The Obama administration’s plan for reining in derivatives leaves
unchecked one of Wall Street’s dirty little secrets: the ability of a
derivatives dealer to redeploy cash collateral that gets posted by one
of its trading partners.
On Wall Street, this practice of taking collateral and reusing it is
called rehypothecation. In essence, it’s a form of free money for
derivatives dealers to use as they please — even to repost it as
collateral to finance their parent company’s own borrowings.
U.S. banking regulators partially retreated from a much-criticized
proposal to impose new rules on private equity investment in troubled
banks, aiming to encourage responsible investment in distressed banks.
The 4-1 vote by the Federal Deposit Insurance Corp board was a
partial victory for potential investors and some regulators who had
warned that an initial proposal unveiled in July threatened to scare
away much-needed capital.
The real US unemployment rate is 16 percent if persons who have dropped out of the labor pool and those working less than they would like are counted, a Federal Reserve official said Wednesday.
Lockhart pointed out in a speech to a chamber of commerce in Chattanooga, Tennessee that those two categories of people are not taken into account in the Labor Department's monthly report on the unemployment rate. The official July jobless rate was 9.4 percent.
Lockhart, who heads the Atlanta, Georgia, division of the Fed, is the first central bank official to acknowledge the depth of unemployment amid the worst US recession since the Great Depression.
"If one considers the people who would like a job but have stopped looking -- so-called discouraged workers -- and those who are working fewer hours than they want, the unemployment rate would move from the official 9.4 percent to 16 percent, said Atlanta Fed chief Dennis Lockhart.
A recent analysis of the 2007 financial markets of 48
countries has revealed that the world's finances are in the hands of
just a few mutual funds, banks, and corporations. This is the first
clear picture of the global concentration of financial power, and point
out the worldwide financial system's vulnerability as it stood on the
brink of the current economic crisis.
The Obama administration on Tuesday acknowledged that Obamanomics, the dismal science of spending other people's money as fast as possible, honed with ward bosses and union kingpins on Chicago's South Side, has failed.
They did so, not in so many words and probably without knowing it, while hammering Americans with a devastating and demoralizing one-two blow -- one a sucker punch, the other below the belt.
With the sycophants in the Obama press corps distracted while rubbing elbows with the Obamas and other rich folk on the Vineyard, the O Team threw their sucker punch: officially announcing that the federal budget deficit next year will be nearly 20% more than in their first forecast made just last May, and over the next ten years will be two trillion dollars more than they had predicted.
That's two million million dollars more than Obama had forecast. Just 90 days ago.
Even ballpark hunches should be closer than that.
Obama's estimate of the te
There is this paralyzing fear that the next Great Depression is knocking at the door. For politicians to open the door to free-market anarchism is just as bad as a foot inside the door for Obama’s ideological economics.
Four more banks went into Federal Deposit Insurance Corp. receivership on Friday, bringing to 81 the total of FDIC actions in 2009. Including FDIC bank closings in 2008, the total for the current financial crisis is now 104. Assets of these 104 banks totaled $146.7 billion. How does this compare with other crises in recent history?
The worst banking crisis since the Great Depressionwas, until 2008, the savings and loan crisis that spanned 10 years from the 1980s into the 1990s. Total assets involved in that crisis were $519 billion. Adjusting for inflation, using the consumer price index, that is $923 billion in 2009 dollars. That dwarfs the current size of bank failures under the FDIC program in this crisis.
A funny thing has started happening to Paul since his long-shot
presidential campaign ended quietly in the summer of 2008. More
Republicans have started listening to him. There are the media requests
from Fox Business Channel and talk radio, where he’s given airtime to
inveigh on sound money and macroeconomics. There is HR 1207
, the Federal Reserve Transparency Act of 2009, a bill that would
launch an audit of the Federal Reserve System, and which has attracted
112 co-sponsors. When Paul introduced the Federal Reserve Board Abolition Act just two years ago, no other members of Congress signed on.
And then there are the luncheons. The off-the-record talks have
brought in speakers such as ex-CIA counterterrorism expert Michael
Scheuer, libertarian investigative reporter James Bovard, iconoclastic
terrorism scholar Robert Pape, and George Washington University law
professor Jonathan Turley. Perhaps the most influential guest has been Thomas Woods,
In an interview with AM 1280 on Saturday, Rep. Michele Bachmann announced that she will have Rep. Ron Paul as her guest for a September town hall forum in St. Cloud.
