Banks Say Everything fine (and immediately raise money)

Jamie Dimon CEO of JPMorgan says credit crisis is more than half way over, and then immediately has to raise $6 Billion in a preferred stock offering. Lehman brothers CEO Richard (The Great Short Hunter) Fuld says the same thing and immediately hits the new Fed window that investment banks can borrow at. It would be funny if it weren't so damn serious and dangerous. Here a link to the JPMorgan story. I'm scared to say anything bad about Lehman because they are after those who believe their stock should be worth less (just kidding they are most likely the next Bear Sterns due to their Alt-A[ remember that, it's the next subprime and MUCH bigger]). The fiction currently present on the balance sheets of financial institutions is staggering. It seems like Asia may have an idea about what is really going on. I particularly like this part

At $82.3 billion, Goldman Sachs Level 3 assets are more than twice its capital. This is not therefore a peripheral problem, which can be allowed to remain hidden within the arcana of accounting conferences. The reality is that, as was demonstrated in the true recessions of 1973-74 and 1980-82 but not in the mere dips of 1990-92 and 2001-02, the value of highly illiquid Level 3 assets taken on at the peak of a bull market is pretty well a big fat zero

Asia Times
Kinda scary when in the same newspaper you see this this pleasant thought here

2. Secondly, the region's central banks should collaborate to dump billions of US Treasuries, federal agency securities, European government bonds and mortgage-related securities over the next few weeks. This will push yields up sharply across G7 and serve notice of a buyer's strike.

Asia Times
The MSM is complicit in not holding HBBs (huge banks and brokers), regulators, the Fed, and Congress accountable since this whole mess started. It's worse than they are telling us. While composing this I found this from the other side of the pond.

Banks must disclose the size of their debts from poor quality home loans, Gordon Brown said on Wednesday night, amid signs that the impact of the global credit crisis may be even worse than suspected.

Telegraph-UK
We are being led into a Depression plain and simple. We can argue about whether it is through design ( NWO, NAU, insert global conspiracy here), or as the natural result of apathy, greed, and corruption running its natural course. The time may be past to stop it. I think it passed back in August-October. I feel for those who thought they were going to enter their retirement and continue to enjoy thos things they've known thier entire lives. As individuals, we need to prepare. First financially as best one can. Make plans for hyperinflation and deflation both are possible depending on the way things break and timing. Prepare mentally for challenges of job loss, scarcity, stress, and letting things go. Learn Self-sufficiency in providing your own food through farming, fishing, and hunting. Once you've made preparations for you and yours, find your nearest elected representative, and tell them that you know what they did (but mostly didn't do) while all this was happening and that you will remember in the future.

[edit on 16-4-2008 by jefwane]

reply to post by jefwane

I feel for those who thought they were going to enter their retirement and continue to enjoy thos things they've known thier entire lives.

Yes. I've been trying to wake up my parents to this fact. My dad has been retired for 10+ years, but mom just retired 3-4 months ago. She was in good shape, according to her broker, before she retired. I think she has begun to realize the 'hit' she may be taking. My dad is in his own little world, as usual... (take ass... insert head).

That said, I bring you this tid-bit, but I warn you of the source in advance... I can certainly not gaurantee any reliability from this person -- especially given the fact he claims to be invited to speak at an "anti-illegal immigration" rally in Washington on Sat 4/19, however I can find no information about that 'event' except from him and his site...

halturnershow.com...
THE HAL TURNER SHOW HAS LEARNED THAT TWO MAJOR U.S. BANKS HAVE "FROZEN" ALL THEIR "LINE OF CREDIT" ACCOUNTS -- CUSTOMERS MAY NOT BE ABLE TO USE THOSE LINES OF CREDIT ANYMORE. . . .
This is ominous because it is clear evidence that both Banks may no longer have enough resources to meet their customer credit needs. These two major banks may be COLLAPSING.

The information I received indicates that Bank of America and Wachovia are the two banks which took this action.

[edit on 4/17/2008 by RabbitChaser]

I'm not a big Hal Turner fan but the info about frozen lines of credit is solid if not the actual institutions. I have seen several articles about banks freezing HELOC's (Home Equity Lines of Credit), lowering HELOC limits due to home price depreciations, and even lowering limits on credit cards. Most people don't know this but almost all HELOC's are callable. THat means the bank can call the loan and force you to repay the entire balance even if you are current on any payment. I worry about BoA because of the Countrywide deal. They loaned several billion to countrywide and then the stock declined from aroun $17 to around $6 since. If BoA lent them the money and then shorted Countrywide to hedge it they've probably broken even and are going to end up with Countrywide's servicing portfolio (the only thing worth anything there IMHO) and end up as Debtor in Posession when Countrywide finally goes bankrupt. Wachovia laid a big stinky with their quarterly report earlier this week, but they appear to be as well or better capitalized than most of thier peers.

As an add on to my original OP. It appears that banks have been underreporting what rates they are borrowing fromm other banks at. This has caused the LIBOR rate to be mispriced by 10-30 basis points.

LIBOR FOG: Bankers Cast Doubt on Key Rate Amid Crisis

One of the most important barometers of the world's financial health could be sending false signals....bankers and traders are expressing concerns that the London inter-bank offered rate, known as Libor, is becoming unreliable.

from the WSJ

[edit on 17-4-2008 by jefwane]

I hate to bump my own thread, but has anyone noticed what's going on with Lehman brothers this week?. Rumors running rampant, crazy option activity(see some new stikes opened on July puts all the way down to $2.50), and insane volume. It's very reminiscent of Bear Sterns before it blew up.

If it does blow up will the Fed be able to bail out another Investment Bank? Will CONgress once again roll over? Interesting developments.


[edit on 3-6-2008 by jefwane]

[edit on 3-6-2008 by jefwane]