Financial Crisis

[Abrak]

Apparently some reports that you might have read about a run on deposits at Kabul Bank which had been considered to have made some bad loans to its shareholders/Dubai property/political interests are not true. This was explained by the Afghan Central Bank Governor. From the BBC website.

The governor of the Central Bank, Abdul Qadir Fitrat, told the BBC the queues were only slightly bigger than normal. Most people wanted to withdraw their salaries or take out money to pay for presents before the Eid festival, he said.

That's ok then.

[Abrak]

I saw this video which I thought identified many of the problems and solutions to the crisis. It is by Joe Stiglitx who is the sort of acceptable face of Krugman.

(too incompetent to imbed)

it does come with some caveats....

1) It is horrendously long - 36 minutes so dont expect a 5 minute explanation.

2) This is important - when he talks about a 'shortage of global aggregate demand' dont groan and say the problem is 'too much spending by the US and not enough saving' he is pointing to the 'global economy' whereby there is too much 'saving by exporters' matching/resulting from 'excess spending/Central reserve' status of the US.

3) It does get a bit gooee eyed about 'developing nations' and a bit 'IMF/World Bank' 'good idea/bad policies' as his political bias.

[12DrinkMore]

At the end of the day people know there is something wrong,

Dunno about that Abrak, the politicians with their finger in the trough, the bankers with their bonuses are standing around saying "we earned it, can't see anything wrong here"

But Marx had a pretty good brain, pity we don't seem to be able to produce that caliber any more. Or maybe we do, but they spend their time getting the web even more twisted or simply work for their own selfish greed, and are not all that interested in trying to "fix the issues", as they would personally lose out in the process.

Capitalism is the most powerful economic force there is and that is why it needs to be tamed.

The very people we elect to tame it have been bought out by it.

Do you really think a peacock wanted its big feathers?

Absolutely, he's the guy who gets the most shags.

Edited September 6, 2010 by 12DrinkMore

[12DrinkMore]

Are we now entering the next phase of this western financial crisis? Just from my view point, which has never been optimistic since this mess started, badly focussed through the lenses of several beers this evening, I think the reality of it is beginning to seep through into the general media.

Eighteen months or so ago we were being fed "green shoots" and a bounce back. Then there were no green shoots and the talk moved to jobless recoveries. Then we moved on to the double dip recession, which is a load of <deleted>, as IMO, a short spell of manipulated statistics with a background of increasing job losses hardly qualified as a recovery. Now we are staring Quantitative Easing Phase II in the face plus another bunch of "stimuli", or "blitz".

http://www.telegraph...onald-Kohn.html

Without quoting a lot from that, here we go with

Speaking in Milwaukee to members of the AFL-CIO, America's largest trade union, the President yesterday announced a six-year plan to overhaul the country's roads and runways, in a $50bn programme designed to create jobs.

well, ok, so the government spends a chunk of cash, a load of concrete is poured. But after six years there have been no new markets opened up, no new opportunities for development. The can has just been kicked down the road for the sake of votes. Note this is NOT the same as improving the transportation system in China, which would up open more of the country's resources and be a REAL improvement.

Oh hel_l, this was going to be a big post, but it's getting a bit late. So I'll leave you with

http://www.telegraph...esurfacing.html

http://www.telegraph...y-off-home.html

Britons will lose the equivalent of a typical annual salary off the value of their home by the end of next year, new figures reveal.

Which will take down the aspiration of those that felt it would always go the other way.

and

http://blogs.telegra...ese-aspiration/

What's more, the focus is strongly on the sciences. There are already substantially more Ph.D. engineers and scientists in China than in the United States, as China produces three times the number of engineers per year. You can argue about the quality of some of these graduates, but what China may lose in terms of the standard of qualification, it makes up for in quantity, and even on the standards it is catching up fast.

If you haven't worked out where all this is heading by now, then its time to take of the blinkers and have a look around. Things are changing very very fast.

[midas]

Yeah, great decision. Let these leeches take a 10% commission or more, and invest in the UK property market?????[/font][/color]

How on earth was this deal pushed through?

