We're at the brink HP'ers. Right now. Today.
There is now a chance, and a real possibility, that the entire worldwide financial system could implode, as early as tomorrow.
Let that sink in.
OK?
So, what does that look like? Riots in the streets? Fuel deliveries halted? No food on the shelves? Banks and markets are closed and no access to cash at the ATMs? Dow 1,000? Companies disappearing in the night? Mass disorder and confusion? People selling everything for anything they can get? Paper currencies go worthless? World Series canceled? Flights grounded?
I have no idea what it looks like. I'm not sure if anyone truly does. But we're here. The brink. If it doesn't get better this week, starting Monday, we might fall off the cliff. The whole world. There will be no safe haven.
The only immediate solution? The nations of the world nationalize (or guarantee) their banks, or in cases like the UK and US, they pick the superbanks that get to go forward with government guarantees and equity stakes, and then let the others try to make it on their own. Or more likely, simply fail.
And this must be done today. And I think it will be.
May you live in interesting times.
From FT:
No G7 official was sure the plan would work, so deep is the financial crisis. If it does not, the next steps would be one of two nuclear options: to guarantee all liabilities of banks, in effect nationalising the financial system, or for governments to seek to bypass financial institutions by lending directly to companies and households.
From the New Statesman:
We are witnessing the collapse of the world financial system. To have said that even a month ago would have been to invite ridicule, but now it seems only a statement of the obvious as banks implode, governments panic and investors run. The initial liquidity crisis that broke in August 2007 and drove Northern Rock to the wall has evolved into a crisis of insolvency and finally into a crisis of confidence in the entire financial system.
From the IMF:
The global financial system is on the brink of a meltdown and additional steps must be taken immediately by the richest nations to calm jittery bankers and investors, the International Monetary Fund warned Saturday.
"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," said Dominique Strauss-Kahn, IMF managing director.
October 12, 2008
Here we are, October 12, 2008, the day the world went to the brink. So, what does a complete collapse of the worldwide financial system look like?
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101 comments:
Here you go HP'ers. The governments are going to take over the banks, probably by tonight.
It hath been foretold.
Financial crisis: Government to take majority stake in RBS
Banking shares across the G7 nations could be suspended tomorrow as Government prepares to take a £35bn equity stake in four of the UK’s high street banks.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3182806/Financial-crisis-Government-to-take-majority-stake-in-RBS.html
You need your head examined if you even think about buying a banks stock. Most if not all will be taken over outright or their share holders diluted to hell and back.
Yes, the shareholders will be nearly wiped out. With a chance to recover, but as of this week, nearly wiped out
Oh, they might not even let the bank stocks open this week.
Close all of the trading on them until they work out their deals
I give up.
This economy is no longer in the hands of the market. It is simply a big puppet show in the hands of a few rule makers. There is no way to predict or invest in this environment.
I have no idea where to put my money. If I put in gold, the government could confiscate it. If I put in cash, the dollar could collapse. Foreign currencies seem like they are also a risk if the dollar goes deflationary. Equities seem like a dice roll as fundamentals are now meaningless to share price, even in foreign markets. Commodities seem to be crashing the fastest which doesn't make a lot of sense since these are things people will need. (And by people, I mean people in China, India and Singapore.)
So, I have money in all of the above which has actually kept me from losing too much.
I do think putting together a Mormon-like emergency kit is probably a good plan.
The bank failures do have me thinking that it's time to start asking "WWJD?" What Would Jim (Rogers) Do?
Here is a good perspective on the situation from George Soros:
http://tiny.cc/kq1Wk
Key points- the economic motor of US consumers spending more than saving has been shut off- it will not return.
Investment in energy will fuel growth in the future(Keith,you may want to register energypanic.blogspot.com)
Market fundamentalism is a false idea
Enjoy the vid; it is worth the 25 minute investment.
We've done so much with so little for so long that soon...
we'll be able to do everything
with nothing forever.
There's a big word in that article - it's "COULD!"
While the people who owned RBS stock at the top are slaughtered, us gamblers are still buying it at the bottom. And we're making money.
If you bought Wells Fargo at .75 cents and sold it $6.40, you really got hammered didn't you?
Some crash for smart people.
Dopes!!!
Correction, meant to say Wachovia...
I ask again...on what planet do you people live?
Here is a summary of my weekend so far, in this supposed brink of a great depression:
Friday night: went out with friend. Every place was wall to wall people.
Sat morning: went to Starbucks, as usual, packed with people buying $5 cups of coffee.
Sat afternoon: played golf. As usual, every tee time booked.
Today I will do a couple of hours of work. Work that I bill at over $100 an hour.
Later I will go for a run in the park and if I have time head down to a local sports bar to watch a little football.
In other words my weekend has been pretty much the same as every weekend has been for years. Over the past month while we are in this panic or crisis or whatever you call it, my life hasn't changed one bit.
Wachovia and Wamu went under. Oh gee, oh my, whatever will I do? I didn't have any accounts with either. But even id I did, so what? Chase and Wells took the banks over. All that will change is the letterhead on account statements. For 99.5% of the population, this has and will have no effect at all on their every day lives.
You can think of this as a collapse, or you can think of this as a very healthy and refreshing purge.
It's the end of the sickness and the fever has broken.
From 1966 until the mid 80's, the DOW was below 1000. Let it go back to where it was.
I lost a million dollars in wamu.the fucking crooks running that company should be getting pounded by bubba in san quentin.
My wife has been looking for my gun a lot lately.I swear the bitch is out to get me.Now that i'm broke I ain't worth a shit to her.I hope she doesn't get mad when she finds out the life insurance premiums haven't been paid in a year, oops.
anyone see the nascar race last night.?If we are in hard times why do 90000 baffoons still pay 100 to see cars run in circle?
I don't buy it, the depression was and is painted as a complete doom and gloom for every citizen in this country. Sure it sucked but there were many that lived just fine.
anyone see the nascar race last night.?If we are in hard times why do 90000 baffoons still pay 100 to see cars run in circle?
There's a lot fewer "baffoons" in the stands than there used to be. Jeff Burton (oh shit, I gave away that I watch NASCAR) even commented on it during his victory interview.
