Financial Crisis

[churchill]

Citigroup Is Cooking the Books By Charlie Gasparino

http://www.foxbusiness.com/markets/2010/08/25/analyst-citigroup-cooking-books/

[midas]

Citigroup Is Cooking the Books By Charlie Gasparino

http://www.foxbusiness.com/markets/2010/08/25/analyst-citigroup-cooking-books/

You can understand why this would be of interest to Fox news because

even they tried to get information in 2008 about Citigroup.

" In December 2008, Fox News Network LLC, parent of Fox Business,

filed suit in U.S. District Court in Manhattan to force the Treasury to

release documents related to the Citigroup and AIG bailouts."

Unbelieveable when you think Citigroup is 27 percent owned by the Treasury

so they should fully open to scrutinty by the public

[midas]

Federal Reserve still desperately fighting off any attempt for the

public to look behind the scenes.

Fed Given 60 Days for Supreme Court Appeal of Document Disclosure Order

" The Federal Reserve Board was given 60 days to decide whether to take a Freedom of Information Act case to the U.S. Supreme Court or disclose documents about loans it made to banks during the credit crisis."

“It’s disappointing that the board and the Clearing House have decided to further delay the release of these documents, particularly since both the district court and the court of appeals have held that the public has the right to see them,” said Thomas Golden, a partner with Willkie Farr & Gallagher LLP in New York, Bloomberg LP’s attorneys in the case. “We remain confident that, sooner or later, the public’s right to know what its government has been up to will be vindicated here.”

http://www.bloomberg.com/news/2010-08-27/federal-reserve-given-60-days-to-appeal-disclosure-order-to-supreme-court.html

[12DrinkMore]

Well, haven't been around here for a while. Getting on with life, I suppose.

But this has drawn my anger.

http://www.independe...ee-2064627.html

A $112bn sovereign wealth fund that invests the savings of 12.3 million Malaysian workers has launched a £1bn property spending spree as Far East money streams into the UK

What are these idiots thinking about? The future is not in the UK and its bloated property market and they are also taking on a massive currency risk on behalf of all these 12.3 million hardworking Malaysians.

It has awarded the global fund managers a mandate to invest £500m of equity each in property markets across Europe, although the UK is its primary focus

Yeah, great decision. Let these leeches take a 10% commission or more, and invest in the UK property market?????

How on earth was this deal pushed through?

Edited August 29, 2010 by 12DrinkMore

[flying]

I got tired of watching banks fail so had not seen the FDIC list in awhile.

Took a look today & see Aug 20th may have been a new record.

Eight banks in one day.

I also see the Chicago based Shore Bank had over 1.4 billion in shared losses with the FDIC

I did not look at the rest...I was just curious

As of June 30, 2010, ShoreBank had approximately $2.16 billion in total assets and $1.54 billion in total deposits. Urban Partnership Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of ShoreBank. In addition to assuming all of the deposits of the failed bank, Urban Partnership Bank agreed to purchase essentially all of the assets except for the marketable securities and fixed assets.

The FDIC and Urban Partnership Bank entered into a loss-share transaction on $1.41 billion of ShoreBank's assets

http://www.fdic.gov/news/news/press/2010/pr10193.html

http://www.fdic.gov/bank/individual/failed/banklist.html

Dont know if anyone is still counting but I see 118 banks down in 2010 ...so far.... for 2010 alone.

2009 had 140 banks fail with combined assets of 170.9 Billion USD

So the FDIC has said that The pace of bank failure this year is well ahead of 2009, which saw a total of 140 banks closed amid the recession and mounting loan defaults.

This will surely leave a stain

Edited August 30, 2010 by flying

[midas]

Well, haven't been around here for a while. Getting on with life, I suppose.

But this has drawn my anger.

http://www.independe...ee-2064627.html

A $112bn sovereign wealth fund that invests the savings of 12.3 million Malaysian workers has launched a £1bn property spending spree as Far East money streams into the UK

What are these idiots thinking about? The future is not in the UK and its bloated property market and they are also taking on a massive currency risk on behalf of all these 12.3 million hardworking Malaysians.

It has awarded the global fund managers a mandate to invest £500m of equity each in property markets across Europe, although the UK is its primary focus

Yeah, great decision. Let these leeches take a 10% commission or more, and invest in the UK property market?????

How on earth was this deal pushed through?

