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I understand they now hold about $82 Billion in 2nd mortgages which are now essentially unsecured due to declining real estate values. A 1st mortgagee at least can recoup some portion of a bad loan. If there's nothing left for the 2nd mortgagee, well, W-F may be in some significant pain.
I think this 2nd mortgage issue is a huge part of the overall problem. The media is so focused on the ARM and homeowenership they have failed to mention other "debts" like 2nds.
Me thinks that people have WAY too much trust in the government to "prevent" a bank failure. This might be true if there was a surplus in the budget, but under a massive trade deficit and insurmountable debt, the government is powerless to prevent a bank failure.
Me thinks that people have WAY too much trust in the government to "prevent" a bank failure. This might be true if there was a surplus in the budget, but under a massive trade deficit and insurmountable debt, the government is powerless to prevent a bank failure.
I respectfully disagree, the government can always print more money.
The problem, in real economy terms, is that as a result of our suicidal monetary and credit policies, there is massive misallocation of resources in the US, also reflected in the mismatch between production and consumption (and also the trade deficit and household and government debt).
If this continues, the government would be powerless to stop a serious disconnect between production and consumption, reflected in massive inflation.
Well, unless of course it tries to amass the bulk of its resources in the military and attempts to seize the assets of a country where there is a better match between consumption and production.
Hey, didn't the US attempt that with Iraq vis-a-vis the country's oil production/consumption mix? How did that work out?
In any case, the FDIC list provided above by a generous poster shows that there may be a significant difference between relatively small, regional banks and large banks with significant market share. I believe that Moody's runs analyses on this very issue, and the conclusions are that, while indeed no bank is immune from the possibility of bankruptcy, in the case of a country's biggest banks, government intervention is a virtual certainty. At that point, the country's sovereign rating comes into play.
In the aftermath of the S&L debacle in the US in the late 1980s/early 1990s, many relatively small banks failed. Where there any major banks that failed?
FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." The division now has 223 employees, mostly based in Dallas.
I respectfully disagree, the government can always print more money.
The problem, in real economy terms, is that as a result of our suicidal monetary and credit policies, there is massive misallocation of resources in the US, also reflected in the mismatch between production and consumption (and also the trade deficit and household and government debt).
If this continues, the government would be powerless to stop a serious disconnect between production and consumption, reflected in massive inflation.
Well, unless of course it tries to amass the bulk of its resources in the military and attempts to seize the assets of a country where there is a better match between consumption and production.
Hey, didn't the US attempt that with Iraq vis-a-vis the country's oil production/consumption mix? How did that work out?
In any case, the FDIC list provided above by a generous poster shows that there may be a significant difference between relatively small, regional banks and large banks with significant market share. I believe that Moody's runs analyses on this very issue, and the conclusions are that, while indeed no bank is immune from the possibility of bankruptcy, in the case of a country's biggest banks, government intervention is a virtual certainty. At that point, the country's sovereign rating comes into play.
In the aftermath of the S&L debacle in the US in the late 1980s/early 1990s, many relatively small banks failed. Where there any major banks that failed?
I so wish we'd stop doing this. And I also wish this gov't would pull out of the financial sh*t hole it's been in for decades. And I also wish they'd get enough money to buy back most of the worlds gold.
I see what you guys are saying with "to big to fail" government wont let it happen,but this time it might be different,what happens if not one bank but a couple HUGE banks (wamu,citi,b.oa.)all start going under at the same time??can they be bailed out simultaneously??
The Fed said that he would not be surprised if a couple banks fail.....I love how America say capitalism works but every few years these great capitalist companies need big bail outs.
Doral Financial stock ticker DRL has done a reverse split several months back,based in Puerto Rico (a US commonwealth),lotta legal and financial woes,probably on the way out.
I think we all wish Wamu would fall because they are soo horrible
I know I wish they would for that very reason. I was a customer of theirs for over 20 years until late last year.
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