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lunar 21.07.2008 10:25

Michael Collins: Election Fraud & Tyranny: Part 1

Monday, 14 July 2008, 5:06 pm
Column: Michael Collins

Michael Collins: Election Fraud and Tyranny - Part 1



Banksy"Loser Take All: Election Fraud and The Subversion of Democracy, 2000 - 2008"
Mark Crispin Miller (Ed.),
Ig Publishing, Brooklyn, NY



Mark Crispin Miller's new book, "Loser Take All," identifies and analyzes election fraud, the foundation of extremist power in the United States since 2000. Manipulated elections have enabled everything we've experienced from the Iraq war to the current economic meltdown. None of that would have been possible without the ongoing series of "surprise" wins for extremists and their enablers following the outright theft of the 2000 presidential election.....



Atlanta Journal Constitution - WSB TV Poll, Nov. 1, 2002
Change from Nov. 1 poll to Election Day.
Atlanta Journal Constitution - WSB TV Poll, Nov. 1, 2002
Change from Nov. 1 poll to Election Day.

full story: http://www.scoop.co.nz/stories/HL0807/S00133.htm




Michael Collins: Election Fraud and Tyranny (2)

Thursday, 17 July 2008, 10:44 pm
Opinion: Michael Collins

Michael Collins: Election Fraud and Tyranny - Part 2



From image: "I can't believe you morons actually buy this sh..."
They don't. They're just following the script. That's why Miller calls them
"the servile press." Banksy"Loser Taker All: Election Fraud and The
Subversion of Democracy, 2000-2008"




A 12% victory margin measured on Election Day 2006 was
reduced to 7.6% through the vote counting process. This meant
3 million less votes for Democrats in House races
.

full story: http://www.scoop.co.nz/stories/HL0807/S00177.htm

lunar 21.07.2008 11:05

19 July 2008

Why No Outrage? Remember, Remember, the Fourth of November

Many, many years ago a much younger Jesse had a wise old Boss from whom he learned many things about managing people and a piece of a larger business.

One day The Boss remarked in passing that he did not care when his guys were complaining about small things. He considered it healthy. "Its when they get quiet for a long time that you need to worry. That's that's a sign that something is fundamentally wrong in the company. And when the right spark comes along, all hell is going to break loose."

One slight difference we might have with Mr. Grant is that he seems US-centric in his thoughts. Keep an eye on Europe, specifically Britain. They may show the way ahead.

The American elections will be Tuesday 4 November 2008. Vote.



Why No Outrage?
By JAMES GRANT
July 19, 2008
The Wall Street Journal

Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant

"Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era, but no such voice cries out today. America's 21st-century financial victims make no protest against the Federal Reserve's policy of showering dollars on the people who would seem to need them least......

.......Wall Street is usually described as an industry, but it shares precious few characteristics with the metal-fasteners business or the auto-parts trade. The big brokerage firms are not in business so much to make a product or even to earn a competitive return for their stockholders. Rather, they open their doors to pay their employees -- specifically, to maximize employee compensation in the short run. How best to do that? Why, to bear more risk by taking on more leverage.

"Wall Street is our bad example because it is so successful," charged the president of Notre Dame University, the Rev. John Cavanaugh, in the time of Mary Lease. He meant that young people, emulating J.P. Morgan or E.H. Harriman, would worship the wrong god. The more immediate risk today is that Wall Street, sweating to fill out this year's bonus pool, runs itself and the rest of the American financial system right over a cliff.

It's just happened, in fact, under the studiously averted gaze of the Street's risk managers. Today's bear market in financial assets is as nothing compared to the preceding crash in human judgment. Never was a disaster better advertised than the one now washing over us. House prices stopped going up in 2005, and cracks in mortgage credit started appearing in 2006. Yet the big, ostensibly sophisticated banks only pushed harder.

Bear Stearns is kaput and Lehman Brothers is reeling, but Morgan Stanley perhaps best illustrates the gluttonous ways of Wall Street. Having lost its competitive edge on account of an intramural political struggle, the firm, under Chief Executive John Mack, set out to catch up to the rest of the pack. In the spring of 2006, it unveiled a trillion-dollar balance sheet, Wall Street's first. It expanded in every faddish business line, not excluding, in August 2006, subprime-mortgage origination (the transaction, intoned a Morgan Stanley press release, "provides us with new origination capabilities in the non-prime market, which we can build upon to provide access to high-quality product flows across all market cycles"). Nor did it pull in its horns as the boom wore on but rather protruded them all the more, raising its ratio of assets to equity to the aforementioned 33 times at year-end 2007 from 26.5 times at the close of 2004. Naturally, it did not forget the help. Last year, Morgan Stanley paid out 59% of its revenues in employee compensation, up from 46% in 2004.

Huey Long, who rhetorically picked up where Lease left off, once compared John D. Rockefeller to the fat guy who ruins a good barbecue by taking too much. Wall Street habitually takes too much. It would not be so bad if the inevitable bout of indigestion were its alone to bear. The trouble is that, in a world so heavily leveraged as this one, we all get a stomach ache. Not that anyone seems to be complaining this election season.

James Grant is the editor of Grant's Interest Rate Observer.

full story: http://jessescrossroadscafe.blogspot.com/

lunar 21.07.2008 11:10

20 July 2008

The American Mainstream Media Says "Buy the Financials and Banks"


Good bottom call or siren song for a sucker's rally?

We think its the latter. Right now the banks, especially the investment banks, are obtaining a balance sheet smokescreen cover from the New York Fed.

In the short term we are going to lay off the short side on the financials and watch what happens, looking for a place to jump back on that trade. We won't fight the Fed, but we are not drinking the Kool-Aid either.

Why not buy the financials, just for a trade? It might work. We'd rather buy gold and play our gold-oil cross trade.

The next downdraft, when it comes, is likely to be breath-taking.

What to Bank On - Barron's

Hopes and Hints that Financial Stocks Have Finally Touched Bottom - New York Times

Jitters Ease as Citi, Rivals Show Signs of Bottoming Out - Wall Street Journal


Posted by Jesse at 10:41 AM
http://jessescrossroadscafe.blogspot.com/

lunar 21.07.2008 11:19

Banker Leaves Goldman Sachs To Aid Paulson

By Dennis K. Berman
Word Count: 287 | Companies Featured in This Article: Goldman Sachs Group
Goldman Sachs Group Inc.'s most senior financial-institutions banker, Ken Wilson, is temporarily leaving the firm to advise Treasury Secretary Henry Paulson on how to resolve the country's banking crisis, according to people familiar with the matter.

