Archive for January, 2010

Greek default: charting the dominoes

Sunday, January 31st, 2010

Full story here from ZeroHedge.

“It appears that in the 11th hour, Europe is still unable to decide just what the proper approach to rescuing Greece is. The Sunday Times has just released information that a plan to be published by Brussels on Tuesday, titled “Urgent measures to be taken by May 15, 2010″ will demand dramatic Greek austerity measures, such as cutting “average nominal wages, including in central government, local governments, state agencies and other public institutions” and proposes new luxury goods and self-employed taxes. Yet the kicker is that “Richer eurozone countries such as Germany and France would be expected to bail out Greece in the worst-case scenario, to prevent a disastrous crash in the value of the single currency” – not very surprisingly, this is precisely the Plan B that Almunia yesterday swore up and down that the EU was not, repeat not, considering. Moral Hazard has indeed gone global. Yet even with this bureaucratic memorandum on the table, it seems certain that the EU will not actually act before Greek deterioration escalates out of control. Here are the near term catalysts that will likely make the cost of inactivity very high. Think full Dick Fuld stature when screaming upright. (more…)

Bin Laden blasts US for climate change

Friday, January 29th, 2010

Full story here. My initial response to this was: “are you f***ing kidding me?!?!” OK, so if a [dead since 2002] terrorist says that the US is evil because we are the root of global warming, wouldn’t I be “with the terrorists” if I support the Copenhagen proposals? Of course Bin Laden never mentions the depleted uranium poisoning of Iraq by US troops, which would have far more of a visible impact in the environment and directly affecting his fellow arabs/muslims, not like some nebulous global warming spectre. 

I have to say that I am very disappointed at the CIA (or whoever ‘crafted’ this little message) for making the supposedly butchest terrorist of all time sound like a politically correct snotface from Belgium.

“Al-Qaida leader Osama bin Laden has called for the world to boycott American goods and the U.S. dollar, blaming the United States and other industrialized countries for global warming, according to a new audiotape released Friday.

In the tape, broadcast in part on Al-Jazeera television, bin Laden warned of the dangers of climate change and says that the way to stop it is to bring “the wheels of the American economy” to a halt.

He blamed Western industrialized nations for hunger, desertification and floods across the globe, and called for “drastic solutions” to global warming, and “not solutions that partially reduce the effect of climate change.”"

Bomb in Boise

Thursday, January 28th, 2010

Full story here from ZeroHedge. I may add that I got ahold of an SF Bay Area RE report: for all cities reporting there was between 20-40% of all home sales in the last 2 months were short sales, REO or foreclosures. This is one of the richest parts of the richest state. I can’t even talk about Florida. Such a shonda, I’m so verklempt!

RealtyTrac is out this morning with a year-end look at foreclosures. I think it is a terrible report.

There is the usual bad news from the worst hit areas.

-1 in 8 homes in Vegas was in foreclosure. How is it that the MSM has convinced us that things have gotten better there? They have not.

-Cali and Arizona are looking at ten percent default rates. And this has been going on for a few years now.

-A substantial part of South Florida has one home in ten in default. In Marco Island/Naples the rate is 6.5%. That blows my mind. I know this area. It is deep pocket. At least it used to be.

-The real shocker to me was Provo Utah and Boise ID. The default rates are up 100% from two years ago. This was not supposed to be happening in places like this. (more…)

Regulate Wall St? Wishful thinking!

Thursday, January 28th, 2010

Full story here from The International Forecaster.

“Paul Volcker is back and things are about to change in Washington. A split has occurred between the paper forces of Goldman Sachs and JP Morgan Chase. Mr. Volcker represents Morgan interests. Both sides are Illuminists, but the Morgan side is tired of Goldman’s greed and arrogance. Volcker cannot be called old school or anachronistic. He represents sanity in an insane financial world even though he is an integral and powerful part of the elitist structure. He represents a change in gears and approach. The present administration and the Democratic Party has lost its moorings and is in on a path of political suicide. They have tried to get passed impossible legislation that the American people do not want, and they will abandoning those positions, because they are no longer tenable. The election of Scott Brown in Massachusetts was a major defeat for all administration programs. As you will see Mr. Obama and fellow Democrats will start sounding like popular conservatives and populist talk show hosts, as they attempt to win back their center. That is where Paul Volcker fits in. He is back and major changes are about to take place financially and politically. (more…)

Unredacted AIG Sched A released

Thursday, January 28th, 2010

God bless the leakers, for they shall know the truth.  Check the link to see the actual docs. And why weren’t Paulson and Geithner immediately arrested for perjury and/or contempt of Congress after that shameless piece of shit “testimony” on the 27th?

