Wed 15 Oct 2008
Pay No Attention To The Tank Parked By The Door
Posted by alyx under Uncategorized
WallStreetFighter is liveblogging from the NYSE today, and has noticed that both Optimus Prime and a nondescript military vehicle are paying the exchange a visit.
Okay, okay, Navistar is ringing the bell today, and is probably just showing off some stuff outside. But you have to ask yourself - is that tank just another Navistar project, or is something more nefarious going on? Is it crammed with dollars that Hank Paulson is forcing upon America’s venerable financial institutions? Could be Treasury’s way of enforcing that even if you might not want ‘em to make a direct investment and take a stake in you, you’re gonna get it anyway. As Erik Skiles emailed me:
It makes me think Paulson will use the Army’s 1st Brigade Combat Team, 3rd Infantry Division (currently deployed to the homeland) to deploy to Wall Street and conduct a hostile take-over of banks, to include kicking down Vik’s door and forcing him to take a suitcase full of cash. Unfortunately, I couldn’t find any images of Vik being assaulted by the 3rd ID.
Or, it could just be an innocuous MRAP, with its new smaller turning radius ideal for mountain roads in Afghanistan and tedious NYC traffic… either/or. But “monetary deployment” just has this great ring to it, you know?
Truth? Where? (Why Credit is Locked)
Hattip Calculated Risk:
"Meredith Whitney: I just want to be clear in terms of the decline in originations on your mortgage portfolio, was that more credit based or in terms of tightening underwriting standards or LIBOR challenge?The response from someone in the loan closing business on my board:
"Umm, Jamie, I close your loans....you lying sack of ***t "And we wonder why the credit markets are locked up?
A better question is why Jamie Dimon isn't locked up.
The automated-underwriting game is alive and well, as are high-DTI loans with all the agencies.......
.....Your latest "intervention" was good for one hour worth of rocket ride higher, and now we are down 350 points on the DOW - again - and its only 10:00 CT. At this rate in another 30 days or so the market will be at zero - it can't go lower than zero, right?America is tired of the lies Hank and Ben, and we're tired of you covering for and giving our money to the liars.
Cut it out NOW while we still have an economy and financial system left to rescue.
Oh, my anecdotal evidence on LOCs is no longer anecdotal. This is precisely the sort of disruption that, if not cured immediately, can lead to empty store shelves:
"``Letters of credit and the credit lines for trade currently are frozen,'' Khalid Hashim, managing director of Precious Shipping Pcl, Thailand's second-largest shipping company, said in Singapore yesterday. ``Nothing is moving because the trader doesn't want to take the risk of putting cargo on the boat and finding that nobody can pay.'' "Cut it out H-h-h-h-Hank.
SEC says it is OK to LIE!
-> Posted by floridagold @ 15:44 pm on October 15, 2008
SEC Clears U.S. Banks to Delay Writedowns on Some Securities
By Jesse Westbrook and Ian Katz
Oct. 15 (Bloomberg) — The U.S. Securities and Exchange Commission agreed to back an effort by banks that may delay writedowns on some securities tied to losses that have cost companies more than $640 billion.
Banks in certain cases may account for perpetual preferred securities as debt, allowing them to postpone writing down their value, SEC Chief Accountant Conrad Hewitt wrote in a letter yesterday to Financial Accounting Standards Board Chairman Robert Herz. Hewitt’s interpretation can be used immediately, as companies prepare quarterly financial reports.
“This is really good news,” Donna Fisher, senior vice president for tax and accounting at the American Bankers Association, said in an interview. “We are making some headway. The SEC is recognizing that there are problems in the rules.”
The SEC’s interpretation may help resolve a debate over accounting for the securities, which are issued without maturity dates. Auditors have determined the securities should be treated as equity and banks sought to count the assets as debt. Banks can treat them as debt “if there has been no evidence of deterioration in the credit of the issuer,” such as a decline in cash flows from the investment or a downgrade in the security’s rating below investment grade, Hewitt wrote.
SEC spokesman John Nester declined to comment beyond the content of the letter.
The treatment of perpetual preferred securities is part of a broader discussion on so-called fair-value rules, which lawmakers and companies including Deutsche Bank AG have blamed for exacerbating the credit crisis. Proponents, including FASB, say fair-value adds to transparency and gives investors more information about publicly traded companies.
As part of a $700 billion package the U.S. Congress passed this month letting the Treasury buy mortgage securities and stakes in banks, the SEC must study the impact fair-value has on financial institutions. FASB agreed Oct. 10 to offer companies guidance on valuing assets in inactive markets, without changing the current rule.
To contact the reporters on this story: Jesse Westbrook in Washington at email@example.com; Ian Katz in Washington at firstname.lastname@example.org.
^HUI4:17PM ET231.32 26.85 10.40%
S&P 500 907.84-90.17-9.03%
...toller rescue plan :escht
hmmmm......da flattern einem nur noch die Ohren :rolleyes
Posted by honey
Bund beteiligt sich an UBS
Aktualisiert vor 3 Minuten 35 Kommentare
Der Bundesrat beteiligt sich mit 6 Milliarden Franken an der UBS. Ausserdem lagert die Bank 68 Milliarden Franken an schlechten Risiken aus. :bad
Artikel zum Thema
ganzer Artikel: http://www.tagesanzeiger.ch/wirtsch...71334#kommentar
Herr Paulson wird sich die Finger lecken :bad da haben doch die tollen Schweizer seinen (als allgemein unmoralisch abgelehnten) Plan in die Tat umgesetzt :bad es ist nicht zu fassen :dumm:dumm:dumm
^N2252:00AM ET8458.45 1,089.02 11.41%
...bin mal gespannt was JESSE heute kommentiert - dieser Bericht ist von gestern :rolleyes
UBS Über Alles
Lose so much in your own trading book that people become afraid and seek your advice
for their private wealth management. Nice corporate strategy.
Hubris? Or would it be just a case of "prétention démesurée?"
UBS says crisis vindicates own bank model
Wed Oct 15, 2008 4:33pm EDT
GENEVA (Reuters) - Switzerland's UBS the world's largest wealth manager, said its advice-driven, global banking business model will be a winner as others failed or were rescued by governments during the global financial turmoil.
UBS was hit early on in the crisis and has announced more write-downs on toxic assets than any other European bank.
"It's never been more obvious to clients that they need advice. This is going to be the proof to our business model," Juergen Zeltner, who heads UBS' wealth management operations in North, Central and Eastern Europe, told the Reuters Wealth Management Summit.
UBS has not given up on investment banking despite huge losses on the business and instead has divided its operations into three separate divisions -- wealth management, investment banking and asset management -- to boost transparency.
Banks which heavily relied on investment banking revenues, such as Lehman Brothers, have either gone bust or needed rescues via forced mergers or government aid.
"I strongly feel that the transparency that we put in place was well appreciated," Zeltner said.
Still, Zeltner said the damage to UBS' reputation from the huge losses in its investment banking division was obvious and had resulted in client outflows. The bank will report third quarter results on November 4.
"We lost trust. We do know that there was substantial damage and that will take years to rebuild," he said.
UBS recapitalized itself earlier than any other bank, before the deepening of the crisis in September, and is now in a position to exploit opportunities in markets where other players have failed, such as the United States, he said. (You'll have to compete with our 'national champions' who are getting their subordinated distress funding from the US Treasury - Jesse)
"The crisis gives us unique opportunities in the United States," Zeltner said.
"We want to grow and build market share."
