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Oh deary me, the largest bank failure since Continental Illinois (S&L Crisis) is now a historical fact as of a few hours ago. Sure hope nobody here had deposits there in excess of FDIC limits...
"Reich emphasized that while other financial institutions remained on the agency's danger list, he believed most of them would be able to work their way back to solvency.
"The IndyMac situation is unique. It does not signal a direction for the industry as a whole," he said."
well i know i did when stated in a prior post that the fed would do what they did in the early 80's, and that being: TOO BIG TO FAIL!
at least we know that their policy will be to continue to flood liquidity into the system, thus driving the dollar index down to the 45-50 area and oil up to $150 minimum, and in a perverse sense of irony, bankrupting the knuckleheads who outsourced manufacturing overseas. actually, there is some bright news...as the dollar heads lower, dollars and manufacturing will come back home to roost. how? products now cost too much to build and ship (a big deal) to the u.s. on formerly razor thin profit margins when oil was at $50. so now factories are closing all over the globe. or operating at a loss. but the u.s. infrastructure needs an overhaul and rebuild, so let's borrow cheap dollars from the suckers (sovereign wealth funds) like china, russia, arabs, and europe who should be happy to loan their worth less dollars to get some sort of a return other than bidding up crude and gold to the moon (hurts them worse than us). then the u.s. can gear up for an economic expansion the likes of which have not been seen in a long time. as dollars get spent on our infrastructure and manufacturing capacity, liquidity gets driven out of the global system, and energy and food prices fall since there is less dollars chasing oil and grain higher and more dollars geared toward more productive investments (a forgotten word). at the same time, encourage tax breaks for savings and penalize mindless consumption. the pols and public will be happy because jobs will be created, especially if the u.s. could plan a massive moon launch type of program toward energy independence from our enemies by 2050. men to mars can wait. in the meantime, encourage development and competition of EVERYTHING...biomass, hydrogen, fuel cells, efficient batteries for cars and electrical storage, liquid natural gas, solar (4th gen quantum dot tech looks promising, one photon in and 5 to 7 electrons out), geothermal (colorado take note), wind, tides, coal liquids and gas, shale oil and gas, methane hydrates, research on renewable abiogenetic hydrocarbons from the upper mantle, conventional and unconventional oil and gas exploration onshore and offshore from the the west to the least coast, and from the arctic ocean to the gulf of mexico. do it all. and do it without trashing the environment. but the pols must have the resolve to terrify and threaten our enemies into lowering energy prices near term; implementing the most cost effective solutions short and medium term while continuing research and development on future commercial grid-based fusion power.
don't settle for anything less than prosperity for the majority, thus closing the gap between the wealthy and the forgotten working middle class. a rising tide lifts all boats. as i've said before, no fear, no worries, and be filled with an unquenchable optimism for the future.
"Reich emphasized that while other financial institutions remained on the agency's danger list, he believed most of them would be able to work their way back to solvency.
"The IndyMac situation is unique. It does not signal a direction for the industry as a whole," he said."
One need only look around at the pervasive scope of the mortgage disaster to know that this quote is just more vacuous market-pumping by a scared ****less banker contemplating the demise of his own kingdom as well.
I take away something a bit more ominous from this sound bite:..."he believed most of them would be able to work their way back to solvency." That's pretty much a tacit admission that they are insolvent now.
well i know i did when stated in a prior post that the fed would do what they did in the early 80's, and that being: TOO BIG TO FAIL!
But fail is exactly what has happened to IndyMac. Their stockholders and bondholders are screwed...their depositors are protected by the FDIC, within limits. But this is not a bank rescue...the bank has failed. Only the depositors with deposits below the FDIC maximums are being rescued. Most of the assets of a huge bank are up in smoke now. FDIC Chairwoman Sheila Bair said it may well prove to be the costliest bank failure in history, even enough to force increased premiums by the other banks for deposit insurance.
Quote:
Originally Posted by multitrak
at least we know that their policy will be to continue to flood liquidity into the system, thus driving the dollar index down to the 45-50 area and oil up to $150 minimum, and in a perverse sense of irony, bankrupting the knuckleheads who outsourced manufacturing overseas. actually, there is some bright news...as the dollar heads lower, dollars and manufacturing will come back home to roost. how? products now cost too much to build and ship (a big deal) to the u.s. on formerly razor thin profit margins when oil was at $50. so now factories are closing all over the globe. or operating at a loss. but the u.s. infrastructure needs an overhaul and rebuild, so let's borrow cheap dollars from the suckers (sovereign wealth funds) like china, russia, arabs, and europe who should be happy to loan their worth less dollars to get some sort of a return other than bidding up crude and gold to the moon (hurts them worse than us). then the u.s. can gear up for an economic expansion the likes of which have not been seen in a long time. as dollars get spent on our infrastructure and manufacturing capacity, liquidity gets driven out of the global system, and energy and food prices fall since there is less dollars chasing oil and grain higher and more dollars geared toward more productive investments (a forgotten word). at the same time, encourage tax breaks for savings and penalize mindless consumption. the pols and public will be happy because jobs will be created, especially if the u.s. could plan a massive moon launch type of program toward energy independence from our enemies by 2050. men to mars can wait. in the meantime, encourage development and competition of EVERYTHING...biomass, hydrogen, fuel cells, efficient batteries for cars and electrical storage, liquid natural gas, solar (4th gen quantum dot tech looks promising, one photon in and 5 to 7 electrons out), geothermal (colorado take note), wind, tides, coal liquids and gas, shale oil and gas, methane hydrates, research on renewable abiogenetic hydrocarbons from the upper mantle, conventional and unconventional oil and gas exploration onshore and offshore from the the west to the least coast, and from the arctic ocean to the gulf of mexico. do it all. and do it without trashing the environment. but the pols must have the resolve to terrify and threaten our enemies into lowering energy prices near term; implementing the most cost effective solutions short and medium term while continuing research and development on future commercial grid-based fusion power.
