Morgan Stanley’s Boat Gets Floated By Mitsubishi UFJ After All
Posted by alyx under all ur bankz
Morgan Stanley and Mitsubishi UFJ just issued a press release that they’ve revised their deal. Morgan gets the $9 billion they desperately needed to survive, and Mitsubishi UFJ gets about 21% interest in the bank in preferred stock. (Yes, based on how badly their market value got hit on Friday, seems like $9 bil would have been sufficient to own the entire bank. That would be why it got renegotiated. The common stock is rebounding a bit this morning.)
Hooray Morgan! It’s not a frequent occurence for us to be able to take a firm off the failboat
Stress in Global Markets Is a `Black Swan Event': Chart of Day
By John Glover
Oct. 13 (Bloomberg) -- Measures of stress in worldwide markets are so far from historical norms that they qualify as a ``black swan event.''
The CHART OF THE DAY shows Bloomberg's Financial Conditions Index, which includes yield spreads and measures of the money, stock and bond markets. The index's drop this month is the kind of rare, devastating event described in Nassim Taleb's book ``The Black Swan: The Impact of the Highly Improbable,'' said Nigel Marriott, the founder of Bath, England-based Marriott Statistical Consulting Ltd.
``It's way off the scale, a one-in-billions chance,'' said Marriott, a fellow of the Royal Statistical Society. ``This is absolutely a black swan event.''
In statistical theory, about 68 percent of events are within one standard deviation above or below the average, 95 percent are within two deviations and 99.7 percent within three. Markets are currently 9.47 so-called standard deviations from usual levels, the Bloomberg index shows.
The measures indicate conditions so unusual that they're comparable only with winning the lottery twice in a week or the earth being destroyed by an asteroid :rolleyes said David Watts, a strategist at CreditSights Inc. in London.
The data go back only to 1992 and so don't reflect market disruptions such as Black Monday in October 1987 or the Great Depression.
``The Depression was an event in human history,'' said Marriott. ``So is this.''
To contact the reporter on this story: John Glover in London at email@example.com
Last Updated: October 13, 2008 02:52 EDT
...und hier noch mehr über den "black swan"
Black Swans Become Norm, Instead of Exception: William Pesek
Commentary by William Pesek
Sept. 17 (Bloomberg) -- The cottage industry that Nassim Taleb created with his book ``The Black Swan: The Impact of the Highly Improbable'' has gone beyond global.....
13 October 2008
The First Victim in an Economic Crisis is Truth
Yves Smith over at Naked Capitalism first picked up on this story from Bloomberg and blogged it here.
The reason for the short term need for US dollar overseas is explained here.
Bloomberg seems to have subsequently pulled this story and replaced it with an optimistic statement from George W. Bush here.
We do appreciate the little touch of irony but the frontpage of Bloomberg still carries the old headline over this new news story. Shoddy work at the Ministry to say the least.
To the experienced eye, there are other unmistakable efforts this morning to calm the markets with a false enthusiasm and the somewhat heavy handed management of key market signals.
When the going gets weird, the weird become ..... weirder.
Fed Leads Unprecedented Push by Central Banks to Flood Market With Dollars
Oct. 13 (Bloomberg) -- The Federal Reserve led an unprecedented push by central banks to flood the financial system with dollars, backing up government efforts to restore confidence and helping to drive down money-market rates.
The ECB, the Bank of England and the Swiss central bank will auction unlimited dollar funds with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said today. All of the previous dollar swap arrangements between the Fed and other central banks were capped.
``By providing unlimited dollar funds they are acting on the back of the G-7 plan to ensure the system is fully liquidized,'' said Lena Komileva, an economist at Tullett Prebon Plc in London. ``We're going to see even more liquidity provided and more aggressive rate cuts are coming.''
Leaders of the world economy have redoubled efforts to unfreeze credit markets and avert the worst global recession in thirty years after last week's 20 percent slide in the MSCI World Index. Policy makers from the Group of Seven nations pledged at the weekend to take ``all necessary steps'' to stem a market panic and European governments are today announcing plans to avert a banking collapse across the region.
The cost of borrowing in dollars for three months today fell to 4.75 percent from 4.82 percent, the highest this year. The rate for euros over the same timeframe declined to 5.32 percent from 5.38 percent.....
``Taken together, the latest moves increase the chances that we will begin to see some relaxation of the intense funding stresses,'' Dominic Wilson and other economists at Goldman Sachs Group Inc. wrote in a note today. ``This is because bank solvency risk should decline as the government offers protection.''
