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And now a bank run

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posted on Jul, 9 2008 @ 05:05 PM
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reply to post by ALightinDarkness
 


Actually in the 1920's leading up to the day before the stock market crash and subsequent bank runs, the powers that be did in fact calm the public with "everything fine.. seriously.. what could possibly go wrong?"


I think, some "doom and gloomers" are professional, semi professional players in the financial world.. most know what they are talking about. As I said before, we see the same numbers and come to different conclusions.. I do not put my faith in ANY government structure to ensure... anything quite honestly. Let alone the economy.

Of course you have the people who don't know what they are talking about, and yes, even those who openly wish for a collapse to happen..

I think I am fairly certain you are intelligent enough to know the difference..


Fact of the matter is, there are a very large population of citizens with 100k+ in accounts .. through CD's and so forth .. unsuspecting people.. in my office I heard regular stories of people who talked to farmers and factory line workers with well over 200k accumulated in accounts just sitting there..

ANY bank collapse, of a major institution anyways, is cause for SERIOUS concern .. I have not gotten over the Fire Sale of Bear Sterns lol .. no doubt they have plans in the works for Indymac .. and several other major institutions threatened by the current crisis .. which it is a crisis ..

The Fed no doubt may be readying to give the financials a couple billion more to speculate in the energy markets..


mybigunit:

The FDIC was never intended to "insure" the economy.. it was designed to pacify the people into thinking they are safe..

It is also designed for small localized banks, who only have regional influence.. smaller credit unions for instance..

Bigger banks with tens of billions in holdings... the FDIC can handle one, but more then that? .. I would hazard a guess that if we saw two or more major banks collapse .. assuming it survived the first major bank .. the FDIC would go belly up, and a true economic collapse would occur..

Of course, they can always flood the market with cash .. yes your numerical number in dollars is saved .. but the economy collapses anyways and we end up needing a wheel barrel full of Dollars to buy a loaf of bread..


LID:

Indymac would be entirely secured by the FDIC however, Indymac is also primarily a loaning institution .. imagine Bank of America going under or Fannie Mae, Chase .. these institutions are feeling the most pressure from the current crisis and not even the FDIC would save it..

Not that it matters .. a major bank failure would incite a massive run on the banks .. not to mention the economic fallout ..

FiatLux:

Interesting .. you believe in the concept of "fiat money" .. Assuming you know the Latin behind your own screen name, Fiat money is quite literally "value by decree" .. sponsored by a person or entity that can enforce the value by any means necessary.

Gold is a Fiat currency because to use Gold or Silver as a standard there needs to be a Governing Mandate, or Fiat, to administer the value of the metals..

In other words, it works the exact same way as Gold ..

You have 1 dollar and you buy a pound of rice to eat .. the rice seller takes your dollar because he paid 50 cents for the pound which he paid to the grower who paid 10 cents for the seeds. Because the seeds where bought in dollars, the grower sells in dollars to buy more seed, the buyer then sells in dollars because he gets his produce that way, via dollars, and the buyer getting that pound of rice uses dollars because it's the only way he can eat. Everyone thus takes dollars..

So does the dollar have value? Absolutely. Just a government mandate? Doesn't matter.. it's still accepted and thus has a perceived value. The value of one dollar then decreases or increases depending on the readily available supplies of dollars.

Take the same scenario .. and take out all the words "dollars" with "ounce of gold"

Same thing.

Gold inflates, deflates and crashes just like any other currency .. in fact, the Great Depression, which is essentially a title, it was a Depression, was not the first in American history..

Dollars by issue of a Fiat is not the problem in this society .. it is instead Credit which is the problem in this society..

It has only the value based on whether you can pay it back. If you can't, it's no longer worth anything ...

Insert banking crisis.

And yes, the Great Depression was not caused by Dollars by Fiat but rather over extended Credit, in which the Government then tried to tie off and limit, resulting in massive buying power reductions and consequently a collapse of the economy ...

Which is why the Fed sacrificed the Dollar to inflation, because to restrict Credit entirely would have created a Great Depression.