As chairman of Goldman's Financial Institutions Group, Mr. Wilson has proved to be a big player in capital raisings and reorganizations across ...

http://online.wsj.com/public/articl...8385169563.html

Ken Wilson
http://www.moneyweb.co.za/mw/view/m...15887&sn=Detail

:rolleyes ...warum verlagert man nicht einfachheitshalber das Weisse Haus die FED und den Rest der Regierung in den Hauptsitz von GS :rolleyes

**************************************

http://www.youtube.com/watch?v=4lmwS5p7Oq4

.....we have a safe and sound banking system :rolleyes

lunar 21.07.2008 12:02

SEC issues emergency rule to curb short sales

By Rachelle Younglai
and Emily ChasanPosted 2008/07/15 at 10:51 pm EDT


WASHINGTON/NEW YORK, July 15, 2008 (Reuters) — U.S. securities regulators issued an emergency rule on Tuesday to limit certain types of short selling in major financial firms, including Fannie Mae and Freddie Mac ......

.....The rule will go into effect on Monday, July 21, and last through July 29, although it could be extended to last up to 30 days. The SEC said it will consider rules to address short selling issues across the entire stock market.......

The agency identified the following securities affected by its order:

* BNP Paribas Securities Corp

* Bank of America Corp

* Barclays PLC

* Citigroup Inc

* Credit Suisse Group

* Daiwa Securities Group Inc

* Deutsche Bank Group AG

* Allianz SE

* Goldman Sachs Group Inc

* Royal Bank ADS

* HSBC Holdings Plc ADS

* JPMorgan Chase & Co

* Lehman Brothers Holdings Inc

* Merrill Lynch & Co Inc

* Mizuho Financial Group Inc

* Morgan Stanley

* UBS AG

* Freddie Mac

* Fannie Mae

http://newsdaily.com/stories/n15338...c-shortselling/

....wenn man so grosse Firmen schützen muss :rolleyes wie steht's denn um die kleinen, die geshortet werden auf Teufel komm raus :confused:schwitz:mad

Silverbay 21.07.2008 16:14

Delinquent – curbing short sales
 
quote lunar

:rolleyes ...warum verlagert man nicht einfachheitshalber das Weisse Haus die FED und den Rest der Regierung in den Hauptsitz von GS :rolleyes


**************************************

... zu teuer, ausserdem wird der Laden in Kürze von den Pakistani
unter Führung von Imran Anayat gesteinigt.

Die Liste der Financials, deren Aktien man nicht mehr verkaufen
darf ( short Kurbel ) war übrigens in einer sehr kritischen Stellung-
nahme am Freitag nicht aufrufbar, vermutlich gehackt von Hank
und seinem " Neuen ", der Teil des korrupten Netzes ist.

Wachovia taucht nicht in der Liste auf – Ken Thompson chassée – und nun ?

... Mr. Steel, zuletzt im US-Finanzministerium als Unterstaatssekretär
für inländische Finanzen und Berater von Minister Henry Paulson tätig
( zuvor bei der Investmentbank Goldman Sachs ), sorgt nun für eine
einwandfreie Abwicklung ihrer bankruptcy durch short-Positionen derjenigen
Banken, die in der Protection list aufgeführt sind.

again: SHORT GSAX !


p.s. ... was ist los mit dem 3 Sterne-General in der Schweiz,
möchte man seinen Götti Bundesrat Schmid liquidieren ?

lunar 21.07.2008 17:49

Zitat:
Zitat von lunar

Banker Leaves Goldman Sachs To Aid Paulson



Response to Reply #4 22. Bringing in another clown: Goldman's Wilson to advise Paulson on banking: report http://news.yahoo.com/s/nm/20080721/bs_nm/goldman_pauls...

since he's "serving without pay" :dd, I wonder which part of the country they will carve out for him to rule? :rolleyes

lunar 21.07.2008 17:55

Zitat:
Zitat von Silverbay


p.s. ... was ist los mit dem 3 Sterne-General in der Schweiz,
möchte man seinen Götti Bundesrat Schmid liquidieren ?

Startseite: 21. Juli 2008, 17:36
Der Schweizer Armeechef wird beurlaubt


Verteidigungsminster Samuel Schmid gibt erstmals Fehler zu

Armeechef Roland Nef wird vorläufig beurlaubt. Bis zur ersten Sitzung des Bundesrats nach den Ferien am 20. August soll er Fakten auf den Tisch legen, die das in ihn gesetzte Vertrauen glaubhaft bestätigen sollen. Das sagte Verteidigungsminister Samuel Schmid am Montag bei seinem zweiten Auftritt im Fall Nef innerhalb von zwei Arbeitstagen. ...
Im Wortlaut: Bundesrat Schmids Erklärung
Reaktionen: SVP und Grüne kritisieren Schmid

:nw jedenfalls sehr souverän war der Souverän nicht :rolleyes

lunar 21.07.2008 18:25

Freddie Mac Plan Incredibly Stupid

By: Rick Ackerman, Rick's Picks

-- Posted Monday, 21 July 2008 | Digg This Article | Source: GoldSeek.com


Rick’s Picks
Monday, July 21, 2008
“Phenomenally accurate forecasts”
We did a double take on the following headline atop Friday’s edition of the Wall Street Journal: “Mortgage Giant Freddie Mac Considers Major Stock Sale”. This plan gets our vote for the dumbest idea we’ve ever heard from Wall Street. A cruel joke on shareholders, perhaps? After all, the stock has already fallen 75% -- and now the same geniuses who have practically run Freddie in to the ground are proposing to further dilute shareholder equity down to the vanishing point. What might Freddie hope to achieve via this “hyperinflationary” tactic? The issuance of new stock totaling as much as $10 billion supposedly is being considered, but how much could it help? Fannie’s troubled portfolio is nominally valued in the trillions of dollars, and raising another $10 billion from shareholders would be like piling up a few more sandbags after a mighty river has inundated its levees and put half the U.S. under water.

The idea is so miserably stupid, in fact, that even Congress is balking at it, fearing that taxpayers will be on the hook for yet more billions when Freddie fails anyway. Freddie’s ostensible goal is to save itself rather than be regulated to death following a government bailout. But the firm would never even have floated this idea unless the Fed and the Treasury Department were on board. That means it is probably just a red herring intended to distract us from the fact that there are no palatable options for saving the GSEs. So why did the Wall Street Journal play this non-story story so prominently, stretching the headline across three columns above the fold? Our guess is that it was a slow news day, and the Journal’s editors couldn’t come up with another story to hold up the page.

