kmarkt2

Question for the Fed: Where Has All the Money Gone?

What is the difference between the drug lords of the Medillin Cartel and the Finance Lords of Wall Street ?
Answer: the former is prosecuted as a criminal, the latter hailed as a saviour, a talent to be consulted at the corridoors of Capitol Hill, notwithstanding the pantomine of appearing at Congressional Hearings, when summoned - a class act, without repurcussion personal or corporate.
Similariies between these Lords - they both peddle toxic assets, the latter, in doses that sucked out the blood from +5 million unemployed and wealth skewed and families destroyed; the former, in doses on a 10ml syringe - both equally deadly with little chance of making good.
Such is the simple reality without the need to understand the maths of complex derivatives - if a new index, such as misery index could be underwritten and traded, I would like to be at the front doing the short selling. I hope the FED can give me a $B for my innovative instrument.


On Oct 01 11:11 AM ctjaeger wrote:

> "With the government putting all of the money into tradeable assets
> and not into the real economy, we end up with a market that could
> go down in flames at any moment."
>
> The government has been buying many of the "tradeable assets" from
> banks. Look at excess reserve levels in relation to WSBASE, they
> correlate pretty well. So the money is at the interim point in getting
> to the "real economy". Once (or if) banks start lending again, those
> dollars will enter the productive economy. If lending is not resurrected
> - by looser credit policy and/or an uptick in demand - the money
> will start flooding the "real economy".
>
> The fact that consumers are saving more, spending in a more conservative
> manner, and deleveraging means that it will be a while before consumer
> demand reaches anything like the unsustainable levels we've seen
> over the past 10 - 15 years.
>
> So, the issue isn't necessarily what the Fed is buying, it is what
> is happening with the money that the sellers are receiving.

Are Banks Being Naughty Again with Derivatives? Could Be Good

The world would not come to an end, only the capitalistic fuedal lords of Wall Street, the City of London and the USD.
Mankind has the inert ability to self preserve, even in world wars. As such, it would be in US interest to start decapitating the Wall Street Lords that formulated and peddled these toxic derivatives as a sacrifice for the larger community. There is nothing perverse nor sacrosant about this singular action on these Lords of Finance, in order to save the US from an infinitely extended demise. There are a lot more good people in the US that deserves a better fate.


On Sep 30 12:55 AM Albertarocks wrote:

> On Sep 29 10:45 PM kmarkt2 wrote:

Are Banks Being Naughty Again with Derivatives? Could Be Good

Anthony,

Are you trying to tell us all, that JP Morgan, BoA and the master of all, Goldman Sachs, has been digitizing $$$$ $$ into the economies of the World through generating derivatives - working on the warp speed of digitized multipliers ? If there is only $$ in the money supply worldwide, then who is lending to the buyers of these derivatives - US Treasury , Chinese ?
Of course, they have every incentive to generate these multipliers when they take fees and commission on a buy and sell trade, with absolutely no risk. SO what, if the holders of these derivatives default - who is at risk ?Lets shake this deck of cards !


On Sep 29 06:17 AM Anthony Harrison wrote:

> A staggering figure of 107 bank collapses since Lehman’s failure
> speaks volumes of the problems confronting the US financial system.
> With close to 90 of these collapses occurring in less than 9 months,
> are we up for more to come? Are there some big banks lined up as
> well?
> I’m convinced there are. Further, I am confident that some of our
> large money center banks are technically borderline insolvent, at
> least on an economic basis.….
> Forensic research conducted by our team of research analysts at Reggie
> Middleton LLC (boombustblog.com) has unearthed some very interesting
> findings.
> Let’s start with the misunderstood, and even more underestimated
> (in terms of systemic risk) US financial derivative landscape, whose
> notional value held by US commercial banks is a staggering $202 trillion
> (14 times the US GDP). Surprisingly, the top 5 commercial banks account
> for almost 96% of this highly concentrated pool of securities. High
> concentration risk and excessive leverage built into the system mean
> that even the slightest impetus as a trigger the markets could set
> off systematic collapse. Yes, even today, after Bear Stearns, Countrywide,
> Lehman Brothers, AIG and Washington Mutual. The risk is not only
> still here, but it is more concentrated (read as “more dangerous”)
> than ever.
> Take JP Morgan as a prime example. This highly respected and highly
> rated financial giant holds nearly $80 trillion in derivatives (notional
> value), ahead of Bank of America’s $75 trillion and Goldman Sachs’
> $48 trillion. This notional value of JPMs derivatives is nearly 39
> times its total assets, 850 times its tangible equity and six times
> the US GDP.
> And here’s more:
> - In terms of gross market exposures, JPM’s gross derivatives receivables
> stood at $1.8 trillion as of 2Q09 (19x times its tangible equity)
> and its gross derivative payables stood at $1.7 trillion (18 times
> its tangible equity).
> - Of the net derivative receivables exposure of $97 billion, non-investment
> grade derivatives stood at 22.9%, enough to wipe off 23.6% of the
> bank’s tangible equity in the event asset prices moved significantly
> south. This is an exposure a large bank can’t afford to assume under
> the current and volatile market conditions.
> - In addition, the quality of JPM’s derivative exposure is even worse
> than Bear Stearns’ and Lehman’s derivative portfolio just prior to
> their fall. We all know what happened to Bear Stearns and Lehman
> Brothers, don’t we???
>
> There are other large hurdles that JPM faces which, under normal
> circumstances (without excessive government support), could very
> well spell doom for a bank. . Here’s the link to the public excerpt
> of our proprietary research that throws light on JPM’s unconsolidated
> off balance sheet VIEs, its deteriorating loan exposure, skyrocketing
> charge-offs, compressing net interest margins, volatile trading revenues,
> rising VaR and many other insights: boombustblog.com/index...;task=doc_download&...