Times are bad, but not the end of the world. Lighten up, and enjoy the fleeting time you have on this planet.
Bought $100k of Freddie Mac at .25 cents with the money from my cash back fraud.
Sold it for $2.00 per share before the latest so-called Keefer hysteria.
Some crash you effing losers!
Dopes!
"I ask again...on what planet do you people live?"
What, exactly, are you expecting them to do? Do you expect people to uniformly hide in bunkers and eat ramen noodles?
There will be plenty of time for you to deprive yourself and suffer once this thing happens. These might be the last days that you can enjoy that cup of starbucks or trip to the sports bar.
In fact now might just be the time to do it.
There is nothing about those activities that suggest that the people are either calm or unprepared.
"for governments to seek to bypass financial institutions by lending directly to companies and households."
I think that's the only way to save the real economy. Let the financial sector implode, we'll be better of without this cancer. I don't think it can be saved anyway. Think about it, a 10:1 leverage ration caused the great depression, most of the banks were leveraged 30:1 or even higher. 50+ trillion $$ in CDS out there. The problem is there does not exist enough money to settle all contracts, not even a fraction. What we have seen the past few weeks is called deleveraging and I don't think anything can stop it.
It's going to get interesting once paper contracts for commodities turn out to be just paper. Physical goods are disappering from the market, many of these contracts are not backed by anything. I stay in cash and PM.
"Today I will do a couple of hours of work. Work that I bill at over $100 an hour. "
When you won't get paid for what you bill it will put a whole new spin on your weekend, trust me.
Forced to choose between their buddies in the financial sector and the world economy these clowns are busy trying to figure out how to bail out their friends without taking the blame.
"I ask again...on what planet do you people live?"
Actually Keith lives in Great Britain, a damp dreary place even when its socialist economy is working well. Right now its not.
But don't worry. After four years of Comrade Obama the U.S. economy will be as robust as North Korea or Cuba.
Anonymous 1:43....you are thinking tiny picture. Sure, your weekend did not change.
But if you get sick, the emergency room system is overwhelmed. When you need to sell your house to retire in 15 years, it will be worth much less than you think.
As people lose jobs and money, crime goes up....that run in the park may not be so fun.
The bridges and roads are crumbling, when you want to take a trip in the future there will be more and more delays.
If you have kids, they will inherit enormous debts.
If you take you head out of the sand you just might see that this effects all of us long term.
jonh s....4 years of McCain and the entire country would be in rubbles, intellectually and infrastructure wise. War with Iran, draft, no jobs, no progress on energy, and a complete devide of the country.
Obama is the only chance at stopping the Bush-McCain disaster.
Reality will set in when football, baseball, and yes nascar is suspended indefinetly. Screw the bank closings. People in the US have their priorities you know.
As much as the banksters attempt to kick this can, the bush built scheitt sandwich is here and we will eat every morsel; and that goes for the dopes that still have their heads stuck up dark smelly places.
What Reagan started, team dumbya gladly finished. I just hope that marshall law isn't enacted before the elections; as then team dumbya could suspend congress; just like hitler did with the reichtag in the thirties, and sieze total control.
Oh man, would that be a sight on faux tv if they did that. All those fascist freekjobs gleefully jumping up and down waving their arms, screaming, bands playing, confetti, rockettes high kicking, kudlows, and olielys, and spamnitys, smiling and yaking... I can see it already.
Then the notice comes...
Do too uncontrolled circumstances everyone under the age of 42 in the US, that is not connected; is hereby drafted into the US military for patriotic reasons... ASAP, All others stay in your homes until further notice.
The soup kitchens will open soon, and in the meantime watch faux noise for further updates. Good luck comrades, as the ufsa (united fascist states of america) are in complete control!
Remember there was consequences to being collective dumbasses!
Obama wont fix anything... bushco gave him a car with the engine busted transmission stripped and tailight broken...
i feel sorry for the guy... he really got the short end of the stick...
on a bright note. i visited my local coin shop and bought some silver and gold.... i await tommorow to find out what our evil overlords have planned...
meeh being debt free seemes to be the only way to be free in this world... maybe ill stop paying my student loan. pay off my credit card and bounce....
A McCain win would truly be frightening as hell.
The dollar could be replaced by the Amero at 10 to 1 ratio as was the case with the replacement of the Reichsmark with the Deuschmark after Nazi Germany.
I wouldn't rush out and buy Gold or Silver right now though with the polls favoring Obama.
What does it look like?
-----------------------------------
"Hey, what's the score on the college football game?"
"Who's on Idol tonight?"
"Hey, my friend's band is playing at the club tonight."
"Rays beat Red Sox in extra innings!"
Palin's glasses are from Japan!
Lisa Marie gives birth to twins!
Space Tourists!
----------------------------------
The vast majority doesn't give a sh*t.
What happens if the Govt. takes over the banks? Will the banks stay open and will it business as usual?
I think you guys got it wrong on McCain,Bush or Obama. Its the consequences of Greenspan. None of these guys is going to make it better. Though, I suppose its the president that will nominate the fed. So, who is Obama going to nominate? Ben? Heh he....
This crap has been building for 40 years.
I think the Obama supporters are going to be like former Bush supports. They are fed lies but for now they feel happy. Both McCain and Obama voted for the bailout. Both McCain and Obama wanted the illegial immigration disaster bill.
The correct vote was Ron Paul. Now the correct vote is none of the above. Shit, I'm not going to help give these clowns a mandate.
I'm with Yoski. The rot traces back to how money is created. Why do private companies own the currency of all the countries of the world?
ron paul says they're trying to scare us so they can implement something ghastly like a world federal reserve. or a single currency.
"...For 99.5% of the population, this has and will have no effect..."
There is no cause to worry. The high tide of prosperity will continue.
The nations of the world nationalize (or guarantee) their banks
Translation
The nations of the world Guarantee confiscation of funds from taxpayers of the present and future to make good on bank deposits.
Great Idea Keith this will work.
"I do think putting together a Mormon-like emergency kit is probably a good plan.
"
Do it today. Tuesday might be too late.
And on October 14th, when the sun is still shining and birds still sing in the morning, Keith will look quite foolish.
