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Post by sandi66 on Mar 7, 2008 10:02:40 GMT -5
By: pelicanbrief114 07 Mar 2008, 09:52 AM EST Msg. 678571 of 678581 Jump to msg. # Suspended/Halted Carlyle Capital Suspended; Lenders Force Asset Sales (Update3) By Edward Evans and Cathy Chan March 7 (Bloomberg) -- Carlyle Group's mortgage-bond fund was suspended in Amsterdam trading after creditors forced the sale of some holdings, jeopardizing shareholders' capital. Lenders who issued default notices have liquidated some residential mortgage-backed securities held by the fund and may sell more as talks continue, Carlyle Capital Corp. said in a statement today. The fund had ``substantial'' margin calls and additional default notices from lenders yesterday, it said. Carlyle Capital said yesterday it had failed to meet margin calls, prompting creditors to seek immediate repayment. Started by David Rubenstein in 1987, Carlyle increased its mortgage holdings last year, selling $300 million of shares in Carlyle Capital. The fund used leverage to buy about $22 billion of AAA rated mortgage debt issued by Fannie Mae and Freddie Mac. ``This marks a further savage step in the ongoing credit implosion of recent months,'' Keith Baird, an analyst at Bear Stears Cos. in London, wrote in a note to clients today. ``The liquidation of the fund cannot be excluded nor the potential loss of capital, rendering the shares worthless.'' Carlyle Capital was suspended in the Netherlands at the request of the securities regulator AFM after falling 58 percent yesterday to $5. The stock is halted pending a statement from Carlyle, AFM spokesman Paul van Dijk said. Carlyle sold the shares for $19 in July's initial public offering. `Impaired Capital' Risk The fund said today the additional margin calls and increased collateral requirements ``could quickly deplete its liquidity and impair its capital'' as they would be ``well in excess'' of the margin calls received two days ago. Emma Thorpe, a spokeswoman for Carlyle in London, wouldn't comment beyond the fund's statement. Carlyle Capital has received a $150 million credit line from Carlyle Group since August. It hasn't said how much of that line remains. The fund's fate may depend on ``the attitude of the Carlyle Group as to the extent of its further support, if indeed there is any,'' analyst Baird wrote. The effect of the U.S. subprime mortgage market collapse has spilled over into top-rated agency debt, knocking down the value of the residential mortgage-backed securities. The Guernsey, U.K.-based fund said the agency mortgages it holds have the ``implied guarantee'' of the U.S. government. The agency mortgage-bond market has about $4.5 trillion of securities, according to estimates from UniCredit SpA. The spread between 30-year agency mortgage bonds and 10-year U.S. Treasuries widened to more than 200 basis points this week, the highest since 1986, according to data compiled by Bloomberg. The Carlyle fund said it missed four of seven margin calls worth more than $37 million. It said today it believed it had sufficient liquidity as of last week. The $ 600+ Trillion "Unwinding" continues. Thinking "T's" as opposed to "B's". Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Developing........... ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=678571
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Post by sandi66 on Mar 8, 2008 13:09:54 GMT -5
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Post by sandi66 on Mar 9, 2008 12:08:11 GMT -5
By: pelicanbrief114 09 Mar 2008, 11:18 AM EDT Msg. 680436 of 680448 Jump to msg. # Hotel California Da Boyz version: "Check in any time you like BUT you can never leave." www.nytimes.com/2008/03/09/business/09gret.html?ref=business Developing...... Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Fun Day!! ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=680436------------- As Good as Cash, Until It’s Not Published: March 9, 2008 INVESTORS across the nation are finding themselves in Wall Street’s version of the Hotel California: they have checked into an investment they can never leave. The investments, which Wall Street peddled as a cash equivalent, are known as auction-rate notes. They’re debt instruments carrying rates that reset regularly, usually every week, after auctions overseen by the brokerage firms that originally sold them. They have long-term maturities or, in fact, no maturity dates at all. But because the notes routinely traded hands at auctions, Wall Street convinced investors that they were just as good as cold, hard cash. Lo and behold, the $330 billion market for auction-rate notes ground to a halt in mid-February when bids for the securities disappeared. Investors who thought they could sell their holdings easily are now stuck with them. It turns out that the only thing that’s really just as good as cash is, well, cash. While investors pray for a resurrection in the auction market, they are receiving a fixed interest rate outlined in offering documents. Historically, these securities have paid approximately one percentage point more than money market funds. Many purchasers of these notes are relatively small individual investors; several years ago, banks dropped the minimum investment in them to $25,000 from $250,000. Municipalities and other tax-exempt institutions have issued most of the current crop of auction-rate notes. But closed-end mutual funds issued $65 billion worth. Such borrowings provide leverage to the funds, letting them generate slightly higher yields for their common stockholders. Closed-end funds that issue auction-rate notes typically sell them in amounts worth one-third the value of their underlying assets. For example, the John Hanthingy Tax-Advantaged Dividend Income fund, with $1.17 billion in assets, has issued $380 million in auction-rate notes. Owners of notes issued by closed-end funds are faring far worse than investors stuck with municipal issues. That’s because the interest rates paid on municipal notes when auctions fail are capped at as much as 12 percent, much higher than the caps on closed-end fund notes, which are currently around 3.25 percent. In other words, holders of closed-end fund notes receive little to no premium for being stranded. Even airlines try to give you a free meal or an upgrade when they leave you at the gate. Investors are likely to remain in this vise because closed-end fund issuers have no incentive to redeem their notes since the interest rates resulting from the failed auctions are so low. Some customers who have tried to get their brokers to cash them out say the firms have responded by offering to let them borrow against the value of these securities. At a cost, of course: the typical margin rate for borrowers is at least 7 percent at most shops. Other holders are selling the notes at a deep discount to speculators willing to buy distressed securities. Wall Street made generous fees issuing these securities and running the auctions — as long as there were bidders. After the bidders vanished, some firms stepped in and bid for the securities for a while, giving investors a way out. No more. What’s the sense stretching your already-thin balance sheet just to keep a market open for your customers? In interviews, investors who own these securities say they weren’t warned that they might not be able to sell them if an auction failed. They say they were told that the instruments were as safe and liquid as — yes, you guessed it — cash. Stephen N. Joffe, a client of UBS Financial Services, is suing the firm because it put all $1.35 million of his charitable foundation’s cash into auction-rate securities issued by Eaton Vance Limited Duration funds. This, even though he said he explicitly told the broker to take no risk and that he would need constant access to the funds. Dr. Joffe, 65, is a former professor of surgery who founded LCA-Vision Inc., a company that operates laser vision-correction centers. “I never asked my broker to get me a better rate,” he said. “I felt the responsibility to maintain this account as a risk-free account. I believed this was in the equivalent of an overnight money market account.” Now, the Joffe Foundation can no longer fund programs that help prevent AIDS in Africa, provide indigent people with laser vision correction and correct the cleft palates of African children. “This was another hit and run by Wall Street,” said Jacob H. Zamansky, a lawyer in New York who represents Mr. Joffe. “The banks reaped huge fees on the auctions and underwriting, then left investors holding the bag.” UBS declined to comment. IN recent days, executives at several closed-end funds have held conference calls with stricken investors. But the investors say that none of those funds have offered to redeem their auction-rate notes. That’s not surprising: their fee structures give them no incentive to buy out investors. Unlike no-load mutual funds, closed-end funds are sold, not bought. They often decline to prices that are a discount from their net asset values after they are first offered for sale. One reason for the discount is that it reflects the brokers’ commissions. But Arthur D. Lipson, an investor in distressed securities and a principal at Western Investment LLC, argues that these discounts present an opportunity for closed-end funds to do the right thing, for both common and preferred shareholders. Here is Mr. Lipson’s solution: Because these funds trade at discounts, he suggests that their managers sell underlying securities — utility stocks and shares of real estate investment trusts — and use the proceeds to buy back common shares. This would shrink the size of the funds and allow them to redeem some of the preferred shares they issued to increase the fund’s yield. Managers hate this idea, Mr. Lipson said, because it would severely reduce the management fees they receive, based on the assets in the funds. So he has mounted proxy fights at three funds, seeking board representation to try to force them to follow his prescription. The three funds are John Hanthingy Tax-Advantaged Dividend Income, which trades at around 7.5 percent less than its net asset value; the Cohen & Steers REIT and Utility Income fund, trading at a 10.5 percent discount; and Cohen & Steers Select Utility, which carries a 5 percent discount. “The directors of these funds have ignored their responsibilities to the shareholders and have chosen to protect the managers’ fee income,” Mr. Lipson said. “These are not operating companies where moms and pops would be out of work. They are merely financial engineering companies.” Officials at the funds contend that Mr. Lipson is a speculator out for a fast buck. They urge shareholders to vote against him, saying that they have taken steps to improve fund performance. As for the frozen market for auction-rate notes, both fund companies say they are working with regulators on a solution. The annual meeting for shareholders in the John Hanthingy fund is scheduled for March 31; shareholders in the two Cohen & Steers funds will vote on Mr. Lipson’s dissident slate the next day. That is about the time that investors will receive their first brokerage statements reflecting major declines in the value of auction-rate notes. It certainly would be a happy ending to this mess if closed-end funds were forced to redeem the notes by selling holdings as Mr. Lipson suggests. Stay tuned. www.nytimes.com/2008/03/09/busine....ess&oref=slogin
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Post by sandi66 on Mar 10, 2008 15:28:41 GMT -5
By: pelicanbrief114 10 Mar 2008, 03:30 PM EDT Msg. 681526 of 681569 (This msg. is a reply to 681459 by sparkysantos.) Jump to msg. # Sparky The "Street Sweepers" continue to rumble throughout, in abundance. Much Much more to follow. Taking out the trash. Bonfires rage; Tremors; After Shocks. Hard Hat's; Hip Boots; Full body Jumpers anyone? Grab some "Popcorn" and a beverage of desire and Enjoy the "Show." Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Wonderful Day!! ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=681526
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Post by sandi66 on Mar 11, 2008 22:28:17 GMT -5
By: pelicanbrief114 11 Mar 2008, 07:21 PM EDT Msg. 682486 of 682612 (This msg. is a reply to 682464 by maheumayhem.) Jump to msg. # M Squared Very well spoken. While there are those who may have as of yet to grasp/fathom the magnitude, nevertheless, such is essentially inconsequential. For when the Final Bell "Tolls", these Fine people (Shareholders) will have partaken in the altering of the Global Economic/Geopolitical landscape for the good of mankind. I nstruct D irect R elease Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Pleasant Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=682486
