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lunar 02.10.2008 09:05

Chord: Bailout

October 1st, 2008 “Senator Chris Dodd said that the bailout plan would put the Constitution at risk, to which Bush said, ‘Oh, please, we haven’t used that old thing in years.’” –Jay Leno

lunar 02.10.2008 09:32

From the Boyz at Bespoke Investment Group: Historic Strength for the Dollar
Less than one year after supermodel Gisele Bündchen started only accepting payment in Euros, the US Dollar is soaring today as financial troubles spread across the globe. In addition to having its best day ever versus the Euro since that currency was introduced in 1999, the US Dollar index is also having its eighth best day since 1971.

The Bespoke boyz are hilarious. The photo shows some very young, fresh kids who obviously have not much a grip on history. All of the record 'float' days listed above are days I recall rather well! For these periods always preceded huge changes. Namely, the Bretton Woods II, the Plaza Accords, the Louvre Accords, etc. Every damn time, the dollar was strong, the trade deficit was growing and the US was clawing away at Germany and Japan, in particular, to weaken the dollar.

Since 1996, the US has given up on trying to control the yen and the German currency which is now the euro. We just surrendered and accepted gigantic trade deficits in return for 'cheap goods' thanks to Germany and Japan keeping the dollar as strong as possible.

In the last 3 years, the euro has been the world's strongest currency. This is causing huge pain in Europe and is the cause now of a huge push to weaken the euro so trade with the US can resume its mostly one-way characteristic which we see with Japan, for example.

lunar 02.10.2008 09:36

« Global Banking Collapse Fault Of Top IMF Nations | Main

Feeding Frenzy In DC

October 1, 2008

Elaine Meinel Supkis

Once it was decided that the bail bill would pass no matter what, it was treated like the military spending bills: Xmas in July, so to speak. Money is meaningless as everyone bids up the ante and the bottom line is totally disregarded. In the middle of this crisis, the dollar is growing stronger against all currencies which is very bad news in the long run. For this is ultimately all about the trade deficit and the giant sucking sound that is the noise of all our industries, jobs and other vital things being sucked out of this nation. We are NOT Japan in any way, shape or form. We are a doomed empire.

White Rabbit with Gracie Slick singing.....

BREAKING NEWS II: THE SENATE PASSED UNPOPULAR BILL. 74 to 25. Thanks a trillion, guys. Latest polls shows Congress has an approval rating of just 15%. Isn't this popular.

Breaking News: Senate Wants To Break The Magic Flying Piggy Bank:
President Bush on Wednesday urged passage. "It's very important for members to take this bill very seriously," he said. "It's important to get credit flowing again." The legislation would usher in one of the most far-reaching interventions in the economy since the Great Depression.

Advocates say the plan is crucial to government efforts to attack a credit crisis that threatens the economy and would free up banks to lend more. Opponents say it rewards bad decisions by Wall Street, puts taxpayers at risk and fails to address the real economic problems facing Americans.

Because of Senate add-ons, the bill's initial price tag will be higher than the $700 billion that the Treasury would use to buy troubled assets. But over time, supporters say, taxpayers are likely to make back much if not all of the money the Treasury uses because it will be investing in assets with underlying value.

Hey, why not make this bill $10 trillion? Hell! The Derivatives Beast will eat wealth to the tune of around $600 trillion. So why not create $600 trillion out of thin air? Then everything will be worth a million bucks including a loaf of bread.

Yes, this is pure Weimar Germany all over again. Seems people can't learn from the past. Too much trouble, I suppose. The sky will literally be the limit. The dear, demented Goddess of Inflation is laughing while the Goddess of Depression is taking her meds because she is very sad. Sigh. The Derivatives Beast was creating the perfect conditions for a depression. Now, it is all pure manic inflation. We will see the upper limits of numerology probed deeply here. We might even find the next highest prime number this way! Forget using mere computers to find one with that many digits.

SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO ESTABLISH RESERVE REQUIREMENTS. Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(2)(A)) is amended--
(1) in clause (i), by striking `the ratio of 3 per centum' and inserting `a ratio of not greater than 3 percent (and which may be zero)'; and

(2) in clause (ii), by striking `and not less than 8 per centum,' and inserting `(and which may be zero),'.

The amendments made by this title shall take effect October 1, 2011.

The Ron Paul site is a good place to get breaking news. Of course, the entire system is now determined to reach the El Dorado of infinite free credit. The wet dream of all dead beats is to have endless loans with no interest to pay and never pay off the principal. The US is pursuing this relentless program of super-low interest rates so our debts can continuously turn over with no rising penalties. With this, we can also 'grow' our economy via increasing our spending/debt levels to infinity. The 'consumer economy' depends on endless flows of easy credit.

I had trouble buying a used car for my son who is working, not even a student! Now, lending for buying cars has collapsed nearly totally. This is because the Derivatives Beast finally has appeared and is no longer invisible. It is rapidly eating up all credit and all reserves. Emergency dollars were hosed all over the banking system of the planet this week and it could not capitalize anything. This is because the magical Beast can eat infinite money. For the banking gnomes fed this creature.

It is a negative entity. So long as it is not released from the Cave, it will grow and grow but have no effect on the planetary monetary systems. But when key insurers such as AIG go bankrupt, this triggers all the credit default swaps that is the manifestation of the Derivatives Beast. So now, everyone wants it to go away and it is hungry. No longer content to be all negative numbers that don't exist, it desires above all things, to have positive numbers equal the negative numbers. This way, it is fulfilled and can then go back to sleep again.

Trying to get around this $600 trillion creature is impossible. But the US and others hope to evade it by doing away with even the most basic banking regulations and underpinnings. If everything is totally fake, then it doesn't matter if the Derivatives Beast, a concoction straight out of the twisted, greedy brains of the banking gnomes, won't matter, either. The Beast doesn't care for these niceties. Being a creature of the Outer Darkness, it is content to finish its conversion from invisible to visible, from black to white and from hungry to satiation.

lunar 02.10.2008 17:17

Americans on the Bailout: We're Pissed!

Posted Oct 02, 2008 10:59am

It's pretty obvious to anyone paying attention a majority of Americans oppose the bailout plan passed last night by the Senate and heading toward the House.

As discussed here and here, many Americans seem to understand the "real" economy -- i.e., Main Street -- will suffer if the plan fails, but they still oppose it and view it as a bailout for Wall Street "fat cats."

"I've lost my money because of these idiots, now they want me to subsidize their losses too???," Yahoo! Finance user "hoser48" wrote yesterday. "They can go to hell with the common man, we will all live together as equals then. A bailout is not the answer."

Clearly that sentiment isn't universal, and Monday's 778 Dow dive did change many people's view. But it's also true the mood in the country is ugly, and it didn't happen overnight.

Todd Harrison, CEO of, has been warning about the threat of "societal acrimony" for some time......

full story with video:!

lunar 02.10.2008 17:49

SEC extends short sale ban to give Congress time

Thu Oct 2, 2008 6:17am EDT
By Rachelle Younglai

WASHINGTON (Reuters) - U.S. securities regulators on Wednesday extended an emergency ban on short selling in more than 950 financial stocks to give Congress time to finish legislation to rescue the financial system. :rolleyes

The Securities and Exchange Commission said the ban would expire three business days after a $700 billion federal bailout bill was enacted, but would not last beyond October 17. (...ich glaube für gewöhnlich Sterbliche würde man das Erpressung nennen :bad:mad)

The SEC emergency rules are part of a series of government measures designed to restore confidence in battered markets and the ailing financial system, which has been rocked by bank failures and fears of economic recession....

full story:

lunar 02.10.2008 19:21

Paulson's Reasons for Delaying Day of Reckoning: Jonathan Weil :supi
Commentary by Jonathan Weil

Oct. 2 (Bloomberg) -- If you think this bailout is expensive, just wait until you see the next one.

The $700 billion rescue plan approved by the U.S. Senate won't fix the core problem with the nation's ailing financial institutions. And it almost guarantees that you and I will have to pony up for an even costlier bailout someday, maybe soon, if the House of Representatives passes it tomorrow.

