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happiegrrrl
Trad climber
New York, NY
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Topic Author's Original Post - Sep 12, 2008 - 10:43am PT
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Hoping Bank of America will buy their in-a-shambles accounts....
Wonder what will happen with this one. And not for nothing, but even if BoA does bail their busted ass out, who's to say BoA ain't as crooked as the Enrons and others in reporting their profits.
As a small customer of BoA, I found it a little odd recently, when I went in for something related to my business account and the banker tried to sell me on the idea of maintaining TWO checking accounts.
I'd complained about the high cost of checks($70 for 100 checks) and she said "Oh - why you can have FREE checks! Just open a second check acct. You don't even need to use it..... That's what we're telling everyone to do!"
So, their books will state they have a good number more active accounts that is the reality, is all I can figure.
That, and the way they SCREWED the Fleet customers over with fees and money availability/deposits/transactions against accounts in order to steal from us via "penalties" when BoA bought Fleet, seems to me the way of doing corporate business in America these last several years has been nearly exclusively about taking the public/customers for a ride and then bailing out at the last minute before the vehicle missed the fatal turn, crashes through the guardrail and tumbles over the cliff like always happened in the 1970's movies.
Anyway...I digress. What are people's thoughts on the Lehman attempt to sell? Or is Sexy Sarah still keeping all eyes glued (away) from anything real?
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happiegrrrl
Trad climber
New York, NY
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Topic Author's Reply - Sep 12, 2008 - 01:00pm PT
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Banks seemed to be the business du jour around here the last couple of years. Almost as many new "community" banks popped up as cel phone stores.....
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SteveW
Trad climber
The state of confusion
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Sep 12, 2008 - 01:59pm PT
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Happie
I'm just curious why would they want you to open a second account, other than to be able to hit you with more service fees.
Also, haven't you ever tried buying checks from one of the many
'check printers'--do a google and I'm sure you can get more
than 70 checks for $100. I got 400 for like $35 checksunlimited.com.
I've never had any issues with any of my checks having problems
with MICR lines or anything like that.
But I can tell you, there certainly will be more bank failures in
the future. I wish that weren't the case, but wait for
a month or two, especially after the election. Things are
going to get grim, in my opinion.
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jstan
climber
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Sep 12, 2008 - 04:22pm PT
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Following up on SteveW’s post, from yesterday’s LA Times:
http://www.latimes.com/business/la-fi-briefs11-2008sep11,0,1902726.story
INSURANCE
Buffett cuts risk from bank failures
Warren E. Buffett's Berkshire Hathaway Inc. will stop selling insurance to lenders through its Kansas Bankers Surety Co. unit for deposits beyond the Federal Deposit Insurance Corp. limits.
"Eventually, we aren't going to be covering any deposits in banks," said Chuck Towle, an executive at Kansas Bankers.
The move reduces Berkshire's risk from bank failures, which are running at the fastest pace in 14 years.
END
Now there are a couple of ways to look at this, the first being the obvious desire to leave a money losing market.
But lately I have read of people questioning the government’s ability to cover all the costs coming up. Freddie and Fannie alone may require $200 billion on Sept 30, as I posted previously. (That is about equal to 20 months of Iraq war.) Are the taxpayers bailing everyone out? Which brings us to today’s paper.
http://www.latimes.com/business/investing/la-fi-lehman12-2008sep12,0,3174629.story
From that piece:
U.S. Hesitant to Continue to Help Fund Rescues
“But the Fed and the Treasury are thought to be highly reluctant to get involved in another government rescue similar to those of Bear Stearns or mortgage giants Fannie Mae and Freddie Mac last weekend.
The argument for federal aid is that a collapse of Lehman could cause a painful chain reaction in the financial system, given the extent of its financial obligations to banks, brokerages, hedge funds and other players.
But a government-assisted sale of Lehman could spark a political firestorm just days after Treasury seized Fannie and Freddie while committing to invest as much as $100 billion of taxpayers' money in each firm to keep them solvent.”