“It appears that of the roughly 38 Goldman CUSIPs which have data available, there are exactly zero rated A or higher by Moody’s (we ignore the rating from the other rating agency as they apparently have long stopped rating most of these securities). There are 9 CUSIP issued after 2006, 21 between 2005 and 2006, and 8 issued before 2005. As Matt Goldstein points out, of the 25 or so deals that had CDS written on them after January 1, 2006, Goldman accounts for 40% of this late (post 2005) issuance. Goldstein notes: “that’s critical because in December 2007, former AIG Financial Products head Joseph Cassano had said AIG largely got out of the CDS business by the end of 2005.” Some more reasons to finally indict the man who, more so than anyone, cost taxpayers hundreds of billions with horrendous risk management practices. (more…)

Suspending money market redemption is now legal

Wednesday, January 27th, 2010

Full story here from ZeroHedge.

Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC’s just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: “We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares.” Too bad investors’ hardships considerations ended up being completely irrelevant. (more…)

Darrell Issa has AIG’s redacted Sched A, wants to make list public

Wednesday, January 27th, 2010

Another potential blow to the Dark Side courtesy of ZeroHedge.

“It appears America’s taxpayers are finally about to find out just what worthless securities they received in exchange for 100 cents on the dollar, courtesy of Goldman, Soc Gen, ML et al. when Bernanke and Gaithner, or whoever, decided to pay the banks in full for multi-billion dollar portfolio. As a reminder, the list in question is the now infamous Schedule A, which was redacted across the board, and which the SEC gave its blessing for secret treatment well into 2018. (more…)

Fed starting to unwind loose monetary policy, could trigger 2nd recession

Wednesday, January 27th, 2010

Full story here from MarketOracle. I do disagree with 2nd recession, concept. It’s one big fat Depression. We’re probably around 1931 in the Hoover administration, metaphorically speaking.

“Officials at the Federal Reserve System insist that the FED will unwind its more than doubled monetary base. They do not say when. They do not say how. But they insist that they will do this when the economy recovers.

The FED has begun this process. The press has not paid any attention to this, but the evidence is unmistakable. Any time you want to monitor any of this, search Google for “Federal Reserve charts.” You can see for yourself. (more…)

Rule by the Rich

Wednesday, January 27th, 2010

Full story here from Paul Craig Roberts via CounterPunch. Paul’s my man for Treas Sec–way more intelligence and ethics than the lagomorph Eraserhead-wannabe Senor Timmy G. In other news, once I heard Volcker stumping for Zimbabwe Ben, saying it would send a bad message to the world if he was not reconfirmed, it was all over. Volcker, do not pass Go, do not collect $200, go directly to the cheapy nursing homes (you know, the ones where they hire twitchy ex-cons to care for your every need).

“The election of Republican Scott Brown to the U.S. Senate by Democratic voters in Massachusetts sends President Obama a message. Voters perceive that Obama’s administration has morphed into a Bush-Cheney government. Obama has reneged on every promise he made, from ending wars, to closing Gitmo, to providing health care for Americans, to curtailing the domestic police state, to putting the interests of dispossessed Americans ahead of the interests of the rich banksters who robbed Americans of their homes and pensions. (more…)

Insider’s view of the US Real Estate train wreck

Tuesday, January 26th, 2010

Full story here from Market Oracle.

“The first time I spoke with real estate entrepreneur Andy Miller was in late 2007, when I asked him to serve on the faculty of a Casey Research Summit. As John Mauldin, a former faculty member himself, knows, we’re very selective with our speakers. And there was no one in the nation I wanted more than Andy to address the critical topic of real estate.

My interest in Andy was due to the fact that he has been singularly successful in pretty much all aspects of the real estate market, including financing and developing large projects – such as shopping centers, apartment communities, office buildings, and warehouses – from one end of the country to the other. His expertise has also allowed him to build an impressive business providing assistance to large financial institutions that need help in dealing with problem commercial real estate loans. As you might suspect, business is booming. (more…)