Outlandish CEO Pay: How to Fix the Problem

Easy - if you want money back; start criminal proceedings. Make a deal with your local district attonery - 10% for every $ recover. Good thing, tax payer already paid for court fees; the villian CEOs would have to cough up their $ for court time, plus $$ for attorneys.
The more $ recovered, the more $ budget for enforcement at every level of the game.
This action do not need a new Bill of Passage through Capitol Hill, its existing - hence, quick and cost effective. So , who is sleeping on this switch ?

Interview with Goldman Sachs on Financial Markets

This interview with GS has no value. I am perplex with basehitz's commentary - its entirely out of point to the content of the 7 questions, but however, I share his views about GS.
The institutions of Wall Street, Capitol Hill, the Fed, WH Administration are so copulated, that any attempt to have policies that serve the commoners are lost. Another Gettysburg is required - People v/s Wall Street; a seige of Wall Street to be raise and then a reverse takeover to follow - bring the game to Masters of the Universe - they are the best, but this time, make them the targets. The People ought not to have any respect to the rules of game as laid out by Wall Street; they did not have that respect for the People when the few of Wall Street oligarchs, like cockroaches, came to raid your coffers. Stop intellectualising on the need for retaining talent on Wall Street - its has nothing to do with talent but all to do with copulation with capital C!

Is Deflation Winning the Economic War?

Is deflation a terrible state of affairs ? If it is, the converse must hold true - why have inflated assets through cheap money ?Why allow inflation to go unchecked in the first place?
The main culprit are the investment bankers - that's where the TARP money is parked, for the sole purpose of - to make a killing with over-inflated valuations in the M&A deals that they are about to peddle. It does not matter, if they are not lending to main street, side streets, town halls, Joe, Mary, Tom, Jane -these are not worth the value, as collective subsets. Through M&A deals, the flow of money is concentrated - highly efficient return for little to no real value of work inputs. Wealth remains undistributed, or if distributed, slow and negligible.
To have the need for Administration and Congress to mark out a $3 billion clunker program out of the TARP fund, when it could have simply put the cash into the pockets of the individuals when they turn-in their cluckers for scrap (and if they do not buy a new car, so much the better - mitigates against global warming, brings the price of gasoline down ); inflation is subdued.
The role of banks to ease credit, no, they are only interested in settling their default credit swaps between themselves - i.e again, the broader economy receives no benefits, booking false writedowns to rewrite profits into the books, where is this threat of deflation going to head towards ?Supply of money does not reach to where deflation is possible. The bankers want inflation - its the inflated fees !

Stimulus Is Working, If You Count $621,000 Jobs

Mr Mulligan, misses the main purpose when TARP was originally conceptualised by Hank Paulson in the final moments of the Bush Administration. President Obama, has no other option to surrender to Wall Street with a $787 B bailout. Of course, he made a grave mistake - he left the details to Tim Geithner, a Wall Street insider.
Well, we know the kind of leverage that the Goldman Sachs, JP Morgan, re-incarnated Merrill Lynch ], Citi and the other Hedge Funds of Wall Street has in manipulating markets- they need the TARP money to produce magical profits for their bonuses.
So, its completely off the mark, when the calculations as exposed by Mr.Mulligan, allude to creating a shadow value of $621000 per job saved, creating a shadow value in 2009 Q2 GDP to the tune of $20.3 billion with $100 billion factor of production, call debt.
The real computation must come from where in the world did the $trillion of wealth that was supposedly destroyed, go to ? Surely, it has to have gotten somewhere and I suggest, NY Attorney Cuomo should be let loose like a hungry vampire !

What's Changing: Market's Status, Key Factors

What would the econometric model be, without the investment bankers propping up this lame bull ?

What would this economy be, when we decouple Wall Street from Main Street ?

