Tuesday, April 08, 2008

How The Banks Bet Your Money UK & US

If you really want to understand the current Housing, Banking & Credit Crisis, this series is an Absolute Must Watch

A global credit crunch has put Britain's banks in a crisis that threatens the future of jobs and businesses and may even trigger a wholesale recession.

Private equity financier Jon Moulton delivers a stinging rebuke to the banks for causing this financial meltdown and explains why the British taxpayer will now pay the price.

America has been hit hard by the sub-prime crisis. The social cost of financial failure has been enormous. An epidemic of home repossessions has left thousands of houses abandoned and boarded-up: whole suburbs are falling into disrepair and dereliction.

Financial institutions in America and in Britain had poured billions into investments backed by these mortgages. As more and more people have defaulted on their mortgage repayments, financial markets have collapsed, causing a crisis that has rippled across the Atlantic, sending the City of London into turmoil and pulling the plug on one now infamous British bank.

The question is: will it stop there? This is a story about the destructive power of finance: what happens when banks are driven by short-termism; when bankers are rewarded with vast bonuses, free to operate under inadequate regulatory supervision, and with the complicity of a government too in awe of big business to step in.


Part 1



Part 2


Part 3


Part 4


Part 5

6 comments:

Ellen said...

Hi Randy,
I've been reading your very informative blog for a while and want to say a big Thank You for taking all the time you do to write and share your intelligent, well-informed perspective.
Will you also share where you invest, or even hypothetically what you would do with your money in the next year for instance.
With appreciation, A grateful reader

Randy said...

Thanks ellen,

***BIG FAT DISCLAIMER--NOT INVESTMENT ADVICE, but merely my opinion***

Physical Gold/Silver--only going higher as the gvt lowers rates and prints gobs of new money to monetize our failing financial system and prevent deflation/depression.

Energy--again same logic; OPEC wants more devalued dollars for the same tangible product

Agriculture--Food is getting scarce and world demand is growing

Merk Hard Currency Fund is a good bet as it seeks to protect against the US dollar depreciation by investing in to a basket of hard currencies.

I still invest in 401K because of tax benefits and 5% matching contribution (free money), but currently very conservative with allocations--predominently treasury funds with a bit of Bond funds added--I feel(as this crisis continues to unfold) we will soon see major downward corrections in equities

Regards and thanks for your readership. I'm glad to help others see what's taking place because you will not get the truth from our mainstream media

Regards
Randy

Ellen said...

Hi and thank you for that. Not surprisingly, I'm also in sync with your investment strategy although I also like certain currencies against the dollar such as swiss francs, yen and renminbi, and a few others.

You mentioned the Merk fund. Did you see that the Asian Hard Currency Merk fund just started trading 4/1? I had to get my broker to do it as a paper trade because even giving them the CUSIP #, and even though who I use had a relationship to sell the fund, it wasn't showing up in their system.

This fund will let you have some play in the appreciation of the Yuan and doesn't have the risk that CNY has by being the fund of a bank, and doesn't have the tax disadvantage of being a single currency fund either. Of course Merk charges 12b1 fees every year and that's the downside.

In this market I also like global (ex-US) bonds like Pimco's unhedged foreign bond funds.

Speaking of Pimco, I respect Bill Gross' opinion and he is one of the sound voices I listen to who says that inflation is eminently controllable by raising interest rates when and as necessary (although the two Fed dissenters this past meeting worried that we might be waiting too long to disastrous conclusions).

Bill Gross says that Deflation is much more pernicious, and that it will be a natural consequence of the recession.

Which do you think will win out between the deflationary pressures of the recession or the inflation we're seeing growing now? Deflation is the scarier force I hear because it's so hard to turn around.

Thanks again, Ellen

Randy said...

Ellen,

You sound very knowledgable. Good on ya.

Yes, I saw Merk recently opened and asian currency fund. I really need to read up on it some more.

Inflation vs Deflation: Personally I think inflation will dominate for the next couple/few years (as the fed continues to break out new monetary tools and inflate/monetize) to be followed massive deflation ~ 2010-12 (Kondratieff Winter )

QUALITY STOCKS UNDER 5 DOLLARS said...

That was an outstanding video.

PENNY STOCK INVESTMENTS said...

Round up the banksters.