Can anyone recommend a dollar denominated mutual fund that invests in treasury bonds of Japan or Switzerland? My 401K gives me the flexibility to invest in any fund I choose, and I want a way to get of US$ if the need arises.
I'm afraid I have to side with the golfing lawyer guy who said everything is normal. Things don't happen fast in the US. If indeed a massive collapse is coming it is certainly not happening this weekend. Personally, I couldn't care less if the stock market crashes. No one I know has been laid off yet, stores are open, banks are functioning. I'm mad as hell, but this is just silly.
If there is something you need to buy, (food, gun, ammo, fuel, et cetera) now is the time to do it.
"...After four years of Comrade Obama..."
3 months before he takes office, he is to blame for this. I bet 2/3 of the cuntry believes it.
I hardly have any stake in an economic system that has caused me nothing but pain for years now. I am looking forward to a new system. I celebrated when WaMu collapsed, and I still have a bulls-eye on Wells Fargo, Bank of America and Citi. Those crooks have robbed the American public for too long, and the economy will boom with those leeches removed. They are through providing nothing in exchange for cash. The insurance companies too. I hope that they all get wiped out. I am looking forward to it.
Just a general bit of advice: think globally but act locally. Put your money in a local bank. Do not pay money to these Wall Street backed institutions, because they are just mining your town for dollars.
Here is another prediction: it will be a huge fire season in Southern California, especially in the recently built outlying areas surrounding Los Angeles and San Diego.
America’s Minority Mortgage Meltdown/ Diversity Recession: The Smoking Gun?
http://www.vdare.com/sailer/081010_meltdown.htm
The American consumer is to stupid to know when to stop spending, much less understand what is going on around them. Don't worry, Obama will bring back one of histories most famous luxury resorts, the Gulag. Having even one round of ammunition will be life in prison. Having a gun will get you the death penalty. Speak against the government, and a black unmarked van abducts you, never the be seen again. Every house, apartment, and homeless squating freeway underpass will have a loudspeaker for the crack of dawn daily address from Dear
Leader Obama. "Wake up, obey, and produce" Children will turn in their parents, wives their husbands, all for the good of the state. Wake up people, this is where were headed.
It can't happen tomorrow. The US banks and markets are taking the day off from collapsing themselves for Columbus Day.
The Conservatives have won the war, beaten the Liberals, and are now in the process of destroying the Middle Class.
Say "Hello" to the Libertarian New World Order.
Is Excess Global Liquidity from Yen Carry Trade backfiring on Hedge Funds and Speculators.
http://www.thaindian.com/
newsportal/business/
greater-clarity-on-meltdown
-making-investors-jittery_
100105740.html
The latest development that has left investors shivering is the collapse of what is called the ‘yen carry trade’.
Owing to deflationary conditions in the Japanese economy, the interest rate there has come down to just 0.5 percent.
Taking advantage of this, foreign institutional investors (FIIs) and hedge funds borrowed yen denominated loans from Japanese banks and reinvested these funds after conversion into other currencies.
As the cost of these funds was only 0.5 percent, FIIs and hedge funds often invested in assets where the return was sometimes as low as 2-3 percent as these still enjoyed a spread.
Over the last few days, however, the yen has been strengthening against the dollar because of the financial crisis in the US. Just a few days back, the conversion rate was 106 yen to a dollar, but Friday the rate rose to 98 yen to a dollar.
“This means that now FIIs and hedge funds have to repay a lot more dollars for every yen that they had borrowed and the cost of their yen-denominated loans has actually gone up from 0.5 percent to as much as 5-6 percent,” Thunuguntla said.
“This means, with more and more FIIs and hedge funds now being forced to repay what has become high-cost yen-denominated loans, their losses too are climbing,” he added.
Consequently, they are getting into fire sale situations in most global markets to raise money to repay these yen-denominated loans, besides being already under redemption pressure, he said.
In the Indian markets too, FIIs and hedge funds are selling indiscriminately and that is one of the major reasons why the market is crashing.
“The ill-effects of over-leveraging are also becoming clearer and clearer,” said portfolio strategist and US-trained chartered financial analyst Manoj Krishnan of Delhi-based Price Investment Management and Research Services.
After much research, we are no where near a depression.
In 1929 there was no unemployment insurance or social security to backstop people.
>"For governments to seek to bypass financial institutions by lending directly to companies and households."
>I think that's the only way to save the real economy.
Yup, I work for an aircraft manufacturer and I read part of what's depressing this sector is they're thinking companies can't get financing to buy planes.
Jezzz la fucking Weize!!! A year ago an illegal immigrant could get unlimited financing and now solid companies can't get financed to buy EFFICIENCY MACHINES?!? When it is the various efficiency machines and the revenue created making them that will eventually grow our asses out of this?!
Yeah, maybe short term the government has to cut banks out of the loop.
I am glad that I spent every last penny! I have nothing to worry about. All of you Fucked Savers are now really fucked! Way to go HP'ers and F.S. I will still end up living in MY TOWNHOUSE while you live in your shitty rented apartment.
Anonymous said...
I ask again...on what planet do you people live?
Here is a summary of my weekend so far, in this supposed brink of a great depression:
Friday night: went out with friend. Every place was wall to wall people.
Sat morning: went to Starbucks, as usual, packed with people buying $5 cups of coffee.
Sat afternoon: played golf. As usual, every tee time booked.
Today I will do a couple of hours of work. Work that I bill at over $100 an hour.
Later I will go for a run in the park and if I have time head down to a local sports bar to watch a little football.
In other words my weekend has been pretty much the same as every weekend has been for years. For 99.5% of the population, this has and will have no effect at all on their every day lives.
Weren't you wondering where DOPES got off to Keith? Just so you know DOPES!!, your life may be just cherry and of course it is all about YOUR life, but millions have lost 30 to 40% of their retirement. You have put away money during your "oh so wonderful life" to take care of your broke and homeless mom and dad right? How about college for the kids or some private school so they can live the cherry life that you have? Enjoy your lattes dude. What are you doing here anyway?
