Financial Crisis

[12DrinkMore]

Well, well, well

Want to know how Goldmann makes cash?

http://www.independent.co.uk/news/business/news/how-goldmans-cost-gaddafi-a-13bn-fortune-2291506.html

Just lose 98% of a customer's USD 1,300,000,000.

This does give rise to a couple of questions

1. Did they have the cheek to take "mismanagement fees"?

2. Who was on the other end of those bets? The winning side?

And I wonder if there was any collusion?

"Hey, this is GS here, we have 1.3 bill of Libya's sovereign cash to manage",

"hmm, ok, wouldn't it be a shame if it sort of had some bad luck in the markets?!"

"Well, a new janitor is starting today, maybe during his coffee break he could be put on the job"

"Excellent, just make sure that he is back cleaning the toilets after fifteen minutes"

"Absolutely, we don't like the shit sticking around here, anywhere"

[cloudhopper]

Essay on the ECB and Greece.

http://www.tavakolistructuredfinance.com/Euro.pdf

[Naam]

Greece downgraded by Moody's three notches to CAA1, most bonds gain. crazy world!

[Naam]

Essay on the ECB and Greece.

http://www.tavakolistructuredfinance.com/Euro.pdf

The immediate crisis is in Greece, but it is not alone. It is futile to blame the citizens of deadbeat

borrower countries, and given the flaws in the European Union, it isn’t entirely their fault. The Euro is

a super Deutsche Mark with a French accent. There was no Renaissance of manufacturing and

productive jobs in the outer reaches of the Eurozone.

yeah right! the thieves and frauds who spent stolen money are only partly to blame. why did those from whom was stolen have not more in their pockets? and why did they not help with additional money that more productive jobs were created in the deadbeat countries instead of dancing a german Sirtaki with a french accent?

[cloudhopper]

Well the money is gone now regardless. Sovereign debt will default rapidly up the food chain until it hits Italy then for the euro -

http://www.youtube.com/watch?v=6LM9LMvJ_vw&feature=related

I don't know how much longer the German and French citizens will allow them to print but in the end there just won't be enough helicopters anyway.

[midas]

Essay on the ECB and Greece.

http://www.tavakolistructuredfinance.com/Euro.pdf

The immediate crisis is in Greece, but it is not alone. It is futile to blame the citizens of deadbeat

borrower countries, and given the flaws in the European Union, it isn’t entirely their fault. The Euro is

a super Deutsche Mark with a French accent. There was no Renaissance of manufacturing and

productive jobs in the outer reaches of the Eurozone.

yeah right! the thieves and frauds who spent stolen money are only partly to blame. why did those from whom was stolen have not more in their pockets? and why did they not help with additional money that more productive jobs were created in the deadbeat countries instead of dancing a german Sirtaki with a french accent?

there you go craigt3365. Those guys at the Jefferson Memorial were just hoping to dance the USA's

debt problems away

[churchill]

uhm,...at least they tell you it`s CLASSIFIED!

[jcon]

Edited June 2, 2011 by jcon

[RedFxTrade]

uhm,...at least they tell you it`s CLASSIFIED!

Haha,,,,what a pointless vote...when you don't know what your voting for....I really wish the guy had slipped up and said one of the classifieds out loud...then we could have pieced it all together...Cannot see them letting Ron Paul read that out for fear of that actually happening.

[cloudhopper]

"Should the event occur in urban areas.........Jesus"

2 hilarious clips thanks guys! Didn't know the Onion did videos too...

[BlackJack]

anyone ready for QE3 4 5

its like digging a hole whilst standing in it

this thread will be going on long enough to see QE4 i think

[churchill]

Yes - we're ready it is the only option for the weak -but not in your shit Black!

I don't think the markets are going to stand for anymore bluff/promises from Trichet/Bernanke -

Get the politicians out - LaGarde for IMF !! ... they will be debating for ever ..................................................................

[BlackJack]

Yes - we're ready it is the only option for the weak -but not in your shit Black!