There is almost no chance this idea will get off the ground, so Freddie Mac shareholders needn’t worry about further dilution. But they should be worried that the stock is going to zero anyway. Clearly, neither the company’s directors, nor the Federal Reserve, nor the Treasury Department, nor the U.S. government has shareholder’s interests at heart. Is there some other reason to stick around?

http://news.goldseek.com/RickAckerman/1216646446.php



lunar 21.07.2008 18:50

...auch nicht taufrisch - dennoch ;)

Bunning To Bernanke: You Are A Systemic Risk مقامر الحكومة

http://www.youtube.com/watch?v=BfgH...feature=related





From: obaidkarki
Joined: 1 year ago
Videos: 1,161

Added: July 16, 2008 (More info)
Fannie Mae Freddie Mac Investors Flee McCain Ob... Kommentar :rolleyes:hihi

lunar 21.07.2008 19:03

“He that sells what isn’t his ‘en must pay his debts or go to prison” (...es war einmal :rolleyes) is an old axiom that has stood the test of time. Loosely translated, it means that if you sell a stock “short” (betting that it's going down in price), you're responsible for ANY loss incurred if that stock rallies......

lunar 21.07.2008 19:30

Sarkozy greeted with Dublin protests, as Irish refuse to be bullied on Lisbon Treaty

lunar 21.07.2008 21:37



.....In other words, it wasn’t private property and freedom that brought down the American Empire, but their opposite: an expanding government armed with a printing press.
-- Posted Monday, 21 July 2008

Silverbay 22.07.2008 02:05

Tossed To The Dogs ?
 
Die Liste der Financials, deren Aktien man nicht mehr verkaufen
darf ( short Kurbel ) war übrigens in einer sehr kritischen Stellung-
nahme am Freitag nicht aufrufbar, vermutlich gehackt von Hank
und seinem " Neuen ", der Teil des korrupten Netzes zu sein scheint.

http://globaleconomicanalysis.blogs...ed-to-dogs.html

Meine Versuche, diese Seite mit dem Bericht von Mike "Mish" Shedlock
zu öffnen, wurden unverzüglich mit einer Beendigung des Server-
programms
quittiert.

No wonder why indeed:


While pondering SEC Restricts Shorting 19 Financial Stocks I could
not help but notice the financial institutions conspicuously absent
from the ruling ...


Who Is Missing ? Where is Washington Mutual (WM) ? Wachovia (WB) ?
Were they tossed to the dogs ? What about Corus Bank (CORS),
Bank United (BKUNA), National City Corporation (NCC) ?

It is beyond all belief that naked short selling is affecting Goldman Sachs
(GS) more than Washington Mutual, Wachovia, Corus Bank, Bank United,
and National City Corporation ?

Is this a hint of the banks and brokers the Fed and SEC want to protect
at all costs? Or is this some kind of setup play, an open invitation to short
the others before the same stunt is pulled again ?

The only problem I have with the latter kind of thinking is that it gives these
bureaucrats credit for thinking and executing a plan. Of course whatever it is
they are doing is going to blow sky high anyway because that is the nature
of all such market manipulations.

lunar 22.07.2008 08:51

...endlich :rolleyes

KARADZIC IN HAFT

Bosnische Muslime bejubeln Festnahme


zur Fotostrecke

Freudenfeiern in Sarajewo: Die Festnahme des mutmaßlichen Kriegsverbrechers Radovan Karadzic lässt seine Gegner jubeln - und seine Anhänger toben. Die Polizei musste mit einem Großaufgebot das Gerichtsgebäude in Belgrad sichern, in dem sich der einstige Serbenführer befindet. mehr...




lunar 22.07.2008 09:26



The picture that shames Italy


It's another balmy weekend on the beach in Naples. By the rocks, a couple soak up the southern Italian sun. A few metres away, their feet poking from under beach towels that cover their faces and bodies, lie two drowned Roma children.

....da bleibt es mir im Hals stecken :(

lunar 22.07.2008 10:31

SEC Protects Naked Short Selling BANKING Gnomes!


July 20, 2008

Elaine Meinel Supkis


All over the mainstream media is a sense of rising hysteria. Finally, after two years, the realization that we are screwed is finally sinking in. Even the top gnomes running the global financial and political systems are admitting something is wrong. Only they say, they can FIX this mess they created due to their own greed and lust for busty, pretty goddesses. So they are going hard to work to save...THEIR OWN GREEN HIDES! And we have to stop them. But stopping them is difficult, of course. They have most of the power. They do fear the wild rages in the streets and countryside of places filled with peasants and workers. Oh, oh, if they fail in saving everyone, they might DIE. Like, in a historical upsurge of rage from below.......

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

lunar 22.07.2008 11:28

The Coming Systemic Bust of the U.S. Banking System: “Dead Stocks Rallying”
Nouriel Roubini
Jul 20, 2008
RGE Monitor

This past week started with concerns about another systemic meltdown of the U.S. financial system as the insolvency of Fannie and Freddie was revealed and as IndyMac went bust (this third largest bank collapse in U.S. history). But the week ended with a remarkable rally of financial stocks as better than expected results from Wells Fargo, JP Morgan and Citi soothed the fears that major financial institutions were in even more distress than already predicted by market analysts.

Unfortunately, this massive rally of financial stocks in the latter part of the week is just another temporary bear market rally that will fizzle away once the onslaught of bad financial and macro news builds up again.

The views I presented in a recent blog that we will experience a severe financial and banking crisis received the support of many well respected commentators. Alan Abelson – at Barron’s – is one of the most senior and well known commentators on financial issues and on Wall Street. In his latest Barron’s column – aptly titled “Dead Stocks Rallying” he wrote:

WHY WE'RE STILL BEARISH WAS SPELLED out starkly in a dispatch we received last week from Nouriel Roubini. Nouriel is a professor of economics at NYU Stern School of Business (but don't hold that against him) and runs an economic
advisory firm called RGE Monitor that casts a knowing and clear eye on the
global financial and economic scene. We think he's top-notch (which means we
agree with him, a lot of the time).

The nub of his argument is that we're suffering the worst financial crisis since the Great Depression, and he proceeds to give chilling chapter and verse. He predicts that hundreds of small banks loaded with real estate will go bust and dozens of large regional and national banks will also find themselves in deep do-do.

He reckons that, in a few years, there'll be no major independent broker-dealers left: They'll either pack it in or merge, victims of excessive leverage and a badly flawed and discredited business model.

The Federal Deposit Insurance Corp., after it gets through picking up the pieces of IndyMac, will sooner or later have to get a capital transfusion, Nouriel asserts, because its insurance premiums won't cover the tab of rescuing all the troubled banks. He foresees credit losses ultimately reaching at least $1 trillion and anticipates a heap of woe for credit purveyors across the board.

The poor consumer, he contends, is shopped out and being hammered by falling home prices, falling equity prices, falling jobs and incomes, rising inflation. The recession he anticipates will last 12 to 18 months. And the rest of the world won't escape: He looks for hard landings for 12 major economies. As for the stock market, he hazards that there's plenty of room left on the downside. In fact, he feels the bear market won't end until equities are down a full 40% from their peaks.