Isn't economics fun?




posted on Jul, 9 2008 @ 06:19 PM
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Well, here you go folks. This is the beginning of the NWO with just ONE world bank. Everyone will withdraw from their banks. Closing them down, until there is only ONE left. Hope you like the ride...



posted on Jul, 9 2008 @ 06:24 PM
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Assuming I know my own screen name, and I believe in the concept of fiat money? Two things your not to well versed on I see. The first thing is my screen name. If you look beside it, you will see what it means(Let there be light).The second thing, fiat money, would you please quote me where I said I believe in it?



posted on Jul, 9 2008 @ 06:25 PM
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Hey guys....there seems to be a few on this board that know a bit about the FDIC. Take their comments and advice for what its worth. I personally did 9 years in banking and did not know EVERYTHING about FDIC. Matter of fact most of the bankers in general dont know everything about FDIC either.

Here is info directly from the FDIC website. I will break down some links that will give you a better idea of what this enitity is all about.

Who is the FDIC?
www.fdic.gov...

Videos on Deposit Insurance Coverage (26 minutes)
www.fdic.gov...
The 100,000 number is not the only majic number. It depends on what type of accounts an individual has.

FDIC home page
www.fdic.gov...

Reform of Deposit Insurance
www.fdic.gov...

Hope this helps



posted on Jul, 9 2008 @ 08:29 PM
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reply to post by FiatLux
 


Fiat Lux ...

Let there be light?

Actually a direct translation would be "There will be Light" ...


Fiat is a command, it is an explicit demand that something be done.. Fiat Lux is a demand or a decree that there WILL be light ..

And you believe the currency of the US to be a "Fiat" currency ..

Which it is. Because all forms of money are in fact Fiat.




posted on Jul, 9 2008 @ 09:00 PM
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Well, if that`s the case about the money, i guess we all believe that way then, even you. As far as my name, I just put the normal trandlation beside it, so, translate it in any way you want, it still shines.

[edit on 9-7-2008 by FiatLux]



posted on Jul, 9 2008 @ 09:21 PM
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I actually came across something today scarier than a bank run. At 2:50pm today Jim Cramer while live on CNBC said that Fannie Mae and Freddie Mac are insolvent. (I'm aware of Cramer's many critics and wouldn't have brought him up but see link later in post). Then later this evening I came across this.


The Bush administration has had discussions about contingency plans in the event that giant government-backed mortgage-lenders Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) falter, the Wall Street Journal reported on Wednesday.


That would be worse than if all the banks on the soon-to-be-dead list folded the same day. I'm hearing rumors that one of the two is owed more money by mortgage insurers than they have in regulatory capital. Wanna know how bad a govt. bailout of these two would be? Possibly in the TRILLIONS all bore by the taxpayer.



posted on Jul, 9 2008 @ 09:24 PM
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reply to post by jefwane
 


Yeah I heard they wanted to nationalize the two. Which means we take on all the debt and we will have to print more money and low and behold oil $200 Gold $1500.00

Get ready we have another big shoe to drop.



posted on Jul, 9 2008 @ 09:35 PM
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reply to post by mybigunit
 


Yeah and interest rates well north of 10% when the Treasury has to raise money in the bond market.

There was some comic relief today by way of a press conference by BankofAmerica's CEO. First he said the dividend was safe and they didn't need to raise money, don't know where I've heard that before. Second, during a Q&A after that this poor lady who had some type of ID theft issue was able to get in and harass the CEO about it live on national tv.



posted on Jul, 9 2008 @ 09:38 PM
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reply to post by jefwane
 


I didnt hear about the lady. I just heard that the CEO said that this will "FEEL" bad for another year. Dude this IS bad. I cant believe some of these morons. Im still holding out hope though. In another 3 to 6 months Im putting money to use in financials. Im really waiting for the next shoe to drop and then Im in. I figure a good 5 year investment.

