dcb's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/230788/comments http://seekingalpha.com/article/171549-charlie-gasparino-another-crash-has-to-happen-again?source=feed#comment-749991 749991
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sanders.senate.gov/pet...]]> Sat, 07 Nov 2009 13:43:01 -0500
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sanders.senate.gov/pet...]]> http://seekingalpha.com/article/169186-dark-pools-are-not-scary-damp-places-where-investors-get-ripped-off?source=feed#comment-732953 732953
If it cost society more to have an open system where all players receive the same information it is worth the price. god knows what can happen in these pools, and it is simply something I don't want to worry about. seeing order flows, etc. It just opens a can of worms.

Please excuse me if I just decide not to trust banks at their word in this regard.

As for HFT, you should know that there really is no comprehennsive study on the subject. My intuitive gut is that they increase magnify a concept called resonance, meaning when I trade O try to find out what algorhythm the other person is using and follow it. this amplifies highs and lows. I am also sick of see what I think is a run and the HFT trader sells out. it turns the usual signals into useless mush. Very simply there should be a transaction tax. Think about it. the exchanges are paying people to trade on them. No wonder they want HFt. No paying for trading, and transaction tax. if you want to do HFT then do so, but by adding some kind of tax it means one would have to think about things like cash flow and valuation before trading. the idea that you get paid from the system for trading doesn't help anyone.

wth HFT, just mean those who have access to the discount window , and are the exclusive supplemental liquidy providers to and exchange have unlimited fire power in 2000 unit trades to do what ever they want with the market.

Big trades that would move the market and upset those delicate computer algos have to be kept off the system. that's why they don't want it.

Example from Jan to march indexes dropped but vix decreased. Because on lower trading volumes quants can tailor the drop to keep vix down. Big sell orders screw up the quants and that's what happened after Lehman. the systems couldn't cope and algo trading becomes useless. that is why dark pools are wanted. It just makes it easier for them to manipulate the market.

I have sold lots of vix options. I want to drop the market but not pay, I use my HFT quant fund to do it. See Jan to March this year. Means I can be short but not trigger those expensive options I have sold!!!

You think the market going down have anything to do with the call/put ratio being high. Now that the wall street players have sold so many calls they drop it in order not to pay off. they can buy puts, sell vix options, etc. control the movement with high speed computers that move like lightning. You can tailor your program to look at your entire portfolio and max your profits, shorts, call, etc.
Big trades fuck up the program so they have to be taken into dark pools. That is what this is about!!!]]> Tue, 27 Oct 2009 17:49:51 -0400
If it cost society more to have an open system where all players receive the same information it is worth the price. god knows what can happen in these pools, and it is simply something I don't want to worry about. seeing order flows, etc. It just opens a can of worms.

Please excuse me if I just decide not to trust banks at their word in this regard.

As for HFT, you should know that there really is no comprehennsive study on the subject. My intuitive gut is that they increase magnify a concept called resonance, meaning when I trade O try to find out what algorhythm the other person is using and follow it. this amplifies highs and lows. I am also sick of see what I think is a run and the HFT trader sells out. it turns the usual signals into useless mush. Very simply there should be a transaction tax. Think about it. the exchanges are paying people to trade on them. No wonder they want HFt. No paying for trading, and transaction tax. if you want to do HFT then do so, but by adding some kind of tax it means one would have to think about things like cash flow and valuation before trading. the idea that you get paid from the system for trading doesn't help anyone.

wth HFT, just mean those who have access to the discount window , and are the exclusive supplemental liquidy providers to and exchange have unlimited fire power in 2000 unit trades to do what ever they want with the market.

Big trades that would move the market and upset those delicate computer algos have to be kept off the system. that's why they don't want it.

Example from Jan to march indexes dropped but vix decreased. Because on lower trading volumes quants can tailor the drop to keep vix down. Big sell orders screw up the quants and that's what happened after Lehman. the systems couldn't cope and algo trading becomes useless. that is why dark pools are wanted. It just makes it easier for them to manipulate the market.

I have sold lots of vix options. I want to drop the market but not pay, I use my HFT quant fund to do it. See Jan to March this year. Means I can be short but not trigger those expensive options I have sold!!!

You think the market going down have anything to do with the call/put ratio being high. Now that the wall street players have sold so many calls they drop it in order not to pay off. they can buy puts, sell vix options, etc. control the movement with high speed computers that move like lightning. You can tailor your program to look at your entire portfolio and max your profits, shorts, call, etc.
Big trades fuck up the program so they have to be taken into dark pools. That is what this is about!!!]]> http://seekingalpha.com/article/168497-nouriel-roubini-one-on-one-more-doom-and-gloom?source=feed#comment-730296 730296 Mon, 26 Oct 2009 05:17:08 -0400 http://seekingalpha.com/article/168497-nouriel-roubini-one-on-one-more-doom-and-gloom?source=feed#comment-730295 730295

On Oct 24 06:27 PM TLassen wrote:

> No it's cheaper for the Chinese to buy gold and other commodities,
> it is not because they are diversifying out of the USD, the commodities
> are bought to meet the demand needed for their expanding economy.
>
>
> They will move out of the USD when it strengthens again in the future,
> not now when it is at a low relative value to their currency.]]> Mon, 26 Oct 2009 05:15:46 -0400

On Oct 24 06:27 PM TLassen wrote:

> No it's cheaper for the Chinese to buy gold and other commodities,
> it is not because they are diversifying out of the USD, the commodities
> are bought to meet the demand needed for their expanding economy.
>
>
> They will move out of the USD when it strengthens again in the future,
> not now when it is at a low relative value to their currency.]]> http://seekingalpha.com/article/167565-the-secret-paulson-goldman-meeting?source=feed#comment-723627 723627 the problem is not a single episode. It is a pattern of behavior that has happened over an over again. May I suggeset doing some background reading on the issue. Any truly informaed person that has an understanding of the sum totality of events can reach conclusions that are not consistant with american democracy or capitalism (at least the way it should be).
My guess is that you wouldn't consider goldman having two stock trading days of losses in a quarter to perhaps indicate the ability to manipulate the market, along with the code that says the justice department could be used ot manipulated the market. the 100% on the dollar from AIG, the appointment of Liddy, the fact that blankfein wass the only person in the room when the meeting went down between treasury and AIG, or perhaps the variance become a commercial bank in record time but the waiver to have to follow commercial bank trading rules and risk positions. Yeah you're right there isn't any potential issue here.

I tried real hard to not be overly insulting, but I think your comments insult you enough.


On Oct 21 02:25 AM John Aislabie wrote:

> What is the matter with everybody? The frenzied to need to show everything
> is a conspiracy is puerile.
> The guy has a social meeting with his old colleagues - only after
> checking with General Counsel. What is he supposed to do to stay
> in touch with the currents of banking activity? ~Chat with Last National
> of Podunk, Arkansas ?
> We should want our administrators to be well informed and preferably
> on first name terms with the movers and shakers, this stuff is much
> too serious to be handled by amateurs.]]> Wed, 21 Oct 2009 11:48:28 -0400 the problem is not a single episode. It is a pattern of behavior that has happened over an over again. May I suggeset doing some background reading on the issue. Any truly informaed person that has an understanding of the sum totality of events can reach conclusions that are not consistant with american democracy or capitalism (at least the way it should be).
My guess is that you wouldn't consider goldman having two stock trading days of losses in a quarter to perhaps indicate the ability to manipulate the market, along with the code that says the justice department could be used ot manipulated the market. the 100% on the dollar from AIG, the appointment of Liddy, the fact that blankfein wass the only person in the room when the meeting went down between treasury and AIG, or perhaps the variance become a commercial bank in record time but the waiver to have to follow commercial bank trading rules and risk positions. Yeah you're right there isn't any potential issue here.

I tried real hard to not be overly insulting, but I think your comments insult you enough.


On Oct 21 02:25 AM John Aislabie wrote:

> What is the matter with everybody? The frenzied to need to show everything
> is a conspiracy is puerile.
> The guy has a social meeting with his old colleagues - only after
> checking with General Counsel. What is he supposed to do to stay
> in touch with the currents of banking activity? ~Chat with Last National
> of Podunk, Arkansas ?
> We should want our administrators to be well informed and preferably
> on first name terms with the movers and shakers, this stuff is much
> too serious to be handled by amateurs.]]> http://seekingalpha.com/article/167087-long-term-interest-rates-suggest-low-inflation?source=feed#comment-719475 719475
If I knew were going to collapse when the price of oil got high because I understood the nature of how much debt was in the system and a bit of a commodity induced recession, inflation, would make consumers unable to pay their debts and then collapse. I saw it, yet the best and brightest on wall street and the fed didn't. Too hard to believe I'm afraid. That's just fiction for the public.

the crash, destruction of household wealth, and the reflation of the system in a manner they knew was going to happen suited wall streets interests. Esp Goldman Sachs. Investment banks are the power behind the NY Fed, and NY Fed is the power in the Fed. I see huge profits and record bonus as clear reasons as to why the crisis has been good for them. Big Ben knows he is going to be set for life on leaving the FED, as to the other policy makers. all they need to do with the current system is maintain plausible deniability. Conformation of this theory is appointments of Geitner, Summers, and reappointment of Bernanke. Why else would you be putting in people who have had such a large role in ensuring the crisis happened and not being able to see it would happen.

I hate to say it, but one should look for easy explanations before complex ones. Other explanations just involve too many errors and too many rewards for people who made those errors for me to believe.

It suits those who hold the power to have the cheap easy credit go on for as long as they can, to drop the dollar and cause inflation. remeber they were telling us there was no inflation before when oil was rocketing. all you have to do is follow commodity prices to see the inflation in the piple line.
they rig the data because thye make a comparison right before the crash when inflationary prices were the highist. There is absolutely no reason why anything is wrong after what happen to have deflation for a few years other than it doesn't help wall street to earn money. strong dollar= lower energy prices= more free spending money for over indebted consumers=faster recovery. Why don't the Fed choose to engage in policies that deliberately prolong the recovery, why do we keep funding costs low when the money isn't being used to expand credit but inflate asset prices, why are we forcing the banks to lend.

1% of the US own 24% of wealth, they took a big hit and policies are designed to restore that wealth desparity as quickly as possable under the cover of "helping us". The rise in oil helped to trigger the crisis. caused by Bernanke's early rate lowering. the thoery was that by lowering rates early we would recover faster and be early to raise. that hasn't happened and won't happen. I'm sorry but other ways to explain the crisis, the response, and the continued headwinds to reform, etc. just don't allow any other way to explain what happened.

why did we pay AIG debt at 100%? why did we convet goldman to holding company, the list goes on and on. Rob emanueal said never waste a crisis. Well wall street hasn't they have used it as a way to consolidate power in the system and used the excuse of helping us to do it!!!


On Oct 18 05:04 AM Dave Wrixon wrote:

> All this shows is that Bernanke's blatant attempts to rig the market
> are holding for now. If you are betting on long-term interest rates
> you would need to be very confident that this guy knows what he is
> doing. Don't forget, he never even seen the financial crisis coming
> and was a substantial contributor to the problem. He is also squandering
> tax payers money to attempt to redress the balance without having
> a mandate to do so. Frankly, I would sooner trust Madhof. At least
> he came clean before the scam was obvious to everyone.]]> Sun, 18 Oct 2009 12:44:28 -0400
If I knew were going to collapse when the price of oil got high because I understood the nature of how much debt was in the system and a bit of a commodity induced recession, inflation, would make consumers unable to pay their debts and then collapse. I saw it, yet the best and brightest on wall street and the fed didn't. Too hard to believe I'm afraid. That's just fiction for the public.

the crash, destruction of household wealth, and the reflation of the system in a manner they knew was going to happen suited wall streets interests. Esp Goldman Sachs. Investment banks are the power behind the NY Fed, and NY Fed is the power in the Fed. I see huge profits and record bonus as clear reasons as to why the crisis has been good for them. Big Ben knows he is going to be set for life on leaving the FED, as to the other policy makers. all they need to do with the current system is maintain plausible deniability. Conformation of this theory is appointments of Geitner, Summers, and reappointment of Bernanke. Why else would you be putting in people who have had such a large role in ensuring the crisis happened and not being able to see it would happen.

I hate to say it, but one should look for easy explanations before complex ones. Other explanations just involve too many errors and too many rewards for people who made those errors for me to believe.

It suits those who hold the power to have the cheap easy credit go on for as long as they can, to drop the dollar and cause inflation. remeber they were telling us there was no inflation before when oil was rocketing. all you have to do is follow commodity prices to see the inflation in the piple line.
they rig the data because thye make a comparison right before the crash when inflationary prices were the highist. There is absolutely no reason why anything is wrong after what happen to have deflation for a few years other than it doesn't help wall street to earn money. strong dollar= lower energy prices= more free spending money for over indebted consumers=faster recovery. Why don't the Fed choose to engage in policies that deliberately prolong the recovery, why do we keep funding costs low when the money isn't being used to expand credit but inflate asset prices, why are we forcing the banks to lend.

