Financial Crisis

[kblaze]

Washable kids chalk is not the same as graffiti. It rains and its gone; so its the same as holding up a sign ie its an impermanent form of message sharing / protest, or even no so bad as a sign since the bank has option to wash it away but they cant turn the water on the man with a sign. Also Its s public space and so if the bank wanted to spend money not waiting for the rain to wash it away because they don't like the messages then that's their problem surely- the city didn't feel the need to do it. Just looks like plain bank sponsored intimidation.

Public spaces are not open for private vendettas. Otherwise all pavements would be scribbled on by your mates with their stupid messages.

I'd say a message on the pavement is preferential to a man with a sign getting in the way of pedestrians and pushing leaflets at people. Or would you prefer to just ban all rights free speech and peaceful protest?

Get off the pavement. Go and sit with the others just inside the tube station entrance. And here's a couple of bob for your troubles.

[mccw]

""""

Inside Anglo: the secret recordings

June 24, 2013

TAPE RECORDINGS from inside doomed Anglo Irish Bank reveal for the first time how the bank's top executives lied to the Government about the true extent of losses at the institution.

The astonishing tapes show senior manager John Bowe, who had been involved in negotiations with the Central Bank, laughing and joking as he tells another senior manager, Peter Fitzgerald, how Anglo was luring the State into giving it billions of euro.

The audio recordings are from the bank's own internal telephone system and date from the heart of the financial crisis that brought the State to its knees in September 2008.

Anglo itself was within days of complete meltdown – and in the years ahead would eat up €30bn of taxpayer money. Mr Bowe speaks about how the State had been asked for €7bn to bail out Anglo – but Anglo's negotiators knew all along this was not enough to save the bank.

The plan was that once the State began the flow of money, it would be unable to stop.

Mr Bowe is asked by Mr Fitzgerald how they had come up with the figure of €7bn. He laughs as he is taped saying: "Just, as Drummer (then-CEO David Drumm) would say, 'picked it out of my arse'."

He also says: "If they (Central Bank) saw the enormity of it up front, they might decide they have a choice. You know what I mean?

"They might say the cost to the taxpayer is too high . . . if it doesn't look too big at the outset . . . if it looks big, big enough to be important, but not too big that it kind of spoils everything, then, then I think you have a chance. So I think it can creep up."

Mr Fitzgerald, the Director of Retail Banking, is heard saying: "Yeah. They've got skin in the game and that is the key."

Mr Bowe's comments in the audio recording reveal that Anglo's strategy was to lure the State in, leaving taxpayers with no choice but to continue to provide loans to "support their money".

The recording also shows Mr Bowe and Mr Fitzgerald laughing as they say how there is no realistic chance of ever repaying the loans.

""""

[midas]

"""Jeff Olson, the 40-year-old man who is being prosecuted for scrawling anti-megabank messages on sidewalks in water-soluble chalk last year now faces a 13-year jail sentence. A judge has barred his attorney from mentioning freedom of speech during trial.

According to the San Diego Reader, which reported on Tuesday that a judge had opted to prevent Olsons attorney from "mentioning the First Amendment, free speech, free expression, public forum, expressive conduct, or political speech during the trial, Olson must now stand trial for on 13 counts of vandalism.

In addition to possibly spending years in jail, Olson will also be held liable for fines of up to $13,000 over the anti-big-bank slogans that were left using washable children's chalk on a sidewalk outside of three San Diego, California branches of Bank of America, the massive conglomerate that received $45 billion in interest-free loans from the US government in 2008-2009 in a bid to keep it solvent after bad bets went south. """

-rt

Many stories like this. Are they for real? America has really become a banana republic like this?

Searching for stuff in the dumpster now. Anyway, about my pet goldfish.......

Do you think thier stories are fictitious? Russian propaganda to make America look bad or they just choose real events that the mainstream western media choose not to look at?

I share your outrage about this case and this line reminded me of the reality of the situation now.

