Pre-Prohibition party, Wall Street is fucked & new a book…

Welcome to the financial apocalypse folks but more on that later. Some blog stats for you – 972 posts. 19224 comments, and 41+ contributors. Approaching 1000 posts and 20,000 comments. Should be fun.

Upcoming reader submissions:

WW, Ron, Pants Elk, and 2nd part of the Manila Trip Report. YP on his love for English women and BBB might touch his keyboard this week.

More party details soon folks but pencil in this Friday for the Top O the Month Mango Party. This will be your last night to drink in the bars until sometime late Sunday – if at all. I expect this prohibition to be strictly enforced since it is the Bangkok elections. Bars are suppose to stop serving Saturday at 6:00pm and may be able to re-serve at midnight on Sunday. No one has to close but there will be no booze served.

As to the party. Expect Happy Hour all night, air-conditioning and free music. The rest I am fuzzy on but never fear. We will think of something.

Shout out to some new customers. The dude from America – http://blog.agentxray.com/.

And the Italians who drank all the Heineken on Saturday. Props. http://www.murder.it/

People tend to talk about violence in Thailand but do you see stuff like this in Thailand?

Kerwin said Collier suffered 14 bullet wounds to the back, left groin, left legs and right buttock. In addition, a bullet severed his spinal cord, causing the paralysis. The amputation was the result of damage to his left leg and groin, where blood clots formed. Five bullets alone were removed from his urinary bladder and the 26-year-old player also had bouts of pneumonia, infections and renal failure.

Just absolutely stunning. May the force be with Collier and his rehabilitation. Scary shit.

Well. The US is falling apart. 700+ drop on the DOW yesterday. I am sure we will all have opinions on it but let’s just say that the US Congress is a living joke. This in from Tosh:

However, on the crowded list of blameworthy parties in this mess none earns a greater degree of contempt than our Representatives in Congress Assembled. The Fed finally started treating the issue as a systemic one (which it is) and came up with a proposal that they thought was a good idea. Congress, who so far had been plugging their ears and yelling “NAE NAE NAE” as loud as they can, decided that before considering any substantive action it was high time to spend two days preening on nation television gang banging Hank Paulson. That useful job complete, they proceeded to give the Secretary of the Treasury and Ben Bernanke substantively everything they had asked to have in the first place.

Our elected ‘leaders’ took this break because they had no idea which way the political wind was blowing. After much thumb licking and hand in the air sticking they discovered that while vanishingly few of their constituents know what a CDO squared or a credit default swap was, they all were displeased that a bunch of egghead bankers with too many Excel models had taken home staggering amounts of compensation while blowing up the banking system. Whenever I see Chris Dodd or Barney Frank in CNBC I want to throw a stapler at the screen. ‘WHERE WERE YOU FUCKING MORONS FOR THE PAST 20 YEARS!’

Another slant on it from one of my favorite blogs in the states:

These people (the U.S. government) need to be stopped. Every time we get ourselves into an economic mess, there’s usually some milestone idiocy we can point back to as the government action that made the meltdown inevitable.

Take the current housing crisis that has now spread to the financial markets in general. The cause was too-easy credit that fueled a massive increase in housing prices as people bought houses they couldn’t afford with mortgages they weren’t able to pay off.

While we are on the subject of my favorite blog let’s take note that although the world is falling apart the tech world is looking at a huge paradigm shift and Google is looking to be the next monopolist. Let’s quickly examine the waves. First we had the Mainframe(IBM bastards), then the Desktop(young Gates), desktop apps(the older gates), the browser(Gates and co) and now the fight for search. Search is the gateway to the internet and it is now controlled by Google. Why do they want to control it – that’s where all the ad money is. Google does not do search for the good of mankind. Trust me on that one. The Yahoo/Google deal needs to die. Here is Tech Crunch on that:

But if Google gets Yahoo, Microsoft won’t be able to be that counterbalance. And then Google will be free to charge monopoly prices to advertisers and share next to nothing of that revenue with publishers.

That’s why killing this deal is so important. It’s not about the share price of Google, Yahoo or Microsoft. It’s about maintaining a healthy Internet ecosystem that continues to let entrepreneurialism bloom.

