Banking Crisis II

Stuff that’s happening in the world that may pertain to our survival. Please keep political debates off the forum.

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Re: Banking Crisis II

Post by raptor » Mon Jul 13, 2009 7:10 pm

nyiangelo wrote:Nothing to worry about right :shock: :shock:

geesh


http://finance.yahoo.com/news/Budget-de ... 9.html?x=0

What do you expect from a group of people who think..." a billion here a billion there and pretty soon you are talking real money". :D

Seriously though, yes it something to be concerned about and it is something that you should writing to your Congressman to complain about.
Last edited by raptor on Mon Jul 13, 2009 7:11 pm, edited 1 time in total.

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Re: Banking Crisis II

Post by nyiangelo » Mon Jul 13, 2009 7:10 pm

Oh yeah I forgot to mention that the market was up 185ish today. Of course.
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Re: Banking Crisis II

Post by phil_in_cs » Mon Jul 13, 2009 7:57 pm

nyiangelo wrote:Oh yeah I forgot to mention that the market was up 185ish today. Of course.

and down several hundred from a month or so ago. It got up to ~9000 before people started to realize this isn't a short term problem.
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Re: Banking Crisis II

Post by Kathy in FL » Tue Jul 14, 2009 7:22 am

Yes. We've worked with Section 8 and other programs like emergency housing, etc. for over 13 years. When they have a good inspection company (its no longer done by in-house staff around here) everything runs smoothly if not timely.

However, you have to be prepared for paperwork delays, initial payment delays (up to 60 days sometimes) and a lot of the shenanigans that the tenants try to pull. Supposedly its to be an equal partnership between the tenant, landlord, and section 8 program but the reality is that it isn't a legally equal partnership. Section 8 will do exactly whatever it wants to do even if that violates state landlord/tenant laws stating that their federal mandates supersede ... not quite correct and we usually have to educate them on this. When the tenants try and pull scams they are often left surprised when we bring legal action against them (and win) because they think just because the Section 8 office allows them to do things they think it removes consequences; we are more than happy to disabuse them of this idea. Tenants are also finding it much easier to lose their benefits these days but then we are left to clean up the mess and can only evict them afterwards once the rent is no longer paid and have to go through the whole legal eviction process.

The program has its good side and its bad. And the some of their inspection companies that they've been cycling through are nightmarishly inefficient and just plain shouldn't be in the business. But, we have a professional (if not always friendly) working relationship with both the city and county section 8 program offices here so we are used to their foibles and know how to get done what needs to get done.

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Kathy in FL wrote: We've been carefully buying income properties and we are getting them at prices we couldn't even have gotten them at 6 or 7 years ago, but we are now in a holding pattern until we see what the upcoming property dump is going to do on the market in general. It sure isn't making it any easier to find renters, contrary to previous recessions, so we have to weigh and balance every aspect ... even with a good price if you can't rent the house out you've got nothing but a problem on your hands that is losing you money right out the door (think taxes, insurance, rental inspections, business licenses, etc.).
Are you set up to accept Sec. 8 vouchers? You simply need to have a property that passes inspection and do the paperwork. Then you can take in people where the government is paying part or all of their rent.

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Re: Banking Crisis II

Post by raptor » Tue Jul 14, 2009 10:06 am

Kathy in FL wrote: The program has its good side and its bad. And the some of their inspection companies that they've been cycling through are nightmarishly inefficient and just plain shouldn't be in the business. But, we have a professional (if not always friendly) working relationship with both the city and county section 8 program offices here so we are used to their foibles and know how to get done what needs to get done.
A good summary of Section 8 from a clearly experienced landlord.

