Financial Crisis

[ronz28]

Meredith Whitney cut Goldman Sachs to “neutral.” Let's see if that is the catalyst that will trigger the "correction" in the over-bought markets that is overdue.

[sokal]

To me the Euro is an abortion of a currency. The UK in particular I believe has benefited substantially by not joining the Euro. A single currency means applying the same monetary policy across disparate nations. This led to unsustainable bubbles in Ireland, Spain and Eastern Europe.

To the extent you argue that say Germany's economy will lead to an appreciation of the Euro you are also predicting a banking collapse caused by the US$1.8trn of euro debt in Eastern Europe.

Look at say Latvia, by pegging itself to the Euro and maintaining the peg, rather than devalue its currency, it has devalued its economy which is forecast to shrink more than 15% in real terms. To me they should have sacrificed the currency.

So personally I dont think the Euro is actually working. I think it might simply disintegrate.

I agree, it has its problems but the US has bigger problems. The EU already has higher interest rates then the Fed. California and Florida are bigger problems for the US then Spain or Ireland is for the Euro.

[sokal]

bank failures now happening in Europe

http://news.my.msn.com/business/article.as...umentid=3635837

Wow

DSB account holders withdrew some 600 million euros in recent weeks, DNB president Nout Wellink was quoted as saying by Dutch news agency ANP -- about a sixth of all the savings still with the bank.

Savers would be able to claim back up to 100,000 euros under a government deposit guarantee system, to be administered by the DNB, "probably in the short term."

I love the spin these bankers put on the situation. The bank went broke" due to a large outflow of liquidity "

[Naam]

BTW when I say disintegrate, I do not mean that Latvia may depeg, I mean that Germany might depeg. Germany is particularly unsuited to be the core of a single currency because, in general, it persues economic discipline. The dollar is much more suited.

All Germany is doing is exporting growth and paying for others economic excesses.

i wish Germany was depegging and introduce the good old Deutsche Mark again. unfortunately the Germans will be the last ones to depeg

[BEENTHEREDONETHAT]

CIVIL UNREST!

Looks like he was right again!

Nostradamus predicted all of this....the end of the world is near!

Goodie, front row seats & normally I miss all the exciting world events.

Hey Neverdie, good to have you back. Are you done bush bashing for now?

Things were getting boring here.

[Abrak]

i wish Germany was depegging and introduce the good old Deutsche Mark again. unfortunately the Germans will be the last ones to depeg

So why do you think that? I cant think the Euro is doing them any good. In fact I am not sure it does anyone any good given it distorts monetary policy (I mean Ireland and Spain didnt exactly create a bubble like the US, they were forced to). You obviously dont think it is doing them much good. So is it financial conquest? Or maybe a feeling that Germany has some sort of social conscience and responsibility?

I mean at least Spain and Ireland got a boom before the bust. I just dont see what is in it for Germany.

[Naam]

i wish Germany was depegging and introduce the good old Deutsche Mark again. unfortunately the Germans will be the last ones to depeg

So why do you think that? I cant think the Euro is doing them any good. In fact I am not sure it does anyone any good given it distorts monetary policy (I mean Ireland and Spain didnt exactly create a bubble like the US, they were forced to). You obviously dont think it is doing them much good. So is it financial conquest? Or maybe a feeling that Germany has some sort of social conscience and responsibility?

I mean at least Spain and Ireland got a boom before the bust. I just dont see what is in it for Germany.

various reasons do exist. german exporters suffer because of a strong €UR but a number of anals think that abolishing the common currency would make a revived DEM even stronger. another reason is that architects are known not to destroy what they built.

[midas]

A " novel " way to deliver this message

END THE FED

This may be the effective catalyst to getting the sheeple thinking about this issue.....i.e get the musicians to

deliver the message:P

Do i detect intolerance starting to build up here ?

Neal Fox beep beep The Fed

[AlexLah]

NEWSFLASH!!!!!!

[flying]

[Abrak]

Here is an interesting speech by Ben Bernanke made in Japan.

http://www.federalreserve.gov/BoardDocs/Sp...531/default.htm

I guess it only reinforces his conviction to inflation and the need to impose negative real interest rates.

