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lunar 29.03.2008 08:21

Now this has to be scary.....not always
Now this has to be scary...

fromserpo PPT to come out of the Closet

This is an astonishing read.


WASHINGTON — The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.


I would like to think that this is some sort of sick April Fools joke, but, alas they are serious! What happened to free markets?? This is the same blue-print as the now failed Bush Administration Preemptive Strike Foreign Policy. The notion that the "financial SWAT team" goons will muscle their way into the private dealings of an institution that THEY think poses a risk to THEIR fraudulent fiat money Ponzi scheme is frightening. Presumably fund managers will be secretly flown to detention centers where "water-boarding" will be allowed to extract critical information like where they are hiding their gold!

What about this little gem…


Under the Treasury proposal, Fed officials would be allowed to examine the practices and even the internal bookkeeping of brokerage firms, hedge funds, commodity-trading exchanges and any other institution that might pose a risk to the overall financial system.


What a peach! The FED SWAT team can raid any institution, hedge fund, exchange, and see what key investment positions are and then pass it along to :bad Goldman Sachs :bad who can then make a fortune trading against them as they did with the position data they had confidential access to during the LTCM bail out!!

If you think I am a little over the top consider this…


While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.


So why would they want to have more scrutiny if they are not going to have tighter rules???? Hey, don’t pay any attention to the guys with the night vision goggles wandering around your office they just want to have a closer look at your financial dealings.

Is this designed to fix any problems for Joe and Jane America? Nope!...


The blueprint also suggests several areas where the S.E.C. should take a lighter approach to its oversight. Among them are allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets.


Oh! You mean like the self regulation of the mortgage industry that allowed mortgages for anyone with a pulse and the self regulation of the rating agencies that allowed a triple A rating for any re-packaged debt originated by someone with a pulse! And the re-packaged garbage instrument can be automatically approved as long as it is for export to some unsuspecting investor with a pulse overseas! That should help.

Here is the real killer quote from general Paulson


"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every 5 to 10 years," Mr. Paulson will say in a speech on Monday, according to a draft of the speech. "I am suggesting that we should and can have a structure that is designed for the world we live in, one that is more flexible."


A system that is flexible enough to allow the elite white collar thugs to break the law with impunity and the little guy to go to prison if he does the same thing is what Herr Uberfuhrer Paulson really means.

What better time could there be for GATA’s conference in Washington?


lunar 29.03.2008 08:36

übrigens: :rolleyes

lunar 30.03.2008 08:48

Zitat von salazie

...die fed sagt sich: 'set the controls for the heart of the sun' und los gehts :schwitz

>Fed Leaders Ponder an Expanded Mission
Wall Street Bailout Could Forever Alter Role of Central Bank

By Neil Irwin
Washington Post Staff Writer
Friday, March 28, 2008; A01

In the past two weeks, the Federal Reserve, long the guardian of the nation's banks, has redefined its role to also become protector and overseer of Wall Street.

With its March 14 decision to make a special loan to Bear Stearns and a decision two days later to become an emergency lender to all of the major investment firms, the central bank abandoned 75 years of precedent under which it offered direct backing only to traditional banks.

Inside the Fed and out, there is a realization that those moves amounted to crossing the Rubicon, setting the stage for deeper involvement in the little-regulated markets for capital that have come to dominate the financial world.

Leaders of the central bank had no master plan when they took those actions, no long-term strategy for taking on a more assertive role regulating Wall Street. They were focused on the immediate crisis in world financial markets. But they now recognize that a broader role may be the result of the unprecedented intervention and are being forced to consider whether it makes sense to expand the scope of their formal powers over the investment industry.

"This will redefine the Fed's role," said Charles Geisst, a Manhattan College finance professor who wrote a history of Wall Street. "We have to realize that central banking now takes into its orbit everything in the financial system in one way or another. Whether we like it or not, they've recreated the financial universe."

weiterflug hier

Weiterflug:.......The Fed has made a special lending facility -- essentially a bottomless pit of cash -- available to large investment banks for at least the next six months. Even if that program is allowed to expire this fall, the Fed's actions will have lasting impact, economists and Wall Street veterans said.

As they made a series of decisions over St. Patrick's Day weekend, Fed leaders knew that they were setting a precedent that would indelibly affect perceptions of how the central bank would act in a crisis. Now that the central bank has intervened in the workings of Wall Street banks, all sorts of players in the financial markets will assume that it could do so again.

Major investment banks might be willing to take on more risk, assuming that the Fed will be there to bail them out if the bets go wrong. But Fed leaders, during those crucial meetings two weeks ago, concluded that because the rescue caused huge losses for Bear Stearns shareholders, other banks would not want to risk that outcome.

More worrisome, in the view of top Fed officials: The parties that do business with investment banks might be less careful about monitoring whether the bank will be able to honor obscure financial contracts if they assume the Fed will back up those contracts. That would eliminate a key form of self-regulation for investment banks.

Fed leaders concluded that it was worth taking that chance if their action prevented an all-out, run-for-the-doors financial panic.

Those decisions were made in a series of conference calls, some in the middle of the night, against hard deadlines of financial markets' opening bells. Fed insiders are just beginning to collect their thoughts on what might make sense for the longer term.

"It has wrought changes far more significant than they were probably thinking about at the time," said Vincent Reinhart, a resident fellow at the American Enterprise Institute who was until last year a senior Fed staffer.

Whether there is a formal, legal change in the Fed's power over Wall Street or not, the recent measures, which were taken under a 1930s law that can only be exploited in "unusual and exigent circumstances," represent a massive departure from past practice.

The central bank was created in 1913 to prevent the banking crises that were commonplace in the 19th century. The idea was that the Fed would be a backstop, offering a limitless source of cash if people got the bright idea to pull all their money at once out of an otherwise sound bank.

In exchange for putting up with regulation from the Fed and requirements over how much capital they can hold, banks have access to the "discount window," at which they can borrow emergency cash in exchange for sound collateral. A bank might take deposits from individuals and make loans to people buying a house. Hedge funds do something similar: borrow money in the asset-backed commercial paper market and use it to buy mortgage-backed securities. But the bank has lots of regulation and access to the discount window; the hedge fund does not.

In recent decades, more of the borrowing and lending that was the sole province of banks has come to be done in more lightly regulated markets.

A decade ago, the nation's commercial banks had $4 trillion in credit-market assets, and a whole range of other entities -- mutual funds, investment banks, pensions, and insurance companies -- had about twice that much. Now, those other entities have about three times as many assets, based on Fed data.

Still, the Fed has resisted broadening its authority. On March 4, Fed Vice Chairman Donald L. Kohn told the Senate Banking Committee that he "would be very cautious" about lending Fed money to institutions other than banks or, as he put it, "opening that window more generally." The Fed did exactly that 12 days later.

The New York Fed said yesterday that investment firms have borrowed an average of $33 billion through that program in the past week.

The Fed has intervened in the doings of Wall Street in the past, but in limited ways. Most notably, in 1998, the New York Fed brought in heads of the major investment banks to cajole them into a coordinated purchase of the assets of the hedge fund Long-Term Capital Management, to prevent a disorderly sell-off that could have sent ripples through the financial world.

"Long-Term Capital was the dress rehearsal for what happened with Bear Stearns," said David Shulman, a 20-year veteran of Wall Street who is now an economist at the UCLA Anderson Forecast.

Treasury Secretary Henry M. Paulson Jr. said that if investment banks are given permanent access to the Fed's emergency funds, they should have the same kind of supervision that the Fed requires for conventional banks. "This latest episode has highlighted that the world has changed, as has the role of other non-bank financial institutions, and the interconnectedness among all financial institutions," he said in a speech Wednesday.

