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roddymccorley

Listed below are comments made by roddymccorley between Tuesday, 14th October 2008 and Tuesday, 25th November 2008.

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Massive mortgage squeeze 6:51pm on 25 Nov 2008 There’s loss-sharing to encourage write-downs of mortgages. It was done in Mexico in 1995. If holders can arrive at a write-down in lieu of foreclosure that leads to sustainable mortgage, we as taxpayers would sustain the rest. It lets the market work the problem out and creates the motivation for doing it quickly. You could also have the government offer to buy any mortgage for 40 cents on the dollar. It would create immediate liquidity, because mortgage backed securities would rise on that scenario, all would be truncated at 40 cents. Third, we could refinance all healthy mortgages at 5%, at 30-year fixed financing. Allan Meltzer has idea about giving tax credits for buying homes, they’re all good ideas. The problem with what we’re hearing from Paulson does not have much to do with any of this.
http://blogs.wsj.com/deals/2008/11/25/the-paulson-plan-truly-idiotic/
Citi and manic Monday 6:46pm on 25 Nov 2008 "I had personally informed them of the impending disaster,'' he said. ''Neither SCB nor Citibank are specialized energy traders nor do they have the wherewithal to provide a hedge to the CPC for a huge exposure of $2 billion''. At de Mel's press conference, Citibank Sri Lanka chief executive Dennis Hussey said the Sri Lankan government started the hedging process following a special cabinet approval, which has been carefully documented. SCB's Sri Lanka chief Clive Haswell said the bank had received a written undertaking from the CPC that the latter was aware of the risks.
http://www.atimes.com/atimes/South_Asia/JK26Df01.html

Citi pirates strike again....
The rising taxpayer burden 06:53am on 12 Nov 2008 Whether capital is put into or taken out of circulation is the variable that decides what is a Keynesian stimulus.

http://www.alternet.org/workplace/106410/tax_cuts%3A_th e_b.s._and_the_facts/
The rising taxpayer burden 06:29am on 12 Nov 2008 Given Okun’s law, every excess point of unemployment above 5 means a 2% output gap. Right now, we’re at 6.5% unemployment and a 3% output gap – but those numbers are heading higher fast. ....
So we need a fiscal stimulus big enough to close a 7% output gap.

Remember, if the stimulus is too big, it does much less harm than if it’s too small. What’s the multiplier? Better, we hope, than on the early-2008 package. But you’d be hard pressed to argue for an overall multiplier as high as 2. When I put all this together, I conclude that the stimulus package should be at least 4% of GDP, or $600 billion.
http://krugman.blogs.nytimes.com/2008/11/10/stimulus-math-wonkish/#more-1029
The rising taxpayer burden 05:42am on 12 Nov 2008 WASHINGTON — When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool. Many new supplicants are lining up for an infusion of capital as billions of dollars are channeled to other beneficiaries like the American International Group, and possibly soon American Express.
www.nytimes.com/2008/11/12/business/economy/12lobbying.html
A fairer society? 7:07pm on 17 Oct 2008 Half of U.S. bank deposits are in those nine large banks, with the remainder spread across the country in smaller firms. Any delays by the Treasury in getting money to the local level threaten to slow economic growth in areas where job losses are mounting and consumer spending weakening.
http://www.bloomberg.com/apps/news
Banks still not lending 08:17am on 16 Oct 2008 Also in the US money is being sucked from regional banks, where the depositors are, where small businesses are, to the mammoth NYC centered banks...and then the govt jumps in and just adds masses more capital to those who already have greater access to capital.
Banks still not lending 07:02am on 16 Oct 2008 "The truth of the matter is, they can't put a gun to their head and say you have to lend this money,'' said Charles Horn, a former official at the Office of the Comptroller of the Currency, part of the Treasury Department, and now a partner at the Mayer Brown law firm in Washington. Treasury officials acknowledge they can't force banks to get the taxpayer money into the hands of their customers. Instead, officials are betting that the government's investment will create conditions where banks have a greater incentive to earn profits from lending than to hoard money to shore up their balance sheets.
http://www.bloomberg.com/apps/news
Bank dividends 5:16pm on 15 Oct 2008 October 14, 2008, 10:03 am
A Thumbs Up From the Ivory Tower

Academics and other outside economists were highly critical of the Treasury’s original rescue plan, arguing that taking over banks’ bad assets would do little to solve the problem. Right, left and center, they said that what was needed was a plan to recapitalize the banks – a plan like the Treasury plan has just announced. Here are initial reactions to the plan (some have been edited for length) from some leading economists.
http://blogs.wsj.com/economics/2008/10/14/a-thumbs-up-from-the-ivory-tower/trackback/
RBS to stay private? 6:47pm on 14 Oct 2008 Bush is "forgotten but not gone." In the UK's Brown is someone who understands economics, is articulate, and hopefully by now has regained the confidence of his constituents.

Bush's deregulation is responsible for the current crisis just as a lack of hygiene can be held responsible for the resulting infection.

The transfer of wealth resulting from Paulson's dithering will produce an Obama/Frank/Dodd/Pelosi victory and a continuation of amateur hour, with its inconsequential occasional stimulus checks in the US.

Every time Bush assures people he knows what is going on, the market plummets.

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