US's economy has fully recovered?

[joepistole]

Correct me if I'm wrong, but I think the FDIC pays to the depositors, not to the bank and if the bank had failed, it would be the stockholders of the bank who ate the losses not the tax payers, but of course that did not happen as Moral Hazzad was strengthened. I. e. It became more clear that that banks were protected from loses or in other words, profits were private property and losses were for the tax payers.

Yes the FDIC insures depositors but only up to a limit and at that time the limit was 100k dollars. And bank stockholders did eat the losses. The US government, the bailouts, didn’t takeaway bank losses. What the bailout did was provide money to the banks and other financial institutions in the form of loans or equity so they could keep the lights on and pay their bills. Bank stockholders took huge losses. So this notion that bank stockholders were bailed out and made whole plus by the banking bailout is just fiction. The banks and their shareholders took their losses in the pants.

BTW, financially "little people" don't have $100,000 in the bank and I think, but not sure, FDIC now protects up to $250,000 and that is certainly not the deposit of any "little person."

Yeah little people do have 100k in the bank. I’ll give you a case in point. My aunt had about a 300k in money bank during the crisis. It was the money she had. She was 82 years old. If you think that is big time or wealthy, you try living on 300k dollars when you are spending ten percent of that on basic living expenses ever years.

And yes the insurance has been increased to 250k, but at the time of the crisis, which is the topic here, the FDIC insurance amount was 100k dollars.

 

[Billy T]

Yes the FDIC insures depositors but only up to a limit and at that time the limit was 100k dollars. ... My aunt had about a 300k in money bank during the crisis. It was the money she had. She was 82 years old. If you think that is big time or wealthy, ...

No, $300,000 is not "big time wealthy" but very atypical bank deposit for a financially "little person." Also each differently registered (titled account), even in the same bank had the full $100,000 insurance. In case or your 82 year old aunt, the retirement rule would apply - she had $250,000 insured by FDIC or even a million dollars with four differently registed (or four different banks) insured. The was no reason, no necessity, as you assert to bail out the banks to protect the "little people" - that is pure fiction:

These deposits are insured by the FDIC for up to $100,000 per depositor per insured bank and up to $250,000 for retirement accounts.

Note this report is just after Lehman Brothers failed and published by the American Association of Banks and issued on 19 Sept 2008.

Banks were bailed out to give immediate help to the economy with increased government debt not to protect the Little Person from losses. The FDIC did that. Many, me included, think that avoiding the normal business cycle pain, and starting to build the current huge, still growing, and unpayable debt will hurt the Little Person, who lacks the ability to protect himself from the ravages of inflation that ALWAYS IN HISTORY, FOLLOWS GOVERNMENTS GOING BEYOND THEIR GDP.

This inflation has not started yet as the three trillion of so the Fed has printed is not circulating. After Fed's accounts in its 12 "member banks" are credited with thin air money, they rarely let it out to circulate in the economy, but buy safe Treasury bonds with it. I.e. it is great "circle jerk" with guaranteed profits to the banks due to Treasury bond interest being higher than the charge, if any, the Fed makes on the banks. That is why the banks are the only large US business without sales to rich Asians that are doing very well.

About a year ago, in argument with you, I predicted interest rates would soon be rising. The ten year bond interest was then about 1.6% and now is near (or at ~3% - I have not looked recently).
As interest rates double, two things happen: (1) The Fed loses its control to hide the economic problems - pump up the stock market - make wealth effect etc. and (2) the cost of carrying the current debt doubles as bonds mature. About the only buyer of 10 year or longer maturities is the Fed (and some insurance companies, who don't care how worthless the dollar becomes as they obligation the surviving widow is to pay a fixed amount of dollars. If her $100,000 policy will only pay one month's rent - That's no skin off the insurance company.) I.e. the new debt the Treasury issues, both to pay off maturing old debt to finance the difference between government expenses and revenue, is now near twice as costly to finance as it was a couple of years ago.

SUMMARY: The bank bail out delayed and made much worse the hurt the Little Person will surfer.

 

[Michael]

Reality bites again Michael. Yeah, the Federal Reserve purchases debt on the free market and in competition with other bidders. That is called a free market.

Are you on drugs Joe? What are you on? Oxycontin? You're doing lines of Oxycontin aren't you?

The fact that the CENTRAL BANK, The Federal Reserve, is allowed to purchase ANYTHING means the CENTRAL BANK of the United States of America is moving the market - this means the market is NOT A FREE MARKET.

What's so hard for you get here? You clearly have no idea what the words "free market" mean.

 

[Michael]

Ah, no Michael. As previously pointed out this is you going off the deep end again with reductio ad absurdum.

From WIKI:
Reductio ad absurdum (Latin: "reduction to absurdity"), also known as argumentum ad absurdum (Latin: argument to absurdity), is a common form of argument which seeks to demonstrate that a statement is true by showing that a false, untenable, or absurd result follows from its denial,[1] or in turn to demonstrate that a statement is false by showing that a false, untenable, or absurd result follows from its acceptance.

Thus, we can logically show your position is absurd.

 

[joepistole]

No, $300,000 is not "big time wealthy" but very atypical bank deposit for a financially "little person." Also each differently registered (titled account), even in the same bank had the full $100,000 insurance. In case or your 82 year old aunt, the retirement rule would apply - she had $250,000 insured by FDIC or even a million dollars with four differently registed (or four different banks) insured. The was no reason, no necessity, as you assert to bail out the banks to protect the "little people" - that is pure fiction:
Note this report is just after Lehman Brothers failed and published by the American Association of Banks and issued on 19 Sept 2008.

Banks were bailed out to give immediate help to the economy with increased government debt not to protect the Little Person from losses. The FDIC did that. Many, me included, think that avoiding the normal business cycle pain, and starting to build the current huge, still growing, and unpayable debt will hurt the Little Person, who lacks the ability to protect himself from the ravages of inflation that ALWAYS IN HISTORY, FOLLOWS GOVERNMENTS GOING BEYOND THEIR GDP.

This inflation has not started yet as the three trillion of so the Fed has printed is not circulating. After Fed's accounts in its 12 "member banks" are credited with thin air money, they rarely let it out to circulate in the economy, but buy safe Treasury bonds with it. I.e. it is great "circle jerk" with guaranteed profits to the banks due to Treasury bond interest being higher than the charge, if any, the Fed makes on the banks. That is why the banks are the only large US business without sales to rich Asians that are doing very well.

About a year ago, in argument with you, I predicted interest rates would soon be rising. The ten year bond interest was then about 1.6% and now is near (or at ~3% - I have not looked recently).
As interest rates double, two things happen: (1) The Fed loses its control to hide the economic problems - pump up the stock market - make wealth effect etc. and (2) the cost of carrying the current debt doubles as bonds mature. About the only buyer of 10 year or longer maturities is the Fed (and some insurance companies, who don't care how worthless the dollar becomes as they obligation the surviving widow is to pay a fixed amount of dollars. If her $100,000 policy will only pay one month's rent - That's no skin off the insurance company.) I.e. the new debt the Treasury issues, both to pay off maturing old debt to finance the difference between government expenses and revenue, is now near twice as costly to finance as it was a couple of years ago.

SUMMARY: The bank bail out delayed and made much worse the hurt the Little Person will surfer.

Oh hogwash Billy T. That is an unmitigated load of crap. You and Michael never let little things like reality and rational thought get in the way of your ideology. And there is no FDIC “retirement rule”. Do you think AT&T could meet its payroll and other obligations with just a few million dollars? Without the bailout banks would not have been able to pay their bills or their depositors. Millions of people would have lost their savings and their jobs. And government spending would have soared as more people would have been on unemployment and food stamps and would have gone from tax payer to tax taker overnight. The financial impact on federal spending would have been catastrophic and prolonged were it not for the bailout. You complain about 7.3% unemployment, you would have loved the 25% unemployment and you don’t have to look far to see proof of it. It happened in Europe. They did it your way and they have 25% unemployment and have had it for years since The Great Recession.

Additionally you keep ignoring the fact that the “bailout” was a loan. It wasn’t a giveaway as you and Michael like to portray it. And 5 years ago I predicted interest rates would rise. I mean, that really wasn’t a hard call. When the economy recovers, rising interest rates are to be expected as the demand for debt increases. That is normal and it is a good thing. It means things are getting better.

Three, you have been predicting an economic Armageddon for 8 years now. You delayed your predicted date once because Obama was unexpected elected POTUS. And now your most recent prediction of doom is for October of next year. I look forward to seeing how you explain away your error next year when October 2014 comes and goes with no run on the dollar or maybe you will just deny you ever made the prediction.

You have been predicting runaway inflation now for years and it has yet to happen. And it has been explained to umpteen times, just as it has been explained to Michael, that if inflation should become a concern the Fed has tools in its toolbox to reduce inflation. The Fed used those tools in the 80’s when we really did have double digit inflation as a result of the oil supply shocks of the 70’s. And the Fed’s inflation fighting tools worked and they worked well.

