Financial Crisis

[ronz28]

things that come out in the wash after the GFC

Interesting, but drug money can't be so much that withdrawing it from Wachovia Bank, etc. would crash the world economy and go where? Mattress would be way to lumpy to get a decent night's sleep. Just coincidental not causal.

[Naam]

things that come out in the wash after the GFC

Interesting, but drug money can't be so much that withdrawing it from Wachovia Bank, etc. would crash the world economy and go where? Mattress would be way to lumpy to get a decent night's sleep. Just coincidental not causal.

that loonies like Keiser walk around freely instead of being wrapped comfortably in a straight jacket is amazing.

oh well...

[midas]

things that come out in the wash after the GFC

Interesting, but drug money can't be so much that withdrawing it from Wachovia Bank, etc. would crash the world economy and go where? Mattress would be way to lumpy to get a decent night's sleep. Just coincidental not causal.

that loonies like Keiser walk around freely instead of being wrapped comfortably in a straight jacket is amazing.

oh well...

"When the world goes mad, one must accept madness as sanity; since sanity is, in the last analysis, nothing but the madness on which the whole world happens to agree."

George Bernard Shaw

[Naam]

who or what is

George Bernard Shaw

[RedFxTrade]

who or what is

George Bernard Shaw

haha, George Bernard Shaw...I use some of his quotes as retorts to people sometimes. You know the way you get the Spelling Police, the Pedants who worry about every little typo, or they pull you up on your grammar....I always reply with a GBS quote of " Grammar is The Grave of Language"...There is nothing like using a quote from a well known writer/philosopher/religious profit...opps I mean Prophet, before the spelling police are out...and I need to get the "retort notebook out"

P>S By the way the original GBS quote by Midas is a good one, very true in this world

[BlackJack]

things that come out in the wash after the GFC

Interesting, but drug money can't be so much that withdrawing it from Wachovia Bank, etc. would crash the world economy and go where? Mattress would be way to lumpy to get a decent night's sleep. Just coincidental not causal.

that loonies like Keiser walk around freely instead of being wrapped comfortably in a straight jacket is amazing.

oh well...

"When the world goes mad, one must accept madness as sanity; since sanity is, in the last analysis, nothing but the madness on which the whole world happens to agree."

George Bernard Shaw

it would be interesting to know if in fact this money was laundered through the bank

only time will tell

[craigt3365]

I found this article to be interesting.

Though the U.S. Treasury market is by far the largest bond market in the world, the open interest in credit default swaps referencing Treasuries ranks just 29th. There are six times as many bets against Italy and five times as many against France as against the United States, going by the net value of the wagers being made against each country's bonds.

http://finance.fortune.cnn.com/2011/05/27/dont-believe-the-u-s-default-fear-hype/

[midas]

I found this article to be interesting.

Though the U.S. Treasury market is by far the largest bond market in the world, the open interest in credit default swaps referencing Treasuries ranks just 29th. There are six times as many bets against Italy and five times as many against France as against the United States, going by the net value of the wagers being made against each country's bonds.

http://finance.fortune.cnn.com/2011/05/27/dont-believe-the-u-s-default-fear-hype/

How bizarre instead of concentrating on implementation of

very tough austerity measures the world prefers to sit around

like a bunch of gamblers watching a pit bull Terrier fight

to see which country reaches the bottom first

[cloudhopper]

How bizarre instead of concentrating on implementation of

very tough austerity measures the world prefers to sit around

like a bunch of gamblers watching a pit bull Terrier fight

to see which country reaches the bottom first

Five thousand quatloos on Greece!

[midas]

How bizarre instead of concentrating on implementation of

very tough austerity measures the world prefers to sit around

like a bunch of gamblers watching a pit bull Terrier fight

to see which country reaches the bottom first

Five thousand quatloos on Greece!

LOL I will Double Down on that !

[midas]

well i consider this article by Gordon T. Long as one of the best deconstructions of the fin crisis I have read so far

.( those that dont like zero hedge can skip it )

http://www.zerohedge.com/article/guest-post-economic-death-spiral-has-been-triggered

[cloudhopper]

well i consider this article by Gordon T. Long as one of the best deconstructions of the fin crisis I have read so far

.( those that dont like zero hedge can skip it )

http://www.zerohedge...-been-triggered

It's a great review but IMO his conclusion that the only possible result is a (USD) currency crisis is flawed. It seems to me that we already had the big global inflation as the Fed and the investment and central banks globally extended credit for everything from trade deficits to overpriced houses, then compounded the runup with all sorts of quasi-monetary derivatives and speculative bets. Now that no more debt can be assumed this is all going to unwind and the CBs are doing everything they can (ie printing) to prevent a deflationary burst. As pointed out previously however the outstanding debt is around 25X the existing money to repay it, so lots more money needs to be created just to repay debt before it starts causing hyper inflation. A more likely result IMO is massive global default and deflation.

