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« WATCH LIVE - Wall Street Protests - #OccupyWallStreet | Main | Brad Sherman Annihilates Mark Haines And Erin Burnett »
Wednesday
Oct052011

Bank Bailout News: CNBC's Erin Burnett, Banking Apologista, Leader of Idiots

Erin Burnett of CNBC doesn't get it. She was on Meet The Press yesterday and decided to demonstrate her ignorance to an even larger audience than normal.

Erin. Banks would not have been able to pay bonuses to any staff if not for the capital injections from taxpayers. Stop with your nonsense about seperate pools of capital. Every single one of the large banks is insolvent: 30:1 leverage on shit assets is indeed a bitch.  The taxpayer bailout via the Fed and Treasury is a morphine drip.

So Erin, your argument is specious and smacks of being too far up Jamie Dimon's ass.  Remove it, and study pooled capital before we decide to target you.

##

 

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Reader Comments (28)

Erin is for viewer pleasure not substance. She is best watched while the television is on MUTE, as with most of CNBC.
Feb 2, 2009 at 8:28 PM | Unregistered CommenterAin't Bullshittn'
Dude.... fractrional reserve banking means that ALL banks are, be definition, insolvent. If they can't meet the demand for their total deposits they are insolvent. That's what it means to be insolvent. It appears you don't get it either.
Feb 2, 2009 at 8:40 PM | Unregistered CommenterCletus
@cletus

your point is so basic it goes without mentioning. we are forced to accept the technical insolvency of all banking instituions as a normal course of business under fractional reserve lending.. it was a comment aimed at the mis-marking of the assets on the books and how if correctly(honestly) marked then insolvency would be the result based on the wiping out of Tier 1 capital. And this doesn't even get into the quality of existing tier 1 capital at many banks. Look below to see that Citi uses billions of DTAs Deferred Tax Allowances as Tier 1 capital. That's previous losses COUNTING as legit Tier 1 Capital. Are you kidding me? In this environment of $0 in expected 12 month future profits, it's also technically in violation of accounting standards. You must have a reasonable expectation of profits in the next 12 months in order to count these DTAs as capital.

It's all insane. I can't believe the regulators let them get away with it. Seriously read the following link. Read it closely. Citi is a steaming pile of shit and the governments want our kids to eat it.

http://dailybail.com/home/2009/1/14/citi-will-never-stop-asking-for-your-money-ever.html

Also see this piece from blodgett today on the pricing problem. it gets right to the heart.

http://clusterstock.alleyinsider.com/2009/2/geithners-secret-plan-to-screw-you-explained


"The same crap asset that the government will buy on your behalf has four different values:

The carrying value: $0.97. The dreamy hallucination that the bank that is stuck with the assets is telling its shareholders it is worth. The fact that there is almost no scenario that would lead to the crap asset actually being worth this much is why no one trusts banks anymore.
A third-party assessment of value: $0.87. S&P's sharp analysts, the ones who almost certainly rated this security AAA when it was first dumped on unsuspecting buyers, say it is worth more than 10% less than the bank says it is worth.

A conservative third-party assessment of value: $0.53. What S&P estimates the crap asset is worth if the economy doesn't immediately rebound, which is about half of what the bank says it is worth.
The market's objective assessment of value: $0.38. Unlike the bank and S&P, markets have no incentive to misrepresent the true value of an asset (or to look at it through rose-colored glasses). And the market says the asset is worth about a third of what the bank says it is worth.
So what price will the goverment's "Bad Bank" pay for that crap asset on your behalf? The details have yet to be announced, but the signs aren't encouraging.

Sheila Bair has already suggested that the government knows better than the market does what these assets are worth. Translation? We're going to overpay for the crap assets and secretly recapitalize the banks at taxpayer expense."

