[Gebari]

From one of the most respected business journalists in Britain. He's been right many times in the past. It's rather worrying seeing such doom from such a person.

link

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

[Revi]

Really really scary post! Kudos!

Here's an interesting bit from it:

"The European Central Bank – which raised rates into the teeth of the crisis in July – has played a shockingly destructive role in this enveloping slump. Its growth predictions this year have been, and still are, delusional. Neglecting its global role, it has vastly complicated the fire-fighting efforts of Washington.

It could have offered “cover” to the US Federal Reserve this spring when Ben Bernanke was forced by events to slash rates to 2pc. It could at least have signalled an end to monetary tightening. That is how an ally ought to behave.

Instead, it stuck maniacally to its Gothic script, with equally unhappy consequences for both sides of the Atlantic, as well as for China, Japan, and India. The euro rocketed yet further, which it turn set off an oil shock as crude metamorphosed into an anti-dollar with leverage.

The ECB policy was self-defeating, even on its own terms. It merely drove headline inflation even higher, while deeper forces of underlying debt deflation pulled the real economies of Germany, Italy, France, and Spain into a recessionary vortex. "

[shady28]

More kudos +++

The EU bankers have been arrogant and in an extreme case of denial for the past year.

This is the telling point in the article :

"The lesson of the 1930s is that any country trying to reflate in isolation will be punished. The crisis will ricochet from one economy to another until every one is crippled. We are seeing it play again in this drama as our leaders fail to rise above their narrow, parochial agendas.

...

But the risk of a dollar collapse is one for the distant future. Right now the world faces the opposite problem. There is a wild scramble for dollars as a $10 trillion pyramid of global lending based on dollar balance sheets “delevers” with a vengeance.

This is a “short squeeze” on those who have used the dollar for a vast global carry trade. International banks are facing margin calls on their dollar leverage. It is why the Fed is having to provide $1.25 trillion in dollar liquidity for the entire global system, according to estimates by Brad Setser from the Center for Geoeconomic Studies. "

[Rubin_Flagg]

Asia will open lower today followed by Europe and then NA. This is the beginning of the global collapse. What will arise in its place?

[DaleFromCalgary]

"we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars."

Let's check back next month and see how hysterical this sounds. After reading Orlov's REINVENTING COLLAPSE, which pointed out that gold is useless in economic disaster, I have been stocking up on canned food and private-equity oil company shares.

As others have mentioned elsewhere, clear your decks and pay off any debt.

[DantesPeak]

From one of the most respected business journalists in Britain. He's been right many times in the past. It's rather worrying seeing such doom from such a person. link

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

While I substantially agree with what he says, I am not sure what he is advocating - except providing more 'liquidity' to the banking system. Didn't the ECB provide about $500 billion at year end 2007 for about a month, which at the time was a much more agressive move than the Fed? Granted the Fed in recent weeks exceeded all prior records in monetary expansion, and has exceeded the ECB, but central bankers in euroland are now caving in to monetary expansion faster than ever before.

[aldente]

Instead, it stuck maniacally to its Gothic script, with equally unhappy consequences for both sides of the Atlantic, as well as for China, Japan, and India.

Ironically all this looks like bad communication, sort of like what happens to every relationship after a decade at the latest.

[Mo_Oil_Dave]

I have been seeing a particular phrase around some assorted fringe financial newsletter on the net. Then I found this.

This from a friend in Atlanta with strong banking connections: "Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading "WE'RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME."

This quote is from the October 2 2008 "Hat trick letter" written by Jim willie CB. It is as close to beeing sourced as I have seen so far.

Maybe there is something to it, or not. The rest of the letter is an interesting read.

David

[americandream]

From one of the most respected business journalists in Britain. He's been right many times in the past. It's rather worrying seeing such doom from such a person. link

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

While I substantially agree with what he says, I am not sure what he is advocating - except providing more 'liquidity' to the banking system. Didn't the ECB provide about $500 billion at year end 2007 for about a month, which at the time was a much more agressive move than the Fed? Granted the Fed in recent weeks exceeded all prior records in monetary expansion, and has exceeded the ECB, but central bankers in euroland are now caving in to monetary expansion faster than a house of cards.

This dwang Pilchard-Evans is a nutjob..he keeps advocating the same ol shit shovelling free market agenda like the addict he is. Dumbass knows the system is in tank mode but can't really bring hismelf to say, we were wrong.

[Eli]

Even if everyone acts in concert there is no way to stop the implosion of the totally unregulated CDS market.

[Cashmere]

This dwang Pilchard-Evans is a nutjob..he keeps advocating the same ol crap shovelling free market agenda like the addict he is. Dumbass knows the system is in tank mode but can't really bring hismelf to say, we were wrong.

What? Are you saying that the free market caused any of this?

If you are, please read up on who created Fannie and Freddie, on who created the Federal Reserve, and on who has been passing all of the recent government bail outs.

[Buggy]

i want my mommy.

[eastbay]

i want my mommy.

Now THAT is Member Quote material!!

[the48thronin]

I stated on the xmradio show I appear on almost daily several weeks ago that the global economic collapse was already happening and could not now be prevented. The size of the global economy did not prevent it's fall simply protracted the time duration of it's occurrence before it was noticed.

The host of the show and I have had many conversations about PO and the economic disaster resulting from "derivatives" of mortgage bundles (the latest derivative fad). The sheer amount of these derivatives is staggering. The world paper poker game is over everyone lost!

Welcome to my world Pilchard-Evans! I am sorry to meet you here!

