Sep 27

Deutsche Bank Stock Crashes Near Single-Digits As CDS Spike To Record Highs:

The “most systemically dangerous bank in the world” is in grave trouble. Despite exclamations that there is “no need for additional capital” and that “Deutsche Bank is no Lehman” investors are fleeing the bank’s assets en masse as professionals pile in to buy counterparty risk protection. With the only thing standing between bank runs and stability being the confidence of depositors, and knowing full well that everybody lies when it gets serious, one witty trader noted, “if it walks like Lehman, and talks like Lehman… it is Lehman.”

20160927_db5

 

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Sep 15

On This Day Eight Years Ago Lehman Filed For Chapter 11: There Have Been 672 Rate Cuts Since

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Apr 07

Deutsche Bank Lehman

“It’s Coming Apart At The Seams” – US Equities Plunge As Deutsche-Lehman Analog Looms

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Feb 19

You Are Here:

It’s definitely different this time…

The 2008 analog lines the current trajectory up with August 2008 right after Treasury Secretary Paulson told the world reassuringly that:

“Our economy has got very strong long-term fundamentals. And you know, your policy-makers and regulators here – we’re very vigilant.”

And we all know what happened next…

You are here S&P 500

h/t @ChrisBrady12

Could never happen again?

Continue reading »

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Feb 10

Deutsche Bank Spikes Most In 5 Years (Just Like Lehman Did):

Rumors of ECB monetization (which would be highly problematic in the new “bail-in” world) and old news of the emergency debt-buyback plan have sparked an epic ramp in Deutsche Bank’s stock this morning (+11% – the most since Oct 2011). This extreme volatility is, however, eerily reminiscent of 2007/8 when headline hockey sparked pumps and dumps on a daily basis in Lehman stock… until it was all over.

“Deutsche Bank is fixed”?

Deutsche Bank-1

Or is it?

Deutsche Bank-Lehman-Brotheres-Chart

Things are already fading…

Deutsche Bank-Stock-Chart

We suspect every bounce will be met by opportunistic selling as an inverted CDS curve has seldom if ever reverted back to life.

 

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Oct 15

Too-Big-to-Fail Banks Face Up to $870 Billion Capital Gap (Bloomberg, Oct 14, 2014):

Too big to fail is likely to prove a costly epithet for the world’s biggest banks as regulators demand they increase holdings of debt securities to cover losses should they collapse.

The shortfall facing lenders from JPMorgan Chase & Co. to HSBC Holdings Plc could be as much as $870 billion, according to estimates from AllianceBernstein Ltd., or as little as $237 billion forecast by Barclays Plc.

The range is so wide because proposals from the Basel-based Financial Stability Board outline various possibilities for the amount lenders need to have available as a portion of risk-weighted assets. With those holdings in excess of $21 trillion at the lenders most directly affected, small changes to assumptions translate into big numbers. Continue reading »

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Sep 14

Art Cashin

Art Cashin: “Things Could Theoretically Turn Into What I Call A Lehman Moment” (ZeroHedge, Sep 13, 2014):

Courtesy of Finanz und Wirtschaft, interview by Christoph Gisiger

Wall Street veteran Art Cashin does not fully trust the record levels at the stock market and draws worrisome parallels between the geopolitical tensions over Ukraine and the Cuban missile crisis.

From the assassination of President Kennedy via the stock market crash of 1987 and the Fall of the Berlin Wall through to the burst of the dotcom bubble, the terror attacks of 9/11 and the collapse of Lehman Brothers: Art Cashin has experienced all the major world events of the last half century at the floor of the New York Stock Exchange. Currently, the highly respected Wall Street veteran keeps a close eye on the geopolitical tensions in the Middle East and on the situation in Ukraine which reminds him of the Cuban missile crisis «The markets are edgy and nervous», says the Director of Floor Operations for UBS Financial Services while constantly checking the quotation board. Like many traders here, he is somewhat skeptical of the huge stock market rally that started in March 2009. «I think it is a question of the extraordinarily low interest rates», he explains. Continue reading »

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Jul 15

Prepare for collapse.


