We need a bank that just 'guards' your money....no loaning it out ever. Just one guy guarding a big gigantic vault. and another guy to do transactions.
picosec (profile) wrote on Fri, 7/3/2009 - 10:25 pm
Norka West:
Interesting strategy your company has regarding building up reserves. Makes sense for the individual company; kills the economy as a whole.
Not to blame you, I'd do the same, but it's easy to see where the economy is headed when sensible companies such as yours pull the plug on spending.
I agree, but we are in the investment business. All our shareholders could call tomorrow and ask for their money back, if they get scared or our returns lag.
Last Fall, a money market fund "broke the buck" and all hell broke loose. If one of the muni money market funds "breaks the buck" (Cali, I'm glaring at you.), we could have an instant replay on steroids.
Speaking of moral hazard, Stan Liebowitz had a good article in the WSJ describing recent research fingering low downpayments as the biggest cause of the bad home loans. Funny how Congress and our other leaders are pretending low downpayments are not a problem - probably our biggest financial problem. Maybe they don't want to fix the underlying problems. Maybe they just want to boost home prices.
sounds like a negative interest rate to me......
then again i'm actually ok with a fractional reserve system.... granted i think reserve ratios should be higher and there should be no SIV or what ever....
..............................
Tim - just turned 30 on flag day..... i didnt feel much older but I did hang out with a few old friends tonight and one of them told me her little sister just graduated college... i taught that little brat to swim some odd years ago... now i feel old.... i'll get over it...
"The proposed transaction tax on crude oil is 0.02% on futures contracts (a contract to buy crude oil at a previously set price on a future date) and 0.5% on the option for a futures contract (the premium paid to have the option to buy a futures contract). "
It corresponds with what I've heard from other CFOs.
If you need a letter of credit, then be prepared to post collateral close to our equal to the amount of the letter. If you want a line of credit, the bank will get back to you (someday).
Most CFOs I know, drew down all their lines of credit last Fall and are stashing the cash in T-bills, eating the negative spreads, but are staying liquid.
The banks are on a lending strike, if you are a small business.
One problem with doing away with brokered deposits is that it will eliminate one more place savers with money at brokerage houses can safely park cash.
Money market funds have the risk of "breaking the buck" and having the funds frozen.
You mean the projection of lost output? That's sort of a meaningless number the way I read it. No family of four gets paid directly from industrial output.
Of course I agree that the Banksters clearly "own the place", along with a few other powerful interests.But regulatory reform is going to take years, and may require a really nasty turnover in Congress to fix. Which has proven in the past to be extremely difficult. People keep voting for the same old critters, seemingly no matter what. It may not even be fixable - we may have passed the point where people can be convinced that government needs to be changed out. And the major parties still have a lock on who gets nominated.
Nope, haven't seen that one before. That proposal would take some time to digest. It looks a little difficult to implement, every transaction system would have to be modified.
"Are we in a Depression?"
"I really don't see it from my area of the US"
Reminds me of when my kids were small going with us somewhere, "Are we there yet?" Dozens of times this was asked by the 5-of them in turn. Earlier today, I kidded about the Depression saying "It's kind of like pornography, you'll know it when you see it" (A common reference from a judge decades ago defining pornography). Most people living in the 1930s never knew they were in a "Depression". All they realized was that the economy kept getting worse. A few head fakes along the way and a few newer scams thrown in, but continually downhill financially for MOST.
The newest scam? Cap & Trade. The Banksters love it:
"The bank [Goldman Sachs] owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets.
Not enough people are taking the Cali problem seriously yet, probably because they remember the last time the state issued IOUs and it all worked out OK. I have no idea how it will go this time, but I expect it to be worse than the early 1990s
I agree. The last time we issued IOUs was because the governor and the legislature were having a pissing match over spending priorities, but the state was basically financially sound. Now, they are playing the same games, but the state is basically insolvent. There is no way they can paper over the simple fact that we have moved to a strict pay as go world. When tax revenue comes in, people get paid. If tax revenue arrives in big quarterly semi-annual, or annual lumps, people get paid in big quarterly, semi-annual, or annual lumps. If not enough revenue comes in, then folks don't get paid.
I hope we don't have any disasters, because we don't have the funds to pay for repair or rebuilding.
Yeah, the Cali budget thing is huge; people don't realize what an outsize impact this state has on the nation (although they should now given the housing bubble).
Of course, I think the nation as a whole is underestimating the impact of the automaker's BK, too.
BlackStar,
"The newest scam? Cap & Trade. The Banksters love it:"
Yup, it's a hell of a scam. I'm considering loading up on some forestry stocks to try and capture a little bit of it. I need to figure out if outfits like PCL will be able to cash in.
"'At first, evolution proceeded by natural selection, from random mutations. This Darwinian phase, lasted about three and a half billion years, and produced us, beings who developed language, to exchange information. I think it is legitimate to take a broader view, and include externally transmitted information, as well as DNA, in the evolution of the human race,' Hawking said. In the last ten thousand years the human species has been in what Hawking calls, 'an external transmission phase,' where the internal record of information, handed down to succeeding generations in DNA, has not changed significantly. 'But the external record, in books, and other long lasting forms of storage,' Hawking says, 'has grown enormously. Some people would use the term evolution only for the internally transmitted genetic material, and would object to it being applied to information handed down externally. But I think that is too narrow a view. We are more than just our genes.'"
Umm, credit unions have that much money to "park"? Aren't they required to be more careful than banks about investments? Or are brokered accounts w/banks ok for credit unions because the banks are insured?
