Infinite Unknown

Local governments seeking money for roads, schools and a host of other projects are finding it difficult to secure financing, leading some to put those projects on hold.

The demand from investors for municipal bonds has dropped off a cliff in the past couple of weeks, sending interest rates higher and making it more expensive for governments and their taxpayers to borrow. As a result, some local governments are pulling out of planned bond offerings, hoping market conditions will stabilize before they need their money.

“If you don’t have to have the money now, there’s probably a better time to issue,” said Toby Morris, a vice president of public finance for Northland Securities in Pierre. Northland underwrites bond issues and serves as a financial adviser to local governments.

On Tuesday, Massachusetts delayed the sale of $750 million in bonds, becoming the latest big-name borrower in municipal finance to put off a sale. Even small issuers in the Midwest are rethinking bond offerings.

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Tags: bonds, Economy, Government, Politics, taxpayers, U.S.

Sept. 15 (Bloomberg) — Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.

The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarfs WorldCom Inc.’s insolvency in 2002 and Drexel Burnham Lambert’s failure in 1990.

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Tags: bank failure, bankruptcy, Banks, Barclays, Bear Stearns, bonds, Citigroup, Credit Crisis, credit crunch, Economy, Fed, Federal Reserve, Government, Henry Paulson, Lehman Brothers, Merrill Lynch, mortgage crisis, Mortgages, Stock Market, taxpayers, Treasury, U.K., U.S., Wall Street

With yesterday’s announcement of the most massive federal bailout of all time, it’s now official: Fannie Mae and Freddie Mac, the two largest mortgage lenders on Earth, are bankrupt.

Some Washington bigwigs and bureaucrats will inevitably try to spin it. They’ll avoid the “b” word with vengeance. They’ll push the “c” word (conservatorship) with passion. And in the newspeak of 21st century bailouts, they’ll tell you “it all depends on what the definition of solvency is.”

The truth: Without their accounting smoke and mirrors, Fannie and Freddie have no capital. The government is seizing control of their operations. Their chief executives are getting fired. Common shareholders will be virtually wiped out. Preferred shareholders will get pennies. If that’s not wholesale bankruptcy, what is?

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Tags: bailout, bankruptcy, Bear Stearns, bonds, Constitution, Credit Crisis, credit crunch, debt, Depression, Economy, Fannie Mae, financial crisis, Foreclosures, Freddie Mac, Government, Henry Paulson, mortgage crisis, Mortgages, Politics, Recession, Stock Market, Treasury, U.S., Wall Street

DON’T CRY FOR ME ARGENTINA SAVE YOUR TEARS FOR YOURSELF - While bankers do control the issuance of credit, they cannot control themselves. Bankers are the fatal flaw in their deviously opaque system that has substituted credit for money and debt for savings. The bankers have spread their credit-based system across the world by catering to basic human needs and ambition and greed; and while human needs can be satisfied, ambition and greed cannot-and the bankers’ least of all.

I have a bad feeling about what’s about to happen. The Great Depression is the closest that comes to mind. I, like most, was not alive during the 1930s when it happened. Nonetheless, what once was feared in private is now being discussed in public. It’s going to be bad. It’s going to make high school seem like fun.

THE UNITED STATES OF AMERICA THE NEXT ARGENTINA

This Time is Different: A Panoramic View of Eight Centuries of Financial Crises by University of Maryland‘s Carmen Reinhart and Harvard’s Kenneth Rogoff makes for perfect reading when flying between the US and Argentina.

There is perhaps no better analysis than Reinhart and Rogoff’s on the history of sovereign defaults; and, as such, Reinhart and Rogoff’s paper was ideal reading material when traveling between the US and Argentina , for the sovereign defaults that happened in the past to Argentina will soon be happening to the US .

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Tags: Banks, Bechtel, Ben Bernanke, bonds, China, CIA, Credit Crisis, debt, Depression, Economy, Fed, Federal Reserve, Great Depression, John Perkins, NSA, Politics, Robert Zoellick, Stock Market, Treasury, U.S., Wall Street, World Bank

Aug. 26 (Bloomberg) — Merrill Lynch & Co., Wachovia Corp., Lehman Brothers Holdings Inc. and the rest of the U.S. finance industry are about to find out how expensive credit has become.

Banks, securities firms and lenders have a record $871 billion of bonds maturing through 2009, according to JPMorgan Chase & Co., just as yields are at their most punitive compared with Treasuries. The increase in yields may cost them as much as $23 billion more in annual interest versus a year ago based on Merrill Lynch index data.

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Tags: Bank of America, Banks, Bloomberg, bonds, Credit Crisis, Economy, Fed, Federal Reserve, Lehman Brothers, Merrill Lynch, mortgage crisis, U.S., Wachovia

By Bob Chapman

The plan for an economic takedown, the results of rampant market speculations, insiders picking up assets for pennies on the dollar, the coming hyperinflation, the credit crunch, collapse of the dollar carry trade, suppression of metals prices, American meddling in Georgia

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Tags: bailout, bonds, China, Commodities, crash, Credit Crisis, credit crunch, Depression, Dollar, ECB, Economy, euro, Fannie Mae, Fed, Federal Reserve, financial crisis, Foreclosures, Franklin Delano Roosevelt, Freddie Mac, GDP, Georgia, Gold, Government, Great Depression, hyperinflation, Illuminati, Inflation, M3 money, Meltdown, Military, Mint, mortgage crisis, Mortgages, NATO, New World Order, Oil, OPEC, Politics, Recession, Silver, Stock Market, taxpayers, U.S., U.S. Mint

Something is going to break, and soon. Banks are insolvent and failing by the hundreds if not thousands. Hedge funds are on the edge of oblivion. Only a tiny percentage of toxic waste losses in real estate and other asset classes of collateral, which will eventually amount to over $1.4 trillion in the US alone, has to date been recognized by the lying bankster fraudsters. Bonds are producing negative rates of return even based on ludicrously understated official rates of inflation (until this month, when we finally got some data bordering on the truth).

