Financial Crisis

[Abrak]

But surely a recovery depends on the willingness of the consumers to keep putting themselves into debt and buying more stuff?

So maybe the question to answer is, has the appetite to take on debt been reduced, or have the sheople learned a lesson and will start to increase savings?

This I believe is a seriously interesting question and key to any economic projections.

If you look at the CBO/Fed projections they inherently assume rising consumer debt (largely based on Greenspan's work.)

If you take a look at bearish growth projections they assume a deleveraging of the consumer from very high/debt to income ratios.

Essentially a rise in savings to 15% of GDP would result in no growth over the next 5 years.

If you look at what happened in the 1920-1940s and beyond the bearish scenario is correct. It is not how the Fed sees things though (rightly or wrongly). They see the lack of increase in leverage as the result of the financial crisis (rather than the cause which was down to bad rather than over lending.) They forecast consumer lending to grow over the next 5 years.

This is due to how (Greenspan in particular) believes that the consumer balance sheet has changed - it is not a debt to income issue.

Now both sides have a point. If you as a 25 year old buy a house, your debt will be quite high and instead of saving you will pay down that debt. On the other hand the idea that growth is going to return above levels that was created by people thinking that owning a home made them an instant millionaire and they could behave as such is even more ridiculous.

[flying]

So has the world's economy been saved by Brown/Darling/Obamah/Bernanke? As far as I can see, there has been so long term solution deployed. Just a huge amount of money created and shuffled around in an attempt to prop up the stock market and keep the banks solvent.

There now seem to be two main groups, those who believe that by the end of this year the stock market will be reaching new highs and the housing market once again resuming its flight to the moon, and those with the totally opposite view. But at least there is now an agreement.

By the end of this year unemployment will still be rising/high and something major will have happened in the markets

But surely a recovery depends on the willingness of the consumers to keep putting themselves into debt and buying more stuff?

So maybe the question to answer is, has the appetite to take on debt been reduced, or have the sheople learned a lesson and will start to increase savings?

I agree that all that has occurred is they have used multiple times the problem causing tactic in the hopes of it suddenly becoming the solution.

IMO Not only have the sheeple lost their appetite

( at least the ones that honorable try to pay off their debts)

but as you see they are losing the ability to buy the period. How can they, the powers that be agree that unemployment will still be rising/high & yet expect a return to spending? Where is the common sense in that?

Unemployed masses will not only not be increasing debt willingly but they will also be denied credit as so many continue to default leaving a big balance from trying to exist on credit without income.

Do you realize there are now web sites in America urging folks to walk away from credit cards & not even pay them off? The gist being screw the banks like they screwed you. While I think that is BS thinking it is amazing how many do not & are following through on it. Both credit cards unsecured debt & folks just flat out walking on mortgages before they are even really required to/ in dire straights.

Part of that is the governments mortgage help programs. It is stupid but they will not go in & help anyone rewrite their mortgages until the are in arrears. Their thinking is if someone is being honorable & making the payments they do not really need help yet

I have never been a big debt person & carry no credit card debt as I pay in full each month & have no finance charges. So maybe I am biased but put me in the group that thinks while we may see a continued rise in the markets we in no way can sustain it & will ultimately have to pay the piper .....now or later but it will need to be paid. Everything the government has done so far has only made that price higher & ultimately more painful. Unless like the credit card degenerates we walk on our debt.

In which case it will be a different flavor of pain.

Edited August 14, 2009 by flying

[flying]

How many banks will fail today?

My bet 3

Your guess is lite

FIVE Banks so far today

http://www.fdic.gov/bank/individual/failed/banklist.html

Record stands at 7 per day two times so far July 2nd & July 22nd

total count is 77 failed so far this year.

Edited August 15, 2009 by flying

[AlexLah]

But on average it is about 3 a day during the last 4 days on yesterday.......

Ahum, I think I go to swim for a while.

[churchill]

Federal Reserve SECRETLY Buying Treasuries At Auctions ??

http://www.gold-eagle.com/editorials_08/nielson081109.html

[flying]

But on average it is about 3 a day during the last 4 days on yesterday.......

