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: Fri Aug 08, 2008 12:53 am Post subject: UK bank crash begins proper?
Quote:
Royal Bank of Scotland (RBS) has posted a pre-tax loss of £691m during the first six months of 2008, the second-biggest loss in UK banking history.
Was this actually 'expected' or is this the start of a real dire crash?
September has always been the month that pundits said would be 'the' month it all really begins. Is this a precursor?
anyone know?
BBC News _________________ http://www.youtube.com/watch?v=xSFLSTb5KfU
Joined: Dec 04, 2004 Posts: 2415 Location: perpetual state of exhaustion
Posted: Fri Aug 08, 2008 5:14 am Post subject: Re: UK bank crash begins proper?
CIBC posted a loss of 5 billion last year, a few million might not make as big an impact as you'd think. and What kind of loss is it? Does it really put them in the red or are they just saying they made 691M less than this quater last year?
Posted: Fri Aug 08, 2008 2:11 pm Post subject: Re: UK bank crash begins proper?
No, it does not begin proper.
The worst of it is up to five years away when the housing market bottoms and losses on BTL implosions and construction financing are realised. I expect the next 6-12 months will see the collapse of B&B, the takeover of A&L completed, and maybe a couple of building societies imploding. But the worst is not even going to be in 2009. You have to understand our real estate bubble is lagging that of the US by 18 months and our exposure to the US is indirect, via bonds, insurance and the like. So there is a bit of lag while the mess over here gets going.
The lead-in will be considerably slower too. We simply do not have timebombs like pay option ARMs, mass take-up of home equity ATMs, or anything like that. Defaults will be linked to rising unemployment and falling incomes, not so much the loan programmes themselves instantly rendering half the buyers unable to meet the new payments. It is a more traditional, slower process. _________________ Volatility. When life isn't exciting enough.
Joined: Dec 06, 2005 Posts: 887 Location: Stopped at the border.
Posted: Mon Aug 11, 2008 9:03 am Post subject: Re: UK bank crash begins proper?
The UK is going to be dependent upon what the B of E does. Everyone there essentially, even if they are fixed for a period of time, has an adjustable rate mortgage. If rates go to 7 or 8 percent because of a falling pound and rising prices, then watch out below. If house prices had not risen in such an uncontrolled fashion, if people had kept the the Nigel Lawson crash in mind, then maybe there would be more slack, but prices are right there up against the line above which people cannot afford housing. _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
Posted: Mon Aug 11, 2008 10:10 am Post subject: Re: UK bank crash begins proper?
Twilight said:
Quote:
No, it does not begin proper.
There is a huge exposure to US garbage showing up world wide; it extends from the Japanese holding 1/3 of all CDO issued, to China’s stash of MBS. Considering the long tradition of US, British banking evolvement (remember, it was British banks that build US railroads in the 1800s) to image that the UK banking system is somehow isolated from the US system is at best disingenuous, if not an out right statement of denial.
The US system is now technically insolvent, and heading toward additional losses of 2 to 3 trillion $. The FDIC has earmarked 90 banks as likely to fail, and Roubini has stated that as many as seven hundred are likely to go bottom up.
When the bottom falls out in the US, the wash of defaulting CDS, MBS, CDO, ARB, corporate junk, and crashing treasuries will create a tsunami that will wash over the top of those small British Isles.
Joined: Aug 24, 2005 Posts: 442 Location: Costa Geriatrica, Spain
Posted: Mon Aug 11, 2008 10:55 am Post subject: Re: UK bank crash begins proper?
shortonoil wrote:
The US system is now technically insolvent, and heading toward additional losses of 2 to 3 trillion $. The FDIC has earmarked 90 banks as likely to fail, and Roubini has stated that as many as seven hundred are likely to go bottom up.
The US financial sector might well be, but the US state certainly isn't . It has considerable assets, far more than it owes. The situation could if needed be salvaged by selling Wyoming to the Chinese (I jest, but you get the idea. the Russians did the same with Alaska when they needed a few bob. )
shortonoil wrote:
When the bottom falls out in the US, the wash of defaulting CDS, MBS, CDO, ARB, corporate junk, and crashing treasuries will create a tsunami that will wash over the top of those small British Isles.
