Chicken Little Demands Apology Sky Falling

Toro

Toro

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Kreskin said:
If the biggest private banks in the world own the US wouldn't they have a vested interest in protecting their investment? I've never known an investor to buy something with the intention of devalueing it.

In the future you might see inflation erode the size of the debt, assuming the debt is controlled. Anyone have family who bought a house in the early 60's? Back then a $7,000 mortgage was substantial. In today's dollars it's nothing. People inflated their way out of debt.
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And that's what they are going to try to do again.

As to your first point, it should be noted that several Wall Street banks have sold up to a quarter of themselves to foreign government investment funds. This is a sign of weakness, not strength.
 
darkbeaver

darkbeaver

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Kreskin said:
If the biggest private banks in the world own the US wouldn't they have a vested interest in protecting their investment? I've never known an investor to buy something with the intention of devalueing it.

In the future you might see inflation erode the size of the debt, assuming the debt is controlled. Anyone have family who bought a house in the early 60's? Back then a $7,000 mortgage was substantial. In today's dollars it's nothing. People inflated their way out of debt.
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When have"we the people" ever been out of debt? The property of the bankers will be protected by the police state. Buying something is more efficiently done if it is first devalued, not after it is bought. Public assets are routinely transferred to the private sector for pennies on the dollar. This has been the case for decades.
 
Kreskin

Kreskin

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darkbeaver said:
When have"we the people" ever been out of debt? The property of the bankers will be protected by the police state. Buying something is more efficiently done if it is first devalued, not after it is bought. Public assets are routinely transferred to the private sector for pennies on the dollar. This has been the case for decades.
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That's true. Just like what we'll see this next year. The average joe will head for hills selling assets below value then rebuy them in two or three years when they have already gained 30% or more from their original sale. The system relies on fear, greed and all the naysayers to stir up good buys. That's where the money is made.
 
darkbeaver

darkbeaver

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Toro said:
And that's what they are going to try to do again.

As to your first point, it should be noted that several Wall Street banks have sold up to a quarter of themselves to foreign government investment funds. This is a sign of weakness, not strength.
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In my opinion it's neither a sign of strength or weakness in the big picture, banks are bought by other banks, it's transfer of assets. Wheather the bankers are American or Hong Kong Chinese, Saudi, Japanese or whomever essentially the bankers still own the assets. Bankers come in one flavour, obscenely wealthy, and that's all there is to it, except for the maze of specaliszed language and labrinths of detail and obfuscation. It's a modified shell game, not much different from three thousand years ago except in the speed and range of hiding places. Of course it's just my opinion, shared with millions of other malcontents, for what it's worth. Banking power jumps borders faster than banking regulation, nationality matters for nothing, the thickness of the wad rules and transends all other considerations
 
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darkbeaver

darkbeaver

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Kreskin said:
That's true. Just like what we'll see this next year. The average joe will head for hills selling assets below value then rebuy them in two or three years when they have already gained 30% or more from their original sale. The system relies on fear, greed and all the naysayers to stir up good buys. That's where the money is made.
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So right there we can see how the inherant instability of growth in debt is built into the private banking system that runs the western world. Debt is the growth bussiness that matters to them, anything that increases that debt and keeps the system in precariously balanced instability is double plus good.
In this generation we can readily see debt piled on youth through credit extented well before those teenagers have any idea what it's about and before most of them have income. To have allowed and promoted this is a crime that's unfathomably stupid and destructive. It is in fact slavery, state sanction indentured slavery, exactly the way my grandfather and his brother arrived here in North America. So the only hope for mankind, and I mean the whole species, is to finally break that rotten evil system once and for all, if not we will spend our entire future serving debt imposed by the damn bankers, ruining the environment to service the bankers conducting stupid wars for the bankers who could care less which side wins. There is and never has been any reason what ever to leave banking in private hands. Simply put human evolution is at stake not some illdefined ideology.
 
Kreskin

Kreskin

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darkbeaver said:
So right there we can see how the inherant instability of growth in debt is built into the private banking system that runs the western world. Debt is the growth bussiness that matters to them, anything that increases that debt and keeps the system in precariously balanced instability is double plus good.
In this generation we can readily see debt piled on youth through credit extented well before those teenagers have any idea what it's about and before most of them have income. To have allowed and promoted this is a crime that's unfathomably stupid and destructive. It is in fact slavery, state sanction indentured slavery, exactly the way my grandfather and his brother arrived here in North America. So the only hope for mankind, and I mean the whole species, is to finally break that rotten evil system once and for all, if not we will spend our entire future serving debt imposed by the damn bankers, ruining the environment to service the bankers conducting stupid wars for the bankers who could care less which side wins. There is and never has been any reason what ever to leave banking in private hands. Simply put human evolution is at stake not some illdefined ideology.
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Our monetary system has done a pretty good job of stablizing growth. The Bank of Canada isn't a private institution. It uses private institutions to add or contract money supply. Money has to end up in private hands somewhere a long the line.
 
darkbeaver

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Kreskin said:
Our monetary system has done a pretty good job of stablizing growth. The Bank of Canada isn't a private institution. It uses private institutions to add or contract money supply. Money has to end up in private hands somewhere a long the line.
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The Bank of Canada Kreskin is a Crown Corporation belonging to the House of Windsor. Now unless your title is Baron Kreskin you have no interest in that institution neither do you have any claim on Crown Lands or any other Crown Assets held in trust for your Reigning Monarch who happens to be the deity on our money.



