August 25, 2008

Too big for the government to let fail - yes or no? Lehman, Fannie, Freddie, WaMu, First Fed and GM get ready for their dates with destiny...


Which of these are too big to fail?

1) Fannie

2) Freddie

3) Lehman
4) WaMu
5) First Fed

6) General Motors

Get some popcorn HP'ers, and enjoy the show...
(note - I now hold LEH puts, should have had 'em all...)

Too big to fail? We'll see about that


The calamity in the financial sector will be remembered for the household names it damaged or took down.

The mess in the U.S. financial system is making me nostalgic for the dot-com collapse of 2000-2002. That, too, was a cataclysmic bursting of an insane market bubble.

We've already lived through several such systemic shocks this year. Countrywide Financial Corp., brokerage Bear Stearns Cos. and IndyMac Bancorp are history, the first two rescued just in the nick of time by larger rivals, the third seized by the government.
Now, shares of mortgage titans Fannie Mae and Freddie Mac trade for less than a fast-food lunch as the market bets that a government takeover is inevitable, if not imminent.

This week was another rumor-fueled ride on Wall Street. Fears of an impending failure of another major financial company were stoked by a speech early in the week by Kenneth Rogoff, a former chief economist at the International Monetary Fund and a historian of financial crises.

"The worst is yet to come," he said of the U.S. financial system. "We're not just going to see mid-sized banks go under in the next few months. We're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks."

By late in the week Lehman Bros. Holdings Inc., long on the list of the most at-risk institutions, was said to be shopping itself to potential foreign buyers, including a state-run South Korean development bank.

And shares of Washington Mutual Inc., the biggest U.S. thrift institution, on Friday fell to their lowest level since mid-July on renewed jitters about the Seattle-based company's viability.

34 comments:

Anonymous said...

WaMu ......... T I M B E R ,,,,,,

Anonymous said...

The govt saves Fan, Fred and GM the rest die

George L said...

7)The united states government

chslaxcoach said...

t-shirt idea:

"housingpanic.com - We're too big to fail."

Anonymous said...

Nothing is too "big to fail"

vanilla ice said...

Peter Schiff put them correctly as "too big to save."

sunny funny fuktard said...

I'M NOT WORRIED UNLESS WAL*MART FAILS...

DOPES!!!

christiangustafson said...

Not only will all of these companies die, but all of them deserve to die at this point. WaMu will make the most pretty flash, and soon.

Pay-option negative-amortization ARMs? What were they thinking?

Guaranteed to fail.

Anonymous said...

GM is the only biz that actually "PRODUCES" something of real GDP value.

So lets see,its OK to WASTE $1.3TRILLION on Bush's war crimes, but not OK to loan GM $30 Billion to re-tool its product line?

The Housing Bubble Ate My Balls. said...

None are too big to fail, are they too big to bail out...


Yes....


Let them fail, the U.S. and the current form of "Capitalism" is failing and in fact has been failing for some time.

Let it all fail, it needs to happen. The U.S., it's way of living, and capitalism needs to be rebuilt.

hung said...

wagner looks like a disgraced leader.Now the big 3 want 50 billion of your money.what a screwed up system.The taxpayer always gets the shaft.Why doesn;t wagner take a pay cut?

nascar 77rules said...

We should bale them all out becauce its the fault of the terrerits who are atacking our country and thretning our dialy lives, thats why Im voteing for Mcain for presedent!!! be sure watch the FOX Mcain special tonite!!

May God bless America and the hole Bush famly

Anonymous said...

None of the mentioned poorly-managed crooked ponzi-schemes are too big to do anything but fail.

GM should limit its oferings to plates and knives and forks. Let the real engineering be done by real companies. Outside of current Corvettes which are undeniable a big bang for the sports buck, what GM product would you BUY?

The Volt? Too little waay too late.

As for the others, fuck them to their knees. They need to die. The lawyers will delight in picking the corpses clean and boiling the bones for soup for the poor (everyone else).

The American Way. Flint, MI the new American city model.

My Plan, 15 for 15. 15%unemployment and 15% inflation by Christmas 2008.

Mass US Depression in 2009.

George, Mission Accomplished.

consultant said...

As I've said here and elsewhere many times, this represents an across the board failure of leadership. Really, it is something to behold. Other nations are probably shaking their heads and saying what the f*ck are they thinking?

I say "are", because we "are" still a pretty f#cked up country. We have created a national culture that believes you can get something for nothing. Which means we're pretty much f@cked!

Take your pick on who fails. Three things must happen to stop the fall:
1) A massive number of "playas" who created this financial fiasco must go to jail or be severely penalized in some way,

2) Most of said "playas" must be removed (banished) from employment or participation in their former occupations (necessary to reestablish trust)

3) New rules (and some old rules) must be put in place to prevent the destruction of financial institutions

All three conditions are necessary to stop the fall. The fall will continue until we do all three.

keyser soze said...

I've said it many times here - do not confuse saving the entity with saving the common stockholder.
That is all.

Anonymous said...

I think the first 5 on the list will be placed into receivership and liquidated under the coming resurrection of the Resolution Trust Corporation. The government will make sovereign bondholders in FNM and FRE whole but all the other bagholders are most likely beat.

I also feel GM will be bailed out by the government because they are indirectly responsible for millions of American jobs, many of which are well paying. They are also a card carrying member of the MIC. Both of those make me believe they aren't going anywhere.

keith said...

Everyone notice the perfectly executed pump-and-dump on Friday for Lehman?

Reminds me of the Countrywide/BofA pump and dump from 2007 that let Mozillo dump more shares before they crashed to near zero.

