Financial Crisis

[AlexLah]

Indeed Naam, your example of lions in a zoo, very good comparison.

And the price of crude, who still thinks it is based on supply and demand, (please raise your hand). It was mentioned a while ago (if I remember well) that OPEC wanted/needed the price to be around 70-80 Dollars. USD index was around 82-83 I believe at that time.

Recent article that confirms, sort of.http://www.businessinsider.com/kuwait-were-happy-with-the-price-of-oil-right-now-2009-8

Anyway, things seem to be pretty unchanged here in Jakarta, terrible traffic jams and plenty of tourists and bizz travelers here. And lot's of construction going on.

[12DrinkMore]

How will all this play out?

Here is a depressing analysis of Spain.

http://www.safehaven.com/article-14360.htm

Santander owns a couple of UK banks/building societies. I would if they are about to do an "Iceland" on me? Those bastards took me for a lot of money, although I have to admit that it now looks a little better, maybe 20%, which is less than those Scottish <deleted> Brown and Darling did to the UK population with devaluing the Quid. Anyway, time to review "who owns who?".

It's a strange world we are now in, where the banks, those former "pillars of society" have been exposed as the profiteering fraudsters they really are. I was recently forced to go through a "know your customer" procedure and provide proof of identity and address by several Uk banks. And that is just to deposit money with them. It really begs the question, when these usurers issue credit, why aren't they making the same painstaking procedures with all these debtors? I have the impression that depositors are "not wanted here" and that the banks only want debtors. There is apparently no requirement for the UK banks to carry a reserve of cash for the depositors' funds. But they have "sort of decided themselves" that some 3 or 4 percent is adequate.

With the now explicit guarantee from the governments that the banks cannot fail, are depositors really wanted anymore? Seems to me that the savers with "savings accounts" are intended to be converted to debtors at some point. Depositors who want to earn a bit of interest are only tolerated.

My grandparents could never have comprehended the financial system we have now. Or maybe my grandmother had a vague inkling, she never had a bank account, never had a debt and kept her money at home, "just don't trust those banks with my money", she said.

Well, now, neither do I, nor do I trust the governments to take care of the peeps who voted them in.

In fact, when it comes down to what can be trusted 100% I am left with beer. Never let me down yet. Honest to the last drop.

Edited September 1, 2009 by 12DrinkMore

[12DrinkMore]

I read market breifing notes claiming markets are trading lower based on crude weakness, as if that's a bad thing. Well that's just bullshit.

The markets, that is the financial markets, have now completely decoupled themselves from the real world. Really, in the face of increasing unemployment, insolvencies, deflation in the property markets, both commercial and residential, and still the stock markets are heading towards the moon. Unbelievable but true, another one for Ripley.

In my little world here the only thing I now understand is that if I drink a lot of beer I get pissed, and then pay with a hangover the next day. Fair enough, I knew what was, and, indeed, is coming along. But, when everything is collapsing around us, somehow the road to riches is being trodden by those who have drunken the beer in massive quantities and avoided the headache, and indeed by some slight of hand managed to have given the rest of us the headache.

Anyway, things seem to be pretty unchanged here in Jakarta, terrible traffic jams and plenty of tourists and bizz travelers here. And lot's of construction going on.

Another mystery in the making, just like the pyramids. Why do all the creditors think the debtors will be able to pay up?

[flying]

With the now explicit guarantee from the governments that the banks cannot fail, are depositors really wanted anymore?

My grandparents could never have comprehended the financial system we have now. Or maybe my grandmother had a vague inkling, she never had a bank account, never had a debt and kept her money at home, "just don't trust those banks with my money", she said.

Well, now, neither do I, nor do I trust the governments to take care of the peeps who voted them in.

In fact, when it comes down to what can be trusted 100% I am left with beer. Never let me down yet. Honest to the last drop.

Well the banks here are begging for depositors. They know more & more are becoming your grandparents. They are now becoming the un-banked.

