US Financial problems ramping up - bank run?

skeptik · Post by **skeptik** » 15 Mar 2008, 21:58

Totally_Baffled wrote: OK Understood.

Where does the $400 billion come from?

Presumably it doesnt come from the money markets or the tax payer?

er...sadly that would take me far too long. Suggest you read up:

http://en.wikipedia.org/wiki/Federal_reserve

then this article
http://www.informationclearinghouse.inf ... e19531.htm

noting particularly this comment, which is now out of date

"Counting the currency swaps with the foreign central banks, the Fed has now committed more than half of its combined securities and loan portfolio of $832 billion, Lou Crandall, chief economist for Wrightson ICAP noted. 'The Fed won't have run completely out of ammunition after these operations, but it is reaching deeper into its balance sheet than before."

I read somewhere today that it's now down to about $200 billion. Dont quote me. Thats just a rough back of a fag packet calculation made by somebody in a financial forum.

Papillon · Post by **Papillon** » 16 Mar 2008, 07:32

MacG wrote:
A bunch of people are manning various controls and levers, making all efforts to pretend that they control things, but in reality there is nobody at the helm. There might not even be a helm.

"The lights are on Ted, but there's nobody home"

Father Dougal (from 'Father Ted')

RenewableCandy · Post by **RenewableCandy** » 16 Mar 2008, 13:32

skeptik wrote:...
I read somewhere today that it's now down to about $200 billion. Dont quote me. Thats just a rough back of a fag packet calculation made by somebody in a financial forum.

I made a back of the fag-packet calculation too, the answer was, erm, "Smoking Kills"

danza · Post by **danza** » 16 Mar 2008, 14:37

The collapse of a big bank would probably be the result of some kind of struggle between oligarchs, or a smokescreen to allow other manipulations. It's difficult to imagine how anyone would allow a bank collapse when money can be produced and infused by just touching a keyboard.

But for how long with no real negative economic consequences? And when does a bank collapse? e.g barings or if it cut staff by 60+% and lost 80% of its share value and got taken over?

RenewableCandy · Post by **RenewableCandy** » 16 Mar 2008, 18:41

danza wrote:
The collapse of a big bank would probably be the result of some kind of struggle between oligarchs, or a smokescreen to allow other manipulations. It's difficult to imagine how anyone would allow a bank collapse when money can be produced and infused by just touching a keyboard.
But for how long with no real negative economic consequences? And when does a bank collapse? e.g barings or if it cut staff by 60+% and lost 80% of its share value and got taken over?

At this rate there might not be anybody left to do the taking-over. The banks might be facing an"All go together when we go" scenario!

Having said that, it's a pet theory/hope of mine that the "ethical banking" sector (Triodos et al.) will somehow have passed all this by...

snow hope · Post by **snow hope** » 16 Mar 2008, 19:44

Things are looking scary. They are looking like they could go downhill fast. I am almost at the point of deciding I need to go and do some serious stocking up of food.....

I hate all this shit, it makes me feel very uncomfortable.......

Andy Hunt · Post by **Andy Hunt** » 16 Mar 2008, 19:56

You would have thought that that authors of the system would be completely aware of its fatal flaw, and already have plans in place for what comes next . . .

MacG · Post by **MacG** » 16 Mar 2008, 19:58

snow hope wrote:Things are looking scary. They are looking like they could go downhill fast. I am almost at the point of deciding I need to go and do some serious stocking up of food.....

I hate all this shit, it makes me feel very uncomfortable.......

I hate it to. This kind of instability and uncertainty is the strongest argument I can find against the NWO-conspiracy crowd - how on EARTH could a conspiracy hope to contain a chaotic unraveling of the banking Ponzi-scheme?

If I was the head of a big US bank or had a name like "Rockefeller" I would try to avoid chaos at just about ANY cost if I could.

The world is just to complex and interdependent nowdays, nobody -except a megalomaniac madman- would think that they could contain an unraveling.

JohnB · Post by **JohnB** » 16 Mar 2008, 19:59

Andy Hunt wrote:You would have thought that that authors of the system would be completely aware of its fatal flaw, and already have plans in place for what comes next . . .

