The Treasury’s new website, financialstability.gov is actually not a bad website for getting some actual information about the administration’s efforts to address the financial crises. It gives us some idea, state by state, about where the money is going and where it went. For example, if you click on Utah, you will find that we got an ample share with most of it going to Zions Bank. And going to the transactions page, we find out that our very own local Zions Bank was, after the 9 largest banks, third in line for the next tier of payouts getting $1.4 BILLION. But even that kind of money still didn’t stop its stock price from plummeting from over $32 bucks a share on the day of the award to less than $7 bucks a share within a few weeks.
Hopefully the website won’t devolve into a propaganda tool, but will get better with more and better content.
Very Best Regards,
Joe
Banks, Economics, Financial Crises Banks, collapse, economy, fiscal policy, US treasury
I’ve written about Simon Johnson and the banking oligarchs before here and here. The Atlantic Monthly just published his most recent writings on the banking crisis. He is scathing in his assessement of our finanancial institutions (the oligarchs), almost as scathing of our governmental response, and lays out precisely what we must do to restore our economy, with which I am obviously in agreement since I am posting a link to the article here for your reading enjoyment. It’s lengthy so read it when you have some time.
Simon Johnson happens to be a pretty smart guy as he is a former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. I follow his analysis closely in his own blog at baselinescenario.com.
Very Best Regards,
Joe
Banks, Economics Banks, collapse, debt, Economics, economy, fiscal policy, monetary policy, The Fed
All currencies in the world today are fiat currencies. That is, they are deemed currency by government decree. They are not backed by, or convertible to any asset such as gold or silver but are only pieces of paper (or electronic blips) that are only backed by the full faith and credit (the creditworthiness) of the issuing government. So what makes a currency valuable?
Since the beginning of time there really is only one variable that makes a currency valuable and that is, Read more…
Currencies, Economics Currencies, Economics, exchange rates, monetary policy, strategy
The government of China has recently proposed that SDR’s be used as a new form of worldwide reserve currency. SDR’s are special drawing rights issued by the IMF. They are not issued by any sovereign government or by the central bank of any government. In fact SDR’s are little more than a basket of currencies important in trade and finance issued by various countries.
Read more…
Economics Currencies, Economics, exchange rates, monetary policy, strategy
John Hutchins recently wrote to me inquiring about my views on the new proposal to begin using SDR’s (special drawing rights) of the IMF (International Monetary Fund) as a new international reserve currency to take over that role now being performed by the US dollar. To begin with, let’s find out exactly what a “reserve currency” is. There are those who scoff at the use of Wikipedia as a source of information, but to me, sometimes there is no better place to get complex issues concisely explained in layman’s terms.
A reserve currency (or anchor currency) is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold, etc.
Read more…
Economics Currencies, Economics, exchange rates, monetary policy, The Fed
Ok, so Jamie Dimon is a bona fide bank Oligarch, but there is one other who easily trumps him in terms of what’s going on in the financial world. The Federal Reserve chairman sits at the top of the single most massive data generating enterprise known to man with the added feature that he also sits atop a pyramid of literally thousands of economists and staffers continually crunching numbers and generating reports. If something is happening financially, worldwide, he will have the best view of anyone, bar none. Consequently, anyone remotely interested in investments or the economy ought to take time out to listen to this, the first interview in generations given by the arguably, “Most Powerful Man in the World”. The interview was broadcast on March 15, 2009.
Part 1
Part 2
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Banks, Economics Banks, collapse, Economics, economy, monetary policy, The Fed
J. Pierpont Morgan is arguably one of the most notorious of the banking Oligarchs. His successor Jamie Dimon, the CEO of JP Morgan Chase Bank recently spoke to the Chamber of Commerce. Dimon said there are still serious issues plaguing the economy, but identified some bright spots — Read more…
Banks Banks, Economics, economy
I’ve submitted a few of my posts to a mainstream investment website, and guess what? They published them. Then to make matters worse, Carl Ayers who publishes IAWATCH, read my article about how a Bernie Madoff scam can never happen with a “traditional investment advisor” and called me on the phone for an interview for *his* article about how to prevent Bernie Madoff scams from happening again. He quotes me in his final product as follows: Read more…
Portfolio Management fraud, Portfolio Management
There is yet one other indicator that almost perfectly and successfully has predicted recessions and recoveries, yes, it’s the yield curve. You can count on a recession when the yield curve is flat, negative or inverted. Furthermore, you can count on economic growth when the yield curve has a positive slope. Given that the yield curve was flat or inverted for most of ’06 and ’07 were we really *that* surprised that a recession landed on us in ’08? And again, what does the yield curve portend for the future when it turns positive? Read more…
Asset Allocation, Economics, Markets, Portfolio Management Banks, collapse, Economics, economy, performance, stock picks, Stocks, strategy
I recently wrote about two charts we’ve shown you previously to identify the symptoms of the current liquidity trap. Well, looking at the same two charts as of today, it appears that the liquidity trap is easing and that some of the Fed’s medicine is finding its way into the economy. Note the beginning of a decline in the banking system’s excess reserves. This is money that is finding its way into the economy.
As always, I suggest one look at leading indicators, as opposed to lagging indicators such as unemployment, when making investment decisions. Money supply happens to be one of the best and most important of the leading indicators. It even leads the stock market. Read more…
Economics, Markets Banks, economy, monetary policy, The Fed
I’ve been out of the stock market entirely now for over a year having sold everything in October of ’07. I’m starting to get fuzzy warm feelings about some of the super blue chips that have been accumulating huge balances of cash on their balance sheets. In this situation, there’s no question that they will survive the recession, will have dry powder coming out of it, and will likely thrive and prosper afterwards. These stocks are Read more…
Portfolio Management, Stocks Portfolio Management, stock market, stock picks, Stocks