12D when i read this my instant reaction was the same as you. But then perhaps they are

thinking of strategic locations around the olympic Games site. In 1996 I watched how some property

values around the Atlanta area surged just before their games and then i was living in Sydney

through the build up in 2000 and again there was money to be made at that time.

Of course those were different times for the world economy and it would only be a quick get in and get out trade.

Other than that as you say, i can't see where the rental growth would be in the UK to justify long term investment.

[teletiger]

China may just have lost half a Trillion $ in UST.

http://www.zerohedge.com/article/rumor-pboc-governor-zhou-xiaochuan-has-defected-china-after-suffering-half-trillion-ust-rela

Regards.

Flying, wasn't the Shore Bank one of Bambi's pet projects? Got various bailouts from GS and MS over the past few months. Raised a few eyebrows at the time. Might come back to haunt him.

Regards.

[flying]

Flying, wasn't the Shore Bank one of Bambi's pet projects? Got various bailouts from GS and MS over the past few months. Raised a few eyebrows at the time. Might come back to haunt him.

Regards.

Good Catch TT Also Bill & Hillary Clinton it seems....

Obama’s Shorebank Connections Go Way Back

Chicago's ShoreBank morphs into Urban Partnership Bank to continue its progressive Green Agenda using FDIC funds

Chicago's ShoreBank, known as the "Clintons' favorite bank" and with close ties to the Obama Administration, which allegedly pushed Goldman Sachs and Citibank to underwrite it using $135 million of their TARP funds even as it reported losses, failed on August 20th but immediately reorganized itself as Urban Partnership Bank. Upon the reorganization, the Federal Deposit Insurance Corporation (FDIC) quickly handed over $367.7 million to keep the newly renamed bank's doors open.

Edited August 30, 2010 by flying

[Abrak]

Yeah the Shore Bank deal does look to be a pass round the hat to the usual suspects.

Investors in Urban Partnership Bank read like an all-star roster of U.S. finance, including American Express Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., GE Capital Equity Investments Inc., Morgan Stanley, Northern Trust Corp. and Wells Fargo & Co. The Ford Foundation and the MacArthur Foundation also are investors.

All in little bankrupt no name bank from the middle of nowhere.

[Naam]

China may just have lost half a Trillion $ in UST

= rumours, unfounded speculations, nose poking, hypothetical extrapolations

[midas]

I got tired of watching banks fail so had not seen the FDIC list in awhile.

Took a look today & see Aug 20th may have been a new record.

This will surely leave a stain

Well even a Swedish bank imploded today.

But the interesting part is the cause of the failure was, wait for it,

TRADINGLOSSES!

http://di.se/Default.aspx?pid=3866&epslanguage=sv

[midas]

I got tired of watching banks fail so had not seen the FDIC list in awhile.

Took a look today & see Aug 20th may have been a new record.

This will surely leave a stain

Well even a Swedish bank imploded today.

But the interesting part is the cause of the failure was, wait for it,

TRADINGLOSSES!

http://di.se/Default.aspx?pid=3866&epslanguage=sv

here is the story in English :-

Swedish bank goes into liquidation

" Sweden’s Financial Supervisory Authority cancelled HQ’s bank licence on Saturday, saying the bank had broken “some of the most basic rules”. It said these included unacceptable shortcomings in controlling its trading operation and taking “such large risks that the company endangered its own survival”. - sounds like 2008 all over again Banksters haven't learnt a damned thing

http://www.irishtimes.com/newspaper/finance/2010/0831/1224277909488.html

[midas]

And here’s Lehman brothers, one of Wall Streets’ finest, most respected financial institutions which had been in business for over 150 years announcing that it had “no idea” “if it had sold $2 billion more options than it had bought, or whether it owned $4 billion more than it had sold.”

The notional value of the derivatives market at the time that Lehman went bust was somewhere between $600 trillion and $1 Quadrillion (1,000 trillions). It was a market of inter-linked paper contracts entangling virtually every financial institution (including some non-financials), country (Greece, Italy used derivatives to get into the European union), and county (Birmingham Alabama is one example) in the world. As a market it was at least 20 times larger than the world stock market and somewhere north of 10 time World GDP.

Consider that the Credit Default Swap (CDS) market which nearly took the financial system down in 2008 was roughly $50-60 trillion in size. In contrast, the interest rate based derivative market is in the ballpark of $500+ trillion.

Indeed, US commercial banks alone have $182 TRILLION in notional value of interest rate based derivatives outstanding right now. To put that ridiculous number in perspective it’s 13 times US GDP and roughly three times WORLD GDP.

http://www.bloomberg.com/news/2010-08-30/lehman-derivatives-records-a-mess-barclays-executive-says.html

[flying]

Quadrillion...I do believe that is the first time I have heard that.

