Stacy Summary: Here is the latest On the Edge!
If you prefer Youtube, the opening bit is below the fold:
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ref. max keiser – Get 6 mo’s free storage
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Rick Ackerman-
- Karl Denninger – Market Ticker
- The Big Picture
- Mish
- David Morgan
- King World News
- SmartKnowledge
- GoldCore
fiat money and the french revolution
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crash banksters – Buy Silver & gold
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@yuse
On The One with a BANG!!!
my tie matches the tie worn by the avatar in the intro by the way
@Supergeek – you are the champ of number one!
1994 interview with late Sir Goldsmith
http://www.askbutwhy.com/2009/08/sir-james-goldsmith-interview-on.html?ref=patrick.net
So what will happen to the Euro if Latvia explodes? The carry traders have been cramming all of this excess liquidity into the Euro under the assumption that Europe is recovering. Yeah right.
The implications of this Latvian situation are dire. If the Forex markets reverse it will be a fricken stampede. We might see the dollar rise along with gold again.
http://www.financialarmageddon.com/
Interesting collection of quotes…
Is this really the time that the dollar will step down as the reserve currency ?
Great Guest … Michael Hudson
He explains the IMF Slavery deal so well !
Great work Max !
This should be shown on MSM !
Fat chance of course !
Max, maybe you get hold of a German Channel and do an Iceland Special with Mike !
@all
The complete OTE episode is also available at PRESSTV:
http://www.presstv.ir/programs/detail.aspx?sectionid=3510532
@Max
You have demonstrated a proprietary algorithm that I have been using. There is a correlation between gold clothing accessories and the price of gold. The human subconscious will adorn themselves with the environment they perceive. More gold ties, bowties handkerchiefs, handbags etc. Just keep your eyes out and you will see it, Gold adornment everywhere. The top in gold just like 1980 will be gold head ware, hats and bandannas, full dresses and suits. I call it Zanadu effect. Usually accompanied by bad music called disco.
When Max wears a gold bandanna, time to sell gold.
http://jasonhare.com/wp-content/uploads/Image/jhcontent/xanadu.jpg
GREAT SHOW BTW
@Canada/JK – thanks for linking to the full ep!
Anyway to view without silverlight
@s.herbert
yeah… I have a knack for being in the right place at the right time… and as I have said before… maxkeiser.com is WHAT TIME IT IS!!!
That is the best use of the phrase, “until the pips squeak”, I have ever heard.
http://www.youtube.com/watch?v=Dywk-TtrmFI black shirted garden gnomes take over german town square
German ‘Wise Men’ fear credit crunch in 2010
…Germany’s leading institutes have warned that the pace of economic recovery is “unsustainable” and that the country’s banks may face a fresh crisis over the next year as bad debts surface in earnest…
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6339144/German-Wise-Men-fear-credit-crunch-in-2010.html
Thanks Max
Enjoyed that, but the question remains
W H E N ???????
Will those Brits Bast*rds get it!
Mike
The whole process was run by the US and now the IMF. Hudson confuses Swedes with swedish bankers, who are aligned with the IMF. Germans are not with the IMF, not do they want feudalism in the baltic states, so lumping them together I think is unfair. Everyone knows Brown is an IMF/US loyal banker so that is where the trouble starts.
To me it sounds the US is stoking conflict in Europe, and Hudson is their willing agent by being inaccurate in his attributing of responsibility.
Without action against the IMF in the end the bankers will win.
@maxkeiser I quite like the ties Alan Grayson wears when interrogating the terrorists.
So when will IMF-style austerity measures be imposed on the US? And who will play the role of the Swedish bankers in that melodrama?
@LloydG:
The IMF austerity for the US will come in the form of higher interest rates; sdr-manipulated dollar devaluation; and corporate carbon slavery. Congress is doing a lovely job of furthering the IMF agenda on the US behalf.
The old fox is not stupid. US War Architect Brzezinski on Afghanistan http://www.liveleak.com/view?i=717_1255782882
Germans are not with the IMF, not do they want feudalism in the baltic states, so lumping them together I think is unfair.
@MotherEarth:
Germany is a member nation of the EU and therefore a contributing member to the G20. Here is the membership roster for G20 which includes a seat for the IMF, World Bank, various BIS subsidaries, and EU headship:
http://en.wikipedia.org/wiki/G-20_major_economies
The decisions are being made by elite backers of elite banks. Same/Same. To claim German innocence and American insolence is to ignore reality.
Without action against the IMF in the end the bankers will win.
Of course! But the hydra has many heads. Cut off one, but remember the eye.
fascinating and devastating , i hope they also index the debts of angloamerican economies so they suffer the same fate . i hope baltic countries default on their debts. where is the justice in any of this ? i guess no point being naive ,this must be how murders happen ? or once it spreads ,wars begin ?
Jim Willie
End of the Petro-Dollar
Oct 17,2009
Andy & Jim discuss the end of the petro-dollar and the geopolitical/economic ramifications.
http://www.contraryinvestorscafe.com/player/player.php?utype=PU&pid=62242&aid=330
Excellent show very informative and interesting.
@snoot
Well apart from being waery of the non-merit based and political appointments within the IMF, Germany is quite clearly not looking for the IMF to be a force onto itself, something you only need to say to an institution looking to be exactly that…
“The currently large buffers of resources, financed by member countries’ currency reserves, should not invite the Fund to look for business beyond its genuine monetary mandate – unique
among IFIs – providing balance of payments support. In particular, we have strong reservations against any modification of the mandate that would allow Fund resources be used for direct financing of budget deficits. This would not only constitute a monetary financing of public spending, which is not allowed in the EU for good reasons, but also raises the question as to whether, in this case, Fund resources could still be treated as currency reserves by IMF members. Potentially needed budget support is a genuine task of the Multilateral Development Banks which are financed out of savings and not central bank reserves. Moreover, we are not convinced that the Fund should assume a general insurance function for public sector liabilities because this would risk setting the wrong incentives both for borrowers and investors. This would also require differentiating between country specific risks which is not compatible with founding principles of the IMF. Over time, we will rather need “exit strategies” from public sector financial support, when market forces are recovering and the impact of the financial crisis is fading..”
