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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (93548)	1/30/2009 2:56:21 AM
From: Sr K	Respond to of 116555

Part 1 Does nationalization of a few large banks force nationalization of all banks? At first, people will want safety. The increased deposit "insurance" to $250,000 helps. Who would bank with the few survivors when the U.S. Government is running most of the others?

To: mishedlo who wrote (93548)	1/30/2009 2:58:25 AM
From: Sr K	Respond to of 116555

Part 2 If 16 of the top 20 banks fail, and 50 of the next 80 fail, the FDIC would take over those 66 banks, and they'd be too big to offload all of them onto the surviving 34 of the top 100. So that is a clean way for the U.S. to get equity. How much capital would it take to recapitalize those 66 banks? Could it possibly be more than $500 billion or so? Someone is parking the domain usnationalbank.com Another scenario is that the common shareholders get wiped out, but the preferred shareholders survive, on a case by case basis if there is enough equity but not enough for the common shareholders. This reveals an interesting feature in the recent C and BAC deals. If C fails, the U.S. doesn't put up $289 billion (or whatever); the FDIC takes over the whole bank (but maybe not the holding company). A third possibility is that Amazon.com sees the future and it is shifting their way. Business is not so bleak, it is just shifting to more-efficient players. Those companies with low or zero debt and business advantages so they generate positive cash flow will gain market share.

To: mishedlo who wrote (93548)	1/30/2009 5:24:52 AM
From: THE ANT	1 Recommendation Read Replies (1) \| Respond to of 116555

This wealth was never real.How can one fix a problem when there is no problem to fix.At peak credit we felt wealthier but that was a fantasy.Had the various financial innovations and mathematical models been correct we might have had a real Paradigm shift.When they failed it was back to normal.Even if Bill Gross gets his way and we get inflation or at least no deflation the ratio of assets to prices will fall in half.An inflationary environment will not change this fact and attempts to create inflation will shift wealth from tax payers to the finance system and those who helped get us into the false boom