Feb 12

12/02/2016 SÖDERTÖRN, Sweden – 18 years for honour killing

Zirdest Edil, 53, beat his wife for wearing a sleeveless dress then later murdered her, mutilating and stabbing her with a knife in what has been called an “honour killing” by the prosecutor.

The court heard the wife had wanted a divorce from her abusive husband. The sleeveless dress was found cut up at the scene of the murder, and an academic testified the mutilation of the body bore hallmarks of having been a ritualised honour killing. Mr. Edil will serve 18 years, reports Aftonbladet.

Source

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Sep 09

Baghdadi Mossad Trained
Source

It Will Cost Taxpayers $5 Billion To Help Obama Create An ISIS Strategy (ZeroHedge, Sep 8, 2014):

We can hear the narrative now… how can Congress turn down President Obama’s demands for $5 billion to pay for a ‘counter-terrorism’ fund that could be used to support operations against Islamic State targets in Iraq and Syria… if they do, are they not supporting terrorism? As The Hill reports, White House press secretary Josh Earnest floated the $5 billion counterterrorism fund as something that “would strengthen the hand of this president and future presidents for dealing with urgent situations like this.” We await Wednesday night’s unveiling of the long-awaited strategy…

As The Hill reports,

White House press secretary Josh Earnest floated the $5 billion counterterrorism fund as something that “would strengthen the hand of this president and future presidents for dealing with urgent situations like this.”

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Mar 28

Why does the American government consistently fail to foresee the future results of its own actions?

Because it is incompetent.


My take on that is, that it is impossible to be that much incompetent! This is an ‘intentionally incompetent’ elite puppet government that is looting the taxpayer until there is nothing left.

The government is ‘channeling’ taxpayer money through their friends on Wall Street into the hands of the elite behind the scenes (that control the US government, the Federal Reserve, Wall Street and the media), thereby bankrupting America and destroying the US dollar.

This is a controlled demolition.


It is managing the financial crisis Wile E Coyote style.


Added: 25. September 2008

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Dec 01

Looting the taxpayer again!

There is no recovery.

See also:

US Treasury Report: Banks Are Cutting Back on Small Business Loans, $10 Billion Evaporates

The Federal Reserve Doesn’t Want Banks to Increase Lending, Because of Inflation

This is the Greatest Depression.


Angela Merkel alarmed by worsening credit crisis

angela-merkel
German Chancellor Angela Merkel: fears of new crisis Photo: EPA

“We are in a very critical situation,” said Chancellor Angela Merkel in her weekly radio address. “We are going to discuss with leaders of the financial institutions what can be done to head off a credit crunch.”

The move comes days after the Bundesbank revealed that German banks face a further €90bn (£82bn) of likely write-downs over the next year.

Leaders of the new coalition are to meet industrialists and bankers tomorrow to thrash out an emergency plan. The proposals include a €10bn scheme to purchase toxic securities from banks. The idea is anathema in Germany and faces stiff opposition from Mrs Merkel’s Bavarian and liberal partners.

The renewed sense urgency follows a flurry of warnings from economists and business groups over the risks of a credit contraction.

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Oct 27

And this is the Greatest Depression.


moodys-logo

NEW YORK (Reuters) – The rate of loan charge-offs by major U.S. banks has exceeded those seen in the early years of the Great Depression as the credit crisis continues to take a toll, Moody’s Investors Service said on Monday.

Bank charge-offs — loans written off as uncollectable — have reached $116 billion year to date, or 2.9 percent of outstanding loans on an annualized basis, Moody’s said in a report. By comparison, bank charge-offs were about 2.25 percent in 1932, the third year of the Great Depression, Moody’s said.

Charge-offs climbed to $45 billion in the third quarter from $40 billion in the second quarter and $31 billion in the first, Moody’s said.

On an annualized basis, charge-offs were about 3.4 percent of outstanding loans in the third quarter, matching the Great Depression peak in 1934, Moody’s said.

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Oct 11

“If the Fed continues to apply monetary stimulus and subsidy into this system, without a significant reform, the dollar will eventually “break” and the real economy will temporarily collapse. This will result in the mother of all stagflation.”

In my opinion the US dollar will collapse, the real economy will collapse, the stock market will collapse, but not only temporarily, unless you see time from the perspective of an oak tree.

