basehitz's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/53773/comments http://seekingalpha.com/article/176212-bernanke-s-date-with-the-senate-looks-like-it-will-be-interesting?source=feed#comment-787070 787070
• Bill Fleckenstein in his book “Greenspan’s Bubbles” accuses “Easy Al” of many statements and policy decisions targeting markets.
• As a reaction to the implosion of the tech bubble he helped create, he facilitated the housing bubble with 1% interest rates.

Then Banana Ben took the reigns and continued the nonsense.
• As the market first began rolling over, SPX 1275 (if memory serves me) was a line of defense which when approached, BB would do something like . . . announce an interest rate cut just before 9 am on an options expiration day. Traders were slaughtered. Barron’s noted the same. (Sorry, didn’t save a link. I now know to think like a prosecutor regarding our financial leadership.)
• As the market cascaded lower, Bernanke and other miscreants billed the taxpayer for endless bailouts which benefited the politically connected, but were of little value to taxpayers now shouldering the bill.
• After the market bounced, Banana Ben signaled speculators that free poker chips would be continuously minted to reflate asset prices. And Washington invented endless handouts. As such, they jointly created the illusion of prosperity. . . all paid for with new debt facilitated by egregious amounts of printed money.

And now we’re to believe that Banana Ben will be disciplined? How about another explanation. . .

The reason BB and other Washington miscreants will do anything to block auditing the Fed is cause public knowledge would expose their mischief and threaten the economy. BB as much said so himself. To appease the public outrage and attempts by some in Congress to reign in the rogue Fed, BB portrays his next term as disciplined, hoping the economy recovers and he can clean up the mess he’s made of the Fed balance sheet with all those mortgages that no one else will buy. ]]> Wed, 02 Dec 2009 16:12:20 -0500
• Bill Fleckenstein in his book “Greenspan’s Bubbles” accuses “Easy Al” of many statements and policy decisions targeting markets.
• As a reaction to the implosion of the tech bubble he helped create, he facilitated the housing bubble with 1% interest rates.

Then Banana Ben took the reigns and continued the nonsense.
• As the market first began rolling over, SPX 1275 (if memory serves me) was a line of defense which when approached, BB would do something like . . . announce an interest rate cut just before 9 am on an options expiration day. Traders were slaughtered. Barron’s noted the same. (Sorry, didn’t save a link. I now know to think like a prosecutor regarding our financial leadership.)
• As the market cascaded lower, Bernanke and other miscreants billed the taxpayer for endless bailouts which benefited the politically connected, but were of little value to taxpayers now shouldering the bill.
• After the market bounced, Banana Ben signaled speculators that free poker chips would be continuously minted to reflate asset prices. And Washington invented endless handouts. As such, they jointly created the illusion of prosperity. . . all paid for with new debt facilitated by egregious amounts of printed money.

And now we’re to believe that Banana Ben will be disciplined? How about another explanation. . .

The reason BB and other Washington miscreants will do anything to block auditing the Fed is cause public knowledge would expose their mischief and threaten the economy. BB as much said so himself. To appease the public outrage and attempts by some in Congress to reign in the rogue Fed, BB portrays his next term as disciplined, hoping the economy recovers and he can clean up the mess he’s made of the Fed balance sheet with all those mortgages that no one else will buy. ]]> http://seekingalpha.com/article/175044-key-points-from-nyu-commercial-real-estate-capital-markets-conference?source=feed#comment-775055 775055 www.youtube.com/watch?...]]> Tue, 24 Nov 2009 09:42:46 -0500 www.youtube.com/watch?...]]> http://seekingalpha.com/article/174998-just-call-us-subprime-sam?source=feed#comment-774983 774983
Why? Cause no one else will buy this crap and the real estate market will implode. Everyone knows it (except CNBC fans). So they would rather put the currency and nation at risk than do the responsible thing and let market forces correct the imbalances.

Why? Cause they know the banks cannot take the hit the market would deal. And that is whom these bankers serve, their buddies who created this mess in the first place. ]]> Tue, 24 Nov 2009 09:03:36 -0500
Why? Cause no one else will buy this crap and the real estate market will implode. Everyone knows it (except CNBC fans). So they would rather put the currency and nation at risk than do the responsible thing and let market forces correct the imbalances.

Why? Cause they know the banks cannot take the hit the market would deal. And that is whom these bankers serve, their buddies who created this mess in the first place. ]]> http://seekingalpha.com/article/174811-u-s-government-s-size-the-slow-motion-crisis?source=feed#comment-773084 773084
Another example: Most people are outraged by the bailout culture heaping massive benefit on the politically connected in this and previous administrations. (Think, former GS CEO bailing out his WS pals.) Just when some of us hoped they would end TARP’s existence, some in Congress want to canonize the bailout culture. Barney Frank and Chris Dodd are leading the charge. They are advocating:
1) broad discretion as to who gets money
2) unlimited new deficit spending to finance these bailouts
3) broad powers to the Treasury and Federal Reserve enacting whatever they want. Do you trust Banana Ben or Timmy with this kind of power?

WSJ link:
online.wsj.com/article...

It’s almost like they are saying, our failure is inevitable, so we will have one last drunken orgy and canonize our mutual destruction. ]]> Mon, 23 Nov 2009 08:29:16 -0500
Another example: Most people are outraged by the bailout culture heaping massive benefit on the politically connected in this and previous administrations. (Think, former GS CEO bailing out his WS pals.) Just when some of us hoped they would end TARP’s existence, some in Congress want to canonize the bailout culture. Barney Frank and Chris Dodd are leading the charge. They are advocating:
1) broad discretion as to who gets money
2) unlimited new deficit spending to finance these bailouts
3) broad powers to the Treasury and Federal Reserve enacting whatever they want. Do you trust Banana Ben or Timmy with this kind of power?

WSJ link:
online.wsj.com/article...