END
Surely rescuing everyone means everyone will begin to make even riskier investments. But possibly the report I read of concern that this “may swamp the ship of state” is gaining traction. Yesterday McCain promised to spend $315 billion to bring nuclear power back into the fore. That’s just for starters.
Without a doubt there is a plan to continue George Bush’s spending plans.
More of the last eight years on top of all the financial failures.
So I come back to Warren.
Possibly Warren Buffett does not want to be in the cross hairs should the FDIC find it can no longer get the funds to rescue our small savers’s accounts???
After all the big guys have been nicely rescued.
Never mind the cost of a war with Russia also mentioned in today's paper.
I don’t know. But this is beginning to feel like a meltdown.
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Flashlight
climber
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Sep 12, 2008 - 04:54pm PT
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I haven't paid for checks in 18 years.
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jbar
Mountain climber
The Dirty South
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Sep 12, 2008 - 05:06pm PT
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What are checks?
My Credit union is in another state. I haven't seen the inside of a bank in 10 years and that includes buying a house and multiple cars. I really hate it when I get my clothing allowance or rebate cheques. I'm like "what am I supposed to do with this paper thingy?" Then I have to go to the post office and buy another obsolete thing called a "stamp". Might as well have a cassette player in my car.
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jstan
climber
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Sep 12, 2008 - 05:17pm PT
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Jeff:
You know pain is a part of life. But pain for no apparent reason is called something else. Like Iraq. Masocism. If we can avoid things like Iraq and 1929 I am all for it. You don’t seem to want to avoid them however.
Now yesterday I wrote:
As a nation with some 8000 nuclear weapons which also no longer acts in its own best interest, we are unpredictable. This unpredictability, indeed, makes us dangerous. As more and more nations, some among our long term allies, also come to this conclusion, alignments all over the planet will begin to develop along this line.
You wrote:
“Stannard you seem to be losing it” – or something to that effect.
From today’s LA Times:
http://www.canberratimes.com.au/news/local/news/general/chavez-orders-us-ambassador-out-of-venezuela/1271138.aspx
“Venezuelan President Hugo Chavez expelled the US envoy to Caracas late Thursday and threatened to halt crude exports to the United States on a day he highlighted the recent arrival of two Russian Tu-160 strategic bombers.
Chavez today ordered US ambassador Patrick Duddy to leave the country within 72 hours, in a move he described as an act of solidarity with Venezuela's ally Bolivia, which also expelled its US envoy.
"Starting at this moment the Yankee ambassador in Caracas has 72 hours to leave Venezuela," Chavez said at a public event in the port city of Puerto Cabello, 120km west of Caracas.
He said it was "in solidarity" with the leftist government of President Evo Morales in Bolivia, which yesterday ordered the US ambassador to La Paz to leave. Washington late today expelled Bolivia's ambassador to the United States.”
END
Earlier I posted a report to the effect that Russia was looking for a Eurasian alliance to deal with the US. Russia views the US plan to base strategic missiles in Poland as disturbing the status quo. While Poland may feel such missiles are in its best interest it is by no means clear it is in the US interest considering the negative consequences. Russia is geographically so large bases in Poland do not provide a significant boost phase intercept capability as best I can tell.
Jeff, my prediction of yesterday appears in today’s paper. If that is losing it, I am content to find myself so.
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Jeremy Handren
climber
NV
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Sep 12, 2008 - 06:48pm PT
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I'd be interested to see an analysis of the potential scenarios, if for example the government had let Bear fail, or hadn't stepped in for Fannie and Freddie.
I've heard a lot of talk, but not much detail about what "financial meldown" would actually entail.
Anyone got any good links?
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jstan
climber
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Sep 12, 2008 - 08:37pm PT
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JH:
I am looking for scenario descriptions with some dynamical analysis also. I used the term to describe a situation where people feel the very last thing they thought they could trust for sure - has just collapsed. If you look around right now people doubt just about everything except the US government. But, right now, a few people are beginning to ask.
