Naked Hunting Season to Resume Tomorrow

October 8th, 2008 by Mark Mitchell
In a few hours, the SEC will lift its ban on short-selling of 900 stocks. That is well and good, except that it appears that hedge funds will also be permitted to resume abusive naked short selling – offloading stock that they do not possess in order to dilute supply and drive down prices....




....warum verbietet man naked short selling eigentlich nicht :confused ich dachte eh es sei ungesetzlich :rolleyes

SEC's Short-Seller Witch Hunt Nabs a Munchkin: Jonathan Weil
Commentary by Jonathan Weil


Oct. 8 (Bloomberg) -- And you wonder why the markets are nervous.

At 2:51 p.m. yesterday, the Securities and Exchange Commission unleashed a bombshell news release. The headline: ``SEC Charges Beverly Hills Firm and Principal for Illegal Short Selling.''

The big story? Here we are, in the worst financial crisis of almost everybody's lifetimes, and this is what qualifies as news down at the SEC.

Not just a short seller. An illegal short seller. From BEVERLY HILLS! Message: ``Yeah, baby! We got one!''

And who is this capo of 90210? The man upon whom we, the investing mob, should focus our anger, while Wall Street CEOs and SEC Chairman Christopher Cox get away?

According to the SEC, he is one Kenneth Rickel, principal of the renowned Lion Gate Capital Inc. And for all his efforts, this Rickel fellow allegedly made profits of $207,291.....

......Now see if you recognize any of the company names that were the targets of Rickel's trades: TC Pipelines LP, Minrad International Inc., IPC Holdings Ltd., Axsys Technologies Inc., Randgold Resources Inc., Fiberstars Inc., Pharmaxis Ltd., Lifetime Brands Inc., American Capital Strategies Ltd., Axesstel Inc., TGC Industries Inc., Brigham Exploration Co., Gasco Energy Inc. and Extra Storage Space Inc.

Meanwhile, as Bear Stearns Cos. and Lehman Brothers Holdings Inc. were unraveling, Cox and the SEC slept.

If the people running the SEC aren't going to resign, they should at least shut up. That way, we won't know just how much time they waste each day formulating over-the-top quotes for press releases about small-fry cases instead of doing their jobs.........

full story: http://www.bloomberg.com/apps/news?...=columnist_weil

.....Deppen mit enormen Gehältern :mad

The Fed is Bankrupt: Update on the Helicopter - The Secret Death of the Fed

-- Posted Tuesday, 7 October 2008

..........

• The Federal Reserve is bankrupt. The U.S. Treasury Department quietly rescued — actually, took over — the world’s largest Central Bank on September 17.

• The idea that Federal Reserve Chairman Bernanke could fly his helicopter was a fraud; the Fed simply didn’t have any helicopter fuel.

• The U.S. Treasury Department, on the other hand, has copious amounts of helicopter fuel in the form of undiscounted government debt, and this fuel has now been made available to Mr. Bernanke. The more fuel the Treasury provides, the closer the U.S. dollar will get to its death.

• Just released Fed data confirms that initial test flights of Ben’s helicopter have been spectacularly successful. Up to $150 billion has been loaded on the helicopter so far and may already be fluttering down into the Monetary Base as I write this. The inflation of “high power” money by more than 15% in the course of 2 weeks (an annual rate of 300% or more) is unprecedented.

• Inflation of the Monetary Base is leveraged by fractional reserve lending. Should the banks actually start to lend again, we could very well see hyperinflation in the U.S. over the next 18 months.

• This is obviously bullish for gold and silver and bearish for the dollar, although it could take the markets a while to realize it (by which time an even more incredible sequence of events could overshadow this one, although I doubt it). I think the markets might need 2-3 weeks more to absorb what just happened.