JaneZ
if your looking to Mormon method for salvation do not overlook Amish
chslaxcoach,
I'm with you. Every emergency exit is apparently blocked.
Game over!
Play again?
Well it was all the democrats' fault. If they would have just allowed the republicans to regulate Fannie & Freddie in 2005, this whole thing would not have happened.
See, once again it's the poor peoples' fault. All those half million dollar McMansions were bought by welfare mothers on crack.
That's what the brainstems are saying.
Keith asks...
So, what does a complete collapse of the worldwide financial system look like?"
I see Slave Auctions in every major city where Americans sell their children to the rich as indentured servants to pay for more granite, hickory, SUV's and flat screens.
We can just tell the neighbors that the missing children went to live with Uncle Henry. No need to worry about the pics on the milk cartons as milk consumption will go way down without the kids at home.
It is all about priorities ya know.
JaneZ
Anonymous Anonymous said...
Bought $100k of Freddie Mac at .25 cents with the money from my cash back fraud.
Sold it for $2.00 per share before the latest so-called Keefer hysteria.
Some crash you effing losers!
Dopes!
October 12, 2008 2:48 PM
Dude, you are so full of it! I mean I don't doubt that you or any other investor may have made spectacular profits like you stated above with your speculative activities. However, you always buy at the very, very, very low and end up selling back at the very, very, very high time again and again! You are either very lucky or a total and complete liar.
Bob Chapman at the International Forecaster on the Quadrillion Dollar Derivatives Powderkeg Waiting to Blow
Are Hedge Funds and Speculators operating beyond panic mode.
http://www.hindu.com/thehindu/
holnus/006200810121180.htm
Outflow of foreign capital from Indian markets has crossed the USD 10-billion mark as the markets continue their slide for the 10th straight month amid the worsening global financial crisis.
The foreign institutional investors have offloaded shares worth USD 10.05 billion (Rs 40,554.80 crore) so far this year, according to data available on the SEBI website.
Analysts said, the huge liquidity crunch in the US and Europe has led to FIIs scurrying to gather funds from emerging markets leading to the huge outflow of foreign capital from Indian equities.
The outflow this year is in sharp contrast with a record inflow of foreign capital, to the tune of 17 billion dollars, in 2007. While FIIs have made a net sale of shares worth USD 932.80 million so far this month, they had offloaded equities as much as 2.05 billion dollars in September.
Even as the Indian government has taken swift actions in view of the global financial crisis including CRR rate cut, the meltdown on bourses is going on unabated and the benchmark Sensex is down over 50 per cent from its January 10 level.
Gotta love all the Pollyannas;
Yea, the Great Depression wasn't all that bad only 1 in 4 workers where unemployed. Who cares if others are suffering, I'm just fine, let them eat cake. Socialism is evil, but, but, we can't let GM, Ford, and Chrysler go down. Our consumer based economy will be fine, we don't need no stinkin credit, just save up for a few decades for a housing downpayment. Don't blame Wall Street, they need to put food on their children's tables too. Don't blame investment banks if securitizing ultramegahyper risky mortgages and selling them to suckers globally might have led to global financial meltdown and the fallout that follows. And don't blame poor Fannie and Freddie, if they had been better regulated then they would have had at least a miniscule chance of solvency when they were forced to shoulder more of the mortgage guano this year. And we should all be thankful that our great leader GWB and his men have decisively, honestly, and with the hightest competence dealt with this near disaster. Thankfully, he had good practice down in New Orleans awhile back. And those of you that can't make ends meet or can't find any food scraps to eat, don't come knocking on my door, cause me and Mr. Remington 12ga shotgun have an answer you might not like. May God bless the USA more than those Eurofolks, Arabs, Asians, heck even more than the good ole UK.
Is Cash King right now.
http://www.business-standard.com/
india/storypage.php?autono=336984
Expect unprecedented instability ahead, warn FIIs
Foreign institutional investors (FIIs) have been on a selling spree and today they were net sellers to the tune of Rs 2,513.73 crore.
They have offloaded Rs 7,356 crore worth shares on the domestic bourses in the last six trading sessions.
A representative of a leading FII said, “Most selling has been sentiment-driven, but we have observed that most selling has been without thinking.
There is a lack of knowledge among retail and HNI investors everywhere about the implications of the developments.” He added: “Their priority has been to generate cash and be risk-free.”
The crash in oil and other commodities is saving the little man.
Today fuel is dropping 40% from 6 months ago
Tomorrow food prifces will collasp
Hi,
Will the jackass who is obsessed with the "Yen-carry trade" stop posting pages of crap that are irrelevant to ANY discussion here?
Thank you. You are the reason why the open threads were ended.
A depression is where the losers write history.
"But if you get sick, the emergency room system is overwhelmed."
I guess, like available jobs and manufacturing presence, it depends on where you live.
I don't know where you are, but emergency rooms are not overwhelemed where I'm at. I live in a top-15 metro area and was just in an emergency room with my daughter a few weeks ago. There were 3 patients in the waiting room at 8pm. All 3 were taken into exam rooms within 30 minutes.
I remember in the mid-90s checking myself in at the ER for stitches. They let me bleed for six hours, from 8am to 2pm, before giving me care. By then I was dizzy from blood loss. One guy with a stab wound gave up and left after a couple hours, saying he'd bandage it himself and hope for the best. If anything, healthcare has gotten better although more expensive by multiples. Again, at least where I live. Your mileage may vary.
I think George Bush and Congress are doing exactly what Americans want them to do. That's all I have to say. :)
Is Henry Paulson going to tell Troubled Assets Relief Program manager Neel Kashari to use fake money to buy back fake mortgages then tell investors everything is fine.
Did Institutional Investors get the detail of the Ponzi scheme before the regular investors understood what was going on.
If this Ponzi scheme is the real plan, then would it make sense that institutional investors were dumping everything in the equities markets around the world before regular investors understand what was going.
Anyone wonder why foreign institutional investors think that cash is king.
Is it a prudent idea to hold Mortgage Back Security at this time.
Will regular investors try to get out next week.
http://seekingalpha.com/article/
99575-paulson-in-a-state-of-panic
?source=article_lb_articles
The government is forcing Fannie and Freddie to buy $20B each per month of subprime, Alt-A and non-performing mortgage securities.
