Screw the Banks and Investment Firms

[cowboyangel]

Hey guys, greed knows no race, religion, creed or ethnicity. Let's get back on track:

I was talking to an economics PhD candidate the other day who felt derivatives weren't much of a problem anymore...well.....


Princeton Economist and Computer Scientists Show that Derivatives Are Inherently Vulnerable to Fraud


As I have previously noted, credit default swaps are destabilizing for the economy. And the models used to evaluate financial instruments - such as the Gaussian copula formula for CDOs - are inherently flawed.

Now, Princeton University economists and computer scientists have demonstrated that financial derivatives are also inherently vulnerable to fraudulent pricing.

PhysOrg summarizes Princeton's findings:

In a result that may have implications for financial regulation, researchers from computer science and economics have revealed potentially impenetrable problems with the pricing of financial derivatives. They show that sellers of these investments could purposefully include pieces of bad risk that no buyer could detect even with the most powerful computers.

The research focused on collateralized debt obligations, or CDOs, an investment tool that combines many mortgages with the promise of spreading out and lowering the risk of default. The team examined what would happen if a seller
knew that some mortgages were "lemons" and structured a package of CDOs
to benefit himself. They found that the manipulation may be impossible
for buyers to detect either at time of sale or later when the derivative loses money.

The team consists of Sanjeev Arora, director of Princeton's Center for Computational Intractability, his colleague Boaz Barak, economics professor Markus Brunnermeier, and computer science graduate student Rong Ge.

It is now standard wisdom that a major culprit in the 2008 financial meltdown was use of simplistic mathematical models of risk at financial firms. This paper,
released as a working draft Oct. 15, suggests that the problems may go deeper.

"We are cautioning that even if you have the right model it's not easy to price derivatives," Arora said. "Making the models more complicated will not make these effects go away, even for computationally sophisticated."

Arora noted that the problem arises from asymmetric information between buyers and sellers, and goes against conventional wisdom in economic theory, which holds that derivatives reduce the negative effects of such unequal information.

"Standard economics emphasizes that securitization can mitigate the cost of
asymmetric information," Brunnermeier said. "We stress that certain derivative securities introduce additional complexity and thus a new layer of asymmetric information that can be so severe it overturns the initial advantage."

Brunnermeier noted that the finding came from combining computer science and finance, which has not been done before but has the potential for further insights. “I anticipate that both fields can enrich each other,â€

[can't sit still]

Cowboy. It's great that you posted that paper but, their research is USELESS. They can haggle all day and night but they're looking in the wrong place.
ALL house prices are dependent on their saleability to wage earners. In the final analysis, the derivatives were a bet that Americans would not have their employment rate or wages reduced. They completely wasted their time making complex models. They needed to do a couple of simple graphs;
1: number of houses available.
2: aggregate, non-speculative earnings of Americans.
We built 1.5 million new houses every year.
Home prices rose to 185% of median;
http://en.wikipedia.org/wiki/File:Shill ... ig_2-1.png
Wages have frozen since 1971 Aggregate non-speculative earnings were falling. Stock market gains have been zero for the last 10 years.

With prices way above long-term trends, appraisals were obvious BS. When you make a bet on the preservation of inflated prices in a falling-wage economy, it doesn't take a mathematical model to predict failure,,, only a brain.
Supply UP,,, purchasing power DOWN.

The banks have come up with TONS of new models and TONS of new schemes. Volker said that the only worthwhile innovation that the banks have come up with was the automatic teller machine. ALL the rest of their innovations were garbage.

[Dad]

Written a while back during the campaign.

I just received an email from Nancy Pelosi through the DCCC
(Democratic Congressional Campaign Committee). There is no way to
write back to them but many ways to sign your friends up and many
more ways to give them your hard earned cash. Oh Yeah, It is not a
charity and not a tax write off. It just seems to be big Business, I
mean Big Government as usual. I truly want no part of any republican
issue's any time soon. This email just spurred me on to vent about
some issues and maybe you will listen as not one of my many many
letters written to anyone in politics has even gotten the slightest
response in several years. So here it goes.

