9/13/09 *Total Economic Collapse – Meltdown*
I have a new way of thinking...
The way this works is that you take in everything that is constantly disseminated as "Mainstream News" and all the "Quotes" from our "Leaders" and after processing...
You flip them 180 degrees to reveal their Truth.
On that note…
In my opinion, the “Obamacare Debate” is a diversion.
There are currently 2000 Healthcare bills CURRENTLY in Congress (over 1800 introduced THIS YEAR).
Not having read the TWO THOUSAND Bills, I’ll still hazard a guess, based on our “Representatives” and their prior history of treachery, that all provisions of the “Obamacare” package are concealed in these bills.
I hate our “Mainstream Media”
The people that are paid to inform us & be “watchdogs” are no more than Corporate pitchmen today.
As enemies line up and rob the People of this Nation, the “Media” cackles about “Green Shoots” & the Recession being OVER.
They lull the populace into sleep… no cause for alarm here… everything’s normal…
Until the pounce.
The United States is being Destroyed… from within & without.
“American” financial institutions are NOT American…
They are international in scope and ownership, & to these multi-nationals, this Country is nothing more than another victim to bleed.
And until the bitter end, they still need new reservoirs.
And so they instruct the “watchdogs” to continually sound “all-clear”… and we believe them.
How many of us live here (in the U.S.A.)?
How many owe our Lives and our Families and our Fortunes, and our Histories to this Marvelous Place?
What do We do?
It seems as if incrementalism of every variety has gotten US to the place that so many Workings of Iniquity are already in play that our Futures, at least immediately, are Set.
Get close to God.
By The Way…
This is Karl Denninger of MarketTicker.com
This guy tells the Economic TRUTH
But I Thought It Was Just A "Panic"?
Sunday, September 13. 2009
Posted by Karl Denninger in Macro Economics at 16:35
Or so we were told...
Remember, the values at which subprime mortgage bonds were trading at reflected "irrational fear" and "unreasonable expectations of default."
As of last week, the ABX index of sub-prime mortgage debt showed that AAA-rated securities from early 2007 were trading at 28 cents on the dollar – AA was at 4 cents, near all-time lows. No one can say that $2 trillion (£1.2 trillion) of sub-prime and Alt-A debt is still trading at panic levels, exaggerating losses. The dust has settled. What we can see is that creditors will never recoup their money.
More than a year later, it is clear: There was no panic; this was a JUSTIFIED level of trading and reflects the ugly reality - the investors in those bonds will NEVER get their money back.
They were swindled, to be blunt. "AA" bonds trading at 4 cents and "AAA" at 28? Remember folks, "AAA" credits are supposed to have a probability of default roughly equivalent to that of the Sun colliding with the earth.
There is not now and never was a "liquidity" problem. The problem is, has been, and continues to be a bankruptcy problem. Individuals, corporations and even governments are in fact insolvent. Most banks are and were insolvent….
They KNOW it’s a house of cards
UBS Employee Called CDO ‘Vomit’ in 2007 E-Mail (Update1)
By Carlyn Kolker and David Voreacos
Sept. 11 (Bloomberg) -- A UBS AG employee referred to asset-backed securities sold by the Swiss bank as “vomit” in an internal e-mail in 2007, according to a fraud lawsuit brought by hedge fund Pursuit Partners LLC.
A Connecticut judge cited the e-mail in ruling that UBS must post a $35.6 million bond because Pursuit has enough evidence to pursue a claim that the bank failed to disclose that its collateralized debt obligations faced rating downgrades.
“OK still have this vomit?” a UBS employee wrote in September 2007 to a director, referring to a CDO with an investment-grade rating, according to the ruling. Another UBS e- mail referred to selling “crap” to Pursuit...
But we’re Insured… Right?
Bair Says Insurance Fund Could Be Insolvent This Year (Update1)
By Alison Vekshin
March 4 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.
“Without these assessments, the deposit insurance fund could become insolvent this year,”;;;
By the “Full Faith & Credit” of the US Government,… Right?
Economist: FDIC gearing up for bank closures
Wednesday, July 8, 2009
Washington Business Journal - by Janet Leiser Contributing Writer
The Federal Deposit Insurance Corp. is gearing up to handle a large number of bank failures expected as a result of bad mortgages, both in residential and commercial real estate, an economist said Tuesday.
“They know they’re going to take down a large number of banks and they can’t do it until they’re staffed up..
