Chile Forum

I wasn't "shooting" at anyone and (once again) didn't even mention your name, eeuu. There, now I did.

My post was just a mention about how treasuries work(which is much more boring than the sky is falling). And I think there are many financial problems in the US yet as I read some of the various talk, I was struck by the misconceptions of how treasuries are priced and attempted to rectify that-at which I'm sure I failed dismally mainly because facts tend to be really boring, especially about govt T-bills. The theories are much more exciting, to be sure.

And I absolutely abhor most of these huge US banks. But this was simply a temporary program to provide liquidity. They are going back to $250,000 and will go back to $100.000 at some point, which is what it was before all this mess. Many institutions have their own insurance which is greater than FDIC. The best comment I've seen is "why would anyone have $250,000 in a non'interest bearing account anyway?"

I have to say I find it interesting that you apparently believe less government intervention in this case is a bad thing. The govt is not forcing the banks to have unlimited insurance so the other choice would be to force banks to keep FDIC insurance at the higher level, that's a problem too.

FDIC insurance contributes in systemic risk as much as it mitigates it. Discuss.

It appears to me that the citizens of the USA are the only people world-wide, who don't have faith in the dollar.

[[[......why would anyone have $250,000 in a non'interest bearing account anyway?"...]]]]

Simple and many possibilities. I've done it before. Sold a house, put the money into a checking account because I knew I was going to spend it again very shortly. It's not there very long, but it would be the pits if the bank happened to crash that very week and the funds weren't insured. There are plenty of things that might be sold, and the money earmarked to go back out soon. There is no point in putting cash into some sort of interest paying investment if you know you are going to spend it in a week or two. Yacht, race horse, collectors car, stocks, artwork..... tons of options for getting your hands on $250,000 cash and plenty of options for things to quickly spend it on.

And hey, I've got a bit of money in a passbook savings account that pays 0.05%. I have my motgage and automatic payments taken out of that account. It's safe, the balance is easy to keep track of, and it's not so easy for thieves to access.

My aren't we sensitive, I didn't even have you in mind with the shooting comment as I thought we had established a John Hyre truce where we hardly talk to each other in posts.

I made no comments on the role of government in that post as I was just pointing out some change that is about to occur and the speculation about it as MY FOCUS HAS ALWAYS BEEN ON TRUST NO ONE EXCEPT ONESELF IN ONE'S FINANCIAL AFFAIRS making government and government actions irrelevant when push comes to shove.

SInce you are being sensitive and resorted to being on the attack, that change hasn't worked out too well if at all has it?

yea, that dollar / pesos seems to be stuck at 500 or so.

I just got a bad feeling about how the rest of Dec and January is going to play out.

Everyone keeps forgetting the mortgage mess has not played out. One of the latest predictions I heard was that something like 48% of home mortgages in the United States will be under water by 2011. Something like 36% of mortgages in trouble right now are owned by people that have no credit card problems. We got the commercial mortgages starting to come apart in a big way. Don't forget, there are many other assets beside buildings that could also be put in the "commercial mortgage" box such as ships, development projects, and so on.

Everyone is feeling better in the markets, but the markets will get fatigued if real life does not show by say Feb to indicate it is not just the stimulus propping everything up. Consumer spending is not going to do it this x-mas.

Thanks for the explanations about the bonds. It still seems a bit weird (why would you buy something at 0%, supposedly for security, and then resell it? Not to mention the underlying assumptions) but I think I more-or-less get the picture.

James.

jehturner wrote:Thanks for the explanations about the bonds. It still seems a bit weird (why would you buy something at 0%, supposedly for security, and then resell it? Not to mention the underlying assumptions) but I think I more-or-less get the picture.

James.

Because there is an inverse relationship between the 0% yield, price will likely rise. So, you may be able to sell in the secondary market for more money. Yield goes down, price goes up. The same with interest rates. interest goes down, price goes up for bonds. Many businesses like to have cash on their books at the end of the year-for paperwork issues for one.

Thanks for reading the explanation

eeuunikkeiexpat wrote:My aren't we sensitive, I didn't even have you in mind with the shooting comment as I thought we had established a John Hyre truce where we hardly talk to each other in posts.

I made no comments on the role of government in that post as I was just pointing out some change that is about to occur and the speculation about it as MY FOCUS HAS ALWAYS BEEN ON TRUST NO ONE EXCEPT ONESELF IN ONE'S FINANCIAL AFFAIRS making government and government actions irrelevant when push comes to shove.

SInce you are being sensitive and resorted to being on the attack, that change hasn't worked out too well if at all has it?

Tranquillo eeuu, no need to yell. A little funny that the above is followed by your signature "As of 14 September 2009 by personal decree, just a spam killer and observer without an opinion. Carry on. We are all responsible adults." in the post You might want to change that.

The change I assume you mean is President Obama and yes, it seems to be fine. Politics as usual but such an improvement over GW, I can't complain too much. I never thought he would be the second coming as many on the right seemed to think the left thought. As a matter of fact, I don't know anyone on the left that thought that and sort of think the right invented that. But many of us thought he would be a vast improvement over Bush and that still looks to be correct. Of course, I'm in Chile so am not responsible for any of it. but I was happy to see him elected. I am highly amused by online news of the right calling him a socialist(if he were, banks and insurance companies would be state-owned ).

As you said, carry on....end of "attack"

Real funny how the right labelled me and my ilk as lefties putting words into our mouths we never said under the reign of GWB and now the left (after having dumped us as anti-Bush allies) labels me and my ilk as rightist also putting words into our mouths we never said.

But such is the blindness we see in this world.

Signatures come and go. If you don't like it, tough cookies.

Laura55llc wrote:I never thought he would be the second coming as many on the right seemed to think the left thought. As a matter of fact, I don't know anyone on the left that thought that and sort of think the right invented that.

Unless you read the messianic self-referential campaign speeches, that is. This is a ridiculous statement on its face. Enjoy: http://www.youtube.com/watch?v=kbbIQFcEhcQ

eeuunikkeiexpat wrote:Real funny how the right labelled me and my ilk as lefties putting words into our mouths we never said under the reign of GWB and now the left (after having dumped us as anti-Bush allies) labels me and my ilk as rightist also putting words into our mouths we never said.

But such is the blindness we see in this world.

Signatures come and go. If you don't like it, tough cookies.

eeuu, I wasn't saying you, I said people on the right. tranquilo.

I love the signature, don't change a thing!

Otravers, it's politics. I'm surprised you think I buy into it. But I enjoy the speeches much more than GW.

http://www.colbertnation.com/the-colber ... nal-speech

Laura55llc wrote:Otravers, it's politics. I'm surprised you think I buy into it.

I have no idea about what you personally think nor was I commenting on that, but you must have missed a year of gushing media coverage during the campaign and in the wake of the election.