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Post by sandi66 on Mar 12, 2008 11:59:04 GMT -5
By: pelicanbrief114 12 Mar 2008, 10:15 AM EDT Msg. 682697 of 682765 (This msg. is a reply to 682678 by sparkysantos.) Jump to msg. # Sparky Very nice/accurate summary of events. Unfortunately for "The Beard" and his Henchmen, there's "No Way Out." "The Beard & Co." are merely acting in the capacity of a Pawn Shop/Loan Shark, albeit too little too late. With respect to the numerous proposed/enacted TAF's; TSLF's/Bailouts etc,,,Such is the equivalent of attempting to plug a "Leak" in the Hoover Dam, bursting like a "SIV" with a piece of "Bubble Yum" (pun intended). The action in the $USD index foretells the story. The patient/currency remains in I.C.U on life support apparatus. Unfortunately, due to the reckless/shameful actions/behavior of "The Beard" and the Global Cartel. Lest not forget, "The Beard" did indeed inherit a nasty Beast from his predecessor "The Master of Disaster". Nonetheless, the game remains the same. The continuous debasing of fiat currencies worldwide, albeit, some more rapidly than others. Thinking "T's" as opposed to "B's". The $ 600+ Trillion "Unwind" persists. Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Great Day!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=682697
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Post by sandi66 on Mar 12, 2008 11:59:53 GMT -5
By: pelicanbrief114 12 Mar 2008, 12:44 PM EDT Msg. 682754 of 682767 (This msg. is a reply to 682718 by tupare2.) Jump to msg. # tup Excellent question and for the sake of a nation, let's keep an open mind to such. Nevertheless, we must also confront what is Reality and with that said, let us take a peek as to what has transpired under the tenure/ watchful eye of the MOD and his cohorts: $ 800+ BN Account Deficit $ 60+ BN Trade Deficit $ 60 Trillion Total Debt (Including unfunded future liabilities) 50% Evaporation of Purchasing Power of Currency (19 yrs) Zero/ - Negative Savings Rate Total Debt 352% of GDP Inflation running double-digits (despite the Bogus/Hedonic CPI) Unemployment running double-digits (despite the Bogus Birth/Death rate ratio model) $ 600+ Trillion Global Derivatives Largest Credit Bubble in History 4 Million Foreclosures and Growing Insolvent Financial Structure $ 7 Trillion evaporation in the Market (2000-01) Pervasive Counterfeiting of Securities/Currency,,,Including Treasuries Elimination of M3 (Nice try and A special TY to J. Williams for his coninuous outstanding work/Integrity) Elimination of BK Law Rampant fraud amongst/within the Financial Bermuda Triangle Due to time and length constraints, we'll bring this to a conclusion. If this is the work of "A Friend", would sure hate to witness that of an enemy. Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have an Enjoyable Day!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=682754
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Post by sandi66 on Mar 12, 2008 21:07:16 GMT -5
By: pelicanbrief114 12 Mar 2008, 04:41 PM EDT Msg. 682942 of 683092 Jump to msg. # Repercussions While the markets enjoyed a spectacular one-day advance in yesterday's action on the heels of yet another intervention campaign via the Fed's new and improved Term Security Lending Facility (TSLF), whereby another $ 200 BN is slated in an attempt to "umlock" the presently seized credit markets, such maneuvers/actions come at a price. Most notably, the $USD, where it's quite obvious that repercussions have been severe, evidenced by the chart below. charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym=DXM8&data=E&code=BSTK&evnt=adv As long as current policy/monetary decisions/actions persist, the ONLY question that remains is, How low will she go? Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Pleasant Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=682942
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Post by sandi66 on Mar 14, 2008 6:07:04 GMT -5
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Post by sandi66 on Mar 14, 2008 14:37:13 GMT -5
By: pelicanbrief114 14 Mar 2008, 01:50 PM EDT Msg. 683986 of 684085 Jump to msg. # Regardless of what "The Beard" and his Posse do, Nothing appears to be working and certainly, the Tape isn't buying into such. Whether it be TAF's; TSLF's; Outrageous Repo's; Monetizing to the tune of 17%; Bailouts; Helicopter Drops etc....."The Beard" seems to be in some serious need of: KRYPTONITE At this juncture, one wonders whether this will suffice. www.youtube.com/watch?v=oFnJ2U_cZ8o&feature=related Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Fun and Enjoyable Weekend!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=683986
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Post by sandi66 on Mar 14, 2008 14:37:57 GMT -5
By: pelicanbrief114 14 Mar 2008, 03:33 PM EDT Msg. 684079 of 684085 (This msg. is a reply to 684067 by rosencrantz2010.) Jump to msg. # Rosie JS Knows EXACTLY what is going on, as well as others!!!! No Doubts; No Worries!! Relax,,,,,Breath,,,,,Exhale. It's ALL good!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Great Weekend!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=684079
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Post by sandi66 on Mar 14, 2008 15:15:20 GMT -5
By: pelicanbrief114 14 Mar 2008, 03:46 PM EDT Msg. 684090 of 684107 (This msg. is a reply to 684084 by david_stevens.) Jump to msg. # David A Wonderful day to You!! Making the way from the Bayou to the Apple. Reservations "Locked and Loaded." Have your Fur, Dance Shoes and T-Kit prepared and ready. "Clearing" the Dance Floor. Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Enjoy Your Weekend!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=684090
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Post by sandi66 on Mar 16, 2008 9:41:18 GMT -5
By: pelicanbrief114 16 Mar 2008, 10:19 AM EDT Msg. 685229 of 685234 Jump to msg. # This forthcoming week "The Beard" and his Henchman meet once again to discuss and set monetary policy (failed). Financial markets have (already) factored in another cut in the Fed Funds rate. Most likely, another 50bps. Sub 2% Fed Funds rate forthcoming. Perhaps as low as 1% (yet again). Global Fiat debasing rages via excessive "Junk" creation. Gold and the $USD foretell the "Story". Hyperinflation "Imminent"? www.youtube.com/watch?v=ipJTqCbETog Brush Fires; Tremors; Contagion (Global); After Shocks persist. The "Unwind" progresses, albeit, at a fairly benign pace. Keep your eyes and ears "pinned" as more Heads to Roll, as well as further Exposure. "Street Sweepers" continue to Rumble, working Overtime, taking Care of Business!! While much "appears" disconcerting/troublesome (to say the least) on the "surface" where the "Whites of the waves are visible", the "Undertow" remains active; forceful and forever altering from a Global Economic/Geopolitical landscape!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Peaceful Day!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=685229
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Post by sandi66 on Mar 16, 2008 21:49:25 GMT -5
By: pelicanbrief114 16 Mar 2008, 10:32 PM EDT Msg. 685627 of 685642 Jump to msg. # Batter Up Who's on Deck? Bright lights in/on the Sin Citi? www.youtube.com/watch?v=pYPljZ5PfqI Hedgies taken out to the "Woodshed" for a "Hair-Cut" (Extinction); Roasting on an open fire. It's going to be a very very busy week. Strap in and Buckle-up for things are moving "Fast and Furious." It's safe to say that "The Bearded" one and his Henchmen are more than likely not receiving much sleep these days. Protect and Govern Thyself? Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Splendid Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=685627
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Post by sandi66 on Mar 17, 2008 15:10:24 GMT -5
By: pelicanbrief114 17 Mar 2008, 03:53 PM EDT Msg. 686100 of 686102 Jump to msg. # While many ponder Who's next, one may not have to seek any further than the "Grand Daddy" of them all. The list is long and distinguished and continues to grow!! Sin C? Brush Fires; Tremors; Contagion (Global); After Shocks rage!! In due time will we know. WILL CITIBANK SURVIVE? by James Turk March 17, 2008 The center of focus this past week on Wall Street – and indeed, much of the financial world – was whether or not Bear Stearns will go belly-up. As questions arose about the quality of its $395 billion of assets that were carried on only $12 billion of equity, its customers and other brokers became unwilling to accept the counterparty risk that arises from transacting with Bear, while its lenders began worrying about repayment. Being leveraged to that extent, even a small decline in the value of its assets can significantly erode the firm's equity base. But given that Bear is no more than the fifth largest broker in the US, it is a relatively small fish in the financial world. Let’s take a look at the big fish, namely, the commercial banks. In fact, let’s look at the biggest of them all to ask: “Will Citibank survive?” It’s a question that would have been outrageous to even consider asking as recently as a year ago. Interestingly, it’s a question that was often asked nearly two decades ago during the last banking crisis that eventually led to a bailout in 1991. Back then Citi – or more precisely, Citigroup Inc. and its banking subsidiary, Citibank – was bailed out by Saudi Prince Al-Waleed bin Talal with a $590 million investment. Citi and many other US banks were nearly ruined by the Savings & Loan crisis and subsequent real estate collapse that plunged the United States into a severe recession. The tab for losses incurred by the financial system back then was about $100 billion. The final numbers are undoubtedly going to be much higher this time around. Not only is the US more over-leveraged than last time, the impact from the sub-prime morass is being felt globally. Financial institutions worldwide have already come to grips with $140 billion of bad debts. Commenting upon the recent $200 billion scheme announced by the Federal Reserve this past week, The Telegraph in the UK wisely observed: “The Fed, with its latest $200 billion offer of cheap cash, has provided yet more state aid for errant hedge funds and another Washington-backed bailout for Wall Street bankers…But as the bail-outs are getting bigger, then clearly the problems causing them must be getting bigger.” [Emphasis added] Could what happened to Bear Stearns also happen to Citi and for that matter, other banks? Yes, and it may be happening now because the growing concern about counterparty risk cuts across all sectors and its impact is effecting all financial institutions to some degree. Commercial banks, however, have some advantages over brokers. They have access to the Federal Reserve, the so-called lender of ‘last resort’. Also, banks have an “invisibility cloak” to conceal assets, so it is much harder to discern what is happening to the financial capacity of commercial banks than brokers like Bear Stearns. Brokers do not have “invisibility cloaks” because they are required to mark the value of their assets to market values, i.e., which is the price at which the last trade was made. Banks argue that the loans on their books are not tradable securities, so they do not have a market value. There is some logic to this argument, but it is disingenuous in many instances. One does not need a market price to know that the value of a fixed rate mortgage will go down when interest rates rise, but banks nevertheless may be carrying the mortgage at book value. Or if a company is downgraded by a rating agency, a bank need not mark its loan to that company as doubtful if in their judgment (and not the rating agency’s) the loan will be repaid. Banks of course also own tradable securities, many of which are probably similar to those owned by Bear and other brokers. But even here commercial banks get a free-pass. If a security in a trading portfolio is not performing as expected, the bank can transfer the security to its investment portfolio to avoid marking it to market, claiming that it intends to hold the security to maturity and that its present market value is therefore irrelevant. This logic is of course nonsense because of one deadly factor – leverage. The use of leverage means that all banks could face a crisis of confidence, like that now being endured by Bear. And in a crisis, again as we are finding out with Bear, potentially all of the bank’s assets may need to be sold before maturity. So while the market is already trying to analyze whether Bear Stearns, Fannie Mae, Lehman Brothers and others are going to make it to the other side of the valley, we also need to ask if the biggest of them all – Citigroup Inc. and its banking subsidiary, Citibank – are solvent. We can do this by examining Citi’s balance sheet. I am ignoring its income statement because in a crisis, future cash-flow is basically irrelevant to a bank’s survival and need for liquidity. The key financial facts are presented in the accompanying table. These numbers are from Citi’s quarterly reports from December 2005 through December 2007, the latest report available. 