The Federal bailout of Bear Stearns that seemed to have been
attempted to be hidden by going through JP Morgan Chase, is a shot in
my moral and has just deepened my sense of total failure of the U.S.
government. Again the government is using the tax dollars to help a
corporation that made huge investment flaws. I have made some flaws
on my taxes and am being punished with huge interest and penalties.
No bail out for me or anyone else that is in this trouble living pay
check to pay check. This seems to be fundamentally wrong. Since the
14th amendment was passed, the corporations have used it to convince
the courts and the government to whole heartedly support them and
protect them while it seems the meaning of the 14th amendment is to
protect individuals. That means you or me as a human being. Mr. Bush
made a statement the other day that for the first time made sense to
me. Yes I believe it is the first time. He stated in effect, that a
government plan to buy, fix up, and occupy, homes to maintain the
extremely over inflated values of homes to protect the banks is wrong
and this is a housing cost correction and we should let it correct
itself. I do not want to see anyone lose their home, but at the same
time I do not want to see our government bail out more banks and
corporations, which the government allowed to make risky investments
and loans, again. It all seems reminiscent of the dot com. failure we
saw in the 90's. Greed made a few very wealthy while many people lost
everything investing in many companies that had a desk and a phone.
Have the people and the government not learned from past experience.

Our government, going back to a democratic presidency, started free
trade. What a disaster. After some long hard thought and quite a bit
of research, I have come to the conclusion that this is the worst
unsustainable venture this country has ever embarked on. It has cost
100's of 1000's of jobs, if not millions in the U.S.. It has cost
billions in import taxes. Guess what, me and you get to make that up.
it has turned many countries upside down as the corporations hop from
country to country as labor costs and or environmental laws are
passed and cost these corporations more money. They just up and move
on to the next cheap country. Eventually the countries being
extorted, as I call it, will either run out or just stop doing
business. The infrastructure in the U.S. will by this point be
totally destroyed. This is unsustainable greed. The basis of our
economy has been changed dramatically over my life time. That's only
45 years. It has gone from a strong, industrial, technological,
farming, and export based economy to one that is now based on credit
and consumerism. It appears that our economy seems to adjust by
retail sales, and large corporate profits and the rest is just almost
not important. How long can an economic giant like the U.S. continue
to allow the jobs, such as manufacturing, be allowed to leave the
country, making so many take less paying jobs with little or no
benefits, living pay check to pay check, being financially destroyed
by the smallest financial dilemma, and not being able to support this
so called consumer based economy? It seems again to be unsustainable.

This is not just happening in the U.S. but all over the world. So
many have learned from the U.S. policies that the multinationals are
doing the same thing. These companies around the world are being
encouraged to act in these manners and being protected at the same
time. I dread to think of how history will be written in the next 100
years. It seems that so many of those in power are blind to the
evidence that is emerging of the economic collapse that seems
inevitable.

_________________________
I Preach to you the truth, the light
Just believe me my friend
Give me your last quarter
But continue to spend

[can't sit still]

Dad, welcome to the board. Everyone is glad to hear from you. We're all very friendly here. Now that the BS is out of the way, Your's is a common observation. Seems to be evolution in action. NO democracy has ever survived. Capitalism always seems to morph into fascism. Socialism is a dead end because you run out of people to steal from. Communism is dead because no "Command Economy" works out for long.
Democracy in the US has morphed into fascism rather than being allowed to degenerate into the workers paradise.
There is a possibility that systems that didn't work previously might work nowadays.

The big sticking point, to me, seems to be incentive. If you let people get too comfortable, they quit producing and watch the tube all day. Socialism falls down on incentive.
It's a new world. Maybe "social credit" [ Douglas] will work if there is a computer to tally every single action. Birth control is making big changes. Japan, Germany and others have a shrinking population. It appears that we will hit "peak food production" before we hit peak oil. Lots of changes. Our current descent into fascism [the corporatocracy] is particularly inhumane.
The not so new idea for "one world government" is going to be a bust. The big danger is that; during the attempted installation/initiation of said GOV, a lot of people are going to die. It's going to REALLY piss you off.

[ygmir]

I just watched an episode of South Park, that, really nails the issue, and, the current administration.......

South Park, always, has it right.

