10/9/08 - FSME Denninger Special Report - IT'S HERE!

reply to post by anachryon



Last ditch effort is right. There are no more rabbits to pull out of their hats, if this doesn't restore some confidence what's left? But it still doesn't address the underlying problems.

As long as you all realize that these types of efforts are paid for by someone down the road and that's you and me.

So, what about the US? Are we being left out of it now? God help us!

reply to post by Relentless


Correct, the EZ guarantees do not cover US banks. The US would have to enact similar guarantees to cover us.

I don't see how they can't do this now that the EZ is...I hate it, I hate it a lot, but if they intend to really address the problems, this may buy some time to do it.

Originally posted by Relentless

Nope - what I'm saying is we have no clue what will happen.

To put another way, the market could go up 1000 or down 1000, a larger movement then ever recorded and I do not think anyone would say unfeasible. Three weeks ago everyone would have said: "unfeasible". Think about that.

As promised......

Bernake Lies

Paulson Lies

Now, if you read those links and then think anyone who says calm down, these two will fix it, I gotta ask you:

Do you think these were mistakes? If so, they are pretty bad ones, so personally, I don't see how they can save us making such bad calls.

or

Do you think they were lies? If so, you wanna trust them to save us?

reply to post by anachryon


From the language of the address from the EZ I will not assume it is enough to free up credit markets at all...

In fact the way I see it is government oversight and guarantees for short term loans via bank to bank .. the Over Night loans have seen interest rates sky rocket (LIBOR) and banks are sitting on cash afraid to help out other banks for fear the bank may collapse anyways.. These makes secure banks more protected, it makes exposed banks very fragile..

The EZ wants to ensure the Sound banks that the Fragile banks, even if they collapse, will still repay the loans..

Of course, if banks begin lending to each other again, they are more willing to loan to small businesses, state governments etc..

But what it REALLY comes down to in the credit market.. is that at some point you WILL reach that point of "to much credit" .. to much money loaned out in all forms of exotic loans.. to stop all credit and consolidate the credit you have is a responsible thing to do.. it hurts the economy, but lets face it people.. the Western World is debt driven. When Credit Lines freeze, and businesses suffer, it shows the health of that business.. no reserves, no capital, when the loaned money freezes they collapse..

It basically, to me, means we have a very, very unhealthy economy.. credit extension CANNOT lead to a sound economy in the long run..

Originally posted by Relentless
As promised......

Bernake Lies

Paulson Lies

Now, if you read those links and then think anyone who says calm down, these two will fix it, I gotta ask you:

Do you think these were mistakes? If so, they are pretty bad ones, so personally, I don't see how they can save us making such bad calls.

or

Do you think they were lies? If so, you wanna trust them to save us?

I find it funny both Bernake and Paulson were quoted as saying the subprime mortgage thing was no big deal and both were contained. Yep no big deal...

reply to post by anachryon


So, are we being blackmailed, or have we just been put in our place? Interesting turn of events (the rest of the world taking the lead on this, with the US seemingly still on the sidelines).

If the US does it too, it will buy us time. Pray to God that gives J6P the time to demand the US really fixes it during that time. It's gonna cost us big either way.

reply to post by Relentless

November 15th, 2005
Moreover, the agencies have made clear that no bank is too big too fail, so that bank management, shareholders, and uninsured debt holders understand that they will not escape the consequences of excessive risk-taking. In short, although vigilance is necessary, I believe the systemic risk inherent in the banking system is well managed and well controlled.

HAHAHAHA!!! *gasp* HAAAAHAHA!!

Oh that's just rich! No bank is too big to fail? Consequences of excessive risk-taking?
How far in the sand was Ben's head?? Jesus!

reply to post by Relentless


I don't think we're being blackmailed. We may have been put in our place, but I think this is more of an "every man for himself" situation. The Euro as a currency is in a whole lot of trouble right now, so, while I was kinda shocked at the news, overall it doesn't surprise me that they're throwing everything they can to try and prop it up.

Honestly I don't think anyone making these decisions gives a damn about what happens in other countries, they're just concerned about their country. Everyone saw what happened to Iceland and they do NOT want it happening to them on their watch.

I hope it works, I really do. I hope it buys some time and I hope it calms heads enough for REAL solutions to be worked out.

Originally posted by Rockpuck

But what it REALLY comes down to in the credit market.. is that at some point you WILL reach that point of "to much credit" .. to much money loaned out in all forms of exotic loans.. to stop all credit and consolidate the credit you have is a responsible thing to do.. it hurts the economy, but lets face it people.. the Western World is debt driven. When Credit Lines freeze, and businesses suffer, it shows the health of that business.. no reserves, no capital, when the loaned money freezes they collapse..

And aren't we already there (too much credit)? If the EZ is taking such drastic measures that they are going to actually compound the problem exponentially from what I see......

It basically, to me, means we have a very, very unhealthy economy.. credit extension CANNOT lead to a sound economy in the long run..

Yep, this is not going to make me sleep any easier tonight.

I think that the crux of the problems stems from the fact that so much credit has been used for so long, that everyone is waking up to the fact that there is not enough capital or collateral or both to ever clear the credit bill.

How can they extend more of something they don't have in the first place.

Hence the term: Credit Bubble

Party A has extended credit to party B that is 40x more than any capital or collateral available to secure the credit

B extends to C and so on

Someone finally realizes that the Emperor ain't got no clothes and that even if they called in every marker that was out there, they could NEVER get back what they gave out in "good faith credit", never mind the interest!

