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lunar 12.12.2008 16:11

Fri 12 Dec 2008

Ben, You Make It Hard To Love You Sometimes

Posted by Jason under bailout , bernanke , fail
[3] Comments

Known terrorist news organization Bloomberg News had filed a FoIA suit * against the Fed, demanding to know what, exactly, the central bank had spent over $2 trillion in emergency loans on, and what kind of assets they received as collateral. Unreasonable, right?

The Fed sure seems to think so. They read the suit and they were all, “Nuh uh, we ain’t gotta tell you nothin’. Trade secrets! Trade secrets!” and Bloomberg was like, “Public shaming!” and then things degraded into a slapfight. One is inclined to wonder, though: what cost $2 trillion and is shamefully hidden by Ben? Who got these loans? The list of who didn’t get these loans might be shorter. And what assets are the Fed sitting on, that are worth $2 trillion? Where are they being kept? Does the Fed have a giant impound lot out back that is filled with yachts, solid gold busts of famed bank CEOs, and trophy wives stored in argon so they don’t wrinkle? Post your theories in the comments.

* Fed Refuses to Disclose Recipients of $2 Trillion in Lending
By Mark Pittman

Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression......

:gruebel das jetzt Doppelmoral :confused:rolleyes

lunar 12.12.2008 17:14

December 12, 2008

Look up tonight for a spectacular treat in the sky

Biggest full moon for years enhanced by shooting stars

Paul Simons

If the full moon tonight looks unusually large, it is not your imagination – it is the biggest and brightest full moon to be seen for 15 years.

Each month the Moon makes a full orbit around the Earth in a slightly oval-shaped path, and tonight it will swing by the Earth at its closest distance, or perigee. It will pass by 356,613km (221,595 miles) away, which is about 28,000km closer than average.

The unusual feature of tonight is that the perigee also coincides with a full moon, which will make it appear 14 per cent bigger and some 30 per cent brighter than most full moons this year – so long as the clouds hold off from blocking the view.

The next closest encounter with a full moon this large will not be until November 14, 2016.

In addition to this lunar flypast, much of Britain may also be treated to a strange phenomenon known as the moon illusion. As the Moon rises in the late afternoon, it will appear even larger as it lies close to the horizon. Psychologists have tried to explain this as a trick of the eye, as the landscape on the horizon appears to make the Moon loom much larger, an effect that disappears as the Moon rises above the horizon, although viewing it through a tube, such as a toilet roll, can make it look large again.

With the Moon approaching so close to the Earth, its gravity will pull a slightly higher tide than normal for a full moon. This so-called perigeal tide adds about 0.5m (1.6ft) to the high-water mark, and with freshening southwesterly winds forecast, this may cause some flooding, especially along parts of the South West coast.

Tonight’s full moon is also notable for rising to its greatest height in the night sky for the entire year, lying almost overhead at midnight. This is because we are approaching the winter solstice, on December 21, and thanks to the tilt of the Earth the Moon appears at its highest, as the Sun is at its lowest.

Another astronomical treat that could be seen tonight and for the next two nights is the annual Geminid meteor shower, one of the year’s best displays of shooting stars. Up to 100 meteors an hour can fly across the sky. The meteors, which are easy to spot with the naked eye, appear to shoot out from the constellation Gemini, hence their name, but they can be seen all over the sky. However, with a full moon so bright, the best place to look is away from the Moon.

Meteor showers happen when the Earth passes through clouds of debris shed from comets. As the tiny fragments smash into the Earth’s upper atmosphere at about 100,000mph, they burn up in streaks of light.

For reasons that are not understood, the Geminid meteor showers are tending to grow stronger each year. leider sehr bewölkt bei uns :(

Größter Vollmond des Jahres Erdtrabant steht am 12. Dezember im Perigäum

An diesem Freitag ist der Vollmond so groß und hell wie noch nie in diesem Jahr. Denn der Erdtrabant erreicht am 12. Dezember sein Perigäum, den erdnächsten Punkt seiner Umlaufbahn. Am Abend noch nahe am Horizont, steigt er während der Nacht bis fast zum Zenit und macht dabei die Nacht fast zum Tage.....

Der Mond im Apogäum und im Perigäum

© Anthony Ayiomamitis Stärkere Gezeitenkräfte

......Der im Perigäum stehende Mond scheint jedoch nicht nur heller, er übt auch eine stärkere Anziehungskraft auf die Erde aus. Dadurch sind auch die Gezeiten in dieser Phase ausgeprägter als sonst. Immerhin bis zu 15 Zentimeter kann die Flut dadurch in einigen Gegenden höher ausfallen als sonst. Überschwemmungen sind aber nicht zu befürchten, betont die amerikanische Meeresforschungsbehörde NOAA.

In jedem Falle aber wird der Mond diese Nacht zu einer der hellsten des gesamten Jahres machen. So dicht an der Wintersonnenwende, dem 21. Dezember, steht er nachts besonders hoch am Himmel und sein Licht erreicht nahezu jeden Winkel.
(NASA, 12.12.2008 - NPO)

lunar 12.12.2008 17:45

More Fun with Levered ETFs

by: Paul Kedrosky December 12, 2008 | about stocks: EEV / QID / SDS

Paul Kedrosky

Lately I find myself repeatedly explaining how levered ETFs work, so I thought I would help myself out by putting up a table that gets the point across empirically. The gist: Such products reset on a daily basis, so you are really levering up only on a single-day’s numbers, not on a multi-day trend. The difference can be highly significant, as this table shows.

Note: I’m not saying the following is bad. It’s just something you need to be sure you know when trading levered ETFs. They don’t always act the way you might naively think they do.

lunar 12.12.2008 20:07


Hi Bill -

Unfortunately, I think I've figured out why Paulson and friends have not spent the TARP money on buying up the mortgage backed securities and has designated large chucks to the banking cartel without strings.

I believe it has to do with the coming derivatives/monetary crash and the reallocation of money after the crash.

When the market rigging finally fails (or when Atlas Shrugs) the entire system will be wiped clean....nothing will be left of individual wealth. All the FDIC, SIPC, AIG, etc insurance mechanisms will fail because none of them have the reserves to live up to their insurance promises. Sheila Bair can insure a zillion dollars in FIDC backed crap but when it's time to pay up she doesn't have the money. Congress holds the power of the purse strings.

The death (default) of the dollar will assure the nationalization of every foreign held asset around the globe and end international trade while each and every country figures out how to fend for themselves monetarily. The US Government will be in charge of deciding on a new currency for their citizens and how to allocate it. I believe we will issue a new commodity backed currency to be used domestically only. In this way problems like future payments on Social Security will be solved instantly as the new money is distributed via Social Security payments and other domestic government obligations.

This is why Pelosi and friends approved the $50B green technology auto bill and why they have not allocated any of it yet. That money will be issued in the new backed currency after the crash to help rebuilt the domestic auto industry.

Now here's where Paulson and the bankers have pulled off a mini coup. By not issuing the TARP money but pledging it to selective banking cabal members they are trying to maintain control of the monetary system, post-crash. If I am correct, I think the bankers are ready to crash the system now and IF they can hang onto that Government TARP pledge money, they can remain the monetary powerhouse driving our economy.

Ultimately, I'm not sure they will be able to hold on to that money since they are to blame for the crash...that's why the bankers want the auto maker bankruptcy to be the catalyst for setting off the derivative bomb. They are trying to shift the blame away from themselves.

I doubt their plan will work as there are already too many citizens pointing the finger directly at them.

Buckle up if GM doesn't get the bailout because Atlas will finally Shrug!

....ohne Wertung :cool

lunar 12.12.2008 22:59

12 December 2008

Comparison of 1928-32 and 2007-11

There are important differences in the nature of the declines. The current series looks like a bear market in the form of 1973-4 whereas 1929-32 was much more precipitous. This may be attributed to the extraordinary actions of the FED and Treasury. However, this may only soften the blow and not the outcome, most likely adjusted for inflation.

The Intraday Volatility matches up nicely so far as we have matched them Peak to Peak without regard to pricing. It will be in the market action going forward where the model will be assessed here.

Posted by Jesse at 2:22 PM :verbeug


lunar 13.12.2008 09:38

Zitat von Hoka

Switzerland may have to print money to stave off deflation

The Swiss National Bank has cut interest rates to 0.5pc and opened the door for emergency stimulus, becoming the first country in Europe to flirt with zero policy rates.

South Korea cut to 3pc and Taiwan cut to 2pc, the lowest in 30 years. Both countries are facing a collapse in exports to China and traditional markets in the West.

Thomas Jordan, a board member of the SNB, said the bank was mulling extreme measures to stabilise the financial system and cushion the economy as it falls into recession next year.

"We could engage in quantitative easing and we could intervene in foreign exchange markets or we could buy up bonds and try to influence long-term interest rates. All these options are open and we're not limited in any way in choosing from among these instruments," he said.

Quantitative easing is the tool pioneered by the Bank of Japan to stave off deflation. It is tantamount to printing money.

David Bloom, currency chief at HSBC, said the shift in policy was breathtaking. "The SNB are the hard men of central banking; they are even harder than European Central Bank. What they are saying is that inflation is no longer a problem, it's the solution. They want stimulus any way they can get it."


....."The crucial difference is that the Swiss own half a trillion dollars of external assets. They have a current account surplus of 16pc of GDP. This is their ace in the hole. If push ever comes to shove, the Swiss taxpayers have the money to pay," said Mr Bloom.......

:schwitz das kann ja heiter werden :rolleyes

lunar 13.12.2008 11:07

US Dollar Weekly Chart with COT for the Week Ending 12 December

Posted by Jesse at 4:51 PM :verbeug

lunar 13.12.2008 11:31

Weekend Edition
December 12 / 14, 2008

What is to be Done?

The End of the Washington Consensus


Wall Street’s financial meltdown marks the end of an era. What has ended is the credibility of the Washington Consensus – open markets to foreign investors and tight money austerity programs (high interest rates and credit cutbacks) to “cure” balance-of-payments deficits, domestic budget deficits and price inflation. On the negative side, this model has failed to produce the prosperity it promises. Raising interest rates and dismantling protective tariffs and subsidies worsen rather than help the trade and payments balance, aggravate rather than reduce domestic budget deficits, and raise prices. The reason? Interest is a cost of doing business while foreign trade dependency and currency depreciation raise import prices......

full story:

Jesse sagt dazu:

13 December 2008

Capitalism II: Brave New World
"The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew." Abraham Lincoln
"All conservatism is based upon the idea that if you leave things alone you leave them as they are. But you do not. If you leave a thing alone you leave it twisting in a torrent of change." G.K.Chesteron
"If you don't like change, you are going to like irrelevance even less." US Army General Eric Shinseki
When you have thoroughly made a mess of things, and realize that it is time for a change, one goes to wise mentors and more experienced friends if you are lucky enough to have them for constructive and sound advice.

But there are times when hearing from your critics as well is a good idea, because they will often tell you things too difficult for a friend to say openly and directly.

This essay below by Michael Hudson and Jeffrey Sommers strikes me as such a critical analysis of the US economy as it exists today. It is useful because it looks at the US from the eyes of the non-G7 countries through the lenses of what the authors call 'Managed Capitalism' in contrast to what they call Neo-Liberalism but what I might tend to refer to as "Financial Capitalism."

There are many things with which I disagree in this essay especially in terms of recommended courses of action in the particular. But there are a significant number of pointed observations "from the other guy's point of view" that makes it worth reading, carefully.

We need to recognize that Japan, China, and many countries today are hardly free markets, and that they embrace a very strong industrial policy formed by central bureaucracies. We may even have more of a structure such as this than we realize, with our outsized financial sector. These countries more are a form of Managed Capitalism.

