Fortis "predicts a total collapse of the American financial markets within days to weeks."

[Pale Blue Dot]

http://www.telegraaf.nl/dft/nieuws_dft/1359966/__Amerikaanse__meltdown__reden_geldinjectie_Fortis__.html?p=17,1

The original article is in Dutch, but DUer Zam has translated part of it for us:


Fortis predicts a total collapse of the American financial markets within days to weeks. According to Fortis, that explains the series of measures it took last thursday to increase its solvency with 8 billion euros. "We have been saved in the last minute, the situation in the US is much worse than originally anticipated.", says Fortis chairman Maurice Lippens, who maintains that CEO Votron will stay on. Fortis expects bankruptcies among the 6,000 American banks with low coverage ", but also Citigroup, General Motors, a complete meltdown is starting in the United States."







Another European bank joining the chorus.

[Fed_Up_Grammy]

1. And the sky is falling too !

[Pale Blue Dot]

3. Laugh all you want, but I think the sky IS falling.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3533494

They are the third European bank to announce this within the past week.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x39790

Merrill Lynch analysts are releasing similar warnings.

Keep laughing! :D

[Warpy]

17. The fall is in slo-mo which is too slow for fools to notice

Consider that the Dow has lost half its value since 2001 just from the fall in the value of the dollar.

Consider that the jumbo loans issued in California, especially, will start to reset through 2010, and that they're going to take institutional investors with them when they default.

By institutional investors, I'm talking about banks, pension funds, brokerages, and states, themselves. This will happen worldwide, thanks to the unregulated hedge funds that snipped those loans into little pieces and marketed them around the world as securities that were so exotic nobody knew what the hell they were and which institutions kept bidding up to generate paper profit.

Consider also that the derivatives market, estimated anywhere from four to ten trillion, is going to be the next thing to collapse.

All this means is that all of us are going to be in a world of suck for the next decade, at the very least.

[shanti]

26. and to all the baby boomers

(of which i am one)....happy retirement! :(

[A HERETIC I AM]

34. You have stated numerous times in the past that Hedge Funds issue securities.

Do you have any evidence for that contention?

I mean, it sounds good and everything, but what exactly are you suggesting? Is it your opinion that Hedge Funds issue bonds? Or that they structure CDO's, CMO's and other debt securities and market them? Do you have any proof? Because if that is what you are suggesting, I would be very interested to see that proof. I look at a fair amount of the Bond market on a regular basis and I have never seen a bond issued by a Hedge Fund.

I don't buy it. I think the idea that Hedge Funds actually underwrite or originate debt securities is wrong and demonstrates a lack of understanding of what these funds actually do with their investors money.

They invest in debt, to be sure, either by buying it outright or funding it, but marketing debt? Underwriters, Leads and Co-Leads create bonds and Syndicates offer them for sale. Those include the major investment banks and brokerage firms, NOT Hedge Funds. It's like suggesting that a Mutual Fund company issues bonds. It does not happen.

Where do you get the idea that the Hedge Fund sector is actually underwriting and/or marketing bonds?

[bbinacan]

I bet they shorted

the US markets before this announcement.

[indepat]

2. Oh, the joys of 'puke governance: it just keeps on giving through insane tax and fiscal policies

and pre-emptive wars. :D

[tritsofme]

4. Oh woe is me! The end is near!

How many times have we heard this?

[Pale Blue Dot]

5. See post #3.

I'll check back in a month or so and see if you're still laughing.

[NMDemDist2]

8. well, the folks in the Economy forum saved my ass in 2006

screaming about the housing bubble.

I sold the AZ house for $225K. today (almost exactly 2 years later) the house is worth $150K

if you can get a mortgage.......

something's gotta give, especially with all the mortgages still in the pipe to reset.

read it and weep..

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x39909


there's not any more rabbits left in the hat to bail out the big $$$$ guys. and they're never the ones that pay, we (the little guys) are......

[Lone_Star_Dem]

29. A great deal of people here were pooh-poohing the notion that there even was a housing bubble

As it became apparent it was a reality you heard that less, then finally not at all once the US MSM began admitting it.

