Infinite Unknown

Added: 13. Mai 2010

Tags: Afghanistan, Apple, Banking, Bankruptcy, Barack Obama, Bonds, China, Commodities, Constitution, Consumers, Corporations, Debt, Department of Education, Department of Energy, Dollar, Dow Jones, Economy, Fed, Federal Reserve, Food stamps, GDP, Gerald Celente, Gold, Great Depression, Healthcare, Hyperinflation, Hyperinflationary Depression, Inflation, Iraq, Jim Rogers, Keynesianism, Marc Faber, Medicaid, Medicare, Meltdown, Meltup, Military, Obama administration, Oil, Oil Prices, Peter Schiff, Politics, Quantitative Easing, Ron Paul, Silver, Social Security, Society, Stock Market, Taxes, Taxpayers, Treasury, U.S., Unemployment, Wall Street, War, Yuan

“I cannot come up with any explanation for market activity for last 15 months other than treasury intervention. Probability of other explanation is nonexistent.”

I am Ex CEO of mid sized Wall Street Firm. Known for equity research; reasonably good trading; acceptable Investment Banking. Now retired
Equity Block Trader early in career. May have traded more 1,000,000 share blocks than anyone over 10 year period.

Executed 1st program trade that I am aware of. Manually handled blocks of stock vs options on the XMI for expiration October of 1983.
Oversaw global equity trading, for top 5 firm. Was senior trader and oversaw hedge book during 87 crash. Still have time and sales from that day for all trades on NYSE.

Can read the tape as well as most.

I cannot come up with any explanation for market activity for last 15 months other than treasury intervention. Probability of other explanation is nonexistent.
Continue reading »

Tags: Economy, NYSE, Ponzi schemes, Stock Market, Treasury, U.S., Wall Street

Bankrupting America!

A tourist gazes up towards the dome of the U.S. Capitol (Reuters)

WASHINGTON (Reuters) – The United States posted an $82.69 billion deficit in April, nearly four times the $20.91 billion shortfall registered in April 2009 and the largest on record for that month, the Treasury Department said on Wednesday.

It was more than twice the $40-billion deficit that Wall Street economists surveyed by Reuters had forecast and was striking since April marks the filing deadline for individual income taxes that are the main source of government revenue.

Department officials said that in prior years, there was a surplus during April in 43 out of the past 56 years.

The government has now posted 19 consecutive monthly budget deficits, the longest string of shortfalls on record. Continue reading »

Tags: Barack Obama, Debt, Economy, Obama administration, Politics, Treasury, U.S.

An honest answer would probably sound like: “The elite told me to do so.”

Gordon Brown has been ordered to release information before the general election about his controversial decision to sell Britain’s gold reserves.

Gordon Brown pushed ahead with the of Britain’s gold despite serious misgivings at the Bank of England, it is believed Photo: REX/ALAMY

The decision to sell the gold – taken by Mr Brown when he was Chancellor – is regarded as one of the Treasury’s worst financial mistakes and has cost taxpayers almost £7 billion.

Mr Brown and the Treasury have repeatedly refused to disclose information about the gold sale amid allegations that warnings were ignored.

Following a series of freedom of information requests from The Daily Telegraph over the past four years, the Information Commissioner has ordered the Treasury to release some details. The Treasury must publish the information demanded within 35 calendar days – by the end of April.

The sale is expected to be become a major election issue, casting light on Mr Brown’s decisions while at the Treasury.

Last night, George Osborne, the shadow chancellor, demanded that the information was published immediately. “Gordon Brown‘s decision to sell off our gold reserves at the bottom of the market cost the British taxpayer billions of pounds,” he said. “It was one of the worst economic judgements ever made by a chancellor. Continue reading »

Tags: Gold, Gordon Brown, Government, Politics, Taxpayers, Treasury, U.K.

Keynesianism (Deficit Spending, Obamanomics) in general is outdated and wrong.

Interesting article nevertheless.

The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail.

It explains the “jobless” recoveries of the past and how each recent economic cycle produces higher money figures, yet lower employment. It explains why we are seeing debt driven events that circle the globe. It explains the psychological uneasiness that underpins this point in history, the elephant in the room that nobody sees or can describe.

(Click on images to enlarge.)