I don't think the markets are going to stand for anymore bluff/promises from Trichet/Bernanke -

Get the politicians out - LaGarde for IMF !! ... they will be debating for ever ..................................................................

The financial media told us all day that it was due to this morning’s bad reports, and that’s all. When has the market ever reversed like that on ONE day’s news? Never! The truth is that all of the heretofore ignored news simply can no longer be ignored and here is a recent list…

May 16th, Empire State Mfg Survey: it was extremely bad, far worse than expected & ignored.

May 17th, Housing Starts: it was very bad, worse than expected & ignored.

May 17th, Redbook retail survey: it was extremely bad, far-far-worse than expected & ignored.

May 17th, Industrial Production: it was extremely bad, far worse than expected & ignored.

May 19th, Weekly Jobless Claims: it was again worse than expected with revisions poorer than originally reported & ignored.

May 19th, Philly Fed Survey: SHOCKINGLY BAD & ignored.

May 19th, LEI: worse than expected & ignored.

May 24th, New Home Sales: better than expected – not ignored – used as a reason to rally.

May 25th, Durable Goods Orders: worse than expected & ignored.

May 25th, FHFA House Price Index: not as bad as expected but still poor showing falling home prices & ignored.

May 26th, GDP: far worse than expected & ignored.

May 26th, Weekly Jobless Claims: it was worse than expected again with revisions poorer than originally reported & ignored.

May 27th, Pending Home Sales: much worse than expected & ignored.

May 31st, S&P Case-Shiller Index: worse than expected, guaranteeing double dip in the housing market & ignored.

May 31st, Chicago PMI: MUCH worse than expected & ignored.

May 31st, Consumer Confidence: terrible & ignored.

June 1st…today…ADP Employment Report: DEVESTATINGLY bad but what is the true shock this time is that it can no longer be ignored.

June 1st…today…ISM Manufacturing Report: PLUMMETS over 11% in one month and can no longer be ignored.

Additionally, there is news that China is slowing, the Australian housing bubble has found a pin, and as we all already know: Europe is a complete mess.

So why has the market ignored all of that horrible news above? The Federal Reserve Bank of the USA and Ben Bernanke. There is no need to worry if the Fed Chairman will backstop everything that ails the market…until it won’t. QE2 is ending and the market doesn’t like it. Therefore, like the petulant children that they are, the bankster class will scream, yell, and stomp their collective feet for QE3 (or whatever Ben decides to call it) until they get it.

Frankly, a very cynical person could even think that the Fed is now hoping for a market correction of at least 10%, because at that time even those that are now critical of QE2 will clamor for it. Congress will drop all pretense of cutting spending. Congress will boycott any notion of a real audit of the Federal Reserve.

…and the bankster cartel will be bailed out again in time for year-end bonuses.

Trade well and follow the trend, not the so-called “experts.”

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.

from

Trading Advantage

[BlackJack]

Naam

your thoughts on this-please

Want to know the simplest way to keep tabs on the Edwards "first deflation, then inflation" prediction? Keep an eye on bond yields.

Just this past week, the yield on the 10-Year U.S. Treasury fell below 3.0% for the first time this year. If that yield keeps falling (alongside falling stock prices), then deflationary slowdown fears are tightening their grip... and the Albert Edwards prediction may be coming true.

[RedFxTrade]

Spanish 10 Yr at inflection point, and yields at trend line resistance. A range in Spanish yields has been in place since last November between about 5.1%-5.6%...The attached chart shows we are at the trend line resistance. A move below support at 5% would give Spain some breathing room, although a move upwards and a break out of the range will spell trouble especially with articles like this in the FT. Yield are up on the day. Add to that all the assets on the banks book that have not been marked to market in the hope that the Spanish property market will recover. When a market forms into a tight range, it means there is a relative balance between buyers and sellers...however, the long a market stays in a relative state of equilibrium, it is akin to a hibernating bear that has awoke after a long sleep...when he wakes he is hungry. When this range is broken expect higher volatility. With the mass protests in Spain and the instability at government level, and the contracting economy it is hard to see yields breaking down below 5% in any sustained way...the fundamental back drop and bias is for a break to the up side in yields.

