Oh man, that would be a biggie. I think it's three, and then you're out.

Getting uglier. Repeat aloud 100 times: it's "contained".

http://business.guardian.co.uk/story/0,,2158522,00.html
German prosecutors investigate state-owned bank's executives
Kate Connolly in Berlin and Agencies
Thursday August 30, 2007
The Guardian

State prosecutors in Dusseldorf confirmed last night that they were investigating seven current and former executives of the state-owned German bank WestLB for dereliction of duty.

A spokesman for the judicial authorities in the city said that the managers were "suspected of not fulfilling their duty" to keep the board of directors properly informed in connection with huge losses in speculative share trading this year.

I think you'll find these days it's called "Chennai".

Honestly. Some people are such palestinians.

Another domino lined up.


http://business.timesonline.co.uk/tol/busi...icle2337377.ece
From The Times
August 28, 2007
State Street bank has highest exposure to conduits

State Street, the American bank, has been identified as having $22 billion (£10.9 billion) of exposure to asset-backed commercial paper conduits, the off-balance sheet vehicles that have caused severe problems for rivals in recent weeks amid turmoil in credit markets.

According to regulatory filings, the Boston-based bank has credit lines to at least six conduits, which account for 17 per cent of its total assets. That proportion makes State Street the most highly exposed bank to conduits among its European and American peers.

IKB, of Germany, which was forced to accept emergency funding for its conduit last month, had credit lines worth 15 per cent of its total assets. Deutsche Bank and WestLB each have exposure of 6 per cent.

These conduits – packages of retail and commercial loans financed by short-term debt raised in the commercial paper market – have become of increasing concern to investors amid fears that banks will have to fund the debt from their own balance sheets if these vehicles are unable to sell on their maturing paper.

The resignation last week of Edward Cahill, head of Barclays Capital’s collateralised debt obligation operations in Europe, has only added to fears that banks may face as-yet undisclosed liabilities from conduits and related investment vehicles.

Rather a long way from Australia to our old friend the Cayman Islands.

May I insist, this is not limited. 100% correct, guaranteed.

PS I quite like the underlined euphemism for credit derivative.

http://business.timesonline.co.uk/tol/busi...icle2353440.ece
August 30, 2007
Credit Agricole plays down credit risks
France's second-largest bank faces indirect exposure to almost €800m of credit instruments, but says impact is limited

Crédit Agricole insisted that international market turmoil was having a "limited impact" on its business, despite admitting that its investment bank was facing more than €670 million (£454 million) of potential losses on highly structured credit investments.

Took my dog Spike out for a walk this morning. He likes to have a highly structured credit investment before breakfast.

please do make sure he is not getting overcharged

As long as its "contained" in your poop scoop we don't mind!

dstars, I can't not comment any longer.

Can you please, please stop posting comments like this as my carpet is getting wet!

Would your doggie eat some of these sugar coated derivatives,also he gets a free helicopter to chew on inside the box

Get a pair of these. Most CDO bankers are wearing them these days...

I look forward to rubbing the nose of a banker in his highly structured credit investment and saying in a stern voice "Bad banker! Very bad!"

Private reasons... hmmm

http://www.forbes.com/afxnewslimited/feeds...afx4068218.html
ECB President Trichet cancels Jackson Hole appearance
08.30.07, 10:29 AM ET

LONDON (Thomson Financial) - European Central Bank president Jean-Claude Trichet has cancelled his visit to the economic symposium at Jackson Hole in the US.

An ECB spokesman said Trichet, who was due to fly to the event today, has withdrawn for 'private reasons'.

Trichet had not been expected to make any public comments at the event as ECB members typically do not make any comments in the week before a rate decision - the governing council's September monetary policy meeting takes place next Thursday. However analysts said his withdrawal may lead to speculation that he is remaining in Frankfurt to monitor events in the financial markets.

The Jackson Hole symposium in Wyoming will be closely followed to hear central bankers' views on the turbulence that has hit global markets in recent weeks.

US Federal Reserve chairman Ben Bernanke will deliver the opening speech at the event tomorrow.