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Tags: bank failure, bankruptcy, Banks, Ben Bernanke, bonds, bubble, Constitution, crash, Credit Crisis, Depression, Economy, Facism, Fannie Mae, Fed, Federal Reserve, financial crisis, financial system, Freddie Mac, Gestapo, Gold, Government, hedge funds, Henry Paulson, hyperinflation, Inflation, Meltdown, Military, mortgage crisis, Mortgages, Nazis, Politics, Silver, U.S.

As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government?

“People seem to think the government has money,” said former U.S. Comptroller General David Walker. “The government doesn’t have any money.”

A rare consensus has developed across the political spectrum that the government’s own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office.

To put that number in human terms, the debt has reached $455,000 per U.S. household. As that debt grows, the United States increasingly relies on foreigners, including China and Middle East oil producers, for financing.

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Tags: bonds, Bush administration, China, debt, Dollar, Economy, George Bush, Government, healthcare, Inflation, Middle East, Politics, Recession, Social Security, Treasury, U.S.

Related article: - Big Traders Dive Into Dark Pools

We can almost hear that ominous “Jaws” theme music in the background and can see that huge dorsal fin as it slices threateningly through the water - knowing full well that the real terror is hidden beneath the water’s surface.

But this time around, it’s not a “Great White” that’s sparking our fears; it’s a well-capitalized and broadly based series of secret stock exchanges known as “Dark Pools of Liquidity,” “Dark Liquidity,” or just “Dark Pools.”

Most investors have never even heard the term - and are truly shocked to discover these “off-the-books” trading networks actually exist.

But to Wall Street insiders looking to anonymously move billions of dollars in stocks, bonds, and other investment instruments, dark pools are de rigueur - especially when you’re an institutional trader who doesn’t want to reveal your intentions or your actions to the “rest” of the market, until after the fact when the orders are “printed.”

And that makes these dark pools of capital highly problematic when it comes transparency: There is literally none in most pools and only limited visibility in others.

Dark Pools: From Trading Haven to Heavyweight

Dark Pools are electronic “crossing networks” that offer institutional investors many of the same benefits associated with making trades on the stock exchanges’ public limit order books - without tipping their hands to others, meaning publicly quoted prices aren’t affected. This is the capital markets’ version of a godsend - especially for traders who desire to move large blocks of shares without the public investors ever knowing.

Some examples of so-called crossing networks include Liquidnet Inc., Pipeline, the Posit unit of Investment Technology Group (ITG), or the SIGMA X unit of Goldman Sachs Group Inc. (GS).

In an era in which “secret” transactions contributed to what’s shaping up to be the largest credit crisis in history, you’d think that any mechanism that allows insiders to trade in complete secrecy and with total anonymity would be scrutinized more closely than a Roger Clemens vitamin shot. But that’s not the case with Dark Pools.

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Tags: bonds, corporations, Credit Suisse, Dark Pools, Dollar, Economy, Goldman Sachs, JPMorgan, Morgan Stanley, Nasdaq, NYSE, Stock Market, U.S., UBS, Wall Street, Wall Street Journal

Nothing for Families and Retirees

If the move to a Unitary Executive of unfettered presidential power frightens you, America’s radical right turn to Unitary Finance should compound your fears–and your debts as well. The financial events of the last two weeks of March 2008 demonstrate that the “economic royalists” and “money changers” whom Franklin Delano Roosevelt (FDR) drove from the temple of finance have returned to mismanage our economy into dire straights of unprecedented risk–debt creation, euphemized as “leveraging” and “wealth creation.”

The few checks and balances that remain in the way of the financial sector’s increasingly centralized planning, especially at the state level, are being swept aside under the guise of “saving the system.” Few Wall Street beneficiaries who use this phrase explain just what the system is. For starters, its political managers are industry lobbies appointed to high managerial and planning positions in the public agencies that are supposed to regulate these industries. Their idea of financial planning is to put a trillion dollars in government agency funds and credit guarantees at risk. This agency funding was supposed to be used to help average American families obtain housing and health care, and to protect their savings and provide for their retirement. Instead, it is being mobilized to support the economy’s bankers and financial managers. Indeed, the past few weeks have seen seemingly trillions of dollars committed for war making and bank support.

The banking system’s free creation of credit, doubling each five years or so for the economy at large, threatens to culminate in debt peonage for many American families and also for industry and for state and local governments. The economic surplus is being quickly absorbed by a combination of debt service and government bailouts for creditors whose Ponzi schemes are collapsing right and left, from residential to commercial real estate and corporate takeover loans to foreign bubble-economy credit.

This is the context in which to view the past few weeks’ financial turmoil surrounding Bear Stearns, JPMorgan/Chase and the rapidly changing debt landscape. “The system” that the Treasury, Federal Reserve and the New Deal agencies captured by the Bush Administration is trying to save is an economy-wide Ponzi scheme. By that I mean that the business plan is for creditors to lend debtors enough money for them to pay the interest costs so as to keep current on their loans.

Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World Dominance Continue reading »

Tags: bailout, banking system, Bear Stearns, bonds, Bush administration, Dollar, Fannie Mae, Federal Reserve, finance, Franklin Delano Roosevelt, Freddie Mac, Gamblers, Goldman Sachs, health insurance, Housing and Urban Development Agency, HUD, Inflation, insolvency, JPMorgan, Michael Hudson, Mortgages, OFHEO, Ponzi, real estate, rescue, Social Security, stocks, Treasury, Trillion, Unitary, Wall Street