Perspectives on the global economic meltdown

Neshant · Post by **Neshant** » 21 Sep 2009 01:04

No repurcussions for the hoard of bad karma they have accumulated over the centuries.

The karma pressure guage is reading past the red.

Meanwhile on the other side of the pond, yet another 100 billion in bonds have been seized in Italy. You will recall that the last heist was 134.5 billion sometime earlier this year. Something fishy is going on. I note that the last 2 Japanese guys who were caught in the earlier attempt were released and served no prison time which runs counter to the claim they were fraudsters smuggling counterfeit bonds (which would require serious jail time).

U.S. Authorities Probing $100 Billion of Bonds Seized in Italy

http://www.bloomberg.com/apps/news?pid= ... X0BWHToC1g

Hari Seldon · Post by **Hari Seldon** » 21 Sep 2009 08:13

MaoA janta. How could I miss this juicy story onlee?

Shanghai Exhange to List Foreign Shares in the Yuan

Shares on Shanghai's too-be-launched international board will be denominated in renminbi rather than U.S. dollars, sources close to regulators told Caijing.

But critics say the decision could doom the board to the same fate of Japan's yen-deonomiated international board, which closed in 2004.

China has been preparing for months to launch an international board on the Shanghai Stock Exchange. Fan Xinghai, director-general of Shanghai' Financial Services Office, said September 14 that one or two foreign companies will be listed on the board in early 2010.

One of the key difficulties in preparing the board has been the question of whether the shares listed there should be denominated in renminbi or U.S. dollar, a source said.

U.S. dollar denominated listings would pose several problems. Overseas' companies' listings would be subject to the approval of more than one government department if their shares were denominated in U.S. dollars. Also, China's closed capital account, which restricts the exchange of local and foreign currency, would pose an obstacle to U.S. dollar listings, the source said.

I think blogger Jesse says it best:

This article highlights the growing move internationally away from the dollar dominance in finance.

But it does also illustrate the 'closed capital account" which restricts the exchange of domestic and foreign currency even today in China.

No country should be allowed full WTO status with a managed and closed currency. There is no way to conduct 'fair trade' in such a regime. And certainly the actions by both Clinton and Bush to advance China as a trading partner while pegging the dollar at a steep devaluation remains a scandal of major proportion.

{You can say that again. We jingoes have revelled in flinging labels at our netaship jabki it was in the khanate that t-reason happened, seems like.}

What would the world say if the US decided to move to a two tier currency system, devaluing the iternational dollar by 40% and then pegging it to a basket of currencies including the Euro, AUS$, Pound and Yen?

{Heh. And who's to say that won't happen tomorrow, nobull sir? The current system is standing even if shaking because its benefits>costs for its principal designers led by the khanate. The day it becomes clear the sys ain't delivering enough benefits to justify costs, there'll be a dramatic direction change, accompanied by suitable orchestrated media frenzy, strawman demolitions, patriotic fulminations, tearjerker stories, righteousness accusations of unfair trade practices on rivals and the whole 9 yards, you can bet.}

Hari Seldon · Post by **Hari Seldon** » 21 Sep 2009 14:29

X-POST

Britain's public debt hits £800 billion - the highest on record

Britain is clocking up debt at a rate of £6,017 per second as the Government struggles to balance the books. With tax receipts plummeting because of the recession, state borrowing grew by £16.1 billion last month — almost twice the entire budget for the 2012 Olympics. Net borrowing for the first five months of the financial year stood at £65.3 billion, compared with £26.1 billion at the same stage last year. Total borrowing soared past the £800 billion mark for the first time and total state debt as a proportion of national output reached 57.5 per cent.

Yawn, you say. So what? Every kuntree has debt. No?

Philip Hammond, the Shadow Chief Secretary to the Treasury, said: “We used to worry about borrowing £16 billion in an entire year. Now Labour have done it in just one month. These shocking figures show the depth of Gordon Brown’s debt crisis and just how irresponsible he was to pretend that spending cuts weren’t necessary.” Mr Brown has been accused of misleading the Commons by berating the Conservatives for preparing public spending cuts when leaked Treasury documents show that he was examining his own cuts. This week he acknowledged for the first time that cuts in public spending would be necessary and yesterday he began holding a series of meetings with Cabinet ministers to discuss cuts.

