“People will be fired everywhere.”

Bullish.

Oil back up to $95 a barrel based on the news!

I am sorry to say this. I really am. But I think the next dislocation has already started.

I am sorry to say this. I really am. But I have no idea of what you mean when you say "the next dislocation has already started."

He dislocated his arm?

Not a clue. Very out of character for a guy whose moniker includes "grammarian"....

Weird times. With reasonable regularity get invited to interview at hedge funds (established ones like Citadel) for their life sciences/healthcare divisions. Yet, have friends just waiting to be fired. Wonder when the ground will stop shaking.

Because there is little doubt that in healthcare, there is a ton of money to be made. The oldest baby boomers are first hit 65 this year.

Fifteen years ago the six largest banks controlled assets worth over 15% of GDP. As of last year they controlled between assets worth 60-65% of GDP. The situation became unsupportable and in light of a global deleveraging unavoidable. It's too bad the administration doesn't can't read the tea leaves and do to Bank America what it did to G.M. The country would be the better for it.

"It's too bad the administration doesn't can't read the tea leaves and do to Bank America what it did to G.M."

So you want Obama to bail out Bank of America just like they did with GM?

Restructure it.

General Motors went through a Chapter 11 reorganization, something the banks were shielded from. Stock holders were wiped out and debt holders were also affected. Did the banks face this?

No more bail outs for corporations. Nationalize Bank of America.

How would you re-structure BofA anyway? They are saddled with all the toxic Countrywide mortgages...

Stock holders get wiped out and bond holders recapitalize the banks. This is how capitalism works Socialist. The amount of debt is more than sufficient.

TARP happenened under Bush.

Who ever said Bush was perfect?

LOL. Okay, I deserved that.

I was talking to a financial guy the other day. He said his fear is that we are one surprise event away from another big dislocation in the markets -- like what happened after the Lehman bk.

So that's what I had in mind by the word "dislocation." My friend hypothesized that if some bank were to suddenly disclose that it was holding a whole bunch of Greek sovereign debt, for instance, and it then came out that the bank was to take a huge loss from that and could not recover, then a failure of that sort could set off a wave of fear in the markets that could lead to another credit freeze, and freefall on the equity side.

I guess the reason I said the "next dislocation has already begun" is that we're all sort of looking for it now -- people on this board, my financial friend, everybody. We all sort of recognize that we're really close to being in crisis mode ALL THE TIME NOW, because there are so many things that could wrong, with hugely disastrous effects.

Which is tantamount to an actual crisis -- or nearly so. It's hard to imagine a scenario in which NONE of the disasters we're all hypothesizing about actually happens. Isn't it? Isn't it just about impossible to imagine a safe landing for the economy, given where we are now? Europe is not going to be able to save itself, there is zero job growth in the US and nobody in the ruling classes is dealing directly with the worst bugaboos that haunt us -- climate change and peak oil.

How is possible for this to turn out well? It just isn't, I'm afraid. The best outcome would be if we start to admit that we need some big new ideas in order to come up with anything that remotely resembles a solution. Business as usual won't fix anything. The status quo is the problem.

"something the banks were shielded from."

Read the law, RS: there is NO PROVISION for the bankruptcy of banks (or state governments, for that matter). The reason is plain; it takes too long to go through a bankruptcy, and the failure of one bank can very easily lead to the failure of the whole banking system. Viz. Lehman, which wasn't even a bank.

All the law allows for is to take over a bank and slowly unwind its operations.

I agree with GG's new "dislocation" post. The fundamentals just aren't there to support $92 a barrel oil. Europe is going into a recession - no question about it - Greece is going to default one way or another - no question about it. Growth is not possible w/o jobs, and job growth doesn't even keep up with the population.

the degree to which the nyc economy, specifically manhattan's, depends on wall st. is unsustainable. the 80s were more diverse (textile, etc.) i'd like to see a return to that - a well-rounded city...

e76
what would make that happen?
when they scale back the Wall Street Factory, which has been scaling back for years in the employment department NYC won't die...it will just shrink. There will be less high paying starter jobs and that talent pool will just go elsewhere. The city resorces diminish, the value of housing decreases and the poor begin to filter back into the city....the never ending cycle of life.

Hakuna Matatta

"There will be less high paying starter jobs"

You mean kids fresh with their Wharton MBA's making more than brain surgeons?

Good riddance to them.

"I was talking to a financial guy the other day."

Herein lies your problem.

I talk to them all the time. They're clueless. Things are pretty much okay for them, awful for the late Middle Class.