“I’ll be doing another town hall up in the St. Cloud area in
September and we’ll do that on monetary policy. Ron Paul is going to
come in and we are going to host something on monetary policy,”
Bachmann is a convert to the Ron Paul movement, sometimes attending the congressman’s weekly lunches.
“I especially want to speak to the 19- to 20-year olds so they can
know what there future will be under this level of debt accumulation
and spending,” she added about the forum. “They need to know their
future. And so I’m bringing him in so we can have a discussion on
If you're living on the streets, engaging in the biological necessities of life -- like sitting, sleeping, lying down or loitering -- will get you in jail.
It's too bad so many people are falling into poverty at a time when it’s almost illegal to be poor. You won’t be arrested for shopping in a Dollar Store, but if you are truly, deeply, in-the-streets poor, you’re well advised not to engage in any of the biological necessities of life — like sitting, sleeping, lying down or loitering. City officials boast that there is nothing discriminatory about the ordinances that afflict the destitute, most of which go back to the dawn of gentrification in the ’80s and ’90s. “If you’re lying on a sidewalk, whether you’re homeless or a millionaire, you’re in violation of the ordinance,” a city attorney in St. Petersburg, Fla., said in June, echoing Anatole France’s immortal observation that “the law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges.”
All this goes to show is how completely the people in charge of things in the USA have lost their minds. They seem to think this mass exercise in pretend will resurrect the great march to the WalMarts, to the new car showrooms, and the cul-de-sac model houses, reignite another round of furious sprawl-building, salad-shooter importing, and no-doc liar-lending, not to mention the pawning off of innovative, securitized stinking-carp debt paper onto credulous pension funds in foreign lands where due diligence has never been heard of, renew the leveraged buying-out of zippy-looking businesses by smoothies who have no idea how to run them (and no real intention of doing it, anyway), resuscitate the construction of additional strip malls, new office park "capacity" and Big Box "power centers," restart the trade in granite countertops and home theaters, and pack the turnstiles of Walt Disney world - all this while turning Afghanistan into a neighborhood that Beaver Cleaver
One thing everyone agrees on is that the final [healthcare] bill needs to be read and understood by all legislators before a vote is taken. To any American, this is common sense. In Washington, that is unlikely to happen.
Susan Trimbath an expert? Give me a break. She forgot to mention that CMKX was revoked and now insiders being sued by the SEC for securities fraud. Naked shorting had nothing to do with it. And her credentials...certified liar
Steven Strongin, Goldman's stock research chief, as saying these
meetings did not give anyone an unfair advantage and the tips did not
contradict research notes that carry predictions over a longer term.
analysts talk about short-term developments around specific stocks
during the meeting, called a "trading huddle," which is also attended
by some of the firm's own traders, the Journal reported.
The practice started some two years ago, and since then the Wall Street firm has given ideas on hundreds of stocks
News Link •
WSJ features a page 2 column today that has this doozy of a point in it:
For the administration, the answer is clear: Err on the side of continued expansionary policies...For fiscal conservatives, the answer is equally clear: Start cutting the federal deficit and slowing the growth in the money supply now...
Earth to WSJ, the money supply (m2 nsa) is not expanding.
The money supply peaked in February when it hit 8244.9 billion. Preliminary July data now shows money supply at 8326.7 billion. The stock market and economy are about to crash again because of this.
Wall Street have discovered a way out from under the bad debt and
risky mortgages that have clogged the financial markets. The would-be
solution sounds familiar: It's a lot like what got banks in
trouble in the first place.
America is just a few days away from a
possible day of reckoning. I again call attention to this day, August
25, when the Federal Deposit Insurance Corporation issues its 2nd Quarter report for 2009 on the state of health of American banks.
T he global economy is starting to bottom out from the worst recession and financial crisis since the Great Depression. In the fourth quarter of 2008 and first quarter of 2009 the rate at which most advanced economies were contracting was similar to the gross domestic product free-fall in the early stage of the Depression. Then, late last year, policymakers who had been behind the curve finally started to use most of the weapons in their arsenal.
That effort worked and the free-fall of economic activity eased. There are three open questions now on the outlook. When will the global recession be over? What will be the shape of the economic recovery? Are there risks of a relapse? More.....