Aha. We'll see what happens when those public spending cuts cross a critical threshold. We'll see when poverty, crime and beggary return to UQ streets after the bottom 10% in society figure out they've been had. The plunder from Yindia helped raise the bottom quartile of the popn high indeed.

Just to pay the interest on its ballooning debts the Government must find more than £30 billion a year — about £500 for every man, woman and child in the country. The figures from the Office for National Statistics (ONS) show that tax receipts in August dived by 9 per cent compared with August 2008, while public spending rose by almost 3 per cent. The widening gulf was bridged by borrowing. Spending on benefits grew by £900 million to £13.5 billion as unemployment soared.

Yawn. Don't lets get too worked up about these small things. UQstan has emerged victorious before battling similar odds, hasn't she? That's guarantee enough she'll do so again in the future as well. After all,isn;t the future much like the past, as any wall streeter can attest to?

Read it all. Bottomline is that all is well in UQstan. Nothing bad has or can happen there. Ask Sri Dean Nelson. Nothing to see here now....

vishwakarmaa · Post by **vishwakarmaa** » 21 Sep 2009 20:04

Hari Seldon wrote:Shanghai Exhange to List Foreign Shares in the Yuan
Shares on Shanghai's too-be-launched international board will be denominated in renminbi rather than U.S. dollars, sources close to regulators told Caijing.

China is showing balls to American Dollar monopoly and it is a fair move.

Americans keep printing dollars freely, induce into american banks and then use that money to buy resources,companies all over the world. While the non-Americans become poorer day by day, loosing their control over their own resources. Because they can't print currency like USA does.

Someone has to wake up and break this western theft. China has woken up. Good for Asians and their wealth.

Indian elites are too weak to even talk about such things. They have transferred stock exchange managements to western managers instead. Bad for Asia.

shyam · Post by **shyam** » 21 Sep 2009 23:04

Economy Recovering But Still Plenty Of Time For Gov't To Blow It, Says Wolf

Neshant · Post by **Neshant** » 22 Sep 2009 01:30

With US having convinced all euro/japanese countries against which the USD is indexed to do 'quantitative easing' aka money printing, the devaluation of the USD can be masked. The only remaining barometer of the intended USD devaluation is gold. So now the US wants to mask that as well before embarking on money printing by holding out the threat of IMF dumping its gold reserves on the market to keep gold prices depressed.

However this game will not work this time round. People realise that the threat to sell IMF gold is an empty threat. Its sold not onto the market but to central banks in North America and Europe. There's no way they would sell something as valuable as gold in exchange for the hoard of (worthless) printed up currency all over the place.

Meanwhile China throws a monkey's wrench into the plan by calling their bluff claiming it wants to buy the IMF gold. IMO India should offer to do the same right away. Its a mere 13 billion dollars for 403.3 tons which to me says gold is grossly undervalued relative to the blizzard of currency out there.

IMF will sell up to 403.3 tonnes of gold - could begin next week

http://mineweb.co.za/mineweb/view/minew ... &sn=Detail

China weighs purchase of IMF gold -report

http://www.forbes.com/feeds/reuters/200 ... r=moreover

rahulm · Post by **rahulm** » 22 Sep 2009 04:14

Apologies if posted before,

The sun is setting on the US dollar as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC.

and

The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief.

HSBC bids farewell to dollar supremacy

svinayak · Post by **svinayak** » 22 Sep 2009 05:20

In Saudi Arabia and Kuwait, debt exposure suddenly cast a new light on inward-looking, clannish business structures.
Two of the former's biggest conglomerates, family-run Al Gosaibi and Maan al Sanea’s Saad Group, related by both marriage and mutual investments, are involved in a bitter falling out with each other and their creditors.
Newspaper columnists discuss how to deal with beggars in Riyadh. Oil tankers float at sea, full up but with nowhere to go.
As with the rest of the world, the situation, and the price of oil, may have stabilised – for now. The federal United Arab Emirates government is buying Dubai’s bonds and is still aiming for a nationwide growth rate of 3pc for 2009.
That has allowed the region, smarting at criticism of its materialistic excess and its treatment of the people who live there, some breathing space to look at fundamentals.

http://www.telegraph.co.uk/finance/fina ... order.html

Is there over production of Crude but less supply of refined products

Hari Seldon · Post by **Hari Seldon** » 22 Sep 2009 05:46

Strictly IMVHO, but reports of impending dollah demise are way overblown. The 10 and 30 yr Treasury yield stay resolutely below historical averages suggesting that deflation, not hyperinflation, is par for the course. Reason is that whilst thje Fed has printed hoards of USD and lent it to banks, the banks are not lending any further. Rather they are parking the stash into USTs and stocks!

