Where is the US economy headed?

@maporsche,

Your assumption that "none of this has to do with TARP" shows your ignorance.

@cicerone imposter,

How?

@maporsche,

There are a multitude of articles explaining the purpose of TARP; do a Google search, and read up on it. Also include what other developed countries have done to prop up their banking system.

After you have done this, come back and report what you found.

1 Reply

@cicerone imposter,

You're assuming that I haven't already done all this. I have. I've reached this conclusion after doing my research.

Nevermind CI, just keep patting yourself on the back about your fantastic stock picks that were made possible by mortgaging MY future away.

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@maporsche,

Quote:

If the banking system froze. What then?
People don't get their paychecks for a few days. What then?

" ... for a few days " ???
people might have received their paycheques , but who would accept the - perhaps worthless - cheques ?
you wouldn't know if the money in your bank account was readily available .

sure , humankind would have survived but perhaps on a much lower economic level .

( look at what happenened to germany - and other countries - during the early 1920's inflation . i doubt you or anyone else would want to see a repeat of that .

was TARP not desined to ensure that the banking system would continue to operate /ensure liquidity ?

do you think people's bank accounts should have become worthless if it was in THE WRONG BANK ?

there are some economists that believe the real problem has just been postponed/covered up and will re-occur at a much more serious level . )

lack of liquidity continues to threaten market :

http://www.dsnews.com/articles/lack-of-bank-liquidity-threatens-commercial-real-estate-market-2009-12-22

Quote:

“The commercial real estate industry is a disaster waiting to happen,” said Andy Bogdanoff, founder and chairman of the company. “With U.S. banks in a deep and continuing liquidity crisis and with $1.2 trillion in commercial debt due to mature by 2012, thousands of real estate owners and developers across the country will soon find themselves between a rock and a hard place when their loans mature.”

not out of the woods yet , it seems .

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@hamburgboy,

Money in bank accounts are FDIC insured. The FDIC would not have failed had TARP not passed.

Some banks would have; the insured money would have moved to other banks that didn't fail. I don't see the problem with any of this.

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@maporsche,

Quote:

Money in bank accounts are FDIC insured

that assumes that the banks would have stayed " liquid " . the FDIC has only a very limited amount of money . it would not have been enough for a really serious " run on the banks " ( as in the 1930's ) .
it was not meant to cover an overall " banking crisis " .

unfortunately , we believe that insurance will be there when we need it most ... but lately some insurance has turned out to be worthless .

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@hamburgboy,

Could we not have taken the money we printed and have put it into the FDIC?

Not all banks would have failed.

1 Reply

@hamburgboy,

And thank you for actually trying to discuss this topic.

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@maporsche,

maporsche wrote:

Money in bank accounts are FDIC insured. The FDIC would not have failed had TARP not passed.

Some banks would have; the insured money would have moved to other banks that didn't fail. I don't see the problem with any of this.

Wow, laughably ignorant re: the structure of US banks and the FDIC.

The biggest banks would have failed; they support the smaller banks in many ways, who would have then failed. The FDIC couldn't cover the losses, not even 2% of them.

Cycloptichorn

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@hamburgboy,

hbg, It's not only the commercial estate mortgages that are in trouble, but private home ownership is still being lost because of job loss. Bankruptcies are increasing even in our area of California. The banks have failed to recognize these bad paper from their balance sheets, and now tell us they are making profit, and returning to paying huge bonuses. What a laugh!

It's probably good that most are ignorant about our banking system.

1 Reply

@hamburgboy,

The "run on banks" happened at many banks, and they were forced to sell out to bigger banks. I doubt very much maporsche understands much about liquidity or the FDIC.

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@cicerone imposter,

So what are we going to do CI. Your solution is to print more money and just make **** out of thin air.

That's ALL that TARP is. And again, how the US saying "um, I guess we can just make some more money" instilled confidence (of all things) in the solvency of our banks is idiotic.

1 Reply

@maporsche,

maporsche wrote:

Money in bank accounts are FDIC insured. The FDIC would not have failed had TARP not passed.

That is debatable, Map.
The FDIC has or is projected to pay out some $100B in 2009-2010 (The FDIC actually said 2009-2013 but with the vast majority in 2009-2010). As of near the end of 2009, the FDIC had cash on hand of just $10B. That is .22% of the insured deposits covered by the FDIC vs the 1.15% that is congressionally mandated. In other words, the cash on hand should be more like $55B.
We have talked about this before. The FDIC gets its money from a "tax" that the banks pay. There has already been a "one time emergency tax" levy.
The plan now is for the FDIC to raise the $45B by getting banks to prepay their "tax" for 2011, 2012 and 2013 in 2010.
That is sort of like your cash-starved cable tv company asking you to prepay your service today for the next couple of years.
All this does is sweep the problem under the rug.

1 Reply

@realjohnboy,

Right; which is why I amended in a later post, "why didn't we just put all the money we ran through the printer directly into the FDIC system." That's what the system is there for, underfunded of course, but the bullshit we did instead is laughable.

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@maporsche,

Not any more than your misunderstanding about banks, the FDIC, and liquidity.

1 Reply

@cicerone imposter,

cicerone imposter wrote:

I have no patience for people who stick in one-liners that doesn't address the issues being discussed.

1 Reply

@maporsche,

You're also poor in comprehension. Show me where I'm not addressing the "issue?"

1 Reply

@cicerone imposter,

Your post did nothing but call my "ignorance" laughable. Please tell me how that address the topic? It was also literally a one-liner (regardless of screen resolution).

You are getting senile, aren't you CI? My sympathies.

1 Reply

@maporsche,

CI, I apologize about the "senile" comment. I'm a better person than that. I'm done sniping with you. It's pointless and a waste of our precious time.

0 Replies

Where is the US economy headed?

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