I know you and Michael don’t like the real evidence so you have to use made up numbers like those from Shadow Stats and believe in secret conspiracies. But just maybe there are no secret cabals who distort economic information and just maybe economists and professional financiers really do know something about economics, business and finance. If your notions were well founded you wouldn’t need to rely on secret cabals and made up data to support them (e.g. Shadow Stats). Instead you could use real data from real and credible sources.

http://articles.washingtonpost.com/2011-03-27/opinions/35208488_1_tarp-bank-bailout-bank-rescue

It isn’t often that the government launches a major program that achieves its main goals at a tiny fraction of its estimated costs. That’s the story of TARP — the Troubled Assets Relief Program. Created in October 2008 at the height of the financial crisis, it helped stabilize the economy, using only $410 billion of its authorized $700 billion. And most of that will be repaid. The Congressional Budget Office, which once projected TARP’s ultimate cost at $356 billion, now says $19 billion. This could go lower. - Washington Post

http://www.businessinsider.com/us-bailout-success-2012-9

“Bailouts worked.” – Business Insider

As for the US debt, we have had higher in the past. It isn’t like we have not been there and done this before. Our public debt is manageable. The real challenge and the real question are we governable? Can our elected officials develop and maintain a cogent fiscal policy. The fiscal policies you and Michael are advocating are not cogent. For the last 30 plus years we have giving away our Medicare and Social Security tax surpluses to the wealthiest among us through tremendous reductions in their tax rates. Do we have the political guts to be able to raise those rates and return them to historical norms? Are we serious about containing our healthcare costs? Why is it we provide less healthcare coverage and get worse outcomes but pay more than twice the cost than other wealthy nations? Those are the real questions and therein lies the solution to our debt issues.

 

[joepistole]

Are you on drugs Joe? What are you on? Oxycontin? You're doing lines of Oxycontin aren't you?

The fact that the CENTRAL BANK, The Federal Reserve, is allowed to purchase ANYTHING means the CENTRAL BANK of the United States of America is moving the market - this means the market is NOT A FREE MARKET.

What's so hard for you get here? You clearly have no idea what the words "free market" mean.

So let’s leave the Fed out of it for a moment. So using your logic if a big bank or insurance company made huge purchases in the debt market and in the process “moved the market”, how is that different from the Fed? This happens all the time in the stock market. A big buyer comes in and moves the price of an individual stock or group of stocks, according to you that makes the stock market not a free market. Just because there is a big buyer in the market moving prices, it doesn't follow that the market is not free. It is that old Law of Supply and Demand thingy in action. Michael the bottom line here is you don’t have a clue about economics, business or finance. But you don’t let that or little things like facts, evidence and reason get in the way of your proselytizing your libertarian religious beliefs.

 

[joepistole]

From WIKI:
Reductio ad absurdum (Latin: "reduction to absurdity"), also known as argumentum ad absurdum (Latin: argument to absurdity), is a common form of argument which seeks to demonstrate that a statement is true by showing that a false, untenable, or absurd result follows from its denial,[1] or in turn to demonstrate that a statement is false by showing that a false, untenable, or absurd result follows from its acceptance.

Thus, we can logically show your position is absurd.

No, we can logically deduce you are clueless.

 

[Billy T]

Oh hogwash Billy T. That is an unmitigated load of crap. You and Michael never let little things like reality and rational thought get in the way of your ideology. And there is no FDIC “retirement rule”.

Until you give some reference / documentation that, your misinformed opinion, is "hogwash." In post 262, I gave link / reference to USnews quoting the American Association of Banks report stating the there were retirement accounts covered by FDIC up to $250,000. The USnews article was published 19 September 2008 and contains link to the American Association of Banks report which is obviously earlier, just after Lehman crash. Ball in your court - apology, with admission of your post being hogwash, or give a reference supporting your hogwash.

Do you think AT&T could meet its payroll and other obligations with just a few million dollars?

No, but they don't keep required funds in a bank. They buy short term (only a few days if need be) paper with better interest rates. Banks would not even accept millions of dollars that would cost them thousand in interest payments and be impossible to invest in their traditional investments, often 30 year loans. In principle they could invest those million in same short term paper that AT&T does but could not pay AT&T more than the granter would for a few day's use of the money. Your idea that Banks would accept millions of dollar for a week or so, just reflect your poor understanding of the banking system.

Banks do take in several hundred potentially short term funds from small depositors and make long term loans with it. For example, 300 depositors may have average of $100 in saving accounts that are "demand deposits" to provide the bank with the funds it uses to make a home loan of $30,000 on a $100,000 home. They operate like insurance companies do on the statistical expectation that few owner of these $100 deposits will ask for their money back in the same week and / or that there will be approximately the same number of new $100 depositors. There is no statistical averaging available for AT&T's millions - it is all going to come out when the payroll is to be paid.

If you read the "fine print" of your contract with the bank, you will learn that the saving account is not exactly a "demand deposit." If their statistical expectations should strangely prove to be wrong, they have several months they can delay paying your "demand deposit." Banks would never accept millions of dollars from an single depositor like AT&T especially as they know it would soon come out on next pay day. Obviously AT&T would not make large deposit into the bank needed for next payroll, even if the bank would accept it, as they know the banks would need to exercise that fine print and delay giving back the money AT&T needs immediately for the payroll.

(1) Without the bailout banks would not have been able to pay their bills or their depositors. (2)Millions of people would have lost their savings and their jobs. (3) And government spending would have soared as more people would have been on unemployment and food stamps and would have gone from tax payer to tax taker overnight. (4)The financial impact on federal spending would have been catastrophic and prolonged were it not for the bailout.

(1) True. Banks would not pay, but the FDIC would.*
(2) False -fabrication with no support as the depositors get their money.
(3) False -fabrication with no support as the depositors get their money.
(4) False -fabrication with no support as the depositors get their money.

* The FDIC takes all the banks assets, their building even, and sells them. Normally recovering more than 90% of what they paid the depositors. Occasionally more than 100% and the excess is, I think, given to the bank's stock holders.

You complain about 7.3% unemployment, you would have loved the 25% unemployment and you don’t have to look far to see proof of it. It happened in Europe. They did it your way and they have 25% unemployment and have had it for years since The Great Recession.

The EU has followed the more traditional austerity approach, not the creative QE approach of Ben Bernnake. He is an expert on the great depression and knows that the "tight money" approach of Hover, leads to great increase in unemployment. EU seems to need to learn this them selves. As ben said, "I will not repeat the mistakes of the 1930s, I'll make my own mistakes." - He sure has, IMHO. - I.e. he is destroying the dollar, ending it reign as world's reserve currency, leading to an even worse depression.

Additionally you keep ignoring the fact that the “bailout” was a loan.

Yes but the Fed arranged to give the banks risk free profit with which to pay it. I.e. thin air money deposited into the Feds accounts in the banks that the banks could use like any other deposits to lend out at interest up to ten times more than the deposits; but most of the time, the banks did not do that, which would have helped the economy, including the "little people." Instead they sent the money back to the Treasury, as there was no risk it would not be repaid. I. e the banks bought Treasury bonds. I have several times, some what vulgarly noted this is a great circle jerk, designed to give zero risk profits to the banks. Treasury and or Fed makes thin air money, give to the banks, which turn around and give it back to the Fed or more commonly the Treasury, raking off their cut in profits.

In addition to "paying" off the loans with the great circle jerk the government rewarded the banks for their grossly irresponsible behavior. I.e. as the banks knew no matter how poor a credit risk the borrower was, they encouraged him to take a big loan to buy a house he could not afford Because they would quickly sell the mortgage (often correctly called "toxic trash") to Freddy or Fanny Mae. I.e. it was to the banks economic advantage to find a drunken bum sleeping on the street, pour enough coffee in him until he was sober enough to sign his name to the toxic trash mortgage. No money down was required, no references checked on these "liar loans." The bum's mortgage was sliced and diced into several hundred pieces and repackaged as a "Mortgage Back Security, MBS, and with the rating agencies AAA rating sold to innocent investors who when they realized the trash they had usually found some to get it to Fanny & Freddy too. The Fed is now making Fanny & Freddy whole by buy this toxic trash each month with part of its monthly 85 Billion of thin-air money.

Thus the Fed's balance sheet shows assets or credits of more than three trillion dollars, but as you know, for every credit created there is a corresponding debit. I.e. in the end the tax payers, perhaps of future generations, hold a three trillion dollar debt. It will most likely be paid by great devaluation of the dollar - people with saving will take losses. (That is called "monetizing the debt" to hide the fact that it is stealing from savers, mainly lots of "little people" as the rich are as least buying TIPs or real assets like shares of companies.)

