USA was 3 hrs away from Economic, Political Collapse... last Sept.

POSTED BY: pizmobeach
UPDATED: Tuesday, August 4, 2026 11:44
VIEWED: 42658
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KWICKO

Friday, February 13, 2009 6:42 PM

Quote:

Total Liabilities: $892,378 Million
Shareholder Equity: $12,452 Million

892,378 / 12,452 = 71.6

The GAAP Carrying values from the same sheet paint a different picture though:
Total Liabilities: $885,918 Million
Shareholder Equity: $41,226 Million

885,918 / 41,226 = 21.4

Am I the only one looking at those two sets of numbers with the :shock: look on his face?

I mean, they're accurate to within plus-or-minus fifty per cent, eh?

Scary shite.

Mike

"It is complete now; the hands of time are neatly tied."

CITIZEN

Friday, February 13, 2009 6:55 PM

Quote:
Originally posted by Kwicko:
Am I the only one looking at those two sets of numbers with the :shock: look on his face?

I mean, they're accurate to within plus-or-minus fifty per cent, eh?

Scary shite.

Good ain't it. Reading through their criteria, I would actually lean to the first set being more accurate. Despite the GAAP figures being industry standard, they seem to be based on how much things should be worth, rather than how much they are worth. If I'm reading it right it indicates the GAAP values are the 'on books' ones, and the Fair estimates are an estimate of their actual worth.

Of course to admit my own bias, the first set are the ones that support what I said, and the second are more in line with Signym. However the value of the shareholders equity is how much it is worth, not how much it was bought for, or how many dollars were put in. The sheet seems to indicate there's nearly a $30,000 Million dollar deficit there. Maybe Signym can weigh in?

EDIT:
Also the estimated figures are more in-line with those of Freddie Mac.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

SIGNYM

Friday, February 13, 2009 7:24 PM

Ugh. Too much accounting!

My brain... I can feel it going... Dave... stop.....

Been dealing with professional crisis, family problems and personal illness so, on a quick note:

My understanding is that capital calculations are VERY rigidly calcuated. Tier I capital includes common and preferred stock, retained earnings, capital surplus, treasury stock, reserves, and stock options which are under the sole control of the institution. I guess that's all good unless the value of the stock drops significantly, in which case the institution's capital reserves suddenly start looking thin.

The problem is that an institution's stock price can drop for reasons that have nothing to do with the soundness of institution itself or of its underlying investments, including general market panic. In fact, some of the more conservative institutions were "negatively rewarded" by a drop in stock prices because they weren't offering the highest rates of return (generated by predatory lending).

I dunno. It's all a swirl to me. I try to follow it: mark -to-market accounting, CDOs, tranches, mezzanine products, calls and puts... but none of it really makes sense. It's gone way beyond the simple concept of making and selling goods and into the very stupid concept of making money with money.

Ask me in about a year if I've got it figured out. Maybe by then, I will have.

---------------------------------
It's the end of the world as we know it, and I feel fine.

SIGNYM

Friday, February 13, 2009 7:27 PM

BTW- thanks for linking that report! In my quest for a better general education, I'll do my best to read it!

---------------------------------
It's the end of the world as we know it, and I feel fine.

KPO

Friday, February 13, 2009 7:52 PM

Quote:
Originally posted by rue:
kpo

The 'weight' that you seem to think is 'soft socialism' is actually the fuel that keeps capitalism running.
B]

This strikes me as a poor analogy - surely people (their talents, efforts and enterprise) are the fuel in the capitalist engine? There is therefore an economic argument for taking care of people, with social welfare - as well as obvious moral arguments. But you don't think that there is a balance in this, that spending more and more on social welfare can place a burden on an economy?

And of course the US is already balancing itself, spending significantly (tho not as much as other countries) on social welfare.

So what you guys are contrasting as black and white, capitalist and socialist (in order to claim a victory for socialism), are just different shades of grey - and not even of the engine itself, but the fuel...

