Principia Discordia

Principia Discordia => Aneristic Illusions => Topic started by: Cain on March 12, 2009, 09:14:45 am

Title: Financial fuckery thread
Post by: Cain on March 12, 2009, 09:14:45 am
To stop me from making new ones, since at this rate I'll be making three new threads a day:

http://www.iht.com/articles/2009/03/11/business/small.php

Quote
Small businesses in Europe are failing for want of sums that, in terms of the huge stimulus and bailout packages now being offered by governments around the world, amount to small change.

Suzanne and Marwan Hemchaoui in the British market town of Newbury have a typical story. Their French-style bistro, Le Petit Square, did a good business all through the year-end holidays and through Valentine’s Day in mid-February.

But their bank, where they were clients of 20 years’ standing, canceled an overdraft facility of £20,000, or $27,480, for the bistro and another restaurant back in June — money that the two establishments need now to even out cash flow.

So Le Petit Square is now up for sale.

‘‘They said with a recession looming we were a big risk and just withdrew it,’’ Suzanne Hemchaoui said. ‘‘It’s disheartening that we were with the same bank for so long and that they were so cutthroat with us.’’

Small businesses in Britain employ around 22.7 million people — well over half of the private sector work force — and annually generate some £2.8 trillion in revenue, according to the latest data supplied by the British Department for Business Enterprise & Regulatory Reform.

Quote
In January, Britain introduced plans for its taxpayers to guarantee up to £21 billion of bank lending for small businesses to help firms put in danger by dwindling bank lending.

However, these promised lines of credit are not making their way through the system, according to a survey by the Federation of Small Businesses. Only 8 percent of small businesses said banks were making the loans available to them.


http://www.reuters.com/article/ousiv/idUSTRE52966Z20090310

Quote
NEW YORK (Reuters) - Private equity company Blackstone Group LP CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis.

"Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 12, 2009, 01:00:27 pm
Ooh! I can sink my teeth into this thread....  :)

Quote
NEW YORK (Reuters) - Private equity company Blackstone Group LP CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis.
"Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."

So this would be highly deflationary, but if it's just credit, rather than cash, and the only way to get the wheel going again is 'quantitative easing' as they are labeling it in your neck of the woods, don't you think we will be looking at hyperinflation PDQ?
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 12, 2009, 02:27:22 pm
That's the worry. 

So far, Gilts (British government bonds) have risen in price since the start of the scheme, which suggests it is working...for the moment.  However, that is having its own knock-on effect.  More buyers means lower yields...and pensions are linked to those yields as well, so it could be the case that OAPs will start to suffer very soon.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 12, 2009, 02:46:13 pm
That's the worry. 

So far, Gilts (British government bonds) have risen in price since the start of the scheme, which suggests it is working...for the moment.  However, that is having its own knock-on effect.  More buyers means lower yields...and pensions are linked to those yields as well, so it could be the case that OAPs will start to suffer very soon.

If/When the 'bond bubble' pops, I've heard it's 'look out below'.  People are piling into something that has negative real returns, and are being created in massive quantities to fund the bailouts?  I think they are going to eventually realize that the 'full faith and credit' of crumbling empires is not really solid ground....
harsh times ahead.
Title: Re: UNLIMITED financial fuckery thread
Post by: Idem on March 12, 2009, 02:52:51 pm
So are there any indications that India/China will be going in as much of a downward spiral?
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 12, 2009, 03:01:32 pm
So are there any indications that India/China will be going in as much of a downward spiral?

Sure.
http://www.thestar.com/News/World/article/597427
China's got probrems, too.

ETA: if our TBills lose too much appeal, China might feel forced to dump them, drowning us both as, the prices burn up faster than dryer lint. right now they're still buying hand over fist to keep them afloat, as i understand it
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 13, 2009, 06:52:41 pm
India has generally been tough on its own financial centres, when hints of crime and corruption and mismanagement have arrived, and has cut out lots of the financial dead wood.  Still, everyone has got hit.

China's "stimulus" seems to be funded by dodgy loans based on even dodgier stocks.  So expect that house of cards to come crashing down.  Although, China's imports have dropped even lower than their exports, so its not all terrible.

Russia is leaning on the Orthodox Church, it is so worried about social unrest.  Opiate of the people and all that.

For today's "you're fucked" links:

China's hooked on a drug called "export-led growth" and needs its supplier to make sure it has its shit together http://www.bloomberg.com/apps/news?pid=20601087&sid=a6KTPb8k2koY&refer=home

Banks and companies did NOT pay FDIC premiums, which is why the FDIC is having major problems right now.  If you or I missed on paying our insurance premiums, we sure as fuck wouldn't get pay outs now, would we?  http://www.boston.com/news/nation/washington/articles/2009/03/11/now_needy_fdic_collected_little_in_premiums/?page=full?ref=fp1
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on March 13, 2009, 07:02:25 pm
"An important lesson going forward is we need to be building up these funds in good times so you can draw down upon them in bad times."



(http://media.comicvine.com/uploads/1/12018/664005-deadpool_commonsense_super.jpg)



Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 16, 2009, 10:00:31 am
Wait, wha?

http://www.guardian.co.uk/politics/2009/mar/16/conservatives-criticise-job-centre-closures

Quote
The government is under fire from the Tories and trade unions for continuing to close jobcentres while unemployment is soaring and expected to top two million when figures are released this week.

Three jobcentres in the south-east, in Brixton Hill, London, Orpington, Kent, and Feltham, Middlesex, are being closed, despite the work and pensions secretary James Purnell telling the Commons before Christmas he had introduced a moratorium to stop the programme which has seen 503 disappear since 2002.

John Horam, Conservative MP for Orpington, said yesterday: "Already the centre is not taking new claimants, who are having to go to Bromley, where they face hours having to queue before they can be seen. I shall be raising this with the secretary of state."

Purnell was attacked by both Theresa May, his Tory shadow, and Mark Serwotka, general secretary of the Public and Commercial Services union, for pushing through earlier closures in areas where unemployment has since risen between 100 and 160%.

Serwotka said: "In some of these rural areas, people are having to spend all day trying to sign on as it involves a round-trip of 20 miles and some claimants have not got their own cars so have to rely on poor bus services. We need to be reopening more jobcentres, not closing them."
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 16, 2009, 10:37:56 am
Daily Telegraph fail:

http://www.telegraph.co.uk/comment/personal-view/4996305/We-need-more-risk-and-less-regulation-of-the-financial-sector.html

Quote
We need more risk and less regulation of the financial sector

Um, OK?

Quote
Capitalism is based on innovation.

Adam Smith rang.  He said "did you even READ my fucking book?"

Quote
But innovations are not always well understood when they first turn up. People buy too many of them and pay too much for them.

I just want to quote this as evidence the market does not always work perfectly.  This will become important in a minute.

Quote
That is what happened in this crisis. People paid too much for financial products that they didn't understand.

And sold them for too much.  And floated an entire economy on the basis they would keep selling forever and would never drop in price.  Oh, and there was something about lying to investors and firing people who disagreed with that assessment, using things like evidence and projected trends.  So not so much a naive mistake and more like carefully calculated get rich schemes.

Quote
Left to function alone, the market would have punished those that had invested in the companies that lost.

And everyone else, for good measure.  The market approves of collateral damage.

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Companies going bust and investors losing their money are not a "failure of capitalism".

Not even if they are making a yearly profit, yet go out of business due to a lack of credit during more quiet seasons?  Because that's what is happening.

Quote
It is capitalism; and if you don't like it, then you don't like the system.

If you love Communism so much, why don't you live there?

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There was no need for the British government to bail out the banks last autumn.

Apart from that whole "turning into the next Somalia" thing, and everyone knows Somalia is a healthy and functioning market economy, with reported growth in such vital areas as piracy, terrorism, warlordism and mercenary work.

Quote
The wrong policy response – the one adopted – was to reward investor error.

Yeah, those silly investors, believing banking CEOs.  They should have beat them until they told them the truth about the risks they were taking!  Jack Bauer would do no less.

Quote
It saved the capitalists made rich at the expense of private capitalism.

If you hate that so much, why don't you move to Cuba or something, Che?

Quote
Calls for heavy-handed regulation to restrict the actions of banks are the flip-side of acting so as to undermine the market's means to punish poor decision-making.

Yeah, not allowing financially risky decisions with the threat of jail is totally not a punishment when compared to what The Market will do.

Quote
This means there will be less risk-taking in the economy as a whole – less innovation and experimentation, less diversity and dynamism.

I cite the Open Source Movement as proof people cannot innovate without a profit motive.

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We will have an economy that grows more slowly and a society that is less tolerant, offering fewer opportunities for those who have no money but good ideas to get ahead.

Whereas a worldwide economic depression every couple of years won't make people more intolerant or offer fewer opportunities at all.

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The financial sector is unlikely to be able to return to sustained profitability without significant restructuring of a much more radical nature than the current favourites of creating "boring banks" and "bad banks". Governments are now the major shareholders in these institutions, and they should insist upon their restructuring.

Typical commie, looking to the government to solve all your problems.

Quote
Imagine if, instead of all that, we had used £100 billion or £200 billion for tax cuts to stimulate the real economy.

Yeah, but imagine if we had used £300 billion to stimulate the Really Real Economy (for Realness).  Or £400 billion to titillate the Somewhat Less Empheral Economy.  Or, and I will admit we are pushing the boat out here, £500 billion for The One True Objective Economy That No Rational Person Can Deny?  What then, eh?  That's the problem with you Commies, your lack of innovative thinking.

Ye gods, that was the biggest pile of fail I have ever read.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 17, 2009, 01:21:01 pm
http://online.wsj.com/article/SB123724826580949187.html?mod=djemalertNEWS

Quote
In response to expected bonus restrictions, officials at Citigroup Inc., Morgan Stanley and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees, people familiar with the situation said.....

The discussions are at an early stage, partly because the government hasn't yet issued specific rules on the bonus payments that will be allowed at companies that received TARP aid. The talks also are proceeding cautiously because of the political volatility of pay, bonuses and perks on Wall Street, including outrage over American International Group Inc.'s promise to pay $450 million in bonuses to employees in the insurer's financial-products unit.

[...]

As banks and securities firms wrestle with growing regulation of compensation practices, substantially increasing the base salaries of top employees could become a popular response, some industry officials say. A larger salary would reduce the relative importance of bonuses but also help financial companies increase those payments, since they usually are calculated as a percentage of total annual compensation.

IOW bonuses are entitlements, not rewards for a properly done job.



Also, bonus Buffet financial analysis

http://www.cnbc.com/id/29552618/

Gets interesting at around 6:05
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 17, 2009, 01:30:42 pm
Purnell has a plan to bring in a "workfare" system like the one in the US, which essentially means making the unemployed into a pool of cheap, serviceable labour for the corporate giants.  In his white paper on the topic, he suggested the government create partnerships with industry giants who would pay such workers (well) below minumum wage, and also get subsidies from the government for taking them off their hands.

My paranoid thinking is that by hyping the fear of an uprising of the unemployed over the summer, and the violence that will no doubt ensue, Parliament will use the emergency to push through such laws to get the poor "off the streets" and other such meaningless slogans which will expand government power and enrich the companies many MPs lobby for in their spare time.  If that is the case, shutting down job centres is necessary, to achieve the critical mass of unemployed people needed to cause such protests and violence.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 17, 2009, 01:44:27 pm
More doom:

http://www.guardian.co.uk/business/2009/mar/15/job-centres-unemployment-vacancies

Quote
Startling new figures have revealed that on average there are 10 jobseekers for every vacancy advertised in the UK. In one area of the south-east, 60 workers are available for each job.

Follow the money:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPzu3EtQ99Jk&refer=home

Quote
“I was happy to see that AIG finally handed over the counterparty information we’ve been requesting for months,” said Representative Elijah Cummings, a Maryland Democrat on the House Oversight Committee. “However, I am deeply concerned that Goldman Sachs received so much money from AIG considering the relationships between the two companies. We will certainly be investigating this further to ensure that this is merely a coincidence.”

Gangmasters are back in fashion:

http://www.guardian.co.uk/business/2009/mar/15/gangmasters-asylum-seekers

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n Southall, where most of the workers are of Indian, Pakistani or East African origin, some claimed they had fallen victim to sharp practices at the hands of gangmasters, but had no recourse because they were working illegally.

Balbir, a tall, turban-wearing Sikh with a grey beard, has sought work from this car park for the past four months after losing his meat-packing job. Last month, he was driven to a butcher in Harrow where he was told he would be given a day's "trial" as a meat packer.

"I worked for nine hours without a break. At the end of it, they told me I had not got the job and refused to pay me," he said.

Another Sikh regular, who admitted to working illegally, said that his wages of £4.50 an hour were docked because he did not have his own tools for working on a building site in Ealing.

"I was told that I had to hire my tools for £1 an hour. I couldn't argue. There was no point," he said.

Some, however, are only too pleased to have an opportunity to work, despite the poor wages and conditions. Sukki, 42, said that last week he was taken in a white van to a factory unit in Southall where he butters bread for sandwiches which are sent to shops and petrol stations up and down the country.

He worked an 11-hour shift for six days a week and earned just £2 an hour, little more than a third of the national minimum wage of £5.73.
Title: Re: UNLIMITED financial fuckery thread
Post by: Idem on March 17, 2009, 04:14:10 pm


http://www.guardian.co.uk/business/2009/mar/15/gangmasters-asylum-seekers

WOW.   :horrormirth:
Title: Re: UNLIMITED financial fuckery thread
Post by: NOVA on March 17, 2009, 04:21:34 pm
The government told us it would all be over!
Rejoice all around!

http://www.vancouversun.com/business/fp/chairman+recession+forecast+welcomed+markets/1395824/story.html
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on March 17, 2009, 05:55:43 pm
 Is that why I randomly had $800 in orders on Sunday? Because that was really confusing.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 18, 2009, 08:07:29 pm
Do you guys feel Quantitatively Eased?!  :eek:

http://biz.yahoo.com/ap/090318/fed_interest_rates.html

ONE TRIIIILLLLLLION DOLLARS!
This isn't gonna be your grandpappy's Depression (deflationary), I don't think....

ironically announced on the same day as this:
http://www.themoscowtimes.com/article/600/42/375364.htm
Title: Re: UNLIMITED financial fuckery thread
Post by: Honey on March 19, 2009, 02:13:05 pm
Quote
Subprime Bailout: Good Idea or 'Moral Hazard?'
by Eric Weiner

http://www.npr.org/templates/story/story.php?storyId=16734629

What might look like prudent financial first aid is, in reality, bad medicine. It's called "moral hazard," and it's a concept any parent of a 5-year-old can understand: Bail out someone who has engaged in risky behavior and you're likely to encourage that behavior in the future. Or, as The Wall Street Journal once put it, moral hazard is ''the distortions introduced by the prospect of not having to pay for your sins.''


We've Been Here Before & we'll be there again & again & again ...  Monkey see, monkey do. 

Quote
We've Been Here Before

In the past, Congress and the Federal Reserve have shown a willingness to rescue ailing industries, and even individual companies. There was the Chrysler bailout of 1979, the savings and loan bailout of 1989, and the airline bailout of 2001, among others. In each of those cases, proponents of intervention argued that the bailouts were necessary to ensure the health of the economy as a whole.

That's the same argument made by some economists now, but not everyone is buying it. "The banking system is in difficulty, but it's not in danger of collapse by any means," says credit analyst Stracke. "It's not as if this is a true emergency."

In fact, the kind of bailout being discussed for the subprime lenders and borrowers is very different from the one that, say, was put together in the 1980s to rescue the failed savings and loan industry. That bailout involved taxpayer money; this one does not.    (I am confused here?   :?)

Rather, under discussion are changes to the bankruptcy laws, the rules that govern the Federal Housing Administration or action by the Federal Reserve. The central bank has already cut interest rates several times in the past few months. That spurs economic activity and softens the blow of the bad loans. Wall Street, and some economists, applauded the interest-rate cuts, but not everyone thinks it was a good idea.

"By encouraging risky behavior, he [Federal Reserve Chairman Ben Bernanke] was asking for trouble—and he'll probably get it," wrote William Bonner and Lila Rajiva, in The Washington Post. "Bad investments do not become good ones just because a central bank lends more money to the investors who made the rash choices."

What is different here in the current scheme, is that the American people seem to be more aware, i.e. we didn't just elect the father or brother of someone (Neil Bush) who just barely escaped criminal prosecution for his part in the Savings & Loan bailout or John McCain who had his hand slapped by the Senate Ethics Committee for exercising "poor judgment."

Quote
Lincoln Savings and Loan
The Lincoln Savings led to the Keating five political scandal, in which five U.S. senators were implicated in an influence-peddling scheme. It was named for Charles Keating, who headed Lincoln Savings and made $300,000 as political contributions to them in the 1980s. Three of those senators – Alan Cranston (D-CA), Don Riegle (D-MI), and Dennis DeConcini (D-AZ) – found their political careers cut short as a result. Two others – John Glenn (D-OH) and John McCain (R-AZ) – were rebuked by the Senate Ethics Committee for exercising "poor judgment" for intervening with the federal regulators on behalf of Keating.[11]

http://en.wikipedia.org/wiki/Savings_and_loan_crisis

Why not a bailout for the American people (& others) who have been taken in (big time) by the Con Artists (bigger time)?  Hopefully history will correct this omission.
Title: Re: UNLIMITED financial fuckery thread
Post by: Xooxe on March 19, 2009, 02:41:42 pm
Do you guys feel Quantitatively Eased?!  :eek:

It always sounds like Quantum Touch for banks.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 19, 2009, 02:46:31 pm
http://www.nytimes.com/2009/03/18/business/economy/18leonhardt.html?_r=1  Someone is trying to play "heads I win, tails you lose" and the NYT is calling them on their bullshit.

http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf an IMF paper that, if read carefully, suggests the US and UK are going about this all wrong

http://www.nakedcapitalism.com/2009/03/on-feds-shock-and-awe.html Excellent analysis of what the Fed is actually doing
Title: Re: UNLIMITED financial fuckery thread
Post by: I_Kicked_Kennedy on March 19, 2009, 04:49:14 pm

Tell me you guys have seen Songs from the Second Floor?

So funny it'll make you drink bleach and mop the floor with your tears.
Title: Re: UNLIMITED financial fuckery thread
Post by: Honey on March 19, 2009, 04:52:18 pm
http://www.nytimes.com/2009/03/18/business/economy/18leonhardt.html?_r=1  Someone is trying to play "heads I win, tails you lose" and the NYT is calling them on their bullshit.

I found it interesting to listen to the below while reading the above.  "As above, so below."

http://www.youtube.com/watch?v=uHRppvbiahM

Tigerhawk's anger at the proposed tax hike on people making more than $250,000 a year results in a remarkable video, in which he complains with frightening, quiet intensity that he and his rich friends "have worked harder and longer in their entire careers than most Americans understand and can even conceive." He himself has spent 100 hours in the office this week; "I wrote the notes for this video at three in the morning on a Sunday night, having been there all weekend."

If you can continue watching through your tears, you will see Tigerhawk explain that the rich "work harder than everyone else doing things that cannot be done by other people who have not earned the same skills because they did not expend the same effort" and "are both more productive with their time and more energetic than average people." And "they will never be romanticized by Hollywood... but they are far more important to the prosperity of the United States and a future worth living for than the people who are put on a pedestal" - by which he presumably means folks who are not rich but are still admired; I wished he'd taken time to tell us who these wastrels are. Schoolteachers, perhaps.

Also, Obama is a class traitor.

http://www.imf.org/external/pubs/ft/wp/2008/wp08224.pdf an IMF paper that, if read carefully, suggests the US and UK are going about this all wrong

http://www.nakedcapitalism.com/2009/03/on-feds-shock-and-awe.html Excellent analysis of what the Fed is actually doing

Thanks for these, gonna read them when I have more time.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 23, 2009, 10:26:09 am
http://www.nytimes.com/2009/03/20/nyregion/20siege.html?partner=rss&emc=rss

AIG execs are being targeted by an increasingly angry public.

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

Matt Tiabbi spells it out for the proles.
Title: Re: UNLIMITED financial fuckery thread
Post by: fomenter on March 23, 2009, 03:06:02 pm
http://www.nytimes.com/2009/03/20/nyregion/20siege.html?partner=rss&emc=rss

AIG execs are being targeted by an increasingly angry public.

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

Matt Tiabbi spells it out for the proles.

a good read, thanks cain
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 23, 2009, 03:11:13 pm
It is.  I've linked it twice, but it may deserve its own thread. 
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 23, 2009, 03:14:53 pm
It is.  I've linked it twice, but it may deserve its own thread. 
Does it deserve to be copypastad for those of us behind nannywalls at work?
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 23, 2009, 03:16:45 pm
Oh yes, most certainly.  Hold on, I'll give it its own thread in TFYS.
Title: Re: UNLIMITED financial fuckery thread
Post by: Iason Ouabache on March 23, 2009, 04:59:44 pm
Dow Jones currently up 313 points.  Oh wait... I'm in the wrong thread.
Title: Re: UNLIMITED financial fuckery thread
Post by: Faust on March 23, 2009, 05:09:10 pm
Dow Jones currently up 313 points.  Oh wait... I'm in the wrong thread.
give it a day or two.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 24, 2009, 10:16:18 am
Dow Jones currently up 313 points.  Oh wait... I'm in the wrong thread.

In other news, frat boys like free beer and get out of jail free cards.

If I was told I was gonna have a sugar daddy take care of my problems, I'd be gambling like crazy, too.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 26, 2009, 01:16:16 pm
ECONOMY FAIL

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQGG.mWeZ4eU&refer=worldwide

Quote
he U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.

Gilts slumped after the London-based Debt Management Office, which manages bond auctions on behalf of the Treasury, said investors bid for 1.63 billion pounds of the 40-year securities. The last time the U.K. government was unable to attract enough investors was in 2002 when it tried to sell 30- year inflation-protected bonds. The yield on the 4.25 percent gilt due 2049 rose 10 basis points to 4.55 percent.

Brown’s government aims to sell a record 146.4 billion pounds of debt this fiscal year and as much as 147.9 billion pounds in 2010 as he tries to pull Europe’s second-largest economy out of its worst recession since 1980. The prime minister’s plan drew criticism yesterday when Bank of England Governor Mervyn King told lawmakers in Parliament in London the government should be “cautious” about spending and deficits.

“This is a warning signal investors are sending to the government,” said Neil Mackinnon, chief economist at hedge fund ECU Group Plc in London, who helps manage about $1 billion in assets and is a former U.K. Treasury official. “Investors are giving the thumbs down to the gilt market.”

Quote
“This sinks Brown below the waterline,” said Bill Jones, professor of politics at Liverpool Hope University. Brown’s “whole strategy is based on borrowing and now he can’t get anyone to buy his gilts. This means the prospect of going cap in hand to the IMF hovers increasingly into view.”

Despite it being the Tory Libertarian wet dream, I do not want the IMF to undertake structural reform here.  Not after seeing the results of such reforms in South America and SE Asia.
Title: Re: UNLIMITED financial fuckery thread
Post by: Xooxe on March 26, 2009, 03:28:28 pm
Apparently they've now found the rest of that £1.75 billion, but it's in safer gilts that don't get buggered up by inflation.

In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 26, 2009, 03:34:19 pm
What, you don't want to owe debt to the emerging world government?

also, please expand on the 'Tory Libertarian wet dream" comment.  Why would they support the IMF?

wait.....
not terribly important, but does this make sense?
Quote
The yield on the 4.25 percent gilt due 2049 rose 10 basis points to 4.55 percent.
that seems like 30 basis points, no?
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 26, 2009, 03:48:18 pm
also, don't worry too much... out bond auction was rather weak yesterday, as i understand it, too.
We're be right behind you...

hey, check this out:
US GDP down 6.3%, Profits decline 16.5%! but don’t worry, the bottom is in! the FED and the great stimulator are making everything better!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aemO.zzB7LlE&refer=home
Title: Re: UNLIMITED financial fuckery thread
Post by: Idem on March 26, 2009, 03:56:55 pm
In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.
:lulz:
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 26, 2009, 04:26:03 pm
So has Russia.  and Geitner said he's open to expanded use of IMF SDRs...
http://www.cnbc.com/id/29866259

Of course SDRs are just backed by the same currencies that are backed by shitty debt, so....

IMF head thinks the discussion is 'legitimate'
http://uk.news.yahoo.com/18/20090325/tbs-talks-on-new-world-reserve-currency-8cc5291.html

But, don't worry...
Obama said in a prime-time televised news conference on Tuesday: "I don't believe that there's a need for a global currency'', and noted that the dollar was "extraordinarily strong right now."
Is he looking at the same USDX chart i am? it's at 84 right now, and it would be lower still if the other nations weren't monetizing their debt, too, right?
Title: Re: UNLIMITED financial fuckery thread
Post by: fomenter on March 26, 2009, 04:31:52 pm
more on the same http://www.politico.com/blogs/bensmith/0309/Geithner_open_to_China_proposal.html?showall
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 26, 2009, 04:51:23 pm
What, you don't want to owe debt to the emerging world government?

also, please expand on the 'Tory Libertarian wet dream" comment.  Why would they support the IMF?

Because they know they cannot privatize everything via Parliament - that even if they controlled Parliament members of their own party, along with the opposition and practically everyone else would oppose it.  However, if was part of the conditions of getting money from the IMF, as part of its 'structural reform package' then they could shrug and go "well, that's our deal.  We certainly didn't want to do this, but, oh dear, it seems like we have no choice."

And of course, IMF privatization is like pretty much every other privatization scheme of the last thirty years, in that the same select groups of investors and companies would get first pick of the newly outsourced government services and to turn government monopolies into personal ones.

I keep an eye on the Tory blogosphere, especially among the more supposedly libertarian elements, and there have been a lot of statements essentially welcoming IMF economic dictatorship because of the above.  That's Tories for you - if they can't do something democratically, they'll find a non-democratic method of doing it, and say "fuck you" to anyone who disagrees or protests.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 26, 2009, 05:18:37 pm
Ah. i see. they aren't really 'libertarian' in their thinking...
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on March 26, 2009, 06:09:03 pm
In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.
:lulz:

Isn't China the one that links their currency to ours to keep the trade deficit skewed to their favor, even when we've asked them not to?
Title: Re: UNLIMITED financial fuckery thread
Post by: AFK on March 26, 2009, 06:14:04 pm
I heard the Russians might go along with it.  If so, look out. 
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 26, 2009, 06:22:01 pm
In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.
:lulz:

Isn't China the one that links their currency to ours to keep the trade deficit skewed to their favor, even when we've asked them not to?

Yeah.  they had to do that to keep the balance of trade, but they're between a rock and a hard place being pegged to a sinking ship (and having a ton of $ denominated reserves)...
i suspect any rhetoric to the effect of making a different reserve currency is meant to spur action on our part to strengthen the dollar...
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 26, 2009, 06:22:12 pm
In other news, China's central bank wants to get rid of the dollar as the world's reserve currency.
:lulz:

Isn't China the one that links their currency to ours to keep the trade deficit skewed to their favor, even when we've asked them not to?

What makes you think the US asking is anything more than a song and dance for the rubes at home?  Argh, Yellow Peril, etc etc, look at those evil Chinamen, as we write a blank cheque for Goldman Sachs AIG...

http://jamesfallows.theatlantic.com/archives/2009/01/might_as_well_make_this_an_all.php Data on Chinese currency control and its effect on trade.  Seems to be negligible, by my reading.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 26, 2009, 06:25:23 pm
Also China is just reminding the Fed that if they get fucked over at the G-20, they have options.

They don't.  Not really.  They've bought $2000 billion in debt and they're going to have to put up with it for the forseeable future.  But they like to act crazy now and again to make sure people are paying attention.
Title: Re: UNLIMITED financial fuckery thread
Post by: Honey on March 27, 2009, 10:57:02 am
What, you don't want to owe debt to the emerging world government?

also, please expand on the 'Tory Libertarian wet dream" comment.  Why would they support the IMF?

Because they know they cannot privatize everything via Parliament - that even if they controlled Parliament members of their own party, along with the opposition and practically everyone else would oppose it.  However, if was part of the conditions of getting money from the IMF, as part of its 'structural reform package' then they could shrug and go "well, that's our deal.  We certainly didn't want to do this, but, oh dear, it seems like we have no choice."

And of course, IMF privatization is like pretty much every other privatization scheme of the last thirty years, in that the same select groups of investors and companies would get first pick of the newly outsourced government services and to turn government monopolies into personal ones.

I keep an eye on the Tory blogosphere, especially among the more supposedly libertarian elements, and there have been a lot of statements essentially welcoming IMF economic dictatorship because of the above.  That's Tories for you - if they can't do something democratically, they'll find a non-democratic method of doing it, and say "fuck you" to anyone who disagrees or protests.

Oh the Shock & the Awe of those schemes!  In a short 30 years this *awsomeness* migrated from Chile to Bolivia, to Argentina, China, South Africa, Poland, Russia, UK (Falklands War) & so on & so forth & continues to the present day, like a "White Sale" for private investors only. 

However, have no Fear!  All those good ole boys have oh such good intentions, doncha know?  Y'see all you have to do is have Faith?  We can (if we're lucky) eat cake!   :x   
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 31, 2009, 11:56:11 pm
Dollar in decline in international trade...

Argentina and Brazil
http://www.presstv.ir/detail.aspx?id=68880&sectionid=351020706 (http://"http://www.presstv.ir/detail.aspx?id=68880&sectionid=351020706")

Russia, China, Belarus,
http://www.bloomberg.com/apps/news?pid=20601095&sid=aYaPzpEgF_BA (http://"http://www.bloomberg.com/apps/news?pid=20601095&sid=aYaPzpEgF_BA")

South Korea, Japan and China
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=awJV0HGibVmw (http://"http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=awJV0HGibVmw")

China, Argentina
http://www.marketwatch.com/news/story/China-Argentina-settle-trade-yuan/story.aspx?guid={9229A1CC-3B26-4694-A82C-1D24927C4433} (http://"http://www.marketwatch.com/news/story/China-Argentina-settle-trade-yuan/story.aspx?guid={9229A1CC-3B26-4694-A82C-1D24927C4433}")

Southeast Asia, China, Japan, Korea
http://news.alibaba.com/article/detail/markets/100064249-1-south-korea%252C-indonesia-seek-cooperation.html (http://"http://news.alibaba.com/article/detail/markets/100064249-1-south-korea%252C-indonesia-seek-cooperation.html")
Title: Re: UNLIMITED financial fuckery thread
Post by: Lyris_Nymphetamine on April 01, 2009, 04:12:18 am
profit off the next economic collapse by investing in alcohol and tobacco companies.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on April 01, 2009, 04:57:23 am
profit off the next economic collapse by investing in alcohol and tobacco companies.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 01, 2009, 01:34:56 pm
Economic Intelligence Unit predicts

60% chance of stablization of the world economy
30% chance of worldwide depression
10% chance of worldwide depression with major social disruption

http://www.finfacts.ie/irishfinancenews/article_1016307.shtml

Quote
The world economy is at grave risk of entering a depression, in which developed-world growth rates average less than 1% per annum between 2009 and 2013, according to a new report by the Economist Intelligence Unit. The depression scenario carries a 30% probability, while there is a 60% chance that the stimulus operations now underway will restore stability by 2010/11, albeit at lower growth levels than we’ve been accustomed to. A third scenario, in which failing confidence in the US economy leads to mass withdrawal from dollar-denominated assets and a collapse in the US currency, carries a 10% probability.

Depression would be characterised by mass bankruptcies and job losses. In a vicious cycle of debt deflation, the burden of debt would rise in real terms as collateral declined in value and incomes fell. As bad debts piled up, banks' balance-sheets would be weakened, resulting in forced asset sales. These would drive down prices further. Like banks and financial institutions, households and companies would “deleverage”, disposing of assets at fire-sale prices to pay down debt.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on April 01, 2009, 03:06:18 pm
http://www.reuters.com/article/newsOne/idUSTRE5303F820090401
Quote
U.S. private sector axes 742,000 jobs in March
NEW YORK (Reuters) - Job losses in the U.S. private sector accelerated in March, more than economists' expectations, according to a report by ADP Employer Services on Wednesday.

Private employers cut jobs by a record 742,000 in March versus a 706,000 revised cut in February that was originally reported at 697,000 jobs, said ADP, which has been carrying out the survey since 2001.
Title: Re: UNLIMITED financial fuckery thread
Post by: fomenter on April 02, 2009, 05:45:20 pm
"This was an article from the St. Petersburg Times Newspaper on Sunday. The Business Section asked readers for ideas on "How Would You Fix the Economy?"

Dear Mr.President,
Patriotic retirement:
There's about 40 million people over 50 in the work force; pay them $1 million apiece severance with stipulations:

1) They leave their jobs. Forty million job openings
     - Unemployment fixed.
2) They buy NEW American cars. Forty million cars ordered
     - Auto Industry fixed.
3) They either buy a house or pay off their mortgage
     - Housing Crisis fixed.  "

 
Title: Re: UNLIMITED financial fuckery thread
Post by: Iason Ouabache on April 02, 2009, 07:13:28 pm
Well, it would have been cheaper than the AIG bailouts.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on April 02, 2009, 09:48:18 pm
 :?
40*10^6 X 10^6 = 40 trillion dollars.
...not cheaper than AIG bailout...
plus AIG bailout is debt deflation at lofty eschelons, whereas 40 trillion dollars in Federal Reserve Notes floating around would make a quick impact on the price of a happy meal...
i've seen lots of 'obvious quick solutions' to this mess come through my mailbox, but people don't realize that it has taken decades of financial engineering to destroy the economy thusly, and centuries for the setup.  this problem won't be solved.
at all.















ever.
Title: Re: UNLIMITED financial fuckery thread
Post by: fomenter on April 03, 2009, 05:42:47 pm
not to confident about the source, but i found the comparison between Americas new economic "plan" and those of fascists interesting, anybody know if they are accurate or valid comparisons?

http://spectator.org/archives/2009/04/02/il-duce-redux
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 03, 2009, 08:16:13 pm
Accurate, maybe (I have yet to read the link).  Valid?  Probably not:

Quote from: An Anatomy of Fascism by Robert Paxton
Even at its most radical, however, fascists' anticapitalist rhetoric was selective. While they denounced speculative international finance (along with all other forms of internationalism, cosmopolitanism, or globalization -- capitalist as well as socialist), they respected the property of national producers, who were to form the social base of the reinvigorated nation. When they denounced the bourgeoisie, it was for being too flabby and individualistic to make a nation strong, not for robbing workers of the value they added. What they criticized in capitalism was not its exploitation but its materialism, its indifference to the nation, its inability to stir souls. More deeply, fascists rejected the notion that economic forces are the prime movers of history. For fascists, the dysfunctional capitalism of the interwar period did not need fundamental reordering; its ills could be cured simply by applying sufficient political will to the creation of full employment and productivity. Once in power, fascist regimes confiscated property only from political opponents, foreigners, or Jews. None altered the social hierarchy, except to catapult a few adventurers into high places. At most, they replaced market forces with state economic management, but, in the trough of the Great Depression, most businessmen initially approved of that.

tl;dr version: fascists don't care about economics much, and when they do, they tend towards crass populism designed to keep the proles entertained while changing nothing much in reality.
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on April 03, 2009, 08:18:41 pm
Reich would tend to agree.


LMNO
-lends too much weight to the opinions of books he's currently reading.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 03, 2009, 08:22:18 pm
Reich combined Marxist social analysis with Freudian psychoanalysis, as I recall.  It would be hard to find a single more antithetical school of thought to Fascism, especially its economically lacking theoretical base.

Not to say Reich's wrong, I think he certainly has a point, just to illustrate that this is one of several major points of depature between Marxist and Fascist theory and one he would seize upon to show the intellectual shallowness and lack of validity for the international fascist movement.
Title: Re: UNLIMITED financial fuckery thread
Post by: fomenter on April 03, 2009, 08:59:00 pm
Quote
Trying to handle the crisis, the Fascist government nationalized the holdings of large banks which had accrued significant industrial securities. The government also issued new securities to provide a source of credit for the banks and began enlisting the help of various cartels…. The government offered recognition and support to these organizations in exchange for promises that they would manipulate prices in accordance with government priorities. A number of mixed entities were formed… whose purpose it was to bring together representatives of the government and of the major businesses.… This economic model based on a partnership between government and business was soon extended to the political sphere, in what came to be known as corporatism.… The Fascists began to impose significant tariffs and other trade barriers.… Various banking and industrial companies were financially supported by the state.… [The national leader] created the [New Governmental Entity]….[which soon] controlled 20% of [the nation's] industry through government-linked companies.… [The national leader] also adopted a Keynesian policy of government spending on public works to stimulate the economy.… Public works spending tripled to overtake defense spending as the largest item of government expenditure.

As much as that description sounds like U.S. government policy begun under George W. Bush and now greatly expanding under Barack Obama, the above passage of course describes the economics of fascist Italy in the 1930s, as summed up by Wikipedia. (A quick Google search produces plenty of similar summaries of "economic fascism.") Furthermore, "The Fascist conception of life," Mussolini wrote, "stresses the importance of the State and accepts the individual only in so far as his interests coincide with the State. It is opposed to classical liberalism [which] denied the State in the name of the individual; Fascism reasserts the rights of the State as expressing the real essence of the individual."

Obama came close to those same sentiments in his most recent press conference: "But one of the most important lessons to learn from this crisis is that our economy only works if we recognize that we're all in this together, that we all have responsibilities to each other and to our country…. We'll recover from this recession, but it will take time, it will take patience, and it will take an understanding that, when we all work together, when each of us looks beyond our own short-term interest to the wider set of obligations we have toward each other, that's when we succeed, that's when we prosper, and that's what is needed right now."
first part of linked article, the comparison goes on from there and seems to get more wingnuty the closer you get to the bottom of the page...(page 2 is craptacular_)

also noted they are quoting wikipedia and claiming the existence of other sources for those that look (i haven't)
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 03, 2009, 09:57:51 pm
Its worth noting that the G20 are seeking to continue free trade and punish protectionist tendencies, rendering "The Fascists began to impose significant tariffs and other trade barriers" as pointless to the discussion.

Quote
Just as Mussolini did (in slightly different words), Obama repeatedly talks about using government to "leverage" private investment for the greater good.

So did David Hume, who is now presumably a "classical liberal fascist", or something.  Besides, no matter what the President says, its going the other way, socializing the losses, to the detriment of society, in order to prop up the lifestyles of a far smaller amount of private figures.

Quote
Meanwhile, his close ally Barney Frank introduced a bill to give the Treasury Secretary the power to set all salary levels for all employees of any companies in which the government has a capital stake.

ZOMG MEDIOCRE FINANCIAL RESPONSIBILITY = FASCISM.  For real?  If the government is the capital stakeholder, it can do anything up to and including give the entire company's liquid assets to Barack Obama's puppy as a birthday present.  And quite frankly, that has some appeal, if only for the novelty value.

Quote
As George Will has written, Congress has delegated so much economic authority to the Treasury, the Fed, and the president that the Constitution itself has almost certainly been shredded in the panic.

Well its certainly a good thing George Will was around all those other times to scold panicking governments intent on shredding the Constitution.  Oh, wait.

Quote
Meanwhile, in Congress's rush to pass a huge expansion of "national service" programs, almost exactly as outlined by Obama in a 2007 speech, few congressman likely realized that the details  included "campuses" with "superintendents" of uniformed youth, formed into "cadres," and indoctrinated even in math and science classes in the ideals of "service learning" financed through a "social innovation fund" funneled through favored "community organizations." (ACORN, anyone?) Even elementary school students would be recruited for these government-sponsored efforts.

ACORN is, after all, the Illuminati, and since "[t]he quintessential liberal fascist isn’t an SS storm trooper; it is a female grade-school teacher with an education degree from Brown or Swarthmore", it would make sense to bring the teachers in, too.  You wont be laughing when the Peace Corps break down your door and force you to watch Rachel Maddow re-runs and Michael Moore films 24/7, no siree (ironic aside: Neoconservative theorists have said as bold as day they intend to use war to brutalize the nation and turn it from its soft, decadent state into an imperial nation of blood and iron, and this is considered more fascist?  Puh-leeze).

Quote
As the Washington Examiner editorialized, it all sounds like a "creepy authoritarianism" on the loose.

Plus ca change, as our fine French allies would no doubt snicker.

Quote
Since when was it government's role, as Obama claims, to "invest" in all sorts of new technologies

I mean, who uses this stupid fucking "internet" anyway?

Quote
The stadium speeches in front of a Greek emperor's columns. The permanent campaign, the deliberate ubiquity. The "public service" radio ads with the president himself urging national service upon us. The iconic imagery on campaign materials. The millennial language about his own election as the moment when seas stopped rising and Earth started healing and about the need to "save the planet." The traveling abroad with an official entourage of 500 people (and a limo nicknamed "The Beast"). The fawning media. The simplistic slogans chanted over and over.

Yeah, Bush was kinda fascist, now you mention it.  What do you mean you were talking about someone else?

Quote
Finally, there is Obama's elevation of raw science to what he calls its "rightful place" as an end in itself, as if divorced from questions of morality. As Charles Krauthammer  wrote, "how anyone as sophisticated as Obama can believe this within living memory of Mengele and Tuskegee…is hard to fathom."

...Krauthammer said, as he urged on the nuclear holocaust of the state of Iran.

Quote
To be clear, none of this is to even come close to equating the Obama administration with Nazism. The conflation of Nazism with fascism is a gross misunderstanding of history; the original fascism and Nazism are entirely different breeds of vipers, with the latter being far more deadly.

Sure.  He's a fascist, but you don't mean that in a bad, Hitler way.  Also, for real?   I guess Hitler being inspired by Mussolini and constantly drawing comparisons between Il Duce and himself and, I don't know, considering him an ideological ally with the same essential goals and beliefs sure sounds like a good case for a link between fascism and Nazism.  But, you know, I only spent 3 years studying Nazi Germany and European interwar history, so what would I know?

Quote
The diminution of liberty, the enhanced state control, the indoctrination of youth, and the cult of the leader all violate basic tenets of the American experiment.

"Except when a Republican does it".

Quote
Already, there is an organized movement afoot to repeal the 22nd Amendment that limits presidents to two terms.

Yeah, its a good thing previous leaders, like Bush, didn't harbour any dictatorial ambitions (http://209.85.229.132/search?q=cache:dKw4au4PwN4J:www.321books.co.uk/famous-quotes/quotes-from-george-w-bush.htm+bush+dictator+quote&cd=9&hl=en&ct=clnk&gl=uk), isn't it?

The thing that most annoys me about the American right is their hypocrisy makes it impossible to take them seriously at all.  Because they are a bunch of hysterical, paranoid fantasists who spend their time projecting their own worst traits onto their enemies, I am inclined to disbelieve them from the outset - knowing full well that if their guy were the one doing such things, they would be enthusiastically cheerleading it on without so much as a worry in the world.
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 03, 2009, 10:06:59 pm
profit off the next economic collapse by investing in alcohol and tobacco companies.

Bad idea. They are in danger of being 'sin taxed' right out of business.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 05, 2009, 01:48:04 pm
(http://img219.imageshack.us/img219/3031/18085069.png)
Title: Re: UNLIMITED financial fuckery thread
Post by: wade on April 05, 2009, 06:29:51 pm
I don't understand this whole bull/bear thing....
I'm scared, but I have confidence in my stock market picks....
 if I lose it all, meh. I'll still have a job so it's not too big of a deal, ..
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 05, 2009, 06:37:32 pm
Basically, bull market = good, bear market = bad.
Title: Re: UNLIMITED financial fuckery thread
Post by: the other anonymous on April 05, 2009, 10:05:24 pm
I don't understand this whole bull/bear thing....
I'm scared, but I have confidence in my stock market picks....
 if I lose it all, meh. I'll still have a job so it's not too big of a deal, ..

Bull Market: Everybody buys into hyped-up bullshit.
Bear Market: Everybody's scared and hugging their teddy bears.
Title: Re: UNLIMITED financial fuckery thread
Post by: Iason Ouabache on April 06, 2009, 01:51:17 am
I'd love to see the pair of mini-crashes in the late 80s add to that chart. Just for comparison.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on April 06, 2009, 01:52:48 am
(http://img219.imageshack.us/img219/3031/18085069.png)

Iason's work.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on April 06, 2009, 01:53:36 am
profit off the next economic collapse by investing in alcohol and tobacco companies.

Bad idea. They are in danger of being 'sin taxed' right out of business.

That's what the black market is for.
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 06, 2009, 01:55:46 am
profit off the next economic collapse by investing in alcohol and tobacco companies.

Bad idea. They are in danger of being 'sin taxed' right out of business.

That's what the black market is for.

Heh. Just got back from the Res.
Title: Re: UNLIMITED financial fuckery thread
Post by: Iason Ouabache on April 06, 2009, 01:57:25 am
http://img219.imageshack.us/img219/3031/18085069.png

Iason's work.
C'mon! I wasn't even alive for two of those!
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on April 06, 2009, 01:57:57 am
profit off the next economic collapse by investing in alcohol and tobacco companies.

Bad idea. They are in danger of being 'sin taxed' right out of business.

That's what the black market is for.

Heh. Just got back from the Res.

Which one? 

Won't help, though.  The new tax is federal.  Buy from Vito.  Things fall off of trucks around him a lot.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on April 06, 2009, 01:58:10 am
http://img219.imageshack.us/img219/3031/18085069.png

Iason's work.
C'mon! I wasn't even alive for two of those!

A likely excuse.
Title: Re: UNLIMITED financial fuckery thread
Post by: maphdet on April 06, 2009, 02:02:14 am
profit off the next economic collapse by investing in alcohol and tobacco companies.

Bad idea. They are in danger of being 'sin taxed' right out of business.

That's what the black market is for.

yeah, ppl will always spend money on two items to matter what-drink and food -tobacco-maybe
just in the last couple of weeks i heard that alcohol sales have gone up-i havent done any research to back that up though but i believe it.

I also think there is a simple way to fix this whole economic mess (ofcourse nothing will work and it is doomed)
change the name of the dollar
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 06, 2009, 02:13:53 am
profit off the next economic collapse by investing in alcohol and tobacco companies.

Bad idea. They are in danger of being 'sin taxed' right out of business.

That's what the black market is for.

Heh. Just got back from the Res.

Which one?  

Won't help, though.  The new tax is federal.  Buy from Vito.  Things fall off of trucks around him a lot.

 Still,  a carton. I can make my own whiskey.
*cough* family was moonshiners *cough*
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 06, 2009, 02:46:39 am
the opinion from the Country sector.

The song starts at 3:10 into the video but the lead is in pretty good too.

http://www.youtube.com/watch?v=bXRibzKERpU
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 06, 2009, 09:16:49 am
http://img219.imageshack.us/img219/3031/18085069.png

Iason's work.
C'mon! I wasn't even alive for two of those!

Quantum.  Your actions now affect even past events.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on April 06, 2009, 03:30:10 pm
http://img219.imageshack.us/img219/3031/18085069.png

Iason's work.
C'mon! I wasn't even alive for two of those!

Quantum.  Your actions now affect even past events.

awesome.
hey, Iason.... invest in Microsoft.
In 1975.
i demand %10 finder's fee.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 06, 2009, 04:24:27 pm
http://finance.yahoo.com/news/Recession-outlasts-even-apf-14852191.html/print

Quote
WASHINGTON (AP) -- In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it's never been harder to find a job.

Congress extended unemployment aid twice last year, allowing people to draw a total of up to 59 weeks of benefits. Now, as the recession drags on, a rolling wave of people who were laid off early last year will lose them.

Precise figures are hard to determine, but Wayne Vroman, an economist at the Urban Institute, estimates that up to 700,000 people could exhaust their extended benefits by the second half of this year.

Some will find new jobs, but prospects will be grim: Layoffs are projected to go on, and many economists expect the jobless rate, already at 8.5 percent, to hit 10 percent by year's end.

"It's going to be a monstrous problem," Vroman said.

U.S. employers shed 663,000 jobs in March, and the jobless rate now stands at its highest in a quarter-century. Since the recession began in December 2007, a net total of 5.1 million jobs have disappeared.

Those who know that their unemployment aid is about to run out are counting the days, taking on odd jobs, moving in with relatives and fretting about the future.

This will possibly be the start of social disruption.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 06, 2009, 04:33:20 pm
Yeah, just a bit.  The pisser is a couple of things--like tax season (people are going to owe taxes on top of losing their jobs this year), the fact that housing and food have NOT gone down while the job market has tanked (so bottom line is even more unobtainable), and the stimulus package is being horded by state governments instead of going into jobs and infrastructure (state governments need to have HARSH federal penalties for this if the stimulus dollars are going to make a lick of difference--because at this point, the $'s being used to just pay down debt, just like, oh gee, BUSH'S stimulus from last year!).
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 06, 2009, 04:37:14 pm
Good thing Obama is standing between the pitchforks and the banks, eh?  Or, as I said elsewhere:

Quote
I just wish Obama was a little more...Machiavellian.  I know I couldn't stand having to kowtow to those idiots all day long, and the first thing I'd do in office would be to find a way to make them hurt.  Rule one of effective leadership - knife everyone who helped you to the top and who isn't dependent on you in the back.  Repeatedly, if necessary.  They'll only treat you as their tool otherwise.

Popular opinion should have hung these guys, politically.  In the UK, the only people trusted less than the bankers are politicians themselves, it would be a massive boost to go a little populist on them.  But, no.  Our leaders, so utterly ruthless in dealing with brown people, foreigners and the poor ie people without the wherewithal to fight back, are completely spineless when it comes to the banking industry and international finance.

Its almost enough to drive a man to Marxist class warfare analysis.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 06, 2009, 04:47:22 pm
I think he might be finding that his (so-called) "change" that he thought h(w)e could believe in is harder than he'd imagined to implement.
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 06, 2009, 05:10:26 pm
http://finance.yahoo.com/news/Recession-outlasts-even-apf-14852191.html/print

Quote
WASHINGTON (AP) -- In the coming weeks and months, hundreds of thousands of jobless Americans will exhaust their unemployment benefits, just when it's never been harder to find a job.

Congress extended unemployment aid twice last year, allowing people to draw a total of up to 59 weeks of benefits. Now, as the recession drags on, a rolling wave of people who were laid off early last year will lose them.

Precise figures are hard to determine, but Wayne Vroman, an economist at the Urban Institute, estimates that up to 700,000 people could exhaust their extended benefits by the second half of this year.

Some will find new jobs, but prospects will be grim: Layoffs are projected to go on, and many economists expect the jobless rate, already at 8.5 percent, to hit 10 percent by year's end.

"It's going to be a monstrous problem," Vroman said.

U.S. employers shed 663,000 jobs in March, and the jobless rate now stands at its highest in a quarter-century. Since the recession began in December 2007, a net total of 5.1 million jobs have disappeared.

Those who know that their unemployment aid is about to run out are counting the days, taking on odd jobs, moving in with relatives and fretting about the future.

This will possibly be the start of social disruption.

I thought that's why they built the detention camps here in the US for.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 07, 2009, 04:32:42 pm
http://news.bbc.co.uk/1/hi/scotland/7987659.stm

Quote
The Royal Bank of Scotland is to shed a further 9,000 jobs, half of them in the UK.

BBC Scotland understands the losses are to be in its back office operations.

These include document processing, information technology, procurement and bank property - a division known as Group Manufacturing.

The company would not say where the job losses would have most impact within the UK. Unions described the news as "truly devastating".

The cuts come on top of the 2,700 job losses already announced by RBS in Britain this year.

Group Manufacturing is the biggest single part of the troubled financial giant, employing a total of 45,000 people worldwide at a cost of £1.2bn last year. Of those staff, 27,000 work in Britain, so within the division, the job cuts represent one job in five.

http://ow.ly/2gHb

Quote
Protesters denouncing a Communist election victory in Moldova seized the president’s offices on Tuesday and broke into parliament, where they hurled furniture and computers into the street. About 10,000 demonstrators in Europe’s poorest country massed for the second straight day after the Communist Party scored a big victory in a weekend parliamentary election.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 08, 2009, 11:15:38 am
http://www.businessinsider.com/insolvent-banks-and-imaginary-fire-sales-2009-4

Quote
* Many banks are now insolvent. “…many major US banks are now legitimately insolvent. This insolvency can no longer be viewed as an artifact of bank assets being marked to artificially depressed prices coming out of an illiquid market. It means that bank assets are being fairly priced at valuations that sum to less than bank liabilities.”

* Supporting markets in toxic assets has no purpose other than transfering money from taxpayers to banks. “…any taxpayer dollars allocated to supporting these markets will simply transfer wealth to the current owners of these securities.”

* We’re making it worse. “…policies that attempt to prevent a widespread mark-down in the value of credit-sensitive assets are likely to only delay – and perhaps even worsen – the day of reckoning.”

In short, the government cannot save the banks by improving liquidity or changing mark to market rules because the problem isn’t illiquidity or accounting. The problem is that highly leveraged financial firms own assets that are worth far less than they thought they would be, and the firms are insolvent as a result. This is why the latest bailout plans secretly give huge subsidies to banks–because the only way to keep the insolvent zombies afloat is to transfer billions of dollars to banks, bank stockholders, and bank creditors. The alternative–allowing the insolvent banks to fail, seizing the assets, wiping our shareholders, giving bond holders a serious haircut–is still not on the official agenda.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 08, 2009, 11:18:45 am
http://blogs.ft.com/maverecon/2009/04/the-green-shoots-are-weeds-growing-through-the-rubble-in-the-ruins-of-the-global-economy/

Quote
Governments everywhere are doing the best they can to delay or prevent the lifting of the veil of uncertainty and disinformation that most banks have cast over their battered balance sheets. The banking establishment and the financial establishment representing the beneficial owners of the institutions exposed to the banks as unsecured creditors - pension funds, insurance companies, other banks, foreign investors including sovereign wealth funds - have captured the key governments, their central banks, their regulators, supervisors and accounting standard setters to a degree never seen before.

I used to believe this state capture took the form of cognitive capture, rather than financial capture. I still believe this to be the case for many, perhaps even most of the policy makers and officials involved, but it is becoming increasingly hard to deny the possibility that the extraordinary reluctance of our governments to force the unsecured creditors (and any remaining non-government shareholders) of the zombie banks to absorb the losses made by these banks, may be due to rather more primal forms of state capture....

Nothing more can be expected as regards a global fiscal stimulus. Indeed, the G20 delivered nothing in this regard. It would have been preferable to maintain the overall size of the planned (or rather, expected) global fiscal stimulus but to redistribute the aggregate (about $5 trillion over 2 years, as measured by the aggregated changes in the national fiscal deficits) in accordance with national fiscal spare capacity (I believe the World Bank calls this ‘fiscal space’). This would mean a smaller fiscal stimulus for countries with weak fiscal fundamentals, including the US, Japan and the UK, and a larger fiscal stimulus for countries with strong fiscal fundamentals, including China, Germany, Brazil and, to a lesser degree, France.

Furthermore, a likely consequence of the fiscal stimuli we have already seen or are about to experience is a negative impact on the medium- and long-term growth potential of the global economy. The reason is that, if fiscal solvency is to be maintained, there will have to be some combination of an increase in the tax burden and a reduction in non-interest public spending in most countries when this contraction is over. The inevitable effect of the crisis and the contraction is a higher public debt burden and therefore a larger future required primary government surplus (as a share of GDP). Almost any increase in the tax burden will hurt potential output - just the level of the path of potential output if you are a classical growth groupie, both the level and the growth rate of the path of potential output if you are an adept of the endogenous growth school....

In a number of systemically important countries, notably the US and the UK, there is a material risk of a ’sudden stop’ - an emerging-market style interruption of capital inflows to both the public and private sectors - prompted by financial market concerns about the sustainability of the fiscal-financial-monetary programmes proposed and implemented by the fiscal and monetary authorities in these countries. For both countries there is a material risk that the mind-boggling general government deficits (14% of GDP or over for the US and 12 % of GDP or over for the UK for the coming year) will either have to be monetised permanently, implying high inflation as soon as the real economy recovers, the output gap closes and the extraordinary fear-induced liquidity preference of the past year subsides, or lead to sovereign default.

Pointing to a non-negligible risk of sovereign default in the US and the UK does not, I fear, qualify me as a madman. The last time things got serious, during the Great Depression of the 1930s, both the US and the UK defaulted de facto, and possibly even de jure, on their sovereign debt.

In the case of the US, the sovereign default took the form of the abrogation of the gold clause when the US went off the gold standard (except for foreign exchange) in 1933. In 1933, Congress passed a joint resolution canceling all gold clauses in public and private contracts (including existing contracts). The Gold Reserve Act of 1934 abrogated the gold clause in government and private contracts and changed the value of the dollar in gold from $20.67 to $35 per ounce. These actions were upheld (by a 5 to 4 majority) by the Supreme Court in 1935.

In the case of the UK, the de facto sovereign default took the form of the conversion in 1932 of Britain’s 5% War Loan Bonds (callable 1929-1947) into new 3½ % bonds (callable from 1952) on terms that were unambiguously unfavourable to the bond holders. Out of a total of £2,086,000,000 outstanding, £1,500,000,000, or something over 70%, was converted voluntarily by the end of 1932, thanks both to the government’s ability to appeal to patriotism and joint burden sharing in the face of economic adversity and to ferocious arm-twisting and ‘moral suasion’.

I believe both defaults were eminently justified. There is no case for letting the interests of the holders of sovereign debt override the interests of the rest of the community, regardless of the financial, economic, social and political costs involved. But to say that these were justifiable sovereign defaults does not mean that they were not sovereign defaults. Similar circumstances could arise again.

While I consider an inflationary solution to the public debt overhang problem (and indeed to the private debt overhang problem) to be more likely in the US and even in the UK than a sovereign default (or ‘restructuring’, ‘conversion’ or ‘consolidation’, as it would undoubtedly be referred to by the defaulting government), neither can be dismissed as out of the question, or even as extremely unlikely.

Central banks, with the notable exception of the procrastinating ECB, are doing as much as they can through quantitative easing and credit easing to deal with the immediate crisis. Unfortunately, some of them, notably the Fed, are providing these short-term financial stimuli in the worst possible way from the point of view of medium- and longer-term economic performance, by surrendering central bank independence to the fiscal authorities.

When the Fed lends on a non-recourse basis to the private sector with only a $100 bn Treasury guarantee for a possible $1 trillion dollar Fed exposure (as with the TALF), when the Fed purchases private securities outright with just a similar 10-cents-on-the-dollar Treasury guarantee or when the Fed is party to an arrangement that transfers tens of billions of dollars to AIG counterparties - money that is likely to be extracted ultimately from the beneficiaries of other public spending programmes or from the tax payer, either through explicit taxes or through the inflation tax - the Fed is acting like an off-balance sheet and off-budget special purpose vehicle of the US Treasury.

When the Chairman of the Fed stands shoulder-to-shoulder or sits side-by-side with the US Treasury Secretary to urge the passing of various budgetary proposals - involving matters both beyond the Fed’s mandate and remit and beyond its competence - the Fed is politicised irretrievably. It becomes a partisan political player. This is likely to impair its ability to pursue its monetary policy mandate in the medium and long term.

The global stimulus associated with the increase in IMF resources agreed at the G20 meeting earlier this month will be negligible unless and until these resources actually materialise. The statements, declarations and communiqués of the G20, including the most recent ones highlight the gaps between dreams and deeds.... apart from the $240 bn (or perhaps only $200 bn) already flagged well before the G20 meeting, the only hard commitment to additional resources (or to resources that have any chance of being available for lending and spending during the current contraction) is the $6 bn worth of alms for the poor from the sale of IMF gold. That’s what I call a bold approach!....

There are signs that the rate of contraction of real global economic activity may be slowing down. Straws in the wind in China, the UK and the US hint that things may be getting worse at a slower rate. An inflection point for real activity (the second derivative turns positive) is not the same as a turning point (the first derivative turns positive), however. And even if decline were to end, there is no guarantee that whatever growth we get will be enough to keep up with the growth of potential. We could have a growing economy with rising unemployment and growing excess capacity for quite a while.

The reason to fear a U-shaped recovery with a long, flat segment is that the financial system was effectively destroyed even before the Great Contraction started. By the time the negative feedback loops from declining activity to the balance sheet strenght of what’s left of the financial sector will have made themselves felt in full, financial intermediation is likely to be severely impaired.

All contractions and recoveries are primarily investment-driven. High-frequency inventory decumulation causes activity to collapse rapidly. Since inventories cannot become negative, there is a strong self-correcting mechanism in an inventory disinvestment cycle. We may be getting to the stage in the UK and the US (possibly also in Japan) that inventories stop falling an begin to build up again.

An end to inventory decumulation is a necessary but not a sufficient condition for sustained economic recovery. That requires fixed investment to pick up. This includes household fixed investment - residential construction, spending on home improvement and purchases of new automobiles and other consumer durables. It also includes public sector capital formation. Given the likely duration of the contraction and the subsequent period of excess capacity, even public sector infrastructure spending subject to long implementation lags is likely to come in handy. A healthy, sustained recovery also requires business fixed investment to pick up.

At the moment, I can see not a single country where business fixed investment is likely to rise anytime soon. When the inventory investment accelerator goes into reverse and starts contributing to demand growth, and when the fiscal stimuli kick in, businesses wanting to invest will need access to external financing, since retained profits are, after a couple of years of declining output, likely to be few and far between. But with the banking system on its uppers and many key financial markets still disfunctional and out of commission, external financing will be scarce and costly. This is why sorting out the banks, or rather sorting out the substantive economic activities of new bank lending and funding, that is, sorting out banking , must be a top priority and an top claimant on scarce public resources.

Until the authorities are ready to draw a clear line between the existing banks in western Europe and the USA, - many or even most of which are surplus to requirements and have become parasitic entities feeding off the tax payer - and the substantive economic activity of bank lending to non-financial enterprises and households, there will not be a robust, sustained recovery.
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on April 08, 2009, 12:34:58 pm
Yeah, just a bit.  The pisser is a couple of things--like tax season (people are going to owe taxes on top of losing their jobs this year), the fact that housing and food have NOT gone down while the job market has tanked (so bottom line is even more unobtainable), and the stimulus package is being horded by state governments instead of going into jobs and infrastructure (state governments need to have HARSH federal penalties for this if the stimulus dollars are going to make a lick of difference--because at this point, the $'s being used to just pay down debt, just like, oh gee, BUSH'S stimulus from last year!).

Food has actually dropped a lot (according to NPRs economic report).

The grocery stores and food packages have responded to the price drops by raising the consumer prices, though admittedly, not as fast as they were raising them back when wholesale food prices were going up.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 08, 2009, 02:36:14 pm
Yeah, just a bit.  The pisser is a couple of things--like tax season (people are going to owe taxes on top of losing their jobs this year), the fact that housing and food have NOT gone down while the job market has tanked (so bottom line is even more unobtainable), and the stimulus package is being horded by state governments instead of going into jobs and infrastructure (state governments need to have HARSH federal penalties for this if the stimulus dollars are going to make a lick of difference--because at this point, the $'s being used to just pay down debt, just like, oh gee, BUSH'S stimulus from last year!).

Food has actually dropped a lot (according to NPRs economic report).

The grocery stores and food packages have responded to the price drops by raising the consumer prices, though admittedly, not as fast as they were raising them back when wholesale food prices were going up.

Oh yeah?  I didn't notice it dropping too much out here in San Diego--the only thing that has is meat, I believe.  Bread is through the roof (wtf? $3.50 for a loaf of bread?) and milk is also $$$.  Which means cheese and other dairy are also $$$.  But maybe that's spayshul to my area?
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on April 08, 2009, 02:39:22 pm
Nope, thats normal, I wasn't clear apparently.

The farmers are getting payed less for food (including the the big factory farms), and grocery stores/food processors are charging the consumers more.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 08, 2009, 02:43:09 pm
http://blogs.ft.com/maverecon/2009/04/the-green-shoots-are-weeds-growing-through-the-rubble-in-the-ruins-of-the-global-economy/


Chilling read.  Wow.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 08, 2009, 02:44:37 pm
Nope, thats normal, I wasn't clear apparently.

The farmers are getting payed less for food (including the the big factory farms), and grocery stores/food processors are charging the consumers more.

I know out here, with the water shortage/drought for the last 3 years, farmers are being asked to implement "dry farming."  Revenues from farming will be dropping precipitously, and I'm betting we'll be importing more and more from down south as the Summer waxes.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 08, 2009, 07:26:54 pm
Our man in the media, Taleb, has a piece up in FT as well

http://www.ft.com/cms/s/0/5d5aa24e-23a4-11de-996a-00144feabdc0.html?nclick_check=1

You'll need registration to read in full, so if you cannot be bothered:

Quote
1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.

2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks. Odds are he would cut every corner on safety to show “profits” while claiming to be “conservative”. Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards.

5. Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.

6. Do not give children sticks of dynamite, even if they come with a warning . Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. Cascading rumours are a product of complex systems. Governments cannot stop the rumours. Simply, we need to be in a position to shrug off rumours, be robust in the face of them.

8. Do not give an addict more drugs if he has withdrawal pains. Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. The debt crisis is not a temporary problem, it is a structural one. We need rehab.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement. Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).

10. Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on April 08, 2009, 07:33:37 pm
Quote
We have managed to combine the worst of capitalism and socialism.


sha-ZAM!
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 08, 2009, 07:44:18 pm
Although I'd like to point out that it would not be absurd until the capitalists bought out the socialists who took over the banks who took over the government, only to go bankrupt in making such a deal and having to rely on North Korea to bail them out.
Title: Re: UNLIMITED financial fuckery thread
Post by: maphdet on April 09, 2009, 01:17:37 am
Although I'd like to point out that it would not be absurd until the capitalists bought out the socialists who took over the banks who took over the government, only to go bankrupt in making such a deal and having to rely on North Korea to bail them out.

(http://www.alison-jackson.com/books/shoe.jpg)

It just reminded me of the lady who lived in a shoe-sorry
Title: Re: UNLIMITED financial fuckery thread
Post by: wade on April 09, 2009, 01:51:42 am
<---bought Ford @ $2.90

Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on April 09, 2009, 01:14:43 pm
Nope, thats normal, I wasn't clear apparently.

The farmers are getting payed less for food (including the the big factory farms), and grocery stores/food processors are charging the consumers more.

I know out here, with the water shortage/drought for the last 3 years, farmers are being asked to implement "dry farming."  Revenues from farming will be dropping precipitously, and I'm betting we'll be importing more and more from down south as the Summer waxes.

Does cali actually have water reserves to outlast the drought with, or are you just screwed?
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 09, 2009, 02:32:26 pm
Nope, thats normal, I wasn't clear apparently.

The farmers are getting payed less for food (including the the big factory farms), and grocery stores/food processors are charging the consumers more.

I know out here, with the water shortage/drought for the last 3 years, farmers are being asked to implement "dry farming."  Revenues from farming will be dropping precipitously, and I'm betting we'll be importing more and more from down south as the Summer waxes.

Does cali actually have water reserves to outlast the drought with, or are you just screwed?

Depends on who you talk to.  I mean, looking at how much farming we do, we are either in the top tier for production with what we have, or are at the bottom for how little infrastructure we keep up with and maintain or improve.  :lol:  Again, we're run like a small country over here, not just a state or a principality of a main one.

