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Saturday, November 28 2009 |
06:17 EDT |
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- It's not a good sign when the money banks spend on government debt matches the amount they're loaning to businesses (chart).
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This news story has 12 comments:
The oligarchs take those trillions, use some of that money to prop-up their own underwater assets through bidding-up markets, and use the REST to buy U.S. Treasuries and GSE bonds (presumably comprising most of what they have sitting in their $1+ trillion "savings account" with the Fed) - using the money for everything EXCEPT lending to U.S. businesses and the American people.
Then Geithner and Bernanke turn around and BRAG about how they don't have to (directly) buy EVEN MORE of their own bonds - because of "strong demand".
And THESE are the type of "talented" people which the Wall Street fraud-factories claimed were so "valuable" that they needed to pay "retention bonuses" to keep them - or they would run off and get a job with...perhaps the nearest Wal-Mart or McDonald's?
So far, we are only a little over a year into this downturn in lending activity. The $64k question is whether the severity of this credit contraction will hasten its end or whether we are in for a long, ugly contraction. (I am leaning toward the long, ugly version.)
So your #1 buyer of treasuries is the Fed, and your #2 buyer of treasuries is the Fed... using the banks as the holding tank.
Then clap your hands and speak about how all the world wants US treasuries.
Ponzi baby, ponzi.
- Dan Quayle
On Nov 09 06:41 PM Jeff Nielson wrote:
> Let's see if I have this straight. The Fed and the Treasury give
> the Wall Street oligarchs TRILLIONS in "free money" (0% interest
> loans, and absolute hand-outs).
>
> The oligarchs take those trillions, use some of that money to prop-up
> their own underwater assets through bidding-up markets, and use the
> REST to buy U.S. Treasuries and GSE bonds (presumably comprising
> most of what they have sitting in their $1+ trillion "savings account"
> with the Fed) - using the money for everything EXCEPT lending to
> U.S. businesses and the American people.
>
> Then Geithner and Bernanke turn around and BRAG about how they don't
> have to (directly) buy EVEN MORE of their own bonds - because of
> "strong demand".
>
> And THESE are the type of "talented" people which the Wall Street
> fraud-factories claimed were so "valuable" that they needed to pay
> "retention bonuses" to keep them - or they would run off and get
> a job with...perhaps the nearest Wal-Mart or McDonald's?
On Nov 09 06:41 PM Jeff Nielson wrote:
> Let's see if I have this straight. The Fed and the Treasury give
> the Wall Street oligarchs TRILLIONS in "free money" (0% interest
> loans, and absolute hand-outs).
>
> The oligarchs take those trillions, use some of that money to prop-up
> their own underwater assets through bidding-up markets, and use the
> REST to buy U.S. Treasuries and GSE bonds (presumably comprising
> most of what they have sitting in their $1+ trillion "savings account"
> with the Fed) - using the money for everything EXCEPT lending to
> U.S. businesses and the American people.
>
> Then Geithner and Bernanke turn around and BRAG about how they don't
> have to (directly) buy EVEN MORE of their own bonds - because of
> "strong demand".
On Nov 09 08:07 PM The Geoffster wrote:
> “Bank failures are caused by depositors who don't deposit enough
> money to cover losses due to mismanagement”
> - Dan Quayle
She said what killed them was that they had offered 5% on C.D.'s some months before the collapse. I remember seeing the signs in front of the branch...HANDMADE signs saying "5% C.D.'s!!!".
I smelled trouble when I saw that; to me it meant they needed cash and needed it bad, bad enough to promise almost 2% above other bank rates.
Sure enough, she said, the FDIC took them over when everyone who had put in wads of cash for the good C.D. rate came to get it back - even with the penalty - a classic run on the bank.
But...the cash was gone into the hole of the housing and CDS debacles...so...run on the bank. WaMu gave them the paper currency, but it wasn't really there, thus the FDIC takeover.
I wonder what a run on the government bank looks like?
On Nov 09 08:07 PM The Geoffster wrote:
> “Bank failures are caused by depositors who don't deposit enough
> money to cover losses due to mismanagement”
> - Dan Quayle
On Nov 09 10:01 PM ebworthen wrote:
> I wonder what a run on the government bank looks like?
I fear we are going to find out.