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There are a lot of banks including big banks that have a lot of loans in the energy market. The Fed has quietly told banks not to 'mark to market' their exposure to bad loans in the energy market.
There are a lot of banks including big banks that have a lot of loans in the energy market. The Fed has quietly told banks not to 'mark to market' their exposure to bad loans in the energy market.
While there were some reports in the financial news about impaired energy loans held by banks, this is the first article I've seen that directly implicates the Federal Reserve in covering up the extent of the damage. No surprise.
Interestingly there are reports now of all kinds of loan problems in Italy and Portugal where the ECB forced Banks to take on loans with bad credit. What a mess. What to do with these Central Bankers?
While there were some reports in the financial news about impaired energy loans held by banks, this is the first article I've seen that directly implicates the Federal Reserve in covering up the extent of the damage. No surprise.
Interestingly there are reports now of all kinds of loan problems in Italy and Portugal where the ECB forced Banks to take on loans with bad credit. What a mess. What to do with these Central Bankers?
Do we really need all these banks to implode if oil goes up even to $50 because of a temporary dip?
Do we really need all these banks to implode if oil goes up even to $50 because of a temporary dip?
I expect that the banks finally fold, equity holders take all of the losses, and insured accounts transferred to well run Banks with prudent lending policies. The Casino Banks should have been put out of business after the last Bubble and all of the giddy speculators who invested in these Banks should have lost all of their money.
That is how you create a stable economy. Prudent lending. Prudent borrowing. And finally put an end to speculation with taxpayer insured money. Bring back Glass-Stregall and end this nonsense with Bubbles upon Bubbles upon Bubbles.
I expect that the banks finally fold, equity holders take all of the losses, and insured accounts transferred to well run Banks with prudent lending policies. The Casino Banks should have been put out of business after the last Bubble and all of the giddy speculators who invested in these Banks should have lost all of their money.
That is how you create a stable economy. Prudent lending. Prudent borrowing. And finally put an end to speculation with taxpayer insured money. Bring back Glass-Stregall and end this nonsense with Bubbles upon Bubbles upon Bubbles.
I would call lending based on $146 oil back in 2008 "casino banking." I would not call loans based on $80 oil in the years in between then and now unduly risky since the price generally averaged between $90 and $100.
I would call lending based on $146 oil back in 2008 "casino banking." I would not call loans based on $80 oil in the years in between then and now unduly risky since the price generally averaged between $90 and $100.
Of course it was. Even amateur economists knew that all of the oil demand was coming from China and its debt binge which was bound to end badly and prudent lending would account for the eventual death of debt binging and worse case scenarios.
I wonder if there is such thing as a banker who understands prudent lending analysis anymore. Apparently they use best case scenarios and double it, the characteristics of a bad gambler.
In any case, the first of the article is that it suggests a rather incestuous relationship between the Bankers in the Fed and the Bankers that they are suppose to be regulating. The Revolving Door between the Government and the Banks. Very cozy indeed and bound to make certain fellas tons of money. I suppose they might talk a bit while playing golf.
I think this is being misconstrued somewhat. The FED will back the banks just as they did in 2008, that is not the real issue. The issue is that the majority of this toxic debt has probably been bundled and sold to pension funds, mutual funds, and ETF's.
The FED is probably far more concerned with the impact the news of the bad loans will have on people who might begin to move to cash in their retirement and investment accounts.
There is nothing like news of bank instability to get everyone running for the exits.
If people really understood the potential impact of these loan defaults it would cause panic.
I think this is being misconstrued somewhat. The FED will back the banks just as they did in 2008, that is not the real issue. The issue is that the majority of this toxic debt has probably been bundled and sold to pension funds, mutual funds, and ETF's.
The FED is probably far more concerned with the impact the news of the bad loans will have on people who might begin to move to cash in their retirement and investment accounts.
There is nothing like news of bank instability to get everyone running for the exits.
If people really understood the potential impact of these loan defaults it would cause panic.
There probably many motives behind the Fed trying to hide the full nature of the latest Bubbles that it has created.
Somehow I sense that the Fed is under lots of pressure by various economic centers to stop is printing presses because it is destroying economies everywhere and creating an enormous amount of worldwide social unrest which is threatening to topple the order. The EU is under tremendous pressure as an example.
There probably many motives behind the Fed trying to hide the full nature of the latest Bubbles that it has created.
Somehow I sense that the Fed is under lots of pressure by various economic centers to stop is printing presses because it is destroying economies everywhere and creating an enormous amount of worldwide social unrest which is threatening to topple the order. The EU is under tremendous pressure as an example.
Yes, the flood of money created by QE has caused a number of problems worldwide. The carry trade has driven inflation and mal-investment. It has also had a negative effect on sovereign debt in places like Greece, Spain, Portugal, and Puerto Rico.
The problem is the ending of QE is pushing up interest rates and the dollar which is making sovereign debt abroad even more difficult to service.
Yes, the flood of money created by QE has caused a number of problems worldwide. The carry trade has driven inflation and mal-investment. It has also had a negative effect on sovereign debt in places like Greece, Spain, Portugal, and Puerto Rico.
The problem is the ending of QE is pushing up interest rates and the dollar which is making sovereign debt abroad even more difficult to service.
Yes, the Central Banks have choose between which way to go and ask ways end up real bad, even catastrophic. China is at the end of its debt binge and needs to devalue. Already $5 trillion had been lost on their comical stock exchanges and they are in deep trouble with the populous. Ditto for Japan, Brazil, Argentina, Russia, Spain, Portugal, Italy, France, Puerto Rico, not to mention the Middle East which is all about the oil.
What a fabulous, humongous, fantastical mess these Central Bankers have created. May they all get their just desserts.
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