Feb 2, 2009 at 9:13 PM | Registered CommenterDailyBail
Too bad Mark Haynes wasn't there to open up a can of whoop ass on her!
Feb 2, 2009 at 11:36 PM | Unregistered CommenterSpeed Racer
She is right...
Feb 2, 2009 at 11:58 PM | Unregistered CommenterThe Dolphin
Did you see her on air repsonse to the Green article. Of all people, Cramer called the guy a bozo. From Cramer that's funny.
Feb 3, 2009 at 5:30 AM | Unregistered CommenterAssets from Nowhere
I told her what she is!!! A BITCH!!!
Feb 3, 2009 at 1:21 PM | Unregistered Commenteranonymous
she was a no-show at goldman sachs total non-achiever. lucked into cnbc gig and suddenly she's on met the press. give me a break. we deserve way better from mainstream media than they give. usual. next.
Feb 3, 2009 at 1:54 PM | Unregistered CommenterSilly_erin
She is very hot, people. you are losing sight of what matters. Since we all keep cnbs muted all day anyway, it's purely about the eye candy. don't lose focus on what's important.
Feb 3, 2009 at 1:56 PM | Unregistered Commenterher assets aren't toxic
Your post is observably and demonstrably incorrect. If what you say is so why does everyone appear gut shot or in a state of complete denial when the truth about fractional reserve banking comes to light? Further what reasonable prudent person would knowingly build upon such a foundation without an agenda? It is a simple mathematical folly. Credit is created with nothing other than a ledger entry. Commodity currency cannot be devalued in the same capacity as fiat currency and that simple fact should be reason enough not to engage in that type of banking. The current fiasco can't not happen given the type of banking system that exists. The govt needs to be put out of the counterfiting business. And that can't happen until people understand that and vote those responsible out of office. There is no such thing as a free market in the world today.
Feb 3, 2009 at 3:03 PM | Unregistered CommenterCletus
I'm a very rich guy. I'm also "desperate" for smart HOT women in Los Angeles. There are none that are HOT and SMART! I'm stuck with the "wrinkles" from Orange County! There are NO 20-30s gals that are as smart as Erin. I'll buy her a 911 for a 1 year "relationship"... so she can get rid of her Mazda!
Feb 3, 2009 at 8:38 PM | Unregistered Commenterrepo4sale
Hot? She's as flat as Maria Bitcharomo. On the plus side she's skinnier than Suey. Oink oink.
Feb 3, 2009 at 8:43 PM | Unregistered CommenterFuzz
I hate fartiroma, Erin, and the entire CNBS network. David Faber is the only guy that is smart. The others are just BS fools.
Feb 4, 2009 at 11:01 AM | Unregistered CommenterNetMargin
I've been a fan of Chris Whalen for awhile now ( Institutional Risk Analytics website is a must read) but his championing of Sheila Bair leaves me confused. Yes Bair opposed the Paulson/Geithner bank bailout but her opposition seems more of what kind of bailout and a turf war than a philosophical opposition to using taxpayer money to fund private debts. In fact, Bair leads the charge to renegotiate mortgage debt to bailout homebuyers. It is a Hobson's choice... the deadbeat bank or the deadbeat homeowner.

My own preference is to offer the deadbeat homeowner similiar terms to what the banks were originally offered. A 5 year 'bridge loan' , if you will, and a refi. Using the Indymac terms as a reference it seems most homeowners who can be helped need about $425/month in debt relief to stay in their house at current mortage rates and at the original purchase price. This comes down to around a $25,000 loan for 5 or so
years or, put another way, a new car. Extrapolating this to the 2 million or so homeowners likely to default in the next year, offering a $25,000 bridge loan to each of them comes to about $50 billion. Double it if you go two years out. The advantage- you stop the flood of foreclosures and write downs of impaired loans devastating bank balance sheets. In effect, you buy time for the salvageable banks and homebuyers to repair their finances. The government also take a lien on the property for the balance and could apply any tax refunds due homebuyers to the loan.

