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halik

Lifer
Oct 10, 2000
25,696
1
0
Originally posted by: chess9
Halik:

Btw, credit is loosening a bit, but why? Do you really think it's because of the bailout infusion that hasn't occurred yet?

I doubt it. Monetary policy is more important, and other factors, mentioned above.

-Robert
Well if you believe that markets are somewhat efficient, the combination of the bailout, liquidity injections and gov't guarantees are already priced into the rates.
 

chess9

Elite member
Apr 15, 2000
7,748
0
0
Originally posted by: halik
Originally posted by: chess9
Originally posted by: halik
Originally posted by: chess9
Originally posted by: LegendKiller
Originally posted by: chess9
Originally posted by: LegendKiller
Originally posted by: chess9
Originally posted by: halik
Originally posted by: LegendKiller
Originally posted by: halik
Originally posted by: ironwing
Yesterday NPR had a story pointing out that while the LIBOR was falling, the banks still weren't lending to each other. Price isn't the issue.
The way i understand it, Libor is the rate for OTC transaction, so if you're a bank in BBA, you can call up other banks and borrow at that rate. Whether banks do or don't isn't really relevant, so long the system works.

Was that the story where they had a whiteboard with a bunch of bank names on it that are looking for money and like 2 banks that were actually offering money? I heard that last weekend, it was from early Oct.
Also keep in mind that most floating rate contracts are indexed to LIBOR. Thus, securitization transactions, mortgages, and many other items, are greatly affected. That there was such a huge TED spread is indicative of a poorly functioning market.

I do think that the rescue plans should have included reps&warrants that they would lend, although it'd be tricky to paper up so we avoid a repeat.
Heh I've got ~38K worth of Grad loans indexed to libor (L+150) and my parents' ARM is indexed to it also.
Oh, well, LIBOR is very important then. LOL. Let's not talk MACRO effects though, ok? :)

-Robert
When I submit a bill to some of the largest companies in the world for funding costs that are now 2x what they were last month, resulting in hundreds of thousands of dollars of additional costs, what then will happen to that extra expense? How will the company recoup the cost?

How will people who do owe LIBOR indexed loans, economy wide, recoup the extra funding costs?

But wait, I guess all of those micro-economic affected entities have nothing to do with the macro-economic outlook.
I didn't say NOTHING. But the size of indexed loans versus the potential lending market is tiny. I'm not saying LIBOR means nothing, but it certainly isn't a big issue at the moment, at least IMHO.

Reasonable people are going to disagree about this stuff, so I understand your views, and certainly aren't poo-pooing them or Halik's.

-Robert

JFC, you say you're wife works in banking and you follow them so much, then you say I am too close to the trees. Yet, you *STILL* don't fucking understand.

Do you not get that this isn't as much about what money *WILL* be borrowed, but what money *HAS* been borrowed?
What has that got to do with LIBOR if the lent money isn't indexed? The amount indexed is relatively small compared to all loans made. I stopped recommending indexed loans to my commercial clients 30 years ago.

Btw, I've had many college courses in undergrad school on banking and finance and economics. I've been listening and reading for a long time too. I'm always open to new ideas. But, if you are going to preach, you have to do so with some clarity. You pop in here with a few inflammatory sentences then leave. Good luck converting the masses with that approach.

-Robert
There is about ~9T of libor indexed debt outstanding... U.S. GDP is some 13T
Not a valid comparison, and you know it! :) What is ALL outstanding debt? :) Compare THAT number to indexed debt.

What is this, a high school econ exam?

-Robert
The second figure is to give you a frame of reference how much money we're talking about. If the index had stayed up there long enough for all of the 9T to reset, shit would hit the fan like no other. The point was to compare it to fixed debt, it's to illustrate how big of a problem would be a large fraction of 9T of debt defaulting.
Well, I agree that some of that indexed debt will default (small amount probably, order of no more than 5%), but you've posted GDP, not total debt. Two different numbers, lad.