Stagflation would be great. It rather looks like a hyperinflationary depression to me.

Let’s see.

German miracle in the US?!:

“The traditional solution has been a military conflict, which stifles dissent against the government while generating artificial demand sufficient to energize the productive economy. It is a means of exporting your social misery, official corruption, and fiscal irresponsibility to another, weaker people.”

“One only has to look at the “German miracle” of the 1930’s to see this progression from artificial stimulus, to domestic seizure of assets, to scapegoating and aggressive wars of acquisition, as described above. But this progress out of economic depression had made Hitler and Mussolini the darlings of Wall Street and the international financiers. Indeed, Time Magazine had even named Hitler their “Man of the Year” for this economic miracle, even though it was a fraudulent house of cards.”

Maybe that is what Obama’s  ‘change’ is all about.

We are living in interesting times. That’s for sure.


As part of their program of ‘quantitative easing’ which is another name for currency devaluation through extraordinary expansion of the monetary base, the Fed has very obviously created an inflationary bubble in the US equity market.

(Click on images to enlarge them)

monetarybase

Why has this happened? Because with a monetary expansion intended to help cure an credit bubble crisis that is not accompanied by significant financial market reform, systemic rebalancing, and government programs to cure and correct past abuses of the productive economy through financial engineering, the hot money given by the Fed and Treasury to the banking system will NOT flow into the real economy, but instead will seek high beta returns in financial assets.

price-earnings-ratio

Why lend to the real economy when one can achieve guaranteed returns from the Fed, and much greater returns in the speculative markets if one has the right ‘connections?’

bankcredit

The monetary stimulus of the Fed and the Treasury to help the economy is similar to relief aid sent to a suffering Third World country. It is intercepted and seized by a despotic regime and allocated to its local warlords, with very little going to help the people.

price-earnings-ratio-2

By far this presents the most compelling case for a deflationary episode. As the money that is created flows into financial assets, it is ‘taxed’ by Wall Street which takes a disproportionately large share in the form of fees and bonuses, and what are likely to be extra-legal trading profits.

If the monetary stimulus is subsequently dissipated as the asset bubble collapses, except that which remains in the hands of the few, it leaves the real economy in a relatively poorer condition to produce real savings and wealth than it had been before. This is because the outsized financial sector continues to sap the vitality from the productive economy, to drag it down, to drain it of needed attention and policy focus.

At the heart of it, quantitative easing that is not part of an overall program to reform, regulate, and renew the system to change and correct the elements that caused the crisis in the first place, is nothing more than a Ponzi scheme. The optimal time to reform the system was with the collapse of LTCM, and prior to the final repeal of Glass-Steagall, and the raging FIRE sector creating serial bubbles.

These injections of monetary stimulus to maintain a false equilibrium is in reality creating an increasingly unsustainable and unstable monetary disequilibrium within the productive economy. As the real economy contracts, the amount of money supply that the economy can sustain without triggering a monetary inflation decreases, and in a nonlinear manner. This is because the money multiplier does not ‘work’ the same in reverse, owing to the ability of private individuals and corporations to default on debt.

Ironically, with each iteration of this stimulus and seizure of wealth, the dollar becomes progressively weaker because there is a smaller productive economy to support it, even if there are less dollars, despite the nominal gains in GDP which are an accounting illusion. This has been further enabled by the dollar’s status as reserve currency backed by nothing since 1971, which has created an enormous overhang of dollars in the hands of other nations.

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Aug 14

Must-read.

See also RBS chief credit strategist issues red alert on global stock markets


ben-bernanke
Bernanke has pulled out all the stops.

Credit is not flowing. In fact, credit is contracting. That means things aren’t getting better; they’re getting worse. When credit contracts in a consumer-driven economy, bad things happen. Business investment drops, unemployment soars, earnings plunge, and GDP shrinks. The Fed has spent more than a trillion dollars trying to get consumers to start borrowing again, but without success. The country’s credit engines are grinding to a halt.

Bernanke has increased excess reserves in the banking system by $800 billion, but lending is still slow. The banks are hoarding capital in order to deal with the losses from toxic assets, non performing loans, and a $3.5 trillion commercial real estate bubble that’s following housing into the toilet. That’s why the rate of bank failures is accelerating. 2010 will be even worse; the list is growing. It’s a bloodbath.