bis-bank-for-international-settlements-basel-switzerland

The Head Of ‘The Central Bank Of The World’ Warns That Another Great Financial Crisis May Be Coming (Economic Collapse, July 13, 2014):

Most people have never heard of Jaime Caruana even though he is the head of an immensely powerful organization.  He has been serving as the General Manager of the Bank for International Settlements since 2009, and he will continue in that role until 2017.  The Bank for International Settlements is a rather boring name, and very few people realize that it is at the very core of our centrally-planned global financial system.  So when Jaime Caruana speaks, people should listen.  And the fact that he recently warned that the global financial system is currently “more fragile” in many ways than it was just prior to the collapse of Lehman Brothers should set off all sorts of alarm bells.  Speaking of the financial markets, Caruana ominously declared that “it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally” and he noted that “markets can stay irrational longer than you can stay solvent”.  In other words, he is saying what I have been saying for so long.  The behavior of the financial markets has become completely divorced from economic reality, and at some point there is going to be a massive correction.

So why would the head of ‘the central bank of the world’ choose this moment to issue such a chilling warning? Continue reading »

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Jun 03

–  Is This The Top? First Quarter Corporate Profits Tumble Most Since Lehman (ZeroHedge, June 3, 2014):

As SocGen’s Albert Edwards conveniently points out, during the excitement of the downward revision of Q1 US GDP from +0.1% to -1.0% investors seem not to have noticed a $213bn, 10% annualized slump in the US Bureau of Economic Analysis’s (BEA) favored measure of whole economy profits, defined as profits from current production. Also known as economic profits, the BEA makes adjustments to remove inventory profits (IVA) and to put depreciation on an economic instead of a tax basis (CCAdj). Edwards shows the stark difference between the BEA’s calculation for post-tax headline profits (up 5.3% yoy) and economic profits (down 6.8% yoy) in the chart below. In short: the plunge in actual corporate profits in Q1 was the biggest since Lehman!

corporate profits Q1

It is not just SocGen’s bear who observes this surprising finding: Goldman is on it as well. Continue reading »

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Mar 05

Bernanke Finally Reveals, In One Word, Why The Financial System Crashed (ZeroHedge, March 4, 2014):

Now that Ben Bernanke is no longer the head of the Fed, he can finally tell the truth about what caused the financial crash. At least that’s what a packed auditorium of over 1000 people as part of the financial conference staged by National Bank of Abu Dhabi, the UAE’s largest bank, was hoping for earlier today when they paid an exorbitant amount of money to hear the former chairman talk.Bernanke confirmed as much when he said he could now speak more freely about the crisis than he could while at the Fed – “I can say whatever I want.”

So what was the reason, according to the man who was easily the most powerful person in the world for nearly a decade?

Ready?

“Overconfidence.” (no, not “weather”)

Bernanke prayer

Yup. That’s it.

The United States became “overconfident”, he said of the period before the September 2008 collapse of U.S. investment bank Lehman Brothers. That triggered a crash from which parts of the world, including the U.S. economy, have not fully recovered.

“This is going to sound very obvious but the first thing we learned is that the U.S. is not invulnerable to financial crises,” Bernanke said.

Actually what is going to sound even more obvious, is that subprime was not contained.

Continue reading »

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Oct 28

Detroit Pensioners Face Miserable 16 Cent On The Dollar Recovery (ZeroHedge, Oct 27, 2013):

If there is ever a case study about people who built up their reputation and then squandered it for first being right for all the wrong reasons, and then being wrong for the right ones, then Meredith Whitney certainly heads the list of eligible candidates. After “predicting” the great financial crisis back in 2007 by looking at some deteriorating credit trends at Citigroup, a process that many had engaged beforehand and had come to a far more dire -and just as correct – conclusion, Whitney rose to stardom for merely regurgitating a well-known meme, however since her trumpeted call was the one closest to the Lehman-Day event when it all came crashing down, it afforded her a 5 year very lucrative stint as an advisor. Said stint has now been shuttered.

The main reason for the shuttering, of course, is that in 2010 she also called an imminent “muni” cataclysm, staking her reputation once again not only on what is fundamentally obvious, but locking in a time frame: 2011. Alas, this time her “timing” luck ran out and her call was dead wrong, leading people to question her abilities, and ultimately to give up on her “advisory” services altogether. Which in some ways is a shame because Whitney was and is quite correct about the municipal default tidal wave, as Detroit and ever more municipalities have shown, and the only question is the timing.

