The fantastic four, again.
This is it.
100% correct, guaranteed.
http://www.reuters.com/article/governmentF...r=2&sp=true
Another grim turn as Greenspan blasts bailout
Fri Oct 19, 2007 3:51pm EDT
By Burton Frierson
NEW YORK (Reuters) - The outlook for ailing credit markets took a grim turn on Friday as former Fed chief Alan Greenspan blasted the industry's plan to bail itself out and stocks fell on new worries over bank profits and the economy.
Greenspan said in an interview with Emerging Markets magazine that a multibillion-dollar fund top banks are assembling to settle jittery financial markets may actually hurt rather than help.
...
Wachovia, Bank of America, Citigroup and JPMorgan Chase and Co are putting together a fund to bail out structured investment vehicles.
Full Version: Credit Derivative Meltdown In Progress
Pages: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47
can I just say that when the big one comes (very soon by the sounds of it), we won't be able to post for a few days I would imagine ,as parts of the t'interweb will go down imo.
so what will we do ? can we post some "We told you so's" in advance.
how will we discuss it all as it unravels ?
so what will we do ? can we post some "We told you so's" in advance.
how will we discuss it all as it unravels ?
Remember Paulson, the guy heading the Treasury, is the former Goldman Sachs CEO.
This superfund put forward by desperate investment bankers, with the active encouragement of a former, powerful and very desperate investment banker, for the desperate investment bankers, is a desperate and futile attempt to prevent this toxic financial waste from being sold at market prices, which will detonate the derivative bomb.
This is it, 100% correct, guaranteed.
http://www.ft.com/cms/s/0/0f79b248-7e5c-11...00779fd2ac.html
Greenspan questions ‘superfund’
By Krishna Guha in Washington and David Wighton in New York
Published: October 19 2007 17:12 | Last updated: October 20 2007 01:51
Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities.
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
His comments came amid growing speculation on Wall Street that the current Federal Reserve has mixed feelings about the superfund plan, which was put forward by Citigroup, Bank of America and JPMorgan Chase with the active encouragement of the US Treasury.
Analysts believe the Fed sees potential benefits in the plan in terms of preventing a possible firesale of assets, and does not think it is designed to allow financial institutions to avoid recognising losses. But they think the Fed is worried the plan could be feeding investor anxiety, and thinks markets might normalise faster if some assets in the troubled vehicles were sold in the market and prices were allowed to find a floor.
Serving Fed officials have not commented on the superfund plan, leading some to conclude they want to keep their distance. The Fed refused to comment on market speculation. The Treasury regards the Fed’s silence as simply reflecting the separation of powers and responsibilities between the institutions.
Mr Greenspan said on Friday: “What creates strong markets is a belief in the investment community that everybody has been scared out of the market, pressed prices too low and there are wildly attractive bargaining prices out there.” He added: “if you intervene in the system, the vultures stay away. The vultures are sometimes very useful.”
The former Fed chief did not say he opposed the superfund and did not advocate selling assets at firesale prices. He said the 1998 Fed-sponsored rescue of Long-Term Capital Management worked because it took a set of assets that would otherwise have been dumped at firesale prices off the market, allowing prices to find a true equilibrium. But he said today “we are dealing with a much larger market”.
Mr Greenspan’s doubts about the proposed fund are shared by some of the world’s most successful investors.
Warren Buffett told Fox Business Network that “pooling a bunch of mortgages, changing the ownership” would not change the viability of the mortgage instrument itself. “It would be better to have them on the balance sheets so everyone would know what’s going on.”
Bill Gross, chief investment officer of Pimco, the giant bond fund manager, has called the superfund idea “pretty lame”.
This superfund put forward by desperate investment bankers, with the active encouragement of a former, powerful and very desperate investment banker, for the desperate investment bankers, is a desperate and futile attempt to prevent this toxic financial waste from being sold at market prices, which will detonate the derivative bomb.
This is it, 100% correct, guaranteed.
http://www.ft.com/cms/s/0/0f79b248-7e5c-11...00779fd2ac.html
Greenspan questions ‘superfund’
By Krishna Guha in Washington and David Wighton in New York
Published: October 19 2007 17:12 | Last updated: October 20 2007 01:51
Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities.
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
His comments came amid growing speculation on Wall Street that the current Federal Reserve has mixed feelings about the superfund plan, which was put forward by Citigroup, Bank of America and JPMorgan Chase with the active encouragement of the US Treasury.
Analysts believe the Fed sees potential benefits in the plan in terms of preventing a possible firesale of assets, and does not think it is designed to allow financial institutions to avoid recognising losses. But they think the Fed is worried the plan could be feeding investor anxiety, and thinks markets might normalise faster if some assets in the troubled vehicles were sold in the market and prices were allowed to find a floor.
Serving Fed officials have not commented on the superfund plan, leading some to conclude they want to keep their distance. The Fed refused to comment on market speculation. The Treasury regards the Fed’s silence as simply reflecting the separation of powers and responsibilities between the institutions.
Mr Greenspan said on Friday: “What creates strong markets is a belief in the investment community that everybody has been scared out of the market, pressed prices too low and there are wildly attractive bargaining prices out there.” He added: “if you intervene in the system, the vultures stay away. The vultures are sometimes very useful.”
The former Fed chief did not say he opposed the superfund and did not advocate selling assets at firesale prices. He said the 1998 Fed-sponsored rescue of Long-Term Capital Management worked because it took a set of assets that would otherwise have been dumped at firesale prices off the market, allowing prices to find a true equilibrium. But he said today “we are dealing with a much larger market”.
Mr Greenspan’s doubts about the proposed fund are shared by some of the world’s most successful investors.
Warren Buffett told Fox Business Network that “pooling a bunch of mortgages, changing the ownership” would not change the viability of the mortgage instrument itself. “It would be better to have them on the balance sheets so everyone would know what’s going on.”
Bill Gross, chief investment officer of Pimco, the giant bond fund manager, has called the superfund idea “pretty lame”.
QUOTE(cgnao @ Oct 20 2007, 04:05 AM) 
Remember Paulson, the guy heading the Treasury, is the former Goldman Sachs CEO.
This superfund put forward by desperate investment bankers, with the active encouragement of a former, powerful and very desperate investment banker, for the desperate investment bankers, is a desperate and futile attempt to prevent this toxic financial waste from being sold at market prices, which will detonate the derivative bomb.
This is it, 100% correct, guaranteed.
http://www.ft.com/cms/s/0/0f79b248-7e5c-11...00779fd2ac.html
Greenspan questions ‘superfund’
By Krishna Guha in Washington and David Wighton in New York
Published: October 19 2007 17:12 | Last updated: October 20 2007 01:51
Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities.
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
His comments came amid growing speculation on Wall Street that the current Federal Reserve has mixed feelings about the superfund plan, which was put forward by Citigroup, Bank of America and JPMorgan Chase with the active encouragement of the US Treasury.
Analysts believe the Fed sees potential benefits in the plan in terms of preventing a possible firesale of assets, and does not think it is designed to allow financial institutions to avoid recognising losses. But they think the Fed is worried the plan could be feeding investor anxiety, and thinks markets might normalise faster if some assets in the troubled vehicles were sold in the market and prices were allowed to find a floor.
Serving Fed officials have not commented on the superfund plan, leading some to conclude they want to keep their distance. The Fed refused to comment on market speculation. The Treasury regards the Fed’s silence as simply reflecting the separation of powers and responsibilities between the institutions.