3. Who owns the Bank of Canada?

The Bank was founded in 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the federal government. Since that time, the Minister of Finance has held the entire share capital issued by the Bank.




4. Is the Bank of Canada a government department?

No, it is a special type of Crown corporation. The Bank has considerable autonomy to carry out its responsibilities

Who is HSBC Bank Canada?

Tags: hsbc, bank, canadaHSBC Bank Canada is a member of the HSBC Group. HSBC Group represents one of the world's largest financial institutions with 9,800 offices in 77 countries and territories and a place near the very top of the Forbes Global 2000. HSBC Canada is part of a global network that has offer...
 
darkbeaver

darkbeaver

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Francis, Diane. Controlling Interest: Who Owns Canada? Toronto: Macmillan of Canada, 1986. 352 pages.

In 1978 the Royal Commission on Corporate Concentration listened mostly to the arguments of big business, and concluded that concentration was necessary in a country as small as Canada. Not everyone was convinced. The author describes this book as "a private-sector, one-woman royal commission. I have crisscrossed the country, scoured the literature, and conducted several hundred interviews to document the new, faster-growing forms of concentration as well as to describe its abuses and potential abuses, and the ramifications for the rest of us in terms of jobs, the nation's wealth, opportunities, and political freedoms." Canada has become a collection of family dynasties and management fiefdoms. This book profiles its thirty-two wealthiest families. Along with five conglomerates, they controlled one-third of Canada's non-financial assets in 1985, nearly double what they controlled just four years earlier. The concentration of wealth in Canada is much more profound than it is in the U.S., where the largest firms are publicly held.
Francis has been the editor of The Financial Post since 1991, and is a syndicated columnist and broadcaster. A website at www.dianefrancis.com includes descriptions of her other books.
ISBN 0-7715-9744-4


​

Name index for Francis,D. Controlling Interest: Who Owns Canada? 1986
try a NameBase search home page register
 
darkbeaver

darkbeaver

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[SIZE=+2]~ Believe It!~[/SIZE]​
l[SIZE=-1] It is important to realize that this is not some abstract, intellectual exercise. It's YOUR money![/SIZE]
l[SIZE=-1] You are being flim-flammed!! Year after year after year....[/SIZE]

l[SIZE=-1] Your LARGEST expenditure- (The so-called 'public debt interest', i.e., "paying down the debt") is to the private banking system!![/SIZE]

[SIZE=+1]But it doesn't have to be that way![/SIZE]​
l[SIZE=-1] Your (our, Canada's) money could be going towards social programs, health care, education, and so on (through Transfers, Operating and Capital Expenses, etc.) IF a larger portion of GCM existed.[/SIZE]


l [SIZE=-1]The question then is: why do governments borrow AS debt and AT interest moneys which they could create on behalf of Canadians debt and interest free?[/SIZE]
Next: Ideology
http://www.comer.org/BoC/BoCtut.htm
 
Kreskin

Kreskin

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darkbeaver said:
The Bank of Canada Kreskin is a Crown Corporation belonging to the House of Windsor. Now unless your title is Baron Kreskin you have no interest in that institution neither do you have any claim on Crown Lands or any other Crown Assets held in trust for your Reigning Monarch who happens to be the deity on our money.



3. Who owns the Bank of Canada?

The Bank was founded in 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the federal government. Since that time, the Minister of Finance has held the entire share capital issued by the Bank.




4. Is the Bank of Canada a government department?

No, it is a special type of Crown corporation. The Bank has considerable autonomy to carry out its responsibilities

Who is HSBC Bank Canada?

Tags: hsbc, bank, canadaHSBC Bank Canada is a member of the HSBC Group. HSBC Group represents one of the world's largest financial institutions with 9,800 offices in 77 countries and territories and a place near the very top of the Forbes Global 2000. HSBC Canada is part of a global network that has offer...
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You're getting a little silly about this Beave. Your fears are in the risk category of a comet hitting Nova Scotia but you're letting it completely consume your thoughts. You aren't happy that it has autonomy to carry out monetary policy? Who would you prefer it be left with? Stephen Harper? Brian Mulroney? The board of directors is represented by a member of each Province. And as they state "separating the central bank from the political process enables it to adopt the medium- and long-term perspectives essential to conducting effective monetary policy".