-Robert

 

halik

Lifer
Oct 10, 2000
25,696
1
0
Originally posted by: chess9
Originally posted by: halik
Originally posted by: chess9
Originally posted by: halik
Originally posted by: chess9
Originally posted by: LegendKiller
Originally posted by: chess9
Originally posted by: LegendKiller
Originally posted by: chess9
Originally posted by: halik
Originally posted by: LegendKiller
Originally posted by: halik
Originally posted by: ironwing
Yesterday NPR had a story pointing out that while the LIBOR was falling, the banks still weren't lending to each other. Price isn't the issue.
The way i understand it, Libor is the rate for OTC transaction, so if you're a bank in BBA, you can call up other banks and borrow at that rate. Whether banks do or don't isn't really relevant, so long the system works.

Was that the story where they had a whiteboard with a bunch of bank names on it that are looking for money and like 2 banks that were actually offering money? I heard that last weekend, it was from early Oct.
Also keep in mind that most floating rate contracts are indexed to LIBOR. Thus, securitization transactions, mortgages, and many other items, are greatly affected. That there was such a huge TED spread is indicative of a poorly functioning market.

I do think that the rescue plans should have included reps&warrants that they would lend, although it'd be tricky to paper up so we avoid a repeat.
Heh I've got ~38K worth of Grad loans indexed to libor (L+150) and my parents' ARM is indexed to it also.
Oh, well, LIBOR is very important then. LOL. Let's not talk MACRO effects though, ok? :)

-Robert
When I submit a bill to some of the largest companies in the world for funding costs that are now 2x what they were last month, resulting in hundreds of thousands of dollars of additional costs, what then will happen to that extra expense? How will the company recoup the cost?

How will people who do owe LIBOR indexed loans, economy wide, recoup the extra funding costs?

But wait, I guess all of those micro-economic affected entities have nothing to do with the macro-economic outlook.
I didn't say NOTHING. But the size of indexed loans versus the potential lending market is tiny. I'm not saying LIBOR means nothing, but it certainly isn't a big issue at the moment, at least IMHO.

Reasonable people are going to disagree about this stuff, so I understand your views, and certainly aren't poo-pooing them or Halik's.

-Robert

JFC, you say you're wife works in banking and you follow them so much, then you say I am too close to the trees. Yet, you *STILL* don't fucking understand.

Do you not get that this isn't as much about what money *WILL* be borrowed, but what money *HAS* been borrowed?
What has that got to do with LIBOR if the lent money isn't indexed? The amount indexed is relatively small compared to all loans made. I stopped recommending indexed loans to my commercial clients 30 years ago.

Btw, I've had many college courses in undergrad school on banking and finance and economics. I've been listening and reading for a long time too. I'm always open to new ideas. But, if you are going to preach, you have to do so with some clarity. You pop in here with a few inflammatory sentences then leave. Good luck converting the masses with that approach.

-Robert
There is about ~9T of libor indexed debt outstanding... U.S. GDP is some 13T
Not a valid comparison, and you know it! :) What is ALL outstanding debt? :) Compare THAT number to indexed debt.

What is this, a high school econ exam?

-Robert
The second figure is to give you a frame of reference how much money we're talking about. If the index had stayed up there long enough for all of the 9T to reset, shit would hit the fan like no other. The point was to compare it to fixed debt, it's to illustrate how big of a problem would be a large fraction of 9T of debt defaulting.
Well, I agree that some of that indexed debt will default (small amount probably, order of no more than 5%), but you've posted GDP, not total debt. Two different numbers, lad.