Im thinking Citi because that is a bank the government will NEVER let fail. All the cheap borrowed money they are sitting on when they decide to let it loose I can see them at $100 in 5 to 8 years.



posted on Jul, 9 2008 @ 09:49 PM
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i actually left National City bank where ive had my tiny amount of $$$ last week and moved to a different bank that was doing way way better during this crisis

National City's stock is a disaster , once i saw their stock charts i knew to get the hell out asap

of course i only have 100 $ left now, but that 100 $ is my dinner for the next few weeks...

sigh...if only i had a good 10,million $ , id go invest with you in Citibank

seriously man id be there with you buying it up by the boatload



posted on Jul, 9 2008 @ 09:53 PM
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Not me, I'm not playing anything long financials except to hedge short positions. I heard the phrase "generational buy" come out of one of the shysters on CNBC when C was around $20 pps. If you stuck a gun to my head and said buy one financial it would either be JPM because they are the FED, or USB because of their relatively conservative business practices. I do believe that financials will return to their more historical performance after this crisis is over. They'll be relatively stable and be a safe place to park money for a reasonable return but not "sexy" like they have been. If you do decide to go for one of these guys, I'd wait till there is a better picture of what the new regulatory environment is gonna look like.

For anyone who hasn't been following this mess, when a financial CEO, CFO, or COO gets on TV and says "we don't need to raise capital" that means they'll be raising it within a couple of weeks if not days.



posted on Jul, 9 2008 @ 09:59 PM
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Originally posted by Rockpuck
Actually in the 1920's leading up to the day before the stock market crash and subsequent bank runs, the powers that be did in fact calm the public with "everything fine.. seriously.. what could possibly go wrong?"


This is great! That means we truly have nothing to worry about. Since today, we have nothing but utter doom, gloom, and economic apocalypse predictions from the media (which is being parroted by ATS). Thanks for reassuring me.

Of course the fact is that since the Depression numerous fail safes, like the FDIC, have been implemented. But really, lets just ignore those - they couldn't possibly do anything because we are certainly headed for utter doom and...oops, sorry, was watching CNN while I was typing that.


Originally posted by Rockpuck
I think, some "doom and gloomers" are professional, semi professional players in the financial world.. most know what they are talking about. As I said before, we see the same numbers and come to different conclusions.. I do not put my faith in ANY government structure to ensure... anything quite honestly. Let alone the economy.


Oh really? Funny, because all of the professional players in the financial world I know of are absolutely loving this. Watching the blinded sheep run for the exits is an excellent profit opportunity. In fact, I do know one person who tried to play up "THE END IS NIGH" in order to encourage the sheep to run for the hills - when they run, he profits. I have no doubt there are quite a few people in the markets trying to instill panic in order to make a buck off of it. And since its doom and gloom, ATS buys it wholesale.

I have no faith in the government either. But I do have faith in the markets, which are efficient if irrational at some times. What we are seeing now is the market correcting for the irrationality of the housing boom. Its not a sign of the end. In fact, after EVERY bubble correction, we go through this same process of the market correcting, and the same people predicting the economic apocalypse is just around the corner.


Originally posted by Rockpuck
Fact of the matter is, there are a very large population of citizens with 100k+ in accounts .. through CD's and so forth .. unsuspecting people.. in my office I heard regular stories of people who talked to farmers and factory line workers with well over 200k accumulated in accounts just sitting there..


A fool and his money are soon parted. Anyone not intelligent enough to research where they place their money will lose it. I have no sympathy. It takes years to earn money, and 1 hour to research what the FDIC and its limits are, and maybe a few days to figure out where to put your money in the markets to diversify it.


Originally posted by Rockpuck
ANY bank collapse, of a major institution anyways, is cause for SERIOUS concern .. I have not gotten over the Fire Sale of Bear Sterns lol .. no doubt they have plans in the works for Indymac .. and several other major institutions threatened by the current crisis .. which it is a crisis ..


Not really, as long as you knew not to put your money into it. Anyone sitting in more than 100k of cash assets is really going to be parted from their money very quickly, regardless of any collapse.



Originally posted by Rockpuck
The FDIC was never intended to "insure" the economy.. it was designed to pacify the people into thinking they are safe..


It seems to be doing a poor job, given the running around in circles hysteria I'm seeing. Also this is a straw man and not what I said, the FDIC is there to insure cash assets. Which you should not have more than 100k of to begin with.


