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Joe Hancock

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #300 on: March 02, 2009, 06:45:39 PM »
Which is more dangerous? Allowing politicians to dictate financial policy for our country, or allowing golf course architecture aficionados to dictate financial  for our country?

I'd say it's a toss up.

Joe
" What the hell is the point of architecture and excellence in design if a "clever" set up trumps it all?" Peter Pallotta, June 21, 2016

"People aren't picking a side of the fairway off a tee because of a randomly internally contoured green ."  jeffwarne, February 24, 2017

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #301 on: March 02, 2009, 06:47:45 PM »
Patrick...

No offense, but I could care less how the "financial markets" react to anything...they are too short sighted.
No one is above the law. LOCK HIM UP!!!

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #302 on: March 02, 2009, 07:00:01 PM »
Dean...

That's a nice selling point, but I think the proposed changes in how you deduct your mortgage interest isn't going to stop people from buying homes...

Here's what the Tax Foundation has to say about his proposal:

"Obama said more Americans who own their homes should get relief from mortgage payments. The current mortgage interest deduction only goes to those who itemize their taxes, while Obama would create a universal mortgage credit of 10 percent of interest payments that the campaign says would benefit an additional 10 million homeowners."


And this is from CNN:

"Dean Baker, co-director of the Center for Economic and Policy Research, a D.C. think tank, said he was impressed with this part of the budget plan.

"It's a no-brainer for economists," he said. "Why have taxpayers been [in effect] subsidizing home payments for the highest income people in the country?"

The overwhelming majority of low and middle income people take the standardized deduction when they file their taxes [and] they receive no benefit at all from the mortgage interest deduction, said Patrick Fleenor, chief economist for the Tax Foundation.

"If you live in an inexpensive home or you're deep in your mortgage and paying little interest, you're better off taking the standard deduction," he said.

But homeowners in the highest marginal tax bracket, those earning more than $357,700 a year, get back 35 cents on their taxes for every dollar they spend on mortgage interest. Under the Obama plan, that benefit would be reduced by 20% to 28 cents on the dollar."

And here is what some others are saying about the proposal:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/28/BU7O166J6Q.DTL
No one is above the law. LOCK HIM UP!!!

Jeff Goldman

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #303 on: March 02, 2009, 07:05:24 PM »
oops. double post
« Last Edit: March 02, 2009, 08:03:13 PM by Jeff Goldman »
That was one hellacious beaver.

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #304 on: March 02, 2009, 07:08:21 PM »
Shivas...

Do you seriously think the market isn't just as "knee jerk"?  Please...

By the way...I've been moving my money around, and yes, it's getting more difficult to find a place to park it to lessen the loses....I figure another 6-8 months and it might be a good time to get back into stocks....
No one is above the law. LOCK HIM UP!!!

Jeff Goldman

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #305 on: March 02, 2009, 08:01:51 PM »
How have the financial markets responded to the "Stimulus Package" ?

Patrick,

Do you really make decisions on day-to-day or even month-to-month reactions of "financial markets"?  Wow.  That would mean that Lou and Shivas would have to admit that Clinton was one of our greatest Presidents on economic policy.  Also, I suppose then the best thing would be to guarantee every public company a specific minimum return, no matter how they actually did.  'Course, we've sort of done that, which is why some large banks are trading above zero. 

Oh, and some actually think financial markets have responded positively(though I'm not sure).  The yield on 3-mo treasuries got above zero, 3 month LIBOR is down under 2% from its peak of around 4.8%, which is good for mortgages, and the TED and A2P2 spreads are also way down (though still above normal).  These indicate that credit markets are at least functioning some. Interbank lending has resumed, banks are lending more than they were, commercial paper is selling more than it was, and some private bond issues have succeeded without government guarantees.  Maybe very small potatoes, but potatoes they are.

Dick,

Don't have much idea where we're headed; right now, it doesn't look good when supposedly educated economists can say all the dumb stuff we're hearing out there like "the stimulus absorbs savings that otherwise would go to private investment" and therefore has no effect (Eugene Fama, of the University of Chicago).  Check out this from Krugman's blog:  http://krugman.blogs.nytimes.com/2009/03/01/equilibrium-decadence-wonkish/   Right now, the administration appears to have decided that Japan had the right idea in their 1990s bank crisis.  Also not good. 
That was one hellacious beaver.

Patrick_Mucci

Re: Northern Trust under pressure...
« Reply #306 on: March 02, 2009, 08:07:11 PM »
How have the financial markets responded to the "Stimulus Package" ?

Patrick,

Do you really make decisions on day-to-day or even month-to-month reactions of "financial markets"? 

That's not the issue.
Markets react to events.
The markets have reacted to the Stimulus package ....... unfavorably.
You can't ignore the significance of rejection by the markets.