The farmers are screwed, really, is what it comes down to.  Fire damage, weather and economic times have really really fucked over their bottom line.  But I think that these are the types of situations that create better solutions, so *shrug* I think it's possible to u-turn slightly out of it.  Price of avodados and tomatoes will just be fucking high all summer is all.
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 09, 2009, 02:52:55 pm
All of the water in Colorado is in California.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on April 09, 2009, 03:13:13 pm
I'm not denying we're greedy buggers for other states' water.  Or are you just saying that it rains alot in CO?  :lol:
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 09, 2009, 03:30:57 pm
Some Colo genius a few decades ago sold all the water rights to Cali.
Title: Re: UNLIMITED financial fuckery thread
Post by: Richter on April 09, 2009, 03:33:24 pm
I'm a petty, spiteful man.  I'd say take a dump in the river. 
(Fairly certain this has happened already though.)
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 09, 2009, 03:39:46 pm
http://www.nytimes.com/2009/04/09/business/09bank.html?ref=business

Also, the Federal Government has several bridges it would like to sell you...
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 11, 2009, 05:44:09 pm
http://feedproxy.google.com/~r/NakedCapitalism/~3/CRFqcEPgFHU/socialism-gaining-ground-in-america.html

Socialism has unsurprisingly become more popular

http://www.nytimes.com/2009/04/11/business/economy/11bank.html?_r=1&hp

Well, we all know how this is going to play out...
Title: Re: UNLIMITED financial fuckery thread
Post by: Honey on April 11, 2009, 06:23:59 pm
Quote
“What they did is wrong and fundamentally un-American,” he said. “Even though the government told us to take this money to increase our lending, the extra charge meant we had less money to lend. It was the equivalent of a penalty for early withdrawal.”

Whining about corporate welfare AGAIN!
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 11, 2009, 10:48:52 pm
Also found this: http://www.theatlantic.com/doc/200905/imf-advice

Last page is the most relevant

Quote
In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy “stress scenario” that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.
Title: Re: UNLIMITED financial fuckery thread
Post by: the other anonymous on April 12, 2009, 01:50:34 am
This thread depresses me.

Will the post-economic America still have gun dealers, and what currency will I need to purchase a few dozen?

-toa,
the strategic brain behind America's next dictator
Title: Re: UNLIMITED financial fuckery thread
Post by: Xooxe on April 12, 2009, 02:02:25 am
Will the post-economic America still have gun dealers, and what currency will I need to purchase a few dozen?

Bullets?
Title: Re: UNLIMITED financial fuckery thread
Post by: the other anonymous on April 12, 2009, 02:17:57 am
Will the post-economic America still have gun dealers, and what currency will I need to purchase a few dozen?

Bullets?

SHIT! Why does survival have to be so damned complicated!

Are the bullets the currency or for the guns?
Title: Re: UNLIMITED financial fuckery thread
Post by: Xooxe on April 12, 2009, 03:22:57 am
Both.  :D
Title: Re: UNLIMITED financial fuckery thread
Post by: Lyris_Nymphetamine on April 12, 2009, 05:23:45 am
This thread depresses me.

Will the post-economic America still have gun dealers, and what currency will I need to purchase a few dozen?

-toa,
the strategic brain behind America's next dictator

You'll have to do it the good old fashioned biblical way and trade in two of your best cattle and your first born virgin daughter.
Title: Re: UNLIMITED financial fuckery thread
Post by: the other anonymous on April 12, 2009, 01:39:40 pm
This thread depresses me.

Will the post-economic America still have gun dealers, and what currency will I need to purchase a few dozen?

-toa,
the strategic brain behind America's next dictator

You'll have to do it the good old fashioned biblical way and trade in two of your best cattle and your first born virgin daughter.

Oops. Ate her.
Title: Re: UNLIMITED financial fuckery thread
Post by: wade on April 12, 2009, 05:52:59 pm
buy ford...
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 14, 2009, 01:09:12 pm
Some US banks are reporting big profits for the 1st quarter.

Is this real or a trick of accounting? Wall Street is responding in a positive way.

NEW YORK (Fortune) -- Goldman Sachs reported a much stronger-than-expected first-quarter profit Monday, bouncing back from its worst quarter as a public company.

Goldman (GS, Fortune 500) also set plans to raise $5 billion through a sale of stock, saying it wants to become the first big bank to repay the federal loans extended during last fall's financial sector meltdown.
http://money.cnn.com/2009/04/13/news/goldman.earnings.report.fortune/index.htm

Wells Fargo also reported 1st quarter profits.
Title: Re: UNLIMITED financial fuckery thread
Post by: the other anonymous on April 14, 2009, 04:03:45 pm
Some US banks are reporting big profits for the 1st quarter.

Is this real or a trick of accounting? Wall Street is responding in a positive way.

They're faking it. Remember: The economy is a matter of national security. The administration has ordered a good economy, to restore public faith in the president, making it easier to accumulate power and enact agendas.

All the world is a stage -- are you an actor or a director?
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 14, 2009, 04:07:28 pm
Some US banks are reporting big profits for the 1st quarter.

Is this real or a trick of accounting? Wall Street is responding in a positive way.

They're faking it. Remember: The economy is a matter of national security. The administration has ordered a good economy, to restore public faith in the president, making it easier to accumulate power and enact agendas.

All the world is a stage -- are you an actor or a director?


Nevermind.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 14, 2009, 07:50:17 pm
Banks have to show they are "struggling" but still viable institutions to qualify for TARP funds.  So they've been desperately cooking the books in order to show they are doing better than expected, but not as good as previous.
Title: Re: UNLIMITED financial fuckery thread
Post by: the last yatto on April 15, 2009, 07:34:51 pm
you know banking is on the ropes when the swiss is having problems
http://news.bbc.co.uk/2/hi/business/7999352.stm
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on April 15, 2009, 11:21:33 pm
Some US banks are reporting big profits for the 1st quarter.

Is this real or a trick of accounting? Wall Street is responding in a positive way.

NEW YORK (Fortune) -- Goldman Sachs reported a much stronger-than-expected first-quarter profit Monday, bouncing back from its worst quarter as a public company.

Goldman (GS, Fortune 500) also set plans to raise $5 billion through a sale of stock, saying it wants to become the first big bank to repay the federal loans extended during last fall's financial sector meltdown.
http://money.cnn.com/2009/04/13/news/goldman.earnings.report.fortune/index.htm

Wells Fargo also reported 1st quarter profits.

Funny if the black swan was an unexpected rapid economic recovery.

My beads are selling well. You would think that useless pieces of glass with a hole in them would be the last thing people want in a recession, but what the fuck do I know, I just make beads.
Title: Re: UNLIMITED financial fuckery thread
Post by: bds on April 15, 2009, 11:23:13 pm
But they're so pretty...
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on April 16, 2009, 02:02:07 am
But they're so pretty...

 :mrgreen:
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 16, 2009, 02:52:07 am
Some US banks are reporting big profits for the 1st quarter.

Is this real or a trick of accounting? Wall Street is responding in a positive way.

NEW YORK (Fortune) -- Goldman Sachs reported a much stronger-than-expected first-quarter profit Monday, bouncing back from its worst quarter as a public company.

Goldman (GS, Fortune 500) also set plans to raise $5 billion through a sale of stock, saying it wants to become the first big bank to repay the federal loans extended during last fall's financial sector meltdown.
http://money.cnn.com/2009/04/13/news/goldman.earnings.report.fortune/index.htm

Wells Fargo also reported 1st quarter profits.

Funny if the black swan was an unexpected rapid economic recovery.

My beads are selling well. You would think that useless pieces of glass with a hole in them would be the last thing people want in a recession, but what the fuck do I know, I just make beads.

I agree. The final factor is employment always lags behind recovery, but it just may be we have hit bottom.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on April 16, 2009, 10:48:35 am
Doubt it.  There has been a recovery, but its unsustainable.

In fact, the bank stress tests, if revealed, are probably going to cause any progress that has been made to be wiped out.  Investors will dump the banks which are weakest, and cause another run on the stock market, and even more bailouts.  Goldman Sachs is pushing for more information to be released, probably precisely for those reasons (well, the last one, really).
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on April 16, 2009, 04:45:31 pm
Doubt it.  There has been a recovery, but its unsustainable.

In fact, the bank stress tests, if revealed, are probably going to cause any progress that has been made to be wiped out.  Investors will dump the banks which are weakest, and cause another run on the stock market, and even more bailouts.  Goldman Sachs is pushing for more information to be released, probably precisely for those reasons (well, the last one, really).

Of course you doubt it. Absolutely nothing points to it. If it made sense/was predictable/seemed possible I wouldn't have referred to it as a black swan, nor would it be funny.
Title: Re: UNLIMITED financial fuckery thread
Post by: Adios on April 16, 2009, 04:59:16 pm
Doubt it.  There has been a recovery, but its unsustainable.

In fact, the bank stress tests, if revealed, are probably going to cause any progress that has been made to be wiped out.  Investors will dump the banks which are weakest, and cause another run on the stock market, and even more bailouts.  Goldman Sachs is pushing for more information to be released, probably precisely for those reasons (well, the last one, really).

I doubt the stress test will be publicized unless they are positive. Optimism is the new reality.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on April 16, 2009, 05:53:48 pm
(http://www.dowgoldzoom.com/images/howlowdow)
Lookie! it's a recovery!
news reports throughout the depression continuously denied the existence of the depression, as well as continuously calling the bottom.
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on April 22, 2009, 07:38:57 pm
Whoopsie.

The CFO of Freddie Mac "killed himself". (http://www.comcast.net/articles/news-general/20090422/US.Freddie.Mac.Official.Dead/?cid=NET_SZHeadlineRSSLinks&attr=article_news_general_US.Freddie.Mac.Official.Dead)

I was wondering when Obama would get his "Vince Foster" moment.
Title: Re: UNLIMITED financial fuckery thread
Post by: on April 22, 2009, 07:52:34 pm
Conversation about the economy at work.

Him - "Man, I should go back to selling heroin."
Me - "I wouldnt, the price of Heroin Futures on the commodities market just fucking tanked."
Title: Re: UNLIMITED financial fuckery thread
Post by: mcjof on April 23, 2009, 02:50:26 pm
dik
Title: Re: UNLIMITED financial fuckery thread
Post by: bds on April 23, 2009, 02:51:03 pm
dik

:|
Title: Re: UNLIMITED financial fuckery thread
Post by: mcjof on April 23, 2009, 02:52:04 pm
dik

:|

Dik tit wank lolroflamo on your face u n00b pwning n00b thing
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on April 23, 2009, 03:06:35 pm
dik

:|

Dik tit wank lolroflamo on your face u n00b pwning n00b thing
:kingmeh:
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on April 23, 2009, 03:08:16 pm
Quote
But Johnson worries that the budget and staff cuts imposed on the IMF last year, which have not been restored, may hamper its ability to quickly implement programs to fight the crisis.

http://www.npr.org/templates/story/story.php?storyId=103388246

Title: Re: UNLIMITED financial fuckery thread
Post by: Faust on April 23, 2009, 03:34:41 pm
dik

:|
dont talk to your alts.
Title: Re: UNLIMITED financial fuckery thread
Post by: bds on April 23, 2009, 11:44:30 pm
You think he's my alt?
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on August 18, 2009, 09:02:13 am
I hadn't even heard about Colonial's collapse until yesterday, but AFAIK, that was considered well capitalised.  Not to mention my general scepticism towards Anglo-American efforts mean this article has more than the ring of truth about it:

http://www.nakedcapitalism.com/2009/08/is-this-start-of-big-one.html

Quote
I don't believe in market calls, and trying to time turns is a perilous game. But most savvy people I know have been skeptical of this rally, beyond the initial strong bounce off the bottom. It has not had the characteristics of a bull market. Volumes have been underwhelming, no new leadership group has emerged, and as greybeards like to point out, comparatively short, large amplitude rallies are a bear market speciality.

In addition, this one has had some troubling features. Most notable has been the almost insistent media cheerleading, particularly from atypical venues for that sort of thing, like Bloomberg. Investors who are not at all the conspiracy-minded sort wonder if there has been an official hand in the "almost nary a bad word will be said" news posture. Tyler Durden has regularly claimed that major trading desks have been actively squeezing shorts. There have been far too many days with suspicious end of session rallies.

The fall in the markets overnight, particularly the 5.8% drop in Shanghai, seems significant in combination with other factors:

More bank woes. We may be two thirds of the way through the losses, but it could also be as little as half. And despite the stress test baloney, the banking system is undercapitalized by a large margin. Even if the remaining writedowns are smaller in absolute terms than what is, past, they dig deeper into depleted equity bases. Colonial Bank, a $25 billion bank taken out last Friday, was deemed well capitalized until recently. We noted its much bigger neighbor, $140 billion Regions Bank, similarly deemed to be well capitalized, has effectively said it is insolvent How many other banks are broke save thanks to overly permissive accounting? And as we have noted before, the IMF in a study of 124 banking crises, found that regulatory forbearance, which is econ speak for letting the halt and lame limp along rather than taking them out, is far more costly, both in terms of lost growth and size of the ultimate bank recapitalization, than earlier action.

Consumers tapped out. The lousy retail sales report was a reminder of a rather central fact most have chosen to forget.

Foreclosures set to rise. We are not having a housing bounce. Some markets may be close to a bottom, but foreclosures grind on. Even if some local markets are at their nadir, there is so much overhang, between continuing mortgage stress and pent up sales, that much appreciation near term is unlikely. The record of past severe financial crises is that real estate takes over five years to bottom.

Fed in a box. Some e-mail chat pointed out a key fact: the term structure of US funding has gotten very short term. We have become in some ways like a massive bank, borrowing short and lending long. This means the idea of allowing rates to rise on the short end, which has to happen unless we stay in Japanese ZIRP land indefinitely, will be more disruptive than the Fed seems to appreciate.

More AIG losses. I am told more AIG losses are in the offing. There is still unused money out of the total alloted to the rescue, so any eruptions here may not require further official action, but it would have a bad impact on the collective mood, and further taint any efforts to shore up the financial system.

Lack of political leadership. The health care fiasco is going to be a defining event for Obama, in a negative way. His inability to respond effectively to simply absurd distortions of his plan and of the record of public supported programs overseas (including that many are government funded but still privately run, for instance) may dispel the illusion that he is or can be an effective leader. His banking policy, which is vital to recovery, became hostage to Geithner and Summer's deep loyalty to the industry, and his lack or interest in rocking any boats. All Team Obama has done on the banking front is write a lot of blank checks, hold some bogus "stress tests" in lieu of doing the real thing, and raise a stink on a few symbolic issues to try to paper over the failure to embark on real and badly needed reforms.

Ed Harrison has called him a black Herbert Hoover. If the economy takes another down leg, it will further confirm his inability to do anything other than compromise and try to spin it as success. The confidence game worked when he was a new President, but nice talk and not much action is already wearing thin. We could use someone at the helm who is willing to plot a course and stick with it, and instead what we have is someone long on charisma and short on resolve.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cramulus on August 18, 2009, 02:24:31 pm
I'm sad and anxious

somebody cradle my head and say soothing words while I reload
Title: Re: UNLIMITED financial fuckery thread
Post by: Kai on August 18, 2009, 02:55:07 pm
I hear conflicting prophesies all over.


One of my new flatmates is an economist. He said right out that economics is reactionary when it comes to new events (read: black swans), and that he has no clue how it's going to turn out; also, any economist that tells you otherwise is fooling themselves.
Title: Re: UNLIMITED financial fuckery thread
Post by: Triple Zero on August 18, 2009, 03:09:37 pm
I'm sad and anxious

somebody cradle my head and say soothing words while I reload

BIKAW
    \
(http://farm4.static.flickr.com/3540/3773317235_5972a9babc_o.jpg)
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on August 18, 2009, 03:16:06 pm
Also

http://globalguerrillas.typepad.com/johnrobb/2009/08/more-breakage.html

Quote
Over the last thirty years, the social compact that divided value produced by productivity improvements between workers and corporate/financial interests broke down.  All the value from improvements (they were mighty) in productivity went to corporations/finance.  Median incomes stagnated for 30 years and the illusion of growth was produced by the extension of cheap debt.  It was also the driver behind the ahistorical rise in the stock market and ultimately the recent financial meltdown. 

That would be bad enough, but it's getting worse.  Median incomes are now on a downward track to give corporations the ability to return to profitability through increases in productivity (a massive 6.4% rise in the last quarter). 

This could be an interesting trend line.  Rather than keep median wages at status quo levels (as we have over the last thirty years), this is one where corporate/financial interests claw back on the gains in median wages between the end of WW2 and the mid seventies.  In that direction lies complete and utter failure.
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on August 18, 2009, 03:21:59 pm
Hasn't the median been falling for years now?  Since 2000 if I'm not mistaken.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 12, 2009, 03:17:58 pm
To stop me from making new ones all the time, I'll confine financial fuckery news and links ITT.

Anyway, AIG just threatened the government.

http://www.ft.com/cms/s/0/51b26b2a-b68e-11de-8a28-00144feab49a.html

Quote
Kenneth Feinberg, the “special master” for pay at companies that have received government support, has raised concerns inside and outside AIG by putting pressure on the company to alter some pay plans.

People close to the situation said regulators had expressed fears that a crackdown on AIG could impel executives to leave, further harming the company’s prospects and the chances of taxpayers’ money being repaid.

In other words, they're essentially holding taxpayer money hostage, and saying they wont pay it back if the government tries to cut pay plans.  Never mind they're not going to pay it back anyway, because the American taxpayer is a serf, who should feel honoured to help a successful company like AIG in a time of crisis.  I wish Obama had declared he would not negotiate with investment bankers, a la terrorists.
Title: Re: UNLIMITED financial fuckery thread
Post by: Halfbaked1 on October 13, 2009, 11:46:53 am
I am gonna ask here since youse guys seem to be more in the know.

The stock market is up, as read by the DOW, so our dear beloved politicians tell us the recession is over.  But we have record unemployment across the country and people are having a hard enough time buying food, especially after wasting money on new cars cause it was SUCH a great deal.  My question is this, how does the market being up mean that the recession is over for us, the little people?
Title: Re: UNLIMITED financial fuckery thread
Post by: BabylonHoruv on October 13, 2009, 12:12:21 pm
Because unemployment is a lagging indicator.  In other words it comes down after the market goes up, rather than before.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 13, 2009, 02:59:36 pm
I am gonna ask here since youse guys seem to be more in the know.

The stock market is up, as read by the DOW, so our dear beloved politicians tell us the recession is over.  But we have record unemployment across the country and people are having a hard enough time buying food, especially after wasting money on new cars cause it was SUCH a great deal.  My question is this, how does the market being up mean that the recession is over for us, the little people?

It doesn't, in short.  The market is being kept afloat by cash infusions from the government and a whole lot of Clap Your Hands If You Believe (http://tvtropes.org/pmwiki/pmwiki.php/Main/ClapYourHandsIfYouBelieve), which is being aided by good feeling news stories about green roots, usually peddled by the same people who didn't believe a crash was in the making.

Japan had a "jobless recovery" 10 years ago, and it took them a decade to actually get anything near a proper recovery.  This just means things aren't getting much worse....that is, until the government stops throwing money at banks, or cuts back on social spending (the Tories in the UK have threatened to do both of these when they inevitably get voted in, and everyone with half a brain says it will plunge us into a longer and deeper recession the minute they do it).

Also, most of those toxic assets are still out there.  AIG is almost certainly hiding a ton of them, going by their recent actions.
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on October 13, 2009, 04:17:05 pm
Presumably, it isn't actually jobless.  It just looks jobless because there's so much fuckery going on with the unemployment numbers to keep them low in the news.  As the recovery happens the numbers get less fucked with.
Title: Re: UNLIMITED financial fuckery thread
Post by: Halfbaked1 on October 14, 2009, 07:06:45 am
From personal experience the jobless rate is actually pretty high.  As I have said before, I don't trust massive organizations, but i do trust my eyes and I see alot of people in my area that are unemployed that weren't prioor to the recession.  I am happy to say that the plant where I work has brought back alot of the people they laid off, but new hires are still frozen. 
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 19, 2009, 08:56:55 am
http://www.latimes.com/business/la-fi-ports17-2009oct17,0,4849546.story

Quote
In another sign of how deep the global recession has become, the ports of Los Angeles and Long Beach on Friday reported their worst combined import statistics for September in nine years.

September is often the busiest month at the nation’s biggest port complex, making it one of the best barometers of the health of the economy and international trade.

The port of Los Angeles received 309,078 containers packed with imported goods in September, representing a decline of 16% from the same month last year and 27% from September 2006, L.A.’s best month ever for imports. Long Beach received 224,924 import containers in September, a drop of 19% from a year earlier and 32% from September 2007, the port’s best September ever.

For the first nine months of the year, imports, exports and empty containers through the port of Los Angeles were down 16% at just under 5 million containers while the Long Beach port saw a decline of nearly 25% at just under 3.7 million containers, compared with the same period last year.

Most of the recovery that the shipment industry is having is being fuelled by inventory re-stocking rather than consumer demand, too.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 19, 2009, 09:00:13 am
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6879558.ece

Quote
THE state-owned Royal Bank of Scotland is planning to hand out record bonuses of up to £5m each in a snub to struggling taxpayers.

The average employee in its high-risk investment banking arm is likely to take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.

The payouts by the investment banking division — from a total pay and bonus pot of £4 billion — would top the deals awarded at the peak of the financial boom in 2007 and are 66% higher than those paid last year.

RBS, then headed by Sir Fred Goodwin, had to be rescued from collapse by the Treasury last October with an initial injection of £20 billion. The taxpayer now has a 70% stake in the bank.

Any suggestion of bumper bonuses will put RBS on a collision course with UK Financial Investments, which oversees taxpayers’ investments in banks. It would have to approve the payments.

The RBS plans are the latest sign that the bonus culture is returning to the City just a year after the financial system was saved from collapse. The banks that have survived the financial crisis are now making huge profits in areas such as debt and currency trading, where instability in the global economy has created opportunities.

Some traders in specialised areas are making bigger profits than before because of the chaos created by the collapse. After a series of forced mergers, there are also fewer competitors in a number of areas, allowing the banks to charge clients higher fees.

RBS is expected to lobby hard to be allowed to make the payments, claiming that dozens of its top performing executives have been poached by rivals offering even bigger pay deals. Almost a third of the bank’s wealth management staff in Singapore walked out last week over fears they would receive lower than expected bonuses.

The bank has already provoked anger over a bonus package of nearly £10m for Stephen Hester, its chief executive, which he will earn if he turns round the bank. Hester has said in recent interviews that even his parents think he is paid too much.

The bank has also come under fire over recent “golden hello” deals. It offered an estimated £7m to Antonio Polverino, a bond trader; while Brian Hartzer, recently recruited to head the bank’s network of branches, was handed 1.99m shares as part of his sign-on deal — worth about £1m at current share prices.

Paul Myners, the City minister, has written to the boards of all the banks operating in Britain and reminded them that they should hold on to their cash to build up reserves, rather than hand it over to their executives and traders.

There were claims last night that some cabinet ministers wanted a “windfall” tax on bank profits. However, the Treasury is resisting any move that might damage the health of the financial sector at a time when banks are still struggling to rebuild their balance sheets.

Lloyds Banking Group, which is 43% owned by taxpayers, has been working on plans for a multi-million-pound incentive programme for its top managers.

Barclays, which has not received direct state support, is expected to post record profits of about £10 billion this year, leaving senior executives including Bob Diamond, head of Barclays Capital, the group’s investment banking arm, in line for multi-million-pound bonuses. Barclays Capital, which took over the remains of Lehman Brothers in the US, is expected to see its profits soar.

Last week Goldman Sachs, the American bank, which employs 5,500 people in London, announced that its staff would share about £13 billion in pay and bonuses. Its senior partners in London, such as Michael Sherwood, the vice-chairman, could be in line for payments running to tens of millions of pounds.

The record payouts across the City come despite political pledges to clamp down on bankers’ pay, drafted at meetings of the G20 countries in both London and Pittsburgh this year.

Lord Oakeshott, the Liberal Democrat Treasury spokesman, said: “The masters of the universe in investment banking are taking away lorryloads of loot because they are the last men standing. They have a virtual monopoly, partly because governments chose to save some banks and let others fall . . . It’s survival of the fattest.”

He added: “All this raises serious issues about competition and monopolies. The government must get a grip and look at this now — and not hide behind G20 principles which are mushy and meaningless.”

None of the banks will decide final bonus payouts until the end of the year at the earliest, but the US banks have already set aside large sums to make the payments.

JP Morgan Chase revealed last week that it was preparing to pay almost £18 billion to cover salaries and bonuses for its staff, after posting profits of £2.2 billion for the past three months.

Even banks that have lost money are believed to be considering enormous payouts to some of their senior investment bankers. Bank of America Merrill Lynch, which revealed a quarterly loss of more than £600m last week, is believed to be preparing to make big bonus payouts to staff in its London operations.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 19, 2009, 09:06:09 am
Speaking of Barclay's, maybe there is a reason the bank didn't need direct financial assistance from the UK government

http://www.zerohedge.com/article/rare-glimpse-feds-discount-window-courtesy-brewing-lehman-barclays-scandal

Quote
It is becoming increasingly likely that Barclays will have to pay a cool $5 billion (at least) in additional consideration to the Lehman estate, after the Official Committee of Unsecured Creditors came out yesterday with a hefty joinder piece to the debtor's motion that Barclays materially misrepresented and, in essence, stole $5 billion or more from under the noses of both Lehman Brothers Holdings and its Creditors, all as the megalomaniacal Judge Peck was trying to ram the largest prearranged stalking horse bankruptcy through, in the shortest (im)possible amount of time, just so he could print "Judge Peck  - Greatest Restructuring Judge in the World" t-shirts at the Bowling Green sweat shop just off NY Southern Bankruptcy court.

Quote
Basically, Barclays tried to rip JPMorgan off by collecting not just on the Lehman collateral which was part of the Barclays APA, but pretty much all the collateral in the tri-party repo, backed and funded by the NY Fed and JPMorgan. But the bottom line is that chaos ruled: tens of billions of dollars were flying on the wires at any given minute, in order to give the impression that with Lehman's collateral now on Barclays' books everything was magically better.

In this firestorm of wire transfers, the Fed's direct Lehman exposure was made obvious. From the Jamie Dimon letter, one can see that in the days after Lehman's bankruptcy, over $50 billion in securities had been assumed by the Fed via FRB and DTCC programs, which also included anywhere between $3 billion and $4.5 billion in equities. It was Barclays' onus to shift this entire collateral exposure to its own balance sheet (while paying both the Fed and JPM off).

Quote
Coming full circle, the major question we have is what, if any, considerations did the Fed use when determining how much of Lehman's collateral pool it would be willing to onboard in the discount window. And if back then it was willing to accept securities of bankrupt companies as value pledges to US taxpayers, why would one assume that anything has changed? The next time there is a "risk-flaring" event (and with bankrupt companies presumably still on the Fed's balance sheet, it is merely a matter of time), how much more leeway will be given to toxic assets? Will the Fed now allow for a 10% haircut instead of 20%? Or how about 5%? Or maybe it will actually say the securities deserve a premium, since all that money Bernanke is printing has to go somewhere. We hope that the over 300 members of Congress who already support Ron Paul's "Audit the Fed" Initiative consider the implications of what the Lehman fiasco has taught us, and how this unique look into the Fed's balance sheet should be a very critical reminder of just how much risk the Fed is willing to take on with taxpayer capital when bailing out a financial system that, absent ongoing accounting gimmickry and endless Reserve Banking System subsidies, is still rotten to its core.

Those are the highlights, I suggest reading the whole thing
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 19, 2009, 09:12:26 am
Oh, OK, just one more then:

http://www.nytimes.com/2009/10/18/opinion/18rich.html?_r=1

Quote
It was hard not to think of Rockefeller’s old P.R. playbook while watching Goldman Sachs’s behavior when the Dow hit 10,000 last week. As leader of the Wall Street pack, Goldman declared surging profits, keeping it on track to dispense a record $23 billion in bonuses for 2009. But most Americans know all too well that only the intervention of billions of dollars in taxpayer bailout money saved Goldman from the dire fate of its less well-connected competitors. The growing ranks of under-and-unemployed Americans, meanwhile, are waiting with increasing desperation for a recovery of their own.

Goldman is this century’s octopus — almost literally so. The most-quoted sentence in financial journalism this year, by Matt Taibbi of Rolling Stone, describes the company as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” That’s why Goldman’s chief executive, Lloyd Blankfein, recycled Rockefeller’s stunt last week: The announcement of Goldman’s spectacular third-quarter earnings ($3.19 billion) was paired with the news that the company was donating $200 million to its own foundation, which promotes education. In Goldman dollars, that largess is roughly comparable to the nickels John D. handed out to children a century ago. At least those kids could spend the spare change on candy.

Teddy Roosevelt’s trust-busting crusade ultimately broke up Standard Oil. Though Goldman did outlast three of its four major rival firms during last fall’s meltdown, it is not a monopoly. And there is one other significant way that our 21st-century vampire squid differs from Rockefeller’s 20th-century octopus. Americans knew what oil was, and they understood how Standard Oil’s manipulations directly affected their pocketbooks. Even now many Americans don’t know what Goldman’s products are or how it makes its money. The less we know, the easier it is for reckless gambling to return to capitalism’s casino, and for Washington to look the other way as a new financial bubble inflates.

As Wall Street was celebrating last week, Congress was having a big week of its own, arousing itself to belatedly battle some of the corporate suspects that have helped drive America into its fiscal ditch. The big action was at the Senate Finance Committee, which finally produced a health care bill that, however gingerly, bids to reform industries that have feasted on the nation’s Rube Goldberg medical system. At least health care, like oil, is palpable, so we will be able to keep score of how reform fares — win, lose or draw. But the business of Wall Street, while also at center stage in a Congressional committee last week, is so esoteric that the public is understandably clueless as to what, if anything, the lawmakers were up to, if anyone even noticed at all.

The first stab at corrective legislation emerging from Barney Frank’s Financial Services Committee in the House is porous. While unregulated derivatives remain the biggest potential systemic threat to the world’s economy, Frank said that “the great majority” of businesses that use derivatives would not be covered under his committee’s much-amended bill. It’s also an open question whether the administration’s proposed consumer agency to protect Americans from mortgage and credit-card outrages will survive the banking lobby’s attempts to eviscerate it. As that bill stands now, more than 98 percent of America’s banks — mainly community banks, representing 20 percent of deposits — would be shielded from the new agency’s supervision.

If it’s too early to pronounce these embryonic efforts at financial reform a failure, it’s hard to muster great hope. As the economics commentator Jeff Madrick points out in The New York Review of Books, the American public is still owed “a clear account of the financial events of the last two years and of who, if anyone, is seriously to blame.” Without that, there will be neither the comprehensive policy framework nor the political will to change anything.

The only investigation in town is a bipartisan Financial Crisis Inquiry Commission created by Congress in May. It is still hiring staff. Its 10 members are dispersed throughout the country, and, according to a spokeswoman, have contemplated only a half-dozen public sessions over the next year. Such a panel, led by the former California state treasurer Phil Angelides, seems highly unlikely to match Congress’s Depression-era Pecora commission. That investigation was driven by a prosecutor whose relentless fact-finding riveted the country and gave birth to the Securities and Exchange Commission, among other New Deal reforms. Last week, we learned that the current S.E.C. has hired a former Goldman hand as the chief operating officer of its enforcement unit.

Even as we wait for Congress and its inquiry to produce results, the cultural toxins revealed by our economic crisis remain unaddressed by the leaders in the private and public sectors who might make a difference now. Blankfein may be giving $200 million to “education,” but Goldman is back to business as usual: making money by high-risk gambling, with all the advantages that the best connections, cheap loans from the Fed and high-speed trading algorithms can bring. As the Reuters columnist Rolfe Winkler wrote last week, “Main Street still owns much of the risk while Wall Street gets all of the profit.”

The idea of investing in the real economy — the one that might create jobs for Americans — remains outré in this culture. Credit to small businesses remains tight. The holy capitalist grail is still the speculative buying and selling of companies and the concoction of ever more esoteric financial “instruments.” The tragic tale of Simmons Bedding recently told in The Times is a role model. This successful 133-year-old manufacturing enterprise was flipped seven times in two decades by private equity firms. Investors made more than $750 million in profits even as the pile-up of debt pushed Simmons into bankruptcy, costing a quarter of its loyal workers their jobs so far.

Most leaders in America are against this kind of ethos in principle. Last month the president of Harvard, Drew Gilpin Faust, contributed a stirring essay to The Times regretting that educational institutions did not make stronger efforts to assert the fundamental values of pure intellectual inquiry while “the world indulged in a bubble of false prosperity and excessive materialism.” She rued the rise of business as the most popular undergraduate major, an implicit reference to the go-go atmosphere during the reign of her predecessor, Lawrence Summers, now President Obama’s chief economic adviser.

What went unsaid, of course, is that some of Harvard’s most prominent alumni of the pre-Faust era — Summers, Blankfein, Robert Rubin et al. — were major players during the last two bubbles. As coincidence would have it, the same edition of The Times that published Faust’s essay also included an article about how Harvard was scrounging for bucks by licensing a line of overpriced preppy clothing under the brand Harvard Yard. This sop to excessive materialism will be a scant recompense for the $11 billion Harvard’s endowment managers lost in their own bad gamble on interest-rate swaps.

Obama has also passed through Harvard. (Disclosure: so did I.) He too has consistently said all the right things about the “money culture” of “quick kills and bloated bonuses,” of “reckless behavior and unchecked excess.” But the air of entitlement that continues to waft from his administration sends another message.

In particular, the tone-deaf Treasury secretary, Timothy Geithner, never ceases to amaze. His daily calendars reveal that most of his contacts with the financial sector in the first seven months of 2009 were limited to the trinity of Goldman Sachs, Citigroup and JPMorgan. And last week Bloomberg News reported that his inner circle of “counselors” — key advisers who, conveniently enough, do not require Senate confirmation — are largely drawn from the same club. It’s hard to see how any public official can challenge a culture that he is marinating in, night and day.

Those Obama fans who are disappointed keep looking for explanations. Is he too impressed by the elite he met in Cambridge, too eager to split the difference between left and right, too willing to compromise? As he pursues legislation, why does he keep deferring to others — whether to his party’s Congressional leaders or the Congressional Budget Office or to this month’s acting president, Olympia Snowe? Why doesn’t he ever draw a line in the sand? “We know Obama has good values,” Jeff Madrick said to me last week, “but we don’t know if he has convictions.”

What we also know is that if Teddy Roosevelt palled around with John D. Rockefeller as today’s political class does with Wall Street’s titans and lobbyists, the tentacles of the original octopus would still be coiled tightly around America’s neck.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 27, 2009, 10:02:55 am
The debtors revolt is starting

http://www.nytimes.com/2009/10/25/business/economy/25gret.html

Quote
For decades, when troubled homeowners and banks battled over delinquent mortgages, it wasn’t a contest. Homes went into foreclosure, and lenders took control of the property.

On top of that, courts rubber-stamped the array of foreclosure charges that lenders heaped onto borrowers and took banks at their word when the lenders said they owned the mortgage notes underlying troubled properties.

In other words, with lenders in the driver’s seat, borrowers were run over, more often than not…

But some judges are starting to scrutinize the rules-don’t-matter methods used by lenders and their lawyers in the recent foreclosure wave. On occasion, lenders are even getting slapped around a bit.

One surprising smackdown occurred on Oct. 9 in federal bankruptcy court in the Southern District of New York. Ruling that a lender, PHH Mortgage, hadn’t proved its claim to a delinquent borrower’s home in White Plains, Judge Robert D. Drain wiped out a $461,263 mortgage debt on the property. That’s right: the mortgage debt disappeared, via a court order.

Just a reminder of some basic facts

http://www.ft.com/cms/s/0/b82d2b96-bc02-11de-9426-00144feab49a.html

Quote
Once perceptions of rising inflation return, central banks might be forced to switch towards a much more aggressive monetary policy relatively quickly – much quicker than during the previous cycle. A short inflationary boom could be followed by another recession, another banking crisis, and perhaps deflation. We should not see inflation and deflation as opposite scenarios, but as sequential ones. We could be in for a period of extreme price instability, in both directions, as central banks lose control.

This is exactly what the economist Hyman Minsky predicted in his financial instability hypothesis.  He postulated that a world with a large financial sector and an excessive emphasis on the production of investment goods creates instability both in terms of output and prices.

While, according to Minsky, these are the deep causes of instability, the mechanism through which instability comes about is the way governments and central banks respond to crises. The state has potent means to end a recession, but the policies it uses give rise to the next phase of instabiliy….The world has witnessed a proliferation of financial bubbles and extreme economic instability that cannot be explained by any of the established macroeconomic models. Minsky is about all we have.

His policy conclusions are disturbing, especially if contrasted with what is actually happening. In their crisis response, world leaders have focused on bonuses and other irrelevant side-issues. But they have failed to address the financial sector’s overall size. So if Minsky is right, instability should continue and get worse.

Our present situation can give rise to two scenarios – or some combination of the two. The first is that central banks start exiting at some point in 2010, triggering another fall in the prices of risky assets. In the UK, for example, any return to a normal monetary policy will almost inevitably imply another fall in the housing market, which is currently propped up by ultra-cheap mortgages.

Alternatively, central banks might prioritise financial stability over price stability and keep the monetary floodgates open for as long as possible. This, I believe, would cause the mother of all financial market crises – a bond market crash – to be followed by depression and deflation.

In other words, there is danger no matter how the central banks react. Successful monetary policy could be like walking along a perilous ridge, on either side of which lies a precipice of instability.

For all we know, there may not be a safe way down.

http://www.zerohedge.com/article/overview-feds-intervention-equity-markets-primary-dealer-credit-facility

Quote
Recently, Zero Hedge presented a snapshot analysis of the various securities that made up the triparty repo agreement involving JPM, Lehman and the Fed. We uncovered numerous bankrupt companies' equities that were being pledged as collateral for what ultimately was taxpayer exposure. To our surprise, this discovery is not an exception, and in fact in the days immediately preceding the collapse of Bear Stearns first, and subsequently, Lehman Brothers, the Federal Reserve established and refined a program that permitted banks to pledge virtually any security as collateral, including not just investment grade bonds and higher ranked securities, but also stocks of companies, the riskiest investment possible, and a guaranteed way for taxpayer capital to evaporate in the context of a disintegrating financial system, all with the purpose of bailing out Wall Street's major institutions. On two occasions last year: on March 16, 2008, and subsequently on September 14, 2008, the Federal Reserve first established what is known as the Primary Dealer Credit Facility (PDCF), and subsequently amended it, so that the Fed, in becoming the lender of last resort, would allow any collateral, up to and including stocks, to be funded by the Federal Reserve's credit facility, in order to prevent the $4.5 trillion repo financing system from imploding. By doing so, the Federal Reserve effectively gave a Carte Blanche to primary dealers to purchase any and all equities they so desired, with such purchases immediately being funded by the US taxpayer, via the PDCF. In essence, this was equivalent to the Fed purchasing equities by itself through a Primary Dealer agent.

Readers who have been concerned with the moral hazard provided by the Fed's monetization of Treasury and Mortgage debt, should be doubly concerned by this Fed action which sent three key messages to Wall Street: i) it made sure that Primary Dealers would generate massive profits on risky assets as the Fed would provide the funding to acquire any and all stocks (keep in mind the cost of funding of the PDCF to primary dealers was negligible); ii) it tipped its hand as to the existence and modus operandi of the rumored "plunge protection team," iii) and it made clear that the much maligned, by none other than Chairman Bernanke, concept of "moral hazard" is the one and only systemically relevant doctrine as long as the Fed's Chairman is in control, and not subject to any auditing auspices. The fact that PDs used over $140 billion of taxpayer money within a few weeks of the program's expansion in September to fund what one can assume were exclusively equity purchases, demonstrates that the American financial system got the message.

http://pong.tamu.edu/wp/?p=298

Exactly right:

Quote
So what is the Dow Jones Industrial Average, a number that even those bomb-throwing ultraliberals at NPR worship on a daily basis? It’s a stock market index based on the stock prices of 30 publicly held companies in the U.S. So who’s in it and how did they get there? The wikipedia entry tells us that “the individual components of the DJIA are occasionally changed as market conditions warrant.” The accompanying table shows us that the oldest company in the current DJIA (General Electric) has been a member since 1907, with the newest companies (Cisco and Travelers) joining in June of this year. To put it another way, the DJIA is an arbitrary number based on the arbitrary choice of 30 publicly owned companies out of thousands that exist at any given time. The losers are booted out - Cisco and Travelers replaced GM and Citigroup, for instance - and the winning flavors of the month get their invitation to the cigar and brandy club. If GM and Citigroup hadn’t been given the bum’s rush, the DJIA would almost certainly not have gone over 10,000 a couple of days ago, and we would have been spared the triumphalist sights and sounds of the usual army of hucksters, halfwits and whores employed to endlessly chant “buy stocks.”

It is left as an exercise for the reader to figure out how many of the current DJIA cabal are  members of the FIRE (finance, insurance, real estate) sector, and also which ones can be construed to be “Industrial” (ignoring for now the location of the industries vis a vis the continental U.S.).  To be brief and perhaps flippant, the DJIA shows us that we charge each other rent, take a lot of drugs  (3 pharmaceutical companies), buy a lot of shoddy merchandise and software, buy a lot of military hardware (Boeing, Caterpillar, General Electric and United Technologies), and really like our cartoons.  Quite a change from the historical components of the DJIA.

And finally

http://feedproxy.google.com/~r/NakedCapitalism/~3/vKiiGyJrWH4/pay-czar-decides-to-collect-a-few-scalps-a-sign-of-weakness.html

Quote
The Wall Street Journal reports that the pay czar, Kenneth Feinberg, is going to cut executive comp at 7 TARP recipients for the 25 most highly paid employees.

Does this really mean anything? The press will noise it up as significant (and some outlets will no doubt finger wag at this “interference”) but the short answer is no.

First, recall Feinberg’s hollow mandate. He is limited to only TARP recipients, not the beneficiaries of other forms of government largesse. And as anyone who has an operating brain cell knows, the number of firms on the dole and the degree of subsidies is much greater than the TARP. Have a look at the Fed’s balance sheet for a reality check.

Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on October 27, 2009, 12:40:01 pm
As far as the mortgage thing goes, was it here we were discussing a case where, since the whole derivitives and mortgage buying/selling, credit-default-swapping, slicing up mortages thing went down, nobody knows exactly who owns the mortgage, and some people are trying to get court precidents stating that unless you can track the paper trail of the mortgage precisely, the banks can't make a claim on it?


Wow, that was really convoluted.


I think I mean to say, if the mortgage has been repeatedly bought, sold, and sliced, the bank can't make a claim on it unless they can show exactly who owns what part of it; meaning they can't forclose.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jenne on October 27, 2009, 01:47:55 pm
That would be nice.  Let's see how far it sticks and how quickly they can generate the paper to undo it, however.
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on October 27, 2009, 09:54:40 pm
As far as the mortgage thing goes, was it here we were discussing a case where, since the whole derivitives and mortgage buying/selling, credit-default-swapping, slicing up mortages thing went down, nobody knows exactly who owns the mortgage, and some people are trying to get court precidents stating that unless you can track the paper trail of the mortgage precisely, the banks can't make a claim on it?


Wow, that was really convoluted.


I think I mean to say, if the mortgage has been repeatedly bought, sold, and sliced, the bank can't make a claim on it unless they can show exactly who owns what part of it; meaning they can't forclose.

Its been discussed here, and by now there's a *ton* of precedent (including one ruling that invalidates something like 60% of the mortgages in one state).  There are also explicit laws about the bank needing paperwork in a lot of states.

Something that should be pointed out to people, is that even if you lose, without the paperwork trail it'd be possible to keep your house the entire time its in trial, and the system isn't exactly fast.

Also, watch em settle out of court *really* fast if you appeal and risk creating binding precedent for the state/district you live in.
Title: Re: UNLIMITED financial fuckery thread
Post by: Halfbaked1 on October 28, 2009, 08:20:03 am
So I read this article and was wondering what you lot thought of the general gist that the government run thing is going to end up costing us bad.  I think this guy is pretty much spot on.  I do not have insurance, I would like to have it though, and if the government has a cheap option that helps me I would be willing to participate.  But I do not like the idea that whether I wanted to participate or not I am expected to carry part of the burden.

http://www.smartmoney.com/investing/economy/this-health-care-reform-might-tax-us-to-death/?hpadref=1
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on October 28, 2009, 09:51:06 am
Not so much financial fuckery as "lol pwned", from all the way back in 2007

http://archive.redstate.com/stories/liberals/finally_a_good_idea_from_greenpeace_on_global_warming

Quote
I firmly believe that Anthrogenic Global Warming™ has jumped the shark. Dr. Gore's Academy award has cemented AGW's position as an established tenet of secular faith, along with inner-city children dropping like flies, the eeee-vil of Christianity, and the coming subprime-mortgage-induced recession.

Yeah, good thing that never materialized.
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on October 28, 2009, 12:43:19 pm
So I read this article and was wondering what you lot thought of the general gist that the government run thing is going to end up costing us bad.  I think this guy is pretty much spot on.  I do not have insurance, I would like to have it though, and if the government has a cheap option that helps me I would be willing to participate.  But I do not like the idea that whether I wanted to participate or not I am expected to carry part of the burden.

http://www.smartmoney.com/investing/economy/this-health-care-reform-might-tax-us-to-death/?hpadref=1

1) If you make more that $280,000 a year and can't pay an extra $7 a day for the increased tax (the "1% surcharge"), you're doing something wrong.

2) The majority of "working class Joes" already have health insurance. 

3) The "top marginal" tax rate affects approximately 0.5% of the country.

Title: Re: UNLIMITED financial fuckery thread
Post by: Halfbaked1 on October 28, 2009, 11:23:15 pm
Okay, I still don't much care for not having a choice.  The reason I do not have health insurance is that I currently cannot afford the crappy coverage that the company I work for offers.  But under the reform I will purchase health insurance or pay an excise tax.  So I end up looking at what will cost me less the tax or the insurance.  I still haven't seen what the public option will look like and I know from experience how Medicare works, and doesn't.  The house shot down a measure that would protect doctors from decreased compensation, a prime reason why many doctors do not take Medicare, so that will probably result in more doctors declining Medicare.  I point that out because if reid doesn't back down from the public option then I only have medicare to look at as a model for government run healthcare.  I do not see the value in buying an insurance policy that is not accepted by many doctors and will not pay for my medications.  I may as well stay uninsured if my doctors and my meds are not covered.  My wife has Medicare and has to pay EXTRA for a supplemental insurance to cover most of her medications.  Again, this does not seem like an economical idea, more like another political fuck you from the government.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on November 02, 2009, 10:20:22 pm
http://trueslant.com/matttaibbi/2009/10/30/forget-galleon-what-about-goldmans-ex-boss/

Quote
It’s impossible to grasp the totality of Friedman/Goldman’s grossness with regard to the AIG story without a little context. Remember the basic timeline. In the middle of the mortgage bubble, Goldman Sachs found a patsy-buffoon named Joe Cassano at a little corner of AIG called AIG Financial Products, or AIGFP. Cassano was recklessly writing hundreds of billions of dollars worth of credit default swaps for banks like Goldman and Deutsche, essentially insuring certain investments for these banks, including extremely risky mortgage-backed deals.

Goldman took out billions of these CDS positions with Cassano, who had written upwards of $440 billion of these CDS without having even a fraction of the money he would have needed to cover that bet in the event of a disaster of the type that actually ended up taking place, specifically a downgrade of AIG’s credit rating that forced Cassano to pony up wads of cash to cover those positions.

The important thing to remember about all of this is that just because Goldman was buying “insurance” from Cassano, that doesn’t mean they were being responsible. On the contrary: Goldman was creating well over ten billion dollars worth of exposure to a guy that they must have known was an absolute idiot. Now, in a world where actual capitalism existed, Goldman should then have been highly invested in making sure that AIG did not go under. A dead and bankrupt AIG should not have been good news to a company like Goldman Sachs, which had billions of dollars riding on AIG’s financial health.

But if anything Goldman behaved throughout the runup to AIG’s collapse like it couldn’t care less if the company died. In fact Goldman accelerated AIG’s demise by making margin calls against AIG, for both the CDS deals and for deals it had done with Win Neuger, who was running AIG’s securities lending business. What really sank AIG was the fact that the downgrade of its credit rating permitted companies like Goldman to demand large sums of money from AIG in the form of these margin calls, and AIG could not get its hands on enough cash to meet its demands, resulting in the death spiral situation we all witnessed last September. Of all the firms making such demands against AIG, Goldman was the most aggressive (I have more on this coming out in a forthcoming book) and my sources who were involved in the AIG bailout bunker scene of a year ago almost to a man report that Goldman and its chief Lloyd Blankfein took an extremely hard line with AIG.

Why would it act like that? Well, in a normal capitalistic situation, it wouldn’t. But Goldman, it turned out, had an ace in the hole. It seems that when the state stepped in and decided to bail AIG out, its former director, Stephen Friedman, was among those making the decision that AIG’s counterparties should be paid 100 cents on the dollar for its CDS debts. It never made sense that AIG/AIGFP would decide on its own to pay its creditors 100 cents on the dollar for its debts, but now we know, thanks to reporting from Bloomberg, that it wasn’t AIGFP and its CFO Elias Habayeb who was making that decision.

It was, instead, a group of people from the New York Fed who gave that order a group that included Tim Geithner and Friedman. Goldman ended up getting almost $14 billion from AIG after the bailout. And Friedman, we later found out, bought 50,000 shares of Goldman stock after this deal was struck. He resigned in May from the Fed, a few days after the Wall Street Journal broke the story about Friedman’s stock purchases.

Friedman surely had information about key moves involving the bank — like Goldman getting paid off at par in the AIG bailout, or Goldman getting a federal bank charter overnight so that a mountain of cheap Fed money could save it from bankruptcy — before the market got it. That he bought 50,000 shares in Goldman after the AIG bailout and is not in jail right now is sort of amazing, until you consider that it will be a cold day in hell before a former head of Goldman Sachs is arrested for insider trading, even when he gets caught doing it red-handed.

All of this matters for two reasons. One, it’s yet another example of how Goldman’s success isn’t attributable to how “smart” the bank and its employees are.

Instead of working something out with a company it had stupidly become overexposed to, Goldman instead hastened AIG’s demise because it was, perhaps, the one way it could cash in fully on its reckless deals — by forcing it into the arms of the government and getting the taxpayer to pony up for Cassano’s dumb calls.

Had AIG proceeded to an ordinary bankruptcy, had the company’s downfall happened via normal market procedures, Goldman might have gotten 40, 50, maybe 60 cents on the dollar. If that! Instead it got completely paid off, among other things because its connections to the government actually incentivized it to cripple a company to which it was exposed to the tune of billions.

Second, the non-punishment of Friedman just stands out like a hairy, golf-ball-sized mole on the face of the American capital markets. No question about it, it’s interesting that Galleon and Raj Rajaratnam are getting perp-walked by the FBI (note that it’s the FBI, and not the castrated and seemingly completely captive SEC, that’s going to be pushing these enforcement actions). Galleon isn’t small potatoes and from what I understand there are other hedge funds with even higher profiles that may fall later on. These are surprising and meaningful moves and and it suggests that the enforcement community is not yet completely corrupted.

Emphasis mine, words Matt Taibbi's and complete and utter lack of shame, all Goldman Sachs.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on November 02, 2009, 11:47:27 pm
We're gonna have to eat these people, one fine day.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on November 03, 2009, 09:11:04 am
It also turns out that Goldman Sachs was betting on a housing market collapse before the crisis really set in, and made a major killing on this "guess".  I'll find the link in a bit.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on November 22, 2009, 04:54:42 pm
Bleh, I lost the link  :sad:

BUT!

Green shoots are showing in Arizona's 15th Congressional District.  Shame it doesn't exist (http://abcnews.go.com/Politics/jobs-saved-created-congressional-districts-exist/story?id=9097853).

Quote
Here’s a stimulus success story: In Arizona’s 15th congressional district, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that’s what the Web site set up by the Obama administration to track the $787 billion stimulus says.

There’s one problem, though: There is no 15th congressional district in Arizona; the state has only eight districts.

And ABC News has found many more entries for projects like this in places that are incorrectly identified.

Late Monday, officials with the Recovery Board created to track the stimulus spending, said the mistakes in crediting nonexistent congressional districts were caused by human error.

Bankruptcies soar in Canadia (http://www.cbc.ca/canada/nova-scotia/story/2009/11/20/bankruptcy-statistics-september.html):

Quote
The number of bankruptcies across the country was 43 per cent higher in September than at the same point a year ago, government data shows.

The latest figures provided by the Office of the Superintendent of Bankruptcy Canada show the increase is disproportionately slanted towards consumer bankruptcies over business insolvencies. The September figure for the former was up by 45.5 per cent in the last year; the latter by only 1.6 per cent.

One in Seven U.S. Mortgages Foreclosing or Delinquent (http://www.reuters.com/article/bondsNews/idUSN1937065020091119):

Quote
A record one in seven U.S. mortgages were in foreclosure or at least one payment past due in the third quarter, according to fresh data signaling the recovery in the housing market will be tepid at best.

U.S. mortgage delinquency rates and the percentage of loans that entered the foreclosure process also jumped to records from July to September, the Mortgage Bankers Association said on Thursday.

Rising job losses were behind the increasingly bleak portrait of the housing market in a trend that will continue into next year, the group said in data that adds to recent evidence of a still-struggling housing market.

Housing and related business account for about 20 percent of the economy and recovery is essential to bring unemployment down from a 26-1/2-year high and kick-start economic growth.

Yet record foreclosures will add to the growing supply of unsold homes, sapping the housing market as it attempts to recover from the worst slump since the Great Depression.

The MBA said the percentage of loans in foreclosure rose to 1.42 percent, from 1.36 percent in the second quarter and 1.07 percent in the third quarter of 2008.

“Foreclosures remain the biggest hurdle to the housing recovery,” said Michelle Meyer, economist at Barclays Capital in New York.

“Foreclosures will be worse in the first part of 2010 and we do not see a peak in foreclosures until the middle of next year.”

Bank of America, UBS, JPMorgan Sued Over Derivatives (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBMy4gnnFIk4&pos=7):

Quote
Bank of America Corp., UBS AG and JPMorgan Chase & Co. were sued by a California public utility over claims they rigged sales of municipal derivatives and shared illegal profits through kickbacks.

The lawsuit, filed by the Sacramento Municipal Utility District, is based on federal and state antitrust claims. It alleges Charlotte, North Carolina-based Bank of America and more than a dozen other banks conspired to pre-select winners of municipal derivative auctions, coordinated their pricing, and accepted kickbacks disguised as fees from co-conspirators.

The allegations resemble those made by a U.S. grand jury in New York last month, according to the lawsuit filed Nov. 12 in federal court in Sacramento. CDR Financial Products Inc. founder David Rubin and two employees of the Beverly Hills, California- based company were indicted for allegedly accepting kickbacks on investments sold to local governments. CDR is also named as a defendant in the Sacramento case.

The banks engaged in “allocating customers and markets for municipal derivatives, rigging the bidding process by which municipal bond issuers acquire municipal derivatives, and conspiring to manipulate the terms that issuers received,” according to the lawsuit.

The charges against Rubin and the CDR employees were the first to result from a more than three-year investigation into bid-rigging in the municipal bond market. The probe is continuing and has already drawn in some two dozen banks, insurers and local government advisers.

U.S. Posts $176.36 Billion Deficit for October (http://online.wsj.com/article/SB125805524231245829.html):

Quote
The federal government kicked off fiscal year 2010 by posting its widest-ever October budget deficit, the Treasury Department said Thursday.

The $176.36 billion gap is more than $20 billion wider than the shortfall recorded in October 2008, driven up by lower tax receipts, stimulus-related revenue reductions and consistently high government outlays.

Treasury’s monthly budget statement shows receipts were $135.33 billion in October, down 18% from a year earlier and at the lowest level since October 2002. Meanwhile, outlays were $311.69 billion, down 3% from a year earlier and at their second-highest monthly level on record.

The October deficit figure is wider than the Congressional Budget Office’s estimate for a $175 billion deficit in the month and wider than the $165.9 billion expected by analysts surveyed by Dow Jones Newswires.

The Treasury on Thursday also revised September’s deficit to a slightly narrower $46.57 billion, from a previously reported $46.61 billion. Even with the revision, the U.S. in fiscal year 2009 posted a record total budget deficit of near $1.4 trillion — three times its previous record.

At the equivalent of 9.9% of gross domestic product, the figure is the widest U.S. deficit as a share of GDP since 1945.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on November 30, 2009, 09:36:54 am
So, who wants to invest in Dubai?

Incidentally, this one is going to hit Europe harder than the US.  A lot harder.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on November 30, 2009, 01:38:02 pm
1 in 7 mortgages delinquent or in foreclosure.

So housing prices drop FURTHER, and anyone with a new (5 years or less) mortgage will go upside down, even if they're making their payments.  Their loans will be called, making housing prices drop even further.  Rinse, repeat.

Ho ho!  The ship is capsizing!  Strike up the band!
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on November 30, 2009, 03:05:02 pm
I read somewhere recently that house prices were actually rising again, based on risky speculation.  Which is even worse than your scenario.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on November 30, 2009, 03:33:02 pm
1 in 7 mortgages delinquent or in foreclosure.

So housing prices drop FURTHER, and anyone with a new (5 years or less) mortgage will go upside down, even if they're making their payments.  Their loans will be called, making housing prices drop even further.  Rinse, repeat.

Ho ho!  The ship is capsizing!  Strike up the band!

wait...
why would a loan get called simply because the property is upside down?
that doesn't make sense at all...  why would they put a clause in for that scenario?
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on November 30, 2009, 08:35:04 pm
1 in 7 mortgages delinquent or in foreclosure.

So housing prices drop FURTHER, and anyone with a new (5 years or less) mortgage will go upside down, even if they're making their payments.  Their loans will be called, making housing prices drop even further.  Rinse, repeat.

Ho ho!  The ship is capsizing!  Strike up the band!

wait...
why would a loan get called simply because the property is upside down?
that doesn't make sense at all...  why would they put a clause in for that scenario?

They don't.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on November 30, 2009, 08:38:17 pm
1 in 7 mortgages delinquent or in foreclosure.

So housing prices drop FURTHER, and anyone with a new (5 years or less) mortgage will go upside down, even if they're making their payments.  Their loans will be called, making housing prices drop even further.  Rinse, repeat.

Ho ho!  The ship is capsizing!  Strike up the band!

wait...
why would a loan get called simply because the property is upside down?
that doesn't make sense at all...  why would they put a clause in for that scenario?

They don't.

They can and do call loans for that reason.  At the moment, all I have is anecdotes, but tonight I will do a little digging, when I'm not on a computer loaded with Websense filtering garbage.
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on November 30, 2009, 08:49:41 pm
1 in 7 mortgages delinquent or in foreclosure.

So housing prices drop FURTHER, and anyone with a new (5 years or less) mortgage will go upside down, even if they're making their payments.  Their loans will be called, making housing prices drop even further.  Rinse, repeat.

Ho ho!  The ship is capsizing!  Strike up the band!

wait...
why would a loan get called simply because the property is upside down?
that doesn't make sense at all...  why would they put a clause in for that scenario?

They don't.

They can and do call loans for that reason.  At the moment, all I have is anecdotes, but tonight I will do a little digging, when I'm not on a computer loaded with Websense filtering garbage.

You'll find you're mistaken. If the borrower continues to make payments on time, the lender cannot recall the mortgage.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on November 30, 2009, 09:21:04 pm
1 in 7 mortgages delinquent or in foreclosure.

So housing prices drop FURTHER, and anyone with a new (5 years or less) mortgage will go upside down, even if they're making their payments.  Their loans will be called, making housing prices drop even further.  Rinse, repeat.

Ho ho!  The ship is capsizing!  Strike up the band!

wait...
why would a loan get called simply because the property is upside down?
that doesn't make sense at all...  why would they put a clause in for that scenario?

They don't.

They can and do call loans for that reason.  At the moment, all I have is anecdotes, but tonight I will do a little digging, when I'm not on a computer loaded with Websense filtering garbage.

You'll find you're mistaken. If the borrower continues to make payments on time, the lender cannot recall the mortgage.

I may very well be mistaken.  I will look when I get to my home computer, one that doesn't filter out the entire friggin' interbutts.  Grumble, grumble, fucking Websense, grumble.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on November 30, 2009, 09:30:00 pm
yea. we've got 'eSafe' and it sucks ass too.... i feel your pain.

it seems to me that it would be self defeating to put an 'under water' statement in the acceleration clause....
if the person is making payments on a loan that is more than the value of the house, the lender is getting mo money than they would if they called the loan and likely forced the person into foreclosure...  then they would be able to get, at most, the market value of the house, which is already established to be less than the loan amount that they are currently raking in.  The only motivation i can think of is that, being underwater, they may be likely to start screwing up and eventually won't be able to make payments and go into tits up anyways, so the lender can call the loan and hopefully force them to refi (rather than foreclose), but that doesn't reflect the reality of the situation we are in where there aren't lenders raining from the sky anymore...
TGRR, what are you hearing is the motivation for the lenders to do this?
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on December 01, 2009, 10:01:42 pm
yea. we've got 'eSafe' and it sucks ass too.... i feel your pain.

it seems to me that it would be self defeating to put an 'under water' statement in the acceleration clause....
if the person is making payments on a loan that is more than the value of the house, the lender is getting mo money than they would if they called the loan and likely forced the person into foreclosure...  then they would be able to get, at most, the market value of the house, which is already established to be less than the loan amount that they are currently raking in.  The only motivation i can think of is that, being underwater, they may be likely to start screwing up and eventually won't be able to make payments and go into tits up anyways, so the lender can call the loan and hopefully force them to refi (rather than foreclose), but that doesn't reflect the reality of the situation we are in where there aren't lenders raining from the sky anymore...
TGRR, what are you hearing is the motivation for the lenders to do this?


You can't refinance an upside down loan unless you go through the Home Affordable program.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on December 01, 2009, 10:02:30 pm
yea. we've got 'eSafe' and it sucks ass too.... i feel your pain.

it seems to me that it would be self defeating to put an 'under water' statement in the acceleration clause....
if the person is making payments on a loan that is more than the value of the house, the lender is getting mo money than they would if they called the loan and likely forced the person into foreclosure...  then they would be able to get, at most, the market value of the house, which is already established to be less than the loan amount that they are currently raking in.  The only motivation i can think of is that, being underwater, they may be likely to start screwing up and eventually won't be able to make payments and go into tits up anyways, so the lender can call the loan and hopefully force them to refi (rather than foreclose), but that doesn't reflect the reality of the situation we are in where there aren't lenders raining from the sky anymore...
TGRR, what are you hearing is the motivation for the lenders to do this?


You can't refinance an upside down loan unless you go through the Home Affordable program.

Fuck.  I got distracted by bewbs and never looked that shit up.

Tonight.  If I am not assaulted.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on December 01, 2009, 10:03:59 pm
yea. we've got 'eSafe' and it sucks ass too.... i feel your pain.

it seems to me that it would be self defeating to put an 'under water' statement in the acceleration clause....
if the person is making payments on a loan that is more than the value of the house, the lender is getting mo money than they would if they called the loan and likely forced the person into foreclosure...  then they would be able to get, at most, the market value of the house, which is already established to be less than the loan amount that they are currently raking in.  The only motivation i can think of is that, being underwater, they may be likely to start screwing up and eventually won't be able to make payments and go into tits up anyways, so the lender can call the loan and hopefully force them to refi (rather than foreclose), but that doesn't reflect the reality of the situation we are in where there aren't lenders raining from the sky anymore...
TGRR, what are you hearing is the motivation for the lenders to do this?


In the (very) short term, foreclosures make perfect sense, if you're a bank CEO out to make a BIG increase on the books, then leave for a better job before reality sets in.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 01, 2009, 11:25:26 pm
In the (very) short term, foreclosures make perfect sense, if you're a bank CEO out to make a BIG increase on the books, then leave for a better job before reality sets in.

why would that increase the books?
if you own the debt that shows on the books as the value of the debt, plus interest.  if you foreclose on them you have a house that you have to mark to the market, right?
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on December 01, 2009, 11:51:25 pm
Because you have a credit default swap with AIG, so if you call in the loan (or more commonly, raise the interest rate), forcing a foreclosure,  AIG pays out the balance lost on the auction of the house.  So you get all that money today instead of over the next 30 years (plus the added value from the unpayably high interest rate).

Also, they changed the rules so that banks can sit on foreclosed property indefinitely, which means the bank can keep the value on the books of the house the last time it was appraised.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on December 02, 2009, 01:21:39 am
Because you have a credit default swap with AIG, so if you call in the loan (or more commonly, raise the interest rate), forcing a foreclosure,  AIG pays out the balance lost on the auction of the house.  So you get all that money today instead of over the next 30 years (plus the added value from the unpayably high interest rate).

Also, they changed the rules so that banks can sit on foreclosed property indefinitely, which means the bank can keep the value on the books of the house the last time it was appraised.

This.
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on December 02, 2009, 01:41:39 am
Okay, Nigel, I looked it up and here's the facts as far as I can tell:

1.  A bank cannot call a loan simply because the property is upside down.  They could in the 20s, but the Glass-Steagal Act ended that.  It is one of the few things NOT repealed by the Gramm/Leech/Bliley Act of 1998.

2.  However, the bank CAN call a "balloon loan" if the mortgage is structured as a shorter loan (ie, amortized over 30 years, but due in 20), they are not required to renew the loan (this used to be common practice, now they seem to foreclose immediately).

3.  The big fear seems to be that, rather than the bank foreclosing, masses will walk on their upside down loans.
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on December 02, 2009, 02:14:55 am
Okay, Nigel, I looked it up and here's the facts as far as I can tell:

1.  A bank cannot call a loan simply because the property is upside down.  They could in the 20s, but the Glass-Steagal Act ended that.  It is one of the few things NOT repealed by the Gramm/Leech/Bliley Act of 1998.

2.  However, the bank CAN call a "balloon loan" if the mortgage is structured as a shorter loan (ie, amortized over 30 years, but due in 20), they are not required to renew the loan (this used to be common practice, now they seem to foreclose immediately).

3.  The big fear seems to be that, rather than the bank foreclosing, masses will walk on their upside down loans.

The balloon loan thing happened with my sister. My sister was an idiot from the get-go and made things vastly worse for herself by ruining the house, though.

People are, indeed, walking away from their loans, and it's amazing. AMAZING. It will be sheer disaster. I intend to keep paying mine as long as I can, even if it goes upside-down.
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on December 02, 2009, 02:15:37 am
It cracks me up that my house was, at one point, "worth" nearly half a million dollars. I'm really glad we didn't try to cash out equity.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 02, 2009, 04:06:10 am
Because you have a credit default swap with AIG, so if you call in the loan (or more commonly, raise the interest rate), forcing a foreclosure,  AIG pays out the balance lost on the auction of the house.  So you get all that money today instead of over the next 30 years (plus the added value from the unpayably high interest rate).

Also, they changed the rules so that banks can sit on foreclosed property indefinitely, which means the bank can keep the value on the books of the house the last time it was appraised.

hm. interesting...
so under what clause do they call the loan?  Do you know what the status of AIG is after it's bailout in regards to it's ability to honor all the CDS derivatives?  are they likely to require more bailout?

as far as sitting on foreclosed property just so they can keep the artificially high appraisal on the books, that would just be a biding time strategy, right? since the value of the house is lower, and probably going to continue going south? (esp. after the next wave of rate resets hits next year on the option arms...)  They would presumably only do that if they didn't have a CDS on the mortgage asset that would payout immediately, right?
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on December 02, 2009, 10:02:26 am
See Roger for calling the loans (apparently its rare circumstances, and another killer contract clause).