Please review this article as it contains a rather good and synthetic picture of the monstrous mess central banks are in.

http://www.bloomberg.com/apps/news?pid=new...id=aSEguZCZ9ZpY
Unsafe at Any Rating, CDO Speeds to CCC From AAA: Mark Gilbert

Aug. 30 (Bloomberg) -- Watching the rating cuts trickle out of the derivatives forest is akin to searching for elephant dung on a path to try and work out how many pachyderms are in the jungle. There's clearly a herd in there. And it's probably much bigger than the ordure you have seen so far would suggest.

Last week, Standard & Poor's butchered the ratings on $3.2 billion of debt from structured investment vehicles spawned by Solent Capital Partners LLP in London and Avendis Group in Geneva. About $254 million was slashed from the top AAA grade to CCC+ and CCC -- slides of 16 and 17 levels, triggered by their investments in mortgage-backed bonds.

Think about that for a second. You left the office Tuesday owning a AAA rated security. By the time you got back to your desk on Wednesday morning, it was eight steps below investment grade in a category S&P defines as ``currently vulnerable to nonpayment.'' Try explaining that to your pension-fund trustees.

The rating companies are sifting through the billions of dollars of repackaged bonds and structured investment funds they graded in recent years. You can bet the world's biggest and smallest banks are also panning for risk in the structured investment vehicles and off-balance-sheet companies they casually sponsored in the gold rush.

...

Suppose regulators decide to play hardball on how the financial community marks to market, imposing rules that outlaw the existing freewheeling approach to how over-the-counter derivatives are assayed.

Moreover, suppose those new decrees come just as much of the underlying collateral is so tarnished as to be almost worthless compared with its initial valuation.

The ensuing carnage in the balance sheets of every financial-services company in the world would dwarf the damage wrought in the securities industry by the subprime crisis so far.

It will be hard enough for central bankers in the U.S. and Europe to set monetary policy at next month's meetings when they have no way of knowing how bad the financial storm might get and how much it might hurt economic growth. The more things that go boom in financial markets in the coming weeks, the harder the task facing the rate setters will get.

Be alarmed. Be very alarmed. It is just starting to spread to the sovereign bond market. This is a symptom that market participants are now realizing that hyperinflation is the only cure. When the bond market crashes, stocks will end in a carnage. You should all be in cash and gold now. By the way, GBP and EUR are no longer safe. CAD and CHF may be relatively safe for a bit longer but not much.

http://investing.reuters.co.uk/news/articl...ITAIN-GILTS.XML
British gilts tumble as stocks extend gains
Fri Aug 31, 2007 12:47 PM BST140

LONDON, Aug 31 (Reuters) - British government bonds fell on Friday as hopes the United States would take measures to ease the subprime lending crisis encouraged investors back into riskier assets.

What do you mean by "safe" ???

Do you mean falls, or instant, impending hyperinflation?

Why cash?

Gold I can understand - and it has perked up a bit today, but why cash?

Surely tangible assets (dare I say it, debt free property for example, and even stocks) are a little bit better in hyperinflation?

Actually, I would have thought that debt would be a good thing to hold in hyperinflation - and lots of it.

Borrow £200k today, be paid £200k next year for a cleaners job....

Ah, but remember, in cgnoa's world, a big mac will cost £1500, but wages will not increase. (a hyper mac?)

Erm, so how will that work then, unless we borrow the money at 0.000000001% over 400 years to pay for it? And will such low rates exist in a hyperinflationary environment....?

Beats me - best ask cgnoa.

I'm not sure I want to - I can never understand his answers anyway! ;-)

from cgnao's post above.
(http://investing.reuters.co.uk/news/articl...ITAIN-GILTS.XML)

There is something very nasty going on between the banks.
I am wondering if it's something specific, or if we are still talking 'woes' 'jitters' and 'worries'

Buy Big Macs?

This is probably a very stupid question but I fully admit to being one of the great financially unwashed, as Robert Beckman would describe us. (Years ago I used to subscribe to his Investors Bulletin, but that was when times were better than at present.)

