Naked Hunting Season to Resume Tomorrow
October 8th, 2008 by Mark Mitchell
In a few hours, the SEC will lift its ban on short-selling of 900 stocks. That is well and good, except that it appears that hedge funds will also be permitted to resume abusive naked short selling – offloading stock that they do not possess in order to dilute supply and drive down prices....
....warum verbietet man naked short selling eigentlich nicht :confused ich dachte eh es sei ungesetzlich :rolleyes
SEC's Short-Seller Witch Hunt Nabs a Munchkin: Jonathan Weil
Commentary by Jonathan Weil
Oct. 8 (Bloomberg) -- And you wonder why the markets are nervous.
At 2:51 p.m. yesterday, the Securities and Exchange Commission unleashed a bombshell news release. The headline: ``SEC Charges Beverly Hills Firm and Principal for Illegal Short Selling.''
The big story? Here we are, in the worst financial crisis of almost everybody's lifetimes, and this is what qualifies as news down at the SEC.
Not just a short seller. An illegal short seller. From BEVERLY HILLS! Message: ``Yeah, baby! We got one!''
And who is this capo of 90210? The man upon whom we, the investing mob, should focus our anger, while Wall Street CEOs and SEC Chairman Christopher Cox get away?
According to the SEC, he is one Kenneth Rickel, principal of the renowned Lion Gate Capital Inc. And for all his efforts, this Rickel fellow allegedly made profits of $207,291.....
......Now see if you recognize any of the company names that were the targets of Rickel's trades: TC Pipelines LP, Minrad International Inc., IPC Holdings Ltd., Axsys Technologies Inc., Randgold Resources Inc., Fiberstars Inc., Pharmaxis Ltd., Lifetime Brands Inc., American Capital Strategies Ltd., Axesstel Inc., TGC Industries Inc., Brigham Exploration Co., Gasco Energy Inc. and Extra Storage Space Inc.
Meanwhile, as Bear Stearns Cos. and Lehman Brothers Holdings Inc. were unraveling, Cox and the SEC slept.
If the people running the SEC aren't going to resign, they should at least shut up. That way, we won't know just how much time they waste each day formulating over-the-top quotes for press releases about small-fry cases instead of doing their jobs.........
full story: http://www.bloomberg.com/apps/news?...=columnist_weil
.....Deppen mit enormen Gehältern :mad
The Fed is Bankrupt: Update on the Helicopter - The Secret Death of the Fed
-- Posted Tuesday, 7 October 2008
Notice the vertical line at the end of the chart. That’s a $75 billion increase in the past two weeks. Given the parabolic rise of the Adjusted Monetary Base since 1970, perhaps you might think that $75 billion is not particularly special, but the just-released Factors Affecting Reserve Balances report indicates that the size of the vertical line could more than double to $150 billion when this chart is updated next week. See the Ed Bugos article for more charts with vertical lines.....
......So why exactly has Ben’s famous helicopter not flown, much less made money drops, until the past two weeks? There are several reasons. For one, even Mr. Bernanke recognizes the inflationary implications of a helicopter drop and he was willing to use it only as a last resort. But there is a more fundamental reason. You see, the helicopter didn’t have a stable fuel supply. What fuel there was in the form of Open Market operations or purchases of bank assets was simply too unstable and would probably cause the helicopter to crash. Furthermore, it turns out the Fed cannot monetize bank assets effectively without assistance from the U.S. Treasury Department. See the Appendix to this essay for a detailed explanation.
What I’m saying is that the idea — as suggested by the Fed Chairman himself — that the Fed is capable of flying the helicopter all by itself is fraudulent. Moreover, anybody claiming that the Fed had already flown the helicopter before September is simply wrong. The various Federal Reserve reports that I reference in this commentary back me up on this. For example, the Aggregate Reserves of Depository Institutions and the Monetary Base shows that as recently as September 10, when the total borrowings by banks under the various Fed credit facilities stood at $170 billion:
:schwitz soll ein guter Artikel sein - sagt man - ich muss ihn erst noch lesen, ziemlich lang :rolleyes
"Der Finanzplatz Schweiz wird bluten"
Die Schweiz kämpft gegen das globale Bankenbeben. Ein Kollaps der heimischen Großinstitute wäre ein Alptraum - denn die Geldindustrie ist der wichtigste Wirtschaftszweig des Landes. Doch die Berner Regierung leistet sich ein miserables Krisenmanagement :mad Von Michael Soukup, Zürich mehr...
Oct 8, 2008 10:00 pm US/Eastern
NYC's Most Expensive Room: $34,000 Per Night
Four Seasons' 'Ty Warner Suite' Offers Lavish Luxury Unlike Any Other, Complete With Round-The-Clock Butler
Included: Marble, Touch Screen Technology, Smart Toilet
NEW YORK (CBS) ― Most Americans are giving up little luxuries in this tough economy. But some are still able -- and willing -- to pay up for the ultimate in style and service.