Treasury Secretary Hank Paulson has correctly identified the quandary: Lots of shaky banks and insurance companies are showing strangely high values for assets that aren't worth squat in the market. Many need more capital and can't raise it. And he's right in saying the outlook is grim if we don't get this fixed.

What's stunning is how little the taxpayers would get in return for their money under Paulson's package, and how illusory much of the banks' newly minted capital would be.

Under the plan, Treasury would buy some companies' troubled assets at above-market values. To boost their capital, Paulson would have to pay the companies more than what their balance sheets say the assets are worth. Then other companies would use the rigged prices to write up, or avoid writing down, the values of similar holdings on their own books.

So, the taxpayers get hosed on the asset purchases. Other banks use the trumped-up prices to cook their books. And investor confidence supposedly is restored.

That brings us to this question: Why would a smart guy like Hank Paulson -- the former boss of Goldman Sachs -- advance such a dumb, shady plan? Let us count the reasons:

No. 1: It delays our national reckoning until after the presidential election.

Paulson first floated a bailout Sept. 18, at the very hour when shares of Goldman Sachs Group Inc. and Morgan Stanley looked like they might go into a death spiral. It's not so much a bailout, as it is a timeout. He had to follow up with something, anything, to stop the freefall from resuming. It didn't have to make sense.

So it doesn't. The plan is about creating the illusion of stronger financial institutions, not strengthening them.

The banks know this. Otherwise, they would have stopped charging each other near-record rates for three-month loans by now. The reason they haven't is because they're still afraid their customers -- other banks -- might go broke.

No. 2: The reckoning will be worse than you can imagine.

If Paulson were serious about recapitalizing rickety U.S. banks, he would infuse them with hundreds of billions of dollars of fresh government money, in exchange for ownership stakes. And if he wanted to create market liquidity for all those troubled assets on their books, he would be ordering banks to disclose everything there is to know about them, so Mr. Market could figure out their present value.

He can't let that happen. Not now. If everyone could see how much the toxic waste is worth, the writedowns would be so huge that many banks would have to be declared insolvent.

Better to let the next administration deal with the clean- up. The trouble is, the longer the government waits to address the banks' lack of capital, the worse it gets, barring a miracle.

No. 3: He's helping his friends.

Is there any doubt? Let's see.

As of yesterday, Morgan Stanley Chief Executive John Mack owned 2.75 million shares of his company's stock, valued at about $67 million. If Mack can get Morgan Stanley to trade reams of sketchy paper for billions of dollars of our Treasury's cash, without diluting any of his stake in the company, who benefits?

Paulson would have us believe it's you.

No. 4: There's an excellent chance the Congress will pass it. Leave someone else to figure out the costs another day.

(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Jonathan Weil in New York at

Last Updated: October 2, 2008 09:37 EDT

lunar 02.10.2008 20:23

Goldman is getting the best of the credit crisis

Commentary: Opponents have been vanquished and bad bets wiped away

By David Weidner, MarketWatch
Last update: 12:01 a.m. EDT Oct. 2, 2008

NEW YORK (MarketWatch) -- Not often do you regard a company whose stock is about 50% off its 52-week high as a success story.

But a success is exactly what Goldman Sachs Group Inc. ( >GS 130.15, -4.35, -3.2%) is shaping up to be at this stage of the credit crisis. If we were to begin the long journey back to stability today, Goldman would undoubtedly emerge even more powerful than before.
Did anyone expect another outcome?......

Only Goldman, by virtue of its investment from Warren Buffett and its ability to buy retail bank deposits, will be the last bulge-bracket investment bank unencumbered by commercial-bank ownership......

You don't have to be a conspiracy theorist to recognize that a series of decisions and events have transpired to put Goldman at the top of the heap. Well before the credit crisis, people worried about Goldman's influence in the markets. Several former executives of the investment bank have senior roles in government and at the New York Stock Exchange, and its analysts are among the most powerful in the space.

Let's limit the discussion to the start of the credit crisis in the summer of 2007. Just before the market turned, Goldman traders got a hunch and began shorting and hedging the mortgage securities that were eating away at rivals' revenue. Trading revenue soared 70% that quarter to $8.23 billion.
It was Goldman's last quarter in a series in which each new profit report exceeded expectations and prior results. Goldman's share price was in shouting distance of $300. It was also when grumblings about the investment bank's transparency became louder. That's important because Goldman continues to give few details about its "proprietary trading" business. What is it exactly? No one knows for sure.....

......As former Drexel Burnham Lambert CEO Fred Joseph said last week, investment banking is "not disappearing at all. [Banks] will act more like advisory firms and underwriters and lenders. They'll act a little bit more like banks, and less like hedge funds." That doesn't mean those enterprises won't disappear. And :bad Goldman :badwill be one of the few left open for business.

David Weidner covers Wall Street for MarketWatch.
full story:

....irgend einmal :rolleyes - hoff ich doch sehr :cool

lunar 02.10.2008 21:33

02 October 2008

The Short Term Imbalance in Dollar Assets and Liabilities in Foreign Banks

Dollar Assets and Liabilities in the International Banking System

We've spent the better part of the last few days (and nights) reading through the Assets and Liabilities of the Bank for International Settlements reporting banks. We concentrated on the relative dollar holdings today, in particular with an eye to the effect of the declines in dollar assets and liabilities in non-US banks.

This is a broader measure than the old Eurodollar, which as we understood it only included dollar deposits in US banks overseas. As you may recall, this is a component of M3 and was discontinued by the Fed in 2006.

When multinational company deposit their US dollar receipts in their banks, those dollar deposits can be held in dollars and not converted to the local currency. This is a key factor for one to keep in mind, especially for the many Americans who are largely unfamiliar with forex exchange except for tourism.

Overseas banks may tend to take those dollar deposits (liabilities) and place them into dollar assets such as CDO tranches which are maintained as dollar assets.

As the dollar assets decline, and the dollar strengthens from a flight to safety, the depositors may choose to withdraw their dollar from the bank. This places the bank in an awkward position since the corresponding assets have deteriorated in value, but the nominal value of the deposit liability remains the same with some interest accrual.

As a result, a demand for dollars can be generated in the foreign country that is artificial but very real in terms of day to day banking operations.

The central banks arrange swap operations, such as between the Fed and the ECB, to exchange Euros and Dollars for example to maintain the liquidity of their domestic operations.

If handled ineffeciently or under event duress this should have the effect of creating a short term currency imbalance, increasing the cost of euro-dollar swaps, and driving the 'price' of the dollar higher in the short term, and perhaps quite sharply if the event is of sufficient magnitude.

As the situation resolves, the 'fundamentals' should reassert and values revert to the means, but in the short term a significant amount of dislocation and distress could occur in the arbitrage and banking markets.

We believe that we are in such an occasion now, as the European banks had been slow to markdown their degraded US assets, and had relied on swaps writeen by companies such as AIG which have failed, leaving the banks literally 'dollar short.'

The resulting sharp rally in the US dollar is therefore likely to be an anomaly which will correct, and perhaps quite sharply, once the effect of the short term imbalances dissipate.

Posted by Jesse at 2:50 PM :verbeug

lunar 03.10.2008 09:18

Goldilox ( 02October2008; 17:36)
The FBI? “The FBI has investigations underway to prosecute some of these cases of mortgage fraud. But they are not reaching above the brokers’ level. The FBI is not gaining access—or at least they have not reported it publicly—to information about collusion at the political level or at the level of the banks which provided the leveraged funding for mortgage money…”

Ha ha! Excuse ME!

All the evidence they need starts with the Greenspan speech touting VAR rates and no-down mortgages as “safe” in any environment, or the Bush speech that told us how fantastic it was to see “home ownership” levels increase so rapidly during the “abundance” of his administration.

The FBI never chases the “real” crooks, because they work for them. What a laugh!!!

