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lunar 20.08.2008 21:23

Auric @ 13:26 pm

-> Posted by GoldBalloon @ 14:26 pm on August 20, 2008
Huh. All I caught was a gross ugly sucker, threw it up on the ‘bank’ for the raccoons & vultures to feast on.

lunar 21.08.2008 08:13

lohnt sich zu hören - knappe 10 Minuten, geht um Gold aber auch gegen Schluss etwas Politik und die Aussicht, dass eine grosse AmiBank belly up gehen wird :rolleyes

lunar 21.08.2008 08:33

Aug 20, 2008 7:36 pm US/Eastern

BEIN' GREEN: Bloomberg proposes windmills on New York City bridges, skyscrapers...

mit Video - hmmmm....windy N.Y. :rolleyes:gruebel

lunar 21.08.2008 08:39

Madrid Airport Horror: 153 Burned Alive In Jet...
The holiday flight into hell...


lunar 21.08.2008 08:53

White House missing as many as 225 days of e-mail
Aug 20 03:53 PM US/Eastern
Associated Press Writer
WASHINGTON (AP) - The White House is missing as many as 225 days of e-mail dating back to 2003 and there is little if any likelihood a recovery effort will be completed by the time the Bush administration leaves office, according to an internal White House draft document obtained by The Associated Press. The nine-page outline of the White House's e-mail problems invites companies to bid on a project to recover the missing electronic messages.

The work would be carried out through April 19, 2009, according to the Office of Administration request for contractors' proposals, which was dated June 20.

Last week, the White House declined to comment on the document.

On Wednesday, the White House refused to talk about internal White House contracting procedures, but said the information is "outdated and seriously inaccurate." It would not elaborate. The White House also declined to say whether it has hired a contractor for the work yet.

"With an eye on the clock, the White House continues to drag its feet and do everything possible to postpone public access to the records of this presidency," said Anne Weismann, chief counsel to Citizens for Responsibility and Ethics in Washington, a private watchdog group.....

full story:

....wie praktisch :rolleyes

lunar 21.08.2008 09:02


lunar 21.08.2008 13:27

Zitat des Tages - Trader's Daily

"Eine gewisse Stumpfheit des Geistes scheint aber eine notwendige Eigenschaft, wenn nicht jedes aktiven Menschen, so doch jedes ernsthaften Geldsammlers zu sein."

- Gelesen in: „Der Idiot" von Fjodor Dostojewski (1821-1888)

lunar 21.08.2008 13:58

Why So Depressed?

Phil Gramm, economic advisor to Presidential candidate John McCain, said last month that the U.S. consumer was in a mental recession and that the economy’s fundamentals didn’t warrant the low consumer confidence numbers. Mr. Gramm made the following comments in a Washington Times interview: McCain adviser talks of ‘mental recession’ (07/09/2008)

We have sort of become a nation of whiners.

You just hear this constant whining, complaining about a loss of competitiveness, America in decline.

We've never been more dominant; we've never had more natural advantages than we have today. We have benefited greatly (from the globalization of the economy in the last 30 years).

WE have benefited greatly,” Mr. Gramm? In case you hadn’t heard, real wages for the average consumer have DECLINED this decade unlike Wall Street heads who have been showered with multi million dollar bonuses. They have received these bonuses as a reward for helping expand the financial economy’s largess to produce a generational credit bubble and for selling our asset-backed slime all over the world, damaging our financial institution’s credibility in foreigners’ eyes. Those same Wall Street CEOs have been punished for their crimes by getting the boot with outlandish bonuses and severance packages as the small list below highlights.

  • Lloyd Blankfein: Goldman Sachs Group Inc. $67.9 million bonus received in 2007 :dumm
  • Charles Prince: Citigroup Inc. – Retires with a $42 million package in 2007 :dumm
  • Stanley O’Neal: Merrill Lynch & Co. Inc. – Retires with $161.5 million in 2007 :dumm
  • Angelo Mozilo: Countrywide Financial Corp – Retirement package of $23.8 million, while refusing to accept $37.5 million severance package in 2007
  • Martin J. Sullivan: AIG - $47 million severance package received in 2008 :dumm

Main Street has not been as fortunate as their Wall Street brethren in terms of income nor received as many handouts, backstops, and bailouts from the Fed and Treasury. Indeed, Main Street has much to be concerned about. Both corporate America and the consumer do not see the same sanguine environment that Mr. Gramm does. Here’s a small list of confidence indicators and charts, with many at all-time lows.....

Chris Puplava

Copyright © 2008 All rights reserved.

full story:

lunar 21.08.2008 15:20

hystckndle :verbeug
Midas +++

one of my favorite "tarot"
Attached Images

lunar 21.08.2008 15:56

A Few Speculators Dominate Vast Market for Oil Trading

By David Cho
Washington Post Staff Writer
Thursday, August 21, 2008; Page A01

Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.

But when the Commodity Futures Trading Commission examined Vitol's books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol's portfolio -- at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange......

....."It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency's laughable assertion that excessive speculation has not contributed to rising energy prices," said Rep. John D. Dingell (D-Mich.). He added that it was "difficult to comprehend how the CFTC would allow a trader" to acquire such a large oil inventory "and not scrutinize this position any sooner."......

........."Investment banks had been frustrated with the established exchange because they really were never able to get control of it," said Michael Greenberger, a law professor at the University of Maryland and a former staff member at the CFTC. The most successful of the private platforms was InterContinental Exchange, or ICE, founded by Goldman Sachs, Morgan Stanley and a few other big brokerages in 2000. ICE soon opened a trading platform in London, allowing its founders to trade vast quantities of U.S. oil overseas without being subject to regulation.....

....For most of the past century, regulators put limits on financial actors to prevent them from dominating commodity exchanges, which were much smaller than the bond or stock markets. Only commercial operations, such as farms, airlines, manufacturers and the middlemen that handle their trading activities, were allowed to buy nearly unlimited quantities. The goal was to allow these businesses to minimize the effect of price swings. The first major change to this regulatory framework occurred in 1991, when Goldman Sachs, through a subsidiary called J. Aron, argued that it should be granted the same exemption given to commercial traders because its business of buying commodities on behalf of investors was similar to the middlemen who broker commodity transactions for commercial firms......

......CFTC documents show Vitol was one of the most active traders of oil on NYMEX as prices reached record levels. By June 6, for instance, Vitol had acquired a huge holding in oil contracts, betting prices would rise. The contracts were equal to 57.7 million barrels of oil -- about three times the amount the United States consumes daily. That day, the price of oil spiked $11 to settle at $138.54. Oil prices eventually peaked at $147.27 a barrel on July 11 before falling back to settle at $114.98 yesterday.