It would be a time biding strategy, except the bit where entire neighborhoods (and in a few extreme cases, entire suburb towns) are going down, as more houses end up abandoned and local economies turn to absolute shit, those house prices are just going to fall even further.

Also, according to my various contacts inside the investment machines, the most likely outcome of all this will be that overall housing prices stay low for a while, since the price won't be allowed by investors to drop as low as the market needs it to be, so it has to wait for inflation to catch up.  Also couple this with the slow flood of houses coming off the foreclosure line.  It's currently estimated the banks are holding enough houses to cover every new home purchase for the next 10 years.  Not much room for prices to go up once they start selling.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 02, 2009, 05:25:09 pm
No, srsly.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahD2WoDAL9h0

Quote
“I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.

I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.

While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”

Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.

Pistol Ready

Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.

In other words, a little humility and contrition are probably the better route.

Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.

To the Barricades

He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.

This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.

So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?

Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”

Torn Curtain

There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.

This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.

Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.

Cool Hand Lloyd

No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.

And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on December 02, 2009, 05:45:13 pm
Because you have a credit default swap with AIG, so if you call in the loan (or more commonly, raise the interest rate), forcing a foreclosure,  AIG pays out the balance lost on the auction of the house.  So you get all that money today instead of over the next 30 years (plus the added value from the unpayably high interest rate).

Also, they changed the rules so that banks can sit on foreclosed property indefinitely, which means the bank can keep the value on the books of the house the last time it was appraised.

hm. interesting...
so under what clause do they call the loan?  Do you know what the status of AIG is after it's bailout in regards to it's ability to honor all the CDS derivatives?  are they likely to require more bailout?

as far as sitting on foreclosed property just so they can keep the artificially high appraisal on the books, that would just be a biding time strategy, right? since the value of the house is lower, and probably going to continue going south? (esp. after the next wave of rate resets hits next year on the option arms...)  They would presumably only do that if they didn't have a CDS on the mortgage asset that would payout immediately, right?

Just to point out that strategy wouldn't work with houses that were confirmed to be upside-down via an appraisal because it would show as a loss on the books.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 02, 2009, 06:16:07 pm
Just to point out that strategy wouldn't work with houses that were confirmed to be upside-down via an appraisal because it would show as a loss on the books.

Right.   I was assuming that when he referred to the last appraisal, it was the last appraisal that the lender did/ordered.  otherwise it would get marked down each year by the property tax appraisal, so there's no advantage...
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on December 02, 2009, 06:20:58 pm
Just to point out that strategy wouldn't work with houses that were confirmed to be upside-down via an appraisal because it would show as a loss on the books.

Right.   I was assuming that when he referred to the last appraisal, it was the last appraisal that the lender did/ordered.  otherwise it would get marked down each year by the property tax appraisal, so there's no advantage...

The property tax assessments are generally adjusted to the last bank appraisal/sale price, and then increase at a percentage annually after that. You can appeal your assessment, but it usually doesn't do a whole lot of good so most people don't.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 02, 2009, 06:30:45 pm
Just to point out that strategy wouldn't work with houses that were confirmed to be upside-down via an appraisal because it would show as a loss on the books.

Right.   I was assuming that when he referred to the last appraisal, it was the last appraisal that the lender did/ordered.  otherwise it would get marked down each year by the property tax appraisal, so there's no advantage...
oh that's true... they're still increasing tax assessment appraisals...  :lol:

The property tax assessments are generally adjusted to the last bank appraisal/sale price, and then increase at a percentage annually after that. You can appeal your assessment, but it usually doesn't do a whole lot of good so most people don't.
Title: Re: UNLIMITED financial fuckery thread
Post by: LMNO on December 02, 2009, 07:19:09 pm
if we had a complete meltdown, it could lead to people questioning the basis of the system.

Dare to dream.
Title: Re: UNLIMITED financial fuckery thread
Post by: Triple Zero on December 03, 2009, 09:01:14 am
Wow, this is beautiful. If anything, we should amp up these rumours about the bankers and the traders arming up to defend against a prole uprising. For the same reason talk of assassination was shunned during election times, for fear of talking about it making it more likely.
Would that work? Even if it doesn't cause people to go postal on bankers [think security guard that just lost his house?], spreading the rumours would make some bankers shit themselves?
Just make sure they know we know it's not just Goldman Sachs but all of those fuckers.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahD2WoDAL9h0

Quote
“I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.

I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.

While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”

Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.

Pistol Ready

Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.

In other words, a little humility and contrition are probably the better route.

Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.

To the Barricades

He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.

This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.

So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?

Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”

Torn Curtain

There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.

This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.

Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.

Cool Hand Lloyd

No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.

And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 03, 2009, 03:01:56 pm
Wow, this is beautiful. If anything, we should amp up these rumours about the bankers and the traders arming up to defend against a prole uprising. For the same reason talk of assassination was shunned during election times, for fear of talking about it making it more likely.
Would that work? Even if it doesn't cause people to go postal on bankers [think security guard that just lost his house?], spreading the rumours would make some bankers shit themselves?
Just make sure they know we know it's not just Goldman Sachs but all of those fuckers.

I totally support that.
Do you have any ideas regarding how best to spread these rumors among the ‘proles’?
There needs to be more news stories that report this as corroboration...
Various flavors of chain emails that would appeal to the various sectors of the demographic to spread them….
Also, although GS isn’t alone, they are heads and shoulders above the others from what I have read.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cramulus on December 03, 2009, 03:06:49 pm
this is a really strong angle for disinformation.

the "just uprising of the people" meme is gaining force, AIG and GS employees are a visible evil, and the rumor feeds these dark emotions people have re: DOING SOMETHING about the system being so broken. Doing something HARSH.

The whole concept is emotionally evocative.

I was reading an article about Crowdsourcing a few weeks ago, and somebody had suggested that there should be a database of AIG and GS employee addresses. And then the crowd would determine what it wants to do with those data. The implication was violent.

will think more about this


it may just be the angle we've been waiting for
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on December 03, 2009, 06:16:49 pm
this is a really strong angle for disinformation.

the "just uprising of the people" meme is gaining force, AIG and GS employees are a visible evil, and the rumor feeds these dark emotions people have re: DOING SOMETHING about the system being so broken. Doing something HARSH.

The whole concept is emotionally evocative.

I was reading an article about Crowdsourcing a few weeks ago, and somebody had suggested that there should be a database of AIG and GS employee addresses. And then the crowd would determine what it wants to do with those data. The implication was violent.

will think more about this


it may just be the angle we've been waiting for

I've been mentioning the idea that AIG/GS employees are buying firearms, alongside market indications that the whole mess will drop into the pot in February/March, at every board I go to.

And IRL.

Just for fun.
Title: Re: UNLIMITED financial fuckery thread
Post by: Triple Zero on December 03, 2009, 08:44:54 pm
well for starters, spreading that link. this is the faster-loading, no ads and crap print-page link btw:
http://www.bloomberg.com/apps/news?pid=20670001&sid=ahD2WoDAL9h0

continuing on that line, perhaps an AWS spoof article about people harassing bankers? Just, it need to be only high ranking management bankers, not the clerks behind the counter of course. That would have the opposite effect because the clerks are "one of us" (us being "the little people"). Which might cause sympathy and therefore resistance to the idea of harassing the bankers.

And what Roger said. I will certainly tell my friends.

Oh and I'll just tweet that link right now, too. Anyone got a good line to go with it? "Bankers arming up to defend from people uprising" is the first I can come up with. Needs more catchy.

Lemme check that SEO list of "catchy headline formats"

how about "Why are bankers arming themselves to defend from *** ?" <--- need a good phrase there. but the idea is by asking why, you step past the question whether they are or not.

should send this to @dangerousmeme too, he'd love that stuff, and gets a shitload of readers.

what about

"The number One reason why bankers are arming themselves"

(it doesn't really need to relate directly to the topic of the article, tangentially is also fine, as long as it's provoking.)

maybe

"Public outrage: Should bankers be watching their backs, or worse?"
Title: Re: UNLIMITED financial fuckery thread
Post by: The Good Reverend Roger on December 03, 2009, 10:27:16 pm
Just to point out that strategy wouldn't work with houses that were confirmed to be upside-down via an appraisal because it would show as a loss on the books.

Right.   I was assuming that when he referred to the last appraisal, it was the last appraisal that the lender did/ordered.  otherwise it would get marked down each year by the property tax appraisal, so there's no advantage...

The property tax assessments are generally adjusted to the last bank appraisal/sale price, and then increase at a percentage annually after that. You can appeal your assessment, but it usually doesn't do a whole lot of good so most people don't.

I DID acknowledge that I was mistaken, right?

Nigel was correct.  Banks cannot call a loan simply because it is upside down.

DAMMIT, JIM, I'M A HOLY MAN™, NOT AN ECONOMIST! (And I should remember that in the future.)
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on December 03, 2009, 11:37:35 pm
Just to point out that strategy wouldn't work with houses that were confirmed to be upside-down via an appraisal because it would show as a loss on the books.

Right.   I was assuming that when he referred to the last appraisal, it was the last appraisal that the lender did/ordered.  otherwise it would get marked down each year by the property tax appraisal, so there's no advantage...

The property tax assessments are generally adjusted to the last bank appraisal/sale price, and then increase at a percentage annually after that. You can appeal your assessment, but it usually doesn't do a whole lot of good so most people don't.

I DID acknowledge that I was mistaken, right?

Nigel was correct.  Banks cannot call a loan simply because it is upside down.

DAMMIT, JIM, I'M A HOLY MAN™, NOT AN ECONOMIST! (And I should remember that in the future.)

Yes, you did, and graciously at that. :)
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 04, 2009, 09:18:56 am
http://trueslant.com/matttaibbi/2009/11/30/goldman-sachs-arms-itself/

Quote
I’m reading this article on Goldman executives applying en masse for gun permits and I’m trying to decide exactly how funny it is on a scale of 1 to 10. Reader assistance here is definitely appreciated.

On the unfunny side: it’s never good when anyone buys guns, particularly not rich weenies with persecution complexes. Also, it might possibly be true that people have threatened Goldman bankers physically, which would really not be all that funny and would make me personally feel somewhat uncomfortable, although it would probably never be very high on the list of things I have to lose sleep over.

On the funny side, there are several things to consider. There’s the image of Goldman guys walking into Dean and DeLuca’s nervously grabbing at their holstered nines as they buy espresso and soy waffles. There’s the idea that some of these dorks might actually think that they’re going to forestall proletarian rebellion by keeping guns in their Hamptons beach houses. There’s even the impossible-to-resist image of a future accidental shooting of some innocent hot dog vendor on Park Avenue, followed by the inevitable p.r. response from Goldman in which the bank claims that the only thing its employees are guilty of is “being really good at shooting people.”

Certainly, there are things to ponder on both sides. Right now I’m leaning toward making this a seven on the funny scale, trending toward eight. Advice more than welcome.
Title: Re: UNLIMITED financial fuckery thread
Post by: BabylonHoruv on December 08, 2009, 10:49:53 pm

Lemme check that SEO list of "catchy headline formats"

how about "Why are bankers arming themselves to defend from *** ?" <--- need a good phrase there. but the idea is by asking why, you step past the question whether they are or not.




"Are bankers arming themselves to defend against us?"
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 09, 2009, 09:14:15 am
I can't wait until a bank hires Blackwater to defend its upper management.

It will be like a perfect storm of entitled fuckups who should be in jail.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 09, 2009, 09:27:24 am
http://www.zerohedge.com/article/grayson-rips-bernanke-over-latest-aig-bailout-insinuates-attempted-irs-fraud-grossly-illegal

Is AIG attempting fraud on the IRS?  Alan Grayson thinks so.

http://business.timesonline.co.uk/tol/business/economics/article6945979.ece

UK government runs out of the imaginary money it magics out of thin air

http://www.pivotcapital.com/research.html

Is China's spending bubble about to collapse?  Looks possible.

http://www.newsweek.com/id/225781

Surprise!  Goldman Sachs wrote 9 pages of proposed changes to derivatives legislation.

http://feedproxy.google.com/~r/InfectiousGreed/~3/PYP6oMSVjG0/the_trouble_wit_61.html

And Paul Kedrosky has written a haiku about the financial crisis:

AIG bankrupt;
your taxes gone to Greenwich;
no one hears your screams
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 11, 2009, 09:21:55 am
http://www.ajc.com/business/house-scales-back-proposed-236793.html

Quote
WASHINGTON — House Democrats head into the final stretch on a long-awaited Wall Street regulation bill with two crucial and contentious votes looming before they can declare victory on one of President Barack Obama's legislative priorities.

The sweeping regulatory overhaul aims to address the myriad conditions that led to last year's financial crisis.

Test votes during two days of debate indicate that Democratic support for the underlying legislation will hold in final passage. Prodded by moderates, however, nearly half the Democrats teamed up with Republicans late Thursday to loosen restrictions on derivatives and reject tougher regulations.

[...]

The U.S. Chamber of Commerce has been an aggressive opponent of the legislation, running television ads against the proposed consumer agency and pressuring lawmakers to vote to eliminate it and to ease the derivatives regulations.

The legislation still imposes restrictions on derivatives, aiming to prevent manipulation in and bring transparency to a $600 trillion global market. An amendment by New York Democrat Scott Murphy, adopted 304-124 Thursday night, exempted businesses that trade in derivatives, not as financial speculators, but to hedge against market fluctuations such as currency rates or gasoline prices. The amendment also provided an exception for businesses that are not considered too big to be a risk to the financial system.

A Democratic effort to make more companies subject to derivatives regulation failed 279-150.

Let's party like its 1999!
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 11, 2009, 09:55:40 pm
Not entirely related, in that its an anecdote about a personal experience posted on another board rather than a story about the fuckers in charge at the banks, but funny none the less...

Quote
Have a friend that is having some problems right now. He was laid off from his job and is on unemployment.

As are most he lives paycheck to paycheck and has a significant amount of consumer debt. He lacks the ability to pay anything other than his mortgage. Has not made any payments on credit cards for about 3 months now.

Capital One called him today and as usual he gave them the story of his inability to make any payments at this time. Caller asked him to hold for a supervisor. Turns out the supervisor was basically a solution provider.

They started out by suggesting he work with his utility company to get on a hardship plan and try reworking some auto loans. Supposedly, this was to free up other obligations so he could pay Capital One a little bit to keep his accounts from going to charge off status.

This is where it gets good. The next thing the lady from Capital One asked was if he was in good health. He responded with a yes. She then suggested that he could sell blood to a plasma bank and for that he would be able to get $200 a month by doing that on a regular basis and that would help him to get back on track.

I couldn't believe it when he told me that. He has assured me that it is 100% accurate as to how the whole thing went down.

By the way, I advised him to just ignore all requests for payment and let them go to collections as their is not much else he can do. If he gets back on his feet maybe he can rework something then.

Has anybody here heard that these credit card companies are actually doing this as a common practice?

perhaps a red flag should have come up when his loan officer introduced himself as Shylock!  :lulz:
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 12, 2009, 12:06:11 pm
Wow.

How long before they accept organ donations?  I'm giving it a year.  I reckon if I sell a kidney and part of my liver, I could probably pay off all my student debt.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on December 14, 2009, 12:26:55 am
another tertiarily related note:
http://news.bbc.co.uk/2/hi/uk_news/england/suffolk/8410453.stm
Guy with a Whack-a-mole game in his Suffolk arcade turns it into a whack-a-banker game. proves to be popular....
this should be done with realistic bankers images and every so often one should pop up with a little pistol in his hand and if you whack it, receive a penalty.  some mention of prole uprising should be mentioned.
(http://newsimg.bbc.co.uk/media/images/46910000/jpg/_46910195_banker2226.jpg)
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on December 14, 2009, 08:31:51 am
Six months and a couple of geeks and you could easily rewrite that Kill George W Bush Game that Al-Qaeda put out (seriously, look it up) with bankers, and set it in New York and London instead of Iraq.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on January 05, 2010, 11:11:57 am
http://www.bloomberg.com/apps/news?pid=20601039&sid=a48c8UpUMxKQ

Quote
[Barney Frank's bill, H.R. 4173] supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around.

Best of all, the bill contains a provision that, in the event of another government request for emergency aid to prop up the financial system, debate in Congress be limited to just 10 hours.

The next crisis is around the corner, and this is the financial equivalent of buying a Honda full of silver and an AK-47.  Someone is going to be left footing the bill, but it sure as hell aint going to be the biggest banks and financial service providers.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on January 05, 2010, 01:44:57 pm
Commas and Zeros
commas and zeros
they casually slip in orders of magnitude while we are still reeling from the shock of innumeracy brought on by the previous insult to us.

It works. i fail to be shocked by this newsbit.
in the midst of the last crisis the rally cry was denial, only after the delta minuses started looking around and saying that we're fucked did they let slip to term "recession", then they screamed economic doom if we don't polish the crooks knobs.
rinse, repeat.
green shoots.
saved the day.
pat on the back, Geithner.
anyone who's following this shit knows that we've got another lump coming up, looking significantly larger than the last.  So now they lay the groundwork for more shock doctrine robbery... 

Jesus christ...
i gotta step up the preps.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on January 05, 2010, 02:46:37 pm
The only reason America hasn't already flamed out is because the rest of the world is doing its best to stop an American collapse. If you do a comparison between the US economy now and the Argentinian economy before the crash, Argentina was actually performing better.  I think just the other day, the US suggested China buy more US dollar reserves and China said it had bought everything it could find. 

Speaking of which, funny how just a day or two after that, a report came out blaming China for the global economic crisis.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on January 05, 2010, 03:00:32 pm
heh... yeppa.
the Argentine peso wasn't the worlds reserve currency, so it collapsed unsupported.
We can export our inflation, though, so the rest of the world has to suck down our incompetence and hubris until they are full up before we collapse. (which doesn't look too far off)
Regional currencies are on the rise, and central banks are buying gold like its vaporizing despite the record prices. 
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on January 05, 2010, 07:22:05 pm
Cain,
Curious what you think.  A member at my other pet forum posted this:

To foretell the future, think like a banker
________________________________________
To extort the maximum value from a population, when one has control of monetary system, leverage the laws of supply and demand. Use deflation, inflation, and hyperinflation all as tools to transfer wealth. All have a place and a purpose.

The banker's guide to owning it all
1.   Become majority lender in an economy of people with assets you want.
2.   Encourage indebtedness by loaning generously while securing on assets of interest.
3.   Loosen lending standards until the assets you seek to capture are attached.
(this makes the economy debt dependent)
4.   Once debts are significant for the bulk of the population, sharply tighten lending standards. <-- Economic shock - Onset of deflation
5.   Backstop losses with public guarantees if possible. This is gravy if one can get it.
(Fannie and Freddie guarantees, for example)
6.   Permit default 'without risk' on the assets you wish to sieze to maximize wealth transfer.
(stall foreclosure, stay repossession orders etc)
7.   Stall the economy to maximize default positions and deplete private liquidity. <-- We are here
8.   Successively ratchet the economy downhill, while bettering secured positions.
9.   In a series of large actions, sieze all security for default. Target the assets of greatest interest first.
(This deals a heavy economic blow and can help cause the ratcheting required for step 8.)
10.   Transfer asset ownership, but retain prior owners as renters where possible.
(This reduces public lashback and helps maintain the asset for resale)
11.   Once the bulk of assets of transferred, write them down to leverage the public financial backstop.
12.   Buy up as many remaining assets on the cheap as possible. Hide this action.
13.   Hyperinflate to destroy the external claims on wealth. <-- Onset of hyperinflation
(This destroys treasuries, gov't bonds, currency. Ensures free title on new assets. May cause war.)
14.   Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.

Hyperinflation is only a risk to the wealthy if the population has the assets.
Make note of that statement. It is key to timing the shift from deflation to hyperinflation.
-------------------------------------------------------------------------



It echos a quote that is a favorite of that forum:
Quote
Thomas Jefferson;

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on January 05, 2010, 08:09:42 pm
9 is actually starting to happen, to a degree.

Overall, while I am not an economist, politically it makes perfect sense.  I'm not sure about the curreny destruction part, but the rest all seems plausible enough.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on January 05, 2010, 08:23:22 pm
What large security grabs have you seen?
i think we haven't seen anything yet.  just a trickle.  Commercial real estate and second wave of residential real estate crapout is going to hit this year...
there will be big grabs then maybe...

incidentally, if you want to take a good position in this ride, one should clear any secured debt and build up a cash position in anticipation of step 12 or so, when things are bargain basement.
better we buy them than the bankers....
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on January 05, 2010, 08:29:52 pm
Well, they haven't been large ones, but I've been hearing about JP Morgan and others starting to purchase outright financial brokers (like their deal with Cazenove last month) so I presume this would be the next step.  I will admit I don't follow the minutiae of the finance world and this single example may be skewing my perceptions.
Title: Re: UNLIMITED financial fuckery thread
Post by: BabylonHoruv on January 05, 2010, 09:55:56 pm
What large security grabs have you seen?
i think we haven't seen anything yet.  just a trickle.  Commercial real estate and second wave of residential real estate crapout is going to hit this year...
there will be big grabs then maybe...

incidentally, if you want to take a good position in this ride, one should clear any secured debt and build up a cash position in anticipation of step 12 or so, when things are bargain basement.
better we buy them than the bankers....


Only problem with that is that inflation makes cash reserves much less valuable.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on January 05, 2010, 10:07:25 pm
We’ve been steadily inflating for decades.  Right now the environment is deflationary.  This guys model says that deflation will crap out the economy and then you can buy assets at rock bottom prices then they hyperinflate to extinguish their debts when they have secured the assets…
So you buy before they do that.
Or if you’re already in debt, you should liquidate your assets and put them into something you can hide from the banks that will retain value.  Ride out the storm and then payoff your debts with proceeds from your hidden wealth in hyperinflated currency.
There’s like this huge argument in the inflation vs. deflation camps of economic doom n gloomers.  And partly that is due to loose definitions, I think
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on January 09, 2010, 03:21:39 pm
Wolfgang Manchau at the Financial Times seems to think it will be massive deflation followed by hyperinflation, and anyone arguing for merely one side or another is a bit simple.

Also, fuck you, banks

http://www.ft.com/cms/s/0/caffc078-fc97-11de-bc51-00144feab49a.html

Quote
City bankers will suffer little or no impact from the bonus supertax imposed by the government last month, according to a Financial Times poll of leading investment banks.

Most banks, polled in an anonymised survey, said they would absorb all or part of the cost of the one-off 50 per cent tax by inflating their bonus pools, even at the risk of irritating the government and their own shareholders.

This is just staggering.  Also, the bit about "government and their own shareholders" should just read "government" now.  They threw tantrums about leaving the country, about witholding loans, and now they're just going to inflate their bonuses to where they're comfortable with so the tax doesn't get them.

I dread how much shit they are going to pull over the summer (Parliamentary recess) and once the Tories are in power.
Title: Re: UNLIMITED financial fuckery thread
Post by: BabylonHoruv on January 09, 2010, 09:06:19 pm
Wolfgang Manchau at the Financial Times seems to think it will be massive deflation followed by hyperinflation, and anyone arguing for merely one side or another is a bit simple.

Also, fuck you, banks

http://www.ft.com/cms/s/0/caffc078-fc97-11de-bc51-00144feab49a.html

Quote
City bankers will suffer little or no impact from the bonus supertax imposed by the government last month, according to a Financial Times poll of leading investment banks.

Most banks, polled in an anonymised survey, said they would absorb all or part of the cost of the one-off 50 per cent tax by inflating their bonus pools, even at the risk of irritating the government and their own shareholders.

This is just staggering.  Also, the bit about "government and their own shareholders" should just read "government" now.  They threw tantrums about leaving the country, about witholding loans, and now they're just going to inflate their bonuses to where they're comfortable with so the tax doesn't get them.

I dread how much shit they are going to pull over the summer (Parliamentary recess) and once the Tories are in power.

I dunno, if I were a shareholder I'd be pretty pissed.  Basically it means they are doubling the bonus size, thus also doubling the amount of tax they are paying.  I can see the government actually being pretty happy about that.
Title: Re: UNLIMITED financial fuckery thread
Post by: Mesozoic Mister Nigel on January 10, 2010, 04:16:06 am
What large security grabs have you seen?
i think we haven't seen anything yet.  just a trickle.  Commercial real estate and second wave of residential real estate crapout is going to hit this year...
there will be big grabs then maybe...

incidentally, if you want to take a good position in this ride, one should clear any secured debt and build up a cash position in anticipation of step 12 or so, when things are bargain basement.
better we buy them than the bankers....


Only problem with that is that inflation makes cash reserves much less valuable.

Yes, inflation is great for people with mass debt, terrible for people with mass cash.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on February 03, 2010, 11:09:05 am
http://abcnews.go.com/Business/wireStory?id=9709670

Quote
The government’s response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.

“Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” Barofsky wrote.

Since Congress passed $700 billion financial bailout, the remaining institutions considered “too big to fail” have grown larger and failed to restrain the lavish pay for their executives, Barofsky wrote. He said the banks still have an incentive to take on risk because they know the government will save them rather than bring down the financial system.

Barofsky also said his office is investigating 77 cases of possible criminal and civil fraud, including crimes of tax evasion, insider trading, mortgage lending and payment collection, false statements and public corruption.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on February 07, 2010, 12:47:54 am
Source seems a little suspect, but I'm sure you can all tell me if the economics are sound or not

http://theeconomiccollapseblog.com/archives/it-is-now-mathematically-impossible-to-pay-off-the-u-s-national-debt

Quote
A lot of people are very upset about the rapidly increasing U.S. national debt these days and they are  demanding a solution. What they don't realize is that there simply is not a solution under the current U.S. financial system. It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

And the U.S. government would still be massively in debt.

So why doesn't the U.S. government just fire up the printing presses and print a bunch of money to pay off the debt?

Well, for one very simple reason.

That is not the way our system works.

You see, for more dollars to enter the system, the U.S. government has to go into more debt.

The U.S. government does not issue U.S. currency - the Federal Reserve does.

The Federal Reserve is a private bank owned and operated for profit by a very powerful group of elite international bankers.

If you will pull a dollar bill out and take a look at it, you will notice that it says "Federal Reserve Note" at the top.

It belongs to the Federal Reserve.

The U.S. government cannot simply go out and create new money whenever it wants under our current system.

Instead, it must get it from the Federal Reserve.

So, when the U.S. government needs to borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.   

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds for themselves (which happens a lot these days).

So that is how the U.S. government gets more green pieces of paper called "U.S. dollars" to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on.

So every time the U.S. government does this, the national debt gets even bigger and the interest on that debt gets even bigger.

Are you starting to get the picture?

As you read this, the U.S. national debt is approximately 12 trillion dollars, although it is going up so rapidly that it is really hard to pin down an exact figure.

So how much money actually exists in the United States today?

Well, there are several ways to measure this.

The "M0" money supply is the total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks.  As of mid-2009, the Federal Reserve said that this amount was about 908 billion dollars.

The "M1" money supply includes all of the currency in the "M0" money supply, along with all of the money held in checking accounts and other checkable accounts at banks, as well as all money contained in travelers' checks.  According to the Federal Reserve, this totaled approximately 1.7 trillion dollars in December 2009, but not all of this money actually "exists" as we will see in a moment.

The "M2" money supply includes everything in the "M1" money supply plus most other savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).  According to the Federal Reserve, this totaled approximately 8.5 trillion dollars in December 2009, but once again, not all of this money actually "exists" as we will see in a moment.

The "M3" money supply includes everything in the "M2" money supply plus all other CDs (large time deposits and institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.  The Federal Reserve does not keep track of M3 anymore, but according to ShadowStats.com it is currently somewhere in the neighborhood of 14 trillion dollars.  But again, not all of this "money" actually "exists" either.

So why doesn't it exist?

It is because our financial system is based on something called fractional reserve banking.

When you go over to your local bank and deposit $100, they do not keep your $100 in the bank.  Instead, they keep only a small fraction of your money there at the bank and they lend out the rest to someone else.  Then, if that person deposits the money that was just borrowed at the same bank, that bank can loan out most of that money once again.  In this way, the amount of "money" quickly gets multiplied.  But in reality, only $100 actually exists.  The system works because we do not all run down to the bank and demand all of our money at the same time.

According to the New York Federal Reserve Bank, fractional reserve banking can be explained this way....

"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+...=$1,000)."

So much of the "money" out there today is basically made up out of thin air.

In fact, most banks have no reserve requirements at all on savings deposits, CDs and certain kinds of money market accounts.  Primarily, reserve requirements apply only to "transactions deposits" – essentially checking accounts.

The truth is that banks are freer today to dramatically "multiply" the amounts deposited with them than ever before.  But all of this "multiplied" money is only on paper - it doesn't actually exist.

The point is that the broadest measures of the money supply (M2 and M3) vastly overstate how much "real money" actually exists in the system.

So if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this....

#1) If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.

#2) The only way to create more money is to go into even more debt which makes the problem even worse.

You see, this is what the whole Federal Reserve System was designed to do.  It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win.  As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.

If you owe more money than ever was created you can never pay it back.

That means perpetual debt for as long as the system exists.

It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for).  But the politicians in Washington D.C. are not about to do that.

So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.

***UPDATE***

It has been suggested that the same dollar can be used to pay off debt over and over - this is theoretically true as long as the dollar remains in the system.

For example, if the U.S. government gives China a dollar to pay off a debt, there is a good chance that the U.S. government will be able to acquire that dollar again and use it to pay off another debt.

However, this is not true when debt is retired with the Federal Reserve.  In that case, money is actually removed from the system.  In fact, because of the "money multiplier", when debt is retired with the Federal Reserve it can remove ten times that amount of money (and actually more, but let's not get too technical) from the system.

You see, fractional reserve banking works both ways.  When $100 is introduced into the system, it can theoretically create $1000 as the example in the article above demonstrates.  However, when that $100 is removed, it can have the opposite impact.

And considering the fact that the Federal Reserve "purchased" the vast majority of new U.S. government debt last year, we have got a real mess on our hands.

Even if a way could be figured out how to pay off all the debt we owe to foreign nations (such as China, Japan, etc.) it would still be mathematically impossible to pay off the debt that we owe to the Federal Reserve which is exploding so fast that it is hard to even keep track of.

Of course we could repudiate that debt and shut down the Federal Reserve, but very few in Washington D.C. have any interest in doing that.

It has also been suggested that instead of just using dollars to pay off the U.S. national debt, we could use the assets of the U.S. government to pay it off.

That is rather extreme, but let us consider that for a moment.

That total value of all physical assets in the United States, both publicly and privately owned, is somewhere in the neighborhood of 45 to 50 trillion dollars.  Of course the idea of the U.S. government "owning" every single asset of the American people is repugnant to our entire way of life, but let's assume that for a moment.

According to the 2008 Financial Report of the United States Government, which is an official United States government report, the total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed 65 TRILLION dollars.  This amount is more than the entire GDP of the whole world.

In fact, there are other authors who have written that the actual figure for the future liabilities of the U.S. government should be much higher, but let's be conservative and go with 65 trillion for now.

So, if the U.S. government took control of all physical assets in the United States and sold them off, it could not even make enough money to pay for everything that the U.S. government is already on the hook for.

Ouch.

If you have not read the 2008 Financial Report of the United States Government, you really should.  Actually the 2009 report should be available very soon if it isn't already.  If anyone knows if it is available, please let us know.

The truth is that the U.S. government is in much bigger financial trouble than we have been led to believe.

For example, according to the report (which remember is an official U.S. government report) the real U.S. budget deficit for 2008 was not 455 billion dollars.  It was actually 5.1 trillion dollars.

So why the difference?

The CBO's 455 billion figure is based on cash accounting, while the 5.1 trillion figure in the 2008 Financial Report of the United States Government is based on GAAP accounting. GAAP accounting is what is used by all the major firms on Wall Street and it is regarded as a much more accurate reflection of financial reality.

So needless to say, the United States is in a financial mess of unprecedented magnitude.
Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on February 07, 2010, 12:52:42 am
 I can't wait :lulz:
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on February 08, 2010, 06:32:45 pm
http://www.nytimes.com/2010/02/08/us/politics/08lobby.html?hp

Quote
Republicans are rushing to capitalize on what they call Wall Street’s "buyer’s remorse" with the Democrats. And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street "fat cats," they may fight back by withholding their cash. "If the president doesn’t become a little more balanced and centrist in his approach, then he will likely lose that support," said Kelly S. King, the chairman and chief executive of BB&T. Mr. King is a board member of the Financial Services Roundtable, which lobbies for the biggest banks, and last month he helped represent the industry at a private dinner at the Treasury Department. "I understand the public outcry," he continued. "We have a 17 percent real unemployment rate, people are hurting, and they want to see punishment. But the political rhetoric just incites more animosity and gets people riled up" . . . "If the president wanted to turn every Democrat on Wall Street into a Republican," one industry lobbyist said, "he is doing everything right."

See kids, name-calling does have consequences.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on February 17, 2010, 05:58:18 pm
http://www.guardian.co.uk/business/2010/feb/17/china-sells-us-treasury-bonds?utm_source=twitterfeed&utm_medium=twitter

Quote
China sold $34bn (£21.5bn) worth of US government bonds in December, raising fears that ­Beijing is using its financial ­muscle to signal that it has lost confidence in American economic policy.

US treasury figures for the period ending in December 2009 show that, following the sale, China is no longer the largest overseas holder of US treasury bonds. Beijing ended the year sitting on $755.4bn worth of US government debt, compared to Japan's $768.8bn.

Since the sub-prime crisis that began on Main Street USA grew to engulf the global economy, China's leaders have repeatedly expressed concerns about US policy. December's $34bn sell-off made only a tiny dent in Beijing's total holdings of US assets, which amount to well over $1tn when stakes in American companies, as well as treasury bills, are taken into account.

But the news intensified concerns about China's appetite for bankrolling ever-widening American deficits. Premier Wen Jiabao told reporters last year: "We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried."

When Timothy Geithner, the US treasury secretary, visited China last summer, he sought to reassure his hosts, using a speech to promise that "the United States is committed to a strong and stable international financial system. The Obama administration fully recognises that the United States has a special responsibility to play in this regard, and we fully appreciate that exercising this special responsibility begins at home."

But Allan Meltzer, an economics professor at Carnegie Mellon University, said China's bond sales should be a wake-up call for Washington. "The Chinese are worried that we have unsustainable debt levels, and we do not have a policy for dealing with it," he said.

China's sales contributed to a record drop in foreign holdings of short-term treasury bills in December: in all, net overseas holdings of short-term bills fell by $53bn. The previous record was $44.5bn in April last year.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on February 17, 2010, 06:37:43 pm
Source seems a little suspect, but I'm sure you can all tell me if the economics are sound or not

http://theeconomiccollapseblog.com/archives/it-is-now-mathematically-impossible-to-pay-off-the-u-s-national-debt

I don’t think this article is entirely accurate….

The Federal Reserve is not a ‘for profit’ private bank.  It is a quasi-federal, private enterprise that has the best of both worlds.  Government power and private autonomy.  It does run a profit, but all profits are returned to the US Treasury.  Of course, the fact that the FED is run by Big Private Bank alumni should not be overlooked.  They forge monetary policy and determine who get the shaft and who gets their knobs polished….  The Fed Reserve stocks are owned by the member banks (which are private).

The Federal Reserve does not buy treasuries from the Treasury.  It must buy them on the open market.  That’s why you hear in the news about ‘treasury auctions’ in the context of the general market, because the treasury has to auction them to private investors, and if there’s weak demand for them, then the bond prices go down, the dollar goes down, and people get in a tizzy.  It is only after they are on the open market that the Fed can buy them.  Of course, the fact that when there is weakness in the auctions, there are little islands in the Caribbean which all of a sudden buy shitloads of them, and then the Fed buys them up from these ‘private investors’ should not be overlooked…

Also, I would take exception with how he says the money that is created as credit by means of the fractional reserve system is not ‘real money’…. It is true that it is not ‘real’ in the sense that as the debt is repaid, the digits that represent the money vaporize, but until that debt is repaid, it is ‘real money’ in that it circulates and is spent on goods and services and effects the supply and demand with the concomitant price adjustments.  For example, if they dropped the reserve requirement to zero, (which is not entirely unprecedented) and there was willingness to build up debt massively by the public, the credit accounted for in the M3 would definitely have an impact on the price of your happy meal.  That makes it ‘real money’….

I do agree with this:
Quote
You see, this is what the whole Federal Reserve System was designed to do.  It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.
But I do not agree with this:
Quote
If you owe more money than ever was created you can never pay it back.
You can pay it back…. With your sweat.  With your time. With your life.
That’s what they’re after.

Title: Re: UNLIMITED financial fuckery thread
Post by: Requia ☣ on March 05, 2010, 05:51:15 am
Quote
Stop! Hold the phone. What this statement indicates is that Fannie Mae, the largest mortgage company in the entire world, was holding eight times the amount of mortgages off-book than it had on-book.

Thus despite the fact that it is losing tens of billions of dollars every quarter, and has borrowed $76.2 billion so far, it was actually hiding the vast majority of its worst performing mortgages off-book. The only reason you move assets off-book is if they are illiquid. And that's not even taking into account Freddie Mac, which has borrowed another $50 Billion from the taxpayers so far.
How bad are those assets? It's hard to say for certain, but after moving $2.4 Trillion dollars worth of assets, the net worth of Fannie Mae only improved by $2 Billion, or 0.083% of the assets.

http://www.economicpopulist.org/content/enron-fun-fannie-and-freddie
Title: Re: UNLIMITED financial fuckery thread
Post by: Juana Go? on March 05, 2010, 06:48:43 am
Holy shit.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jasper on March 05, 2010, 07:12:44 am
Quote
Stop! Hold the phone. What this statement indicates is that Fannie Mae, the largest mortgage company in the entire world, was holding eight times the amount of mortgages off-book than it had on-book.

Thus despite the fact that it is losing tens of billions of dollars every quarter, and has borrowed $76.2 billion so far, it was actually hiding the vast majority of its worst performing mortgages off-book. The only reason you move assets off-book is if they are illiquid. And that's not even taking into account Freddie Mac, which has borrowed another $50 Billion from the taxpayers so far.
How bad are those assets? It's hard to say for certain, but after moving $2.4 Trillion dollars worth of assets, the net worth of Fannie Mae only improved by $2 Billion, or 0.083% of the assets.

http://www.economicpopulist.org/content/enron-fun-fannie-and-freddie

That is like 2.4 teradollars.  Fucking whoa.
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 10, 2010, 10:04:44 pm
http://www.msnbc.msn.com/id/35772179/ns/business-answer_desk/

Quote
As Congress this week inches toward a new set of rules to avert another global financial collapse, it is focused on two conflicting goals: reforming the banking system to protect consumers while still giving lenders the freedom to take risks.

So far the score looks like: Bankers 1, Consumers 0.

More than a year after a wave of risky mortgage bets brought Wall Street to its knees, banks and other financial institutions are still playing by the same rules that got them into the mess.

[...]

The banking industry initially lobbied hard to make sure that any new consumer protections were housed within existing bank regulators, such as the Office of the Controller of the Currency or the FDIC.

Analysts who have followed the turf war say the latest proposal gives bankers most of what they wanted.

“This is a bill the industry will love,” said Greg Valliere, chief policy strategist for Soleil Securities.

IOW, prepare for the second crash.
Title: Re: UNLIMITED financial fuckery thread
Post by: Jasper on March 12, 2010, 12:59:33 am
>still giving lenders the freedom to take risks


Wh-why?
Title: Re: UNLIMITED financial fuckery thread
Post by: Remington on March 12, 2010, 01:28:54 am
Because as a society, we have a short-term memory equivalent to that of a goldfish?
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 12, 2010, 03:03:10 am
>still giving lenders the freedom to take risks


Wh-why?

the freedom to take risks is not the issue.
having the govt. backstop the losses is the problem...
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 12, 2010, 04:54:02 pm
I would suggest both are an issue, if only due to the incestuous nature of the international financial system, where one collapse can, theoretically, bring the whole thing tumbling down.  The moral hazard naked theft of public funds to prop up ventures that have failed certainly doesn't help matters though.

Anyway, NEWS!

http://market-ticker.denninger.net/archives/2070-EXPLOSIVE-Lehman-Where-Are-The-Cops.html

Quote
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.

The most interesting part of this is that while Lehman tried to pull one over on the public about its accounting practices, the SEC and and Fed knew it was lying, and went along with it anyway.

Quote
After March 2008 when the SEC and FRBNY began onsite daily monitoring of Lehman, the SEC deferred to the FRBNY to devise more rigorous stress‐testing scenarios to test Lehman’s ability to withstand a run or potential run on the bank.5753 The FRBNY developed two new stress scenarios: “Bear Stearns” and “Bear Stearns Light.”5754 Lehman failed both tests.5755 The FRBNY then developed a new set of assumptions for an additional round of stress tests, which Lehman also failed.5756 However, Lehman ran stress tests of its own, modeled on similar assumptions, and passed.5757 It does not appear that any agency required any action of Lehman in response to the results of the stress testing.

Yes, thats right, the Fed allowed Lehman not only to mark its own papers, but to set the questions to ensure a pass.  They knew it was fucked, and wanted to let it pass the "stress tests" regardless.
Title: LEAVE WALL STREET ALONE!
Post by: Cain on March 20, 2010, 07:59:13 pm
http://www.marketwatch.com/story/a-year-more-of-bank-reform-debate-likely-boehner-2010-03-17?reflink=MW_news_stmp

Quote
Boehner’s comments come as bankers prepare to descend upon Capitol Hill to press for changes to the bank-reform legislation, which they wouldn’t support in its present form. Boehner said he urged bankers not to be shy when meeting with the lawmaker staff members and to send a message that new regulations and taxes translates to into banks having less available for lending.

“Don’t let those little punk staffers take advantage of you and stand up for yourselves,” Boehner said.

I say we wait outside the meeting and shake down the bankers and staffers for their lunch money, when they finally come out.
Title: The FUCK?!?!
Post by: Cain on March 21, 2010, 10:27:04 pm
http://www.levy.org/pubs/wp_587.pdf

The derivative exposure of Goldman Sachs in 2009 was 33,823%.

33,823%
Title: Re: UNLIMITED financial fuckery thread
Post by: N E T on March 21, 2010, 10:56:22 pm
http://www.levy.org/pubs/wp_587.pdf

The derivative exposure of Goldman Sachs in 2009 was 33,823%.

33,823%

Could you put that in english for economitards?
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 21, 2010, 11:04:09 pm
Sorry, I should have added "of its assets" at the end, it helps it make more sense.

Essentially, the sum of the total value of derivatives Goldman Sachs is responsible for is that many times as large as what they actually have in the bank.
Title: Re: UNLIMITED financial fuckery thread
Post by: Elder Iptuous on March 21, 2010, 11:50:28 pm
must be nice to make a fuck ton of money like that when things are panning out, and then have your GS alum buddies in the fed and treasury tell the american public that they are responsible for bailing you out when the deal goes belly up....

goddamn, that's crazy.

i think this is the decade of slapstick quantities.
we're innumerate enough as a society without this kind of shit prompting us to just throw up our hands....
Title: Re: UNLIMITED financial fuckery thread
Post by: Cain on March 24, 2010, 09:03:33 pm
Also, China looks like it might be the bubble which will set off the next round of the recession

http://www.businessweek.com/news/2010-03-16/china-in-greatest-bubble-in-history-ex-ltcm-s-rickards-says.html

Quote
China is in the midst of “the greatest bubble in history,” said James Rickards, former general counsel of hedge fund Long-Term Capital Management LP.

The Chinese central bank’s balance sheet resembles that of a hedge fund buying dollars and short-selling the yuan, said Rickards, now the senior managing director for market intelligence at McLean, Virginia-based consulting firm Omnis Inc.

“As I see it, it is the greatest bubble in history with the most massive misallocation of wealth,” Rickards said at the Asset Allocation Summit Asia 2010 organized by Terrapinn Pte in Hong Kong yesterday. China “is a bubble waiting to burst.”

Rickards joins hedge fund manager Jim Chanos, Gloom, Boom & Doom publisher Marc Faber and Harvard University professor Kenneth Rogoff in warning of an overheating and potential crash in China’s economy following a rally in stocks and property prices. The government has raised lenders’ reserve requirements twice this year to cool an economy that grew at the fastest pace since 2007 in the fourth quarter.

Leveraged speculation in the stock market, wasteful allocation of resources by state-owned enterprises, off-balance- sheet debt through regional governments and the country’s human rights record are concerns, said Rickards, who worked for LTCM between 1994 and 1999, helping negotiate a $3.6 billion rescue after the hedge fund lost $4 billion in a few weeks in 1998.

“Take Russia and China together, neither of them is really deserving any investment” except for short-term speculation, Rickards said. India and Brazil are two of the “real economies” among the developing countries, he said.

More worries about the Chinese economy can be found

http://english.caing.com/2010-03-22/100128789.html
http://article.wn.com/view/2010/03/09/roach_in_china_bildet_sich_keine_blase_an_den_m_rkten/
http://www.creditwritedowns.com/2009/11/goldilocks-is-not-sleeping-in-america-anymore-shes-now-in-china.html
http://immobilienblasen.blogspot.com/2010/01/enron-esque-characteristics-hiding-even.html
Title: UK spending cuts to be deeper than Thatcher's
Post by: Cain on March 25, 2010, 08:20:09 pm
Boy, it sure is a good thing Labour aren't like those nasty Tories   :lulz:

http://news.bbc.co.uk/1/hi/uk_politics/8587877.stm

Quote
Alistair Darling has conceded that if Labour is re-elected public spending cuts will be "tougher and deeper" than those implemented by Margaret Thatcher.

Asked in a BBC interview to spell out how far-reaching future cuts could be, Mr Darling did not reject a comparison with measures taken in the early 1980s.

The Tories have said they would cut even more from spending than Labour.

Shadow chancellor George Osborne said the comments had "blown apart" Labour's claims that it could "go on spending".

Experts say Mr Darling has postponed the major decisions on departmental spending, and what is widely expected to be substantial cuts in many areas, to a spending review expected in the autumn.

The chancellor warned in his Budget speech that this review would be the "toughest in decades".

'Non-negotiable'

Asked by the BBC's Political Editor Nick Robinson to accept the Treasury's own figures suggest deeper, tougher cuts than those implemented by the Thatcher government in the 1980s, Mr Darling replied: "They will be deeper and tougher - where we make the precise comparison I think is secondary to fact is an acknowledgement that these reductions will be tough".

He added: "There may be things that we don't do, that we cut in the future. We will have to decide what precisely we can do within the [spending] envelope I set."

"What is non-negotiable is that borrowing is coming down by half over a four-year period."

The Institute for Fiscal Studies, an independent think tank, has noted that total public spending increased by an average of 1.1% a year in real terms over the Thatcher era, at a time when inflation was higher than it is today.

This is almost three times the increase of 0.4% a year that Mr Darling has pencilled in for the next Parliament.

The IFS went on to observe that "if we subtract spending on welfare and debt interest then we estimate that the rest of public spending would be cut in real terms by an average of 1.4% a year compared to an average increase of 0.7% in the Thatcher era. We have not seen five years with an average annual real cut as big as this since the mid-1970s".

As the Conservatives wish to make bigger spending cuts than Labour they have already accepted that they would have to be tougher than Margaret Thatcher.

All this does is make me want to vote Tory more.  Fuck it, if we're going to plunge the country back into a recession, I say we really do a proper job of it.  I want armageddon tomorrow.
Title: Re: Financial fuckery thread
Post by: LMNO on March 26, 2010, 12:35:06 pm
Is it just me, or does that sound like they're saying, "The country's fucked, so let's just fuck it harder"?
Title: Re: Financial fuckery thread
Post by: Cain on March 26, 2010, 02:55:11 pm
As far as I can see, their logic is if they fuck the country hard enough, we can avoid losing our Triple A credit rating, which would cause runaway inflation and kill the economy.  The problem with that is, if we stop public spending, with the banks not lending money, consumer purchases go down and we end up killing the economy regardless.

I'd rather the Tories did it though, because I want to see that smug expression wiped off George Osborne's face, and because Labour are already a discredited party, meaning someone else should take the fall for this.
Title: Re: Financial fuckery thread
Post by: Cain on April 12, 2010, 03:38:39 pm
http://www.reuters.com/article/idUSLDE6380MU20100409

Quote
Major U.S. banks temporarily lowered their debt levels just before reporting in the past five quarters, making it appear their balance sheets were less risky, the Wall Street Journal said, citing data from the Federal Reserve Bank of New York.

The paper said on Friday 18 banks, including Goldman Sachs Group, Morgan Stanley, J.P. Morgan Chase Bank of of America and Citigroup, understated the debt levels used to fund securities trades by lowering them an average of 42 percent at the end of each period.

The banks had increased their debt in the middle of successive quarters, it said.

Citi, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley were not immediately available for comment when contacted by Reuters outside regular U.S. business hours.

Excessive leverage by the banks was one of the causes that led to the global financial crisis in 2008.

Due to the credit crisis, banks have become more sensitive about showing high levels of debt and risk, worried their stocks and credit ratings could be punished, the Journal said.

Federal Reserve Bank of New York could not be immediately reached for comment by Reuters.

Heh
Title: Re: Financial fuckery thread
Post by: Thurnez Isa on April 12, 2010, 03:46:55 pm
That's a light in the distance right, not an iceberg?
 :lulz:
FULL STEAM AHEAD!!
Title: Re: Financial fuckery thread
Post by: Diseris on April 12, 2010, 06:58:20 pm
More good news:

http://www.nypost.com/p/news/business/metal_are_in_the_pits_2arTlGNbMK7mb1uJeVHb0O

Quote
Christian said that the LBMA -- the same market Maguire trades in -- has leverage of about 100-1 on the gold bars settled on the exchange. In layman's terms, that means if 100 clients requested their bullion bars be delivered, the exchange could only give one client the precious metal.

Its the Post, any outside verification?
Title: Re: Financial fuckery thread
Post by: Jenne on April 14, 2010, 02:42:59 pm
They're now saying WaMu basically perpetrated MAJORLY illegal acts in order to sell bad mortgage deals...they also reported on NPR some WaMu fuck saying that if left alone long enough, WaMu would've recovered.

ORLY?
Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2010, 01:23:13 pm
http://www.ft.com/cms/s/0/0ae8415c-9e5e-11df-a5a4-00144feab49a.html

Quote
At the US Embassy in London, there is a waiting list that none of the officials likes to discuss. On the list are Americans hoping to give up their citizenship, as they seek shelter from the Internal Revenue Service.



The backlog at the US Embassy, where no appointments are available until February, stems from a rise in the number of American expatriates living in the UK who have been seeking to escape paying US tax on their worldwide income and capital gains since the simplification of US tax laws in 2008.

I was going to point out that in the UK taxes are likely even higher than the USA...but then I remembered that was only for little people.  Hell, the chief financial backer of the Conservatives hasn't paid tax in...how many years again?  I forget, but it's at least a decade.

http://www.kansascity.com/2010/08/03/2127213/russian-wheat-crop-in-dire-straits.html

Quote
Drought and raging wildfires have destroyed one-fifth of the wheat crop in Russia and sent wheat prices soaring around the world.

The fear that Russia, a major wheat producer, will have to cut exports by at least 30 percent is good news for U.S. farmers, who now are getting more money to go along with a bumper crop this year.

That big harvest, analysts point out, should spare U.S. consumers much increase in the prices of bread and other wheat-based foods despite the problems in Russia.

Any price increases will hit consumers hardest in wheat-deficient areas such as the Middle East, Africa and parts of Asia.

The severe drought in Russia is thought to be the country’s worst in 130 years. Most of the damage to the wheat crop has been caused by the drought, but now wildfires are sweeping farmlands in western Russia.

The Associated Press reported that the director of a small state farm outside Moscow said fire destroyed its entire wheat crop one night before the harvest.

“The fruits of the year’s labor of the farm went up in smoke. This is very painful,” Pavel Grudinin, director of Lenin State Farm, said on Russian television.

The drought is also affecting harvests in Ukraine and Kazakhstan, Russia’s neighboring wheat-producing countries.

http://online.wsj.com/article/SB10001424052748704532204575397543634034112.html

Quote
Gangsters, drug dealers and money launderers appear to be playing their part in helping shore up the financial stability of the euro zone.

That’s thanks to their demand, according to European authorities, for high-denomination euro bank notes, in particular the €200 and €500 bills. The European Central Bank issues these notes for a hefty profit that is welcome at a time when its response to the financial crisis has called its financial strength into question.

The high-value bills are increasingly “making the euro the currency of choice for underground and black economies, and for all those who value anonymity in their financial transactions and investments,” wrote Willem Buiter, chief economist at Citigroup, in a recent research report. The business of issuing euro notes, produced at almost zero cost, is “wildly profitable” for the ECB, Mr. Buiter wrote.



The ECB and its member governments are beneficiaries of the demand.

The profit a central bank gains from issuing currency—as well as from other privileges of a central bank, such as being able to demand no-cost or low-cost deposits from banks—is known as seigniorage. It normally accrues to national treasuries once the central banks account for their own costs.

The ECB’s gains from seigniorage are becoming increasingly important this year.

The ECB has taken hundreds of billions of euros of assets of unknown quality on to its balance sheet as it has reacted to the global financial crisis.

It holds more than €600 billion in collateral from banks to which it has made loans, and more than €400 billion in securities it holds outright, including government bonds.

Overall, the ECB’s balance sheet has grown to almost €2 trillion. It has a capital base of €78 billion. That creates leverage that makes it look like a “hedge fund on steroids,” Mr. Buiter wrote. It wouldn’t need to lose much on these assets to wipe out its thin cushion of capital.

That’s where seigniorage comes in.

In recent years, the profits on its issue of new paper currency have been running at €50 billion. In 2008, the year of the Lehman Brothers crisis, it was €80 billion.

Even with conservative assumptions about future growth of currency in circulation—at, say, 4% a year, which is in line with the ECB’s 2% inflation target plus a margin for economic growth—Mr. Buiter estimates future seigniorage profits for the central bank between €2 trillion and €6.9 trillion.

Thanks to seigniorage, he says, the ECB is “super solvent.”
Title: Re: Financial fuckery thread
Post by: Cain on September 21, 2010, 05:59:10 pm
Can't say I'm in any way surprised at this

http://www.news.com.au/business/breaking-news/us-government-hiding-true-amount-of-debt/story-e6frfkur-1225926567256

Quote
THE actual figure of the US' national debt is much higher than the official sum of $US13.4 trillion ($14.3 trillion) given by the Congressional Budget Office, according to analysts cited on Sunday by the New York Post.

"The Government is lying about the amount of debt. It is engaging in Enron accounting," said Laurence Kotlikoff, an economist at Boston University and co-author of The Coming Generational Storm: What You Need to Know about America's Economic Future.

"The problem is we're seeing an explosion in spending," added Andrew Moylan, director of government affairs for the National Taxpayers Union.

In 1980, the debt - the accumulated red ink incurred by the Federal Government - was $US909 billion.

This represented some 33 per cent of gross domestic product, according to the Congressional Budget Office (CBO).

Thirty years later, based on this year's second-quarter numbers, the CBO said the debt was $US13.4 trillion, or 92 per cent of GDP.

Start of sidebar. Skip to end of sidebar.

End of sidebar. Return to start of sidebar.

The CBO estimates the debt will be at $US16.5 trillion in two years, or 100.6 per cent of GDP.

But these numbers are incomplete.

They do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits.

In the case of Social Security, beginning in 2016, the US Government will be paying out more than it is collecting in taxes.

Without basic measures - such as payment cuts or higher payroll taxes - the system could be on the road to bankruptcy, according to officials.

"Without changes," wrote Social Security Commissioner Michael Astrue, "by 2037 the Social Security Trust Fund will be exhausted. There will be enough money only to pay about $US0.76 for each dollar of benefits."

Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.

Mr Kotlikoff says the debt is actually $US200 trillion.

Mr Moylan says the number is likely about $US60 trillion.

That is close to the figure quoted by David Walker, the US Comptroller General from 1998 to 2008.

He launched a campaign to convince Americans that the federal spending and debt is a greater threat than terrorism.

But whichever figure is accurate, all three agree that the problem has worsened in the last few years.

They say it is because Congress and the Administration, whether Republican or Democrat, consistently overspend.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 21, 2010, 07:16:41 pm
200 seems a bit high...
Walker was using the 50 trillion number a couple years ago when I was still starry eyed about dr Paul, so 60 would seem reasonable now....

Attempting to 'fix' the issue seems to be polishing knobs on the titanic, IMO.
Title: Re: Financial fuckery thread
Post by: Cain on September 21, 2010, 08:50:10 pm
It does, but with even professional economists, who are not exactly the most out of the box thinkers now openly declaring the US's reported debt to be a sham and testament to fake accounting...well, that outcome is pleasing in and of itself.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 21, 2010, 09:09:16 pm
David Walker has been touring the country trying to warn everybody that we're totally fucked and that it's all a sham for a few years now.
and he was head of the GAO.
nobody has payed him much mind.

we're fucked.
previously i thought that we could fix things.
then i decided that preparing for our shitty upcoming future should take priority.
now, i'm just taking the opportunity to enjoy how awesome things are right now, so that when things turn to shit and toil, i can remember these magical times before the ground drops out from under us....
Title: Re: Financial fuckery thread
Post by: Cain on October 14, 2010, 01:21:21 pm
Emerging markets bubble!

Quote
So, it seems increasingly likely that the Fed will push ahead with a new bout of quantitative easing – or 'QE2', as the markets have nicknamed it.

With the Bank of England and the Bank of Japan also likely to be pumping out liquidity – and the prospect of the ECB joining in at some point, even if only in belated response to the consequences of standing pat for the euro – there is growing attention on what this might mean not just for the economies directly involved, but also for emerging markets. There's the likelihood of a new wave of capital flows into emerging markets, the possibility of an emerging markets bubble, and the chance of the final destruction of what's become known as Bretton Woods 2.
 
Of course, the existing differences in growth performance and outlook, interest rates, and market performance between developed and emerging economies have already seen investors busy re-allocating their portfolios towards the latter, especially to countries in East Asia and Latin America. And even back at the start of this year, analysts were debating whether a new asset bubble was appearing in emerging economies.

Since then, inflows have continued to grow: according to its latest report on capital flows, the Institute for International Finance reckons net private capital flows to emerging markets will rebound to US$825 billion this year, up from US$581 billion last year. While this would still be below the peak of US$1285 billion reached in 2007, it would nevertheless be the second highest result in dollar terms recorded over the past decade.

Managing these inflows is now a major policy headache, with policymakers in recipient economies facing the choice of allowing their nominal exchange rates to appreciate (but risking exchange rates overshooting and increased volatility as well); of intervening to cap nominal appreciation (but then having to deal with some combination of sterilisation costs and rising domestic liquidity – which seeps into domestic asset prices and inflation); or of adopting controls on inflows and the distortions they entail (Thailand is the latest country to follow this route).

For investors, then, the prospect of QE2 looks like another good reason to expect even more emerging market currency appreciation, or domestic asset appreciation, or a mix of the two: in other words, another good reason to send more money towards emerging markets.

Some of this money will be put to good use. But anyone who can remember the run-up to the 1997-98 financial crises, or indeed the prelude to the Mexican Tequila crisis before that, will be aware of the risks involved in a prolonged period of capital inflows to still relatively under-developed financial markets. Emerging-market policymakers will want to be sure that they can avoid the pitfalls of past experiences of large inflows: in being taken for a ride on the QE2, they don't want to end up like the Titanic.

http://www.lowyinterpreter.org/post/2010/10/14/Emerging-markets-QE2-or-Titanic.aspx
Title: Re: Financial fuckery thread
Post by: Cain on October 14, 2010, 01:30:57 pm
Oh fuck you Larry Summers, you ruined what was going to be the only fun part of this whole financial mess, you massive fucking dildo

http://voices.washingtonpost.com/ezra-klein/2010/10/rattner_this_is_how_congress_k.html

Quote
I don't believe the president has any obligation in any policy area to create a team of rivals spanning the policy spectrum. He was elected based on a set of views he articulated quite clearly, and he's entitled to have people who reflect his views. You might say they're all centrists, but that's what he's comfortable with. He had no obligation to create the Oxford Union in the West Wing. All these people who say his economic team was terrible, what did they want him to do? We had a stimulus bill. Some say it was too small, some say it was too large. Tim Geithner saved the financial system. Larry Summers did a great job in making sure the administration didn't cave in to the flavor of the moment, nationalizing banks and shooting CEOs. I'd love somebody sensible to tell me, given the constraints of Congress and the environments, what we should have done differently.

Seriously, what a gigantic arsehole.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on October 15, 2010, 02:00:15 pm
I liked this guys blog post about the Mortgage problem and thought I'd share.  REALLY long, but a decent assesment.

http://gonzalolira.blogspot.com/2010/10/second-leg-down-of-americas-death.html#more



Quote
The Second Leg Down of America’s Death Spiral
I swear to God Almighty: Mortgage Backed Securities are America’s Herpes—the gift that keeps on oozing.
  
Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen—which would be a big deal: Global Financial Crisis, Part II—Longer, Wider and Uncut.
  
“It’s oozing from where?”
“Man, you guys are fucked.”
But the mainstream media—surprise-surprise—has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings”, “foreclosure mills”, forged signatures, “double booking”, MERS—it’s confusing as all get-out.
  
So the mainstream media just mentions it casually—“and in other news tonight . . .”—like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha over paperwork of all things!—and then zappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.
  
But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.
  
So what the hell is going on with the God forsaken mortgage mess in the United States?
  
It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.
  
So this is what happened, more or less—the short version:

In the crazed frenzy to get as many mortgages securitized during the Oughts, banks took shortcuts with the paperwork necessary for the Mortgage Backed Securities. The reason was because everyone in the chain of this securitization mania got a little piece of the action—a little slice of the MBS pie in the shape of commissions.
  
So in the name of “improved efficiencies” (and how many horror stories are we finding out, carried out in the name of “improved efficiencies”), banks digitized the mortgage notes—they didn’t physically endorse them, like they were supposed to by the various state and Federal laws.
  
Plus—once the wave of foreclosures broke, and the holes in this bureaucratic paperwork became evident and relevant—some of the big law firms handling the foreclosures for the banks started doing some document fabrication and signature forgery, in order to cover up the mistakes—which is definitely illegal.
  
Long story short (since this is the short version): A lot of the foreclosed properties might not have been foreclosed legally. The people evicted might still have a right to their old houses. The new buyers might not actually own the REO’s they bought off the banks. The banks could be on the hook for trillions of dollars, and in the sights of literally millions of lawsuits.
  
In short: This could become another massive oozing sore, complete with yellow-green pus drip-drip-dripping out of some unmentionable places on the Body Economic.
  
Now—the long version:
  
Homeowners can only be foreclosed and evicted from their homes by the person or institution who actually has the loan paper—only the note-holder has legal standing to ask a court to foreclose and evict. Not the mortgage—the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.
  
Before Mortgage Backed Securities, most mortgage loans were issued by the local Savings & Loan. So the note usually didn’t go anywhere: It stayed in the offices of the S&L down the street.
  
But once mortgage loan securitization happened, things got sloppy—they got sloppy by the very nature of Mortgage Backed Securities.
  
The whole purpose of MBS’s was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with therefore higher rates of return.
  
Therefore, as everyone knows, the loans were “bundled” into REMIC’s (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then “sliced & diced”—split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.
  
This slicing and dicing created “senior tranches”, where the loans would likely be paid in full, if past history of mortgage loan statistics was to be believed. And it also created “junior tranches”, where the loans might well default, again according to past history and statistics. (A whole range of tranches were created, of course, but for purposes of this discussion, we can ignore all those countless other variations.)
  
These various tranches were sold to different investors, according to their risk appetite. That’s why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds.
  
But here’s the key issue: When an MBS was first created, all the mortgages were pristine—none had defaulted yet, because they were all brand new loans. Statistically, some would default and some others would be paid back in full—but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads—but what will the result be of, say, the 723rd toss specifically? I dunno.
  
Same with mortgages.
  
So in fact, it wasn’t that the riskier loans were in junior tranches and the safer mortgage loans were in the senior tranches: Rather, all the loans were in all the tranches, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder take the loss last.
  
But who was the owner of the junior tranche bond and the senior tranche bond? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn’t be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.
  
Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier MBS tranche?
  
Enter stage right, the famed MERS—the Mortgage Electronic Registration System.
  
MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two, again, I know, I know: Like the chlamydia and the gonorrhea of the financial world—you cure ‘em, but they just keep coming back).
  
The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially the operating table where the digitized mortgage notes were sliced and diced and rearranged so as to create the Mortgage Backed Securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.
  
However, legally—and this is the important part—MERS didn’t hold any mortgage note: The true owner of the mortgage notes should have been the REMIC’s.
  
But the REMIC’s didn’t own the note either, because of a fluke of the ratings agencies: The REMIC’s had to be “bankruptcy remote”, in order to get the precious ratings needed to peddle Mortgage Backed Securities to insitutional investors.
  
So somewhere between the REMIC’s and the MERS, the chain of title was broken.
  
Now, what does “broken chain of title” mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title”.
  
You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically on the note, one after the other.
  
If for whatever reason, any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.
  
To repeat: If the chain of title of the note is broken, then the borrower no longer owes any money on the loan.
  
Read that last sentence again, please. Don’t worry, I’ll wait.
  
You read it again? Good: Now you see the can of worms that’s opening up.
  
The broken chain of title wouldn’t have been an issue if there hadn’t been an unusual number of foreclosures. Before the housing bubble collapse, the people who defaulted on their mortgages wouldn’t have bothered to check to see that the paperwork was in order.
  
But as everyone knows, following the housing collapse of 2007–‘10-and-counting, there’s been a boatload of foreclosures—and foreclosures on a lot of people who weren’t sloppy bums who skipped out on their mortgage payments, but smart and cautious people who got squeezed by circumstances.
  
These people started contesting their foreclosures and evictions, and so started looking into the chain of title issue . . . and that’s when the paperwork became important. So the chain of title became important. So the botched paperwork became a non-trivial issue.
  
Now, the banks had hired “foreclosure mills”—law firms that specialized in foreclosures—in order to handle the massive volume of foreclosures and evictions that occurred because of the Housing Crisis. The foreclosure mills, as one would expect, were the first to spot the broken chain of titles.
  
Well, hell, whaddaya know—turns out that these foreclosure mills might have faked and falsified documentation, so as to fraudulently repair the chain-of-title issue, thereby “proving” that the banks had judicial standing to foreclose on a delinquent mortgage. These foreclosure mills might have even forged the loan note itself—
  
—wait, why am I hedging? The foreclosure mills actually, deliberately and categorically faked and falsified documents, in order to expedite these foreclosures and evictions. Yves Smith at naked capitalism, who has been all over this story, put up a price list for this “service” from a company called DocX—yes, a price list for forged documents. Talk about your one-stop shopping!
  
So in other words, a massive fraud was carried out, with the inevitable innocent bystander getting caught up in this fraud: The guy who got foreclosed and evicted from his home in Florida, even though he didn’t actually have a mortgage, and in fact owned his house free-and-clear. The family that was foreclosed and evicted, even though they had a perfect mortgage payment record. Et cetera, depressing et cetera.
  
Now, the reason this all came to light is not because enough people were getting screwed that the banks or the government or someone with power saw what was going on, and decided to put a stop to it—that would have been nice, to see a shining knight in armor, riding on a white horse.
  
But that’s not how America works nowadays.
  
No, alarm bells started going off when the title insurance companies started to refuse to insure the title.
  
