Teutonic Knight

Speculative Trading Indicates Rally Losing Steam

It is indeed at a very late stage of the game.

Seven Uncomfortable Predictions for the Economy

Personally, I'm a bit surprised by the high praise of this article given by some comments. True, It is very well-written and surely she tells the story that she wants to convey, with or without any ulterior motives.

When you would examine it carefully, you would find that much of it is either from old news or collected from a digest of other SA authors had covered in similar tops to now.

25 Companies That Lost America Nearly $1 Trillion

Mr. Hill,

I wish you could spare a moment to answer one dumb question. I came from Canada over 3 decades ago. Over there they "used to" have far fewer banks than the U.S. has., and still much fewer now.

Why do we have so many banks in the U.S.? 10,000 or so including the credit unions?

From your list, isn't it time to vastly consolidate most if not all of them as soon as possible and retrain the folks to other, in my opinion, more "productive" industries and services?

Thanks in advance.

teutonic

Washington's AIG Outrage Really a Political Diversion Tactic

Everyday Finance:

Historians generally believe that it is customary for the human specie to find scapegoats in time of greal distress, and the present situation with AIG that you described is no exception.

teutonic

Three Possible Scenarios for the U.S. Economy

Not on racial grounds, of course, but it is interesting to note that the Orientals, namely, China, Japan, Taiwan, and Singapore held over 50% of our debts.

Any guess of why? Are they true savers, or safe betters?

Time for us to try to understand more of their culture, I suppose.

AIG and Our Core Economic Issue: Unknown Asset Values

The dire consequences of creating non-productive and non-existent wealth with excessive leveraging are already upon us: evaporation of common stock equity, de-valuation of preferred, de-valuation of senior bonds, bankruptcies, high unemployment, and finally high inflation.

The AIG Scandal

One more point. Congress of course could pass a bill to require them to return there bonuses retroactively. The reader would know that this happening would be unlikely - they receive the lion share of campaign financing from the corporations.

The AIG Scandal

I echoed the sentiment of most the commentators on the desirability of some form of retribution for the executives who were responsible for the malaise. However, I must caution everyone, although I am not a lawyer and have had no legal training, it would be difficult to charge them with any wrong doing under the criminal code, or even the civil code.


It would be very difficult to prove in court and beyond reasonable doubt that they had acted outside of the law. The bottom line is: How could you prosecute GREED?

Why AIG Had to Be Nationalized

With the company's stock trading at ~ 40 cents, the entire equity of the company had already been virtually wiped out - they wouldn't need to pay pricey bankruptcy lawyer fees to go that route.

Was it better just to let it fall last year? No one can tell the outcome otherwise. I suspect if it were let to fall, the ensuing domino hellish financial fire ball would just engulf us all, and around the world.

AIG: Countdown to Annihilation

It is sad to see how just one division within the company could perhaps bring the whole one down. When the public begins to learn more and more about the deeds of AIG over the past 4 to 5 months, its fate is sealed. The insurance business is highly competitive and far from being monopolistic. If there are choices around abound, why bother to risk your trust in a tainted name.

Great Depression Not Imminent, But Inevitable

Past examples of major recession going back some 200 years of U.S. history offer little ideal fit for the current crisis to make prediction. Here are some thoughts:

Arguments against the likelihood of a Depression:

1) Kipling wrote recently that most households nowadays have two incomes, husband and wife, and would therefore be more robust to withstand a severe downturn compared to the Great Depression when most have a single bread winner.

2) The U.S. economy in the 1920s was primarily natural resource based and were more prone to manufacturing downturn particularly in the heavy-equipment sector. Today the U.S. economy is much more diversified and versatile to rebounding.

3) The financial authorities today have learned from the mistakes made by President Hoover and Prime Minister Bennett (Canada) who further tightened credit after the stock market crash.

4) During the Great Depression at the height of the crisis, quite a few destitute stock financiers chose to commit suicides further bringing down the domino effect. Nowadays fewer take those fatal acts.

Arguments for the Likelihood of a Depression:

1) While the 1929 Depression was attributed to excessive speculation in the stock market, the 2008 crisis was triggered by the housing bubble. Housing surplus would take longer to correct than paper stock overpricing.

2) The 1929 Depression hit America, Canada, and Europe hardest. The Soviet Union, Japan and the Far East were less impacted, for various reasons. This time around because of the intertwining of the global finances, worldwide recovery will take longer, and more difficult.

3) In the 1920-30s the U.S. was still a "young" nation up and coming. This time nations around the world compete fiercely with the U.S. in manufacturing. Competition will make it harder for the U.S. to bounce back in a robust manner.

4) Finally, let us remember it was WWII that finally lifts the U.S. out of the Great Depression. This time there would be hard to find that Nazi Germany and Imperial Japan to pull us out.