Financial Crisis

[flying]

Even Bernanke only has some 17% of the voting rights, which is IMO too many by about 16.999.

that is the official version. reality differs very much!

Tu Tong !

That is exactly what I think too.

Which is why I said....

Not to mention what other shareholders they would ultimately control vote wise.

[midas]

I wonder what kind of skeletons this case would reveal

Ex- AIG exec Cassano reportedly may face charges

Federal prosecutors are preparing to have a grand jury consider whether to indict former senior American International Group executive Joseph Cassano, The Wall Street Journal reported Friday.

http://www.marketwatch.com/story/ex-aig-ex...-wsj-2009-09-11

[flying]

I wonder what kind of skeletons this case would reveal

That Joe Cassano is quite the character & has much written about him.

Many would be very happy to see him in a world of pain

[midas]

I wonder what kind of skeletons this case would reveal

That Joe Cassano is quite the character & has much written about him.

Many would be very happy to see him in a world of pain

Who else can join him? I would like to see Paulson and Bernanke given a hard time as well

And look at this..........dropping like flies

I read somewhere it was 3 more but I dont know who the third one was

but is Corus a big one ? They are saying the cost to FDIC is $1.7 Billion.

http://www.fdic.gov/news/news/press/2009/pr09168.html

http://www.fdic.gov/news/news/press/2009/pr09170.html

[flying]

Who else can join him? I would like to see Paulson and Bernanke given a hard time as well

And look at this..........dropping like flies

I read somewhere it was 3 more but I dont know who the third one was

but is Corus a big one ? They are saying the cost to FDIC is $1.7 Billion.

http://www.fdic.gov/news/news/press/2009/pr09168.html

http://www.fdic.gov/news/news/press/2009/pr09170.html

Yeah every Friday I try to guess in the morning how many will fall.

I think a pattern is developing It will start to pick up speed soon.

I will not be surprised to break 170 before the end of the year.

Although even folks like Elizabeth Warren is saying it will be higher.

She is the chair of the Congressional Oversight Panel

I swear this will come back to be the bigger problem. While saving the too big too fail we are losing the winners & keeping the losers. It makes zero sense.

Anyone who saw Geithner speak the other day knows how bad this is about to get.

Edited September 12, 2009 by flying

[12DrinkMore]

The good old market oracle has issued a couple of long rants in the latest edition.

On consumer debt

http://www.marketoracle.co.uk/Article13294.html

it goes on a bit, and then some, but I have to admit he has a few points.

The underprivileged people in West Philadelphia don’t comprehend that politicians and bankers are actually keeping them entrapped in poverty by providing them with easy credit and persuading them that making perpetual payments for cars, TVs, and other material goods is a normal lifestyle. When reality sets in and these people stop making their payments, no trouble for them. As the financial system came crashing down due to the millions of bad loans made by the banking cartel, their protectors Hank (Goldman) Paulson and Ben (Helicopter) Bernanke funneled TRILLIONS of your tax dollars and your children’s tax dollars and their children’s tax dollars to the banks that committed these crimes. The poor people in West Philly don’t pay taxes, so they got to drive BMWs and watch 52 inch TVs for awhile, and are left relatively unscathed. The middle class is paying the bill, losing millions of jobs, while seeing their 401ks drop by 40% and they are still driving their 10 year old cars. Government now wants you to pay more so the poor will have health insurance when they get injured in a BMW accident.

On unemployment

http://www.marketoracle.co.uk/Article13351.html

And economics

http://www.marketoracle.co.uk/Article13370.html

Maybe Our Leaders have saved the economies from depression, but I'm sinking into my personal depression.

Time for another beer, it is Sunday after all.

[AlexLah]

It is not yet Sunday yet as I am typing.

White House economists said Thursday that the Obama administration's recovery efforts have saved or created more than 1 million jobs

So what is it,saved or created?

[12DrinkMore]

It is not yet Sunday yet as I am typing.

White House economists said Thursday that the Obama administration's recovery efforts have saved or created more than 1 million jobs

So what is it,saved or created?

Saturday :D

Oh dear!

And the jobs have probably been lost, as indeed, my sense of time.

http://www.bloomberg.com/apps/news?pid=206...id=aqmSRnQFVf2I

A Labor Department report last week showed the pace of job losses slowed in August, even as the unemployment rate rose to a 26-year high of 9.7 percent. Companies cut payrolls by 216,000 workers, after a 276,000 drop in July.

The number of Americans filing first-time claims for jobless benefits dropped last week to the lowest level since July, the Labor Department said yesterday. Applications fell by 26,000 to 550,000 in the week ended Sept. 5.