[cowboyangel]

I was talking to a friend the other day about the kind of governance we have in the US nowadays and came up with this:
"Corporate Totalitarianism"

[cowboyangel]

Bob Chapman's got a great mind and his pulse on where the financial collapse is going and why, but he's off on the US becoming a soviet style socialism, global warming, immigrants and Obama's desire to undermine small business. The evil resides with the elite who run finances. I call it by another name...."Corporate Totalitarianism"


The rally in the dollar and the problems for other currencies prove what we have been saying and that is all currencies will continue to fall vs. gold. The impetus for the dollar rally originates as usual with the government and is added to by the disarray in the economies worldwide, particularly in Europe. One of the things central banks have never learned is that financial engineering only works for a short duration, after that the problem worsens. Even the world’s strongest currencies, the Swiss, Canadian, Aussie and Norwegian, are only holding their own versus gold. The reason why is almost all central banks have done the same thing and that is create money and credit recklessly at the behest of the US government. The US and British financial systems are insolvent. The euro is under severe pressure, because of problems in Greece, Spain, Ireland, Portugal and Italy, and every other central bank is jockeying for position via competitive devaluation. The public may not notice it but the situation is really chaotic. As you can see, the US is never allowed a level playing field, but that is part of what comes with being the international reserve currency. Banks in Britain, Europe and the US continue to take losses, sometimes-severe losses. There is no intermediation going on with the dollar. Its rally is founded on manipulation. We suspect in the future we will have an interesting phenomenon and that is a fall in the dollar, pound and the euro, as gold moves higher as the only viable alternative. The world is going to be shocked when the euro collapses. It won’t happen overnight. It will take a year or two, but it has a good chance of happening. The US dollar cannot and will not for some time to come be a safe haven for wealth. That is because the dollar and the US economy have been deliberately destroyed.

The flight into gold that we have seen has not been sparked by anticipation of inflation, but by a flight caused by a lack of confidence and trust in central banks. If other major governments have monetary problems they cannot be buyers of US Treasuries. They will have to be sellers of dollars. That will drive the dollar lower, further reduce the demand for US funding, force the Fed to further monetize and create more inflation. That in turn drive the dollar lower, but more importantly it will give gold a life of its own. We have found that this is something the public ad professionals refuse to accept. There is going to be a devaluation of the dollar no matter what people think, or want to think in their world of denial and fantasy. Other letter writers who disagree have recently attacked us. They can disagree and that is fine, but we might remind them that we are the ones who have been correct in our predictions 98% of the time, not them.

We believe the current dollar rally is unsustainable. If you remember we recommended a short on the dollar at 89.5 on the USDX. It fell to 74. We have just seen a two-week rally from 74 to 78 on very low volume. We had said the rally when it began at 74 could go to 78 to 80. Several more days of trading over the holidays could take it deep within that zone. This is just another rally conjured up by our government led by Goldman Sachs and JP Morgan Chase, which will be doomed to failure. The rally is aided by unsettled conditions in Dubai, Greece, Spain, etc., and the continued viability of the eurozone. In addition, the same groups of criminals have viciously attacked gold and silver in an attempt to take gold below $1,033 and silver below $17.00. That completes the circle of attack. The SEC and the CFTC simply look the other way aiding and abetting the criminals that run our government and markets from behind the scenes.

It is not surprising that 320 members of the House passed legislation to audit the Fed to find out where trillions of dollars have gone and what the Fed and the Treasury have done to manipulate markets. Just how much monetization is really going on? Has the Fed been buying more than half the Treasuries issued via stealth activity and how long will this continue? Will the Treasury default and officially devalue? Of course they will, it is only a question of time. What will the Fed do with bonds issued by agencies and toxic waste CDOs, and what did they pay for all this garbage? Have they been paying the banks, Wall Street and insurance companies 80% instead of 20% on the dollar, so that taxpayers can pay the bill and these entities, which are insolvent, can be kept functioning? Why is it we could forecast all these events and very few others could? It is because if they did they would be ostracized and they would lose their jobs. That is how systems like this always work. You cannot lay a normal yardstick to what we have seen and what will be an unprecedented future. When the dollar officially devalues in a year to a year and a half, the shock will shake America and the world to its very foundations.

An audit and investigation of the Fed is on the way and the American public is not going to like what they find. All the failures and criminal activity of the past 96 years will become reality. This coming year will see the Fed forced to monetize massive amounts of government paper, all of which will lead to massive inflation. Inflation will move up very quickly. The groundwork began last May and over the past two months we saw official inflation rise to 1.2% and then 2.4% as real inflation moved up over 8% again. Will we see something similar to what happened in Argentina, Zimbabwe or in the Weimer Republic We do not know. What we do know is it is not going to be good. All the telltale signs are being ignored and for such duplicity a high price will be paid. That is why we predict official devaluation and default. History is explicit; monetization cannot go on forever. Over the last two years the Fed has purchased trillions in what is essentially worthless paper from banks, Wall Street and insurance companies.

The rally in the dollar is transitory, because at the moment Europe’s problems seem greater than ours.

