Financial Crisis

[12DrinkMore]

Decoupled or demented?

Well, have we finally reached the point where the stock market has taken on an independent life of its own?

In a month where the FTSE could rise SIX percent

http://www.telegraph.co.uk/finance/markets...this-month.html

We are staring in the face

http://www.telegraph.co.uk/finance/finance...ment-falls.html

Business investment slumped by 18.4pc to £29.9bn in the second quarter, compared with the same period a year earlier, the Office for National Statistics (ONS) said. It was the largest annual decline since records began in 1965.

Compared with the first three months of this year, business investment tumbled by 10.4pc, which was the second worst drop on record. Economists had been expecting a much smaller fall of 3.6pc,

Long term investment or short term dementia? But the sheeple are obviously far more concerned with some girl called Jaycee. But while we are on the topic, take a look at this excellent specimen, but far the loveliest I have ever seen.

http://www.telegraph.co.uk/earth/earthnews...mall-house.html

Well worth more than a year's salary of Ben or Merv. Maybe should be put in charge of the UK economy, could things get worse? The sheeple led by a sheep.

And poor ol' Baldilocks has lost his identity

http://www.telegraph.co.uk/finance/economi...tity-theft.html

But no worries, HE WAS BAILED OUT BY THE BANKS!!!!! :D

The banks bore primary responsibility for the losses and the victims' accounts, including the Bernankes, were most likely made whole.

Well, what a turn up! Our "bail 'em out' banker was bailed out himself. It's one for Ripley.

Edited August 28, 2009 by 12DrinkMore

[flying]

Very true Flying. But the left side of the chart is'nt of interest, its the ramping up on the right hand side that caught my attention.

Yes I saw that too. It fits what many have claimed will be a possible result of this mess.

What are your thoughts on it?

Edited August 28, 2009 by flying

[flying]

Decoupled or demented?

Well, have we finally reached the point where the stock market has taken on an independent life of its own?

Long term investment or short term dementia?

Well not that I would give the majority that much credit but....

I am starting to wonder if half of them are just jumping on the bandwagon seeing others & the talking heads saying $$$$

But it is the other half I am wondering about most....if in their minds it is their protection?

Just another way of getting out of currencies? If the investments are in something they feel will not go away regardless?

[Datsun240Z]

Here's a man, Turner, with an impossible job.

http://business.timesonline.co.uk/tol/busi...icle6811548.ece

Large parts of the City have grown too big and need to be cut down to size, if necessary by imposing new taxes, according to the chairman of the Financial Services Authority.

Lord Turner of Ecchinswell, an influential figure in the reform of banking rules in London and beyond, said that the City had grown "beyond a socially reasonable size", accounting for too much of national output and sucking in too many of Britain's brightest graduates.

"I think some of it is socially useless activity," he said, adding that the financial sector had "swollen beyond its socially useful size" and seemed to make excessively large profits.

"Socially Useless Activity" - nice one coming from a Government body.

Anyway, he is banging his head against the wall.

http://business.timesonline.co.uk/tol/busi...icle6801456.ece

Royal Bank of Scotland (RBS), which is 70 per cent-owned by the British taxpayer, has awarded a bonus worth £2.3 million to a new executive including £1 million just to stay with the company for two years.

...

It emerged last week that RBS had spent more than £10 million on hiring two bankers. Antonio Polverino, a star banker from Merrill Lynch, is on a £7 million one-year package while the bank's new finance director, Bruce Van Saun, is joining from Bank of New York Mellon next month on a multimillion-pound salary.

I wonder what Antonio can produce for his 7,000,000 Quid, or 20,000 Quid every day?

Bernanke lives on a moderate USD 200,000 and King scrapes by with just 300,000 Quid, and they are running the Central Banks.

Suddenly a thought strikes me, could this be why the economies are in the crapper, down the plug 'ole?