They probably have, for themselves. The original authors of the system are long dead anyway.

Andy Hunt · Post by **Andy Hunt** » 16 Mar 2008, 20:00

MacG wrote:nobody -except a megalomaniac madman- would think that they could contain an unraveling.

Hmmm . . . strangely enough, I can see future leaders running for office on exactly that ticket. Who would vote in someone who said otherwise?

skeptik · Post by **skeptik** » 16 Mar 2008, 22:40

Andy Hunt wrote:You would have thought that that authors of the system would be completely aware of its fatal flaw, and already have plans in place for what comes next . . .

Apparently not. Bernanke spent a lot of time post August last year getting up to speed on how the derivatives markets operate.

According to a recent congressional hearing of the Financial Services Committee which I watched a few nights ago, Greenspan (I.e the FED) was authorised by Congress to regulate the non-banking 'money creation' sector but steadfastly refused to do so.

Nobody authored (designed) the current system from scratch - it evolved.

skeptik · Post by **skeptik** » 16 Mar 2008, 22:43

Will the FED run out of Money?
http://www.businessspectator.com.au/bs. ... enDocument

'But one danger of setting a bailout precedent is that the Fed?s tank isn?t full enough to help everyone who wants to tap it."

fifthcolumn · Post by **fifthcolumn** » 17 Mar 2008, 12:00

MacG wrote: A bunch of people are manning various controls and levers, making all efforts to pretend that they control things, but in reality there is nobody at the helm. There might not even be a helm.

I think it's actually a bit worse than you think.

There are people at the helm but they are interested in profiting from scarcity rather than interested in what's best for us.

Thus it's not a stretch of the imagination to say that if it's a lot of effort and cost to fix the problems we're in and there is a risk it might not work as compared to no effort to let us go off the cliff and they make a bet on the other side and profit handsomely then which do you think they would choose?

MacG · Post by **MacG** » 17 Mar 2008, 12:29

fifthcolumn wrote:
MacG wrote: A bunch of people are manning various controls and levers, making all efforts to pretend that they control things, but in reality there is nobody at the helm. There might not even be a helm.
I think it's actually a bit worse than you think.

There are people at the helm but they are interested in profiting from scarcity rather than interested in what's best for us.

Thus it's not a stretch of the imagination to say that if it's a lot of effort and cost to fix the problems we're in and there is a risk it might not work as compared to no effort to let us go off the cliff and they make a bet on the other side and profit handsomely then which do you think they would choose?

Yea, sure, greed and egoism is there, that's for sure, and the system is very corrupt already, but I don't think that some kind of "elites" are planning for a collapse. The "elites" need the system more than anyone else - I have met enough of them to know that they are pretty helpless in the real world. Many of them can hardly wipe their own a**es. Their positions in the system is completely built on impressions of social status, and that impression can disappear in mere minutes.

The prime target for any capitalist worth his weight in brass knuckles is probably not masses of poor people, but other capitalists.

I think we are dealing more with "mechanisms" than explicit "plans".

As long as the best profits are made by expanding the system and maintaining law and order, Charles (Big Chuck) Darwin will favor those who take part in that activity, and he will punish those who cannibalize on the system.

As soon as the system cant be expanded anymore, the best profits could very well be made by asset stripping and cannibalizing, and good old Darwin will favor those who strip the system. Serious asset stripping require that there are SOME actors who are still in expansion and can buy the stripped stuff.

The big joker in this game is the social aspects of mankind - we seem to be very social animals who desire to live in societies, and when a society becomes dysfunctional, all possible strange and unpredictable things start to happen.

RenewableCandy · Post by **RenewableCandy** » 17 Mar 2008, 13:22

skeptik wrote:Will the FED run out of Money?
http://www.businessspectator.com.au/bs. ... enDocument

'But one danger of setting a bailout precedent is that the Fed?s tank isn?t full enough to help everyone who wants to tap it."

Nice analogy! Do you think they meant to choose one that was quite so apt??