Bear Stearns and your preperation for the big crash

In the last few weeks things seem to be moving faster towards some kind of big financial crash. Yesterday it was Bear Stearns an old and established investor bank that required a huge bailout to head off what was expected to be a bank run.

In case you don't know a bank run is the scene in It's a wonderful life where everyone rushes to the bank to demand their cash back only to find because of lending the back actually has only a very minor fraction of it's assets liquid for withdrawal.

Banks are required to keep a certain level of reserves based on only certain types of accounts. So while they may have 7% of your savings account in reserve they are not required to have any portion of a chequing account, CDs, T bill accounts, RRSPs etc. It's been estimated that U.S. banks have only 1/4 of a cent for each dollar on deposit in all forms. When the fecals hit the fan only those first few in line get anything before the doors close.

In fact, recent statistics show that US banks industry wide have show Non Borrowed Reserves that are negative, meaning the only liquid money they have is borrowed making banks on average insolvent. It's not as if they can sell of CDOs, mortgages or other assets off to other banks because they are all in the same situation.

Now you say this is a U.S. problem but in reality it's a world problem, HSBC, CIBC, UBS, banks all over the world have taken loses based on the packaging and selling of bad mortgages, aggressive futures and derivative trading and high leveraged hedging. This could well happen here too.

The U.S. and the UK have both had one real Bank run with Country Wide and Northern Rock and a run on Bear Stearns was just barley averted, at least for this month.

So what should you do just in case?

Make sure you know what is and is not covered with deposit insurance in Canada, I'm not going to tell you it's like doing stock due diligence you must check for yourself so you are secure with the information.

Change banks if you think yours has taken too many loses, or at least split your business between two banks. This will actually increase your chance of getting hit but lessens your chance of being wiped out.

While there is Deposit insurance, how fast do you realy figure they will pay out? That's right not fast enough!!

I would suggest take out 2 or 3 months of cash from the bank and hide it. Utilities, property taxes etc can go months without being paid before you get those nasty letters but if your bank card and accounts are frozen how do you buy food, gas, medicine, the things of daily life.

This is a real threat, that picture at the top shows the run at Northern Rock, never say never!!Recommend this Post

Jim Flaherty and my Mother

Since the death of my father I've been managing my mothers investment portfolio which is geared to income generation. 2 years ago I invested a fair chunk into an Oil income trust, fulling expecting bank revenues and dividends to fall and knowing what peak oil would do the the price. (While not keen on oil companies I felt obligated not to impose my ideals on her portfolio.)

Needless to say I was mighty pissed off when the promise not to tax income trusts was broken and we took a good 25% loss.

The point of this post is, yesterday after a gain of some $35 dollars a barrel since I first bought the shares, Mom finally broke even.


Thanks a lot Flaherty, you smug little sack of shit!

P.s. I did avoid oil sands operatorsRecommend this Post

Cherniak on Marching up and down the square

Jason Cherniak has suggested today that all good Liberals should shut their festering gobs and March up and Down the Square like good little soldiers should.

See Video, marching up and down the square.




What's next the Liberal/Spanish Inquisition

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Earthquake Alert!

I've thought a few times about the potential for earthquakes as major ice sheets begin to melt away. It seemed pretty straight forward that 200 meters of ice must have some impact and when it melts the resulting rebound of the crust should create generate fresh seismic activity

Well it appears as reported in the New Scientist that Andrea Hampel at Ruhr University in Bochum, Germany decided to model the question and has found that ice throught it's additional weight suppresses normal plate movement allowing extra stress to build up in the system. As the ice sheets melt freer movement of the crust will result in more and stronger seismic activity taking place as several millennia of pent up pressure is released

Oh Joy! something else to mess with us, sigh!!!

If the land rebounds the plate including parts of the ocean floor must move up as well, has this displacement of water been calucated in ocean level projections?

Also in earthquake news scientists have identified the fault that caused a mediteranian tsunami in 365 AD. The fault near Crete has been anaylised and it appears it shifted up 10 metres in one quake. The resulting wave which would have been the equivalent of the 2004 tsunami caused great damage in Alexandria and the Nile Delta.

The chance of the same section of plate going off again is rated as only 1 in 5000 years, however other sections could go as often as 1 in 800 years. Let's see, 2008-365=1643, does this mean they are wrong or we are 843 years over due for a big one?Recommend this Post

Calling all Mediums, your country needs you!

The Green Assassin Brigade is so tired listening about the he said, she said, date changing, libel threatening rhetoric about Chuck Cadman that we are calling all Mediums, Shaman(Shamem?) and spiritualists in Canada to come together for a mass séance in order to finally get the truth, because in the end I’d trust a dead mans word or a con mans parlour tricks long before I’d trust the word of that Rat Bastard Harper and his back room full of Theocons and the Boys from Brazil.

A side bonus would be if Chuck gave his wife a spiritual bitch slapping for accepting the Conservative nomination.Recommend this Post

2008 US election results released early

TOO Damn Funny

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Is Malthus right yet?

It's amazing how fast this story is becoming main stream, showing the stupidity and evil, unethical and unsustainable move to convert the worlds food surplus(and beyond surplus) into fuel for our cars.

Apparently the Finacial post just picked this story up too.

Just yesterday wheat hit $12 dollars a bushel breaking previous highs all while wheat and corn stockpiles hit 30 and 24 year lows. Food inflation is hitting all areas of the world as corn prices in Mexico has put the tortilla a basic staple 30% more expensive. Bread and flour is under pressure here in Canada and we can expect meat, dairy and eggs to sky rocket too as feed prices soar, suddenly that grass fed organic beef is becoming more price competitive.

The U.N. has said rising grain costs is going to impact the size and cost of it's humanitarian food aid



While economist argue supply will increase to meet demand, rising population, rising Asian affluence, rising energy costs and coming energy shortages all support the possibility that eventually Malthus will be right and we will hit a population wall. Now this wall could be pushed back if we gave up on bio fuel and all became vegans but it's pretty damn obvious that the selfishness of the rich will let millions starve and populations peak before they change their lifestyles. I'm just as guilty being a lacto-ovo,beefo-yeasto vegetarian, meaning I'll eat any vegtable as long as it's covered in a cheese sauce and served with served with prime rib and beer, or in an omelet

In many ways this is so much more important than the intrigues and disagreements between Evil Harper and Chicken Shit Dion, yet the growing media awareness is being ignored by the public and politicos more interested in maintaining the status quo, even at the expense of the worlds poor who with today's food inflation may starve even if there is enough food grown in the next few years.Recommend this Post