Not Same/Same at all..
Your guest explained the IMF slavery movement so well. Thank you for the information.
Just wait til those edicts are placed on the American people and we then still have the smug Goldman Sachs shits sitting behind desks defending their bonuses and the plans to “donate to charity” to keep the lid on the public’s perception of Goldman…….
what a very gloomy situation to have to go sleep on . thanx max for a great summary on what is obviously a very complex situation. some very powerful forces at work and play here .micheal hudson seems like a very good person
Funny had Hudson on the Quest list but skipped it cause he already had been on the show but this is MINDBLOWING!
Godamn fools! Criminals! F**cK Europe and the IMF Criminals!
@#2/southport
Here ya go micke hope this cheers you up, for you and fans of liverpool everywhere!!!
‘Don’t call Mick a human potato
Don’t call Mick a spud
Don’t call Mick a walking King Edward
Mick’s made of flesh and blood
He’s got his little office and he’s got his little chair
He’s got his little cactus in its pot
He’s got his little memos and he’s got his little job
And he wants a bit of Wembley up his you-know-what
He’s got his little pension and he’s got his little plan
He’s got his little policy in hand
He’s got his little lap-top and he’s got his little pen
And he wants a bit of Wembley up his Rio Grande
Don’t call Mick a human potato
Don’t fry Mick tonight
Don’t give Mick a chip on his shoulder
Mick’s doing alright
Mash it up, mash it up, mash it up Mick
Mash it up, mash it up, mash it up Mick
Mash it up, mash it up, mash it up Mick
Mash it up, mash it up, mash it up Mick
He’s got his little mortgage and he’s got his little lounge
He’s got his little bit of England to abort
He’s got his little telly and he’s got his little phone
And he wants a bit of Wembley up sad southport
He’s got his little garden and he’s got his little shed
He’s got his little mower on the grass
He’s got his little garage and he’s got his little car
And he wants a bit of Wembley up his Khyber Pass’
Apologies to Ian Dury.
the imf are evil, i wouldn’t sell them my manure even if they paid me in gold.
Superb information. Brutal.
@ Stacy,
Youtube playlists would be ideal for presenting these clips in one embedded object, rather than a series of them, which lightens the page load. It also means they play one clip after another in order, without having to start each one.
They also do a Video Log, which would be ideal for presenting Max’s latest news appearances in the same way, because the last video added to the log is the first one shown in the video playlist.
@MotherEarth:
I am not palliating America’s sins: never will. But the IMF is operating out of EU interests right now: America is pump and dump land. Why is the press absolutely and resolutely ignoring sdr manipulation ongoing through IMF auspices. Who stands to profit? Whatsit is upsit with your German pharma giants? Is the plan to deflate fractional reserve banking entirely? Why don’t we hear about BIS basel mandates in the Middle East and Asia? Why is the US press refusing to report on basel mandates coming up in January 2010? Why are all bankers being castrated for the sins of the few? Isn’t is obvious that the criminals can operate without banks or currency? Will the IMF outlive its usefulness anyway after the sdr controlled fiat collapse?
One ring to bring them all in (the dollar) and in the darkness bind them (sdr controlled banking collapse) in the land of Mordor (earth) where the shadows lie (words become shadow creatures)…
The Associated Press declared Obama “Kenyan-Born”! http://tinyurl.com/yl7gc2d
http://upload.wikimedia.org/wikipedia/commons/thumb/d/d0/7_garden_gnomes.jpg/792px-7_garden_gnomes.jpg imf gnomes of the world depart ! peasants unite !
golden imf gnome , + evil gnomes http://2.bp.blogspot.com/_csw7XuVHd3Q/SmgOZdryfmI/AAAAAAAACZ4/xPmHehDIIVs/s320/nazi+gnome.jpg http://aftermathnews.files.wordpress.com/2009/07/nazi-gnomes.jpg
Gotto repeat this cause it’s so good,
William Black interview – the Massive Fraud Exposed Vid http://tinyurl.com/yjzhj4q
@Mark@Berlin
TnX for Willie, always like to listen to him.
the Department of Gnomeland Security. http://www.gnomeland.co.uk/img139.jpg http://4.bp.blogspot.com/_xZrogjuKtjY/SmlTj0KdbNI/AAAAAAAAFsQ/nfOCUJmXiLk/s400/nazi-gnomes_1134291c.jpg
@snoot
>I am not palliating America’s sins: never will.
- No, afaik you always are.
>But the IMF is operating out of EU interests right now: America is pump and dump land.
- The IMF works in its own interests which have been the USs, Its own dictate international finanancial dependencies and the USses dictate chaos everywhere but in the US
>Why is the press absolutely and resolutely ignoring sdr manipulation ongoing through IMF auspices.
- Is the press suddenly independent?
>Who stands to profit? Whatsit is upsit with your German pharma giants? Is the plan to deflate fractional reserve banking entirely?
- My theory is that Trichet intended for Europe to bend with the US until the US snapped, which takes way to long.
>Why don’t we hear about BIS basel mandates in the Middle East and Asia?
- Because they hate Basel and what it stands for like two lobsters hanging from their balls. International banking is a coercion scheme.
>Why is the US press refusing to report on basel mandates coming up in January 2010?
- I refer to my previous answer
>Why are all bankers being castrated for the sins of the few?
- There are no naive bankers, or they would not be bankers.
>Isn’t is obvious that the criminals can operate without banks or currency?
- Eh, no.
>Will the IMF outlive its usefulness anyway after the sdr controlled fiat collapse?
- It started outliving it from about 5 years into its existence. It is a drugdealer, money being the drug. It makes everyone either a junk or a prostitute.