[RedFxTrade]

I found this article to be interesting.

Though the U.S. Treasury market is by far the largest bond market in the world, the open interest in credit default swaps referencing Treasuries ranks just 29th. There are six times as many bets against Italy and five times as many against France as against the United States, going by the net value of the wagers being made against each country's bonds.

http://finance.fortu...ault-fear-hype/

It kind of makes a mockery of the bureaucrats in the EU who were blaming those evil speculators and hedge funds for attacking Greek bonds, and driving borrowing costs up. I read at the time that the notional outstanding amount in CDS contracts for a Greek default was about 1% of the total Greek Bonds outstanding, yet the idiots in Brussels think or wanted to scape goat to cover up their own mismanagement of their economies by blaming speculators. Of course the general media lap it up and it stirs up the emotions in the general public regarding speculators...Lets face it the Greeks problems were not down to 1% CDS to total Greek debt bonds outstanding.

The same goes for these in the article. Germany $16 billion...these amounts are paltry relative to the bond markets...and the amount for the US is completely inconsequential relative to the size of the bond market. The numbers in themselves are not useful, a much better way to display the data would be to show the notional CDS outstanding relative to the total bond issuance that year. The politicians saying the CDS derivatives are driving up borrowing costs is like me being blamed and fined for pollution due to that time I took a piss in the Indian ocean.

[12DrinkMore]

Banking, is this really how the banks work?

When a bank lent out a $450,000 mortgage on that hypothetical $500,000 house you mention above it made a book entry in the asset column for $1,350,000 (total of monthly P+I x 360 monthly payments give or take depending on the rate of I). NOW multiply by millions of houses with many more to come and you start to see, but it gets worse because the difference between an asset of 1.35 million and a liability which is represented by the house they now own less possible recapture of a fraction of that through auction on the courthouse steps is the original principal less recapture, another quarter million in the hypothetical above, for a true liability of over a million and a half for that one house. But it gets worse because they collateralized these with as much as 40 to 1 leverage expecting arcane derivatives they created for the eventual need to buy back the fraction that was not taken care of by inflation over 30 years.

pulled it off zerohedge, but that is not really important.

So they basically can book the entire projected returns at the instant the mortgage is issued? And this is what we are bailing out, lost fictitious future profits?

[cloudhopper]

Banking, is this really how the banks work?

When a bank lent out a $450,000 mortgage on that hypothetical $500,000 house you mention above it made a book entry in the asset column for $1,350,000 (total of monthly P+I x 360 monthly payments give or take depending on the rate of I). NOW multiply by millions of houses with many more to come and you start to see, but it gets worse because the difference between an asset of 1.35 million and a liability which is represented by the house they now own less possible recapture of a fraction of that through auction on the courthouse steps is the original principal less recapture, another quarter million in the hypothetical above, for a true liability of over a million and a half for that one house. But it gets worse because they collateralized these with as much as 40 to 1 leverage expecting arcane derivatives they created for the eventual need to buy back the fraction that was not taken care of by inflation over 30 years.

pulled it off zerohedge, but that is not really important.

So they basically can book the entire projected returns at the instant the mortgage is issued? And this is what we are bailing out, lost fictitious future profits?

What this really illustrates IMO is how credit and its derivatives create money out of thin air, FAR surpassing money printing by central banks. This is also why the central banks may in fact be unable to stop a deflationary burst as all these "assets" return to thin air.

[RedFxTrade]

Banking, is this really how the banks work?

When a bank lent out a $450,000 mortgage on that hypothetical $500,000 house you mention above it made a book entry in the asset column for $1,350,000 (total of monthly P+I x 360 monthly payments give or take depending on the rate of I). NOW multiply by millions of houses with many more to come and you start to see, but it gets worse because the difference between an asset of 1.35 million and a liability which is represented by the house they now own less possible recapture of a fraction of that through auction on the courthouse steps is the original principal less recapture, another quarter million in the hypothetical above, for a true liability of over a million and a half for that one house. But it gets worse because they collateralized these with as much as 40 to 1 leverage expecting arcane derivatives they created for the eventual need to buy back the fraction that was not taken care of by inflation over 30 years.

pulled it off zerohedge, but that is not really important.