Mr Greenspan said on Friday: “What creates strong markets is a belief in the investment community that everybody has been scared out of the market, pressed prices too low and there are wildly attractive bargaining prices out there.” He added: “if you intervene in the system, the vultures stay away. The vultures are sometimes very useful.”
The former Fed chief did not say he opposed the superfund and did not advocate selling assets at firesale prices. He said the 1998 Fed-sponsored rescue of Long-Term Capital Management worked because it took a set of assets that would otherwise have been dumped at firesale prices off the market, allowing prices to find a true equilibrium. But he said today “we are dealing with a much larger market”.
Mr Greenspan’s doubts about the proposed fund are shared by some of the world’s most successful investors.
Warren Buffett told Fox Business Network that “pooling a bunch of mortgages, changing the ownership” would not change the viability of the mortgage instrument itself. “It would be better to have them on the balance sheets so everyone would know what’s going on.”
Bill Gross, chief investment officer of Pimco, the giant bond fund manager, has called the superfund idea “pretty lame”.
This superfund put forward by desperate investment bankers, with the active encouragement of a former, powerful and very desperate investment banker, for the desperate investment bankers, is a desperate and futile attempt to prevent this toxic financial waste from being sold at market prices, which will detonate the derivative bomb.
This is it, 100% correct, guaranteed.
http://www.ft.com/cms/s/0/0f79b248-7e5c-11...00779fd2ac.html
Greenspan questions ‘superfund’
By Krishna Guha in Washington and David Wighton in New York
Published: October 19 2007 17:12 | Last updated: October 20 2007 01:51
Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities.
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
His comments came amid growing speculation on Wall Street that the current Federal Reserve has mixed feelings about the superfund plan, which was put forward by Citigroup, Bank of America and JPMorgan Chase with the active encouragement of the US Treasury.
Analysts believe the Fed sees potential benefits in the plan in terms of preventing a possible firesale of assets, and does not think it is designed to allow financial institutions to avoid recognising losses. But they think the Fed is worried the plan could be feeding investor anxiety, and thinks markets might normalise faster if some assets in the troubled vehicles were sold in the market and prices were allowed to find a floor.
Serving Fed officials have not commented on the superfund plan, leading some to conclude they want to keep their distance. The Fed refused to comment on market speculation. The Treasury regards the Fed’s silence as simply reflecting the separation of powers and responsibilities between the institutions.
Mr Greenspan said on Friday: “What creates strong markets is a belief in the investment community that everybody has been scared out of the market, pressed prices too low and there are wildly attractive bargaining prices out there.” He added: “if you intervene in the system, the vultures stay away. The vultures are sometimes very useful.”
The former Fed chief did not say he opposed the superfund and did not advocate selling assets at firesale prices. He said the 1998 Fed-sponsored rescue of Long-Term Capital Management worked because it took a set of assets that would otherwise have been dumped at firesale prices off the market, allowing prices to find a true equilibrium. But he said today “we are dealing with a much larger market”.
Mr Greenspan’s doubts about the proposed fund are shared by some of the world’s most successful investors.
Warren Buffett told Fox Business Network that “pooling a bunch of mortgages, changing the ownership” would not change the viability of the mortgage instrument itself. “It would be better to have them on the balance sheets so everyone would know what’s going on.”
Bill Gross, chief investment officer of Pimco, the giant bond fund manager, has called the superfund idea “pretty lame”.
As soon as they start trying to hide it investors will lose further confidence...............whose next? even the thickie traders didn't like this one.
Barclays and RBS just joined the "club".
This is the worst monetary crisis in recorded history. It is global, it can't be stopped and it will ultimately result in the collapse of the international monetary system.
Central bank liquidity injections can only delay the unavoidable collapse and will provoke a devastating worldwide hyperinflation.
This is 100% correct, guaranteed.
http://www.telegraph.co.uk/money/main.jhtm...21/cnfed121.xml
Barclays and RBS line up Fed for £15bn
By Iain Dey
Last Updated: 11:59pm BST 20/10/2007
Barclays and Royal Bank of Scotland have lined up emergency funds of up to $30bn (£15bn) from the US Federal Reserve to bail out American clients caught up in the global credit crunch.
The Fed's board of governors wrote to both banks 10 days ago, granting them access to funds for customers "in need of short-term liquidity".
The letter to RBS made particular reference to investors holding mortgage-backed securities – which have been at the centre of the sub-prime crisis.
The request from the two banks is a stark reminder that the global liquidity freeze is far from over.
It is similar to those offered to Citigroup, Bank of America, JPMorgan Chase and Deutsche Bank at the height of the credit crunch.
This is the worst monetary crisis in recorded history. It is global, it can't be stopped and it will ultimately result in the collapse of the international monetary system.
Central bank liquidity injections can only delay the unavoidable collapse and will provoke a devastating worldwide hyperinflation.
This is 100% correct, guaranteed.
http://www.telegraph.co.uk/money/main.jhtm...21/cnfed121.xml
Barclays and RBS line up Fed for £15bn
By Iain Dey
Last Updated: 11:59pm BST 20/10/2007
Barclays and Royal Bank of Scotland have lined up emergency funds of up to $30bn (£15bn) from the US Federal Reserve to bail out American clients caught up in the global credit crunch.
The Fed's board of governors wrote to both banks 10 days ago, granting them access to funds for customers "in need of short-term liquidity".
The letter to RBS made particular reference to investors holding mortgage-backed securities – which have been at the centre of the sub-prime crisis.
The request from the two banks is a stark reminder that the global liquidity freeze is far from over.
It is similar to those offered to Citigroup, Bank of America, JPMorgan Chase and Deutsche Bank at the height of the credit crunch.
QUOTE(cgnao @ Oct 21 2007, 02:55 PM)
Central bank liquidity injections can only delay the unavoidable collapse and will provoke a devastating worldwide hyperinflation.
Cgano, I enjoy reading your posts - which I find enlightening - but I think the above statement is false as it overlooks a key aspect of the current situation.
Inflation will only be caused by the injection of liquidity if:
( a ) The interest rate is too low (or)
( b ) Insolvent companies are allowed to continue to trade freely (or)
( c ) The availability of more central bank funds fuels irresponsible lending to unaccountable entities (for example, the general public.)
We know that emergency funding from the BoE is lent at a penal rate - I presume that emergency lending by the Federal Reserve is also at a penal rate? Of course, establishing the level at which rates become penal isn't easy - especially not in the context of the carry trade - but, I'd guess, anything above the base rate would make many operations non-profitable... with the liquidity injection serving mainly to permit an unwinding of internationally leveraged deals?
QUOTE(grumpy-old-man @ Oct 19 2007, 11:13 PM)
can I just say that when the big one comes (very soon by the sounds of it), we won't be able to post for a few days I would imagine ,as parts of the t'interweb will go down imo.
so what will we do ? can we post some "We told you so's" in advance.
how will we discuss it all as it unravels ?
so what will we do ? can we post some "We told you so's" in advance.
how will we discuss it all as it unravels ?
I'll send you a letter.
QUOTE(DissipatedYouthIsValuable @ Oct 21 2007, 03:47 PM)
I'll send you a letter.
I thought they were on strike ? Maybe smoke signals ?
