Musings on the markets for the individual investor
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Update: And 552 ‘problem’ banks.
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Here’s a question: Shouldn’t the FDIC be funded by banks instead of the government?
From the article:
That is a stagering amount of money…
Comment by Vernon Dozier — 11/24/2009 @ 11:04 am
The FDIC is supposed to be funded by the banks, at least by design. It’s insurance, with the premiums paid by the banks. Well, at least when the FDIC is bothering to collect them.
Comment by BMB — 11/24/2009 @ 11:20 am
$100 Billion through 2013? Didn’t they blow through $64B this year alone?! $100B sounds far to low of a number if the trend continues.
Comment by Andrew — 11/25/2009 @ 8:18 am
The government can always print more money to cover the loses [sarcasm alert].
Good grief. Talk about fiscal irresponsibility. This news is one of the reasons I think that gold is doing so well. Right now the app, ExactPrice, shows the metal at $1,184.70 an ounce. Add to this the news of Russia and India buying gold and all the other central banks adding it and you know that the bankers are preparing their back door for what is coming.
Comment by Hal (GT) — 11/25/2009 @ 10:37 am
The problem is, I don’t think anyone knows for sure what IS coming. But we can imagine that it’s probably not good. Talk about ‘uncharted waters’…
Marc Faber puts it rather succinctly: “I think eventually there will be a big bust and then the whole credit expansion will come to an end,”
I don’t blame other countries — and all of us, for that matter — for taking steps to try to ‘protect’ ourselves.
Welcome to BMB, Hal. Thanks for stopping by!
Comment by BMB — 11/25/2009 @ 12:04 pm
Tim Knight, on today’s dollar collapse:
“No need to read between the lines. The chart says it all. The dollar is being turned from two-ply toilet paper to the cheap one-ply stuff at the convenience store.”
Comment by BMB — 11/25/2009 @ 4:30 pm
WOW! – Gold on a romp again over night
Comment by Bruce — 11/26/2009 @ 12:47 am
Wave of Debt Payments Facing U.S. Government
http://www.nytimes.com/2009/11/23/business/23rates.html?_r=1
http://www.businessweek.com/investor/content/nov2009/pi20091125_103208.htm
Comment by Henry — 11/26/2009 @ 12:54 am
So far, they’ve been able to keep issuing Treasurys without much problem. Of course, we’re not sure who’s buying them, and how many of them are eventually just ending up back in the Fed’s hands.
Comment by BMB — 11/26/2009 @ 7:46 am
In the dark of night – something smells really bad with this Dubai thing. And look at the gold chart when we all sleep…. something smells bad with the timing folks …
Comment by Bruce — 11/27/2009 @ 1:53 am
When things start to get shaky, money is going to flow out of everything — including gold — and likely back into the dollar.
Comment by BMB — 11/27/2009 @ 7:59 am
The problem is it is impossible to predict which way the stampede will go. Historically, people have run to the US Dollar. But that exit path is getting more and more questionable. We aren’t even sure how many Treasuries are being bought by foreign governments any more. Solid data is getting more and more difficult to come by.
And one more thought: We have seen the US Dollar and Gold both being ‘Go To Assets’ at the same time in the recent past.
Comment by Anonymous — 11/27/2009 @ 10:34 am
Short term, with the percentage of dollar ‘bulls’ being in the low single digits, the trades can really unwind in only one direction, that being dollar positive. Right now, most everyone is on the same side of the boat, that being short the dollar.
People seem to forget quite quickly how fast and hard the dollar rallied and commodity prices came down less than two years ago when things got into trouble. Everyone was short the dollar and long commodities — it doesn’t seem that different now.
Longer term, anything is possible.
Comment by BMB — 11/27/2009 @ 10:51 am
What smells bad is Dubai announcing their “problem” right before a long US weekend holiday, and a week and a half holiday in the Middle East. This, after two months ago saying there was no problem. This, after two weeks ago saying everyone needed to “shut up” because there was no problem. Well, well, this folks, is a problem.
But as BMB said, every asset gets trashed when big news like this happens. Ultimately people may flow back into hard assets like gold/oil and so on–but at the moment, it’s the turtle move–pull your head and all appendages inside the safest haven you can find in hopes nothing gets cut off.
Comment by Maria — 11/27/2009 @ 11:18 am
Sell first, ask questions later.
Comment by BMB — 11/27/2009 @ 12:16 pm
Agreed that the timing is awful suspicious. It would almost have to be a coordinated effort to get it to land the way it did. So the obvious question is: What did they hope to gain by timing it this way?
The answer is, this was a way to get the foreign central banks into the mix. Dubai’s problems are small compared to the problems being fought elsewhere. They are hoping they can get the FED or the England’s Central Bank to rub money on the problem in order to avoid contagion in their own region.
Check out: http://maps.google.com/?ie=UTF8&ll=25.209445,55.16716&spn=0.533024,0.758057&t=h&z=10
Neither Palm Tree is fully occupied yet. And the Global World set of islands looks like it will never be completed.
Comment by EDN — 11/27/2009 @ 3:20 pm