Originally posted by Rockpuck
Indymac would be entirely secured by the FDIC however, Indymac is also primarily a loaning institution .. imagine Bank of America going under or Fannie Mae, Chase .. these institutions are feeling the most pressure from the current crisis and not even the FDIC would save it..


This is why Indymac's potential failure isn't even a issue. The loans would get resold, the little cash assets they had would be reimbursed. None of the other big banks are in danger except in the hopes and dreams of doom and gloomers and some analysts who want to make a quick buck off them. If they were, the FDIC would immediately get a cash infusion.


Originally posted by Rockpuck
Not that it matters .. a major bank failure would incite a massive run on the banks .. not to mention the economic fallout ..


What? Netbank? Savings and Loans? They collapsed, no hysterical crises ensued. I do not doubt it could happen, but only because the average American consumer is fairly stupid. Not because there is any reason for the hysteria.

I realize everyone on ATS likes to lynch those who don't buy into the hysteria. I apologize. I realize so many are hoping and praying for some sort of apocalypse. I hate to be the bearer of bad news, but this isn't it.



posted on Jul, 9 2008 @ 10:26 PM
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reply to post by jefwane
 


Im looking at Citi because they have been around since 1812. Our government will not let them fail plain and simple as that. Dont worry Im not going in yet like I said there will be another shoe to fall...a nice market tumble right back to dow 9k or so and then Im in and I wont even blink and Im going balls to the wall.

There will be another shoe to drop though that is what I am waiting for. if it happens tomorrow then Im in on Friday but not until the the crap hits the fan.



posted on Jul, 9 2008 @ 10:26 PM
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reply to post by muzzleflash
 


Muzzle that is one I've got on my potential failure list. Along with First Fed Financial, Bank United (BKUNA), and downey financial (DSL). I'm very worried about WaMu and if there is a large bank ready to really bring out TSHTF moment that's it.

To respond to lightinthe darkness, you may be right and I have faith that markets will work things out. They might have already done so had it not been for several interventions ober the past 14 months. I don't have faith in regulators (where the hell were they when this crap was going on), central banks (they will save themselves, their bankster buddies, and markets in that order), or government (bailouts and backstops only delay and intensify the eventual pain). Much like earlier this week everyone knows that almost all indicators are showing an oversold condition and a bounce is likely, but something is wrong right now. There is very little fear or capitulation and until I see either I'm of the opinion that there is still room for a downward move.

I also tend to disagree with the buy and hold crowd. If someone bought the QQQQ (etf that tracks nasdaq) or the SPY (etf that tracks S&P 500) in 2000 how would they be doing today, eight years later?



posted on Jul, 9 2008 @ 10:47 PM
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reply to post by jefwane
 


No you dont hold via a time frame you set a target price which mine would be citi $80 or so

No Im like you I dont buy and hold for 40 years it makes no sense.



posted on Jul, 9 2008 @ 11:54 PM
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reply to post by ALightinDarkness
 




This is great! That means we truly have nothing to worry about. Since today, we have nothing but utter doom, gloom, and economic apocalypse predictions from the media (which is being parroted by ATS). Thanks for reassuring me.


Usually no matter how bad the markets are, the TV tells people to buy .. that is, it aims at average joe to go throw their savings into the stocks to "get that last big deal" .. If you mean commenting on the straggled financial market.. dear God Brother, I certainly hope they would air at least a LITTLE bit of information on it..



like the FDIC


The FDIC is not and was never intended to be a "fail safe" it was designed for small regional banks .. It could not insure 100k+ accounts with some form of assets in them ..

Not to mention major nation wide banks go bankrupt anyways, average joe loosing a few grand is the least of anyones worries..

I don't think you understand the severity of the situation, and I really don't think you know enough about past and present economic situations to come in and accuse everyone else here of misleading people with "doom and gloom"...

Had I told you in October while the DOW stood at 14,400 that by July it would be nearing 10,999 .. you would have accused me of "doom and glooming" ..





Oh really? Funny, because all of the professional players in the financial world I know of are absolutely loving this.


I would question ... who you know. There will always be someone profiting .. but from the power players I know .. and I know a few CEO's and men who's assets range past 500 million --- half my family being among those ..