As far as the financial markets go right now, I'm not optimistic.

The shit storm has only just begun and the worst is yet to come.

I'm really glad to hear you got out of your home while it was high. It does my heart good to hear a success story.

[roguevalley]

58. I have zip in the stock market. I pulled it for the shortterm loss and

have it in CD's for now. I can't believe there are some laughing here. They won't be soon. Thank god I am old.

[tavalon]

50. Have you noticed how expensive things are getting?

Or did you not notice the water getting hot?

[readmoreoften]

54. Yo, lobster. I got news for ya. The news is: You're a fucking lobster.

But you're basing reality on how your happy little lobster-ass body feels in the nice warm bath water instead of listening to all the other lobsters who taught themselves how to read and understand pictures. Cuz those lobsters hopped out the tank and stole a World Book Encyclopedia Set from the B. Dalton one shop over and they when they opened up the letter L they stood and said: holy fuck we really are lobsters.

And so they ran all the way back to the upscale seafood store to try to and save dumb-ass lobsters like you. But you don't believe them. Because the bath is just a little warmer than it was yesterday. And the nice congress folks and news casters in the white coats gave you some creamy yellow oil for your shell. No! You're not gonna get ett! No! You're the fucking sheik of araby over there in your whirlpool.

It's like fuckin Plato's "Allegory of the Cave" with you people! Only with lobsters & malls!

[SmileyRose]

6. LOL

if he'd have said in the next year or two I'd find it barely plausable. Fortunately, no matter how much shit hits the fan -- and it will in a big way -- the Chinese can't afford to let this entire country end up in tent cities with no one shopping at Wallyworld.

[Pale Blue Dot]

7. You're assuming that the Chinese can save us.

I don't know where you're getting that idea.

[BeHereNow]

9. Hello? Finnfan...

Haven't you noticed a pattern in the asshole replies
to your post yet?
Don't waste your breath.
I know what you know.
There is absolutely no point in posting about this.
It brings out the disrupters in record numbers.
Fuck em.
Take care of you and yours.
Prepare to survive it.
That is all.
BHN

[Deja Q]

13. Assholes don't like spreading gloom and doom; real or imagined?

:shrug:

[undergroundpanther]

44. whatr's the best way to deal with this if you are poor?

Because if shit collapses I dunno what I'll do.
I know the rich ain't gonna fork it over, no they'll take it out on the poor,working poor, and disabled first ,than move it higher into the lower middle class,then middle class.We all will feel the strain before the rich pigs so the elites don't feel the slightest pinch.
Eat the rich & hate the elites ,the fucking parasites.

[tavalon]

52. People pretend they have a problem with Finnfan's facts and they may even think they do,

but the real problem is that everyone knows the wolf is at the door and it's so frightening and paralyzing that people don't know what to do besides shoot the messenger. Sure, you and Finnfan (and I) know what's going on but we're just Cassandras, screaming that the collapse is near and even describing in minute detail how it's going to come down, but what none of us have given them (or even know how to do for ourselves) is a plan, some hope, some help.

Sure, we win the Cassandra award this time and many times in the past but it won't put food on our families or save any of us, really.

[Hydra]

56. We've given alternatives with the warnings

And people just don't want to deal with it. They don't want to believe that they got royally fleeced- This is America, you know.

Recession: When someone you know loses their job
Depression: When you lose your job

Facts are seen from the perspective of the viewer. As a poor person, I have no problem seeing what's going on. The more well off are still wearing blinders. The rich look at this and say, "Well played!"

The lesson of this is simple- you can't teach someone something until they are ready to hear it.

[SmileyRose]

33. I think they have no choice

China is the next emerging superpower, but in order to gain that status they'll need foreign places to exploit. They not only need us to be able to afford to be the world's policeman but they also need us to keep buying or else their factories will close - putting an end to the rise of China as THE world leader.

With the article though, it's the "weeks or months" that made me laugh. I have no doubt there's an economic "correction" happening and will deepen greatly but over many months to years - we aren't all going to end up in the street between now and August. It just doesn't work like that.