Posted by Jesse at 6:00 PM
UBS N SWL 09:06:47 18.35 20.08 -1.73 -8.62%
UBS momentan grösster Verlierer beim SMI - die Aktionäre scheinen mehr Anstand zu haben als unsere Nationalbank und die Regierung :supi
...na ja - mittlerweile waren sie auch schon die grössten Gewinner :mad
jetzt UBS N SWL 11:49:32 20.2 20.08 +0.12 +0.60%
Wed 15 Oct 2008
Anxiously Awaiting The Propaganda Initiatives
Posted by alyx under Uncategorized
How long til we start seeing posters like this in our subways, our break rooms and meeting halls all across America?
Paulson and Bernanke (and Bush) are probably beside themselves at their inability to prop this market up. Actually, I have to admit - if one of the brokerages took out a tongue-in-cheek ad like this in the WSJ, they’d probably get my business.
"Die Nationalbank und unsere Regierung setzen also den allgemein als unmoralisch abgelehnten "Paulson-genehmen-Banken Freikarten-Plan" in die Tat um, anstatt des allgemein akzeptierten "Brown-Aktien-Kauf-Plan".
...so ungefär hab ich's dem Tagi geschrieben - war besser in Fahrt am frühen morgen :rolleyes wurde nicht veröffentlicht :gruebel aber knapp 300 Antworten schon :mad
liege ich denn so daneben :confused oder verkaufen die uns für so doof :mad
Not to be outdone, Asian markets tumbled like bad skydivers yesterday, with Japan’s Nikkei dropping over 11%, giving the country its worst day since August 9, 1945. Seems like everyone is suddenly remembering the looming recession. Japan’s Prime Minister is blaming the US, because we really do screw everything up, saying that the $700b failout was “insufficient.” Apparently we should have arbitrarily picked a larger number.
I feel that this picture is really best without comment:
1'400 t Gold getauscht in 60 Mrd Ramsch, aber immerhin gut diversifizierter Ramsch.
@Hoka - es ist in meinen Augen ein unehrlicher Weg (das hätte Herrn Paulson geschmeckt, aber das war sogar den Amis zu übel)
statt dessen Aktien übernehmen, MitspracheRecht erhalten, später wieder verkaufen (bin ja auch nicht für Verstaatlichung, aber vorübergehend muss es wohl sein :rolleyes), UBS soll sich gefälligst selber bemühen ihren Ramsch zu verkloppen :gomad
...und auch das noch :mad von einem AmiBoard:
Good ole FED and its huge $ footprint
(Hten) Oct 16, 09:55 (RTTNews) - Thursday, Jean-Pierre Roth, the Chairman of the Governing Board of the Swiss National Bank, said the US$54 billion loan extended to UBS will not affect the central bank's monetary policy in any way. The reason he cited was that the entire operation is funded by US dollars.
The SNB will obtain US dollar through a Dollar-Swiss-Franc swap with the US Federal Reserve, initially and later via direct refinancing from markets. "The SNB will therefore not incur any currency risk", Roth said.
Earlier in the day, the Swiss government stepped in with emergency funding for two of the country's leading banks, the UBS and the Credit Suisse. The government also announced different measures to strengthen the Swiss financial system. Switzerland, thus, joined the worldwide league of governments, who are taking unprecedented steps to support their banking systems as the global financial market crisis spreads......
1932 - Investors everywhere winced with the pain of recognition at the patter of comedian Eddie Cantor, who sneered that his broker had told him "to buy this stock for my old age. It worked wonderfully. Within a week I was an old man!"
UBS N SWL 16:51:40 19.19 20.08 -0.89 -4.43% 21.3
Highland Shuts Funds Amid `Unprecedented' Disruption (Update1)
By Pierre Paulden
Oct. 16 (Bloomberg) -- Highland Capital Management LP will close its flagship Highland Crusader Fund and another hedge fund after losses on high-yield, high-risk loans and other types of debt, according to a person with knowledge of the decision.
Highland, whose total assets under management has shrunk to about $33 billion from $40 billion in March, will wind down the Crusader fund and the Highland Credit Strategies Fund over the next three years, said the person, who declined to be named because the decision isn't public. The hedge funds had combined assets of more than $1.5 billion.
The Highland Credit Strategies fund suffered from ``unprecedented market volatility and disruption'' in financial markets, according to a letter to investors that was obtained by Bloomberg News.....
full story: http://www.bloomberg.com/apps/news?...hbgm4I&refer=us
The US "Trickle Down" Bailout Will Not Work
The bailout of the banks is just that: a bailout of the banks, designed by bankers, for bankers. It will not help repair the economy. It will not inspire confidence. Most of the money will be lost to insider dealing and narrow-minded favoritism.
This is yet another Bush Administration classic.
Joseph Stiglitz voices the hope that we have been expressing since the beginning of this year:
"Hopefully, our democracies are strong enough to overcome the power of money and special interests, and we will prove able to build the new regulatory system that the world needs if we are to have a prosperous and stable global economy in the 21st century."We can start by voting this November, by overcoming our fears and our confusion, and throwing every Republican and the Democratic leadership out of public office. The message has to be clear, loud and unequivocal.
Paulson tries again
Thursday October 16 2008
Unlike the UK plan, the revamped American bail-out puts banks first and taxpayers second
Gordon Brown has won plaudits over recent days for inspiring the turnaround in Hank Paulson's thinking that saw him progress from his "cash for trash" plan - derided by almost every economist, and many respected financiers - to a capital injection approach. The international pressure brought to bear on America may indeed have contributed to Paulson's volte-face. But Paulson figured he could reshape the UK approach in a way that was even better for America's banks than his original cash strategy. The fact that US taxpayers might get trashed in the process is simply part of the collateral damage that has been a hallmark of the Bush administration.
Will this bail-out be enough? We don't know. The banks have engaged in such non-transparency that not even they really know the shape they are in. Every day there are more foreclosures - Paulson's plan did little about that. That means new holes in the balance sheets are being opened up as old holes get filled. There is a consensus that our economic downturn will get worse, much worse; and in every economic downturn, bankruptcies go up. So even if the banks had exercised prudent lending - and we know that many didn't - they would be faced with more losses.
Britain showed at least that it still believed in some sort of system of accountability: heads of banks resigned. Nothing like this in the US. Britain understood that it made no sense to pour money into banks and have them pour out money to shareholders. The US only restricted the banks from increasing their dividends. The Treasury has sought to create a picture for the public of toughness, yet behind the scenes it is busy reassuring the banks not to worry, that it's all part of a show to keep voters and Congress placated. What is clear is that we will not have voting shares. Wall Street will have our money, but we will not have a full say in what should be done with it. A glance at the banks' recent track record of managing risk gives taxpayers every reason to be concerned.
For all the show of toughness, the details suggest the US taxpayer got a raw deal.
There is no comparison with the terms that Warren Buffett secured when he provided capital to Goldman Sachs. Buffett got a warrant - the right to buy in the future at a price that was even below the depressed price at the time. Paulson got for the US a warrant to buy in the future - at whatever the prevailing price at the time. The whole point of the warrant is so we participate in some of the upside, as the economy recovers from the crisis, and as the financial system starts to work.
The Paulson plan responded to Congress's demand to have something like a warrant, but as a matter of form, not substance. Buffett got warrants equal to 100% of the value of what he put in. America's taxpayers got just 15%. Moreover, as George Soros has pointed out, in a few years time, when the economy is recovered, the banks shouldn't need to turn to the government for capital. The government should have issued convertible shares that gave the right to the government to automatically share in the gain in share price.
Whether we were cheated or not, the banks now have our money. The next Congress will have two major tasks ahead. The first is to make sure that if the taxpayer loses on the deal, financial markets pay. The second is designing new regulations and a new regulatory system. Many in Wall Street have said that this should be postponed to a later date. We have a leaky boat, some argue, we need to fix that first. True, but we also know that there are really problems in the steering mechanism (and the captains who steer it) - if we don't fix those, we will crash on some other rocks before getting into port. Why should anyone have confidence in a banking system which has failed so badly, when nothing is being done to affect incentives? Many of those who urge postponing dealing with the reform of regulations really hope that, once the crisis is passed, business will return to usual, and nothing will be done. That's what happened after the last global financial crisis.