So much so that the FDIC now have TV & Radio commercials. All that is doing is scaring folks more IMHO

As for your govt....seems it is going the same direction here.

Trusting beer is a given

But you know you can trust what you see & know to be wrong.

[ray23]

Well my guage on the Thai side of thing when was the day that I could get local help. At first I was looking at a paint job. Enough craftamen avialable to go for major modifcations. I'm getting a great job done. Illiminating the middle man, so the price is good and the money is going directly into the workers hands, where it's really needed. I am absolutley running out things for them to do, so I hope something esle pops up for them later.

Edited September 1, 2009 by ray23

[rijb]

Underwear Index forecast: decline is slowing...

http://www.washingtonpost.com/wp-dyn/conte...ml?hpid=topnews

[flying]

I had zero faith in the first bank stress test. I agree with what either Schiff or Paul? said of it...It was like telling a bunch of gerbils to run across a bridge. When the bridge didn't collapse they said it was safe.

Anyway here is a new report

Q2 2009 Bank Stress Test Results: The Zombie Dance Party Rocks On

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

[sokal]

Underwear Index forecast: decline is slowing...

http://www.washingtonpost.com/wp-dyn/conte...ml?hpid=topnews

The greenspan index ? Allan Greenspan is the second dumbest central banker in the world. Do the opposite of what he says and should make money

[midas]

How will all this play out?

Here is a depressing analysis of Spain.

12, you should also see this about Guanzhou East tower

in China

http://www.youtube.com/user/greenni7#play/...l/0/ektMQGbW3wk

[flying]

12, you should also see this about Guanzhou East tower

in China

My wife went to Guangzhou about 2 years ago on a buying trip.

She liked it except for the smoke. She doesn't smoke & there everyone does even in elevators trains etc...

That aside it is a sad sight all those empty buildings. Reminds me of the slump in the 70's in California. Except it was being called the rust State because of all the empty warehouses rusting away.

The difference though according to Schiff with China & Japan stimulus is they had their own money.

They did not need to create it out of thin air to have a stimulus.

[Naam]

one should also take a look at some of the slums in Dacca, Bangla Desh. i am sure there are lotsa things to see which can be blamed on Greenspan, Benjamin Shalom, O'Bama, Brown and Darling.

p.s. and that the roads outside Dacca, especially the R301 leading to Kalachandpur, were spoiled by Geithner with the help of Angela Merkel is a well known fact!

[midas]

more evidence of deflationary forces

Cut my pay ... please!

As the number of layoffs mount, more workers are ready and willing to take significant pay cuts to find employment.

http://money.cnn.com/2009/08/28/news/econo...sion=2009083113

[rijb]

Underwear Index forecast: decline is slowing...

http://www.washingtonpost.com/wp-dyn/conte...ml?hpid=topnews

The greenspan index ? Allan Greenspan is the second dumbest central banker in the world. Do the opposite of what he says and should make money

I did a "short" search for other economic indicators after reading your "brief" reaction to the underwear index. What about...

- the lipstick index

- Champagne sales

- the demand for archaeologists

- the crane count

- the taxi test

- Getting a table

- Fine wine sales

- the hemline test

- the Facelift factor

- The bling test

- the trophy wife desertion rate

or...the housing market? (maybe not!)

Edited September 2, 2009 by rijb

[badge]

one should also take a look at some of the slums in Dacca, Bangla Desh. i am sure there are lotsa things to see which can be blamed on Greenspan, Benjamin Shalom, O'Bama, Brown and Darling.

p.s. and that the roads outside Dacca, especially the R301 leading to Kalachandpur, were spoiled by Geithner with the help of Angela Merkel is a well known fact!

Ive never thought of goign to 'Dacca', but after seeing a short film I was considering a quick look before it changes too much.

You seem a very well travelled chap Naam, would I be right in thinking your not a young man? with all due respect

[ray23]

Heck he is a babe in the woods only 70

[12DrinkMore]

Well, it's a start.

The Bank of England data indicated that consumers paid back £635 million more than they borrowed during July – the first time this has happened since 1993, when the statistics began being collected in their current form.