It’s almost like they are saying, our failure is inevitable, so we will have one last drunken orgy and canonize our mutual destruction. ]]> http://seekingalpha.com/article/174657-the-truth-behind-china-s-currency-peg?source=feed#comment-771688 771688
China: Some maintain it is very much at risk as it is still building export capacity, but for who? American consumers are still deleveraging and saving. . . finally. And since China doesn’t have social programs such as SS and Medicare as in US, they must save. So it’s doubtful they will take up the slack. Gary Shilling was interviewed recently on this:
finance.yahoo.com/tech...=

US: BHO initially advocated building American jobs for energy, infrastructure and others with long term benefit. He advocated ending politics-as-usual where special interests and self-serving politicians seeking campaign financing could be bought at the expense of the people. Many were hopeful. For many, we see that the only thing that changed was who the special interests are. Under Bush, Paulson raped the US Treasury to help his pals on WS, with little discernable help to Main Street. Under BHO, we find a continuation of these shameful practices and what has changed is who the special interests are that are shaping policy.

Banana Ben and Timmy continue to protect their pals in the financial industry who created this disaster in the first place, while punishing savers through zero interest rate policy and currency devaluation.

My hope is that enough people make it their business to learn what’s actually going on (as opposed to the crap being shoveled on CNBC), and speak out through all means available. (Thank you Peter for your contribution.) Some politicians will respond to public pressure. Those that won’t, come next election, fire them.

Example: Is anyone on the planet comfortable with what Banana Ben is doing besides hot money on WS? Does the Constitution even allow Kamikaze Ben to bail out foreign banks, or print trillions out of thin air? Yet a bill to audit the Fed was resisted by 26 Reps, whose names are at the bottom of this post:
market-ticker.org/arch...

Of particular note was Congressman Mel Watt., who was hostile to reigning in the Fed. Why? Zero Hedge says it like few can.
www.zerohedge.com/arti...
This kind of crap must stop in Washington before these self-serving A-holes destroy this country. ]]> Sun, 22 Nov 2009 10:01:17 -0500
China: Some maintain it is very much at risk as it is still building export capacity, but for who? American consumers are still deleveraging and saving. . . finally. And since China doesn’t have social programs such as SS and Medicare as in US, they must save. So it’s doubtful they will take up the slack. Gary Shilling was interviewed recently on this:
finance.yahoo.com/tech...=

US: BHO initially advocated building American jobs for energy, infrastructure and others with long term benefit. He advocated ending politics-as-usual where special interests and self-serving politicians seeking campaign financing could be bought at the expense of the people. Many were hopeful. For many, we see that the only thing that changed was who the special interests are. Under Bush, Paulson raped the US Treasury to help his pals on WS, with little discernable help to Main Street. Under BHO, we find a continuation of these shameful practices and what has changed is who the special interests are that are shaping policy.

Banana Ben and Timmy continue to protect their pals in the financial industry who created this disaster in the first place, while punishing savers through zero interest rate policy and currency devaluation.

My hope is that enough people make it their business to learn what’s actually going on (as opposed to the crap being shoveled on CNBC), and speak out through all means available. (Thank you Peter for your contribution.) Some politicians will respond to public pressure. Those that won’t, come next election, fire them.

Example: Is anyone on the planet comfortable with what Banana Ben is doing besides hot money on WS? Does the Constitution even allow Kamikaze Ben to bail out foreign banks, or print trillions out of thin air? Yet a bill to audit the Fed was resisted by 26 Reps, whose names are at the bottom of this post:
market-ticker.org/arch...

Of particular note was Congressman Mel Watt., who was hostile to reigning in the Fed. Why? Zero Hedge says it like few can.
www.zerohedge.com/arti...
This kind of crap must stop in Washington before these self-serving A-holes destroy this country. ]]> http://seekingalpha.com/article/174478-a-rough-day-at-the-office-for-tim-geithner?source=feed#comment-768854 768854 "Even as Tim Geithner was boldly lying today on national TV, claiming that he abhors the concept of too big to fail, and condemns moral hazard, behind everybody's back he, together with the entire Obama administration, was trying to pass a law that would shift TBTF from a temporary program into officially canonized law. This is a scandal that has gotten little recognition in most of the MSM: in essence it guarantees that the massive mega banks like Goldman Sachs, BofA, and JPM will take on so much disproportionate risk the next time around (and with a moral-hazard encouraging Federal Reserve as risk regulator virtually guarantees their implosion) that not only will they blow up spectacularly once again, but that their bailout next time around will surely force America, already strapped with trillions of new upcoming debt courtesy of stimulus after stimulus, into sovereign insolvency. "

www.zerohedge.com/arti...]]> Fri, 20 Nov 2009 10:01:42 -0500 "Even as Tim Geithner was boldly lying today on national TV, claiming that he abhors the concept of too big to fail, and condemns moral hazard, behind everybody's back he, together with the entire Obama administration, was trying to pass a law that would shift TBTF from a temporary program into officially canonized law. This is a scandal that has gotten little recognition in most of the MSM: in essence it guarantees that the massive mega banks like Goldman Sachs, BofA, and JPM will take on so much disproportionate risk the next time around (and with a moral-hazard encouraging Federal Reserve as risk regulator virtually guarantees their implosion) that not only will they blow up spectacularly once again, but that their bailout next time around will surely force America, already strapped with trillions of new upcoming debt courtesy of stimulus after stimulus, into sovereign insolvency. "

www.zerohedge.com/arti...]]> http://seekingalpha.com/article/174082-goldman-s-human-face?source=feed#comment-767626 767626 See previous post:
seekingalpha.com/user/...]]> Thu, 19 Nov 2009 13:38:56 -0500 See previous post:
seekingalpha.com/user/...]]> http://seekingalpha.com/article/174007-goldman-tries-to-combat-its-bad-image?source=feed#comment-765308 765308 www.epi.org/analysis_a...]]> Wed, 18 Nov 2009 09:56:22 -0500 www.epi.org/analysis_a...]]> http://seekingalpha.com/article/174007-goldman-tries-to-combat-its-bad-image?source=feed#comment-765243 765243
#1) The AIG bad bets which were paid off by the US taxpayer at 100%, which had already been negotiated for a stiff haircut partial reimbursement previous, give it back to the US Treasury. We know about the $13B backdoor payout thru AIG which the govt tried to keep secret. We also know that banks like Merrill Lynch that had bought credit-default swaps from failed insurers other than AIG were paid 13 cents on the dollar in deals moderated by New York’s insurance regulator. (See link below) 87% haircut on $13B = $11B. So at your rate of $500m/yr, that would be 22 years just to pay that back with no interest.
seekingalpha.com/artic...