As well as slashing interest rates in concert last week, global central banks are expanding their toolkits to push down money-market rates. The Fed on Oct. 7 said it will create a special fund to buy U.S. commercial paper and the ECB last week said it would offer financial firms unlimited euro funds. The Bank of England is scheduled to revamp its own money-market operations later this week.
Posted by Jesse at 10:38 AM :verbeug
12 October 2008
Long Term DJIA Adjusted for Inflation - Quo Vademus?
Updated forecast from Steve Williams at CyclePro.
Keep in mind that these figures are adjusted for inflation.
Another way to look at this is through the Dow-Gold ratio. Our own forecast is that this measure reverts to the longer term support level of 3.66. Whether this is at Dow 3,660 or 36,660 will help to answer the question: inflation or deflation?
A return to 1.9 for a period of time is also possible.
Posted by Jesse at 8:49 PM :verbeug
fraily mentions adens towards the end of his weekly
-> Posted by overton @ 11:48 am on October 13, 2008
towards the end of mp3 talking the metals usd
Bank bail-out: 'Inflation and stupidity are here to stay' :rolleyes
Jeremy Lang at Liontrust argues that the interference by governments of the banking system will make matters much worse.
By Jeremy Lang
Last Updated: 2:18PM BST 13 Oct 2008
Jeremy Lang: Inflation and stupidity are here to stay.
The modern banking model is broken. But first the old model; how did it work? Banks should be conservative ventures. They rely on trust and permanence to work. Banks persuade enormous numbers of people to trust them with their cash. They then lend that cash to other people, trusting them to pay them back. They earn money by charging more to lend than it costs for them to borrow. Simple.
But banking has always carried an unavoidable risk. Banks essentially borrow short and lend long. Borrowing short means banks promise their lenders (traditionally their depositors) that they can have their money back pretty much any time they like – at short notice. Lending long means banks promise the people who borrow from them that they won’t have to give that money back for a long time......
......This new model of banking has allowed banks to grow much faster than their deposit base and much faster than their own buffer zone of capital. This has made them much bigger and allowed them to earn much bigger profits. But the new model is flawed.
First, borrowing from wholesale markets has turned out to be quite different from borrowing from depositors. It is much more flighty and fast moving. So a historically very rare thing – a run on bank deposits – has been transformed into a frighteningly easy thing – a run on a banks’ wholesale funding.
Second, creating and then selling on loans has produced a whole new set of short-term orientated incentives for banks to pay too little attention to credit risk on individual loans. The new securitisation industries created an almost insatiable demand for new loans, regardless of risk. Securitisation also thrived on the myth of diversification – a magical wand whereby individually risky loans, when packaged together and “diversified”, can be used to create a package which miraculously has lower risk.
Third, the machine which creates and then sells on loans, in theory, didn’t need as much safety margin capital to back it up. That was until the machine seized up. Then the old laws of banking reappeared. After over a decade of the lunatics running the asylum banks now have too many loans which are likely to default and too little safe capital to cover the losses, backed by a much more risk averse and fickle bunch of lenders. 1+2+3 = 0........
.....Markets were working fine and doing what they have always done. When new forms of risk-taking work, markets reward them, when they don’t work markets kill them. Markets create and destroy. And markets are, quite rightly, destroying at the moment. This natural process changes behaviour and stops stupidity dominating :rolleyes (I hope so).....
.....In a nutshell, this means stupid risk taking gets rewarded, and paid for, by those of us who are not stupid. This provides a big incentive for us all to behave stupidly. Markets would not let this happen – when too many people behave stupidly, the market, metaphorically, will kill them......
.....But I can see where the risk is coming from. The nub of the problem we face is too much debt. This can be “corrected”, simplistically, in two ways. Route 1: The markets can be allowed to work and everyone will save more, spend less and pay off some of their debts. We collectively will have “learnt our lesson” and will move on in a calm, rational way. This means a recession and a resetting of living standards to a lower level. This means a long period of stagnation as we work our way through the past excesses. It is not the end of Capitalism.