Case in point … CBS 2 HD recently got a look at the city's most expensive hotel room. And it can be yours for just $34,000 a night.
"This is the highest hotel in the city," one prospective renter said. "I think the view is just phenomenal."
So what does that type of money buy you? Try some of the most breathtaking views in the city, from 4,300 marble-covered square feet of luxury.
The "Ty Warner Suite" on the 52nd floor of the Four Seasons hotel dazzles with stylish details like waterfalls on its walls, a broken glass chandelier and a crystal sink.....
full story: http://wcbstv.com/seenon/four.seaso...y.2.835862.html
...na endlich eine adäquate Bleibe für :kotz AIG Manager & Co
world crash :(
...aus Trader's Daily :)
Gedicht des Tages
Wenn die Börsenkurse fallen,
regt sich Kummer fast bei allen,
aber manche blühen auf:
Ihr Rezept heißt Leerverkauf.
Keck verhökern diese Knaben
Dinge, die sie gar nicht haben,
treten selbst den Absturz los,
den sie brauchen - echt famos!
Leichter noch bei solchen Taten
tun sie sich mit Derivaten:
Wenn Papier den Wert frisiert,
wird die Wirkung potenziert.
Wenn in Folge Banken krachen,
haben Sparer nichts zu lachen,
und die Hypothek aufs Haus
heißt, Bewohner müssen raus.
Trifft's hingegen große Banken,
kommt die ganze Welt ins Wanken -
auch die Spekulantenbrut
zittert jetzt um Hab und Gut!
Soll man das System gefährden?
Da muss eingeschritten werden:
Der Gewinn, der bleibt privat,
die Verluste kauft der Staat.
Dazu braucht der
und das bringt erneut Profite,
hat man doch in jenem Land
die Regierung in der Hand.
Für die Zechen dieser Frechen
hat der Kleine Mann zu blechen
und - das ist das Feine ja -
nicht nur in Amerika!
Und wenn Kurse wieder steigen,
fängt von vorne an der Reigen -
ist halt Umverteilung pur,
stets in eine Richtung nur.
Aber sollten sich die Massen
das mal nimmer bieten lassen,
ist der Ausweg längst bedacht:
Dann wird bisschen Krieg gemacht.
- Verfasser: Leider unbekannt! Dieses Gedicht kursiert derzeit im Internet, jedoch konnte ich den Verfasser nicht ausfindig machen.
All 3 Big Icelandic Banks Are Now Nationalized
Iceland's financial watchdog said on Thursday it was taking control of the country's biggest bank Kaupthing, the third such takeover in a week, in order to safeguard the domestic banking system.
Bill H Says its Over….any Questions ?
To all; it’s over. The European banking system is unraveling after a bank failure in Iceland of all places was the chain link that broke. The EU countries met today to form some sort of bailout plan for the banks and when all was said and done, it is now every country for themselves, no agreement was reached between Germany and the Latin countries. Russia’s market was down more than 40% over the last 2 days and closed down 1% today after P.M. Medvedev pledged another $36 Billion to the banking system. The British P.M. and the Chancellor of the Exchequer are meeting on a bailout for the British banks. British credit cards are being declined for use in Europe proper. The Fed is now paying interest on funds deposits to put a floor in on rates so they can literally pump unlimited $s into the system without pushing rates to 0. The Fed also announced that they will backstop the commercial paper market with liquidity. Libor rates went higher again today, and the Treasury announced yesterday that they can make direct investments in any corporation. The best of all is the margin call by JP Morgan to Lehman Bros. [bankrupt] and Merrill Lynch [now part of Bank America who went to market today for $10 Billion in new capital that was undersubscribed]. I wonder if they’ll be paid?.....
full story: http://goldtent.com/wp_gold/2008/10...rany-questions/
Fear Trumps Greed as Market Woes Paralyze Economies (Update1)
By Matthew Benjamin and Michael McKee
Oct. 9 (Bloomberg) -- Greed and fear are the emotions that rule markets. Fear is winning.
U.S. and European stock markets fell yesterday, even after the Federal Reserve lowered its benchmark interest rate in concert with central banks in Europe, Canada and China.
Investors are in the grip of a panic that psychologists and historians say isn't necessarily rational and may intensify. They aren't buying stocks, and more importantly, suddenly afraid they won't be repaid, they aren't making loans by buying bonds. Banks have also tightened credit.
``People are driven by images of the best and worst that can happen,'' says George Loewenstein, a professor of psychology and economics at Carnegie Mellon University in Pittsburgh. ``The image of the worst is much more vivid in their minds right now.''.....