This program is in addition to the $700B TARP, but the GSEs can sell their existing $210B of toxic mortgage to the TARP.
Talk about twisted logic. As usual, sources were not revealed because the plans are supposed to be confidential.
Even though Paulson clearly stated the GSEs will not be run “to maximize shareholder returns”, they should not run for shareholder annihilation either.
Paulson has not laid out a clear direction for the GSEs and loading more toxic mortgages on their books will not return them to health.
If his objective is to use the GSEs to cleanse mortgages (buy cheap and modify or foreclose), than Paulson must state whether the operation will be for profit or charity.
Here again, we need to know what the plan is or even if there is a plan.
As Paulson shifts the TARP to purchasing bank equity, it appears that he is using the GSEs to pick up the rear.
Even in conservatorship, shareholders have a right to know how their company is being run.
Who is this King Henry wannabe?
Paulson’s original request basically said, “I want $700 billion and I want it within a week with no questions asked.”
Paulson’s two and a half page plan contained the following caveat:
“Decisions by the secretary pursuant to the authority of the act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Just who is this King Henry wannabe? Well, for one, he is former chairman and chief executive officer of Goldman Sachs, the investment bank that was allowed to become a holding company overnight during this crisis. Goldman and Morgan Stanley received approval for this transition from the Federal Reserve Bank
They have failed us miserably with their reckless spending and now with this bailout of what essentially was a government sponsored ponzi scheme (subprime lending).
http://www.recordernewspapers.com/
articles/2008/10/11/the_progress/
opinion/columns/
doc48ee1b933759a608293523.txt
Were you the home buyer, who forgot how to save, and thought it was possible to get something for nothing in the form of subprime mortgages.
Or were you the investor who came to believe that the risk of default on subprime mortgages was low relative to the return they offered.
Didn't both buyers and investors underestimating the risk of these innovative financial product.
Now you think that if there was a greater Ponzi scheme then this can bailout the last Ponzi scheme.
TED SPREAD has widen out of control.
http://www.bloomberg.com/apps/
quote?ticker=.TEDSP:IND
Fear and uncertainty roil world economies
The United States, once the engine of the global economy, is ailing and in no position to inspire confidence, much less point the way around or out recession.
Americans are seen as both the root of the problem, and powerless to solve it.
But no government effort has been able to stanch the bleeding — even the unprecedented coordination of central banks on three continents, which only generates more fear.
The liquidity provided by the European Central Bank, for instance, seems to be going through a revolving door.
After releasing billions of euro into the market, the bank took in a record euro 102.8 billion on September 30 and euro 64.4 billion on Thursday last week for banks.
Instead of lending their spare cash to each other or the rest of the economy, banks have parked it with the central bank at ultralow interest rates.
If you bought Wells Fargo at .75 cents and sold it $6.40, you really got hammered didn't you?
I think you mean Wachovia (WB)?
I suspect this guy is looking at charts to find what WOULD have been the most profitable entry/exit points for a past trade, and then claiming he made it. Oh, well: wouldn't be the first time someone lied about their trading skills on-line, LOL!
Anyway, I saw WB' developing in the aftermarket on a Thursday afternoon, when Wachovia announced they were to be bought out by an unnamed company. WB popped a bit, and was trading around $1.90 when the news came out. The price went up to $2.30 within a few minutes and I considered buying via ARCAS, the after-hours trading system.
Fortunately, I managed to show some restraint, as I never buy (esp. with such a beaten-down stock!) without doing research, or knowing WHO was making the offer, or how much the offer was.
The next morning, I saw it dropped to less than a $1.50, as Citigroup had offered $1 per share! By Monday the stock was trading around $0.75, asa pparently the FDIC had strong-armed the deal and Citigroup offered to buy @ $1 per share.
It stayed down there for a few days, UNTIL Wells re-emerged and showed renewed interest, and offered more like $6 a share! Of course, this pissed off the Fed negotiators who worked the deal over the prior weekend, and Citigroup who thought the deal was in the bag. Regardless, the price jumped up to the $6 range. On Friday, WB closed at $5.15.
My point: DOPES, unless you have some insider information in these companies, esp. Wells Fargo, then you were gambling BIG-TIME! You either got very lucky with the timing, or knew something.
Anyone who bought a stock of a company that was on the verge of BK, where the fate of the prior shareholders hadn't been announced by the buyer, or not knowing what the offers would be, is gambling. That stock very much looked like it was going down to bankruptcy, and ALL the shareholders of the common stock would be completely SCREWED, losing ALL their money.
So betting on it without inside information (which is illegal, BTW, and draws a bit of attention from the SEC!) was akin to placing all your money on Black for one spin of the roulette wheel.
Sure, you COULD win, but that was one risky bet,, UNLESS you had good reason to suspect otherwise. And if you had insider information, well, then you're breaking the law by profiting from it.
Can't lose, you say? Well, it's happened to MANY shareholders; just look at charts to realize WB WAS trading at $51 as a 52-wk high, so a "buy and hold" or "dollar-cost averaging" investor has lost only 90% of it's peak value. Same story for a lot of the other banks.....
I'm sure you know to use tight stops, and never hold a stock overnight: too much volatility to trust ANYONE. If you don't, then you've got some mighty huge balls, my friend.
I've seen more people get wiped out in one risky trade like that than in hitting a home run. In fact, the ones who DO hit a home run inevitably give it all back in the long run, as they get too overconfident, too cocky, and trust their skills more than they should.... Any experienced trader will tell you It's all about discipline, and protecting your profits by taking the lowest-risk, highest-reward trades you can find. Check out alphatrends.net for an example of someone who's been doing day-trading properly for years, BECAUSE he doesn't 'swing for the fence' on every trade.
PS it kinda sucks that the economic meltdown has FORCED people who wouldn't ordinarily do so to become gamblers, whether they want to or not! At least in Vegas, you get served free drinks by hotties wearing short skirt while you're playing the tables!
"I ask again...on what planet do you people live?"
For those of us who don't stick our heads in the sand, we see folks struggling.