Who's buying USD then, you ask? Well, apart from phoren central banks (less than last yr, admittedly - but have continued to maintain purchases), there are, for the first time in decades, domestic US savers coming online. The savings rate jumped from -2 to +5 and onwards to +8%.

Besides there's all that shadowy Fed reserve benami trading going on - an undeclared Quantitative easing conduit if there were one.

Of course anything is possible and with another $300 billion in UST auctions slated for next week, and many more 100s of billions in the weeks thereafter, anything could happen only.

Jai Ho.

ramana · Post by **ramana** » 22 Sep 2009 08:59

Hari Start a blog and twitter account your ideas.

ramana · Post by **ramana** » 22 Sep 2009 10:45

When people pulled the trigger on Lehman to bring down uncle they didn't figure on PRC's antics.

Singha · Post by **Singha** » 22 Sep 2009 14:35

why does UK arouse such loyalty in refugees ? why not try in mainland eu?

http://www.telegraph.co.uk/news/worldne ... ungle.html

The worst trouble took place around the camp's makeshift mosque, which the mainly Afghan Muslim residents of the camp had promised to defend "at all costs".

"It is the centre of our camp, and leaving it pains us massively,' said Omar, a 26 year-old originally from Kabul, just before he was arrested by PAF officers.

"The police can try to stop us as much as they like, but nothing will stop us getting to England,' Omid added.

A copy of a prayer from the Koran which had formed the focal point of the mosque was removed before the operation and handed over to a United Nations representative for safe keeping.

Police had waited until the end of Ramadan at the weekend before moving in
.......
Once all of the migrants and protesters had been moved on beyond the perimeter of the camp, hundreds of officers began a mass clean-up operation, using bulldozers and flame-throwers to destroy all the makeshift buildings.

The squalor of the camp was one of the main reasons for its closure, as well as the crime with which it became associated, including a London journalist being raped in a tent last summer.

The camp had become a magnet for people from all over the world determined to cross the Channel and reach Britain. Once here, they claimed asylum or disappeared into the black economy.

kmkraoind · Post by **kmkraoind** » 22 Sep 2009 14:44

With Scuffles, French Police Evict Migrants

CALAIS, France — Advancing at daybreak, French police rapidly encircled a camp outside this English Channel port on Tuesday to evict hundreds of Afghans, Pakistanis and other undocumented migrants who have gathered for years in the hope of making clandestine journeys across 22 miles of water to Britain

Glad that they have not mentioned South Asia as they do indicate whenever they come across pakis.

The closure took place as European countries increasingly use force to crack down on unwanted migrants. On July 12, Greece eliminated a makeshift camp in the port city of Patras; in May, Italy struck a controversial accord with Libya allowing it to turn back migrants’ boats in the Mediterranean. The European Union estimates that 500,000 people cross its borders without papers each year.

It seems, Europeans wants to preserve jobs for themselves only.

Hari Seldon · Post by **Hari Seldon** » 22 Sep 2009 15:01

ramana wrote:Hari Start a blog and twitter account your ideas.

Thanks. Will do post mid-November.

Neshant · Post by **Neshant** » 22 Sep 2009 21:37

Who's buying USD then, you ask? Well, apart from phoren central banks

Federal reserve is using currency swaps with other central bank to prop up the dollar.

These swaps then have to be unwound which will eventually be done via money printing. It seems the rise in the dollar's value which should be the result of deflation (which benefits savers) is being offset (more like robbed) by the federal reserve doing inflation (money printing).

The people getting ripped off are savers who are seeing their potential gains transferred to some crooked bank/financial by the federal reserve.