#2) Or how about this taxpayer subsidy from the Economic Policy Institute:
“Goldman also benefited from artificially inexpensive debt thanks to the FDIC’s Temporary Liquidity Guarantee Program (TLGP). This program put a federal guarantee behind bonds issued by Goldman and other banks, including Bank of America and JP Morgan Chase, making them far more attractive to investors. For example, when Goldman sold $5 billion of 3.5 year bonds in November, it was able to attract buyers while offering a yield only 200 basis points higher than ultra-safe Treasuries with similar maturities. Altogether, Goldman issued $28 billion in debt using this program between November and April. Mark Zandi, chief economist at Moody’s Economy.com, called this bond-guarantee program an infinite subsidy whose value could not be calculated.”

Not sure how much to tack on. Infinity sounds like a big number, so let’s just double it to be generous. Instead of paying $500m/yr, up the ante to $1B/yr. After all, we know your wholly owned subsidiary, the Federal Reserve, with make the dollar worthless it we let this go too long.

#3) We also know your trading winning percentage is not possible.
www.zerohedge.com/arti...
So are you really THAT good? Or do you cheat? YOUR lawyer said in a courtroom:
“During Aleynikov’s July 4 bail hearing, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge that ‘the bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.’”
blogs.wsj.com/deals/20.../

So, on a condition of settlement for ONLY THE ABOVE infractions (we’ll get to the rest later), you must also quit using this program.

So Lord Blankfein, do you really think we’re that f###ing stupid to believe your newfound “generosity” is sincere? If you want to convince us, right the 2 wrongs above immediately, quit using the program YOU say could be used to manipulate the markets, and THEN give to charity. I promise I will praise you if you do. ]]> Wed, 18 Nov 2009 09:31:47 -0500
#1) The AIG bad bets which were paid off by the US taxpayer at 100%, which had already been negotiated for a stiff haircut partial reimbursement previous, give it back to the US Treasury. We know about the $13B backdoor payout thru AIG which the govt tried to keep secret. We also know that banks like Merrill Lynch that had bought credit-default swaps from failed insurers other than AIG were paid 13 cents on the dollar in deals moderated by New York’s insurance regulator. (See link below) 87% haircut on $13B = $11B. So at your rate of $500m/yr, that would be 22 years just to pay that back with no interest.
seekingalpha.com/artic...

#2) Or how about this taxpayer subsidy from the Economic Policy Institute:
“Goldman also benefited from artificially inexpensive debt thanks to the FDIC’s Temporary Liquidity Guarantee Program (TLGP). This program put a federal guarantee behind bonds issued by Goldman and other banks, including Bank of America and JP Morgan Chase, making them far more attractive to investors. For example, when Goldman sold $5 billion of 3.5 year bonds in November, it was able to attract buyers while offering a yield only 200 basis points higher than ultra-safe Treasuries with similar maturities. Altogether, Goldman issued $28 billion in debt using this program between November and April. Mark Zandi, chief economist at Moody’s Economy.com, called this bond-guarantee program an infinite subsidy whose value could not be calculated.”

Not sure how much to tack on. Infinity sounds like a big number, so let’s just double it to be generous. Instead of paying $500m/yr, up the ante to $1B/yr. After all, we know your wholly owned subsidiary, the Federal Reserve, with make the dollar worthless it we let this go too long.

#3) We also know your trading winning percentage is not possible.
www.zerohedge.com/arti...
So are you really THAT good? Or do you cheat? YOUR lawyer said in a courtroom:
“During Aleynikov’s July 4 bail hearing, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge that ‘the bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.’”
blogs.wsj.com/deals/20.../

So, on a condition of settlement for ONLY THE ABOVE infractions (we’ll get to the rest later), you must also quit using this program.

So Lord Blankfein, do you really think we’re that f###ing stupid to believe your newfound “generosity” is sincere? If you want to convince us, right the 2 wrongs above immediately, quit using the program YOU say could be used to manipulate the markets, and THEN give to charity. I promise I will praise you if you do. ]]> http://seekingalpha.com/article/173592-the-financial-crisis-nowhere-near-over?source=feed#comment-764293 764293
The trade has been dollar up, stocks and commodities down, and vice versa. The inverse correlation was shown clearly by Karl Denninger in a chart here:
“The dollar and S&P 500 correlation . . . in July it became nearly-perfect”
market-ticker.org/arch...

And if Goldie is right on financials bearish bet, the market won’t fight that. Since Goldie’s results last 2 Qs shows they almost never have a losing day trading, you gonna bet against them?

I need to rephrase the author’s following statement:
“Given Goldman’s incredible access to and close relationship with the regulators and federal government”

That should read:
“Given Goldie’s directives to it’s wholly owned subsidiaries, the Federal Reserve and the US Treasury. . . “]]> Tue, 17 Nov 2009 16:20:53 -0500
The trade has been dollar up, stocks and commodities down, and vice versa. The inverse correlation was shown clearly by Karl Denninger in a chart here:
“The dollar and S&P 500 correlation . . . in July it became nearly-perfect”
market-ticker.org/arch...

And if Goldie is right on financials bearish bet, the market won’t fight that. Since Goldie’s results last 2 Qs shows they almost never have a losing day trading, you gonna bet against them?

