tagged w/ Economic Collapse
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On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst.
But what's even crazier is that the bet paid.
At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history.
The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. This trader was either the luckiest guy in the world, the smartest son of a bitch ever or…
Or what? That this was a brazen case of insider manipulation was so obvious that even Sen. Chris Dodd, chairman of the pillow-soft-touch Senate Banking Committee, couldn't help but remark on it a few weeks later, when questioning Christopher Cox, the then-chief of the Securities and Exchange Commission. "I would hope that you're looking at this," Dodd said. "This kind of spike must have triggered some sort of bells and whistles at the SEC. This goes beyond rumors."
Cox nodded sternly and promised, yes, he would look into it. What actually happened is another matter. Although the SEC issued more than 50 subpoenas to Wall Street firms, it has yet to identify the mysterious trader who somehow seemed to know in advance that one of the five largest investment banks in America was going to completely tank in a matter of days. "I've seen the SEC send agents overseas in a simple insider-trading case to investigate profits of maybe $2,000," says Brent Baker, a former senior counsel for the commission. "But they did nothing to stop this."
much more at link....On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the... more
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An interesting article on the inherent morality of capitalism.
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A new spike has sent the cost of the precious metal to a level not seen before. The dollar slid sharply after yesterday's report in The Independent that Gulf Arab states are secretly planning to stop trading oil in dollars, and a senior UN official said that the US should be stripped of its position as the main source of currency reserves for other countries.
The price of gold is surging on world markets amid fears that the old economic order based on the supremacy of the US dollar could be breaking down.
The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank.
The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs. Beijing's persistently large trade surpluses and manipulation to prevent its own currency from appreciating have effectively forced Western nations into running persistently large trade deficits. It was this pressure that blew up various asset bubbles that burst with such disastrous effect last year.
This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.
Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."A new spike has sent the cost of the precious metal to a level not seen before. The... more
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The FDIC announced seven bank failures after the market closed Thursday, which brings the number of banks closed this year to 52. But, if you count the number of branch offices closed this week it’s 30 branches.
Founders Bank
Millennium State Bank of Texas
First National Bank of Danville
Elizabeth State Bank
Rock River Bank
First State Bank of Winchester
John Warner BankThe FDIC announced seven bank failures after the market closed Thursday, which brings... more
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It's a terrible mistake to confuse the momentary solvency of the financial sector and the long-term health of our economy.
While we have addressed the credit collapse, we have not begun to tackle the far more daunting, and more significant, structural problems in the economy. Instead of focusing on the green shoots, let's examine the macro data that will determine our national prosperity in the next generation. These data are terrifying.
Start with the job front. Long term, nothing is more fundamental than good jobs to creating the middle-class wealth that must drive the economy. The creation of true middle-class jobs was the great success of our economy from 1950s through the mid-1990s. Consider the job data, in aggregate and by sector, from the past decade. (All data are from the U.S. Department of Labor, Bureau of Labor Statistics.)It's a terrible mistake to confuse the momentary solvency of the financial sector and... more
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Watch the video to find out what turned ordinary American soldiers into the monsters revealed in the photographs.
Tales of Murder and Torture
The latest chapter in reporter Olivia Rousset's Abu Ghraib revelations. Three weeks ago on Dateline, Olivia revealed new evidence of horrific abuse at Abu Ghraib.
On the link above you can read the full transcript of the interview.....I suggest you read it, copy it, and mail it to everyone on your mailing list.
On a recent trip to the US, Olivia managed to track down two former Abu Ghraib guards - one who served time for committing abuses against Iraqi detainees and another who witnessed those shocking events. It's no small irony that both of these former US military policemen now see themselves as being among the victims of Abu Ghraib. Here's Olivia's story. And, as you would expect with this sort of report, be warned - some of what you're about to see is not exactly pretty and could even offend.
Broadcast - -Dateline - SBS Australia 03/08/06Watch the video to find out what turned ordinary American soldiers into the monsters... more
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A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.
The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.
“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.
Treasury Secretary Timothy Geithner has revamped the Troubled Asset Relief Program to focus on injecting capital into banks and removing up to $1 trillion in illiquid securities from their balance sheets via public-private investment partnerships. The government is also working to unfreeze credit markets through a Federal Reserve program that provides loans to investors in some asset-backed securities.
Warren, in an interview on Bloomberg Television, said yesterday that while “things may be getting a little better” under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers’ money.
“We still have a long way to go, a very long way,” she said.
Depth of Downturn
In the report, Warren’s panel said “it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth.”
The group said it was offering an examination of “potential policy alternatives” for the Treasury and not endorsing any shift at this time.
Still, it said a bank liquidation would be “least likely to sap the patience of taxpayers” and “provides clarity relatively quickly” to the markets.
“Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal,” the report said.
The report also said that past successful financial rescues were accompanied by governments’ “willingness to hold management accountable by replacing -- and, in cases of criminal conduct, prosecuting -- failed managers.”
