Debt

Treasuries Are Dead Money With Yields Below Inflation

by

Sept. 29 (Bloomberg) — The rally in U.S. Treasuries may be running out of steam after yields fell to the lowest since Franklin D. Roosevelt was president.

Renewed concern about the stability of the banking system sparked a run on Treasuries that drove bill rates down to 0.02 percent. Concern is so widespread that investors are buying 30- year bonds even though their yields are the furthest below inflation since at least 1980.

“It’s like the Mark Twain quote, `I am more concerned with the return of my money than the return on my money,”’ said James Evans, a senior vice president at New York-based Brown Brothers Harriman & Co. who helps oversee $15 billion in fixed- income assets.

Read moreTreasuries Are Dead Money With Yields Below Inflation

Bernanke Signals U.S. Should Pay More for Bad Debt

by

Hey it’s taxpayers money, so the higher the price the better.
___________________________________________________________________________


Ben S. Bernanke, chairman of the U.S. Federal Reserve, testifies before the Senate Banking Committee in Washington, Sept. 23, 2008. Photographer: Joshua Roberts/Bloomberg News

Sept. 23 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke signaled that the government should buy devalued assets at above-market values to make its proposed $700 billion rescue package most effective in combating the financial crisis.

“Accounting rules require banks to value many assets at something close to a very low fire-sale price rather than the hold-to-maturity price,” Bernanke said in testimony to the Senate Banking Committee today. “If the Treasury bids for and then buys assets at a price close to the hold-to-maturity price, there will be substantial benefits.”

Bernanke’s remarks, an unusual departure from his prepared testimony, come as lawmakers and the Bush administration negotiate a rescue plan aimed at easing the worst financial crisis since the Great Depression. The Fed chief said paying prices higher than the bad assets would fetch in the open market would help “unfreeze” credit markets and aid the economy.

Read moreBernanke Signals U.S. Should Pay More for Bad Debt

Democrats and Republicans alike sceptical of Bush bailout plan

by


Federal Reserve chairman Ben Bernanke folds his hands while testifying with US Treasury secretary Henry Paulson before the Senate banking committee on Tuesday. Photograph: Charles Dharapak/AP

The proposed $700bn bailout of US financial markets faced harsh criticism in Congress today, with liberals and conservatives both sceptical that granting the Bush administration power to buy up risky mortgages would avert further economic crisis.

Yet despite the wariness from the Senate banking committee, where Henry Paulson and Ben Bernanke appeared today, the financial rescue seems poised to win approval by next week at the latest.

“This is not something I wanted to ask for,” the US treasury secretary said, assuring senators that “I feel your frustrations” and “I’m angry” at the prospect of Wall Street firms getting saved by the government.

But Paulson and Bernanke did ask for broad latitude to decide which toxic assets would win a purchase by the government. Senators of both parties did not attempt to hide their anger at the request, citing the Bush administration’s previous assurances of market stability.

“We have been given no credible assurances that this plan will work,” Richard Shelby, the senior Republican on the banking panel, said. “Congress does not have time to determine if there are better alternatives.”

The committee’s Democratic chairman, Chris Dodd, questioned Paulson’s request for immunity from any legal or government review of his actions during the bailout process.

“After reading this proposal, I can only conclude that it is not just our economy that is at risk,” Dodd told the treasury secretary, “but our constitution as well.”

Read moreDemocrats and Republicans alike sceptical of Bush bailout plan

Paulson Bailout Plan a Historic Swindle

by

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses–many hundreds of billions, maybe much more. What’s not to like if you are a financial titan threatened with extinction?

Read morePaulson Bailout Plan a Historic Swindle

Capitalism in convulsion: Toxic assets head towards the public balance sheet

by

In the space of just two momentous weeks, the landscape of global finance has been dramatically transformed. President George W. Bush’s administration has mounted a multi-billion-dollar rescue of the financial system at the cost of inflicting severe damage on the US model of free- market capitalism.

Heavy costs will be inflicted on the American taxpayer, who is now subsidising Wall Street – and indeed financial institutions around the world – in a bail-out of unprecedented size.

