Financial Crisis

[cloudhopper]

Coming soon to a corporation/district/city/county/state near you.

http://globaleconomicanalysis.blogspot.com/2011/08/central-falls-bankruptcy-update-all.html

[Wrong Turn]

Coming soon to a corporation/district/city/county/state near you.

http://globaleconomicanalysis.blogspot.com/2011/08/central-falls-bankruptcy-update-all.html

Indeed.

City bankruptcy. It's happening more and more albeit slowly (for now).

state bankruptcies are a possibility and there are deals being made in DC to get around the "constitutional obstacles."

I think Illinois will go bankrupt within 24 months.

With a state bankruptcy, the pain won't just be felt in a city, but the entire state.

[midas]

Blimey, still a bit of pepper left in a few old Brits.... Thought it had all been extinguished.

I think you'll find that the UK politicians are well and truly involved in the Euro-Band wagon. Lots of expenses to be earned over there, you see.

And I think you'll find that Europe is the UK's biggest trading partner, so I wouldn't block off the Channel Tunnel just yet

The UK has dug itself into an almighty hole. Read this

http://www.tullettpr..._Report_007.pdf

and tell me which bit is inaccurate. (It is VERY depressing reading)

And, when you get to the end, please let me know if the title is apt?

I see this week that the financial services lot are now cutting jobs, was it not Brown who reckoned that the financial services was going to replace manufacturing as the main pillar of the UK economy? When that goes, what on earth, I mean in the UK, is left?

"oh, Jane, fink I'll go arrt an get binged ternite, naffin on tv agin".

"yeah luv, passus de fags, an bring me a bottle and take-away back will ya?"

"an doan fergitt ye hav ter be at the social termorer"

"urrrr"

worth the read and the title is certainly very apt 12D what a bleak future for the country of my birth.

[cloudhopper]

worth the read and the title is certainly very apt 12D what a bleak future for the country of my birth.

The same story in the US. The authors at least appear to understand the inability of politicians to escape mathematical and physical realities despite the near religious faith they have engendered in the masses to be so empowered.

[flying]

With a state bankruptcy, the pain won't just be felt in a city, but the entire state.

States should start to consider seceding from the US

Especially the ones with the largest military bases,farmlands & oil

They could charge the US rent for the bases & sell their crops/oil too. Not to mention the toll booths to pass thru

Oh wait that is part of what the civil war was about wasn't it?

Edited August 2, 2011 by flying

[midas]

worth the read and the title is certainly very apt 12D what a bleak future for the country of my birth.

The same story in the US. The authors at least appear to understand the inability of politicians to escape mathematical and physical realities despite the near religious faith they have engendered in the masses to be so empowered.

yes indeed cloudhopper

When I read this passage in the report I instantly thought of the likes of Paul Krugman

" If the owner of a successful restaurant

borrows to invest in additional seating

space, the debt is self-liquidating

because it will be serviced and paid

off from the higher income that the

expanded restaurant will generate4.

But borrowing to pay for a new

car or a foreign holiday is non-selfliquidating,

because it is a form of

consumption which does not leverage

the borrower’s income. Though the

parallels are necessarily less than

exact, the sharp fall in Britain’s return

on capital reflects the fact that the

overwhelming bulk of new borrowings

have been non-self-liquidating. "

[midas]

Here is a simple illustration based on true facts of how food inflation is hurting consumers in my country Australia and how it's changing habits. This story was on Al Jazeera today.

The price of bananas in Australia has risen to an astronomical $20 per kilo and with an average of about five bananas in 1 kg that is four Australian dollars per banana. People have actually started taking them to dinner parties instead of chocolates

( I buy mine from a lady who has a small table in a back lane at 25 baht

for 5 huge bananas so only 5 Baht each in Thailand compared to 120 baht for one in Australia.

[BEENTHEREDONETHAT]

The real reason for the August second deadline....