JE is an economist so maybe he can instruct us. From what little I know it seems the government will do anything to keep the ball from falling-today. It never asks what about tomorrow. In a pinch they will keep on making money cheap which got us in trouble in the first place. if no one is willing to sit on all those dollars, like China, Japan, and South Korea by buying our Federal debt, we get inflation. Now if the countries holding our dollar denominated debt
don't like to see their value evaporating OR
don't like where our foreign policy is pushing them
they have a lever already in their hand. They start selling our debt and drive up market rates on those securities. Our taxes go up and our economy takes a dive, mind you taking a lot of the world along for the ride.
So from the dynamical perspective the foreign governments that have their own shaky positions and export a lot to the US will be adverse to precipitating anything. Governments that are a little sounder may have more options. It is a Hob's choice. HOWEVER, if it is felt the US's aggressive behavior or unstable leadership is leading us toward really serious military conflict, that Hob's choice may just get resolved. A desperate decision like that can unpin the present stasis.
Most of the people living outside the US do not feel there is a vacuum cleaner in the sky which will come along at the last moment and rescue them. Rescue them personally.
It would be nice to be so simple minded that one thinks one can do anything without there being consequences, nasty consequences. And even if there are bad consequences one will be swooped up and rescued because you are so right and righteous. But there are a lot of us who know better.
The question is - are there enough of us?
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Jeremy Handren
climber
NV
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Sep 12, 2008 - 11:22pm PT
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Thanks John...I also suspect that the bottom line could involve a large dose of 70's style inflation...but I'd like learn more about it.
PS...were all those early Gunks routes with a high neck factor (to Have or Have not, PR etc) done ground up? did you sometimes aid them or rap them first? Just curious....
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TradIsGood
Chalkless climber
the Gunks end of the country
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Sep 12, 2008 - 11:47pm PT
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And Washington Mutual...
And who knows, maybe even Merrill.
AIG.
Then there is Freddie and Fannie. Suppose the housing market bottoms this year and starts recovering in say 3 years. Then the government sees the opportunity to unload the beasts - Meanwhile they have raised a ton of money in the debt market based on the real government guarantees, only to see the government selling.... Caveat Emptor
BTW. Apparently there is a market in credit default swaps on US Treasuries which is now trading around 18 bp up from around 5.
Who the heck would buy these? I could understand selling them. After all if the US can't print the dollars, your business is probably in the toilet anyway.
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jstan
climber
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Sep 13, 2008 - 01:00am PT
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If there is a market on CDSwaps for treasuries then things have gotten a lot worse than I had hoped. 18 basis points! Ouch! Where are the reports on that market?????
JH:
To Have and To Have not was really the only "necky" thing I did. It was one of the last of the 38 aid routes so i was pushing to get done what I could. There was only one nut, a stopper, in the route. All of us did only ground up and we had to deal with the fact we had no idea what the problems ahead would be. That is what climbing was for us. The route was friendly. There was no jumble of rocks in the landing zone below so if worse came to worse if you could come down upright you had a good chance. A belayer really good at dynamic belays is good insurance on it I think. No point in unnecessarily stressing that nut.
I tried Twilight Zone twice (that is the big aid route down the cliff right?) but did not see how to get up the aid. Poops was something else. I did not even pull on the flakes as they would have broken off under my weight. Left them there for a better climber who weighed less. Probably the best climber for that route in the world in fact did come along and try it. We all fought the climb, and the climb won. A good time was had by all.
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Jeremy Handren
climber
NV
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Sep 13, 2008 - 07:10pm PT
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Actually, on and off I follow their commentary on many energy issues, usually pretty insightful I would say. In almost all the media, all I ever hear is how these bailouts are necessary.
Nothing wrong with checking out another perspective.