In every sale, a title insurance company insures that the title is free-and-clear: That the prospective buyer is in fact buying a properly vetted house, with its title issues all in order. Title insurance companies stopped providing their service because—of course—they didn’t want to expose themselves to the risk that the chain-of-title had been broken, and that the bank had illegally foreclosed on the previous owner.
  
That’s when things started gettin’ innerestin’: That’s when the Attorneys General of various states started snooping around and making noises (elections are coming up, after all).
  
The fact that Ally Financial (formerly GMAC), JP Morgan Chase, and now Bank of America have suspended foreclosures signals that this is a serious problem—obviously. Banks that size, with that much exposure to foreclosed properties, don’t suspend foreclosures just because they’re good corporate citizens who want to do the right thing, with all the paperwork in strict order—they’re halting their foreclosures for a reason.
  
The move by the United States Congress last week, to sneak by the Interstate Recognition of Notarizations Act? That was all the banking lobby—they wanted to shove down that law, so that their foreclosure mills’ forged and fraudulent documents would not be scrutinized by out-of-state judges. (The spineless cowards in the Senate carried out their Master’s will by a voice vote—so that there’d be no registry of who had voted for it, and therefore no accountability, the corrupt pricks.)
  
And President Obama’s pocket veto of the measure? He had to veto it—if he’d signed it, there would have been political hell to pay, plus it would have been challenged almost immediately, and likely overturned as un-Constitutional in short order. (The jug-eared milquetoast didn’t even have the gumption to veto it—he pocket vetoed it.)
  
As soon as the White House announced the pocket veto—the very next day!—Bank of America halted all foreclosures, nationwide.
  
Why do you think that happened? Because the banks are screwed—again. By the same fucking thing as the last time—the fucking Mortgage Backed Securities!
  
The reason the banks are fucked again is, if they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for.
  
And it won’t matter if a particular case—or even most cases—were on the up-and-up: It won’t matter if most of the foreclosures and evictions were truly because the homeowner failed to pay his mortgage. The fraud committed by the foreclosure mills casts enough doubt that now, all foreclosures come into question. Not only that, all mortgages come into question.
  
People still haven’t figured out what this all means—but I’ll tell you: If enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loan and keep their house, scott-free? Shit, that’s basically a license to halt payments right the fuck now. That’s basically a license to tell the banks to fuck off.
  
What are the banks gonna do—try to foreclose and then evict you? Show me the paper, motherfucker, will be all you need to say.
  
This is a major, major crisis. This makes Lehman’s bankruptcy look like a spring rain, compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks on the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts?
  
If this isn’t handled right, then this will be the second leg down, in the American Death Spiral.

    Oh dear Lord, he said, calm yet despondent. Look at it, he said. I mean just look at it! Have you ever seen anything like it?!?

    No, said the koala—truthfully. And you know, uh . . . it’s . . . It’s pretty disgusting, actually. So would you mind putting that thing away?

Title: Re: Financial fuckery thread
Post by: BabylonHoruv on October 15, 2010, 07:32:25 pm
I liked this guys blog post about the Mortgage problem and thought I'd share.  REALLY long, but a decent assesment.

http://gonzalolira.blogspot.com/2010/10/second-leg-down-of-americas-death.html#more



Quote
The Second Leg Down of America’s Death Spiral
I swear to God Almighty: Mortgage Backed Securities are America’s Herpes—the gift that keeps on oozing.
  
Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen—which would be a big deal: Global Financial Crisis, Part II—Longer, Wider and Uncut.
  
“It’s oozing from where?”
“Man, you guys are fucked.”
But the mainstream media—surprise-surprise—has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings”, “foreclosure mills”, forged signatures, “double booking”, MERS—it’s confusing as all get-out.
  
So the mainstream media just mentions it casually—“and in other news tonight . . .”—like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha over paperwork of all things!—and then zappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.
  
But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.
  
So what the hell is going on with the God forsaken mortgage mess in the United States?
  
It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.
  
So this is what happened, more or less—the short version:

In the crazed frenzy to get as many mortgages securitized during the Oughts, banks took shortcuts with the paperwork necessary for the Mortgage Backed Securities. The reason was because everyone in the chain of this securitization mania got a little piece of the action—a little slice of the MBS pie in the shape of commissions.
  
So in the name of “improved efficiencies” (and how many horror stories are we finding out, carried out in the name of “improved efficiencies”), banks digitized the mortgage notes—they didn’t physically endorse them, like they were supposed to by the various state and Federal laws.
  
Plus—once the wave of foreclosures broke, and the holes in this bureaucratic paperwork became evident and relevant—some of the big law firms handling the foreclosures for the banks started doing some document fabrication and signature forgery, in order to cover up the mistakes—which is definitely illegal.
  
Long story short (since this is the short version): A lot of the foreclosed properties might not have been foreclosed legally. The people evicted might still have a right to their old houses. The new buyers might not actually own the REO’s they bought off the banks. The banks could be on the hook for trillions of dollars, and in the sights of literally millions of lawsuits.
  
In short: This could become another massive oozing sore, complete with yellow-green pus drip-drip-dripping out of some unmentionable places on the Body Economic.
  
Now—the long version:
  
Homeowners can only be foreclosed and evicted from their homes by the person or institution who actually has the loan paper—only the note-holder has legal standing to ask a court to foreclose and evict. Not the mortgage—the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.
  
Before Mortgage Backed Securities, most mortgage loans were issued by the local Savings & Loan. So the note usually didn’t go anywhere: It stayed in the offices of the S&L down the street.
  
But once mortgage loan securitization happened, things got sloppy—they got sloppy by the very nature of Mortgage Backed Securities.
  
The whole purpose of MBS’s was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with therefore higher rates of return.
  
Therefore, as everyone knows, the loans were “bundled” into REMIC’s (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then “sliced & diced”—split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.
  
This slicing and dicing created “senior tranches”, where the loans would likely be paid in full, if past history of mortgage loan statistics was to be believed. And it also created “junior tranches”, where the loans might well default, again according to past history and statistics. (A whole range of tranches were created, of course, but for purposes of this discussion, we can ignore all those countless other variations.)
  
These various tranches were sold to different investors, according to their risk appetite. That’s why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds.
  
But here’s the key issue: When an MBS was first created, all the mortgages were pristine—none had defaulted yet, because they were all brand new loans. Statistically, some would default and some others would be paid back in full—but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads—but what will the result be of, say, the 723rd toss specifically? I dunno.
  
Same with mortgages.
  
So in fact, it wasn’t that the riskier loans were in junior tranches and the safer mortgage loans were in the senior tranches: Rather, all the loans were in all the tranches, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder take the loss last.
  
But who was the owner of the junior tranche bond and the senior tranche bond? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn’t be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.
  
Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier MBS tranche?
  
Enter stage right, the famed MERS—the Mortgage Electronic Registration System.
  
MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two, again, I know, I know: Like the chlamydia and the gonorrhea of the financial world—you cure ‘em, but they just keep coming back).
  
The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially the operating table where the digitized mortgage notes were sliced and diced and rearranged so as to create the Mortgage Backed Securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.
  
However, legally—and this is the important part—MERS didn’t hold any mortgage note: The true owner of the mortgage notes should have been the REMIC’s.
  
But the REMIC’s didn’t own the note either, because of a fluke of the ratings agencies: The REMIC’s had to be “bankruptcy remote”, in order to get the precious ratings needed to peddle Mortgage Backed Securities to insitutional investors.
  
So somewhere between the REMIC’s and the MERS, the chain of title was broken.
  
Now, what does “broken chain of title” mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title”.
  
You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically on the note, one after the other.
  
If for whatever reason, any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.
  
To repeat: If the chain of title of the note is broken, then the borrower no longer owes any money on the loan.
  
Read that last sentence again, please. Don’t worry, I’ll wait.
  
You read it again? Good: Now you see the can of worms that’s opening up.
  
The broken chain of title wouldn’t have been an issue if there hadn’t been an unusual number of foreclosures. Before the housing bubble collapse, the people who defaulted on their mortgages wouldn’t have bothered to check to see that the paperwork was in order.
  
But as everyone knows, following the housing collapse of 2007–‘10-and-counting, there’s been a boatload of foreclosures—and foreclosures on a lot of people who weren’t sloppy bums who skipped out on their mortgage payments, but smart and cautious people who got squeezed by circumstances.
  
These people started contesting their foreclosures and evictions, and so started looking into the chain of title issue . . . and that’s when the paperwork became important. So the chain of title became important. So the botched paperwork became a non-trivial issue.
  
Now, the banks had hired “foreclosure mills”—law firms that specialized in foreclosures—in order to handle the massive volume of foreclosures and evictions that occurred because of the Housing Crisis. The foreclosure mills, as one would expect, were the first to spot the broken chain of titles.
  
Well, hell, whaddaya know—turns out that these foreclosure mills might have faked and falsified documentation, so as to fraudulently repair the chain-of-title issue, thereby “proving” that the banks had judicial standing to foreclose on a delinquent mortgage. These foreclosure mills might have even forged the loan note itself—
  
—wait, why am I hedging? The foreclosure mills actually, deliberately and categorically faked and falsified documents, in order to expedite these foreclosures and evictions. Yves Smith at naked capitalism, who has been all over this story, put up a price list for this “service” from a company called DocX—yes, a price list for forged documents. Talk about your one-stop shopping!
  
So in other words, a massive fraud was carried out, with the inevitable innocent bystander getting caught up in this fraud: The guy who got foreclosed and evicted from his home in Florida, even though he didn’t actually have a mortgage, and in fact owned his house free-and-clear. The family that was foreclosed and evicted, even though they had a perfect mortgage payment record. Et cetera, depressing et cetera.
  
Now, the reason this all came to light is not because enough people were getting screwed that the banks or the government or someone with power saw what was going on, and decided to put a stop to it—that would have been nice, to see a shining knight in armor, riding on a white horse.
  
But that’s not how America works nowadays.
  
No, alarm bells started going off when the title insurance companies started to refuse to insure the title.
  
In every sale, a title insurance company insures that the title is free-and-clear: That the prospective buyer is in fact buying a properly vetted house, with its title issues all in order. Title insurance companies stopped providing their service because—of course—they didn’t want to expose themselves to the risk that the chain-of-title had been broken, and that the bank had illegally foreclosed on the previous owner.
  
That’s when things started gettin’ innerestin’: That’s when the Attorneys General of various states started snooping around and making noises (elections are coming up, after all).
  
The fact that Ally Financial (formerly GMAC), JP Morgan Chase, and now Bank of America have suspended foreclosures signals that this is a serious problem—obviously. Banks that size, with that much exposure to foreclosed properties, don’t suspend foreclosures just because they’re good corporate citizens who want to do the right thing, with all the paperwork in strict order—they’re halting their foreclosures for a reason.
  
The move by the United States Congress last week, to sneak by the Interstate Recognition of Notarizations Act? That was all the banking lobby—they wanted to shove down that law, so that their foreclosure mills’ forged and fraudulent documents would not be scrutinized by out-of-state judges. (The spineless cowards in the Senate carried out their Master’s will by a voice vote—so that there’d be no registry of who had voted for it, and therefore no accountability, the corrupt pricks.)
  
And President Obama’s pocket veto of the measure? He had to veto it—if he’d signed it, there would have been political hell to pay, plus it would have been challenged almost immediately, and likely overturned as un-Constitutional in short order. (The jug-eared milquetoast didn’t even have the gumption to veto it—he pocket vetoed it.)
  
As soon as the White House announced the pocket veto—the very next day!—Bank of America halted all foreclosures, nationwide.
  
Why do you think that happened? Because the banks are screwed—again. By the same fucking thing as the last time—the fucking Mortgage Backed Securities!
  
The reason the banks are fucked again is, if they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for.
  
And it won’t matter if a particular case—or even most cases—were on the up-and-up: It won’t matter if most of the foreclosures and evictions were truly because the homeowner failed to pay his mortgage. The fraud committed by the foreclosure mills casts enough doubt that now, all foreclosures come into question. Not only that, all mortgages come into question.
  
People still haven’t figured out what this all means—but I’ll tell you: If enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loan and keep their house, scott-free? Shit, that’s basically a license to halt payments right the fuck now. That’s basically a license to tell the banks to fuck off.
  
What are the banks gonna do—try to foreclose and then evict you? Show me the paper, motherfucker, will be all you need to say.
  
This is a major, major crisis. This makes Lehman’s bankruptcy look like a spring rain, compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks on the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts?
  
If this isn’t handled right, then this will be the second leg down, in the American Death Spiral.

    Oh dear Lord, he said, calm yet despondent. Look at it, he said. I mean just look at it! Have you ever seen anything like it?!?

    No, said the koala—truthfully. And you know, uh . . . it’s . . . It’s pretty disgusting, actually. So would you mind putting that thing away?


So, my father in law has a mortgage which he owes a lot of money on.  Might there be a way to find out if it has been improperly transferred?
Title: Re: Financial fuckery thread
Post by: Cain on October 15, 2010, 08:44:15 pm
The banks are, apparently, starting a fightback against this attempt to stop foreclosure.  They're deeply, deeply worried about the whole business of this, as they've been massively irresponsible in actually keeping track of the ownership of mortgages they sold.  Banks are starting to lean on Judges ruling against them, and giving money to the opposition politicians who do not support the judges (no link on this, relying on personal sources).

The markets are now apparently starting to punish them (http://www.nakedcapitalism.com/2010/10/foreclosure-crisis-finally-hitting-banks-where-it-hurts-their-stock-prices.html) over this.  

We also know now the "moratoriums" on foreclosure are largely bullshit (http://www.news-press.com/article/20101013/RE/101012064/1075/Lee-County-foreclosures-continue).
Title: Re: Financial fuckery thread
Post by: Disco Pickle on October 15, 2010, 09:19:00 pm


So, my father in law has a mortgage which he owes a lot of money on.  Might there be a way to find out if it has been improperly transferred?

My sister, who works for BoA, said the most damning thing you can do to hold off a foreclosure is tell them to "produce the note"

You cannot be foreclosed on unless they can prove ownership of the house.  I know a few people doing this right now.

they got traded so many times a lot of the time no one knows where the damn note is.

It could help give him time to catch up.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on October 15, 2010, 09:45:49 pm


So, my father in law has a mortgage which he owes a lot of money on.  Might there be a way to find out if it has been improperly transferred?

My sister, who works for BoA, said the most damning thing you can do to hold off a foreclosure is tell them to "produce the note"

You cannot be foreclosed on unless they can prove ownership of the house.  I know a few people doing this right now.

they got traded so many times a lot of the time no one knows where the damn note is.

It could help give him time to catch up.

There's no danger of foreclosure at the moment.  He's terribly responsible about it all.
Title: Re: Financial fuckery thread
Post by: Cain on October 17, 2010, 01:03:05 pm
More on QE2, from Matt Taibbi

http://www.rollingstone.com/politics/matt-taibbi/blogs/TaibbiData_May2010/217520/83512

Quote
It’s amazing, given the attention the Tea Party allegedly is paying to government waste and government spending, that there hasn’t been more controversy about the now-seemingly-inevitable arrival of “QE2” – a second massive round of money-printing cooked up by the Fed to prop up both the government and certain sectors of the economy. A more overtly anticapitalist and oligarchical pattern of behavior than the Fed’s “Quantitative Easing” program could not possibly be imagined, but the country is strangely silent on the issue.
 
What is “QE”? The first round of “quantitative easing” was a program announced by Ben Bernanke last March in response to the financial crisis, ending in March of this year. In what will soon be known as “QE1”(i.e. once QE2 is announced), Bernanke printed over a trillion dollars out of thin air, then used that money to buy, among other things, mortgage-backed securities (MBS) and Treasury Bonds. In other words, the government was printing money to a) lend to itself and b) prop up the housing market, with Wall Street stepping in to take a big cut.
 
That was QE1. There has long been speculation that another trillion-plus money-printing program called QE2 is coming, but only recently have there been concrete hints from the Fed along those lines. Among other things, New York Fed Vice President Brian Sack just this week squeaked out a comment about how, "In terms of the benefits, balance-sheet expansion appears to push financial conditions in the right direction.” Translating into English, “balance-sheet expansion” means the Fed adding to its balance sheet, i.e. printing money to buy stuff – i.e. QE2.
 
Thanks to that and other hints, most everyone now expects the Fed to announce a new QE program in November. The big banks have now openly begun to predict this, with JP Morgan Chase among others raising its odds of the Fed buying mortgages in the next 6 months from 10% to 50%. Another effect we’re seeing is that mortgage originators are hiring again, in anticipation of being able to fork out QE-funded mortgages.
 
QE is difficult to understand and the average person could listen to a Fed official talk about it for two hours right to his face and not understand even the basic gist of his speech. The ostensible justification for QE is to use a kind of financial shock-and-awe approach to jump-starting the economy, but its effects for ordinary people are hard to calculate. Theoretically the entire country has some sort of stake in this program, as (among other things) U the Homeowner may see your home value stay stable or fall less than it would have thanks to this artificial stimulus. You also may be able to buy a house when you wouldn’t before, thanks to declining mortgage rates.
 
And jobs, I suppose, may theoretically be created by all this dollar meth being injected into the financial bloodstream – although the inflationary effect of printing trillions upon trillions of new dollars would probably wipe out the value of the money you make at that job. When it comes to calculating what QE actually does for you, or how much it harms you, that question is just very hard to answer.

But one thing we know for sure is that big banks and Wall Street speculators are real, immediate beneficiaries of the program, as they suddenly have trillions of printed dollars flowing through the financial system, with endless ways to profit on the new chips entering the casino.
 
And by an amazing coincidence, many of the biggest players in the financial services industry have a habit of buying up MBS or Treasuries just before these magical money-printing programs of the Fed send their respective values soaring. If you own a big fund, for instance, and you know that the Fed is about to buy a trillion dollars of mortgage-backed-securities through a new Quantitative Easing program, buying a buttload of MBS a few weeks early is a pretty easy way to make a risk-free fortune. One of the worst-kept secrets on Wall Street is that the big bankers and fund managers get signals about the Fed’s intentions about things like QE well before they are announced to the rest of us losers in the public.
Title: Re: Financial fuckery thread
Post by: Cain on November 30, 2010, 03:14:12 pm
Your friends died and had debts?  You may now be responsible for them

http://www.upi.com/Business_News/2010/11/22/FTC-tightens-debt-collections-post-mortem/UPI-70761290455960/

Quote
WASHINGTON, Nov. 22 (UPI) -- Consumer advocates say the U.S. Federal Trade Commission has asked for trouble by revising rules for collectors chasing debt from people who have died.

The new rules allow for a wider circle of people to be contacted, beyond family members and the legal executor of the estate. There is also the term "spouse" that some advocates say is inaccurate as a marriage ends when one of the partners dies. The Washington Post reported Monday.

Some advocates warn that some debt collectors will press even friends to pay the debts of someone who has died, using a "moral obligation" argument, the Post said.

Robert Hobbs, an attorney with the National Consumer Law Center said the FTC should "strengthen protections for grieving families and friends, not open the door to debt-collection efforts."

"Presumably we're dealing with elderly people at the most vulnerable time that you could imagine," said attorney Richard Rubin, a consumer rights advocate in New Mexico.

"The debt doesn't disappear when the person dies. It's still a valid debt, and the collector can still collect it," said Joel Winston, FTC associate director of financial practices, the Post reported.

"We are determined to ensure that the collectors play by the rules," he said.

The FTC has extended the deadline to Dec. 1 for the public to comment on proposed rule changes.
Title: Re: Financial fuckery thread
Post by: AFK on November 30, 2010, 03:21:13 pm
:asplode:

I can see it now.  A new dating site where you are matched to your ideal mate by credit score. 
Title: Re: Financial fuckery thread
Post by: Cain on May 08, 2011, 04:52:08 pm
The US government has been taking accounting lessons from Arthur Anderson

http://www.economist.com/node/18618589

Quote
The definition used in Washington, DC, is “federal government debt held by the public”, which stood at 62% of GDP at the end of 2010. But if you instead use Europe’s preferred measure—general government gross debt, which also includes the borrowing of state and local governments and Treasury securities held by other government bodies, such as the Social Security Trust Fund—it jumps to 92% of GDP (see left-hand chart). That is on a par with Portugal’s level of public debt. Likewise, America’s budget deficit of 8.9% of GDP last year would have been 10.6% using Europe’s preferred measure.

Emphasis mine.  And there is more

Quote
Official figures also flatter America’s relative performance on productivity growth. The headline figures compiled by America’s Bureau of Labour Statistics are based on output per man-hour in the non-farm business sector. The European Central Bank tracks GDP per worker across the whole economy. By excluding the less efficient public sector, America’s productivity growth is bumped up. And by taking output per worker rather than output per hour, Europe’s measured productivity growth is reduced because average hours worked have fallen. Between 1995 and 2010 America’s real GDP per hour worked rose by an annual average of 2.1%, considerably less than the 2.7% rate in the non-farm business sector although still faster than the 1.1% pace in the euro area.

And even more

Quote
European press releases give the increase in GDP during the latest quarter—a rise of 0.9%, say. But Americans annualise quarterly growth, so an identical increase would be announced as a more impressive-sounding growth rate of 3.6%. Much more important, European economies’ initial estimates of GDP growth tend to be more cautious than those in America. Kevin Daly, an economist at Goldman Sachs, estimates that during the ten years to 2008, America’s quarterly GDP growth rate was, on average, revised down between the first and final published estimates by an annualised 0.5 percentage points. In contrast, GDP figures in the euro area were revised up by an average of 0.3 points. This matters because financial markets and the media focus heavily on the first estimate, but largely ignore revisions several years later.
Title: Re: Financial fuckery thread
Post by: Cain on June 11, 2011, 02:23:07 pm
More bad news

http://crookedtimber.org/2011/06/11/when-will-us-debt-be-downgraded-by-how-much/

Quote
The once unthinkable prospect that US government debt might lose its AAA rating has suddenly become a real possibility. In fact, it now seems about as likely as not. The problem is not so much “can’t pay” but “won’t pay”. The US, like quite a few other countries, has some fairly serious fiscal imbalances, but they aren’t pressing in the short run, and there is plenty of capacity to raise additional revenue or cut spending so as to stabilise the ratio of debt to GDP at a sustainable level.

The problem is that the total value of outstanding debt keeps growing (this would happen even with a stable debt/GDP ratio) and the US Congress requires periodic votes to approve this. They are usually the occasion for some grandstanding, but this time the Republican majority of the House of Representatives is seriously threatening a refusal, unless the Democrats agree to massive (and still unspecified) spending cuts. The due date for raising the debt ceiling passed a while ago, but an actual default is being staved off by some sharp accounting tricks, which will apparently work until 2 August. The other day, to prove they are serious, the Repubs introduced a motion for an unconditional increase in the debt ceiling, with the express purpose of voting unanimously against it, which they did.

At this point, loud alarm bells have started ringing for the big ratings agencies, Standard&Poors and Moodys. They will have to decide, well before August, whether to downgrade US government debt and if so by how much.


The agencies’ problem is essentially political. For anyone who is following the news, the possibility that the US might default is obvious, and there is no reason (especially in view of their appalling performance leading up to the GFC) to think that the ratings agencies have any insights unavailable to the rest of us. But they have to make a choice and that choice will have significant financial, economic and political implications.

If the standard treatment applied to other governments were followed in this case, the downgrade would already have taken place. While it’s still more likely than not that some way of avoiding default will be found, the stated positions of the two sides are so far apart that there must be a significant probability, say 10 per cent, that they will fail to agree. A security with a 10 per cent chance of defaulting in the next few months would normally be rated among the worst of junk bonds.

That’s not the whole story of course. Most of the time, when bond issuers default, part or all of the bondholders’ money is lost for good. It seems nearly certain that even if default took place, the period in default would be short, and the US would pay interest and principal in full. Nevertheless, nearly certain isn’t certain, and once something as unprecedented as a default took place, the consequences are impossible to predict.

More importantly, the US government isn’t “other governments”. The ratings agencies are US firms operating in a US political context, and their actions will be governed by a mixture of concerns, starting with self-preservation, but also including a desire to influence US policy in a way favorable to bondholders as a group. In the medium term, that means support for a rapid return to budget balance or surplus, ideally through cuts in spending on the poor and middle class, but including tax increases if necessary.

The short run picture is more complicated. Avoiding default is presumably the main concern, but if that could be achieved by a Dem capitulation to demands for large spending cuts, so much the better. On the other hand, maintaining any kind of credibility requires a downgrade well before default actually takes place, and probably a series of downgrades as the deadline approaches. Even a single downgrade would throw financial markets into disarray (among other things, investors who are required to hold AAA assets would have to dump Treasuries and, presumably, buy the bonds of other governments). That in turn would place huge pressure on the Republicans. While the idea of “not raising the debt ceiling” polls pretty well, the reality of “destroying the US credit rating” probably won’t.

The most likely response seems to be an increasingly loud set of alarms about the need for a short-term agreement on the debt ceiling, combined (both becuase the agencies want it and because they need to placate the Repubs) with warnings about the need for a rapid return to fiscal rectitude. That’s not in fact what is needed (rather the US needs more stimulus now combined with a substantial increase in tax revenue in the long term), but it’s a message that will play well among the Serious People in Washington.

We’re already seeing this, with mid-July mentioned as crunch time. The problem is that the warnings may well not be enough. There’s no sign that the Repubs are willing to give an inch on tax increases. Agreeing to the cuts they want, with no tax increases would be politically suicidal for the Dems, which is not to say they won’t do it, but must raise the possibility of a breakdown.
Title: Re: Financial fuckery thread
Post by: Juana Go? on June 12, 2011, 03:26:02 am
What specifically does that mean for the US? I looked up on it a bit, but I don't think that Argentina's situation is going to mirror ours, is it?
Title: Re: Financial fuckery thread
Post by: Cain on June 14, 2011, 01:59:48 am
It means the debt the US has already accumulated will go up in interest rates and the US will not be able to borrow more money - meaning cuts will be needed instead.

Also, speaking of downgraded debts, Greece's credit rating just became CCC, putting it on a par with Ukraine and Madagascar in terms of finance.  I expect Athens will have been burnt to the ground by tomorrow morning.
Title: Re: Financial fuckery thread
Post by: Cain on June 18, 2011, 05:15:16 pm
Just looked at European bank exposure to Greece.

This is bad.

Germany is the most exposed, of course, but the UK has £10 billion in private investment on the line (plus £6 billion in public money) and France is twice as exposed as the UK.  The longer a bailout is drawn out, the more likely some French and German banks will collapse.  If the firewall around Spain then also goes down the drain....well then, we're looking at a second global economic collapse.

This could all have been avoided if Greece had nukes (http://rothkopf.foreignpolicy.com/posts/2011/06/17/if_greece_had_nukes_they_would_be_bailed_out_by_now).
Title: Re: Financial fuckery thread
Post by: Jenne on June 18, 2011, 11:10:48 pm
Well, he's right.  What the Greeks are and do is basically hold historical relevance and a nice sunny place to go on vacation.  And really great olives.

IF you're going to be a country that relies upon the wealth of others to get yourself going and sustain your people, you best be important to those others.  It makes sense to me, though I do feel bad for the Greek citizens caught up in all this. 
Title: Re: Financial fuckery thread
Post by: Doktor Howl on June 23, 2011, 02:15:48 am
Once again, Cain is 2 weeks ahead:

http://beta.news.yahoo.com/fed-wont-act-soon-weak-economy-041145552.html
Title: Re: Financial fuckery thread
Post by: Cain on June 23, 2011, 07:09:57 am
It's interesting to note that the Fed doesn't seem to be worried about systemic financial collapse from Greece defaulting.

Interesting because we've been sold a parade of stories in Europe over the past two weeks how if Greece defaults its Lehman Brothers all over again, plagues of locusts, cats living with dogs oh my.

It could just be the Fed are blissfully unconcerned with that due to gross stupidity (a factor I cannot discount), but at the same time, a nation defaulting is not the same as a company collapsing.  Greece will still exist the day after it defaults (lots of it on fire, but nevertheless).  It could be the risk of contagion has been overestimated by certain shrill bailout/austerity supporters, precisely to get people to support their policies.  Equally, it is not like you hear about how London bailing out Northern Ireland is going to ruin the economy, the function of a nation-state is to transfer wealth in order to promote stability.  The problem is the EU refuses to think of itself as a nation-state, for various reasons.

It will be bad for the Eurozone, regardless.  Greece will probably have to leave the Euro and there is no clearly established procedure for doing that.  We're already seeing potential fallout in Turkey, with the recently re-elected government there saying it will take EU criticisms on board, but will not feel beholden to agreeing to them, since membership has been blocked so many times and anyway they're not sure if they want to join the club now.  And once Greece bails, it opens the door to further defections or expulsions.  All of the PIIGS might get thrown out, and I can see the Baltic states being thrown under a bus as well.
Title: Re: Financial fuckery thread
Post by: Jenne on June 23, 2011, 02:43:26 pm
I was going to say--I'm wondering how Turkey and the Baltics will take this--and waitaminnit--Greece is "leaving" or "being thrown out"?  Which is it?

Am not understanding...

Title: Re: Financial fuckery thread
Post by: Cain on June 23, 2011, 02:48:07 pm
Could be either.  There is no set procedure for leaving the EU currently.  They may fall, be pushed, or decide to jump.

So far though, I'm thinking the risk of a default is higher than that, and the Greeks getting their bailout higher than that again. 

Croatia is still looking to join the EU, but Croatia is a fucking backwater anyway (consistently underrated football team, though).
Title: Re: Financial fuckery thread
Post by: Jenne on June 23, 2011, 02:50:54 pm
Huh.  So perhaps a "mutually agreed upon exit"?  I can't imagine THAT is going to go down a treat.
Title: Re: Financial fuckery thread
Post by: Cain on June 23, 2011, 02:54:41 pm
Perhaps.  Or the Big Three shoving Greece out of the treehouse club.  Or Germany picking up it's ball and going home.  Or the Euro being dissolved and national currencies being restored.  Or full political-economic integration.  Or the EU being disbanded.  Or even the UK joining the Euro to boost investor confidence.

All of these rumours are currently circulating, by the way.  In roughly that order of credibility.
Title: Re: Financial fuckery thread
Post by: Jenne on June 23, 2011, 03:12:59 pm
It'd be intriguing to watch the last 4 happen, but the first 2 are more likely.
Title: Re: Financial fuckery thread
Post by: Cain on June 23, 2011, 03:20:14 pm
I'm all for full political-economic-military integration, with a heavy dose of military Keynesianism to offset the financial crisis. 

But no-one ever listens to me.
Title: Re: Financial fuckery thread
Post by: Jenne on June 23, 2011, 03:24:42 pm
:lulz:  Well, little wonder as to why.  :lulz:

But seriously, how very sad if the endgame here is the destruction of the EU.  Pretty sure that spells doom for Eurozone's prospects globally, and a gee, the market's now well and FUCKED everywhere else.  Especially here. 

I think my headache just got worse.
Title: Re: Financial fuckery thread
Post by: Cain on June 23, 2011, 03:27:04 pm
The EU's the largest market in the world. 

If it goes down, there is no telling what will follow.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on June 23, 2011, 03:45:03 pm
I'm going to keep my fingers crossed for the UK integrating into the Euro.

Not because I necessarily think it is a good idea, or because I think it is even likely to happen, but purely because I want to see my Thatcherite father's head explode.  :lulz:
Title: Re: Financial fuckery thread
Post by: Jenne on June 23, 2011, 04:07:44 pm
...that's one of the less-likely scenarios to my mind.  The UK would become like Germany.  They really do NOT want the headaches and the choices that Germany faces since it started this whole thing.

Personally, I think it'd make the UK stronger.  But autonomy's at a premium these days, I guess.
Title: Re: Financial fuckery thread
Post by: Cain on June 23, 2011, 10:03:37 pm
http://www.bbc.co.uk/news/business-13896201

Quote
David Cameron has told European Union leaders that the UK will oppose using EU-wide money to bail-out Greece.

The current 110bn euros ($156bn; £98bn) Greek rescue package is a combination of funds from fellow eurozone nations and the International Monetary Fund.

Yet, after eurozone countries agreed in principle to give Greece an extra 120bn euros, there is a suggestion that cash from EU-wide funds may be used.

The prime minister said such funds should not be used in any way.
Key vote

Mr Cameron made the comments at the summit of EU leaders in Brussels. They reiterate previous statements by Chancellor George Osborne.

At present the UK government has contributed to the existing bail-out for Greece through the funds it gives the IMF.

The eurozone money being given to Greece currently comes from the European Financial Stability Facility, to which only the 17 eurozone nations contribute.

The UK contributes to the wider European Financial Stabilisation Mechanism, which covers the whole of the EU.

The Greek parliament will vote next week on the government's latest round of spending cuts.

If the vote goes through, then Greece will get the next 12bn euros instalment of the current 110bn euros of eurozone and IMF funds.

Greece needs this month by 15 July, or else it will default on its loan payments.

However, many economists think that even if Greece gets the latest 12bn euros it will still default at some time in the future.
Title: Re: Financial fuckery thread
Post by: Jenne on June 23, 2011, 11:34:54 pm
This part was interesting to me:

Quote
While Greece's continuing debt woes are dominating the EU summit, the question of who exactly contributes to any second giant Greek bail-out fund later in the year is unlikely to be decided.

Instead, the 27 EU leaders are expected to reaffirm their more general determination to help Greece sort out its problems, while defending the single currency.

How exactly they propose to do that will be interesting.
Title: Re: Financial fuckery thread
Post by: Cain on June 24, 2011, 07:21:50 am
Quote
David Cameron has won his battle to limit the amount of money the UK will have to contribute towards a second financial bail-out for Greece.

The current 110bn euros ($156bn; £98bn) Greek rescue package is a combination of funds from fellow eurozone nations and the International Monetary Fund.

With a second bail-out due in the autumn, there had been a suggestion cash from EU-wide funds may be used.

This will now not happen, but the UK will still contribute via the IMF.

"This is the right outcome for the British taxpayer," a Downing Street source told the BBC after the vote.

The confirmation that the European contribution to the second Greek rescue package will again be limited to eurozone countries - those that use the single currency - was made in Brussels by European Council President Herman Van Rompuy.

That aside, the most amusing thing about all of this is watching one of the great debtor nations of the 20th century, in fact the industrialised country which has defaulted the most, EVER, and manipulated it's own currency just before the introduction of the Euro to turn itself into an exporting nation with other EU countries expected to import its goods (and stimulate economic growth but stall wage increases), bitch out Greece concerning economic management.

Credibility knocking, we'd like to remind you 100 years of German economic fuckups.
Title: Re: Financial fuckery thread
Post by: Rumckle on June 25, 2011, 06:24:18 am
Croatia is still looking to join the EU, but Croatia is a fucking backwater anyway (consistently underrated football team, though).

Wait, isn't football performance how you measure economies in Europe?


Anyway, I found this article  (http://www.smh.com.au/business/world-business/pigs-wont-fly-but-germany-should-20110619-1ga2d.html) interesting, suggesting that Germany should leave the EU. The reasoning is that a slightly weakened EU economy, is better than a rather unequal economy, plus it may be easier to get Germany to leave than getting PIGS to leave. What are your thoughts on this? It seems kind of reasonable to me, but I think the author is underestimating how screwed up some of those countries are.
Title: Re: Financial fuckery thread
Post by: Cain on June 25, 2011, 07:50:50 am
There's an element of logic to what he says.  It doesn't solve the immediate, underlying problem with the PIIGS, but it removes aspects of the Euro which make it so vulnerable to this kind of systemic risk.  And a devalue is needed to help those countries, and cannot be achieved without Germany.

This also ties into German currency/productivity manipulation in the lead up to the introduction of the Euro, although that is an insanely complicated topic.  Suffice to say, some of the German productivity boom is due to devaluing the D-mark in the lead up to the introduction of the Euro, allowing wages to stagnate while improving prospects for export.  Because of the complicated way in which Euro values were determined, this manipulation ran over once the currency changed.  But as German productivity rose, the value of the Euro rose in line with it, leaving lesser economies high and dry.
Title: Re: Financial fuckery thread
Post by: Rumckle on June 27, 2011, 09:32:53 am
I was just looking at some data about Greece from the World Bank's website, here are a couple of interesting graphs (I added in US, UK and Aus for comparison):

http://data.worldbank.org/indicator/SL.TLF.CACT.ZS/countries/GR-US-AU-GB?display=graph

http://data.worldbank.org/indicator/SL.UEM.LTRM.ZS/countries/GR-US-AU-GB?display=graph

http://data.worldbank.org/indicator/SP.POP.0014.TO.ZS/countries/GR-US-AU-GB?display=graph

http://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS/countries/GR-US-AU-GB?display=graph

Title: Re: Financial fuckery thread
Post by: LMNO on July 11, 2011, 05:45:03 pm
A bit more Krugman:

http://krugman.blogs.nytimes.com/2011/07/11/monetary-rage/

(Edited)

Quote
There’s something about money, it turns out, that sends many people into blind rage — usually of the kind... described as “Ron Paul plus"...

So what is it about money? I don’t have a full explanation, but here’s a thought: monetary economics is inherently about market imperfections. In a frictionless, perfect-information, costless-calculation world we wouldn’t need money, and it wouldn’t matter how prices were listed.

Monetary theory — and monetary policy — are, then, all about dealing with an imperfect, frictional world. As a consequence, sensible policy is based around trying to figure how to reduce the costs of these frictions and imperfections.

So why the rage? I suspect that it’s because a certain sort of person wants more purity than the real world is willing to supply. They want to believe in perfect markets, delivering perfect outcomes if only the government would stay out of the way. And so they want to believe that money too can be perfect if only we take it out of human hands, and make it good as gold, literally.

And when you point out that it doesn’t work that way, that money is a social convention meant to deal with an imperfect world, and that dealing with that imperfect world sometimes means that central banks need to take exceptional action, they fly into a rage.

That is to say, they aren't doing enough SCIENCE.
Title: Re: Financial fuckery thread
Post by: LMNO on July 14, 2011, 04:19:02 pm
http://krugman.blogs.nytimes.com/2011/07/14/obama-moderate-republican/

Quote
Nate looks at polling, and extracts the following implied preferences for the mix between tax increases and spending cuts in a debt deal:

What Obama has offered — and Republicans have refused to accept — is a deal in which less than 20 percent of the deficit reduction comes from new revenues. This puts him slightly to the right of the average Republican voter.


Overton Window, much?
Title: Lehman Bros Global Risk Officer now working for the World Bank
Post by: Cain on July 20, 2011, 02:20:15 am
Well, I certainly feel much safer now

http://thinkprogress.org/yglesias/2011/07/17/271218/what-could-go-wrong/

Madelyn Antoncic moved from the above named position to Vice President and Treasurer for the World Bank.
Title: Debt ceiling talks collapse
Post by: Cain on July 23, 2011, 06:01:26 pm
Bohener tells Obama to go suck one, and storms out.  Obama made the reasonable proposal that taxes would need to be increased, on top of spending cuts (of which there were many - several were designed as key concessions to the Republicans).

August 3rd is looming close.
Title: Re: Financial fuckery thread
Post by: Freeky on July 23, 2011, 06:15:09 pm
I don't know what all those spending cuts were, but I do know that if I asked and found out, I would need a couple of drinks to make it through the day.

Bleh.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 24, 2011, 03:14:35 am
I don't know what all those spending cuts were, but I do know that if I asked and found out, I would need a couple of drinks to make it through the day.

Bleh.

I'd like to know personally.  I am sure a good chunk of them are going to be regulatory agencies and I'd like to know what I can now get away with.
Title: Re: Financial fuckery thread
Post by: Cain on July 24, 2011, 03:33:11 am
The most contentious were Medicaid and Social Security cuts.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 24, 2011, 04:09:24 am
The most contentious were Medicaid and Social Security cuts.

That I kind of assumed.  That's going to be a big hassle for me because my father in law helps us out a lot and he is on social security.

The AARP is fairly politically powerful.  I hope they roast the teabaggers.
Title: Re: Financial fuckery thread
Post by: Cain on July 24, 2011, 04:12:56 am
http://www.bbc.co.uk/news/world-us-canada-14263644

Quote
US President Barack Obama has held an emergency meeting with congressional leaders in a last-ditch bid to avert an economically catastrophic debt default.

Mr Obama called the meeting after talks with Republican House Speaker John Boehner broke down on Friday.

Both Democrats and Republicans are divided on how to control future spending.

Congress must approve a plan to raise America's debt ceiling before the 2 August default deadline.

If the US fails to meet the deadline to raise the $14.3tn limit on US borrowing, the Treasury could run out of money to pay all of its bills - which could lead to interest rate rises, threaten the US economic recovery and in turn the global recovery.

Mr Obama was joined at the negotiating table on Saturday by his Vice-President Joe Biden, Mr Boehner, House Minority leader Nancy Pelosi, Democratic Senate Majority leader Harry Reid and Senate Republican leader Mitch McConnell.

The Associated Press reported that they were unsmiling as the meeting began and most of them avoided reporters when they left the White House.

The White House afterwards urged Congress to "refrain from playing reckless political games with our economy... and do its job, avoiding default and cutting the deficit".

Both Mr McConnell and Mr Boehner issued statements saying they intended "to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States".

Aides said they expected to work through the weekend to come up with bill that would be acceptable to both sides for Monday.

On Friday, Mr Boehner accused the president of moving "the goal posts", saying they had been close to a deal until Mr Obama demanded $400bn in tax increases on top of about $800bn in revenues that would have been reaped through a comprehensive rewrite of the tax code.

Mr Obama had declared his deal as "extraordinarily fair", offering to cut $650bn from Medicare, Medicaid and other entitlements, as well as slashing $1tr in discretionary spending.

Republicans have been unwilling to consider raising new taxes to counter the growing budget deficits.

The Democrats have been opposed to cutting popular healthcare and welfare programmes for pensioners and the poor.

The Republicans are playing a very dangerous game here. It's almost worth seeing the world economy collapse again, just to see them get burnt for it.
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 24, 2011, 04:41:48 am
Are you sure they would? Because I think Tea Baggers on the street would blame the Democrats.
Title: Re: Financial fuckery thread
Post by: Cain on July 24, 2011, 04:43:17 am
The Teabaggers will blame the Democrats regardless.  However, I think the obstructionist nature of the GOP here is fairly obvious now, and should economic shocks follow from their pig-headedness, they will take the blame.  Obama's deal is a very good one.  They're just too greedy for a better one.
Title: Re: Financial fuckery thread
Post by: Salty on July 24, 2011, 05:00:45 am
Quote
"to find a bipartisan solution to significantly reduce
Washington spending and preserve the full faith and credit of the
United States"
.

This makes me feel queasy. Like there's a gaping hole and where sense should provide some form of safety and structure faith does so instead.
Title: Re: Financial fuckery thread
Post by: Cain on July 24, 2011, 06:42:42 pm
http://www.bbc.co.uk/news/business-14267091

Quote
Vince Cable has attacked leading US Republican politicians for holding up a deal to reduce US government debt.

Speaking on the BBC's Andrew Marr Show, the business secretary called them "a few right-wing nutters in the American Congress".

Unless a deal on Capitol Hill is agreed before 2 August, the US Treasury could run out of money to pay its bills.

Mr Cable said it presented a bigger risk to the global markets than the continuing debt woes in the eurozone.
'Unthinkable' default

President Barack Obama wants to cut US debts by both reducing government spending and raising taxes.

Republicans in Congress are strongly opposed to the tax rises.

The two sides have to come to an agreement before the current $14.3tn (£8.7tn) limit on US borrowing can be raised.

An emergency meeting between President Obama and congressional leaders on Saturday failed to make a breakthrough.

However, US Treasury Secretary Timothy Geithner said on Sunday that he still expected a deal to be reached.

Mr Geithner told CNN: "It's unthinkable that this country will not meet its obligations on time.

"It's just unthinkable we'd ever do that. It's not going to happen."

Yet he added that a Republican proposal to first raise the debt limit and then negotiate the spending cuts was "irresponsible" and would not be agreed by Democrats.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 25, 2011, 05:36:02 am
Why aren't the democrats allowing for the debt ceiling to be raised first and then for negotiations to continue?
Title: Re: Financial fuckery thread
Post by: Jenne on July 25, 2011, 06:14:41 am
Politics.  Pure and simple.  They know they won't face "common" scrutiny here as much as the GOP at this point.

Hence why the GOP will finally cut a deal, but say in the end they "saved the economy by compromising."
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 25, 2011, 06:45:38 am
Politics.  Pure and simple.  They know they won't face "common" scrutiny here as much as the GOP at this point.

Hence why the GOP will finally cut a deal, but say in the end they "saved the economy by compromising."

If the GOP roll over and accept what Obama offered, wholesale,  anyone with a liberal agenda gets FUCKED (plus a lot of poor people).  I'd think the Dems would be in favor of continuing business as usual as long as possible.
Title: Re: Financial fuckery thread
Post by: Jenne on July 25, 2011, 03:50:54 pm
Politics.  Pure and simple.  They know they won't face "common" scrutiny here as much as the GOP at this point.

Hence why the GOP will finally cut a deal, but say in the end they "saved the economy by compromising."

If the GOP roll over and accept what Obama offered, wholesale,  anyone with a liberal agenda gets FUCKED (plus a lot of poor people).  I'd think the Dems would be in favor of continuing business as usual as long as possible.

Well, so far, Obama's the only one playing any real "ball" and like I said--the GOP was right here--he's trying to make them look like the bad guys they are in this scenario.  Not that the Dems are smelling like roses by ANY means, of course.

The GOP is just having a bad media moment--because now that Murdoch's empire is seemingly without clothes, so to speak, no one's giving Fux News any more than their usual due.  Media all over are pegging Boehner et al as a buncha whiney fuckwits hellbent on sacrificing the nation for their cause, while idiots like Bachmann screech that the economists are a bunch of ninnies for even SUGGESTING that this is a big deal.

:lulz:

The only thing making this totally hilarious to me is the fact they're getting folks like GEORGE WILL to repeat the same swill Bachmann and her teabaggin' posse have been yammering on about.  And George Will DEFINITELY fucking knows better.
Title: Re: Financial fuckery thread
Post by: Cain on July 25, 2011, 05:51:47 pm
Even the likes of David Brooks are realizing, as a result of this, how fucked in the head the GOP are.  Which is bloody miraculous.

It wont last, of course, but it is putting significant pressure on them.  Like I said...I think if they screw around, this time they will take the full blame for it.
Title: Re: Financial fuckery thread
Post by: Jenne on July 25, 2011, 06:50:34 pm
...it's certainly close to the wire.  I mean, lookit, they have caught Mitch McConnell saying over and over that in an election year, he's not going to hand Obama his second term by rescuing the economy.

And of course the public is reading this the right way:  he'll screw over the American economy and NOT DO HIS FUCKING JOB, even going so far as OBSTRUCTING OTHERS WHO WANT TO DO THEIR JOBS, all for the joy of flipping Obama off and making him fail.

And no one in the Teabagger sector is decrying this AT ALL.  I thought that party was created to "clean up" Washington DC?  All it's doing is creating more boils on the ass of Congress, as far as I can tell.
Title: Re: Financial fuckery thread
Post by: Cain on July 26, 2011, 07:49:01 am
8 days until Debtageddon.
Title: Re: Financial fuckery thread
Post by: Triple Zero on July 26, 2011, 10:42:14 am
The FISCALYPSE!
Title: Re: Financial fuckery thread
Post by: Faust on July 26, 2011, 11:20:44 am
8 days until Debtageddon.

This is the big one now isn't it? When the crunch comes it's going to have a knock on effect which will almost certainly send the banks into a spiral again.

:(
Title: Re: Financial fuckery thread
Post by: Luna on July 26, 2011, 11:29:21 am
Ah.

"We can't figure out any other way to impeach him, so we'll force him to default on the debt, THEN impeach him!"

http://thinkprogress.org/politics/2011/07/25/277893/rep-king-says-obama-will-be-impeached-if-government-defaults/
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 02:30:25 pm
Stuff and nonsense.  NO ONE will impeach a president who's worked at getting both assholes to the table, not his fault all they do is fart.

Posturing is soooo getting old on both sides.  Fer chrissakes.

This standoff they have going between the two houses of Congress also seems mightily staged to me.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on July 26, 2011, 02:35:25 pm
...
This standoff they have going between the two houses of Congress also seems mightily staged to me.

Doesn't it, though?
this whole thing smells like a setup.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 02:40:34 pm
...
This standoff they have going between the two houses of Congress also seems mightily staged to me.

Doesn't it, though?
this whole thing smells like a setup.

Yup.  As Roger says, we are getting the government we deserve.  :x
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 26, 2011, 03:23:09 pm
What do you think of Reid's proposed budget plan?  It looks like it cuts more than Boehner's plan while protecting social security, medicare and medicaid and not raising taxes.  I am curious what he is cutting, I haven't been able to find any info on that yet.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 03:33:53 pm
...personally, I think it's a low-ball yet desperate attempt to pass something, ANYthing, as long as medicare and medicaid are not touched.  It's assinine to not fix loopholes and raise taxes at this point, but whatchagonnado? 
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 26, 2011, 03:43:23 pm
...personally, I think it's a low-ball yet desperate attempt to pass something, ANYthing, as long as medicare and medicaid are not touched.  It's assinine to not fix loopholes and raise taxes at this point, but whatchagonnado? 

I'm personally concerned about food stamps, medicaid, and military disability pay because either myself or people that I depend on/depend on me receive one or more of these, but I am also curious where other cuts would end up coming from.  I was able to find some fairly vague info mostly having to do with the housing mortgage authorities.

I agree that not raising revenues is an absurd response.  Boehner's speech made no sense to me when he said that a small business, when faced with more expenses than revenue would cut expenses.  What any small business that could would do is increase revenues and cut expenses only if sufficient revenue couldn't be raised.  Nobody wants to fire people, or cut back on advertising, or quality, or any other sensible business expense.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 04:00:33 pm
The GOP are a bunch of fuckin' liars.  They don't want to raise taxes on the big corps...this has nothing to do with small business owners.  Because that's ONE loophole they can make that folks would agree with.  But their corporate sponsors and their campaign money won't let them.

"You can't tax the job creators."  They're not even CORPORATIONS anymore--they're fucking "Job Creators."  

All this when we have a hugeass unemployment rate.  So we're supposed to believe that not taxing them leads to more jobs, just like bailing out all those banks meant more people would get loans.

So much for the emperor and his invisible clothes, assholes!
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 26, 2011, 04:05:53 pm
The GOP are a bunch of fuckin' liars.  They don't want to raise taxes on the big corps...this has nothing to do with small business owners.  Because that's ONE loophole they can make that folks would agree with.  But their corporate sponsors and their campaign money won't let them.

"You can't tax the job creators."  They're not even CORPORATIONS anymore--they're fucking "Job Creators."  

All this when we have a hugeass unemployment rate.  So we're supposed to believe that not taxing them leads to more jobs, just like bailing out all those banks meant more people would get loans.

So much for the emperor and his invisible clothes, assholes!

Did you see his speech?  What I took from it wasn't that he was talking about tax increases (or the lack of them) on small businesses, but that he was trying to say that his experience as a small business owner informed his decision, as a politician to cut expenses.  That any sane small business owner would choose to cut expenses if they were larger than revenue.  Basically using a small business as a metaphor for government.  It's a flawed metaphor anyway, but even remaining within it his solution makes no sense.

Also, Boehner looks like a cartoon to me.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 04:06:20 pm
8 days until Debtageddon.

This is the big one now isn't it? When the crunch comes it's going to have a knock on effect which will almost certainly send the banks into a spiral again.

:(

Well, that's what Bachmann et al are hoping everyone WORLDWIDE will just sit back and ignore.  I mean, truth be known, I think the international community should be calling OFF THE FUCKING HOOK and spamming up the White House and Congress emails and faxes telling them to knock this shit off and quit fucking with the world economy.

Although, I probably give Bachmann too much credit, thar...she probably truly doesn't GET the fact that this shit is real and will hurt, all the globe over.

Except perhaps Australia.  Damn but they've made some really tasty choices lately (read: last decade) and are coming out lately smelling like fucking roses economy-wise.
Title: Re: Financial fuckery thread
Post by: Cain on July 26, 2011, 04:06:22 pm
8 days until Debtageddon.

This is the big one now isn't it? When the crunch comes it's going to have a knock on effect which will almost certainly send the banks into a spiral again.

:(

If it did happen, yes.  It'd be Greece, but with America's global reach.

I don't know what to think yet.  Markets in Asia are very nervous right now.  I'm not sure they know what to think, either.  There was chatter, late on the BBC last night, when they did a link-up with a Singapore news station, that the mere suggestion of a US default and downgrade had led to an increase in the use of the Yen and Renminbi as a reserve currency in the region.

It could be a set-up to a shafting, as suggested above.  But I'm not willing to discount that Boehner is under genuine pressure to let a default happen, because he is.  And like Mitch McConnell and the rest said, they're not just going to hand Obama a second term without extracting major confessions.

They've got him over a barrel.  And he knows it.  His proposals were more than fair, more than reasonable, but the GOP are neither.  His Goldilocks strategy will not help now.  The GOP want to humiliate him, want their pound of flesh.  And for those who think they would not let the nation suffer for it, I only have to point to the fate of New Orleans.

It'd also make great agitprop for impeachment because it would be the first time the US has ever defaulted on debt.  Even if not, you could expect to hear for the next thirty years about how "Democrats caused the US to default on its debt", much as you hear today from conservative writers about the endless caprice of the hippie and peace movements of the 60s.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 04:09:06 pm
The GOP are a bunch of fuckin' liars.  They don't want to raise taxes on the big corps...this has nothing to do with small business owners.  Because that's ONE loophole they can make that folks would agree with.  But their corporate sponsors and their campaign money won't let them.

"You can't tax the job creators."  They're not even CORPORATIONS anymore--they're fucking "Job Creators." 

All this when we have a hugeass unemployment rate.  So we're supposed to believe that not taxing them leads to more jobs, just like bailing out all those banks meant more people would get loans.

So much for the emperor and his invisible clothes, assholes!

Did you see his speech?  What I took from it wasn't that he was talking about tax increases (or the lack of them) on small businesses, but that he was trying to say that his experience as a small business owner informed his decision, as a politician to cut expenses.  That any sane small business owner would choose to cut expenses if they were larger than revenue.  Basically using a small business as a metaphor for government.  It's a flawed metaphor anyway, but even remaining within it his solution makes no sense.

Also, Boehner looks like a cartoon to me.

I try not to listen to the Orange Boner if I can help it--I get an instantaneous Tourrett's syndrome effect that doesn't wear off for hours when I do.

It's all just so much bullshit, brochure and rhetoric to excuse him and his posse from not doing what they were *sob, sniff, sob* SENT TO WASHINGTON TO DO *sob, sniff, sob*.  Which is WHAT exactly?  Oh yeah...work in bipartisan fashion to compromise and fix shit.

Great job, America.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 26, 2011, 04:31:42 pm
I don't usually watch political speeches, but watching Obama selling us a rack of shit with a smile, and then Boehner sprinkle a bunch of powdered smallpox on top and pick all the corn out and act like that improved things gave me an excellent rage fix.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 05:08:10 pm
I really just listen to half an ear to Obama...his rhetoric is just too thick when it comes to the signal to noise ratio anymore.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on July 26, 2011, 06:31:08 pm
...it's certainly close to the wire.  I mean, lookit, they have caught Mitch McConnell saying over and over that in an election year, he's not going to hand Obama his second term by rescuing the economy.

This is the best government that America is capable of producing.

Isn't that just the funniest fucking thing you've ever heard?
Title: Re: Financial fuckery thread
Post by: whenhellfreezes on July 26, 2011, 07:14:17 pm
The GOP are a bunch of fuckin' liars.  They don't want to raise taxes on the big corps...this has nothing to do with small business owners.  Because that's ONE loophole they can make that folks would agree with.  But their corporate sponsors and their campaign money won't let them.

"You can't tax the job creators."  They're not even CORPORATIONS anymore--they're fucking "Job Creators." 

All this when we have a hugeass unemployment rate.  So we're supposed to believe that not taxing them leads to more jobs, just like bailing out all those banks meant more people would get loans.

So much for the emperor and his invisible clothes, assholes!

Did you see his speech?  What I took from it wasn't that he was talking about tax increases (or the lack of them) on small businesses, but that he was trying to say that his experience as a small business owner informed his decision, as a politician to cut expenses.  That any sane small business owner would choose to cut expenses if they were larger than revenue.  Basically using a small business as a metaphor for government.  It's a flawed metaphor anyway, but even remaining within it his solution makes no sense.

Also, Boehner looks like a cartoon to me.

I really hate how the whole small business thing works. Small businesses are supposed to be some holy savior of the economy. And they are often claimed to be whats hurt by the taxes on the rich. As if your supposed to forget that there is such a thing as huge corporations. This shit combined with the whole "Job Creators" thing is some of the most horrendous yet effective spin ever.

They are trying to create as much sympathy for these corporations as possible. Next thing you know we are going to start personifying them... oh wait.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on July 26, 2011, 07:26:42 pm
https://www.tsp.gov/PDF/formspubs/GAO-AIMD-96-130.pdf

The GAO report on the same god damn thing from 1995-96. (remember that?)

We didn't default and there was no reason to think we WOULD because Treasury has authority to pay obligations by other means until an agreement on raising the ceiling can be reached.  The obligations are to publicly held debt (held mostly by private US citizens and trust funds)

All obligations (interest on the debt owed to the holders of Treasuries and Trust fund expenses) were handled through normal means for 12 of the 15 major trust funds.  The other 3 were used to provide the liquidity necessary to do this without exceeding the debt ceiling.  

Money that was not reinvested was used along with cash on hand.  All of those moneys were repaid to the funds after the debt ceiling was raised and the only loss in interest from funds not reinvested was the Exchange Stabilization Fund, approximately $1.2 million in interest from not reinvesting the treasuries used to fund our obligations.

Both of the other funds were compensated once the ceiling was raised.  The Exchange Stabilization Fund could not be because there was no legislation authorizing Treasury to do so.

Certain government employees had to go without a paycheck for a few weeks during the shutdown but those wages were eventually paid.

At 44 pages it's a pretty dry read but everyone should read it.  

"Not knowing what the fuck you're talking about" is running rampant in both parties on this.
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 07:42:15 pm
I remember that--but I don't remember the GLOBAL securities issue being so forefront at the time, either. 
Title: Re: Financial fuckery thread
Post by: Cain on July 26, 2011, 07:47:45 pm
The overall economic situation was a lot rosier in 1995, though.  And markets are lot more anxious now, and a lot more likely to respond in a dramatic manner to any refusal to raise the debt ceiling.

Deutche Bank did the analysis, and suggests that the US government could not hold on anywhere near as long this time around

http://ftalphaville.ft.com/blog/2009/10/12/77181/debt-and-the-dollars-demise-a-compendium-of-concerns/

Quote
One concern is that these same accounting maneuvers, when applied today, will not be able to stave off a government shutdown (or possible suspension of bond payments) for long. Today, the financing needs of the government are so much higher, that diversion of these funds would not last more than a couple of months, and probably far less. Total debt raised, marketable and nonmarketable, including intra-government issuance, has been running at about $130 bn/month for the last 6 months. Most of this amount, $125 bn, has been for marketable issuance to the public. In this context, the traditional measures are only brief delaying actions. For example, SLGS gross issuance was only $53 bn for all of FY2009, and in fact there was a net paydown in SLGS of some $44 bn; thus stopping the issuance of SLGS would have little impact in the larger picture. About $200 bn of non-marketable Government Account Series bonds are rolled over daily, but it’s unclear to us how much of these issues the Treasury Secretary could suspend from rolling over.

There would also likely be a run on US Treasury bonds, making the overall debt situation even worse.  Interest payments would spike, and this would have massive international repurcussions.

The Financial Times paints a far less rosy picture than your analysis, as well http://www.ft.com/cms/s/0/19ec4688-2015-11e0-a6fb-00144feab49a.html

Quote
Back in late 1995 and early 1996 the federal government faced a partial shutdown as congressional Republicans, emboldened by a sweeping midterm election victory, refused to back down until the Democratic occupant of the White House changed his profligate ways. Sound familiar?

Pledges of fiscal prudence were made and disaster averted, but not before Treasury investors were spooked and rating agencies mulled a US debt downgrade. The deficit in 1995 was a positively quaint $104bn, around 2010’s monthly average, and the debt ceiling just a third of today’s $14,300bn
Title: Re: Financial fuckery thread
Post by: Jenne on July 26, 2011, 07:51:55 pm
...that's what I thought.  Also, isn't there just MOAR MONEY in the system now, than there was before (meaning, countries in the mix are slightly richer, but that's also due to borrowing more...)?  That means there's MORE TO LOSE than ever before, as well.

It's all a clusterfuck.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on July 26, 2011, 07:54:11 pm
I should have mentioned the difference in the actual SIZE from then till now.  Pretty damn ridiculous to do that in only 15 years.

All the more reason for both sides to stop holding onto their "untouchables" and get the god damn thing under control.  It's unsustainable to keep it increasing like that.

Title: Re: Financial fuckery thread
Post by: Cain on July 26, 2011, 08:06:11 pm
Oh, it definitely needs to be dealt with.  However, now is definitely not the time for it.  All it achieves is capping the available economic resources the US can draw on to help promote growth-creating, job making economic activity.

Not that this seems to be a big priority for either party, but in an ideal world, it would be a major concern.
Title: Re: Financial fuckery thread
Post by: Cain on July 27, 2011, 05:44:50 am
http://www.bbc.co.uk/news/world-us-canada-14303325

Quote
The White House has warned that President Obama could veto a debt limit plan proposed by top House Republicans.

Meanwhile, Speaker John Boehner's plan to trim public spending and raise the limit met with resistance from rank-and-file members of his own party.

A House of Representatives vote on the plan was delayed from Wednesday after doubts arose over the cuts it proposed.

Washington remains deadlocked as a deadline to increase the government's borrowing authority looms on 2 August.

The US runs a budget deficit that topped $1.5tn (£920bn) this year, and has amassed a national debt of $14.3tn.

The government's authority to borrow more money has expired, and the US risks a first-ever default on its debt obligations if congressional and White House negotiators are unable to agree on a plan to increase the debt limit by 2 August.

The debt limit has been raised dozens of times in recent decades, mostly without partisan debate.

This year, though, conservative Republicans refused to allow an increase unaccompanied by dramatic cuts to the US budget deficit.

You know, stupid shit like this, Washington's various international crusades, inconsistent moral lecturing and putting Palin in a position where she could have potentially been one old man's heart attack away from the presidency is why Chinese hegemony is going to be welcomed with relief in many corners of the globe.  The Chinese care about exactly two things: making money and stability.  Practically everyone can get on board that program.
Title: Re: Financial fuckery thread
Post by: Freeky on July 27, 2011, 06:01:13 am
Well, THIS thread certainly brightened my day. 

Why did I ever wake up. :(  I was HAPPY when I was a stupid monkey. 

God fucking dammit. 
Title: Re: Financial fuckery thread
Post by: Triple Zero on July 27, 2011, 10:05:59 am
The Chinese care about exactly two things: making money and stability.  Practically everyone can get on board that program.

Sounds like a plan.

CHINA FOR PRESIDENT 2012

So they don't even care about subjugating the rest of the world to their censorship programs? Except for their stubborn incapableness in combating desertification, what's the downside again? :)
Title: Re: Financial fuckery thread
Post by: Cain on July 27, 2011, 12:31:23 pm
Well, the censorship is mostly for internal stability.  They don't care if you want to internally censor stuff or not, so long as you pay your bills on time.

At the same time, don't expect them to sign up to any treaties about human rights or which could potentially violate their sovereignty.  Even more so than the USA.
Title: Re: Financial fuckery thread
Post by: Jenne on July 27, 2011, 02:29:51 pm
...apparently the monkey cages are finally rattling.  Several news agencies are reporting that people are calling in and faxing/emailing constantly telling Congress to suck it up and compromise.  80% "fuck you" factor going on in the polling, with only 9% (according to PBS) blaming the Democrats.

Yolk's on you, GOP.  

And yet still, Boehner's (who from here on out is now "Boner" to me) approval amongst his own party went up.  Apparently, his posturing is WORKing on his own TeaBaggered portion of his party.  They now clap him on the back and have effectively stopped the whisper campaign that he's a shill for the White House.

The Orange BonerTM has gotten some street cred by shoving a stick up the economy's ass and refusing to take it out when America squeals in protest.


Good one, USandA!
Title: Re: Financial fuckery thread
Post by: Cain on July 27, 2011, 02:41:29 pm
GOP have been out of touch with mainstream public opinion for years.

Maybe the media will suck it up and recognize it, at last.
Title: Re: Financial fuckery thread
Post by: Jenne on July 27, 2011, 04:01:53 pm
...I WANT to believe they will.  I also want to believe that there's additional egg on Fux News's face as one of the many portions of the Murdoch News Empire that controls lamestream media in the US...which might have an effect at least on the more moderate section of the population (what's left of them, anyway).

But there are a lot of things that I want to believe that just aren't that good for me, anyway.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 27, 2011, 04:10:03 pm
I watched the speeches on Fox and they did not sound particularly sympathetic to Boehner.  Kind of surprised me actually.
Title: Re: Financial fuckery thread
Post by: Jenne on July 27, 2011, 04:14:53 pm
Well, here's the thing--his is a SHORT-TERM plan with REVENUE INCREASES.

The TWO things the TeaBaggers and their freshman congressional idiocracy are dead-set against!

And Reid's plan is the opposite--cuts funding to programs that are Democratic sacred cows, but has no revenue increases.

Add to this the fact that the freshman fuckeroos want a fucking goddamned constitutional amendment or THEY WON'T VOTE NUH-UH, YOU CAN'T MAKE THEM!

Yeah...so guess which SIDE of this Fux News is on?
Title: Re: Financial fuckery thread
Post by: Cain on July 28, 2011, 10:41:06 pm
http://www.bbc.co.uk/news/world-us-canada-14328183

Quote
A Republican bill to raise the US debt ceiling, cut spending and avert default on US debt is set for back-to-back votes in the House and Senate.

But House Speaker John Boehner's bill faces a conservative revolt, unanimous opposition by Senate Democrats and a White House veto threat.

Ahead of the votes, Republicans challenged Democrats to back the bill or take political blame for default.

Congress must raise the US debt limit by a deadline of next Tuesday.
'Untenable situation'

The US Treasury has warned the government will run out of money to pay all its bills unless a $14.3tn (£8.7tn) borrowing limit is increased by next Tuesday.

A vote on Mr Boehner's bill was tentatively scheduled for 17:45 local time (21:45 GMT). Senate Majority Leader Harry Reid said he would hold a vote in the Senate as soon as the House voted.

He predicted it would fail to pass the Senate, where Democrats and independents voting together hold 53 of 100 votes.

Republicans hold 240 of the 433 votes to be cast in the House, and need 217 of their members to back the bill to pass it.

Mr Boehner and his lieutenants have been whipping restive members of the House rank and file - including some who oppose lifting the debt limit under any circumstances - to support the plan.

Mr Boehner's plan would trim $917bn from the US budget deficit over 10 years and raise the debt limit by up to $900bn.

President Barack Obama supports another plan by top Senate Democrat Harry Reid, which would cut $2.2tn from deficits, and raise the debt ceiling by $2.7tn.

But that is thought unlikely in its current form to pass the Republican-controlled House.

The Boehner and Reid plans overlap in key ways - trimming spending over 10 years, shunning President Obama's call for tax increases on the wealthy and creating special lawmaker committees to craft future cuts.

But Mr Boehner's approach would force another debt-limit showdown during next year's presidential campaign, something Mr Obama has fiercely opposed.