The standards for conventional loans have gotten tougher while the pool of qualified credit-worthy borrowers has shrunk. That means less credit flowing into the system. The shadow banking system has been hobbled by the freeze in securitization and only provides a trifling portion of the credit needed to grow the economy. Bernanke’s initiatives haven’t made a bit of difference. Credit continues to shrivel.

The S&P 500 is up 50 percent from its March lows. The financials, retail, materials and industrials are leading the pack. It’s a “Green Shoots” Bear market rally fueled by the Fed’s Quantitative Easing (QE) which is forcing liquidity into the financial system and lifting equities. The same thing happened during the Great Depression. Stocks surged after 1929. Then the prevailing trend took hold and dragged the Dow down 89 percent from its earlier highs. The S&P’s March lows will be tested before the recession is over. Systemwide deleveraging is ongoing. That won’t change.

No one is fooled by the fireworks on Wall Street. Consumer confidence continues to plummet. Everyone knows things are bad. Everyone knows the media is lying. Credit is contracting; the economy’s life’s blood has slowed to a trickle. The economy is headed for a hard landing.

Bernanke has pulled out all the stops. He’s lowered interest rates to zero, backstopped the entire financial system with $13 trillion, propped up insolvent financial institutions and monetized $1 trillion in mortgage-backed securities and US sovereign debt. Nothing has worked. Wages are falling, banks are cutting lines of credit, retirement savings have been slashed in half, and home equity losses continue to mount. Living standards can no longer be bandaged together with VISA or Diners Club cards. Household spending has to fit within one’s salary. That’s why retail, travel, home improvement, luxury items and hotels are all down double-digits. The easy money has dried up.

According to Bloomberg:

“Borrowing by U.S. consumers dropped in June for the fifth straight month as the unemployment rate rose, getting loans remained difficult and households put off major purchases. Consumer credit fell $10.3 billion, or 4.92 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $5.38 billion in May, more than previously estimated. The series of declines is the longest since 1991.

A jobless rate near the highest in 26 years, stagnant wages and falling home values mean consumer spending… will take time to recover even as the recession eases. Incomes fell the most in four years in June as one-time transfer payments from the Obama administration’s stimulus plan dried up, and unemployment is forecast to exceed 10 percent next year before retreating.” (Bloomberg)

What a mess. The Fed has assumed near-dictatorial powers to fight a monster of its own making, and achieved nothing. The real economy is still dead in the water. Bernanke is not getting any traction from his zero-percent interest rates. His monetization program (QE) is just scaring off foreign creditors. On Friday, Marketwatch reported:

“The Federal Reserve will probably allow its $300 billion Treasury-buying program to end over the next six weeks as signs of a housing recovery prompt the central bank to unwind one its most aggressive and unusual interventions into financial markets, big bond dealers say.”

Right. Does anyone believe the housing market is recovering? If so, please check out this chart and keep in mind that, in the first 6 months of 2009, there have already been 1.9 million foreclosures.

delinquencies-and-foreclosures

The Fed is abandoning the printing presses (presumably) because China told Geithner to stop printing money or they’d sell their US Treasuries. It’s a wake-up call to Bernanke that the power is shifting from Washington to Beijing.

That puts Bernanke in a pickle. If he stops printing; interest rates will skyrocket, stocks will crash and housing prices will tumble. But if he continues QE, China will dump their Treasuries and the greenback will vanish in a poof of smoke. Either way, the malaise in the credit markets will persist and personal consumption will continue to sputter.

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Aug 08

LONDON — Company liquidations and individual insolvencies in England and Wales soared to record levels in the second quarter as the economy was throttled by recession and the global credit crisis, data from the government’s Insolvency Service showed Friday.

There were 33,073 individual insolvencies in the second quarter on a nonseasonally adjusted basis, the highest level since records began in 1960. That compared with 30,253 in the first quarter of this year and marked a 27.4% increase from the second quarter of last year.

Company liquidations totaled 5,055 on a seasonally adjusted basis, the highest level since that series began in 1998. That was 2.9% above the total seen in the first three months of this year and represented an increase of 39.1% from the second quarter of last year.

