2 Responses to “Susan Collins Survives”

1. chuck martel says:

   February 24, 2009 at 4:13 pm

   Wow! That’s amazing! Jennifer Loven, who’s going to win the Kentucky Derby? And the World Series? What am I going to get for my birthday? Is my daughter’s baby going to be a girl or a boy? There’s so many questions I want to ask you!
2. MartyH says:

   February 24, 2009 at 4:26 pm

   The market tanked yesterday-perhaps on the “fiscal responsibility summit.”

   Bernanke’s testimony is the reason given for erasing that loss today.

   What will Obama’s speech tonight do? Send the markets up or down? Lester predicted a 500 point market rally this week. Others say that Obama speaking is a market killer.

   We’ll know more tomorrow. My bet is that the market will be down because Obama will dedicate less than 25% of his time to the banking crisis-making one wonder how much of a crisis Obama thinks it is.

   Thanks,

   Marty
3. RCAR says:

   February 24, 2009 at 4:36 pm

   Jen, I’m going to help you out.

   The reason for the downward spiral is that some 20 months into the crisis; we still don’t know the extent of the toxicity of the assets on their books and, in many cases we no longer trust the people who run these institutions to tell us the truth about the danger lurking therein,and the really scary part is that they might not know that extent. Until the trust is restored, there can be no equity value, regardless of whether the government or shareholders own the equity.
4. Rod says:

   February 24, 2009 at 4:37 pm

   “”Let’s hope the administration, and Geithner specifically, have learned their very expensive lesson.”"

   You mean, “very expensive for us*
5. Bob Miller says:

   February 24, 2009 at 5:04 pm

   Whether Bernanke turns out to be factually right or wrong, he at least speaks a language investors can hope to understand. Obama and his financial czars and czarinas can learn from this.
6. Inagua says:

   February 24, 2009 at 5:23 pm

   RCAR,

   There is a way to get measurable, verifiable, and adaquate equity capital into zombie banks — cancel the existing equity and convert the existing debt into new equity. It would be tremendously dislocative, as the existing bondholders would take a substantial hit. Geithner lacks the guts to do anything this drastic because it would be Lehman all over again with creditors screaming and money market funds breaking the buck. He is the master of too little, too late, and always at the taxpayers expense, rather than the private lendors who backed these banks. The economy will recover, but it will be inspite of, not becaue of anything the Treasury did.
7. Chris Bolts Sr. says:

   February 24, 2009 at 5:29 pm

   These wild swings on what politicians say cannot be good news for the markets over the long-run. You would think that the markets would’ve learned not to hang on the Fed chairman’s every word lest you end up with overpriced asset bubbles, but alas, everyone is looking for a bit of hope in today’s frothy environment.
8. Inagua says:

   February 24, 2009 at 5:38 pm

   Chris,

   There is a tremendous amount of capital sitting on the sidelines waiting for an excuse to get invested. If the federal government adopts a coherent policy towards the bank crisis, this money will come in and stocks will rise. Bernanke’s hints of rationality and competence offer a ray of hope, as you call it. But I disagree with your characterization of the enviroment as “frothy.” I call it depressed.
9. RCAR says:

   February 24, 2009 at 5:39 pm

   #6,
   How much Equity would a Dollar of Debt convert to? And could you leverage the newfound Equity to finance some great deals?
10. Chris Bolts Sr. says:

    February 24, 2009 at 5:51 pm

    #8, I looked up frothy to see if I was using it in the proper context. Turns out I wasn’t, so I stand corrected.

    But, I wouldn’t say that Bernanke gave a pretty coherent policy towards this bank crisis. On the one hand he says that we don’t need to nationalize the banks, which the markets and most sane Americans like, but then he turns around and says that it is only government that can end this vicious downward sprial in the financial system, which is ambiguous and unclear. I would hope that the smart folks in D.C. would start to exude some confidence and optimism and come up with a policy that is concrete and not to intrusive in the markets, but that would probably be asking too much in today’s environment.
11. JohnR223 says:

    February 24, 2009 at 6:28 pm

    Are you better off now than you were four weeks ago?

    Hey, maybe Geithner could sell his Acura and buy a Chevy.
12. From Duluth says:

    February 24, 2009 at 6:50 pm

    The “plan” is daft. Who in their right mind is going to invest major sums of their own money in bank equity, knowing that the equity will be seriously diluted by federal government funds as soon as the private investment proves inadequate due to more turd securities write-downs. The fed gov is going to end up lending billions to the hedgies at low interest — and largely non-recourse — before they bet a dollar on bank equity going anywhere but zero. But its not nationalization to pay another guy to bail out a bank with taxpayer money. Really. It’s second-hand nationalization, at higher cost than doing it directly. Has anyone in the Obama Administration actually worked in the private sector for longer than three years? While we might get a two-day “rhetoric rally” after the speech tonight, brace for more market downside next week.