Actually you need to look at the 2nd column from the right.

http://www.fdic.gov/bank/individual/failed/banklist.html

The bank closed dates list. The list you are looking at is the updated list or the last time they worked on the list.

The FDIC will always close banks on Fridays. Reason is they have the weekend to transfer accounts of depositors to a new bank for the open on Monday.

Also to note one of the banks that fell today was a big one.Biggest of the year. Colonial Bank big enough that the FDIC should need money next week.

http://www.google.com/hostednews/afp/artic...aKdFTDV5imzFgBQ

Edited August 15, 2009 by flying

[flying]

Federal Reserve SECRETLY Buying Treasuries At Auctions ??

http://www.gold-eagle.com/editorials_08/nielson081109.html

Many have said it is a poorly kept secret at best.

Also .....This seems more & more obvious

The United States is already bankrupt. Martenson's revelation simply brings the wide-spread recognition of this insolvency much, much closer.

[lannarebirth]

Federal Reserve SECRETLY Buying Treasuries At Auctions ??

http://www.gold-eagle.com/editorials_08/nielson081109.html

Many have said it is a poorly kept secret at best.

Also .....This seems more & more obvious

The United States is already bankrupt. Martenson's revelation simply brings the wide-spread recognition of this insolvency much, much closer.

I don't think it's a secret at all. Back in March Bernanke announced he intended to buy Treasuries. I don't know if he has or will, but I know he said it was his intention to do so.

[Abrak]

The US is in no way bankrupt - there is simply a massive inequality of income and wealth.

When you look at US problems they are very severe - employment needs to grow 15% over the next 5 years to restore NAIRU. I have suggested in the past that the banking crisis, recession and bad debt problem could be solved by a 13% transfer of wealth from the top 10% and give every household in the bottom 50% US 100,000 dollars.

I now this makes me sound like a commie in some peoples eyes. Others probably assume I am an embittered poverty stricken individual. Others see it as impractical or maybe even unneccessary. As I see it the scale of the problem is such that conventional responses will not work. The person who comments that the US is bankrupt hasnt looked at the underlying wealth. This crisis was definitely exacerbated by increased inequality.

Take a look at this graph...

The top 0.01% earn over 600 times the average. Their incomes have risen 6 fold relative to the average over the last 30 years. The median employee has seen his post tax income fall in real terms. He simply doesnt have the money to pay for this crisis and if he does pay for it he will spend less - which is counter productive.

Bankruptcies are 8 fold in 30 years. The only people who got richer were the rich, the middle classes simply got leveraged.

[Abrak]

Federal Reserve SECRETLY Buying Treasuries At Auctions ??

http://www.gold-eagle.com/editorials_08/nielson081109.html

Flying on March 25th the Fed announced it would buy US dollars 300billion of USTs so an announcement that it has bought US dollars 14 billion is no surprise.

It has by law to buy them indirectly because the Fed is not legally allowed to lend directly to the Treasury. Such purchases should not therefore be seen as 'secret buying'.

When it has completed its US dollar 300 billion purchases, the Fed will still own less USTs than 3 years ago.

[churchill]

Federal Reserve SECRETLY Buying Treasuries At Auctions ??

http://www.gold-eagle.com/editorials_08/nielson081109.html

Many have said it is a poorly kept secret at best.

Also .....This seems more & more obvious

The United States is already bankrupt. Martenson's revelation simply brings the wide-spread recognition of this insolvency much, much closer.

I don't think it's a secret at all. Back in March Bernanke announced he intended to buy Treasuries. I don't know if he has or will, but I know he said it was his intention to do so.

What is the point of issuing Treasuries and buying them back - Perhaps they are buying back 10,20 50,90 % ? Sounds a bit Madoff to me .

[midas]

The worst recession since the 1930s has created a reservoir of demand that will buoy the economy, say a growing number of economists led by James Glassman at JPMorgan Chase & Co., former Federal Reserve Governor Laurence Meyer and Stephen Stanley at RBS Securities Inc.