31-Dec-05 31-Mar-06 30-Jun-06 30-Sep-06 31-Dec-06 31-Mar-06 30-Jun-07 30-Sep-07 31-Dec-07 Total Liabilities 1,381,500 1,471,783 1,511,123 1,628,383 1,764,535 1,898,883 2,093,112 2,231,153 2,069,108 Stockholder Equity 112,537 114,418 115,428 117,865 119,783 122,083 127,754 127,113 113,598 Stated Leverage 12.3 12.9 13.1 13.8 14.7 15.6 16.4 17.6 18.2 % Equity/Liabilities 8.1% 7.8% 7.6% 7.2% 6.8% 6.4% 6.1% 5.7% 5.5% Intangible Assets 47,879 48,025 48,760 48,894 49,316 53,710 62,206 63,600 63,891 Tangible Assets 1,446,158 1,538,176 1,577,791 1,697,354 1,835,002 1,967,256 2,158,660 2,294,666 2,118,815 Tangible Equity 64,658 66,393 66,668 68,971 70,467 68,373 65,548 63,513 49,707 Real Leverage 21.4 22.2 22.7 23.6 25.0 27.8 31.9 35.1 41.6 T-Equity/T-Assets 4.5% 4.3% 4.2% 4.1% 3.8% 3.5% 3.0% 2.8% 2.3% From 2005 to the present Citi’s leverage (total liabilities divided by stockholders’ equity) has increased in each quarter from 12.3 to 18.2 times. So equity as a percent of liabilities has declined during this period from 8.1% to 5.5%. However, the real picture that I present in the bottom half of the table shows a more significant decline in Citi’s equity and corresponding increase in leverage. Note the increase in Citi’s intangible assets and goodwill since 2005. These have essentially no value in a crisis situation, so I have subtracted them from stockholder equity to determine Citi’s tangible equity. I then calculated Citi’s real leverage by dividing its total liabilities by tangible equity, which is an astounding 41.6-times. Citi only has total equity to total tangible assets of 2.3%. This 2.3% number is vitally important to determine whether Citi is solvent. And here is where we get into the inevitable subjective judgements. The “invisibility cloak” that commercial banks use to conceal assets makes it impossible to determine the quality of those assets. But there is one inescapable cold, hard fact. Given that Citi’s tangible equity to tangible assets is 2.3%, we know that if the value of those assets is 2.3% less than their reported value, then Citi is insolvent. Citi may continue operating because it is liquid, but it would be operating as an insolvent. The question therefore becomes, what are Citi’s assets worth? As explained above, we can’t accurately answer that question, but here is some information to ponder. (1) Citi has $133.4 billion of Level 3 assets. Here’s how MarketWatch recently described this category when reporting Citi’s Level 3 assets: “Level 3 assets are holdings that are so illiquid, or trade so infrequently, that they have no reliable price, so their valuations are based on management's best guess.” In an analysis of Bear Stearns, Barron’s prudently observes: “Of particular concern are Bear's so-called Level Three assets, which stood at $28 billion as of November and by definition are illiquid and valued on the basis only of the firm's own estimates. Any buyer might be worried about the need to mark down the value of these assets, and the value of Bear's large book of financial derivatives.” What’s more, Bear’s so-called “large book” of derivatives pales in comparison to the size of Citi’s book. According to the Comptroller of the Currency, Citi is counterparty to financial derivatives with a notional value of $34.0 trillion (sic). We should keep in mind Warren Buffett’s warning from 2002: “Derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” (2) Last week JP Morgan warned that the Street is facing a “systemic margin call” on subprime mortgages that alone might deplete $325 billion of capital. Citibank alone has about 10% of total bank capital in the US, so if it were to incur 10% of that loss projected by JP Morgan or $32.5 billion, only $17.2 billion of tangible equity would remain. Note that Morgan’s analysis ignored all of the other paper now being called into question, which could mean even bigger losses for the banks. For example, on February 29th Bloomberg reported: “Citigroup Inc. helped create at least $6.9 billion of securities insured by Ambac Financial Group Inc. that have tumbled in value and may require the insurer to pay claims.” Apparently these are some “of Ambac's most troubled CDOs”, i.e. the one’s most likely to incur large losses. Given that Ambac’s future is being questioned despite its recent injection of capital, Citi may end up with losses on these CDOs, not to mention other firm’s CDOs of inferior quality that it helped write. It is worth noting that Citi already took more than $20 billion in credit-related losses in the last half of the year, and conditions are worse this year given that the US is now in a recession. Bank losses almost always worsen in recessions. (3) When I started my business career by working at a bank in the late 1960s, normal bank leverage was considered to be 6-to-8 times equity. But let’s assume that the 21.4-times real leverage presented in the above table for Citi in December 2005 is adequate. To reduce its leverage and bring its capital ratio back to its December 2005 level, Citi needs to raise $46.9 billion in equity, nearly doubling its capital base. This calculation of course assumes that Citi has no further charge-offs and doesn’t expand its total assets by making new loans – both of which seem improbable. (4) Alternatively, Citi can sell assets and reduce its leverage by repaying debt. But this alternative does not seem practical given the huge amounts involved and present market conditions. To reduce its leverage back to its 2005 level on its current capital base, Citi would need to dispose $384.1 billion of assets. Sales of that size in all likelihood could only be done with significant asset price destruction, causing losses that would further erode Citi’s capital base. (5) The real Achilles heel is that banks lend long and borrow short. In other words, they fund long-term loans with checking account deposits and 90-day loans. These funding sources can evaporate overnight, as Bear Stearns found out. This imbalance in asset/liability management has killed countless banks throughout history. So is Citi solvent? We just don’t know. But there are reasons to be concerned. We are in one of those recurring periods when the solvency of banks is doubted, like the late 1980s when the S&L crisis was brewing. Or perhaps it is more like 1974 when the failure of Herstatt Bank in West Germany set off banking crises throughout the world, culminating with the collapse of Franklin National Bank in New York City. The problem is leverage. Too much debt has been extended on too little capital, so even a small decline in the value of a bank’s assets can significantly erode its capital and make it insolvent. In any case, it looks like the financial crisis already upon us will get worse before it gets better, and I am not alone in that thinking. David Rubenstein, co-founder of the Carlyle Group told The Wall Street Journal last week: “This is the tip of the iceberg. People are looking at our situation and saying, ‘There but for the grace of God go I.’ There are others out there hanging on by their fingernails.” He should know. His group managed Carlyle Capital, which recently defaulted on its loans to Citi and other banks, and whose stock price is shown in the above chart. Thinking "T's" as opposed to "B's". Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have an Enjoyable Day!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=686100
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Post by sandi66 on Mar 18, 2008 6:07:48 GMT -5
By: pelicanbrief114 17 Mar 2008, 05:57 PM EDT Msg. 686184 of 686340 Jump to msg. # The Shattering of The Glass Wall; A La Glass-Steagall Act. One of the many tools/vehicles amongst others, utilized in the rape and pillage of a nations citizenry!! Aided and Abetted by yours truly, "The Financial Bermuda Triangle." Too Big to Bail The Fed's Wall Street Dilemma By PAM MARTENS Americans learned two new truths last week from the Bush Administration's version of Life's Little Instruction Book: if you're a Wall Street miscreant you're thrown a lifeline; if you're a Wall Street crime fighter you're thrown a land mine. In the first effort, the Feds effectively handed a Federal Reserve ATM card to JPMorgan to funnel your tax dollars to the teetering Bear Stearns brokerage firm to address counterparty risks that have been building for at least 4 years as the Feds snoozed. Counterparty risk is the trillions of dollars of insurance contracts (credit default swaps and other derivatives) taken out by Wall Street firms on each others (counterparty) bonds, bundled mortgage and commercial debt (collateralized debt obligations). The firms have used unregulated over-the-counter contracts to perform this risk transfer alchemy and funded their own company, Markit Group Ltd., to take the place of a regulated exchange for price discovery. In the second effort, the Feds tapped the Department of Justice, Internal Revenue Service, U.S. Attorney's office in New York, FBI, five federal judges and a busy federal court to root out that Code Red threat to our national security: consensual sex. The sex involved a prostitution ring and Democratic New York State Governor, Eliot Spitzer, who was savaged and forced to step down by an avenging media mob abundantly fed with well placed leaks from a suspiciously homogenous group called "anonymous law enforcement officials." Governor Spitzer, in his former role as New York State Attorney General, had taken the lead in rooting out Wall Street crimes against small investors because the Federal Reserve was preoccupied with lobbying to remove regulations on Wall Street's crime factory. As usual, the Feds handed the bill to the governed with no thought to the will of the governed. While mainstream media called the Bear Stearns bailout the first brokerage bailout since the Great Depression, in truth it was the second in seven months. The first brokerage bailout came without all the media fanfare because it arrived not on the wings of a public announcement but in five pages of indecipherable Fed jargon addressed to the General Counsel of Citigroup. Here is the effective message sent by the Federal Reserve to Citigroup in its letter of August 20, 2007: now that we have allowed you to become both too big to fail and too big to bail by repealing the depression era investor-protection law known as the Glass-Steagall Act at your mere beckoning, we have to bend more rules to keep you afloat. So, for example, the rule that says the Federal Reserve is not allowed to lend to brokerages, just banks, from its discount window can be tweaked for you by lending up to $25 billion to you and then we'll let you lend it to your brokerage arm. The Federal Reserve Act rule that says a bank can't loan more than 10% of its capital stock and surplus to its brokerage affiliate, we'll let you go as high as about 30% and say it's in the public interest. By giving Citigroup an exemption from Rule 23A of the Federal Reserve Act, by allowing it to funnel up to $25 Billion from the Fed's discount window to its brokerage clients who were getting hit with margin calls, the Federal Reserve and Chairman Ben Bernanke telegraphed an incredibly dangerous message to global markets: we're just as unaccountable as Wall Street. The Federal Reserve as enabler under Alan Greenspan created today's problem and today's Crony Fed under Ben Bernanke is killing off what's left of U.S. financial credibility. (I had barely finished typing these words on Monday, March 17, 2008, when a news alert came across my screen advising that the Federal Reserve was taking the breathtaking step of making direct loans to all brokerage firms which are primary dealers for Treasury securities.) The Federal Reserve is stumbling around in the dark and regularly bumping into the next bailout because it stopped being an independent monetary