Second, the markets are hampered and governments print money to apparently buy our way out of problems. In my view, this allows moral hazard to run rampant (for which we will ultimately pay) and means inflation will accelerate. If you have too much debt, and you are not prepared to take Route 1, then the alternative is devaluing the debt pile in real terms by growing the economy with inflation......
full story: http://www.telegraph.co.uk/finance/...re-to-stay.html
Henri (usagold.com 13October2008; 10:17)
@OVS Not at all dear sir…I may be a gold man but not a big cheerleader for Goldman…quite the contrary. My belief is that Morgan is the head of the serpent and GS is his intermediary by which he passes orders to the US PTB. Morgan is also suddenly the holder of the biggest bag of hmmm shall we say polyunsaturated bad stuff that they will force the US govt to buy.
Mon 13 Oct 2008
Goldman Sachs: Hey, We Were Wrong About $200 Oil
Posted by alyx under commodities
Goldman Sachs finally decided the whole “super-spike” thing was a little off, and oil prices might not see $200 this year after all. Arjun Murti, Mr. Superspike himself, had retracted the $200 forecast last month and replaced it with a forecast of $140, but now they’ve got two new guys looking at the charts, one of whom apparently spotted a downtrend and said HAY LET’S GO WITH FITTY BUCKS.
So yeah, now, Goldman says oil $50 by the end of the year. From Abu Djabi’s National:
“We clearly underestimated the depth and duration of the global financial crisis and its implications (for) economic growth and commodity demand,” a team of Goldman commodity analysts led by Jeffrey Currie and Giovanni Serio, wrote today in a research report. “Should the financial and evolving economic crisis cut deeper into (oil) demand, the market could fall as low as $50 a barrel.”Can someone just come out and say they’re not sure? Honestly, would it kill you to admit it? It could go down further. Or it might go back up. Could even stay where it is. We’re not sure. This, actually, is going to be the LOLFed forecast for oil. And for all stocks and commodities. The Heisenberg Uncertainty Principle of markets, if you will.
....na ja man kann ja die Meinung ändern - erst mal umschichten :o dann ändern :gomad
Pete G. (usagold.com 13October2008; 11:32)
The Morning Gold Report Unlimited Money
Oct 13 a.m. (USAGOLD) — The G7 met over the weekend with the hope of reinstilling confidence in global financial markets. The communiqué was the standard “we’re prepared to do whatever is necessary” message. Of course no details were provided, but what is abundantly clear at this point is that they’re prepared to throw as much money at the crisis as they possibly can.........
Gold Market Movers:
Germany unveils €500bn rescue plan
Spain provides up to €100bn of bank guarantees
UK launches £37bn bank rescue
Gold will thrive on dollar flight
Wall Street Skyrockets as Government Pledges Bank Aid; Dow Jumps More Than 900 Points-
APWall Street stormed back from last week's devastating losses after major governments announced further steps to support the global banking system,
including plans by the U.S. Treasury to buy stocks of some banks. The Dow Jones industrials rose more than 900 points,
and all the major indexes gained more than 11 percent.... » read more
S&P 500 1,003.35+104.13+11.58%
merci @Peter7 :)
Marc Faber - Stock Market Rebound - US Collapse
ein Nachzügler ;) vom 10. Oktober
Rogers: G7 Should Leave Economies Be
“us treasure to invest in 9 major us banks”
October 13th, 2008
Posted in Metals Links
us treasure to invest in 9 major us banks
October 13th, 2008
U.S. Treasury Said to Invest in Nine Major U.S. Banks (Update2)
By Robert Schmidt and Peter Cook
Oct. 13 (Bloomberg) — The Bush administration will announce a plan to rescue frozen credit markets that includes spending about half of a total of $250 billion for preferred shares of nine major banks, people briefed on the matter said.
The companies are Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp., and Bank of New York Mellon Corp., the people said. One of the people also said Merrill Lynch & Co. will receive an investment.....
13 October 2008
How Did Our Credit Bubble Reach Such Destructive Proportions?
Posted by Jesse at 9:02 PM .:verbeug
Mon 13 Oct 2008
Right In The Kisser!
Posted by Jason under fail , hank paulson
The Germans have spoken, and the Germans are not pleased. From the NYT:
The financial fallout outside the United States from Lehman Brothers Holdings’ bankruptcy has been about $300 billion, the head of Germany’s financial regulator said on Monday.Oh, right, because none of your Teutonic Fails have had anything to do with your banks’ own poor investments. Always want to blame America for your own problems, huh? Well let me tell you something, Herr Sanio, if it weren’t for America you’d be speaking German right now!