Have you ever heard of a diplomatic pouch carrier getting busted for arms or drug deals? Have you ever heard of a government operative getting busted for political assassinations? Of course not. Nor will the SEC or FBI EVER go after the real perps in shady finance deals. They will be content to get some positive media spin from rounding up a few over-achievers and labeling them the “problem.” Then the sheeple will line up and bend over one more time. BOHICA!


lunar 03.10.2008 09:20

Greece joins bailout stampede as Germany vows no blank cheques

The Greek government has issued a blanket guarantee of all bank deposits after panic withdrawals by customers in Athens and Thessaloniki, creating an unstoppable stampede across Europe for an EU-wide bail of the financial system.

By Ambrose Evans-Pritchard
Last Updated: 7:50AM BST 03 Oct 2008

Greek officials said the state would cover "all bank deposits, whatever the amount." The move follows the dramatic decision by Ireland this week to guarantee the deposits and debts of its six biggest lenders in the most sweeping bank bail-out since the credit crisis began........

lunar 03.10.2008 09:25 Vorsicht zu geniessen :rolleyes aber ich finde für einen späteren Rückblick wictig :o

Breakdown Approaches Climax

Jim Willie CB
Jim Willie CB is the editor of the "
Hat Trick Letter"
Oct 2, 2008

Use this link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

Pardon the brief and jumpy style, laced with more emotion than usual. The events of the last few days have been remarkable, alarming, chaotic, and surreal. Gonna attend the Toronto gold show hosted by the Cambridge House this weekend. If you are there, grab my arm and say hello. Let me know your perspective on the brewing crisis.


The banking system breakdown is very far along, but still early. Remember USFed Chairman Bernanke stated over a year ago that the mortgage problem was contained. Try not to laugh. The bond crisis is absolute, broad, deep, and all-inclusive, enough to kill the USTreasurys after it kills the US banking system. The heart attack signals are with the LIBOR spreads over USTreasurys, the money market, the TED spread (Treasury versus EuroDollar), and short-term USTreasurys. Charts resemble heart attacks and EKG electro-cardiogram monitors. Many details appear in the October Hat Trick Letter report just posted. The bank runs have begun in earnest. Nevermind the big banks for a moment. The smaller ones are entering seizures. The small and medium sized cities are also entering seizures. Here are two stories, one about a city and another about the bank holiday coming.

This from a friend in Seattle: "I was talking to my neighbor last night. He is in finance in the county government, King County (Seattle). He said there are some very secretive budget talks being held, very hush, hush. Apparently, the county has lost around $200 million of taxpayer money in toxic paper investments, with huge implications on the budget. He says he is not privy to the details, but he is taking a 10-day vacation starting today, because he has nothing to do since everything is in flux."

This from a friend in Atlanta with strong banking connections: "Reliable word that Bank of America branch managers just received a letter or memo from the USFed instructing them to perhaps be ready for a one-week universal shut-down of the banking system, including access to checking accounts, savings accounts and credit cards. Reliable word has it that BofA bank branches received a shipment of signs last week, reading "WE'RE SORRY, BUT DUE TO CIRCUMSTANCES BEYOND OUR CONTROL, WE CANNOT BE OPEN AT THIS TIME."

So the banks are in need of a respite, a break, a holiday. They need to shore up their positions. Economists and bankers avoid revealing the consequences of extended absence of short-term credit supply. Imagine all the supply chain DELIVERY routes being interrupted for lack of short-term credit, certain to interrupt the supply of food, gasoline, building materials, basic household wares, simple hardware, and more. The short-term credit would certainly also disrupt payroll streams for companies, inventory supply for retail chains, durable goods purchases by consumers (like washing machines & refrigerators), the maintenance of basic machinery (like cars, trucks, computer, communications), even cash dispensed at ATMachines.


The Senate passed the Wall Street bailout bill, by a 3:1 majority. Some sweeteners like tax cuts and raising the limit to $250k on individual accounts for bank depositors helped. Some people might think that finally the banking system can at last receive some meaningful fixes. Call me a killjoy, but this will accomplish next to nothing as a banking system remedy. It is more a paper seal to Wall Street corruption than to ANY solution. If passed by the House, as is likely, it puts an epitaph on the American badge of legitimacy. A decade of fraud has been underwritten, sanctioned, and sealed. Even foreigners might smile at the new & improved bill. Their impaired bonds can participate in the redemption process. The only trouble is they might have to accept hot shiny USTreasury Bonds in return, of certain questionable value.

Still the bill must be viewed as a giant paper net to catch a giant locomotive train, one that derailed and then went over the mountainside cliff 500 meters above and is hurtling downward with acceleration. Gravity is a bitch, and so is momentum! One should not doubt for a second that it will do much to halt the downward trajectory. One should remember that debt solutions accomplish nothing in providing remedy for debt abuse and damage inflicted by broken debt contraptions. Nothing is fixed, only accounts have been shifted and names have been changed. THE BANKING SYSTEM PROCEEDS ALONG ITS OWN CLEARLY DEFINED PATHOGENESIS, with great momentum and power, which no human devices can interrupt. The next shock will be why the bill has not fixed the banking system as Mini-Fuhrer Paulson claimed it would. The other next shock is why Wall Street will need another $700 billion within a year. The other other next shock is how much the AIG and Fannie Mae "INVESTMENTS" a la nationalization will each cost the USGovt conglomerate an unexpected extra $trillion. The bailout yesterday enables Wall Street executives to retire more comfortably, even as some seek asylum or face exile.

The irony of the lifted depositor insurance is that big financial conglomerates can now raid the private accounts worth over $100k now, with government coverage in the bankruptcy courts. The October Hat Trick Letter contains some multi-sided evidence of USFed open license to use subsidiary accounts toward the aid of liquidity strains. What constantly leaves me shaking my head is how intelligent people continue to attribute fair spirited motives to the system, when it resembles a crime syndicate more each year. The reason why it resembles one is that it IS a crime syndicate operating under the USGovt roof. There are three crime syndicates operating under the USGovt roof, the others identified in the report this month. Each has had a profound financial effect on the nation, as in killing its host.

One can make a fine balanced and credible argument that the Fannie Mae bailout package represented an aggregate parallel of the simple Trenton New Jersey home loan fraud. The parallels are argued, with conclusion being the USGovt bailout was tantamount to abandonment by the mafia gangsters, who walked away from the $250k loan on the $50 crack house dilapidated property. Parallels are disturbing, as Wall Street and USGovt players fill out the example carried to the aggregate. The other Fannie Mae fraud is the simple bond certificate counterfeit, just plain paper printing without bother of Wall Street involvement. That fraud helped to run up the total Fannie Mae fraud past the $1 trillion mark. Given the sleazy guys who ran Fannie Mae, and all the protection run for it by politicians averse to reform, the fraud was quite easy. Who would want to question a shiny Fannie bond, a device which powered the great housing boom?


A new role seems to have come to the Federal Deposit Insurance Corp. They are the newest brokers on Wall Street, the new investment bankers, raiders true to the name. They do not protect depositors any more than Christopher Cox at the SEC protects stock investors. The FDIC has minimal funds, most likely co-mingled with the USTreasury anyway, just like the Social Security Trust Fund. The measly $45 billion lying around in the FDIC fund would not cover more than one or two decent sized banks, or one Washington Mutual or one Wachovia. So what does Sheila Bair do in response? She defends Wall Street, avoids liquidation by dead banks, and steers them to the JPMorgan chop shop and slaughterhouse. A great arbitrage results, as JPMorgan obtains bond assets for nothing, and can sell them to a stupid captive customer, us taxpayers.

In doing so, several things happen:
1) JPMorgan obtains the entire corporate asset kit & kaboodle for next to nothing

2) deposits are used to help the JPM asset ratios

3) bond assets can be sold to the USGovt bailout fund

4) senior bond holders for the dead banks are screwed, receiving a pittance

5) dangerous credit derivatives are placed in the JPM Garbage Can

6) the Wall Street Consolidation Plan continues.