MAYBE ALL THE CLEVER GUYS ARE EARNING BILLIONS IN THE BANKS AND THE GUYS LEFT RUNNING THE CENTRAL BANKS ARE THE DROSS, THE INCOMPETENTS, WHO CAN'T GET A DECENT JOB IN THE PRIVATE SECTOR?!!!!!

Why on earth is Merv farting around in London on a pittance when he could be earning TWENTY times his salary running a single bank? Why is Ben trudging around with all the earache for just USD 500 per day (Jeeze, that's only 15,000 Baht/day) ? Maybe they just can't get a decent job offer? I wonder why?

More crap to come.

[midas]

Agree, so the question remains, where is the (real) growth going to come from?

What will be done to give those millions of unemployed people a new job?

Where is that plan?

Whirlpool to shut Indiana plant, cut 1,100 jobs

http://www.marketwatch.com/story/whirlpool...jobs-2009-08-28

" Consolidation is a one way street with a fork in the road. One fork heads to Mexico, the other to India or China. No consolidation roads lead to the US. "

[BlackJack]

"there has never once been a time (at least since 1935) where the price to earnings ratio on the S&P 500 pushed above 100.

Today, it's near 150, indicating the market as more overbought then at any other time in its history.

There is no doubt in my mind that these incredibly lofty valuations have to do with the amount of cash the Fed has flooded into the market. This begs the question: When the money leaves the stock market, where will it go?

It appears our inflationary future is getting uglier by the day.

see chartoftheday.com

[Naam]

Agree, so the question remains, where is the (real) growth going to come from? What will be done to give those millions of unemployed people a new job?

Where is that plan?

Whirlpool to shut Indiana plant, cut 1,100 jobs

" Consolidation is a one way street with a fork in the road. One fork heads to Mexico, the other to India or China. No consolidation roads lead to the US. "

bad news for Americans, Brits, Germans, Spaniards (and you name them). they have to get used to the fact that for years to come their employment opportunities are rather limited. the good news is... their chances are still much better than they ever were in Bangla Desh, Ethiopia, Swaziland, nowadays Zimbabwe and Chad

[flying]

Marc Faber 8-26-09

[12DrinkMore]

Marc Faber 8-26-09

He was in fine spirits. Looks like this thread could run for years and years with all the crisis heading our way.

I wonder if Abrak has changed his mind about the shift from the West to the East?

So Faber reckons it's time to pile into bank stocks, but better pick the right ones because we are still keeping up the average of around three bank failures each Friday.

http://www.bloomberg.com/apps/news?pid=206...id=aSdMMGzkt1do

Regulators Shutter Three U.S. Banks, Bringing 2009 Toll to 84

Another one bites the dust

Another one bites the dust

And another one gone, and another one gone

Another one bites the dust

[flying]

So Faber reckons it's time to pile into bank stocks, but better pick the right ones because we are still keeping up the average of around three bank failures each Friday.

Right

It is almost morbid but I look every Friday here

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

I still say this is a big heist none seem to notice.

You know someone is swooping in & grabbing these assets off all these smaller....errr too small too succeed banks....

Wonder who that would be & whose cash are they using?

[sokal]

Marc Faber 8-26-09

This guy is my third favorite Austrian economist, Schiff is still the man, James Grant is second. What is with the rat tail hair ?

[sokal]

even my dogs know that monetising debt is the only solution

Why didn't Paul Volker just do that in the 80s then ?

debt in the 80s was peanuts (even in percentage of GDP) compared to nowadays and what is still in the offing. besides, Volcker's main target was to erase or at least tame inflation with skyhigh interest rates. i remember 30Y-UST yielding 13-14% in '82.

well at least if Bernanke get hit by a bus we can just appoint the chairman of the central bank of Zimbabwe, he should be able to handle the job.

[midas]

What is going on here, logged in but cannot post 3 times in a row then finally logged in and on the reply screen, type my message and it's gone.

Alex

Better get used to it

While everyone watches the healthcare debate and HR1207 about auditing the fed ..........look what they are

trying to sneak in.......... I never heard anyone in the MSM talking about S. 773: Cybersecurity Act of 2009..................