Ameet · Post by **Ameet** » 22 Sep 2009 22:17

Circle of life - FDIC could seek bailout from banks

http://news.yahoo.com/s/ap/20090922/ap_ ... ic_bailout

Ameet · Post by **Ameet** » 22 Sep 2009 22:27

And to avoid your neighbor breaking into your house - Jobless benefits maybe extended

http://money.cnn.com/2009/09/22/news/ec ... 2009092207

ramana · Post by **ramana** » 22 Sep 2009 23:44

hari Seldon, A complete description of the US wealth and its disappearance in word of sumati satakam.

siridA vaccinavaccunu
salalitamuga nArikEla salilamu Bhangin
sirida pOyina pOvunu
kari mringina velagapandu karaNini sumati

సిరి = wealth
తాన్(దా) = by itself
వచ్చిన = when it comes
వచ్చును = will come
సలలితముగ = beautifully
నారికేళ = coconut
సలిలము = water
భంగిన్ = in the fashion
సిరిదా పోయిన పోవును = when wealth goes, it goes
కరి మ్రింగిన వెలగపండు కరణిని = like the wood apple that is gulped by an elephantసుమతీ

Hari Seldon · Post by **Hari Seldon** » 23 Sep 2009 13:17

Wow Ramana garu. Have admittedly little clue about the sumati sutakam. The telugu script is beautiful, mussay.

Meanwhile, half a world away, in UQstan....

Bank of England warns of the consequences of thrift

An attempt by British consumers to rein in spending after the harsh lessons of the recession could limit growth and therefore depress household income further, the Bank of England warns today. It says in its latest Quarterly Bulletin that household decisions to spend or save will have major consequences for the economic outlook, because consumer spending accounts for two-thirds of total spending in the UK. "Any attempt to reduce consumption is likely to push down on output and hence household incomes. That could actually make it harder for households to increase their savings – known as the paradox of thrift."

The Bank says that even if households saved as much as 10pc of income, it would take nine years to bring wealth back up to the average of the last 20 years. Credit conditions are likely to remain tight, the Bank says, which could limit spending – as could job insecurity. The Bank also says that most financial asset prices have continued to increase over the third quarter and conditions in bank funding markets have improved. Improvement in sentiment has prompted analysts to revise upwards their expectations for short-term corporate earnings, coinciding with a rise in equity prices. It reveals in the Bulletin that, from July 24 to August 4, the Bank did not buy any corporate bonds after receiving no offers in five consecutive auctions.

Huh. Wow, eh? Deflation it is. Despite the original doyen of quantitative easing - the BoE and the chancellory of the treasury - trying desperately to ignite inflation and inflate mounting debt away, the rest of the ekhanomy in UQstan refuses to fall in line seems like. People are (gasp) saving instead of consuming! And deflation - which makes today's penny worth more tomorrow, accelarates the affect.

The BoE better dance inflation into existence! Now! For its own good. Long live the (mervyn) king!

Hari Seldon · Post by **Hari Seldon** » 23 Sep 2009 20:19

http://www.youtube.com/watch?v=A8dz40AOOmA

Inner city detriot. Some of those houses and buildings, you have to wonder, what happened there?

Related post from another blawg:

Does anyone really think that American industrial cities are coming back? Who would want to live or manufacture in them? I'm sure there are some great home prices in any of these places. Are you looking for a genuine American vacation spot for your next family vacation? This is "America the Beautiful". For a little contrast, I included a short video of Zurich, Switzerland:

Michigan

http://www.youtube.com/watch?v=Nga2_XK3 ... re=related

New Jersey

http://www.youtube.com/watch?v=lYCFoHcx ... re=related

Indiana

http://www.youtube.com/watch?v=xx0PBrGS ... re=related

Calafornia

http://www.youtube.com/watch?v=FNcRwuwoido&feature=fvw

Louisana

http://www.youtube.com/watch?v=uCpLa-33iEg

Pennsylvania

http://www.youtube.com/watch?v=7AZzyqp_ ... L&index=28

Ohio

http://www.youtube.com/watch?v=Ywd1p43HQlE

New York

http://www.youtube.com/watch?v=lTzkd22J ... re=related

Switzerland

http://www.youtube.com/watch?v=TmUJMlal ... re=related

Neshant · Post by **Neshant** » 23 Sep 2009 21:39

On why economists are useless

Part 1 : http://www.youtube.com/watch?v=AplIVuys1q4

Part 2 : http://www.youtube.com/watch?v=VoqaMzBK4pc

ramana · Post by **ramana** » 23 Sep 2009 21:54

Hari, I got a VCD of a cartoon recital of Sumati Satakam from Music World in Hyd. Might be englightening. Its also called Badde Niti. Baddenna was Kakatiya Prince/governor.