If Congress and the administration do broaden the formal powers of the Fed, it would be the latest in a long history of financial policy made out of a crisis. The Great Depression fueled an array of stock exchange regulation. The 1987 stock market crash led to curbs on stock trades. The 2002 corporate scandals led to the Sarbanes-Oxley Act.

And after the panic of 1907, a National Monetary Commission was formed to figure out how to prevent such things from happening again. Its crowning achievement: The creation of the Federal Reserve.

madmilker wrote:
This Act (the Federal Reserve Act, Dec. 23rd 1913) establishes the most gigantic trust on earth. When the President (Woodrow Wilson) signs the Bill, the invisible government of the Monetary Power will be legalised... The worst legislative crime of the ages is perpetrated by this banking and currency Bill.

* Charles A. Lindbergh, Sr (1859 ~ 1924) Congressman (father of the famous aviator)

Most Americans have no real understanding of the operation of the international money lenders... The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and... manipulates the credit of the United States.

* Sen. Barry Goldwater (R-AZ)

lunar 30.03.2008 16:56

...als Nachzügler
merci @narco :)
John Williams Interview 03/21/2008
Here's an interview from the man who reconstructs the M3 data. John Williams talks about where things are heading.This was after the Bear Stearns bail out / Gold correction.

lunar 31.03.2008 17:55

31 March 2008

The Paulson Plan: a Foray into a Financial Iraq

We were asked if we favor the Paulson plan. After all, several noted academic economists have come out and spoken in favor of it. Wall Street complains that it will increase regulation and lessen their profits. Well, Wall Street complains all the time, but especially loudly when it has been caught with its hand in the cookie jar, and some economists will say just about anything for some of the cookie crumbs. The Banks protested the adoption of the Federal Reserve Act in 1913 in much the same manner, with false protestations while they privately were promoting it by incenting endorsements from economists and politicians.

Treasury Secretary Paulson softened his delivery this morning by couching the plan in terms of just 'a template' and a 'basis for discussion.'

Its important to realize that this study had its genesis in a Bush Administration effort to lighten regulation on Wall Street that has been underway for some time. The Bush cabinet is taking the opportunity of the Bear Stearns collapse to quickly bring this forward under the title "Financial Stability Act" in much the same way they were able to quickly bring out the "Patriot Act" after the 911 tragedy.

The next Presidential Administration will have to live with the problems created by eight years of Bush mismanagement. It would be better to leave sweeping changes to them, rather than follow yet another blank check proposal from a group in Washington that have proven over and over that they cannot, or will not, do what is required to act in the public interest.

When you have a massive failure in a critical system, you do not go to those on whose watch it occurred, with their proactive involvement, with strong elements of deception and fraud involved, with innocent people being victimized, and ask them what should be done to fix the system so it doesn't happen again.

How many times can someone lie to you, and cheat you, and take some of the goodness of life from your children, before you wise up?

Not even a template. Not even a basis for discussion. No bonanza for the lobbying interests such as they had when the Banks went after the repeal of Glass-Steagall. And especially not something to distort and delay the real action that is required.

Are we in favor of this plan? No. Hell no.

It would be Congress and the president essentially giving a blank check to a regulator over which they have very little power,'' said Michael Greenberger, a professor at the University of Maryland in Baltimore and a former CFTC official. Paulson's proposal will ``allow Wall Street to do whatever they want until a crisis occurs, at which point the Fed would intervene.'' Bloomberg News

The Fed oversaw this meltdown,” said Michael Greenberger, a law professor at the University of Maryland who was a senior official of the Commodity Futures Trading Commission during the Clinton administration. “This is the equivalent of the builders of the Maginot line giving lessons on defense.”

"During the late 1990s, Wall Street fought bitterly against any attempt to regulate the emerging derivatives market, recalls Michael Greenberger, a former senior regulator at the Commodity Futures Trading Commission...“After that, all was forgotten,” says Mr. Greenberger, now a professor at the University of Maryland. At the same time, derivatives were being praised as a boon that would make the economy more stable.

Speaking in Boca Raton, Fla., in March 1999, Alan Greenspan, then the Fed chairman, told the Futures Industry Association, a Wall Street trade group, that “these instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it.” Although Mr. Greenspan acknowledged that the “possibility of increased systemic risk does appear to be an issue that requires fuller understanding,” he argued that new regulations “would be a major mistake.”

“Regulatory risk measurement schemes,” he [Greenspan] added, “are simpler and much less accurate than banks’ risk measurement models."``

Mr. Greenberger, still concerned about regulatory battles he lost a decade ago, says that Mr. Greenspan “felt derivatives would spread the risk in the economy.”

“In reality,” Mr. Greenberger added, “it spread a virus through the economy because these products are so opaque and hard to value.” A representative for Mr. Greenspan said he was preparing to travel and could not comment."

lunar 01.04.2008 08:28

...die Welt will beschissen werden :kopf

lunar 01.04.2008 16:48

Posted On: Tuesday, April 01, 2008, 9:37:00 AM EST

Jim's Mailbox

Author: Dan Norcini

Dear Jim,

I found much in this editorial in today’s WSJ to my liking. Perhaps it is a good read for the gang. Note the paragraph near the end that bolded. The editors seem to have the same feelings about the Fed buying up this junk as we do.

Best wishes amigo,

Reform a la Glasgow
April 1, 2008; Page A16

The financial reform unveiled yesterday by Treasury Secretary Hank Paulson is nothing if not comprehensive. No bureaucratic deck chair goes unmoved. Partly for that reason it has as much chance of becoming law as those Citigroup SIVs have of paying off for investors. Fortunately, the real reformer is already hard at work, changing the financial system right before our eyes.

His name is Adam Smith, and his relentless market discipline is already building a safer, more conservative financial system without any new regulation at all. For weeks now, structured-investment vehicles (SIVs), dodgy asset-backed commercial paper and the like have been moving onto bank balance sheets. Hedge funds are unwinding, or at least the riskier versions are. Derivative contracts are still being written, but more cautiously, and with more connection to the value of the underlying asset.

In short, the decade's great experiment in direct, unmediated lending is undergoing an Adam Smith cleansing. Amid the credit mania, Wall Street's whiz kids pioneered new ways to lend and make money without the intermediation of traditional bank capital. It was very efficient, raising money from all corners of the world, and its benefits were real. But it was also more vulnerable to panic because, if the value of the underlying assets fell, there was little cushion to absorb the losses. When the housing and mortgage mania stopped, so did the confidence in those SIVs and the panic set in.

In his wisdom, the Professor from Glasgow is now moving more of those direct-lending assets back on bank balance sheets where there is a capital safety net to write off the losses without busting the entire financial system. The ratio of direct to intermediated lending is falling, while the banks themselves are getting access to new liquidity, both private and public through the Federal Reserve's discount window. This by itself is an enormous reform, and all of it is taking place without a single vote in Congress.

Yet the politicians, in their typical election-year panic, now demand more power for the same regulators who failed to use the power they already have to prevent the current crisis. Mr. Paulson is proposing to consolidate some of the financial bureaucracy, and we're all for that. But the mortgage mania and panic weren't caused by a failure of the regulatory "structure" or a dearth of rules. They were caused by a failure of the men and women who ran those financial and regulatory institutions.

That's especially true at the Fed, which has the most to answer for in this entire episode. First, it drove a reckless monetary policy that created the subsidy for debt that fueled the housing and credit bubbles. Then it failed to call the banks under its supervision on the major risks they were taking. The Fed had every authority and tool it needed to scour Citigroup's balance sheet and question its lending practices, yet it failed to do so. And now, without a hint of irony, the Treasury and financial press declare that the solution is for the Fed to become a "Supercop." What do they think the Fed was supposed to become when it was created in 1913, after the Panic of 1907 -- a potted plant?