I need to rephrase the author’s following statement:
“Given Goldman’s incredible access to and close relationship with the regulators and federal government”

That should read:
“Given Goldie’s directives to it’s wholly owned subsidiaries, the Federal Reserve and the US Treasury. . . “]]> http://seekingalpha.com/article/173597-government-spending-where-does-it-end?source=feed#comment-762559 762559
So Banana Ben finally said something today. The key point from an AP article:
“He made clear Fed policymakers will keep rates at super-low levels. Yet through his words, Bernanke is also trying to bolster confidence in the dollar WITHOUT ACTUALLY RAISING RATES”.

In other words, it’s BS. The market immediately read that and celebrated continued free money for speculation while trashing the dollar.

But not to worry, the same article asked the “experts”:
“Economists say a free-fall in the value of the dollar is remote”

These would be the same morons who said brilliant things like “subprime is contained”, and didn’t see any of this coming before it imploded. How reassuring they don’t see the risk today. . . again. Banana Ben was in that camp.

Here’s link to full AP story:
finance.yahoo.com/news...=]]> Mon, 16 Nov 2009 15:06:38 -0500
So Banana Ben finally said something today. The key point from an AP article:
“He made clear Fed policymakers will keep rates at super-low levels. Yet through his words, Bernanke is also trying to bolster confidence in the dollar WITHOUT ACTUALLY RAISING RATES”.

In other words, it’s BS. The market immediately read that and celebrated continued free money for speculation while trashing the dollar.

But not to worry, the same article asked the “experts”:
“Economists say a free-fall in the value of the dollar is remote”

These would be the same morons who said brilliant things like “subprime is contained”, and didn’t see any of this coming before it imploded. How reassuring they don’t see the risk today. . . again. Banana Ben was in that camp.

Here’s link to full AP story:
finance.yahoo.com/news...=]]> http://seekingalpha.com/article/173317-housing-and-banking-woes-to-continue?source=feed#comment-760333 760333 “Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.”

FHA commissioner Stevens before House Subcommittee:
“Stevens assured lawmakers that his agency would not need a bailout and that it was managing its risks.”

"But he (Stevens) acknowledged that 20% of FHA loans insured last year — and as many as 24% from 2007 — faced serious problems including foreclosure.”

Recall, his testimony before Congress was just last month. Seems “fixing” the real estate bubble facilitated by crappy lending practices, is . . . well, more of the same.

Link to NYT article
www.nytimes.com/2009/1...]]> Sat, 14 Nov 2009 13:13:03 -0500 “Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.”

FHA commissioner Stevens before House Subcommittee:
“Stevens assured lawmakers that his agency would not need a bailout and that it was managing its risks.”

"But he (Stevens) acknowledged that 20% of FHA loans insured last year — and as many as 24% from 2007 — faced serious problems including foreclosure.”

Recall, his testimony before Congress was just last month. Seems “fixing” the real estate bubble facilitated by crappy lending practices, is . . . well, more of the same.

Link to NYT article
www.nytimes.com/2009/1...]]> http://seekingalpha.com/article/173298-confidence-and-trade-spin-vs-reality?source=feed#comment-759338 759338
OK, he didn't exactly say that. So I took some liberty to calibrate what he said with what he meant. . . without the rose colored glasses.

I read an interesting report today from Comstock Partners on their projections for the CONTINUING consumer deleveraging for several more YEARS. Uh, oh. This was well worth my time to read and fits in with Karl's often cited data on consumer retrenchment.
www.investmentpostcard...]]> Fri, 13 Nov 2009 16:34:18 -0500
OK, he didn't exactly say that. So I took some liberty to calibrate what he said with what he meant. . . without the rose colored glasses.

I read an interesting report today from Comstock Partners on their projections for the CONTINUING consumer deleveraging for several more YEARS. Uh, oh. This was well worth my time to read and fits in with Karl's often cited data on consumer retrenchment.
www.investmentpostcard...]]> http://seekingalpha.com/article/173001-emerson-electric-ceo-washington-is-destroying-u-s-manufacturing?source=feed#comment-756915 756915
From a Reuters story March ’09:
“Yet a wave of energy companies has in the last few months announced plans to move to Switzerland -- mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama's tax-seeking administration.”
“Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.”
www.reuters.com/articl...

This is just one of many examples that could be cited. ]]> Thu, 12 Nov 2009 09:21:31 -0500
From a Reuters story March ’09:
“Yet a wave of energy companies has in the last few months announced plans to move to Switzerland -- mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama's tax-seeking administration.”
“Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.”
www.reuters.com/articl...

This is just one of many examples that could be cited. ]]> http://seekingalpha.com/article/172562-peter-schiff-the-government-chose-wrong?source=feed#comment-756772 756772
Buying votes is standard practice for many incumbants. Since we have lived beyond our means for 3 decades, the shortfall is made up by printing money and piling on debt. Until it looks like this:
2.bp.blogspot.com/_vIR...

1971 was when the dollar got off the gold standard. Notice where that is on above chart. It has now gone parabolic. Clearly this is not sustainable. Politicians, with a few exceptions, will put their next election ahead of our long term prosperity. If Banana Ben continues to accommodate irresponsible borrowing and spending for endless bailouts, backstops and handouts for consumption rather than investment, history suggests we are courting disaster.

I suspect that BB will want to avoid going down in history as the one at the helm when the US dollar and it's economy is destroyed. If for no better reason than self-serving legacy preservation, that may drive him to show some restraint. He does not deserve all the "credit" for this precarious state. "Easy Al" Greenspan was Fed Chairman beginning in 1987. Notice the debt ramp during that time and especially after the dot-bomb implosion when he lowered rates to 1% and held it there to facilitate the housing bubble. They both should be very proud of their "accomplishments".]]> Thu, 12 Nov 2009 08:17:54 -0500
Buying votes is standard practice for many incumbants. Since we have lived beyond our means for 3 decades, the shortfall is made up by printing money and piling on debt. Until it looks like this:
2.bp.blogspot.com/_vIR...

