Stupid PM Quotes!

I don't think now that the atmosphere should turn to one of complete doom and gloom. My own belief is if we were going to have some kind of big crash or recession, we probably would have had it by now.,

Prime Minister Stephen Harper

Is he out of his fucking mind?, his point exact point is “I don’t THINK”

For the few of you who have dropped in on my Financial Blog, you know I’ve been suggesting these very failures for several years.

Bear Sterns, Lehman Bros, Merrill Lynch were all destined to die in the first wave of destruction not only because of the bad bets they made on housing but because of the virtual death of all the major Merger/Acquisition activity and IPOs which were the cash cows for these organizations. The damage from this wave of failures has not even been calculated yet as it spreads out through heavily leveraged funds and finally into personal pensions. To claim we are ok or insulated from the past problems let alone the future ones is idiocy at best.

In the big scheme of things Lehman’s failure will not bother average people with limited investments, at least not directly. AIG however, a major reinsurer, is also on the ropes and without a Government loan/handout they will take a credit rating reduction that could spark the forced liquidation of several $100 billion in bonds from funds and pensions who by law cannot hold junk paper. This could start a run on bonds as everyone is force to sell on the same trigger and prices will plummet to cents on the dollar. This will wipe out pension funds, municipal savings and the ability to raise capital for years.

AIG and other reinsurers, and bond insurers like MBIA, Ambac make up the second wave that will destroy debt markets. Without insurance all but the most secure companies, towns, cities, will be able to raise money. AIG reinsures many small insurance companies which will be hammered by this years huricanes, loses from mortages, bond loses and reinsurance will kill them surely.

The 3rd wave or maybe wave 2.1 is going to be the collapse of scores if not hundreds of retail banks. Last week's failure was the Silver State Bank of Nevada the 11th retail bank failure this year. This week it was only Lehman Brothers, we must be hitting botton, NOT!!! This will escalate and we will begin to see multiple failures weekly
Mega rich Willbur Ross sees 1000 bank failures

(Funny aside McCain’s son sat on the board of Silver State Bank)

The FDIC (Federal Deposit Insurance Corp) does not have the capital (or staff) to handle the sudden wave of small banks let alone the imminent failure of some huge ones like Washington Mutual
The FDIC had only $57 billion +- before banks started failing and just the impact from these 10 small banks failures plus Indy Mac is quickly burning through this fund. The FDIC cannot increase premiums to the banks because they are broke and unless they want an armed insurrection the U.S. government will have no choice but to backstop the FDIC and monetize more debt, ie hyper inflation.

Anyone who thinks that with Globalization, Canadian ownership in some U.S. banks, the size of Canadian, and the worlds U.S. currency reserves, plus our dependency on the U.S. consumer that this is not going to cause a crisis here too, must be a DOLT!

Stephen, I'm talking to YOU!

Meanwhile Harper’s words of wisdom paraphrased, it can’t happen now because it didn’t happen yet. WTF?

Yup, hide your head in the sand and pretend bad things cannot happen, that's leadership in the 21 century.

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