The documents do not say how much Vitol put down to acquire this position, but under NYMEX rules, the down payment could have been as little as $1 billion, with the company borrowing the rest......

full story:

:gruebel ....eigenartig diese Geschichte :rolleyes theoretisch müsste der Ölpreis doch jetzt abstürzen :confused:rolleyes und wie immer - wo es Kohle zu machen gibt und Regeln zu Gunsten dafür zu "ändern" da ist GS dabei :bad

....das schreibt Jesse dazu

21 August 2008

A Few Large Financial Firms Have Been Manipulating the Price of Commodities

A few large financial firms were able to influence the rules on the exchanges to allow the manipulation of commodities prices, including oil and other energy products.

Enron was an early example of this new found power. The havoc this one company was able to inflict on the State of California is a microcosm of what is happening to the world today.

This report from The Washington Post shows what opened the door for this latest round of market manipulation. Goldman Sachs figures prominently in this story.

The Commodity Futures Modernization Act, along with the repeal of the Glass-Steagall Act, set in motion the events that are battering the financial system today.
How Phil Gramm and the Wall Street Investment Banks Helped to Destroy the US Financial System

The worst is yet to come. The actions of the Fed and the Treasury are only serving to make the final outcome worse. We are heading inexorably towards an abyss.

Until reforms are put back into place, and markets and governance are once again efficient and relatively free of corruption, and price discovery and asset allocation is restored to normal functioning, the economy will lurch from crisis to crisis until we are exhausted and collapse.

The best an individual can do is to try and make themselves, their wealth, their family, and their ongoing welfare as independent as possible from the US financial system. And to vote against every Republican and the old Democratic leadership this fall.

We may be sacrificing a generation of Americans to the altar of greed.

lunar 21.08.2008 16:50

sabra (1000+ posts) Thu Aug-21-08 10:08 AM

Original message McCain unsure how many houses he owns
Source: Politico

Sen. John McCain (R-Ariz.) said in an interview Wednesday that he was uncertain how many houses he and his wife, Cindy, own.

"I think — I'll have my staff get to you," McCain told Politico in Las Cruces, N.M. "It's condominiums where — I'll have them get to you."

The correct answer is at least four, located in Arizona, California and Virginia, according to his staff. Newsweek estimated this summer that the couple owns at least seven properties.

In recent weeks, Democrats have stepped up their effort to caricature McCain as living an outlandishly rich lifestyle — a bit of payback to the GOP for portraying Sen. Barack Obama (D-Ill.) as an elitist, and for turning the spotlight in 2004 on the five homes owned by Sen. John F. Kerry (D-Mass.) and his wife, Teresa Heinz Kerry.

Read more:

Oh god. This has GOT to be in Obama's next campaign ad. K&R big time! denverbill Aug-21-08 10:09 AM
Agree--- a totally perfect KILLER ad. No need for elaboration, there. chill_wind Aug-21-08 10:11 AM

:gruebel die Amis sind komisch - hoffentlich beeindruckt das letztendlich nicht noch einige :schwitz

lunar 21.08.2008 20:36

20 August 2008

Cuomo's Probing Eye Turns To BofA, Deutsche Bank, Goldman Sachs and the Retail Brokers

They will have to wade through a lot of small fry, red herrings, patsies and stooges before they crack one of the big banking houses, if ever. That was the experience in the investigations following the Crash of 1929 and the first years of the Depression. Get your documentation in order gentlemen, and remember, he who cuts the earliest deal makes the best terms.

Cuomo’s probe looks into three banks By Aline van Duyn in New York
August 21 2008 01:59
The Financial Times

Bank of America, Deutsche Bank and Goldman Sachs are being investigated by Andrew Cuomo, the New York attorney-general, as part of his investigation into the selling of auction-rate securities. da bin ich aber wirklich gespannt :rolleyes an GS sägen :o

lunar 22.08.2008 09:51

Amateur Hour in the Precious Metals Markets

By: Richard J. Greene

-- Posted Friday, 22 August 2008 | Digg This Article |

.......Without the option of the ETFs gold would long ago have climbed past $2000 per ounce. I would wager that if only 10% of gold ETF holders sold their position and turned around and bought physical gold that gold would be back over $1000 an ounce in a heartbeat.

The gold ETF (GLD) and the silver ETF (SLV) were brought into existence and have as custodians JP Morgan and Barclay’s, sworn enemies of gold and silver.

The bailout of Freddie and Fannie is the best thing that could ever happen to gold and the worst thing that could happen to the average citizen.
It guarantees that trillions more in paper dollars will be created. The passing of this bill is a criminal act. The people of this country are, in effect, handing over a blank check to the money powers that have been robbing from us and swindling our money for years and years. Passing this bill is like handing over all the income taxes Americans pay to those that have overleveraged the system and will continue to do so. The derivatives pile has grown to $1.2 quadrillion from $550 trillion a year ago.

.....wie so oft - ziemlich lang und obwohl ein PM-Artikel - allgemein informtiv :supi

lunar 22.08.2008 12:28

:dumm nicht zu fassen :kopf i

The Hidden Campaign

Ohio Voting Machines Contained Programming Error That Dropped Votes

By Mary Pat Flaherty
A voting system used in 34 states contains a critical programming error that can cause votes to be dropped while being electronically transferred from memory cards to a central tallying point, the manufacturer acknowledges.

The problem was identified after complaints from Ohio elections officials following the March primary there, but the logic error that is the root of the problem has been part of the software for 10 years, said Chris Riggall, a spokesman for Premier Election Solutions, formerly known as Diebold.....
full story:


democracy goes down the sh1t hole if the voting machine decide the winner!!!!!!!!!!! I smell some fishy here, don't you?
Posted by: democracy? | August 22, 2008 3:12 AM

O gee, we are so suprised!!! Remember when Karl Rove was on his laptop saying don't worry about Ohio we've taken care of it and then there was this thing about vote counting when some districts had more votes than registered voters? Are we just supposed to forget this stuff? I guess we are ... coz it keeps on happening ... kind of like the drug trade ... if we wanted to turn it off, we could just stop the suppliers ... i heard that from the guy who wrote the 1600 page book on the kennedy murder ... he got interviewed on c span ... said we can do all kinds of things if we really want to ... DUH ... so the american people just seem to have a major case of dull indifference or sheepishness or ignorance or helplessness ... gawd i hope we can change that this time ... maybe the pollsters are using the same machines ...
Posted by: Gaias Child | August 22, 2008 2:00 AM

Another interesting fact that isn't mentioned in this article ... Diebold was a major contributor to George W. Bush's and other Republican candidates in 2004. Conflict of interest? You better believe it! Coincidence that Bush won the 2004 election by a mere 118,000 more votes than Kerry in the swing state of Ohio? A great many think not. It's critical that we have good, strong, HONEST people working as Poll Judges, Presiding Judges and Precinct Coordinators in Ohio in 2008 . Without them will not have accurate results. It's these people who's job it is to make sure that the electronic voting results match the number of actual votes cast.
Posted by: Carolyn Hardin-Levine | August 21, 2008 11:01 PM

I sure hope Johnny McBush has a staffer assisting him when he votes on one of them there electronic gizmos-- maybe he can spare one of the staffers who isn't out counting how many houses he has :hihi
Posted by: pax_vobiscum2002 | August 21, 2008 9:56 PM

.....und viele mehr :cool

lunar 22.08.2008 15:58

:rolleyes...und schon ist ein Jahr verflogen seit......