And just how does Congress get "defeated" by the banking industry? Corrupted by, yes, bribed, yes, bought off, but "defeated"?
How can anyone buying pollution allowances know that the allowances that they are buying are not bogus?
After you explain it to me, please study the history of controlled oil prices in the 1970s and explain to me again "How can you know that you are not buying bogus pollution allowances?"
Extra credit will be given to those who can describe how Marc rich was able to turn low price controlled oil into high price decontrolled oil.
azurite:
(03/23/2009)(readMedia)-- Two wholesale credit unions (U.S. Central Federal Credit Union, Lenexa, KS and WesCorp Federal Credit Union, San Dimas, CA) were taken over by the National Credit Union Administration (NCUA) on Friday. It's important to note that these two credit unions are not the same institutions that credit union members patronize. They are wholesale organizations that serve everyday credit unions. In other terms, they are the equivalent of a banks' bank. It's also important to note that while these two wholesale credit unions were placed into conservatorship, they are still fully operational.
they bought into financial engineering to improve their apparent yields.
Or are brokered accounts w/banks ok for credit unions because the banks are insured?
The credit unions are parking the cash with the banks because the banks are paying more than the 10 basis points currently being offered on overnight repos. They are assuming that they will get the interest and principal back tomorrow, before the FDIC seizes the bank the day after tomorrow.
It makes sense if you are picking up coins in front of a steam roller to go for the quarters and half dollars, instead of the pennies. Either way, you are running the same risk.
Good article on The Market Ticker
aka WSJ piece ( after predictions for 2009 )
Back in the 70's after married we couldn't touch a conventional mortgage without 20% down ( skin in the game ) Farm Home Loan Assoc ( that days acronym ) would give loans at much lower down payment , but the homes that qualified were in rural areas where we did not want to be . Never did buy first home till 1982 ( yeah the 18% interest days ) . but we did have the 20% down then - 3 kids later
So a teen in the embargo recession , young married in the 80's recession , building new home selling first home in 90's recession - sold built home in Oct 2008 - housing recession ( man do we have bad timing or what ) - moved to our second home closer to my job . Grateful to have sold at all in 2008 after being on market in a resort town for 2 yrs .
Times are tougher now on America than any of the 3 recession I lived through .
Men are MUCH greedier , and selfish - this will be our demise unless things change - the change is up to us !!
I have a younger brother who was involved in the S&L shenanigans in the early to mid 80s in Texas...
let's just just that he has always had an interesting relationship with ethical considerations... got involved
with 2 Mamet-type wheeler dealers... my brother called one guy the Face cause he had the good looks,
smooth talk, the whole package, the other guy was the Juice, (and boy did he love the juice) he knew how to package
bad properties and loans and move them them around the S&Ls just one step ahead of the regulators.
If an S&L called X knew they were about to be audited they'd call these guys and they would find another S&L called Y where to
park that garbage from their loan portfolio, later they'd flip it back. I've tried to convince him that he was involved in fraud
but he doesn't see it like that.
Finally, the 3 got stuck with a 225k property on which they had done no due diligence
& wasn't zoned for whatever they had in mind. The Face and the Juice each
declared BK leaving my brother holding the entire bag, so he says.
Since '87 he as had a lien against his house in TX for what has since accrued to about 400k. ( his house is homesteaded so they can't foreclose)
He's re-financed a few times (no HELOC under homestead) and is still paying 1,000 monthly mortgage payments on the house 25 years later.
Given that he's a classic bottom feeder 5 months ago he was talking about buying RE in San Diego/OC area for one of his wives and kid. I recommended that before jumping in to a market he knows almost zero about that he read this blog for the next 5 months along with a list of posters who really know their s***, esp. about CA real estate.
Of course, he didn't take my advice.
{edit}
He thinks his house in TX is worth 175K. But is it? Isn't it only worth what you get out of it every year in rental income since it is as illiquid as it gets... he thinks that lien will disappear one day (a statute of limitations) or he can buy the loan for pennies on the dollar or that he can pass it on to his kids.
I'm no lawyer but that seems illogical since anybody in TX under homestead could do the same which would make the house inferior collateral... No?
Is that house permanently underwater?
broward,
I met the other guy once when I was down there, not a big fan of TX... and he was on the juice while driving around in his Ferrari...
words of wisdom from the Juice: 'drink top shelf vodka with a mixer and clients can't smell it on your breath...
sage advice...
the Face was just the face
Kauai K:
used that song back in Nov 08 for one of my anti Bank vid mash-ups on YouTube...
didn't get as much traction as newer rap tunes...
Duke of Con Dao, Have you heard of any more about the health of the King in Thailand?
People are bugging me about when / if I'm going to take a vacation and I really don't want to be there if things go nuts which you know they will.
used that song back in Nov 08 for one of my anti Bank vid mash-ups on YouTube...
But it is perfect if in your mind you just think bangster. Well, at least N. Korea is not lobbing any missiles our way yet, I think they will wait until we intercept a ship.
Kauai...
I thought the song was perfect too but my viewership liked Crack House by Fat Joe overwhelmingly esp. when I did a White House
mash-up that involved BHO, the White House and blow.
one of my good contacts just returned from Thailand... he's got several contacts in the Brit embassy there, I'm sure
he's compromised a number of them bed wise, quite the Bond character.
