Wednesday, September 23, 2009

Davos on the Edge / Market Thread 9.24.2009

  • CORRUPTION: Reverse-Insurance?! (FDIC)
  • Get ready for this: officials may soon ask banks to bail out the government
  • Derivatives Could Cause Another Meltdown: Mobius (Video on page)
  • Income for the Masses Not Keeping Up... For 40 Years (Chart on page)
  • Mark Faber Part 1 Video (H/T iDoctor)
  • Mark Faber Part 2 Video (H/T iDoctor)
  • Mark Faber Part 3 Video (H/T iDoctor)
  • Shocker: Most Traffic Growth To UK News Sites Is Coming From U.S.

Economy

CORRUPTION: Reverse-Insurance?! (FDIC)

Let me pose a question to you.

Let's say you own a $200,000 house free and clear.

Let's further say that you would like fire insurance. Just in case you are a klutz in the kitchen, for example.

So you sit down and write yourself a fire insurance policy. You promise to pay yourself $200,000 to rebuild your house if it burns to the ground.

You then put your "insurance policy" in the safe and pat yourself on the back - you're insured!

Now, you want to re-do your kitchen and add a pool, so you go to the bank to get a mortgage to finance those improvements.

The mortgage company would accept your self-written policy as proof of insurance, right?

Oh wait - they'd call that fraud?

Well gee, what's this then?

Get ready for this: officials may soon ask banks to bail out the government


[Video on page]

Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.

Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.

The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.

A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.

“It’s a nice irony,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting company. “Like so much of this crisis, this is an issue that involves the least worst options.”

Bankers and their lobbyists like the idea because it is more attractive than the alternatives: yet another across-the-board emergency assessment on them, or tapping an existing $100 billion credit line to the Treasury.

Derivatives Could Cause Another Meltdown: Mobius (Video on page)

Income for the Masses Not Keeping Up... For 40 Years (Chart on page)

Mark Faber Part 2 Video (H/T iDoctor)

[video:http://www.youtube.com/watch?v=UfuiNjvH9_c]

Mark Faber Part 2 Video (H/T iDoctor)

[video:http://www.youtube.com/watch?v=gdBIRD87-Ao]

Mark Faber Part 3 Video (H/T iDoctor)

[video:http://www.youtube.com/watch?v=kA5dfcMNtCo]

Mark Faber Stocks 2 Video (H/T iDoctor)


Shocker: Most Traffic Growth To UK News Sites Is Coming From U.S.

Brit news sites from across the pond is growing nearly seven times as fast as that domestically. (To view a breakdown chart, click here.)Foreign Visitors To UK News Sites