I wrote last Thursday’s post about the Federal Reserve’s bankruptcy right before the new Factors Affecting Reserve Balances report came out with data as of October 1, which confirmed my statement that the Federal Reserve is a dead man walking. The Reserve Balances report supports what Ed Bugos and several of my readers pointed out on Friday: a massive jump in the Adjusted Monetary Base during the second half of September. Here is a chart of this data:



Notice the vertical line at the end of the chart. That’s a $75 billion increase in the past two weeks. Given the parabolic rise of the Adjusted Monetary Base since 1970, perhaps you might think that $75 billion is not particularly special, but the just-released Factors Affecting Reserve Balances report indicates that the size of the vertical line could more than double to $150 billion when this chart is updated next week. See the Ed Bugos article for more charts with vertical lines.....

......So why exactly has Ben’s famous helicopter not flown, much less made money drops, until the past two weeks? There are several reasons. For one, even Mr. Bernanke recognizes the inflationary implications of a helicopter drop and he was willing to use it only as a last resort. But there is a more fundamental reason. You see, the helicopter didn’t have a stable fuel supply. What fuel there was in the form of Open Market operations or purchases of bank assets was simply too unstable and would probably cause the helicopter to crash. Furthermore, it turns out the Fed cannot monetize bank assets effectively without assistance from the U.S. Treasury Department. See the Appendix to this essay for a detailed explanation.

What I’m saying is that the idea — as suggested by the Fed Chairman himself — that the Fed is capable of flying the helicopter all by itself is fraudulent. Moreover, anybody claiming that the Fed had already flown the helicopter before September is simply wrong. The various Federal Reserve reports that I reference in this commentary back me up on this. For example, the Aggregate Reserves of Depository Institutions and the Monetary Base shows that as recently as September 10, when the total borrowings by banks under the various Fed credit facilities stood at $170 billion:

2. The Reserve Balances with Federal Reserve Banks was still under $10 billion (as it had been throughout the crisis since early 2007);
3. The Monetary Base was still around $850 billion (up only $20 billion since August 2007); and
4. Federal Reserve Notes outstanding were still around $800 billion (also up a corresponding $20 billion since August 2007).......

full story: http://news.goldseek.com/GoldSeek/1223400153.php

:schwitz soll ein guter Artikel sein - sagt man - ich muss ihn erst noch lesen, ziemlich lang :rolleyes

BANKENBEBEN

"Der Finanzplatz Schweiz wird bluten"

Die Schweiz kämpft gegen das globale Bankenbeben. Ein Kollaps der heimischen Großinstitute wäre ein Alptraum - denn die Geldindustrie ist der wichtigste Wirtschaftszweig des Landes. Doch die Berner Regierung leistet sich ein miserables Krisenmanagement :mad Von Michael Soukup, Zürich mehr...

Oct 8, 2008 10:00 pm US/Eastern
NYC's Most Expensive Room: $34,000 Per Night

Four Seasons' 'Ty Warner Suite' Offers Lavish Luxury Unlike Any Other, Complete With Round-The-Clock Butler

Included: Marble, Touch Screen Technology, Smart Toilet

Reporting
Dana Tyler
NEW YORK (CBS) ― Most Americans are giving up little luxuries in this tough economy. But some are still able -- and willing -- to pay up for the ultimate in style and service.

Case in point … CBS 2 HD recently got a look at the city's most expensive hotel room. And it can be yours for just $34,000 a night.

"This is the highest hotel in the city," one prospective renter said. "I think the view is just phenomenal."

So what does that type of money buy you? Try some of the most breathtaking views in the city, from 4,300 marble-covered square feet of luxury.

The "Ty Warner Suite" on the 52nd floor of the Four Seasons hotel dazzles with stylish details like waterfalls on its walls, a broken glass chandelier and a crystal sink.....

full story: http://wcbstv.com/seenon/four.seaso...y.2.835862.html

...na endlich eine adäquate Bleibe für :kotz AIG Manager & Co

world crash :(

...aus Trader's Daily :)

Gedicht des Tages

Wenn die Börsenkurse fallen,
regt sich Kummer fast bei allen,
aber manche blühen auf:
Ihr Rezept heißt Leerverkauf.