Continue reading »

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Oct 11

–  The Biggest Banking Disconnect Since Lehman Hits A New Record (ZeroHedge, Oct 10, 2013):

As regular readers know, the biggest (and most important) disconnect in the US banking system is the divergence between commercial bank loans, which most recently amounted to $7.32 trillion, a decrease of $9 billion for the week, and are at the same the same level when Lehman filed for bankruptcy having not grown at all in all of 2013 (blue line below), and their conventionally matched liability: deposits, which increased by $60 billion in the past week to $9.63 trillion, an all time high. The spread between these two key monetary components – at least in a non-centrally planned world – which also happen to determine the velocity of money in circulation (as traditionally it is private banks that create money not the Fed as a result of loan demand) is now at a record $2.3 trillion.

Which, of course, also happens to be the amount of reserves the Fed has injected into the system (i.e., how much the Fed’s balance sheet has expanded) since the great experiment to bailout the US financial system started in September 2008, in which Ben Bernanke, and soon Janet Yellen, stepped in as the sole source of credit money. The only difference is that while the Fed is actively pumping bank deposits courtesy of the fungibility of reserves, loan are unchanged.

For those who still don’t understand the identity between Fed reserves and bank deposits, here is Manmohan Singh with the simplest explanation on the topic: Continue reading »

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Sep 15

Five Years After Lehman, BIS Ex-Chief Economist Warns “It’s Worse This Time” (ZeroHedge, Sep 15, 2013):

The froth is back. As we noted yesterday, corporate leverage has never been higher – higher now than when the Fed warned of froth, and as the BIS (following their “party’s over” rant 3 months ago) former chief economist now warns, “this looks like to me like 2007 all over again, but even worse.” The share of “leveraged loans” or extreme forms of credit risk, used by the poorest corporate borrowers, has soared to an all-time high of 45% – 10 percentage points higher than at the peak of the crisis in 2007.

As The Telegraph reports, ex-BIS Chief Economist William White exclaims, “All the previous imbalances are still there. Total public and private debt levels are 30pc higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle.”

Crucially, the BIS warns, nobody knows how far global borrowing costs will rise as the Fed tightens or “how disorderly the process might be… the challenge is to be prepared.” This means, in their view, “avoiding the tempatation to believe the market will remain liquid under stress – the illusion of liquidity.”
Continue reading »

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Jul 26

It Is Happening Again: 18 Similarities Between The Last Financial Crisis And Today (Economic Collapse, July 25, 2013):

If our leaders could have recognized the signs ahead of time, do you think that they could have prevented the financial crisis of 2008?  That is a very timely question, because so many of the warning signs that we saw just before and during the last financial crisis are popping up again.  Many of the things that are happening right now in the stock market, the bond market, the real estate market and in the overall economic data are eerily similar to what we witnessed back in 2008 and 2009.  It is almost as if we are being forced to watch some kind of a perverse replay of previous events, only this time our economy and our financial system are much weaker than they were the last time around.  So will we be able to handle a financial crash as bad as we experienced back in 2008?  What if it is even worse this time?  Considering the fact that we have been through this kind of thing before, you would think that our leaders would be feverishly trying to keep it from happening again and the American people would be rapidly preparing to weather the coming storm.  Sadly, none of that is happening.  It is almost as if they cannot even see the disaster that is staring them right in the face.  But without a doubt, disaster is coming.

The following are 18 similarities between the last financial crisis and today…

Continue reading »

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Jul 12

Gold Borrowing Costs Hit Post-Lehman High – Hong Kong Jewellers And Banks Face Supply Issues (ZeroHedge, July 10, 2013)

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Jun 27

“The Dark Side of the QE Circus” (Silver Bear Cafe, June 25, 2013):

There may come a day soon where the markets sell off if one of the whiskers in Big Ben’s beard is out of place. Or perhaps if his tie is a bit crooked. Or maybe we end up with Janet Yellen as the next puppet in charge over at the local banking cabal and we fret about her hairdo. I don’t know, but one thing that is for certain is that this central bank so wants to be loved and we are so under psychological attack with all of this QE nonsense that it isn’t even funny.