QUOTE(DissipatedYouthIsValuable @ Oct 21 2007, 03:47 PM)
I'll send you a letter.
Good idea... oh wait...
http://prudentbear.com/index.php?option=co...1&Itemid=55
QUOTE
It is today’s inescapable Credit Bubble Dilemma that enormous quantities of new Credit must be forthcoming – which entails intermediating Credits that are at this stage highly risky. For one, they’re of high risk because the Credit system is proceeding toward a major dislocation - one with major ramifications for the entire economic system. Inevitably, the flow of finance will be altered profoundly. Many individuals, market operators, business enterprises, and (local, state, and federal) governments are today poorly positioned and will be forced to adjust. This will amount to a momentous financial and economic adjustment, and we should not expect that it will proceed smoothly.
In the meantime, there is today apparently no alternative than massive banking system inflation. In just 12 weeks, bank Credit has ballooned $360bn. And as much as the unfolding mortgage debacle will impair the banking system, I fear it has already irreparably damaged “Wall Street finance.” If upper-end jumbo, alt-A and home equity loans are the looming disaster that I suspect (significantly larger in scope than subprime), the viability of the CDO and mortgage derivatives markets may soon be in doubt. The terrible earnings news this week from the mortgage insurers plays right into this debacle. If confidence falters in the GSEs… And the melt-up in Treasury prices only exacerbates MBS instability, while the (not so) quiet run on the dollar further reduces the appeal of U.S. mortgage paper to our foreign Creditors.
Stock market complacency over the past weeks was astounding. But if the markets head directly south from here, market confidence and the Fed’s capabilities will be tested simultaneously. Lower rates are definitely not the answer. Respite’s Over.
In the meantime, there is today apparently no alternative than massive banking system inflation. In just 12 weeks, bank Credit has ballooned $360bn. And as much as the unfolding mortgage debacle will impair the banking system, I fear it has already irreparably damaged “Wall Street finance.” If upper-end jumbo, alt-A and home equity loans are the looming disaster that I suspect (significantly larger in scope than subprime), the viability of the CDO and mortgage derivatives markets may soon be in doubt. The terrible earnings news this week from the mortgage insurers plays right into this debacle. If confidence falters in the GSEs… And the melt-up in Treasury prices only exacerbates MBS instability, while the (not so) quiet run on the dollar further reduces the appeal of U.S. mortgage paper to our foreign Creditors.
Stock market complacency over the past weeks was astounding. But if the markets head directly south from here, market confidence and the Fed’s capabilities will be tested simultaneously. Lower rates are definitely not the answer. Respite’s Over.
[quote name='cgnao' date='Oct 20 2007, 04:05 AM' post='816807']
Remember Paulson, the guy heading the Treasury, is the former Goldman Sachs CEO.
This superfund put forward by desperate investment bankers, with the active encouragement of a former, powerful and very desperate investment banker, for the desperate investment bankers, is a desperate and futile attempt to prevent this toxic financial waste from being sold at market prices, which will detonate the derivative bomb.
This is it, 100% correct, guaranteed.
150% Agree. Ol' snake-eyes has completely blown it with this one IMHO.........
Remember Paulson, the guy heading the Treasury, is the former Goldman Sachs CEO.
This superfund put forward by desperate investment bankers, with the active encouragement of a former, powerful and very desperate investment banker, for the desperate investment bankers, is a desperate and futile attempt to prevent this toxic financial waste from being sold at market prices, which will detonate the derivative bomb.
This is it, 100% correct, guaranteed.
150% Agree. Ol' snake-eyes has completely blown it with this one IMHO.........
QUOTE(cgnao @ Oct 20 2007, 04:05 AM)
Warren Buffett told Fox Business Network that “pooling a bunch of mortgages, changing the ownership” would not change the viability of the mortgage instrument itself. “It would be better to have them on the balance sheets so everyone would know what’s going on.”
So true. The 'Liquidity Enhancer' is a freaking large waste water facility with lots of huge & flaming turds floating in it -- but they hope you won't see them.
Has Ackermann talked to Buffet?
http://www.bloomberg.com/apps/news?pid=206...&refer=home
Now you possibly know who stopped lending money to other European banks around 09/08/07.
http://www.bloomberg.com/apps/news?pid=206...&refer=home
QUOTE
Oct. 21 (Bloomberg) -- Deutsche Bank AG, Credit Suisse Group and other members of the Institute of International Finance stopped short of endorsing an $80 billion plan supported by the U.S. Treasury to revive the commercial paper market.
...
To succeed in restoring investor confidence, the plan would have to provide ``transparency'' to the prices of financial assets, Ackermann said.
...
While ``we welcome market initiatives aimed at accelerating the restoration of confidence and liquidity in money and credit markets,'' Ackermann said, ``it's very important to create the transparency which is needed to restore confidence.''
...
To succeed in restoring investor confidence, the plan would have to provide ``transparency'' to the prices of financial assets, Ackermann said.
...
While ``we welcome market initiatives aimed at accelerating the restoration of confidence and liquidity in money and credit markets,'' Ackermann said, ``it's very important to create the transparency which is needed to restore confidence.''
Now you possibly know who stopped lending money to other European banks around 09/08/07.
QUOTE(DissipatedYouthIsValuable @ Oct 21 2007, 03:47 PM)
I'll send you a letter.
Alan Greenbubble himself thinks it won't work:
http://www.ft.com/cms/s/0/0f79b248-7e5c-11...00779fd2ac.html
http://www.ft.com/cms/s/0/0f79b248-7e5c-11...00779fd2ac.html
QUOTE
Alan Greenspan on Friday raised serious doubts over the plan to create a $75bn-plus investment fund to buy the assets of troubled investment vehicles, warning that it could prevent the market from establishing true clearing prices for asset-backed securities.
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
“It is not clear to me that the benefits exceed the risks,” the former chairman of the Federal Reserve told Emerging Markets magazine. He added, “The experience I have had with that sort of intervention is very mixed.”
The culprits are allowed to leave the ship before it sinks.
http://www.bloomberg.com/apps/news?pid=206...&refer=home
http://www.bloomberg.com/apps/news?pid=206...&refer=home
QUOTE
Oct. 22 (Bloomberg) -- Bank of America Corp., the second- largest U.S. bank, said Chris Hentemann, the top executive of its global structured products unit, left the bank Oct. 19.
Hentemann departed a day after Chief Executive Officer Ken Lewis said the Charlotte, North Carolina-based bank will scale back its investment banking operation.
Hentemann departed a day after Chief Executive Officer Ken Lewis said the Charlotte, North Carolina-based bank will scale back its investment banking operation.
News posted already somewhere else, but it is very relevant to this thread.
The system can't be saved. Lies and liquidity injections can only delay the unvoidable up to a point and will actually make the final crash much worse, Enron style.
We are heading at full speed towards a worldwide hyperinflationary collapse.
This is 100% correct, guaranteed.
http://www.bloomberg.com/apps/news?pid=206...id=a6dgIOAfMIrI
Citigroup SIV Accounting Looks Tough to Defend: Jonathan Weil
Oct. 24 (Bloomberg) -- The more Citigroup Inc. says about its structured investment vehicles, or SIVs, the more questionable the bank's accounting for them is beginning to look.
The system can't be saved. Lies and liquidity injections can only delay the unvoidable up to a point and will actually make the final crash much worse, Enron style.
We are heading at full speed towards a worldwide hyperinflationary collapse.
