Financial Crisis

[flying]

China's Dumping Of The Dollar Has Begun

Bit of sensationalism title..... but they have some nice graphs

[sokal]

China's Dumping Of The Dollar Has Begun

Bit of sensationalism title..... but they have some nice graphs

Here is what the BOC's Zhu Min said earlier:

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

"The US current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," he added. "The world does not have so much money to buy more US Treasuries."

[12DrinkMore]

Here's a good'un from the the BoE

http://www.independent.co.uk/news/business...rt-1844207.html

Modest restraint by the banks during the boom years over bumper bonuses and dividends would have spared taxpayers the cost of recapitalising them during the financial crisis, the Bank of England says.

The words "modest" and "restraint" do not even exist in the "square mile".

But hey! Optimism flourishes

However, the Bank also points to more hopeful signs. The destruction of financial wealth as a result of the crisis is now down to $6.3trn (£3.9trn), against peak losses of $24.3trn (£15trn) at the height of the credit crunch.

But I am suspicious there is a lot of smoke and mirrors in the great corridors of banking. And what does this mean?

"Valuations in some financial markets are vulnerable to such a reappraisal. For example, an increase of one percentage point in long-term real interest rates or UK equity risk premia would be consistent with a fall in equity prices in the UK of around 16 per cent."

Surely they are not suggesting that all the QE and ZIRP is propping up the the FTSE by over 50%? Stand by for the implosion if that is the case.

The Irish are slowly making a comeback from the brink.

http://www.independent.co.uk/news/business...pe-1844208.html

Last week's austerity budget, delivered by the Finance minister Brian Lenihan, went much further than the British Chancellor's contemporaneous statement in London. Mr Lenihan announced plans to cut public pay by 5 to 15 per cent and announced a property tax.

And across the Irish Channel, where they are digging even deeper into the brown stuff, what did the man with the same name and smell do? Yes! Increase public sector pay by another inflation busting increment. So drinks all around boys, we'll buy our way into staying at the helm of the wallowing wreck, "Great Britannia", where the waves we used to rule have turned in waves of debt lapping at Captain Bruin's cabin.

And what is the outlook for that bastion of British passion and pride, oh no, not the housing market again?

http://www.independent.co.uk/news/business...st-1844211.html

I do get irritated when I read such bullshit as

"So, while the Government cannot afford to go on stimulating the bottom end of the housing market indefinitely, there is an argument for extending the stamp duty tax break until more normality returns to the mortgage market and higher loans-to-value become easier to find"

Long term normality is a mortgage of around 3 times salary and a ten per cent deposit. Mr Prosser should try and get his head around that. With the number of first time buyers dropping radically, it seems like an ominous sign that the first few rungs on the "housing ladder" are likely to fall off, bringing the whole ladder down with them.

[flying]

And what is the outlook for that bastion of British passion and pride, oh no, not the housing market again?

"So, while the Government cannot afford to go on stimulating the bottom end of the housing market indefinitely, there is an argument for extending the stamp duty tax break until more normality returns to the mortgage market and higher loans-to-value become easier to find"

Do you happen to know what the foreclosure numbers are there?

I would be curious to know...

I was recently surprised to see the numbers in the US....

Over 300,000 foreclosures per month for 9 months straight now.

[teletiger]

"higher loans-to-value become easier to find"

Presuming responsible lenders won't start up that merry-go-round again, the only other alternative is lower prices. Much lower.

Unless someone wants to suggest higher wages. I need a good laugh.

Regards.

[lannarebirth]

"higher loans-to-value become easier to find"

Presuming responsible lenders won't start up that merry-go-round again, the only other alternative is lower prices. Much lower.

Unless someone wants to suggest higher wages. I need a good laugh.

Regards.

There's no such thing as a responsible lender unless they're carrying the paper themselves.

[Abrak]

And what is the outlook for that bastion of British passion and pride, oh no, not the housing market again?

"So, while the Government cannot afford to go on stimulating the bottom end of the housing market indefinitely, there is an argument for extending the stamp duty tax break until more normality returns to the mortgage market and higher loans-to-value become easier to find"

Do you happen to know what the foreclosure numbers are there?

