Roger Knights

Resolving Banks by Guaranteeing Short-Term Debt

A bit OT: Here's my suggested reform for the banking system: Mandate that all investment banks be partnerships. That will force them to be smaller and to behave more prudently, since it would be their own money at risk, not the stockholders.

Will the Market's Party End?

"Inaction and poor monetary policy caused the great depression to escalate;"

But "action" in Europe didn't work. First a failing Austrian Bank was rescued by Credit Anstadt; then Credit Anstadt was rescued by Austria; then Austria was rescued by Germany; then Germany collapsed and pulled Europe down; then the US took the hit; then things got really bad in the rest of the 30s. Those banking dominos were ultimately too big to bail. And so are the dominos that the Fed and the gov't. are temporarily propping up. They can't support the real estate market indefinitely or the dollar will crash. Once real estate is no longer supported, the banks will collapse, followed by the economy, followed by the government.

Will the Market's Party End?

"Inaction and poor monetary policy caused the great depression to escalate;"

But "action" in Europe didn't work. First a failing Austrian Bank was rescued by Credit Anstadt; then Credit Anstadt was rescued by Austria; then Austria was rescued by Germany; then Germany collapsed and pulled Europe down; then the US took the hit; then things got really bad in the rest of the 30s. Those banking dominos were ultimately too big to bail. And so are the dominos that the Fed and the gov't. are temporarily propping up. They can't support the real estate market indefinitely or the dollar will crash. Once real estate is no longer supported, the banks will collapse, followed by the economy, followed by the government.

Fed Exit Strategy: Can Stocks Survive the Bailout Party Hangover?

"The Economy is like a Drug Addict and its addicted to a Golden Flood of Free Money."

And its motto is, Just say mo'

What Stories Aren't Being Told?

"The risk of terrorist attacks on U.S. soil."

Is it possible that the oil stored on offshore tankers is in preparation for this?

What Stories Aren't Being Told?

PS: The untold story in the MSM is the rising tide of dissent against the supposed consensus on global warming. Alarming press releases and study abstracts are quoted as gospel, without a skeptical opinion to counterbalance them. Reporters should consult the websites for (among others) Climate Depot www.climatedepot.com/ , Climate Audit www.climateaudit.org/ and Watt's Up With That wattsupwiththat.com/

What Stories Aren't Being Told?

"Is there a way to incentivize families to stay in their home if they can afford too?"

Why can't the gov't. take over where Rex & Co. left off, by offering homeowners a premium (say 15% of the house's current valuation) in exchange for a share of future profits (say 50% beyond its current market value) on the sale of the house? This would buffer the effects of the current crunch on the homeowner, allowing him to make his mortgage payments and/or renegotiate his mortgage, while being a good long-term buy for the gov't. It’s win/win.

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"The risk of terrorist attacks on U.S. soil. ... This is a large risk, unreported, unprepared for, ..."

The media should encourage the populace to acquire a survivalist larder of food, tools, and supplies, and describe its contents. (Maybe the gov't. could hand one out to everyone.) Even acquisition of a portion of its contents would be beneficial.

Ten Most Ignominious Reassurances from the Great Recession

This reminds me of what Will Rogers said: "It's almost worth the Great Depression, to learn how little our big men know."

Ten Most Ignominious Reassurances from the Great Recession

Were those guys dark or dim? Or both?

Report from Europe: Does September Mean Sell?

"Does September Mean Sell?"

'Tember!

Report from Europe: Does September Mean Sell?

"Does September Mean Sell?"

'Tember!

Animal Spirits Are Eating the Green Shoots

"I think it is more likely than not that there will be another crisis with the banks"

Especially now that it's come out that China's state-owned enterprises are planning to default on their derivatives, leaving Western banks holding the bag:

seekingalpha.com/artic...

Post Traumatic Crash Disorder?

"The sell off pretty much came out of nowhere ..."

Not exactly. Reuters reported over the weekend that China announced that its business entities that were deeply in the red on their derivatives hedging were not going to honor them. This could send ripple effects through the financial system, and could be a portent of things to come from Eastern Europe, etc. The sell-off started on Monday, and accelerated around the world on Tuesday as people digested this news. Today (Weds.) will probably be a breather.

Banking Bailouts by Other Means

This is extremely weird--like a UFO-type market. It's as though a technical indicator started flashing purple. Uncharted territory indeed.

(Probably not bullish. (In normal times.))

It May Be Time to Go Contrarian

The economic data released today is expected to be mildly bullish, according to Bloomberg. If the market doesn't get stimulated much by it, that's a bearish sign.