“My guess is the trend has a lot to do with the private prison system in the country, which means higher levels of incarceration equals higher profits. I think it also has to do with a troubling move toward criminalizing speech and an attack on the First Amendment generally. ”

Texas Teen Faces 8 Years in Jail for an Insensitive Joke on Facebook

http://libertyblitzkrieg.com/2013/06/28/texas-teen-faces-8-years-in-jail-for-an-insensitive-joke-on-facebook/#more-6542

Edited June 29, 2013 by midas

[yoshiwara]

I share your outrage about this case and this line reminded me of the reality of the situation now.

You eat, sleep and breath outrage. It comes out of your pores.

[chiang mai]

In my search for a summary of "where we are" and "what happenes next", I came across the attached from Tullet Prebon in the UK, some may find it interesting.

SIN20130510.pdf

[mccw]

Interesting especially are the numbers at the end:

"""""

China's ICBC Bank Now Bigger Than US Giants

Last Updated 22:36 01/07/2013

A Chinese bank has been ranked as the world's largest, overtaking two American finance giants.

Industrial and Commercial Bank of China (ICBC) leapfrogged the US banks to top the global ranking of banks with the most capital.

The shock ranking has highlighted the growing size and importance of Chinese lenders.

ICBC topped The Banker magazine's annual list of the top 1,000 banks for the first time.

The magazine relegated the Bank of America to third from first, while JPMorgan Chase remained in second slot.

China's ICBC was ranked third last year by the magazine, which is owned by the Financial Times.

The rankings are based on Tier 1 capital as a measure of a bank's ability to lend on a large scale and endure shocks.

ICBC has for some time ranked as the top bank by market value.

Britain's HSBC, which gains much of its earnings from Asia, was fourth in The Banker's list, with China Construction Bank (CCB) ranked fifth.

China had four banks in the top 10 and 96 in the Top 1,000.

Its top four lenders - ICBC, CCB, Bank of China and Agricultural Bank of China - filled the top positions for profit in 2012.

ICBC's $49bn (£32bn) profit put it top of the profit table for a third successive year.

Total profit for the biggest 1,000 banks is now back close to levels achieved before the 2007/09 financial crisis, but the regional share has shifted significantly,

The Banker said that in 2006 European banks accounted for 46% of global profits and 58% of assets, but last year that had dropped to less than 2% of profits and 43% of assets.

Asia's banks have lifted their share of profits to 56% from 19% in the same time and increased their share of assets to 35% from 22%.

Spain's Bankia posted the biggest loss last year at £21bn , with six of the 10 biggest losses coming from Spain, the magazine estimated.

""""

-sky news app

[lannarebirth]

Interesting especially are the numbers at the end:

"""""

China's ICBC Bank Now Bigger Than US Giants

Last Updated 22:36 01/07/2013

A Chinese bank has been ranked as the world's largest, overtaking two American finance giants.

Industrial and Commercial Bank of China (ICBC) leapfrogged the US banks to top the global ranking of banks with the most capital.

The shock ranking has highlighted the growing size and importance of Chinese lenders.

ICBC topped The Banker magazine's annual list of the top 1,000 banks for the first time.

The magazine relegated the Bank of America to third from first, while JPMorgan Chase remained in second slot.

China's ICBC was ranked third last year by the magazine, which is owned by the Financial Times.

The rankings are based on Tier 1 capital as a measure of a bank's ability to lend on a large scale and endure shocks.

ICBC has for some time ranked as the top bank by market value.

Britain's HSBC, which gains much of its earnings from Asia, was fourth in The Banker's list, with China Construction Bank (CCB) ranked fifth.

China had four banks in the top 10 and 96 in the Top 1,000.

Its top four lenders - ICBC, CCB, Bank of China and Agricultural Bank of China - filled the top positions for profit in 2012.

ICBC's $49bn (£32bn) profit put it top of the profit table for a third successive year.

Total profit for the biggest 1,000 banks is now back close to levels achieved before the 2007/09 financial crisis, but the regional share has shifted significantly,

The Banker said that in 2006 European banks accounted for 46% of global profits and 58% of assets, but last year that had dropped to less than 2% of profits and 43% of assets.

Asia's banks have lifted their share of profits to 56% from 19% in the same time and increased their share of assets to 35% from 22%.

Spain's Bankia posted the biggest loss last year at £21bn , with six of the 10 biggest losses coming from Spain, the magazine estimated.