....``Of course there's panic,'' he says. ``The next few months will take a strong stomach.''
full story: http://www.bloomberg.com/apps/news?...hnpk&refer=home
The next few months will take a strong stomach.'' :schwitz also noch mehr :bad:rolleyes
Killing Corrections Can Be Fatal To Economies
10/9/8 - Elaine Meinel Supkis
Global interest rates drop towards 1% or less. Savings glut is gone with the wind. The US has been in a savings dearth for years now. The Derivatives Beast continues to make headlines. The New York Times has some big, big stories about Greenspan and how he is the father of this monster. And I explain again, why this is not a credit crunch but a CORRECTION. And explain the obvious: why we call these events, 'corrections.' It seems, our leaders don't understand basic English.
First, from an email sent by C.G.R. comes this bit of dictionary humor:
BULL MARKET -- random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.
BROKER -- What my broker has made me.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW -- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a outhouse.
PROFIT -- An archaic word no longer in use.
I would add 'CONGRESS-- A collection of cons who vote.'
Bear Market Until 2011: Analyst
Between October 8 and October 10 is a key time for making a low in the market, according to Tom Hougaard from City Index, adding that we are likely to be in a bear market until 2011.
merci @Eldo :)
U.S. debt grows too big for National Debt Clock.»:dumm
The National Debt Clock in New York’s Times Square — first erected in 1989 when the debt was less than $3 trillion — cannot keep pace with the growing national debt, now at more than $10 trillion. NBC’s Brian Williams reported last night that “the debt has been piling up so fast lately they had to drop the dollar sign to make room for an extra digit.” A new clock with two extra digits will go up next year. Watch it:
Schuldenuhr in New York gehen die Stellen ausAP - vor 57 Minuten
New York (AP) Die berühmte Schuldenuhr in New York hat nicht genug Stellen, um mit der Rekordverschuldung der US-Regierung Schritt halten zu können. Als kurzfristige Notlösung wird nun das Dollarzeichen auf der Anzeigetafel zu einer Eins an der ersten Stelle der neuen Schuldenzahl umfunktioniert. Die Uhr misst die rasant steigende Staatsverschuldung der USA mit derzeit 10,2 Billionen Dollar.
Thu 9 Oct 2008
Neel Kashkari Truly Is Hank Paulson Mini-Me
Posted by alyx under hank paulson
Brad Walker sent me an email earlier this week, pointing out the similarity between Hammerin’ Hank Paulson and Neek Kashkari, the bailout wunderkind. Who knew the similarities were so very deep (from WSJ):
People are looking for clues on the experiences that helped form the thinking of the one-time rocket scientist, Republican contributor and :bad Goldman Sachs :bad banker. Since 2006, Kashkari has been one of Paulson’s regular advisers, sharing with his mentor a hairstyle, Midwestern roots, a Goldman alumni card and even the same taste in popular soft drinks.
He is also a fan of AC/DC and has a dog named Winslow. If that isn’t enough to make you trust a man with $700 billion - what is?
....bisschen Abwechslung ;) Schei**börse :o
von DU :verbeug
Libor Dollar Rate Jumps to Highest in Year; Credit Stays Frozen
(Bloomberg) -- The cost of borrowing in dollars for three months in London soared to the highest level this year as coordinated interest-rate reductions worldwide failed to revive lending among banks for any longer than a day. Attempts by policy makers to restore confidence to money markets are being stymied by almost daily crises among financial institutions. Iceland's government took over the nation's biggest lender today to keep the country's banking system working. American International Group Inc., the insurer taken over by the U.S. government, may need $37.8 billion of extra funds, the Federal Reserve Bank of New York said yesterday.The international banking system continues to collapse despite global attempts at re-energizing the credit circus.
Is this like trying to lift yourself up by pulling up your shoelaces?
-> Posted by ipso_facto @ 13:29 pm on October 9, 2008
Paulson and Bernanke now are truly caught in the box, as I have been talking about for more than a year. As they introduce and fund these silly programs like the “TARP” each new program produces more foreclosures by depressing home values and thus tightens the spiral.
See, as long rates go up house prices go down, since the value of a home for most people is Dependant on what they can finance, and that is directly related to interest rates. Get out your HP12C and run the principal value change for a fixed payment if interest rates change from 6% to 8% or 10% - that’s the impact on the value of your house from these changes that are occurring in the Treasury marketplace.
This outcome is what I warned of in “Our Mortgage Mess” back in April of this year; a potential ramping of borrowing costs for government debt, which will not only make sustaining government spending (and perhaps government operation) impossible, but in addition destroy private credit by driving costs in the private sector skyward as well.
09 October 2008
Lehman CDS Were Settled at Auction Today - Crises du Jour
We have not seen the results, but should we infer from the stock market action that the Lehman Brothers Credit Default Swaps auctions did not go smoothly?
Or is it merely the collapse of the US insurance industry from fraud and over-leverage that is frightening Wall Street into fit. Or is it that S&P just placed General Motors and GMAC on negative credit ratings watch.
We seem to be careening from one surprise and crisis to another.
Posted by Jesse at 3:28 PM
Thu 9 Oct 2008
Happy Anniversary, DOW 14,000 Double-Top!