If the FDIC had paid off the deposits in failed banks, taken all their assets and sold them the net cost to the FDIC (read that "tax payers") would have been less than three million dollar. Instead of this, what happed was system was set up to make huge completely risk free profits for the banks, create ~three trillion dollars of assets on the Fed's book and a corresponding three trillion dollar of debt for the tax payers. Yes the loans to banks immediately after Lehman failed were repaid, but the tax payers are 1000 times worse off than it the banks had failed and FDIC had paid off the depositors.

(1)you have been predicting an economic Armageddon for 8 years now. (1)You delayed your predicted date once because Obama was unexpected elected POTUS.

Yes, but initially I was vague on when, and only implied it would be sometime between 2015 and 2017 then "The Barron Max" called me out so I made the definite date "on or before Halloween 2014" about 7 years ago and HAVE NEVER CHANGED IT. You have claimed several times that I have, I have asked you several times to cite the post where I made a change, but you have not so now I call you a liar for three times repeating what you know is false.

I did make a comment ABOUT OBAMA, slightly before he announced he would run for a second term. I said that I though he would find some excuse NOT to run as I though him too smart to go down in history blamed for GWB's depression. I even guessed what he would say. Something like he had served his country in public service, turning down the huge financial offers he got as editor of the Harvard Law Review, but now that his oldest daughter was soon to leave home, he needed to become more of a family man, give more time to them instead, that there were many well qualified Democrats that could be the parties candidate.

I have said also several that if I mis predicted the date of the run on the dollar by 10% I would say I made a mistake, was wrong on the date. Seven years is 84 months so allowing my self only a seven month margin of error is less than 10% error on the date but the date I fixed at Halloween 2014, IS AS IT HAS BEEN FOR AT LEAST SEVEN YEARS. Again I ask you to please show that is NOT the case by giving post where I moved the date more distantly into the future OR STOP LYING !

 

[Billy T]

US economy has not recovered- its getting worse. There are now more people on food stamps than the entire population of Spain, but cost is slightly going down. To just keep up with the growing labor force/ work age population increase/ 2.2 million jobs must be created each month. Unemployment number goes down as more cease looking for work or retire than find it.

Note also that if you only work one hour per week - Say as a maid cleaning out a church Sunday afternoon for $10, you are one of the millions of "underemployed," but NOT unemployed. Also note that in the first half of 2013, 77% of the new jobs created were part-time jobs.
Purchasing power of salaries is still going down. Clearly the US economy is getting worse for most, except the wealthy who are share owners of companies with sales to rich Asians, etc.

Blue bars are food stamp households; Yellow curve, $, is monthly benefit each gets.*

Graphs and others at: http://www.financialjuice.com/news/...-In-Poverty-Than-The-Population-Of-Spain.aspx

* As the poor typically have more children (part of why they are poor) cost of their food stamp benefit is ~ $2/ per person, per day - Think you could properly nourish kids on that?

 

[billvon]

No US economy has not recovered.

Sorry Billy (and Futilist) -

======================
U.S. manufacturing index hits two-year high
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — U.S. manufacturers expanded in August at the fastest pace in more than two years, a survey showed Tuesday, adding to growing evidence that the global economy may be starting to pick up.

The Institute for Supply Management’s index edged up to 55.7% from 55.4% in July, marking the highest reading since June 2011. Economists polled by MarketWatch had expected the index to drop to 54.1%.

Any number above 50% signals expansion, so the latest reading suggests manufacturers are growing at a more rapid clip compared to earlier in the year. A similar index released Tuesday known as Markit PMI also showed that manufacturers were growing at a solid pace in August.
================================

 

[Billy T]

Sorry Billy (and Futilist) -

======================
U.S. manufacturing index hits two-year high
By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — U.S. manufacturers expanded in August at the fastest pace in more than two years, a survey showed Tuesday, adding to growing evidence that the global economy may be starting to pick up.

The Institute for Supply Management’s index edged up to 55.7% from 55.4% in July, marking the highest reading since June 2011. Economists polled by MarketWatch had expected the index to drop to 54.1%.

Any number above 50% signals expansion, so the latest reading suggests manufacturers are growing at a more rapid clip compared to earlier in the year. A similar index released Tuesday known as Markit PMI also showed that manufacturers were growing at a solid pace in August.
================================

All true but not related to what I just said in post 269, I.e.:

"...US economy has not recovered- its getting worse. There are now more people on food stamps than the entire population of Spain, but cost is slightly going down. To just keep up with the growing labor force/ work age population increase/ 2.2 million jobs must be created each month. Unemployment number goes down as more cease looking for work or retire than find it.

Note also that if you only work one hour per week - Say as a maid cleaning out a church Sunday afternoon for $10, you are one of the millions of "underemployed," but NOT unemployed. Also note that in the first half of 2013, 77% of the new jobs created were part-time jobs.
Purchasing power of salaries is still going down. Clearly the US economy is getting worse for most, except the wealthy who are share owners of companies with sales to rich Asians, etc. ..."

Yes the rich and corporations are doing well; however, Joe American is worried that now that China has bought Smithfield meats, world's largest producer of pork products, he may no longer be even able to give his kids "franks and beans."

BTW, do you know when was the last time the wounded US economy made 2.2 million new jobs and what fraction of them were full time, good pay jobs, not like the 77% of new part time jobs and mostly low pay jobs US made in the first half of 2013?

 

[joepistole]

Until you give some reference / documentation that, your misinformed opinion, is "hogwash." In post 262, I gave link / reference to USnew quoting the American Association of Banks report stating the there were retirement accounts covered by FDIC up to $250,000. The USnews article was published 19 September 2008 and contains link to the American Association of Banks report which is obviously earlier, just after Lehman crash.

This is what you wrote:

No, $300,000 is not "big time wealthy" but very atypical bank deposit for a financially "little person." Also each differently registered (titled account), even in the same bank had the full $100,000 insurance. In case or your 82 year old aunt, the retirement rule would apply - she had $250,000 insured by FDIC or even a million dollars with four differently registed (or four different banks) insured.

And this is what your reference said:

“Commercial banks and thrift institutions take deposits for checking and savings accounts from consumers and businesses. These deposits are insured by the FDIC for up to $100,000 per depositor per insured bank and up to $250,000 for retirement accounts. These banks lend this money to consumers and companies for autos, homes, business equipment, etc.”

Her money was not in a retirement account. We were not talking about retirement accounts. And there is no mention of a “retirement rule” in your reference because none exists. The “retirement rule” you mentioned was and is fiction. So as I originally stated my aunt would have lost 2/3rds of her savings. And the government would have had to cough up billions and perhaps trillions of dollars it didn’t have to pay fulfill FDIC insurance obligations.

Ball in your court - apology, with admission of your post being hogwash, or give a reference supporting your hogwash.

Ball is in your court and I think you owe an apology.

No, but they don't keep required funds in a bank.
They buy short term (only a few days if need be) paper with better interest rates. Banks would not even accept millions of dollars that would cost them thousand in interest payments and be impossible to invest in their traditional investments, often 30 year loans. In principle they could invest those million in same short term paper that AT&T does but could not pay AT&T more than the granter would for a few day's use of the money. Your idea that Banks would accept millions of dollar for a week or so, just reflect your poor understanding of the banking system.

Unfortunately for you Billy T. they do keep their money in the bank. And banks do routinely accept millions of dollars in deposits. Every day hundreds of billions of dollars flow through the banking system. And every day hundreds of billions of dollars are deposited in American banks. Those checks Americans write every month to cover their basic living expenses are not deposited in a black hole. They are deposited in banks. Every year more than 16 trillion dollars are deposited in American banks. You have been reading too much extremist secret cabal specious nonsense.

And businesses don’t pay their bills with short term paper. They don’t pay their payroll with short term paper. They, like everyone else, pay their bills with cash. I have spent my career working for Fortune 500 companies and I have very dear friends who are corporate treasurers, controllers and vice presidents. And early on in my career I used to examine bank financials and extend credit to them. So unfortunately for you, I am very familiar with the banking systems and corporate finance and treasury operations. And I can say unequivocally, you don’t have a clue about banking, finance, business or economics. You and Michael are like the guys who have taken a two week correspondence course on brain surgery and now feel qualified to do heart surgery. I take it you don’t read balance sheets because if you did you would see something called cash and cash equivalents. And they don’t call them cash equivalents for no reason and you would know that what you have written is indeed hogwash.

Banks do take in several hundred potentially short term funds from small depositors and make long term loans with it. For example, 300 depositors may have average of $100 in saving accounts that are "demand deposits" to provide the bank with the funds it uses to make a home loan of $30,000 on a $100,000 home. They operate like insurance companies do on the statistical expectation that few owner of these $100 deposits will ask for their money back in the same week and / or that their will be approximately the same number of new $100 depositors. There is no statistical averaging available for AT&T's millions - it is all going to come out when the payroll is to be paid.