Americans are truly furious that Democrats are ramroding through legislation that is conjured up in secret, and that those who voted for it have never read. Health care legislation is far reaching, committing us to a socialized medical system and will prove to be massively expensive. Congress has a 22% approval rating because everyone knows they are on the take. What sanctimonious thieves. The Treasury and the Fed have injected $12.7 trillion into our financial system that we know about, and the taxpayer is on the hook for potential losses of $23.7 trillion. As you can see from Treasury yields, foreigners are starting to vote with their feet and are not buying our debt. As unemployment continues to rise with inflation, America will be ready for revolution. A default and devaluation would lay further groundwork. Taxes will increase along with debt exacerbating the situation. America is on an uncontrollable train headed for a wreck. Is it any wonder the US dollar is being abandoned and gold is being purchased worldwide in a flight to quality.

You have to ask yourself how does a stock market trade within 500 points for three months, when trading volume has fallen? There have been material withdrawals from mutual funds and 73% of trades are of the black box front running variety. The answer is the trading after hours, which has been dominated by your government’s plunge protection team. They cannot continue that indefinitely. There is lots of bad news coming in 2010.

The November medium home price rose 3.8% to $217,400, the highest level since May reflecting the $8,000 tax credit and growing inflation. Year-on-year prices fell 1.9%. The number of new homes on the market fell 235,000, the lowest since April 1971. There are now 7.9-months’ worth of homes for sale, up from 7.2% in October. What has to be added to that is discouraged sellers who have taken their homes off the market, and lenders that have been withholding inventory for sale - a bottoming market is years away.

Loan demand fell 5% last month. Mortgage applications fell 10.7%, the lowest level in two months. Refi loans fell 10.1% and mortgages fell 11.6%.

This as foreclosures topped one million. As a result home construction has fallen 83% from its peak. We projected 75% in June of 2005. The decline in building is probably bottoming, but with the inventory overhand it could be many years until we could see a recovery.

Durable goods orders rise of 0.2% were very disappointing. The experts expected a rise of 0.5%. Wrong as usual.

For the week ended 12/23 the commercial paper market rose $9.3 billion to $1.160 trillion, still a ghost of its former self.

Congress, the SEC and FINRA are investigating Goldman Sachs and others in the use of synthetic CDOs, collateralized debt obligations, that we have been hammering for since 2006. Not only were the laws of fair dealing violated, but they were shorting the deals they sold to clients, which they knew had to fall in value, because the ratings they arranged with the raters, S&P, Moody’s and Fitch, were phony from the outset. Yet if you notice there hasn’t been a lawsuit, civil investigation, or criminal charges. The exposure of this activity allowed the banks to profit from the housing collapse, which they deliberately created. Again, another fine and no criminals go to jail. They simply own Washington.

The 10-year T-note yield just rose from 3.20% over the past 18 business days to 3.80%. Look at a chart and it is ominous. The yield is on long-term trend lines that go back to June 2007. It looks like that line could be broken to the downside. The chart is very jagged giving it all the earmarks of manipulation. Our guess is that something happened three weeks ago that we don’t yet understand, but whatever it was foreigners are running away from US sovereign debt, just as we forecast they would. This means the fed could be taking down more than 60% of the auctions of US debt, which means more monetization and more inflation. If the Fed does not continue buying, by creating money out of thin air, support will be broken and yields could quickly move up to 5%, which would further destroy the retail housing market. Such a move would send gold to $1,550 to $1,650. Incidentally, over the past 50 years we have observed that as interest rates rise so does gold and silver, up to a certain point. In this case bank discount rates could move from zero to 5% and gold would rise. After that gold becomes the only vehicle that preserves assets.

Our sources within the banking industry tell us banks are not lending to small businesses because Marxist Obama wants to crush the small business industry. If out of business they cannot create jobs. They create 75% to 90% of all jobs. That means everyone ends up on the government payroll just as they did in the Soviet Union. This is part of Barry’s new Orwellian world. The end game is everyone is dependent on government.