If the debate goes on past the second of August, it likely will already be cutting into planned congressional vacation time. It's hard to tell, since they don't like to brag about this stuff, but the House web page's last scheduled item until September is on August 3rd. The Senate's calendar just chalks in August 8th through September 5th with the euphemism "State work period." This doesn't preclude them all from going home for their month of vacation immediately after the debt ceiling vote earlier next week, however. But let's generously assume they'll be working all of next week, which puts the real deadline for Congress to act in one fashion or another the fifth of August.

http://www.chrisweigant.com/2011/07/27/congress-real-deadline-summer-vacation/

[Wrong Turn]

Some talking head on CNN was saying short term treasuries have gone up a tad, but that the longer term US investments have actually fallen. Is that true???

I believe that's called an "inverted J-curve." This happened a few years ago. It's not considered to be good.

Problems in the US for sure, but the alternatives are not great either.

Yes, very BIG problems.

I don't see any alternatives other than to embark on stringent and painful austerity measure. It's already started.

[cloudhopper]

46 million now relying on food stamps in the US; reaching 36% in Alabama as a major financial scam kills an entire county there.

http://www.zerohedge.com/news/food-stamp-use-surges-most-years-alabama-foodstamp-recipients-double-may

[craigt3365]

Some talking head on CNN was saying short term treasuries have gone up a tad, but that the longer term US investments have actually fallen. Is that true???

I believe that's called an "inverted J-curve." This happened a few years ago. It's not considered to be good.

Problems in the US for sure, but the alternatives are not great either.

Yes, very BIG problems.

I don't see any alternatives other than to embark on stringent and painful austerity measure. It's already started.

For sure:

http://www.nytimes.com/2011/08/03/business/global/pressure-builds-on-italy-and-spain-over-finances.html?nl=todaysheadlines&emc=globasasa24

[Naam]

46 million now relying on food stamps in the US; reaching 36% in Alabama as a major financial scam kills an entire county there.

http://www.zerohedge.com/news/food-stamp-use-surges-most-years-alabama-foodstamp-recipients-double-may

printing food stamps adds to GDP. result = debt/GDP ratio improves

[flying]

46 million now relying on food stamps in the US; reaching 36% in Alabama as a major financial scam kills an entire county there.

http://www.zerohedge.com/news/food-stamp-use-surges-most-years-alabama-foodstamp-recipients-double-may

printing food stamps adds to GDP. result = debt/GDP ratio improves

:lol: Sadly that is true

[cloudhopper]

Worth watching IMO

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=7102

[cloudhopper]

Oh dear they're all flinging feces back at poor Timmy's cage now. Who's gonna clean this up?

http://globaleconomicanalysis.blogspot.com/2011/08/global-currency-wars-enter-new-stage.html

[midas]

Oh dear they're all flinging feces back at poor Timmy's cage now. Who's gonna clean this up?

http://globaleconomicanalysis.blogspot.com/2011/08/global-currency-wars-enter-new-stage.html

Mish mentions a number of " unhappy " countries but he didnt mention this one

Putin says U.S. is "parasite" on global economy

"They are living like parasites off the global economy and their monopoly of the dollar,"

http://www.reuters.com/article/2011/08/01/us-russia-putin-usa-idUSTRE77052R20110801

[cloudhopper]

"They are living like parasites off the global economy and their monopoly of the dollar,"

Ever since Nixon flipped off the world in '71 Midas.

[churchill]

Too much cash --- The Swiss don't want it , Japanese don't , neither does the US

Euro break up looking closer - The clowns don't know what to do ..

