General public discuss economy

[P.Clodius]

...not being knowledgeable on such subjects, is the general doom and gloom justified by these people? Ignore the obvious rants!

[Gaius Octavius]

I doubt very much if the Federal Reserve and the Treasury would allow Citigroup to go belly up. The stocks of all these operations will take hair cuts though. So will their bonds, and bonds in general will take a hit. I believe that it will spread to other CDO's, such as car loans and credit cards. When you think about it, there are a handful of charlatans who might put the U.S., and perhaps the world, into a depression. Each one of those SOB's will come out smelling like roses. They put 'banks' into dire straits; get fired; and walk away billionaires. The dividends people are living on, will go to hell though. Not to forget the effect on the peasants' pensions. Mr. Greenspan says that he knew about it, but couldn't do anything about it. Why the blazes didn't he call the cops? (Brought most of this to the attention of the BBC.)

 

Why should the Central Banks buck up the banks? It would seem wiser to buck up the peasants so that they could pay off their mortgages and keep the CMO's afloat. Why don't legislatures simply say that those mortgages are void and return them to their original rates? That would be an 'ex post facto' law. Can't do that; well except in the cases of the telephone companies that illegally gave up our telecommunications.

 

This has never happened before! Bank deregulation? The S & L fiasco that the taxpayers had to bail out. Once upon a time investment and commercial banking were separated, because they did baddies prior to the mid 1930's. The dot com sham. The 'off balance sheet' scam. None of the 'boys' owned that crap. Now they own it. One little proviso: It's not their money!

 

A couple of decades ago, when a security didn't have a market or a valid bid, it had to be marked to zero and the loss subtracted from your S.E.C. Net Capital. Now, with these CMO's, it seems that a 'matrix' can be set up to give them a non-existent value! Failing that, simply guess at a value! There is one more fraud that won't come to mind now. Had the former system existed, and the S.E.C. and bank examiners were doing their jobs, this might never come about. Well, it would have been, and will be something else.

 

dubya's 'ownership society'!

 

Yup! We own a slug of Citigroup. Can't afford to sell though.

Edited November 8, 2007 by Gaius Octavius

[P.Clodius]

Is what this guy says true or a gross over-simplification?

"America is paying the price for an economy based not on production, but on speculation and usury. The rich are enriched still further, the poor, the working class and even parts of the middle class are gradually being enslaved by debt."

[Gaius Octavius]

Is what this guy says true or a gross over-simplification?

"America is paying the price for an economy based not on production, but on speculation and usury. The rich are enriched still further, the poor, the working class and even parts of the middle class are gradually being enslaved by debt."

 

I am not certain that the entire first sentence is true, but speculation and usury are high on the ladder. Isn't the second sentence obvious? Who is taking the hit on this sub-prime rip off? Who pays those unbelievable rates on their credit cards, save for the peasantry? Who has to go into bankruptcy under Chapter 7 rather than Chapter 13?

 

As regards your comment, let me paraphrase our last elected president: 'Keep it simple, stupid'. (Not you.) Try this from my days as a logician: "The greater the extension, the less the comprehension."

 

Well, you've got me started, and you know what I am sipping. Here goes:

 

'Hedge Funds'? Bull cackle! They are nothing more than 'Regulation T (Margin Requirements) Evasion Funds'! Their shareholders put a pittance up, and the banks supply the rest - with your money. Since the 'managers' get a grand slice of the alleged profits, they get taxed at long term capital gains rates - each year. But they do own a couple of shares. Now, let us assume that one owns stock in, and works for Citigroup, shouldn't his salary and dividends be taxed likewise, without going through a 69 page workout?

 

Bank of America. Once the largest bank in the U.S. (And which could operate across two state lines.) When it was Giannini owned back in the 1970's, there was a 6% limit on what California municipalities could pay on their loans. Rates were substantially higher. But just as Giannini did during the Great Depression, making cheap loans to farmers and others (who never forgot), they underwrote 6% loans. Then some smaller hillbilly bank in north carolina took them over. They now have fees for their customers' having false teeth.

 

One more. A hillbilly state in the upper mid-west (idaho?, iowa?) rid themselves of 'usury' rates. Merrill-Lynch soon opened a 'bank' there. ( After paying the politicos off.) Credit card companies soon followed.

 

Sorry, one more. How many people in the world know what 'LIBOR' is? What does a rate now, have to do with a 'fixed' rate in the future? HIBOR is next!

[Faustus]

Is what this guy says true or a gross over-simplification?

"America is paying the price for an economy based not on production, but on speculation and usury. The rich are enriched still further, the poor, the working class and even parts of the middle class are gradually being enslaved by debt."

Then some smaller hillbilly bank in north carolina took them over. They now have fees for their customers' having false teeth.

 

One more. A hillbilly state in the upper mid-west (idaho?, iowa?) rid themselves of 'usury' rates. Merrill-Lynch soon opened a 'bank' there. ( After paying the politicos off.) Credit card companies soon followed.

 

Sorry, one more. How many people in the world know what 'LIBOR' is? What does a rate now, have to do with a 'fixed' rate in the future? HIBOR is next!

 

 

Hey! G.O.!

 

We ain't all Hill Billies out here! Some of us are Hill Williams. And LIBOR . . . Ain't that The London Interbank Overnight Rate or something like that? I think I've seen that on some of my loan docs, and A'm thinking that's what my commercial loan rate is pegged to. . . .

 

 

BTW Cecil, when do I get my next humor fix?

 

Valete -

 

Faustus

 

 

~~~~~~~~~~~

 

_{I YAM WHAT I YAM !}

_{Popey The Sailor Man}

[ASCLEPIADES]

How many people in the world know what 'LIBOR' is? What does a rate now, have to do with a 'fixed' rate in the future? HIBOR is next!

And LIBOR . . . Ain't that The London Interbank Overnight Rate or something like that? I think I've seen that on some of my loan docs, and A'm thinking that's what my commercial loan rate is pegged to. . . .

Sequitur

[Faustus]

How many people in the world know what 'LIBOR' is? What does a rate now, have to do with a 'fixed' rate in the future? HIBOR is next!

And LIBOR . . . Ain't that The London Interbank Overnight Rate or something like that? I think I've seen that on some of my loan docs, and A'm thinking that's what my commercial loan rate is pegged to. . . .

Sequitur

 

Asclepiades, Thanks!

But, it proves I didn't look it up on the internet. . . Just painfully aware of it

 

I knew someone would help me out with that

[Moonlapse]

The inevitable effect of the policies and actions of the past on the US economy will be a huge recession and probably some major inflation of the dollar, if foreign banks wise up to the fact that US dollars are pieces of paper backed by a lot of debt. Though, I wouldn't be surprised if the dot com and housing thing happened yet again in some other market between now and then.

[Gaius Octavius]

Stagflation, anybody?

 

Faustus, the Bank of Sweden (not too long ago.), had an overnight rate of 150%.

 

What the heck. Back in the olden days, 1970's, we used to borrow from our bank (with municipal bonds as collateral) at the closing 'Fed Funds' rate. On the last business day of one particularly bad year, this 'market' rate closed at 25%. Wanna bet that the boys arranged a Mickey Mouse last trade?

Edited November 9, 2007 by Gaius Octavius