By the time this goes into effect, things will have deteriorated to such an extent that complete nationalization would be the only option. That is paulson's plan B.
I think a Moonshine operation (ie, a copper still and a several year supply of grain) has a much more attractive P/E ratio today than last week and could be profitably employed in a Mad Max hyper-infation post-apocalypse.
The only answers I ever get to my hyperinflation concerns are joke answers. Does this mean that there is no possibility of a USD currency collapse or does it mean that if such an event occurs I will be totally, utterly, SoL and there's nothing I can do?
Anyone remember when Citi, BofA, JPMorgan Chase and Wachovia walked together to the Fed and borrowed $2B from the discount window to show solidarity? This is like Agatha Christie's 10 Little Indians...
Something tells me that this numbing week is still not over...
Up in Canada, we'll be spending our Thanksgiving being grateful that we have the strongest banks in the world--which is about as impressive as beating Oprah Winfrey in a marathon.
Don't you worry, that will happen to canuck banks in the next 2-4 weeks.
Bro Manziere writes:
Something tells me that this numbing week is still not over...
Up in Canada, we'll be spending our Thanksgiving being grateful that we have the strongest banks in the world--which is about as impressive as beating Oprah Winfrey in a marathon.
Bro Manziere | 10.10.08 - 7:05 pm | #
Dang, things are so solemn that no one is wondering about the quality of pizza in these two burgs? Some kids working delivery in those towns are gonna make bank this weekend.
I was worried because I missed the bank failure the last two weeks so I guess a 2-fer makes it all better now.
We're back on schedule--one bank per Friday.
Or is this the new ramp-up? Will it now be two banks per Friday? Could be a good plan--less time required to complete nationalization, I mean, complete restructuring.
Are they still giving out ponies? Mine has not arrived.
looka at the loss rate on these failures -- almost 40% of the failed bank's assets; this is 3x the historical rate. other observations -- the fdic continues to retain bulk of assets; they fully covered all depositors, one without a premium pais, the other premium was small, so this cost the insurance fund to calm depositors nationally. at one bank, 42% of deposits were brokered.
the monroe bank was the only one under formal enforcement action, which just went into place this july. it had grown from $10m in assets in 2005 to $55 in assets in 2007; brokered money funding construction loans. the question is where was the bank regulator. at some point, someone needs to question the utter failure of the fdic with respect to its prevention business -- where is the front line supervision of teh fdic to limit the risk from these institutions -- 40% loss rates should clue people into the fdic's supervisory failings.
Penrod and Sam wrote:The only answers I ever get to my hyperinflation concerns are joke answers.
Understanding that this is a dead thread, Penrod, I'll give it a try, anyway.
(All IMHO)
Probability of hyperinflation is nonzero. That being said, there will probably be a period of deflation prior to inflation, then hyperinflation taking off. Right now, it looks like credit may be disappearing faster than money is created, and that is, at least to me, an indication of deflation, no matter what happens to prices. I'm speaking of de- and inflation in the pure monetary sense. Prices have nothing to do with it.
My thinking is that prolonged deflation is an existential threat to our financial and possibly our governmental system as currently organized. Hence, all powers of the govt. and large money interests will be directed to arresting the deflation and reflating the supply of money and credit. If inflation results, they were successful.
Probability of a US$ currency collapse is likewise nonzero. This may be the more immediate threat. There are many opinions as to whether this will occur and on what possible schedule, not to mention the domestic ramifications. Other currencies have collapsed in the past. Up to now, the US$, the world's reserve currency, has not. Just because something has not happened doesn't mean it will never happen.
Probability of being totally SOL if any or all of the above happen? Also nonzero. Again, there are various proposed defensive strategies for different situations, many of which have been discussed here at one time or another (just not in response to your question).
Keep reading CR and a selection of other blogs on CR's blogroll. The good ones are frequently cited in the comments. None of us have the answer(s) in total. Everyone is guessing, and the only defense is to read widely (probably OK to ignore much of the mainstream media and especially CNBC) and use your own critical thinking skills. Ponder the thoughtful posts and comments, and laugh at the humorous ones. If something big/important is happening, you can bet it will be intelligently discussed here.
Wow, those are some staggering losses. Both banks will cost the FDIC ~ 1/3 of the assets of each bank. Even though losses are only in the millions, just how badly managed were they to accumulate 33% losses?
Sooner or later, it adds up to real money.
first?
first!!!!!!!!!!!!!!!!
Nemo!
and to think a few weeks ago this would have been huge news...
small banks are still in good shape yet
Omen!
Paulson on equity in financial firms up next...
I think paulson is trying to nationalize banks in two steps
1] partial nationalization
2] complete nationalization.
It might be hard to get complete nationalization through in the US in one step.
how the hell do you get to name yourself "National Bank" without any modifiers?
Paulson says the Taxpayers, bailingout the banks will get NON Voting stock.
What a crock
By the time this goes into effect, things will have deteriorated to such an extent that complete nationalization would be the only option. That is paulson's plan B.
I think a Moonshine operation (ie, a copper still and a several year supply of grain) has a much more attractive P/E ratio today than last week and could be profitably employed in a Mad Max hyper-infation post-apocalypse.