What do you suggest for a financial system? One central bank run by someone who operates a socialist political party? You think the government would maintain an effective and cost efficient retail banking system, better than the chartered banks, and do it all with interest free loans (or sorry, forget borrowing was outlawed under the new regime). Or do you just do away with money and trade gold, silver and anything other metals and materials you find in the street?

Don't forget, the socialist regime of Trudeau is what got this debt started.
 
darkbeaver

darkbeaver

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So Kreskin guess what, the odds of a comet hitting Nova Scotia are reallty very good. The odds of getting a straight deal our of a bank in our system are nil.

http://fireballs-meteorites.blogspot.com/

http://www.sott.net/articles/show/146792-The-Hazard-to-Civilization-from-Fireballs-and-Comets

You worry about your own sillyness because between the two of us you're far more the dreamer than I'll ever be. You were telling me a short time ago about the marvelous corrective nature of our wonderfull monetary system when you plainly don't know that the only thing that's saved it thus far is intervention and infusion in the so called free market which dosen't bloody well even exist. Hey, I know that we'll be a year into the depression and both behind barbed wire before you'll hazard to reexamine your position. As for your understanding of heavenly bodies you should have a look at the links I'v provided, you may not be so quick to make light humour of collisions with asteroids or comets in the future. I believe you think you are a realist and have a pragmatic world view, well guess what, I don't.
 
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darkbeaver

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THE 600-POINT RUMOR
The Dow opened Wednesday in panic sell-off mode. It opened at 11,950. It gapped down in one shot to 11,750. Then it fell to 11,700. Then it went back up almost to 11,850. Then it steadily retreated to 11,650. That was just before 1 p.m. Then it reversed. Up, up, up it went. It closed at 12,200. The move was in the range of 600 points, and was reported as such by the press.
What could cause such a reversal? Only after the market closed did the general public find out.
At about 1 p.m., there was a report issued by the office of the New York State Insurance Department. The head of the Department had called a meeting of New York bankers, which was beginning. London's Financial Times described what happened next.
Leading US banks are under pressure from New York state's insurance regulator to provide as much as $15bn to support struggling bond insurers, people familiar with the matter said on Wednesday night.
Eric Dinallo, New York insurance superintendent, held a two-hour meeting with bank executives on Wednesday and urged them to provide as much as $5bn in initial capital to support the insurers – the largest of which are MBIA and Ambac – and ultimately to commit up to $15bn.
​
Consider what this meeting was about. Companies that have issued insurance contracts to cover for losses in bond holdings are now threatened with bankruptcy because of the turmoil in the subprime credit markets and also the huge market called credit default swaps. These companies may not have enough money in reserve to cover the losses. Their stock market value had tumbled. They were facing bankruptcy. (In my view, they still are.)
Who are the parties who have paid premiums for this insurance? Banks, mainly. Hedge funds are also on the other side of the contracts. If these insurers go belly-up, the market value of the formerly insured bonds will fall. This will create losses for the banks and hedge funds – potentially gigantic losses.
So, the head of the state insurance department called in bankers – whose portfolios are at risk by the bankruptcy of the insurers – and suggested that the pony up as much as $15 billion to cover the losses of the insurers.
Got that? The insured are supposed to insure the insurers against loss. Why? Because if the insurers go belly-up, the banks will experience a loss.
This sounds crazy. But it makes sense under this scenario: the collapse of the bond market threatens the banks by a lot more than $15 billion. If the banks called in are facing losses so huge that $15 billion looks like a bargain, can you visualize what the threat is internationally? After all, the commissioner did not call in banks from outside New York.
The International Herald Tribune, owned by the New York Times, reported on January 24 that the threat of default is creating widespread concern.
Regulators fear a possible chain of events in which the troubled bond insurers, MBIA and Ambac, might be unable to keep their promise to pay investors if borrowers default on their debt.
That could leave the buyers of the bonds – including many banks and pension funds – on the hook for untold billions of dollars in losses, shaking confidence in the financial system.
​
It was in this

CONCLUSION
We appear to be in the early phase of a financial earthquake that will get into the history textbooks. The volatility of the American stock market indicates something severe, yet at present is being contained. Contained by what? By rumors and hope.
I do not suggest that you entrust your financial future to people who invest in terms of rumors and hope. These are the same people who advised clients that they should hold a balanced portfolio of American stocks back in early March of 2000. That portfolio is lower today by 21% due to price inflation, and if the portfolio was the S&P 500, lower by an additional 15% because of recent market declines.


http://www.informationclearinghouse.info/article19194.htm
 
Kreskin

Kreskin

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On 18 April 1980, the country attained independence and along with it a new name, Zimbabwe, new flag, and government led by Robert Mugabe of ZANU. Canaan Banana served as the first president with Mugabe as Prime Minister. In 1987, the government amended the Constitution to provide for an Executive President and abolished the office of Prime Minister. The constitutional changes went into effect on 1 January 1988, establishing Robert Mugabe as President.