Posted by alyx under fail
Self-Evident reminds me that we’re around the the one-year anniversary of what was the set of halcyon days that turned out to be the second half of a horrific double-top at Dow 14K (October 2-12, 2007), and IDK, I would say, like, many happy returns, or something, but “many negative returns” is more like it. +1 if you have lost so much money that you now look at cakes only as a vehicle into which you can bake, and thus hide, a flask.
Thu 9 Oct 2008
Who Likes Short Shorts?
Posted by nin_man under Uncategorized
I don’t really have much to say about this - the ban on short selling is over as of this morning - but I really wanted to post this picture, which I have had sitting around literally since the ban was first announced.
Don’t judge me. I plan ahead, that’s all.
Amazing that the SEC
-> Posted by Buygold @ 16:30 pm on October 9, 2008
has refused to re-instate the uptick rule while Rome burns. That ought to tell everyone on the planet that this market crash has been anticipated and in fact created by the true money masters of this earth.
:schwitz ...nur wer sind sie denn wirklich :gruebel
Lehman CDS sellers face massive losses in auction
Thu Oct 9, 2008 5:28pm EDT
NEW YORK, Oct 9 (Reuters) - Banks, hedge funds and other sellers of protection on Lehman Brothers' (LEN.N: Quote, Profile, Research, Stock Buzz) (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) debt are facing losses in the area of 90 percent the insurance sold when the value of the failed bank's credit default swaps are settled in an auction on Friday.
If sellers of protection outweigh buyers in the auction, as some analysts expect, losses may be even higher......
full story: http://www.reuters.com/article/bond...932589620081009
09 October 2008
The Progress of the Dollar Rally in Context and the Stock Market Crash
This is a simple update of the chart which was posted on this blog on 8 September Dollar Musings and the Potential for a Significant Stock Market Decline.
We will take a minute to note this detail from that September 8 blog entry:
We think that there is a heightened chance of a significant stock market decline that will start in the next thirty days. As we have previously said we are watching for a 'failed rally' hall mark in our model, We are almost there.The clarification was a market decline that started on 19 September and has shaved around thirty percent off the major US stock market indices.
The dollar did drop back into the 70's and then has rallied sharply back up to resistance around 82.
All of our charting indicates that the dollar will not significantly top the 61.8 fibo level of 84.37 if it does surmount the resistance at 82.
If it does, then we need to reconsider this as something other than a bear market rally.
Posted by Jesse at 11:03 PM :verbeug
Nikkei :runter 24.33% in dieser Woche :(
....müssen wohl die Wallstreeter sein die nicht reinfallen sollen :rolleyes wäre totale Umweltverseuchung :o
Posted by fabric
:schwitz the light at the end of the tunnel :confused:rolleyes
Posted by fabric
Bear Stearns: Murdered at the Golden Gates
-- Posted Friday, 10 October 2008 | Digg This Article | Source: GoldSeek.com
By: Rob Kirby
Much has already been written about the untimely demise of investment bank Bear Stearns. Most, if not all, that has been written to date – deals with issues related to equities / expiring options – or the share price.
Recently, new information has come to light which allows us to forensically examine the demise of Bear Stearns from a completely different angle – GOLD.
No-one should be surprised by this development. Up until the untimely demise of Bear Stearns, the most celebrated and at the same time misreported and misunderstood financial collapse in American History was that of Long Term Capital Management [LTCM] back in 1998. The treatment – or more properly stated, the decision to bail-out LTCM – was all motivated by GOLD. For a primer on the LTCM / GOLD nexus, readers can gain a nuts-and-bolts background in these two articles:
That Bear Stearns and LTCM should be mentioned in the same breath should also come as no surprise for another reason; Bear Stearns was the only major player invited by the NY Fed / Treasury to participate in the “then bail-out of LTCM” who refused to participate. Not participating, or bearing a portion of the financial burden, in the suppression of the gold price effectively made Bear Stearns “an enemy of the State”.
So, it’s an ironic twist of fate that while LTCM’s demise was cloaked because they were secretively and nefariously “short gold”; Bear Stearns was brought to heel [assassinated, more likely] because they were “long” – at a minimum - roughly 12 billion dollars worth of gold derivatives [futures].
At Their Demise, Bear Stearns Was Categorically “Long” Gold
full story: http://news.goldseek.com/GoldSeek/1223619420.php __________________
Wirtschaft: 10. Oktober 2008, 11:59
Allgemeine Ratlosigkeit an den Börsen
Ausverkauf in Zürich und Frankfurt – Handel in Wien ausgesetzt
Die Börsen befinden sich trotz Beruhigungsspritzen der Notenbanken weltweit im freien Fall. Der Schweizer Blue-Chips-Index SMI tauchte zeitweise um über acht Prozent, der Dax stürzte kurz nach Eröffnung um mehr als 10 Prozent ab. Analysten und Händler sind ratlos. Nach Moskau hat auch die Wiener Börse den Handel unterbrochen. ...