don't settle for anything less than prosperity for the majority, thus closing the gap between the wealthy and the forgotten working middle class. a rising tide lifts all boats. as i've said before, no fear, no worries, and be filled with an unquenchable optimism for the future.
Although I agree with you that we have an opportunity to make some real lemonade from the lemon this economy has become, I have serious doubts that the kinds of leaders needed to make the hard decisions needed now occupy seats in Congress or the White House. The current crop of pols will try to pander to the overextended and bleating sheeple who just want someone to make it possible for them to afford 4 times more house than their pay permits, or to make it affordable for them to drive their V-8 powered Tahoe on their 45-mile one-way commute to work. And as a result, the real leaders we need will not be elected to take us forward to a new prosperity.
Instead, I expect to see some major league demagoguery and lots of energy expended rearranging the deck chairs of the financial Titanic.
That said, I stand ready to be surprised...in fact I pray that I will be proven wrong. When I see the country, corporate America, and people on an individual and widespread basis taking steps to control debt and live within their means, that'll be a sign. When I see regulatory measures that make investment something different than trading the electronic equivalent of baseball cards back and forth, that'll be a sign. When I see Detroit retooling for permanent production of economical vehicles that'll be a sign. When I see senior bankers in handcuffs for recklessly losing other peoples' money, that'll be a sign.
But right now, the signs I see are the biggest federal budget deficit ever, mushrooming credit card debt levels, frenzied calls to Washington to permit more drilling and production without equally frenzied calls to the public to conserve, and offshore investment banks and hedge funds still making $$billions by exploiting the technical openings presented by poorly regulated equity and bond markets and tax structure while actually producing nothing.
Anyway, if we do actually pull our collective heads out of our collective tailpipes, Colorado could be well positioned to be on the leading edge of needed innovations in energy conservation, production, and usage.
but the pols must have the resolve to terrify and threaten our enemies into lowering energy prices near term; implementing the most cost effective solutions short and medium term while continuing research and development on future commercial grid-based fusion power.
This needs special comment. When it becomes apparent to our "enemies" that we will no longer be buying oil or cheap electronics in quantity from them, then they will have little need to buy or hold our debt.
So who will then buy and hold our $10 trillion in outstanding national debt in their place? This is a recipe for seeing the long bond spike up to around 15-20%...how do you suppose housing will look with mortgage rates at 18%??
Terrifying and threatening isn't how we will get out of this sh**storm. It's more like a sure way to fail famously.
If we've learned nothing else from the "W" experiment, it's that it's a generally bad idea to try to terrify and threaten our way to international success.
But fail is exactly what has happened to IndyMac. Their stockholders and bondholders are screwed...their depositors are protected by the FDIC, within limits. But this is not a bank rescue...the bank has failed. Only the depositors with deposits below the FDIC maximums are being rescued. Most of the assets of a huge bank are up in smoke now. FDIC Chairwoman Sheila Bair said it may well prove to be the costliest bank failure in history, even enough to force increased premiums by the other banks for deposit insurance.
Although I agree with you that we have an opportunity to make some real lemonade from the lemon this economy has become, I have serious doubts that the kinds of leaders needed to make the hard decisions needed now occupy seats in Congress or the White House. The current crop of pols will try to pander to the overextended and bleating sheeple who just want someone to make it possible for them to afford 4 times more house than their pay permits, or to make it affordable for them to drive their V-8 powered Tahoe on their 45-mile one-way commute to work. And as a result, the real leaders we need will not be elected to take us forward to a new prosperity.
Instead, I expect to see some major league demagoguery and lots of energy expended rearranging the deck chairs of the financial Titanic.
That said, I stand ready to be surprised...in fact I pray that I will be proven wrong. When I see the country, corporate America, and people on an individual and widespread basis taking steps to control debt and live within their means, that'll be a sign. When I see regulatory measures that make investment something different than trading the electronic equivalent of baseball cards back and forth, that'll be a sign. When I see Detroit retooling for permanent production of economical vehicles that'll be a sign. When I see senior bankers in handcuffs for recklessly losing other peoples' money, that'll be a sign.
