Posted on 01/03/2010 11:29:24 AM PST by blackminorca
~~PING!
In that case, deposits directly with the treasury makes more sense. Anyone can buy short term paper and everything else for that matter, with no commission or fees.
That’s why MM fund companies are going to have a hard time offering money market funds when current interest rates are so low - in effect making customers pay to receive only negative returns. That’s not gonna fly.
For sure they do not want any hidden money. They can’t redistribute hidden money. Or use it for their agenda and tax it to death.
Lay person here too. I saw a article on gold and silver buying. Let me see if I can find it. But the great information from NV and Candor is very helpful figuring out WTH Obama and his evil regime are trying to do to us.
I am kind of thinking of placing everything we have in properties or business. I think we are in for a commercial and another real estate bust this year but at some point there will be some great investments.
One other concern of mine is RE will see another bust, all those modified loans will be under water again. God Help us.Obama will want to bail them out again. I saw one commercial shopping center behind to the tune of 5 million to be foreclosed on.
I also believe a momentous and shocking
financial event occurred then, whether
Kanjorski got the #’s right or not.
One other tidbit for you from those days:
http://phoenix.bizjournals.com/phoenix/stories/2008/12/15/daily34.html
Now, if it all was a smokescreen, then it all comes back to ONE man, and it is not George Soros.
It is, however, Hank Paulson. Paulson was the man Kanjorski was quoting. Here again, Paulson is the guy that Inhofe and Sherman are quoting.
It is entirely possible that this was blown out of proportion, that someone with insider information as to what was really happening on Wall Street (remember that Paulson talked to Goldman Sachs more than he talked to the Fed, Congress or Pres. Bush) buffalo’ed these people into panic.
If that turns out to be the case, then I hope that Paulson is brought up on charges of treason.
Kanjorski appears to have a history of having made similar claims in the past, so there’s reason for taking his statements with a grain of salt. He needs to produce sources to back his claims.
I have no doubt that the Treasury and the Fed were very worried that the Lehman and Reserve Fund failures could incite a much larger run which could spread to other deposit classes and create a self fulfilling prophecy of financial collapse. That’s similar to the panic that took hold in 1930 and crashed the banking system.
But I think that they were acting proactively in order to quell panic. There’s just no evidence to support the belief that they were reacting to the sort of organized draw down that Kanjorski seems to promote.
“In that case, deposits directly with the treasury makes more sense”
That’s what many investors are doing right now and there may well be a bubble in Treasury paper. If interest rates go up, and there’s reason to think that they will by March, then that Treasury bubble could pop. Just be aware that Treasuries aren’t risk free.
http://www.mutualfundshow.com/RecentShows.aspx
Somewhere on this show Adam Bold talks about gold buying. Interesting to listen to while you are on the internet. The only thing I know about Adam is he has a radio talk show on KMJ while I am driving saturday morning.
He seems to feel that when gold is advertised like it is now that it has topped out in price. A caller reminded him he had said gold was not a good investment on a previous show. And gold climbed. Adam explains why he feels that way.
And one more tidbit from those days: RBS and HBOS were given a secret bailout by the UK government, which has only recently been made public:
It wasn’t just the US. There was a lot of money being withdrawn all over the place.
That would be appreciated.
Real Estate is hemorrhaging and has only a 'band-aid' on it. Expired listings are on the rise and prices are still dropping (at least in MO). This tax credit is only a band aid of what is coming (imo).
Yes Candor & NV have been extremely informative on this (thanks to both!). I'm continually impressed with the intelligence/depth of knowledge the members have here. I learn something daily and it's 99% rock solid information that can be depended on.
That scenario happened once before in American history, the Bonus Marchers back in 1932. WWI vets wanted cash payments for their service and set up camp in the Anacostia section of Washington DC. Douglas MacArthur led an Army contingent that attacked the Bonus Marchers and killed a number of them. Times were tough in the Depression.
I wouldn’t put too much emphasis on what Paulson said or failed to say. He wasn’t trained as a politician and public speaker, he was an investment banker. I am much more concerned about how he might have been enriching his Goldman Sachs pals at taxpayer expense.
bflr
That’s where it gets confusing. How can bonds be in a bubble? The rates are so low as to be meaningless. I opened a TD account several years ago just so it would be set up. Last year I bought a 4 week bill with 100 dollars. Netted a whole 1 cent! Yeehaw.
I want to (I think) have flexibility to buy longer term notes or bonds if and when interest rates rise, so have some in short term obligations or, CofI zero per cent.
