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Evidence of the US Banking System Teetering on the Brink of Collapse
Mike_Shedlock
The Market Oracle
Friday, July 25, 2008
1. Paulson appears on Face The Nation and says “Our banking system is a safe and a sound one.” If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.
2. Paulson says the list of troubled banks “is a very manageable situation”. The reality is there are 90 banks on the list of problem banks. Indymac was not one of them until a month before it collapsed. How many other banks will magically appear on the list a month before they collapse?
3. In a Northern Rock moment, depositors at Indymac pull out their cash. Police had to be called in to ensure order.
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4. Washington Mutual (WM), another troubled bank, refused to honor Indymac cashier’s checks. The irony is it makes no sense for customers to pull insured deposits out of Indymac after it went into receivership. The second irony is the last place one would want to put those funds would be Washington Mutual. Eventually Washington Mutual decided it would take those checks but with an 8 week hold. Will Washington Mutual even be around 8 weeks from now?
5. Paulson asked for “Congressional authority to buy unlimited stakes in and lend to Fannie Mae (FNM) and Freddie Mac (FRE)” just days after he said “Financial Institutions Must Be Allowed To Fail”. Obviously Paulson is reporting from the 5th dimension. In some alternate universe, his statements just might make sense.
6. Former Fed Governor William Poole says “Fannie Mae, Freddie Losses Makes Them Insolvent”.
7. Paulson says Fannie Mae and Freddie Mac are “essential” because they represent the only “functioning” part of the home loan market. The firms own or guarantee about half of the $12 trillion in U.S. mortgages. Is it possible to have a sound banking system when the only “functioning” part of the mortgage market is insolvent?
8. Bernanke testified before Congress on monetary policy but did not comment on either money supply or interest rates. The word “money” did not appear at all in his testimony. The only time “interest rate” appeared in his testimony was in relation to consumer credit card rates. How can you have any reasonable economic policy when the Fed chairman is scared half to death to discuss interest rates and money supply?
9. The SEC issued a protective order to protect those most responsible for naked short selling. As long as the investment banks and brokers were making money engaging in naked shorting of stocks, there was no problem. However, when the bears began using the tactic against the big financials, it became time to selectively enforce the existing regulation.
10. The Fed takes emergency actions twice during options expirations week in regards to the discount window and rate cuts.
Research related articles:
- World’s largest mortgage providers teeter on the brink of collapse
- FDIC Key to Stop Banking Collapse
- U.S. pledge fails to lift cloud over Fannie, Freddie
- Large U.S. bank collapse seen ahead
- Banking Regulator Played Advocate Over Enforcer
- Treasuries Gain as Stocks Fall on Concern Bank Losses to Worsen
- Ukraine’s pro-Western government on brink of collapse
- Cramer: ‘Dysfunctional’ Banking System Puts U.S. ‘Totally’ at Risk of ‘Great Depression No. 2′
- Fannie, Freddie Slump on Concern Treasury Bailout Is Inevitable
- Federal Rescue Plans for Mortgage Giants Halted
- Banking crisis: Central banks pump billions in to ease the strain
- Financial Cycle and the Coming Collapse
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15 Responses to “Evidence of the US Banking System Teetering on the Brink of Collapse”
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July 25th, 2008 at 5:37 am
DOES ANY1 KNOW WHERE WACHOVIA STANDS ON THIS ISSUE?
July 25th, 2008 at 6:10 am
I am also a Wachovia account holder, I did some research yesterday and couldn’t find anything other than their projected 9bn loss for the quarter. Although they could presumably collapse ‘out of nowhere’.
I have taken almost all of my money out of Wachovia.
July 25th, 2008 at 6:11 am
Brian
Wachovia lost 9.some Billion last Qtr the report said Wensday afternoon , Don’t worrie Brian we’ll keep em floatin
July 25th, 2008 at 8:02 am
I guess those STIMULUS checks didnt work!
July 25th, 2008 at 11:54 am
Paulson sounds like Kevin Bacon at the end of the “Animal House” movie; “All is well!!”
July 26th, 2008 at 7:03 am
America, your greed is destroying you, what are you going to do along with God to create your world in the new energies of the photon belt?