I dont see why or how would this be a good thing for the American people ?

http://www.allvoices.com/contributed-news/...t-down-internet

http://www.govtrack.us/congress/bill.xpd?bill=s111-773

Question May 13, 2009 7:19 PM - Does this bill permit the President to effectively "shut down" the Internet when he deems it necessary?

Answered by a visitor on Jun 17, 2009 12:59 PM - Actually since the Executive Branch is given the authority to decide what is and isn't

critical infrastructure, this bill would allow them to shut down anyone on the internet period without a court order or even any kind of hearings.

what such as those who are fiercly opposed to Obama's policies ?

Edited August 29, 2009 by midas

[AlexLah]

Hmmmmm, yes it seems nobody really cares about that one just as that indefinite detention rule/law whatever it is called. I find it very strange to observe all those changes and there is not much attention being given to those facts.

Anywaysy, for all of those that still think that I talk non sense when mentioning that world happenings are influenced by a few, please read the following document. I have to warn that it is still a draft version and based on 2007 data so don't start screaming and yelling, incomplete data bla bla bla.If you think you can do better job please go ahead.

http://arxiv.org/PS_cache/arxiv/pdf/0902/0902.0878v1.pdf

And yes Midas it seems they now also have some kind of filter or something that monitors the internet traffic here in Thailand. It was mentioned in some other forum. Plenty of very weird stuff going on here on the puter while trying to surf the net.

[Abrak]

I wonder if Abrak has changed his mind about the shift from the West to the East?

Nope fraid not on this one.... I am with Marc Faber who recently wrote...

Our friend Albert Edwards thinks that “we will look back on the

Chinese economic miracle as the sickest joke yet played on investors”

and that “the bullish group-think on China is just as vulnerable to massive

disappointments as any other extreme example of bubble nonsense I have

seen over the last two decades. The fall to earth will be equally as

shocking.”

You know if you increase private sector borrowings at an annualized rate of over USdollars2.2trn (something I dont think the US ever achieved) to generate some decent growth (say an extra USdollars250bn) is pretty easy to achieve. We only have the US to prove that to us.

But we all know it will end in tears....

[sokal]

I wonder if Abrak has changed his mind about the shift from the West to the East?

Nope fraid not on this one.... I am with Marc Faber who recently wrote...

Our friend Albert Edwards thinks that "we will look back on the

Chinese economic miracle as the sickest joke yet played on investors"

and that "the bullish group-think on China is just as vulnerable to massive

disappointments as any other extreme example of bubble nonsense I have

seen over the last two decades. The fall to earth will be equally as

shocking."

You know if you increase private sector borrowings at an annualized rate of over USdollars2.2trn (something I dont think the US ever achieved) to generate some decent growth (say an extra USdollars250bn) is pretty easy to achieve. We only have the US to prove that to us.

But we all know it will end in tears....

The problem is that there is no real economy to fall back on. Back when Japan crashed it was still not long after the US had a gold standard so the US economy was not nearly as phony. Now all economies are phony so making a call on China is hard. All economies are based on monetary witchcraft.

The first country to implememt a gold standard will beat everyone out eventually. I think it will some middle eastern country or Russia

[flying]

You know if you increase private sector borrowings at an annualized rate of over USdollars2.2trn (something I dont think the US ever achieved) to generate some decent growth (say an extra USdollars250bn) is pretty easy to achieve. We only have the US to prove that to us.

But we all know it will end in tears....

Agreed...........

So since it is becoming painfully obvious to more & more that this will in fact end in tears.....Perhaps a good turn of this thread or even the start of another is....

What is the best or at least a good direction to head in? Seeing what we are seeing & the likely result where to from here?

What would be some of the best ways to profit from what is coming? Is it possible?

The way to hedge is one thing but how to go forward or to capitalize on it?

Shorting the failing market when it inevitably turns downward ?

Investing in Asia?

Would like to hear others thoughts.

