More Data on the Impending Crash
Tags: Financial Crisis.
Click here to get Caucus of Corruption: The Truth About The New Democratic Majority by Matt Margolis and Mark Noonan.
From Hussman Funds via Mish’s:
…Bloomberg reported last week that “Citigroup and J.P. Morgan Chase & Co. are hoarding cash as if another crisis were on the way.” Notably, a week after CIT and Advanta filed for bankruptcy, Citigroup has sent letters raising the finance charge on some of its credit cards to 23.99% annually – even for creditworthy customers who pay their balances in full on a monthly basis. This is a bit of deja vu, given that Advanta did virtually the same thing in August of 2008, raising rates to 25% on its cards. This is not the type of development that encourages debt-financed economic activity (which has historically been the primary driver of early economic expansions).
Since June of this year, outstanding bank credit (loans and leases) has plunged at the steepest rate observed in the available post-war history, while at the same time, bank cash reserves have soared. This surge in reserves is a mirror image of the Fed’s balance sheet, which has taken on over a trillion dollars in new assets – primarily mortgage backed securities. The problem here is that the underlying quality of agency paper continues to deteriorate, which means that Fannie Mae, Freddie Mac and other agencies will likely sustain major additional losses – eventually footed by the public – because they accepted a negligible fee from mortgage lenders in return for slapping the government’s Good Housekeeping Seal of Approval on these garbage loans.
I’ve seen this in personal experience – and not just from Citigroup. And not only rate hikes, but large reductions in credit lines, in to the bargain. The banks know what is coming and are preparing for it.
Meanwhile, Obama and Co are still living in a Geithner-induced dream world. If you go to the linked article, you’ll note that Hussman is holding that the actions of the Fed and Treasury amount to an unconstitutional abuse of power – and I agree. The sad part is that Obama either doesn’t see it, or refuses to see it. Bottom line, we’re being taken for a ride where we, the people, get to bail out the bankers and bureaucrats who got us in to this mess – another crash is impending, where we’ll have to foot the bill, but the bankers have already ensured that their personal wealth is protected.
How’s that hope and change thing working out for you?
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7 Responses to “More Data on the Impending Crash”
Caucus of Corruption
So much of what Obama and the left have done would not pass a test for constitutionality according to what the founding father’s seemed to envision it. Having read “The Federalist Papers”, I am appalled at what is happening.
KJS
That is what the tea parties were about.
NOW IF this is true…….he is TOAST!!
“BATON ROUGE, LA (WAFB) – Sen. Mary Landrieu, D-LA, has been in the spotlight since her vote Saturday, allowing debate to begin on the national healthcare bill. Included in the deal, Landrieu secured as much as $300 million for Louisiana’s Medicaid program, something she said Gov. Bobby Jindal asked for, leaving him in a sticky situation.
“It is the number one request of my governor, who is a Republican,” Landrieu said Saturday on the Senate floor.
She told her fellow senators she is proud of the move she made Saturday. She voted to allow debate on the national healthcare bill and in the same measure secured million of dollars for Louisiana’s Medicaid costs. Critics have called her actions “the new Louisiana Purchase.”
“I think Mary Landrieu comes from the John Breaux school of governing. He’s the guy that said, ‘My vote is not for sale. It’s for rent,’” said Jim Engster, a Baton Rouge political analyst.
Landrieu argues otherwise.
“That is not the reason I am moving to debate. The reason I am moving to debate is the same as expressed in the last hundred of speeches I have given,” she said.
According to Landrieu she simply responded to requests from Gov. Jindal and his administration. Alan Levine, secretary of the Department of Health and Hospitals, has traveled to Washington, D.C. more than 10 times in the last three months, lobbying for more than $1 billion in Medicaid help.
“You hate to look a gift horse in the mouth and in this case, it was a Democrat, Mary Landrieu, who is an ideological foe, who came through with the bacon,” Engster said.
He added that’s why it’s no surprise Jindal and his administration have largely stayed quiet on Landrieu’s latest move.
“I think the governor is biting his lip and saying, ‘I want the money and because of that, I’m not going to criticize the politics that led to the money,’” Engster noted.”
Alexander Frazier Tytler, published in 1776:
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: “from bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”
I believe we have reached this point. “Selfishness” is being defined as people who already pay high taxes not wanting to pay more, while others (who benefit more from government) pay little or NONE. There is no selfishness applied to the moochers and looters of this country.
tired
I believe we have reached this point. “Selfishness” is being defined as people who already pay high taxes not wanting to pay more, while others (who benefit more from government) pay little or NONE. There is no selfishness applied to the moochers and looters of this country.
There will be a day of reckoning and paying the piper.
When the well runs dry everybody perishes…….ours is running dangerously low yet every one is demanding “their fair share”.
Isnt communism grand??
Mark,
Except for how it happened, I think you would agree with a lot of what this guy says.
http://www.dailykos.com/storyonly/2009/11/23/807320/-William-Black-Nails-It:-Obama,-Get-Rid-of-Bushs-Wrecking-Crew
Personally, I think we need to audit the Fed and Obama needs to bring in a whole new group of economic advisors.
The crash is the easy part……..THIS is an impending national disaster.
Free Speech Silenced at Columbia and Princeton
By Pamela Geller
Nonie Darwish, the executive director of Former Muslims United and author of Cruel And Usual Punishment: The Terrifying Global Implications of Islamic Law, was scheduled to speak at Columbia and Princeton University last week, but both events were canceled under pressure from Muslim groups on campus.
Columbia, where Ahmadinejad was welcomed like a returning king.
http://www.americanthinker.com/2009/11/free_speech_silenced_at_columb.html
casper,
Certainly the best thing Obama can do right now is ditch Timmy and force out Ben – heck, even Reich would be better. Heck, my pet Maltese would be better!
However one wishes to assign blame for where we are, the facts of where we are can no longer be disputed save by the blind and the con artists. We’re broke. We’re printing money. We’re bailing out banks which must be allowed to fail. We’re doing this merely to ensure that a few very rich people remain very rich and a few corrupt politicians (Dodd, Frank; call your office!) remain on the gravy train.