Global central bank bailout follows ten years of regulatory failure

[FRED]

This video starts off with Jim Cramer back-peddling on his ranting appeal to the Fed to bail out his hedge fund pals, posturing that his motive was to save Joe Sixpack from a second Great Depression. (See the original video "Why I Took the Fed to Task on 'Stop Trading'" here.)

Oddly, Cramer brags that he was involved in selling crap S&L paper, which caused a mini-depression in part of the American southwest in the 1980s and early 1990s, as more than one million homeowners walked away from their homes. You can still see the foundations of unfinished homes in parts of Texas to this day.

We move on from Cramer to look at the challenges that confront Congress as politicians try to get the mortgage debt horse created by an out-of-control lending industry back into the barn and the Fed deals with market panic and turmoil after ten years of regulatory failure come home to roost.

What's going to happen? Hint: you don't clean up a decade of credit market slop with a couple of rate cuts.

[Sapiens]

Re: Global central bank bailout followed ten years of regulatory failure

Genius.

One thing, the whole thing is a fraud. Fractional Reserve Banking is theft by deception. That is a fact. No more central economic planning! Abolish the Federal Reserve!

[Ed]

Re: Global central bank bailout follows ten years of regulatory failure

This may be of ‘outlook’ interest. Referring to my page
http://homepage.mac.com/ttsmyf/newestHousData.gif
as of the stated mid-April 2007 time, both of the red and the blue Real Home Price Indices have dropped 11.4% of the way from their all-time highs of 100 (in mid-January 2006, for both) down to their ‘maybe return to’ levels shown in their respective colors.

[rj1]

Re: Global central bank bailout follows ten years of regulatory failure

Question.

On Thursday I had the day off due to a desire for some rest, and so got to watch CNBC and their panic most of the day after BNP Paribas' action.

They were talking about the ECB's 95 billion euro injection into European banks and the Fed's 24 billion dollar injection into U.S. banks.

1. Who is getting this money, really?
2. Is this the bailout pretty much (if not for "homeowers", than for financial institutions)?
3. Why is this 24 billion dollar number smaller than the number listed in the video? Covert subsidizing?
4. What effect does this have? Higher inflation and the dollar falling through the 80 level?

[bart]

Re: Global central bank bailout follows ten years of regulatory failure

Question.

On Thursday I had the day off due to a desire for some rest, and so got to watch CNBC and their panic most of the day after BNP Paribas' action.

They were talking about the ECB's 95 billion euro injection into European banks and the Fed's 24 billion dollar injection into U.S. banks.

1. Who is getting this money, really?
2. Is this the bailout pretty much (if not for "homeowers", than for financial institutions)?
3. Why is this 24 billion dollar number smaller than the number listed in the video? Covert subsidizing?
4. What effect does this have? Higher inflation and the dollar falling through the 80 level?

1. The banks that participated.
2. It's only a set of very short term loans to free up liquidity issues.
3. The $24 billion was only the US Fed's portion on Thursday. The video total is worldwide for both Thursday & Friday.
4. Your guess is as good as mine, but on the long term both will occur.

[WDCRob]

Re: Global central bank bailout follows ten years of regulatory failure

Bart, EJ, et al... what's your outside guess on what constitutes 'long-term' in this case?

Does this acute crisis portion of the readjustment play out in 3-4 years? Quicker than that?

[bart]

Re: Global central bank bailout follows ten years of regulatory failure

Bart, EJ, et al... what's your outside guess on what constitutes 'long-term' in this case?

Does this acute crisis portion of the readjustment play out in 3-4 years? Quicker than that?

There's just plain too many variables to venture much of a guess, partially due to not knowing what you mean by "acute". EJ's ka-poom chart is as good as anything.

Behind the scenes support and manipulation has been going on for decades. The current TOMO pool balance is $67 billion, which is far from the max since 2000 of over $160 billion.

From the Dow peak in 2000 to the bottom in Oct. 2002 was about 2.6 years, and it'll likely be less this time assuming we have seen a Dow peak - either nominal or real.

The bottom of the Armstrong global cycle is in March 2008, then up into April of 2009 and then down into mid 2013.

[Charles Mackay]

Re: Global central bank bailout follows ten years of regulatory failure

EJ is obviously pissed at Cramer for blocking that one video. This is starting to look like a good boxing match. Hope it continues.

One question...is this jocks or nerds?