1971 was when the dollar got off the gold standard. Notice where that is on above chart. It has now gone parabolic. Clearly this is not sustainable. Politicians, with a few exceptions, will put their next election ahead of our long term prosperity. If Banana Ben continues to accommodate irresponsible borrowing and spending for endless bailouts, backstops and handouts for consumption rather than investment, history suggests we are courting disaster.

I suspect that BB will want to avoid going down in history as the one at the helm when the US dollar and it's economy is destroyed. If for no better reason than self-serving legacy preservation, that may drive him to show some restraint. He does not deserve all the "credit" for this precarious state. "Easy Al" Greenspan was Fed Chairman beginning in 1987. Notice the debt ramp during that time and especially after the dot-bomb implosion when he lowered rates to 1% and held it there to facilitate the housing bubble. They both should be very proud of their "accomplishments".]]> http://seekingalpha.com/article/172366-tuesday-outlook-commodities-global-markets?source=feed#comment-753504 753504
Imagine the crappy volume without the bots, which would also explain those precision bounces off moving averages.

I wonder if Da Boyz will try to keep it up thru year end for bonuses. ]]> Tue, 10 Nov 2009 06:58:17 -0500
Imagine the crappy volume without the bots, which would also explain those precision bounces off moving averages.

I wonder if Da Boyz will try to keep it up thru year end for bonuses. ]]> http://seekingalpha.com/article/171995-employment-neither-quality-nor-quantity?source=feed#comment-750673 750673
Recently at the gym, a PhD in Chemistry told me as rebuttal to my debt concerns, that debt doesn't matter. We could just default on all this debt, enforce trade protectionism, and it would work out fine. Then he cited the Weimar Republic as an example. I thought he was kidding. He wasn't. I asked him (as just one example) what we do about oil if the dollar is destroyed? After his first nonsensical response (which my memory banks purged for fear of contaminating other data), I reminded him we import 70% of our oil and if that were cut off, our economy would be destroyed. He changed topics.

The frightening part is this is a well "educated" person. He really believes this. ]]> Sun, 08 Nov 2009 09:50:21 -0500
Recently at the gym, a PhD in Chemistry told me as rebuttal to my debt concerns, that debt doesn't matter. We could just default on all this debt, enforce trade protectionism, and it would work out fine. Then he cited the Weimar Republic as an example. I thought he was kidding. He wasn't. I asked him (as just one example) what we do about oil if the dollar is destroyed? After his first nonsensical response (which my memory banks purged for fear of contaminating other data), I reminded him we import 70% of our oil and if that were cut off, our economy would be destroyed. He changed topics.

The frightening part is this is a well "educated" person. He really believes this. ]]> http://seekingalpha.com/article/172032-home-purchase-tax-credit-extended-is-this-wise?source=feed#comment-750630 750630
“Realtor Magazine. . . stated that the expiring tax credit law was taken advantage of by approximately 2 million people”

That is overstated per NAR (well known for spinning everything in their favor), From an AP article:
“About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.”
finance.yahoo.com/news...=

Above was August totals. Assume 2 million was reached, but only 25% additional purchases from the handout. 75% would have bought anyway. Assume that the 75% who didn’t need the money were the most qualified buyers. It is also reasonable to assume that those who wouldn’t have bought, didn’t have the means without the taxpayer subsidy. So for the marginal buyers, let’s see how that’s working out. From the NY Times:
“. . . 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure.”
www.nytimes.com/2009/1...
(NYT article gives specific examples of marginal buyers. The risk is obvious.)

Mind you, the 2007/8 loans were originated before the $8K subsidy, when at least the buyer presumably had the 3.5% FHA downpayment. Now we have “buyers” (the 25%) who NEED the $8K to make the downpayment. What do they do when the A/C breaks or the roof leaks? If 20% defaulted within 2 years who had the 3.5%, what do you figure the rate will be for those who don’t?

Bottom line as I see it. . . the govt knows many banks can’t take another round of heavy writedowns of both mortgages and CRE loans, that market forces would likely deliver. They also know of the shadow inventory that CNBC and other propaganda outfits don’t want us to know about. So in desperation they are trying anything to artificially prop up prices hoping the new foreclosures they are NOW creating won’t sink them next year.

But remember, all these new FHA loans carry taxpayer backing. So the taxpayer gives them the $8K, then sucks up the loss if (when) it defaults. ]]> Sun, 08 Nov 2009 09:24:53 -0500
“Realtor Magazine. . . stated that the expiring tax credit law was taken advantage of by approximately 2 million people”

That is overstated per NAR (well known for spinning everything in their favor), From an AP article:
“About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.”
finance.yahoo.com/news...=

Above was August totals. Assume 2 million was reached, but only 25% additional purchases from the handout. 75% would have bought anyway. Assume that the 75% who didn’t need the money were the most qualified buyers. It is also reasonable to assume that those who wouldn’t have bought, didn’t have the means without the taxpayer subsidy. So for the marginal buyers, let’s see how that’s working out. From the NY Times:
“. . . 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure.”
www.nytimes.com/2009/1...
(NYT article gives specific examples of marginal buyers. The risk is obvious.)

Mind you, the 2007/8 loans were originated before the $8K subsidy, when at least the buyer presumably had the 3.5% FHA downpayment. Now we have “buyers” (the 25%) who NEED the $8K to make the downpayment. What do they do when the A/C breaks or the roof leaks? If 20% defaulted within 2 years who had the 3.5%, what do you figure the rate will be for those who don’t?

Bottom line as I see it. . . the govt knows many banks can’t take another round of heavy writedowns of both mortgages and CRE loans, that market forces would likely deliver. They also know of the shadow inventory that CNBC and other propaganda outfits don’t want us to know about. So in desperation they are trying anything to artificially prop up prices hoping the new foreclosures they are NOW creating won’t sink them next year.

