Archive for September, 2009

Fed buys more than 100% of mortgages issued in 2009

Wednesday, September 30th, 2009

Full story here from Chris Martenson. Look at 1:29 of this video and see if you don’t agree after reading the below data…

“This is important information.  What I’ve found and present below is that the Federal Reserve is not just supporting the housing market, it is the housing market.

Just as important as a person’s desire to buy a home is their ability to gain access to mortgage funding.

The mortgage market is a gigantic beast with many moving parts, but it is pretty easy to understand from a high level.

The process works like this:  A homeowner secures a mortgage from a bank or mortgage company.  Then the mortgage is sold off to another company, with the cash generated by that sale now available to lend to other potential homeowners.  Ultimately the mortgage may pass through several sets of hands but ultimately it lands with a terminal holder.

In that chain, the mortgage might get sold off several times, or perhaps sliced and diced by Wall Street wizards, but all that matters is that some company (with cash) is there at the end to buy the mortgage to keep the whole chain moving along.

Lately, the “terminal buyers” in that chain have increasingly ended up being the federal government (through the GSEs) and the Federal Reserve. (more…)

US secretly tried to make a deal with Goldman Sachs in wake of financial crisis

Wednesday, September 30th, 2009

Full scoop here from Raw Story.

“BREAKING 10:08 AM ET:Vanity Fair will report in the next issue of the magazine that US Treasury Secretary Henry Paulson — a former head of the investment bank Goldman Sachs — tried to orchestrate secretive deals in the midst of the financial crisis but got blowback from prominent investor Warren Buffett. The following press release was obtained by Raw Story; the magazine appears today on newsstands in New York and Los Angeles. (more…)

What is money?

Wednesday, September 30th, 2009

If you ask me, money is an idea backed by confidence, which should immediately give you pause when you consider all of the things done by Zimbabwe Ben to undermine said confidence.  But, I will give the soapbox over to this guy, who has his own ideas.

“This question divides economists even more than it divides voters. Voters do not think much about this question. Economists think about it throughout their careers. They do not agree with each other regarding the answer.

The problem is, about half of American economists who specialize in monetary theory and banking policy are either on the payroll of the Federal Reserve System or sell their services to the FED on a piece-rate basis.

Most of the others are trying to get in on the deal. Through the FED, economists set policy for American banking, and, through banking, just about everything else. (more…)

Dead banker redux

Monday, September 28th, 2009

Apparently Moloch (or whoever it is the bankers worship) is demanding further sacrifice. More dead finance types this week. If this keeps up, I promise to make it a weekly feature. Let’s see if any really big names start showing up.


Hedge fund mgr falls from escalator (

Updated: Monday, 28 Sep 2009, 8:12 AM EDT
Published : Monday, 28 Sep 2009, 6:44 AM EDT

ATLANTIC CITY, N.J. – A hedge fund executive fell to his death from an escalator at the Pier Shops at Caesars.

James Vellanti died early Sunday morning and police continue to investigate.

Police were called to the mall, which is connected to the casino by a sky bridge, at 12:01 a.m. Sunday.

Vellanti lived in Clinton and was chief operating officer for the hedge fund JNF Asset Management LLC in New York. His age was not available.

It is the second time someone has died in a fall from the escalator.

In the first death, Frank Gilbert Jr, 25, of Galloway Township, fell about 40 feet after witnesses said the 25-year-old sat on the escalator’s handrail on Aug. 9, 2008. He died of head injuries later that day.

The mall features more than 75 stores and seven restaurants.  There are three levels to the mall that are open and a fourth is planned.


Reported 9/26/09

The husband of U.S. Rep. Carolyn Maloney has died on a mountain climbing expedition in the Himalayas, aides to the congresswoman said Saturday.

Clifton Maloney, a millionaire investment banker and avid climber, was resting in a high-altitude camp after a successful ascent to the summit of the world’s sixth-highest mountain when he died.

He was 71, a late age for such a grueling endeavor, but had been in excellent health, aides said.

“I am told that his last words were, ‘I am the happiest man in the world. I just climbed a beautiful mountain,’” said Barry Nolan, a congressional aide who works with Carolyn Maloney.

Rep. Maloney, a Democrat, was “very shaken” by the death, he said.

Arrangements were still being made Saturday to recover the body from the slopes of Cho Oyu, a 26,906-foot peak that straddles the border of Nepal and Tibet.

Maloney reached the summit with a professional climbing partner and guide, Marty Schmidt, on Friday, or Thursday night Eastern Daylight Time. They rested overnight at a camp at about 23,000 feet.

Maloney died unexpectedly the next day after going to sleep in his tent, Nolan said. The cause of death was unclear, he said.

Nolan wasn’t sure whether Maloney was on the Nepalese or Tibetan side of the mountain.