force and started taking its marching orders from Wall Street quite some time ago. Here's what Nancy Millar, President at the time of the National Organization for Women in New York City, presciently testified in writing to the Securities and Exchange Commission in August 2001. (Ms. Millar edited and signed this testimony while I and other Wall Street activists provided input. This testimony is available in full on the SEC's web site.) We thank the Securities and Exchange Commission for extending the comment period to September 4, 2001 in the critical area of bank oversight now that the lines between banks and brokerage firms have been blurred with the repeal of the Glass-Steagall Act. We believe that the comments made in the letter dated June 29, 2001 from the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency should be disregarded in their totality. The banks of America have enough lobbyists and trade associations to argue their case before the SEC. It is not the charter or mandate of these three regulatory bodies to lobby on behalf of banks. The body of evidence that should dictate how the SEC must now proceed since Congress saw fit to eliminate the critical protections afforded the investing public in the Glass-Steagall Act, resides in the tens of thousands of pages of transcripts of the Pujo Committee hearings held in 1913 and the Pecora Committee hearings of 1933 and 1934. Fancy promises from regulators that banks functioning in the dual role as brokerage firms can and will be self-policing is not what the SEC or Congress should rely on. The well-developed history of egregious abuses bestowed on the investing public prior to the enactment of Glass-Steagall, and since its recent repeal, is what the SEC and Congress must look to. To believe that the dynamics of power and greed have been materially altered in nine decades is to engage in naiveté at the public's peril. Our Nation's prosperity, democracy and the productivity of its citizens demand a level playing field to acquire and safeguard financial assets. Society crumbles when assets achieved through years of honest hard work can be fleeced by brokerage firms masquerading as insured-deposit banks. It is the role of federal regulators to maintain a level playing field through stringent regulation. We ask that the SEC immediately impose the same regulations that govern outside broker-dealers to securities' operations within banks. And, we herewith ask Congress to reconsider the repeal of the Glass-Steagall Act or be held accountable for the peril that unfolds from this unwise and inadequately deliberated decision. If ever there was evidence that America is now facing that peril, it was the most recent news that the Bush administration's much touted "free and efficient market" had priced Bear Stearns at $30 a share at the close of trading on Friday, March 14, 2008 but on further examination of its books over the weekend, it was valued at $2 a share and absorbed by JPMorgan at that price. Equally troubling is the growing awareness among Wall Street veterans that neither the Federal Reserve nor the U.S. Treasury comprehend was has happened here, much less how to contain it. Here's what we heard from Hank Paulson, the Treasury Secretary, last week: "regulation needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it." Innovation? Less efficient? Is there anything at all that looks innovative or efficient about Wall Street today? It is a seized up house of cards built on a toxic formula of hubris, corruption and free market madness. Before there is a complete breakdown, Congress must quickly address the five key reasons we have today's mess on our hands: (1) Incentive: from mortgage brokers paid higher fees to sell subprime loans rather than prime loans, to stockbrokers paid dramatically higher fees to sell mortgage-backed securities rather than U.S. Treasury securities, to investment bankers paid dramatically higher fees to package Collateralized Debt Obligations rather than issue plain vanilla corporate bonds, Wall Street has been incentivized to greed rather than honest service to investors. (2) Artificial Demand: The above outsized incentive produced a glut of unwanted and unneeded product that had to be eventually hidden off Wall Street's balance sheet in Structured Investment Vehicles (SIVs) or dressed up to look like Commercial Paper and buried in mom and pop money market funds. It is this glut and the lack of transparency as to where else this toxic paper is hiding that is creating the fear and panic on Wall Street. (3) Counterparty Risk: The regulators allowed Wall Street firms/banks to balloon their asset base and pretend they were meeting capital adequacy tests by buying "insurance" in the form of derivative contracts. There was only one problem with these "hedging" techniques; the counterparty in many cases was just another Wall Street firm or an inadequately capitalized municipal bond insurer. Instead of spreading risk, the risk was concentrated among the same players. (4) Glass-Steagall Act: Congress was incentivized through Wall Street campaign financing to throw reason and judgment out the window and repeal the only law that stood between the country and another 1929. Glass-Steagall must be restored; and public financing of federal campaigns is the only means of restoring the will of the governed to Washington. Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Pleasant Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=686184
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Post by sandi66 on Mar 18, 2008 6:08:34 GMT -5
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Post by sandi66 on Mar 18, 2008 19:57:09 GMT -5
By: pelicanbrief114 18 Mar 2008, 03:28 PM EDT Msg. 686563 of 686735 Jump to msg. # Exit Visas are "Imminent", as the "Street Sweepers" Rumble down Broad & Wall, as well as the Beltway, with No "Brakes" and No regard for those who may find themselves in the way. The list continues to grow daily with an eye on the "Fab Five (5)" who may just be feeling the wrath forthcoming; C; LEH; UBS; FNM; FRE, as well as the "Sleeping Giant" JPM whose Derivative Book goes Tic... Toc... Tic... Toc...Tic...Toc!! I nstruct D irect R elease!! "Blackbirds singing in the dead of night,,,,,,,,,,,,," "After the Flood, ALL the Colours came out,,,,,,It's A Beautiful Day!!!!" Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Spectacular Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=686563
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Post by sandi66 on Mar 21, 2008 15:40:08 GMT -5
By: pelicanbrief114 21 Mar 2008, 04:35 PM EDT Msg. 688793 of 688793 Jump to msg. # Incoming Nothing seems to be working. "Oh "Bearded" one, what to do?" Pawn Shops? Loan Shark? Huey's? farm3.static.flickr.com/2002/1724837662_4c5cfdb0f7.jpg TAF's; TSLF's; Open Windows; Lowered Reserve's; Rate Cuts; etc... etc.... What's next? Who's next? Empty Chambers? Hyperinflation? Weimer? Band-Aids; Water Balloons just don't/won't cut it!! Difficult/Challenging times require tough/forceful measures/actions. Thus far, the medicine is/has been worse than the disease itself!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Wonderful/Peaceful Easter Holiday Weekend!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=688793
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Post by vngntn1 on Mar 21, 2008 19:44:11 GMT -5
Very few squeeze the current marketplace with such a grasp !
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Post by sandi66 on Mar 23, 2008 21:32:52 GMT -5
By: pelicanbrief114 23 Mar 2008, 10:08 PM EDT Msg. 690493 of 690510 Jump to msg. # Deal Or No Deal? Reminiscent of the Baltimore Colts Mayflower dash in the darkness of night while the masses lay asleep. Will "The Bearded" one and his Henchmen's caper prevail? Why is Bear Stearns Trading at $6 Instead of $2? John P. Hussman, Ph.D. As I emphasized last week, the large “term financing” and “term securities lending” programs initiated by the Fed do not expose the Fed to default risk in mortgage collateral it accepts from the banks that act as primary dealers. Even if the underlying securities default, those facilities involve repurchase agreements, so the bank putting up the collateral has to repurchase the collateral at the original price plus interest after a term of 28 or 90 days. The Fed only stands to lose if the bank itself fails, and so spectacularly that the bank's liquidation value goes negative even after zeroing out bondholder claims and stockholder equity. Even in the present environment, this is unlikely. Alarmingly, immediately after the pixels dried on last week's comment (noting “the Fed is emphatically not taking the default risk of the mortgage market onto itself” with these term facilities), details emerged that the Fed had agreed to a very different deal in its attempt to rescue Bear Stearns. This is a major and ominous departure from historical Fed policy, and from legality. I'll cut straight to the chase. Bear Stearns is trading at $6 instead of $2 because unelected bureaucrats went beyond their legal mandates, delivered a windfall to a single private company at public expense, entered agreements that violate the the public trust, and created a situation where even if the bureaucratic malfeasance stands, the shareholders of Bear Stearns will either reject the deal or be deprived of their right to determine the fate of the company they own. Very simply, Bear Stearns is still in play. Still, when all is said and done, my own impression is that the ultimate value of the stock will not be $2, but exactly zero. In effect, the Federal Reserve decided last week to overstep its legal boundaries – going beyond providing liquidity to the banking system and attempting to ensure the solvency of a non-bank entity. Specifically, the Fed agreed to provide a $30 billion “non-recourse loan” to J.P. Morgan, secured only by the worst tranche of Bear Stearns' mortgage debt. But the bank – J.P. Morgan – was in no financial trouble. Instead, it was effectively offered a subsidy by the Fed at public expense. Rick Santelli of CNBC is exactly right. If this is how the U.S. government is going to operate in a democratic, free-market society, “we might as well put a hammer and sickle on the flag.” What is a “non-recourse loan”? Put simply, if the homeowners underlying that weak tranche of debt go into foreclosure, they will lose their homes, and the public will lose as well. But J.P. Morgan will not lose, nor will Bear Stearns' bondholders. This will be an outrageous outcome if it is allowed to stand. In my view, the deal would be palatable if J.P. Morgan was to remain fully responsible for any losses on the “collateral” provided to the Federal Reserve, assuming shareholders were to consent to the buyout. As it stands, Congress should quickly step in to bust the existing deal and demand an alternate resolution, by clearly insisting that the Fed's action was not legal. The Fed did not act to save a bank, but to enrich one. Congress has the power to appropriate resources for such a deal by the representative will of the people – the Fed does not, even under Depression era banking laws. The “loan” falls outside of Section 13-3 of the Federal Reserve Act, because it is not in fact a loan to either Bear Stearns or J.P. Morgan. Bear Stearns is no longer a business entity under this agreement. And if the fiction that this is a “loan” to J.P. Morgan was true, then the only point at which the “collateral” would become an issue would be in the event that J.P. Morgan itself was to fail. No, this is not a loan. It is a put option granted by the Fed to J.P. Morgan on a basket of toxic securities. And it is not legal. The deal was made under duress, to the benefit of a private company, on the basis of financial assurances that the bureaucrats involved had no business making. The Federal Reserve is going to put up public assets and accept default risk so that Bear Stearns' own bondholders are effectively immunized?! That's not sound monetary policy – it's a picnic for insiders, bought and paid for through the abuse of public funds by government officials too unprincipled even to recognize the abuse. The only good thing about this deal is that it buys time while principled ways of busting and restructuring it can be settled. This is not an issue of letting Bear Stearns “fail” on the claims of its customers and counterparties. Nobody wants that. The issue is the method by which it was rescued – who was protected, and who was not; why a consortium was not used instead of a single firm; why the claims of Bear's bondholders should be