[anigbrowl]

37. Perhaps not

Certainly, the US is China's largest market...but on the other hand the rest of the world buys a lot of their stuff too. After all, the world saw the rise and fall of numerous empires long before America had any meaning as an economic force...while it was full of native Americans, their relative isolation from Europe and Asia for much of history didn't prevent progress. China has had a continuous civilization going for some 4-5000 years; I don't think they're pinning their entire long-term strategy on the financial health of the US :-)

[SmileyRose]

40. Long term no - but anywhere from 20-50 years? Maybe.

I did not even imply that China's civilization NEEDS the US to survive so you've confused me on where you are coming from there. I'm just saying, in order to be an economic and political powerhouse in the future, which they've obviously decided they want to be, then they'll have to slingshot off the coattails of the current dominators.

We did it to Europe, now Asia will do it to us. Eventually, who knows when in the future, someone will knock them off. That's how it works -- unless my history teachers lied. :)

[agentS]

49. They won't

we're screwed. Thanks a bunch John McCrook and Phil Gramm!

[tavalon]

51. That is a commonly heard refrain

I think the only power China has in this is how fast we fall, not whether we fall. If they withdraw their copious support, we fall astronomically fast and we'll take the whole world down with us. So china won't abandon us, but neither can they save us.

[nadinbrzezinski]

41. China's and India's economy is also slowing down

care to tell me why?

Try connecting some damn dots

[Xenotime]

10. Yea!!! Let all those greedy companies burn!

[Deja Q]

11. Wow, talk about market manipulation!

[blues90]

12. I believe it.

we see stories every single day showing stores closing and layoffs and people losing their savings and others living in tent cities.

People can choose to joke all they want but this is not a joke.

How much crap will people take before they realize these things are happening.

I see many here take it as a joke , perhaps they feel insulated from it all as if they are safe on some far off planet.

[Deja Q]

14. So if people decide to think all that's happening, what will people do?

:popcorn:

[blues90]

15. Panic. nt

[Deja Q]

18. Then let's take a step back and breathe.

No point in panicking.

:)

[blues90]

19. I am breathing , I am in the mode of knowing

but there is no way to avoid panic if people will not at least try to be open to the reality and try and prepare the best they can.

I was not one rushing out to purchase duct tape and plastic but there are enough signs out there now that this is not over and there is no change for the better in sight. The stimulus checks did not seem to work out very well.

[tavalon]

53. Exactly!

That's the part that's missing here. We need personal and societal answers. We know that the shit is hitting the fan - it's as obvious as the noses on our faces, but what do we do? Posts of this type tell us all to be afraid and then the people get pissed when the frightened animal strikes out.

[anigbrowl]

22. Have you ever been through a recession before?

'tent cities'? Er right. i do not think it's a joke, but some people have no sense of proportion. There are little tent cities of homeless people in Tokyo and have been since the recession of the early 90s, but despite their economic woes you'll notice Japanese society hasn't gone down the tubes. Well you can say they have some unique quality but it would be so much worse if it happened here. Reality is some things would be better and some worse.

[Art_from_Ark]

48. Residents of Japanese tent cities are mainly single males

generally in their 40s or older, who have dropped out of society for one reason or another, sometimes for economic reasons, sometimes for other reasons. Families living in tent cities are almost unheard of, and the state will do everything it can to ensure that families with children have a permanent place to live.

[aint_no_life_nowhere]

16. Fortunately, the manufacturing sector will save us

All those lawyers, bankers, mortgage brokers, stock brokers, investment houses, and insurance men who dominate our new American service economy will roll up their sleeves and actually produce things to keep our economy afloat.

Whoops, I forgot that they don't manufacture anything. All they do is move capital around from one place to another, taking a slice of it along the way.

[anigbrowl]

21. And what percentage of the economy do these people make up?

Put a number on the contribution of the financial sector to GDP (no cheating by going to look it up somewhere). If you can't, you're just blowing smoke.

