patrick.net

Headset,

Thanks for the follow up. Remember, I used to work in a "boiler room" and I've seen a phrase, an anecdote, a snippet go from one end of the room to the other in about 90 seconds.

We can't for the most part control what we hear... but for the love of God verify what you've heard before you repeat it! No matter how juicy or impressive. (I though that much was just common sense?)

Denninger alluded to it yesterday (as it affects PD's) but didn't mention BSC specifically. More referenced to Carlyle.

Duke,

That was pretty much my take on it. Buying time and doing the damage control measures. I understand the Auction Rate failures will continue through the next qtr.

Looks like they are calling the demise of Bear Sterns.

So, Carlyle and Bear Sterns are allowed to die. I wonder who else gets chopped up in the de-leveraging world.

Down 50% ? Wow!

Hey, all you in the know. Is the Bear Stearns bailout one of those "rich helping their rich buddies" thing or could any of us count on this kind of "help"?

In spite of the once venerable Bear Sterns name they now have no more credibility than CountryWide?

Speaking of Countrywide. Is BofA now in serious risk of insolvency?

Good question. AFAIK, not in immediate peril. BofA (we're guessing) was forced into a shotgun wedding w/ CFC to salvage their book. BofA stopped doing subprime in 2001! Again we have no way of knowing but we can only surmise they were chosen b/c they had the least exposure.

Anyone?

Bear Stearns President and Chief Executive Alan Schwartz begged to differ with Wall Street. "There is absolutely no truth to the rumors of liquidity problems," he said, adding that Bear's "balance sheet, liquidity, and capital remain strong."

Wow. Is this kind of blatant lying to your investors not accountable?

Fuzzy,

It's code for: "GET THE F@CK OUT.... NOW!"

Maybe they should change the spelling to Bare Sterns.

Not to worry: according to Yahoo BSC has a one-year target estimate of 100.33. http://finance.yahoo.com/q?s=BSC

Has anyone a link to a site where historical "one-year target estimates" are compared with real histories a year later? I've been looking at so-called "analyst estimates" for several years now and they appear to my novice view to be severely disconnected from reality.

Fuzzy
Wow. Is this kind of blatant lying to your investors not accountable?

Ken Lay tried it. Got him a heart attack. Although he was probably the exception.

In a speech to The Economic Club of New York, Bush said this was not the first time the economy has been rattled and he is cerrtain that it will ride out its troubles. "These are uncertain times," he said.

if it's an accurate quote, whoever is writing Bush's speeches is one confused individual.

The strange part to me is that it really doesn't serve any purpose. Unless the guy is buying time to unload his own shares.

I mean, he said that earlier this week. He knew the SWHTF soon. Why lie only to have the same result AND be deemed a liar? What a jerk off.

DennisN Says:

Maybe they should change the spelling to Bare Sterns.

That there is a masterpiece. :-)

"That there is a masterpiece"

http://cache.viewimages.com/xc/2222365.jpg?v=1&c=ViewImages&k=2&d=17A4AD9FDB9CF1934A2752006EF5F0ED02DED7B58C37E3325A5397277B4DC33E

He knew the SWHTF soon
Maybe he did maybe he didn't. Many times it's reasonable to believe a show of confidence can avert disaster.

Sort of like Churchill when the chips were down....

We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender....

Well I wouldn't put anyone from Bare Sterns (tm) on the same level as Churchill, but otherwise the analogy is probably a good one. I guess the US was to the UK in WWII what the Fed and JPMorgan are to Bare today.

Warning : "TOOT MY HORN" post follows

On thread http://patrick.net/wp/?p=548 for "Predictions on what 2008 will bring?"

I said :

1. At least one major financial institution - here or abroad - that is too big to fail will *almost* fail.

Since I am being shameless anyway, here is another one ... Vallejo ...

6. May happen in 2008, but more likely in 2009 - at least one local CA government will go bankrupt.

Breaking News: Rating Agencies to meet to discuss ratings on Bare Stearns

Idiots

StuckinBA

nothing wrong with a little tooting. Although it would've been *real* impressive had you put a name on that prediction ;-)

For instance, while insisting his administration has an "active plan" to deal with the problems, Bush said he opposed several measures pending on Capitol Hill. They included proposals to allocate $400 billion to purchase abandoned and foreclosed homes, to change the bankruptcy code to allow judges to adjust mortgage rates, and to artificially prop up home prices.

Why is Bush is against these proposals??? We need a Democrat in office...

The Original Prankster

I repeat: check out a classical greek dictionary which predated the era of PCdom and you will find no etymological connection between crete and cretin.

Furthermore, Greek being or not being related to "semitic language" has no bearing on cretin being related to crete. Since you insist on conflating the two (among many other non sequiturs you keep bringing up), I have concluded that I can't help you.