Anniversary Of The New Money Window At Fed


Elaine Meinel Supkis

Gold coin sales have been suspended at the Mint due to lack of raw gold. This is a signal that gold will begin to climb again, not bounce lower. And this is the anniversary of the New Borrowing Window at the Fed. Worth reading how it all began. And stocks rose today on the hopes that Asians will buy up all our banks. But the biggest bank on earth is now a Chinese bank, by the way. The Chinese succeeded in their desire to 'be bank.' And Kristof of the NYT talks stupid about China while palming himself off as a China expert who understands the economy.

8/22/2008: Big Banks Get Big Bucks From Bernanke
In the future, the guys who are making this mess can rehabilitate themselves by doing useful work as we see below. Meanwhile, the top banks and the Federal Reserve play a game they played back in 1929 when they needed to 'stop the panic'. It will be just as useless. Nearly 40,000 mortgage company employees are without work in just ONE WEEK. And more companies are folding faster than umbrellas at Yankee Stadium after a summer shower.
Our government is going bankrupt. It can't pay for everyone all at once. And the sums used to help regular people are far smaller than the epic funds (infinity?) used to protect wild business wheeler-dealers.
Here is a Market Watch headline that boasts about the stupid rescue operation that has now made things infinitely worse: 'V' for 'Very Fucked Up.' Normally, stocks do NOT do a violent down and then an equally violent upwards move without any real news happening. Namely, no Presidents were assassinated, no terrorist attacks on Wall Street. Nothing except a very dangerous banking crisis caused by wild spending, wild lending and ridiculously low interest rates below the rate of inflation. All the main banks in the world except for China, used every possible trick to reinflate this stupid bubble. This should never have happened. The US went off a cliff long ago and is now falling through space. The entire economy became focused on building and selling houses.
From Associated Press: Four major banks said Wednesday they each borrowed $500 million from the Federal Reserve's discount window, lending weight to the central bank's efforts to restore liquidity to tight markets.
In going public with the moves, Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. each stressed they have "substantial liquidity" and the ability to borrow money elsewhere. The borrowings, at least in part, seemed meant to reassure investors' jitters about the credit crunch rattling Wall Street.

In a joint statement, the latter three banks said they decided to borrow the money to demonstrate "the potential value of the Fed's primary credit facility" and encourage its use by other banks.

Hey, give me $500 million. I like these stupid rich people: they trot off to a private bank run as if it were a government agency and they hold out their slimy paws and get $500 million magic dollars, no questions asked. Not only that, they all said they didn't need the money at all! Well, hell's bells, give it to me! This charity from the same clowns who hate Social Security and whine about giving health care to children, are suddenly Santa Claus and Trick or Treating their good buddies and golf partners! And the statement that this is to demonstrate that the Fed is primarily a credit facility...good grief! You mean to tell me our bankers didn't already know this? Are they this stupid?
One year ago, Bernanke used dynamite to blow a small hole in the side of the US Federal Reserve's vaults. His buddies in Goldman Sachs [I keep writing 'Gollum Sachs'] and JP Morgan and others then reached inside and put down SIVs and CDOs that were nearly worthless and took cash out. 'It's only $500 million,' said Bernake as these pirates, gnomes and no goodniks all rushed to the new 'window' to 'borrow' money.

Note how these criminal minds all tried to laugh it all off back then! It was an 'experiment'! They were just testing to see if this new system just might work. Eh. Right. Well, nothing bad happened so they blasted a huge, gaping hole in the side of the Treasury and are now openly looting it to the tune of many billions a month. The amount rises astronomically. This summer, it was closer to $500 billion than $500 million.

I correctly analyzed this whole scam from day one. A matter of personal pride. This is easy because I love picture images. The crooks who pulled off this scam had to use the word 'window' to describe this gaping hole. Since I emphatically believe that all money-based wealth comes from the Cave of Death, the image of Bernake and his buddies blasting a hole in it and calling it a window didn't fool me. The word 'window', by the way, is Old Norse for 'Eye of the Wind'. It is a hole that lets the wind blow, a hole at eye-level.

The howling hurricane of wealth destruction is shrieking as it tears through this hole. And Bernanke has widened this whole hole repeatedly until basically, there is no barrier between 'money' and its movement to the outer world where 'money' becomes 'real'. And what is this feeding?

The dire goddess of Inflation. She who can fly faster than thought. One of the daughters of Lady Luck, also known as Miz Risky or the Whore of Babylon. This is the lady the banking gnomes worship and desire with all their souls.

Paulson Risks Goldman Standard as Fannie, Freddie Shares Erode
(Bloomberg) -- As soon as he became secretary of the U.S. Treasury in July 2006, Hank Paulson started preparing for a crisis. In August 2006, at a meeting with President George W. Bush and his economic team at Camp David, Maryland, the former Goldman Sachs Group Inc. chief executive officer gave a talk about the capital markets.

Paulson held up over-the-counter derivatives as an example of financial innovation that could, under certain circumstances, blow up in Wall Street's face and affect the whole economy. ``My point was that we had gone eight years since the last serious problem in capital markets and that there'd been all of this innovation,'' Paulson said in an interview in late July.

Paulson also revived the President's Working Group on Financial Markets, a council of regulators consisting of the Federal Reserve, the Treasury, the Securities and Exchange Commission and the Commodities Futures Trading Commission.

Founded after the stock market crash of 1987, the group had fallen into disuse. Paulson began to build relationships among the agencies, figuring that the financial markets panel would be key to addressing the next crisis, no matter what that would be.

Hell's bells around the necks of all gnomes! This story is HILARIOUS. HAHAHA. OK: Snow resigned because he told Bush of the train wreck right around the corner. Paulson had to drop his normal gnome activities of making himself rich via destroying our economy. He rushed into the Treasury with his hammers, tongs and pitchforks. He immediately prepared for the Crash he knew was looming. He knew this because he is smart and he is the cause of the looming crash. He figured, if he spend three years protecting himself and his buddies, it would be worth it. He figured this would be a piece of cake. All he had to do was get Bernanke to blast a hole into the side of the Treasury and loot it.