My position on this has been steady since Microsoft first bid for Yahoo early this year. It’s destroyed my relationship with (the execs that remain at) Yahoo, and the chill is palpable during my few visits to Yahoo HQ these days. I can live with that, but what I don’t want to live with is an Internet where all the advertising revenue goes to one company. That sounds too much like the Windows/Office world of the 90s to me.

Moving to Thai politics. Shit. No use talking about it but let’s just say we have the new no-op government. Oh wait we had that before. Seems nothing has changed but the problem is now the world slowdown will get to Thailand and these guys just have no idea what to do about it. Let’s turn to Thai Crisis for this one:

With a very simple argument : Thailand can’t escape a slowdown (at best) of growth, when like dominos, all its biggest exports customers are already or are going to be in recession !

It’s so easy to understand. But, no, denial is easier.

It’s better to secure some juicy ministers, to take a maximum of cash before the temple goes down, better to play little childish games, better to name a cop as Industry Minister, better to excite people with ‒lese-majeste” and other absurd lawsuits, better to show to the entire world the insufferable thai arrogance.

In other words Somchai and his gang of yes men haven’t got a clue. Please the name alone…

Folks. Make sure you rush out and buy your copy of this new book – my guess is that is flying off the shelves:

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Check this photo from the bathroom of Euro Massage – don’t ask why I was there:

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36 thoughts on “Pre-Prohibition party, Wall Street is fucked & new a book…”

  1. Good post,

    Possibly to add a little silver lining to the present dark cloud. Congress still can vote again, and hopefully after this massive debacle they’ll at least come up with something.

    Honestly this political freeze-up on the part of Congress is reminiscent of the brilliant Smoot-Hawley tariff in 1929, and another reason why politicians, and seemingly now bankers as well, cannot be fully trusted with the reigns of the economy (so who can?!).

    We can’t blame Congress entirely for this mess. It doesn’t help that Bush got involved and currently has about the same amount of credibility and national respect as Adolph Hitler would have at a meeting of Israeli Mossad. I think if he wouldn’t have gone on TV and gotten everyone thinking that this package was the magic bullet, then the markets wouldn’t have plunged the moment the package failed, but that is conjecture on my part. Hey wait, I have an idea of where to find hundreds of billions of dollars that Congress has already allocated for Administration use, maybe END THE MASSIVELY UNPOPULAR WAR THAT’S COSTING THE AMERICAN TAXPAYER BILLIONS OF DOLLARS PER DAY and reallocate that money to help the domestic economy, just a thought.

  2. “… the brilliant Smoot-Hawley tariff in 1929”

    It’s always been *my* favourite 1929 tarriff, too. Although the Hoot-Smawley which predated it by only a matter of a few hours has its advocates, I know. I think we can all agree that the Moot-Shawley at the end of that year was a bitter disappointment.

  3. Bugger the monetary problems.
    In April we go 3300 Bht to $100 AUD. In October we will get 2700 Bht. What’s 600Bht in the scheme of things.
    While everyone in the world is worrying about this..crisis?? just you few of us lucky bastards know where to spend your time and money. If the ROTW knew what we knew BF would go up 3 fold. Enjoy!

  4. re: yahoo + google news piece.

    i work for yahoo and too feel the same way tech crunch do, the msft bid and subsequent failure at the buy out, really killed a lot of the yahoo vibe, and I think maybe have damaged us for good.

  5. Even if Google were to buy Yahoo, Microsoft could surely strike back and even the balance by teaming up with Cuil?

  6. 3amigos – 600 baht is over a quarter of a fantastic massage at The Ring Fashion Massage, where everyone goes home happy! Book now to avoid dissapointment!

    Post coming soon entitled ‘wank in a sock vs. soapies’

  7. @BBB – I snorted tea out of my nose reading that.

    @SSB – as dangerously stupid and venal as what they did last week (when I wrote that to friends and family) is what our Representatives in Congress Assembled did yesterday. Makes wasting two days cornholing Ben Bernanke look like time well spent on sober statesmanship. I cannot think of a more cowardly, pathetic display. Maybe when the Continental Congress was speculating on land with borrowed English money while Washington’s army was freezing to death. But it’s at that level. Mind boggling.