Bankrupt Claim heightens Spanish Debt Fears

The central Spanish region of Castilla-La Mancha is "totally bankrupt", according to the incoming administration of the rightwing Popular party (PP), an accusation that will deepen concerns about Spain's budget deficit.

The claim has prompted angry denials from the Socialist government.

Spain's 17 autonomous regions and its more than 8,000 municipalities, with €150bn ($220bn) of accumulated debt between them, have become the latest worry for investors in Spain and its sovereign bonds.

Although the amount is less than a quarter of total public sector debt, regional debt has doubled since 2008. The 17 regions collectively exceeded official budget deficit limits in 2010, and appear likely to do so again this year despite repeated demands for compliance from the central government.

Catalonia, an economy the size of Portugal, says its deficit will be double the target.

Vicente Tirado, a senior PP politician in Castilla-La Mancha, said the region was "totally bankrupt"; owed suppliers such as pharmaceutical companies that provide drugs for hospitals a total of €2bn in unpaid bills; and would have trouble finding the money to pay the region's 76,000 civil servants next month.

Marcial Marín, the PP's economy co-ordinator in the region, accused the departing Socialist government of "the height of irresponsibility" and alleged that unpaid bills were being destroyed to hide the evidence.

"From the data that the PP has, Castilla-La Mancha is the Greece of Spanish regions," he said, referring to the bail-out of the Greek economy by the European Union and the International Monetary Fund.

Mr Marín said the PP, which won the region from the Socialists in elections two weeks ago, would shut between half and three-quarters of Castilla-La Mancha's 95 government owned companies because they duplicated the work of other organisations and were staffed mostly by Socialist party members.

The departing Socialist administration described the PP's accusations as false and said PP leaders were scaremongering in order to prepare the way for cuts to public services.

At the national level, Socialist leaders have accused the PP of undermining Spain's credibility in financial markets for domestic political ends and have noted that several PP-run fiefdoms have also exceeded their deficit limits.

Official data show, however, that Socialist-run Castilla-La Mancha was the worst-performing region last year, recording a deficit of 6.5 per cent of gross domestic product, compared with the limit for that year of 2.4 per cent.

Spain was able to meet its overall public sector deficit target of 9.3 per cent of GDP in 2010 only because austerity at the centre compensated for regional overspending.

Two opinion polls published on Sunday, meanwhile, predicted that the PP, led by Mariano Rajoy, would win national elections with a 13.8 percentage point advantage over the Socialists, under their leader in waiting Alfredo Pérez Rubalcaba.

Mr Rubalcaba is the hitherto unchallenged party candidate to replace José Luis Rodríguez Zapatero, the prime minister. A national election must be held within a year but the PP wants an early poll.

Edited June 6, 2011 by RedFxTrade

[churchill]

World debt comparison

The global debt clock

Our interactive overview of government debt across the planet

http://www.economist.com/content/global_debt_clock

[RedFxTrade]

World debt comparison

The global debt clock

Our interactive overview of government debt across the planet

http://www.economist...obal_debt_clock

Thanks for this CH. I love those type of graphics. What is interesting is the public debt per person per country...For all the head lines in the US, the US as per debt per person is lower than Italy, Norway, France, Japan, ireland...and as a % of GDP is even lower than German, UK, Greece, France etc etc. In conclusion all paper currencies are not worth a dam_n.

Interestingly a few months a go I heard a Jim Rogers interview in Britain, and the interviewer said Britain is making cuts, and doing all the right things...but Rogers said he has heard it all before from politicians saying that stuff...from when he was at Oxford in the 1960's. He has been around for a while and must have seen a lot over the years. Basically the UK will not be able to make the cuts, as there will be a back lash or by the time the next election comes they will thrown out, and the new party will destroy the work done...

