Teeninvestor
Warlord
I meant his flame in other threads.
And I've provided a source for everything I've said so far.
An explanation of the problems with the banking system.
- Thread starter Teeninvestor
- Start date
I meant his flame in other threads.
And I've provided a source for everything I've said so far.
Teeninvestor
Warlord
OFFICIAL APPOLOGY TO ALL I HAVE OFFENDED:
MOST OF MY FLAMING WAS DONE IN ANGER. I DID NOT MEAN TO INSULT YOU. PLEASE ACCEPT MY APPOLOGY AND FORGIVE MY INDISCRETIONS AND THOUGHTLESS INSULTS. I APOLOGIZE TO ALL I HAVE OFFENDED. MAY YOU BUY FAZ AT $10!(aka you're rich now).
Teeninvestor
MOST OF MY FLAMING WAS DONE IN ANGER. I DID NOT MEAN TO INSULT YOU. PLEASE ACCEPT MY APPOLOGY AND FORGIVE MY INDISCRETIONS AND THOUGHTLESS INSULTS. I APOLOGIZE TO ALL I HAVE OFFENDED. MAY YOU BUY FAZ AT $10!(aka you're rich now).
Teeninvestor
Your source doesn't say anything about the Fed's balance sheet being expanded to over $8.5 trillion. You're going to have to give a source for that.
Are you trying to say that the FDIC guaranteeing $5.7 trillion is assets is the same as putting those assets directly onto its balance sheet?
From your source:
(Bolding mine)
So that says $3 trillion spent, with another $5.7 trillion pledged. That $5.7 trillion I believe is the value of FDIC guaranteed bank deposits. (Numbers according to the source you provided)
Teeninvestor
Warlord
I believe not. As shown by this paragraph and source below.
http://www.bloomberg.com/apps/news?p...d=aGq2B3XeGKok
Plus, most of the so called "insurance" is lending. see the federal reserve's balance sheet for details.
Quote:
The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps.
5.7 trillion in AGREEMENTS TO PROVIDE AID. THAT IS LENDING. Eventually as this capital goes from banks to other people(eg creditors, investor, etc..) it will have to be printed.
http://www.faithandfacts.com/2008/12...f-the-bailout/
Financial Crisis Balance Sheet
Government Entity Sum in Billions of Dollars
Federal Reserve
(TAF) Term Auction Facility 900
Discount Window Lending
Commercial Banks 99.2
Investment Banks 56.7
Loans to buy ABCP 76.5
AIG 112.5
Bear Stearns 29.5
(TSLF) Term Securities Lending Facility 225
Swap Lines 613
(MMIFF) Money Market Investor Funding Facility 540
Commercial Paper Funding Facility 1800
TALF 200
(TARP) Treasury Asset Relief Program 700
Other:
Automakers 25
(FHA) Federal Housing Administration 300
Fannie Mae/Freddie Mac 350
TARRA - The American Recovery and Reinvestment Act 787
Total $6,814.5
And this is as of 2008.
Fair enough???
http://www.bloomberg.com/apps/news?p...d=aGq2B3XeGKok
Plus, most of the so called "insurance" is lending. see the federal reserve's balance sheet for details.
Quote:
The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps.
5.7 trillion in AGREEMENTS TO PROVIDE AID. THAT IS LENDING. Eventually as this capital goes from banks to other people(eg creditors, investor, etc..) it will have to be printed.
http://www.faithandfacts.com/2008/12...f-the-bailout/
Financial Crisis Balance Sheet
Government Entity Sum in Billions of Dollars
Federal Reserve
(TAF) Term Auction Facility 900
Discount Window Lending
Commercial Banks 99.2
Investment Banks 56.7
Loans to buy ABCP 76.5
AIG 112.5
Bear Stearns 29.5
(TSLF) Term Securities Lending Facility 225
Swap Lines 613
(MMIFF) Money Market Investor Funding Facility 540
Commercial Paper Funding Facility 1800
TALF 200
(TARP) Treasury Asset Relief Program 700
Other:
Automakers 25
(FHA) Federal Housing Administration 300
Fannie Mae/Freddie Mac 350
TARRA - The American Recovery and Reinvestment Act 787
Total $6,814.5
And this is as of 2008.