Max Keiser doing the Woop Woop Woop gave me a happy flashback to this http://www.youtube.com/watch?v=-y_1TmbMbi0&NR=1 hehehe
Death to Alexander….Death to Caesar …..Death to Charlemagne….Death to William the Conquer….Death to Peter the Great…..Death to Napoleon….Death to Bismark…..Death to Wilson….Death to Lenin, Stalin, Hitler, Churchill & Roosevelt……
It’s the STATE, Stupid!!!!…
What happens if a nation defaults on its foreign debt and refuses to pay the debt back – where the lender is a private owned bank?
There is off course the danger of never getting a new loan in the future. Since the whole economy is based upon borrowing – credit – that could be very bad in the long run. The danger of an invasion is out of the question, since a private bank does not have their own army – but that makes an interesting angel, would the nation the bank is in offer its military services to help collect the debt?
MotherEarth:
Not fair. I have not once palliated America’s sins, only pointed out European hypocrisy. Always is not an indication of a citation: always is a condition. You cannot surely know my condition on the basis of chance aquaintance.
Er, yes. The credit based system is being developed through the UN and R2P dogma and will be based on rebalancing trade deficit/surplus via carbon units. The crisis will become so acute that the ‘heroes’ will be sought for solace and wisdom. Geopolitical dislocation is advancing rapidly: already US states and cities are at the verge of collapse as well as East European states.
” The IMF works in its own interests which have been the USs”
The IMF is a front for elite interest which has colonized and utilized the US population to hegemonize the world through military and corporate criminal actions. The US is not an entity. Allianz Group is behind Goldman: JPMorgan Chase represents English royal influence. The US is a Corporate Front: the govt. works in synergy with Corporate and Banking interest representing private individuals.
There are no naive bankers, or they would not be bankers.
Substitute the words journalists or politicians in for bankers and the statement would read the same. The problem is not the position by the ethically bankrupt human.
>Why is the press absolutely and resolutely ignoring sdr manipulation ongoing through IMF auspices.
That was rhetoric for why the f*ck must we blame every recent occurrence influencing dollar value on Wall Street bankers, carry trade in dollars, or the Chinese, when the obvious answer is ignored.
The US dictates nothing. The US is not an entity. Governments are ficticious frauds based on reallocation of funds: theft. Taxes are not voluntary but fees paid to a mafia-structured criminal enterprise which had roots in Europe and potted trees in America. The potted plants are now blooming in India and Indonesia. Words are tile symbols one places at will to make mosaics to mesmerize or ideologue populations. Europe has been had. There will be no recovery because you refuse to address the real criminals.
Good luck.
THE STORY BEHIND CHINA STILL BUYING US TREASURIES
China’s Treasury purchases slip in August but rise for year http://tinyurl.com/ykawlnt
I said months ago that the focus on how many treasuries the Chinese holding and the effects on the Chinese economy are highly exaggerated by the MSM.
Even when the dollar would go to zero tomorrow the Chinese economy would not go bankrupt or somthing. Of cause it would cost them but it wouldn’t hurt them as much as the MSM wants you to believe, you getting duped.
What is much more important is to focus on the reserve currency status of the dollar[.
The MSM always like to blame some foreigner instead of looking at the domestic problems which are right in their face and which they are trying to avoid talking about.
I think that the Chinese are still buying sort of as security hedge against the U.S.A. pulling some militairy tricks.
They say; “He, U.S. don’t blame us we are buying your dog food dollars, see!” and at the same time they can dump these if the U.S. is threatening China with war or something along that line.
International organisations like the IMF are defined by their member states, they’re not independent entities, they’re vehicles for their member states to exercise influence.
The IMF is dominated first and foremost by the US, followed by the rest of the G7 states. The EU does not exercise the IMF votes of it’s members.
Members’ quotas and voting power, and Board of Governors
Major decisions require an 85% supermajority.[14] The United States has always been the only country able to block a supermajority on its own. However, the 27 member states of the European Union have a combined vote of 710,786 (32.07%).
Table showing the top 20 member countries in terms of voting power (2,216,193 votes in total):[15]:
State % voting rights
United States 16.79
Japan 6.02
Germany 5.88
France 4.86
United Kingdom 4.86
China 3.66
Italy 3.20
Saudi Arabia 3.17
——————————-
The IMF cannot do anything serious unless the US agrees to it.
@harry_w
Donnow if you understand but the idea is to implode the world economy using the U.S. dollar as bate. Than when every nation is in default they can borrow money at the IMF/U.S. who just issues and prints the money BUT – In effect they take over the souvereignty of each country by talking over all the resources of that country, Oil if they have, Railroads, Roads etc…
In case you didn’t know they play this IMF Criminal game for years now on 3th world countries but now they play this game with all countries around the world.
Can’t stress it enough…read the bloody peace:
IMF same exact four-step program.
1 Privatization ‘Briberization.’
2 IMF/World Bank capital market deregulation allows investment capital to flow in and out the “Hot Money” cycle.
3 Market-Based Pricing, a fancy term for raising prices on food, water and cooking gas
4 IMF and World Bank call their “poverty reduction strategy”: Free Trade- “The IMF riot.”
http://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
Hello Harry!
Read up about the Fourth Amendment recently passed by the IMF according to the conditions considered essential by Zhou:
http://www.imf.org/external/np/exr/faq/sdrfaqs.htm#q5
And quite interesting was the GEAB no 38 idea about limiting the US veto:
“Moreover, the EU is in the strongest position to negotiate with the IMF for the suppression of the US right of veto and for sharing power with the « re-emerging » powers.”
G20 structure has crystallized EU influence over world leadership and downplayed American hegemony as well.
Obama received the Nobel prize precisely because he supports a new order in the world with, in his words, “a new pivot”.
Thank you harry_w for clearing this up.
The IMF/BIS does NOT give orders to the US!