I can say that "uncertainty" is the only word THEY live by .. Markets do not re-create themselves, they develop on their own .. so in any given economic situation it is an entirely new atmosphere with infinite possibilities..

And if you think when the stocks drop it is "people running for the hills" .. if you have an investment account and have the tools to watch open trading .. you will notice that between open and close (working hours) the average "sell" and "buy" position is in the tens of millions of dollars PER sale..

It's Fund managers that are shaky .. which yes, anyone in the market would worry about that.



But I do have faith in the markets


Where the ends justify the means..



A fool and his money are soon parted. Anyone not intelligent enough to research where they place their money will lose it.


Hmm.. ok .. I suppose everyone who makes a living is expected to be brilliant in all areas of economics.. while in my job I had sometimes wished that where so, then again, I wouldn't have had a job eh?



Not really, as long as you knew not to put your money into it. Anyone sitting in more than 100k of cash assets is really going to be parted from their money very quickly, regardless of any collapse.


Your experience in dealing with individuals and their life assets is....... ?



the FDIC is there to insure cash assets. Which you should not have more than 100k of to begin with.


Not everyone is "risk tolerant" .. if you worked with people and money you would know that you are not legally allowed to sell any financial product involving risk without first finding out the risk tolerance level of your client. Once found out, you risk lawsuits and worse to "motivate" people into buying any form of risky asset ..

Many, many people use CD's and Annuity products to hold money in, which in the vast majority of cases the FDIC would never be able to insure.. because they often range well past 100K

Even myself, I have more in cash assets then I am sure you would deem intelligent. luckily for me though, I am my own adviser and I happened to save my self a lot of money. Any time I buy a stock, I record the date and time and price on my computer.. even if I don't buy it.. this way I can keep a log of purchases, sales and prospected purchases and sales to find where my greatest weaknesses lie. So I can think "man if only I had been in the market then" .. go back find when I would have purchased, if I would have sold, if I did sell or practiced some form of option ..

In most cases my judgments have been sound.



The loans would get resold


...right...

So you have 10billion in defunct loans.. you go bankrupt .. insurers go bankrupt trying to deal with the problem (hence Fannie Mae and Fannie Mac) so there is a fire sale (insert Bear Sterns) and another bank accumulates the problems .. (insert Bank of America) .. but the loans are still defunct and trouble some, potentially loosing value and dropping revenue and thus hurting stocks.. so your shares fall. What to do? (Insert Fed Handouts) so you take the money and you speculate in the energy markets (because everyone needs to drive) and you can offset the loss of value on your books via bad loans with black numbers coming from the corporations investment portfolios (insert high gas prices) ..

Most economist if ask and answered true fully would call this an "indirect tax"..



They collapsed, no hysterical crises ensued.


Because when they collapsed they fell through idiotic leadership .. they where isolated problems, like a tumor they where cut away to keep the body sound..

However, if the problem is a virus and there is no cure, bank failures are like organs of the body collapsing one by one.. the Financial institutions in America are the blood of this country.. with out a Credit service there is NO American economy.. we CANNOT survive without Debts.. and the only way to solve the problem, is restrict DEBT ...

Which is EXACTLY how the Great Depression started..

Eire indeed.



posted on Jul, 10 2008 @ 01:48 AM
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Originally posted by Rockpuck
Usually no matter how bad the markets are, the TV tells people to buy .. that is, it aims at average joe to go throw their savings into the stocks to "get that last big deal" .. If you mean commenting on the straggled financial market.. dear God Brother, I certainly hope they would air at least a LITTLE bit of information on it..


You and I must live on difference planets. Every time I watch any form of mass media - TV, radio, or read a newspaper, I see utter and complete economic apocalypse being predicted with glee. You can almost see the anchors foaming at the mouth they are so excited about it. The AP regularly prints out stories where, if they can't find any doom and gloom, they'll go out and interview people until they find a sob story. CNN talks about how the American empire is over. The New York Times daily laments that the economic end is nigh and of course its all Bush's fault.

About the only time I see anyone acting positive in the media is your occasional Cramer statement about bottoms being a good time to buy. He happens to be right, but hes drowned out by the utter doom and gloom painted by the media.

