25 Signs That The Financial World Is About To Hit The Big Red Panic Button

[Hawkowl]

"Most of the worst financial panics in history have happened in the fall. Just recall what happened in 1929, 1987 and 2008. Well, September 2011 is about to begin and there are all kinds of signs that the financial world is about to hit the big red panic button. Wave after wave of bad economic news has come out of the United States recently, and Europe is embroiled in an absolutely unprecedented debt crisis. At this point there is a very real possibility that the euro may not even survive. So what is causing all of this? Well, over the last couple of decades a gigantic debt bubble has fueled a tremendous amount of "fake prosperity" in the western world. But for a debt bubble to keep going, the total amount of debt has to keep expanding at an ever increasing pace. Unfortunately for the global economy, sources of credit are starting to dry up. That is why you hear terms like "credit crisis" and "credit crunch" thrown around so much these days. Without enough credit to feed the monster, the debt bubble is going to burst. At this point, virtually the entire global economy runs on credit, so when this debt bubble bursts things could get really, really messy.

#1 According to a new study just released by Merrill Lynch, the U.S. economy has an 80% chance of going into another recession.

#2 Will Bank of America be the next Lehman Brothers? Shares of Bank of America have fallen more than 40% over the past couple of months. Even though Warren Buffet recently stepped in with 5 billion dollars, the reality is that the problems for Bank of America are far from over. In fact, one analyst is projecting that Bank of America is going to need to raise 40 or 50 billion dollars in new capital."

http://theeconomiccollapseblog.com/archives/25-signs-that-the-financial-world-is-about-to-hit-the-big-red-panic-button

A very good list of the financial problems facing the world today. It looks like another severe downturn is unavoidable.

[dipsydoodle]

1. Other than maybe their ability to borrow money ,

which apparently they wouldn't need to do anyway , if Bank of America's shares went to down to a dime it wouldn't make any difference to their balance sheet.

[Hawkowl]

2. If a bank can't borrow money

If a bank can't borrow money, or if the cost of borrowing money is retail or greater, it can not function. In order to cash the checks of its depositors, a bank must borrow money. It does not have everyone's checking and savings accounts in a vault. It has loaned them all out. In some cases it has loaned them out 50 times over! That is what happened to Lehman, and that is what is happening to BAC and Greece, and Portugal, ad nauseam. It can continue indefinitely as long as everyone keeps paying interest, i.e; a giant Ponzi scheme. It appears we are coming to another point of resetting the banking system. When and how is anybody's guess.

[dipsydoodle]

5. The point is

that certainly at present they are so cash rich they don't need to borrow money and deposits continue to flood in anyway.

"There is no impact whatsoever on Bank of America's balance sheet, based upon the price of its stock in the open market. If the price of the stock goes to a penny a share, it has no impact on the balance sheet of Bank of America. Bank of America sells the stock to the public, it takes in the money, and that is the end of the transaction as far as Bank of America is concerned. If you're going to break a bank, you're going to have a run on its deposits. That's not happening. Exactly the opposite is happening…Deposits are pouring into Bank of America."

"Or, as in the case of the fourth quarter of 2008, you've got to bust a bank by making it repay all of its short-term debt immediately. Bank of America has so much cash on its balance sheet that it can pay back all of its short- term debt, it could pay back a big chunk of its long-term debt and still have excess cash on the balance sheet. You can't break the bank by driving the price of the stock lower, particularly if the bank is as cash-rich as this one is with deposits pouring in as fast as they are."

http://finance.fortune.cnn.com/2011/08/23/bove-bank-of-america-is-solvent/

[Po_d Mainiac]

6. It makes a hellova difference if they are holding their own stock

But if their past accounting is any sort of guideline, they will carrying that stock on the books at $13.50 all the way to when it's de-listed and consigned to the OTC board under the symbol OTC:BACTQ

[Turbineguy]

3. Take your deposits out early

[Po_d Mainiac]

7. Why anyone has any sort of cash account

with a TBTF is beyond comprehension.

The banksters have fucked the world, and continue to do so unrestricted. They openly lie about everything from the quality of their loan portfolios to the accuracy of documents submitted to courts of law. Either wood be cause for you or I to be heavily prosecuted.

There is not enough money to cover insured deposits in any one of the TBTF's without blowing the Fed spending cap ceiling and adding a couple zero's to future FRN's that will need to be printed.

Paulson's 3 page draft bill will look like a book compared to Turbo Timmy's single paragragh stating, "just give them the money, and run (fast)" "PS by the time you read this I will be a resident of the Cayman's"

[bvar22]

4. Interesting site, but Black Humor LOL.

This is the headline graphic at that site:


I KNOW I have a twisted sense of humor,
but that made me laugh.

I personally feel we (The Lower 98%) are headed to some very BAD times,
and neither political party is concerned about us.
They seem to be obsessed with grabbing all they can,
and closing the "security" gates to the lifeboats for those of us NOT on the Luxury Decks.

Solidarity!
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[golfguru]

8. Debt is the Satan, always tempting, always ending in disaster n/t

[roamer65]

9. Your money is perfectly safe in US banks.

If you have $1000 dollars in a US bank, you will always have $1000 in a US bank.

It just not may buy you very much when the Federal Reserve is done guaranteeing it.