Germany's Teetering Banks

Business Week ^ | JUNE 19, 2002 | By David Fairlamb

[DeaconBenjamin]

May 16 was a day that customers of Bank f

[DeaconBenjamin]

German banks are going under, corporate bankruptcies are expected to increase by 40 percent, and the Euro is appreciating against the dollar? What does that say about the dollar?

[AAABEST]

What does that say about the dollar?

There's way to much bad news out there. Allow me to piss everyone off with my rampant pessimism, I'm in a bad mood today so please indulge me.

Oil Prices climbing, brings cost of everything up.

All steel becoming more expensive due to tariffs, brings cost of everything up.

Deficit spending by bloating government and war costs.

Tech market loses nearly 75% of it's value. This is a real figure, not one I made up.

Bankruptcy rate climing quickly, accounts receivable are assets you know.

Personal and government debt rising sharply.

Surplus already spent by our political whores on both sides of the aisle.

Government growing nearly out of control. Free market types have to love that, especially when we spend it on great American ideals such as paying multi-millionaire farm-ops not to grow food.

Ponder this. Every time the NASDAQ loses 15 points, it drops over 1%. Today it lost 2% of it's value.

I don't know much about economics but I know a little about finance. The fed keeps dropping rates but the lenders rates stay the same. No, there is no evil banking conspiracy. They can't afford to out bid each other because they're hurting. Some will fold.

Have I cheered anyone up yet.

[Dead Dog]

And there is no safe place to pot your money. Beans, Bullets, Property, and pay off debts (if you can).

I'm happy, It's almost Beer:30!

[gohabsgo]

How does this make all you liberals feel about REALLY picking
up the education, medical and sundry other expenses of
illegals. Is this financial sellout worth a vote?

[Arleigh]

The only part of your rant I would have to disagree with is the part about the surplus being spent. In truth, there never was a surplus. All Social Security Trust Fund smoke and mirrors.

There is no good news out there: Business is operating at something like 70% capacity, so sales would have to pick up nearly 50% before capital expenditures are necessary. Yet consumers are deep in debt and have already spent most of the equity in their homes. So who's going to keep economy going? At 1.75%, Fed can't cut interest rates much further, and falling dollar means foreigners need HIGHER rates to entice them to keep their $$$ here. But if Greenspan raises rates, then housing market will collapse and millions of American families will find themselves "upside down" - mortgage more than the house is worth. They'll have to PAY to sell.

To paraphrase someone else on this thread -- buy gold, guns and pay down debt. Stocks and real estate won't be enticing for years - maybe a decade or more!

[junta]

My two bits. The post 9/11 economic bump is thru creative financing by retailers like "no payments 3months, 6mos, 12 mos, maybe never?", and other such gimmicky deals, I know I got a 32 inch Toshiba no pay 6 months out of it. When those bills hit my fellow Lumpen Proles back into recession, but hey what do I know.