Financial Crisis

[Naam]

are those naked shortsellers perhaps poor people who just want to make a buck or two to buy some clothes?

[flying]

are those naked shortsellers perhaps poor people who just want to make a buck or two to buy some clothes?

Some how I doubt the poor folks could buy 1.7 million bucks worth of shorts

We may never know who killed Bear and Lehman. But it sure isn't hard to figure out who's left.

The best way to grasp what happened is to look at the data: On Tuesday, March 11th, there were 201,768 shares of Bear that had failed to deliver. The very next day, the number of phantom shares leaped to 1.2 million. By the close of trading that Friday, the number passed 2 million — and when the market reopened the following Monday, it soared to 13.7 million. In less than a week, the number of counterfeit shares in Bear had jumped nearly seventyfold.

Then again I suppose as things like this are uncovered there will be two kinds of folks & their reactions.

#1 will say it is fraud, counterfeiting plain & simple & the perpetrators should at the very least be jailed.

#2 will say ..sweet deal wish I was in on it.

The new president for whom we all had such high hopes went and hired Michael Froman, a Citigroup executive who accepted a $2.2 million bonus after he joined the White House, to serve on his economic transition team — at the same time the government was giving Citigroup a massive bailout. Then, after promising to curb the influence of lobbyists, Obama hired a former Goldman Sachs lobbyist, Mark Patterson, as chief of staff at the Treasury. He hired another Goldmanite, Gary Gensler, to police the commodities markets. He handed control of the Treasury and Federal Reserve over to Geithner and Bernanke, a pair of stooges who spent their whole careers being bellhops for New York bankers. And on the first anniversary of the collapse of Lehman Brothers, when he finally came to Wall Street to promote "serious financial reform," his plan proved to be so completely absent of balls that the share prices of the major banks soared at the news.

Edited October 20, 2009 by flying

[midas]

Actually Flying I am one of those 'triumph of hope over experience' sort of guys. I do believe there will change in the USA, I do believes values are changing.

I am not convinced that repeating 'I'll be back' makes you the consummate politician. And, one day, people will listen to her and realize she makes sense. And maybe one day someone like her will be President.

I know it sounds ridiculous now but somehow you have to put faith in capitalism and democracy because there is nothing else.

So there are a couple of people on this thread who believe there will be riots and food fights. I just believe that Eclipses, bling and Paris Hilton will be out and a new social conscience will be in. 'Urban Art' is very big you know.

" Actually Flying I am one of those 'triumph of hope over experience' sort of guys " you mean like " extend and pretend "

I think you will find there are more than " a couple " of people on this thread who simply relate to the likes of

what Celente says simply because he only joins the dots to predict a trend which is believable. BUT I am

very open minded to consider any " blue sky " scenarios.... but maybe my imagination is not so good without

someone explaining how we are likely to get there( particularly based on recent behavioural patterns of banksters and the

Obama regime

Oh and as for " 'Urban Art' is very big you know "...........yes this is very artistic

http://english.aljazeera.net/focus/2009/10...4442454900.html

[flying]

Oh and as for " 'Urban Art' is very big you know "...........yes this is very artistic

One of the many Urban Artists

http://www.rense.com/1.mpicons/dees1.htm

Edited October 20, 2009 by flying

[Abrak]

Midas,

While I will readily admit that the USA getting a President the quality of Elizabeth Warren is in the 'pigs might fly territory' - they at least have that choice while in Thailand if you put a gun to my head and asked me to choose between Newin and Chalerm I would just tell you to pull the trigger.

Where I believe you will simply be wrong as well as Celente - has nothing to do with the economics - simply that austerity will be marketed to the public. Obama is going to be good at that. And if nobody cares that the GS tea lady gets a US$500k bonus after being bailed out this year, how anyone can extrapolate that to riots is beyond me.

[lannarebirth]

are those naked shortsellers perhaps poor people who just want to make a buck or two to buy some clothes?

I mentioned this practice of naked short selling a couple of years ago here, and posted the link to the Deep Capture site. It was just too "out there" then for people to credit. It reads like bad fiction but for the most part it's all true.