Er, anyway, there’s no need to rub our faces in it. I am sure that, if he could take a mulligan, Hank would go back and prop up Lehman with his own back if he had to, to keep it from failing. Tell you what, Germany: next time one of the oldest investment banks in the country teeters on the brink of utter ruin, we’ll do everything we can to make sure it stays solvent. We’ll prove it next week when Goldman Sachs makes a surprise announcement that it is out of money. Will that make it up to you?
...ziemlich zynisch :rolleyes allerdings sollte GS belly up gehen :bang aber das wird Herr Paulson nicht einmal im Traum zulassen :mad
Mon 13 Oct 2008
Equity Stakes A-Go-Go
Posted by alyx under all ur bankz , bailout
So some details are coming out: the Treasury is going to buy preferred shares in nine large banks, spending about $250 billion dollars out of its $750 billion pot. This is the wild part: CNBC says Treasury is doing this whether the banks like it or not, and some of them resisted the idea (ur bankz, give us dem, indeed).
WSJ reveals the identity of five of them:
Mr. Paulson called top U.S. banking heads to a meeting Monday in Washington, people familiar with the matter said. Expected to attend were banking executives including Ken Lewis, CEO of Bank of America, Jamie Dimon, CEO of J.P. Morgan Chase, Lloyd Blankfein, CEO of Goldman Sachs Group; John Mack, CEO of Morgan Stanley; Vikram Pandit, CEO of Citigroup; and Robert P. Kelly, CEO of Bank of New York Mellon.In addition to Bank of America (BAC), J.P. Morgan Chase (JPM), Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C), and Bank of New York Mellon (BK) - Treasury is also investing in State Street, Wells Fargo (WFC) and Merrill Lynch (MER).
Notice they’re preferred shares, which means Treasury’s stake is going to be superior to all the common shareholders out there, who will be finding that the shares they snapped up today suddenly are diluted by probably 10%-15% in value due to the bank issuing new fancy stock to Hammerin’ Hank. Better diluted now than bankrupt later, though, right?
Finanzwerte in Schweiz weiter gesucht - Höhenflug in Asien
10:19 Die Schweizer Börse setzt die Erholung fort. Erneut werden besonders die Finanzwerte gesucht.
Die Aktien profitieren dabei von rekordverdächtigen Avancen an der Wall Street und starken Vorgaben aus Asien. mehr
Former Federal Reserve chairman Alan Greenspan opposed efforts to more tightly regulate the derivatives markets. (Yuri Gripas/Reuters)
Taking a hard look at a Greenspan legacy
By Peter S. Goodman
Published: October 9, 2008
"Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient." — Alan Greenspan, former Federal Reserve chairman, 2004 :rolleyes
George Soros, the prominent financier, avoids using the financial contracts known as derivatives "because we don't really understand how they work." Felix Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential "hydrogen bombs."
And Warren Buffett presciently observed five years ago that derivatives were "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."
One prominent financial figure, however, has long thought otherwise. And his views held the greatest sway in debates about the regulation and use of derivatives — exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street.
"What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so," Greenspan told the Senate Banking Committee in 2003. "We think it would be a mistake" to more deeply regulate the contracts, he added.
Today, with the world caught in an economic tempest that Greenspan recently described as "the type of wrenching financial crisis that comes along only once in a century," his faith in derivatives remains unshaken.
The problem is not that the contracts failed, he says. Rather, the people using them got greedy. (...er sollte doch seine Wallstreet Kollegen kennen :mad) A lack of integrity (...Fremdwort für diese Brüder :mad)spawned the crisis, he argued in a speech a week ago at Georgetown University, intimating that those peddling derivatives were not as reliable as "the pharmacist who fills the prescription ordered by our physician."
But others hold a starkly different view of how global markets unwound, and the role that Greenspan played in setting up this unrest.
"Clearly, derivatives are a centerpiece of the crisis, and he was the leading proponent of the deregulation of derivatives," said Frank Partnoy, a law professor at the University of San Diego and an expert on financial regulation.
The derivatives market is $531 trillion, up from $106 trillion in 2002 and a relative pittance just two decades ago. Theoretically intended to limit risk and ward off financial problems, the contracts instead have stoked uncertainty and actually spread risk amid doubts about how companies value them.
If Greenspan had acted differently during his tenure as Federal Reserve chairman from 1987 to 2006, many economists say, the current crisis might have been averted or muted.