[flying]

So much for transparency

http://www.reuters.com/article/ousiv/idUSTRE57R5BE20090828

Judge puts Fed's bailout revelations on hold

NEW YORK (Reuters) - The U.S. Federal Reserve won a delay of a federal judge's order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received.

Chief Judge Loretta Preska of the U.S. District Court in Manhattan stayed her August 24 order in favor of Bloomberg News, which had sought the information under the federal Freedom of Information Act, so that the central bank could appeal.

The Fed's board of governors has worried that disclosure would stigmatize the participating banks, threatening both them and the U.S. economy.

It argued disclosure threatened "irreparable harm to these institutions and to the board's ability to effectively manage the current, and any future, financial crisis."

The case and a similar one involving News Corp's (NWSA.O) Fox News Network LLC raise the issue of how much the public has a right to know about how the government is bailing out a troubled financial system.

The Fed was not immediately available for comment.

Preska directed the Fed's board of governors to file a notice of appeal and an emergency stay application with the 2nd U.S. Circuit Court of Appeals.

She also said Bloomberg will not, for now, insist on a search of "official files" at the Federal Reserve Bank of New York, after the central bank's representation that a search would likely be fruitless.

The case arose when two Bloomberg reporters submitted FOIA requests about actions the Fed took to shore up the financial system in 2007 and early 2008, including an expansion of lending programs and the sale of Bear Stearns Cos to JPMorgan Chase & Co (JPM.N).

The case is: Bloomberg LP v. Board of Governors of the Federal Reserve System, U.S. District Court, Southern District of New York (Manhattan), No. 08-9595.

[Abrak]

You know if you increase private sector borrowings at an annualized rate of over USdollars2.2trn (something I dont think the US ever achieved) to generate some decent growth (say an extra USdollars250bn) is pretty easy to achieve. We only have the US to prove that to us.

But we all know it will end in tears....

Agreed...........

So since it is becoming painfully obvious to more & more that this will in fact end in tears.....Perhaps a good turn of this thread or even the start of another is....

What is the best or at least a good direction to head in? Seeing what we are seeing & the likely result where to from here?

What would be some of the best ways to profit from what is coming? Is it possible?

The way to hedge is one thing but how to go forward or to capitalize on it?

Shorting the failing market when it inevitably turns downward ?

Investing in Asia?

Would like to hear others thoughts.

While I wont give to many more thoughts, I would like to point out that all the cards are in the hands of the Chinese to an extent.

Here is monetary growth over the medium term....

Then you look at what has happened over the past 6 months. Banks lending into an abyss...

http://www.forexyard.com/en/reuters_inner....MY-MONEY-URGENT

M2 now rising at 28%.... how can that not be an inflationary bubble....

The key point must be that this will eventually feed through to the US....I would guess.... as their MS are linked. Historically, the whole point of the dollar peg was to keep US inflation underhand. The US deficit led to a chinese surplus which inflated their money supply which the chinese controlled through reserves.

Very simply all Chinese has to do is print yuan to accumulate dollar UST reserves.

Once hyperinflation kicks into gear, Chinese authorities will find it impossible to bring it under control without sacrificing the dollar. Since hyperinflation would hurt Chinese exporters as much as losing their US exports, China will face a clear cut decision. Either dumping the dollar peg and selling its USD holdings or contain inflation and support its political system.

[flying]

A bit dramatic perhaps but, short enough for folks to get an idea.....

Personally I do not like it when they dramatize info. The system is corrupt enough to stand on its own.

But many who have never read or watched actual footage sometimes find it too complicated.

This is short & informative but again a bit dramatic.

Sad thing is citizens have been willingly taking part in this corrupt mess for way too many years.