Because, I would say that all of the countries you compared have *black* capitalist engines, it is only the fuel which is a different shade of grey (in that the welfare of the *people* is socialised to a different extent).

By my definition of socialism it is an engine not a fuel(primarily a model for industry, right?), a white alternative to the black capitalist model. We see many well functioning capitalist engines, with some adjustments to stop them blowing up (they sometimes fail) - why are there no well functioning, white socialist engines? Is the idea of one just a pleasant fiction?

I don't mean to keep challenging you specifically Rue, by the way - I think by chance i may have been singling you out a lot lately... it's nothing personal!

Heads should roll

RUE

Friday, February 13, 2009 7:58 PM

After investment banks pushed the federal reserve, the capitalization rate dropped to as low as 33 to 1: http://www.nytimes.com/2008/10/03/business/03sec.html?pagewanted=all
Agency’s ’04 Rule Let Banks Pile Up New Debt
At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.

Fannie Mae and Freddie Mac, which don't write loans, originally had 80% capitalization requirements, which were dropped to 70% in 2008 to help liquidity.

I couldn't find general figures for US commercial banks, but my recollection is somewhere around 2%, or a ratio of about 50 to 1.

***************************************************************

Silence is consent.

KPO

Friday, February 13, 2009 8:00 PM

Quote:
Originally posted by SignyM:

FWIW, what the right wing refers to as "socialism" fails to meet the most basic definition. So maybe we could call it a "welfarism" but not socialism.

B]

I agree with this (only just saw it), seems like a correct distinction.

Heads should roll

FREMDFIRMA

Friday, February 13, 2009 8:00 PM

Ouch, glad I don't have my money in that system.

Although right now I got as much in metal and stones as imma sink there, and while the ammunition* markets doin pretty well currently, imma lookin for other investments into hard, tangible goods, myself - might be able to pick up some bargains given the current economic status.

*I got my hooks deep in some folk at Igman, by virtue of personal contacts deployed there who spoke the language and experience with metal trade/sales contacts which were useful to them.

Ergo, what with all the loons stocking up for doomsday and double-jumping the price of 7.62x39mm there's certainly a buck (BAM) to be made, especially when you can clout it to Euros at 2 fer 1 and then from there to USD for about 10%-15% more over.

And that's just on hooking up folks to the supplier without ever touching the product.

Personally, I find it hi-larious and ironical that so many of the white supremecist bastards buying ammo right now are doing so from those "lesser" peoples they supposedly hate so much, those of whom who KNOW this are both gouging them and laughing up their sleeve about it.

"It's nice to give them a REASON to dislike us for once, hahahahaha."
*said as he was tallying the books, too*

-Frem

It cannot be said enough, those who do not learn from history, are doomed to endlessly repeat it

FREMDFIRMA

Friday, February 13, 2009 8:03 PM

Quote:
It's gone way beyond the simple concept of making and selling goods and into the very stupid concept of making money with money.

That would be the original definition of Usury.
http://en.wikipedia.org/wiki/Usury

Which has been considered a nefarious practice since it was invented.

EDIT: and on second thought, this is one place where Islam does a better job of things than we do, for all it's flaws.
http://en.wikipedia.org/wiki/Islamic_banking

-F

CITIZEN

Friday, February 13, 2009 8:04 PM

Quote:
Originally posted by kpo:
By my definition of socialism it is an engine not a fuel(primarily a model for industry, right?), a white alternative to the black capitalist model. We see many well functioning capitalist engines, with some adjustments to stop them blowing up (they sometimes fail) - why are there no well functioning, white socialist engines? Is the idea of one just a pleasant fiction?

I think it was earlier in this thread that I original asked, but could you provide any examples of purely capitalist economies?

I'd wager you can't find any. There isn't any, because Capitalism can't stand alone any more than socialism can, so declaring a victory for capitalism there would seem to be doing for capitalism what you accuse Rue of doing for socialism.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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