Over the years, Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences......
full story: http://www.iht.com/articles/2008/10...09greenspan.php
.....wenn man sich so zurück erinnert - wie andachtsvoll (fast) alle seinem unverständlichen Genuschel zugehört haben :rolleyes
Registriert seit: 25.05.2008
von den 360 Mrd. Gesamtschaden, den Lehmann reißt, entfallen über 300 Mrd. auf ausländische Gläubiger...
so ein Zufall aber auch.
PS: Es sind korrekterweise nur 8,6% die die Pleiteauktion von Lehman erbracht hat.
...ja wirklich - Zufälle gibt's :rolleyes :dumm
Katz article.. and Sky News…
-> Posted by Goldgrub @ 9:21 am on October 14, 2008
I never watch Sky news , but last week when I was on holiday I watched it a fair bit coz it was piped to our rooms. I couldn’t help but notice how everything on it was absolutely driving the end of the financial world viewpoint. Market crashing, crisis, pollies panicking etc. even when they were saying stay calm .. it was always framed so you’d smell a rat and want to panic.. And every time gold rose… not a mention… you could watch for 2 hours.. not even a price flashed up… but if it dropped.. prices and comments.
As I’d see sky as the most totally controlled channel out there I got to thinking that there’s no way TPTB are losing control of the crash at this stage. If they were they’d tell their lackeys to ignore their loss of control just like they ignore gold. They’re causing it and driving it… deflation scare while they pump like mad. This is still another rinse and repeat until they’re ready cash in on gold as well.
This thought would be in line with this Katz article
I still cant forget the fact the Rothschilds suddenly announced a few years ago that after 200 years they were getting out of the gold business….. Hmmmm..
World Markets Go Insane With Joy--America Commits Economic Suicide
October 14, 2008
Elaine Meinel Supkis
I arrived on this planet exactly 58 years ago. It has been quite an adventure. I have lived through several economic cycles. Just as I went from a baby carriage to a tricycle to two wheeler bikes. then horses and finally to cars, trucks, and tractors, so has my ability to discern and understand basic economic forces has undergone many changes, hopefully upwards due to accumulation of knowledge. And this I know: the frenzy of delirium in yesterday's stock markets was totally insane and a harbinger of the hyperinflation to come as central banks tap into FUTURE taxpayer bases to artificially restart the lending mania which fuels all inflation cycles. This is bad news in the middle of 'good news'. The drunks on Wall Street are happy. They will crash the economic car when they try driving it wildly, while drunk.
Financial Crisis: Gordon Brown calls for 'new Bretton Woods'
He said that British wartime spirit could be crucial in securing such a deal and added that world leaders must show the courage of Sir Winston Churchill to deal with the current crisis.The Bretton Woods negotiations during and after WWII were designed for one purpose only: to restart the UK and French empires that cruelly ruled half of humanity! This project to revamp these vampire empires failed miserably as a rising tide of revolutionaries fought fiercely and heroically to other throw the European aliens. From China to Indochina, from India to Africa, across the planet, one group after another picked up weapons and tore into the French and British overlords and overthrew them.
Occasionally, the US threw its entire weight behind these colonial uprisings. In Korea, this was half-successful. To this day, the US authorities are still extremely unpopular in South Korea. In Vietnam, we fought with terrifying ferocity and bombed, bombed, bombed Vietnam and all of Indochina relentlessly. Literally, in McCain's case.
To fund these dying empires, the US made a deal with them that they could set an artificial peg for their currencies. Germany and Japan were finally included in the Bretton Woods system so they could both grow like crazy and take over the US/UK/French system. They are still quite happy that we did this for them. They will keep us alive so long as we defend them both from their scary rivals who they both tried to annihilate, Russia and China.
Back to Bretton Woods: the US had the majority of the planet's gold hoards after WWII, more than Switzerland. It is comical that both Switzerland and the US are being reduced to beggars due to losing the gold hoards!
So....is Britain asking for us to return to the gold standard? HAHAHA. Or maybe I should write, 'WWWW' which is the icon for 'HAHAHA' in Japan and possibly, China? I don't see the empires of the G7 complex demanding gold be the basis for money making! They want to make infinite funny money and pour it into the Floating Currency stew! They want to have effortless money making with no barriers. They want the Goddess of Inflation to fly like a kite from hell...at 0% interest, of course.
We are entering the realm of international insanity. Everyone is ecstatic. The mania exhibited today is remarkably like a drunken orgy on Mt. Olympus when Pan plays a tune on his pipes and the women scream, tear goats in half with their bare hands and swing the carcass wildly about as they go totally nuts.....