Andrew MacCallum, managing director at restructuring and turnaround firm Alvarez and Marsal, said companies had survived the past year by significantly cutting costs, but many were now exhausted financially just as some positive signs (Where? All those positive signs are brought to you by ‘intentional misinterpretation’ of statistical data.) on the economy were emerging.

“More than five thousand companies may have gone into administration in the last quarter, but we can expect to see that figure exceeded in every quarter until at least the end of 2010,” he said in a note. “Credit is still tight and many businesses are loaded with debt that they can’t service.”

The breakdown of the figures showed there were 1,457 compulsory company liquidations, 6.8% less than in the first quarter but 8.7% more than in the second quarter of last year.

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Jul 05

A compilation of Ben Bernanke’s foresight and insight into the economy.

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Jun 12

bank-of-england-2
A pedestrian walks past the Bank of England in London’s financial district, in London, U.K., on Jan. 8, 2009. Photographer: Chris Ratcliffe/Bloomberg News

June 12 (Bloomberg) — European governments have approved $5.3 trillion of aid, more than the annual gross domestic product of Germany, to support banks during the credit crunch, according to a European Union document.

The U.K. pledged 781.2 billion euros ($1.1 trillion) to restore confidence in its lenders, the most of any of the 27 EU members, according to a May 26 document prepared by officials from the European Commission, the European Central Bank and member states and obtained by Bloomberg News. Denmark, where 13 of the country’s 140 banks were bailed out by the central bank or bought by rivals last year, committed 593.9 billion euros.

The measures, designed to save banks and revive economic growth, surpass Germany’s $3.3 trillion economy, the region’s biggest. They also helped to widen the Euro area’s budget deficit to the most in three years in 2008. The commission, the EU’s executive arm, is seeking to create the first EU-wide agencies with rule-making powers to monitor risk in the economy after the crisis led to $460 billion of losses and writedowns across the continent, according to data compiled by Bloomberg.

“The operating environment for banks is likely to remain challenging, in particular in respect of credit losses linked to their loan portfolios,” according to the document, produced by the EU’s Economic and Financial Committee. The draft document, partially entitled “the effectiveness of financial support measures,” will be debated at the next meeting of EU leaders on June 18-19 in Brussels.

Government Pledges

EU governments approved about 311.4 billion euros for capital injections, 2.92 trillion euros for bank liability guarantees, 33 billion euros for relief of impaired assets and 505.6 billion euros for liquidity and bank funding support, a total of 3.77 trillion euros, the document shows.

The U.S. government and the Federal Reserve had spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, as of March 31.

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Jun 01

us-flag

NEW YORK (Reuters) – The global financial crisis may morph into a second, equally virulent phase where borrowing costs rise again, hobbling an embryonic economic recovery, debilitating cash-strapped banks, and punishing investors all over again.

Early warnings signs of this scenario include surging government bond yields, a slumping U.S. dollar, and the fading of the bear market rally in U.S. stocks.

Related article: Black Swan Hedge Fund Makes a Big Bet on Inflation (Wall Street Journal)

Optimists hope that a fragile two-month rally in world stock markets, a rise in U.S. Treasury yields from record lows during the depths of the crisis in late 2008, and some less scary economic data all signal that a recovery is around the corner.

But gloomy analysts insist that thinking is delusional.

Once Credit Crisis Version 2.0 ramps up, foreign investors may punish the U.S. government for borrowing trillions of dollars too much by refusing to buy its debt until bond prices plunge to much cheaper levels.

The telling harbinger is benchmark Treasury note yields’ surge to six-month highs around 3.75 percent this week, as investors began to balk at the record U.S. government borrowing requirement this year.

The U.S. Treasury plans to sell about $2 trillion (1.2 billion pounds) in new debt this year to fund a $1.8 trillion fiscal deficit.

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Mar 23

CHARLOTTE, N.C. — Banks nationwide hold $41 billion in loans to directors, top executives and other insiders, a portfolio that experts say should be stripped of secrecy.

Insider lending to directors is particularly troublesome because it could cloud the judgment of people charged with protecting shareholders and overseeing bank management, the experts say.