1% of the US own 24% of wealth, they took a big hit and policies are designed to restore that wealth desparity as quickly as possable under the cover of "helping us". The rise in oil helped to trigger the crisis. caused by Bernanke's early rate lowering. the thoery was that by lowering rates early we would recover faster and be early to raise. that hasn't happened and won't happen. I'm sorry but other ways to explain the crisis, the response, and the continued headwinds to reform, etc. just don't allow any other way to explain what happened.

why did we pay AIG debt at 100%? why did we convet goldman to holding company, the list goes on and on. Rob emanueal said never waste a crisis. Well wall street hasn't they have used it as a way to consolidate power in the system and used the excuse of helping us to do it!!!


On Oct 18 05:04 AM Dave Wrixon wrote:

> All this shows is that Bernanke's blatant attempts to rig the market
> are holding for now. If you are betting on long-term interest rates
> you would need to be very confident that this guy knows what he is
> doing. Don't forget, he never even seen the financial crisis coming
> and was a substantial contributor to the problem. He is also squandering
> tax payers money to attempt to redress the balance without having
> a mandate to do so. Frankly, I would sooner trust Madhof. At least
> he came clean before the scam was obvious to everyone.]]> http://seekingalpha.com/article/166529-smart-guys-on-wall-street-the-trillin-theory?source=feed#comment-716180 716180
My theory is this meant more money was actually going to productive investment capacity instead of being paid to the folks who just shuffle the money around skimming off what would be other wise better served in productive uses. This is the difference between a financial sector that serves the country and one that serves themselves.

Note also that in both cases we had financial crisis. Look at the years, the pay. This episode and the great depression. Maybe there is something inherently unstable about the system that allows so much excess profits.
The conditions that allow the creation this wealth disparity are inherently unstable. Yet our government wants to bring it back!!!

Note that the pay level distortion took off at exactly the same time as securitisation. When debt to GDP ratios took off and increasing amounts of debt did not increase nominal GDP. An excessively profitable financial sector is inherently unstable and bad for 99% of the country. The conditions that create the profitability create instability. Knowing what you now know is it any wonder these pundits keep saying what they do. All that concerns them is their excessive profitability, not america. They see we need securitisation for growth, the exact opposite is in fact the case. they need securitisation for excessive profitability. This creates instability. Austrian economics understands this, which is why they aren't allowed in our government and you don't see much of them working for corporate controlled media. It doesn't matter if they are fresh or salt water economists because this keeps the liquidity flowing. Of course the mountain economists (Austrian) take it away. Therefore you have a government, media, industrial bias on the information you hear and those that advocate these positions move up the ladder. After all they keep the party going!!!!]]> Thu, 15 Oct 2009 09:22:49 -0400
My theory is this meant more money was actually going to productive investment capacity instead of being paid to the folks who just shuffle the money around skimming off what would be other wise better served in productive uses. This is the difference between a financial sector that serves the country and one that serves themselves.

Note also that in both cases we had financial crisis. Look at the years, the pay. This episode and the great depression. Maybe there is something inherently unstable about the system that allows so much excess profits.
The conditions that allow the creation this wealth disparity are inherently unstable. Yet our government wants to bring it back!!!

Note that the pay level distortion took off at exactly the same time as securitisation. When debt to GDP ratios took off and increasing amounts of debt did not increase nominal GDP. An excessively profitable financial sector is inherently unstable and bad for 99% of the country. The conditions that create the profitability create instability. Knowing what you now know is it any wonder these pundits keep saying what they do. All that concerns them is their excessive profitability, not america. They see we need securitisation for growth, the exact opposite is in fact the case. they need securitisation for excessive profitability. This creates instability. Austrian economics understands this, which is why they aren't allowed in our government and you don't see much of them working for corporate controlled media. It doesn't matter if they are fresh or salt water economists because this keeps the liquidity flowing. Of course the mountain economists (Austrian) take it away. Therefore you have a government, media, industrial bias on the information you hear and those that advocate these positions move up the ladder. After all they keep the party going!!!!]]> http://seekingalpha.com/article/166529-smart-guys-on-wall-street-the-trillin-theory?source=feed#comment-716141 716141 Thu, 15 Oct 2009 08:54:17 -0400 http://seekingalpha.com/article/166529-smart-guys-on-wall-street-the-trillin-theory?source=feed#comment-716137 716137 decide.

JP Morgan profits lift Dow above 10,000
$3.6bn net income best figure since 2007
Investment banking arm provides boost
By Francesco Guerrera in New York
The Dow Jones Industrial Average climbed above 10,000 for the first time in more than a year yesterday after JPMorgan Chase kicked off the US banks’ third-quarter results season by reporting its biggest profit since 2007.
The $3.6bn in net income earned by JPMorgan in the three months to the end of September easily beat analysts’ expectations and has set the bar for rivals Goldman Sachs, Citigroup and Bank of America, which report later this week.
The unexpected results from JPMorgan, coupled with relatively resilient US retail sales, and better earnings than expected from Intel on Tuesday, sparked a broader market rally.
The Dow rose 144.80 points, or 1.47 per cent, to 10,005.86, finishing above the 10,000-point mark for the first time since October 3 2008, the day the troubled asset relief programme was approved by Congress and signed into law.
JPMorgan’s performance highlighted the contrast between Wall Street’s resurgence and the continuing weakness of US consumers. Analysts said they expected the divide to be evident as other financial groups report, with securities houses such as Goldman Sachs and Morgan Stanley expected to do better than banks with huge retail operations such as Citigroup and BofA.
“Wall Street is picking up quite smartly, while Main Street continues to suffer,” said Bart Narter at Celent, a research and consulting group. “Rising unemployment and declining house prices will cause continuing pain on Main Street and the banks that serve it.”
JPMorgan’s investment banking arm, which ousted its cohead Bill Winters last month, accounted for more than half of group profits, driven by strong revenues in its fixed-income arm and other trading divisions.
The securities unit also benefited from a $400m gain on its leveraged loans and mortgage-backed assets – the first time a US bank has disclosed a significant “write-up” on the value of securities that have caused huge losses to the sector.
JPMorgan’s net income of $3.6bn compared with $527m last year. It was the bank’s best profit since the second quarter of 2007. Earnings per share were $0.82, up from $0.09.
Yet its US consumer businesses continued to bleed, with its credit card unit losing $700m in the quarter and its retail bank, which was augmented by the purchase of the regional lender Washington Mutual last year, barely breaking even.
Jamie Dimon, chief executive, said he had seen “initial signs of consumer credit stability” but warned it was too early to call the end of the downturn.





Geithner aides had made millions of dollars
‘Counsellors’ worked on Wall St
Advisers escaped Senate hearings
By Tom Braithwaite in Washington
Obama administration officials now working on fixing and regulating the financial system were beneficiaries of several million dollars in pay from Wall Street and private equity companies, it has been revealed.
Financial disclosure forms show that before joining the government, Gene Sperling, a senior Treasury adviser, was paid $887,727 by Goldman Sachs and $158,000 for speeches to companies that included Stanford Group, the company run by Sir Allen Stanford, who has since been charged with fraud.
Mr Sperling’s compensation from Goldman was for work on a philanthropic project. His overall pay, including for his main job at the Council on Foreign Relations, totalled $2.2m in the 13 months to January.
The forms, first obtained by Bloomberg, showed that Matthew Kabaker, another adviser in the Treasury, earned $5.8m at Blackstone, the private equity firm, in the two years before joining the administration to work on plans to support banks and spur lending. Much of the package was in stock.
Lewis Alexander, another adviser, was chief economist to Citigroup before joining the administration; he was paid $2.4m in the past two years.
Even though some of the officials whose previous salaries were disclosed are senior, many were appointed as “counsellors”, so escaped Senate confirmation hearings that could have highlighted their past remuneration and employment at a time of heightened animosity towards the financial industry.
This month the release of the telephone call logs of Tim Geithner, Treasury secretary, showed that he had numerous conversations with a number of Wall Street executives, sparking allegations that the administration was too close to the industry.
Officials argued, then and yesterday, that it was important to have skilled people working for the government as it crafted complicated financial rescues and for Mr Geithner to communicate with financial sector executives. Mr Geithner, former president of the Federal Reserve Bank of New York, has never worked on Wall Street.
Mr Obama, however, has hit out at the culture that he said prevailed before last year’s financial crisis – at a time when many of the Treasury officials were working on Wall Street and related businesses.
“We will not go back to the days of reckless behaviour and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses,” he said at a speech in New York last month.
Previous releases of disclosure forms revealed the $5.2m paid to Lawrence Summers, chief economic adviser to the White House, by DE Shaw, the hedge fund, in the two years before he joined the administration.
The disclosures come during a complicated time for the relationship between the Obama administration and business, with officials accused of being too close to companies on the one hand and encountering increased criticism from business lobby groups on the other.
The US Chamber of Commerce yesterday launched its “campaign for free enterprise”, arguing the private sector was under threat from various over-reaching government plans, including for a Consumer Financial Protection Agency and a cap-and-trade scheme to reduce carbon emissions.

Dollar falls to 14-month low after Fed signals no rise in rates soon
Minutes show support for new asset purchases
By Krishna Guha in Washington
The dollar fell yesterday after minutes from the Federal Reserve’s last policy meeting showed that some committee members favoured increased purchases of assets such as mortgage-backed securities to speed recovery.
While the committee simply agreed to keep open the option of either expanding or reducing the purchases if the economic outlook changed, only one policymaker made the case for scaling back buying – leaving an overall doveish skew.
This tone was echoed in the discussion of inflation. Most Fed officials “anticipated that slack in both labour and product markets would be substantial over the next few years, leading to subdued and potentially declining wage and price inflation.”
They agreed that inflation expectations needed to be “carefully monitored” but indicated that they would seek to manage these expectations by building confidence in their exit strategy, rather than by raising rates preemptively.
With inflation fears muted and forecasts of protracted high unemployment, the minutes suggest that the Fed is still a long way from raising interest rates. This undermined the dollar, which fell to a 14-month low on a trade-weighted basis.
The minutes confirm that the US central bank is examining “reverse repurchase agreements on a large scale, potentially with counterparties other than the primary dealers” as a possible way to mop up excess liquidity when the time comes to tighten policy. The other counterparties envisaged prominently include money market mutual funds.
The minutes also show that the Fed viewed the decline in Treasury yields as “puzzling” given the improved economic outlook. Fed staff economists raised their forecast for the second half and projected that growth would strengthen further in 2010 and in 2011. They “forecast core inflation to slow somewhat further over the next two years from the pace of the first half of 2009.” They thought unemployment would be about 9.25 per cent at the end of 2010 and about 8 per cent at the end of 2011.
The minutes show that many Fed policymakers also raised their growth forecasts. But many still expected the recovery to be “quite restrained” – in part, because credit “remained difficult to obtain and costly”.
They also “expressed considerable uncertainty about the likely strength of the upturn” once government supports were withdrawn.


So lets put this all together for those who can't actually see the PONZI scheme. The big banks are making huge profits again and folks are getting their bonuses. But they are cutting back giving out credit, so the money is being made by trading. Even though this is happening, it is too early to tighten rates so the big banks would actually have to pay for the money from the discount window to buy assets. This of course allows for huge leverage of asset price purchases for nothing. Thus really only benefiting people who own lots of stocks. In fact even though they are making profits the fed is going to keep buying their toxic assets with your tax money. Meanwhile your dollar in your savings account has dropped to a 14 month low and you aren't getting any interest to make up for it.

Now we add to that a President who said certain things during his election that turned out to be complete lies. Instead he appoints the head of the NY fed, who lies and said he has never worked on wall street (yet working for the NY fed is the same as working for wall street). Well what would you expect he is a tax cheat. To avoid appear as the out right liars they are and to avoid senate confirmation issues he appoints counselors who have made their money on wall street. "Back door appointments".

Lastly with their unlimited financial power and inherent advantage due to lobby money the American chamber of commerce starts a propaganda campaign to ensure that any and all reform efforts that would actually help the majority of people don't get enacted. This way our liar of a president can claim he got the bills done and had to make concessions to the right, when his treasury has been bought and paid for all the time. See the great majority of what you see is theater for your consumption designed to prevent you from putting two and two together. All along the White house was going to give industry what they wanted (because they have been bought and paid for). Industry fights a campaign of extreme positions asking for much more than they want. Then the president can claim victory for the little guy when he is getting nothing.

You see folks, the whole system is designed against you. This isn't democracy. It is a fictional theater designed to make you ever poorer while the wealthy stay in power and get richer at your expense.

For those people who call the folks bringing their fire arms to meet their elected representatives "crazy", well they aren't they are the rational ones who see what is going on and are tired of it. Does anyone really have the balls to say that our government is a legitimate representative democracy. It isn't. ]]> Thu, 15 Oct 2009 08:53:26 -0400 decide.