AUSVERKAUF AN DER BÖRSE
Dax stürzt tief ins Minus
Krisenstimmung auf dem Frankfurter Parkett: Zum Handelsauftakt brach der Dax um mehr als zehn Prozent ein, jetzt schlingert er weiter tief im Minus. Zuvor hatten schon der amerikanische Dow Jones und der japanische Nikkei-Index massive Verluste verzeichnet. mehr... [ Video ]
Global equities plunge
Equities plunged after a dramatic late sell-off in New York. London’s FTSE 100 opened 10% down before recovering somewhat to stand 5% lower. Japanese shares touched 20-year lows, leading Asia-Pacific down as fears deepened that the world economy was heading for recession. Overnight, Wall Street suffered its biggest fall since the 1987 crash writeDate( 1223627870000, 'Grey', '09:37', 9999999999999); - 09:37
And there is a bright side ;)
-> Posted by Silverlining @ 6:11 am on October 10, 2008
1) Comment on the US economy
Investment analyst and entrepreneur Dr. Marc Faber concluded his monthly bulletin (June 2008) with the following:
The federal government is sending each of us a $600 rebate.
If we spend that money at Wal-Mart, the money goes to China.
If we spend it on gasoline it goes to the Arabs.
If we buy a computer it will go to India.
If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala.
If we purchase a good car it will go to Germany.
If we purchase useless crap it will go to Taiwan and none of it will help the American economy.
The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I’ve been doing my part.”
2) The true balance sheet of US Investment banks:
There are two sides of the balance sheet: the left side and the right side.
On the left side, there is nothing right…
And on the right side, there is nothing left.
10 October 2008
Canada Rated World's Soundest Banking System
In our recollection Canada's banking system was also fairly sound during the Great Depression.
Canada rated world's soundest bank system
By Rob Taylor
Thu Oct 9, 2008 2:41pm EDT
CANBERRA (Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.
But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.
The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.
The United States was on Thursday considering buying a slice of debt-laden banks to inject trust back into lending between financial institutions now too wary of one another to lend.
The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets).
Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia (6.7) and Denmark (6.7).
UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for soundness, while Switzerland's banking system scored the same in 16th place, as did Singapore (13th).
The ranking index was released as central banks in Europe, the United States, China, Canada, Sweden and Switzerland slashed interest rates in a bid to end to panic selling on markets and restore trust in the shaken banking system.
The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6) rounded out the WEF's banking top 10 with Ireland, whose government unilaterally pledged last week to guarantee personal and corporate deposits at its six major banks.
Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway, Hong Kong and Finland all ending up in the top 20.
At the bottom of the list was Algeria in 134th place, with its banks scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz Republic (4.1) and both Argentina and East Timor (4.2).
World Economic Forum Global Competitiveness Report
1. Canada :eek
8. New Zealand
11. Hong Kong
15. South Africa
16. Switzerland :gruebel
20. Spain :(
Posted by Jesse at 8:27 AM :verbeug
< Go To Nouriel Roubini's Global EconoMonitor Main Page
The world is at severe risk of a global systemic financial meltdown and a severe global depression
Nouriel Roubini | Oct 9, 2008
The US and advanced economies’ financial system is now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.
On the real economic side all the advanced economies representing 55% of global GDP (US, Eurozone, UK, other smaller European countries, Canada, Japan, Australia, New Zealand, Japan) entered a recession even before the massive financial shocks that started in the late summer made the liquidity and credit crunch even more virulent and will thus cause an even more severe recession than the one that started in the spring. So we have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies.
There was no decoupling among advanced economies and there is no decoupling but rather recoupling of the emerging market economies with the severe crisis of the advanced economies. By the third quarter of this year global economic growth will be in negative territory signaling a global recession. The recoupling of emerging markets was initially limited to stock markets that fell even more than those of advanced economies as foreign investors pulled out of these markets; but then it spread to credit markets and money markets and currency markets bringing to the surface the vulnerabilities of many financial systems and corporate sectors that had experienced credit booms and that had borrowed short and in foreign currencies. Countries with large current account deficit and/or large fiscal deficits and with large short term foreign currency liabilities and borrowings have been the most fragile. But even the better performing ones – like the BRICs club of Brazil, Russia, India and China – are now at risk of a hard landing. Trade and financial and currency and confidence channels are now leading to a massive slowdown of growth in emerging markets with many of them now at risk not only of a recession but also of a severe financial crisis.....
......Urgent and immediate necessary actions that need to be done globally (with some variants across countries depending on the severity of the problem and the overall resources available to the sovereigns) include:
- another rapid round of policy rate cuts of the order of at least 150 basis points on average globally;
- a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;
- a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;
- massive and unlimited provision of liquidity to solvent financial institutions;
- public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;
- a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;
- a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;
- an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.