[Naam]

Here is an interesting speech by Ben Bernanke made in Japan.

http://www.federalreserve.gov/BoardDocs/Sp...531/default.htm

I guess it only reinforces his conviction to inflation and the need to impose negative real interest rates.

i am lost Abrak. english is my third language. please be kind enough and define "conviction to inflation" as i don't want to waste my time reading Bernanke's speech.

[Abrak]

Here is an interesting speech by Ben Bernanke made in Japan.

http://www.federalreserve.gov/BoardDocs/Sp...531/default.htm

I guess it only reinforces his conviction to inflation and the need to impose negative real interest rates.

i am lost Abrak. english is my third language. please be kind enough and define "conviction to inflation" as i don't want to waste my time reading Bernanke's speech.

Indeed, a definitive end to the deflation in consumer prices--by restoring confidence and stimulating spending--would do much to help moderate the unemployment and financial distress.

Finally, and most important, I will consider one possible strategy for ending the deflation in Japan: explicit, though temporary, cooperation between the monetary and the fiscal authorities.

First, the BOJ's statement seems to imply that the current level of policy stimulus might start to be withdrawn as soon as measured inflation returns to zero; in particular, no explicit commitment has been made to maintain inflation at zero, much less at some positive rate, in the longer run.

Moreover, inflation above zero will be needed if real interest rates in Japan are to be negative for a period, as many observers think is necessary for full recovery.

For Japan, given the recent history of costly deflation, however, an inflation target may not go far enough. A better strategy for Japanese monetary policy might be a publicly announced, gradually rising price-level target.

During the first stage, the inflation rate would exceed the long-term desired inflation rate, as the price-level gap was eliminated and the effects of previous deflation undone. Call this the reflationary phase of policy. Second, once the price-level target was reached, or nearly so, the objective for policy would become a conventional inflation target or a price-level target that increases over time at the average desired rate of inflation.3

I think the BOJ should consider a policy of reflation before re-stabilizing at a low inflation rate primarily because of the economic benefits of such a policy. One benefit of reflation would be to ease some of the intense pressure on debtors and on the financial system more generally. Since the early 1990s, borrowers in Japan have repeatedly found themselves squeezed by disinflation or deflation, which has required them to pay their debts in yen of greater value than they had expected. Borrower distress has affected the functioning of the whole economy, for example by weakening the banking system and depressing investment spending.

These authors point out (as have many others) that, when nominal interest rates are at or near zero, the central bank can lower the real rate of interest only by creating expectations of inflation on the part of the public.

Thus, failure by the central bank to meet its target in a given period leads to expectations of (and public demands for) increased effort in subsequent periods--greater quantities of assets purchased on the open market, for example. So even if the central bank is reluctant to provide a time frame for meeting its objective, the structure of the price-level objective provides a means for the bank to commit to increasing its anti-deflationary efforts when its earlier efforts prove unsuccessful.

Eggertsson and Woodford show, the expectation that an increasing price level gap will give rise to intensified effort by the central bank should lead the public to believe that ultimately inflation will replace deflation, a belief that supports the central bank's own objectives by lowering the current real rate of interest.

Other strategies for the central bank acting alone exist, including buying alternative assets to try to lower term or liquidity premiums and attempting to influence expectations of future inflation through announcements or commitments to expand the monetary base.

In short, to strengthen the effects of fiscal policy, it would be helpful to break the link between expansionary fiscal actions today and increases in the taxes that people expect to pay tomorrow.

Of course, one can never get something for nothing; from a public finance perspective, increased monetization of government debt simply amounts to replacing other forms of taxes with an inflation tax.

Addressing the deflation problem would bring substantial real and psychological benefits to the Japanese economy, and ending deflation would make solving the other problems that Japan faces only that much easier.

Perhaps I should have limited to only two quotes - one stating that he wished to inflate away private debt and one in which he wishes to inflate away public debt. I may have reprinted half his speech but you have to agree he shows conviction.

[Naam]

Perhaps I should have limited to only two quotes - one stating that he wished to inflate away private debt and one in which he wishes to inflate away public debt. I may have reprinted half his speech but you have to agree he shows conviction.

thanks, i agree although i'm not convinced that his plan will be successful. as an investor i'm not really concerned. neither deflation nor inflation happens overnight. there was always and there will be enough time to adjust accordingly. presently i am betting on both horses. one will most probably win. and if there is no winner... so be it.

