zero hedge - on a long enough timeline, the survival rate for everyone drops to zero Sat 2010-09-25 09:47 EDT

Chris Whalen On The Upcoming "Worst Economic Contraction Since WWI (Forget WWII)"

Chris Whalen at Institutional Risk Analytics

The erosion of the profitability of the U.S. banking industry over the past two years under the glorious Summers-Geithner-Bernanke rescue scheme is the proverbial fly in the ointment for both major political parties. Democrats and republicans alike are going to be fed into the meat grinder over the next several years as the banking sector deals with literally hundreds of billions of dollars in direct and indirect expenses from the deflation of the mortgage bubble. For the economy, this slow process of muddle along championed by Summers and Geithner will ensure that Barack Obama becomes the Herbert Hoover of the Democratic Party. The economic carnage that will causes these losses, as we described in a recent post in Reuters, "Double Dip or Global Deflation?," is going to represent the worst economic contraction since WWI. Forget WWII. Think "shrinkage" to use the Gilded Age description for economic deflation. And frankly nothing that either the Fed or Treasury does in the near-term can change this basic economic fact of restructuring...the economic situation at BAC and among all of the legacy zombie banks continues to worsen. No amount of bullshit from Washington changes the fundamental economic situation inside the largest U.S. lenders.

Chris Whalen; dropped; Forget WWII; long; survival rate; Timeline; upcoming; worst economic contraction; WWI; zero; Zero Hedge.

Wed 2009-10-07 10:31 EDT

Beijing's derivative default stance rattles banks

Reuters

For banks that are hoping to sell more derivatives hedges in China, the world's fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like...Air China, China Eastern and shipping giant COSCO -- among the Chinese companies that have reported huge derivatives losses since last year -- had issued almost identical notices to banks.

Beijing's derivative default stance rattles banks.

zero hedge Tue 2009-09-22 16:22 EDT

Top Goldman Lobbyist Barred From Communicating With House's Financial Services Committee

In a rare example of testicular fortitude, Barney Frank has "banished" Goldman's Michael Pease from communicating with the U.S. House of Representatives Financial Services Committee. According to Reuters, the Goldmanite, and former committee staffer, has been "asked" not to interfere with the Congressional panel for a period of 12 months. According to Barney Frank aide Steven Adamske: "Mr. Paese left our offices in September 2008, and was not allowed to communicate with any committee members or staff for a period of one year due to normal ethics restrictions that apply to all House and Senate employees. Out of an abundance of caution due to the nature of financial regulation reform, the chairman has extended Mr. Paese's recusal for another year." Pease "was the committee's deputy staff director before he quit to work for the Securities Industry and Financial Markets Association as a lobbyist. Goldman hired him in April.

communications; House's Financial Services Committee; Top Goldman Lobbyist Barred; Zero Hedge.

Calculated Risk Fri 2009-09-04 19:01 EDT

Junk Bond Default Rate Passes 10 Percent

CalculatedRisk

From Rolfe Winkler at Reuters: U.S. junk bond default rate rises to 10.2 pct -SP The U.S. junk bond default rate rose to 10.2 percent in August from 9.4 percent in July ... Standard & Poor's data showed on Thursday. The default rate is expected to rise to 13.9 percent by July 2010 and could reach as high as 18 percent if economic conditions are worse than expected, SP said in a statement. ... In another sign of corporate distress, the rating agency has downgraded $2.9 trillion of company debt year to date, up from $1.9 trillion in the same period last year. Bad loans everywhere ...

Calculated Risk; Junk Bond Default Rate Passes 10 Percent.

The Guardian World News Sun 2009-08-30 14:43 EDT

Iceland votes to repay UK savings

Iceland's parliament today approved a plan to repay Britain and the Netherlands £3.4bn they used to compensate depositors after the collapse of an Icelandic bank. Johanna Sigurdardottir, the prime minister, said the "Icesave" bill was an important step in her country's economic recovery, paving the way for it to receive financial help from the International Monetary Fund and other countries and keeping open the option to join the EU. "It's obviously best for all three nations to reach an amicable agreement on this for it is in no one's interest to see Iceland economically unable to meet its obligations," Sigurdardottir told Reuters after the vote, which followed an acrimonious national debate. Critics objected to paying for mistakes made by private banks under the watch of other governments and for...

Guardian World News; Iceland votes; repay UK savings.