The Next Meltdown: Credit-Card Blowup Ahead

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Mokwit: Surprised they were allowed to publish that [unpatriotic].


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October 13, 2008

SouthAmerica: I guess you would prefer to find out about the massive problem that they have on the bank where you have your bank account when it is too late and they have had a run in the bank and you can't get your any of the money that you had on your account.

I remember all the scenes that we saw on TV here in the US on the BBC News or even on CNN News when the Argentinean economy had a major meltdown and people were banging on the door of the banks to get their money.

I guess you prefer to be one of these people who would be banging on the door of the bank after the bank went out of business.

You prefer to be in the dark until it is too late and you don’t want people to warn you in advance of the coming meltdown.

In my case I prefer to be among these unpatriotic people who got my money before the herd, than be one of these patriotic people who lost everything.


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October 13, 2008

SouthAmerica: I posted the following on this forum a few days ago. I would not do this deal with Morgan Stanley because I am not a fool. But there is one thing that I still don’t understand regarding what has been announced about this deal – Morgan Stanley is a sinking ship and a firm in deep trouble with not many alternatives for the future – Why Mitsubishi UFJ Financial Group Inc is not demanding at least 50 percent of Morgan Stanley at this time?

And there is the possibility that the US government still will need to intervene to keep this company afloat a little longer.

If Mitsubishi UFJ Financial Group Inc decide to go on with this deal they deserve to lose their shirt since they are a bunch of fools.

The other possibility is for both of these companies to merge into one and then after the merger they can ask the US government for a major bailout.


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October 11, 2008

SouthAmerica: I wonder why Mitsubishi UFJ Financial Group Inc (MUFG) would invest $9 billion dollars in cash into investment bank Morgan Stanley?

Morgan Stanley's entire market value now stands at $10 billion dollars, and that is only $1 billion dollars more than what MUFG market cap is; Japan's largest bank. The question is why MUFG insists in buying 21 percent of Morgan Stanley – a very sick puppy - Morgan Stanley may implode by this coming week, because of the imploding derivatives market, and might be forced to go out of business, and in September 2008 Morgan Stanley was loaded with derivatives; they had contracts worth $7.1 trillion

Why anybody other than the people who are brain dead would invest in a company that is ready to collapse under the weight of $ 7.1 trillion dollars worth of derivatives contracts.

Right now Morgan Stanley is the Titanic of the financial world, they already hit the iceberg (the derivatives market meltdown) and this gigantic ship is already sinking, and MUFG is welcome to get aboard and sink together.

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http://www.nytimes.com/2008/10/13/opinion/13krugman.html?hp

As I said, we still don’t know whether these moves will work. But policy is, finally, being driven by a clear view of what needs to be done. Which raises the question, why did that clear view have to come from London rather than Washington?

It’s hard to avoid the sense that Mr. Paulson’s initial response was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as “private good, public bad,” which must have made it hard to face up to the need for partial government ownership of the financial sector.

I also wonder how much the Femafication of government under President Bush contributed to Mr. Paulson’s fumble. All across the executive branch, knowledgeable professionals have been driven out; there may not have been anyone left at Treasury with the stature and background to tell Mr. Paulson that he wasn’t making sense.

Luckily for the world economy, however, Gordon Brown and his officials are making sense. And they may have shown us the way through this crisis.
 
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October 13, 2008

SouthAmerica: Reply to Dalengo

For the first time since George W. Bush became president I have a full understanding about what these guys meant when they repeated over and over again that they were building the “Ownership Society” here in the United States.

Ownership society is a slogan for a model of society promoted by United States President George W. Bush. It is becoming clear, and clear to me what this Ownership Society really means – that the United States government is going to own everything in sight and the taxpayers are going to be the new owners of most businesses in the United States.

As a taxpayer I am the proud owner now of Fannie and Freddie, of AIG, of GM, and very soon of most banks around the United States. And with very good prospects of owning also a piece of Morgan Stanley, all the US airlines, of Ford and Chrysler, possibly of Boeing, a piece of California, and many other states, and the way this business is growing before you know I am going to own also many foreign banks, foreign insurance companies, and a few countries around the world.

I am going to be very rich with this Ownership Society business since I am going to be part owner of half of the world as a stockholder of the US government.

I never imagined that my US federal taxes was going to buy so much stuff.

Now look to the positive side of this Ownership Society business – the more federal taxes I pay to the US government the more companies the US government will be able to take over.