But remember, all these new FHA loans carry taxpayer backing. So the taxpayer gives them the $8K, then sucks up the loss if (when) it defaults. ]]> http://seekingalpha.com/article/171765-fannie-mae-s-deal-rent-your-home-from-the-government?source=feed#comment-747560 747560 www.youtube.com/watch?...

Further, the 2nd homebuyer tax credit is about to get signed. Many rave about how the 1st handout was so successful. Besides what Mark has pointed out in unqualified buyers with no downpayment, the following was from NAR on previous package:
"About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit."

To rephrase, 1.05 out of 1.4 would have purchased WITHOUT the handout. So the real cost per additional sale was (1.4/0.35 * $8K = $32,000) tax credit for each ADDITIONAL purchase from rebate. And given the % of defaults already from these new "homeowners", FHA is in the que for future bailout(s). Here's the full article with above quote:
finance.yahoo.com/news...=]]> Fri, 06 Nov 2009 06:47:53 -0500 www.youtube.com/watch?...

Further, the 2nd homebuyer tax credit is about to get signed. Many rave about how the 1st handout was so successful. Besides what Mark has pointed out in unqualified buyers with no downpayment, the following was from NAR on previous package:
"About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit."

To rephrase, 1.05 out of 1.4 would have purchased WITHOUT the handout. So the real cost per additional sale was (1.4/0.35 * $8K = $32,000) tax credit for each ADDITIONAL purchase from rebate. And given the % of defaults already from these new "homeowners", FHA is in the que for future bailout(s). Here's the full article with above quote:
finance.yahoo.com/news...=]]> http://seekingalpha.com/article/170397-cost-of-jobs-saved-or-created?source=feed#comment-739173 739173
Can't wait for economis stimulus 2.0. Or is it 6.0 now?]]> Sun, 01 Nov 2009 10:47:55 -0500
Can't wait for economis stimulus 2.0. Or is it 6.0 now?]]> http://seekingalpha.com/article/169040-the-secret-to-the-banking-sector-s-success?source=feed#comment-731949 731949
As for the banksters, Dylan Ratigan weighed in on what he calls “corporate communism”. After the 2 minute mark he gets pretty intense over GS trying to justify their egregious pay.

www.msnbc.msn.com/id/3...]]> Tue, 27 Oct 2009 06:59:46 -0400
As for the banksters, Dylan Ratigan weighed in on what he calls “corporate communism”. After the 2 minute mark he gets pretty intense over GS trying to justify their egregious pay.

www.msnbc.msn.com/id/3...]]> http://seekingalpha.com/instablog/106099-dor-kalev/13738-microsoft-windows-7-finally-a-real-challenge-for-apple?source=feed#comment-720905 720905 Mon, 19 Oct 2009 15:18:06 -0400 http://seekingalpha.com/article/162277-time-for-an-fha-shakeup?source=feed#comment-683867 683867 Spent some time on your blog this weekend. I share your passion on the ubiquitous corruption. ]]> Sun, 20 Sep 2009 08:32:28 -0400 Spent some time on your blog this weekend. I share your passion on the ubiquitous corruption. ]]> http://seekingalpha.com/article/161886-thoughts-on-spy-calls-and-yet-another-housing-subsidy?source=feed#comment-680326 680326 Thu, 17 Sep 2009 04:58:45 -0400 http://seekingalpha.com/article/161524-united-states-natural-gas-fund-back-in-business?source=feed#comment-677205 677205
Barring some freak event, the above isn't even worthy of comment.]]> Tue, 15 Sep 2009 09:17:53 -0400
Barring some freak event, the above isn't even worthy of comment.]]> http://seekingalpha.com/article/161549-interview-with-goldman-sachs-on-financial-markets?source=feed#comment-677093 677093
From a 9/13 AP article:
• That Wall Street is making money again in essentially the same ways that thrust the banking system into chaos last fall
• Proposals that have been made to better monitor the financial system and to police the products banks sell to consumers have been held up by lobbyists, lawmakers and turf-protecting regulators.
• The government's response to last year's meltdown was to spend whatever it takes to protect the financial system from collapse -- a precedent that could encourage even greater risk-taking from the private sector.
• "We're seeing the same kind of behavior from the banks, and that could lead to some huge and scary parallels," says Simon Johnson, former chief economist with the International Monetary Fund.
• Also in the second quarter, the five biggest banks' average potential losses from a single day of trading topped $1 billion, up 76 percent from two years ago, according to regulatory filings.
• During the fourth quarter of 2008, when the financial crisis made even the shrewdest bankers risk-averse, Goldman's trading of risky assets nearly stopped. But in the second quarter of 2009, TRADING REVENUE HAD CLIMBED TO NEARLY 50 PERCENT OF TOTAL REVENUE, closer to where it was two years ago before the recession began. JP Morgan's reliance on trading revenue has exhibited a similar pattern.

Over 50% of their revenue in trading. So for whom do you think they are issuing their “analysis”? To Goldman Sucks, we are all just a source of funds.

Full article:
finance.yahoo.com/news...=]]> Tue, 15 Sep 2009 08:33:09 -0400
From a 9/13 AP article:
• That Wall Street is making money again in essentially the same ways that thrust the banking system into chaos last fall
• Proposals that have been made to better monitor the financial system and to police the products banks sell to consumers have been held up by lobbyists, lawmakers and turf-protecting regulators.
• The government's response to last year's meltdown was to spend whatever it takes to protect the financial system from collapse -- a precedent that could encourage even greater risk-taking from the private sector.
• "We're seeing the same kind of behavior from the banks, and that could lead to some huge and scary parallels," says Simon Johnson, former chief economist with the International Monetary Fund.
• Also in the second quarter, the five biggest banks' average potential losses from a single day of trading topped $1 billion, up 76 percent from two years ago, according to regulatory filings.
• During the fourth quarter of 2008, when the financial crisis made even the shrewdest bankers risk-averse, Goldman's trading of risky assets nearly stopped. But in the second quarter of 2009, TRADING REVENUE HAD CLIMBED TO NEARLY 50 PERCENT OF TOTAL REVENUE, closer to where it was two years ago before the recession began. JP Morgan's reliance on trading revenue has exhibited a similar pattern.