This is 100% correct, guaranteed.
http://www.bloomberg.com/apps/news?pid=206...id=a6dgIOAfMIrI
Citigroup SIV Accounting Looks Tough to Defend: Jonathan Weil
Oct. 24 (Bloomberg) -- The more Citigroup Inc. says about its structured investment vehicles, or SIVs, the more questionable the bank's accounting for them is beginning to look.
[quote name='cgnao' date='Oct 24 2007, 05:49 PM' post='821219']
We are heading at full speed towards a worldwide hyperinflationary collapse.
I see this consistently used now by you. Can you tell me in percentage terms what inflation you think will hit the UK and mainland Europe.
And if it does will what effect this will have on central bank rates.
Cheers
We are heading at full speed towards a worldwide hyperinflationary collapse.
I see this consistently used now by you. Can you tell me in percentage terms what inflation you think will hit the UK and mainland Europe.
And if it does will what effect this will have on central bank rates.
Cheers
QUOTE(cgnao @ Oct 24 2007, 05:49 PM)
Can you tell me in percentage terms what inflation you think will hit the UK and mainland Europe.
And if it does will what effect this will have on central bank rates.
Cheers
And if it does will what effect this will have on central bank rates.
Cheers
Real inflation in western countries is already in double digits. Soon this process will enter a deadly spiral and rocket out of control. With central banks forced to keep the monetary expansion going in a futile attempt to save the banking and global monetary system, eventual total loss of confidence in all currencies cannot and will not be avoided.
This is 100% correct, guaranteed.
Note how reported losses are growing bigger and bigger every day in exponential fashion, requiring central banks to inflate exponentially to delay the system collapse. There is a $500 trillion derivative iceberg out there, and banks are heading right towards it like the Titanic launched at full speed, broken rudder and drunken crew, while the passengers (investors) are having parties on the main deck.
http://business.timesonline.co.uk/tol/busi...icle2729018.ece
October 24, 2007
Merrill Lynch stuns with an $8bn subprime hit
Pressure builds on chief executive as the bank unveils Wall Street's biggest hit from risky mortgage debt
Merrill Lynch stunned Wall Street after it admitted to a far bigger loss than expected arising from toxic subprime mortgage-backed investments.
The investment bank said it would write-down $7.9 billion the third quarter of the year to cover bad investments and the falling price of mortgage-backed collateral it usedto raise money.
The write-down was far bigger than either the bank or Wall Street had expected. Last month, Merrill Lynch said that it had to write down $4.5 billion because some of the investments it made in bonds backed by mortgage assets were effectively worthless. Wall Street analysts expected that the bank would take a $7 billion charge, as a worst case scenario.
http://today.reuters.com/news/articleinves...IT-ANALYSIS.XML
NEW YORK, Oct 24 (Reuters) - U.S. banks may be underestimating how long and how far weakness stemming from residential mortgages will spread, and as losses mount their credit profiles risk deteriorating.
Merrill Lynch on Wednesday posted its first quarterly loss in six years after writing down $7.9 billion of bad bets on risky subprime mortgages and related securities.
The news sparked concerns that other banks may also be holding losses that have yet to be disclosed.
This belongs here.
http://www.bloomberg.com/apps/news?pid=206...&refer=home
http://www.bloomberg.com/apps/news?pid=206...&refer=home
QUOTE
Oct. 25 (Bloomberg) -- MBIA Inc., the world's biggest bond insurer, plunged the most in 20 years after the company reported its first loss, ended a share buyback and failed to quell speculation it will write down more of its mortgage portfolio.
...
``People began to question the viability of the business model and the tremendous credit exposure that MBIA has taken on to a wide range of structured credit risks,'' said David Einhorn, president of Greenlight Capital LLC in New York, who has short position on the stock.
...
``People began to question the viability of the business model and the tremendous credit exposure that MBIA has taken on to a wide range of structured credit risks,'' said David Einhorn, president of Greenlight Capital LLC in New York, who has short position on the stock.
Merrill and Wachovia are both in huge trouble. So now they want to merge. The hope is that bigger has more chance of surviving.
Remember, in excess of $500 trillion of nominal value will become real value when (not if, and it'll be soon) the OTC derivative mess blows up.
Sadly, the size of this monster is such that even if all banks in the world merged together, it would still not be enough to survive it.
Central banks know it and they want to save the system, but they can't.
Gold knows it. Central banks want to suppress it but they can't.
This is 100% correct, guaranteed.
http://www.ft.com/cms/s/0/435bf8f2-838c-11...00779fd2ac.html
Merrill chief floated Wachovia merger
By New York Times
Facing billions of dollars in losses from the subprime mortgage crisis, Merrill Lynch chairman and chief executive, Stanley O’Neal, floated the idea of a merger with a large bank, a foray that angered Merrill’s board and could cost him his job, according to people close to the beleaguered Wall Street firm.
Mr O’Neal broached the possibility of a merger with Wachovia, the bank based in Charlotte, N.C., without first getting the approval of Merrill’s board, a major breach of corporate protocol at a time when directors were already concerned about the company’s performance, these people said.
Remember, in excess of $500 trillion of nominal value will become real value when (not if, and it'll be soon) the OTC derivative mess blows up.
Sadly, the size of this monster is such that even if all banks in the world merged together, it would still not be enough to survive it.
Central banks know it and they want to save the system, but they can't.
Gold knows it. Central banks want to suppress it but they can't.
This is 100% correct, guaranteed.
http://www.ft.com/cms/s/0/435bf8f2-838c-11...00779fd2ac.html
Merrill chief floated Wachovia merger
By New York Times
Facing billions of dollars in losses from the subprime mortgage crisis, Merrill Lynch chairman and chief executive, Stanley O’Neal, floated the idea of a merger with a large bank, a foray that angered Merrill’s board and could cost him his job, according to people close to the beleaguered Wall Street firm.
Mr O’Neal broached the possibility of a merger with Wachovia, the bank based in Charlotte, N.C., without first getting the approval of Merrill’s board, a major breach of corporate protocol at a time when directors were already concerned about the company’s performance, these people said.
QUOTE(cgnao @ Oct 26 2007, 08:20 AM)
Merrill and Wachovia are both in huge trouble. So now they want to merge. The hope is that bigger has more chance of surviving.
Sounds like an MLEC kind of idea: pool all the turds in bigger and bigger pools and hope no one spots indvidual ones that have caught fire.
When the Empirce calls upon you, you might finally want to give in: Deutsche Bank Considers Participating in $80 Billion SIV Fund
QUOTE
Oct. 26 (Bloomberg) -- Deutsche Bank AG, Germany's biggest bank, is considering participation in an $80 billion plan supported by the U.S. Treasury to revive the commercial paper market, Chief Executive Officer Josef Ackermann said.
...
Ackermann also said he is convinced the financial markets will stabilize and Deutsche Bank is sticking to its 2008 earnings targets.
...
Ackermann also said he is convinced the financial markets will stabilize and Deutsche Bank is sticking to its 2008 earnings targets.
QUOTE(cgnao @ Oct 26 2007, 08:20 AM)
Remember, in excess of $500 trillion of nominal value will become real value when (not if, and it'll be soon) the OTC derivative mess blows up.
This is 100% correct, guaranteed.
This is 100% correct, guaranteed.
I'll bite.