My argument against that form of economic structure is that centralized decision making, especially as it becomes more particular, tends to get it wrong much more often than consensus decisions widely spread amongst market participants IF information is transparently dispersed. This is because bias and temperament tend to be blended out to the tails. Yes you may get a run of great leadership every so often in a centrally planned economy, but you will often enough get a Hitler, Stalin, or a Mao, and the damage they can do to a country is measured in the millions of the dead in addition to economic and structural loss.

To me, financial capitalism is a clear excess, a distortion of free market capitalism in the same way that managed capitalism is. They both assert unbalancing forces on the course of the neural structure of natural decision making and value transmission to productivity.

But I cannot argue with many, many of their observations. I do not think the US will willing change. Why should it? But I do think the change will first occur in the international trade mechanisms, with the displacement of that lynch pin of the Washington consensus, the dollar as reserve currency.

It is useful to read this not because you agree with it, but because a number of other countries who are your critics will agree, and change is coming. That is without doubt. The current financial system is inherently unstable because the self-correcting and price discovery mechanisms are broken.

I suspect the solution for the US will be to move back to a more progressive, less financial oriented and more productive economy. The cult of pervasive globalization is a hoax, an excuse to centralize power in a New World Order, that is not possible to implement in a world in which people have choices, and wish to maintain societies with the values and policies of their choosing.

If the US stays on its current course and seeks to maintain the status quo the next step will an attempt to establish stronger central planning in a New World Order. One can already see those in the Anglo-American establishment and the Neo-cons trying to pave the way for it.

It is true always and everywhere that if you surrender the management of your currency to another you have handed over the keys to your fiscal and societal freedom, because the control of the money strikes to the heart of your economy in ways that permeate interest rates, industrial production, health care, and personal freedoms.

As an aside, it will be interesting to see how Europe progresses in this, and whether the European Union will grow and transform, or fragment. The great variable will be leadership and vision.

Change is coming, whether we like it or not. It will be coming from the outside if not from within.

The days of both Soviet and Dollar imperialism are ending. The latest attempt to establish a New World Order is failing.

The 'big countries' may be dismantling neo-colonial empires once again, and planning will be moving from a central planning for the world at the Federal Reserve and Washington, as well as Moscow, and back to countries who for good or ill will be trying to manage their own economies for themselves.

"Few will have the greatness to bend history itself; but each of us can work to change a small portion of events, and in the total of all those acts will be written the history of this generation." Robert Kennedy

lunar 13.12.2008 13:45

...Weekend :rolleyes
Fed regulators shut 2 banks in Georgia, Texas

Friday December 12, 7:38 pm ET
By Sara Lepro, AP Business Writer
Regulators close 2 banks in Georgia, Texas, bringing bank failures to 25 in year to date

NEW YORK (AP) -- Regulators on Friday closed Haven Trust Bank in Georgia and Sanderson State Bank in Texas, bringing to 25 the number of U.S. bank failures this year.The Federal Deposit Insurance Corp. was appointed receiver of Haven Trust Bank, based in Duluth, Ga., and Sanderson State, with one office in Sanderson, Texas......

full story:

lunar 13.12.2008 13:48

The Best and Worst of 2008- BusinessWeek.comFrom technology and autos to global markets and big business, here's what worked -- and what didn't -- this year...» Read more

lunar 13.12.2008 22:05

Sat 13 Dec 2008

Weekend Randoms

Posted by alyx under links

Separated At Birth Automaker Edition - The Epic Fail Guys and The Three Stooges:

The above images are from an excellent article Caroline B sent me, Atlas Didn’t Shrug, He Bailed.” There are some interesting points in the article which you may not have considered - e.g., if the media seems to you to be convinced the fail of the automakers is catastrophic, maybe consider what part of their advertising sales consists of auto-maker commercials - and this line that, had it actually happened, would’ve given me some respect for whichever CEO asked it even if I don’t want to bail him out:
I was surprised (not really) no one asked the Congressman, in light of the current financial crisis caused by many of the laws that he voted on, if he would cut his salary by 50 percent, cut his office budget by any significant amount, or forgo all pork-barrel spending in his home district. I suspect such questions would at best be met with the same stunned silence he received from the triumvirate of CEOs, or some cynical form of theatrical sound bite indignation.

Do a solid, and bust your Congressman’s hump this weekend if you have some free time. Find something boneheaded they voted on, and let them know. Write someone in your state legislature and demand to know why they blew all your money and Goldman Sachs thinks your state is going to default on its debt. This “crisis” has given too many in government an attitude of both superiority and impunity, and the fact that we all want to blame Hank, Ben and corporations is letting many within the Beltway off way too easy.

* steps off soapbox *

Just to clean up the week’s loose ends from the so-tired-of-hearing-about-them and wish-they-would-go-away departments, the automakers hung around Capitol Hill this week pestering everyone they could and it looks like they will be imminently liberating $8 bn from the TARP. That number is less than GM wanted for themselves, plus when you consider that Congress was able to extract a few concessions, but - at least in my expectation - the outgoing administration won’t bother to take the time and effort to get any concessions at all, you know you can expect the Automakers Formerly Known As The Big 3 back on the Hill in January.

And to cleanse the palate, here’s some fluff. This morning, DrudgeReport flashes a headline about socialites ruined by a weekend at Bernie’s.
Shock and panic spread through the country clubs of Palm Beach and Long Island after Bernard Madoff, a trading powerbroker for more than four decades, allegedly confessed to a fraud that will cost his wealthy investors at least $50 billion – perhaps the largest swindle in Wall Street history.

The article doesn’t name names, but at LOLFed, the answer to the blind item is always Tinsley Mortimer. (Feel free to share your thoughts on which celebs you hope were part of Madoff’s collateral damage.)

And then there’s this, via my friend Leslie:

lunar 13.12.2008 22:10

1 Anhang/Anhänge
Jellyfish gone wild ruin tourist spots, report says

Fri Dec 12, 6:16 pm ET

......"There is clear, clean evidence that certain types of human-caused environmental stresses are triggering jellyfish swarms in some locations," William Hamner of the University of California Los Angeles says in the report.

These include pollution-induced "dead zones", higher water temperatures and the spread of alien jellyfish species by shipping.....

full story:

Jellyfish are seen in the Gulf of Mexico in this undated handout. Huge swarms of stinging jellyfish and similar slimy animals are ruining beaches in Hawaii, the Gulf of Mexico, the Mediterranean, Australia and elsewhere, U.S. researchers reported on December 12, 2008. The report says 150 million people are exposed to jellyfish globally every year, with 500,000 people stung every year in the Chesapeake Bay, off the U.S. Atlantic Coast, alone.

(Monty Graham, Dauphin Island Sea Lab/Handout/Reuters)

lunar 14.12.2008 11:39

lunar 14.12.2008 19:45

Zitat von cherry

Interview mit Gerald Celente

Wir werden die grösste Depression überhaupt erleben, viel schlimmer als die sogenannte „Grosse Depression“ der 30ger Jahre!

Gerard Celente ist ein Trendvorhersager, Buchautor und Chef des Trend Research Instituts, welches er 1980 gegründet hat. Berühmt ist er für seine richtigen Vorhersagen von Weltereignissen, wie den Crash der Börse 1987, den Zusammenbruch der Sowjetunion 1990, die Asienkrise 1997, den Zusammenbruch der russischen Wirtschaft 1998, das Platzen der Internetblase 2000, die Rezession 2001, den Anfang des Goldrausches 2002, den Abstieg des Immobilienmarktes 2005, die Rezession 2007 und die Panik von 2008.

Da wir vor dem Jahresende stehen, wollte ich von Herrn Celente wissen, was er uns für eine Prognose für das Jahr 2009 gibt. Hier das Interview, welches ich am 12.12.08 mit ihm geführt habe:

Freeman: Wie sehen sie die augenblickliche Lage in Amerika?

Celente: Das Finanzsystem ist völlig zusammengebrochen. Die einzigen zwei Sachen welche die Regierung noch macht, um das Land am Leben zu erhalten, ist entweder mehr Geld zu drucken oder die Zinsen zu senken. Wir nennen es den Bernanke Doppelschritt, es gibt nur zwei Schritte die der FED-Chef machen kann. Keiner dieser beiden Massnahmen werden den Kurs ändern und den Wirtschaftsabsturz aufhalten.

Es wird eine neue produktive Kapazität benötigt, wie zum Beispiel in den 90ger Jahren, als wir in eine Rezession gingen, kamen wir durch die Internet-Technologie wieder raus. Alles wurde auf das Internet umgestellt. Das war reell. Es gab wohl eine Spekulation in den Märkten, aber das hatte nichts mit der Existenz des Produktes zu tun. Es war eine produktive Kapazität. So etwas kann man nicht mit einer monetären oder fiskalischen Anregung auslösen.

Zum Beispiel, wir haben einen neuen Präsidenten, der 2.5 Millionen Arbeitsplätze schaffen will, wie er sagt. Wo will er das Geld dafür hernehmen? Er kann es nur drucken. Mit was wir hier konfrontiert sind, ist eine Hyperinflation wie damals in der Weimarer-Republik, das kann auch dem Dollar blühen.

Ich bin übrigens ein politischer Atheist. Ich glaube nicht an Märchen, ich bin ein erwachsener Mensch. Wenn irgendjemand glaubt, die Politiker werden uns retten, der begeht Selbsttäuschung oder ist ein Kind. Und dieser Selbstbetrug ist sehr ausgeprägt in Amerika. Die Menschen sind sehr hoffnungsvoll, dass der neue Präsident irgendwie eine Veränderung bewirken wird.

Freeman: Wenn man sich die Mannschaft anschaut, die Obama bisher ausgesucht hat, dann gibt es keine Veränderung.

Celente: Richtig, aber nicht nur das, wie kann es eine Veränderung geben, wenn er die selben Leute ausgesucht hat, welche die Krise überhaupt erst verursacht haben? Wie zum Beispiel, Larry Summers, der sein Wirtschaftsberater sein wird, und dieser Timothy Geithner, der Chef der FED von New York. Das sind alles Protegés von Robert Rubin. Summers war in der Clinton-Regierung nach Rubin Finanzminister. Das sind die Leute welche das Glass-Steagall Gesetz zerstört haben.

Freeman: Das Aufheben des Glass-Steagal Gesetzes im Jahre 1999 durch Clinton, ist ja die Hauptursache für unsere Krise, denn dadurch wurde die Trennung der Geschäftsbanken von den Investmentbanken aufgehoben und die totale Liberalisierung eingeführt, was den Banken die unkontrollierte Spekulation wieder ermöglichte.

Celente: Das stimmt genau. Sie wissen offensichtlich Bescheid. Das sind die Leute die das Klima geschaffen haben, damit die ganzen Derivate entstanden sind, wie Credit Default Swaps, SIV’s, CDO’s, diese sogenannten exotischen Finanzinstrumente, die nichts anderes sind als Wetten, es ist ein Spiel wie im Kasino.

Freeman: Glauben sie, die Finanzkrise wird absichtlich gemacht oder ist es ein Versagen?

Celente: Es ist ein Versagen. Es gibt immer dieses Gerede über die Illuminati. Wenn es die Illuminati angerichtete haben, dann sind es wiederum Illuminati die es richten müssen. Es gibt keine einzige Sache, welche irgendeiner dieser Leute mit Erfolg zustande gebracht hat. Nicht ein einziger in seiner Laufbahn. Die haben noch nie was richtig gemacht. Die sind nur durch Inkompetenz und Arschkriechen nach oben gekommen. So passiert es im Staatswesen.