I'll ask! (note to self)
that missile launch won't go very far IMO, a perfect excuse to show off our multi-billion dollar mini SDI,
which will lead to big funding increases but they (Air Force or Navy ?) better not miss...
lazy me failed to make it to the Embassy today for the party (admission: 7 bucks)
Happy July 4th to our supreme leader CR and the Commentariat!
...
which will lead to big funding increases but they (Air Force or Navy ?) better not miss...
Thanks, I wish the King my best and I hope he lives forever, I don't want to see what may come.
Actually MDA is Army, yea go figure.
It's joint, but the Army is the prime on it. Hitting missiles with missiles is like spitting at a bullet, the question is how fast can you spit.
right K.
my guess is that they will fire a ton of missiles at it so they won't miss (also, they'll engage in electronic
jamming to make many of those multiple shots lost in the noise) Never put anything past the Pentagon.
EDIT
without going into detail here 's a vid mash-up of a training exercise where I'm trying to whip my
elite squad - think Kill Bill meets Crying Game - into fighting shape using MP 5 machine guns... YouTube - Khmer Rouged Up She's Gonna Pop a .30 Caliber Machine Cap in ya' ASS!
{ the voice over is Travis Bickle (de Niro) in Taxi Driver...}
there is something sooo 4th of July about this
Cognitive dissonance and/or doublethink are wonderful things: they allow you to celebrate independence and enslavement at the same time without risking that nagging guilty-feeling.
It's not going to take Sherman to burn down Marietta, I mean Atlanta, this time. There's a lot more of this type of thing to come down there yet. Plus the core is ebbing toward a free-for-all. Ask anyone who lives near GA Tech's campus lately...
Happy 4th to CR; all good readers, commenters, and lurkers; and an in memoriam to our beloved Tanta!
USofA will be europeanized while EU will be americanized. Vital interest under one EU flag..as EU citizen I can see them already how this one is forming. Together with Russia&Germany, those things will "multiply".
In a previous job we used to commission conflict risk assessments to check social cohesion, historical / seasonal events and resolutions, pressure points, income disparities, sectarian splits, concentration and supply chain risks etc. The main problem was persuading the authorities that such surveys were in their interests, and could be undertaken without freaking the populace.
Not sure how that could be done in higher-risk cities which could be on hair-trigger anyhow.
not sure if it's necessary to put in 'EDIT' notation, why?
I'll be reading the NY Times on some breaking story and 10 minutes
later when I refresh entire lines have disappeared with no indication from
NYT that such occurred - guess their excuse is the news is in 'flux'...
example:
some week ago one of their reporters who was tight with members of
Khatami's family and called them out by name wrote that [K] was "fighting a furious rearguard action"
against Khameinei...
within 24 hours the word 'furious' was removed and the sentence toned down
in its discussion of his efforts... guess a furious someone in Tehran or DC called Bill Keller and read him the riot act...
MHO
Counterpointer: "European Bonds" says it all...it is all perception already Similar to combining Georgia and New Orleans to the federal state of United States....
Liz, it's lower than a lot of cities on my watch list, but is one of the bigger(est) ones.
Memphis is tons of fun. Watch the Triad cities in NC, too. North Charleston, for all the wealth in the rest of the city, is bad also.
A murder here, a triple homicide there, couple of gangs from different cultures/nationalities get slanging and banging over turf, etc.
You have a lot of corruption in Miami. Corruption paybacks come swift and brutal, most times. Keep that in mind.
My city is not much better and my actual hood is deteriorating rapidly and has been for some time. Gonna be lots of foreclosures in the next 6-12 months and some really nice rides/wheels for cheap.
Ghetto rich isn't rich, it's living off everyone else and/or stealing from them. One of those types of people is currently in the process of moving out of my house because he just couldn't understand why me asking for 20% of his total cost of living here (he's a friend I tried to do a favor for) wasn't worth him keeping current, but he's got an 07 hulkmobile, 3 dogs, buys new clothes all the time and eats fast food 3 times a day. The money is there, he's just not smart with it. I had enough of him costing me more in electric/water/etc. because he wants to lay about all day.
So when he moves in to an already overpeopled apartment, drags in three dogs and ten puppies (did I forget that), and yet another neighborhood gets worse off in the social tension area, well...
That's how it's going to happen. Not all at once, or one big kaboom, but lots of small fires that just keep jumping fences and getting bigger.
Everyone else here I know may have other views of things, and that's what I love about this place. I can spout crazy for a bit and get slapped back into reality, or worse - someone agrees.
You have to check where the (Eastern) Jews are moving...there not moving to Israel or America. No, they are going to GERMANY once again. Smelling the next power station of this planet. You underestimate the power of energy and (Russians). They are really a weird but intelligent bunch of folks, contrary to the MEXICANS and other stupid latinos (how many check master players have come from LATINO countries?)
If you're still around, thanks for answering my question. I guess that's, when we were chatting a couple of weeks ago, an employee of the credit union I'm a member of was complaining about having to "pay more" because some other credit union(s) had screwed up. I think he was talking about one of these credit unions' credit unions.
Madoff's fraud was billions. Geither+Obammi+Ben+Summers+Paulson=trillons. And worst of all,
each and EVERY tax payer is a victim though hyperinflation and loss of basic civil
infastructures and institutions such as school, roads, and hospitals. Tax payer money is
being used to bailout banks and to ensure that the economy recovers ASAP so that the wealth
gap widens, more credit card debt, and the little people are gouged with surging food
prices, surging gas prices, lack of jobs, and inflation lagging wages. Only the upper
eschelons of society will benefit from a 'speedy recovery' It's been that way since 2002.