  8. How about Gov. Palin offering to remove a layer of clothing for every 100 points the market recovers?

  9. despite the financial/political mess…at least the LHC in Switzerland didn’t open up micro blackholes and destroy the world earlier this month.

  10. Re: U.S. Financial Stuff…briefly. I make my living in the “moneybiz” but we deal on volatility so the past few weeks, and yesterday (Sept. 29) was good for us.

    Briefly:
    I liked certain aspects of the plan…Pelosi didn’t help her cause too much with a really stupid speech just before the vote. Turned out that many voted “no” absent a reformation of Fannie and Freddie.

    The lack of a plan will affect liquidity which will hurt “Main Street” far more than “Wall Street”. Quality Wall Street is already bailed out. Main Street liquidity is really hurting right now.

    Dems more to blame since Pelosi couldn’t deliver her side. No surprise there. War funding has nothing to do with this. Apples and oranges, Counsellor. Even if there was no war, there had to be a plan to inject liquidity in the system. Can’t do it solely off the Fed’s balance sheet.

    More detail and links on my blog http://asianbadger.wordpress.com

    Good luck with the party. Make sure Doctor Bond behaves himself.

  11. @Asian Badger – (fellow money grubber and WI native). I don’t think the issue is about the bailout. There are things I like and things I don’t. The point is it was a deal struck at the highest levels of both parties that couldn’t even make it through the first vote. Good, bad, or ugly that is a scandalous lack of leadership, and you saw what it did to markets. I can’t imagine Bush Sr., Reagan, or Clinton would have ever let this happen, in spite of their differing images and ideologies (to the extent they had any), they were all solid, capable politicians and would never have gone into a vote like this with their asses and the US economy hanging out. That flyweights like Pelosi and that little twit Boehmer would be allowed to blow this up, I just can’t imagine it. And just so you don’t think I’m bitter in my personal account every dollar in US equity exposure is hedged with a RUT put so I’m fine.

  12. The best part about the NO vote for the bailout was it came about an hour after wannabe V.P. Sarah (failin’) Palin (campaigning with John McCain in Ohio) claimed that McCain’s leadership had been instrumental in bringing the House Republicans onside with passing the bill. But they were 12 GOP votes short for the bill to pass. Oops!

  13. @Tosh. We were short on the OEX & SPX at the open so we did just fine, too. I love volatility in the markets!!

    You’re right about Pelosi. She couldn’t deliver her side so she blames the GOP…typical.

    Best of luck..the next few days could be just as volatile if not as deep as Monday.

  14. For all of you “chickenhearted the sky is falling” types I banish each of you in turn to living, sleeping, and banging Pelosi for one week. Don’t bring your own whips and chains, I’m sure she a closet full. All of this Wall Street problem will pass, but because you mentioned her name, your week with Pelosi will haunt your nightmares all of your lives. She’s the original wicked witch from the east. No YP, you can’t stay with her longer than 1 week.

  15. The market rebounded up 485 tuesday on the assumption that the “plan” will pass later in the week. Pelosi had very little to do with why this bill did not pass, that was just spin. The main reason was it is election time and it is very hard to vote for this bill as a republican when you have this much head wind.
    1. A lame-duck president who is this unpopular.
    2. A economy that is clearly in recession.
    3. A perception that this was a bailout for the big boys on wall street no matter what Warren Buffet or anyone else says.
    4. When your constituents are calling your office 100 to 1 against this bill.
    Now Republicans have cover when they do change their vote by saying ” I voted against this current bill just as my constituants asked” but now the Treasury and the Dems. have put mainstreet on the same level as the wall street banker.
    The sky won’t fall, Wall street won’t disappear, and politicans are always trying to get re-elected, for better or worse this is a fact.

  16. This is probably outside the scope of this blog but I’m with Asian Badger on this subject!

    Volatility is great if you have dry powder to burn when the chips are down.

    Monday’s plunge simply presented a unique opportunity to load up on a few stocks that fell with the outgoing tide.