I have also heard the analogy that when public debt becomes so big that it becomes like a massive ship, that cannot be turned quickly to avoid the icebergs. From a UK perspective this is the case. Firstly the populace do not understand the difference between the deficit and the total debt. The total debt is growing, and will be much larger in 2014 than today. The "cuts" are not actually cuts. They are just going into debt slightly more slowly. The deficit in the Uk is about £160 billion a year, so if the Uk spends £140 billion this year, it is still increasing the debt. Real cuts are politically impossible with a debt load this size and all the promises that go with having a debt load of this size. The UK have already spent £40 billion over their target since the Tories came in...and Half Councils Have No deficit cut plan.

When you dig a little into any of these currencies they are all screwed. I would rather own the USD to be honest than GBP.

[churchill]

I agree I think GBP will have problems before the USD - But between Euro and USD I am not sure /

Thanks for your link on the Bitcoins Thread about Nigel Farage - He really speaks for so many people /

I thought Barroso was president - who is Rompuy - what has he done or said and has anyone taken any notice ?

Really they are only looking after their own pensions- Kinnock and all his family sipped champagne there for a few years - after leading the Labour Party and boring the country to death - Now Brown wants to jump on the Gravy train at the IMF !! / The Greeks will have to work much harder and pay more tax and take lower pensions to keep all these people on their guaranteed very nice pension plans/

[Naam]

RedFxTrade, on 2011-06-06 16:52:12, said:

When you dig a little into any of these currencies they are all screwed.

i tend to agree. nevertheless i'd like to own as much as possible of all screwed as well as "unscrewed" currencies

[craigt3365]

World debt comparison

The global debt clock

Our interactive overview of government debt across the planet

http://www.economist.com/content/global_debt_clock

Very interesting. I also thought the US was the worst of the bunch. But I guess that's not true? I will be interesting to see how this plays out.

[ronz28]

I agree I think GBP will have problems before the USD - But between Euro and USD I am not sure /

Thanks for your link on the Bitcoins Thread about Nigel Farage - He really speaks for so many people /

I thought Barroso was president - who is Rompuy - what has he done or said and has anyone taken any notice ?

Really they are only looking after their own pensions- Kinnock and all his family sipped champagne there for a few years - after leading the Labour Party and boring the country to death - Now Brown wants to jump on the Gravy train at the IMF !! / The Greeks will have to work much harder and pay more tax and take lower pensions to keep all these people on their guaranteed very nice pension plans/

Pay taxes, reasonable compensation???? That's for other people...

http://www.dailymail.co.uk/news/article-1394422/Saint-Bono-facing-huge-Glastonbury-protest--avoiding-tax.html

[flying]

World debt comparison

The global debt clock

Our interactive overview of government debt across the planet

http://www.economist.com/content/global_debt_clock

Thanks very interesting to play with.

When comparing countries likely or at least close to equal in capabilities.

Then looking at population numbers that debt is divided into

and clicking ahead in years from 2010-2012....rather sobering

[ronz28]

World debt comparison

The global debt clock

Our interactive overview of government debt across the planet

http://www.economist.com/content/global_debt_clock

Thanks very interesting to play with.

When comparing countries likely or at least close to equal in capabilities.

Then looking at population numbers that debt is divided into

and clicking ahead in years from 2010-2012....rather sobering

For the US, there are only about 140 million income taxpayers out of the 310+ million population. So, the interest paid on the debt per person is roughly double for the taxpayers who carry the load for the total population. Half of the people could care less how much the US borrows to bail out the banksters, pay for foreign wars and other irresponsible spending.

Some are rough and ready to reneg on pension payments, etc., add new user fees and other disguised taxes to push the can a little further down the road while keeping the effective taxes on the mega rich far below historic low levels. I guess everyone and all corporations should pay some income taxes to have skin in the game, even the designer of the Fukushima nuclear reactors, General Electric, who reportedly paid no income taxes this year.

[flying]

For the US, there are only about 140 million income taxpayers out of the 310+ million population. So, the interest paid on the debt per person is roughly double for the taxpayers who carry the load for the total population. Half of the people could care less how much the US borrows to bail out the banksters, pay for foreign wars and other irresponsible spending.