JP Morgan profits lift Dow above 10,000
$3.6bn net income best figure since 2007
Investment banking arm provides boost
By Francesco Guerrera in New York
The Dow Jones Industrial Average climbed above 10,000 for the first time in more than a year yesterday after JPMorgan Chase kicked off the US banks’ third-quarter results season by reporting its biggest profit since 2007.
The $3.6bn in net income earned by JPMorgan in the three months to the end of September easily beat analysts’ expectations and has set the bar for rivals Goldman Sachs, Citigroup and Bank of America, which report later this week.
The unexpected results from JPMorgan, coupled with relatively resilient US retail sales, and better earnings than expected from Intel on Tuesday, sparked a broader market rally.
The Dow rose 144.80 points, or 1.47 per cent, to 10,005.86, finishing above the 10,000-point mark for the first time since October 3 2008, the day the troubled asset relief programme was approved by Congress and signed into law.
JPMorgan’s performance highlighted the contrast between Wall Street’s resurgence and the continuing weakness of US consumers. Analysts said they expected the divide to be evident as other financial groups report, with securities houses such as Goldman Sachs and Morgan Stanley expected to do better than banks with huge retail operations such as Citigroup and BofA.
“Wall Street is picking up quite smartly, while Main Street continues to suffer,” said Bart Narter at Celent, a research and consulting group. “Rising unemployment and declining house prices will cause continuing pain on Main Street and the banks that serve it.”
JPMorgan’s investment banking arm, which ousted its cohead Bill Winters last month, accounted for more than half of group profits, driven by strong revenues in its fixed-income arm and other trading divisions.
The securities unit also benefited from a $400m gain on its leveraged loans and mortgage-backed assets – the first time a US bank has disclosed a significant “write-up” on the value of securities that have caused huge losses to the sector.
JPMorgan’s net income of $3.6bn compared with $527m last year. It was the bank’s best profit since the second quarter of 2007. Earnings per share were $0.82, up from $0.09.
Yet its US consumer businesses continued to bleed, with its credit card unit losing $700m in the quarter and its retail bank, which was augmented by the purchase of the regional lender Washington Mutual last year, barely breaking even.
Jamie Dimon, chief executive, said he had seen “initial signs of consumer credit stability” but warned it was too early to call the end of the downturn.





Geithner aides had made millions of dollars
‘Counsellors’ worked on Wall St
Advisers escaped Senate hearings
By Tom Braithwaite in Washington
Obama administration officials now working on fixing and regulating the financial system were beneficiaries of several million dollars in pay from Wall Street and private equity companies, it has been revealed.
Financial disclosure forms show that before joining the government, Gene Sperling, a senior Treasury adviser, was paid $887,727 by Goldman Sachs and $158,000 for speeches to companies that included Stanford Group, the company run by Sir Allen Stanford, who has since been charged with fraud.
Mr Sperling’s compensation from Goldman was for work on a philanthropic project. His overall pay, including for his main job at the Council on Foreign Relations, totalled $2.2m in the 13 months to January.
The forms, first obtained by Bloomberg, showed that Matthew Kabaker, another adviser in the Treasury, earned $5.8m at Blackstone, the private equity firm, in the two years before joining the administration to work on plans to support banks and spur lending. Much of the package was in stock.
Lewis Alexander, another adviser, was chief economist to Citigroup before joining the administration; he was paid $2.4m in the past two years.
Even though some of the officials whose previous salaries were disclosed are senior, many were appointed as “counsellors”, so escaped Senate confirmation hearings that could have highlighted their past remuneration and employment at a time of heightened animosity towards the financial industry.
This month the release of the telephone call logs of Tim Geithner, Treasury secretary, showed that he had numerous conversations with a number of Wall Street executives, sparking allegations that the administration was too close to the industry.
Officials argued, then and yesterday, that it was important to have skilled people working for the government as it crafted complicated financial rescues and for Mr Geithner to communicate with financial sector executives. Mr Geithner, former president of the Federal Reserve Bank of New York, has never worked on Wall Street.
Mr Obama, however, has hit out at the culture that he said prevailed before last year’s financial crisis – at a time when many of the Treasury officials were working on Wall Street and related businesses.
“We will not go back to the days of reckless behaviour and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses,” he said at a speech in New York last month.
Previous releases of disclosure forms revealed the $5.2m paid to Lawrence Summers, chief economic adviser to the White House, by DE Shaw, the hedge fund, in the two years before he joined the administration.
The disclosures come during a complicated time for the relationship between the Obama administration and business, with officials accused of being too close to companies on the one hand and encountering increased criticism from business lobby groups on the other.
The US Chamber of Commerce yesterday launched its “campaign for free enterprise”, arguing the private sector was under threat from various over-reaching government plans, including for a Consumer Financial Protection Agency and a cap-and-trade scheme to reduce carbon emissions.

Dollar falls to 14-month low after Fed signals no rise in rates soon
Minutes show support for new asset purchases
By Krishna Guha in Washington
The dollar fell yesterday after minutes from the Federal Reserve’s last policy meeting showed that some committee members favoured increased purchases of assets such as mortgage-backed securities to speed recovery.
While the committee simply agreed to keep open the option of either expanding or reducing the purchases if the economic outlook changed, only one policymaker made the case for scaling back buying – leaving an overall doveish skew.
This tone was echoed in the discussion of inflation. Most Fed officials “anticipated that slack in both labour and product markets would be substantial over the next few years, leading to subdued and potentially declining wage and price inflation.”
They agreed that inflation expectations needed to be “carefully monitored” but indicated that they would seek to manage these expectations by building confidence in their exit strategy, rather than by raising rates preemptively.
With inflation fears muted and forecasts of protracted high unemployment, the minutes suggest that the Fed is still a long way from raising interest rates. This undermined the dollar, which fell to a 14-month low on a trade-weighted basis.
The minutes confirm that the US central bank is examining “reverse repurchase agreements on a large scale, potentially with counterparties other than the primary dealers” as a possible way to mop up excess liquidity when the time comes to tighten policy. The other counterparties envisaged prominently include money market mutual funds.
The minutes also show that the Fed viewed the decline in Treasury yields as “puzzling” given the improved economic outlook. Fed staff economists raised their forecast for the second half and projected that growth would strengthen further in 2010 and in 2011. They “forecast core inflation to slow somewhat further over the next two years from the pace of the first half of 2009.” They thought unemployment would be about 9.25 per cent at the end of 2010 and about 8 per cent at the end of 2011.
The minutes show that many Fed policymakers also raised their growth forecasts. But many still expected the recovery to be “quite restrained” – in part, because credit “remained difficult to obtain and costly”.
They also “expressed considerable uncertainty about the likely strength of the upturn” once government supports were withdrawn.


So lets put this all together for those who can't actually see the PONZI scheme. The big banks are making huge profits again and folks are getting their bonuses. But they are cutting back giving out credit, so the money is being made by trading. Even though this is happening, it is too early to tighten rates so the big banks would actually have to pay for the money from the discount window to buy assets. This of course allows for huge leverage of asset price purchases for nothing. Thus really only benefiting people who own lots of stocks. In fact even though they are making profits the fed is going to keep buying their toxic assets with your tax money. Meanwhile your dollar in your savings account has dropped to a 14 month low and you aren't getting any interest to make up for it.

Now we add to that a President who said certain things during his election that turned out to be complete lies. Instead he appoints the head of the NY fed, who lies and said he has never worked on wall street (yet working for the NY fed is the same as working for wall street). Well what would you expect he is a tax cheat. To avoid appear as the out right liars they are and to avoid senate confirmation issues he appoints counselors who have made their money on wall street. "Back door appointments".

Lastly with their unlimited financial power and inherent advantage due to lobby money the American chamber of commerce starts a propaganda campaign to ensure that any and all reform efforts that would actually help the majority of people don't get enacted. This way our liar of a president can claim he got the bills done and had to make concessions to the right, when his treasury has been bought and paid for all the time. See the great majority of what you see is theater for your consumption designed to prevent you from putting two and two together. All along the White house was going to give industry what they wanted (because they have been bought and paid for). Industry fights a campaign of extreme positions asking for much more than they want. Then the president can claim victory for the little guy when he is getting nothing.

You see folks, the whole system is designed against you. This isn't democracy. It is a fictional theater designed to make you ever poorer while the wealthy stay in power and get richer at your expense.

For those people who call the folks bringing their fire arms to meet their elected representatives "crazy", well they aren't they are the rational ones who see what is going on and are tired of it. Does anyone really have the balls to say that our government is a legitimate representative democracy. It isn't. ]]> http://seekingalpha.com/article/165663-when-will-deflation-turn-into-inflation-and-how-quickly?source=feed#comment-712216 712216 Sun, 11 Oct 2009 00:02:11 -0400 http://seekingalpha.com/article/165663-when-will-deflation-turn-into-inflation-and-how-quickly?source=feed#comment-712213 712213
Inflation never went away, just the price of increases has slown. I have asked at least 30 people lately about their personal experiences with inflation and not one has said they are going down. The governement has told us before we weren't having inflation when everyone knew it was there. Why should this be any different. Inflation serves the interest of the banksters and our government a bit too much for the to be honest it. Take a look at DBA. we lost 10 years of stock earnings and this dropped two years at most. That isn't real deflation after a historic run of inflation by any means. Talk to me when prices get back to where they were five years ago and I'l say we are having deflation. (only housing).

You can't have deflation in an ever dropping currency, and the dollar fundamantals says it is going to keep heading down for a long time on a long term basis. Just the same way it has been happening for the past decade or so. ]]> Sat, 10 Oct 2009 23:53:12 -0400
Inflation never went away, just the price of increases has slown. I have asked at least 30 people lately about their personal experiences with inflation and not one has said they are going down. The governement has told us before we weren't having inflation when everyone knew it was there. Why should this be any different. Inflation serves the interest of the banksters and our government a bit too much for the to be honest it. Take a look at DBA. we lost 10 years of stock earnings and this dropped two years at most. That isn't real deflation after a historic run of inflation by any means. Talk to me when prices get back to where they were five years ago and I'l say we are having deflation. (only housing).

You can't have deflation in an ever dropping currency, and the dollar fundamantals says it is going to keep heading down for a long time on a long term basis. Just the same way it has been happening for the past decade or so. ]]> http://seekingalpha.com/article/165026-is-there-really-a-global-cabal-aiming-to-dump-the-dollar?source=feed#comment-705931 705931
I hate to tell you this but australia raised interest rates, now lowered them.

the dollar bulls drive me crazy because all they do is cloud the game and prevent people from taking the the clear trade, which is agais the dollar. the dollar has been going down for years and years except in times of stress and when volker did something about it. Bernanke is going to ruin the dollar and try to drive in inflation to bail his wall street buddies out. It has been clear from day one this is his plan, because his actions make no other sense. If it is taking you this long to decide to get out of the dollr you are clearly behind the curve. as for the deflation assholes, tell me how you can have deflation in an ever dropping currency. Just look at the structural problems we have, and then look at the lies our government tells. Oh, our unemployement numbers were wrong by 800 plus K, oh, our inflation numbers are wrong. I have now asked 50 regular people if they see inflation or deflation all say inflation. Nothing is decreasing in price. You fools believe what you want. we are likely to have major problems in the future and I would advise a study of the french revolution, because everything we are going through has happen over and over again in the past 800 years (see new book by Rogoff). this isn't a topic for speculators, the history is already written, it is only the path we take to get there that is uncertain. Esp with the crooks we have in Fed, treasury, white house, and wall street there.