It takes orders from the US.
@Gordo:
Does your statement of faith indicate that the world will be delivered from evil with the downfall of the US dollar?
Four Gulf states renew commitment to monetary union http://tinyurl.com/yzx4w2v
IMF acknowledges GCC union:
http://www.imf.org/external/np/sec/pr/2009/pr09361.htm
GCC currency and central bank 2009?
http://www.arabianbusiness.com/541898-gulf-states-set-for-monetary-council-in-09
so nixon did the exact opposite of what he said was the best thing to do. they are really all alike.
180° between what they say and what they do.
http://www.newsweek.com/id/218233
The Obama-Dubya Connection
Obama is a lot more like Bush 43 than anyone involved—including Obama and Bush 43—would readily admit.
just to avoid Mike confusion, i wrote the 180° post
@Patrick,
just finished watching the interview with Sir James Goldsmith, it really compliments the on the edge latest offering. I must admit this morning has been quite enlightening. (that Tyson woman was infuriating)
OP
@ Youri,
“…the idea is to implode the world economy using the U.S. dollar as bate. Than when every nation is in default they can borrow money at the IMF/U.S. who just issues and prints the money BUT – In effect they take over the souvereignty of each country …”
Your idea? I’m aware of Greg Palast’s reporting, and the IMF’s history of devastation by ‘structural adjustment plans’.
I see that formula being applied to Iceland, largely on behalf of the UK and Netherlands, to force the Icelanders to pay off the Dutch and British taxpayers for compensating rate tarts who sought high interest rates in Icelandic banks.
I don’t see it being applied to the UK or US. I don’t see the US or UK being dictated to by the IMF. I do see them being warned by the Chinese, and occasionally the Germans who are usually exasperated at US and UK ways. Now even the Japanese seem to be seeking a new path under a new government.
@ frances,
I’ve read the details about the SDRs. They’re a basket of currencies, to insulate Asian and European exporters to the US, and commodity producers paid in $, against the weakness of those dollars.
This GEAB no.38 idea about limiting the US veto is nothing more than an idea. It doesn’t refer to any proposal, and no proposal would pass that US veto. It’s the same as the UN, veto powers are above the rules applied to others. And in the IMF, there is only one veto power.
So the EU may be in the strongest position “to negotiate with the IMF for the suppression of the US right of veto and for sharing power with the « re-emerging » powers.”, but they’ll still be told ‘No’. Ideas are just that, established facts are something else.
The EU hardly acts in concert anyway, it’s centred around an uneasy Franco-German alliance, and more often than not subverted by the UK tendency to act as a US trojan horse/5th column, e.g. holding a free floating currency inside the single market since the creation of the €uro.
The G20 is a talking shop, just another vehicle for individual states to trade influence and favours. Now India and Brazil and the Sauds get to come along to the party. Great.
Other than what was said in the citation, we can only guess why Obama received the Nobel prize. I thought it was laughable, but hardly an prize of great significance since Kissinger won it.
The IMF, the EU, the UN, they’re all creatures of the states that founded them and their current influence within those structures. They’re not independent entities, the only one close to it is the EU, and post-Lisbon that’s increasingly driven by trade-offs between the EU3 (France, Germany, UK).
This is the EU3 who played puppet negotiators with Iran on behalf of the US — because the US won’t speak to Iran, who meekly mumble about Israel when they use US economic and military aid to pulverise Palestinians, and who can’t even stick together when the US-UK go off to invade Iraq, or more recently go QE/ZIRP.
It’s not that I don’t think international diplomacy is rife with plots and conspiracies, it’s just I those also need to be reconciled with documented facts.
These institutional reforms are just a reflection of the decline of US (and UK) financial and economic power due to their own policies and mismanagement. They’re not the cause of decline, they’re the consequences of it.
“The EU hardly acts in concert anyway”
It was the EU passage of legislation that started the crank on the monkey grinder’s music to begin our lovely rite of passage to the dark age:
http://www.euractiv.com/en/financial-services/basel-ii-capital-requirements-directives/article-141423
“The EU’s Role in Our Financial Crisis”
http://www.telegraph.co.uk/comment/columnists/christopherbooker/3562598/The-EUs-role-in-our-financial-crisis.html
Yeats: The Second Coming:
http://www.online-literature.com/yeats/780/
“It’s not that I don’t think international diplomacy is rife with plots and conspiracies, it’s just I those also need to be reconciled with documented facts.”
Bloody bollocks. It was fine and dandy with all when Fisk made mention of a spurious Arabian/Chinese esoteric understanding concerning a gold-woven basket. So, it is ‘okay’ to believe what is a part and rumour of the status quo as long as the state calls the rational into being. Heaven’s help those not a part of the pillared colossus.
“These institutional reforms are just a reflection of the decline of US (and UK) financial and economic power due to their own policies and mismanagement. They’re not the cause of decline, they’re the consequences of it.”
Good. Then the world should see true justice and hope come with the change out of the UN/EU structure being lifted up to the heavens. But as the Nobel committee saw fit to reward Obama for his adherence to EU regulated protocol, I am not holding my breath.
Frances Snoot
Does your statement of faith indicate that the world will be delivered from evil with the downfall of the US dollar?
No. I hope that I am not that bone headed.
@Gordo:
I hope I’m not that bone-headed either.
But it seems like the message from the media is an indication that there are those who stand to profit who think we are: that bone-headed.
O.K., clearly the lenders are “predators” and all that. We have heard and seen examples of this. However, we are all responsible for our own actions no? People should also know and recognize a loan they can not or are less likely to pay back no? The key is those who made bad loans should not have been bailed out and neither should have those borrowed and defaulted. Et voila, comme cela, plus de moral hazard.
@ frances,
“It was the EU passage of legislation that started the crank on the monkey grinder’s music to begin our lovely rite of passage to the dark age:”
You misinterpret the significance of the EU Parliament, it’s really a powerless satire on democracy which sits beneath the EU Commission, and that sits beneath the Council of Ministers, who are merely representatives of the various EU states (and only some of those states, post-Lisbon treaty).