Ah the joys of watching the implosion of a global fiat money system

reply to post by Relentless

And aren't we already there (too much credit)? If the EZ is taking such drastic measures that they are going to actually compound the problem exponentially from what I see

Yes, pretty much.. that is exactly what they are trying to do. Everywhere everyone is trying to do this..

Credit was a disease in our economy.. when money owed to a ratio of money in actuality, or even the ability to raise money is so far out of proportion, by God the system will fail. Look at Iceland, with $110 BILLION in exposed debts .. and only $14billion in GDP ..

But if debt was reined in, pulled back, cut, or suspended in anyway, the economy would have collapsed.. so you extend a little more.. a little more .. little at a time .. This all gives the illusion the economy is fine, growth and prosperity.. then like a rubber band pulled to tight, it snaps, and the whole system comes down.

Our current economy is an illusion.. we are a people that produce nothing.. most of our jobs in this country are service jobs of some sort that service our own people.. like a massive revolving wheel of wealth, so long as the ones on the bottom get paid enough to secure the debts they have while expanding credit lines via HELOC's and Credit Cards, the Service Economy of Debt can continue to expand.. giving the illusion of wealth, prosperity, and happiness.

So if the banks are secure in loaning money, the businesses that employ the Consumer, the life blood of the economies, can continue to pay them, if they get paid, and can continue to expand credit then the economy sees "growth" ..

SO FAR ... the average person has not been directly effected by the situation given it's severity.. unemployment is rising, inflation is rising, consumer confidence is falling.. but if the system is fixed before the consumer directly on a massive scale is effective, the economies of the Western World will survive this..

But without credit extensions, the consumer cannot consume... and if our current wage's do not rise in proportion to the needed credit expansion for the economy, the economy will stagnate and eventually collapse in on it's self.. we will literally be eating our selves from the inside out..

If you have not noticed since 2000 foreign capital infusions have been needed to sustain the large corporations that employ the Consumer.. capital in many corporations is collapsing, the infusions from abroad are not coming in as easily, and now they cannot take out short term loans to cover expenses and even payrolls...

Give it a few more weeks, and I believe we will see hell break loose across the World as industries fail...

reply to post by redhatty



And for those of you that haven't seen it yet - please stop by redhatty's awesome timeline thread here:

www.abovetopsecret.com...&addstar=1&on=5122337#

It's a phenomenal contribution to the big picture.

Originally posted by Rockpuck
reply to post by anachryon

 

We have seen banking consolidation before,
But never has it been consolidated by Governments.. If the Government get's in the business of banking, which turns a huge profit, the laws will no longer be worked out to protect the individual but rather the baking entities and thus the government being attached the banking industry as well. For the little guy, this is concerning to watch.. I will now be paying my high interest rate loans and credit card debts to the Government, and not to the greedy banker.. then again, I guess now there is no discerning the difference between the two?

My knowledge of finance is , admittedly, limited to the taxation end of the pool.
I am currently employed by my state's tax board.



I have two questions regarding the government, any government, insinuating itself into the banking industry as a de facto "co-owner/co-signer":



1.) Since these "federally backed guarantees" would be funded by federal revenues (which is to say taxpayer dollars); what happens when the tax "revenue stream" dries up due to the various economic factors planned and already in play?

Falling home values, rising unemployment, on-going and "promised" future tax cuts will all play a significant role in Reducing the funds the goverment (US) will have to secure these promises of support.

This point seems to have been "glossed over" in the reports I've read.


2.) With ownership comes Access. Will the government's "stake" (ie.: ownership share) in these banks allow the government more streamlined (or even unfettered?) acces to customer accounts?

I can forsee some "interesting" legal issues developing over due process procedures where account seizures for taxes, fines, and fees are concerned.

And if the government is your "banker", would the government still need at least the Pro Forma of a warrant (or at least, probable cause) to "snoop" on you, their "customer" 's every financial transaction?



Is This what they really meant when they talk about "Changing the fundamentals of the financial system"?

reply to post by Relentless


Aww, thanks Relentless!

You are my Favorite FSME here even before that wonderful compliment

You keep doing what you're doing and I'll keep trying to find ways to help the scoffers see the big picture too

Video update from Karl yesterday.

www.youtube.com...

My own personal opinion is that I believe all of this has been planned years ago by goverments. and the very sad part is that 8 out of 10 people that I associate with know NOTHING about what is going on, or has been going on with wallstreet, bailout, etc.. Most do not even watch tv..
THEY are the people I fear most when humpty dumpty falls off the wall..
They will panic, and turn against each other...
I've expressed what I think thru a video, and I sent it to all in my address book..Maybe it will wake them up...
www.youtube.com...

reply to post by Rockpuck



Rockpuck - that was very well put ! Thanks for focusing on what I see as the fundamental issues in this current crisis. It's not about easy lending practices, or lack of oversight. There's way too much focus on the symptoms in the current news and not the cause.

Simply put, ten years of wage stagnation along with lost manufacturing jobs (and increasing loss of mid level management/ technical jobs overseas) needed a credit based slight of hand to keep the illusion of a growing economy alive. A non producing, service based credit economy = a house of cards built over an active fault line.

I truly believe that the “experts” and PTB’s know all too well that if true reform is implemented , the kind of transparency needed to bring back market confidence, that what will be revealed will make the current forecast look tame by comparison.

Originally posted by LookingAround
Video update from Karl yesterday.

www.youtube.com...

Did he just say (Around 3:00) to make a bank run?

reply to post by LookingAround



Thanks LookingAround! Gosh, he's wearing his suit, I hate when I see that instead of his casual wear. It's never good news.