Can I just say that I don't care about the public-private investment program? It was a good idea before the stress tests and would have been excellent if all of these banks hadn't raised capital.
But they have.
So now we have to struggle with the notion of the program's relevance. It can be used as a cleanup program for some companies that desperately want to sell down assets to clean up their books, but with the capital raises, none of the major banks should be interested in selling into it.
Perhaps it can be used to figure out something to do with the tortured and changing rules of the game coming from the FDIC, where it looked like private equity was going to be able to buy assets and then it turns out the look was a false one, or a constrained one, or who knows given how mercurial that operation has become. We simply want the FDIC to stop banks from paying high CD rates that can't otherwise and to seize closed banks and give them to other banks.
That's my real hope of the PPIP. When the FDIC seizes a bank, it can throw the crummy stuff to the partnerships and give the good stuff to the good banks. We have many banks, particularly in Illinois and Georgia, where the oversight was pretty nonexistent. If I were FDIC head Sheila Bair, I would be plotting with the PPIP and with a Huntington (NASDAQ: HBAN) (Cramer's Take) or a SunTrust (NYSE: STI) (Cramer's Take) to do some bank absorption work.
Otherwise, who needs it? Certainly not Bank of America (NYSE: BAC) (Cramer's Take) or Wells Fargo (NYSE: WFC) (Cramer's Take) or JPMorgan (NYSE: JPM) (Cramer's Take), the normally natural candidates, because they've written down their bad acquired assets already.
Now the mission of the president is to put Treasury Secretary Tim Geithner and Bair in a room and have a genuine claymation death match where two come in, one goes out.
Then the PPIP might work!
Random musings: The Goldman Sachs (NYSE: GS) (Cramer's Take) upgrade this morning by BAC matters, as all the other financials have been taking their cue from this stock...
Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Goldman Sachs, Bank of America, JPMorgan and Wells Fargo.
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Reader Comments (Page 1 of 1)
7-09-2009 @ 10:34AM
MICHAELKRIGSTEIN said...
STOP BANKS FROM PAYING HIGH CD RATES?
HOW ABOUT JUST FAIR RATES?
THE RATES NOW ARE CRIMINALLY LOW.
THIS HAS BECOME THE UNITED STATES OF CHINA.
THE SENIORS ARE PAYING FOR THIS MESS NOW, AND OUR KIDS AND GRAND KIDS WILL PAY FOR IT LATER.
KRAMER IS ONLY INTERESTED IN HYPING THE MARKETS.
YOU ARE BETTER OFF GOING TO ATLANTIC CITY.
AT LEAST THERE WHEN YOU LOSE YOUR MONEY, YOU WILL HAVE A GOOD MEAL AND MAYBE SEE A SHOW.
7-09-2009 @ 3:11PM
Gary Kozy said...
Bubbles are not new to the this century. They have been a tool of the very wealthy for centuries.
The tool of those that have unlimited resources. Those that throw caution to the wind.
This category of unscrupulous people care only about their own success. They have no concern for the wealth of nations.
And it is the Wealth of Nations that is the goal of the true Capitalist.
Let’s be clear. It is the ordinary person that pays for these thief’s injustice. It is the ordinary people that buy gasoline, that pays. It is the ordinary people that eat beef, that pays. We pay if we drink chocolate.
The price of commodities must be controlled by the supply and demand of the product itself.
Not the price of contracts.
Commodities must be shipped and stored before hey can be resold. It is the only way that supply and demand, a true tenet of capitalism, can again be the deciding factor for the price of commodities.
We can no longer allow a drunkard, sitting at a desk, determine the price of gasoline for the entire world.
7-09-2009 @ 8:12PM
Gary Koay said...
Rogue Trader Shocks Oil Market
Posted Jul 3, 09 7:20 AM CDT
Newser Summary) – On Tuesday, the price of oil spiked unexpectedly to its highest level in 2009—a barrel of crude jumped from $71 to $73.50 in just one hour, for no apparent reason. Yesterday the reason became clear: a rogue broker in London with PVM, the world's largest petroleum brokerage, had conducted unauthorized trades that cost the company $10 million, reports the Financial Times. Since then, the cost of oil has eased to $66.5 a barrel, down 10% from Tuesday's peak.
During that hour of trading on Tuesday, traders exchanged futures contracts for more than 16 million barrels of oil—32 times the average. The rogue trader allegedly accounted for at least half of that trading, while other brokers bought in to chase the rally. This is the second recent case of rogue trading in the petroleum market in recent weeks; in May, a Morgan Stanley broker was banned for buying and selling while drunk.
7-09-2009 @ 3:14PM
Gary Kozy said...
Rogue Trader Shocks Oil Market
Posted Jul 3, 09 7:20 AM CDT
Newser Summary) –
On Tuesday, the price of oil spiked unexpectedly to its highest level in 2009—a barrel of crude jumped from $71 to $73.50 in just one hour, for no apparent reason. Yesterday the reason became clear: a rogue broker in London with PVM, the world's largest petroleum brokerage, had conducted unauthorized trades that cost the company $10 million, reports the Financial Times. Since then, the cost of oil has eased to $66.5 a barrel, down 10% from Tuesday's peak.
During that hour of trading on Tuesday, traders exchanged futures contracts for more than 16 million barrels of oil—32 times the average. The rogue trader allegedly accounted for at least half of that trading, while other brokers bought in to chase the rally. This is the second recent case of rogue trading in the petroleum market in recent weeks; in May, a Morgan Stanley broker was banned for buying and selling while drunk.
7-09-2009 @ 3:45PM
Gary Kozy said...
A Pension plans purpose is to protect and serve it’s pensioners. They have a fiduciary duty to the pensioner. This can not be done if the pension plans are investing in the commodities market.
If the result of the pension plans investment in commodities, result in a horrendous increase in a commodity. Then the pensioner pays an unjustified price for a commodity.
How can that be in the best interest to it’s pensioners?
In fact any monetary gain to the fiances of the plan, is the result of suffering by the pensioner.
A 50 dollar a month increase in a pension. Twenty years from now. Can in no way cover a 2 dollar/gallon increase in the cost of gasoline today.
So my first step in the renewal of the commodities market. Is to stipulate that pension plans can not invest in the commodities market.