Read moreCapitalism in convulsion: Toxic assets head towards the public balance sheet

CNN: Will the rescue plan work?

by

Kirby Daley of financial brokerage Newedge Group on emergency measures to help rescue banks from bad debt.


Hinzugefügt: 19. September 2008, Source: YouTube

The burden is shifted from the shareholders to the taxpayers.

This is socialism for the rich as Ron Paul and Jim Rogers said before.

Will the rescue plan work???

If not it is the financial system and the US who will fail.

I say the rescue plan will not work but it will destroy the middle class and it will concentrate

power and wealth in fewer and fewer hands.

Stocks rally on report of entity for bad debt

by

Stocks end sharply higher on report that government will create entity to hold banks’ debt

NEW YORK (AP) — Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government might create an entity to absorb banks’ bad debt. The report also cooled investors’ fervor for the safest types of investments like government debt.

The report that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left previously solemn investors ebullient. Wall Street hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.

Read moreStocks rally on report of entity for bad debt

Ron Paul on the Global Financial Crisis 9/18/08

by


Added: Sept. 18, 2008

Source: YouTube

Freddie, Fannie Scam Hidden in Broad Daylight

by

Sept. 9 (Bloomberg) — When the history is written on the collapse of Fannie Mae and Freddie Mac, it will go down in the annals of corporate scandals as one of the greatest accounting scams committed in broad daylight.

All anyone had to do to know the government-guaranteed mortgage financiers were insolvent was read their financial statements. You didn’t need a trained professional eye to discern this open secret, only a skeptical one.

Just last month, Fannie and Freddie said their regulatory capital was $47 billion and $37.1 billion, respectively, as of June 30. The Treasury Department now says it may have to inject as much as $200 billion of capital into the two companies. Nothing much changed at the companies in that span. They just couldn’t get the government to keep up the ruse any longer.

Read moreFreddie, Fannie Scam Hidden in Broad Daylight

Why Government Bailout Of Fannie And Freddie Will Fail

by

With yesterday’s announcement of the most massive federal bailout of all time, it’s now official: Fannie Mae and Freddie Mac, the two largest mortgage lenders on Earth, are bankrupt.

Some Washington bigwigs and bureaucrats will inevitably try to spin it. They’ll avoid the “b” word with vengeance. They’ll push the “c” word (conservatorship) with passion. And in the newspeak of 21st century bailouts, they’ll tell you “it all depends on what the definition of solvency is.”

The truth: Without their accounting smoke and mirrors, Fannie and Freddie have no capital. The government is seizing control of their operations. Their chief executives are getting fired. Common shareholders will be virtually wiped out. Preferred shareholders will get pennies. If that’s not wholesale bankruptcy, what is?

Read moreWhy Government Bailout Of Fannie And Freddie Will Fail

JPMorgan Is Facing Federal Probe

by

Sept. 4 (Bloomberg) — JPMorgan Chase & Co. will stop selling interest-rate swaps to government borrowers in the $2.6 trillion U.S. municipal bond market roiled by an antitrust probe and the near bankruptcy of Alabama’s most-populous county.

At least seven former JPMorgan bankers are under scrutiny in a Justice Department criminal investigation of whether banks conspired to overcharge local governments on swaps and other derivatives. The bank also is embroiled in negotiations over how to resolve a debt crisis with Jefferson County, Alabama, where the county’s former adviser says a group of firms led by JPMorgan, the third-largest U.S. bank by assets, overcharged it by as much as $100 million for financing a new sewer system.

Read moreJPMorgan Is Facing Federal Probe

U.S. Companies Cut 33,000 Jobs in August

by

Sept. 4 (Bloomberg) — Companies in the U.S. cut an estimated 33,000 jobs in August, a private report based on payroll data showed today.

The decrease followed a revised gain of 1,000 for the prior month that was lower than previously estimated, ADP Employer Services said.

The extended housing slump, high raw material costs and weaker demand are prompting employers to cut staff. Economists forecast the Labor Department will report tomorrow that the U.S. lost jobs for an eighth straight month last month.

Read moreU.S. Companies Cut 33,000 Jobs in August

Wall Street Journal: New credit hurdle looms for banks

by

U.S. and European banks, already burdened by losses and concerns about their financial health, face a new challenge: paying off hundreds of billions of dollars of debt coming due.

