Hundreds of banks will fail, Roubini tells Barron's

Reuters ^ | 08/03/08

[Porterville]

No, no , no.... according to the MSM BJ Clinton had the best economy since the founding of the Roman Empire.

And if Obama wins we will have the best economy since Egypt and the first 7 years of Joseph and his mighty fine coat.

[AndyJackson]

You are witnessing a slow motion devaluation of government debts by increased money supply

Of course, but it is amazing how many people cannot see this happening before their own eyes.

[JerseyHighlander]

1. Roubini is absolutely NOT telling people to take money out of banks. 2. Roubini is a contracted fund manager for banks. He isn't attacking his customer base. 3. Roubini is not a Soros operative, Roubini is just an analyst with a decent track record, just last week Roubini reviewed Soros new book as "a book for retards" in so many words...

 

More and more voices point at the irrationality of markets, institutions, and traders. It is claimed that markets are dominated by bubbles, fads, and frenzies and that institutions and investors take risks that they do not understand. The recent book by George Soros is a good example of this point of view which goes as far as hinting that established financial theory is obsolete. How can the past Internet bubble be explained otherwise? The current crisis, as the argument goes, is the final proof that markets do not aggregate information efficiently. We are closer to Keynes’ casino than to the view of the market as a marvel of Hayek. Read “Irrationality and the crisis” by Xavier Vives. http://www.rgemonitor.com/roubini-monitor/cat/emerging-market-economies/

[editor-surveyor]

So, Roubini’s comments encourage you to deposit?

It’s time to put on your thinking cap.

[Freedom4US]

“Sounds like you invest :) “

Nah, not really. In fact I don’t have to worry about exceeding the 100k depositor limitation, and don’t expect to anytime soon, lol. Nice problem to have, and so it is inexplicable to me anyway why anyone would put their money at risk in that way, apparently about 5 per cent or 1 billion dollars at IndyMac was not insured. I am probably “worth” close to 100k, but that is tied to my home equity, cash, cash equivalents or better.

One of the things that turned out pretty good were - get this - US Savings bonds. The I-bonds don’t look too good right now specifically but the earlier ones are yielding almost 8 per cent. They are not pledgeable technically as collateral, but I brought a huge stack of them with me to the bank when they crawled up my ass with a microscope which recently is part of the loan process ;)

I got a phone call before the close “Say, I see you deposited $5000 into your checking account last week.”

Me: (paraphrased) “Yeah, so why is that a problem?” It went downhill from there. Stupid me, I didn’t understand they were worried I’d taken out another loan or whatever. I had to show where the money came from, in this case from the sale of equities.

I can’t figure out why anyone would buy a CD from an iffy bank, when direct obligations of the government are available at similar rates, and with no commission. Interestingly the government does not sell 30 year obligations anymore except for savings bonds, and has reduced the limit to $5,000 in any one calendar year. Another $5,000 can be invested in the electronic version of savings bonds, and then each spouse could do the same. That’s 20k. But investors can buy any amount of T-bills, notes, bonds, TIPS, and so on direct from the treasury which seems to me a great way to go for that part of the portfolio that has to be kept safe in the medium-term (10 years to 5 years say); which is a neglected part of most peoples budget.

That’s why “liquidity” is the latest buzzword. A lot of stuff people bought that was supposedly as good as cash, wasn’t.