My daughter was brain-damaged due to med neg and there is an ongoing case for compensation. If she wins, compensation will be in the order of ££millions. If she loses, we're stuffed. However, if or until liability is proved, we have been thrown onto state benefits (pension and child tax credits) as she requires 24 hr care and husband is 72 and retired. Meanwhile, our credit rating is good and I have approx £10,000 unused limits on credit cards. Would it be possible/advisable to max out credit cards to buy gold relying on hyperinflation to repay credit cards with silly money? Or have I no alternative but to sit by and watch as the global financial system implodes? (Savings are very small - under £1000 as all have been eaten up by trying to survive circumstances.)

Sorry again if this is a really stupid question - I'm reading hard and trying to learn but it's a slow business.

Very good.

Very sorry to hear about your daughter. I hope you get justice from the compensation system.

But to answer your question, no, it would not be sensible, IMHO. It may be a good bet, it may not. You could just as well spend the lot on lottery tickets.

cgnoa is a bit of a nutter - that is not to say he is wrong, but his strategies are, by his own admission, extreme. Check back through the forum - he has been spouting this stuff for years. How long could you pay the interest on your CCs while waiting for ARMEGEDDON BLAH BLAH BLAH?

You should only speculate with what you can afford to lose. Don't buy anything on credit. For instance, I believe that gold will go up big time at some stage. Do I know whether this is in October, next year, in 5 years or in 10? No, but it doesn't matter since I only buy with money I outright have and don't need in the short/midterm (a little like a pension payment).

To sum it up: If you don't have anything, you won't lose anything. And you don't possibly want to lose money you don't have! So, you better sit and watch. It's another thing if you want to buy a few Sovereigns (<£90 each) from your SAVINGS. But you might have to wait a long time for them to become a profit.

If you don't have any savings you should avoid debt of any form. In general, borrowing to speculate (a.k.a. gearing) is only a good idea if it is done by those who understand the huge risk it involves. Do a favour to yourself, don't even think about it.

Nice one cgnao.

Methinkshe, I never believed I would say this, but please take cgnao's advice!!

Thanks for all the advice. I appreciate that you don't mind helping the dummies like me.

I know it will sound as though mine must be the most unfortunate/litigious family in the UK but my son also has a work-related injury claim in process. Liability is admitted, quantum is yet to be decided. Solicitors are talking of IRO £100,000 which, to be honest, isn't much when you consider that he has more or less lost the use of his right arm at age 20. Anyway, would it be a good idea for him to invest in gold when his claim is settled? Not 100% gold, but a percemtage, bearing in mind that his employment prospects are not good and he will need a supplementary income for the rest of his life since his condition is degenerative and can only get worse.

Thanks for BEARing with me (sorry about pun) and for being so willing to share your knowledge and offer advice. I really appreciate it.

You need to talk to a financial adviser. Internet forums are no place for the sort of advice you need.


Gold will not give you an income - it is pretty unique in that respect. Have a punt, by all means - around 10% in precious metals has been considered prudent for centuries now. But as an insurance policy, not a get rich quick scheme or an income generator.

But please seek professional advice over the sums you describe.

Okay, thankyou. Sorry to have diverted this thread. I'll shut up now.

Only....just one more thing.

How do you know that your financial adviser is any good? I know there are meant to be independent financial advisers but from what I have been able to understand, they still get commission on the products they sell. How independent is that?

Other than personal recomendations from people you trust, I don't know either.

Do you have any family or close friends who have have used one?



edit: perhaps first you need to decide what you want from your investments, i.e. what type of investor are you?

Search the web yourself for info - but this link may be a start:http://www.psychonomics.com/research/a&s/profiling.htm

another edit - this link is a bit quicker! https://retirementplans.vanguard.com/VGApp/...tTypeOfInvestor

http://www.theglobeandmail.com/servlet/sto...PStory/Business
YIELD SIGNS



It's so nice that there's going to be a bail out today, but helping the subprime oxymoron isn't going to hit the spot IMHO.

This is far, far from over. It's not even the beginning. Libor spreads, gold lease rates are telling an ugly story. What do banks know and why are they so reluctant to lend to each other?

http://business.guardian.co.uk/story/0,,21...ed=networkfront
£800m hedge fund bail-out adds to City's jitters over Barclays
Richard Wray and Ashley Seager
Saturday September 1, 2007
The Guardian

Barclays Capital, the financial group's investment banking arm, yesterday bailed out a $1.6bn (£800m) hedge fund as the global credit squeeze and US sub-prime mortgage crisis claimed another victim.