There is a hope: the last financial crisis happened in distant regions of the world. Then it was the taxpayers in Thailand, Korea and Indonesia who had to pick up the tab for the financial markets' bad lending; this time it is taxpayers in the US and Europe. They are angry, and well they should be. Hopefully, our democracies are strong enough to overcome the power of money and special interests, and we will prove able to build the new regulatory system that the world needs if we are to have a prosperous and stable global economy in the 21st century.
Joseph E Stiglitz is university professor at Columbia University and recipient of the Nobel memorial prize in economic science in 2001. He was chief economist at the World Bank at the time of the last global financial crisis.
Posted by Jesse at 10:12 AM :verbeug
...vielleicht liest Herr Roth :dumm was Herr Stiglitz zu sagen hat :supi
Thu 16 Oct 2008
Volatile Like Whoa
Posted by alyx under hank paulson , markets
Above, Hank Paulson checks out some intraday action. (The more stoic Bernanke first contemplates Hank’s shoes, then daydreams about a sandwich.)
Change: 401.35 (4.68%)
Day's Range: 8197.67 - 9013.27 :eek
Nationalbank druckt Geld, um UBS- Schrottpapier-Fonds zu finanzieren
Die Eckdaten der Rettungsübung von Bund und Nationalbank sind einfach. Die UBS lagert für maximal 60 Milliarden Dollar faule Wertpapiere an eine Auffanggesellschaft aus, die von der Nationalbank kontrolliert wird. Die Auslagerung der Schrottpapiere reisst ein Loch in die Bilanz der UBS, das die Nationalbank mit verzinslichen Darlehen von maximal 54 Milliarden Dollar wieder auffüllt.
Pikant: Die Auffanggesellschaft hat ihren Sitz auf den Cayman Islands:rofl. Laut Nationalbank-Direktor Thomas Jordan war es in der Schweiz unmöglich, einen Auffang-Fonds innert Tagen zu gründen.
Bleibt noch die Frage: Wo holt die Schweizerische Nationalbank bis zu 54 Milliarden Dollar her? Die Reserven will sie nicht angreifen, aus Angst vor einem Aufschrei im Lande. Also bleibt nur die Beschaffung in Etappen.
Die erste, für die Anschubfinanzierung nötige Milliarden-Tranche schafft Roth aus dem Nichts.:p Als Notenbanker kann er das. Die Notenpresse anwerfen, nennt man das im Volksmund. Die Franken-Milliarden tauscht die Nationalbank dann bei der US-Notenbank in New York gegen einen Dollar-Kredit, für den sie Zins zahlt. Der Dollar-Kredit fliesst an die UBS, die im Gegenzug die erste Tranche Schrottpapiere bei der Auffanggesellschaft abliefert. Alle weiteren Milliarden-Tranchen muss die Nationalbank am ausgetrockneten Kapitalmarkt auftreiben, gegen Zinszahlung. (Wieso? Immer schön weiter drucken Jean-Pierre!)
Washington has now been replaced by Benedict Arnold
-> Posted by butters @ 1:12 am on October 17, 2008
In den USA ist der Name "Benedict Arnold" ein Synonym für einen hinterhältigen Verräter; man sagt, dass Jungen nur äußerst selten auf den Namen Benedict getauft werden.
(goldrunner) Oct 17, 00:52 I don't think the deflation scare "got out of hand." Even in the 70's the similar move in the Dow, for instance, would be down somewhere South of 7,000. They really needed a level low enough to "burn up" some financial structures that they could not allow to stand. The walls have eyes, you know. Much of this is a purification of the financial sector, but combined with financial ethnic cleansing, if you will. I also think their timing was set for the usual bottom in the 3rd week of October. Anything that does not fit "normal cycles" stands out as too obvious......or maybe too difficult to perform. Just toss a few deflation bones to the dogs and ring the Pavlovian Bell................Ding, ding.
Other comments/ questions........Yes, a big question concerns what other countries like China might do. Will their dollar holdings continue to swell because if not, it might not take long for those dollar holdings to become rather unimportant in the scheme of things as dollar inflation continues to ramp up. China has moved to other places like Africa to find much of the metal it needs.
In terms of the lack of the US producing much of anything, one of the saddest things I ever heard was when we started calling ourselves "service economy." Sounds like a bunch of hookers to me, and after watching the derivative meltdown, I guess it probably fit. Still, when one looks at the issue of loss of manufacturing of "things" along with the fall in production of resources like oil- I got a feeling that a good portion of that fits in long-term cycles in different ways. In fact, it seems that on the other end of manufacturing and producing lies the "Money-changers vig"- paper wealth creation with no real work (or worth) all without the need for such superfluous things as investing in capital. In fact, in all of the paper trinket exchange, the "derivative" has to be the feather in the paper cap.........the "ultimate protection" that became the ultimate risk. If we'd just quit getting smarter and smarter...........
....aus dem heutigen TagesAnzeiger :rolleyes
Spreads Between the Central Commodity Markets and Market Prices Continue to Widen
One of the hallmarks of the centrally-planned economy is a discrepancy between prices on paper, and prices in the marketplace. The examples of this are all too familiar to students of the economy of the former Soviet Union.
For whatever reasons, the US is beginning to go down that path, and perhaps shockingly so. We think a great deal of this is a temporary market dislocation overall as funds unwind positions under duress.
However, in the case of silver, the huge short positions by three banks suggest this is central planning and price fixing, not price discovery tied to market demand.
Silver: Gap Between Paper and Physical Prices Widening Daily
The logical question is "why don't these large dealers simply purchase contracts on the COMEX and stand for delivery?"
One factor is the incremental cost of fabricating the large bars from COMEX into forms more palatable to the retail market, ie. 100 oz, 10 oz bar and 1 oz rounds.
Another could be the anecdotal stories of COMEX reluctance to settle in delivery, and pressuring traders to accept 'cash.'
A potentially explosive situation worth keeping an eye on, for sure.
We wonder in what other markets this condition might repeat. Gold looks likely. Oil? Housing?
Where does statism end once it becomes comfortable with setting market prices, as in the Wage and Price Controls of the 1970's which so many have forgotten about today.
Are the large commodity producing nations allowing the bank cartel to set the prices at which they can sell their goods? Strange, and shame on them if they do.
Its a Brave New World, with many vestiges of the all too familiar.
Posted by Jesse at 2:46 PM :verbeug
16 October 2008
Neither a Borrower nor a Lender Be: Banks Getting their Daily Fix from the Fed
Oh yes. This will surely work.
Keeping the insolvent Morgan Stanley and Goldman Sachs on life support, and paralyzing an entire economy and its banking system to cover their embarrassment.
Banks borrow record $437.5 billion per day from Fed
Thu Oct 16, 2008 5:14pm EDT
NEW YORK (Reuters) - Financial institutions ran to their lender of last resort for record amounts of cash in the latest week, under extreme pressure from the worst global financial crisis in a generation, Federal Reserve data showed on Thursday.
Banks and dealers' overall direct borrowings from the Fed averaged a record $437.53 billion per day in the week ended October 15, topping the previous week's $420.16 billion per day.
Some analysts are concerned that banks' dependence on Fed lending might become long term and difficult to change.
"The banking system is going to become addicted to this very cheap money. Unwinding it will be very difficult," said Howard Simons, strategist with Bianco Research in Chicago.
"We have effectively allowed the central banks to disintermediate the banking system. Why would I want to borrow from you if I could do it with the central bank, because they can always print it up and say 'here'...and they are in the business now of making sure I stay in business," Simons said.
Primary credit discount window borrowings averaged a record $99.66 billion per day in the latest week, up from $75.0 billion per day the previous week.