Krishna Devaraya used to have recited every morning to make sure he doesn't get astray.

svinayak · Post by **svinayak** » 24 Sep 2009 04:52

http://www.youtube.com/watch?v=hnwtBSbA1c0

Check out what Don Regan did to reforms in the 80s

http://labs.daylife.com/journalist/frank_shostak

svinayak · Post by **svinayak** » 24 Sep 2009 05:25

http://www.marketoracle.co.uk/index.php ... &sid=13189

Frank Shostak goes on in his article to leave the economic policies of the present administration in shreds – he does so in a very patient and erudite fashion. It’s clear, it’s logical and it’s a must-read for anyone who wants to get a no-nonsense explanation of just why "Obamanomics" won’t work.

But it’s not as if we haven’t been here before. We even know the cause – fiat money!

"[The current crisis is] payback for a decade of reckless monetary policy … The recession is not the problem, the recession is the cure. It's not fun, just like heroin withdrawal is not fun ... but it's necessary." ~ Peter Schiff.

The problem is that no-one in government has either the guts or understanding, or both, to do what is needed. The last time anyone had the courage was during the Regan administration. Fed Chairman Paul Volcker stopped pushing counterfeit money into the system and let interest rates soar. In spite of incredible public hostility Ronald Regan stood by him. Of course, the healing process was painful but recovery followed and the USA, as usual, dragged the rest of the world back with it. Nothing has changed here. Recovery in the USA is still required before the global economy can recover.

But "real" recovery in the USA is no-where in sight.

The fact is we are no longer in a boom-bust cycle. We are in a Depression. And there’s worse to come. The next shock is imminent. Adjustable rate mortgages on commercial property are due to begin re-setting upwards:

"By some estimates, two out of every three will no longer meet the original loan conditions and won't be able to refinance … [a]nd with prices for commercial properties expected to plunge … [t]he falling prices in commercial real estate will lead to additional bank losses at a time when banks are sapped by home mortgage defaults and soaring credit card defaults."

shyam · Post by **shyam** » 24 Sep 2009 09:45

Acharya wrote: "By some estimates, two out of every three will no longer meet the original loan conditions and won't be able to refinance … [a]nd with prices for commercial properties expected to plunge … [t]he falling prices in commercial real estate will lead to additional bank losses at a time when banks are sapped by home mortgage defaults and soaring credit card defaults."

I think they already have solution in place. Current historic low rates will help these people renegotiate the interest rates to low ones (obviously, teaser rates will have to go). So the change in interest rates may still be affordabe to many people.

But retail closures and defaults due to lack of revenue is a different problem and should be much smaller compared to the above mentioned one.

svinayak · Post by **svinayak** » 24 Sep 2009 09:59

It is a $1T problem and so will not be small one even if refinanced.

shyamd · Post by **shyamd** » 25 Sep 2009 02:12

Its dropped 40% this month. Indication that commodities are going to drop massively. Expect a large increase in pirate activity.
Baltic Dry Index plunges to quarterly low

Slumping iron ore demand, increased capacity will keep drybulk ocean freight rates low

One of the biggest drivers of drybulk freight demand is iron ore shipping to China for steelmaking. With stimulus-fed production slipping, China's iron-ore imports declined 14% in August from July and coal imports slid 15%, a second consecutive monthly decline, according to a Bloomberg analysis of customs data. And the outlook for iron ore demand from most analysts points to a short-term slump.

"Lower Chinese imports will slow iron-ore trade in late 2009," said Piet-Hein Ingen Housz, managing director of metals commodities at Fortis, in a Bloomberg report. "Iron-ore trade growth will be slow in the first half of 2010, with activity increasing" later that year, he said.