Under the leadership of President Mugabe, land issues, which the liberation movement promised to solve, reemerged as the vital issue in the 1990s. Despite majority-rule, whites made up less than one percent of the population but held 70% of the country's commercially viable arable land because of the color line arising from British colonialism. Mugabe began to redistribute land to blacks in 2000 with a compulsory land redistribution.

Zimbabwe is currently experiencing a hard currency shortage, which has led to hyperinflation and chronic shortages in imported fuel and consumer goods. Mugabe's critics blame his program of land reform. Zimbabwe's current economic and food crisis, described by some observers as the country's worst humanitarian crisis since independence, has been attributed, in varying degrees, to a drought affecting the entire region, the HIV/AIDS epidemic, and the government's price controls and land reforms.
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Looks like Beaves plan doesn't work too well, unless you want a million dollar hamburger.

 
Lester

Lester

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Are you ready? Phase two of the meltdown.

The Four Horsemen Claim the Monoline Insurers. Who’s Next?



This week on our way to Financial Armageddon it was the turn of the monoline insurers to face the scythe. For over two months AMBAC Financial and MBIA, the two biggest insurers of municipal and structured debt, have been peering into the grave, pretending that they could revive themselves with just a little more capital and a little more time. The ratings agencies – Moody’s and S&P and Fitch – danced along with them in this delusion, delaying any downgrade of the insurers from their current Aaa status, waiting to see if help would arrive. It never did.
The final blow occurred this week in the stock market, when the share prices of the monoline insurers collapsed, making it impossible for them to raise capital publicly. Since no private investors have stepped up yet, Fitch took the inevitable step and downgraded AMBAC. It is only a matter of time before the other ratings agencies follow, and then comes bankruptcy and some sort of restructuring for these insurers.
Municipal bond insurance had always been a sleepy business, as AMBAC, MBIA and a few smaller insurers lent their Aaa ratings to state, county, city and related local government entities that on their own could not achieve the highest rating for their bonds. The insurers got a fee for their service, and the municipal borrowers got the lowest coupon rate possible for their bonds.
But this business wasn’t enough for the insurers. They branched out into providing Aaa guarantees for so-called structured investments, like Collateralized Debt Obligations and related mortgage-backed derivatives. And why not, they reasoned? The ratings agencies placed Aaa ratings on all this paper, just like they thought the monoline insurers were Aaa risk too. The ratings agencies have since confessed that their models for analyzing potential downside risks for these investments/bonds assumed that real estate prices would always go up at a steady pace, just like they had for nearly 70 years.
In fact, everybody with money to lend or a need to borrow made the same assumption, partly because the real estate industry kept repeating this mantra: real estate prices never go down. Nobody seemed to notice that this argument was true to a point; in local circumstances real estate values have declined, and in the best of times the rate of increase only matched the rate of inflation. Until around 1996, when this link decoupled and real estate prices nationally began soaring well beyond the rate of inflation. But even when it was obvious that real estate prices were two or three standard deviations above their historical norm – in other words, they were in bubble territory – industry experts began extrapolating these gains into their future expectations for housing values.
The financial industry did their part in helping the bubble to inflate, by inventing all sorts of ways to securitize, package and resell real estate loans to investors, and the industry was happy to pay AMBAC, MBIA and their like a fee to obtain back-up insurance on these deals. Depending on how the insurance was structured, if something went wrong with all or a part of the bond, the guaranty provided by the monoline insurers could be activated and make investors whole again.
Unfortunately, real estate prices nationally have gone down. Defaults on mortgages in the U.S. are rising and in some sectors of the market are at record levels. No end is in sight. The monoline insurers are being called on to honor their guarantees, and they simply do not have the capital to do so for the amounts involved.
All told, the insurers have $2.4 trillion in guarantees outstanding for municipal bonds and mortgage-related structured investments. It seems inevitable now that the ratings on all this paper will deflate. If Moody’s decides that AMBAC deserves a non-investment grade rating rather than a Aaa rating, then much of the paper insured by AMBAC becomes junk debt. And junk bond debt is really what we are talking about here. While the ratings agencies might toy around with a progressive series of downgrades, the stock market has already decimated the shares of the monoline insurers, declaring them virtually bankrupt.
It is true that someone like Warren Buffett could come along and buy one of these insurers, but he has already had a bad experience with derivatives and will certainly have nothing to do with the structured investment guarantees. Don’t count on a savior to ride to the rescue of this part of the market.
If you own a bond issued by your local water reclamation project and guaranteed by one of these insurers, are you going to lose money? Not necessarily. As long as the municipality can continue to pay principal and interest on the bond, and as long as you want to hold the bond to maturity, you should be okay. But in the secondary market, once the rating is trashed, the price will sink, and if you want to sell the paper before it matures you will lose money. Tens of thousands of bond issues across the country will be affected.