I would be curious to know...

I was recently surprised to see the numbers in the US....

Over 300,000 foreclosures per month for 9 months straight now.

UK foreclosures are expected to be about 50,000 for 2009.

http://www.housingwire.com/2009/11/12/uk-f...-than-expected/

[flying]

"higher loans-to-value become easier to find"

Presuming responsible lenders won't start up that merry-go-round again, the only other alternative is lower prices. Much lower.

Unless someone wants to suggest higher wages. I need a good laugh.

Regards.

There's no such thing as a responsible lender unless they're carrying the paper themselves.

Credit Unions here do carry their own .

Do not sell their loans

[12DrinkMore]

We seem to be lacking in doom forecasts recently on this thread. How's about this list from the Danes to provide some thought over the holiday period?

"Saxo Bank Releases "Outrageous Predictions" for 2010"

http://finance.yahoo.com/news/Saxo-Bank-Re...ersonal-finance

[lannarebirth]

We seem to be lacking in doom forecasts recently on this thread. How's about this list from the Danes to provide some thought over the holiday period?

"Saxo Bank Releases "Outrageous Predictions" for 2010"

http://finance.yahoo.com/news/Saxo-Bank-Re...ersonal-finance

None of those predictions seems particularly outrageous to me, except for maybe the US Trade Balance turning positive. That too is possible but it would require an energy policy, which doesn't appear to be forthcoming. I think the SS going bust is a given and would likely be bullish for $USD IMO.

Edited December 18, 2009 by lannarebirth

[flying]

We seem to be lacking in doom forecasts recently on this thread.

Well here is one & from your side of the pond

A New World War for a New World Order, The Origins of World War III

[midas]

I was recently surprised to see the numbers in the US....

Over 300,000 foreclosures per month for 9 months straight now.

flying when they say " Fannie Freddie May Need Another $400 Billion Taxpayer Assistance "

do you know if that means $400 Billion each i.e $800 Billion ?

Edited December 18, 2009 by midas

[lannarebirth]

Yes, I am fuc_king disgusted and mad over all this bullshit. This is all total crap. The only sustainable increase in wealth is through human endeavours in the production of goods or the extraction of raw materials. All the rest is a parasitic disease on society.

I am too 12 ! Yes going back in front of the computer terminals to resume " _day trading ' straight after

all this was revealed reminded me of how some people react by looting after a natural disaster......

HALLELUJAH... AMEN. PRAISE THE LORD! THE RIGHTEOUS non-PARASITIC ONES WILL GO TO PARADISE... and work in the celestial ricefields.

If you don't mind, I prefer carrion feeder.

[Naam]

We seem to be lacking in doom forecasts recently on this thread. How's about this list from the Danes to provide some thought over the holiday period? "Saxo Bank Releases "Outrageous Predictions" for 2010"

i liked this one the best:

"CNY (China Yuan Renminbi) will be devalued by 5% vs. USD"

[Naam]

Yes, I am fuc_king disgusted and mad over all this bullshit. This is all total crap. The only sustainable increase in wealth is through human endeavours in the production of goods or the extraction of raw materials. All the rest is a parasitic disease on society.

I am too 12 ! Yes going back in front of the computer terminals to resume " _day trading ' straight after all this was revealed reminded me of how some people react by looting after a natural disaster......

HALLELUJAH... AMEN. PRAISE THE LORD! THE RIGHTEOUS non-PARASITIC ONES WILL GO TO PARADISE... and work in the celestial ricefields.

If you don't mind, I prefer carrion feeder.

you are going to héll LRB because you look like me at more than one screen! (i assume)

[Abrak]

And BTW, I think you guys should understand how painful it can get when things go badly wrong....

[teletiger]

If you don't mind, I prefer carrion feeder.

Leave a bit of room there Lanna. 2010 promises to be bountiful.

Regards.

[flying]

I was recently surprised to see the numbers in the US....

Over 300,000 foreclosures per month for 9 months straight now.

flying when they say " Fannie Freddie May Need Another $400 Billion Taxpayer Assistance "

do you know if that means $400 Billion each i.e $800 Billion ?