""""

-sky news app

I don't know it for a fact, but I'll bet a Japanese bank could have made the same claim at one time. Maybe this is the sign everyone's been looking for.

[mccw]

The Europe banks fall to only 2% profitability was what jumped out at me. Media wise and Euro value wise its like Europe has not too much of a problem but by that set of figures its a starkly different story to the surface polish. Big problems not even begun to be dealt with. Contrast to America.

[churchill]

Banks can value assets at what they think .... What is the true value of any asset when it needs to be sold .

[mccw]

"""

The ratings agency says it considers Cyprus has technically 'defaulted' after the country announced a delay in paying back bonds worth 1 billion euros.

The downgrade, although Moody's doesn't technically have a default rating, was issued after Cyprus said it would delay the bonds and go ahead with a bond swap default strategy.

Cypriot authorities said they will swap government bonds maturing in 2013 through to the first quarter of 2016 with new debt that matures at between five and 10 years.

The bond swap is a distressed exchange, and therefore, a debt default. Because the amount exchanged is less than the original deal, and Cyprus is allowed to avoid payment on the bonds.

Cyprus' biggest banks are the largest holders of Greek bonds, which became bad and distressed following the Greece financial crisis, which left Cypriot banks with big debts.

67 percent of outstanding amounts were subject to the swap.

Moody's said the exchange of Cyprus government bonds for new ones with a longer maturity level means the financial commitment of Cyprus to the holders of the bonds will decline.

Moodys statement on Monday came after Standard & Poors downgraded Cyprus to selective default and Fitch downgraded the rating to restricted default because of the debt exchange.

""

-rt app

[mccw]

Banks can value assets at what they think .... What is the true value of any asset when it needs to be sold .

I thought there is a market for the assets they hold and therefor these capital values and ratios are worked out by comparing market values of the day. A bank for example couldn't say we have 10bl Greek sovereign debt asset but its real market value is only 1bl. The auditors, authorities, credit ratings agencies or who ever wouldn't accept it. But to some extent you are right in that if a bank or number of banks hold so much of any one asset that buy their very holding it creates the price stability or inflation then yes the value is kinda what they want it to be and if they all had to sell at once the prices would be very different. This is example of the debt and bonds price bubble of which we are in right now I think.

[midas]

Banks can value assets at what they think .... What is the true value of any asset when it needs to be sold .

I thought there is a market for the assets they hold and therefor these capital values and ratios are worked out by comparing market values of the day. A bank for example couldn't say we have 10bl Greek sovereign debt asset but its real market value is only 1bl. The auditors, authorities, credit ratings agencies or who ever wouldn't accept it. But to some extent you are right in that if a bank or number of banks hold so much of any one asset that buy their very holding it creates the price stability or inflation then yes the value is kinda what they want it to be and if they all had to sell at once the prices would be very different. This is example of the debt and bonds price bubble of which we are in right now I think.

Maybe you never heard of “ Mark To Fantasy “ ?

Here comes Mark To Fantasy Accounting!

Suppose a bank buys an asset which cost US$1 B a year ago and the price of similar/same asset goesdown to US$100M currently. In fair value accounting using mark to market principle, the asset bought at US$ 1B should be priced at US$ 100M in the books. This means that this bank has suffered a US$ 900M paper loss and the balance sheet, profit and loss statement must reflect it as such.

But in allowing banks to escape from this mark to market rule, banks can price toxic assets at whatever. How then can you trust their financial statements? How then do you assess whether they are adequately capitalize or otherwise?

https://socioecohistory.wordpress.com/2009/04/03/fasb-here-comes-mark-to-fantasy-accounting/

Edited July 3, 2013 by midas

[midas]

. The auditors, authorities, credit ratings agencies or who ever wouldn't accept it.