But no problem

The U.S. this quarter will emerge from the worst recession since the 1930s, economists say. The economy will grow at a 2.9 percent annual rate from July through September, according to the median of 61 estimates in a monthly Bloomberg News survey.

Wonder what substance these guys are abusing. But anyway, let's wait and see what the forecast from September to December holds.

Americans are starting to grow more upbeat after suffering the biggest destruction of wealth on record from a slump in stocks and home prices and companies are ramping up production to replenish stockpiles. Consumers may still be wary of increasing the spending that makes up 70 percent of the economy as they focus on building savings and paying down debt.

“We can be encouraged that consumer sentiment is healing,” said Jonathan Basile, an economist at Credit Suisse Holdings USA Inc. in New York, which at 70 had the closest forecast in the Bloomberg survey. “Good news continues to come through, bad news continues to diminish. It’s better, but it’s not good yet.”

The University of Michigan measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars and homes, rose to 71.8 from 66.6.

The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, increased to 69.2 from 65 in August.

Come on you GREAT AMERICAN CONSUMER, stop worrying and please, please, PLEASE get back to your only role in this world, BUY MORE STUFF, dam_n YOU, JUST BUY! The whole world and Goldman Sachs are right there waiting.

But it's now finally turned Sunday. How's the new job going?

[flying]

Come on you GREAT AMERICAN CONSUMER, stop worrying and please, please, PLEASE get back to your only role in this world, BUY MORE STUFF, dam_n YOU, JUST BUY! The whole world and Goldman Sachs are right there waiting.

But it's now finally turned Sunday. How's the new job going?

Or we could do like they did in the old days

The crisis in banking has distinguished depression from recession. The very term "Black Friday" comes from the Panic of 1869 when the mob was dragging bankers out of their offices and hanging them in New York. They had to send in troops to stop the riot.

I'm pretty sure posted before as it is old but I didn't want to quote without source

The Coming Great Depression

Martin Armstrong

http://www.silverbearcafe.com/private/09.09/hereitcomes.html

Edited September 12, 2009 by flying

[sokal]

The good old market oracle has issued a couple of long rants in the latest edition.

On consumer debt

http://www.marketoracle.co.uk/Article13294.html

it goes on a bit, and then some, but I have to admit he has a few points.

The underprivileged people in West Philadelphia don't comprehend that politicians and bankers are actually keeping them entrapped in poverty by providing them with easy credit and persuading them that making perpetual payments for cars, TVs, and other material goods is a normal lifestyle. When reality sets in and these people stop making their payments, no trouble for them. As the financial system came crashing down due to the millions of bad loans made by the banking cartel, their protectors Hank (Goldman) Paulson and Ben (Helicopter) Bernanke funneled TRILLIONS of your tax dollars and your children's tax dollars and their children's tax dollars to the banks that committed these crimes. The poor people in West Philly don't pay taxes, so they got to drive BMWs and watch 52 inch TVs for awhile, and are left relatively unscathed. The middle class is paying the bill, losing millions of jobs, while seeing their 401ks drop by 40% and they are still driving their 10 year old cars. Government now wants you to pay more so the poor will have health insurance when they get injured in a BMW accident.

On unemployment

http://www.marketoracle.co.uk/Article13351.html

And economics

http://www.marketoracle.co.uk/Article13370.html

Maybe Our Leaders have saved the economies from depression, but I'm sinking into my personal depression.

Time for another beer, it is Sunday after all.

I don't really agree with the idea that these consumers got conned in. If they are brain dead enough to take on that much debt then to hel_l with them. I liked pocketing my bank dividends from these stupid people just as much as the bankers like their paychecks.

[flying]

ABC reporting 1.5 Million descend on DC for Washington Tea Party today

Live on CSPAN right now

Edited September 12, 2009 by flying

[midas]

We can get a pretty clear picture from this assessment what is likely to happen

to house prices going forward Those with negative equity now may as well post the keys back

A Decade With No Income Gains

The typical American household made less money last year than the typical household made a full decade ago.

http://economix.blogs.nytimes.com/2009/09/...no-income-gain/

[midas]

Credit is the lifeblood of all modern monetary systems.

But debt, when it becomes excessive caused a deflationary collapse.

[teletiger]

ABC have since denounced this 1.5 million figure as "not coming from them". Others (MSMs) have put the figure at between 60/70,000.

Didn't Bambi's innaugeration have 1.5 million? Shouldn't be too hard to distinguish.

