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Monday, June 23, 2008

 

bank capital raising petering out


i mentioned it a bit last week, but here's yves smith with a broader rundown.

at the end of the day, it means exaclty what financial times' writers john dizard and gillian tett say it means -- there must be a massive recapitalization financed by government where private capital is too smart to step in. it is already underway -- the united states has seen the effective nationalization of its mortgage market already.

if it isn't attempted in its fullest -- and even if it is but is unsuccessful at stemming the tide of liquidation -- i've little doubt that depression is next.

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gm - pretty scary, eh? more and more widespread chatter of the "c" and "d" words - crash and depression. i am preparing for one or both, though i expect to be offset by the unprepared. but - fail to plan, plan to fail, for sure.

best, darkcloud

 
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you know, dc, i'm actually a bit relieved to see stockmarket crash calls emerging -- no true crash is so well telegraphed as to have major brokerage houses calling it in advance.

but, while that may portend a more grinding and frustrating zig-zag decline with sharp rallies amid, i don't see how the reality -- consumer pain, pinched banks, much too much leverage and concentration -- allows for optimism. how else can this end but a sizable contraction?

 
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trust me, gm. there is all but no optimism in yours truly here - my wife nicknamed me "darkcloud " because she knows me better than anyone. on another note, i have to say, i find no disagreement with your comment here nor your blog discussions. i confess though - i am well behind Mish, Yves and you on the knowledge and being informed scales. thank God you folks are out there for the rest of us. have a good one. go cubs.

 
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