I thought about your post when i heard this news

Connaught to go into administration

Connaught, the property services group that specialises in social housing, is on the brink of going into administration, according to bankers close to the company.

An announcement is expected tomorrow, I have learned.

Connaught, which employs 10,000 people, has £220m of debt, provided by half a dozen banks and a quartet of other creditors.

The lead bank is Royal Bank of Scotland, which recently provided Connaught with a further £15m in an attempt to keep the group going.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/09/connaught_to_go_into_administr.html

Edited September 7, 2010 by midas

[BlackJack]

its all pretty simple really when you think about it

after any bubble bursts ie the air goes out of it - it deflates - falls

then

you pick it up - patch it up - and put air back in it - inflate it.

the first QE didnt put enough air in it

QE 11 will put more air in it - inflate it

its the only thing left to do

as i said before hyper inflation is on the way - ride it up but know when to bail out

[12DrinkMore]

Connaught to go into administration

Connaught, the property services group that specialises in social housing, is on the brink of going into administration, according to bankers close to the company.

An announcement is expected tomorrow, I have learned.

Connaught, which employs 10,000 people, has £220m of debt, provided by half a dozen banks and a quartet of other creditors.

The lead bank is Royal Bank of Scotland, which recently provided Connaught with a further £15m in an attempt to keep the group going.

http://www.bbc.co.uk..._administr.html

10,000 real jobs........

The company had a couple of years ago a market value of 500,000,000. That will be wiped off somebody's balance sheets. Doubtless a few pension schemes have taken a hit, which means indirectly the UK public get shafted again.

Out of interest I checked over their last set of published accounts. Page 55 is the consolidated balance sheet.

http://www.connaught...port%202009.pdf

The amount of intangible assets strikes me as being unusually high; around 215,000,000 quid of, well, nothing you can actually lay your hands on...Subtracting that generous amount from the net assets and the company has net assets of minus 50,000,000 quid. Notably the increase in these intangibles over the year, around 30,000,000, was over twice that generated from real cash inflow from the operations (page 56). The net cash inflow after deducting tax and interest on the debts, was minus 2,000,000 quid

The company looks like it was borrowing from the banks to pay the running expenses and to purchase "intangibles". No wonder the banks are getting jittery. The question is, why didn't they do something earlier? Greed I suppose, "have to get my loans UP so I can make MY BONUS".

What was that phrase I read recently, can't remember, but something like NMPNY. "Not My Problem Next Year".

Connaught, "Putting you first" ==> or "Returning Naught on the Con"

Edited September 7, 2010 by 12DrinkMore

[12DrinkMore]

Sorry, it's raining and I'm stuck inside and a bit bored.

http://www.bloomberg...to-examine.html

While they're stuck with their government bond holdings, Europe's banks are also still carrying much of the troubled assets they had during the 2008 meltdown. Euro-zone lenders will have written down about 3 percent of their assets from the peak of the credit crisis by the end of 2010,

Just THREE PERCENT over TWO YEARS, during which time the tax payers have suffered not only well into double figure property losses, millions of jobs losses, and taken on a huge debt, and expats living in Asia have seen their pensions taken taken down 30% in currency losses.

Well, well, well. Somebody is telling very pig porkies.

Europe's governments can't afford to question the quality of bonds they've sold to banks, saysChris Skinner, chief executive officer of Balatro Ltd., a financial industry advisory firm in London. "Bankers have got Europe's governments in their pockets, primarily because politicians cannot change the way lenders do business without undermining confidence in sovereign debt," he says.

Oh gawd, back to this again. Sounds like Ben "Just Trust Me" Bernanke.

Regulators believe the May bailout will succeed, says David Green, who was head of international policy at Britain's Financial Services Authority from 1998 to 2004. "It would be quite perverse for governmental agencies to assume that the program isn't going to work," he says.

Just believe, just believe and it will all be OK. (at this point I need a "puke" emoticon, hey mods, how about it?)

Oh hear ye, hear ye, believe in the Word of the Lords, and ye shall be saved. fuc_king <deleted>.