Consider that the Credit Default Swap (CDS) market which nearly took the financial system down in 2008 was roughly $50-60 trillion in size. In contrast, the interest rate based derivative market is in the ballpark of $500+ trillion

Did they ever sort that out?... Not to my knowledge.

Which always makes me wonder because that was the claim no?

That if we didn't sign zee paper.. aka: bailout/TARP The US would be in a hole that would never see the light of day again.

Yet they in fact did not address it did they? Instead a bait & switch after approval vote reversal against the people of the USA for the bailout/TARP Fraud.....So now what??

Edited August 31, 2010 by flying

[midas]

Quadrillion...I do believe that is the first time I have heard that.

Consider that the Credit Default Swap (CDS) market which nearly took the financial system down in 2008 was roughly $50-60 trillion in size. In contrast, the interest rate based derivative market is in the ballpark of $500+ trillion

Did they ever sort that out?... Not to my knowledge.

Which always makes me wonder because that was the claim no?

That if we didn't sign zee paper.. aka: bailout/TARP The US would be in a hole that would never see the light of day again.

Yet they in fact did not address it did they? Instead a bait & switch after approval vote reversal against the people of the USA for the bailout/TARP Fraud.....So now what??

well natural progression of course !

But how big can this cake be ?

Today the IMF announced it "expanded and enhanced its lending tools to help contain the occurrence of financial crises." As a result, the IMF has as of today extended the duration of its existing Flexible Credit Line (FCL) to two years, concurrently removing the borrowing cap on this facility, which previously stood at 1000 percent of a member’s IMF quota, in essence making the FCL a limitless credit facility, to be used to rescue whomever, at the sole discretion of the IMF's overlords."

http://www.imf.org/external/np/sec/pr/2010/pr10321.htm

[lannarebirth]

Yeah the Shore Bank deal does look to be a pass round the hat to the usual suspects.

Investors in Urban Partnership Bank read like an all-star roster of U.S. finance, including American Express Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., GE Capital Equity Investments Inc., Morgan Stanley, Northern Trust Corp. and Wells Fargo & Co. The Ford Foundation and the MacArthur Foundation also are investors.

All in little bankrupt no name bank from the middle of nowhere.

It's embarassing to come from a country where these things happen and the principals aren't stood up against a wall and shot. Maybe I'll do it myself one day.

[lannarebirth]

double / :jap:

Edited August 31, 2010 by lannarebirth

[flying]

..So now what??

well natural progression of course !

But how big can this cake be ?

Funny you put it that way

Because when one looks at it....Seems like they are following a well worn path that most who

are about to file bankruptcy follow.

Running up the credit lines to bursting limits....Stealing from Peter to pay Paul.

[midas]

..So now what??

well natural progression of course !

But how big can this cake be ?

Funny you put it that way

Because when one looks at it....Seems like they are following a well worn path that most who

are about to file bankruptcy follow.

Running up the credit lines to bursting limits....Stealing from Peter to pay Paul.

maybe its the IMF and not USA that will trigger hyperinflation ?

[flying]

maybe its the IMF and not USA that will trigger hyperinflation ?

AFAIK The IMF is the USA

Edited August 31, 2010 by flying

[ronz28]

The total notional values of derivatives is similar to knowledge of the number of bills in a truckload of currency. If you do not know the fair value (exchange rate) of the currency the truckload may be worth US$100 or it may be one billion US$ depending on the exchange rate of the currency involved. I wouldn't have a truckload of currency guarded that is worth $100 but I might want to have Special Armored Service to transport a truckload of one billion US dollars.

Same for derivatives, one derivative with a notional value of 10 million US$ may be worth $1 or it may be worth $500,000, etc. depending on the terms of the derivative. The financial controls suitable for a derivative depends on its fair value and notional value is just one of the factors needed to calculate the actual fair value of a derivative.

I wish newspapers would report on the fair value of derivatives when they give information on the notional value of derivatives but I guess that is what they are fed and that inflates the significance of derivatives.

Derivatives certainly can be risky. The main risk I see in derivatives is that there often is no readily available market values and valuation needs to involve estimates of future cash flows that different models and assumptions would give different results. Companies and banks may mismanage derivatives due to their complex terms and by failing to continuously track fair values so their risks are appropriately managed. A change in market interest rates or any factor in a derivatives terms may significantly affect its valuation from day to day.