We must say this vision is a mite too apocalyptic even for us. But Nouriel is not a
professional fear-monger out to make a splash with end-of-the-world
prognostications He's a sound guy with a solid record and an impressive résumé.
We obviously believe his views are worth pondering, even if they ruin your
appetite.
That was a very nice summary by Abelson of my views and a kind endorsement of them.

But how to square the views that a large fraction of the US financial system is in trouble with the apparently better than expected earnings results and lower than expected writedowns presented by financial institutions such as Wells Fargo, JP Morgan and Citi that led to the financials’ stocks most recent rally? There are many reasons why those earnings results are misleading and cosmetically retouched upward while the true financial conditions of the financial system are more dire than otherwise presented.

Let us discuss next in some detail the various reasons why financial conditions of financial firms and banks are much worse than those headline figures and why we the US will experience a systemic financial crisis…

First of all, in a week when only a massive and open ended bailout rescued Fannie and Freddie, when IndyMac went bust and when Merrill presented much worse than expected results it is very hard to be optimistic about the health of the US financial institutions. Reports in the next few days will reveal whether reality is closer to Fannie/Freddie/IndyMac/Merrill or rather closer to the Citi/JPMorgan/Wells Fargo outlook.

Most financial institutions are putting increasing numbers of assets in the illiquid buckets of Level 2 and Level 3 assets. While FASB 157 should prevent manipulation of the valuation of such illiquid assets, forbearance by the SEC, the Fed and other regulators allows a massive amount of fudging.

An insider told me that in a major financial institution the approach is as follows now: top management decide in advance what the announced writedowns should be and folks dealing with the toxic/illiquid assets come up with totally ad hoc assumptions to make sure that such illiquid assets are valued consistently with the decided-in-advance amount of writedowns and losses.

This is not earnings smoothing; this is active manipulation and falsification of financial results aimed at creating even more obfuscation of the true state of financial institutions. This obfuscation is actively abetted by the SEC, the Fed and all other regulators that are now in forbearance crisis management stage where the objective is to avoid at any cost anything that may trigger a financial meltdown. Thus, most of these earnings reports are not worth the paper they are written off........

.....
So when you add it all up this will be the worst financial crisis since the Great Depression: not as severe as that episode but second only to it. And the real effects of this financial crisis will be severe and more severe if remedial policy action is not rapidly undertaken. Ditto for the US recession: this will be the worst of such U.S. recessions in decades.

Posted by Jesse at 10:19 PM
http://jessescrossroadscafe.blogspot.com/

lunar 22.07.2008 11:48

Monday, 07.21.08 Al and Roger Wiegand discuss economic trends overseas and the U.S. markets.


http://www.kereport.com/DailyRadio/Daily072108-1.mp3

:schwitz ein HorrorBild von Spanien :( - :supi für die PMs :)

lunar 22.07.2008 15:32

ozymandius (1000+ posts) Tue Jul-22-08 07:56 AM
Response to Reply #12 16. Analysis: Fed, Comptroller of the Currency Due Diligence Sham for Fannie, Freddie There are three simple reasons why this supposed review is certain to be a sham.

First, do you think that it would be acceptable for the examiners to come back and say the GSEs were in trouble, or merely undercapitalized? Never. So the outcome of this exercise is predetermined. The most we might see is some recommendations for improvement and/or mention of some minor problem area, nothing threatening. to make the process look legitimate.

Indeed, Paulson's own comments confirm that this is a PR effort:

“Ofheo has told us one thing and the markets have told us another,” Mr. Paulson said. “I’d like as much input as possible.”

He added that the examination would “make the markets more comfortable” about the financial health of the companies.



That comment presupposes a clean bill of health.

Second, the manpower is certain to be insufficient. When Citigroup was in serious trouble in the early 1990s, it took 160 examiners to go over their portfolio. And the troubled loans were junior/senior debt deals, where Citi was holding junior debt on what turned out to be see-through office buildings in Texas and the Southwest. That meant it was a specific number of deals (I have no idea how many, but exactly how many bad commercial RE deals could a large bank do?) that were inspected intensely.

Now this is a completely different sort of exercise, but I strongly suspect it would take more than 160 people per GSE to perform this review in enough depth to make most readers happy, and it's a pretty safe bet there are not that many people dedicated to this task.

Third, not even remotely enough time. Paulson wants the rescue package approved by Congress this week and wants the inspection to bolster confidence:

Mr. Paulson repeated his earlier comments that Congress should provide the administration with open-ended authority to make investments and loans to the two giant companies to send a strong signal to the markets that they have plenty of financial muscle behind them.

“The more flexibility we have on the credit facility, the more confidence you have in the market and the greater protection to the taxpayer because the less likely it will be used,” Mr. Paulson said. “Something like that shouldn’t have to be used. It’s like the Fed’s lender of last resort facility.”

He said it would be unfair to describe any possible loan to either institution as a bailout because, he said, they would have to post “strong collateral” that would protect taxpayers from losses.

“These entities have good collateral,” he said. “There are mortgages being made today.”

In response to a question about how confident he could be that the collateral would be adequately valued considering the sharp and continuing decline in the housing markets, he said that the two companies were being examined by officials from the Fed and the comptroller’s office.



http://www.nakedcapitalism.com/2008/07/fed-comptroller-...



See? It's all good. These dogs and ponies parading in little circles are necessary before all is declared well.

lunar 22.07.2008 15:47

bei DU - UpInArms gesehen - merci
 

PAUL B. FARRELL
11 reasons America's a new socialist economy

How free market ideology backfired, sabotaging capitalistic democracy

By Paul B. Farrell, MarketWatch
Last update: 6:45 p.m. EDT July 21, 2008

ARROYO GRANDE, Calif. (MarketWatch) -- Welcome to the conservative's worse nightmare: The law of unintended consequences. Why? Nobody wants to admit it, folks, but the conservatives' grand ideology is backfiring, actually turning the world's greatest capitalistic democracy into the world's newest socialist economy.

A little history: The core principles of conservative economic ideology are grounded in Nobel economist Milton Friedman's 1962 classic "Capitalism and Freedom." Too late to stop President Lyndon Johnson's Great Society, those principles became the battle cries energizing conservatives since Reagan: Unrestricted free markets, free enterprise and free trade; deregulation, privatization and globalization; trickle-down economics and trickle-up wealth to an elite plutocracy destined to rule the new American capitalist utopia.

So what happened? Are you guys nuts? Hey, I'm talking to all you blind Beltway politicians (in both parties) ... plus the Old Boys Club running Wall Street (into the ground) ... plus all you fat-cat CEOs (with megamillion parachutes) ... and all your buddies scamming everybody else to get on the Forbes 400. You are proof of Lord Acton's warning: "Power corrupts and absolute power corrupts absolutely."