Don’t forget that state and local governments are already in financial distress. Tax receipts from income and real estate taxes are drying up, while costs are increasing. Many states are operating with huge deficits. Something will have to give, and in some cases there will be defaults on municipal bonds. Because the insurance behind these bonds is practically worthless, investors will lose money. You will want to look very carefully at the financial health of the municipal issuer now that the back-up insurance is no longer there to help.
Chances are you do not own some of the complex structured investments that were also given a guarantee by the monoline insurers. But chances are the biggest banks in the country own this paper, or sold it with the insurer’s guaranty backing it up. Difficult legal questions will now arise as to whether the banks will have to step up and replace the guaranty provided by the insurers. This means, effectively, that the banks will have to guarantee the bonds themselves, since no one is around anymore to do this.
The banks simply do not have enough capital to provide such guarantees, so the legal battles will be fierce and protracted. On top of this, the banks own paper that they thought was backed by a Aaa guaranty but no longer will be. This means that the bank’s credit portfolio is no longer of the quality they assumed. The loans and other investments that a large bank tends to keep on their balance sheet average out to about a Baa rating – by no means Aaa, but still investment grade and not considered junk debt. If the banks have to reclassify a huge amount of their investments as junk debt, this could well tilt the entire credit portfolio of the industry into junk debt status. Banks will no longer be able to lend as freely as they have been in the past ten to twenty years if they themselves are poor investment quality.
This doesn’t even count the actual financial losses caused by these downgrades, which are already beginning to occur. Merrill Lynch announced this week a multi-billion dollar write down of its investment portfolio in structured bonds because the paper has been significantly downgraded in the secondary market with the loss of the Aaa rating. The U.S. financial industry is already scrambling about the globe trying to replace the capital lost through previous write downs. At some point the industry will run out of rescuers just like the monoline insurers did.
Who’s next in this ongoing financial trauma? Clearly more pain is in store for Wall Street and commercial banks, but we haven’t yet come to the realization that some of these financial institutions will not survive. This will happen, and you will definitely know when that day arrives because it will be the cause of serious damage to the stock market.
But the biggest victims to come are the other mortgage insurers – Fannie Mae and Freddie Mac. Like the monoline insurers, they have guaranteed trillions of dollars of mortgages. Like them, they have only a tiny sliver of capital behind their guarantees. One reason they have escaped notice so far is that these companies did not guarantee the risky structured investments that destroyed the monoline insurers. Unfortunately, the financial default risk in the U.S. economy is ratcheting up daily. American Express alerted the market this week to a surprising increase in late payments and defaults on credit cards. Sears and other card issuers are seeing the same thing. Auto loan payments are also falling behind. The U.S. consumer is tapped out of tricks to keep their spending and lifestyle at existing levels. Millions of consumers considered now to be prime quality credit risks are going to default on their mortgages, and drag Fannie Mae and Freddie Mac down with them.
This is when we will see just how valuable the U.S. government support is to these two companies. They have acted for years as if they have a guaranty from the federal government backing up everything they do, even though Congress has insisted otherwise. A lot will depend on whether the U.S. government can still issue debt without any consequences whatever. Over half of all new federal debt in recent years has been bought by foreign investors, principally the governments of Japan and China. This has kept rates low for the government, and removed any sense of discipline over the federal budget. As long as these rich uncles are willing to take on such gargantuan risks with their own foreign reserves, the U.S. may be able to bail out Fannie Mae and Freddie Mac. But we are talking of a bailout in the trillions of dollars under worst case circumstances, and worst case circumstances have become the norm in this market.
Nor is time on the side of the U.S. government. The ratings agencies are already hinting that down the road, if nothing is done about social security and other growing federal entitlements, the U.S. will lose its Aaa rating. This may happen earlier than many suspect.
Somewhere in all this mess the U.S. stock market will collapse. At the moment the stock market is already in a correction, worrying about an economic recession. What it really should be worrying about is something much worse – a complete collapse of the credit markets globally, leading to a depression that will last 3 – 5 years. Once that is understood, the Dow will be trading well below 8,000.
So hold on to your job, whatever that may be. Pay down your debt and watch your expenses. Monitor the credit and market risks in your investment portfolio, and if you have any real concerns, U.S. Treasuries earning 2% will be a lot better than stocks or bonds that might collapse in value. As of now, the four horsemen of the apocalypse are mowing down the big players, but the little guy will be in their sights eventually.
 
Toro

Toro

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The insurers may go under. However, municipal bond insurance is a fabulous business since less than 1% of municipalities default in any given year. However, the difference for municipal bonds that are insured and uninsured is 0.30% on average, so it won't be a big deal.