Edited September 7, 2010 by 12DrinkMore

[mania]

Oh hear ye, hear ye, believe in the Word of the Lords, and ye shall be saved. fuc_king <deleted>.

Well this is playing on US radio so they feel about the same

[12DrinkMore]

I saw this video which I thought identified many of the problems and solutions to the crisis. It is by Joe Stiglitx who is the sort of acceptable face of Krugman.

1) It is horrendously long - 36 minutes so dont expect a 5 minute explanation.

Try the full version, which I haven't, may still be raining but 90 minutes.......

View the entire lecture (Real Media, 1 hour and 29 minutes):

http://webcast.un.org/ramgen/ondemand...

After getting off the a blathering er,er,er start the middle bit was OK. Would recommend he takes on a coach for public speaking at his level. However, when he comes to his solution I do have an issue.

I strongly disagree that the west should be looking to reform the existing institutions and kindly allow China and India to take a bigger role. No, I find this fundamentally wrong, as it leaves the west still in total control. The existing members would NEVER relinquish any serious power. And any action they take would be to ultimately syphon money back to the west.

The only solution on a global scale is for the developing world to set up their own organisation and international fund, to manage their own contributions to it. Of course, the west could be invited to contribute (would they? no, on the contrary they would be fighting to prevent any such competition) The initiative to set up an Asian fund was started last year, but has since dropped under my radar, wondered what happened to it? As Stiglitz said, the 1997 Asian crisis taught a few lessons and has resulted in a much stronger Asian banking system and growing economies, and could teach the west a few lessons....

Does anybody seriously think that in 10 (or 8 years now, as the western crisis started in 2008) years the west will have reigned in the banks, and have vibrant economies based on industry and food production? Not going to happen, is it?

[churchill]

Sorry, it's raining and I'm stuck inside and a bit bored.

http://www.bloomberg...to-examine.html

While they're stuck with their government bond holdings, Europe's banks are also still carrying much of the troubled assets they had during the 2008 meltdown. Euro-zone lenders will have written down about 3 percent of their assets from the peak of the credit crisis by the end of 2010,

Just THREE PERCENT over TWO YEARS, during which time the tax payers have suffered not only well into double figure property losses, millions of jobs losses, and taken on a huge debt, and expats living in Asia have seen their pensions taken taken down 30% in currency losses.

Well, well, well. Somebody is telling very pig porkies.

Europe's governments can't afford to question the quality of bonds they've sold to banks, saysChris Skinner, chief executive officer of Balatro Ltd., a financial industry advisory firm in London. "Bankers have got Europe's governments in their pockets, primarily because politicians cannot change the way lenders do business without undermining confidence in sovereign debt," he says.

Oh gawd, back to this again. Sounds like Ben "Just Trust Me" Bernanke.

Regulators believe the May bailout will succeed, says David Green, who was head of international policy at Britain's Financial Services Authority from 1998 to 2004. "It would be quite perverse for governmental agencies to assume that the program isn't going to work," he says.

Just believe, just believe and it will all be OK. (at this point I need a "puke" emoticon, hey mods, how about it?)

Oh hear ye, hear ye, believe in the Word of the Lords, and ye shall be saved. fuc_king <deleted>.

So do you wonder why investors are sick of paying commisions to financial experts who cannot know what is going on because it's all smoke and mirrors , lies - markets go up and down depending on the weather, time of month or latest chart with flash crashes depending on some computer program /

That is one reason why Gold / Silver are going up - But even there paper gold is not real gold ........!!! One can work , save and invest and have it stolen in a second / Who knows what is going on - Is it the politicians or the bankers , who is in control ?

How to protect one's savings ? Bonds ? Gold ? Property ? Oil ? Stocks ?

[teletiger]

nobody mentions Anglo Irish Bank?

Is this the domino that sets them all off? No reason it should, any more than a collection of Greek or Spanish banks, should have already.

As Ambrose Evans Pritchard says....The time for rioting is now....to get that special preferential (Greek) treatment, of course.

