Economics business.The Sub-prime Crisis. How bad is it?

[Michaelangelica]

Originally Posted by Michaelangelica

I just did a little search on sub prime loans to see what my least favourite bank was up to -Citibank.
While I was doing that a dozen adds came up touting for sub-prime loan business.
Does this seem strange to you?

Citibank has a new CEO.
I wonder how much money the last one lost and how much his golden parachute will be?(Lost- $5.9 billion in the third quarter, and potentially $8 billion to $11 billion to come-NYT)

Citigroup: Bankrupting Democracy

http://www.nytimes.com/2007/11/05/business/05place.html

Citigroup Inc. News - The New York Times

Blacks dominate subprime loans | ajc.com

You would have thought that Citibank would have been 'out of the woods" after firing their CEO and re-positioning themselves last year.
See old post above.
Now we discover that a third of a trillion US$ is going NOW to bail them out!

US steps in to save Citigroup with $US300bn backing
Staff reporters, The Wall Street Journal | November 24, 2008
Article from: The Wall Street Journal

THE US Government has agreed to take unprecedented steps to stabilise Citigroup by guaranteeing close to $US300 billion ($475.3 billion) in troubled assets weighing on the bank's books, according to people familiar with details of the plan.

US steps in to save Citigroup with $US300bn backing | The Australian
This is the problem with estimating "how bad" this whole fiasco is.
Surprises (Massive ones) keep coming out of the wood work!

[LaurieAG]

Originally Posted by Michaelangelica

You would have thought that Citibank would have been 'out of the woods" after firing their CEO and re-positioning themselves last year.

Hi Michaelangelica,

It's not surprising considering the latest deals they have been flooding the Australian cable networks etc with.

If Citibank charges you interest of 2.9% on balance transfers for 18 months or charges you 3.9% on balance transfers for the life of the transfer, and you already pay 18% on the balances you would transfer then how does Citibank make any money if you pay off your transferred balance?

Citibank effectively gives you 18-2.9 or 3.9 = 15 or 14 %, and if you are prudent they won't make a profit. Citibank can only make a profit on the deal if you spend extra or don't pay down the debt.

[Michaelangelica]

citibank charge me 19%
I have another name for them that rhymes with city, (merde in French)

a lot of oz companies are having trouble refinacing ongoing bank loans at the moment; especially resources/mining companies.

This is despite the 5 major banks having a huge inflow of funds due to the Government guaranteeing all their deposits.
Other mortgage/mutual? funds have frozen withdrawals although they are still paying dividends.
Next week all aged and invalid pensioners get $1,400 from Uncle Rudd to spend on Chinese-made Christmas presents . In this area that is nearly 50% of the population. (50% includes ex-Forces too-don't think they get the Chrissy Bonus.). Most pensioners are doing it tough with high dental and medicine costs.

The Fedral government is spending money like water to stimulate the economy and is expecting to go into deficit next year. (Good old Keynes-lets hope he is right this time round.)
House prices are falling; again huge government grants ($20,000+) for first time, new-home buyers; especially in Tasmania.
(-A great place to live, if you are self-employed. (The "Testicles of of Australia" according to R. Flannigan; injecting creativity into the rest of Oz.
- Very cold Mediterranean Climate- like the South of France)
Tassies Very P*ssed as they were left off the "Australia" movie promotional material.)

[Michaelangelica]

Arrogant banks should not keep investors in the dark
Ian Verrender
December 20, 2008

Page 1 of 2 Single page view

These are desperate times, and desperate times call for desperate measures. Australian taxpayers now underwrite the loans raised by our big banks, courtesy of the Federal Government guarantee on borrowings. The competition regulator has been warned off from stymieing the massive grab for market share now under way by our financial institutions. And in recent months, the green light has been given to our banks to gouge customers by charging an ever greater margin above official loan rates.

All has been done in the name of protecting our financial system, of ensuring we do not succumb to the forces ravaging global markets.

But those measures have the potential to incur great costs, and in ways that most of us will realise only when it is too late.

For much of this year, Australians believed that, once again, we were the lucky country. We had better regulations. We had more responsible banks. We had an export-driven economy based on the unassailable rise of the developing world on our doorstep.

Arrogant banks should not keep investors in the dark

The Australian Federal Government has guaranteed all bank deposits.
So there has been a rush of money/capital into the few Australian major banks' coffers.
One of the biggest beneficiaries is the CBA (Commonwealth (sic) Bank of Australia)
Recently the Australian Stock Exchange asked them why they had not declared their bad debts.
"O, we didn't think it was relevant" was the ingenuous, dissembling reply.

[LaurieAG]

Originally Posted by Michaelangelica

The Australian Federal Government has guaranteed all bank deposits.

Hi MA, Merry Xmas,

The Australian has revealed that the banks raked in 22.5 billion in fees and charges up to July this year. When I was studying Maths of Finance in 1991 fees and charges were just starting to be introduced. It has taken just 17 years before this parallel compounding financial leech has grown fat and bloated off our societies basic needs.

Where's a left wing govt when you need it, like the USA's, not one that gives with one hand and gouges multiple times with the other.

[Michaelangelica]

Not many of us lefties left.
25% Union Membership!
No one remembers their history.

The bare-faced brazenness of the CBA was breathtaking!
I have yet to have a pleasant experience with that bank.

[Michaelangelica]

[freeztar]

Originally Posted by Michaelangelica

How much longer can the USA continue printing paepr money?

As long as Canada keeps sending us pulp?

[Michaelangelica]

Australian dollar higher at noon after Wall Street gains

AAP

January 16, 2009 12:28pm


* Share

THE dollar was firmer at noon as a late rebound on Wall Street boosted Asian equity markets, helping high-yielding currencies.

But the local currency was expected to come under pressure this afternoon if regional share markets lost momentum.

At 12.00pm (AEDT), the dollar was trading at $US0.6663/67, up 1 per cent from yesterday's close of $US0.6597/02.

The dollar stood at $US0.6666 when it opened at 07.00am AEDT, with a late turnaround on Wall Street helping risk appetite.

After a session of heavy losses, New York's Dow Jones industrial average index finished up 0.15 per cent to 8212.49, as investors reacted to news the US Congress had passed a $US825 billion ($A1.25 trillion) economic stimulus plan.

The dollar then fell to a daily low of $US0.6624 within the first two hours of local trade before rising to high of 0.6691 one hour later as Asian share markets rallied.

Easy Forex senior dealer Francisco Solar said a 1 per cent rally on Japan's Nikkei index this morning helped high-yielding currencies such as the Australian dollar.

"It does add to the sentiment, which does help high yielders like the Aussie and Kiwi (dollars) pare back losses of late,'' he said.

Mr Solar said the dollar was in danger of falling back to $US0.6600 this afternoon if a late turnaround in Asian share markets pulled down the currency.

With commodity prices falling and investors worried about the US banking sector, based on speculation Citigroup may have to be nationalised, the fundamentals for risk appetite are shaky.

"It looks like the markets are reverting back to fundamentals and the fundamentals aren't positive,'' Mr Solar said, adding a global economic recovery may not begin until 2010.

Australian dollar higher at noon after Wall Street gains | Markets | News.com.au

[Michaelangelica]

"When stands the Banks of England,
England stands.
When falls the Banks of England,
England falls."


"It's my tuppence"

From "Mary Poppins" the film