Global Economy Bursting?

[Couch Potato]

It simply is not newsworthy.

This story is all over the internet, but from what I can tell it seems some major news outlets aren't talking about it:

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-trillion-in-emergency-loans/





Oh...and remember our friend the Prince of Saudi Arabia mentioned in the Fox News thread? He is the largest shareholder in Citigroup but, of course, doesn't get any special treatment or have any influence (right ).

Loans are only big news when they are not repaid as agreed. :new_all_coholic:

 

[Dee Dee]

Loans are only big news when they are not repaid as agreed. :new_all_coholic:

Ha! Keep telling yourself that...and drinking your Kool-Aid....

 

[Randolph Kinney]

This story is all over the internet, but from what I can tell it seems some major news outlets aren't talking about it:

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-trillion-in-emergency-loans/





Oh...and remember our friend the Prince of Saudi Arabia mentioned in the Fox News thread? He is the largest shareholder in Citigroup but, of course, doesn't get any special treatment or have any influence (right ).

I suspect that we all have known for some time that politics and money go together, that banks, the federal reserve and government are tightly linked.

But, the surprising element in those news stories is how much and the magnitude of the crisis required $16 trillion to ease the problems. That's more than the $14+ trillion of national debt. And this economy can't seem to grow or produce jobs.

We are spending $3.8 trillion in FY 2011 for the federal budget. I suppose that spending cuts and tax increases can't rescue us from our $14 trillion debt problem, especially considering the $16 trillion of FED magic only produced what we see today.

Life is about to change and change for the worse. It's really going to get quite ugly.

Thanks for the links Dee Dee.

 

[Randolph Kinney]

My guess is that banks are not going to get paid back on business and consumer loans. My guess is that banks are going to be loaning to the government by the way of buying increasing loads of U.S. Treasury debt.

Strange, the federal reserve is composed of 13 private banks.

 

[Randolph Kinney]

Psalm 2011​

Priceless​

I don't care who you are or what you believe,
this is funnneeee!

Obama is the shepherd I did not want.
He leadeth me beside the still factories.

 

[Couch Potato]

Keep things in perspective.

I suspect that we all have known for some time that politics and money go together, that banks, the federal reserve and government are tightly linked.

But, the surprising element in those news stories is how much and the magnitude of the crisis required $16 trillion to ease the problems. That's more than the $14+ trillion of national debt. And this economy can't seem to grow or produce jobs.

We are spending $3.8 trillion in FY 2011 for the federal budget. I suppose that spending cuts and tax increases can't rescue us from our $14 trillion debt problem, especially considering the $16 trillion of FED magic only produced what we see today.

Life is about to change and change for the worse. It's really going to get quite ugly.

Thanks for the links Dee Dee.

The most the fed ever had in outstanding loans was $1 trillion during 2008.

If I loan you $1,000 every morning for three years how much have I loaned to you?

If you repaid the the loan every evening, how much did you owe me each night?

The GAO audit of the FED is a great source of numbers to use out of context.

 

[Randolph Kinney]

The most the fed ever had in outstanding loans was $1 trillion during 2008.

If I loan you $1,000 every morning for three years how much have I loaned to you?

If you repaid the the loan every evening, how much did you owe me each night?

The GAO audit of the FED is a great source of numbers to use out of context.

"The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank."

Granted, you can minimize that $16 trillion saying, "Loans outstanding for the emergency programs peaked at more than $1 trillion in late 2008."

It does not portend sound banking when emergency loans outstanding at any one time was only $1 trillion, since these are very short term loans. That means you have the same people coming back again and again to renew those loans that total $16 trillion.

"For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs."

Problem? What problem?

 

[Randolph Kinney]

For those interested in reading the entire GAO audit of the FED report:

http://www.gao.gov/new.items/d11696.pdf

For those who think the banks were in sound condition:

Anyone think these banks were sound? Are now sound? :laugh:

PCDF = Primary Dealer Credit

http://www.newyorkfed.org/markets/pdcf_faq.html

The Primary Dealer Credit Facility (PDCF) is an overnight loan facility that will provide funding to primary dealers in exchange for any tri-party-eligible collateral and is intended to foster the functioning of financial markets more generally.

 

[Couch Potato]

I don't think anyone would claim there are no problems and $1,000,000,000,000.00 is a lot of money by any measure. However, multoplying it by 16 to get a shock value comparison with GDP is not done to create an informative news article. 2008 was a particularly bad year and it was most assuredly caused by poor banking practices from which the fallout has not yet settled. That does not mean there is anything particularly newsworthy in the GAO report.

I don't see any problem with the way the FED handled the situation.

 

[Couch Potato]

Current balances?

For those interested in reading the entire GAO audit of the FED report:

http://www.gao.gov/new.items/d11696.pdf

For those who think the banks were in sound condition:



Anyone think these banks were sound? Are now sound? :laugh:

PCDF = Primary Dealer Credit

http://www.newyorkfed.org/markets/pdcf_faq.html

The Primary Dealer Credit Facility (PDCF) is an overnight loan facility that will provide funding to primary dealers in exchange for any tri-party-eligible collateral and is intended to foster the functioning of financial markets more generally.

I notice you did not choose to post balances on those loans as of June of this year.