|
|
Bank Failures Increase
The Economist: A credit downturn should be familiar territory for banks. Think again The credit crunch has been an alien landscape for many banks. Exotic products, new accounting rules and an unprecedented liquidity freeze have left them groping for handholds. The terrain is gradually changing, as attention switches away from falls in the market value of securities and towards actual credit losses. Citigroup expects to see lower write-downs, but higher credit losses, when it announces its second-quarter results in July. So far, I have been unable to detect any 'unfamiliar features' in this present banking collapse. True, the names of things have changed. The tools used to pull the scams and Ponzi schemes have changed. The clever dodges and goofy schemes that were hatched seem new to the young people who were born after the Great Depression. But in essence, there is literally nothing new under the sun. Except for perhaps the totally insane creation of the Derivatives Beast. Even that isn't all that new. The way it was nurtured and fed is old fashioned. But the elements that supported the creation of this dangerous and useless beast are very ancient. And the Security and Exchange Commission was created to prevent exactly this sort of thing being launched. After going through news this week, it is obvious that several things are happening at the same time: the entire banking system of the planet earth has been wrecked by the crazy over-expansion of credit from top to bottom, global free trade has finally hit the wall since it was entirely predicated on the creation of too much credit and there is no international currency concert of powers that is functional anymore. We are in a transition stage very similar to the one we went through when the British Empire went bankrupt at the same time the German Empire was on the skids. This is why the similarities to the Great Depression are so strong. This raises obvious fears and concerns. How do we protect ourselves from a global banking/trade meltdown when this is caused by a collapsing empire dragging down everything in its wake? For let us be frank: we are watching a transfer of power from England and America to Asians. This includes Russia for Russia's vast bulk is actually in Asia or the former Mongol Imperial areas of influence. All of the planet will see difficulties as things devolve but at the end of the day, the Asian nations will be in control of the Seven Seas and international trade rules and regulations. Europe is so frightened of this, the European Union decided to grow very, very fast so as to provide a united front to Asia. But this is obviously failing and is looking more and more like the Austro-Hungarian Empire which replaced the dead Holy Roman Empire. A mighty, seething mess of languages, religions, ethnic and tribal conflicts, a very bloody history of warfare between all of these, Europe can't be forged into an Empire strong enough to challenge the Han Chinese imperium. The recent series of failures to convince individual European countries to resign their sovereignty has hit a rock in Ireland and is encouraging others to resist this urge to merge. Even in England, the people there are resisting their own rulers in this regard. There is very little support for the concept of merging sovereignty with Germany and France, two ancient foes. Any more than the Irish or the Scots want to be merged with England. The banking business in the news today is connected to all this! The smooth functioning of any empire is based on sound banking principles. All empires collapse when they dump this for Funny Money making. ECB Is Martian, Fed Venusian, Says Deutsche Bank (Bloomberg) -- The European Central Bank and the Federal Reserve are reacting differently to the threat of faster inflation, with policy makers in Europe likely to backtrack after raising interest rates, according to Deutsche Bank AG economists. As usual, this article can't look at everything at once. The European Union's central bankers are raising rates? But so is China! And this article, like so many I see, leaves out the enablers of the world's biggest credit bubble: Japan! The inability to see Japan in this mess is nearly universal. This is, I am guessing, due to all the bankers, financiers and governments praying to continue this credit bubble to infinity! And to do this, they need to keep the Japanese carry trade moving! I see this all over the place: the desire to create liquidity is very intense. There is no stomach for mopping up the mess. The central bankers of Europe are trying to squelch the excessive housing market bubble's growth but NOT stop the buy-up/buy-out mania. They want that to continue while clipping consumer debt increases. The trick here is to have 'liquidity' while preventing it from going to 'the wrong places.' And where does Europe want liquidity to go? To the US! They need the US to continue buying European goods. Asia wants this too. In fact, everyone wants the US to continue using easy credit. Japan, for example, provides nearly no credit to its own people. They can't make money saving money. They can't buy on time but must pay cash. They live in this depressed society that is cash and carry for them. But not for Americans! We get to go into debt. The American government and banking community would dearly love to keep this going, too. There is intense anxiety here about getting our consumers out of the house and shopping as irresponsibly as possible. This is why the US government is giving us these hand-outs that are timed carefully to keep injecting money into the system. This is why it is taking three months or more for the checks to be issued. Europe's bankers can't offer 0.5% loans because consumers will get their paws on this. So they raise rates. They figure, the big players will get their credit from Japan. The average consumer in Europe can't. The point here is, the dynamics in Japan and Europe are aimed