    Apparently, I’m not the only one thinking this way as the markets snapped right back; albeit not to the levels they were at. Shorts were definitely covering their positions which bode well for long term gains.

    When the mine is perceived to be collapsing, it’s time to pick up the diamonds that are covered in coal dust!

  17. “She [pelosi] couldn’t deliver her side so she blames the GOP…typical.”

    to quote a well known blogger, “that’s funny. i like that.”

    i’m neither a republican nor a democrat, but surely you’re saying this tongue in cheek. 60% of democrats approved the bush sponsored plan, whereas bush’s own party could only muster a third? then boehner blames peolsi for not speaking nicely enough to the republicans? what are they putting in the water up there in wisconsin – looks like the badgers had a few swigs before heading to the big house this past saturday 🙂

  18. Sideshow, please be sure to write up a detailed review on Euro massage experience. I tried Tulip based on the reviews here and I wasn’t disappointed.

  19. @Sponsor….Pelosi wanted the bill passed. She couldn’t deliver the MAJORITY of the vote. Can you say Congressional approval rating of 9%?

    I say, give her to YP as long as YP wants her.

  20. yeah, she did want it passed and surely didn’t help matters with her speech before the vote. then again, Bush wanted it too, but could only get a third of republicans behind it (i understand he may have been busy meeting with the leader of ghana to really focus on such a trivial matter, however). at least bush’s ratings are better than those of congress (thank god for the evangelicals – as long as bush is against stem cell research they’ll be loyal till the end).

    i say let YP enjoy the pleasures of both bush and pelosi.

  21. @ Asian Badger,

    Fair enough, I know that strictly speaking the war and the economy are apples and oranges, but its the same fruit cart. What I was implying was the fact that this current bailout package would be easier to swallow (at least in my opinion) were it not for the fact that so much money is already going out the side door to fund the war. I do understand that the bailout is probably necessary, but its tougher to take when this (supposedly fiscally conservative) administration has saddled the government with so many massive expenses already.

    @ Tosh,

    Good Call,

    Were it Reagan, he would have gone on TV and sold the people on it lock stock and barrel and the whole thing would be over.

    Were it Bush I, he would have formed such a massive consensus that it would have passed nearly unanimously

    Were it Clinton, he would have shed a single tear, sold the package, and been back to banging interns before 9:30 that night.

  22. zep – last warning. I swear it. Any more caps lock comments will get trashed. thanks!

  23. @ AB – Dems more to blame since Pelosi couldn’t deliver her side. No surprise there…..
    … or… a loada Dems said no and a loada Repubs said no too – but there were slightly less Repubs saying no….

    Oh ye master of spin…… I am def behaving myself… I arrive at the BM bar, eat some muffin and leave quietly – just ask the Mango Bros.
    🙂

  24. “Congress still can vote again, and hopefully after this massive debacle they’ll at least come up with something….

    We can’t blame Congress entirely for this mess.”

    TSL, the above is going into my, “Did he really say that?” scrapbook. I entirely blame congress for this mess without hesitation, as they passed the Gramm-Leach-Bliley Act (with a veto proof majority, signed into law by Billy Boy Clinton in 1999) that allowed the financial services industry behave like drunken 18 year old co-eds on their first spring break while being filmed by a Girls Gone Wild video crew.

    Most of you are probably wondering what the hell is the Gramm-Leach-Bliley Act? It was just something that effective repealed the protections put into place by the Glass-Steagall Acts. Now you’re asking what the F is that? OK, I’ll start speaking more better english…there was this financial shake up thing that started in the late 1920’s called the Great Depression…some of you may have heard of it. The Glass-Steagall Act was put into place to separate financial institutions businesses so that those who were involved in speculative investment business (such as the stock market) could not also be involved in non-speculative investment businesses (such as savings account, home loans, insurance and the like).

    Thus, with the repeal, I can and do blame Congress because I know that those “power brokers” and “influence peddlers” in the financial services industry, having the personal relationships and financial resources to lobby the shit out of Congress, nearly always get their way. Only now, with the financial services industry in near ruin, do these elected talking heads pretend to care, with the majority doing so only to be re-elected and keep their cush-ass jobs.