At this point anything short of these radical and coordinated actions may lead to a market crash, a global systemic financial meltdown and to a global depression.
full story: http://www.rgemonitor.com/roubini-m...obal_depression
sollte man lesen :supi
Behind the Panic:
Financial Warfare over Future of Global Bank Power
By F. William Engdahl, 10 October 2008
What's clear from the behavior of European financial markets over the past two weeks is that the dramatic stories of financial meltdown and panic are deliberately being used by certain influential factions in and outside the EU to shape the future face of global banking in the wake of the US sub-prime and Asset-Backed Security (ABS) debacle. The most interesting development in recent days has been the unified and strong position of the German Chancellor, Finance Minister, Bundesbank and coalition Government, all opposing an American-style EU Superfund bank bailout. Meanwhile Treasury Secretary Henry Paulson pursues his Crony Capitalism to the detriment of the nation and benefit of his cronies in the financial world. It's an explosive cocktail that need not have been.
Stock market falls of 7 to 10% a day make for dramatic news headlines and serve to foster a broad sense of unease bordering on panic among ordinary citizens. The events of the last two weeks among EU banks since the dramatic state rescues of Hypo Real Estate, Dexia and Fortis banks, and the announcement by UK Chancellor of the Exchequer, Alistair Darling of a radical shift in policy in dealing with troubled UK banks, have begun to reveal the outline of a distinctly different European response to what in effect is a crisis 'Made in USA.'
There is serious ground to believe that US Goldman Sachs ex CEO Henry Paulson, as Treasury Secretary, is not stupid. There is also serious ground to believe that he is actually moving according to a well-thought-out long-term strategy. Events as they are now unfolding in the EU tend to confirm that. As one senior European banker put it to me in private discussion, 'There is an all-out war going on between the United States and the EU to define the future face of European banking.'
In this banker's view, the ongoing attempt of Italian Prime Minister Silvio Berlusconi and France's Nicholas Sarkosy to get an EU common 'fund', with perhaps upwards of $300 billion to rescue troubled banks, would de facto play directly into Paulson and the US establishment's long-term strategy, by in effect weakening the banks and repaying US-originated Asset Backed Securities held by EU banks.
Using panic to centralize power
As I document in my forthcoming book, Power of Money: The Rise and Decline of the American Century, in every major US financial panic since at least the Panic of 1835, the titans of Wall Street-most especially until 1929, the House of JP Morgan-have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking. The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like. They are, in short, old hands at such financial warfare to increase their power.
Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century.
That process of using panics to centralize their private power created an extremely powerful, concentration of financial and economic power in a few private hands, the same hands which created the influential US foreign policy think-tank, the New York Council on Foreign Relations in 1919 to guide the ascent of the American Century, as Time founder Henry Luce called it in a pivotal 1941 essay.
It's becoming increasingly obvious that people like Henry Paulson, who by the way was one of the most aggressive practitioners of the ABS revolution on Wall Street before becoming Treasury Secretary, are operating on motives beyond their over-proportional sense of greed. Paulson's own background is interesting in that context. Back in the early 1970's Paulson started his career working for a rather notorious man named John Erlichman, Nixon's ruthless adviser who created the Plumbers' Unit during the Watergate era to silence opponents of the President, and was left by Nixon to 'twist in the wind' for it in prison.
Paulson seems to have learned from his White House mentor. As co-chairman of Goldman Sachs according to a New York Times account, in 1998 he forced out his co-chairman, Jon Corzine 'in what amounted to a coup' according to the Times.
Paulson, and his friends at Citigroup and JP Morgan Chase, had a strategy it is becoming clear, as did the Godfather of Asset Backed Securitization and deregulated banking, former Fed Chairman Alan Greenspan, as I have detailed in my earlier series here, Financial Tsunami, Parts I-V.
Knowing that at a certain juncture the pyramid of trillions of dollars of dubious sub-prime and other high risk home mortgage-based securities would come falling down, they apparently determined to spread the so-called 'toxic waste' ABS securities as globally as possible, in order to seduce the big global banks of the world, most especially of the EU, into their honey trap.
They had help. In recent testimony under oath by Mr Lynn Turner, Chief Accountant of the Securities & Exchange Commission (SEC) testified that the SEC Office of Risk Management which had oversight responsibility for the Credit Default Swap market, an exotic market worth nominally $62 trillions, was cut in Administration ‘budget cuts’ from a staff of one hundred people down to one person. Yes that was not a typo. One as in 'uno.'
Vermont Democratic Congressman Peter Welsh queried Turner, ‘... was there a systematic depopulating of the regulatory force so that it was impossible actually for regulation to occur if you have one person in that office? ...and then I understand that 146 people were cut from the enforcement division of the SEC, is that what you also testified to?’ Mr. Turner, in Congressional testimony replied, ‘Yes…I think there has been a systematic gutting, or whatever you want to call it, of the agency and it's capability through cutting back of staff.’
Was that just ideological budget cutting fervor, or was it deliberate? Was former Goldman Sachs man, the man who convinced the President to hire Paulson, Bush's former Director of the Office of Management and Budget (OMB), Joshua Bolten, now the President's Chief of Staff, responsible for insuring there was no effective government oversight on the exploding securitization of mortgage assets?
