Friday, July 25, 2008

Panic Spreads

"And speaking of ugly, yesterday's markets showed one more nasty side of the Fannie Mae mania: fear of rising inflation. Gold popped up by $23 an ounce, and at $965 is back at the heights it reached during the March run on Bear Stearns", Editorial at the WSJ, 12 July 2008.

"The federal government's seizure of IndyMac Bank is deepening worries among executives, regulators and consumers about the U.S. banking industry, which is in a tightening bind following a long run of prosperity. ... While fewer banks are expected to fail than the 834 that went under from 1990 to 1992, it will likely take several years for battered financial institutions to work through their bad loans and replenish their depleted capital. ... The fast-moving decline of IndyMac Bancorp Inc., parent of IndyMac Bank and a mortgage lender that was one of the nation's largest savings and loans, illustrates that the problems in the U.S. banking system are much wider and deeper than a few months ago. ... 'This is a very serious banking crisis. There's just no doubt about that,' said Donald G. Ogilive, a longtime president of the American Bankers Association and now a senior adviser at Deloitte LLP", WSJ, 14 July 2008.

The gold market sees the Fed will effect the Fannie-Freddie bailout through inflation.

Thanks for telling us now, Ogilive. Where were you say, three years ago? My guess is that Oglivie knows about as much about accounting as I do about neurosurgery. Why did Deloitte hire him? In all likelihood, he's another guy with a "big rolodex".

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