secure while the public bears the risk of the toxic waste foisted upon us. This deal should, and I believe will, be restructured. J.P. Morgan will cry foul, but that will be like a child who found the Easter basket and is now forced to share the chocolate. Bear Stearns is worth more than zero in acquisition, provided that the bondholders take an appropriate loss. As of November's 10K report, Bear Stearns had $9 billion in unsecured short-term debt, and $66 billion in long-term debt. The $12 billion in shareholder equity, of course, is gone. Any portion of the debt that is unsecured should be the first to fall. If Bear Stearns is worth $2 a share to somebody (provided $30 billion of “non-recourse loans” from the Fed), and yet Bear's bondholders and even the unsecured lenders can still expect to be paid off on over $75 billion of debt (J.P. Morgan assumes that obligation as part of the buyout), then the public guarantees aren't required in the first place. What is required is that Bear's bondholders take a loss, as they should, rather than the public doing so. In the unlikely event the value of Bear Stearns is negative after entirely zeroing out both shareholder equity and bondholder claims – then and only then is there a problem for Bear's customers and counterparties. But in fact, J.P. Morgan is already willing to take on all of Bear's assets and liabilities, including over $75 billion in debt to Bear's bondholders, for $2 a share. This is an indication that bondholder's claims would not even be wiped out in a full liquidation. Surely, whatever loss is required to transfer the ownership of the company should be taken by the bondholders, not by the public. Again, this is not water under the bridge, and the deal struck last week should not be allowed to stand if we care at all about the integrity of the capital markets. The Long-Term Capital crisis was resolved by a consortium of financial institutions providing capital in return for ownership. The panic of 1907 was resolved the same way. This deal should be busted, and fast. If there's not a single buyer that will take on both the assets and liabilities without the government assuming private default risk, Bear's assets should be put out for bid, Bear's bonds should go into default, and Bear's shareholders shouldn't get $2 – they should get nothing. So Bear's stock is selling at more than $2 for two reasons – one is that the market evidently believes there is some chance for the deal to be busted, either by Congress or by shareholder rejection. And second, because Bear's bondholders are frantic to own the stock so they can vote for this lousy deal to go through. After all, buying up a few hundred million in stock to secure $75 billion of debt doesn't seem like a bad trade. Whatever happens, this is not over, for the simple reason that it is wrong. The U.S. economy will get through this without the requirement of massive public bailouts. What is required, however, is that the stock and bondholders of financial companies take due losses. Customers and counterparties need not, and I expect will not, be harmed. The value of the shareholder equity and debt issued by most financial institutions is ample buffer. In general, writedowns against shareholder equity alone will be enough, provided that regulations are revised to allow institutions to continue servicing existing financial commitments on the basis of more flexible capital requirements. If the market was “certain to crash” in the event that Bear Stearns failed, then the market is certain to crash anyway, because Bear Stearns wasn't the last shoe to drop – it was one of the first. Unfortunately, we're standing in a shoe store. Wasn't the market “certain to crash” without the Fed's surprise rate cut in January too? At what point will investors figure out that the liquidity problems are nothing but the precursors of insolvency problems? At what point will investors stop begging the government to save private companies and recognize that the losses should be taken by the stock and bondholders of the offending financial institutions? If the Fed and the Treasury are smart, they will act quickly to figure out how to respond to multiple events like we've seen in recent days, to expedite turnover in ownership and quickly settle the residual claims of bondholders, without the kind of malfeasance reflected in the Bear Stearns rescue. As for the future of the free markets, Dylan Thomas comes to mind: Do not go gentle into that good night Rage! Rage against the dying of the light The Fed overstepped and the Treasury overstepped. At the point where unelected bureaucrats pick and choose who to subsidize – who prospers and who perishes – in a free capital market, and use public funds to do it, more is at risk than just $30 billion. Instead, we cross a line, and stumble off a very clear edge down an interminably slippery slope. We speak up now, or forever hold our peace. On the subject of speaking up, the essays in the special section of the Washington Monthly – No Torture, No Exceptions – are worth reading. They come from both sides of the political aisle. I am troubled that as a nation, both in economics and in foreign policy, we have become far too willing to sacrifice principles for what some, I think falsely, perceive to be an increase in security. But once we begin to violate our principles, we should realize that nothing else is secure. Developing. Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Wonderful evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=690493
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Post by sandi66 on Mar 24, 2008 19:33:20 GMT -5
By: pelicanbrief114 24 Mar 2008, 06:48 PM EDT Msg. 691240 of 691339 Jump to msg. # Anatomy of The Cartel. History never repeats itself, but sometimes it rhymes!! D. Icke After nearly 20 years of full time research into the true workings of the world, the last few weeks have been real head-shakers for me. Talk about watching a movie. And it's not even a new movie - just a remake of endless of its kind over hundreds of years. They were once in silent black and white and now in full-blown computer-enhanced digital colour. The movie is called 'The Banking Crisis' and among its many sequels and spin-offs are 'The Recession', 'The Slump', 'The Crash', and, in it's latest version, 'The Credit Crunch'. All of them star the insider actors and actresses from the same elite families and all have but one prime objective: human control. Everything else is decoration, diversion and camouflage. I'll summarise first what I have been saying since the early 1990s about the 'economic cycle' of 'boom and bust' and then have a look at what is happening today from that perspective. It is, lest we forget, the private banks that bring 'money' into circulation by issuing lines of 'credit', which is 'money' that has never, does not, and will never exist. Money is merely mythical figures on a screen that is only worth anything because we take it seriously and believe it to be worth anything. It only has purchasing power because the receiver believes it has purchasing power. It's all a mind game. When you take out a loan from a bank (put more 'money' into circulation through accepting credit) the bank doesn't print any notes, mint any coins or move precious metals anywhere. It simply types into your computer account the sum of mythical figures-on-a-screen 'credit' that you have agreed to be 'loaned'. In fact, the bank has loaned you nothing except figures on a computer file and yet from that moment you start paying interest on money that has never, does not, and will never exist. Banking is nothing more than legalised fraud and the biggest organised crime in history. The Mafia are petty criminals by comparison. You can symbolise the modus operandi as a fisherman (the elite Illuminati banking families) with his rod (control of the banking system, stockmarkets, governments, mainstream media and, most crucially, the 'creation' and distribution of 'money' or 'credit'). In stage one, the banking elite cast the fishing line by keeping interest rates low and making it easy for almost anyone to get 'credit'. This has the effect of putting lots of 'money' into circulation and increases the ability of business and people to buy things. This obviously increases 'consumer demand' and business takes out more loans for plant, machinery and expansion, and employs more staff, to meet that demand. We now have what they call 'economic prosperity' or a 'boom', although there is always an underclass that never benefits. During such 'boom times', people, like business, feel more confident and vast numbers buy a bigger house, bigger car and have more expensive holidays - paid for invariably by loans or line of credit. In short, during a 'boom' business and people get themselves into more debt and even those who don't secure bank loans bash their credit card to increase their purchasing power in the face of mass advertising (mind control) to buy, buy, buy. But this 'prosperity' is only made possible by the increases in credit ('money' in circulation) that allows the increase in spending. And who controls that? The banks controlled by the Illuminati banking families like the Rothschilds, Rockefellers and the rest. When the world is saturated in credit (debt on 'money' that doesn't exist) the banking cartel triggers stage two of what ignorant economists and economic correspondents call the 'economic cycle'. Continuing with the fisherman analogy, they reel in the line and net their fish - us. They do this by reducing the amount of credit they issue and calling in many loans already on their books. This has the effect of taking 'money' - purchasing power - out of circulation and transforms the manufactured 'boom' into a manufactured 'bust'. With less money in circulation, people can buy less and so businesses need to produce less. This leads to big increases in unemployment, bankruptcy and people losing their homes because those businesses and people are no longer able to earn the income necessary to service the loans they took out during the 'good times'. But, of course, when they accepted those loans of non-existent 'money' they had to sign over as security their wealth that did exist - their home, car, business or land - and so when they fail to 'repay' their 'loans' of credit the banks seize their wealth that does exist in exchange for not paying back 'money' that has never existed, except in theory. Yes, I know it's insane to you and me, but from the perspective of an economic system created for the simple purpose of human control and enslavement it is perfectly sane. To the elite families behind it all, it is sheer genius and a crucial means to their end. 'Gotcha.' Using the techniques I have described, these interbreeding families have trawled and netted the 'physical' wealth of the world while giving the masses worthless bits of paper and figures on a screen to make them think they are sharing in the whole deal. But they are not and, whenever the genetic cartel decrees, the people realise how tenuous their perceived 'prosperity' really was. But, come the next 'boom', they fall for it all over again. Ahhhhhhh! All this manipulation is made possible by allowing private banks, ultimately controlled by the same family bloodlines, to control how much credit or 'money' is in circulation, and by the mass brainwashing of the population to 'spend, spend, spend' to seek a lifestyle that the system, again controlled by the same cartel, has told them is the measurement of their 'success' and 'happiness'. As Robert H. Hemphill, a one-time credit manager at the Federal Reserve Bank in Atlanta once said: 'This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous, if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilisation may collapse, unless it becomes widely understood and the defects remedied very soon.' And so to today's 'banking crisis'. It's a classic. Since the last 'economic downturn' (trawl of the real wealth) there has been a global orgy in 'consumer debt' (we are no longer people, we are 'consumers', just a cog in the economic machinery). By last year, Americans owed a staggering $16 trillion dollars - that's $2.4 trillion in personal loans and $13.6 trillion borrowed for their homes. Total US debt in 2007 (and it's bigger now): $53 trillion. In the UK, a nation of some 60 million compared with America's 300 million, the debt levels have similarly soared to record highs. Personal debt in Britain passed £1 trillion ($2 trillion) in 2004, just seven years after it passed through the half a trillion barrier. It has since expanded