Since the last eight years have seen a veritable stampede of large profitable companies feeding at the public trough (no , not a reference to Palin), you certainly have to give their ideas concerning Lehman , Bear Etc. some consideration.
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jstan
climber
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Sep 15, 2008 - 11:56pm PT
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The world is reforming as we surf:
Bushes' `New World Order' Is Yielding to `Post-American' Era
By James G. Neuger
Sept. 15 (Bloomberg) -- Barack Obama wants to take American foreign policy back to the 1990s. For John McCain, the model is the 1950s.
Democratic presidential candidate Obama wants the U.S. to use economic leadership to navigate an increasingly borderless world, as it did in the last decade, while Republican McCain sees military might as the path to continued prosperity, as happened under the cloud of the Cold War's nuclear standoff.
Whichever man wins, he will inherit what Johns Hopkins University political scientist Francis Fukuyama calls a ``post- American world,'' replacing the U.S.-dominated ``new world order'' that President George H.W. Bush proclaimed after the collapse of the Soviet Union.
No longer the ``hyperpower'' of the 1990s, the U.S. is slipping toward a first-among-equals status, narrowing the foreign-policy options of whoever moves into the White House in January.
For 20 years, U.S. leaders ``have assumed American dominance; they've assumed that they're working in a unipolar world,'' says Fukuyama, who gained fame in 1992 by declaring that the collapse of Soviet communism heralded the eventual triumph of liberal democracy in the ``end of history.'' Now, he says, ``there's been this big redistribution of power.''
Georgia and the Torch
Future historians may date the end of U.S. supremacy to Aug. 8, when President George W. Bush sat in Beijing's Bird's Nest stadium as two seminal events unfolded.
The first was the lighting of the Olympic torch, a testament to China's ascendancy. The second -- engineered a continent away by Vladimir Putin even as he sat near Bush that night -- was Russia's invasion of Georgia to repel an attack on a pro-Moscow breakaway region, an act of revenge against the decade of humiliation Russians endured following the Soviet breakup.
Both events caught the U.S. in a state of heightened vulnerability, stuck in an economic malaise as it struggles to subdue insurgencies in Iraq and Afghanistan.
Bush told NBC Sports of having ``very firm'' words for Putin, the Russian prime minister, in what Australian leader Kevin Rudd told journalists was an ``animated'' exchange. Still, Bush maintained a schedule geared to the games rather than a world crisis, the next day visiting the gold-medal-bound U.S. women's beach volleyball team as the Russian tanks rumbled through Georgia, a U.S. ally.
Depleted
Whoever succeeds Bush will be working with a depleted toolkit. While Obama and McCain have both vowed to step up the war in Afghanistan after inheriting Bush's ``aspirational'' goal of pulling out of Iraq by 2011, the two-front war has stretched land forces to the limit.
Meanwhile, the U.S. is struggling to ward off recession, stricken by a housing slump that has crippled consumer spending and led 76 percent of respondents in last month's Bloomberg/Los Angeles Times poll to say the country is on the ``wrong track.''
The run-up of U.S. debt testifies to the shift of the global economic center of gravity. The $127 billion budget surplus Bush took over will melt into what is projected to be a record deficit of $482 billion in the year starting Oct. 1.
During the same span, China's holdings of U.S. government securities mushroomed to $504 billion from $62 billion. China is now the second-biggest U.S. government creditor behind Japan, with $584 billion. After leapfrogging Britain to become the world's No. 4 economy in 2005, China is generating the fastest growth of the world's 20 biggest economies: 10.1 percent in the second quarter.
A Power to Reckon With
China is now ``a major power to reckon with,'' says Kenneth Lieberthal, a Clinton-era National Security Council official who teaches at the University of Michigan in Ann Arbor. ``We can't tell the Chinese how to govern themselves and what to do.''
China is instead allying itself with up-and-coming economies in the southern hemisphere. When the Group of Eight industrialized nations established climate-change targets at their July summit, the developing world's Group of Five demurred.
