Thread: A note of caution for those with deposits in US Banks

^Because in your world, you know sooooo much more being 10000 miles away about Icelandic banking than a Icelandic customer exiting an Icelandic bank in Reykjavik.

I see. What a wonderful world Butterflyworld must be.

^ and of course you are currently in Iceland to interview that very same person

you have been caught so many times twisting facts and reality, a whole thread could be dedicated to you

Originally Posted by Butterfly

^ and of course you are currently in Iceland to interview that very same person

No, Associated Press did. They are a news agency and they do that type of thing. I am surprised you have never heard of them.

REYKJAVIK, Iceland (AP) — This volcanic island near the Arctic Circle is on the brink of becoming the first "national bankruptcy" of the global financial meltdown.
Home to just 320,000 people on a territory the size of Kentucky, Iceland has formidable international reach because of an outsized banking sector that set out with Viking confidence to conquer swaths of the British economy — from fashion retailers to top soccer teams.

The strategy gave Icelanders one of the world's highest per capita incomes. But now they are watching helplessly as their economy implodes — their currency losing almost half its value, and their heavily exposed banks collapsing under the weight of debts incurred by lending in the boom times.

"Everything is closed. We couldn't sell our stock or take money from the bank," said Johann Sigurdsson as he left a branch of Landsbanki in downtown Reykjavik.

Originally Posted by Butterfly

you have been caught so many times twisting facts and reality, a whole thread could be dedicated to you

As this is a false statement, I will adopt the Clint Eastwood approach: Go ahead, make my day.

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...A thumping $29BN third quarter loss at Fannie Mae!

Fannie Mae posts record $29 billion loss

NEW YORK (Reuters) - Fannie Mae, the largest provider of funding for U.S. residential mortgages, on Monday said it lost a record $29 billion (18.4 billion pounds) in the third quarter as the company wrote down a tax-related asset that has its buoyed capital.

The quarterly loss is the fifth consecutive for the Washington-based mortgage finance company that has been operating under a government conservatorship since September.

Fannie Mae in October warned it would write down "substantially all" of its deferred tax assets, which had become a controversial addition to capital as losses mounted. Deferred tax assets can be used to offset future taxes, but only if the company can show it will return to profitability.

Credit expenses soared to $9.2 billion in the quarter due to deteriorating mortgage credit conditions and as home prices declined, the company said in a statement.
Fannie Mae's loss equaled $13 per share, compared with a loss of $1.4 billion, or $1.56 per share a year earlier. The company said it expects a significant loss for the fourth quarter if downward trends in U.S. housing and financial markets continue.

Further losses for the company this quarter mean the government may have to inject billions of dollars of capital to help the company maintain routine operations. The government pledged to keep a positive level of shareholders equity.

Stockholders equity fell to $9.3 billion in the third quarter from $44 billion at the end of 2007. The figure may be negative by December 31, the company said.
Fannie Mae and rival Freddie Mac own or guarantee nearly half of all U.S. residential mortgages.

Equity investors, while nearly wiped out under the conservatorship, have been eager to see if the regulator will instruct the companies to sacrifice profit for bigger volumes in their mortgage guarantee and investment businesses. Both have been given the room to expand portfolios by a combined $200 billion through 2009, but they have been slow to follow through as their funding costs have risen.

Fannie Mae posts record $29 billion loss | Reuters

Its funny how these companies keep the real losses back to announce after they have been nationalised. I am sure that the US taxpayers are delighted with the arrangement...

Horrific days for news coming out of the US. GM, Ford, Chrysler, AIG, Goldman Sachs, Fannie May......Its absolutley awful but for some reason today(the chinese stimulus package i think) the market is more or less unchanged

^Quite, I trust that all the US taxpayers are dusting off their chequebooks, as there are some large bills to pay!

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Nov. 10 (Bloomberg) -- General Motors Corp. plummeted as much as 31 percent and moved toward its lowest level in 62 years after a Deutsche Bank AG analyst downgraded the shares, saying they may be worthless in a year.

``Even if GM succeeds in averting a bankruptcy, we believe that the company's future path is likely to be bankruptcy-like,'' Deutsche Bank's Rod Lache wrote today in a note. The New York analyst recommended selling the shares and cut his 12-month price target to zero. He previously advised holding the stock.

The decline shows mounting pessimism that a turnaround will succeed at the largest U.S. automaker amid the credit crisis and the worst sales market in at least 15 years. GM is petitioning the U.S. government for aid after saying last week it may not have enough cash to operate this year. A bankruptcy typically wipes out the value of a company's shares.

Barclays Capital and Buckingham Research Group cut their price targets for GM to $1.

Continued here:

Bloomberg.com: Worldwide

Target price? More like Target cost to 6-pack-Joe.....

Circuit City seeks bankruptcy protection amid pressure from vendors ahead of the holidays


RICHMOND, Va. (AP) -- Circuit City Stores Inc. filed for bankruptcy protection Monday, heading into the busy holiday season hoping the move will help the nation's second-biggest electronics retailer survive.

The company said it made the filing because it was facing pressure from vendors who threatened to withhold products during the holiday period. The company also said it cut 700 more jobs at its headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.


