Cities face Occupy movement's 'mass day'
By the CNN Wire Staffupdated 2:43 PM EST, Thu November 17, 2011
http://www.cnn.com/2011/11/17/us/new-york-occupy/index.html?hpt=hp_t1
Showing posts with label the Fed. Show all posts
Showing posts with label the Fed. Show all posts
Thursday, November 17, 2011
NYC Demonstration
Cities face Occupy movement's 'mass day'
By the CNN Wire Staffupdated 2:43 PM EST, Thu November 17, 2011
http://www.cnn.com/2011/11/17/us/new-york-occupy/index.html?hpt=hp_t1
Never Say Never
| Never Say Never | ||||
| A Look at the Troubling Trend in French Bond Yields | ||||
French bond yields are soaring. That’s what the French might call “mauvaises nouvelles.” In fact, that’s what we might all call “bad news.” It’s one thing when chronic deadbeats like Greece and Portugal struggle to make ends meet. But it is something completely different when the economic pillars of the European economy start showing some cracks. In European trading today, the 10-year French government bond yield hit 3.71%, compared to 2.44% about two months ago. The rapid rise in rates is not that alarming...until you examine it in the context of German bond yields. Take a look at the chart below, which shows the difference (or spread) between French and German bond yields since the launch of the euro.
For most of this 12-year period, 10-year French government bonds offered yields that were roughly identical to German bond yields. In other words, bond investors considered French government bonds about as safe as German government bonds. After the credit crisis of 2008, French bond yields moved slightly higher than German yields, but not dramatically so. More recently, as investors have been dumping the bonds issued by Greece, Portugal, Italy and other “questionable” sovereign issuers, they have been flocking into both French and German bonds as a “flight-to-safety” trade. But look what has happened during the last few weeks. French bond spreads have “blown out,” as the traders would say. Apparently, bond investors are beginning to distrust French debt as a “slight-to-safety” asset, at least relative to German debt. So investors have been selling French government bonds very aggressively for the last several weeks, while continuing to buy German government bonds. As a result, French yields are soaring while German yields are falling, causing the spread between the two to skyrocket to a euro-era record high. The chart below shows the spread between 10-year French bonds and 10-year government bonds to be 1.50%. But that number is already out of date. Today the spread is 1.90%...and widening. So why should we care about all this? Because France is not Greece. Greece has the dubious distinction of spending more of its modern history in default or debt-restructuring than any other euro zone nation, according to the fascinating research of Reinhart & Rogoff. Since gaining its independence 182 years ago, Greece has spent 94 of those years in default or restructuring. Spain is a distant second on the list, having spent only 24% of the last two centuries in default. Then comes Austria at 17% and Germany at 13%. France has never defaulted during the last 200 years...at least not entirely. It did default on its WWI debts to the US. (So let’s put an asterisk next to that one). But in terms of across-the-board sovereign defaults, France has one of the cleanest 200-year records on the European continent. But that was then and this is now. In this present moment in history, the French governments lightly blemished credit history matters little. What matters a lot is that French banks are holding hundreds of billions of euros worth of Greek, Portuguese, Spanish and Italian sovereign debt — the very stuff that is plummeting in value. If the big French banks are in trouble, the French government’s finances will also be in trouble. At least that’s what the math suggests. And it is this frightening math that is causing bond investors to load up on insurance against a default by the French government...as remote a possibility as that may seem.
Thus, the chart above is somewhat shocking. It presents the price of insuring various government bonds against default. (This insurance is called a credit default swap, or CDS). The higher the bar on the chart, the more expensive the insurance. And there’s only one reason why the price of any kind of insurance rises: The underwriter believes the likelihood of a claim has increased. Thus, the price of insuring a 5-year French government bond is now higher than the price of insuring various “junk” and “near-junk” sovereign borrowers! France still carries a AAA rating. Despite that attribute, insuring its debt is more expensive than insuring the “junk” debts of Indonesia and the Philippines. The owners of French government debt can still take some comfort from the fact that French CDS prices are not as high as Kazakhstan CDS prices. But the gap is narrowing. The steep upward trajectory of French bond prices is signaling a new phase of the euro crisis — a phase that may drive multiple sovereign borrowers into default and may claim the life of at least one major Western currency. Therefore, to repeat the quote from James Grant we published in yesterday’s edition: “There are better ports in a monetary storm than government securities denominated in paper money.” | ||||
Saturday, October 1, 2011
Fed Bernanke - the Class of 1926 Professor of.......?
So, he is the professor making everyone to cry except the 1%?