These are perhaps some questions which the good Congressmen ought to be asking people like Henry Paulson and Josh Bolten, and not such red herring questions as how large Richard Fuld's bonus pay at Lehman was. Are Mr Bolten's fingerprints on the corpse here? And why is no one questioning the role of Paulson as CEO of Goldman Sachs, then the most aggressive promoter of exotic and other Asset Backed Securitization products on Wall Street?
It now would appear that the Paulson strategy was to use a crisis-a crisis that was pre-programmed and predictable as far back as 2003 when Josh Bolten became head of OMB-when it exploded, to panic the more conservative European Union governments into rushing to the rescue of US toxic waste assets.
Were that to have happened, it would in the process destroy what was left of sound EU banking and financial institutions, bringing the world one step closer to a global money market controlled by Paulson's cronies-US-style Crony Capitalism. Crony Capitalism is certainly appropriate here. Paulson's predecessor at both Goldman Sachs and at Treasury, Robert Rubin, liked to accuse the Asian bankers of Thailand, Indonesia and other lands hit with the speculative attacks of US-financed hedge funds in 1997 of 'crony capitalism,' leaving the impression the crisis was home grown in Asia and not the result of a deliberate executed attack by US-financed financial institutions to eliminate the Asia Tiger model among other goals, and turn Asia into the funder of US debt.
Interesting to note is that Rubin is now a Director of Citigroup, obviously one of Paulson's crony bank 'survivors,' and the bank which to date has had to write off the largest sum in toxic waste securitized assets.
If the allegation of pre-planned panic, a la the Panic of 1907 is accurate, and it is a big if, then the plan worked…up to a point. That point came over the weekend of October 3, coincidentally the national unification holiday of Germany.
Germany breaks with US model
In closed door talks well into the evening of Sunday October 5, Alex Weber the hard-nosed head of the Bundesbank, BaFin head Jochen Sanio and representatives of the Berlin coalition Government of Chancellor Merkel came up with a rescue package for Hypo Real Estate of a nominal €50 billion. However, behind the dramatic headline number, as Weber pointed out in a September 29 letter to Finance Minister Peer Steinbrück that has been made public, not only did the private German banks have to come up with 60% of that figure, the state with 40%. But also, given the careful manner in which the Government in cooperation with the Bundesbank and BaFin, structured the rescue credit agreement, the maximum possible loss, in a worst case scenario, to the state would be limited to €5.7 billion, not €30 billion as many believed. It's still real money but not the blank check for $700 billion that a US Congress under duress and a few days of falling stock market prices agreed to give Paulson.
The swift action by Finance Minister Steinbrück to fire the head of HRE, in stark contrast to Wall Street where the same criminal fraudsters remain at their desks reaping huge bonuses, indicates as well a different approach. But that does not cut to the heart of the issue. The situation of HRE arose as noted previously, from excesses in a wholly-owned daughter bank of HRE subsidiary DEPFA in Ireland, an EU country known for its liberal loose regulation and low tax regime.
A British policy shift
In the UK, after the costly and foolish bailout of Northern Rock earlier in the year, the Government of Prime Minister Gordon Brown has just announced a dramatic change in policy in the direction of Germany's position. Britain's banks will get an unprecedented 50 billion-pound (€64 billion) government lifeline and emergency loans from the Bank of England.
The government will buy preference shares from Royal Bank of Scotland Group Plc, Barclays Plc and at least six other banks, and provide about 250 billion pounds of loan guarantees to refinance debt, the Treasury said. The Bank of England will make at least 200 billion pounds available. The plan doesn't specify how much each bank will get.
That means the UK Government will at least partially nationalize its most important international banks, rather than buy their bad loans as under the unworkable Paulson plan. Under such an approach, costs to UK taxpayers once the crisis abates and business returns to more normal conditions, the Government can sell the state shares back to a healthy bank at perhaps a nice profit to the Treasury. The Brown Government has apparently realized that the blanket guarantees it gave to Northern Rock and Bradford & Bingley merely opened the floodgates of government costs without changing the problem.
The new nationalization policy is a dramatic contrast to the Paulson ideological 'free market' approach of buying the worthless bonds held by the select banks Paulson chooses to save, rather than recapitalize those banks to allow them to continue to function.
The battle lines drawn
What has emerged are the outlines of two opposite approaches to the unfolding crisis. The Paulson plan is now clearly part of a project to create three colossal global financial giants-Citigroup, JP MorganChase and, of course, Paulson's own Goldman Sachs, now conveniently enough a bank. Having successfully used fear and panic to wrestle a $700 billion bailout from the US taxpayers, now the big three will try to use their unprecedented muscle to ravage European banks in the years ahead. So long as the world's largest financial credit rating agencies-Moody's and Standard & Poors-are untouched by the scandals and Congressional hearings, the reorganized US financial power of Goldman Sachs, Citigroup and JP Morgan Chase could potentially regroup and advance their global agenda over the coming several years, walking over the ashes of a bankrupt American economy made bankrupt by their follies.
