Financial Crisis

[flying]

that is not correct Flying. correct is that there is a move for legislation that might allow the FDIC to temporarily borrow up to 500bb. nothing more nothing less to add except that these news are five months old and that it might be a necessity in order that the FDIC can fulfill its obligations. whether they need more or not is anybody's guess.

Actually I posted that knowing it was an old article on the asking for the 500

Thought I heard it was passed yesterday

I will take a look & see though just out of curiosity. You could be right as the chart on the article from July 31st shows they had only 13b left.

In any case like I said should not be a problem as we roll our own eh?

EDIT: PS: Ah your right Kuhn Naam Kor Tort Krup

http://www.lewrockwell.com/north/north739.html

I see they are down to 12B

Well lets see how long it lasts

Edited August 4, 2009 by flying

[AlexLah]

Not so quickly Naam!

I have been able to get myself a job again recently but it is for one of those big American corporations so if the Dollar would collapse, I am almost sure it will affect me in some way. Already due to this circus called financial crisis my pension that I had build up in the HC is frozen for 5 and maybe 10 years, thanks to our wonderful government.

Yes you mentioned we are all in different boats but are we heading in the same direction?

Like:

Maybe some of us are, as on the way there I passed Jcon.........

Keep going Jcon, you are doing mighty fine!

[flying]

http://www.schwab.com/public/schwab/resear...rance_fund.html

I see what I read was this....They recently May 6 2009 got the increase to 100B

Also a suedo? credit line of up to 500B with the approval of the other pockets

How could the FDIC get government support?

Since the 1980s, the FDIC has had access to a $30 billion credit line from the U.S. Treasury, and Congress approved an increase to $100 billion permanently on May 6, 2009, and, with approval of the Fed and Treasury, as much as $500 billion through 2010.

We continue to believe that bank depositors, including those holding CDs from insured banks, should feel secure. Ultimately, FDIC insurance enjoys explicit federal support—guided, currently, by the $100 billion line of credit, up to $500 billion, temporarily.

You know it is just too easy to get confused by crazy numbers these days.

The 500 Billion I heard on TV was another 500 Billion they are asking Bernanke about not the FDIC 500B

http://www.rightsidenews.com/200908035798/...untability.html

Remember when 500 billion was a lot of money?

Edited August 4, 2009 by flying

[Abrak]

i am trying Alex but no success until now. by the way, the stuff i trade does not require milliseconds. instead it takes hours of hard work reading through freaking 284 (or so) pages of bond descriptions in which each sentence was composed by the concerted action of a dozen lawyers. then it takes another couple of hours, a glass (or two) of good wine, a dozen puffs on a Habana, asking the dogs "waddaya think you little bastards?" and last not least catching the Mrs when she is neither shopping nor dwelling in her bathroom and ask her "use your female intuition, shoot from the hip and tell me whether i should buy or not."

p.s. if the Mrs does not answer with a clear "yes" or "no" and tries to make unnecessary small talk by asking "which one?" i tell her "you talk too much! stick to the facts!"

I know you have a strong bias for bonds but I hope you realize that is because you know and understand the asset class better than it is inherently a class of asset that brings investors better returns.

If bonds were inherently better than say equities then nobody would invest in equities. Obviously bonds have done better than equities in recent years. But in the late 1990s people were writing books about how equities had always outperformed bonds on 5,10,20, 50 year view. All it proved to show were that equities were over priced. On a risk adjusted basis it is probable that bonds and equities make same return. (I would argue that bond returns might be lower than expected because they compete with banks that get bailed out with losses and take the gain.)

[flying]

Ok enough Doom & Gloom

http://news.yahoo.com/s/ap/us_plummeting_taxes

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression............

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

What was Jingaling saying in that other post praising those two guys?

Edited August 4, 2009 by flying

[Jake1]

Ok enough Doom & Gloom

http://news.yahoo.com/s/ap/us_plummeting_taxes

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression............

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

What was Jingaling saying in that other post praising those two guys?