at preventing consumer purchases as much as possible while both are intent on getting the US to do the exact opposite. So it isn't just that the US is 'Venus', the US is to keep up insane trade deficits that increase the industrial and financial powers of Europe and Japan! So there is no mystery here why Germany and France are pushing for a 'Martian' solution. This is a TRADE WAR as well as a financial war. American 'Meltdown' is the Reason for the Money Injection by Fortis BRUSSEL/AMSTERDAM (DFT) - Fortis expects a complete breakdown of the American financial markets within days or weeks. This explains, according to the bank insurer, the series of interventions on Thursday with the aim of strengthening themselves by € 8 billion. "We are ready at the last moment. The U.S. is doing much worse than we had thought," said Fortis chairman Maurice Lippens, who insists that CEO Votron shall not be replaced. Fortis expects bankruptcies among the 6,000 U.S. banks that have low coverage. "But the same goes also for Citigroup and General Motors, and thereby starts a complete meltdown in the U.S." This scathing article made the news in Europe and then the story was pulled. The 'Blog At The End Of The World' grabbed the story before it vanished. It talks frankly about the coming collapse of the entire US banking system. It is obvious that the entire system is bankrupt. Just like England papered over its bankruptcy after WWI and then again, after WWII, the US will try the same. The confusion that the collapse of England's banking entailed was made much worse by Germany also going down the drain, pulling all of Europe and then the world, down with it. 6,000 banks going under is no shock. Citigroup and General Motors struggle along but with even Toyota seeing a decline in sales, the downside of this retraction in manufacturing and trade will eventually destroy the US industries. Right now, we are exporting slightly more thanks to our weak dollar/bad banking mess. But this is an illusion. For our trade deficit is, with these 'improvements' still half a trillion in the red a year. Totally unacceptable! Further Than Most Expect By Paul Lamont As we forecast last month, the regional banks have quickly brought about the next round of financial troubles. We expect a large decline in the broader stock market to be the next major issue. The Royal Bank of Scotland, Morgan Stanley, Barclays, and even the Bank of International Settlements (the central bank's central bank) have issued financial storm warnings. We referenced the Bank of International Settlements (BIS) last July in warning of the credit crunch last year. According to the Telegraph, they are now specifically warning of deflation. *snip* Shortly after the appointment of Chairman Ben Bernanke, 'expert' on the Great Depression, the Federal Reserve retired the reporting of M3. M3 is the broadest measurement of the money supply. Conspiracy theorists (usually gold bugs) believe that the Fed hides M3 so that it can 'print money' and secretly monetize the debts of the banking system. So John Williams (Shadowstats.com) began keeping track of M3 himself. Recently, money supply observers have been surprised: his measurement of M3 growth is slowing down. Instead of hiding 'money printing', the Fed is really covering up the extreme slowing in the growth of money. The velocity of money has slowed. No new real estate loans, no new money. To support this case, the annualized growth in loans and investments held at commercial banks has gone negative as well. Mr. Lamont goes on to suggest the way to protect oneself is to...get this....buy US Treasuries! Eh? What? HAHAHA. With his organization as the conduit so they can clip some profits for themselves! Just as all articles written by gold sellers end with the same 'solution' many of the analysts trying to tell us what is going on want us to buy something so these same people can make a profit. The startling feature of all mega-banking/imperial collapses is this: there is no easy escape from the mess. None. Moving out of a country doesn't work, for example. Many an Englishman moved to say, Africa or Asia, the Pacific or the US or South America to escape the mess of that collapse. Didn't spare them from WWII or other hazards. Money that is parked in various 'safe' places gets hunted down by the demonic forces unleashed by the collapse of an empire and are destroyed. What survives is human spirit, the human ability to rebuild, the indomitable will to survive. Despair in the face of such forces is not a refuge, either. Facing the storm is far better and healthier. We know that many things will change in the future. The free ride the US was given via the generation of a huge, huge mountain of lending, will end. This huge lending/buying spree was very bad for us, socially, economically and emotionally. It caused more harm than good. When it ends, we will be better off, oddly enough. The wealth we must protect is our sanity, our ability to love and our need to be generous and kind to our neighbors. When the liquidators come calling. DAMIAN PALETTA Wall Street Journal In its role as receiver for failed banks, the FDIC acts as a SWAT team, playing equal parts secret agent, medical examiner, salesman and grief counselor. The first 48 hours are typically the most frantic, as the agency must turn a failed bank inside out and oversee its sale - or its orderly burial. Not only does the government operate in secret, they also lie about things. Should people be in a 'panic'? OF COURSE! Instead, we are muffled in cotton and a blanket of silence is pulled over this evolving mess. This is probably why the Belgium article was pulled. They were ordered to not create a banking panic! People panic when they realize their bankers were liars and con artists. The good people of this tiny town should be up in arms over what their 'local' bank did! And what did it do? This is a small town bank in MINNESOTA! In late April, Walker flew to