The happiest day of my life in the last 5 years was when I sold off a mixed income development that had a section 8 mandate for 33% of the units. Most of the section 8 tenants were actually great tenants. But between the above mentioned paperwork issue for 100% of the section 8 tenants during set up and problems with the minority of the section 8 tenants.... lets just say that the Kathy is clearly more patient than I am. :D

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Re: Banking Crisis II

Post by nimdabew » Wed Jul 15, 2009 1:54 am

raptor wrote:
nyiangelo wrote:Nothing to worry about right :shock: :shock:

geesh


http://finance.yahoo.com/news/Budget-de ... 9.html?x=0

What do you expect from a group of people who think..." a billion here a billion there and pretty soon you are talking real money". :D

Seriously though, yes it something to be concerned about and it is something that you should writing to your Congressman to complain about.
In the meantime, the U.S. debt now stands at $11.5 trillion. Interest payments on the debt cost $452 billion last year -- the largest federal spending category after Medicare-Medicaid, Social Security and defense.
I wish I could make even a fraction of that in my life time. Just from the interest. Fucking a, how is this going to be solved? And stuck at the end because 90% of the readers don't read the whole thing:
Under the administration's budget estimates, the $1.84 trillion deficit for this year will be followed by a $1.26 trillion deficit in 2010, and will never dip below $500 billion over the next decade. The administration estimates the deficits will total $7.1 trillion from 2010 to 2019.
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Re: Banking Crisis II

Post by flyingredgoat » Wed Jul 15, 2009 12:55 pm

You called it Raptor. It looks like inflation has made it here. :lol:

http://news.yahoo.com/s/ap/20090715/ap_ ... llar_debit" onclick="window.open(this.href);return false;
Yahoo News wrote: NH man charged 23 quadrillion dollars for smokes
AP

Wed Jul 15, 9:11 am ET

MANCHESTER, N.H. – A New Hampshire man says he swiped his debit card at a gas station to buy a pack of cigarettes and was charged over 23 quadrillion dollars.

Josh Muszynski (Moo-SIN'-ski) checked his account online a few hours later and saw the 17-digit number — a stunning $23,148,855,308,184,500 (twenty-three quadrillion, one hundred forty-eight trillion, eight hundred fifty-five billion, three hundred eight million, one hundred eighty-four thousand, five hundred dollars).

Muszynski says he spent two hours on the phone with Bank of America trying to sort out the string of numbers and the $15 overdraft fee.

The bank corrected the error the next day.

Bank of America tells WMUR-TV only the card issuer, Visa, could answer questions. Visa, in turn, referred questions to the bank.
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Re: Banking Crisis II

Post by raptor » Wed Jul 15, 2009 1:15 pm

flyingredgoat wrote:You called it Raptor. It looks like inflation has made it here. :lol:

http://news.yahoo.com/s/ap/20090715/ap_ ... llar_debit" onclick="window.open(this.href);return false;
Yahoo News wrote: NH man charged 23 quadrillion dollars for smokes
AP

Wed Jul 15, 9:11 am ET

MANCHESTER, N.H. – A New Hampshire man says he swiped his debit card at a gas station to buy a pack of cigarettes and was charged over 23 quadrillion dollars.

Josh Muszynski (Moo-SIN'-ski) checked his account online a few hours later and saw the 17-digit number — a stunning $23,148,855,308,184,500 (twenty-three quadrillion, one hundred forty-eight trillion, eight hundred fifty-five billion, three hundred eight million, one hundred eighty-four thousand, five hundred dollars).

Muszynski says he spent two hours on the phone with Bank of America trying to sort out the string of numbers and the $15 overdraft fee.

The bank corrected the error the next day.

Bank of America tells WMUR-TV only the card issuer, Visa, could answer questions. Visa, in turn, referred questions to the bank.
It looks like they charged the man's debit card number to his account.
Just a guess here but $23,148,855,308,184,500.00 (which is actually 19 digits not 17 because they truncated the ".00" for the story.

Could be a security number of 231 and a credit card number of 4885 5308 1840 0500. Just a guess though.

4885 is a valid Visa/Mastercard prefix and Visa/Mastercard would have a 3 digit security number. I wonder if we can use his debit card to pay off the national debt. :D

I hope that man closed that account and got a new account. It should not have taken the bank 2 hours to figure out that there was a problem. You would assume the internal audit programs would have been screaming to the internal audit/fraud group that there was a problem. Especially considering the charge was more than the entire GDP of the world.

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Re: Banking Crisis II

Post by nimdabew » Wed Jul 15, 2009 5:39 pm

raptor wrote:
flyingredgoat wrote:You called it Raptor. It looks like inflation has made it here. :lol:

http://news.yahoo.com/s/ap/20090715/ap_ ... llar_debit" onclick="window.open(this.href);return false;
Yahoo News wrote: NH man charged 23 quadrillion dollars for smokes
AP

Wed Jul 15, 9:11 am ET

MANCHESTER, N.H. – A New Hampshire man says he swiped his debit card at a gas station to buy a pack of cigarettes and was charged over 23 quadrillion dollars.