As you said that the media was painting a rosy picture before the Depression, this gives me great faith that indeed the economic end is not nigh. Because the media surely isn't doing that now. For every positive economic story you find - if you can find one - I can find 10 negative ones.


Originally posted by Rockpuck
The FDIC is not and was never intended to be a "fail safe" it was designed for small regional banks .. It could not insure 100k+ accounts with some form of assets in them ..

Not to mention major nation wide banks go bankrupt anyways, average joe loosing a few grand is the least of anyones worries..


That was the purpose of the FDIC, to insure in the event of a run on the banks that it would be a fail safe to insure cash depositors. Its value, in the event of a true catastrophe, is unknown as we have yet had need to test it. I have no doubt that in the event of The End Of The World As We Know It which so many on ATS are praying for that it would be pointless, but its intentions remain.


Originally posted by Rockpuck
I don't think you understand the severity of the situation, and I really don't think you know enough about past and present economic situations to come in and accuse everyone else here of misleading people with "doom and gloom"...


Every few years we go through this, the end is predicted, things go back to normal, and we repeat. Any student of economic history would see how often this happens. Not to mention that, since I am pondering doing a dissertation on the interactions between government and the economy during recessions, I certainly would have done no research on this and would have no idea what I'm talking about.


Originally posted by Rockpuck
Had I told you in October while the DOW stood at 14,400 that by July it would be nearing 10,999 .. you would have accused me of "doom and glooming" ..


Had you said this in October, I would have stated you were probably off a little bit. The markets need to go down a bit more to correct for the irrationality of the housing bubble. However, market timing is for fools and fools and their money are soon parted. About the only safe prediction any sane investor makes on the market is it will either go down, or up.


Originally posted by Rockpuck
I would question ... who you know. There will always be someone profiting .. but from the power players I know .. and I know a few CEO's and men who's assets range past 500 million --- half my family being among those ..


Investment bankers, a former hedge fund manager, financial analysts, a statistician with a PhD who programs mathematical models for a major investment bank, etc. Surely they are all clueless and should read up more on ATS. There is not enough doom and gloom in their life!


Originally posted by Rockpuck
And if you think when the stocks drop it is "people running for the hills" ..


And that is why you should not presume to know what I am thinking. I never said this. Running for the hills would be the sheeple who are changing their portfolio from diversified to being over invested in the commodity bubble and other economic doom safe havens. Or the really dumb ones who get out all together, selling low and buying high.


Originally posted by Rockpuck
Hmm.. ok .. I suppose everyone who makes a living is expected to be brilliant in all areas of economics.. while in my job I had sometimes wished that where so, then again, I wouldn't have had a job eh?


It does not take a rocket scientist to figure out how to safely invest your money and be hedged against most risk (can never hedge against all, as you know). This takes anywhere from hours to days, depending on the money were talking about. Unfortunately, quite a few people have made a fortune out of convincing people they are too stupid to figure out how to diversify their own investments. Ameriprise financial advisers and similar commission outfits have made a killing off this. The only time anyone needs professional help is when we get into the millions of dollars.


Originally posted by Rockpuck
Many, many people use CD's and Annuity products to hold money in, which in the vast majority of cases the FDIC would never be able to insure.. because they often range well past 100K


As annuities are generally only good deals for the commission based financial adviser, I'm not sure why I should care. As for CDs - People who want no risk with their money and are not intelligent enough to spread it out over 100k increments among many banks truly aren't interested in 0 risk.

You cannot whine about people taking the risk of putting more than FDIC insured amounts as somehow being the fault of government. I am not going to be concerned because someone who is too risk intolerant to make more than inflation is not risk intolerant enough to spread out any cash they are sitting in.


Originally posted by Rockpuck
So you have 10billion in defunct loans.. you go bankrupt .. insurers go bankrupt trying to deal with the problem (hence Fannie Mae and Fannie Mac) so there is a fire sale (insert Bear Sterns) and another bank accumulates the problems .. (insert Bank of America) .. but the loans are still defunct and trouble some, potentially loosing value and dropping revenue and thus hurting stocks.. so your shares fall. What to do? (Insert Fed Handouts) so you take the money and you speculate in the energy markets (because everyone needs to drive) and you can offset the loss of value on your books via bad loans with black numbers coming from the corporations investment portfolios (insert high gas prices) ..