Circuit City filed for Chapter 11 protection, which will allow it to keep operating while it develops a reorganization plan. Its Canadian operations also filed for similar protection.

In court documents, Chief Financial Officer Bruce H. Besanko cited three factors: erosion of vendor confidence, decreased liquidity and the global economic crisis.
"Without immediate relief, the company is concerned that it will not receive goods for Black Friday and the upcoming holiday season, which could cause irreparable harm to the company and its stakeholders," Besanko said in the filing.
Shares in Richmond, Va.-based Circuit City fell 14 cents, or about 56 percent, to 11 cents on Monday before being halted.

Continued here:

Circuit City files for bankruptcy protection: Financial News - Yahoo! Finance

Oops, second biggest electical retailer eh?

Not any more...

And we haven't even factored in unemployment yet:

FRANKFURT (Reuters) - Some 40,000 Deutsche Post (DPWGn.DE: Quote, Profile, Research, Stock Buzz) in the United States are at risk as the group steps up plans to turn round its loss-making DHL express delivery company there, a German newspaper report said on Sunday.

Citing internal sources, the Frankfurter Allgemeine Sonntagszeitung (FAS) said of the total, 20,000 of jobs were threatened directly at Deutsche Post's U.S. express unit and the other half at U.S. partner firms.

More at:

Deutsche Post's U.S. plans threaten 40,000 jobs: report | Reuters

The noose tightens around everyone, corporate, Government and individuals alike....

^^^^^ All this begs the question as to why China is bothering to attempt to stimulate their economy when there is nobody in America or Europe with a fooking carrot to spend anyway.

^True enough, but they have all those worthless USD notes to spray around, so why not?

I just got a e mail from the company I work for telling me starting from this month we are going to pay you in USD, I am happy as they have also given me a pay rise as well and the way the exchange rate is at the moment it means a extra 10,000 baht a day. So what will the future hold, am I going to be woarse off in the near future ?
As I am sure the company hasnt done it for my benifit

Originally Posted by Rigger

I just got a e mail from the company I work for telling me starting from this month we are going to pay you in USD, I am happy as they have also given me a pay rise as well and the way the exchange rate is at the moment it means a extra 10,000 baht a day. So what will the future hold, am I going to be woarse off in the near future ?
As I am sure the company hasnt done it for my benifit

I suppose its insurance as I imagine the companies contract is written in $USs.

Originally Posted by Spin

^^^^^ All this begs the question as to why China is bothering to attempt to stimulate their economy when there is nobody in America or Europe with a fooking carrot to spend anyway.

I believe China is sinking their money into infrastructure rather than propping up failed banks and car manufacturers.

serious question.....what's the worst that could have happened if the feds allowed AIG to fail?

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....Has he been reading my thread?

Nov. 12 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

``Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards,'' Paulson said today in a speech at the Treasury in Washington. ``This is creating a heavy burden on the American people and reducing the number of jobs in our economy.''

Paulson's remarks are an acknowledgement that the pitch he made to Congress for the bailout hasn't delivered what was promised. Paulson sold the rescue plan as a way to rid bank balance sheets of illiquid mortgage assets, and he may encounter resistance from Congress for the remaining $350 billion in TARP funds after using most of the first half to buy bank stakes.

Continued here:

Bloomberg.com: Worldwide

Oh dear, Paulson thinks that $350BN will solve the impending credit card meltdown? Well, I suppose he has form - he thought that the other $350BN would tackle the mortgage crisis!

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GM, Ford Chrysler Should Get $25 Billion From TARP, Frank Says

By Dawn Kopecki
Nov. 12 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC would get $25 billion in additional aid from the Treasury's Troubled Asset Relief Program under a proposal by House Financial Services Committee Chairman Barney Frank.

Legislation is needed to authorize the Treasury to use part of its $700 billion rescue fund for the auto industry, Frank said today.

``It will be written in a way that we are protected'' and that ensures automakers cannot use the money ``imprudently,'' Frank, a Massachusetts Democrat, told reporters in Washington. Frank said they were still working on details of the plan.

Bloomberg.com: Worldwide

``It will be written in a way that we are protected'' and that ensures automakers cannot use the money ``imprudently,'' Frank, a Massachusetts Democrat, told reporters in Washington.

Oh - thats so funny I should use it in my signature for the next year!

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RESCUE EFFORTS AT RISK

Elsewhere, some efforts to cure both national economies and companies ailing from the credit crisis looked like they were in danger on Wednesday.

The International Monetary Fund withheld official backing for a $6 billion bailout plan for Iceland, the Financial Times reported, putting loans to the North Atlantic country at risk.

From:

Paulson backs off asset plan; crisis deals at risk | U.S. | Reuters

Oh dear, it could get a bit lonely up there this winter....

so paulson's changing his plan again? the mgmt of this crisis is starting to remind me of the enron collapse....yeah, things were bad, but there really was no reason for it to go under....except for incompetence.

