The FDIC head Sheila Bair reiterated her expectation of $65 billion in losses for the FDIC’s fund because of bank failures during the next five years in a speech that hit the newswires around 12:30 p.m. “That tipped us over,” said Costel Goga, chief market strategist with JonesTrading in California. The Financial Select Sector SPDR, an exchange-traded fund that reflects the bank and lending sector of the S&P 500, was off about 16 cents when Bair’s estimate hit, and has since more than doubled those losses, off 40 cents, or 4.6%, at $8.18. “People are starting to get the feeling they’re not out of the woods” and could be forced into more capital dilution as was its largest U.S. rival, Citigroup Inc. (C), Goga said.
From Wikipedia regarding hyperinflation
Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:
* Outright lying in official statistics such as money supply, inflation or reserves.
* Suppression of publication of money supply statistics, or inflation indices.
* Price and wage controls.
* Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or something similar.
* Adjusting the components of the Consumer price index, to remove those items whose prices are rising the fastest.
Just think. Our government is going to have a trillion dollar deficit PER YEAR for many, many years to come. China, our best chance at buying enough of our debt to forestall runaway inflation, only buys between $100 to $200 billion a year. The Fed is printing money because they have no choice. The foreign buyers of our Treasuries are all but tapped out.
March 20 (Bloomberg) — Banks will need a “very large” amount of capital from either the government or private investors to ensure their soundness and return to normal levels of lending, former Federal Reserve Chairman Alan Greenspan said.
“Restoration of normal bank lending will require a very large capital infusion from private or public sources,” Greenspan said at a conference in Acapulco, Mexico.
U.S. Treasury Secretary Timothy Geithner said he will soon announce details of his plan to help banks clean up the non- performing assets that are clogging the financial system. Financial institutions have more than $1.2 trillion in credit losses and writedowns worldwide since the crisis began. Many of those losses stemmed from mortgage-related investments that declined with the collapse in the housing market.
Greenspan estimated that banks will need “north of $750 billion” in fresh capital. While some of that may be raised by increased bank cash flows, he said a “deep hole” remains.