To pass a treaty first merely surrenders the initiative to the other signatories, that’s why the US waited and, as the article from the Telegraph indicates, wants to waive the Basel II rules they’d agreed to for bank capital accounting . e.g. the move from mark-to-market to mark-to-fantasy accounting.
The US agreed to it, and no agreement could or would have been made without the US being on board:
“…rules are set by the Basel committee , part of the Bank for International Settlements (BIS). On this committee sit representatives from Belgium, France, Germany, Italy, Luxembourg, Netherlands, Spain, Sweden, Switzerland, UK, Canada, Japan and US. The first set of international rules was known as Basel I.”
The only suspicious thing there is the presence of … Luxembourg?!?! The cuddly tax haven?
The idea in the Telegraph article that:
“At the heart of this catastrophe lies a drastic change made last year to banking regulations, which has led to the current freezing of the money markets. Without it, most of the banks that have collapsed, such as Lehman Brothers, might have survived.”
… is so ridiculous, and typical of English (or is it Anglo-Saxon) perspectives on the source of their financial woes.
Northern Rock was bankrupt, Lehman was bankrupt; they couldn’t pay their liabilities, they couldn’t borrow from anyone.
Blaming a set of accounting rules that both the US and UK had agreed to and weren’t even in force at the time misses that fundamental reality about Northern Rock and Lehman Brothers: Under any accounting rules they were as dead as the proverbial parrot.
You misinterpret the significance of the EU Parliament, it’s really a powerless satire on democracy which sits beneath the EU Commission, and that sits beneath the Council of Ministers, who are merely representatives of the various EU states (and only some of those states, post-Lisbon treaty).
You are right entirely, Harry. The real power always extends around the table at the banker board meetings. The G20 is really a meeting of the governors, or heads, of the central banks in the participatory nations. The rest is just entertainment for us peasants so we can feel empowered when we participate in our respective slots. But the vote did take place which set the regulations for the European banks. The banker bailout did have something to do with the European liquidity crisis, capital ratios, did it not? Well, it is all a matter of perspective. But I’m sure you would agree that the crisis was well-underway long before the fatted beast was carved for the benefit of Morgan-Chase?
http://www.msnbc.msn.com/id/23662433/
If the crisis really took its head the summer of 2007, then what precipitated the vexation at the banks? Why do we readers now become bleary-eyed with a succession of articles about the evils of bankers and none concerning the evil of the BIS hegemony? What necessitated those liquidity injections the summer of 2007?
“Northern Rock was bankrupt, Lehman was bankrupt; they couldn’t pay their liabilities, they couldn’t borrow from anyone.”
Ahhh. There goes the way of the free world. But not to worry. We can be assured that HAPPINESS is much more SECURE under the WISE MEN’S rule than any world where credit, er capital, is available to those who would only abuse the privilege.
After all, didn’t Stiglitz insist that GDP was a redundant term? We should all rally around group-happy-fuzzies now.
… is so ridiculous, and typical of English (or is it Anglo-Saxon) perspectives on the source of their financial woes.
Harry W., Are you French?
‘Northern Rock was bankrupt, Lehman was bankrupt; they couldn’t pay their liabilities, they couldn’t borrow from anyone.’
The principal cause of its demise was market concerns about the capital adequacy of the firm rather than liquidity, which were focused on the group’s ongoing exposure to illiquid assets.With its Q3 2008 results, which were much worse than expected, and an inability to raise new capital, market confidence collapsed and counterparties ceased to process ordinary day-to-day business with the firm (e.g. failed to make inbound payments into Lehman Brothers). Counterparties also imposed collateral requirements for intraday credit that made it increasingly difficult for Lehman Brothers to operate. Ultimately, this massive loss of confidence led to the firm’s insolvency.
http://www.cysec.gov.cy/Downloads/Events/EuropeanIssues/09_255.pdf
2nd clip of on the edge for 16/10 no workee … pls put on youtube ..
The poor in the rich countries will be subsidizing the rich in the poor countries.
@dan v,…….the irony is,..the poor countries are resource rich,….and the rich countries are resource poor,…….quite the con’,..isn’t it,.
Probably the best OTE yet. Michael Hudson is just brilliant as always, make him a regular if possible.
Actually I don’t understand why any government would save any banks? If they fail their business (which quite frankly I cannot comprehend, lending money with higher interest than you pay for savings?!), then those that fail should die off and make room for those that can survive and make better decisions.
Saving any failed bank will only lead them to fail soon again, since they have no risk with failing…
@ frances,
“…But the vote did take place which set the regulations for the European banks. The banker bailout did have something to do with the European liquidity crisis, capital ratios, did it not? Well, it is all a matter of perspective. But I’m sure you would agree that the crisis was well-underway long before the fatted beast was carved for the benefit of Morgan-Chase?
http://www.msnbc.msn.com/id/23662433/
If the crisis really took its head the summer of 2007, then what precipitated the vexation at the banks? Why do we readers now become bleary-eyed with a succession of articles about the evils of bankers and none concerning the evil of the BIS hegemony? What necessitated those liquidity injections the summer of 2007?”
The liquidity crisis wasn’t specifically European, it originated in the US housing downturn of 2006 and rising sub-prime defaults in 2007. It quickly spread from the US to Europe and the UK where banks and others had invested in derivatives based on those mortgages.
Central banks in the US, Europe and elsewhere began to take measures to add liquidity to markets and expand the range of assets they’d take as collatoral to include many of the derivatives that had become ‘illiquid’ because they were ‘toxic’ (i.e. collapsed in value and poisonous to the banks’ balance sheets).
