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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (40872)	10/28/2008 4:19:23 PM
From: Lizzie Tudor	Read Replies (6) \| Respond to of 149317

what legislation forced mark to market do you know? it was this year sometime. mark to market along with swaps were the real culprits here. Of course the root cause is foreclosures but those should not cause a collapse of banks. 60 minutes blamed swaps this weekend for most of the damage

To: RetiredNow who wrote (40872)	10/28/2008 5:55:59 PM
From: tejek	Read Replies (1) \| Respond to of 149317

Now that we know the whole story, let me ask you this. If you are a bank exec and you were just rewarded for your previous folly and you are being told to lend more, what course of action would you take? If I put myself in their shoes, I'd say, "Screw you. I'll just take my huge bonus and sit pat and take no risks. This is way too good of a deal to pass up." You see, it's no longer that the economy is broken, it's MARKET DYNAMICS that have been disrupted. The very essence or animal spirits that make our markets work have been thrown off the rails. That's why we are headed to another Great Depression. Very ugly. I note your cynicism and frustration....its understandable. The current behavior of the banks is something we've come to expect......where we, the little guy, get screwed. This attitude has become endemic to the people of this country. We have become conditioned to feel that way because of what we have experienced these past 8 years. But things are changing.......do you have any idea how empowering it will be to get Obama elected? The actress, Kerry Washington, gets it.....she says in one of the black eye pea vids that Obama will be "our president" because we got him elected...."not the corporations; not the lobbyists but us". And while that's a bit naive and simple, there also is truth to it. Have you stopped to realize how empowering it is.....getting some elected to the presidency? Not voting for someone......but actually providing the money to make it happen. That's what the American people have done here. And people are going nuts. They can not wait to vote. My apolitical friends check their now favorite political websites in the AM, at lunch and then again at nite to see how things are going. Its like we bought shares in some company and we're tracking the company to see how well its being run. When I get together with friends, invariably the conversation turns to the election. I have not seen my neighbors in weeks......I ran into one this past Sunday. We talked an hour about Obama. Its crazy. When's the last time you've seen people excited about an election? When's the last time you've seen people wanting to talk about politics? When's the last time you've been excited about a candidate? When's the last time you couldn't wait to vote? For me, its been zilch, zero, nada, nein, nyet, never......until Obama. If Obama makes it, things are going to change. Finally, Americans are plugged in in way I never thought possible.......and frankly, I don't think we will revert to the old ways. And as pollyannish as this may sound, I think on 5 November the mood of this country is about to go through a dramatic shift. For the first time in a very long time, we will have real hope that things can get change and get better. And let me just say.....the value of hope has long been underrated.....esp by the right......but it can be an amazing tonic. Hope can turn a nation around and get an economy running on all cylinders again. So don't despair........I believe things are about to get much, much better. ;-)

To: RetiredNow who wrote (40872)	10/28/2008 5:58:11 PM
From: tejek	Respond to of 149317