Separate Findings
Two of the panel members, New York State Superintendent of Banks Richard Neiman and former New Hampshire Senator John Sununu, issued separate findings.
“We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan,” the two wrote.
Sununu and the five-member panel’s other Republican appointee, Representative Jeb Hensarling of Texas, dissented from the entire report.
The oversight panel was set up under the rescue law passed in October. It has three members appointed by Democrats and two by Republicans. The group’s reports are required by the legislation.A congressional panel overseeing the U.S. financial rescue suggested that getting rid... more
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Federal regulators shut down two more banks yesterday, raising the number of bank failures so far this year to 23.
The first bank was Cape Fear Bank in Wilmington, N.C., the first North Carolina bank to fail in nearly 16 years. The other bank was New Frontier Bank of Greeley, Colo., the second Colorado bank this year to collapse. The Federal Deposit Insurance Corp. took over both banks after their respective state regulators closed them down. New Frontier Bank has $2 billion in assets and $1.5 billion in deposits. Cape Fear Bank has $403 million in deposits and $492 million in assets.
The agency estimated that the two closures would reduce the federal deposit insurance fund by $801 million. This year's tally of 23 bank failures is nearing the total for all of 2008, when 25 U.S. banks were seized by regulators.
4/11 6:37 AM ET ClipsFCFederal regulators shut down two more banks yesterday, raising the number of bank... more
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With enough abandoned lots to fill the city of San Francisco, Motown is 138 square miles divided between expanses of decay and emptiness and tracts of still-functioning communities and commercial areas. Close to six barren acres of an estimated 17,000 have already been turned into 500 "mini- farms," demonstrating the lengths to which planners will go to make land productive.
The city, like the automakers, has to shrink to match what's left, said June Thomas, a professor of urban and regional planning at the University of Michigan in Ann Arbor.
"The issue is how," she said. "There's no vision."
"People are moving out of the city, trying to find work," said David Martin of Wayne State University's Urban Safety Program. Those who stay "can't afford to move out."
"Property abandonment is getting so bad in Flint that some in government are talking about an extreme measure that was once unthinkable -- shutting down portions of the city, officially abandoning them and cutting off police and fire service.
Mayor] Brown said that as more people abandon homes, eating away at the city's tax base and creating more blight, the city might need to examine "shutting down quadrants of the city where we (wouldn't) provide services."
He did not define what that could mean -- bulldozing abandoned areas, simply leaving the vacant homes to rot or some other idea entirely."
"Cul-de-sac neighborhoods once filled with the sound of backyard barbecues and playing children are falling silent. Communities like Elk Grove, Calif., and Windy Ridge, N.C., are slowly turning into ghost towns with overgrown lawns, vacant strip malls and squatters camping in empty homes."
"In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again).With enough abandoned lots to fill the city of San Francisco, Motown is 138 square... more
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Will this initiate the Dollar Crisis?
Prepare yourselves for harder times ahead.
Watch video and discuss-Will this initiate the Dollar Crisis?
Prepare yourselves for harder times ahead.... more
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The corporate owned mass media, has vocalized loudly about an apparent "shift to the left" in the United States. This includes decries from veteran CNN Harvard University educated Lou Dobbs, who has cried out against the threat of left-wing "socialism" against the American capitalist Dream. However, investigative researchers and journalists like Jim Marrs suggests this is not the case. Such research suggests that what superficially appears to be a shift to the left, in an actual shift to the ultra right.
Yes, socialism does embrace "nationalization". However socialism is an essentially pacifist ideology, that is grounded in the kind of human rights and social justice that the current Presidential administration...The corporate owned mass media, has vocalized loudly about an apparent "shift to the... more
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agora
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added this
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8 months ago
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Stan Kurland. Remember this name. Stan Kurland.
It seems the man who sold everyone Sub prime mortgages is now a leader in purchasing those same "Toxic Assets" back at 30 to 50 cents on the dollar...
The cycle continues... The new name is PennyMac. Once again, It's PennyMac.
From the article:
STAN Kurland has been called a crook, an arsonist, a "depraved, sub-prime creep" and has even been likened to cannibal serial killer Jeffrey Dahmer.
And he got his pile selling destructive sub-prime home loans to poor people during the salad days of the US housing boom, so there's no shortage of folk who think jail is too kind for him.
Kurland is the former president of detested mortgage giant Countrywide Financial, the predatory lender whose home loan portfolio grew from $US62 billion to $US463 billion between 2002 and 2006. That's when he jumped ship, cashing out $US200million worth of Countrywide's stock before the full force of the housing collapse hit and sent the US economy into a nosedive.
Three years on, Kurland is getting rich all over again, this time by buying up distressed mortgages and mortgage-backed securities from wobbly banks and the US Government.
Through his quaintly named PennyMac, Kurland has been quietly buying these assets for pennies in the dollar and redesigning them into loans that are affordable to the homeowners.
Please read article and discuss--Stan Kurland. Remember this name. Stan Kurland.