One side of a $100 million notional derivative may estimate its fair value at say $1 million and the other side of the transaction may say its worth $2 million. Each side proves up or reestimate their valuation with their CPA, and each party books their own valuation as an asset or liability depending on which side of the derivative they are on. In some cases, the fair values of derivatives may even be off book and undisclosed or only disclosed in the notes to the financial statements on an aggregated basis.

To me, there are just too many ways a company or bank's financial statements can be clouded with derivatives. So all derivatives should be booked and stated at a fair value at the valuation date based on a fair value methodology that every company and bank must follow in the circumstances.

[Abrak]

To me, there are just too many ways a company or bank's financial statements can be clouded with derivatives. So all derivatives should be booked and stated at a fair value at the valuation date based on a fair value methodology that every company and bank must follow in the circumstances.

I agree 100% that derivatives should not be off balance sheet but I am not really convinced there is a fair value methodology for risk. There is simply a price.

What I mean by that is that some risk is 'independent'. Say life insurance - a person has x% chance of death and if he dies it does not impact anyone elses chances of dying. But much risk is 'systemic' and suffers from the fallacy of composition. If Greece defaults, it effects Spain, which effects Ireland and maybe Italy. Or if house prices fall defaults climb exponentially.

Not only does this mean fair value is non-determinable but that those who feel their asset is 'risk free' now have counter party risk.

[12DrinkMore]

12D when i read this my instant reaction was the same as you. But then perhaps they are

thinking of strategic locations around the olympic Games site. In 1996 I watched how some property

values around the Atlanta area surged just before their games and then i was living in Sydney

through the build up in 2000 and again there was money to be made at that time.

Of course those were different times for the world economy and it would only be a quick get in and get out trade.

Other than that as you say, i can't see where the rental growth would be in the UK to justify long term investment.

I suspect that they have been sold a pup by a bunch of western bankers, presumably on the promise "ever escalating" UK property market prices.

[12DrinkMore]

Wanna have an increased pension?

Well, I am about to take up smoking, drink even more beer, stuff myself on 7/11 fast food every day, work on clogging the arteries, and get furious over banks to raise my blood pressure, jeeze, I could even become wealthy....

http://blogs.telegra...ensions-crisis/

About 30 per cent of people entering retirement are entitled to receive substantially higher incomes from enhanced annuities because they are smokers, obese, suffer from high blood pressure or have more serious medical conditions. Buying the right type of annuity that takes account of their individual state of health could make a massive difference to their quality of life in retirement, according to Caroline Kane of the pensions giant AEGON.

She said: "As a rough guide, someone with diabetes, treated with retinopathy, nephropathy and neuropathy can expect a 31 per cent increase in their guaranteed income for life from an enhanced annuity compared to a standard annuity. Someone with lung cancer, spread to the bones and treated with radiotherapy and chemotherapy would get around 120 per cent more annual income. A male smoker aged 65 with high blood pressure can expect an increase of around 7 per cent."

Edited August 31, 2010 by 12DrinkMore

[BlackJack]

from trader tracks

For people buying and selling shares in our business, the biggest thing to watch for is the bond markets. That's the Achilles heel of the worldwide credit system. The stock market is big but it's peanuts compared to bonds. Bonds are 70x larger than stocks. The bond market today is in very big trouble.

TGR: Could you explain that further?

RW: At this point, Fed Chairman Bernanke can't find buyers for his bonds; so he's got to print bonds and buy them back himself. Recently, the Fed had a bond auction. It was said that 30% of the offering went to indirect buyers (meaning Bernanke bought the stuff back himself). We've seen some other auctions where they've had to buy back as much as 60%. In our view, that's the beginning of the end because the other American bond and bill buyers are backing away.

oh dear

when will the deception end

[Abrak]

Wanna have an increased pension?

Well, I am about to take up smoking, drink even more beer, stuff myself on 7/11 fast food every day, work on clogging the arteries, and get furious over banks to raise my blood pressure, jeeze, I could even become wealthy....

http://blogs.telegra...ensions-crisis/

About 30 per cent of people entering retirement are entitled to receive substantially higher incomes from enhanced annuities because they are smokers, obese, suffer from high blood pressure or have more serious medical conditions. Buying the right type of annuity that takes account of their individual state of health could make a massive difference to their quality of life in retirement, according to Caroline Kane of the pensions giant AEGON.