And now learn how the Germans screwed some hedge funds. ;-) VW shares surge as funds buy in panic By Richard Milne and Kate Burgess in London Published: October 28 2008 09:34 Volkswagen briefly became the world’s largest company by market capitalisation on Tuesday after an extraordinary surge in its share price driven by a near-panic by hedge funds and other traders to stem losses on positions betting on a fall in the stock. The extent of the surge, which has led to sharp criticism of German capital markets, triggered intense market speculation that it could force the collapse of hedge funds and heavy losses for investment banks. VW’s share price rose 82 per cent to €945 following Monday’s 147 per cent jump, leaving it with a market capitalisation of about €287bn ($360bn). At the stock’s intra-day peak of €1005, its market capitalisation exceeded Exxon before the US oil company started trading yesterday. A manager at a large hedge fund said: “The losses will be extreme. I don’t think it is going to bring down a big fund but it will probably bring down some small ones.” One London-based auto analyst said: “I have hedge fund managers literally in tears on the phone.” The head of Germany’s largest fund manager accused Porsche – the largest investor in VW that sparked the quadrupling of its share price within two days – of acting against the interest of other shareholders. Klaus Kaldemorgen, the head of DWS, which is a shareholder in VW and owned by Deutsche Bank, said: “I criticise heavily that a company like Porsche is manipulating VW shares in an irresponsible manner.” The surge in VW’s share price started after Porsche disclosed on Sunday that it had increased its stake from 35 per cent to 42.6 per cent. In addition it has options over further 31.5 per cent, making a total of 74.1 per cent. Added to Lower Saxony’s 20.1 per cent stake, this effectively left a free float of only 5.8 per cent instead of the 45 per cent many expected. Porsche did not respond to calls asking for comment on Mr Kaldemorgen’s statement but it told Reuters news agency on Tuesday: “We vehemently reject the accusation of share price manipulation.” Under German law, companies do not have to disclose option positions if they are settled through the receipt or payment of cash rather than being converted into shares. Porsche insists it has “cash-settled options”. There was widespread expectation in the markets that the huge rise would push some fragile hedge funds – who bet on VW’s shares falling – to collapse with losses estimated at potentially €20bn-€30bn. Several hedge funds and banks denied they had any large exposure to VW. Citadel, a large hedge fund, said: “We have suffered no losses of substance on Volkswagen whatsoever. Morgan Stanley, whose shares fell 16 per cent, said it had “virtually no exposure” while people close to Goldman Sachs, whose stock also dropped, took a similar line. ft.com Porsche and Volkswagen In a time when many odd economic events are taking place, this saga nonetheless deserves comment: Volkswagen's shares more than doubled on Monday after Porsche moved to cement its control of Europe’s biggest carmaker and hedge funds, rushing to cover short positions, were forced to buy stock from a shrinking pool of shares in free float. VW shares rose 147 per cent after Porsche unexpectedly disclosed that through the use of derivatives it had increased its stake in VW from 35 to 74.1 per cent, sparking outcry among investors, analysts and corporate governance experts. This seesaw has been going on for some time and German regulators haven't done much about it, despite complaints from hedge funds. Today the share price rose by a factor of nearly five (!). So for a brief while Volkswagen became the world's largest company in terms of capitalization. Who needs Exxon and WalMart? I thank Ben, a loyal MR reader, for the pointer to this episode. Posted by Tyler Cowen on October 28, 2008 at 09:24 AM in Economics \| Permalink Comments Why should German regulators do anything about it? I know many hedge funds involved in what's called the Porsche stub trade, and truthfully, it was flawed from the start. Essentially what happened is that earlier this year Porsche disclosed a sizeable stake in VW. Hedge funds figured out that the value of Porsche's stake in VW exceeded the enterprise value of Porsche, meaning in effect you were getting paid to own the operating business of Porsche. So to capture that spread, you go long Porsche and short VW. I know a number of funds that put this trade on and pitched it to me. The glaring flaw in their analysis though was that they assumed that Porsche, who had announced its intention to take a "majority" stake in VW, was going to stop accumulating at 50.1% because Lower Saxony controls 20% of VW and it was thought they would never acquiesce to a takeover by Porsche. Porsche never committed to stopping at 50.1%, and as this weekend's announcement shows, they didn't. So what ended up happening was that the hedge funds were shorting VW as Porsche was acquiring it. It's akin to a reverse risk arb; in risk arb you buy the target and short the acquiror, here the funds were shorting the target and buying the acquiror. As would be expected, this is a recipe for disaster. Once Porsche announced they controlled 74.1% of the stock through owned shares and cash settled options (where their banks effectively control the shares), it became obvious that with only 5.9% of shares now in the free float (remember Saxony controls 20%) that the 13% of shares sold short were in a, shall we say, precarious position. Thus the single greatest short squeeze I have ever seen. VW is now valued at over 2x Toyota Motor despite being smaller and less profitable. Posted by: joe at Oct 28, 2008 9:38:24 AM marginalrevolution.com

To: RetiredNow who wrote (40872)	10/28/2008 6:24:08 PM
From: koan	Read Replies (1) \| Respond to of 149317

You know these geniuses Obama will bring to bear on the economic problem may figure it out. Three times I wrote state plans to solve problems which had not been heretofore addressed. In each case it was simply a mater of figuring out what could and should be done. I am a big believer in bringing together the best and the brightest, as a group!!! (groups make better decisions than individuals) and set them on them loose on a problem. Like the Manhatten project. A groups solutions are much more vigoous. But it also needs a leader who has an outline of the big picture in his head. Obama understand that. Goals, objectives and methodology!

To: RetiredNow who wrote (40872)	10/28/2008 6:29:31 PM
From: stockman_scott	Read Replies (1) \| Respond to of 149317

Obama Hits One Out of the Park talkingpointsmemo.com October 28, 2008, 2:00PM Major League Baseball has just announced that the final three innings of Game 5 of the World Series will resume at 8:37pm on Wednesday night. The game was suspended on account of the weather, with the score knotted at 2-2. The Tampa Bay Rays must win this game to stave off elimination and send the series back down to Tampa. As I noted this morning, there's probably no man in America happier about all this than David Axelrod. And it's not (just) because the passionate Cubs fan has it in for the Phillies. Rather, it's because Obama's roadblocked half-hour program is set to air on CBS, NBC, and FOX on Wednesday night (ABC dithered until it missed its chance). That's why the usual start-time of the game on Fox has been pushed from 8:20 to 8:37pm. The Series delivers high ratings in some hard-to-reach demographics, but is a particularly big draw in the teams' home markets. For Game 1, also on a Wednesday night, 31.57% of all households in Tampa/St. Pete tuned in, as well as 35.7% of households in the Philadelphia media market. (It also played extraordinarily well in Orlanda, Ft. Myers, and West Palm Beach.) That's an awful lot of swing-state viewers who'll turn on their televisions to catch the start of the game, and find Obama delivering his closing message. Enough to make even a long-suffering Cubs fan find a little love for the neophyte Rays.