And Americans hated to pay their federal taxes, I knew that some day they were going to put all these taxes to a good use – to buy all the private companies in the United States.

I just want to know when the US government is going to send me the information about the number of shares that have been allocated to my name under this new program regarding the new venture: USA Inc.

I want to know how much is my cut on this deal.

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October 13, 2008

SouthAmerica: There is one small detail that they left out at this point – how they are going to finance the Mother of all Bailouts.

But after a weekend in Washington D.C. discussing the problems related to this liquidity crisis I am sure that the European leaders were able to come to an agreement with the United States leaders regarding how to finance the Mother of all Bailouts.

The Europeans and the Americans are going to call the Central Bank of China and ask the Chinese for the Mother of all Handouts.


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hand·out: Food, clothing, or money given to the needy.


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“Europe leaders agree on bank rescue plan”

Nations in the euro zone will have individual rescue packages but will coordinate with one another. They vow to inject liquidity into the banking sector to ease the credit crunch.

By Achrene Sicakyuz and Sebastian Rotella, Los Angeles Times Staff Writers
Los Angeles Times - October 13, 2008

PARIS -- European leaders agreed Sunday on a coordinated rescue plan to guarantee inter-bank lending, inject cash into the banking sector and take other measures to beat back the crisis caused by the global financial meltdown.

At an emergency summit in Paris on Sunday evening, the leaders of the 15 nations that use the euro currency announced a Europe-wide plan to guide and coordinate packages that will be announced by national governments starting today.

The leaders pledged to work together to prop up banks whose credit activities have been all but frozen in recent days, trying to send a strong message of unity and action before financial markets open today…

… Given the differences in European economies and politics, most experts had viewed a large-scale one-size-fits-all approach as impossible and perhaps even undesirable. Because few details of the programs were disclosed, just how similar the plans are was unclear Sunday night.

The European leaders did not put a price tag on the bailout, saying the numbers would be announced in coming days as national governments unveiled details of their efforts. The 27 member states of the European Union -- 12 of which have not adopted the euro -- will consider the proposal at a summit Wednesday in Brussels.

Sunday's meeting was the first time the heads of state in the 15 nations in the single-currency zone have met since the euro was introduced….

Source: http://www.latimes.com/business/la-fg-euecon13-2008oct13,1,7737780.story

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Wait for the Ultra leftist Most Merciful Lord Obama to assume power here in the US. Overnight the outlook will be rosy.

Southamerica has been predicting the demise of the US for a long time seemingly. He predicted with great certainty that Al Gore would be the Democratic nominee too... meanwhile really smart people like the CEO of Countrywide were amassing a fortune off of the policies of the Clinton administration and pointing up the fact that these socialist idiots have to be reigned in.
 
Man Southamerica! You are full of DOOM & GLOOM! You are the life of the party! Do you ever come up with anything constructive & positive? Such as methods to correct these problems rather than spending all your time fearmongering?

Statues are erected to visionaries NOT critical fearmongerers!
 
Admitting and realizing there is a problem is the first step, remember?
Most who are indoctrinated or outright hostile to other opinions might see anything "interfering with their beliefs" as negative - and they often do. Understanding that there is a problem - is in fact neutral and just a recognition of the situational system - or "state of affairs". Negativity is when solely talking about the effects, influences, outcomes, future negatives etc.

Solutions to fixing problems - means taking the situation, and changing processes/interactions or heading towards a realistic goal. With a realistic goal set - fleshing out a plan is relatively easy - but when there is no single goal, but rather processes and biased systems - the whole solution becomes a question about changing attitudes and beliefs - and that is very difficult because of the not immediately apparent benefits and being able to reason, think with an open mind to understand the differences.

Therefore - problem solving can be very hard or relatively easy... as it may involve constructive destruction - a mental boot camp, or just some fundamental insight - "wakening up." Those touting constructive destruction for capitalism itself or financial systems are those perpetually introducing corrupt or biased systems that they (should) know are ultimately unsustainable. Any suppression and oppression in any system is unsustainable because you either exhaust the resource, or evolution, progress breaks free when the compounded effects and resistance reaches a critical level. A fundamental mechanism of reality, nature itself - if you keep pushing hard, it starts pushing back or breaks.