Regards.

[midas]

Another interesting article arguing why we are more likely to see

deflation rather than hyperinflation

http://www.financialsense.com/fsu/editoria.../2009/0909.html

[jcon]

deflation - bring it on!!!!

[teletiger]

Both is also a possibility. Deflation in descretionary items (stuff you need credit for ) and inflation in necessities, ie. cash items...food, clothing, energy, everyday items. Oo, Oo and don't forget cash for those extra taxes, Federal and State.

Regards.

[hhgz]

"I'm pretty sure posted before as it is old but I didn't want to quote without source"

Thanks for the terrific graph! It's great to see that the author copyrighted this nonsense, and that you find so wonderful. Hey, did you notice that neither the vertical nor horizontal axes have any numbers...you could make this graph mean anything you want it to. "Oh, did you see the falling line to the right mean the value of the dollar? Heavens no! It's to show the lowering dependence of the US economy to international funding of the deficit, so it's good news."

[AlexLah]

Another signal has been given............

Watch "The Numbers"

Muhahahahaaaaaaaaaaaaaaaa!!!!!!!!!!!

[Abrak]

Here is quite an interesting article on earnings growth compared to real GDP. Well it was interesting to me as it confirmed my inherent suspicion that earnings growth is inversely correlated to real GDP growth. ROE went from 16% to 3% between 1985 and 1997 in Thailand. Standard theory is that earnings grow in line with nominal GDP. If profits grew substantially faster they would event be GDP and if they grew substantially slower then the company would cease to exist.

http://bear.cba.ufl.edu/ritter/PBFJ2005.pdf

The work goes back 100 years.

They dont really give a reason but to me it is intuitive. Fast growing economies are driven by investment so as investment increases the ROE falls (if it didnt then investment would increase until it did.) Essentially profits to GDP remains roughly constant but capital accumulation is much faster. So slower growing economies tend to make greater returns.

One of the authors also did a study of returns from asset classes in 17 countries over the last 100 years and in each country the return on equities outstripped all other classes. The risk premium over cash has averaged 4.2%. Tell that to a Thai investor where the market peaked at 1782 on 4th January 1994.

[Abrak]

One of the authors also did a study of 17 countries between 1900 and end 2008 showing equity returns exceeded all other asset classes in all 17 countries (all other classes being cash, bills and bonds). The equity risk premium over bills was 4.2% and bonds 3.4% which seems higher than you would expect. But the outperformance is hardly surprising otherwise people wouldnt invest in them.

http://www.devriesinvestmentservices.nl/co...09_yearbook.pdf

I think if he had done a 25 year study bonds might have outperformed although that is clearly not sustainable.

One rather odd conclusion the other report comes up with is that future returns are not GDP growth dependent - so theoretically I guess if China grew at 3% or 10% your equity return would be the same. As I see it the basic argument is that productivity gains, technology gains etc accrue to the working population not to capital. (It doesnt take into account the derating that might happen.) High savings rates result in higher future real wages.

Edited September 13, 2009 by Abrak

[Abrak]

In 1989 534 banks failed.

[AlexLah]

Have a look at this one. http://www.wisevid.com/view_video.php?view...s0gvvkw0a61616#

[flying]

Incoming Tokyo government threatens split with US

http://www.telegraph.co.uk/news/worldnews/...it-with-US.html

Yukio Hatoyama, the leader of the Democratic Party of Japan, has caused alarm in Washington after publishing an article blaming the US for the ills of capitalism, the global economy and "the destruction of human dignity".

He also intends to examine an agreement that permits US warships to dock at Japanese ports, in violation of the nation's non-nuclear principles. Mr Hatoyama says he will also look again at the $6 billion cost faced by Japan to transfer thousands of US troops from their base in Okinawa to the Pacific island of Guam amid a wide-ranging review of the American military presence on Japanese soil.

His election campaign promised a more "independent" foreign policy from Washington and closer relations with Asian neighbours, including China. On Thursday, he repeated his intention to defy the US and end the Maritime Self-Defence Force's resupply mission in the Indian Ocean.

Mr Hatoyama will be sworn in on Wednesday after an historic victory that ended decades of near unbroken rule by the Liberal Democratic Party. He will have his first meeting with Barack Obama, the US president, at the United Nations on Sep 22.

The Pentagon reminded Japan of the expectations it faced as a "great power and one of the world's wealthiest countries". Geoff Morrell, a spokesman, said: "There is an international responsibility, we believe, for everyone to do their share, as best they can, to contribute to this effort to bring about a more peaceful and secure Afghanistan."