But the safest place for my money is in the Bank…
Bank Failures: 1,000 Banks to Fail, FDIC Running out of Money
Baltimore, USA, 30 August 2009. "I think we'll lose 1,000 banks out of the system...over the next two years. We've already lost 81 this year. The numbers are climbing everyday…
FDIC's Fund Plunges 20% As Banking Industry Posts Loss
Published: Thursday, 27 Aug 2009 | 10:33 AM ET
With bank failures rising, the government's deposit insurance fund fell 20 percent to $10.4 billion in the second quarter as U.S. banks lost $3.7 billion.
The Federal Deposit Insurance Corp. said Thursday that surging levels of soured loans at banks dragged down profits in the April-June period..
Is The FDIC Broke And Covering It Up?
I have to wonder.
First, we have Corus, which reported a negative Tier 1 Ratio. That is, they are formally "in the hole" in terms of assets .vs. liabilities. This is never supposed to happen - but it did, "Prompt Corrective Action" be damned.
Next, we have Guaranty Bank, which also has a negative core capital ratio. They have been trying to sell themselves (gee, I wonder why?) for a while without success. Here's the relevant quote from their 8-K:
Based on these adjustments, the Bank’s core capital ratio stood at negative 5.78% as of March 31, 2009. The Bank’s total risk based capital ratio as of March 31, 2009 stood at negative 5.52%. Both of these ratios result in the Bank being considered critically under-capitalized under regulatory prompt corrective action standards.
Yet Prompt Corrective Action (PCA) - a law, by the way, not a suggestion - has once again not been followed.
Finally, we have Colonial. I made a nice chunk of coin shorting and PUTting that turkey last year, when their CEO (and a lot of other people) said they were "very conservative." Uh huh. My read of their balance sheet said they were (like many other regional banks) massively over-exposed to condo construction loans in..... you guessed it.... Florida (which incidentally is what killed Corus.) Oops. But here's the money quote on Colonial:
If the FDIC were to seize Colonial, it would be the sixth-largest seizure, by assets, in American history. Such a large failure could strain the bank safety net. Colonial has $20 billion in deposits, while the FDIC insurance fund has dropped below $15 billion. The FDIC wouldn't have to cover every dime, but when Florida's BankUnited, with $12.8 billion in assets, failed earlier this year, it cost regulators nearly $5 billion.
Add all three of these up and tell me what you think is going on?
These three are not small banks. They are significant regional institutions, unlike the tiny little banks that we hear about every Friday after the close of business.
Here's the nut to the story above: When BankUnited was seized note that the total loss on assets was some 40%. They were not in the hole by anywhere near that much according to their so-called "accounting." Neither was IndyMac, but they also created an enormous loss.
So what's going on here?
Simple: An enormous number of banks are holding loans at or close to "par" that really aren't. They're holding mortgages at massively-inflated values, even on defaulted properties, and this is why you are not seeing more foreclosure sales - that is, why inventory is being held back. If they sell it the accountants will force recognition of the loss, which will render them instantly insolvent, but so long as they "extend and pretend" they are marking these loans way, way above recovery value. The upshot of this is that these firms' balance sheet claims on asset values are massively inflated, regulators know it, and they're intentionally ignoring it.
About those “American” Institutions…
The Great American Bubble Machine
Matt Taibbi, Rolling Stone
June 24, 2009
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they’re about to do it again
The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who’s Who of Goldman Sachs graduates.
By now, most of us know the major players.
As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup - which in turn got a $300 billion taxpayer bailout from Paulson.
There’s John Thain, the rear end in a top hat chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain’s sorry company.
And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden parachute payments as his bank was self-destructing.
There’s Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board.
The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York - which, incidentally, is now in charge of overseeing Goldman - not to mention …
This hasn’t even started yet…
Commercial Real Estate Lurks as Next Potential Mortgage Crisis
BY LINGLING WEI AND PETER GRANT
Federal Reserve and Treasury officials are scrambling to prevent the commercial-real-estate sector from delivering a roundhouse punch to the U.S. economy just as it struggles to get up off the mat.
Their efforts could be undermined by a surge in foreclosures of commercial property carrying mortgages that were packaged and sold by Wall Street as bonds. Similar mortgage-backed securities created out of home loans played a big role in undoing that sector and triggering the global economic recession. Now the $700 billion of commercial-mortgage-backed securities outstanding are being tested for the first time by a massive downturn, and the outcome ...
Or THIS… The BIG one…
Coming Soon: The 600 Trillion Derivatives Emergency Meeting
Seeing a lot of Google queries regarding the size of the derivatives market landing at an older post of this blog, here is an update with the latest official figures (pdf) from the Bank for International Settlements (BIS.)