It's backfiring! You folks turned our America from a great capitalistic democracy into a meddling socialist economy. Still you don't get it. You're acting like teen addicts tripping on an overdose of "greed-is-good" testosterone while your caricature of conservative economics would at best make a one-line joke on Jay Leno.

Here are 11 reasons your manipulations are sabotaging the great principles of leaders like Friedman and Reagan:

1. Dumber than a fifth grader with cognitive dissonance
Kids know what it means. They know most adults today can't see past the end of their noses. Liberals tune out candidate McBush for being lost in the past. Conservatives can't hear Obama without seeing that turban.
Cognitive dissonance simply means most brains cannot see past their own narrow ideologies. They dismiss any data that contradicts their old ideologies. Whether you're a conservative Republican or liberal Democrat, you only hear what you already know is "true." All else is tuned out.

2. Where did all the leaders go with their moral character?

Friedman's economics requires leaders of moral character. Did it run into Lord Acton's warning: "Power corrupts, absolute power corrupts absolutely?" Former Ford and Chrysler CEO Lee Iacocca said yes in "Where Have All the Leaders Gone?"
Friedman's great conservative principles have been commandeered by myopic ideologues whose idea of leadership is balancing the demands of self-interest lobbyists with the need for campaign donations. Unfortunately, a new "change" president won't be enough; there are 537 elected officials in Washington controlled by 42,000 special interest lobbyists.

3. Fed and U.S. Treasury adopted Enron accounting tricks

Bad news: Enron failed several years ago because of its off-balance-sheet accounting scam. The Fed's doing the same thing: Dumping Bear's $30 billion liabilities onto the taxpayer's "balance sheet." Next Treasury proposes adding $5.3 trillion more from Fannie Mae and Freddie Mac.
Unfortunately clever accounting tricks by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke aren't going to fool foreign lenders analyzing America's creditworthiness. Worse-case scenario: U.S. Treasury bills with less than a triple-A rating.
With 90 banks on the brink and already too many bail-outs, our so-called leaders are running out of magic bullets. So now the taxpayer's "balance sheet" has become the all-purpose "dumping ground" and it's overcrowding fast as our leaders raise the white flag of socialism.

4. Deregulation creating new socialist housing system
Back in 1999 a Democratic president and Republican Congress were in love with a fantasy called the "new economics." Enthusiastic lobbyists invented the brilliant idea of dismantling the wall between commercial and investment banking: They killed the Glass-Steagall Act that was keeping the sleazy hands of short-term hustlers out of the pockets of long-term lenders.
Flash forward: We lost 85-year-old Bear Sterns and $32 billion IndyMac. Lehman's iffy. And 90 banks. With the virtual takeover of Freddie and Fanny, Wall Street's grand experiment with free-market ideology is backfiring, having socialized the housing market. They have nobody to blame but their self-centered greed.

5. Trade deficits outsourced more of America's wealth than jobs
One look at Forbes lists of fat cats and you know the 21st Century doesn't just belong to Asia, it belongs to everyone but America. Why? Once again, remember Warren Buffett's famous "Farmer's Story" in Fortune: "We were taught in Economics 101 that countries could not for long sustain large, ever-growing trade deficits ... our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4% more than they produce -- that's the trade deficit -- we have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own."
Friedman was right: Congressional spending is the biggest cause of inflation, and, wow, those conservatives sure did love blank-check deficit spending the past eight years!

6. Banking system in meltdown, minting penny stocks
The Friedman conservatives apparently understand Joseph Schumpeter's "creative destruction." Yet, our free-market ideologues can't seem to accept that America is now on the "destructive" downside leg of the cycle, in the economy, markets, trade, politics and, yes, sadly, even with their conservative ideology.
You don't have to be smarter than a fifth grader to figure out that our leaders are clueless about the reality of our crumbling banking system, with many banks trading as penny stocks, while the Fed still panders to conservative pre-election politics rather than getting serious about inflation.

7. Ideologues preach savings, but still push spending
A core principle of conservatism is frugality, saving for the future. Grandparents raised me, struggled during the Depression, passed on strong ideals.
Somewhere over the past generation conservatives forget frugality. This distortion peaked in 2003 when consumers were told to spend, not sacrifice, and fuel the economy even as government spent excessively on war. That was a clear breach of every conservative leader's position in earlier wars.
As a result, in one brief generation, as the power of conservative ideologues grew, America's savings rate dropped precipitously from 11% in 1980 to less than zero today.

8. Warning, the market's under 2000 peak, losing money
Imagine you're on Jeff Foxworthy's fabulous show competing to see if you really are smarter than a fifth grader. Question: "If you put $10,000 in the market in March of 2000 when the Dow peaked at 11,722, how much money would you have today if the market's 10% under 11,722?" So you guess $9,000.
But then two fifth graders raise their hands: One asks if the CPI inflation rate should be considered? If so, maybe $5,000 is closer to the right answer. The other kid wants to know if you're buying stuff in Chicago or Singapore.
The truth is, the best answer for most adults is: "You've lost a hell of a lot of money in the market under the grand conservative ideology the past eight years."

9. Inflation and dollars: Is Zimbabwe the new model for the U.S.?
The Los Angeles Times ran a photo of a Zimbabwe $500 million bank note, worth $20 at noon, less at dinner. Why? Inflation's there is running 32 million (yes million!) percent annually. The German company printing their banknotes finally cut them off.
Things may be worse in America, psychologically. Our ideological obsession with "growth" is not working because there is too much collateral damage, namely inflation. Our dollar has lost substantial value to the euro because our dysfunctional leaders are convinced that a trade policy funded by debt makes sense.
Now we owe China $1.3 trillion, sovereign funds want equity not cheap dollar IOUs, and still our clueless Treasury and the Fed continue debasing our currency, printing money like Zimbabwe.

10. Free-market health care failing 47,000,000 Americans

Big Pharma loves free-market conservatism and no-compete Medicare drug programs. Nobody else is happy. Taxpayers get stuck with the bill.
"The Coming Generational Storm" tells us that without massive reforms and big lifestyle changes for taxpayers (especially retirees), within a couple short decades America's entitlement programs will eat up the entire federal budget. Medicare is the biggest cost item in your future, over $50 trillion in unfunded liabilities.
Conservative ideologues naively believe the answer is more pay-out-of-pocket insurance plans, even with 47 million already uninsured because they can't pay. Here as in so many areas of our economy, free-market junkies really are suffering a severe case of cognitive dissonance, as blind to the facts about the uninsured as they are to their outdated free-market fantasies.