QE is the endgame. ZIRP was only the beginning. QE, or monetization (which they’ll never call it because of the negative connotations), is the heroic measure applied to an already dead system. Our system, for all intent and purposes, died in 2008. It ceased to exist. The investing, economic, and business paradigm that has existed since is drastically different than its predecessor despite all the efforts being made to convince everyone, including Humpty Dumpty, that it is in fact 2005 all over again.

Quantitative Conditioning

Now we get to the fun part of the game. This is the part where the not-so-USFed wants to give the idea that it is tapering (buzzword of the month) without actually doing so. There will be no tapering. There will be no end to QE. The goose (Americans and their willingness to continue to pile up debt) is still laying the golden eggs. And even if they make paper contracts on those golden eggs gyrate wildly in price, they still want them. The quislings on television who are gleefully bashing precious metals this morning? They want them. They want your physical metal. These folks will swim through any sewer to get that which they desire. If you don’t understand the Machiavellian nature of your enemy, then you’re in for an extremely rough ride. This is no playground. This is a battlefield (credit to Chuck Baldwin). They’re playing chess and we’re still playing Tiddly Winks.

Continue reading »

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Jun 26

For Bonds, It’s A Lehman Repeat (ZeroHedge, June 25, 2013):

There is plenty of discussion of outflows but we though the following chart was perhaps the most insightful at why this drop is different from the last few year’s BTFD corrections. As we noted here, corporate bond managers have desperately avoided selling down their cash holdings (since they know dealer liquidity cannot support broad-based selling and its an over-crowded trade) and bid for hedges in CDS markets. But it seems, given the utter collapse in the advance-decline lines for high-yield and investment-grade bonds that the liquidations have begun. While the selling in high-yield bonds is on par with the Lehman liquidationlevels, it is the collapse in investment grade bond demand that is dramatic (and worse than Lehman). It’s not like we couldn’t see it coming at some point (here) and as we warned here, What Happens Next? Simply put, stocks cannot rally in a world of surging debt finance costs.Corporate Bond Advance-Decliners lines are as liquidation-based bad as during Lehman (worse in fact for IG)…

Do Not Panic!! This is orderly…

The current decline in the high yield market, now at 30 trading days, has been the fastest since the end of the 2008 recession, with yields widening 159 bp. Only the July – October 2011 market decline had a greater ultimate magnitude than the current period.

As we noted here:

Continue reading »

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Apr 12

I Illustrate How The Irish Banking Cancer Spreads To The UK Taxpayer And Metastasizes Through US Markets! (ZeroHedge, April 12, 2013)

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Mar 21


YouTube Added: 21.03.2013

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Mar 21

Euro Official On Cyprus: “Markets Believe We Will Find A Solution, This Might Not Be The Case” (ZeroHedge, March 21, 2013):

While the market levitation courtesy of the Fed, BIS and BOJ continues unabated to give the impression that all is well, allowing empty momentum-chasing chatterboxes to say that Cyprus is not a big deal because… well, look at the market (and real traders the chance to quietly dump existing risk positions), the artificial, centrally-planned calm during the storm may be ending. The reason comes from none other than the Eurogroup, whose deputy finance ministers held a conference call last night, and whose transcript has been seen by Reuters.

Here are the highlights.

Euro zone finance officials acknowledged being “in a mess” over Cyprus during a conference call on Wednesday and discussed imposing capital controls to insulate the region from a possible collapse of the Cypriot economy.

In detailed notes of the call seen by Reuters, one official described emotions as running “very high”, making it difficult to come up with rational solutions, and referred to “open talk in regards of (Cyprus) leaving the euro zone”.

Not very confidence boosting. But then again, with confidence in Cyprus now gone, the time for damage control is long gone. Sure enough, it just goes from bad to worse: Continue reading »

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Mar 03

See also:

Why Is JPMorgan’s Gold Vault, The Largest In The World, Located Next To The New York Fed?