So, I'll declare my prejudice first: I think OTC derivative trading is extremely dangerous - for a number of reasons - for example:
* OTC markets are difficult to regulate - hence insider trading is more likely to arise.
* OTC trades are likely to be covert... hence making it difficult to assess the stability of the financial system.
* Derivative trading based upon margin accounts introduces a credit risk that simply doesn't exist for stock market investment... with allegedly credit-worthy institutions given licence to maximise leverage and risk.
* IMHO, short derivative trades may have a dubious moral basis - encouraging profit through failure/misery... For example, it is technically feasible to hold a CDS without exposure to the loan - which, to me, screams "insurance fraud" - though (as far as I know) it isn't illegal.
Conversely, I do not see how it could be possible to make your prediction. With derivative trading, there are always two parties, right ( ? ), and the loss to one is a benefit to the other. The relevant question, in my opinion, has to ask if this stratospheric figure is biased heavily towards towards some financial institutions over others in the context of a plausible sequence of events. I doubt that it is even feasible to start to answer this question... though, of course, it might explain why governments have become so jumpy about terrorist attacks.... (or is that a conspiracy theory?)
New release out. Please compare the numbers in tables 1 and 2 from the new document
http://www.occ.treas.gov/ftp/release/2007-120a.pdf
Be scared. Be very scared. And if you think you are already scared, be scared some more.
This mess is out of control and will implode very soon. This is 100% correct, guaranteed.
http://www.occ.treas.gov/ftp/release/2007-120a.pdf
Be scared. Be very scared. And if you think you are already scared, be scared some more.
This mess is out of control and will implode very soon. This is 100% correct, guaranteed.
QUOTE (cgnao @ Aug 22 2007, 07:53 PM)
CREDIT DERIVATIVE MELTDOWN IN PROGRESS
From table 1 on page 23 of 34 in this PDF
http://www.occ.treas.gov/ftp/deriv/dq406.pdf
The biggest derivatives players are (pay careful attention to the "total derivatives" column in the pdf):
1 JPMORGAN CHASE BANK NA
2 BANK OF AMERICA NA
3 CITIBANK NATIONAL ASSN
4 WACHOVIA BANK NATIONAL ASSN
Now look who is borrowing money from the FED:
http://www.businessweek.com/ap/financialnews/D8R679MG0.htm
The Associated Press August 22, 2007, 1:37PM ET
Four major banks borrow from Fed
Four major banks said Wednesday they each borrowed $500 million from the Federal Reserve's discount window, lending weight to its efforts to restore liquidity to tight markets.
Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. each stressed they themselves have "substantial liquidity" and the ability to borrow money elsewhere.
From table 1 on page 23 of 34 in this PDF
http://www.occ.treas.gov/ftp/deriv/dq406.pdf
The biggest derivatives players are (pay careful attention to the "total derivatives" column in the pdf):
1 JPMORGAN CHASE BANK NA
2 BANK OF AMERICA NA
3 CITIBANK NATIONAL ASSN
4 WACHOVIA BANK NATIONAL ASSN
Now look who is borrowing money from the FED:
http://www.businessweek.com/ap/financialnews/D8R679MG0.htm
The Associated Press August 22, 2007, 1:37PM ET
Four major banks borrow from Fed
Four major banks said Wednesday they each borrowed $500 million from the Federal Reserve's discount window, lending weight to its efforts to restore liquidity to tight markets.
Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. each stressed they themselves have "substantial liquidity" and the ability to borrow money elsewhere.
QUOTE (cgnao @ Nov 1 2007, 07:29 PM)
New release out. Please compare the numbers in tables 1 and 2 from the new document
cgnao, could you give more detail as how to read and interpret these numbers you are refering to?
QUOTE (cgnao @ Nov 1 2007, 07:29 PM)
New release out. Please compare the numbers in tables 1 and 2 from the new document
http://www.occ.treas.gov/ftp/release/2007-120a.pdf
Be scared. Be very scared. And if you think you are already scared, be scared some more.
This mess is out of control and will implode very soon. This is 100% correct, guaranteed.
http://www.occ.treas.gov/ftp/release/2007-120a.pdf
Be scared. Be very scared. And if you think you are already scared, be scared some more.
This mess is out of control and will implode very soon. This is 100% correct, guaranteed.
What?
Where's the problem?
QUOTE (Goldfinger @ Nov 1 2007, 07:58 PM)
cgnao, could you give more detail as how to read and interpret these numbers you are refering to?
I will,
Table one contains the market value of the 25 largest banks in column one, and the value of the derivatives they control in column two. This ratio is the leverage of their operation.
The section to the right is a break down of the assets the banks control.
Table two contains the market value of the 25 largest holding companies (the companies that own the banks) in column one, as well as the total value of the derivatives they control in column two.
The section to the right is a break down of the assets the holding companies control.
There is nothing amiss here.
cgnao is probably trying to draw attention to the ratios of leverage,of something equally benign.
QUOTE (?...! @ Nov 1 2007, 08:05 PM)
I will,
Got it. I was looking at the wrong tables (at the beginning of the document). So, has anything changed since the last time we had a look at these tables?
If not, I take it, it is still simply all too leveraged and might go belly-up soon.
QUOTE (?...! @ Nov 1 2007, 08:58 PM)
What?
Where's the problem?
Where's the problem?
I guess if you can't see it now, you'll never see it.
However, not seeing or, more probably, not wanting to see it will not make you immune from the fallout.
This is 100% correct, guaranteed.
http://www.ft.com/cms/s/0/d0b545bc-88b1-11...00779fd2ac.html
Western banks suffer big losses
By Gillian Tett and Paul J Davies in London and Stacy-Marie Ishmael in New York
Published: November 1 2007 19:55 | Last updated: November 1 2007 19:55
Global investors succumbed to a new bout of jitters on Thursday amid concerns that a host of big western financial institutions are nursing additional, serious problems related to America’s troubled mortgage markets.
Equity markets tumbled and bond prices rose in the US and Europe. There were particularly sharp falls in the share prices of big banks and other financial groups, such as those that insure mainstream debt instruments – the so-called monoline insurance companies.
These signs of rising tension came as the Federal Reserve redoubled its efforts to ease conditions in the money markets. In its regular operations, the Fed added $41bn in temporary reserves to the banking system, the biggest one-day cash infusion since September 2001.
The amount was unusually large partly because the US authorities are now trying to push the effective money market borrowing rate lower after policymakers reduced their target yesterday by a quarter-percentage point, to 4.5 per cent.
But the cost of interbank funds on Thursday remained above the Fed target, suggesting investors remained uneasy. Analysts said the Fed’s decision to cut interest rates on Wednesday had offered little lasting reassurance to investors, given that the Fed signalled it was unlikely to produce any more cuts soon.
By midday the Dow Jones Industrial Average was 270 points lower at 13,660. The London FTSE 100 index closed down 135.5 points – 2 per cent – at 6,586.1, with similar falls in the German and French indices.
The biggest single reason for the decline was a sharp fall in the share prices of banks –from big US institutions such as Citigroup to European counterparts such as Barclays and Unicredit. This reflected fears that some of these institutions would soon unveil further credit write-offs.
Another focus of concern is the main US monoline companies such as MBIA, Ambac and Radian such as municipal or mortgage bonds, which are then sold to a host of mainstream investors.