“Whenever we have plunged off a cliff and fallen into a deep hole in the past, for a while the economy has a tendency to bounce back very quickly,” said Glassman, a senior economist at JPMorgan in New York. Glassman and his colleagues this month said forecasts of 3 percent to 4 percent growth in coming quarters may be too low given “pent-up” consumer demand.

Which economic theory is this based on ? How strange ?

This isnt as silly as it sounds. A lot of recoveries are called V because the growth after the year of recession is fairly spectacular.

Take car sales for instance - they used to be running at 15.5m and then fell to 9m. Now there are 250m car drivers in the states, so maybe thats too many, maybe the right number is 210m. Then you give a normalized life of 15 years a car and you can see that car sales should be around thirteen million. Well below what they were before but there was 0 financing etc. Now a lot of people havent bought a car in the past couple of years either because a) they are worried about losing their job they dont want to show off in front of their newly employed neighbour or c) 0 percent financing was not on offer.

So when there are signs of recovery you dont just get a return of the normal buyers you also see those guys who have been waiting 2 years to buy a new car (even though in many cases they could afford to do it anyways.) So in the old consumer world sales were 15.5m and in the new one they are say 12.5m but pent up demand may well see them hit 15m again for a short term.

To be honest if this downturn was cyclical you would expect a recovery of 6% growth next year (still well below the output gap). You could find plenty of recessions to support that bounce (just a guess). It isnt of course a normal recession but I will guess that the strength of some of the numbers will surprise you. Simply put car sales going from 16m to 9m is unsustainable even (cars would have to last 27 years). Obviously the 16m figure was too high with NINJA loans. Say you adjust it to 12.5m, after a recession if it hits 15m it isnt a big surprise because the underlying rate has been running at 25% below natural demand and guys who were planning to upgrade three years ago are now doing it.

At the end of the day though a bounce is just a bounce. Its going to look good - actually really good because the recession has been so long. But real underlying demand is still 20% below where it was a few years ago and you cant get away from that. You can get excited as you like about the recovery but where are the real 'underlying' numbers. Car sales can jump 50% and you still need to liquidate 50% of US manufacturing production.

You get to a stage where 'green shoots' are inevitable but lets not turn them into oak trees.

Abrak -it's not just silly it's hilarious.

Even some of the leading economists in the world are unable to agree on anything so at the end of the day- it just shows how little anyone really knows for sure.

But when you say " A lot of recoveries are called V " how many times in history has the biggest economy in the world relied on so much just on consumption( 70 percent ) for its GDP and then to have those consumers ( and even State Governments ) so heavily in debt? One million home owners every 12 weeks facing foreclosure ?

I mean how much can you realistically expect to squeeze from these consumers and after that what is left ?

I have a very vivid imagination but the reason I cannot in a million years see how the likes of James Glassman can possibly be correct

regarding his " reservoir of demand " can be summed up as ( 1 ) The high chances of his reservoir of demand being slugged with higher taxes

and ( 2 )fear of losing ones job in the near future.

If Obama pushes through this health-care plan small-business owners will be facing an additional 8% tax and if you consider

small-business owners are the engine of growth regarding new employment -how many small-business owners will have the

economic means or even the entrepreneurial drive to take on the risk by hiring in an ever-increasing socialist USA ?

'green shoots' are the marijuana plants that the people who still believe a real recovery is happening must be smoking .

[trogers]

As long as there is high unemployment among financial professionals, there will be no recovery.

[Naam]

How many banks will fail today?

My bet 3

Your guess is lite

FIVE Banks so far today

http://www.fdic.gov/bank/individual/failed/banklist.html

Record stands at 7 per day two times so far July 2nd & July 22nd

total count is 77 failed so far this year.

are you aware that most of the time you are not referring to banks but mosquitoshitsize archaic financial institutions which wanted to go for a piss with the big dogs but couldn't lift a leg?

[Abrak]

Abrak -it's not just silly it's hilarious.

I didnt mean to imply this recovery will be 'V', it just doesnt come as a surprise to me that some economists are forecasting it. V shaped recoveries after financial crises are very rare.

[Naam]

Maybe the two of you like trains?

Alex, besides me reading Abrak's interesting postings both of us had some public and also a private exchange of views. as far as investing is concerned our views are diametrical, if not light years, apart. but then there are many different ways which lead to success.

