Baseball91's Weblog

November 13, 2008



Illiquid.  Over swerved.  Henry Paulson.  Who to save?  How many?  How many before that circular device that people jumped into as firemen held onto wore out?  Before the firemen wore out?  I was beginning to feel ill liquid. 


“I believe we have taken the necessary steps to prevent a broad systemic event. Both at home and around the world, we have already seen signs of improvement,” Paulson said in a speech at the Treasury Department.  Huh?


Nasdaq composite index closed below 1,500 for the first time in five years.  Oil closed at $56.16 a barrel.  If you have not noticed it, the price of gold fell to $712.30.  And since the economy is more perilous than it was in 1996, the Dow would be below 6500 before January 15, 2009.  These closing numbers will look unbelievably great at this time in April.  All the earmarks of deflation are setting in.  The New York Times quoted Mark Zandi, chief economist at Moody’s “Wall Street is increasingly taking its cues from D.C.  Policy makers are deciding who survives and who doesn’t.” 


And the system was never supposed to operate this way.  I have heard of inverted yield curves.  This seemed more like inverted sliders and knuckleballs.


From Floyd Norris:  “Five of every 10 risky borrowers have their debt trading as if default were likely. That could indicate panic, dysfunctional markets or impending disaster. Or it could reflect a combination of all three.   The S&P financial index has lost nearly a quarter of its value since Election Day, with every share in the index falling.”


 Goldman Sachs Group Inc. is down to $66.70 per share from its $240 high over the previous 12 months.  The firm may have suffered even more damage, based on an article in the LA Times. “Goldman, Sachs & Co. urged some of its big clients to place investment bets against California bonds this year despite having collected millions of dollars in fees to help the state sell some of those same bonds.”   


 According to Elizabether Moyer in Forbes, “Fighting the financial crisis has put the U.S. on the hook for some $5 trillion a report says. So far.  For all the fury over Treasury Secretary Henry Paulson’s $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government’s response to the credit crisis.  According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.” 


As goes GM, so goes the nation.  Or does not go.  In virtually every U.S. industry, companies are openly asking the government to lend them money. 


Torii Hunter was a distraction in Minnesota in 2007.  He had gotten bigger than the game.  It can happen with media focus.  The same thing was going to happen in Denver this year.  That was why Matt Holiday was traded today to Oakland.  “He was going to be a distraction,” Dan O’Dowd said. ”And that’s nothing against Mattie. He’s earned the right to be a free agent after next season.  He’s earned the right to pick where he plays after next season.”  And a team also has a right to say enough of this nonsense.   Holiday turned down a contract offer in excess of $100 million.  He must not buy the newspaper. 


 And a lot of guys on Wall Street got bigger than the game.  Enough of this nonsense.  The Wall Street bailout put into perspective the past spending on new football stadiums whether for major league baseball teams, NFL teams, or Big Ten teams.  They were all playing for the money.  These big times players on Wall Street, in YAnkee Stadium.  Bailouts for Wall Street or bailouts in good times for athletes who thought they deserved these salaries.  Was it a wonder that present day politicians were paying for all of this, after politics had paid to build these stadiums? 


Matt Holiday.  Torii Hunter.  They were distractions.  It will be interesting to see what happens to Citibank’s $400 million commitment to the new Mets’ stadium for naming rights, as the valuation of their company has plummetted, as 52,000 employees get laid off, with billion of dollars of losses.  There was a need for a correction when the whole world had tilted and the world had over swerved. 


1 Comment »

  1. Comment by baseball91 — February 11, 2015 @ 11:07 PM | Reply

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