The Big 3 Banks are JPMorgan, Citigroup, and Bank of America. Just how on earth can Citigroup even consider acquiring Wachovia? Buy it with what? Citigroup is insolvent. That does not stop the Wall Street firms from spreading their cancer. Besides, King Cox has a plan, to remove 'Mark to Market' asset accounting rules. Poof! The US banks are solvent again. Only trouble is they become Walking Zombies. Couple this desperate policy change with short stock restrictions, and the Third World Finances label fits even better, from lack of credibility. The new Wall Street I-Bank is on the scene. The modern FDIC might make Michael Milken proud, the junk bond king from Drexel Burnham. By the way, he only served two of his ten years in prison. Wall Street does have its privilege. The Wall Street investment bank model is dead & buried, with the door slamming shut by Goldman Sachs changing its coat to read bank holding company....

full story:

lunar 03.10.2008 11:56

...guter Artikel über Leerverkäufe - mich stört nur, dass die armen Schutzsuchenden selber grosse Leerverkäufer waren und das nie erwähnt wird - GS hat sich ja dumm und dämlich verdient damit :mad während sie gleichzeitig die entsprechenden Produkte ihr Kunden verkloppten (ich weiss, ich wiederhole mich - aber warum die nie richtig auch mal eins auf die Fre**e bekommen :gomad:gomad:gomad)

3. Oktober 2008, Neue Zürcher Zeitung

Neue Regeln beeinträchtigen die Preisfindung am Finanzmarkt

Mit dem Leerverkaufsverbot für Finanzaktien hat US-Finanzminister Henry Paulson der Branche unter die Arme gegriffen. Doch der Markteingriff bringt hohe Kosten mit sich.

dek. New York, 2. Oktober

Ende Juli hatte die US-Investmentbank Morgan Stanley stolz bekanntgegeben, dass sie rund 1 Mrd. $ für neue Manager ausgeben will. Bereiche wie der Eigenhandel und das Prime Brokerage sollten besser besetzt werden. Mitte September sah die Welt dann anders aus: CEO John Mack hielt vor seinen Angestellten eine Rede, in der er unter anderem Leerverkäufer für den Fall der Aktien von Morgan Stanley verantwortlich machte. Leerverkäufer hätten vom Kurszerfall profitiert und seien der Hauptgrund für die tiefe Notierung der Aktien. Am nächsten Tag kam dann das Leerverkaufsverbot für Finanzwerte......

......Um die Wirkung der Leerverkaufsregel besser zu verstehen, lohnt sich ein Blick in das Getriebe der Finanzmärkte. Mit dem Leerverkauf von Aktien kann ein Anleger vom Kurszerfall der Titel profitieren. Grundsätzlich kann man Aktien nur dann leer verkaufen, wenn man sie zuvor ausgeliehen hat. Diese Praxis nennt sich gedecktes Short Selling und ist anders als das nackte Short Selling, bei dem man Aktien leer verkauft, ohne sie zuerst ausgeliehen zu haben. Der Nutzen der Leerverkäufer liegt in der zusätzlichen Liquidität für interessierte Käufer. An der Wall Street werden die Leerverkäufer auch als «Schattenregulatoren» bezeichnet, weil sie Fehlentwicklungen tendenziell erkennen und korrigieren. Leerverkäufer sind in der Regel nur dann an Aktien interessiert, wenn sie der Überzeugung sind, sie seien überbewertet.......

......Doch die Kernfrage hier ist, ob die betreffenden Hedge-Funds die Ursache des Malaises sind oder bloss eine längst überfällige Rekapitalisierung vieler Banken fordern. Die Diskussion über das Leerverkaufsverbot hat seit der Politisierung durch Lobbygruppen in Washington sehr an Substanz verloren. Klar ist aber, dass die Börsen ohne Leerverkauf nur noch ein Schatten ihrer selbst sind und daher dieser Tage nicht gut funktionieren.....

ganzer Artikel:

lunar 03.10.2008 12:13

.....Big Brother kontrolliert ja auch die Medien, darum braucht man sich nicht zu wundern :rolleyes

Media haven't deigned to cover bailout dissent

By Daniel J. Parks October 3, 2008

In my 18 years as a journalist—nine of them in Washington—I've rarely seen my profession behaving as badly on a hard news story as it has during coverage of the financial bailout bill.

The level of condescension has been breathtaking.

Particularly on network and cable television, journalists and supposed financial experts have been wagging their fingers at the voting public for pressuring Congress to vote against the bill. To hear them tell it, you would think there was universal agreement—at least among smart people—that something needs to be done now.

But this isn't a divide between smart and dumb people; it's a divide between Wall Street and its allies in Washington, and the rest of the country.

And no, it's not the same thing.......

.....Sen. Richard Shelby of Alabama has been among the leading critics of the bailout plan. He has gotten little media coverage, except to be dismissed as something of an amusing sideshow. But Shelby is the top Republican on the Senate Banking Committee, and as Monday's vote in the House demonstrated, his skepticism of the bailout plan is much more widespread than the relatively scant media coverage of such a key figure would suggest......

.....The Washington Post's Steven Pearlstein, whose expertise and analysis I respect on most issues, joined the "They just don't get it" bandwagon with a column in Wednesday's edition titled, "They just don't get it." Pearlstein showed remarkable arrogance in declaring "too many people don't understand the seriousness of the situation."

The fact is, most people do understand. They just aren't convinced that this particular approach—or any government approach—is the best answer. And there are plenty of smart, highly educated people on their side. Just because you won't find many of them on Wall Street, or in Washington, doesn't mean they don't exist or their analysis is any less sound.....

full story:,3142589.story

lunar 03.10.2008 12:33

03 October 2008

Waves of Credit Default Swaps Incoming

Have you wondered why the Treasury asked for a $700 Bn emergency package with the full force of the Fed behind them, and gave the Congress less than a week to deliver it?

Either these fellows have lost their nerve or the markets are riding to a fall, and it could be terrific.

We've been looking for some event, something that would have created such an extraordinary set of actions as we have seen in the past few days.

This just might be it. Special thanks to Yves Smith for flagging it.

Time to start settling those Credit Default Swaps for Fannie and Freddie (Oct. 6), Lehman Brothers (Oct. 10) and Lehman Brothers (Oct 23).

LIBOR is eight standard deviations from the norm, because the banks don't know who is holding what in their cards, but there might be some Aces and Eights in there. The TED spread is at an all time record high.

An insurance company is said to be heavily exposed.

Do you need to buy a vowel? Let's hope we get lucky.

Brace for impact.

The Financial Times
Settlement day approaches for derivatives
By Aline van Duyn in New York
October 1 2008 03:00

The $54,000bn credit derivatives market faces its biggest test this month as billions of dollars worth of contracts on now-defaulted derivatives on Fannie Mae, Freddie Mac, Lehman Brothers and Washington Mutual are settled.

Because of the opacity of this market, it is still not clear how many contracts have to be settled and whether payouts on the defaulted contracts, which could reach billions of dollars, are concentrated with any particular institutions.

According to dealers, insurance companies and investors such as sovereign wealth funds, which are widely believed to have written large amounts of credit protection through credit default swaps on financial institutions, could have to pay out huge amounts.

"There is a lot at stake," said an executive at one big dealer. "This is a crisis time, and if these auctions do not go well, or if the amounts investors and dealers have to pay is seen as not being fair, it could have further negative repercussions on the CDS market."

The "auction season" starts tomorrow, when the International Swaps and Derivatives Association has scheduled an auction for Tembec, a Canadian forest products company. This is followed by Fannie Mae and Freddie Mac auctions on October 6. Then, Lehman is settled on October 10, and Washington Mutual is scheduled for October 23.

Even though it is possible that some participants in the credit derivatives market will have to make large payouts, the flipside is there could also be big winners. For every loss in credit derivatives, there is a gain.

The amount of contracts outstanding that reference Fannie Mae and Freddie Mac alone is estimated to be up to $500bn. The default was triggered under the terms of derivatives contracts by the US government's seizure of the mortgage groups, even though the underlying debt is strong after the explicit government guarantee.

The CDS contract settlement could result in billions of dollars of losses for insurance companies and banks that offered credit insurance in recent months. The recovery value will be set by auction. Usually, the bond that is eligible for the auction that trades at the lowest price - the so-called cheapest-to-deliver - is the one that sets the overall recovery value for the credit derivatives.