......Paulson has a severe conflict of interest here. He wants to prop up his Gollum Sachs loot and needed the Ring of Power to do this. Finally, he got it thanks to Pelosi and the corrupt Bush regime. Since all of the trade rivals destroying the US industrial base got a promise from Bush and Paulson that the US will NOT try to change trade flows or stop the flood of imports, ALL world stock market are soaring on the hopes of lending to Americans at 0% interest while we buy more stuff, kill more of our own industrial base and spend our way into the cellar.
Instead of playing hard ball to get things righted, the US is playing Santa and going insane. Time for a hippie musical interlude from the British rock band: Status Quo - Down Down (toppop)
status quo - Down Down (UK No.1!! 1975, toppop) Album: ON THE LEVEL (UK No.1, 1975).Down the rabbit hole we go! The obvious and easy solution is to flood the planet with even MORE funny money now that the Derivatives Beast has eaten about $20 trillion? We don't really know how much he ate. We don't know how big he is. Or even WHAT he is! But we know he has eaten a lot of loot. So they cynically think, flooding or even just talking about flooding the planet with more funny money means the Derivatives Beast will be satiated and enough will be left over...the limit being 'infinity'...for us to party onwards and ignore reality.
THIS WILL NOT WORK......
Tue 14 Oct 2008
Open Up The Floodgates
Posted by alyx under bailout
More and more details are coming out about the US direct capital investments in banks; the investments range between about $10 and 25 billion, carry only a 5% annual dividend and strongly encourage banks to find an exit plan (after five years, that goes up to 9%). Additionally, there are likely to be provisions announced that the Fed will guarantee loans banks make to each other, and that FDIC deposit insurance will be, temporarily, unlimited.
Treasury is spending $250 billion up front and President Bush says he’s going to petition to have another $100 billion released to Hammerin’ Hank as soon as possible. Additionally, Erik Skiles sent me a link yesterday from Bloomberg that says the Fed has turned on the spigots full blast, thus ensuring that US and European markets are flooded in dollars. The market’s having the expected reactions this morning - futures are up, Treasuries are way down (because, presumably, we will be flooding the Treasury market with a LOT of them to fund this plan) and Paulson is on TV right now telling us how he doesn’t like nationalizing things, but it’s for the best, it really, really is. :escht
...nicht alle Geschäfte leiden ;)
Although the economy sucks and business is going down in Socialist Amerika, the is one business where teh more suck and teh going down, the better:
It's still a good time to be morally bankrupt.I wonder if I can buy stock in the prostitution business. My droopy 401-K could use a serious uplift right now.
Administrator - merci :verbeug
Who is Henry Paulson?
By Tom Eley
23 September 2008
The plan to rescue the US financial industry arrogates virtually unlimited money and power over the financial affairs of the state to the office of Treasury Secretary Henry Paulson. Paulson is a figure with a long history of intimate connections to the political and financial elite.
In 1970, fresh from the Masters program of the Harvard Business School, Paulson entered the Nixon administration, working first as staff assistant to the assistant secretary of defense. In 1972-73, Paulson worked as office assistant to John Erlichman, assistant to the president for domestic affairs. Erlichman was one of the key figures involved in organizing President Richard Nixon’s notorious “plumbers” unit that carried out illegal covert operations against the president’s political opponents, including espionage, blackmail, and revenge. Ehlichman resigned in 1973, and in 1975 he was convicted of obstruction of justice, perjury, and conspiracy, and was imprisoned for 18 months.
Utilizing his connections, Paulson went to work for Goldman Sachs in 1974. In a 2007 feature, the British newspaper the Guardian wrote, “Not only was he well connected enough to get the job [in the Nixon White House], but well connected enough to resign in the thick of the Watergate scandal without ever getting caught up in the fallout. He went straight to Goldman back home in Illinois.”
Paulson rose through the ranks of Goldman Sachs, becoming a partner in 1982, co-head of investment banking in 1990, chief operating officer in 1994. In 1998 he forced out his co-chairman Jon Corzine “in what amounted to a coup,” according to New York Times economics correspondent Floyd Norris, and took over the post of CEO.
Goldman Sachs is perhaps the single best-connected Wall Street firm. Its executives routinely go in and out of top government posts. Corzine went on to become US senator from New Jersey and is now the state’s governor. Corzine’s predecessor, Stephen Friedman, served in the Bush administration as assistant to the president for economic policy and as chairman of the National Economic Council (NEC). Friedman’s predecessor as Goldman Sachs CEO, Robert Rubin, served as chairman of the NEC and later treasury secretary under Bill Clinton.