Did JPM’s CIO Intentionally And Maliciously Start The Margin Call Avalanche That Crushed Lehman? (ZeroHedge, March 3, 2013):

It is conventional wisdom that in the days leading to Lehman’s bankruptcy filing on the night of September 15, 2008, sheer panic and utter confusion ruled ever back- and middle-office, over concerns that a counterparty, any counterparty, but especially Lehman, would end up being “not money good“, and the result was that trigger-happy margin clerks had the potential to make or break a company, by demanding just enough variation margin that would send the notice recipient promptly into bankruptcy. It is also conventional wisdom, that it was precisely several such margin calls mostly out of JPMorgan that precipitated the Chapter 7 filing by Lehman brothers, as the firm was finally unable to mask the fact that it was terminally overlevered, and even more terminally illiquid. It is certainly conventional wisdom, that Lehman was certainly massively overlevered, holding billions of overmarked CMBS on its balance sheet, and was doing everything in its power to hold on to precious liquidity, taking every opportunity to window dress its balance sheet as far better than it truly was (Repo 105 at the end of every quarter promptly comes to mind), over fears of avoiding precisely such a margin call onslaught, where the first margin call would cascade into many, likely lethal, margin calls. Continue reading »

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Jan 10

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.

Continue reading »

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Dec 14

@Amazon.com: Big Oil & Their Bankers In The Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network



The Federal Reserve Cartel: Part IV: A Financial Parasite (Veterans Today, Dec 14, 2012):

(Excerpted from Chapter 19: Big Oil & Their Bankers…Part four of a five-part series)

United World Federalists founder James Warburg’s father was Paul Warburg, who financed Hitler with help from Brown Brothers Harriman partner Prescott Bush. [1]

Colonel Ely Garrison was a close friend of both President Teddy Roosevelt and President Woodrow Wilson.  Garrison wrote in Roosevelt, Wilson and the Federal Reserve, “Paul Warburg was the man who got the Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and opposition.  The mastermind of both plans was Baron Alfred Rothschild of London.”

Continue reading »

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Dec 14

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:


YouTube

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Nov 16

What Really Happened When Lehman Failed… and Why a Spanish Default Will Be Exponentially Worse (ZeroHedge, Nov 15, 2012)

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Sep 22

“What’s Next?”: Simon Johnson Explains The Doomsday Cycle (ZeroHedge, Sep 22, 2012):

There is a common problem underlying the economic troubles of Europe, Japan, and the US: the symbiotic relationship between politicians who heed narrow interests and the growth of a financial sector that has become increasingly opaque (Igan and Mishra 2011). Bailouts have encouraged reckless behaviour in the financial sector, which builds up further risks – and will lead to another round of shocks, collapses, and bailouts.This is what we have called the ‘doomsday cycle’ (Boone and Johnson 2010). The cycle turned in 2007-8 and was most dramatically manifest in the weeks and months that followed the fall of Lehman Brothers, the collapse of Iceland’s banks and the botched ‘rescue’ of the big three Irish financial institutions.

The consequences have included sovereign debt restructuring by Greece, as well as continuing problems – and lending programmes by the IMF and the EU – for Greece, Ireland, and Portugal. Italy, Spain and other parts of the Eurozone remain under intense pressure.

Continue reading »

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Sep 02

From the article:

Comment: It’s not “socialism for the rich”; that’s an oxymoron.

It’s corporatism, i.e. fascism, as defined by Benito Mussolini.


Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts (Sott.net, Sep 1, 2012):

The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out.

Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:
Continue reading »

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Aug 09

Treasury’s Secretive $2.4 Trillion Fund Guarantee (CNBC, Aug 9, 2012):

Details about a secretive government program to bail out money-market mutual funds are finally coming to light.

Acting without any explicit Congressional authority, the U.S. Treasury guaranteed in excess of $2.4 trillion of money market funds after the giant Reserve Primary Fund “broke the buck” following the bankruptcy of Lehman Brothers. The program, which ended on Sept. 18, 2009, seems to have successfully prevented a panicked run by money-market fund investors.

But until now the Treasury has kept the identities of the funds that received government backing and the amounts guaranteed secret. It was not clear how many funds obtained backing or for how much taxpayers were on the hook during the program’s duration.