We agree that those investment banks now borrowing for the first time from the Fed's discount window are opening themselves to greater supervision. With the taxpayer's dime comes the burden of oversight. Among other things, this is likely to mean lower debt ratios than the 34-1 that helped kill Bear Stearns. But the best way to accomplish that is for the Fed to use the considerable power it already has rather than run a Congressional gauntlet that will surely make things worse. If Goldman Sachs or Lehman object to new reporting demands, the Fed can always deny them access to the discount window.

What will our new financial system look like once Professor Smith is done? It will be smaller for one thing, but perhaps safer. Securitization -- packaging assets and then selling them as securities -- will continue, though with more discipline. The system will be less efficient, and that's regrettable. But it may also be sturdier -- with a greater capital cushion, less leverage and better risk management -- and thus better able to ride out the next financial rough patch.

Or at least it will be if the Beltway doesn't pile on another dose of moral hazard. That's what the Fed did this month by guaranteeing that $30 billion in Bear Stearns mortgage paper for J.P. Morgan. As Yale's Jonathan Macey wrote on these pages yesterday, that action was a commitment of taxpayer dollars that almost certainly violated the Federal Deposit Insurance Improvement Act. If the government is going to commit taxpayer money to rescue banks, the proper vehicle is the FDIC. The Federal Reserve needs to maintain the quality of its balance sheet as a lender of last resort and to conduct monetary policy. Rather than rearrange the bureaucratic furniture, Congress could better spend its time digging into the Fed's Bear Stearns deal.


lunar 01.04.2008 21:24

01 April 2008

Banking Crisis Worsens, but Spring is in the Air....

Wall Street's motto is "Never Give Up. Never Surrender. Greed is only a few heartbeats away from fear."

Banks are leading the rally on first of month 401k money from the US, hopes that the banks have or are reaching a bottom by European speculators based on the Lehman shares offering raising $4 billions, a quick pump from the Yen-dollar carry trade, the apparent revelation that the Treasury has agreed to backstop any Bear Stearns losses for the Fed, and... a little fresh lipstick.

Banks Face Biggest Crisis in 30 Years, Report Says
By Edward Evans

April 1 (Bloomberg) -- Credit market turmoil poses the most severe crisis for banks in 30 years, surpassing Black Monday in 1987, the Asia currency crisis and the burst of the dot-com bubble, Morgan Stanley and Oliver Wyman said in a joint report.

Revenue from investment banking may drop 20 percent in 2008 before a further $75 billion in markdowns, analysts led by Huw van Steenis said in a note to clients today. Six quarters of earnings will have been erased by writedowns and falling revenue by this month, rivaling the collapse of the junk bond market at the end of the 1980s that put Drexel Burnham Lambert Inc. out of business, the report said.

''The industry is facing the most severe investment banking crisis in 30 years,'' the analysts wrote in the report. ''Global securities markets are in the midst of profound cyclical and structural change.''

Banks' revenue from their credit businesses may drop as much as 60 percent, the analysts said, and the firms will have to provide more transparency to investors who buy their loans. At the same time, regulators will push the industry to retain more capital as a cushion, hurting banks' return on equity in the long-term, the group added.

Banks' earnings have been hit for the past three quarters by the turmoil in the credit markets, the report said. In total, the crisis may last for eight to 10 quarters, exceeding the six- quarter duration of the Asia crisis and bailout of LTCM in 1997- 8, and the seven-quarter fallout from the bursting of the dot- com bubble, the report said.

Investment-banking revenue has also stalled as the pace of takeovers and initial public offerings declined in the first quarter of 2008. Writedowns and losses on subprime-infected assets have already cost the world's biggest financial institutions about $230 billion since the start of 2007.

Zurich-based UBS AG today posted an additional $19 billion of writedowns and said it would seek $15.1 billion in a rights offering to replenish capital. Deutsche Bank AG, Germany's biggest bank, also said today it expects to book about 2.5 billion euros ($3.9 billion) in writedowns for the quarter.

Separately, Merrill Lynch & Co. and Citigroup Inc. had their first-quarter earnings estimates cut by Goldman Sachs Group Inc., which said the two banks may post $14 billion in writedowns on assets linked to collateralized debt obligations.

lunar 02.04.2008 08:21


lunar 02.04.2008 13:36


01. April 2008, 23:01 – Von Bruno Schletti Kommentar

Nahe am Totalschaden

Als die UBS am 1. Oktober Abschreibungen von 4 Milliarden Franken ankündigte, war das ein Schock. Inzwischen sind die Wertberichtigungen auf 40 Milliarden angewachsen. Der Verlust von 4,4 Milliarden Franken im letzten Jahr schien unfassbar. Im ersten Quartal 2008 kommen weitere 12 Milliarden dazu. Der Schaden, den die UBS anrichtet, ist enorm.

Zu diesen Zahlen kommt der Rufschaden. Die Marke UBS, eine der besten der Branche weltweit, liegt in Scherben. Erstmals musste Konzernchef Rohner gestern einräumen, dass in der Schweiz die Kunden davonlaufen. Der Abfluss von Vermögenswerten hat begonnen. Wie stark er ist, wird an den jeweils neusten Quartalszahlen abzulesen sein.

Noch schwieriger in Zahlen zu fassen sind die Folgen für den Finanzplatz Schweiz. Die Marke UBS war auch ein Synonym für jenen Wirtschaftszweig, der diesem Land neben Kritik und Neid auch Anerkennung und Wohlstand einträgt. Vermögensverwaltung durch Schweizer Banken bedeutete Sicherheit, Seriosität und Vertrauen. Das ist nach dem tiefen Fall der UBS Geschichte.

Fest steht: Der angerichtete Schaden lässt sich kaum beziffern. Und wie verabschiedet sich Marcel Ospel? «Ich betrachte meinen Auftrag als erfüllt.» Ospels surreale Äusserungen lassen einen fast so ratlos wie das angerichtete Zahlendebakel.

Jetzt kommt der Neue - ein Alter. Peter Kurer ist seit sieben Jahren mit von der Partie, seit sechs Jahren Mitglied der Konzernleitung. Es ist nicht bekannt, dass er die eingeschlagene Strategie rechtzeitig in Frage gestellt hätte.

Schwerer wiegt, dass Kurer Teil des Systems ist. Jenes Systems, das die Verantwortung längst mit Selbstbereicherung vermischt. Es ist auch die Gier nach Geld und Macht, die die UBS ins Verderben laufen liess. Ospel mag eine Galionsfigur dieses Denkens und Handelns gewesen sein. Ospel war aber nur möglich, weil er durch eben dieses System gestützt worden ist. Durch Männer wie Kurer, die es bis (fast) an die Spitze geschafft haben. Im UBS-Präsidium wird jetzt ein Name ausgetauscht, mehr nicht. Eine vertrauensbildende Massnahme ist das nicht.

lunar 02.04.2008 18:33 gibt Gründe gegen/für Ron Paul - aber es ist schon typisch, was nicht ins Schema passt fällt der Schere zum Opfer.....


Jive Dadson
I did that too. There's one with Bernanke and four other fools on the committee, but I haven't found Ron Paul.
Democratic Senator Charles Schumer of New York, Republican Senator Sam Brownback of Kansas, Democratic Representative Carolyn Maloney of New York and Republican Representative Kevin Brady of Texas also speak.


Hmmm, you're right. Looks like they cut out RPs questions. It should turn up on youtube later today.


Here it is:
Ron Paul vs Ben Bernanke 4.2.08

lunar 03.04.2008 19:06

Dan Norcini’s Commentary

You might want to read the following article on the recent actions of the Fed, JP Morgan and Bear Stearns. It is a bit lengthy but well worth the read.

Pay particular attention to the closing two paragraphs. They sum up this unique situation perfectly.