-Robert
Again... the gdp figure is to illustrate how much floating debt is out there. The point is if say half of all the liability is in default, it's gonna be the size of half of our GDP. That is huge loss of wealth.
 

chess9

Elite member
Apr 15, 2000
7,748
0
0
Originally posted by: halik
Originally posted by: chess9
Originally posted by: halik
Originally posted by: chess9
Originally posted by: halik
Originally posted by: chess9
Originally posted by: LegendKiller
Originally posted by: chess9
Originally posted by: LegendKiller
Originally posted by: chess9
Originally posted by: halik
Originally posted by: LegendKiller
Originally posted by: halik
Originally posted by: ironwing
Yesterday NPR had a story pointing out that while the LIBOR was falling, the banks still weren't lending to each other. Price isn't the issue.
The way i understand it, Libor is the rate for OTC transaction, so if you're a bank in BBA, you can call up other banks and borrow at that rate. Whether banks do or don't isn't really relevant, so long the system works.

Was that the story where they had a whiteboard with a bunch of bank names on it that are looking for money and like 2 banks that were actually offering money? I heard that last weekend, it was from early Oct.
Also keep in mind that most floating rate contracts are indexed to LIBOR. Thus, securitization transactions, mortgages, and many other items, are greatly affected. That there was such a huge TED spread is indicative of a poorly functioning market.

I do think that the rescue plans should have included reps&warrants that they would lend, although it'd be tricky to paper up so we avoid a repeat.
Heh I've got ~38K worth of Grad loans indexed to libor (L+150) and my parents' ARM is indexed to it also.
Oh, well, LIBOR is very important then. LOL. Let's not talk MACRO effects though, ok? :)

-Robert
When I submit a bill to some of the largest companies in the world for funding costs that are now 2x what they were last month, resulting in hundreds of thousands of dollars of additional costs, what then will happen to that extra expense? How will the company recoup the cost?

How will people who do owe LIBOR indexed loans, economy wide, recoup the extra funding costs?

But wait, I guess all of those micro-economic affected entities have nothing to do with the macro-economic outlook.
I didn't say NOTHING. But the size of indexed loans versus the potential lending market is tiny. I'm not saying LIBOR means nothing, but it certainly isn't a big issue at the moment, at least IMHO.

Reasonable people are going to disagree about this stuff, so I understand your views, and certainly aren't poo-pooing them or Halik's.

-Robert

JFC, you say you're wife works in banking and you follow them so much, then you say I am too close to the trees. Yet, you *STILL* don't fucking understand.

Do you not get that this isn't as much about what money *WILL* be borrowed, but what money *HAS* been borrowed?
What has that got to do with LIBOR if the lent money isn't indexed? The amount indexed is relatively small compared to all loans made. I stopped recommending indexed loans to my commercial clients 30 years ago.

Btw, I've had many college courses in undergrad school on banking and finance and economics. I've been listening and reading for a long time too. I'm always open to new ideas. But, if you are going to preach, you have to do so with some clarity. You pop in here with a few inflammatory sentences then leave. Good luck converting the masses with that approach.

-Robert
There is about ~9T of libor indexed debt outstanding... U.S. GDP is some 13T
Not a valid comparison, and you know it! :) What is ALL outstanding debt? :) Compare THAT number to indexed debt.

What is this, a high school econ exam?

-Robert
The second figure is to give you a frame of reference how much money we're talking about. If the index had stayed up there long enough for all of the 9T to reset, shit would hit the fan like no other. The point was to compare it to fixed debt, it's to illustrate how big of a problem would be a large fraction of 9T of debt defaulting.
Well, I agree that some of that indexed debt will default (small amount probably, order of no more than 5%), but you've posted GDP, not total debt. Two different numbers, lad.

-Robert
Again... the gdp figure is to illustrate how much floating debt is out there. The point is if say half of all the liability is in default, it's gonna be the size of half of our GDP. That is huge loss of wealth.
First of all, half of all liability (debt) is not in default or going to be in default unless we have a depression. Secondly, this discussion was about the relative importance of LIBOR for an understanding of the economy, and specifically indexed debt, and whether LIBOR has been affected by the stimulus or bailout package. Although GDP is affected by debt, GDP does nothing as a figure to explicate the merits of LIBOR. Excepting possibly the extent to which GDP in the future will be affected by current rates of LIBOR.