    For those of you who want more than the average American idiot’s understanding, enjoy:

    http://en.wikipedia.org/wiki/Glass-Steagal_Act
    http://www.answers.com/topic/glass-steagall-act
    http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
    http://www.answers.com/topic/gramm-leach-bliley-act-of-1999
    http://www.opensecrets.org/news/2008/09/money-and-votes-aligned-in-con.html
    http://scottthong.wordpress.com/2008/09/19/obama-vs-palin-this-cartoon-says-it-all/

    And for those who just want the main sound bite…

    “Economist Robert Kuttner (among others) has criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis.[5] Economists Robert Ekelund and Mark Thornton have made similar criticisms, arguing that while “in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance” the Financial Services Modernization Act would have made “perfect sense” as a legitimate act of deregulation, under the present fiat monetary system it “amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly”

    And according to these stories, that’s exactly what’s happening

    http://news.yahoo.com/s/ap/20080929/ap_on_bi_ge/rescue_package_details
    http://news.yahoo.com/s/time/withoutabailoutplanwhatwillthecostbe

  25. For the BKK Elections.

    O’Reilly’s on Silom, near Saladaeng is ALWAYS open for any special “closure”,

    So, I’ll bet your left nut they will be serving as per usual, and I will be drinking pints out of paper coffee cups, again. *sigh*.

  26. With all due respect, and not to get too finance geeky, a lot more happened than Glass-Steagal restrictions being lifted. In addition, the groups pushing for the repeal were the big retail banks, not the risk taking Wall Street investment banks. The Citicorps and Wachovias (then a sleep N. Carolina regional bank) of the world wanted a bit at the Wall Street pie, not the other way around.

    The real cause in this is that standards for lending money went to hell. Some of that was a cause of relaxing regulation, and a whole lot of it was irresponsibility, greed, and laziness from both the people making the loans and the people borrowing the money. Wall Street might have reprocessed the shit to give it the appearance of non-shit (along with a great deal of help by the ratings and insurance businesses), but we can’t blame them for making the shit.

  27. P.S. Wait until you see the shit created in the UK. Really, it makes our US shit look like, well, not shit. A friend of mine and a brilliant investor (and an Englishman) said to me almost a year ago, ‘You Americans don’t know the first thing about a housing crash. Leave it to us English, we’ve got _practice_ at it. There were real estate bubbles in London 500 years before you had a country.’

  28. Bubba,

    I wholeheartedly concur with your view that the effective repeal of glass-steagall led to the current crisis. I would take it one step further and say that the problem is systemic and goes back even further to the repeal of Bretton Woods and Nixon’s famous remark, “we’re all Keynesians now,” except for the fact that Keynes would have gone ape shit at the repeal of Bretton Woods.

    Also, banks got into a speculation game that effectively didn’t exist before. Namely selling mortgages on the secondar market, only problem is that it is never good when the person you are buying from has an incentive to water the stock. Case in point, bundling up 3 good mortgages and 4 bad doesn’t make them all good, so now we have to fucking “deleverage” everything. Separate the shit from the not shit as it were. I have a friend who says the UK is in even worse than the US, but I have no frame of reference myself

  29. I realize this is getting way OT, but one quick response to Soi Lawyer. I’ve never been a gold standard guy (can you imagine how much more we’d be screwed right now if currencies were fluctuating at the volatility of gold?), mostly because I don’t understand why gold should be the peg, other than tradition. If you gave me a choice between a gold mine or an oil field with an equal dollar value today, I’d take the oil field. So why not peg the dollar to oil, or wheat, or water, or anything else?

    Second, mortgage backed securities have been traded in international markets in more or less their current form since the early 1970s. That’s why the central bank of China supposedly had $400 billion of Fannie/Freddie debt when they were backstopped. Paper backed by credit card loans, car loans, home equity lines, and pretty much anything else has been trading for shorter, but very long stretches of time. I still say the issue was the degrading of standards for borrowers, but you can argue that Wall Street got exotic and that’s the problem. I guess they both worked to make the other worse.

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