The crisis emerged from the liquidation of a Bear Sterns hedge fund in New York, led by Merrill Lynch:
Merrill Revives Plan to Sell Bear Stearns Fund Bonds (Update1)
By Jody Shenn
June 19 (Bloomberg)
Bear Stearns Fund Collapse Sends Shock Through CDOs (Update2)
By Mark Pittman
June 21 (Bloomberg) — Merrill Lynch & Co.’s threat to sell $800 million of mortgage securities seized from Bear Stearns Cos. hedge funds is sending shudders across Wall Street.
A sale would give banks, brokerages and investors the one thing they want to avoid: a real price on the bonds in the fund that could serve as a benchmark. The securities are known as collateralized debt obligations, which exceed $1 trillion and comprise the fastest-growing part of the bond market.
Because there is little trading in the securities, prices may not reflect the highest rate of mortgage delinquencies in 13 years. An auction that confirms concerns that CDOs are overvalued may spark a chain reaction of writedowns that causes billions of dollars in losses for everyone from hedge funds to pension funds to foreign banks. Bear Stearns, the second-biggest mortgage bond underwriter, also is the biggest broker to hedge funds.
“More than a Bear Stearns issue, it’s an industry issue,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. Hintz was chief financial officer of Lehman Brothers Holdings Inc., the largest mortgage underwriter, for three years before becoming an analyst in 2001. “How many other hedge funds are holding similar, illiquid, esoteric securities? What are their true prices? What will happen if more blow up?”…
—————-
Next, the same events as covered by Ambrose Evans-Pritchard at The Telegraph, notable for his inclusion of warnings from the BIS (and British FSA) on the growth of the credit bubble and possible consequences of its collapse….
BIS warns of Great Depression dangers from credit spree
By Ambrose Evans-Pritchard
Published: 12:01AM BST 25 Jun 2007
…”Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and southeast Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a ‘new era’ had arrived”, said the bank.
The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.
“Behind each set of concerns lurks the common factor of highly accommodating financial conditions. Tail events affecting the global economy might at some point have much higher costs than is commonly supposed,” it said. [...]
In a thinly-veiled rebuke to the US Federal Reserve, the BIS said central banks were starting to doubt the wisdom of letting asset bubbles build up on the assumption that they could safely be “cleaned up” afterwards – which was more or less the strategy pursued by former Fed chief Alan Greenspan after the dotcom bust.
It said this approach had failed in the US in 1930 and in Japan in 1991 because excess debt and investment built up in the boom years had suffocating effects.
While cutting interest rates in such a crisis may help, it has the effect of transferring wealth from creditors to debtors and “sowing the seeds for more serious problems further ahead.”
The bank said it was far from clear whether the US would be able to shrug off the consequences of its latest imbalances, citing a current account deficit running at 6.5pc of GDP, a rise in US external liabilities by over $4 trillion from 2001 to 2005, and an unpredented drop in the savings rate. “The dollar clearly remains vulnerable to a sudden loss of private sector confidence,” it said.
The BIS said last year’s record issuance of $470bn in collateralized debt obligations (CDO), and a further $524bn in “synthetic” CDOs had effectively opened the lending taps even further. “Mortgage credit has become more available and on easier terms to borrowers almost everywhere. Only in recent months has the downside become more apparent,” it said.
CDO’s are bond-like packages of mortgages and other forms of debt. The BIS said banks transfer the exposure to buyers of the securities, giving them little incentive to assess risk or carry out due diligence. [...]
“Sooner or later the credit cycle will turn and default rates will begin to rise,” said the bank.
“The levels of leverage employed in private equity transactions have raised questions about their longer-term sustainability. The strategy depends on the availability of cheap funding,” it said.
That may not last much longer.
——————–
Credit crisis threatens markets as funds topple
By Ambrose Evans-Pritchard, International Business Editor
Published: 12:01AM BST 30 Jun 2007
“…The near-collapse of two Bear Stearns hedge funds occurred because derivatives taken out to hedge the risk did not work as expected, playing havoc with the computer model.
The Financial Services Authority has been warning for over a year that easy access to debt has led to a massive mispricing of risk. “As benign conditions go on, people are taking ever more complacent bets. They think they are diversified but they are taking on crowded trades. The downside risk is getting bigger, the impact higher,” said the FSA in February.
Investors paid scant attention as the world’s central banks began to bare their fangs. The US Federal Reserve raised rates 13 times to 5.25pc. The ECB is following suit. Japan, China, and India have all begun to drain the ocean of liquidity.
It has taken the Bear Stearns thunderclap to wake up the credit markets. The fiasco has revealed a dirty secret: that $1 trillion or more of CDOs and sub-prime mortgage debt is worth far less than its marked value.
By seizing $850bn in assets and triggering a sale, Merrill Lynch forced the markets to price the debt. The top “AAA” or “AA” tranches fetched just 85pc of face value. The sale was called off before it turned into a disaster.
The danger now is that the rating agencies will downgrade much of this debt, triggering mass liquidation by pension funds and institutions. …”
————–
Credit crunch will ‘shred investment portfolios to ribbons’
By Ambrose Evans-Pritchard
Published: 6:50PM BST 02 Jul 2007
“…The near collapse of two Bear Stearns hedge funds has lifted the rock on our 21st century mutant capitalism, exposing the bugs beneath to a rare shock of naked light.
When creditors led by Merrill Lynch forced a fire-sale of assets, they inadvertently revealed that up to $2 trillion of debt linked to the crumbling US sub-prime and “Alt A” property market was falsely priced on books.
Even A-rated securities fetched just 85pc of face value. B-grades fell off a cliff. The banks halted the sale before “price discovery” set off a wider chain-reaction. “It was a cover-up,” says Charles Dumas, global strategist at Lombard Street Research. [...]
“This is the big one: all investment portfolios will be shredded to ribbons,” said Albert Edwards, from Dresdner Kleinwort.
The BIS had warned days earlier that markets were febrile: “more risk-taking, more leverage, more funding, higher prices, more collateral, and in turn, more risk-taking. The danger with such endogenous market processes is that they can, indeed must, eventually go into reverse if the fundamentals have been over-priced. Such cycles have been seen many times in the past,” it said. [...]