Primary dealer and other broker dealer borrowings were $133.87 billion as of October 15, versus $122.94 billion on October 8.
"Other credit extensions", mostly reflecting loans to insurer AIG, were $82.86 billion as of October 15, versus $70.30 billion as of October 8.
The Fed's lending to banks to enable them to purchase asset-backed commercial paper from money market mutual funds was $122.76 billion as of October 15, versus $139.48 billion on October 8.
Proceeds from the U.S. Treasury's sales of Treasury bills in the Fed's supplementary financing account, which are helping to fund the Fed's support of financial institutions, were $499.13 billion as of October 15, versus $459.25 billion as of October 8.
Posted by Jesse at 9:31 PM :verbeug
....finde ich wieder einmal sehr gut - in manchen Foren findet man wirklich helle Köpfe :supi ob es jetzt genau so ist muss eh jeder selber für sich entscheiden - und lesen gehört eben auch dazu ;):hihi
Of deflation, deflation scares....and Dollar whims......
(goldrunner) :verbeug Oct 16, 20:39
It is rumored that a great trader once said, "If I could only see past the tip of my nose.....with both hands."
The question, here, is whether we are in a true deflationary environment or whether we are in a market panic created by fear of the deflation in the financial sector. The real answer at this point is hard to know for sure since both situations look the same in terms of market selling, though we are getting close to the time when the answer will be obvious.
Back in 05 and 06 when I worked on the LT fractal expectations into the 4th quarter of 2008, that work was based on this being a "panic", but I still had my targets in the Dow down to below 7000 for a new low since 2000.......with a sharp drop for Gold and the PM stocks into this deflation scare bottom. I was using the Gold chart from the 70's to work off of, and in the 70's at this point Gold dropped down to re-test the "historic highs" so 740 would fit pretty nicely. I was also working off the Dow chart of the 70's for the expected low below 7,000.
A "deflationary environment" and a "deflationary panic" are similar in that the market will drop with investors tossing everything out the window. This is because in both cases the "investor psychology" is exactly the same. The two are different in that in a "deflationary environment" we have an environment that will not change for a long time, like many years to a decade. In a "deflationary panic" we have investors who are not processing true reality of the situtation short-term so they are throwing everything out in a shorter-term cycle at odds with the real fundamentals of the market.
Now, I know that the many will read this to this point and say, "Aha! GR, we are in a real deflationary environment because look at all the bad debt out there- look at the derivative problems- look at the funny nose on Bennie's face." Well, when we are talking about a long-term "environment"- we are talking abot the rocks and trees and air around you- not something that can change rapidly in the short run, then change back. If you look at any true deflationary environment, you are talking about currency deflation. The environment might start with massive debt, but the currency is strong and at new highs from the get-go and as the market starts to sharply tank the currency just keeps going higher....and as the market continues to tank, the currency just keeps on going higher and higher.......as everybody sells everything to get their hands on dollars to pay their bills, etc. That is NOT what we have here. The "true market top" in the Dow was in 2000. Shortly thereafter, the Dollar started to plunge, falling from around 120 down to around 72. The new high in the Dow was a "false high", not coming from increased buying power of the Dow, but of a lower buying power based on a devalued currency. (See the chart of the Dow in the 1970's for the same situation.) Thus, the chart of the Dow:Gold shows no new top after 2000, but a continually falling chart graph. The recent run higher in the US Dollar is but a blip for about 10 points from about 72 to about 82 (as also seen in the 70's scenario.) In fact, even most of the Dollar blip upward came BEFORE the real panic in selling in the markets- not simultaneous with the selling panic. There was a reported CB intervention in the Dollar that created the bulk of it. If we had a true deflationary environment unfolding, I'd expect the Dollar to be rocketing back toward new highs, but no, the Dollar is in a gazillion year downtrend at this time........only a short-term chart distortion caused by an intervention to create doubt and slow things down. The Fed has already announced the Dollar inflation to come in massive terms, including changing laws to make it happen.
With a "panic" markets will usually not complete until the "cyles" are complete as so many traders look to the cycles to trade, and as so many traders have investors on the run in a blind momentum panic move. It seems to me that the momentum bottom for the historic down cycles in the markets comes in the 3rd week of October- usually between the 18th and 25th...on a Monday into a Tuesday. The truth is that investors once in a panic just get scared and start selling as the whole thing steam rolls downward, creating margin calls for many others. The pressure from the margin calls prevents those who might be looking at the real fundamentals at hand from holding investments they think will do well into the future, as they are forced to sell what they can sell to stay solvent. Such is the investing life of today with margin.
In the background of this deflation scare, the Fed has announced the largest Dollar inflation in the history of the galaxy. In the background of this deflation scare, the Fed and Treasury has gotten a Bill passed that guarantees they can create the largest Dollar inflation ever in the Galaxy. In that same background the Treasury has take massive debt that was marking the insolvency of financial institutions onto its books. This WAS an issue of insolvency versus the idea of lack of liquidity, but that is changing rapidly as the Govy takes the bad assets on its books and as the Govy takes partial ownership in the offending financial sector. Once it has done that, then you must realize that the govy is backed by the full printing ability of the Federal Reserve. A Central Bank can print all it wants so it cannot go bankrupt. Since the Central Bank will print whatever it needs to to back the govy.........do you really want to invest in the US Dollar under this scenario? The Fed and Treasury want the Dollar lower, and they will get it in the long run. They now have complete power to print and to monetize anything they want.
Back around USD 73 or 74 when some of us would note that the Dollar rise is just going to be a blip, some short-term traders got all excited when the dollar started to break above that level. Our answer was "So what?" It is only a "Blip." It is still only a blip becausw we were citing LT charts for the Dollar- something many short-term traders cannot fathom- anything over X number of months. Yet, the USD still sits on a cliff.
During a panic anyone but a short-term trader must step back and take a look at what the real environment is for the next few years. Is that environment likely to be one of Dollar inflatioin or one of Dollar deflation? The Dollar trend LT and IT is down. The charts of the Fed's balance sheet has exploded upward as the Fed has recently gotten approval to print to the Heavens. That is the basics of the fundamentals for the Dollar going forward. I don't know about you, but with the Fed and Treasury doing what they are doing, my expectations are that this will end up being the "deflation scare" I'd suggested a couple of years, ago, into this time frame. If that it true do the "Dollar Inflation" being the correct expectation, then I also expect Gold, Silver, and the PM stocks to continue to track the movements of the stagflationary 70's.......including the Dow, BTW. Thus, over the next 4 to 6 years, I'd expect Gold to run up to 3,000 or 5,000, or 8,000 or even 50,000- depending on the Dollar inflation that is starting anew after a short break. In the 70's the one PM stock index I recently found with data from the 70's showed this same sharp retracement in that PM stock index at this juncture, but after it was over that PM stock index moved up to around 17 times the previous high when the PM parabola took effect. (These are historical facts.) After this little blipin the Dollar in the 70's chart, the Dollar completely fell off the cliff. Gold ran back to new highs- probably to 1250 to around 1500. After the Dow plunged, then global competitive currency devaluations took over giving some support to the USD on the chart. Somewhere there after, Gold continued up into the parabola.
So, you tell me- What is the Fed going to do in terms of the Dollar? If they are going to ramp up the printing, then I want to be long the PM complex across the board. If they are not going to ramp up Dollar printing, then I want to be in Gold, Dollars, and Bonds. Personally, I think that second option is completely laughable so I was buying PM stocks today.....looking for great bargains into next week......then possibly into the retest of final bottom in about 30 days. Personally, I think it will fall under the guise of a re-test.