"Anglo Irish gefährdet Irland"

"Actually Irishmen make everything right. They struck early in an economy drive one and drive the restructuring of the ailing banks ahead resolutely. But the uncertain cost of the rescue of the Anglo Irish Bank pull everything now in doubt. By Christine May Frankfurt"

Hmmm...That's a dodgy google translate of a Financial Times (Deutschland) article.

'And here's AEP from a week or so ago.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100007444/it-pays-to-riot-in-europe/

Of course the whole thing is on ZeroHedge, but some numpties on here don't think much of it.

(perhaps a marker for how far it's come. It's now chique to put it down.)

Regards.

[midas]

nobody mentions Anglo Irish Bank?

Is this the domino that sets them all off? No reason it should, any more than a collection of Greek or Spanish banks, should have already.

As Ambrose Evans Pritchard says....The time for rioting is now....to get that special preferential (Greek) treatment, of course.

"Anglo Irish gefährdet Irland"

"Actually Irishmen make everything right. They struck early in an economy drive one and drive the restructuring of the ailing banks ahead resolutely. But the uncertain cost of the rescue of the Anglo Irish Bank pull everything now in doubt. By Christine May Frankfurt"

Hmmm...That's a dodgy google translate of a Financial Times (Deutschland) article.

'And here's AEP from a week or so ago.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100007444/it-pays-to-riot-in-europe/

Of course the whole thing is on ZeroHedge, but some numpties on here don't think much of it.

(perhaps a marker for how far it's come. It's now chique to put it down.)

Regards.

As we suspected at the time.......the European Stress Tests were a complete farce and now

The Wall Street Journal confirms just that :-

" Some banks' figures also were whittled down by accounting for "short" positions they held in various countries' debt. For example, if a bank held €100 million of Greek debt and €25 million of short positions in Greek debt, the gross figure was listed as €75 million. "

The Committee of European Banking Supervisors, the London-based group that coordinated the tests didn't disclose that the banks were calculating the figures in that way."

http://online.wsj.com/article/SB10001424052748704392104575475520949440394.html

[badge]

At least a million on the streets of Paris demonstrating against work, American Pastors from the south burning Korans, mass rapes in the Congo... business as usual

https://ems.gluskinsheff.net/Articles/Breakfast_with_Dave_090710.pdf

.....you know it’s a depression when, 33 months after the onset of recession...

•

Wages & salaries are still down 3.7% from the prior peak;

•

Corporate profits are still down 20% from the peak;

•

Real GDP is still down 1.3% from the peak;

•

Industrial production is still down 7.2% from the peak;

•

Employment is still down 5.5% from the peak;

•

Retail sales are still down 4.5% from the peak;

•

Manufacturing orders are still down 22.1% from the peak;

•

Manufacturing shipments are still down 12.5% from the peak;

•

Exports are still down 9.2% from the peak;

•

Housing starts are still down 63.5% from the peak;

•

New home sales are still down 68.9% from the peak;

•

Existing home sales are still down 41.2% from the peak;

•

Non-residential construction is still down 35.7% from the peak.

Folks, in a normal recession-recovery cycle, practically all these indicators are making new highs at this juncture of the business cycle. For anyone to go on Bloomberg Radio and lay claim that this is a normal bounce-back in the economy is unarmed but very dangerous.

What is up, and up dramatically, since the recession began 33 months ago are government transfers to households (in the form of unemployment benefits, food stamps, welfare, social security) — they have ballooned 31% since the end of 2007. A record 30 cents of every dollar in personal income is now derived from some form of government support — now tell me that is not a depression-era statistic. The modern day soup line is a cheque in the mail.

[mania]

Mike Pento Kicked Off CNBC For Telling Truth, As Dumb Money Manager Says ;Nothing Is In A Bubble When People Want To Buy It

http://www.zerohedge.com/article/mike-pento-kicked-cnbc-telling-truth-dumb-money-manager-says-nothing-bubble-when-people-want

[Naam]

That is one reason why Gold / Silver are going up - But even there paper gold is not real gold ........!!! One can work , save and invest and have it stolen in a second / Who knows what is going on - Is it the politicians or the bankers , who is in control ?

