO collapses. John Mack's pimping ways should hopefully salvage his company, but what will happen then? It is very sad indeed organizations built upon generations going down the drain in a matter of weeks; days. But at the same time it shows the fragility of the industry and hints at what other ugly bombshells we may find as each bank inevitably goes all out and is forced reveal their hideous hand as they have been bluffing all along.

i also love portfolio.com's headline today: Vintage Whine.
so many puns to explore so little time.

Aigonizing Favoritism

I guess it does come down to connections.



the government shunned Lehman brothers two days ago (remember?) but today decided to bailout AIG for $85 billion, because AIG is a company so entangled with other companies, like a domino you tip that starts a whole barrage of tiles falling after it.

did Lehman not look good enough to be salvageable to be rescued? Did they look like they had little to live for to the authorities? It alludes to me the moral of AIG's story is that if you associate yourself with enough people when the shit hits the fan you have so many people you can drag down with you that rather going down, the people would prefer to keep you up at their own expense. These makes the pain stick around for everyone even longer. The Government did so well saying no to Lehman and it seemed like they stood up to say HEY enough is enough, back off back off! and now with the 80% stake rescue for AIG no doubt more companies in strife will come panhandling. Leonhardt points out how much within the past few months the Street has changed but how effectively very little the whole picture has changed. It took months to realize that a recession is looming and months more to admit and accept it!

slapping bandages on a holely boat the boat will still burst and sink sooner or later. one bailout after another can resort to the country needing a bailout for themselves sooner or later. as barry ritholtz says though: at least our markets are open! good on him for looking on the right side of a what is rapidly dimishing silver lining.

Asia's Quest for Global Domination

so if it was going to happen sooner or later, I suppose today might be the day I'd mark it as the beginning?

so, perhaps not for k-il as such on his spending spree. I do just relish the chance of using his puppet picture. bloomy announces that its time for south korea to turn the tables and let america come begging on its doorstep after the sale of Korea's first bank almost a decade ago. Merrill is receiving cash from the likes of South Korean investors. Not so exotic anymore. if it is for them now a buyers market then so be it; to what Dubya refers to as America being 'resiliant' he must be alluding to their ability in selling its wares; or the carcasses of what remains.

what goes around comes around. this is the case for individuals- your love lives, careers (career karma? it exists apparently! bankers should take notice at a time they'd probably like to throw faith at anything other than their own profession), politics, and inevitably a country's prosperity. seeing what a hard time JPM is having taking Bear under its wings it makes you wonder if a country such as Korea is really jumping in the invest US bandwagon at precisely the right time. perhaps this is their Christmas sale come early. Asian tourists flocking in to buy bargains at insanely discounted prices. 'buy me!' they scream out at them. 'I'll make it worth your while!'

Then might they return home with their slice of cherry pie gone sour and realise their purchase is now all but a worthless piece of souvenir from the once glorious nation of America?

Having said that I guess we mustn't forget the beleaguered Asian sibling that is now Japan. Not everyone can be brave enough to spend at time of such adversity, with the Bank of Japan injecting another $24billion into their financial system.

We read these figures nowadays and the numbers just bowl over our heads. Billion schmillion. It no longer causes an alarm. We've all become numb to the announced figures governments around the world send out trying to placate our minds, our bank accounts. Like every other addiction, shouldn't it be noted that the more dosages of injections we get, the less immune we become?

Painting the Town Red

y'all've really done it this time.

Didn't another two iconic brothers fall on a fateful september day a few years ago?

That was terrorists shooting daggers from the outside. This came about from a domino affect rippling from within. T This slow asphyxiation of the entire industry could be just as painful to watch as the drama unfolds; who's next you wonder? How did two such institutions sink like falling into quicksand in a matter of a weekend. Closing faster than M.night shyamalaman movies.

It is true what Alan Greenspan (who instead of yoda sounded more like winnie the pooh today...the tao more so than the force speaking?) said about how not everyone should/could be saved by government institutions. There is only so much placating you can do before admitting that you've really done it. Banks should learn to survive without the peace of mind that should they ever run into trouble john thain can walk in with a wad of cash slap you on the wrist and buy you off. These shouldn't be granted as precedents.

Some say Fuld should not have been so stubborn about guarding a company so close to his heart that he dragged the entire company down with him. He says he bleeds green, I guess that makes him proud. Its a shame that its bled the company dry now. All for one, one for many. Come on guys, this was a group effort you did this. By group I mean all the banks, all the bankers. Everyone who bought into this whole credit shenanigan.