In the Lehman case, numerous banks and investors have already made losses due to exposure to Lehman as a counterparty on numerous derivatives trades. The auctions next week are for credit derivatives which have Lehman as a reference entity. There are likely to be fewer contracts outstanding than for Fannie Mae and Freddie Mac because Lehman was not included in many of the benchmark credit derivatives. However, exposure remains unclear, which is one concern that regulators now have about the credit derivatives market.

Lehman's bonds have been trading between 15 and 19 cents on the dollar, meaning investors who wrote protection on a Lehman default will have to pay out between 81 and 85 cents on the dollar, a relatively high pay-out.

The previous biggest default in credit derivatives was for Delphi, the US car parts maker that went bankrupt in 2005 and which had about $25bn of CDS.

Posted by Jesse at 1:11 AM :verbeug


lunar 03.10.2008 20:08

03 October 2008

Gangs of New York
Edmund Burke "Among a people generally corrupt liberty cannot long exist."
Hedge funds acting in a predatory manner towards other funds is like a dog bites man story.

However there are a few new things in this story worth pointing out.

According to this report Goldman Sachs is disclosing the most largely held positions of some hedge funds and distributing the list to others with the objective of fomenting a group effort in shorting them, artificially driving down the price, creating more forced redemptions and losses for the fund investors.

Can you imagine if some other company was doing that? With the financial stocks?

Think the elimination of the uptick rule and the widespread toleration of naked shorting is an accident?

The second point of interest is the targeting of specific sectors such as emerging markets, mining, and energy stocks.

What this will accomplish, beside the obvious short term racketeering, is to exaggerate the downward move in some prior favorites, setting up some potentially lucrative short covering rallies when the stocks reach ridiculous valuations on the forced selling and targeted shorting, after the trading banks cover their shorts and buy in for pennies on the dollar.

And don't think for a minute that :bad Goldman :bad and their ilk does not have a 'most shorted' list that it is circulating around to its own select group of traders to target those buys.

We still wonder if some of the Wall Street banks are using their privileged information to short squeeze the European banks who they loaded up with fraudulent debt and are now in dire need of short term dollar liquidity. This is a classic rip-their-face-off after you kick them maneuver.

Its like setting a fire in a crowded theatre after having charged high admission prices for a musical production that did not exist, and then having thugs at all the exits to charge even stiffer fees to leave the building.

And watch to see who benefits the most from this bailout plan and what they do with your money.

The Financial Times
Hedge funds prey on rivals
By Henny Sender in New York
October 2 2008 23:34

Hedge funds are embracing trading strategies designed to profit from the unwinding of large positions by their competitors, market participants say.

The increasingly cannibalistic activity stems from the wave of redemptions hitting hedge funds.

Because so many firms hold similar positions, forced selling by one in response to redemptions can have ripple effects, forcing other funds to sell.

More nimble hedge funds have sought to profit from the dynamic by taking short positions in securities known to be widely held by rivals. Goldman Sachs publishes a list of 50 “very important” hedge fund positions.

In its Wednesday update Goldman said: “Forced selling to cover redemptions and deleveraging . . . has put downward pressure on selected stocks.”

A favourite strategy of hedge fund managers during the bull market – mimicking the positions of others – has been turned on its head, Goldman said. “Buying the most concentrated stocks . . . has been a poor strategy during the current bear market.”

The announcement last month that Ospraie Management was winding down its flagship fund encouraged predatory activity.

One Hong Kong-based manager sent a note urging friends to short emerging and mining shares favoured by Ospraie.

Some hedge fund managers say they have been monitoring the positions held by Ospraie, if only to be ready if other funds with the same positions are forced to liquidate their holdings.

“I certainly wouldn’t want to be long any of these companies,” said one. “I want to lock up six-month borrowing on these shares and short them.”

Ospraie’s founder, Dwight Anderson, told investors on September 4 that 60 per cent of its losses in July and August stemmed from equities, mainly in energy and mining.

Its largest position was in Xto Energy, which had dropped from $73.74 in June to just under $43 and was among the 20 most widely held stocks by hedge funds, according to Goldman, Mr Anderson said.

Firms are also monitoring Deutsche Bourse because of a big position in its shares held by Atticus, which has told investors in its main hedge fund it is down 25 per cent so far this year.

Greenlight Capital, the hedge fund run by David Einhorn, told investors in a letter on Wednesday it was down 17 per cent so far this year, in part because “investors have been unwinding trades that they otherwise believe make sense”.

Greenlight said it would “try to be opportunistic” in response.

Posted by Jesse at 12:29 PM :verbeug

:gomad ich kapier nicht, dass es keinen Aufstand gibt gegen diese GS :bad

lunar 03.10.2008 21:13

DemReadingDU (1000+ posts) Fri Oct-03-08 01:06 PM
Response to Reply #64 69. video - Brad Sherman


lunar 03.10.2008 21:27

Maybe This Will Buy Us A Month

Posted by nin_man under bailout

Blah blah blah, House passed bailout bill overwhelmingly, blah blah blah, greater fail imminent, etc., etc., everything sucks. Christ, I need alcohol and something sharp.

Hey, wait! Rum and wooden arrows should be cheaper now! Hooray!

lunar 03.10.2008 21:30


Bush unterzeichnet US- Rettungspaket für die Finanzbranche

Kaum hat das US-Repräsentantenhaus das 700-Milliarden-Dollar-Rettungspaket beschlossen, ist das Gesetz schon in Kraft: Präsident George W. Bush hat das Gesetz unterzeichnet. Das teilte das Weiße Haus am Freitag mit. mehr... [ Forum ]

.....komisches Grinsen :rolleyes

lunar 03.10.2008 21:58

2 Anhang/Anhänge
happy bailout :o

lunar 03.10.2008 22:36

....wieder einmal eine kleine Aufmunterung in diesen schweren Zeiten ;)

lunar 04.10.2008 11:52

Friday, October 3. 2008

Posted by Karl Denninger at 16:42

Thanks Jackoffs

Bailout's cost to you "by the numbers":

Bailout Bill$700 billion
Additional Pork$150 billion
Dow (-484) in 3 hours$600 billion
Total carnage to you, The Taxpayer
$1.45 trillion

You know what to do in November, right?
Print it out, pass it around, email it to your friends. Congress "acts" and your 401k takes a cave-dive - without scuba tanks.

lunar 04.10.2008 12:14

a view from downunder…

-> Posted by POPnoBOP @ 1:51 am on October 4, 2008

America's century: is the sun setting on an epoch?

Peter Hartcher
October 4, 2008

In the same week that the US Treasury Secretary sank to one knee to implore a congressional leader to vote for the $US700 billion ($890 billion) package to save the American economy, Colonel Zhai Zhigang became the first Chinese astronaut to walk in space. It was a striking juxtaposition of American vulnerability with Chinese success, of US crisis with Middle Kingdom might. It was heavy with the symbolism of an empire in decline in contrast with one on the rise.

Eavesdrop on the two scenes for a moment.

In Washington, George Bush and his top economic officer had spent hours in the White House persuading and cajoling the congressional leaders of both American political parties to endorse his rescue plan. With the burning smell of some of the biggest financial institutions in the world still fresh in their nostrils as their ruins smouldered in New York, Bush grew increasingly frustrated.......

full story:

lunar 04.10.2008 12:23

Chuck Butler's

Daily Pfennig

* A euro revelation!
* House to vote on Bailout...
* Yen remains strong...
* Jobs Jamboree Friday!

And Now... Today's Pfennig!

Wooden Arrows?

Good day... And a Happy Friday to one and all! A Fantastic Friday, I hope! As the blind man said, as he spit into the wind... It's all coming back to me now... And so it was yesterday morning after I had hit the send button for the Pfennig, a trader friend called to give me some insight, and... After talking to him, it all came back to me now...

What the heck is he talking about now? I hear you asking... Well, recall how I and probably all of you too, have been scratching my head and wondering just how in the world the dollar could be rallying in the face of all that's going on, and the bad data to boot. Well, here it is folks, sit back and take a sip of coffee...

