Entries categorized as ‘bank nationalization’
No, we’re not out of the woods. B&B in the UK and now Lehman on Wall Street are showing that when the tide goes out, we see who’s swimming naked. Simply put, it’s not a good sign when investment banks and banks have to use credit to survive. As observed so well today, what goes up must come down harder:
“Lehman is in serious trouble on Wall Street. But that’s nothing compared to Bradford & Bingley in the UK, which may be wiped out in a matter of days. As you can see below, they were very close a few days ago. A bank run has been avoided so far because of an alleged government guarantee for every first £35.000 in deposits. What that is truly worth remains to be seen if bank failures come fast and furious in the UK.
That scenario is not that far out in left field; most large UK banks are caught up in rights issues. That over-supply means that to get any new capital, they’ll have to sell themselves dirt cheap. Which in turn will provoke enormous anger among shareholders. It could happen very soon. But yes, it’s still possible that Gordon Brown sells the future of his people to save the banking system.
Not that Lehman is looking good, mind you, they’re going “money intravenous” for the third time in a few months, and they lost over 50% of their values at the same time. If that trend doesn’t stop, there is no way out of failure or a fire-sale. And following tight on the Lehman heels, Wachovia is lined up for the emergency room, and perhaps the last rites. Or, you guessed it, a fire-sale.
People are often asking for “the” moment, and “the” writing on the wall. How about this: “Sales of [US] commercial properties were down 71 per cent in the first quarter compared with a year earlier.[..] Commercial property prices in the US in February saw their sharpest decline since records began nearly 15 years ago.”
http://theautomaticearth.blogspot.com/2008/06/debt-rattle-june-3-2008-what-goes-up.html
Categories: CDS · Lehman · bank capitalization · bank failure · bank failures · bank insolvency · bank nationalization · bank reserves · bank run · banking crisis · investment bankers · investment banking · money IV · run on banks
For curiosity’s sake, take a look at the historical dollar amount of borrowing by depository institutions (banks) from the Federal Reserve. It is hard not to notice that what we have here is unprecedented over the last 100 years. When you hear someone say the credit crisis is almost over, check this chart and think again.
Total Borrowings of Depository Institutions from Fed. Reserve 1910 - present (Billions $US)
Categories: Fed · NY Fed · Treasuries · bank assets · bank capitalization · bank failure · bank failures · bank insolvency · bank nationalization · bank reserves · bank safe · banking crisis · banking system · demand deposits · federal reserve · nonborrowed reserves · reserve requirements · reserves · socializing losses · state owned banks · subprime · what inning are we in
Categories: RBS · bank assets · bank capitalization · bank failures · bank insolvency · bank nationalization · bank reserves · capital ratio · undercapitalization
Click through to see New York Federal Reserve Bank’s March 2008 chart explaining TAF, TSLF, among many others including acceptable collateral for each type of lending:
forms_of_fed_lending.pdf
Categories: Bernanke · Fed · TLIF · bank insolvency · bank nationalization · bank reserves · banking system · federal reserve
Categories: Bear Stearns · Ben Bernanke · Bernanke · Bloomberg · CEO compensation · Economy · Fed · Jim Rogers · US dollar · bailout · bank failures · bank nationalization · disaster capitalism · dollar · federal reserve · fiat currency
The Federal Reserve has certain assets — about $800 Billion in Treasuries. Once it lends away the additional $200 Billion announced today, and counting the TAFs (Term Auction Facilities), about one-half of the Fed’s reserve of Treasuries will be gone. This chart shows the Fed’s reserves before this additional $200 billion is given out, so you’ll have to continue that line downwards to imagine what it’ll look like by the end of March:
Categories: Ben Bernanke · Bernanke · Fed · bank insolvency · bank nationalization · bank reserves · banking system · federal reserve
Click on the thumbnail and weep. This chart is the latest, and was updated as of 2/22/08. It’s dramatic. ↓
Now click on this thumbnail to see latest (as of 2/15/0 
Fed chart for banks’ total borrowings from the Federal Reserve - without precedent it would seem. ↓
For an excellent discussion of the meaning of all of this, check out “Borrowed Reserves and Tinfoil Hats” from Mish’s blog: http://globaleconomicanalysis.blogspot.com/2008/02/borrowed-reserves-and-tin-foil-hats.html
Categories: Fed · bank assets · bank failures · bank insolvency · bank nationalization · deposit insurance · federal reserve · nonborrowed reserves
http://www.guardian.co.uk/business/2008/feb/21/northernrock.banking
Those who are suspicious of bank nationalization schemes have more to work with. While sticking UK taxpayers with the bill for Northern Rock’s bad money management, the government cannot explain why an offshore group of the bank’s highest higher quality mortgages worth£40 billion was left out of the nationalization. ”Yesterday, senior peers, including the former chancellor Lord Lawson, expressed astonishment that ministers were at a loss to explain at the outset of the Lords debate the contractual relationship between Granite and the Rock. In the Commons David Cameron accused Gordon Brown of showing “less openness than Fidel Castro.”
Ron Sandler, new chairman of Northern Rock 
Categories: Granite · Northern Rock · UK · bank nationalization · socializing losses
