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Thursday, October 23, 2008

Bernanke Bailouts Not Working, Banks Hoarding

Click on the chart to marvel at the carnage.

Bottom line, Bernanke pumps in liquidity and the banks continue to hoard it. The Bernanke bailouts are not working, yet...

I'm encouraged by some of the recent improvements in the credit markets, but it isn't enough.

Data: Federal Reserve Bank of St. Louis.


Unknown said...

I am not a gold bug, but the NEXT step is that the fools WILL start printing...just like every other collapse in history. Overnight long trades are devastating "traders", and gold is the least of most people's problems.

Even worse, guys like me might get long for a trade here and there, but this is not a "fade" opportunity, as all the longs form yesterday are wetting their pants.

Anonymous said...

Ben are you mad that your precious "oversold" DOW is going down again?

williambanzai7 said...

Voodoo Trade
(Voodoo Chile (slight return), Jimi Hendrix)

Well, I stand up next to the markets
And I chop em down with the edge of my hand.
Well, I stand up next to the markets,
Chop em down with the edge of my hand.
Well, I pick up all the pieces one by one,
Might even raise just a little cash.
Cause Im a Voodoo Trade,
Lord knows Im a Voodoo Trade, baby.

I didnt mean to take up all your sweet time,
Ill give it right back to you one of these trading days.
I said I didnt mean to take up all your sweet time,
Ill give it right back one of these black trading days.
And if I dont meet you no more in this financial world
Then ill, Ill meet you in the next one and dont be late, dont be late.
Cause Im a Voodoo Trade, Voodoo Trade,
Lord knows Im a Voodoo Trade, hey hey hey.
Im a Voodoo Trade, baby.

Doug said...

Of course the banks are hoarding, there is nobody to lend money to thats a reasonable risk.

There was way too much credit and way too many banks willing to provide it. Now that lending criteria is becoming legitimate, there will literally be a huge reduction in the amount of loans being made.

There needs to be a huge, huge contraction in the size of the banking industry, and the amount of banks out there. Banks need to fail, its that simple.

Unknown said...

There is confusion here (at least for me). The Minnesota Fed has released a report:

(link to original paper is in this post, some discussion in comments)

(discussion continues)

Anonymous said...

Should top Management be responsible to the public company performance?

Anonymous said...

There goes Ben again using the expression "gold bugs and their tin hats"
In a depressionary deflation like this you need physical gold IN YOUR POSSESSION because of the likelihood of DEFAULT. That's got nothing to do with hyper-inflation.
Ben I have made money following you. APPL puts at 180. Great call.
When you were saying recently it was BUY, BUY, BUY time I bought ES at 904 and sold on the way down again at 975. Otherwise I am looking to short everything in sight ! You can play this depression brilliantly and make a fortune, but what good is it if your bank, money market fund or trading account defaults ???!!! The banks are INSOLVENT with a $180TRILLION mountain of junk that no pump is big enough to inflate.
Gold at over 1000 cannot be a bubble if the stuff is virtually unobtainable. Pick up the phone and call any bullion dealer, and see what their response is.
The FINAL bubble is one that is happening under everyone's nose and is not recognised.......THE US DOLLAR BUBBLE !
The whole world gets sucked in looking for a safe haven.
A lot of them even get out of gold which is going DOWN and therefore can't be a safe haven !
The sheep have been brilliantly shepherded into the corral. They can't get gold or silver even if they want it, so the next best thing is to buy Treasury Bills (which they will learn to their cost are about as good as a cardboard box) or a gold ETF, which will get taken from them ...although they will be compensated in useless paper.
The last men and women standing after the US Dollar bubble POPS as do all bubbles, ...will be the gold and silver bugs. We have the real thing in our possession. The real thing that you can't get anywhere any more.......
We are worth more than all the banks put together.

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