Bear with Me
The mother of all government bailouts.
(Excerpts from article)
By David Freddoso

"In short, this is the mother of all government subsidies a non-legislative appropriation that doubles the size of all this year’s congressional pork projects combined. Without so much as a vote of Congress, taxpayers are to buy securities of undetermined value for $29 billion - roughly Panama’s GDP, or the Federal Reserve Bank’s entire annual profit. They take this enormous risk so that JPM, a company worth $146 billion, has enough liquidity to make a major and profitable acquisition for next to nothing. JPM is more than happy to take on Bear’s book of client and counterparty accounts - these were probably never in danger of being lost, and its great business for JPM. The ones being rescued are Bear’s bond-holders. They keep their shirts. The stockholders at least keep their socks. The profits from the good times are retained, and the losses are socialized.

Finally, the CRS report notes, the bailout creates an excuse for further regulation of Wall Street. After all, if these firms are going to rely on the Fed to bail out their bondholders, they should be more responsible to the government:
[I]f financial institutions can receive some of the benefits of Fed protection, perhaps because they are “too big to fail,” should they also be subject to the costs that member banks bear in terms of safety and soundness regulations, imposed to limit the moral hazard that inevitably results from Fed and FDIC (Federal Deposit Insurance Corporation) protections? If so, should the “too big to fail” label be made explicit so that regulators can better manage systemic risks?

The taxpayer’s involuntary generosity also benefits the other large institutional holders of mortgage-backed securities. For these, the bailout holds forth hope that the government will someday be there to save them from the free market as well. But can it save everyone?"


lunar 04.04.2008 11:08

Posted On: Thursday, April 03, 2008, 3:24:00 PM EST

Notes From The Morning Testimony On The Bear Stearns/JP Morgan Transaction And Federal Reserve Actions

Author: Jim Sinclair

Dear CIGAs,

If you listened carefully there was much to be heard at today's Fed testimony.

The primary reason for funding the Bear/JPM deal was to prevent Chapter 11 for Bear. In Chapter 11 Bear would be released from its liabilities with residual assets distributed.

That would mean that the specific performance obligations required of Bear on the structured products they were principle to (their inventory) would no longer be obligatory as that is a liability discharged.

That would mean not only the $30 billion going publicly up in smoke, but the entire web of obligations written against them would also go up with it.

That smoke would take the form of a financially nuclear mushroom cloud. It is estimated that thousands of counter-parties would be engulfed in that mushroom cloud of financial destruction.

No major investment bank, insurance company or other financial entity which has major commitments in the OTC derivative market will be allowed to go Chapter 11. This will cost the Fed huge amounts of money - well beyond what you have seen so far.

The Fed balance sheet will become garbage on the asset side with growing and in most cases undetermined liabilities. Central banks cannot go broke as they have a blank check they can use to print all the funds required. What a central bank can do is DESTROY THE CURRENCY they represent. The tool for that destruction is a combination of inflation and balance sheet deterioration, the path we are now clearly on.

There is so much more to come that there is no respite here.

Gold is headed to $1650 and the US dollar to .5200 on the USDX.

Note the currency from the Weimar Republic: (Click image to enlarge in PDF format)

Review of the Testimony:

  1. Soros was quoted today (not in this meeting) as predicting the next major problem emanating from the companies that have issued credit default derivatives (swaps) so far beyond their capacity to perform (45 trillion US dollars worth according to the WSJ) that it borders on comical. I wholly concur, but believe this is already in place, albeit just starting. A downgrade of the credit worthiness character of the issuers (credit default swaps) bonds would trigger an opening of the flood gates. Not downgrading those bonds will end the existence of the credit rating firms via civil litigation. AAA credit rating for entities with trillions of dollars of guarantees with now modest capitalization stretches the imagination of any financial Pollyanna.
  2. The subject of the action of a bankruptcy judge as it applies to OTC derivatives was opened. It got slammed shut fast by the Fed, saying this was not a relevant subject as no bankruptcy occurred.
  3. It was stated that the Federal Reserve assumed the risk of the derivatives at the point to which Bear Stearns had marked them to model on the day of the transaction. The question that remains is what was the mark to model that Bear Stearns in fact has marked their position as counterpart to SIVs?
  4. The question was asked of the Federal Reserve when they knew that Bear Stearns was in trouble. The answer was that they know Bear Stearns faced Bankruptcy one day before the transaction weekend. It was made clear that the Fed was not the supervisor of Bear. Actually, no one was in the situation of OTC derivatives and their valuation supported by the Fed in their commentary on regulations and derivatives on many occasions. There is a distinct difference between when you know an entity is in trouble to knowing that they are going to have to file Chapter 11.
  5. As always, the problem being examined is directed at the mortgages themselves. The structure of the OTC derivative market, its lack of regulations, Fed blessing of no regulations and all other characteristics is not in the scope of discussion.
  6. This is the beginning of a politicized discussion of the valuation by computer models as asked by Mr. Tester. The question is who valued Bear’s portfolio and the answer is of course Bear. If you were using a voice analyzer, I believe the answer to the question, “Are Bear’s derivatives worth $29 billion?” would show the Chairman begin stuttering. The question to follow this is why did JP Morgan require a $29 billion guarantee if the items had a good value of $29 Billion? The answer again would be stuttering. The answer to the question “What does highly rated mean?” is “No firm guarantee.”
  7. It became clear that the reason Bear could not file chapter 11 is that would legally result in assuring the counter party of the special performance contract that must perform ( Bear - the loser) would never perform, making the entire web of OTC derivatives issued against those instruments BANKRUPT. This is why JPM would not take on more than the first billion with the Fed, now the performing party on the balance of the $29 billion. This is the real heart of the situation.
  8. Questions were asked of the Fed regarding how they would stand in civil litigation over the transactions formulated by the Fed. My comment is good luck suing the government (or quasi government) organization. That question is quite relevant where Bear, JPM, Credit rating companies and all those involved in OTC derivatives are concerned. What has not occurred to the investment banks, insurance companies, retirement funds and all those entities trying to maximize interest via guaranteed debt and derivatives thereupon, litigation will. Will the Fed assume the litigation losses for protection of the financial entity if it threatens chapter 11? The answer is probably YES.
Let’s review the key points for Gold now:
  1. $887.50 give or take.
  2. $900
  3. $961
  4. $1024

lunar 06.04.2008 12:22

:verbeug ...das ist einfach zu gut :supi

Zitat von fisherman

Probleme kann man niemals durch die Denkweise lösen,
durch die sie entstanden sind

Albert Einstein

lunar 07.04.2008 07:57

...sehr interessantes Interview mit James Sinclair - Derivative und warum zB Bear Stearns & Co. nicht bankrott gehen darf/durfte
und seine 1'000'000 Gold Wette

lunar 07.04.2008 08:40

...und damit wir Jimmy Rogers auch noch der Vollständigkeit wegen haben ;)

lunar 07.04.2008 15:33

Fed Didn't Inflate the Housing Bubble: Greenspan :eek:eek:eek (ja wer denn sonst :confused:rolleyes)

By Reuters | 07 Apr 2008 | 04:36 AM ET

Former Federal Reserve Chairman Alan Greenspan has defended himself from charges that easy U.S. monetary policy created the current credit crisis by inflating a housing bubble, and instead blamed professional investors.

Alan Greenspan

In an article in Monday's Financial Times newspaper, Greenspan wrote that the housing bubble which inflated between 2001 and 2006 had not been unique to the United States.

"The U.S. bubble was close to median world experience and the evidence that monetary policy added to the bubble is statistically very fragile," Greenspan wrote.

Under Greenspan the Fed cut rates from 6.5 percent in late 2000 to 1.0 percent in mid-2003.

Most other leading central banks followed suit, although not to such low levels apart from the Bank of Japan.

