The thing most people don't get about jubilee is that everybody knew it was coming, knew when it was coming and knew how to protect themselves.

If it was 10 years till jubilee, you couldn't get a 15 year loan. It wasn't about wiping out debt wholesale, it was about an orderly wind down of loans. When the date came, there were *NO* loans outstanding. Since any that were outstanding would be wiped off the books, only an idiot would still have loans out.

So all the well connected clients that ate the earnings lie last year are screaming, "get these prices up so I can exit these turds!".

C'mon retail, do your part.

@Frat
I am afraid there is a real possibly this can last far longer than any of us could ever imagine. As the last few years have shown, this can will be kicked!

The United States Treasury securities market with its $1 trillion per day of turnover, is the broadest, deepest, and most liquid market in the world. It is capable of absorbing trillions of dollars of securities and turning them into cash within a few hours – a capability unique on this planet. Therefore, it is hard to imagine the United States sinking before a country like Japan with a debt/gdp 2.5x+ the size of our debt load.

I don't buy the mantra "Bernanke saved us from a repeat of the Great Depression", as money printing, bailouts, off-balance sheet crap, endless deficit spending and high taxation has never proven success over the long-term when reviewing the history of economic activity throughout the world. It is just hard for me to see focus being souly on the US with all the problems in PIIGS, Britain, Japan and then potential real estate busts in Australia and Canada.

One question I have is directed toward our annual deficit: Since the annual deficit shrunk year/year from 2010-2011, adding National Debt in 2011 1.206T compared to 1.767T a year ago, is it conceivable we could see a 2012 deficit south of $1 trillion if the rosiest of scenarios were to unfold this year (Rates stay subdued, Growth is 3-5%, Stock market rallies between 5-10%, bank balance sheets keep breathing, more revenue is collected from the expiration of the Bush tax cuts, etc.)???

As a bit of expansion on the jubilee thing:

The people I usually see calling for one simply don't get it. If we repudiated all debt in the US, that means every single loan outstanding in the entire nation would be called. EVERY ONE. Yours too. And your employer's loans.

Now if we did it like it was done historically it would mean that we set a date, probably need to be 20 years down the road or more, when it would happen. Then we could see an orderly wind down of loans prior to that date. Still wouldn't be pleasant, but might be survivable.

Jubilee??? Can you give me a few minutes to max out my cards please?

Hell I don't have any problem with Jubilee. But if you do that you might as well take away all assets too. You know it's a balance sheet. What's fair is fair. Hell let's just go straight to socialism.

Those debts that can't be repaid won't be repaid. That includes the debts of sovereigns. Personally I say just print to pay it off. Pay it all off. But at the same time you have to enact a constitutional amendment that says the government can not spend, except in war time, more than it collected the prior year.

TMD: That's exactly what I was talking about (Not trying to pick on you.)

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Can you give me a few minutes to max out my cards please?

A real jubilee is NOT about letting you get away with ripping of the people loaning you money.

See, they would know about the date it happens as well as you do. You simply wouldn't be able to GET a loan with terms that cross that date. If you default on your loans, it's no different than it is now - they can still come after you.

Now if they're stupid enough to loan you money with terms that cross a jubilee date, yea, max out your cards - because that's on them, not you. But I don't imagine too many lenders would stay in business if they did.

There would never be Jubilee at a consumer level. NEVER NEVER NEVER. The want of the Government is to keep the people enslaved to the State.

SLAVERY IS FREEDOM

2+2=5

WAR IS PEACE

IGNORANCE IS STRENGTH

Do Japan's foreign reserves offset their liabilities to a large extent?

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If you don't like the terms on loans from people who want to borrow your money, don't lend it!

Good point. While you are at it, care to tell us who you do think is worth lending money to currently on a short and longer-term basis and the safety of each? This is the market-ticker after all and I think it would be useful to most. I know you are not a fan of municipals broadly like you used to be.

Margin: Nobody, at present.

That's what financial repression DOES! It makes lending unattractive.

So why are you doing it?

I personally don't think it's safe to lend money on anything past a couple of years to any of the major sovereign countries. JMTCYMMV

Here comes the big "loan loss reserves" cookie jar earnings reports we have been seeing for the last year.

2 questions, how much have they lost in interest rate swaps or on CDS or on sovereign debt?


3 What has happened to their capital ratios now that its obvious CDS on sovereign will not pay so is not a genuine hedge?