Nur um ihnen etwas Hintergrundinformation zu geben, ich begann meine Karriere beim Staat in Yonkers New York, nach dem Unistudium 1971, eine ordentlich grosse Stadt, mit 300'000 Einwohner. Dann haben sie mich in die Hauptstadt des Staates New York nach Albany geschickt und ich war dort der Assistent des Sekretärs des Senats des Staates New York. Dann habe ich Politikwissenschaft an der St. John Universität doziert. Danach war ich ein Spezialist für Regierungsfragen in Washington, von 73 bis 79, für die Chemieindustrie. Ich kenne mich deshalb im Regierungsapparat aus. Ich hab auch für Reagan und Connoly gearbeitet, war mit den Topspielern zusammen.

Die Menschen haben die Illusion, diese Leute sind gescheiter als alle anderen. Tatsächlich ist es so, wenn man für den Staat arbeitet, dann benögt man als Ausweis, man ist dümmer als alle anderen.

Die andere Realität ist, ich sah in dem Job den ich in Albany hatte, wie die Politiker gekrochen sind, um nach Oben zu kommen. Sie haben sich hochgesaugt. Deshalb zu glauben, diese Politiker wären in der Lage das Problem zu lösen, ist eine Selbsttäuschung. Ausserdem sind alle politischen Organisationen in Wahrheit kriminelle Organisationen, und ich sage das nicht leichtfertig.

Freeman: Aber wussten die nicht, dass wenn Greenspan das Geld so verbilligt, dass das ganze Finanzsystem implodieren würde?

Celente: Die meinten, damit die Leute nicht ihr Geld wegen des Platzen der Internetblase verlieren, ich meine damit die grossen Spieler nichts verlieren, können sie einfach die Zinsen senken, was sie ab März 2000 machten. Seit dem warnten wir in unserem Institut, und es steht in unseren Schriften, was passieren würde, aber niemand wollte es glauben. Wenn wir geschrieben haben, ein Zusammenbruch wird stattfinden, bekamen wir viele Zuschriften mit der Aufforderung, könnt ihr nicht auch mal etwas Positives sagen, könnt ihr nicht mal etwas Nettes berichten?

Es war genau so mit dem Krieg. Wir haben den Leuten vor Beginn des Krieges im Irak gesagt, Amerika wird verlieren. Man wird wohl schnell reingehen und Saddam beseitigen, aber danach wird er als Guerillakrieg weitergehen, der nicht gewinnbar ist. Aber niemand wollte das hören, es wäre unpatriotisch. Und? Nach bald 8 Jahren Krieg, sind wir keinen Schritt weiter.

Wenn ich also von kriminellen Organisationen rede, dann meine ich das nicht als Verleumdung, sondern als Tatsache. Amerika kämpft einen Krieg, der auf falschen Gründen beruht. Ob sie es wussten oder nicht, ist akademisch. Es waren einfach falsche Gründe, und sie töten damit unschuldige Menschen, Frauen und Kinder, was gegen meine moralischen Grundsätze geht. Und sie stehlen die Menschen blind, am helllichten Tag, mit diesen Rettungspaketen. Es gibt diese „sie sind zu gross um zu fallen“ Mentalität, was ja heisst, wir alle sind zu klein um zu retten.

Es ist diese typische englische Titanic-Denke. Die Reichen dürfen in die Rettungsboote, der arme Rest wird im Unterdeck eingesperrt und darf mit dem Schiff absaufen.

Freeman: Was meinen sie wird jetzt passieren, weil sie den „Bailout“ für die Autoindustrie nicht verabschiedet haben?

Celente: Es macht keinen Unterschied. Das war von Anfang an eine Totgeburt. Es wäre sowieso Geld zum Fenster hinaus geworfen. Ausserdem, jeder der ein amerikanisches Auto kauft, der hat sie nicht alle, die sind einfach Schrott. Und die Chefs sind unfähig. Der Vizeaufsichtsratsvorsitzende von General Motors Lutz sagte 2005, wer meint, der hohe Benzinverbrauch wird die Leute davon abhalten SUV’s zu kaufen, weis nicht wovon er spricht. Er lagt völlig falsch. Diese Leute produzieren und reden nur Schrott, seit Jahrzehnten. Es gab mal eine Zeit, wo Amerika tolle Autos baute, aber die ist schon lange vorbei. Es ging denen immer nur um den Profit, wie viel Geld können sie mit dem billigsten Schrott machen.

Freeman: Die Finanzkrise ist über den Atlantik nach Europa rüber und ruiniert die ganze Welt.

Celente: Ja das stimmt. Auf meinen Reisen merke ich leider immer wieder, die Europäer und die Asiaten übernehmen einfach jeden Mist aus Amerika und machen alles nach. So ist die CS und die UBS der gleichen stupiden Gier und Geldmanipulation unterlegen, wie die Banken hier. Vor einem Jahr gab es noch die Frage, ob das Ausland sich anstecken würde. Jetzt hat die ganze Welt eine Lungenentzündung.

Schauen sie sich nur an was in Spanien passiert, mit dieser zügellosen Bautätigkeit, die eine gigantische Immobilienhalde produziert hat. Das Land ist pleite.

Genau so ist es mit den ehemaligen Ostblockstaaten. Ich habe Leute von dort getroffen und musste mit Erstaunen zuhören, wie sie über Investitionen und über Marketing herumposaunt haben, wie wenn sie schon immer im Kapitalismus gelebt hätten. Die haben mit mir gesprochen, wie wenn sie genau wüssten was Sache ist. Sie haben sich mehr wie Raubtiere benommen, wie die Alteingesessenen aus dem Westen. Diese Länder und viele andere haben sich ihren eigenen Wirtschaftshorror eingebrockt und sind alle voll auf die Nase gefallen.

Freeman: Wie sehen sie das Jahr 2009? So wie es aussieht, kommt die Wirtschaft zu einem völligen Stillstand.

Celente: Wir haben gerade unsere Prognose für 2009 veröffentlicht. Wir sagen den völligen Kollaps der Wirtschaft voraus. Am 7. November 2007 haben wir den Finanzcrash und die Panik für 2008 vorhergesagt, und es ist eingetroffen. Nächstes Jahr werden wir den ganzen Einzelhandel zusammenbrechen sehen, dann den Zusammenbruch der gewerblichen Immobilien, usw. ... wir werden die grösste Depression überhaupt erleben, viel schlimmer als die sogenannte „Grosse Depression“ der 30ger Jahre.

Freeman: Wow!

Celente: Und ich sage auch warum. Damals besassen nicht so viele Leute hoch verschuldete Liegenschaften, sie haben sie auch nicht bis oben hin beliehen wie jetzt, sie hatten damals auch keine Kreditkarten, sie waren nicht mit 14 Billionen in der Kreide. Damals gab es einen Handelsüberschuss, jetzt liegt Amerika mit über 700 Milliarden pro Jahr im Minus. Der Staatshaushalt war damals ausgeglichen, jetzt haben wir ein gigantisches Defizit und die Staatsverschuldung liegt bei 13 Billionen, wobei alleine in diesem Jahr 1 Billion neu dazukam.

Am Anfang des II. Weltkrieges, war die USA der Motor der ganzen Industrieproduktion der Welt, wir hatten die höchste Produktivität. Das ist schon lange vorbei. Wir sind eine Nation im Niedergang. Wir gehen in die grösste Depression, und sie wird weltweit stattfinden.

Freeman: Was meinen sie, wird es eine Massenarbeitslosigkeit, mit anschliessenden Aufständen geben?

Celente: Ja, einen Trend zu einer Revolution sehen wir auch. Was in Griechenland im Augenblicklich abgeht, kann überall passieren. Es geht dort nicht um die Erschiessung des 15 jährigen Jungen, sondern die Menschen rebellieren gegen diese völlig inkompetente, durch und durch korrupte politische Kaste, die aber überall so ist. Ich war beim Staat beschäftigt, ich kenne die Grössenordnung der Korruption. In Washington geht es nur darum, Projekte zu lancieren, um sich und die Kumpels zu bereichern, eine Hand wäscht die andere, Geld für die Freunde, das System ist von oben bis unten korrupt.

Freeman: Werden wir jetzt durch eine schmerzhafte ein oder zwei Jahre andauernde Depression gehen und dann aus dem Tal rauskommen?

Celente: Wie sollen wir aus dem Tal rauskommen? Was wird uns da raus helfen?

Freeman: Dann wird es eine langanhaltende Depression werden?

Celente: Ja!

Freeman: Tönt ja gar nicht gut. Wie wird es Europa treffen?

Celente: Europa wird besser dastehen, weil die Menschen dort nicht so verschuldet sind, und sie sind eher in der Lage sich selber aus dem Schlamassel zu ziehen. Amerika hat sich in ein Land voller Weicheier verwandelt, sie können gar nichts selber machen, sie können nur konsumieren, leben in grossen Häusern, fahren grosse Autos und sind selber gross und fett geworden. Sie können einfach nicht aufhören über ihre Verhältnisse zu leben. Sie verbrauchen zu viel Essen, Energie und Raum. Sie wissen nicht wie man bescheiden lebt. Jetzt ist die Party vorbei und den Gürtel enger schnallen wird sehr schmerzhaft werden. Wir haben eine wachsende Schicht von völlig verarmten, was wir so noch nie hatten. Es ist erschreckend. Wir werden eine sehr hohe Arbeitslosigkeit haben, mehr als bei der letzten Depression.

Freeman: Sie sehen demnach keine Lösung wie man da raus kommt.

Celente: Nur wenn wir eine neue Produktionskapazität in Gang setzen können, wie eine neue Technologie für alternative Energien zum Beispiel. Es muss etwas revolutionäres sein, was der neue Motor für die Wirtschaft wird, wie die Entdeckung des Feuers oder die Erfindung des Rades.

Freeman: Die Geschichte zeigt, wenn Machthaber mit grossen Wirtschaftsproblemen konfrontiert sind, dann lösen sie diese nicht, sondern meinen, ein Krieg wird alle Probleme lösen. Gibt es die Möglichkeit wieder eines grosse Krieges?

Celente: Damals nach der letzten grossen Depression, wurde der II. Weltkrieg als Ausweg gesucht. Jetzt leben wir in einer anderen Zeit. Der nächste Krieg wäre einer mit Massenvernichtungswaffen. Die heutigen Kriege kann man nur noch gegen unterentwickelte Länder führen. Es geht nicht mehr um das Abfeuern von Interkontinentalraketen, sondern um einen Guerilla-Hightech-Krieg, so wie wir ihn im Irak und Afghanistan sehen. Nur, die Politiker sind zu allem fähig.

Freeman: Meinen sie damit einen Angriff unter falscher Flagge?

Celente: Ja, die lügen doch dauernd über alles, wie, Saddam hatte Atomraketen und Verbindungen zu Al-Kaida. Wer kann den Politikern noch ein Wort glauben?

Freeman: Sie haben geschrieben, Amerika geht den Weg von Grossbritannien. Meinen sie damit, Amerika kann sich das Imperium und die Stationierung von Truppen in 130 Länder nicht mehr leisten?

Celente: Ja, das amerikanische Imperium ist am schwinden, es wird den gleichen Weg gehen wie das Englische. Wir können es uns einfach nicht mehr leisten.

Freeman: Der einzige Politiker der das in Amerika sagt, auch eine vernünftige Wirtschaftspolitik hat und die Verfassungsrechte wieder herstellen will, ist Ron Paul. Was halten sie von ihm?

Celente: Ich hätte in als Präsident gewählt. Ich musste aber für Nader stattdessen stimmen, weil er nicht auf dem Wahlzettel stand. Ich werde keine der kriminellen Organisationen unterstützen, welche sich die Macht in Washington teilen. Und ich äussere mich sehr klar darüber. Jeder der die Kriminellen gewählt hat, unterstütz damit die Fortsetzung des Mordes und des Diebstahls. Da gibt es nichts schönzureden. Sie töten unschuldige Menschen jeden Tag.

Freeman: Wie viel Schuld an der ganzen Situation tragen eigentliche die Medien? Sie verhalten sich ja nur noch wie Propagandaorgane.