At Charlotte-based Bank of America, those loans more than doubled last year, to $624.2 million — the biggest dollar jump in the country. The largest of them likely went to three directors or their companies. The surge came during the third quarter as credit markets froze, the government prepared to infuse banks with billions in tax dollars and the board approved the purchase of troubled Merrill Lynch.

Bank of America ranked fourth on the list of biggest insider lenders. At the top was JPMorgan of New York, which held $1.48 billion in insider loans, mostly by directors or their companies.

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Mar 14

See also: Ron Paul: Obama Foreign Policy Identical To Bush


1:51:21 – 12.03.2009
Source: Google Video

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Mar 10

(Reuters) – Prominent banking analyst Meredith Whitney warned that “credit cards are the next credit crunch,” as contracting credit lines will lower consumer spending and hurt the U.S. economy.

“Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending,” Whitney wrote in the Wall Street Journal.

She said though credit was extended “too freely over the past 15 years” and rationalization of lending is unavoidable, what needs to be avoided was “taking credit away from people who have the ability to pay their bills.”

Whitney said available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone, and she estimates over $2 trillion of credit-card lines will be cut within 2009, and $2.7 trillion by the end of 2010.

“Inevitably, credit lines will continue to be reduced across the system, but the velocity at which it is already occurring and will continue to occur will result in unintended consequences for consumer confidence, spending and the overall economy,” Whitney said.

Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon, she said.

“Lenders, regulators and politicians need to show thoughtful leadership now on this issue in order to derail what I believe will be at least a 57 percent contraction in credit-card lines,” she said.

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Feb 10

UBS on Tuesday announced the highest loss in Swiss corporate history as Europe’s biggest casualty of the credit crisis said it lost nearly SFr20bn ($17bn, €13.2bn) in 2008.

The loss, which was above market expectations, was swollen by a SFr8.10bn loss in the fourth quarter, and came in spite of a surprise SFr1.73bn tax benefit and a reclassification of assets that allowed the bank to avoid recognising a further trading loss of about SFr3bn.

UBS, which has come under severe political pressure in Switzerland after a government bail out last October, said it was slashing bonus payments. Variable compensation in the investment bank, the heart of its problems, will be 95 per cent lower than the previous year, and 80 per cent lower for the group overall. Total bonuses paid will fall to SFr2.2bn.

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Feb 03


Added:
Source: YouTube

Flashback:
Rep. Marcy Kaptur warns: There are domestic enemies to the Republic
(!)
Rep. Michael Burgess: “We Are Under Martial Law” (!)

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Jan 28

A dozen senior bankers whose influence has shaped the financial world gave themselves pay awards valued at more than £1bn before the credit crunch spectacularly exposed the fragility of the profits they appeared to have secured for shareholders.

Although seemingly profitable during the boom, these same banks have since revealed losses, write-downs and emergency capital injections totalling more than £300bn.

In Britain, they include Barclays executives John Varley and Bob Diamond, who between them took more than £50m of awards in the past four years.

But the biggest winners were on Wall Street where Stan O’Neal – who was pushed out of Merrill Lynch in 2007 after shock losses from sub-prime mortgage investments made him one of the first high-profile casualties of the crisis – received pay, bonuses, stock and options totalling $279m (£196m) for less than nine years’ service. This is the highest amount for any Wall St executive in the Guardian’s study.

The figures are based on annual proxy statement filings in the case of US bank executives. These include a projection by the banks of the likely future value of stock and option awards. If such awards have not been cashed in they will have depreciated in value along with relevant bank share prices. Data for UK bank directors only values share-based awards that have been cashed in and therefore makes comparisons difficult.

The US bankers include Dick Fuld who presided over the collapse of Lehman Brothers – the world’s biggest ever corporate failure, which sent shockwaves throughout the global banking system last September. Fuld received annual awards totalling $191m from 1999 to 2007. The tally includes stock and options valued at the time at $111m.

Jimmy Cayne, the long-serving boss of Bear Stearns, also makes the list. Cayne received pay awards valued at $233m before Bear Stearns became the first big Wall Street investment bank to effectively fail, when it was forced to seek an emergency Federal Reserve loan in March last year.

