User 265729

Should We Relax Capital Requirements?

Ya! Make it really loose. That will help wih solvency isses.

Banking Is Tanking Worse Than Ever

Nice item. I usually don't like CNBC -- in fact I hate CNBC -- but maybe they are getting a clue that they need to tell the viewers the truth for a change.

In any case, a lot of wisdom here and on the CNBC site. If you think about it, really scarey that it's not over yet and worse quarters may come.

Banks: Nationalize, Cleanse and Get It Over With

Some of this has the ring of: We need to destroy the village to save it.

I find it somewhat ironic that our country spent trillions of dollars fighting the Soviet Union and the Eastern Bloc with their planned economies, five year plans, state banking system, state production autos (Lada and Tribant), only to take steps to become more like them. So 20 years after the fall of the Berlin Wall look at us.

So little faith in the market system... Too bad... It does work if government gets out of the way.

Banks: The Final Countdown?

My Visa bill!

:-)


On Jan 18 03:01 AM zalo wrote:

> What is a bad security? subprime MBS? prime MBS? commercial MBS?
> corporate debt? high yield? consumer loans? student loans? car loans?...
>
>
> and if banks are cleaned from this securities...is the US government
> going to clean also the insurance companies, the pension funds, the
> hedge funds, etc. to stabilize this securities markets?.
>

Banks: The Final Countdown?

It will be very difficult for Obama and his team not to be transparent, after using the word three and four times a day.

Part of the British plan involves:

"Banks would have to identify their riskiest loans and pay a fee to a state-backed insurer for protection against losses above a certain level, the state broadcaster said."

Still, AIG was an "insurer," so why would this bring about any real changes. Governments can provide all of the backing they want, at this point the problem is a large segemnt of the investment community also questions the stability of governments too. So the confidence game is not working out too well, here or across the pond. If the toxic debt has a value of $50 trillion, would we be good on insuring that abount?

An interesting thing, Brown also warned about Britin turing inward after the debts are disclosed. My reading on that is: Well, the United States really screwed us and your quality of life has now been cut several notches, but have a heart, we're all in this together.

"The prime minister repeatedly stressed the need for international co-operation to revive the global credit market and identified a new risk of “financial isolationism” as big banks retrench into domestic markets.

The British Bankers Association says that even if high street banks were to lend more, many overseas banks have pulled out or reined back on lending in the UK, including Icelandic banks, European banks such as Fortis and Irish banks.

Mr Brown said that pattern was being reflected around the world, admitting that the part-nationalised RBS was among those pulling back from overseas investments."

Brown orders Britain’s banks to come clean (Financial TImes):

www.ft.com/cms/s/0/a72...

Anyhow, even after doing something like this, all may not be well in financial-land.


On Jan 18 12:54 PM icandoitdon wrote:

> the federal insurance option makes sense to me. the amount of "toxic"
> assets is unknown. some is on the balance sheet, some is off. we
> can't even define with any precision a "toxic" asset.
>
> federal insurance is the far simpler and least transparent way to
> handle the issue. we all know that transparency is not in the interests
> of either the institutions that own these toxic assets. neither is
> it in the interest of the federal government or federal reserve whose
> incompetence policys and wilfull ignorance led to their creation.
>
>
> as to the effectiveness of such a policy, i.e. insuring everything,
> there is no certainty it will not cause as many problems as it solves.
> there will also be unintended consequences, e.g. dollar crashing,
> rampant inflation, surging interest rates, etc. it is not a riskless
> proposition and i don't see how this leads to an improved market
> environment in the short term. neither is solvency of the financial
> system the only issue. housing remains overpriced. consumers are
> still debt-ridden. credit is still restricted. unemployment is still
> rising. federal borrowing is through the roof. foreign economies
> are still declining.
>
> to the extent we get through this crisis the healing process will
> be of long duration. i'd still be a seller of rallies.

Banks: The Final Countdown?

Obama could also lay it on the table for all of us too.

Here is something from Bloomberg on Dow falling to 6,000 (or lower) while testing November lows:

www.bloomberg.com/apps...


On Jan 18 01:28 PM stockguru32 wrote:

> Ya, I don't know if I will be tracking his list for 09. In fact almost
> all the analysts have seemed to be wrong thus far. I'm looking to
> get back into SRS and FAZ with the vix levels heading back up, see
> here crashmarketstocks.com/. Ill wait until the obama rally
> is over

Banks: The Final Countdown?

Maybe...

It really depends... Short and long run...

Obama has stated over and over again that he wants transparency in the financial and market system. Yet, if he's too transparent, we may find out that we are in trouble beyond belief. Suppose the bad bank ends up with $10-40 trillion in debt? (I've heard even larger estimates --) Is Obama going to force Bernanke to release information on what he did with $2trillion?

Really... If you think about it, if Obama makes them come clean (and I think he should to really clear the air and start from zero -- or below zero -- whatever the case may be) it can be ugly, ugly, ugly. I mean, make you want to jump off the nearest cliff ugly.

One of my theories about the TARP (and it's OK if you think I'm out to lunch with this one) was that it was passed to buy some time so there could be a peaceful and democratic election and a peaceful transition of power before things really hit the fan. I hope my theory is wrong, but I'm not so sure.

The scary part about all of this, is what happens if even this doesn't work? To tell you the truth, I think there are many economists and those in the business community, possibly out of fear, have allowed tunnel vision to guide their solution set. It is credit-banking, credit-banking, credit-banking. I'm not so sure, if that was resolved, that there are other problems that are not as severe, or possibly more severe, that have been taking a back seat to all of this.