Agence France Press, in a 2006 article on Paulson’s appointment, “Has Goldman Sachs Taken Over the Bush Administration?” noted that, in addition to Paulson, “[t]he president’s chief of staff, Josh Bolten, and the chairman of the Commodity Futures Trading Commission, Jeffery Reuben, are Goldman alumni.”
“But the flow goes both ways,” the article continued, “Goldman recently hired Robert Zoellick, who stepped down as the US deputy secretary of state, and Faryar Shirzad, who worked as one of Bush’s national security advisors.”
Prior to being selected as treasury secretary, Paulson was a major individual campaign contributor to Republican candidates, giving over $336,000 of his own money between 1998 and 2006.
Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March, Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.
In the months leading up to his proposed $700 billion bailout of the financial industry, Paulson had already used his office to dole out hundreds of billions of dollars. After his July 2008 proposal for $70 billion to resolve the insolvency of Fannie Mae and Freddie Mac failed, Paulson organized the government takeover of the two mortgage-lending giants for an immediate $200 billion price tag, while making the government potentially liable for hundreds of billions more in bad debt. He then organized a federal purchase of an 80 percent stake in the giant insurer American International Group (AIG) at a cost of $85 billion.
These bailouts have been designed to prevent a chain reaction collapse of the world economy, but more importantly they aimed to insulate and even reward the wealthy shareholders, like Paulson, primarily responsible for the financial collapse.
Paulson bears a considerable amount of personal responsibility for the crisis.
Paulson, according to a celebratory 2006 BusinessWeek article entitled “Mr. Risk Goes to Washington,” was “one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits.” Under Paulson’s watch, that meant “taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities.”
According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert[ed] Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”
Paulson then handsomely benefited from the speculative boom. This wealth was based on financial manipulation and did nothing to create real value in the economy. On the contrary, the extraordinary enrichment of individuals like Paulson was the corollary to the dismantling of the real economy, the bankrupting of the government, and the impoverishment of masses the world over.
Paulson was compensated to the tune of $30 million in 2004 and took home $37 million in 2005. In his career at Goldman Sachs he built up a personal net worth of over $700 million, according to estimates.
After Paulson’s ascension to the treasury, his colleagues at Goldman Sachs carried on the bonanza. At the end of 2006, Paulson’s successor Lloyd Blankfein was handed over a $53.4 million year-end bonus, while 11 other Goldman Sachs executives raked in $150 million in year-end bonuses combined. That year, the top investment firms Goldman Sacks, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns handed out $36 billion in bonuses. At the end of 2007, the executives of the same firms, excepting Merrill, were handed another $30 billion.
....Nachzügler :rolleyes aber es scheint wenige zu stören was dieser Herr Paulson für einen Charakter hat :bad und was für Schaden er schon angerichtet hat :mad:dumm
Alarm 13.10.2008 12:41
Tausende Delfine in Japan getötet
Ungeachtet internationaler Proteste töten japanische Fischer vor ihrer Küste mit Billigung der Regierung derzeit erneut Tausende von Delfinen. Der alljährlichen Treibjagd fallen zwischen 16 000 und über 20 000 Tiere zum Opfer.
Ein Teil des Fleisches der mit Lanzen, Haken und Messern abgestochenen Kleinwale gelangt in den Handel. Tierschützer schlagen jetzt Alarm: "Das Delfinfleisch ist hochgradig quecksilberverseucht", warnte der Delfinschützer Richard O'Barry in Tokio. Die japanische Regierung verheimliche der Bevölkerung das Gemetzel und die extreme Vergiftung.
Tue 14 Oct 2008
Sandy Weill Has A Deal For You!
Posted by alyx under bailout
Former Citigroup head Sanford (Sandy) Weill wants everyone to know that the bailout is a CAN’T LOSE proposition, and he took his case to GOOD MORNING AMERICA today:
“I think the taxpayer’s going to make money on this, but most importantly, it frees up the banking system,” Weill said in an exclusive interview with “Good Morning America.”How comforting! The man who led the push to get rid of Glass-Steagall* and thus can be considered to have laid part of the foundation of this house of cards says that borrowing money to nationalize the banks is a stellar idea. Because of ARBITRAGE. Well, hell, why weren’t we borrowing money in Japan at zero interest rates and loaning it out at 7% in Australia the last few years? That national debt could’ve been dwindling like whoa if only we’d had this brilliant idea before!