This is doom and gloom fantasy. Loans get resold all the time, even when banks don't collapse. I even had to sit through a research paper the other day about it, as regulators are considering trying to change the way mortgage loans get easily passed around so many lenders.


Originally posted by Rockpuck
Because when they collapsed they fell through idiotic leadership


I would classify going crazy with high risk sub-prime loans as idiotic leadership. I see no difference.


Originally posted by Rockpuck
Which is EXACTLY how the Great Depression started..


Nope. The great depression started because capital was not available to businesses, not consumers. The people of the era had never heard of credit cards or 30 year mortgages (forget sub-prime mortgages). Its just basic history, and while so many are hoping for a depression this isn't going to be it.

Next round of lynching for the guy who goes against the doom and gloom in 3..2..1:



posted on Jul, 10 2008 @ 02:32 AM
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Originally posted by Rockpuck
reply to post by ALightinDarkness
 






So you have 10billion in defunct loans.. you go bankrupt .. insurers go bankrupt trying to deal with the problem (hence Fannie Mae and Fannie Mac) so there is a fire sale (insert Bear Sterns) and another bank accumulates the problems .. (insert Bank of America) .. but the loans are still defunct and trouble some, potentially loosing value and dropping revenue and thus hurting stocks.. so your shares fall. What to do? (Insert Fed Handouts) so you take the money and you speculate in the energy markets (because everyone needs to drive) and you can offset the loss of value on your books via bad loans with black numbers coming from the corporations investment portfolios (insert high gas prices) ..

Most economist if ask and answered true fully would call this an "indirect tax"..



So are you saying that because of all the money lost in subprime mortgage scams banks are propping up gas prices by investing heavily in energy which is, for all intents and purposes, guaranteed through necessity? Banks who took a hit are the "evil" speculators we've heard so much about?

I definitely agree with your earlier point that if the Fed ran out of cash they wouldn't hesitate to just print more.



posted on Jul, 10 2008 @ 09:30 AM
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I am so utterly deficient in the area of this topic that I find it amusing, and even amazing, that banks and markets don't collapse all the time.

For some, every whimsical comment by any particular 'economic' talking head can send the market into an outrageous fluxing. People risk and gamble on money for money's sake and the profit derived from money simply changing hands is chased after like a wet dream.

The concept of debt as the national 'force' of market value is astounding to me. It seems weird that 'lack of wealth' or 'indebtedness' have market value - that reflects the contradiction in my - obviously ignorant - mind.

So companies who's primary goal in life is to secure as much 'promisory wealth' as possible are valuable? Even though it is based on indebtedness centering around fractionally supported wealth?

I simply can't understand WHERE IS THE WEALTH? Where is the actual WEALTH? Does it exist or is this simply an exercise in middleman profiteering, and the best bet is to go with the middleman who can 'go between' the largest holders of 'debt'?

A lot has been said about it, and I see that people are definitely on the same page - although interpreting it differently. At the end of the analysis, Who has the money - in reality, not debt. Where is the wealth, the 'value' behind the debt that is forthcoming I suppose - but never materializes behind the bankers spreadsheet?

What is the 'source' of the wealth? It obviously flows in the 'market' like churning water in a washing machine, so there's no hope of following it without a degree in economics, tools, and a position from which to follow it. And ultimately, where is the wealth ending up?

I keep getting the feeling that this exchange is almost 'religious' in nature, requiring some level of axiomatic acceptance that wealth and debt, and reserve notes, have a certain relationship that transcends the mundane.

Oh well, enough showing off my ignorance of the subject. I really wish I could understand these things, but I suppose I must count myself among those you refer to as sheeple in the matter. Please don't insult me by telling me how easy this all is, and that 'a few hours of research' would edify me appropriately, the fact that this conversation has taken the form it has is clear proof that it is not as 'cut and dry' as that.

[edit on 10-7-2008 by Maxmars]

[edit on 10-7-2008 by Maxmars]



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