At issue are so-called floating-rate notes – securities used heavily by banks in 2006 to borrow money. A big chunk of those notes, which typically mature in two years, will come due over the next year or so, at a time when banks are struggling to raise fresh funds. That’s forcing banks to sell assets, compete heavily for deposits and issue expensive new debt.

The crunch will begin next month, when some $95 billion in floating-rate notes mature. J.P. Morgan Chase & Co. analyst Alex Roever estimates that financial institutions will have to pay off at least $787 billion in floating-rate notes and other medium-term obligations before the end of 2009. That’s about 43 percent more than they had to redeem in the previous 16 months.

The problem highlights how the pain of the credit crunch, now entering its second year, won’t end soon for banks or the broader economy. The Federal Deposit Insurance Corp. said on Tuesday that its list of “problem” banks at risk of failure had grown to 117 at the end of June, up from 90 at the end of March. FDIC Chairman Sheila Bair said her agency might have to borrow money from the Treasury Department to see it through an expected wave of bank failures. She said the borrowing could be needed to handle short-term cash-flow pressure brought on by reimbursements to depositors after bank failures.

Read moreWall Street Journal: New credit hurdle looms for banks

The United States of America is the Next Argentina

by

DON’T CRY FOR ME ARGENTINA SAVE YOUR TEARS FOR YOURSELF – While bankers do control the issuance of credit, they cannot control themselves. Bankers are the fatal flaw in their deviously opaque system that has substituted credit for money and debt for savings. The bankers have spread their credit-based system across the world by catering to basic human needs and ambition and greed; and while human needs can be satisfied, ambition and greed cannot-and the bankers’ least of all.

I have a bad feeling about what’s about to happen. The Great Depression is the closest that comes to mind. I, like most, was not alive during the 1930s when it happened. Nonetheless, what once was feared in private is now being discussed in public. It’s going to be bad. It’s going to make high school seem like fun.

THE UNITED STATES OF AMERICA THE NEXT ARGENTINA

This Time is Different: A Panoramic View of Eight Centuries of Financial Crises by University of Maryland‘s Carmen Reinhart and Harvard’s Kenneth Rogoff makes for perfect reading when flying between the US and Argentina.

There is perhaps no better analysis than Reinhart and Rogoff’s on the history of sovereign defaults; and, as such, Reinhart and Rogoff’s paper was ideal reading material when traveling between the US and Argentina , for the sovereign defaults that happened in the past to Argentina will soon be happening to the US .

Read moreThe United States of America is the Next Argentina

Jim Rogers Predicts Bigger Financial Shocks

by

VANCOUVER, B.C. – The U.S. financial crisis has cut so deep – and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae (FNM) and Freddie Mac (FRE) – that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.

Indeed, the U.S. financial debacle is now so ingrained – and a so-called “Super Crash” so likely – that most Americans alive today won’t be around by the time the last of this credit-market mess is finally cleared away – if it ever is, Rogers said.

Read moreJim Rogers Predicts Bigger Financial Shocks

Report: Obama, Potential Iran Attack, Financial Collapse

by

Published for some of the information on the economy.


Added: August 02, 2008

Source: YouTube

IMF predicts no end in sight to credit crisis

by

The International Monetary Fund says there’s no end in sight to the credit crisis gripping world financial markets.

As Australia’s NAB and ANZ have already discovered, the IMF believes banks are in for more pain as mortgage defaults soar and economies slow. The IMF has a particularly gloomy assessment of the US economy, and it came on the same day as the Bush administration revealed America’s budget deficit will climb to a record high of more than half-a-TRILLION dollars.

Speaker: Michael Rowland
Speakers: Jaime Caruana, head of the IMF’s capital markets division; Doug Peta, a market strategist with J and W Seligman; Jim Nussle, White House budget director

Read moreIMF predicts no end in sight to credit crisis

The U.S. Enters into an Ever-Worsening Cycle

by

We are a year into the financial pain and virtually no systemic problem has been solved. Markets have entered into a new unsustainable cycle. The new dance is a two-step. Home prices slide, delinquencies rise, defaults rise. This puts additional pressure on housing going forward. Financial firms announce greater write-offs. Retailers slump and contagion goes global. Selling grips the markets, the good and the bad are sold off indiscriminately. Commodities rise, fear escalates and reaches a crescendo as at least one major institution nears or reaches insolvency. Forecasts of impossible return to the good old days are debated and rebound timetables are pushed back. In the depths of the swoon, the Fed opens the discount window to some new and previously barred set of institutions. Bail-outs are readied, Treasury checks are cut and we rebound off the lows. Bad news becomes good, commodities sell-off and financials soar.