[flying]

While I will readily admit that the USA getting a President the quality of Elizabeth Warren is in the 'pigs might fly territory' - they at least have that choice

I do not remember if you were from the US Abrak? But by this comment I am guessing you are not.

It is a fallacy that we get a choice.....We do not.

First there is the Electoral College & then their Electors are technically free to vote for anyone eligible to be President....We the people never really know.

So the reality is the fairy tale is the same that we tell other countries we try to overthrow & install puppet regimes

That they too can have true freedom as we do<sic> & elect who they want to fill the offices of Government. ( Presidential I mean )

Thailand may have its open corruption but it is not so different in the US just better fairy tales here.

Edited October 20, 2009 by flying

[midas]

Midas,

While I will readily admit that the USA getting a President the quality of Elizabeth Warren is in the 'pigs might fly territory' - they at least have that choice while in Thailand if you put a gun to my head and asked me to choose between Newin and Chalerm I would just tell you to pull the trigger.

Where I believe you will simply be wrong as well as Celente - has nothing to do with the economics - simply that austerity will be marketed to the public. Obama is going to be good at that. And if nobody cares that the GS tea lady gets a US$500k bonus after being bailed out this year, how anyone can extrapolate that to riots is beyond me.

" simply that austerity will be marketed to the public."

yes but if he markets this too well ..how can a country that doesnt make anything

and previously relied on consumption for 70% of its GDP continue to work effectively ?

[flying]

I mentioned this practice of naked short selling a couple of years ago here, and posted the link to the Deep Capture site. It was just too "out there" then for people to credit. It reads like bad fiction but for the most part it's all true.

I do not know if I was a member of the forum when you posted that but,

I do recall you posting once describing how legal shorting added a important function to the market. But you also stated then that the naked short selling was a bad thing.

It is quite understandable now thanks.

[Abrak]

I do not remember if you were from the US Abrak? But by this comment I am guessing you are not.

It is a fallacy that we get a choice.....We do not.

Yes apologies Flying - from the UK - getting a little carried away with the Obama thing.

The choice is usually a Clinton or a Bush with spot the difference having something to do with an individuals rights to abortion or something.

Anyway if she is spare maybe we could borrow her if Korn gets Caymaned.

[midas]

I do not remember if you were from the US Abrak? But by this comment I am guessing you are not.

It is a fallacy that we get a choice.....We do not.

Yes apologies Flying - from the UK - getting a little carried away with the Obama thing.

The choice is usually a Clinton or a Bush with spot the difference having something to do with an individuals rights to abortion or something.

Anyway if she is spare maybe we could borrow her if Korn gets Caymaned.

Yes because it doesnt matter if Mickey Mouse occupies the White House and Minnie is First Lady

That is not where the real power lies as we now know

" Give me control of a nation's money and I care not who makes her laws. "

Mayer Amschel Rothschild

Edited October 20, 2009 by midas

[flying]

Here is a cheery one.................

Death of 'Soul of Capitalism:

20 reasons America has lost its soul and collapse is inevitable

http://www.marketwatch.com/story/americas-...able-2009-10-20

15 more clues capitalism lost its soul ... is a disaster waiting to happen

Much more evidence litters the battlefield:

1. Wall Street wealth now calls the shots in Congress, the White House
   
2. America's top 1% own more than 90% of America's wealth
   
3. The average worker's income has declined in three decades while CEO compensation exploded over ten times
   
4. The Fed is now the 'fourth branch of government' operating autonomously, secretly printing money at will
   
5. Since Goldman and Morgan became bank holding companies, all banks are back gambling with taxpayer bailout money plus retail customer deposits
   
6. Bill Gross warns of a "new normal" with slow growth, low earnings and stock prices
   
7. While the White House's chief economist retorts with hype of a recovery unimpeded by the "new normal"
   
8. Wall Street's high-frequency junkies make billions trading zombie stocks like AIG, FNMA, FMAC that have no fundamental value beyond a Treasury guarantee
   
