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Author Topic: Who will buy the debt if banks collapse  (Read 28123 times)

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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #30 on: March 29, 2015, 09:49:21 am »

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Anther straw man argument is that debt is all gov.  Private debt is as big a problem: "This graph shows the outstanding public debt of the United States of America from 1990 to 2014. In September 2014, the national debt had risen up to 17.8 trillion U.S. dollars."

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Seven years after the bursting of a global credit bubble resulted in the worst financial crisis since the Great Depression, debt continues to grow. In fact, rather than reducing indebtedness, or deleveraging, all major economies today have higher levels of borrowing relative to GDP than they did in 2007. Global debt in these years has grown by $57 trillion, raising the ratio of debt to GDP by 17 percentage points (Exhibit 1). That poses new risks to financial stability and may undermine global economic growth.


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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #31 on: March 29, 2015, 10:00:02 am »

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Geek last time I checked the vote on here what will bring on SHTF, the majority voted for a financial collapse. So trying to convince members on here otherwise is like wanting to open up a piggery in the Middle East!    :-X
Yeah mate I love your langue and descriptions, at least the members on this forum get a bit of a balanced view.  What is interesting is that there are basically only two opinions, both on opposite poles with none to little middle road.
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Gippsland-Prepper

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Re: Who will buy the debt if banks collapse
« Reply #32 on: March 29, 2015, 10:18:30 am »

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Geek last time I checked the vote on here what will bring on SHTF, the majority voted for a financial collapse. So trying to convince members on here otherwise is like wanting to open up a piggery in the Middle East!    :-X
Yeah mate I love your langue and descriptions, at least the members on this forum get a bit of a balanced view.  What is interesting is that there are basically only two opinions, both on opposite poles with none to little middle road.

Geek is a valued and respected member that resides in the US, and if I had to put myself in his shoes and see info on here knocking the financial state of thing in the US, I probably would take a strong stand on things as well! And I respect that, its just like someone from outside Australia telling all of us in Australia, that Australia is not the LUCKY COUNTRY!
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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #33 on: March 29, 2015, 10:25:42 am »

Australia has one of if not the highest private/household debt in the world, and the last financial collapse was called the GFC, because it was global.  National banks in Europe are failing and need to be propped up like the all powerful German main bank fails all the stress tests - the largest bank in Europe, and not to speak of the Greek banks.
Too true it is not all about America.
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Gippsland-Prepper

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Re: Who will buy the debt if banks collapse
« Reply #34 on: March 29, 2015, 10:38:37 am »

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Too true it is not all about America.

It is the point I was trying to make, as I don't want any member to think he/she is singled out, as I dislike everyone the same!  ;D

In Australia financially things are not as bad as other countries, but on paper it is bad enough! But it does not affect me whilst the whole financial fake inflated monster turns over, as my house/property is paid for. But it will effect me just like everyone else when SHTF, hence I prep.
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Geek

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Re: Who will buy the debt if banks collapse
« Reply #35 on: March 29, 2015, 12:14:26 pm »

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You make a lot of straw man arguments.  First in 2008 the stocks were surging like mad and baring a few were all saying the economy was great, were at the crest of all time stock highs, and it was buy buy.

Second - check the list of banks that failed. You are not allowed to view links. Register or Login
The 2008 financial crisis led to the failure of a large number of banks in the United States. The Federal Deposit Insurance Corporation (FDIC) closed 465 failed banks from 2008 to 2012.[1] In contrast, in the five years prior to 2008, only 10 banks failed.[1][2]

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2010 newspaper.  Banks are failing all over the US - it's the equivalent of $2,000 for every man, woman and child in the country in bad debt. See where they are and download the data
Failed banks in the US have become such a regular event that many have stopped noticing them. But the effects live on.
Last week, regulators shut down six banks in Florida, Georgia, Illinois and Kansas - making 138 US failed banks this year alone in the wake of the US sub-prime and housing crisis. So far.

Number of banks in the US have gone from 18,000 to less than 7,000 and most now belong to one or two of the so called to big to fail banks.  Massive consolidation due to failure.


18,000 banks when?  I've been working in the industry for 40 years and there were not 18,000 banks when I started.  The industry has been consolidating over all that time with no disruption, so yea, big banks have been absorbing little banks.  On the other hand in most countries there is nothing like 7,000 banks.  For instance Canada has 5.  The reason the US has so many banks is we prevented them from merging for decades after other countries had already consolidated, so the consolidation has nothing to do with any crisis.  It goes on in both strong and weak economies and will continue until we get down to something reasonable.

If you look at the list you linked to on Wikipedia, the banks on the list are small.  The largest institutions are NOT commercial banks and never were, so I stand by my statement that not one single major US bank failed during the crisis.  BTW: 70% of all US bank deposits are held by 7 commercial banks.  They are the same 7 as they were before the crisis.

