YouTube Added: 21.03.2013
Tags: AIG, Bank of England, Banking, Bonds, Collapse, Cyprus, Debt, Derivatives, Derivatives market, ECB, Economy, EU, Europe, Fed, Federal Reserve, Global News, Government, Hillary Clinton, JPMorgan, Lehman Brothers, Max Keiser, MF Global, Obama administration, Politics, Quantitative Easing, Reggie Middleton, Society, U.S.
- Kyle Bass Warns “The ‘AIG’ Of The World Is Back” (ZeroHedge, March 12, 2013):
Kyle Bass, addressing Chicago Booth’s Initiative on Global Markets last week, clarified his thesis on Japan in great detail, but it was the Q&A that has roused great concern. “The AIG of the world is back – I have 27 year old kids selling me one-year jump risk on Japan for less than 1bp – $5bn at a time… and it is happening in size.” As he explains, the regulatory capital hit for the bank is zero (hence as great a return on capital as one can imagine) and “if the bell tolls at the end of the year, the 27-year-old kid gets a bonus… and if he blows the bank to smithereens, ugh, he got a paycheck all year.” Critically, the bank that he bought the ‘cheap options’ from recently called to ask if he would close the position – “that happened to me before,” he warns, “in 2007 right before mortgages cracked.” His single best investment idea for the next ten years is, “Sell JPY, Buy Gold, and go to sleep,” as he warns of the current situation in markets, “we are right back there! The brevity of financial memory is about two years.”
Click the image below for the full presentation (unembeddable):
The main thrust of the discussion is Bass’ thesis on Japan’s pending collapse – which we wrote in detail on here, here, and here – and while the details of this thesis should prepare most for the worst, it is the Q&A that provides some very clear insights into just what is going on in the world.
Starting at around 50:00…
Bass On Immigration Reform in Japan – hailed as a solution to the demographic problem – Bass says “Ain’t gonna happen. They need wage inflation and this will not encourage that. It’s an untenable situation.” Summing up his whole view on Japan – “I just don’t think it can be fixed.”
Question: When you look today in the capital markets at the tactical asymmetry that exists among the various financial instruments to take advantage of cheap optionality – what is that instrument?
I’ll give you guys a bit of an idea… we don’t talk about exactly what
we do – we tell you how much we love coke but we’re not gonna give you
the formula.The AIG of the world is back – I have 27 year old kids selling me one-year jump risk on Japan for less than 1bp – $5bn at a time.
You know why? Because it’s outside of a 95% VaR, its less than one-year to maturity, so guess what the regulatory capital hit is for the bank… I’ll give you a clue – it rhymes with HERO…
Tags: AIG, Collapse, Economy, Global News, Gold, Japan, Kyle Bass
- Secrets and Lies of the Bailout (Rolling Stone, Jan 4, 2013):
It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?
Wrong.
It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.
Tags: AIG, Bailout, Bank of America, Banking, Barack Obama, Ben Bernanke, Bush administration, Citigroup, Economy, FDIC, Fed, Federal Reserve, Financial Crisis, General Motors, George Bush, Global News, GM, Goldman Sachs, Government, Great Depression, Henry Paulson, Jamie Dimon, Larry Summers, Lehman Brothers, Merrill Lynch, Neil Barofsky, Nomi Prins, Obama administration, Politics, Ponzi schemes, Sheila Bair, Society, TARP, Taxpayers, Timothy Geithner, U.S., Wachovia, Wall Street, Wells Fargo
- Facing backlash, AIG won’t join suit against U.S. (USA Today/AP, Jan 9, 2013):
NEW YORK — Facing a certain backlash from Washington and beyond, American International Group won’t be joining a shareholder lawsuit against the U.S. government.
AIG was legally obligated to consider joining the lawsuit being brought against the government by former AIG Chief Executive Maurice Greenberg, who claims that the terms of the $182 billion bailout weren’t fair to AIG shareholders.