As for your comments regarding the auditors/ accountants -they have no more credibility than a used car salesman

One of the “Big Four” accountants’ more startling admissions was that they thought it was perfectly acceptable to dupe investors about banking clients’ solvency (via what with the benefit of hindsight were wholly misleading “going concern” statements), after a quiet ‘fireside chat’ with the British government about the possibility of future bailouts. If the admissions made by these auditors to the House of Lords committee prove anything, it is that the “big four” accountancy firms have now lost all credibility. By their behaviour ahead of the crisis, it’s clear they were more interested in self-preservation and giving what were transparently insolvent institutions a veneer of solvency than in conveying timely, accurate and reliable information to the markets.

http://www.ianfraser.org/connolly-i-do-believe-that-auditors-performed-well/

Edited July 3, 2013 by midas

[mccw]

Wow

[mccw]

Portugal's financial crisis has reignited, triggering a stock market plunge and once again raising the spectre that its borrowing costs could soon become unsustainable.

Share prices plummeted 6% in early trading on Wednesday and other major stock markets, including the FTSE 100, also fell sharply.

Investors were reacting to growing political turmoil after Foreign Minister Paulo Portas resigned on Tuesday night, a day after the shock departure of Finance Minister Vitor Gaspar amid growing unrest against austerity.

Prime Minister Pedro Passos Coelho has defied calls to follow suit but the resignations at the top of the centre-right government have left deep concerns over not only the coalition's future but Portugal's ability to pursue the steep savings, demanded by creditors, in return for continued bailout support.

There has been a fierce public backlash against the austerity drive, in what is one of the poorest countries that uses the euro.

But unease among investors about whether that tough savings programme will continue has forced up the country's borrowing costs too on bond markets.

The yield - the percentage Portugal pays to service its debts - on the country's benchmark 10-year bond spiked just below 8% on Wednesday.

A 10-year borrowing rate of about 8% is widely considered unsustainable.

Spanish and Italian yields jumped too while nervousness over the state of Greece's next tranche of bailout money also caused jitters on stock markets as well.

"With disorder and uncertainty over the political situation in Egypt threatening stability in the Middle East, and a Greek deadline looming to prove it can action its bailout conditions before receiving the next tranche of aid, volatility is likely to be high," Mark Ward, head of trading at Sanlam Securities, said.

The President of the European Commission, Jose Manuel Barroso admitted the situation in Portugal was a worry.

He said: "The initial reaction of the markets shows the obvious risk that the financial credibility recently built up by Portugal could be jeopardised by the current political instability.

"If this happens it would be especially damaging for the Portuguese people, particularly as there were already preliminary signs of economic recovery.

This delicate situation requires a great sense of responsibility from all political forces and leaders. The situation should be clarified as soon as possible."

He concluded: "We trust that Portuguese democracy will deliver a solution ensuring that the sacrifices the Portuguese people have made until now will not have been in vain."

It later emerged that Portugal's president would meet the prime minister and leaders of political parties on Thursday in a bid to settle the uncertainty.

President Anibal Cavaco Silva has the power to call snap elections.

"""""

-sky news app

[NeverSure]

Interesting especially are the numbers at the end:

"""""

China's ICBC Bank Now Bigger Than US Giants

Last Updated 22:36 01/07/2013

A Chinese bank has been ranked as the world's largest, overtaking two American finance giants.

Industrial and Commercial Bank of China (ICBC) leapfrogged the US banks to top the global ranking of banks with the most capital.

The shock ranking has highlighted the growing size and importance of Chinese lenders.

ICBC topped The Banker magazine's annual list of the top 1,000 banks for the first time.

The magazine relegated the Bank of America to third from first, while JPMorgan Chase remained in second slot.

China's ICBC was ranked third last year by the magazine, which is owned by the Financial Times.

The rankings are based on Tier 1 capital as a measure of a bank's ability to lend on a large scale and endure shocks.

ICBC has for some time ranked as the top bank by market value.

Britain's HSBC, which gains much of its earnings from Asia, was fourth in The Banker's list, with China Construction Bank (CCB) ranked fifth.

China had four banks in the top 10 and 96 in the Top 1,000.

Its top four lenders - ICBC, CCB, Bank of China and Agricultural Bank of China - filled the top positions for profit in 2012.

ICBC's $49bn (£32bn) profit put it top of the profit table for a third successive year.

Total profit for the biggest 1,000 banks is now back close to levels achieved before the 2007/09 financial crisis, but the regional share has shifted significantly,

The Banker said that in 2006 European banks accounted for 46% of global profits and 58% of assets, but last year that had dropped to less than 2% of profits and 43% of assets.