This is a very simple chart. It takes the change in GDP and divides it by the change in Debt. What it shows is how much productivity is gained by infusing $1 of debt into our debt backed money system.

Back in the early 1960s a dollar of new debt added almost a dollar to the nation’s output of goods and services. As more debt enters the system the productivity gained by new debt diminishes. This produced a path that was following a diminishing line targeting ZERO in the year 2015. This meant that we could expect that each new dollar of debt added in the year 2015 would add NOTHING to our productivity.

Then a funny thing happened along the way. Macroeconomic DEBT SATURATION occurred causing a phase transition with our debt relationship. This is because total income can no longer support total debt. In the third quarter of 2009 each dollar of debt added produced NEGATIVE 15 cents of productivity, and at the end of 2009, each dollar of new debt now SUBTRACTS 45 cents from GDP!

This is mathematical PROOF that debt saturation has occurred. Continuing to add debt into a saturated system, where all money is debt, leads only to future defaults and to higher unemployment. Continue reading »

Tags: Barack Obama, Debt, Economy, GDP, Global News, Government, Keynesianism, Obama administration, Politics, Treasury, U.S.

Sarbanes-Oxley was supposed to prevent crap like this:

From the paper:

Lehman employed off-balance sheet devices, known within Lehman as “Repo 105″ and “Repo 108″ transactions, to temporarily remove securities inventory from its balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008.2847

Oh yeah, that’s legal?  It’s not supposed to be!

Lehman regularly increased its use of Repo 105 transactions in the days prior to reporting periods to reduce its publicly reported net leverage and balance sheet.2850  Lehman’s periodic reports did not disclose the cash borrowing from the Repo 105 transaction – i.e., although Lehman had in effect borrowed tens of billions of dollars in these transactions, Lehman did not disclose the known obligation to repay the debt.2851  Lehman used the cash from the Repo 105 transaction to pay down other liabilities, thereby reducing both the total liabilities and the total assets reported on its balance sheet and lowering its leverage ratios.

Isn’t that special?

It gets better, as you might expect.

The Examiner concludes that colorable claims of breach of fiduciary duty exist against Richard Fuld, Chris O’Meara, Erin Callan, and Ian Lowitt, and that a colorable claim of professional malpractice exists against Arthur Anderson Ernst & Young.2915  (strikethrough mine, not in the original)

It is stated that Government Regulators (FRBNY and The SEC) had “no knowledge” of these practices.  Perhaps true.  But this calls into question why we’re hearing of this just now, and whether other firms have or are at present doing the same sort of thing.

There also appears to be a colorable claim that Lehman Management was fully-aware of what was going on: Continue reading »

Tags: Banking, Ben Bernanke, Corruption, Economy, FDIC, Fed, Federal Reserve, Government, Lehman Brothers, Politics, SEC, Timothy Geithner, Treasury, Wall Street

For Immediate Release
March 1, 2010

Congressman Paul Returns Over $100,000 to Treasury

Washington, D.C. – Congressman Ron Paul has continued to run his Congressional office in a frugal manner, and was able to return more than $100,000 from his allotted office budget to the Treasury this year, an increase over the $90,000 returned last year.

“Since my first year in Congress representing the 14th district I have managed my office in a frugal manner, instructing staff to provide the greatest possible service to the people of the 14th district at the least possible cost to taxpayers,” said Paul.

Source: http://www.house.gov/apps/list/press/tx14_paul/MRESurplus.shtml

Tags: Government, Politics, Ron Paul, Treasury, U.S.

Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash

On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.

The bank had already set aside a tidy $16.2 billion for salaries and bonuses – meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a “bailout tax” on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.

Not to worry, Blankfein reassured employees. “In a year that proved to have no shortage of story lines,” he said, “I believe very strongly that performance is the ultimate narrative.”

Translation: We made a shitload of money last year because we’re so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.

Goldman wasn’t alone. The nation’s six largest banks – all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry – set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. “What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?” asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.

Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America’s populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what’s the difference if some fat cat in New York pockets $20 million instead of $10 million?

The only reason such apathy exists, however, is because there’s still a widespread misunderstanding of how exactly Wall Street “earns” its money, with emphasis on the quotation marks around “earns.” The question everyone should be asking, as one bailout recipient after another posts massive profits – Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation – is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street’s eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its “performance” was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?