But right now, the signs I see are the biggest federal budget deficit ever, mushrooming credit card debt levels, frenzied calls to Washington to permit more drilling and production without equally frenzied calls to the public to conserve, and offshore investment banks and hedge funds still making $$billions by exploiting the technical openings presented by poorly regulated equity and bond markets and tax structure while actually producing nothing.
Anyway, if we do actually pull our collective heads out of our collective tailpipes, Colorado could be well positioned to be on the leading edge of needed innovations in energy conservation, production, and usage.
I agree with everything you've said here, Bob, (and couldn't have said it better myself), except for the last paragraph. I've read similar statements time and again from people from all over the spectrum who live in Colorado or want to live here. It is rooted in some very wishful thinking that somehow Colorado is uniquely positioned to weather the economic/political/social ****storm ahead. In ONE way, Colorado is positioned well. It has a lot of potential energy resources that are being developed or could be developed. But even that is a mixed blessing--the pressure will be intense to develop those resources as extensively and quickly as possible, regardless of the local and regional social, environmental, and economic costs. The kind of large-scale destruction that could be unleashed in Colorado in the name of "energy security" is absolutely frightening to contemplate. Imagine the ravaging of the Appalachian coal fields about a hundred times over, and you can kind of get the picture. I think there are plenty of current and wannabe Coloradans that would be packing up for someplace else if and when that happens.
So, beyond the energy storehouse, what has Colorado got to offer in the coming crisis? Not much. Colorado, like it or not, is still geographically isolated from the nation's manufacturing base (or the ports to import goods)--and will likely get much more so as air and long-distance trucking and auto travel become less and less practical. Colorado's rail infrastructure is atrophied and inadequate. The state does not have much of a manufacturing base--and some of what it does have (aerospace, for example) may not have a great long-term future in the environment ahead. Colorado is also heavily reliant on federal spending, including a lot of military spending. That is likely to shrivel considerably when most all federal spending must be devoted to debt service, keeping the tattered banking system afloat, and paying the massive, but unfunded entitlements that will plague the government for as long as one can project into the future.
Agriculture may have some potential to grow significantly in Colorado, but it will have to overcome the egregious structural damage that the urban water grabs, loss of prime land to suburbia, and attrition of support infrastructure have unleashed upon it.
As for that other biggie, tourism, it faces a very downsized and sparse future. There is no other industry in Colorado so dependent on cheap energy and plentiful discretionary income, and both of those are poised to become essentially extinct. I firmly believe that the crash in the tourism industry (and not just in Colorado, but nationwide) will be both rapid and breathtaking once it begins in earnest.
So, when all of this comes to pass, Colorado is going to have essentially a one-note-samba economy--energy, along with a little manufacturing, a little tourism, and some agriculture to keep it alive. There is a state that operates on this model right now--it is Wyoming. How well does Wyoming do with that model? Well, it supports a population of about 520,000 people, a little more than 10% of the Colorado population. With Colorado's regional trade center status, it might do somewhat better (though its energy resources are much more limited than those of Wyoming)--it might support 2-3 million. I wonder what the other 2 or 2 1/2 million are going to do? Sit around and look at the scenery while they starve? There are some models for that in other places in the world, too.
Last edited by jazzlover; 07-12-2008 at 11:52 AM..
Jazz, I was actually referring to Colorado being a leader in developing the technical and engineering aspects of the needed energy transformation. I am, of course, extrapolating what I have observed so far in Colo Springs to the rest of the state, which may not be valid.
It was quite uninspiring how today's stock market played out, starting with cheers and child-eyed wonder that Bernie and the Feds were saddling up to ride to Fannie and Freddie's rescue (sounds kinda like a bad B-reel spaghetti western, don't it?) and ending up with the Wall Street "smart" guys looking around and asking..."hey, if they rescue Fannie and Freddie, then who's gonna be left to rescue WaMu, the Killer Whale, and his trusty sidekicks the Lehman Brothers??"
Is it time to shine the bat-signal over Gotham City yet? I was noticing that Hank P-P-P-Paulson was looking and sounding very much like the Joker when he did that last press release on Fannie and Freddie...
WaMu is circling the drain now, so you can get another glimpse soon if you missed this one. And there are more coming.
One should note that these are big institutions, not East Pigknuckle Savings Bank and Feed Store.
And the FDIC, which just weeks ago lambasted banks for shutting down HELOCs without a proven drop in housing values, just shut down IMB's HELOCs lock, stock, and barrel. "Do as we say, not as we do." Lovely, just frappin' lovely.
So...in the Colorado Springs climate, is it better to bury your cash in a coffee can or a shoe box??? What's the optimum depth to keep the moisture just right and the bills nice and fresh?
Last edited by Bob from down south; 07-14-2008 at 06:30 PM..
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This is not looking good.