[Abrak]

Perhaps I should have limited to only two quotes - one stating that he wished to inflate away private debt and one in which he wishes to inflate away public debt. I may have reprinted half his speech but you have to agree he shows conviction.

thanks, i agree although i'm not convinced that his plan will be successful. as an investor i'm not really concerned. neither deflation nor inflation happens overnight. there was always and there will be enough time to adjust accordingly. presently i am betting on both horses. one will most probably win. and if there is no winner... so be it.

I am not making any big bets either way.

But as a more sort of bond holder you dont see deflation as value destructive (anyway that is my guess). Many economists see it is as the most destructive force in economics. And Bernanke has sort of built his reputation on that. So he has mentioned in the past essentially hyper inflation as a better alternative to deflation.

So he will implode the dollar rather than deflate.

But his commitment to negative real rates is not good for bond holders or equity holders or asset holders of any sort.

[sokal]

Perhaps I should have limited to only two quotes - one stating that he wished to inflate away private debt and one in which he wishes to inflate away public debt. I may have reprinted half his speech but you have to agree he shows conviction.

thanks, i agree although i'm not convinced that his plan will be successful. as an investor i'm not really concerned. neither deflation nor inflation happens overnight. there was always and there will be enough time to adjust accordingly. presently i am betting on both horses. one will most probably win. and if there is no winner... so be it.

I am not making any big bets either way.

But as a more sort of bond holder you dont see deflation as value destructive (anyway that is my guess). Many economists see it is as the most destructive force in economics. And Bernanke has sort of built his reputation on that. So he has mentioned in the past essentially hyper inflation as a better alternative to deflation.

So he will implode the dollar rather than deflate.

But his commitment to negative real rates is not good for bond holders or equity holders or asset holders of any sort.

Yes Bernanke has picked his poison, it is inflation. I would think Gold and mining shares would be good assets to hold.

[Abrak]

Perhaps I should have limited to only two quotes - one stating that he wished to inflate away private debt and one in which he wishes to inflate away public debt. I may have reprinted half his speech but you have to agree he shows conviction.

thanks, i agree although i'm not convinced that his plan will be successful. as an investor i'm not really concerned. neither deflation nor inflation happens overnight. there was always and there will be enough time to adjust accordingly. presently i am betting on both horses. one will most probably win. and if there is no winner... so be it.

I am not making any big bets either way.

But as a more sort of bond holder you dont see deflation as value destructive (anyway that is my guess). Many economists see it is as the most destructive force in economics. And Bernanke has sort of built his reputation on that. So he has mentioned in the past essentially hyper inflation as a better alternative to deflation.

So he will implode the dollar rather than deflate.

But his commitment to negative real rates is not good for bond holders or equity holders or asset holders of any sort.

Yes Bernanke has picked his poison, it is inflation. I would think Gold and mining shares would be good assets to hold.

Actually Sokal,

The US picked Bernanke and he implemented policies that he had long advocated.

So if you believe his policies (in general) mistaken, then responsibility should rest with the people who chose him not for him implementing policy. It just seems illogical to accuse one of the world's leading inflationists of implementing inflationary policies. He has been very specific and clear about his agenda for many years. As Naam pointed out deflationists may have the last laugh.

[flying]

The US picked Bernanke and he implemented policies that he had long advocated.

So if you believe his policies (in general) mistaken, then responsibility should rest with the people who chose him not for him implementing policy.

I would say that is stretching it a bit.

The Prez Zobama appoints him & then the senate banking committee has to confirm him.

I posted a few days back at the attempt to block this confirmation. I whole heartily agree & like both Paul & Grayson. Wish there were more like them.Meaning Rep's who have a clue & are not afraid to ask the pertinent questions.

http://blogs.wsj.com/economics/2009/10/07/...e-confirmation/

Edited October 14, 2009 by flying

[midas]

The US picked Bernanke and he implemented policies that he had long advocated.

So if you believe his policies (in general) mistaken, then responsibility should rest with the people who chose him not for him implementing policy.

