Global financial system implosion begins

[toblerone3]

you're not playing devil's advocate. you're posting up drivel. sorry - but it's true.

Why is it drivel?

 

[toblerone3]

The FTSE didn't bail out the banks, the nation state did; a debt of over $1 trillion - on which the UK pays interest equiv. to one new primary school every 20 minutes - suggests there has been a crisis and indicates who's paying for it.

I'm not denying that there has been a crisis and that there will continue to be a crisis and the effects of this crisis are spreading outwards from the money world to affect more and more people's lives - and it may indeed get worse in the future, but to me the word "implosion" appears to indicate some kind of systemic crisis and that seems too strong to describe the current situation.

 

[audiotech]

Why is it drivel?

Because there's no way that $14 trillion in debt the US owes can be paid back for one. This debt, the petro-dollar and continual war is just about keeping the boat afloat. The reality is that Capitalism as a system is fucked. The idea that a compound growth rate of 3 percent annually can go on forever is just pie in the sky. That's not including those developing countries trying to match this goal. The utopian nonsense of an unregulated 'free market' brings untold wealth to the few and misery for the many, nevermind the environmental degradation to the whole planet. That's it. The more people begin to realise this the better.

 

[toblerone3]

But US debt is actually lower as a percentage of GDP than it was in 1950. The linkage between the current economic crisis and peak oil is speculative.

 

[hipipol]

There is no doubt that there has been a crisis, there is no doubt that the powerhouse that once was the US is economically weaker but as yet I dont see China set to replace the US as the driver of the world economy nor do I see it as stable.
Equally I think that to claim the death of the current structure is somewhat premature.
The various Germanic tribes that took control of Rome didn't want to destroy it, they wanted to be part of it.

Same deal here

Worlds 3rd larget aircraft manufacturer? Embraer

 

[rorymac]

Nice one hipipol

 

[yield]

But US debt is actually lower as a percentage of GDP than it was in 1950. The linkage between the current economic crisis and peak oil is speculative.

In 1950 the USA was the world's largest oil exporter and producer. It manufactured most of the world's goods and was the largest creditor nation. The USA was almost self-sufficient.

A lot has changed in the last 60 years.

There is no doubt that there has been a crisis, there is no doubt that the powerhouse that once was the US is economically weaker but as yet I dont see China set to replace the US as the driver of the world economy nor do I see it as stable.
Equally I think that to claim the death of the current structure is somewhat premature.

I think you're understating the situation. In the markets things are volatile and precarious. Look at the 2010 flash crash.

I dunno. Few people predicted the collapse of the Soviet Union. Will the Americans decline gradually or even make a comeback? I reckon the odds are stacked against.

The various Germanic tribes that took control of Rome didn't want to destroy it, they wanted to be part of it.

The Goths and the Vandals had long been Romanised before conquering Western Europe. Has everyone been globalised?

"What have the Romans ever done for us?"

 

[Idris2002]

Global capitalism and 21st century fascism

Somewhat depressing, but worth a read imo.

Louis Proyect has written a very effective and convincing rebuttal of Robinson's argument that we stand on the threshold of a 21st century fascism.

 

[A Dashing Blade]

. . . The Goths and the Vandals had long been Romanised before conquering Western Europe.

You absolutely 110% sure about that?

 

[yield]

You absolutely 110% sure about that?

Not all certainly but a lot had especially those of the tribes that were defeated by the Huns. Many were allowed by Romans to cross the Rhine and settle in Gaul. They converted to Arian Christianity and adopted Roman customs.

Germano-Romans had served in the Legions all the way back to the Republic.</tangent>

 

[gosub]

http://www.zerohedge.com/article/here-what-happens-after-greece-defaults

 

[Ae589]

http://www.zerohedge.com/article/here-what-happens-after-greece-defaults

Exciting.

 

[ferrelhadley]

Only a month of QE2 left.

 

[Dr Jon]

May 23 2011: Right. Italy. Serious

After Greece, Ireland, Portugal and Spain, Italy is now joining the ranks of increasingly exposed economies. And as always, the denial levels are deafening. Don't forget Eurogroup head honcho Jean-Claude Juncker's recent words, though: "When it gets serious, you have to lie". Here's guessing Jean-Claude thinks this is serious.

 

[Barking_Mad]

 

[magneze]

 

[two sheds]

and another

 

[audiotech]

Imagine productivity rising over a thirty year period and instead of paying workers an increase in wages for their increased productivity you pocket all this extra wealth created as profits? Imagine then, instead of giving workers wage rises, you lend all this extra money, that workers have earned for you, back to the workers, earning interest from this money? Nirvana time! You can now visit a burger bar on Wall Street and pay £175 for a burger, with gold leaf dressing on top, but mind you don't trip over those workers who have now lost their jobs and homes, sleeping on the streets, with their families, including children, 25 percent of whom now live in poverty in the good old US of A.

Brilliant documentary for anyone who hasn't seen it.