On Oct 06 02:00 PM Mad Hedge Fund Trader wrote:

> asg Of course you knew it was going to happen like this. After churning
> around just below the old high, and sucking in as many profit takers
> and short sellers as possible, gold blasted through to a new high
> for the year of $1,038. Never mind that the triggering event is complete
> balderdash, a story in Britain’s Independent newspaper asserting
> that the Middle East is holding secret global talks to price crude
> in the yellow metal or other currencies (click here for story at
> www.independent.co.uk/...
> ). It didn’t hurt that Australia cut its interest rates by 0.25%,
> the first G-20 country to do so. There probably isn’t enough gold
> in the world to finance more than a few weeks of global oil production.
> Total gold holdings would only fill two Olympic sized swimming pools.
> But never let the truth get in the way of a good trade. The confirming
> moves couldn’t be more ubiquitous, with the Canadian, New Zealand,
> and Australian dollars all up big, commodities strong, and silver
> also going ballistic. Regular readers will all recognize these as
> old friends of mine, core longs that I have been strongly recommending
> since the beginning of the year. I have been trying to get investors
> into gold since it was at $800. If you aren’t in gold by now, I can
> only tear my own clothes and flagellate myself for my abject failure
> to convince you of gold’s merits. US government debt is exploding,
> and with foreigners holding a large part of our paper, the only way
> to get out of this mess is to devalue the dollar. It’s like Obama
> invited China’s president Hu Jintao to dinner at an expensive Upper
> East Side restaurant, and was suddenly called away by a crisis, leaving
> him with a big fat bill. Next stop $1,200, then $1,500, then the
> old inflation adjusted high of $2,400. If you want me to help you
> get set up to trade futures in any of this stuff, please email me
> at madhedgefundtrader@yah... If you want to know where to buy physical
> gold and silver in size with the tightest spreads over spot, check
> with the experts at www.millenniummetals.net]]> Tue, 06 Oct 2009 18:39:39 -0400
I hate to tell you this but australia raised interest rates, now lowered them.

the dollar bulls drive me crazy because all they do is cloud the game and prevent people from taking the the clear trade, which is agais the dollar. the dollar has been going down for years and years except in times of stress and when volker did something about it. Bernanke is going to ruin the dollar and try to drive in inflation to bail his wall street buddies out. It has been clear from day one this is his plan, because his actions make no other sense. If it is taking you this long to decide to get out of the dollr you are clearly behind the curve. as for the deflation assholes, tell me how you can have deflation in an ever dropping currency. Just look at the structural problems we have, and then look at the lies our government tells. Oh, our unemployement numbers were wrong by 800 plus K, oh, our inflation numbers are wrong. I have now asked 50 regular people if they see inflation or deflation all say inflation. Nothing is decreasing in price. You fools believe what you want. we are likely to have major problems in the future and I would advise a study of the french revolution, because everything we are going through has happen over and over again in the past 800 years (see new book by Rogoff). this isn't a topic for speculators, the history is already written, it is only the path we take to get there that is uncertain. Esp with the crooks we have in Fed, treasury, white house, and wall street there.


On Oct 06 02:00 PM Mad Hedge Fund Trader wrote:

> asg Of course you knew it was going to happen like this. After churning
> around just below the old high, and sucking in as many profit takers
> and short sellers as possible, gold blasted through to a new high
> for the year of $1,038. Never mind that the triggering event is complete
> balderdash, a story in Britain’s Independent newspaper asserting
> that the Middle East is holding secret global talks to price crude
> in the yellow metal or other currencies (click here for story at
> www.independent.co.uk/...
> ). It didn’t hurt that Australia cut its interest rates by 0.25%,
> the first G-20 country to do so. There probably isn’t enough gold
> in the world to finance more than a few weeks of global oil production.
> Total gold holdings would only fill two Olympic sized swimming pools.
> But never let the truth get in the way of a good trade. The confirming
> moves couldn’t be more ubiquitous, with the Canadian, New Zealand,
> and Australian dollars all up big, commodities strong, and silver
> also going ballistic. Regular readers will all recognize these as
> old friends of mine, core longs that I have been strongly recommending
> since the beginning of the year. I have been trying to get investors
> into gold since it was at $800. If you aren’t in gold by now, I can
> only tear my own clothes and flagellate myself for my abject failure
> to convince you of gold’s merits. US government debt is exploding,
> and with foreigners holding a large part of our paper, the only way
> to get out of this mess is to devalue the dollar. It’s like Obama
> invited China’s president Hu Jintao to dinner at an expensive Upper
> East Side restaurant, and was suddenly called away by a crisis, leaving
> him with a big fat bill. Next stop $1,200, then $1,500, then the
> old inflation adjusted high of $2,400. If you want me to help you
> get set up to trade futures in any of this stuff, please email me
> at madhedgefundtrader@yah... If you want to know where to buy physical
> gold and silver in size with the tightest spreads over spot, check
> with the experts at www.millenniummetals.net]]> http://seekingalpha.com/article/165026-is-there-really-a-global-cabal-aiming-to-dump-the-dollar?source=feed#comment-705919 705919

On Oct 06 02:00 PM Mad Hedge Fund Trader wrote:

> asg Of course you knew it was going to happen like this. After churning
> around just below the old high, and sucking in as many profit takers
> and short sellers as possible, gold blasted through to a new high
> for the year of $1,038. Never mind that the triggering event is complete
> balderdash, a story in Britain’s Independent newspaper asserting
> that the Middle East is holding secret global talks to price crude
> in the yellow metal or other currencies (click here for story at
> www.independent.co.uk/...
> ). It didn’t hurt that Australia cut its interest rates by 0.25%,
> the first G-20 country to do so. There probably isn’t enough gold
> in the world to finance more than a few weeks of global oil production.
> Total gold holdings would only fill two Olympic sized swimming pools.
> But never let the truth get in the way of a good trade. The confirming
> moves couldn’t be more ubiquitous, with the Canadian, New Zealand,
> and Australian dollars all up big, commodities strong, and silver
> also going ballistic. Regular readers will all recognize these as
> old friends of mine, core longs that I have been strongly recommending
> since the beginning of the year. I have been trying to get investors
> into gold since it was at $800. If you aren’t in gold by now, I can
> only tear my own clothes and flagellate myself for my abject failure
> to convince you of gold’s merits. US government debt is exploding,
> and with foreigners holding a large part of our paper, the only way
> to get out of this mess is to devalue the dollar. It’s like Obama
> invited China’s president Hu Jintao to dinner at an expensive Upper
> East Side restaurant, and was suddenly called away by a crisis, leaving
> him with a big fat bill. Next stop $1,200, then $1,500, then the
> old inflation adjusted high of $2,400. If you want me to help you
> get set up to trade futures in any of this stuff, please email me
> at madhedgefundtrader@yah... If you want to know where to buy physical
> gold and silver in size with the tightest spreads over spot, check
> with the experts at www.millenniummetals.net]]> Tue, 06 Oct 2009 18:28:04 -0400

On Oct 06 02:00 PM Mad Hedge Fund Trader wrote:

> asg Of course you knew it was going to happen like this. After churning
> around just below the old high, and sucking in as many profit takers
> and short sellers as possible, gold blasted through to a new high
> for the year of $1,038. Never mind that the triggering event is complete
> balderdash, a story in Britain’s Independent newspaper asserting
> that the Middle East is holding secret global talks to price crude
> in the yellow metal or other currencies (click here for story at
> www.independent.co.uk/...
> ). It didn’t hurt that Australia cut its interest rates by 0.25%,
> the first G-20 country to do so. There probably isn’t enough gold
> in the world to finance more than a few weeks of global oil production.
> Total gold holdings would only fill two Olympic sized swimming pools.
> But never let the truth get in the way of a good trade. The confirming
> moves couldn’t be more ubiquitous, with the Canadian, New Zealand,
> and Australian dollars all up big, commodities strong, and silver
> also going ballistic. Regular readers will all recognize these as
> old friends of mine, core longs that I have been strongly recommending
> since the beginning of the year. I have been trying to get investors
> into gold since it was at $800. If you aren’t in gold by now, I can
> only tear my own clothes and flagellate myself for my abject failure
> to convince you of gold’s merits. US government debt is exploding,
> and with foreigners holding a large part of our paper, the only way
> to get out of this mess is to devalue the dollar. It’s like Obama
> invited China’s president Hu Jintao to dinner at an expensive Upper
> East Side restaurant, and was suddenly called away by a crisis, leaving
> him with a big fat bill. Next stop $1,200, then $1,500, then the
> old inflation adjusted high of $2,400. If you want me to help you
> get set up to trade futures in any of this stuff, please email me
> at madhedgefundtrader@yah... If you want to know where to buy physical
> gold and silver in size with the tightest spreads over spot, check
> with the experts at www.millenniummetals.net]]> http://seekingalpha.com/article/161440-today-in-commodities-will-ppi-and-cpi-tell-the-truth-about-inflation?source=feed#comment-676647 676647

On Sep 14 06:35 PM dcb wrote:

> I'm doing th oppposite of what you adise. only time will tell. ag
> (dba) is at ling term support and there are drought in india mexio.
> plus MACD is turning pos, and rsi indicates a buy signal.]]> Mon, 14 Sep 2009 18:37:23 -0400

On Sep 14 06:35 PM dcb wrote:

> I'm doing th oppposite of what you adise. only time will tell. ag
> (dba) is at ling term support and there are drought in india mexio.
> plus MACD is turning pos, and rsi indicates a buy signal.]]> http://seekingalpha.com/article/161440-today-in-commodities-will-ppi-and-cpi-tell-the-truth-about-inflation?source=feed#comment-676645 676645 Mon, 14 Sep 2009 18:35:07 -0400 http://seekingalpha.com/article/161011-rough-times-ahead-for-natural-gas?source=feed#comment-673192 673192 Sat, 12 Sep 2009 05:36:05 -0400 http://seekingalpha.com/article/160548-why-is-congress-agnostic-about-natural-gas?source=feed#comment-671256 671256

On Sep 09 04:25 PM doubleguns wrote:

> If we use our own gas instead of imported oil I would be happy. TOO
> MUCH MONEY LEAVES THIS COUNTY EVERY DAY ON OIL.
>
> Spend it here even if the price gets on par with oil it is money
> spent at home. Electric cars will off set some demand and this wont
> happen overnight. Yes nuke would be a great addition but this administration
> has their head in a dark moist hole between their butt cheeks and
> they have no intention of fixing the problem]]> Thu, 10 Sep 2009 20:39:45 -0400

On Sep 09 04:25 PM doubleguns wrote:

> If we use our own gas instead of imported oil I would be happy. TOO
> MUCH MONEY LEAVES THIS COUNTY EVERY DAY ON OIL.
>
> Spend it here even if the price gets on par with oil it is money
> spent at home. Electric cars will off set some demand and this wont
> happen overnight. Yes nuke would be a great addition but this administration
> has their head in a dark moist hole between their butt cheeks and
> they have no intention of fixing the problem]]> http://seekingalpha.com/article/160619-the-coming-consequences-of-banking-fraud?source=feed#comment-671247 671247
On Sep 09 11:40 AM Mrudula Shah wrote:

> The author vents his frustrations as if he is a pro-China anti-Western
> individual, going as far as chraging the likes of Tony Blair and
> Gordon Brown as pupets of banking ologarchs - an exageration of the
> opposite kind!!]]> Thu, 10 Sep 2009 20:12:28 -0400
On Sep 09 11:40 AM Mrudula Shah wrote:

> The author vents his frustrations as if he is a pro-China anti-Western
> individual, going as far as chraging the likes of Tony Blair and
> Gordon Brown as pupets of banking ologarchs - an exageration of the
> opposite kind!!]]> http://seekingalpha.com/article/160619-the-coming-consequences-of-banking-fraud?source=feed#comment-671236 671236

On Sep 10 07:42 AM Roger Knights wrote:

> "the US government, US Federal Reserve, Wall Street, the US Treasury,
> and the Exchange Stabilization Fund have all engaged in domestic
> and international financial and monetary transactions that have been
> kept secret from the world, and that will have severe and negative
> consequences in the not so distant future."
>
> It sounds as though the author has got wind of a Big Secret that
> he can't spell out because he can't back it up by outing his source.
> It's just occurred to me what this might be. (I first read it in
> a comment here on Seeking Alpha about three weeks ago, and I've posted
> it myself a couple of times here as a possibility.) Namely, that
> Asian central banks have secretly been offered the chance to buy
> Treasuries at a discount. This would explain what's otherwise inexplicable
> to me: why there is still strong demand for them.
>
> It's already been revealed that the Fed is engaged in a shell game
> with Agency bonds held by foreigners, buying them from them on the
> QT in exchange for their buying Treasuries. But this is mostly a
> PR gesture, and not something substantive that would shake the foundations
> if it came out. Without low interest rates in the US, real estate
> would collapse, followed by the banking system, followed by trade,
> followed by the government.
>
> Of course, I have no evidence that this trickery is occurring. But
> maybe a financial reporter would start asking his sources if they
> think such a thing might be happening. Given that necessity knows
> no law, it's a possibility.]]> Thu, 10 Sep 2009 19:57:50 -0400

On Sep 10 07:42 AM Roger Knights wrote:

> "the US government, US Federal Reserve, Wall Street, the US Treasury,
> and the Exchange Stabilization Fund have all engaged in domestic
> and international financial and monetary transactions that have been
> kept secret from the world, and that will have severe and negative
> consequences in the not so distant future."
>
> It sounds as though the author has got wind of a Big Secret that
> he can't spell out because he can't back it up by outing his source.
> It's just occurred to me what this might be. (I first read it in
> a comment here on Seeking Alpha about three weeks ago, and I've posted
> it myself a couple of times here as a possibility.) Namely, that
> Asian central banks have secretly been offered the chance to buy
> Treasuries at a discount. This would explain what's otherwise inexplicable
> to me: why there is still strong demand for them.
>
> It's already been revealed that the Fed is engaged in a shell game
> with Agency bonds held by foreigners, buying them from them on the
> QT in exchange for their buying Treasuries. But this is mostly a
> PR gesture, and not something substantive that would shake the foundations
> if it came out. Without low interest rates in the US, real estate
> would collapse, followed by the banking system, followed by trade,
> followed by the government.
>
> Of course, I have no evidence that this trickery is occurring. But
> maybe a financial reporter would start asking his sources if they
> think such a thing might be happening. Given that necessity knows
> no law, it's a possibility.]]> http://seekingalpha.com/article/160619-the-coming-consequences-of-banking-fraud?source=feed#comment-671232 671232
The political leaders and oligarchs are shielded from harm if things collapse. So while the collase concersn them the only ral threat they face is civil unrest. Just look at how the heads of the banking insdustry made out. very few if any in jail, unlimited money via the fed to reflate assets, no effort to curb crazy bonus schemes. The folks in office that hold any position of standing know they will be given a cushy job by indistry when finished office, so they are shielded. Come on. just think about the role the fed and treasury played in ensuring AIG and Merrill got their bonuses. and goldman getting 100 cents on the dollar from AIG instead of having to take a haircut. If thise three things don't at least make you say something strange is going on here I don't know what will. Geiter, head of the NY FED before the crash, who didn't have banks do anything (raise capital, etc). How can this guy be treasury secretary. From what he did, and the outcome that happened it defies common sense. Hence he got the job because he gives the indistry what it wants and doesn't get in their way. Summers made it so derivates didn't need to have capital held against them (swaps, not insurance). So he played a huge role in this mess. How the hell did he get the job. he did have a 5mil/year hedge fund job for one day a week of work amd made millions inspeaking fees to wall street. He's safe and has been bought a paid for already. He also knows what rewards him if he plays ball. the list goes on and on and on. Just too many things don't add up any other way. What is Greensapn making now as a consultatant from the industry?