Keck verhökern diese Knaben
Dinge, die sie gar nicht haben,
treten selbst den Absturz los,
den sie brauchen - echt famos!

Leichter noch bei solchen Taten
tun sie sich mit Derivaten:
Wenn Papier den Wert frisiert,
wird die Wirkung potenziert.

Wenn in Folge Banken krachen,
haben Sparer nichts zu lachen,
und die Hypothek aufs Haus
heißt, Bewohner müssen raus.

Trifft's hingegen große Banken,
kommt die ganze Welt ins Wanken -
auch die Spekulantenbrut
zittert jetzt um Hab und Gut!

Soll man das System gefährden?
Da muss eingeschritten werden:
Der Gewinn, der bleibt privat,
die Verluste kauft der Staat.

Dazu braucht der
Staat Kredite,
und das bringt erneut Profite,
hat man doch in jenem Land
die Regierung in der Hand.

Für die Zechen dieser Frechen
hat der Kleine Mann zu blechen
und - das ist das Feine ja -
nicht nur in Amerika!

Und wenn Kurse wieder steigen,
fängt von vorne an der Reigen -
ist halt Umverteilung pur,
stets in eine Richtung nur.

Aber sollten sich die Massen
das mal nimmer bieten lassen,
ist der Ausweg längst bedacht:
Dann wird bisschen Krieg gemacht.

- Verfasser: Leider unbekannt! Dieses Gedicht kursiert derzeit im Internet, jedoch konnte ich den Verfasser nicht ausfindig machen.
Michael Vaupel

All 3 Big Icelandic Banks Are Now Nationalized

Iceland's financial watchdog said on Thursday it was taking control of the country's biggest bank Kaupthing, the third such takeover in a week, in order to safeguard the domestic banking system.

:gruebel :nw

Bill H Says its Over….any Questions ?

It’s Over

To all; it’s over. The European banking system is unraveling after a bank failure in Iceland of all places was the chain link that broke. The EU countries met today to form some sort of bailout plan for the banks and when all was said and done, it is now every country for themselves, no agreement was reached between Germany and the Latin countries. Russia’s market was down more than 40% over the last 2 days and closed down 1% today after P.M. Medvedev pledged another $36 Billion to the banking system. The British P.M. and the Chancellor of the Exchequer are meeting on a bailout for the British banks. British credit cards are being declined for use in Europe proper. The Fed is now paying interest on funds deposits to put a floor in on rates so they can literally pump unlimited $s into the system without pushing rates to 0. The Fed also announced that they will backstop the commercial paper market with liquidity. Libor rates went higher again today, and the Treasury announced yesterday that they can make direct investments in any corporation. The best of all is the margin call by JP Morgan to Lehman Bros. [bankrupt] and Merrill Lynch [now part of Bank America who went to market today for $10 Billion in new capital that was undersubscribed]. I wonder if they’ll be paid?.....

full story: http://goldtent.com/wp_gold/2008/10...rany-questions/

Fear Trumps Greed as Market Woes Paralyze Economies (Update1)
By Matthew Benjamin and Michael McKee

Oct. 9 (Bloomberg) -- Greed and fear are the emotions that rule markets. Fear is winning.

U.S. and European stock markets fell yesterday, even after the Federal Reserve lowered its benchmark interest rate in concert with central banks in Europe, Canada and China.

Investors are in the grip of a panic that psychologists and historians say isn't necessarily rational and may intensify. They aren't buying stocks, and more importantly, suddenly afraid they won't be repaid, they aren't making loans by buying bonds. Banks have also tightened credit.

``People are driven by images of the best and worst that can happen,'' says George Loewenstein, a professor of psychology and economics at Carnegie Mellon University in Pittsburgh. ``The image of the worst is much more vivid in their minds right now.''.....