Jeff Goldman

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #307 on: March 02, 2009, 08:14:29 PM »
Which markets?  I just gave examples of some markets that appear to have reacted favorably to the stimulus (course, there's a hole in that one if you can find it).  I know you are not such a simpleton to think that the US stock market is the only market that matters.
That was one hellacious beaver.

Mike Sweeney

Re: Northern Trust under pressure...
« Reply #308 on: March 02, 2009, 08:18:33 PM »
How have the financial markets responded to the "Stimulus Package" ?

Patrick,

Do you really make decisions on day-to-day or even month-to-month reactions of "financial markets"? 

That's not the issue.
Markets react to events.
The markets have reacted to the Stimulus package ....... unfavorably.
You can't ignore the significance of rejection by the markets.



Patrick,

At the risk of being on Craig's side for a minute, it is not that simple. I have been saying since the Fall that you have to let these things fall. In my fairly uninformed opinion, we are way way past the concept of "too big to fail". What or who are we saving at AIG? Steve may come on and argue the other side, BUT I will argue the real problem IS we have organizations that are too big to fail. Bring back the entrepreneur to clear these markets. They are already forming:

http://www.debtx.com/

http://www.receivablesxchange.com

I am sure there are others.

Again, my beef with Obama is he has to celebrate what we will have rather than fix what we used to have. He wants change, but he is not letting it happen.

Bill_McBride

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #309 on: March 02, 2009, 08:30:10 PM »
How have the financial markets responded to the "Stimulus Package" ?

Patrick,

Do you really make decisions on day-to-day or even month-to-month reactions of "financial markets"? 

That's not the issue.
Markets react to events.
The markets have reacted to the Stimulus package ....... unfavorably.
You can't ignore the significance of rejection by the markets.



Patrick,

At the risk of being on Craig's side for a minute, it is not that simple. I have been saying since the Fall that you have to let these things fall. In my fairly uninformed opinion, we are way way past the concept of "too big to fail". What or who are we saving at AIG? Steve may come on and argue the other side, BUT I will argue the real problem IS we have organizations that are too big to fail. Bring back the entrepreneur to clear these markets. They are already forming:

http://www.debtx.com/

http://www.receivablesxchange.com

I am sure there are others.

Again, my beef with Obama is he has to celebrate what we will have rather than fix what we used to have. He wants change, but he is not letting it happen.

I guess the issue with AIG is all those policy holders of insurance, but I would prefer to sell off the policies to other companies and break up AIG than to keep putting up with their mismanagement and associated bullshit.

It's obvious that the CDS are terribly redundant, with many buyers of CDS policies buying insurance on the same transaction.  Wipe out the overlaps and there is maybe 10% left.

Nuke 'em.

This is after I quaffed a couple of slightly dry, straight up Stoli martinis after a meeting after work............. ;)

Mike Sweeney

Re: Northern Trust under pressure...
« Reply #310 on: March 02, 2009, 08:36:41 PM »

Nuke 'em.

This is after I quaffed a couple of slightly dry, straight up Stoli martinis after a meeting after work............. ;)

Bill,

The old golden age architects did okay with designing new courses after a few cocktails, why not design a new economy after a few cocktails!?

Bill_McBride

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #311 on: March 02, 2009, 08:40:30 PM »

Nuke 'em.

This is after I quaffed a couple of slightly dry, straight up Stoli martinis after a meeting after work............. ;)

Bill,

The old golden age architects did okay with designing new courses after a few cocktails, why not design a new economy after a few cocktails!?

Could I do any worse?

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #312 on: March 02, 2009, 08:46:13 PM »
Patrick...

Let's see..we have the stimulus floating around..a new budget...a housing crisis, banks failing left and right...corporate earning down, people getting laid off....and you are suggesting the markets are down because someone on Wall Street doesn't like the stimulus plan?
No one is above the law. LOCK HIM UP!!!

Patrick_Mucci

Re: Northern Trust under pressure...
« Reply #313 on: March 02, 2009, 09:50:39 PM »
Craig,

The markets previously reacted to those events.

You have to stay current ;D

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #314 on: March 02, 2009, 10:05:48 PM »
Patrick...

Are you suggesting I not go snowboarding everyday, and stay home once and awhile and watch CNBC?
No one is above the law. LOCK HIM UP!!!

Patrick_Mucci

Re: Northern Trust under pressure...
« Reply #315 on: March 02, 2009, 10:13:48 PM »
Mike Sweeney,

Some made a good argument for letting AIG go.
Others made good arguments for saving it.

It's the selective nature of who gets bailed and who doesn't that concerns me.

If I had my drothers I would have prefered to have seen AIG apportioned amongst the survivors in an orderly fashion, if that would have been possible.