Which was done. Only it didn't work. This is why understanding the nature of the Cave of Death is so important. Remember Pandora? She opened the Cave of Death only in her case, it was a casket which is pretty much a coffin, and out came all the world's ills: depression, inflation, stagnation, war and death. But one thing was left: hope.

lunar 22.08.2008 18:07


Kabul wirft westlichen Truppen Tötung von 76 Zivilisten vor

Bei einem Bombenangriff in Westafghanistan sind nach Angaben des Innenministeriums in Kabul 76 Zivilisten ums Leben gekommen - vor allem Frauen und Kinder. Es sei ein "Unfall" gewesen. Westliche Militärs melden dagegen nur die Tötung von 30 Taliban-Kämpfern in dem Gebiet. mehr...


Silverbay 22.08.2008 18:26


«Das US-Militär hatte zuvor mitgeteilt, dass etwa
30 Rebellen bei Luftangriffen in der Gegend getötet
worden seien. Ein Armeesprecher sagte, es gebe
keine Berichte über zivile Verluste»


lunar 22.08.2008 20:40

....für ein Weilchen verzieh ich mich gen Süden :) vielleicht postet ja hie und da mal jemand was - "scary" Sachen gibt es ja leider genug :rolleyes
adios :):winke

lunar 10.09.2008 08:41

....hmmm :schwitz anscheinend nix "scary" passiert :rolleyes nur mein PF schlottert :confused:( dann ist ja :supi für alle andern :cool

Last Ditch

James Howard Kunstler
September 9th, 2008
Author of The Long Emergency

Why do the big deals always happen over the weekends? So the big boyz in government and finance can take off their neckties when they bargain with each other? So the markets will be closed and unable to register a response one way or another? So the shrinking fraction of the US public that pays attention to anything besides Nascar and pornography won't catch the news Saturday evening? This weekend's big deal was the US government taking over the "government sponsored enterprises" (GSEs)

Fannie Mae and Freddie Mac that guarantee trillions of dollars in mortgages. The "guarantee" is supposedly accomplished by converting bundles of mortgages from the banks and loan companies that originate them (that make the contracts with the buyers of houses) into bonds that can be sold downstream. Risk was theoretically dispersed among the holders of these bonds. This all seemed to work during the long stable period when our cheap oil economy was chugging along, and house prices maintained a consistent relationship with incomes, and people paid their mortgages dependably. The whole system ran like a reliable machine -- like a Chrysler slant-six engine!

Until the cheap oil age came to an end. Then, all parts of the system shook apart. It was the end of cheap oil that catalyzed the housing collapse and, by extension, the current huge financial crisis. But the run up to it was like a bounce off a high diving board into an empty pool. The bounce came around 2001 when it became apparent that the US standard-of-living could not be maintained on incomes in a post-cheap-oil economy. The trauma of 9/11 prompted a new and utterly insane consensus to form that the US standard of living could be switched over from income to massive debt. All the normal brakes against irresponsible lending and borrowing came off -- embodied in Alan Greenspan's absurd statement that it was a good time to assume an adjustable rate mortgage when interest rates were at a historic low -- meaning they could only be adjusted upwards. Why hold Greenspan responsible? Because he was at the apex of the authority vested with establishing norms, and he shoved our behavior into the realm of the recklessly abnormal, and he should have known better.(:greenspan...nach mir die Sintflut :mad)

The public went along with it because "free money" and high living are fun. Their behavior was reinforced by other authorities -- for instance, President Bush, who told Americans to go shopping after the 9/11 attacks. (They went shopping with credit cards.) Things really wobbled in 2005 -- which was, coincidentally, the year of all-time world-wide peak conventional oil production -- with hurricanes Katrina and Rita ripping through the Gulf of Mexico oil rigs as a dramatic highlight. (It was also the year that The Long Emergency was published.)

Since then, the US economy and the financial part of it that became a nine hundred pound tail wagging a thirty-pound dog, has been held together with baling wire, duct tape, and band-aids. All the debt run up by all parties -- home-owners, credit-card holders, business, banks, hedge funds, government -- is not being paid back reliably, and all the leveraged arrangements that depend on it being paid back are coming apart. Thus, capital disappears. The wealth of a nation disappears. All that remains is the pretense that we are still a wealthy society

Fannie and Freddie are near the center of this black hole of debt. So far, the black hole has been "papered over" by the old stage magician's trick of diverting the audience's attention. The systemic wound that Bear Stearns represented, was covered up with a band-aid applied by the Federal Reserve's exchange of loans for worthless securities. In fact, the capital of Bear Stearns actually did disappear -- a mere residue of it, a few cents on the dollar, was shifted to JP Morgan as payment for taking the wrapper off the band-aid. But, basically, the money is gone.

Now, the same thing has happened with Fannie and Freddie, except that the scale is an order of magnitude greater. This time, the US Treasury Department is assuming worthless paper and paying out much larger loans to enterprises that are functionally bankrupt. The exact nature of the government's chartered "sponsorship" has always been ambiguous. Professional opinion has generally held that government backing was implied rather than explicit -- but that's a ridiculous internal contradiction that went unchallenged for decades as Fannie and Freddie's Ponzi-style operation lumbered on (and their executives made off with obscene payouts). Now the government's role has suddenly been made explicit. It will probably only make things worse, since the enterprises are too big and over-scaled to work under any circumstances, let alone insolvency.

One thing this points to is a truth that is uniformly overlooked by kibitzers: that what we developed over the past decade in America was not an "information economy" or a "consumer economy" but a suburban sprawl building economy, meaning an economy dedicated to building a living arrangement with no future. The climax of the sprawl building economy occurred in absolute lockstep with the climax of peak oil. You can date it virtually to the month -- May, 2005. After that, the future asserted itself and all the financial expectations bound up with sprawl-building went up in a vapor -- including the value of mortgages on suburban houses. Everything that followed has been an attempt to cover up this basic reality: that the way we live in America can't continue.

The reason our energy debate is so hollow and idiotic is because we can't face this basic reality. The fantasy-du-jour among both political parties is that we can become "energy independent." By this they mean we can keep on living the way we do by means other than oil. This is just not true. We have to make profound changes in everything we do from the way we inhabit the landscape to the way we produce our food. Lately, the only change we've shown any interest in is changing what our cars run on. But that is not going to rescue us, not even a little. Our inability to talk about anything else except the cars will drag us down into poverty and turmoil.

The housing market is not coming back. Ever. In the form that we knew it. The suburban project is over. That version of the American Dream is over. We'll be a lot better off if we put aside dreaming altogether for a while and start focusing on reality instead -- that part of the day when we're awake and capable of actually doing things. We've got a lot to face and a lot to do.

The government takeover of Fannie and Freddie is just another papering-over of our fundamental problem -- that until we embark on new ways of being a nation, of living differently and working differently on different things, the other nations of the world will not have confidence in us, or the paper we issue, and we will not really have confidence in ourselves.