9. 401(k)s have lost 26.7% of their value in the past decade
   
10. Oil and energy costs will skyrocket
    
11. Foreign nations and sovereign funds have started dumping dollars, signaling the end of the dollar as the world's reserve currency
    
12. In two years federal debt exploded from $11.2 to $23.7 trillion
    
13. New financial reforms will do little to prevent the next meltdown
    
14. The "forever war" between Western and Islamic fundamentalists will widen
    
15. As will environmental threats and unfunded entitlements
    

Edited October 20, 2009 by flying

[Abrak]

Midas,

While I will readily admit that the USA getting a President the quality of Elizabeth Warren is in the 'pigs might fly territory' - they at least have that choice while in Thailand if you put a gun to my head and asked me to choose between Newin and Chalerm I would just tell you to pull the trigger.

Where I believe you will simply be wrong as well as Celente - has nothing to do with the economics - simply that austerity will be marketed to the public. Obama is going to be good at that. And if nobody cares that the GS tea lady gets a US$500k bonus after being bailed out this year, how anyone can extrapolate that to riots is beyond me.

" simply that austerity will be marketed to the public."

yes but if he markets this too well ..how can a country that doesnt make anything

and previously relied on consumption for 70% of its GDP continue to work effectively ?

Actually my 'guess' is this. He is going to market austerity with 'something'. My 'guess' is that he will go with some self-sufficiency model. Either that means abandoning the peg or imposing tariff barriers. The theory of comparative advantage 'generally' (and I know there are other economists that argue tariff barriers boost growth) argue that the eradication of tariffs is a positive sum game but it does not say that both countries benefit.

So you are right that you cannot market austerity forever, so at some point you have to market it for future gain.

Celente seems to argue, in my opinion, that the US will simply implode and I just dont see that happening.

[lannarebirth]

Midas,

While I will readily admit that the USA getting a President the quality of Elizabeth Warren is in the 'pigs might fly territory' - they at least have that choice while in Thailand if you put a gun to my head and asked me to choose between Newin and Chalerm I would just tell you to pull the trigger.

Where I believe you will simply be wrong as well as Celente - has nothing to do with the economics - simply that austerity will be marketed to the public. Obama is going to be good at that. And if nobody cares that the GS tea lady gets a US$500k bonus after being bailed out this year, how anyone can extrapolate that to riots is beyond me.

" simply that austerity will be marketed to the public."

yes but if he markets this too well ..how can a country that doesnt make anything

and previously relied on consumption for 70% of its GDP continue to work effectively ?

Actually my 'guess' is this. He is going to market austerity with 'something'. My 'guess' is that he will go with some self-sufficiency model. Either that means abandoning the peg or imposing tariff barriers. The theory of comparative advantage 'generally' (and I know there are other economists that argue tariff barriers boost growth) argue that the eradication of tariffs is a positive sum game but it does not say that both countries benefit.

So you are right that you cannot market austerity forever, so at some point you have to market it for future gain.

Celente seems to argue, in my opinion, that the US will simply implode and I just dont see that happening.

I don't think he's going to market austerity at all. He's in the debt marketing business.

I think he's going to tax with a vengeance and cooperate with his Wall Street masters to get paper asset prices up and try to make people feel wealthy again and give the govt. something to tax. I think he will make a token attack at the wealthy but in the end do nothing to them. What would cause an implosion is more diviseness amongst the political parties. Though they're practically the same in so many ways their respective constituents hate each other intensely. He may try to use that hate to push his agenda, and if he does I think things will implode.

[teletiger]

I suspect a lot of Bambi supporters expected something like this:

http://jessescrossroadscafe.blogspot.com/2...ompetitive.html

'And got zip.

Regards.

[teletiger]

Another superb piece from

JESSE'S CAFÉ AMÉRICAIN

"TRUTH IS NOT ONLY VIOLATED BY FALSEHOOD; IT MAY BE EQUALLY OUTRAGED BY SILENCE." HENRI FREDERIC AMIEL

http://jessescrossroadscafe.blogspot.com/2...historical.html

He really is a most discerning chap.

Regards.