If you read the "fine print" of your contract with the bank, you will learn that the saving account is not exactly a "demand deposit. If their statistical expectations should strangely prove to be wrong, they have several months they can delay paying your "demand deposit."

Aside from containing some incomplete and incorrect data, this is not germane. You have a tendency to ramble on with non-relevant issues.

(1) True. Banks would not pay, but the FDIC would.*

And since the FDIC couldn’t pay the money would have come out of US Treasury general fund and contributed to the deficit and debt.

(2) False -fabrication with no support as the depositors get their money.

Wrong again. Ignoring the fact that FDIC insurance is limited to 100k dollars will not make it go away. Folks and businesses with over 100k in deposits would have lost their money. And people expecting paychecks from their employers when those paychecks didn’t show up.

(3) False -fabrication with no support as the depositors get their money.

This is either extreme ignorance or delusion. Government spending did soar as millions of people lost their jobs and moved from taxpayer to tax taker…going on to federal support programs like food stamps and taking unemployment insurance. That is why the deficit soared during the Great Recession. And it would have been much worse were it not for the bank bailouts as banks would have gone under and depositors like my aunt and many small and large businesses would have gone under.

(4) False -fabrication with no support as the depositors get their money.

Denial of reality will not make it any less real. Those 8 million people who lost their jobs during The Great Recession would still be on unemployment or welfare, drawing food stamps, housing assistance, health benefits, and not paying taxes as people would not be spending money. Your persistent denial is not based on evidence. It is not based on fact.

* The FDIC takes all the banks assets, their building even, and sells them. Normally recovering more than 90% of what they paid the depositors. Occasionally ore than 100% and the excess is I think, given to the banks' stock holder.

And who would buy those banks? And does the FDIC which is normally accustomed and staffed to handle just a few bank defaults every year be able to handle the enormous workload? And what happens to all of those depositors? They cannot pay their bills with promises. Closing your eyes and covering your ears and chanting may help you sustain your ideology in your mind but it won’t work in the real world with real people.

The EU has followed the more traditional austerity approach ot the creastive QE approach of Ben Bernnake. He is an expert on the grate depression and knows that the "tight money" approach of Hover, leads to great increase in unemployment. EU seems to need to learn this them selves. As ben said, "I will not repeat the mistakes of the 1930s, I'll make my own mistakes." - He sure has IMHO. - I.e. he is destroying the dollar, ending it reign as world's reserve currency. leading to an even worse depression.

Except that you have no proof or the dollar is being destroyed. And you have been playing that tune for 8 plus years now. Europe did it your way initially, it didn’t work. It cost governments of the EU far more than need be and it resulted in double digit unemployment. Unemployment in some EU countries reached and remained at 25%. The EU didn’t recapitalize their banking system as we did in the US. So the Great Recession has been more severe and more prolonged in the EU.

Yes but the Fed arranged to give the banks risk free profit with which to pay it. I.e. thin air money deposited into the Feds accounts in the banks that the banks could use like any other deposits to lend out at interest up to ten times more than the deposits; but most of the time, the banks did not do that, which would have helped the economy, including the "little people." Instead they sent the money back to the Treasury, as there was no risk it would not be repaid. I. e the banks bought Treasury bonds. I have several times, some what vulgarly noted this is a great circle jerk, designed to give zero risk profits to the banks. Treasury and or Fed makes thin air money, give to the banks, which turn around and give it back to the Fed or more commonly the Treasury, raking off the cut in profits.

In addition to "paying" off the loans with the great circle jerk the government rewarded the banks for the grossly irresponsible behavior. I.e. as the banks knew no matter how poor a credit risk the borrower was, they encouraged him to take a big loan to buy a house he could not afford Because they would quickly sell the mortgage (often correctly called "toxic trash") to Freddy or Fanny Mae. I.e. it was to the banks economic advantage to find a drunken bum sleeping on the street, pour enough coffee in him until he was sober enough to sign his name to the toxic trash mortgage. No money down was required, no references checked on these "liar loans." The bum's mortgage was sliced and diced into several hundred pieces and repackaged as a "Mortgage Back Security, MBS, and with the rating agencies AAA rating sold to innocent investors who when they realized the trash the had usually found some to get it to Fanny & Freddy too. The Fed is now making Fanny & Freddy whole by buy this toxic trash each month with it 85 Billion of thin-air money.

So you think Dodd-Frank is a reward for the banking industry? That is funny; banks don’t think they were rewarded. They got increased regulatory scrutiny, a boatload of new regulations and constraints out of this and have been fighting Dodd-Frank tooth and nail for years now.

And I don’t know where you get this notion of the banks getting risk free funding from Uncle Sam. The government money provided to the banks came with a number of conditions and it had to be repaid with interest. The government has made money on TARP. As previously pointed out to you last year alone, the Fed returned 100 billion in profits to the US Treasury in part because of the loans it made to banks during the Great Recession.

Thus the Fed's balance sheet shows assets or credits of more than three trillion dollars, but as you know, for every credit created there is a corresponding debit. I.e. in the end the tax payers, perhaps of future generations, hold a three trillion dollar debt. It will most likely be paid by great devaluation of the dollar - people with saving will take losses. (That is called "monetizing the debt" to hide the fact that it is stealing from savers, mainly lots of "little people" as the rich are as least buying TIPs or real assets like shares of companies.)

Yes the Federal Reserve has trillions of assets sitting on its balance sheet. As I have repeatedly told you over the years, those are assets the Fed can sell at any time. Those trillions in assets are not blue sky investments. They generate income and profits for the Federal Reserve. And those profits are returned to the US Treasury.

The Fed has two mandates with equal priority, maintain price stability (i.e. low inflation) and achieve full employment (currently estimated to be about 5% unemployment). And the Fed has done a yeoman’s job in balancing those mandates over the course of the last few years. Unlike you and Michael, the Fed uses real economic data combined with decades of education and experience to make monetary policy and does not rely on or use specious data and conspiratorial machinations.

If the FDIC had paid off the deposits in failed banks, taken all their assets and sold them the net cost to the FDIC (read that "tax payers") would have been less than three million dollar. Instead of this, what happed was system was set up to make huge completely risk free profits for the banks, create ~three trillion dollars of assets on the Fed's book and a corresponding three trillion dollar of debt for the tax payers. Yes the loans to banks immediately after Lehman failed were repaid, but the tax payers are 1000 times worse off than it the banks had failed and FDIC had paid off the depositors.

LOL, I am sorry Billy T, but that is a boatload of crap. Where did you get that number? AIG alone would have cost US taxpayers 85 billion dollars.

http://www.economist.com/node/12342689

http://en.wikipedia.org/wiki/Bankruptcy_of_Lehman_Brothers

And at a time when the FDIC was looking at insolvency you want to let more banks go bankrupt. The FDIC didn’t’ have the money. Your solution is not only counterfactual, it just doesn’t make sense. It is better to loan the money and get it back with interest (i.e. TARP) rather than to actually lose it and never get it back. You don’t have to be a brain surgeon to figure that one out.

Yes, but initially I was vague on when, and only implied it would be sometime between 2015 and 2017 then "The Barron Max" called me out so I made the definite date "on or before Halloween 2014" about 7 years ago and HAVE NEVER CHANGED IT. You have claimed several times that I have, I have asked you several times to cite the post where I made a change, but you have not so now I call you a liar for three times repeating what you know is false.

I did make a comment ABOUT OBAMA, slightly before he announced he would run for a second term. I said that I though he would find some excuse NOT to run as I though him too smart to go down in history blamed for GWB's depression. I even guessed what he would say. Something like he had served his country in public service, turning down the huge financial offers he got as editor of the Harvard Law Review, but not that his oldest daughter was soon to leave home, he needed to become more of a family man, give more time to them instead, that there were many well qualified Democrats that could be the parties candidate.

I have said also several that if I mis predicted the date of the run on the dollar by 10% I would say I made a mistake, was wrong on the date. Seven years is 84 months so allowing my self only a seven month margin of error is less than 10% error on the date but the date I fixed at Halloween 2014 AS IT HAS BEEN FOR AT LEAST SEVEN YEARS. Please show that is NOT the case by giving post where I moved the date more distantly into the future OR STOP LYING !

I didn’t lie. And no matter how big you make the fonts that fact will not change. You did make the prediction of an imminent collapse of the dollar shortly after I became a member her at Sciforms and you stated you had moved back the date of imminent demise because President Obama was elected and you had not accounted for his election.

Sciforms new search engine isn’t what it used to be. I can’t find posts or threads I started one month ago much less 7 years ago, so just because I cannot find the posts, it doesn’t follow that they didn’t happen.

