|08-10-2008, 07:40 AM||#1|
It is what it Is.
Join Date: Apr 2001
Location: in a bunker
Tracking the train wreck
Deception – Keeping the Ponzi Scheme Going
After reading the above quotes, it should be clear to you that these gentlemen do not have a clue. Our economy and banking system is so complex and intertwined that no one knows where the next shoe will drop. Politicians and government bureaucrats are lying to the public when they say that everything is alright. They do not know. Therefore, it is in our best interest to cut through all the crap and examine the facts with a skeptical eye.
Last week, bank stocks, which had been falling faster than President Bush’s approval rating, soared higher based on earnings reports that were horrific, but not catastrophic.
Again, the talking heads, like Larry Kudlow, were calling a bottom in the financial crisis. The bank with the largest increase in share price was Wells Fargo. Their earnings exceeded analyst expectations and the stock went up 22% in one day. Wells Fargo (WFC) has $84 billion of home equity loans, with half of those in California and Florida.
Coincidently, Wells Fargo decided to extend its charge-off policy in the 2nd quarter from 120 days to 180 days, in an effort to give troubled borrowers more time to reach a loan workout. A skeptical person might think that they did not change this policy out of the goodness of their hearts.
Maybe, just maybe, they changed this policy to reduce their write-offs for the 2nd quarter, to beat analyst expectations.
There are many stories of people who are still living in houses, twelve months after making their last mortgage payment. Their banks have not started foreclosure proceedings.
Is this due to incompetence by the banks, or is this a way to avoid writing off the loss? The FASB has joined the cover-up gang by delaying the implementation of new rules that would have made banks stop hiding toxic waste off-balance sheet. The new rule would have made banks put these questionable assets on their balance sheet and would have required a bigger capital cushion
What a surprise that bank regulators, the Treasury and Federal Reserve urged a delay in implementation. Manipulate the facts because the average American doesn’t understand or care. Sounds like Enron accounting standards to me.
Uninsured Depositors May Be 'Iceberg' for US Economy
TOPICS:Housing | Mortgages | Economy (U.S.) | Economy (Global)
COMPANIES:Freddie Mac | Fannie Mae
By CNBC.com | 04 Aug 2008 | 10:44 AM ET Font size:
Uninsured depositors, including company payrolls, are the next "potential iceberg" for the U.S. economy, said Larry Lindsey, CEO and president of The Lindsey Group economic advisory firm.
"All you need is one case where the uninusured depositors, the big deposits, don't get covered, and you have the potential that they start to run," he said. "To run an economy, to have a function that works, you've got to have a place where people can keep their money safely ... Unfortunately, the way the Congress has structured it now, that's not the case." (See video for full interview.)
The futility of Congress' bailout bill for mortgage lenders Fannie Mae [FNM 9.05 -0.90 (-9.05%) ] and Freddie Mac [FRE 5.90 0.01 (+0.17%) ], which includes no reforms to put limits on the companies and prohibits risk-based pricing, also a presents problem for the economy, Lindsey said.
It does nothing to protect Fannie and Freddie's securitization function, a "vital" part of the economy. It does, however, continue their role as hedge funds, a benefit only to shareholders, Lindsey said.
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"You'll notice that since the plan passed, mortgage rates have actually risen in the country," he said. "That's because we have a less competitive market."
Lindsey suggested the government should do a de facto nationalization of the two companies to eliminate their role as hedge funds. This would eliminate the government-backed shared monopoly created by the bill, he said.
Last edited by baja; 08-10-2008 at 07:48 AM..
|08-10-2008, 09:25 AM||#4|
Join Date: May 2001
Location: Elway was just an arm =MacGruder
where are those fiscal geniuses now telling everyone to invest in oil ?