Minneapolis to plot a strategy in case the bank failed. The FDIC knew First Integrity was in trouble because its capital reserves had evaporated, and the delinquent loans on its books more than doubled in 12 months. Many of the bad loans were tied to Florida real estate. The FDIC is still sorting through the bank's records and wouldn't elaborate. David Duhn, the former president of First Integrity, didn't return calls for comment. I remember the post-Great Depression laws. Local small banks had to work within severe geographical/financial restrictions. But when the US gave up the battle to protect the gold standard in the early 1970's, the banking system collapsed. To restart it, they changed all the rules and threw out many Great Depression restrictions. Usury laws were dumped and banks were allowed to expand across the nation and then the planet. Then, a blind eye was turned towards all those British Crown pirate coves. Banking slipped its leash and took off running in all directions. So we get the stupid sight of this tiny bank in the far north where bankers were supposed to be grumpy and careful and where the villagers assumed their bankers who knew them personally, was protecting their deposits....NO! Instead, these bankers were granting endless loans to FLORIDA???? Sight unseen, of course! No social networks, no connections. The bankers wanted profits. Now, the Feds move in to fix things by papering it over with tax-payer support systems that are going bankrupt! The US taxpayer ceased trying to pay for anything back when we dropped the gold peg. Now, the FDIC depends on no one noticing that it, too, has lost credibility. The FDIC itself is bankrupt. But if they pretend they are not, they can come in and reassure everyone that all their savings are protected. But this is a lie! For inflation is burning away all the value of these savings. And the false interest rates offered for these precious savings is false. Instead, we are forced to move savings into government bonds to get minimal protection. This, in turn, gives the government some money to continue running in the red. Now we go to this month's Bank of International Settlement's latest cri de coeur: A special commission was assembled that laid out the desire for basically, the same banking systems set up by Roosevelt after England and Germany's collapse. BIS REPORT: Principles for Sound Liquidity Risk Management and Supervision Principle 1: A bank is responsible for the sound management of liquidity risk. A bank should establish a robust liquidity risk management framework that ensures it maintains sufficient liquidity, including a cushion of unencumbered, high quality liquid assets, to withstand a range of stress events, including those involving the loss or impairment of both unsecured and secured funding sources. Supervisors should assess the adequacy of both a bank's liquidity risk management framework and its liquidity position and should take prompt action if a bank is deficient in either area in order to protect depositors and to limit potential damage to the financial system. The problem is, no bank ever does this. The need to make profits drives all banks into creating infinite loans because this makes them rich. The recent banking collapse in the West was due to bankers passing off these bad loans to other parties so they could cynically continue to churn out more loans! The regulators of banks will always be outsiders and this usually is a government of some sort. Governments can fail! As we see all too often. For the true fundamental basis of all systems is the people themselves. If a government is allowed to either run out of control or be corrupted by the bankers, systems fail. The financial houses and bankers of the West have thoroughly corrupted the US government. And the media has done a spiffy job of this, too! People have been propagandized to believe that DEBT IS GOOD and SAVINGS IS BAD. Even if they tell us to save, they really don't tell us. Examples abound! My favorite still is the push to convince people that they lose money if they pay off their mortgages. This is so unbelievably stupid. I have no mortgage on my property, thank the gods. For my husband's illness has wrecked both of our incomes. But we are free and clear. My family and friends who paid off their mortgages discover this wonderful thing: instead of dumping over $1000 a month into some banker's hands, they have $1000 in SAVINGS which they can invest in some fashion! Wow. What a concept! The media never mentions this 'windfall' when they tell people to go into debt and then use the mortgage to invest. This is very bad. I know a number of people who lost their homes doing this! The push to convince us all that debt improves our lives has been a very powerful force here. Debt is good for young families, for people beginning things. It is a terrible life-plan if one expects to be constantly in debt! The ethos of debt building has taken over our minds and has corrupted us to the point, we can't live any other way. We want more and more debt and are unwilling to even pretend to live within our means. Some people fear the BIS is a front of the international bankers and will 'take over' everything. Well, this happened already when the US decided to live totally off of credit and debts! The BIS is fearful we will go bankrupt. All the international bankers do not want us to go bankrupt. This is obvious. But they don't want us to be savers, either. This is the fearful 'Horns of Dilemma' which is what happens in the Cave of Wealth and Death when one gets to the center and finds the Minotaur waiting there to gouge everyone. Principle 13: A bank should publicly disclose information on a regular basis that enables market participants to make an informed judgement about the soundness of its liquidity risk management framework and liquidity position. The SEC and FDIC have been rendered nearly useless in preventing credit bubbles. This week, I went