The health care bills are unconstitutional, but that is of no concern to Congress. Just start with mandatory insurance for all. The healthy subsidize those who live a profligate lifestyle. What we have is a cross between socialism, Marxism and fascism. This is being caused by bribery, which is nothing new for our Congress. Bills are passed by meeting the demands of the highest bidder. This is how Rome fell; whoever could buy the Army was dictator. We do not have a dictator yet, but the elitists are behind the scenes pulling the strings. So many are on the take it is almost impossible to reverse such legislation, short of throwing out all the incumbents. We would like to see that, but have enough Americans awakened? We hope so. We will know next November. Democrats have blown their biggest chance for permanency in decades by serving the brotherhood of darkness. As they have shown their constituents and their desires mean nothing to these crooks. The Christmas present was another increase in short-term government debt and gift-wrapped tax burdens in health care, as their voters resoundingly screamed they do not want them.

All conferencing was done in secret to prepare a 2,000-plus-page albatross that virtually no one in Congress read. They figure you won’t remember what they did nine months from now. We get socialized medicine and those who do not carry insurance because they are too poor or do not need it, will have to pay a fee to government. We will lose 25% of our physicians and as a result care will deteriorate and many will die as they wait in line for treatment. Then comes the increased prescription costs, which are already outrageous compared to Canada and Mexico, and then the chronically ill and the old will be allowed to die. If you do not stop these two bills you will eventually be one of its victims. The Illuminists want this bill so bad that they are willing to doom every Democrat that he or she will never return to office.

The forces of darkness purchased the votes to pass this bill in the Senate. Mary Landrieu, a Democrat, received $300 million for her state and Ben Nelson received millions for Democrats in Nebraska as well. There were more payoffs, like $300 million for California and even AARP got $18 million. The legislation contains massive abortion funds for murder on demand. The cost of this duplicity starts at $2.5 trillion. Needless to say, this is all unconstitutional, but these politicians and their masters simply ignore our law of the land. Just check out Article 1, Section 9, Part 6, which clearly states, “No preference shall be given to any regulation of commerce or revenue to the ports of one state over another,â€

[Ugly Dougly]

I was talking to a friend the other day about the kind of governance we have in the US nowadays and came up with this:
"Corporate Totalitarianism"

"Fascism is Corporatism" - Mussolini

[cowboyangel]

Phony money 2.0 or

Is the Fed Juicing the Stock Market?


Mike Whitney


Is the Fed manipulating the stock market? TrimTabs CEO Charles Biderman seems to think so, and he makes a strong case for his theory in an article at zerohedge.com.

Biderman focuses his attention on the mystery surrounding the stock market's 9-month rally and asks, "Where is the money coming from?" After all, the market cap has increased by more than $6 trillion since March 9. That amount of money should be fairly easy to trace; right?

Wrong.

Biderman: "The most positive economic development in 2009 was the stock market rally. (But) We cannot identify the source of the new money that pushed stock prices up so far so fast. For the most part, the money did not from the traditional players that provided money in the past."

Huh? So, this vast infusion of liquidity--which helped the banks to avoid painful deleveraging--did not come from the usual suspects?

That's right. According to Biderman, the money did not come from (a) companies ("which were a huge net seller") (b) retail investor funds, (c) retail investors, (d) foreign investors, or (e) pension funds.

What about the hedge funds?

Biderman: "We have no way to track in real time what hedge funds do, and they may well have shifted some assets into U.S. equities. But we doubt their buying power was enormous because they posted an outflow of $12 billion from April through November."

Okay; so we're back to Square One. Where did the money come from?

Biderman again: "As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures. Moreover, several officials have suggested the government should support stock prices. For example, former Fed board member Robert Heller opined in the Wall Street Journal in 1989, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.â€

[Dad]

2 Words - Corporate Welfare!

[can't sit still]

People are starting to get worried. It seems that GOV can't do anything right when it come to stopping the economic degradation. Don't worry When it comes to trashing the system,,, they're just getting started;

The Biggest Financial Deception of the Decade

By Jeff Clark, Editor, Casey’s Gold & Resource Report

Enron? Bear Stearns? Bernie Madoff? They’re all big stories about big losses and have hurt a lot of employees and investors. But none come close to getting my vote for the decade’s most dastardly deception...

First came Enron, with $65.5 billion in assets, going belly-up and becoming the largest bankruptcy in U.S. history at that time. Chairman Kenneth Lay said that Enron's decision to file bankruptcy would “stabilize the company,â€

[dragonfly Jafe]

...This is the time to be overweight gold and silver....

Precious Metals;

Gold
Silver
Brass
Lead
Steel

[ygmir]

...This is the time to be overweight gold and silver....

Precious Metals;

Gold
Silver
Brass
Lead
Steel

as value and ease of acquisition goes, I might add copper and aluminum there.
Steel is very plentiful. A great product, but, easy to scrounge.

