Bad Banks Bad News Bad Day Bad End.
News from London is that the Gordon Brown government's Treasury run by Alistair Darling, which has a cozy relationship with the Bank of England (right) has just told the U.K. banks
that it will create a Bad Bank to store all the toxic waste still inside their portfolios. The British "Bad Bank" is the forerunner of the "Bad Bank" that Tim Geithner at the U.S. Treasury will create once he finishes explaining how he was personally unusually creative on his own taxes from 2001-2005 and gains a confirmation from the timid and confused Senate. The Geithner Bad Bank, let us name it the Tim Geithner/Barack Obama BaBa, will dwarf the Alistair Darling/Gordon Brown BaBa now constructed in London. The estimate of the bill in Old Blighty is now 33k pounds per citizen, which is less than $50k. Guess what the BaBa will cost our team? My guess is $300k per ctizen, enough to beggar the country until 2030, barring worse blows. And barring worse blows is fantasy. The least we can expect is a few wars. An asteroid strike begins to look to be an attractive distraction and much cheaper.
From the Critically Witty Calculated Risk Site:
From the Telegraph: £200bn to save banks from bad debt
In an attempt to restore confidence within the financial sector, the Treasury will tell the banks of its plan on Saturday. It aims to announce details of the rescue package publicly early next week.That is equivalent to a total U.S. bailout of almost $10 trillion (about 2/3 of GDP).
The bad bank plan has climbed the political agenda in the past couple of weeks as the Government has become aware of the extent of the lenders' bad debts.
Sources said that a bad bank would have to take on about £200 billion of toxic assets. That would take the Government's total commitment to solving the banking crisis to almost £1 trillion in taxpayers' money that has either been spent or pledged.
That equates to about £33,000 per taxpayer. The total sum is equivalent to more than two-thirds of Britain's annual GDP of £1.4 trillion.
Cheer Up.
Wit will out. Save the candle. Just click and enjoy: This genius is about one year old, never more spot on:
John, I'm telling you, that asteroid is going to be our Santa Claus by the time it gets here. I'm curious, the $300K each of us will owe, is that just starting now (so it's on top of what we owed before TARP and what additional debt we accrued by TARP), or is it cumulative, inclusive of pre-TARP, TARP and the new Bad Bank?
On a different note, you say Bad Bank as if there's another kind? Could you elaborate, please?
How long until we see million dollar notes start floating through the systems? Billions are spoken of as pocket change while trillions are something you actually have to reach into the wallet for.
Luscious! A billion gets you a candy bar and soft drink. A billion gets a temporary fix for the pervasive emptiness in the halls and the malls, that is, if they all haven't been turned into government offices... by the people who are for the people. It's felt in the belly, too. Too dark and dreary to speak of now.
I heard this AM of imperfect declarations, penned by imperfect men with imperfect visions of a nation and how it is deserving of being preserved. Yet, there needs to be some changes made and lots of taffy pull parties. Stretch and work it, stretch it. It's pliant. It's tensile strength is immeasurable. We can work this out. We can change America and we can change the world. Ominous sounding words with mouthfuls of laffy taffy while a 150 million inaugural spectacular rolls into town.
Zimbabwe issues first 100 trillion note worth 30 USD. There is nothing to buy with it.
How much is a Coke and candy in MugabeLandy?
Is there another cut of the rock on Rushmore? Make room or do we exchange a new face for one of them.
Lovely gallows humor, John! It puts me in mind of the "The Emperor Has No Clothes" tale once again. Except, this time we turn it on its head. First, there was America, the "shining city on the hill" with its flashy cars and highways; a chicken in every pot and a fully paid up Netflix subscription (for the next ten years) accredited to every household.
Then, one day, one of the slumdogs stood up and started barking. "It’s all built on 'smoke and mirrors,” he proclaimed. "Look people! The Emperor (America) has no clothes!" And the people looked at their 401K's and they saw he was right. And a dark, toxic cloud descended on the nation. And all the shiny cars disappeared from its ribbon-like highways. And all the great mansions fell into disrepair and weeds took seed in their lawns and gardens.