So they basically can book the entire projected returns at the instant the mortgage is issued? And this is what we are bailing out, lost fictitious future profits?

What this really illustrates IMO is how credit and its derivatives create money out of thin air, FAR surpassing money printing by central banks. This is also why the central banks may in fact be unable to stop a deflationary burst as all these "assets" return to thin air.

Hey Cloudhopper, you seem to be on deflationary camp, in theory at least. In theory I have a bias to a deflationary outlook as the reasoning seems more sound, but I m of course open to both, and think there will be periods of both also. Anyway you might like this video I posted earlier in the forum, perhaps the gold one...by heurto de soto...it is an excellent lecture

[cloudhopper]

Hey Cloudhopper, you seem to be on deflationary camp, in theory at least. In theory I have a bias to a deflationary outlook as the reasoning seems more sound, but I m of course open to both, and think there will be periods of both also. Anyway you might like this video I posted earlier in the forum, perhaps the gold one...by heurto de soto...it is an excellent lecture

Thanks Red that was an interesting lecture I had not seen. I certainly do not agree with Williams, Lira and others who think that a hyperinflation of the USD is inevitable. What is inevitable however is an end to global growth as we hit the physical limits of abundant material and energy resources and that is going to be very disruptive in ways that are totally unpredictable and utterly beyond any political or financial solution.

[Naam]

Thanks Red that was an interesting lecture I had not seen. I certainly do not agree with Williams, Lira and others who think that a hyperinflation of the USD is inevitable. What is inevitable however is an end to global growth as we hit the physical limits of abundant material and energy resources and that is going to be very disruptive in ways that are totally unpredictable and utterly beyond any political or financial solution.

i have faith that the [proven] ingenuity of mankind will find solutions for most, albeit not all problems. unfortunately i will not live long enough to experience these solutions. but that's beside the point.

[flying]

i have faith that the [proven] ingenuity of mankind will find solutions for most, albeit not all problems. unfortunately i will not live long enough to experience these solutions. but that's beside the point.

I thought it was the proven ingenuity of mankind that got us into this mess....

[Naam]

i have faith that the [proven] ingenuity of mankind will find solutions for most, albeit not all problems. unfortunately i will not live long enough to experience these solutions. but that's beside the point.

I thought it was the proven ingenuity of mankind that got us into this mess....

no Flying, it was not "mankind" but a tiny minority of bloodsucking thieving frauds.

[midas]

Thanks Red that was an interesting lecture I had not seen. I certainly do not agree with Williams, Lira and others who think that a hyperinflation of the USD is inevitable. What is inevitable however is an end to global growth as we hit the physical limits of abundant material and energy resources and that is going to be very disruptive in ways that are totally unpredictable and utterly beyond any political or financial solution.

i have faith that the [proven] ingenuity of mankind will find solutions for most, albeit not all problems. unfortunately i will not live long enough to experience these solutions. but that's beside the point.

i am far more concerned about loss of freedom than deflation v inflation and this

is the supposed " Land of The Free " sent a chill up my spine.

<deleted> is going on out there ?

[flying]

Have not had time to read it all yet but just saw it today...

For folks interested in cycles....

Martin Armstrong entitled The End of Time? Part 1, dated May 22, 2011

[craigt3365]

no Flying, it was not "mankind" but a tiny minority of bloodsucking thieving frauds.

+1 :jap:

Thanks Red that was an interesting lecture I had not seen. I certainly do not agree with Williams, Lira and others who think that a hyperinflation of the USD is inevitable. What is inevitable however is an end to global growth as we hit the physical limits of abundant material and energy resources and that is going to be very disruptive in ways that are totally unpredictable and utterly beyond any political or financial solution.

i have faith that the [proven] ingenuity of mankind will find solutions for most, albeit not all problems. unfortunately i will not live long enough to experience these solutions. but that's beside the point.

i am far more concerned about loss of freedom than deflation v inflation and this

is the supposed " Land of The Free " sent a chill up my spine.

<deleted> is going on out there ?

What has this got to do with the OP? Anyway, these guys were breaking the law on purpose...they were asking for it.

[midas]

no Flying, it was not "mankind" but a tiny minority of bloodsucking thieving frauds.

+1 :jap:

i have faith that the [proven] ingenuity of mankind will find solutions for most, albeit not all problems. unfortunately i will not live long enough to experience these solutions. but that's beside the point.

i am far more concerned about loss of freedom than deflation v inflation and this

is the supposed " Land of The Free " sent a chill up my spine.

