Stacy Summary: The oligarchs are in the news today. And just as in the case of transfer of power in other corrupt states like post-Soviet Russia, old favorite oligarchs are punished and new favorites are rewarded with a transfer of wealth from the public.
Afternoon updates:
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The story on AIG reads like a crime novel on bent cops (Bu$h Admin.) and drug lords (AIG). First, the cops pull one of the dopepushers for a minor charge they themselves made money in, then coerce them into a dodgy deal where they send an "undercover" cop to the drug cartel's meetings as to insure that the cops get paid with every decision that is made. Finally the corrupt cops coerce the drug cartel to break down by flooding inferior product to their market, while all the time licking their tips off. Finally, they arrest the drug cartel, making nice headlines for themselves and receiving their final payout. It's absolutely beautiful from a Macchavellian perspective, Vic Mackie (The Shield) would have loved this!
The Finance 2.0 Manifesto
http://blogs.harvardbusiness.org/haque/2009/04/ma…
Just stumbled upon this couple of weeks old story:
FDIC Criticizes Massachusetts Bank With No Bad Loans for Being Too Cautious – http://www.foxnews.com/story/0,2933,509584,00.htm… (i know it fox but…)
Quote: But rather than reward Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.
The problem, according to FDIC data, was that from late 2003 through mid-2008, East Bridgewater Savings made an average of 28 cents in loans for every dollar in deposit — a sharp contrast to the 90 percent average loan-to-deposit ratio among similar banks, the paper reported.
Yep, if your play by the safer book, you will be punished!
Bytheway, where does the G20 get the $500 Milliard to give to the IMF? How can countries that are already heavily in dept magically come up with the money? I mean, I don’t think china want to pay it all by them self.
@palantri – I think Europe came up with $100 billion toward the IMF. Japan is also giving a large amount. The IMF is also hoping to sell about 400 tons of gold, which they hope to help them raise $11 billion, providing investors don’t front run them.
They are also reporting that the IMF will be granted the right to borrow. I am not sure what they will use as collateral, their remaining (alleged) gold reserves?
- stacy
trillions ready for the final looting of the public sectors. buying confidence into money which never existed. in which phase of loss is the g20 right now: Shock, Denial, Bargaining, Anger, Guilt, Depression, Recovery, Hope, Acceptance?
what are the alternatives? how do you cure the cancer? close as many banks as needed. close large parts of the financial sector because it is not productive itself but a parasite of production (derivatives, cds, carry trades, short selling..) focus on a few large projects. clean energy. health & education. new modes of transportation. introduce a new world currency. (now that hyperinflation seems to be unavoidable) and tax the hell out of those who got rich in the criminal ponzi schemes of the last 7 years.
what are the alternatives? how do you cure the cancer? close as many banks as needed. close large parts of the financial sector because it is not productive itself but a parasite of production (derivatives, cds, carry trades, short selling..) focus on a few large projects. clean energy. health & education. new modes of transportation. introduce a new world currency. (now that hyperinflation seems to be unavoidable) and tax the hell out of those who got rich in the criminal ponzi schemes of the last 7 years.
I'm in Canada. Is Canada calmly sitting in the only lifeboat watching the great Titanic of the world financial system sink, or is it sitting on the top deck being lulled into apathy and misplaced faith by the string quartet? We are told our banks are the soundest in the world (the IMF even claimed Canada would sail through the storm with minimal damage.) With the way the banks are so intertwined in the world, how can our banks not be at serious risk? Your point of view (on how a Canadian should be reacting) would be greatly appreciated. P.S. We know you're a smart man Max because you aren't intimidated by sharing the limelight with a smart woman!! I only question your genius in the fact that you haven't married her yet!!
The Mark to Market Story is probably the biggest story so far this year. If you do not know what MTM is, I suggest you spend sometime reading at the least the wikipedia entry on MTM.
It is my belief MTM, specifically provision FAS 157 of the accounting rules, was started to deny foreign equity holders (China and the Arabs) the ability to realize true values on US denominated holdings which they were told were souring, like SubPrime,CDCs and the rest.. I believe MTM was akin to blocking the exits in a burning theater (or thought to be). MTM was easily the biggest factor to why the Equity Markets imploded to the levels they have. MTM literally forces the holders of assets, say mortgages, to "mark" their inventory to "market", sometimes daily. You can imagine what this does to one's balance sheet in a downward pricing market. MTM along with relaxation of the uptick rule created a tidal wave of selling (real and forced by MTM). It became so bad, a bank risks further MTM write downs by loaning anew which would expose even more of their portfolios which they have worked to protect to MTM. This is why the Credit Markets are frozen…MTM. Nobody is going to lend when to do so guarantees losses on existing held assets…and for no reason.
Mark to Market is probably the biggest scam of all. It exists mainly because of the way it has been sold. MTM promises "transparency". This claim is how they sold it and continue so. Fact is nothing could be farther from the truth. Transparency is a buzzword/conceptbeing sold by pirates.
How about letting the Markets balance themselves? How about telling Gordon Brown and Barrack Obama to take a f*cking walk down a short pier?
I am so sick of this helpless mentality by far too many well meaning people that Government must save us. That the problems are evil business people and greedy union workers.
The reason the CFR does not work, or the IMF, or the G20, is because you cannot "deal" with specific issues in specific cases from a 35,000 foot viewpoint. It is the height of arrogance and STUPIDITY for these intellectual aholes to think they know better than you how to run your life.
Power to the People.
Do you know when are they going to sell that gold? Collateral will be replaced by modern financial products
created by Geithner and Zoellick .Countries on the periphery are forced to take up new gigantic loans.
It requires the approval of the US Congress. That could take months, if at all. Plus, if they do manage to get authority to sell it then it would only be part of the annual Washington Agreement on Gold which limits sales to 500 tons per year. Finally, I'm not sure if the 3200 tons of gold that the IMF has is real or pledged, so any agreement by the signatory nations would presumably mean then that someone will have to deliver it . . . Stacy
Thanks,
anna
Palantiri,
That story is hilarious! I know that town because that is were my grandmother grew up. It's a quiet conservative town with a lot of white painted churches… a very pleasant place with nothing but decent friendly church-going people (not bible-thumping fanatics) It doesn't surprise me that all their loans were paid in full.
This is further proof of the war: savers vs. speculators.
Hey Ya'll
Was at G20 yesterday was looking out for any Maxites – no luck though. When I got home saw this clip on ITN news,: right at the end it sounds like Max shouting "Rise Up" – Was it? Anyway, just after a policeman shouts "outtahere" and I get pushed backwards shouting C***sucker. Later on I got hit with a bottle – blood but no stitches
<a href=”http://www.youtube.com/watch?v=ZqsSefQ_mQQ” target=”_blank”>http://www.youtube.com/watch?v=ZqsSefQ_mQQ
I also have to I say saw this funny clip of Aljazeera – reporter getting rushed by police line as he shouts "Easy Easy". Very balanced reporting under pressure. My respect for Aljazeera grows by the day.
<a href=”http://www.youtube.com/watch?v=Adi2i8qyerU” target=”_blank”>http://www.youtube.com/watch?v=Adi2i8qyerU
Viva la Funkalution