The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients. Continue reading »

Tags: AIG, Alan Greenspan, Bailout, Bank of America, Banking, Bankruptcy, Ben Bernanke, Bonds, Brad Sherman, Bubble, Citigroup, Debt, Economy, FDIC, Fed, Federal Reserve, Goldman Sachs, Government, JPMorgan, Matt Taibbi, Morgan Stanley, Mortgage crisis, Mortgages, Politics, Ponzi schemes, Robert Rubin, Societe Generale, Taxpayers, Timothy Geithner, Treasury, Wall Street

Goldman Sachs

David Fiderer’s below piece, originally published on the Huffington Post, continues probing the topic of Goldman and AIG. For all intents and purposes the debate has been pretty much exhausted and if there was a functioning legal system, Goldman would have been forced long ago to pay back the cash it received from ML-3 (which in itself should have been long unwound now that plans to liquidate AIG have been scrapped) and to have the original arrangement reestablished (including the profitless unwind of AIG CDS the firm made improper billions on, by trading on non-public, pre-March 2009, information), and now that AIG is solvent courtesy of the government, so too its counterparties can continue experiencing some, albeit marginal, risk, instead of enjoying the possession of cold hard cash. Oh, and Tim Geithner would be facing civil and criminal charges.

Yet as we look forward, we ask, who now determines the variation margin on Greek CDS (and Portugal, and Dubai, and Spain, and, pretty soon, Japan and the US), the associated recovery rate, and how much collateral should be posted by sellers of Greek protection? If Greek banks, as the rumors goes, indeed sold Greek protection, and, as the rumor also goes, Goldman was the bulk buyer, either in prop or flow capacity, it is precisely Goldman, just like in the AIG case, that can now dictate what the collateral margin that Greek counterparties, and by extension the very nation of Greece, have to post on billions of dollars of Greek insurance. Let’s say Goldman thinks Greece’s debt recovery is 75 cents and the CDS should be trading at 700 bps, instead of the “prevailing” consensus of a 90 recovery and 450 spread, then it will very likely get its way when demanding extra capital to cover potential shortfalls, since Goldman itself has been instrumental in covering up Greece’s catastrophic financial state and continues to be a critical factor in any future refinancing efforts on behalf of Greece. Obviously this incremental margin, which only Goldman will ever see, even if the CDS was purchased on a flow basis, will never be downstreamed on behalf of its clients, and instead will be used to [buy futures|buy steepeners|prepay 2011 bonuses|buy more treasuries for the BONY $60 billion Treasury rainy day fund].

In essence, through its conflict of interest, its unshakable negotiating position, and its facility to determine collateral requirements and variation margin, Goldman can expand its previous position of strength from dictating merely AIG and Federal Reserve decision making, to one which determines sovereign policy! This is unmitigated lunacy and a recipe for financial collapse at the global level.

This is yet another AIG in the making, with Goldman this time likely threatening to accelerate the collapse not merely of the US financial system, but of the global one, in order to attain virtually infinite negotiating leverage. Of course, the world will not allow a Greece-initiated domino, allowing Goldman to call everyone’s bluff once again. Continue reading »

Tags: AIG, Derivatives, Derivatives market, Dollar, Dubai, Economy, Fed, Federal Reserve, Gold, Goldman Sachs, Greece, Henry Paulson, Merrill Lynch, Politics, Portugal, Societe Generale, Spain, Taxpayers, Treasury

Related information:

- MSNBC Exposes President Obama’s lies: FED GAVE Banks Access to 23.7 TRILLION DOLLARS NOT $700 Billion!

San Jose State economics professor Jeffrey Rogers Hummel tells all his students that the easiest way to understand the Federal Reserve is to think of it as a giant, legalized counterfeiter. I had always known that the Fed and other central banks were like counterfeiters, but I still thought that the actual mechanics of open-market operations and so forth actually provided some important distinctions.

In large part because of my frequent email exchanges with Hummel, I now realize that I was being naïve. Once you understand the details of modern central banking, you are able to step back and see that it truly is a way for the government to use the printing press to pay its bills. All of the complicated process of targeting interest rates through buying Treasuries simply hides this essential point – and perhaps deliberately so. Continue reading »

Tags: Bonds, Debt, Fed, Federal Reserve, Government, Politics, Quantitative Easing, Treasury