Anyway, the current stimulus package may have had a psychological effect on the market, but it has had no other effect because it hasn't gotten that far. I don't discount the importance of psychology here, so your initial argument carries some weight, perhaps, when looked at in terms of market psychology. How long that will last is anyone's guess....I don't think it's worth much in the long run. Reality has set in, I believe. Check out the markets today....:(

-Robert

 

miketheidiot

Lifer
Sep 3, 2004
11,062
1
0
Originally posted by: PC Surgeon
Originally posted by: halik
Originally posted by: PC Surgeon
Originally posted by: halik
Originally posted by: PC Surgeon
Originally posted by: halik

Heh I've got ~38K worth of Grad loans indexed to libor (L+150) and my parents' ARM is indexed to it also.
Hence the reason you are so enamored with LIBOR. :roll:
Ok do you have anything intelligent to add to the conversation? If you're out of your element when it comes to capital markets, feel free to navigate yourself to the IT part of the forums.

Or read this
Well am I wrong in this? Is this not the reason you continue to constantly post on LIBOR? Please elaborate on your reasonings being that in each LIBOR thread you create, you mention your loans.
Did you read the link? Libor is an indicator how bad the credit markets are - looking at that and treasury yields gives you an idea how much credit is out there.
Is this where I say "I stand corrected" or where you say "You're right, I post about LIBOR because of my personal interest"?
if he does, will you stop 'contributing' to this thread?
 

miketheidiot

Lifer
Sep 3, 2004
11,062
1
0
Originally posted by: chess9


First of all, half of all liability (debt) is not in default or going to be in default unless we have a depression. Secondly, this discussion was about the relative importance of LIBOR for an understanding of the economy, and specifically indexed debt, and whether LIBOR has been affected by the stimulus or bailout package. Although GDP is affected by debt, GDP does nothing as a figure to explicate the merits of LIBOR. Excepting possibly the extent to which GDP in the future will be affected by current rates of LIBOR.

Anyway, the current stimulus package may have had a psychological effect on the market, but it has had no other effect because it hasn't gotten that far. I don't discount the importance of psychology here, so your initial argument carries some weight, perhaps, when looked at in terms of market psychology. How long that will last is anyone's guess....I don't think it's worth much in the long run. Reality has set in, I believe. Check out the markets today....:(

-Robert
Only a portion of debt might be indexed to libor, however libor rates are indicative of the costs of lending for the overall market. Furthermore, much of the projected impact of the various bailouts would be priced into the markets already. Finally short run fluctuations of the stock market don't really mean much, since the stock market is neither efficient or rational in the short term.

 

HendrixFan

Diamond Member
Oct 18, 2001
4,648
0
71
I think most of us understand that the bailout injected money into the credit markets to prop them up. It would be hard to imagine that the trillions of dollars (worldwide) going into the credit markets would have no impact whatsoever. The important question is whether or not injecting money into the credit markets, and more specifically into failing companies is a long term solution.

As the housing market falls back to reasonable levels, the house of cards built off the housing market is tumbling, taking with it the credit market. Injecting money into the credit market does does little to address the larger problem of untold trillions of dollars built off the housing bubble. As we keep throwing debt (its not money that we have) at the problem, we are just moving around the problem. We are taking the bad derivatives and throwing it into national debt. It still has to be paid for, the bailout does nothing to prevent the reckoning. Sadly, neither Obama or McCain seem to be talking about the long term solutions to this problem.
 

Xavier434

Lifer
Oct 14, 2002
10,377
1
0
Originally posted by: PC Surgeon
Originally posted by: miketheidiot


if he does, will you stop 'contributing' to this thread?
Just as soon as you mind your own business.
This is a public forum. As soon as you post it becomes everyone's business.
 

halik

Lifer
Oct 10, 2000
25,696
1
0
Originally posted by: HendrixFan
I think most of us understand that the bailout injected money into the credit markets to prop them up. It would be hard to imagine that the trillions of dollars (worldwide) going into the credit markets would have no impact whatsoever. The important question is whether or not injecting money into the credit markets, and more specifically into failing companies is a long term solution.