The Fed has been accused of keeping rates too low for too long as it sought to help the U.S. economy following the collapse of internet stocks and the blow to confidence from the Sept.11, 2001 attacks.

But Greenspan noted that U.S. economic conditions were still sluggish as late as June 2003, when the Fed cut rates to the 1.0 percent low.

It began raising them a year later but even then, he said, monetary conditions were not bubble-making.

"Both the monetary base and the M2 indicator rose less than 5 percent in the subsequent year (2004), scarcely tinder for a massive credit expansion," he wrote.

Instead, Greenspan placed blame for the U.S. housing and subprime mortgage crisis at the door of investors. :rolleyes

lunar 07.04.2008 16:17

Tim Clue - Debt

lunar 08.04.2008 16:37

:verbeug mesodor39 Heute, 16:41

Im übrigen stelle ich mir gerade vor, was man mit den in den USA und in Spanien versenkten Geldern hier in Deutschland alles positiv hätte gestalten können:

bessere Straßen und Gehwege,

Förderung erneuerbarer Energien

Zuschüsse zu Energiesparmaßnahmen für die Menschen hier in Deutschland.

Dann braucht man auch nicht anderer Menschen Nahrungsmittel zu Treibstoff / Brennstoff zu verarbeiten.

Alleine das was IKB, Sachsen-LB, Bayern-LB, West-LB, Peanuts-Bank, Dresdner Bank unsere angeblich bodenständigen Sparkassen und was weiss ich noch alles für Banken und Versicherungen in den USA an Geldern vernichtet haben.....

und für die nun Aktionäre und Steuerzahler aufkommen sollen.

Hart erartbeitete Ersparnisse lösen sich, fahrlässig von gierigen und dummen Managern "angelegt" nun in Luft auf.
Und diese Lumpen kommen, wie es ausschaut völlig ungeschoren und teils mit dicken Boni und Abfindungen davon.


Von den vielen Existenzen und Betrieben die durch die so angezettelte Depression zerstört werden und durch die vorbeschreibenen Fehllenkungen bereits zerstört wurden, will ich hier garnicht erst anfangen.

Gold- und Silberbesitz sind da ein ehr schwacher Trost für real entgangene und durch Verbrecher und Taugenichtse zu Nichte gemachte Chancen.

Immerhin: die Eule hat das Handtuch geworfen. Wurde ihr zu stressig. Wg. Finanzkrise. Da sieht man mal wieder zu was unsere Politiker taugen, wenns mal drauf ankommt..... ...zum Weglaufen.

...kann man so für etliche andere Länder übernehmen :rolleyes:o

lunar 08.04.2008 18:00

1 Anhang/Anhänge
.......Soziale Unruhen durch Nahrungsmittelpreise
Die Nahrungsmittelpreise explodieren, gerade ist der Reispreis dabei, zu haussieren. Prompt wird von mehreren Stellen vor sozialen Unruhen in der Welt gewarnt, für den Fall, dass die Nahrungsmittel noch teurer werden. Soziale Unruhen, die vielleicht ganze Staaten erfassen, können sich ebenfalls als Belastungsfaktor für die Weltwirtschaft erweisen......

aus Investor's Daily - 08.04.2008
von Jochen Steffens

....Hauptsache Bio Sprit statt Vollkornbrot :gomad


Haiti violence

Hungry Haitians storm the presidential palace over the high cost of living

They stormed the presidential palace demanding food (Eduardo Munoz/Reuters)

lunar 08.04.2008 18:18

Posted On: Tuesday, April 08, 2008, 2:55:00 AM EST

Rules Were Made To Be Broken?

Author: Jim Sinclair

Dear CIGAs,

Rules for the purpose of maintaining solvency of a financial entity known as capital versus commitment are broken.

Rules are changed.
What good are rules?

Big Bad Boys go bad.
Bad Boys rescue Big Bad Boys.

Average Joe goes bad.
Average Joe gets flushed.

The abyss between those that have and have not grows exponentially.
Blue collar means slave.

The systems weakens further
In the end, there are only CONSEQUENCES

Consequences cannot be broken.
Consequences cannot be changed.
Consequences are worse than bad.
Nobody can rescue anyone from Consequences
Consequences guarantee that everybody gets flushed to some degree.
Consequence is the only sure thing in this unsure world.

Cause and effect - that is all there is.

This is it. Are you ready?

Love letter from the Fed to Dear JPMC
Fed Relaxes Restrictions for J.P. Morgan-Bear Deal

Fed Loosens Capital Rules for JPM

lunar 09.04.2008 10:29

Dies ist das Hauptmodell von Armstrong, das Economic Confidence Modell (Vertrauensmodell), wobei die Zyklenlänge 8.6 Jahre ist, was sich als Pi 3.14159 x 1000 = 3.142 Tage berechnet.

Wirtschaftliches Vertrauen ist entscheidend für Kursentwicklungen in den Finanzmärkten, ganz besonders bei Blasen. Auf der psychologischen Ebene kann man Blasen auch als überbordendes und unrealistisches Vertrauen definieren. Die beiden 8.6-Jahres-Tiefs 1994.25 und 2002.85 waren Tiefs des 4-Jahres-Zyklus, 1994.45 sogar taggenau. Das Hoch 1989.95 war das Allzeithoch des Nikkei, 1998.55 taggenau das Hoch der Aktienmärkte vor dem Crash 1998. Das letzte Vertrauenshoch 2007.16 (= Ende Februar 2007) korrelierte genau mit dem Platzen der Immobilienblase und dem ersten Auftreten der Subprime-Probleme.

lunar 10.04.2008 08:04


Zitat von syracus

China's yuan breaks through key level

SHANGHAI, China (AP) -- China's currency nudged past 7.0 yuan to the U.S. dollar Thursday, a milestone bound to please Beijing's trading partners and dismay exporters struggling to remain competitive in overseas markets.

The official Xinhua News Agency reported that the yuan was trading at 6.9920 to $1 -- the first time it has ventured below the 7 yuan mark since the government loosened the unit's peg to the dollar in 2005. The yuan has gained about 18 percent in value since then.

That has made Chinese-made products more expensive overseas while shrinking the yuan-denominated value of profits from exports. The stronger yuan is squeezing China-based exporters, including multinationals, at a time when they already are wincing at surging costs for labor, energy and materials.

"Our costs keep rising and the dollar is falling so we make less money than ever before," said a quality control manager at EI Global, an exporter of small promotional items.

"I heard my boss might even switch away from exports," said the manager, who gave only his surname, Tao.

Beijing limits the yuan to a narrow trading band, contending that restrictions are needed to protect China's developing financial industries.

The United States wants the yuan to appreciate faster, and some American lawmakers are calling for punitive tariffs on Chinese imports. Washington reported a $256.3 billion trade deficit with China last year, its highest on record with any country.

During a visit to Beijing last week, U.S. Treasury Secretary Henry Paulson reiterated calls for Beijing to let the yuan trade more freely. China has been noncommittal, vowing only to keep the yuan steady while moving gradually toward a more open exchange regime.

A stronger yuan makes imports of key commodities like crude oil less costly in local terms. But for some industries, the foreign exchange losses are outstripping the gains.

"These are hard times for us," says Wei Yaoting, a textile trader in Shanghai that exports large shipments to the United States.

A typical U.S. order, received last July and delivered in November, was not paid for until February. Over those seven months, the dollar-denominated payment declined in value, as the yuan rose.

"We end up swallowing the losses," said Wei, manager of Shanghai HTC Holdings Import & Export Co.

"The more exports, the bigger the losses. We just break even," Wei said. "We're even considering giving up selling to foreign markets that trade in U.S. dollars."

Although most foreign trade, in China and elsewhere, is denominated in dollars, companies increasingly are setting contracts in euros or British pounds to avoid foreign exchange losses, said Ma Xinzheng, deputy chief editor of, an industry research group.