However, the Ambacs of the world wanted the higher fees from gauranteeing CDOs. They can't cover. That will mean more charges and write-downs from the banks.

More fireworks to come.
 
darkbeaver

darkbeaver

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http://http://bp2.blogger.com/_nSTO-vZpSgc/R5VesXtCUwI/AAAAAAAAB50/gUcUZpYFey8/s1600/Model-For-Fraud.png


Author and stock market soothsayer Pam Martens puts it like this:
“How could a layered concoction of questionable debt pools, many of dubious origin, achieve the equivalent AAA rating as U.S. Treasury securities, backed by the full faith and credit of the U.S. government, and time-tested over a century of panics, crashes and the Great Depression?
How did a 200-year old "efficient" market model that priced its securities based on regular price discovery through transparent trading morph into an opaque manufacturing and warehousing complex of products that didn't trade or rarely traded, necessitating pricing based on statistical models?” (The Free Market Myth Dissolves into Chaos, Pam Martens, counterpunch)
How, indeed?
The answer to all these questions is “deregulation”. The financial system has been handed over to scam-artists and fraudsters who've created a multi-trillion dollar inverted pyramid of shaky, hyper-inflated, subprime slop that they've sold around the world with the tacit support of the ratings agencies and the US political establishment. (wink, wink) Now that system is about to collapse and there's nothing that the Federal Reserve can do to stop the Great Credit Unwind of '08.
As economist Ludwig von Mises said:
"There is no means of avoiding the final collapse of a boom brought on by credit expansion. The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.http://www.informationclearinghouse.info/article19227.htm
 
darkbeaver

darkbeaver

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America's Teetering Banking System:
"Where did all our deposits go?"
By Mike Whitney
31/01/08 "ICH" -- - Somebody goofed. When Fed chairman Ben Bernanke cut interest rates to 3% yesterday, the price of a new mortgage went up. How does that help the flagging housing industry?
About an hour after Bernanke made the announcement that the Fed Funds rate would be cut by 50 basis points the yield on the 30-year Treasury nudged up a tenth of a percent to 4.42%. The same thing happened to the 10 year Treasury which surged from a low of 3.28% to 3.73% in less than a week. That means that mortgageswhich are priced off long-term government bonds---will be going up, too.
Is that what Bernanke had in mind; to stick another dagger into the already-moribund real estate market?
The Fed sets short-term interest rates (The Fed Funds rate) but long-term rates are market-driven. So, when investors see slow growth and inflationary pressures building up; long-term rates start to rise. That's bad news for the housing market.
Now, here's the shocker: Bernanke KNEW that the price of a mortgage would increase if he slashed rates, but went ahead anyway.
How did he know?




The bond insurers were working the same scam as the investment banks. They found a loophole in the law that allowed them to deal in the risky world of derivatives; and they dove in headfirst. They set up shell companies called transformers, (The same way the investment banks established SIVs; structured Investment Vehicles) which they used as off balance sheets operations where they sold "credit default swaps , which are derivative instruments where one party, for a fee, assumes the risk that a bond or loan will go bad. (The Bond Transformers, Wall Street Journal) The bond insurers have written about $100 billion of these swaps in the last few years. Now they're all blowing up at once.http://www.informationclearinghouse.info/article19249.htm
 
darkbeaver

darkbeaver

the universe is electric
Jan 26, 2006
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US service sector contracts for the first time in almost five years

US service sector contracts in January


For the first time in almost five years, the nation's services sector — including restaurants, travel, banking, construction and retail — contracted in January, stoking rising worries of a recession.
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Back in the 80s, when the United States started to lose its manufacturing, the US Government, rather than take action that would alienate corporate donors, assuaged the concerns of Americans by touting the wonders of the "Service Economy" as a replacement; a silly notion that one can make a nation prosperous by doing each others' laundry for a fee. From the point of view of the government, the service economy worked, because services create transactions and all transactions are taxed, so tax revenues continued to pour into the government coffers. But without new money coming in from product sales, all that was really happening was that wealth was being transferred from the private sector to the government. After a while, as the bottom 80% of the society began to see a decline in earnings (adjusting for inflation) and living standards, tax revenues began to subside. By the 90s, revenues had fallen off to the point where President Clinton had to loot the Social Security Trust fund (and a few others) to balance the Federal Budget.
Then President Bush signed his tax cuts for the rich, and the government's descent into a black hole of debt accelerated.
Now, as the economy tightens, people are realizing that they don't need "services." The vast global network set up to bring clients to American data/phone service providers has backfired, instead taking service jobs away to other, more tax-friendly nations.
America is learning how to do their own laundry again, and that means the illusion that we could run the nation on services is collapsing.
--Mike Rivero, Posted Feb 5, 2008 09:23 AM PST, Category: ECONOMY