Asia's banks have lifted their share of profits to 56% from 19% in the same time and increased their share of assets to 35% from 22%.

Spain's Bankia posted the biggest loss last year at £21bn , with six of the 10 biggest losses coming from Spain, the magazine estimated.

""""

-sky news app

China's big, big banking problems.

[cheeryble]

To those who surprise me by saying nothing has changed......

Osborne to support sweeping bank reforms:

The UK chancellor will endorse the overwhelming majority of proposals from a cross-party banking commission, including introducing criminal penalties for "reckless" bankers and tighter control of pay and bonuses, in his formal response to be published today. Key proposals from the Tyrie commission will be added to the banking reform bill in the Commons and when it passes to the House of Lords include the new "reckless misconduct" offence; stronger boards; requiring bank chairmen to work full-time; easier clawback rules and bonus deferrals of up to 10 years.

(Financial Times)

[cheeryble]

To those who surprise me by saying nothing has changed......

Osborne to support sweeping bank reforms:

The UK chancellor will endorse the overwhelming majority of proposals from a cross-party banking commission, including introducing criminal penalties for "reckless" bankers and tighter control of pay and bonuses, in his formal response to be published today. Key proposals from the Tyrie commission will be added to the banking reform bill in the Commons and when it passes to the House of Lords include the new "reckless misconduct" offence; stronger boards; requiring bank chairmen to work full-time; easier clawback rules and bonus deferrals of up to 10 years.

(Financial Times)s

[cheeryble]

On the negative side:

(Reuters) - In a rare show of bipartisanship, the U.S. House Financial Services Committee unanimously approved a bill on Wednesday that would prohibit mandatory rotation of auditors among companies to avoid fraud and financial misconduct.

http://www.reuters.com/article/2013/06/19/us-house-sec-bills-idUSBRE95I1NS20130619

Or was it just impractical?

Edited July 9, 2013 by cheeryble

[cheeryble]

US deficit expected to shrink to $759bn

America’s yawning budget deficit of more than $1tn is expected to fall by more than a fifth this fiscal year as the US’s outlook continues to strengthen

http://link.ft.com/r/6NPSBB/MJ0YPV/UUMQUQ/06BAX8/T1DZ74/MQ/h?a1=2013&a2=7&a3=8

Cheeryble:

THis would naturally come down further with bigger income from a regrowing economy.

Hopefully until it is sustainable which I believe is at $400B

[midas]

On the negative side:

(Reuters) - In a rare show of bipartisanship, the U.S. House Financial Services Committee unanimously approved a bill on Wednesday that would prohibit mandatory rotation of auditors among companies to avoid fraud and financial misconduct.

http://www.reuters.com/article/2013/06/19/us-house-sec-bills-idUSBRE95I1NS20130619

Or was it just impractical?

Do you believe in the tooth fairy as well?

[yoshiwara]

On the negative side:

(Reuters) - In a rare show of bipartisanship, the U.S. House Financial Services Committee unanimously approved a bill on Wednesday that would prohibit mandatory rotation of auditors among companies to avoid fraud and financial misconduct.

http://www.reuters.com/article/2013/06/19/us-house-sec-bills-idUSBRE95I1NS20130619

Or was it just impractical?

Do you believe in the tooth fairy as well?

No. We believe in the Gold Tooth Fairy with 25% of their teeth knocked out.

[mccw]

1) how is 400 billion a year, on top of the however many trillion already accumulated, considered to be sustainable? Especially if there were an end to QE and a rise of interest rates; surely even at today's level its totally unsustainable and only just afforded by that printing/ own debt support/ manipulation.

2) the talk of London implementing the proposals is just talk for now and I think it highly unlikely to come through in any mean full legisaltion; I'd wager there will never be any convictions for being a reckless banker. What constitutes "reckless" hasn't even been defined. Many existing laws have been broken already but no arrests have been made either side of the pond. The whole exercise is just a diversion to the make it appear the criminality currently taking place has not been legislated for.

[mccw]

""The IMF lowered its 2013 global GDP growth forecast to 3.1% from 3.3%.