One of the things we've learned this week is that the European banks are not getting to go Ollie, Ollie Oxen Free, on the holding of toxic waste debt... And since they are U.S. issued mortgage bonds, the trader that called tells me that they need to have capital reserved in U.S. dollars. Well, usually, these banks use LIBOR for this funding... But with the credit crunch going on all over, LIBOR rates have gone through the roof. So... Looking for alternative means of raising capital, the European banks have turned to the euro / dollar swap market... Selling their euro reserves and buying dollars.

SLAP! I could have had a V-8! Now why didn't I think of that? Anyway... This is what's going on... One would logically think that when LIBOR gets back to normal, these euro / dollar swaps would be reversed. Now... The next question is... What will it take to get the LIBOR rates to normalize? Well, that would be an unlocking of the credit crunch. And according to our Fed Chairman, U.S. Treasury Sec. and President, the way to unlock the credit crunch is to pass the Bailout Package! Dang it! I knew it would all get back to that darn Bailout Package!

Speaking of which, the House is expected to vote on it today... Yesterday, I told you about some of the "inducements" the Senators added to the Package, and a friend of mine sent me a note and said, "Hey Chuck, you missed the wooden arrows in the Package"... What? Wooden Arrows? So... I looked into it... And there it was! And wooden arrows isn't all! But this is the thing that really gets me hot under the collar... My friend, Bill Bonner, of the Daily Reckoning ( put it brilliantly, so I'll let him describe it...

"Of course, a spending Bill cannot originate in the Senate because as we know, Article 1, Section Seven of that useless piece of paper (the
Constitution) says: ‘All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.’

“So the Senate lobotomized a Bill already passed by the House, which included, among other ridiculous spending provisions, Section 503 (EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN."

OK... A dear reader sent me a note yesterday, and told me in so many words to stop my complaining, as this Bailout Package is the end-all for what ails the U.S. economy and the world for that matter... OK, I guess I should just get down off my soapbox and give up my right to challenge views that don't go along with the "Washington crowd" or the "mass media", right? NOT! That dog is NOT going to hunt!

So... I've written for over 1/2 hour now, and I'm just now getting around to the currencies... Well, that's not true, Chuck, you told everyone what was going on with euro weakness! Yes, but you know what I mean... I truly get dear readers who get angry with me for not talking about the currencies at the top of the page, leave out the salutations, leave out the sponsor's ad, leave it all out, and get to the meat! They are like the Wendy's ladies of the 80's... "Where's the beef?"

The currencies are once again being held hostage by a stronger dollar... However, they haven't gotten any worse overnight. It sure looks as though they just might have bottomed... But, the euro catch a cold right now, much less a bid, so, we'll have to see what shakes out of the House vote on the Bailout Package today.

IT IS A JOBS JAMBOREE Friday today! Usually, the Jobs Jamboree gets top billing in the Pfennig... But not today. That's because the markets are not paying attention to data these days... I wonder if they'll sit up and take notice today, when Job losses go over 100K for September. Yes, that's the forecast for Sept. jobs... A Big Fat Negative -100K! Take away the "magic" by the Bureau of Labor Statistics (BLS) and this could potentially look even worse!

Yesterday... August Factory Orders were a dismal -4%, which was worse than the forecast of -3%. Initial Jobless Claims hit 497K! OUCH! Jobs are being lost all over, folks... When will the Fed open their eyes and see what's going on? And I don't want to hear the Bailout Package flag wavers yapping about how the credit crunch is causing these job losses! HOGWASH! The U.S. has been posting job losses for 8 months now, and this one would make 9 months!

Japanese yen continues to hang on to the 105 handle, while the currencies all around them look sickly... It sure looks as though all those Japanese housewives that were highlighted a couple of years ago as shrewd investors when they sold their yen and bought Aussie and kiwi dollars and booked the interest income, along with the currency gains, are repatriating their yen... That's not a good sign for Aussie and kiwi dollars, but it's a great sign for yen!

There's going to be a European Union (EU) Summit this weekend... Many years ago (16-years to be exact) I began writing the Pfennig, and at that time, I would talk about the different European countries, as there was no EU... I coined the phrase, Club Med, when talking about Italy and Spain, and even France... And now 16 years later, I come back to that phrase... Club Med is banging the drum for assistance from the EU, and Germany is balking. Just like the old days... You could always count on Germany and their staunch, well respected, Central Bank, the Bundesbank, to be sticks in the mud... But the Bundesbank, led by Hans Tietmeyer, always won... And Club Med was sent home with their tails between their legs... I wonder how this weekend's summit will turn out?

There was a story in the U.K. Telegraph yesterday, claiming that the EU might break up if Club Med can't get what they want... Which is namely, lower interest rates, and some help with their toxic waste bonds. Look... The EU has faced tougher problems than what they currently face, and they didn't break up... I found the Telegraph article to be nothing more than trying to stir up more "fear"... Sort of like the "fear" that's being used to shove the Bailout Package through...

So... Before I go to the Big Finish... Earlier this morning, I talked about LIBOR, and I thought... I bet some people aren't familiar with this term, so, I thought I would give you some info on LIBOR... If you already know what LIBOR is all about, go ahead and skip to the Currency Round-up...

LIBOR, the London Interbank Offered Rate, is the most active interest rate market in the world. It is determined by rates that banks participating in the London money market offer each other for short-term deposits. LIBOR is used in determining the price of many other financial derivatives, including interest rate futures, swaps and Eurodollars. Due to London's importance as a global financial center, LIBOR applies not only to the Pound Sterling, but also to major currencies such as the US Dollar, Swiss Franc, Japanese Yen and Canadian Dollar.

Currencies today 10/3/08: A$ .78, kiwi .6636, C$ .9285, euro 1.3865, sterling 1.7675, Swiss .8835, ISK 112.75, rand 8.4940, krone 5.9850, SEK 7, forint 177.25, zloty 2.4730, koruna 17.91, yen 105.10, baht 34.18, sing 1.4490, HKD 7.77, INR 47.05, China 6.8470, pesos 11.18, BRL 2.02, dollar index 80.22, Oil $94.80, Silver $11.17, and Gold... $840.17

That's it for today... A Big football weekend for our teams at the Butler House... My little buddy, Alex, and his 7th grade Lindbergh Flyers football team plays their big rival tomorrow morning, and our beloved Missouri Tigers take on Big Bad Nebraska tomorrow night in Lincoln, where the Tigers haven't won since 1978. Time to put an end to that awful streak! The game is on ESPN at 8 CT if you want to watch! Hey... Did you hear that Mr. Clean, has died? He lived to be 92! That dude had some pipes! Guns! The big VP debate last night, was boring to me, so I turned it off and went to bed... Dodgers, Phillies and Rays were winners in baseball's playoffs yesterday... Time to go... I hope you have a Fantastic Friday! Go Tigers!

Chuck Butler
EverBank World Markets


lunar 04.10.2008 12:56

ct 2008 Treasury Expected To Be Like Kid In CDO Candy Store

Posted by alyx under bailout
No Comments

(underlying image w/ appreciation to Brad Walker)

Paulson - he’s rip-roaring to buy stuff, according to WSJ. Also, despite the fact that $700BN is around the market cap of a Fortune 100 company, apparently, they are only retaining about two dozen bankers/lawyers/accountants/monkeys with typewriters and-or abacuses (abaci?)/etc to begin the complex work of deciding how to (over)value something no one wants to buy, then deciding at a reverse auction what to pick up and for how much, how long to hold it and when and for how much to re-sell.

What is a reverse auction, you ask? I’ll try an analogy. Let’s say that, because nowadays credit is nonexistent and you might have to pay cash for your next vehicle, you take out an ad and say you’d like to spend five grand on transportation. Some guy might show up and offer you seven Yugos, someone might offer you a Volkswagen bus, maybe some other guy would offer you an old Honda Civic.

If you were the US Government, you’d take the seven Yugos, make sure the property tax was paid on the Yugos and that anyone living in them was taking reasonable care of them, then you’d plan to sell them later when the Yugo market was more liquid.