[can't sit still]

If you are following precious metals, then you know that enormous short positions have been taken to suppress the prices. These shorts amount to most of the metal that exists in the world. There is an interesting claim that J.P. Morgan will lose control of the silver market and silver will skyrocket. Dunno.
There is a lot of evidence to prove that the PM ETFs don't have very much metal at all. They were just invented to take the pressure off of physical PM markets and maintain an artificial low price by maintaining an artificial high supply.
Another claim that Japan will be the new "Wiemar republic" http://www.caseyresearch.com/displayGsd.php
Gold has lots of fans;
http://fofoa.blogspot.com/2009/12/gold- ... serve.html
Just as Iceland was a surprise out of the blue, I'd expect something unexpected to be the next financial bomb.
My next thought,,,, I need to move over to the survival thread. Heaven forbid that I go off-topic.

[cowboyangel]

This shit will be going down folks, you can count on it. Better to have food to eat or the land to grow it on, a bunch of guns and a bunch of trusted friends. You can't eat precious metals.

[ygmir]

good points, CA.......
but, if a person will want some sort of barter/trading medium, PM's are still the easiest.........
and, as a "wealth" repository, well, depending on how much "money" a person has, they can only buy so much ammo, seed, and propane..........

[can't sit still]

Here's some good advice that I got in mail;

Want to protest bank bailouts? Move your money, a new campaign urges.

A new website, Move Your Money, offers advice on moving accounts from huge banks to local ones.

Cookie Ferguson opened a new account last March at Community Bank of the Bay in Oakland, Calif. A new campaign is urging depositors angry over bailouts at big banks to switch to local institutions.

By Laurent Belsie / January 7, 2010

Mad about the bank bailouts? Had enough of huge bonuses and too-big-to-fail apologies?
Skip to next paragraph
Why It Matters

With big banks embroiled in scandal and struggle, the Move Your Money initiative is offering a way for ordinary citizens to curtail the power of big banks: go local. Thinking about giving local banking a try? Let us know your thoughts on Twitter.


Here's one way to do something about it.

Take your money out. That's right. Take your checking and savings account out of that big money-center financial institution and move it to a community bank or credit union.

There's even a movement afoot to help consumers make the switch, called Move Your Money, with a well-timed message and a good video (see below).

The website offers search tools so consumers thinking about switching can type in their zip codes to find a credit union or a strong community bank nearby.

Do big banks really care if a few thousand depositors pull out their money? Here's why they do.

Banks' business foundation rests on core deposits, including the savings and checking accounts of consumers and businesses, says Dennis Santiago, CEO of Institutional Risk Analytics (IRA), a bank-rating company in Torrance, Calif.

Although it's too early to tell whether many people will actually move their accounts, the site has been mobbed since it went up in late December.

"The outpouring was tremendous," says Mr. Santiago, who set up the bank search tool and agreed to share the data showing those institutions with the IRA's best ratings. In the first 48 hours, after Arianna Huffington went on CNN to promote the campaign, 80,000 people used the tool to find a local bank.

Since then, half the country's zip codes have been searched and the tool gets 40,000 to 45,000 page views a day, he says.

Even in 2008, the latest numbers available, credit unions and community banks have seen an increase in depositors. Now "other people are taking up the call to move their money into a commununity bank," says Karen Tyson, senior vice president for communications at the Independent Community Bankers of America. "We can't help but be happy with that."

Amber Taylor of Arlington, Va., is one of those who's actually switching.

"I never thought about what bank I chose before," she says. Then, the financial crisis and the bank bailouts got her thinking. When she saw the Move Your Money video, "that got me all motivated me all over again.... I don't know what huge difference this will make in the big world [but] it's one little thing that I discovered I could do."

She and her husband will move their checking and savings accounts from Wachovia to a small community bank near their home on Saturday. Her boss is moving his business account to a community bank as well.

"What all this does is open the door to a remixing of the deposit base of the country ... using the forces of the market," Mr. Santiago says. "Here's the best thing about it: no tax dollars required."
http://www.csmonitor.com/Money/new-econ ... aign-urges

[can't sit still]

ALL of you know that banks create "money" out of thin air. You also know that they only create the principle, not the interest. Because of the enormous growth of the debt resulting from compound interest, we have to trash the environment for commodities to satisfy the interest-debt. This isn't near enough so "they" have to create ever-increasing amounts of new debt to satisfy the principle AND interest payments.
The key to all of this is CONSUMPTION.
Originally, if we didn't consume enough, the government-controlled-by-the-banks committed us to hyper-consumption,,,,,WAR, by any other name. Anytime that we plebs don't consume enough, GOV steps in and consumes in our name [$]
Currently, we cut WAY back on personal consumption. GOV/Bank is happy to take up the slack [in our name] and consume like crazy,,,, VERY crazy.