A majority of 1,000 textile traders responding to a survey released this week by WebTextiles said they were setting deals in other currencies.

"Some traders try their best not to deal in U.S. dollars," Ma said.

Some are giving up business altogether. Another survey, by the China Cotton Textile Association, found that nearly half of cotton manufacturers wanted to quit. Investment in the sector fell by 15 percent last year, it said

:schwitzwas/wer löst den $ ab - und die Folgen :confused:rolleyes

lunar 10.04.2008 11:01

1 Anhang/Anhänge
....but if you are just a normal passenger - help yourself :rolleyes

lunar 10.04.2008 17:16

Goldman Sachs Lies About Level 3 Values

April 9, 2008

Elaine Meinel Supkis

The pirates at Goldman Sachs announce they have figured out the value of their hard to value Level 3 Assets. And guess what? According to them, these pieces of paper increased in value by nearly 40% even as all others in the world collapsed! Isn't that amazing? Or rather, utterly, nakedly fake? GS stocks fell on this stunning news. Oil shot up to $112 a barrel and in response, the US is screaming at Switzerland to not buy energy products from Iran. Who will win this contest? Iran Kitty or Miz Liberty? I'm betting on the cat.

Soviet cartoon about Pirates attacking:

Goldman Sachs Level 3 Assets Jump, Exceeding Rivals'
Goldman Sachs Group Inc., the most profitable securities firm, reported an increase in hard-to- value assets during the first quarter, exceeding those at Morgan Stanley and Lehman Brothers Holdings Inc. Goldman's so-called Level 3 assets surged 39 percent to $96.4 billion at the end of February from $69.2 billion in November, according to a filing with the U.S. Securities and Exchange Commission today. The ratio of Level 3 to total assets rose to 8.1 percent from 6.2 percent.

Investors are wary of banks and brokerages with difficult- to-sell securities on their books as $232 billion of writedowns and credit losses from the collapse of the subprime mortgage market have crippled earnings. More assets have become difficult to value in the last three months as investors shunned a wider array of credit, reducing trading.

Level III junk can't be priced except by the entity holding these things. So lo and behold, Goldman Sachs is doing really well because these things, these invisible things, these QSEPs, these qualifying special purpose entities we discussed yesterday, ROSE in value! Up and up and up! To the heavens! What on earth were these things that went utterly and wildly contrary to the desperately contracting asset value markets? Can these wondrous entities be described so we can judge the truth of this claim? Should we all trust Goldman Sachs?

Of course not! No way! Not only did these bizarre and unknowable QSEPs shoot upwards in value, the ratio of these things compared to the things that obviously dropped in value, rose, too! This is one of life's mysteries. If anyone is tempted to buy Goldman Sachs' inflated value stocks based on this news story, all we can say is, 'HAHAHA. Fools, money and partings are so fun, aren't they?'

And this news is so childish. Anyone who is sane and reads online commentary about these sorts of things won't be fooled. So who is fooled? Are there any fools left? Usually, in bear markets, both the wise and the fool are stripped down. The wise expect rationality and are hammered by the various schemes set up to save the status quo that is dying. The fools keep listening to the con artists working in the mainstream media and rush into the markets to buy thinking it has bottomed out when it is barely begun. But the con artists: they have to run this childish game until they can pull out without losing their shirts. So this news is set up to fool fools, not to reveal important information.

Note that in 2004, GS was trading at below or at $100 a share. But by May, 2007, it shot up to $225 a share. Then came the disaster of July, 2007. The Japanese carry trade began to unwind. GS dropped like a rock. Then, after the giant government bail outs as well as the sudden rate drops by the Fed, their stock hit its all-time high of $250 a share. Since then, it has lost all of the bubble gain from 2007.

Since Goldman Sachs has many operatives stationed at many points within our government as well as other countries' governments, the desire to keep their collective stocks rising is very strong as we can see. They want desperately to float above the financial sewer they flushed down so much toilet paper. According to the stock ticker, they lost value today. And the after hours trade is all down, down the drain. So I am guessing, the 'fools with money to part' are departing despite this stunning news.


Goldman sells $500 mln of Chrysler debt at very deep discount
Goldman Sachs placed $500 million of Chrysler Automotive's loans at a price of 63 cents Wednesday to an investor group that included hedge funds, a person familiar with the matter said. Those loans are trading between 64 cents and 66 cents at the moment, another person familiar with the matter said, indicating some demand for the debt at this deeply discounted price. At such a price, the yield on the debt is more than 20%.

JP Morgan, Citigroup, Morgan Stanley and Bear Stearns Bear-Stearns-Troubles are also underwriting the Chrysler Automotive deal, but Goldman Sachs sold part of its stake independently of the syndicate. It's a practice that's becoming more common in the leveraged loan markets as banks look to trim their exposure to risky leveraged buyout debt that they have been stuck holding onto since the credit crunch erupted last summer.

It's also not the first time Goldman has broken away from this syndicate to sell Chrysler Automotive debt. The bank originally held about $1.6 billion of the $7 billion first-lien loan issued to finance Cerberus Capital Management LP's purchase of an 80% stake in Chrysler Group from DaimlerChrysler AG (DCX). According to a report by Standard & Poor's Leveraged Commentary & Data unit, Goldman had already sold about $300 million of that exposure.

There is no honor within a conspiracy of con artists! Note how Goldman Sachs bailed out on the others without warning. This should be a lesson to all of them: trust? HAHAHA. Pickpockets are more trustworthy. Of course, just like last month when GS boasted that they conned their investors into buying bad tranche waste paper while GS skated away with profits, so it is here: they will say, 'Aren't we the smartest people on earth?' Goodfellows, all. The three headed hell hound is being burned over and over again.

April 10, 2008 - Elaine Meinel Supkis

:kotz GS

lunar 11.04.2008 08:00

Zitat von lunar

Dies ist das Hauptmodell von Armstrong, das Economic Confidence Modell (Vertrauensmodell), wobei die Zyklenlänge 8.6 Jahre ist, was sich als Pi 3.14159 x 1000 = 3.142 Tage berechnet.

Wirtschaftliches Vertrauen ist entscheidend für Kursentwicklungen in den Finanzmärkten, ganz besonders bei Blasen. Auf der psychologischen Ebene kann man Blasen auch als überbordendes und unrealistisches Vertrauen definieren. Die beiden 8.6-Jahres-Tiefs 1994.25 und 2002.85 waren Tiefs des 4-Jahres-Zyklus, 1994.45 sogar taggenau. Das Hoch 1989.95 war das Allzeithoch des Nikkei, 1998.55 taggenau das Hoch der Aktienmärkte vor dem Crash 1998. Das letzte Vertrauenshoch 2007.16 (= Ende Februar 2007) korrelierte genau mit dem Platzen der Immobilienblase und dem ersten Auftreten der Subprime-Probleme.

:schwitz na das gehört leider auch dazu :rolleyes:(

News about Martin A. Armstrong, including commentary and archival articles published in The New York Times.


Jailed 7 Years for Contempt, Adviser Is Headed for Prison

Martin A. Armstrong, a financial adviser, will begin serving a five-year sentence for conspiracy to commit fraud.
April 28, 2007

lunar 11.04.2008 10:53

The Coming Collapse of the Middle Class

January 31, 2008 (More info) Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America's credit economy, which she has linked t...

(dauert eine knappe Stunde :rolleyes;) 5 Minuten Einführung dann spricht sie)

lunar 11.04.2008 15:40

Page last updated at 17:04 GMT, Wednesday, 9 April 2008 18:04 UK

IMF slashes world growth forecast

The International Monetary Fund (IMF) has said that the world economy will grow much more slowly in the next two years as a result of the credit crunch.

