In case (like me) you missed this report by Scott Pelley on 60 Minutes last month regarding the second wave of expected defaults on the way, it’s good to keep this in mind when considering some of the actions presently being contemplated by the U.S. government and others to bail out the global financial system.
This will have the likely effect of deepening and prolonging the recession south of the border, which naturally of course will drag down our economy along with it. This begs the question: where on earth is Bank of Canada governor Mark Carney getting his crazy rosy estimates of a relatively quick recovery from?
21 Comments
January 31, 2009 at 1:13 pm
There’s a multi-trillion dollar death-star of derivatives swaps floating around out there. No one knows exactly how much and who’s holding, ergo the distrust amongst the world’s banks to lend to each other. It’s the bet upon a bet upon a bet upon a bet to the nth degree with the taxpayer getting nailed to cover the runaway idiocies of the house. The house always controls. Simple Vegas rules.
January 31, 2009 at 1:17 pm
Yep.
Hey, funny how the banks suddenly had a whole pile of money to lend when it involved the consolidation of two giant Pharma companies to make an even bigger conglomerate, wasn’t it?
January 31, 2009 at 1:53 pm
Indeed. I’m scrambling like crazy to learn how to go about buying gold…without taking too much of a service fee hit, brokers, etc. Balance of cash gets transferred into tangible assets, on top of sitting mortgage/rent free. Like the saying goes: If you can’t touch it, it’s not yours.
January 31, 2009 at 3:01 pm
Sebastian – FYI, the derivative bubble worldwide is estimated by the Bank for International Settlements to be about $596 trillion.
There’s not enough money in the world to cover it.
Pop goes the shitpile.
January 31, 2009 at 3:14 pm
anon1.01, I’ve seen several different guesstimates from non-cornucopian analysts, but don’t think I’ve ever seen this BIS estimate. Anyway, it’s BIG BIG BIG…beyond most folks’ imagination, mine included.
Re “There’s not enough money in the world to cover it,” ergo there’s not enough labour and there certainly isn’t enough energy to re-boot. Shades of pushing a wheelbarrow down to the local store for a loaf of bread (if there is any) in order for these fuckers to squeeze down the value of the debt.
Pop indeed, not with a whimper but with a bang (apologies to the spirit of T.S. Eliot).
January 31, 2009 at 3:18 pm
Re “The house always controls.” It also never loses.
January 31, 2009 at 4:43 pm
It’s been a snowball that’s been rolling downhill for a while.
If you have the time:
http://www.villagevoice.com/2009-01-28/news/what-cooked-the-world-s-economy/
Canada had a meltdown of sorts in August 2007.
It was underreported so as not upset the applecart.
Nobody wanted the music to stop.
Meanwhile, the uber-haves tucked away their bucks in safe harbors, transferring any bad debt ‘hot potatoes’ into other hands.
That’s why the assets, savings and retirement funds of a large sector of the world are now at risk.
Watch what happens at Davos.
You could see an international moratorium on several types of financial instruments to buy breathing room, for now.
The resolution of this mess has to play out sooner or later.
Have a nice day!
January 31, 2009 at 4:59 pm
Good CBC report on how/where to buy gold in Canada here – http://www.cbc.ca/news/background/gold/
January 31, 2009 at 5:06 pm
From Bloomberg:
A sign of the times, as they say.
January 31, 2009 at 5:59 pm
So, honestly, what do you think? Would the chartered banks fail? ie. RBC or Scotia
January 31, 2009 at 6:04 pm
Let’s put it this way: it’s not inconceivable.
January 31, 2009 at 6:10 pm
That is terrifying.
January 31, 2009 at 7:37 pm
They are not going to fail…relax everyone. Canadian banks are not holding derivatives in this manner or volume. This is a bit over the top don’t you think?
MC Hammer by the way, is long past bankruptcy. He blew all his cash back then from the one hit he had, but he’s been producing ever since and has no issues now. He’s just marketing an image. Same for McMahon.
What’s next people? Are we all going to stock up on dried beans and generators and pool our cash to buy some land up north for when THEY COME TO GET US!?!?
No offense, but I may just hang here at home and chill.
January 31, 2009 at 7:43 pm
Canadian banks are not holding derivatives in this manner or volume.
Not here in Canada, but they all have U.S. subsidiaries.
It’s incredibly unlikely that our banks will fail, but these days… who knows? Like I said, not inconceivable.
January 31, 2009 at 8:48 pm
I’m still chillin’
January 31, 2009 at 8:55 pm
February 1, 2009 at 4:26 am
Useless eaters and latent die-off candidates remind me of that old Star Trek episode: big, big brains inside of big, big heads perched upon limp-dick, mushy physiques incapable of altering the death spiral of their planet, big brains and all.
Re “No offense, but I may just hang here at home and chill.” Do you have any idea how literal that statement stands to be?
Newton’s Sleep…ZZZZZZZZZZZZZZZZ.
February 1, 2009 at 2:23 pm
Red,
Came across this little blurb from an ex Cash4Life employee. An inside view of the operation is kind of like making sausages.
It’s heavy promotion and sounding too good to be true offers along with being based in Florida should ring some bells anyway.
Here’s a nibble:
Cash 4 Gold is definitely not a trustworthy or credible company to do business with. You are almost better off taking your items to a local pawn shop or shopping around for other companies.
Or take the whole bite:
http://www.complaintsboard.com/complaints/cash-4-gold-c115287.html
February 1, 2009 at 2:26 pm
When I called the Royal Canadian Mint they suggested as reputable brokers:
http://www.kitco.com and http://www.bordergold.com
February 1, 2009 at 4:50 pm
OK, next problem.
How to lay our hands on some gold.
Go panning in the Yukon?
Nah, too cold.
Rob a bank?
They have coins and paper and alarms.
Grave robbing?
Not me cup o’ tea.
I got an idea.
Hey Sebastian, tilt your head back, open your mouth and say aaahh….
February 1, 2009 at 5:46 pm
Silver’s easier to manage — check your change. Dimes and quarters produced before 1967 have silver in them.