The bottom line is the bank bailouts did bailout the little guy. It allowed him to keep his job, to keep his savings, and to keep his retirement accounts and it minimized adverse impacts on the government deficits and debt. Those are the unpleasant facts for you and Michael.

 

[Michael]

I'm just about ready to catch a flight, I'll have to come back to this thread at another time.

I will say this much, I agree with Joe on one thing. This IS the recovery. We are in the New Economy. I actually don't expect there to be hyperinflation and destruction of the dollar. I suspect we will enter a Japan-like New Economy (which we are in) where most of the good jobs will be working for the military industrial complex (in one capacity or another) or working in the medical industry (in one capacity or another). As I said, I hope you like the "Recovery", because this is it.

For the Joe's of the world, life is good. I seem to recall you were talking about buying some slum-housing in Detroit? Must be nice huh Joe? I mean, the poor are so destroyed and barely literate you'd be doing them a favor buying up their houses, fixing them up, and renting them back to them (or flipping them back to them). Even better if "the Government" steps in and backstops their loans or pays their rent. Isn't that right?

Slum-LORDing, how Progressive.


You used Europe as your example, why not Japan? Japan is on QE8 and is in dent 200% GDP. The difference is, when you walk into a McDonald's restaurant, the one's in the 'Bad' neighbourhoods next to the Housing Projects, you could probably eat off the toilet seats. They're THAT clean. We are not Japanese. Our inner-city neighbourhoods are shitholes even the police don't dare enter. This doesn't happen in Japan.


I'd also like to note, Larry Summer's is on record saying Quantitative Easing doesn't work. Which is interesting, given "Economics" is a "Science" and all. Ha! It's a Religion. Value, like God, only exists in your head Joe. So, it'll be interesting to watch as your pray at the feet of The Fed with it's new High Priest telling your the exact opposite of what the last High Priest told you. And you won't skip a beat, you'll be singing in tune as soon as they send up the White Smoke (up your arse) and Pope Benedict Summers takes the Throne.

Reminds me of that scene in Big Brother.

 

[billvon]

Note also that if you only work one hour per week - Say as a maid cleaning out a church Sunday afternoon for $10, you are one of the millions of "underemployed," but NOT unemployed.

Yes. And as time goes on, and our real wages go up, more and more people will be working fewer and fewer hours. This trend is already occurring - average hours worked have been declining since 1970.

Purchasing power of salaries is still going down.

It's actually going up in all quntiles except the bottom 20%, where it remains the same.

Clearly the US economy is getting worse for most, except the wealthy who are share owners of companies with sales to rich Asians, etc. ..."

The US economy is getting better for 80% of the people living in the US. If you want to call those 80% "the wealthy who are share owners of companies with sales to rich Asians" that's fine.

Yes the rich and corporations are doing well; however, Joe American is worried that now that China has bought Smithfield meats, world's largest producer of pork products, he may no longer be even able to give his kids "franks and beans."

He might have to buy American franks and beans? O the horror. Next thing you know you'll be telling me he won't be able to afford that 60" flatscreen TV and will have to suffer through the horror of watching TV on a 46" screen.

BTW, do you know when was the last time the wounded US economy made 2.2 million new jobs and what fraction of them were full time, good pay jobs, not like the 77% of new part time jobs and mostly low pay jobs US made in the first half of 2013?

Never, by your definitions.

 

[Billy T]

s

“Commercial banks and thrift institutions take deposits for checking and savings accounts from consumers and businesses. These deposits are insured by the FDIC for up to $100,000 per depositor per insured bank and up to $250,000 for retirement accounts. These banks lend this money to consumers and companies for autos, homes, business equipment, etc.”

Her money was not in a retirement account. We were not talking about retirement accounts.

No you said $250,000 FDIC insured accounts did not exist. I gave quote showing American Association of Banks said FDIC insurance for some accounts did exist, did not exist instead of quibble over my replacing "account" with "rule."

Ball in your court - apology, with admission of your post being hogwash, or give a reference supporting your hogwash./QUOTE]
Ball is in your court and I think you owe an apology.

Ok , when your admit you had the FACTS WRONG, I' admit my quote of the proof of that did replace the word "account" with "rule." as that was the rule. the law or any of several other ways to state the facts correctly.

... banks do routinely accept millions of dollars in deposits. Every day hundreds of billions of dollars flow through the banking system. And every day hundreds of billions of dollars are deposited in American banks. Those checks Americans write every month to cover their basic living expenses are not deposited in a black hole. They are deposited in banks. Every year more than 16 trillion dollars are deposited in American banks.

Yes they do, but not from one big depositor like the AT&T YOU MENTIONED and said the did store their pay roles in the bank. I explained hay that was not desirable from either the bank's or AT&T's POV. Banks need the statistical average of how long short term deposit last and slowly change, not one big depositor asking for their money back in a week or so. You have been reading too much extremist secret cabal specious nonsense. I even compared the banks to life insurance companies who also depend on statistical behavior. I noted that the fine print of accounts does allow the bank to delay return of demand deposits for some month and if AT&T want is millions back immediately that fine print would be exercised and the pay roll not met, so not in AT&T's interest either.

And businesses don’t pay their bills with short term paper. They don’t pay their payroll with short term paper.

Of course I never said the did. I said they would buy short term paper that matured into cash when they needed to pay the pay roll.

I'll explain how it works: Say GM has collected 10 million dollars from car sales and will not need it to pay its suppliers for 22 days and AT&T has 8 million dollar pay roll to met in 5 days. Then AT&T can borrow the 8 million from GM and GM gets a little interest that banks, which lend mainly long term (30 year mortgages etc.) can't pay on a five day only deposit. AT&T will pay the loan back to GM before GM needs it 22 days later to pay its suppliers. It does not really matter how AT&T gets the 8 million it pays back to GM. Perhaps their billing of customers provides all of it, or perhaps they borrow part from some other corporation not needing the money for a week etc. Corporations lend and borrow from each other all the time this "short term" paper. They don't want millions of dollars sitting in their strong box earning nothing, not even for just a week.

And since the FDIC couldn’t pay the money would have come out of US Treasury general fund and contributed to the deficit and debt.

Yes I agreed the failed banks assets the FDIC takes and sell may not full the cover the total the FDIC pays out to depositor. Usually convers more than 90% however and sometimes more than 100% if the bank owned buildings were quite valuable. Just to make my point I suggested that the total net cost to the FDIC if there had been no bank bail out after Lehman and some other banks failed would be less than 3 billion dollars. I compared this to the current 3 Trillion dollar the bail out and QE programs have made as debt for future tax payers. It will be paid by "monetization of the debt" i.e. destruction of the value of the dollar just as China and others fear.

... Wrong again. Ignoring the fact that FDIC insurance is limited to 100k dollars will not make it go away. Folks and businesses with over 100k in deposits would have lost their money.

Yes there probably were a few people ignorant enough to have more than the FDIC insured amount in one bank account and not in several different banks or with different registration in that one banks (one jointly with wife, one joint with son, one jointly with business partner, etc.) so they could be fully FDIC insured for several million dollars. As they say, a fool and his money are easily parted.
You seem to think that the FDIC will only insure any person up to $100,000, but that is false. There is no practical limit on how many millions of your money can be in banks with full FDIC insurance coverage.

...Yes the Federal Reserve has trillions of assets sitting on its balance sheet. As I have repeatedly told you over the years, those are assets the Fed can sell at any time.

Not even the Fed believes that any more. They have admitted the their are no customers for US paper, unless it is sold at a deep discount to face value. Why the now plan not to sell to clear their books, but just hold the bonds and mortgage backed securities (the "toxic trash") until it mature, rather than take a loss by sell it. The fed now is the buyer of > 85% of the new paper the Treasury must sell to finance the federal deficits and pay the notes the Social Security system holds and must redeem, now that SS's taxes are less than the SS payouts. Hell the Fed is concerned even with the market reaction to just a moderate lower the amount (85 billion / month) It buys - selling its assets is out of the question, but you continue to claim that is possible.

...I didn’t lie.

Yes you did - three times, as you continue to be unable to show any post where I moved the date further into the future, I will go back and find an early post where I said the same Halloween 2014 date as I say STILL NOW.

Nice try, however to blame Sciforum's search engine for your inability to find what does not exist. I'll need more time than have just now as seach engine is really terrible - found only one hit on word Halloween in post of mine

 

[joepistole]

I'm just about ready to catch a flight, I'll have to come back to this thread at another time.

I will say this much, I agree with Joe on one thing. This IS the recovery. We are in the New Economy. I actually don't expect there to be hyperinflation and destruction of the dollar. I suspect we will enter a Japan-like New Economy (which we are in) where most of the good jobs will be working for the military industrial complex (in one capacity or another) or working in the medical industry (in one capacity or another). As I said, I hope you like the "Recovery", because this is it.