Continue reading »

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Jul 15

CONFIRMED AT LAST: The attempted cover-up of how JP Morgan torpedoed Lehman Brothers (The Slog, July 15, 2012):

As an early propagator of the allegation that JP Morgan Chase deliberately hastened the Lehman collapse, the Slog finds itself vindicated three years on by a successful regulator action against JPM, and contemporary documentation.

“And then when you have the suckers by the balls, you squeeze just like this”

Around the time of the Lehman disaster, a senior insider at the firm relayed to me what seemed an astonishing allegation: that in the weeks prior to the eventual collapse, JP Morgan deliberately withheld huge monies owed to Lehman in order to make the bankruptcy a certainty from which they could benefit. I relayed this story to another contact the following year, and he not only corroborated the charge, he also said he was sure Barclays had done the same. The now disgraced Barclays CEO Bob Diamond took over Lehman in a fire sale only weeks later (using taxpayers’ money as a bridging loan to do it) and rapidly built up a commanding position for the division he then headed up, Barcap  – the investment arm of the bank.

Now, more than three years later, regulators have penalised JPMorgan for actions tied to Lehman’s demise. The bank settled the Lehman matter and agreed to pay a fine of approximately $20 million. The action took place because of Morgan’s ‘questionable treatment of [Lehman] customer money’: regulators accused JPMorgan of withholding Lehman customer funds for nearly two weeks. So it had been true after all.

Jamie Dimon’s Morgan Chase dodged and dived on this one for three years in an attempt to smooth over the tracks.  As late as April this year, the Pirate insisted that the ‘monies involved were small’: but that doesn’t tally with this Wall Street Journal snippet from the time as follows:

‘Lehman Brothers Holdings Inc., the securities firm that filed the biggest bankruptcy in history yesterday, was advanced $138 billion this week by JPMorgan Chase & Co. to settle Lehman trades and keep financial markets stable, according to a court filing.’

Advancing cash to keep the markets stable is simply double-talk bollocks: many observers are sure this was the Lehman trades money withheld by JPM. The Lehman administrators continued to air their grievances about it, and in late May 2010 the bankruptcy estate of Lehman Brothers Holdings, Inc. filed suit against JPMorgan Chase, alleging that JPMorgan’s actions in the weeks preceding bankruptcy were wrongful. The claims arose from amendments and supplements to the Clearance Agreement between Lehman and JPMorgan in the weeks immediately preceding the bankruptcy. (In a nutshell, JPM changed the terms without notice to include onerous requirements for massive collateral against giving Lehman its own money back – a form of crooked logic that only a banker could construct. The weight of this collateral requirement on already serious debts took Lehman Brothers from intensive care to the Pearly Gates).

Continue reading »

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Apr 07

Gerald Celente on MF Global etc. :

No.1 Trend Forecaster Gerald Celente: The Entire Financial System Is Collapsing! – This Is FASCISM! (Video, March 26, 2012 )

More on JPMorgan here:

JPMorgan’s Blythe Masters On The Blogosphere, Silver Manipulation, Gold-Axed Clients And Doing The ‘Wrong’ Thing (VIDEO)


Regulators: JPMorgan illegally let Lehman Bros. count customers’ funds as its own (Washington Post, April 4, 2012):

JPMorgan Chase illegally allowed Lehman Brothers, the investment bank whose 2008 bankruptcy brought the financial system to the brink of collapse, to count customers’ money as its own, according to federal regulators.

The arrangement boosted the amount that Lehman could borrow from JPMorgan, where the customers’ money was deposited, regulators charged Wednesday.

Then, at the height of the financial crisis, JPMorgan refused to release the customer funds for about two weeks, until regulators ordered it to do so, regulators charged.

The charges were spelled out in an enforcement action against JPMorgan by the Commodity Futures Trading Commission (CFTC).

Without admitting or denying wrongdoing, JPMorgan agreed to pay $20 million to settle the civil case.

The matter adds another dimension of alleged lawbreaking to the history of Lehman’s downfall. It was also another vivid illustration that, even in highly regulated modern financial firms, basic controls can break down.

Last fall, the big brokerage firm MF Global collapsed with as much as $1.6 billion of customer funds missing and unaccounted for. There, too, it appears that clients’ money was treated as if it belonged to the firm.