As for the stock market in the US, SO WHAT?  The stock market is supposed to go up and down and during our crisis in 2008 it went down and has since come back up to higher levels.  It will go down again and up again.

Now let me address the six banks shut down recently that you bring up.  We have a process here for resolving banks with problems that makes it pretty much a non-event when a small bank fails.  Basically, the regulators come in on Friday at close of business, work over the weekend, and the bank reopens, usually as a set of branches of some larger bank, on Monday.  The typical customer doesn't even notice.  The actions are so insignificant that they don't make headlines here, and trying to make it sound like something significant happened from halfway around the world is just plain silly.

If you want to worry about economic problems, that's your prerogative.  But if you are going to do so, don't just go making stuff up.  There is plenty of economic information available and you can easily find out what is really going on.  All you have to do is read.  You can find real problems without making up fictitious problems.

For that matter you can ask me if you choose to ask a question, instead of making stuff up our quoting crackpots like they were authorities.  Not only am I an American, but I have been working in the financial services industry for the past 40 years.
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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #36 on: March 29, 2015, 12:40:13 pm »

If one looks at the timeline of the GFC it was started with banks in England collapsing and a run on the banks, all the big US banks would of failed if not for gov bailout.  Those same crackpots are the same ones who predicted the 2008 crash; I would rather take my advice from them.

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“It was the year the neo-liberal economic orthodoxy that ran the world for 30 years suffered a heart attack of epic proportions. Not since 1929 has the financial community witnessed 12 months like it. Lehman Brothers went bankrupt. Merrill Lynch, AIG, Freddie Mac, Fannie Mae, HBOS, Royal Bank of Scotland, Bradford & Bingley, Fortis, Hypo and Alliance & Leicester all came within a whisker of doing so and had to be rescued.”
« Last Edit: March 29, 2015, 12:45:02 pm by OzHippy »
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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #37 on: March 29, 2015, 12:41:31 pm »

Since you are volunteering to answer questions.  Is there any truth to the US dep seeking to purchase survival kits for employees?

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The Department of Treasury is seeking to order survival kits for all of its employees who oversee the federal banking system, according to a new solicitation.
The emergency supplies would be for every employee at the Office of the Comptroller of the Currency (OCC), which conducts on-site reviews of banks throughout the country. The survival kit includes everything from water purification tablets to solar blankets.
The government is willing to spend up to $200,000 on the kits, according to the solicitation released on Dec. 4.
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Geek

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Re: Who will buy the debt if banks collapse
« Reply #38 on: March 29, 2015, 12:53:51 pm »

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Since you are volunteering to answer questions.  Is there any truth to the US dep seeking to purchase survival kits for employees?

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The Department of Treasury is seeking to order survival kits for all of its employees who oversee the federal banking system, according to a new solicitation.
The emergency supplies would be for every employee at the Office of the Comptroller of the Currency (OCC), which conducts on-site reviews of banks throughout the country. The survival kit includes everything from water purification tablets to solar blankets.
The government is willing to spend up to $200,000 on the kits, according to the solicitation released on Dec. 4.


Interesting question on a prepper forum.  As a matter of fact, the bank regulators require banks to have extensive disaster recovery capabilities.  There is almost no industry in the US better equipped for disasters in the US than financial services.  Most large banks have these kits at every single desk in their offices.  Granted they are cheap BS kits, costing under $10 apiece, but they have quite an array of useful stuff in them in the event of something like a building fire, or an airplane coming in through the window (something that happened to me on 9/11/01).

Naturally, the contrast between regulators requiring the regulated to have disaster plans and kits, while not doing the same for their own employees looked a bit stupid, sort of a "Do as I say, not as I do." kind of contrast.  The result was the FRB and Treasury Dept. bought kits for their employees as well.

They have caught on with some other large employers here in the US but financial services probably has more of them than anyone else.

If you find yourself working someplace that supplies these kits, they tend to be distributed, then forgotten, so I suggest replacing the bottled water and tossing in some fresh batteries for the flashlight whenever you get a new desk.  Oh yeah, there is no plan for what happens when you move from desk to desk, so someone make have taken one at your new desk, or not.  Check the new desk if you like the idea and if it is missing bring the one from your old desk.  A couple granola bars makes a nice addition.
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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #39 on: March 29, 2015, 02:09:06 pm »

Thanks for clarifying that – where I work there are fire extinguishers under every door, and first aid kits in every office and vehicle – never heard of an industrial survival kit. 