Everything is under control

Treasury Secretary Timothy Geithner launched an "expletive-laced" tirade against top U.S. financial regulators in a meeting on Friday,

Mr. Geithner told the regulators Friday that "enough is enough," said one person familiar with the meeting. Mr. Geithner said regulators had been given a chance to air their concerns, but that it was time to stop, this person said.

Among those gathered in the Treasury conference room were Federal Reserve Chairman

Ben Bernanke

, Securities and Exchange Commission Chairman

Mary Schapiro

and Federal Deposit Insurance Corp. Chairman

Sheila Bair

.

Other attendees were: Fed Governor

Daniel Tarullo

, Comptroller of the Currency

John Dugan

, Commodity Futures Trading Commission Chairman

Gary Gensler

and Office of Thrift Supervision Acting Director

John Bowman

.

Friday's roughly hourlong meeting was described as unusual, not only because of Mr. Geithner's repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.

[Abrak]

You know it is just too easy to get confused by crazy numbers these days.

The 500 Billion I heard on TV was another 500 Billion they are asking Bernanke about not the FDIC 500B

http://www.rightsidenews.com/200908035798/...untability.html

Remember when 500 billion was a lot of money?

I totally agree with this. Everyone is going to get away with everything simply by making big numbers seem small. If you go back and look at the Fed minutes 5 years ago, you can see that half a meeting was devoted to a US$25bn expenditure. It is a big number in any case, equivalent to 5% of GDP or US$3,000 per working person.

By the way note that selling US$500bn as the new US$25bn was even easier than selling Iraq on WMDs and then getting reelected. So I have a new conspiracy theory it amounts to this. The Fed projects 3% growth next year and 4% then thereafter. From what I can see on this board people dont believe it (or it will be achieved by a few extra zeros). We all might be stupid or the Fed might be stupid. I rather assume neither is the case.

As several people have pointed out the current recovery is happening without fully addressing the fundamentals. Assuming we are right about the fundamentals and that the Fed can see them also what is going on. The Fed could go on propping up the markets but you cant do that forever (especially with medicare looming). Selling the concept that less growth is good (sufficency economics if you will) just seems far easier than creating growth out of not much at all. Obama seems the right guy.

[Naam]

i am trying Alex but no success until now. by the way, the stuff i trade does not require milliseconds. instead it takes hours of hard work reading through freaking 284 (or so) pages of bond descriptions in which each sentence was composed by the concerted action of a dozen lawyers. then it takes another couple of hours, a glass (or two) of good wine, a dozen puffs on a Habana, asking the dogs "waddaya think you little bastards?" and last not least catching the Mrs when she is neither shopping nor dwelling in her bathroom and ask her "use your female intuition, shoot from the hip and tell me whether i should buy or not."

p.s. if the Mrs does not answer with a clear "yes" or "no" and tries to make unnecessary small talk by asking "which one?" i tell her "you talk too much! stick to the facts!"

I know you have a strong bias for bonds but I hope you realize that is because you know and understand the asset class better than it is inherently a class of asset that brings investors better returns.

If bonds were inherently better than say equities then nobody would invest in equities. Obviously bonds have done better than equities in recent years. But in the late 1990s people were writing books about how equities had always outperformed bonds on 5,10,20, 50 year view. All it proved to show were that equities were over priced. On a risk adjusted basis it is probable that bonds and equities make same return. (I would argue that bond returns might be lower than expected because they compete with banks that get bailed out with losses and take the gain.)

Abrak, you are right that i concentrate on things i understand and judge based on many years of experience. generalising remarks and books written "x is better than y" or "a outperformed b over a period of d years" make me either smile or shake my head in disbelief that this kind of ignorance and lack of differentiation exists. there are "bonds" and there are "bonds". both have only their name in common. i can list two dozen bonds of A and better rated debtors (you know which ones i am talking about) which doubled and tripled in value in the last 6 months and i can point to Bunds, Gilts or UST which lost value during the same period. and the same applies of course to other asset classes too. any comparison in this respect without going into details is as worthless as a lukewarm fart when a hurricane blows.

i like bonds because they provide me with 100% calculable facts as long as the debtor remains liquid. buying equities is my my [not so] humble view investing in 20% facts and 80% expectation and not too far away from putting some money on red or black in Vegas or Macau. but hey... chacun à son goût!