by another nearly £400 billion and Britain's personal debt is increasing by more than £1 million every four minutes. The banking cartel has taken the debt to record levels because it is preparing for a record trawl. It is the vehicle for the Illuminati families to create the chaos from which they can offer their solution - a new global economic system which gives them more control than ever before. They want this eventually to be administered by a world central bank via a single world currency that would be purely electronic with no cash in circulation at all. This would give total control (apart from barter) over if or what you purchase to a global computer system that would be programmed to decide if it would accept your electronic card or, in time, the microchip under your skin. Dissidents of the system would soon be off the computer's Christmas card list, that's for sure. This is what the current financial mayhem is all about - another massive stepping stone to the control of every man, woman and child on the planet. Once you know that, the apparently crazy and scandalous decisions made by the banking system to trigger the current crisis take on a new perspective. These include the high-risk sub-prime mortgage frenzy which made vast numbers of loans to people who were highly likely to default - and have. It was a disaster waiting to happen - but only for those who lost their homes, not for the families controlling the banking system. But wait, I can hear people say, banks are going broke and even major players like Bear Stearns have been on the brink. Surely the Illuminati families wouldn't want that? Oh, but they would because of the contribution it makes to their overall agenda. It is important to stress the difference between running a bank within the game and owning the game itself. Take the symbolic example of the board game called Monopoly. Different people come and go, playing the game and 'winning' and 'losing'. But the game itself can never 'lose' because it is the board on which everyone has to play, winners and losers, and it is all the houses, hotels, instruction cards and rules that they have to play with and abide by. Players of the game may use its board, money and real estate for a while, but the game always gets them back, or the owner of the game does. Monopoly: he who creates the game controls the rules Yes, the US bank Bear Stearns saw its share price plummet from more than $150 a share down to almost zero. But who has sought to take advantage of that? The notorious Illuminati operation, J P Morgan Chase, which has offered Bear $2 a share in its takeover bid - and the Illuminati-created and controlled Federal Reserve, the privately-owned 'central bank' of America, has made the Morgan takeover virtually risk-free by guaranteeing up to $30 billion of Bear's mortgages and other assets. It's a stitch-up. Some banks will go to the wall and either disappear or be absorbed for cents on the dollar by other Illuminati operations and it suits the agenda to install fewer, but bigger, banks because that reduces the number of people with any influence on competition and financial events in general. It is sobering to read this Internet account of the engineered Wall Street Crash of 1929 which led to the Great depression of the 1930s, a time that some commentators are claiming we may be about to experience again: 'Throughout the 1920s a long boom took stock prices to peaks never before seen. From 1920 to 1929 stocks more than quadrupled in value. Many investors became convinced that stocks were a sure thing and borrowed heavily to invest more money in the market. But in 1929, the bubble burst and stocks started down an ever more precipitous cliff. In 1932 and 1933, they hit bottom, down about 80% from their highs in the late 1920s. This had sharp effects on the economy. Demand for goods declined because people felt poor because of their losses in the stock market. New investment could not be financed through the sale of stock, because no one would buy the new stock. But perhaps the most important effect was chaos in the banking system as banks tried to collect on loans made to stockmarket investors whose holdings were now worth little or nothing at all. Worse, many banks had themselves invested depositors' money in the stockmarket. When word spread that banks' assets contained huge uncollectable loans and almost worthless stock certificates, depositors rushed to withdraw their savings. Unable to raise fresh funds from the Federal Reserve System, banks began failing by the hundreds in 1932 and 1933.' Those hundreds of failing banks were either absorbed for next to nothing by the big banks, which became even richer and more powerful as a result, or they were left to disappear and reduce the potential competition. Individual banks may come and go, but the banking system, the game, is always there. For '... chaos in the banking system as banks tried to collect on loans made to stockmarket investors whose holdings were now worth little or nothing at all', read sub-prime mortgages and such like that we have now. Imagine the effect of a stockmarket crash today on top of everything else and it's coming, make no mistake. It's all in the script. America during the banker-created Great Depression It was no coincidence at all that the crash of the 1930s was unleashed by the Illuminati Federal Reserve making several increases in interest rates to 'cool the stockmarket', nor that the economic collapse brought the Illuminati front man Franklin Roosevelt to the White House with his 'New Deal' to 'solve the crisis'. Instead, he took the United States into World War Two. What we are seeing is just 'history' (the techniques of mass manipulation) repeating. After the 'boom' created by low interest rates and unlimited credit since the 1990s, they are crashing the global economy through what is being called the 'Credit Crunch'. Put another way, they put lots of money into circulation (boom) and now they are taking it out again (bust). This means that there comes a moment when there is simply not enough money in circulation for everyone to pay back their outstanding 'loans'. Suffering and homelessness are built into the system. Other aspects of this same agenda include: The crashing of the US dollar to prepare for its replacement by a 'North American Union' currency (working title at least, the Amero) which would become the currency of the United States, Canada and Mexico with plans to extend it to the whole of the Americas. Creating such a scale of economic suffering and dependency that people will do anything, at however low the wage, just to survive and with 'outsourcing' and the massive influx of people from poorer countries into places like North America, the UK and the rest of Western Europe, the competition for this low-paid work is being intensified still more (see the video sequence after this article). Watching the news as the crisis unfolds is like witnessing a car crash in slow motion, or a replay of one you have seen, or read about, many times before; and debt has reached such astronomical proportions that we're right out of seat belts. Like I say, in the end it's all a mind game based on the manipulation of that mental and emotional state we call 'confidence'. When you control the mainstream media and the leading politicians then controlling the level of 'confidence' is a synch. When people have confidence in banks, stockmarkets and the strength of the economy in general, they borrow more money, get into more debt, spend more and invest more in things like stocks and shares. The result: there is an economic and stockmarket boom. When people lose confidence in banks, stockmarkets and the strength of the economy in general, they borrow less money, spend less and invest less in things like stocks and shares. The result: there is an economic and stockmarket 'crisis'. So tell them everything is wonderful and give them lots of credit and then tell them everything is in chaos and stop their lines of credit. It is so easy when you own the game. As the brilliant American comedian, George Carlin, put it: 'It's big club and you ain't in it' - see video clip at the end of this article. Wall Street: A Las Vegas casino Many years ago I spoke about all this at a financial conference and afterwards a man who speculated for a living on the commodity markets (deciding if people in 'Third World' countries ate or not) came over to speak to me. He said he didn't believe what I said about manipulation of the system, but he would keep his eyes open from now on. A few months later I met him again and he was transformed. He said he had noticed that three or four days before a state-of-the-economy statement by the then Federal Reserve chief, Alan Greenspan, the big players in the markets would go to work moving their investments around. Every time, he said, the result of Greenspan's words was to increase the value of what the big players had been buying and push down what they had been selling. The reason does not need a genius to explain: The big players were colluding in Greenspan's statements. Welcome to the 'real' world ... The way to withdraw as much as possible from the clutches of this economic imprisonment is to get out of debt as much as possible. This is difficult for most people who are buying their homes because the cost is so high compared with their income and savings - and the explosion in house prices was fuelled by the very credit free-for-all that has made initial buying, if not the repayments, so easy. But in everything else most people do have a choice not to borrow money for things they don't actually need - and that's where so much credit 'money' is spent. If people can't afford something that is not essential then don't buy it if you can't pay cash because otherwise you are mortgaging your life to the banking cartel. I rented my flat with its one bedroom and little office and I only bought it in the end with a mortgage because it was perfect for my needs and the owner wanted to sell it to someone else if not to me. I can't afford anything bigger and that's fine because I don't want anything bigger. I have no desire whatsoever for the big-house, big-car lifestyle. I have to laugh when I see people on the Internet claiming that I must be filthy rich because of the big house I own when the 'big house' is a block of small flats, of which I 'own', or the bank does, only one. But on everything else in my life I have a simple and strict philosophy. If I can't pay cash I don't want it, thanks. Don't let anyone try to sell me trinkets as a symbol of my success, and offer me cheap credit to buy them. If we don't fall for the trinkets version of 'success' and the lack-of-them version of 'failure', then we reduce massively the dependence on credit to finance our pursuit of what the very system lending us that non-existent money is telling us we must have to be 'successful'. If you buy the system's version of reality it will eventually devour you, if not always economically then at least in the devouring of your soul. So we don't have the latest car, fashion or bit of bloody 'bling'. Who cares? What nonsense it all is. 'And a fed it wiv da credit ...' How far we have become disconnected from true wealth and the understanding that life is about more than irrelevant baubles, bangles and beads. As a Native American chief called Seattle is supposed to have said: 'How can you buy or sell the sky, the warmth of the land? The idea is strange to us. If we do not own the freshness of the air and the sparkle of the water, how can you buy them? ... ... We know that the white man does not understand our ways ... he is a stranger who comes in the night and takes from the land whatever he needs. The earth is not his brother, but his enemy, and when he has conquered it, he moves on ... ... He treats his mother, the earth, and his brother, the sky, as things to be bought, plundered, sold like sheep or bright beads. His appetite will devour the earth and leave behind only a desert.' And not just a 'physical' one, but a spiritual one, too. As another Native American saying from the Cree people goes: Only after the last tree has been cut down Only after the last river has been poisoned Only after the last fish has been caught Only then will you find you cannot eat money Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have an Enjoyable Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=691240
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Post by vngntn1 on Mar 24, 2008 21:09:34 GMT -5
I wonder how many calaculate what is real and accumulate it to survive !