P
 
darkbeaver

darkbeaver

the universe is electric
Jan 26, 2006
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Bankers Gone Bonkers
Global Finance and the Insanity Defense
By PAM MARTENS
04/02/08 "Counterpunch" --- - With Wall Street capital disappearing as fast as foreclosures are climbing, one foreign head of state had an epiphany. French President Nicholas Sarkozy advanced the idea recently that the global financial system is "out of its mind."
To develop this theory further, I've reconstructed below some of the mileposts on our journey to this financial loony bin.
Exhibit One: Commit-a-Felony-Get-a-Bonus Contract.
Back in 2002, Mark Belnick, who had previously been one of the legal go-to guys for Wall Street as a rising star at corporate law firm Paul,Weiss, Rifkind, Wharton & Garrison, found himself transplanted as General Counsel at fraud-infested Tyco International. Mr. Belnick inked a retention agreement for himself and it was duly filed without fanfare at the top corporate cop's web site, the Securities and Exchange Commission (SEC). The agreement guaranteed Mr. Belnick a payment of at least $10.6 million should he commit a felony and be fired before October 2003.
Very prescient fellow, Mr. Belnick was indeed charged with a few felonies like grand larceny and securities fraud by the Manhattan District Attorney's office. Mr. Belnick was acquitted of those charges and the SEC let him off the hook for aiding and abetting federal violations of securities laws with a $100,000 penalty payment and a prohibition against serving as an officer or director of a public company for five years. Mr. Belnick agreed to the SEC settlement without admitting or denying the charges. Mr. Belnick did not lose his law license and continues to practice law.
While Mr. Belnick was drafting his "felony bonus" agreement with Tyco, he was also teaching a law course at Cornell on ethics. Today, his agreement is available at the FindLaw.com web site as a "sample business contract," raising the suspicion that we as a society have become desensitized to financial insanity.
Exhibit Two: Supreme Insanity.
On December 7, 2006, Wall Street was elated to learn that the U.S. Supreme Court had agreed to hear its case requesting that a no-law zone be drawn around its financial borders for acts of collusion and commercial bribery, such as those so well documented in the issuance of new stock offerings during the tech/dotcom bubble. Calling the matter an alleged "epic Wall Street conspiracy," the U.S Federal Court of Appeals for the Second Circuit had earlier turned down Wall Street for its requested grant of immunity.
The Wall Street firms and their legions of lawyers appealed to the Supreme Court, arguing that the SEC (which, by the way, has no criminal powers) should have sole authority to regulate it and, therefore, it should be immune from other U.S. laws governing collusion and commercial bribery. (Credit Suisse First Boston Ltd. v. Billings.)
On June 18, 2007, the Supreme Court issued its opinion giving Wall Street everything it wanted, concluding that the SEC was doing a good job. The Court wrote: "...there is here no question of the existence of appropriate regulatory authority, nor is there doubt as to whether the regulators have exercised that authority."
The sweeping ignorance of that statement is breathtaking. Whether it was Wall Street firms price fixing on NASDAQ for decades or the orchestrated rigging of the market for new stock issues in the late 90s or the current institutionalized system of credit fraud, the SEC always has its lens fogged until some college professors or investigative reporters publish a step by step playbook, disseminate it widely, and force the SEC to take action to save face.
Worse yet, when the SEC finally does take action, it imposes fines of millions for stealing billions, making crime one of the most productive profit centers on Wall Street.
This 2007 decision from the Supreme Court comes exactly 20 years and 10 days after the 1987 Supreme Court decision in Shearson/American Express Inc. v. McMahon. Under this ruling, Wall Street has been able to run a private justice system called mandatory arbitration to hear the cases of the investors or employees it defrauds (with the exception of class actions). The instruction manual for this private justice system explains that adherence to the law is not required; arbitration panel members, many on Wall Street's payroll, can just go with their gut.
In other words, the highest court in our land is telling Americans that the reward for serial lawlessness is immunity from the law.
Exhibit Three: Banks' Secret Profit Center: Your Death.
Few Americans are aware that for at least 16 years big business and banks have been secretly taking out millions of life insurance policies on their rank and file workers and naming the corporation the beneficiary of the death benefit without the knowledge of the worker. The individual policies are frequently in the hundreds of thousands of dollars. If the employee leaves the company, no problem; big business is still allowed to collect the death benefit and they track the employee through the Social Security Administration to keep tabs on when they die. These policies are commonly known as "dead peasant" or "janitor" policies because they insure low-wage earners including janitors. Some of the largest corporations in America have been boosting their income statements by including cash buildup in the policies as well as receiving the death benefit tax free.
In 2003, the General Accountability Office (GAO) released a study with the startling findings that companies were taking out multiple policies on the same individual and that 3,209 banks and thrifts had current cash values in these policies totaling $56.3 Billion.
But instead of a congressional revolt against this revolting practice, it remained in place for at least 16 years after Congress first learned about it.
Then along comes the worker-friendly sounding Pension Protection Act of 2006 submitted by our Congress and signed by the President. Buried deep within this massive document was the grandfathering of the millions of previously issued policies with a little tinkering at the edges of tax and reporting issues on newly issued policies.
Exhibit Four: They Keep the Money; You Get the Slogan.
Around the time the stock market was in the process of losing $7 trillion of investor wealth in ill-conceived techs, dotcoms and telecoms, aided and abetted by Citigroup and its Wall Street cronies, I was driving on Charles Lindbergh Blvd. in Uniondale, Long Island when a bizarre billboard caught my eye. The giant billboard read:
He who dies with the most toys is still dead.
Live Richly.
(Citigroup logo: "Citi" and angelic red halo.)
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I had never worked on Madison Avenue but I knew a lot of ad folks and I was pretty sure advertisements typically involved children, pets or other warm and fuzzy things. Citigroup telling me to ponder my own death seemed, well, "out of its mind."
I knew there had to be more behind this campaign. According to Citigroup's web site, the "Live Richly" campaign was meant to communicate "that Citi is an advocate for a healthy approach to money. Citi is an active partner in achieving perspective, balance, and peace of mind in finances and in life for its customers."
The ad agency was Fallon Worldwide and it clearly had Citigroup confused with a social responsibility fund, not the firm that named its trades after its real motives like the "Dr. Evil" trade that disrupted the European bond markets or the "Black Hole" mechanism associated with the bankrupting of Italian dairy giant, Parmalat.
Here's a sampling of the insanity taking place inside Citigroup as they spent millions extolling the public to evolve as better human beings and, more subtly, pay no mind to the $7 trillion of investor wealth that's evaporating behind our curtain of kindness.
Citigroup slogan: People with fat wallets are not necessarily more jolly.
Citigroup reality: Sandy Weill, Citigroup's CEO, earned "$785 million in total compensation over five years: more than any chief executive in America, and by a wide margin." Dan Ackman, Forbes, April 26, 2001.
Citigroup slogan: Holding shares shouldn't be your only form of affection.
Citigroup reality: "A recently unearthed 'highly confidential' Citigroup memo openly discussed the 'pressures' keeping research analysts from providing investors with honest research.In the 2002 memo, John Hoffman, then global research chief for Citi's Salomon Smith Barney division, advised Salomon Smith Barney CEO Michael Carpenter of the internal view that 'implementation and enforcement of clearer and more accurate ratings is in conflict with certain paramount goals of our firm'-namely, maximizing underwriting fees." Peter Elkind, Fortune, November 23, 2005
The memo was obtained as a Florida law firm attempted to get restitution for what Salomon Smith Barney clients were increasingly holding: worthless shares.
Cumulatively, all of these examples suggest that a strong argument could be made that unfettered greed finds its ultimate expression in systemic corruption which is frequently indistinguishable from insanity.
Please note just how much of this insanity can be placed at the doorstep of self-regulation.
Pam Martens worked on Wall Street for 21 years; she has no securities position, long or short, in any company mentioned in this article. She writes on public interest issues from New Hampshire. She can be reached at pamk741@aol.com
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http://www.informationclearinghouse.info/index.html​
 
