Global economic situation for liveaboard cruising yachties

[masalai]

http://financialsense.com/fsu/editor...2009/1016.html "And the Moon's Made of Cheese"

http://financialsense.com/fsu/editor...2009/1016.html "Primary Bear Trend about to resume?"

[Bamby]

Bailout Helps Fuel a New Era of Wall Street Wealth

Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes?

It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.

Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year.

So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza.

“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending,” said Gary Richardson, a research fellow at the National Bureau of Economic Research. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.”

Not all banks are doing so well. Giants like Citigroup and Bank of America, whose fortunes are tied to the ups-and-downs of ordinary consumers, are struggling to turn themselves around, as are many regional banks.

But the decline of certain institutions, along with the outright collapse of once-vigorous competitors like Lehman Brothers, has consolidated the nation’s financial power in fewer hands. The strong are now able to wring more profits from the financial markets and charge higher fees for a wide range of banking services.

“They are able to charge more for all kinds of services because companies need banks and investment banks more now, and there are fewer strong ones to help them,” said Douglas J. Elliott of the Brookings Institution.

A year after the crisis struck, many of the industry’s behemoths — those institutions deemed too big to fail — are, in fact, getting bigger, not smaller. For many of them, it is business as usual. Over the last decade the financial sector was the fastest-growing part of the economy, with two-thirds of growth in gross domestic product attributable to incomes of workers in finance.

Now, the industry has new tools at its disposal, courtesy of the government.

With interest rates so low, banks can borrow money cheaply and put those funds to work in lucrative ways, whether using the money to make loans to companies at higher rates, or to speculate in the markets. Fixed-income trading — an area that includes bonds and currencies — has been particularly profitable.

“Robust trading results led the way,” said Howard Chen, a banking analyst at Credit Suisse, describing the latest profits.

To prevent a catastrophic financial collapse that would have sent shock waves through the economy, the government injected billions of dollars into banks. Some large institutions, like Goldman and Morgan, have since repaid their bailout money. But most of the industry still enjoys other forms of government support, which is helping to stoke profits.

Goldman Sachs and its perennial rival Morgan Stanley were allowed to transform themselves into old-fashioned bank holding companies. That switch gave them access to cheap funding from the Federal Reserve, which had been unavailable to them.

Those two banks and others like JPMorgan were also allowed to issue tens of billions of dollars of bonds that are guaranteed by the Federal Deposit Insurance Corporation, which insures bank deposits. With the F.D.I.C. standing behind them, the banks could borrow the money on highly advantageous terms. While some have since issued bonds on their own, they nonetheless enjoy the benefits of their cheap financing.

Granted, banks are also benefiting from a stabilizing economy. The fear that gripped the markets earlier this year, when doomsayers predicted a second Great Depression, has largely dissipated. Stocks, corporate bonds, even risky corporate i.o.u.’s — have all rallied from their bear market lows, some spectacularly so. The Dow Jones industrial average has soared 50 percent this year, and touched 10,000 this week for the first time since the crisis.

Banks that had marked down the value of the assets on their books during the dark days of the crisis are now enjoying a rebound in the value of many of those assets.

“Confidence has returned,” said Shubh Saumya, a financial services specialist at the Boston Consulting Group. “Some of the assets that bankers wrote down last year in the midst of the crisis, now they have got some of that back.”

As the number of banks has dwindled, the survivors are moving into the void left by rivals that are either dead or limping and unwilling to take risks.

A big reason for Goldman Sachs’s blowout profits this year has been the willingness of its traders to take big risks — they have put more money on the line while other banks that suffered last year have reined in such moves. Executives say there are big strategic gaps opening up between banks on Wall Street that are taking on more risks, and those that are treading a safer path.

Banks that have waded back into the markets have been able to exploit large gaps in the prices of various investments, a feature of the postcrisis financial markets. The so-called bid-ask spreads — the difference between the price at which banks are willing to buy things like bonds, and the price at which they are willing to sell — are roughly twice what they were two years ago.

Still, the newfound success is largely limited to the big securities houses on Wall Street. This week, Citigroup and Bank of America reported losses from credit card delinquencies and mortgage defaults — a sign of the lingering pain on Main Street.

http://www.nytimes.com/2009/10/17/bu...l.html?_r=1&em

[masalai]

Bamby, a nice summery of the issues but in "tame" language, the pdf by Gerald Cilente http://www.boatdesign.net/forums/att...-autumn-09.pdf puts it in a more "spade is a spade" wording and names the culprits in the criminal and immoral/unethical activity... The big to-big-to-fail bailed out banks are "associated" with the FED, and the bailout virtually indemnifies them against loss, so these "banks" have an extra privileged position which allows them to take risks that would be imprudent for any normal bank to even contemplate... Their, (the Goldman Sachs' group), moneymaking has NOTHING to do with the recovery of the banking or business sector, in fact the reverse, because the funds that could have been available to help/facilitate normal businesses functions in America, IS NOT NOW AVAILABLE to be used by business - even in their NORMAL operational activities... http://www.reuters.com/article/compa...28622420091015