I have studies this crisis for over two years now. Mr. Kims conclusions were not the ones I first had. I startedto think about a cabal when i saw economic policies that made no sense to me, and when the very people who had a huge hand in the crisis we appointed to positions of power by Obama. The you have to start to add in the revolving door between the fed, treasury, and wall street. How about the "greatest" student of the great depression that doesn't understand the role of overleveraging in causing the crisis. how about the fact that we have hed 6 credit crisis since the 60's. but never lean from our mistakes. Then you have to start deciding who makes out from the leverage. thise that make money via leverage who have seen their incomes skyrocket, and the working man whose income depends on nominal GDP. His income has fallen.

I'm afraid the facts add up to exaclty what Mr. KIm says. You can believe it or not and that is your choice. I have a group of about 20 well educated readers who I think all now believe as myself and Mr. Kim do. I convinced them via shoving such an overhwelming amount of evidence at them there was no other choice. I can happily send you easily 200 legit articles that would lead to the same conclusion.

I am an American and jewish and in no way shape or form do I take Mr. Kims comments to be either anti american or jewish.

May I add that contrary to popular belief many folks saw this down the pipleine. those in power choose to ignore it. Why? because those in the oligarchy benefit to keep it running, and those with the power to keep in running are richly rewarded for doing so.




On Sep 09 12:28 PM Mrudula Shah wrote:

> It's equally stupid to think that the western democratic system and
> the political leaders and all major bank executives are out to get
> the ordinary citizens and drag the economy down!! Tell me how these
> oligarchs and political leaders benefit if the economy collapses!!
> No body, including each one of them, benefits!! I Do not think these
> guys are that stupid and are taking some stupid steps!! Stupid are
> those who believe those who say the world is about to collapse!!
> Also, I am not saying Mr. Kim is a Chinese - I am just saying he
> expresses Pro-China anti-Western thoughts!! It's clear to me that
> with Americans cutting down heavily on their consumption habits and
> moving towards more savings (because theyt may be concerned with
> their social security and medicare syastems health), the Chinese,
> Japanese and Korean economiies are hurting!!]]> Thu, 10 Sep 2009 19:50:29 -0400
The political leaders and oligarchs are shielded from harm if things collapse. So while the collase concersn them the only ral threat they face is civil unrest. Just look at how the heads of the banking insdustry made out. very few if any in jail, unlimited money via the fed to reflate assets, no effort to curb crazy bonus schemes. The folks in office that hold any position of standing know they will be given a cushy job by indistry when finished office, so they are shielded. Come on. just think about the role the fed and treasury played in ensuring AIG and Merrill got their bonuses. and goldman getting 100 cents on the dollar from AIG instead of having to take a haircut. If thise three things don't at least make you say something strange is going on here I don't know what will. Geiter, head of the NY FED before the crash, who didn't have banks do anything (raise capital, etc). How can this guy be treasury secretary. From what he did, and the outcome that happened it defies common sense. Hence he got the job because he gives the indistry what it wants and doesn't get in their way. Summers made it so derivates didn't need to have capital held against them (swaps, not insurance). So he played a huge role in this mess. How the hell did he get the job. he did have a 5mil/year hedge fund job for one day a week of work amd made millions inspeaking fees to wall street. He's safe and has been bought a paid for already. He also knows what rewards him if he plays ball. the list goes on and on and on. Just too many things don't add up any other way. What is Greensapn making now as a consultatant from the industry?

I have studies this crisis for over two years now. Mr. Kims conclusions were not the ones I first had. I startedto think about a cabal when i saw economic policies that made no sense to me, and when the very people who had a huge hand in the crisis we appointed to positions of power by Obama. The you have to start to add in the revolving door between the fed, treasury, and wall street. How about the "greatest" student of the great depression that doesn't understand the role of overleveraging in causing the crisis. how about the fact that we have hed 6 credit crisis since the 60's. but never lean from our mistakes. Then you have to start deciding who makes out from the leverage. thise that make money via leverage who have seen their incomes skyrocket, and the working man whose income depends on nominal GDP. His income has fallen.

I'm afraid the facts add up to exaclty what Mr. KIm says. You can believe it or not and that is your choice. I have a group of about 20 well educated readers who I think all now believe as myself and Mr. Kim do. I convinced them via shoving such an overhwelming amount of evidence at them there was no other choice. I can happily send you easily 200 legit articles that would lead to the same conclusion.

I am an American and jewish and in no way shape or form do I take Mr. Kims comments to be either anti american or jewish.

May I add that contrary to popular belief many folks saw this down the pipleine. those in power choose to ignore it. Why? because those in the oligarchy benefit to keep it running, and those with the power to keep in running are richly rewarded for doing so.




On Sep 09 12:28 PM Mrudula Shah wrote:

> It's equally stupid to think that the western democratic system and
> the political leaders and all major bank executives are out to get
> the ordinary citizens and drag the economy down!! Tell me how these
> oligarchs and political leaders benefit if the economy collapses!!
> No body, including each one of them, benefits!! I Do not think these
> guys are that stupid and are taking some stupid steps!! Stupid are
> those who believe those who say the world is about to collapse!!
> Also, I am not saying Mr. Kim is a Chinese - I am just saying he
> expresses Pro-China anti-Western thoughts!! It's clear to me that
> with Americans cutting down heavily on their consumption habits and
> moving towards more savings (because theyt may be concerned with
> their social security and medicare syastems health), the Chinese,
> Japanese and Korean economiies are hurting!!]]> http://seekingalpha.com/article/160817-the-deficit-rally?source=feed#comment-670521 670521
I will also point out that in an economy that is 70% consumer based, decreasing the spending power of that 70% does not help. the straw that broke the camels back for this crisis ws bernake's decision to ct rates. this caused an oil surge, killed the spending power of the consumer and ensured he couldn't pay that mortgage. by killing the spending power he made the recession worse.

I will also point out that german has a strong euro, and a great exporting economy. The problem in the US has less to do with currrency than policies which destroy savings and hence money for capital investment. We also have had administrations which have gutted industrial policy in favor of banks and their profits. The trick is adding value to the products you have, not exporpting your high value tech to other countries. Policies have been short sighted, and currency manipulation is just and easy way to avoid making difficult decisions.


On Sep 10 08:58 AM chap08 wrote:

> "Is a declining dollar good for the long term? Of course not"
>
> Yes it is! The dollar has been held artificially high for too long.
> This results in trade deficits, unemployment and deflation. It also
> encourages budget deficits as a result of foreign governments looking
> to keep their funds in dollars. This drop in the dollar is good -
> but not enough. We need a sustained devaluation (ideally gradual)
> which rebalances the global economy.]]> Thu, 10 Sep 2009 12:37:11 -0400
I will also point out that in an economy that is 70% consumer based, decreasing the spending power of that 70% does not help. the straw that broke the camels back for this crisis ws bernake's decision to ct rates. this caused an oil surge, killed the spending power of the consumer and ensured he couldn't pay that mortgage. by killing the spending power he made the recession worse.

I will also point out that german has a strong euro, and a great exporting economy. The problem in the US has less to do with currrency than policies which destroy savings and hence money for capital investment. We also have had administrations which have gutted industrial policy in favor of banks and their profits. The trick is adding value to the products you have, not exporpting your high value tech to other countries. Policies have been short sighted, and currency manipulation is just and easy way to avoid making difficult decisions.


On Sep 10 08:58 AM chap08 wrote:

> "Is a declining dollar good for the long term? Of course not"
>
> Yes it is! The dollar has been held artificially high for too long.
> This results in trade deficits, unemployment and deflation. It also
> encourages budget deficits as a result of foreign governments looking
> to keep their funds in dollars. This drop in the dollar is good -
> but not enough. We need a sustained devaluation (ideally gradual)
> which rebalances the global economy.]]> http://seekingalpha.com/article/160269-a-radical-solution-for-america-s-insolvent-financial-system?source=feed#comment-665235 665235 Mon, 07 Sep 2009 12:33:19 -0400 http://seekingalpha.com/article/160269-a-radical-solution-for-america-s-insolvent-financial-system?source=feed#comment-665233 665233 I have come to the conclusion that only violence will solve the entenched problems we face. We got rid of the British for less than what our own government is doing to us. ]]> Mon, 07 Sep 2009 12:29:38 -0400 I have come to the conclusion that only violence will solve the entenched problems we face. We got rid of the British for less than what our own government is doing to us. ]]> http://seekingalpha.com/article/160276-low-u-s-manufacturing-investment-eventual-dollar-collapse?source=feed#comment-665223 665223 Mon, 07 Sep 2009 12:25:27 -0400 http://seekingalpha.com/article/159554-volatility-indices-risk-appetite-and-where-we-might-be-headed?source=feed#comment-657893 657893 Wed, 02 Sep 2009 08:07:40 -0400 http://seekingalpha.com/article/159222-due-for-a-correction-market-is-already-priced-for-grim-future?source=feed#comment-657176 657176 Tue, 01 Sep 2009 16:49:39 -0400 http://seekingalpha.com/article/156348-market-outlook-we-are-at-an-important-inflection-point?source=feed#comment-632437 632437 a $2.7 trillion move in equities was accompanied by a less than $400 billion reduction in Money Market accounts!

Where, may we ask, did the balance of $2.3 trillion in purchasing power come from? Why the Federal Reserve of course, which directly and indirectly subsidized U.S. banks (and foreign ones through liquidity swaps) for roughly that amount. Apparently these banks promptly went on a buying spree to raise the all important equity market]]> Sun, 16 Aug 2009 20:39:37 -0400 a $2.7 trillion move in equities was accompanied by a less than $400 billion reduction in Money Market accounts!

Where, may we ask, did the balance of $2.3 trillion in purchasing power come from? Why the Federal Reserve of course, which directly and indirectly subsidized U.S. banks (and foreign ones through liquidity swaps) for roughly that amount. Apparently these banks promptly went on a buying spree to raise the all important equity market]]> http://seekingalpha.com/article/156361-armageddon-part-two-securitization-is-too-big-to-fail?source=feed#comment-632405 632405 NYT
Fair Game
GRETCHEN MORGENSON
Published: August 15, 2009
WITH outsized and corrupting corporate pay packages under scrutiny, you might think that companies would be rushing to tamp down their compensation plans. Making sure that pay actually rewards long-term performance, for example, seems a fairly obvious way to allay shareholder fears that managers are lining their pockets rather than safeguarding their companies.

Skip to next paragraph
Related
Times Topics: Gretchen Morgenson | Executive PayBut a study of changes made in pay practices by 191 of the nation’s largest companies this year shows that where pay is concerned, enlightenment remains a long way off. In other words, meet the new pay, same as the old.

The study was conducted by James F. Reda & Associates, an independent compensation consultant in New York, and it looked at proxy filings issued by almost 200 companies in the first half of 2009. The firm analyzed changes these companies made to their pay plans that take effect this year.

The biggest shock? Instead of seeing a greater reliance on long-term incentive programs, the Reda report found that changes in these companies’ plans made short-term incentive pay a bigger part of the compensation pie. Let me say that again: The plans — despite the calamities that short-term profiteering has visited on our economy — made short-term incentives a bigger component of compensation.

Last Friday, troubled financial companies relying on the taxpayers’ dime had to deliver details of their top executives’ compensation packages to Kenneth Feinberg, the government’s so-called pay czar. It will be interesting to see whether Mr. Feinberg finds the same short-term incentive skew in those pay packages that Mr. Reda did in his study.