Continue reading »

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Feb 24

Inside Job, Narrated by Matt Damon (Full Length HD) from jwrock on Vimeo.

Description:

‘Inside Job’ provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over $20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse. Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which has corrupted politics, regulation, and academia. It was made on location in the United States, Iceland, England, France, Singapore, and China.

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Dec 04

See also:

Gerald Celente Endorses Ron Paul For President – ‘The Entire Economic System Is Collapsing’ – ‘Fascism Has Come To America In Every Form’ (Video – Nov. 29, 2011)


Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks? (The Econonomic collapse, Dec. 2, 2011):

What you are about to read should absolutely astound you.  During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.  Do you remember the TARP bailout?  The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the “too big to fail” banks.  Well, that bailout was pocket change compared to what the Federal Reserve did.  As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the “too big to fail” banks between 2007 and 2010.  So have you heard about this on the nightly news?  Probably not.  Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture.  The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down.  The Federal Reserve has been actively picking “winners” and “losers” in the financial system, and it turns out that the “friends” of the Fed always get bailed out and always end up among the “winners”.  This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

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Aug 18

Flashback:

Former Assistant Secretary of Housing: The U.S. is the Global Leader in Illegal Money Laundering

See also:

Matt Taibbi On RT: ‘Nothing Stops Big Banks From Ripping Off People AGAIN’

Matt Taibbi: The People vs. Goldman Sachs (Rolling Stone)


S.E.C. Files Were Illegally Destroyed, Lawyer Says (New York Times, August 17, 2011):

WASHINGTON — An enforcement lawyer at the Securities and Exchange Commission says that the agency illegally destroyed files and documents related to thousands of early-stage investigations over the last 20 years, according to information released Wednesday by Congressional investigators.

The destroyed files comprise records of at least 9,000 preliminary inquiries into matters involving notorious individuals like Bernard L. Madoff, as well as several major Wall Street firms that later were the subject of scrutiny after the 2008 financial crisis, including Goldman Sachs, Lehman Brothers, Citigroup and Bank of America.

The S.E.C. is the very agency that is charged with making sure that Wall Street firms retain records of their own activities, and has brought numerous enforcement cases against firms for failing to do so.

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Aug 18

Flashback:

Former Assistant Secretary of Housing: The U.S. is the Global Leader in Illegal Money Laundering

See also:

Matt Taibbi On RT: ‘Nothing Stops Big Banks From Ripping Off People AGAIN’

Matt Taibbi: The People vs. Goldman Sachs (Rolling Stone)


Is the SEC Covering Up Wall Street Crimes? (Rolling Stone, August 17, 2011):

A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation’s worst financial criminals.

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

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Jul 08

Lehman Borrowed $18 Billion From Undisclosed Fed Program During ’08 Crisis (Bloomberg, July 7, 2011):

Lehman Brothers Holdings Inc. (LEHMQ)’s brokerage borrowed as much as $18 billion in four separate loans from a previously secret program of the U.S. Federal Reserve in June 2008, three months before its parent filed the biggest bankruptcy in U.S. history.

The program, which peaked at $80 billion in loans outstanding, was known as the Fed’s single-tranche open-market operations, or ST OMO. It made 28-day loans to units of 19 banks from March 7, 2008, to Dec. 30, 2008. Bloomberg reported on ST OMO in May, after the Fed released incomplete records on the program. In response to a subsequent Freedom of Information Act request for details, the central bank disclosed borrower names, amounts borrowed and interest rates.

The Lehman brokerage, Lehman Brothers Inc., tapped the ST OMO program for as much as $5 billion in short term funding in March 2008, and lower amounts at other times during the month. It took as much as $10 billion in June as the credit crisis worsened, according to Fed data. The maximum outstanding for any period was $18 billion.

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May 05

Don’t blame American appetites, rising oil prices, or genetically modified crops for rising food prices. Wall Street’s at fault for the spiraling cost of food.



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).

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Mar 14

Matt Taibbi: Why Isn’t Wall Street in Jail? (Rolling Stone):

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Former Senator And Chairman of the Congressional Oversight Panel Ted Kaufman: ‘TARP Was The Largest Welfare Program For Corporations And Their Investors Ever Created In The History Of Humankind’



Richard Fuld Jr.

