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By Monty Guild & Tony Danaher, on September 29th, 2008
Long term success does not depend upon the positive things that happen to you, but on how you handle adversity. -Common theme in several notable quotes
The weight of the evidence for the global investment markets has swung from a recession with inflation problems, to the high probability of a deep recession or depression that lasts for years.
Governments everywhere have been slow, and some politicians have been unequivocally unwise. Those in the real estate, mortgage banking, insurance and investment communities who started the mortgage and derivative scandal that we have warned of for six years are to blame, . . .
Continue Reading: HANDLING ADVERSITY
By Monty Guild & Tony Danaher, on September 26th, 2008
World confidence in the financial markets has been badly shaken. There have been bank runs in Russia, U.K., U.S., and now Hong Kong (although Hong Kong is not really too much involved in mortgage backed securities and the heavy leverage insanity like in Europe and on Wall Street). Europe, Japan and the Anglo-Saxon world are in deep trouble and we should admit it to ourselves and take immediate action.
Rumor has it that when the Titanic first hit the iceberg, some passengers engaged in a snowball fight on the deck…clearly missing the message. Today is not so dissimilar. Many . . .
Continue Reading: THE UNVARNISHED FACTS AS WE SEE THEM
By Monty Guild & Tony Danaher, on September 23rd, 2008
One thing we do know is that the cost will be much higher than if they had done it a year ago, when we first mentioned that such a government bailout would be necessary in order to achieve some stability in the credit markets
THE DERIVATIVE PROBLEM REMAINS UNSOLVED
The derivative meltdown has still not been dealt with, and this will cost much more than the Treasury Department’s first estimate of $700 billion. Remember, when the first estimates of the war in Iraq were about $100 billion? We have spent well over $700 billion in Iraq thus far…plus we . . .
Continue Reading: BELATEDLY, THE RTC STYLE BAILOUT HAS BEEN INTRODUCED
By Monty Guild & Tony Danaher, on September 22nd, 2008
INVESTMENT BANKS SHIFT TO COMMERCIAL BANK STATUS
Well it was obvious that it had to happen, and it has. The last two major investment banks are converting to commercial banks. Commercial banks on a worldwide basis maintain about 8% capital to assets ratio, which means that they can only borrow at a rate of about 12 to 1. The traditional investment bank leverage of 25-30 to 1 became intolerable to the U.S. Government, and I have no doubt that government precipitated the move that hit the newswires last night.http://news.ino.com/headlines/?newsid=6893667072480
Now, as entities regulated by the Federal Reserve, their leverage . . .
Continue Reading: INVESTMENT BANKS SHIFT TO COMMERCIAL BANK STATUS
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