So you don't like trains?

I am not very fond of public transport in general.

Personally Naam I am not convinced that our views are 'light years' apart. I suspect we both feel that you generate seriously good returns on assets that you fully understand. On that basis we would never hold the same one. However I do invest sometimes in various rubbish that I dont know anything about - gold, US dollar, GBP - so it is possible we might bump into the same holding by accident.

Abrak, with every passing day my suspicion grows that i do not fully understand the assets which yielded the best results ever in my investment career. reading a hundred or more pages of bond descriptions in "olden" times was a hassle but after that one could draw clear conclusions and pinpoint a risk/reward ratio. the subordinate bonds we have been discussing and to which i am referring do not offer that advantage because of too much legal fine print containing too many "ifs". but then... it's always the bottom line that counts, the clink... clink... clink... in the cash drawer and not the "the end is nigh" doomy-gloomy youtube clips.

[12DrinkMore]

I have suggested in the past that the banking crisis, recession and bad debt problem could be solved by a 13% transfer of wealth from the top 10% and give every household in the bottom 50% US 100,000 dollars.

It would be interesting to see how that played out.

Assuming there are around 100,000,000 households in the States, then the bottom 50% amounts to 50,000,000 households.

Give each of them 100,000 Greenies and that makes all together a whopping 5,000,000,000,000, or five Trillion of 'em.

This "wealth" does not physically exist in the form of Greenies, and possibly never could, but is in the stock/bond or property markets. So if the government decided that this was a great policy, then there would surely be a massive crash in the stock markets as all this money was sucked out, taking down even more of the rich guys' assets. Although, GS & Co would "earn" even more massive bonuses by shorting the markets. Then, after a governmental hiatus, the money would slowly filter to the poorer householders and presumably be used to pay off a chunk of debt and buy some stuff, boosting Chinese exports.

But, apart from the impossibility of ever getting this policy on the table, the banks will be the biggest opponents. The banks DO NOT want the sheeple to pay off the debt. Debt is their product, it is what they sell. And what a great product it is too, costs nothing to produce and can be issued in virtually limitless quantities. And the banks don't even want it to be repaid, just as long as the sheeple keep working to pay the interest their entire lives on this incredible little earner.

I wonder if the sheeple will ever realise that they are really working their <deleted> off for the banks and not themselves? Possibly quite a few, but how many know that the debt they are slaving away for actually cost the bank NOTHING?

[midas]

How many banks will fail today?

My bet 3

Your guess is lite

FIVE Banks so far today

http://www.fdic.gov/bank/individual/failed/banklist.html

Record stands at 7 per day two times so far July 2nd & July 22nd

total count is 77 failed so far this year.

are you aware that most of the time you are not referring to banks but mosquitoshitsize archaic financial institutions which wanted to go for a piss with the big dogs but couldn't lift a leg?

But the " big dogs " wouldn't be lifting any legs right now either if they had not been helped by the US TAXPAYER

[12DrinkMore]

What is the point of issuing Treasuries and buying them back - Perhaps they are buying back 10,20 50,90 % ? Sounds a bit Madoff to me .

Madoff maybe, but it is the Government who issue the treasuries, Geithner is the main man here, so that the government has some greenbacks to pay the bills. The treasuries are sold on the open market. And oh joy! in steps the FED, Bernanke by name, who issues crispy new Greenbacks or rather changes a few bits on a computer disk to buy the treasuries.

This has an historical basis, but governments are not allowed to directly issue cash. So they introduce this crazy two step method to pay their bills.

The UK has the same <deleted> brained scheme. That <deleted> Darling issues the bonds to pay for Brown's excesses and good ol' Merv prints of a few more quids to buy them.

So the central banks end up with the government bonds.

It is called "Monetizing the debt".

http://en.wikipedia.org/wiki/Monetization

Or, basically, debasing the currency because the profligate governments cannot keep to a budget and rather than try to sell even more into the markets, which may not be successful at the current rate of profligacy, they are ensuring the successful issue of bonds. Presumably it also has the benefit that the interest payable on the bonds is paid to the central bank and loops around back to the government.