At rival summits in Japan, the G-5 -- China, India, Brazil, Mexico and South Africa -- rejected the G-8's call for a halving of greenhouse-gas emissions by 2050, portraying it as a ploy to suppress poorer nations' economic advancement.
Staunchest Protectionists
The same north-south split helped torpedo World Trade Organization talks, reflecting increasing worldwide antipathy to free trade. The staunchest protectionists are in the U.S., where only 15 percent deem growing trade ties ``very good,'' according to the Pew Global Attitudes Project, a 24-nation survey published in June.
With the Democratic Party likely to strengthen its control of Congress, anti-trade sentiment may swamp the internationalism that marked the years of U.S. ascendancy. During the presidential primaries, Illinois Senator Obama, 47, tacked to the left to court core Democratic constituencies such as organized labor. Like candidate Bill Clinton in 1992, Obama wants to add tougher environmental and labor standards to the North American Free Trade Agreement.
``If Obama is elected, I'm confident that in the first instance half of the anti-Americanism in the world would disappear,'' says Kishore Mahbubani, dean of the National University of Singapore's Lee Kuan Yew School of Public Policy. ``The tragedy here unfortunately is that on the economic and trade front, Obama's policy is quite frightening. If he carries out some of his protectionist rhetoric, we're in deep trouble.''
Relative Decline
The U.S. has coped with relative decline before. As the last power left standing when World War II ended in 1945, the U.S. accounted for as much as half of global gross domestic product. It then built institutions -- the United Nations, the multilateral trading system, the North Atlantic Treaty Organization -- to spread prosperity and security.
But this time is different, says Fukuyama: ``We fumbled our unilateral moment in many, many ways, most importantly the Iraq war.''
In the eyes of the U.S.'s major competitors, the invasion of Iraq legitimized a might-makes-right policy that sidesteps international law. It added to suspicions that Russia harbored after the U.S. led NATO in bombing Serbia, Moscow's longstanding Balkans ally, in 1999.
`Empowered by Destiny'
For Russia, ``there was no new world order,'' says Vladimir Chizhov, Russia's ambassador to the European Union in Brussels. ``What we saw was a return to a philosophy of bloc confrontation, with one bloc missing and the other bloc assuming that it is empowered by destiny to do anything it wants.''
Now Russia, abetted by its energy exports, is striking back. Putin, 55, sought no United Nations diplomatic cover when his troops pounced on Georgia. The list of Russian grievances with the West also includes the expansion of NATO to Russia's borders and the planned basing of a U.S. anti-missile system in Poland and the Czech Republic, two former Soviet satellites.
``In their eyes, this is payback time,'' says Jack Matlock, U.S. ambassador to the Soviet Union during the Reagan administration. ``We have set some very bad precedents for Russia.''
From Washington to Brussels, the reaction to the battering of Georgia pointed up the West's limitations. Bush sent Vice President Dick Cheney to Georgia and offered $1 billion in reconstruction aid. Obama sent his running mate, Delaware Senator Joe Biden, and Arizona Senator McCain, 72, sent his wife, Cindy. The European Union, dependent on Russia for 34 percent of its imported oil and 40 percent of imported gas, didn't venture beyond verbal condemnations.
Bullying Tactics
Russia's attack on Georgia followed bullying tactics against Poland, Estonia and Lithuania, and may presage moves to reassert influence over the biggest prize in its ``near abroad'': Ukraine.
Obama is counting on multilateralism as the solution, saying in his Aug. 28 Democratic convention acceptance speech that ``you can't truly stand up for Georgia when you've strained our oldest alliances.''
Meanwhile, McCain -- asserting foreign-policy credentials through his experience as a prisoner of war in Vietnam and backing for a ``surge'' of troops to secure Iraq -- was declaring that ``we are all Georgians.''