I have believed all along -- and said as much in The Long Emergency -- that we would not get through this crisis without passing through a period of hardship. We're entering it now. Even if the stock markets shoot up five hundred points today on the basis of the Fannie-Freddie deal (and the mistaken belief that our troubles are over), we are only at the beginning of a very painful workout. Personally, I think we're in for financial carnage before the election. The Fannie-Freddie deal may be the place where the wheels really come off.

James Howard Kunstler
September 9th, 2008
Author of The Long Emergency

Jim Kunstler is the author of The Long Emergency, The Geography of Nowhere and many other books. He lives in upstate New York.

...und wieder zurück in meine leider "scary Ferien" :rolleyes

lunar 10.09.2008 08:55

...das noch :cool


Genf trotzt dem Weltuntergang

Das größte Experiment der Welt beginnt - und die Anwohner des Kernforschungszentrums Cern nehmen's gelassen. An gefährliche Schwarze Löcher glaubt kaum jemand in Genf. Junge Cern-Mitarbeiter nehmen kursierenden Weltuntergangsszenarien sogar genüsslich auf die Schippe. Aus Genf berichtet Holger Dambeck mehr... [ Video | Forum ]

lunar 11.09.2008 17:04

September 10, 2008

Socialism is SO Unamerican....

Except when it benefits The Rethuglican base:
So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.
This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. These are the folks who for years spewed the rhetoric of free markets and cutting down government intervention in economic affairs. But they were so fanatically ideological about free markets that they did not realize that financial and other markets without proper rules, supervision and regulation are like a jungle where greed — untempered by fear of loss or of punishment — leads to credit bubbles and asset bubbles and manias and eventual bust and panics.
Perhaps maybe, just maybe it just might sink into the thick crusted cranial cavities some of the so called brightest and best "economists", whose hollow shells of grey matter are actually filled with nothing but wild neocon rethuglicunt trickle down bullshit ideology, that socialism indeed works in some segments of a civilized economy(not just for the rich), provided it is balanced with common sense incentives for everyone to have the opportunity to exercise initiative and entrepreneurship in a capitalist economy that has a soul.....for EVERYONE.
Including the many of us weren't born into privelege, or the conservative Borg collective.

lunar 11.09.2008 17:05

Lipstick Piggies

H/T: Scout Prime

lunar 12.09.2008 08:43

Central Banking Joke

Ben Bernanke, Alan Greenspan, and Jean-Claude Trichet are in the duck blind and a bird flies overhead.

Bernanke looks at it and says, "Looks like a duck, flies like a duck... it's probably a duck," shoots at it but misses and the bird flies away.

The next bird flies overhead, and Monsieur Trichet looks at it, then looks through the pages of a bird manual, and says, " wings, yellow bill, quacking sound...might be a duck." He raises his gun to shoot it, but the bird is long gone.

A third bird flies over. Greenspan raises his gun and shoots suddenly, brings it down, and turns and says, "Can someone go see if that was a duck?"

Posted by Jesse at 10:59 PM

...Rückschlag hoffentlich :o

lunar 12.09.2008 08:50

.... :rolleyes

Friday, September 12, 2008

Michigan (And Maybe Ohio): Lose Your Home, Lose Your Vote:bad

I have been naive enough to have believed we live in a democracy, although the evidence contradicting that view is more obvious with every passing day. Michigan Republicans plan to challenge the eligibility of voters whose homes have been foreclosed. Talk about adding insult to injury.

From Michigan Messenger (hat tip Credit Slips):
The chairman of the Republican Party in Macomb County Michigan, a key swing county in a key swing state, is planning to use a list of foreclosed homes to block people from voting in the upcoming election as part of the state GOP’s effort to challenge some voters on Election Day.

“We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses,” party chairman James Carabelli told Michigan Messenger in a telephone interview earlier this week. He said the local party wanted to make sure that proper electoral procedures were followed.

State election rules allow parties to assign “election challengers” to polls to monitor the election. In addition to observing the poll workers, these volunteers can challenge the eligibility of any voter provided they “have a good reason to believe” that the person is not eligible to vote. One allowable reason is that the person is not a “true resident of the city or township.”

The Michigan Republicans’ planned use of foreclosure lists is apparently an attempt to challenge ineligible voters as not being “true residents.”....

The Macomb County party’s plans to challenge voters who have defaulted on their house payments is likely to disproportionately affect African-Americans who are overwhelmingly Democratic voters. More than 60 percent of all sub-prime loans — the most likely kind of loan to go into default — were made to African-Americans in Michigan, according to a report issued last year by the state’s Department of Labor and Economic Growth...

Carabelli is not the only Republican Party official to suggest the targeting of foreclosed voters. In Ohio, Doug Preisse, director of elections in Franklin County (around the city of Columbus) and the chair of the local GOP, told The Columbus Dispatch that he has not ruled out challenging voters before the election due to foreclosure-related address issues.....

Challenging all voters registered to foreclosed homes could disrupt some polling places, especially in the Detroit metropolitan area. According to the real estate Web site RealtyTrac, one in every 176 households in Wayne County, metropolitan Detroit, received a foreclosure filing during the month of July. In Macomb County, the figure was one household in every 285, meaning that 1,834 homeowners received the bad news in just one month. The Macomb County foreclosure rate puts it in the top three percent of all U.S. counties in the number of distressed homeowners.
Topics: Politics, Social values

Posted by Yves Smith at 1:08 AM

9 comments Links to this post

lunar 12.09.2008 09:18



Lehman stellt sich komplett zum Verkauf

Dramatische Entwicklung wegen der Finanzkrise: Die riesige Investmentbank Lehman Brothers verhandelt mehreren US-Zeitungen zufolge mit Kaufinteressenten. Die Regierung Bush hat sich als Krisenhelfer eingeschaltet......,1518,577801,00.html

en Guete :o

Heuschrecken-Sate an Madenvariation

lunar 12.09.2008 09:51

....hmmmmm - kann nix dazu sagen, da bin ich nicht gescheit genug :schwitz:(

P.M. - Wie gefährlich ist das CERN-Experiment?

P.M. - Das Dunkle Geheimnis im All: Schwarze Löcher

lunar 12.09.2008 09:54

China may cut its dollar holdings - CICC
(China Daily)
Updated: 2008-09-12 07:32

China, which holds a fifth of its currency reserves in Fannie Mae and Freddie Mac debt, may cut the portion held in US dollars, according to China International Capital Corp (CICC), one of the nation's biggest investment banks.

Related readings:
China's forex reserve reaches $1.809 trillion by June
Experts: China should still be alert to subprime impact
Subprime impact limited on major Chinese banks
US govt takes over Fannie, Freddie

The US government this week seized control of the two mortgage-finance companies, which account for almost half of the home-loan market in the world's biggest economy, to prevent defaults from crippling them. China holds up to $400 billion in the two firms' debt, CICC Chief Economist Ha Jiming said in a report Thursday. "The crisis has made Chinese officials realize it's a bad idea to put all their eggs in one basket," wrote Hong Kong-based Ha. "This will likely lead to greater diversification of foreign exchange reserve investments."

