Cramer: 'Dysfunctional' Banking System Puts U.S. 'Totally' at Risk of 'Great Depression No. 2'

businessandmedia.org ^ | September 11, 2008 | Jeff Poor

[justa-hairyape]

The Just In Time inventory method allows a company to significantly reduce its costs. It basically shrinks the required size of the warehouse or distribution building. Thus, the companies warehouse lease costs are much lower. IMHO - It really should be up to individual consumers to provide themselves with a disaster storage of food. Mine is about 10 days worth now and I am slowly increasing that. I live in earthquake country however.

[justa-hairyape]

So when will silver be a good buy again ? Wont fall back to $6 will it ? Seems to be trying to develop some $10 support right now.

[EVO X]

I understand the principle that these guys have to take risk to make money. But at what point does taking calculated risk turn to drunken gambling? These guys were either drunk with greed or inept.

Fannie and Freddie allowed millions of people to acquire 30 year fixed rate loans at rates lower than the corner bank could or would offer. Once they deviated from their risk model, they got in trouble. If they wouldn't have become involved with trading sub-prime paper, they would still be viable.

[ex-Texan]

Here is a very bitter one minute comment on the F & F bailout:

Video Comment Here

So we just nationalized F & F at the drop of a hat, without any debate, without amendments. Now Congress wants to give crooked former CEO Franklin Raines a $5.3 million severance package for cooking the books. The man belongs in jail. $6.3 billion in obvious accounting fraud.

And Congress wants to give him a Golden Parachute ______________ ? ! $ 200 million in political bribes goes a long way these days.

[Travis McGee]

Yep, loss of intergenerational memory is a major part of the business cycle between crashes.

[Travis McGee]

I’ll buy any .999 silver coins or bars you have for 12 dollars an ounce.

[Travis McGee]

PS: that would be actual physical silver coins or bars, not paper ETFs or other manipulated make-believe from the land of naked shorts.

[Toddsterpatriot]

I’ll buy any .999 silver coins or bars you have for 12 dollars an ounce.

Averaging down?

[Toddsterpatriot]

PS: that would be actual physical silver coins or bars, not paper ETFs or other manipulated make-believe from the land of naked shorts.

As soon as I cover my shorts I'll let you know.

[ex-Texan]

JMHO . . . for whatever that is worth . . .

Goldman Sachs Will Be Next !

Or maybe not. We will see. But the stock is at least 50% out of whack with other share values on the street.

[VOA]

JerseyHighlander,
Thanks for the extra explanation and correction.

The guy from Forbes said this method of putting “projected tax credits”
as capital is technically possible but apparently not a Kosher thing
to do.

What also got me is that he said Congress had called at least one
of the groups onto the carpet over irregularities in 2003.
Sounds like either Congress punted and/or the Freddie Mac/Fannie Mae
accountants sweet-talked their way out of the situation then.
But it appears either way they just managed to continue operations
and continue to pile up problems.

[ex-Texan]

My evidence: Here is the latest data on how short interest has changed over the past few months and where bets are being made.

Data from Thomson Reuters shows that short positions for some of these banks are still up from where they were six month ago. However, in the last few months, some banks' short

interest has risen while the short interest in others has fallen.

[TigerLikesRooster]

If Goldman Sachs goes down, I suspect all bet are off and everybody will make a mad dash for exit. However, as you said, would it really happen?

[hiredhand]

I got it from a seminar that we attended by Dave Ramsey. You can get more current info by going to www.daveramsey.com and searching his site for - “consumer debt”. Look for a PDF in the search returns titled, “A Special Report on the Business Cost of Financial Stress.” I think the same info is contained in it.

[Toddsterpatriot]

Thanks for the link. I didn't find that claim in the PDF. I did see that consumer debt was $11.5 trillion in 2005. That's less than $4000 per person. Makes this...

When 90%+ of our citizenry carries $20k in consumer debt, spread across two credit cards, makes a house payment, two car payments, and is using credit to put one youngster in school, the outcome can NOT be good.

...sound vastly overstated

[TomasUSMC]

Buying up junk paper in an attempt to reinflate the housing bubble, treating the debt binge by supplying more debt, is a cure worse than the disease
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Excellent!

[TomasUSMC]

only 10 large banks account for over 50% of the banking system’s assets
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It should have been easier for the government to check up on 10 banks than 30. But I guess the bribes were that much bigger also.

Nevertheless, the oversight folks should get a little jail time too.

[TomasUSMC]

No one is talking about the greed of the Housing industry. As American Family average size has gotten smaller the average size of home has increased.

[RatRipper]

Greed over origination fees and fees from securitization.

[TomasUSMC]

So we just nationalized F & F at the drop of a hat, without any debate, without amendments. Now Congress wants to give crooked former CEO Franklin Raines a $5.3 million severance package for cooking the books.
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Should we change the independence of the Fed? It sure seems that they are starting to abuse that independence. First 400 billion, then more, now 200 more, and this FF bailout...does that make us liable for the trillions in loans they had out?