Banks Collapsing

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Interesting Piece of news re Banks in the USofA

And down goes US Bank CORUS, making it the 90th Bank in the US for 2009 to be taken over by the regulators

In Feb disclosed that it had a half-billion-dollar loan exposure from lending to metro Atlanta. Corus Bank was Atlanta's main lender for several of its largest and highest-profile condo projects. It also had $1 billion in loans in the troubled South Florida condo market. the cost to the FDIc was approx $1.7B

The number of troubled banks on the list has now risen to 416, up from 252 from last year, nearly a 40% increase. "Troubled assets" at these banks now total $299.8 billion.
 
today there is an interesting interview with nobel price Stiglitz on bloomberg, may be he is a bit too pessimistic on banks but I would agree fundamental now are not better then pre GFC in 2007 and I agree that is wrong to fucus the health and welfare of the economy from gdp growth:
...
Sarkozy said today in a speech in Paris that focusing on GDP as the main measure of prosperity had helped to trigger the financial crisis. He ordered France’s statistics agency to integrate the findings of Stiglitz’s study into its economic analysis.

Assessing government’s contribution to economic output, which ranges from 39 percent in the U.S. to 48 percent in France, is one of the shortcomings of the GDP model, as is its difficulty in estimating improvements in the quality of products such as cars instead of just quantity, Stiglitz said.

Similarly, increased household debt may drive up output numbers, even though that doesn’t amount to a real increase in wealth, he added.

While Stiglitz doesn’t recommend dropping GDP altogether, he wants governments to consider such matters, along with issues of environmental sustainability, in policy making.
this bit is sooo much like Australian government and press:
“Most governments make a fetish out of it (GDP). If you take one message out of our report, make it avoid GDP fetishism,” he said. “The message is to encourage political leaders away from that.”
 
Hey, that's great Boz.

I've been saying that. Using GDP as a measure of economic health is crazy. Just look at Ireland and Iceland? Both had higher GDP's per capita than Australia a year ago.


See ya's.
 
Was Stiglit in Oz last week? He was on the Biz channel and was saying there was much still to do in banking. The US has done nothing to clip the wings of the "Too big to fail" group. There is still no moral hazard or criminal sanctions to stop them continuing as they have done. Indeed they are going to great lengths to ensure that little is done.

The big US banks are the greatest contributors to the party's funds. The US is very corrupt and has the gall to preach to others. :(
 
Daily reckoning

This is discussed there as well. Interesting point made:

An analyst at JPMorgan estimates that American and European banks will pay their 141,000 investment banking employees $77 billion in 2011...or about $543,000 per employee. Since they pay out so much of what they earn, they lack the capital to survive a crisis. But when they're threatened with extinction, the feds step in to bail them out. No wonder they have no fear of a meltdown...
 
Hey, that's great Boz.

I've been saying that. Using GDP as a measure of economic health is crazy. Just look at Ireland and Iceland? Both had higher GDP's per capita than Australia a year ago.


See ya's.

Until some economist comes up with a better idea, we're stuck with it.

Any suggestions?

Regards JO
 
Was Stiglit in Oz last week? He was on the Biz channel and was saying there was much still to do in banking. The US has done nothing to clip the wings of the "Too big to fail" group. There is still no moral hazard or criminal sanctions to stop them continuing as they have done. Indeed they are going to great lengths to ensure that little is done.

The big US banks are the greatest contributors to the party's funds. The US is very corrupt and has the gall to preach to others. :(

i'd love to give you kudos but i'm not allowed.

notice that many many many fed reserve and obama financial folk are ex-goldman sachs. amazing how lehman - goldman sach's competition - was allowed to fail with such heat and fury, but GS are clean skinned?

funny ....not.... how it all comes back to the eleven.
 
hi all
I think you have missed some thing here
these banks have bad debt
you can buy for .2% of book value
if you bought the book and left the debts there.
and left the people or people in the property on the books and just took in the income the return is well over the cash input
and at some stage the value will go up and then resell the book
for me you need to see the lowest cost of the book and put in a bid
 
Until some economist comes up with a better idea, we're stuck with it.

Any suggestions?

Regards JO


Good question.

Dunno.

Check out this list of GDP per capita from 2008.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html


1 Liechtenstein... $ 118,000 2007 est.
2 Qatar.............. $ 110,700 2008 est.
3 Luxembourg....... $ 81,000 2008 est.
4 Bermuda........... $ 69,900 2004 est.
5 Norway............. $ 59,300 2008 est.
6 Kuwait.............. $ 57,400 2008 est.
9 Singapore.......... $ 51,500 2008 est.
10 United States... $ 46,900 2008 est.
11 Ireland............. $ 45,300 2008 est.
17 Iceland............ $ 41,800 2008 est.
22 Canada............ $ 39,100 2008 est.
25 Australia.......... $ 38,100 2008 est.
26 Sweden........... $ 38,100 2008 est.
27 Belgium............ $ 37,400 2008 est.
32 United Kingdom.. $ 36,500 2008 est.
34 Germany.......... $ 35,400 2008 est.
36 Spain.............. $ 34,700 2008 est.
37 Japan.............. $ 34,000 2008 est.
39 France............. $ 33,200 2008 est.
40 Greece............. $ 32,000 2008 est.
41 Italy................ $ 31,300 2008 est.
42 Taiwan............ $ 31,100 2008 est.
50 New Zealand..... $ 28,000 2008 est.
51 Korea, South..... $ 27,600 2008 est.
59 Saudi Arabia...... $ 20,500 2008 est.
73 Russia............. $ 16,100 2008 est.
80 Argentina......... $ 14,200 2008 est.
81 Mexico............ $ 14,200 2008 est.
133 China.............. $ 6,000 2008 est.