These conditions took a while to coalesce and reach critical mass, unwinding them will not happen overnight, despite who tries to force it.

I'm surprised that you took campaign rhetoric to heart, but, then again, you're not alone.  Perhaps the cheerleaders, the media, swayed your views. ;D

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #316 on: March 02, 2009, 11:50:26 PM »
Patrick...

AIG is an insurance company essentially, right?  So government take over is out of the question? The banks on the other hand...I think we should take them over...nationalize...get them in order..split them up...hire some new people to run them, whatever...and then re-privatize them.
No one is above the law. LOCK HIM UP!!!

John Kirk

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #317 on: March 02, 2009, 11:57:28 PM »
Do you guys know that AIG started as a Chinese company, and that AIG is reported to have a ton of Chinese pension money under management?

If I had to guess, that is why we don't let AIG fail.

Steve Lapper

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #318 on: March 03, 2009, 06:50:31 AM »
Do you guys know that AIG started as a Chinese company, and that AIG is reported to have a ton of Chinese pension money under management?

If I had to guess, that is why we don't let AIG fail.


John,

 AIG did indeed begin as a casualty insurer in Shanghai in 1919, but it shifted abroad long since. It's policies and money under management (mostly profitable components of their business mix) have long since been divorced and stripped by risk and accounting from it's toxic core, CDS underwriting. Any Chinese investment has ZERO do to with the present malaise and are, if still intact, part of the healthy business seeking to be sold or spun off.

 The absolute reason that the Government will not allow an AIG failure is found in the far-reaching entangled web of CDS exposure that permeates so very many other large and worldwide (ex-Chinese*, mostly US & European) financial institutions.

 Extraordinary counter-party risk triggered at default upon any bankruptcy of AIG would immediately trigger and then transfer enormous sized economic risk onto the balance sheets of many, many important financial institutions (banks, other insurers, trusts, investment banks, pensions, etc....), thus immediately endangering their balance sheets and directly causing a cascade of otherwise healthy asset selling into multiple markets. If you think today's rapid deflationary spiral appears sizable and swift, just imagine adding hundred's of billions of primary asset sales to this vicious cycle. Many of my friends on the Street imagine such an event as "Lehman squared!" This game of ratings arbitrage was pervasive across the financial landscape and few, if any, would be spared.

Again see Joe Nocera column in Saturday's NYT, and Andrew Ross Sorkin's piece today for a much better explanation of this "House of Cards."

http://www.nytimes.com/2009/02/28/business/28nocera.html?pagewanted=1&sq=nocera&st=Search&scp=4

http://www.nytimes.com/2009/03/03/business/economy/03sorkin.html?ref=business

  I personally abhor most all of these baliouts and would much prefer to see us take our medicine and immediately seize and then shrink the likes Citicorp, GM, Chrysler and any other heavily insolvent institutions that have been defined as "too big to fail."** Yet, AIG is a whole other story and though begrudgingly, I have to support to save it until it can be safely "run off." An AIG failure, unfortunately, would likely end up being the very definition of the systemic risk we cannot afford to experience.

*Chinese financial institutions do not need to adhere to GAAP and other western-style accounting practices and as such, did not have the need to use CDS for earnings-creation, ratings arbitrage or capital-shifting behavior.

**Guys like Mike Policano can so much better address the machinations and implications for these wind-downs. I'm a piker compared to him on this subject. ;D
« Last Edit: March 03, 2009, 08:08:19 AM by Steve Lapper »
The conventional view serves to protect us from the painful job of thinking."--John Kenneth Galbraith

Rich Goodale

Re: Northern Trust under pressure...
« Reply #319 on: March 03, 2009, 06:53:33 AM »
This is after I quaffed a couple of slightly dry, straight up Stoli martinis after a meeting after work............. ;)

Bill you are old enough to know not to use the name of any vodka in the same sentence as "martinis."  Shame on you......

Rich

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #320 on: March 03, 2009, 09:55:25 AM »
Shivas...

The only people that this will apply to are those with incomes over $300,000...

Should they be able to take a greater mortgage deduction than someone in the 28% bracket because they earn more?

The vast majority of homeowners do not itemize and thus do not get this break in the first place...

Why should the lower wage earner, in essence, subsidize the person in the top bracket?
No one is above the law. LOCK HIM UP!!!

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #321 on: March 03, 2009, 10:03:49 AM »
Shivas...

Cry me a frickin' river!  Boy, I'm really sorry that this 3% increase in the top end tax rate is so hurtful...

We are living in a time of historically low federal taxes...never mind that during one of the strongest economic times in our history we had a top end tax rate of over 90%....some would argue this country became the greatest economic engine ever during that time....a huge middle class was born during that time...millions of kids went to college during that time....many for free! Imagine that Shivas...free education!  And yet the wealthiest country in the world came of age during that time...