She said: "As a rough guide, someone with diabetes, treated with retinopathy, nephropathy and neuropathy can expect a 31 per cent increase in their guaranteed income for life from an enhanced annuity compared to a standard annuity. Someone with lung cancer, spread to the bones and treated with radiotherapy and chemotherapy would get around 120 per cent more annual income. A male smoker aged 65 with high blood pressure can expect an increase of around 7 per cent."

12D,

This has always been the case.

I remember that John Swire used to offer a 30% higher pension to those who retired to the UK as against Hong Kong on the basis that they died quicker.

It is simply a numbers game. This is what you employ actuaries for. If you can manage to get prostrate cancer, I am sure your pension will rise dramatically. I actually feel it is one of the options that many retirees should consider in Thailand. Namely a certain income for life based on existing assets being transfered to the insurance company upon death. (Unfortunately the rates are not great.)

[LaoPo]

Wanna have an increased pension?

Well, I am about to take up smoking, drink even more beer, stuff myself on 7/11 fast food every day, work on clogging the arteries, and get furious over banks to raise my blood pressure, jeeze, I could even become wealthy....

http://blogs.telegra...ensions-crisis/

About 30 per cent of people entering retirement are entitled to receive substantially higher incomes from enhanced annuities because they are smokers, obese, suffer from high blood pressure or have more serious medical conditions. Buying the right type of annuity that takes account of their individual state of health could make a massive difference to their quality of life in retirement, according to Caroline Kane of the pensions giant AEGON.

She said: "As a rough guide, someone with diabetes, treated with retinopathy, nephropathy and neuropathy can expect a 31 per cent increase in their guaranteed income for life from an enhanced annuity compared to a standard annuity. Someone with lung cancer, spread to the bones and treated with radiotherapy and chemotherapy would get around 120 per cent more annual income. A male smoker aged 65 with high blood pressure can expect an increase of around 7 per cent."

What they don't say is that you live a LOT shorter, having one of the diseases as described...

I also can't read WHEN you start paying for such pensions.....I doubt if they give you an increased pension, age 55 for example, and you phone them and say:

"Hello, I have lung cancer since I smoked my whole life......do you have my bank account number ?"

LaoPo

[churchill]

12D when i read this my instant reaction was the same as you. But then perhaps they are

thinking of strategic locations around the olympic Games site. In 1996 I watched how some property

values around the Atlanta area surged just before their games and then i was living in Sydney

through the build up in 2000 and again there was money to be made at that time.

Of course those were different times for the world economy and it would only be a quick get in and get out trade.

Other than that as you say, i can't see where the rental growth would be in the UK to justify long term investment.

I suspect that they have been sold a pup by a bunch of western bankers, presumably on the promise "ever escalating" UK property market prices.

Docklands has been hyped because of the Olympics but depends even more on the Financial markets - and I think there is an oversupply of property in this area? Many have been bought by speculators / Too many 1/2 bed flats /

Greenwich and other areas may be better bets ?

I hoped that taking my pension out of the UK in a QROPS I would be more free to make investment decisions - not relying on an Annuity and others health or not for returns - It seems unfair that people with bad habits should be rewarded with a higher pension /

I am thinking about investing in property in 1/2 years time for rental returns - but Where ?? Thailand - Bangkok / Phuket ?- as I am here - (& if it is possible ) UK ? Europe ? HK ? -

And the problem with property in Thailand is resale - When the market is dead _ Now - it is impossible to sell as there are just no buyers ( in Samui anyway )

[12DrinkMore]

In spite of waking the austerity walk, the Irish are having a dismal time.

http://www.bloomberg...tthew-lynn.html

And this is part of the Euro-Lunacy

it's crazy for the Irish to borrow money to give to a country that is in the same boat

But here's an amazing success story, not from Farangland though.

http://www.bloomberg...iple-sales.html

And look at the deflationary market they are having a massive success in.

CEO Choi says he constantly tracks global inventory because prices of Samsung products can fall 40 percent to 50 percent a year -- an average of 1 percent a week.

Astounding.

Edited August 31, 2010 by 12DrinkMore

[Abrak]

In spite of waking the austerity walk, the Irish are having a dismal time.

http://www.bloomberg...tthew-lynn.html

I have always wondered which country would benefit most, or suffer least by exiting first from the Euro. My gut feel is that it has always been between Germany and Ireland. But for instance, Germany appears the major beneficiary of Euro problems at the moment by having an undervalued currency relative to its economy.