Celente? Sie tragen eine grosse Schuld daran. Sie sind ja im Bett mit der Macht. Man muss ja nur schauen welche engen Verbindungen zwischen den Medienvertretern und den Behörden, Ministerien, Pentagon und dem Weissen Haus bestehen. Die gehen dort ein und aus. Zum Beispiel, wir können uns bei der New York Times bedanken, dass sie uns den Irakkrieg verkauft hat. Oder diese Zeitung sagte im Jahre 2007, das Problem mit der Wirtschaft ist nur ein Schluckauf und wird vorübergehen, obwohl wir schon den Crash sahen. Die Medien sind sehr auf der Seite der Wirtschaft und der Regierung, erfüllen ihre Aufgabe in keiner Weise.

Freeman: Was können sie meinen Lesern sagen, wie sie sich auf die kommende Depression vorbereiten sollen?

Celente: Wir im Institut sagen schon lange, man soll keinen Cent mehr ausgeben als man hat. Wir werden eine neue Bescheidenheit leben müssen, in dem man nur Sachen kauft, die man wirklich benötigt und sie dann auch länger verwendet. Dieser ganze Zyklus des Konsums ist vorbei, dass man Glück sich erkaufen und durch Materialismus erreichen kann. Verstehen sie mich richtig, ich mag auch schöne Sachen, nur jetzt geht es um Qualität, oder weniger ist mehr.

Dann, wegen der Ausbildung der Kinder. Hier in Amerika wollen alle ihre Sprösslinge auf Hochschulen und Universitäten schicken. Das kostet ein Vermögen. Für was? Damit sie Wirtschaft oder Jura studieren und ihren MBA machen? Spart euer Geld. Wir haben mehr als genug Bänker und Anwälte, die für nichts zu gebrauchen sind, und keine Werte schaffen. Besser ist eine praktische und nutzbringende Ausbildung, wie Ingenieur, Techniker oder alle handwerklichen Berufe.

Es wird eine grosse Veränderung stattfinden. Das ganze fängt auf lokaler Ebene an. Man muss sich um seine Gemeinde kümmern, und dort aktiv sein. Wie kann man seinen Mitmenschen nützen. Seien sie froh, in der Schweiz haben sie ja direkte Demokratie und können mitbestimmen. Hier in Amerika haben wir absolut nichts mehr zu sagen, sie machen was sie wollen. Zum Beispiel, die Menschen sind gegen die Rettungspakete, aber was machen die Politiker? Sie machen es trotzdem.

Freeman: Ich sag meinen Lesern, schützt eure Städte und Gemeinden, kämpft um den Beibehalt der öffentlichen Infrastruktur, verhindert die Privatisierung und den Ausverkauf aller Werte.

Celente: Es gibt Dienste die sind essenziell und sollten öffentlich sein, wie Transport, Energie und Wasserversorgung. Hier haben wir die Weltregierung am Werk, ich meine ich bin kein Verschwörungstheoretiker, aber jeder weis wo die Reise hingeht. Die wollen alles kontrollieren und zentral steuern.

Freeman: Meinen sie, durch die ganzen Finanzprobleme der Mittelmeerländer und der neuen Beitrittsländer im Osten, wird die EU und der Euro auseinanderfallen?

Celente: Ja das glauben wir. Wir haben es bereits vorhergesagt, bevor der Euro eingeführt wurde. Alles was es dazu braucht, ist einen nationalen Populisten in einem Mitgliedsland, der meint, nur durch einen Austritt, die Krise bewältigen zu können, und dann fällt die EU auseinander. Berlusconi hat das ja schon angedeutet, mit der Drohung einer Kündigung des Schengen-Abkommen, wegen der vielen Einwanderer.

Die Massenmigration ist ein sehr grosses Problem. Die westlichen Länder werden von Menschen die ein besseres Leben wollen oder aus einer Not flüchten, überschwemmt. Da nutzt kein Altruismus, wer soll das alles bezahlen? Wo sollen für die Fremden Unterkunft, Essen und eine Arbeit herkommen, wenn für die eigenen Leute kaum mehr gesorgt werden kann?

Freeman: Meinen sie, es wird zu einer Nordamerikanischen Union zwischen Mexiko, USA und Kanada kommen?

Celente: Ja das halten wir für möglich, nur jetzt ist die Chance, dass ein Auseinderbrechen stattfindet viele höher. Wir sehen das Auseinderfallen der USA wie damals die Sowjetunion. Einzelne Regionen werden erkennen, die Krise können sie besser ohne Bundesregierung bewältigen. Für was brauchen sie das ferne Washington? Ich meine, schauen sie sich nur an, was dort alles für Politiker sich tummeln. Die sind unfähig und korrupt, denken nur an ihren eigenen Vorteil. Wir sehen ein Auseinderbrechen der Vereinigten Staaten.

Freeman: Meinen sie, die Funktion der Zentralbanken ist überholt? Schliesslich haben sie die Krise verursacht und total versagt.

Celente: Ja sie haben versagt, aber es findet ein Machtkampf statt, die Grossen wollen die Kleinen zermalmen, so wie es in der Geschichte immer wieder passiert ist. Einer der Trends die wir uns anschauen, nennen wir „weg mit ihren Köpfen.“ Das wird sicher passieren.

Freeman: Sie meinen, es wird eine richtige Rebellion geben?

Celente: Absolut. Schauen sie sich das ganze Gesindel an der Wall Street an, oder was aus den Universitäten wie Harvard und Yale herauskommt. Die haben noch nie in ihrem Leben sich die Hände schmutzig gemacht. Die haben keine Ahnung was es heisst, völlig verarmt auf der Strasse zu leben. Wenn man den Menschen alles weggenommen hat und sie nichts mehr zu verlieren haben, dann sind sie zu allem bereit.

Freeman: Was sie uns alles voraussagen, ist nicht gerade optimistisch.

Celente: Das hat mit Optimismus oder mit Pessimismus nichts zu tun, sondern mit Realismus. Es ist wie wenn sie zum Doktor gehen und er sie mit Krebs im Endstadium diagnostiziert. Soll er sie anlügen oder sagen wie es ist? Ein falscher Optimismus änder nichts an der Tatsache, sie werden bald sterben.

Freeman: Meinen sie, es ist eine gute Idee für den Einzelnen oder auch für ganze Gemeinschaften und Gemeinden, Selbstversorger zu werden und sich vom Netz zu nehmen?

Celente: Absolut. Ganz sicher. Man sollte die Möglichkeiten prüfen, sich unabhängig vom System zu machen. Eigene Lebensmittel und Strom zu produzieren. Das ist was ich vorher erwähnt habe, mit neuen Technologien wird das möglich. Wenn das passiert, dann werden sich die Menschen vom Vaterstaat und von den Konzernen entfernen. Ich habe bereits im Jahre 1997 ein Buch mit dem Titel „Trends 2000“ veröffentlicht, was genau dieses Thema behandelt. Das zentrale System hätte schon vor langer Zeit zusammenbrechen müssen. Es wurde nur durch billigem Geld zusammengehalten. Aber das funktioniert auch nicht mehr. Für was brauchen wir eine zentrale Regierung, die sowieso nur alle Problem verursacht und keine Lösungen hat?

Die weitestgehende Selbstständigkeit und Dezentralisierung, ist die Zukunft.

Freeman: Vielen Dank für dieses Interview.


...ich befürchte das der gutee Mann Recht hat :schwitz
Gerald Celente

From Wikipedia, the free encyclopedia

Gerald Celente is a United States trend forecaster and author, and CEO of The Trends Research Institute founded in 1980. He is noted for predicting the 1987 stock market crash and the fall of the Soviet Union.[1] Celente claims to be a black belt Close-Combat martial artist whose practice reflects his proactive philosophy.[2] He is a self-described "political atheist" and "citizen of the world".

lunar 14.12.2008 20:13


Remember what and where we are

lunar 14.12.2008 20:19

14 December 2008

Prince Alwaleed Takes a Haircut

Prince Alwaleed Loses 19% of Wealth on Global Slump
By Shaji Mathew

Dec. 14 (Bloomberg) -- Prince Alwaleed bin Talal, Citigroup Inc.’s largest individual investor, lost 19 percent of his personal wealth in the past year as the global economic slump reduced the value of banking and property assets, according to Arabian Business.

The Saudi billionaire was ranked the wealthiest Arab with assets worth $17.08 billion as of Dec. 2, the 2008 Rich List, published on the Dubai-based magazine’s Web site today said. That compares with $21 billion a year ago, the magazine reported, citing Alwaleed’s private financial accounts.

“Everyone has been guessing for 20 years” about the assets, Alwaleed was quoted by Arabian Business as saying. “I want you to get it right -- to get it absolutely right.”

Financial firms worldwide have taken $980 billion of writedowns, losses and credit provisions since the start of the current turmoil in the financial markets, according to data compiled by Bloomberg. More than 200,000 jobs have been cut across the industry and the U.S. benchmark Standard & Poor’s 500 Index has dropped 40 percent this year.

Making Money

Alwaleed, a nephew of the late King Fahd bin Abdulaziz al-Saud, stands out among more than 2,000 Saudi princes because he’s made money. After earning a bachelor’s degree from Menlo College near San Francisco, he returned to the Persian Gulf and parlayed an inheritance of less than $1 million into a billion- dollar fortune in the 1980s, mostly through real-estate investments, according to Riz Khan’s biography “Alwaleed: Businessman, Billionaire, Prince” (William Morrow, 2005.) (Meaning no offense, great Prince, but we are a little skeptical of these stated results and methods. - Jesse)......
full story:

lunar 14.12.2008 21:57

White House says auto loans deal not imminent

White House officials say no announcement expected on plans to aid troubling auto industry

  • Sunday December 14, 2008, 10:25 am EST
WASHINGTON (AP) -- Don't expect an announcement Sunday or Monday from the White House on a possible plan to prevent the collapse of the troubled auto industry. That's the latest word from White House officials.

Related Quotes


The Bush administration is considering ways to provide emergency aid to General Motors Corp. and Chrysler LLC. Those two car companies have said they could run out of cash within weeks without government help.

Last week, Congress failed to approve $14 billion in loans to help the automakers. That's when Bush officials said they were considering several options, including using money from the $700 billion financial bailout fund to provide loans to the carmakers.


lunar 14.12.2008 22:06

Video: Reporter Throws Shoes At Bush

Bush waved off lead Secret Service agent, prevent bigger incident... Developing...

lunar 15.12.2008 08:49

Zitat von wuerfel


da werden die amis wohl in's husten und spucken kommen....

Chinas Forderungen an die USA!

von André Fischer

wenn in der Geschichte ein
Reich oder Empire wankte oder
unterzugehen drohte, dann spielte
diejenige Nation eine Schlüsselrolle,
die der größte Gläubiger des
(dann meist hoch verschuldeten)
Führungsstaates ist. Umso wichtiger
ist, zu erfahren, welche Pläne
China, der größte US-Dollar-Besitzer
und Gläubiger der USA, hat.
In einem Artikel der China Business
News von Xiang Songzuo,
einem Professor der Central China
University of Science & Technology,
wurde nun erstmals öffentlich,
was sich China durch die
Mithilfe zur Lösung der globalen
Finanzkrise (insbesondere durch
eine teilweise Übernahme der explodierenden
US-Schulden) erhofft.
Songzou fordert, dass die USA
zunächst mehr sparen müssten,
anstatt andere Länder zu bitten,
ihnen weiter Geld zu leihen, um
den übermäßigen Konsum ihrer
Bürger und des Staates aufrecht zu
Dabei muss man wissen, dass
China oftmals offizielle Regierungsforderungen
vorab durch
inoffizielle, aber international renommierte
kommunizieren lässt.
Und diese Forderungen sind harter
Tobak! So schreibt Professor Songzou,
dass die USA sich auf
ähnliche Forderungen und Sanktionen
gefasst machen müssten,
wie man es selbst im Rahmen von
Krisenbewältigungen, z.B. durch
den IWF anderen Ländern auferlegt!