<deleted> is going on out there ?

What has this got to do with the OP? Anyway, these guys were breaking the law on purpose...they were asking for it.

only because i remember the words of Rahm Emanuel ......" You never want a serious crisis to go to waste "

[midas]

What has this got to do with the OP? Anyway, these guys were breaking the law on purpose...they were asking for it.

actually I have just finished reading the Martin Armstrong paper in flying's Post

#9232 above and there are some classic statements in that which support my view that

it is highly relevant to the OP

those people in that video were arrested just for dancing ...don't you see even a remote connection

to what Martin Armstrong writes here ? "

:-

" Government is historically only about maintaining power even when it claims to be doing so in the name of some god. This is true historically just as it remains true about places like Iran and Afghanistan today. Government employees are always dangerous to society because of their mindless actions. The NUMBER ONE excuse at the Nuremberg Trials of Nazi soldiers was they were ONLY FOLLOWING ORDERS! The dark side of humanity is its uncivilized barbarism. Try to deal with government; any government! What you will quickly discover is an inflexible mindless entity inhuman in every aspect, yet capable of such evil in the absence of any independent thought or compromising reason. You will encounter stupid rules that defy common sense and mindless drones who even now claim they are just following orders.."

[Naam]

For folks interested in cycles....

[craigt3365]

What has this got to do with the OP? Anyway, these guys were breaking the law on purpose...they were asking for it.

actually I have just finished reading the Martin Armstrong paper in flying's Post

#9232 above and there are some classic statements in that which support my view that

it is highly relevant to the OP

those people in that video were arrested just for dancing ...don't you see even a remote connection

to what Martin Armstrong writes here ? "

:-

" Government is historically only about maintaining power even when it claims to be doing so in the name of some god. This is true historically just as it remains true about places like Iran and Afghanistan today. Government employees are always dangerous to society because of their mindless actions. The NUMBER ONE excuse at the Nuremberg Trials of Nazi soldiers was they were ONLY FOLLOWING ORDERS! The dark side of humanity is its uncivilized barbarism. Try to deal with government; any government! What you will quickly discover is an inflexible mindless entity inhuman in every aspect, yet capable of such evil in the absence of any independent thought or compromising reason. You will encounter stupid rules that defy common sense and mindless drones who even now claim they are just following orders.."

All I can say is....WOW. My father worked for the government and was hardly dangerous. 2 masters degree and lots of good service to his country. Honest and great reputation.

I hate broad brush statements like this...

[cloudhopper]

Interesting discussion

http://www.zerohedge.com/article/jim-grant-and-james-turk-discuss-endgame-keynesian-experiment

[midas]

What has this got to do with the OP? Anyway, these guys were breaking the law on purpose...they were asking for it.

actually I have just finished reading the Martin Armstrong paper in flying's Post

#9232 above and there are some classic statements in that which support my view that

it is highly relevant to the OP

those people in that video were arrested just for dancing ...don't you see even a remote connection

to what Martin Armstrong writes here ? "

:-

" Government is historically only about maintaining power even when it claims to be doing so in the name of some god. This is true historically just as it remains true about places like Iran and Afghanistan today. Government employees are always dangerous to society because of their mindless actions. The NUMBER ONE excuse at the Nuremberg Trials of Nazi soldiers was they were ONLY FOLLOWING ORDERS! The dark side of humanity is its uncivilized barbarism. Try to deal with government; any government! What you will quickly discover is an inflexible mindless entity inhuman in every aspect, yet capable of such evil in the absence of any independent thought or compromising reason. You will encounter stupid rules that defy common sense and mindless drones who even now claim they are just following orders.."

All I can say is....WOW. My father worked for the government and was hardly dangerous. 2 masters degree and lots of good service to his country. Honest and great reputation.

I hate broad brush statements like this...

Craig as you know they are not my words- they are Martin Armstrong's words.

But in your post above you said " these guys were breaking the law on purpose...they were asking for it"

What were they doing - only dancing in a public place?

The banksters and mortgage facilitators have committed hideous fraud-I think they were asking for it as well

and yet not one has been arrested or charged ? so what is more serious dancing or fraud?

[churchill]

Debts Debts Debts /

'China's regulators plan to shift 2-3 trillion yuan ($308-463 billion) of debt off local governments, sources said, reducing the risk of a wave of defaults that would threaten the stability of the world's second-biggest economy.'

http://www.reuters.com/article/2011/05/31/us-china-economy-debt-idUSTRE74U26320110531