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Global lending thaw may yet return to deep freeze

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posted on Jan, 17 2009 @ 10:25 PM
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Global lending thaw may yet return to deep freeze


www.reuters.com

By John Parry - Analysis

NEW YORK (Reuters) - Hell may yet freeze over again in a second wave of the global credit crisis.

Despite some evidence of a bank lending thaw, some analysts worry that the fragile recovery in credit markets is based almost entirely on gargantuan central bank liquidity programs and government bailouts which have yet to be funded via debt markets.

"The short-term fix has been to throw more money at the problem," said Jes Black, an analyst and fund manager with NetBlack Capital, a New York-based currency fund.

"But we haven't really addressed the fundamental factors that got us here," namely excessive borrowing, Black said.

For now, trillions of dollars of government cash have cranked opened the taps for desperate borrowers of all stripes who spent the final quarter of 2008 parched for credit.
(visit the link for the full news article)




posted on Jan, 17 2009 @ 10:25 PM
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It is ridiculous to think that these bailout will do anything other than hurt the situation. Every time the government steps they make the problem worse. The government CANNOT sustain this, and itself especially not on borrowed money and printed dollars.

How stupid is this? We are doing the very thing that has caused the problem in the first place.

"Sometimes one pays most for the things one gets for nothing."
-Albert Einstein

www.reuters.com
(visit the link for the full news article)

[edit on 17-1-2009 by projectvxn]



posted on Jan, 17 2009 @ 10:33 PM
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I don't think the credit markets will freeze again, they may become a bit tighter before their final push back to normalcy but corporate bond auctions have been picking up and libor has decreased substantially. The issue is how long will it take for banks to start lending to people outside of other banks, the government spending tons of money will be taking a lot of capital from the private market, so the "bailouts" and "stimulus packages" will likely prolong the recession/mild depression. However, again, I doubt the credit markets will see the freeze they have seen last year.



posted on Jan, 17 2009 @ 10:37 PM
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Ok...We don't need more cheap money. Everyone thinks that low interest rates are wonderful But the US government is BROKE. Meaning they are spending more than they are making and they are printing all of it en masse. This is NOT a good thing.

You can't spend like a liberal and put a conservative facade on it and expect things to go well.

Edit to add:

You're seem to be under the impression that employment and inflation are mutually exclusive as well. The givernment is going to spend us into massive inflation, as defaults occur, more and more capital will leave and we won't have all that nifty backing of our debtholders to bolster the dollar.

[edit on 17-1-2009 by projectvxn]



posted on Jan, 17 2009 @ 10:42 PM
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Eventually the interest rates will rise on the 30 year because we will flood the market with debt, until then low interest rates are more of a market force than a federal reserve cause, U.S. bond auctions have been staggeringly good, especially on the long end of the curve, which the Fed doesn't touch...but I agree the U.S. should be cutting it's spending right now, not growing it, and at the very least using the demand for U.S. Treasuries to roll the debt into longer term bonds like the 10 and 30 years so that it's easier to pay off, which should be sooner rather than...never

[edit on 17-1-2009 by yellowcard]



posted on Jan, 17 2009 @ 10:45 PM
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reply to post by yellowcard
 


Here you and I agree. To a point. Bonds are going to collapse due to government defaults. Hell they're even trading backwards in some cases. That's just theft outright.



posted on Jan, 17 2009 @ 10:49 PM
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Originally posted by projectvxn
reply to post by yellowcard
 


Here you and I agree. To a point. Bonds are going to collapse due to government defaults. Hell they're even trading backwards in some cases. That's just theft outright.


The U.S. debt rollover has turned into a ponzi scheme of sorts, if you think about it, using new investors in the debt to pay off the old...pathetic. People are up in arms that Maddoff is running free, but they don't realize that the biggest ponzi scheme in history is by the U.S. government.



posted on Jan, 17 2009 @ 10:54 PM
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I remember a long time ago in this boards that I keep arguing with the supporters of free trade and the believers on our sound economy at the time that I keep telling them that a nation can not survive on spending alone without producing.

I would never even thought that I would be living to this day now the present time and to see what our economy has become due to the same thing I use to said, spending and borrowing will never make a nation rich.



posted on Jan, 17 2009 @ 11:01 PM
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The bond market is going to collapse sending interest rates to the moon. We are in a serious bond bubble and I give it less than a year for the bust. This "quantative easing" cannot go on forever and the countries like China and Japan are not going to fund our big government spending forever. When the interest rates skyrocket you will see credit go into a deep freeze. The government can try to manipulate the market all they want but the free market will win in the end. Ask the Soviets what happens when you try to control economies.....



posted on Jan, 17 2009 @ 11:03 PM
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Originally posted by yellowcard


The U.S. debt rollover has turned into a ponzi scheme of sorts, if you think about it, using new investors in the debt to pay off the old...pathetic. People are up in arms that Maddoff is running free, but they don't realize that the biggest ponzi scheme in history is by the U.S. government.


Oh man you are so right on this. Our government runs one big ponzi scheme. Madoff is the perfect diversion to keep the sheeple asleep to the real scheme that is going on right now. These crooks in Washington are good at what they do what can I say.



posted on Jan, 17 2009 @ 11:08 PM
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Hi, mybigunit, yes China, Japan and UK will think two times when the proposed stimulus from Obama comes to the table to be financed by our oversea lenders.

But didn't you know that our government has been working behind close doors with the treasury Department to start getting money from the Arabs.

It seems that something has been offered in return to the rich oil nations so they can be lure to buy Americas debt.

Interesting developments.



posted on Jan, 17 2009 @ 11:11 PM
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Originally posted by marg6043
Hi, mybigunit, yes China, Japan and UK will think two times when the proposed stimulus from Obama comes to the table to be financed by our oversea lenders.

But didn't you know that our government has been working behind close doors with the treasury Department to start getting money from the Arabs.

It seems that something has been offered in return to the rich oil nations so they can be lure to buy Americas debt.

Interesting developments.


The arabs are losing money left right and center. Reuters came out with a story today about Kuwait losing $2.5 trillion dollars. Also with oil revenues tanking this idea the arabs are going to fund us is laughable at best. They to will be back to riding camels here soon.



posted on Jan, 17 2009 @ 11:15 PM
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No if they can get a chunk of America to the point that they could influence politics and policies in the US.

That is something that worth more than oil, gold and gems to them right now.



posted on Jan, 17 2009 @ 11:23 PM
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Originally posted by marg6043
No if they can get a chunk of America to the point that they could influence politics and policies in the US.

That is something that worth more than oil, gold and gems to them right now.


Right but what Im saying is soon they wont have the money to buy up America like they have been. They have alot of their wealth tied up in oil and in America and both are in the crapper right now. China may even have to be a net seller of dollars to start funding their local stimulus packages. If that happens watch out....



posted on Jan, 17 2009 @ 11:27 PM
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reply to post by mybigunit
 


Then if that happens it means that the global markets will keep draining America.

Is a big amount of TARP money that is not been accounted for and I have not doubt that is in the hands of our oversea investors, but whom we may never find out.




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