This will be a historical week, possibly in more ways than one. But, if you are right, you'll be on a gold mine (short term).



On Jan 18 01:47 AM User 339463 wrote:

> The govt. is about to create a market for MBS and other collateralized
> debt securities. This will drive down interest rates and increase
> fair market value of assets of banks and insurance companies. BoA,
> Citi, MS and GS are about to have huge gains.
>
> BoA will use cash from selling investments to pay back the second
> round of govt. preferred stock which put restrictions on dividends
> to common shareholders. This was part of back room deal BoA and govt.
> struck in order to help govt. prevent crisis when Merrill deal began
> to look bad. Govt. told BoA to go through with deal and it will use
> second round of TARP to buy securities. In the first round of TARP
> the Treasury didnt have the manpower to value the MBS and manage
> the program of purchasing these from banks. Now they have the guns
> and are ready to roll. Expect huge first quarter for the four big
> boys mentioned above.

Banks: The Final Countdown?

Remember the good old days when the Fed could cut target by .25 and the markets would rise at least three percent? Now the Dow goes up by less than one percent after Congress gives out $1.2 trillion.


On Jan 17 04:59 PM driftwood2 wrote:

> Something is definitely up. I'm surprised the markets have reacted
> to it as little as it has. It sure looks like the banks are trying
> to get ahead of options expiration? But for what reason? Or are they
> trying to get ahead of the inauguration?

Banks: The Final Countdown?

The banks are insolvent. Maybe Obama's first act will be to provide transparency and tell us the truth.

The $10 trillion is the low-low end of what the bad segment of the bad debt in the US alone. Add to that $15 trillion or more in US wealth lost in the past 4 quarters on several asset classes (by no means all), plus all other debt out there, commercial real estate down the line, plus, plus, plus... Two, three, four times GDP? Where does it end?

It is a big wipe for our economy. All they can do at the government level is throw a Hail Mary Pass, but it's doubtful that will work.

Nationalize Citigroup and Bank of America

Felix, Felix, Felix.

Nationalize them? NO THANK YOU! I don't want them. Give them as a gift to one of worst enemies and when they unwrap the box... POOF! They'll be sucked into oblivion.

BofA Following Citigroup to $5 or Lower

Right on Mbuna!

Everyone is starting to catch on to the fact that the banking system is insolvent and has been for some time. Paulson and Bernanke's hope (bet) was that they could cover this over for a couple of bad quarters and that the typical hype from CNBC, CNN-Money, Bloomberg, etc would restore psudo-confidence and then they will have pulled off one of the greatest scams in modern history. It just didn't turn out that way... People are a lot smarter than Paulson and Bernanke took them for.

You should hear Bernanke now... He says that he expects things to start to turn around in the second half of this year, but if you listen to him on YouTube, etc, it almost sounds like a prayer.

I guess Bernanke could ask Congress for $350 billion every quarter to keep up the charade. When it comes to spending taxpayer money Pelosi, Frank and Dodd, no is not a word in their vocabulary.



On Jan 15 05:12 PM Mbuna wrote:

> Most people on Wall St. need their head examined, period. It is a
> fantasy life and most of the columnists here on Seeking make their
> living off of that fantasy. Reality is right in front of you and
> doesn't even take any research. Here is part of a comment I posted
> in July (yes you can look it up to verify) 2008 to-
> The Great GSE Meltdown: Market Adding Fuel to Fire?
> "This will totally impair the ability for Citigroup (seekingalpha.com/symbo...),
> Merrill Lynch (seekingalpha.com/symbo...), and Lehman Brothers
> (seekingalpha.com/symbo...) to raise capital." These 3 companies
> were clearly insolvent 6 months ago IMO as a result of the gathering
> of the perfect financial storm which has cut off any possible escape
> route. The only drama playing out now is how long they can artfully
> hide their insolvency. Everyone is in over their heads and Bernanke
> and Paulson can do little more than put bandaids on to try to protect
> the interests of their constituents. (end of excerpt)
>
> So here we are 6 months later and what happened? Rocket science?
> Nope just some common practical sense. And yes even after billions
> of rescue dollars those banks are STILL insolvent, the ones left
> anyway. One final clue that I have made before- What makes you think
> that a monetary system contrived nearly 100 years ago can just continue
> to work off into the unlimited future? The answer is that it CANNOT
> work indefinitely. Who will start thinking outside the box?

BofA Following Citigroup to $5 or Lower

Bank of America is TOAST and any bank or other company (I'm talking to you GM & Chrysler) is also TOAST. If you invest a dime in these companies you'll be toast too and you'll deserve everything you've got coming to you.

What a pathetic bunch... Begging money from the American taxpayers.

Credit Markets Take a Beating

They are all insolvent.

Bernanke seems to think he can fix a problem that may be as big as $30 trillion or more with $2trillion.

Maybe he and the next pres will turn water into wine too.


On Jan 14 03:47 PM Rokjok777 wrote:

> The whisper in the UK is that the major accounting firms can't sign
> off on their year-end audits of the banks there. Because they are
> insolvent.

The End of Citigroup

Don't you mean...

End of the world?

Credit Markets Take a Beating

Not so fast... During the last 30 minutes, or so, before the bell, traders get strange buy orders. They call it the Bernanke Bump, so I'm told.


On Jan 14 03:17 PM Chuch wrote:

> Wow, market is tanking today, our next problem to deal with is deflation,
> see crashmarketstocks.com/