Monday, 29 September 2008

Todays top story in the US

Your watching .....
And now its over to our correspondent with the latest on the top story in the US:

Bailout Bill Fails in House Vote Amid Defections in Both Parties

WASHINGTON -- The House of Representatives delivered a stunning defeat to legislation designed to rescue the nation's troubled financial system, sweeping aside a call from President Bush to "send a strong signal" of confidence to markets at home and abroad.

Seems Gordons Curse worked again!

After the vote, House Minority Leader John Boehner (R., Ohio) said there would be an effort to bring back another bill, with further changes. "We've got to find a true middle ground," he said. "We need everybody to calm down and relax and get back to work."

Well.. there you have it... you heard it first here on everything going to be allright... just calm down... relax... take it easy.... AND GET BACK TO WORK!!!

"These are the votes that separate the men from the boys, and the girls from the women," said Mr. Boehner, who choked up as he spoke.

Poor chap... its hard to lie and keep a straight face.

The measure was brought to the House floor after several days of sometimes testy negotiations, and a marathon series of talks over the weekend. The effort was spurred by Mr. Bush's surprise declaration more than 10 days ago that the financial architectural (sic) of the country was faltering, and in need of immediate repair.

Not sure if this is a typo or Georges typical incomprehensible utterings. By the way... who was surprised - George or the journalist?

Sunday, 28 September 2008

We need a New World Order

Just saw this ... havnt had time to read it all but sounds like this is what the games all about - Consolidation leading to Total Control:

We need a new Global Monetary Authority

The GMA’s board would have to include central bankers not just from the US, UK, the eurozone and Japan, but also China, Saudi Arabia and Brazil.

Democratically elected, representing all, providing sustainable finance..... no i didnt think so!

In terms of US and international politics, a Global Monetary Authority is probably an idea whose time has not yet come. That may change as today’s crisis evolves.

.... into something that not even the banking elite could have imagined!

This is the BBC in London...

It looks like the uk is on a war footing now as a new bank failure is announced first on the BBC:

U.K. to protect Bradford & Bingley; BBC reports nationalization

Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling ``have worked right through this weekend to sort out the problems we're facing,'' Hoon, a parliamentary officer, told Sky News today. ``I'm confident that in due course there will be a statement from the Treasury about Bradford & Bingley. We will act to ensure that the interests of depositors are properly protected.''

So Gordon and Alistair have sorted out all the problems over the weekend.... i wonder if they rembered to phone George?

A spokesman for the U.K. Treasury said discussions about Bradford & Bingley are ``ongoing.''

The Treasury dont know whats happening.

A voicemail message left on the cellphone of Bradford & Bingley spokesman Tony McGarahan today wasn't immediately answered. Late yesterday, he said the company was working with regulators ``to clarify the bank's future.''

And neither do B&B.

The spokesman was probably out looking for a new job.

Tip n Run UPDATE2

Seems like Fortis has allready 'gone':

EU, Belgian officials press to keep Fortis open

Phones at the bank and insurer went unanswered Sunday. Fortis has dual headquarters in Brussels, Belgium, and Utrecht, Netherlands.

And in the same article this is what it had to say about private bank accounts:

Marianne Thyssen, leader of Belgium's Christian Democrats — one of the partners in a shaky governing coalition — said offering deposit guarantees was necessary to restore faith in Fortis.
She told VRT television Sunday that "the current government stands behind, we guarantee that savings accounts are insured for 100 percent." Yet under Dutch and Belgian law, only the first €20,000 (US$29,000) in bank accounts are insured.

Sounds alot like they are trying to calm the masses!

PS Just heard that Fortis is Belgium's largest private sector employer and that approximately half of households bank with them. Sounds big.

Tip n Run UPDATE1

Never mind next week... my prediction of bank failure at Fortis seems to have developed faster that i expected:

With fate in balance, Fortis faces bailout or takeover

If a takeover proved impossible, "the Luxembourg government (would) take an important role in Fortis, the Belgian government would do the same thing and the Dutch government," he said. Luxembourg Budget Minister Luc Frieden.

The article also confirms the Bradford & Bingley story:

Amid concerns over Fortis, the BBC reported that British bank Bradford & Bingley would be nationalised soon and quickly sold to another bank or banks.

