driftwood2

Who Owns the Fed?

Very significant information. Everyone needs to know this.

Why Nationalize in 2016?

I'm surprised how much vitriol we have here. Do you people honestly think that naysayers and shortsellers are responsible for what's happening now? Give me a break. This crisis was caused by the people that were actually in charge of the show: the bankers, the investment firms, the fed and the government. Also, although few people appreciate this, our current crisis was also due to corrupt academics and is also an inevitable consequence of debt based money. Everything Salmon has said is reasonable. Look at what happened to Japan. They kept their zombie banks operating and had to nationalize one of them eventually anyway.

Nationalizing Bank Losses

Let the banks fail and then nationalize them. Problem solved.

What to Buy and Why: Barron's 2009 Roundtable, Part II

Abby's picks are laughable as usually. It's especially funny that she pick BAC which of course veritably imploded last week. AMAT's PE is 14.5 which is not cheap at all in this environment. Everyone knows that semis are cyclical and AMAT even more so.

Banks: The Final Countdown?

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?

Home Prices May Be Nearing Bottom, Bank Equities to Follow?

Housing prices are still above historical norms relative to income. They are also still high relative to rent. We still have a ways to go for housing prices to find a bottom. However, I think prices in the inner cities and outer developments may have already hit bottom. The inner cities is where the worst of subprime is and it was the first to go. The outer developments are the least in demand and the most speculative so it was the next to go. The burbs are still only minimally affected. I expect that they will experience a slow but unrelenting decline over the next 2 years as alt-a and option arms reset. Commercial real estate will probably crack this year.

S&P 500 Financial Sector Market Cap Continues to Sink

The size of these losses, especially for companies like C, BAC, MS, GC, and etc is a rough indicator of how much money will ultimately be needed to bail them out. Some optimistic individuals are of the opinion that the bailout funds already provided by the government will be enough to fix our financial system. If that were the case, why would Citi, who received a mere $45B from the government, have lost $246B in market cap? If Citi had only lost on the order by $45B, wouldn't their market cap have fallen a similar amount? The truth is, Citi alone will probably require hundreds of billions of taxpayer dollars to be made solvent. Tarp is only the beginning.

Why Fiscal Stimulus Isn't Enough

Nor will they be solved easily. We have a wave of corporate mbs debt defaults coming. A wave of corporate debt defaults. And a wave a alt-a and option arm defaults coming next year. The banking industry will need another ~1 trillion of money to replace all the money they lost.