Josh Muszynski (Moo-SIN'-ski) checked his account online a few hours later and saw the 17-digit number — a stunning $23,148,855,308,184,500 (twenty-three quadrillion, one hundred forty-eight trillion, eight hundred fifty-five billion, three hundred eight million, one hundred eighty-four thousand, five hundred dollars).

Muszynski says he spent two hours on the phone with Bank of America trying to sort out the string of numbers and the $15 overdraft fee.

The bank corrected the error the next day.

Bank of America tells WMUR-TV only the card issuer, Visa, could answer questions. Visa, in turn, referred questions to the bank.
It looks like they charged the man's debit card number to his account.
Just a guess here but $23,148,855,308,184,500.00 (which is actually 19 digits not 17 because they truncated the ".00" for the story.

Could be a security number of 231 and a credit card number of 4885 5308 1840 0500. Just a guess though.

4885 is a valid Visa/Mastercard prefix and Visa/Mastercard would have a 3 digit security number. I wonder if we can use his debit card to pay off the national debt. :D

I hope that man closed that account and got a new account. It should not have taken the bank 2 hours to figure out that there was a problem. You would assume the internal audit programs would have been screaming to the internal audit/fraud group that there was a problem. Especially considering the charge was more than the entire GDP of the world.
Well... The pack of ciggs could have been made of solid latinum... Just a though
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Re: Banking Crisis II

Post by TheGunslinger » Wed Jul 15, 2009 6:16 pm

Man, that's awesome! :lol:

I'd love to have a limit like that on my card - the interest on that alone would be more than the GDP of the world each day!

Hope the intergalactic space council is good for it!
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Re: Banking Crisis II

Post by raptor » Wed Jul 15, 2009 7:30 pm

The real story is more interesting than my hypothesis. It seems several people had this same charge today.

http://www.theregister.co.uk/2009/07/15 ... vercharge/" onclick="window.open(this.href);return false;

"Late yesterday, July 13, a temporary programming error at Visa Debit Processing Services, caused some transactions to be inaccurately posted to a small number of Visa prepaid accounts," a statement issued on Tuesday said. "The technical glitch, which impacted fewer than 13,000 Visa prepaid transactions, has been corrected and erroneous postings have been removed. Importantly, this incident had no financial impact on Visa prepaid cardholders."


http://www.msnbc.msn.com/id/31920273/ns ... eird_news/" onclick="window.open(this.href);return false;

Lets see 13,000 card holders on July 13 could be a pattern...... Meanwhile in other news the US government reported that consumer spending in July through July 13 saw a huge upswing, over a 1,000,000% increase, over the entire year of 2009...:lol:

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Re: Banking Crisis II

Post by flyingredgoat » Wed Jul 15, 2009 8:19 pm

raptor wrote:The real story is more interesting than my hypothesis. It seems several people had this same charge today.

http://www.theregister.co.uk/2009/07/15 ... vercharge/" onclick="window.open(this.href);return false;

"Late yesterday, July 13, a temporary programming error at Visa Debit Processing Services, caused some transactions to be inaccurately posted to a small number of Visa prepaid accounts," a statement issued on Tuesday said. "The technical glitch, which impacted fewer than 13,000 Visa prepaid transactions, has been corrected and erroneous postings have been removed. Importantly, this incident had no financial impact on Visa prepaid cardholders."


http://www.msnbc.msn.com/id/31920273/ns ... eird_news/" onclick="window.open(this.href);return false;

Lets see 13,000 card holders on July 13 could be a pattern...... Meanwhile in other news the US government reported that consumer spending in July through July 13 saw a huge upswing, over a 1,000,000% increase, over the entire year of 2009...:lol:
I liked your idea better. I would have never thought of it if it would have happened to me. I'll be on guard now though. Especially if I get any quadrillion charges. :lol:

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Re: Banking Crisis II

Post by raptor » Thu Jul 16, 2009 9:47 am

Back on track and topic.