11. Conservative free-market policies inflated oil 300%!
Yep, oil inflated 300% in eight short years under the "leadership of two oil men." But, you can't blame them. We put the foxes in the henhouse, knowing full well "real" oil men love digging holes on the supply side, supporting ethanol subsidies and blaming speculators -- it's in their genes! Talk about cognitive dissonance; real oil men thrive on cowboy images of Marlboro Men in Hummers, Navigators and F-150 trucks.
Net result? Another perfect example of "creative destruction" in action as conservative ideology meets "law of unintended consequences," driving GM, the symbol of America capitalism, closer to bankruptcy ... while turning America into a socialist economy.


(287) - View Comments on this story

http://www.marketwatch.com/news/sto...ist=SecMostRead

Kommentare auch lesen

lunar 22.07.2008 18:14

5 Anhang/Anhänge
July 22, 2008


Scanning the headlines, I guess we can’t fight all the good news that is raising the

dollar and sinking gold……!

Home Prices Post Record Drop- AP

A government report says U.S. home prices fell a record 4.8 percent in May from the same month last year. The Office of Federal Housing Enterprise Oversight also says prices, on a seasonally adjusted basis, fell 0.3 percent from April to May.






Stimulating the economy one bull at a time

lunar 22.07.2008 19:04

Karadzic- Festnahme nährt Serbiens EU- Hoffnungen

Angela Merkel spricht von einem "historischen Moment", Diplomaten in Brüssel zeigen sich erleichtert: Die Ergreifung des mutmaßlichen Kriegsverbrechers Karadzic ist für Serbien ein großer Schritt in Richtung EU. Noch aber zögert Belgrads Regierung, wichtige Bedingungen zu erfüllen. mehr... [ Video | Forum ]




:eek kaum zu erkennen :schwitz:bad

Silverbay 22.07.2008 19:18

Karadzic
 
quote lunar


... wird interessant, wie der " serbische Ritter "
Peter Handke auf die Festnahme reagieren wird,
evtl. ja schon in der ZEIT diese Woche.

Signora del Ponte hat man ja schon einen Maulkorb
verpasst, Buenos Aires ist noch nicht weit genug ...

lunar 22.07.2008 19:22

http://www.truveo.com/Its-a-Wonderf...ng/id/723478644

lunar 22.07.2008 19:30

Zitat:
Zitat von Silverbay

... wird interessant, wie der " serbische Ritter "
Peter Handke auf die Festnahme reagieren wird,
evtl. ja schon in der ZEIT diese Woche.....


:rolleyes ja - dürfte spannend sein :rolleyes

Serbien-Kontroverse [Bearbeiten]


1996 kam es in den Medien nach der Veröffentlichung von Handkes Reisebericht Eine winterliche Reise zu den Flüssen Donau, Save, Morawa und Drina oder Gerechtigkeit für Serbien zu heftigen Kontroversen, die bis heute andauern. Kritiker werfen ihm eine Verharmlosung der serbischen Kriegsverbrechen vor,[5] während Handke für sich eine differenziertere Wortwahl und Darstellung der Ereignisse als in der allgemeinen journalistischen Berichterstattung in Anspruch nimmt. 2004 besuchte er Slobodan Milošević im Gefängnis in Den Haag. 2005 wurde er von den Verteidigern des jugoslawischen Ex-Präsidenten, der vor dem UN-Kriegsverbrechertribunal in Den Haag des Völkermords und der Verbrechen gegen die Menschlichkeit angeklagt war, als Zeuge eingeladen. Handke lehnte dies ab und veröffentlichte wenig später einen Essay mit dem Titel Die Tablas von Daimiel, der den Untertitel Ein Umwegzeugenbericht zum Prozess gegen Slobodan Milošević trägt. Am 18. März 2006 trat Handke auf der Beerdigung von Slobodan Milošević als Redner auf,[6] was zu einem Wiederaufleben der Kontroverse führte. Im Zusammenhang mit Handkes Grabrede wurde auch sein Stück Spiel vom Fragen oder die Reise ins sonore Land vom Spielplan der Pariser Comédie Française abgesetzt, was abermals sowohl befürwortende als auch kritische Stimmen hervorrief. Am 2. Juni 2006 verzichtete Peter Handke aufgrund der entbrannten politischen Diskussion auf den erstmals mit 50.000 Euro dotierten Heinrich-Heine-Preis 2006 der Stadt Düsseldorf.

Von Schauspielern des Berliner Ensembles ging im Juni 2006 eine Initiative aus, der «Berliner Heinrich-Heine-Preis»[7] genannt, die die Attacken des Düsseldorfer Stadtrates als „Angriff auf die Freiheit der Kunst“ bezeichnete und für Handke das Preisgeld in gleicher Höhe sammeln wollte. Mitglieder der Initiative waren u.a. Käthe Reichel, Rolf Becker, Dietrich Kittner, Arno Klönne, Monika und Otto Köhler, Eckart Spoo, Ingrid und Gerhard Zwerenz, Claus Peymann. [8] Am 22. Juni 2006 bedankte sich Handke für die Bemühungen, lehnte jedoch seine Annahme ab und bat stattdessen um eine Spende an serbische Dörfer im Kosovo.[9] Anlässlich der Uraufführung seines Stückes Spuren der Verirrten am 21. Februar 2007 wurde ihm die vollständig gesammelte Preissumme und der Preis übergeben, die Handke einer serbischen Enklave im Kosovo zukommen lassen will.[10] Die Wahl fiel auf das hauptsächlich von Serben bewohnte Dorf Velika Hoča, an dessen Bürgermeister Dejan Baljoševic das Preisgeld von Handke an Ostern 2007 übergeben wurde.[11] [12]

Im Januar 2008 äußerte Handke, dass er, wäre er Serbe, den serbischen Nationalisten und stellvertretenden Vorsitzenden der SRS, Tomislav Nikolić wählen würde.[13] [14]. Am 22. Februar 2008 verfasste Handke einen kleinen Kommentar in der französischen Zeitung "Le Figaro", in dem er noch einmal an die gemeinsame Geschichte Jugoslawiens in Bezug auf den Sieg über den Nationalsozialismus hinwies und die westlichen Staaten als "Gaunerstaaten" bezeichnete.[15]

http://de.wikipedia.org/wiki/Peter_Handke

Silverbay 22.07.2008 19:40

Merci ...
 
... Lunar, Du machst ein super Arbeit !

Gerade die von den Märkten scheinbar entfernten
threads sind von Relevanz, um die Perspektive auf
die politischen Kontexte zu bewahren.