2013 U.S. GDP growth estimates were revised down to 1.7% from 1.9%.

The IMF expects euro area GDP to contract 0.6% in 2013, downgraded from the previous estimate of a 0.3% contraction.

2014 global growth forecasts were revised down to 3.8% from 4.0%, while 2014 U.S. growth was revised down to 2.7% from 3.0%, and euro area growth was revised down to 0.9% from 1.1%."""

- biz insider app.

Funny how these reports always say- next year its come back to growth , or the year after that. But it keeps pushing out in reality. Where do they expect this majic growth in Europe to come from when every other market is contracting?

[NeverSure]

1) how is 400 billion a year, on top of the however many trillion already accumulated, considered to be sustainable? Especially if there were an end to QE and a rise of interest rates; surely even at today's level its totally unsustainable and only just afforded by that printing/ own debt support/ manipulation.

The US has the world's most diversified and technologically advanced economy. It is also huge, containing many available natural resources.

I have posted over and over, with links, that the US has more oil than all of the rest of the world combined and is increasing its oil production by 20% this year. By 2017 it will be oil independent and after that a net exporter. It is possible that the US actually has 3x as much oil as all of the rest of the world combined because the announced figures don't account for the 88,000 miles of salt water shoreline where there is known to be oil, nor does it include Alaska where there is known to be oil.

Almost all of this oil belongs to the US government. The US government owns 40% of all of the land from the Rocky Mountains West, 80% of the state of Utah, and a significant part of the rest of the country including Alaska. It also owns all of the off shore oil.

By the end of this decade the US will pass Saudi Arabia as the world's #1 producer of oil.

The US has vast mineral resources. It has 100 years worth of natural gas already drilled and tapped. It has huge tracts of timber.

Look around your room and in your pockets. Almost everything technological was invented in the US and US corporations profit from it.

Before you talk only about someone's debts, talk also about his assets and then comment on his balance sheet and his net worth.

My money is on the US.

[ajarnpot]

Does this post refer to the upcoming financial crisis?

[yoshiwara]

Does this post refer to the upcoming financial crisis?

The reference to financial crisis normally refers to the fallout from the events of 2007-2009. Argument revolves around issues of potential recovery versus relapse. The conceit of the contribution re natural resources is that it assumes the holding of such trumps financial crisis considerations, which it doesn't.

[NeverSure]

Does this post refer to the upcoming financial crisis?

The reference to financial crisis normally refers to the fallout from the events of 2007-2009. Argument revolves around issues of potential recovery versus relapse. The conceit of the contribution re natural resources is that it assumes the holding of such trumps financial crisis considerations, which it doesn't.

Who said it had to do with 2007-2009? I think the Eurozone's is still coming. Same for the UK. The US has crashed and has a chance to claw back. The Eurozone won't accept its crash, pick itself up and start over.

Forget natural resources if you don't want to consider that kind of wealth. US companies are making lots of money from technology. I'm referring first to personal technology - that which is in your pocket, on your desk and so on. I mean everything from the internet to huge websites like Google to all operating systems, most software, wireless, Intel, routers, cell phones and smartphones -

The Eurozone has nothing like that to fall back on. With the exception of Germany they are manufacturing things for other people just as China is. They are also suffering from immigration which comes with entitlements.

Let's just sit back and watch and see who has the strongest economic engine.

[chiang mai]

I cry foul, this crisis started some six years ago in the US with sub-prime and US banks that were overstreched/insolvent, subequently the effect of that has rippled out around the planet and is now hitting China as a consequence. The US has had that many years to regroup and is now possibly, I'll say that again, possibly, in the early stages of recovery, it's wholly unfair to expect all the other countries on the planet to adhere to a similar timeline or to compare relative economic strengths on the basis of where the US might be currently.

[cheeryble]

More for those who think nothing has changed:

ETFs close in record numbers despite boom

Moves by regulators to crack down on more esoteric fund structures to protect investors have resulted in a decline in new funding

http://link.ft.com/r/ZE9K33/XBKL5U/8ARBAB/Z8HZ2M/20FQ34/OS/h?a1=2013&a2=7&a3=9