Nachfolgend die (noch) inoffizielle
chinesische Liste an Forderungen
an die USA:

- Lockerung der Beschränkung
für Arbeitserlaubnisse für
High-Tech-Experten aus China
in den USA

- Die Erlaubnis für chinesische
Firmen, High-Tech-Gesellschaften
in den USA übernehmen zu

- Die Öffnung des US-Finanzsystems
für chinesische Finanzinstitute
und die Erlaubnis für
chinesische Finanzgesellschaften,

Geschäfte in den USA zu
betreiben und zu eröffnen.

- Die USA sollen Europa nicht
länger daran hindern, Waffen
nach China zu liefern

- Die USA sollen aufhören, Waffen
nach Taiwan zu liefern

- Die USA sollen die Reisebeschränkungen
für chinesische
Touristen aufheben und die freie
Einreise für chinesische Bürger

- Die USA sollen die Exporte aus
China nicht beschränken,
besonders nicht mit dem Argument,
den eigenen Arbeitsmarkt
schonen zu müssen oder amerikanische
Produkte zu schützen


Sollten sich die USA tatsächlich
demnächst von offizieller Seite mit
diesem Forderungen gegenübergestellt
sehen, dann dürfte es wohl zu
einigen politischen (oder zumindest
diplomatischen) Spannungen
kommen. Denn diese Forderungen
sind nichts anderes als die üblichen
Forderungen, welche die USA
ansonsten Entwicklungsländern im
Rahmen von „Entwicklungshilfen“
auferlegen, also wenn man selbst
mit Geld „zu Hilfe eilt“ (meist,
nachdem man vorher die Krise
selbst herbeigeführt hat, aber das
sei hier nur am Rande bemerkt).

Die USA würden quasi von ihrem
Hauptgläubiger vom Supermachtstatus
in ein (finanzielles) Dritte-
Welt-Land degradiert. Vor uns liegen
äußerst spannende Zeiten!


lunar 15.12.2008 09:04

The Mitchell Report

A Ponzi Scheme that is Bigger than Bernard Madoff’s

December 13th, 2008 by Mark Mitchell

Bernard L. Madoff’s fraud is “stunning,” says the SEC. It is a crime of “epic proportions.” But, says the SEC, we have nothing to worry about. The SEC caught the bad guy. It “moved swiftly” to protect the integrity of the financial markets.


The only thing “stunning” is that the SEC continues to condone and even fraternize with the organized mob of hedge fund miscreants who have destroyed hundreds of companies, wiped out the jobs of countless ordinary folks, and brought our financial system to the brink of ruin.

The Madoff case may one day prove to be “epic,” but right now it can best be described as “pathetic” – or just plain “weird.”

Apparently, the SEC began receiving tips from Madoff’s enemies (rival brokerages, private investigators working for rival hedge funds, etc.) several years ago. The commission made inquiries, but took no action.

Then, earlier this week, Madoff purportedly had some kind of nervous breakdown, announcing to his sons that he was a criminal.

If we can believe the news reports, the sons then called the FBI, which dispatched an agent to Madoff’s apartment.

Madoff, dressed in a baby blue bathrobe and slippers, opened the door, and said, “I know why you are here.”

With that, the agent arrested Madoff, and within a few hours the FBI and the SEC had whipped out cases accusing Madoff of wrong-doing, but providing few details.

Indeed, it is clear from reading these cases that the FBI and the SEC know nothing about Madoff’s market making and hedge fund firm except that two employees (Madoff’s two sons) have made the vague claim that Madoff told them, vaguely, that his hedge fund was “a giant Ponzi scheme.”

Madoff’s lawyer says his client has admitted to no such crime.

Children do not usually turn in their fathers to the FBI unless they bear other grudges. And it is standard operating procedure for shady high-finance predators to sniff out and prey on feuding relatives who are in business together.

This in no way suggests that Madoff is clean, but it raises the possibility that even dirtier people orchestrated the demise of Madoff and his hedge fund in order to absorb his more lucrative (and crooked?) market making operation.

An alternative explanation comes from Bill Cara, one of the nation’s more perceptive business writers. He concludes that Madoff “is just the beginning. I don’t know, of course, more than you, but…I think he has in fact indicted himself to cause prosecutors to investigate the entire corrupt system.”

Whatever the real story, it is clear that market makers are accessories to a scheme that is much, much bigger than Madoff.

The key players in this scheme are 20 or so mega-billionaire hedge fund managers, who operate with a supporting cast that includes not just market makers, but also smaller hedge funds, rogue prime brokerages, corrupt lawyers, dishonest journalists, bogus one-man credit rating agencies, dubious index trackers, bribed “experts,” skalawag statisticians, compromised professors, private investigators, crooked financial researchers, captured government regulators, hustlers, felons, thugs and mafiosi.

The mega-billionaires masterminded their scheme in the 1980s, and ever since, they and their progeny have been working together – raiding and destroying public companies for profit. In the rubble of these attacks (there are hundreds of examples) one can almost always find evidence of unrestrained naked short selling (people selling things that they do not possess – phantom stock, phantom bonds, phantom mortgage backed securities, phantom CDOs, all manner of phantom derivatives).

This is the organized exploitation of our national clearing and settlement system – a system that fails utterly to ensure that traders actually deliver that which they have sold. If the SEC and FBI are looking for a “Ponzi scheme” of “epic proportions” – this is it.

Mr. Madoff surely knows something about this scheme. Market makers (Madoff’s operation was among the better known) are exempt from rules prohibiting naked short selling. They can sell stock that they have not yet borrowed or purchased, so long as they are legitimately “making a market” (i.e. maintaining liquidity) — and only if they intend to settle the trade soon after. In practice, however, billionaire hedge fund managers have rented market makers’ exemptions to manipulate markets with phantom securities – a blatant crime that is rarely prosecuted.

While Mr. Madoff is talking to the SEC and the FBI, I am going to begin telling you more about the scheme that is bigger than Bernie. Soon, I will name those 20 mega-billionaires, their supporting cast — and the man who is their guru. The evidence is pouring in – there is much to reveal. :rolleyes

But for now, let me leave you with a quotation from the Financial Industry Regulatory Authority’s “Notice 93-77.” Published in 1993, it reads:

Shortly after the market crash of 1987, “then Treasury Secretary Nicholas F. Brady referred to the clearance and settlement system as the weakest link in the nation’s financial system…Gerald Corrigan, President of the Federal Reserve Bank of New York noted: ‘The greatest threat to the stability of the financial system as a whole was the danger of a major default in one of these clearing and settlement systems…”

“The connection between a crisis in the clearance and settlement system and the financial industry was highlighted by the bankruptcy in 1990 of Drexel Burnham Lambert Group…As described in the [SEC’s] testimony before the Senate Banking Committee, near gridlock developed in the mortgage-backed securities market and in the corporate debt and equity markets where Drexel was an active participant.”

Now that our financial system has come to a screeching halt, read those words for clues as to how much worse things can get – and whom we need to stop to prevent that from happening.

* * * * * * * *

Mark Mitchell is a reporter for He previously worked at the Wall Street Journal editorial page in Europe, Time magazine Asia, the Far Eastern Economic Review, and the Columbia Journalism Review. Email:

Posted in The Mitchell Report |

with 31 Responses:

lunar 15.12.2008 09:22

...diese miesen Heinis :bad

Bush sneaks through host of laws to undermine Obama

The lame-duck Republican team is rushing through radical measures, from coal waste dumping to power stations in national parks, that will take months to overturn, reports Paul Harris in New York

Comments (63)

After spending eight years at the helm of one of the most ideologically driven administrations in American history, George W. Bush is ending his presidency in characteristically aggressive fashion, with a swath of controversial measures designed to reward supporters and enrage opponents.

By the time he vacates the White House, he will have issued a record number of so-called 'midnight regulations' - so called because of the stealthy way they appear on the rule books - to undermine the administration of Barack Obama, many of which could take years to undo.

Dozens of new rules have already been introduced which critics say will diminish worker safety, pollute the environment, promote gun use and curtail abortion rights. Many rules promote the interests of large industries, such as coal mining or energy, which have energetically supported Bush during his two terms as president. More are expected this week.

America's attention is focused on the fate of the beleaguered car industry, still seeking backing in Washington for a multi-billion-dollar bail-out. But behind the scenes, the 'midnight' rules are being rushed through with little fanfare and minimal media attention. None of them would be likely to appeal to the incoming Obama team.

The regulations cover a vast policy area, ranging from healthcare to car safety to civil liberties. Many are focused on the environment and seek to ease regulations that limit pollution or restrict harmful industrial practices, such as dumping strip-mining waste.

The Bush moves have outraged many watchdog groups. 'The regulations we have seen so far have been pretty bad,' said Matt Madia, a regulatory policy analyst at OMB Watch. 'The effects of all this are going to be severe.'

Bush can pass the rules because of a loophole in US law allowing him to put last-minute regulations into the Code of Federal Regulations, rules that have the same force as law. He can carry out many of his political aims without needing to force new laws through Congress. Outgoing presidents often use the loophole in their last weeks in office, but Bush has done this far more than Bill Clinton or his father, George Bush sr. He is on track to issue more 'midnight regulations' than any other previous president.

Many of these are radical and appear to pay off big business allies of the Republican party. One rule will make it easier for coal companies to dump debris from strip mining into valleys and streams. The process is part of an environmentally damaging technique known as 'mountain-top removal mining'. It involves literally removing the top of a mountain to excavate a coal seam and pouring the debris into a valley, which is then filled up with rock. The new rule will make that dumping easier.

Another midnight regulation will allow power companies to build coal-fired power stations nearer to national parks. Yet another regulation will allow coal-fired stations to increase their emissions without installing new anti-pollution equipment.

The Environmental Defence Fund has called the moves a 'fire sale of epic size for coal'. Other environmental groups agree. 'The only motivation for some of these rules is to benefit the business interests that the Bush administration has served,' said Ed Hopkins, a director of environmental quality at the Sierra Club. A case in point would seem to be a rule that opens up millions of acres of land to oil shale extraction, which environmental groups say is highly pollutant.

There is a long list of other new regulations that have gone onto the books. One lengthens the number of hours that truck drivers can drive without rest. Another surrenders government control of rerouting the rail transport of hazardous materials around densely populated areas and gives it to the rail companies.

One more chips away at the protection of endangered species. Gun control is also weakened by allowing loaded and concealed guns to be carried in national parks. Abortion rights are hit by allowing healthcare workers to cite religious or moral grounds for opting out of carrying out certain medical procedures.

A common theme is shifting regulation of industry from government to the industries themselves, essentially promoting self-regulation. One rule transfers assessment of the impact of ocean-fishing away from federal inspectors to advisory groups linked to the fishing industry. Another allows factory farms to self-regulate disposal of pollutant run-off.

The White House denies it is sabotaging the new administration :gomad It says many of the moves have been openly flagged for months. The spate of rules is going to be hard for Obama to quickly overcome. By issuing them early in the 'lame duck' period of office, the Bush administration has mostly dodged 30- or 60-day time limits that would have made undoing them relatively straightforward.

Obama's team will have to go through a more lengthy process of reversing them, as it is forced to open them to a period of public consulting. That means that undoing the damage could take months or even years, especially if corporations go to the courts to prevent changes.

At the same time, the Obama team will have a huge agenda on its plate as it inherits the economic crisis. Nevertheless, anti-midnight regulation groups are lobbying Obama's transition team to make sure Bush's new rules are changed as soon as possible. 'They are aware of this. The transition team has a list of things they want to undo,' said Madia.