Some are rough and ready to reneg on pension payments, etc., add new user fees and other disguised taxes to push the can a little further down the road while keeping the effective taxes on the mega rich far below historic low levels. I guess everyone and all corporations should pay some income taxes to have skin in the game, even the designer of the Fukushima nuclear reactors, General Electric, who reportedly paid no income taxes this year.

Ain't that the truth about tax payers

As to the pensions.....you probably already know but the government is already borrowing from the federal workers pension.

They say it is just a loan to tie them over till the debt ceiling is raised yet again....And I am sure they will of course raise it.

But if I were a fed worker I would not be too pleased to know my pension was being tapped.

[midas]

For the US, there are only about 140 million income taxpayers out of the 310+ million population. So, the interest paid on the debt per person is roughly double for the taxpayers who carry the load for the total population. Half of the people could care less how much the US borrows to bail out the banksters, pay for foreign wars and other irresponsible spending.

Some are rough and ready to reneg on pension payments, etc., add new user fees and other disguised taxes to push the can a little further down the road while keeping the effective taxes on the mega rich far below historic low levels. I guess everyone and all corporations should pay some income taxes to have skin in the game, even the designer of the Fukushima nuclear reactors, General Electric, who reportedly paid no income taxes this year.

Ain't that the truth about tax payers

As to the pensions.....you probably already know but the government is already borrowing from the federal workers pension.

They say it is just a loan to tie them over till the debt ceiling is raised yet again....And I am sure they will of course raise it.

But if I were a fed worker I would not be too pleased to know my pension was being tapped.

Another government steals citizens pension money

" Pension funds are attractive targets for politicians who have wide eyes and the most carnal thoughts at the site of any large pool of cash.

Think it can’t happen where you live? Think again. Late last year, the French government went through an elaborate process to change its pension laws, ‘legally’ allowing politicians to steal retirement funds from the public in order to pay off other debts "

http://actionableintelligencealert.blogspot.com/2011/05/another-government-steals-citizens.html

Edited June 7, 2011 by midas

[lannarebirth]

Will Greece let EU Central Bankers Destroy Democracy?

[/url]By Michael Hudson

The Greek bailout provides an opportunity for privatization grabs

When Greece exchanged its drachma for the euro in 2000, most voters were all for joining the Eurozone. The hope was that it would ensure stability, and that this would promote rising wages and living standards. Few saw that the stumbling point was tax policy. Greece was excluded from the eurozone the previous year as a result of failing to meet the 1992 Maastricht criteria for EU membership, limiting budget deficits to 3 percent of GDP, and government debt to 60 percent.

The euro also had other serious fiscal and monetary problems at the outset. There is little thought of wealthier EU economies helping bring less productive ones up to par, e.g. as the United States does with its depressed areas (as in the rescue of the auto industry in 2010) or when the federal government does declares a state of emergency for floods, tornados or other disruptions. As with the United States and indeed nearly all countries, EU “aid” is largely self-serving – a combination of export promotion and bailouts for debtor economies to pay banks in Europe’s main creditor nations: Germany, France and the Netherlands. The EU charter banned the European Central Bank (ECB) from financing government deficits, and prevents (indeed, “saves”) members from having to pay for the “fiscal irresponsibility” of countries running budget deficits. This “hard” tax policy was the price that lower-income countries had to sign onto when they joined the European Union.

Also unlike the United States (or almost any nation), Europe’s parliament was merely ceremonial. It had no power to set and administer EU-wide taxes. Politically, the continent remains a loose federation. Every member is expected to pay its own way. The central bank does not monetize deficits, and there is minimal federal sharing with member states. Public spending deficits – even for capital investment in infrastructure – must be financed by running into debt, at rising interest rates as countries running deficits become more risky.

This means that spending on transportation, power and other basic infrastructure that was publicly financed in North America and the leading European economies (providing services at subsidized rates) must be privatized. Prices for these services must be set high enough to cover interest and other financing charges, high salaries and bonuses, and be run for profit – indeed, for rent extraction as public regulatory authority is disabled.