Apparently CIT has not been deemed CIT as not being too big to fail. The Treasury has refused to provide additional loans and it appears as though CIT will file for bankruptcy.

http://finance.yahoo.com/news/CIT-wont- ... et=&ccode=" onclick="window.open(this.href);return false;

I do not think this bankruptcy will impact the financial markets to the extent that Lehman did, since CIT is much smaller, but a bankruptcy filing will impact the businesses that rely on CIT for financing. These companies will have few options if because of the bankruptcy their lines of credit are reduced or capped at existing levels.

Nevertheless the situation bears watching and caution.

Another link:
http://www.nytimes.com/2009/07/17/business/17cit.html" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by naegling62 » Thu Jul 16, 2009 11:29 am

New jobs map ya'll might find intresting.
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Re: Banking Crisis II

Post by raptor » Thu Jul 16, 2009 6:24 pm

CIT nudges closer to bankruptcy.

I think this is indeed a lose-lose for the US treasury. anything they do or do not do will be criticized. I suspect there will be no rabbit coming out of hat on this one.

http://www.reuters.com/article/ousiv/id ... 5P20090716" onclick="window.open(this.href);return false;

As for the fall out of a CIT bankruptcy I suspect we will survive it albeit with more unemployment as a result. There is not much available credit if your primary business collateral is accounts receivables. I suspect many CIT customers maybe not right away but quickly will run into credit issues.

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Re: Banking Crisis II

Post by raptor » Fri Jul 17, 2009 5:44 pm

Two bank failures today. I am a little surprised that CIT is not one, but then again since they have TARP funds I suspect that decision is being made above the FDIC's pay grade.

The first bank is concidentially:

BankFirst, Sioux Falls, South Dakota, was closed today by the South Dakota Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Alerus Financial, National Association, Grand Forks, North Dakota, to assume all of the deposits of BankFirst.

http://www.fdic.gov/news/news/press/2009/pr09124.html" onclick="window.open(this.href);return false;

The second bank:

First Piedmont Bank, Winder, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First American Bank and Trust Company, Athens, Georgia, to assume all of the deposits of First Piedmont Bank.

http://www.fdic.gov/news/news/press/2009/pr09123.html" onclick="window.open(this.href);return false;

The good news in these failures at least for depositors is that other banks ahve taken over their operations.

This brings the number of closed banks to 55 this year.

Guaranty Financial Group Inc. is a Texas bank that we should expect to see on the bank failure list at least based upon their public statements.

http://www.dallasnews.com/sharedcontent ... f5e78.html" onclick="window.open(this.href);return false;

Guaranty recently said it was discussing an "open bank assistance" plan with the Federal Deposit Insurance Corp. and the Office of Thrift Supervision. Under that arrangement, Guaranty would raise additional capital from investors while the FDIC would absorb a portion of the company's losses.

Keep your funds under FDIC limits and if you bank with Guaranty Financial Group Inc. consider moving your deposits.

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Re: Banking Crisis II

Post by raptor » Sat Jul 18, 2009 2:08 pm

I posted too soon there were 2 more banks that failed Friday in California after I posted yesterday. Sorry about that.

Here is information on the other 2 banks.

The Vineyard Bank:

Vineyard Bank, National Association, Rancho Cucamonga, California, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with California Bank & Trust, San Diego, California, to assume all of the deposits of Vineyard Bank, N.A., excluding those from brokers.

Temecula Valley Bank:

Temecula Valley Bank, Temecula, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank and Trust Company, Raleigh, North Carolina, to assume all of the deposits of Temecula Valley Bank, excluding those from brokers.

http://www.fdic.gov/bank/individual/fai ... klist.html" onclick="window.open(this.href);return false;

This brings the number of failed banks to 57 in 2009.These four bank failures will cost the FDIC fund nearly $1.1 billion, bringing the total cost for failed banks to $13.4 billion for 2009. Let me point out the obvious; the cost to the FDIC is passed along to banks ultimately in increased insurance premiums or in taxpayer subsidies. Either way these costs eventually get passed along to consumers &/or taxpayers...us.

A link to failed banks in 2009:
http://www.thestreet.com/tsc/common/ima ... _flash.swf" onclick="window.open(this.href);return false;

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Re: Banking Crisis II

Post by fun4wheelerguy » Sat Jul 18, 2009 10:39 pm

I just got this from in an email from a good friend. Sounds like the SHTF very soon ! It is very coincidental to what is happening right now.




