bttt
I said here two years ago (and was a laughing stock), that the housing/credit meltdown could lead to a recessionas bad or worse than the GD. It seemed “almost” impossible to me at the time, but a risk.
In my mind, the probability of anoter GD beginning in the next three years, without government intervention in the banking system, is much greater than 50%. With it, significantly lower.
Congrats taxpayers. Word is we will soon own some of the Lehman downside risk too. Feds are engineering a buyout ala Bear Stearns.
CRAMER: We don’t want a Great Depression. I mean, we just don’t want one.
BURNETT: But, are we really at risk of a Great Depression? Most people would argue that we’re not in a full-blown recession.
CRAMER: Totally, totally. John Stumpf [president] from Wells Fargo said it was the worst since the Great Depression.
BURNETT: In housing, but that’s not everywhere.
CRAMER: If I wanted clean hands, if I wanted to be Andrew Mellon, I would call for – I would just say, “Listen, let’s just let the Great Depression, Number Two, happen. But, that’s where we are. That’s, we’ve been like that for a while. So, let’s try to avoid it if we can.
Cramer: Mr. pump and dump.
Here we go with another liberal fearmongering over the state of the economy.
Just like Rush says: Libs always try to scare voters every four years with the economy. Rush says that libs try to act as if souplines are forming, etc, etc.
I don’t question Cramers knowledge, only his motives.
Isn’t this the guy who said Bear-Stearns was a great buy about a week before it collapsed?
Jim Cramer, the Sam Kinison of the financial world.
This is a hit and run. I am a retired state bank examiner and current banker. Several years ago Congress panicked when they discovered that 8 or 9 of the world’s largest banks were Japanese. The Japanese economy later tanked, but Congress eventually cleared the way for interstate mergers. The years of mergers and consolidations, while having some aspects of vastly improved diversification of asset risks for the balance sheets of the larger banks, carried with it another risk: concentration of banking assets.
Currently, only 10 large banks account for over 50% of the banking system’s assets in the US. So when you have risky behavior by these huge banks during an extended boom period, the inevitable losses from the bust, in this case caused by undisciplined mortgage markets, places the entire banking system at risk because banks have been allowed to become very large. While I fundamentally believe in free markets, banking already is a highly regulated industry, and the risks are just too high to the economic well-being of the country to allow banks to get this large.
As a result, these banks become so large and pose enough risk to the economy and country that they become “too big to fail”. It isn’t just the stockholders that lose when a bank that large goes down. I does a tremendous amount of damage to the economy. As a result, I think these large banks ought to be broken apart and not allowing them to account for more than 1 or 2 percent of the country’s banking assets each. To give you a feel, as of March 2008 Bank of America, JP Morgan Chase and Citi each accounted for more that 10% of the banking assets. Wells Fargo and Wachovia were 4.1% and 5.7% respectively. I don’t think this counts the investment banks like Lehman. This creates a huge amount of risk for us all, which we now all see clearly through the mortgage crisis.
All I can say is: get your stock buying list ready.
Banks make bad decisions and offer risky loans that fail, and want taxpayers to bail them out.
Automakers are more concerned about diversity and homosexual agendas and can’t get people to buy their cars, and want taxpayers to bail them out.
People want houses and loans for them that they know are above their lifestyle, and keep taking credit card offers they never pay off, and they want taxpayers to bail them out.
No. The average taxpayer can’t get away with assuming others will cover their bad personal or business decisions. Who will bail out the responsible people? Nobody. They’ll have already taken the money from the responsible, to bail out the irresponsible.
Besides theis whole fractional reserve/credit out of thin air banking system is abused to the extreme. They should not be able to generate 90 dollars of credit or more on one dollar deposited. When lots of loans fail, banks ares stretched WAY WAY too thin because they don’t have the physical cash deposited to cover people’s holdings in the bank.
It is a self-induced crisis that could totally be avoided. Makes me sick.
The CEO was forced to hold a news conference and declare that BoA did NOT need capital and would NOT cut the dividend.
Of course, BoA reported POSITIVE earnings of $0.41 per share the next day, maintained the dividend and did not raise capital. It subsequently rallied 40% in a week. Cramer is a despicable, irresponsible, fear-mongering ass.
So just who is this guy working for?