I would say that is stretching it a bit.

The Prez Zobama appoints him & then the senate banking committee has to confirm him.

I posted a few days back at the attempt to block this confirmation. I whole heartily agree & like both Paul & Grayson. Wish there were more like them.Meaning Rep's who have a clue & are not afraid to ask the pertinent questions.

http://blogs.wsj.com/economics/2009/10/07/...e-confirmation/

" I would say that is stretching it a bit" here here !

I dont think many people if given the chance would have agreed to re-appoint a man that obviously has such a poor handle on things “I Don’t Know” Which Foreign Banks Were Given Half a Trillion "

Anyway if the blocking of the confirmation doesn't work there is always the ongoing investigations by

Attorney General Andrew Cuomo – see what that turns up.

[midas]

oh dear doesnt look like the mortgage situation in US

is going to be sorted out soon

NEWSFLASH.........everyone can just stay in their home and dont worry about paying

60 Million Mortgages May Have Fatal Flaws

The latest chapter in the mortgage meltdown is being written in court, as one by one, judges are putting a halt to foreclosures. The latest was a recent Kansas Supreme Court case. In Landmark National Bank v. Kesler, the court held that a nominee company called MERS had no standing to bring a foreclosure action.

http://rismedia.com/2009-09-28/op-ed-60-mi...ve-fatal-flaws/

Edited October 15, 2009 by midas

[flying]

Dollar to Hit 50 Yen, Cease as Reserve, Sumitomo Says

Oct. 15 (Bloomberg) -- The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.’s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.

“The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger,” said Daisuke Uno at Sumitomo Mitsui, a unit of Japan’s third- biggest bank. “The dollar’s fall won’t stop until there’s a change to the global currency system.”

The dollar last week dropped to the lowest in almost a year against the yen as record U.S. government borrowings and interest rates near zero sapped demand for the U.S. currency. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, has fallen 15 percent from its peak this year to as low as 75.211 today, the lowest since August 2008.

The gauge is about five points away from its record low in March 2008, and the dollar is 2.5 percent away from a 14-year low against the yen.

“We can no longer stop the big wave of dollar weakness,” said Uno, who correctly predicted the dollar would fall under 100 yen and the Dow Jones Industrial Average would sink below 7,000 after the bankruptcy of Lehman Brothers Holdings Inc. last year. If the U.S. currency breaks through record levels, “there will be no downside limit, and even coordinated intervention won’t work,” he said.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency. Hossein Ghazavi, Iran’s deputy central bank chief, said on Sept. 13 the euro has overtaken the dollar as the main currency of Iran’s foreign reserves.

Elliott Wave

The greenback is heading for the trough of a super-cycle that started in August 1971, Uno said, referring to the Elliot Wave theory, which holds that market swings follow a predictable five-stage pattern of three steps forward, two steps back.

The dollar is now at wave five of the 40-year cycle, Uno said. It dropped to 92 yen during wave one that ended in March 1973. The dollar will target 50 yen during the current wave, based on multiplying 92 with 0.764, a number in the Fibonacci sequence, and subtracting from the 123.17 yen level seen in the second quarter of 2007, according to Uno.

The Elliot Wave was developed by accountant Ralph Nelson Elliott during the Great Depression. Wave sizes are often related by a series of numbers known as the Fibonacci sequence, pioneered by 13th century mathematician Leonardo Pisano, who discerned them from proportions found in nature.

Uno said after the dollar loses its reserve currency status, the U.S., Europe and Asia will form separate economic blocs. The International Monetary Fund’s special drawing rights may be used as a temporary measure, and global currency trading will shrink in the long run, he said.

http://www.bloomberg.com/apps/news?pid=206...id=a_A5nqmw9Dq8

[Naam]

The dollar is now at wave five of the 40-year cycle, Uno said. It dropped to 92 yen during wave one that ended in March 1973.