....``Of course there's panic,'' he says. ``The next few months will take a strong stomach.''


full story: http://www.bloomberg.com/apps/news?...hnpk&refer=home

The next few months will take a strong stomach.'' :schwitz also noch mehr :bad:rolleyes

Killing Corrections Can Be Fatal To Economies

10/9/8 - Elaine Meinel Supkis

Global interest rates drop towards 1% or less. Savings glut is gone with the wind. The US has been in a savings dearth for years now. The Derivatives Beast continues to make headlines. The New York Times has some big, big stories about Greenspan and how he is the father of this monster. And I explain again, why this is not a credit crunch but a CORRECTION. And explain the obvious: why we call these events, 'corrections.' It seems, our leaders don't understand basic English.


First, from an email sent by C.G.R. comes this bit of dictionary humor:


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

BEAR MARKET -- 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 outhouse.

PROFIT -- An archaic word no longer in use.
******************************************

I would add 'CONGRESS-- A collection of cons who vote.'

Bear Market Until 2011: Analyst

http://www.cnbc.com/id/15840232?video=883327695&play=1

Between October 8 and October 10 is a key time for making a low in the market, according to Tom Hougaard from City Index, adding that we are likely to be in a bear market until 2011.

merci @Eldo :)

U.S. debt grows too big for National Debt Clock.»:dumm

The National Debt Clock in New York’s Times Square — first erected in 1989 when the debt was less than $3 trillion — cannot keep pace with the growing national debt, now at more than $10 trillion. NBC’s Brian Williams reported last night that “the debt has been piling up so fast lately they had to drop the dollar sign to make room for an extra digit.” A new clock with two extra digits will go up next year. Watch it:
http://thinkprogress.org/2008/10/07/debt-clock/


Schuldenuhr in New York gehen die Stellen ausAP - vor 57 Minuten

New York (AP) Die berühmte Schuldenuhr in New York hat nicht genug Stellen, um mit der Rekordverschuldung der US-Regierung Schritt halten zu können. Als kurzfristige Notlösung wird nun das Dollarzeichen auf der Anzeigetafel zu einer Eins an der ersten Stelle der neuen Schuldenzahl umfunktioniert. Die Uhr misst die rasant steigende Staatsverschuldung der USA mit derzeit 10,2 Billionen Dollar.
http://de.news.yahoo.com/ap/2008100...st-45cd332.html

Thu 9 Oct 2008

Neel Kashkari Truly Is Hank Paulson Mini-Me

Posted by alyx under hank paulson
1 Comment


Brad Walker sent me an email earlier this week, pointing out the similarity between Hammerin’ Hank Paulson and Neek Kashkari, the bailout wunderkind. Who knew the similarities were so very deep (from WSJ):

People are looking for clues on the experiences that helped form the thinking of the one-time rocket scientist, Republican contributor and :bad Goldman Sachs :bad banker. Since 2006, Kashkari has been one of Paulson’s regular advisers, sharing with his mentor a hairstyle, Midwestern roots, a Goldman alumni card and even the same taste in popular soft drinks.

He is also a fan of AC/DC and has a dog named Winslow. If that isn’t enough to make you trust a man with $700 billion - what is?

....bisschen Abwechslung ;) Schei**börse :o

von DU :verbeug

Libor Dollar Rate Jumps to Highest in Year; Credit Stays Frozen

(Bloomberg) -- The cost of borrowing in dollars for three months in London soared to the highest level this year as coordinated interest-rate reductions worldwide failed to revive lending among banks for any longer than a day. Attempts by policy makers to restore confidence to money markets are being stymied by almost daily crises among financial institutions. Iceland's government took over the nation's biggest lender today to keep the country's banking system working. American International Group Inc., the insurer taken over by the U.S. government, may need $37.8 billion of extra funds, the Federal Reserve Bank of New York said yesterday.
*snip*
Iceland's government today seized control of Reykjavik- based Kaupthing Bank hf, completing the takeover of a banking industry that has collapsed under the weight of its foreign debt. Late yesterday, the Fed said New York-based AIG can swap as much as $37.8 billion of its ``investment-grade, fixed-income securities'' for cash to ``replenish liquidity.''