So,,, here we are. GOV/Bank is signing our names to $ trillion checks. The banks are using a very old operating system in a new world.
After WWII, consumption dropped way off. GOV couldn't find any decent wars to invest in. Korea couldn't be stretched out very long in spite of the fact that we gave them ALL of our movements so that they could avoid.
The banksters came up with an idea; move consumption forward. They "invented" the 30 year loan. That took future consumption and moved it to "today" This was an artificial consumption stimulus. It worked for a while. Remember when car loans were for no more than 3 years and home loans 30 years. Not any more.
Just like cash-for-clunkers, they moved consumption forward. It was all fueled by the enormous growth in credit... Spending tomorrow's check today.

The banks have belatedly caught on to the fact that we just are not going to receive tomorrow's check. Some chinaman is going to get it. If "we" don't get it,,, they don't get it. They have voted "no confidence" in the American consumer/worker. They are pulling out every penny from America. They continually set new records for retraction of credit;
http://globaleconomicanalysis.blogspot. ... d-175.html
There is so little money circulating that the economy is stalling. Because our economy is basically non-viable, free money is the only thing that can get any movement. GOV gives free money to the banks. The FED gives free money to treasury. The free-money stimuli are the only thing that effects the economy. We don't have an economy. GOV doesn't have a solution.
GOV is trying to pump money into the economy by hiring tons of new workers and paying them twice the going rate. You can look high and low. All that you will see is an artificial economy.
Besides hoarding all the money from GOV, banks are retracting credit. They are also hoarding cash. It's difficult to get large amounts of cash from banks. I calculated that there is only about 650 dollars in cash in the US per person. I could see the day when there wasn't any paper money in circulation. It happened in depression I

[can't sit still]

Just thinking out loud. Banks are giving huge bonuses. Bankers are selling stock in their own banks. Bankers are acting like it's the end of the world. ????
It's now very clear that there will be a huge second wave of defaults. The banks have no possibility of covering the losses. FDIC is going down faster than the Titanic. Who does that leave as guarantor of banks?? Why,,, you and me !!!
Do the bankers see "nationalization" in the future.
Fannie was leveraged 95 to 1. CITI wasn't much lower. Is there any real wealth left in the banks? Is there anything that can't be stolen in the next 6 months?
So, lets say GOV nationalizes the banks. Lets say GOV takes all those toxic assets. Lets say GOV takes all those houses and makes them public housing. Then all those nasty rich people can be taxed to pay for all this.
That way, everybody can live in free government housing. The bankers get to keep all the former wealth of the banks. Everybody comes out happy.

[cowboyangel]

weird but not psycho enough for the Bilderbergers....

[can't sit still]

Well, it appears that GOV / banking is still miles away from reality. We have the perfect example to watch/follow; Japan.
Manufacturing moved from high-wage producers to low-wage producers. Japan is closest to the low-wage Asian markets. They got hit first. GOV/banks would like to believe that a country can make it without manufacturing. No problem,,, just support all the zombie banks and all will work out well in the end.
Japan is priced out of the manufacturing market by high wages. They lose even more ground to the Chinese because they financing costs are way too high. Their banks won't face up to the fact that they have been priced out of competition.
The banks can't make money competitively so GOV just hands them money,,, from the public. Japan Air Lines has declared bankruptcy,,, for the fourth time. When is GOV finally going to admit that their high-priced business model can NEVER compete. Japan has had 20 years to claw their way back to competitiveness. It isn't going to happen. The Japanese know this and refuse to borrow money. They know that they can't compete and they know that their future will be nothing like their past.

January 21 – Bloomberg (Aki Ito): “Japanese demand for bank loans dropped the most in more than five years as companies cut spending, a central bank survey showed....â€

[Thecatman]

Personally, I'm still in shock as what the mesiah did to the banks this past week in his town hall meeeting in Ohio.

[can't sit still]

He earlier talked about dunning the banks for $90 billion over 10 years. OK, $ 9 billion a year spread out between several banks. That's chicken feed. He may talk about doing some serious regulating. Like he talked about getting out of Iraq. I seriously doubt that it will ever come to pass.

