Jim Rogers calls most big U.S. banks "bankrupt"

[Dover]

Source: Reuters

By Jonathan Stempel

NEW YORK (Reuters) - Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.

Speaking by teleconference at the Reuters Investment Outlook 2009 Summit, the co-founder with George Soros of the Quantum Fund, said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital.

Dozens of banks have won infusions from the Troubled Asset Relief Program created in early October, just after the Sept 15 bankruptcy filing by Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz). Some of the funds are being used for acquisitions.

"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers, who is now a private investor.

"What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics....>



Read more: http://www.reuters.com/article/InvestmentOutlook09/idUSTRE4BA5CO20081211

[truthisfreedom]

1. "horrible economics" = bushco, and we always knew it. It's like Blagojevich was and is in charge.

That's what happens when the president and vice president of the United States are both inept, insane sociopaths.

[Dover]

2. As I recall, the Dems and Obama were for the bailout plan...

and MANY DUers were not, for all the reasons sited in this article and then some.

[acmavm]

3. Exactly. I'm not. Never was. E-mailed and called my worthless reps in

Washington. Hell, even I knew that you don't give boatloads of cash to liars and thieves.

Yes, Obama pushed it. And people went along with it just for THAT reason.

Stupid.

[ixion]

4. yep, I opposed it for these reasons and others

but I believe Mr Rogers has summed it up fairly well.

A note on the on going flame wars that rage because of these "bailouts":

It makes me sad to see people on this board resort to name calling and snide remarks rather than actual debate. I think we'd get much further with rational discussions.

Just sayin'...

[pjt7]

5. I've been following Jim Rogers for a few months &

he is on the money & unlike most financial guy's seems to weigh in w/ a little morality.

[burythehatchet]

13. Consider that Obama had no choice. If he voted against then all that is happening now

would have been tied to him. It was a no-win situation and Obama did what he is good at, reading the politics of the matter. I don't agree but I can't get too upset with his choices.

[L0oniX]

9. It's not just the Bush crime syndicate, it's our whole government that is incompetent and corrupt.

I have come to believe that most politicians are dumb asscarrots who only know how to lie very well and how to get and stay in office. They are for the most part rich people compared to me and I could retire on what most of them make in a few years. They all don't really care about us, they only care about themselves and what will make them look good for the next election.

[saigon68]

10. The Chimp and cheney are both inept, insane sociopaths.

LOL

[nradisic]

6. Jim Rogers is not a reliable source....

Do some research...he has been wrong many times before. The dude has made huge bets on China over the last few years and has been wrong before. Rogers also made huge bets on crude oil and we see where crude prices are today. He may be right, but given his investment history, he is probably wrong...

[Baby Snooks]

8. You don't have to be a rocket scientist...

A moron can figure out that you cannot just erase trillions of dollars in debt. The only solvency of the banks at this point is the trillions of dollars the Federal Reserve keeps pumping into them to allow them to cook their books. Eventually even that will not cover the debt and the debt will exceed deposits and the banks will collapse.

[Zynx]

12. In truth, the government can keep the banks afloat as long as it wants to.

There really isn't any limit to how much they can do if they want to. There are moral hazard risks, but no real limits.

[Baby Snooks]

7. This is not news...

Only a fool believes any bank in this country is solvent.

[bertman]

11. There are lots of solvent banks. Mostly smaller, local enterprises who have sound loan

policies and didn't jump on the get-rich-at-all-costs bandwagon like many of the big banking institutions.

[acmavm]

14. And the sky is blue...

[dickthegrouch]

15. AND the businesses, AND the country, AND the people, AND...

It's all bankrupt.

Statistically every single family owes at least $9000 to credit cards, and has no retirement savings.

How in the hell do we think we are going to survive the next thirty years?

The US is headed for third-world status IMHO.

[happylib]

16. Well I'm not broke

Don't owe CC debts and been a cash saver for a while.

The manager of the Bank of America right down the street called me two weeks ago and asked if there was anything I need or anything he could do for me. I have a some what large sum of cash saved up. After 20 years of banking with them. Its the first time they ever called to blow sunshine up my ass. I thought WOW these guys are in trouble if they call me on a Friday near closing time. Probably worried I might withdrawn all my cash. My gut told me they were calling all local customers to feel them out to see if customers had any future plans to do a run on the bank, otherwise why call?

[cliss]

17. Re: bankrupt.

Of course the banks are all bankrupt. Can there be any doubt? The whole system is wiped out. Just take their Quarterly earnings statements, and put them in the fireplace. That's all they're worth.

...or use them for something else.

Re: Jim Rogers.
He seems to have the right ideas in terms of the economy. I just have one disagreement with him, in terms of what's coming. Mr. Rogers believes we are moving into a period of extreme inflation, and then we'll move into a period of price deflation. Which should wipe out whatever is left of the economy.

I was thinking the same thing, that we're moving into a period of extreme hyperinflation (think: Weimar Republic), and then a period of rapid price deflation.
Instead, what it seems like we've just now entered a period of price deflation. While in the middle of hyperinflation. It seems strange that you could have both operating at the same time.

Strange, but this man is credible :smoke: