Continued bailouts of financial giants by government can only end up having disasterus results for all. No government can long survive handing out such huge amounts of money that it has to borrow from elsewhere. As a harbinger of things to come, the stock market ended a 6 day losing streak yesterday with a huge rally in stock prices amounting to a tiny fraction over 12 points. At least that was what all the pundits called it. Oil has now dropped below $35 a barrel and the break even figure is just that. So now Russia and other countries whose economy depends on oil exports are supposedly just breaking even. Oil will drop even more and in the process the economies of oil production dependent nations will also start to crash. The only way out is to reduce the cost of producing petroleum and the only way to do that is to drastically cut the cost of labor across the board crippling the economic well being of workers and their families worldwide. Of course, that also cuts their ability to pay taxes which is the only real source of income for our government. And to make matters worse, Freddie Mac, Fannie Mae and Hud are now moving ahead with foreclosures even though they have a moratorium in place saying that they are not going to do that. Soon the Federal Reserve Note will go the way of the Continental Dollar of Revolutionary days. Not worth a Continental Dam*. Citi, BofA results hammered by financial crisis Citi unveils re-organization plans, BofA gets more government aid By Alistair Barr & Greg Morcroft, MarketWatch Last update: 6:48 a.m. EST Jan. 16, 2009 Comments: 25 NEW YORK (MarketWatch) -- Citigroup Inc. unveiled plans to dismantle more of its financial-services empire and Bank of America got billions of dollars in new government support on Friday as the two giant lenders reported quarterly results that were hammered by the financial crisis. Citigroup on Friday reported a net loss of $8.29 billion, or $1.72 a share, versus a loss of $9.83 billion, or $1.99 a share, a year earlier. The latest quarter's results include $6.1 billion in net credit losses and a $6.0 billion net loan loss reserve build. Citi (C: Citigroup, Inc News , chart , profile , more Last: 3.88-0.65-14.35% 4:00pm 01/15/2009 Delayed quote data Add to portfolio Analyst Insider Discuss Financials Sponsored by: C 3.88, -0.65, -14.3%) was expected to lose $1.12 a share, according to the average estimate of 11 analysts in a FactSet survey. The Wall Street Journal said earlier this week that the bank could report a quarterly operating loss of at least $10 billion. Citi also said Friday that it will realign into two businesses, Citicorp and Citi Holdings, saying that the new structure will enable it to focus on driving the performance of its core businesses and, separately, on realizing value from non-core assets. Also Friday, Bank of America said it swung to a fourth-quarter loss of $1.79 billion, or 48 cents a share, on escalating credit costs, including additions to reserves, and significant writedowns and trading losses in the capital markets businesses. Analysts polled by FactSet had estimated a 24 cents a share profit. The Charlotte, N.C. bank noted that preliminary Merrill Lynch results indicate a fourth-quarter loss of $15.31 billion; the Merrill results weren't reflected in B. of A.'s quarterly numbers. The U.S. government earlier announced a plan to inject $20 billion into Bank of America and to guarantee another $118 billion of losses. The new guarantee is similar to the one Citi got late last year. In that transaction, the government agreed to guarantee most of a $306 billion pool of troubled assets if losses exceed $29 billion. Soon after that, Citi Chief Executive Vikram Pandit decided the company's financial supermarket business model should be changed drastically. As a result, Citi will break into two parts: Citicorp, which will focus on leveraging the competitive advantages of the company's global universal bank in more than 100 countries, and Citi Holdings, which will be made up of brokerage and retail asset management, local consumer finance and a special asset pool - whose management will focus on tightly managing risks and losses, and maximizing the value of these assets.
I was discussing the stock market with my parents (who is an electrician and homemaker) about how many hard working citizens can no longer retire in the near future like my father, due to the major losses from the stock market...the discussion turned to all of these bailouts and my mother who doesn't know anything about the financial market (she stuffs cash in the freezer and puts everything in savings accounts and cd's, maybe I should have done the same so I wouldnt have lost my shorts in the market, lol) said to me...."How can anyone expect to run a household in the negative for so long and not expect it to collapse? I even know that if our household ever went into the negative that the results would be disastrous, you would think somebody would have figured that out by now considering how long our country has been in debt." Sad news is that every year it just gets worse and now we are surpassing 1 TRILLION dollars!!! Can the US Government file for bankruptcy??????
They don't have to we will do it for them.Look at the price of food,airfares,etc.Crime is on the rise as more people lose their job's more people will rob and steal,We need to start planning for a global attack on our economy*.The times are a changing*
The budget deficit has increased by over 1 trillion since Jan 1st. It has done that multiple times already. The first time was when the Continental Dollar was replaced by the gold standard. We did it again when we went off the gold standard and yet once again when we went off the silver standard. Yes, they can file bankruptcy or at least declare insolvency which is more or less the same thing.
I doubt it, or at least not any time soon. Why should they? After all, the American Dollar is the strongest currency in the world despite all the negative things that are said about it by those who want the world to think otherwise. Americans are saving and paying off their personal debt at a record rate instead of purchasing the world's junk. That makes the Dollar even more sought after abroad. If any nation suvives, it will be the good old USA.
Our currency is worth more than any other . . . please explain. I don't see it that way when compared to other currencies.
Which currencies are depreciating fastest Its all a matter of relativity these days. Which currency is depreciating the most slowly. Others such as the Canadian Dollar for example is deteriorating against the Dollar and at the current rate may soon be worth less than the Dollar again.
The Canadian dollar is already weaker than the US dollar. Time to start traveling to Vancouver again for shopping ;-).
The negative side of that coin. And there you have the negative side of the strong dollar argument. As our currency becomes dominant over another currency, for instance that of Canada, American made goods become more expensive. Our currency flows out of the U.S. and into other countries where we can buy goods more cheaply. A cheap dollar is better for our economy. If our products are too expensive people won't buy from us and we lose jobs and government loses tax revenue as well. There are always two sides to every coin.
