Friday, October 8, 2010

2011 Could Make 2008 Look Like A Cakewalk

Christopher Whalen makes a remarkably convincing case for why we’ve simply kicked the can down the road and why the banks could be in for a repeat of their 2008 nightmares in 2011.  If Mr. Whalen is right the banking sector is in for a whole new round of government intervention, takeovers, likely nationalizations and general disaster:
The U.S. banking industry is entering a new period of crisis where operating costs are rising dramatically due to foreclosures and defaults.  We are less than ¼ of the way through the foreclosure process. Laurie Goodman of Amherst Securities predicts that 1 in 5 mortgages could go into foreclosure without radical action.
Rising operating costs in banks will be more significant than in past recessions and could force the U.S. government to restructure some large lenders as expenses overwhelm revenue. BAC, JPM, GMAC foreclosure moratoriums only the start of the crisis that threatens the financial foundations of the entire U.S. political economy.
The largest U.S. banks remain insolvent and must continue to shrink. Failure by the Obama Administration to restructure the largest banks during 2007‐2009 period only  means that this process is going to occur over next three to five years –whether we like it or not.  The issue is recognizing existing losses ‐‐ not if a loss occurred.
Impending operational collapse of some of the largest U.S. banks will serve as the catalyst for re‐creation of RFC‐type liquidation vehicle(s) to handle the operational task of finally deflating the subprime bubble.   End of the liquidation cycle of the deflating bubble will arrive in another four to five years.
Fast forward to the 1:07 minute mark where Mr. Whalen begins.

More Here..

Silver Price Manipulation: 'Public Deserves Answers' 


  1. If we have over 20% unemploment, why woldnt 1 in 5 homes go into foreclosure, particularly with the rising cost of fuel and goods and the tightening up of credit and loans and the various cut-backs necessary for all in a shriveling economy.

  2. Thank god I have my silver. I didn't grab gold when I had the chance and it's expensive now, but I'm seriously thinking of getting that too.

    One thing is for sure, throughout the rest of my life I will make sure to spend all my surplus money on gold.

  3. consumer died. banks won't die, they'll swallow the smaller banks to funnel the remaining economic activity into the fewer. doesn't japan have a whole bunch of temp workers at places like their auto factories? heard that's the way of japan now...way of future america? or/also say china worker gets 2 US dollers an we'll get..oh..$8-10 in the global competitive drive...I dunno, with temps they get no pensions/healthcare...maybe why we got national obahmacare on the way now to help us temp workers, course it'll cost..and why there's talk of gov takeover of 401k's, to ensure a return through purchasing those ustbills in our name-just for us..:)) (well seems like we're funding our tbills ourselves so why not make citizens play into the game now that the foreign nationals are withdrawing from buying some) oh's just paper anyway, and alot of will those mortgage backed securities payout if the underlying collatoral is in question?..I dunno, but could be some event of notice huh, could effect the CDS market if some facing loses start calling in those swaps, and if yeilds rise those interest rate swaps..oh boy..a mess, big fat mess..if the structured investment vehicles and collatoral debt obligations and all other derivatives market fall 5% it's 30trillion..or..just a number on a computer screen to them, it's the average guy who's scrambling to provide/protect his family. hmm..another reason why the banks are called zombie banks, their dead inside, and they eat humanity


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