So that is around 10 Quid per man/woman/child/politician/banker in the UK. They must have foregone a Big Mac Happy Meal in July.

So how does it stack up against the mountain of debt the banks have produced?

The fall in the total level of consumer debt, dipping to £1.46 trillion, means thousands of prudent households have started to trim their credit card bills, pay back their mortgages and reduce their unsecured loans.

Jeeze, 1,460,000,000,000 Quid, that is, hmm, lots of zeros here, and unfortunately at the wrong end of the number, but here we go;

oh dear, that is a sizeable 22,000 Quid per head.

Well anyway, lets see just how long this will take to pay off at the rate of 10 Quid/month.

Click wirrr, OH :D OH MY OH MY OH MY, that makes 190 YEARS. Looks like more than a few Big Mac happy Meals will have to be replaced with running on the debt treadmill, ie working, to make any significant progress. Buying on the "never never" seems to have taken on a new dimension.

But if we listen to the politicians/bankers BS, then 22,000 Quid debt ONLY equates to an EASILY AFFORDABLE 1,100 Quid of interest at the amazingly great offer of just 5% interest. So let's all go and have another debt binge. I wonder when exactly the focus was changed from the AMOUNT of DEBT to repay to the AMOUNT of INTEREST to repay. The next logical step is to take out debt according to how much interest we are paying on the interest of the debt.

But how much are the banks making from all this? Taking 5% interest again, I have no idea if this is the average, then the UK population for their consumer debt are paying the banks some 70 Billion Quid every year. Not a bad income from selling a product which costs nothing to create. How did they manage to screw up this nice little earner?

I suppose to complete the picture the UK national debt of 800,000,000,000 should be factored in. This is conveniently about half the total of consumer debt. This makes the sums a lot easier, leaving every Brit around 33,000 Quid in debt.

By a happy coincidence the amount of consumer debt is now equal to the GDP, which may or may not be significant. But how does all this interest reflect back in the GDP? Presumably the 5% interest paid, or possibly not, on consumer debt, after going through the banks, pops out as 5% of the GDP in "services". So every time Brown/Darling/King yank on the interest rate handle, after some hiatus in the banks, the GDP will also fall/rise by roughly that amount. Assuming, of course, there is a vague element of logic in this. So how much would the massive reduction in interest rates have contributed to the fall in GDP this year?

[12DrinkMore]

more evidence of deflationary forces

Cut my pay ... please!

As the number of layoffs mount, more workers are ready and willing to take significant pay cuts to find employment.

http://money.cnn.com/2009/08/28/news/econo...sion=2009083113

"Every penny covers our mortgage, life insurance, groceries, gas -- just the basic necessities," she said.

And from her photo it looks like the majority of what she spends goes on groceries, leaving plenty of room for cutbacks, in her case probably about 40 Kgs.

[Naam]

one should also take a look at some of the slums in Dacca, Bangla Desh. i am sure there are lotsa things to see which can be blamed on Greenspan, Benjamin Shalom, O'Bama, Brown and Darling.

p.s. and that the roads outside Dacca, especially the R301 leading to Kalachandpur, were spoiled by Geithner with the help of Angela Merkel is a well known fact!

Ive never thought of goign to 'Dacca', but after seeing a short film I was considering a quick look before it changes too much.

You seem a very well travelled chap Naam, would I be right in thinking your not a young man? with all due respect

i estimate that my age is at least double of yours Badge

[churchill]

Markets coming to a head ?

http://ftalphaville.ft.com/blog/2009/09/02...own/?source=rss

[lannarebirth]

Markets coming to a head ?

http://ftalphaville.ft.com/blog/2009/09/02...own/?source=rss

'Tis the season.

[badge]

one should also take a look at some of the slums in Dacca, Bangla Desh. i am sure there are lotsa things to see which can be blamed on Greenspan, Benjamin Shalom, O'Bama, Brown and Darling.

p.s. and that the roads outside Dacca, especially the R301 leading to Kalachandpur, were spoiled by Geithner with the help of Angela Merkel is a well known fact!