Edited August 29, 2009 by flying

[flying]

US Equity Markets look Dangerously Wobbly As Insiders Sell In Record Numbers

"Investors Intelligence's latest survey of advisory services showed an impressive 51% bullish and a meager 19% bearish...the spread hasn't been that wide since November 2007." Alan Abelson, Barrons, Aug. 29, 2009

Next week we move into September, the riskiest month of the year for financial markets, with the federals escalating preparations for a flu pandemic, while Congress considers legislation providing a 'kill switch' on the Internet for President Obama to use in the event of 'an emergency.' There are widespread rumours of a bank holiday lasting one week after a market meltdown begins in the US, during which the banks would be restructured.

Risky times indeed, and those in the best position to know what is happening behind the scenes are hitting the exits in record numbers right now.

As TrimTabs reports in the attached news release, insider selling is reaching record levels, even as more speculators borrow to go long stocks. There are some obvious bubbles already formed in certain insolvent financial stocks like AIG, with disinformation rampant in the Wall Street demimonde.

The Obama Economics and Regulatory Team, in conjunction with the Federal Reserve, have accomplished no serious reform of the fiancial system. They have enabled the type of market inefficiency, soft fraud and price manipulation that is undermining global confidence in the integrity of US markets and financial products. And they have advanced a proposal to consolidate a huge amount of regulatory power under the Federal Reserve, a private banking agency that was at the root of our unfolding financial crisis.

The time has passed when Obama could have pointed to the past mistakes of his predecessors as the fault for our problems. Thanks to Tim Geithner, Barney Frank, and Larry Summers he now owns the financial crisis, and the coverups, policy errors, scandals, conflicts of interest and bailouts that have occurred since he has taken office. His reappointment of Ben Bernanke as Federal Reserve chairman most surely tied a bow on his ownership package for the crisis, which is in danger of becoming his 'financial New Orleans.'

Wall Street pigs out on public money while the nation suffers. This is not change, this is the same old thing.

http://jessescrossroadscafe.blogspot.com/

[midas]

Paul Krugman - eminent economist shown for being the political activist he is...........and a total hypocrite

ABC Australia Dateline August 27, 2009

Paul Krugman: "Deficits Saved The World"

Inquiring minds are reading Till Debt Does Its Part

So new budget projections show a cumulative deficit of $9 trillion over the next decade. According to many commentators, that’s a terrifying number, requiring drastic action — in particular, of course, canceling efforts to boost the economy and calling off health care reform.

The truth is more complicated and less frightening. Right now deficits are actually helping the economy. In fact, deficits here and in other major economies saved the world from a much deeper slump. The longer-term outlook is worrying, but it’s not catastrophic.

If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression.

As I said, deficits saved the world.

In fact, we would be better off if governments were willing to run even larger deficits over the next year or two. The official White House forecast shows a nation stuck in purgatory for a prolonged period, with high unemployment persisting for years. If that’s at all correct — and I fear that it will be — we should be doing more, not less, to support the economy.

But what about all that debt we’re incurring? That’s a bad thing, but it’s important to have some perspective. Economists normally assess the sustainability of debt by looking at the ratio of debt to G.D.P. And while $9 trillion is a huge sum, we also have a huge economy, which means that things aren’t as scary as you might think. ....

ABC Australia Dateline November 3, 2004

Paul Krugman: "[The Budget Deficit] is comparable to the worst we've ever seen in this country. It's bigge[r] than Argentina in 2001."

Inquiring minds are reading Krugman calls on Bush to reign in the red.

TONY JONES: Well, the US is not just labouring under a record trade deficit, there are warnings tonight that its budget deficit could precipitate a Latin American style financial crisis.

Influential economist Paul Krugman says the US will face a severe downturn before the end of the decade unless the $500 billion fiscal debt is rectified.

In his latest book, The Great Unravelling, the Princeton University economist is calling on President Bush to abandon his program of trillion dollar tax cuts, otherwise, he claims, there may not be enough funds to pay for the waves of baby boomers who will soon retire.

I spoke to Paul Krugman a short time ago.

TONY JONES: Paul Krugman, history proved your predictions right over the Asian financial crisis.

You're now warning essentially that the engine of the world economy, the United States itself, is heading for a South American style financial crisis.