Former US treasury secretary Hank Paulson, charged by George Bush with marshalling the $700bn taxpayer bailout efforts, had been another central Wall St figure – chairman and chief executive of Goldman Sachs – until joining the US government three years ago. Paulson’s taxpayer-funded troubled assets relief programme is in the process of handing out tens of billions of dollars each to firms including Goldmans, Morgan Stanley and Citigroup. Paulson’s pay awards from Goldmans totalled $170m over eight years.

His successor Lloyd Blankfein took home $231m over eight years. Fellow Goldman executive and later Merrill Lynch boss John Thain received $94.9m over six years, while Citigroup boss Sandy Weill and his successor Chuck Prince received $173m and $110m respectively over seven years.

Britain’s top five banks made two-year pre-tax profits of £76bn for 2006 and 2007 after credit and housing boom years combined with ever more exotic financial instruments to push their earning power to unprecedented heights.

Wednesday 28 January 2009
Simon Bowers

Source: The Guardian

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Jan 17


The emergency bail-out will total more than £100 billion

GORDON Brown will announce a further emergency bank bail-out totalling more than £100billion next week, it emerged last night.

The desperate measure, which will raise the taxpayer’s liability to more than £250billion, came as a report warned that Britain’s banks are technically insolvent.

The report, from analysts at Royal Bank of Scotland, said the credit crunch showed little signs of easing. In an indication of the extent of the problem, the report was titled Living on a Prayer.

Banks had so little cap­ital to lend, they were effectively insolvent, it said. It was a situation “not unusual” in an economic downturn, but showed little sign of abating in the coming months.

The Treasury and Downing Street refused to discuss the bail-out plan yesterday.

But details leaked out after the Prime Minister met Bank of England governor Mervyn King and Financial Services Authority chairman Lord Turner at Number 10.

Treasury sources indicated that an extra £108billion of public money will be used to guarantee loans and mortgages. Officials will be hammering out details over the weekend.

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Jan 16

China overtook Japan as America’s biggest foreign creditor in September and as of October held 652.9 billion dollars in US Treasury bonds.

So it is China who is financing the unsustainable, debt amassing lifestyle of the US by buying US Treasuries. It is China who keeps the USS Titanic afloat. Whereas Bernanke and Paulson are doing everything in their might to destroy the dollar and the US.

When it will become obvious that the Fed has created massive inflation by creating trillions of dollars out of thin air China will sell its US Treasuries and exit the dollar, which will in turn accelerate the crisis.

Bernanke and Paulson will probably blame China then again for sinking the USS Titanic, after they hit intentionally and with full force the iceberg … with China only trying to make the best of a bad job.


Jan. 16 (Bloomberg) — A Chinese central bank official attacked reported comments by U.S. Treasury Secretary Henry Paulson that China’s high savings rate helped trigger the global credit crisis.

“This view is extremely ridiculous and irresponsible and it’s ‘gangster logic,'” Zhang Jianhua, the bank’s research head, said. His comments were in an interview with the state-run Xinhua News Agency, posted on a government Web site today.

Commentaries by China’s state media this month had already accused Paulson and Federal Reserve Chairman Ben S. Bernanke of playing a “blame game” over the cause of the crisis.

Friction between the two nations includes a U.S. complaint to the World Trade Organization last month that China uses prohibited subsidies to boost exports. The U.S. also regards China’s currency, the yuan, as undervalued and a factor in global trade imbalances.

Massive savings accumulations in countries such as China helped to trigger the crisis by squeezing interest rates and pushing investors toward riskier assets, the Financial Times reported Jan. 2, quoting Paulson.

Zhang countered that U.S. policies that aggravated imbalances in that nation’s economy, which was excessively dependent on consumer spending, were a key cause. He also cited failures in corporate governance and risk management at investment banks.

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Jan 15

Absolutely hilarious …… and absolutely true.


1 of 3:

Source: YouTube

2 of 3:

Source: YouTube

3 of 3:

Source: YouTube

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Jan 11


Alistair Darling is expected to back a plan to effectively underwrite the majority of new mortgages in the UK

ALISTAIR Darling is set to back a £100bn gamble with taxpayers’ cash in a desperate bid to kick-start the struggling mortgage market. The Chancellor’s plan involves effectively underwriting the majority of new mortgages in the UK to encourage big investors to give badly needed money to lending banks.

