Jesse's Café Américain Fri 2009-10-23 08:54 EDT
The Extinction of Ethics in Finance -- The Fallout, by Greg Simmons: ...I could probably write an entire thesis about the utter abandonment of morality by today's so-called investment community. I mean, does everybody have to cheat each other to make a dollar? The subject literally brings into question the human thread that binds our social fabric together...
zero hedge Wed 2009-10-14 12:12 EDT
...The big question mark at the end of August is when the U.S. International Reserve Position increased by almost 50%. The reason for this: a near quintupling of S.D.R. holdings on the U.S. balance sheet in the span of one week... By purchasing $40 billion in SDRs virtually overnight, what the Fed has done is to increase the value of the entire basket pro-rata, while in the process reducing the actual value of the dollar (which is a weighted constituent of the SDR basket). This was an operation to reduce the dollar's value: pure and simple. In many ways it explains why the DXY has continued its straight one way decline since the beginning of September, when many pundits assumed the market was finally going to tank on profit taking after Labor day. By performing this dollar adverse transaction, the Fed sent a loud and clear signal what the Fed was going to do going forward vis-a-vis the i) dollar and ii) its derivative, the stock market.
August; Folding; U.S. SDR Holdings Increase; weekly; Zero Hedge.
Dr. Housing Bubble Blog Tue 2009-10-13 20:03 EDT
...Until jobs start showing up, any talk of a rebounding housing market is moot especially with this entire artificial stimulus still bouncing around the economy. And collapsing tax revenues are not a good sign. I don't buy the jobless recovery argument and the government tends to agree. If all is well, why is the U.S. government and Fed buying $1.25 trillion in agency debt to lower mortgage rates, putting in place an $8,000 tax credit, boosting car sales with gimmicks, encouraging risky low money down loans with FHA insured products, and extending unemployment insurance to a record 92 weeks in states like California? Do these things sounds like policies of a booming economy?
10 Charts Showing; Buying versus Renting; country; Dr. Housing Bubble Blog; Fragile recovery; home Sale; old job; Real Economy Data; unemployment.
zero hedge Sat 2009-10-10 13:09 EDT
In keeping with the warnings presented by Kyle Bass warned that the entire housing bubble is now being ported over to the taxpayer's balance sheet, Edward Pinto, a former chief credit officer for Fannie Mae claims that the Federal Housing Administration will likely require a major taxpayer bailout "in the next 24 to 36 months" as it is likely to incur $56 billion more in losses than it can withstand.
54; Fannie Chief Credit Officer Says FHA; underwater; Zero Hedge.
naked capitalism Tue 2009-09-22 11:32 EDT
We've all been taught that banks first build up deposits, and then extend credit and loan out their excess reserves. But critics of the current banking system claim that this is not true, and that the order is actually reversed...Steve Keen explained that 25 years of research shows that creation of debt by banks precedes creation of government money, and that debt money is created first and precedes creation of credit money...monetary reformers like Ellen Brown argue that the entire banking system is based upon a fraud. Specifically, she and other monetary reformers argue that the banks have intentionally spread the false reserves-and-credit first, loans-and-debt later story to confuse people into thinking that the banks are better capitalized than they really are and that the Federal Reserve is keeping better oversight than it really is...Monetary reformers argue that the government should take the power of money creation back from the private banks and the Federal Reserve system.
created; credit; excess reserves; Guest Post; meaning; naked capitalism.
The IRA Analyst Mon 2009-09-21 17:23 EDT
...before Treasury Secretary Tim Geithner and the other G-20 finance ministers set about to raise capital levels, they need to understand that the earnings of the banking industry are going to be impaired for years as the cost of resolving failed banks is repaid. Restoring solvency is the first issue for many banks, then we can talk about increased capital and restrictions on risk taking equally. And as the banking industry shrinks defensively in order to conserve capital and fund liabilities impaired by realized losses, the credit available to the US economy also shrinks. You can't have economic growth without credit growth...Bottom line is that deflation is still the chief threat to the US economy, driven by a relentless contraction in bank and nonbank credit. Until we see a restoration of the market for nonbank finance and a sustained turn in the EAD of the large bank peer group, which accounts for almost 70% of the entire US industry balance sheet, we do not believe that any economic recovery will be meaningful in terms of jobs or asset prices.
Thu 2009-09-17 10:08 EDT
Our banks have gotten into the habit of needing to be rescued through repeated bailouts. During this crisis, Bernanke--while saving the financial system in the short term--has done nothing to break this long-term pattern; worse, he exacerbated it. As a result, unless real reform happens soon, we face the prospect of another bubble-bust-bailout cycle that will be even more dangerous than the one we've just been through. ...We have seen this spectacle--the Fed saving us from one crisis only to instigate another--many times before. And, over the past few decades, the problem has become significantly more dire. The fault, to be sure, doesn't lie entirely with the Fed. Bernanke is a prisoner of a financial system with serious built-in flaws. The decisions he made during the recent crisis weren't necessarily the wrong decisions; indeed, they were, in many respects, the decisions he had to make. But these decisions, however necessary in the moment, are almost guaranteed to hurt our economy in the long run--which, in turn, means that more necessary but harmful measures will be needed in the future. It is a debilitating, vicious cycle. And at the center of this cycle is the Fed.
Fri 2009-07-24 00:00 EDT
Richard Kline: ``the entire core of the financial system has become an aggregated slime mold of formerly distinct Enrons, bloated 100 times larger''
Tue 2009-04-21 00:00 EDT
``the crisis that we're in now is precisely the same crisis we've been in since at least the S&L crisis. We've had a cancer, with some superficial remissions, but fundamentally, for the entire period from the 1980s to 2008, our financial system in general and our banks in particular have been broken.''
Sun 2008-11-23 00:00 EST
``the pervasive story of this entire era: all of the financial firm earnings eaten up by subsequent losses''
Thu 2008-06-12 00:00 EDT
"traditional macro-economic measurements like GDP, debt, etc., will soon have to be retooled or replaced entirely"
Fri 2008-05-16 00:00 EDT
Winter (Economic & Market) Watch >> Paint Lipstick on this Pig; Freddie Mac moves 120 billion to level 3 assets; moved entire ABS portfolio into level 3; level 3 assets now 23% of total assets
Wed 2007-09-12 00:00 EDT
Fed "embraced every bubble in history"; Greenspan "consistently wrong at every major turn in his entire history as Fed chair"
1998; Conditions; Greenspan; Mish's Global Economic Trend Analysis.
Tue 2007-09-11 00:00 EDT
by John P. Hussman; "whatever the Fed does, the impact will be almost entirely psychological"
2007; Hussman Funds; September 10; waiting; weekly market comments; witch doctor.