The prospect of AIG joining the lawsuit had already triggered outrage. A congressman from Vermont issued a statement telling AIG: “Don’t even think about it.”
Tags: AIG, Bailout, Economy, Global News, Government, Politics, U.S.
- AIG Considers Suing US Over US Bailout Of AIG (ZeroHedge, Jan 8, 2013):
Sometimes you just have to laugh – or you will cry. In what could well have been Tuesday Humor if it wasn’t so real, the AIG board (fulfilling its shareholder fiduciary duty) is considering joining Hank Greenberg’s suit against the government over the cruel-and-unusual bailout that saved the company. The $25bn lawsuit, as NY Times reports, based not on the basis that help was needed but that the onerous nature “taking what became a 92% stake in the company with high interest rates and funneling billions to the insurer’s Wall Street clients” deprived shareholders of tens of billions of dollars and violated the Fifth Amendment (prohibiting the taking of private property for “public use, without just compensation”). The ‘audacious display of ingratitude’ comes weeks after the firm has repaid the $182 billion bailout funneled to it and its clients by an overly generous Treasury. The firm has asked for 16 million pages of government documentation, this “slap in the face of the government” portends a question of whether the government will sue The Fed for enabling the recovery that strengthened Greenberg’s case that the bailout was so harsh. Happy retirement Tim Geithner.
- Lawmakers outraged after AIG announces potential suit against US over bailout (FOX News, Jan 9, 2013):
As American International Group Inc. weighs whether to join a lawsuit against the government that spent $182 billion to save it from collapse, U.S. lawmakers have a message for the insurance behemoth: “Don’t even think about it.”
In a letter to AIG Chairman Robert Miller, U.S. Reps. Peter Welch, D-Vt., and Michael Capuano, D-Mass., characterized the insurer as the “poster child” for Wall Street greed, fiscal mismanagement and executive bonuses.
“Now, AIG apparently seeks to become the poster company for corporate ingratitude and chutzpah,” the letter read. “Taxpayers are still furious that they rescued a company whose own conduct brought it down. Don’t rub salt in the wounds with yet another reckless decision that is on par with the reckless decision that led to the bailout in the first place.”
- Marc Faber: “Paul Krugman Should Go And Live In North Korea” (ZeroHedge, Dec 13, 2012):
If there is one thing better than Marc Faber providing a free, must-watch (and listen) 50 minute lecture on virtually everything that has transpired in the end days of modern capitalism, starting with who caused it, adjustable rate mortgages, leverage, why did the Fed let Lehman fail, why was AIG bailed out, quantitative easing, Operation Twist, where the interest on the debt is going, which bubbles he is most concerned about, a discussion of gold and silver, and culminating with his views on a world reserve currency, is him saying the following: “The views of the Keynesians like Mr. Krugman is that the fiscal deficits are far too small. One of the problems of the crisis is that it was caused by government intervention with fiscal and monetary measures. Now they tells us we didn’t intervene enough. If they really believe that they should go and live in North Korea where you have a communist system. There the government intervenes into every aspect of the economy. And look at the economic performance of North Korea.” Priceless.
50 minutes of Faberian bliss:
Tags: AIG, Alan Greenspan, Ben Bernanke, Bonds, Bubble, Collapse, Debt, Dollar, Economy, Fannie Mae, Fed, Federal Reserve, Freddie Mac, Global News, Government, Lehman Brothers, LTCM, Marc Faber, Mortgage crisis, Mortgages, Operation Twist, Paul Krugman, Politics, Quantitative Easing, Stock Market, U.S.
ROFL!
- A.I.G. Is Now Worried About Bad P.R. — for Policyholders (New York Times, Oct. 11, 2011):
Insurance providers are constantly coming up with new products to sell to policyholders. But the American International Group has hit upon one of the more unusual new services we’ve heard of in some time: reputation insurance.