The proposed scheme means the UK Government would guarantee mortgage bonds, where banks parcel up individual home loans and sell them to investment firms. When the system works properly, banks have a source of money to loan to customers and investors get a return.

Related articles:
Darling closes in on plan to kick-start bank lending (Times)
Downturn escalates on both sides of the Atlantic (Telegraph)

But with many investors currently reluctant to risk their money on mortgages, Darling is preparing to guarantee the value of mortgage bonds to get the cash flowing again.

The total value of new mortgages involved has been estimated as up to £100bn, leading to claims last night that the scheme poses too many risks to taxpayers while offering too few rewards. And the new measures, coming on top of a £500bn scheme to guarantee banks’ borrowing and the £12bn cut in VAT announced in October, will raise further fears over the extent of the Government’s spending in the face of the credit crunch.

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Jan 06

Remember the credit crunch? Of course, you do. We’d never seen anything like it, or so the highest financial authorities and their lapdogs in the news media told us – not in a cool, calm, and collected way, either, but in a breathless delivery that suggested imminent economic doom unless the government immediately undertook to “do something.” Which it did, of course, on a scale never before witnessed in U.S. history.

So, looking back, as people are prone to do at this time of year, we can clearly see the telltale signs of the financial disaster that struck the financial markets last autumn: the terrible credit crunch, the “frozen” credit that portended a complete economic “meltdown” unless the government took drastic measures to head it off. (The government’s spokespersons and the media’s talking heads never got straight whether the thing was very cold or very hot, as they reached for horrifying metaphors in all directions at once.)

But, wait, something is terribly wrong in the statistical record! The devastating credit crunch, the greatest threat to this country since the Russians exploded an H-bomb, the most menacing economic event since the stock-market crash of 1929, the . . . (sputter) . . . (sputter) . . . (words fail me in the face of such terrors as it evoked in the minds of government ministers and financial titans of all stripes) . . . . Well, I am rather embarrassed, on behalf of all these giants of the ruling elite, to inform you that in retrospect the Monster from Lack-of-Liquidity Lagoon doesn’t really show up as such in the most relevant statistical series.

Probably the most important measure of credit-market conditions is the amount of commercial-bank credit outstanding. These figures show that although the middle part of 2008 does stand out in the long view, it does so not by virtue of credit’s frightening contraction, but only by virtue of its hitting a six-month plateau from April through September.


Click here or on the graph to enlarge

At no time during that interval, however, did the amount of commercial-bank credit outstanding fall below the amount outstanding at the beginning of the year. In short, credit was actually ample, indeed, at an all-time high; it simply stopped growing as usual for six months, stuck at about $9.4 trillion, while one Wall Street wizard after another told NPR that “no money is moving, the credit market is completely shut down” or some such cock-and-bull story.

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Jan 04

CORPORATE BRITAIN is facing a refinancing timebomb this year as more than £50 billion of bank debt expires during the biggest credit crunch in global history.

The soaring cost of capital and the paucity of available debt financing will squeeze even blue-chip companies which need to renew or restructure existing loan facilities.

According to the ratings agency Standard & Poor’s, a £140 billion debt mountain needs to be refinanced in the UK between now and 2011. Meanwhile, a cumulative total of €1.6 trillion (£1.5 trillion) of debt rated by S&P will mature across Europe between now and then.

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Dec 27

Rising unemployment may prompt new capital raisings

The worsening economic slowdown is increasing fears that Britain’s banks will have to raise still more capital next year in a market starved of investors.

Investment bankers are preparing for a second round of capital raising by UK lenders on top of the £65bn already declared. Having rebuilt their balance sheets after toxic debt writedowns, the banks face an increasingly dire economic outlook that threatens to take ordinary loan impairments from individuals and businesses to levels not seen since the early 1990s.

Under those worst-case conditions, impairment charges at the domestic banks – Barclays, Royal Bank of Scotland and the combined Lloyds Banking Group – could hit £60bn next year, according to Credit Suisse analysts.

“There could be a second credit crunch for banks, with a whole new round of writedowns late in 2009 as the economy filters back to banks,” a senior investment banker said. “They have so far only provisioned for the credit crunch – so they will need to undertake a whole new round of capital raising.”