People now are getting paid the SAME WAGES as they did in 2000. But are prices at 2000
levels? H3LL NO. So they go into debt, adding more layers tothe USA debt ponzi scheme.
While there certainly can be problems with banks primarily funded by brokered deposits these two misconceptions must be noted:
All brokered deposits are NOT HOT MONEY!
- In fact it is often the opposite. At the local level it is nearly impossible to offer Aunt Mable a 5yr CD for a small premium over the going CD rate that if rates go up you will never adjust her CD up and if rates go down you will adjust her APY down with the market...even if this is just three months after she bought the CD. This type of STRUCTURE is simply NOT available in the retail market but is available in the brokered market. For a bank to issue brokered CD's with a 5,10,or15yr maturity for a small premium over bullet funding while retaining the option to reprice if rates go down....is brilliant....not hot money.
Brokered deposits aren't to blame for bank failures--Poor Management and Oversight is the culprit!
- The bigger problem with brokered deposits is that they allow banks to grow at a faster rate than the management is able to grow at. It's like giving a 19yr old kid 20mm dollars and then being shocked when he squanders it and ruins his life. If at 19 he began accumulating wealth that would someday be worth 20mm he would be a lot less likely to shoot himself in the foot on account of that wealth. So the problem isn't the money itself, but rather the rate at which he accumulates that wealth.
George Hanc might be right about the possibility that shareholders have incentive to take greater risks on the way down, BUT once the regulators have put their thumb on an institution there is almost always a freeze of any dividends and therefore we have seen several of the bank failures in the last 12 months include banks that have LOTS and LOTS of CASH, but not much capital.
Once again they (news, media & the general public) get it wrong! The bank failures have nothing to do with brokered deposits, but everything to do with the bank officers running the institution into the ground by imprudently growing their assets just to fuel their high-risk loan programs aimed at poor credit quality recipients (individuals and businesses alike). This argument blaming brokered deposits is like blaming the candy store b/c you got sick to your stomach after eating a whole bag of candy and chocolate bars. These deposits were not forced onto the bank, the banks sought out these deposits b/c they decided they wanted to make more money through bad and unsound loan & investment practices, no matter how much risk was involved. We all have a responsibility to understand the root causes of our current economic environment before we start casting stones. Ignorance makes the situation worse and does not solve anything.
Is this what they mean by "moral hazard"?
nemo?
Hard to beat him, isn't it?
Norkawest, picosec, check this out: Companies Stockpiling Cash, Credit Access Still Tight, AFP Survey Shows
Timmy and Ben will bail everyone out!
Everyone except the taxpayers, of course.
hot money indeed
until the government, ie the taxpayer bails them out
time for the
bank of the united states of america
kick the money changers to the curb
revoke the charter of the federal reserve and close it down
they mis-allocated capital and effectively stole from the country
In 50 years, the dictionary definition of "broker" will be "more broke".
Central Banks, Regional Banks, Money Center Banks....Systemic Banks....
start rowing cuz yer, Pissin Up a Rope
I may have to WEEN myself.....
We need a bank that just 'guards' your money....no loaning it out ever. Just one guy guarding a big gigantic vault. and another guy to do transactions.
got pigged.
picosec (profile) wrote on Fri, 7/3/2009 - 10:25 pm
Norka West:
Interesting strategy your company has regarding building up reserves. Makes sense for the individual company; kills the economy as a whole.
Not to blame you, I'd do the same, but it's easy to see where the economy is headed when sensible companies such as yours pull the plug on spending.
I agree, but we are in the investment business. All our shareholders could call tomorrow and ask for their money back, if they get scared or our returns lag.
Last Fall, a money market fund "broke the buck" and all hell broke loose. If one of the muni money market funds "breaks the buck" (Cali, I'm glaring at you.), we could have an instant replay on steroids.
Rob, TJ -
Reply got pigged fwiw
Thanks for the discourse.
Speaking of moral hazard, Stan Liebowitz had a good article in the WSJ describing recent research fingering low downpayments as the biggest cause of the bad home loans. Funny how Congress and our other leaders are pretending low downpayments are not a problem - probably our biggest financial problem. Maybe they don't want to fix the underlying problems. Maybe they just want to boost home prices.
These days, the banks just remind me of Dead Skunks in the Middle of the Road.
You don't have to look and you don't have to see
'Cause you can feel 'em in your olfactory
the big banks and the central bankers own you and your children
read it and weep
Banks own the US government | Dean Baker |
Comment is free |
guardian.co.uk
patientrenter;
Yes, that was a good piece. I read it in the dead tree edition this am.
Here is the link:
New Evidence on the Foreclosure Crisis - WSJ.com
sounds like a negative interest rate to me......
then again i'm actually ok with a fractional reserve system.... granted i think reserve ratios should be higher and there should be no SIV or what ever....
..............................
Tim - just turned 30 on flag day..... i didnt feel much older but I did hang out with a few old friends tonight and one of them told me her little sister just graduated college... i taught that little brat to swim some odd years ago... now i feel old.... i'll get over it...
Old news around the CR parts. How many posts has he done on that??
nades thougt you checked out already.