Chartis, A.I.G.’s property and casualty insurance arm, said Tuesday that it would begin selling something called ReputationGuard. Created by Chartis’s executive liability team, it would give policyholders access to “a select panel” of experts at the public relations firms Burson-Marsteller and Porter Novelli to protect against negative publicity.
Tags: AIG, Economy, Global News, insurance
Recommended ‘extensive roundup’ here:
- Full-Blown Civil War Erupts On Wall Street: As Reality Finally Hits The Financial Elite, They Start Turning On Each Other (AmpedStatus, Sep 3, 2011):
Finally, after trillions in fraudulent activity, trillions in bailouts, trillions in printed money, billions in political bribing and billions in bonuses, the criminal cartel members on Wall Street are beginning to get what they deserve. As the Eurozone is coming apart at the seams and as the US economy grinds to a halt, the financial elite are starting to turn on each other. The lawsuits are piling up fast. Here’s an extensive roundup:
…
Tags: AIG, Bank of America, Banking, Economy, FDIC, Fed, Federal Reserve, Financial Crisis, Global News, Goldman Sachs, JPMorgan, Mortgage crisis, Mortgages, Stock Market, Wall Street, Wells Fargo
Demand and supply certainly matter. But there’s another reason why food across the world has become so expensive: Wall Street greed.
It took the brilliant minds of Goldman Sachs to realize the simple truth that nothing is more valuable than our daily bread. And where there’s value, there’s money to be made. In 1991, Goldman bankers, led by their prescient president Gary Cohn, came up with a new kind of investment product, a derivative that tracked 24 raw materials, from precious metals and energy to coffee, cocoa, cattle, corn, hogs, soy, and wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known henceforth as the Goldman Sachs Commodity Index (GSCI).
Tags: Agriculture, AIG, Banking, Barclays, Bear Stearns, Commodities, Derivatives, Derivatives market, Deutsche Bank, Economy, Financial Crisis, Food, Global News, Goldman Sachs, Inflation, JP Morgan Chase, Lehman Brothers, PIMCO, Wall Street
“When a country embarks on (record) deficit financing (Obamanomics) and inflationism (Quantitative easing) you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”
- Ron Paul
The other 93% will be destroyed in the coming greatest financial collapse. (1% will get richer.)
This is the Greatest Depression.
Wall Street at least temporarily relieved of the burden of having to buy Treasuries & Agency bonds, is looking at the jump in oil prices as nothing more than an irritant to their plans for a higher market. Bill Dudley of the NY Fed, a most powerful member, continues to make a vigorous defense of Federal Reserve policies. He, and a few other Fed participants, and Chairman Bernanke believe liquidity is the key for solving problems. That is not only in the realm of debt purchases, but in the relief it brings to Wall Street and banking. It relieves them of the responsibility of having to make those purchases to assist the Fed. Those funds can then be directed toward other investments, such as la liquidity-driven stock market rally. The correlation between the movements in the Fed balance sheet and market can be traced to 85% of market movement for the past 2-1/2 years. An interesting result of Fed manipulative policy is low level of short interest during this period. Most of the professional market players knew the market was headed higher, because they knew such overwhelming liquidity injections would have to take it higher.
They also knew that the Fed had to keep the wealth affect going, because the market was the only generator of wealth left, as the bond market bubble would be broken eventually. The Fed has engineered a market recovery and Wall Street knew what they were up too. QE1 saved the financial community and QE2 saved the government debt structure at least temporarily. The wealth effect has been saved temporarily as well. The public has been left with a pile of crumbs as they struggle for survival. Unemployment has improved ever so slightly and now we have a new problem to increase the suffering and that is much higher oil prices.
Tags: AIG, Banking, Barack Obama, Ben Bernanke, Debt, Depression, Dollar, Economy, Fed, Federal Reserve, Government, Great Depression, Inflation, Obama administration, Politics, Society, U.S., Wall Street
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