Yes, it’s a global event, which is one reason why the dollar is likely to surprise on the upside. As bad as our situation is it is worse elsewhere. Our pals who insist on viewing this crisis as originating in Democrat vs Republican politics apparently don’t appreciate just how widespread the problem is.
” How can bonds be in a bubble? The rates are so low as to be meaningless.”
Investors are seeing bonds as having no risk and they are bidding them up, which results in low yields. Bonds have interest rate risk. If interest rates spike up then the price of low-yielding bonds will fall. Long bonds are subject to greater interest rate risk than short paper. Stick to short paper right now and you will be okay. The time to buy long bonds is when interest rates are high.
The incomplete list of actions taken during that time that I put up above do not comport with one MMF losing under $800 *m*illion due to Lehman. In a matter of a month, the Treasury and Fed together put up hundreds upon hundreds of *b*illions in backstops and bailouts.
Indeed, Reserve’s Primary fund had a 60% outflow in the days following their “break the buck” announcement[*]. Not hours, days. So I’ll grant you, that the on-the-record figures of the previous week were in the 10’s of billions, day after day. Not pretty, but not cause for what came after 17 September.
It is what happened subsequent to that, and the magnitude, that tells me that something on the order of Kanjorski’s slip was in the works. The Fed took on so much commercial paper during that time that it is clear to me that they didn’t know whether to crap or go blind. Look at the Fed’s balance sheet during that period, as outlined in this interesting paper from the IMF:
http://www.imf.org/external/pubs/ft/wp/2009/wp09120.pdf
Look at the chart of the Fed’s balance sheet - before and after. All anyone who is familiar with financial markets can say is “holy *(&&*^!”
Kajorski’s source was Paulson. Paulson and Bernanke had that neat little closed-door sit-down with members of Congress on September 18th. They all came out of that meeting looking shell-shocked. Now, we know that with few exceptions, members of Congress are functional retards when it comes to money. That’s why the US is in the deficit mess we’re in, so we agree there.
But we have Kanjorski claiming $550B in a couple of hours, Inhofe and Sherman claiming that Paulson was talking of the possibility of martial law... and now we have three people relating information attributed to Paulson that is over-the-top stuff.
So I’m ready to believe that Paulson was the source of the figures, easily. Given Paulson’s demand that the TARP legislation be three pages and never be subject to oversight by Congress or redress in the court system, both of which are completely without precedent unless we’re talking of wartime spending in situations like the Civil War and WWII?
Yea, I’m absolutely ready to finger Paulson as being the source of over-the-top claims, if what Kanjorski relates was either incorrect or exaggerated. Paulson’s actions at the time are indicative of outright panic or the most bold theft in the entire history of mankind, the sort of actions that would result in a death penalty if they were outright frauds and untrue.
Thank you OO
On that, we’re in vehement agreement. Absolutely.
Here’s a delicious bit of dark humor from those days. Did you pay any attention during those days to the harrumphing of the German Minister of Finance, Steinbrueck? Here’s a wee sample of his pecksniffing:
http://www.forbes.com/feeds/afx/2008/09/25/afx5468765.html
Flash-forward a couple of weeks into October 2009. Hypo Real Estate Bank... the German President Merkel comes out of a meeting in Paris on the subject of a co-ordinated EU response to their banking issues, and within two hours blows all talk of co-ordination out of the water as she has to backstop Hypo - lest it go down in flames with depositors’ monies, because there was no deposit insurance.
Ah, it was delicious irony reading the pecksniffery of the German MoF one week, only to see him walking in lock-step only two weeks later. Since I can read German, it was very telling to see how the Germans handled it in their domestic press vs. how the Germans put up a front for the “Anglo-American” business press. Internally, the Germans were mortified to find out that their banks were levered up even higher and thinner than US banks. The numbers were just smaller in absolute amount, that’s all.
I think we need to ‘splain to folks how bond trading works - ie, bonds are issued at par, heavy bidding means the price goes up, yield to maturity (or call) goes down, etc.
Got a quick reference URL you could flip up for folks?
Yup, I’m familiar with the Bonus Marchers and the subsequent killings. One of the more shameful events in our nation’s history, IMO. Those men served, as asked, and all they were asking for was payment on what the government promised them.
Of Paulson enriching his buddies at Goldman - of that I have NO doubt. The more I think about it, the more furious I become. The more that comes out of the AIG deal, the more furious I become.
People here on FR who stick up for Goldman using such bromides as “free market” are clearly not paying attention to the facts. Goldman is making money because they’re able to warp the regulatory and legislative process to their ends, not because they have any excess of talent.
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