patrick.net

this happens all the time in the cryptocurrency world.

they try and paint the regulators as some sort of criminal insiders, but really THEY are the criminals(typically) who are profiting from laundering operations and what not.

darlag says

I personally don't believe that the FDIC will be able to cover all the banking system failures when a true systemic collapse occurs.

You would be surprised what one can cover, when one sits on a printing press.

Authorities have proved convincingly that they will break all rules as needed to prevent a collapse. I don't know what else is needed.

If you can guaranty an investment instrument like MM, why not guaranty mutual funds... stocks... housing? (or at least buy them from you).

I think the only case the financial system could collapse is if enough tea baggers are elected, sit on their hands, and watch in jubilation as credit freeze, banks fail, are liquidated and the cannibal anarchy takes over.

Heraclitusstudent says

Authorities have proved convincingly that they will break all rules as needed to prevent a collapse. I don't know what else is needed.

Everything needed is already in place. Those that believe the Fed is capable of printing its way out of the debt problems that confront not only this country but the globe, are truly naive about the Fed's actual role in the economic system.

Mainstream economists and media pundits talk as if the the worst of the economic crisis is over. Unfortunately, the worst is just beginning. The next few years will be awful. Certainly, the amount of deflation we have experienced from the three bubbles which have already burst (savings and loan, tech or dot com, and sub-prime) has been bad enough. But the really big stuff remains ahead of us. Four more asset bubbles loom on the horizon: a consumer credit (credit card) bubble, a student loan bubble, a commercial real estate bubble and another round of residential real estate. The contagion is spreading to markets once thought immune from trouble. Europe is on the verge of deflationary collapse and Asia, and in particular China, is not that far behind.

The Fed has printed, perhaps, $2-4 trillion dollars toward fixing a $650 trillion dollar global credit (debt) problem. That is the equivalent of trying to fill Lake Michigan with a garden hose. It simply is not going to happen. Their presses are not big enough. I predict the Fed will not exist by 2020, and probably sooner.

darlag says

a consumer credit (credit card) bubble, a student loan bubble, a commercial real estate bubble and another round of residential real estate.

I think it doesn't add up. Student loans are much smaller amount than mortgages, so are credit cards. Residential real-estate has already gone through a round of purge is much healthier than 8yrs ago.
All the losses in these markets put together are probably less than they already printed.

Remember they just need to put a guaranty, absorb the losses (i.e. a percent of the total) and go on as if nothing had happened: continue to offer money to students, card users etc...

I really don't see where your lake Michigan is.

There is no $650 trillions problem, I don't know where this number comes from. The student loan and credit cards debts are about $1T each, and that's the entire market not the losses.

If there is a depression, it will be in China and the US will come out of it with a normal recession. No financial crisis or depression here.

The next real crisis will look more like stagflation, but we have time for one more bubble bust, around 2017, before that.