The slumdog was exiled to an exotic island where he would remain for 40 days and forty nights. When he returned, the people marveled over his lithe, sun-tanned body. As it was winter, they presented him with an “Amazing Technicolor Dreamcoat”. The coat represented a new reality; each color, a new, as of yet unarticulated policy. ...and the people believed and organized the greatest party the world would ever see. No expense would be spared to affirm the peoples' new-found faith. A savior had come! A savior, who would be savior until the time someone else stands up and says, "Look people, the slumdog has no clothes!"
The moral of the story (in case someone has not yet understood) is that everything in life is based on faith. Once faith has been broken, there is no turning back. We're into a new reality, folks! There’s no use in pointing fingers anymore. “Any Dream Will Do”, after all. May each and every one of you prosper despite what Jesus said about the poor always being with you.
Re: the clip. The Mentalist (CBS Tues) had an episode last week on black magic. The crime: a teen was beaten to death and found with magic paraphernalia surrounding his body. The alleged perp: an twenty-something witch who had a large following among the teens in the community. She admits to casting a "killing spell" on the dead boy. One of the detectives in the unit to which the mentalist is adjunct is spooked by all this talk of black magic.
Mentalist, trying to reassure detective: "You don't really believe in black magic do you?"
Detective: "If there were such things as dark forces, there could be people who manipulate them for their own ends."
Mentalist (without missing a beat): "They're called investment bankers."
Mr. Goodwill Hunting invited Mr. Tibbs to dinner to find out what the Truth IS. Because in the day they used to speak Truth to Power. Mr. Tibbs responded you want the truth ! You can’t handle the Truth, cause last time we were debating what the meaning of “is” is. But by the way we are not in Kansas anymore so goodbye Yellow brick and the truth lies bleeding in the sand like a candle blowing in the wind. You see No way out so look at the Big clock for we are Back to the future. With the big three going the way of the Deloren.
Well the find some life on mars so here is to the Rocket man can you here Major Tom well tall the young dudes carry the news because we are all John Galts and Winnie make sure that the honey is not synthetic and made in China with malomine.
That small portion of the Standard Model of American History not concerned with the saintliness of Abraham Lincoln holds that World War Two ended the Depression. If so, then Mr. Batchelor's killer asteroid should nicely take care of our economic woes: When the smoke clears and our insurance checks from Bastiat Insurance Co. arrive in the mail we will all go buy new windows.
Only a reactionary simpleton, of course, would believe that America's economic recovery and rise to dominance had anything whatsoever to do with her possession of fifty percent of the globe's surviving postwar industrial base, the rest of the developed world having pretty much been transformed into a dirty ashtray.
Perhaps, Obama's wishes will be fulfilled. He can model his Presidency on his idol, Abraham Lincoln as he presides over the Second American Civil War. With unrestrained power concentrated in Washington, enemies foreign and domestic chipping away at the foundations of a Great Nation and Mexico descending into a failed state like Pakistan and Afghanistan, run by drug lords armed and financed by Hugo Chavez, Iran, and Mother Russia. The core will hold. The Red States will begin to talk of States RIghts and Secession, leaving the Blue States along the coasts and the Northern Line to wallow in their Welfarisme. How far will Abe-ama go to try and force the nation to hold together? Will the military take orders from the man who refuses to show the courts his authentic birth certificate? Destiny awaits. Congress and the President Elect continue to strike the wedge into the trunk.
So, if the US treasury or Federal Reserve is going to absorb all this Toxic debt, why did we spend Trillions in TARP Dollars?
Will Foreign Governments and Banks burned by CDOs try to blame and possibly sue those responsible (GWBush WJClinton Pelosi Dodd, CEOs, Chief Risk Officers, Greenspan, and B. Franks)? A case can be made for economic warfare, and Socialists in The Hague may actually allow a case to be brought up. ICJ sometimes allows hopeless cases to send a message.
CEOs (except for B. Madoff), Senators, and Representatives still are in positions of power and are not ridiculed or asked to resign. Why?
I just cashed out of my Mutual Funds. And yes, I bought high and sold low. And no, I don’t need the money (now). My financial advisor is encouraging me to re-invest soon. “Now, that most stocks are cheaper than they have been in years,” he says. He, like Kudlow and Cramer, sees boom years ahead. He cites all the old familiar cycles and the rules that apply to them – diversification; optimal (%) risk exposure; dollar cost averaging; etc. These, if observed religiously, have traditionally been very effective tools for investors. But the game has changed. Whereas we've been observing the rules of chess all these years, the (chess) pieces have been yanked away and switched with the indistinguishable black and white tokens used in checkers. Using the rules governing chess is not likely to get you very far on a checkers board.
Everything has changed with the introduction of these endless bailout schemes. Every U.S. citizen is now approximately $33,000 in the hole and sinking fast. The government's answer to the problem of decreased revenues flows into its own coffers is simply to print more paper. Money that was once based on the gold standard; then, on the value of work (productivity), has henceforth been decreed to be based on nothing. Our leaders have succumbed to the notion that paper pictures of Presidents can simply be spread around to anyone needing to wrap a fish or line a birdcage - all, in the name of equality - and, as pertains to investing, risk (especially should it result in loss) can no longer be tolerated. When you eliminate loss, you also eliminate gain. When everyone is seen as financially equal, no one has the opportunity of escaping the lowest common denominator. All this adds up to Marxism 101. And don't forget, among the protocol of Marxism is also revolution by violent means.
I'm not trying to be overly dramatic - only realistic. Capitalism, as we have come to know it, has suffered a fatal blow. The ship is taking on water and sinking. Already we have witnessed the public humiliation of the giants of American industry being browbeaten by partisan congressional committees; soon the show trails of members of the Bush-Cheney administration will begin. Already, the words "czar" and "five year plan" are being used liberally to describe policy and the implementation thereof. Free speech is about to be re-defined and/or censored in the form of what has been termed the ”fairness doctrine", as it has been for years now on college campuses and in the mainstream media.
Life will continue, no doubt. But the game has changed. The ordinary citizen now finds himself at the mercy of the political winds. I honestly don't see much hope for America in the immediate future. Might as well take the money out now and use it to line the doors and windows while the rest of it burns in the Vogelzang Boxwood.
Instead of toxic banks, why not create toxic states? As the Mercury News article cited below, points out, the mortgage crisis is centered in only four states, California, Nevada, Florida, and Arizona--all of which also coincidentally happen to be overrun with illegals, but that's a topic for another day.
The failure of the defeated Confederate states--disparagingly referred to by some as the "Cotton Republics"--to ratify the Fourteenth Amendment resulted in their temporary expulsion from the Union until 1870, did it not? So why not kick the aforementioned "sand states" out of these United States and let them deal this godawful mess on their own?
Problem solved. I'm already figuring out ways to spend all that Nobel Prize money. Boo-yah!
http://www.mercurynews.com/realestatenews/ci_11475737?source=rss
Results from a recent BuzzPoll:
When asked what Barack Obama should work on the hardest to start off with, more than 50% of respondents answered "A middle class tax cut". Other items such as Iraq/Afghanistan withdrawal, Expand Healthcare, Closing Guantanamo, etc. all received less than 10% of the vote each.
Huh? Excuse me? GWB, the President for the last 8 years, has opposed all the other policy items mentioned above, and supported tax cuts, and he gets a 27% approval rating and dumped unceremoniously and replaced by a fairly radical liberal Democrat, running on the platform of Change, and the first thing people want Obama to do is work on a tax cut?
This proves to me our long-standing suspicions that if the Republican party had held its ground on taxes and TARP (for example), it would have prevailed in the 2008 election. Some people may have actually voted for Obama because they perceived him to be the more fiscally conservative of the two candidates! Amazing. (And who knows, they may have been right.)