Radian, a specialist mortgage insurer, saw its shares tumble by 19 per cent, after its first ever quarterly loss, due to mortgage-related problems. MBIA and Ambac, the two biggest monoline insurers, have also experienced dramatic share price declines, amid fears they too could be nursing unseen subprime-linked problems.
MBIA and Ambac vehemently deny that they face any pressures and stress their exposure to subprime assets is very small. But analysts fear that any rising subprime pressure could prompt these institutions to lose their top-notch credit rating, this could spark a new “domino effect”.
In particular, any downgrade of the monolines could cut the value of the bonds they have insured, which are held by a range of investors such as banks. “Investors in monolines will be waiting for the coming month’s housing data with trepidation,” said Gavan Nolan, analyst at Markit Group.
These concerns triggered a sharp rise in the cost of insuring monoline debt against default. This, in turn, raised the broader cost of buying protection against default of a basket of European and US bonds. “Fear is back,” said Marcus Schueler, credit analyst at Deutsche Bank.
The rate of delinquencies among subprime borrowers has accelerated sharply, according to data from RealtyTrac. The main ratings agencies slashed to junk the ratings on more than $100bn in subprime mortgage backed bonds.
So absolutely nothing new then?
Okay.
Okay.
QUOTE (Goldfinger @ Nov 1 2007, 08:58 PM)
cgnao, could you give more detail as how to read and interpret these numbers you are refering to?
JPM total derivatives Q4 '06 = $60 Trillion
JPM total derivatives Q2 '07 = $80 Trillion
Many others exhibit same or even faster exponential growth.
Remember notional value becomes real value when the losing party is forced to close the derivative contract.
This is 100% correct, guaranteed.
EDIT (Q2 '07, not 06)
QUOTE (A.steve @ Oct 26 2007, 09:58 AM)
I'll bite.
So, I'll declare my prejudice first: I think OTC derivative trading is extremely dangerous - for a number of reasons - for example:
* OTC markets are difficult to regulate - hence insider trading is more likely to arise.
* OTC trades are likely to be covert... hence making it difficult to assess the stability of the financial system.
* Derivative trading based upon margin accounts introduces a credit risk that simply doesn't exist for stock market investment... with allegedly credit-worthy institutions given licence to maximise leverage and risk.
* IMHO, short derivative trades may have a dubious moral basis - encouraging profit through failure/misery... For example, it is technically feasible to hold a CDS without exposure to the loan - which, to me, screams "insurance fraud" - though (as far as I know) it isn't illegal.
Conversely, I do not see how it could be possible to make your prediction. With derivative trading, there are always two parties, right ( ? ), and the loss to one is a benefit to the other. The relevant question, in my opinion, has to ask if this stratospheric figure is biased heavily towards towards some financial institutions over others in the context of a plausible sequence of events. I doubt that it is even feasible to start to answer this question... though, of course, it might explain why governments have become so jumpy about terrorist attacks.... (or is that a conspiracy theory?)
So, I'll declare my prejudice first: I think OTC derivative trading is extremely dangerous - for a number of reasons - for example:
* OTC markets are difficult to regulate - hence insider trading is more likely to arise.
* OTC trades are likely to be covert... hence making it difficult to assess the stability of the financial system.
* Derivative trading based upon margin accounts introduces a credit risk that simply doesn't exist for stock market investment... with allegedly credit-worthy institutions given licence to maximise leverage and risk.
* IMHO, short derivative trades may have a dubious moral basis - encouraging profit through failure/misery... For example, it is technically feasible to hold a CDS without exposure to the loan - which, to me, screams "insurance fraud" - though (as far as I know) it isn't illegal.
Conversely, I do not see how it could be possible to make your prediction. With derivative trading, there are always two parties, right ( ? ), and the loss to one is a benefit to the other. The relevant question, in my opinion, has to ask if this stratospheric figure is biased heavily towards towards some financial institutions over others in the context of a plausible sequence of events. I doubt that it is even feasible to start to answer this question... though, of course, it might explain why governments have become so jumpy about terrorist attacks.... (or is that a conspiracy theory?)
It is indeed possible to hold a CDS without exposure to the loan/bond. A CDS is mainly a trading rather than a hedging instrument these days.
QUOTE (cgnao @ Nov 1 2007, 10:15 PM)
I guess if you can't see it now, you'll never see it.
However, not seeing or, more probably, not wanting to see it will not make you immune from the fallout.
This is 100% correct, guaranteed.
http://www.ft.com/cms/s/0/d0b545bc-88b1-11...00779fd2ac.html
Western banks suffer big losses
By Gillian Tett and Paul J Davies in London and Stacy-Marie Ishmael in New York
Published: November 1 2007 19:55 | Last updated: November 1 2007 19:55
Global investors succumbed to a new bout of jitters on Thursday amid concerns that a host of big western financial institutions are nursing additional, serious problems related to America’s troubled mortgage markets.
Equity markets tumbled and bond prices rose in the US and Europe. There were particularly sharp falls in the share prices of big banks and other financial groups, such as those that insure mainstream debt instruments – the so-called monoline insurance companies.
These signs of rising tension came as the Federal Reserve redoubled its efforts to ease conditions in the money markets. In its regular operations, the Fed added $41bn in temporary reserves to the banking system, the biggest one-day cash infusion since September 2001.
The amount was unusually large partly because the US authorities are now trying to push the effective money market borrowing rate lower after policymakers reduced their target yesterday by a quarter-percentage point, to 4.5 per cent.
But the cost of interbank funds on Thursday remained above the Fed target, suggesting investors remained uneasy. Analysts said the Fed’s decision to cut interest rates on Wednesday had offered little lasting reassurance to investors, given that the Fed signalled it was unlikely to produce any more cuts soon.
By midday the Dow Jones Industrial Average was 270 points lower at 13,660. The London FTSE 100 index closed down 135.5 points – 2 per cent – at 6,586.1, with similar falls in the German and French indices.
The biggest single reason for the decline was a sharp fall in the share prices of banks –from big US institutions such as Citigroup to European counterparts such as Barclays and Unicredit. This reflected fears that some of these institutions would soon unveil further credit write-offs.
Another focus of concern is the main US monoline companies such as MBIA, Ambac and Radian such as municipal or mortgage bonds, which are then sold to a host of mainstream investors.
Radian, a specialist mortgage insurer, saw its shares tumble by 19 per cent, after its first ever quarterly loss, due to mortgage-related problems. MBIA and Ambac, the two biggest monoline insurers, have also experienced dramatic share price declines, amid fears they too could be nursing unseen subprime-linked problems.
MBIA and Ambac vehemently deny that they face any pressures and stress their exposure to subprime assets is very small. But analysts fear that any rising subprime pressure could prompt these institutions to lose their top-notch credit rating, this could spark a new “domino effect”.
In particular, any downgrade of the monolines could cut the value of the bonds they have insured, which are held by a range of investors such as banks. “Investors in monolines will be waiting for the coming month’s housing data with trepidation,” said Gavan Nolan, analyst at Markit Group.
These concerns triggered a sharp rise in the cost of insuring monoline debt against default. This, in turn, raised the broader cost of buying protection against default of a basket of European and US bonds. “Fear is back,” said Marcus Schueler, credit analyst at Deutsche Bank.
The rate of delinquencies among subprime borrowers has accelerated sharply, according to data from RealtyTrac. The main ratings agencies slashed to junk the ratings on more than $100bn in subprime mortgage backed bonds.