Final reckoning

Bush's midnight regulations will:

• Make it easier for coal companies to dump waste from strip-mining into valleys and streams.

• Ease the building of coal-fired power stations nearer to national parks.

• Allow people to carry loaded and concealed weapons in national parks.

• Open up millions of acres to mining for oil shale.

• Allow healthcare workers to opt out of giving treatment for religious or moral reasons, thus weakening abortion rights.

• Hurt road safety by allowing truck drivers to stay at the wheel for 11 consecutive hours.

lunar 15.12.2008 10:28

Goldman Sachs Shares Morgan Stanley’s Pain as Prospects Darken

By Christine Harper

Dec. 15 (Bloomberg) -- Goldman Sachs Group Inc. and Morgan Stanley may find that cutting more than 11,500 jobs, eliminating executive bonuses and reining in risk won’t help shareholders enough as the companies face another year of slumping revenue.

The Wall Street that the two New York-based firms dominated for decades vanished in September, when Lehman Brothers Holdings Inc. went bankrupt and Merrill Lynch & Co. sold itself to Bank of America Corp. Goldman Sachs and Morgan Stanley became banks and took $10 billion each from the U.S. government. Reversing their revenue slide next year will be difficult as the worst financial crisis since the Great Depression limits demand for investment banking services.

“There’s a more radical change in financial institutions today than there was in the early 1930s,” said David Dreman, 72, chairman and chief investment officer of Dreman Value Management LLC, which oversees about $11 billion and doesn’t own shares of Goldman Sachs or Morgan Stanley. “This isn’t an environment for risk-taking, which means the investment bankers are going to have major problems for a while.”

The two firms probably will report fourth-quarter losses this week on shrinking asset values and a decline in fees for businesses ranging from providing merger advice to trading and asset management, according to the average estimate of analysts surveyed by Bloomberg. The loss at Goldman Sachs may be $3.50 a share, the first since the firm went public in 1999. Morgan Stanley probably will report a loss of 19 cents a share, analysts estimate. Executives at the firms declined to comment.....

.......Goldman Sachs Chief Executive Officer Lloyd Blankfein, 54, said last month that the firm’s business strategy doesn’t need to change :rolleyes (...also weiterhin Kunden über den Tisch ziehen :mad) and that the company will continue to invest its own money, sometimes by participating in funds that it offers to outside investors. Blankfein said leverage “has not been the driver of our performance as a public company” and that Goldman Sachs can maintain its long-term returns on equity.

That statement has been questioned by analysts, including Hintz, who estimates that cutting leverage to 20 to 1 will erase 8.5 percentage points from Goldman Sachs’s return on equity.......

full story:

lunar 15.12.2008 11:06

14 December 2008

Goldman and Morgan Set to Hit the Street with Losses this Week

Since a significant portion of the anticipated losses will be coming from writedowns in commercial real estate the projected reports are probably difficult to make with accuracy. The Banks have a great deal of accounting discretion, and it is probably tied to their tax and public relations strategy among other things.

As you may recall, there was quite a fuss when it was reported that Goldman was setting aside $7 billion of its $10 billion in TARP money to be paid out in bonuses this month. To put it into perspective, those bonuses are about half of the money required to put some health into the US automotive sector.

Goldman and Morgan have been paying more attention to the outrage in the public and the Congress since then, but they are still on a heady Masters-of-the-Universe fast track.

UK Telegraph
Goldman faces $2bn loss – its first since 1929
By Simon Evans
Sunday, 14 December 2008

As the banking giant prepares to unveil shock figures, Morgan Stanley braces itself to add its own bad news

Goldman Sachs, the US investment bank, is this week expected to post its first loss since the Wall Street crash of 1929 when it unveils full-year results on Tuesday.

In the week when many Square Mile bank staff find out if they have scooped a bonus this year, Morgan Stanley is expected to complete a miserable Christmas picture when it also reports a loss, one day later.

Alex Potter, banking analyst at stockbroker Collins Stewart, said: "For these two remaining November year-end reporters, the past three months will have been pivotal to their year as well as to the 2009 outlook. This period encompassed the Lehman failure, as well as the nationalisations of Fannie Mae, Freddie Mac and AIG."

Analysts expect Goldman to say that it lost close to $2bn (£1.4bn) in the last quarter of 2008, compared to a $3.18bn profit during the same period last year.

Big losses are expected at the bank's proprietary property arm, Whitehall, which owns, among other investments, New York's Rockefeller Center. Sources suggest that Goldman will reveal writedowns of more than $2bn on the fund.

Big losses are also believed to have been recorded in its key principal investments portfolio, with some estimates suggesting they could come in as high as $3.5bn.

Goldman laid off 250 staff in Europe last week, the majority of the cuts coming at its London offices in Fleet Street, as part of a drive to slash the group's headcount by 10 per cent.

Morgan Stanley is expected to post only its second loss since it went public in 1986 – around $300m for the fourth quarter is forecast – although some estimates suggest that figure could be as high as $900m.

The ratings agency Standard and Poor's has estimated that Morgan Stanley owns $7.7bn of commercial real estate loan assets – none of which has been written down.

Morgan Stanley's numbers will come days after Bank of America's chief executive, Ken Lewis, revealed that the bank, which snapped up ailing rival Merrill Lynch earlier in the year, is looking to lay off as many as 35,000 jobs in the next three years. It is anticipated that the move will save as much as $7bn.

Posted by Jesse at 3:43 PM

15 December 2008

Greenwich Hedge Fund Margin Call Blues

Please don't pull my credit line, Mr. Goldman Sachs.
The redemptions are coming and I needs my leverage.

Posted by Jesse at 12:22 AM

lunar 15.12.2008 13:21

Zitat des Tages - aus Treader's Daily

„Wir sind nicht nur verantwortlich für das, was wir tun, sondern auch für das, was wir lassen: loslassen, unterlassen, geschehen lassen."

- Traders Daily-Leser Siegfried M.

lunar 15.12.2008 14:20

8 really, really scary predictions

7 of 8

Meredith Whitney

The Oppenheimer & Co. analyst was among the first to warn that the big banks had big problems.

What the federal government has done so far- with TARP, bailing out Citigroup, etc. - has stemmed the bleeding, but what it hasn't done is fundamentally alter the landscape. Yes, there's been a tremendous amount of capital thrown into the system, but my concern is that it's just going to plug the holes. It's not going to create new liquidity, which is what the system so desperately needs.

When the government announces these plans, investors get excited and hopeful. But details have been slim, and while I appreciate the government saying, "We've been wrong here. Let's try something different," the strategy changes have not solved anything. So far we've had TARP 1.0, TARP 2.0, and TARP 3.0, and I'm certain there will be a 4.0, a 5.0, and a 6.0. There has to be, because the companies cannot raise the capital they need, which means that the default provider of capital has to be the federal government.

What happens in 2009? Frankly, it's hard for me to predict what's going to happen next week, never mind next year. What I will say is that I expect all these banks to be back in the market looking for more capital. We'll also have a wholesale restructuring of our banking system, probably toward the end of 2009. There will be banks getting smaller, banks going away, and banks consolidating. At the same time, though, I think you'll see more new banks created. We've already seen more applications. And it's a great idea: You start with a clean balance sheet and make loans today with today's information. Plus, right now you've got a yield curve that's good for lending.

I think the overall economy will be worse than people expect. The biggest issue will be consumer spending. If 2008 was characterized by the market impacting the economy, then 2009 will be about the economy impacting the market. It's already started.

NEXT: Wilbur Ross

lunar 15.12.2008 14:56

Sun 14 Dec 2008

Dr. Doom Weighs In On The Madoff Debacle

Posted by alyx under fail
[6] Comments

Granted, Marc Faber lost the official LOLFed Dr. Doom Poll to Nouriel Roubini, but I will continue to refer to Faber as Dr. Doom until someone can suggest a better pet name. Found this gem on the Lew Rockwell Blog:
Peter Schiff, president of Euro Pacific Capital in New York, also raised concerns about the SEC’s auditing of the firm. “Of course, the fact that the SEC routinely audited Madoff’s investment company and found nothing wrong is further proof that government regulation of the securities industry is ineffective and has done more harm than good,” he said. “Rather than protecting investors, it merely lulls them into a falls sense of confidence. If government stayed out, private-sector due diligence would do a much better job of ferreting out such massive and poorly conceived scams.”

In general, I prefer to leave all regulating to Nate Dogg and Warren G, but as long as we have an organization that supposedly regulates financial firms, it would be nice to see them actually doing so. I do, however, like Peter Schiff’s theory that in the absence of a SEC, Tinsley Mortimer herself would have poured over Madoff’s balance sheets and declared something rotten in Denmark. For now, however, I will simply refer to Chris Cox as “the guy who lets more slip past the goalie than Kevin Federline.”

Also, if you click through, you may notice they made the same “Madoff with other people’s money” joke we made a few days ago, and thought it was original. Must not be readers of ours.

ETA: This FTAlphaville piece is interesting. Apparently, one firm, Aksia, examined Madoff’s auditing company and found them horribly insufficient and Madoff’s methods suspect:
The feeder funds had recognized adminstrators and auditors but substantially all of the assets were custodied with Madoff Securities. This necessitated Aksia checking the auditor of Madoff Securities, Friehling & Horowitz (not a fictitious audit firm). After some investigating we concluded that Friehling & Horowitz had three employees, of which one was 78 years old and living in Florida, one was a secretary and one was an active 47 year old accountant (and the office in Rockland Country, NY was only 13ft x 18ft large). This operation appeared small given the scale and scope of Madoff’s activities.

There was at least 13bn in all the feeder funds, but our standard 13F review showed scatterings of small positions in small (non-S&P100) equities. The explanation provided by the feeder fund managers was that the strategy is 100% cash at every quarter end.

lunar 15.12.2008 15:05

2009 is payback year

  • Robert Peston
  • 15 Dec 08, 12:00 AM
The transformation of the years of easy credit into a financial nightmare for many big companies is illustrated by the Bank of England in its Quarterly Bulletin, which was published overnight.

This transition from credit feast to credit famine is depicted in a chart of the maturity profile of outstanding European corporate debt (stay awake, this matters to you).

What it shows is that next year, 2009, there will be a massive bulge in the value of bonds issued by European companies that have to be repaid.

Or, to put it another way, about $1000bn of "old world" companies' borrowings in the form of tradable debt has to be paid back during the next 12 months - with something like $800bn of this owed by financial companies and $200bn by non-financial companies. :rolleyes

That would be a colossal sum to pay off at the best of times, and is equal to about five times what's been repaid in 2008......

full story:

lunar 15.12.2008 18:26

1 Anhang/Anhänge
mikal ( 15December2008; 9:49)
Who walks off with the house? Don’t walk out on me!
Story from

Walking house
Artists in Denmark have teamed up with US scientists to create a walking house built on six hydraulic legs.

They say it would make the ultimate home for beating floods or neighbours from hell, reports the Daily Telegraph.

The 10ft high home is solar and wind powered and can stroll at walking pace across all terrains. It has a living room, kitchen, toilet, bed, wood stove and mainframe computer which controls the legs.

The pod is set to take its maiden stroll around rural Cambridgeshire at the Wysing Arts Centre in Bourn. It was built by art collective N55 in Copenhagen, Denmark, in conjunction with engineers at MIT in Massachusetts, USA.

N55 artist Oivind Slaatto, who says he was inspired by meeting Romany travellers in Cambridgeshire, plans to live in the house when it returns to Copenhagen.

"This house is not just for travellers but also for anyone interested in a more general way of nomadic living," he said.

Designers say it provides a solution to the problem of rising water levels as the house can simply walk away from floods.

The prototype cost £30,000 to build, including materials and time, but the designers believe it could be constructed for a lot less.

