You Can't Eat Gold, And You Can't Drink Crude
I think if I was a Lehman's employee (or ex-employee to be more accurate) right now I'd be checking my underarm for signs of the kind of news that not even your best friend passes on.
I'd be asking "why were/are the government prepared to bail out everybody else and not us?"
I think that the answer is that having already stumped up the cash to bail-out Fannie & Freddie, the government thought "we can't keep doing this, enough is enough"
Lehman's were in the wrong place at the wrong time. The subsequent down draught from letting them go to the wall was so severe that it seems that the US government reconsidered, and are currently looking to take on board just about every failure and hard luck story going.
The collapse of the US economy is at stake (and pretty much by default that of the rest of the world). Who is going to foot the bill? From where I'm sitting it looks like the US banks losses may well be dwarfed by the future losses incurred by the US homeowners who aren't defaulting on their mortgages.
And at some point not too far away this has to have a serious very impact on consumer spending. And the US economy is driven by consumer spending.
If you want to pull your money out of the US economy where do you put it when even the banks aren't safe anymore?
Precious metals and crude seem to be flavour of the week, followed by grains. Yet these are driven by a strong world economy, if and when the US economy goes down the pan, the world economy goes with it.
The US government appear to have got themselves caught between a rock and a hard place, pretty much now obliged to take on any bank failure that pops up. How many independent US banks will there by left by Christmas?
And if more banks continue to fail how much more pain will US homeowners have to endure? It seems like a no-brainer to me that consumer spending will be slashed. And that spells doom and gloom for the rest of the world too.
I'd be asking "why were/are the government prepared to bail out everybody else and not us?"
I think that the answer is that having already stumped up the cash to bail-out Fannie & Freddie, the government thought "we can't keep doing this, enough is enough"
Lehman's were in the wrong place at the wrong time. The subsequent down draught from letting them go to the wall was so severe that it seems that the US government reconsidered, and are currently looking to take on board just about every failure and hard luck story going.
The collapse of the US economy is at stake (and pretty much by default that of the rest of the world). Who is going to foot the bill? From where I'm sitting it looks like the US banks losses may well be dwarfed by the future losses incurred by the US homeowners who aren't defaulting on their mortgages.
And at some point not too far away this has to have a serious very impact on consumer spending. And the US economy is driven by consumer spending.
If you want to pull your money out of the US economy where do you put it when even the banks aren't safe anymore?
Precious metals and crude seem to be flavour of the week, followed by grains. Yet these are driven by a strong world economy, if and when the US economy goes down the pan, the world economy goes with it.
The US government appear to have got themselves caught between a rock and a hard place, pretty much now obliged to take on any bank failure that pops up. How many independent US banks will there by left by Christmas?
And if more banks continue to fail how much more pain will US homeowners have to endure? It seems like a no-brainer to me that consumer spending will be slashed. And that spells doom and gloom for the rest of the world too.
