EricTheRon

Exploring Madoff's Ponzi Scheme Will Unveil the Causes of This Global Monetary Crisis

He's wrong. Even in the 19th century with most currencies having a gold monetary standard, devastating bank runs (devastating to you if your money was in that bank) and overal bank panics (runs extending to all banks) occurred regularly in all countries, leading to bank failures and extreme crises. This is why the idea of central bank backup was created. Basically the idea of cash reserves has been sidelined by the equity requirement, since the cash aspect of handling bank runs has been covered by the central banks. However as we see at this point, equity levels are a more fluid aspect than cash in the vault, since equity is affected not only by the depositors removing their capital (i.e. bank runs), but also by the devaluation of bank assets (i.e. loans and other assets they own). So I suspect that more regulation of the quality of those assets will follow this crisis, at least at banks that use the Fed's backup. Let's hope so.

Major Two Day Rally: Hold Steady

Good grief! I would expect a real financial commentator to be more savvy than to repeat that stupid "Bloomberg guest" article, asserting $7 trillion has been SPENT (I think he also uses the term "blown"). "Spent" is money I paid for car, jewelry, or a coat. Money I use to buy stocks and bonds is not "spent", at least in my English. Almost all of that $7 trillion is used to buy Preferred shares and short-term lending, almost all of which will be paid back since this is senior to all other stockholders. I would expect this writer to know that. Of course, if it's not going to be paid back then it hardly matters, since if the financial institutions die we'll all be living in tents and eating soup from lines.