Dont know Midas.. I did see this

http://curiouscapitalist.blogs.time.com/20...-and-continues/

But have you seen Citigroup is suspending foreclosures for 30 days?

Nice how their PR guys spin it into a xmas gift here.... but the reality is of course it is to benefit their books for the year.

They are on the ropes themselves.

[flying]

http://eclipptv.com/viewVideo.php?video_id=8124

[12DrinkMore]

http://eclipptv.com/viewVideo.php?video_id=8124

Well, thank you so very much for posting that. It has highlighted what a mess the idiots that have been voted into power have created. I despair.

I am now so utterly pissed off, I am sure the Thai brewing industry will notice a steep increase in alcohol consumption.

[flying]

http://eclipptv.com/viewVideo.php?video_id=8124

Well, thank you so very much for posting that. It has highlighted what a mess the idiots that have been voted into power have created. I despair.

I am now so utterly pissed off, I am sure the Thai brewing industry will notice a steep increase in alcohol consumption.

Your Welcome

If it makes you feel a little better.....8 More banks closed down today...so far

Those are 8 main branches not counting all their satellites.

For instance the first one on the list of failed today banks....

First Federal Bank of California

Had 39 branches but of course for some it is probably a puppy of a bank

First Federal Bank of California had approximately $6.1 billion in total assets and $4.5 billion in total deposits.

But you know....a billion here a billion there...a trillion...12 trillion....14 trillion

Pretty soon we are talking serious money

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

Edited December 19, 2009 by flying

[12DrinkMore]

If it makes you feel a little better.....8 More banks closed down today...so far

I have a bit of a headache today. Must have overdone it yesterday.

http://www.bloomberg.com/apps/news?pid=206...8FA0E&pos=7

Looks like the FDIC is preparing to ramp up its operation next year.

Earlier this week, the FDIC boosted its 2010 budget by 56 percent to $4 billion to manage further shutdowns. The total budget will increase from $2.6 billion and the set-aside for bank failures doubles to $2.5 billion over this year, according to a proposal approved by the FDIC board. The agency staff will increase to 8,653 next year from 7,010 this year.

‘Larger Number’ of Failures

The budget “will ensure that we are prepared to handle an ever-larger number of bank failures next year, if that becomes necessary,” FDIC Chairman Sheila Bair said in a statement. Today’s bank closings will cost the agency about $1.8 billion, according to the FDIC statements.

More misery on the way.

I do wish that the media could be more precise over who is paying for all this.

Today’s bank closings will cost the agency about $1.8 billion

Should surely read

Today’s bank closings will cost the tax payers about $1.8 billion

[flying]

I have a bit of a headache today. Must have overdone it yesterday.

Looks like the FDIC is preparing to ramp up its operation next year.

Earlier this week, the FDIC boosted its 2010 budget by 56 percent to $4 billion to manage further shutdowns. The total budget will increase from $2.6 billion and the set-aside for bank failures doubles to $2.5 billion over this year, according to a proposal approved by the FDIC board. The agency staff will increase to 8,653 next year from 7,010 this year.

‘Larger Number’ of Failures

The budget “will ensure that we are prepared to handle an ever-larger number of bank failures next year, if that becomes necessary,” FDIC Chairman Sheila Bair said in a statement. Today’s bank closings will cost the agency about $1.8 billion, according to the FDIC statements.

More misery on the way.

I do wish that the media could be more precise over who is paying for all this.

Today’s bank closings will cost the agency about $1.8 billion

Should surely read

Today’s bank closings will cost the tax payers about $1.8 billion

Yes sorry I seem to have counted wrong ...7 Banks not 8...Hey maybe they re-opened one

You know the whole FDIC/FED deal is pretty sweet eh?

I mean they just go get more paper to replace the fallen.

Or the FED for instance......Print...sell treasuries/debt to supposedly give the fiat power/backing

Yet when buyers are a no show or weak...They send in their own buyers. How's that for a racket.

Since their buyers are buying with ....guess what? Yep you got it I'm sure.

But as you say who will ultimately pick up the tab? Yes your right it will be the tax payers/slaves of course.

