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Old 08-27-2008, 09:37 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,937,947 times
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FDIC may borrow money from Treasury: report - Yahoo! News (broken link)

Quote:
Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.

Quote:
The last time the FDIC had borrowed funds from the Treasury was at nearly the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered.
Quote:
The fact that the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis

Hey guys. So I'd like to you compare and contrast the S&L crisis to our current banking situation. Would like to know what are the similarities and differences you guys see in the two. And would also like to know your opinions on possible similar and different outcomes from these two events.
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Old 08-27-2008, 01:31 PM
 
Location: San Jose, CA
7,688 posts, read 26,837,389 times
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There are similarities.. both were caused in part by insufficient regulation, as well as imprudent lending by inexperienced and often fraudulent parties which were dealing with untested lending products. Once all is said and done, both will go down as very long, protracted and messy financial meltdowns. We may even see a new class of mortgage providers take the forefront, much in the same way S&Ls had their market share eroded by companies like Countrywide, Amerisave, and New Century.
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Old 08-31-2008, 07:54 AM
 
Location: America
6,993 posts, read 16,027,008 times
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Quote:
Originally Posted by sonarrat View Post
There are similarities.. both were caused in part by insufficient regulation, as well as imprudent lending by inexperienced and often fraudulent parties which were dealing with untested lending products. Once all is said and done, both will go down as very long, protracted and messy financial meltdowns. We may even see a new class of mortgage providers take the forefront, much in the same way S&Ls had their market share eroded by companies like Countrywide, Amerisave, and New Century.
I almost don't want to say anything in this thread as sonarrat has pretty much nailed it. I think the big difference will be the end of the F.I.R.E. economy we have today. I want to say this should be the end of our fiat system as well but, I doubt that. Either way, I think our economy is going into a transition, moving away from Finance, Insurance and Real Estate. I have a idea where it is going, we shall see. I think we will see FAR more hardships than last time as well. S&L wasn't as wide spread as this present fiasco is. I saw a report on BBC news with families in California who had lost their homes. They were now living in tent cities in the outskirts of some of the cities out there. Never thought I would live to see the day tent cities return to America. We are in for a real $4!7 storm.
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Old 08-31-2008, 09:21 AM
 
Location: Backwoods of Maine
7,309 posts, read 8,991,133 times
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It isn't possible to compare at this point in time. The S&L crisis can be looked at in its entirety through the rear-view mirror. The present crisis is just unfolding. This has the potential to dwarf the S&L. Back in 1990/91, I was working and raising a family, pretty much untouched by the goings-on.

I don't think anyone will remain untouched by this one. Just MHO.
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Old 08-31-2008, 09:28 AM
 
Location: Seattle, WA
209 posts, read 556,001 times
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Quote:
Originally Posted by Wild Style View Post
I almost don't want to say anything in this thread as sonarrat has pretty much nailed it. I think the big difference will be the end of the F.I.R.E. economy we have today. I want to say this should be the end of our fiat system as well but, I doubt that. Either way, I think our economy is going into a transition, moving away from Finance, Insurance and Real Estate. I have a idea where it is going, we shall see. I think we will see FAR more hardships than last time as well. S&L wasn't as wide spread as this present fiasco is. I saw a report on BBC news with families in California who had lost their homes. They were now living in tent cities in the outskirts of some of the cities out there. Never thought I would live to see the day tent cities return to America. We are in for a real $4!7 storm.
I hope you are right and we transition from the F.I.R.E economy into what build America and our middle class....Manufacturing. As for the fiat money issue, actually a fiat system works when you don't over-issue the money and it is in public control through are government not in the current form where we have a partnership with a banking cartel. And to re-enforce my first point, we can not over-issue the currency. That means no more deficit financing through printing new currency. This always in the end creates inflation by expanding the monetary base. Heck, I love the thought of all these social programs but we really need to pick what is the most important things we need that justifies higher inflation and taxes and everything else we should leave to the states to decide and in turn that will decide where "You" want to live in America. Take California and their subsidized college education, I know a few people who moved there for schooling and then moved to a lower tax state when they went into the work force.
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Old 08-31-2008, 09:35 AM
 
Location: America
6,993 posts, read 16,027,008 times
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Quote:
Originally Posted by BankREO View Post
I hope you are right and we transition from the F.I.R.E economy into what build America and our middle class....Manufacturing. As for the fiat money issue, actually a fiat system works when you don't over-issue the money and it is in public control through are government not in the current form where we have a partnership with a banking cartel. And to re-enforce my first point, we can not over-issue the currency. That means no more deficit financing through printing new currency. This always in the end creates inflation by expanding the monetary base. Heck, I love the thought of all these social programs but we really need to pick what is the most important things we need that justifies higher inflation and taxes and everything else we should leave to the states to decide and in turn that will decide where "You" want to live in America. Take California and their subsidized college education, I know a few people who moved there for schooling and then moved to a lower tax state when they went into the work force.
Our money supply in part is grown through credit/debt creation. It is inherently flawed and unsustainable.