Freedom of '76
Someone (mmckinl ?) brought this up earlier:
Congresscritter DeFazio's proposal to tax oil futures transactions:
Congressman Peter DeFazio - DeFazio Plan Fully Funds the Surface Transportation Authorization
"The proposed transaction tax on crude oil is 0.02% on futures contracts (a contract to buy crude oil at a previously set price on a future date) and 0.5% on the option for a futures contract (the premium paid to have the option to buy a futures contract). "
sm,
Ever see this one? The Automated Payment Transaction Tax
sm_landlord
yes some one brought up defzios proposal to tax futures trades
but
there is more to this article regarding the cost to a family of 4 for the bailout of the banks
and the banking lobby's determination to stop regulatory reform
On topic for a sec, I guess this includes brokered CDs through stockbrokers?
Broker money markets are paying so little right now that the money needs to go somewhere else.
TJ, I left you a pigged reply on the last thread.
just got back... but its been a long day....
i'm about done again... (second time!) 
(portable 8track system... lol) (john mayer's father?)
I'm a Pink Floyd whore.... YouTube - Pink Floyd - Lost for words
..........
nytol...
.....................
TJ: thanks for the link.
It corresponds with what I've heard from other CFOs.
If you need a letter of credit, then be prepared to post collateral close to our equal to the amount of the letter. If you want a line of credit, the bank will get back to you (someday).
Most CFOs I know, drew down all their lines of credit last Fall and are stashing the cash in T-bills, eating the negative spreads, but are staying liquid.
The banks are on a lending strike, if you are a small business.
sm,
Yeah, saw that before jumping over here. Not having your level of cash, well, it's not nearly the same problem for me.
YouTube -
patient renter
low downpayment was a problem but not the biggest problem
fraud was a bigger problem
and the biggest problem was the leverage and structured investment vehilces that were built on top of the house of cards called MBS and the likes
heres proof
the entire 700 plus billion dollars of tarp money was enuf to pay IN FULL all the subprime destressed mortgages of 2007 and 2008
in full...not a few monthly payments
but buy the entire house outright and give to the person who took out the loan
and several hundred billion of tarp would be left over
the several trillion dollars we the taxpayers are on the hook for already has less to do with low down payments
and more to do with fraud and leverage and structured investment vehicles
One problem with doing away with brokered deposits is that it will eliminate one more place savers with money at brokerage houses can safely park cash.
Money market funds have the risk of "breaking the buck" and having the funds frozen.
mock turtle;
You mean the projection of lost output? That's sort of a meaningless number the way I read it. No family of four gets paid directly from industrial output.
Of course I agree that the Banksters clearly "own the place", along with a few other powerful interests.But regulatory reform is going to take years, and may require a really nasty turnover in Congress to fix. Which has proven in the past to be extremely difficult. People keep voting for the same old critters, seemingly no matter what. It may not even be fixable - we may have passed the point where people can be convinced that government needs to be changed out. And the major parties still have a lock on who gets nominated.
"Ever see this one? http://www.apttax.com/"
Nope, haven't seen that one before. That proposal would take some time to digest. It looks a little difficult to implement, every transaction system would have to be modified.
low downpayment was a problem but not the biggest problem
Yes, again: The biggest problem was the idiots who gave them the rest of the money!
"Are we in a Depression?"
"I really don't see it from my area of the US"
Reminds me of when my kids were small going with us somewhere, "Are we there yet?" Dozens of times this was asked by the 5-of them in turn. Earlier today, I kidded about the Depression saying "It's kind of like pornography, you'll know it when you see it" (A common reference from a judge decades ago defining pornography). Most people living in the 1930s never knew they were in a "Depression". All they realized was that the economy kept getting worse. A few head fakes along the way and a few newer scams thrown in, but continually downhill financially for MOST.
The newest scam? Cap & Trade. The Banksters love it:
"The bank [Goldman Sachs] owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets.
Banksters Love Cap-and-Trade: Economic collapse about to accelerate
sm wrote on the last thread:
Not enough people are taking the Cali problem seriously yet, probably because they remember the last time the state issued IOUs and it all worked out OK. I have no idea how it will go this time, but I expect it to be worse than the early 1990s
I agree. The last time we issued IOUs was because the governor and the legislature were having a pissing match over spending priorities, but the state was basically financially sound. Now, they are playing the same games, but the state is basically insolvent. There is no way they can paper over the simple fact that we have moved to a strict pay as go world. When tax revenue comes in, people get paid. If tax revenue arrives in big quarterly semi-annual, or annual lumps, people get paid in big quarterly, semi-annual, or annual lumps. If not enough revenue comes in, then folks don't get paid.
I hope we don't have any disasters, because we don't have the funds to pay for repair or rebuilding.
Yeah, the Cali budget thing is huge; people don't realize what an outsize impact this state has on the nation (although they should now given the housing bubble).
Of course, I think the nation as a whole is underestimating the impact of the automaker's BK, too.
Cash would be king but that's a end that was probably desired by the means.
BlackStar,
"The newest scam? Cap & Trade. The Banksters love it:"
Yup, it's a hell of a scam. I'm considering loading up on some forestry stocks to try and capture a little bit of it. I need to figure out if outfits like PCL will be able to cash in.
Interesting concept...
Stephen Hawking: "Humans Have Entered a New Stage of Evolution"
"'At first, evolution proceeded by natural selection, from random mutations. This Darwinian phase, lasted about three and a half billion years, and produced us, beings who developed language, to exchange information. I think it is legitimate to take a broader view, and include externally transmitted information, as well as DNA, in the evolution of the human race,' Hawking said. In the last ten thousand years the human species has been in what Hawking calls, 'an external transmission phase,' where the internal record of information, handed down to succeeding generations in DNA, has not changed significantly. 'But the external record, in books, and other long lasting forms of storage,' Hawking says, 'has grown enormously. Some people would use the term evolution only for the internally transmitted genetic material, and would object to it being applied to information handed down externally. But I think that is too narrow a view. We are more than just our genes.'"