Just in case anyone had the mistaken thought Boehner had the good of the nation at heart, read the final line.
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 29, 2011, 12:00:39 am
 :facepalm:
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 29, 2011, 12:04:06 am
And oh, my congressman is siding with Boehner. Of fucking course.
Title: Re: Financial fuckery thread
Post by: Luna on July 29, 2011, 03:20:45 am
And oh, my congressman is siding with Boehner. Of fucking course.

Write him a nice letter.  Explain that the fuckery does NOT amuse you, and you will be casting your vote in the next election accordingly... and if he keeps up with the fuckery, you will get off your ass and actively campaign AGAINST him.

Just came across this link, by the way:

http://www.salon.com/news/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest

Quote
When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively "shorts" long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable.
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 29, 2011, 04:02:49 am
I intend to and I'll be overnighting that sucker bright and early tomorrow.
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 29, 2011, 06:56:48 am
On a more lighthearted note/tangent:
http://gawker.com/5825826/stephen-colbert-expands-on-john-mccains-tea-party-hobbits-metaphor
 :lulz:
Title: Re: Financial fuckery thread
Post by: Cain on July 29, 2011, 10:27:40 am
http://www.bbc.co.uk/news/world-us-canada-14328183

Quote
A vote on a Republican bill to raise the US debt ceiling, cut spending and avert default has been delayed in the face of conservative resistance.

House Speaker John Boehner and Republican leaders were struggling on Thursday to convince rank and file lawmakers to vote for his bill.

The plan, however, is almost certain to fail in the Democratic-led Senate, and the White House has warned of a veto.

Congress must raise the US debt limit by a deadline of next Tuesday.

The US Treasury has warned the government will run out of money to pay all its bills unless a $14.3tn (£8.7tn) borrowing limit is increased by next Tuesday.
'Untenable situation'

A vote on Mr Boehner's bill was postponed for a few hours late on Thursday, as Mr Boehner and his lieutenants endeavoured to win support among rank and file conservative Republicans.

But eventually Republican Representative Kevin McCarthy announced that there would be no vote on Thursday evening.

Some Republicans - including Tea Party supporters who won House seats in 2010 and oppose raising the debt limit under any circumstance - feel the bill did not cut enough from the US budget.

Senate Democratic Leader Harry Reid predicted that even if the bill passes in the House, it will fail to pass the Senate, where Democrats and independents voting together hold 53 of 100 votes.

Republicans hold 240 of the 433 votes to be cast in the House, and need 216 of their members - plus Speaker Boehner in the event of a tie - to back the bill to pass it.

Meanwhile, International Monetary Fund chief Christine Lagarde warned that if the debt ceiling was not increased there could be an impact on the US dollar.

"One of the consequences could be a decline of the dollar as a reserve currency and a dent in people's confidence in the dollar," she said.
Title: Re: Financial fuckery thread
Post by: Faust on July 29, 2011, 10:34:59 am
I assume no one is going to be working on this at the weekend, so that basically leaves Monday to make the deal...
Title: Re: Financial fuckery thread
Post by: Cain on July 29, 2011, 10:38:24 am
I think they are, surprisingly enough.  BBC seemed to imply it, anyway.  Still, 4 days....it don't look good.
Title: Re: Financial fuckery thread
Post by: Faust on July 29, 2011, 10:41:48 am
I think they are, surprisingly enough.  BBC seemed to imply it, anyway.  Still, 4 days....it don't look good.

I'm shocked, politicians putting work before their weekend?

Our economy isn't all that far from what greece's was and our government doesn't convene again until after the summer holidays (I think we are the only country that the government do this in).
Title: Re: Financial fuckery thread
Post by: Triple Zero on July 29, 2011, 10:55:12 am
I think they are, surprisingly enough.  BBC seemed to imply it, anyway.  Still, 4 days....it don't look good.

I'm shocked, politicians putting work before their weekend?

Our economy isn't all that far from what greece's was and our government doesn't convene again until after the summer holidays (I think we are the only country that the government do this in).

summer recess? we have that too.
Title: Re: Financial fuckery thread
Post by: Faust on July 29, 2011, 10:58:05 am
I think they are, surprisingly enough.  BBC seemed to imply it, anyway.  Still, 4 days....it don't look good.

I'm shocked, politicians putting work before their weekend?

Our economy isn't all that far from what greece's was and our government doesn't convene again until after the summer holidays (I think we are the only country that the government do this in).

summer recess? we have that too.

Ah right, I imagined only we could be that lazy.
Title: Re: Financial fuckery thread
Post by: Cain on July 29, 2011, 11:08:21 am
Ours have a long summer break as well.  From July until September, pretty much.
Title: Re: Financial fuckery thread
Post by: Cramulus on July 29, 2011, 02:46:14 pm
I think they are, surprisingly enough.  BBC seemed to imply it, anyway.  Still, 4 days....it don't look good.

cats on NPR this morning said they expected it to be a weekend of colorful political theater
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on July 29, 2011, 04:27:42 pm
On a more lighthearted note/tangent:
http://gawker.com/5825826/stephen-colbert-expands-on-john-mccains-tea-party-hobbits-metaphor
 :lulz:

You know, I would have thought the teabaggers would have chosen Saruman instead of Sauron.  The one that seemed like an ally and a leader and turned out to be evil.
Title: Apple now has more cash than the USA
Post by: Cain on July 29, 2011, 07:40:14 pm
http://www.bbc.co.uk/news/technology-14340470

Quote
Apple now has more cash to spend than the United States government.

Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn (£45.3bn).

Apple's most recent financial results put its reserves at $76.4bn.

Obviously, the solution is to nationalize and liquidize Steve Jobs.

Anyway

http://www.bbc.co.uk/news/world-us-canada-14344411

Quote
US President Barack Obama has said Democrats and Republicans must compromise to cut the US budget deficit and raise the debt limit.

He warned time had almost run out, as Republican leaders scrambled to save their deficit-cutting bill amid a House of Representatives conservative revolt.

The Democrats meanwhile announced they would put their plan to the Senate.

The fiscal fiasco leaves the US inching closer to a potentially catastrophic default on federal debt next Tuesday.

The US government will start running out of money to pay all its bills unless a $14.3tn (£8.7tn) borrowing limit is increased by 2 August.

'Last train leaving'

At the White House, Mr Obama accused House Republicans of pursuing a partisan bill that would force Washington into another debt limit fight within months.

He said: "There are plenty of ways out of this mess, but we are almost out of time."

"The time for putting party first is over," he added. "The time for compromise on behalf of the American people is now."

In Congress, the arm-twisting continued on Friday.

House Speaker John Boehner and his lieutenants were working to whip Republicans into line behind their plan to cut the budget while raising the debt limit.

A vote on that bill was called off on Thursday night when it became clear Mr Boehner lacked support within his own party.

Senior Senate Democrats said the upper chamber would vote on a proposal at the weekend, and invited Republican Leader Mitch McConnell for compromise talks.

"Too much is at stake to waste even one more minute - the last train is leaving the station," Senate Democratic Majority Leader Harry Reid said.

But Mr McConnell accused Democrats of wasting precious time and obstructing a deal by vowing to block Mr Boehner's bill, should it be passed in the House.

"Republicans have been doing the hard work of governing this week," he said.

Mr Boehner convened a closed meeting of all 240 House Republicans on Friday morning to outline tweaks he has made overnight to the legislation.

Mr Boehner and other Republican leaders spent all day Thursday arm-twisting dissident lawmakers, but they were unable to win over enough conservative hardliners.

Some Republicans - including Tea Party supporters who won House seats last year and oppose raising the debt limit under any circumstance - feel the Boehner bill would not cut enough from the US budget.

Mr Boehner's plan faces certain rejection by the Democratic-controlled Senate, as well as a White House veto threat, but could form the basis of an eventual compromise.
Title: Re: Financial fuckery thread
Post by: Freeky on July 29, 2011, 07:48:38 pm
Is it me, or are the senate people starting to feel like they're a bit panicked, too? Like, things aren't working out The Way They Were Supposed To, so they're getting a teensy bit desperate because they might lose their jobs?

Or is that just me wishing they knew and cared how badly the rest of us down here are going to get fucked?  I realize that they DON'T care, I do, really.
Title: Re: Financial fuckery thread
Post by: Jenne on July 29, 2011, 08:10:25 pm
I think some are on board with the "gameplanplay" of perpetual stalemate, and some are actually NOT pleased with how this is going down.  Because SOME have to run campaigns for re-election, whereas next year, SOME get to sit back and just point fingers.
Title: Re: Financial fuckery thread
Post by: PopeTom on July 30, 2011, 12:14:58 am
Off the top of my head:

1) End the Bush tax cuts in their entirety.

2) Work to close loopholes in current tax code that let the wealthy and billion dollar corporations not pay their fair share of taxes.

3) End farm and oil subsidies (this includes the waste of time and money ethanol production currently is).

4) Leave Iraq. I'm not entirely sure why we went there but Saddam Hussein is dead so I imagine our goal is achieved. Let the people of Iraq figure out what kind of government they want.*

5) Leave Afghanistan. We went to war in Afghanistan because they were hiding Osama Bin Laden from justice. He's dead, mission accomplished. Let the people of Afghanistan figure out what kind of government they want.*

6) Over and above #s 4 & 5 cut military spending by 10-15%. The USA spends almost as much on its defense budget as all the other nations in the world combined. I think we can tone that down a bit.

*They can do this through diplomacy or shooting each other. Lets see how badly they want democracy.

Haven't given thought or examined what may be wrong with this solution.  I'm leaving that up to the Internet.
Title: Re: Financial fuckery thread
Post by: Salty on July 30, 2011, 07:11:10 am
So, some jackhole told me that everything would run as normal if the US can't pay it's bills in a couple of days, nothing would change.

How inaccurate is that? What actually happens if these fuckers don't do something on time?
Title: Re: Financial fuckery thread
Post by: Luna on July 30, 2011, 07:24:50 am
So, some jackhole told me that everything would run as normal if the US can't pay it's bills in a couple of days, nothing would change.

How inaccurate is that? What actually happens if these fuckers don't do something on time?

http://www.theatlantic.com/business/archive/2011/07/what-happens-if-we-dont-raise-the-debt-ceiling/242728/
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 30, 2011, 07:43:41 am
Wonderful.  :|

Off the top of my head:

1) End the Bush tax cuts in their entirety.

2) Work to close loopholes in current tax code that let the wealthy and billion dollar corporations not pay their fair share of taxes.

3) End farm and oil subsidies (this includes the waste of time and money ethanol production currently is).

4) Leave Iraq. I'm not entirely sure why we went there but Saddam Hussein is dead so I imagine our goal is achieved. Let the people of Iraq figure out what kind of government they want.*

5) Leave Afghanistan. We went to war in Afghanistan because they were hiding Osama Bin Laden from justice. He's dead, mission accomplished. Let the people of Afghanistan figure out what kind of government they want.*

6) Over and above #s 4 & 5 cut military spending by 10-15%. The USA spends almost as much on its defense budget as all the other nations in the world combined. I think we can tone that down a bit.

*They can do this through diplomacy or shooting each other. Lets see how badly they want democracy.

Haven't given thought or examined what may be wrong with this solution.  I'm leaving that up to the Internet.
As I understand it, if everything goes to shit in Afghanistan, then Pakistan has a good chance at following. Pakistan also has nukes, which they do attempt to protect (ie, from what I read, the only military folk with the key [or whatever it is] are from the eastern border, who are less likely to have ties to crazies from the west border), but everything's shot to shit, it's hard to control who gets what. I don't know enough about Iraq's current situation to say anything, but one through three and six, I totally agree with.
Title: Re: Financial fuckery thread
Post by: Salty on July 30, 2011, 07:47:47 am
So, some jackhole told me that everything would run as normal if the US can't pay it's bills in a couple of days, nothing would change.

How inaccurate is that? What actually happens if these fuckers don't do something on time?

http://www.theatlantic.com/business/archive/2011/07/what-happens-if-we-dont-raise-the-debt-ceiling/242728/

AH. So, in very pragmatic terms, we'll still be able to buy beer, it'll just cost a helluvalot more and the guy at the booze shop will give out money a dirty look, if he accepts it at all.

SWELL.

Well, swollen anyway.
Title: Re: Financial fuckery thread
Post by: Cain on July 30, 2011, 08:10:15 am
Wonderful.  :|

Off the top of my head:

1) End the Bush tax cuts in their entirety.

2) Work to close loopholes in current tax code that let the wealthy and billion dollar corporations not pay their fair share of taxes.

3) End farm and oil subsidies (this includes the waste of time and money ethanol production currently is).

4) Leave Iraq. I'm not entirely sure why we went there but Saddam Hussein is dead so I imagine our goal is achieved. Let the people of Iraq figure out what kind of government they want.*

5) Leave Afghanistan. We went to war in Afghanistan because they were hiding Osama Bin Laden from justice. He's dead, mission accomplished. Let the people of Afghanistan figure out what kind of government they want.*

6) Over and above #s 4 & 5 cut military spending by 10-15%. The USA spends almost as much on its defense budget as all the other nations in the world combined. I think we can tone that down a bit.

*They can do this through diplomacy or shooting each other. Lets see how badly they want democracy.

Haven't given thought or examined what may be wrong with this solution.  I'm leaving that up to the Internet.
As I understand it, if everything goes to shit in Afghanistan, then Pakistan has a good chance at following. Pakistan also has nukes, which they do attempt to protect (ie, from what I read, the only military folk with the key [or whatever it is] are from the eastern border, who are less likely to have ties to crazies from the west border), but everything's shot to shit, it's hard to control who gets what. I don't know enough about Iraq's current situation to say anything, but one through three and six, I totally agree with.

Pakistan has already gone to shit.

In fact, Pakistan is destabilizing Afghanistan, not the other way around.  And that destabilization is, in part, due to the presence of foreign soldiers and the loss of Afghanistan's "strategic depth" so long as it remains friendly with the USA and India.

If we had really wanted to fight a war on terror, the first place we should have visited was the offices of the ISI, and hanged the bastards.
Title: Re: Financial fuckery thread
Post by: Juana Go? on July 30, 2011, 09:38:11 am
I stand corrected, apparently.
Title: Re: Financial fuckery thread
Post by: PopeTom on July 30, 2011, 01:23:41 pm
As I understand it, if everything goes to shit in Afghanistan, then Pakistan has a good chance at following. Pakistan also has nukes, which they do attempt to protect (ie, from what I read, the only military folk with the key [or whatever it is] are from the eastern border, who are less likely to have ties to crazies from the west border), but everything's shot to shit, it's hard to control who gets what. I don't know enough about Iraq's current situation to say anything, but one through three and six, I totally agree with.

As a democratic nation I think Pakistan is always just one election away from the crazies is office.  For an example see the US House of Representatives.
Title: Re: Financial fuckery thread
Post by: Cain on July 30, 2011, 09:06:52 pm
http://www.bbc.co.uk/news/world-us-canada-14354088

Quote
The Democrat-controlled US Senate is seeking a vote on its plan to raise the nation's $14.3tn (£8.7tn) debt limit, which could determine whether a deal to avoid government default is possible.

Senate leaders want a prompt vote so the plan can be passed on Sunday.

But the House of Representatives pre-empted the Senate vote and rejected the bill on Saturday afternoon.

President Obama has urged Congress to get its house in order. The US risks default without a deal by 2 August.

The moves come a day after the Senate rejected a rival Republican bill passed in the House of Representatives.

The president backs Senate Majority Leader Harry Reid's proposal, which would cut $2.2tn from deficits and raise the debt ceiling by $2.7tn.

The Senate plan envisages raising the debt ceiling until after the 2012 elections. Republicans have sought a plan which raises the ceiling for just a few months.

The BBC's Paul Adams in Washington says the Treasury is already drawing up emergency plans in case a deal is not reached.

It is a measure of how the anxiety is spreading that troops in Afghanistan saw fit to ask Adm Mike Mullen, the chairman of the Joint Chiefs of Staff, whether they would be paid this month, he adds.

Democrat leaders in the Senate are said to be seeking agreement with Republicans to avoid procedural obstacles which could delay the Senate vote until Monday.

Mr Reid accused the Republicans of seeking to filibuster, or delay, proceedings.

"Unless there is a compromise, or they accept my bill, we're heading for economic disaster," he said.

Minority Leader Mitch McConnell accused the Democrats of stirring up opposition, but said he eagerly awaited Mr Reid's plan.

In a weekly radio address, Mr Obama reiterated that any solution on a default had to be bipartisan.

"There are multiple ways to resolve this problem," he said.

"Congress must find common ground on a plan that can get support from both parties in the House and in the Senate. And it has to be a plan that I can sign by Tuesday."
Title: Re: Financial fuckery thread
Post by: Cain on July 31, 2011, 07:52:44 am
BIPARTISAN CONSENSUS-GASM!

http://www.bbc.co.uk/news/world-us-canada-14354088

Quote
Democrats and Republicans have expressed cautious optimism about the chances of raising the US debt limit by Tuesday and averting possible default.

Republican Senate leader Mitch McConnell said there was "a level of seriousness with the right people at the table" as talks continued.

Senior Senate Democrat Richard Durban spoke of "a more positive feeling".

In a sign of the level of anxiety over the issue, troops in Afghanistan asked Adm Mike Mullen if they would be paid.

The admiral, who as chairman of the Joint Chiefs of Staff is on a visit to southern Afghanistan, said he did not know whether that would be the case if the US fails to raise the $14.3tn (£8.7tn) limit by 2 August.

Democrats and Republicans have so far rejected each others' proposals for cutting spending and raising the debt limit.

President Barack Obama backs Democratic Senate Majority Leader Harry Reid's proposal, which would cut $2.2tn from deficits and raise the debt ceiling by $2.7tn, meaning the issue would not have to be revisited until after the 2012 elections.

Late on Saturday, Mr Reid said he was postponing a planned procedural vote on his bill in the Senate - the latest stage in a series of Congressional stand-offs between the two parties.

"There are negotiations going on at the White House to avert a catastrophic default on the nation's debt. There are many elements to be finalised and there is still a distance to go," he said.

The vote, which had been expected at 0100 (0500 GMT) on Sunday, will now be held at 1300 (1700 GMT), he added.

Mr Reid's deputy, Richard Durban, said: "We're a long way from any kind of a negotiated agreement, but there is certainly a more positive feeling about reaching an agreement this evening than I've felt in a long time."
Title: Re: Financial fuckery thread
Post by: Luna on July 31, 2011, 12:08:16 pm
http://www.angryblacklady.com/2011/07/26/ahem-speaker-boehner-a-word-please/

Quote
Um, Speaker Boehner? Sir? About that press conference of yours last night? I’d like to correct a few misstatements lies, if you don’t mind.

Quote
These are difficult times in the life of our nation. Millions are looking for work, have been for some time, and the spending binge going on in Washington is a big part of the reason why.

People aren’t struggling because of this mythical “spending binge” you talk about. They are struggling because YOUR party’s president crashed our economy a few years back, sir.

Possibly one of the most polite ass-reamings I've read in awhile, there.
Title: Re: Financial fuckery thread
Post by: Cain on July 31, 2011, 01:24:13 pm
I'm going to make a confession here: I actually can't stand ABL.

Not because she's a blatant Democratic shill (though that is certainly part of it) but because of her constant humourless need to stick to her persona whenever mocked.  Which is pretty much every day.  She's pretty much the poster child for "Yeah, fuckface! Get ready to be beaten down. Grrr! Internet ain't so safe now is it motherfucker! Shit just got real! Bam!"
Title: Re: Financial fuckery thread
Post by: Cain on July 31, 2011, 06:22:55 pm
(http://i.imgur.com/1KlSa.gif)
Title: Re: Financial fuckery thread
Post by: PopeTom on July 31, 2011, 09:24:32 pm
YAY DOOM!!!!

Things like this make me long for the olden day of politics where you opponent was just as likely to have you assassinated as to compromise with you.   
Title: Re: Financial fuckery thread
Post by: LMNO on August 03, 2011, 02:58:02 pm
Every day, I am reminded that having a democracy in an under-educated country is a horrible, horrible thing.
Title: Re: Financial fuckery thread
Post by: Cramulus on August 03, 2011, 03:21:00 pm
ahhh stewart

part 1: http://www.thedailyshow.com/watch/mon-august-1-2011/dealageddon----a-compromise-without-revenues
part 2: http://www.thedailyshow.com/watch/mon-august-1-2011/dealageddon----angry-tea-party

In segment 1, Jon laments over how the president managed to completely cave and then act like he owns it
In segment 2 (the better of the two IMO), Jon points out how the tea party got everything they wanted and are still voting against the bill. It ramps up to a big frustrated rant about the tea party.

"Government isn't perfect, but some people wish it was better, not gone.

You're in a bank and it's a negotiation where you've got some hostages, and after getting everything you wanted, you're still making demands -- "I can still kill the hostages, right?""


 :horrormirth:
Title: Re: Financial fuckery thread
Post by: Cain on August 04, 2011, 03:57:10 am
http://www.bbc.co.uk/news/business-14396557

Quote
Debt-laden Italy is likely to default, but Spain might just avoid it, according to the British think tank, the Centre for Economics and Business Research.

With the countries weighed down by debt, the think tank modelled "good" and "bad" economic scenarios for both.

It found that Italy will not avoid default unless it sees an unlikely big jump in economic growth.

However, it said, "there is a real chance that Spain may avoid default".

Even though Italy has managed to run tight budgets, and has vowed to eliminate its deficit by 2014, the economy needs a significant boost in growth.

But its economy grew by just 0.1% in the first quarter of 2011 and further growth is expected to remain sluggish.

On Wednesday, Italian Prime Minister Silvio Berlusconi addressed parliament, saying the economy was "strong" and the nation's banks "solvent".

But many economists believe that the eurozone's third largest economy risks being engulfed in the debt crisis.

In a report published on Thursday, the CEBR calculated that Italy's debt would rise from 128% of annual output to 150% by 2017 if bond yields stay above the current 6% and growth remains stagnant.

"Even if the cost of borrowing goes back down to 4%, the growth rate is so anaemic that we see the debt-GDP ratio remaining at 123% in 2018," said Doug McWilliams, the CEBR's chief executive.

The conditions in Spain are better because its debt is much lower. Even under the "bad" scenario, Madrid's debt ratio would climb to no higher than 75% of national output.

"Fingers crossed but there is a real chance that Spain may avoid default and debt restructuring, unless it gets dragged down by contagion," Mr McWilliams said.

"Realistically, Italy is bound to default, but Spain may just get away without having to do so," he said.
Title: Re: Financial fuckery thread
Post by: Cain on August 04, 2011, 07:23:07 pm
There is talk on the BBC about the possible collapse of the Euro should Italy default.

In other words, if Italy goes down, the entire Eurozone follows.  And the Eurozone is the world's largest market...
Title: Re: Financial fuckery thread
Post by: Fast Eddy on August 05, 2011, 12:37:58 am
 :kingmeh:

We're not getting out of this without a second Great Depression, are we?
Title: Re: Financial fuckery thread
Post by: Triple Zero on August 05, 2011, 01:22:58 am
Aw, but euros is what I use to buy all my stuff ... :(
Title: Re: Financial fuckery thread
Post by: Rumckle on August 05, 2011, 01:24:06 am
Perhaps you should diversify, I hear tulips are a safe investment.
Title: Re: Financial fuckery thread
Post by: Eater of Clowns on August 05, 2011, 01:29:48 am
Aw, but euros is what I use to buy all my stuff ... :(

Perhaps you should diversify, I hear tulips are a safe investment.

 :lol:
Title: Re: Financial fuckery thread
Post by: Triple Zero on August 05, 2011, 02:16:34 am
:lulz:
Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2011, 04:55:25 pm
Very strange happenings on the stock market today.

http://www.bbc.co.uk/news/business-14423297

Quote
Instability on the stock markets has continued, despite better-than-expected US jobs figures.

There have been sharp falls in the past 24 hours amid a crisis of confidence due to the eurozone debt crisis and concerns about weak economic recovery in the US and Europe.

A fall in the US jobless rate caused the US markets to open higher and gave temporary relief to European indexes.

But London's FTSE and Frankfurt's Dax were soon down about 2% again.

European markets had been down as much as 4% in the morning, before recovering, and then lurching back down again by mid-afternoon.

Earlier, the EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said he thought the movements were "incomprehensible" and "not justified by the economic fundamentals", particularly in Italy and Spain, the latest focus of investors' concerns.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 05:01:07 pm
Yeah, I'm watching the hell out of this.  Hindsight being what it is it would have been best to move everything to cash yesterday but it's still not too late to cut my losses and bolt to treasuries for the rest of the year.

Probably make a decision after 2 when lunch has settled.  I'm still young and dumb enough to be fairly risky with my investments but I really don't want to take another beating like '08 if I can help it.



Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2011, 05:03:36 pm
Robert Peston, BBC's Finance Editor and Fifth Horseman of the Apocalypse, made a direct parallel between todays stock market instability and that of August 2007, when the credit crunch started.
Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2011, 05:04:43 pm
£38 billion wiped off the top 100 UK companies today, alone.  £148 billion in the last week.
Title: Re: Financial fuckery thread
Post by: Faust on August 05, 2011, 05:06:34 pm
I've got a share account set up now, I've been looking at pretrochemicals and gold but I'm going to hold on because the next week could drive everything down a lot further.

I'm a newb to this so if anyone has any suggestions I'm listening.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 05:16:52 pm
I've got a share account set up now, I've been looking at pretrochemicals and gold but I'm going to hold on because the next week could drive everything down a lot further.

I'm a newb to this so if anyone has any suggestions I'm listening.

buy low, sell high  :D

seriously though, I listen to a few different guys and what they're doing and then make decisions based on how much I'm willing to be risky that day.  I don't move things around often, sometimes only once a year to reinvest when I'm getting top heavy in one area.

Naturally, the people I listen to are Austrian school, libertarian types.  If your personal politics make you shy away from taking financial ques from those types well then..  you probably shouldn't be in the market.  Hate em or love em, they're watching this shit close and have a stake in making the right moves, or at least ones that wont have them jumping from skyscrapers by close of business day.

I'll dig up some links over lunch break.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 05, 2011, 05:23:17 pm
Quote
Earlier, the EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said he thought the movements were "incomprehensible" and "not justified by the economic fundamentals", particularly in Italy and Spain, the latest focus of investors' concerns.

This is an interesting way of saying the pilot's dead and nobody else knows how to land the plane.

ETA:  Or the pilot has been tied up and put in the bathroom by some dodgy-looking bankers.
Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2011, 05:25:44 pm
Quote
Earlier, the EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said he thought the movements were "incomprehensible" and "not justified by the economic fundamentals", particularly in Italy and Spain, the latest focus of investors' concerns.

This is an interesting way of saying the pilot's dead and nobody else knows how to land the plane.

ETA:  Or the pilot has been tied up and put in the bathroom by some dodgy-looking bankers.

I suspect the latter.  Channel 5 news over here just had a stockbroker on, asking for more "quantative easing".

They want some cheap money to re-inflate the bubble.  Which is the same response we've had to every economic crisis since the 80s, and so, obviously, will work fantastic.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 05, 2011, 05:26:41 pm
Quote
Earlier, the EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said he thought the movements were "incomprehensible" and "not justified by the economic fundamentals", particularly in Italy and Spain, the latest focus of investors' concerns.

This is an interesting way of saying the pilot's dead and nobody else knows how to land the plane.

ETA:  Or the pilot has been tied up and put in the bathroom by some dodgy-looking bankers.

I suspect the latter.  Channel 5 news over here just had a stockbroker on, asking for more "quantative easing".

They want some cheap money to re-inflate the bubble.  Which is the same response we've had to every economic crisis since the 80s, and so, obviously, will work fantastic.

Two years ago, I mentioned the need to eat these people.

Nobody listened.   :sad:
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 05:36:11 pm
http://www.schiffradio.com/

Peter Schiff is one I've listened to for a few years.  

Jim Rogers and his Rogers International Commodity Index ( RICI )
http://jimrogers-investments.blogspot.com/

When Jim Rogers is suggesting something, I tend to take his advice.  I listen to him probably more than any other investor out there.

I have quite a bit invested across several Blackrock funds and find they have done a decent job managing.  Any losses I took over the last two years in a poorer performing area was easily offset by gains in others.  They're currently taking the same beating everyone else is at the moment but I've made a lot of money with them over the last few years.

http://www2.blackrock.com/global/home/InvestorRelations/index.htm

http://libertarianinvestments.blogspot.com/ is hit and miss for usefulness.

Of course you should read a lot from here: http://www.forbes.com/

I'm a bit leery right now of recommending gold.  It's at historic highs and looks a lot like a bubble.  Silver is great as long as you're willing to see a dump like it took yesterday every now and again, or be prepared to snatch it up when it does.  Iptuous could probably provide some good advice on Silver and Gold and I was hoping he'd check in today and give his thoughts.  Gold, to me, is the sort of thing you buy when you can afford it, and then just hold it.  Preferably the real stuff that you can get your hands on, but there's some decent funds out there as well.

I use this place pretty heavily for news on metals:  http://www.monex.com/

For currencies I go here: http://www.smartmoney.com

and they had a great article yesterday: http://www.smartmoney.com/invest/currencies/new-tool-for-currency-traders-mimicry-1312324538631/?link=sm_pfspend_rss

on a new tool for piggy backing on major currency skimmers' moves.  Apparently, if their numbers are right:

Quote
According to a new report by the Aite Group, a financial services consulting firm, as many as 50% of traders using websites and trading platforms that allow them to copy other investors' trades are making a profit. That's far more than the one-third of retail traders overall who make money in any given quarter, according to data from major forex dealers.

which is pretty damn astounding.

more later.
Title: Re: Financial fuckery thread
Post by: Faust on August 05, 2011, 05:41:43 pm
http://www.schiffradio.com/

Peter Schiff is one I've listened to for a few years.  

Jim Rogers and his Rogers International Commodity Index ( RICI )
http://jimrogers-investments.blogspot.com/

When Jim Rogers is suggesting something, I tend to take his advice.  I listen to him probably more than any other investor out there.

I have quite a bit invested across several Blackrock funds and find they have done a decent job managing.  Any losses I took over the last two years in a poorer performing area was easily offset by gains in others.  They're currently taking the same beating everyone else is at the moment but I've made a lot of money with them over the last few years.

http://www2.blackrock.com/global/home/InvestorRelations/index.htm

http://libertarianinvestments.blogspot.com/ is hit and miss for usefulness.

Of course you should read a lot from here: http://www.forbes.com/

I'm a bit leery right now of recommending gold.  It's at historic highs and looks a lot like a bubble.  Silver is great as long as you're willing to see a dump like it took yesterday every now and again, or be prepared to snatch it up when it does.  Iptuous could probably provide some good advice on Silver and Gold and I was hoping he'd check in today and give his thoughts.  Gold, to me, is the sort of thing you buy when you can afford it, and then just hold it.  Preferably the real stuff that you can get your hands on, but there's some decent funds out there as well.

I use this place pretty heavily for news on metals:  http://www.monex.com/

For currencies I go here: http://www.smartmoney.com

and they had a great article yesterday: http://www.smartmoney.com/invest/currencies/new-tool-for-currency-traders-mimicry-1312324538631/?link=sm_pfspend_rss

on a new tool for piggy backing on major currency skimmers' moves.  Apparently, if their numbers are right:

Quote
According to a new report by the Aite Group, a financial services consulting firm, as many as 50% of traders using websites and trading platforms that allow them to copy other investors' trades are making a profit. That's far more than the one-third of retail traders overall who make money in any given quarter, according to data from major forex dealers.

which is pretty damn astounding.

more later.

Awesome, I'll start having a snoop around these.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on August 05, 2011, 05:52:07 pm
Kieth Olbermann is pissed.

I don't know if his suggestion is a good one, I think protests may be pointless now, but I agree with his sentiment.

http://current.com/shows/countdown/videos/special-comment-the-four-great-hypocrisies-of-the-debt-deal (http://current.com/shows/countdown/videos/special-comment-the-four-great-hypocrisies-of-the-debt-deal)
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 06:08:08 pm
I can't stand the guy, personally, but it does always amuse me when lefty pundits talk about "Republicans and their corporate masters"

I guess you only have U.S. treasury bonds in your portfolio, hu Olberman?

Democrats must not buy corporate stock or hold 401k's with investments in those same companies they bitch about so much.
Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2011, 06:18:40 pm
Quote
Earlier, the EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said he thought the movements were "incomprehensible" and "not justified by the economic fundamentals", particularly in Italy and Spain, the latest focus of investors' concerns.

This is an interesting way of saying the pilot's dead and nobody else knows how to land the plane.

ETA:  Or the pilot has been tied up and put in the bathroom by some dodgy-looking bankers.

I suspect the latter.  Channel 5 news over here just had a stockbroker on, asking for more "quantative easing".

They want some cheap money to re-inflate the bubble.  Which is the same response we've had to every economic crisis since the 80s, and so, obviously, will work fantastic.

Two years ago, I mentioned the need to eat these people.

Nobody listened.   :sad:

The Greeks did attack their own finance ministry, and hacktivists do seem to be targeting banks and corporate monopolies a lot more now.

But yeah.  Ian Welsh, who I occasionally read, said it best (http://feedproxy.google.com/~r/IanWelsh/~3/OITiXNybrOA/):

Quote
I feel bad for the Anonymous hackers who were arrested today, but it’s also a good thing, in that it will radicalize the hacker community even further and force them to adapt and change their tactics.  They are the bleeding edge of real resistance, and they have moved far from their libertarian roots and become left wing in their sympathies (targeting a city for refusing to allow the homeless to be fed is as left wing as you can get.)

Since, of course, the DOJ has shown no interest in pursuing those who did DDOS attacks against Wikileaks, it is yet another confirmation that the law, as it exists now, is used as a bludgeon against people the government doesn’t like, while those who the government does like are left alone, and crimes against the government’s “enemies” aren’t investigated.  Laws which do not have at least the appearance of being evenly applied are not just, are not perceived as just, and become legitimate targets for breaking.

Meanwhile in England, the Cameron government’s massive slashes to education hit virtually all at once, making an entire cohort of young people know exactly who just did their level best to destroy their lives.  This is important, to put it bluntly, young males who don’t have enough money to settle down with a young female are extraordinarily dangerous to the state.

What is interesting about both of these things, and many others recently, such as the austerity bills and various legal rulings from the Supreme Court which don’t even pretend to follow precedent, is how the velvet glove has come off the iron fist of state and corporate repression.  The elites think that there is nothing ordinary people can do. Whatever the elites do, no matter how harsh, the hoi polloi can only submit.  And if they don’t, well, so much the worse for them.

And yet the system is cracking up. A large part of why all of this is being done is to create ever bigger corporations and ever richer western billionaires, so they can compete with the oilarchies.  But recently Russia has come to have more billionaires than the US.  It’s really hard to state how startling that is.  America’s rich have done everything they can to rig the game so they will get richer, they have a bigger base economy to work off of, and they’re still losing the Red Queen’s race.  No matter how much they repress their own population, they can’t keep up with the folks who have the real gold of the modern economy: black gold.

Unfortunately, as stupid, venal and brutal as our enemies are (and if they aren’t your enemies you’re a fool or getting a pay check, or I hope you are), our leadership is even more stupid, venal and cowardly.  This entire generation of leadership on what passes for the left is beyond contemptible.  If they are not outright sell outs of the interests of those they claim to champion, then they are willing to betray anyone but their members, and if with rare exceptions (in the US, basically, the gay leadership) they are cowards, unwilling to risk themselves in any way, unwilling to actually fight.  They cavill and moan and condemn anyone who actually fights back. Watching fools demanding that the man who threw a pie at Murdoch be condemned for violence was beyond sad, it was a farce.  Violence?  It reminded me of all the hand wringing when an Iraqi threw a shoe at George Bush, a war criminal and mass murderer.  Oh dear.

And so, while the young are being radicalized, the leaders of the left are unable to provide leadership.  They have been selected to be weak and cowardly, to be unwilling to fight, to be compromisers trying to get the best deal possible as long as that deal doesn’t upset the status quo in any real way.

This varies by country.  I have more hope, say, for Greece (after they set the finance ministry alight) than I do for the US.  But the first job of the left in most countries is not to fight the right, it is to destroy the leadership of the left.  To drive them out of power and into the wilderness and either to replace them or to create new forms of organization.  And it is to understand that class war is like war, there will be casualties.  People will be beaten, people will be killed, people will go to jail.  That is what will happen.  It can be avoided in only one way, surrender.  Suffer exactly what the oligarchs want you to suffer and you will be allowed to live and die in what passes for peace.  It will be a peace filled with suffering, hunger, deprivation, and violence not primarily from the authorities but from each other, but if that’s what you want, it’s available.  Always understanding, of course, that anyone who won’t fight will have to accept anything the oligarchs do.  Anything.  When you won’t fight, you only get even scraps if it is someone else’s interest.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 06:36:11 pm


What is interesting about both of these things, and many others recently, such as the austerity bills and various legal rulings from the Supreme Court which don’t even pretend to follow precedent, is how the velvet glove has come off the iron fist of state and corporate repression.  The elites think that there is nothing ordinary people can do. Whatever the elites do, no matter how harsh, the hoi polloi can only submit.  And if they don’t, well, so much the worse for them.


at the risk of taking a really REALLY good thread in a different direction for a bit I wanted some input from you guys on the bolded part. 

In the circles I travel I don't run into this term much.  A lot of you guys on here fall way left of me politically and you're really informed, part of the reason I like it here even though we wouldn't agree on a lot of things over a few beers and politic. 

Would one of you elaborate on this concept in the modern world?  Maybe I should narrow the scope to modern 1st world.  I'm very aware of the sort of atrocities that are carried out for diamonds, precious metals and the like in countries most of us will never visit, but I'm not sure that's what the author is talking about.

I mean there is no Shinra Corp.  This is not (yet) Ghost in the Shell or Shadowrun.

You have my ears.  Teach me and show me where I am wrong because from where I sit, it's in my and my families and friend's best interests for corporations to grow and make money as it offers me at least a chance of a comfortable old age, not having to wonder how I'm going to feed myself when I can no longer work, and I've never once felt oppressed by a corporation. 

Except maybe insurance companies of all kind.
Title: Re: Financial fuckery thread
Post by: Cuddlefish on August 05, 2011, 06:44:06 pm
I've been following this thread for a while. A genuine concern for the future of America and the world has kept me, more or less, glued to these forums and other news sources. I feel that I, despite a proper background in economics, more or less, "get" what's going on.

My default optimism, however, has changed to doubt. Before I leave optimism behind, and start stockpiling gas, food, batteries, and medical supplies, I was wondering if anyone here, that's better versed in this area, could tell me if there is a silver lining to this shit tornado. I'd like to beleive there is, but I have yet to identify one myself.
Title: Re: Financial fuckery thread
Post by: Cain on August 05, 2011, 06:52:22 pm
Pickles,

Large corporations now form an integral part of the US police state, which is directed more at internal political dissidents and hackers than at, say, detecting terrorist threats.  See, well, pretty much every entry on http://antifascist-calling.blogspot.com for good examples.

Title: Re: Financial fuckery thread
Post by: Triple Zero on August 05, 2011, 06:57:16 pm
This particular bit especially stood out to me. It keeps coming back to me to wonder about, and then I forget it again [when I think of the less ethical things LulzSec and Anon did] until it is somehow brought back to my attention ... very Spider-esque.

But yeah.  Ian Welsh, who I occasionally read, said it best (http://feedproxy.google.com/~r/IanWelsh/~3/OITiXNybrOA/):

Quote
[...]

Since, of course, the DOJ has shown no interest in pursuing those who did DDOS attacks against Wikileaks, it is yet another confirmation that the law, as it exists now, is used as a bludgeon against people the government doesn’t like, while those who the government does like are left alone, and crimes against the government’s “enemies” aren’t investigated.  Laws which do not have at least the appearance of being evenly applied are not just, are not perceived as just, and become legitimate targets for breaking.

[...]
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 07:12:15 pm
Pickles,

Large corporations now form an integral part of the US police state, which is directed more at internal political dissidents and hackers than at, say, detecting terrorist threats.  See, well, pretty much every entry on http://antifascist-calling.blogspot.com for good examples.



Got it.  Taken in the context of the article, which I clearly ignored, yeah.  Mercenary corporations being used in place of National Guard, Black Hatters going White as "consultants" for DoD and DHS (the "hey, it's a paycheck" mentality he mentions) and digging up docs on Anon's.  That list is getting larger and larger. 

I'm a bit on the fence between supporting some of Anon's recent antics, depending on the target, and thinking that their energy would be better spent actually DOING something rather than these symbolic shows that really only prove what we already know, that the global botnets are pretty fucking annoying when directed at websites.

And dumping docs on innocent consumers of say, Sony's services I will never be able to get behind.

Much more clear in that context the article mentions though. 
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 05, 2011, 08:08:15 pm
I've been following this thread for a while. A genuine concern for the future of America and the world has kept me, more or less, glued to these forums and other news sources. I feel that I, despite a proper background in economics, more or less, "get" what's going on.

My default optimism, however, has changed to doubt. Before I leave optimism behind, and start stockpiling gas, food, batteries, and medical supplies, I was wondering if anyone here, that's better versed in this area, could tell me if there is a silver lining to this shit tornado. I'd like to believe there is, but I have yet to identify one myself.

I take the long view on these things.  I was too young to actually know what was going on in the last great recession of the 70's and 80's, but I damn sure felt its after shocks growing up.  

These things (unemployment, Real Gross Domestic Product (GDPCA)) have historically cycled.  If you look at graphs going back to the 50's with a few notable exceptions, GDP in the US (my frame of reference, not sure where you are) has been in the black for most of that time period.  Employment has been much more volatile and charts show it swinging from from trough to peak in nearly exactly 10 year cycles with the occasional double dip like happened in the 80's and like what is conceivably happening now.

While it will never be a bad idea to be prepared for any eventuality and to stock up on supplies, rotate out canned food, old water and things of that nature, I can't in good faith get on board with the survivalist types that preach doom and gloom all over the internets.  And on some of the boards I frequent, that shit is EVERYWHERE.  Doesn't make them right, but planning like that can't ever be said to be a BAD thing.  I just don't see everything collapsing like that in my lifetime.  

If you've got money in the global market, keep an eye on it and consider either cashing it out and sitting on it for awhile (if that's what you think you should do) or at least consider being more conservative in where it's invested.  The time for risk is on an uptick and I don't believe we're there yet, but I do believe things will recover.  It's in all of our interests that they do, and they always have before.

--Pickle, 2 cents from a die hard optimist

[ETA]  Those same charts DO show Real GDP never rising higher than the last peak over time, something that I would say definitely should be worrysome, but then I've been saying we need a real correction for awhile now since we've never really had one so long as the Fed pumps money back in to inflate prices every time we have a recession.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 05, 2011, 08:43:05 pm
Despite his unfortunate name, Mr Welsh is right on the fucking money.

The law no longer serves freedom or the individual to any degree whatsoever.  This is unacceptable.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 06, 2011, 02:03:10 am
This probably deserves it's own thread but S&P just downgraded the US from AAA

http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/index.htm?iid=Lead

Quote
NEW YORK (CNNMoney) -- Credit rating agency Standard & Poor's on Friday downgraded the credit rating of the United States, stripping the world's largest economy of its prized AAA status.
In July, S&P placed the United States' rating on "CreditWatch with negative implications" as the debt ceiling debate devolved into partisan bickering.

To avoid a downgrade, S&P said the United States needed to not only raise the debt ceiling, but also develop a "credible" plan to tackle the nation's long-term debt.
In its report Friday, S&P ruled that the U.S. fell short: "The downgrade reflects our opinion that the ... plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
S&P also cited dysfunctional policymaking in Washington as a factor in the downgrade. "The effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges."

The safest bets are stamped AAA. That's where U.S. debt has stood for years. Moody's first assigned the United States a AAA rating in 1917.
In the days after lawmakers managed to strike a debt-ceiling deal, the two other major rating agencies have both said the deficit reduction actions taken by Congress were a step in the right direction.
On Tuesday, Moody's said the United States will keep its sterling AAA credit rating, but lowered its outlook on U.S. debt to "negative."
Even if a downgrade were to occur, the United States will likely still be able to pay its bills for years to come and remains a good credit risk.
Investors have limited options for making safe investments, and Treasuries are effectively as liquid as cash. And other big countries have been downgraded and were still able to borrow at low rates.
At the same time, some experts warn that a downgrade could gum up the banking system and ripple out onto Main Street. Treasuries are used as collateral in many transactions between financial institutions and grease the skids of lending.
Consumers and investors could feel the impact of a downgrade. Interest rates on bonds could rise, and rates on mortgages and other types of loans along with them.
Government-backed agencies like Fannie Mae and Freddie Mac may also be downgraded. It's also possible that some state and local governments could also face a downgrade.
And investment decisions would become complicated for large institutional investors that are required to hold highly-rated securities.

fuck.

this shit will echo.

[ETA] the last 2 day sell off REEKS of insider info.

Title: Re: Financial fuckery thread
Post by: Telarus on August 06, 2011, 02:24:05 am
Pickles,

Large corporations now form an integral part of the US police state, which is directed more at internal political dissidents and hackers than at, say, detecting terrorist threats.  See, well, pretty much every entry on http://antifascist-calling.blogspot.com for good examples.



I'd like to add to this that Corporations don't have the same restrictions as Gov Agencies (i.e. they can trample your privacy rights as a condition of employment, something which has been ruled Unconstitutional if a State Agency tried it).

This might not seem like a big deal, until you realize HOW MUCH of government function has been "privatized".

And dude.... Blackwater 'successfully' swapped masks and costumes to be reborn as Xe, and they're still making money.. So yeah.. It's Shadowrun, but the "Dragons" are the Oil Companies.....
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 06, 2011, 02:38:56 am
the last 2 day sell off REEKS of insider info.
It's amazing how the market always seems to correctly anticipate news such as this.  No news is ever publicly announced before it has already been completely priced into the market.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 06, 2011, 02:54:20 am
the last 2 day sell off REEKS of insider info.
It's amazing how the market always seems to correctly anticipate news such as this.  No news is ever publicly announced before it has already been completely priced into the market.

If I'm being honest, I should have gotten out of stocks the moment they passed the debt deal.  A lot of big money did Thursday morning if you look at the index charts.  It was one giant sell off right at opening bell and like penguins jumping off an ice flow, the rest followed.


though maybe lemmings is a more appropriate simile.

My knee jerk reaction is "insider info" but really if you look at the numbers it's been headed down a slope since at least Monday.
Title: Re: Financial fuckery thread
Post by: Cain on August 06, 2011, 07:52:41 am
Yeah, I have to admit, my initial reaction was the same, but as you say, the US has been bleeding since the debt deal (and the Eurozone is like a guy with lacerations hooked up to an unlimited supply of blood - that fucker is going to bleed and bleed and bleed).

On the other hand, Friday was sufficiently unusual, even by that week's standards, that insider trading cannot be entirely ruled out.
Title: CHINA IS ANGRY!
Post by: Cain on August 06, 2011, 04:08:59 pm
http://www.bbc.co.uk/news/world-us-canada-14430598

Quote
China has scolded the US over its "addiction to debt" after rating agency Standard & Poor's downgraded the US' top-notch AAA rating to AA+.

State news agency Xinhua said unless the US cut its "gigantic military expenditure and bloated welfare costs," another downgrade would be inevitable.

But other countries, such as Australia, France and Japan, said they retained their faith in US bonds.

The downgrade ended a week of growing uncertainty for the world economy.

Fears that the US might be headed for a double-dip recession and the eurozone's debt problems were set to spread to Italy and Spain saw stock market sell-offs around the world.

The downgrade is a major embarrassment for the administration of President Barack Obama and could raise the cost of US government borrowing.

This in turn could trickle down to higher interest rates for local governments and individuals.

One initial estimate says that could add an extra $75bn (£46bn) to the US annual interest rate bill at a time when its debt levels are already high.

The other two major credit rating agencies, Moody's and Fitch, said they had no immediate plans to follow S&P in taking the US off their lists of risk-free borrowers.
Title: Re: CHINA IS ANGRY!
Post by: Adios on August 06, 2011, 04:13:05 pm
http://www.bbc.co.uk/news/world-us-canada-14430598

Quote
China has scolded the US over its "addiction to debt" after rating agency Standard & Poor's downgraded the US' top-notch AAA rating to AA+.

State news agency Xinhua said unless the US cut its "gigantic military expenditure and bloated welfare costs," another downgrade would be inevitable.

But other countries, such as Australia, France and Japan, said they retained their faith in US bonds.

The downgrade ended a week of growing uncertainty for the world economy.

Fears that the US might be headed for a double-dip recession and the eurozone's debt problems were set to spread to Italy and Spain saw stock market sell-offs around the world.

The downgrade is a major embarrassment for the administration of President Barack Obama and could raise the cost of US government borrowing.

This in turn could trickle down to higher interest rates for local governments and individuals.

One initial estimate says that could add an extra $75bn (£46bn) to the US annual interest rate bill at a time when its debt levels are already high.

The other two major credit rating agencies, Moody's and Fitch, said they had no immediate plans to follow S&P in taking the US off their lists of risk-free borrowers.

It reminds me of a tent revival meeting where a guy in a white suit is expected to come on stage in the middle of a big musical production and make everything okay.

PROTIP; the hero is dead and has been for decades, he was shot in the back by snake oil salesmen. And we bought it.

This problem has been building for decades. It very well may take decades to fix completely. In order to do that however, all players involved are going to have to forget about the R or the D that comes with their title. may I suggest we replace them with an A? For American, a forgotten breed that used to be upstanding, courageous, bold and involved.

There is hard work ahead, work, not political screeching. Real work and tough choices. Personally, I don't see how we can avoid affecting every single American to one degree or another. We have allowed ourselves to end up in a pretty deep ditch with no visible way out, except by working together and cutting a set of steps in the bank.

As a nation we need to curtail the billions or trillions we spend in other countries who decide to do what we want in exchange for our cash. We are out of cash. We need to stop exporting war, yesterday. Things like the Arts, PBS, etc should have to rely on private donations, not the government.

There are hundreds of things that can be done without negatively impacting us here, and those things should be on the table first. Then we move to the second layer, then the third...

Things need to be done in a business like manner, leaving emotions and pet projects outside the room.

Junkets, Air Force 1, private government helicopters, all of these things only help to isolate the decision makers from the reality that those of us trying to get by must face on a daily basis. I want the decision makers to be out here with us, serving instead of ruling. They are not our overlords, they work for us, the American people. As such we are their bosses, not their servants.

Hell, we have a program that is so big that we don't even know how much it costs us, the HLS, the TPA and domestic spying. A hot sharp knife to its scrotum may pay some huge dividends. Why is it a sacred cow?

Point is, there are things that can and should be done first, and they should be done soon, before the end of the year.

American is crumbling folks, and not just our national infrastructure, but perhaps more importantly, our national sense of who we are.
Title: Re: Financial fuckery thread
Post by: Cain on August 07, 2011, 01:34:12 pm
http://www.bbc.co.uk/news/world-europe-14434831

Quote
The European Central Bank is due to hold emergency talks on whether to start buying Italian debt to contain spreading turmoil on financial markets.

The BBC's Business Editor Robert Peston says the ECB is split on the move.

Growing worries over debt in the eurozone and the US caused sharp falls on world stock markets last week.

Finance ministers from the G7 major economic powers are also to hold emergency talks on how to calm the markets before they reopen on Monday.

The governing council of the ECB, which includes the central bank governors of all 17 eurozone countries, will hold a telephone conference on Sunday afternoon, the BBC has learned.

According to an ECB source cited by Reuters news agency, the bank's president Jean-Claude Trichet wants a final decision on whether to buy Italian debt to be made at the meeting.

Middle East markets, which are open for trading on Sunday, lost ground, with Israel's main exchange dropping by more than 6%.

There are fears that unless leaders can announce a decisive plan of action before Asian and European markets open on Monday, global shares could plunge even further.

I think fears of a Spanish default are overstated, but Italy is most certainly fucked.
Title: Re: Financial fuckery thread
Post by: PopeTom on August 07, 2011, 02:47:31 pm
the last 2 day sell off REEKS of insider info.
It's amazing how the market always seems to correctly anticipate news such as this.  No news is ever publicly announced before it has already been completely priced into the market.

S&P has been flapping their noise hole since at least mid-July that they were likely to downgrade the USA's credit rating if there were not at least $4t in cuts in any debt deal.  So I think this is more a case of really obvious foreshadowing rather than insider trading.

I myself rearranged my meager portfolio in anticipation of a default/downgrade back on the 27th.
Title: Re: Financial fuckery thread
Post by: PopeTom on August 07, 2011, 02:55:48 pm

though maybe lemmings is a more appropriate simile.


It wasn't suicide, the lemmings were pushed!!!
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 02:05:00 am
Asian stock markets are going berserk, and the dollar is doing the lead balloon thing.

Interesting 2 weeks coming up, I think.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 02:07:56 am
(http://www.zewp.com/dump/photo/madmax.jpg)
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 08, 2011, 02:28:55 am
Israel's market, which was open today, took a shit.

Monday morning is looking pretty bad atm.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 08, 2011, 02:35:36 am
New Zealand's market lost 3% in the first 20 minutes this morning.

Australia was right behind them.

So much for getting a good nights sleep tonight. 
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 03:35:27 am
Might get downgraded some more:

http://www.msnbc.msn.com/id/44050983/ns/business-stocks_and_economy/
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 11:25:51 am
Israel's market, which was open today, took a shit.

Monday morning is looking pretty bad atm.

Wasn't the Israeli market due to Arab economies?  I know inflation there is pretty bad right now, they had a protest on the weekend, but I heard the drop had something to do with regional issues.  If you know more, I'd be interested.
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 11:58:40 am
Also, the more I look, the more I'm convinced the USA (and the UK, for that matter) deserve to be downgraded.

The process is hopelessly politicized, though.  Russia, for example, just finished paying off its Soviet-era debt, and has fantastic economic growth (4% since 2008), and is rated at Baa1, because of "commodity prices".  As if commodity prices aren't out of control in western Europe, America or Australia.  That rating is one point above Turkey.  China is in a similar boat.  But both pay off their debts promptly, and have growing economies, startling growth when compared with western democracies.

Sure, being downgraded hardly helps when most of us live in those two countries.  But really, credit rating is a highly ideological concept, linked strongly to the neo-liberal consensus, which both Russia and China partly buck.
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 12:12:52 pm
http://www.bbc.co.uk/news/business-14441453

Markets do not approve of the ECB's moves, but it is reducing the yield on Spanish and Italian bonds.  Which was the point.  Gold is still rising in cost, and oil is dropping.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 08, 2011, 12:49:55 pm
Israel's market, which was open today, took a shit.

Monday morning is looking pretty bad atm.

Wasn't the Israeli market due to Arab economies?  I know inflation there is pretty bad right now, they had a protest on the weekend, but I heard the drop had something to do with regional issues.  If you know more, I'd be interested.

News reports on "reasons" for stock market ups and downs always amused me because really, who the hell knows the real reasons any crowd panics?  Often it's a combination of things that provide fuel for a fire.  You have indicators, trends, not often one concrete and tangible "thing" you can point to and say "that was what caused the gains/losses"

That being said, I saw that Israel had protests this week and while they can't be ruled out as contributing to a sense of unease in investors, I believe there was probably quite a  bit of "getting the hell out early" involved in Sunday trading.  They even delayed opening for 45 minutes in a vain attempt to calm opening bell jitters.  Didn't work.

I'm finding it hard myself to not say fuck it and move everything into bonds and cash.  I've still got a few hours to consider it.
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 01:09:14 pm
Nassim Nicholas Taleb suggests 85% government bonds and 15% high-risk, high return investments, as I recall.  That always struck me as a fairly sensible method of financial min-maxing.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 08, 2011, 01:22:20 pm
He's definitely a guy to listen to.  That's just about what I've done this morning.  Black Swan protect my principal from what I'm now predicting to be an inevitably turbulent Monday.

Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 02:14:07 pm
http://www.nakedcapitalism.com/2011/08/marshall-auerback-a-beers-hall-putsch-from-the-rentiers.html

Quote
So the ratings agencies have reared their ugly heads again. David Beers, head of S&P’s government debt rating unit, announced Friday night that S&P has downgraded the U.S. credit rating for the first time, from AAA to AA+. It’s a sham: S&P’s whole analytical framework reflects ignorance about modern money. If the US government, Treasury, and the Federal Reserve, capitulate to this outrageous act of economic extortion, it will effectively be sanctioning a beer hall putsch by the rentier class.

Justifying its decision, Standard and Poor said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.

“It’s always possible the rating will come back, but we don’t think it’s coming back anytime soon,” said Beers.

Of course, the response from Treasury was equally inane: “A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesman said last Friday.

$2 trillion, $4 trillion, who cares if the S&P is math-challenged? It’s irrelevant! The notion that the US can arbitrarily summon up the ability to register $4 trillion in “savings” demanded by Standard & Poor as the price for upholding America’s AAA rating is nonsensical, as it ignores the impact that the withdrawal of income will have on the overall economy and, by extension, the size of the government deficits that the ratings agencies regularly decry. Credit ratings are based on ability to pay and willingness to pay. A sovereign issuer of its currency, which issues debt in said currency – like the US – always has the ability to make US dollar payments. Whether it chooses to do so is another matter. But that’s a matter of politics, not economics.

The Obama Administration would have been on much stronger ground if they challenged the constitutionality of the debt ceiling because, if successful, it would have eliminated this threat to the US AAA credit rating once and for all in terms of precluding an UNWILLINGNESS to pay. You wouldn’t have a bunch of extremists threatening a default on funds which were already appropriated and spent. The ballot box, not the debt ceiling is the way to solve this kind of dispute.

There is, therefore, an opening for Moody’s to gain a competitive advantage over S&P. Moody’s can announce that whereas any issuer of its own currency can always make nominal payment on a timely basis, ability to pay is absolute and beyond question for the US government.
Therefore, when reviewing the US government’s credit rating, only willingness to pay is a consideration. And given the recent Congressional proceedings regarding the debt ceiling, an entirely self imposed constraint.

Moody’s could therefore put the US on notice with regard to willingness to pay and ignore the flawed economic reasoning which characterized the rest of S&P’s rationale for the downgrade.

To be fair to Mr. Beers, his agency did specifically cite the political brinkmanship of a number of US Congressmen, who seemed far too inclined to contemplate the option of default as a means of securing greater spending cuts on the part of the US government. But that wasn’t the full story. S&P placed particular emphasis on the size of the cuts, implicitly suggesting that larger cuts would have superseded the political questions. That’s intellectual dishonesty at its worst.

Not that it matters here, but for the record, the S&P (along with Moody’s and Fitch) covered themselves with glory during the housing bubble, rating toxic subprime junk as AAA rated paper. Not only were the agencies politically corrupted by virtue of their incestuous ties to Wall Street, but criminally incompetent as well. Yves Smith gives a perfect illustration of the latter:

Quote
The biggest proof of criminal incompetence was their downgrades of RMBS versus CDOs made pretty much entirely of the same RMBS. They started downgrading RMBS en masse in July 2007. They didn’t start marking down CDOs until six month later, and the process took another six months. Yet it should have been impossible to downgrade the RMBS and not the CDOs at the same time. The downgrades were based on the failures of the underlying loans. You can’t have it show up in one product and not the other.

And S&P continues to screw up MBS ratings in the wake of heightened scrutiny.

Here are a few questions the S&P ought to have considered before it issued its debt downgrade:

Is government spending so high that it is competing with private sector spending plans? Certainly not – substantial amounts of plant and equipment remain idle, unemployment remains at depression like levels, and there is ample capacity for firms to expand if they want to do so.

Businesses, however, are constrained by inadequate demand for their output, a phenomenon which would become even worse if the US were to follow the prescribed level of cuts advocated by S&P to retain its AAA rating with these economic blackmailers. That is a real cost (and it also drives those “horrible” government deficits higher, as tax revenues plunge and social welfare expenditures via the automatic stabilizers rise).

Is government issuing so much debt that it is causing interest rates to skyrocket? Not in the slightest. Rates have actually gone NEGATIVE in term yields under 12 months over the past few weeks (so much for the notion that the end of QE2 would drive rates sky-high). We have a deflation problem, not inflation. And the political dysfunction that Mr. Beers describes could have easily been avoided through a number of options which would not have left the country in the hands of irrational deficit terrorists. As Joe Firestone notes:

Quote
Treasury can cease issuing long-term bonds, and sell only three-month bonds. Three-month bond interest rates are generally controlled by overnight rates for bank reserves, and overnight rates can be driven down to near zero by flooding the banks with excess reserves. That’s basically how the Japanese keep their bond interest rates near zero, and that’s how we can do the same.

Firestone is right: A sovereign government like the US only sells securities in order to drain excess reserves to hit its interest rate target. It could always choose to simply leave excess reserves in the banking system, in which case the overnight rate would fall toward whatever rate the central bank offers to pay commercial banks for excess overnight reserves.

As far as the short term impact goes, yes, US bonds are down in response to the news of the downgrade. How long lasting is this likely to be? For historical comparison, consider the case of Japan (thanks to Bill Mitchell): In November 1998, the day after the Japanese Government announced a large-scale fiscal stimulus to its ailing economy, Moody’s Investors Service began the first of a series of downgradings of the Japanese Government’s yen-denominated bonds, by taking the Aaa (triple A) rating away. The next major Moody’s downgrade occurred on September 8, 2000.

Then, in December 2001, Moody’s further downgraded the Japan Governments yen-denominated bond rating to Aa3 from Aa2. On May 31, 2002, Moody’s Investors Service cut Japan’s long-term credit rating by a further two grades to A2, or below that given to Botswana, Chile and Hungary. This at a time when the Japanese economy was then almost 1,000 times the size of Botswana’s, had the world’s largest foreign reserves, $446 billion; the world’s largest domestic savings, $11.4 trillion; and about $1 trillion in overseas investments.

In a statement at the time, Moody’s said that its decision “reflects the conclusion that the Japanese government’s current and anticipated economic policies will be insufficient to prevent continued deterioration in Japan’s domestic debt position … Japan’s general government indebtedness, however measured, will approach levels unprecedented in the postwar era in the developed world, and as such Japan will be entering ‘uncharted territory’.”

“Uncharted territory” – well, the last time anybody looked, the Japanese government was still comfortably issuing 10 year government debt at around 1%. That Japan’s debt is largely domestically held is irrelevant: the denomination of the debt, NOT the debt holder is the key consideration.

There are only two sectors to issue bonds to, the domestic private and international. US and Japan are on opposite ends of the spectrum, with the US issuing a lot to the latter (though still more domestically in fact), and Japan issuing a lot to the former. The interesting thing is that this hasn’t mattered at all in the determination of rates–the key difference affecting relative interest rates between the US/Japan and, say, the periphery countries of the euro zone, has been the nature of the monetary system–the US/Japan are currency issuers under flexible foreign exchange, whilst the member states of the European Monetary Union are not. As Professor Scott Fullwiler indicated to me in a recent email exchange, “For the former, rates follow monetary policy; for the latter, rates follow markets’ perceptions of default risk. This is why for the former credit rating downgrades are complete monetary non-events, like QE. Note further that if the int’l sector were to stop buying US debt, this just means that the US trade balance improves and the breakdown of governmnet debt sales starts to look more like Japan’s.”

To argue otherwise is to ignore the actual causation of the transaction, which is that China exports something to the US in exchange for dollars, and then that money goes into their checking account at the Federal Reserve. It’s called a reserve account because it’s the Federal Reserve, and they give it a fancy name. But in reality it is a checking account, just like you or I use. Now China has 3 choices with what they can do with the money in their checking account. They could spend it and buy real assets in the US, which would be great for our economy, or they can put it into another currency (say, euros), in which case the dollar declines, which enhances our export position, or they can put it in another account at the Federal Reserve called a Treasury security, which is nothing more than a savings account. In other words, the bond purchase, if it occurs, comes at the end of the transaction and actually ‘funds’ nothing.

Economist Warren Mosler has noted on numerous occasions that China and others buy US Treasury securities primarily to support the dollar versus their own currencies, and thereby drive exports to the US, and not because they are looking for safe investments per se. That is, it’s a consequence of their drive for ‘competitiveness’ and their desire to net save in US dollars. It takes two to tango. And with no Treasury securities China would be forced to buy state debt, corporate debt, euro debt (say, Greek bonds?), equities, etc. which is highly problematic for them for a variety of reasons.

A final question for Mr. Beers: Is government spending so high that the dollar is crashing in international exchange markets? No. Certainly the dollar has its ups and downs — we’ve got a floating exchange rate and it is supposed to go up and down. So let’s assume that our dollar falls because China no longer wishes to net save in greenbacks. In fact, this has been occurring over the past several months and the bond market has gone up during this period. If this were to go on long enough, the ultimate impact would be that our external balances improve significantly (as does the likely desire of foreigners to accumulate cheap US assets via FDI), because our exports increase, which means the current account deficit goes down and less bonds are available for China to ‘fund’ us”.

Now that’s not the way I would go as a growth strategy, as it entails a “race to the bottom” as far as wages go. Moreover, if budget deficits are not allowed to grow large enough to enable private domestic agents reduce their overall debt levels, then the economy will remain mired in its stagnant state. With austerity being pursued everywhere it is a fool’s hope to think that net exports are going to swing enough to save the day. But from a straight sectoral balances point of view, IF we did export more, these increased exports would mitigate the ability of countries like Japan or China to net save in our currency. By definition, this would also correspondingly reduce their holdings in US Treasuries.

Floating rates float. This is not synonymous with economic and financial degeneracy, as our economic moralists, or the gold bugs seem to imply. Over the past 10 years, the Australian dollar has fluctuated between 50 cents to $1.08 against the greenback. The last time I looked Australia was still surviving and thriving. One can also consider the more extreme case of Russia in 1998, during which its entire financial system imploded and the ruble lost two thirds of its external value against the dollar. Yet the currency itself did not “evaporate” and the ruble remains Russia’s currency unit of account today.

And for those who argue that “markets rule”, it’s interesting to see the initial response: money flooding into the yen, despite the fact that Japan has a credit rating lower than the US (remember, neither Moody’s, nor Fitch, followed the S&P downgrade) , in a country which has a public debt to GDP ratio twice that of the US (not that we think that’s a horrible thing per se). As for the Swiss franc, the other beneficiary of this move, it is worth recalling that but for the Fed opening up dollar swap facilities with the SNB in 2009, the Swiss franc wouldn’t be worth the value of a piece of toilet paper that you scrape off your shoe in Grand Central Station.

It is questionable how much of the furor surrounding the downgrade is ideological and how much is really a misunderstanding (an “innocent fraud” in the words of John Kenneth Galbraith).

Governments around the world have been led to believe that they need to issue bonds and collect taxes to finance government spending, and that good policies should be judged by their ability to enforce fiscal austerity. Mainstream economists and ratings agencies such as S&P have guided policymakers into imposing artificial constraints on fiscal policy and government finances, such as issuing bonds when running deficits, debt ceilings, forbidding the central bank to directly buy treasury debt, allowing the markets to set interest rates on government bonds, etc. While last Friday’s downgrade per se probably won’t do much, if anything, to interest rates, growth, and employment, ratings agencies like the S&P reinforce the current deflationary state of affairs because their perverse rating actions simply reinforce efforts for further substantial deficit reduction and a balanced budget amendment. Ironically, if the siren songs of “sound finance” are followed, we will get exactly the outcome now predicted by the likes of Michelle Bachmann: the US WILL become like Greece.

I keep forgetting one of my own rules: there is no crisis.  If I think there is a crisis, it is because I do not sufficiently understand the situation.  If you don't know who the sucker is in a game of poker, it is you.