It is easy to use language that makes it seem that these profiteering banks are "really not very bad", when to a reasonable mind, when exposed for what they are, they would make any excesses by the Mafia seem like the best intended social services operation... USA citizenry are being SCREWED as no entity has been able to screw, steal, rape, pillage ever in recorded history, with government support and acquiescence because they, (bureaucrats and politicians), have been bought out and are controlled by the "money-manager" cartel... ONLY 2 people have opened Gerald Cilenties essay... He was the main man who called the current recession well in advance and has got it right so far.... do read it, I would be preparing for what he says if I was in North America.... I expect some fallout even in the "land down under"

The next USA housing loans reset is taking place NOW, (extending over the next 12 months), and is currently showing significant payment defaults, so when the new interest rates kick in, the loan foreclosures and bankruptcy levels will be bigger than sub-prime, which started all this economic instability when that bubble burst, helping to create lots of "toxic-debt"... Alt A and another category (I forget the name ascribed) http://money.cnn.com/2009/10/15/real...risis_deepens/ , as well as the undocumented, (because it is spread out in lots of regional banks and from this distance I can not readily quantify as a sector), - Business lease facilities such as shopping malls and other commercial property, because access to normal working capital is not available, many will be forced to fail...

The original toxic debt is still on the books ready to bite, as all those "instruments" are still alive and waiting to do more damage, as they surely will, and they still hold S&P AAA rating as assets, with a total book value that could devastate the world... (An accounting trick has been allowed to hide this problem...)

If there had been NO bailout, and all the banks allowed to fail, America could have well been on the road to recovery internally by now, but the watchdogs & corporate policing structures failed, by allowing the corruption to flourish, conned politicians to give bailouts, failed to enforce legal obligations and existing rules and laws, and the puppet-politicians had lost any sense of courage to fix the corruption, and do their elected duty for their country... Now nothing short of a coup will save the USA... Where are the leaders who have no current political affiliation as nothing short of a CLEAN START will work... The "Return to the Constitution Party" needs reform and lacks leadership, as does the group Gerald suggests (Ron Paul's group?) Where are the committed leaders in USA? - - the "clean-skins" who are not tainted by existing major party affiliations

[masalai]

http://www.caseyresearch.com/displayGsd.php - Is JP Morgan Nuckin Futs or obeying a greater power (the FED?) serving what purpose except to depress a market by putting fear into the small punter...

http://www.caseyresearch.com/displayCdd.php?id=251 - - - a little cheeky humour on a depressing topic?

[masrapido]

Originally Posted by masalai

Well what can I do USA is the corruption central of global economics (and lots of other activities - biggest market for cocaine, opium derivatives, fiscal derivatives, valueless paper gold and paper silver, all sold at inflated prices

I am not your, or his keeper..... how should I know? - - probably making lots of money selling his Organic Farm derived, vegetables & other produce...

Well said Masalai. I am quite busy with my farm to allow myself the time to read the light entertainment provided by the mexican immigrant calling himself a "methodist" by religious orientation.

Being the communist to the core of my last cell, I am quite happily making money on what I think is the new gold: food.

As boston, and myself a few times, said you can't eat the metal.

And in the process showing to those with eyes (read: brain) that commies are NOT against the private enterprise. (let's not go to Stalin and similar forrest gumps of the east now. There's no difference between hitler, forrest gump or stalin.)

Rather, communists are against the EXPLOITATION of free (freedom is the right acquired by birth) human beings. Exploitation that comes with capitalism which is only interested in profit, as opposed to "democracy" the ********ters "defend" so vigorously by killing people who disagree with them.

So **** capitalism and let it blow up and destroy itself as fast as it can. And now, if you would excuse me, I have a farm to tend...

And buying some more land to cater for the market demanding more than I can produce. Unlike the mexican (I still feel we are dealing with cuban immigrant who always wanted to kiss John Wayne's white arse and lick it clean, as anti-castro cuban immigrants tend to desire...) inmigrante. Jobless and happy to live off black economy in the usa, between the posts about things s/he lacks any serious knowledge of.

Like the capitalism...

[masrapido]

I was tempted to post some photos, but what if you economic inmigrantes see how nice is here and flood us with your presence, looking to buy our property?

To much of a risk. There are to many of rats trying to escape their paradises for something better...