[aint_no_life_nowhere]

27. You think manufacturing is a bigger part of the economy than services?

I listed the legal, banking, mortgage, investment and insurance industries. You really think manufacturing is a bigger part of the economy than these service industries where nothing is created but capital merely moved around? I think you should look it up. I have nothing against Google.

[anigbrowl]

28. OK, you don't want to answer the question

That's fine. Manufacturing actually makes up about the same proportion of GDP as finance, ~15%. Financial profits have been about 30-40% in excess of their historical proportions in recent years, although that's being corrected right now. Manufacturing is important but it's not the be-all and end-all of productive economic activity as some imagine. I disagree with your contention that in the financial industry nothing is created but capital is merely moved around. That's like asserting that the software industry doesn't actually produce anything, it just consists of shuffling data around.

[aint_no_life_nowhere]

31. You apparently didn't read either post of mine

I think you're responding to an imaginary post. My post refers to the service economy, NOT JUST FINANCE. Much of the legal industry is dedicated to moving capital around. Much of the time of our court system is taken up by corporate lawsuits, companies suing each other and damages being awarded. I mentioned the insurance, banking, the real estate mortgage industry, and investment services. Services account for over 65% of the current economy. It's estaimated that if manufacturing continues to slide, it will dip below 10% of GDP by 2013.

[anigbrowl]

32. Of course I read it

Insurance, banking, mortgage and investments are all part of the financial services industry. Some of the legal activity is corporate but most is private. corporate law gets a lot of coverage because the sums are huge - we have an excess of such, but it's not the center of the economy. I think you are vastly overestimating the share of services devoted to capital management.

And as I said before, I don't think manufacturing is the be-all and end-all of productive economic activity. It is quite right, in my view, that its share of the economy should be in decline because technological changes drive automation. That does NOT mean we can ignore the need to redirect resources formerly taken up by manufacturing to other sectors so we don't create a class of permanently employed ex-manufacturing workers.

[aint_no_life_nowhere]

39. You agree that the share of the economy of manufacturing is in decline

That was the lament of my original post and it's a concern to me. I don't see the change of this country from a manufacturing nation to a service economy as a good thing. Automation is fine but I don't see a major retooling of the American working sector into more sophisticated fields on a large enough scale. Instead, we have wages that are sliding progressively downhill for many. Education in this country is a mess and getting worse as the costs rise beyond the means of the people to pay. We have become the developed nation with the biggest disparity between rich and poor. Our companies have moved much of our manufacturing sector offshore and our auto, aircraft, and steel industries are taking a big hit at home. We are importing twice the manufactured goods than we are exporting. Maybe hedge funds managers are doing extremely well, shifting capital around and pocketing enormous sums, but a trip to the rust belt will show first-hand how much the collapse of our manufacturing base has hurt the American worker, as companies have moved offshore to avoid paying decent wages and health benefits. This decrease in the manufacturing base may be working well for CEOs and big shareholders who reap profits from foreign investments, but I don't think it's working for most Americans, even if foreign nations are investing some of the profits in the United States. For millions of Americans, the service economy that you seem to praise isn't working.

As far as the legal services industry is concerned, a major portion of it is associated with insurance, both on a corporate level and a private level, whether it involves personal injury, both state and federal workers' compensation claims, medical malpractice, longshoreman's compensation, or social security disability. Unfortunately, much of it merely involves moving capital from a defendant's pocket to that of a plaintiff. I'm a proponent of a national healthcare system that would eliminate much of the waste in this system, with a less adversarial process in place whereby people can receive medical attention when they are injured without having to resort as much to the courts. Insurance companies fight tooth and nail to avoid paying claims. The lawyers are making the money, the insurance companies raise their premiums, but the waste and inequity is great. An administrative system that provides health care on an 'as needed' basis eliminating the middle men who merely occupy their time shifting capital from one pocket to another would work much better in my opinion, as exists in some states under their worker's comp laws.

[anigbrowl]

42. I pointed out that we're in the middle of a correction

As I said, the proportion of the economy devoted to fiscal services is also too large but is now undergoing a rapid decline. Observing the working-out of market forces doesn't mean I endorse all market participants or laissez-faire economic policy.