darkbeaver

darkbeaver

the universe is electric
Jan 26, 2006
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A near global economic recession will ensue as the financial and credit losses and the credit crunch spread around the world. Panic, fire sales, cascading fall in asset prices will exacerbate the financial and real economic distress as a number of large and systemically important financial institutions go bankrupt. A 1987 style stock market crash could occur leading to further panic and severe financial and economic distress. Monetary and fiscal easing will not be able to prevent a systemic financial meltdown as credit and insolvency problems trump illiquidity problems. The lack of trust in counterparties - driven by the opacity and lack of transparency in financial markets, and uncertainty about the size of the losses and who is holding the toxic waste securities - will add to the impotence of monetary policy and lead to massive hoarding of liquidity that will exacerbates the liquidity and credit crunch.
In this meltdown scenario US and global financial markets will experience their most severe crisis in the last quarter of a century.
Can the Fed and other financial officials avoid this nightmare scenario that keeps them awake at night? The answer to this question - to be detailed in a follow-up article - is twofold: first, it is not easy to manage and control such a contagious financial crisis that is more severe and dangerous than any faced by the US in a quarter of a century; second, the extent and severity of this financial crisis will depend on whether the policy response - monetary, fiscal, regulatory, financial and otherwise - is coherent, timely and credible. I will argue - in my next article - that one should be pessimistic about the ability of policy and financial authorities to manage and contain a crisis of this magnitude; thus, one should be prepared for the worst, i.e. a systemic financial crisis. http://www.sott.net/articles/show/1...ltdown-The-Twelve-Steps-to-Financial-Disaster
 
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