Well see what happens to GM and Ford but one or both might go bankrupt and pension holders will be left with an income cut, not that non-pensioners like myself think that's unfair.
But life will certainly be getting more interesting for everyone.
Nick said...
I am glad that I spent every last penny! I have nothing to worry about. All of you Fucked Savers are now really fucked! Way to go HP'ers and F.S. I will still end up living in MY TOWNHOUSE while you live in your shitty rented apartment.
Townhouses and condos are for latte drinking pussies. Is that all you could qualify for Debtor Boy? I remember a while back when they took all of the apartments here in town, put new carpet and stainless in them, evicted the renters and turned them into condos and townhouses.
Condo Pussies don't fool anybody.
Be a man, buy a house. (If you can qualify)
JaneZ
Janez wrote:
"Townhouses and condos are for latte drinking pussies. Is that all you could qualify for Debtor Boy? I remember a while back when they took all of the apartments here in town, put new carpet and stainless in them, evicted the renters and turned them into condos and townhouses.
Condo Pussies don't fool anybody.
Be a man, buy a house. (If you can qualify)
JaneZ"
To all the men out there, Jane's statement is reason enough to never get married. I pitty the guy who is married to her.
I agree with the person who spoke about having a regular weekend..went to starbucks this morning and got my coffee usual crew in line, went grocery shopping semi busy, outside along with other neighbors working on gardening since the weather is nice..see not the whole world yet have been affected by this..are you retiring today? NO..not for about 30 more years, have my investments gone down..yes.. but I don't need the money right now..am I selling my home now? no, plan on living here for another 30 years..gas prices high? Yes..but I work at home..so life goes on..
Anon 4:21 asks, "What happens if the Govt. takes over the banks? Will the banks stay open and will it business as usual?"
---------------------------
After The Feds took over IndyMac, the only thing that changed is the monthly statement's letterhead and envelope now read, "IndyMac FEDERAL Bank."
Nothing else will change, will it?
Will it?
Will it?
Yikes!
-Mammoth
The banks aren't being nationalized, they are being privatized by Hank Paulson and his wallstreet/banker cronies.
The real intent of the $700bil+ "bail-out" is now coming to the forefront - to buy up bank equity and not bad mortgage securities.
This is not good for the country, and is more proof that additional
inteference by our government will only make matters far worse for US tax-paying citizens.
People, it's time to wake up and understand that you're being played by elite criminals like Hank Paulson:
Who is Hank Paulson?
Understand:
1) There is an elite.
2) They don't give a f*ck about Joe Sixpack.
3) They've been gaming the system for centuries.
4) You're not in the club.
5) If you do a little research of your own and turn off the f*cking boob tube bubble news media you can learn about who really controls society (hint: it's not Dubya Bush, McCain and Obama).
It is the question on the minds of New Yorkers, once they stop pondering the fate of their 401(k)'s: If the city's economy sinks to depths not seen in decades, will crime return with a vengeance?
Expert opinions differ, but the question is hardly illogical. The last time stocks on Wall Street fell hard, in 1987, crime was exploding, and the city saw historic highs in murders in the following years.
Before that, the fiscal crisis of the 1970s helped lead to the abandonment of neighborhoods, failing schools and startling crime rates: robberies built through those years to a high in 1981, when there were 107,495 of them, for an average of 294 a day. (Last year's total reported robberies, 21,787, was the lowest figure in modern history.)
"Every recession since the late '50s has been associated with an increase in crime and, in particular, property crime and robbery, which would be most responsive to changes in economic conditions," said Richard Rosenfeld, a sociologist at the University of Missouri-St. Louis. Typically, he said, "there is a year lag between the economic change and crime rates."
http://finance.yahoo.com/
banking-budgeting/article/
105937/
Keeping-Wary-Eye-on-Crime-
as-Economy-Sinks
Excellent video - worth watching a second time around as well - Bill Moyer is also an excellent journalist.
Regardless of Mr. Soros's own self-interests, his points are right on the mark, and speak the truth about the financial disaster we are in today, and where it's headed.
What concerns me is when Soros stated that the government authorities are still behind the curve in dealing with the problem.
If we had addressed this problem several months back, we might have had a chance to minimize the problem, but since we've waited - Paulson/Bernanke reacting as each new crisis occurred - the tax-payer debt required to resolve this crise now will be much higher than what is currently being estimated.
I agree with Soros's thinking because it simply makes sense - a completely objective view as to what is really going on with this crisis today.
Also, no one knows how long this crisis will last, and as was pointed out clearly in this video, if we want a better outlook in the future the right decisions have to be made now.
The right decisions are still not being made by the government authorities, so we can draw our conclusions as to what the future will look like pretty clearly.
Soros's diplomatic remarks about Paulson's incompetence (since Paulson is just part of the problem) were nice to here as well.
Andrew said...
Here is a good perspective on the situation from George Soros:
http://tiny.cc/kq1Wk
Key points- the economic motor of US consumers spending more than saving has been shut off- it will not return.
Investment in energy will fuel growth in the future(Keith,you may want to register energypanic.blogspot.com)
Market fundamentalism is a false idea
Enjoy the vid; it is worth the 25 minute investment.
Get off it. The Depression had VERY LOW crime rates.
The only reason a society has crime problems is because controlling crime is not as high a priority as other things...such as social justice, punishing the police, and making sure minorities are not overrepresented in jail.
So NYC will get their crime back, but only if they want it. The economy doesn't matter, as most of the criminals don't work in the first place, and most of the workers do NOT become criminals once they get a pink slip.
Anyone remember the last financial crisis when the federal government had to layoff.
http://federaltimes.com
/index.php?S=3766417
Will there be layoffs at the U.S. Postal Service?
That’s the buzz among the agency’s 670,000 workers as signs grow that the agency is sliding further into financial trouble.
“We’re trying to match our work force to what the workload is,” Frey said.
If the Postal Service can’t increase mail volume, it won’t have enough money to pay staff, said postal expert Murray Comarow, who led the commission that was responsible for restructuring the Postal Service in 1971.
“Unless they tell Congress they don’t have the money to pay these guys, they will have to lay people off,” Comarow said.
