Is it just me?

[socrattt]

I do appreciate all the insight here! Last night after writing this post I started doing a bit more research and went to bed thinking today may be a very telling day in the markets. In fact so telling that I wanted to put money in some short financial ETF’s like Proshares SKF (of course it was up 20% today). Unfortunately I woke up a bit too late but my instinct was correct. The market has gone on an upswing way too long. The banks can’t hide all this negative information too much longer and at some level we shouldn’t see any stability in either the stock markets or RE markets for sometime.

I agree that the government is looking at the RE markets from a much broader aspect than those strictly focused on Real Estate, so it is hard for many of us to understand the motives here. We can definitely speculate, but their plans are far from obvious. In order for the government to stabilize the markets they are going to have to control the supply, which they have done. There are obvious problems when trying to control supply and demand and we will probably see the ramifications of this within the next 12 months. The banks are going to continue to lose as the government can only do so much. We still have a lot of negative news that will have a much greater impact in my opinion. I think the commercial RE collapse will also cause a wide range of problems for banks. This storm is still brewing, but should take shape within the next 6-12 months as well.

All that said we can only hope hyper-inflation won’t take a dramatic hold of the US Dollar as the Fed doesn’t have the ability to stop it. We are going to need a miracle for these markets to remain sustainable and at this point, I just don’t see that happening.

[aldante]

Fed President had this to say:

Let Insolvent Financial Firms Fail: Fed’s Hoenig Insolvent financial firms must be allowed to fail regardless of their size, and sheltering such “too big to fail” institutions risks making the financial crisis worse, a top Federal Reserve official said Tuesday.

In blunt criticism of the government and his fellow central bankers, Federal Reserve Bank of Kansas City President Thomas Hoenig also said that the design of a $700 billion bank bailout last year had created uncertainty and slowed recovery.

“The United States currently faces economic turmoil related directly to a loss of confidence in our largest financial institutions because policymakers accepted the idea that some firms are just ‘too big to fail.’ I do not,” Hoenig told the Joint Economic Committee of the Congress in prepared remarks.

“Yes, these institutions are systemically important, but we all know that in a market system, insolvent firms must be allowed to fail regardless of their size, market position or the complexity of operations,” said Hoenig, who will be a voter on the Fed’s policy-setting committee next year.

The biggest 19 U.S. banks are being subjected to a battery of so-called stress tests to restore confidence in their soundness, with guidelines on the process due on Friday and the results on May 4.

Stocks fell sharply on Monday amid fear that some of them still face massive losses, as the severe U.S. recession forces loan default rates to continue rising.

Treasury Secretary Timothy Geithner has signaled that no firms will “fail” the stress tests, but Hoenig said this would be a mistake.

“Actions that strive to protect our largest institutions from failure risk prolonging the crisis and increasing its cost,” Hoenig said.

“Of particular concern to me is the fact that the financial support provided to firms considered “too big to fail” provides them a competitive advantage over other firms and subsidizes their growth and profit with taxpayer funds,” he said.

Nodding to anger among ordinary Americans over multi-billion dollar bailouts for rich bankers, Hoenig said some of these firms were simply too complicated, and too well-connected in Washington, for the good of the country.

“These ‘too big to fail’ institutions are not only too big, they are too complex and too politically influential to supervise on a sustained basis without a clear set of rules constraining their actions. When the recession ends, old habits will reemerge,” he said.

[aldante]

Fed President had this to say:

Let Insolvent Financial Firms Fail: Fed’s Hoenig Insolvent financial firms must be allowed to fail regardless of their size, and sheltering such “too big to fail” institutions risks making the financial crisis worse, a top Federal Reserve official said Tuesday.

In blunt criticism of the government and his fellow central bankers, Federal Reserve Bank of Kansas City President Thomas Hoenig also said that the design of a $700 billion bank bailout last year had created uncertainty and slowed recovery.

“The United States currently faces economic turmoil related directly to a loss of confidence in our largest financial institutions because policymakers accepted the idea that some firms are just ‘too big to fail.’ I do not,” Hoenig told the Joint Economic Committee of the Congress in prepared remarks.

“Yes, these institutions are systemically important, but we all know that in a market system, insolvent firms must be allowed to fail regardless of their size, market position or the complexity of operations,” said Hoenig, who will be a voter on the Fed’s policy-setting committee next year.