The international banking system continues to collapse despite global attempts at re-energizing the credit circus.

http://elainemeinelsupkis.typepad.com/money_matters/



http://www.bloomberg.com/apps/quote...US00O%2FN%3AIND

Is this like trying to lift yourself up by pulling up your shoelaces?

-> Posted by ipso_facto @ 13:29 pm on October 9, 2008
Paulson and Bernanke now are truly caught in the box, as I have been talking about for more than a year. As they introduce and fund these silly programs like the “TARP” each new program produces more foreclosures by depressing home values and thus tightens the spiral.

See, as long rates go up house prices go down, since the value of a home for most people is Dependant on what they can finance, and that is directly related to interest rates. Get out your HP12C and run the principal value change for a fixed payment if interest rates change from 6% to 8% or 10% - that’s the impact on the value of your house from these changes that are occurring in the Treasury marketplace.

This outcome is what I warned of in “Our Mortgage Mess” back in April of this year; a potential ramping of borrowing costs for government debt, which will not only make sustaining government spending (and perhaps government operation) impossible, but in addition destroy private credit by driving costs in the private sector skyward as well.

http://market-ticker.denninger.net/

09 October 2008

Lehman CDS Were Settled at Auction Today - Crises du Jour


We have not seen the results, but should we infer from the stock market action that the Lehman Brothers Credit Default Swaps auctions did not go smoothly?

Or is it merely the collapse of the US insurance industry from fraud and over-leverage that is frightening Wall Street into fit. Or is it that S&P just placed General Motors and GMAC on negative credit ratings watch.

We seem to be careening from one surprise and crisis to another.





Posted by Jesse at 3:28 PM

Thu 9 Oct 2008

Happy Anniversary, DOW 14,000 Double-Top!

Posted by alyx under fail
[2] Comments


Self-Evident reminds me that we’re around the the one-year anniversary of what was the set of halcyon days that turned out to be the second half of a horrific double-top at Dow 14K (October 2-12, 2007), and IDK, I would say, like, many happy returns, or something, but “many negative returns” is more like it. +1 if you have lost so much money that you now look at cakes only as a vehicle into which you can bake, and thus hide, a flask.

.

Thu 9 Oct 2008

Who Likes Short Shorts?

Posted by nin_man under Uncategorized
1 Comment


I don’t really have much to say about this - the ban on short selling is over as of this morning - but I really wanted to post this picture, which I have had sitting around literally since the ban was first announced.

Don’t judge me. I plan ahead, that’s all.

:o.

:eek

Amazing that the SEC

-> Posted by Buygold @ 16:30 pm on October 9, 2008
has refused to re-instate the uptick rule while Rome burns. That ought to tell everyone on the planet that this market crash has been anticipated and in fact created by the true money masters of this earth.




:schwitz ...nur wer sind sie denn wirklich :gruebel

It Is Here! The Banned SNL Skit Cannot Hide From Louie


:hihi

Lehman CDS sellers face massive losses in auction

Thu Oct 9, 2008 5:28pm EDT

NEW YORK, Oct 9 (Reuters) - Banks, hedge funds and other sellers of protection on Lehman Brothers' (LEN.N: Quote, Profile, Research, Stock Buzz) (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) debt are facing losses in the area of 90 percent the insurance sold when the value of the failed bank's credit default swaps are settled in an auction on Friday.

If sellers of protection outweigh buyers in the auction, as some analysts expect, losses may be even higher......

full story: http://www.reuters.com/article/bond...932589620081009

09 October 2008

The Progress of the Dollar Rally in Context and the Stock Market Crash


This is a simple update of the chart which was posted on this blog on 8 September Dollar Musings and the Potential for a Significant Stock Market Decline.

We will take a minute to note this detail from that September 8 blog entry:

We think that there is a heightened chance of a significant stock market decline that will start in the next thirty days. As we have previously said we are watching for a 'failed rally' hall mark in our model, We are almost there.

A likely target for clarification will be around the week of this month's option expiration on 20 September.

