Can The Bail Out Work? Fat Chance
From Markman's latest, and sounding very Nattering like:
The bailouts: "a decisive, coordinated effort by governments worldwide to manipulate stock markets higher by every means possible...
without regard to such niceties as fundamentals, the rights of shareholders or the laws of financial gravity.
Will bailouts work? experts say it will likely fail eventually, by running into the usual set of bugaboos that we have discussed for some time:
levels of debt deleveraging and slowing growth that no additional amount of monetary or fiscal stimulus can vanquish.
Virtually every respected authority in the world of real capital believes the bailout bill approved by lawmakers won't solve our banks' problems.
Virtually every country in the world is trying to throw truckloads of borrowed money at a problem created by borrowed money.
The Nattering One muses... sounds familiar doesnt it?
The bailout as structured will allow banks to liquidate their bad loans more easily to meet the demands of customer withdrawals.
However, this does NOT increase the banks capital levels, and as we have nattered many a time: This is not a LIQUIDITY problem, its a SOLVENCY issue.
In the event of further customer withdrawls and margin calls, the banks DO NOT have enough capital to remain solvent.
We repeat, bail and cut all you want, NOTHING and NO ONE can stop this trainwreck, its a fait accompli.
Get your ticket, your popcorn, take a seat and start screaming for the largest financial horror show in history, it'll be worth every penny.
The bailouts: "a decisive, coordinated effort by governments worldwide to manipulate stock markets higher by every means possible...
without regard to such niceties as fundamentals, the rights of shareholders or the laws of financial gravity.
Will bailouts work? experts say it will likely fail eventually, by running into the usual set of bugaboos that we have discussed for some time:
levels of debt deleveraging and slowing growth that no additional amount of monetary or fiscal stimulus can vanquish.
Virtually every respected authority in the world of real capital believes the bailout bill approved by lawmakers won't solve our banks' problems.
Virtually every country in the world is trying to throw truckloads of borrowed money at a problem created by borrowed money.
The Nattering One muses... sounds familiar doesnt it?
The bailout as structured will allow banks to liquidate their bad loans more easily to meet the demands of customer withdrawals.
However, this does NOT increase the banks capital levels, and as we have nattered many a time: This is not a LIQUIDITY problem, its a SOLVENCY issue.
In the event of further customer withdrawls and margin calls, the banks DO NOT have enough capital to remain solvent.
We repeat, bail and cut all you want, NOTHING and NO ONE can stop this trainwreck, its a fait accompli.
Get your ticket, your popcorn, take a seat and start screaming for the largest financial horror show in history, it'll be worth every penny.
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