The biggest 19 U.S. banks are being subjected to a battery of so-called stress tests to restore confidence in their soundness, with guidelines on the process due on Friday and the results on May 4.

Stocks fell sharply on Monday amid fear that some of them still face massive losses, as the severe U.S. recession forces loan default rates to continue rising.

Treasury Secretary Timothy Geithner has signaled that no firms will “fail” the stress tests, but Hoenig said this would be a mistake.

“Actions that strive to protect our largest institutions from failure risk prolonging the crisis and increasing its cost,” Hoenig said.

“Of particular concern to me is the fact that the financial support provided to firms considered “too big to fail” provides them a competitive advantage over other firms and subsidizes their growth and profit with taxpayer funds,” he said.

Nodding to anger among ordinary Americans over multi-billion dollar bailouts for rich bankers, Hoenig said some of these firms were simply too complicated, and too well-connected in Washington, for the good of the country.

“These ‘too big to fail’ institutions are not only too big, they are too complex and too politically influential to supervise on a sustained basis without a clear set of rules constraining their actions. When the recession ends, old habits will reemerge,” he said.

[aldante]

Fed President had this to say:

Let Insolvent Financial Firms Fail: Fed’s Hoenig Insolvent financial firms must be allowed to fail regardless of their size, and sheltering such “too big to fail” institutions risks making the financial crisis worse, a top Federal Reserve official said Tuesday.

In blunt criticism of the government and his fellow central bankers, Federal Reserve Bank of Kansas City President Thomas Hoenig also said that the design of a $700 billion bank bailout last year had created uncertainty and slowed recovery.

“The United States currently faces economic turmoil related directly to a loss of confidence in our largest financial institutions because policymakers accepted the idea that some firms are just ‘too big to fail.’ I do not,” Hoenig told the Joint Economic Committee of the Congress in prepared remarks.

“Yes, these institutions are systemically important, but we all know that in a market system, insolvent firms must be allowed to fail regardless of their size, market position or the complexity of operations,” said Hoenig, who will be a voter on the Fed’s policy-setting committee next year.

The biggest 19 U.S. banks are being subjected to a battery of so-called stress tests to restore confidence in their soundness, with guidelines on the process due on Friday and the results on May 4.

Stocks fell sharply on Monday amid fear that some of them still face massive losses, as the severe U.S. recession forces loan default rates to continue rising.

Treasury Secretary Timothy Geithner has signaled that no firms will “fail” the stress tests, but Hoenig said this would be a mistake.

“Actions that strive to protect our largest institutions from failure risk prolonging the crisis and increasing its cost,” Hoenig said.

“Of particular concern to me is the fact that the financial support provided to firms considered “too big to fail” provides them a competitive advantage over other firms and subsidizes their growth and profit with taxpayer funds,” he said.

Nodding to anger among ordinary Americans over multi-billion dollar bailouts for rich bankers, Hoenig said some of these firms were simply too complicated, and too well-connected in Washington, for the good of the country.

“These ‘too big to fail’ institutions are not only too big, they are too complex and too politically influential to supervise on a sustained basis without a clear set of rules constraining their actions. When the recession ends, old habits will reemerge,” he said.

[aldante]

Fed President had this to say:

Let Insolvent Financial Firms Fail: Fed’s Hoenig Insolvent financial firms must be allowed to fail regardless of their size, and sheltering such “too big to fail” institutions risks making the financial crisis worse, a top Federal Reserve official said Tuesday.

In blunt criticism of the government and his fellow central bankers, Federal Reserve Bank of Kansas City President Thomas Hoenig also said that the design of a $700 billion bank bailout last year had created uncertainty and slowed recovery.

“The United States currently faces economic turmoil related directly to a loss of confidence in our largest financial institutions because policymakers accepted the idea that some firms are just ‘too big to fail.’ I do not,” Hoenig told the Joint Economic Committee of the Congress in prepared remarks.

“Yes, these institutions are systemically important, but we all know that in a market system, insolvent firms must be allowed to fail regardless of their size, market position or the complexity of operations,” said Hoenig, who will be a voter on the Fed’s policy-setting committee next year.

The biggest 19 U.S. banks are being subjected to a battery of so-called stress tests to restore confidence in their soundness, with guidelines on the process due on Friday and the results on May 4.