The only answers I ever get to my hyperinflation concerns are joke answers. Does this mean that there is no possibility of a USD currency collapse or does it mean that if such an event occurs I will be totally, utterly, SoL and there's nothing I can do?
on voting equity except where industry standards require for protection as investors - is what I thought I heard - or something to that effect
Anyone remember when Citi, BofA, JPMorgan Chase and Wachovia walked together to the Fed and borrowed $2B from the discount window to show solidarity? This is like Agatha Christie's 10 Little Indians...
Something tells me that this numbing week is still not over...
Up in Canada, we'll be spending our Thanksgiving being grateful that we have the strongest banks in the world--which is about as impressive as beating Oprah Winfrey in a marathon.
Don't you worry, that will happen to canuck banks in the next 2-4 weeks.
Bro Manziere writes:
Something tells me that this numbing week is still not over...
Up in Canada, we'll be spending our Thanksgiving being grateful that we have the strongest banks in the world--which is about as impressive as beating Oprah Winfrey in a marathon.
Bro Manziere | 10.10.08 - 7:05 pm | #
Paulson isn't stuttering today - things must be better and he's not as scared.
Paulson isn't stuttering today
Only sometimes. Some answers (one of the foreign correspondents) was pretty bad.
Hank: "We'll have continued volatility for a while"
"This is about confidence"
finally! Now Hank, do you think the Bush Administration is the one to restore confidence?
Paulso: we all agree there is a problem and kind of how to fix it, so investors can now be confident - at least those who are not naive
Sounds more like the Germans are still concerned about long term inflation, so no G7 agreements
I haven't heard anything here to cheer about.
Main Street Bank failed? I guess the crisis on Wall Street really has started to affect Main Street.
How will the economy survive..... it's the 1930's
get out the tinfoil hats...
130 odd million in deposits.
How will we survive!!!!
How is Klowney still in business? I thought they were worse off than WAMU (percentage of NPA-wise, not total $ down the rathole-wise)
Can anyone explain a technical detail - such-and-such a bank acquires the deposits (liabilities), and a portion of the assets.
What makes up the difference?
Dang, things are so solemn that no one is wondering about the quality of pizza in these two burgs? Some kids working delivery in those towns are gonna make bank this weekend.
I was worried because I missed the bank failure the last two weeks so I guess a 2-fer makes it all better now.
We're back on schedule--one bank per Friday.
Or is this the new ramp-up? Will it now be two banks per Friday? Could be a good plan--less time required to complete nationalization, I mean, complete restructuring.
Are they still giving out ponies? Mine has not arrived.
looka at the loss rate on these failures -- almost 40% of the failed bank's assets; this is 3x the historical rate. other observations -- the fdic continues to retain bulk of assets; they fully covered all depositors, one without a premium pais, the other premium was small, so this cost the insurance fund to calm depositors nationally. at one bank, 42% of deposits were brokered.
the monroe bank was the only one under formal enforcement action, which just went into place this july. it had grown from $10m in assets in 2005 to $55 in assets in 2007; brokered money funding construction loans. the question is where was the bank regulator. at some point, someone needs to question the utter failure of the fdic with respect to its prevention business -- where is the front line supervision of teh fdic to limit the risk from these institutions -- 40% loss rates should clue people into the fdic's supervisory failings.
Penrod and Sam wrote:The only answers I ever get to my hyperinflation concerns are joke answers.
Understanding that this is a dead thread, Penrod, I'll give it a try, anyway.
(All IMHO)
Probability of hyperinflation is nonzero. That being said, there will probably be a period of deflation prior to inflation, then hyperinflation taking off. Right now, it looks like credit may be disappearing faster than money is created, and that is, at least to me, an indication of deflation, no matter what happens to prices. I'm speaking of de- and inflation in the pure monetary sense. Prices have nothing to do with it.
My thinking is that prolonged deflation is an existential threat to our financial and possibly our governmental system as currently organized. Hence, all powers of the govt. and large money interests will be directed to arresting the deflation and reflating the supply of money and credit. If inflation results, they were successful.
Probability of a US$ currency collapse is likewise nonzero. This may be the more immediate threat. There are many opinions as to whether this will occur and on what possible schedule, not to mention the domestic ramifications. Other currencies have collapsed in the past. Up to now, the US$, the world's reserve currency, has not. Just because something has not happened doesn't mean it will never happen.
Probability of being totally SOL if any or all of the above happen? Also nonzero. Again, there are various proposed defensive strategies for different situations, many of which have been discussed here at one time or another (just not in response to your question).
Keep reading CR and a selection of other blogs on CR's blogroll. The good ones are frequently cited in the comments. None of us have the answer(s) in total. Everyone is guessing, and the only defense is to read widely (probably OK to ignore much of the mainstream media and especially CNBC) and use your own critical thinking skills. Ponder the thoughtful posts and comments, and laugh at the humorous ones. If something big/important is happening, you can bet it will be intelligently discussed here.
Good luck to you and to all!
Like what suferdude said... .. .
Wow, those are some staggering losses. Both banks will cost the FDIC ~ 1/3 of the assets of each bank. Even though losses are only in the millions, just how badly managed were they to accumulate 33% losses?
(thread don't want to die).
Maybe fraud ?
On a very large scale of course...
How about crisisproof banks?