Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Thu Jul 17, 2008 9:17 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Armageddon said:
Quote:
In a nutshell, what happened is that Monday morning, all the major mortgage banks in the U.S. issued some kind of order or decree, that they would cease conducting any kind of workouts or negotiations with borrowers, and instead foreclose on every home they could.
Thanks for the info Armageddon, this is very crucial to what is happening. The reason that banks are foreclosing on mass is because they know that if they don’t foreclose now they probably won’t be able to in the near future.
The US is about to experience a massive banking crisis. Collapse is probably a better term for the situation that is about to unfold. There is a matrix called the Texas Ratio. It is calculated by dividing a bank's 90 day delinquent loans by the sum of loan loss reserves and equity (90 day delinquent loans/loan loss reserves + equity). Once a bank hits 100% it has historically had about a 99% chance of failing. There are now at least 100 banks in the US with a Texas Ratio of 100% or more.
The FDIC was established after the Great Depression to assist in the orderly closing of insolvent banks. It is a small agency with limited staff and limited capital. The failure of IndyMac has depleted its reserves to about $30+ billion. The FDIC can not handle the failure of 100 banks. It will be fortunate if it can handle another ten. These banks, for the most part, will be closing without FDIC supervision and deposit insurance compensation.
Without FDIC supervision there will be mayhem. The collapse of one unsupervised bank will bring about the collapse of two other marginal banks. Hundreds, if not thousands, of the nation’s 8,493 banks will close their doors. Trillions will be lost; the public will be frantic.
This is coming to pass because the US has lost foreign monetary support. Last month the US had a net foreign cash inflow of -$1.6 billion. This compares with +$61 billion the previous month. Without huge foreign inflows for its capital base the US economy and banking industry will quickly die.
US faces global funding crisis, warns Merrill Lynch
Quote:
The US Treasury is running out of time before foreign patience snaps, writes Ambrose Evans-Pritchard
Merrill Lynch has warned that the United States could face a foreign "financing crisis" within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.
The country depends on Asian, Russian and Middle Eastern investors to fund much of its $700bn (£350bn) current account deficit, leaving it far more vulnerable to a collapse of confidence than Japan in the early 1990s after the Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a similar retreat by foreign investors.
The US government will have no option but to shut down the banking system. This will also shut down the US economy. Some will be reopened in days to weeks to allow withdrawal of small amounts. Much of the world’s credit card and digital money systems will cease to work. Travel, except for the military and government officials will be curtailed. Banks will be forbidden to foreclose on homes.
Obviously the bigger institutions have been warned of this upcoming event. They are grabbing all the physical assets possible, as quickly as possible in anticipation of it. Paper assists will fall in value to almost nothing in the near future.
Eli and I discussed this scenario almost 4 years ago; that the ramifications of PO would manifest themselves in the weakest part of the system first. The monetary/financial system is by far the most susceptible element because it is based on a debt based fiat currency. A debt based currency can not survive in a declining, post PO economy for very long.
Exactly how soon this will come about is difficult to determine, but it would be surprising, because of the huge loss of foreign cash inflows, if it doesn’t occur before the 1’st of the new year!
Posted: Thu Jul 17, 2008 9:25 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Bought into WM Tuesday morning. So far I'm up over 25% on it. Picked up UYG this morning.
Dunno about all on doom and gloom types, but I'm having my cake and eating it too while the world falls apart. Its rather a funny feeling. _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Posted: Thu Jul 17, 2008 9:44 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Well have fun on that roulette table Spec, I think I'll stick to buying silver... And maybe lead...
-G _________________ I Have and will continue to vote against ANY politician who supports the various bailouts. Curse you for selling out our future for status quo now!
Joined: Jun 30, 2005 Posts: 769 Location: northern California
Posted: Thu Jul 17, 2008 9:46 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Specop_007 wrote:
Bought into WM Tuesday morning. So far I'm up over 25% on it. Picked up UYG this morning.
Dunno about all on doom and gloom types, but I'm having my cake and eating it too while the world falls apart. Its rather a funny feeling.
Playing the stock market now is like showing up at a gunfight with a 5 shot revolver and discovering that some of the bad guys are unholstering glocks... _________________ "When men yield up the privilege of thinking, the last shadow of liberty quits the horizon."
Thomas Paine
Posted: Thu Jul 17, 2008 10:13 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
gnm wrote:
Well have fun on that roulette table Spec, I think I'll stick to buying silver... And maybe lead...
-G
Thats EXACTLY what it is gnm. Even scarier is that the funds used to buy into these are unsettled. It means if I sell before the previous trade is settled I'm in violation of SEC laws. If WM or UYG start to tank to look like they will fail, I'm in for the whiteknuckle ride!
If your pulse rate isnt up, you arent having fun.
dunewalker wrote:
Playing the stock market now is like showing up at a gunfight with a 5 shot revolver and discovering that some of the bad guys are unholstering glocks...
Whats the option? I mean really. Let the cash sit? Its only going to take 1 or 2 more failures anywhere to bring the whole house down anyways. So you either take huge chances for huge profits NOW or play it safe get nothing and potentially end up with something (money) not worth the paper its printed on.