China held $447.5 billion of US agency bonds as of June 2008, according to the CICC calculations using disclosures by the US Treasury. It is likely to reduce the portion of reserves in dollar assets from the current 60 percent by purchasing more non-dollar assets with new reserves, he said.

Countries in Asia have stockpiled foreign exchange reserves since the 1997-98 financial crisis to act as a cushion against a run on their exchange rates. That in turn has increased pressure on policymakers to ensure higher returns from more than $4 trillion in assets.

China will expand its investments in corporate bonds and equities, according to Ha. Treasury and agency bonds account for 50 percent and 40 percent of total dollar assets held by the central bank, he wrote.

lunar 12.09.2008 10:02

12.09.08, 06:51

Ausweisung des US-Botschafters

Venezuela weist den US-Botschafter Patrick Duddy aus. Damit folgt Venezuela dem Beispiel Boliviens. Dort wirft Präsident Evo Morales dem US-Botschafter vor, Boliviens Spaltung zu unterstützen.....

.....Chávez warnte Washington vor einer Aggression gegen Venezuela. In diesem Fall würden die Öllieferungen an die USA eingestellt, sagte er. Zudem schimpfte er wiederholt über „Scheiß-Yankees“ und warf er den USA vor, Lateinamerika das „Joch des Imperiums“ aufzwingen zu wollen.....

ganzer Artikel:


lunar 12.09.2008 13:54

Zitat von krisskross

:eek :o :gomad

12.09.2008 - 12:47
Freddi & Fannie: CEOs kassieren Millionenabfindung Washington ( - Die Vorstandsvorsitzenden der beiden pleite gegangenen Hypothekenfinanzierer Freddie Mac und Fannie Mae werden in diesem Jahr durch die Rettungsaktion der US-Regierung ein Abfindungspaket in Millionenhöhe beziehen. Freddie-CEO Richard Syron erhält 14 Millionen US-Dollar Jahresgehalt, Fannie-CEO Daniel Mudd 9,2 Millionen US-Dollar. Die US-Regierung gab am Wochenende bekannt, die beiden Baufinanzierer, die für die Hälfte der US-amerikanischen Privathypotheken verantwortlich sind, unter Regierungskontrolle zu stellen. Alleine seien die beiden Unternehmen nicht mehr überlebensfähig.


lunar 12.09.2008 14:03

na ja - um die CEOs & Co. muss man sich nicht sorgen, werden ja eh mit Millionen abgefunden :mad

lunar 12.09.2008 15:46

Remo7 :verbeug

Paulson "adamant" no government funds for Lehman: source
WASHINGTON (Reuters) - Treasury Secretary Henry Paulson is "adamant" that no government money be used in any deal that resolves the crisis at Wall Street investment bank Lehman Brothers, a source familiar with his thinking said on Friday.

The source said Lehman (LEH.N: Quote, Profile, Research, Stock Buzz) already has substantial support from the Federal Reserve as it races to negotiate with potential buyers.

"There are two things that make this different from Bear Stearns. The market's been aware of the situation for a long time and has had time to prepare. Second, the Primary Dealer Credit Facility was created by the Fed to allow time for an orderly process," the source told Reuters.

"Given these things, (Paulson) is adamant that there will not be government money used in the resolution of the situation," the source added.

(Reporting by David Lawder; Editing by Theodore d'Afflisio)

...mal schaun wie es nach dem WE ausschaut :rolleyes

...und eine Meinung dazu:

jaybone :verbeug

That one is easy;
The FED is not a government entity, but they do have access to the treasury.
All the benefits, none of the liability.
So when they say no government money, they mean nothing directly from the treasury. That money will be LAUNDERED by the fed first.

....wie auch immer - es wird zum Wohle der üblichen Wallstreet-FED-Fritzen sein :o

lunar 12.09.2008 16:41

Pamela Anderson tells Sarah Palin to suck it

Article from:
September 12, 2008 01:20pm

FIRST Matt Damon, now Pamela Anderson has spoken out against Republican vice presidential nominee Sarah Palin saying:"I can't stand her. She can suck it!"

Anderson, 41, was recently in Toronto speaking out against the abuse of animals in Hollywood.

When asked by E! News Weekend Canada about Palin, she has some choice words for the Republican hopeful.

The reporter asked Pam if she saw a recent Newsweek article, which showed a gigantic bear hide in the office of Palin’s house.

“I can’t stand her,” Pam blurted out. “She can suck it!”

Pam Vs Palin. Check out their galleries

Damon earlier lashed out at Palin - insisting her presidency would be like 'a really bad Disney movie'. The actor fears that Palin's running mate John MCCain won't survive a full four-year-term as president, and claims the Alaskan governor taking over would be 'a really scary thing.'

"I think there's a really good chance Sarah Palin could become president, and I think that's a really scary thing," Fox quoted Damon, as saying.

Sarah Palin in a bikini!

The right to arms, bare ... the spoof picture of Sarah Palin. Send us your favourite viral emails via the link, below left.

"It's like a really bad Disney movie. The hockey mom, you know, ''Oh, I'm just a hockey mom''... and she's facing down (Russian) President Putin... It's totally absurd... It's a really terrifying possibility," he added.

Meanwhile , Palin today insisted in her first major television interview she is ready to step in as US president if necessary. SEE FULL STORY HERE

In her first major interview Sarah Palin says she's ready to be president if necessary. 9/2008 Sky News
für Video Link anklicken --->,22049,24333997-5006003,00.html

:bad Amerika mir graut vor dir :( weniger vor Pamela denn vor Sarah :rolleyes

lunar 12.09.2008 21:13

merci @dohanics :)

Börse Go
US-Regierung hat Rohstoffpreise manipuliert? von Jochen Stanzl
Freitag 12. September 2008, 16:57 Uhr

Don Coxe, Vermögensverwalter bei dem amerikanischen Fondshaus BMO, ist der Ansicht, dass der amerikanische Finanzminister Hank Paulson und Fed-Chairman Ben Bernanke den Druck auf den Finanzsektor versucht haben zu senken, indem sie den Druck für Spekulanten und Hedgefonds erhöhten, die auf fallende Kurse beim US-Dollar und Banken und auf steigende Notierungen der Rohstoffe setzten. "Mit der Hilfe der US-Börsenaufsicht SEC und der Terminbörsenaufsicht CFTC haben Paulson und Bernanke die Falle gelegt", so Coxe. Eine dauerhafte Manipulation der Rohstoffpreise sei jedoch nicht möglich. Die Rohstoffpreise werden daher übergeordnet weiter steigen, so Coxe.

lunar 12.09.2008 21:34

12 September 2008
Dow Industrial Component AIG Getting a Share-Cut

Probably the most overlooked story of the day is the implosion of insurance giant AIG. The probable reason for this is their exposure to mortgage related insurance AND their CDS exposure to failures in the corporate bonds markets.

