September 11th, 2010

Quote of the Day

Nouriel Roubini writes that…

“The reopening of the fire hoses of credit and capital that occurred during the bubble years will happen again and intensify the boom-and-bust cycles. Driven by ever-more- desperate policymakers in the U.S., Europe and Japan, these cycles will both shorten and magnify. Political, policy and regulatory uncertainty will increase, and as a result, financial crises will become more frequent and costly, while risk aversion, volatility and uncertainty will rise.”


15 Comments

  1. 1

    CLEVER v WISE

    The Yin/Yang balance was once recognised as ‘The Way’. Earth is now locked in male cleverness, to the point of self-destruction. Women have not been freed into the Feminine but also locked into ‘male freedoms’.

    What a mistake-a to make-a!

    Like

  2. 2
    Anonymous says:

    Dystopian views make good copy, however history does not support the analysis.

    Like

  3. 3
    Adam Boulton says:

    Inshallah

    Like

    • 12
      Dalai Llama Ding Dong says:

      Let me explain in simple terms step by step.

      1) All the global banks were up to their eye-balls in toxic assets. All the AAA mortgage-backed securities etc. were in fact JUNK. But in the balance sheets of the banks and their special purpose vehicles (SPVs), they were stated to be worth US$ TRILLIONS.

      2) The collapse of Lehman Bros and AIG exposed this ugly truth. All the global banks had liabilities in the US$ Trillions. They were all INSOLVENT. The central banks the world over conspired and agreed not to reveal the total liabilities of the global banks as that would cause a run on these banks, as happened in the case of Northern Rock in the U.K.

      3) A devious scheme was devised by the FED, led by Bernanke to assist the global banks to unload systematically and in tranches the toxic assets so as to allow the banks to comply with RESERVE REQUIREMENTS under the fractional reserve banking system, and to continue their banking business. This is the essence of the bailout of the global banks by central bankers.

      4) This devious scheme was effected by the FED’s quantitative easing (QE) – the purchase of toxic assets from the banks. The FED created “money out of thin air” and used that “money” to buy the toxic assets at face or book value from the banks, notwithstanding they were all junks and at the most, worth maybe ten cents to the dollar. Now, the FED is “loaded” with toxic assets once owned by the global banks. But these banks cannot declare and or admit to this state of affairs. Hence, this financial charade.

      5) If we are to follow simple logic, the exercise would result in the global banks flushed with cash to enable them to lend to desperate consumers and cash-starved businesses. But the money did not go out as loans. Where did the money go?

      6) It went back to the FED as reserves, and since the FED bought US$ trillions worth of toxic wastes, the “money” (it was merely book entries in the Fed’s books) that these global banks had were treated as “Excess Reserves”. This is a misnomer because it gave the ILLUSION that the banks are cash-rich and under the fractional reserve system would be able to lend out trillions worth of loans. But they did not. Why?

      Like

  4. 4
    me says:

    the result of king of the muppet bliars “third way”what a Hunt and as such he is rewarded by the pack of Hunts

    Like

  5. 5
    Grumpy Old Man says:

    Spent time googling ronbini Looks like Gordon’s excuse “it started in america” (under another leftie’s regime) is broadly correct. Pity Gordon couldn’t recognise the prescience of a real intellectual and a real economist and have taken his teachings to heart.

    Like

    • 6
      Grumpy Old Man says:

      Roubini.

      Like

    • 9
      bofl says:

      er……british banks were not forced into buying junk bonds….

      or rbs buying amro at the top of the market…..

      or lending to shady eastern europeans……..

      or giving mortgages at 10x earnings……..then when they got caught blamed it on lowly branch staff!

      during the early years of this century the uk banks were making shedloads and keeping the nu lab ‘miracle’ afloat………so they turned a blind eye………

      blair and brown are as guilty as the bankers brown pretends to despise….

      Like

  6. 7
    Grass hopper says:

    The circle turns and turns again

    Like

  7. 8
    NickyBlister says:

    The egotistical nightmare of the Blair/Brown years – men whose self invented genius has evaporated and left us all with a debased and morally starved sense of worth.

    Like

  8. 10
    bofl says:

    we are not even out of the woods yet…….

    anyone seen the spead on greek debt?

    the portugal auction was hailed as a success.really?

    The securities due September 2013 were issued at an average yield of 4.086 percent. That compares with an average yield of 3.597 percent at a previous auction of the same-maturity debt on June 9. The bonds due April 2021 were issued at an average yield of 5.973 percent. That compares with an average yield of 4.171 percent at a previous auction of the same-maturity debt on March 10.

    The premium that investors demand to hold Portuguese 10- year government bonds instead of benchmark German bunds pared its increase after the sale, and was at 359 basis points as of 2:17 p.m. in London from 354 basis points yesterday. It widened to as much as 372 basis points earlier, the most since Bloomberg began collecting the data in 1997.

    the market is rigged.just like gilts!

    the only buyer is probably the ecb……using other banks to buy for them…..

    just like the fed do in the good ole usa…….

    +++++++++++++++++++++++++++++++
    it is all an illusion-paid for by US!
    the bankers and politicians will lie to us until their last breath.why?

    because as soon as they admit that there is no way out ( all caused by them) then the markets will collapse……along with their own little empires….which is what they really worry about!

    Like

    • 11
      Dalai Llama Ding Dong says:

      Exactly. A financial Armageddon is coming and with the HFT bots it will all be over within an hour. It will start with a run on US Treasuries. This is a PLANNED event, just like 911, but on turbo-nitrous-steroids, and it will hit worldwide.

      Like

  9. 13
    Madness says:

    Cheers Gordon for your part in the mess left. You’re legacy is one of incompetence.

    Like

  10. 14
    Anonymous says:

    Was it Lincoln or Jefferson who said he was more afraid of the bankers than he was of a standing army because people would one day wake up to find the land they once owned mortgaged to the bankers AND wasn’t this one of the reasons he was against having a Fed because it meant the banks controlled the money supply

    Like

  11. 15
    HGH says:

    ¡Gracias!

    Like


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