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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (8267)	3/6/2008 10:08:36 AM
From: Fiscally Conservative	Respond to of 50428

Awe come on Jim,don't be so bearishing negative. Things could be worse. We could be flat on our stomachs holding on to our helmets awaiting a cease fire in a hostile combat zone somewhere in Afganistan or Iraq. There will always be a dollar to be made or lost somewhere each and everyday.

To: jim_p who wrote (8267)	3/6/2008 11:26:10 AM
From: surelockhomes	Respond to of 50428

>>I covered my shorts a little too early, but a profit is a profit.<< Don't fret to much. Here is where the real money will be made and how cash conserving cash rich WB makes it. The smart money is now seeking the least yield that will provide the highest returns (50%) a year from now, at much lower risk. Note the last sentnce. >>TGR: Right. So what do we do with our money? IM: For the typical American, you go directly to Treasury Bills. The dollar’s losing value; you’ve got a negative cost to carry, but the value of a Treasury Bill is that’s the final form of paper that the government cannot tinker with. Because the 91-day T-Bill auction is what keeps the wheels of the system turning. If you had a one-year note, you might suddenly discover some sort of emergency declared and be told that your one-year note’s now a five-year note. They couldn’t possibly do that with a 91-day T-Bill or the system comes to a halt. I keep thinking back to the wisdom of Jim Benham, who originally worked in the Fed and then founded the old Capital Preservation Fund. He ultimately sold it to American Century; I am not sure whether they still follow the policy. But I always remember Jim speaking to audiences in the ’70s emphasizing that you want to own a direct T-Bill. You don’t want a swap or an option or some piece of paper from somebody else between you and the Treasury. He was ahead of his time, but that was the cleanest piece of paper that existed. In my mind, this is exactly the environment where an attitude like that should be taken. When I get people saying, “Why should I own a Treasury Bill; it’s only going to pay me 2%, and that’s taxable?” the point I make is that the Treasury Bill is 100 cents on the dollar of buying power when everything has fallen 50%.<< From the excellent article: Message 24373638 Going directly all into T-Bills might be a little extreme, but the drift to safety should be highly considered.

To: jim_p who wrote (8267)	3/6/2008 10:57:06 PM
From: roguedolphin	Read Replies (1) \| Respond to of 50428

Interesting post from BullWinkle's board on IHUB..... siliconinvestor.com Posted by: CaribbeanJim In reply to: roguedolphin who wrote msg# 27439 Date:3/6/2008 10:34:10 PM Post #of 27440 otraque - Oh, and don't forget the FDIC that is probably grosely underfunded. A global financial tsunami where the centerpoint of the quake is the US could (most likely "will") create a Katrina-like FDIC meltdown. -------------------- REPOSTED from someone on CBS Marketwatch: I'm not sure where all of this confidence and faith in the FDIC comes from. Do you all realize that the FDIC has only $50 BILLION in funds insuring over $12 TRILLION in deposits? That ratio is 0.00417. Simply put, the FDIC has a tiny fraction of funds available to deal with saving depositors in failed banks. The ENTIRE BANKING INDUSTRY IS ESSSENTIALLY BANKRUPT at this stage in terms of being short of regulatory capital requirements in the US. What we have is a MASSIVE SOLVENCY CRISIS IN THE BANKING SYSTEM. The Federal Reserve is dealing with this as a liquidity crisis, but it's a core solvency crisis. Since last August 2007, the ECB (European Central Bank) and the Federal Reserve, together have poured about $2 TRILLION into loans to the banking system in exchange for impaired to worthless collateral just to keep the banking system in the US and Europe from imploding. And that's before even a tiny fraction of the real ACTUAL LOSSES have been taken into account by the banks. Conservative estimates by UBS (Union Bank Switzerland) places these losses at around $600 BILLION and only about $120 BILLION have been accounted for so far. It isn't the little local banks that are of very great concern. It's the huge money center banks that are the real issue as they are the ones that played the game of lending roulette and lost. The actual losses may be in the TRILLIONS OF DOLLARS. Banks like Citibank and Bank of America, the two largest in the US, are teetering on the brink of insolvency. In the case of Citibank, they have liabilities (deposits) of over $2.2 TRILLION and their assets to cover these are shrinking daily. Even doubling the FDIC staff to 500 or so people isn't going to do much to deal with this massive BANK INSOLVENCY CRISIS. The FDIC doesn't have a tiny fraction of a penny on hand for each of the dollars in deposits it insures. Nobody should have any confidence whatsoever in the FDIC as its guarantee from a practical standpoint is worthless in real dollar terms. Oh, yeah, but it's backed by the US Government. Wow! I am so reassured that it's backed by the Federal government that has an almost $10 TRILLION NOMINAL AGGREGATE DEBT and $50+ TRILLION IN UNFUNDED LIABILITIES according to the GAO (Government Accountability Office). But this is America and reality doesn't count anymore, so let's just all be wishful and repeat over and over that America is the richest country in the world and it's morning in America again... We're not in a liquidity crisis, but a SOLVENCY crisis, and there seems no solution.