How to protect one's savings ? Bonds ? Gold ? Property ? Oil ? Stocks ?

a valid question Churchill. unfortunately there is no answer. even conservative investments are not safe. the roof over your head can be destroyed by acts of God or war, the crops from your fields can be stolen and people who rented the properties you own might not have the money to pay the rent.

[12DrinkMore]

Orwell was a couple of decades early, but here it comes....

http://www.telegraph.co.uk/news/newstopics/politics/7985181/HMRC-could-take-direct-control-of-pay-cheques-after-tax-errors.html

Instead of employers deducting income tax then paying gross salaries to employees, the gross monthly payment would go to an HMRC-run tax “calculator”, which would then pass the net salary to the worker.

Total State Control.

But doubtless there would have to be a few exceptions, importantly politicians and bankers would get exemption.

Whether they will get very far with this is possible not the point. The chilling thing is that the Powers, essentially voted in by us, have taken it so far, therefore it must be a serious possibility.

The logical following steps would be to nationalise the banks (whoops! We have already)

And then remove cash.

We know where you are and we know what you are spending on.

[midas]

Orwell was a couple of decades early, but here it comes....

http://www.telegraph.co.uk/news/newstopics/politics/7985181/HMRC-could-take-direct-control-of-pay-cheques-after-tax-errors.html

Instead of employers deducting income tax then paying gross salaries to employees, the gross monthly payment would go to an HMRC-run tax “calculator”, which would then pass the net salary to the worker.

Total State Control.

But doubtless there would have to be a few exceptions, importantly politicians and bankers would get exemption.

Whether they will get very far with this is possible not the point. The chilling thing is that the Powers, essentially voted in by us, have taken it so far, therefore it must be a serious possibility.

The logical following steps would be to nationalise the banks (whoops! We have already)

And then remove cash.

We know where you are and we know what you are spending on.

No no no no ! Not that it affects me here in Thailand

but the symbolism of this gives me the creeps.

if the people allow this to happen then IMO its the beginning

of the end - the thin end of the wedge.

[12DrinkMore]

Well, I thought I was using relatively strong usage in calling the Greeks liers and thieves.

It is now official.

http://www.bloomberg...ond-doubts.html

Greece is the only euro country that lied about using these complex swap contracts after Eurostat told countries to report them in 2008

And I am hard pushed to believe this

There is "a clear political will for full transparency in everything," he said. "There is a clear and complete break with past practices."

Since the Trojan Horse nothing has changed.

Edited September 8, 2010 by 12DrinkMore

[midas]

ECR Research Says That The Point Of Recognition Is Approaching As The World Realizes Ben Bernanke Is Naked

:cheesy:

Edited September 9, 2010 by midas

[midas]

I got tired of watching banks fail so had not seen the FDIC list in awhile.

Took a look today & see Aug 20th may have been a new record.

Eight banks in one day.

Dont know if anyone is still counting but I see 118 banks down in 2010 ...so far.... for 2010 alone.

2009 had 140 banks fail with combined assets of 170.9 Billion USD

So the FDIC has said that The pace of bank failure this year is well ahead of 2009, which saw a total of 140 banks closed amid the recession and mounting loan defaults.

But now we have a disturbing new " trend "

Letter Re: FDIC Insider in Illinois Reports Diminishing Bank Merger Possibilities

" The banks that formerly had wanted to purchase other banks have done so and are not interested in buying any more banks. To put it bluntly, the FDIC is running out of buyers. My friend states that often times they are literally coming down to the wire to get all the transactions and contracts, etc. pertaining to the purchase completed in time to seamlessly make the transition, as it is taking longer and longer to secure a buyer. "

READ THE WHOLE LETTER HERE :- http://www.survivalblog.com/2010/09/letter_re_fdic_insider_in_illi.html

[midas]

A very good explanation as to how Retail America has run directly into a brick wall.