[midas]

i like bonds because they provide me with 100% calculable facts as long as the debtor remains liquid. buying equities is my my [not so] humble view investing in 20% facts ( and these days very " twisted "facts ) and 80% expectation ( and at the mercy of Goldman sachs type super computers) and not too far away from putting some money on red or black in Vegas or Macau. but hey... chacun à son goût!

Edited August 4, 2009 by midas

[Abrak]

i like bonds because they provide me with 100% calculable facts as long as the debtor remains liquid. buying equities is my my [not so] humble view investing in 20% facts and 80% expectation and not too far away from putting some money on red or black in Vegas or Macau. but hey... chacun à son goût!

Basically I agree with you. Stockmarkets go up because of P rather than E.

And that is the point, if you understand the facts then you have a fair feel of where the underlying equilibrium is. Obviously expectations may take it well beyond this point both up and down. That is an opportunity to make money.

I have one stock that has gone up 10x since March (but I didnt buy it the bottom). To the extent that you rely on facts rather than 'expectations' it really is a good basis to make money. You dont read 284 prospectuses for nothing.

Your concept that bond investors are less rational than equity investors (in other words you see it as chance, unlike bonds where you see it as hard work) seems a fairly heroic assumption. The facts are facts expectations can get wildly out of line with reality. (A bit like US property which was clearly over valued on fundamentals but went up on expectations.) In the long run prices move in line with facts, the concept that prices are largely driven by expectations is a good reason to read that 284 analysis in the first place.

[midas]

EDIT: PS: Ah your right Kuhn Naam Kor Tort Krup

http://www.lewrockwell.com/north/north739.html

So realistically in your opinion, how long can they keep a lid on this situation ?

And what are the chances of them sending HR 1207 for a vote soon ( after they return

from their vacation ) ?

[12DrinkMore]

Kor Tort Kup Kuhn Naam

If your bored or have extra time take a look at this.

http://www.cash.ch/video/start.php?firstProjectID=11716

I would like to know just out of curiosity.....

Does Mr. Faber speak more directly in Swiss German

compared to his English interviews? Is he more bearish towards the US future when doing interviews back home?

Just curious & understand if you do not have the time.

Well, here is a rough summary of what he said

Commodities will not be attractive for six months

Company Bonds/property (ref to CH market) also not attractive at the moment

The last ten years nothing happened in the Ch stock market so the next ten is likely to be better....

The next crisis is on the way but may be 5 or 10 years away.

Last year 80% lost money and were too timid to buy into the stock market in the latest rally, he expected a bigger correction in July.

The overall economic situation is not good, but also not that bad, a few examples from CH-Land such as high class restaurants still busy and flights full.

He sees Singapore as a good place to invest as it has a strong economy, low deficit, good government and internationally competitive.

Asia is a place where the whole level of wealth can be raised, whereas in Farangland people get rich at the expense of others.

He names a few CH companies to invest in, suggesting that people should invest in quality (Novartis, Nestle and a few others) where the price has not risen a lot over the last few months.

The SMI lost money and by following the (CH) banks' recommendations you would have lost 40% lost over the last decade

Gold will maybe come down a bit.

If the SNB sells gold then you should buy gold, and if it sells shares then buy shares.

A short discussion on commodities and oil price maybe 45 USD but long term up when the economy improves.

And now the bit you wanted to hear

Worldwide people don't like the arrogance of the US and for example didn't like the bailout of AIG to save GS

UBS should forget the US and write it off.

The world should stop doing business with the US.

But no masses of doom and gloom.

Hope that helps.

[flying]

Well, here is a rough summary of what he said

Hope that helps.

Hey 12DrinkMore thanks so much!

Very nice of you to go through all that trouble.

Appreciate it!

Good & Interesting read

Thanks again!