Ive never thought of goign to 'Dacca', but after seeing a short film I was considering a quick look before it changes too much.

You seem a very well travelled chap Naam, would I be right in thinking your not a young man? with all due respect

i estimate that my age is at least double of yours Badge

I was certainly right then

In fairness Im sure i read you were married for 30yrs or so, so you couldnt have been too young! I think I saw you have real estate in Brazil too. Do you mind if I ask whether you lived there? Friends and I are travelling around Central and South America over the Christmas period, it will be my first time on land in the region

[teletiger]

I was certainly right then

In fairness Im sure i read you were married for 30yrs or so, so you couldnt have been too young! I think I saw you have real estate in Brazil too. Do you mind if I ask whether you lived there? Friends and I are travelling around Central and South America over the Christmas period, it will be my first time on land in the region

Is the travel forum down?

Regards.

[sokal]

more evidence of deflationary forces

Cut my pay ... please!

As the number of layoffs mount, more workers are ready and willing to take significant pay cuts to find employment.

http://money.cnn.com/2009/08/28/news/econo...sion=2009083113

Asset price deflation is not monetary deflation. So yes, there is asset price deflation. When interest rates go up, that will be monetary deflation.

[flying]

Tick Tick Tick TICK.......................

"It Could Get Ugly Very Fast": Banking Crisis Grows, FDIC's Funds Shrink"

http://finance.yahoo.com/tech-ticker/artic...SKF,xlf,jpm,fas

Edited September 2, 2009 by flying

[Naam]

In fairness Im sure i read you were married for 30yrs or so, so you couldnt have been too young! I think I saw you have real estate in Brazil too. Do you mind if I ask whether you lived there? Friends and I are travelling around Central and South America over the Christmas period, it will be my first time on land in the region

we lived in Sao Paulo (mid 80s) but in a home owned by the company. real estate (land) we bought many years later as we planned to retire in Brazil, not in S.P. but 85km north of Rio in the mountains 1000 m above sea level. after opting to retire in Thailand (2004) we sold our land in (2007). except for the fact that i still keep close contact with a bunch of brazilian friends i'm afraid i can't give you much advice as far as your travelling plans are concerned.

[12DrinkMore]

This swam in under my radar

http://edition.cnn.com/2009/BUSINESS/08/27...t.ft/index.html

But last month, the Swedish Riksbank entered uncharted territory when it became the world's first central bank to introduce negative interest rates on bank deposits.

And even more worrying is that King is looking to try it out on the Brits.

Mervyn King, the Bank of England governor, has hinted he may follow the Swedish example as the danger of a so-called liquidity trap, where cash remains stuck in the banking system and does not filter out to the wider economy, is an increasing concern for the UK.

The banks are hardly going to take a charge on money they deposit in Merv's coffers, and in the current economic mess will not want to lend it out, particularly if they cannot price in the increased risk of default by charging a higher interest rate, I wonder how this is going to backfire?

- The GBP will certainly take another hit against the EUR/AUD and USD.

- The banks won't want any more cash, so maybe they will hang on to their bonds instead of selling them to Merv in his QE program? A sort of unbanking of the banks from the central bank. I suppose it'll help Brown to finance his overspending for a while when he issues his "debt" bonds.

And I thought the economy was recovering .

Instead of V's and W's and U's maybe we're looking at a ski jump?

But not long now before one of Alex's Disaster Dates is due, can't remember the exact date, but wasn't it around the middle of September?

And here's a piece of bad news

http://www.bloomberg.com/apps/news?pid=206...id=aqyxH6p.cd_c

U.S. consumer bankruptcy filings rose 24 percent in August from the previous year to 119,874, according to the American Bankruptcy Institute and National Bankruptcy Research Center.