Stocks fell sharply on Monday amid fear that some of them still face massive losses, as the severe U.S. recession forces loan default rates to continue rising.

Treasury Secretary Timothy Geithner has signaled that no firms will “fail” the stress tests, but Hoenig said this would be a mistake.

“Actions that strive to protect our largest institutions from failure risk prolonging the crisis and increasing its cost,” Hoenig said.

“Of particular concern to me is the fact that the financial support provided to firms considered “too big to fail” provides them a competitive advantage over other firms and subsidizes their growth and profit with taxpayer funds,” he said.

Nodding to anger among ordinary Americans over multi-billion dollar bailouts for rich bankers, Hoenig said some of these firms were simply too complicated, and too well-connected in Washington, for the good of the country.

“These ‘too big to fail’ institutions are not only too big, they are too complex and too politically influential to supervise on a sustained basis without a clear set of rules constraining their actions. When the recession ends, old habits will reemerge,” he said.

[aldante]

Fed President had this to say:

Let Insolvent Financial Firms Fail: Fed’s Hoenig Insolvent financial firms must be allowed to fail regardless of their size, and sheltering such “too big to fail” institutions risks making the financial crisis worse, a top Federal Reserve official said Tuesday.

In blunt criticism of the government and his fellow central bankers, Federal Reserve Bank of Kansas City President Thomas Hoenig also said that the design of a $700 billion bank bailout last year had created uncertainty and slowed recovery.

“The United States currently faces economic turmoil related directly to a loss of confidence in our largest financial institutions because policymakers accepted the idea that some firms are just ‘too big to fail.’ I do not,” Hoenig told the Joint Economic Committee of the Congress in prepared remarks.

“Yes, these institutions are systemically important, but we all know that in a market system, insolvent firms must be allowed to fail regardless of their size, market position or the complexity of operations,” said Hoenig, who will be a voter on the Fed’s policy-setting committee next year.

The biggest 19 U.S. banks are being subjected to a battery of so-called stress tests to restore confidence in their soundness, with guidelines on the process due on Friday and the results on May 4.

Stocks fell sharply on Monday amid fear that some of them still face massive losses, as the severe U.S. recession forces loan default rates to continue rising.

Treasury Secretary Timothy Geithner has signaled that no firms will “fail” the stress tests, but Hoenig said this would be a mistake.

“Actions that strive to protect our largest institutions from failure risk prolonging the crisis and increasing its cost,” Hoenig said.

“Of particular concern to me is the fact that the financial support provided to firms considered “too big to fail” provides them a competitive advantage over other firms and subsidizes their growth and profit with taxpayer funds,” he said.

Nodding to anger among ordinary Americans over multi-billion dollar bailouts for rich bankers, Hoenig said some of these firms were simply too complicated, and too well-connected in Washington, for the good of the country.

“These ‘too big to fail’ institutions are not only too big, they are too complex and too politically influential to supervise on a sustained basis without a clear set of rules constraining their actions. When the recession ends, old habits will reemerge,” he said.

[jpinpb]

Hoenig has my vote. Everything he said is true. Brave to come forward and even say it.

[jpinpb]

Hoenig has my vote. Everything he said is true. Brave to come forward and even say it.

[jpinpb]

Hoenig has my vote. Everything he said is true. Brave to come forward and even say it.

[jpinpb]

Hoenig has my vote. Everything he said is true. Brave to come forward and even say it.

[jpinpb]

Hoenig has my vote. Everything he said is true. Brave to come forward and even say it.

[patientrenter]

And Hoenig has my vote too, but what’s really odd is how few of our most eminent economic and financial leaders are in this camp.

Recently, I was very surprised when I watched the KCRW broadcast of a presentation by Alex Blumberg and Adam Davidson, hosts of an excellent series of shows on this crisis. They understand all the fraud, and the overindebtedness, and all that, but yet they sounded convinced of the “too big to fail” mantra.

When asked why, they lapsed into “end of the world” cliches. I still don’t understand why you can’t announce a failure with full guarantees of all depositors and counterparties. That would avoid a run. You’d have to identify up front all the banks that would be saved, to avoid them collapsing in a bank run. But that’s not so hard. Just identify the weakest 6 of the top 19 banks, and announce all at once that they will be wound down over some time, and the others will survive. It’s the big bang method, but sometimes that’s the right way.

And then legislate that “if you’re too big to fail, you’re too big to exist” for the long-term future.