For the Joe's of the world, life is good. I seem to recall you were talking about buying some slum-housing in Detroit? Must be nice huh Joe? I mean, the poor are so destroyed and barely literate you'd be doing them a favor buying up their houses, fixing them up, and renting them back to them (or flipping them back to them). Even better if "the Government" steps in and backstops their loans or pays their rent. Isn't that right?

Slum-LORDing, how Progressive.


You used Europe as your example, why not Japan? Japan is on QE8 and is in dent 200% GDP. The difference is, when you walk into a McDonald's restaurant, the one's in the 'Bad' neighbourhoods next to the Housing Projects, you could probably eat off the toilet seats. They're THAT clean. We are not Japanese. Our inner-city neighbourhoods are shitholes even the police don't dare enter. This doesn't happen in Japan.


I'd also like to note, Larry Summer's is on record saying Quantitative Easing doesn't work. Which is interesting, given "Economics" is a "Science" and all. Ha! It's a Religion. Value, like God, only exists in your head Joe. So, it'll be interesting to watch as your pray at the feet of The Fed with it's new High Priest telling your the exact opposite of what the last High Priest told you. And you won't skip a beat, you'll be singing in tune as soon as they send up the White Smoke (up your arse) and Pope Benedict Summers takes the Throne.

Reminds me of that scene in Big Brother.

Well that is not what Summers said,

"In speeches, editorials, and recent studies, Summers, who has emerged as a top choice to be the next Fed head, has regularly questioned the wisdom of the U.S. central bank's signature bond buying program to stimulate the economy. Summers has said quantitative easing, which is meant to lower interest rates, has done less to boost the economy than people think, and he has frequently brought up the program's potential downsides.".

I don't know anyone who things the current economic remedies are optimal. But it is all we have given Republicans in the House of Representatives have effectively blocked appropriate fiscal policy for more than two years now rendering the Fed and QE the only rescuer and remedy in town.

I hate to surprise you again, but there is more than just slum property in Detroit and I have no interest in slum property. I think and most economists think next year will be a good year…assuming House Republicans don’t send the country into default by refusing to allow the government to pay its bills or enact some really awful fiscal policy.

Obamacare will be a healthcare boom next year in the US as affordable healthcare coverage will be available to all Americans. Facilities will be built, people will be employed, healthcare equipment and pharmaceuticals will be produced all of which benefits our economy. Further there is some indication that Europe, after changing their fiscal and monetary course, is emerging from recession. And if by some miracle we could get competent fiscal policy out of Washington, we could see some really good growth next year. But as long as Republicans retain control of the House and continue to block prudent and appropriate fiscal policy, fiscal policy will continue to be a drag on the US economy.

Everything reminds you of big brother…opening the door reminds you of big brother. Rolling out of bed reminds you of big brother.

 

[Billy T]

... I didn’t lie. And no matter how big you make the fonts that fact will not change. You did make the prediction of an imminent collapse of the dollar shortly after I became a member her at Sciforms and you stated you had moved back the date of imminent demise because President Obama was elected and you had not accounted for his election. ...

Yes Joepistole is a LIAR: The first two or three times Joe claimed I had postponed the date for the run on the dollar, I only said that is false, not true, and asked him to tell post where I had done that. (He did not of course as I never post phonded the date - in fact I slightly move it forward as GWB and Greenspan were destroying the US economy more rapidly than I first realized.) Finnally I had had enough and called Joe a liar. Here is PROOF - A time ordered set of my posts, just samples showing I NEVER post phoned the date.

Billy T., you've been predicting world financial collapse, collapse of the US markets, etc for ages now on this forum .....and none of it's come true. So ...why do you continue to predict such things??? Baron Max

The following post, replying to the Barron, was made on 10 Aug 2007.

It is true true that I have been predicting dollar collapse and deep depression for US and EU for several years, … After GWB was in office about one year, with destruction of Clinton's budget surpluses, I began posting warnings here ... With his second election, the invasion of Iraq, etc. I began to set a time table for the collapse of the dollar of "in about a decade."

After Greenspan's foolish increase in liquidity, (resulting in historically low interest rates and unsustainable surge in home prices) and GWB's continued "twin deficits", his lack of understanding or the tribal nature of the middle east "nations" and his big business tilt against the interest of the population, etc. I began to predict the collapse of the dollar depression in "less than a decade" ...

... When GWB became POTUS for second time in 2005 and I set a time table for the collapse of the dollar of "in about a decade." That, is my first prediciton with any time indicated. I.e. I had the run on the dollar taking place in 2015 but GWB and Greenspan were doing so much damage to the US that some time in 2006 I re-stated the date as “less than a decade,” which was still the same predicted date as my earlier “in 2015.”

Note also I correctly predicted that the surge in home prices was “unsustainable” and that GWB's invasion of Iraq would fail and told why: Namely that Iraq and other middle east nations were not really a nations, as westerners understand that term, but divided tribes (Suni vs. Shiiti, with a 1200 year old war still going on. - I have other posts from the same period explaining this is detail. I.e. their first loyalty is to their extended family - several hundred people as normally they marry a 2nd cousin. Their second loyalty it to their branch of Islam - They don't have any loyalty to nation of Iraq, or if they do it is less than their loyalty to their friend, the butcher who gives them a choice piece of meat for same price as the cheaper cuts.)

Here in post of 4 October 2009, where I'm telling the SAME UNCHANGED PREDICTION:

... Billy T comment:
{the steady modest decline in value of the dollar was} Not yet the “run on the dollar” I predicted several years ago would occur before Halloween 2014,

Here from 30 January 2011 where I am still making the SAME UNCHANGED PREICTION

Since late 2005 I have said that there would be a run on the dollar with deep long-lasting depression in US & EU to start within a few months following that run. After doing this for a few years, at Baron Max's insistence, I was forced to give some date for my prediction. I picked Halloween 2014 as the "before" date and Halloween 2008 as the "after" date - I.e. set a "6 year wide window" for the run.
Nearly two years ago, without changing the prediction's terminal date, I suggested that Obama and Bernanke would stimulate, growing the debt to make that depression into the "greatest ever" depression, but delay it until Obama's first term is over.* I.e. not until early or mid 2013, but this poll only gives half year window choices in 2013, so I will vote my original limit 2014. ...

Here is post from 9 March 2012 telling the SAME UNCHANGED PREDICTION:

Saddam was never a threat to US or EU. In fact his Iraq was the only country in the Mid East where al quada was totally absent. (Not only them but any other group with a political adgenda was driven out or killed.)He, and his sons, enriched themselves, many palaces etc. where sons often took attractive women to rape, etc. He brutally killed many who did not agree with his absolute rule (especially the Kurds who wanted to form Kurdistan and the Shiites who wanted closer ties with Iran) but was far from the worst dictator in the world. ...
SUMMARY: The US would be significantly more secure, with less expense for that, If Saddam were still in power, selling his oil to western companies, instead of China, suppressing Al Quada, and keeping Iran´s military concerned with its Iraq border defenses. The main winner of the Iraq war was Iran and to a lesser extent China. The first President Bush had the good sense to leave Saddam in power, but his stupid son, did EVERYTHING wrong and greatly damaged the US - so much so, that I could predict, while he still had two years as POTUS, a depression was inevitable and would begin with a run on the dollar. Initially that prediction had a 6 year wide window, but now it states "on or before Halloween 2014"

It would be more work than I want to do, but I could find more posts, one for every year of the last decade where the date, if any is given, it is the same.
SUMMARY: Joe is a liar.

BTW, I think there is a post where I note I could not foresee the exact mechanism that would cause the dollar to collapse "on or before Halloween 2014" in which I noted the economic troubles in Europe had tended to move the date closer but the election of intelligent Obama, tended to delay the collapse, cancelling each other out so there was no need to change the predicted date from Halloween 2014. AGAIN as proven above, I have never changed the terminal date, except early in GWB's 2nd term I moved it slightly closer to the present. That I the opposite of what Joe claims in repeated lies.

 

[joepistole]

sNo you said $250,000 FDIC insured accounts did not exist. I gave quote showing American Association of Banks said FDIC insurance for some accounts did exist, did not exist instead of quibble over my replacing "account" with "rule.Ok , when your admit you had the FACTS WRONG, I' admit my quote of the proof of that did replace the word "account" with "rule." as that was the rule. the law or any of several other ways to state the facts correctly.Yes they do, but not from one big depositor like the AT&T YOU MENTIONED and said the did store their pay roles in the bank. I explained hay that was not desirable from either the bank's or AT&T's POV. Banks need the statistical average of how long short term deposit last and slowly change, not one big depositor asking for their money back in a week or so. You have been reading too much extremist secret cabal specious nonsense. I even compared the banks to life insurance companies who also depend on statistical behavior. I noted that the fine print of accounts does allow the bank to delay return of demand deposits for some month and if AT&T want is millions back immediately that fine print would be exercised and the pay roll not met, so not in AT&T's interest either. Of course I never said the did. I said they would buy short term paper that matured into cash when they needed to pay the pay roll.