As a stick to prevent many underwater homeowners from walking away from their purchase, the government might also offer an amnesty for any prior loan application fraud. Anyway sorry to have used your forum as a soap box but this, to me, seems the cheapest way to stabilize both the banks and the underlying residential real estate calamity.
Feb 4, 2009 at 5:25 PM | Unregistered CommenterScott
Daily Bail, Thanks for calling her out. I saw her on Meet The Press last week and I couldn't believe the level of arrogance that she displayed by stating that Taxpayer money wasn't being used for Wall Street Bonuses. And to make matters worse, Zandi, Forbes, and the host all seemed to agree with her – no one challenged her. Where the hell is the Taxpayer's representative on these shows.
Feb 7, 2009 at 9:43 AM | Unregistered CommenterThe Hawk
@Scott:

I agree, it is a Hobson's choice... the deadbeat bank or the deadbeat homeowner. I would choose the deadbeat homeowner over the deadbeat bank any day of the week. Banking staff have a fiduciary duty qualitatively different than a debtor and the resources to identify and prosecute fraud. This is not to excuse the fraud on the part of the many speculators. I just think Bankers have the greater responsibility and have caused the greater harm.

While I think anyone willing to engage in fraud or live excessively beyond their means to repay debt obligations deserves the full consequences for their actions as a means of correcting that bad behavior, I am willing to concede and support your solution if for no other reason than utility. These bad actors should still be marked with a "Scarlett Letter" of some sort to warn future employers/creditors of the risks of a business relationship with them.

Your solution of bridge loans, government liens, tax refund garnishment, and "limited" amnesty for prior loan application fraud is one of the more sensible approaches I have heard put forward. I say "limited" amnesty, b/c I think the degree and circumstances of the fraud should be taken into account. Someone who took out $5 million for multiple rental condos in Florida vs. someone who took out $500K for a single owner-occupied cracker box in San Diego are different situations entirely.

However, even with bridge loans, I think home-debtors will still walk away simply b/c they overpaid by up to 50% on an "investment" that is unlikely to recover and may continue to depreciate for years. It has nothing to do with affordability. If you took out a loan on a Cessna Citation as an "investment" (used aircraft, unlike automobiles, generally appreciate) for $5 million and you suddenly realized you could only resell it for $2 million this week, and potentially less years into the future, would you keep making payments? What if the bank offered to lower the interest or extend the loan term to 100 years? That would not make any business sense unless you were able to monetize use of the Citation to subsidize your losses and sell it when you are were longer upside down. It is a purely ethical consideration to honor your word - you have promised to repay the loan without regard to depreciation of the asset (unless you had some very savvy lawyers, but I doubt any bank would ever agree to those terms). Such a scenario is compounded when (1) dept payments on a single asset are a significant portion of your total liabilities and (2) circumstance make those dept payments increasingly difficult to make.

Apologies for being off topic.
Feb 10, 2009 at 5:04 PM | Unregistered Commenterspideydouble
@The Hawk

They didn't call her out, but I think their silence was DEAFENING! I have a feeling they were thinking "What the F$%@ are you talking about?"
Feb 25, 2009 at 8:25 PM | Unregistered CommenterHereHere
is she dumb or just intellectually dishonest? I can't tell. I'm leaning towards dumb.
Mar 10, 2009 at 9:39 PM | Unregistered Commenterbob

Look, the banks aren't insolvent until we say they are. The economy will recover, and will recover much faster than any of you are willing to admit. People can't take the boredom of not buying and spending, it's too tedious. I am old enough to remember a number of these, and this isn't the worst by a long shot. The assets will recover because the economy will recover. And the banks (at least most of them will survive.)

Capitalism is still alive and healthy. Read Moynihan's book. We've been "managing" this capitalistic economy for 50 years. This is all part of the game. It would have been nice not to have to drop $700b, but then, what exactly was the alternative?

As for the taxpayer, please tell me how the taxpayer is paying for any of this? Did you get an assessment tax last fall? The treasury prints what they want. You didn't pay for any of it and you never will. Tax rates in this country are still low comparatively, and should be lower. But taxes have absolutely nothing to do with this. Our government spends what it wants. Nothing ever balances nor does it need to balance.

And Sherman is dead wrong. The last fucking thing we need is more government intervention.

It cracks me up to heat the vitriol of those who "Know" everything. How are those job interviews coming along?
May 30, 2009 at 11:40 PM | Unregistered CommenterOberron4life
Now when we look back seems everything is going to be OK.
Jun 22, 2009 at 5:50 AM | Unregistered CommenterStock Traders Blog
@stocktradersblog

Not sure if you are smoking green shoots or what?