Lifting the Veil is the long overdue film that powerfully, definitively, and finally exposes the deadly 21st century hypocrisy of U.S. internal and external policies, even as it imbues the viewer with a sense of urgency and an actualized hope to bring about real systemic change while there is yet time for humanity and this planet.

http://topdocumentaryfilms.com/lift...ee+Documentaries+Online)&utm_content=FaceBook

 

[ferrelhadley]

 

[ymu]

Thanks for the link audiotech. Ver handy.

 

[Dr Jon]

Steve-Bell---G8-summit----001.jpg

Reminds me of:

Thanks for the link audiotech. Ver handy.

Good site that.


Also see:

Deep Green Resistance
and
Financial Road to Serfdom

 

[ferrelhadley]

New Yorks business index drops into negative territory

Fed boxed in by 'stagflation'

The whole western economy remains in a deep cleft, inflation coming from high comodity prices and weakening currencies and no rebound in jobs mean people are still struggling to find the confidence to go out and spend again. Housing in America remains very weak so people are still struggling in houses that are worth less than they paid for them and unlikely to get better soon. The pumping of dollars into the US ecopnomy via quantitive easing is due to end this month.

Coming up to 4 years since the start of the credit crunch and we are still here.

 

[ferrelhadley]

Last Monday, Suzanne Kapner of The Financial Times wrote a small but interesting piece entitled Concern Rises over U.S. Mortgage Defaults which discloses that she has received some hitherto unpublished numbers from the Office of the Controller of the Currency (the principal regulator of large banks) that potentially suggest that delinquencies on bank residential mortge loans in portfolio may be higher than have been previously understood (and higher than what banks have disclosed for securities act purposes). Some 20% of bank-held mortgage loans, according to Kapner, are 30-days or more past due, which we read as meaning loans that are about to miss two or more payments. We are very interested in seeing more work from Ms. Kapner on this subject as banks hold nearly $3 trillion of mortgage loans in non-securities form on their books. 20% could be an alarmingly large number relative to existing loan loss provisions if such loans are eventually liquidated at anything near today’s prevailing recovery rates.

He <David Streitfeld of The New York Times> further notes that, at the current pace, it would take years to liquidate even the homes that are presently repossessable – and that’s just in the so-called non-judicial states. In states in which courts control the foreclosure process, it would take decades.

Link


Hints that the bad loans in the system may be larger than expected, hints coming from decent enough sources.

This malaise is going nowhere fast.

Sales of previously occupied US homes fell 15% in May from the previous year, an indication the economic recovery remains halting, analysts said.

Also, the median price for existing homes fell 4.6% in May from May 2010.

Link

But the group warned that May 2010 sales were inflated because of the pending expiration of a tax credit for home buyers.

 

[Barrentine]

I don't think that today's debt can be the expansion of the future. it will make things worse for the coming generation and they will never forgive us for this global recession.

 

[Belushi]

It will be ironic if its the Chinese Communist Party that ends up bailing out Capitalism.

 

[Barking_Mad]

It will be ironic if its the Chinese Communist Party that ends up bailing out Capitalism.

For the lulz.

 

[ymu]

Already is, isn't it. China pretty much owns the US. And us. Great excitement in Brum at a surprise visit from Deng Xiao-Ping to open up an MG factory.

 

[ferrelhadley]

Already is, isn't it. China pretty much owns the US. And us..

China artificially kept its currency low and the US high by buying large volumes of treasuries. This was the pattern of the mid to late 2000s. This kept the US debt costs low and meant they had loads of money to spend, generally on Chinese goods. Wags nicknamed it Bretton Woods II. But after the first round of quantative easing the Chinese found that the US still had a bit of magic up its sleave, where there was strong deflationary pressures it could print dollars to buy its own debt, this devalued the US currency, devalued the US debts and meant the US was not beholden on China to keeps on recycling its debt for factory products.


In other news...... QEII is now ending and there is a lot of concern that this will lead to a reduction in people buying comercial bonds as long dated treasuries become more attractive, in the current climate meaning companies are less able to raise money for new projects. In effect a reduction in the liquidity available. Yet another 'headwind' for the US and global economy. Obviously for every opinion one way you can find another in the opposite direction but I can see the logic to it.

 

[ferrelhadley]

It will be ironic if its the Chinese Communist Party that ends up bailing out Capitalism.

Pretty elastic definition of communism. But Chinas own problems are not insubstantial.

 

[love detective]

China pretty much owns the US.

in what sense?

Out of roughly 10 trillion of total (marketable) US debt, it owns around 1 trillion - only marginally more than Japan - and even then it doesn't make it the single biggest holder of US debt

Even as far as trade surpluses/deficits are concerned although official numbers show a big surplus/deficit between China and the US respectively - it doesn't really capture the underlying dynamics. The case of the i-phone has been used quite a lot to demonstrate this. China makes the iphone and the US buys the i-phone - this in turn contributes to around $2bn of the official annual bilateral trade deficit between US and China (representing about 1% of the total deficit). But around 95% of that figure relates to components made elsewhere (Japan, Germany and the US primarily) and imported into China. So around $1.9n of that total amount is just a pass through from other countries.