Also, I didn't mention what I thought the economy will grow into. I don't want to say now, but the evidence for it is clear.
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Old 08-31-2008, 01:59 PM
 
Location: Heartland Florida
9,324 posts, read 24,696,466 times
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Obviously the money supply cannot be tied to a fixed quantity like gold, but should only be increased at a rate that matches the true growth of the economy. The gold and silver standards were used to provide a limit on money but those hoarding gold or silver would become wealthy simply by doing nothing.

"As for the fiat money issue, actually a fiat system works when you don't over-issue the money and it is in public control through are government not in the current form where we have a partnership with a banking cartel. And to re-enforce my first point, we can not over-issue the currency."

If only more people understood this. Fiat money fails because human nature destroys it. If money can be created out of nothing, it will be. Eventually market forces correct the imbalance, at the expense of those who assume the risk.
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Old 08-31-2008, 05:17 PM
 
Location: Backwoods of Maine
7,309 posts, read 8,991,133 times
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Originally Posted by tallrick View Post
The gold and silver standards were used to provide a limit on money but those hoarding gold or silver would become wealthy simply by doing nothing.
Why is buying gold and silver so often referred to as "hoarding"? If you have a CD or money market account, are you "hoarding" dollars? If you buy mutual funds, are you "hoarding" stocks? I don't think so!

As for "becoming wealthy by simply doing nothing", just TRY holding onto gold and silver (esp silver!) through all the volatility in those tiny markets. Many weak hands have been flushed out. Anyone holding gold could just have easily invested in stocks or bonds. We all still have free will. If you made a killing in the stock market, would you say you became "wealthy simply by doing nothing"? Didn't think so!
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Old 09-01-2008, 08:42 AM
 
Location: Heartland Florida
9,324 posts, read 24,696,466 times
Reputation: 4969
Quote:
Originally Posted by Nor'Eastah View Post
Why is buying gold and silver so often referred to as "hoarding"? If you have a CD or money market account, are you "hoarding" dollars? If you buy mutual funds, are you "hoarding" stocks? I don't think so!

As for "becoming wealthy by simply doing nothing", just TRY holding onto gold and silver (esp silver!) through all the volatility in those tiny markets. Many weak hands have been flushed out. Anyone holding gold could just have easily invested in stocks or bonds. We all still have free will. If you made a killing in the stock market, would you say you became "wealthy simply by doing nothing"? Didn't think so!
There's nothing wrong with investing in gold, but the problem is that certain entities will always have the advantage of holding vast reserves of gold and can manipulate the market at will. I would prefer a monetary system where all commodities are taken into account and the money supply exactly matches economic growth. If more stuff is not being made, the money supply does not grow, or should be reduced. The current fractional reserve system is unsustainable and will fail. However, caution should be used before going to a system backed by a limited resource. The gold standard would work only in a world with a stable population and free trade.
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Old 09-01-2008, 06:01 PM
 
1,566 posts, read 2,902,133 times
Reputation: 1262
Quote:
Originally Posted by tallrick View Post
Obviously the money supply cannot be tied to a fixed quantity like gold, but should only be increased at a rate that matches the true growth of the economy. The gold and silver standards were used to provide a limit on money but those hoarding gold or silver would become wealthy simply by doing nothing.

"As for the fiat money issue, actually a fiat system works when you don't over-issue the money and it is in public control through are government not in the current form where we have a partnership with a banking cartel. And to re-enforce my first point, we can not over-issue the currency."

If only more people understood this. Fiat money fails because human nature destroys it. If money can be created out of nothing, it will be. Eventually market forces correct the imbalance, at the expense of those who assume the risk.
so what your saying is that in a perfect world it would work but in reality it wont?
i would agree with that and being we do live in reality it is clear why fiat money doesnt work
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