But at the same time, there is a continuing overcapacity issue in drybulk freight markets. The rally in drybulk rates earlier this year may have been enough to convince some shipbuilders to avoid retiring older ships or scrapping plans for new ones, creating overcapacity on the water, especially in the all-important lanes between Asia and North and South America. And port congestion that once plagued the market is much less of an issue with the lower volumes.

shyamd · Post by **shyamd** » 25 Sep 2009 02:20

Acharya wrote:
In Saudi Arabia and Kuwait, debt exposure suddenly cast a new light on inward-looking, clannish business structures.
Two of the former's biggest conglomerates, family-run Al Gosaibi and Maan al Sanea’s Saad Group, related by both marriage and mutual investments, are involved in a bitter falling out with each other and their creditors.
Newspaper columnists discuss how to deal with beggars in Riyadh. Oil tankers float at sea, full up but with nowhere to go.
As with the rest of the world, the situation, and the price of oil, may have stabilised – for now. The federal United Arab Emirates government is buying Dubai’s bonds and is still aiming for a nationwide growth rate of 3pc for 2009.
That has allowed the region, smarting at criticism of its materialistic excess and its treatment of the people who live there, some breathing space to look at fundamentals.
http://www.telegraph.co.uk/finance/fina ... order.html

Is there over production of Crude but less supply of refined products

Lots of major banks such as HSBC had exposure to the 2 companies. UK has given the go ahead to cease assets in the UK. However, all their assets are in KSA. They are waiting for a court order from Riyadh. Apparently the chap, sold lots of assets and converted it into gold and has hidden it somewhere. So, there won't be any assets to cease. Lot of companies are going to lose a lot due to this.

shyamd · Post by **shyamd** » 25 Sep 2009 02:39

Hari Seldon wrote:Wow Ramana garu. Have admittedly little clue about the sumati sutakam. The telugu script is beautiful, mussay.

Meanwhile, half a world away, in UQstan....

Bank of England warns of the consequences of thrift

An attempt by British consumers to rein in spending after the harsh lessons of the recession could limit growth and therefore depress household income further, the Bank of England warns today. It says in its latest Quarterly Bulletin that household decisions to spend or save will have major consequences for the economic outlook, because consumer spending accounts for two-thirds of total spending in the UK. "Any attempt to reduce consumption is likely to push down on output and hence household incomes. That could actually make it harder for households to increase their savings – known as the paradox of thrift."

The Bank says that even if households saved as much as 10pc of income, it would take nine years to bring wealth back up to the average of the last 20 years. Credit conditions are likely to remain tight, the Bank says, which could limit spending – as could job insecurity. The Bank also says that most financial asset prices have continued to increase over the third quarter and conditions in bank funding markets have improved. Improvement in sentiment has prompted analysts to revise upwards their expectations for short-term corporate earnings, coinciding with a rise in equity prices. It reveals in the Bulletin that, from July 24 to August 4, the Bank did not buy any corporate bonds after receiving no offers in five consecutive auctions.
Huh. Wow, eh? Deflation it is. Despite the original doyen of quantitative easing - the BoE and the chancellory of the treasury - trying desperately to ignite inflation and inflate mounting debt away, the rest of the ekhanomy in UQstan refuses to fall in line seems like. People are (gasp) saving instead of consuming! And deflation - which makes today's penny worth more tomorrow, accelarates the affect.

The BoE better dance inflation into existence! Now! For its own good. Long live the (mervyn) king!

Thats because the banks don't want to lend. They are trying to increase their customer deposits to loan ratio. They have set targets to be achieved by 2012 etc. So, they are just sitting on the cash from the government and telling investors: "Look, we are doing fine, we are signifcantly increasing our Customer deposits to Loans Ratio"

amol.p · Post by **amol.p** » 25 Sep 2009 13:14

U.S. large-loan bank losses triple to $53 billion: regulators

According to the report, criticized assets rated 'special mention', 'substandard', 'doubtful' and 'loss', touched $642 billion, representing 22.3 percent of the SNC portfolio, compared with 13.4 percent a year ago.

Classified assets rated 'substandard', 'doubtful', and 'loss,' rose to $447 billion from $163 billion in 2008.

http://www.reuters.com/article/newsOne/ ... HR20090925

I fail to understand if the banks are having so much losses how come in qtrly report they are showing profits..?????????????

Nandu · Post by **Nandu** » 25 Sep 2009 22:23

7 million foreclosures pending to come on market. Housing crash to resume - Analysts.

http://www.bloomberg.com/apps/news?pid= ... 6_gqc0EKKg

ramana · Post by **ramana** » 26 Sep 2009 01:36

amol.p wrote:U.S. large-loan bank losses triple to $53 billion: regulators

According to the report, criticized assets rated 'special mention', 'substandard', 'doubtful' and 'loss', touched $642 billion, representing 22.3 percent of the SNC portfolio, compared with 13.4 percent a year ago.

