Full story here from The Baseline Scenario.
“The entirely pointless G7 meeting this weekend only served to underline the fact that Europe is again entering a serious economic crisis.
At the end of the meeting yesterday, Treasury Secretary Tim Geithner told reporters, “I just want to underscore they made it clear to us, they the European authorities, that they will manage this [the Greek debt crisis] with great care.” Read the rest of this entry »
Full story here from MarketOracle (via Golden Jackass). To herald the divergence between the paper gold contract price and the true physical gold price, leading to a potential shutdown of the totally corrupted gold exchanges, as gold bullion rapidly exits the London metals exchange amidst skyrocketing demand, and the syndicate hopes to produce gold from margin calls while clearinghouse supply lines have been interrupted, during which London has been targeted by independent auditors & inspectors, billionaire account holders, and Interpol police.
http://www.marketoracle.co.uk/Article16987.html (written article)
http://www.contraryinvestorscafe.com/player/player.php?utype=PU&pid=62242&aid=368 (Contrary Investors Cafe Radio interview)
“A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price). The differential in price is growing wider, enough to place tremendous pressure on the gold market itself. Look not to the gold premium paid for purchases, but to high volume purchases in the tens of million$. In mid-December, almost every demand for gold contract delivery was matched by a cash delivery, complete with 25% bonus premium offered. The officials even produced a new ledger item called ‘Cash For Delivery’ that was necessary to balance their badgered books. It prompted little attention. Some call it a basic bribe. Others call it a technical default. Read the rest of this entry »
Full story here from The Daily Telegraph. Ka-boom!
“Julian Callow from Barclays Capital said the EU may to need to invoke emergency treaty powers under Article 122 to halt the contagion, issuing an EU guarantee for Greek debt. “If not contained, this could result in a `Lehman-style’ tsunami spreading across much of the EU.”
Credit default swaps (CDS) measuring bankruptcy risk on Portuguese debt surged 28 basis points on Thursday to a record 222 on reports that Jose Socrates was about to resign as prime minister after failing to secure enough votes in parliament to carry out austerity measures. Read the rest of this entry »
Full story here from Paul Craig Roberts.
“Former Federal Reserve chairman Alan Greenspan answered that he had placed his trust in a flawed theory when he was called before Congress to explain why he, Goldman Sachs Treasury Secretary Robert Rubin and Deputy Treasury Secretary Larry Summers, prevented Brooksley Born, head of the Commodity Futures Trading Corporation, a government regulatory agency, from doing her job of regulating over-the-counter derivatives.
The efficient markets theory is that unregulated markets are efficient and rational. According to this theory in which Greenspan placed his trust, unregulated markets produce the best possible result. Any regulatory interference worsens the outcome. Read the rest of this entry »
Full story here from Mish.
“At long last we have our first major indictment. You will be pleased to read Ex-BofA chief Lewis charged with fraud.
New York Attorney General Andrew Cuomo said Thursday it was bringing civil charges against senior Bank of America executives, including former company CEO Ken Lewis, for their role in the company’s controversial purchase of Merrill Lynch.
Full story here. Even gentlemen must sometimes ask for pistols at 20 paces.
“On a December afternoon in 2007, billionaire Jose Berardo walked into the attorney general’s 18th-century headquarters in Lisbon to rat out executives at the Portuguese bank on which he had staked his fortune.
Berardo, whose 7 percent share in Banco Comercial Portugues SA was worth about $1 billion at the time, says he met with Attorney General Fernando Pinto Monteiro for two hours. The investor handed Portugal’s top prosecutor several folders of evidence showing that executives at Portugal’s largest publicly traded bank had allegedly used offshore companies to try to boost the share price and their own bonuses. Berardo says he hoped his disclosure would spur the prosecution of the Oporto- based bank’s chairman, with whom the investor had clashed over governance issues, Bloomberg Markets magazine reports in its March issue. Read the rest of this entry »
Full story here from MarketOracle.
“Allan Meltzer wrote a very good essay for the Wall Street Journal on January 27. It dealt with the build-up in the Federal Reserve System’s monetary base as a result of its purchases of government debt, especially Fannie Mae and Freddie Mac debt, in the fall of 2008. Its title and subhead tell the story:
You can read it here, and I suggest that you do. Read the rest of this entry »
Full story here from MarketOracle. Don’t worry, it’s better than the title sounds!
“One of the “pillars” of financial regulation is the idea of risk weighting.
The way that works is that “assets” which in the case of banks are typically either loans to other people or securities held by the bank like US Treasuries or Sub-prime RMBS (the Brits call those bonds), are assigned a risk weighting by the regulator.
Based on that the “Risk Weighted Capital Adequacy Ratio” (CAR) is worked out, the regulator specifies a minimum number for this, typically 8% to 10%. Read the rest of this entry »
Full story here from Paul Craig Roberts via CounterPunch. Think of this as a “crisis intermission”.
“Is the financial crisis over? Is the recovery for real and, if not, what are Americans’ prospects? The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it:
The global crisis is understood as a banking crisis brought on by mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets. Read the rest of this entry »
Marc Faber: If the US was a corp, it would be junk rated
February 9th, 2010Full story here from ZeroHedge. I love that sexy Swiss man talking sense.
“Marc Faber discusses America’s unsustainable debt load in this interview with Margaret Brennan on Bloomberg TV. An amusing observation: the GDP growth from each $1 of new total debt has dropped from $0.25 to -$0.60. Also some much deserved Bernanke and Krugman bashing. Why it is so difficult to realize that the only way out of the crisis is to cut corporate and sovereign debt, we don’t understand. Ah yes, because for that to happen, equity values across virtually all of the US economy would be wiped out… And that would destroy the myth that there is any real equity value in America.”
Check the link for the full Faber interview.
Tags: commodities, depression, derivatives, dollar, Marc Faber, recession, subprime, thankless banker jerks
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