The American banks' exposure to credit card loans is $900 billion . It is to be discovered how much of this unsecured loan is subprime or worse. At least home loans are partially collateralised.
Northern Rock has put those in Granite; the Bank of England 's $60 billion is collateralised with what's left.
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True. $915 billion, to be precise. Roughly twice as much as their total subprime loans. Bad bad bad.
What is inept is Brown's failure to reappoint Mervyn King at once, before government temporising gives the excellent governor a good reason to refuse re-appointment.
Brown believes King damaged his chances of winning a November election, and the fall out from failing to go to the country in November is now so great he probably thinks King is partly to blame for that.
The Governor acted to protect the country from inflation and behaviour contrary to EU commitments that Brown is so very eager to add to as he signs up for more on 13 December. It is to King's credit that he would not fall in with Labour corruption and hidden dealings, but it is not to his advantage with the Leader or his regime. It would be most surprising if he were to be offered a further term, unless another administration is in place by early next year. The penalty for thwarting the Leader's personal ambition is annihilation.
Do you agree with this analysis?:
http://market-ticker.denninger.net/2007/12/moneycredit-cycle.html
P.S. please don't mind the cussing on that site, it seems to be par for the course in the Redneck Riviera.
If I read the right post (the link had to be cut short to work) then yes and no, S.
Yes money is debt that could be created by the government and given crdibility just by the fact that it could be used to pay tax, but no, you can't add up the value of all credit worthy assets as if the value was pre-determined and immutable; it is itself dependent on the interest rate, on expectations, on the very amount of money and credit outstanding.
The notion of reset is nice; but when the point of reset is reached is unpredictable. Also the state in its historical and complex establishment shouldn't be thought of like the individual, who cannot issue money, not having the credibility. As well debt and money are fungible only at market prices. And interest is charged because of the intertemporal dimension of the transaction, as well as because of risk, and even if there were no risk.
So the answer to your question seems to be No, but there are some good bits there.
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