UBS: Weiterhin Boni in zweistelliger Millionenhöhe :dumm
Auch nach dem Eingreifen des Bundes und der Nationalbank sollen einzelne UBS-Banker in den Bereichen Investment Banking und Hedge Fonds laut UBS-Verwaltungsratspräsident Peter Kurer weiterhin Boni in zweistelliger Millionenhöhe erhalten.
Speaking Of Hedge Failures
Posted by Jason under Uncategorized
On Wednesday, a mysterious financial website that no one is naming posted a rumor that Citadel was about three seconds away from being sucked into a vortex of bankruptcy that would surely kill us all. This was up for about twenty seconds before being pulled, which on the internet is long enough for everyone to read it and tell three friends and cause a nationwide panic. So they’re not actually going under, which I guess is good for the market or something.
But! Citadel’s CEO, wunderkind Ken Griffin (co-star of TV’s Family Guy) sent a letter to investors explaining how their largest fund lost perhaps as much as 30 percent on the year, which is kind of a lot. Griffin founded Citadel at the tender age of 22, eighteen years ago, and is pretty much the smartest man around when it comes to this kind of thing. So imagine how funny it was when his letter included the following nugget of wtf:
Our performance reflected extraordinary market conditions that I did not fully anticipate, combined with regulatory changes driven more by populism than policy… Regretfully, I did not foresee the financial disaster that was to unfold in September.Really, Kenny? You didn’t see the subprime bottom falling out, credit drying up, trillions of dollars of pretend money disappearing back into the void from whence it came, the impossibly intermingled global economy crumbling, retail banking/investment banking/insurance companies imploding when all three of their business arms ate the same crap sandwich and asked for seconds, and the looming spectre of the credit card market literally destroying the entire financial sector? How much, exactly, are you paid to forsee all of those things and more, and protect your clients’ dollars from it? Oh, that’s right. $3.7 billion.
Registriert seit: 25.05.2008
Nicht mehr zu helfen, läuft alles über die FED genau wie die EZB-Swaps, die Japsen, die Chinesen - ALLE WÄHRUNGEN SIND DAMIT DIREKT VOM DOLLAR bzw. VON DER FED ABHÄNGIG! ....und können damit von der FED auch geschrottet werden, wenn die FED das will.
...ob ich wohl ein Untergeschoss eröffnen muss :confused für lange ziemlich scharfe (ob zu Recht oder Unrecht :confused:eek:nw) Kommentare - ich denke einfach für später ist es interessant wie viel man damals "gewusst" hatte/hätte wissen können :rolleyes oder auch falsch lag :o
manchmal funzen die Links nach einer gewissen Zeit eben nicht mehr :gruebel ich stell's mal vorläufig rein:
Wall Street Monsters & Meat (You)
Jim Willie CB
Jim Willie CB is the editor of the "Hat Trick Letter"
Oct 17, 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.
The tag team of JPMorgan as the monster and Goldman Sachs as its harlot represent a powerful pair that is more responsible for destroying the entire US financial system than 95% of the American public has any awareness. The colossus of JPMorgan is a monster, a predator, nurtured by pond scum. It has gobbled up Chase Manhattan, Manufacturers Hanover, Chemical Bank, Bank One, and more over the past two decades. Their profound presence in keeping the USTreasury Bond yields down can never be understated. They do so by managing 85% of the credit derivatives on the planet. They distorted usury prices, as in price of borrowed money, thus aggravating the LIBOR (London InterBank Offered Rate) market in a very visible manner. The oblong usury prices have contributed mightily to the destruction of the USEconomy itself, created bubbles, killed jobs, and wrecked savings. The ugliest hidden activity for the JPMorgan monster is to manage the Bank of Baghdad, where they manipulate the crude oil price, where drug trafficking money is funneled from Afghan sales, under management by the USMilitary aegis (guys with no uniform stripes or markings). Maybe such illicit money offsets Credit Default Swap losses, making America strong for freedom and liberty. Goldman Sachs is clearly the investment banking agent for the USGovt, given the privilege of insider trading in unspeakable proportions. They manage the Plunge Protection Team efforts to intervene in financial markets, making America strong for freedom and liberty. The new kid on the block is the FDIC. The Federal Deposit Insurance Corp is steering fresh meat into the corralled JPMorgan stockyards for slaughterhouse feeding. The label of harlot might be too kind, especially from the perspective of senior bond holders. But JPMorgan requires fresh meat (capital) periodically, thus making America strong for freedom and liberty. Nevermind the fires caused after its hearty meals and flatulence.
This article discusses the JPMorgan monster, its behavior, and teeth revealed. Robb Kirby (see his website, click HERE) often covers JPMorgan illicit behavior. This article discusses banking system realignments to destroy savings accounts owned by the people, and the Coup d'Etat just completed. The criminals on Wall Street have taken full control of the USGovt financial management, with blank check written by a thoroughly intimidated USCongress, deceived steadily and easily. Threats and intimidation are central to the successful coup. The Ponzi Scheme has been revealed, even as the frail and tattered Shadow Banking System has been revealed. The key to the bailouts is its continued Top Down approach, which favors the Ruling Elite and denies all but crumbs to the people, who have been subjected to a foreclosure revolving door on mortgage loan assistance. Since nothing has been solved from this approach, a total systemic breakdown is assured, whose climax will be the current Administration and the Wall Street executives in charge of the criminal syndicate riding off into the sunset in retirement. Rome burns. Much more detail is provided in the upcoming October report due this weekend. The theme is this subset synopsis article is of criminality, deception, monster exploitation, market corruption, and the collapse of a failed system, whose crescendo represents the greatest financial crimes ever witnessed in modern history. Americans do it big! The proprietary Hat Trick Letter covers much more of recent events, interpretation, and analysis, but here, focus on impropriety.
THE MONSTER, ITS BROKER & HARLOT
JPMorgan will require fresh asset meat every several weeks in order to survive, but the process will result in a sequence of severely damaging CDSwap fires. Perversely, the FDIC is their investment banker agent. Two mergers of questionable nature highlight the altered role of the Federal Deposit Insurance Corp (FDIC), which no longer protects bank depositors or their investors, but rather serves JPMorgan Chase. When Bank of America merged with Merrill Lynch, a trend started, one that exposed private stock brokerage accounts. Officially they can be legally borrowed across subsidiary lines. The FDIC averted a failure of Merrill Lynch without the credit default implications. The other event was more blatant, as the FDIC steered Washington Mutual out of bankruptcy failure and into the JPMorgan slaughterhouse. Inside its chambers, JPM gobbled up the WaMu deposits and benefited from ratio improvements. Senior bond holders were crushed, fully denied due process from bankruptcy. The FDIC has become an ugly investment banker lookalike, serving JPM and not the US public. The FDIC owns a pitifully small $45 billion in funds available for bank bailouts, at June count. When the dust clears a year or more from now, many multiples more will be necessary for many bank failures.
The path of JPMorgan growth into a FRANKENSTEIN took radical changes in course after both the failures of Lehman Brothers and recognition that Fannie Mae & Fannie Mae had to be taken over by the USGovt. To halt the run on their bonds, the USGovt acquired the entire F&F Cesspool. The impact hit the Credit Default Swap market immediately. AIG had been weakened one week earlier from the technical default of Fannie & Freddie, which resulted in broad CDSwap payouts. Ripple effects from the Lehman Brothers failure that followed were deep and broad throughout the system, killing AIG. The Wall Street central harlot (Goldman Sachs) advised the USGovt to assume full control and risk of AIG, as GSachs avoided $20 billion in sudden losses in the nick of time, a pure coincidence!
