Defaulting banks - where will it stop?

[Magda Hassan]

Does any one take the ratings agencies seriously any more? These are the same people who gave all the collapsed bank a AAA credit ratings just months ago. :damnmate: Almost as useless as the CIA in not predicting 911 and the collapse of the USSR. Unless of course.... they're in on it? Nah. :marchmellow:

[Magda Hassan]

GE downgraded...Did you place that bet then Jan ?

General Electric debt rating cut

US conglomerate General Electric had its debt rating lowered by ratings agency Standard and Poor's.

Its rating has been cut from AAA, the highest rating, to AA+. The action may make it more expensive for GE to borrow in the future.

The downgrade is significant because GE is viewed as a barometer of the health of the US economy.

GE last month cuts its dividend, a move it said would save it $9bn a year as it sought to shore up its finances.

"While no one likes a downgrade, this review and rating reaffirm the relative strength of the company," said GE Chief Executive Jeff Immelt.

GE's finance unit GE Capital has been hit because it makes a wide variety of loans, including mortgages, that have since seen their value plummet.

The economic downturn has also hit its industrial unit, which makes aircraft engines, home appliances, light bulbs and wind turbines.

The ratings downgrade means that S&P now considers GE less likely to pay back its debts. However, the agency considers GE's outlook stable.

"We are prepared to fund the company as a double-A, but we will continue to run GE with the disciplines of a triple-A," Mr Immelt said.

The company said it did not expect any impact on the way it funds itself from the ratings downgrade.

http://news.bbc.co.uk/1/hi/business/7940191.stm

Every clound has a silver lining :congrats:. I just came across info (maybe old though 2002) from the Centre for Public Integrity http://www.publicintegrity.org/articles/entry/399/ that Richard Armitage has between $500,000 to 1million in GE stocks. Rumsfeld too. Boo hoo.

[David Guyatt]

JUAN GONZALEZ: I’d like to ask you, given the increasingly global connections of our banks and other multinational corporations, the issue of how you remedy a crisis in one country. For instance, I heard last night on C-SPAN the hearing that Congressman Kucinich had of the bailout. He had an oversight hearing yesterday. And he questioned the Treasury Department over the fact that the bailout money has been going to banks that, in some cases, are then using the bailout money to invest overseas, a $6 billion—

MICHAEL PARENTI: Right.

JUAN GONZALEZ: —investment in Dubai, an $8 billion investment in a company in China—

MICHAEL PARENTI: China, I was just going to say, right.

JUAN GONZALEZ: —I think by Bank of America, so that—and Kucinich was asking, what are we doing giving money to bailing out banks who say they can’t lend in the United States, but then they use the money in investments abroad? How do you reconcile the global connections of these companies with the need in one particular country to stem the financial crisis?

JUAN GONZALEZ: I’d like to ask you, given the increasingly global connections of our banks and other multinational corporations, the issue of how you remedy a crisis in one country. For instance, I heard last night on C-SPAN the hearing that Congressman Kucinich had of the bailout. He had an oversight hearing yesterday. And he questioned the Treasury Department over the fact that the bailout money has been going to banks that, in some cases, are then using the bailout money to invest overseas, a $6 billion—

MICHAEL PARENTI: Right.

JUAN GONZALEZ: —investment in Dubai, an $8 billion investment in a company in China—

MICHAEL PARENTI: China, I was just going to say, right.

What does this tell you, if anything? To me it suggests the focus is moving to the southern hemisphere and the west is being completely drained of its wealth and assets to achieve a new southern alignment.

Could it that our northern climes are so thoroughly trashed that they are beyond salvage and that those in the know are aware of this? This is highy speculative and CT obviously, but I do wonder sometimes.

Prince Charles in a speech given in Brazil yesterday warned of the catastrophe that awaits the world if it doesn’t tackle climate change. He warned that

We have less than 100 months to alter our behaviour before we risk catastrophic climate change, and the unimaginable horrors that this would bring.

Where did he get 100 months from? That seems far too precise a figure to have been simply grabbed from thin air. There must be a believable and influential study (or studies?) that he is quoting from.

[David Guyatt]

Every clound has a silver lining :congrats:. I just came across info (maybe old though 2002) from the Centre for Public Integrity http://www.publicintegrity.org/articles/entry/399/ that Richard Armitage has between $500,000 to 1million in GE stocks. Rumsfeld too. Boo hoo.

Sadly Magda, that was from 2002. What's the betting that both have long since moved their money to other more reliable investments?

On S&P, Moody's etc., I was told that by mid-late last year no one in the City was taking any notice whatsoever of the ratings agencies. They had been so consistently flawed in their analysis, so financially tied to the companies they rated that they had become part of the problem, not a solution.

[Peter Lemkin]

A new government report says American families lost a record-high amount of wealth last year. According to the Federal Reserve, American families in 2008 cumulatively lost 18 percent of their wealth. The losses amount to $11 trillion, equal to the combined annual output of Germany, Japan and the UK. As losses add up, debt is also skyrocketing. Mortgages and credit card debt now amount to $13 trillion, or 123% of after-tax income. In 1995, debt amounted to 83 percent of income.

...how many years can this go on?....answer: VERY few....and as most of this loss was in the last few months and is continuing and accelerating......bye, bye!