I'm taking a gamble that if my investments fail things will get so bad I frankly wont care about the money I lost. On the other hand, if things can be cobbled together and given a slight nudge to keep hobbling along for a few more years, a guy could come out sittin pretty nicely and then reinvest his earnings into things like silver and lead. _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Joined: May 19, 2005 Posts: 813 Location: Merry Ol' USA
Posted: Thu Jul 17, 2008 10:46 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Specop_007 wrote:
Whats the option? I mean really. Let the cash sit? Its only going to take 1 or 2 more failures anywhere to bring the whole house down anyways. So you either take huge chances for huge profits NOW or play it safe get nothing and potentially end up with something (money) not worth the paper its printed on.
I'm taking a gamble that if my investments fail things will get so bad I frankly wont care about the money I lost. On the other hand, if things can be cobbled together and given a slight nudge to keep hobbling along for a few more years, a guy could come out sittin pretty nicely and then reinvest his earnings into things like silver and lead.
I like your thinking. Can't help but think that a guy with Calvin & Hobbes as an Avatar is probably pretty smart anyways... _________________ After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
Posted: Thu Jul 17, 2008 11:22 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Specop_007 said:
Quote:
Bought into WM Tuesday morning. So far I'm up over 25% on it. Picked up UYG this morning.
Quote:
Reuters
Wachovia Securities raided in auction rate probe
Thursday July 17, 11:57 am ET
By Carey Gillam
KANSAS CITY, Missouri (Reuters) - Securities regulators from several U.S. states raided the St. Louis headquarters of Wachovia Securities on Thursday as part of a broad investigation into questionable practices involving auction rate securities, Missouri officials said.
Joined: May 20, 2008 Posts: 336 Location: Tennessee
Posted: Thu Jul 17, 2008 12:49 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Armageddon's quote about the major mortgages cease conducting any kind of workouts or negotiations... has hit close to our family. My brother-in-law has been really struggling with his business but has managed to keep his house payments current until this last month-he is just 1 month late and he just got a notice of foreclosure-end of story-no options, etc. He also lives in an area with one of the nation's highest foreclosure rates so I don't he could sell his house quickly. I watched Bernanke's testimony on Cspan last night, he talks like a very nervous person, I don't know if that is just how he presents himself or he maybe needing to call "Dr. Phil" real soon. I also agree he looks very tired. Just when you think your job is bad-it could be worse-you could have Bernanke's job...
Posted: Thu Jul 17, 2008 12:59 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
He might as well stay where he is. If this rumour turns out to be true, it could be years before an eviction order is enforced. Who is going to go on a hiring spree to do it? _________________ Volatility. When life isn't exciting enough.
Posted: Thu Jul 17, 2008 1:05 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
shortonoil wrote:
Specop_007 said:
Quote:
Bought into WM Tuesday morning. So far I'm up over 25% on it. Picked up UYG this morning.
Quote:
Reuters
Wachovia Securities raided in auction rate probe
Thursday July 17, 11:57 am ET
By Carey Gillam
KANSAS CITY, Missouri (Reuters) - Securities regulators from several U.S. states raided the St. Louis headquarters of Wachovia Securities on Thursday as part of a broad investigation into questionable practices involving auction rate securities, Missouri officials said.
I hope you pigged that 25% piece of cake real quickly. Otherwise, it is going to choke you to death!
The market seems unconcerned by this.
$4.98 $0.45 up 9.93% _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Joined: May 20, 2008 Posts: 336 Location: Tennessee
Posted: Thu Jul 17, 2008 2:38 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
He really doesn't have much choice at this point. Him and his wife have health problems (wife status post cancer treatment) and can't afford to lose their private health insurance. They also have two children. His backup plan will probably be us until they can regroup and get on their feet. They know our door is always open and we will move them if needed-good thing I've been putting up alot of food....
Posted: Thu Jul 17, 2008 3:37 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
JP Morgan’s Dimon: Prime Mortgages Look “Terrible”
Quote:
Part of that weak economic outlook can clearly be attributed to mortgages. In a surprisingly short conference call with analysts, Dimon suggested that losses in JP Morgan’s prime mortgage book could triple in the foreseeable future as the credit mess moves out of subprime and into Alt-A and jumbo loans.
Quote:
Home equity loans are also proving to be problematic; JP Morgan holds $95.1 billion in the category, and saw net charge-offs rise to $511 million in Q2 from $447 one quarter earlier. High CLTV seconds in particular are “performing poorly,” according to the company’s investor presentation.
This mess is definitely deteriorating. It has become self reinforcing as housing plunges,
equity goes down, people default which pushes prices lower.
J.P. Morgan’s profit dropped 53% last year. Many smaller banks have reached insolvency. Just like a positive feed back system in an electronic circuit, if not shut down, it will heat up until it burns up.
Posted: Thu Jul 17, 2008 8:15 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Quote:
Merrill Lynch Posts Fourth Straight Quarterly Loss (Update2)
By Josh Fineman and Bradley Keoun
July 17 (Bloomberg) -- Merrill Lynch & Co., the third- biggest U.S. securities firm, reported a wider-than-forecast quarterly loss as the credit contraction saddled the company with $9.7 billion of writedowns.
Moody's Investors Service cut Merrill's credit rating and the firm's shares fell after it posted the second-quarter net loss of $4.65 billion, or $4.97 a share. The results, which compared with earnings of $2.14 billion a year earlier, were worse than the most pessimistic analyst forecast in a survey by Bloomberg.
Quote:
Merrill shares fell as much as 7 percent after the close of regular trading in New York, after gaining almost 10 percent today. Analysts at Citigroup Inc., Oppenheimer & Co. and Wachovia Corp. had predicted the firm would book at least $5 billion of writedowns in the quarter
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