People realize it but in superficial ways, like complaining about fruits and nuts.
Umm, credit unions have that much money to "park"? Aren't they required to be more careful than banks about investments? Or are brokered accounts w/banks ok for credit unions because the banks are insured?
And just how does Congress get "defeated" by the banking industry? Corrupted by, yes, bribed, yes, bought off, but "defeated"?
RE: cap and trade
How can anyone buying pollution allowances know that the allowances that they are buying are not bogus?
After you explain it to me, please study the history of controlled oil prices in the 1970s and explain to me again "How can you know that you are not buying bogus pollution allowances?"
Extra credit will be given to those who can describe how Marc rich was able to turn low price controlled oil into high price decontrolled oil.
azurite:
(03/23/2009)(readMedia)-- Two wholesale credit unions (U.S. Central Federal Credit Union, Lenexa, KS and WesCorp Federal Credit Union, San Dimas, CA) were taken over by the National Credit Union Administration (NCUA) on Friday. It's important to note that these two credit unions are not the same institutions that credit union members patronize. They are wholesale organizations that serve everyday credit unions. In other terms, they are the equivalent of a banks' bank. It's also important to note that while these two wholesale credit unions were placed into conservatorship, they are still fully operational.
they bought into financial engineering to improve their apparent yields.
NorkaWest;
"How can anyone buying pollution allowances know that the allowances that they are buying are not bogus?"
No problem, they can insure the credits with AIG.
Catholic church selling indulgences and pardons == Government departments selling carbon allowances
//How can anyone buying pollution allowances know that the allowances that they are buying are not bogus?//
"How can anyone buying pollution allowances know that the allowances that they are buying are not bogus?"
If it's not out of briefcases of two Japanese businessmen?
Edit: If it is
time for some swamp music care of jj grey
YouTube - Orange Blossoms Video JJ Grey and MOFRO
azurite:
Or are brokered accounts w/banks ok for credit unions because the banks are insured?
The credit unions are parking the cash with the banks because the banks are paying more than the 10 basis points currently being offered on overnight repos. They are assuming that they will get the interest and principal back tomorrow, before the FDIC seizes the bank the day after tomorrow.
It makes sense if you are picking up coins in front of a steam roller to go for the quarters and half dollars, instead of the pennies. Either way, you are running the same risk.
NW, thanks for the MOFRO. Great sound (and fable).
Good article on The Market Ticker
aka WSJ piece ( after predictions for 2009 )
Back in the 70's after married we couldn't touch a conventional mortgage without 20% down ( skin in the game ) Farm Home Loan Assoc ( that days acronym ) would give loans at much lower down payment , but the homes that qualified were in rural areas where we did not want to be . Never did buy first home till 1982 ( yeah the 18% interest days ) . but we did have the 20% down then - 3 kids later
So a teen in the embargo recession , young married in the 80's recession , building new home selling first home in 90's recession - sold built home in Oct 2008 - housing recession ( man do we have bad timing or what ) - moved to our second home closer to my job . Grateful to have sold at all in 2008 after being on market in a resort town for 2 yrs .
Times are tougher now on America than any of the 3 recession I lived through .
Men are MUCH greedier , and selfish - this will be our demise unless things change - the change is up to us !!
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I have a younger brother who was involved in the S&L shenanigans in the early to mid 80s in Texas...
let's just just that he has always had an interesting relationship with ethical considerations... got involved
with 2 Mamet-type wheeler dealers... my brother called one guy the Face cause he had the good looks,
smooth talk, the whole package, the other guy was the Juice, (and boy did he love the juice) he knew how to package
bad properties and loans and move them them around the S&Ls just one step ahead of the regulators.
If an S&L called X knew they were about to be audited they'd call these guys and they would find another S&L called Y where to
park that garbage from their loan portfolio, later they'd flip it back. I've tried to convince him that he was involved in fraud
but he doesn't see it like that.
Finally, the 3 got stuck with a 225k property on which they had done no due diligence
& wasn't zoned for whatever they had in mind. The Face and the Juice each
declared BK leaving my brother holding the entire bag, so he says.
Since '87 he as had a lien against his house in TX for what has since accrued to about 400k. ( his house is homesteaded so they can't foreclose)
He's re-financed a few times (no HELOC under homestead) and is still paying 1,000 monthly mortgage payments on the house 25 years later.
Given that he's a classic bottom feeder 5 months ago he was talking about buying RE in San Diego/OC area for one of his wives and kid. I recommended that before jumping in to a market he knows almost zero about that he read this blog for the next 5 months along with a list of posters who really know their s***, esp. about CA real estate.
Of course, he didn't take my advice.
{edit}
He thinks his house in TX is worth 175K. But is it? Isn't it only worth what you get out of it every year in rental income since it is as illiquid as it gets... he thinks that lien will disappear one day (a statute of limitations) or he can buy the loan for pennies on the dollar or that he can pass it on to his kids.
I'm no lawyer but that seems illogical since anybody in TX under homestead could do the same which would make the house inferior collateral... No?
Is that house permanently underwater?
the other guy was the Juice
I didn't know that OJ sold real estate.
Just a another way for the bangsters to privatize their profits while socializing the loses through the FDIC.