....

Yesterday, the fall-out from the US sub-prime mortgage crisis continued to weigh on the world's banking sector, with interbank lending rates in London hitting their highest level in more than eight years - a sign that liquidity was drying up due to banks' reluctance to lend to each other.

The 3-month Libor rate was just under 6.7%, the highest since December 1998 in the wake of the collapse of US hedge fund Long-Term Capital Management.

Explainer: What is Libor?

Libor stands for the London interbank offered rate and is the main setter of interest in the London wholesale money market. Unlike bank rate, which is set directly by the Bank of England, Libor rates are set by the demand and supply of money as banks lend to each other to balance their books on a daily basis.

Libor covers lending from overnight up to one year and is used to price all kinds of financial instruments such as loans and floating-rate mortgages. Instruments in several other currencies are also priced relative to Libor, such is the size of the London market.

The focus now is on the three-month Libor rate. This normally trades at a small premium of around 0.15% over where the market thinks the bank rate will be in three months' time. So recently it had been hovering at just over 6%, since bank rate was widely expected to be raised from 5.75% to 6%.

But two weeks ago the rate shot up to 6.6% and has stayed around that level, hitting an eight-and-a-half year high of 6.7% yesterday. This reflected a reluctance by banks to lend to each other for fear that the counterparty may have problems related to the US sub-prime mortgage crisis and not be able to pay the money back.

The same thing happened in the eurozone money market yesterday, with the euro Libor three-month rate widening to its highest since May 2001 at 4.74%, compared with the European Central Bank's base rate of 4%.

"The size of the potential problems for the banking sector both in Europe and in the US is still very uncertain and might be very large and this is what is keeping interbank markets and money markets dislocated," said Marco Annunziata, chief economist at UniCredit.

Matthew Cairns, at Moody's research arm Economy.com, agreed: "Banks are holding back purely because there is a serious unknown here which has never existed before. I don't think money markets are convinced we've hit the worst of what is to come."

Hi Methinkshe-I can 100% sympathise with your situation as Ive been through it myself. I was very young and very naive when I finally got a settlement for a serious injury and had not got a CLUE where to turn with it frankly. Initially and against my better judgement I very stupidly allowed a so-called IFA to 'invest' my hardfoughtfor dosh. This was around 18 months pre 911 so you can sort of see where Im going with this. I was really REALLY lucky and had this indescribable 'gut feeling' nagging doubt or whatever you want to call it about the long term quality of the investment vehicles having study furiously after the fact (door horse stable bolted n'all that but its a happy ending I promise). The bottom line is I followed that gut instinct and pulled out all my dosh and waved ta-ta to around £6k losses which you might think is pretty mental and part of me said it was too. I then shopped around for a good deal and bought my home outright for cash from a housing market pessismist (well he was by the time I'd finished with him as I worked for a major housebuilder then so he took my word as gospel lol). 6 months later 2 planes got flown into the twin towers and we all know what happened to stock markets next!! Good call or what lol I have no debts and only do the work I choose to when it suits me and I suppose Im what you can call 'semi-retired' at 35 and I didnt fall into the trap of getting into debt when I really didnt need to.

So number 1) forget any kind of debt HOWEVER tempting it is 2) really REALLY do your homework and try to bear in mind that the VAST majority of IFAs are really just glorified salesmen 3) Do NOT be fobbed off with some ******** 'annuities' package instead of the lump sum payment-you want the readies, ALL of them if you've fought hard and long for them and you want control over what happens to them or at least to know they're not in the hands of some cvntforbrains fund manager. Look for as much diversity as you can but look long and hard for white elephants which amount to no more than overhyped cr@p and needless to say avoid like the plague. 4) Decide what you want the money to do for you in the short, medium and long term and develop a strategy. Bare in mind that even once the payouts are received there are Disability benefits to which one is entitled to regardless of income so there's always a bit of income to fall back on from that.