By agreeing on a strategy of nationalizing what EU finance ministers deem are 'EU banks too systemically strategic to fail,' while guaranteeing bank deposits, the largest EU governments, Germany and the UK, in contrast to the US, have opted for what will in the longer run allow European banking giants to withstand the anticipated financial attacks from the likes of Goldman or Citigroup.
The dramatic selloff of stocks across European bourses and across Asia is in reality a secondary and far less critical issue. According to market reports, the selloff is being driven mainly by US hedge funds desperate to raise cash as they realize the US economy is going into economic depression, that they are exposed and that the Paulson Plan does nothing to address that.
A functioning solvent banking and interbank system is far the more strategic issue. The ABS debacle was 'Made in New York.' Nonetheless, its effects have to be isolated and viable EU banks defended in the public interest, not just the interest of Paulson's banking cronies as in the US. Unregulated offshore vehicles such as hedge funds, unregulated banking, unregulated insurance all went into building the $80 trillion ABS Tsunami as I have called it. Certain more conservative EU hands are not about to buy the remedy being offered by Washington.
The coordinated interest rate cut by the ECB and other European central banks while grabbing headlines, in effect do little to address the real problem: banks fear to lend to each other until their solvency is assured.
By initiating state partial nationalizations across the EU, and rejecting the Berlusconi/Sarkozy bailout scheme, the governments of the EU, interestingly enough this time led by the German, are laying a more sound foundation to emerge from the crisis.
Stay tuned, it's far from over. This is a fight for the survival of the American Century which has been bvuilt since 1939 on the twin pillars of American financial dominance and American military dominance-Full Spectrum, Dominance.
Asian banks, badly burned by Wall Street's manipulated 1997-98 Asia Crisis, are apparently very little exposed to the US problem. European banks are exposed in different ways, but none so serious as in the US banking world.
.....hier noch was über den Autor ---> http://de.wikipedia.org/wiki/F._William_Engdahl
Studie [PDF!]: Die Aufsichtsräte der Banken sind alle inkompetent.
Die haben mal die Lebensläufe von 426 Aufsichtsratsmitgliedern in den 29 größten deutschen Banken untersucht, und es kommt raus, was man erwarten würde: fast alle haben nicht Wirtschaft studiert, fast niemand hat schon mal in einer Bank gearbeitet.
Von den 37 Aussichtsratmitgliedern der KfW können bestenfalls 5 Finanzmarkterfahrungen vorweisen. Fast alle Vertreter sind entweder Politiker oder Interessenvertreter öffentlicher Verbände und Gewerkschaften. Mit einer kritischen Bewertung und Kontrolle von internationalen Investitionsstrategien sind solche Vertreter angesichts der enorm gewachsenen Komplexität in den Finanzmärkten völlig überfordert. Die erstaunliche Größe des Aufsichtsrates allein legt schon nahe, dass hier sicher kein Manager mit kritischer Kontrolle seiner Investitionspolitik zu rechnen hat.
Überraschung!!1! Als besonders inkompetent besetzt fallen die staatlichen Banken auf, wo nicht mal 15% der Aufsichtsräte schon mal in einer Bank gearbeitet haben, und wenn man nach Erfahrung mit dem US-Finanzmarkt sucht, sind es gar nur 2,5%. Nur 20% der Aufsichtsräte in staatlichen Banken haben Wirtschaftswissenschaften studiert, (Danke, Julius)
@Cat - :rolleyes:(:mad
10 October 2008
Losses on Lehman Brothers Credit Default Swaps Approaching 92 Cents on the Dollar
Lehman default swaps may recover 9.75 pct area
By Karen Brettell
Fri Oct 10, 2008 10:45am EDT
NEW YORK, Oct 10 (Reuters) - Banks, hedge funds and other sellers of protection on Lehman Brothers are facing losses in the area of 91.25 percent of the insurance they sold, based on the initial results of an auction on Friday to determine the value of the credit default swaps.
There are also substantially more sellers than buyers of the debt in the auction, indicating that the final price of the swaps may be even lower than the initial recovery levels of 9.75 percent, according to results published by auction administrators Creditex and Markit.
The net open interest to sell the debt is $4.92 billion, they said.
The auction to settle Lehman's credit default swaps will be one of the largest settlements of contracts in the $55 trillion market, with around $400 billion in contract volumes estimated on Lehman's debt.
Lehman's bankruptcy filing last month sent its bond values plunging as the majority of the investment banking assets that had supported the debt were purchased by Barclays Bank, leaving debt holders at the abandoned holding company with little to reclaim.
Lehman's bonds were trading in the 11 cent on the dollar area on Friday, compared to around 12-to-13 cents on Thursday, according to MarketAxess.
Posted by Jesse at 11:47 AM :verbeug
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