In its latest economic forecast, the IMF says that world economic growth will slow to 3.7% in 2008 and 2009, 1.25% lower than growth in 2007.

The downturn will be led by the US, which the IMF believes will go into a "mild recession" this year.

Growth in the UK will slow sharply to 1.6% in both 2008 and 2009.

It said that the UK economy would be affected by a weakening housing market, the contraction of the financial sector, and the impact on UK exports of weaker growth in the US and Europe.

Its UK forecast is substantially below the Treasury forecast of around 2% growth this year and 2.5% next year made at the time of the March Budget.

'Worst since Great Depression'

The IMF admits that the global downturn might be still more severe than it is currently predicting, and says that there is a one in four chance of a "global recession" when world growth falls below 3%.

"The financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression," the report says.

The world downturn will be led by problems in the US housing market, but the IMF warns that excessive house price inflation in some European countries, including Spain, Ireland and the UK, has made them more vulnerable to a slowdown.

House prices have already fallen by around 10% in the US by some measures, and the IMF says that they may be over-valued by more than 20% in the UK, Ireland and Spain.

It is forecasting further falls in US house prices of 14% to 20% this year.

The head of the International Labour Organisation (ILO) said that crisis required measures to protect workers from the downturn.

"We need to find a better balance between the democratic voice of society, the productive dynamic of the market and the regulatory function of the state", ILO Director-General Juan Somavia said in a statement to the IMF meeting.

US recession

The IMF forecasts that the US economy will grow by just 0.5% during 2008 and will actually contract in the first half of the year.

Its recovery will be slow, with growth of only 0.6% forecast in 2009.

"The US economy will tip into a mild recession in 2008 as a result of mutually reinforcing housing and financial market cycles, with only a gradual recovery in 2009, reflecting the time needed to resolve underlying balance sheet strains," the report notes.

It says that, comparing the US economy year-on-year from the four quarter of 2007 to the fourth quarter of 2008. it will be 0.7% smaller, as the recession bites in the first half of this year.

And it warns that with the scale of the credit losses to the financial sector approaching $1 trillion (£500bn), there is a risk that the crisis could get worse.

"The greatest risk comes from the still-unfolding events in financial markets," it says, warning that the current credit squeeze could "mutate into a full-blown credit crunch".

The IMF says that losses are spreading from sub-prime mortgage assets to other sectors, such as commercial property, consumer credit, and company debt.

The IMF also says that given the potential severity of the problems, "additional initiatives to support the US housing market, including the use of the public balance sheet, could help reduce uncertainties about the evolution of the US financial system" although it warned that "care would be needed to avoid undue moral hazard".

The US Congress and the Bush administration are currently deadlocked over plans for further aid to the housing sector, with Democrats in both branches of Congress proposing an expansion of financial support for home owners facing foreclosure.

European impact

The biggest impact of the US slowdown is likely to felt in Europe, which is the biggest trading partner with the US.

"Activity in the other advanced economies will be sluggish in both 2008 and 2009 in the face of trade and financial spillovers," the IMF says.

It is predicting growth in the eurozone of just 1.4% in 2008 and 1.2% in 2009, with Europe's largest economy, Germany, growing by just 1% in 2009, a sharp revision of its forecast just three months ago.

And it says that in light of the slowdown, the European Central Bank - which has kept interest rates unchanged due to concern about inflation - "can afford some easing of its policy stance".

And it suggests that in future, central banks should take more account of rising house prices when setting interest rates, in effect "leaning against the wind" to prevent house prices moving out of "normal valuation ranges".

This is an implicit criticism of the US Federal Reserve which kept interest rates at 1% for several years under former chairman Alan Greenspan.

Worldwide impact

The IMF says that the big emerging market countries like China and India which are growing rapidly will be less affected by the slowdown, although they will be affected by a slowdown in trade among the rich countries.

The rate of growth of imports into rich countries is expected to slow sharply, leading to a cut in the rate of growth of exports by developing countries.

And it warns that the spillover will more severe in Latin America or in countries linked to the dollar, which has declined sharply on world currency markets.

lunar 11.04.2008 16:27

Worth a Listen...

lunar 11.04.2008 16:51

11 April 2008

An Accounting View of the Financial Credit Crisis

Here's a joke to cheer up GE shareholders on this difficult morning.

There are two sides of the balance sheet - the left side and the right side.
The problem is that, on the left side, there is nothing right,
and on the right side, there is nothing left!
And some weekend reading for Jeff Immelt.

As a reminder, US financial companies start reporting their quarterly results next week.

Posted by Jesse at 11:13 AM

PigMan of the Week Award

Thanks go to Lloyd Blankfein of Goldman Sachs for giving the markets some weasel-worded false encouragement Thursday morning that the credit crisis is "almost over." It helped to trigger a sucker's rally.

And "if we are in a recession, its a mild one." We'll put that one down in the books. In fact, we wish someone would take a look at your trading book.

Lloyd, who received about $70 million of compensation last year by some estimates, also said that shareholder votes on executive pay would "constrain the board and hurt the investment bank's ability to attract the best employees."

Lloyd, you get the "PigMan of the Week Award."

Posted by Jesse at 10:15 AM

lunar 13.04.2008 19:13

Zitat von ironfist


Das Machtbeben,2511284

merci :supi

lunar 13.04.2008 19:27

1 Anhang/Anhänge

lunar 14.04.2008 12:06

14. April 2008


Die Wut der Armen

850 Millionen Menschen hungern weltweit. Ihre Verzweiflung löst Revolten in Nordafrika, Asien und Lateinamerika aus. Die Weltbank warnt, dass auch Regionalmächte wie Ägypten kollabieren könnten, wenn Lebensmittel unbezahlbar werden.

Fort Dimanche, ein ehemaliges Gefängnis in den Hügeln über Haitis Hauptstadt Port-au-Prince, ist die Hölle auf Erden. Früher folterten hier die Tontons Macoutes, die Todesschwadronen von Diktator "Baby Doc" Duvalier. Heute hausen Tausende Habenichtse auf dem Gelände und wühlen in Müllhaufen, doch selbst Hunde finden hier kaum Nahrung.


Auf dem Dach des einstigen Kerkers legen erfinderische Frauen etwas aus, das an Kekse erinnert und auch so genannt wird. Die wichtigste Zutat bringen Lastwagen aus den nahen Bergen, es ist gelber Lehm, der mit etwas Salz und Pflanzenfett zu einem Teig verrührt wird und dann in der Tropensonne trocknet.

Für viele Haitianer sind Lehmkekse die einzige Mahlzeit. Sie schmecken nach Fett, saugen die Feuchtigkeit aus dem Mund und hinterlassen einen Nachgeschmack von Dreck. Häufig verursachen sie Durchfall, aber sie betäuben das Hungergefühl.
"Ich hoffe, dass ich eines Tages auf sie verzichten kann", sagt Marie Noël, 40, die ihre sieben Kinder mit dem erdigen Fraß durchbringt. Der Lehm für 100 Plätzchen kostet fünf Dollar; binnen eines Jahres ist der Preis um 1,50 Dollar gestiegen, also um rund 40 Prozent. Ähnlich ist es bei den Grundnahrungsmitteln. Man bekommt allerdings mehr Kekse als Brot oder Maisfladen fürs Geld. Die tägliche Schüssel Reis ist kaum noch erschwinglich......

den ganzen Artikel hier lesen:,1518,547009,00.html

lunar 14.04.2008 12:31

:verbeug DemReadingDU
21. Update: While you were sleeping: A financial coup d'état
An interesting comment Saturday from Ilargi in his blog The Automatic Earth

Ilargi said...

I don't really know why people keep assuming that China depends on the US economy, and will try to keep some kind of status quo in trade. China's economy is blowing up with all those dollars flowing in. That is something they know very well, and they have prepared their next steps, rest assured.