Bill: Chapman, Schultz, and Willie are no fools. They are three of the finest analysts out there, and THEY have a great deal of credibility. So, a bank holiday is definitely on the table. The first depression wiped out the so-called small country farmer banks all over the USA. That was by design. This allowed the FED to gain more control over the monetary system by eliminating the mom & pops, and replacing them with regional banks under the control of the FED. Today we are about to see "the kill shot." Those banks not under the control of the FED will be soon. Tom


Subject: $ Possible Bank Holiday in Sept.


When men with proven records established over lengthy careers lay thier reputations on the line I have to listen. These words come from Harry Schultz and Bob Chapman. This time the game is indeed for all the marbles.



BRACE FOR BANK SHUTDOWN

Harry Schultz and Bob Chapman have revealed some harsh plans for a temporary US bank system shutdown on or about September 2009. The story has been promoted by Peter Brimelow on MarketWatch for further publicity. See "Latest Schultz Shock: a Bank Holiday" which explains the US State Dept tipoff to the many US Embassies. (CLICK HERE) The July Hat Trick Letter cites multiple confirmations solicited and given. My analysis goes on about speculation as to the motive, implementation, cover for criminal activity, and market impact.

The USDollar would likely suffer a sudden quantum drop devaluation, followed by incredible pressure to avert USTreasury default. Despite the mockery in my email inbox for over two years. This inevitable disaster of upcoming USTreasury default is preparing to unfold. Creditors will show their strength very soon, very soon! The unintended consequences would be endless, not the least of which might be final declaration of state of emergency state by state, or martial law nationally.

Attempts at capital controls should be on the table of discussion soon, but that comes with a monumental backfire waiting to happen, as implementation seems next to impossible in less than two years time. Look for implementation of numerous plans to be circumvented by the reality of market forces, like elimination of the IRS-enforced income taxes in favor of a Value Added Tax nationally.

CHAOS WILL PREVAIL WITHIN SEVERAL MONTHS, PERHAPS A YEAR AT MOST. My deep suspicion is that a bank holiday would enable the forced merger of reasonably healthy banks across the nation with the dead zombies on Wall Street, to further spread their disease. These followers are an international criminal cabal posing as our government. They are following the Mussolini Fascist Business Model.

On the more local level, as my friend SteveK says, "It is my belief that as the system continues breaking apart the so-called 'authorities' will not have the resources to cope. Not even close. Chaos will reign, especially in places like East Los Angeles." Total agreement here. In fact, the breakdown will offer greater opportunity to the Powerz in (claimed, supposed) control for wildly amplified flow of rescue funds, even more to corner, confiscate, and steal. See the Iraq Reconstruction Fund, where $50 billion is missing. See the Hurricane Katrina Fund, where one dollar in three was marked as the object of fraud.

BANKS BRACE FOR NEXT CRUSHING WAVE

Details are provided in the July Hat Trick Letter on the plight of the banks. They must contend with rising prime delinquencies, rising commercial loan defaults (due to 35% property valuation declines and no funding facilities), rising Jumbo mortgage defaults, rising home equity loan defaults, and the advent of the major wave of Prime Option ARM defaults. Let's not leave out rising credit card defaults, and the unprecedented wave of small business bankruptcies. The two big assaults will clearly be delivered by the commercial loans and Prime Option ARMs, but Jumbo losses might creep up to challenge for the top ignominy.

The insane Option mortgage loan is the major time bomb that finally has entered the building for bankersters. Here is a shocker statistic: the continued spike in the delinquency rate is growing worse for prime mortgage loans. Their DQ rate has risen astoundingly in the last three years, spiking to nearly 5.94% in May. The combination salvos will be deadly. The banks masquerade as solvent, but are not, despite the Stress Test charade. With the phony accounting rule change to help lift the bank stocks, they were able to fleece investors with overpriced stock sales on dead banks.