:)

lunar 22.07.2008 20:18

...danke Silverbay :) es hat auch seine Tücken :rolleyes;) die politischen und ethischen Geschmäcker sind eben verschieden :o:D

lunar 22.07.2008 22:50

...das muss hier auch noch rein ;)


July 21, 2008
Categories: Barack Obama

The day in images

It's not really close:






By Ben Smith 03:03 PM
comments (206)

lunar 23.07.2008 11:28

A day at the Trading Desk

http://www.youtube.com/watch?v=twRp_c93X-Y

lunar 23.07.2008 11:42

President George W. Bush Describes Wall Street [video]

-- Posted Tuesday, 22 July 2008 | Digg This Article | Source: GoldSeek.com

"There is no question, about it. Wall Street got drunk...that's one reason I asked you to turn off TV cameras...he's got drunk and now it's got a hangover, the question is, How long will it sober up and try not to do all these fancy financial instruments?" - President George W. Bush


...ob er weiss wie recht er ausnahmsweise mal hat :eek:rolleyes

http://news.goldseek.com/GoldSeek/1216787003.php




lunar 23.07.2008 15:32

Wednesday, July 23, 2008

Daily Show Video: Confessions of a Subprime Lender

by CalculatedRisk

Comments (25)
Ozymandias writes:
OT. I dispair. I don't want to subsidize irresposible, spendthrift bankers and homebuyers. But I will have no choice, as they now have first call on my money. The government will tell me to pay or else I will be taken prisoner. I see no differnce between the government and the mafia.
Ozymandias | 07.23.08 - 3:49 am | #

Broward Horne writes:
I see no differnce between the government and the mafia

When the mafia prints money, it's called "counterfit". When the gov't prints money, it's called "policy".
Broward Horne | Homepage | 07.23.08 - 5:57 am | #

lunar 23.07.2008 16:56

http://www.youtube.com/watch?v=LQqq3e03EBQ ;)

lunar 23.07.2008 17:31

IMF Follies Don't Impress Chinese

July 22, 2008

Elaine Meinel Supkis


......Even so, today we still lecture the planet about balancing budgets, trade and solvency! Even as our entire system folds and collapses, we still lecture everyone. I posted a story today about the NYT lecturing the Chinese about human rights, free press and other noxious matters. I want a free press here! I want human rights here! Arrest Chertoff and all the other Homeland Security goons. This impulse to lecture the world about war, ethnic cleansing and terror is a mental illness of our leaders.
Fan He, a professor at the Chinese Academy of Social Sciences, told the conference that his country's government is tiring of IMF advice that does little more than echo U.S. complaints about how the Communist regime runs the world's fastest-growing major economy. "If the fund doesn't deliver, it will be marginalized, it will disappear," he said. His government has compiled international reserves of almost $2-trillion, at least in part to help survive another Asian crisis without having to worry about loans from Western powers. "We have the confidence to live without the fund."
The Dragon is warning us, we have no reserves. Fannie Mae has no reserves. The Federal Reserves has virtually no reserves. Neither does Goldman Sachs, JP Morgan or Congress. Our finances are in total collapse. As the great thinker, Liu at Asia Times said yesterday, 'If you are undercapitalized, you are bankrupt.'


China has set the goal to supersede the US as global banker 24 years ago and they succeeded. Proof is their $2 trillion FOREX reserves. I noted last year that the first goal would be $1 trillion and then China would cease talking nice to us when we yap about their currency. Right on target, last year, when China reached that important goal, the pulled off the gloves and began to fight back......

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

lunar 23.07.2008 21:19

toothpicker :verbeug


Found a good quote about the situation:

"Gotta love the "new" world we live in. 40 is the new 20. White is the new black. Up is the new down. Bad is the new good. Losses are the new profits. Bear is the new bull. Socialism is the new Capitalism. Insanity is the new Common Sense."

Silverbay 23.07.2008 21:39

ist das ...
 
:no

... nicht Nietzsches' Umkehrung der Werte ?

Wohin das führte, hat Schwesterherz in den
späten 20igern bewiesen ...

Was folgte, war die Fehl-Interpretation und
Instrumentalisierung durch die " National-
sozialisten " im " 1000-jährigen " Reich.

Geschichte wiederholt sich, immer wieder ...
die MACHT das Ziel, und ihre Erhaltung.

lunar 24.07.2008 09:41

@Silverbay - wer auch immer Pate stand - leider ist es so :mad

eine der vielen "Umkehrungen" aus dem Minenbereich

:verbeug @Tschonko - GoldseitenForum

Supersilver im yahoo board:
...I think folks are missing the point. The company is being sold off for less than the value of the raw land!!! I think shareholders should reject the offer and oust every single one of the BOD, along with the incompetent CEO. This deal has sleeze written all over it. The company could have floated some high-yielding (maybe 9%) bonds to bring in the capital they needed and backed those bonds with actual silver production. Then, in say five years, they could have paid off the bonds' principal and, with hugely higher silver prices, kept most of the silver set aside to back the bonds! I actually sent Ken B. this very idea a couple of months ago and he never even had the courtesy to respond. ......A pox on SRLM management for this world-class sleeze play. And oh, by the way, how insulting to us that they were sure to issue a news release just prior to this transaction reminding us all of the significant (1 million plus) options they were awarding themselves and also of the fact that they each get a hundred and fifty grand if the company is bought out. I don't know exactly what a non-board approved buyout would be, so I don't really understand all the details of that particular aspect. Maybe someone on this board could explain it. But one thing I DO understand, and that's when shareholders wind up taking it up the arse with no Vaseline!

I'm open to comments, but don't just write back and say that the company needed capital, as I've already explained how that could be accomplished quite easily without having to deal with banksters and investment house mafiosos. If Ken B. were a true businessman instead of an apparent short-sighted opportunist, he might have looked outside his "box" and found a way to turn Sterling into the little powerhouse that Ray D. envisioned so many years ago.

Yes, Ray screwed up in allocation of capital, perhaps, but at least I never doubted his sincerity. As to these others in management, I'm not so sure...

...so sieht also eine Übernahme aus :kopf
klar ist letztendlich ein korruptes und unfähiges Management schuld - trotzdem :dumm nur bei den wirkich grossen Beschissen wird "gerettet" - siehe Finanzhäuser Wallstreet :bad

lunar 24.07.2008 14:20

To quote Bill Murphy . . . "When will these so called educated people understand that borrowed and “created” capital cannot replace "earned or saved" capital when the credit machine goes in reverse."

lunar 24.07.2008 14:41

...von einem YAHOO-Board

700 pages 23-Jul-08 10:25 pm
baecorine
Congress voted on and passed a 700 page bill that the Senate is to vote on Tomorrow. They haven't even read the bill, there isn't enough time to read it but they will vote on it tomorrow. Half of the senate can't even keep their eyes open past 8:00PM but they are supposed tp have read a 700 page bill by tomorrow?