Continued here:

http://neweconomicperspectives.blogspot.com/2011/06/will-greece-let-eu-central-bankers.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomicPerspectivesFromKansasCity+%28Economic+Perspectives+from+Kansas+City%29

[Wrong Turn]

anyone ready for QE3 4 5

its like digging a hole whilst standing in it

this thread will be going on long enough to see QE4 i think

Some of the main causes for this crisis was decades of bad policies, too-low interest rates and over-leveraging.

So, what does the American government do?

Keep interest rates historically low and borrow (QE1 & QE2).

The gov somehow thinks this does not apply to them....

[flying]

The Next Financial Crisis Will Be Hellish And It’s On Its Way

“There is definitely going to be another financial crisis around the corner,” says hedge fund legend Mark Mobius, “because we haven’t solved any of the things that caused the previous crisis.”

We’re raising our alert status for the next financial crisis. We already raised it last week after spreads on U.S. credit default swaps started blowing out. We raised it again after seeing the remarks of Mr. Mobius, chief of the $50 billion emerging markets desk at Templeton Asset Management.

Speaking in Tokyo, he pointed to derivatives, the financial hairball of futures, options, and swaps in which nearly all the world’s major banks are tangled up.

Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius’ guess of 10 times the world’s annual GDP. “Are the derivatives regulated?” asks Mobius. “No. Are you still getting growth in derivatives? Yes.”

In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08.

What could it be? We’ll offer up a good guess, one the market is discounting.

Seldom does a stock index rise so much, for so little reason, as the Dow did on the open Tuesday morning: 115 Dow points on a rumor that Greece is going to get a second bailout.

Let’s step back for a moment: The Greek crisis is first and foremost about the German and French banks that were foolish enough to lend money to Greece in the first place. What sort of derivative contracts tied to Greek debt are they sitting on? What worldwide mayhem would ensue if Greece didn’t pay back 100 centimes on the euro?

That’s a rhetorical question, since the balance sheets of European banks are even more opaque than American ones. Whatever the actual answer, it’s scary enough that the European Central Bank has refused to entertain any talk about the holders of Greek sovereign debt taking a haircut, even in the form of Greece stretching out its payments.

That was the preferred solution among German leaders. But it seems the ECB is about to get its way. Greece will likely get another bailout – 30 billion euros on top of the 110 billion euro bailout it got a year ago.

It will accomplish nothing. Going deeper into hock is never a good way to get out of debt. And at some point, this exercise in kicking the can has to stop. When it does, you get your next financial crisis.

And what of the derivatives sitting on the balance sheet of the Federal Reserve? Here’s another factor behind our heightened state of alert.

“Through quantitative easing efforts alone,” says Euro Pacific Capital’s Michael Pento, “Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS).”

Think about that for a moment. The Fed’s entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets.

“As the size of the Fed’s balance sheet ballooned,” continues Mr. Pento, “the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet.

“Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out.”

[flying]

Interesting thoughts.......

Paul Farrell Explains Why America Needs An "Evil Plan" In Advance Of The Next Revolution

[RedFxTrade]

Guys I know this is a bit of topic but some advice would be appreciated...Right, I m in the UK right now. Now my plan is to spend more than 9 months outside the UK a year, probably more, with a large part in Thailand, and some other travel, as an example Naam, going to Beijing with a spreadsheet to count vacancy rates in condos to report back to this forum ..all joking aside...I have a a broker account that is not based in the UK, but the US and Singapore. However, the account is linked to a Nationwide UK Bank account, and transfers are done this way. So from a tax perspective, if I m outside the UK more than nine months I will not pay tax. So I m reasoning that I can transfer money from my broker account as needed to my Uk bank account, and then transfer the money from that account through an international chaps to a Thai bank account...so I do not need to pay any tax? I cannot see how I would have to., I m not working in Thailand, not living in the UK? This is all feasible? Thanks