It seems the man who sold everyone... more
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Clips from article:
By the end of 2009, two-thirds of the state's banks will be operating under cease-and-desist orders or other regulatory actions, Anaheim-based banking consultant Gary S. Findley predicts.
"There are more than 300 banks in California, and the reality is that more than a third of those are losing money," Trezza said.
What I gather from this is 1 in 3 banks are losing money and by the end of the year, 2 out of 3 banks will be in Failure mode in California.
And this is only California...
With approximately 8305 FDIC "insured" banks nationwide holding $14 trillion in assets the FDIC fund will not be able to handle a massive bank failure run.
Expect to see more TARPS and Son of TARPS in the near future.
I post this in hopes of opening the eyes of my fellow Citizens to the upcoming Dollar crisis.
Please read article at link and discuss-Clips from article:
By the end of 2009, two-thirds of the state's banks will be... more
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Another one bites the dust...
We are now 4 banks away from the total number of banks to fail LAST YEAR.
Interesting times are ahead.
Be prepared for the upcoming "Dollar Crisis"
Omni National Bank of Atlanta was seized by federal regulators, the 21st bank in the United States to fail this year. Omni National, with $956 million in assets and $796.8 million in deposits, was shut by the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation was named receiver. SunTrust Banks of Atlanta will operate the lender’s six branches and wind down the bank by April 27, the F.D.I.C. said.
The failed bank, which was opened in 2000 and owned by Omni Financial Services, had branches in Georgia, Illinois, Florida and Texas, and two loan offices in Alabama and Pennsylvania. Omni National customers must transfer accounts by April 27, or receive a check from SunTrust after the branches are closed, the F.D.I.C. said.
Please read article at link-Another one bites the dust...
We are now 4 banks away from the total number of... more
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3/19/2009 Ron Paul on House Floor
Check out my great playlists!
This website is filled with some great information that everybody needs to see before giving their grandchildren's liberties to the Federal government:
http://www.youtube.com/user/shanklinmike3/19/2009 Ron Paul on House Floor
Check out my great playlists!
This website is... more
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I've been telling you for weeks to not be distracted by the "big news of the day" because it's usually just a smokescreen. But on Wednesday, I fell for it myselfI've been telling you for weeks to not be distracted by the "big news of the day"... more
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WASHINGTON - Federal regulators on Friday seized control of two large institutions that provide wholesale financing for U.S. credit unions, a move they say was needed to stabilize the credit union system.
The National Credit Union Administration said it has taken over and put into conservatorship the two corporate credit unions, U.S. Central Federal Credit Union, based in Lenexa, Kansas, and Western Corporate Federal Credit Union, in San Dimas, California. U.S. Central has about $34 billion in assets while Western Corporate, known as WesCorp, has an estimated $23 billion in assets.
A conservatorship enables the government to operate a financial institution. Corporate credit unions provide financing and investment services to the much larger population of retail credit unions. Some of the 28 corporate credit unions in the U.S. have sustained steep losses on paper from the depressed value of the mortgage-linked securities they hold.
The NCUA, which oversees some 7,800 federally insured credit unions, said it "will continue to take any and all steps necessary to preserve a well-functioning system of corporate credit unions and to protect the assets of (retail credit unions) and their members during the ... financial market dislocation."
End of Excerpt
Source: MSNBC
Photo Source: WikipediaWASHINGTON - Federal regulators on Friday seized control of two large institutions... more
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The effects of the recession. It's a bigger problem than you might think.
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By the wide stretch of the American River in Sacramento, history is repeating itself. Here, during the Great Depression of the 1930s, men and women who had lost everything and despaired of finding work built rough shelters and huddled around fires.
Now the spiral of job losses and house repossessions has left another wave of Americans homeless, and a new tent city is growing rapidly on lumpy, derelict land between the river and the railway tracks here in the capital of California.
There are more than 300 people living in scattered encampments stretching a couple of miles along the river bank. As many as 50 more arrive each week. Unemployment in Sacramento reached 10.4 per cent in January and California is suffering some of the worst repossession rates in the country, with as many as 500 people losing their homes every day last year.
Charity workers in the city can no longer cope with the number of people coming to them for help. The shelters are full, with one home that caters for women and children turning away 200 people a night.By the wide stretch of the American River in Sacramento, history is repeating itself.... more
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NEW YORK (Fortune) -- The government is bracing for a big bank failure.
A bill introduced in Congress would give the FDIC, the agency that stands behind Americans' bank deposits, temporary authority to borrow as much as $500 billion from the government to shore up the deposit insurance fund.
The bill -- the Depositor Protection Act of 2009, backed by Senate Banking Committee Chairman Chris Dodd, D-Conn. and Sen. Mike Crapo, R-Idaho -- wouldn't change the status of individual bank accounts, which through the end of this year are insured up to $250,000.
But the Dodd-Crapo bill acknowledges what the financial markets have been signaling for the past month -- that the government must take the lead in a costly cleanup of the mess in the financial sectorNEW YORK (Fortune) -- The government is bracing for a big bank failure.
A bill... more
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