From Mish’s blog (Mish is Michael Shedlock). Very informative and interesting although he doesn’t mention inflation as he’s a deflation proponent like Gary North. But bear in mind, all this is happening as gas prices are at an all time high (more than tripled from year end of 2001) and government’s concocted inflation indexes are on the rise (even when they do not include food or energy) – as I was in DC last week, I read a free copy of USA today from the hotel and there was an article about how overseas investors holding our weak dollars are looking to spend the dollars in America from their surpluses (reminds me of the song – “Everybody wants kungfu fighting”). What can be expected? Higher inflation? Looks like we’ll all be hanging low:
Fed Calls Regulatory Overhaul “Timely”
Reuters is reporting Treasury regulatory overhaul plan “timely”.
Upcoming Treasury Department proposals to make the Federal Reserve the chief regulator of U.S. financial markets and give it sweeping new powers won praise on Saturday from the central bank and the head of the Securities and Exchange Commission.
“The Treasury’s report presents a timely and thoughtful analysis and is an important first step in the complex task of modernizing our financial and regulatory architecture. We look forward to working with the Congress and others to help develop a policy framework that will enhance financial and economic stability,” a Federal Reserve spokeswoman said.
Let’s Take a Look at “Timely”
Housing is imploding.
There are $500 Trillion in derivatives that no one can possibly understand the financial risks on.
A huge portion of those derivatives are with JP Morgan (JPM).
Bear Stearns stock went from $170 to $10 in a year in Shotgun Wedding between Bear Stearns and JP Morgan arranged by the Fed
Questions Linger Over Lehman’s Balance Sheet as Lehman Brothers (LEH) is leveraged 31.7 times.
Citigroup (C) had to be bailed out by Abu Dhabi Deal Raises Questions About Citigroup’s Health
Merrill Lynch needed $6.6 Billion Bailout From Kuwait, Mizuho.
Cost of Capital “Ratchets Up” at Citigroup and Merrill
Morgan Stanley (MS) sold 9.9% of the firm to China after handing out huge bonuses.
People are walking away from homes
Businesses Are Advised To Walk Away from agreed upon deals.
There is an open public debate on Moral Obligations Of Walking Away
1 in 10 of the entire state of Ohio is on food stamps.
Florida, Ohio, and Michigan are in an economic depression.
There is No market for Asset Backed Commercial Paper (ABCP)
German Banks Fears Global Meltdown caused by US subprime debt
There is a $1.1 Trillion HELOC Problem
Unemployment is poised to soar.
Commercial real estate is massively overbuilt and poised to plunge.
Goldman Sachs (GS) is calling for another $460 billion in writedowns.
The SEC Openly Invites Corporations To Lie.
Gee, that sure looks “timely” to me.