[flying]

EDIT: PS: Ah your right Kuhn Naam Kor Tort Krup

http://www.lewrockwell.com/north/north739.html

So realistically in your opinion, how long can they keep a lid on this situation ?

And what are the chances of them sending HR 1207 for a vote soon ( after they return

from their vacation ) ?

I think actually like most fiat related problems for the US anyway........

Seems to be a non-event. Most sheeple really still believe it is no problem & they can just print more.

That aside the FDIC does have that 100B & the access to 500B more it seems. So I'm sure they will prop it pretty well. But if folks get nervous it could result in a bank holiday. Where the just close it down to regroup. Even if a big enough bank fails this could be enough to spook the herd. Where as like I said most folks assume the govt can just print....It is another matter altogether when *their* money is suddenly unavailable or they feel it is threatened. All they need do is look at the size of deposits versus the power of the FDIC & they will see even with the extra they could be in big trouble if even one of the too big too fail ....fell. Which is probably why they always say Too Big Too Fail

As for HR1207 it is gaining a lot of support & as you can see....Mr Bernanke who should be very very busy with things...Is basically taking time to campaign against it. Like this clip shows.

Take that & add in the fact that Geithner went ballistic yesterday on regulators & I would say the tensions are running high.

Watching these things there should be no further question in anyone's mind that the FED is a private Corporation fighting to maintain their turf.

Edited August 4, 2009 by flying

[flying]

I totally agree with this. Everyone is going to get away with everything simply by making big numbers seem small. If you go back and look at the Fed minutes 5 years ago, you can see that half a meeting was devoted to a US$25bn expenditure. It is a big number in any case,

Agreed...It is almost surreal in size...

A BILLION SECONDS AGO IT WAS 1959.

A BILLION MINUTES AGO JESUS WAS ALIVE.

A BILLION HOURS AGO DINOSAURS WALKED THE EARTH.

Now consider 500 billion

[Jake1]

Did SBK read the global depression thread? I don't see why it was closed..err I guess no further comment is necessary

[Abrak]

Who actually funds the FDIC - the banks, the treasury, the Fed?

As I see it is rapidly going bust....

http://www.fdic.gov/about/strategic/report...ht/Chp3-01.html

Its net worth fell two thirds last year....(in my opinion by guaranteeing bonds rather than deposits.)

Is it likely to be in business by the end of 2009?

BTW while people want to audit the Fed's balance sheet, shouldnt they be more concerned by the US treasuries?

[PCA]

Did SBK read the global depression thread? I don't see why it was closed..err I guess no further comment is necessary

Well, she is a clueless chick, oops sorry a clueless mod-chick usually active in the phuket section but obviously the biz forum mod had to see the dentist.

Seriously go and moderate chit chat or threads about thai food sbk thats the category where you belong to

[vedantafx]

This Day 1930

Well, yesterday as today has not been updated. I have been following this little blog alot and it is a real gem. The guy gathers together an assortment of news pickings from the same date in 1930, ie, Monday was the 4th August...

It is worth remembering these quotes were from the period after the initial crash, and the relief rally in the DOW was underway, the 40% rally which took the DOW back up to 280, before it fell to 42 points by 1932.

"Weekend business reviews positive, report gains in retail distribution; also positive was W.P. Chrysler statement that auto business, general trade improving."

I have highlighted the part "disagrees with the consensus among economists"...Some may think the Depression has been averted , but this is very early days, the stock markets this time last year were still hovering around their 20 year highs...12 months seems like an awfully short period of time to clean out all the years of excessess where debt to GDP growth reached nearly 400%...I dare say it is. For me what remains to be seen is whether the lows have been put in in nominal terms but not real terms. However, what I am quite sure about is that the lows are not in.

"Dr. L. Edie, economist for Investment Research Corp. of Detroit, disagrees with consensus among economists, predicts only mild recovery in fall followed by renewed slump in winter and full recovery not until Spring 1931. Cautions against “wish thinking.” Predicts long-term uptrend in market although interrupted by “radical and sharp” fluctuations. Anticipates reduction in P/E's; stocks selling for 20 times earnings may be reduced to 16-17, “and possibly lower.”

and one more...