Did a search for it only found for aviation, maritime, and snow, and of course a $24,000 zombie survival kit (LOL the most important of all: You are not allowed to view links. Register or Login ).
Looks like industries are now catching onto the fact things can go wrong.  Australians are encouraged to get bush survival kits – but never heard of them in the workplace, perhaps others can enlighten me.
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Baggyarse

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Re: Who will buy the debt if banks collapse
« Reply #40 on: March 29, 2015, 02:52:40 pm »

Nice try Geek but I'm not buying it, everything I read even in mainstream media seems to point toward something snapping. Nothing seems to have changed since the last collapse. It seems, all that has happened is that more debt was created and more money printed. You're quoting from one source to back your claim the Oz hippy is showing multiple sources. Also you alluded to having first hand involvement in the 11/9/01 tragedy. Do you also believe the single official, commission report as fact?
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Rugglesby

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Re: Who will buy the debt if banks collapse
« Reply #41 on: March 29, 2015, 06:39:16 pm »

Have been watching recent posts on this thread, am intrigued, so I spent quite a it of time today looking through various news and other posts of the past few weeks on global economics, and found no great knowledge or understanding in any of it. People selling something, either newspapers or web site visits. I think most of us would be as accurate in forecasting what will happen. The issues are not the real numbers but peoples perceptions which can change with the breeze. For my money (pun) it is not how unstable the system is, but how long they can pretend it hasn't failed utterly. That is the unknown, could go on for decades if they can keep selling it.
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OzHippy

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Re: Who will buy the debt if banks collapse
« Reply #42 on: March 29, 2015, 08:08:40 pm »

The theory is debt and printing money cant continue for ever. 

In Europe, US and Aus the baby boomers are retiring in great number, like a tsunami - who is going to pay the bill for health and pensions.  Less and less children even China has run out of peasant to support their system, have built too many houses at high cost and cant sell them.  40% of china iron ore goes to houses - now have too many and iron ore price down by more than half.  Just an example of the chaos busy unfolding.  Iron ore is Oz largest export??

Hot off the press.
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Budget 2015: Treasurer Joe Hockey hints the Government will be introducing a bank deposits tax.
Mr Hockey confirmed it will warn that Australians will have to pay ever increasing amounts of tax, unless welfare entitlements are cut.
"If Labor and the Senate keep blocking reductions in government expenditure, then the only way we can live within our means is to massively increase taxes," he said.
"That is not what we want to do, so we are trying to get government expenditure down.
"We want to see a reduction in government expenditure ... and a competitive taxation system that mean that we can compete."
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Geek

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Re: Who will buy the debt if banks collapse
« Reply #43 on: March 29, 2015, 08:50:26 pm »

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Nice try Geek but I'm not buying it, everything I read even in mainstream media seems to point toward something snapping. Nothing seems to have changed since the last collapse. It seems, all that has happened is that more debt was created and more money printed. You're quoting from one source to back your claim the Oz hippy is showing multiple sources. Also you alluded to having first hand involvement in the 11/9/01 tragedy. Do you also believe the single official, commission report as fact?

I am referencing a book, written by a member of the Financial Crisis Inquiry Commission, not the commission itself.  I reference that book as it is a recent publication and it gives what I consider the best explanation to date of what happened.  Unfortunately, what happened was the result of misguided government policies and the government has in turn deflected the blame to banks.  The truly ironic part is that folks who usually distrust government have bought this BS hook, line, and sinker.

As to my involvement, I work as a consultant to various financial firms.  I am not some sort of mover and shaker, but I do work in the industry and get to see firsthand how things work.  At present I am working primarily on helping banks comply with Dodd-Frank reporting requirements.  There is plenty of work in this area now as the regulators are demanding all sorts of information that nobody cared about in the past.  In particular that puts me in a position to see what is being done in the area of how banks measure and report capital to the regulators.  Capital and liquidity are basically the focus of the regulations and reporting put in place since the financial crisis.  All of that is pretty counter-productive if you are trying to get the economy moving again but produces lots of work for guys like me.

Regarding 9/11/01 and that commission, please don't confuse that event and the commission that studied it, with the Financial Crisis Inquiry Commission (FCIC) that studied the financial crisis.  When you ask if I believe the official commission report as fact, it is a bit unclear which report you are referring to, as there were two commissions for the two events.  I think the 9/11 commission report was a decent piece of work at the time it was done, but I am also sure there were many bits of classified information that limited it, and there will be information trickling out for the next 50 years.

The FCIC report was actually pretty shoddy, with lots of information being ignored and other information coming out after the report was published.  The book I referenced makes frequent reference both to facts the FCIC chose to ignore, and facts that have come to be known since it finished in 2010.
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Baggyarse

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Re: Who will buy the debt if banks collapse
« Reply #44 on: March 29, 2015, 09:07:47 pm »

I did mean the alleged terrorist attack on the twin towers, I don't buy that report too many inconsistencies for my mind.
 I don't pretend to know all the complexities of how the financial sector is but what I see is more reports and warnings of something catastrophic happening rather than reports on a long stable financial future. My own common sense and observation of history also tells me to be wary of any reports, commissions etc published telling me to not worry its all ok when my gut tells me from observations all around that something is fundamentally wrong.
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