We haven’t run these Chart Store graphs in a few weeks, so lets take a look:
In the beginning of the year, I thought we might blow past 2009′s totals, but it looks like 2010 is going to just barely outpace last year. Strong start, but we look like we will end up within a similar total to last year:
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries." -Bill Gross
Signs continue that European markets are getting tired. The Spanish and Italian stock markets, big beneficiaries of the sharp decline in their bond yields over the past few months are falling to the lowest since Feb 1. The European bank index is at a 1 1/2 week low after earnings reports from Commerzbank and Credit Ag (RBS bouncing although reporting weaker than expected earnings) were disappointing. This market action is in spite of the German IFO business confidence figure which rose to a 7 month high coming in a touch above expectations and Italian consumer confidence which bounced more than...
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December 12th, 2010 at 7:03 pm
the number of banks on the troubled list is still in a word … troubling
December 12th, 2010 at 7:04 pm
Meanwhile, look what happens when you make the guilty parties pay for their crimes:
http://www.guardian.co.uk/business/2010/dec/07/iceland-exits-recession-third-quarter
December 12th, 2010 at 7:28 pm
ever get the feeling that the fed’s wouldn’t mind if a few hundred more bit the dust?
December 12th, 2010 at 8:50 pm
Why dont you show the “cost to FDIC” of these failures? It seems far more int and representative than “# of failures”?
http://www.marketwatch.com/story/10-reasons-to-shun-stocks-till-banks-crash-2010-12-07?pagenumber=2
That shows a HUGE dropoff. Costs are basically now a trickle. So its just small bank closures, failures, organized mergers. Of course, these “costs” are highly likely to be conservative and over estimated. Just as TARP was supposed to “cost” $700B and now it is clearly profitable. Just as many on this board (even BR?) were clamoring over the AIG emergency loans… which as so many other programs… now look to be profitable.
Its wierd that so many are furious or think there is anything criminal about “emergency crisis loans” that end up profitable and all paid back? All those Fed loans… they all got paid back right? The Fed MADE money, right? Its wierd.
The only complaint should be that emergency loans, at 1-2-3% couldve been made directly to homeowners or citizen borrowers.
December 12th, 2010 at 9:44 pm
Yes, all is right with the world now.
For centuries alchemists tried in vain to turn lead into gold.
And just think of all the millions who suffered in the Great Depression for lack of money. If they had just known how easy it is! They could have saved the world from economic collapse too, and maybe even make a profit doing it!
I assume Ben will get a Nobel Prize in Economics soon. After all, he was right. All it took was dropping billions of paper dollars from helicopters over Manhattan Island. It’s genius! And so simple! Why didn’t we think of that sooner!
Gold… tsk tsk, who needs it?! Silver? Surely you jest. Paper is much better: it’s lightweight and you don’t have to dig through tons of dirt to find it. Just fire up the presses!
And they might as well get rid of the VIX; what is there to fear now?
Jobs? Not to worry, Obama and his new found GOP buddies have taken care of that with their new tax agreement.
Economics used to be the dismal science, but we got it sussed now! As Cramer says, “back up the truck”! Or as the young people say, “it’s all good”.
It is really a shame our forefathers had it so rough, when it’s really so easy.
December 12th, 2010 at 10:12 pm
To Cognos: “The fed MADE money, right?”
Uh the short answer is , hell no. At least as you and I would understand it. Go to the non establishment sites on the web. Here’s an article to start to show the accounting tomfoolry required to make these outrageous statements. There’s plenty more on the web for those who care. And the Fed response to the FOIA requirements was only a partial disclosure.
http://bailoutsleuth.com/news/2010/10/sigtarp-report-questions-transparency-of-treasury-department/
Its pretty easy to “make” money when the taxpayers give you as much as they have. But I am betting that money is still being lost and God help the fed if there is ever an audit that forces them to state what all the crap paper they now hold is actually worth.
Again there is a difference between the public statements made by the fed and the companies that benefitted from the bailout , what treasury is willing to admit, what credulous journalists who do no critical thinking or analysis report, and reality. The cold hard accounting facts will eventually carry the day.
December 12th, 2010 at 10:30 pm
I’m with ya Chromex, up to the “cold hard accounting facts” part.
Oh, if that were only true. But as we saw in the depths of the financial crisis, even accounting facts are quickly brushed aside when their truth becomes too “inconvenient”. Further, as a CPA in a former life, I can say with some direct knowledge that even before 2008 accounting “facts” were never as truthful as most people thought. And now with GAAP on the ropes, I fear they are becoming less truthful with every passing year.
December 12th, 2010 at 10:48 pm
What’s up here, isn’t the 60 days up this week?
http://www.bloomberg.com/news/2010-10-19/pimco-new-york-fed-said-to-seek-bank-of-america-repurchase-of-mortgages.html
December 13th, 2010 at 1:53 am
Here is another chart :
December 13th, 2010 at 3:05 am
The bank closure stats are mega bullish! The more banks that close, the better it is for the big Wall Street banks who will make even more money! Whooooo-eeeee! Time to buy GS, Citi, and JP again.
December 13th, 2010 at 8:25 am
@cognos:
So, since according to you almost everything is fine again how to you reconcile this view with following?
“Unofficial Problem Bank list at 919 Institutions”
http://www.calculatedriskblog.com/2010/12/unofficial-problem-bank-list-at-919.html
Total assets of those banks: $411.4 billion
Even if not all of these banks fail, it looks like this “trickle” will be going on for years to come, doesn’t it?