[DVD Burner]

[youtube][/youtube]

[can't sit still]

The numbers just take your breath away. Reportedly, the banks are holding $203 trillion in derivatives. Our GDP is only $13 trillion.
Goldman has $114,868 million in assets and $41,971,848 million [$41 Trillion] in derivatives. That's a ratio of 365 to 1. Just 7 banks hold 98.8 % of the derivatives.
http://www.financialsense.com/Market/ki ... /0125.html
Everybody knows that GOV expects 1.4 million defaults this year. Does Goldman really expect their derivatives won't have a high failure rate? Do all these clowns really expect GOV to print up $50 or $100 trillion to bail them out.

This is getting so surreal. GOV wants to spend $80 billion for jobs. GOV also reported that stimulus does not create jobs. http://thehill.com/homenews/senate/7794 ... -jobs-bill
Now, GOV is talking about a "freeze" that would save $250 BILLION DOLLARS during 10 years. That's chicken feed, just like his charges to the banks of $90 billion during 10 years.
There is a very good paper discussing the loop that we're in.
http://news.goldseek.com/LewRockwell/1264365753.php
Every bailout inspires the banks to take more risk. You can see by the number $203 trillion that banks have completely run away from any shred of sanity. The default rates are going up like crazy. Apparently, they expect unending bailouts.... no matter the amount. SICKOS

[ygmir]

so,
what's with the talk about "nationalizing" IRA's and the like, and, freezing money market withdrawls, and, stuff like that?
I see many references, but, don't quite "get it"........

[Ugly Dougly]

...This is the time to be overweight gold and silver....

Precious Metals;

Gold
Silver
Brass
Lead
Steel

I see that you need brass before you start using lead. And steel is when the lead runs out.

[can't sit still]

We have a domestic economy and an international economy. It looks like GOV is going to try to screw all investors. It also looks like domestic investors will get screwed first. One of the things that GOV could do is to; convert short-maturity bonds to long-maturity bonds. They just move the maturity date on your bonds backward by 10 years,,or so. If they do it to domestic investors, it's not exactly the same as a default.
http://theautomaticearth.blogspot.com/2 ... rfect.html

The argument du jour is; inflation Vs deflation. Black Swan has some good arguments for deflation;
http://bit.ly/bSdw5z

In the last commodity price spike, the biggest export for the US was scrap metal. We were picking the bones clean. Now, we're selling the carcass. We taxpayers paid for our infrastructure. GOV is now in the process of selling it off;
http://www.rense.com/general89/crow.htm

Roosevelt said that he had to save the banks from themselves. Obama has made no such statement. If over-riding greed can be counted on to self-destruct the banks,,, what prospects does the general economy have when it is also controlled by the banks?
Dan

[can't sit still]

so,
what's with the talk about "nationalizing" IRA's and the like, and, freezing money market withdrawls, and, stuff like that?
I see many references, but, don't quite "get it"........

ygmir, the current talk is about allowing people to move their IRAs into GOV bonds. Suspiciously, They're having a meeting as fast as they can. It may have happened already. The fear is that GOV may make it mandatory. It happened in Argentina. Everyone's retirement was converted to GOV bonds.
Several hedge funds made strict limits on how much a client could withdraw. In a meltdown, GOV may very well put limits on withdrawals from money markets and banks.

The banks are holding a couple hundred $ trillion in derivatives. If the loans that are the basis for the derivatives should default, The banks would have to pay out trillions of dollars. In an effort to conserve cash in the banks, GOV would limit withdrawals.

The increasing nervousness over this is causing many investors to hoard cash. GOV has put mechanisms in place to stop speculation in commodities. GOV can't afford to have prices runaway from speculators trying to pull money out of instruments to put in tangibles. Food and energy prices would go crazy. So, GOV is trying to keep investors from going to commodities.

The problem with investors going to cash is that there is very little of it. Electronic money can be created easily. The FED has threatened to stop creating it. Paper money is MUCH harder to create,,, even of the FED allowed it. Picture just how many bills it takes to total A $ trillion;
http://www.pagetutor.com/trillion/index.html

There is less than a $ trillion in existence... About $ 829 Billion, much of it is in foreign countries. It could all disappear easily.
Buy bacon !!

[ygmir]

yeah, dang, so, if a person had a retirement account, and, decided it wanted to be cash.....I bet it'd raise all sorts of flags............
what to do..........