“Consumers continue to turn to bankruptcy as a shield from the sustained financial pressures of today’s economy,” said Samuel Gerdano, the executive director of the American Bankruptcy Institute. “As a result, we expect consumer filings to top 1.4 million this year.”

I wonder if that roughly equates to 1,400,000 households or 1.4% of total US households going tits up under the mountain of debt? Pity there are no figures for the amount of debt wiped of the banks' books by this.

Edited September 3, 2009 by 12DrinkMore

[badge]

we lived in Sao Paulo (mid 80s) but in a home owned by the company. real estate (land) we bought many years later as we planned to retire in Brazil, not in S.P. but 85km north of Rio in the mountains 1000 m above sea level. after opting to retire in Thailand (2004) we sold our land in (2007). except for the fact that i still keep close contact with a bunch of brazilian friends i'm afraid i can't give you much advice as far as your travelling plans are concerned.

OK, thanks. If you would indulge me further; being based in Brazil 25yrs ago, were you in the Lumber or Commodities business in a previous life? As a career?

[flying]

OK, thanks. If you would indulge me further; being based in Brazil 25yrs ago, were you in the Lumber or Commodities business in a previous life? As a career?

Is the travel forum down?

Regards.

Personal message might be a better route

Edited September 3, 2009 by flying

[sokal]

This swam in under my radar

http://edition.cnn.com/2009/BUSINESS/08/27...t.ft/index.html

But last month, the Swedish Riksbank entered uncharted territory when it became the world's first central bank to introduce negative interest rates on bank deposits.

And even more worrying is that King is looking to try it out on the Brits.

Mervyn King, the Bank of England governor, has hinted he may follow the Swedish example as the danger of a so-called liquidity trap, where cash remains stuck in the banking system and does not filter out to the wider economy, is an increasing concern for the UK.

The banks are hardly going to take a charge on money they deposit in Merv's coffers, and in the current economic mess will not want to lend it out, particularly if they cannot price in the increased risk of default by charging a higher interest rate, I wonder how this is going to backfire?

- The GBP will certainly take another hit against the EUR/AUD and USD.

- The banks won't want any more cash, so maybe they will hang on to their bonds instead of selling them to Merv in his QE program? A sort of unbanking of the banks from the central bank. I suppose it'll help Brown to finance his overspending for a while when he issues his "debt" bonds.

And I thought the economy was recovering .

Instead of V's and W's and U's maybe we're looking at a ski jump?

But not long now before one of Alex's Disaster Dates is due, can't remember the exact date, but wasn't it around the middle of September?

And here's a piece of bad news

http://www.bloomberg.com/apps/news?pid=206...id=aqyxH6p.cd_c

U.S. consumer bankruptcy filings rose 24 percent in August from the previous year to 119,874, according to the American Bankruptcy Institute and National Bankruptcy Research Center.

"Consumers continue to turn to bankruptcy as a shield from the sustained financial pressures of today's economy," said Samuel Gerdano, the executive director of the American Bankruptcy Institute. "As a result, we expect consumer filings to top 1.4 million this year."

I wonder if that roughly equates to 1,400,000 households or 1.4% of total US households going tits up under the mountain of debt? Pity there are no figures for the amount of debt wiped of the banks' books by this.

There was some talk on the Swedes negative interest rate joke on the EURO thread ? Its the dumbest thing I have ever heard, I have said Bernanke is stupid but evidently there is stupider central bankers that walk this earth.

[12DrinkMore]

There was some talk on the Swedes negative interest rate joke on the EURO thread ? Its the dumbest thing I have ever heard, I have said Bernanke is stupid but evidently there is stupider central bankers that walk this earth.

I wouldn't put it past Bernanke to push the negative interest lever too. He is determined to prove that his "unvconvential tools" will "not let it happen here".

I wonder if the central bankers will ever get their heads around the obvious, that the peeps are loosing interest in taking on more debt and buying more stuff, or buying deflating assets such as houses? Maybe a reality/sanity check is required?

The attempts to boost levels of debt even higher to force an economic recovery are turning into a farce. Pushing on a string comes to mind.