As the housing market falls back to reasonable levels, the house of cards built off the housing market is tumbling, taking with it the credit market. Injecting money into the credit market does does little to address the larger problem of untold trillions of dollars built off the housing bubble. As we keep throwing debt (its not money that we have) at the problem, we are just moving around the problem. We are taking the bad derivatives and throwing it into national debt. It still has to be paid for, the bailout does nothing to prevent the reckoning. Sadly, neither Obama or McCain seem to be talking about the long term solutions to this problem.
Oh no doubt, that wasn't the issue that the bailout and injections were supposed to fix. The idea is to gradually unwind all these positions gradually and let the housing get back to the pre-bubble equilibrium.

That being said, I'm confident that the bail out will eventually work to reduce the debt (ie the gov't will make a profit on it). If you believe that the current situation is a market failure and that the private sector is undervaluing all those instruments, you have to agree that the intrinsic value is more than what the gov't is paying.
 

halik

Lifer
Oct 10, 2000
25,696
1
0
Originally posted by: PC Surgeon
Originally posted by: Xavier434
Originally posted by: PC Surgeon
Originally posted by: miketheidiot


if he does, will you stop 'contributing' to this thread?
Just as soon as you mind your own business.
This is a public forum. As soon as you post it becomes everyone's business.
Exactly my point.
You do realize what you wrote makes no sense in the context of the conversation... right?
 

NoStateofMind

Diamond Member
Oct 14, 2005
9,711
6
76
Originally posted by: halik
Originally posted by: PC Surgeon
Originally posted by: Xavier434
Originally posted by: PC Surgeon
Originally posted by: miketheidiot


if he does, will you stop 'contributing' to this thread?
Just as soon as you mind your own business.
This is a public forum. As soon as you post it becomes everyone's business.
Exactly my point.
You do realize what you wrote makes no sense in the context of the conversation... right?
I guess it would require thought on your part.
 

JS80

Lifer
Oct 24, 2005
26,260
4
81
Originally posted by: chess9
My wife worked for a bank for 10 years, then a commodity trading firm/stock firm for years. I'm a trained lawyer, but I've been following these issues for a very long time. I've also done a lot of trading in the past. Almost 48 years of experience is worth a bit, but your mileage may vary.

These are my opinions, not the word of Greenspan. Erm, well.... :)

-Robert
Well that certainly explains a lot about your [retarded] posts
 

Xavier434

Lifer
Oct 14, 2002
10,377
1
0
Originally posted by: PC Surgeon
Originally posted by: Xavier434
Originally posted by: PC Surgeon
Originally posted by: miketheidiot


if he does, will you stop 'contributing' to this thread?
Just as soon as you mind your own business.
This is a public forum. As soon as you post it becomes everyone's business.
Exactly my point.
Just because you make it your business doesn't mean you are contributing to that business. He may correct me if I am wrong but I believe that is basically miketheidiot's point.
 

NoStateofMind

Diamond Member
Oct 14, 2005
9,711
6
76
Originally posted by: Xavier434
Originally posted by: PC Surgeon
Originally posted by: Xavier434
Originally posted by: PC Surgeon
Originally posted by: miketheidiot


if he does, will you stop 'contributing' to this thread?
Just as soon as you mind your own business.
This is a public forum. As soon as you post it becomes everyone's business.
Exactly my point.
Just because you make it your business doesn't mean you are contributing to that business. He may correct me if I am wrong but I believe that is basically miketheidiot's point.
That is a two way street is it not? (this is getting sorely off topic)
 

daniel49

Diamond Member
Jan 8, 2005
4,814
0
71
I'm not sure the banks are loaning it as much as using it for a cushion.
But now that Goldman Sachs has money at least his pension is secure.:frown:
 

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