Mr. Aleynikov, who is free on $750,000 bond, is suspected of having
taken pieces of Goldman software that enables the buying and selling of
shares in milliseconds. Banks and hedge funds use such programs to
profit from tiny price discrepancies among markets and in some
instances leap in front of bigger orders.
Sure Tax Cheat Tim we believe you!
""I don't think the financial system is reverting to past practice, and we won't let that happen," Mr. Geithner said. "The big banks are running with much less leverage now, much more conservative liquidity cushions, there's been a significant shrinking of their balance sheets, getting rid of bad assets and cleaning up. And the weakest parts of the system don't exist anymore."
Some banks, including those that received government bailout money, are earning record profits, increasing pay and ramping up risk. Goldman Sachs Group Inc., for instance, recently recorded its most profitable quarter ever and boosted its degree of risk-taking as measured by how much money it could lose in a single day."
"The consequence of achieving stability is that people can raise money, can raise equity, can borrow more easily at lower rates, that these markets have liquidity again," Mr. Geithner said.
OTTAWA–The International Monetary Fund says most countries will need to raise taxes to pay off the trillions of dollars they spent fighting the global recession.
IMF chief economist Olivier Blanchard says in an article to be published today that governments acted properly in ramping up spending to stop the worst slump since World War II.
Soon, he says, nearly all countries will have to raise taxes to pay the recovery bill.
Enzio von Pfeil, CEO of EconomicClock.com told CNBC the Global stock markets could crash in October as the much hoped-for economic recovery fails to materialize he explains in the video below...
Could this be the reason our Foreign Embassies are stocking up on cash?
Law will then be declared because of the rioting and deliberate desired
control over our people. Restricted travel and checkpoints on all major
interstates as regions are effected. Massive gun confiscation
(supposedly for our safety, of course). If you don’t think they are
coming to your door to try to take them, think again!!!
The United States needs to borrow nearly $10 trillion over the next decade, including about $1.6 trillion this year.
Where's it going to come from?
This is a critical question, because resistance on the part of creditors will drive up interest rates, clobbering the housing market and demolishing the value of whatever cash savings Americans have left. The other answer--our government lending the money to itself--will destroy the value of the dollar, and that wouldn't help too many people, either (except debtors--it would help debtors because they will be able to repay nominal debts with toilet-paper dollars.
For now, the money we're borrowing is coming from somewhere, thankfully. But it's not coming from China, which has funded our spending for most of the past decade. As you can see in the chart above from the NYT, China's absolute purchases of Treasury debt continued to rise through last year, but the percentage of our borrowing that China is funding is s
Comment mine -and where oh where is obamageddon while America rots? Vacation whee!
Earlier this week it came out that this year's deficit numbers would be reduced by about $262 billion. But bad news long term. The Obama administration is upping its 10-year deficit forecast to $9 trillion from $7.9 trillion over the next two years.
And of course they waited until end-of-market on Friday to do it, though we can't blame them for that.
U.S. banks have been dying at the fastest rate since 1992, mainly because of bad loans they made. Now the banking crisis is entering a new stage, as lenders succumb to large amounts of toxic loans and securities they bought from other banks.
Federal officials on Thursday were poised to seize Guaranty Financial Group Inc., in what would be the 10th-largest bank failure in U.S. history, and broker a sale of the Texas bank to Banco Bilbao Vizcaya Argentaria SA of Spain. Guaranty's woes were caused by its investment portfolio, stuffed with deteriorating securities created from pools of mortgages originated by some of the nation's worst lenders.
The toll of failed banks is mounting, with 80 institutions closed by regulators so far this year - the most since 1992 at the height of the savings-and-loan crisis.
The latest came Friday with the seizures of two small banks in Georgia and one in Alabama: ebank, located in Atlanta, with $143 million in assets and $130 million in deposits; First Coweta, based in Newnan, Ga., with $167 million in assets and $155 million in deposits; and CapitalSouth Bank, based in Birmingham, Ala., with $617 million in assets and $546 million in deposits.
The Federal Deposit Insurance Corp. was appointed receiver of the failed banks, and approved the sale of some or all of their assets and deposits to other institutions.
In contrast to the big bank failures early in the financial crisis, many of the recently shuttered banks were undone not by exotic mortgage products but by garden-variety loans.
At the same time, a knot of big, complex banks collapsing in recent months is sapping billions fro
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