One can only imagine all the goodies that got buried in that bill besides a bailout for F&F. Now remember that Paulson just said that the banking system is sound and that F&F are not in immediate danger of failing but you boys only have until tomorrow to pass this bill. Hank will stop by on Friday morning to pick up his blank check!

No danger? The system is sound? Then why rush? Ah, why bother reading, it's all there, just sign. Humm, it sounds like the congress and senate just got handed one of those adjustable "teaser rate" bills. So go ahead and sign on to something you haven't read and don't understand. Ah, who cares, the people are paying for it. Hank Paulson just sold America the biggest sub prime mortgage in history!

Just wait until you see all the little nasty things that crawl out of the pages of this bill that everyone will deny they agreed to. No one can read 700 pages in one day. This bill will cost us 10x more than advertised and most likely contains a few new laws that take away the rest of your constitutional rights.

shirleyhyla...
I don't normally comment on msg. boards, but believe you have analyzed and assessed the current economic and political situation very well. I read all 28 comments and found you to be very well informed and realistic.

I too believe that we are in big trouble and that the common people are being thrown under a bus. What happened to the constitution as in " taxation without representation." I don't know about anyone else but I never was given the opportunity to vote on whether or not I wanted to pay to bail out Bear Stearns,F&F, or any other institutions whose greed is coming back to bite them. Oh, and then there is "the free market will take care of everything", I guess that only applies to individual people who can't "make it" and need gov't help, not big financial institutions. Then of course there's that lofty ideal about how everything should be privitized, you know, competition and all. Hello Enron!! Then there is Bush's generous and totally ulturistic approval of 30 Billion to fight Aids in Africa or maybe I'm just jaded and believe it's really more financial profit for the drug companies. Oh yeah, and we (tax payers)are picking up the tab for that too.

They say "history repeats itself", and I believe we have entered another gilded age. I am wondering just how much more of this crap people are going to take before we start to see some real social unrest. When people can no longer meet their most basic survival needs while these sociopaths in Washington and Wall Street are lining their pockets we may see some real changes. I don't know what it would take and hate to think of the worst. I just don't think people are going to stand by forever while jobs are shipped out, poverty and iliteracy are imported all in the name of the holy grail of globalizm while hard working middle class Americans are picking up the tab. You are right, they cannot possibly read a 700 page proposal in one night let alone understand it well enough to pass this, we are being totally fleeced and I believe it is almost blatant. The number one sin according to Judaism,Christianity, and Islam, is USERY, and we are living in the thick of it.

Also, naked short selling is illegal for everybody. The SEC has not enforced this rule allowing small investors to lose everything while their Hedge Fund buddies are getting rich stealing their (small investor's) money. I did send an email to the SEC about a year ago regarding this, but as you can see nothing has changed.

Shirley


baecorine
His (Hank Paulson) loyalties are with Goldman, not the Treasury. He just got congress to pay for all of Wall Street's sins.
For something like this they can move with lightning speed, everything else just sits there until the bill dies.

:rolleyes

lunar 24.07.2008 15:06

ozymandius (1000+ posts) Thu Jul-24-08 06:51 AM
Response to Original message 1. Market WrapUp: Banking on Foolishness Edited on Thu Jul-24-08 06:51 AM by ozymandius
Financial Spinsters At It Again
BY CHRIS PUPLAVA

My past three WrapUps have been devoted to counterbalancing the financial Pollyanna folly that the worst is behind us; this will be the fourth. Foolish commentary abounds in the financial media that continues to fail to see the bigger picture as they are ever catching the proverbial falling knife in their bottom calling, such as the commentary below from a favorite on Larry Kudlow’s show on CNBC (emphasis added).

The Economy Is Fine (Really)

It is hard to imagine any time in history when such rampant pessimism about the economy has existed with so little evidence of serious trouble…

Because all debt rests on a foundation of real economic activity, and the real economy is still resilient, the current red alert about a crashing house of cards looks like another false alarm. Warren Buffett, Wilbur Ross and Bank of America are buying, and there is still $1.1 trillion in corporate cash on the books. The bench of potential buyers on the sidelines is deep and strong. Dow 15,000 looks much more likely than Dow 10,000. Keep the faith and stay invested. It's a wonderful buying opportunity.
Brian Wesbury, Chief Economist for First Trust Portfolios, L.P.
Wall Street Journal, 01/28/2008

However, there are voices that grasped the true magnitude of the situation and were laughed at and scoffed for their dire predictions. One of those voices is Nouriel Roubini, economics professor at NYU. His recent comments are provided below (emphasis added).

The Coming Systemic Bust of the U.S. Banking System: “Dead Stocks Rallying”

But at that time (1990-1991) the housing bust and the ensuing decline in home prices was much smaller than today: during that recession home prices – as measured by the Case-Shiller/S&P index – fell less than 5% from their peak. This time around instead such an index has already fallen 18% from its peak and it will most likely fall by a cumulative 30% before it bottoms sometime in 2010. If a 5% fall in home prices was enough to make Citti effectively insolvent in 1991 what will a 30% fall in home prices – and massive defaults on many other forms of credit (commercial real estate loans, credit cards, auto loans, student loans, home equity loans, leveraged loans, muni bonds, industrial and commercial loans, corporate bonds, CDS) - do to these financial institutions? It challenges the credulity of even spin masters to argue that financial firms are not in worse shape today than they were in 1990-91 when a significant number of major banks were technically insolvent. So, not only hundreds of small banks and a significant fraction of regional banks but also some major money center banks will become effectively insolvent during this crisis…

Also the FDIC has done a mediocre job at identifying which banks are at risk. So far there are only about 90 banks on its watch list; and IndyMac was not put on that list until last month! So if the FDIC did not even identify IndyMac as in trouble until it was too late, how many other IndyMacs are out there that that the FDIC has not identified yet?
Nouriel Roubini
Nouriel Roubini's Global EconoMonitor, Jul 20, 2008
.....

The information presented above should clearly put to rest that the worst is not behind us by any stretch of the imagination. So far this year every market bounce has been a bear trap with prices putting in lower lows as the economic and financial carnage plays out. Every market bounce will prove to be an opportunity to increase defensive positions until the economy begins to show some stabilization.

In terms of monitoring an economic recovery, employment will be crucial as employment levels play a major role in consumer spending which accounts for more than 70% of GDP. In terms of leading indicators for overall employment, housing-related employment levels bottom first followed by temporary service help before overall employment levels bottom. Currently, the rate of decline in housing-related employment appears to have bottomed, which is encouraging though temporary service help employment has not. A bottoming in the employment rate of change often marks the end of a recession and with employment still contracting we are not out of the woods, despite media pundits assertions.

http://www.financialsense.com/Market/wrapup.htm


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