So, let me summarize. There has been a real estate collapse, trillions dollars of debt won’t be paid back, there has been a bailout of the banks, their bond holders, and other holders of mortgage debt by the government. And now the banks have had great two years due to the bailout and the speculative rally in the markets, and we are being told that the bailout will be profitable for Treasury and for the Fed as well. So everyone makes a profit at the end according to you and others. Right? Where have all the losses gone then? Have they miraculously vanished? Where have the trillions dollars of bad debt gone? Don’t the losses related to the bad debt have to show up on someone’s balance sheet? What is the magic behind this? Weird indeed. I have had some problems to grasp this. Please explain, cognos.
BTW: How is the S&P500 at 1350 before year end coming?
December 13th, 2010 at 9:12 am
In a real world there would be many more banks. NOne of the regulators, especially the FDIC are taking correct actions. They aer all looking the other way and the black letter of the law has not and will notbe followed anytime soon. The game MUST go on, and that means the lies must continue.
Expat: You are absolutely corerct. This is all by design. We are Japan, we have been for a few years now and our actions are accelerating the cycle. How many banks does Japan have? How many banks does the US have??? More work needs to be done, the beig bnks will be allowed to continue on the ZIRP zombie status for many years, which will kill the small community bank along with the credit union. The government wil own the big banks outright by time the transformation is complete.
Why do we have no one willing to lead us up against this tyranny????????
December 13th, 2010 at 10:11 am
Chomex — You are 100% incorrect. Almost every single one of the “bailouts” (wierd) was just a loan. Almost every one of those had been REPAID, plus INTEREST. In the case of the big wall street, preferred stock loans… the govt also got warrants many of which made $Bs, even $10B to a single deal.
The Fed continues to spin-off $50-100B per year, EVERY YEAR to US Taxpayers. Because the Fed is a lending mechanism. Those LOANS (really, people dont seem to get this) get paid back.
Now, of course, the Fed has 1 big advantage… it funds at 0%. It not hard to make money when you fund at 0%. But there are no “losses” or “costs” here. Only profits. There are next to zero losses on the Fed bal sht. Anyone who tells you otherwise, is just wrong. They are lying.
The CAUSE of the crisis was rampant real-estate speculation. The main actors were a) citizens caught up in the bubble; b) real-estate developers and aggressive mortgage brokers; c) bank regulators — FDIC, senators, small part of the Fed. Its time for citizens to take the blame. Witch hunting is for morons.
It was not really “Wall Street” caused. It had nothing to do with “prop trading” or “bank bonuses”. Its a real-estate bubble… see south Florida, So Cal, Las Vegas, Pheonix.
Its kinda cool… and has some serious positive repercussions… housing is now 50% off. Thats pretty great going forward. Im sorry but economic progress is everyone having a better, larger house… and that being more affordable. We’re there.
December 13th, 2010 at 10:14 am
Expat, Curbyourrisk -
You guys make good points. If people want smaller banks… the key is to grow, support, and promote new banks and competition.
The regulators, especially Sheila Bair (who is worst person #1 in this whole crisis), they are doing the exact opposite. Its sad and stupid.
Closing banks and telling the remaining big banks to “de-lever” is just stifiling the economy and slowing recovery. I would be telling banks to lend (=leverage) and providing large incentives for the formation of new banks.
December 13th, 2010 at 10:25 am
Cognos: I was joking. It’s the ol’ “bad is good” meme.
December 13th, 2010 at 11:55 am
@cognos:
Unfortunately not true where I live. It’s still not affordable and over-prized 70 to 100% relative to median household income or rental prices.
And why are you complaining in others of your comments about the price collapse in real estate then? And why are you pleading there for a return to inflated asset prices?
I’m waiting for the explanation for which I asked you.
December 14th, 2010 at 2:49 am
@cognos
‘It was not really “Wall Street” caused. It had nothing to do with “prop trading” or “bank bonuses”. Its a real-estate bubble’
Government subsidies (mortgage tax credits, fed funds rate too low for too long, etc.) encourage the creation of such bubbles & the banks which created exotic loan securitization products absolutely without a doubt extended how long the bubble lasted & its economic impact: hence why they started buying their own CDOs more aggressively as mortgage demand dried up. Money lost on bad loans isn’t lost the day the loan eventually goes south, but while the ink is still wet on the new contract.
The question is: who gets to be the bag holder? Outside of the sun, there is no free lunch.
You blame the consumers, but did consumers know that…
- that bankers had internal memos for how to trick their mortgage qualification tools?
- other consumers were being given NINJA loans?
- banks were buying their own CDOs?
Incidentally, ‘Predatory LENDING’ isn’t given that name because of the borrowers.
It is not hard for the banks to make ‘profits’ on their bailouts when they…
- offloaded well over a trillion Dollars of mortgages onto the Federal Reserve
- got to offload the risk of some of their additional assets onto the US government, with the government in exchange buying their stock at well north of fair market price
- received benefits from other recent schemes like first time home buyer tax credits, at par backdoor bailouts through AIG (in which AIG has to waive the right to sue the banks for their malicious fraud in order to qualify for bailout funds), and benefits from government cash infusions into Fannie & Freddy
- get to use accounting fraud to book profits that do not exist
I also get that by destroying the value of the currency to create various bubbles that over time eventually everything can be sold off at or near par in nominal terms, however by that same logic the time value of money is nothing, even as the quantity of money chasing the same goods doubles.
The Dollar index has slid from about ~120 to ~ 80 since the mortgage fraud epidemic took hold. And other countries have been devaluing their currencies to try to ride the slide down with us.
A world in which a person could have seen this whole sequence unfold & view the bankers as not being part of the problem is quite a bizarre one. One in which I am glad I do not live.