There are rumours swirling of some major failures that are imminent. And the Fed and Treasury cannot backstop them all.

AIG shares fall almost 30 percent on mortgage worries
September 12, 1:33 pm ET

NEW YORK (Reuters) - Shares of American International Group Inc fell almost 30 percent on Friday as investors grew increasingly concerned that its large exposure to mortgages is backing it into a corner. (That's not a corner, that's the edge of a cliff - Jesse)

The large global insurer, a component of the 30-stock Dow Jones Industrial Average index saw its shares fall as low as $12.40 in trading on the New York Stock Exchange, 29 percent off the prior's day close, before easing back to $12.53.....

......Citigroup analyst Joshua Shanker, in a research note, said he was cutting his target price for the stock to $25.50 a share from $40, citing marketplace fears over the insurer's financial condition. (Is this the same Citigroup analyst that had buy ratings all the way down on Fannie? Speaking of ratings, did you know that not one analyst has had a sell on LEH, even now? - Jesse)

Posted by Jesse at 2:49 PM - full story:

lunar 13.09.2008 11:51

The Market Ticker

Commentary On The Capital Markets

Friday, September 12. 2008

Posted by Karl Denninger at 00:06
(Page 1 of 264, totaling 527 entries) » next page
Another One Bites The Dust? (Lehman)

Here we go again.

Even though the press claims that it is "unlikely" that The Fed (or the Treasury) will put in "money" toward a Lehman acquisition, you can't believe a word of it.

In fact, you can't believe anything you read or hear from these clowns in DC.

Slowly, piece by piece, they are dismantling what used to be Free-Market Capitalism.

And how does freedom (both to succeed and fail) die?

To thunderous applause.

Certainly, when Bear Stearns failed, you got thunderous applause.

When The Fed summarily declared the financial system in "crisis", thereby granting itself powers that it arguably did not have (including lending to non-banks acquiring equity interest!) the markets roared with thunderous applause, and Congress clucked with approval. The people yawned and reached for another beer.

When the TAF, PDCF, and TSLF, all "alphabet soup" means of pumping extra liquidity into a financial system that was in trouble as a direct consequence of previous excess liquidity fed into it by Alan Greenspan, the market roared with thunderous applause.

When Treasury instantaneously doubled the federal debt, we heard the roar of thunderous applause.

And last afternoon, when a rumor started floating around that The Fed was going to once again intervene, this time to "take under" Lehman Brothers, we once again heard the market roar with thunderous applause, rising by more than 1% in - literally - less than 5 minutes.

We are truly an idiot nation.

We are being led to the economic gas chamber - quite literally - and cheer on the way.

Anything to prevent home prices from being.... gasp.... affordable!

Anything so the stock market does not go down.

Anything, including licking the boots of the Japanese and Chinese, who we now know threatened our nation's Treasurer if he did not back up debt with the explicit full faith and credit of the United States - debt they bought knowing it lacked that guarantee.

The Truth is that these institutions - all of them - got in trouble by writing paper in an imprudent manner. They loaned money to people who couldn't pay it back. As bankers, it is their job to know whether their customer can in fact pay, but that all went out the window in the "New Era of Finance", where you can shovel off your crap to someone else, forcing them to be the bagholder when it all goes "boom" rather than you.

What these geniuses forgot is that in real life it doesn't work this way, even if you think it should or might. What happens in real life is that people get greedy, and this is shortly followed by a bout of stupidity, where you lend out money on looser and looser terms, until finally you reach the point that the only real qualification is that you have a pulse.

At the same time there is always a backlog of this paper in your shop, and when the inevitable gravy train of suckers runs out, you find yourself sitting on a sizable number of these nuclear weapons - and they're all ticking.

Never mind that there's a matter of ethics here, in that these bankers knew the paper was bad. This no different, really, than selling Pintos that you know will explode if struck from behind. It was and is a defective product, and whether it "booms" on you or someone else the fact remains that these bankers knew these loans were unsound when they wrote them. They simply didn't care.

Lehman is just the latest, but not the first or last, of a long line of institutions that has or will explode.

There are no "maybe" involved in this, and if there were two firing neurons in the heads of most stock traders the market would tank every time we discover a new victim of self-immolation, for it would be yet another tick-mark in the contraction of credit, another tick-mark in the lack of diversity of business, and another tick-mark proving that the "smartest guys in the room" - in truth - have an IQ lower than Forest Gump's.

But the institutions that bail people out, including Hank Paulson and Ben Bernanke, continue to come to the microphone and pronounce that "life is like a box of chocolates".

And there we stop listening, having stuck our fingers in our ears for the "you never know exactly what you're going to get, and we may have inserted some arsenic" part of the sentence. Oh no, we hear "chocolate!" and instantly a sugar-high flows through the arteries of the market.

Like Pavlov's dogs we mash the "buy buy buy" button with a mighty roar.... of thunderous applause.

Step back for a moment folks and think about what these failures really mean to American business, and to you as an American.

They mean that the "bastions of capitalism" were in fact either knowingly committing felonies on a many-per-second basis for nearly 10 years, robbing you (collectively and in many cases individually) with each one, or were criminally stupid. It is simply not possible for a hairdresser making $8/hour to afford a $500,000 house, but many of them bought one in California.

How did they get the money?

They mean that the so-called "regulators" - The Fed, the OCC, the OTS, Congress, Treasury and the SEC, for starters, were either bribed, blackmailed ("got Client #9?") or were too blind to be able to see past the end of their noses. Banks and brokerages are regulated entities; they do not get to sell any product to any person they wish without government oversight.

Many of these banks, including but most certainly not limited to WaMu and Wachovia, were offering "nuclear-size debt bomb" mortgages as recently as May of this year, more than a year after we knew they were exploding!

The regulators were and are today either intentionally asleep or grossly incompetent.

If you are a thinking individual this instantaneously calls into question the safety and capability of the FDIC to pay your "up to $100,000" should the bank where your money is immolate itself, especially as the FDIC is now losing over 20% of the assets for each bank it takes over. The historical average, by the way, was in the single digits until this last year. What happens when the FDIC's money runs out? One single large bank and their entire fund is gone. And before you say "Congress will just give them more money" (of course they will) please understand that Congress doesn't actually have any money - the government gets its funds from you via taxes, so in effect you are stealing yet more of your own money in order to pay yourself back when your bank goes under! In other words, there is in fact no insurance since the party paying the check is, in fact, you once the FDIC fund runs out - and run out it will.

The FDIC has historically charged very low insurance premiums, essentially zero in the case of some banks, both because banks rarely fail and because recovery when they do has, historically, been quite high. Neither of these "old paradigms" is necessarily valid any more.

