Comments on: Lunchtime Links 8-5 Option ARMageddon Tue, 14 Oct 2014 13:06:34 +0000 hourly 1 By: Adam Fri, 07 Aug 2009 15:05:26 +0000 Regarding the debt/inflation question – debt may have to be rolled over at higher costs, but what’s the alternative? Is the gov gonna stand by and watch as total collapse ensues? Run balanced budgets by raising taxes and slashing services? Seems unlikely. Has that ever worked to solve a problem near this size? I’m honestly asking, don’t know.

The scale of our debt seems too big to be solved by traditional means. Maybe they can postpone the day of reckoning another 5-10 years, but it seems inevitable. Also, wouldn’t a dollar collapse have the same basic effect as QE-based inflation?

By: molecule Fri, 07 Aug 2009 02:00:06 +0000 “The problem with the idea of governments inflating their way out of a debt burden is that it does not work. Absent episodes of hyper-inflation, it is a strategy that has never worked.”

This will not stop them from trying.
It was tried repeatedly in the past and failed. It must have been the only politically expedient solution available to govts. at the time. Watch them try it again.

By: Andrew Wed, 05 Aug 2009 21:44:05 +0000 Pizza Fail: The greasy masses fall through the cracks, but the upper crust stays dry?

By: walkdontrun Wed, 05 Aug 2009 21:01:17 +0000 MUST READ–The debt-inflation myth, debunked by UBS

Absent hyperinflation – case rested. The only outcome possible then must be hyperinflation.

By: Andrew Wed, 05 Aug 2009 15:14:10 +0000 great stuff today.

TWB made a $300M *offer* to CNB, but backed out at the end of last month. Colonial therefore never received any TARP CPP monies. I think that TARP investigation stems from TWB’s dealings with GNMA and not so much from the Colonial angle.

Interesting stuff on GFG, but I’m not sure how much is actually really “news”. When was the last time the FDIC sold a bank without seizing it? Was there a creditable rumor that someone was actually interested in buying GFG straight up? If this was reporting that GFG was going to be seized then wound down after paying out depositors, then THAT would be a story. As it stands, its stating the obvious in such as way so that it seems like news.

And the “prominent hedge fund manager” that is quoted in the story? Needs to get his/her head out of their ass. All that hedge fund manager is admitting is that they haven’t been paying attention until after a bank is closed. FFED, GFG, CORS, CNB have ALL been publicly cited as been undercapitalized (CNB and FFED as merely less than “well capitalized”).

Also… a 0.5bps assesment? Please. That’d be $1 per $20,000 insured. Maybe they mean 50 bps, $1 per $200 insured. Current annual assesments are at least 14 bps, and the last special was at least 5 bps.

Paying 50 bps in a lump sum on insured deposits will also never happen because that would be something in the area of $5B from BAC alone. Not saying it’s not needed, just saying if you hold your breath for it you’ll wake up in the hospital. 5 bps could happen again in the fall, or even 10. Not 50.