Dieter
Indian in the machine
canada indian photographing sky spirits and posting them on the internet
July 26th, 2008 at 9:26 am
I’m not sure why my website didn’t come up , but here it is
http://www.indianinthemachine.com
July 26th, 2008 at 3:48 pm
Rich Tuttle,
ROFLMAO!!!!! dude, that was seriously funny!!
LOOOOOOL!!!!!!! ROF!!!!
S-T-I-M-U-L-U-S——- ROFLMAO!!!!!!!!!!!!!!!!!!!!!!!!!
…. governmental idiots….. geeeeez. i got their STIMULUS right here, morons.
July 27th, 2008 at 12:40 am
How strange, I ran into this yesterday while surfing the web. I was not even looking for it! Pretty neat stuff huh? On another note you guys…buy a short wave radio.
July 27th, 2008 at 1:46 am
sorry, I posted “Indian in the Machine” as my name rather than my own name. Also, I hope yu all have a good relationship with family and friends cause that is how you may be getting by in the future. God Bless.
July 27th, 2008 at 10:56 am
I gotta say..i am getting …irritated..at these constant “economic collapse” stories that while informative and interesting…NEVER offer any..ADVICE!
A long time ago…I learned a maxim that still works..and is amazingly ignored by most Journalists and writers..
“write to an ignorant peer”
It means simply..”Do not assume I know the whole story.”
So..thusly..i would REALLY appreciate the..”MEANING” of these stories..as they pertain to..WE the WORRIED READERS…you dig?
What does this story..aside from…TROUBLE…mean to me ..SPECIFICALLY? Should I take my savings out NOW? Should i ask a list (and what is that list?) of questions to my bank? Should I look for a SPECIFIC “type” of bank to be “safer” than others…or more specifically those mentioned in these articles?
WHAT THE HELL DO I DO..WITH THIS INFORMATION..OTHER THAN TAKE…ALOT OF VALIUM?
So…Writers..PLEASE..”Wrap It Up”..with some kind of..’What this means to YOU! The person with money IN A BANK!’
Thanks..good work..
an like that
July 27th, 2008 at 3:39 pm
It is impossible for anyone to reliably, and consistently predict ANY future economic event, so any article that shouts “crash imminent” or “boom imminent” or whatever, is “a crock”.
Beware of any and all “experts” who can tell you what to do with your money based on their infallible predictions about what “must” happen, tomorrow, next week, next month or next year, to the economy.
http://www.onebornfree.blogspot.com
July 27th, 2008 at 10:06 pm
onebornfree, it IS impossible to “predict” economic events, but it is NOT impossible to “forecast” economic events.
A prediction means that you have a “crystal ball”, but a forecast simply declares, “IF this continues, this WILL happen”.
For the last 30+ years, one man and his associates have warned about this broken system and the fact that it was doomed to collapse at some future point.
Everybody else is late to the party in comparison.
And as far as what you can DO, you have several choices. You can:
1) Pretend nothing is happening and someone else fixes it.
2) Take you money out of the bank.
3) Short sell, buy “put” options, buy food stocks/futures, buy energy stocks/futures.
4) Sit back and “brace” for Armageddon or the end of the world and tell everyone “I told you so!”
5) Try and save humanity in whatever way you think you can.
It really comes down to WHAT you think you are. Are you an animal trying to fight other animals to “survive”. Or are you part of humanity that believes people are not animals, and instead separate themselves from animals buy their ability to understand truth (yes, real truth) about the universe and in this discovery realize that humanity works at its best when everyone works for the benefit of the other.
A single slave driver has a lower quality of existence (purely economically speaking) than if he freed his slaves and encouraged them to learn and discover technology and truth about the universe.
In other words, 5 people working for each others benefit will ALWAYS be superior in any circumstance compared with 1 person with 4 servants.
Please don’t be fooled by the freedom vs communism nonsense. That is not what I am talking about. I am talking about a society (what America was founded upon) whose goal is to DEVELOP each and every individual to the highest level possible. Yes of course, the jobs are different, but the goals are to have as much technological growth as possible, with more and more people moving into fields of science and cultural development (ironic tragedy, music) to raise the quality of thinking and hence the quality of life for EVERYONE by some degree.