I think some very smart and interested people have convinced some slightly less smart and less interested people of TBTF, and they in turn are convincing not very smart and not so interested people. It’s been a very successful strategy, but we, the dumb public, can ask directly what alternatives to TBTF have been pursued, and what exactly they are, and what the killer problems are. It wouldn’t shock me if that would show us all that the killer problems could be solved. Some people don’t want them solved.

[patientrenter]

And Hoenig has my vote too, but what’s really odd is how few of our most eminent economic and financial leaders are in this camp.

Recently, I was very surprised when I watched the KCRW broadcast of a presentation by Alex Blumberg and Adam Davidson, hosts of an excellent series of shows on this crisis. They understand all the fraud, and the overindebtedness, and all that, but yet they sounded convinced of the “too big to fail” mantra.

When asked why, they lapsed into “end of the world” cliches. I still don’t understand why you can’t announce a failure with full guarantees of all depositors and counterparties. That would avoid a run. You’d have to identify up front all the banks that would be saved, to avoid them collapsing in a bank run. But that’s not so hard. Just identify the weakest 6 of the top 19 banks, and announce all at once that they will be wound down over some time, and the others will survive. It’s the big bang method, but sometimes that’s the right way.

And then legislate that “if you’re too big to fail, you’re too big to exist” for the long-term future.

I think some very smart and interested people have convinced some slightly less smart and less interested people of TBTF, and they in turn are convincing not very smart and not so interested people. It’s been a very successful strategy, but we, the dumb public, can ask directly what alternatives to TBTF have been pursued, and what exactly they are, and what the killer problems are. It wouldn’t shock me if that would show us all that the killer problems could be solved. Some people don’t want them solved.

[patientrenter]

And Hoenig has my vote too, but what’s really odd is how few of our most eminent economic and financial leaders are in this camp.

Recently, I was very surprised when I watched the KCRW broadcast of a presentation by Alex Blumberg and Adam Davidson, hosts of an excellent series of shows on this crisis. They understand all the fraud, and the overindebtedness, and all that, but yet they sounded convinced of the “too big to fail” mantra.

When asked why, they lapsed into “end of the world” cliches. I still don’t understand why you can’t announce a failure with full guarantees of all depositors and counterparties. That would avoid a run. You’d have to identify up front all the banks that would be saved, to avoid them collapsing in a bank run. But that’s not so hard. Just identify the weakest 6 of the top 19 banks, and announce all at once that they will be wound down over some time, and the others will survive. It’s the big bang method, but sometimes that’s the right way.

And then legislate that “if you’re too big to fail, you’re too big to exist” for the long-term future.

I think some very smart and interested people have convinced some slightly less smart and less interested people of TBTF, and they in turn are convincing not very smart and not so interested people. It’s been a very successful strategy, but we, the dumb public, can ask directly what alternatives to TBTF have been pursued, and what exactly they are, and what the killer problems are. It wouldn’t shock me if that would show us all that the killer problems could be solved. Some people don’t want them solved.

[patientrenter]

And Hoenig has my vote too, but what’s really odd is how few of our most eminent economic and financial leaders are in this camp.

Recently, I was very surprised when I watched the KCRW broadcast of a presentation by Alex Blumberg and Adam Davidson, hosts of an excellent series of shows on this crisis. They understand all the fraud, and the overindebtedness, and all that, but yet they sounded convinced of the “too big to fail” mantra.

When asked why, they lapsed into “end of the world” cliches. I still don’t understand why you can’t announce a failure with full guarantees of all depositors and counterparties. That would avoid a run. You’d have to identify up front all the banks that would be saved, to avoid them collapsing in a bank run. But that’s not so hard. Just identify the weakest 6 of the top 19 banks, and announce all at once that they will be wound down over some time, and the others will survive. It’s the big bang method, but sometimes that’s the right way.

And then legislate that “if you’re too big to fail, you’re too big to exist” for the long-term future.

I think some very smart and interested people have convinced some slightly less smart and less interested people of TBTF, and they in turn are convincing not very smart and not so interested people. It’s been a very successful strategy, but we, the dumb public, can ask directly what alternatives to TBTF have been pursued, and what exactly they are, and what the killer problems are. It wouldn’t shock me if that would show us all that the killer problems could be solved. Some people don’t want them solved.

[Author]

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