…Because global liquidity flooded the bond markets in 2005, 2006, and early 2007, compressing yields to wafer-thin levels. It created an irresistible incentive to use debt.
What is the source of this liquidity? Take your pick. Goldman Sachs says oil exporters armed with $1,250bn in annual revenues have been the silent force, sinking wealth into bonds; China is recycling $1.3 trillion of reserves into global credit, a by-product of its policy to cap the yuan; Japan’s near-zero rates have spawned a “carry trade”, injecting $500bn of Japanese money into Anglo-Saxon bonds, and such; the Swiss franc carry trade has juiced Europe, financing property booms in the ex-Communist bloc. And, all the while, cheap Asian manufactures have doused inflation, masking the monetary bubble.
The deeper reason is the ultra-loose policy of the world’s central banks over a decade. They “fixed” the price of money too low in the 1990s, prevented a liquidation purge to clear the dotcom excesses, then kept rates too low again from 2003 to 2006. Belated tightening has yet to catch up.
Don’t blame capitalism. This is a 100pc-proof government-created monster. Bureaucrats (yes, Alan Greenspan) have distorted market signals, leading to the warped behaviour we see all around us.
As the BIS notes tartly in its warning on the nexus of excess, this blunder has official fingerprints all over it. “Behind each set of concerns lurks the common factor of highly accommodating financial conditions” it said.
Rebuking the Fed, it said Japan and Europe have turned sceptical of the orthodoxy that central banks can safely let asset booms run wild, merely stepping in afterwards to “clean-up”.
The strategy leads to serial bubbles, creates an addiction to easy money, and transfers wealth from savers to debtors, “sowing the seeds for more serious problems further ahead”.
If you think we are too clever now to let a full-blown slump occur, read the BIS report.
“Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and south-east Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a ‘new era’ had arrived,” it said. …
—————
The BIS was one of the very few international institutions warning of a credit bubble and potential crisis in the making, warning the likes of the Fed (and BoE) about their loose monetary policies.
It’s quite unfair to blame the BIS for a credit crisis that was first and foremost Made in the USA, or the Basel II regulations which BIS members all agreed to, or to present the BIS as a pawn of the EU, or the EU as a pawn of the BIS.
The underlying origin and emergence of the crisis is reasonably clear from both the Bloomberg and Telegraph articles I’ve linked to and quoted above. It was a credit bubble induced by lax monetary policies, which created rampant asset inflation (alongside stagnant wages, creating reliance on continual asset inflation, making more and more borrowers ‘sub-prime’), this further fuelled the credit bubble until it eventually burst, because when these mortgage backed securities were put into a forced sale on the open market, no-one would pay the value they were marked at. The crisis was precipitated because Merrill Lynch seized such assets from a Bear Sterns hedge fund and by selling them they created a market price.
Under mark-to-market accounting rules, that value undermined the ‘capital adequacy’ of all financial institutions around the world that had these assets books on their books at higher values (mark-to-model).
That’s why the US had to abandon mark-to-market accounting rules, and why the Fed and Treasury asset purchase and protection schemes either avoid setting or disclosing any ‘market’ price (or valuation) for these assets.
Harry W., Are you French?
No; nor am I anglo-saxon.
“The principal cause of its demise was market concerns about the capital adequacy of the firm rather than liquidity, which were focused on the group’s ongoing exposure to illiquid assets. With its Q3 2008 results, which were much worse than expected, and an inability to raise new capital, market confidence collapsed and counterparties ceased to process ordinary day-to-day business with the firm (e.g. failed to make inbound payments into Lehman Brothers). Counterparties also imposed collateral requirements for intraday credit that made it increasingly difficult for Lehman Brothers to operate. Ultimately, this massive loss of confidence led to the firm’s insolvency.”
It’s capital adequacy was a concern because it was based on illiquid assets (‘illiquid’ because no-one would buy them at the price they needed to be marked at). The article then goes on to explain how this inhibited Lehman’s access to credit leading to insolvency. As I said, ‘Northern Rock was bankrupt, Lehman was bankrupt; they couldn’t pay their liabilities, they couldn’t borrow from anyone.’
Lehman was as dead as the proverbial parrot.
The only way to keep it in operation would have been to turn it into a zombie bank, propped up by a state capitalisation (as subsequently happened to the other ‘too big to fail’ banks).
Mr. HarryW:
I truly respect your vast knowledge and intellect and you the time you have taken to converse with an ‘economic neophyte’ concerning the grave crisis which we have endured worldwide. But I am bound to disagree with you for two reasons. One: I am not burdened with the jurisprudence of an economic background at the onset of my reading. I was not biased in any way. In the chance reading of news, ignorance was bliss. I was not shackled by dogmatic terminology or faith in outcome. Two: I refuse to acknowledge most of the mustard-plastered treastices circulating concerning the crisis origin or cause as I believe there was a synergy of policy worldwide precipitating the collapse as a matter of agenda by governments working in tandem with the EU/US elite interests for private and personal criminal gain. That said, I admit to dabbling in conspiracy. I do not believe the crisis is ‘over’, I believe that the demise of the dollar is grossly misunderstood and that the effects are playing into a system of theft, murder, and outrage which can only be described as the holocaust of empathy and the birth of a bastard global state.
Another words: there is little notice of the very real possiblity of a vast reduction in the numbers of humans on this planet in the very near future and an overregard to the propping up of an international monetary system which is damn near defunct. While we argue about terms that have become meaningless, the very real preparations are not occurring that need to be undertaken to save the world’s people from deprivation and death. I believe that the aim of the elite control is to cull the population using whatever means necessary.
So I take offense to the disregard being afforded those who are manipulating the currencies and regulations from the center of the eye. The new system will not necessarily represent any facet of the familiar: in regards to paradigms, we are about to enter hell.