The entire episode with Wells Fargo bidding for Wachovia, in competition from Citigroup, is steeped in comedy with vampire stars. The grapevine in Washington and Wall Street passes word that the Citigroup versus Wachovia wrestling match was actually a sponsored backdoor bailout attempt to save Citigroup, not just Wachovia. Again, the FDIC was the matchmaker. My term has been 'Dead Marrying the Dead' which still holds true, since Citigroup has been dead for one year. Under the original Citigroup proposal, the FDIC had arranged for guarantees of $42 billion for Wachovia debt by the USFed. The new Wells Fargo deal enabled the US taxpayers to get off the hook. The reversal by the FDIC to serve the public has caused gigantic Wall Street problems, as Citigroup now finds itself in a position more perilous than anyone believed. This battle has flip-flopped once, and might again. Citigroup would probably have died if not for the USGovt purchase of bank stocks.
THE TEETH OF THE MONSTER REVEALED
JPMorgan is a monster predator at work, hidden from view. After the Fannie Mae experience, covering their giant raft of CDSwap contracts, making huge payouts, JPMorgan was close to a bankruptcy. They needed to feed off another bank, to consume private deposits and thus shore up the balance sheet. Lehman Brothers was let go to fail, but its failure would surely trigger a gigantic wave of credit market fires. The Lehman CDSwap resolution has cost roughly $300 billion, paying 91 cents per dollar of coverage on their failed bonds. The Wall Street Powerz permitted Lehman to fail, so as to prevent a JPMorgan failure, thus risking that the fires caused could be contained in CDSwap fallout. The irony is that JPMorgan undoubtedly suffered considerably from that fire in fallout. Now JPMorgan might need another Wall Street failure, for to consume another block of assets, but with yet another ensuing CDSwap fire. JPMorgan is a monster predator at work, soon hungry again. It might be eyeing Morgan Stanley. We might discover a failure in an unexpected place, like a big insurance firm, whose sector condition is not well advertised.
With each big bank failure, whether a commercial bank or investment bank, heavy damage is done to the system. The CDSwap destruction is mostly hidden, with large pillars burned out. We the people hear of the destruction only if and when a major bank fails as a result. No death, no news, however but with potentially significant hidden structural damage. As financial firms pay out vast sums on CDSwaps as in the Lehman case, and the Fannie Mae case, and the Freddie Mac case, the system bleeds capital. Lending suffers. The sequence corresponds to a powerful vicious cycle. JPMorgan will need more deaths to survive, but each death causes more deadly CDSwap fires. JPMorgan is a monster predator at work, which leaves fires on pathways where it last stepped. The best analogy is that CDSwap contract payouts from bond failures are like mini-Hiroshima events that might lead to a bigger such event. Ironically, to save JPM the financial system must destroy the shadow banking system centered in New York City, since Wall Street firms, plus Bank of America are at its center. The system lacks disclosure and transparency, just like Wall Street likes it.
Permit the pathogenesis to proceed further, and the majority of Western bank system must be burned in order to leave JPMorgan as prominent survivor to rule over a scorched empire. This process is a sick consolidation. The bank conglomerate is a major crime syndicate colossus, and center of the drug traffic money laundering, coordinated by security agencies, fully condoned by the US Federal Reserve itself. The AIG story is nowhere complete, the latest being their expensive parties. AIG has caused major complications, another monster that will resurface periodically at feeding time. Personally, my wish is to see the RICO law brought forward, at least to deposit the monster in a cage. In done my way, not a single additional USCongressional bill would be approved and granted for a bailout or rescue without rapid investigation, prosecution, turn to state's evidence, asset seizure, restitution, and imprisonment for dozens of Wall Street executives, starting with Hank Paulson.
STOCK MANIPULATION WITH DEEP MOTIVE
Few analysts, pundits, or anchors are aware of the mammoth conflict of interest involved with the USTreasury Bond sales required to pay for all the bailouts. JPMorgan, with the essential aid of Goldman Sachs, plot to bring down the DJIA index and the S&P500 index whenever the USTreasury conducts auctions or needs Congressional passage of key bailout bills. They have sold $194 billion of Cash Mgmt Bills (CMB) in the last two weeks, today $70B, tomorrow another $60B. The big stock declines seen recently work to the BENEFIT of the USTreasury and USFed as agent for auctions. TBill yields are down near zero, in case you have not noticed, with principal prices corresponding almost as high as the bond permits. The USGovt is conducting auctions for TBills at top dollar prices, when its credit rating should be caving in radically upon downgrades. These USTreasurys are destined to enter default at a later date, where the loss to foreign investors will be maximized. Most of the US public has savings dominated by stocks, with little in bonds. So the US public is being fleeced, coming and going, since even money markets contain toxic mortgage bonds. Look for the stock market decline to come to a surprising end when the USGovt has completed the majority of their planned emergency supply sales via auction.
The Wall Street tactics have recently turned more vicious and devious, actually creating volatility, producing fear for political purpose. They accuse hedge funds of driving up the crude oil price, rendering great harm to the USEconomy and US citizens. So they urged unsuccessfully the Securities & Exchange Commission to force hedge funds to reveal their speculative positions. The Wall Street thieves and conmen wish to learn details on hedge fund positions so as to target them illicitly. In a queer twist, JPMorgan has benefited from an interesting double kill. They exploit hedge funds, wreck them, then encourage them into the fold at JPM in brokerage accounts, where their private accounts are rendered vulnerable under the new USFed rules. JPMorgan is a monster predator at work, which is permitted to manipulate markets and clients with total impunity.
There is one more detail. Lest one forget, Goldman Sachs was exempt from the short rule restriction placed on a few hundred financial stocks traded. The reason had something to do with market stability and integrity assurance! Goldman Sachs clearly profited from the ups & down in the Dow and S&P500, lifting stocks after Congressional agreements, pulling them down before those agreements. JPMorgan and Goldman Sachs profit handsomely when the USGovt Plunge Protection Team pushes the stock indexes up with their usual methods. Of course JPM and GSachs are the managers of the PPT efforts. YES, IT IS TIME TO PUKE NOW!!!
HIDDEN USGOVT COUP BY WALL STREET
The USCongress has been subverted by intimidation and ignorance, maybe bribery. Regulators and law enforcement bodies are mere accomplices. The entire US banking system has undergone an unprecedented grand nationalize initiative, including the financial system, when considering the mortgage and insurance giants. The total bailouts are huge when put into perspective. This is a hidden coup, complete with deep fraud, corruption, and ruin for both prosecutors and whistle blowers. The USDollar is caught in the middle of a black hole scrambled with fraud. Paulson is the new Chancellor of US Inc, Bernanke the new Currency Lithography Manager, and Sheila Bair the Investment Banker (a la Goldman Suchs). Paulson assumes all powers over the financial state from the president, via the banking industry control. The government bailout redemption of $trillion past fraud closes the loop. Bernanke manages all efforts to use printed money for the purpose of buying worthless counterfeited and fraud-laced bonds, buying commercial bonds and posted collateral among businesses, as well as making printed paper products available to foreign central banks in relief of past fraud. Bair will act as the director of slaughterhouse traffic for JPMorgan, which needs a steady supply of bank deposits to offset their destroyed balance sheet from continued credit derivative implosion, thereby betraying the chartered FDIC pledge to protect bank depositors and senior bank bond holders through liquidation procedures, with full recognition of expedience. Hail to the king, long live the king! The US public seems so dumbstruck that it cannot demand even full disclosure of the process, let alone private offshore bank accounts for the new leaders of the successful coup.