The article shown below about the house price does not help anyone since it is already done the damages to entire Americans and America as well as globally even though some would be now realizing realities of how illogical financial loophole is. The real problem of the massive housing bubble-burst started with Greenspan, and Fed Bernanke and entire world is dealing with his intentional mess.
~~*~~
Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday.
The survey conducted by the Professional Risk Managers’ International Association for FICO, found that 49 percent of respondents do not expect housing prices to rise back to 2007 levels for another nine years. Only 21 percent of respondents said they would.
The findings, which authors called “a decidedly pessimistic outlook”, are a sharp reversal from cautious optimism the survey respondents expressed late last year and in early 2011.
In addition, 73 percent of surveyed bankers say they expect mortgage defaults to remain elevated for at least another five years. And 46 percent believe mortgage delinquencies will increase over the next six months.
Only 15 percent of respondents expect mortgage delinquencies to decline during that period.
“While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation,” said Andrew Jennings, chief analytics officer at FICO.
Bankers concerns spread beyond the housing market.
A large number of respondents says they also expect to see an uptick in delinquencies on auto loans, credit cards and student loans.
Small businesses are expected to continue face a challenging credit environment. More than one-third of respondents forecast an increase in delinquencies on small business loans.
Bankers also appear to be pessimistic about recovery in consumer spending, with 64 percent of respondents expecting credit card usage to remain below pre-recession levels for at least five more years.
Half of the respondents expect credit card balances to increase over the next six months, due to higher spending by some households and smaller monthly payments by others.
Monday, January 3, 2011
Tea Party
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Wednesday, December 29, 2010
Monday, December 27, 2010
Thursday, December 9, 2010
Fed Reserve
Link: http://www.huffingtonpost.com/rep-bernie-sanders/a-real-jaw-dropper-at...
http://www.huffingtonpost.com/rep-bernie-sanders/a-real-jaw-dropper-at-the_b_791091.html
Sen. Bernie Sanders
Posted: December 2, 2010 12:43 PM
A Real Jaw Dropper at the Federal Reserve
At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed, and the American people now have this information.
It is unfortunate that it took this long, and it is a shame that the biggest banks in America and Mr. Bernanke fought to keep this secret from the American public every step of the way. But, the details on this bailout are now on the Federal Reserve's website, and this is a major victory for the American taxpayer and for transparency in government.
Importantly, my amendment also required the Government Accountability Office to conduct a top-to-bottom audit of all of the emergency lending the Fed provided during the financial crisis to be completed on July 21, 2011, which will take a hard look at all of the potential conflicts of interest that took place with respect to this bailout. So, in many respects, details that the Fed was forced to divulge on Wednesday about the $3.3 trillion in emergency loans that until now were totally kept from public scrutiny, marked the beginning, not the end, of lifting the veil of secrecy at the Fed.
After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed's multi-trillion-dollar bailout of Wall Street and corporate America. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses.
What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.
We also learned that the Fed's multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald's, Caterpillar, Harley Davidson, Toyota and Verizon.
Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks -- Deutsche Bank and Credit Suisse -- which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.
Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.
Has the Federal Reserve of the United States become the central bank of the world?
The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college. Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis they started never happened.
What this disclosure tells us, among many other things, is that despite this huge taxpayer bailout, the Fed did not make the appropriate demands on these institutions necessary to rebuild our economy and protect the needs of ordinary Americans.
For example, at a time when big banks have nearly a trillion dollars in excess reserves parked at the Fed, the Fed did not require these institutions to increase lending to small- and medium-sized businesses as a condition of the bailout.
At a time when large corporations are more profitable than ever, the Fed did not demand that corporations that received this backdoor bailout create jobs and expand the economy once they returned to profitability.
I intend to investigate whether these secret Fed loans, in some cases, turned out to be direct corporate welfare to big banks that used these loans not to reinvest in the economy but rather to lend back to the federal government at a higher rate of interest by purchasing Treasury Securities. Instead of using this money to reinvest in the productive economy, I suspect a large portion of these near-zero interest loans were used to buy Treasury Securities at a higher interest rate providing free money to some of the largest financial institutions in this country. That is something that we have got to closely examine.
At a time when Wall Street executives are now making more money than before the financial crisis, how many big banks that paid back TARP funds in 2009 to avoid limits on executive compensation received no-strings-attached loans from the Federal Reserve?
At a time when millions of Americans are paying outrageously high credit card interest rates, why didn't the Fed require credit card issuers to lower interest rates as a condition of the bailout?