Theres a lot more besides and Im sure others can advise on this further but I hope thats a bit of help for you. BTW it may interest you to know that you can in fact buy quite small denomination bullion bars and coins not just of gold but also silver-my handy hint for the day, if you buy silver from merchants you normally have to factor vat into the price you pay...this does not however apply when purchasing it from ebay lol

Editted for quick PS: Be prepared because if you've fought a very long time for compensation its easy to lose sight of the fact that you cannot buy health and no amount of money changes the disabilities you have and on receiving the cash it can be quite a depressing experience facing the grim reality of that fact-no easy answer for that Im afraid just a sense of perspective about what the money will and will not do.

Bumping this back to thank you for your advice, Stonethecrows. I've already watched de-motivation set in with my son, and he was the one who was up at 6.30 am to work and not back til 6.30 pm. Now I have to drag him out of bed. It's very difficult because he loved his carpentry but he can no longer do it and no-one has suggested something else that he could be passionate about. Just told him to take whatever he can because earning money is more important than anything else. Well, I beg to differ. Anyway, enough thread-hogging - just wanted to thank you for your kind consideration. Also, it's a good thread anyway.

No good news, I suppose. Liquefy, liquefy, liquefy.
http://www.bloomberg.com/apps/news?pid=206...&refer=home

http://www.marketwatch.com/news/story/anot...mp;siteid=yhoof



None of it Citigroup's I trust

cgnao now writes for Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Then pay 1000% interest on your £200k loan and you're no better off.

Don't believe IR can reach 1000%?
Look at what happened in Germany, Argentina and Zimbabwe.

If the IR doesn't compnsate for inflation then the lender will not lend.
Periods where inflation exceeds the IR (like now) are actually quite rare.

Such fame and he has the time to post on little HPC, indeed we should all be honoured.

Huh?

With McDonald's you can now buy one and get one free.



McDonald's Inflation Fighter -- perhaps?

this'll help the buyers' strike...
http://www.ft.com/cms/s/0/bbcf8df0-5cb1-11...d2ac,s01=1.html

Exposure to derivatives



from http://itulip.com/forums/showthread.php?t=728

This is BAD! Sadly, it is a sign that the chain reaction is now well past the point of non-return.

The exposure of Wachovia is far bigger as you can see in the pdf referenced in my original post.

I beg you to listen to me, this is no ordinary crisis.

We are heading into a worldwide hyperinflationary slump as a result of Central Banks trying to sort out this monstrous mess. This is 100% correct, guaranteed.

http://www.reuters.com/article/bondsNews/i...10?rpc=401&
Wachovia says has exposure to leveraged loans
Mon Sep 10, 2007 10:48AM EDT

NEW YORK, Sept 10 (Reuters) - Wachovia Corp (WB.N: Quote, Profile, Research) Chief Executive Ken Thompson said on Monday the fourth-largest U.S. bank has potential exposure to loans funding leveraged buyouts that is roughly in line with its 3 percent to 4 percent market share in that area.

"We have not disclosed what it is, but I would say we have a 3 to 4 percent market share in the LBO business," Thompson said at a Lehman Brothers Inc. financial services conference. "If you apply that 3 to 4 percent to a number of $300 billion to $400 billion (for the market), that would give you a fairly good indication of what our exposure would be."

Many large banks have been stuck holding loans or debt intended to fund leveraged buyouts because risk-averse investors stopped buying such securities.

"Volatility in the fixed-income market is being felt at Wachovia," Thompson said. "We don't know when markets will normalize. Like the industry, we will mark positions to market, and will do it aggressively. But I'm confident that our marks will reflect liquidity discounts, not discounts on the underlying credit."





EDIT: typo

Do you really believe that a process of global meltdown has begun? That this particular recession/depression is like no other before and that instead of allowing deflation to take its natural course and wring debt out of the system, instead, for political reasons (global conspiracy theory type, one-world-government) major western governments will watch their currencies go to hell in a handcart rather than allow deflation to take its natural course?

Is that what you are predicting? I'm not arguing, just looking for clarity.

Yes. Precisely. I was hoping it would not get to this stage but it looks like there is no way out now.

Apart from the constant stream of bad news (despite the spin and doctoring by the powers that be), many indicators including but not limited to money supply, repos, interbank rates, gold are behaving in an unprecedentedly volatile and increasingly worrying fashion.