If the White House had wanted to, they could've applied lots of political pressure to avoid a downgrade.  S&P are certainly guilty of fraud during the subprime mortgage crisis, as they inflated the worth of certain countries' credit ratings, when they did not warrant such a rating.  A competent president who wanted to prevent a downgrade could've destroyed S&P by launching an investigation and using RICO statutes to seize their assets.  Obama is not incompetent.  Furthermore, US gold reserves and owned land are ridiculously undervalued, and there is still much scope for taxation, if the political will could be found.

This could have been prevented.  It was not because the President, Senate and their financial backers benefit from it.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 08, 2011, 02:39:58 pm
200 points down in the first few minutes.

http://money.cnn.com/data/markets/
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 02:40:53 pm
Damn.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 02:46:32 pm
200 points down in the first few minutes.

http://money.cnn.com/data/markets/


Let's see what it looks like at the end of the day.
Title: Re: Financial fuckery thread
Post by: Cramulus on August 08, 2011, 02:54:22 pm
it hasn't been that low since .... noon on Friday!  :lol:

(http://the305.com/blog/wp-content/uploads/2010/01/luda.jpg)

:ronpaul:  :ronpaul:  :ronpaul:  :ronpaul:  :ronpaul:

anybody want to take bets on where it'll be by the end of the day?
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 03:04:46 pm
Can't say for the day...but by the end of the week they may need longer charts.
Title: Re: Financial fuckery thread
Post by: Jenne on August 08, 2011, 04:42:03 pm
When I first heard about the downgrade, I knew it was a political wristslap and said as much to the folks sitting at my lunch table in NJ.  However, as to the longevity of this downgrade...at first I thought it'd be shortlived.  Now I'm not so sure.  I'm also not sure how the political backblow is going to go if S&P et al are NAMING NAMES of the "incaclitrant" perps.

It's interesting to watch, though.  And maddening if you allow yourself to get caught up in it.  I'm trying my damnedest not to.  I have a spouse ready to jump ship, and it's all I can do to hold him back from seeking to become a Canuck.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 04:43:26 pm
When I first heard about the downgrade, I knew it was a political wristslap and said as much to the folks sitting at my lunch table in NJ.  However, as to the longevity of this downgrade...at first I thought it'd be shortlived.  Now I'm not so sure.  I'm also not sure how the political backblow is going to go if S&P et al are NAMING NAMES of the "incaclitrant" perps.

It's interesting to watch, though.  And maddening if you allow yourself to get caught up in it.  I'm trying my damnedest not to.  I have a spouse ready to jump ship, and it's all I can do to hold him back from seeking to become a Canuck.

Why would you hold him back?  Get the fuck out while you can.

I mean, Canada's going down the same road, but they haven't reached the point of no return, yet.
Title: Re: Financial fuckery thread
Post by: Jenne on August 08, 2011, 05:05:37 pm
When I first heard about the downgrade, I knew it was a political wristslap and said as much to the folks sitting at my lunch table in NJ.  However, as to the longevity of this downgrade...at first I thought it'd be shortlived.  Now I'm not so sure.  I'm also not sure how the political backblow is going to go if S&P et al are NAMING NAMES of the "incaclitrant" perps.

It's interesting to watch, though.  And maddening if you allow yourself to get caught up in it.  I'm trying my damnedest not to.  I have a spouse ready to jump ship, and it's all I can do to hold him back from seeking to become a Canuck.

Why would you hold him back?  Get the fuck out while you can.

I mean, Canada's going down the same road, but they haven't reached the point of no return, yet.

I told him that.  Besides, he's more worried about his brown hide and his kids' future than his own finances (he's a doctor, for chrissakes).

But I don't want to be a Canadian, not really.  I don't want to leave.  But I don't want to watch it all go to fuck and back, either. 

I called his bluff and said I'd go.

And told him the only "thriving" Western economy these days seems to be Australia.  Which seems to have come about from an odd combo of luck and savvy.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 05:08:47 pm
But I don't want to be a Canadian, not really. 

Their beer isn't that bad, Jenne.
Title: Re: Financial fuckery thread
Post by: Jenne on August 08, 2011, 05:14:05 pm
But I don't want to be a Canadian, not really.

Their beer isn't that bad, Jenne.

YOU know me WAY too well, m'dear.  :lulz:

It's not that.  I think I'm scared to be an immigrant.  I'm weak. :)
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 05:15:21 pm
But I don't want to be a Canadian, not really.

Their beer isn't that bad, Jenne.

YOU know me WAY too well, m'dear.  :lulz:

It's not that.  I think I'm scared to be an immigrant.  I'm weak. :)

Um, this is CANADA.  It's like immigrating to a nation full of rather pleasant knitting circle ladies.
Title: Re: Financial fuckery thread
Post by: Jenne on August 08, 2011, 05:20:53 pm
But I don't want to be a Canadian, not really.

Their beer isn't that bad, Jenne.

YOU know me WAY too well, m'dear.  :lulz:

It's not that.  I think I'm scared to be an immigrant.  I'm weak. :)

Um, this is CANADA.  It's like immigrating to a nation full of rather pleasant knitting circle ladies.

I KNOW. 

...didn't claim it was a RATIONAL fear.  And it's not "Canada" per se.  It's anyfuckingwhere.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 05:23:30 pm
But I don't want to be a Canadian, not really.

Their beer isn't that bad, Jenne.

YOU know me WAY too well, m'dear.  :lulz:

It's not that.  I think I'm scared to be an immigrant.  I'm weak. :)

Um, this is CANADA.  It's like immigrating to a nation full of rather pleasant knitting circle ladies.

I KNOW. 

...didn't claim it was a RATIONAL fear.  And it's not "Canada" per se.  It's anyfuckingwhere.

Yeah, I'm guessing that sentiment was pretty rife among a certain demographic in Munich in 1930.
Title: Re: Financial fuckery thread
Post by: Jenne on August 08, 2011, 05:24:33 pm
:x  Quit handing out the JOYNUGGETS today.  :x

(just kidding, it's good medicine...)
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 05:25:41 pm
:x  Quit handing out the JOYNUGGETS today.  :x

(just kidding, it's good medicine...)

I'm just full of those things today, and I want to share them.

Oddly enough, the teabaggers on CG didn't want any.   :?
Title: Re: Financial fuckery thread
Post by: Jenne on August 08, 2011, 05:28:46 pm
:x  Quit handing out the JOYNUGGETS today.  :x

(just kidding, it's good medicine...)

I'm just full of those things today, and I want to share them.

Oddly enough, the teabaggers on CG didn't want any.   :?

Ungrateful fuckbunnies.

I'd just keep handing them out.  They'll appreciate them when they least expect to.
Title: Re: Financial fuckery thread
Post by: PopeTom on August 08, 2011, 07:15:16 pm
The part that pisses me off.

If I made $250,000 a year I could:

Almost double my state income tax contribution to 10% of gross income
Then increase by federal income tax contribution to 50% of gross income

and still take home more than DOUBLE what I make now before taxes.

America's problems aren't gay marriage and abortions.  It's the sin of greed.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 07:19:26 pm
From The Because We Said So Department:

Quote
Speaking on the downgrade issue at the White House Monday, President Barack Obama said the U.S. will always be a AAA-rated country despite what rating agencies say, and he urged lawmakers to work together to tackle the nation’s deficit.

http://www.msnbc.msn.com/id/44059948/ns/business-stocks_and_economy/

Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 07:21:13 pm
He's right.  So long as one major European country remains AAA, the USA can act as a AAA credit nation through the IMF, where it has effectively unlimited withdrawal.
Title: Re: Financial fuckery thread
Post by: Telarus on August 08, 2011, 07:22:41 pm
 :horrormirth: So this is theatre... I wonder who the target audience is...?
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 07:27:11 pm
If the cost of borrowing goes up without the real risk of default, who wins?  Those who lend the money...
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 08, 2011, 07:30:24 pm
Dow Hovering around 11,000, with a 500pt drop since opening this morning.  Without a significant rally in the next two hours before closing, it will mark over 1,000 pt loss from last Monday to today and last time closing below 11,000 since November of last year.

Would be a good time to buy stronger companies that are well capitalized but seeing downward price pressure from the broader sell off.

2 hours to go.
Title: Re: Financial fuckery thread
Post by: Cramulus on August 08, 2011, 10:05:43 pm
I'm in a debate with somebody about the financial brou-haha

he is attributing the financial crisis to "stupidity and laziness"... that the people who got taken for a ride by predatory subprime lending created the crisis. He's essentially saying that we're watching natural selection in progress.

Can somebody hit me with a bullet point about why the poor aren't to blame? I know there's a million good reasons I'm just having trouble organizing
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 08, 2011, 10:50:26 pm
Well, the billions of dollars in failed mortgages didn't cause the problem.  It was the trillions of dollars in CDO's that went kablooie that did it.  So it was the insurance companies that got taken for a ride by predatory investment banks that caused the real damage.  We would be watching natural selection in progress, but for the bailouts.
Title: Re: Financial fuckery thread
Post by: Cain on August 08, 2011, 10:55:27 pm
Yup.  Furthermore, bankers have a moral obligation not to lend money to someone who cannot be reasonably expected to pay it back.
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 08, 2011, 11:03:22 pm
 :lulz:

Obama totally caved and gave the Republicans everything they wanted last week, so now the resulting market crash and S&P downgrade happened because Obama "failed to show leadership". That's true, but it's hilarious to hear Republicans say it.

http://www.washingtonpost.com/politics/romney-goes-after-obama-in-wake-of-credit-rating-downgrade/2011/08/08/gIQAMerW2I_story.html

Quote
Mitt Romney says the nation’s credit problem arose because President Barack Obama has failed to show leadership on the economy.

Things wouldn't be so bad now if Obama had shown some backbone
   and stood up to us instead of giving in to all our kooky demands.
                                              /
(http://2.bp.blogspot.com/_35igJnloijA/RxtEFAWEb1I/AAAAAAAABcA/ZpGgiTSSmVs/s400/Romney+angry+a.JPG)
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on August 08, 2011, 11:22:22 pm
Yup.  Furthermore, bankers have a moral obligation not to lend money to someone who cannot be reasonably expected to pay it back.

Shouldn't that be refined to say that bankers have a fiscal responsibility not to lend money to risky borrowers that only turns into a moral responsibility in the context of a government that will backstop their shitty investments?

I mean if they were made to sleep in the beds they made, then i would have no problem with them making the decisions they did, other than an obligatory facepalm...
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 11:53:12 pm
http://www.washingtontimes.com/news/2011/aug/8/michael-moore-obama-show-some-guts-arrest-sp-head/print/

HAW HAW!

THIS IS THE BEST DECADE EVER!
Title: Re: Financial fuckery thread
Post by: Adios on August 08, 2011, 11:56:04 pm
 :lulz:
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 08, 2011, 11:59:09 pm
:lulz:

I think someone needs to remind fat boy that this isn't the 1930s.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on August 09, 2011, 12:00:20 am
oh, that's gooood....
 :lol:
Title: Re: Financial fuckery thread
Post by: Adios on August 09, 2011, 12:02:08 am
:lulz:

I think someone needs to remind fat boy that this isn't the 1930s.

Oh, hell no, I want moar!
Title: Re: Financial fuckery thread
Post by: Doktor Howl on August 09, 2011, 03:31:25 am
The Asian markets are in complete free fall, worse than 911.

Korea has actually closed trading.

Hooooboy.
Title: Re: Financial fuckery thread
Post by: Cain on August 09, 2011, 11:41:51 am
Shit, South Korea's a relative heavyweight, as well.  London aint gonna help matters any, either.  Dow Jones is down 5.50% and the Nasdaq is down 6.90%.

Bank of America needs to be put on death-watch, it's down 20%.  Spanish and Italian bonds are improving, though.
Title: Re: Financial fuckery thread
Post by: Faust on August 09, 2011, 12:30:55 pm
The petrochemical I was going to invest in yesterday but forgot is up 30% :( missed the boat.

Title: Re: Financial fuckery thread
Post by: Triple Zero on August 09, 2011, 01:21:12 pm
I warned a friend a week ago, right on august 2nd, he's got some kind of savings he can manage by basically choosing higher or lower risk investments (the higher give more potential interest, but it doesn't deal with actual stocks afaik), that right now would probably be a good time to switch it down as far to low-risk as it goes. But he was busy with work etc (hey, it's only your savings), so I think he missed the boat as well and took or will take a hit.
Title: Re: Financial fuckery thread
Post by: Cain on August 09, 2011, 01:23:12 pm
The petrochemical I was going to invest in yesterday but forgot is up 30% :( missed the boat.



I think petrochems are going to be bouncing around a bit.  As the risk of recession grows, they'll drop in price again, so you may not have to wait long.
Title: Re: Financial fuckery thread
Post by: Faust on August 09, 2011, 01:24:55 pm
The petrochemical I was going to invest in yesterday but forgot is up 30% :( missed the boat.



I think petrochems are going to be bouncing around a bit.  As the risk of recession grows, they'll drop in price again, so you may not have to wait long.

And then when we stumble into the next crisis in six months time it will shoot up again and I can sell it off.
Title: Re: Financial fuckery thread
Post by: Cain on August 09, 2011, 01:32:20 pm
Well, depending on exactly what it is, most oil companies and related do better when the economy looks to be growing.  Oil prices take a hit when the economy looks to be shrinking because, of course, there is less demand for them when less people are going to work, factories are producing less etc etc.

Which is why today's jump in price is kinda surprising.  It could be some new development is underway in Central Asia or China or something and I haven't been looking (very possible, in fact, since I haven't looked at all).

Just looking now, these may in part explain it

http://www.msnbc.msn.com/id/41922527/ns/world_news-africa/
http://www.ft.com/cms/s/0/17bdbda0-c188-11e0-acb3-00144feabdc0.html
http://www.dailystar.com.lb/News/Middle-East/2011/Aug-08/Kuwait-to-build-port-despite-threat.ashx
http://www.monstersandcritics.com/news/business/news/article_1655616.php/Norway-s-Statoil-announces-promising-oil-find-in-North-Sea
http://www.bloomberg.com/news/2011-08-05/u-s-debt-deal-kills-off-prospects-of-renewable-power-support.html
http://www.greenprophet.com/2011/08/glasspoint-solar-wins-huge-middle-east-oil-field-contract/
Title: Re: Financial fuckery thread
Post by: Cramulus on August 10, 2011, 04:56:08 pm
http://www.youtube.com/watch?v=2Z1XOBDbIy0&feature=share

This video got my attention because it was posted to FB by both my extremely liberal and extremely conservative friends. Ratigan starts to have a conversation about the economy, then his head explodes and he spends the next 6 minutes shouting at the camera about how neither the left nor right wing solutions actually address the real financial problem. He says the real problem is money in politics - politicians who can be effectively fired by defunding them. Everybody at the table seems to agree.

it's a prety good Howard Beale impression

(http://upload.wikimedia.org/wikipedia/en/a/a9/Network12.jpg)

Title: Re: Financial fuckery thread
Post by: Cain on August 10, 2011, 05:02:13 pm
The markets seem to be improving...but I haven't paid much attention, to be honest.
Title: Re: Financial fuckery thread
Post by: Faust on August 10, 2011, 05:06:13 pm
The markets seem to be improving...but I haven't paid much attention, to be honest.
Sudden huge drop again in the last hour.
Title: Re: Financial fuckery thread
Post by: Cain on August 10, 2011, 05:15:49 pm
Well, that recovery certainly lasted  :lol:
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 10, 2011, 05:27:28 pm
I've been watching it less closely since I decided to bounce nearly everything into the bond market.  Yields are shit, but since the Fed is going to sit on their hands on rates, it's the safest thing I could do.  I left 10% that I'm ok with gambling in an aggressive spread of funds, and if prices continue to come down I will probably shift that up to buy some cheap stock in good companies that likely aren't going anywhere.

Dow is hovering around 10,800.  It would take one more good sell off to see it hit 10,500 again. 
Title: Re: Financial fuckery thread
Post by: PopeTom on August 10, 2011, 06:01:32 pm
I've take this opportunity to short my first stock (Bank of America).

While I seem to be making money on that decision having actually done it I see the downside.  My profit has a maximum limit (ie company goes out of business and buying to cover costs $0) but limitless potential for loss.

Unfortunately I'm not allowed to do options trading yet beyond selling options for stocks I already own.
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 10, 2011, 07:02:56 pm
I've take this opportunity to short my first stock (Bank of America).

While I seem to be making money on that decision having actually done it I see the downside.  My profit has a maximum limit (ie company goes out of business and buying to cover costs $0) but limitless potential for loss.

Unfortunately I'm not allowed to do options trading yet beyond selling options for stocks I already own.
That sucks.  Weird that they will let you do something as risky as shortselling but won't let you buy a put.  If you could buy a cheap way-out-of-the-money call, then you could at least limit your potential loss if BAC turns around and goes to the moon.

Title: Re: Financial fuckery thread
Post by: PopeTom on August 10, 2011, 08:10:14 pm
I've take this opportunity to short my first stock (Bank of America).

While I seem to be making money on that decision having actually done it I see the downside.  My profit has a maximum limit (ie company goes out of business and buying to cover costs $0) but limitless potential for loss.

Unfortunately I'm not allowed to do options trading yet beyond selling options for stocks I already own.
That sucks.  Weird that they will let you do something as risky as shortselling but won't let you buy a put.  If you could buy a cheap way-out-of-the-money call, then you could at least limit your potential loss if BAC turns around and goes to the moon.



I use E*Trade and they have four levels of options trading.  I'm at level 1.

I had to apply to be able to do any at all (I also had to apply to short sell).  But that was my initial idea.  Short the stock then purchase a call option to cover myself in the event that BoA increases in value. 

Thankfully the current state of the market along with BoA's own problems makes that seem unlikely at the moment.
Title: Re: Financial fuckery thread
Post by: Cain on August 10, 2011, 11:03:53 pm
Yeah, shorting BoA seems like a good idea right now...
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 11, 2011, 04:04:11 am
Yeah, shorting BoA seems like a good idea right now...
Protecting yourself from unexpected upside also seems like a good idea.  You never know who is going to get a bailout at any given moment, and my congressman (Mel Watt) is a ranking member on the banking committee and is 100% owned by BofA.
Title: Re: Financial fuckery thread
Post by: Cain on August 11, 2011, 04:08:45 am
Oh, eventually, sure, something will be done.  But the relative transparency of the American system means you'll see it coming and so can react accordingly.
Title: Re: Financial fuckery thread
Post by: PopeTom on August 11, 2011, 05:45:41 am
Yeah, shorting BoA seems like a good idea right now...
Protecting yourself from unexpected upside also seems like a good idea.  You never know who is going to get a bailout at any given moment, and my congressman (Mel Watt) is a ranking member on the banking committee and is 100% owned by BofA.

As of the end of the day 8/10/2011 my shorting BoA has netted my a 30% return.  I'll probably bail soon as 30% seems pretty good to me.
It's now a matter of figuring out where to go next.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on August 11, 2011, 06:39:17 am
Yeah, shorting BoA seems like a good idea right now...
Protecting yourself from unexpected upside also seems like a good idea.  You never know who is going to get a bailout at any given moment, and my congressman (Mel Watt) is a ranking member on the banking committee and is 100% owned by BofA.

As of the end of the day 8/10/2011 my shorting BoA has netted my a 30% return.  I'll probably bail soon as 30% seems pretty good to me.
It's now a matter of figuring out where to go next.

bitcoins!
Title: Re: Financial fuckery thread
Post by: PopeTom on August 11, 2011, 06:50:00 am
Yeah, shorting BoA seems like a good idea right now...
Protecting yourself from unexpected upside also seems like a good idea.  You never know who is going to get a bailout at any given moment, and my congressman (Mel Watt) is a ranking member on the banking committee and is 100% owned by BofA.

As of the end of the day 8/10/2011 my shorting BoA has netted my a 30% return.  I'll probably bail soon as 30% seems pretty good to me.
It's now a matter of figuring out where to go next.

bitcoins!

Bitcoins seem too much like an elaborate joke being played on tech savvy (but not anything else savvy) Libertarians.
Title: Re: Financial fuckery thread
Post by: Cain on August 11, 2011, 05:12:47 pm
Markets are up again today.  :?
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 11, 2011, 05:22:19 pm
Markets are up again today.  :?

it hit 10,700 over night and with the people that would naturally step in and buy at that level to scrape a profit, Cisco also put out good news.

It's still only hovering around 11,000 which is about where it was on Monday.
Title: Re: Financial fuckery thread
Post by: Adios on August 11, 2011, 05:27:26 pm
I'm watching my CitiGroup stocks play yo-yo in just a $7.00 range. Over $30 a share right now. Glad I bought them at $2.60 a share.
Title: Re: Financial fuckery thread
Post by: Cain on August 11, 2011, 05:53:43 pm
Markets are up again today.  :?

it hit 10,700 over night and with the people that would naturally step in and buy at that level to scrape a profit, Cisco also put out good news.

It's still only hovering around 11,000 which is about where it was on Monday.

Yeah, it didn't seem a huge rise.  Still, shows the market is fairly volatile at the moment.

Also http://www.bbc.co.uk/news/technology-14489077

Quote
Trading in seven stocks listed on the Hong Kong stock exchange was suspended on Wednesday after a hacking attack.

The attack was aimed at a website run by the exchange used to tell traders about company announcements.

The site was shut and trading in seven firms due to make announcements via the website was suspended for half a day.

Shares in HSBC, Cathay Pacific, China Power International and the Hong Kong exchange itself were among those suspended.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 11, 2011, 05:59:46 pm
Funny HSBC would be in on that.  Last news I read about them, they weren't looking so hot, even if they did just offload their US credit card business to Capital One.
Title: Re: Financial fuckery thread
Post by: Cain on August 14, 2011, 01:39:43 am
Good commentary on Standard and Poors from my favourite dead French conspirator (after Talleyrand):

http://fearhonorinterest.wordpress.com/2011/08/10/how-many-divisions-does-standard-and-poors-have/

Quote
Elective power is the power a political community can voluntarily choose to use. The United States of America has a national debt for S&P to fret over because it elects to have a national debt. The United States elects to keep a national debt because it finds it convenient for nourishing a rentier class. The United States elects to spend money on its peculiar version of the Bismarckian welfare state because its designed popularity with its beneficiaries largely insulates it from its rentier critics. The United States elects to keep taxes low while spending at an ambitious clip because of the contingent collision of a sound bite and its political fallout.

Nothing about its national debt constrains the intrinsic power of the United States. While the passive frown against debt default embedded in America’s English heritage mitigates against it, nothing about our national debt constrains the realizable power of the United States. This nation could, at any time, elect to fully or selectively default on its debt. It could do something peculiar like minting a 14 trillion dollar coin to pay down its debt. America’s current creditors (foreign and domestic) lack the intrinsic or realizable power to force the United States to pay them the face value of their Treasuries.

If the U.S. chose to become a deadbeat, it’d become a deadbeat with nuclear weapons. Russia was a deadbeat with nuclear weapons in 1998. One a more rentier friendly investment climate was ushered in through Putin’s “dictatorship of law” (“Even when you’re trying to be good you’re evil!”, Lisa Simpson complained to Mr. Burns). Russia even went through the ritual of “paying off its debt”. Investor money flooded back in. There’s nothing as irrational as an investor looking for yield, as Latin American countries repeated cycles of borrowing, default, forgiveness, and borrowing again reveals.

S&P’s divisions are those of the imagination. Their power to conquer exits only inasmuch as the American political community elects to give them the power to conquer. If you stop believing in ratings agencies, they fade away, like fairies, Smurfs, or the Matrix sequels.

Make no mistake. Government is violence. Money is a claim on a share of the spoils of current government violence. Bonds are a claim on a share of the spoils of future government violence. As long as the United States of America has the power to wheedle (at best) or coerce (at worst) the spoils of realizable power from members of its political community, it can’t go bankrupt and it can’t be driven into austerity against its will. If the United States chooses to keep its magical printing press, it cannot run out of money: its currency is backed by the full faith and credit of the threat and use of violence.

There is no comparison between a household balance sheet and the “balance sheet” of a truly sovereign political community. If you’re not a ruling dynasty, Mafia family, or family dominated corporate board, your family will rarely have the ability to coerce funds from your neighbors. If you can shake down the Joneses next door, congratulations. You have the makings of a sovereign state. Install a printing press in your basement and enjoy the blessings of your own currency. You can’t compare apples and oranges when the apple is a fire-breathing Great White shark with high voltage razor-sharp teeth.

The balance sheet of the United States is a elective and self-imposed accounting identity, not an external and material check on its power. There may be utility in maintaining rituals and pieties that mask the ugly reality that government is ultimately based on command of a preponderance of violence within a discrete chunk of territory. However, the consent of the governed is based on the governed’s ability to coerce their rulers, whether by active resistance or (more realistically) triggering an élite split that leads one faction of a ruling élite to sick its share of a political communities means of coercion against another faction.

The naïve realist follows the mythical Galileo in choosing to bow down before the reality of the world and feel its power with his bare outstretched palms. But he differs from Galileo in declaring that power does not move. It remains stationary at the center of the universe of human action. Here the naïve realist shows his true colors, those of an absolutist for the status quo.

And yet it does move.

Human power does rotate on its axis. Man, a technology-mediated monkey whose biological and cultural evolution is enabled and constrained by the power of his tools, is a protean creature just a little lower than the angels. His elective power can shift realizable power and his realizable power can shift intrinsic power. Intrinsic power fences his realizable power and gelds his elective power but fencing and gelding can shift, for good and for ill. The shift can be long, drawn out, and indiscernible. It can be short, sudden, and violently overt.

Stability is a virtue but not if it allows kindling to imperceptibly build in the shadows of the current world order, kindling that only awaits the right spark to burst into flames. Rearranging chairs on the world scene to try band-aid the ever-expanding gash in its hull only brings the day of inferno closer. In one world S&P is a power. In another world it’s low yield fuel for the flames. Ratings downgrades that merely needle the rough beast, its hour come at last, only annoy it as it slouches toward Bethlehem to be born.
Title: Re: Financial fuckery thread
Post by: Cain on August 14, 2011, 03:36:17 am
US is investigating Standard and Poors, according to a headline on Russia Today.

Looking for more information....

http://www.telegraph.co.uk/finance/financialcrisis/8699245/SandP-faces-inquiry-over-US-downgrade.html

Quote
Regulators are examining the models used by Standard & Poor's after the US government accused the ratings agency of a $2 trillion (£1.2 trillion) error when it downgraded America.

The SEC is also said to be looking at who knew about the decision to cut the rating before it was made public.

The inquiry is reported to be part of a broader look at McGraw-Hill, S&P's parent company, by the Securities and Exchange Commission.

S&P's decision to strip the US of its AAA rating late on the evening of August 5 prompted a furious exchange between the US Treasury and the agency.

The Treasury, which had been sent S&P's press release on the afternoon of the 5th before it was due to be released later that day, accused analysts at S&P of a "basic math error" that led to the downgrade.

The SEC is also said to be looking at who knew about the decision to cut the rating before it was made public amid speculation that it was leaked earlier in the day.

A spokesman for S&P said the company's policies "prohibit analysts or rating-committee members from trading and holding securities or options of the companies or governments they rate".

Although many investors had expected S&P to cut its rating, the decision contributed to a second week of volatile trading in stock markets across the world. It also led to speculation that other countries could follow.
Title: Re: Financial fuckery thread
Post by: Cain on August 21, 2011, 12:55:51 pm
http://rt.com/news/finance-war-usa-banks/

Quote
Following the loss of the US’s triple-A credit score which sparked sell-offs on global markets, a new war using financial derivatives has been waged, which by no means can bear the name of WWIII, financial analyst Max Keiser told RT.

­Investors however remain unconvinced the country’s finances are solid enough. Problems in the Eurozone will be up for discussion by the French and German leaders next week.

Max Keiser, financial analyst and host of the Keiser Report on RT, said French banks are now loaded with toxic derivatives that were sold to them by US investment banks.

“The US investment banks and the rating agencies are now attacking these French banks. They know where the bodies are buried, and they are using the weapons they sold them to attack them,” he said. “The rating will be downgraded again. This is part of a new era on Wall Street – they go after sovereign debt. Wall Street and rating agencies are working together to destabilize the sovereign debt of these countries,” he added.

Emphasis mine.  If the SEC investigation above does get anywhere, I bet if you look at the patterns of behaviour in relation to other sovereign debt downgrades, you would likely find similar instances of "insider trading".

Wall Street and the ratings agencies worked hand in hand to sell the world toxic subprime debts, so why should they stop doing so now?
Title: Re: Financial fuckery thread
Post by: Cain on August 21, 2011, 01:00:16 pm
No comment needed on this:

http://thinkprogress.org/politics/2011/08/18/298485/exclusive-goldman-sachs-vp-changed-his-name-now-advances-goldman-lobbying-interests-as-a-top-staffer-to-darrell-issa/

Quote
Has Rep. Darrell Issa (R-CA) turned the House Oversight Committee into a bank lobbying firm with the power to subpoena and pressure government regulators? ThinkProgress has found that a Goldman Sachs vice president changed his name, then later went to work for Issa to coordinate his effort to thwart regulations that affect Goldman Sachs’ bottom line.

In July, Issa sent a letter to top government regulators demanding that they back off and provide more justification for new margin requirements for financial firms dealing in derivatives. A standard practice on Capitol Hill is to end a letter to a government agency with contact information for the congressional staffer responsible for working on the issue for the committee. In most cases, the contact staffer is the one who actually writes such letters. With this in mind, it is important to note that the Issa letter ended with contact information for Peter Haller, a staffer hired this year to work for Issa on the Oversight Committee.

Issa’s demand to regulators is exactly what banks have been wishing for. Indeed, Goldman Sachs has spent millions this year trying to slow down the implementation of the new rules. In the letter, Issa explicitly mentions that the new derivative regulations might hurt brokers “such as Goldman Sachs.”

Haller, as he is now known, went by the name Peter Simonyi until three years ago. Simonyi adopted his mother’s maiden name Haller in 2008 shortly after leaving Goldman Sachs as a vice president of the bank’s commodity compliance group. In a few short years, Haller went from being in charge of dealing with regulators for Goldman Sachs to working for Congress in a position where he made official demands from regulators overseeing his old firm.
Title: Re: Financial fuckery thread
Post by: Cain on August 21, 2011, 01:02:22 pm
More ratings agencies shennanigans...this time at Moody's:

http://www.businessinsider.com/moodys-analyst-conflicts-corruption-and-greed-2011-8

Quote
A former senior analyst at Moody’s has gone public with his story of how one of the country’s most important rating agencies is corrupted to the core.

The analyst, William J. Harrington, worked for Moody’s for 11 years, from 1999 until his resignation last year.

From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody’s issued during the housing bubble.

Harrington has made his story public in the form of a 78-page “comment” to the SEC’s proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody’s processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.

The primary conflict of interest at Moody’s is well known: The company is paid by the same “issuers” (banks and companies) whose securities it is supposed to objectively rate. This conflict pervades every aspect of Moody’s operations, Harrington says. It incentivizes everyone at the company, including analysts, to give Moody’s clients the ratings they want, lest the clients fire Moody’s and take their business to other ratings agencies.

Moody’s analysts whose conclusions prevent Moody’s clients from getting what they want, Harrington says, are viewed as “impeding deals” and, thus, harming Moody’s business. These analysts are often transferred, disciplined, “harassed,” or fired.
Title: Re: Financial fuckery thread
Post by: Cain on August 21, 2011, 02:03:48 pm
More on Issa's staffer and his family background

http://exiledonline.com/war-nerd-dc-update-transylvania-goes-to-dc-and-lies-its-head-off/

Quote
Here’s what Simonyi/Haller said when they pressed him on the name change:

Quote
“My mother, whose maiden name is Theodora Maria Theresia haller-koi gr Haller (in the U.S., Dora Haller), married Imre Gabor Simonyi and took his name. Her father Alfred haller-koi gr Haller was killed in Budapest in 1944 by fascists as he attempted to prevent children from being conscripted into the military. Prior to his return to Hungary in 1944, he served under Regent Miklos Horthy, as a Hungarian diplomat stationed in England supporting the British in opposition to Germany. His last request was that if Theodora marries, her husband and children would carry on the Haller name.”

There are a lot of funny bits in that little one-paragraph melodrama Peter wrote, but the funniest of all is this line: “…He served under Regent Miklos Horthy, as a Hungarian diplomat stationed in England supporting the British in opposition to Germany.” That is what is technically called a flat-out lie. One thing you can tell about Peter from this story: He thinks Americans don’t know a thing about European history. And he’s probably right, since a lot of the reader comments to this big lie called it “a touching family story.” Whoo-ee! It’s a story, all right. About as accurate as Rambo’s version of Nam.

Miklos Horthy was “Regent” of Hungary from 1919 to 1944. If he was “supporting the British,” it was a well-kept secret. If only Hitler had known that about his pal Miklos, he might not have posed with him in quite as many photo ops, where you can see the Fuhrer and the Regent shaking hands, strolling together, taking a little ride in a convertible together, just generally lovin’ up a storm, as Jerry Lee would say.

I don’t even know where Peter came up with that “pro-British” lie of his. The British weren’t even a factor in that messed-up, landlocked multi-ethnic gangfight. South-Central Europe between the wars—well, it’s a lot like South-Central LA back in the day, except a whole lot bloodier and more confusing. Basically it’s pretty much the way Eastwood describes his killer past in Unforgiven: Nobody remembers much of it, they were drunk most of the time–the main ingredient for a war in those parts is slivovitz, or anything else if you can’t get that, including hair oil and wood alcohol—and they shot a lot of people. And hanged a lot of people. And raped a lot of people. Hungarians, Germans, Slovaks, Rumanians, Croats, Serbs, Ukranians, with the Jews and Gypsies hiding in the bushes trying to sell a little booze and not get lynched—Did I leave anybody out? If so, they’re lucky, because nobody was a hero in that mess. Primitive warfare with superb German or Czech weapons; you can imagine how that went. Killing everyone in the village before you leave—standard practice. Avoiding combat, torturing civilians until they tell you where their last side of bacon is—a day at the office. Raping every female before you bayonet them and go—part of the job. .

When the totally worthless, sleaze-ridden Austro-Hungarian Empire collapsed after Germany surrendered, some ethnic gangs rose in the rankings and others sank. The Hungarians lost out big, because as the second-meanest and biggest gang in the Empire (after the Germans), they’d had a sort of little-brother status that allowed them to beat up all the other ethnics lower than them. By local standards, believe me, that was a good deal.

But their big brothers, the Germans, lost out, so they lost too. In 1920, thanks to the Treaty of Trianon, which was the B-League version of the Treaty of Versailles that did such a good job of pacifying Europe, Hungary had lost three-quarters of its old territory and about two-thirds of its population. What was left was a core area, a Hungarians-only district—and that’s what’s now “Hungary” on the map.

You’d think that’d be fine, since those tribes couldn’t live with each other. Why not split up? Well, remember the Balkans in the 1990s. A bunch of Hungarians got left behind in the parts that were grabbed by all the other ethnic gangs, and that drove the homeland Hungarians crazy. Crazier than before, I mean, because the truth about Europe before 1945, the one key truth nobody wants to hear, is that they were all, and I mean all, from London to Moscow, bloodthirsty creeps, totally out of their minds. The only difference is that they weren’t all as good at war, or not at the same time anyway, and the ones who were more in the mood grabbed what they could, when they could.

The Goldman Sachs-turned-Darrell-Issa-staffer Peter Simonyi/Haller’s hero, Miklos Horthy, was a classic specimen of South-Central European strongman between the wars. A fascist, absolutely. Not the worst of them, but a fascist all the way, in that half-comedy way the smaller European dictators had, from Mussolini on down. His title was a punchline in itself: “Admiral Miklos Horthy.” Admiral? Take another look at Hungary on the map; Admiral of what? Turns out Horthy had been an Admiral in the Austro-Hungarian navy, which was another punchline in itself.
Title: Re: Financial fuckery thread
Post by: Cain on August 22, 2011, 11:41:56 am
Can't believe no-one has decided any of the previous stories are worth commenting on, but I'm going to continue to plug away at "ratings agencies and Wall Street favourites in collusion over downgrades of sovereign debt and insider trading" with this piece.

http://antifascist-calling.blogspot.com/2011/08/new-leaks-reveal-insider-tips-on-s-us.html

Quote
Last week, AntiSec cyber-guerrillas (a loose alliance amongst individuals affiliated with LulzSec and Anonymous) released a 1GB cache of emails filched from security contractor Vanguard Defense Industries (VDI).

Previously Anonymous and LulzSec have wrapped their keyboards around defense grifters Booz Allen Hamilton, ManTech International, NATO, the Department of Homeland Security, the FBI, InfraGard (a "public-private" security alliance amongst corporate heavy-hitters and the Bureau), the CIA, the Arizona Department of Public Safety, the Arizona Counter Terrorism Information Center (a so-called "fusion center" staffed by cops, federal agents, private contractors and the U.S. military), the Bay Area Rapid Transit agency (BART), Britain's Serious Organised Crime Agency, PBS, Fox News, and repressive governments such as Egypt, Tunisia and Zimbabwe.

Their latest campaign targeted VDI, a Texas-based firm, which specializes in the "development and deployment" of Unmanned Aerial Systems (UAS, killer drones). VDI "draws on specialized experience of senior aerospace engineers, former military special operations officers, military instructor pilots as well as retired Senior Executive Service Federal Agents," claiming their "background and operational knowledge has afforded us the unique vision to provide a platform that will extend the security and response capabilities of any organization," according to a blurb on their web site.

While VDI touts their ability to offer "support" to the "military, local, state and federal law enforcement as well as the private sector," the firm also offers "a full scope of consulting services independent of our aerial technology."

That "unique vision" however, didn't prevent AntiSec from spiriting away thousands of emails from VDI's Senior Vice President Richard T. Garcia, a former FBI Assistant Director in Los Angeles who recently left a well-paid position as Global Security Manager for the environment-killing Shell Oil Corporation (can you say Niger Delta?) for "greener" pastures.

A press statement from AntiSec announced that the leak "contains internal meeting notes and contracts, schematics, non-disclosure agreements, personal information about other VDI employees, and several dozen 'counter-terrorism' documents classified as 'law enforcement sensitive' and 'for official use only'."

"Vanguard Defense Industries," AntiSec writes, "manufactures unmanned 'ShadowHawk' drones which cost $640,000 and are equipped with grenade launchers and shotguns. ShadowHawks are currently in use by law enforcement, military, and private corporations deploying them in the US, the Horn of Africa, Panama, Columbia [sic], and US-Mexico border patrol operations. These emails contain contracts, schematics, non-disclosure agreements, and more. Additionally we found evidence of a Merrill Lynch wealth management advisor giving private advance notice to Garcia about upcoming S&P US credit rating downgrades."

Improper Disclosures

In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

Investigative journalist Steve Ragan, writing at The Tech Herald (the publication that broke the story on Anonymous's HBGary hack) informs us that "the U.S. Securities and Exchange Commission was investigating whether there was any sort of insider trading done by S&P employees before the downgrade was official. The story hinged on comments made to the paper by sources close to the investigation itself."

"On the day S&P cut the U.S.'s credit rating" Ragan writes, "Wall Street was flooded with downgrade rumors. These rumors started earlier in the day while trading was active. It turned out they were true."

According to Bloomberg News the SEC "is scrutinizing the method Standard & Poor's used to cut the U.S.'s credit rating and whether the firm properly protected the confidential decision, according to a person with direct knowledge of the matter."

Reporter Joshua Gallu wrote August 14 that SEC staff are "looking into whether certain market participants learned of the downgrade before its announcement."

Downplaying speculation that S&P employees may have breached SEC rules by leaking sensitive information to privileged clients, The New York Times, as is their wont, claimed "it is arguable whether S.&P.'s announcement on Aug. 5 of the rating change was all that confidential, given the speculation about it."

"Assuming information about the downgrade was confidential," the Times pontificates, "it must also be material, which means a reasonable investor would consider it important. This seems to be an easy element to establish because the wild gyrations in the market on the first trading day after the downgrade shows how investors viewed it."

But Cook's email to Garcia didn't arrive in his in-box "on the first trading day after the downgrade" but nearly four months earlier, long before July's political shenanigans over raising the federal debt ceiling, the ostensible reason why S&P downgraded America's credit worthiness.

Maxine Waters (D-CA), wrote to SEC chairwoman, cover-up specialist Mary Schapiro, demanding that the commission "conduct an investigation into whether S.&P. selectively disclosed information related to the U.S. government debt downgrade to any financial institutions, and whether any institutions that had that nonpublic information traded on that information prior to the official announcement."

It appears that Cook's email to Garcia would confirm that S&P insiders did just that, providing information to Merrill Lynch and one can assume other financial firms.

Throwing cold water on charges that the rating's agency acted improperly, the Times argues that "even if if the S.E.C. finds that the information was improperly disclosed, proving insider trading will be difficult."

Why might that be?

According to the Times, "while S.&P. and other credit rating agencies are required to adopt policies to prevent such disclosure, it is questionable whether just leaking information violates any federal regulations, even if it breaches a corporate confidentiality policy."

In case anyone is still naive to believe anyone involved in high finance would never commit such crimes

http://ca.finance.yahoo.com/news/Report-Deutsche-Bank-capress-4040264273.html?x=0

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SEOUL, South Korea - A report says four employees of Deutsche Bank AG and its South Korean brokerage unit have been indicted on charges of manipulating stock prices and unfair trading.

Yonhap news agency reported Sunday that the alleged improper trading triggered a sudden plunge in Seoul's benchmark stock index last November and resulted in illegal profits of about $41 million.

Yonhap says prosecutors indicted three employees with the bank's Hong Kong office and a fourth with Deutsche Securities Korea.

Yonhap cited the German bank as saying its South Korean brokerage unit didn't authorize or condone any violation of market regulations.

Seoul prosecutors said they could not immediately confirm the report.
Title: Re: Financial fuckery thread
Post by: Adios on August 22, 2011, 11:49:08 am
I may not be commenting on these, but be assured that I am reading every one of them. I think this has now gone way beyond conspiracy theory to hard reality.
Title: Re: Financial fuckery thread
Post by: deadfong on August 22, 2011, 02:19:50 pm
I'm new here, but I've been reading this for a while as well. 

Maybe it's too early for my brain - does this bit here:


In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."


mean that not only did S&P decide 4 months ago to downgrade the US, but that they already plan to downgrade us again in 2012?  (I also love the arrogance of S&P, that we have to come up with a deficit solution according to their schedule, but I suppose that shouldn't surprise me.)

Also, a side question: could someone more weapons-savvy than me tell me why you'd mount a shotgun on an aerial drone?  I always had the impression that shotguns were more a close-combat weapon.
Title: Re: Financial fuckery thread
Post by: Cramulus on August 22, 2011, 02:36:35 pm
been following closely as well.. I don't know what to say other than *sigh*.
Title: Re: Financial fuckery thread
Post by: Don Coyote on August 22, 2011, 04:16:17 pm
Also, a side question: could someone more weapons-savvy than me tell me why you'd mount a shotgun on an aerial drone?  I always had the impression that shotguns were more a close-combat weapon.

For urban control. Shotguns can also fire less-lethal beanbags and other such rounds for riot control.

Or stun-batons.
Title: Re: Financial fuckery thread
Post by: Adios on August 22, 2011, 04:39:30 pm
Also, a side question: could someone more weapons-savvy than me tell me why you'd mount a shotgun on an aerial drone?  I always had the impression that shotguns were more a close-combat weapon.

For urban control. Shotguns can also fire less-lethal beanbags rock salt and other such rounds for riot control.

Or stun-batons.

Fixed.
Title: Re: Financial fuckery thread
Post by: Jenne on August 22, 2011, 04:47:01 pm
...it's gotten to where...even the political posturing is all just so much orchestration.  The cynical, jaded part of me just doesn't see any of it as real anymore, other than the fact that people are losing ground financially in their daily lives that don't have the sheer luck to be tied to the backs of the bankers and the finance industry.

There's no end to the bullshit.

...and there probably never WAS...we were just all duped into thinking there was.
Title: Re: Financial fuckery thread
Post by: Triple Zero on August 22, 2011, 09:05:28 pm
Can't believe no-one has decided any of the previous stories are worth commenting on, but I'm going to continue to plug away at "ratings agencies and Wall Street favourites in collusion over downgrades of sovereign debt and insider trading" with this piece.

Please do! Like others said, I really don't know what to comment about them, but I've read it all and it's been very good. I don't get this kind of info via my usual news sources.

Title: Re: Financial fuckery thread
Post by: Luna on August 23, 2011, 12:53:58 am
Chiming in, I have been reading, just don't feel I have anything to add, please continue!
Title: Re: Financial fuckery thread
Post by: Cain on August 23, 2011, 07:26:36 pm
Maybe it's too early for my brain - does this bit here:


In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."


mean that not only did S&P decide 4 months ago to downgrade the US, but that they already plan to downgrade us again in 2012?  (I also love the arrogance of S&P, that we have to come up with a deficit solution according to their schedule, but I suppose that shouldn't surprise me.)

That is what it sounds like to me.  A downgrade in response to the policies of one party or another could decide the election. 

Who wants to play kingmaker?  Who's willing to bend over the most to accomodate the ratings agencies and Wall Street?
Title: Re: Financial fuckery thread
Post by: Cain on August 23, 2011, 07:30:06 pm
Obama is, apparently

https://www.nytimes.com/2011/08/22/business/schneiderman-is-said-to-face-pressure-to-back-bank-deal.html?_r=1&ref=business&pagewanted=all

Quote
Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general's participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

Not surprising, the large banks, which are eager to reach a settlement, have grown increasingly frustrated with Mr. Schneiderman. Bank officials recently discussed asking Mr. Donovan for help in changing the attorney general’s mind, according to a person briefed on those talks.

Schneiderman is the man all the big investment banks are afraid of, right now.  He has stated there was fraud, there was corruption and he intends to prosecute - and he doesn't care how many politically connected friends they may have.

That the Obama administration is taking the banks side against Schneiderman tells you everything you need to know about the Obama administration.

Yves Smith says it best

http://www.nakedcapitalism.com/2011/08/corrupt-obama-administration-pressuring-new-york-attorney-general-to-support-mortgage-whitewash.html

Quote
It is high time to describe the Obama Administration by its proper name: corrupt.

Admittedly, corruption among our elites generally and in Washington in particular has become so widespread and blatant as to fall into the "dog bites man" category. But the nauseating gap between the Administration's propaganda and the many and varied ways it sells out average Americans on behalf of its favored backers, in this case the too big to fail banks, has become so noisome that it has become impossible to ignore the fetid smell.

The Administration has now taken to pressuring parties that are not part of the machinery reporting to the President to fall in and do his bidding. We’ve gotten so used to the US attorney general being conveniently missing in action that we have forgotten that regulators and the AG are supposed to be independent.
Title: Re: Financial fuckery thread
Post by: Adios on August 23, 2011, 08:34:29 pm
The implications behind this are much more far reaching than just the financial sector, aren't they?
Title: Re: Financial fuckery thread
Post by: Cain on August 23, 2011, 08:35:46 pm
Yep.  The last downgrade cost the US more than the damage from all Al-Qaeda attacks on US installations and sites combined.
Title: Re: Financial fuckery thread
Post by: Jenne on August 23, 2011, 08:46:56 pm
Yep.  The last downgrade cost the US more than the damage from all Al-Qaeda attacks on US installations and sites combined.

Yeah, tell THAT to the Tea Baggers, though.
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 25, 2011, 03:06:03 pm
Warren Buffet knows something we don't know. (http://www.cnbc.com/id/44269375)

Quote
Bank of America [BAC  6.99] soared 20 percent after Berkshire Hathaway [BRK.A  106350.00  ---  UNCH] said it will invest $5 billion in the bank.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 25, 2011, 03:16:29 pm
Warren Buffet knows something we don't know. (http://www.cnbc.com/id/44269375)

Quote
Bank of America [BAC  6.99] soared 20 percent after Berkshire Hathaway [BRK.A  106350.00  ---  UNCH] said it will invest $5 billion in the bank.

not digging back through the thread, but wasn't there someone here that shorted it?

hope you covered that ages ago
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on August 25, 2011, 08:24:54 pm
Oh, wait, nevermind.  Buffet invested in BofA because he was bribed.  :lulz:

Quote
Bank of America Corp. (BAC), seeking to snap this year’s stock plunge, will pay billionaire Warren Buffett $300 million annually to do what he did for Goldman Sachs Group Inc. during the credit crisis: bolster confidence.

The $5 billion sale of preferred equity, which initially sent the shares up 26 percent, may improve investor perceptions without meaningfully affecting the source of their concern, the bank’s capital, according to analysts including William Tanona at UBS AG. The deal gives Buffett’s Berkshire Hathaway Inc. (BRK/A) warrants that could make it the lender’s largest stockholder.
Title: Re: Financial fuckery thread
Post by: Cain on August 25, 2011, 08:51:30 pm
Gonna say, 5 billion is a drop in the ocean when it comes to BoA's supposed exposure.
Title: Re: Financial fuckery thread
Post by: Jenne on August 25, 2011, 10:19:03 pm
...that's what it sounded like to me on NPR this morning.  They wanted someone to put some good ol' CONFIDENCE back into the American economy.  :lulz:
Title: Re: Financial fuckery thread
Post by: Cain on August 25, 2011, 10:56:06 pm
I've said it once and I've said it before, the American economy is out of fuel, it is running on fumes and a whole lot of Clap Your Hands If You Believe.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 26, 2011, 03:34:22 pm
I've said it once and I've said it before, the American economy is out of fuel, it is running on fumes and a whole lot of Clap Your Hands If You Believe.

Bernanke is supposed to be speaking later.  The US exchange is already selling off in anticipation.

Title: Re: Financial fuckery thread
Post by: Cain on August 26, 2011, 03:52:21 pm
Rumour is its going to be another round of quantative easing.  More free money to inflate the bubble!
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 26, 2011, 04:01:47 pm
Rumour is its going to be another round of quantative easing.  More free money to inflate the bubble!

 :horrormirth:

Wouldn't surprise me at all.  It's the only thing they have that they can do.

Just for once I wish he'd come out and say "Look, we don't know what we're doing and we have to admit, finally, that we're largely to blame for all of this mess (and the one in the 70's, and more going back) and printing more money is only going to delay this so we're Volkerizing the interest rate for a few years to try and help get this shit over with.  Oh, and I'm finally beginning to think Keynesian economic policies are teh sux0r."

Even if I'd loose my ass on the bonds I'm holding, at least I'd be surprised.
Title: Re: Financial fuckery thread
Post by: Cain on August 27, 2011, 07:09:13 pm
We have a system now which combines the worst of Keynesianism, Monetarism and Feudalism, with none of their virtues, which deserves some kind of recognition, I believe.

I'd also like to remind everyone we've been, essentially, in a recession since 1973.  The appearance of economic growth has been due to financialization of the economy, dealing in phantom sums of cash, and through the lowering of tax burdens on transnational corporations.  Every single instance of apparent economic progress since this time has been a bubble, which has burst five to eight years later.

We've also essentially moved back to a pre-18th century model of taxation now.  Historically, the right to taxation was sold to unscrupulous individuals, who would then use that money in risky financial speculation.  Now we just use public servants to hand the money over to the speculators in question.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 27, 2011, 10:18:19 pm
We have a system now which combines the worst of Keynesianism, Monetarism and Feudalism, with none of their virtues, which deserves some kind of recognition, I believe.

I'd also like to remind everyone we've been, essentially, in a recession since 1973.  The appearance of economic growth has been due to financialization of the economy, dealing in phantom sums of cash, and through the lowering of tax burdens on transnational corporations.  Every single instance of apparent economic progress since this time has been a bubble, which has burst five to eight years later.

We've also essentially moved back to a pre-18th century model of taxation now.  Historically, the right to taxation was sold to unscrupulous individuals, who would then use that money in risky financial speculation.  Now we just use public servants to hand the money over to the speculators in question.

You forgot to blame it first on Nixon, then Gerald Ford, then Jimmy Carter, then heap a giant pile of blame on Reagan followed by a serving for HW Bush.  Clinton gets a pass.  Always.  I mean, right?  Then the biggest contributors in the public mind: Bush II followed by Obama.

That's about as far back as the memories go for almost anyone I talk with about it.  They always skew away from their own party's president when discussing it.

They almost universally think that a sitting president has anything to do with monetary policy, and has the "Mighty Pen" he can use to either raise or cut taxes, all by his executive branch self.

I find myself increasingly more worried about the people we DON'T elect than I do the ones we do.  The people who just go find some consulting work in D.C. for 4 - 8 years and then come right back to doing what they were doing.

Different face, same agendas.

Lol elections.
Title: Re: Financial fuckery thread
Post by: Cain on August 27, 2011, 10:27:38 pm
Well, Nixon did decide to trash Bretton Woods, which kinda led to the current situation (as I understand it, he thought the US would be the best placed to take advantage of the post-Bretton chaos.  He thought wrong), so he deserves a lot more blame than he currently gets, as does the OPEC cartel.

As for Clinton, the major thing I can recall from under him was NAFTA, aka Not A Free Trade Agreement, the 1998 "Asian" financial crisis, helping inflate the dotcom bubble...  I can think of a few things, anyway.

But yeah.  Lots of anonymous faces in the SEC, Treasury...not to mention the revolving door between those and the investment banks and major hedge funds, they're power brokers on a par with sitting politicians.  Another factor that cannot be discarded is the academic economics angle... Larry Summers and the rest.

It's times like this that I think bombing the Harvard Business School and banning its alumni from managing anything more than a McDonald's store would, if not actually solve a lot of problems, at least stop any more from happening.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on August 27, 2011, 10:56:20 pm
Well, Nixon did decide to trash Bretton Woods, which kinda led to the current situation (as I understand it, he thought the US would be the best placed to take advantage of the post-Bretton chaos.  He thought wrong), so he deserves a lot more blame than he currently gets, as does the OPEC cartel.

As for Clinton, the major thing I can recall from under him was NAFTA, aka Not A Free Trade Agreement, the 1998 "Asian" financial crisis, helping inflate the dotcom bubble...  I can think of a few things, anyway.

But yeah.  Lots of anonymous faces in the SEC, Treasury...not to mention the revolving door between those and the investment banks and major hedge funds, they're power brokers on a par with sitting politicians.  Another factor that cannot be discarded is the academic economics angle... Larry Summers and the rest.

It's times like this that I think [EDIT: replacing the Harvard Business School with a Clown College] just looking out for you man.  I'm not paranoid, but I also don't take unnecessary risks to get a point across and banning its alumni from managing anything more than a McDonald's store would, if not actually solve a lot of problems, at least stop any more from happening.

I give Nixon a pass on Bretton-Woods.  He didn't put it in place and he had nothing to do with the run on the US by foreign governments to cash in the dollars to gold.  They were printing money and it was, possibly for the last time, OBVIOUS and any sitting President in his place would have been pressured to do the same thing by the cost of the Vietnam War, a war I will never agree was necessary, and precipitated the collapse of Bretton-Woods.  If anyone, I blame LBJ for stepping up that war and lying about it, causing the increase in spending necessary to perpetuate it.

Clinton supporters amaze me for their ability to completely blank out when NAFTA is brought up, especially considering how protectionist and Union supporting a large number are.  I know it was in the works long before he signed it into law but man the glazed eyes and "BUT NO IT WAS BUSH I AND II" talk I hear when you mention Clinton and NAFTA.

As you said, the sharks are the back door guys that get "appointed" to one administration, (usually after taking a fat severance from a major financial institution so they can bring in new Harvard meat" and when that one gets voted out, they just go to work for one of their buddies in D.C. until "their guy" gets back in.  

I'm not even sure that Academic Economics should even be a term anymore.  It certainly cannot, looking back over the last 50 years, be in any way considered a Science.  Despite blatant evidence and the numbers to back it going on 40 years, they continue to use the same exact medicine that was taught by Keynes.  The end result is that we all suffer, because the "growth" was really only an illusion of growth, and since deflation is seen as worse than inflation, to be avoided at all costs, even at the risk of stagflation, we all become more poor as the decades grind on.

[EDIT CONCERNING THE ABOVE BOLDED]  I keep forgetting, considering your areas of expertise, you're likely used to having a knock at your door to discuss those sorts of things.  Just meant that spiders look for that sort of thing.  Something you must already know as well.  Never mind then.  Continue on.
Title: Re: Financial fuckery thread
Post by: PopeTom on August 28, 2011, 02:54:20 pm
Warren Buffet knows something we don't know. (http://www.cnbc.com/id/44269375)

Quote
Bank of America [BAC  6.99] soared 20 percent after Berkshire Hathaway [BRK.A  106350.00  ---  UNCH] said it will invest $5 billion in the bank.

not digging back through the thread, but wasn't there someone here that shorted it?

hope you covered that ages ago

That would have been me and yes I did.  Never intended to hold it for long and it's unlikely I'll short a stock again anytime soon.  At least until I can get upgraded in my options trading on E*Trade.
Title: Re: Financial fuckery thread
Post by: Cain on August 31, 2011, 02:29:27 pm
I give Nixon a pass on Bretton-Woods.  He didn't put it in place and he had nothing to do with the run on the US by foreign governments to cash in the dollars to gold.  They were printing money and it was, possibly for the last time, OBVIOUS and any sitting President in his place would have been pressured to do the same thing by the cost of the Vietnam War, a war I will never agree was necessary, and precipitated the collapse of Bretton-Woods.  If anyone, I blame LBJ for stepping up that war and lying about it, causing the increase in spending necessary to perpetuate it.

Clinton supporters amaze me for their ability to completely blank out when NAFTA is brought up, especially considering how protectionist and Union supporting a large number are.  I know it was in the works long before he signed it into law but man the glazed eyes and "BUT NO IT WAS BUSH I AND II" talk I hear when you mention Clinton and NAFTA.

As you said, the sharks are the back door guys that get "appointed" to one administration, (usually after taking a fat severance from a major financial institution so they can bring in new Harvard meat" and when that one gets voted out, they just go to work for one of their buddies in D.C. until "their guy" gets back in.  

I'm not even sure that Academic Economics should even be a term anymore.  It certainly cannot, looking back over the last 50 years, be in any way considered a Science.  Despite blatant evidence and the numbers to back it going on 40 years, they continue to use the same exact medicine that was taught by Keynes.  The end result is that we all suffer, because the "growth" was really only an illusion of growth, and since deflation is seen as worse than inflation, to be avoided at all costs, even at the risk of stagflation, we all become more poor as the decades grind on.

[EDIT CONCERNING THE ABOVE BOLDED]  I keep forgetting, considering your areas of expertise, you're likely used to having a knock at your door to discuss those sorts of things.  Just meant that spiders look for that sort of thing.  Something you must already know as well.  Never mind then.  Continue on.

Nixon also followed policies which further heightened the war, though, increasing the costs in money (as well as in human terms).  Sure, he wasn't entirely to blame, but he was the man in the seat during the events, and it was his choices which helped shape the post-Bretton system, and therefore there is a significant measure of responsibility, which of course does not excuse those who followed on after him.  But if you ask the average person in the street, or even pundit, you'd probably get a puzzled look for even mentioning Bretton Woods, unless they're economists or Fareed Zakaria (maybe).

Well, Clinton supporters are dumbfucks.  As are Democrats in general.  This explains a lot about them.   The real question is who is more stupid, the union-supporting protectionist types who voted for him in spite of his record on such issues, or the neoliberal "Washington Consensus" types who helped drive the US economy into the ground.  I mean, it's almost certainly the latter, but then again, they convinced the former to vote for their guys time and time again...so like I say, hard call.

Academic Economics hasn't been a science since about the time of Ricardo, and even then that is being generous.  I wouldn't necessarily blame Keynes though.  Or at least, not just Keynes.  There has been consistent failure in the face of expert advice pretty much since economics was first considered an academic subject, but especially in the past 30 years.  The core assumptions of economics are basically untenable and unprovable, rendering it even less of a "science" than psychology, sociology or political science.  In fact, almost every system of economics shares a certain abstract, a priori approach favoured by technocratic wonks the world over, and is almost always useless, utterly wrong and unable to admit its own failings.

I'm not saying anything a certain former Canadian ambassador has suggested, so I have no fear of that.  Besides, the best thing about pissing off Harvard Business School alumni is you're already picking on a target population noted for magical thinking, inability to plan and rote repetition of jargon and buzz phrases as substitution for thought.  It's like picking on retards, only at least retards know they are retards and so have a reasonable understanding of their limitations.
Title: Re: Financial fuckery thread
Post by: Cain on August 31, 2011, 02:31:36 pm
UK home ownership is projected to fall from 72% to 64%.

Meanwhile, government signals its intent to keep house prices artificially high through the blatant manipulation of the green field zones, limiting the land available for building projects and forcing companies to work on inferior "brown field" sites with additional hidden costs, which investors are loathe to support.
Title: Re: Financial fuckery thread
Post by: Cain on September 03, 2011, 02:22:46 pm
http://www.bbc.co.uk/news/business-14771936

Quote
US authorities are to sue 17 major banks for losses on mortgage-backed investments that cost taxpayers tens of billions of dollars.

The Federal Housing Finance Agency said it was taking action against banks including Goldman Sachs, Barclays, Bank of America, Deutsche Bank, and HSBC.

The agency says they misrepresented the quality of the mortgages they sold during the housing bubble.

The values plunged as the US was engulfed in the financial crisis.

The FHFA oversees mortgage giants Fannie Mae and Freddie Mac.

The two firms lost more than $30bn (£18.5bn), partly because of their investments in the subprime mortgages, and were bailed out by the US government.

Since the rescues, US taxpayers have spent more than $140bn to keep the firms afloat.

Other banks facing action include Royal Bank of Scotland, Nomura, Citigroup, and Societe Generale.

About bloody time.  The case for fraud is clear...even in spite of the SEC's malicious data deletion.
Title: Re: Financial fuckery thread
Post by: Adios on September 03, 2011, 04:32:42 pm
I guess I would be surprised if anything more than a slap on the wrist came from all of this.
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on September 03, 2011, 05:04:28 pm
I guess I would be surprised if anything more than a slap on the wrist came from all of this.
Even if the government wins, the suit only aims to recover a small fraction of the trillions in bailout money given to those same banks, so yeah, exactly.  They are suing to give them a slap on the wrist, but the case will settled for a stern look.
Title: Re: Financial fuckery thread
Post by: PopeTom on September 04, 2011, 04:44:52 pm
Federal agency sues banks for fraud and wins.

Settlement & penalties cause banks to be at risk for failure.

Many of these banks already having been deemed 'too big to fail' are then bailed out (again) by the federal Government.

lolz
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on September 04, 2011, 05:10:23 pm
Cost to bail out (again) > proceeds from settlement & penalties, resulting in net loss to taxpayers.
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 05, 2011, 10:59:59 am
Nassim Nicholas Taleb, on the Great Bank Robbery:

http://www.project-syndicate.org/commentary/taleb1/English
Title: Re: Financial fuckery thread
Post by: Cain on September 07, 2011, 06:13:32 pm
Weenies at Chase bank feel threatened by an artist

http://www.latimes.com/news/local/la-me-bank-painting-20110828,0,4395501.story

Quote
Alex Schaefer’s depiction of a Chase branch going up in flames drew the attention of L.A. police, who asked if he was a terrorist. He said the work was a metaphor for the havoc banking practices have caused the economy.

Standing before an easel on a Van Nuys sidewalk, Alex Schaefer dabbed paint onto a canvas.

“There you have it,” he said. “Inflammatory art.”

The 22-by-28-inch en plein air oil painting is certainly hot enough to inflame Los Angeles police.

Twice they’ve come to investigate why the 41-year-old Eagle Rock artist is painting an image of a bank building going up in flames.

Schaefer had barely added the orange-and-yellow depiction of fire shooting from the roof of a Chase Bank branch when police rolled up to the corner of Van Nuys Boulevard and Sylvan Street on July 30.

“They told me that somebody had called and said they felt threatened by my painting,” Schaefer said.

“They said they had to find out my intention. They asked if I was a terrorist and was I going to follow through and do what I was painting.”

No, Schaefer said. He explained that the artwork was intended to be a visual metaphor for the havoc that banking practices have caused to the economy.

A terrorist certainly would not spend hours on a public sidewalk creating an oil painting of his intended target, he told the officers.

The police took down his name, address and telephone number on a form — Schaefer declined to provide his Social Security number — and departed.

“They were friendly. They weren’t intimidating,” he said. “I figured that when they left, they probably decided the episode was stupid and they’d just wad up the form and throw it away.”

Wrong. On Tuesday, two more officers showed up at Schaefer’s home. This time they were plainclothes detectives.

“One of them asked me, ‘Do you hate banks? Do you plan to do that to the bank?’ ” Schaefer again explained what his painting symbolizes.
Title: Re: Financial fuckery thread
Post by: Adios on September 07, 2011, 06:18:46 pm
Good god. Smells like they are trying to use the law to place themselves above accountability.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 07, 2011, 06:34:09 pm
alright, playing devil's advocate a bit here, but if I worked in a building and there was a guy across the street painting a picture of it burning, without knowing the guy at all, I could see how that might seem a bit intimidating. 

Personally, I'd be inclined to walk over and ask him what the hell he's thinking and that does he know that if he wasn't on the list before, he most certainly will be now.  Not everyone would just strike up a convo though and quite a few people would probably call the cops, being the post twin towers world that it is.

And if it's called in and the cops don't check it out and run it down and be absolutely fucking SURE this guy is just a painter, when a bank comes down and it's found to be him (come on now, that's not too damn far fetched) then people will ask why the hell didn't the cops do their job and feel this guy out.

Great publicity for the guy as a painter though. 
Title: Re: Financial fuckery thread
Post by: Cramulus on September 07, 2011, 06:35:10 pm
 :horrormirth:
great piece of horrormirth there

It tells a story about the times we live in. An absurd story.

It's a story about how legitimate resistance to abuses of power are interpreted as Working For The Enemy.  It's a story about how we only have free speech if we're spouting the party line. And most importantly, it's a story about the relationship between banks, private citizens, and the law.
Title: Re: Financial fuckery thread
Post by: Cramulus on September 07, 2011, 06:42:40 pm
alright, playing devil's advocate a bit here, but if I worked in a building and there was a guy across the street painting a picture of it burning, without knowing the guy at all, I could see how that might seem a bit intimidating. 

Yes, intimidating. But a legitimate expression, protected by the first amendment. Your right to express yourself doesn't stop as soon as it makes some people uncomfortable.

Quote
Personally, I'd be inclined to walk over and ask him what the hell he's thinking and that does he know that if he wasn't on the list before, he most certainly will be now. 

So essentially, you'd try to dissuade him from painting a picture by warning him that if you make too much noise, the jailers will hear him.

Quote
And if it's called in and the cops don't check it out and run it down and be absolutely fucking SURE this guy is just a painter, when a bank comes down and it's found to be him (come on now, that's not too damn far fetched) then people will ask why the hell didn't the cops do their job and feel this guy out.

How do you confirm that somebody is "just a painter?" You run a background check? You ask to see his portfolio and count the bowls of fruit?

The guy isn't doing anything illegal. It may make some people that work at banks uncomfortable, but fuck, he's an artist, what is he supposed to do, write them a polite letter and ask them to stop?
Title: Re: Financial fuckery thread
Post by: LMNO on September 07, 2011, 06:52:18 pm
Ok, sorry to be the rationalist here, but there's one more thing this could be a sign of:

Bureaucracy and established police procedure.