“If you were going to encourage long-term thinking and behavior, you would reduce short-term pay, but companies have in fact reduced the long-term programs,” Mr. Reda said. “This is counter to the direction suggested by the United States Treasury, academics and other expert advisers regarding ways to mitigate risk.”

Another troubling finding in the Reda study was an increased use of restricted stock awards that are not performance-based. The awards simply vest over time.

Finally, the study found no significant decline in the use of so-called tax gross-up deals, a shareholder-unfriendly arrangement under which companies foot the bill on taxes that executives owe on their munificent pay packages.

Changes to pay practices were common this year: about 70 percent of the analyzed companies disclosed making some shift, Mr. Reda said. Almost 60 percent of the analyzed companies made what he considered to be major changes to their pay plans. But the nature of those changes surprised him.

“I was expecting that a lot of companies would be changing the payouts from cash to stock and then restricting the stock for three to five years,” he said. “Or paying out half of the bonus in cash and half in stock that must be held for three years. Those would be helpful changes, but I didn’t see any of that.”

Several pay policy changes showed some sensitivity to shareholder concerns about excessive compensation. For example, 43 percent of the companies making changes to their pay said they had eliminated merit increases, while 15 percent said they had reduced retirement benefits or eliminated tax gross-up payments on perquisites like insurance policies or use of jets. Some 13 percent said they froze or reduced base salaries and 4 percent reduced the benefits that would accrue to a chief executive if the company he or she oversaw changed hands.

Here is another plus: Some companies tightened up performance measures that must be met before incentive pay is dispensed. For example, 10 companies that changed their short-term incentive pay structures added profit or cash-flow requirements to performance pay hurdles. And in long-term performance programs, several companies added capital efficiency measures to their benchmarks. These included return on equity and return on invested capital.

BUT the overall message from the study, Mr. Reda said, is that in executive payland, real change comes exceedingly slowly. And pay for performance remains more mantra than practice.

Mr. Reda said he suspected that the increased reliance on short-term incentive pay that he found was a result of the precipitous declines in many of these companies’ share prices. Indeed, he found that the greater the drop in a company’s stock price, the more likely that its pay program was changed.

There were a variety of changes made to incentive pay that wound up skewing companies’ total packages toward short-term performance. First were the adjustments made to long-term incentive grants, like decreasing the value of awards or dispensing the same number of shares regardless of a decline in their value.

The end result was a greater reliance over all on short-term incentive pay. And that invites riskier behavior among executives, Mr. Reda said.
“Corporate America needs to deflate their compensation packages
because with higher leverage comes higher risk,”

With more than 20 years of executive pay analysis under his belt, Mr. Reda can offer a historical perspective on how the mix of compensation has changed over the years. In his view, leverage in compensation — where incentive pay far outweighs salary — has ballooned. And the opportunity for executives to tap into that leverage has vastly increased the risk in pay plans.


Comparing today’s common practices with those of his early days in the business is revealing, he said.

“When I first got in this business in 1987, a typical C.E.O. would have a short-term incentive opportunity of 60 percent of salary, and for the long-term, a good one would get two times salary,” Mr. Reda said. “If you do the math, the salary was equal to about 30 percent of the total compensation package. Today, it’s about 10 percent. So over the last 20 years or so the leverage of these compensation packages has increased dramatically.”

Compare these figures with those paid out in 2008. The typical short-term incentive pay for a chief executive was 200 percent of salary, while long-term incentives accounted for eight times salary.

“In both cases the incentive pay more than tripled,” Mr. Reda said. “Have people changed that much in 20 years that you need to throw these huge outsized incentive bonuses at them to get them to work?”

Come hell, high water, financial crisis or stock market collapse, the executive pay grab goes on. Clearly, if shareholders thought the economic downturn would result in more sensible pay packages, they’ve got another think coming.


The Federal Reserve Is Immoral 49 comments
by: Tim Iacono August 13, 2009
>
During the first few days of each month comes a task that is increasingly approached with dread around here and, unfortunately, that condition is likely to persist for some time.

Shortly after banks make their month-end update to various short-term savings accounts that we hold, these balances are queried, only to find that, almost without exception, interest credited is less than it was in prior months and far less than it was eight or ten months ago.

Why?

Largely as a result of the Federal Reserve keeping short-term interest rates pegged to zero.

You see, aside from some Certificates of Deposit that were locked up late last year which, today, provide the strangest of locked up late last year which, today, provide the strangest of feelings during a very strange period in history (i.e., feeling lucky to get about 2.5 percent interest for a one-year CD), it's nearly impossible to get more than a two percent return these days on any kind of an FDIC-insured account and, more likely than not, you'll get less than one percent.

Speaking as one who knows from experience, there's a big difference between one or two percent and five or six percent, what used to be the "minimum" rate of return for a super-safe savings account backed by the government.

More importantly, if this is causing us angst every month, I can only imagine what it's doing to the budgets of other savers whose finances are far less comfortable than ours.

Put simply, the freakishly low short-term interest rates that the Federal Reserve is jamming down everyone's throat are immoral and, maybe, just maybe, a lot more people are beginning to see this, along with other practices of our central bank that are just not right.

Maybe, just maybe, something will finally be done about reforming (or, as suggested by Rep. Ron Paul, abolishing) this banking cartel - hopefully before the Fed celebrates its 100-year anniversary in a few years.
Just to be clear on the terminology here, Merriam-Webster offers the following:


immoral
adjective
not moral; broadly : conflicting with generally or traditionally held moral principles

moral
adjective
1a: of or relating to principles of right and wrong in behavior

Setting aside questions about the dark veil of secrecy surrounding who and how much the central bank has been helping with their problem loans, problem assets, and problems staying solvent, there are at least three ways that the organization David Wessel calls "the fourth branch of government" is acting badly these days - by punishing savers, by enriching the banks, and by fleecing the poor.

Of course, none of this is really new - it all just seems a whole lot more relevant today than ever before given the current state of affairs in this country and around the world.
Punish the Savers

As noted above, it used to be that you could always count on getting five or six percent interest in a "no-risk" savings account backed by the FDIC. In fact, going all the way back to 1955 (when the interest rate data at the Fed's website stops), the average short-term lending rate is right between those two marks - 5.66 percent.

Ever since I was a teenager, I can remember thinking, "If I could somehow amass a million dollars, that would surely generate enough money to live on for the rest of my life".

Well, welcome to the 21st century, where the asset bubbles keep a-poppin' and the interest rates keep a-droppin'.

Over most of the last hundred years, aside from the dollar losing more than 90 percent power (versus a loss of zero during the prior ten decades), there hasn't been too much to complain about in the Fed's management of money and interest rates but, since asset bubbles and the attendant "mopping up" process have become a way of life, the rate of return on savings has been abysmal.

With the exception of the "baby-steps" rate raising campaign a few years ago, the Fed funds rate has been below two percent since 2002 - after the decade's first asset bubble met its pin.

Now, if there was a good reason for keeping rates so low, this might all make some sense to senior citizens who have looked disappointingly at their bank statements for years, but given the fact that the low-rates in 2002-2004 led to the housing and credit bubbles forming and then bursting a few years later, and here we are with even lower rates today, all of this should make anyone with half a brain realize that there is something seriously wrong with the system as it currently operates.

In a nation in dire need of internal savings, the fact that savers are being punished as never before is just plain wrong - immoral - and the idea that we live in an era of "low inflation" is just salt rubbed in the wounds of senior citizens who, year after year, watch prices for health care and energy rise by some multiple of the one or two percent they can earn on their savings.

Twenty years from now (perhaps sooner), they'll look back on today's monetary policy and say to themselves, "What were they thinking, punishing the savers like that when the U.S. desperately needed savings?"

Enrich the Banks

As if it weren't bad enough that savers are cheated every time the Federal Reserve lowers interest rates, the worst part is that banks are the beneficiaries.

You see, in addition to buying up many of the bad assets previously held on banks' books over the last year or so - the result of waves of imprudent bank lending - when the Fed lowers interest rates it helps to make the business of banking much more profitable and, conventional wisdom has it that our finance-based economy will then begin to recover.

And when the banks can borrow at these super-low rates, that means that savers can't earn much more in interest.

Banks come first and savers are far down on the list.

Why does the system work this way?

Well, most people haven't got a clue what the Federal Reserve is or what it does (though, understandably, there is growing interest in this topic, ever since the wheels fell off of the global economy last fall), but the crucial bit of information that the now-slightly-more-curious public should learn quickly is that the central bank was not set up to help the people or the government, but, rather, to help the big banks.

In fact, according to G. Edward Griffin, who happened to write a whole book on the subject, the very reason that the Federal Reserve was formed back in 1913 was so that big banks could wrest back control of the banking system from the many small, fledgling, independent banks all around the country that were taking away their business.

Look around you today. You might see lots of little banks failing, but only a few large ones ever go under and none of the country's biggest banks ever fail.

The Fed was created by the big banks, for the big banks, and its unwritten "mission statement" is to do whatever it takes to ensure the survival and profitability of those big banks, getting the government to step in with public money when necessary for "the greater good", effectively socializing the losses while keeping the gains in private hands.

That's why what we have today - a wholly unsustainable system of ever-expanding credit and debt dominated by a handful of "too big to fail" banks - keeps getting propped up.

The masses are led to believe that credit is the "lifeblood of the economy" when, in fact, credit is the lifeblood of a banking system that has, over time, sucked the life out of the economy.

It's hard to imagine anything that is more immoral than the Federal Reserve's role in this process, now almost a hundred years in the making.

Fleece the Poor

In arriving at the third and final way that the Federal Reserve is immoral, clearly, that last thought in the previous section was premature.

In fact, there is one very good example of something being done today by the central bank that is even more immoral than a nearly century long wealth transfer from the public sector to the private banking system - the ongoing assistance being provided by the Fed in helping the banking system reach out and find new customers so that every possible dollar can be extracted from them.

You see, the country's big banks (along with the central bank that serves their interests) would much prefer that poor people all across the country not go to a place like you see to the right and, for a small fee, convert their paycheck into cash and forever live within their means.

Bankers would much rather see the nation's poor open up checking accounts and then venture further into the world of modern day banking, quickly learning to spend well beyond their means.

Left unsaid in the Fed's many efforts to reach out to the "unbanked" is that checking accounts are a sort of "gateway drug" for many people - a road to debt serfdom where, in addition to paying interest on money borrowed to buy stuff that they don't need, these "newly banked" poor will also be fleeced by a bewildering array of fees and charges in a system that is set up to systematically suck as much money out of as many people as possible.

Over the years, the Federal Reserve has made great efforts to attract new customers for banks, in some cases providing cartoon characters to make the whole idea of debt serfdom seem like a friendly sort of condition, much in the same way that Joe Camel once attracted new smokers.

Under the guise of "education" and with "consumer protection" as its goal, the Federal Reserve might seem to be "looking out for the little guy", but they're not. They've had the power to do this for many years now but, for obvious reasons, have exercised their "power to protect" the consumer only sparingly, allowing millions of subprime borrowers to give the housing bubble one last giant hurrah before it finally burst.

Fortunately, it appears that the Obama administration would like to see the American consumers' interests watched over by some other group and for good reason. A report earlier in the week in the Financial Times detailed how big banks in the U.S. plan to extract almost $40 billion in overdraft fees from American consumers whose balance sheets haven't been bolstered by government bailouts.

It seems that, with the collapse of the mortgage finance bubble, big banks are now reverting to a profit model that is driven more by extracting fees from their customers wherever possible and overdraft fees from the cash-strapped are "the mother lode".

A full 90 percent of overdraft fees come from just 10 percent of all checking accounts and most of this 10 percent have low credit scores and/or are recent entrants to the world of mainstream banking.

Not surprisingly, the highest overdraft fees come from the biggest banks - Citigroup, Bank of America, JP Morgan Chase, Wells Fargo, SunTrust, and Citizens Bank.

For banks, overdraft fees are a low risk, high profit part of their business, not something that is usually mentioned as part of the Fed's outreach programs. It is a sophisticated, large scale sort of "payday loan" system that many Americans fall prey to and, as long as customers have their payroll checks automatically deposited, the bank will always have first crack at the money and people will continue to spend more than they make because, when you get down to the very basics here, most people aren't very good at math.

But, banks are.

Maybe Ron Paul is right - the Fed should be abolished.

Then markets could set interest rates, banks would have to fend for themselves, and there would be one less group helping to extract what little money the poor have left.


With more than 20 years of executive pay analysis under his belt, Mr. Reda can offer a historical perspective on how the mix of compensation has changed over the years. In his view, leverage in compensation — where incentive pay far outweighs salary — has ballooned. And the opportunity for executives to tap into that leverage has vastly increased the risk in pay plans.

“Corporate America needs to deflate their compensation packages because with higher leverage comes higher risk,” Mr. Reda said.