The coup formalizes a climax to a Ponzi Scheme. A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, without any product or service bearing true value delivered. With the ongoing steadfast support offered by Alan Greenspan, they were able to maintain an incredible Ponzi scheme. They sold financial toxic waste products in the form of Mortgage Backed Securities (MBS), Collateralized Debt Obligations (CDO), Structured Investment Vehicles (SIV), Unidentified Financial Objects (UFO), and Credit Default Swaps (CDS). My favorite remains the UFOs. The corruption of politicians in Congress enabled the process, with relaxed guidance by the Financial Accounting Standards Board (FASB). The two key ingredients for the Ponzi Scheme are a mythological ideology and a high priest to endorse the game from a credible pulpit. Alan Greenspan claimed legitimacy of the US banking system, blessed credit growth and fractional bank practices as beneficial, and praised risk pricing systems using credit derivatives as sophisticated. The high priest used to be Greenspan, but now a tag team has replaced him. Hank Paulson is the spearhead for the great coup of the US financial system. Usage of short restrictions rules has been key to both instilling instability at necessary times, and raiding hedge funds. USFed Chairman Bernanke swaps USTBonds for any piece of bonded garbage known to mankind. Mammoth placements of leveraged trades by Wall Street firms make for some of the most grotesque insider trading in US history.
DECEIT & INTIMIDATION
The lies, deceit, backroom pressure, and fleecing of the American public is deep. Take the Emergency Economic Stability Act. Most of the initial $250 billion outlay was not devoted to American bankers, but rather to foreign bankers, primarily in Europe and England, and to purchase preferred US bank stocks. The US public was not told about this redirection, which constitutes misallocation, misappropriation, and fraud. Tremendous backroom pressure was exerted at every step. The underlying assets involved in swaps do not even have to be US-based mortgage bonds. The formerly submitted Paulson Manifesto was revived in a power grab, complete with considerable infighting and squabbles, since Morgan Stanley was given favor. The usage of funds to buy investment stakes in the giant US banks is yet another direct Fascist Business Model tactic, assisting banks close to the power center, yet reeking with corruption. The sickening irony is that they have no more money to disseminate and distribute. They cannot reveal their lies until they formally request more Congressional funds. Much discussion has come that the USGovt should adopt the Swedish model in the resolution of the current crisis. Not in a New York minute!! That would require heavy stock and bond losses, and more transparency of scum. Interestingly, the market discounts words as worthless, while bailout actions fail to produce even a positive reaction for a full day, until Monday last week when the Dow Jones Industrial index rose over 900 points. That was clearly Wall Street engineering a profitable short cover rally. Check S&P futures positions beforehand, if you can. The credibility of the USFed is close to being destroyed. On October 15, the same Dow Jones index fell over 700 points, almost 8%. Even the global rate cut was rejected by stock markets, a major insult.
Intimidation of the USCongress has been huge and powerful, similar to when the Patriot Act was passed in 2002. The Congress was actually threatened by martial law in the cities of the United States if the big bailout package was not passed two weeks ago! This was not reported on CNN or CNBC, but C-Span did cover it. The mobilization of the USArmy for civilian control is well known in the past couple weeks. See the Third Brigade back from combat duty in Iraq. This account came from Rep Brad Sherman of California. To achieve supposed financial stability, the nation succumbed to totalitarianism by Wall Street thieves, conmen, fraud kings, and criminals. Instead, the bailout only covered up $trillion fraud. My position has been very stable and consistent, that such tactics are typical characteristics of the Fascist Business Model. The state merges with the large corporations, who proceed to terrorize the citizenry after unspeakable protected corruption and theft. To object is to be labeled unpatriotic!
TOP DOWN SOLUTION FAVORS THE ELITE
The top-down approach used to date aids the wealthy bankers, while the homeowners are denied aid. That aid is promised but rarely arrives. The fundamental problem here is that billion$ are devoted to shore up insolvent banks, to redeem their worthless (or nearly worthless) bonds, and to give a giant pass to the executives. Trust has eroded throughout the system. Banks distrust each other's collateral. The result is that eventually the USEconomy will enter not a recession, not a depression, but a DISINTEGRATION PHASE. Despite Bernanke's studious efforts, borrowing from revisionist history, his liquidity is nothing more than bailouts at the top for the perpetrators of the housing bubble and mortgage debacle. The bank system benefits little inside the US walls of finance. A bottom-up approach might have had a chance to succeed, but a top-down approach is a sham. To expect a top-down solution that actually relieves the housing inventory logjam is insane. That is like feeding a teenager with meals placed inside the human rectum, expecting nutrients to find their way to the rest of the body! The credit mechanisms do not travel upward within the pyramid, but rather in the downward direction, starting with a borrower, a good collateralized risk, and an underwritten loan, when plenty of lending capital is available. The US public has bought this stupid 'Trickle Down' philosophy for years, learning nothing. The USEconomy is on the verge of collapsing. Short-term credit is being denied at key supplier intermediary steps, soon to result in recognized disintegration.
The primary practical objective of this corrupt trio (JPM, GSax, FDIC) is to avoid Credit Default Swap fires, which would bring an end to their reign of terror. This USEconomic failure is in progress and is unstoppable. The 1930 Depression resulted after monumental credit abuse from the bottom up, as hundreds of thousands of people leveraged investments 10:1 with stocks primarily. The 2000 Depression will come after monumental credit abuse from the top down, as hundreds of big financial firms leveraged investments by 7:1 and 20:1 with bonds primarily. The most absurd of all is the CDO-squared, leveraging upon leverage. Total seizures have crippled the banking system. Short-term credit has largely vanished, as letters of credit are routinely not honored at ports in the United States. The panic will continue, especially when supplies dry up.
GOLD & SILVER AWAIT THEIR EXALTED STATUS
We are witnessing the disintegration cited in my recent forecasts. It is a systemic failure, marred by lost confidence and trust in the entire financial system. Expect foreigners soon to pull the rug from under the American syndicates in control. Several key meetings have already concluded, totally unreported in the US press, which occurred in Berlin Germany. Consider it the Anti-G7 Meeting. Implications are profound, and involved the Shanghai Coop Org tangentially, since its member nations possess so much new commodity supply. Consider it the Anti-NATO group. An important and powerful alternative financial system is soon to spring into action, including high-level bilateral barter. Those who expect the current US Regime to continue their financial terror are in for a big surprise.
Expect defaults in the COMEX with gold & silver, whose prices for paper vastly diverge from physical, to the anger of foreigners watching. They hold massive precious metals assets. Disparities now contribute to powerful forces, sure to break the current system. Grand systemic changes come. THE RESULT WILL BE A BREATH-TAKING DISCONTINUITY EVENT.
Ironically, the more inner anguish felt on the falling gold & silver prices, the closer we are to a new financial framework, with the USDollar relegated to a Third World role. A REPLACEMENT GLOBAL RESERVE CURRENCY HAS ALREADY BEEN DECIDED UPON. Its launch awaits the proper moment. The Americans are last to know, as usual. The US leaders are under the illusion of being in control!
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
...und da man ja öfters denken muss mich laust der Affe ;)
WE CREATED VALUE (Art Hogan) zum downer an Wallstreet (CNBC)
...ja - so kann man es auch nennen :kiff
....das ist jezt echt zu lang :schwitz
Welcome back Aurum
-> Posted by Fullgoldcrown @ 8:50 am on October 17, 2008
This guy agrees with you …re Deflation leading to Inflation… good Fiat 101
17 October 2008
Derivatives Losses Hit French Depositor Bank Caisse de Joueur
"You are told that your ONLY job is take as much money from your customer's pocket as you can and put it in your pocket. Then they give you all the crappy little accounts and you hit the phones hard and convince them to buy the stuff all the bigger accounts which are "desk" accounts are trying to sell. You move up to "desk" accounts when you prove that you can sell freezers to eskimoes. Aggressive rookies in derivatives beat the bushes globally to find any smaller unloved accounts and they plug them full of exotic derivatives that were designed to have huge yields and no downside - until the markets become very volatile, that is. Before this is over, we will see that just about every financial firm around the globe is loaded with derivatives."Caisse d'Epargne Had EU600 Million Derivatives Loss
By Fabio Benedetti-Valentini
October 17, 2008 08:07 EDT
Oct. 17 (Bloomberg) -- Groupe Caisse d'Epargne, the French customer-owned bank in merger talks with Groupe Banque Populaire, reported a 600 million-euro ($807 million) loss on equity derivatives after stock markets plunged last week.