Bank of New York Mellon to Slap Fees on Big Deposits Following "Global Dash For Cash"; When was Hyperinflation Supposed to Start?

http://globaleconomicanalysis.blogspot.com/

[Naam]

BNY Mellon said that it will charge 0.13% plus an additional fee if the one-month Treasury yield dips below zero on depositors that have accounts with an average monthly balance of $50 million "per client relationship," according to a letter reviewed by The Wall Street Journal.

yeah right! and those who hold $50mm in cash will remain satisfied Mellon clients happily ever after

[midas]

can't help it. did not see any crisis yesterday nor do i see one today. everywhere business as usual, fiat money not replaced by gold, politicians bullshitting citizens, insurgents killed by drone strike, Dyler Turd bullshitting doom&gloomers as usual (i assume), Pope still against condoms, €UR not [yet] abolished, holier than thou nations still trying to bomb the living out of Muammar, marinated black olives not [yet] for sale against Drachmas in Athens, markets in Asia all green, al-Qaeda considering IPO launch in Kabul, markets in Europe expected to be green ...

summary:

have you changed your mind yet Naam ? even just a little?

Edited August 5, 2011 by midas

[Naam]

can't help it. did not see any crisis yesterday nor do i see one today. everywhere business as usual, fiat money not replaced by gold, politicians bullshitting citizens, insurgents killed by drone strike, Dyler Turd bullshitting doom&gloomers as usual (i assume), Pope still against condoms, €UR not [yet] abolished, holier than thou nations still trying to bomb the living out of Muammar, marinated black olives not [yet] for sale against Drachmas in Athens, markets in Asia all green, al-Qaeda considering IPO launch in Kabul, markets in Europe expected to be green ...

summary:

have you changed your mind yet Naam ? even just a little?

Midas,

i wish i was wrong and yesterday as well as today were not just blips on the screen. what we need is a continuation of yesterday, id est people realising that the €URopean dilly-dallying PIIGS crisis bla-bla-bla Merkel Sarkozy Trichet pussyfooting beating around the bush and the American demo-republican debt reducing only x-% of GDP bullshit does not yield any positive results.

in other words we need a real crisis, much more serious than Lehman 2008, to force people face reality. then perhaps people/citizens force them freakin' politicians to admit that defaults across most ranges are inevitable and that ways have to be found to spend not more than 99 cents if revenue is one Dollar.

[craigt3365]

Oh dear they're all flinging feces back at poor Timmy's cage now. Who's gonna clean this up?

http://globaleconomicanalysis.blogspot.com/2011/08/global-currency-wars-enter-new-stage.html

Excellent article. Thanks for sharing!

[flying]

in other words we need a real crisis, much more serious than Lehman 2008, to force people face reality. then perhaps people/citizens force them freakin' politicians to admit that defaults across most ranges are inevitable and that ways have to be found to spend not more than 99 cents if revenue is one Dollar.

Hmmm living within their means......Now that is a novel concept!

But then what use would they have for a currency that they can expand with just a few taps on a keyboard?

[Naam]

Hmmm living within their means......Now that is a novel concept!

But then what use would they have for a currency that they can expand with just a few taps on a keyboard?

there's no alternative such as a "backed" currency Flying because not enough "underlying" of anything of value exists.

[flying]

Hmmm living within their means......Now that is a novel concept!

But then what use would they have for a currency that they can expand with just a few taps on a keyboard?

there's no alternative such as a "backed" currency Flying because not enough "underlying" of anything of value exists.

Another interesting thought.....I am wondering if that is the fault of anything of value or the ginormous size of that which has no value (debt)

overshadowing all that has true value?

Not that anything has fault per se'.....But still to consider that which does in fact have value cannot be enough for a sound system .... due only to the fact that "they" have so grown their valueless unbacked monster to a size that we can no longer consider a firmly backed substitute of anything because anything real cannot compare in size to that which is unreal.

Me thinks the day could still come when some country returns to a true value backed system albeit after their no value backed system implodes.

Edited August 5, 2011 by flying

[lannarebirth]

Hmmm living within their means......Now that is a novel concept!

But then what use would they have for a currency that they can expand with just a few taps on a keyboard?

there's no alternative such as a "backed" currency Flying because not enough "underlying" of anything of value exists.

Another interesting thought.....I am wondering if that is the fault of anything of value or the ginormous size of that which has no value (debt)

overshadowing all that has true value?

