Tag Archives: Bailout Fail

Doug French: Separating the Banking Wheat from the Chaff

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“What hasn’t abated is the elevated number of banks on the FDIC’s super secret problem list. After jumping from 76 at the end of 2007 to 252 at the end of 2008 to a high of 888 at the end of the March 2011, the number has stayed stubbornly high, with 772 still on the list at the end of March of this year.  More than 280 banks have been closed since the end of 2009, yet the number of problem banks has increased by 70 since then. The problem banks aren’t getting any healthier, and more banks are getting sicker.”

http://whiskeyandgunpowder.com/separating-the-banking-wheat-from-the-chaff/

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Dominoes

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“Each time a domino falls, the member state requires assistance from the remaining member states. When Greece fell into financial disarray and then failure, the other 16 states had to provide the subsidy. When Ireland fell, there were 15. Portugal made it 14. Cyprus made it 13. Now Spain leaves 12 remaining.  As the dominoes continue to fall, the costs are reapportioned among the remainder, which is a shrinking cohort. Wealthy French, Italian, Spanish, Greek, Portuguese, Cypriot, Irish, and other citizens are voting with their feet. The financial flows reflect it.”

http://www.ritholtz.com/blog/2012/07/dominoes/

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Snap! Crackle! Pop!…Goes the Student Loan Bubble!

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“The US Department of Education has become the Countrywide of student lending. After a lending binge started in 2009, it now holds a massive $452 billion portfolio of student loan receivables, according to Federal Reserve data. This so-called ‘asset’ will become a liability by next year.  Thanks to the punk job market, a huge percentage of these loans will go bad or have to be restructured. When that happens, Congress will have to appropriate money to make up for the loan-payment shortfall. What was quietly off budget will soon make a big splash on the federal budget.”

http://dailyreckoning.com/snap-crackle-pop-goes-the-student-loan-bubble/

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Charles Goyette: Government vs. Prosperity (Chapter 1, Abridged)

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“Republican and Democratic majorities alike insisted on socializing the losses of private banks and corporations, while guaranteeing their profits were theirs to keep.  The country is financially insolvent because the Washington parties, red and blue alike, are philosophically bankrupt. Their shared statist philosophy needs to be exposed before it does us any more harm.  Prosperity is something much greater than wealth. Prosperity refers to the wellsprings of human ingenuity and enterprise from which long-term wealth and human improvement bubble forth.”

http://www.moneyandmarkets.com/government-vs-prosperity-50274

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Peter Schiff: The Inevitable Collapse

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“Ultimately the implosion in the economy is much more dramatic than in 08 because there are no bailouts coming. There’s nobody to bail out the bailer. Once the government fails its game over and so this is the final bubble and I called it in my book, the government bubble. That’s what it is, it’s a bubble in government and it’s sustained by low interest rates, just like the housing bubble was sustained by low interest rates. But, you know all bubbles burst. It’s inevitable; the problem isn’t that this bubble is going to burst, the problem is that we inflated it in the first place and that we continue to blow air into it.”

http://www.wallstreetoasis.com/blog/peter-schiff-interview-the-inevitable-collapse-of-america-part-1

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Paul Ryan: Insider Trading Thief?

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“Ryan sold stock in Wachovia and Citigroup on the same day he attended a confidential meeting where top level officials disclosed the sector was heading for a deep crisis. Not long after the meeting, Wachovia’s and Citigroup’s share prices fell. Most interesting, though, Ryan bought shares that day in Goldman Sachs.  Goldman stock climbed by more than 40% from its low on the 18th to its closing price on the 19th. Just 4 days later Warren Buffett plowed billions into the company.  On October 3, 2008, Ryan voted for TARP, which resulted in even more money being pumped into Goldman.  Goldman Sachs is now among his largest financial supporters.”

http://www.economicpolicyjournal.com/2012/08/paul-ryan-insider-trading-thief.html

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Let’s shatter the myth on Glass-Steagall

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“Why let facts get in the way of a good screenplay?  Facts such as that Bear Stearns, Lehman Brothers and Merrill Lynch — three institutions at the heart of the crisis — were pure investment banks that had never crossed the old line into commercial banking. The same goes for Goldman Sachs, another favorite villain of the left.  The infamous AIG? An insurance firm. New Century Financial? A real estate investment trust. No Glass-Steagall there.  Two of the biggest banks that went under, Wachovia and Washington Mutual, got into trouble the old-fashioned way – largely by making risky loans to homeowners.”

http://www.washingtonpost.com/lets-shatter-the-myth-on-glass-steagall/2012/07/27/gJQASaOAGX_print.html

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$11 Trillion Increase in Federal Debt in One Year

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“The unfunded liabilities of the U.S. government grew in one year by $11 trillion, says Prof. Lawrence Kotlikoff of Boston University. He is using figures provided by the Congressional Budget Office.  Republicans and Democrats in Congress a year ago could not figure ways to cut $210 billion a year for a decade. Meanwhile, the real debt grew by $11 trillion.  Understand, this is the present value of the gap. It’s not that, over the next 75 years, there will be $11 trillion more debt. It is that the present value of the entire gap is $11 trillion. We need $11 trillion today, invested in high-return capital.”

http://teapartyeconomist.com/2012/08/10/11-trillion-increase-in-debt-in-one-year/

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U.S. auto bailout cost keeps rising

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“The U.S. Treasury raised its estimate of the net cost to U.S. taxpayers of rescuing the country’s auto industry by $3.3 billion, as the weak economy restrains the industry’s rebound.  The Treasury told Congress in a new report seen on its website Monday that the cost of the government’s massive bailout of Detroit in the economic crisis of 2007-2008 would hit $25 billion, based on figures to May 31.  A year ago, when hopes were that the economy was solidly recovering and the housing market might turn around, the Treasury was projecting losses on the industry bailout of just $14.3 billion.”

http://www.rawstory.com/rs/2012/08/14/u-s-auto-bailout-cost-keeps-rising/

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Lenders In Europe Will Need More Central Bank Cash, Fitch Says

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“The ECB’s two refinancing operations made new cash available to Europe’s banks to help them refinance maturing debt and push down government bond yields as they invested in the securities. The LTROs, which mature in three years, have tightened the links between banks and their sovereigns and leave unanswered the question of how borrowers will repay the loans at maturity.  About 50 percent of those expecting a new LTRO predict it will take place in 2013 or 2014, before the current LTROs run out, while 33 percent say it will come before year-end, Fitch said.”  [Each ‘solution’ sows the seeds of the next crisis.]

http://www.bloomberg.com/news/2012-08-09/lenders-in-europe-will-need-more-central-bank-cash-fitch-says.html

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