Big banks are hoarding reserves, placing them under the watchful care of the USFed. The big banks probably are lying in wait like lions, watching and waiting for the regional banks, the mid-sized banks, to suffer painful commercial loan losses. Then the big banks will swoop down and acquire the regional banks at distress level prices, using their vast funds held at the USFed. THIS IS THE GRAND BANK CONSOLIDATION PLAN. Recall that the banking system has 96% of its reserves sequestered at the USFed. The USDept Treasury under syndicate boss Paulson ordered the participating TARP fund recipients not to open the loan gates, but rather acquire banks over time patiently. So we have some hint of intentions. THE ONLY PROBLEM FOR THE BIG BANKS IS THEIR IMMINENT RUIN FROM MAJOR ADDITIONAL CRIPPLING LOSSES FROM ABOVE CITED SOURCES. They might masquerade as healthy solvent banks, but they are actually large seaside cottages whose foundations washed away to sea long ago. The pillars visible to the beachcombing public are mere facades. Their attempts to put fresh paint on the facades do not work, since one cannot apply paint to an underwater surface.

The big banks have generously agreed to assist the State of California in the IOU coupon issuance. JPMorgan Chase, Bank of America, Wells Fargo, and Union Bank consented to accept the registered warrants as they are officially called, until last Friday July 10th. The IOUs ain't legal tender, but interest bearing warrants in coupon form. Hmm! No Constitutional challenge there! The $3.4 billion in such coupons have floated. The process is opening Pandora's Box and raises numerous questions. Big banks do not carry large exposure, but the development is one more log on a burning bonfire. Thanks to local Californians who supplied rich information, the July report covers some interesting angles. A side market, for instance, has emerged on Craigslist even after eBay was blocked by the intrepid lapdog SEC. In some cases taxes can be paid with these IOU coupons. Reminds me of a circus with numerous tents. The other tents feature migrant workers who have begun to demand cash sent from Latin American home areas, never seen before. The mortgage foreclosure endless wave of destruction continues to wreak havoc upon California. The state is one of the most besieged, with metropolitan Los Angeles the epicenter for damage. As property values continue to fall, now at nearly 40% in the Golden State, its economy and households and banks all suffer death throes, with no exaggeration.
Brett

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Re: Banking Crisis II

Post by raptor » Sat Jul 18, 2009 11:33 pm

This email post has been reported verbatim on several sites. Simply Google the email and you will see this at many sites.

They frequently also mention the rumor that US Embassies are stockpiling local currency which was just that a rumor.

The real data comes from The Harry Schultz Letter (HSL). Peter Brimelow at Market watch has a discussion about this same letter. Now HSL did predict the 2008 market issues but them so did a few others.

http://www.marketwatch.com/story/schult ... -of-future" onclick="window.open(this.href);return false;

Note the HSL web site also references Peter Brimelow as primary recommendation.

The email is not exactly what HSL says. It does mention a suspicion about a bank holiday. It does mention the US Embassy currency hoarding rumor as a rumor.
It also talks about probabilities:

Net deflation is a maybe 35% risk, due to toxics and/or deepening depression. Bit more likely, we'll slowly creep up to a dangerous 4.5% inflation on average, medium-term. But the wild card is the currency risk, which has a 50% (?) chance of boiling over and causing literally overnight (i.e. 24 hours) mega inflation in the asset markets."



This BTW is the letter closing with its market out look and recommend asset mix:

Nevertheless, in the very short term, HSL's charting leads it to say: "we MAY not get a new bear market decline that many bears are predicting. Likewise, DJIA & S&P500 may build a Head-and Shoulders right shoulder."

HSL's currently recommended allocation:

• 35%-45% Government notes, bills and bonds. (Not U.S.)

• 8%-10% Stocks (non-golds).

• 10%-30% Commodities, via futures, commodity stocks and/or physical assets.

• 35%-45% Gold stocks and bullion.

• 0-5% Bear stock protection via inverse ETFs like ProShares UltraShort QQQ


Clearly with this allocation HSL is saying be invested out of the US dollar either in foreign currency, commodities and PM.

The following is my opinion on this email and HSL's conclusions:

I agree with HSL that the banking system is no where near healthy. The current bank earnings numbers have been bolstered by the reversal of the "mark to market" rule. This rule change along with cheap Fed money and improve markets have bolstered bank profits but has not solved any of the core problems. I also obviously believe many more banks will fail including some large banks.