RETAILERS – REALITY CHECK TIME

" Below are charts detailing the expansion history of four of the most admired retailers in America. Lowes grew their store count from 600 to 1,700 over the course of the decade, a 183% increase. Wal-Mart grew their store count from 4,000 to 8,500, a 113% increase. Target grew their store count from 1,000 to 1,750, a 75% increase. Kohl’s grew their store count from 300 to 1,050, a 250% increase. Same store sales are the true measure of a retailer’s health. When comp store sales are +5% or better, retailers make substantial profits and confidently build new stores. As the charts below clearly show, comp store sales have been in a substantial downtrend since 2006. The new stores that have been built in existing markets are over cannibalizing their existing stores.

Lowes has 500 more stores today than it had in 2005, $4 billion more sales, and $1 billion less profits. Target has 340 more stores today than it had in 2005, $12 billion more sales, and the same profit. Kohl’s has 240 more stores than it had in 2006, $1.6 billion more sales, and $100 million less profit. Only Wal-Mart has kept the profits flowing, mostly due to its international expansion. The tough times have only just begun for these retailers."

http://theburningplatform.com/blog/2010/09/08/retailers-reality-check-time/

[Abrak]

ECR Research Says That The Point Of Recognition Is Approaching As The World Realizes Ben Bernanke Is Naked

:cheesy:

Well I dont know about naked (not something I wish to imagine) but I do believe, in all intellectual honesty, if the USA falls into deflation under his watch, which he has very clearly indicated that he is competent enough to avoid, he should at least shave off his beard as an act of contrition. Maybe we could start a Facebook page!!

[midas]

ECR Research Says That The Point Of Recognition Is Approaching As The World Realizes Ben Bernanke Is Naked

:cheesy:

Well I dont know about naked (not something I wish to imagine) but I do believe, in all intellectual honesty, if the USA falls into deflation under his watch, which he has very clearly indicated that he is competent enough to avoid, he should at least shave off his beard as an act of contrition. Maybe we could start a Facebook page!!

LOL

but if he ends up creating Frankenstein i.e.hyperiflation what can he shave off then ?

[Abrak]

ECR Research Says That The Point Of Recognition Is Approaching As The World Realizes Ben Bernanke Is Naked

:cheesy:

Well I dont know about naked (not something I wish to imagine) but I do believe, in all intellectual honesty, if the USA falls into deflation under his watch, which he has very clearly indicated that he is competent enough to avoid, he should at least shave off his beard as an act of contrition. Maybe we could start a Facebook page!!

LOL

but if he ends up creating Frankenstein i.e.hyperiflation what can he shave off then ?

At that point I believe we can ask Krugman to shave off his beard!!

[12DrinkMore]

Got twelve minutes?

[AlexLah]

Good video 12, explains a lot what we have been discussing here but not in such words.

Thanks for that!

To Abrak, you were asking/questioning the reason of the illegal invasion of Iraq and thought/mentioned the oil issue.

This article tries to give a bit of an explanation to what is happening in that region including the Balkan.

http://globalresearch.ca/index.php?context=va&aid=20944

But it fails to mention the privatization of the 200 state owned companies in Iraq after the invasion.

This is a classic move promoted and implemented by the Chicago school of economics people under the guise of free market capitalism.

[cloudhopper]

Those interested in a long view of the big picture might like this interview -

http://www.financialsensenewshour.com/broadcast/fsn2010-0908-1.mp3

[Abrak]

Got twelve minutes?

Great video and I really love the site.

There tends to be a couple of views...

1) that individuals whose actions are based on greed and selfishness end up with rubbish outcomes and Goldman Sachs and...

2) if you then hand over control to the Government whether they are 'elected' through a true democratic process or not will act in benefit of the elite or their self interests....

Probably the most distrusted institution in the US is GS full of greedy selfish bankers, followed by the government (who would like to do better) but are under their influence.

I think that humans are not so simple - reciprocal altruism is innate to our human nature.

I like this video in particular.

[12DrinkMore]

Got twelve minutes?

Great video and I really love the site.

Only ran across this website in the last dew days, but there is so much on it, and the presentations are superb. If you need a break from "the crisis", then check it out.

Here's another one to get you thinking.

(I deliberately put in the direct YouTube link because it seems to work faster than the embedded video in Thai Visa, at least for me)

Edited September 10, 2010 by 12DrinkMore