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Good succinct article

Discussion in 'Economics and Financials' started by my 2 cents, Aug 11, 2010.

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  1. my 2 cents

    my 2 cents Well-Known Member

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    http://finance.yahoo.com/tech-ticke...,fre,fnm,C&sec=topStories&pos=9&asset=&ccode=

    Good short article... I know some do not like doom and gloom, nor do I but I do appreciate reality and really do not see a whole lot to jump up and down about...I found this article after talking with a big muckdy muck with Citi yesterday and they basically told me that the banks that do have money are sitting on it because they see this coming and the money curve lending rates are safe and steep right now....so this is not something that is a worse case scenario and unexpected...a lot of people smarter than me or any of us see this coming.......

    And you cannot really blame the banks for trying to avoid a G-man takeover attempt based on the G-mens reasoning for last batch of failures which was not enough money in their coffers and "too big to fail".. So they hoard cash and store it safely in Treasuries to avoid that dilema...........and others controlling their compensation packages......rather than loan (risk) money to expand the economy to small business...........the economy is still to a great degree about the housing and construction markets....and derivitive trading is expanding once again.......I will not comment on policy but not putting some more severe restrictions on this practice is lunacy IMHO....."covered bonds" is the new vernacular for "your gonna get screwed again"...IMO

    it really makes me think that the best way to promote investment (bank loans to small business) short term might just be to INCREASE the lending rate (and hold banks accountable for bad mortgages) and make Treasuries less attractive to those banks using overnight free money to make 3-4%......................................then maybe SB loan returns become a bit more attractive particularly for those that are backed federally...............it is a thought anyway...............
     
  2. vt_dolfan

    vt_dolfan Season Ticket Holder Club Member

    my 2 cents likes this.
  3. my 2 cents

    my 2 cents Well-Known Member

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    Good article...can you imagine the misery if even half of the 8% of commercial loans that are plus 30 days PAST due, defaulted...........4% of one HHHHHHUUUUGGGGGEEEEE number.

    Couple other interesting things to deal with at some point in time:

    http://retheauditors.com/2010/07/19...-out-of-hats-ably-assisted-by-their-auditors/ and an oldie but goodie http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aspN..hVXJC4

    Rule 157 (which was asinine to begin with) has not changed and off balance sheet debt are still huge, banks know at some point that they will have to account for these losses. So these banks are not a cash heavy as everyone wants to believe....off balance sheet "assets" like mortgages just do not dissapear into thin air when things suck and reappear someday....

    There are so many shell games going on right now that make this whole economy much much more bleak than it is....you have an underfunded SS program removed from the national debt where if it were added the country would be upside down on interest (with government spending removed from GDP), you have an incredible amount of mortgage backed securities that this administration suddenly made go away that still (unless someone gave you your note recently), derivite trading growing again, M3 individual wealth melting away as property value continues to go down, way too much money in circulation which will lead to massive hyoper inflation IMHO, deflation issues right now, huge national debt coupled with incredible and record budget deficits going forward, the shell game between the UK and USA that is artifically keeping Treasury yields at a whopping 3% or whatever, taxes going up on both individuals and small business and policy makers under some grand illusion that that is how you jump start an economy, 9.5% unemployment with more census workers to hit that number soon, employee cost about to go through the roof, flat revenue growth in non government driven sectors, currency crisis in other countries, and on top of that Asian has already started divesting of our currency........as Crash Davis said..."we are dealing with a lot of shyt here"....now how our economic policy addresses all this is debatable...but IMHO we are hitting the gas pedal to foreclosure on the US economy with policies such as tax increases in this economy and allowing the Fed to buy Treasuries................IMHO anyway....someone wake me when the stimulus makes the economy take off.......

    I really do not like gloom and doom but these are real issues and not fantasy like creating a new economy based on algae or a strong northerly wind.......
     
    vt_dolfan likes this.
  4. vt_dolfan

    vt_dolfan Season Ticket Holder Club Member

    I think two words summed it up very nicely....


    "Shell Game"
     

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