Edited December 19, 2009 by flying

[flying]

PS: I think this part of it will ultimately be the straw that breaks the FDIC's back

U.S. lenders are buckling under the weight of loans tied to commercial real estate, which is plummeting in value. Prices have dropped 43 percent from their peak in October 2007, Moody’s Investors Service said last month.

[midas]

Dont know Midas.. I did see this

http://curiouscapitalist.blogs.time.com/20...-and-continues/

I know it it's only $400 Billion more but I am intrigued why some news sources are

quoting " Fannie Freddie May Need Another $400 Billion" while other news sources are

saying " Fannie Freddie May each want 400b before years end ".

But then what's 400 billion theses days..........only 200 billion short of a trillion -I just hope US

citizens are keeping a tab on how Obama is spending all those trillions

[12DrinkMore]

Here are three excellent papers/speeches on the banking crisis, written by Andy Haldane of the Bank of England.

http://www.bankofengland.co.uk/publication...9/speech409.pdf

http://www.bankofengland.co.uk/publication...9/speech400.pdf

http://www.bankofengland.co.uk/publication...9/speech397.pdf

Include a lot of interesting ratios for Abrak and how they have changed over the last hundred years plus.

More papers here

http://www.bankofengland.co.uk/publication...ker.htm#haldane

[teletiger]

3 of the latest 7 failed banks didn't get taken over. So, whilst the deposits were insured, accessing those funds will take a while, new accounts to be opened, direct debits screwed, late/no payment fees etc, all at a very handy time of year.

Merry Xmas.

Regards.

[Naam]

PS: I think this part of it will ultimately be the straw that breaks the FDIC's back

U.S. lenders are buckling under the weight of loans tied to commercial real estate, which is plummeting in value. Prices have dropped 43 percent from their peak in October 2007, Moody’s Investors Service said last month.

it is reasonable to assume that the FDIC has unlimited access to an unlimited amount of money. the procedure might look complicated but is not. none of the politicians will dare to put a stop to that unlimited flow because their political career would have the survival chance of a snowball in héll plus their might be some tarring and feathering (perhaps even a few lynchings) in their home towns.

moreover, it is unreasonable to assume that "lenders are buckling" because the collateral's value has fallen. the latter is completely irrelevant as long as the loans are serviced. that applies to commercial property as well as private housing.

i apologise for spoiling an interesting story by mentioning a couple of facts

[Abrak]

PS: I think this part of it will ultimately be the straw that breaks the FDIC's back

U.S. lenders are buckling under the weight of loans tied to commercial real estate, which is plummeting in value. Prices have dropped 43 percent from their peak in October 2007, Moody’s Investors Service said last month.

I must say I find it hard to see how real estate 'is' still plummeting in value. It is clear that real estate has taken a big hit but prices seem to be recovering a modest amount. According to the Case Shiller index (which is vaguely reliable) both 2Q and 3Q saw an increase in prices. 3Q saw an increase in prices for 90% of regions covered.

http://www.realestatechannel.com/us-market...-sales-1696.php

I mean I dont argue that prices are way below their peak (a bit like the stockmarket), it just seems that prices bottomed (at least in the short term) several months ago.

[12DrinkMore]

Will they ever learn?

http://www.guardian.co.uk/money/2009/dec/1...legal-challenge

Civil service unions vowed to press ahead with a strike ballot of almost half a million Whitehall staff after the Cabinet Office minister Tessa Jowell refused to back down over plans to cut redundancy pay and ban generous early retirement packages.

500,000 civil disservice shirkers?

How on earth are they occupied? Obviously not particularly busy, as they all want some generous "retire at 50" plan.

Unions argue redundancy terms, including early retirement at 50, are part of staff terms and conditions of employment.

Wake up, you overbloated mass of paper pushers. The private industry cannot afford you, for every three workers in private industry, there is one overpaid, over-privileged and inefficient <deleted> clamouring for more benefits, early pension rights and inflation busting wage increases.

This cannot go on.

Face the facts, you do not produce anything except costs and restrictions on free enterprise, but are paid by that free enterprise you are strangling.