"Companies predicting decent-to-good yearly earnings: Columbia Pictures (+147%), Caterpillar (roughly steady), Clorox (-14%)."

Remember the stock market fell in 1929, 1930, 1931,1932...Now the markets have fallen in 2008...the markets in 1930 did go up in the first part before a hard fall in the fall...the markets have rallied so far this year...I m in no way saying this will happen as they have been printing money like crazy which will support asset prices...but the weight of the debt load, and credit destruction, trying to restart lending when consumers dont want to borrow is abit like pushing on a string. It takes two to tango so to speak, a lender and a borrower...so I would be doubtful that this is the bottom, and I think it is a good risk/reward to have some skin in the game to the short side. I have a trade(short) GBP/JPY which if right on will make a very return much better reward than my risk. All this optimism and consensus amongst the economists today leaves me very dubious of this rally. Best to be short and hedged for any upside movements...or not in the market at all. Also, best to be a contrarian of the MSM.

If this is the stockmarket bottom, then it would be the first market bottom in over 100 years where PE's and dividend yields are bottoming out at the final few years of a longterm bull...I ask myself,can it be expected that PE's and dividends with the economic back drop we are in really bottom out at levels that historically could be found in a bullmarket? Again, I m very very skeptical of this...The answer IMHO is no of course.

[vedantafx]

Just to add, the stockmarket fell in 2000,2001,2002, yet we have only fallen in 2008...Stockmarkets can still fall even when the official recession is reported to be over...I think the market is pricing in a V-shaped recovery which is just not going to happen as far as I can see. I side that a sharp correction will occur when the figures don't continue to improve. What that correction turns into remains to be seen.

I m keeping an eye on the VIX...Bearish divergence on weekly VIX

Throughout this crisis when the RSI on the VIX has been at these levels, the weeks after have brought about sharp falls in the market. I have drawn in the arrows. The green vertical lines are when a trend direction change in the VIX takes place, I have found these to be good market timing signals for shorting stocks...If you take each green line using my trend following method, ie, when the VIX moves above the green volatility line it has been a good place to short. This has not happened yet, but the RSI is in oversolf territory which equates to overbought on the stock market. This usually lags the actual decline, which occurs weeks later, however, going short when the VIX trend turns up, is a better way to time the falls, as the falls have come within days of the VIX moving to an uptrend. Caveat Emptor: Any longs in this market beware!

Note the green vertical line marked in March 2009, where the VIX trend turned down according to the indicator I use, which would signal a "buy", which was at the market lows...So far a very nice tool to add to the timing tool box.

Edited August 4, 2009 by vedantafx

[flying]

Who actually funds the FDIC - the banks, the treasury, the Fed?

All of the above as far as I can tell

Where does the FDIC get its money?

From assessments on insured banks, and interest on U.S. Government securities it holds.

Where did the FDIC get money to start operations?

The Treasury purchased $150 million of stock in the FDIC, and the Federal Reserve, on instructions of Congress bought $139 million of stock. This stock was repaid by the FDIC in 1947 at 2 percent interest.

How much do the insured banks pay the FDIC?

Insured banks pay annually a gross assessment of one-twelfth of 1 percent of their total deposits.

So as far as I can tell it is just another shell game.

Left pocket puts some in the right pocket etc.

Also interesting to note that in reality FDIC could cover 1-2% of a major bank run

Lastly the thing that gets me is every time a bank falls..(69 so far this year )

The FDIC loses a paying customer in a sense.

Yes the funds that were in the failed bank get transferred electronically to another bank I understand that. So yes the 1% will again get paid to the FDIC

BUT>>>>>>>>>>>> It was a failed bank yes? So surely FDIC paid something lik xx% + to cover that failed bank & surely that xx% was greater than 1%

In any case it is going downhill & contrary to other posts cheer leading it is not only going down hill it is accelerating.

Perhaps they cannot see that from the crowded seats of the Baht bus but here in the US it is rolling & I am sure some effects felt in Thailand according to other threads.