During the past week, we have tipped over the edge, into the middle of the abyss. Systemic collapse is in full train. The Netherlands has just rushed through a second, more sweeping nationalisation of Fortis. Ireland and Greece have had to rescue all their banks. Iceland is facing an Argentine denouement.
The US commercial paper market is closed. It shrank $95bn last week, and has lost $208bn in three weeks. The interbank lending market has seized up. There are almost no bids. It is a ghost market. Healthy companies cannot roll over debt. Some will have to sack staff today to stave off default.

As the unflappable Warren Buffett puts it, the credit freeze is “sucking blood” out of the economy. “In my adult lifetime, I don’t think I’ve ever seen people as fearful,” he said.
We are fast approaching the point of no return. The only way out of this calamitous descent is “shock and awe” on a global scale, and even that may not be enough.

[Snowrunner]

If you are, please read up on who created Fannie and Freddie, on who created the Federal Reserve, and on who has been passing all of the recent government bail outs.

They may have been created by the Government, but it wasn't the Government that played them. The lack of (Government) oversight let to the bankers gaming the system to their advantage until they brought down the entire house, forgetting that they are living in it too.

As for the ECB, I still think that their behaviour was a lot more consistent and far less damaging than the article makes it out to be, but it's interesting to see that the witch hunt has started, wonder who the next target is going to be.

[Cashmere]

If you are, please read up on who created Fannie and Freddie, on who created the Federal Reserve, and on who has been passing all of the recent government bail outs.

They may have been created by the Government, but it wasn't the Government that played them. The lack of (Government) oversight let to the bankers gaming the system to their advantage until they brought down the entire house, forgetting that they are living in it too.

Ridiculous.

You can't seriously dismiss the following logic:

Govt. sets up fannie and freddie and sets the "conforming loan" limits and conditions under which banks can dump mortgages on F/F.

Banks, now able to originate loans for which they will have ZERO RISK, originate very RISKY loans and dump them on FF.

Repeat until the problem is so big that it becomes the current problem.

Any thought whatsoever that the government isn't close to 100% responsible for this mess is ridiculous.

The government set up the artificial, non-market system of risk dumping.

The Banks did exactly as what would be predicted.

The only thing more frightening, financially, than the current crisis is the belief by a vocal socialist contingent that the problem here was not enough government.

Seriously. It's like watching a raging jealous boyfriend beat his girlfriend to death with a bat and then exclaim, "this happened because the guy had too little testosterone - what we need to do is give this guy more testosterone so this won't happen again."

You want more government dude?

You're going to f-cking get it - you and me both, right up are arses.

[firefly]

Really really scary post! Kudos!

Here's an interesting bit from it:

"The European Central Bank – which raised rates into the teeth of the crisis in July – has played a shockingly destructive role in this enveloping slump. Its growth predictions this year have been, and still are, delusional. Neglecting its global role, it has vastly complicated the fire-fighting efforts of Washington.

It could have offered “cover” to the US Federal Reserve this spring when Ben Bernanke was forced by events to slash rates to 2pc. It could at least have signalled an end to monetary tightening. That is how an ally ought to behave.

Instead, it stuck maniacally to its Gothic script, with equally unhappy consequences for both sides of the Atlantic, as well as for China, Japan, and India. The euro rocketed yet further, which it turn set off an oil shock as crude metamorphosed into an anti-dollar with leverage.

The ECB policy was self-defeating, even on its own terms. It merely drove headline inflation even higher, while deeper forces of underlying debt deflation pulled the real economies of Germany, Italy, France, and Spain into a recessionary vortex. "

You are half right.

1. Yes it is gothic in origin.
2. They did it on POIPOSE.

get it? Crash time is here!
On Poipose!
(slap!)
OnPOIPOSE!
(slap)
Listen to me, it was planned.
(slap,slap)
Wake up! It's crash time!
(Shake shake shake)
Why won't anyone listen to me? *SOB*

[Snowrunner]

Ridiculous.

You can't seriously dismiss the following logic:

Govt. sets up fannie and freddie and sets the "conforming loan" limits and conditions under which banks can dump mortgages on F/F.

Banks, now able to originate loans for which they will have ZERO RISK, originate very RISKY loans and dump them on FF.

Repeat until the problem is so big that it becomes the current problem.

Any thought whatsoever that the government isn't close to 100% responsible for this mess is ridiculous.

The government set up the artificial, non-market system of risk dumping.

The Banks did exactly as what would be predicted.

Okay, I would have to re-read my F&F history, but as I understand it that was a change that was brought in in the '70s, the original set up was a different one.

The only thing more frightening, financially, than the current crisis is the belief by a vocal socialist contingent that the problem here was not enough government.

So what? You think there was enough oversight? Market rules were loosened quite a bit over the last 30 years, you are really claiming that this had nothing to do with it?

Seriously. It's like watching a raging jealous boyfriend beat his girlfriend to death with a bat and then exclaim, "this happened because the guy had too little testosterone - what we need to do is give this guy more testosterone so this won't happen again."

Contrary to popular opinion a lack of testosterone actually can cause depression and rage issues, not so much too much (that just leads to small balls).

You want more government dude?

No, I want an EFFICENT Government, in this case meaning a Government controlled by the citizens and working for them. If I'd be Emperor of the world my first act would be to take all the Lobbyists out behind the Barn and shoot them a few dozen times to make sure they are dead.

You're going to f-cking get it - you and me both, right up are arses.

You mean the place where all the bankers have stuck all of their stuff already? Could get crowded in there.

[frankthetank]

Can someone explain where this leads us? Deflation/Inflation/??? ...do the grocery stores go empty? Will credit cards stop working? Will banks have no money? Will gas go to $1.00 gallon? I just don't understand where we are headed..

[Roccland]

Relax - we have 15 years...

All is well.