[Abrak]

BTW a broker told me today that consencus forecasts for GDP in 3Q are 2-2.5% growth in the US. This is basically down to restocking production is up, cash for clunkers and first home buyers subsidy. While consensus is often wrong it is not usually wrong enough that growth would still be negative. However growth is expected to turn negative again either 4Q or 1Q 2010. Obviously car sales fell from August's 1.4m cash for clunkers to the lowest level in 15 years at 965,000. Housing is flat, exports flat, production is up 5% QOQ annualized but the problem is retail sales are up a tadge but basically flat excluding autos so there is simply restocking. That cant go on forever, so while everyone is confident of growth in Q3 they could easily be a return to a recession even by 4Q.

[flying]

BTW a broker told me today that consencus forecasts for GDP in 3Q are 2-2.5% growth in the US. This is basically down to restocking production is up, cash for clunkers and first home buyers subsidy. While consensus is often wrong it is not usually wrong enough that growth would still be negative. However growth is expected to turn negative again either 4Q or 1Q 2010. Obviously car sales fell from August's 1.4m cash for clunkers to the lowest level in 15 years at 965,000. Housing is flat, exports flat, production is up 5% QOQ annualized but the problem is retail sales are up a tadge but basically flat excluding autos so there is simply restocking. That cant go on forever, so while everyone is confident of growth in Q3 they could easily be a return to a recession even by 4Q.

look at Q2 lines 21 thru 25

That is just hot air generated by the usual sources.

But who did it help?

Seems more like the usual vultures will hype the news & it is no surprise a broker told you the possible good news.

Edited October 20, 2009 by flying

[flying]

[flying]

Wonder if anyone has read this blog?

http://hypertiger.blogspot.com/

Of course not as good as Kuhn Naam's

But during the past year I read it from time to time.

The guy has an ego that is for sure & also no bedside manner.

He tends to imply everyone is a moron .....But all that aside

I do find it interesting at times...

[midas]

I don't think he's going to market austerity at all. He's in the debt marketing business.

Yes that makes more sense based on his “ performance ” so far.

I think he's going to tax with a vengeance and cooperate with his Wall Street masters to get paper asset prices up and try to make people feel wealthy again and give the govt. something to tax.

But this is how Gerald Celente predicts the troubles will start ( and not until 2012 so still plenty of time ). He thinks there will be tax revolts and even if people obediently pay up this year and even next year…..how do we know they will not get the stage when they say enough is enough?

I think he will make a token attack at the wealthy but in the end do nothing to them. What would cause an implosion is more diviseness amongst the political parties. Though they're practically the same in so many ways their respective constituents hate each other intensely. He may try to use that hate to push his agenda, and if he does I think things will implode.

And Abrak while you carefully consider the fine tuning of forecasts for GDP 3Q being 2-2.5% growth in the US by “ a broker ”- I think the more important issue that will lead to anger and thus ignite an “ implosion “ is that the fraud is still unresolved and the obscene bonuses ( even bigger ) will still be paid.

Edited October 21, 2009 by midas

[sokal]

You know actually it is people like Elizabeth Warren that give me some long term optimism in the US economy. So bright, so smart, so on the ball and responsive.

I also like her. Since many months ago when I first heard her speak.

But the problem is there are many many bright,smart,on the ball powerless people here.

Time for talking has come & gone. Her discussion of how even now the banks thumb their noses at the people shows it plainly.

All through history bright smart on the ball people have been led to their destruction willingly albeit saying something along the lines of....this is just not right

Actually Flying I am one of those 'triumph of hope over experience' sort of guys. I do believe there will change in the USA, I do believes values are changing.

I am not convinced that repeating 'I'll be back' makes you the consummate politician. And, one day, people will listen to her and realize she makes sense. And maybe one day someone like her will be President.

I know it sounds ridiculous now but somehow you have to put faith in capitalism and democracy because there is nothing else.

So there are a couple of people on this thread who believe there will be riots and food fights. I just believe that Eclipses, bling and Paris Hilton will be out and a new social conscience will be in. 'Urban Art' is very big you know.

what is wrong with a good hard crash ? After that the US will be the best emerging economy in the world. Shoot this dog of an economy and start over.