December 15, 2008

Shiva ( 15December2008; 9:59)
Walking House That house could be subject to huge demand. Owners will be able “walk” away from mortgage obligations.;):supi

lunar 15.12.2008 18:35

Bush Excluded by Latin Summit as China, Russia Loom (Update1)

By Joshua Goodman

Dec. 15 (Bloomberg) -- Latin American and Caribbean leaders gathering in Brazil tomorrow will mark a historic occasion: a region-wide summit that excludes the United States.

Almost two centuries after President James Monroe declared Latin America a U.S. sphere of influence, the region is breaking away. From socialist-leaning Venezuela to market-friendly Brazil, governments are expanding military, economic and diplomatic ties with potential U.S. adversaries such as China, Russia and Iran.

“Monroe certainly would be rolling over in his grave,” says Julia Sweig, director of the Latin America program at the Council of Foreign Relations in Washington and author of the 2006 book “Friendly Fire: Losing Friends and Making Enemies in the Anti-American Century.”

The U.S., she says, “is no longer the exclusive go-to power in the region, especially in South America, where U.S. economic ties are much less important.”......

.......Hu’s Trips Since making his first of three trips to Latin America in 2004, China’s President Hu Jintao has spent more time in the region than Bush -- 22 days to 20 for the U.S. president. In October, as the global credit crunch dried up lending in the region, China joined the Inter-American Development Bank with a $350 million loan to finance small businesses. This month it pledged $10 billion in loans to state-controlled Petroleo Brasileiro SA so Brazil can develop the Western Hemisphere’s largest oil discovery since 1976.

“The Chinese play up the development side of diplomacy so much better than the Americans,” says William Ratliff, a research fellow at Stanford University’s Hoover Institution who has a Ph.D. in Chinese and Latin American history. “Deals come with none or very few strings attached.”....

full story:

....ob die Amis nicht realisieren, dass die Chinesen sich schon an vielen Orten sehr geschickt eingenistet haben :confused:rolleyes


lunar 15.12.2008 21:52

15 December 2008

Rogue Nation

Explanations of significant losses at investment firms are often attributed to rogue traders. These are traders who have schemed to defeat security measures. These rogues extended their trading portfolios credit exposure far beyond the limits of compliance, racking up substantial losses to be taken, if not risking the actual solvency of their firms. If they do not incur losses they are often not discovered. It is the losses that precipitate the collapse.

Nick Leeson of Barings, Toshihide Iguchi of Resona Holdings, Yashuo Hamanaka at Sumitomo, John Rusnak at Allied Irish Banks, Luke Duffy of Australia National, Chen Jiulin of China Aviation, and Jérôme Kerviel with Société Générale are examples of rogue traders operating since 1995 with combined losses of approximately $12 billion disclosed.

All of them together cannot begin to match one of the great Ponzi schemes in history. This was recently disclosed to be the work of Bernard Madoff, a highly respected executive and former chairman of the NASDAQ, who was apprehended when he confessed to losses of $50 billions.

Not all of his investors were innocents. His returns were literally too good and too mysterious to be true. Many thought that Madoff was trading on insider information or some other fraudulent scheme that was cheating the 'little people.' They did not realize it was they who were being cheated. It is the basic principle of a confidence scheme that you rely on either the naivete or the greed and moral weakness of your weakness.

The SEC was well aware of problems at Madoff from whistleblowers, and even a cursory examination of the fund's holdings would have exposed the fraud. The SEC was routinely blind to outrageous excesses on Wall Street in the past fifteen years because of the cult of deregulation and chronic underfunding from a Congress in the grip of lobbyists.

In a fraud this large, when it seems as though all those in the know are getting paid, people ignore it when they see it, discourage disclosures, and go along to get along. There is no better example of this on a private scale than the mortgage market in the US where fraudulent valuations and organized collusion were rampant among the banks, appraisers, title companies, the government agencies, Wall Street, and government regulators.

Is there a correlation between rogue traders and market bubbles? History seems to suggest that there is. Yet there are rogue traders every so often even in less ebullient times, but those tend to be isolated and specifically related to secular market innovations such as leveraged buyouts.

In a general monetary bubble rapid and steadily rising asset prices make compliance lax, trading stories that would otherwise be suspect believable, and of course when the money is flowing everyone is getting paid, so there is an atmosphere of general easiness, laissez-faire, and corruption.

Are we near the end of this? Is Bernard Madoff the ultimate rogue trader, the maestro of pyramid schemes, of well-heeled deception?

The status quo likes to blame a 'rogue' because it makes it seems as though the system itself is fundamentally sound, and a clever individual has managed to outsmart the system and find some loophole to exploit until they are caught and exposed. This is a story to maintain confidence in the institution. It is unexamined, non-critical trust in the full faith and credit of a system that permits fraud to exist and flourish.

Sadly, this is not the end of the revelations and losses.

Bernard Madoff was exposed because declining prices crippled the mechanism of his fraud, as they always do. To his detriment he was not an integral segment of the banking system. If he had been, he might have merely been declared insolvent, retained his honor and his bonuses, and been backstopped by the NY Fed, and put into an arranged merger.

Bernie Madoff's mistake was in not incorporating his fraud on a broader scale. He operated on a grand but relatively particular area of turf in Palm Beach and New York, with collateral damage to the usual suspects on the international stage.

We believe that there are much greater deceptions being covered up now as we speak, not involving individuals so much as entire companies who have engaged in wanton accounting and securities fraud for the past twenty years.

The losses will eventually top 15 trillion dollars worldwide, and threaten to dislocate and plunge the world economy.

Where will the losses come from that will break down their own Ponzi schemes?

History also informs us that most of the perpetrators will never be prosecuted, and even though exposed will eventually once again become respected members of society. This is how it was after the Crash of 1929.

The reason for this is that the frauds cut so deeply into the establishment and so far and wide beyond the financial system into the government that they are literally too big to jail.

Indeed, we are already seeing many of the same characters who helped to set this credit bubble rolling in the 1990's are coming back into government service with the new 'reform' administration.

The last bubble to fail that will expose this massive fraud is the US dollar and the Treasury bonds. They are the products of a nation that has been overtaken by a rogue culture of sociopaths and swindlers.

Bernie Madoff was no rogue trader. He was successful for as long as he was because he blended in, he was one of the crowd, he was an independent player within the greatest financial swindle in history, the US financial markets and ultimately the US dollar.

Experience suggests that you will ignore this warning, wishing to think of yourself as an insider. After all, it is the weak, the naive, the unsuspecting, the under-developed, the others that are the victims, as indeed they are. After all, what can stop this? The returns are so good, and have been paid steadily for so many years. And you are among the smart ones, the elect.

The endgame will strike like lightning.

You will not realize what has happened until you wake up one day and the accounts are empty, the returns cannot be paid, the promises are proven false, and the principal is gone. And you will be facing the teeth of the storm with pockets full of empty promises and worthless paper, and no one else will care.

Posted by Jesse at 1:15 PM :verbeug

:gruebel :rolleyes :schwitz

lunar 16.12.2008 09:05

Here is the opening article for the FT’s Year in Finance special

-> Posted by soee @ 0:23 am on December 16, 2008
You can download the whole special issue here: Download this report

How gamblers broke the banks

By Lionel Barber

Published: December 15 2008 16:28 | Last updated: December 15 2008 16:28

Journalism, so the adage goes, is the first draft of history. In 2008, the Financial Times had a once-in-a-lifetime opportunity to report, analyse and comment on the most serious financial crisis since the Great Crash of 1929. Here was a global story whose tentacles spread from the US sub-prime mortgage market to the City of London, Iceland, Russian oligarchs, Dubai property barons and numerous other actors. It was a story tailor-made for the FT.

The following articles are a selection of the best of the FT’s coverage over the past year. Inevitably, there are gaps. There is no space, for example, for our groundbreaking reporting on the credit ratings agencies and the failure of computer modelling. The aim of this special report is to offer readers an unfolding narrative, as well as a broader perspective on a crisis which shook the western model of market capitalism to its foundations.

The opening commentary by George Soros, the financier and philanthropist, sets the scene. Writing in January, Soros argued that the financial crisis is very different from other crises which have erupted at intervals since the end of the second world war. “[It] marks the end of an era of credit expansion based on the dollar as the international reserve currency.” As such, it signals “the culmination of a super-boom that has lasted more than 60 years”.

Soros’s article provides a useful antidote to those commentators who too easily laid the blame for the crisis on lax regulation of sophisticated financial products. Its origins may indeed go back to sub-prime mortgage lending in the US. But sub-prime mortgages – loans to high-risk borrowers seeking a toehold on the residential property ladder – were merely symptoms of a larger problem: global imbalances, in particular a highly indebted US which sucked up the savings of the rest of the world and consumed more than it produced.

Martin Wolf, the FT’s chief economics commentator, has long warned of the threat posed by global imbalances to the world economy. These imbalances include not just the US, but also China’s huge current account surplus conveniently invested in US Treasuries. In late February, Wolf showed he was alert to the scale of the crisis, warning that the US faced “the Mother of all Meltdowns”. He was clear, too, that the banking system would require a bail-out. And he was spot-on with his strictures to policymakers: the crisis could be managed provided the US acted quickly and others followed suit to sustain domestic demand. This holds even truer today.

In hindsight, the late spring and summer were the calm before the September storm. Equity markets recovered ground and oil continued its dizzy rise. Ironically, in the light of the burst of rate cutting which was soon to follow, central bankers were still worried about inflationary pressures. Niall Ferguson, the author, historian and FT contributing editor, struck a more cautionary note in August. He warned that the local squall in the US could easily turn into a global tempest with profound consequences for economic growth.

In a devastating commentary in September, David Blake, an asset manager and former Goldman Sachs analyst, pointed a finger at Alan Greenspan, long feted as the doyen of central bankers and architect of global prosperity during his 18 years at the Federal Reserve. The Greenspan Fed’s policy of low interest rates was not to blame, says Blake, because the US needed low interest rates to avoid a severe recession. “Where Mr Greenspan bears responsibility is his role in ensuring that the era of cheap interest rates created a speculative bubble.”

Blake identifies two fatal lapses in the late 1990s: the failure to prick the dotcom equity bubble and the Fed chairman’s opposition to regulation of over-the-counter derivatives which formed the bulk of counterparty risk in the ensuing explosion of credit. He says: “To create one bubble may be seen as a misfortune; to create two looks like carelessness. Yet that is exactly what the Greenspan Fed did.”

Another warning voice was that of Gillian Tett, the FT’s award-winning capital markets editor. For more than two years Tett, who has a PhD in social anthropology, had pointed to the risks in the sophisticated debt instruments known as credit derivatives. In September 2007, well before before the collapse of Lehman Brothers, Tett identified the heart of the problem. “Although it has been taken as self-evident in recent years that the financial system grows stronger if banks spread their credit risks, some are starting to refine that view … Bankers had become adept at removing credit risk from banks’ balance sheets, either by selling the loan directly to outside investors or, more usually, by turning loans into new securities such as bonds and then selling them on the capital markets.”

In October 2008, Tett assessed the British authorities’ record in the face of the subsequent banking meltdown. After much Bertie Woosterish bumbling, the government announced a £400bn ($538bn) rescue package which recapitalised the banks, drawing lessons from earlier crises in Japan and Sweden. ”Finally – albeit belatedly – they have got something right.”

Samuel Brittan, the renowned FT economics commentator, takes a philosphical approach in a discourse on what he describes as competitive capitalism. His conclusion at the end of an elegant discussion of asset markets and their destabilising role in the financial system is typically succinct: “We need to be reminded of the dictum of Keynes that ‘money will not manage itself’. That goes for credit too.”

