Mark Anthony

Sound Lending Practices in One Simple Sentence

Karl:

You are absolutely WRONG.

have you ever run a bank? If not how do you know what is sound lending practices and what isnot? Neither would the government know. So why would it be appropriate for the government to dictate what is sound lending? When does government intervention ever do any thing good to free market economy?

You must have the illusion that there could be banks that would never collapse. Such a thing does not exist. A bank that could never fail, never existed and never will. All bank businesses are inheritly risky, the question is only how big a risk there is.

I can assure you that any bank that operates at the principle as you suggested, would be closed three decades earlier than the banks that does NOT follow your suggestion. Because they simply will NOT be competitive. When a business is not competitive, it fails and goes out of business.

Lending, is inheritantly risky, there is always a certain possibility that you can not get your money back. A bank that does not lend a single penny, is absolurely safe, but such bank will be promptly closed on the first day it opens for business, because it could not generate revenue.

A bank operates on the principle of trying to maximize its revenue and maximize its attraction to both depositors and borrowers, while minimize the risks.

I think we should leave it up to the banks themselves to calculate the risks. But at the same time, there should NEVER be any government bailout of any bank failure, big or small. This is basic free market principle: You calculate your risks and you take your own risks. If you make money, it's yours, but if you lose, don't count on the public to bail you out.

As a matter of fact, I think having a FDIC is a bad idea as well. Because of the existance of FDIC, depositors are more careless about the safety of their money, because there will be some one to bail them out if the bank fails. If we do NOT have a FDIC, the depositors would scrutinize the security of their banks more closely, and they will try to diversify their riskmore. And so there will be less panic of a few banks fail.

Depositors need to understand that if they deposit money in a bank, there is a certain amount of risk that they may lose the money.This is a risk they must pay, to get paid interest. If you do not want the risk, there is always this home grown bank called your pillow bank.

If we abolish the FDIC, replacing it could be a public equivalent of pillow bank. There needs to be a central bank which accepts cash deposits. Such deposit shall receive no interest, ever, and no check shall ever be allowed to be drawn. The only withdraw is cash withdraw. As it pays no interest, it is equivalent to your pillow bank, and hence will NOT compete with privately run banks which pays interests but also bares risks.

'Too Big to Exist' Bill Would Impose Market Discipline

Why do we need a new bill. Isn't there already anti-trust laws? I remember some years ago they tried very hard to split Microsoft into two halves. The same anti-trust principles should be applied to financial institutions as well. If we did, nothing should be allowed to grow to the scale of "too big to fail".

Shipping Industry Has Too Many Ships Being Built

The new ship orders on theorder books, and ships actually beingbuilt and delivered, are two totally different concepts.

Quote from this article:
www.mgn.com/news/daily...

"global shipbuilding capacity was set to eclipse 50 million compensated gross tons next year (2009)"

That's a global shipbuilding capacity of 50M DWT at maximum delivery capacity,and that includes ALL typed of ships, including military ships. Dry bulk ships probably accounts for just 25% of all shipsbeing built. So that's a global building capacity of 12.5M DWT dry bulk ships per year.

So where do you get the predicted 107M DWT new dry bulk ship delivery in 2010, even if all ship builders in the world are working at full capacity now? More over,theglobal ship building industry, in its bad shape as itis now, could in NO WAY be working at full capacity.

Not Buying This Rally

All the facts the author listed are true but he conveniently left out one of the most important facts in the whole picture: The US dollar. The FED is massively printing more dollars in order to buy our own debts, as foreigners are growingly reluctant to buy US treasury bonds. So the author drawed the completely wrong conclusion.

Don't buy this rally? Then what do you buy? Where do you put your money?

Leave your money in US dollar cash? Stuck it under your pillow? Watch them become worthless paper as hyper inflation kicks in?

Or buy more US T bonds? Or buy a house? Or loan your money to a bank before the bank is shut down by FDIC? Or maybe loan your money to GM? Where do you put your money?

To me the conclusion is clear: Put your money in commodities, in companies that produce commodities. And put your money in shipping companies as you need ships to transport commodities.

You need to buy this rally! Don't be a bag holder holding useless cash or debt notes. My favorites: Shipping stocks, and precious metal palladium plays SWC and PAL. Best shipping stocks are EXM, EGLE, TBSI, DRYS, GNK....

seekingalpha.com/autho...

Nothing Suggests We're Anywhere Near the Bottom

Karl:

Exactly what is "we" in the title of your article, the subject that is not any where near bottom?

I think it is best to say the value of the US dollar is no where near bottom. So relatively to the dollar, everything else could go up against the dollar: commodity related equities and physical assets.

Looking for a Few Good Banks

There is NO US bank worth investing in, NONE, NADA, ZERO. None of them. Do not buy any bank stock at all unless you are just a day trader speculating on short term moves.

Due to depreciation and debasement of the US dollar, we have a hyperinflation future right ahead of us. In a hyperinflation environment, NO BANK will survive, regardless of their balance sheet, because there will be no customer any more. Read here to understand the concept:

tinyurl.com/ddfdvy

You are better off getting into the precious metal plays.

How to Profit from Market Manipulation

This is a MUST READ regarding a breaking science break through, an imminent danger, and why ALL BANKS will FAIL in a hyper-inflation environment. Enjoy:

tinyurl.com/ddfdvy

I plan to short some banking stocks. But right now is a bit too pre-mature.