BTW, I hear that a used Yugo also makes a great woodburning stove.

lunar 04.10.2008 17:44

Bankers worried over US move on bank assets

Mumbai, October 03, 2008

Last Updated: 22:13 IST(3/10/2008)

Bankers in India are worried over the proposal by the US to suspend rules that require banks to value assets at market rates. Bankers feel that this could push the global financial system into a deeper credit freeze and as a semblance of stability brought about by the measure would only be an illusion. Any proposal that allows banks the freedom to not disclose the true and correct picture of their financial condition could further dent the already shaken confidence of the global financial system, bankers said.

The proposal is one of the inducements included in the $700 billion rescue package. It reiterates the authority of the regulators to suspend the asset valuation regulation.

Arun Kaul, head of treasury, Punjab National Bank, the country’s third largest bank, said the financial markets worldwide will not get the true and correct financial status of banks in the US if these financial services providers are not required to value their assets at the prevailing market price......

.......“It is a retrograde step. The US is going back to olden times at a time when accounting has progressed in modern times. The market must know the true and correct state of financial health of banks,” Kaul said.....

...frommer Wunsch :rolleyes:o:rolleyes

lunar 04.10.2008 18:02

$700 billion is nothing

lunar 04.10.2008 18:56

1 Anhang/Anhänge
mcollier (739 posts) Fri Oct-03-08 04:32 PM
Response to Original message 78. ATTN: Trouble Trouble and More Trouble Must See: Derivative Holding by Top Banks...

Page 22

Better watch the banks on the list.... They are in serious trouble...

Next there will be a plan B Bailout2.0

Mark My Words....

lunar 04.10.2008 21:01

Iceland: When Too Big to Fail Becomes Too Big to Rescue

by: Felix Salmon posted on: October 04, 2008 | about stocks: MCO

We know that credit ratings agencies made enormous errors over the past few years when it came to rating structured products. And of course it's never easy to rate leveraged institutions, like banks, which are susceptible to runs. But what about the more conventional credits, like sovereigns?

Last year, Moody's briefly gave all of Iceland's major banks, including Glitnir, a triple-A rating, on the grounds that if they ever got into trouble, the Icelandic government would bail them out. After much ridicule, Moody's changed its mind. Clearly, it was silly to treat Iceland's banks as though they were just as creditworthy as the sovereign.

Fast-forward to today, and Iceland has indeed bailed out Glitnir. But here's the thing: Iceland's credit default swaps are now suggesting that the sovereign itself is a distressed credit.

Contracts on Iceland's debt jumped to 17.5 percent upfront and 5 percent a year to protect 10 million euros ($13.8 million) of bonds.

full story:

lunar 04.10.2008 21:03

Zitat von Silverbay

4. Oktober 2008, 20:11, NZZ Online

Rettungspaket für Hypo Real Estate gescheitert
Kreditzusagen für deutschen Immobilienfinanzierer nicht mehr gültig

Leser-Kommentar vom 4. Oktober 2008, 20:29h

24 Stunden hat man nun Zeit ...

die Situation zu entschärfen, sonst wird einem „blue monday“ eine
Ausgabe in schwarz folgen – nach ersten Berichten sind die notwen-
digen Aufwendungen bis in 3-stellige Milliarden Beträge prognostiziert,
und das für ein einziges ( sic ! ) Institut.

Vor diesem Hintergrund mutet Paulsons‘ „Notpaket“ in Washington für
den Anspruch einer „Bereinigung“ der Kreditkrise als Tropfen auf ein
finanzielles Inferno an.

Die 700 Milliarden US Dollar scheinen schon zum jetztigen Zeitpunkt
diffundiert – God bless the printing press.


Silverbay 04.10.2008 22:31

Nun gibt es auch hier die "FDIC" weekends,


«Einige Banken haben über der 1/3 ihrer Einlagen durch die
nicht versicherte FDIC. Zum größten Teil aufgrund maximale
Versicherung Grenzen. Dies könnte dazu führen, dass ein Run
auf Bargeld.

Mehr ausgefeilte Menschen kann beschließen, sie wollen ihr Geld
von den Banken. Der US-Dollar nicht fallen in der Tat ist es steigt
zu neuen Höhen kürzlich gegenüber dem Euro. Die Leute werden
sagen, hey Beginn möchte ich mein Geld in ein anderes Land und
warten, um zu sehen, wie dieses Chaos spielt.»

Auszug aus der "Interpreter" Abteilung der "Panama Legal"


lunar 05.10.2008 11:28

George W. Bush

Nehmen Sie die embryonale Stellung ein!

Von Frank Schirrmacher :supi

04. Oktober 2008 Vielleicht ist das Schlimmste nicht das, was George W. Bush uns genommen hat, sondern das, was er uns gegeben hat. All die Abschiede von ihm, von Washington, von Amerika sind nichts anderes als ratlos hinausgezögerte Verluste unserer Illusionen. Und sind selbst eine Illusion. Denn das Entscheidende, das er uns hinterlässt, kann man nicht loswerden. Bush hat die Demokratien begrifflich versklavt, indem er ihr Verfassungs-Vokabular von der Freiheit bis zur Menschenwürde als Mittel seiner undurchschaubaren Herrschaftspraxis benutzte. Abschiede von der Treue zu den Vereinigten Staaten, ihren Apotheosen des Wohlstands und ihrer Macht, wie es in allen Zeitungen steht? Wir haben dafür etwas bekommen, von dem wir uns nicht mehr verabschieden können: die beschämende Erfahrung der tiefen Untreue gegen uns selbst, das überwältigende Erlebnis der Ohnmacht, eine Identitätsverschiebung, wie sie die Annalen freier Gesellschaften nicht kennen. (Here you find the english version of the article: Assume the Fetal Position: A Balance of the Presidency of George W. Bush)

ganzer Artikel:

ich finde diesen Artikel sehr gut :supi ....bei einigen Kommentaren zieht's mir allerdings die Schuhe aus :schreck

lunar 05.10.2008 11:51

Silverbay - bei uns bist Du mit SFr. 30'000 versichert :rolleyes ist das nicht beschämend :mad

lunar 05.10.2008 11:54

Equisetum @ 16:01 pm on October 4, :verbeug

October 4th, 2008 <<I noted that one benefit of Mimosa extract was to relax the mind. That appeals to me under present market conditions.>>

Ah, as I have happily discovered, not only the mind but the body as well…its use has rendered a horrendous case of insomnia to depart, far surpassing the effects of my usual concoction of Valerian, Passionflower, and Skullcap. I’ve heard a few people here and there refer to Mimosa as silk tree, it appears to be widely known by that apt name.

Attached for you due to present market conditions and trust it will afford at least rueful agreement. Moggy


CEO –Chief Embezzlement Officer.

CFO– Corporate Fraud Officer.

BULL MARKET — A random market movement causing an investor to
mistake himself for a financial genius.

BEAR MARKET — A 6 to 18 month period when the kids get no
allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING — The art of buying low and selling lower.

P/E RATIO — The percentage of investors wetting their pants
as the market keeps crashing.

BROKER — What my broker has made me.

STANDARD & POOR — Your life in a nutshell.

STOCK ANALYST — Idiot who just downgraded your stock.

STOCK SPLIT — When your ex-wife and her lawyer split your
assets equally between themselves.

FINANCIAL PLANNER — A guy whose phone has been disconnected.

MARKET CORRECTION — The day after you buy stocks.

CASH FLOW– The movement your money makes as it disappears
down the toilet.

YAHOO — What you yell after selling it to some poor sucker
for $240 per share.

WINDOWS — What you jump out of when you’re the sucker who
bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR — Past year investor who’s now locked
up in a nuthouse.

PROFIT — An archaic word no longer in use.

lunar 05.10.2008 12:02

An E-Mail to a Member of the Research Team at Goldman Sachs

October 4th, 2008 October 4, 2008


Thank you for the opportunity to be on your e-mail list. I appreciate your generosity and hard work.