The Defence Department would not "prejudge" Japan's new political leadership, he added.

"We think that when the responsibility of governing comes about that people will appreciate, as we have every reason to believe they do, the importance of this alliance and the importance of working together on these [security] agreements," he said.

Makoto Watanabe, a professor of media and communication at Hokkaido Bunkyo University, said: "The US has been critical of new trends in Japan, but we are not a colony of Washington and we should be able to say what we want.

"The Japan-US relationship will remain our most important bilateral link, but while under previous governments Japan had become a yes-man to the US, this suggests to me that healthy change is taking place."

[flying]

In 1989 534 banks failed.

I think the main difference in up till 1989 there were 2 insurances FSLIC & FDIC

which were merged after 89 so it will all show up on FDIC. But really

1989 is mainly savings & loans

2009 is mainly commercial banks

I am not saying 1989 was not impressive. But it did not have anywhere near the same effect as what we are seeing now with less than 25% of the failures....so far

Edited September 13, 2009 by flying

[flying]

ABC have since denounced this 1.5 million figure as "not coming from them". Others (MSMs) have put the figure at between 60/70,000.

Didn't Bambi's innaugeration have 1.5 million? Shouldn't be too hard to distinguish.

Regards.

Zobama inauguration had 3.8 million second only to Ronald Regan's 2 million

I doubt this is 60k & where it may be less than 2 million it is estimated today by the police there were 1.2 mil...Who knows but there was a bunch of folks there.....Granted MSM is a mouthpiece for the Dems & Fox for the Repubs/libertarians

Saturday's "Tea Party" rally in Washington, D.C. far exceeded almost all expectations. Local police agencies estimated around 1.2 million people attended the rally, but several news outlets, including ABC and Fox News, said the crowd was nearly double that, with an estimated 2 million people in attendance.

This pic shows how far back down Pennsylvania avenue it goes. That is a lot of folks..

On Friday the White House claimed they had no idea the rally was even planned. A ridiculous assertion that shows how dismissive the Obama administration and the Democrat-led Congress are of those who oppose their agenda. It is impossible to believe that President Obama knew nothing of the event. The denial is a perfect example of why the President is losing the trust of many Americans. He stretches his credibility to its limits, and beyond.

I do not think they will be able to say the same come April when the next one coincides with Tax Time

http://www.dailymail.co.uk/news/worldnews/...onstration.html

http://www.foxnews.com/politics/2009/09/12...test=latestnews

http://www.moonbattery.com/archives/2009/0..._on_washin.html

Edited September 13, 2009 by flying

[midas]

In 1989 534 banks failed.

2009 is mainly commercial banks

I am not saying 1989 was not impressive. But it did not have anywhere near the same effect as what we are seeing now with less than 25% of the failures....so far

This is also supported by what Keefe Bruyette Woods Bank Index (KBW) says ( it has 24 bank stocks)

which has fallen some 80% from its peak in February 2007.

This is almost exactly the same decline financial stocks experienced in 1929 to 1933.

http://www.kbw.com/research/BKX.asp

[midas]

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

http://www.bloomberg.com/apps/news?pid=206...id=a7UTn7JFw1qk

[flying]

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

http://www.bloomberg.com/apps/news?pid=206...id=a7UTn7JFw1qk

What a surprise eh? NOT !!!

It was obvious as soon as Paulson pulled the bait & switch

Whip everyone into a frenzy to sign the bail out saying toxic assets needed to be settled. Then after signed bail out is in hand switch it to a direct infusion into the chosen banks & who knows where else...... Is it a surprise the markets went up?

Is it any surprise that almost a year later in Geithners recent report to the oversight panel he still cannot say what amount of these supposed to be dealt with originally still stand or if any have even been dealt with. No but he CAN say the chosen banks have more capital. Hmmm there is something we could never have figured on our own.

There is no more to hope for when you can see with your own eyes & hear with your own ears the stammering testimony. This thing is FUBAR..... It is no wonder that Japan, China & others will jump ship ASAP...Not that anyone can get clear of the whirlpool this sinking mess will ultimately create.

[midas]

Both is also a possibility. Deflation in descretionary items (stuff you need credit for ) and inflation in necessities, ie. cash items...food, clothing, energy, everyday items. Oo, Oo and don't forget cash for those extra taxes, Federal and State.

Regards.

This is NYC, mind you, formerly high-roller capital of the Western World.

The implication is, you don't have to "stretch" to the $20 withdrawal, but can "downscale" to the $10

because you're broke.