You cannot net net out a position when the hedge doesn't exist.


Does anyone have a good bank earnings release calendar?

maybe Ill follow this round of releases just to see what BS they try and get away with this time

TIA

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Margin: Nobody, at present.

That's what financial repression DOES! It makes lending unattractive.

So why are you doing it?

I understand financial repression. NOT A FAN! So if you don't think anyone is safe, did you dig a hole in the backyard, go all-in Treasury Direct, or something else? I hope you don't have the hole in your backyard, since there is this thing called Zillow, which has addresses!

This will be good:

http://www.zerohedge.com/news/stunner-ba....
Stunner: Bank Of America Responsible For 14% Of Projected 2012 S&P500 Earnings Growth

If there is one piece of data that should make you scrap all optimistic forecasts for 2012 year end S&P price targets and EPS forecasts, it is the following chart from Morgan Stanley which shows the relative contribution of financial stocks to the change in full S&P earnings (combined they account for 26.3% of the change from the actual $883.5 billion to $970.6 billion). Specifically we are looking at Bank of America, which with a forecast surge in Earnings from ($2.5) billion to $10 billion accounts for 14.1% of the entire change in S&P earnings forecasts. And since the S&P is simply the Earnings number multiplied by some multiple, all consensus views that have 1400 as their 2012 year end forecast rely on bank of America to account for nearly 20 S&P points! The US market has now devolved to such a sad state when the most insolvent of all US banks has to carry nearly the bulk of earnings growth in 2012. At least with Apple they produce something - unfortunately in BAC's case it is only legal fees for the avalanche of endless litigation against them.

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For those who are unaware, banks make money by making loans, primarily.

Well, that's the idea, anyway. The way the banks make money now is by hiding their losers off balance-sheet, or by forcing them on the taxpayers, and after having themselves declared "systemically important," adjusting their on balance-sheet exposures accordingly, crashing the system and cashing out on their leveraged derivative bets, also at the taxpayers' expense.

In real life, if there is such a thing anymore, all of the major banks are arguably insolvent. So, in reality, they're not making any money at all, they are merely having it transferred to them by their political operatives in Congress and the Federal Reserve Bank. This, after all, is the modern purpose of the Congress, and has always been the purpose of the Federal Reserve System.

Talking about "bank earnings" is silly, unless one factors in all of the market distortions caused by all of the interventions, and all of the bailouts, and all of the dead-fish-hiding, rehypothecation, etc.

What the hell are "assets," anyway? How can anyone make an informed investment decision in markets like these, where virtually no data has been untouched by intervention? The economy is a sham, projected earnings are a sham, balance sheets are a sham, capital positions are a sham, contract law can't be enforced reliably, the capital structure has been laughed at by BK courts, corporate welfare is rampant, and the government is locked on an unsustainable path.

All of these shams are condoned openly. OPENLY.

These bank earnings include banks borrowing from the Fed discount window at near zero, and then depositing them with the Federal Reserve itself as bank reserves against loans, and earning interest from the Fed that gives them a positive return.

Wish I had a bank that works like that.

Except that the amount involved in doing that is tiny. Yeah, it's a positive carry, but nowhere near enough.

If this belongs in "Newbie" forum just let me know.
Is the way home loans are structured in Canada that much different than the concept of "Jubilee?" When I lived in Canada home loans were typically for five years with a balloon at the end. After five years you would refinance and/or renegotiate your home loan ..or move. Isn't that something like Jubilee? Or am I not understanding a subtle difference here?

Dr: No, it's not. However, if we were to have a jubilee, that's the kind of loan you might expect 5+ years before the big date.

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could the Bernank and fed.gov REALLY keep us in a 20 year 'limbo' like what's gone on in Japan? That's my biggest fear - that they purposely stagnate us versus the KABOOM taking place.

I would like to revisit this post - I share that concern. Possibilities (or continued theft and corruption if you prefer) are held in check by a wary, active public, not laws on the books. Pacify the public and you can keep on kicking.

Math is math, but if no one grades the homework...

Peterb, they aren't the banks borrowing at the Fed window. They are the banks that end up with the funds borrowed at the Fed. But, this money isn't borrowed, it is the QEI and QEII.