It seems the very plethora of verbiage in agreement in regards to the financial crisis meets one criteria: the basel mandates are not mentioned. It is with the onslaught of the next round of basel mandates that a whole new discourse will make real the hope of those to whom secrecy is tantamount to success.
We will see what we will see.
Mr. Harry W:
“No; nor am I anglo-saxon”
Do you want Snoots to DIE of curiosity, or are you going to TELL???
My guess is Belgium.
Harry Again:
Thanks for the interesting Pritchy-links.
Here’s some back-atcha (as SG says)
http://www.chasecooper.com/News-Regulatory-Basel-II-2008-09-15.php
“But where does this leave risk management – which is what we all are involved and believe in? The markets were seen as sound 18-24 months ago – now they are crashing around us. Risk management is no longer the new kid on the block, it is a mature process – at least credit and market risk are. Saying “Oops, sorry, but we did not think of liquidity risk” does not carry much weight.
Bear Stearns, Fannie Mae and Merrill Lynch all had large and impressive risk teams. What happened? Was their advice ignored, or were their models ineffective? If the former, executives should be facing jail, not mega-payoffs. If the latter, if our models only work in static markets, we should be coming up with answers now. Why pay for a major departmental function if it cannot do what it is supposed to?”
Why indeed? Nothing to do with waking up next to a horse-head?
Oh, here’s one on the ‘liquidity injections’ prior to Hotel California meets Lehman/Sterns:
http://en.mercopress.com/2007/08/11/massive-coordinated-liquidity-injection-to-sooth-markets
Cheers!
“The BIS, the ultimate bank of central bankers”
I love Pritchard-Evan’s wording on this one. The ultimate bank? The last resort? The one to fix things up after the sovereign central banks muck up the world?
Literary license!
The spider in the web does not deign agency upon the carrion.
“As the BIS notes tartly in its warning on the nexus of excess, this blunder has official fingerprints all over it. “Behind each set of concerns lurks the common factor of highly accommodating financial conditions” it said.”
Fingerprints? More like fang markings.
Everywhere you go you hear bankers causing havoc and screwing the average Joe over just to stuff cash into their pockets. Do we really need these blood suckers? Sounds like a war a going to break out in Iceland and Lativa.
@ frances,
“…I am bound to disagree with you for two reasons. One: I am not burdened with the jurisprudence of an economic background at the onset of my reading. I was not biased in any way. In the chance reading of news, ignorance was bliss. I was not shackled by dogmatic terminology or faith in outcome. Two: I refuse to acknowledge most of the mustard-plastered treastices circulating concerning the crisis origin or cause as I believe there was a synergy of policy worldwide precipitating the collapse as a matter of agenda by governments working in tandem with the EU/US elite interests for private and personal criminal gain. That said, I admit to dabbling in conspiracy. I do not believe the crisis is ‘over’, I believe that the demise of the dollar is grossly misunderstood and that the effects are playing into a system of theft, murder, and outrage which can only be described as the holocaust of empathy and the birth of a bastard global state…”
So you don’t agree because 1) you’re unimpaired by any knowledge of economics (which you equate to bias), and 2) because you dismiss explanations that don’t correspond to your belief that “there was a synergy of policy worldwide precipitating the collapse as a matter of agenda by governments working in tandem with the EU/US elite interests…”
The “…plethora of verbiage in agreement in regards to the financial crisis meets one criteria: the basel mandates are not mentioned…” because the prospective introduction of Basel II bank regulations was a minor issue compared to the actual collapse in derivative values in the markets that made them ‘toxic’ to bank balance sheets.
That decline had nothing to do with Basel II, and it wasn’t prompted by the BIS (or the EU). It followed from the decline in the US housing market and rise in mortgage delinquencies. The BIS was one of the very few international institutions to warn of the risks of a credit collapse.
Your view of elite manipulation through international organisations like the BIS and EU seems to be unrelated to the known facts and events as they unfolded — an article of faith rather than the result of analysis.
“My guess is Belgium.”
No, not Belgian. Does it matter? ;P
HarryW:
Good morning.
Vested interest really, complicated by bias, is clouding the vision of those who would to support the moribund financial system reform over the preservation of the real economy.
“Your view of elite manipulation through international organisations like the BIS and EU seems to be unrelated to the known facts and events as they unfolded — an article of faith rather than the result of analysis.”
The leaders at present in the financial fiasco are housed at the BIS, manning the Financial Stability Board and the Basel committee. I admitted to my own bias concerning my analysis and the underlying reason for my haste in asserting my perspective. It seems that the ‘Ultimate Bank’ has a schedule, out one orafice are words that the mandates will not be rushed, out another are the veiled threats and substantiated actions. It is not my opinion, though, that the basel mandates are to have a profound affect upon banking systems worldwide. It is obvious that the US banking system is insolvent. Further regulations during an economic depression are a travesty.
‘All financial institutions will find their positions complicated by the imminent introduction of the Basel II requirements on capital adequacy, which formally come into effect tomorrow in the EU, and on 1 January 2009 in the US. Mark Wheaton, head of management consultant Accenture’s UK risk management practice, said: “The typical bank will spend 50-100m implementing Basel II.”
http://www.independent.co.uk/news/business/news/banks-fight-to-rebuild-balance-sheets-767457.html
http://www.forexlive.com/48669/all/g20-tickle-fight-over-basel-ii
No, not Belgian. Does it matter? ;P
Heavens, no, Harry! Keep your secret! Mystery is the best spice for any dish.
Lazy speller: orifice Sorry about jarring spelling errors: it’s early.
What is troubling to me is the foxes are now proferring solutions and elimating competition in a bid for complete monopoly. It’s not the institution one need to beware: it’s the name of the individual. And I wonder why the clown act performed by the central banks was tolerated. It seems the inept performance benefitted the very Wise Ones who now stand to profit twice. Fancy that!