This whole "central bank" and government treasury departments is a complicated can of worms, subject to various conspiracy theories, but I think the main idea nowadays is to prevent the governments from simply printing oodles of cash to fund themselves. But the original setup I think was to allow the Rothschilds and that lot to make even more money because they were given the sole right to issue currency. However the BoE is owned by the government and the FED alleges that its profits are paid back to the government. But, as I said, there are a number of differing ideas on this....

[Abrak]

I have suggested in the past that the banking crisis, recession and bad debt problem could be solved by a 13% transfer of wealth from the top 10% and give every household in the bottom 50% US 100,000 dollars.

It would be interesting to see how that played out.

Assuming there are around 100,000,000 households in the States, then the bottom 50% amounts to 50,000,000 households.

Give each of them 100,000 Greenies and that makes all together a whopping 5,000,000,000,000, or five Trillion of 'em.

This "wealth" does not physically exist in the form of Greenies, and possibly never could, but is in the stock/bond or property markets. So if the government decided that this was a great policy, then there would surely be a massive crash in the stock markets as all this money was sucked out, taking down even more of the rich guys' assets. Although, GS & Co would "earn" even more massive bonuses by shorting the markets. Then, after a governmental hiatus, the money would slowly filter to the poorer householders and presumably be used to pay off a chunk of debt and buy some stuff, boosting Chinese exports.

But, apart from the impossibility of ever getting this policy on the table, the banks will be the biggest opponents. The banks DO NOT want the sheeple to pay off the debt. Debt is their product, it is what they sell. And what a great product it is too, costs nothing to produce and can be issued in virtually limitless quantities. And the banks don't even want it to be repaid, just as long as the sheeple keep working to pay the interest their entire lives on this incredible little earner.

I wonder if the sheeple will ever realise that they are really working their <deleted> off for the banks and not themselves? Possibly quite a few, but how many know that the debt they are slaving away for actually cost the bank NOTHING?

Yes it amounts to US dollars 5-6trn which is a lot of dosh when you come to bailing out banks, sorting the bad debt problems restoring growth, cutting the deficit. It doesnt amount to a lot for the top 10%.

As you say there are problems but cant they be surmounted. Lets say Bill Gates ended up with a US dollar 3bn bill couldnt they take the shares instead of cash. Couldnt the tax be spread over 3 year? The top 10% of wealth owners earn over US dollars 360k a year so earnings could contribute. As for the banks they have US 1.5trn of bad debt that would all but disappear and they would be recapitalized and they could lend them more (about 4x) with a wealth transfer and the government would get back its TARP monies.

One thing I can tell you is that the middle classes are so impoverished in the US getting them to pay for the crisis will be counter productive.

70% of wealth is owned by the top 10%, 3% of wealth by the bottom 50%. How can that be an efficient allocation of resources.

A vaguely fair distribution of wealth is in the interests of all parties. The top 10% earning 50x the bottom and with wealth 20x the average person. Otherwise the rich will be the ones with problems - you will get out your gun. Look at Thaksin he thought he could lead a country, sell his company for US 2billion and not return a penny. At that point he lost all moral and intellectual respect of anyone. If he had kept a US1billion and given away the other he would probably be running the country now.

I know I will be branded a commie for this but shouldnt US1billion be enough for anyone?

[Abrak]

12Drinkmore,

Do not be fooled by the fed's token UST purchases. It owns less now than 3 years ago, it is not monetizing them. It is manipulating the the yield curve to a minimum extent. It is also trying to stop monetary contraction and effect V. But the major policy aim is to give the impression it is debasing a currency to inflate asset prices and increase spending.

Look at M2 and M3 you will see the reality. The Fed wishes you to hold less cash in order to inflate the economy from a very deflationary position. Ron Paul may well be on their pay roll but he doesnt have much credibility.

[12DrinkMore]

Yes it amounts to US dollars 5-6trn which is a lot of dosh when you come to bailing out banks, sorting the bad debt problems restoring growth, cutting the deficit. It doesnt amount to a lot for the top 10%.