For a switch in pace, readers should turn to the account of the downfall of Lehman Brothers, the 158-year-old Wall Street investment bank. Written by the FT’s banking teams in New York and London, the narrative examines the last months of Dick “the gorilla” Fuld, the former bond trader who ran the bank for 15 years. It is a story of management hubris and excessive risk-taking and it raises one of the most tantalising questions of the year: were the US authorities, notably Hank Paulson, US Treasury secretary, right to let Lehman go under?

In November, Queen Elizabeth II asked another pressing question about the global financial crisis: “Why did no one see this coming?” Chris Giles, the FT’s economics editor, examines the record of the world’s pre-eminent economists. His conclusion: many saw a piece of the jigsaw but very few practitioners of the dismal science covered themselves in glory.

Two commentaries offer a broader political perspective. Martin Wolf looks ahead to post-crisis construction and the need for a regulatory overhaul as substantial as the 1944 Bretton Woods agreement. Philip Stephens concludes that the crisis has indeed produced the outlines of a new geopolitical order, not necessarily to the advantage of the US.

These are necessarily preliminary conclusions. In the New Year, a new US president, Barack Obama, will have his say. The world – and the FT – will be watching.

lunar 16.12.2008 09:24

Anti-American protesters in Baghdad on Monday, a day after Iraqi journalist Muntader al-Zaidi threw his shoes at President George W. Bush during a press conference. (Karim Kadim/The Associated Press)

Shoe insult against Bush resounds in Arab world

By Timothy Williams and Sharon Otterman
Published: December 15, 2008

BAGHDAD: A day after an Iraqi television journalist threw his shoes at President George W. Bush at a news conference here Sunday, his act of defiance toward the American commander in chief reverberated throughout Iraq and across the Arab world.

In Sadr City, the sprawling Baghdad suburb that has seen some of the most intense fighting between insurgents and U.S. soldiers since the 2003 invasion, thousands of people marched in his defense. In Syria, he was hailed as a hero. In Libya, he was given an award for courage.

Throughout much of the Arab world Monday, the shoe-throwing incident generated front-page headlines and continuing television news coverage. A thinly veiled glee could be discerned in much of the reporting, especially in the places where anti-American sentiment runs deepest....

......Hitting someone with a shoe is a deep insult in the Arab world, signifying that the person being struck is as low as the dirt underneath the sole of a shoe. Compounding the insult were Zaidi's words as he hurled his footwear: "This is a gift from the Iraqis; this is the farewell kiss, you dog!" While calling someone a dog is universally harsh, among Arabs, who traditionally consider dogs unclean, those words were an even stronger slight.......

full story:

lunar 16.12.2008 09:34

Wirtschaft: 16. Dezember 2008, 09:00
Behörden liquidieren Madoffs Firma

Einer der grössten Betrugsfälle aller Zeiten

Nach dem Mega-Betrug des ehemaligen US- Börsenchefs Bernard Madoff haben die US-Behörden die Auflösung seines Unternehmens angeordnet. Das teilte die Anlegerschutzorganisation SIPC mit. Ein Amtsgericht hat der Liquidation des Unternehmens zugestimmt. ...

Reflexe: Blamierte Fondsbranche
Madoff-Affäre: Immer weitere Kreise
Fall Madoff: «Niemand gegen Betrug gefeit»

December 16, 2008 -- Updated 0821 GMT (1621 HKT)

Ruling may help investors in $50B 'scam'

A U.S. federal judge issues an order that may help investors allegedly swindled by New York financier Bernard Madoff in what appears to be the largest "pyramid scheme" in history recover some of their money, CNNMoney reports. It is estimated losses by financial firms, charities and individual investors, could reach $3 billion. full story

lunar 16.12.2008 09:42

1 Anhang/Anhänge

lunar 16.12.2008 09:44

Here Comes a Second Wave of Defaults and Losses


Fitch: Alt-A Mortgages Deteriorating More Rapidly than Expected
December 15, 2008

Citing “a rapid deterioration of U.S. Alt-A RMBS performance,” Fitch Ratings again took the hatchet to its previous assumptions for Alt-A mortgages on Monday morning, revising its surveillance methodology and updating loss projections for all U.S. Alt-A RMBS.

Fitch said it now expects losses on all Alt-A collateral to far exceed the estimates of its ‘moderate stress’ scenario in its late ratings update earlier this year. “Market developments, ongoing home-price declines and loan performance trends in the Alt-A sector over the prior six months have effectively eliminated the possibility of this stress scenario,” said Fitch in a statement.

The rating agency said it now expects average cumulative losses om 2005, 2006 and 2007 vintage Alt-A transactions to hit 2.72, 6.78 and 9.58 percent, respectively, up dramatically from expectations at the agency earlier this year.

Fitch cited a “rapid increase in 60+ day delinquencies experienced over the past six months,” despite servicers’ collective efforts to hold off on actual foreclosure sales — likely implying that a halt to foreclosures is having little effect in resolving borrower delinquencies. Between May and October 2008, Fitch said that 60+ day delinquencies for the 2007 vintage increased from 8.80 percent to 14.65 percent; 2006 and 2005 vintages also experienced steep increases rising from 10.30 percent to 14.24 percent and 6.57 percent to 8.79 percent, respectively.

While delinquencies are continuing to pile up, cumulative losses are not — at least, not yet.. “The small increase in cumulative losses relative to the rising level of 60+ day delinquencies reflects, in part, the lengthening foreclosure/liquidation timeline being experienced throughout all vintages,” analysts at the agency wrote.

All of which means that it’s time to get ready for a whole new slew of downgrades to Alt-A in the coming few weeks. Fitch warned in its note Monday that it expects that it will downgrade many senior bonds to below investment grade — just in time for fourth quarter earnings.

Posted by Jesse at 2:55 PM :verbeug

lunar 16.12.2008 10:55



lunar 16.12.2008 13:21

Ein Mann lernt sehen

Die Illusion von Wirklichkeit

Von Nike Heinen

Tastsinn statt optische Orientierung: ein Text in Braille-Schrift

16. Dezember 2008
Wenn Michael May ein Ding mit den Augen betrachtet, ist es für ihn nicht zu erkennen. Ein paar bunte Tupfer in einem Meer aus Farbe. Erst wenn seine Finger mit den Klecksen Fühlung aufnehmen, treten die Konturen hervor. Dann weiß er, ob da nun Schuh oder nur Schatten lauert. „Ich muss Sachen berühren ehe ich sie sehen kann“, sagt May. „Genau wie früher.“

Früher: Da war Mays Blick versperrt durch eine weiße, undurchsichtige Narbenhaut. Jetzt fällt wieder Licht ins Dunkel, ein paar Stammzellen und der intakten Hornhaut eines Toten sei Dank. Der 54-Jährige ist seit seiner Operation im Jahr 2000 ein vielbeachtetes Phänomen für die Wissenschaft: Kaum jemals hat ein Mensch, der so früh erblindete, so spät das Augenlicht wiedererlangt. Michael May war drei, als er es verlor - die Folge eines Unfalls mit ätzenden Chemikalien. Nach der Transplantation kann nun eines seiner Augen die Umwelt wieder aufnehmen, aber sein Kopf weiß nicht so recht, was er mit diesen Bildern anfangen soll.

Die Reise ins Licht ist ein Abenteuer

Früher konnte May den Raum um ihn herum orten wie eine Fledermaus, und seine Hände erschlossen ihm die Welt der Gegenstände. Er bewegte sich so frei, dass die meisten Menschen nicht bemerkten, dass da ein Blinder um sie herumsteuerte. Jetzt stolpert May über eine Treppe, weil sein Gehirn einen Schatten vermutet; Parkautomaten spricht er als Personen an. Wenn Menschen mit ihm sprechen, sieht er nichts als klappende Münder und flatternde Augenlider. Am Anfang überfrachtete ihn jeder Blick durch die neue Hornhaut mit einem Datensatz, den er erst mühsam analysieren musste.

„Es fließt nicht mehr“, erklärte er seiner Frau. Er, der Vorzeigeblinde, glücklicher Familienvater, paralympischer Skirennfahrer und erfolgreicher Unternehmer, hat eine vernünftige Welt, in der alles Sinn ergab und eine Ordnung hatte, gegen ein verwirrendes, anstrengendes Fragezeichenland eingetauscht. „Meine Reise ins Licht ist ein großes Abenteuer“, sagt er, „keines für schwache Nerven.......

Zum Thema

ganzer Artikel: auf eine faszinierende Art "scary" :supi

lunar 16.12.2008 15:29

Tue 16 Dec 2008

Fed Governors Make The Tough Decisions

Posted by Jason under bernanke , governors
1 Comment

So the Fed’s board of governors is wrapping up its monthly meeting today, an epic and grueling two-day event wherein the members sat around a big table, ate deli sandwiches, and tried to stretch out the foregone conclusion that they will be cutting rates into two days so they would look busy because none of them wants to go home and have to endure relatives who are visiting for the holidays.

Those of you familiar with “numbers” may already be aware that the federal funds rate currently stands at 1%, the lowest it’s ever been, only having seen this level a couple of times before in the long and storied history of the bank’s target rate. Ben, of course, is all set to drop it lower because that’s just what he does. And can you blame him? Lowering the overnight lending rate has brought us out of a recession every single time he has done it before.

lunar 16.12.2008 17:38

Matter of Trust
Restoring the trust on Wall Street, with Jeremy Siegel, Wharton School at The University of Pennsylvania finance professor and Art Cashin, UBS Financial Services
Last Update: Tues. Dec. 16 2008

Video --->

listen what Art Cashin says at the end :cool

lunar 16.12.2008 17:40

16 December 2008

Madoff Enablers: Everyone Was Getting Paid

As we said the other day in Rogue Nation, schemes like this continue on because everyone is getting paid, directly or indirectly, not to look closely.

Go along to get along with plausible deniability. The 'dumb CEO' and 'overworked civil servant' chasing kittens and alley cats while the lions are on the prowl.

Financial Times
Madoff feeder funds levied high fees
By Henny Sender
December 16 2008

The “feeder” funds that channelled money to Bernard Madoff charged their investors high fees that in some cases exceeded the norms of the hedge fund industry, people familiar with the matter say.

Mr Madoff received much of his funding from feeder funds run by so-called funds of hedge funds. These funds of funds are paid by investors to perform due diligence on hedge funds and allocate money among approved managers.

Typically, funds of hedge funds charge a 1 per cent management fee and take 0-10 per cent of the profits. This would be in addition to the fees charged by the underlying hedge funds – which usually take a 2 per cent management fee plus 20 per cent of the profits, above a certain level, known as the hurdle rate.

Fairfield Greenwich, a feeder fund that invested $7.5bn with Mr Madoff, charged a 1 per cent management fee and took 20 per cent of the profits, according to a person familiar with the matter.

Suzanne Murphy, managing director of Tri-Artisan, a hedge fund consultancy, said she believes other Madoff feeder funds charged fees similar to those at Fairfield Greenwich. At such levels, she claimed, “These organisations were more partners of Mr Madoff than clients.”

In general, generous arrangements such as large performance fees “raise questions about conflicts of interest and caveat emptor,” according to the general counsel of the alternative investment division of one bank. The head of the hedge fund practice at one law firm, added: “At a certain point, if you get outsize compensation, you can argue that you lose the incentive to do due diligence.”

In many cases, the feeder funds that worked with Mr Madoff also did so with few conditions, such as ones requiring that minimum returns be reached before fees would be paid, according to people familiar with the matter.

In some cases, the private wealth arms of banks that channelled money to such feeder funds also received payments from these funds.

Mr Madoff did not charge his investors fees but was paid through commissions on his trades, all of which went through the broker-dealer he controlled. Because he did not charge typical fund performance fees, he earned a reputation among some investors for being a lower-cost manager. (But severely back end loaded. Jesse)

Posted by Jesse at 10:08 AM :verbeug

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