Hank Paulson urges banks 'raise more cash' as credit crisis deepens

[Sapiens]

http://goldismoney.info/forums/showthread.php?t=246326

"We are encouraging financial institutions to continue to strengthen balance sheets by raising capital and revisiting dividend policies," Mr Paulson told the National Press Club. "We need those institutions to continue to lend and facilitate economic growth."

The remarks in Washington reflect a report released yesterday by the President's Working Group on Financial Markets, chaired by Mr Paulson. The group, whose members include representatives from the Commodity Futures Trading Commission, the Federal Reserve Bank of New York and permanent Treasury officials as well as Federal Reserve chairman Ben Bernanke, has been looking at ways of preventing the sub-mortgage-led crisis from happening again.

Mr Paulson's comments, coming in the week the US Federal Reserve injected $200bn (£98.5bn) into the US banking system in an emergency measure designed to boost liquidity, send a clear warning that the worse of the banking crisis is far from over.

Rumours persist that one or more major banks may yet hit the wall, with Bear Stearns continuing to fend off market whispers that it is close to insolvency. Bear's shares fell a further $7.26 at $54.32 yesterday, in spite of ratings agency Standard & Poor's saying that the worst of the sub-prime mortgage mess was behind the majority of major banks.

You all that read iTulip had plenty of time to prepare... this will hit like a tsunami.

[FRED]

Re: Hank Paulson urges banks 'raise more cash' as credit crisis deepens

http://goldismoney.info/forums/showthread.php?t=246326



You all that read iTulip had plenty of time to prepare... this will hit like a tsunami.

Good analogy. Reminds me of:

Remember the pictures of tourists walking out onto the drained ocean floor before the Asian Tsunami hit in 2004? They were lured by the miracle of a surprising opportunity to walk out onto the exposed ocean floor. Fish flopped on the surface. All you had to do was reach out and pick them up.

Intuition might tell you, "Well, this can't been good. Whatever force has sucked the ocean away from the shore is probably going to send it crashing back in with equal positive force later." The sudden, peculiar appearance of the ocean floor that had for a thousand years been covered in 100 feet of ocean water says: head for higher ground. Those who failed to do so drown when the water surged back, and when it receded again it left heaps of destruction and human loss in its wake.

Asset bubbles are like tsunamis except they are man-made, out of money instead of water, and instead of lasting for a few minutes they last for years. They draw people in, lured by apparently risk-less money. Just bend over and pick it up. What iTulip.com has been telling you for eight years is this: when you see apparently risk-less money -- financial fish flopping on the bare ocean floor -- head for higher ground. If you have the means and the risk appetite, maybe grab a few fish first. But in any case, head for higher ground. Don't stay too long and financially drown.

- The Fed: Dishonest or Incompetent? (August 2006)

[johngaltfla]

Re: Hank Paulson urges banks 'raise more cash' as credit crisis deepens

That's like telling the Irish kids in the engine room of the Titanic to take their pails and "bail that water out faster boys"....ugh.

There is no cash to raise as it's all tied up trying to cover up the paper which should be declared worthless. Paulson helped create this garbage over at GS, he should know....