It's the business of the investment banking community et.el with the entire supporting cast of analysts, traders et.el to work the numbers - the whole financial tsunami was just one bad dream !

Earnings Are Imaginary

A well argued article with many equally fair minded comments. However, all these alternative comments fail to make its impact on the real people that matters - those at Congress and the man on the street.
Wall Street have retaken the counter attack initiative the moment Jamie Dimon went on to acquiese on the anger flashed at Wall Street by Congress. With losses recouped through the continued and sustained campaign to talk the market up, Wall Street hit home runs in the last 5 months.
The US is running an international Casino business model and this model necessiates that the best are employed as croupiers, dealers, mathematicians to calculate and permutate how many other ways to rip off the customers, develope strategies to exert influence on other countries to continue buying bonds with no real prospects of a profitable exit.....until recently China flexes its ambition with the YUAN.
For this Wall Street party to come to a stop, the many good and sensible commentaries must get through to the millions of ordinary folks; staying with Seeking Alpha will bring about nothing. The millions of ordinary folks must be mobilise to organise a mass rejection of the Wall Street Business and Culture and bring those crooks to accountability and responsibility. If you want to compare dictatorship, look no further than Wall Street - its actually dictating the terms of who lives/who dies through sheer robbery of political influence from the control of other people's money.

Bears on the Decline

Its not about what we see or what we drink - kool aid and all; its about when the conspirators at Wall Street are going to suck us all dry!
We all know the fundamentals cannot support a 50% rise from March lows but these conspirators have such an infusion of TARP money that they willfully recover most of everything in 4 months of upping the bets with your money - and now they got some of us back in, they are chosing a time and place to clean out the pantry - its a bear raid! Shanghai is a good start - cause there is such a hugh amount of stupid Chinese money stuck in the US waiting to be recycled through - let the Chinese investors repay their money in the US with more of their money through Shanghai as the Yuan gets "limited" tradable status through selected US institutions.

Bulls Push Through Bears' Lines of Defense

Every movement leads to the super duo Goldman Sachs and JP Morgan. Forget all these meaningless analysts' prognosis - they are sourced and informed/misinformed according to the flavour of the day at the duo's trading desks.
Of course, fundamentals dictate that this rally is TARP steriods and like all steriods, they are suppose to perk performance. There must be residual wealth out there that needs to come back to the markets so that the next quarter, Goldman Morgan can report sterling profits and hey, its Christmas round the corner - big bucks payouts! The only stop between these payouts and the Wall is - "Change". Was it not the Obama call in back in December 2008 leading to December 2009 ?

Ritholtz, Ratigan Take on the 'Giant Vampire Squid'

Dear Americans,

You are dealing with a sovereign nation within a nation, when you deal with Goldman Sachs. Please think carefully, what your and your Government's options are - do not expect to see tanks charging into Wall Street, like what you have seen, for Saddam Hussein's Iraq only to find that there was no WMD; the WMD is at Wall Street all this while. So, now, you realise that the WMD has exploded at your front door of capitalism, causing an implosion on your net worth and your future generations are already on the liabilities side of the balance sheet of Goldman Sachs, does it looks like its ever going to go away - its really Rotten Sucks for you - ain't it ?Short of a full rebellion or a resurrection of the ghost of FDR, nothing else can stand between Goldman Sachs and your eternal everlasting poverty.

Oh, So Now There Are No Green Shoots?

Having read this litany of commentary, the Wall Street Casino is the focus and preoccupation of fiscal and economic policy makers and upper class Americans. Your livelihoods are so much more beholden to Wall Street that defies all rationale and that sense of impotence could well be a self induced masochistic feeling of pain that partakers are suppose to enjoy be it bulls or bears.
Wall Street is as good as a "sovereign nation" with the Fed as its Government. It produces nothing tangible but has the arcane ability to suck up your wealth and expect a bailout with no strings attached. Unless you wake up from this masochistic euphoria, happy enjoyment.

China Wants More Gold

Exactly for the reasons that the US, holder of the largest gold reserves in the world needs to support thre $ peg, China is doing like wise for the RMB; only the Chinese can do the buying.
You have to physically produce gold, but you can digitize the $ trillions into the US economy - that's another big difference.

Is Treasury's TARP Debt Already Monetized? Part III

There are $billions, stacked up by funds of all sorts in Wall Street, taht represents the entire reserves of some smaller countries that boggles the mind. One can postulate, at the very discretion of Wall Street insiders, when they decide to release these funds, the economic cycle will run into another bubble frenzy. In between, supply side collapse has no bearing - Wall Street will price this higher, investment banks will over value these transactions for fee base income, the consolidation story sells as future earnings (next 24 months) will upsize 3 fold due to less competition - look at the bank stocks that are being manipulated !