Eric wants some credit
Yesterday Eric and I had a little chat about the state of the financial markets, and now Eric wants some credit for predicting what needed to be done to bring the markets back into shape:
Eric: the underpinnings of finance are hurt right now
Lee: Clearly.
Eric: we have to bail out the credit insurance companies.
Lee: Lowering rates is not going to solve the underlying problems.
Eric: mbia, ambac
Lee: I don't know about "bailing them out".
They need to bail themselves out a bit.
Eric: engineered, no doubt. but they have to be made whole.
Lee: Fair enough.
Eric: I think it is freezing the normal operation of the credit markets.
Lee: Clearly.
Eric: we have to bail out the credit insurance companies.
Lee: Lowering rates is not going to solve the underlying problems.
Eric: mbia, ambac
Lee: I don't know about "bailing them out".
They need to bail themselves out a bit.
Eric: engineered, no doubt. but they have to be made whole.
Lee: Fair enough.
Eric: I think it is freezing the normal operation of the credit markets.
When word got out that New York regulators were meeting with banks and securities firms (including Goldman Sachs, Merrill Lynch, JPMorgan Chase, Citigroup and Wachovia) with approval from the president of the NY Fed to engineer a new capital infusion into MBIA and Ambac of up to $15bn, the market began a late-day rally that saw a swing of almost 600 points from the day's low. Eric thinks that his prescience in this area in some way redeems him from having predicting the sub-prime debacle without doing anything to stop it, but I know better. This morning Societe Generale announced that a rogue trader incurred $7.2bn in losses from futures trading, and although Eric claims to have been in New York at the time and speaks French like an Appalachian hillbilly, I think we all know who's to blame for this.
3 comments:
The best part? "...four to five people will be fired..."
puh..lease. its only $7.2 billion because the dollar has depreciated so much. if you turn it into euros, well its still big. maybe we should convert it into pounds.
@wife and non-trader: I was going to say something really masculine and mean about this guy, but decided that karma is a bitch. Plus I sat next to a guy while he lost $400 mil, and I still send him Christmas cards.
The real question, though, is whether you send Christmas cards to his former employees who were laid off after he lost his $400 million.
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