What the NWO wants is free trade. FREE TRADE. That is what this is all about. Free trade is a misnomer. It is a policy AGAINST the Jeffersonian principles of what the America was founded upon. It is an IMPERIAL policy, supported by the oligarchs for THOUSANDS of years, in which you subjugate populations to produce raw materials for your empire, without the slightest thought of economic development for these people. This is a naturally ENTROPIC system that cannot sustain itself indefinitely. This is because if a nation state does not build INFRASTRUCTURE (damns, bridges, power, rail) then the growing population will not be able to support itself and it WILL cause an economic collapse.
The Bardi banking collapse of the the 1300’s preceded the “plague” by almost a decade. There was a LOT more reason for the tremendous drop in population than simply, “everybody was ill” explanation.
This era was referred to as the “Dark Age”, this was an era when people were subjugated with complete control in the hands of the oligarchs. It took the evils of the “inquisition” to make humanity put a stop to it with the Treaty of Westphalia in Germany (Holy Roman Empire).
The point is, this HAS happened before in history. The banks have collapsed and the population was “culled”.
America has a chance to stop it, because we are STILL (yes, still) a free people compared to Europe. The Maastricht treaty has made the nation states of Europe impotent in their ability to create reforms for their country in the most desperate of times (now). However, WE still can.
Europe is hopeless, but the USA, Russia, China, India and Brazil and others STILL have a good control of their country. These countries can band together to create a new Bretton Woods trade agreement (money backed by Gold, protect jobs) and in the new version, we can promote the development of the third world, instead of subjugated them to slavery.
The ONLY hope the Oligarchs have, is to create WWIV. Who do you think is blowing up India right now? “Terrorists?” Who do you think is instigating conflict in China? (Look China is FAR from perfect, but going to war with them will lead to a Fascist HELL in the near future, we MUST negotiate with them). The British free trade system is losing its grip on the world again, so again, they are trying to blow up the world and pick up the pieces, just as they always have.
Like I said, most of Europe is lead by weaklings, they are retarded and clueless. However, Russia, China, India and others have an idea of what is going on, but the USA MUST join together with them.
Since the USA fought the British free-trade system for independence, the game has been about GEOPOLITICS. If your not thinking in geopolitical terms, your not realizing that this is a fight that is happening right now, is not new, and can be WON.
Self preservation is for animals. Please join humanity and fight to save it. http://www.larouchepac.com/
July 28th, 2008 at 5:01 am
anon[how come you have no name?] said :” it IS impossible to “predict” economic events, but it is NOT impossible to “forecast” economic events. A prediction means that you have a “crystal ball”, but a forecast simply declares, “IF this continues, this WILL happen”.”
Regarding your claim of a difference between what you see as “predicting”, and “forecasting, you are deluding yourself, as far as I can see.
By your own definition “forecast[ing]” is still a prediction- you are saying , by your own admission, “IF this continues, this WILL happen”.
A more humble approach would be “IF this continues, this MIGHT [or "most likely"] will happen”. You need to learn to leave “the door” slightly ajar to allow for possibilities that you are not considering right now, because, well, just because![ and it often will save you from looking like an egotistical fool 5 years from now!]
As it stands you are still claiming absolute knowledge of future events, even though your knowledge of current events is by necessity [ie reality] limited. Truth is, we can never know all of the facts about current events [knowledge is always limited].
People who claim absolute knowledge of the economic future are either ignorant of fundamental economic principles, egotists, or frauds and charlatans, or a combination of all three.
http://www.onebornfree.blogspot.com
July 28th, 2008 at 6:08 am
“Greenspan deserves to be booed”. Sorry , somehow I missed your “handle” first time around.
In summary: 1]given the nature of markets and human knowledge, it is impossible to reliably, and to consistently predict or forecast [to use your favorite term] future economic events.
2] It is not necessary to know future events. A neutrally balanced long term savings portfolio -one which does not favor any one economic scenario [ie inflation, deflation, recession, general prosperity]over any other, will enable its owner to relax and forget predicting future events.
For 30 yr results graph see: http://www.onebornfree.com/longtermsavingsplan.htm
http://www.onebornfree.blogspot.com