"No U.S. bank is more exposed to troubled real estate than Bank of America"
The bailout of Bank of America begins, courtesy of Tim Geithner. I don't know why the headline on this article doesn't say "BofA Sells Part Of Mortgage Portfolio To The Taxpayers" instead of "to Fannie Mae." Here's the news report (if you can't pull up the whole article, google the headline and you'll get a link to the entire article) LINK
Rest assurred knowing that most of those mortgages are under water and will default and the Taxpayer will get to pay the costs involved. The Taxpayer's money will also be used to pay the upper management their bonuses for all their hard work in arranging deals like this.
Just a quick comment on whether it's too late to buy into gold and silver or whether or not you should take some profits. The reason to own gold gets stronger everyday. Take yesterday for instance. The Fed has guaranteed zero interest rates for 2 more years. Real interest rates (nominal rates which are zero - less the inflation rate) will be negative for at least two years. Gold ALWAYS ALWAYS ALWAYS goes hgher when real interest rates are negative. Always. Negative real interest rates are like rocket fuel for gold/silver. So the Fed has now guaranteed higher gold for at least 2 years. Wait until QE3 kicks in...
Here's great commentary on the meaing of yesterday's policy announcement from the Fed: LINK Essentially this article explains why the language being used by Bernanke means that the gate is wide open for him to engage eventually in some type of QE3 program.
I'll be out of town for the next few days, so I probably won't have a post until Tuesday unless I see something over the weekend that really pisses me off.
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Like a CME margin hike per se?
ReplyDeleteSocialize the private sector but Gawd forbid the down trodden which include a lot of Vets get a hand out.
ReplyDeleteI know Dave will rail at this. LOL
http://blythemasters.blogspot.com post your love for her now, tell her how good she is doing!!!!!!
ReplyDeleteI don’t know the terms of the deal so I’m speaking in generalizations here, but WTF?
ReplyDeleteThis is infuriating. It’s pretty evident that Fannie and Freddie can’t run the books that they have, but what the hell, let’s throw another half million mortgages their way?
They should be getting leaner not more bloated. Why is the Gov buying this shit? I don’t care how illiquid this stuff was and how much capital BOFA needed to raise and who would be able to service the portfolio. I don’t even care if the Gov makes a boatload of money on the deal. They shouldn’t be doing it.
There’s a right price for every asset. If BOFA has to hit a $100 million bid from some hedge fund then do it. It’s not our problem.
British government begins stealing its peoples’ bank deposits ahead of the global financial collapse.
ReplyDeletehttp://philosophers-stone.co.uk/wordpress/2011/08/british-government-begins-stealing-its-peoples%E2%80%99-bank-deposits-ahead-of-the-global-financial-collapse/
Welcome to the Age of Instability (August 11, 2011)
ReplyDeleteThe phony fixes have failed, and the dam of toxic sludge and debt is
leaking; instability will be the New Normal until the dam finally
bursts and the financial Status Quo is swept away.
If you liked the past two weeks, you're going to love the next two
years: welcome to the age of instability. As I explained yesterday,
the quasi-religious belief in the stock market as a secure store of
wealth has faded, and for good reason: The Junkie in the Pool and
False Idols: Faith in Wall Street and The Fed Has Has Eroded (August
10, 2011).
In a nutshell, the Federal Reserve and Federal government's
extend-and-pretend, mark-to-fantasy, paper over bad private debt with
trillions in public bad debt "fixes" of the broken economy have
failed, completely, utterly, miserably. Rather than drain the cesspool
of impaired debt, risky bets gone bad and rampant abuse of the rule of
law, the Fed and the Central State have poured trillions of dollars
more bad debt into the fetid pool of sewage and sludge, which is now
full to bursting.
http://www.oftwominds.com/blogaug11/age-of-instability-8-11.html
It seems that the virtual currency world has an easier time raising money than the hard currency world...and the valuations seem flimsy at best. Amazing.
ReplyDeleteZynga revises accounting practices; has credit line
For the first time, the company said it had a revolving credit agreement with lenders to borrow up to $1 billion. It said it paid $2.5 million in fees up front as part of the terms of the agreement and will pay fees of $625,000 per quarter.
http://www.reuters.com/article/2011/08/11/us-zynga-idUSTRE77A5PE20110811?
Robert Rubin, Bank America and the fate of the dollar
ReplyDeleteThe reason for the inaction in Washington, needless to say, has to do with the vacuum surrounding President Obama, a lack of political substance which stems from the continuing influence, nay hegemony, of former Citigroup Chairmen Robert Rubin and his minions. Older more experienced Rubin operatives such as Larry Summers have already abandoned the sinking ship, but Treasury Secretary Timothy Geithner remains, we are told, until Rubin gives him permission to leave the table.
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
Things catch up to you when you're running with the devil...
ReplyDeleteThese riots reflect a society run on greed and looting
While bankers have publicly looted the country's wealth and got away with it, it's not hard to see why those who are locked out of the gravy train might think they were entitled to help themselves to a mobile phone. Some of the rioters make the connection explicitly. "The politicians say that we loot and rob, they are the original gangsters," one told a reporter. Another explained to the BBC: "We're showing the rich people we can do what we want."
Most have no stake in a society which has shut them out or an economic model which has now run into the sand. It's already become clear that divided Britain is in no state to absorb the austerity now being administered because three decades of neoliberal capitalism have already shattered so many social bonds of work and community.
What we're now seeing across the cities of England is the reflection of a society run on greed – and a poisonous failure of politics and social solidarity. There is now a danger that rioting might feed into ethnic conflict. Meanwhile, the latest phase of the economic crisis lurching back and forth between the United States and Europe risks tipping austerity Britain into slump or prolonged stagnation. We're starting to see the devastating costs of refusing to change course.
http://www.guardian.co.uk/commentisfree/2011/aug/10/riots-reflect-society-run-greed-looting
The Beaten Masses: Confronted With Severe Financial Hardship, Why Do Americans Remain Passive?
ReplyDeleteIf you are wondering why a critical mass of people desperately struggling to make ends meet are still not fighting back with overwhelming force and running the mega-wealthy aristocrats out of town, let’s consider two significant factors:
1) People are so busy trying to maintain their current standard of living that their energies are consumed by holding on to the little that they have left.
2) People have very little understanding of how much wealth has been consolidated within the top economic one-tenth of one percent.
Considering the first factor, it is obvious that people have become beaten down psychologically and financially. A report in the Guardian entitled, “Anxiety keeps the super-rich safe from middle-class rage,” suggests that people are so desperate to hold on to what they have that they are too busy looking down to look up: “As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery.”
Considering the second factor, people do not understand how much wealth has been withheld from them. The average person has never personally experienced or seen the excessive wealth and luxury that the mega-rich live in. Wealth inequality has grown so extreme and the wealthy have become so far re...
http://daviddegraw.org/2011/08/the-beaten-masses-confronted-with-severe-financial-hardship-why-do-americans-remain-passive/