Congress has denied the Postal Service the ability to raise postage rates to cover costs.
“I don’t know what else they could do except trying to change various constraints in the law that are more limiting of USPS management than any other company in the private sector,” he said.
Postal workers worry the deepening financial crisis could exacerbate the agency’s problems, which were brought on by rising energy costs, rising paper costs, and a heavier public reliance on the Internet to pay bills and communicate.
david said...
Janez wrote:
Condo Pussies don't fool anybody.
Be a man, buy a house. (If you can qualify)
To all the men out there, Jane's statement is reason enough to never get married. I pitty the guy who is married to her.
My husband is a good speeler, and he has a paid for "manly house", retirement savings and a wife who doesn't go to the mall or watch HGTV and spend his hard earned money on worthless bullshit to impress the neighbors. Actually our neighborhood had a coop garden this summer that was kick ass. Good time was had by all.
In church this morning we had our weekly "good news/bad news" moment. First we hear about the babies born, the marriages and happy occasions. Then we hear about the tragedies people have experienced for the week. Couple after couple got up this morning and cried in church because their retirement savings have been cut in half in the last two weeks. These people are 70/80 years old and have no where to go to get money. One woman said that she had lived through the last depression and she can't believe that we didn't learn our lesson.
Save your pitty for the ones who need it and stop missing the point.
JaneZ
Here's where we are now:
BIG PEOPLE MANAGEMENT PLAN.
Management Plan A:
Start war with Iran----
Control remaining World's Oil Supplies.
(Aborted---Russia pulls out can of whoop-ass and says "Be your own Judge puppydawg!!!)
(Management Huddle)
MANAGEMENT PLAN B:
Crash World Economy and Financials.
Result: Implement One World Money System a tad ahead of schedule, but we gotta make a showing here.
Advantage: Early implementation of ONE WORLD MONEY. (Screw the Timetable, time is geeting short.
SIDEBAR: OOOPS--Israel launches a few nukes of their own in anger that they are being ignored.
PROBLEM: Russia stomps heavyduty butt several places. Paki's and India feeling neglected launch a few of their own at each other and whoever they can reach. North Korea feeling left out restart Nuclear Program for the 19th time.
Management Huddle with King James Version to see what order this is actually needing to be in----OOOOPS, but at least we are getting "somewhere".
With the amount of Subprime, Alt-A, and Options Arm loans made in California, you would expect that the whole economy was center around bad mortgages.
http://www.informationweek.com/
news/management/trends
/showArticle.jhtml?
articleID=210900031
Non-Market Meltdown Layoffs Hit Silicon Valley
Layoffs are on the rise, in California and elsewhere.
Some of the job losses can be tied to the state of the economy; some of them have more to do with post-acquisition reorganization.
The California Employment Development Department last month said that 1,417,000 people were unemployed in the state in August, up by 61,000 from July and by 413,000 from August 2007.
The state's unemployment rate in August was 7.7%, up from 5.5% in August 2007.
According to the Bureau of Labor Statistics, there were 1,772 mass layoffs involving 173,955 workers in August.
This is the highest number of unemployment insurance claimants for the month since August 2001.
Thank you Mammoth... I read all of your comments btw.. you're good
My margin account has been slashed!
I have been wondering if this would happen but to actually see it is shocking. My currency trading account has had its margin slashed from 100:1 to 20:1! Without any notification which is obviously illegal.
This takes my positions from an average leverage of 3% which is a very conservative play to 16% which is getting very dangerous.
People that had higher leverage than me and are not paranoid enough to check their accounts on the opening of the currency markets will get margined out of even winning positions if they have high leverage and their positions temporarily move against them.
Your brokers are in survival mode - beware!
Rental investors will no longer be able to rob Peter to pay Paul according to this video.
As TED SPREAD widen rental investors that did not calculated their debt to earning ratio correctly will need to a new source of income.
http://www.cnbc.com
/id/15840232?video=885592691&play=1
Credit Crunch in Silicon Valley
Many homeowners are losing their lines of credit, that is the next wave of the credit crunch.
Keith, would you start a post titled,
Time to put on the bathing suit and jump in?
Yes or No?
I've been keeping all my ammo close and think this is the time to go in at least 50%. Of course a little apprehensive though.
Here's something:
http://www.msnbc.msn.com/id/27150458/
"McCain considers new proposal
Sen. Lindsey Graham, a South Carolina Republican and key McCain adviser, said on Sunday that the candidate was considering a new proposal to lower taxes for investors (speculators, in other words) by cutting back the share the government takes from capital gains and dividends."
So this idiot wants to give MORE of our tax money to the very greedy imbiciles who got us into this effluent? Just so he can get a few more votes?
"Who is Hank Paulson?"
One of the greatest criminal minds the world has ever seen. Heisting 700 billion right out from under our nose. He did much more damage to our country than Bin Laden was even dreaming of doing.
Angry Harry doesn't think nationalisation is good.
http://angryharry.com/
"Nationalisation Rumours Shock Markets Shares in Royal Bank of Scotland (RBS) collapsed yesterday, dropping 39 per cent amid fears that shareholders’ investments would be wiped out in a part-nationalisation of the UK banking sector.
For those who think that nationalisation of the banks is a good idea, bear in mind that the more that the government influences loan decisions by banks, the more will men lose out - because decisions based on political correctness rather than on financial considerations will start to prevail.
For example, those in the usual privileged 'minority' groups will likely receive far more favourable deals - e.g. pay less interest - than will white heterosexual males.
Milking The Taxpayer A mother of seven is being paid £170,000 a year in benefits so she can live in a £1.2 million mansion..."
Oh god no,
guess who is heading the new "Office of Financial Stability", charged with overseeing how the $700B is spent? Neel Kashkari
Care to guess what company he used to work for?
Hint, Paulson.
Yup, none other than Goldman Sachs.
We are F**KED
Don't worry folks. The G7 is going to fix this by nationalizing banks. Just like the 700 billion was going to fix this. Just like how it was "contained" to sub prime.
I used to hate you, but I have repented. :)
If it wasn't for guys like you, Schiff, Casey, and Brussee, as well as the other real time crisis watchers online, we would not have been as prepared, financially and especially MENTALLY, for the challenges.