The clarification was a market decline that started on 19 September and has shaved around thirty percent off the major US stock market indices.

The dollar did drop back into the 70's and then has rallied sharply back up to resistance around 82.

All of our charting indicates that the dollar will not significantly top the 61.8 fibo level of 84.37 if it does surmount the resistance at 82.

If it does, then we need to reconsider this as something other than a bear market rally.



Posted by Jesse at 11:03 PM :verbeug

Nikkei :runter 24.33% in dieser Woche :(

....müssen wohl die Wallstreeter sein die nicht reinfallen sollen :rolleyes wäre totale Umweltverseuchung :o

Posted by fabric

:schwitz the light at the end of the tunnel :confused:rolleyes

Posted by fabric

Bear Stearns: Murdered at the Golden Gates
-- Posted Friday, 10 October 2008 | Digg This Article | Source: GoldSeek.com
By: Rob Kirby

Much has already been written about the untimely demise of investment bank Bear Stearns. Most, if not all, that has been written to date – deals with issues related to equities / expiring options – or the share price.

Recently, new information has come to light which allows us to forensically examine the demise of Bear Stearns from a completely different angle – GOLD.

No-one should be surprised by this development. Up until the untimely demise of Bear Stearns, the most celebrated and at the same time misreported and misunderstood financial collapse in American History was that of Long Term Capital Management [LTCM] back in 1998. The treatment – or more properly stated, the decision to bail-out LTCM – was all motivated by GOLD. For a primer on the LTCM / GOLD nexus, readers can gain a nuts-and-bolts background in these two articles:

· The Anatomy of a Fictional Hedge Fund Collapse

·LTCM Revisited - A Forensic Account

That Bear Stearns and LTCM should be mentioned in the same breath should also come as no surprise for another reason; Bear Stearns was the only major player invited by the NY Fed / Treasury to participate in the “then bail-out of LTCM” who refused to participate. Not participating, or bearing a portion of the financial burden, in the suppression of the gold price effectively made Bear Stearns “an enemy of the State”.



So, it’s an ironic twist of fate that while LTCM’s demise was cloaked because they were secretively and nefariously “short gold”; Bear Stearns was brought to heel [assassinated, more likely] because they were “long” – at a minimum - roughly 12 billion dollars worth of gold derivatives [futures].



At Their Demise, Bear Stearns Was Categorically “Long” Gold

................


full story: http://news.goldseek.com/GoldSeek/1223619420.php __________________

Wirtschaft: 10. Oktober 2008, 11:59
Allgemeine Ratlosigkeit an den Börsen


Ausverkauf in Zürich und Frankfurt – Handel in Wien ausgesetzt

Die Börsen befinden sich trotz Beruhigungsspritzen der Notenbanken weltweit im freien Fall. Der Schweizer Blue-Chips-Index SMI tauchte zeitweise um über acht Prozent, der Dax stürzte kurz nach Eröffnung um mehr als 10 Prozent ab. Analysten und Händler sind ratlos. Nach Moskau hat auch die Wiener Börse den Handel unterbrochen. ...




AUSVERKAUF AN DER BÖRSE

Dax stürzt tief ins Minus

Krisenstimmung auf dem Frankfurter Parkett: Zum Handelsauftakt brach der Dax um mehr als zehn Prozent ein, jetzt schlingert er weiter tief im Minus. Zuvor hatten schon der amerikanische Dow Jones und der japanische Nikkei-Index massive Verluste verzeichnet. mehr... [ Video ]

• Krisenticker: Russlands Aktienhandel "bis auf Weiteres" ausgesetzt (manager-magazin.de)
• Krisengewinner: Sparer flüchten in sichere Geldanlagen
• Erneute Abstufung: GM-Aktien verlieren ein Drittel ihres Wertes
• Panik-Spirale: Tokioter Börse im freien Fall
• Rezessionsangst: Panikverkäufe reißen Dow Jones in den Abgrund
• Große Verluste: Börsen in USA und Japan auf Talfahrt

