Posted on 11/25/2009, 12:30:10 PM by TigerLikesRooster
Banks Grapple With Debt Avalanche
BY CARRICK MOLLENKAMP AND SERENA NG
Banks have spent the past year dealing with a mountain of bad assets. Now attention is turning to trillions of dollars of debt they have maturing over the next few years.
Banks unable to maneuver around the challenge could be forced to refinance their debt at sharply higher costs.
The situation was caused by banks engaging in cheap borrowing during the credit-market boom that began in the middle of the decade and lasted through 2007. As financial markets hit crisis mode, banks were propped up by government guarantees that enabled them to keep selling debt—but with much shorter maturities.
About ...
(Excerpt) Read more at online.wsj.com ...
Ping!
Oh well, there's always taxpayer bailouts.
No, this article is about the money the banks borrowed, not the loans they made.
I’m not a subscriber, so I can’t read the whole article. While I’m a financial dunce, I would assume the banks were borrowing the money to cover those (eventually bad) loans. I believe they’re required to meet some liquidity percentage relative to the amount of outstanding loans.
There's a day of reckoning on the horizon and it's going to be devastating when it dawns.
We're doomed when it comes to debt and all we hear is trillions. Used to be billions that scared us. The good ol’ days.
I had to laugh, a sad laugh, when I heard a Congress critter yesterday bragging the latest health care debacle would cut the deficit by nearly $100 billion dollars a year. A deficit that is over a THOUSAND times more, and growing by the day!
1) Go to google
2) do a search on the title “Banks Grapple With Debt Avalanche”.
3) The WSJ article with this title will probably show up near the top of the search result.
4) Click the link on the list. Then you can access the whole article.
(If you go through WSJ site, you will be blocked except the excerpts posted above.)
Thanks. I tried your tip with Yahoo first, and it failed. Tried it with Google and the same link gave me full access to the article???
About the same time the banks’ own debt matures, a new wave of ARMs (adjustable rate mortgages) will begin resetting.
With interest rates low, that might not be too big of a problem. But the potential is there for resets to put more consumers into financial distress. Which means less discretionary consumer spending (buh-bye real economy) and more foreclosures.
Self-sustaining dynamic is now in place. Difficult to get rid of for quite a while.
Our whole society is swimming over its head in debt. By the second quarter of 2010 the rubber will begin to hit the road. I see 50% of Americans at risk of owing more than their homes are worth by the end of next year. Home values will fall another 20% at least by this time next year.
But nobody listens to me anymore. Not even my old friends in California. Most of them are hypnotized by the glowing reports coming from the mainstream media. 'Obama said this today _______ Yada, Yada. ' Most people with any education are marching in lockstep to Bernanke-Obama-Banksters toilet paper currency pomp and ceremony. They spout Georgie Stepalloverus nonsense and eagerly await Obamacare. In my view they are like lemmings running off a cliff.
So be it. I cannot do anything to change what is happening. My news site has been censored. I have been targeted again for speaking out. No one listens. No one cares. So I'm just going to concentrate on my painting and writing and, as the old song says. "Let the rest of the world go bye . . . ."
Just DAMN!
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