Read moreThe U.S. Enters into an Ever-Worsening Cycle

Is America too big to fail?

by

NEW YORK: In the narrative that has governed American commercial life for the last quarter-century, saving companies from their own mistakes was not supposed to be part of the government’s job description. Economic policymakers in the United States took swaggering pride in the cutthroat but lucrative form of capitalism that was supposedly indigenous to their frontier nation.

Read moreIs America too big to fail?

FREDDIE & FANNIE UNCONSTITUTIONAL BAIL OUT USING WHAT?

by



“As I write this column, Congress has run this country into a $9,498,511,404,143.63 debt. That’s just under $9.5 TRILLION “dollars.””

I really hope that you will find time to read this article. 🙂
_______________________________________________________________________________________

Arthur Henning of the Chicago Tribune said back in 1935, “The New Deal will bring the Communist Party within striking distance of overthrow of the American form of government…” Mark Sullivan of the Buffalo Evening News also expressed alarm in 1935: “The New Deal is to America what the early phase of Nazism was to Germany…”

The nation is awash in fear because they are coming to realize that while they’ve been buying all the hype from the cabal of gangsters in Washington for decades, reality is now setting in as poverty is slamming millions who used to belong to the middle class. From dangerous lending practices to the derivatives time bomb waiting to go off and inflation getting ready to launch into hyper inflation, the situation is more grim by the week. A financial catastrophe so many have been warning about for decades, it’s all coming home to roost. The “perfect storm” as it’s being called. The beast is now devouring itself and we the people are caught in their cross fire.

Unfortunately, most Americans haven’t been listening. They’re either addicted to sports, shopping, porn, drugs or yaking on their cell phones while the world has been heading for financial Armageddon.

Read moreFREDDIE & FANNIE UNCONSTITUTIONAL BAIL OUT USING WHAT?

Amber light flashing on U.S. dollar intervention

by

So Inflation is really the greatest export of the US.
_____________________________________________________________________________________

LONDON (Reuters) – Three days before the last bout of coordinated central bank intervention to calm world currency markets, the International Monetary Fund’s top economist opined: “If not now, when?” Many experts are now asking the same.

Read moreAmber light flashing on U.S. dollar intervention

US: $455,000 debt per household

by

As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government?

“People seem to think the government has money,” said former U.S. Comptroller General David Walker. “The government doesn’t have any money.”

A rare consensus has developed across the political spectrum that the government’s own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office.

To put that number in human terms, the debt has reached $455,000 per U.S. household. As that debt grows, the United States increasingly relies on foreigners, including China and Middle East oil producers, for financing.

Read moreUS: $455,000 debt per household

Status Report on the Collapse of the U.S. Economy

by

“But, realistically, all ordinary people can do today is try to survive, perhaps by working with friends and neighbors in planting food and living within the underground economy. At least people might not then have to starve to death, because hard as it is to believe that “it could happen here,” widespread famine in the U.S. seems a real possibility over the next several years. Nations take such risks when they allow capitalist agribusiness to destroy local agriculture.”

With the economic news of the week of July 14-the continuing crisis among mortgage lenders, the onset of bank failures, the announced downsizing of General Motors, the slide of the Dow-Jones below 11,000-we are seeing the ongoing collapse of the U.S. economy.

Even the super-rich are becoming nervous as cries for an emergency suspension of short selling ring out.

What is really taking place, however, is that the producing economy of working men and women is being crushed by the overall debt burden on households, businesses, and governments that could reach $70 trillion by 2010. The financial system, including mortgage giants Fannie Mae and Freddie Mac, is bankrupt, as the debts it is based on cannot be repaid.

Read moreStatus Report on the Collapse of the U.S. Economy