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Post by sandi66 on Mar 26, 2008 15:57:18 GMT -5
By: pelicanbrief114 26 Mar 2008, 04:16 PM EDT Msg. 692427 of 692439 Jump to msg. # The Field of Battle Is Far Larger; Reaching and Cumbersome than many may realize. After perusing the thread entitled, " Dr. Byrne Sued The Wrong Defendants", I felt compelled to share some thoughts and observations on the subject matter. With that said, please allow myself to indulge a bit. First and foremost, I would like to extend my sincere gratitude and appreciation to the ENTIRE (Each and Every One of You) CMKM Diamonds, Inc. Shareholder base who have engaged and continue to perform admirably (to say the least) in this field of battle. For those who are unaware, we have been at WAR with our adversaries which comprise the most Powerful; Corrupt and Resourceful entities/people throughout the Globe. During these past years and to present day, WE, the Greatest, most Formidable, United shareholder base EVER assembled by "The Maestro" and "Team", have certainly endured our fair share of casualties along the way and to those, please allow myself in extending my well wishes and condolences. Whether it be the loss of loved ones, health concerns, personal and financial hardships, this Army stands Strong and remains Unwavering. As one knows, when entering the field of battle, such task requires many units; divisions; battalions comprised of various rank and file in order to achieve it's ultimate desired outcome, that being Victory or, in our case, Return on Investment and Justice/Accountability/Reform. Several years ago I referenced that IT all starts and ends at the FRB, the "Godfather" so to speak. If one chooses to be exact or precise, the BIS (Bank of International Settlements), whom the Globe's Central Bankers report to on a daily basis. Having said that, while the FRB acts in the capacity of a Four (4) Star General, they also possess a full fledged battle force which encompasses numerous front lines of defense. Thus, in order to attack the Generals of the opposition, one must also "Crush; Take-out and Eliminate" its front lines ie,,,Infiltrated/Infested BD's; MM's; Hedge Funds; Banks (Prime Brokerage Desks) etc.... Therefore, has Dr. Byrne sued the wrong defendants? The answer is an unequivocally: NO!!! Dr. Byrne and his team of legal representatives are engaged and performing their duties/task just as we (CMKX), albeit, attacking a different unit/division/battalion of our adversary from a different direction. During the past several years, I have had the pleasure and opportunity of conversing with Dr. Byrne on numerous occasions, and I can assure each and every shareholder that this is a man of Integrity; Compassion and Relentlessness in the pursuit of "The Cause". Furthermore, his efforts have been and continue to be of a Tenacious variety evidenced by his words, "The Brick is on the gas pedal and NOTHING will stop or alter the speeding vehicle". why didn't Dr. Byrne and Wes Christian pursue the obvious target?/ Because it is US (CMKX) who engaged in the Unprecedented, world-wide cert pull. Understand that we are the King/Queen delivering the "Check-Mate" on the Generals themselves while our forces attack other areas of defense. Why go after the brokers, when the brokers had no liability as UNSECURED balances at the Federal Reserve?/ Are we to believe that Wes Christian is incompetent?/ Addressing the above questions, Dr. Byrne, Mr. Christian and a host of many many others whom remain invisible to the public eye are indeed (and continue) pursuing the enemy. Again, albeit, a different line of defense and angle. As far as Incompetent, DO NOT EVER UNDERESTIMATE THOSE WHOM HAVE THE SHAREHOLDERS BEST INTERESTS AT HEART AND HAND!!!! Why the Brokers? Has one taken the opportunity of reading the Eagletech lawsuit, specifically pages 29-35? If you haven't, you may want to reconsider. Does one understand that the ENTIRE US Banking/Financial Structure/Institutions have been Infested/Infiltrated? With that said, one must fully and completely understand that it was US (CMKX Shareholders)/ who are and have been circling behind the front lines in order to effect and inflict damage/change/financial pain to the Head of the Beast!! Moving forward, I would like to address a few more issues. The Government has been in control of the federal reserve and to suggest otherwise is to be woefully uninformed.,/ WRONG!!!!! The Government does NOT run the FRB. It is the FRB that runs the Governments of the entire Globe. Policy makers are merely "Puppets" to the "Money Masters". Whom and where do you believe the funds derive from in order to finance the "Politico's" as well as Peace/War; Feast/Famine? That's right, the "Cartel". Junk, Fiat paper created by the stroke of a keyboard out of "Thin Air" with no backing except with the promise to repay. Think "I. O. U's". The point is that DC does control the Federal Reserve and not the Bank of New York. Again, WRONG!!!! The Fed Bank of NY is part of the FRB System. When the "Working Group" or otherwise known as the "PPT" intervene in the so-called "Free Markets", whom do you think makes the call and to where?? Let me shed some light, it goes something like this: BAT PHONE: Paulson/Treasury: Hey Tim, the Markets/Tape look nasty out there today. We can't stand to have any of this. Everyone down here is un-nerved and pacing. Make the call and put an end to this slippery slope. OK; Got it? Tim Geithner (Pres NY Fed): Hank, great to hear you. Hey, no problem. Let me call Da Boyz over at the GS Desk and we'll take care of it pronto. Paulson/Treasury: Thanks Tim, back at ya. GS Desk: Trading,,,,, Geithner: Hey guy, we're bleeding out here and this chit needs to come to a halt. Hank and the Posse are having strokes down there and we have to plug this "SIV" (pun intended). GS Desk: Hey Timmy, no problemo bud. We love shooting fish in a barrel and banking the easy coin. Let us position ourselves accordingly and presto, we'll turn this puppy in a heart beat. Later!! Out of the interest of space and time, I think I'll bring this to a conclusion. This address was in no way intended to offend or berate, merely to inform and educate. Hopefully, some light has been shed on the matter. Please forgive the rant. Finally, while our shareholder base is large and diverse, and we can and should expect varying opinions with respect to our situation/plight, WE MUST stay Focused, United and Disciplined on the goal at hand. There is absolutely nothing wrong with agreeing to disagree in a respectful manner. We ALL strive for the same outcome, Victory/ROI/Accountability/Justice!!!! "Every BATTLE is WON BEFORE it's ever fought".- Sun Tzu "It was OVER BEFORE it ever started"!!!!!! I am proud to have shared the field of battle with each and every one of you and it has been a pleasure!! For those whom are weary/tired, we have many many shoulders to carry you across the line. Feel free and Indulge your Brother/Sister/Fellow Shareholder!! See you at the Finish Line!!!! Respectfully!!!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Pleasant Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=692427
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Post by sandi66 on Mar 27, 2008 10:57:17 GMT -5
By: pelicanbrief114 27 Mar 2008, 07:37 AM EDT Msg. 692851 of 693018 Jump to msg. # Far Far Beyond "Sub-Slime". Thinking "T's" as opposed to "B's",,,,,,GLOBAL!! Pawn Shops? Loan Sharks? Bail-Out those whom created and Profiteered on the back of "The Beast"? Brush Fires; Tremors; After Shocks AND Contagion remain at the forefront!! JS "While fielding questions from an overflowing crowd at the AMEX Base and Precious Metals conference, it became clear to me that for the first time in my life, I am scared. Not for me, not for those of you prepared, but for those stuck by inertia and the average hardworking family man. Monty is right in that criticism of actions taken carries no contribution. It is our job here to focus on consequences, to be prepared for all consequences, but to hope for the best. Two new figures can be seen on the horizon. One is a political review of OTC derivatives and the other is OTC derivative litigation. Both these specters are capable of pulling the blanket of secrecy back to expose the reality of why the Fed had no other choice but to finance and broker the “bury the bankruptcy” deal of Bear Stearns into JP Morgan. The Fed has now established a precedent for being the lender of last resort to any entity that has the capacity of calling into view the credit ability of US Treasury instruments and the net work of obligations thereupon. The revelation that politics and litigation has is to reveal the character of the defunct so called asset being accepted as collateral for permanent 28 to 30 day loans and outright purchases that are sure to be rolled over repeatedly. Another revelation is that these are not mortgage buys but specific performance contracts and items derived from mortgages called SIVs. These now defunct former assets are now working their evil on the balance sheet of the central bank of the USA. Central Banks cannot go broke as they have a mechanism that results in a blank check for themselves or others. What can happen as the virus of OTC derivatives infects the balance sheet of the Fed is to further pressure the US dollar lower. The threat that the army of attorneys poses in the descent upon the directors and officers of defunct companies is a killer blow to an already reeling dollar. The political thrust is against the Fed’s use of public money to sustain just those who have vented this awful situation on mankind. The Fed did what it had to do as doing nothing would have been a bigger mistake than doing something with vast long term economic consequences. All the machinations of Fed activity can only hide the reality of the worthlessness of derived entities from real assets. This is not a mortgage crisis. It is a crisis of the light of reality being shined on the lack of reality in OTC derived items as assets with value and fundability. The definition of a derivative meltdown is not visible smoke and fire, but the inability of one side (the loser) of a special performance contract to perform as obligated. Inability to perform is an inability to pay, hence the bankruptcy and no comeback in value ever. We are in the midst of a meltdown with the effort being to prevent the domino effect". The $ 600+ Trillion "Nightmare" continues to "Unwind"!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$ets? Got CMKX? :-) Have an Enjoyable Day!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=692851
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Post by sandi66 on Mar 27, 2008 17:21:11 GMT -5
By: pelicanbrief114 27 Mar 2008, 06:01 PM EDT Msg. 693270 of 693287 Jump to msg. # When the "Lights" Go down,,,,,,,,,,,,, www.youtube.com/watch?v=SYHZtPrtFOw And what a "Journey" it's been!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Wonderful Evening!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=693270
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Post by sandi66 on Mar 28, 2008 13:12:49 GMT -5
By: pelicanbrief114 28 Mar 2008, 01:58 PM EDT Msg. 693620 of 693623 Jump to msg. # Apply The Multiplier Effect (X10 Minimum) in order to Derive the Accurate/True Assessment/Picture when ALL is said and done!!!! Da Boyz are Forgetting/Neglecting the Global Landmines, "pushed" by non-other than Wall and Broad, which go: Tic Toc Tic Toc Tic Toc,,,,,, Asia; Middle-East; Europe etc.... The forthcoming 9-18 months should prove interesting to say the least!!!! Keep the Eyes and Ears "Pinned" after the coming out Party this Summer (China/Summer Olympics). Much is undercover until the moment passes. Goldman sees credit losses totaling $1.2 trillion NEW YORK (Reuters) - Goldman Sachs forecasts global credit losses stemming from the current market turmoil will reach $1.2 trillion, with Wall Street accounting for nearly 40 percent of the losses. U.S. leveraged institutions, which include banks, brokers-dealers, hedge funds and government-sponsored enterprises, will suffer roughly $460 billion in credit losses after loan loss provisions, Goldman Sachs economists wrote in a research note released late on Monday. Losses from this group of players are crucial because they have led to a dramatic pullback in credit availability as they have pared lending to shore up their capital and preserve their capital requirements, they said. Goldman estimated $120 billion in write-offs have been reported by these leveraged institutions since the credit crunch began last summer. "U.S. leveraged institutions have written off less than half of the losses associated with the bursting of the credit bubble," they said. "There is light at the end of the tunnel, but it is still rather dim." Of the cumulative losses expected by these leveraged players, bad residential home loans will represent about half, while poor-performing commercial mortgages will represent 15 percent to 20 percent. The rest of the losses will come from credit card loans, car loans, commercial and industrial lending and non-financial corporate bonds, Goldman economists said. Facing more credit losses, leveraged institutions have raised about $100 billion in new capital from domestic and foreign investors and reduced dividend payouts. This amount is more than three-quarters of the write-offs to date, the report said. Thinking "T's" as opposed to "B's"!! Thinking CONtagion!!!! Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Fun and Enjoyable Weekend!!!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=693620ty coladaking