The loss occurred at the proprietary-trading unit of Caisse Nationale des Caisses d'Epargne, the lender's holding company, the Paris-based bank said today. The team of about half a dozen people exceeded trading limits in terms of size and risk, said an official at Caisse d'Epargne. (Rogue traders again, les joueurs compulsifs - Jesse)
European stocks last week slid 22 percent, driving the Dow Jones Stoxx 600 Index to its worst week on record, on concern the deepening credit crisis will push the economy into a recession. The equity derivatives losses don't affect the ``financial solidity'' of Caisse d'Epargne, which has more than 20 billion euros of shareholders' equity, the company said. The stock market plunge may have led to losses at other banks.
``Everyone will have incurred big losses because of market volatility,'' said Bahadour Moussa, a consultant specializing in derivatives recruitment at London-based Pelham International. ``A lot of the banks will have positions they can't unwind or shift and that are losing money, and when the time's up, they'll have to publish losses.'' (Everyone was doing it, Maman - Jesse)
Bank Rescue Plan
Banks in Europe and the U.S. are also grappling with the impact of the global credit crisis. The French government this week announced plans to loan as much as 320 billion euros to banks to unlock lending and to spend as much as 40 billion euros on equity stakes in financial companies, if needed.
Caisse d'Epargne and Banque Populaire started merger talks last week, with the encouragement of the French state, as the financial crisis put pressure on banks to combine. The banks are the main shareholders of Natixis SA, the Paris-based investment bank that piled up about 3.9 billion of writedowns tied to the U.S. subprime mortgage market collapse by June 30.
The loss doesn't affect the merger plan between the holding companies of Caisse d'Epargne and Banque Populaire, the official said. A deputy of Julien Carmona, Caisse d'Epargne's head of finance and risk management, has been suspended because of the loss and the bank is pursuing ``sanctions'' against the members of the proprietary-trading desk, he said.
ful story: http://jessescrossroadscafe.blogspo...-depositor.html
..auf der Jagd nach dem Geld geh so vieles unter :(
Video | heute
17.10.2008 Afghanistan: Armut und Hunger nach Dürre
Fri 17 Oct 2008
7 Out Of 9 Banks Agree: Bailout Is A Failout
Posted by alyx under all ur bankz , bailout , fail
Hank, what do you see? Is it a bird? A plane? Maybe, you hope, a helicopter?
Hank, there is an armada on the horizon. An armada of FAILBOATS with your name on them.
(img w/ thx to Erik Skiles)
The banks are admitting they’re not going to loan out this government money. They’re going to sit on it:
So much for that story. A few days ago, when Hank Paulson called the heads of the nine families to Washington and shoved cash down their throats, he announced that the banks would use this new taxpayer cash to lend. They won’t, of course. They’ll hoard it like a starving family who has just been given a grocery cart full of food.From the NYT:
John Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.Jamie Dimon - that’s who I’d bet on as last man standing. No one else. And don’t count on getting that bank loan.
...für die Akten :rolleyes
Your play-by-play for the end game of modern banking.
JP Morgan Pukes
By Tony. Posted on October 15th, 2008 in BREAKING NEWS!
After devouring the rotting carrion of Bear Stearns, JP Morgan was soon in hot pursuit of Washington Mutual. Although it may regret it in the long run, Morgan finally took down the lumbering beast last month. Now the celebrating is over and JP Morgan must once again chuck up billions in write-downs and credit-related losses.
JPMorgan Chase & Co. (JPM) reported an 84% plunge in third-quarter net income amid $3.6 billion in write-downs and $640 million in losses from last month’s acquisition of Washington Mutual as the banking giant saw continued deterioration in its home-lending portfolio.
Then chief executive officer Jamie Dimon opined:
“Given the uncertainty in the capital markets, housing sector and economy overall, it is reasonable to expect reduced earnings for our firm over the next few quarters.”
The uncertainty in the capital markets, housing sector and economy overall was created by the reckless lending habits your bank employed.
Still, he had to add:
“we feel well-positioned to handle the turbulent environment and, most importantly, to continue to invest in our businesses and serve our clients well.”
J.P. Morgan has been well-positioned since the meeting at Jekyll Island, but you are now just like your remaining competitors, positioning yourself to be too big to fail.
JPMorgan - which was vaulted into first place in nationwide deposits following its acquisition of beleaguered mortgage lender WaMu - reported net income of $ 527 million, or 11 cents a share, down from $3.37 billion, or 97 cents a share, a year earlier.
And there you have it. That’s just what we’re talking about. Size and market share going up, profits and profitability going down! Now you may be inclined to wait and give it a chance, but that would mean giving WaMu a chance to regain life and carry a profit. In that case, you may as well believe that mortgagee’s are going to pay the quickly-resetting option ARMS that WaMu gave Morgan. Or perhaps you might believe that housing prices will appreciate soon. Or you may wish to place your faith in Santa Klaus or the Tooth Fairy. Does JP Morgan believe it?
Credit-loss provisions more than doubled from the prior year to $3.81 billion and rose 10% from the second quarter.
It’s ok, JP Morgan, we don’t believe it either. But wait, this guy just won’t quit:
As the banking landscape has rapidly changed amid the financial crisis, JPMorgan has been able to greatly expand, with its strong balance sheet allowing it to take advantage of the crisis. Twice this year, JPMorgan got large companies at discount prices as buyer of last resort. And Tuesday, it was named among nine banks the U.S. government said it would give capital injections as it tries to revive the banking sector.
In other words, the balance sheet is weak and carrying Washington Mutual weakens it even further!
Furthermore, let’s get one thing straight. JP Morgan murdered Bear Stearns. They were not a buyer of last resort.
Washington Mutual had other buyers, TPG Capital in particular, but pressure from Paulson made it clear that WaMu belonged to Morgan.
JP Morgan’s strongest financial asset is the certainty that it will be bailed out:
The cost of protecting corporate bonds from default fell in anticipation the Bush administration will announce plans to invest in nine U.S. banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc.That’s another nice little ancillary benefit of the investment at Jekyll Island, but it doesn’t make a stronger balance sheet.
And just as JP Morgan himself once publicly denounced the Federal Reserve Act of 1913 while he privately funded and supported it, Jamie Dimon rails against the political establishment which has just saved him. Let’s watch him nip at the hand that feeds him:
The top executive of JPMorgan Chase & Co. on Tuesday railed against the nation’s political leadership — but didn’t name names — saying government too often proposes solutions that appeal only to “the madness of the crowd” while letting complex issues such as energy policy go unresolved.
“We’ve seen this consistently — an oversimplifying and casting aside of issues and facts,” Jamie Dimon said in panel discussion on leadership issues at Harvard Business School, where Dimon earned an MBA in 1982.Now you want to puke don’t you? Dimon who happens to be a Federal Reserve board member, obligingly admitted that there was blame in the air.
“There were a lot of legitimate complaints,” Dimon said, pointing to complex investment vehicles that obscured the risks many banks faced from the rise in mortgage delinquencies.
Many of those are securitized by JP Morgan Chase.
There also was dishonesty, he said.
They don’t call them a liar loans for nothing.
But he singled out energy policy and the nation’s dependence on foreign oil as problems that politicians have been unwilling to tackle in any comprehensive way since an oil shortage shook the nation in 1974.
Dimon advocated taxing oil as it’s pumped from the ground, rather than simply taxing gasoline at the pump.
Pointing the finger at someone else is something your seven year old wouldn’t even get away with.
“There were a lot of people who in hindsight made a lot of money they didn’t deserve,” Dimon said.
Wow. Did he really just say that?!?
I feel nauseous.
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