Not that the FDIC failing and having to be bailed out would be new. Does anyone remember the S&L crisis? The FSLIC blew up as a direct consequence of the same regulatory failures in the S&Ls, and when the "insurance fund" imploded Congress was forced to step up and inject huge sums of money into the system. In fact, S&L depositors didn't have FSLIC insurance "make them whole"; they had the government reach into their pocket, extract the money to "pay them", and then give it back to them.

The people roared with thunderous applause.

Now we're living the same nightmare a second time.

None of this should have happened, and we the people should make damn sure that (1) it doesn't happen again, and (2) the people who caused this mess bear "first loss" - loss of their job, loss of their boats, loss of their mansions, loss of their wealth and loss of their freedom - in that order.

We should not and must not bail out any more banks, lenders, or other institutions, and we must insist that the regulators intervene early and often, shutting down those institutions that pose "systemic risk" now if they can't (or won't) take down that "systemic risk."

Today, as you contemplate that CNBC is reporting that "everyone wants the same deal Jamie Dimon got - and they're not going to get it" in the context of "bailing out Lehman" (meaning that all the potential acquiring banks all want you the people to eat the losses - again!) you may wish to consider whether that beer and NFL is such a good idea - or whether a more appropriate response is the (figurative) tar and feather treatment that we the people have the right (and duty) to impose upon our elected and appointed officials via the ballot box.

Don't let freedom - and capitalism - die to thunderous applause.

lunar 13.09.2008 11:52

"God must love poor folks more because he made so many of them". :rolleyes

lunar 13.09.2008 21:00

looks like JP Morgan’s Tower got beat up in Houston

-> Posted by eeos @ 13:58 pm on September 13, 2008
they should put these images on their letterhead- it might more accurately state their current state of financial affairs.

lunar 14.09.2008 13:05

...wieder mal zu Erinnerung :supi neustes Kapitel 18 :schwitz

lunar 14.09.2008 17:12

Putting lipstick on a pig

-> Posted by floridagold @ 11:56 am on September 14, 2008
Wall Street suffered from the illusion that it could make beautiful bonds out of piles of dubious mortgages.

By Elizabeth Spiers, contributor

Last Updated: September 14, 2008: 6:04 AM EDT

If nothing else, we’ve learned recently that if you put lipstick on a pig, it’s still a pig. Presumably that has always been true - unless of course the pig in question was a subprime mortgage derivative, circa 2006. Then it was quite possibly a “runaway bargain,” a “great time to buy,” or an “opportunity in a market that’s only going to go up.”

Still a pig, you say? Well, how is it that no one noticed the legions of bankers, ratings agencies, and real estate professionals bearing lipstick?

(picture added by me)

Treasury Secretary Hank Paulson has engineered a rescue of Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500), but the markets are haunted by the specter of two more big institutions - Lehman Brothers (LEH, Fortune 500) and Washington Mutual (WM, Fortune 500) - on the brink.

The fate of Lehman may soon be decided though, with recent reports suggesting some sort of deal to rescue Lehman could be announced this weekend.

How did this all happen? One answer is that Wall Street, the ratings agencies, and regulators were blinded by the science of securitization - bundling ordinary debt like credit card balances, car loans, and mortgages into vast pools, then issuing bonds backed by those pools. It was a gigantic money machine for Wall Street, but it created a system that was unprecedented in its complexity and opacity.

You might have expected ratings agencies to see the problem, but instead they became part of it. Complex securities are often priced from models that assume, in what may be the apogee of wishful economic thinking, that the underlying assets will behave exactly as they have historically. That has always been a weakness of model-based valuation, but it’s particularly problematic when the securities are new and untested.

As for the Wall Street bankers who should have known better, they were mesmerized by the beauty of their creations. They forgot that those sophisticated securities were built from millions of mortgages that required someone to make payments every month. And in the real world, not the mathematical one, a lot of those loans were made to people who never had any plausible chance of repaying them. When the complexity of a security (lipstick, anyone?) has the effect of decoupling its value from that of the underlying asset, it can be very difficult to know what that security is truly worth. When no one knows what anything is worth anymore, it’s easy to inflate an asset bubble.

And when it’s easy to inflate an asset bubble, someone inevitably will, because all the players have incentives to do so. The way people are paid on Wall Street encourages them to pursue immediate returns at the expense of longer-term stability. Prudent managers might store capital in boom times to deal with the inevitable downturn. But given the ethos of returns-no-matter-what, available capital is capital that will be put to work. In the words of former Citigroup CEO Chuck Prince, “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” Well, nobody’s dancing anymore.

floridagold @ 11:56

-> Posted by Dusty @ 12:06 pm on September 14, 2008
Interesting write up there. I had to chuckle at the last line though. “Nobody is dancing anymore”….They are still dancing, just changed from a waltz to the two step trying to keep their feet out of the fire.

Best to you this Sunday morning,

lunar 14.09.2008 20:23

looks like we may need weekend markets

-> Posted by floridagold @ 15:16 pm on September 14, 2008
Wall Street Prepares for Potential Lehman Bankruptcy Filing
By Craig Torres

Sept. 14 (Bloomberg) — A group of banks and brokers began preparing for a potential Lehman Brothers Holdings Inc. bankruptcy filing today, addressing outstanding trades that the company has in over-the-counter derivatives markets.

Financial firms have started “netting” Lehman trades on credit, equity, interest-rate, foreign exchange, and commodity derivatives, according to a statement from the International Swaps and Derivatives Association e-mailed to Bloomberg News.

“ISDA confirms a netting trading session will take place between 2 p.m. and 4 p.m. New York time for over-the-counter derivatives,” the ISDA said. “Trades are contingent on a bankruptcy filing at or before 11:59 p.m. New York time, Sunday, Sept. 14, 2008. If there is no filing, the trades cease to exist.”

The announcement came after Barclays Plc, the U.K.’s third- biggest bank, said it abandoned talks to buy Lehman, contending it couldn’t obtain guarantees to protect against potential losses at the U.S. securities firm.

To contact the reporter on this story: Craig Torres in Washington at


Re: Here you go ! BANK RUN
Originally Posted by FishingwithJesse
Developing Story
Special U.S. trading session involving credit, equity, rates, forex and commodity derivatives and aimed at reducing risk related to Lehman bankruptcy opened between dealers and Lehman counterparties: ISDA 2:49pm EDT



They Opened a "SPECIAL" trading session for oil and now derivatives .. what wil they do next to try to manipulate this maket ???

And while i think of it..................

1- Why would Hank be so quick to do something with bear stearns and now is F***g around with Lehman ???

2- Hank why did you do something for freddy and Fannie last week end and up to date nothing for Lehman ???

3- Hank what could cause this... we know there's more than meets the eye...

Is it because Bear was long gold and short the $$ that helping a buy out was usefull for your own ( and goldman) interests ???

we would like to know

4- hank what will you do next week end for wachovia / aig / wamu.. ???

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