However, not seeing or, more probably, not wanting to see it will not make you immune from the fallout.
This is 100% correct, guaranteed.
http://www.ft.com/cms/s/0/d0b545bc-88b1-11...00779fd2ac.html
Western banks suffer big losses
By Gillian Tett and Paul J Davies in London and Stacy-Marie Ishmael in New York
Published: November 1 2007 19:55 | Last updated: November 1 2007 19:55
Global investors succumbed to a new bout of jitters on Thursday amid concerns that a host of big western financial institutions are nursing additional, serious problems related to America’s troubled mortgage markets.
Equity markets tumbled and bond prices rose in the US and Europe. There were particularly sharp falls in the share prices of big banks and other financial groups, such as those that insure mainstream debt instruments – the so-called monoline insurance companies.
These signs of rising tension came as the Federal Reserve redoubled its efforts to ease conditions in the money markets. In its regular operations, the Fed added $41bn in temporary reserves to the banking system, the biggest one-day cash infusion since September 2001.
The amount was unusually large partly because the US authorities are now trying to push the effective money market borrowing rate lower after policymakers reduced their target yesterday by a quarter-percentage point, to 4.5 per cent.
But the cost of interbank funds on Thursday remained above the Fed target, suggesting investors remained uneasy. Analysts said the Fed’s decision to cut interest rates on Wednesday had offered little lasting reassurance to investors, given that the Fed signalled it was unlikely to produce any more cuts soon.
By midday the Dow Jones Industrial Average was 270 points lower at 13,660. The London FTSE 100 index closed down 135.5 points – 2 per cent – at 6,586.1, with similar falls in the German and French indices.
The biggest single reason for the decline was a sharp fall in the share prices of banks –from big US institutions such as Citigroup to European counterparts such as Barclays and Unicredit. This reflected fears that some of these institutions would soon unveil further credit write-offs.
Another focus of concern is the main US monoline companies such as MBIA, Ambac and Radian such as municipal or mortgage bonds, which are then sold to a host of mainstream investors.
Radian, a specialist mortgage insurer, saw its shares tumble by 19 per cent, after its first ever quarterly loss, due to mortgage-related problems. MBIA and Ambac, the two biggest monoline insurers, have also experienced dramatic share price declines, amid fears they too could be nursing unseen subprime-linked problems.
MBIA and Ambac vehemently deny that they face any pressures and stress their exposure to subprime assets is very small. But analysts fear that any rising subprime pressure could prompt these institutions to lose their top-notch credit rating, this could spark a new “domino effect”.
In particular, any downgrade of the monolines could cut the value of the bonds they have insured, which are held by a range of investors such as banks. “Investors in monolines will be waiting for the coming month’s housing data with trepidation,” said Gavan Nolan, analyst at Markit Group.
These concerns triggered a sharp rise in the cost of insuring monoline debt against default. This, in turn, raised the broader cost of buying protection against default of a basket of European and US bonds. “Fear is back,” said Marcus Schueler, credit analyst at Deutsche Bank.
The rate of delinquencies among subprime borrowers has accelerated sharply, according to data from RealtyTrac. The main ratings agencies slashed to junk the ratings on more than $100bn in subprime mortgage backed bonds.
I would suggest that many of the above banks will be into the EFT trade so how would the EFT trade unwinding simultanously effect the price of gold should the banks to need to offload most of thier 600 tons. whats that actually $150 million flooding the market. mmmm maybe not so bad ..... could be buy, buy , buy time!!!
http://www.telegraph.co.uk/money/main.jhtm....xml&page=2
JPMorgan's total assets are 1.81% of their notional derivatives.
So, if for adverse market movements this delicate balance only moves by 1.81% in unfavourable direction (for JPMorgan), they're completely wiped out.
Is this correct?
So, if for adverse market movements this delicate balance only moves by 1.81% in unfavourable direction (for JPMorgan), they're completely wiped out.
Is this correct?
QUOTE (Goldfinger @ Nov 1 2007, 09:28 PM)
JPMorgans total assets are 1.81% of their notional derivatives.
So, if for adverse market movements this delicate balance only moves by 1.81% in unfavourable direction (for JPMorgan), they're completely wiped out.
Is this correct?
So, if for adverse market movements this delicate balance only moves by 1.81% in unfavourable direction (for JPMorgan), they're completely wiped out.
Is this correct?
More or less. Actually it will happen through defaults at the margin. All it takes to knock down this unstable house of cards is a few weaker counterparties defaulting on their derivative bets, and gone will be the big banks with high exposure, regardless of what central banks do.
This is 100% correct, guaranteed.
QUOTE (vfr @ Nov 1 2007, 08:27 PM)
I would suggest that many of the above banks will be into the EFT trade so how would the EFT trade unwinding simultanously effect the price of gold should the banks to need to offload most of thier 600 tons. whats that actually $150 million flooding the market. mmmm maybe not so bad ..... could be buy, buy , buy time!!!
http://www.telegraph.co.uk/money/main.jhtm....xml&page=2
http://www.telegraph.co.uk/money/main.jhtm....xml&page=2
? I would say many of these banks are short gold, and we will see the short squeeze of a century.
QUOTE (cgnao @ Nov 1 2007, 08:31 PM)
More or less. Actually it will happen through defaults at the margin. All it takes to knock down this unstable house of cards is a few weaker counterparties defaulting on their derivative bets, and gone will be the big banks with high exposure, regardless of what central banks do.
This is 100% correct, guaranteed.
This is 100% correct, guaranteed.
Exactly. Remember, as The Man said,
"If one big brokerage goes there is a very significant risk that they all will."
http://www.tickerforum.org/cgi-ticker/akcs...669&page=15
QUOTE (Captain Coma @ Nov 1 2007, 08:37 PM)
Exactly. Remember, as The Man said,
"If one big brokerage goes there is a very significant risk that they all will."
http://www.tickerforum.org/cgi-ticker/akcs...669&page=15
"If one big brokerage goes there is a very significant risk that they all will."
http://www.tickerforum.org/cgi-ticker/akcs...669&page=15
Or, from the Cheuvreux Gold Report (Jan 2006), on another issue (gold carry trade/shorts):
QUOTE
Sir Edward George, Governor of the Bank of England,
made the following comment to Nicholas J. Morrell, Chief Executive of Lonmin plc in
the aftermath of the Washington Agreement:
"We looked into the abyss if the gold price rose further. A further rise would have taken
down one or several trading houses, which might have taken down all the rest in their
wake. Therefore at any price, at any cost, the central banks had to quell the gold price,
manage it. It was very difficult to get the gold price under control but we have now
succeeded. The US Fed was very active in getting the gold price down. So was the UK."
made the following comment to Nicholas J. Morrell, Chief Executive of Lonmin plc in
the aftermath of the Washington Agreement:
"We looked into the abyss if the gold price rose further. A further rise would have taken
down one or several trading houses, which might have taken down all the rest in their
wake. Therefore at any price, at any cost, the central banks had to quell the gold price,
manage it. It was very difficult to get the gold price under control but we have now
succeeded. The US Fed was very active in getting the gold price down. So was the UK."