Suddenly everyone is nationalising their banks... what can it mean?

Anxious Minority

Latest bank failure in the uk over the weekend:

How to distribute the pain

Bradford & Bingley went down quietly. There were few queues outside the branches. The bank's staff turned out on Saturday to help the anxious minority of savers to withdraw cash.

Oh well... thats alright then. I thought for a moment that the nation's biggest lender to landlords had just gone to the wall!

Saturday, 27 September 2008

"We've got a ... retail bank run forming in this country" UPDATE

For more detailed information on the FDIC see this article:

FDIC May Need $150 Billion Bailout as More Banks Fail

FDIC's Secret List

The FDIC knows which banks are at risk; it has a watch list with 117 institutions. The agency won't disclose their names because doing so could cause depositors to panic and pull out all of their funds.

It won't take many more failures before the FDIC itself runs out of money.

“We’ve got a … retail bank run forming in this country”

The latest from the US.... not looking good:

Federal bank insurance fund dwindling (AP)

The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

The reason that Washinghton Mutual was sold off cheaply to JP Morgan.

"We've got a ... retail bank run forming in this country," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics.

Scare monger... or inside information? Time will tell.

Shouting "THEATRE" in a crowded fire

Heres a couple more stories on the bigger 'bank run' taking place in the financial markets:

Shouting fire in a crowded theatre

We are, in effect, suffering from a giant bank run, albeit on financial institutions that aren’t called banks — and aren’t regulated like banks.
Bank runs come in two kinds.
In some cases, the bank run is a pure self-fulfilling prophecy: the bank is “fundamentally sound,” but a panic by depositors forces a too-hasty liquidation of its assets, and it goes bust. It’s as if someone calls “fire!” in a crowded theater, provoking a stampede that kills many people, even though there wasn’t actually a fire.
In other cases, the bank is fundamentally unsound — but the bank run magnifies its losses. It’s as if someone calls “Fire!” in a crowded theater, and there really is a fire — but the stampede kills people who would have survived an orderly evacuation.
We’re in the second case. The Fed has spent the last 7 months trying to assure people that there isn’t any fire. But there is.

For a comment on this article see here.

Time to get your running shoes on!

Customers lose faith in the security of their bank deposits

Almost half of all Britons fear that their money is not safe in the bank

... and the other half are overdrawn!

Friday, 26 September 2008

Tip n Run

All financial blogs seem to be written by people who think they know whats happening in the financial markets so i thought that i would join the tipsters and try a bit of crystal ball gazing.
Trying to predict which bank will fail next - not easy - as they are all in dire straits!

Fortis takes a pounding as shares continue to plummet

Newspaper reports from Holland suggested Fortis would have to sell off some of its core activities to raise liquidity and there were also reports of a run on branches of ABN Amro, the Dutch consumer banking operations of which Fortis purchased last year.

The end of the world as we know it and i DONT feel fine

ECB’s Wellink who is in Chicago at a Chicago Fed conference had to cancel his speech and fly home – Fortis owns part of former Dutch bank ABN-Amro.

So there you have it - a bank share price at 13 year low... selling assets to raise liquidity.... and a big cheese in the European Central Bank hastily cancelling planned engagements.

Oh ... and theres allready reports of a run at some of its subsidiary bank branches. We will see how things go next week.

Fallen Heroes

Wa Mu fails, taken over by JP Morgan

The collapse of the Seattle thrift, which was triggered by a wave of deposit withdrawals, marks a new low point in the country's financial crisis.

Another day, another bank.

Wheres my money?

This crisis requires a radical solution - an ethical bank

Consumers are even worried about their bank deposits. Andy Hornby, chief executive of HBOS, admitted in a memo to staff that one of the reasons for merging with Lloyds TSB was that depositors were taking fright at the bank's share price falls and had started to withdraw their money. Before the Northern Rock debacle last September, Britain had not experienced a run on a bank since 1866. But consumers have now become so nervous that some started pulling their money out of Britain's biggest mortgage lender because of short-term volatility in its stock price.
While it may be a rational decision for one person to withdraw their savings from a weak bank, if everyone does it that bank is doomed. A run on a bank also exposes the myth at the heart of the financial system - our money is not there tucked up in an underground vault. Banks are not able to return everyone's money at once and if we do not maintain faith in them, the financial system starts to crumble.

