Posted on 10/06/2008 7:02:37 AM PDT by TigerLikesRooster
October 6, 2008
Worst-case scenario is approaching rapidly
David Wighton, Business and City Editor
The credit crisis, which has been building slowly for the past year, is now moving so fast that governments around the world are finding it impossible to keep pace.
On Saturday Angela Merkel, the German leader, criticised last week’s decision by the Irish to guarantee all deposits in their leading banks without consulting other European countries. The Irish Government said that the move was forced on it by the threat of a run on one of its banks. Only a day later Ms Merkel was forced to take almost the same action in almost the same circumstances.
In the longer term, this clearly raises questions about the hopes for (or fears of) European financial integration. In the short term, it presents serious challenges for other European governments.
A week ago the British Government was hoping that it had coped with its immediate banking headache after the bailout of Bradford & Bingley. With the proposed rescue takeover of HBOS by Lloyds TSB, this stabilised the two big British banks that looked most vulnerable.
Then came the shock move by the Irish Government to guarantee not only individual savings but also the large deposits held by companies. Downing Street was furious because British banks feared they would see a flight of money towards Irish banks.
Downing Street decided merely to accelerate the planned increase in the ceiling on guaranteed deposits from £35,000 to £50,000, although the decision remains under review.
(Excerpt) Read more at business.timesonline.co.uk ...
If the FDIC starts reneging on it's promise to insure deposits then all hell breaks lose.
As for real assets, their nominal value can theoretically fall by a factor of 10, if nothing is done about this. Because 90% of the world's money supply can just disappear.
This is why I'm wondering whether to retire debt or keep cash. The cash will decrease in value at the same rate as the real property.
But a better solution would be for everyone to realize the seriousness of the problem, stop playing the blame games and stop trashing bankers and finance, and then let the Fed save the banking system.
Oh come on, their hands are dirtier than the politicians. I don't expect the politicians to have any common sense. Bankers should have been smart enough to see that giving out loans with no money down to people with little or no credit would be a problem.
There is a natural yeast on the peel of the apple. That's why it has to be unpasteurized. It'll ferment slowly, but it will ferment.
We bottle it. In fact I usually add some priming sugar before bottling. Then you end up with sparkling hard cider.
In the toasty warm house
We do ours in the house. It's quicker that way.
L
darn you Laz for reminding me of the scariest movie of all time. darn you to heck
I must say...
If the money supply shrinks by 90%, your cash will become much more valuable.
If I find a recipe for stewed tumbleweed, I’ll invite you over. Everyone in the US could quit worrying about how to find grubs and eat at my place!
I've been wondering about that. Euroweenies go easily into sneer mode, which is pretty much where they've been since it was evident that the Marshall Plan was working. Now that things are getting tough for them, will they deal with the muzzies in their midst? It's hard to sneer when terrorists are bombing your media outlets for insulting their moon god and his designated spokespervert.
Conventional 'wisdom' says that WWII was what ended the Depression, perhaps the war on islammunism will have the same salutory effect on Western economies, especially with oil as one of the spoils?
Looks like dems overplayed their “October surprise”...
Don’t forget a towel.
Looks like a bit of a bounce now ... up over 100 from lows ... can I stop panicking or is this only a moment of false hope in an ever blackening universe?
Yes!
Insure that the loans would be paid and let the market work. Also, let the banks holding the mortgage backed securities value them based on cash flow and not mark to market.
They didn't do that and have made a tough recession that's just getting started a lot tougher.
So, I have my Mad Max dune buggy all ready, my dog has a spiked collar, and my wife is wearing the chain mail.
Is it time yet or do I have to go back to work Tuesday?
Sir, if you are the angel I see before the train hits me, then I suspect the Man Upstairs has a much more twisted sense of humor than I had originally thought!
LMAO!
I figure that when the biggest factor in my 401K's growth is the amount I put in every month, security of principal is way more important than banking on some risky stocks to pump up my account. And my account is pretty piddly at this time, I was only able to start re-establishing it this year.
I've become a master at learning how to deal with hard times.
For the record, the buggy with the keg on the side is mine!
Wrong...because of the mark to market accounting rule by SEC the banks were unable to value those MBS’s...now that SEC has changed that mark to market there will be a better way to value those MBS’s.
Now if the SEC does NOT drop that exemption for the $40 loan to $1 capital reserve, then in a few years this will all have been for naught...it is time to get that RESERVE amount right. Everyone should be writing the SEC to revoke that $40-$1 exemption NOW....before they start lending again or we will be right back in this mess in a few years..
I was thinking the same thing. If the mishandling of this mess makes the recession worse there should be some great long term opportunities. IIRC, the best thing to do in a deflationary cycle is to save.
Looked like I picked the wrong month to stop shooting up heroin.
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