As for the US, they don't need the outside capital nearly as much now as they did before Wednesday. I dedicated a post to it, but I don't feel at all that many people have understood what happened. Not when I see the comments here nor looking at what has been said in the media. They'll all learn yet.

In that post, While you were sleeping: A financial coup d'état, I sought to explain, with the help of three Wall Street Journal articles, that the Fed will from now on no longer borrow from China, but from its "own" US citizens, and their kids.

It will effectively have an unlimited credit line, "financed" through unlimited taxation of the US population. It is truly a coup, creating a lame duck political system. And a far more serious development than has been presently recognized.

April 12, 2008 7:12 PM

The first While you were sleeping...

The 2nd While you were sleeping...

Is The Federal Reserve Insane? Or Desperate?


lunar 15.04.2008 08:51

Posted On: Monday, April 14, 2008, 3:48:00 PM EST

The Criminal Actions Of Mainstream Media

Author: Jim Sinclair

Dear Extended Family,

It strikes me as almost criminal that last week going into the weekend newspaper articles declared the credit problem solved. They based this statement off the “evidence” that the borrowing at the Fed Begging Bowl loan window had declined.

Logically that is the weakest argument possible and is akin to saying a gambler lost less money last week so he certainly is on the way to becoming a winner. It is a story about the weather from a weatherman who refuses to ever look out the window.

How many investors have made decisions based on this misinformation?

How many regular people continue to dig their own credit graves because they are told that all is well and is only getting better? This is where the crime is committed against a public who really cannot defend themselves.

Maybe being silent would be an ethical route to take in order to not disturb the social order created by spin's plausible denial.

But then along comes Wachovia Bank fessing up to their new mark to model cartoon values of items that have no market and therefore no worth. The Fed has a new client at the Begging Bowl loan window and potentially a nice public financing deal to take part in.

You have not heard about 90% of the private and non-financial public entities holding this junk from money market funds to the old and enfeebled lighthouse employee’s retirement fund. I do not think OTC derivatives missed a town, state, widow, orphans or retirement fund.

There is so much more to come both in OTC derivative disaster real values as well as the failure of other arenas of derivative financing such as auto loans and leases.

The tip of the iceberg is credit, then credit default OTC derivatives, but that is only a miniscule part of the ocean of market to model icebergs.

Goldman Sach today said that US corporate earning are and are going to continue to be PUTRID. *

How does Goldman's "Earning Stink and will Stink" speak to Municipal, State and Federal income as the cost of everything rises? How does Goldman's statement speak to the US Federal Budget Deficit? You have not heard a peep on that subject from the Talking Heads.

It will be a miracle if the dollar holds at USDX .5200 or if gold ONLY goes to $1650.

The chopping of gold, violent at times, is perfect action for the Bull case. Gold was down over $10USD last evening on the G7/G9 (yesterday’s biggies, not today's) pure BS statement.

When will the West learn? We have shot ourselves in the back of the head with the damn OTC derivatives. They still are making and selling them as we speak. It will take a tank on top of them even to slow down the creation of these WMDs.

Respectfully yours,
Jim -

* -
pu·trid play_w("P0679500")adj.1. Decomposed and foul-smelling; rotten.
2. Proceeding from, relating to, or exhibiting putrefaction.
3. Morally rotten; corrupt
4. Extremely objectionable; vile.

Silverbay 15.04.2008 10:01

Silvio III ...
Noch in der Nacht zum Dienstag sagte der künftige Regierungschef,
er wolle die erste Kabinettssitzung nach Neapel einberufen, um den

Müllnotstand der süditalienischen Stadt anzugehen. Sein Kabinett sei
schon fast fertig, und er wisse, " wo Hand angelegt werden muss. "


Kein Wunder, wer die neapolitanische Unterwelt erst einsetzt, um das
Chaos zu inszenieren, weiss gut, diese wieder einzusetzen, um La Città
wieder glänzen zu lassen. vgl. Campanella

Italienisches Manöver, Signore bald wieder Seite an Seite mit seinen
demokratischen Amtskollegen ...

* obiges Zitat aus den Heinzelmann Studios, Mainz

lunar 15.04.2008 16:28

:rolleyes :rolleyes

The Dollar Hasn't Bounced

I first presented the following chart with its downward pointing arrow in my alert on November 11, 2007, and made the following observation. "When taken together, the eerie calm as the dollar collapses and the arrow in the above chart pointing to the building downside momentum suggest that the dollar is nowhere near its final low."

I drew the downward pointing arrow back then purposefully. All the signs indicated to me that years of dollar mismanagement were finally taking its toll. I concluded that the dollar was heading for a major collapse that would culminate in a currency crisis by this summer, which is the time frame indicated by the arrow.

Anyone who has read these alerts or the book I co-authored with John Rubino knows that I am expecting a total collapse in the dollar. As I have said many times, the dollar is on the road to the fiat currency graveyard. But the question I am always asked is when will it get there? When will it collapse? The answer is in the above chart – this summer.

The dollar of course has been collapsing for years. Inflation has eroded its purchasing power, and inferior assets on bank balance sheets have debased its quality. What's more, rather than being left unfettered as a neutral tool for use in global commerce by one and all – which is the role required of the world's reserve currency – U.S. politicians have turned the dollar into an imperial weapon to extend their influence, further undermining its usefulness as currency. So it is not surprising that the Dollar Index has declined 41% from its peak on July 5, 2001, nor is what is happening now a surprise. Maybe I should say what isn't happening now. The dollar hasn't bounced.

We can see on the above chart the dollar's steep drop from December 20, 2007 to March 17, 2008. Under intense selling pressure, the dollar fell on 40 of these 60 trading days from 77.79 to its record low of 71.46. That 8.1% drop equates to a breathtaking 50% annual rate of decline. After a drop like that, one would expect a bounce in normal circumstances, just like the dollar bounced after the other huge drops that we can see on the chart. But it didn't happen. Why not?

One can only conclude that these are not normal circumstances. In other words, I think we have reached the 'tipping point'.

More people want out of the dollar than those who are willing to hold it. The final collapse of the dollar begins now. It will I expect play out over the next three to six months, culminating in a major dollar crisis.

I have been waiting for two events in particular to signal that the final collapse of the dollar had begun. One was for the Dollar Index to make a new record low by breaking below 78.30, which it did just a few weeks before I drew the arrow in the above chart last November. The other event was for gold to break above $1,000, which I anticipated would happen this year. Gold did briefly break above $1,000 last month before being beaten back down below that much-watched level by the gold cartel. I recommend reading the article in the current issue of Investor's Digest by John Embry of Sprott Asset Management describing this brief encounter with $1,000.....

Published by GoldMoney
Copyright © 2008. All rights reserved.
Edited by James Turk,
full story:

lunar 15.04.2008 17:13

Boston Dynamics Big Dog (new video March 2008)

lunar 16.04.2008 14:49


Sibiriens Klimagas- Tresor öffnet sich

Ein neuer Klimaschock bahnt sich an: Forscher haben alarmierende Hinweise gefunden, dass der gefrorene Boden im Schelfmeer der Arktis auftaut und eingelagertes Methan freisetzt. Die Folge wäre eine katastrophale Erderwärmung - Methan ist ein noch viel stärkeres Treibhausgas als CO2. Von Volker Mrasek mehr... [ Forum ]

...leider ist der Spiegel mir Verklagen schnell zur Hand wenn man den ganzen Artikel postet :bad

Silverbay 16.04.2008 17:56

Methan ...
... das ist richtig,

der Umfang der "noch" gebundenen Gase
in den Permafrost Gebieten ist ein nicht
kalkulierbares Risiko – und nicht nur eine
Metapher für das financial climate ...

Aktuelle Uhrzeit 03:16

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