As a worst case scenario, The Treasury, the FED and after a prolonged bout of cannibalism, JP Morgan, might well end up as last men standing. If Treasuries default that would be Armageddon. As the state always does anything necessary to protect its own existence, that seems like a very low probability event.
Posted: Mon Aug 11, 2008 3:54 pm Post subject: Re: UK bank crash begins proper?
skeptik said:
Quote:
The US financial sector might well be, but the US state certainly isn't. It has considerable assets, far more than it owes. The situation could if needed be salvaged by selling Wyoming to the Chinese (I jest, but you get the idea. the Russians did the same with Alaska when they needed a few bob. )
The world’s economies have been growing for the last two centuries. They have been growing because of the wide use of fossil fuels. These new fuels: coal, natural gas and oil have provide the energy to advance the expansion we have witnessed.
This historically unprecedented growth was based on expansion that was possible by currency systems that could also expand with the growing energy supply. These currency systems were debt based fiat currencies.
Debt based fiat currencies have one Achilles Heal; they must constantly expand to exist. Since the debt that was previously acquired must be serviced, new and growing debt must constantly come into existence to allow for the servicing of the old debt. This is not new information, this problem with these currencies has been discussed by scholars for at least two centuries.
Without a functioning currency system there is no economy beyond simple barter. There is certainly no advanced global technological economy. The advent of Peak Oil means that the currency systems we have used for the last two centuries are no longer workable. The declining energy contribution of fossil fuels equates to falling growth and falling debt accumulation. Thus, a currency that is no longer sustainable.
The present world wide credit crunch is a ramification of a world economy that is contracting. The massive debt acquired in prior years can no longer be serviced. We know it is contracting because the world’s energy supply is contracting. The world’s central banks are now trying to overcome this contraction by printing more currency. It is an excise in futility; they are merely providing more currency to a base of declining wealth. They are just further debasing their currencies.
The coming world wide economic decline is not only a slow down in the movement of goods and services, it is a collapse of the very means that we use to manage that trade. It is a collapse of the monetary systems we use to trade with.
The “US state” that you refer to above is not a state without its currency, and that is coming to an end. The ramifications of PO are much greater than usually granted. Not only will there be fewer hydrocarbons to buy, there will be fewer means to buy them with.
The “state’s” refusal to acknowledge PO has many facets. The primary one, may be, that they know that they have no way to salvage their currency!
Posted: Tue Aug 12, 2008 9:45 am Post subject: Re: UK bank crash begins proper?
Gazzatrone said:
Quote:
substitute loss in millions with profits in billions.
With leverage of 20:1 or more, a few millions is all it takes to wipe out a bank’s or hedge fund’s entire capital position.
The entire world’s financial system is leveraged to the tune $1000 trillion. With the world’s economy contracting and scheduled to keep contracting, this is a recipe for disaster!
Joined: Sep 25, 2004 Posts: 4723 Location: Boston, MA
Posted: Tue Aug 12, 2008 10:19 am Post subject: Re: UK bank crash begins proper?
skeptik is right. The Iron Law of Bureaucracy is one of the fundamental laws of the universe.
All organizations exist in order to perpetuate their own existence. The Federal/State/Local governments of the United States are no different.
The currency, the electric grid, and the food transportation network must continue to function in order for the government to function. These will be the last things to go (assuming we are even headed for a total crash which seems unlikely but that's a discussion for another day). _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Tue Aug 12, 2008 10:49 am Post subject: Re: UK bank crash begins proper?
Tyler_JC said:
Quote:
skeptik is right. The Iron Law of Bureaucracy is one of the fundamental laws of the universe.
All organizations exist in order to perpetuate their own existence. The Federal/State/Local governments of the United States are no different.
The currency, the electric grid, and the food transportation network must continue to function in order for the government to function. These will be the last things to go (assuming we are even headed for a total crash which seems unlikely but that's a discussion for another day).
The electrical grid - a lot of it will continue to function in some manner; food distribution will also limp along (although Asia will starve, and the Western world is going to relearn the meaning of hunger). The currency - is a dead man walking.
There is no way that a debt based fiat currency can exist for long in a Post Peak world. The deficiencies of this type of currency has been thoroughly discussed for two centuries, and its logic is iron clad.
"Paper money eventually returns to its intrinsic value: zero." --Voltaire 1761
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