What's the evidence for that?

PROFESSOR PAUL KRUGMAN, PRINCETON ECONOMIST: Well, basically we have a world-class budget deficit not just as in absolute terms of course - it's the biggest budget deficit in the history of the world - but it's a budget deficit that as a share of GDP is right up there.

It's comparable to the worst we've ever seen in this country.

It's biggest than Argentina in 2001.

....

TONY JONES: It's a bit more than arithmetic though, isn't it?

Would you agree with the proposition that you're slowly transforming yourself, in a way, from a pure economist into also something of a political activist?

PROFESSOR PAUL KRUGMAN: Well, yeah, I mean, it's not what I intended. But I came in writing as a journalist, writing occasional columns in the 90s, mostly about economical fears with a political tinge.

I came to the New York Times intending to do pretty much the same thing.

But then it became clear very early on that the President of the United States was irresponsible and dishonest on matters economic and it turned out that what I learned there was true of other kind of policies as well.

So, I was forced, if you like, just by the arithmetic of understanding how the budget works into a much broader critique of this really kind of scary thing that's happening to my country.

[flying]

Paul Krugman: "Deficits Saved The World"

The official White House forecast shows a nation stuck in purgatory for a prolonged period, with high unemployment persisting for years. If that's at all correct — and I fear that it will be — we should be doing more, not less, to support the economy.

Well I do agree with the second part

But instead we support the cause of the crisis not the solution

[sokal]

Paul Krugman knows nothing about basic economics. He is a brain dead fool

[12DrinkMore]

I wonder if Abrak has changed his mind about the shift from the West to the East?

Nope fraid not on this one.... I am with Marc Faber who recently wrote...

Faber was positive about the Asian economies in the above video from around 8:20 onwards.

[flying]

You know I thought it would be a big enough wake up call when the FDIC raised their limit last year to 250k per depositor. Anyone with a computer & a calculator should have known that was the warning flare.

It was for me

Now they the FDIC have gone to commercials on the radio & TV using Suzie for ad's

Funny but IMHO it seems they are actually waking up more folks than calming them

http://www.myfdicinsurance.gov/

Edited August 30, 2009 by flying

[Naam]

Paul Krugman knows nothing about basic economics. He is a brain dead fool

true! the real experts are posting on Thaivisa. or has anybody seen Krugman posting here?

[Naam]

Marc Faber 8-26-09

This guy is my third favorite Austrian economist...

...and the favourite of all americans who will all soon billionaires.

quote:

U.S. Inflation to Approach Zimbabwe Level, Faber Says

“I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”

facit: when one has reached a certain level of acceptance with the media one can present any bullshit without being ridiculed.

[12DrinkMore]

please read the following document. I have to warn that it is still a draft version and based on 2007 data so don't start screaming and yelling, incomplete data bla bla bla.If you think you can do better job please go ahead.

http://arxiv.org/PS_cache/arxiv/pdf/0902/0902.0878v1.pdf

Jeeze Alex, that's a bit hard going for a lazy Sunday morning in paradise....

And yes Midas it seems they now also have some kind of filter or something that monitors the internet traffic here in Thailand. It was mentioned in some other forum. Plenty of very weird stuff going on here on the puter while trying to surf the net.

Has been widely discussed. A total waste of money, except that instead of taxing road users, there is probably now a whole department of hundreds BIBs sitting uncomfortably in their tight uniforms checking out all the cyberporn, and dreaming of a bit of light relief in the karaoke bars after work.

:D

[jcon]

Faber has a rat-tail = can't trust the cheeky monkey.

With that sweet rat-tail, he is now to economics as Steven Segal is to film...

uh oh Plarex, I think The Matrix just started playing on True Movie Hits Channel 12 UBC so it's time for you to get out the lube and the tissue box....

edit: Sorry channel 12 is TMH not HBO, wouldn't want to confuse you and make you miss a second of the "awakening."

Edited August 30, 2009 by jcon