[Jan Klimkowski]

What does this tell you, if anything? To me it suggests the focus is moving to the southern hemisphere and the west is being completely drained of its wealth and assets to achieve a new southern alignment.

Could it that our northern climes are so thoroughly trashed that they are beyond salvage and that those in the know are aware of this? This is highy speculative and CT obviously, but I do wonder sometimes.

Classic slash and burn.

Soylent Green meets The Omega Man, perhaps with some Rumsfeldian bird flu thrown in to speed up the fear factor and the depopulation process...

Prince Charles in a speech given in Brazil yesterday warned of the catastrophe that awaits the world if it doesn’t tackle climate change. He warned that

We have less than 100 months to alter our behaviour before we risk catastrophic climate change, and the unimaginable horrors that this would bring.

Where did he get 100 months from? That seems far too precise a figure to have been simply grabbed from thin air. There must be a believable and influential study (or studies?) that he is quoting from.

Perhaps Prince Chas has seen the elite's secret data.

Perhaps he's just rambling.

I really really don't know.

However, I do know that if the computer models are now revealing unexpected chain reactions and showing that the climate is going to hell much faster than expected, this information will be kept from the masses until They deem it expedient to tell us.

"Expedient" in Their terms means when They've relocated to the new Colonia Dignidad in Paraguay and perhaps an age-old Thule in the Antarctic...

Btw Joseph Farrell has a new book out very shortly.

[Jan Klimkowski]

The game of musical chairs with parcels of "assets" which are in fact so toxic that they're glowing like Chernobyl fallout has rendered nation states, corporations and funds dizzy and nauseous.

:dancing:

They're all completely panic-stricken that the music might stop whilst they're holding a complete crock.



It looks like China may be about to switch the music off...

:call:

China’s Premier Wen ‘Worried’ on Safety of Treasuries (Update2)

March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.

“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

White House National Economic Council Director Lawrence Summers, asked about Wen’s remarks, said overseas “confidence” in Treasuries would be hurt without the administration’s steps to end the economy’s decline. President Barack Obama is relying on China to sustain buying of Treasuries amid record amounts of debt sales to fund a $787 billion stimulus package.

“China’s purchases of American debt have been one of the few bolts keeping the wheels on the global economy,” said Phil Deans, a professor of international affairs at Temple University in Tokyo. “If China stops buying, where does Obama’s borrowing to fund his stimulus come from?”

Treasuries declined after Wen’s remarks, before recouping the losses later. Yields on benchmark 10-year notes rose as high as 2.96 percent, from 2.85 percent late yesterday, and were at 2.83 percent at 12:27 p.m. in New York.

Loss on Treasuries

Treasuries have handed investors a loss of 2.7 percent in yuan terms this year, according to Merrill Lynch & Co.’s U.S. Treasury Master index. Chinese investors increased their holdings of the bonds 46 percent to $696 billion in 2008, according to U.S. Treasury data.

“Of course we are concerned about the safety of our assets,” Wen said after the annual meeting of the legislature. “To be honest, I am a little bit worried.”

Summers said that taking “austerity” measures would be even worse for the economy and financial markets, which he said he tracks “very closely.” Answering questions after a speech at the Brookings Institution in Washington, he said it’s “fiscally responsible” to implement measures in the near term that will restore longer-term growth.

China should seek to “fend off risks” as it diversifies its $1.95 trillion in foreign-exchange reserves, Wen said. Yu Yongding, a former adviser to the central bank, said in an interview on Feb. 10 that the nation should seek guarantees that its Treasury holdings won’t be eroded by “reckless policies.”

http://www.bloomberg.com/apps/news?pid=2...refer=home

[Jan Klimkowski]

The following is precisely what the Chinese do not want to hear....

U.S. would need more borrowing if deflation sets in: Summers

WASHINGTON (Reuters) - The United States would have to increase its borrowing if deflation sets in and the economy collapses further, White House economic adviser Lawrence Summers said on Friday.

"If deflation sets in, if the GDP (gross domestic product) collapses further, if the consequences of that collapse for the financial system and even just the insured parts of the financial system, if that happens, the magnitude of the federal borrowing as large as it is today will be dwarfed, will be far, far larger," he said at the Brookings Institution.

http://www.reuters.com/article/businessN...5M20090313

[David Guyatt]

I suppose that if US Treasuries went belly up China would be economically ruined and then cash-rich corporations bloated with tax-payer and plunder money could buy Chinese assets at fire sale prices? Defeat the competition and acquire what's worthwhile in one foul stroke.

Just a thought.

But I am minded of the fact that the Tiger economies collapse of circa 1998 were the result of coordinated hedge fund activity -- and following that great gobs of assets were picked up for cents on the dollar. Could be the same pattern unfolding.

[Peter Lemkin]

Add the above thoughts with the little cat and mouse game Chinese and American warships had plus Brziggy's wish to start a war with China [and Russia]...we ain't there yet, but certainly can see a way there now. Simply put, this economic mess could in short order start major wars. The engine of humanity was BADLY in the need of an engine overhaul before, but now it seems an engine fire and possible explosion of the gas tank are quite possible. Makes the Cold War days seem like the Good Old days.