Coolio - Gangsta's Paradise (HD)
YouTube -
broward,
I met the other guy once when I was down there, not a big fan of TX... and he was on the juice while driving around in his Ferrari...
words of wisdom from the Juice: 'drink top shelf vodka with a mixer and clients can't smell it on your breath...
sage advice...
the Face was just the face
Kauai K:
used that song back in Nov 08 for one of my anti Bank vid mash-ups on YouTube...
didn't get as much traction as newer rap tunes...
Duke of Con Dao, Have you heard of any more about the health of the King in Thailand?
People are bugging me about when / if I'm going to take a vacation and I really don't want to be there if things go nuts which you know they will.
Duke of Con Dao -
used that song back in Nov 08 for one of my anti Bank vid mash-ups on YouTube...
But it is perfect if in your mind you just think bangster. Well, at least N. Korea is not lobbing any missiles our way yet, I think they will wait until we intercept a ship.
Kauai...
I thought the song was perfect too but my viewership liked Crack House by Fat Joe overwhelmingly esp. when I did a White House
mash-up that involved BHO, the White House and blow.
one of my good contacts just returned from Thailand... he's got several contacts in the Brit embassy there, I'm sure
he's compromised a number of them bed wise, quite the Bond character.
I'll ask! (note to self)
that missile launch won't go very far IMO, a perfect excuse to show off our multi-billion dollar mini SDI,
which will lead to big funding increases but they (Air Force or Navy ?) better not miss...
lazy me failed to make it to the Embassy today for the party (admission: 7 bucks)
Happy July 4th to our supreme leader CR and the Commentariat!
...
Duke of Con Dao -
which will lead to big funding increases but they (Air Force or Navy ?) better not miss...
Thanks, I wish the King my best and I hope he lives forever, I don't want to see what may come.
Actually MDA is Army, yea go figure.
It's joint, but the Army is the prime on it. Hitting missiles with missiles is like spitting at a bullet, the question is how fast can you spit.
right K.
my guess is that they will fire a ton of missiles at it so they won't miss (also, they'll engage in electronic
jamming to make many of those multiple shots lost in the noise) Never put anything past the Pentagon.
here's an oldie but goodie I made for Citibank last Thanksgiving...
YouTube - What's Wrong with America? Saving Scum like Indian Beggar Pandit & Citibank by Uncle Sugar. Revolt!
btw, it shows a Powerpoint slide from Pandit's Town Hall presentation of the 930 billion in off balance sheet items that acc. to the note would soon have no material impact due to an accounting change, how prescient you were Vik!
EDIT
without going into detail here 's a vid mash-up of a training exercise where I'm trying to whip my
elite squad - think Kill Bill meets Crying Game - into fighting shape using MP 5 machine guns... YouTube - Khmer Rouged Up She's Gonna Pop a .30 Caliber Machine Cap in ya' ASS!
{ the voice over is Travis Bickle (de Niro) in Taxi Driver...}
there is something sooo 4th of July about this
duke
Duke-
here's an oldie but goodie I made for Citibank last Thanksgiving...
Nice, It's getting late for me, and I'm working tomorrow.
Have a great weekend everyone.
Happy 4TH of July to CR and each Poster. In The Hills of The Bear we will just try to stay cool.
Cognitive dissonance and/or doublethink are wonderful things: they allow you to celebrate independence and enslavement at the same time without risking that nagging guilty-feeling.
It's not going to take Sherman to burn down Marietta, I mean Atlanta, this time. There's a lot more of this type of thing to come down there yet. Plus the core is ebbing toward a free-for-all. Ask anyone who lives near GA Tech's campus lately...
Happy 4th to CR; all good readers, commenters, and lurkers; and an in memoriam to our beloved Tanta!
Lothar, what's up on North Ave? It's been over a decade since I've been there?
Mighty Nation in a denial regression but who in the heck or we, Hotty Toddy to all.
EE I don't live in ATL - that can get you killed for no apparent(ly good) reason.
Just an observer. NOLA and Miami are on my watch list as to which Southern city blows up first.
D
USofA will be europeanized while EU will be americanized. Vital interest under one EU flag..as EU citizen I can see them already how this one is forming. Together with Russia&Germany, those things will "multiply".
In a previous job we used to commission conflict risk assessments to check social cohesion, historical / seasonal events and resolutions, pressure points, income disparities, sectarian splits, concentration and supply chain risks etc. The main problem was persuading the authorities that such surveys were in their interests, and could be undertaken without freaking the populace.
Not sure how that could be done in higher-risk cities which could be on hair-trigger anyhow.
C
I wanna know what credit unions are parking their money like this.
It takes 2 to tango.
ZeroPoint - think the EU is coordinating the bond redemption and issue circus next week? I don't. I think it's beyond them at the moment.
European Bonds Gain on Concern Economic Recovery Is Faltering - Bloomberg.com
C
not sure if it's necessary to put in 'EDIT' notation, why?
I'll be reading the NY Times on some breaking story and 10 minutes
later when I refresh entire lines have disappeared with no indication from
NYT that such occurred - guess their excuse is the news is in 'flux'...
example:
some week ago one of their reporters who was tight with members of
Khatami's family and called them out by name wrote that [K] was "fighting a furious rearguard action"
against Khameinei...
within 24 hours the word 'furious' was removed and the sentence toned down
in its discussion of his efforts... guess a furious someone in Tehran or DC called Bill Keller and read him the riot act...
MHO
I don't feel that blow-up on the streets of Miami.
Could happen, just don't feel it.
Hawking didn't give any credit to Dawkins?
Intellectual theft there if not.
Nobody around?