Classified assets rated 'substandard', 'doubtful', and 'loss,' rose to $447 billion from $163 billion in 2008.

http://www.reuters.com/article/newsOne/ ... HR20090925

I fail to understand if the banks are having so much losses how come in qtrly report they are showing profits..?????????????

They dont lend any of the TARP money and whatever they lend is so bullet proof: very high appraisal and equity to debt ratio.

The employment situation is hitting hard increasing the mess. Govt has spent so much money in bailingout it cant afford to spend on essentials that keep the country going.

ShyamSP · Post by **ShyamSP** » 26 Sep 2009 02:35

ramana wrote:
amol.p wrote:U.S. large-loan bank losses triple to $53 billion: regulators

According to the report, criticized assets rated 'special mention', 'substandard', 'doubtful' and 'loss', touched $642 billion, representing 22.3 percent of the SNC portfolio, compared with 13.4 percent a year ago.

Classified assets rated 'substandard', 'doubtful', and 'loss,' rose to $447 billion from $163 billion in 2008.

http://www.reuters.com/article/newsOne/ ... HR20090925

I fail to understand if the banks are having so much losses how come in qtrly report they are showing profits..?????????????

They dont lend any of the TARP money and whatever they lend is so bullet proof: very high appraisal and equity to debt ratio.

The employment situation is hitting hard increasing the mess. Govt has spent so much money in bailingout it cant afford to spend on essentials that keep the country going.

>I fail to understand if the banks are having so much losses how come in qtrly report they are showing profits..?????????????

That is because they are allowed to mark-to-book value in the books instead of mark-to-market for assets. For example, if $1 millon asset is valued at $800K at current market. They can still show $1million for asset. Covering bad assets gives them ability to borrow high amounts from Fed. As for profits, they are getting cheap money and any decent return on the loans they give out or short-term investments they can show profits. It is like a ponzi scheme.

paramu · Post by **paramu** » 26 Sep 2009 06:05

The debt coming due

amol.p · Post by **amol.p** » 26 Sep 2009 17:38

Toyota-GM's NUMMI to axe all 4,700 workers

http://economictimes.indiatimes.com/new ... 059533.cms

Puerto Rico to lay off 16,000 workers, cut deficit

Puerto Rico's government announced Friday that it will lay off more than 16,000 public workers in the US Caribbean territory, adding to an unemployment rate higher than that of any US state.

The government hopes the layoffs will help close a $3.2 billion deficit as the island struggles through its third year of recession and a 15 per cent unemployment rate.

http://economictimes.indiatimes.com/new ... 058649.cms

amol.p · Post by **amol.p** » 26 Sep 2009 17:40

ONE OF THE MAJOR SHIFT AFTER RECESSION IN US

G8's history, G20 to call the shots now

http://economictimes.indiatimes.com/art ... 058424.cms

svinayak · Post by **svinayak** » 26 Sep 2009 20:15

amol.p wrote:Toyota-GM's NUMMI to axe all 4,700 workers

http://economictimes.indiatimes.com/new ... 059533.cms

While talking to a Obama govt Trade and commerce deputy he had gone to India and discussed with Mahindra and TATA about acquiring the Toyota NUMMI plant. They declined saying that they will invest in Kentucky, Missisippi etc.

Neshant · Post by **Neshant** » 27 Sep 2009 08:58

A Year Later, Barofsky Says U.S. May Be In a 'Far More Dangerous' Financial Situation

http://huffpostfund.org/video/year-late ... -situation

Ameet · Post by **Ameet** » 28 Sep 2009 00:26

Early retirements strain social security system

http://news.yahoo.com/s/ap/us_social_se ... etirements

Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s.

The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.

Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.

What happened? The recession hit and many older workers suddenly found themselves laid off with no place to turn but Social Security.

"A lot of people who in better times would have continued working are opting to retire," said Alan J. Auerbach, an economics and law professor at the University of California, Berkeley. "If they were younger, we would call them unemployed."

shyam · Post by **shyam** » 28 Sep 2009 03:36

Long speech. Can't believe that this guy predicted the economic catastrophies perfectly long back
Peter Schiff Mortgage Bankers Speech Nov/13/06