* - does any of this sound familiar? The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the “finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics…” These industries succeeded in their two decades long effort to repeal the act.
....die bringen es fertig. dass man nix mehr von der Börse wissen will :rolleyes:o
eigentlich geht es den Chartisten besser - haben nix mit miesen Charakteren, Beschiss, Gier usw. zu tun :cool
....so ist's gut :)
Paul Krugman: Gordon does good
By Paul Krugman
Published: October 13, 2008
Has Gordon Brown, the British prime minister, saved the world financial system?
O.K., the question is premature - we still don't know the exact shape of the planned financial rescues in Europe or for that matter the United States, let alone whether they'll really work. What we do know, however, is that Brown and Alistair Darling, the chancellor of the Exchequer, have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up.....
.....This sort of temporary part-nationalization, which is often referred to as an "equity injection," is the crisis solution advocated by many economists - and sources told The New York Times that it was also the solution privately favored by Ben Bernanke, the Federal Reserve chairman.
But when :bad Henry Paulson :bad the U.S. Treasury secretary, announced his plan for a $700 billion financial bailout, he rejected this obvious path, saying, "That's what you do when you have failure." Instead, he called for government purchases of toxic mortgage-backed securities, based on the theory that ... actually, it never was clear what his theory was......
.....At a special European summit meeting on Sunday, the major economies of continental Europe in effect declared themselves ready to follow Britain's lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts. And whaddya know, Paulson - after arguably wasting several precious weeks - has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities (although he still seems to be moving with painful slowness)......
.....It's hard to avoid the sense that Paulson's initial response was distorted by ideology. Remember, he works for an administration whose philosophy of government can be summed up as "private good, public bad," which must have made it hard to face up to the need for partial government ownership of the financial sector.
I also wonder how much the FEMAfication of government under President Bush contributed to Paulson's fumble. All across the executive branch, knowledgeable professionals have been driven out; there may not have been anyone left at Treasury with the stature and background to tell Paulson that he wasn't making sense......
full story: http://www.iht.com/articles/2008/10...n/edkrugman.php
:dumm wie bescheuert muss man denn sein um nicht zu sehen, dass Paulson nur für seine Mannschaft einsteht und ihm das Wohl der Bevölkerung so was von egal ist - Bernanke scheint auch nur sein Hampelmann zu sein :rolleyes
...stay flexible ;)
posted by fabric
The federal government today announced that it is changing its emblem to a CONDOM because it more accurately reflects the government's political stance. A condom allows for inflation, halts production, destroys the next generation, protects a bunch of pricks, and gives you a sense of security while you're actually being screwed!
JPMorgan: Hey, We’re Still Making Money Over Here
Posted by alyx under jamie dimon
Not WaMu, nor Bear, nor crunching of credit can stop Jamie Dimon and J.P. Morgan (JPM) from reporting a profit!
Third quarter earnings per share came in at 11 cents, which doesn’t beat what was expected for this quarter originally (37 cents) but certainly beats the pants off analysts’ revised estimates (which were for a loss of 21 cents). However, they missed on revenue ($14.74 bn vs expected $16 bn). But hey, in this climate, if you can beat on earnings even on lower revenue, I gotta withhold the vitriol. They took another $3.6bn in in writedowns, which brings their subprime-slime writedown total to just over $12bn. That’s about 1/4 of what Citigroup (C) has written off.
Much like everyone, Dimon fears forecasting:
“Given the uncertainty in the capital markets, housing sector and economy overall, it is reasonable to expect reduced earnings for our firm over the next few quarters,” Jamie Dimon, Chairman and Chief Executive Officer, said in a press release.Something tells me they can’t keep Magic 8-balls in stock in the toy stores in New York City these days, what with nobody being able to put together a financial model for Q4. I just asked mine what it saw for JPM for Q4 ‘08 and for ‘09 and it is like, ask again later. Hey, keeping with the glass half full theme, at least that’s not a bearish assessment!
New York Glams Up in 'W' Premiere
myanti posted 10 hours ago from www.aceshowbiz.com [flag] On Tuesday, October 14, Lionsgate Films present their forthcoming biopic about U.S. President George W. Bush from filmmaker Oliver Stone. [link]
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