And now here's poor little Shivas all bent out of shape that his tax rate will go to 39%...and somewhere a single mom is going to get her child care paid for....
No one is above the law. LOCK HIM UP!!!

jeffwarne

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #322 on: March 03, 2009, 10:07:10 AM »
Shivas...

 
Why should the lower wage earner, in essence, subsidize the person in the top bracket?

I'm actually speechless (typeless) at that quote
"Let's slow the damned greens down a bit, not take the character out of them." Tom Doak
"Take their focus off the grass and put it squarely on interesting golf." Don Mahaffey

Lou_Duran

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #323 on: March 03, 2009, 11:39:43 AM »
"I'm actually speechless (typeless) at that quote".

I am a weak person, I just can't help myself (from posting).  Please Ran, put me out of my misery and give my access to someone else.  You can even cash the check I sent you in Dec.

It is fairly dominant doctrine in contemporary Christianity that the fruits of our labor, our profits, wages, capital gains, etc. are not really ours but God's.  Many of the bible churches teach that we are given these things by the Almighty and we should be careful stewards.  First fruits- the 10% tithe- to the church are just the beginning in managing these God-given resources.  To be good Christians, we are commanded to take care of the poor, the weak, the afflicted, regardless our feelings or beliefs on the size of the task or its futility.  Charity, giving, and serving others in the larger community are becoming the primary topics of the message and the focus of the church.

In the past year I have heard Rick Warren do a three week series specifically on this subject.  He discussed a new concept that he says several members of his church practiced, reverse tithing- living on 10% of gross earnings, and tithing to the church for its good works missions what is remaining after taxes.  Todd Proctor and Mike Erre at Rock Habor Church is Costa Mesa, CA did pretty much the same sermon though it took them most of six weeks.  David Daniels at Pantego Bible Church in Fort Worth just finished a four week series with a near identical emphasis.

Western society, particularly in Europe, is becoming increasingly secular.  Government has incrementally assumed the role of the church as well as the family, and it should not surprise us that many people like Craig Sweet have adopted the position that it is the "taxpayers' " money that we earn individually, and that it is for government to decide how much we should be allowed to keep.  In this frame of mind, someone reducing their taxable income through a deduction is at the expense of the "taxpayers", or more accurately, Government, the secular God to which we are now His supplicants.

The big difference with a supernatural god and a wordly one is that the latter has the temporal power to compel in real time, namely the gun.  For those of religious belief, the former sees us as equals through his eyes, allows us to exercise our free will, and is infinitively forgiving of our many faults and transgressions.  The God of the Bible loves the sinner but not the sin.  He is even said to possess a sense of humor.

The earthly god has no similar orientation.  Fail to pay the tribute, and unless you are Daschle, Geitner, Rangel, now Kirk, etc., you pay a hefty fine and may end up in jail.  And as to favorites, "hell hath no fury as that of a protected class scorned"  If you are a CEO or a person who questions the reasoning with the stimulus plan or the proposed budget, He has no patience for you, say nothing about love or even humor.

So, with this mindset, it is perfectly reasonable and acceptable to believe that even those who pay no FEDERAL INCOME taxes are subsidizing those who get to deduct the interest on their jumbo mortgages from their income subject to FEDERAL INCOME taxes.  As the thinking goes, high earners and wealthy people are GIVEN  their opportunities by society, the collective.  Government, as the voice and will of the collective, giveth and it can taketh away.  And so is written, U.S. Constitution, 16th Amendment.   

Craig Sweet

  • Karma: +0/-0
Re: Northern Trust under pressure...
« Reply #324 on: March 03, 2009, 12:13:09 PM »
Lou...

You typed a lot of words to get to the meat of your rant...

"So, with this mindset, it is perfectly reasonable and acceptable to believe that even those who pay no FEDERAL INCOME taxes are subsidizing those who get to deduct the interest on their jumbo mortgages from their income subject to FEDERAL INCOME taxes.  As the thinking goes, high earners and wealthy people are GIVEN  their opportunities by society, the collective.  Government, as the voice and will of the collective, giveth and it can taketh away.  And so is written, U.S. Constitution, 16th Amendment. "

Ah gee Lou....I suppose it is something other than the "collective" that built the Interstate system....that pushed for clean water and air, that pushed for child labor laws and a 40 hour work week...that built our state university systems....that pushed for an FDA to insure the medication you take is safe...etc. etc....etc.

I'll tell you what Lou....you can keep all your money, and patch your own pot holes, provide your own police and fire safety, feed the hungry and clothe the naked....etc. etc. etc.
No one is above the law. LOCK HIM UP!!!

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