Consumer bankruptcies jumped 34% last month over the previous year & 8.7% over the previous month. Does that sound like its slowing?

http://money.cnn.com/2009/08/04/pf/consume...sion=2009080413

The unemployment rate currently stands at 9.5%, a 26-year high. And the job market doesn't look to be improving anytime soon. The government releases July jobs numbers on Friday, and unemployment is expected to rise to 9.6%, according to a consensus estimate of analysts polled by Briefing.com.

Wait till these unemployment benefits are exhausted............. see chart

I could go on but I think most with eyes can see that we are living in interesting times indeed

Edited August 4, 2009 by flying

[Naam]

i like bonds because they provide me with 100% calculable facts as long as the debtor remains liquid. buying equities is my my [not so] humble view investing in 20% facts and 80% expectation and not too far away from putting some money on red or black in Vegas or Macau. but hey... chacun à son goût!

Your concept that bond investors are less rational than equity investors (in other words you see it as chance, unlike bonds where you see it as hard work) seems a fairly heroic assumption.

there seems to be some misunderstanding. i claim that bond investors are much more rational than equity investors. "real" bond aficionados do not invest based on expectations for capital gains. they buy because they are planners, they need tangible facts to extrapolate and base their planning on (more or less accurate) facts such as "bond X pays interest Y on dates A and B each and every year till maturity" (unless there is a default). even the subordinates we discussed once allow this extrapolation including a worst case scenario, provided they are cumulative and have a mandatory fixed payment date for any deferred coupons.

having said so, i'd like to add that any capital gains are of course appreciated and not rejected by the bond aficionado

[flying]

...

Edited August 5, 2009 by flying

[Naam]

...

This post has been edited by flying: Today, 2009-08-05 09:14:09

i agree without any ifs or buts

[Abrak]

i like bonds because they provide me with 100% calculable facts as long as the debtor remains liquid. buying equities is my my [not so] humble view investing in 20% facts and 80% expectation and not too far away from putting some money on red or black in Vegas or Macau. but hey... chacun à son goût!

Your concept that bond investors are less rational than equity investors (in other words you see it as chance, unlike bonds where you see it as hard work) seems a fairly heroic assumption.

there seems to be some misunderstanding. i claim that bond investors are much more rational than equity investors. "real" bond aficionados do not invest based on expectations for capital gains. they buy because they are planners, they need tangible facts to extrapolate and base their planning on (more or less accurate) facts such as "bond X pays interest Y on dates A and B each and every year till maturity" (unless there is a default). even the subordinates we discussed once allow this extrapolation including a worst case scenario, provided they are cumulative and have a mandatory fixed payment date for any deferred coupons.

having said so, i'd like to add that any capital gains are of course appreciated and not rejected by the bond aficionado

You miss my point.

If you assume that you make money by trading the perceived difference between its actual price and its fundamental price (which is fairly easy to determine in a bond where the facts are pretty clear.) I admit there are plenty of people who trade on different concepts, momentum, the fact that the price has doubled therefore it will go up further etc..

The fundamental of an equity can be determined (by discounting cash flows). I agree that the fundamental value is less certain than a bond but that is half the point. If a bonds price is so relatively easy to determine, you have to assume more stupidity from someone to invest against it. With then equity and a bit of work - reading the annual report or meeting the management - you can actually find out the value to a reasonable degree of certainty (although probably not as close to a bond). I am merely stating that a bonds inherent value as it has a large degree actual value that can be determined with out thinking is less likely to make you money than an equity whose value takes inherently more work to determine.

[midas]

I think actually like most fiat related problems for the US anyway........

Seems to be a non-event. Most sheeple really still believe it is no problem & they can just print more.

That aside the FDIC does have that 100B & the access to 500B more it seems. So I'm sure they will prop it pretty well. But if folks get nervous it could result in a bank holiday. Where the just close it down to regroup. Even if a big enough bank fails this could be enough to spook the herd. Where as like I said most folks assume the govt can just print....It is another matter altogether when *their* money is suddenly unavailable or they feel it is threatened. All they need do is look at the size of deposits versus the power of the FDIC & they will see even with the extra they could be in big trouble if even one of the too big too fail ....fell. Which is probably why they always say Too Big Too Fail

But the part I don't understand relates to the " extend and pretend " philosophy in one of your earlier links.

