Tuesday, September 23, 2008

Keeping insolvent banks on life support is not a rescue plan; it’s insanity.

Grasping at Straws

No one has any idea of the magnitude of the deleveraging ahead or the size of the debts that will have to be written down. That's because 30 years of deregulation has allowed a parallel financial system to arise in which over $500 trillion dollars in derivatives are traded without any government supervision or accounting. These counterparty transactions are interwoven throughout the entire "regulated" system in a way that poses a clear and present danger to the broader economy. It's a mess. Mike Witney and again These counterparty transactions are interwoven throughout the entire "regulated" system in a way that poses a clear and present danger to the broader economy. It's a mess. Anyone really believe this won't hit the UK economy hard?

Posted by malct @ 11:14 AM (1095 views)
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13 thoughts on “Keeping insolvent banks on life support is not a rescue plan; it’s insanity.

  • from comments :-

    This debt bubble is so big that whatever inflation that is predicted will be short-lived. Do the math. Massive contraction of the money supply is what the numbers say. This is why all this blank check debt money is being infused into the money supply. It is to keep the fractional banking scam going until a war or similar crisis can be created to divert your attention from the men behind the curtain. At least don’t be fooled.
    Yep….. | 09.20.08 – 10:47 pm | #

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  • planning4acrash says:

    It is not insanity. Its shrewd consolidation of power and theft of wealth via taxation and inflation.

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  • planning4acrash says:

    Malct, mass decrease in the money supply does not mean less inflation. There are thousands of trillions in the derivatives market, and only a slim proportion of them being liquidated will equal Reimar Republic/Zimbabwe style hyper inflation. This will be combined with starved credit lines for the productive economy, sending shares plunging, whilst the now consolidated (b)wanking institutions get to buy up the producing economy for pennies on the pound. Just as was done after Napoleon was defeated. Rothschilds sent false news of a Napoleonic victory to London 20hrs before the real news came in, the London stock exchanged crashed 98% and Rothschilds bought up the British economy for pennies on the pound before the real news arrived 20hrs later. Bells should be ringin, bull horns going crazy “COUP DE TA, COUP DE TA”.

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  • from:- The American Empire:
    Too Big to Fail?
    Who gets bailed out – and who doesn’t

    In reading about the federal bailout of all those financial wheeler-dealer outfits that are supposedly “too big to fail,” the layman may be forgiven for failing to comprehend the intricacies of the arcane financial instruments currently backfiring on their whiz-kid inventors. Such exotic creatures as “credit default swaps” may elude the understanding of the hoi polloi, but one thing the man in the street does know: he’ll never be “too big to fail,” of that he can be sure.

    He’s just not the Bear-Stearns type, and Congress would never shell out a penny before he loses his savings and his home,

    which – due to the propaganda of Panglossian economics, whereby houses stopped being homes and became investments – amount to pretty much the same thing.

    The paper-pushers of Wall Street made untold trillions out of a policy that was doomed to fail [.pdf] in advance, and whose critics have long predicted would end in precisely the manner our tale of economic woe is unfolding.

    The policy of bank credit expansion, which enriches the already wealthy at the expense of the rest of us, has a fatal allure. It induces an initial euphoria, the false promise of permanent prosperity. This Panglossian view is the perfect economic system for an emerging empire, especially one with such inflated pretensions as ours. It is the economics of hubris – the same grandiosity that let us imagine we could implant “democracy” in the arid soil of Iraq and make the desert bloom.

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  • dohousescrashinthewoods says:

    Japanese-style Zombie banks?

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  • 3. planning4acrash said…

    “Just as was done after Napoleon was defeated. Rothschilds sent false news of a Napoleonic victory to London 20hrs before the real news came in, the London stock exchanged crashed 98% and Rothschilds bought up the British economy for pennies on the pound before the real news arrived 20hrs later. Bells should be ringin, bull horns going crazy “COUP DE TA, COUP DE TA”.

    Don’t think so, p4ac – this is one of the many twisting of the facts in Endgame. Try doing some more ‘research’.
    Why do you guys just swallow this rubbish without question?

    Another example of ‘fact’ from Endgame – King Edward 8th was forced to abdicate from the throne becuase of his public support for the Nazis.

    Really?

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  • if the banks fall, our economy falls, our system falls, our values fall.
    I really don’t understand what brit government is doing. they are NOW giving [email protected] to financial system that is a third of UK economy (the rest is more or less real estate) instead of defending it. what are they thinking? what we are going to do? did they find that the island is laying on oil not on sea? or do they want to rebuild the manufacturing? are they insane?

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  • It is a sad state of affairs. The sooner that the damaged hadron collider is repaired, the better really.

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  • shipbuilder @ 6 and this legend was debunked by none other than the Rothschild family…hmm…and Niall Ferguson…hmm. It certainly was common practice during past times when information was slow and scarce to arbitrage knowledge, so whilst the details are almost certainly exaggerated in Endgame, they are probably based on a fact. I suspect the fellow did arbitrage information and made a killing.

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  • Shipbuilder said: ‘King Edward 8th was forced to abdicate from the throne becuase of his public support for the Nazis’.

    Perhaps not, but he was certainly a high-profile Nazi sympathiser – hanging out with their top brass in Europe, and is actually on record for advocating the Luftwaffe increase its bombing activities against his own country. The Royal Family? You couldn’t make them up.

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  • D’oh, lierbag – Yes, i’m aware that both statements are based on fact, however a deliberately twisted truth is nevertheless not the truth – these historical events have been revised to suit the author’s version of events, yet he is claiming to reveal the truth.
    Do I really need to point out the problem here?

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  • shipbuilder – sure…but sometimes it is nice to see a different spin than the one we usually get. Everyone has an angle…that always has to be taken into consideration when making judgements. I generally try to chase things up when I hear something that is “news to me”. It is a pity that the critics feel that they have to sensationalise as much as they do, given that the truth is probably nasty and sordid enough.

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  • 12. d’oh said…

    “shipbuilder – sure…but sometimes it is nice to see a different spin than the one we usually get. Everyone has an angle…that always has to be taken into consideration when making judgements. I generally try to chase things up when I hear something that is “news to me”. It is a pity that the critics feel that they have to sensationalise as much as they do, given that the truth is probably nasty and sordid enough.”

    Absolutely.

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