The four largest banks in this country (Bank of America, JP Morgan Chase, Wells Fargo, and Citigroup) issue half of all mortgages in this country. We now know that these banks received hundreds of billions from the Fed. How many Americans could have remained in their homes, if the Fed required these bailed-out banks to reduce mortgage payments as a condition of receiving these secret loans?
We have begun to lift the veil of secrecy at one of most important agencies in our government. What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people
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http://maxkeiser.com/2010/12/09/the-fed-and-the-caymans-new-jaw-dropping-bailout-details/The Fed and the Caymans: New ‘Jaw-Dropping’ Bailout Details
December 9, 2010 • 9:57AM
Analyses including some from the staff of Sen. Bernie Sanders, whose amendment has forced the Federal Reserve to release the details of its bank bailouts since mid-2008, continue to show that “TARP was just pocket change” and that the bailout was in the many, many trillions —perhaps in the range of $16 trillion total. Much of it went to foreign financial firms, and/or was loaned by the Fed against crap collateral, in violation of the Federal Reserve law.
Two aspects of these reports are most shocking. First, foreign banks and financial corporations tapped 4,200 different loans/securities purchases under 13 different bailout programs of the Fed for $3.8 trillion total: the credit/financial arms of Toyota, Mitsubishi, Nissan, BMW, VW, Honda; the central banks of Mexico, Bavaria, and Korea, and the Arab Banking Corporation in Bahrain; the British Empire’s Inter-Alpha banks Société Générale, Santander, Royal Bank of Scotland, and Banco Popular; and other European megabanks ING, Dexia, HSBC. In one Fed program, the Commercial Paper Funding Facility (CPFF), foreign financial firms got 68% of the $396 billion in bailout loans.
Second, under one of those programs, the Term Asset-Backed Securities Lending Program (TALF), the Fed loaned at least $60.8 billion to more than 100 hedge funds, private equity funds, and other funds located in the Caymans or other British offshore havens.
These funds are, right now, conducting intense speculations on the bonds of various European nations, in particular those of Spain, Portugal, Ireland, Belgium, and now Germany; and they are publicly attacking the European Central Bank for failing to throw in enough of its own buying, to make sure they make superprofits. Is the Federal Reserve currently lending to those funds? Or, through the IMF, to those government?
Third, much of the information which the Sanders amendment required on what collateral the Fed was taking for its many trillions in bailout loans, is missing from Fed’s disclosure. But what Senator Sanders’ staff estimate so far, is that 36% of the collateral pledged to the Fed’s primary dealer [overnight] credit facility was merely stock — this is not allowed under the Federal Reserve Act — or bonds ranked below investment grade. Another 17% of the collateral was unrated — downright pornographic — credit or loans.
The biggest mass of low-grade/illegal collateral was pledged immediately after the September 2008 Lehman collapse, by Morgan Stanley and Merrill Lynch, which were clearly going to collapse themselves, without the Fed bailouts.source LaRouchPac
Monday, December 6, 2010
Let Bush Tax Cut Expire
A significant production problem with new high-tech $100 bills has caused government printers to shut down production of the new notes and to quarantine more than one billion of the bills in huge vaults in Fort Worth, Texas and Washington, DC, CNBC has learned.
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Source: newmoney.gov The new $100 note has highly sophisticated security features. |
Initially scheduled for release in February of 2011, the new bills were announced with great fanfare by officials at the Treasury Department and the Federal Reserve in April.
At the time, officials announced the new bills would incorporate sophisticated high-tech security features, including a 3-D security strip and a color-shifting image of a bell designed to foil counterfeiters.
But the production process is so complex, it has instead foiled the government printers tasked with producing billions of the new notes.
An official familiar with the situation told CNBC that 1.1 billion of the new bills have been printed, but they are unusable because of a creasing problem in which paper folds over during production, revealing a blank unlinked portion of the bill face.
A second person familiar with the situation said that at the height of the problem, as many as 30 percent of the bills rolling off the printing press included the flaw, leading to the production shut down. A second person familiar with the situation said that at the height of the problem, as many as 30 percent of the bills rolling off the printing press included the flaw, leading to the production shut down.
The total face value of the unusable bills, $110 billion, represents more than ten percent of the entire supply of US currency on the planet, which a government source said is $930 billion in banknotes. For now, the unusable bills are stored in the vaults in "cash packs" of four bundles of 4,000 each, with each pack containing 16,000 bills.
Officials don’t know exactly what caused the problem. "There is something drastically wrong here," a person familiar with the situation said. "The frustration level is off the charts."
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