Also I've never heard of greeks claiming they are the progenetors of all intelligence in the world but if they do, it sure seems you have some greek in you.

I am not of Cretan extraction. I am of cretin extraction.

Covert Nationalization. Liquidity destruction continuing everywhere. Capital flight out of USA and USD is accelerating and has passed point of no return, IMHO. As commerical and consumer debt cracks, none of the majors are going to come through this without outside gov't meddling.

Its about trust and confidence, and really nothing is being done to address the core problem. Wall street is no longer credible, the FED and US Gov't are no longer credible, the US consumer is no longer credible. Our financial system exists solely on the basis of trust. No trust equals no system.

I'm simply astounded that the leadership doesn't seem to get this. Emergency legislation should be pushed through that mandates actors to full transparency so we all know where contagion resides. The markets are not going to solve this problem if left to their own devices at this point in time.

We require courageous leadership and drastic measures now, and these are in disconcertingly short supply.

EBguy

Thanks brother, and back at you. :-)

Excellent comments and thread relative to blogging and readership, well done all. :-)

NVR

dude are you depressing! :-)

Emergency legislation should be pushed through that mandates actors to full transparency so we all know where contagion resides.

But I'm told the problem is NOT where contagion resides. It's pretty much everywhere. How much to mark it down seems to be the real conundrum, since the rules say mark to market and that mean too many will go under - so all is frozen.

Prankster
I am not an ethnic cretan (whatever the fu*ck that is!)
You on the other hand are obviously a cretin.
That is all.

Hopefully that is the end of the cretan/cretin thing. No one gives a bare stern about it but you 2.

BAI

I'm trying very hard to sit in the sunshine, and will try to provide a little more than any I might have inadvertently provided in the past. I'm breaking out the mid life crisis tommy bahama shirts all next week, which may help. My own mother has indicated that she feels she needs medication after talking to me about these issues, I'll call this a clear red flag. :-)

Agreed on real conundrum, that is it. The most interesting takeaway for me from Bush Bernanke emergency appearances today was absolutely ZERO reference to prior "you guys should let people off the hook, reduce balances proactively, or you might suffer even worse losses as price decline accelerates. Be careful what you wish for (credit to HARM)."

Markets will not recover or turnaround until faith returns. To me, it seems we've completely lost control of the situation. I think I would be happy with a Japanese lost decade at this point. The attempt to manage a 3 year *give or take* decline (safely assume this is defacto US economic policy) does not seem a possibility anymore. Housing prices are not catchable and no viable tool exists to put a floor under them, and the freefall is on. Price stickiness is out the window.

NVR :

Don't worry. We will have 1% cut on Monday morning when the Asia markets start exploring depths of Pacific ocean.

We will have 1% cut on Monday morning when the Asia markets start exploring depths of Pacific ocean.

Hopefully the Asians will have a nice weekend. :twisted:

Citigroup just indicated they think there is a strong possibility for a FED cut that EXCEEDS 1%. Completely uncharted territory folks.

I have fear.

I have fear.

Fear of $2000 gold? LOL :lol:

Just heard from a friend from Livermore who had bought a house for about 270K and was appraised around 470k some time back and now it's appraised to 250K. One of his neighbours has maxed out equity to 450K and is read to walk away from his house (He is perfectly capable of making his mortgage).

All this talk about bailout is pushing people to walk away. Game on!

San Francisco sales are up because there are literally hundreds of high end condos coming on the market. There is a huge pent-up demand for housing in San Francisco, since 2/3 of the population rents. I guess some number of those people are looking for $1M 1100 sq ft "luxury" high rise apartments.

I personally don't see the appeal, but I guess if I was single and raking in the bucks, it would make sense to me. There is more wealth in San Francisco than any of you realize.

This spring the market is finally cracking in Noe Valley. One of my neighbors bought a house in 2001 for $650k and fixed it up, complete with a real gas lamp in the front of the house. I keep wondering if he will end up burning down the neighborhood in case of an earthquake. Anyway, he is asking $1.3M for it and is not seeing any interest. This place is very nice, but it is 1000 sq ft tops and on a very busy street (Church). Last spring he probably would have gotten it though. This spring it just sits. He claims he is just going to pull it off the market if he doesn't get what he wants, and I believe him.

So there is kind of a stand-off in the market. Though I saw a tear down go for $950k last month, so we are still a long way from affordability. I suspect that this is finally the year when we are going to see the fortress, at least in San Francisco, start to show cracks.

Oh, I don't think it was mentioned here, but our esteemed host is quoted in the cover article of Business Week.

Under proposed bailouts, responsible people lose and have to give their money to gamblers, liars, and sleazy lenders," says the widely followed Patrick.net housing blog.

Good work Patrick. Strange they didn't attribute it to you.