I agree with HSL that inflation will likely be an issue, but not today. I think that inflation is inevitable, the real question is when, how much and how long will it last. Nevertheless with employment nearing 10% nationwide I see more downward pressure on prices than upward pressure, that includes commodity prices.

I disagree with HSL that a bank holiday is imminent though I certainly agree a bank holiday is possible and have said so many times. I disagree that a bank holiday would be for an "indefinite length", but I do think it is clearly possible.

I do not see a US currency collapse as likely within the short term (remainder of 2009) though I certainly do believe it is possible and note that short term HSL does believe a collapse is likely.

Overall this is a time to be cautious but not hysterical.

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Re: Banking Crisis II

Post by TheFreakinBear » Sun Jul 19, 2009 12:20 am

I think that all of these publications and news organizations are making people worry to keep people watching to be honest. If people don't begin to spend money like they used to, in a large scale, then we're going to see issues. With those who have jobs hardly spending money in excess and using credit more and then with people who have lost their jobs or on unemployment, they only use the money for what they have to and nothing more or are at least VERY conservative with their money. The news organizations blow everything out of proportion to get viewers to watch/read/listen to them instead of their competitors.

I don't buy in to any of this. I realize the market is rough but cmon.

EDITTED TO ADD:

I have nothing but the up most respect for Raptor and am not jabbing at him but the situation at hand.
Last edited by TheFreakinBear on Sun Jul 19, 2009 8:42 am, edited 1 time in total.
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Re: Banking Crisis II

Post by flyingredgoat » Sun Jul 19, 2009 1:57 am

During a bank holiday, you can still write checks. They can't cash them. If it should happen, just postdate checks for a couple of days after the bank holiday. That way, your paychecks clear before your checks come due.

Also, with a federally mandated bank holiday, there will be no late fees. Gives some people a chance to catch up.

Finally, as so many have said before, keep some cash handy.

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Re: Banking Crisis II

Post by TheFreakinBear » Sun Jul 19, 2009 8:41 am

What about debit cards?
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Re: Banking Crisis II

Post by flyingredgoat » Sun Jul 19, 2009 10:48 am

TheFreakinBear wrote:What about debit cards?
No one really knows. If they shut down debit cards you will have to walk in to the corner store to pay for your gas. Make sure you know which ones take checks.

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Re: Banking Crisis II

Post by raptor » Sun Jul 19, 2009 11:47 am

TheFreakinBear I take no offense to your comments. I agree with the sentiment.

That said I agree the news does sensationalize all events, however the financial turmoil we now face is not a typical recession. We are outside of the box labeled normal and are in uncharted territory in many respects. That does not mean this is TEOTWAWKI, only that we are in difficult financial times and a good prepper should take reasonable precautions.

I also agree with you TheFreakinBear that many people jump on the monetary collapse bandwagon and make claims that are intended to sell newsletters and subscriptions.
Several people did correctly predict the current economic fiasco, however, just because they were correct about that does not mean everything they say is right. It is opinion hopefully based upon logic and reasonable assumptions, but not always. The post to which I was responding was someone taking what one economist said out of context and ignoring key elements. I would point out the 15% portfolio allocation to non-gold stocks and inverse ETFs as proof that the person does not believe a true banking system meltdown will occur. A stock position even an inverse ETF position is useless if you cannot sell the position to cash in your gains. Besides the HSL newsletter is expressing an opinion, nothing more. Opinions are like assholes everyone has one.

That said we do not have a lot of information about bank holidays. The last nationwide one was in the 1930's. The last statewide one was in Rhode Island in the 1990's and affected only state banks. However, let me say I DO NOT think a bank holiday is imminent (at least through the 3rd quarter of 2009).

I would suspect that a bank holiday 1930's style would mean that debit and credit cards would cease to function. Although I could see the credit card companies continuing to allow charges to be processed but since the merchants would not receive the payments from these purchases since banks would be closed I doubt anyone would accept credit cards. I think that a good plan is to have at least 1 or 2 weeks of expenses in cash is a prudent plan. This is also about how cash you should have in your BOB anyway.

Edited to correct ZS'er's name; with appologies to TheFreakinBear.
Last edited by raptor on Sun Jul 19, 2009 5:30 pm, edited 2 times in total.

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