Instant Solutions to High Fuel Costs; FDIC Speaks Against Blogs; FDR Speaks against Hoarding; Wall Street got Drunk
Fools asks "What are some solutions? Anybody can bi-ch about problems"
Ok, okay Fools. Here:
Sanderson Research has some very, very interesting analysis on multiple topics. Carlton Meyer provides an outstanding piece here.
Instant Solutions to High Fuel Costs
1. Free Mass Transit Days
2. Cut Mail Delivery Days
3. Reduce Junk Mail
4. Slow Down the Mail
5. Cut Military Steaming Days and Flying Hours
6. Eliminate Military Air Show Demonstration Squadrons
7. Fund Expressway Bus Stops
8. Warn Government Agencies to Cut Back
9. Educate Drivers on Energy Savings
10. Address the Nation
Read the entire article it is worth the time here:
(ref Sanderson Research, http://www.sandersresearch.com/index.php?option=com_content&task=view&id=1362&Itemid=103)FDIC Speaks Against Blogs
FDIC must be in pure panic mode right now. A 3% withdrawl aka "bank run" on IndyMac caused Indy Mac to go insolvent, and FDIC lost 10% of "its" reserves from one bank insolvency. FDIC Chairmen Sheila Bair is accusing blogs of being "out of control". Mish Shedlock responded with FDIC Chairman Sheila Bair Is Out Of Control
Or you can read Mark Calvey "the incredibly inane article" FDIC learns it ignores bloggers at its peril.
I guess FDIC Chairmen Sheila Bair would not appreciate my pitchs for: C
FNM XL WFC
"The FDIC also plans to begin airing public service announcements as part of a public education campaign on the nation's deposit insurance program."
Wisdom from Mish Shedlock:
You Know The Banking System Is Unsound When..... Here are those points:
24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.
25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back."(ref: http://globaleconomicanalysis.blogspot.com/2008/07/fdic-chairman-shelia-bair-is-out-of.html) Mish
Shedlock provides some advice to FDIC: "here's what should happen.
1) FDIC insurance should be scrapped for all but checking accounts
2) On checking accounts, FDIC insurance should be unlimited.
3) Banks should not be able to lend out checking deposits, not a penny of it. After all, checking accounts are demand deposits. The money should be available on demand. It clearly isn't.
4) Automated sweeps programs that move money from checking deposits to savings deposits so that money can be lent out should be terminated.
5) Anyone that wants to chase yield in CD or high yielding savings accounts should have to pay the price if something bad happens. That would have shut off much of this insane lending spree right up front.
By the way, savings accounts should more accurately be called lending accounts. The reserve requirements on savings accounts is zero. Every penny is immediately lent out. The money that people think is in their "savings account" simply isn't there. I do not have a problem with this, except for the fact that "education" is lacking on this point, and there should be no government sponsored insurance on those in risky activities.
Sheila Bair should come out and say, "The money in your savings account, well none of it is there. By the way, only 10% of the money in your checking account is there either". Now that would be an education."
MY COMMENT: Instead of blaming rumors from blogs causing Indy Banks implosion, FDIC might want to read: My Experience at Indy Mac
: Fraud, Corruption, Criminality Posted by Barry Ritholtz on Friday, July 25, 2008 | 10:30 AM
"The original piece was published by Vernon Martin at the Appraiser's Forum (http://appraisersforum.com). His story is utterly fascinating, and it deserves wider distribution.
Martin was the chief commercial appraiser for Indy Mac from October 15, 2001, to when he was terminated six months later for failing to look the other way or actively engage in fraud. Most of the details below are culled from the public record of his wrongful termination litigation, which was eventually settled in Martin's favor.
My quick overview of the conflicts, fraud, and criminality at Indy Mac --
• Underwriting loans based on appraised values well above purchase prices;
• Fabricating rent rolls for commercial properties to be appraised;
• Over-stating Construction work as 80% complete versus 15% in actuality;
• Attempting to change discounted cash flow models for subdivisions in order to increase appraised value;
• Attempted intimidation of Appraisers;
• Providing false information to appraisers;
Conflict of interests:
• Appraising a development where the land was being purchasing from David Loeb, IndyMac’s Chairman of the Board;
• On one transaction, the CEO's father and father-in-law were commercial construction inspectors for the firm; the loan officer was the CEO's brother (a former police officer with no loan experience);"
MY COMMENT: I am not sure FDIC public service announcements can cure this level of criminality.
See if this speach sounds relevant to today:
Roosevelt Speaks against Hoarding Part 1
0213 "the banks will take care of all needs, it is my belief that hoarding in the past week has become an exceeding unfashionable past time..."
0345 "this currency is not fiat currency, it isssued only on good assets"
Roosevelt Speaks against Hoarding Part 2
"I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said..."
"With those mealy words, America's Depression-era president ventured from bad luck into treachery. The Executive Order he issued on the 5th of April 1933 confiscated Americans' private holdings of gold, then valued at $20.67 per ounce. Then, in January, 1934, the U.S. president fixed the price of gold at $35. All of sudden, Americans' dollars had been devalued by 69.3%.
Whether this act of nationwide larceny did the economy any good or not, we cannot say. It was not until after World War II that the economy fully recovered the spring in its step. And U.S. stock prices didn't return to their '29 highs until 1950.
FDR reneged on America's historic obligation to its own citizens; after 1933, they could no longer redeem their paper money for gold. Richard Nixon stiffed the foreigners in 1971; henceforth, if the French wanted to trade their dollars for gold they were out of luck."
- Bill Bonner
Bush is no Roosevelt: "Wall Street got drunk."
Our current President does not have the speach writer of President Roosevelt. Mr Bush said: "There's no question about it. Wall Street got drunk.
"It got drunk and now it's got a hangover. The question is, how long will it sober up and not try to do all these fancy financial instruments?"
Mr Bush's comments were recorded on a mobile phone camera and then posted on YouTube.
"He has said before that Wall Street was dealing with very complex financial instruments and that the markets didn't fully understand the risks that those instruments posed to the system," White House spokeswoman Dana Perino said.
"It is certainly a more colourful way of saying what he said before, but he's described it that way before in terms of his observations of what happened to the market," she said.
(ref: Bush: 'Wall Street got drunk' Published: Thursday, 24 July 2008, 11:01AM