Not that anything has fault per se'.....But still to consider that which does in fact have value cannot be enough for a sound system .... due only to the fact that "they" have so grown their valueless unbacked monster to a size that we can no longer consider a firmly backed substitute of anything because anything real cannot compare in size to that which is unreal.

Me thinks the day could still come when some country returns to a true value backed system albeit after their no value backed system implodes.

I'm not sure where you get the idea that debt has no value. Most debt does have value in that it creates an income stream which has value and is easily convertible in markets; some more liquid than others. Also, much debt is well securitized and has at least the intrinsic value of the underlying collateral.

[12DrinkMore]

Most debt does have value in that it creates an income stream which has value and is easily convertible in markets; some more liquid than others.

Didn't do too well with all the packaged real estate debt did we? That was one of the catalysts that started all this.

Also, much debt is well securitized and has at least the intrinsic value of the underlying collateral.

Please let's not revisit that path of securitised debt, triple A rated, diced up and spaghetti-ed, with an intrinsic value of zilch.

The only intrinsic value in Treasuries and other government issued toilet-paper is a promise. A promise to return devalued toilet-paper in the future. And that is only valid for sovereign debt in its own currency, the Greeks have no chance of ever repaying their promise to pay, ever. Non whatsoever. Even with toilet paper.

I must applaud the surprising burst from our Naam, who normally provides am aura of calm, seemingly insulated from all the chaos in the world.

in other words we need a real crisis, much more serious than Lehman 2008, to force people face reality. then perhaps people/citizens force them freakin' politicians to admit that defaults across most ranges are inevitable and that ways have to be found to spend not more than 99 cents if revenue is one Dollar.

But I have to agree that the can should no longer be kicked down the road in the hope that either the road is long enough to outlast the politicians' short term employment objective of staying in power and getting a bloated benefit package for services rendered to the State, or the can will somehow evaporate.

Edited August 5, 2011 by 12DrinkMore

[churchill]

Hmmm living within their means......Now that is a novel concept!

But then what use would they have for a currency that they can expand with just a few taps on a keyboard?

there's no alternative such as a "backed" currency Flying because not enough "underlying" of anything of value exists.

depends on the value of the 'underlying '

I saw somewhere that suggested the US should issue 2 - 1 Trillion US Platinum Coins -

found this .. Trillion Dollar U.S. Platinum Coins http://thenumismatist-coincollector.blogspot.com/2011/08/trillion-dollar-us-platinum-coins.html

[flying]

The only intrinsic value in Treasuries and other government issued toilet-paper is a promise. A promise to return devalued toilet-paper in the future.

This is basically how I call it too but would add the future promise is made on the backs of citizens labor which they hope to tax.

So I stand by my original statement regarding theirs has not real value only the promise of it. Which is pretty shaky these days.

[flying]

Hmmm living within their means......Now that is a novel concept!

But then what use would they have for a currency that they can expand with just a few taps on a keyboard?

there's no alternative such as a "backed" currency Flying because not enough "underlying" of anything of value exists.

Another interesting thought.....I am wondering if that is the fault of anything of value or the ginormous size of that which has no value (debt)

overshadowing all that has true value?

Not that anything has fault per se'.....But still to consider that which does in fact have value cannot be enough for a sound system .... due only to the fact that "they" have so grown their valueless unbacked monster to a size that we can no longer consider a firmly backed substitute of anything because anything real cannot compare in size to that which is unreal.

Me thinks the day could still come when some country returns to a true value backed system albeit after their no value backed system implodes.

I'm not sure where you get the idea that debt has no value. Most debt does have value in that it creates an income stream which has value and is easily convertible in markets; some more liquid than others. Also, much debt is well securitized and has at least the intrinsic value of the underlying collateral.

I think we may be talking about two different things.

My answer to Naam was specifically the debt created out of manufacturing fiat currency out of thin air at their whim.

Thus growing it to a size that some claim can now never be exchanged for a tangible backing again due to its size.