How long can a financial system last where its key institutions seems to have so many very overvalued assets ?

Surely there has to be a day of reckoning when assets have to be sold- will this happen in our generation or will it be the next generation that suffers?

And I can't see how the US financial system can " absorb " these losses.

We saw in America only yesterday that incomes are still falling

Consumer spending up in US, unlikely to lead recovery as incomes fall, unemployment rises

http://blog.taragana.com/n/consumer-spendi...t-rises-131012/

And Mr. Patel in Delhi an MBA Financial Analyst with fluent English skills can only earn 80,000 - 100,000 rupees

per month ( about $ 2,000 per month ) - minuscule compared to American incomes - so how can US ever retrieve

lost ground again ? And the trend in sending jobs offshore is still there because the British Council

of all institutions transferred 12 key positions to India just last month.

So I cant see how economic forces in the U.S. can possibly absorb these overvalued assets ?

When I said for how long can they keep the lid on it I meant for how long can they

go on " extending and pretending " ?

Edited August 5, 2009 by midas

[trogers]

...in the Greatest Nation on Earth™.

You mean the nation with the greatest amounts of IOUs...

[flying]

When I said for how long can they keep the lid on it I meant for how long can they

go on " extending and pretending " ?

Yes consumerism was good work when we had it.

Was it really 70% of our GDP as they say? If so we are in deep sh!t because you saw the unemployment charts & the bankruptcies?

But your Q how long can USA extend & pretend? That is really for others to decide.

Extend & Pretend will continue as long as folks keep buying US debt/bonds I suppose. As long as China continues to trade their citizens wealth for our consumerism. I see their conundrum & wonder which way they will go.

Edited August 5, 2009 by flying

[midas]

Yes consumerism was good work when we had it.

Was it really 70% of our GDP as they say? If so we are in deep sh!t because you saw the unemployment charts & the bankruptcies?

I know many here do not like Peter Schiff at times & even I dont like all his videos.

But this new one is quite good. In it he describes USA as the caboose slowing the world market & how the rest of the train will figure it out & decouple at some point.

Yes thanks !

I would rather listen to Peter Schiff anytime above Bernanke or Geithner and those other BARE FACED LIARS .

The 70% of GDP figure still keeps appearing regularly - and I remember thinking a long time ago

this statistic seems crazy- you can't have the biggest economy in the world

just relying on consuming things -but it seems even more crazy today?

At the very least I expected to see from this financial crisis

an attempt of some sort to persuade Americans to be more financially

responsible like the Chinese?

But they are not-they are fighting to get back to their previous position as quickly as possible.

cash for clunkers indeed-the whole idea is preposterous to destroy a working car

and then the buyer is deeper in debt again

[flying]

The 70% of GDP figure still keeps appearing regularly - and I remember thinking a long time ago

this statistic seems crazy- you can't have the biggest economy in the world

just relying on consuming things -but it seems even more crazy today?

At the very least I expected to see from this financial crisis

an attempt of some sort to persuade Americans to be more financially

responsible like the Chinese?

But they are not-they are fighting to get back to their previous position as quickly as possible.

cash for clunkers indeed-the whole idea is preposterous to destroy a working car

and then the buyer is deeper in debt again

Yes pretty amazing

Also the cash for clunkers

You should see the financing they have offered too. Of course the majority do not have the money to buy a new car. But this way they got 4500 off the price & the NINJA Car loan this time.

But what is really funny & true American in some ways is a couple of dealers.....

One was offering a handgun with each car sold & another was offering a AK-47 for each truck sold.....LOL

Interesting times indeed

I messed up my other post & then dropped my connection so the you tube is gone.

If anyone want to see it just go directly...

http://www.youtube.com/user/PeterSchiffTV