Maloney was a former vice president of Goldman Sachs who made millions of dollars in investment banking and real estate after establishing his own financial firm, C.H.W. Maloney & Co. He was a director of several companies, including The Wall Street Fund Inc. and Interpool Limited.

A Navy veteran and graduate of Princeton College and Harvard Business School, Maloney also was a seasoned athlete and adventurer. A publicist for the family released a biographical statement saying Maloney had completed the New York City Marathon 20 times and was the oldest man to reach the summit of Cho Oyu.

The family was informed of his death by the Department of State early Saturday.

Carolyn and Clifton Maloney married in 1976. He is survived by his two daughters, his mother, his sister and nine nieces and nephews.

The Fed on gold manipulation

Monday, September 28th, 2009

Full story here from

“Zero Hedge has recently presented several declassified documents from the pre-1971 “Nixon Shock” days, that endorse the case for gold as a major historical factor in US monetary and foreign policy, as demonstrated by State Department and CIA disclosure. Gold’s special status in policy and administrative decision-making was a direct factor in Nixon’s choice to abolish the gold reserve at a time of an exploding budget deficit.

Yet what about the days after 1971, and specifically, how did that critical “behind the scenes” organization, the Federal Reserve, perceive and manipulate gold in the post Bretton-Woods world? Was gold, freed from its shackles to the dollar, once again merely a symbolic representation for money? (more…)

Only modest confidence uptick after trillions dispensed

Monday, September 28th, 2009

Full story here from Bob Chapman.

“Nearly half the nation’s 25 biggest retail chains expect to hire fewer holiday workers this season than they did last year, another sign that retailers aren’t counting on recession-strained shoppers to relax the tight grip on their pocketbooks this year.

About 40% of stores surveyed across a broad swath of retailing, including consumer-electronic chain Best Buy Inc., teen-retailer American Eagle Outfitters Inc., and luxury-goods seller Saks Inc., told the Hay Group, a human resources consulting firm, that they expect to hire between 5% and 25% fewer temporary workers this year than last, when the recession forced many retailers to trim staff in response to falling sales. That’s a grimmer outlook than the Hay survey found a year ago, when 29% of retailers said they would be slashing their holiday workforce. (more…)

Does a liquidity trap pose a threat to economic recovery?

Friday, September 25th, 2009

Full story here from Market Oracle. Liquidity trap? Imagine a doctor declaring that the only issue with reviving the dead is to make sure that you keep transfusing the corpse with fresh blood and keep pounding on the chest to prove the heart’s still beating. No? Not working for you? Well, it’s not working for Dr. Ben either…

“The latest data for lending in the eurozone, the United Kingdom, and the United States display a visible weakening. In the eurozone, the yearly rate of growth of bank lending to the private sector fell to 0.6% this July from 9.3% in July last year. In the United Kingdom, the yearly rate of growth of lending to the private sector fell to 2.2% in July 2009 from 10.1% in July 2008. In the United States, the rate of growth of lending plunged to minus 3.8% in August 2009 from a positive figure of 8.6% in August 2008. (more…)

Bernanke’s plan to “re-rob” the last $1 trillion

Thursday, September 24th, 2009

Fully and provocatively documented here courtesy of Exiled Online.

“By Mark Ames


There was a leak yesterday to Bloomberg that the Fed is making plans to “drain” $1 trillion from the US economy. Because supposedly our economy is overheating with too much money—not that anyone you or I know has seen a penny of it. It doesn’t seem to make any sense to suck money out of a cash-strapped country when the economy’s in ruins: unemployment is reaching Third World levels, foreclosures are hitting new record highs, and lending is still contracting at an alarming rate not seen since, yep, the Great Depression. So why would the Fed talk about pulling $1 trillion out of the economy, as if that’s the medicine it needs? (more…)

The economy is a lie, too

Wednesday, September 23rd, 2009

Latest offering from Paul Craig Roberts via

“Americans cannot get any truth out of their government about anything, the economy included. Americans are being driven into the ground economically, with one million school children now homeless, while Federal Reserve chairman Ben Bernanke announces that the recession is over.

The spin that masquerades as news is becoming more delusional. Consumer spending is 70% of the US economy. It is the driving force, and it has been shut down. Except for the super rich, there has been no growth in consumer incomes in the 21st century. Statistician John Williams of reports that real household income has never recovered its pre-2001 peak. (more…)

US backing for world currency stuns markets

Wednesday, September 23rd, 2009

Has Tiny Tim flipped his lid or were Chinese snipers trained on him?

“The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.

“The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation,” he said.

Mr Geithner later qualified his remarks, insisting that the dollar would remain the “world’s dominant reserve currency … for a long period of time” but the seeds of doubt have been sown.

The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar.

“I don’t believe that there is a need for a global currency. The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world,” he said.

The Chinese proposal, outlined this week by central bank governor Zhou Xiaochuan, calls for a “super-sovereign reserve currency” under IMF management, turning the Fund into a sort of world central bank. (more…)