March 18 2008: Well, I read my blog from last December and it seems a setup for a bank crisis is really unfolding and 1929 style chaos could be just around the corner, oh boy...
In December 2007, I wrote:
My concern now is that we are going to see panic in March 2008.
Last week I was at a stop light and I noticed a car had broken down. Some people in the broken down car got out and started to push it away. But from three cars behind, some people who did not notice the breakdown started to get very angry. They made noise with their hooter, siren, horn (what ever you want to call it) saying "what the F#*k is going on"
Seeing this behavior for something trivial really make me wonder, what will we see once everyone lives in anxiety, following a collapse of banking plus a spike in the price of oil???
Here are some articles to show where we are today and why I think the big wave of crisis that will affect nearly everyone is going to be very soon, oh heck, I hope we all survive this mess: (credit for article links goes to Patrick.net)
How This Crisis Is Different (washingtonpost.com)
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/17/AR2008031702150.html?referrer=emailarticle&ref=patrick.net
It's said that we're in the worst financial crisis since the Great Depression. Maybe. But remember the S&L crisis of the mid-1980s? Or the commercial banking crisis of the late 1980s (from 1988 to 1992, 905 banks failed). Or the 1997-98 Asian financial crisis, which sent South Korea, Indonesia and other countries on a boom-bust rollercoaster? All were frightening. What distinguishes this crisis -- which brought down Bear Sterns over the weekend -- is that it involves the entire financial system, not just depository institutions, and it's more mystifying than any of its predecessors.
Previous financial crises so weakened the banks and savings and loans that they lost their primacy. As recently as 1980, they supplied almost half of all lending -- to companies, consumers and home buyers. Now their share is less than 30 percent. The gap has been filled by "securitization": the bundling of mortgages, credit card debt and other loans into bond-like instruments that are sold to all manner of investors (banks themselves, pension funds, hedge funds, insurance companies).
.....Financial institutions (banks, investment banks, hedge funds and others) are interconnected through networks of buying, selling, borrowing and lending. These require confidence that commitments made will be commitments honored. If confidence collapses, the processes of extending credit for the economy and of trading -- for stocks, bonds, foreign exchange -- may also collapse.
Sub-prime collapse 'beyond the US Federal Reserve'
http://www.news.com.au/story/0,23599,23393912-462,00.html?ref=patrick.net
The crunch bites deeper in the US (news.bbc.co.uk)
http://news.bbc.co.uk/2/hi/business/7302140.stm?ref=patrick.net
Can't Grasp Credit Crisis? Join the Club (nytimes.com)
http://www.nytimes.com/2008/03/19/business/19leonhardt.html?ref=patrick.net
Can't Grasp Credit Crisis? Join the Club (nytimes.com)
http://www.thetrumpet.com/index.php?q=4954.3219.0.0&ref=patrick.net
Bernanke's dollar sinks worldwide (news.yahoo.com)
http://news.yahoo.com/s/ap/20080313/ap_on_bi_ge/diving_dollar?ref=patrick.net
Greenspanspeak (solari.com)
http://www.solari.com/blog/?p=703&ref=patrick.net
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