No photos. It's all doom and gloom down here.

[hoytedow]

You keep Chile. I am sure it is a fine place, but I am happy right here in the good old USA, where I shall stay. I am happy you are happy in Chile. Please don't make yourself miserable by ever visiting my country.

[hoytedow]

... and P.S. Viva La Cuba Libre. Algun dia.

[masrapido]

Originally Posted by hoytedow

You keep Chile. I am sure it is a fine place, but I am happy right here in the good old USA, where I shall stay. I am happy you are happy in Chile. Please don't make yourself miserable by ever visiting my country.

Well, again we agree. Small steps leading to something positive are always welcome in my view. And if Prof. Kanarev and Clemente are right, with the civil war there being imminent, I would think three times before considring travelling there. And then three times again just to make sure I do not decide to go...

P.S. Cuba is libre. And we'll agree surely (one more time) that when Castro's "way" disappears, they will be even more. But that does not include the other disastrous utopia, the capitalism. Rushing into a consumer-centred "freedom" is going to destroy them only more. As we can see from the ex-eastern block countries. One after another governments fell to criminals and money-grabbing "politicians" while the stupid sheep (majority) rushes into the "supercentres" and "food outlets" stuffing themselves with cheap (chinese made) products no one intelligent really needs, and celebrating these stupid shopping orgies with fat'n sugar sold as "food" in the "fast food" joints.

If that is what you want for them, they would be better as they are. At least they have their own in their hands. No matter how little that seems now.

[masrapido]

But do not get me wrong, I know that the land is beautiful in your country. And that there are some really nice people too. Pity so many think with their government's head though, instead their own. I keep wondering where did the spirit of "freedom", the one that respects people who think differently and is for cooperation and understanding, go...

[Tcubed]

Iran to drop US$ entirely.
http://www.presstv.ir/detail.aspx?id...onid=351020102

America will invade Iran now for sure.
I just hope it does not escalate into a world war.

[hoytedow]

Believe you me. I don't think with my government's head. My party is in the minority, and the government we currently have is more like the government that you, masrapido would like, than any we have had since 1622. Cuba is not libre but Los Buenos Gusanos who left Cuba are now liberado, y tienen conmigo el miedo que el gobierno tratara a tomar todos las derechos de nosotros. Viva El Capitalismo!

[hoytedow]

Originally Posted by masrapido

But do not get me wrong, I know that the land is beautiful in your country. And that there are some really nice people too. Pity so many think with their government's head though, instead their own. I keep wondering where did the spirit of "freedom", the one that respects people who think differently and is for cooperation and understanding, go...

I agree, there some really nice people here, but this group I like is probably a different group than the one you like, and when not engaging in political discussions, most are "nice". My fmily swings entirely from commie to imperialist pig with myself being an example of the latter. Stalin was a true imperialist. So was Hitler. They both tried to swallow Europe, and then the world. We just want to live in peace, work for our food and comforts and then be allowed to keep the fruits of our laboursor give them to those less fortunate ones upon whom we wish to have them, without having them seized to be given to others who had no right to them just so that one political party could gain favour from those recipients. Your way isn't charity. It is armed robbery. It is covetous. It is wrong.

I wonder how the "salmon" farms are doing in South America...
One thing memorable about Chile was the kid in Santiago with hyperelastic skin - For propinas, he would take his penis out of his pants and stretch it 40cm, or so, and swing it around like a valley girl swings gum around her pinkey. That's just not the sort of thing you see every day in this hemisphere!
The dude is right tho...parts of Chile are amazingly beautiful - but they still F it up every chance they get. Kinda like Puerto Rico. Everything handed to them and they just turn that gorgeous real estate into a stolen car and drug deal haven.

[Boston]

in both the BBC and CNN it was reported today that a number of top commanders of Iran's military were assassinated

thing is the us cant afford any more conflicts, for one the military is already stretched thin as it can and for another it hasn't got the financial means to take on another hopeless war. The final nail in the coffin, I cant picture the american public being dumb enough to get behind a third open war thats going to look dam similar to the other two. Iraq is a nightmare of civil war and its obviously not slowing down other than in areas where one side has already killed off the other. what you dont often hear about is that both sides turned on the Christian populations almost as viciously as they turned on each other. Killed them off nearly to a man, Nice folks eh, whats the death toll in civilians in Iraq, something like a half million I think I heard and Afghanistan is equally as hopeless

no way the US is going into Iran, but I suppose we do have all those handy dandy "terrorists" that might just "happen" to blow up a few of the less desirable elements of the Iranian gov. Mighty conveniently of them eh, of course that was just a coincidence though, The US has clearly stated it does not condone assassination ( now we can all sleep peacefully eh ).