Over 50% of their revenue in trading. So for whom do you think they are issuing their “analysis”? To Goldman Sucks, we are all just a source of funds.

Full article:
finance.yahoo.com/news...=]]> http://seekingalpha.com/article/161549-interview-with-goldman-sachs-on-financial-markets?source=feed#comment-677063 677063
1) You said derivatives with AIG as counterparty were hedged and you were not at risk. Why then did you accept the $12.9B back door payout through AIG since you had no risk? And why was there an additional $6B similar type of payout?
2) According to a NYT article, after your HFT program was stolen “"Goldman raised the possibility that there is a danger that somebody who knew how to use this pro gram could use it to manipulate the market in unfair ways.”. What did you use if for? Are you willing to publicly disclose how you used that program?
3) You admitted recently that “admitted that banks lost control of the exotic products they sold in the run-up to the financial crisis, and said that many of the instruments lacked social or economic value”. Yet all indications are that you are now pursuing just as aggressive of a trading strategy as before the crisis that let to a taxpayer bailout. What specifically are you doing differently now to not add systemic risk to the system?
4) The NYT got hold of Paulson's phone records for Sept. 2008, which detailed many calls between him and Goldman right before the government's decision to bail out AIG. AIG had taken large trading risks including many with Goldman on the other side of the transaction. You also had many discussions with Paulson PRIOR TO obtaining a waiver to an agreement from Paulson not to contact you directly due to obvious conflict of interest. What was discussed in those many discussions?
5) Did Hank Paulson contact Goldman after a lunch with Bernanke on Thurs., Aug. 16, 2007? That day Wall Street seemed to get wind of the idea that the Fed was planning to do something big, and stock prices rallied strongly at the very end of that trading session. The very next morning Bernanke cut interest rates, the first of many such moves. Are you willing to swear you had no tip-off from your former CEO?
6) The ubiquitous “stick save” in the final hour of trade has become so mechanical and predictable to be a standard joke in the blogosphere. Does GS have any part, either for it’s own account or on behalf of a very deep-pocketed clandestine player, to artificially support the market to give the appearance of a healthy market?
7) Why does GS hold private meetings giving investment advise to a select group of clients, but others get the info days later? Has GS ever heard of Reg FD?
8) How is that 6 months after getting $10B TARP money plus the $19B AIG backdoor payout, that you miraculously were paying record bonuses again? We learned this through your Europe office, which you initially denied but now we know your denial was phony. Explain how question 2) and 3) are now integral with your newfound “prosperity”. Please try to explain how all that happened in a manner that is at least somewhat plausible.
9) Would you agree to repeat this entire interview under oath?

I’m sure many readers could expand greatly on the above. I welcome more ideas.]]> Tue, 15 Sep 2009 08:08:05 -0400
1) You said derivatives with AIG as counterparty were hedged and you were not at risk. Why then did you accept the $12.9B back door payout through AIG since you had no risk? And why was there an additional $6B similar type of payout?
2) According to a NYT article, after your HFT program was stolen “"Goldman raised the possibility that there is a danger that somebody who knew how to use this pro gram could use it to manipulate the market in unfair ways.”. What did you use if for? Are you willing to publicly disclose how you used that program?
3) You admitted recently that “admitted that banks lost control of the exotic products they sold in the run-up to the financial crisis, and said that many of the instruments lacked social or economic value”. Yet all indications are that you are now pursuing just as aggressive of a trading strategy as before the crisis that let to a taxpayer bailout. What specifically are you doing differently now to not add systemic risk to the system?
4) The NYT got hold of Paulson's phone records for Sept. 2008, which detailed many calls between him and Goldman right before the government's decision to bail out AIG. AIG had taken large trading risks including many with Goldman on the other side of the transaction. You also had many discussions with Paulson PRIOR TO obtaining a waiver to an agreement from Paulson not to contact you directly due to obvious conflict of interest. What was discussed in those many discussions?
5) Did Hank Paulson contact Goldman after a lunch with Bernanke on Thurs., Aug. 16, 2007? That day Wall Street seemed to get wind of the idea that the Fed was planning to do something big, and stock prices rallied strongly at the very end of that trading session. The very next morning Bernanke cut interest rates, the first of many such moves. Are you willing to swear you had no tip-off from your former CEO?
6) The ubiquitous “stick save” in the final hour of trade has become so mechanical and predictable to be a standard joke in the blogosphere. Does GS have any part, either for it’s own account or on behalf of a very deep-pocketed clandestine player, to artificially support the market to give the appearance of a healthy market?
7) Why does GS hold private meetings giving investment advise to a select group of clients, but others get the info days later? Has GS ever heard of Reg FD?
8) How is that 6 months after getting $10B TARP money plus the $19B AIG backdoor payout, that you miraculously were paying record bonuses again? We learned this through your Europe office, which you initially denied but now we know your denial was phony. Explain how question 2) and 3) are now integral with your newfound “prosperity”. Please try to explain how all that happened in a manner that is at least somewhat plausible.
9) Would you agree to repeat this entire interview under oath?

I’m sure many readers could expand greatly on the above. I welcome more ideas.]]> http://seekingalpha.com/article/161362-bond-expert-monday-outlook?source=feed#comment-675768 675768 1) the economic stimulus package required purchase of domestic steel.
2) Mexican truckers were banned from driving in the US. There were 98 truckers involved vs thousand of Teamsters truckers.