It goes like this: A call comes into a police station that a person is concerned about a guy acting suspicious outside Chase Bank.  Yes, I know that's not what he was doing, and I don't have access to the call that came into the station.  This is a hypothetical.  I would imagine that would immediately trigger two beat cops to go to that location and assess the situation.  They see no immediate threat so the guy isn't arrested.  However, determining whether or not he poses a future threat is above their pay grade.  So, they take the guy's info, and at the end of their shift file a report.  The report then triggers an automatic response for two detectives to visit the guy so they can fully write him off as a non-threat.

It all looks insidious, and it can absolutely be corrupted and abused, but this simply looks to me like they were following SOP and best practices.  If you want to blame someone, blame the asshat who got scared by a painting and called the cops.
Title: Re: Financial fuckery thread
Post by: Cain on September 07, 2011, 06:57:01 pm
LMNO, well, yeah.

The first image that came to my mind was the weenies at Goldman Sachs, clutching their man-bags and then touching their covert firearms for reassurance, only in the Chase bank in LA.

Still hilarious though.  "Are you a terrorist?"  "Yes, yes I am.  I expect this picture to inspire fear and despair in the heart of the hated Banksters everywhere.  Viva la revolucion!"
Title: Re: Financial fuckery thread
Post by: Cramulus on September 07, 2011, 07:01:45 pm
Do you think everybody who the LAPD questions gets a followup interview from a pair of plainclothes detectives?
Title: Re: Financial fuckery thread
Post by: Cramulus on September 07, 2011, 07:09:46 pm
don't get me wrong, I hear what you're saying LMNO and agree that it's likely the case. But I can't figure out how I'd distinguish between unobjectional SOP and the cops trying to discourage people from expressing populist rage towards banks.

If Chase Bank were painting a picture of me on fire, I'd hope some plainclothes detectives followed up on it.  :p
Title: Re: Financial fuckery thread
Post by: Adios on September 07, 2011, 07:12:25 pm
don't get me wrong, I hear what you're saying LMNO and agree that it's likely the case. But I can't figure out how I'd distinguish between unobjectional SOP and the cops trying to discourage people from expressing populist rage towards banks.

If Chase Bank were painting a picture of me on fire, I'd hope some plainclothes detectives followed up on it.  :p

They painted a picture of you homeless and standing in a soup line. No one investigated.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 07, 2011, 07:15:36 pm
I had a reply typed up to each of the places you quoted and replied Cram but I lost it to electrons somehow.  Basically, what LMNO said.  

I know we're all "the police are always the bad guys" here in Discordia but if it's called in by another citizen, it's their job to check it out.  If it throws up certain flags, it's their job to forward it on for a follow up.
Title: Re: Financial fuckery thread
Post by: Eater of Clowns on September 07, 2011, 07:19:06 pm
In other news, Pulitzer Prize winning author Cormac McCarthy was visited by the LAPD today after one of their detectives read his 2005 novel The Road.

The Road depicts a cataclysmic post-United States North America wherein a young boy and his father attempt to survive.

Police arrived at the reclusive author's southwest residence to ask whether he intended to produce a cataclysmic event or other terrorist activities.  The author calmly explained that a world where a fucking painting of a building is alarming is probably too alarmist, and whoever didn't laugh the call off entirely needs to seriously re-evaluate their ability to make a solid judgment.

Detectives following up with Mr. McCarthy promptly shot him for his radical views.
Title: Re: Financial fuckery thread
Post by: LMNO on September 07, 2011, 07:20:15 pm
I just wanted to make it clear that I do not support this kind of mindless bureaucracy; it's plainly obvious that this man was no threat, and a follow up was not needed.  Understanding why the did what they did is not the same as agreeing with it.

The beat cops should have talked to the guy, chuckled, and then arrested the accuser for harassment.
Title: Re: Financial fuckery thread
Post by: Adios on September 07, 2011, 07:20:43 pm
In other news, Pulitzer Prize winning author Cormac McCarthy was visited by the LAPD today after one of their detectives read his 2005 novel The Road.

The Road depicts a cataclysmic post-United States North America wherein a young boy and his father attempt to survive.

Police arrived at the reclusive author's southwest residence to ask whether he intended to produce a cataclysmic event or other terrorist activities.  The author calmly explained that a world where a fucking painting of a building is alarming is probably too alarmist, and whoever didn't laugh the call off entirely needs to seriously re-evaluate their ability to make a solid judgment.

Detectives following up with Mr. McCarthy promptly shot him for his radical views.


:mittens:
Title: Re: Financial fuckery thread
Post by: Cramulus on September 07, 2011, 07:26:26 pm
I had a reply typed up to each of the places you quoted and replied Cram but I lost it to electrons somehow.  Basically, what LMNO said. 

I know we're all "the police are always the bad guys" here in Discordia but if it's called in by another citizen, it's their job to check it out.  If it throws up certain flags, it's their job to forward it on for a follow up.


uhh I am definitely not in the "police are always the bad guys" camp.

One of my best friends is a cop. That's part of what makes me sensitive to shit like this. ((A few months ago he pulled over a guy "because it was my birthday and he had a really nice car and I was like what the fuck, I drive a piece of shit, whats his deal?"))

If you're protesting something, a lot of cops don't really care what the issue is... they've already put you in the same mental category as those annoying college kids they love throwing on the pavement.

I think we need law, I'm glad it's there, but I also think we have to be extra sensitive to the chilling effect it can have on free speech and democracy. I mean, in lots of countries they prevent real protests by having a bunch of cops show at the up first. The cops don't need to beat anybody or anything. People show up and they know what side everybody's on.
Title: Re: Financial fuckery thread
Post by: Adios on September 07, 2011, 07:28:22 pm
I had a reply typed up to each of the places you quoted and replied Cram but I lost it to electrons somehow.  Basically, what LMNO said. 

I know we're all "the police are always the bad guys" here in Discordia but if it's called in by another citizen, it's their job to check it out.  If it throws up certain flags, it's their job to forward it on for a follow up.


uhh I am definitely not in the "police are always the bad guys" camp.

One of my best friends is a cop. That's part of what makes me sensitive to shit like this. ((A few months ago he pulled over a guy "because it was my birthday and he had a really nice car and I was like what the fuck, I drive a piece of shit, whats his deal?"))

If you're protesting something, a lot of cops don't really care what the issue is... they've already put you in the same mental category as those annoying college kids they love throwing on the pavement.

I think we need law, I'm glad it's there, but I also think we have to be extra sensitive to the chilling effect it can have on free speech and democracy. I mean, in lots of countries they prevent real protests by having a bunch of cops show at the up first. The cops don't need to beat anybody or anything. People show up and they know what side everybody's on.

Yeah, that was a pretty broad brush stroke. I'm not in that camp either.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 07, 2011, 07:28:51 pm
Wasn't there a story recently about a guy who wrote a book about a murder, it made NY Times list, got the attention of someone who familiar with a cold case that resembled it and it turns out the guy was the murderer and the book explained it all?

Can't for the life of me remember who the guy was.
Title: Re: Financial fuckery thread
Post by: Adios on September 07, 2011, 07:30:52 pm
I think that was a movie on SyFy.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 07, 2011, 07:31:48 pm
Yeah.  Unfair broad brush.

A healthy questioning of executive authority is actually great and necessary.  
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 07, 2011, 07:32:17 pm
Quote
Personally, I'd be inclined to walk over and ask him what the hell he's thinking and that does he know that if he wasn't on the list before, he most certainly will be now. 

So essentially, you'd try to dissuade him from painting a picture by warning him that if you make too much noise, the jailers will hear him.

I'm trying to imagine this. I'm working in an office, and during my lunch break I see a guy with a painter's easel, painting my office building, except it's on fire.

I'd definitely be intrigued. I'd strike up a conversation, but not only out of interest, but definitely also to gauge how crazy this guy actually is and whether he's a threat. I mean, it's unlikely, but not unimaginable.

If, for some reason, I'd feel threatened, I don't think it's unreasonable to, like, ask him to make some sketches and perhaps finish off the burning part in his own studio at home. He'd be under no obligation to comply of course, due to free speech and all, but you can always ask, right?

It's just that, he'd basically just need to be good-natured and friendly about it, and I'd not feel threatened at all.

Not even if he'd be painting photorealistic imagery of everybody walking in and out of the building getting assraped by multi-dicked interdimensional tentacle demons.

Quote
And if it's called in and the cops don't check it out and run it down and be absolutely fucking SURE this guy is just a painter, when a bank comes down and it's found to be him (come on now, that's not too damn far fetched) then people will ask why the hell didn't the cops do their job and feel this guy out.

How do you confirm that somebody is "just a painter?" You run a background check? You ask to see his portfolio and count the bowls of fruit?

The guy isn't doing anything illegal. It may make some people that work at banks uncomfortable, but fuck, he's an artist, what is he supposed to do, write them a polite letter and ask them to stop?[/quote]

This is a good point. I hadn't really considered it before I read your post.

Basically the "God Hates Fags" people and numerous other idiots employ their right to free speech for much worse, much more threatening and ugly purposes.

Somebody painting banking office buildings hardly registers on that chart.

I still think it's reasonable to ask somebody to stop exercising their free speech if it really bothers you, and additionally for people to personally consider them dicks if they continue regardless or even amp up their efforts (compare to the "god hates fags" idiots).


That said, I also understand LMNO's reasoning, as well as share his not-being-in-support-of-this-kind-of-mindless-bureaucracy.



I know we're all "the police are always the bad guys" here in Discordia

Hey fuck you that is SUCH BULLSHIT.

Discordia is not anarchists, you know that very well.

I happen to really like my local police, because they do a pretty damn good job and are even more impressive at communicating with the neighbourhood (via Twitter and mailinglists and even Youtube, pretty awesome).

On the OTHER hand when I hear about the bullshit that caused the London Riots. Or whatever retarded story happened this week in the US, I think they're a bunch of cunts.

GUess what? Unlike YOU, I realize that they are not the same police, so your stupid drooling generalisation of "here in Discordia" that the police are "ALWAYS the bad guys" is the retarded and uninformed position, not mine ("here in Discordia").
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 07, 2011, 07:32:27 pm
I think that was a movie on SyFy.

No, this shit was RL.  I'll try and track it down in a bit.
Title: Re: Financial fuckery thread
Post by: LMNO on September 07, 2011, 07:32:38 pm
Wasn't there a story recently about a guy who wrote a book about a murder, it made NY Times list, got the attention of someone who familiar with a cold case that resembled it and it turns out the guy was the murderer and the book explained it all?

Can't for the life of me remember who the guy was.

(http://upload.wikimedia.org/wikipedia/en/4/4f/If_I_did_It_2.png)
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 07, 2011, 07:33:11 pm
Yeah.  Unfair broad brush.

A healthy questioning of executive authority is actually great and necessary.  

Oh okay good. Maybe, you know, *think* before you post next time.
Title: Re: Financial fuckery thread
Post by: Dysfunctional Cunt on September 07, 2011, 08:04:30 pm
I think there are probably about half as many honest, want to help people, want to make the world a safer better place cops as there are those who either joined for the power trip, have since joining gone on a power trip or just wanted an excuse to be an asshole and a badge to hide behind.

In any event, they are people and like any other monkey out there they can be anything on the line between awesome to asshole and everything in between.

I have friends who are police and there are also some officers out there I wouldn't piss on if they were on fire.  
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 07, 2011, 08:11:06 pm
I also think your ratio of "half" depends heavily on police training and police and society culture.
Title: Re: Financial fuckery thread
Post by: Dysfunctional Cunt on September 07, 2011, 08:30:16 pm
I also think your ratio of "half" depends heavily on police training and police and society culture.

Or possibly personal experience? 

Title: Re: Financial fuckery thread
Post by: Triple Zero on September 07, 2011, 08:42:49 pm
Oh of course, that too! :)
Title: Re: Financial fuckery thread
Post by: Dysfunctional Cunt on September 07, 2011, 09:38:21 pm
Oh of course, that too! :)

Unfortunately, thru no fault of my own other than really bad judgment in who I marry, my police experience is rather extensive.  :lulz:
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 07, 2011, 09:45:42 pm
a friend of mine got "rescued" by the police from a small gang of fuckheads, got a knife cut in his arm, next time he was held up by the police for not having a light on his bicycle, he was all about how great work they do and he wanted to tip her :-P :-P

(my friend's a bit crazy sometimes)
Title: Re: Financial fuckery thread
Post by: Dysfunctional Cunt on September 07, 2011, 09:50:46 pm
 :lulz:

Can you imagine tipping a cop after they write you a ticket?

 :lulz:
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 07, 2011, 09:53:29 pm
(my friend's a bit crazy sometimes)

but, yeah :lulz:


I think it was an awesome move, though.
Title: Re: Financial fuckery thread
Post by: Eater of Clowns on September 07, 2011, 11:56:41 pm
Especially when they beat your ass down for attempting to bribe them.

FUCK THA POLICE, VIVA DISCORDIA
Title: Re: Financial fuckery thread
Post by: Tiddleywomp Cockletit on September 08, 2011, 12:08:17 am
don't get me wrong, I hear what you're saying LMNO and agree that it's likely the case. But I can't figure out how I'd distinguish between unobjectional SOP and the cops trying to discourage people from expressing populist rage towards banks.

If Chase Bank were painting a picture of me on fire, I'd hope some plainclothes detectives followed up on it.  :p

They painted a picture of you homeless and standing in a soup line. No one investigated.

:mittens:
Title: Re: Financial fuckery thread
Post by: Tiddleywomp Cockletit on September 08, 2011, 12:26:20 am
There was a guy who wrote a book about school shootings a couple of years ago who said everybody has it all wrong with all this zero tolerance for shit like black clothing and metal music and empty threats. He said these kids are always raised in very conservative families and when the illusion of the Reagan Christ Way starts to wear thin and their whole reality is threatened and they see that they have no future, they flip. I can't remember the guy's name, dammit, maybe somebody here knows? It might have even been Cain who posted about it originally.

Artists who paint burning banks don't have Reagan bubbles to burst, I would think.
Title: Re: Financial fuckery thread
Post by: Placid Dingo on September 08, 2011, 07:38:16 am
There was a guy who wrote a book about school shootings a couple of years ago who said everybody has it all wrong with all this zero tolerance for shit like black clothing and metal music and empty threats. He said these kids are always raised in very conservative families and when the illusion of the Reagan Christ Way starts to wear thin and their whole reality is threatened and they see that they have no future, they flip. I can't remember the guy's name, dammit, maybe somebody here knows? It might have even been Cain who posted about it originally.

Artists who paint burning banks don't have Reagan bubbles to burst, I would think.

Although you'd then have cause to wonder why children of hippies don't have the same bubble pop explosion of rage and despair.
Title: Re: Financial fuckery thread
Post by: Cain on September 08, 2011, 02:44:01 pm
Concerning the first ammendment, it is actually legal to advocate the violent overthrow of the American government, as established in case law (and to the contrary of the likes of Obama and Holder, who considers it treason).  Therefore, even if the painter was advocating people to burn down the Chase bank, he was well within his rights.

However, this is a financial fuckery thread, not a constitutional fuckery thread, so on with the economic news!

http://www.bbc.co.uk/news/business-14839649

Quote
The carmaker Saab's application for protection from its creditors to help it avoid being pushed into bankruptcy has been rejected by a Swedish court.

In response, Swedish trade unions said they could demand that Saab be declared bankrupt within days.

Saab had applied for protection while trying to secure additional funding.

Saab had to suspend production in April when its suppliers stopped deliveries after not being paid. Its workers have also had their pay delayed.

Vanersborg district court rejected Saab's application because it did not believe it would work.

Blue-collar union IF Metall's leader, Stefan Lofven, said: "We will now thoroughly analyse the new situation. If the company doesn't find another solution or file a bankruptcy request themselves, we may be forced to do that in the next few days."

White-collar union Unionen's chief lawyer, Martin Wastfelt, said it might make a similar decision imminently.

"It's all about minimising the risks to secure our members' money," he said.

On Wednesday, Victor Muller, chief executive of Saab's owner, Swedish Automobile, said Saab's suppliers were owed some 150m euros ($210m; £131m).

http://www.bbc.co.uk/news/business-14835950

Quote
Major economies are likely to slow by the end of the year, the Organisation for Economic Co-operation and Development (OECD) has warned.

The OECD expects 0.3% growth in the UK in the last three months of the year, but said the economy could contract by as much as 1% amid high uncertainty over its projections.

It predicts the Group of Seven largest economies will grow by just 0.2%.

The OECD said Germany could be most affected by a downturn in global trade.

It estimated the German economy would contract by 1.4% in the last quarter of 2011.

The OECD's GDP figures are both seasonally adjusted and account for inflation.

They also have a wide margin of error - for example, it said its German estimate may be out by up to 2.1 percentage points either way.

It said: "Consumer and business confidence fell in major OECD economies on the back of weak incoming data, gridlock over fiscal policy in the US, the euro area sovereign debt crisis and growing concern that there is less policy ammunition to offset further weaknesses."

http://www.bbc.co.uk/news/education-14823042

Quote
Nearly a quarter of UK engineering graduates are working in non-graduate jobs or unskilled work such as waiting and shop work, a report suggests.

The study says it is "not easy or automatic" for qualified engineers to find related employment in the UK.

Employers and industry leaders have repeatedly raised concerns about a lack of good quality science and engineering graduates.

But research from Birmingham University research challenges this viewpoint.

The report - entitled Is there a shortage of scientists? - is being presented to the British Educational Research Association (Bera) annual conference in London on Thursday.

It analysed figures from 1986 to 2009 from the Higher Education Statistical Agency on the proportions of engineering students entering related jobs, other professions or work that did not require a degree in 2009.

The findings suggest that less than half (about 46%) of 2009 engineering graduates were in jobs directly related to their degree subject six months after leaving university.

About one in five (20%) were employed in roles that were not directly related to their degree and about one in four (24%) were in "non-graduate" employment, for example working as waiters or in shops.

The report says: "Perhaps, because of recent initiatives, there seem to be too many people studying science for the labour market to cope with, or perhaps graduates are no longer of sufficient quality.

"It is more likely, however, that all of these scientists are without relevant employment every year because the shortage thesis is wrong and there are no jobs waiting for all of them or because they are 'dropping out' having learnt that they do not enjoy their subject areas."

http://www.bbc.co.uk/news/business-14827742

Quote
Italy and Spain have passed new austerity measures as they battle to control their debts.

Italy's upper house of parliament approved an austerity package which should cut its deficit by some 54bn euros ($70bn, £44bn) over three years.

Spain's Senate gave final approval to a "golden rule" in its constitution to keep future budget deficits to a strict limit.

On Wednesday, Greece also stepped up its austerity plans.

The Italian Senate voted 165-141 with three abstentions to approve the package, which was put to a confidence vote to make sure Prime Minister Silvio Berlusconi's allies united behind the government after weeks of argument.

The package now goes to the lower Chamber of Deputies, where Mr Berlusconi also has a majority.

Tens of thousands of Italians took to the streets on Wednesday for a day-long strike against the measures, which include a rise in sales taxes and a revised wealth tax.

Meanwhile, Spain's vote for a "golden rule" makes it the only country apart from Germany to have such a limit.

Under the change, Spain must stick to a long-term deficit cap except in times of natural disaster, recession, or extraordinary emergencies.

The moves come amid a mood of increasing urgency within the eurozone to act to solve the debt crisis.

Also on Wednesday, Greece stepped up its deficit reduction plans in the face of accusations it was stalling and France approved a 12bn euro package of budget savings, largely by clamping down on tax breaks.

And in another sign of movement, Germany's highest court ruled that aid for Greece and other rescue packages is legal.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 08, 2011, 03:23:18 pm
I was just discussing something with my old boss (who's now in a different position here) about how he and the guys he's worked with and around for the last 30 years are looking at the current state of things, their own positions and plans for retirement, their ability to fund their retirement.  They're looking at it and deciding not to retire when people their age would have historically.  They're staying in their jobs and holding onto them any way they can.  These are industry professionals, guys who've been in their field since their 20's.  Engineers, Electricians, Plant Managers and the like.

It occurred to me that this one simple thing, that the largest generation of people in the work force, the baby boomers, deciding not to retire "on time" can be a potential catastrophic ripple for the next 20 years.

If the boomers are systematically delaying their retirement from these jobs then no new positions are opening up to the people who came in after them.  There is no upward mobility in these major and minor industry jobs.  The guy who came in as an apprentice 10 or 20 years ago will stay there for another 20 and his position will not be vacant for a younger person, out of college, to move into.

In a boom time this would not likely be as much of a problem.  New companies would sprout up in answer to demand for employment, products, services, know-how and competition in pricing and delivery.  

It's most certainly NOT a boom time, but a recession with no hope on the horizon of it abating anytime soon, combined with the boomers retirement decade beginning.  I think that one thing, the decision not to retire for another 10 years or until their health prevents them from working will have a major effect on when we're able to pull the nose of this plane back to a level horizon.

Thoughts on this are more than welcome.  I hadn't really considered it before he brought it up.  My thoughts were always toward the drain that will happen when the greatest generation DOES retire and pull their money from the markets and begin collection SS en mass.  After some consideration, I believe this would produce the worse of the two outcomes.
Title: Re: Financial fuckery thread
Post by: Cain on September 08, 2011, 03:30:15 pm
I actually read something about this the other day.  It was from someone who had been planning on retiring, but because his pension plan had been gambled away by...well, someone, he wouldn't be able to live on what he was going to actually get, and so had decided to stay on and work for a few more years.

And he said the consequences would be exactly the same as you outlined.  No upward mobility in jobs, less vacant positions and, when they do retire, due to the demographics and the current economic crisis, a huge strain on government resources. 

It's a depressing thought.  I'm just glad I've escaped all that, for now, and finally landed on my feet.  Many others will not be so lucky.
Title: Re: Financial fuckery thread
Post by: Adios on September 08, 2011, 03:38:34 pm
And at the same time the right wingers claim that all the retiring Boomers will overload the Social Security system and that because of this it should be shut down.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 08, 2011, 03:54:57 pm
And at the same time the right wingers claim that all the retiring Boomers will overload the Social Security system and that because of this it should be shut down.

And the left wingers are in denial that it can be kept liquid throughout the next 30 years while still increasing the amount paid out per person.

It's clear SOMETHING has to be done, and that something should not include, IMO, pushing the tax burden onto the current generations of workers.  We're strapped as it is, the ones of us who HAVE jobs and are holding onto them with two hands and our teeth.
Title: Re: Financial fuckery thread
Post by: Adios on September 08, 2011, 03:57:06 pm
And at the same time the right wingers claim that all the retiring Boomers will overload the Social Security system and that because of this it should be shut down.

And the left wingers are in denial that it can be kept liquid throughout the next 30 years while still increasing the amount paid out per person.

It's clear SOMETHING has to be done, and that something should not include, IMO, pushing the tax burden onto the current generations of workers.  We're strapped as it is, the ones of us who HAVE jobs and are holding onto them with two hands and our teeth.


I don't know that this discussion belongs in this thread, but I will be happy to discuss it with you in another thread.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 08, 2011, 04:01:06 pm
And at the same time the right wingers claim that all the retiring Boomers will overload the Social Security system and that because of this it should be shut down.

And the left wingers are in denial that it can be kept liquid throughout the next 30 years while still increasing the amount paid out per person.

It's clear SOMETHING has to be done, and that something should not include, IMO, pushing the tax burden onto the current generations of workers.  We're strapped as it is, the ones of us who HAVE jobs and are holding onto them with two hands and our teeth.


I don't know that this discussion belongs in this thread, but I will be happy to discuss it with you in another thread.

Yeah I was actually going to write a foot note to that post along the lines of not wanting to muck up the thread in a SS discussion with you.  I'd be interested to hear your thoughts on it.  Not sure where though or how much time I can spend today talking about it.  I'm a bit swamped at the moment and have about filled up my "fuck off online" tank for the day.
Title: Re: Financial fuckery thread
Post by: Adios on September 08, 2011, 04:18:05 pm
The American banking sector apparently is going to be vastly different when it finally emerges from the financial crisis that took hold more than three years ago. It is going to be significantly smaller, and the domination of a relative handful of behemoth institutions is going to increase.

At the end of June, there were 7,522 commercial banks, down from 8,542 on Dec. 31, 2007. That is a decline of nearly 12 percent in just three and a half years. Of the more than 1,000 banks that disappeared, about 370 failed. But the rest of the decrease came through mergers and acquisitions as a decades-long pattern of consolidation continued.

Most banks in the United States still are fairly small. The median size of a bank at the end of June, according to an analysis of statistics from the Federal Deposit Insurance Corp. was about $155 million in assets. That’s about an 18 percent increase since the end of 2007.

But those numbers seriously skew the nature of the industry. Of the more than $13.6 trillion in assets held by banks at the end of June, nearly $9.4 trillion is in the hands of just 37 institutions, each with more than $50 billion in assets. And of that, $5.5 trillion is held by just four banks: JPMorgan Chase, Bank of America, Citibank and Wells Fargo. Each of those have more than $1 trillion in assets. In other words, the U.S. banking industry resembles a tall cake, with a very thick layer of icing on top.

http://www.msnbc.msn.com/id/44426180/ns/business-stocks_and_economy/#.Tmjbi-zlhQ0



Well this isn't good at all. That is an immense amount of power in the hands of very few.
Title: Re: Financial fuckery thread
Post by: Cain on September 08, 2011, 04:42:23 pm
Bloomberg is reporting that Standard & Poors is giving subprime mortgages a AAA rating...in other words, the junk loans which helped cause the financial crisis are, according to S&P, a better investment than US government bonds  :lol:
Title: Re: Financial fuckery thread
Post by: Adios on September 08, 2011, 04:45:25 pm
Bloomberg is reporting that Standard & Poors is giving subprime mortgages a AAA rating...in other words, the junk loans which helped cause the financial crisis are, according to S&P, a better investment than US government bonds  :lol:

Isn't that a case of them protecting their own?
Title: Re: Financial fuckery thread
Post by: Cain on September 08, 2011, 06:02:58 pm
It shows S&P's calculators are fucked up.

Also, this is depressing

http://www.project-syndicate.org/commentary/roubini41/English

Quote
Nor could monetary policy help very much. Quantitative easing is constrained by above-target inflation in the eurozone and UK. The US Federal Reserve will likely start a third round of quantitative easing (QE3), but it will be too little too late. Last year’s $600 billion QE2 and $1 trillion in tax cuts and transfers delivered growth of barely 3% for one quarter. Then growth slumped to below 1% in the first half of 2011. QE3 will be much smaller, and will do much less to reflate asset prices and restore growth.

Currency depreciation is not a feasible option for all advanced economies: they all need a weaker currency and better trade balance to restore growth, but they all cannot have it at the same time. So relying on exchange rates to influence trade balances is a zero-sum game. Currency wars are thus on the horizon, with Japan and Switzerland engaging in early battles to weaken their exchange rates. Others will soon follow.

Race

to

the

bottom
Title: Re: Financial fuckery thread
Post by: Adios on September 08, 2011, 06:05:21 pm
It shows S&P's calculators are fucked up.

Also, this is depressing

http://www.project-syndicate.org/commentary/roubini41/English

Quote
Nor could monetary policy help very much. Quantitative easing is constrained by above-target inflation in the eurozone and UK. The US Federal Reserve will likely start a third round of quantitative easing (QE3), but it will be too little too late. Last year’s $600 billion QE2 and $1 trillion in tax cuts and transfers delivered growth of barely 3% for one quarter. Then growth slumped to below 1% in the first half of 2011. QE3 will be much smaller, and will do much less to reflate asset prices and restore growth.

Currency depreciation is not a feasible option for all advanced economies: they all need a weaker currency and better trade balance to restore growth, but they all cannot have it at the same time. So relying on exchange rates to influence trade balances is a zero-sum game. Currency wars are thus on the horizon, with Japan and Switzerland engaging in early battles to weaken their exchange rates. Others will soon follow.

Race

to

the

bottom

Like an elevator in a 30 story free fall.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 08, 2011, 06:20:37 pm
It shows S&P's calculators are fucked up.

Also, this is depressing

http://www.project-syndicate.org/commentary/roubini41/English

Quote
Nor could monetary policy help very much. Quantitative easing is constrained by above-target inflation in the eurozone and UK. The US Federal Reserve will likely start a third round of quantitative easing (QE3), but it will be too little too late. Last year’s $600 billion QE2 and $1 trillion in tax cuts and transfers delivered growth of barely 3% for one quarter. Then growth slumped to below 1% in the first half of 2011. QE3 will be much smaller, and will do much less to reflate asset prices and restore growth.

Currency depreciation is not a feasible option for all advanced economies: they all need a weaker currency and better trade balance to restore growth, but they all cannot have it at the same time. So relying on exchange rates to influence trade balances is a zero-sum game. Currency wars are thus on the horizon, with Japan and Switzerland engaging in early battles to weaken their exchange rates. Others will soon follow.

Race

to

the

bottom

While the reasons he gives for depreciation not being feasible are spot on and currency wars have been in the making for some time, deflation is still exactly the bitter pill the we are going to have to swallow before we'll ever dig out of this.

The idea that deflation is to always be avoided, even at the cost of artificial inflation is, IMO, a seriously flawed monetary policy position. 

Of course, wages would have to remain level but since wages have never even come close to matching the inflation created since Bretton-Woods fell apart I'd say a healthy bout of deflation to return property value and commodities back to prices that are realistically within range of your average person being able to purchase them can only be for the good as you'll see the surplus housing begin to be bought up and people re-enter the market because of the buying power they'll see return to their monthly balance sheet.


Title: Re: Financial fuckery thread
Post by: Cain on September 08, 2011, 06:34:51 pm
Agreed.  It's the currency war aspect that worries me most...that has a potential to get out of hand very quickly.  A good bout of deflation certainly will help, so long as wages relatively rise against it, but I can just see someone deciding to go overboard with it and ruining the whole system for everyone.

Probably Germany, the way things are going.  Fucking Germans.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 08, 2011, 06:46:48 pm
Agreed.  It's the currency war aspect that worries me most...that has a potential to get out of hand very quickly.  A good bout of deflation certainly will help, so long as wages relatively rise against it, but I can just see someone deciding to go overboard with it and ruining the whole system for everyone.

Probably Germany, the way things are going.  Fucking Germans.

 :lulz:

Pickle: only 2 generations removed from Prussia.

But regarding that possibility, with what is already a very hot economy and discussions about abandoning the Euro, they'd start seeing white hot inflation worse than China is seeing and be forced to cool it with interest rates and deflation of their own or see their own (potential) currency begin to resemble Weimar's. 

That'd learn 'em. 


Maybe.
Title: Re: Financial fuckery thread
Post by: Cain on September 09, 2011, 09:23:27 am
Given Germany's atrocious step backwards in race relations recently, I would say Germany is determined not to heed the lessons of the 1920s, on any level.
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 10, 2011, 11:40:11 am
Share of Income Gains by Quintile - Great Depression til Now (http://www.nytimes.com/imagepages/2011/09/04/opinion/04reich-graphic.html?ref=sunday)
Title: Re: Financial fuckery thread
Post by: Cramulus on September 12, 2011, 05:32:17 pm
Finally, some fucking bank reforms.

http://www.reuters.com/article/2011/09/12/us-britain-banks-idUSTRE78B12420110912

UK Banks are going to be required to separate their retail banking (banking for individuals and corporations) from their risky gambling adventures.
It also looks like multinational banks will have to adopt this structure to trade in the UK.


Fuck yeah.
Title: Re: Financial fuckery thread
Post by: Cain on September 12, 2011, 05:53:42 pm
Wont fly until 2015, though.

By which point we will probably have suffered through yet another economic crash.

It is good news, don't get me wrong, I just worry that, because a Tory government was heavily involved in this, and certain high-ranking Tories were engaged in helping to flog subprime loans, that there will be loopholes and exceptions.  I'll read up more on it, however, before saying anything for sure.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 09:43:32 am
The real joke is the amount of fuss being made over securing retail banking by the banks. It'll destroy our ability to compete! We need that money! Bla bla bla.

The FT are running an article this morning which praises the banking reform (alongside one by their banking editor which says it is a waste of time, weirdly). The bit which really jumped out at me was this:

"The ICB puts the annual cost to banks around £6bn. This is modest as a share of banks’ assets (0.1 per cent)."

I was talking about this with friends the other week and guessed that retail banking would make up less than one per cent of the banks assets, because the numbers involved in investment banking were so huge. My friend thought I was being hopelessly harsh on them; surely it'd be at least 10% of the bank. And that could really hurt to have to secure!

 :lulz:

I've downloaded the Vickers report... seems like it'll be heavy reading, but it also sounds like the vast majority of really good reforms just aren't being reported in the media. Which isn't surprising; it is a 350+ page document.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 11:57:54 am
Also, French banks are tumbling - BNP Paribas (which is the biggest, apparently) lost 12% of their share price yesterday and 6% this morning because Greece is now expected to default, and people think that the bank will be unable to finance themselves should Greece renege on their debt. Other French banks lost some (Societe General lost almost 3% and Credit Agricole 0.6%), with more losses expected.

I'm not so up on the French economic situation or what they had to do the last time around, but when Greece goes down, it looks likely (to my inexpert eye) that the French government - or some other agency - will need to step in to bail out BNP Paribas. If they don't, it will go bust... and I suspect that'll start the house of cards falling, because my understanding is that all the banks are incestuously linked through debts to each other, and if the biggest French bank goes, others will go with it... some will only be weakened by the initial collapse, but as more go, it'll add up and up and...!

Exciting times! Greece is expected to collapse at the end of the month, though they claim they can hold out to October. It'll be fascinating to see how this all winds up.

As an interesting point, some of my colleagues at work asked exactly what would happen if Greece defaults. I explained that they wouldn't be able to make pay for their public sector, pensions etc... but I'm not exactly certain what happens with other things. The infrastructure still exists. Presumably the government will try to carry on as much as possible. If the bank you borrowed to buy your house from goes under, presumably that debt is written off? I can't see anyone turfing Greek citizens out of their homes so that they can become the property of whoever was owed money by the prior bank, though I can see that being what may be meant to happen.

I've been trying to find out what exactly the process is. I understand that European officials are going in today to help prepare for a 'controlled default' so maybe we'll hear more about what that entails over the next few days.
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 12:38:50 pm
Ambrose Evans-Pritchard is being apocalyptic in the Telegraph again; though to be fair he is being much less heated in his rhetotic than German EU officials:

Quote
Germany’s EU commissioner Günther Oettinger said Europe should send blue helmets to take control of Greek tax collection and liquidate state assets. They had better be well armed. The headlines in the Greek press have been "Unconditional Capitulation", and "Terrorization of Greeks", and even “Fourth Reich”.

This is utterly insane.  There are two and only two options for the EU: unite as a single state, at the very least on financial terms, and undertake the necessary measures of job stimulus, bank breakups and sovereign debt consolidation (which will of course necessitate a larger pool of funds for the EU to draw from) or break the EMU up entirely and set back EU relations by 20 years, at least.

Just imagine the reaction in America if one of Obama's economic advisors recommended sending in troops to, say, California, to enforce austerity.  This is the level of insanity being proposed by Oettinger.

And BNP Paribas' woes can be tied directly to German insanity towards Greece.  Apparently, Germany is acting in precisely this way in order to make Greece submit to even further demands for austerity.  Its destabilizing entire global markets to try and coerce the Greeks into a financial plan which wont work anyway and makes their default even more likely.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 01:10:55 pm
There won't be popular support for closer integration. The publics of the various European countries are basically still locked in an Us vs Them mentality when it comes to everyone else. Particularly the UK and... well, everyone. French bans on UK product and tabloid screaming about British Jobs for British Workers spring to mind.

So... that leaves breaking up and the collapse of relations. But that doesn't help the situation; that's just a consequence. The international banks are all so tied into these markets that European countries allowing their neighbors to collapse just means that they drift closer to it themselves. People are already saying that France is probably going to have to recapitalize their banks when Greece falls. Greece is comparatively tiny. What is going to happen when it looks like Italy is going?
Title: Re: Financial fuckery thread
Post by: Faust on September 13, 2011, 01:46:06 pm
Then there is the option of the schizm...

Any country wealthy enough, or with enough resources & political sway become the new EU, Germany France England would be a given, ireland would probably make it in despite its weak economy because we have proven to be useful in diplomatic relations where GFE would otherwise have a door slammed in their face.

Then it creates a lower tier EU with failing debts and its own currancy, they will try and sell it as countries working towards having the economic strength to sit at the big boys table, all the while meaning we exploit their resources like we did to poland and slovakia until they become too expensive to use any more.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 01:52:35 pm
I can't see the UK giving up the pound.

It isn't doing great, but we have no incentive to give up control of our own currency, and very little to unite our economy with that of other countries; that is what has gotten them into this mess! They are different economies with different needs, united with a single currency, but without the political integration needed to function properly.

I saw the notion of a 'strong' and 'weak' Euro floated on the FT a couple of weeks back, where the strong nations break away from the weaker nations, but it is still just a temporary measure. As long as the constituent countries continue to act as individual countries rather than united as a single nation, their economies will need different measures taken at different times, and any attempt at a single currency will fail. There simply isn't the desire in Europe for all our different nations to be subsumed into a singular state.
Title: Re: Financial fuckery thread
Post by: Faust on September 13, 2011, 02:07:32 pm
It's not something Ireland would be interested in anyway, we refuse to give up our nutrality and if we were part of one state making military decisions that ceases to exist by default.
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 02:33:51 pm
There won't be popular support for closer integration. The publics of the various European countries are basically still locked in an Us vs Them mentality when it comes to everyone else. Particularly the UK and... well, everyone. French bans on UK product and tabloid screaming about British Jobs for British Workers spring to mind.

So... that leaves breaking up and the collapse of relations. But that doesn't help the situation; that's just a consequence. The international banks are all so tied into these markets that European countries allowing their neighbors to collapse just means that they drift closer to it themselves. People are already saying that France is probably going to have to recapitalize their banks when Greece falls. Greece is comparatively tiny. What is going to happen when it looks like Italy is going?

That parochial attitude has been allowed to fester by European elites, who basically belittled and condescended to those opposed to the larger EU projects on nationalistic grounds.  I'm fairly in favour of intergration in principal, and even I'd concede that the response to nationalists has been along the lines of "bitter people clinging to guns and god flags and history".

The message that should've been sent is this: the countries that are going to dominate the future are large.  Very large.  China, India, USA and Russia large (theoretically Indonesia too, in the far future).  No European country, on its own, can compete with that.  The largest state in Europe is Germany, and that is not even half the population size of Russia, a massively underpopulated country that also has the advantage of owning territory from the Baltic through to the Pacific.  Now, if we want to have a say in the future, and not merely be historical amusement parks and vassals to these emerging powers, we have one simple choice: unite.  It's unite or submit to de facto foreign control.  Yes, all European countries will, as a result, have less autonomy among themselves, less control over their own futures, be tied permamently to the fortunes of other states.  But it's better to have a portion of a say in Brussels, than have no say in policies from Beijing, Moscow and Washington.

But I suspect that it is far too late for this kind of argument now.
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 02:36:03 pm
Then there is the option of the schizm...

Any country wealthy enough, or with enough resources & political sway become the new EU, Germany France England would be a given, ireland would probably make it in despite its weak economy because we have proven to be useful in diplomatic relations where GFE would otherwise have a door slammed in their face.

Then it creates a lower tier EU with failing debts and its own currancy, they will try and sell it as countries working towards having the economic strength to sit at the big boys table, all the while meaning we exploit their resources like we did to poland and slovakia until they become too expensive to use any more.

In the long run, I see any kind of schism eventually going all the way down, to the nation-state level.

It may take a couple of decades, but I can only see a two-tier level as a temporary stage, so long as national interests trump cooperation.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on September 13, 2011, 02:38:55 pm
Then there is the option of the schizm...

Any country wealthy enough, or with enough resources & political sway become the new EU, Germany France England would be a given, ireland would probably make it in despite its weak economy because we have proven to be useful in diplomatic relations where GFE would otherwise have a door slammed in their face.

Then it creates a lower tier EU with failing debts and its own currancy, they will try and sell it as countries working towards having the economic strength to sit at the big boys table, all the while meaning we exploit their resources like we did to poland and slovakia until they become too expensive to use any more.

In the long run, I see any kind of schism eventually going all the way down, to the nation-state level.

It may take a couple of decades, but I can only see a two-tier level as a temporary stage, so long as national interests trump cooperation.

We always go nationalistic at the beginning of a century.  You can set your fucking watch to it.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 02:45:08 pm
Quote from: Cain
That parochial attitude has been allowed to fester by European elites, who basically belittled and condescended to those opposed to the larger EU projects on nationalistic grounds.  I'm fairly in favour of intergration in principal, and even I'd concede that the response to nationalists has been along the lines of "bitter people clinging to guns and god flags and history".

The message that should've been sent is this: the countries that are going to dominate the future are large.  Very large.  China, India, USA and Russia large (theoretically Indonesia too, in the far future).  No European country, on its own, can compete with that.  The largest state in Europe is Germany, and that is not even half the population size of Russia, a massively underpopulated country that also has the advantage of owning territory from the Baltic through to the Pacific.  Now, if we want to have a say in the future, and not merely be historical amusement parks and vassals to these emerging powers, we have one simple choice: unite.  It's unite or submit to de facto foreign control.  Yes, all European countries will, as a result, have less autonomy among themselves, less control over their own futures, be tied permamently to the fortunes of other states.  But it's better to have a portion of a say in Brussels, than have no say in policies from Beijing, Moscow and Washington.

But I suspect that it is far too late for this kind of argument now.

Yeah, sorry if I wasn't clear - I would personally be in favour of a united Europe. Partly because I would like to see Nick Farrage's head explode, but mostly because I think it is the most sensible way to combat the major issues of the day. We need to completely restructure the global economy and fight climate change - two things which need the world (or at least, most of it) to act in unison, which would be much easier with a united Europe.

But like you say, and I agree, it is almost certainly too late for that. Individual European countries see each other as competitors at best, enemies at worst. The EU is a massively bureaucratic, corrupt and entangled mess ... and we don't have any credible politicians standing up to make the case for a united Europe, or any plan as to how to get there.

I think politicians tried to sneak it in by the back door, incrementally. I really don't think it has helped at all. We're going to eat each other, I think, over the next couple of years... and in about ten years time, the nationalists will be looking around at the ruin of what was Britain... and probably trying to find a way to blame it on the Europeans.
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 02:52:39 pm
I thought you would agree.  I just had to vent - between idiotic elites and short-sighted nationalists, we're fucking our only decent chance to have any say in future global affairs.  It's not like the UK is going to resurrect the empire anytime soon, is it?  Why else should anyone listen to us?  Because of our vast, impressive, half-mythological history?  Because we consider ourselves to be so important?  Hah, hardly.  The Chinese will buy our castles, the Indians will write our history (and probably more accurately than we do), the Americans will control our military and the Russians will control our energy resources.

We're fucked from several dozen different directions, and those who are supposedly the most "patriotic" and concerned about national prestige are doing their utmost to consign us to the dustbin of history.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 02:57:08 pm
Yeah.

About three years ago we had a discussion about this in one of my classes. It was interesting. The only reason we could come up with for why the UK is important is the size of our economy - we're far larger than we should be per capita and that lets us punch above our weight. We put our faith in the ability of the noble British entrepreneur to keep that alive.

 :lulz:
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 03:14:24 pm
I'd go a little further - size of economy, nukes and UNSC council seat.

Here are the problems though:

The UK economy is substansially bolstered by a massively outsized financial sector which is far larger for our GDP and population in comparison with almost every other developed country.  I'm fairly certain that in this case, correlation is causation, and that an outsized financial sector led to our improved economic standing - however, that standing was largely an illusion built on free credit and bad loans, as we've subsequently discovered, and increases our exposure to systemic risks in the international financial system, which is possibly the most complex man-made system in existence, and so prone to distressing and unpredictable interactions.

The United Nations was effectively gutted in 2003, when two UNSC members showed they could defy the other three without repurcussions.  It had been limping along for a while before that, but was effectively rendered impotent by this reckless display of power.  That the UK was one of the two involved in that only makes the irony delicious.  UK diplomacy is massively distrusted, and the Libyan debacle has only reinforced this opinion in Russia and China, who regretted giving the UK and France the benefit of the doubt when they did.

Our nuclear weapons are basically too expensive, especially since we don't even have an independent program (America retains the ultimate controls on at least part of our arsenal).  There is also an increasing consensus among national-security specialists, especially Cold Warriors like Henry Kissinger(!) that the risks of nuclear weapons are starting to outweigh the benefits, and that stockpiles must be reduced, and immediate response capacities taken off-line, among the UNSC Five at the very least.  In conjunction with controls on fissile material that are being floated, I see nuclear weapons becoming an outmoded method of gaining prestige, much in the way imperialism failed to confer prestige in the post-WWII world.

Our only other strategic advantage was being in the EU but not overly commited to the cause.  This was only useful so long as the USA could use the UK as a trojan horse, to make EU policies benefit the UK and America without allowing the appearance of a potential political bloc with enough power to challenge American policies on the world stage (ie a politically unified Europe).  Now America is too broke to care, and the EU will likely cease to exist.  Which leaves the UK up shit creek with no paddle. 
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 13, 2011, 03:17:27 pm
Wow... yeah. The other points were raised then too; I just forgot. But, seeing it spelled out like that...

Damn.

Thanks for the analysis Cain.
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 03:19:29 pm
I could go further and talk about our descent into a counterintelligence state of the kind that would make East Germany blush, our failing energy infrastructure and the North Sea oil running out, increased costs from environmental disasters due to drastically underfunding flood defence....but I think the above spells it out.

We need a unified Europe.  Otherwise we're just Belarus with ipads.
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on September 13, 2011, 04:06:52 pm
If the bank you borrowed to buy your house from goes under, presumably that debt is written off?
Your loan would be sold and the proceeds would be used to help settle the bank's debts.  You would continue making your monthly payments to the new loan holder.
Title: Re: Financial fuckery thread
Post by: PopeTom on September 13, 2011, 06:36:10 pm
If the bank you borrowed to buy your house from goes under, presumably that debt is written off?
Your loan would be sold and the proceeds would be used to help settle the bank's debts.  You would continue making your monthly payments to the new loan holder.

You will never be let off the hook.  When you die the hook will be passed along to your heirs.
Title: Re: Financial fuckery thread
Post by: Cain on September 13, 2011, 06:52:00 pm
Or your friends.

Check about 20 pages back, there is even a link for it.
Title: Re: Financial fuckery thread
Post by: Cain on September 15, 2011, 12:33:28 pm
http://www.bbc.co.uk/news/business-14927432

Quote
Police in London have arrested a 31-year-old man in connection with allegations of unauthorised trading which has cost Swiss banking group UBS an estimated $2bn (£1.3bn).

He was detained in the early hours of Thursday and remains in custody.

UBS shares fell 8% after it announced it was investigating rogue trades which would mean the bank making a loss for the third quarter of 2011.

The Swiss bank said no customer accounts were affected.

A spokesman for City of London Police, which is responsible for the city's financial district, said: "We can confirm we arrested a 31-year-old man at 3:30am on suspicion of fraud by abuse of position."

In a letter to its 65,000 staff, UBS said: "The matter is still being investigated, but UBS's current estimate of the loss on the trades is in the range of $2bn.

"It is possible that this could lead UBS to report a loss for the third quarter of 2011. No client positions were affected.

"While the news is distressing, it will not change the fundamental strength of our firm.

"We urge you to stay focused on your clients, who are counting on you to guide them through these uncertain times," the bank said.

ZKB trading analyst Claude Zehnder said the news would damage confidence in UBS. "They obviously have a problem with risk management.

"With this they are losing a lot of credit that they had regained with effort."

UBS was rescued by the Swiss state in 2008 following huge losses on toxic assets held by its investment bank.

It then became embroiled in a serious tax evasion dispute with US authorities and was forced to hand over 300 client names and pay a $780m fine. There was then a second case in which it agreed to hand over data on 4,450 American clients.

UBS declined to say in which department, or country, the rogue trader operated. However, there is already speculation that the losses may have occurred in foreign exchange trades.

Earlier this month, the Swiss Central Bank shocked the markets by capping the franc against the euro at 1.20 francs. The move sent the franc-euro exchange rate up 10%, and it is rumoured that some traders lost money.
Title: Re: Financial fuckery thread
Post by: Cain on September 15, 2011, 12:38:01 pm
http://www.bbc.co.uk/news/business-14930126

Quote
The European Commission has predicted that economic growth in the eurozone will come "to a virtual standstill" in the second half of 2011.

It halved its forecast for July to September to growth of just 0.2%, while the forecast for the last three months of the year is down from 0.4% to 0.1%.

The commission blamed financial market problems over the summer as well as weakening demand from outside Europe.

But it remained confident that there would not be a return to recession.

"Recoveries from financial crises are often slow and bumpy. Moreover, the EU economy is affected by a more difficult external environment, while domestic demand remains subdued," EU Economic Affairs Commissioner Olli Rehn said at a news conference to unveil the report.

"The sovereign debt crisis has worsened, and the financial market turmoil is set to dampen the real economy."
'Integral part'

The report predicted that member states having to cut back on their spending to reduce their debt would also hit growth.

One of the countries currently cutting back its spending is Greece, which reiterated on Wednesday that it was determined to meet all the deficit reduction plans it has agreed to in exchange for its two bailouts.

There were supportive comments from eurozone leaders towards Greece on Wednesday, which boosted the stock markets on Thursday.

Eurozone leaders said Greece was an "integral" part of the eurozone.

Greece is set to receive the next loan from its initial EU and International Monetary Fund bailout later this month, but it will get this only if inspectors from the EU, European Central Bank and IMF agree that it is keeping up with its spending cut targets.
Title: Re: Financial fuckery thread
Post by: Adios on September 15, 2011, 02:19:00 pm
Global economics still appear to be built on a mountain of ice, and still sliding towards the bottom.
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on September 15, 2011, 05:12:38 pm
That UBS trader guy was dumb.  If, rather than costing UBS money while not affecting client accounts, he had made UBS money while trashing client accounts, he probably have been promoted rather than arrested.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 16, 2011, 07:14:11 pm
http://video.cnbc.com/gallery/?video=3000046094

Transcript of the video below, I added occasional line breaks to make it easier to read.

This thing's about to fall apart.

Quote
let's go to cnbc's michelle caruso-cabrera who's in  southwestern poland where treasury secretary tim geithner is meeting with european finance ministers. 

reporter: we heard earlier that during the news conference that the next tranche of the greek bailout would happen sometime in october if greece met all the requirements for the  lenders of last resort. we've just seen on the dow jones news wires, they are quoting an anonymous greek official speaking somewhere on the sidelines that apparently that is a bit late for the greeks and  that they may need to tap an emergency stability fund early because they are running short of cash.

they'd already said they would be running short of cash by  early october. let me show you why. from january to august of this  year, greece has actually run a bigger deficit than they did last year, 18.1 billion euro this is year compared to a year ago at this time, they only had a deficit, only, of 14.8 euros.  why? because they're spending in that time period, believe it or not, has gone up by 8.1%.

last year at this time, they'd only spent roughly 44 billion. by now, they have spent 47 billion this year. in the meantime, because of year  three of the recession, their revenues are down. i've done these calculations. they're spending roughly 1.35 billion a week. but they only bring in .87 billion of revenue a week. so they are always running about a half billion short every week. they're saying if they don't get  this next tranche, they're going to have to tap some emergency fund because they are literally going to struggle to make payroll. 

the precipitating event that would lead to a default, probably not until december when they have a next big installment. but they do have on september 23rd, for example, a 2 billion euro rollover which imagine that everybody would let all of this fall apart over just 2 billion euros. but that's the situation right now. guys, back to you. thank you very much, michelle. stick around.

we're going to talk more about this poland summit, what it means for investors around the world. joining us is louise cooper, market analyst at bgc partners in london. and at the new york stock exchange, simon hobbs of cnbc. and we're joined in the studio here by steve liesman. louise, the markets seem to have been signaling, the equity markets, at least, this week that the worst is unlikely to eventuate. they seem cheered by what they see and even today that way. do you feel that way?

no.  i'm afraid i don't. we have that big central bank intervention yesterday where they said, we're going to act together to help banks borrow short-term dollar money. so the equity markets went, hey! if you go to one of the wholesale dealing desks here,  you'll find out it's made no difference and the interbank lending rate in europe increased this morning and was a higher level than yesterday. so it is good news that all the central bankers around the world are acting together.  that is a good thing. but the terms of the deal -- if you need to almost borrow this kind of levels, the dollar levels they were suggesting, you almost are in a very difficult position.

it hasn't actually helped the funding market here in europe to be brutally frank. steve s that your take? well, i think ultimately what this dollar funding will do, melissa, is it will solve one of the problems that's out there, which is a scarcity of dollar funding either because it's not available in dollars or because there's not sufficient dollar collateral for the dollars that are needed. and i think ultimately these things have tended to help the situation rather than make them  worse. but it would be wrong to see it as the fix-all because there are many, many other things that  need to be done. this is kind of like fixing one of the shorter-term problems that's out there.  but it's not nearly the fix for the larger-term problem, which is the sovereign debt problems and the related banking issues.

michelle, how is secretary geithner received in this council in poland? 

reporter: i'm told they snicker behind his back, that he said he was invited but actually he kind of invited himself. there's a lot of back and forth. there are some members of the european union saying, why is the u.s. tell us how to run their business, look at what they did with the debt ceiling mess, they're not one to talk. he was self-deprecating in that fashion in some comments that he did make. but i wouldn't say it was a warm welcome.


michelle, i just want to get rid of one of the myths that's out there, which is that geithner is going over there presenting this idea of leveraging the efsf. in fact, i was told by a g-7 official, this issue came up and was presented to the leading european economies at the recent g-7 finance ministers meeting. it's been out there for six weeks.  if anything, the role geithner is playing would be informational.  but this issue has been out there and presented. and geithner's not going over there selling this. and i want to bring simon into this.

reporter: i think the reason people here thought that was going to happen is because the spanish finance minister said she expected to hear about leverage from tim geithner when she arrived this morning. maybe that's why people got that  impression. simon, are you surprised that tim geithner would not be warmly welcomed? these are polite people. i would be very surprised if they were rude to tim geithner. that's really not where they are. they don't see it in this kind of america versus europe in a way, from my experience.  but i want to say something very important here. let me preface it by saying this is a two-day meeting.

what's coming out now is not  necessarily where we end up by the end of the weekend. however, these are very worrying signs that are coming out because to solve the situation,  we need political will, we need coordination and we are on now three levels not getting that. the first is that as a result of the conference call between the french, the germans and the greeks on wednesday night, we thought that they were going to prevent grooek greece from  defaulting, they would give them the $8 billion euros and that they would do that relatively quickly on a wink and a nudge. that is not the case. they will run out of money, they have told us, next month.

now they're saying, we will not  make a judgment on that 8 billion until october. so they're deliberately leading a funding gap and they're trying to see other ways they could tap money. that is not a good sign. today we're supposed to have a deal on the collateral issue where the fins say, for the greek money, we want collateral.  the fins are saying, there is no deal on the table. without a deal on collateral, you can't write the legislation that goes before the germans  over the next two weeks.

finally in german you have now the cabinet not discussing crucial elements of that plan and therefore, again, it is delayed and cannot go before the german parliament. so the whole timetable for bailing out greece and the efsf is beginning to slip. the greatest irony of all of this is it was created so europe could stand shoulder to shoulder as importantly as america. and now we see obama is going to call them all in to try to bang heads together. the americans trying to get the europeans to sort out this mess. this mess is worse now than it was 12 hours ago, frankly. interesting. 
Title: Re: Financial fuckery thread
Post by: Faust on September 16, 2011, 07:20:21 pm
Wow, european finance minsters are dicks...
Title: Re: Financial fuckery thread
Post by: Doktor Howl on September 16, 2011, 07:24:33 pm
Wow, european finance minsters are dicks...

Yeah, maybe.  But anyone who takes advice from Geithner is an idiot.
Title: Re: Financial fuckery thread
Post by: Faust on September 16, 2011, 07:30:05 pm
Wow, european finance minsters are dicks...

Yeah, maybe.  But anyone who takes advice from Geithner is an idiot.

Maybe, but most of them aren't much better. Their policy of trying to fill the money black hole with endless bailouts is reaching its expected conclusion with Italy.
Title: Re: Financial fuckery thread
Post by: Doktor Howl on September 16, 2011, 07:31:22 pm
Wow, european finance minsters are dicks...

Yeah, maybe.  But anyone who takes advice from Geithner is an idiot.

Maybe, but most of them aren't much better. Their policy of trying to fill the money black hole with endless bailouts is reaching its expected conclusion with Italy.

Have any of them colluded in causing and worsening the black hole in the first place?

Because Geithner did, to line his friends' pockets over at G/S.
Title: Re: Financial fuckery thread
Post by: Cain on September 16, 2011, 07:45:49 pm
Harder to say.  A lot of them are lower profile, privacy laws tend to be stronger here and you're looking over several different jurisdictions, with a lot more banks.

In some ways, the US press is much better at picking up the activities of their various officials, even in this day and age.  A lot more of your covert ops get into the press, and so do your corporate-political links.
Title: Re: Financial fuckery thread
Post by: Tiddleywomp Cockletit on September 18, 2011, 11:13:50 pm
There was a guy who wrote a book about school shootings a couple of years ago who said everybody has it all wrong with all this zero tolerance for shit like black clothing and metal music and empty threats. He said these kids are always raised in very conservative families and when the illusion of the Reagan Christ Way starts to wear thin and their whole reality is threatened and they see that they have no future, they flip. I can't remember the guy's name, dammit, maybe somebody here knows? It might have even been Cain who posted about it originally.

Artists who paint burning banks don't have Reagan bubbles to burst, I would think.

Although you'd then have cause to wonder why children of hippies don't have the same bubble pop explosion of rage and despair.


Simple. They've had weed in their system since the fetal stage.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 19, 2011, 10:41:21 am
The FT is reporting this morning that the (UK) government is performing worse than expected in cutting the deficit, and that an additional £12 billion loss has been found when they ran the numbers themselves. Not going to quote the article, because doing so brings up a warning not to post on the internet. If you want to register to see it though, it is here: http://www.ft.com/cms/s/0/f5981c68-dee0-11e0-9130-00144feabdc0.html#axzz1YOBXuNEw

The number which leapt out at me was that in order to fix the deficit, they'd need to raise VAT from 20% to 22.5%. That's almost one quarter of the cost of nearly everything spent, going into the government on top of other 'stealth' taxes (like fuel duty), and regular taxation. At the same time, retailers have been dying off because they simply can't make money. ANOTHER rise of 2.5% (though I think that was just said for comparison, and nobody is suggesting it yet) would tank that even further.

At the same time, minimum wage hasn't been rising, people are working less hours on average, inflation stands at 5.1% with more 'quantitative easing' en route to bump that up further...

Our transport infrastructure is a joke, and we're going to waste billions on a high speed rail line to chew up vast areas of green belt land and shave 30 minutes off the journey from London to Birmingham. Not that you'll be able to move in London next year anyway; we're hosting the Olympic games (which is also costing us billions) and what passes for public transport is going to simply collapse, given that whole sections of the underground fail every other day already.

Even after all these 'tough decisions' and austerity measures, we're still fucked.

Oh... yeah. £12 billion is roughly one quarter of the total deficit. Last week, I forget if I mentioned this, but:

"The ICB puts the annual cost to banks around £6bn. This is modest as a share of banks’ assets (0.1 per cent)."

So if the government seized one per cent of the banks' assets, banks that we largely own and have bailed out, we could simply wash all this away and have billions left to spare to assist with things like transport, education, healthcare, pensions... we could even cut some of our ridiculous levels of taxation! Hey, seize TEN per cent! We bailed them out, why can't they bail us out?

Not that I expect anyone to even ask.
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 19, 2011, 01:14:07 pm
So if the government seized one per cent of the banks' assets, banks that we largely own and have bailed out, we could simply wash all this away and have billions left to spare to assist with things like transport, education, healthcare, pensions... we could even cut some of our ridiculous levels of taxation! Hey, seize TEN per cent! We bailed them out, why can't they bail us out?

Not that I expect anyone to even ask.

I support this idea.

There's probably a reason why it couldn't work.

But let's do it anyway.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 19, 2011, 01:47:32 pm
The problem with doing it seriously is twofold.

The first is that it is an ongoing cost. A one-time alleviation would probably help a lot in the short term, but say you go ahead and take one per cent to fund your cost this year... next year, you're still in the same position. Unless your 12 billion in tax cuts has suddenly made your economy the most awesome in the world, you're going to need to do it again.

The second is that it wouldn't help the economy. Seizing control of the banks assets, even a small fraction of them rather than 'all of them', would destroy the financial services sector, and probably the banking system as businesses fled. We're still pretty reliant on financial services, even if the sector has taken some major hits, so overall taxable income may be reduced. I imagine if you seized everything you could, and you managed to get it all, that would help, but you aren't going to be able to restructure the entire economy using that, and maintain employment, services etc.

It'd sure be cathartic though.


Title: Re: Financial fuckery thread
Post by: Cain on September 19, 2011, 02:07:10 pm
Surely as majority stakeholders in HBOS and the Bank of Scotland, we actually have even more latitude for action than just outright seizing funds. 
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 19, 2011, 02:15:51 pm
Yeah, but HBOS and Bank of Scotland would probably suffer much more for that money; I believe the 0.1% figure was taking the entire banking industry in the UK as a whole.

... I'm going to be honest though, I don't really know. My dad has been working on a project to unite two major high street banks for the past year, and from the stories he's been sharing with me, they don't really know what assets they have. The data he was working with had something like a 1/1000 error rate; roughly one out of every thousand entries was critically flawed in some way. Each entry being a loan, mortgage, or in some cases actual bank accounts.

I suspect this is tied into things like swiss banks suddenly finding one man has cost them $2 billion. I don't think any group really has an accurate picture of who owns what.
Title: Re: Financial fuckery thread
Post by: Cain on September 19, 2011, 02:18:39 pm
Sounds entirely plausible.  That is, after all, at the roots of the subprime crisis - no-one knows who actually owns the toxic loans, and so banks are not keen to lend.  It could turn out a ton of banks own much less than they are lending, and so easily fall to any kind of economic crisis.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 19, 2011, 02:32:33 pm
The more I think about it, the more convinced I become that the only way to actually solve the crisis, which is going to be necessary if we're going to crawl out of recession, is to work towards a debt amnesty. I think you wrote about it a few months ago, Cain. Call it quits, let the banks collapse if they can't keep going when their debts are written off, and start all over again. I suspect that the majority of individuals would benefit in the long run, although the short term could be chaotic and painful.

I'm also fairly certain that it isn't in the interests of anyone in the current establishment, politician, banker or corporation, to allow the crisis to be solved. The longer they allow it to drag on, the longer they have to personally profit. In the case of banks and corporations, a debt amnesty is a direct threat to their position, in the case of politicians, it'd require going up against the interests of the other two.

On the other hand, the recession isn't pleasant for any of these groups, but the elites in charge are somewhat insulated from the actual pain of it. They likely believe that sooner or later, the whole thing will turn around anyway if they just keep on the same track.
Title: Re: Financial fuckery thread
Post by: Cain on September 19, 2011, 02:41:03 pm
When you have unsustainable levels of debt, an amnesty is the only viable option.

The third world has been kept in debt for generations, paying off the loans of dictators.  That's an economic dead weight on the global economy.  If we follow the same route, we'll be stuck in much the same position.  Paying off loans is not economically productive activity.  It doesn't make the economy grow, it doesn't create jobs, it actually has the opposite effect and is a drain on society as a whole.  Debt stops people spending money, from being able to hire more people, from being able to fund new and innovative ventures.

Basically, debt sucks.  But we, as humans, invented debt.  It's not a natural law, written into the nature of the Universe.  We can cancel it, and we should, when it becomes unreasonable to expect payment, when trying to do so damages too much.

Anything else is simply lining the pockets of rentiers.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 19, 2011, 03:43:47 pm
i encountered some folks a couple years ago online that were part of some effort to promote a general debt amnesty under the auspices of 'Jubilee' as described in the Leviticus, where all debts are forgiven. (these folks weren't pushing for the forgiveness and pardoning of criminals, however  :lol:)

i haven't heard hide nor hair of their attempts since then, so they were obviously unsuccessful in spreading the meme, but I wonder if the time is ripe to spread this notion through the religious right?  What would the republican leaders do if it became a statement of christian faith to support a debt amnesty as prescribed in the good book?
Title: Re: Financial fuckery thread
Post by: Telarus on September 20, 2011, 07:25:03 am
I recently signed a petition to forgive student loans. Not that I expect that will happen, what with the Fed Gov suing other banks on behalf of Fannie Mae and Freddie Mac.....


Great idea, tho.
Title: Re: Financial fuckery thread
Post by: Cramulus on September 20, 2011, 02:33:55 pm
Dear Coke Talk - On occupying wall street.

Coquette, I need to hear your take on the occupy wall street shit going on right now.


Please. It’s just a bunch of fuzzy-headed antiglobalization dorks loitering around lower Manhattan confusing their own vegan farts for a whiff of revolution.

Those ineffectual douchenozzles wouldn’t know how to jam culture if Robespierre’s ghost showed up at Goldman Sachs with a guillotine.

Call me when there’s blood in the streets and investment bankers are fleeing the country in exile. Until then, don’t bore me with freshman bullshit.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 20, 2011, 03:13:55 pm
god I love her.

Am IN love with her.

I need a woman like that in my life.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 20, 2011, 06:28:45 pm
Dear Coke Talk - On occupying wall street.

Coquette, I need to hear your take on the occupy wall street shit going on right now.


Please. It’s just a bunch of fuzzy-headed antiglobalization dorks loitering around lower Manhattan confusing their own vegan farts for a whiff of revolution.

Those ineffectual douchenozzles wouldn’t know how to jam culture if Robespierre’s ghost showed up at Goldman Sachs with a guillotine.

Call me when there’s blood in the streets and investment bankers are fleeing the country in exile. Until then, don’t bore me with freshman bullshit.

ZING!  :lol:
Title: Re: Financial fuckery thread
Post by: Doktor Howl on September 20, 2011, 06:29:41 pm
Dear Coke Talk - On occupying wall street.

Coquette, I need to hear your take on the occupy wall street shit going on right now.


Please. It’s just a bunch of fuzzy-headed antiglobalization dorks loitering around lower Manhattan confusing their own vegan farts for a whiff of revolution.

Those ineffectual douchenozzles wouldn’t know how to jam culture if Robespierre’s ghost showed up at Goldman Sachs with a guillotine.

Call me when there’s blood in the streets and investment bankers are fleeing the country in exile. Until then, don’t bore me with freshman bullshit.

:mittens:
Title: Re: Financial fuckery thread
Post by: Telarus on September 20, 2011, 11:34:45 pm
 :lol:
Title: Re: Financial fuckery thread
Post by: Cain on September 21, 2011, 09:46:50 pm
I generally find Chan Akya to be a lucid and engaging writer on global financial issues

http://www.atimes.com/atimes/Global_Economy/MI22Dj01.html

Quote
Three years ago at the height of the liquidity crisis in 2008 I wrote a series of articles on the outcome of various interventions (see "Related Articles"). It is with grim satisfaction that I note many of the predictions have indeed come through; some of which were:

1. Asia would need to focus on physical assets to maintain purchasing power;
2. European sovereign debt would erupt if governments tried to save their banks (See: Europe - into the end game, Asia Times Online, September 15, 2011);
3. Anyone who purchased bank shares at the 2008 "lows" would regret their decision.

