Walter Bagehot Was Wrong

New York Sun ^ | June 19, 2008 | JAMES GRANT

[An Old Man]

Insofar as a currency derives its strength from the balance sheet of the issuing central bank, the euro is unsound and becoming more so, as Mr. Mersch did not quite say. We, however, will say it for him. In fact, we will say the same for most of the leading monetary brands, that of the United States not excluded. The mortgage mess is the immediate cause of the new debasement. A long-held article of central banking dogma is the remote cause.

[An Old Man]

"The FHLBs," Reuters reported of Mr. Rosenfeld's remarks, "are facing increased risk due to the concentration of loans to big financial institutions that recently 'decided to become very involved in the FHLB system,' Mr. Rosenfeld said. Those banks include Countrywide, Washington Mutual Inc. and Wells Fargo & Co., he said. The top borrowers of the FHLB system account for 37% of all advances, he said. 'That's an astonishing number, and an astonishing amount of concentration,' he said.

Is Wells Fargo about to be declared insolvent? I just tried to withdraw (In the form of a Cashiers Check) a large sum and was refused. They told me that my lawyer should contact their legal department to work things out.

[An Old Man]

WaMu, Wells Fargo, Zions Draw the Interest of Traders

"The Wall Street Journal"

By TENNILLE TRACY
July 15, 2008; Page C6

What's this all about?

Elsewhere in the market, options traders circled Wells Fargo & Co. and Zions Bancorp -- both of which report earnings this week. In Wells Fargo, traders picked up 109,000 puts and 33,000 calls. They congregated around July $20 puts, in particular, which were priced at 70 cents and make money if Wells Fargo slips to less than $19.30. It closed the session at $21.57 after losing 6.2%. Wells Fargo reports earnings on July 16.

[NVDave]

Covered my short on ZION way too early.

[snowsislander]

I just tried to withdraw (In the form of a Cashiers Check) a large sum and was refused. They told me that my lawyer should contact their legal department to work things out.

My condolences. A bank should not tell you to engage a lawyer in order to simply withdraw your funds.

[An Old Man]

"East Bay Business Times"

by Mark Calvey San Francisco Business Times

Tuesday, July 15, 2008 - 7:21 AM PDT<
Regional bank shares under pressure as worries mount

"Many regional banks saw their shares hit multiyear lows Monday as investors grew increasingly concerned that some of the biggest names in banking will not survive the credit crisis as independent institutions.

The sell-off in regional banks is being closely watched in the Bay Area. Wells Fargo (NYSE: WFC) is seen as a potential beneficiary of the current crisis. If the San Francisco bank continues to weather the storm better than most, the company may find some attractive merger opportunities amid the wreckage. Wells fell about 6 percent to $21.57 in New York Stock Exchange trading Monday."

We will learn just how they feel about a withrdral in the morning. If the don't fork over the cash we will file suit in the afternoon.

[count-your-change]

Money, by which you mean FRN’s, don’t belong to you no matter what you’ve been told. Those FRN’s belong to the Fed. government, we’re allowed to use them to facilitate economic activity subject to rules of the real owner.

[snowsislander]

We will learn just how they feel about a withrdral in the morning. If the don't fork over the cash we will file suit in the afternoon.

Were you able to withdraw your funds?

[An Old Man]

"Were you able to withdraw your funds?"

Not yet. The Lawyers were engaged on the afternoon of the 15th. Hopefully we will know more by the end of the week.