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Post by sandi66 on Mar 31, 2008 12:22:08 GMT -5
By: pelicanbrief114 31 Mar 2008, 12:52 PM EDT Msg. 695408 of 695412 Jump to msg. # Out Of Bounds Recently, both the Fed and Treasury seemingly went beyond their legal jurisdiction with a "non-recourse" loan "outside" of the Fed's mandate of the Federal Reserve Act. A "Late (night)" hit "Out of Bounds" which appears to have drawn the "Red Flag" and scrutiny of the Crowd/Fans. Something to Ponder: Could it be that the recently proposed Regulatory Overhaul serve as "Justification" for this apparent flagrant abuse of power, thus nullifying and the "picking-up" of the Flag in order to re-run "The Play" ? OR Is such proposal merely the very beginnings of what could possibly be a "Drip" effect (On the masses) of a more meaningful/substantive maneuver with respect to a much Greater, Far Reaching, Sweeping alteration within the Overall Framework/Landscape? Only in Time will we know!! Developing. Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=695408
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Post by sandi66 on Mar 31, 2008 12:48:37 GMT -5
By: pelicanbrief114 31 Mar 2008, 11:41 AM EDT Msg. 695382 of 695427 Jump to msg. # There's No Doubt that The Journey has taken,,,,,,,,,, www.youtube.com/watch?v=bSSBl8ISQBs Thus/Therefore,,,,,,,,,,,,, www.youtube.com/watch?v=j9SgDoypXcI While,,,,,,,,,,,,,, www.youtube.com/watch?v=-ERnT1X9HPw Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have a Wonderful and Joyous Day!!!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=695382
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Post by sandi66 on Apr 1, 2008 5:24:28 GMT -5
By: pelicanbrief114 31 Mar 2008, 11:31 PM EDT Msg. 695660 of 695673 Jump to msg. # Who's Financing the Bailout? Many would be ****Thinking**** "The Cartel". Well, part of that is correct. The "Flip-side" of the coin; Who's paying the "Juice"? Aaaaaah, once agin, the backs of the Hard Working Citizens, otherwise known on Broad and Wall as "OPM" Other Peoples Money,,,,,,,YOU!!!! Pawn Shops? Loan Sharks? Open Windows? Bill Gross When I'm Sixty-Four Doing the garden, digging the weeds, who could ask for more? Will you still need me, will you still feed me, when I’m sixty-four. – The Beatles Well who would have thunk it? Not Paul McCartney forty years ago and certainly not yours truly, but yes he has, and I am, about to turn 64. Unlike Paul’s doleful dowager however, who pines for a companion to help him digging the weeds in a vegetable garden, life has offered up a more tossed and complicated salad for me to munch on. An authentic global financial crisis has led to sixteen-hour days and little time for gardening or the golf course for that matter. Still I’m not complaining – just explaining. As my wife Sue tells me every once in awhile, "You don’t have to go to work, you know." Nor, I suppose, do I have to spend a Sunday afternoon writing Investment Outlooks, but here I am. Because, it only takes a second to realize how exciting this all is. The current crisis is like putting together the world’s largest jigsaw puzzle and recognizing you’ve completed the borders and a lot of the interior patterns. Can’t stop now. Besides, 64 isn’t old. The definition of old is "someone who is 15 years older than you are" and so I guess time must be on my side. Anyway, I hope I have a happy 64th and I’m glad that many of you still need me. The feeding, thank goodness, I can still do for myself. There are so many important think pieces that have come up in recent PIMCO Investment Committee meetings that I thought I’d do a smorgasbord summary of four of them in order to let you know what we are keeping an eye on as we move ahead through 2008. They are as follows: Credit Markets, Reregulation, and Home Prices In my opinion, the private credit markets have forfeited their privileged right to operate relatively autonomously because of incompetence, excessive greed, and in minor instances, fraudulent activities. As a result, the deflating private market’s balance sheet is being re-nationalized in some cases with increased regulation, in others with outright guarantees and agency lending. Ultimately government programs which support private credit market assets may be required in order to prevent an asset deflation of significant proportions. Authorities must act quickly, with a shot of adrenalin straight to the heart of the problem: home prices. Since homes are the most highly levered and monetarily significant asset that American consumers own, if they decline much further they will drag the rest of the economy with them. Supporting home prices goes counter to the thinking of Republican orthodoxy. President Bush and Treasury Secretary Paulson argue that markets must "clear" in order to avoid similar mistakes made by Japanese authorities in the 1990s. Yet we may have passed the point of no return for "clearing" markets. Home price declines of 20% are in fact much more of a shock to the American economy than the popping of the Internet bubble and NASDAQ 5000, because the amount of homeowner leverage is so much greater. A 20% negative adjustment not only wipes out all ownership equity for millions of Americans, it turns their homes "upside down" – incentivizing them to let their gardens grow weeds instead of lettuce. The decline needs to be stopped quickly in order to avert additional crises. Bear Stearns and the Shadow Banking System The implosion of the Shadow Banking System claimed another victim in recent weeks with the forced sale of Bear Stearns to JPMorgan. The most likely conclusion to be drawn from the "Why Bear, Why Now?" question is that Bear Stearns was the most highly levered of the major investment banks and that it was not well loved on the Street. The combination of the two led to increased haircuts and ultimately margin calls on the hundreds of billions of assets that were being financed by the intricate web of the Shadow. Perhaps more significantly, the Fed’s near simultaneous provisions for discount window lending to investment banks was a major extension of Federal Reserve attitudes/authority that have seemed to typify past financial crises. The LTCM fiasco of 1998 led to an unofficial blessing of sizable hedge funds as "too big to liquidate" for instance, which led to the conclusion that the hedge fund industry had, to some extent, been validated. The Fed’s current invitation for investment banks to join the "discount window club" is a similar validation. It will however, come with a price tag. There seems no way that current reserve requirements for banks will not in some nearly uniform way be imposed on investment banks. Leverage and gearing ratios of securities firms therefore, will in a few years resemble those of commercial banks themselves resulting in reduced profitability for major houses such as Goldman, Lehman, and Merrill Lynch. Currently investment banks have only 50% of the capital base of standard commercial banks. If the two are to approximate each other either through regulation or moral suasion, these Shadow banks will likely be forced to raise expensive capital and/or reduce the bottom line footings of their balance sheets. Either way, this need to have the Shadow Banking System more closely resemble the banks of Jimmy Stewart’s "It’s a Wonderful Life" will be costly, and bond spreads as well as stock prices should begin to reflect it. Additionally, and importantly, because of this lender-of-last-resort operation, subsequent inflationary trends may have been fertilized because the debts that caused the crisis are now primarily in another private portfolio and not liquidated (the Fed having absorbed only 10% of the collateral). These debts have to be validated by policy makers through attempts to increase cash flows in the finance-based economy, which is another way of saying they are trying to reflate, which is another way of forecasting an increasing probability of higher inflation. Asset-Backed Lending I’ve had a famous picture of J.P. Morgan on my office wall for 25 years. Even now, the old man seems to be staring at my back and taunting me with his famous quote written just below his vest with pocket watch in full view: "Lending is not based primarily on money or property. No sir, the first thing is character." For 20 of these 25 years I thought this idea was a relic of an outdated era. How could you judge the character of a CDO or an asset-backed security? Far better to lend on well collateralized property, I reasoned. But then it became increasingly apparent that credit, when issued against the collateral of assets, had a capacity to multiply itself without restraint. The Shadow sanctioned and blessed increasing leverage under the assumption that "property" (houses) could only go up in value. "Character" had no place in such a modern-day financed-based economy. Liar loans, fraudulent appraisals, or even just the origination and resale of mortgage loans and asset-backed securities themselves proved that character was out, and property securitization was in. Thank you JP. While it’s improbable that we can ever go back to your "know the customer" model of lending, we will likely pull back from our rating service blessed confidence in asset-backed securities. In its place will likely come the increasing reliance on government/agency guarantees as well as the explicit use of the government’s balance sheet to support and then assimilate egregious loans of the past decade. As well, because of the retreat of securitization, risk spreads – from corporate bonds to equities, to commercial and residential real estate – will settle at permanently higher levels. The U.S. asset-based economy will morph into a more expensive hybrid that will reign supreme for years to come. No Bailouts? Politicians – especially those on the Republican side of the aisle – are adamant about not using taxpayers’ funds to bailout Wall Street or housing speculators, or whoever the current devil may be. The public seems to nod in agreement while at the same time not noticing that their watch is being lifted or their pocket being picked. Let’s see: Twelve months ago the yield on your money market fund was 5%+ but your next statement will probably feature something closer to 2%. Did your money market fund (which in aggregate approaches 3 trillion dollars) experience any capital gains in the process? Absolutely not. So it looks like your (the taxpayer’s) contribution to the bailout of banks, or Florida condominium speculators can at least be quantified: 3% foregone interest per year on whatever you own. In addition, as pointed out in a previous section, the reflationary (inflationary) implications of all this suggest your contribution to the bailout will be even greater, since you’ll likely wind up paying higher prices for many of the things you’ll buy. Ah, government sometimes works in mysterious ways. There’s more than one way to have taxpayers bailout Wall Street! Welll, that’s enough liberal, populist, straight-talking think pieces for one Investment Outlook. Over the past few pages I’ve suggested: 1) home price declines have to be halted in order to revive the U.S. economy, 2) the Bear Stearns crisis and its solution will lead to increased government regulation and a higher probability of inflation, 3) J.P. Morgan (the old man) was right – character, not assets, should form the foundation for lending, although a reversion to this old-fashioned model is not likely anytime soon, and 4) whether you know it or not – whether you like it or not – you are bailing out Wall Street. And with that, let me put on my Mad Hatter hat from Alice in Wonderland and say, "A very merry un-birthday to you, to you." I’m the one, I guess, who’s sixty-four. "History never repeats itself, but sometimes it rhymes". Protect and Govern Thyself!! Got Gold/$ilver/Hard A$$et$? Got CMKX? :-) Have an Enjoyable Evening!!!! 4ND ragingbull.quote.com/mboard/boards.cgi?board=CMKI&read=695660
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