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JP Morgan's "cash position" showed that actual cash held has deteriorated radically.

 
Macatawa
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10/24/2009 09:52 AM
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JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
Look out, as Peter Schiff says, "it is now time to get completely out of dollars and treasury bills."

Possible Credit Dislocation: Be Warned
Posted by Karl Denninger in Musings

[link to market-ticker.denninger.net]

* JP Morgan's "cash position" was analyzed by a writer who published on SCRIBD, which showed that actual cash held has deteriorated radically. By more than half in the last year. The deterioration is continuing, not slowing.

* I am hearing repeated anecdotes from multiple areas that foreclosed property held by banks with multiple full-price offers that include a financing requirement are being sold instead to people with actual cash at radical reductions from that price. This implies that these financing contingencies are regarded as not only potentially no good but factually no good, as if the banks know for a fact that the credit pipeline will (not might), within weeks or months (in the time required to close), disappear. There is no other rational explanation for this behavior.

* Citibank's credit-card terms change implies a willingness to accept and even provoke a complete and intentional destruction of their credit card business as a very high probability outcome, given that nobody in their right mind will accept a 30% interest rate who has an alternative. The obvious implication is that only those who can't transfer balances out will remain and if your credit is that impaired there's a good chance you will default - either intentionally or otherwise. This too implies foreknowledge of a near-complete impending freeze in the credit markets.

* The change in terms on credit accounts is NOT confined to Citibank. I have received a fax from a customer of Infibank with substantially identical terms, in which both the standard and penalty rate was adjusted to 29.99%. This strongly implies that whatever Citibank smells the problem is not confined to them.

* Both of these credit card "adjustment" letters are of course marginal rate changes. That is, they are both based off the PRIME rate. The importance of that is missed by many. Don't be one of them (more on that below.)

* I recently received a back channel communication indicating that The Fed is aware that this has been and still is a solvency problem and has so briefed certain members of Congress. This from a source believed reliable, but which cannot be independently confirmed.
We are all agreed that your theory is crazy. The question that divides us is whether it is crazy enough to have a chance of being correct. Niels Bohr
Anonymous Coward
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10/24/2009 10:07 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
The simple fact of the matter is that all of the Banks that are main holders of mortgage backed securities are technically bankrupt.

B of A, Citi, Chase are all BK! They are trying to scavange money in any way possible to continue to make payroll. My guess is that without another massive Fed bailout, they will collapse within days.
mothra
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10/24/2009 10:09 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
I don't always agree with denninger but he is a pit bull when it comes to the larcenous banks. The enemy of my enemy is my friend type thing. Preach it karl, maybe it will do some good.
Anonymous Coward
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10/24/2009 10:10 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
damned bump
Macatawa (OP)

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10/24/2009 10:21 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
Here is the Peter Schiff video as well.


We are all agreed that your theory is crazy. The question that divides us is whether it is crazy enough to have a chance of being correct. Niels Bohr
anonymous
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10/24/2009 10:32 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
folks swamped thier budgets then they had no financial breathing room any more then charged food gas med etc.. stop building a lifestyle system you cannot afford later on. live on one income. you have to do it any way if one of you is out of work. couples should stop atonce building a two income lifestyle.. long term economic is not gonna get better for years..
Anonymous Coward
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10/24/2009 10:43 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
[link to www.ft.com]
Anonymous Coward
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10/24/2009 11:05 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
Where is all this cash the Fed is printing? China?
Macatawa (OP)

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10/24/2009 11:19 AM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
Where is all this cash the Fed is printing? China?
 Quoting: Anonymous Coward 767411


I think all that cash is about to explode into hyperinflation as much of it is sitting in the holdings of foreign governments who are now in the process of dumping it on to the market thus forcing down the value.
We are all agreed that your theory is crazy. The question that divides us is whether it is crazy enough to have a chance of being correct. Niels Bohr
Anonymous Coward
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10/24/2009 01:10 PM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
Chase is Bankrupt!
Anonymous Coward
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10/24/2009 01:11 PM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
If you see gold and silver going down, expect them get short in cash.
Anonymous Coward
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10/24/2009 01:11 PM
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Re: JP Morgan's "cash position" showed that actual cash held has deteriorated radically.
If you see gold and silver going down, expect them get short in cash.
 Quoting: Anonymous Coward 801745

i meant up

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