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Registered User
Joined: 2/13/2005
Posts: 368
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This is the Stock & Market Talk forum so what do you guys think of this???
How come the banks are sitting on all of the cash the Fed is giving them and not lending it out?? If the banks khew that the Fed would absorb all of their bad debt anyway, why aren't the banks back out on the street leveraging their brains out on real estate loans, derivatives, you name it???
What if..... the Fed has an agreement with all of the major bank players that "I'll give you guys a lot of money but I want you to sit on it" That way there won't be runaway inflation if you aren't putting the money into the system. In a few months, I'll come out and say that the crisis is over and look at the banks, they are full of capitol for everybody "Party, party, party!!"
The banks will then repay the Fed (with the Feds lent money), the Fed will throw that money back into his safe and the crisis will appear to be over with no real money being injected into the banking system and economy thereby trick-focking the public into thinking that the banking crisis is over, all for no major $$$ cost to the Fed.
Hopefully, the bamboozled public will then return to normal operations and start spending again which then that will restart jobs, factories, etc.?? Sounds stupid but plausible.
I'm convinced that there is some sneaky BS going on behind the scenes in the Banking Sector but I can't put my finger on it, I am trying to approach it from the point of view that these guys know what they are doing, they control the White House and the printing presses and will not lose money.
So, how to invest to come out on top??
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I always find it amazing how folks are ignorant fools when we need them to be.
Then diabolical geniuses when we need them to be.
Remember if they were that smart we wouldn't have a clue because
they would "fool" us all day long.
"So, how to invest to come out on top??"
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Go long what's going up and short what's going down.
That never seems to change.
Thanks
diceman
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Registered User
Joined: 2/5/2006
Posts: 1,148
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you seem to be implying the fed thinks that the economys problems are merely psychological. and that if everyone pretends its 2004, the economies problems will disappear, without any structural changes. although i would disagree, you are probably right about the feds thinking.
however, i suspect the banks are weaker than people think, see the weakness in the economy, and are simply acting prudently. although they did relax the accounting standards on "mark to market", those toxic assets are still on their books.
from the feds past actions, i can't believe they think there's any relation between their printing money "out of thin air", and inflation, or that they can't print their way out of any economic problem. and the politians have been vocal about the banks being more willing to lend. so i doubt the fed has told them not to lend.
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Registered User
Joined: 2/13/2005
Posts: 368
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No question the banks and the Fed are reaching for straws, I also agree that until we fix the structural problems and makes the banks transparent, nothing will change and corruption will prevail. The bigger question is....what is their game plan??
I'll just continue to sit on the sidelines UFN..
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Registered User
Joined: 10/17/2004
Posts: 43
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Hmmmm.......
1) The banks aren't lending because they are broke. The fed is giving them your money to keep them afloat. The Fed is NOT regulating them according to law (look at the write offs when they fail - it's quite clear they have "failed" 10-50 times over before the Fed actually closes them).
2) The banks also aren't lending because there aren't any credit-worthy lenders with credit-worthy projects. Commercial real estate is going bust at an accelerating pace. Residential housing is going into a period of ARM resets that dwarfs the size of the subprime debacle. Real unemployment is somewhere around 20% - we don't really know how high because the gov't refuses to count it. Gov't can call it 9.8 but the guy at the corner store has an impact on his business from the 20% not just the 9.8.
3) How to invest to profit? Diceman has it exactly right - buy what's going up with strength, sell what's falling with strength. This is quite easy to evaluate with Telechart/Stockfinder. What's hard is actually doing it........................................................................
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