November 24th 08, 10:51 PM
From a banker in London:
================================================== ==================
Subject: Citigroup - Gasp! It's true
Date: Mon, 24 Nov 2008 22:08:45 -0000
Well, now we know where $45 billion of the $700 billion have been
allocated.
Not a good evening for confidence as I just watched two hour long
programs on financial crises.
The first was about the overall debt base of the US economy which
pretty much proved that the problem is so huge there is no way of
solving it. To show where it must end if not radically reversed, we
were taken through the Argentine melt-down at the end of the 80s with
the government unable to print enough money to keep up with the
inflation (12,000 p.a.). The country ran out of the security paper
and went bust. It has never recovered in spite of being potentially
rich. Long-term fiscal mismanagement will get you this result. The
US is well down the path.
I was unfamiliar with the importance of the "Social Security Surplus"
in helping to reduce fiscal deficits. The government just steals from
the social security system which still receives more than it has to
pay out. But this surplus in dwindling fast and will soon go negative
and add to the overall deficit which is already 60% financed by the
kindness of strangers (nations that save). Previous big deficits
(WWII) were financed by its citizens buying savings bonds. But the US
has discovered negative saving and financing government bonds with
your credit card doesn't work. Here in the UK, we try to follow what
the rich offspring does, so we are not far behind. It's the "special
relationship". How all the bailouts will be financed is a tomorrow
question. See:
http://www.concordcoalition.org/
The second program was the first in a series based on Niall Ferguson's
new book The Ascent of Money, which traces the 600 year history of
international bond markets largely invented by the Rothschilds to
finance the English against Napoleon. Wars are expensive and have to
be financed. The Confederacy was importantly financed internationally
with cotton (not sub-prime mortgages) backed bonds. But when the
Union captured the port of New Orleans, cotton shipments to England
ceased and there was no more money from this important source. Like
Napoleon when he took off his boots the night before Waterloo, the
could smell defeat.
http://www.niallferguson.com/site/FERG/Templates/Home.aspx?pageid=1
Then this:
The Citigroup rescue came after a weekend of marathon discussions led
by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.
Timothy Geithner, president of the Federal Reserve Bank of New York,
who is being tapped by President-elect Barack Obama as his Treasury
chief also participated.
The 20 billion dollar cash injection by the Treasury Department will
come from the 700 billion dollar financial bailout package. The
capital infusion follows an earlier one - of 25 billion dollars - in
Citigroup in which the government received an ownership stake.
As part of the plan, Treasury and the FDIC will guarantee against the
"possibility of unusually large losses" on up to 306 billion dollars
of risky loans and securities backed by commercial and residential
mortgages.
The Citigroup rescue came after a weekend of marathon discussions led
by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.
Timothy Geithner, president of the Federal Reserve Bank of New York,
who is being tapped by President-elect Barack Obama as his Treasury
chief also participated.
The 20 billion dollar cash injection by the Treasury Department will
come from the 700 billion dollar financial bailout package. The
capital infusion follows an earlier one - of 25 billion dollars - in
Citigroup in which the government received an ownership stake.
As part of the plan, Treasury and the FDIC will guarantee against the
"possibility of unusually large losses" on up to 306 billion dollars
of risky loans and securities backed by commercial and residential
mortgages.
================================================== ===================
End of quoted test.
Jobst Brandt
================================================== ==================
Subject: Citigroup - Gasp! It's true
Date: Mon, 24 Nov 2008 22:08:45 -0000
Well, now we know where $45 billion of the $700 billion have been
allocated.
Not a good evening for confidence as I just watched two hour long
programs on financial crises.
The first was about the overall debt base of the US economy which
pretty much proved that the problem is so huge there is no way of
solving it. To show where it must end if not radically reversed, we
were taken through the Argentine melt-down at the end of the 80s with
the government unable to print enough money to keep up with the
inflation (12,000 p.a.). The country ran out of the security paper
and went bust. It has never recovered in spite of being potentially
rich. Long-term fiscal mismanagement will get you this result. The
US is well down the path.
I was unfamiliar with the importance of the "Social Security Surplus"
in helping to reduce fiscal deficits. The government just steals from
the social security system which still receives more than it has to
pay out. But this surplus in dwindling fast and will soon go negative
and add to the overall deficit which is already 60% financed by the
kindness of strangers (nations that save). Previous big deficits
(WWII) were financed by its citizens buying savings bonds. But the US
has discovered negative saving and financing government bonds with
your credit card doesn't work. Here in the UK, we try to follow what
the rich offspring does, so we are not far behind. It's the "special
relationship". How all the bailouts will be financed is a tomorrow
question. See:
http://www.concordcoalition.org/
The second program was the first in a series based on Niall Ferguson's
new book The Ascent of Money, which traces the 600 year history of
international bond markets largely invented by the Rothschilds to
finance the English against Napoleon. Wars are expensive and have to
be financed. The Confederacy was importantly financed internationally
with cotton (not sub-prime mortgages) backed bonds. But when the
Union captured the port of New Orleans, cotton shipments to England
ceased and there was no more money from this important source. Like
Napoleon when he took off his boots the night before Waterloo, the
could smell defeat.
http://www.niallferguson.com/site/FERG/Templates/Home.aspx?pageid=1
Then this:
The Citigroup rescue came after a weekend of marathon discussions led
by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.
Timothy Geithner, president of the Federal Reserve Bank of New York,
who is being tapped by President-elect Barack Obama as his Treasury
chief also participated.
The 20 billion dollar cash injection by the Treasury Department will
come from the 700 billion dollar financial bailout package. The
capital infusion follows an earlier one - of 25 billion dollars - in
Citigroup in which the government received an ownership stake.
As part of the plan, Treasury and the FDIC will guarantee against the
"possibility of unusually large losses" on up to 306 billion dollars
of risky loans and securities backed by commercial and residential
mortgages.
The Citigroup rescue came after a weekend of marathon discussions led
by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke.
Timothy Geithner, president of the Federal Reserve Bank of New York,
who is being tapped by President-elect Barack Obama as his Treasury
chief also participated.
The 20 billion dollar cash injection by the Treasury Department will
come from the 700 billion dollar financial bailout package. The
capital infusion follows an earlier one - of 25 billion dollars - in
Citigroup in which the government received an ownership stake.
As part of the plan, Treasury and the FDIC will guarantee against the
"possibility of unusually large losses" on up to 306 billion dollars
of risky loans and securities backed by commercial and residential
mortgages.
================================================== ===================
End of quoted test.
Jobst Brandt