Global equities plunge


Equities plunged after a dramatic late sell-off in New York. London’s FTSE 100 opened 10% down before recovering somewhat to stand 5% lower. Japanese shares touched 20-year lows, leading Asia-Pacific down as fears deepened that the world economy was heading for recession. Overnight, Wall Street suffered its biggest fall since the 1987 crash writeDate( 1223627870000, 'Grey', '09:37', 9999999999999); - 09:37

• Lex: Asian market rout
• Full coverage: Global financial crisis

And there is a bright side ;)

-> Posted by Silverlining @ 6:11 am on October 10, 2008
1) Comment on the US economy
Investment analyst and entrepreneur Dr. Marc Faber concluded his monthly bulletin (June 2008) with the following:

The federal government is sending each of us a $600 rebate.
If we spend that money at Wal-Mart, the money goes to China.
If we spend it on gasoline it goes to the Arabs.
If we buy a computer it will go to India.
If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala.
If we purchase a good car it will go to Germany.
If we purchase useless crap it will go to Taiwan and none of it will help the American economy.

The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I’ve been doing my part.”

2) The true balance sheet of US Investment banks:

There are two sides of the balance sheet: the left side and the right side.
On the left side, there is nothing right…
And on the right side, there is nothing left.

10 October 2008

Canada Rated World's Soundest Banking System

In our recollection Canada's banking system was also fairly sound during the Great Depression.

Canada rated world's soundest bank system
By Rob Taylor
Thu Oct 9, 2008 2:41pm EDT

CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.

But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.

The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.

The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.

The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).

Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).

UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).

The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.

The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF's banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.

Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20.

At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).

World Economic Forum Global Competitiveness Report

RANKINGS

1. Canada :eek

2. Sweden

3. Luxembourg

4. Australia

5. Denmark

6. Netherlands

7. Belgium

8. New Zealand

9. Ireland

10. Malta

11. Hong Kong

12. Finland

13. Singapore

14. Norway

15. South Africa

16. Switzerland :gruebel

17. Namibia

18. Chile

19. France

20. Spain :(


Posted by Jesse at 8:27 AM :verbeug

< Go To Nouriel Roubini's Global EconoMonitor Main Page

The world is at severe risk of a global systemic financial meltdown and a severe global depression


Nouriel Roubini | Oct 9, 2008

The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.

On the real economic side all the advanced economies representing 55% of global GDP (US, Eurozone, UK, other smaller European countries, Canada, Japan, Australia, New Zealand, Japan) entered a recession even before the massive financial shocks that started in the late summer made the liquidity and credit crunch even more virulent and will thus cause an even more severe recession than the one that started in the spring. So we have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies.

There was no decoupling among advanced economies and there is no decoupling but rather recoupling of the emerging market economies with the severe crisis of the advanced economies. By the third quarter of this year global economic growth will be in negative territory signaling a global recession. The recoupling of emerging markets was initially limited to stock markets that fell even more than those of advanced economies as foreign investors pulled out of these markets; but then it spread to credit markets and money markets and currency markets bringing to the surface the vulnerabilities of many financial systems and corporate sectors that had experienced credit booms and that had borrowed short and in foreign currencies. Countries with large current account deficit and/or large fiscal deficits and with large short term foreign currency liabilities and borrowings have been the most fragile. But even the better performing ones – like the BRICs club of Brazil, Russia, India and China – are now at risk of a hard landing. Trade and financial and currency and confidence channels are now leading to a massive slowdown of growth in emerging markets with many of them now at risk not only of a recession but also of a severe financial crisis.....

......Urgent and immediate necessary actions that need to be done globally (with some variants across countries depending on the severity of the problem and the overall resources available to the sovereigns) include:

- another rapid round of policy rate cuts of the order of at least 150 basis points on average globally;

- a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;

- a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;

- massive and unlimited provision of liquidity to solvent financial institutions;

- public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;

- a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;

- a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;

- an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.