All in all, you provided a valuable FREE service and I as well as others owe you and the others I've mentioned a debt of gratitude.
Thank you sir.
ASIAN MARKETS ARE UP!!!!!
GAS IS DOWN!!!!!!!!!!!
GOLD IN THE TOILET!!!!
HOUSING IS UP!!!!
SOME MELTDOWN!!!!!!!!!!!
DOPES!!!!!!!!!!!!
Jane please hand me the microphone,
thank you.
Nesting 1-2-3
Nesting Nesting
Nesting 1-2-3.
yup your microphone works.
Coconutz!
National Bank of Uk and Oz ... USA is next. Sweet
Whopper Rally on Monday!
BOJ for many years HPer's have told you this day will come, and you had the chance to prevent it from growing out of control but choose to do nothing.
Now there is nothing you can do about the destruction that comes with the unwinding of Yen Carry Trade.
Connect the dots. Can you see why TED SPREAD gap is widening.
http://www.moneyweek.com/
investments/
what-is-the-carry-trade.aspx
The end of of the yen carry trade could be devastating for capital markets throughout the world.
Experts estimate that there are several hundred billion dollars of positions in the carry trade to be unwound.
David Bloom, currency analyst at HSBC, says that it has pervaded “every single instrument imaginable”, so that when it comes to an end later this year it’s going to be “ugly”.
Many people will now be nodding their heads sagely, perhaps as they did when they were told that it was responsible for driving financial markets higher.
But what is the yen carry trade? Put simply, it is borrowing at low interest rates in yen and using the loan to buy higher yielding assets elsewhere.
During the past decade, the trade has become a “staple” for many investors, says William Pesek Jr on Bloomberg.
Perhaps the most popular form of the strategy exploits the gap between US and Japanese yields.
Anyone borrowing for next to nothing in yen and putting the money into US Treasuries (US government bonds) has received a double pay-off: from an interest rate difference of more than three percentage points and from the dollar’s rise against the yen.
Investors make their profit when they reverse the trade and pay back the yen loan.
An end to Japan’s zero interest rate policy might lead to yen appreciation (low interest rates usually mean a weak currency), and so an end to those benign, “no brainer” conditions that have justified the ‘carry trade’ and been so supportive of other asset classes. Borrowing would become more expensive and foreign exchange risk would be higher.
And it’s not just Japan. The eurozone, Sweden and Switzerland have already turned off the tap of ultra-cheap credit, says Ambrose Evans-Pritchard in The Daily Telegraph. But Japan is by far and away the most important.
http://www.financeasia.com/
article.aspx?CIaNID=86202
Mohr also identifies the yen carry trade as a factor pushing down the market. “The yen carry trade has an amplifying effect, in both good times and bad times.
In bad times, the carry trade is unwound and the yen strengthens, which is bearish for Japan’s export profits,” he says.
http://www.efinancialnews.com/
investmentbanking/index/content/
2452140339
The only factor keeping demand - and faith - stong is the fact that bond markets, in nominal terms, asct as the most important chip in the gambling casinos of our markets.
Risk-free profit mechanisms - connected to the yen carry trade and the derivatives markets create" just about the only demand for the dollars in the world.
That, in turn, stimulates the demand for treasuries and from this, the rest follows.
RE: "anyone see the nascar race last night.?If we are in hard times why do 90000 baffoons still pay 100 to see cars run in circle?"
**************************
A. Because all the Bush, McCain and Palin supporters need something to do.
There is no Bin Laden. Its been all one big scam.
Anonymous Anonymous said...
Nick said...
I am glad that I spent every last penny! I have nothing to worry about. All of you Fucked Savers are now really fucked! Way to go HP'ers and F.S. I will still end up living in MY TOWNHOUSE while you live in your shitty rented apartment.
Townhouses and condos are for latte drinking pussies. Is that all you could qualify for Debtor Boy? I remember a while back when they took all of the apartments here in town, put new carpet and stainless in them, evicted the renters and turned them into condos and townhouses.
Condo Pussies don't fool anybody.
Be a man, buy a house. (If you can qualify)
JaneZ
October 12, 2008 8:59 PM
Jane Z, all I hear from your posts is HATE, HATE, and more HATE. Too bad you are jealous and full of so much rage. Jane, I live in a townhouse and not a condo. Yes, you are correct, here in Chicago during 2002 to 2006 they did convert a lot of apartment buildings to condos by putting in hardwood floors, granite countertops and and new kitchen and bath and end up selling it for 250K to 700K. But the new owners made out like bandits because they usually spent all of their equity. Like I said; I am not worried because I spent every last penny. The only people who are very worried are those who live in a shit hole apartment, drive a 1982 Honda, won't eat out and have massive savings in cash. Time to worry Fucked Savers, time to worry.
I wrote the post at 1:43 that seem sto have gotten so much negative feedback.
First off whoever assumed I'm a lawyer, please dont insult me like that.
Second, I never said everything was perfect. It isn't, never was, never will be. Keith said the world is about to collapse. I responded that he is wrong and for the bast majority of people, today is like any other day.
And what do you know? It's Monday. The markets will open. Asia is up 10% overnight.
Here's my prediction: for 99.5% of the people, this week will be like last week. They will go to work, they will come home, they will watch TV, they will go out to dinner, they will go to sporting events, they will take their kids to school. Oh and they will watch a little more CNBC than usual.
And there we go, there goes the great panic of 2008 that never really happened....excect in the MSM and on blogs.
Nick said...
Jane Z, all I hear from your posts is HATE, HATE, and more HATE. Too bad you are jealous and full of so much rage.
The part about being not being a man really made you mad didn't it?
I don't hate anybody and I have beautiful stone counter tops and hardwood floors that my husband and I put in ourselves. Woo hoo.
I hate greed and status junkies like yourself because it is your selfishness that has caused this entire mess with the help of the realtors. You come to HP and brag about how greedy and selfish you are, and then assume that we are all "jealous". That is the operative word of the status junkie "Everybody is sooo jealous of me".
Sorry if calling you a pussy hurt your feelers. I am sure your granite is very nice.
JaneZ
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