[sokal]

Greenlight Capital's David Einhorn was speaking today at the 5th Value Investing Congress in New York City.

http://www.cnbc.com/id/15840232?video=1300235801

Ahhh, the famous GLD ETF vigilante.

[midas]

“The Bank of America-Merrill Lynch merger was the outcome of a collaborative effort orchestrated

by Ken Lewis, Henry Paulson, Ben Bernanke, Timothy Geithner and Larry Summers,” said Kurt Bardella,

spokesman for U.S. Representative Darrell Issa, ranking Republican member of the panel. “As a

result of this collaboration, the taxpayers ended up footing the bill so Bank of America didn’t have to

absorb Merrill Lynch’s losses.”

“ collaborative effort ” sounds more like a “ conspiracy to defraud ” to me

Bank of America Told Aid May Help Stock, E-Mail Shows

http://www.bloomberg.com/apps/news?pid=206...id=aDv9AGUzXNRM

Edited October 21, 2009 by midas

[Abrak]

Flying and Midas,

What particular forecast by the 'broker' are referring to? The statement that consensus forecast for 3Q is 2.0-2.5% (which is not his forecast) (and by the way Krugman forecasts it could be as high as 4%) or the one that growth could turn negative again as early as 4Q.

Now admittedly his 4Q forecast is a little radical and may be a 'business call'. But it slightly appears to me that you two dont quite get the 'consensus' forecast bit. I mean how Flying works out that a broker forecasting a possible slip back into recession in the 4Q is 'good news' I dont get.

(Flying re lines 21-25 the aberration is 1Q not 2Q)

[flying]

(Flying re lines 21-25 the aberration is 1Q not 2Q)

Could be & not that it would be a surprise to see it go higher in Q3 & even higher still in Q4 ( lines 21-25 that is)

They will need it in Afghanistan & there is that 2nd stimulus being tossed about in Zobama land. In the the end the prize will be the same on both fronts.

Edited October 21, 2009 by flying

[midas]

Flying and Midas,

What particular forecast by the 'broker' are referring to? The statement that consensus forecast for 3Q is 2.0-2.5% (which is not his forecast) (and by the way Krugman forecasts it could be as high as 4%) or the one that growth could turn negative again as early as 4Q.

Now admittedly his 4Q forecast is a little radical and may be a 'business call'. But it slightly appears to me that you two dont quite get the 'consensus' forecast bit. I mean how Flying works out that a broker forecasting a possible slip back into recession in the 4Q is 'good news' I dont get.

(Flying re lines 21-25 the aberration is 1Q not 2Q)

Oh come on Abrak – you are an intelligent person.

I cannot speak about flying’s opinion but I am referring as to how meaningful any

forecast is that has been given by a broker- a bit like asking an estate agent how he or she sees the

market going forward- spin spin spin.

It is impossible to “ extend an pretend ” for ever and I interpret slipping back into recession as good news

because it must happen. As sokal suggested we need " good hard crash " and to start again. A good dose of

economic laxative to properly flush out the system. How many of these economic projections by now have

been so heavily tainted with valuation assumptions based on “ marked to fantasy ” and I hope the big

accountancy firms have good professional indemnity coverage for when the fall out does eventually

occur because they will need it

[flying]

Check out this video from today....

http://www.cnbc.com/id/15840232?video=1301828700&play=1

Towards the end Attorney General of California Jerry Brown asks Dennis Kneale and Michelle Caruso-Cabrera, "Are you pimping for (State Street Bank) the defendant?

Got it off this story..........

http://jessescrossroadscafe.blogspot.com/2...re-pimping.html

[lannarebirth]

When I jokingly prophesized that in the future, everyone would be either a daytrader of stocks or an Ebay seller, I overlooked one sector of the economy with real growth potential:

http://www.miller-mccune.com/business_econ...s-of-wrath-1506

Edited October 21, 2009 by lannarebirth

[cloudhopper]

^^^It's a mature segment already. Supply is exploding into the face of decreasing discretionary income.