Comparing today’s common practices with those of his early days in the business is revealing, he said.

“When I first got in this business in 1987, a typical C.E.O. would have a short-term incentive opportunity of 60 percent of salary, and for the long-term, a good one would get two times salary,” Mr. Reda said. “If you do the math, the salary was equal to about 30 percent of the total compensation package. Today, it’s about 10 percent. So over the last 20 years or so the leverage of these compensation packages has increased dramatically.”

Compare these figures with those paid out in 2008. The typical short-term incentive pay for a chief executive was 200 percent of salary, while long-term incentives accounted for eight times salary.

“In both cases the incentive pay more than tripled,” Mr. Reda said. “Have people changed that much in 20 years that you need to throw these huge outsized incentive bonuses at them to get them to work?”

Come hell, high water, financial crisis or stock market collapse, the executive pay grab goes on. Clearly, if shareholders thought the economic downturn would result in more sensible pay packages, they’ve got another think coming.


so take all three together. debt risisng faster than niminal GDP does nothing, but there are people who make killing psuing too much debt, and too mcuh debt is unstable. so don't believe the author that we need to have all this debt shoved up or ass to fix things. that's the last thing in the world americans who don't work on wall street need!! maybe we won't be able to get a new car every three years, but we won't loose 1/2 or stock market value so often and the wealth you have accumulated will be safe. Now you are at risk fro dollar collapse and another bubble bursting. the solution is less debt, bit more. if there is no leverage on wall street there are no margin calls and no fire sale of assets as prices fall. it is only when we have no leverage can we see the real price of the object we are buying!!!
>]]> Sun, 16 Aug 2009 19:56:05 -0400 NYT
Fair Game
GRETCHEN MORGENSON
Published: August 15, 2009
WITH outsized and corrupting corporate pay packages under scrutiny, you might think that companies would be rushing to tamp down their compensation plans. Making sure that pay actually rewards long-term performance, for example, seems a fairly obvious way to allay shareholder fears that managers are lining their pockets rather than safeguarding their companies.

Skip to next paragraph
Related
Times Topics: Gretchen Morgenson | Executive PayBut a study of changes made in pay practices by 191 of the nation’s largest companies this year shows that where pay is concerned, enlightenment remains a long way off. In other words, meet the new pay, same as the old.

The study was conducted by James F. Reda & Associates, an independent compensation consultant in New York, and it looked at proxy filings issued by almost 200 companies in the first half of 2009. The firm analyzed changes these companies made to their pay plans that take effect this year.

The biggest shock? Instead of seeing a greater reliance on long-term incentive programs, the Reda report found that changes in these companies’ plans made short-term incentive pay a bigger part of the compensation pie. Let me say that again: The plans — despite the calamities that short-term profiteering has visited on our economy — made short-term incentives a bigger component of compensation.

Last Friday, troubled financial companies relying on the taxpayers’ dime had to deliver details of their top executives’ compensation packages to Kenneth Feinberg, the government’s so-called pay czar. It will be interesting to see whether Mr. Feinberg finds the same short-term incentive skew in those pay packages that Mr. Reda did in his study.

“If you were going to encourage long-term thinking and behavior, you would reduce short-term pay, but companies have in fact reduced the long-term programs,” Mr. Reda said. “This is counter to the direction suggested by the United States Treasury, academics and other expert advisers regarding ways to mitigate risk.”

Another troubling finding in the Reda study was an increased use of restricted stock awards that are not performance-based. The awards simply vest over time.

Finally, the study found no significant decline in the use of so-called tax gross-up deals, a shareholder-unfriendly arrangement under which companies foot the bill on taxes that executives owe on their munificent pay packages.

Changes to pay practices were common this year: about 70 percent of the analyzed companies disclosed making some shift, Mr. Reda said. Almost 60 percent of the analyzed companies made what he considered to be major changes to their pay plans. But the nature of those changes surprised him.

“I was expecting that a lot of companies would be changing the payouts from cash to stock and then restricting the stock for three to five years,” he said. “Or paying out half of the bonus in cash and half in stock that must be held for three years. Those would be helpful changes, but I didn’t see any of that.”

Several pay policy changes showed some sensitivity to shareholder concerns about excessive compensation. For example, 43 percent of the companies making changes to their pay said they had eliminated merit increases, while 15 percent said they had reduced retirement benefits or eliminated tax gross-up payments on perquisites like insurance policies or use of jets. Some 13 percent said they froze or reduced base salaries and 4 percent reduced the benefits that would accrue to a chief executive if the company he or she oversaw changed hands.

Here is another plus: Some companies tightened up performance measures that must be met before incentive pay is dispensed. For example, 10 companies that changed their short-term incentive pay structures added profit or cash-flow requirements to performance pay hurdles. And in long-term performance programs, several companies added capital efficiency measures to their benchmarks. These included return on equity and return on invested capital.

BUT the overall message from the study, Mr. Reda said, is that in executive payland, real change comes exceedingly slowly. And pay for performance remains more mantra than practice.

Mr. Reda said he suspected that the increased reliance on short-term incentive pay that he found was a result of the precipitous declines in many of these companies’ share prices. Indeed, he found that the greater the drop in a company’s stock price, the more likely that its pay program was changed.

There were a variety of changes made to incentive pay that wound up skewing companies’ total packages toward short-term performance. First were the adjustments made to long-term incentive grants, like decreasing the value of awards or dispensing the same number of shares regardless of a decline in their value.

The end result was a greater reliance over all on short-term incentive pay. And that invites riskier behavior among executives, Mr. Reda said.
“Corporate America needs to deflate their compensation packages
because with higher leverage comes higher risk,”

With more than 20 years of executive pay analysis under his belt, Mr. Reda can offer a historical perspective on how the mix of compensation has changed over the years. In his view, leverage in compensation — where incentive pay far outweighs salary — has ballooned. And the opportunity for executives to tap into that leverage has vastly increased the risk in pay plans.


Comparing today’s common practices with those of his early days in the business is revealing, he said.

“When I first got in this business in 1987, a typical C.E.O. would have a short-term incentive opportunity of 60 percent of salary, and for the long-term, a good one would get two times salary,” Mr. Reda said. “If you do the math, the salary was equal to about 30 percent of the total compensation package. Today, it’s about 10 percent. So over the last 20 years or so the leverage of these compensation packages has increased dramatically.”

Compare these figures with those paid out in 2008. The typical short-term incentive pay for a chief executive was 200 percent of salary, while long-term incentives accounted for eight times salary.

“In both cases the incentive pay more than tripled,” Mr. Reda said. “Have people changed that much in 20 years that you need to throw these huge outsized incentive bonuses at them to get them to work?”

Come hell, high water, financial crisis or stock market collapse, the executive pay grab goes on. Clearly, if shareholders thought the economic downturn would result in more sensible pay packages, they’ve got another think coming.


The Federal Reserve Is Immoral 49 comments
by: Tim Iacono August 13, 2009
>
During the first few days of each month comes a task that is increasingly approached with dread around here and, unfortunately, that condition is likely to persist for some time.

Shortly after banks make their month-end update to various short-term savings accounts that we hold, these balances are queried, only to find that, almost without exception, interest credited is less than it was in prior months and far less than it was eight or ten months ago.

Why?

Largely as a result of the Federal Reserve keeping short-term interest rates pegged to zero.

You see, aside from some Certificates of Deposit that were locked up late last year which, today, provide the strangest of locked up late last year which, today, provide the strangest of feelings during a very strange period in history (i.e., feeling lucky to get about 2.5 percent interest for a one-year CD), it's nearly impossible to get more than a two percent return these days on any kind of an FDIC-insured account and, more likely than not, you'll get less than one percent.

Speaking as one who knows from experience, there's a big difference between one or two percent and five or six percent, what used to be the "minimum" rate of return for a super-safe savings account backed by the government.

More importantly, if this is causing us angst every month, I can only imagine what it's doing to the budgets of other savers whose finances are far less comfortable than ours.

Put simply, the freakishly low short-term interest rates that the Federal Reserve is jamming down everyone's throat are immoral and, maybe, just maybe, a lot more people are beginning to see this, along with other practices of our central bank that are just not right.

Maybe, just maybe, something will finally be done about reforming (or, as suggested by Rep. Ron Paul, abolishing) this banking cartel - hopefully before the Fed celebrates its 100-year anniversary in a few years.
Just to be clear on the terminology here, Merriam-Webster offers the following:


immoral
adjective
not moral; broadly : conflicting with generally or traditionally held moral principles

moral
adjective
1a: of or relating to principles of right and wrong in behavior

Setting aside questions about the dark veil of secrecy surrounding who and how much the central bank has been helping with their problem loans, problem assets, and problems staying solvent, there are at least three ways that the organization David Wessel calls "the fourth branch of government" is acting badly these days - by punishing savers, by enriching the banks, and by fleecing the poor.

Of course, none of this is really new - it all just seems a whole lot more relevant today than ever before given the current state of affairs in this country and around the world.
Punish the Savers

As noted above, it used to be that you could always count on getting five or six percent interest in a "no-risk" savings account backed by the FDIC. In fact, going all the way back to 1955 (when the interest rate data at the Fed's website stops), the average short-term lending rate is right between those two marks - 5.66 percent.

Ever since I was a teenager, I can remember thinking, "If I could somehow amass a million dollars, that would surely generate enough money to live on for the rest of my life".

Well, welcome to the 21st century, where the asset bubbles keep a-poppin' and the interest rates keep a-droppin'.

Over most of the last hundred years, aside from the dollar losing more than 90 percent power (versus a loss of zero during the prior ten decades), there hasn't been too much to complain about in the Fed's management of money and interest rates but, since asset bubbles and the attendant "mopping up" process have become a way of life, the rate of return on savings has been abysmal.

With the exception of the "baby-steps" rate raising campaign a few years ago, the Fed funds rate has been below two percent since 2002 - after the decade's first asset bubble met its pin.

Now, if there was a good reason for keeping rates so low, this might all make some sense to senior citizens who have looked disappointingly at their bank statements for years, but given the fact that the low-rates in 2002-2004 led to the housing and credit bubbles forming and then bursting a few years later, and here we are with even lower rates today, all of this should make anyone with half a brain realize that there is something seriously wrong with the system as it currently operates.

In a nation in dire need of internal savings, the fact that savers are being punished as never before is just plain wrong - immoral - and the idea that we live in an era of "low inflation" is just salt rubbed in the wounds of senior citizens who, year after year, watch prices for health care and energy rise by some multiple of the one or two percent they can earn on their savings.

Twenty years from now (perhaps sooner), they'll look back on today's monetary policy and say to themselves, "What were they thinking, punishing the savers like that when the U.S. desperately needed savings?"

Enrich the Banks

As if it weren't bad enough that savers are cheated every time the Federal Reserve lowers interest rates, the worst part is that banks are the beneficiaries.

You see, in addition to buying up many of the bad assets previously held on banks' books over the last year or so - the result of waves of imprudent bank lending - when the Fed lowers interest rates it helps to make the business of banking much more profitable and, conventional wisdom has it that our finance-based economy will then begin to recover.

And when the banks can borrow at these super-low rates, that means that savers can't earn much more in interest.

Banks come first and savers are far down on the list.

Why does the system work this way?

Well, most people haven't got a clue what the Federal Reserve is or what it does (though, understandably, there is growing interest in this topic, ever since the wheels fell off of the global economy last fall), but the crucial bit of information that the now-slightly-more-curious public should learn quickly is that the central bank was not set up to help the people or the government, but, rather, to help the big banks.

In fact, according to G. Edward Griffin, who happened to write a whole book on the subject, the very reason that the Federal Reserve was formed back in 1913 was so that big banks could wrest back control of the banking system from the many small, fledgling, independent banks all around the country that were taking away their business.

Look around you today. You might see lots of little banks failing, but only a few large ones ever go under and none of the country's biggest banks ever fail.

The Fed was created by the big banks, for the big banks, and its unwritten "mission statement" is to do whatever it takes to ensure the survival and profitability of those big banks, getting the government to step in with public money when necessary for "the greater good", effectively socializing the losses while keeping the gains in private hands.

That's why what we have today - a wholly unsustainable system of ever-expanding credit and debt dominated by a handful of "too big to fail" banks - keeps getting propped up.

The masses are led to believe that credit is the "lifeblood of the economy" when, in fact, credit is the lifeblood of a banking system that has, over time, sucked the life out of the economy.

It's hard to imagine anything that is more immoral than the Federal Reserve's role in this process, now almost a hundred years in the making.

Fleece the Poor

In arriving at the third and final way that the Federal Reserve is immoral, clearly, that last thought in the previous section was premature.

In fact, there is one very good example of something being done today by the central bank that is even more immoral than a nearly century long wealth transfer from the public sector to the private banking system - the ongoing assistance being provided by the Fed in helping the banking system reach out and find new customers so that every possible dollar can be extracted from them.