Hold your breath, as we are not anymore talking paltry billions but TRILLIONS of whichever fiat currency.
Current emergency meetings on banks and markets are still only in the stage where politicians and central bankers are bickering over how to create a few more hundred billions Euros and FRNs. But toxic MBS pale in comparison to the mushrooming growth of the derivatives market.
According to figures released in the quarterly review of the BIS (pp A103) in September the total notional amount of outstanding derivatives in all categories rose 15% to a mindboggling $596 TRILLION…
Just in case you were wondering…
What does one TRILLION dollars look like?
Still playing the same game that got us here…
ISDA Exec: OTC Derivative, Swap Markets Robust In Crisis
CAMPOS DO JORDAO, Brazil (Dow Jones)--While characterized as houses of sin during the recent banking crisis, over-the-counter derivatives and swap markets did, in fact, work well during the meltdown and have rebounded strongly, a top executive at the International Swaps and Derivatives Association, or ISDA, said Friday…
A Game that’s GOOD… for some…
Berkshire Hathaway 2Q Profit Rises 14% On Derivative Gains
Berkshire Hathaway Inc.'s (BRKA, BRKB) second-quarter earnings rose 14% despite a small revenue decline as derivatives moved further into the black.
Derivative gains and losses must be reported because of accounting rules, leading to quarterly volatility in earnings, but most observers expect Berkshire ultimately to profit from the derivatives unless stock markets crumble over the next two decades...
Understatement of the Day…
Adviser: High unemployment for years
By EAMON JAVERS | 9/12/09 10:54 AM EDT
The president’s chief economic adviser warned Friday that the nation’s unemployment rate could stay “unacceptably high” for years to come — a situation that would seriously complicate Barack Obama’s ability to convince Americans that he’s beating back the recession.
“The level of unemployment is unacceptably high,” National Economic Council Director Larry Summers said Friday. “And will, by all forecasts, remain unacceptably high for a number of years...
Citigroup says gold could rise above $2,000 next year as world unravels
By Ambrose Evans-Pritchard
Published: 4:33PM GMT 26 Nov 2008
The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.
"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.
"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.
"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration…
The Dollar Collapses
Carl Gutierrez, 09.08.09, 04:05 PM EDT
Commodities, stocks and foreign currencies all rise as investors sell dollars.
The U.S. dollar reached its lowest point against the euro this year due to a myriad of forces including rising global stocks and commodities prices, low interest rates, and investors diversifying out of Treasury debt and into other assets …
And these numbers are NOT true. We’ve changed how we calculate unemployment *sources on request*
Unemployment Hits 9.7 Percent, Underemployment At 16.8 Percent
September 4, 2009
By Laura Conaway
Unemployment rose to 9.7 percent in August, the Bureau of Labor Statistics reports. That's up 0.3 percent over the July rate of 9.4 percent. Analysts had expected a bump back up to the June level of 9.5 percent, so the actual number is solidly grimmer news for workers…
Another Giant Falling…
Clients Flee Cerberus, Fallen Fund Titan
BY PETER LATTMAN AND JENNY STRASBURG
Investors in hedge funds run by Cerberus Capital Management LP, whose audacious multi-billion dollar bet on the U.S. auto industry went bust, are bolting for the door, clinching one of the highest-profile falls from grace of a superstar in the investment world…
Of course they are…
Federal Reserve Board fights to keep its secrets
Warns disclosing where money went would cause 'irreparable harm'
Posted: August 29, 2009
12:25 am Eastern
By Drew Zahn
© 2009 WorldNetDaily
The Federal Reserve Board, despite being ordered to disclose to whom it awarded roughly $2 trillion in discount "stimulus" loans, is fighting to keep the information under wraps as a protected "trade secret…
Federal Reserve Says Disclosing Loans Will Hurt Banks
By Mark Pittman
Aug. 27 (Bloomberg) -- The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot…
What a GREAT question…
How Far Does The Lawlessness Go?
Friday, September 11. 2009
Posted by Karl Denninger in Editorial at 16:38
I'm beginning to wonder.
Those of you who have followed my writings for the last two+ years know that I have often remarked "where are the cops?" and in fact more than once asked:
Is the government a policeman or a felon?
The latter is a dangerous question should the answer ever be determined to be the latter, as it would be an open declaration that there is no rule of law. It would instantly define the entire federal law enforcement apparatus, and those of the States and Localities that stood with the Federal Government, as nothing more than thugs with lots of guns.