Counterpointer: "European Bonds" says it all...it is all perception already
Similar to combining Georgia and New Orleans to the federal state of United States....
Liz, it's lower than a lot of cities on my watch list, but is one of the bigger(est) ones.
Memphis is tons of fun. Watch the Triad cities in NC, too. North Charleston, for all the wealth in the rest of the city, is bad also.
A murder here, a triple homicide there, couple of gangs from different cultures/nationalities get slanging and banging over turf, etc.
You have a lot of corruption in Miami. Corruption paybacks come swift and brutal, most times. Keep that in mind.
My city is not much better and my actual hood is deteriorating rapidly and has been for some time. Gonna be lots of foreclosures in the next 6-12 months and some really nice rides/wheels for cheap.
Ghetto rich isn't rich, it's living off everyone else and/or stealing from them. One of those types of people is currently in the process of moving out of my house because he just couldn't understand why me asking for 20% of his total cost of living here (he's a friend I tried to do a favor for) wasn't worth him keeping current, but he's got an 07 hulkmobile, 3 dogs, buys new clothes all the time and eats fast food 3 times a day. The money is there, he's just not smart with it. I had enough of him costing me more in electric/water/etc. because he wants to lay about all day.
So when he moves in to an already overpeopled apartment, drags in three dogs and ten puppies (did I forget that), and yet another neighborhood gets worse off in the social tension area, well...
That's how it's going to happen. Not all at once, or one big kaboom, but lots of small fires that just keep jumping fences and getting bigger.
Everyone else here I know may have other views of things, and that's what I love about this place. I can spout crazy for a bit and get slapped back into reality, or worse - someone agrees.
Catholic church selling indulgences and pardons == Government departments selling carbon allowances.
Exactly/ The Catholic Church was the largest multi-national corporation until the US Government surpassed it.
You have to check where the (Eastern) Jews are moving...there not moving to Israel or America. No, they are going to GERMANY once again. Smelling the next power station of this planet.
You underestimate the power of energy and (Russians). They are really a weird but intelligent bunch of folks, contrary to the MEXICANS and other stupid latinos (how many check master players have come from LATINO countries?)
Counterpointer"
In a previous job we used to commission conflict risk assessments"
...
would not such studies be for those in Need To Know basis only?
Now I understand, I found a bank offering a checking account, FDIC insured that pays 4.75%
I wondered how they could do it. This may be a new source of hot money. The broker is something called Kasasa (http://www.kasasa.com)
Looks like a bomb that is just waiting to go off.
Norkawest,
If you're still around, thanks for answering my question. I guess that's, when we were chatting a couple of weeks ago, an employee of the credit union I'm a member of was complaining about having to "pay more" because some other credit union(s) had screwed up. I think he was talking about one of these credit unions' credit unions.
I like the coins before steam roller metaphor.
Madoff's fraud was billions. Geither+Obammi+Ben+Summers+Paulson=trillons. And worst of all,
each and EVERY tax payer is a victim though hyperinflation and loss of basic civil
infastructures and institutions such as school, roads, and hospitals. Tax payer money is
being used to bailout banks and to ensure that the economy recovers ASAP so that the wealth
gap widens, more credit card debt, and the little people are gouged with surging food
prices, surging gas prices, lack of jobs, and inflation lagging wages. Only the upper
eschelons of society will benefit from a 'speedy recovery' It's been that way since 2002.
People now are getting paid the SAME WAGES as they did in 2000. But are prices at 2000
levels? H3LL NO. So they go into debt, adding more layers tothe USA debt ponzi scheme.
good finance articles: Interesting Finance & Economic articles
While there certainly can be problems with banks primarily funded by brokered deposits these two misconceptions must be noted:
- In fact it is often the opposite. At the local level it is nearly impossible to offer Aunt Mable a 5yr CD for a small premium over the going CD rate that if rates go up you will never adjust her CD up and if rates go down you will adjust her APY down with the market...even if this is just three months after she bought the CD. This type of STRUCTURE is simply NOT available in the retail market but is available in the brokered market. For a bank to issue brokered CD's with a 5,10,or15yr maturity for a small premium over bullet funding while retaining the option to reprice if rates go down....is brilliant....not hot money.
- The bigger problem with brokered deposits is that they allow banks to grow at a faster rate than the management is able to grow at. It's like giving a 19yr old kid 20mm dollars and then being shocked when he squanders it and ruins his life. If at 19 he began accumulating wealth that would someday be worth 20mm he would be a lot less likely to shoot himself in the foot on account of that wealth. So the problem isn't the money itself, but rather the rate at which he accumulates that wealth.
George Hanc might be right about the possibility that shareholders have incentive to take greater risks on the way down, BUT once the regulators have put their thumb on an institution there is almost always a freeze of any dividends and therefore we have seen several of the bank failures in the last 12 months include banks that have LOTS and LOTS of CASH, but not much capital.
Once again they (news, media & the general public) get it wrong! The bank failures have nothing to do with brokered deposits, but everything to do with the bank officers running the institution into the ground by imprudently growing their assets just to fuel their high-risk loan programs aimed at poor credit quality recipients (individuals and businesses alike). This argument blaming brokered deposits is like blaming the candy store b/c you got sick to your stomach after eating a whole bag of candy and chocolate bars. These deposits were not forced onto the bank, the banks sought out these deposits b/c they decided they wanted to make more money through bad and unsound loan & investment practices, no matter how much risk was involved. We all have a responsibility to understand the root causes of our current economic environment before we start casting stones. Ignorance makes the situation worse and does not solve anything.