Neither McCain nor Obama ``have the slightest idea of what to do about the Russians,'' says George Friedman, chief executive of Stratfor, a geopolitical risk analysis company in Austin, Texas. ``I know of no policy difference except rhetoric.''
To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net
Last Updated: September 14, 2008 18:00 EDT
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Dr. Rock
Ice climber
Castle Rock
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Sep 16, 2008 - 06:51pm PT
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looks like Barkley Bank is going to risk all or part of L Bros.
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Patrick Sawyer
climber
Originally California now Ireland
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Sep 16, 2008 - 07:11pm PT
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Six hundred and how much billion Lehman owes to creditors?
How many jobs lost in that company, both in the US and abroad?
With the collapse of Lehman, AIG, Bears Stearn, etc etc. How many jobs are being lost in the US? the UK? Elsewhere?
I believe in the free market system, but something went seriously amiss here. I guess that is an understatement and I am not revealing anything new, but...
...it makes you think.
The execs will do okay (or even better), but what about the average worker in these organizations?
How may Supertopians are due Golden Parachutes?
It's sick, perverse and immoral...
I wish I had shares in Halliburton, those would be a good inflation hedge against falling markets, banks, etc...
And Fattrad, none of your BS on this. Please, spare us.
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jstan
climber
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Sep 18, 2008 - 09:54am PT
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Negative waves? Hey aren't you the guys who say you can surf no matter what kind of waves are out there?
From a prior post of mine:
“From what little I know it seems the government will do anything to keep the ball from falling-today. It never asks what about tomorrow. In a pinch they will keep on making money cheap which got us in trouble in the first place. if no one is willing to sit on all those dollars, like China, Japan, and South Korea by buying our Federal debt, we get inflation. Now if the countries holding our dollar denominated debt
don't like to see their value evaporating OR
don't like where our foreign policy is pushing them
they have a lever already in their hand.”
Today: a Bloomberg report,
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=a5_ShyKnHFBI
Crisis Exposes Flaws in U.S. Economy, Tarnishes Image (Update1)
By Rich Miller
EDITED DOWN(c.f. link)
Sept. 18 (Bloomberg) -- The rapid-fire rescues of financial firms may end up tarnishing America's free-market reputation as the moves expose defects in the U.S. economy, undermining its standing with foreign buyers of the dollar and U.S. Treasury securities……..
The result: Foreign investors may demand higher compensation for providing the money the U.S. government and economy depend on. That, in turn, could translate into lower living standards for Americans as borrowing costs are pushed higher and the dollar is pulled lower…..
Yet in what may be a sign that the complacency won't last, the cost to hedge against losses on U.S. government debt rose to a record yesterday after the Federal Reserve's rescue of insurance giant AIG. Benchmark 10-year credit-default swaps on Treasuries increased 4 basis points to 30, more than double those on government debt sold by Austria, Finland or Sweden, according to BNP Paribas SA………….
Estimates of the eventual price the U.S. government will have to pay to end the credit crisis vary widely, ranging as high as $2 trillion. Many are lower than that, at roughly a half-trillion dollars -- equal to about 4 percent of gross domestic product. Kenneth Rogoff, an economics professor at Harvard, wrote in the Financial Times today that the U.S. may have to spend between $1 trillion and $2 trillion………………..
Sovereign-wealth funds invested just $900 million in new capital in U.S. and European financial institutions so far this quarter. That's down from $6.43 billion in the second quarter, $19.7 billion in the first and $28.5 billion in the final quarter of last year, according to data compiled by Bloomberg News.
Last Updated: September 18, 2008 07:13 EDT
END excerpts
Sovereign purchases are down more than 80% from Q2, more than 90% from Q1 and more than 95% from 2007 Q4.
Wish to hell I could figger out how I got to be so good.
Oh Well.
Can’t miss this one though. If this continues we will remember the last few years
very fondly indeed.
Daddy Warbucks may be picking up his toys and going home.
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