Over the past 10 days or so, a number of headlines have popped up which take my "banks are not trustworthy" thesis well past its logical end point and into entirely uncharted territory. That point would be the otherwise-unmentionable notion (and that is all it is for now) that the global financial system may have reached its breaking point, and perhaps even its sell-by date.

Before delving into that conclusion though let us look at recent developments:

# Firstly, there is the discovery of the trifling US$2.3 billion in losses due to unauthorized trading by UBS in its London operations. That such a loss could happen in a bank that was rescued barely three years ago by the Swiss central bank is bad enough; revelations that the loss pattern (ie the mechanism that keeps the dangerous trades hidden from review and proper risk management) took hold in 2008 and went undiscovered for three years made it a whole lot worse. Singapore's Government Investment Corporation, which is nursing a multi-billion dollar loss on its investment in UBS, issued a terse statement earlier in the week expressing its disappointment. Where is Singapore-style corporal punishment (remember Michael Fay - the young American sentenced to caning in 1994 for theft and vandalism) when you really need it?

# European newspapers are reporting that large companies in the region, including household names like Siemens and others, have cut their deposits with banks and placed funds directly with the European Central Bank (ECB). This helps them to circumvent credit risk altogether but does bring into question what the role of banks as deposit taking institutions would be.

# The UK released its much-anticipated "Vickers report" that calls for a split between real banking and its casino counterpart through capital barriers and avoiding all manner of cross-funding. What was a good idea, though, fell on its face during the execution as the report called for an eight-year implementation timeframe (2019); if all other reforms are any indication, then one should expect that the real deadline is "never". This kind of shameless lobbying shouldn't be possible by any industry, let alone one that essentially survives on the public whim.

# Reports out of the US that Bank of America was considering an idea to place its troubled Countrywide subsidiary into bankruptcy (even if the rumor was strenuously denied) helped to bring forward awkward questions about the rest of the bank and its solidity.

# The downgrade of French banks has been followed by reports of Asian (mainly Chinese) banks have been pulling swap lines and terminated foreign exchange (FX) trading relationships with the banks.

# A number of French banks were reported to have put out large portfolios of assets for sale - one bank put up $70 billion for sale on its own. Alarmed by the possibility of European liquidity events driving down prices of American fixed-income assets (deservedly in my opinion, but that is absolutely not the main point here), the US Federal Reserve provided a swap facility to the ECB under which the latter could provide US dollar funding to European banks in return for European (ie euro-denominated) collateral. Considering that the ECB accepts all manner of collateral including Greek debt, in effect the Federal Reserve (and ultimately US taxpayers) are now lending money against Greek bonds. If the regulatory and central banking authorities have to resort to such morally bankrupt measures three years after effecting a wide-ranging rescue of the banks, then we all truly have to wonder quite how bad things are below the surface.

# Bank earnings for the third quarter of 2011 - set to be released in less than a month - are expected to reveal falling profitability due to declining revenues from fixed-income trading as also continued rises in actual defaults by borrowers, particularly in areas such as individual and mortgage borrowers in the US.

# On the issue of Greece, press reports continue to highlight the gaps in banks' provisions for the country. Recent reports have shown that two state-owned "bad" banks in Germany own almost half of the country's total exposure to Greece. This is a good thing - considering that in various other European countries exposures are more widely spread and far less provisioned. In every possible way, a nightmare for regulators.

# The really bad part is that I have so many other stories to add here but will not in the interests of space: the little scandals dotting Italian banks, the bigger problems being faced by American banks on their accounting for dodgy assets, rising loan losses in Japan, irrational lending in China, corruption in Indian banks and so on.

When you step back and think this through, it is apparent that the banking system is failing in its basic functions of taking deposits, making loans and even in terms of transferring payments (as happens when Chinese banks no longer want to face their French counterparts) across borders.

Well, isn't that depressing.  Banks can't even do basic financial services right anymore, let alone be trusted with the global economy.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 21, 2011, 09:54:20 pm
thanks for the tip, hadn't picked up on him (her?) yet.
Title: Re: Financial fuckery thread
Post by: Jenne on September 21, 2011, 11:46:48 pm
Asia Times is a good one.
Title: Re: Financial fuckery thread
Post by: Cain on September 24, 2011, 01:08:46 pm
Geither has made new and bold advances in the field of gross hypocrisy:

http://www.bbc.co.uk/news/business-15044357

Quote
US Treasury Secretary Timothy Geithner has called on European leaders at the G20 in Washington to send a "decisive signal" that they have a strategy for tackling the debt crisis.

Mr Geithner said there had been an erosion of confidence and that there was a "huge premium" on early action.

Eurozone sovereign debt:  € 9,828.2 billion (80% of GDP)
USA sovereign debt: $14.72 trillion (98% of GDP)

And the EU budget is a lot smaller than the combined budgets of all the governments that make up the Eurozone.  Whereas, in the USA...
Title: Re: Financial fuckery thread
Post by: Cain on September 24, 2011, 02:16:30 pm
Quote from: Cain
That parochial attitude has been allowed to fester by European elites, who basically belittled and condescended to those opposed to the larger EU projects on nationalistic grounds.  I'm fairly in favour of intergration in principal, and even I'd concede that the response to nationalists has been along the lines of "bitter people clinging to guns and god flags and history".

The message that should've been sent is this: the countries that are going to dominate the future are large.  Very large.  China, India, USA and Russia large (theoretically Indonesia too, in the far future).  No European country, on its own, can compete with that.  The largest state in Europe is Germany, and that is not even half the population size of Russia, a massively underpopulated country that also has the advantage of owning territory from the Baltic through to the Pacific.  Now, if we want to have a say in the future, and not merely be historical amusement parks and vassals to these emerging powers, we have one simple choice: unite.  It's unite or submit to de facto foreign control.  Yes, all European countries will, as a result, have less autonomy among themselves, less control over their own futures, be tied permamently to the fortunes of other states.  But it's better to have a portion of a say in Brussels, than have no say in policies from Beijing, Moscow and Washington.

But I suspect that it is far too late for this kind of argument now.

Yeah, sorry if I wasn't clear - I would personally be in favour of a united Europe. Partly because I would like to see Nick Farrage's head explode, but mostly because I think it is the most sensible way to combat the major issues of the day. We need to completely restructure the global economy and fight climate change - two things which need the world (or at least, most of it) to act in unison, which would be much easier with a united Europe.

But like you say, and I agree, it is almost certainly too late for that. Individual European countries see each other as competitors at best, enemies at worst. The EU is a massively bureaucratic, corrupt and entangled mess ... and we don't have any credible politicians standing up to make the case for a united Europe, or any plan as to how to get there.

I think politicians tried to sneak it in by the back door, incrementally. I really don't think it has helped at all. We're going to eat each other, I think, over the next couple of years... and in about ten years time, the nationalists will be looking around at the ruin of what was Britain... and probably trying to find a way to blame it on the Europeans.

Here is another person who comes to a rather similar conclusion:

http://fabiusmaximus.wordpress.com/2011/09/13/27796/

Quote
US conservatives often describe Europe’s unification as quixotic or a leftist plot.  It’s neither, but something America refuses to do:  prepare for the 21st century.


Europe`s leaders have worked to unify Europe since WWII (Of course, that’s an over-simplification.  They are not a unitary element, and many oppose unification).  Success would bring a host of economic benefits.  Failure would make them small powers kicked around by the 21st century’s great powers (e.g., USA, China, Russia, Brazil).  Germany, France, and Britain have done it to others for centuries; they do not want it done to them.  But e pluribus unum takes time, effort, and often war.

Due to our long English heritage, we often forget the short history of Europe`s nations.  Belgium began in 1839 (on weakly together even today); Germany and Italy a few decades later.  Going from young nations to a supra-national state so quickly has few or no historical precedents.

Nor was it easy.  Italy and Germany unified smoothly in the 19th century — compared to some.  America and France overcome regional differences far smaller than across Europe, in nations already unified, only through wars (Napoleonic and Civil).  America’s regions despised one another until the late 1800′s, forged into a strong union by the Civil War.  Only about 1 of 8 Frenchman spoke proper French in 1800; most spoke somewhat mutually incomprehensible regional dialects.

Europe’s leaders slowly brought Europe together after 1945.  Then they gambled, attempting a currency union before political union.  Success will bring applause from future historians for their boldness; failure will bring mockery at their foolishness. It might have worked if they had more time before a recession induced massive strains in the EMU fabric.  But the recession arrived, and revealed the primary failure in the project:  Europe’s peoples do not support it.

Europe has come so far, and I`ll bet they will join together. Eventually.  But the current phase of the process looks likely to end badly, setting it back decades or generations.

There is also some good summaries of potential future scenarios, such as:

Quote
Any member of the EMU can abort the process, not just Greece and Germany (e.g., Netherland’s and Finland’s demand for collateral on future loans to Greece).

This becomes more likely as public support continues to decline in both creditor and debtor nations. Hence partisan maneuvering, legislative votes, and  elections can have outsize effects — or even spark the endgame. Like Berlin State election on 18 September, or the September 29 Bundestag vote on the European Financial Stability Facility (EFSF).  A trial vote did not go well (see Reuters).

The ECB and IMF might impose such tight conditions that Greece bolts (They are unlikely on their own to end the bailouts).

An economic slowdown or recession in Europe probably destroys the enthusiasm for bailout and austerity programs.

A loss of confidence by bank investors might spark a run on Europe’s banks (EU banks are weak; a slow run has been happening in Greece; perhaps one starting in France), by sovereign bond investors might destabilize government finances.

Speculators’ hot money might destabilize the situation (much as its driven the Swiss Franc to crazy levels).  So far they’re pushing down the Euro, boosting Europe’s exports.

The high-growth emerging nations fighting inflation (e.g., China) are depressing global growth, hurting Europe’s exports.  Ditto for the slowing America and Japanese economies.
Title: Re: Financial fuckery thread
Post by: Cain on September 25, 2011, 12:20:05 am
http://www.bbc.co.uk/news/world-us-canada-15039515

Quote
A US partial government shutdown is looming amid the latest spending dispute to cripple Congress - over two provisions in a federal funding bill.

The Democratic-led Senate has blocked legislation passed by the Republican-controlled House of Representatives.

The Democrats oppose Republican demands that funding for victims of hurricanes and wildfires be offset with cuts to clean energy programmes.

The stopgap spending bill is to fund the government beyond September's end.

Lawmakers from both sides have said disaster relief should not be a matter of controversy.

But with Congress' approval ratings in the basement, analysts say the dispute is just another sign of how partisan rancour is hampering US lawmakers' ability to pass even the most basic legislation.
Title: Re: Financial fuckery thread
Post by: Jenne on September 25, 2011, 12:59:46 am
Methinks the Democrats are just all to happy to have THEIR turn at the "fucking up the works" of government wheel.

Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 25, 2011, 04:26:47 am
This is actually really good news.  Unless you're holding gold, that is.  But even if you are, and you didn't buy it recently, you're probably still way up.

http://money.cnn.com/2011/09/23/markets/gold_prices/index.htm?iid=Popular

Quote
NEW YORK (CNNMoney) -- Gold prices continued to plunge Friday, despite the market turmoil that often drives investors to the traditional safe haven.
Gold tumbled $101.90, or 5.9%, in regular trading to $1,639.80 an ounce. It's the second straight day of steep declines for the precious metal.

According to the Chicago Mercantile Exchange, Friday marked the first $100 daily price drop since Jan. 22, 1980, when gold plunged $143.50 to $682 the day after having spiked to a record high.
Keith Springer, president of Springer Financial Advisors, said that while gold has benefited from economic uncertainty in recent months and years, it's primarily been a hedge against inflation.
But the growing worries about a global economic slowdown have raised new fears that there could be a period of deflation, or falling prices, in the months ahead.
"People are quickly coming to the realization that gold does very bad in a deflationary environment," he said.
Gold isn't the only commodity to be hit by concerns about the global economy. Silver suffered its worst trading day in decades losing $6.48, or 17.7%, to close at $30.10.
Copper and platinum also both lost nearly 6%. But those metals have far more industrial uses than gold, Springer said, so fears of a recession should drive down those prices.

The damn bottom is dropping out on copper, which is also a very good thing.  It's been a bubble for awhile and drives up costs in a lot of other industries, my own being a big example.

If deflation is happening in spite of the central bank keeping the funds and prime rate the lowest in history, it could mean that despite the meddling and artificial inflation of prices, the money is drying up out of sheer necessity.

It took Volker to make the unpopular decision to raise rates and help correct the 70's and 80's recession.

http://research.stlouisfed.org/fred2/data/FEDFUNDS.txt

Listing of the funds rate since '54.  It spiked in the late 70's/early80's.  It's been on a downward track ever since.  Fucking Keynesians. 
Title: Re: Financial fuckery thread
Post by: Prince Glittersnatch III on September 25, 2011, 05:17:16 am
Brb posting this on every Survivalist, Teabagger, Libretarian and Ron Paul forum I can find.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 25, 2011, 05:28:58 am
Brb posting this on every Survivalist, Teabagger, Libretarian and Ron Paul forum I can find.

Won't matter.   The smart ones (lol, right?  I mean, right?) got into it years ago and are still way up.  It's not so good news for jewelers, especially the ones who got into the gold party business like a friend of mine did, but they'll likely weather it.  If you got into gold more than 3 years ago, the plunge it took still wouldn't have you down, yet.

The biggest story is really the copper price plunge.  That's huge and very, very good news.
Title: Re: Financial fuckery thread
Post by: Jenne on September 25, 2011, 06:12:02 am
Ah, good, hopefully folks will hear about the damned copper going kablooey and stop doing shit like stealing a whole village's internet through ganking the underground copper wire.

There was somewhere in Europe this happened recently--damn near the whole country lost their internet because same asshat thief stole an underground copper wire holding the whole shebang together.  HI-larious.  And a teaching moment, of course.
Title: Re: Financial fuckery thread
Post by: Faust on September 25, 2011, 09:59:50 am
Brb posting this on every Survivalist, Teabagger, Libretarian and Ron Paul forum I can find.

Won't matter.   The smart ones (lol, right?  I mean, right?) got into it years ago and are still way up.  It's not so good news for jewelers, especially the ones who got into the gold party business like a friend of mine did, but they'll likely weather it.  If you got into gold more than 3 years ago, the plunge it took still wouldn't have you down, yet.

The biggest story is really the copper price plunge.  That's huge and very, very good news.

Both gold and copper will rapidly recover though won't they, out of sheer demand? Would a few weeks time be a good time to aim for a bottom and buy a bit?
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 25, 2011, 05:12:11 pm
Jewelers are fucking thrilled, at least the ones I know. Gold, silver, and copper have skyrocketed at an alarming rate over the last few years, at the same time the economy has been depressed and the market for luxury goods like jewelry has declined... making their work more expensive to produce and more difficult to sell.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 25, 2011, 05:15:10 pm
It's good news for glassworkers, too, as we rely on gold for pinks and purple, silver for blues, and copper for greens.
Title: Re: Financial fuckery thread
Post by: Jenne on September 25, 2011, 06:54:37 pm
THAT is something that I hadn't thought of, Nigel, but it makes total sense.  I'm sure there's many many industries that have had to cut back on production because of rising copper and gold prices.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 26, 2011, 03:02:59 am
Brb posting this on every Survivalist, Teabagger, Libretarian and Ron Paul forum I can find.

Won't matter.   The smart ones (lol, right?  I mean, right?) got into it years ago and are still way up.  It's not so good news for jewelers, especially the ones who got into the gold party business like a friend of mine did, but they'll likely weather it.  If you got into gold more than 3 years ago, the plunge it took still wouldn't have you down, yet.

The biggest story is really the copper price plunge.  That's huge and very, very good news.

Both gold and copper will rapidly recover though won't they, out of sheer demand? Would a few weeks time be a good time to aim for a bottom and buy a bit?


That's hard to say with certainty, but there's been a lot of talk about gold being a bubble for some time due to a run from inflation, and Central Banks making moves to buy large amounts of gold this year:

http://www.bloomberg.com/news/2011-04-29/gold-buying-central-banks-may-signal-bullion-extending-record-price-rally.html

That has legs, considering the amount of cash in the system right now.  But since stocks have taken a hell of a beating the last month and a half, big movers may be predicting a top out on metals and oil and selling to recapitalize and buy low priced but strong and very well positioned blue chips, which is a damn good idea.  The fact that copper and silver were trending downward before this gold dump should have been a big red sign to anyone watching. 

As to demand being an upward driver and gold regaining it's biggest loss in 30 years, my personal view is that gold and copper as well as oil have been artificially overpriced for the last two years at least.  Oil in particular, and it's push on gasoline prices have, in my estimation, been entirely artificial.  With unemployment still hovering at around 9% (as it's reported) I can't see any reason the price of gasoline should be any higher than it was this time last year, much less dancing close to what it was in 2008, before the crash. 

And if you'll look, gas prices are also correcting for real demand vs what I think is a flood of money looking for somewhere to go other than the dollar.

Copper prices, despite it's recent dump, are still around the same price they were at this time last year, but they haven't dumped this far, this fast since the 08 recession really set in.

http://www.kitcometals.com/charts/copper_historical_large.html

see about half way down on the 5 year copper spot chart.

I think the biggest thing to know is that Bernanke came out and actually announced when the Fed was going to raise interest rates.  Telegraphing a move like that is possibly the stupidest decision in a long history of stupid decision by central bankers.  I would say that if you are holding metals right now, consider it a top and sell.

Ever since that meeting, the trend has really been down.  I don't see that changing in the long view and I would say if you're looking for a bottom, look for it in 2013, and have the cash on hand then to get back in.

At least, that's what I'm doing. 
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 26, 2011, 03:06:36 am
Jewelers are fucking thrilled, at least the ones I know. Gold, silver, and copper have skyrocketed at an alarming rate over the last few years, at the same time the economy has been depressed and the market for luxury goods like jewelry has declined... making their work more expensive to produce and more difficult to sell.

Jewelers that only buy as they need and try and sell quickly.  For them it's great that prices are down.  My friend's family business has been buying since 08 and melting down and sitting on a lot of it, so the good news will hopefully be, as you say, that people will begin buying luxury's once prices are down, but hopefully not down below what they've paid the last few years.

Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 06:16:34 am
Jewelers are fucking thrilled, at least the ones I know. Gold, silver, and copper have skyrocketed at an alarming rate over the last few years, at the same time the economy has been depressed and the market for luxury goods like jewelry has declined... making their work more expensive to produce and more difficult to sell.

Jewelers that only buy as they need and try and sell quickly.  For them it's great that prices are down.  My friend's family business has been buying since 08 and melting down and sitting on a lot of it, so the good news will hopefully be, as you say, that people will begin buying luxury's once prices are down, but hopefully not down below what they've paid the last few years.



Yep... people who USE it are thrilled, people who have INVESTED in it are shitting themselves.

But the very first law of manufacturing that I learned is that sitting on raw materials is a liability even if the values increase. The reason for this is that you are tying up manufacturing capital that could be turning a profit. I learned that you should buy no more than you can reasonably use in a calendar year. It's a similar principle in retail; stores strive to have as little unturned inventory as possible each year. Stockpiling can be a very good idea for some reasons; if, for instance, you are stockpiling in case of a future shortage. In that case, it isn't as relevant whether the value increases or decreases, as the stock is on hand not for profit, but as a buffer against losing the ability to manufacture.

For example, nations used to stockpile grain. It wasn't to turn a future profit when grain prices were high, but to be able to continue to feed their citizens in case there was a drought or a blight or other unforeseen (yet reasonably foreseeable) disaster.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 06:19:49 am
Also, for the love of common sense, it's a terrible idea to speculate in the same raw materials your business relies on for manufacturing. WTF?
Title: Re: Financial fuckery thread
Post by: hirley0 on September 26, 2011, 11:32:52 am
Gold, silver, and copper
Jears.
Yep... :) disaster.
26th_NAVYyeah DP People Do believe G.S.C price when UP since
08 never mind
listen in order for those ( i mean THese 3 to work} U must rethink
how much does it take to keep the Earth in Orbit
i hear 13T comming out {per year i guess) thats US
Glow ball may be 7x that oR more say 100T (ok)
thus devide 100 into three piles Rich (AU) Midies(Ag) & Pour(CU) QT
say 80 20 .1 so 80T in gold say 8e8 total sitt'n thus AU /-/p=8e13/8e8
8e5/Oz got it not 2,000 (what a joke} Same song for Au & CU too
get over this Would U
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 26, 2011, 12:30:25 pm
Also, for the love of common sense, it's a terrible idea to speculate in the same raw materials your business relies on for manufacturing. WTF?

I was talking to him last night about it and it's exactly as you said in the post previous to this.  They weren't/aren't speculating so much as buying on the expectation that the price was going up, which it was, because when they need gold on hand for new jewelery or to repair, they don't have to buy it at the inflated price.  They've already got it in stock.  They've also been considering moving into doing their own custom design and manufacturing.  He did say they're probably still sitting on more than they would move in several years, but they're not worried about it because it will move eventually.  This business is 3 generations old and they're well capitalized enough to take a correction in the price.


26th_NAVYyeah DP People Do believe G.S.C price when UP since
08 never mind
listen in order for those ( i mean THese 3 to work} U must rethink
how much does it take to keep the Earth in Orbit
i hear 13T comming out {per year i guess) thats US
Glow ball may be 7x that oR more say 100T (ok)
thus devide 100 into three piles Rich (AU) Midies(Ag) & Pour(CU) QT
say 80 20 .1 so 80T in gold say 8e8 total sitt'n thus AU /-/p=8e13/8e8
8e5/Oz got it not 2,000 (what a joke} Same song for Au & CU too
get over this Would U

hirley0, I understood that entire post.  Which makes me want to go back and reread some of your others.
Title: Re: Financial fuckery thread
Post by: hirley0 on September 26, 2011, 01:45:10 pm
4:44:44.444
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 04:52:01 pm
Also, for the love of common sense, it's a terrible idea to speculate in the same raw materials your business relies on for manufacturing. WTF?

I was talking to him last night about it and it's exactly as you said in the post previous to this.  They weren't/aren't speculating so much as buying on the expectation that the price was going up, which it was, because when they need gold on hand for new jewelery or to repair, they don't have to buy it at the inflated price.  They've already got it in stock.  They've also been considering moving into doing their own custom design and manufacturing.  He did say they're probably still sitting on more than they would move in several years, but they're not worried about it because it will move eventually.  This business is 3 generations old and they're well capitalized enough to take a correction in the price.


Then the price drop isn't hurting them, is it? Like I said, it's a boon for jewelers.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 26, 2011, 05:01:05 pm
Also, for the love of common sense, it's a terrible idea to speculate in the same raw materials your business relies on for manufacturing. WTF?

I was talking to him last night about it and it's exactly as you said in the post previous to this.  They weren't/aren't speculating so much as buying on the expectation that the price was going up, which it was, because when they need gold on hand for new jewelery or to repair, they don't have to buy it at the inflated price.  They've already got it in stock.  They've also been considering moving into doing their own custom design and manufacturing.  He did say they're probably still sitting on more than they would move in several years, but they're not worried about it because it will move eventually.  This business is 3 generations old and they're well capitalized enough to take a correction in the price.


Then the price drop isn't hurting them, is it? Like I said, it's a boon for jewelers.

Nope, at least not unless it goes back to 2008 prices.  He explained their reasoning for getting into the gold party craze over the last few years and that was it, to have stock in house for melting down.  Clarified it for me and changed my mind to your view on jewelers being on the winning end. 
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 05:49:02 pm
Righteous.  :mrgreen:

It's funny, because there are quite a few people spazzing on the glass/jewelry forum I'm on, and they're ALL amateurs who've been stockpiling as an investment. The pros are all "OMG THIS IS AWESOME" with the exception of a few who are like "darn, I should have sent my scrap in last week, oh well".

There was actually a thread with people watching and reporting on the spot prices dropping last night. I haven't checked today, but last night when I went to bed silver was at $27.51, which is still RICOCKULOUSLY FUCKING HIGH considering where it was just five years ago, but is quite a nice drop from $36.

And, of course, the vague intentions I was entertaining of selling my couple of ounces of spare gold are now less motivated.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 26, 2011, 06:01:09 pm
DP, do you have a buy level set for Ag/Au?  i hadn't considered buying in a couple years, but this is tempting...
(if there is any to be had without premiums covering the drop in spot!  have to see what the local stores are selling at.)
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 26, 2011, 06:29:45 pm
DP, do you have a buy level set for Ag/Au?  i hadn't considered buying in a couple years, but this is tempting...
(if there is any to be had without premiums covering the drop in spot!  have to see what the local stores are selling at.)

Nope, I'm out of them for the foreseeable future.  I've made a good bit since 08, but half of the Fed board has voted against the "0% interest rates until 2013" pledge, which signals to me that the hawks are turning against monetizing our way out of this thing.  I don't want to be left holding the bag of nuggets when they do.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 26, 2011, 06:41:10 pm
...but half of the Fed board has voted against the "0% interest rates until 2013" pledge, which signals to me that the hawks are turning against monetizing our way out of this thing...

what are the alternatives that they are considering?
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 06:47:32 pm
DP, do you have a buy level set for Ag/Au?  i hadn't considered buying in a couple years, but this is tempting...
(if there is any to be had without premiums covering the drop in spot!  have to see what the local stores are selling at.)

Why don't you just buy casting grain from Monsterslayer or Rio Grande?
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 26, 2011, 06:55:00 pm
...but half of the Fed board has voted against the "0% interest rates until 2013" pledge, which signals to me that the hawks are turning against monetizing our way out of this thing...

what are the alternatives that they are considering?

I can't be sure about that, but what other alternatives are there?  We couldn't monetize our way out of the 70's recession and actually made things worse with stagflation.  Those rates weren't anywhere as low as they are now.  If they keep it up for another few years we'll be right back where we were then.

I just got a raise, and I'm planning on asking for another $6/hr in 6 months, as a performance pay/cost of living increase.  I expect to get it.  If I'm thinking that way, others with jobs are as well.  It helps foster a similar environment that existed then: high unemployment, with existing job holders demanding higher wages to help offset inflation.  

They can say what they want about inflation being "on target," it's fucking with my food and energy budget.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 26, 2011, 07:03:28 pm
Nigel, it appears i could still buy Ag cheaper by going with 90% coinage, which i would prefer.

DP, I don't know if they will temper their monetization from fears of inflation.  the people in charge of that decision aren't as effected by it, no? I've been under the impression that global monetization looks baked in the cake...

ETA: Thanks for the links, Nigel!  will keep them on file.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 07:27:53 pm
Nigel, it appears i could still buy Ag cheaper by going with 90% coinage, which i would prefer.

DP, I don't know if they will temper their monetization from fears of inflation.  the people in charge of that decision aren't as effected by it, no? I've been under the impression that global monetization looks baked in the cake...

ETA: Thanks for the links, Nigel!  will keep them on file.

How much cheaper, and where? Because Rio and MS sell at spot price as of the minute you complete your order. If you're looking as casting grain prices on the website, you're looking at approximate prices as of the last update. If you're ordering a milled product, of course, it's something like spot + 10%.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 26, 2011, 07:33:50 pm
ah...  they just had prices from an bit ago before they continued plummeting, then.  :lol:
they always sell .999 at spot? (for large orders)  that's awesome.  i may make use of them if the premiums on recognizable stuff is too rich.
accumulating as long term insurance it would be fine to have shot.  for quick liquidability, something like junk silver is worth a bit more, to me.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 26, 2011, 07:46:48 pm
I personally think stockpiling silver as an investment is quite foolish, but it's better than stockpiling cash.
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 27, 2011, 01:04:03 am
relevant:
Attention metal thieves: Buy BT, get 75 million miles of copper (http://www.theregister.co.uk/2011/09/22/bt_copper_cable_theft/)

:)
Title: Re: Financial fuckery thread
Post by: Doktor Howl on September 27, 2011, 01:54:22 am
I personally think stockpiling silver as an investment is quite foolish, but it's better than stockpiling cash.

Bullets are a better investment.  Everyone likes bullets.
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 27, 2011, 02:16:15 am
i've put about equal amounts into both, i'm guessing.
bullets haven't gone up as much in nominal terms, but when the event occurs, they will be much more valuable, i think.
hm...
i could load up some shot shells with silver dimes, and get the best of both worlds!  and i'm protected against lycanthropes, misanthropes, and runaway inflation!
Title: Re: Financial fuckery thread
Post by: Telarus on September 27, 2011, 06:48:55 am
i've put about equal amounts into both, i'm guessing.
bullets haven't gone up as much in nominal terms, but when the event occurs, they will be much more valuable, i think.
hm...
i could load up some shot shells with silver dimes, and get the best of both worlds!  and i'm protected against lycanthropes, misanthropes, and runaway inflation!

 :lol:
Title: Re: Financial fuckery thread
Post by: Cain on September 27, 2011, 07:59:31 am
http://www.bbc.co.uk/news/business-15057859

Quote
European bank shares have risen as investors react to the latest attempts to stabilise the eurozone debt crisis.

A number of measures are being discussed according to reports from the weekend's international meeting in Washington.

They are expected to involve a 50% write-down of Greece's massive government debt, the BBC's business editor Robert Peston says.

French and German bank shares were up 10% at one stage in Monday trading.

European governments hope to have measures agreed in five to six weeks, in time for a meeting of the leaders of the G20 group in Cannes at the beginning of November.

But EU officials in Brussels stress that they should not be seen as "a single grand plan", the BBC's correspondent Chris Morris says.

Quote
the BBC's correspondent Chris Morris says.

Quote
Chris Morris

This explains oh so very much (http://en.wikipedia.org/wiki/Chris_Morris_%28satirist%29).  We are living in a real life version of Brass Eye (http://en.wikipedia.org/wiki/Brass_Eye).
Title: Re: Financial fuckery thread
Post by: hirley0 on September 27, 2011, 11:40:57 am
Nigel, it appears i could still buy Ag cheaper by going with 90% coinage, which i would prefer.

DP, I don't know if they will temper their monetization from fears of inflation.  the people in charge of that decision aren't as effected by it, no? I've been under the impression that global monetization looks baked in the cake...

ETA: Thanks for the links, Nigel!  will keep them on file.

How much cheaper, and where? Because Rio and MS sell at spot price as of the minute you complete your order. If you're looking as casting grain prices on the website, you're looking at approximate prices as of the last update. If you're ordering a milled product, of course, it's something like spot + 10%.
T27 u MIGHT TRY 310 SW Wasington Link Later Maybe:

Same Board Game as these Tigard #'$ "DOWNTOWN' (http://www.ajpm.com) Silver    $32.64    $32.74      up      1.89
um MAYBE the address is 340 {i forget) on the South Side of the Street though
Title: Re: Financial fuckery thread
Post by: hirley0 on September 27, 2011, 11:51:08 am
http://www.equibase.com/static/chart/quick/index.html?SAP=TN
2:55am the address was 304 Washington {My 4get 'EM . Today at 02:55:22 AM
3:21 bid
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 27, 2011, 04:16:55 pm
http://www.bbc.co.uk/news/business-15057859

Quote
European bank shares have risen as investors react to the latest attempts to stabilise the eurozone debt crisis.

A number of measures are being discussed according to reports from the weekend's international meeting in Washington.

They are expected to involve a 50% write-down of Greece's massive government debt, the BBC's business editor Robert Peston says.

French and German bank shares were up 10% at one stage in Monday trading.

European governments hope to have measures agreed in five to six weeks, in time for a meeting of the leaders of the G20 group in Cannes at the beginning of November.

But EU officials in Brussels stress that they should not be seen as "a single grand plan", the BBC's correspondent Chris Morris says.

Quote
the BBC's correspondent Chris Morris says.

Quote
Chris Morris

This explains oh so very much (http://en.wikipedia.org/wiki/Chris_Morris_%28satirist%29).  We are living in a real life version of Brass Eye (http://en.wikipedia.org/wiki/Brass_Eye).

This explains EVERYTHING !!! :lulz:

Right up to the graphs and statistics!

did you know a banker actually shares 95% of its DNA with the Sea Crab ?
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 27, 2011, 04:24:02 pm

Quote
Chris Morris

This explains oh so very much (http://en.wikipedia.org/wiki/Chris_Morris_%28satirist%29).  We are living in a real life version of Brass Eye (http://en.wikipedia.org/wiki/Brass_Eye).
:ohnotache:
woah....
that just crinkled my head thinking about the economic crisis as a global candid camera.

also, they're kicking around measures that would include a 50% write down of Greece's debt?
I was under the impression that, although the Greeks thought it was inevitable, everyone wanted to do anything they could to avoid default because it could fucking the whole thing....
so, a 50% write down seems like it would still be a huge issue, i would think.  have they simply calculated that it wouldn't likely tip the first domino at that level of reneging?
Title: Re: Financial fuckery thread
Post by: Faust on September 27, 2011, 07:41:42 pm

Quote
Chris Morris

This explains oh so very much (http://en.wikipedia.org/wiki/Chris_Morris_%28satirist%29).  We are living in a real life version of Brass Eye (http://en.wikipedia.org/wiki/Brass_Eye).
:ohnotache:
woah....
that just crinkled my head thinking about the economic crisis as a global candid camera.

also, they're kicking around measures that would include a 50% write down of Greece's debt?
I was under the impression that, although the Greeks thought it was inevitable, everyone wanted to do anything they could to avoid default because it could fucking the whole thing....
so, a 50% write down seems like it would still be a huge issue, i would think.  have they simply calculated that it wouldn't likely tip the first domino at that level of reneging?
If they cancel their debts to the rest of europe but not to the rest of the world?
Title: Re: Financial fuckery thread
Post by: Elder Iptuous on September 27, 2011, 09:26:44 pm
i thought that would fuck some large French banks?  and that that would cascade...
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 27, 2011, 11:34:55 pm
xpost:

A Financial Trader, on the News, telling even a little bit of the ugly truth does not bode well for the rest of us.
http://www.bbc.co.uk/news/business-15078419

Link to the video clip the article talks about:

http://www.bbc.co.uk/news/business-15059135

(for some reason I couldnt find it in your article, but I only just read about it on HN)

WOW I saw the link, hadn't seen the video, that's a fucking hefty elephant dose of TROOF on the BBC right there.



btw I don't really get one thing, he says, "in 12 months people's savings gonna disappear". I have some savings (leftover from insurance money when my apt burnt down 2.5y ago), and they're on my bank account. Not my main every-day paying account, but a sub-account that collects a (tiny) amount of interest (like 2% or so).

How's that going to disappear? They can't just empty out my bank account or anything can they?

Or is it more like that the euros in that account in 12 months will suddenly be able to buy much less than they do now?

In which case I'd need to transform them into assets that do keep their value. Not being a corporation or doing tricky things with stocks and bonds, that would basically mean spending that money to buy physical things, no?

I've been thinking about this and Two "physical" things came to mind, getting my eyes lasered and getting a driver's license (which are kinda expensive in NL, and it's stupid weird that I'm 31 and don't have one). Total that's about EUR 3-4k worth of "thing" to have which is not going to change in value (for me) whether the euro goes up or down or whatever, in fact it's even still exactly as valuable WTSHTF.

Is that the right sort of idea I should be thinking about? Or am I completely looking in the wrong direction? I'm not necessarily wanting to make insane profits or anything, it's just that right now I feel pretty secure and want to keep it that way.


 [and I'm still kinda wondering whether I should dump them into paying off my students debt
Title: Re: Financial fuckery thread
Post by: Precious Moments Zalgo on September 28, 2011, 12:44:07 am
btw I don't really get one thing, he says, "in 12 months people's savings gonna disappear". I have some savings (leftover from insurance money when my apt burnt down 2.5y ago), and they're on my bank account. Not my main every-day paying account, but a sub-account that collects a (tiny) amount of interest (like 2% or so).

How's that going to disappear? They can't just empty out my bank account or anything can they?
It disappears if the bank goes bankrupt and can't repay its depositors.  We have the FDIC in the US, which guarantees deposits up to $100,000 in the event of bank failure.  Do your banks have something similar?
Title: Re: Financial fuckery thread
Post by: Cain on September 28, 2011, 08:03:47 am
Under EU law, similar rules apply, and they are backed directly by government, not via a third party corporate-government entity.  So long as the goverment has money, basic savings are assured.

I suspect he means pensions, savings related to various stocks etc
Title: Re: Financial fuckery thread
Post by: Cain on September 28, 2011, 08:08:30 am
Oh, I remember this guy!  I actually saw him live on BBC 24.  On the one hand, he came across as kind of a douchebag.  But on the other, he said a lot of things which are, well, right.  People did make a killing in the Depression.  As did people in the last recession.  And, like he said, "governments don't rule the world, Goldman Sachs rules the world".  That was the part that made me wonder "who is this guy?  He's being remarkably candid about all of this".
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 28, 2011, 03:07:26 pm
btw I don't really get one thing, he says, "in 12 months people's savings gonna disappear". I have some savings (leftover from insurance money when my apt burnt down 2.5y ago), and they're on my bank account. Not my main every-day paying account, but a sub-account that collects a (tiny) amount of interest (like 2% or so).

How's that going to disappear? They can't just empty out my bank account or anything can they?
It disappears if the bank goes bankrupt and can't repay its depositors.  We have the FDIC in the US, which guarantees deposits up to $100,000 in the event of bank failure.  Do your banks have something similar?

yes. It's something similar and my personal savings are much less than that, so I should be fine :)
Title: Re: Financial fuckery thread
Post by: hirley0 on September 28, 2011, 06:34:04 pm
4:20PM http://www.foodista.com/food/X6576LDB/wisteria at 03:21:42 PM

/-/U?charts_pupU?*2
1 1800(+120) 2 1920(+54) 4 1974(+46) 8 2020
http://en.wikipedia.org/wiki/World_population
(http://photos1.meetupstatic.com/photos/member/6/0/9/c/highres_25404732.jpeg)
http://goldprice.org/bob/2006/08/100-and-25-year-gold-price-charts.html

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

http://www.tuttleassetmanagement.com/100year/Buy_100_Year_Dow_Chart.aspx


As sometime i REMember prices (of comodities {corn cattle copper)
double / ever 20 years THUS in -60 years 150 75 37 18 $/ca some thin like this
it amazes me how Earththings are so laX in the study of the #'$ actually
pop doubles(*2) pr.con 20 40 80 160 (*8){2^3} get over it _- ^ $/Au tbd Later
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on September 29, 2011, 02:09:35 am
Traders more reckless than psychopaths

http://www.spiegel.de/international/zeitgeist/0,1518,788462,00.html (http://www.spiegel.de/international/zeitgeist/0,1518,788462,00.html)
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 29, 2011, 05:13:35 am
4:20PM http://www.foodista.com/food/X6576LDB/wisteria at 03:21:42 PM

/-/U?charts_pupU?*2
1 1800(+120) 2 1920(+54) 4 1974(+46) 8 2020
http://en.wikipedia.org/wiki/World_population
(http://photos1.meetupstatic.com/photos/member/6/0/9/c/highres_25404732.jpeg)
http://goldprice.org/bob/2006/08/100-and-25-year-gold-price-charts.html

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

http://www.tuttleassetmanagement.com/100year/Buy_100_Year_Dow_Chart.aspx


As sometime i REMember prices (of comodities {corn cattle copper)
double / ever 20 years THUS in -60 years 150 75 37 18 $/ca some thin like this
it amazes me how Earththings are so laX in the study of the #'$ actually
pop doubles(*2) pr.con 20 40 80 160 (*8){2^3} get over it _- ^ $/Au tbd Later

It took me a few minutes, but I understood all of that post as well, eventually.
I really wish it wasn't so hard to decipher what you have to say, because it's very clear the things you understand and know are on a higher order than my own.

That's your thing. OK.  I get it.

Let me guess, mathematician?  (that was a stretch, right?)

Challenge accepted. 
I am glad you're posting more.  I like a good challenge.

Nice you meat you hir.  I'm just a pickle with a leisure suit.
Title: Re: Financial fuckery thread
Post by: Triple Zero on September 29, 2011, 12:39:55 pm
Financial fuckery:

http://radian.org/notebook/porsche

interesting and entertaining story as Porsche ripped the hedgers several billions of new assholes.
Title: Re: Financial fuckery thread
Post by: Cain on September 29, 2011, 12:50:40 pm
OK, that is pretty funny (barring the suicide thing).

To use a HP&MoR phrase, the hedge funds were playing a level one game, and Porsche were playing a level two game. 
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 29, 2011, 01:01:10 pm
This comment cleared up some questions I had about this regarding disclosure.  Still, good story.

Quote
Volker Hirsch said,

January 10, 2009 @ 1:05 pm

Ivan, this is a very nice account of how shorting works (or, incidentally, does not work). However, you are simplifying things a little: Under German law, a takeover offer has to be made whenever a the shareholding exceeds 30% of the shares of the target. This was the case in late March 2007, and Porsche made a mandatory offer on 28 March 2007 (they also made an offer for all shares in Audi on 16 September 2008). I do believe – and I think this is identical even in the US – that options (not to be confused with executive options) for shares trigger (additional?) mandatory takeover offers or indeed disclosure requirements (unless you are an executive of the company in question), and this is because you can not actually exercise corporate control in any way when you are merely an options holder. It is therefore not nearly as dark and wild-west as you made it appear (although the German public did indeed act very, very surprised over all this).

I also think that some background could have been added: Ferdinand Piech, a member of the Porsche dynasty, used to be VW’s CEO and then their non-executive Chairman of the Board. However, there seemed to have been a little bit of a family feud between two strands of the Porsche family…

There are two more aspects that deserve noting, namely:

a) the 20% holding of Lower Saxony. There is a law in place (probably illegal and constantly challenged by the European Commission) whereunder no one can hold more than X% of the voting rights as long as Lower Saxony (the German state where VW’s HQ and biggest German plants are based) has a shareholding, effectively preventing the acquisition of full control. Porsche did not like that law but will have impacted short-term corporate control.

b) the history of Porsche and the Porsche family in relation to VW as well as the old-fashioned German industrial culture; for decades, the takeover of large German companies was virtually impossible due to solid cross-shareholding blocks regularly involving Deutsche Bank (Daimler Benz), Allianz Insurance and a number of families and concerns. This was not, however, due to profit maximization or greed, etc but an old-fashioned closed-shop attitude coupled with a sense of entrepreneurial responsibility for the affairs of the state. I doubt that the Porsche board had really been scheming this in order to make a mint through a short squeeze. They were after more! They were after control of the German car industry (Porsche, VW, Audi; bear in mind that the latter two also own Bentley, Lamborghini, Bugatti, etc). Only BMW and Mercedes-Benz are left now that Opel (GM-owned) and Ford are struggling under the woes of their US holding companies.
Title: Re: Financial fuckery thread
Post by: hirley0 on September 29, 2011, 02:35:35 pm
U29 Si' (Comprenda' ! & thanks
don't care much for switching languages at an mS rate
however the sequence seams to have been set ?/? Pueblo, ChalkTalk,
& Navaho (probably NOT Salt {read rights to Left 5:30AM B
OK? where was I? {{ Fountain Lobby 1-3PM Tuesday }} it Thursday
& ReBooT week so yeah?no No doubt the Races begin this Month ..
here in town | http://www.portlandmeadows.com/Entries/Entries/


4:20PM http://www.foodista.com/food/X6576LDB/wisteria at 03:21:42 PM

/-/U?charts_pupU?*2
1 1800(+120) 2 1920(+54) 4 1974(+46) 8 2020
http://en.wikipedia.org/wiki/World_population
(http://photos1.meetupstatic.com/photos/member/6/0/9/c/highres_25404732.jpeg)
http://goldprice.org/bob/2006/08/100-and-25-year-gold-price-charts.html

http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

http://www.tuttleassetmanagement.com/100year/Buy_100_Year_Dow_Chart.aspx


As sometime i REMember prices (of comodities {corn cattle copper)
double / ever 20 years THUS in -60 years 150 75 37 18 $/ca some thin like this
it amazes me how Earththings are so laX in the study of the #'$ actually
pop doubles(*2) pr.con 20 40 80 160 (*8){2^3} get over it _- ^ $/Au tbd Later

It took me a few minutes, but I understood all of that post as well, eventually.
I really wish it wasn't so hard to decipher what you have to say, because it's very clear the things you understand and know are on a higher order than my own.

That's your thing. OK.  I get it.

Let me guess, mathematician?  (that was a stretch, right?)

Challenge accepted. 
I am glad you're posting more.  I like a good challenge.

Nice you meat you hir.  I'm just a pickle with a leisure suit.
Title: Re: Financial fuckery thread
Post by: BabylonHoruv on September 29, 2011, 05:58:00 pm
OK, that is pretty funny (barring the suicide thing).

To use a HP&MoR phrase, the hedge funds were playing a level one game, and Porsche were playing a level two game. 

Personally I'd like to see more wealthy people commiting suicide.  If he'd been an American he would most likely have been bailed out.
Title: Re: Financial fuckery thread
Post by: LMNO on September 29, 2011, 08:42:59 pm
OK, that is pretty funny (barring the suicide thing).

To use a HP&MoR phrase, the hedge funds were playing a level one game, and Porsche were playing a level two game. 

Personally I'd like to see more wealthy people commiting suicide.  If he'd been an American he would most likely have been bailed out.

Hey, guess what?  Fuck you.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 29, 2011, 08:47:25 pm
I had written up a wordy, not very nice reply to that over lunch and deleted it because it was pissing me off and I'm in a pretty damn good mood today and don't want to change that.

But yeah, LMNO.  Sometimes 2 words is more than enough.
Title: Re: Financial fuckery thread
Post by: Cain on September 29, 2011, 09:03:10 pm
Former member of the Bush Economic Team, Phillipa Malmgren (http://www.pippamalmgren.com/75.html), is predicting Germany is going to reintroduce the Deutsche Mark:

http://www.pippamalmgren.com/77.html

Quote
News to expect in the coming days and weeks:

    * Greece defaults
    * Germany protects German banks but other countries cannot do the same thus quickly provoking multiple sovereign defaults and or bank failures, all of which may easily lead to a payments crisis in the global banking system. Derivatives are particularly at risk in terms of operation and execution.
    * The Euro falls in value especially against the US dollar
    * The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.
    * The Euro falls even more on any news that Germany is withdrawing from the Euro.
    *  Legal wrangling begins as to the legality of Germany’s decision. Resolution takes years.
    * Germany insists that the Euro continues to exist even they do not use it any longer. They emphasize that European unification will continue and suggest new legal instruments to strengthen European Unification including new EU Treaties.

If true....woah.
Title: Re: Financial fuckery thread
Post by: Faust on September 29, 2011, 09:22:13 pm
OK, that is pretty funny (barring the suicide thing).

To use a HP&MoR phrase, the hedge funds were playing a level one game, and Porsche were playing a level two game.  

Personally I'd like to see more wealthy people commiting suicide.  If he'd been an American he would most likely have been bailed out.

I'm wealthy and I hope you commit suicide, it would make me feel more wealthy.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 29, 2011, 09:24:48 pm
OK, that is pretty funny (barring the suicide thing).

To use a HP&MoR phrase, the hedge funds were playing a level one game, and Porsche were playing a level two game. 

Personally I'd like to see more wealthy people commiting suicide.  If he'd been an American he would most likely have been bailed out.

Personally, I'd like to see more people on welfare committing suicide.
Title: Re: Financial fuckery thread
Post by: Mesozoic Mister Nigel on September 29, 2011, 09:25:44 pm
Of course, we have to take into consideration that the main reason he wants to see people commit suicide is so he can get his rocks off.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 29, 2011, 10:52:27 pm
I thought it was because making stupid, inflammatory statements gets people to respond to him.
Title: Re: Financial fuckery thread
Post by: hirley0 on September 29, 2011, 10:59:55 pm


2











I had written up a wordy, not very nice reply to that over lunch and deleted it because it was pissing me off and I'm in a pretty damn good mood today and don't want to change that.

But yeah, LMNO.  Sometimes 2 words is more than enough.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 29, 2011, 11:04:24 pm


2

I meant the important ones hir.









I had written up a wordy, not very nice reply to that over lunch and deleted it because it was pissing me off and I'm in a pretty damn good mood today and don't want to change that.

But yeah, LMNO.  Sometimes 2 words is more than enough.
Title: Re: Financial fuckery thread
Post by: Cain on September 30, 2011, 11:33:54 am
http://www.bloomberg.com/news/2011-09-30/morgan-stanley-seen-as-risky-as-italian-banks-in-swaps-market.html

Quote
Morgan Stanley (MS), which owns the world’s largest retail brokerage, is being priced in the credit- default swaps market as less creditworthy than most U.S., U.K. and French banks and as risky as Italy’s biggest lenders.

The cost of buying the swaps, or CDS, which offer protection against a default of New York-based Morgan Stanley’s debt for five years, has surged to 456 basis points, or $456,000, for every $10 million of debt insured, from 305 basis points on Sept. 15, according to prices provided by London-based CMA. Italy’s Intesa Sanpaolo SpA (ISP) has CDS trading at 405 basis points, and UniCredit SpA (UCG) at 424, the data show. A basis point is one-hundredth of a percent.
Title: Re: Financial fuckery thread
Post by: hirley0 on September 30, 2011, 12:37:47 pm


ok Lemme get back to political realALity
from the '96 eLection (in Oregon) REMember in OUght eLeven/TWELVE
IZ RUNNING for Dictator. it started years ago in Portland Or.
the outgoing Mayor opened the Political process and 19people ran
it cost $40 to sign on so i paid $40  what ever year it was & got my .pic
in the Oregonian, the local NEws PAPER i got 40 votes according to eLections
ploting the votes counted vs $ SPENT it was a straight line UP from 40V/40$
to the top, the top two EarL & K* were not installed & Margret was put in
END of $ Dime after that i never bothered with the Media $ and every eLection
ran for one office or another (via Talk radio) pre Computers & on Computers
once that was possible (by '96) in 96 i ran against Hatfield because i did
think sending all of Oregons Forest to Japan for tha Maid in Japan TV docQue
drama anti HiR about NewClear power was wrong
So anyway wanting to make sure you UNderstood this instead of running
against just the one up for reeLection i took a Zerox copy of the LegaL
paper the go Mint had requested to both senators office. they both resigned
& THAT is the way it was. boo2u2  never heard a PeeP

I had written up a wordy, not very nice reply to that over lunch and deleted it because it was pissing me off and I'm in a pretty damn good mood today and don't want to change that.

But yeah, LMNO.  Sometimes 2 words is more than enough.
Title: Re: Financial fuckery thread
Post by: Disco Pickle on September 30, 2011, 02:09:50 pm


ok Lemme get back to political realALity
from the '96 eLection (in Oregon) REMember in OUght eLeven/TWELVE
IZ RUNNING for Dictator. it started years ago in Portland Or.
the outgoing Mayor opened the Political process and 19people ran
it cost $40 to sign on so i paid $40  what ever year it was & got my .pic
in the Oregonian, the local NEws PAPER i got 40 votes according to eLections
ploting the votes counted vs $ SPENT it was a straight line UP from 40V/40$
to the top, the top two EarL & K* were not installed & Margret was put in
END of $ Dime after that i never bothered with the Media $ and every eLection
ran for one office or another (via Talk radio) pre Computers & on Computers
once that was possible (by '96) in 96 i ran against Hatfield because i did
think sending all of Oregons Forest to Japan for tha Maid in Japan TV docQue
drama anti HiR about NewClear power was wrong
So anyway wanting to make sure you UNderstood this instead of running
against just the one up for reeLection i took a Zerox copy of the LegaL
paper the go Mint had requested to both senators office. they both resigned
& THAT is the way it was. boo2u2  never heard a PeeP

I had written up a wordy, not very nice reply to that over lunch and deleted it because it was pissing me off and I'm in a pretty damn good mood today and don't want to change that.

But yeah, LMNO.  Sometimes 2 words is more than enough.

I'm completely lost on this in relation to the topic.  I'll try again after I mainline some more caffeine.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 30, 2011, 02:28:17 pm
This summed up a lot for me:

"Patience is running out in the international community," Osborne said. "The eurozone has six weeks to resolve this political crisis."

SIX WEEKS!

We've been talking about how to resolve this crisis for two months. More, really! Part of what has the markets shitting bricks is the fact that nothing actually seems to be happening! People talk and talk and talk but there have been very few and very stilted measures put in place to try and fix anything.

This kind of statement really makes it hard to imagine politicians are actually taking this seriously. Six weeks is a hell of a long time, and even if that is seen as the timetable, he should be saying that it needs to be resolved as soon as possible, not saying there's probably at least another six weeks of bibble ahead.
Title: Re: Financial fuckery thread
Post by: Cain on September 30, 2011, 02:32:07 pm
I thought that statement was a perfect example of Osbourne's childishness and lack of political experience.

I expect the ECB said "yes, George dear", patted him on the head, burped him and put him to bed, then went back to their discussions.
Title: Re: Financial fuckery thread
Post by: Jenne on September 30, 2011, 03:29:43 pm
I had written up a wordy, not very nice reply to that over lunch and deleted it because it was pissing me off and I'm in a pretty damn good mood today and don't want to change that.

But yeah, LMNO.  Sometimes 2 words is more than enough.

I did the same.

Title: Re: Financial fuckery thread
Post by: Jenne on September 30, 2011, 03:47:22 pm
I thought that statement was a perfect example of Osbourne's childishness and lack of political experience.

I expect the ECB said "yes, George dear", patted him on the head, burped him and put him to bed, then went back to their discussions.

:lulz:

And I think that "six weeks" is probably contingent on some policy or other running out or expiring at that point in time?  I thought it was policy-related, that time frame...or maybe I heard the NPR report wrong, I disremember.
Title: Re: Financial fuckery thread
Post by: Cain on September 30, 2011, 03:48:32 pm
I believe six weeks from when he said it is the end of October...when Greece runs out of money, without another tranche of the bailout cash being provided.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 30, 2011, 03:51:04 pm
It was the deadline for when leaders of the G20 group will next meet IIRC. I think it was only said a few days ago... could be mistaken though, there's a lot of stupid pouring out of financial news.
Title: Re: Financial fuckery thread
Post by: Jenne on September 30, 2011, 03:55:56 pm
THAT's what it was.
Title: Re: Financial fuckery thread
Post by: Cain on September 30, 2011, 05:17:27 pm
If that is the reasoning, Osborne's even more of a neophyte than I previously thought.

G20 = utterly useless talking shop, whose only purpose is to make the EU decision-making process look speedy and efficient.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on September 30, 2011, 05:20:33 pm
Every word out of Osbourne's mouth makes me wish Vince Cable had somehow wrested the job from him.

Possibly in some sort of cage match. Cable might be old, but he's also a survivor, and I think Osbourne would faint at the sight of his own blood.
Title: Re: Financial fuckery thread
Post by: deadfong on October 01, 2011, 02:40:16 am
Former member of the Bush Economic Team, Phillipa Malmgren (http://www.pippamalmgren.com/75.html), is predicting Germany is going to reintroduce the Deutsche Mark:

http://www.pippamalmgren.com/77.html

Quote
News to expect in the coming days and weeks:

    * Greece defaults
    * Germany protects German banks but other countries cannot do the same thus quickly provoking multiple sovereign defaults and or bank failures, all of which may easily lead to a payments crisis in the global banking system. Derivatives are particularly at risk in terms of operation and execution.
    * The Euro falls in value especially against the US dollar
    * The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.
    * The Euro falls even more on any news that Germany is withdrawing from the Euro.
    *  Legal wrangling begins as to the legality of Germany’s decision. Resolution takes years.
    * Germany insists that the Euro continues to exist even they do not use it any longer. They emphasize that European unification will continue and suggest new legal instruments to strengthen European Unification including new EU Treaties.

If true....woah.

Looking through her article, all I could find was this:
Quote
His [meaning the German finance minister] reference to “monetary reform” is telling. He did not say “fiscal reform”. Fiscal reform would potentially cure the problem. Instead he says “monetary reform” meaning Germany pulls out of the Euro and prints DMarks again.

I'm not savvy enough on economic terminology - is that really how economists would read the difference  between "fiscal" and "monetary?"

Also, I may have missed it, but I couldn't find a reference to Germany having already ordered the new currency anywhere in her article.  Seems like if it's true, that's not the sort of move that would be easy to hide, and if it is the case, why hasn't the shit hit the fan already?
Title: Re: Financi 1st WEEK / Oct
Post by: hirley0 on October 01, 2011, 04:58:01 pm
Sat 10/1 Gold Silver & Copper wiLL be reMonitized (revalued)
as happens prior to most RIF (Reductions in Force) TBC
ALSO Old Oregon FOREST tree WOOD contaminated by Japanese ACTIVITY wiLL be too
= = = ===
S2 Listen? its ReBooT week eXpect NOTHing links to 35$ gold T
M3 YEAH THERE aRe links somewhere & C Me's 2 Not today?
Title: Re: Financial fuckery thread
Post by: Triple Zero on October 01, 2011, 05:46:25 pm
Also, I may have missed it, but I couldn't find a reference to Germany having already ordered the new currency anywhere in her article.  Seems like if it's true, that's not the sort of move that would be easy to hide, and if it is the case, why hasn't the shit hit the fan already?

Yes, I wondered about that as well.

I scanned the article and couldn't find it either, except the statement Cain quotes. All the rest is a lot of very technical financial arguments, so I can't judge a lot about the validity of those, but if Germany has already ordered and urging the printers to hurry up, that's a very clear signal.

Asking my gf (who's German) she said there's only a tiny minority party (less than 1%) in Germany that wants to get rid of the Euro, though I don't know the details of that either. And it could very well be that some major parties would go along as soon as the financial institutions say it's the only way.
Title: Re: Financial fuckery thread
Post by: Cain on October 01, 2011, 06:12:06 pm
It should be pointed out, the person I quoted is a political analyst for a financial consulting firm - their job is to outguess the headlines, and before they become headlines.

She seems to be a fairly credible person, her association with the Bush administration nonwithstanding - therefore while I'm sceptical of such a claim, I cannot completely dismiss it.  I would imagine, if Germany were looking to reintroduce the Mark, it would initially be under circumstances of great secrecy, with only the very politically connected able to find out what is going on.

If that is indeed the case.  There are...vested interests in seeing the Euro destroyed, after all, and such news could be disinformation, calculated to spread dissension in European Union ranks.  Either way, it is worth keeping an eye on...just in case.
Title: Re: Financial fuckery thread
Post by: Cain on October 02, 2011, 01:05:21 pm
Nice to see that economic reform is strengthening the UK economy http://www.guardian.co.uk/society/2011/oct/01/sharp-rise-demand-food-handouts

Quote
Britain has seen a sharp increase in the number of people unable to afford to feed themselves at the most basic level, thanks to the worsening economic climate and changes to the benefit system, according to a survey by a leading food charity.

In the past year FareShare, which redistributes waste food from major food manufacturers and supermarkets to social care charities, has seen a 20% rise in the number of people it is feeding – from 29,500 a year to 35,000.

And many of those, blighted by rising unemployment and business failures, are coming from the sorts of stable family backgrounds once considered immune to the worst effects of recession.

Something is going to have to give, eventually.  Sadly, I think it is more likely to be these poor saps than somone more deserving of such a fate.
Title: Re: Financial fuckery thread
Post by: Cain on October 05, 2011, 08:15:59 am
http://www.bbc.co.uk/news/business-15176947

Quote
The Italian government's credit rating has been slashed by Moody's from Aa2 to A2 with a negative outlook.

The ratings agency blamed a "material increase in long-term funding risks for the euro area", due to lost confidence in eurozone government debts.

Despite Rome's low current borrowing needs, and low private-sector debt levels in Italy, Moody's said market sentiment had turned against the euro.

Prime Minister Silvio Berlusconi said the decision was expected.

Quote
Analysts say Italy's downgrade is likely to be followed by similar cuts in the credit rating of Italy's banks, which would put severe pressure on their ability to borrow.

"This downgrade will make it even harder for Italy to borrow," says BBC business editor Robert Peston. "However, that is not the worst of it.

"If Italy is looking like a more risky place to lend, its banks... will find it harder and more expensive to borrow. The [eurozone] banking crisis will be exacerbated."

The rationale for Moody's downgrade will also be worrying for other eurozone governments, such as Spain, whose borrowing costs have also risen like Italy's as markets have lost confidence in their creditworthiness.

Moody's also raised warnings about Italy's growth outlook, citing structural economic problems in Italy, as well as the global economic slowdown.

Another problem noted by the rating agency was what it called political and economic "implementation risks".

"The question is, if [eurozone governments] will move fast enough... to really put in place a credible solution," says Robert Peston.

Quote
The Italian government has for several years earned more in tax revenues than it spends. However, the government also has a large outstanding debt - equivalent to nearly 120% of GDP.

The government relies heavily on the markets' willingness to relend these debts as they come due, and to lend it the cost of meeting its interest payments.

Moody's said that Italy could be further downgraded to "substantially lower rating levels" if a further deterioration in investor sentiment made it even harder for the country to raise cash from the markets.

Italy's cost of borrowing rose sharply over the summer on market fears that a slowdown in Italian growth could make existing debts unsustainable.

That prompted the European Central Bank to intervene by buying up Italy's debts - a controversial policy in Germany. But despite the ECB's action, Italian borrowing costs have begun to creep up again in recent weeks.

Fuck
Title: Re: Financial fuckery thread
Post by: Faust on October 05, 2011, 08:52:37 am
Things are going to move faster now. There was going to be a bit of time between Greece's inevitable bailout and Italy going broke but now we're probably going to go straight from one to then next, if If not before... Having to deal with Greece and Italy at the same time would be disastrous.
Title: Re: Financial fuckery thread
Post by: Cain on October 05, 2011, 09:11:07 am
One of the many problems with the EU is that, while it recognizes it has a serious problem when it comes to crisis decision-making, historically it has only recognized a need for crisis decision-making in terms of military-conflict zones, such as the Bosnian and Kosovo Crisis.  In other words, it has worked to overcome its institutional paralysis, but only when it comes to those issues.  It was never considered that crisis mechanisms might be required for economic decision-making.

Probably because the EU was built during a time when the ratings agencies weren't acting like marauding bandits, destabilizing national economies for fun and profit.

To be honest, I am surprised they are even managing to cope with the Greece crisis.  If an Italian crisis does hit at the same time...as you say, it would be disastrous.
Title: Re: Financial fuckery thread
Post by: Cain on October 05, 2011, 09:44:49 am
David Cameron, economic genius:

http://www.bbc.co.uk/news/uk-politics-15171917

Quote
David Cameron is expected to tell UK households to pay off their credit and store card debts in his keynote speech to the Conservative conference later.

The prime minister will argue that the debt crisis was caused by individuals - as well as businesses, banks and government - borrowing too much.

Pay it off with what?  I'm in a privileged position here, I admit, the only debt I have to pay off is my student loan, and depending on exactly how quickly I want rid of it, I could do that in two years.  Most people, however, are not in my position.  They are suffering wage freezes, job uncertainty and rising commodity prices.  They are lucky to be breaking even, and a lot of people are living a couple of paychecks away from bankruptcy.

And the debt crisis was caused by individuals - but not the ones with too much debt on their credit cards.  More like individuals in charge of the investment arms of Barclay's Bank - who played a very worrying role in the collapse of Lehman Brothers, those who decided to offer loans without even minimal checks on ability of their customers to pay, and those who gave such loans triple A credit ratings.  Oh, and those who then bunched together those loans into CDOs and sold them far and wide, those banks who forged ahead purposefully with a policy of maximum exposure (so they would be "too big to fail") etc etc

Private, individual debt is only a problem because the banks and the government insist on using the taxpayers as lenders of first resort and there isn't enough in the coffers to keep that kind of game going on for too long.
Title: Re: Financial fuckery thread
Post by: Demolition_Squid on October 05, 2011, 09:47:54 am
Christ, what an asshole.

The Conservatives really are determined to prove they have no fucking clue what the situation of the vast majority of people actually is.
Title: Re: Financial fuckery thread
Post by: Faust on October 05, 2011, 09:51:58 am
If all these awful poor people would pay off their credit cards we wouldn't be in this mess.
Title: Re: Financial fuckery thread
Post by: Cain on October 05, 2011, 10:02:37 am
The Conservative Conference (and the media reaction to it) has been a steady source of lail for the past few days.

In Chateau Cain, many laughs were had at the Guardian writers who kept on insisting Iain Duncan-Smith was the moral, progressive and compassionate heart of the coalition government.  He of the "get on a bus" to find work and "work for free and maybe you'll get hired eventually" fame, and of constant lying on his CV does not strike us as very compassionate or moral.

Not to mention Teresa May's now infamous lying about the ECHR, deportation and cats.  Even the media could not pretend to soberly assess so utterly obvious a lie.

Praising Boris Johnson's well practised approach of public idiocy - completely missing the point that he does it precisely so the papers wont take him seriously, nor punish him unduly for his incompetence and bizarre policy choices.

But back to the economics.  There is a general strike in Greece today.  I'm not sure how that differs from the 20 or so other general strikes since 2008, but I thought you'd all like to know.
Title: Re: Financial fuckery thread
Post by: Cain on October 05, 2011, 10:40:27 am
http://www.guardian.co.uk/business/2011/oct/04/financial-crisis-welcome-to-new-normal

Quote
Panic on markets reflects a growing mood that Greece will inevitably default, triggering another Great Depression

Welcome to the new normal. Billions of pounds were wiped off the value of shares in London on Tuesday 4 October. Dexia, a bank jointly owned by the French and the Belgians, teetered on the brink of collapse. One of the main barometers of Wall Street sentiment slid into bear-market territory. An emergency press conference called by Greece's finance minister was delayed because the building was being picketed by civil servants.

The UK construction sector looked like it was heading for recession as public sector projects dry up and in Spain more than one in five are out of work. The French and Belgian governments were forced to pledge that no depositor in Dexia would lose a cent let alone a euro as they tried to avoid a Northern Rock-style run on the bank. Traders, unsurprisingly, were scrabbling for their tin hats.

The turmoil overshadowed the Conservative party conference in Manchester just as it did three years ago in Birmingham when the shock waves from the collapse of Lehman Brothers diverted attention from David Cameron's attempts to portray himself as a prime minister in waiting. Coalition ministers know now, as Gordon Brown as his team knew then, that the global economy is teetering on the brink of recession. Jean Claude-Trichet, in his last few days as president of the European Central Bank, said: "We are experiencing the worst crisis since world war two."

The man in charge of America's central bank, Ben Bernanke, said the Federal Reserve would do whatever it takes to get the US economy moving again. His comments helped lighten the mood on Wall Street and limit the fall in London's FTSE 100 to 131 points.

Even so, the FTSE closed below 5000 for the first time since July 2010.

For those who believe that history repeats itself, Dexia plays the role of Bear Stearns in this unfolding tragedy. The US government found a buyer for the Bear in the spring of 2008 but failed to do the same for Lehmans six months later. Dexia will be saved courtesy of French and Belgian taxpayers. Next up is Greece, and there the endgame is now inevitably going to be default.

The panic-stricken reaction of the markets over the past few days reflects a growing mood in the financial markets that the default will not be managed and orderly but messy, with knock-on effects not just for the rest of the eurozone but for the entire world economy.

Banks will go bust, credit will dry up, trade will wither, jobs will be shed. Greece, Lehman Brothers 2.0, will be the prelude to the second Great Depression, something policy-makers were congratulating themselves on avoiding only a few months ago.

http://www.dsnews.com/articles/job-loss-could-put-one-in-three-homeowners-out-of-their-home-2011-09-30

Quote
Despite being more affluent, the poll found that even those with higher annual household incomes indicate they are not guaranteed to make their next housing payment if they lost their source of income.

Ten percent of survey respondents earning $100K or more a year say they would immediately miss a pay