And now, back to the big one - the one that all along I have said will be the one to bring the US house of cards down:

Citi's Desperate Straits - Seeking Alpha

America, we have a problem. Citigroup (C) is the largest bank in America, with a balance sheet of over $2 trillion -- and it's also the most dysfunctional. Since Vikram Pandit took over, Citi has lost not only $20 billion but also more than 70% of its market capitalization, making it now worth significantly less than, say, Genentech (DNA). Cue major board-level squabbles:

The board of Citigroup Inc. is growing increasingly dissatisfied with the financial giant's performance, and some directors are considering replacing Sir Win Bischoff as chairman...

The possible replacement of Sir Win comes as the New York company's board is adopting an increasingly assertive stance toward overseeing Chief Executive Officer Vikram Pandit and his tightknit team of executives. Those executives took power last December after Citigroup's previous CEO, Charles Prince, stepped down amid mounting losses. Some directors have grown concerned that Sir Win, who is based in London, hasn't been exercising adequate oversight...

Over the summer, several directors complained to Mr. Pandit that he hadn't adequately kept them in the loop about his plans. In recent months, the board has been holding meetings twice a month and trying to be more assertive about supervising management decisions. That change has irked some Citigroup executives, who said the board's involvement in the negotiations to buy Wachovia Corp. slowed the process and gave Wells Fargo & Co. time to re-emerge with a superior offer.

So the board's unhappy with management, management's unhappy with the board, and, to top it all off, the chairman now looks like he's going to be ousted in a high-level coup. This would be farcical if it wasn't so tragic.

Back in June, I was already worried about Citi being too big to rescue -- and that was before the TARP even existed, let alone was divvied up among dozens of different institutions. Citi closed on Wednesday at $9.64 a share -- a level which prices in a very high probability that the stock will go all the way to zero.

Citi might well turn out to be Hank Paulson's largest and biggest headache. There's no one he can sell it to -- it's far too big already. Which means that Paulson's only real option, if things deteriorate much further from here, is nationalization. Bits of it could be sold, at a price -- the retail bank to Santander, perhaps; other bits to JP Morgan (JPM) or Goldman Sachs (GS) -- but the losses to the taxpayer would be enormous, and the disruption associated with breaking Citi up and then trying to integrate the pieces in the middle of a major financial crisis would likely be devastating to the economy.

The one option being mulled right now -- replacing Win Bischoff with Dick Parsons -- is clearly taken straight from the deckchairs-on-the-Titanic playbook. Parsons, remember, is the man about whom Joe Nocera said that "all his professional life, he's wanted to be seen as someone who never seems to break a sweat". In any case, Bischoff isn't the problem. The problem is that Vikram Pandit gave himself altogether too much time to get smaller, and then decided his best chance at salvation was to get bigger -- by buying Wachovia. Now, it's too late: the die has been cast. Will Citi buy Chevy Chase Bank? It really doesn't make any difference either way.

In rough seas, it helps to be big and heavy -- up to the point at which it helps to be smaller and lighter. Citi is the biggest and heaviest ship in a storm of unprecedented magnitude, she's creaking badly, and there's nothing the captain can do about it: You can't fix a vessel like that in the middle of a hurricane. All you can do is hold on tight, and pray.

Henry Paulson just said live on Bloomberg tv, he just said "today, we have stabilised the financial companies and banks not only here in the US but around the world".

^I am minded to the following statement (talking about how they came to the $700BN figure for the bailout) when it comes to anything that Mr Paulson says:

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Quoted from here:

Bad News For The Bailout - Forbes.com

And posted here:

https://teakdoor.com/us-domestic-issu...tml#post799609

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The boss of struggling US car firm Chrysler has warned that it would be "very difficult" for the company to survive without government support.

Bob Nardelli's comments come as Chrysler and fellow "Big Three" US car firms Ford and General Motors (GM) seek a total $25bn (£17bn) in federal aid.

House Speaker and leading Democrat Nancy Pelosi said this week that she wants Congress to approve these funds.

Chrysler, Ford and GM have all been hit by falling US sales and growing losses.

Equity stake?

Mr Nardelli said that while Chrysler "cannot assume we are going to get financial assistance", he said that if it was forthcoming, the government would likely take an equity stake.

Whether state aid is given to the three firms is complicated by the change in US presidency, which will be completed when Barack Obama is sworn in on 20 January.

However, most analysts expect the firms to get some form of financial assistance at least by the spring, saying it is highly unlikely that President-elect Obama will want to see any of the country's iconic carmakers fail so soon into his presidency.

Chrysler, GM and Ford have already received support from President Bush, who at the start of October signed legislation that gives them access to $25bn of cheap government-backed loans to help them develop less-polluting cars.

Ms Pelosi has suggested that $25bn for the three carmakers could come from the $700bn bail-out package for the financial sector.

However US Treasury Sectary Henry Paulson has appeared to rule out such a move, saying the funds are only for financial firms.

Job cuts

Last month Chrysler announced thousands of job cuts as it continues efforts to establish a firmer financial footing.

It said it would cut a quarter of its 18,500 white collar positions and 1,825 manufacturing jobs.

Mr Nardelli said at the time that the US car industry was facing "truly unimaginable times".

BBC NEWS | Business | Chrysler calls for cash lifeline

'Unimaginable times' to all those that didn't consider and imagine it a year ago...