Bloomie journàsslists repeat and publish any bullshit presented to them without doing one iota of own research.

for the record: one U.S. Dollar fetched begin of 1973 ~300 ¥EN and end of 1973 ~280 ¥EN

[flying]

for the record: one U.S. Dollar fetched begin of 1973 ~300 ¥EN and end of 1973 ~280 ¥EN

That is correct & such a big error I wonder if they misprinted? Left off the 261.90

Or did they mean 1993? But even then it was 117? odd....but good catch

[midas]

please someone explain why Bernie Madoff must go to jail but

Geithner and Paulson don't what is the difference ?

William K. Black - professor of economics and the senior regulator during the S & L crisis - says that that the government's entire strategy now - as during the S&L crisis - is to cover up how bad things are ("the entire strategy is to keep people from getting the facts").

Indeed, as I have previously documented, 7 out of the 8 giant, money center banks went bankrupt in the 1980's during the "Latin American Crisis", and the government's response was to cover up their insolvency.

Geithner is ... covering up. Just like Paulson did before him....

These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed....

Until you get the facts, it's harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts....

Black also says:

There has been no honest examination of the crisis because it would embarrass C.E.O.s and politicians . . .

Instead, the Treasury and the Fed are urging us not to examine the crisis and to believe that all will soon be well.

If I had a world of my own, everything would be nonsense.

Nothing would be what it is, because everything would be what it isn't.

And contrary wise, what is, it wouldn't be. And what it wouldn't be, it

would. You see? :Alice in Wonderland

[midas]

The power of the internet ……the sheeple are being armed with information ……..

the banksters shouldn’t rely too much on always being able to foreclose- sweet revenge

Helpful Guide For All States on how to research your recorded documents at county recorder and determine if there are forgeries or fraud when facing foreclosure. The evidence may help you stop your foreclosure or set aside a foreclosure. Forgery is illegal & criminal. More and more evidence in coming forth which indicates some of the notorious predatory lenders took shortcuts and did illegal document recordings and some with forgeries. Even though screen shots are from Florida counties, the information can be used in any state and for any county recorder.

http://www.scribd.com/doc/20916919/Foreclo...cords-for-Fraud

[BEENTHEREDONETHAT]

If there is no deed on your property, how can you sell it? Paid for or not.

[midas]

If there is no deed on your property, how can you sell it? Paid for or not.

Exactly ! But i think selling is far more urgent for many of the financiers than the occupiers

But yes it is a complete mess and even if there some resolution in the court system eventually,

that is not likely to happen quickly either

[midas]

The US picked Bernanke and he implemented policies that he had long advocated.

So if you believe his policies (in general) mistaken, then responsibility should rest with the people who chose him not for him implementing policy.

I would say that is stretching it a bit.

The Prez Zobama appoints him & then the senate banking committee has to confirm him.

I posted a few days back at the attempt to block this confirmation. I whole heartily agree & like both Paul & Grayson. Wish there were more like them.Meaning Rep's who have a clue & are not afraid to ask the pertinent questions.

http://blogs.wsj.com/economics/2009/10/07/...e-confirmation/

flying, have you seen this.. Its getting interesting

Alan Grayson is taking his initiative to delay Bernanke's nomination direct to the people, and here is your chance to be heard

" Chairman of the Federal Reserve, Ben Bernanke, is up for confirmation to his second term, but he has still refused to disclose where he sent $2 trillion in taxpayers' money. Send a message to your Senators and ask them to make Bernanke come clean before his confirmation moves forward! "

http://www.unmaskthefed.com/

[midas]

If there is no deed on your property, how can you sell it? Paid for or not.

Exactly ! But i think selling is far more urgent for many of the financiers than the occupiers

But yes it is a complete mess and even if there some resolution in the court system eventually,

that is not likely to happen quickly either

the implication would be that many residents living on the edge now simply

stop paying their mortgage and claim squatter's rights in their own homes.

Actually as this unfolds it looks so serious that the consensus is that it may

have to be referred to the US Supreme Court to be resolved

This is the full text of the ruling by Justice Keith C. Long, which affirmed his own

March decision that invalidated foreclosure proceedings involving two Springfield

homes because the lenders did not hold clear titles to the properties at the time of sale.

This is fascinating stuff

http://www.boston.com/business/articles/20...5/ibanezruling/

[flying]

flying, have you seen this.. Its getting interesting

http://www.unmaskthefed.com/

Thanks copied text & sent directly to my reps