[kestrel91316]

20. I guess it's a good thing, then, that Bush already wiped out my

stock holdings with his mismanagement of the economy for the past 7 1/2 years. So I have nothing to lose if it crashes.

My clients, however? That's another matter entirely. At least some of them are not yet wiped out.

[24HRrnr]

47. Remind me

not to invest with you.

bush wiped out your holdings? Are you kidding me?

Can I come visit? I just gotta hear that pitch live, "Hey don't blame me,your financial adviser. It's that asshat bush!"

I promise not to laugh.

Much.

sheeeit. Okay, I'm gonna laugh.

[anigbrowl]

23. Fortis is a bank with its own problems

It overpaid significantly for ABN Amro last year and the CEO has been under pressure (hence the mention that he's staying on in the lead paragraph). The Bank has lost 40% of its value just this year, so it's convenient to blame the American market an exaggerate the dangers of the financial environment. So I would take Lippens' warning with a big pinch of salt rather than at face value. Their worries are well founded but they're rather overstating the case; could be they're going to announce another dismal set of quarerly results next week.

When I used to live in the Netherlands, I remember Fortis being regarded as a rather second-rate bank. Then again the Dutch feel that way about everything which comes out of Belgium :-)

[Pale Blue Dot]

24. Thank you for that perspective.

That's good to know.

[Deja Q]

25. Fortis - the same Fortis that claimed I had a pre-existing condition and could not get insured

by them?

Gee, if they did grant a policy for $xxxx per month, then maybe they wouldn't be so hard up.

Definitely manipulation by then, I'll agree.

:nopity:

[pa28]

36. Kind of what I was thinking.

You read the whole article and it sounds like they are trying to make a pretext to cover their own huge mistakes.

Probably short the US market as well.

[nilram]

57. I had the same thought

And they should have shorted their own stock, today it's down over four percent.
http://uk.reuters.com/business/quotes/quote?symbol=FOR.BR

[HereSince1628]

30. Many thanks to SCOTUS. They made the gun ruling just in time!

We're gonna need those guns to protect our stash of canned tuna!

(Don't make a move on my Duct Tape I've got that covered, too.)

[screembloodymurder]

35. Does anyone have a full translation by a legit source?

I can find nothing but speculation by bloggers and gold bugs.

[anigbrowl]

38. Just use google translate

it comes out kind of lumpy but it's not too hard to follow, even if you don't speak dutch (you can guess what kreditkiesis' is, I imagine!). You're not missing all that much. You could also go to Bloomberg or Marketwire and search for news on Fortis, both of those reporting services are very good.

[lib2DaBone]

43. Trickle Down Bushanomics....

You can pee on my leg and tell me it's raining.. but the world is not going to escape 8 years of Economic abuse by the Neocons. We are in DEEP trouble.. whether it comes tomorrow or next week.. the American people are too stupid to see it.

[Lex]

45. I understood it was supposed to do this for sure 3 or 4 months ago?

:shrug:

[Extend a Hand]

46. FinFan, I'm worried too

in addition to the economic unraveling is the specter of living in a world of declining oil and natural resources and increasing global warming.

Do you read Sharon Astyk?
She makes a good case for sympathy and understanding for those that choose to stick their heads in the sand, in "Why I Do Feel Bad for the Middle Class":
http://sharonastyk.com/page/2/

While I find it frustrating and difficult to understand why some of my family members and dear friends choose to ignore the ever mounting evidence of impending disaster, I don't think I'll be able to laugh at those that fail to prepare.

[mmonk]

55. We have a major problem, that is true.

I'm in real estate and my cousin is a mortgage banker. She constantly watches Bloomberg TV (every morning now) to gage the financials. Any who minimize our condition need to pay attention. It's good some foreign banks are trying to shore us up, but it's going to take some pain to correct the situation. The fed must shore up the dollar soon and start incrementally raising interest rates. If done slow enough, we can survive this crisis for failure to act for fear of raising rates causing market volatility is wrong headed at this point.