When the runners start running theres nothing the bank can do!

Hong Kong Update

Hong Kong rattled as rumours trigger two-day run on the Bank of East Asia

Total withdrawals from BEA on Wednesday were estimated at HK$2 billion by analysts at DBS Vickers Securities – a manageable 0.7 per-cent of the bank’s HK$300 billion deposit base.

Banks have a required reserve ratio of funds to cover depositors withdrawls - most chinese banks have a 10% ratio so 2 billion of withdrawls is equal to approximately 7.5% fall... manageable or not?

Wednesday, 24 September 2008

Hong Kong Phooey

Heres some links to the story so far:

Snapshots of the Hong Kong Bank Run

Hong Kong bank mobbed by savers

Bank Run Watch: The Run on the Bank of East Asia

More later...

Warrens out...

Warren Buffett (US number one billionaire) has stopped selling private bank deposit insurance. Whats he worried about?

Berkshire Hathaway abandons bank deposit insurance

How much is in the kitty?

The Financial Services Compensation Scheme (FSCS) provides a guarantee to bank depositors for the first £35,000. They make a levy on the banks who pay into a contingency fund to cover payouts. This time last year (september 2007) there was only £4.4 million. So you had better be in the front of the line!

Heres some comments on the situation.

Anyone know how much there is in there now?


FSCS - what do you mean you havnt heard of it! read this now if you want to be up to speed. These are the people who say they will give you back all your bank savings (up to a maximum of £35,000) in less than 6 months .... SO LONG AS YOU DONT HAVE A MORTGAGE WITH THEM!

Memo to self - sell house, buy food.

How safe is my money?

Is your money safe? Read our Q&A

Gives a mainstream overview from the point of view of the bank depositor.

Background viewing #1

You tube - customers queue at Northern Rock (uk) 2007

You tube - Its a Wonderful World (us) 1930s

You tube - Northern rock Panic (uk) 2007

You tube - Uk bank crumbles further (uk) 2007

Look and Learn - it could be coming to a bank near you!

Background reading #1

This will help you understand the mind set of the people in charge (taken from a comment on this article).

... I've been helped by understanding Political Ponerology. This is a branch of psychology that brings together biology, sociology and politics to reveal the scientific method behind the madness. Ponerology was born out of the ashes of WWII and the subsequent totalitarian experience of the USSR.There are basic facts that all people of conscience need to grasp, fast. 6% of any given population are born genetic psychopaths. Bu then why do some fall under their spell and other not? The vast majority of 'paths remain undetected as they manipulate and plunder their way through human relationships consuming our emotional and financial energy. In this sense, they are 'successful'. They insinuate themselves into networks throughout society by sharp observance of our behaviour and mimick/act to get what they want: power over others - in fact, the pinnacle of achievement for a psychopath is TOTAL AND RUTHLESS DOMINANCE OVER 'THE OTHER'.Political Ponerology expands this dynamic out onto the societal scale to explain that periodically a concentration of psychopaths (thanks to negative selection - think 'Old Boys' Network' taken to its extreme) coalesces 'at the top' to form a 'Pathocracy' wherein 100% of key positions of a state are run by people who have a permanent and incurable deficit in their worldview.The USA is a whisker away from this becoming an open reality. Things will turn nasty. Americans must realise that their leaders are not really at war with an maginary 'Al-Qaeda': they are at war against Americans. The unwinnable wars are a diabolical strategy to kill off strong males that might get in the way of the 'Paths' conquests at home.How whave they done it? Through religion. Chris Hedges and Katherine Yurica have done great work to chronicle the rise of 'Dominionism'. Palin comes out of 25 plus years of programming that told her that she must be one of the 'Regents of God' who would take control of the planet at the end of times, in order to 'keep everything on ice' for Jesus, who is apparently on his way. Check out the Council on National Policy, the true power centre behind the GOP, from where Fundamentalist Christian ideologies like Dominionism were wedded to the financial elite through Pat Robertson and Ted Haggard. These men have long railed against the non-believers, warning that God would punish the sinning majority - now their dream is real.....


Inertia - the tendency of a body to maintain its state of rest or uniform motion unless acted upon by an external force.
Yesterday i posted this and today this happened.