The U.S. government’s investigation into the collapse of Lehman Brothers Holdings Inc. has hit daunting hurdles that could result in no civil or criminal charges ever being filed against the company’s former executives, people familiar with the situation said.

In recent months, Securities and Exchange Commission officials have grown increasingly doubtful they can prove that Lehman violated U.S. laws by using an accounting maneuver to move as much as $50 billion in assets off its balance sheet, which made it appear that the securities firm had reduced its debt levels.

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Feb 18

Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them


Illustration by Victor Juhasz

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. “If the allegations in these settlements are true,” says Jed Rakoff, a federal judge in the Southern District of New York, “it’s management buying its way off cheap, from the pockets of their victims.”

To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. “You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street,” says a former congressional aide. “That’s all it would take. Just once.”

But that hasn’t happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.

Just ask the people who tried to do the right thing.

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Feb 07

Among some of the discoveries of the financial crisis is that the entire financial system is now, following the Lehman bankruptcy, built entirely on fraud. And while Ken Lewis may spend the remainder of his days on some private island with stolen taxpayer money providing for his every last wish, it was he, in following the Fed’s and the Treasury’s orders to make a mockery of fiduciary responsibility, that was among the first people to confirm that there is no rule of low in America, or rather whatever law there is, it only applies to the less than immortal (i.e. the sub-banker class). Below, in an indication that Zero Hedge will never forget, we present the salient highlights from the Ken Lewis deposition on the MAC clause surrounding the Merrill transition, emphasizing the threats from Hank Paulson and Ben Bernanke. For as long as neither of these three is in jail for what is documented shareholder (and taxpayer) fraud, we fail to see why the remaining 300+ million Americans continue to diligently pay their share of taxes into a government that is now beyond (and in full documentation) corrupt. Also, how BofA’s lawyer Wachtell was not at all present during the discussion of the MAC clause, makes a complete mockery of the US legal process in its entirety. We wonder just when the official scribe of the kleptocracy, Andrew R. Sorkin, will write a book disclosing the truth of what happened, including a listing of all the laws broken with full premeditation by every single player, and not the watered down, PG13 (and rather expensive)version  that makes everyone come out like a law-abiding superman.

Full transcript highlights, presented without commentary: Continue reading »

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Feb 07

Make no mistake, the financial crisis has only just begun.

This is The Greatest Depression.


Paulson on Paulson

A friend sent me a collage of quotes from former Treasury Secretary Henry Paulson’s memoir of the financial crisis, On the Brink.  The quotes are particularly relevant in view of the Financial Crisis Inquiry Commission’s newly issued report which concludes that the 2008 financial crisis was badly mishandled by the government.

The collage paints a stunning picture of a confused and panicked government without a coherent strategy for getting in front of and containing the crisis.  Judge for yourself:

“I misread the cause, and the scale, of the coming disaster.  Notably absent from my presentation was any mention of problems in housing or mortgages.”  (p. 47)

“All of this led me in late April 2007 to say . . . that subprime mortgage problems were ‘largely contained.’  I repeated that line of thinking publicly for another couple of months. . . . We were just plain wrong.” (p. 66)

“Lehman’s UK bankruptcy administrator, PricewaterhouseCoopers, had frozen [Lehman’s] assets in the UK . . .  a completely unexpected  . . . jolt.” (p. 230)

“General Electric . . . was having problems selling commercial paper.  This stunned me.” (p. 172)

“I’d never expected to hear those troubles spreading like this to the corporate world. . . .” (p. 227)

“In a celebratory mood, [Rep.] Pelosi, [Sen.] Reid, [Sen.] Dodd, [Rep.] Frank, [Sen.] Schumer, and I walked together to Statuary Hall to announce the [TARP] deal. . . . Perhaps I should have foreseen the problems ahead . . . .” (p. 314)

“I expected [TARP] to be politically unpopular, but the intensity of the backlash astonished me.” (p. 370)

“I began to seriously doubt that our asset-buying program [TARP] could work.  This pained me, as I had sincerely promoted the [toxic asset] purchases to Congress and the public. . . .” (p. 385)

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