Forex Blog - Obama Inherits Insolvent Banking System
Obama Inherits Insolvent
As the former junior Senator
from the state of Illinois, Barack Obama, prepares to be sworn in as the 44th
President of the USA and the nationâ€™s first African American President, one can only be
elated at the accomplishment of the man and the nation. It is a great day
for America and the world.
And with a little luck and
lots of correct decisions, it may well be a great new era for America and the worldâ€¦I would not for a minute underestimate
this new soon to be US President.
That said President-elect Obama
knows all too well that the challenges ahead are enormous, arguably the most
daunting for any President since FDR put his hand on the bible in March of
1933. He has picked a competent team â€“ tax evasion indiscretions aside (I
do think fudging on taxes is wrong, especially wrong for a head of the NY Fed,
but I also think Geithner has more positives than this negative and believe
redemption will make him work ever harder to do the right thing ahead) â€“ to
tackle this financial crisis come economic crisis. This is the
nearly the best and brightest and a huge upgrade from what we are leaving with
the departure of the 43rd President.
But not even a very smart
President with a very smart and capable set of advisors can wish away a broken
banking system. And it is not just a broken US banking system. It is a broken international
banking system â€“ large global banks everywhere are facing insolvency
issues. Nouriel Roubini this week said the losses in the US banking system may reach $3.6trln making it effectively
insolvent. Currently banks have accounted for about half this amount in
losses. And they have no place to raise capital other than from
respective governments. BOA sold shares to the public in October at $22
and today its share price is a little above $5 and this follows a government
rescue package worth about $140bln announced this week. Arguably the
Paulson fallacy (think partly shared by Bernanke who admittedly makes monetary
policy not fiscal ones and hence has little choice but to go along with
Paulson) was that if the government could support banks in the short-run and
buy some time, with the Fed making liquidity virtually free, credit creation
and the multiplier effect would respond and short-cut a real economy
slowdown/recession. Well we know how badly this response wentâ€¦for many of
us we knew from the get go that anything short of nationalization was pothole
filling on the Brooklyn Queens Expressway. The banking crisis was much
bigger than buying time to allow bad assets to recover and banks to pass free
liquidity from the Fed onto customers.
So Obama has to build an alternative credit creation machine outside
the 9, now 8, large US banks where the bulk of the heavy lifting in the US and global financial system takes place. I am
sorry but solid regional banks are not in any position to fill the void.
Nor are newly received GSEs or the FHLB system. Nor are credit card firms
or student lending firms. The government needs to become the credit
creation machine in tandem with the Fed doing the smaller chore of supporting
non-large-bank credit markets.
I am not sure even Obama and
his economics team are ready to go Nordic on US insolvent banks and become the
banking system to the domestic and international economies. This is
socialism. This is un-American. This is repugnant. We are
where we are because of our Adam Smith DNA and blind faith in markets.
And free market advocates have had no better home than in financial markets of
the last decade or so. Markets work most of the time but not all of the
time and are prone to asset bubbles. Central banks will have new mandates
ahead to address asset bubbles and not simply assume there is no way to
identify them much less use policy to unwind them.
Government spending will get
bigger ahead. The $825bln the House Democrats and the transition team
have cooked up is the first in a series of similar sized tax cut and spending
measures which like TARP will fill potholes in the private sector but not
restore confidence in the banking system and asset markets.
To get in front of the
problem, the first priority should be ending the make believe private banking
system â€“ Japan tolerated zombie banks for far too long and saw a
decade of stagnation/deflation. No one wants the government running the
banking system for a minute longer than is necessary. But not taking over
insolvent banks and balancing the books because the thought of nationalization
is repugnant is a ringing endorsement of the zombie economy Japanâ€™s policies supported as late as 2005.
I am not saying it canâ€™t be
done. Obama has demonstrated time and again that the impossible is
possible. Moreover, he is an all in kind of playerâ€¦his hand is not great
but he has no choice but to play and play hard high stakes poker.
And there is some basis for
optimism as political support builds for a nationalized bank to buy bad assets
from banks disguised as the new RTCâ€¦toxic waste recycling center. Still
as UK developments showed this week, time is not on the side of deliberationâ€¦it
is time to act and act decisivelyâ€¦seize the broken, shed the assets and direct
credit to households and firms before the zombie hosts take over.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Mon 10 Sep 2018 AA 08:30 GB- GDP, Trade, Output Tue 11 Sep 2018 AA 08:30 GB- Employment Decision A 09:00 DE- ZEW Survey Wed 12 Sep 2018 A 12:30 US- PPI A 14:30 US- EIA Crude A 18:00 US- Beige Book Thu 13 Sep 2018 A 1:30 AU- Employment AA 11:00 GB- Bank of England Decision AA 11:45 EZ- European Central Bank Decision A 12:30 US- Weekly Jobless AA 12:30 US- CPI Fri 14 Sep 2018 A 08:30 GB- GDP AA 12:30 US- Retail Sales A 13:15 US- Industrial Production AA 14:00 US- prelim University of Michigan
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.