That's not a good situation for what should be obvious reasons...
Here’s the coming result…
Broun warns of dictatorship
Congressman stays on message - freedom at risk
By BLAKE AUED | firstname.lastname@example.org
Story updated at 12:12 am on 9/3/2009
MADISON - U.S. Rep. Paul Broun is again raising the specter of Democrats turning the United States into a totalitarian state.
Broun, R-Athens, apparently has not changed his belief that President Obama may be a fascist since he made similar remarks in Augusta in November and then in an Associated Press interview.
He told a meeting of the Morgan County Republicans on Wednesday night that Obama already has or will have the three things he needs to make himself a dictator: a national police force, gun control and control over the press.
"He has the three things that are necessary to establish an authoritarian government," Broun said. "And so we need to be ever-vigilant, because freedom is precious."…
Writing on the wall…
Aug 31, 2009
US to collapse in 'July 2010'
MOSCOW - YOU think of the United States as the world's leading superpower? Well think again, says Igor Panarin, a professor at the Russian foreign ministry's diplomatic academy.
For Prof Panarin, who has built an academic reputation in Russia for apocalyptic predictions of the imminent US demise, Moscow's ex-Cold War rival is on the brink of economic, political and social cataclysm.
'The probability that the United States will cease to exist in July 2010 is greater than 50 per cent,' he declared at a news conference on Monday. 'The results of the current financial year will shock investors….
Symptoms of everything above this line…
Great American Sell off - Companies that aren't American anymore
Between 01/01/08 and 07/24/09 total 615 companies sold to foregn entity, below list of few names…
So what’s next?
And why do we care about China?
OH YEAH… This is why…
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
(in billions of dollars)
HOLDINGS 1/ AT END OF PERIOD
Country 2009 2009 2009 2009 2009 2009
Jun May Apr Mar Feb Jan
China, Mainland 776.4 801.5 763.5 767.9 744.2 739.6 Japan 711.8 677.2 685.9 686.7 661.9 634.8
United Kingdom 2/ 214.0 163.8 152.8 128.2 129.1 123.9
Pushing US over the edge…
China is now a net SELLER of U.S. Treasury notes and bonds!
by Mike Larson 09-06-09
We told you this was coming. Heck: A blind man could have seen it a mile away.
For many months now, we’ve predicted that Washington’s wild spending and borrowing spree would make the global investors who buy our longer-term Treasuries — notes and bonds — as nervous as long-tailed cats in a room full of rocking chairs.
We’ve cautioned you that our sky-high deficits, record shattering borrowing by the U.S. Treasury and runaway money printing by the Federal Reserve would cause them to lose sleep, worrying about the real return on their money — not to mention, the return OF their money.
We forecast that as these concerns deepened, they would reduce the amount of money they were willing to loan Washington … or stop loaning us money altogether … or even begin selling the longer-term Treasuries they already own.
Now, those forecasts have begun to come true — in spades!...
And fortifying themselves…
World faces hi-tech crunch as China eyes ban on rare metal exports
Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.
By Ambrose Evans-Pritchard
Published: 5:58PM BST 24 Aug 2009
China mines over 95pc of the world?s rare earth minerals and is looking to hoard its resources.
A draft report by China’s Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs…
ROFL! China Tells IBs: Stuff It!
Monday, August 31. 2009
Posted by Karl Denninger in Editorial at 20:45
This is hilarious!
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
See what lawless behavior gets you folks?
You start this crap - selling worthless paper, intentionally turning a blind eye to fraud, profiting from fraud, screwing consumers and foreigners alike and guess what?
BINGO! A foreign government that runs a command economy says "Ok, you think that was cute? Try this!"
For banks that are hoping to sell more derivatives hedges in China, the world's fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like.
Oh, so our wonderful banks have been over there peddling their junk in Beijing too eh? Derivatives you say?...
Markets hit by China commodity default
Monday, August 31 12:48:54
A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent…
DON’T BELIEVE THE TELEVISION - IT IS NOT YOUR FRIEND
RESEARCH and WARN
Since I started this Newsletter, I've had many tell me that the Info is Important, and that they're using it.
If that's the case and it's proving useful, then know that every edition (eventually), as a resource, is now available HERE
as well as in the attached What’s Happeningnew.doc that accompanies each Newsletter.
Do you believe what you see on TV?
Have you ever seen the movie “Wag The Dog”?
Would you believe me if I told you that CNN, “The Most Trusted Name in News”,
FAKED coverage of The First Gulf War?
CNN’s Hoax on America
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If you think any of this is important, spread it around.