You see, the country's big banks (along with the central bank that serves their interests) would much prefer that poor people all across the country not go to a place like you see to the right and, for a small fee, convert their paycheck into cash and forever live within their means.

Bankers would much rather see the nation's poor open up checking accounts and then venture further into the world of modern day banking, quickly learning to spend well beyond their means.

Left unsaid in the Fed's many efforts to reach out to the "unbanked" is that checking accounts are a sort of "gateway drug" for many people - a road to debt serfdom where, in addition to paying interest on money borrowed to buy stuff that they don't need, these "newly banked" poor will also be fleeced by a bewildering array of fees and charges in a system that is set up to systematically suck as much money out of as many people as possible.

Over the years, the Federal Reserve has made great efforts to attract new customers for banks, in some cases providing cartoon characters to make the whole idea of debt serfdom seem like a friendly sort of condition, much in the same way that Joe Camel once attracted new smokers.

Under the guise of "education" and with "consumer protection" as its goal, the Federal Reserve might seem to be "looking out for the little guy", but they're not. They've had the power to do this for many years now but, for obvious reasons, have exercised their "power to protect" the consumer only sparingly, allowing millions of subprime borrowers to give the housing bubble one last giant hurrah before it finally burst.

Fortunately, it appears that the Obama administration would like to see the American consumers' interests watched over by some other group and for good reason. A report earlier in the week in the Financial Times detailed how big banks in the U.S. plan to extract almost $40 billion in overdraft fees from American consumers whose balance sheets haven't been bolstered by government bailouts.

It seems that, with the collapse of the mortgage finance bubble, big banks are now reverting to a profit model that is driven more by extracting fees from their customers wherever possible and overdraft fees from the cash-strapped are "the mother lode".

A full 90 percent of overdraft fees come from just 10 percent of all checking accounts and most of this 10 percent have low credit scores and/or are recent entrants to the world of mainstream banking.

Not surprisingly, the highest overdraft fees come from the biggest banks - Citigroup, Bank of America, JP Morgan Chase, Wells Fargo, SunTrust, and Citizens Bank.

For banks, overdraft fees are a low risk, high profit part of their business, not something that is usually mentioned as part of the Fed's outreach programs. It is a sophisticated, large scale sort of "payday loan" system that many Americans fall prey to and, as long as customers have their payroll checks automatically deposited, the bank will always have first crack at the money and people will continue to spend more than they make because, when you get down to the very basics here, most people aren't very good at math.

But, banks are.

Maybe Ron Paul is right - the Fed should be abolished.

Then markets could set interest rates, banks would have to fend for themselves, and there would be one less group helping to extract what little money the poor have left.


With more than 20 years of executive pay analysis under his belt, Mr. Reda can offer a historical perspective on how the mix of compensation has changed over the years. In his view, leverage in compensation — where incentive pay far outweighs salary — has ballooned. And the opportunity for executives to tap into that leverage has vastly increased the risk in pay plans.

“Corporate America needs to deflate their compensation packages because with higher leverage comes higher risk,” Mr. Reda said.

Comparing today’s common practices with those of his early days in the business is revealing, he said.

“When I first got in this business in 1987, a typical C.E.O. would have a short-term incentive opportunity of 60 percent of salary, and for the long-term, a good one would get two times salary,” Mr. Reda said. “If you do the math, the salary was equal to about 30 percent of the total compensation package. Today, it’s about 10 percent. So over the last 20 years or so the leverage of these compensation packages has increased dramatically.”

Compare these figures with those paid out in 2008. The typical short-term incentive pay for a chief executive was 200 percent of salary, while long-term incentives accounted for eight times salary.

“In both cases the incentive pay more than tripled,” Mr. Reda said. “Have people changed that much in 20 years that you need to throw these huge outsized incentive bonuses at them to get them to work?”

Come hell, high water, financial crisis or stock market collapse, the executive pay grab goes on. Clearly, if shareholders thought the economic downturn would result in more sensible pay packages, they’ve got another think coming.


so take all three together. debt risisng faster than niminal GDP does nothing, but there are people who make killing psuing too much debt, and too mcuh debt is unstable. so don't believe the author that we need to have all this debt shoved up or ass to fix things. that's the last thing in the world americans who don't work on wall street need!! maybe we won't be able to get a new car every three years, but we won't loose 1/2 or stock market value so often and the wealth you have accumulated will be safe. Now you are at risk fro dollar collapse and another bubble bursting. the solution is less debt, bit more. if there is no leverage on wall street there are no margin calls and no fire sale of assets as prices fall. it is only when we have no leverage can we see the real price of the object we are buying!!!
>]]> http://seekingalpha.com/article/156361-armageddon-part-two-securitization-is-too-big-to-fail?source=feed#comment-632383 632383 Dear Sir,
> Miss Tett has written extensively about the credit
> crisis
> but once more fails to elucidate salient points
> regarding
> the issue of securitisation.
>
> She correctly points out that research from Pimco
> states
> that "Until the 1980's
> the expansion of nominal gross
> domestic product tracked the volume of outstanding
> private
> credit closely. But since then credit has
> dramatically
> outstripped economic growth as securitisation took
> hold".
> Meaning credit growth beyond nominal growth rate does
> not
> lead to economic growth.
>
> According to Prof. Aswath Damadaran (NYU Stern), one
> of
> the
> foremost experts of valuation today, the most
> significant
> input into a discounted cash flow model is the stable
> growth
> rate. This growth rate can be sustained in perpetuity
> allowing us to estimate the value of all the cash
> flows.
> No
> firm can grow forever at a rate higher that the
> growth
> rate
> of the economy. So, the value all things can't
> grow faster
> than the economy (Damaodaran, Investment valuation,
> Chapter
> 12, 2002)
>
> Therefore, at a certain point the growth of credit
> must
> become unstable when it
> is rises faster that the rate of
> growth in the economy. This is essentially the nature
> of
> our
> financial crisis. Valuations based on the growth of
> credit
> (leverage) were not able to be supported by the
> nominal
> growth rate of the economy.
>
> There are additional features to our economy that
> have
> happened since securitisation has taken off. The
> stock
> market has grown faster than the economy, CEO pay has
> gone
> from 30X to 300X of the average American worker, real
> wages
> have fallen, and wealth disparity has reached heights
> not
> seen since the great depression. All of these issues
> are
> in
> fact related.
>
> Securitisation has allowed those whose pay is based
> upon
> leverage (credit)to increase many times faster than
> the
> growth of the real economy and the vast majority of
> workers.
> Securitisation has allowed the experts on credit risk
> and
> valuation (bankers) to
> off load these risks onto the
> public.
> This has created instability (highly distorted
> valuations)and a moral hazard where society bears the
> brunt
> of costs, while bankers and CEOs reap the benefits.
>
> When Ms. Tett reports that respected figures such as
> William Dudley of the NY Fed consider it paramount
> that
> securitisation markets get jump started if we are to
> recover
> she fails to mention that Mr. Dudley, as a former
> managing
> director of Goldman Sachs, and the majority of people
> who
> are calling for this to happen are the very people
> who
> have
> benefited the most from securitisatiion.
>
> I hope the American people will wake up and see that
> efforts to jump start securitisation are nothing more
> than
> an attempt by those who caused the crisis to restart
> the
> system that allowed them to reap the rewards and off
> load
> the risks of that system onto others.
>
>
> With these facts in mind one must wonder what the
> point of
> the Feds easy credit (money)policy are. Are they
> benefiting
> society? Not very much. Are the benefiting wall street
> and
> the banking class? Well, Goldman Sachs profits answer
> that
> along with a stock market that does not reflect
> economic
> realities.
>
> It also answers the inflation issue. Growth in money
> supply
> faster than the ability of society to use it (nominal
> growth
> rate) has to result in inflation or asset price
> bubbles.
>

the authorshould knw that the stock market has risen about 2.5 trilllion since the lows. buy what a coincidence!!!! LOL that's there the money is from and where it has gone. we have bought their shit and they have put it in the market. that's your rally, fed induced!!

the authos is not correct about inlfationary impacts. there trillion fro the banks to play with have been thrown into thing like commodities and oil. so oil rises when storage tanks are full and tankers are being used as storage off shore. this increases inflation.

Additionally the rise of the markets has reduced safe haven demand for dollar driving hem down and this is inflationary. all the debt may lead to dollr collapse (like argentina) and that would be inflationary. having the money get to the real economy is not required for inflation. You don't need economic activity to have inflation. inflation happens when money supply rises faser than it can be put to good use. think post WW! german, zimbawae (sp). nobody says zim has any economic activity, but they sure have inflation. Look at the inflation in Iceland from currency fall. There are just too many examples of hw inflation can happen aside from classic macro views. asset price bubbles are a from of inflation of a particular asset too. ]]> Sun, 16 Aug 2009 19:31:50 -0400 Dear Sir,
> Miss Tett has written extensively about the credit
> crisis
> but once more fails to elucidate salient points
> regarding
> the issue of securitisation.
>
> She correctly points out that research from Pimco
> states
> that "Until the 1980's
> the expansion of nominal gross
> domestic product tracked the volume of outstanding
> private
> credit closely. But since then credit has
> dramatically
> outstripped economic growth as securitisation took
> hold".
> Meaning credit growth beyond nominal growth rate does
> not
> lead to economic growth.
>
> According to Prof. Aswath Damadaran (NYU Stern), one
> of
> the
> foremost experts of valuation today, the most
> significant
> input into a discounted cash flow model is the stable
> growth
> rate. This growth rate can be sustained in perpetuity
> allowing us to estimate the value of all the cash
> flows.
> No
> firm can grow forever at a rate higher that the
> growth
> rate
> of the economy. So, the value all things can't
> grow faster
> than the economy (Damaodaran, Investment valuation,
> Chapter
> 12, 2002)
>
> Therefore, at a certain point the growth of credit
> must
> become unstable when it
> is rises faster that the rate of
> growth in the economy. This is essentially the nature
> of
> our
> financial crisis. Valuations based on the growth of
> credit
> (leverage) were not able to be supported by the
> nominal
> growth rate of the economy.
>
> There are additional features to our economy that
> have
> happened since securitisation has taken off. The
> stock
> market has grown faster than the economy, CEO pay has
> gone
> from 30X to 300X of the average American worker, real
> wages
> have fallen, and wealth disparity has reached heights
> not
> seen since the great depression. All of these issues
> are
> in
> fact related.
>
> Securitisation has allowed those whose pay is based
> upon
> leverage (credit)to increase many times faster than
> the
> growth of the real economy and the vast majority of
> workers.
> Securitisation has allowed the experts on credit risk
> and
> valuation (bankers) to
> off load these risks onto the
> public.
> This has created instability (highly distorted
> valuations)and a moral hazard where society bears the
> brunt
> of costs, while bankers and CEOs reap the benefits.
>
> When Ms. Tett reports that respected figures such as
> William Dudley of the NY Fed consider it paramount
> that
> securitisation markets get jump started if we are to
> recover
> she fails to mention that Mr. Dudley, as a former
> managing
> director of Goldman Sachs, and the majority of people
> who
> are calling for this to happen are the very people
> who
> have
> benefited the most from securitisatiion.
>
> I hope the American people will wake up and see that
> efforts to jump start securitisation are nothing more
> than
> an attempt by those who caused the crisis to restart
> the
> system that allowed them to reap the rewards and off
> load
> the risks of that system onto others.
>
>
> With these facts in mind one must wonder what the
> point of
> the Feds easy credit (money)policy are. Are they
> benefiting
> society? Not very much. Are the benefiting wall street
> and
> the banking class? Well, Goldman Sachs profits answer
> that
> along with a stock market that does not reflect
> economic
> realities.
>
> It also answers the inflation issue. Growth in money
> supply
> faster than the ability of society to use it (nominal
> growth
> rate) has to result in inflation or asset price
> bubbles.
>

the authorshould knw that the stock market has risen about 2.5 trilllion since the lows. buy what a coincidence!!!! LOL that's there the money is from and where it has gone. we have bought their shit and they have put it in the market. that's your rally, fed induced!!

the authos is not correct about inlfationary impacts. there trillion fro the banks to play with have been thrown into thing like commodities and oil. so oil rises when storage tanks are full and tankers are being used as storage off shore. this increases inflation.

Additionally the rise of the markets has reduced safe haven demand for dollar driving hem down and this is inflationary. all the debt may lead to dollr collapse (like argentina) and that would be inflationary. having the money get to the real economy is not required for inflation. You don't need economic activity to have inflation. inflation happens when money supply rises faser than it can be put to good use. think post WW! german, zimbawae (sp). nobody says zim has any economic activity, but they sure have inflation. Look at the inflation in Iceland from currency fall. There are just too many examples of hw inflation can happen aside from classic macro views. asset price bubbles are a from of inflation of a particular asset too. ]]> http://seekingalpha.com/article/156348-market-outlook-we-are-at-an-important-inflection-point?source=feed#comment-632374 632374 Sun, 16 Aug 2009 19:13:25 -0400