A trading update earlier this year from HBOS, which will be bought by Lloyds next month, made grim reading for the sector. Impairments from commercial and residential property shot up, and the bank warned of more bad news to come as unemployment, the biggest driver of bad debts, continues to rise.

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Dec 23

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December 22, 2008 Source: YouTube

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December 22, 2008 Source: YouTube

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Dec 19


Added: December 18, 2008

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Dec 12

A future out of control, bankrupt financial institutions trying to hold on, limitation on credit severely limits ability of the economy to start up again, debt totally embraces our lives, handouts a state secret, soon cash infusions wont work for banks anymore, banks hold too much toxic garbage to even know if they are solvent. We are now 17 months into a credit crisis that continues to expose the corruption and incompetence of government, banking, Wall Street and transnational corporations. The situation has not stabilized and it won’t anytime soon. All we see are sweetheart deals for elitist corporations for which American taxpayers will pay for years to come. The future of our nation is totally out of control. For the last eight years our economy has been running on something for nothing, lies and deceit. The result will be hyperinflation and then the Second Great Depression. Continue reading »

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Dec 07

As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis.

November was the worst month in the US labour market since the oil crisis of 1974, as more than 500,000 US workers were laid off, according to official figures released on Friday.

But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.

Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.

Turner says when the gap between the yield on high-risk company bonds and US Treasuries widens sharply, unemployment tends to shoot up – and current credit conditions are pointing to a doubling in the pace of layoffs, to more than a million workers a month, by spring.

‘The correlation is holding up all too well,’ he said. ‘It’s very disconcerting.’ He added that the pace of layoffs already happening in the US ‘is indicative of panic’. During the 1970s oil crisis the panic was relatively short-lived, he says. ‘But the worry now is that this will just roll on and on.’

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Dec 05

With Wall Street hemorrhaging jobs and assets, even many of the wealthiest players are retrenching. Others, like the Lehman Brothers bankers who borrowed against their millions in stock, have lost everything. Hedge-fund managers try to sell their luxury homes, while trophy wives are hocking their jewelry. The pain is being felt on St. Barth’s and at Sotheby’s, on benefit-gala committees and at the East Hampton Airport, as the world of the Big Rich collapses, its culture in shock and its values in question.


Illustrations by Barry Blitt.

A snapshot: East Hampton, late summer, a lawn party at a house on the ocean overlooking the dunes. The host is a prince of private equity known for dressing well. One of his guests is Steven Cohen, the publicity-shy billionaire whose SAC Capital, with $16 billion under management, is perhaps the most revered of the 10,000 or so hedge funds spawned by this giddily rich time. Nearby is Daniel Loeb, of Third Point, one of the better-known “activist” hedge funds, who hopes to move soon into a 10,700-square-foot, $45 million penthouse at l5 Central Park West, a Manhattan monument to the new gilded age. Gliding easily between them is art dealer Larry Gagosian, so successful at selling Bacons and Serras to Wall Street’s new titans-including to Cohen-that he now travels in his own private jet and has his own helicopter to take him to it.

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Dec 05

Dec. 4 (Bloomberg) — The classified ads in Dubai read like an obituary for a real-estate market that until a few months ago seemed immune from the global credit crisis.

A Turkish investor, who identified himself as Sebat, took out 10 bright yellow ads in the Nov. 25 edition of Gulf News, the United Arab Emirates’ biggest newspaper, with the headline: “DIRECT FROM OWNER DISTRESS SALE!!!” Sebat said he used to be able to buy four or five properties at a time and sell them the next day for a profit of as much as 5 percent.

“There is panic in the market,” said Sebat, 52, who wouldn’t give his full name because he’s juggling 60 properties.

The property bubble in the desert emirate, home to the world’s tallest building, most expensive hotel suite and largest manmade islands, is bursting as scarce credit and slumping oil prices have international investors scurrying to dump assets. That may shatter Dubai’s goal of creating a sustainable economy by building the Persian Gulf hub for finance and tourism, forcing it to depend on oil-rich neighbor Abu Dhabi for financing.

“Dubai is more precarious than it has ever been,” said Christopher Davidson, author of “Dubai: The Vulnerability of Success” (2008, Columbia University Press). “If the property industry collapses in Dubai, it will be finished. Dubai’s relative autonomy will come to an abrupt end.”

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