As you say there are problems but cant they be surmounted. Lets say Bill Gates ended up with a US dollar 3bn bill couldnt they take the shares instead of cash. Couldnt the tax be spread over 3 year? The top 10% of wealth owners earn over US dollars 360k a year so earnings could contribute. As for the banks they have US 1.5trn of bad debt that would all but disappear and they would be recapitalized and they could lend them more (about 4x) with a wealth transfer and the government would get back its TARP monies.

One thing I can tell you is that the middle classes are so impoverished in the US getting them to pay for the crisis will be counter productive.

70% of wealth is owned by the top 10%, 3% of wealth by the bottom 50%. How can that be an efficient allocation of resources.

A vaguely fair distribution of wealth is in the interests of all parties. The top 10% earning 50x the bottom and with wealth 20x the average person. Otherwise the rich will be the ones with problems - you will get out your gun. Look at Thaksin he thought he could lead a country, sell his company for US 2billion and not return a penny. At that point he lost all moral and intellectual respect of anyone. If he had kept a US1billion and given away the other he would probably be running the country now.

I know I will be branded a commie for this but shouldnt US1billion be enough for anyone?

Yes, I agree, and probably, at least privately, will everybody else, including a few of the more enlightened wealthier ones. But capitalism was and is not a fair system. And, as I posted a while ago, it is up to the government to subdue the "exuberance" of the wealthy and provide a socialist balance. They have failed.

The easy part is to introduce a wealth tax. Maybe even be extreme and cap personal wealth to some figure like 50,000,000 USD. The much more difficult part is to find a means of fairly distributing the extra taxes. Why should some profligate airhead gambler with 50,000 debts be given the same as another poor guy who is trying to pay his mortgage but is in 50,000 negative equity? It is an impossible task.

And as to bailing out the banks' bad loans? They should fail. The depositors must be bailed out. But the banks, the management, the employees, the shareholders, the bondholders; the whole lot must go to the wall. The banking business is a big scandal, it really is. If they can't successfully sell something which costs them nothing to produce and everybody wants, and then not make a profit at the end, they don't deserve to be in business.

The whole dam_n finance industry needs to be reigned in and made subordinate to the manufactunring industries, who actually produce real stuff and wealth, and not simply debt. I find it utterly wrong that it is now far easier to make "fake" millions on the stock market than to invest in real manufacturing capacity and make "real" added value. I don't know when that happened, but I imagine that date marked the beginning of the current mess we are in. That is the real mis-allocation of resources.

Bill Gates deserves his money. His products basically enable the whole modern world to function. We all benefit from them (although a few linux/Apple peeps might have vastly different views). I wonder how many USDs he looses from copies? He also donates large chunks of cash to various charities.

Taxin (I have never understood why the extra "h"s and such like have to be added to the vocalisation, Phuket should be written Pucket or Phi Phi as Pee Pee, but that is another topic) has several other issues which under the rules of TV cannot be discussed here. The use of personal power to organise a tax free sale for personal gain is understood and accepted by all in Thailand .

[AlexLah]

are you aware that most of the time you are not referring to banks but mosquitoshitsize archaic financial institutions which wanted to go for a piss with the big dogs but couldn't lift a leg?

I think you gotta do some homework Naam. Here will spoon feed you again: http://money.cnn.com/2009/08/14/news/compa...sion=2009081500 I think you are mixing up some things.

And I have read that the FDIC is now out of money, have to beg for some more. But hey it is peanuts and there are 8000 more banks so there is nothing to worry about. Or is there?

[12DrinkMore]

12Drinkmore,

Do not be fooled by the fed's token UST purchases. It owns less now than 3 years ago, it is not monetizing them. It is manipulating the the yield curve to a minimum extent. It is also trying to stop monetary contraction and effect V. But the major policy aim is to give the impression it is debasing a currency to inflate asset prices and increase spending.

Look at M2 and M3 you will see the reality. The Fed wishes you to hold less cash in order to inflate the economy from a very deflationary position. Ron Paul may well be on their pay roll but he doesnt have much credibility.

Well

http://www.chrismartenson.com/blog/fed-buy...y-auction/23880

seems to indicate that the debt is being monetized

And surely by purchasing government backed mortgage assets

http://federalreserve.gov/newsevents/press...y/20081125b.htm

they are monetizing government debts?