I guess you don't pay attention to Roubini or David Rosenberg or Meredith Whitney or Soros or Stiglitz or even Krugman. We are now Japan. Get used to the idea of this malaise lasting for a decade. We have guaranteed a slow burn.

Read what the Citigroup real estae prez said just today:

http://www.reuters.com/article/newsOne/idUSTRE55L1VP20090622?sp=true

This is a big story.
Jun 23, 2009 at 1:15 AM | Registered CommenterDailyBail
@Oberron

"As for the taxpayer, please tell me how the taxpayer is paying for any of this? Did you get an assessment tax last fall? The treasury prints what they want. You didn't pay for any of it and you never will."

Is this a joke. So much debt being floated that the dollar and treasuries will tank. Eventually. We are on an unsustainable path.

And by the way total committments are $13.9 trillion. $700 billion was just TARP.
Jun 23, 2009 at 1:17 AM | Registered CommenterDailyBail
Erin is stupid by choice, and that is something you can't fix. I think she was the head nurse at NYU, before becoming a teleprompter reader.
Oct 5, 2011 at 4:56 PM | Unregistered CommenterInurface
With all the economic bullshit CNBC had to sell, it was important, it was mandatory, that Mark Haines HAD to go. He wouldn't retire, so he HAD to go. He was a voice of reason, a voice of common sense and when he saw bullshit, he called it bullshit. Mark Haines HAD to go. I wonder how Erin feels kissing the feet of the same bastards who killed her mentor. Erin would have never survived in that job if Mark hadn't taken her under his protective wing.

99% RULES!!
Oct 6, 2011 at 9:24 AM | Unregistered CommenterMiguel Grande
Miguel...I like your comments but a couple thoughts on Mark Haines.

He supported wall street.

He supported the bailouts.

He supported the bonuses.

He was overweight and had a very bad heart.

He died of natural causes.
Oct 7, 2011 at 1:24 AM | Registered CommenterDailyBail
Burnett is engaged to Citigroup Executive David Rubulotta. Burnett began her career as a financial analyst for Goldman Sachs. She is the youngest daughter of corporate attorney K. King Burnett.

What else would you expect.
Oct 7, 2011 at 3:43 PM | Unregistered Commenterbosunj
WELL ITS EITHER BRING ON THE NUBILE S CNN FEMALES THAT LOOK HOT WITH NO BRAIN OR BRING ON THE IDIOTS..BUT OF COURSE THE IDIOTS RULE..LOOK WHATS HAPPENING TO THE UNTIED SNAKES..RUN BY MORONS INTO THE GROUND...BUT THERE ARE MANY MEN LIKE ME WHO WILL COME BACK AND HAVE A NICE REVENGE..WATCH YOUR ASSES RICH FOLK..COURSE THE GUILLOTINE IS COMING TO YOUR TOWN ,YOUR OFFICE..YOUR STUPID PLASTIC THING YOU CALL HOME..HONEY IM HOME...THE DICK VAN DYKES ARE NOW FEMALES..CAN YA BELIEVE IT PILGRIMS?
Oct 7, 2011 at 3:55 PM | Unregistered Commenterdr mengle,got twins?
Guilloines are too bulky and awkward. When they see the guillotine wheeled up in front of Goldman Sachs, they'll call in a Delta Force strike team, and heavily armed swat guys will be rappellng out of black helicoptors in no time.

You can get a cable zip tie at the hard ware store, there's about 20 to a package, easily hidden on your person. There are no laws against carrying concealed zip ties. They can not be detected by scanning devices. If you see an Erin Burnett, Jamie Dimon, Ben Bernanke or Cramer, walking down the street, walk up behind them, slip a zip tie over there head and pull tight. They will be eliminated in minutes and while their face turns purple and they flop around on the ground like a chicken, you can slip unnoticed into the gathering crowd like a ninja. Nineteen more cable ties to go.

Disclaimer: I may have invested heavily in the cable zip tie industry. This process of elimination is simply a fantasy of mine and I don't really endorse it. I have no connections to Occupy Wall St or any other group.

99% RULES!!
Oct 8, 2011 at 10:16 AM | Unregistered CommenterMiguel Grande

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