Fair enough???
If you don't understand the difference between a pledge and a loan, you should step away from the DVD of "Wall Street" and hit the books.
Teeninvestor
Warlord
Balance sheet of the Federal Reserve anyone???? Also remember lately two new stimulus packages have been passed, costing a total of 1.2 trillion.
Also, remember trillions of assets have been guaranteed. C has 300 billion guaranteed alone.
well? what does it mean then?
Between 1981 and 2008 we had $10 trillion in "economic stimulus". It was pure waste. No benefit from it whatsoever. That's the way it was designed, after all. But we also didn't have hyperinflation.
Now everyone is convinced that this time hyperinflation is the only possible result
Now everyone is convinced that this time hyperinflation is the only possible result
Do you consider a guarantee a loan? Is a pledge closer in concept to a guarantee or a loan or are they all the same to you?
Teeninvestor
Warlord
Remember, that was over 27 years. This is all compressed into one year. Also keep in mind US circulating currency is only 7.7 trillion.
And you do realize that the circulating currency is not being increased, right?
What we have is that the money supply times the velocity of money is way off normal because the velocity of money has collapsed. What the Fed is doing is increasing the money supply to try to balance the equation on the money side because they have no power over the velocity side. When velocity comes back, money can be withdrawn. We are not facing any real possibility of inflation: We are desperately trying to stave off deflation.
But, but, but, I just want the value of my house to go back up, but no inflation please.
Wait 15 years.
Teeninvestor
Warlord
But you do realize with all this liquidity pumped into the system, when the velocity of money returns to even a fraction of normal levels, the inflation will be horrendous, right? Attempting to remove this liquidity will be equally bad. Remember the stagflation of the 1970's? the inflation then will be nothing compared with the 2010's.
http://www.federalreserve.gov/releases/h41/Current/
That is the balance sheet of the entire federal reserve system. (In millions)
Total assets 1,901,441
Total liabilities 1,857,532
JerichoHill
Bedrock of Knowledge
Sorry teen investor, but the problem with the banking sector is not as simple and cannot be described adequately in a small post at CFC.
Further, you aren't an investor. Your time horizon is too short. You're a speculator. I can also say that being in an investment club in high school teaches you how to read stock reports and that's about it. I was a state stock market champion, and I promptly lost a mint when I graduated and tried to play in the real game. I learned from that.
Further, there is evidence that suggests that we may not have inflation coincident with a government size increase, if one looks at historical events and such. It's kind of been the fad to write about in journals these days.
Further, you aren't an investor. Your time horizon is too short. You're a speculator. I can also say that being in an investment club in high school teaches you how to read stock reports and that's about it. I was a state stock market champion, and I promptly lost a mint when I graduated and tried to play in the real game. I learned from that.
Further, there is evidence that suggests that we may not have inflation coincident with a government size increase, if one looks at historical events and such. It's kind of been the fad to write about in journals these days.
No it won't. If it is withdrawn as it is no longer needed, there is no reason to expect a big surge in inflation.
And even if there is, so friggin what? It simply does not matter as much as a global depression does.
Teeninvestor
Warlord
Wow. I remember a source on wikipedia saying that balance sheet was 8.5 trillion at one point in October. However, you get the point. The amount of liquidity pumped is massive, in any case.
Hyperinflation is just as bad as depression.
If Bernanke was to withdraw it as it is no longer needed, he is GOD. It will be impossible to have perfect timing for this.
I'll take your experience into account. Right now I am playing with a small real account(summer job savings). Am up 14%, but was up 31% three days ago(weep). My feeling is that I might do better because I was investing in the SECOND GREAT DEPRESSION.
Which is why the loans will be called in, once the banks are able to pay them back and are able to resume normal lending activity amongst themselves.
The Fed's #1 mission in normal economic times is to keep inflation low, and they have been very good at doing this over the last 25+ years. After this crisis is over, they can return to that mission. Right now they are the bank of last resort, backstopping the rest of the banking system while the economy attempts a recovery.
If things keep getting worse over the next few months, and banks like Citi and BAC continue to face insolvency, they may need to be nationalized completely and broken up. That would be incredibly complicated and costly, according to many of the things I have read. Hopefully it doesn't happen.