I am writing to ask you to unsubscribe me from your list. I value your research reports. However, it would be hypocritical of me to accept them.

I believe in death penalties for private corporations and partnerships. My vote for one of the first to be murdered is Goldman Sachs. You and your colleagues have helped to build and manage a machinery that has committed treason and genocide on a breathtaking scale. The history of Goldman Sachs over the last two decades is living proof that it is possible to kill with a financial system and a pen.

The fact that you don’t understand what you and your colleagues are doing is breathtaking. It raises more than a few questions about whether you understand what is really behind the flow of funds you track and publish.

The question before us is who will pay the price of the mess that you and your colleagues have had such a significant hand in creating:

Who will lose their business and who will keep it?
Who will lose their job and who will keep it?
Who will lose their home and who will keep it?
Who will lose their reputation and who will not?
Who will lose their family and who will not?
Who will lose their health and who will not?
Who will lose their future and who will not?
Who will lose their live and who will not?
Who will lose their freedom and who will not?

My plan for bailing out the country would include asserting common law offsets against the assets of the NY Fed member banks and all of their partners and employees who benefited up to an amount sufficient to repay $4 trillion missing from the US government, to fund losses caused by the manipulation of the precious metals markets and to fund claims of

fraudulent inducement and fraud on mortgages and mortgage securities. To fund the offsets, I would propose to seize the offshore and onshore assets of those who created the mortgage bubble and derivatives mess in the first place.

Frankly, I see no reason why millions of poor people around the world should pay a global tax through the dollar and US treasury and agency securities for which the American people are liable, so you and your colleagues can continue to live in comfort and luxury without concern that you will be held accountable to the same standards of enforcement

applied to the people who live in the communities wrecked by the mortgage, money laundering and financial fraud that made you and your clients so powerful.

It seems to me if anyone should lose their business, jobs and home, it is you and your colleagues.

Sincerely Yours,

Catherine Austin Fitts
Solari, Inc.
PO Box 157
Hickory Valley, TN 38042

:bad GS :bad

lunar 05.10.2008 16:50

:supi Artikel :supi

From The Sunday Times

October 5, 2008
Depression of 2008

Are we heading back to the 1930s? Our Economics Editor assesses just how bad it will get

David Smith

div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } It was an era that brought some of Britain’s finest writers to a flurry of indignation. One railed against the “greedy, profit-grabbing system” and hoped to see “the people in the City all shoddy, bewildered, unhappy”. Does that sound familiar? Polly Toynbee, perhaps, turning her righteous fury on the financial masters of the universe who have pushed the banking system over the brink?

No, it was JB Priestley and the era was the Great Depression of the early 1930s, which shaped the 20th century more than any other economic event, creating the conditions for the rise of fascism in Europe.....

........The man who can most lay claim to having seen the present financial crisis coming, and warned about it, is Bill White, former economic adviser to the Bank for International Settlements (BIS), the Basel-based central bankers’ bank.

White – a genial Canadian who spent time at the Bank of England as well as more than 20 years with his own country’s central bank – joined the BIS in the mid1990s. Almost immediately he and his colleagues began to be worried about what was happening. Global stock markets, in particular, appeared to be too strong in relation to underlying economic developments, and property prices were soon to follow.

It may have been a time of low inflation but it was also a time of strongly rising optimism, reflected in soaring share prices – “the Roaring Nineties” – and increased risk-taking by the banks.....

........Greenspan appeared to be aware of the danger. But White watched with alarm as, each time the debt bubble threatened to burst, the Fed chairman and his fellow central bankers around the world, rather than accepting a temporary downturn in their economies, pumped up the bubble even more by cutting interest rates.

“What amazed me was how each time they managed to rejuvenate the system by reducing interest rates,” he said last week. “But in the end, if the fundamental position is that there is too much credit in the system, something has to give.”......

......The International Monetary Fund, despite its deep worries about the financial crisis, will still predict this week that world economic growth this year and next will be not far short of 4%, nearly double the usual definition of global recession.

The G7 countries – America, Britain, Japan, Germany, France, Italy and Canada – are hamstrung by the credit crisis and will not grow much, if at all.

However, the “emerging” world, led by China, is still strong. China is slowing, but from a growth rate of 11% to something like 9%. Economies such as India, Russia and Brazil still have plenty of momentum, despite recession or near recession in the West.

We may look back on this period as the moment when China took on the economic baton. Or, at least, when a communist country that had embraced its own controlled form of capitalism kept the world afloat.

That, viewed from the glass towers of Wall Street or Canary Wharf, where the risk-taking went much too far, would be the ultimate irony.

full story:

lunar 05.10.2008 17:36

rodin Registered User

Originally Posted by Cassandra
So, what rating comes after "E" ?



ist zwar nicht zum lachen :rolleyes

lunar 05.10.2008 17:49

Hidden in the Emergency Economic Stabilization Act of 2008

by bill hicks | October 3, 2008 at 01:13 pm | 596 views | 9 comments
by zichi

by moonwolf

Obviously no one wants to read the whole thing. What it says is two things. In the increase of FDIC coverage from 100k to 250k they made changes to the reserves that back your money from 3% to ZERO. Banks no longer have to hold any money to back you up. Big deal you say --- If they do not have the money they can not to give it to you. No Problem you say again -- the FDIC will give me my money. THE BIG PROBLEM IS THE FDIC SHUTS A BANK WHEN THEY DO NOT MEET THE RESERVE REQUIREMENT... GUESS WHAT? I NOW MEET THE RESERVE REQUIREMENT FOR THE WHOLE US of A. THERE IS NO RESERVE REQUIREMENT---NO BANK CLOSINGS--- NO MONEY IN THE BANK = NO MONEY IN YOUR POCKET.



lunar 05.10.2008 20:28


Etappensieg im Kampf um Wachovia

05. Oktober 2008 Im Übernahmekampf um die von der Finanzkrise getroffene amerikanische Bank Wachovia hat die Branchenführerin Citigroup am Wochenende vor Gericht einen Etappensieg errungen. Ihr Konkurrent Wells Fargo darf seine Kaufpläne vorerst nicht weiter verfolgen. Die Citigroup teilte am Samstag mit, nach einer Eilentscheidung eines New Yorker Gerichts sei ihr zu Wochenbeginn geschlossener Vertrag über Exklusivverhandlungen mit Wachovia bis zu einem anderslautenden Urteil weiter gültig. Am 10. Oktober sollen Wachovia und Wells Fargo vor dem Gericht Stellung nehmen.....

......Konzentration als Konzernstrategie ausgerufen

Vor allem für den Citigroup-Vorsitzenden Vikram Pandit hat daher eine Wachovia-Übernahme besondere Bedeutung. Hat er doch eine Konzentration der Bank, die infolge der Krise Abschreibungen und Verluste über insgesamt 60 Milliarden Dollar hinnehmen musste, auf stabilere Geschäfte wie eben das Privatkundengeschäft zur Konzernstrategie ausgerufen. Wells Fargo hat dagegen die Klippen der Krise an den Finanzmärkten weitgehend in ruhigerem Fahrwasser umschifft und durchweg Gewinne geschrieben. Wachovia erlitt allein im zweiten Quartal einen Rekordverlust von 9,1 Milliarden Dollar.

ganzer Artikel:

On December 11, 2007, Pandit was named the new CEO of Citigroup, Pandit was strongly supported by interim chairman Robert Rubin

...Robert Rubin ex Finanzminister ex GSler jetziger Verwaltungsratschef Citigroup ---> with a little help of a friend :bad

lunar 05.10.2008 20:36

Max Keiser on the Paris Summit

Silverbay 05.10.2008 22:05

quote lunar, FDIC goes east (Berlin)
«Silverbay - bei uns bist Du mit SFr. 30'000 versichert :rolleyes
ist das nicht beschämend»

"hat man nichts, so gibt es auch nichts zu verlieren"...

das Motto der Kriegsgeneration.

... auf neusprachlicher, finanzpolitischer Ebene:

"gib' und Dir wird genommen"


Aktuelle Uhrzeit 16:43

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