But yes, I agree, by whichever tool he pulls out from his toolkit, Bernanke is determined not "to let it happen here". He seems to have succeeded in the stock market, although I am always dubious about "cause and effect" here, but the housing market is still falling.

Bernanke seems to think that his simple toolkit has all the answers. But he has no psychological tools for the masses. And in

the end they will decide whether to join his game or not.

[sokal]

How many banks will fail today?

My bet 3

Your guess is lite

FIVE Banks so far today

http://www.fdic.gov/bank/individual/failed/banklist.html

Record stands at 7 per day two times so far July 2nd & July 22nd

total count is 77 failed so far this year.

are you aware that most of the time you are not referring to banks but mosquitoshitsize archaic financial institutions which wanted to go for a piss with the big dogs but couldn't lift a leg?

There was 10 US banks in the top 20 in the world by market cap in 2005. Now in 2009 there is 3. Top 20 banks in the world 2005-2009

Edited August 15, 2009 by sokal

[flying]

How many banks will fail today?

My bet 3

Your guess is lite

FIVE Banks so far today

http://www.fdic.gov/bank/individual/failed/banklist.html

Record stands at 7 per day two times so far July 2nd & July 22nd

total count is 77 failed so far this year.

are you aware that most of the time you are not referring to banks but mosquitoshitsize archaic financial institutions which wanted to go for a piss with the big dogs but couldn't lift a leg?

Yes swarms of them. Yet big enough to collapse the FDIC to the point they are at now. Most guess we are half way through for the year at best. Yet the FDIC will need a large injection...quick

Also while they may not be Chase Or CITI,BOA yet..(too Big too fail as we pay to bail them) they could be being destroyed (allowed to fail ) by your big dogs for a reason. Seeing what I have so far in this mess... I think I would prefer out future taxes go to the multi smaller banks.

Edited August 15, 2009 by flying

[flying]

I don't think it's a secret at all. Back in March Bernanke announced he intended to buy Treasuries. I don't know if he has or will, but I know he said it was his intention to do so.

What is the point of issuing Treasuries and buying them back - Perhaps they are buying back 10,20 50,90 % ? Sounds a bit Madoff to me .

To buy these secretly is the basic shill in any auction with the same reasons.

It has to be done to boost otherwise failing auctions. The auctions are not going well contrary to what the US media machine is feeding the world.These purchases are not the same as the ones openly done in their name.

Yes of course the FED does buy Treasuries openly properly too .

(canceling of the IOU's)

But this is not the case here as being reported.

[flying]

So the central banks end up with the government bonds.

It is called "Monetizing the debt".

Good Post 12D

This is the other half of the argument about what is occurring.

No matter how many times Mr Bernanke has said he does not

[flying]

are you aware that most of the time you are not referring to banks but mosquitoshitsize archaic financial institutions which wanted to go for a piss with the big dogs but couldn't lift a leg?

Ah the FDIC seems to be affected by these mosquito's

Hope they do not get Dengue Fever & need to propose a bank holiday while they recover. That would not sit well But hey they can now tap that smallish 100B pre approved credit card they have. After all its just paper right?

http://globaleconomicanalysis.blogspot.com...09-fdic-is.html

Edited August 15, 2009 by flying

[Naam]

I think you gotta do some homework Naam. Here will spoon feed you again: http://money.cnn.com/2009/08/14/news/compa...sion=2009081500 I think you are mixing up some things.

And I have read that the FDIC is now out of money, have to beg for some more. But hey it is peanuts and there are 8000 more banks so there is nothing to worry about. Or is there?

why should i worry Alex? because of the few thousand dollars i hold in two U.S. bank accounts? or do you think i have invested in the FDIC? are 8000 banks needed for ~300mm people who (according to the economic experts of Thaivisa) are dirt poor because the equity in their homes is negative and who are up to their necks in credit card debt? then who, pray tell, are those depositors which cleaned out the FDIC? and please tell me one valid reason why i should worry.

of course the real reason that i don't worry is you are doing already an excellent worrying job.