The TBTF banks are the ones putting the money out and they aren't doing it by lending. Just watch the markets. Everything goes in the same direction in general and it goes there in sudden bursts. John Q doesn't suddenly rush in and push prices in tens of trillions of dollars of assets of all kinds all at once. I saw a chart of the ESH12 yesterday. 20 point gap. While the market was open(probably during that 15 minute pause before the NYSE opens). Think these ****s didn't know what was coming down the pike? Think their analysts put out what they figure the real number is? Entities with access to unlimited money who have the counterfeiting license and a bald, bearded jackass to back them up move markets where they want over the short term. I think they will be cornered soon.

Think not? The primary reason for failure to earn more money this year was the markets went nowhere and the people and entities they are trying to pawn all this off on don't have any money. The banks are gaming these markets, sending their serial liars to CNBC and hoping to cash out of these moves. Remember, they mark to market what suits them and mark to fantasy what is adverse.

The primary purpose of the USA in the scheme of the world is to provide credit for the rest of the world to lever up. Americans have been collateralized by their own banks, politicians and various lawyers. We are in the debtor/creditor relationship where the debtor needs more money to keep going and the creditor goes broke if he fails. We think of this mess as debt or debt money, but is actually the life blood of the credit system. That chain has to remain intact or the bubbles supporting the various economies around the world deflate while still in the hands of the peddlers. To wit the multi-trillions of China and all the nonsense surrounding it. Clearly they have to have more as they are levering their own game as fast as they can. See if they get positive growth without more dollars. In fact, what other paper would they want to have, their own?

The point of the matter is whether the system can actually grow under the status quo? Banking is nothing but a series of numbers on a balance sheet. What you don't see is the collateral behind the numbers. Banks are chomping at the bit to buy their own stock back when most of them are insolvent. One look at the last time around the block shows how poor a business transaction that was.

Note the chart above showing the bank earnings estimates. Take a look at Goldman. Seems in 2010 they paid $30 billion in bonuses. Who is going to get the bill when this one blows next time? The shareholders to start.

BTW Karl. I watched the Max Keiser interview and I think you made the best points yet. This story of bankers and politicians goes back a long ways and being both are extracting gains, the gains can only be coming from one group, the rest of us.

As of Nov 30, 2011 excess reserves were $1.497 trillion earning an interest rate of 0.25%. That equals $3.743 billion in interest a year.

http://www.federalreserve.gov/SECRS/2011.... P.5 footnotes

I couldn't quickly find a current figure for required reserves, but in 2004 required reserves were $11.0 billion and excess reserves $1.6 billion. My how things have changed. $1.6 B to $1.4T in 8 years?

http://www.federalreserve.gov/pf/pdf/pf_.... p.32

The discount rate is now .75% so I doubt banks are actually borrowing there.

Fed Funds, on the other hand, are going for 0 to o.25% interest. I bet if you are Goldman Sachs you borrow from Fed Funds at a 0% Fed Funds rate, and if you are Joe Six Pack Savings and Loan you get .25%, allowing you only to break even.

A lot or little paid interest, you decide.

One thing is for sure, you can't get any of it. Thats only for the privileged few that this system is built to maintain.

It's a $3.7 billion subsidy from Congress to the banks. That subsidy goes on the budget deficit, basically.

Now what's the operating expense profile of the big banks? Revenue for BAC alone is ~$75 billion annually. Of course there's a hell of a lot more banks than one, but this makes the point quite clearly -- the total amount involved here is not very large.

Should there be such a subsidy? No. But is it material in the numbers?

Uh, no.

I looked a while back and I started looking again recently, I can find no documented historic records where Jubilee was adhered to, in the bible or in history books. It appears a practical concept in the same way that Karl mentions 1 dollar of capital.

I think what lives on in the original concept are bankruptcy laws. You get your stuff back and I don't owe you any money. The other concepts of Jubilee have been perverted. It seems like there is no real non-vested third party who can give a fair ruling (SEC, FED, gov) and it seems like there is no hard date cap on the length of loans (example companies who are classified as person yet have the potential of immortal lives who can stretch out their financing well beyond the life span of even the longest living humans).

Since Jubilee appears to have been wishful thinking at best, the only thing I would liken it to is a complete collapse and reset... which is where we are headed maybe?

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I understand financial repression. NOT A FAN! So if you don't think anyone is safe, did you dig a hole in the backyard, go all-in Treasury Direct, or something else?

The fact you mention Treasury Direct as a refuge from financial repression indicates you have zero understanding of it.

You need to go out and do your own research.