Ah no. This is a dump of incoherent crap. It’s barely intelligible. It is obfuscation. The fact is you were wrong on many things. You claimed depositors would not lose money if the banks were bailed out. And I gave my aunt as an example. And you cited some none existent “retirement rule”. There is no “retirement rule”. First you denied she was a little person because she had 300k. But then you admitted that wasn’t big money and then you went with this nonexistent “retirement rule” crap. The fact is my aunt would have lost 200k, 2/3rds of her savings were it not for the bailouts. The fact is the FDIC in 2009 only insured deposits up to 100k, not the 250K you claimed.

This is not quibbling about “account”. The FDIC only covered 100k of deposits. That is it. We were not talking about retirement accounts. The fact is you were wrong once again. My aunt, like many middle class folk, would have lost her savings were it not for the bailout.

And three, I didn’t write the stuff you are attributing to me. You are making stuff up again Billy T. This isn’t the first time and unfortunately it won’t be the last. You have a nasty little habit of rewriting and manipulating posts.

Additionally, I said business would not have been able to pay their bills and make payroll were it not for the bailouts and that is true. Businesses would have lost their cash sitting in banks which they use to make payroll and pay their bills. And you came back saying that was not the case because they don’t keep cash…which is obviously not true. Cash management is what happens in corporate treasuries across the land. Businesses do a lot of things with their cash. But at the end of the day, they do have substantial amounts of cash sitting in banks.

I'll explain how it works: Say GM has collected 10 million dollars from car sales and will not need it to pay its suppliers for 22 days and AT&T has 8 million dollar pay roll to met in 5 days. Then AT&T can borrow the 8 million from GM and GM gets a little interest that banks, which lend mainly long term (30 year mortgages etc.) can't pay on a five day only deposit. AT&T will pay the loan back to GM before GM needs it 22 days later to pay its suppliers. It does not really matter how AT&T gets the 8 million it pays back to GM. Perhaps their billing of customers provides all of it, or perhaps they borrow part from some other corporation not needing the money for a week etc. Corporations lend and borrow from each other all the time this "short term" paper. They don't want millions of dollars sitting in their strong box earning nothing, not even for just a week. Yes I agreed the failed banks assets the FDIC takes and sell may not full the cover the total the FDIC pays out to depositor. Usually convers more than 90% however and sometimes more than 100% if the bank owned buildings were quite valuable. Just to make my point I suggested that the total net cost to the FDIC if there had been no bank bail out after Lehman and some other banks failed would be less than 3 billion dollars. I compared this to the current 3 Trillion dollar the bail out and QE programs have made as debt for future tax payers. It will be paid by "monetization of the debt" i.e. destruction of the value of the dollar just as China and others fear. Yes there probably were a few people ignorant enough to have more than the FDIC insured amount in one bank account and not in several different banks or with different registration in that one banks (one jointly with wife, one joint with son, one jointly with business partner, etc.) so they could be fully FDIC insured for several million dollars. As they say, a fool and his money are easily parted.

This is a big reversal; in your last posts you said banks don’t take big deposits…you know those million dollar deposits because they have to pay FDIC insurance. And unfortunately this paragraph is just more disconnected gobbledygook which I have to assume is an attempt on your part to obfuscate. I have a degree in finance. I worked in a corporate treasury department. I examined bank financials. So instead of trying to tell me something about finance, I suggest you learn something about finance before you begin trying to explain it to someone else.

The fact is if were not for the bailouts, businesses would have lost trillions of dollars in deposits rendering them unable to pay their bills and meet payrolls. Contrary to your assertions their deposits were not insured by the FDIC and the little people, middle class folks, the wage earners would have lost their savings and their jobs.

You seem to think that the FDIC will only insure any person up to $100,000, but that is false. There is no practical limit on how many millions of your money can be in banks with full FDIC insurance coverage.Not even the Fed believes that any more. They have admitted the their are no customers for US paper, unless it is sold at a deep discount to face value. Why the now plan not to sell to clear their books, but just hold the bonds and mortgage backed securities (the "toxic trash") until it mature, rather than take a loss by sell it. The fed now is the buyer of > 85% of the new paper the Treasury must sell to finance the federal deficits and pay the notes the Social Security system holds and must redeem, now that SS's taxes are less than the SS payouts. Hell the Fed is concerned even with the market reaction to just a moderate lower the amount (85 billion / month) It buys - selling its assets is out of the question, but you continue to claim that is possible.

Well yeah, I do think the FDIC only insured deposits up to 100k in 2009 before the bailouts because that is a fact. As part of the banking bailouts the government raised FDIC insurance to 250k and later made that increase insurance permanent. And if the government would have done nothing as you have proposed and let banks go under, people like my aunt, middle class people would have lost their savings and their jobs. Further, it would have increased government spending not for a year or two but for decades as those people would have moved from tax payer to tax taker. Instead of paying taxes, they would be receiving food stamps, housing assistance, free healthcare, unemployment, etc.

There wasn’t enough money in the FDIC insurance fund to cover more losses. During the crisis, the FDIC insurance fund went from 54 billion dollars to about 600 million dollars. The FDIC insurance fund was near insolvency. And you are ignoring some of the previous issues I mentioned. The FDIC didn’t’ have the staffing or physical ability to handle such wide spread bank defaults. You know there is no magic wand bank default fairy that waves her magic wand and magically fixes everything. Managing a bank default takes a lot of work and it takes time. Persistent refusal to acknowledge reality will not make it any less real.

Deposit Insurance Fund[edit source]

In February 2006, President George W. Bush signed into law the Federal Deposit Insurance Reform Act of 2005 (FDIRA) and a related conforming amendments act. The FDIRA contains technical and conforming changes to implement deposit insurance reform, as well as a number of study and survey requirements. Among the highlights of this law was merging the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) into a new fund, the Deposit Insurance Fund (DIF). This change was made effective March 31, 2006. The FDIC maintains the DIF by assessing depository institutions an insurance premium. The amount each institution is assessed is based both on the balance of insured deposits as well as on the degree of risk the institution poses to the insurance fund.

Bank failures typically represent a cost to the DIF because the FDIC, as receiver of the failed institution, must liquidate assets that have declined substantially in value while, at the same time, making good on the institution’s deposit obligations.

A March 2008 memorandum to the FDIC board of directors shows a 2007 year-end Deposit Insurance Fund balance of about $52.4 billion, which represented a reserve ratio of 1.22% of its exposure to insured deposits, totaling about $4.29 trillion. The 2008 year-end insured deposits were projected to reach about $4.42 trillion with the reserve growing to $55.2 billion, a ratio of 1.25%.[28] As of June 2008, the DIF had a balance of $45.2 billion.[29] However, 9 months later, in March, 2009, the DIF fell to $13 billion.[30] That was the lowest total since September, 1993[30] and represented a reserve ratio of 0.27% of its exposure to insured deposits totaling about $4.83 trillion.[31] In the second quarter of 2009, the FDIC imposed an emergency fee aimed at raising $5.6 billion to replenish the DIF.[32] However, Saxo Bank Research reported that, after Aug 7, further bank failures had reduced the DIF balance to $648.1 million.[33] FDIC-estimated costs of assuming additional failed banks on Aug 14 exceeded that amount.[citation needed] The FDIC announced its intent, on September 29, 2009, to assess the banks, in advance, for three years’ of premiums in an effort to avoid DIF insolvency. The FDIC revised its estimated costs of bank failures to about $100 billion over the next four years, an increase of $30 billion from the $70 billion estimate of earlier in 2009. The FDIC board voted to require insured banks to prepay $45 billion in premiums to replenish the fund. News media reported that the prepayment move would be inadequate to assure the financial stability of the FDIC insurance fund. The FDIC elected to request the prepayment so that the banks could recognize the expense over three years, instead of drawing down banks’ statutory capital abruptly, at the time of the assessment.[34] The fund is mandated by law to keep a balance equivalent to 1.15 percent of insured deposits.[34] As of June 30, 2008, the insured banks held approximately $7,025 billion in total deposits, though not all of those are insured.[35] As of September 30, 2012, total deposits at FDIC-insured institutions totaled roughly $10.54 trillion, although not all deposits are insured.[36]

The DIF's reserves are not the only cash resources available to the FDIC: in addition to the $18 billion in the DIF as of June, 2010;[37] the FDIC has $19 billion of cash and U.S. Treasury securities held as of June, 2010[37] and has the ability to borrow up to $500 billion from the Treasury. The FDIC can also demand special assessments from banks as it did in the second quarter of 2009.[38][39]

"Full Faith and Credit"[edit source]

In light of apparent systemic risks facing the banking system, the adequacy of FDIC's financial backing has come into question. Beyond the funds in the Deposit Insurance Fund above and the FDIC's power to charge insurance premia, FDIC insurance is additionally assured by the Federal government. According to the FDIC.gov website (as of March 2013), "FDIC deposit insurance is backed by the full faith and credit of the United States government". This means that the resources of the United States government stand behind FDIC-insured depositors."[40] The statutory basis for this claim is less than clear. Congress, in 1987, passed a non-binding "Sense of Congress" to that effect,[41] but there appear to be no laws strictly binding the government to make good on any insurance liabilities unmet by the FDIC.” – Wikipedia

Historical insurance limits[edit source]
1934 – $2,500
1935 – $5,000
1950 – $10,000
1966 – $15,000
1969 – $20,000
1974 – $40,000
1980 – $100,000
2008 – $250,000(October)
Wikipedia
http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation#2009

Instead of worrying about paper and filling up space with gobbledygook. You need to stay focused on the issue and at hand and the relevant facts. This has nothing to do with paper, Social Security, or quantitative easing. We are talking about the banking bailouts during The Great Recession.