At this point anything short of these radical and coordinated actions may lead to a market crash, a global systemic financial meltdown and to a global depression.

full story: http://www.rgemonitor.com/roubini-m...obal_depression

What's clear from the behavior of European financial markets over the past two weeks is that the dramatic stories of financial meltdown and panic are deliberately being used by certain influential factions in and outside the EU to shape the future face of global banking in the wake of the US sub-prime and Asset-Backed Security (ABS) debacle. The most interesting development in recent days has been the unified and strong position of the German Chancellor, Finance Minister, Bundesbank and coalition Government, all opposing an American-style EU Superfund bank bailout. Meanwhile Treasury Secretary Henry Paulson pursues his Crony Capitalism to the detriment of the nation and benefit of his cronies in the financial world. It's an explosive cocktail that need not have been.













Was that just ideological budget cutting fervor, or was it deliberate? Was former Goldman Sachs man, the man who convinced the President to hire Paulson, Bush's former Director of the Office of Management and Budget (OMB), Joshua Bolten, now the President's Chief of Staff, responsible for insuring there was no effective government oversight on the exploding securitization of mortgage assets?

:rolleyes

Studie [PDF!]: Die Aufsichtsräte der Banken sind alle inkompetent.

Die haben mal die Lebensläufe von 426 Aufsichtsratsmitgliedern in den 29 größten deutschen Banken untersucht, und es kommt raus, was man erwarten würde: fast alle haben nicht Wirtschaft studiert, fast niemand hat schon mal in einer Bank gearbeitet.

Von den 37 Aussichtsratmitgliedern der KfW können bestenfalls 5 Finanzmarkterfahrungen vorweisen. Fast alle Vertreter sind entweder Politiker oder Interessenvertreter öffentlicher Verbände und Gewerkschaften. Mit einer kritischen Bewertung und Kontrolle von internationalen Investitionsstrategien sind solche Vertreter angesichts der enorm gewachsenen Komplexität in den Finanzmärkten völlig überfordert. Die erstaunliche Größe des Aufsichtsrates allein legt schon nahe, dass hier sicher kein Manager mit kritischer Kontrolle seiner Investitionspolitik zu rechnen hat.

Überraschung!!1! Als besonders inkompetent besetzt fallen die staatlichen Banken auf, wo nicht mal 15% der Aufsichtsräte schon mal in einer Bank gearbeitet haben, und wenn man nach Erfahrung mit dem US-Finanzmarkt sucht, sind es gar nur 2,5%. Nur 20% der Aufsichtsräte in staatlichen Banken haben Wirtschaftswissenschaften studiert, (Danke, Julius)

Quelle

@Cat - :rolleyes:(:mad


http://www.youtube.com/watch?v=F54rqDh2mWA

10 October 2008

Losses on Lehman Brothers Credit Default Swaps Approaching 92 Cents on the Dollar


Lehman default swaps may recover 9.75 pct area
By Karen Brettell
Fri Oct 10, 2008 10:45am EDT

NEW YORK, Oct 10 (Reuters) - Banks, hedge funds and other sellers of protection on Lehman Brothers are facing losses in the area of 91.25 percent of the insurance they sold, based on the initial results of an auction on Friday to determine the value of the credit default swaps.

There are also substantially more sellers than buyers of the debt in the auction, indicating that the final price of the swaps may be even lower than the initial recovery levels of 9.75 percent, according to results published by auction administrators Creditex and Markit.

The net open interest to sell the debt is $4.92 billion, they said.

The auction to settle Lehman's credit default swaps will be one of the largest settlements of contracts in the $55 trillion market, with around $400 billion in contract volumes estimated on Lehman's debt.

Lehman's bankruptcy filing last month sent its bond values plunging as the majority of the investment banking assets that had supported the debt were purchased by Barclays Bank, leaving debt holders at the abandoned holding company with little to reclaim.

Lehman's bonds were trading in the 11 cent on the dollar area on Friday, compared to around 12-to-13 cents on Thursday, according to MarketAxess.


Posted by Jesse at 11:47 AM :verbeug

:rolleyes