Construction itself is just "ordering" from "chaos" - where other understood or not understood components from existing systems are made to relate in a new system - a solution to an existing system or something completely "new" - from "nothingness".
(throwing in some of my own personal philosophy there ... :p )
 
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Fractals ‘R Us: Southamerica has been predicting the demise of the US for a long time seemingly. He predicted with great certainty that Al Gore would be the Democratic nominee too...


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October 13, 2008

SouthAmerica: Reply to Fracts ‘R Us


If you are looking for information to discredit me, then I am going to help you.

I also said go Oakland Raiders for the last few years, and they are going nowhere fast – and they lost another game over the weekend, and I don’t now what to say on that regard.

I thought Brazil was going to win the last World Cup in soccer, and they didn’t.

I guess I am not good at picking up the winners when it comes to politicians, and in sports.

But regarding economic and investment issues I have been right on the nose.

First you guys laugh about my predictions, and after it materializes then you want to discredit me again by saying that I misses by a couple of points, or because I can’t tell you the exact day, hour, and minute that the next Great Depression is going to start.

Anyway, not even Nostradamus could meet your high expectations for the outcome of any prediction, But the sad part is that the few fools who are challenging me about my predictions I am sure that most of them are just Monday Morning Quarterbacks who are trying to discredit me but at the same time they could not predict by themselves even what day of the week is coming after tomorrow.

By the way, a Great Depression does not kill a country and the United States survived the Great Depression of the 1930’s. Great Depressions are just part of the long-term business cycle that a lot fools like yourself want to deny that these cycles do exist.

This is just another prediction that I am going to get right, and as you said I have been writing about that subject for many years.

The world economy is too complex, and builds a lot of distortions over the decades, and Great Depressions is when these distortions finally make the entire system to collapse, and a few very frustrating coordinated global banking interventions are not going to stop the global economic system from recalibrating and readjusting itself through a Great Depression.

You just have to be smart to figure out which countries are going to suffer more than the others, and where each country is placed on the global economic mosaic.

And I am not going to teach you how to come ahead on this new game, but you need to have a brain to figure it out. Great Depressions are just part of the long-term economic game, the painful part of the economic game, but at the end of the day we are going to have winners and losers after this process works itself out.


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Luckyluciano: Man Southamerica! You are full of DOOM & GLOOM! You are the life of the party! Do you ever come up with anything constructive & positive? Such as methods to correct these problems rather than spending all your time fearmongering?

Statues are erected to visionaries NOT critical fearmongerers!


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October 13, 2008

SouthAmerica: In your opinion my writing is all about “DOOM & GLOOM”, but I have been right about my predictions.

Thanks to my “DOOM & GLOOM” as you put it, a very good friend of mine sold his industrial farm in Texas that he had with his family. I kept saying to him over, and over again sell this large corn-producing farm that you guys have because the party is going to be over before you know it.

Finally he told me that he was able to convince his brothers and they found a sucker to buy their large corn-producing farm, and the got top price for it, they sold the place to a Hedge Fund.

He is glad that he listened to me because since after he sold his farm, the price of corn went down, and today his farm would be worth a lot less because of problems with real estate financing and everything else.

If you read my postings here on this forum then you could have followed this particular story since I mentioned many times before and after he sold his farm.

Other friends of mine followed my suggestions and they got out of stocks that they would have lost money or gone nowhere. And they bought some stock that I had suggested to them and they did very well.

My friend who sold his farm I had been suggesting to him that he should invest his money on US government – TIPS.

If when you read my postings you had not concentrated only in the DOOM & GLOOM stuff, then you would have noticed that I said many times that cash is king after the crash when you can pick up real nuggets that you find among the wreckage.

For you it is just DOOM & GLOOM, but for me a Great Depression is a time to recalibrate the entire economic system and start all over again.

Here is another DOOM & GLOOM for you:

Sure we are going to have the complete collapse of the US dollar – it’s just a matter of time, and only fools can’t see it coming…

You don’t need to be a rocket scientist to figure that one out.

Great Depressions are times for great opportunities for the people who saw it coming.


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Quote from ammo:

they have been collecting 21% compounded since early '80s on their loans,they may be able to withstand a drawdown,no one mentions the billions these companies have been making for decades
More...

I've said the same thing ammo. Unlike razor thin mortgages, credit card rates adequately reflect risk of massive user default. That being said I don't think lenders will be able to skim the same vig going forward but the notion that credit card defaults are going to sink JPM or BAC is incredibly naive.
 
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