Yes you did - three times, as you continue to be unable to show any post where I moved the date further into the future, I will go back and find an early post where I said the same Halloween 2014 date as I say STILL NOW.

Nice try, however to blame Sciforum's search engine for your inability to find what does not exist. I'll need more time than have just now as seach engine is really terrible - found only one hit on word Halloween in post of mine

There is no nice try. It is a statement of fact. Even you have admitted the Sciforms search engine is “terrible”. Prior to the upgrade searching the archives was easy…not so any more. Back when I first became a Sciforms member we did have that discussion and you did move your predicted date of financial Armageddon back because of Obama’s election. It is also a fact that after the last software upgrade, I have not been able to conduct any meaningful searches of Sciforms archives. Those are facts. It is also a fact that your moving the target date of your predicted financial Armageddon is not relevant to this discussion. You have predicted financial Armageddon in October of next year. So we will see. The only way we can get to a financial Armageddon is if Republicans in congress cause a debt default in order to advance their political aspirations.

 

[joepistole]

Yes Joepistole is a LIAR: The first two or three times Joe claimed I had postponed the date for the run on the dollar, I only said that is false, not true, and asked him to tell post where I had done that. (He did not of course as I never post phonded the date - in fact I slightly move it forward as GWB and Greenspan were destroying the US economy more rapidly than I first realized.) Finnally I had had enough and called Joe a liar. Here is PROOF - A time ordered set of my posts, just samples showing I NEVER post phoned the date.The following post, replying to the Barron, was made on 10 Aug 2007.... When GWB became POTUS for second time in 2005 and I set a time table for the collapse of the dollar of "in about a decade." That, is my first prediciton with any time indicated. I.e. I had the run on the dollar taking place in 2015 but GWB and Greenspan were doing so much damage to the US that some time in 2006 I re-stated the date as “less than a decade,” which was still the same predicted date as my earlier “in 2015.”

Note also I correctly predicted that the surge in home prices was “unsustainable” and that GWB's invasion of Iraq would fail and told why: Namely that Iraq and other middle east nations were not really a nations, as westerners understand that term, but divided tribes (Suni vs. Shiiti, with a 1200 year old war still going on. - I have other posts from the same period explaining this is detail. I.e. their first loyalty is to their extended family - several hundred people as normally they marry a 2nd cousin. Their second loyalty it to their branch of Islam - They don't have any loyalty to nation of Iraq, or if they do it is less than their loyalty to their friend, the butcher who gives them a choice piece of meat for same price as the cheaper cuts.)

Here in post of 4 October 2009, where I'm telling the SAME UNCHANGED PREDICTION:Here from 30 January 2011 where I am still making the SAME UNCHANGED PREICTION
Here is post from 9 March 2012 telling the SAME UNCHANGED PREDICTION:It would be more work than I want to do, but I could find more posts, one for every year of the last decade where the date, if any is given, it is the same.
SUMMARY: Joe is a liar.

BTW, I think there is a post where I note I could not foresee the exact mechanism that would cause the dollar to collapse "on or before Halloween 2014" in which I noted the economic troubles in Europe had tended to move the date closer but the election of intelligent Obama, tended to delay the collapse, cancelling each other out so there was no need to change the predicted date from Halloween 2014. AGAIN as proven above, I have never changed the terminal date, except early in GWB's 2nd term I moved it slightly closer to the present. That I the opposite of what Joe claims in repeated lies.

Name calling may make you feel better. But it doesn’t make your post truthful. No one doubts the date of your most recent financial Armageddon prediction. The fact is this is not your first Armageddon prediction. The dates of the relevant posts are between 2007 and 2008. Before you go calling people names you should be able to back your allegations with proof. And you have none. Repeated chest pounding is not proof.

 

[Billy T]

... No one doubts the date of your most recent financial Armageddon prediction. The fact is this is not your first Armageddon prediction. The dates of the relevant posts are between 2007 and 2008. ...

Yes I had left a hole in 2008, having given two posts in 2007 but none in 2008, one in 2009, one in 2011 and one in 2012 - all in post 477 and now at your request two new ones from 2008 in this post and another made just at the end of 2007. Every one of them showing clearly that I have NEVER post phoned the terminal date of my six year window to Halloween 2014 from some eariler date as you claimed as least three times. You in contrast have not produced the slightest shred of support for your lies. - You can not as none exist. I have NEVER post phoned the date to Halloween 2014 from some earlier date. – It has been Halloween 2014 that since the blue 28 November 2007 post below. Before that the date was vague. In the 10August 2007 (see it in post 477) the date specified is "in about a decade" which would make it August 2015, so although I never post phoned the date, I did advance it nearly a year.

All these FACTS makes you the worst kind of liar – one who persist in his lies despite no support for them and eight different quoted posts from 2007 thru 2012 clearly showing that your claims are lies. You should have back-peddled saying something like: "I'm sorry, my memory was in error.” but you chose not too. Thus all can see you are a dumb and arrogant liar, unable to admit you were wrong and apologize.

In quote starting this post for you asked “relevant” posts from 2007 & 2008 although I had given some for 2007 already. So here are three more quotes proving you are a liar, two from 2008. I hope you don't mind me giving one more “proving quote” from near end of 2007 as it is almost from 2008 (posted on 28 November 2007) as it has special value.

I had already specified the start of the six window for the run on the dollar was October 2008, but it names the day, as Halloween. Thus for first time telling the day that my “six year window" closes in October 2014. I have clearly and consistently stated in several several posts each year WITHOUT CHANGE from the start of 2008, until the present, that the run on the dollar occurs “on or before Halloween 2014."

Below this now blue new late 2007 post are two more 2008 PROOFS THAT YOU ARE A LIAR.

No, no changes in my predictions. The window for the run on the dollar is still 6 years wide, starting in October 2008. ...It is impossible to be more specific or consistent than I have been about when I expect the run on dollar to occur (unless I tell the day of October 2008 which starts the window)* ...
-------------------
*I have even once or twice come close to that by mentioning Halloween!

Following was posted 26 February 2008:

... about three years ago, I posted the correct date for the start of the 6 year window in which the run on the dollar will occur (Oct08 until Oct2014) That run quickly converts into the worst depression that North America and Western Europe have ever experienced. The BRICs will will not even enter into recession, nor will some others, like Australia, N.Z., Vietnam etc. and several African states that have long term (30Year) contracts with China to supply energy, raw materials, and food stocks. ...

The following was posted 22 March 2008:

I have anticipated the Economist by years!

Their current issue's cover article on central banks / Wall Street is excellent. Basically it says "Ben did good.” with creative action on Bear Stearns, but...
It is at: http://www.economist.com/opinion/displaystory.cfm?story_id=10880718

But of course I'd say that - in fact, most of it I did in many posts here, years ago. ...
http://www.economist.com/finance/displaystory.cfm?story_id=10881032is also good. There you will find:
"... Modestly higher inflation or jumpier currencies seem a small price to pay for preventing the collapse of America's financial system. Alas, modest shifts cannot be taken for granted. The darkest scenario—that investors panic at the Fed's loose policy, sending the dollar into free-fall—is becoming worryingly plausible.* A real dollar crash would force the Fed to raise rates, making America's predicament much worse and even sending the global economy into recession. ..."

The Economist does not have the last part, just quoted, quite right. (Probably they do not read my long posts all the way to the end. :shrug It should end:
"... sending the US and EU into world's worst-ever depression, reducing China's GDP growth rate to about 3%, and making suppliers of food stock, raw materials, and energy, like Brazil into "economic colonies" of Asia."
But I guess that is too many words for the editor to swallow. I really must get my plagiarism action against them started soon.
-------------------
*Several years ago, I even specified WHEN the run on the dollar will occur: In the 6 year window Oct 2008 till Oct 2014, with the first three years much more probably than the last three the way things are going now.