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Thread: another shoe drops ... true extent of 'toxic' US bank assets ...

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    Default another shoe drops ... true extent of 'toxic' US bank assets ...

    while Treasury Secretary Paulsen is up on Capital Hill this morning attempting to explain his 'change-up' re the $700 billion 'financial industry bailout', Foreign media has actually just disclosed the real reason for the 'change-up' !

    from a 'professional investor's' BBS ...

    (snip)"Nikkei Newswire: U.S. Banks Hold $5-6 Trillion Dollars in Toxic Assets

    Now we know exactly what "facts" changed regarding Paulson's TARP. There is no way the U.S. govt. can buy all of that up..and just imagine how bad the British banks are...I just heard RBS is leveraged over 90 times. "(snip)




    IF this Japanese Financial assessment is in fact true, it implies that ...

    A. US financial institutions STILL have far more toxic financial instruments in the closet than have been officially admitted to date.

    B. the $700 billion dollar US taxpayer funded bailout package amounts to 'pissing in the wind' ... and has / will achieve little more than postponing the inevitable for a few months

    C. with a total all inclusive US Federal Gov't budget of just over $3 trillion dollars, America is simply incapable of bailing anybody out ... unless they attempt to simply print up $5-6 trillion dolllars worth of new money out of nowhere !

    D. as the rest of the world's governments / central banks (some of which actually DO have large amounts of trade surplus money to work with) see that the US situation is hopeless, they are very likely to pull out of 'international' bailout efforts in favor of deploying their resources to help deal with problems in their own countries

    E. a quiet 'run for the exits' in regard to any assets priced in US dollars is likely to have already begun !
    Last edited by Melonie; 11-18-2008 at 09:32 AM.

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    Default Re: another shoe drops ... true extent of 'toxic' US bank assets ...

    and you don't have to take my word for it ...

    (snip)"30 'leading edge' indicators of the coming Great Depression 2

    Every day there is more breaking news, proof Wall Street's greed is already back to "business as usual" and in denial, grabbing more and more from the new "Bailouts-R-Us" bonanza of free taxpayer cash and credits, like two-year-olds in a toy store at Christmas -- anything to boost earnings, profits and stock prices, and keep those bonuses and salaries flowing, anything to blow a new bubble.
    Scan these 30 "leading indicators." Each problem has one or more possible solutions, but lacks unified political support. Time's running out. We're already at the edge. Add up the trillions in debt: Any collective solution will only compound our problems, because the cumulative debt will overwhelm us, make matters worse:

    America's credit rating may soon be downgraded below AAA

    Fed refusal to disclose $2 trillion loans, now the new "shadow banking system"

    Congress has no oversight of $700 billion, and Paulson's Wall Street Trojan Horse

    King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets

    Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses this year

    AIG bails big banks out of $150 billion in credit swaps, protects shareholders before taxpayers

    American Express joins Goldman, Morgan as bank holding firms, looking for Fed money

    Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states

    State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt

    State, municipal, corporate pensions lost hundreds of billions on derivative swaps

    Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up

    Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns

    Fed also plans to provide billions to $3.6 trillion money-market fund industry

    Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars

    Washington manipulating data: War not $600 billion but estimates actually $3 trillion

    Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs

    Commodities down, resource exporters and currencies dropping, triggering a global meltdown

    Big three automakers near bankruptcy; unions, workers, retirees will suffer

    Corporate bond market, both junk and top-rated, slumps more than 25%

    Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall

    Unemployment heading toward 8% plus; more 1930's photos of soup lines

    Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists

    China's sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting even Dubai

    Despite global recession, U.S. trade deficit continues, now at $650 billion

    The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities

    Now 46 million uninsured as medical, drug costs explode

    New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt

    Outgoing leaders handicapping new administration with huge liabilities

    The "antitaxes" message is a new bubble, a new version of the American
    dream offering a free lunch, no sacrifices, exposing us to more false promises

    Will the next meltdown, the third of the 21st Century, trigger a second Great Depression? Or will the 2007-08 crisis simply morph into a painful extension of today's mess to 2011 and beyond, with no new bull market, no economic recovery as our new president hopes?

    Perhaps some of the first 29 problems may be solved separately, but collectively, after building on a failed ideology, they spell disaster. So listen closely to "leading indicator" No. 30:

    At a recent Reuters Global Finance Summit former Goldman Sachs chairman John Whitehead was interviewed. He was also Ronald Reagan's Deputy Secretary of State and a former chairman of the N.Y. Fed. He says America's problems will take years and will burn trillions.

    He sees "nothing but large increases in the deficit ... I think it would be worse than the depression. ... Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds." It'll get worse because "the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government."

    Reuters concludes: "Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes. 'I just want to get people thinking about this, and to realize this is a road to disaster,' said Whitehead. 'I've always been a positive person and optimistic, but I don't see a solution here.'"

    We see the Great Depression 2. Why? Wall Street's self-interested greed. They are their own worst enemy ... and America's too. "(snip)

    from

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    Default Re: another shoe drops ... true extent of 'toxic' US bank assets ...

    Many saw this coming a long time ago. But people were getting rich, so it was ignored.

    The funny thing is that this "depression" is going to hurt the wealthiest people the most; however, the poor and middle class will be okay and probably even better off than ever before!


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    Default Re: another shoe drops ... true extent of 'toxic' US bank assets ...

    oh, are you referring to those wealthiest people who are still getting paid multimillion dollar bonuses (funded by taxpayer bailout money), those wealthiest people who will soon be earning 10% tax free interest from the municipal bonds of desparate state gov'ts, those wealthiest people who are (or already have) moved a large chunk of their US dollar assets offshore ?

    I agree with you that, as long as the US federal gov't and state gov'ts are able to continue to borrow money that 'poor' people will do OK. However, if you seriously think that 'middle class' people are going to escape the effects of massive tax increases and massive price increases, a rude awakening is highly probable !

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