Mish's latest blog post seems to fit here:
http://globaleconomicanalysis.blogspot.com...-citigroup.html
and
In fact he is starting to sound like cgnao
http://globaleconomicanalysis.blogspot.com...-citigroup.html
QUOTE
"At the end of the third quarter, Citigroup posted $2.227 trillion in liabilities. This was more than any other American bank and possibly more than any bank in the world. A mere 5.4% decline in the value of Citigroup's assets would make Citigroup insolvent."
and
QUOTE
Debt insurance is only as good as the solvency of the guarantor. The market is starting to question the value of those guarantees. For additional proof you might want to consider looking at a chart of mortgage guarantor MBIA (MBI).
In fact he is starting to sound like cgnao
monkeyspanker is sort of spamming here.
QUOTE (Goldfinger @ Nov 1 2007, 08:35 AM)
? I would say many of these banks are short gold, and we will see the short squeeze of a century.
Fukcin 'ell mate just saw that you've posted 3700 posts about gold in 7 months
Must be fun round at yours 
QUOTE (Noel @ Nov 1 2007, 08:26 PM)
It is indeed possible to hold a CDS without exposure to the loan/bond. A CDS is mainly a trading rather than a hedging instrument these days.
That is what I understood... this seems very dangerous...
To my 'simple' thinking, this is rather like being able to insure your neighbour's house for your own benefit... multiple times.
Once that is possible, isn't there a huge incentive to accidentally encourage it to burn down?
A CDS, to me, seems an exceptionally vicious economic weapon, if one chose to use it as such.
QUOTE (Goldfinger @ Nov 1 2007, 10:35 PM)
? I would say many of these banks are short gold, and we will see the short squeeze of a century.
Actually, short or not it raises some points about the current situation.
As far as gold is concerned there has always been the risk that it would get squashed. When there are a number of financial gorillas in the cage the little guys are scared to rattle it. When the gorilla's arses are on fire though, well a few 10,000's small players can rule the market, those gorillas are far too preocupied with their own problems.
Didn't one of the big US banks just close their metals trading division in London?
QUOTE (Converted Lurker @ Nov 1 2007, 08:49 PM)
Fukcin 'ell mate just saw that you've posted 3700 posts about gold in 7 months Must be fun round at yours
Must be fun round at yours Around me? You'd better come up with some interesting gold news/discussions. Otherwise I might get bored.
QUOTE (OnlyMe @ Nov 1 2007, 09:43 PM)
Didn't one of the big US banks just close their metals trading division in London?
BofA.
QUOTE (Goldfinger @ Nov 1 2007, 11:47 PM)
Around me? You'd better come up with some interesting gold news/discussions. Otherwise I might get bored.
BofA.
BofA.
Know any more? Were they short, did they get burned in the process?
QUOTE (OnlyMe @ Nov 1 2007, 09:50 PM)
Know any more? Were they short, did they get burned in the process?
Don't quite remember. I think their metal trading was sort newly established anyway. They keep brokering, though.
Ladies and Gentlemen, prepare to defend yourselves! The mountain of garbage paper, weapons of mass financial destruction known as OTC derivatives, is shaking very hard.
You haven't seen anything yet.
Before the Plunge Protection Team fails they will burn the US dollar by ordering the creation of whatever unprecedented level of liquidity is required. Gold is going to $1050 at which point a battle royal will take place and thence on to $1650. The dollar is history.
The entire financial community is threatened as it has never been before. By world class greed they have killed themselves. “Not to worry, the big boys have all their money out” is the ill advice from others as to what you are about to witness.
Operation White Noise calls on the addition of liquidity as an act to protect the financial system and economy against the housing problem. That is spin for a meltdown in credit derivatives. Soon the OTC default derivatives are going belly up. At that point you know what has hit the proverbial fan. Wow, this is coming fast!
jsmineset.com
You haven't seen anything yet.
Before the Plunge Protection Team fails they will burn the US dollar by ordering the creation of whatever unprecedented level of liquidity is required. Gold is going to $1050 at which point a battle royal will take place and thence on to $1650. The dollar is history.
The entire financial community is threatened as it has never been before. By world class greed they have killed themselves. “Not to worry, the big boys have all their money out” is the ill advice from others as to what you are about to witness.
Operation White Noise calls on the addition of liquidity as an act to protect the financial system and economy against the housing problem. That is spin for a meltdown in credit derivatives. Soon the OTC default derivatives are going belly up. At that point you know what has hit the proverbial fan. Wow, this is coming fast!
jsmineset.com
QUOTE (cgnao @ Nov 1 2007, 08:23 PM)
JPM total derivatives Q4 '06 = $60 Trillion
JPM total derivatives Q2 '07 = $80 Trillion
Many others exhibit same or even faster exponential growth.
JPM total derivatives Q2 '07 = $80 Trillion
Many others exhibit same or even faster exponential growth.
Coming from the perspective of an simpleton amateur, it isn't clear to me what this figure actually means.
When trying to come up with a low brow interpretation for this, I think of "total derivatives" in the financial markets as being something like the sum of all possible liabilities for a bookmaker at the Grand National.
If this is a reasonable simplified mental model, it strikes me that a larger figure doesn't necessarily mean one that is more risky. It seems reasonable that a large number of these derivative positions should cancel each other out... and without the information about individual contracts, it is pretty meaningless to assess risk based upon the total figure. I suppose it all comes down to a question about how conservatively you imagine the big players manage their derivative exposure.
The derivative cancer has metastasized to every conceivable corner of the financial world.
There is no way the monetary system can be saved now.
Central bank liquidity injections are like morphine for a terminally ill patient. They kill the pain but can't prevent the cancer from killing the patient.
This is 100% correct, guaranteed.
http://www.businessweek.com/magazine/conte...htm#ZZZ1R0ZSG8F
MoneyGram International (MGI ), which provides global money transfers and bill-payment services, fell 11%, to 19, on Oct. 18 because of losses in mortgage-related investments. By Oct. 31 it had dropped further, to 15.95. MoneyGram traded as high as 30 in July. The huge slide has generated buzz that MoneyGram may be looking for a buyer. It has hired JPMorgan Chase (JPM ) to review its payment systems business, whose third-quarter income tumbled 12%. John Bendall, CEO of Hermitage Capital, which owns shares, says MoneyGram could either spin off its payment systems unit or sell the whole company, which he figures is worth 30 a share. Zaineb Bokhari of Standard & Poor's rates MoneyGram a buy. Its core business is "solid," he says, and its stock "attractive." Bokhari sees earnings of $1.52 in 2007 and $1.80 in 2008.
There is no way the monetary system can be saved now.
Central bank liquidity injections are like morphine for a terminally ill patient. They kill the pain but can't prevent the cancer from killing the patient.
This is 100% correct, guaranteed.
http://www.businessweek.com/magazine/conte...htm#ZZZ1R0ZSG8F
MoneyGram International (MGI ), which provides global money transfers and bill-payment services, fell 11%, to 19, on Oct. 18 because of losses in mortgage-related investments. By Oct. 31 it had dropped further, to 15.95. MoneyGram traded as high as 30 in July. The huge slide has generated buzz that MoneyGram may be looking for a buyer. It has hired JPMorgan Chase (JPM ) to review its payment systems business, whose third-quarter income tumbled 12%. John Bendall, CEO of Hermitage Capital, which owns shares, says MoneyGram could either spin off its payment systems unit or sell the whole company, which he figures is worth 30 a share. Zaineb Bokhari of Standard & Poor's rates MoneyGram a buy. Its core business is "solid," he says, and its stock "attractive." Bokhari sees earnings of $1.52 in 2007 and $1.80 in 2008.
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