Both countries are important to us, yet he angered both. Now we're trying for the hat trick with China? The pattern is clear. Most people recognize the precarious position this debtor nation has put itself in. We don't have the luxury of playing hard ball on minor issues while risking fallout on major issues. Does he think we don't realize the potential harm to the nation to protect the select groups? Unfortunately, another pattern is the biased MSM fails to report much of what is unfavorable to this administration. Still, the folks are figuring it out, and their viewership as well as Obama's poll ratings reflect that. ]]> Mon, 14 Sep 2009 10:53:39 -0400 1) the economic stimulus package required purchase of domestic steel.
2) Mexican truckers were banned from driving in the US. There were 98 truckers involved vs thousand of Teamsters truckers.

Both countries are important to us, yet he angered both. Now we're trying for the hat trick with China? The pattern is clear. Most people recognize the precarious position this debtor nation has put itself in. We don't have the luxury of playing hard ball on minor issues while risking fallout on major issues. Does he think we don't realize the potential harm to the nation to protect the select groups? Unfortunately, another pattern is the biased MSM fails to report much of what is unfavorable to this administration. Still, the folks are figuring it out, and their viewership as well as Obama's poll ratings reflect that. ]]> http://seekingalpha.com/article/161352-waiting-for-ung-s-new-issuance-to-prove-itself?source=feed#comment-675439 675439 Mon, 14 Sep 2009 08:16:49 -0400 http://seekingalpha.com/article/161262-federal-reserve-s-kohn-we-plan-to-keep-throwing-gasoline-onto-the-fire?source=feed#comment-674340 674340
On a less discouraging note, Barron’s interviewed Hoenig, president of the Kansas City Federal Reserve Bank and the longest-serving member of the FOMC. Key points:
• In June Hoenig stirred up controversy when he accused the federal government of "regulatory malpractice" by creating another regulatory regime without addressing "too big to fail." He warned of an "oligarchy of interest that will fail to serve the best interests of business, the consumer and the U.S. economy."
• His main point: Talk about the prudent supervision of banks is putting the cart before the horse; standing in the way of real reform is failure to find a means of systematically dealing with the too-big-to-fail policy.
• To Hoenig, they represent the new aristocracy of U.S. commerce. For months the Kansas City Fed chief has called for policymakers to create a plan to break up the most insolvent of these institutions, putting them first into receivership. "If we hesitate to make needed changes," he says, "we will perpetuate an oligarchy of interest." Chairman Bernanke has said he doesn't favor "too big to fail" policies. (oh really?)
• Hoenig is probably the most visible proponent of the traditionalist view of Federal Reserve governance -- a view that opposed many of the emergency measures applied in the financial crisis. The billions flushed into the banking system have led to a doubling of the Fed's balance sheet in the name of averting global calamity -- and to what traditionalists perceive as a loss of independence for the Fed.
• "The distrust of centralization and monolithic power is a theme throughout American history. This should not be lost on Americans," says Hoenig.
• "Today," he notes, "the top 20 banks own 70% of the [banking system's] assets." In fact, argues Hoenig, the Fed has been behind the process of creating the giants that today tower over the financial industry. "Because of too-big-to-fail, the Fed has encouraged merging sick banks into larger ones, a process that tends to concentrate risk."

Hoenig is described as being on a mission. Barron’s adds:
“The phrase [TBTF] describes the special status apparently conferred on America's biggest banks, which have received billions in taxpayer bailouts and guarantees in the name of keeping the financial system working. The federal government through bailouts has placed them beyond the normal penalties for failure -- receivership, bankruptcy and disgrace. . . . . . These big banks also happen to be among the largest contributors to both political parties.”

Ugh! That last statement, plus bankster lobbying and former banksters now in key regulatory and govt positions has dampened my hopefulness. At least he's trying.

Link to Barron’s
online.barrons.com/art...]]> Sun, 13 Sep 2009 11:05:40 -0400
On a less discouraging note, Barron’s interviewed Hoenig, president of the Kansas City Federal Reserve Bank and the longest-serving member of the FOMC. Key points:
• In June Hoenig stirred up controversy when he accused the federal government of "regulatory malpractice" by creating another regulatory regime without addressing "too big to fail." He warned of an "oligarchy of interest that will fail to serve the best interests of business, the consumer and the U.S. economy."
• His main point: Talk about the prudent supervision of banks is putting the cart before the horse; standing in the way of real reform is failure to find a means of systematically dealing with the too-big-to-fail policy.
• To Hoenig, they represent the new aristocracy of U.S. commerce. For months the Kansas City Fed chief has called for policymakers to create a plan to break up the most insolvent of these institutions, putting them first into receivership. "If we hesitate to make needed changes," he says, "we will perpetuate an oligarchy of interest." Chairman Bernanke has said he doesn't favor "too big to fail" policies. (oh really?)
• Hoenig is probably the most visible proponent of the traditionalist view of Federal Reserve governance -- a view that opposed many of the emergency measures applied in the financial crisis. The billions flushed into the banking system have led to a doubling of the Fed's balance sheet in the name of averting global calamity -- and to what traditionalists perceive as a loss of independence for the Fed.
• "The distrust of centralization and monolithic power is a theme throughout American history. This should not be lost on Americans," says Hoenig.
• "Today," he notes, "the top 20 banks own 70% of the [banking system's] assets." In fact, argues Hoenig, the Fed has been behind the process of creating the giants that today tower over the financial industry. "Because of too-big-to-fail, the Fed has encouraged merging sick banks into larger ones, a process that tends to concentrate risk."

Hoenig is described as being on a mission. Barron’s adds:
“The phrase [TBTF] describes the special status apparently conferred on America's biggest banks, which have received billions in taxpayer bailouts and guarantees in the name of keeping the financial system working. The federal government through bailouts has placed them beyond the normal penalties for failure -- receivership, bankruptcy and disgrace. . . . . . These big banks also happen to be among the largest contributors to both political parties.”

Ugh! That last statement, plus bankster lobbying and former banksters now in key regulatory and govt positions has dampened my hopefulness. At least he's trying.

Link to Barron’s
online.barrons.com/art...]]>