Gotta love Wall Street. They're pros.

SUFFERING BRAINSTEMS said...

Quick Brainstem Quiz:

Who was in power through much of the last 30 years?

Who repealed many of the laws regulations that would have prevented this meltdown?

100-to-1 most of you brainstems get both answers wrong. Then you'll dutifully go out and vote for republicans.

Tell your fat, stupid offspring to enjoy their tent cities when they grow up!

Mark in San Diego said...

I took a Las Vegas bet, and bought GM bonds for .55 on the dollar. . .usually in Chapter 11, bondholders get a piece of the new stock, and some compensation. . .but remember - "never gamble more than you can afford to loose."

Anonymous said...

God, so much slagging from the monied classes about the evils of "socialism" and "the socialist welfare state" you would thing these people would cheer when the invisible hand of the market strikes down some worthless dinosaur of a company, making room and market share for another to take it's place and make some real money. But no, can't let these guys nibble on the bullet. They are, somehow, too special and wonderful. Why is it than when money is being made the government is some kind of evil parasite that must be excluded from the business sector, but when a major company is about to collapse the government transforms into a force that must intervene for the good of the country. I don't really understand. If CEOs and millionaires get a soviet style "welfare state" why can't the citizens (who, you know, actually live and work here) get one too?

Anonymous said...

Here's a few GM highlites relating to its' commitment to the United States and the American worker.

Enjoy.

http://www.youtube.com/watch?v=d-sD6boQfvk

Here's one for the brothers and sisters:
http://www.youtube.com/watch?v=030taRl5Fcs&feature=related

Union Members & Politicians:
http://www.youtube.com/watch?v=xln5o1ks-S8&feature=related

What you can look forward to in 2009: YOU are next.
http://www.youtube.com/watch?v=qIcSQ5tvLDE&feature=related
"and chop their heads off"

Fuck GM. DIE U PIGS

AMERICA IS DOOMED

michael said...

whatever happened to Butch?

i miss that guy.

gutless and lazy mocks GM, F mgmt slugs said...

Didn't big Corps like GM and F usher in the error of Globalism and outsourceing of blue collar jobs in the '70s and then accelerated it in the '90S with white collar jobs like software developers?

I cant wait until they go BK from failing to compete against Toyota, Honda and Nissan.

GM, F asked for it (globalism). And now these beaurocratic failures and gonna DIE from it!!

MUAHAHAHA!!!!

Don't worry GM, F execs, you can apply for low level, entry level mgt positions at Toyota. But I doubt they want failures like you!

Anonymous said...

Nothing is too "big to fail"
______________________________
Even the USA Government's budget?
I heard rumors somewhere (sarcastic tome switch off now) that they were insolvent, too.
FMW

Anonymous said...

@ George,
I should read THEN post. D,oh.
FMW

Anonymous said...

whatever happened to Butch?

i miss that guy.
_______________________
me 2. ):
FMW

Anonymous said...

remember when everyone thought that WAMU would go and then it turned out to be indymac and it wasn't even on the list. perhaps it's a bank or company no one expected. I say Wells Fargo and Ford. Wells Fargo is playing with the bottome line and Ford is closing brand new dealerships. GM isn't.

Anonymous said...

Don't forget the big one : The US Government.

They are the most bankrupt of all but it's OK because the stupid American slaves will keep working their asses off to have their hard earned dollars via tax and inflation like the ignorant, smug and arrogant chumps that they are!

Yoski said...

"
Which of these are too big to fail?

1) Fannie
2) Freddie
3) Lehman
4) WaMu
5) First Fed
6) General Motors
"
7) US of A

Paul E. Math said...

Anon said "The govt saves Fan, Fred and GM the rest die".

I was going to write the exact same thing. Wamu and First Fed go to FDIC and Lehman goes to, I dunno, Goldman Sachs.

My outrage at the idea of government subsidies for GM is similar to my outrage at the housing bailout.

There is no need to lend money to GM 'to develop a more fuel efficient product line'. There are plenty of great fuel efficient options already being made without a subsidy - they are called Toyotas and Hondas. Why would we pay our taxes to GM to give us a product that is inferior to what is already available. This is so stupid that it is virtually guaranteed to happen.

Lost Cause said...

Government investment is industry what they do in socialist havens like Ireland and Great Britain.

Is socialism is what you want? The next thing you know, we are another Sweden or Finland.

Anonymous said...

"Government investment is industry what they do in socialist havens like Ireland and Great Britain.

Is socialism is what you want? The next thing you know, we are another Sweden or Finland."

Have you ever been there? Holy Crap my man, we should be that lucky. Out there in the cold, snowy, weepy, communist states of ice and darkness life is Soooooooo bad. High taxes, free medical care, free education, national crime rates lower than most cities here. Yes. it would be Evil and Terrible to have a standards of living and personal wealth that high, because, well, it's Socialist.

k.w. - Southern Ca. said...

"Pay-option negative-amortization ARMs? What were they thinking?"

Simple answer ... greed is good, as long as it works for us - the same goes for the rest.


christiangustafson said...
Not only will all of these companies die, but all of them deserve to die at this point. WaMu will make the most pretty flash, and soon.

Pay-option negative-amortization ARMs? What were they thinking?

Guaranteed to fail.

Dixon Ticonderoga said...

Lost Cause said...
"Government investment is industry what they do in socialist havens like Ireland and Great Britain.

Is socialism is what you want? The next thing you know, we are another Sweden or Finland."

Ford, GM and Chrysler=
American Leyland

Bwa-Ha-Ha-Ha