Ireland and Iceland are there above Australia. We now know that it was all a hoax. They had this massive GDP output, but it was all based on debt and consumption and services. There was not much real industry actually creating something that the world needed.

And China is way down. But nearly half the workforce is peasant farmers on tiny plots of dirt producing hardly anything.

GDP is fine I think to show how productive an economy is. But we also need to somehow take into account how much debt has been used to create it, and if all the productivity is just internal services and consumption.


Too hard for me.


See ya's.
 
Last edited:
Hi all,

TC,

Using GDP as a measure of economic health is crazy. Just look at Ireland and Iceland?

There was not much real industry actually creating something that the world needed.

Couldn't agree more. I have always had a problem with GDP per capita, especially when Japan, whose people live in shoe boxes and have over the top expenses for food, were regarded as having a higher 'standard of living' than us.

If we ditch GDP as a measure, what can/should we use?? any suggestions??? I agree we ditch though!!

bye
 
Was Stiglit in Oz last week? He was on the Biz channel and was saying there was much still to do in banking. The US has done nothing to clip the wings of the "Too big to fail" group. There is still no moral hazard or criminal sanctions to stop them continuing as they have done. Indeed they are going to great lengths to ensure that little is done.
The big US banks are the greatest contributors to the party's funds. The US is very corrupt and has the gall to preach to others. :(

And Mr Obama "Change" has changed his tune, not that i did'nt knew he was full of it.
 
today there is an interesting interview with nobel price Stiglitz on bloomberg, may be he is a bit too pessimistic on banks but I would agree fundamental now are not better then pre GFC in 2007 and I agree that is wrong to fucus the health and welfare of the economy from gdp growth:

this bit is sooo much like Australian government and press:

Ross Gittins on the AGE link brings up the GDP as a measuring of welbeing and economy growth (wonder if he read my posts...:cool:), as like other australians crappy opinionists he completely miss the point that gdp growth doesn't consider debt and money growth (at least for an extended period of time), and of course Stiglitz talk about it (check my bloomberg link about it), why Gittins is hiding debt in his "beyond gdp" report?
 
Greed is God again, and we have learned nothing

Greed is God again, and we have learned nothing

New Zealand's conservative Prime Minister, John Key, a former investment banker, summed up the state of the world financial system brilliantly during a recent visit to Sydney: "Six months ago, The Wall Street Journal came to interview me and asked me if capitalism was dead. Now Goldman Sachs is paying record bonuses."

After a near-death experience, the world financial system is returning to business as usual - only worse.

The Group of 20 countries, meeting at the end of this week in Pittsburgh, is supposed to be restructuring the system so that it "never happens again". Or, as Barack Obama put it last week: "We will not go back to the days of reckless behaviour and unchecked excess that was at the heart of this crisis."

But we already are. Even if the G20 succeeds in every aspect of its well-intentioned agenda this week, the two greatest systemic problems stand unchanged and uncorrected.

The big investment banks, and Goldman Sachs is the biggest of them, have feasted on public money and, now, restored to strength, are throwing themselves back into the markets as recklessly as ever - only more so
 
Its always interesting to hear continued 'fear', especially when its mixed with naivety or extrapolation based on near term data bias.

Attached is a graph of bank failures from 1934-2007.

Sure the current environment posses risks, but we have been their before.
 

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They are now up to 177 Banks with the "Commerce Bank of Southwest Florida" going under on NOVEMBER 20th 2009


images


Interesting Piece of news re Banks in the USofA

And down goes US Bank CORUS, making it the 90th Bank in the US for 2009 to be taken over by the regulators

In Feb disclosed that it had a half-billion-dollar loan exposure from lending to metro Atlanta. Corus Bank was Atlanta's main lender for several of its largest and highest-profile condo projects. It also had $1 billion in loans in the troubled South Florida condo market. the cost to the FDIc was approx $1.7B

The number of troubled banks on the list has now risen to 416, up from 252 from last year, nearly a 40% increase. "Troubled assets" at these banks now total $299.8 billion.
 
It's reckoned that banks have admitted to half of their bad debts, so we've got a long way to go yet.

As for Goldman Sachs, they're received a lot more in terms of government bailout than they admit to. Nomi Prins says that they're received on the order of $52 billion from the US Treasury, of which they've paid back $12 billion.

See:

http://www.nomiprins.com/bailout.html

I suspect that a lot of the big investment bank profits, and associated bonuses, are off the back of this.

The trouble with the current climate is that I can't see much offering good value. There's a lot of money (from quantitative easing and the remnants of the credit boom) in the system looking for a home. Shares, property and gold all seem expensive.
 
Goldman Sachs RUN the Federal Reserve.

check how many ex Goldman Sachs minions work for Obama and the Federal reserve.

Coincidence? only if you believe that after falling down you will hurt yourself, is a coincidence.
 
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