over random Federal Reserve speeches which clearly shows that the Fed knew its job was to PREVENT credit craziness. And the Fed would make occasional stabs at this. But not too many. Gradually, the effort to stop the flood of easy credit faded and by 1974, vanished. Volcker did make one frantic stab at this by hiking interest rates ruthlessly. Both he and President Carter were dumped for this. And the easy credit lunatics took over under Reagan. Clinton tried to stop this by balancing the budget and was nearly impeached for this. It wasn't the sex, stupid. It was the restrictions on credit growth. Clinton was replaced with free spending/wild credit building Bush and off the cliff it all went. The American people wanted this! Bush's easy money system was very popular. The idea we could go to war and have easy credit and wild spending was very popular. There is no banking system that can fight this force! It is purely political. When one person says, 'I will give you easy street' and another says, 'We have to work harder', guess who wins? The BIS knows perfectly well, there is great communication going on, by the way. Asking for more is useless if the 'communicators' are pirates, con artists and New World Order lunatics who want to have more money, not restrict money! The BIS has to look at its own masters to see who is ultimately at fault here. Financial derivatives 38. A bank should incorporate cash flows related to the repricing, exercise or maturity of financial derivatives contracts in its liquidity risk analysis, including the potential for counterparties to demand additional collateral in an event such as a decline in the bank's credit rating or creditworthiness or a decline in the price of the underlying asset. Timely confirmation of OTC derivatives transactions is fundamental to such analyses, because unconfirmed trades call into question the accuracy of a bank's measures of potential exposure. So, the BIS wants the wild gnomes in their golden chariots to stop chasing women around Mt. Olympus and take charge of the Derivatives Beast these gnomes created so they could tap into infinite money and have no risk? HAHAHA. It can't happen. Undoing this whole business is difficult but has to be done. The Derivatives Beast must be ANNIHILATED. For all it is is an infinity machine. And this always ends up destroying the very thing it supposed to protect: wealth. The fine talk here about 'call into question the accuracy..' business is all about secrecy, the occult and lying. Since all of this was set up in order to create infinite wealth for the Derivative Beast's owners, of course it is based on being able to hide things. A bank can run forever if they hide everything totally. Who needs honest accountants? They are too much like Libra. Danger: Open Trench BY FRANK BARBERA, CMT Things continue to take a dim turn for the worse, and it is a story that is getting more and more difficult to chronicle with each passing week. To the casual observer, the stock market is not doing well, the economy is not doing well, but perhaps there is still some ray of hope. Perhaps there won't be a recession, perhaps things will be getting better sometime soon. We sincerely wish we could be that hopeful, that detached from what is truly taking place. As an observer of the stock market, it is crucial to understand the environment within which one is attempting to operate. In order to do this, a strong dose of stone cold reality is needed. One cannot conveniently ignore facts, brush past unseemly data, and only look at the rosy side of the fence. To do so is suicide – an invitation to let Wall Street and the markets separate you from your hard earned money, not to mention what this could do to your client's accounts and their hard earned capital. This article has the graphs of a number of huge banks that clearly show all of them have fallen off the same cliff. It is a very informative article and we can see that this is a fundamental mess, not a specific problem. It is across the board, not confined to this manager or that bank officer making mistakes. It is obvious that bank profits that drive bank stocks upwards were actually bubbles that were unsustainable. Fed must prevent wage-price spiral: Lockhart (Reuters) - The Federal Reserve must "react decisively" to stop inflation pushing up wages, one of its top policy-makers said on Tuesday, dropping a clear hint about the possibility of interest-rate hikes ahead. As usual, the Fed 'fixes' these credit messes by forcing workers to eat all the pain, eat all the inflation and get nothing back. This is a great way to restore wealth to the upper classes. What about raising taxes on the obscene incomes and wealth of these weasels? Why do workers have to eat all the bad inflation effects? Executive incomes have risen at what? 30% a year during this bubble? And above 10% a year since Reagan's tax cuts for the rich? The rich are richer and the workers, after inflation, have seen their wages drop ALREADY? So of course, the Fed attacks the workers, not the multi-million bonuses of the bosses. As I said, all of this is political. The solution lies in the hands of the workers. Will they put up with this? |
 |
 |
We are almost at the anniversary of the July 17th beginning of the international banking collapse. This was when the Japanese carry trade suddenly unwound, exposing the underbelly of international finances. 'Liquidity' vanished. Now the agents that neglected to supervise international banking are trying to fix this broken mess. They can't, of course, because they refuse to understand the nature of gnomes, sex, the Cave of Wealth and Death, Minotaurs, and other naughty matters. Bankrupt banks are in the news and the fixes are being played up as a solution not as desperation. Explaining all this is important because we cannot afford to fall into the deep pit we flung ourselves into this time around. Learning from the past is important! Or we are at the mercy of Fate.