Citigroup’s $1.1 Trillion in Mysterious Shadow Assets

July 14 (Bloomberg) — At an investor presentation in May, Citigroup Inc. Chief Executive Officer Vikram Pandit said shrinking the bank’s $2.2 trillion balance sheet, the biggest in the U.S., was a cornerstone of his turnaround plan.

Nowhere mentioned in the accompanying 66-page handout were the additional $1.1 trillion of assets that New York-based Citigroup keeps off its books: trusts to sell mortgage-backed securities, financing vehicles to issue short-term debt and collateralized debt obligations, or CDOs, to repackage bonds.

Now, as Citigroup prepares to announce second-quarter results July 18, those off-balance-sheet assets, used by U.S. banks to expand lending without tying up capital, are casting a shadow over earnings. Since last September, at least $100 billion of assets have flooded back onto Citigroup’s balance sheet, accompanied by more than $7 billion of losses.

“If you start adding up all the potential exposures, it’s a huge number,” said Sam Golden, a former ombudsman for the U.S. Office of the Comptroller of the Currency who now heads the financial-industry practice for restructuring adviser Alvarez & Marsal in Houston. “The banks will say that it was disclosed. Investors are saying, `Yeah, but it was cryptic. We really didn’t know what you were telling us.”’

U.S. banks already are reeling from more than $165 billion of writedowns and credit losses, so shareholders are wary of unknown obligations that might force them to take responsibility for additional troubled assets. The risks have become so obvious that accounting officials are proposing new rules — some of which Citigroup opposes — that would force many assets back onto balance sheets.

Read moreCitigroup’s $1.1 Trillion in Mysterious Shadow Assets

Fed: No more bailouts, except Fannie Mae and Freddie Mac

This is article very important, because…
“The credit crisis has obviously entered into a new phase – the government has one bailout left in them, and this is it,” said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion.
And now all the related articles below make much more sense and here comes the meltdown of the financial markets.
If you do not know how to prepare yourself: Solution
If you want to know more on what is going on: World Situation
Take care. – The Infinite Unknown

____________________________________________________________________________________

NEW YORK – The U.S. government is signaling it won’t throw a lifeline to struggling financial companies – except for mortgage linchpins Fannie Mae and Freddie Mac – marking a shift to a new and potentially more volatile phase of the credit crisis.

Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies’ earnings reports that are expected to be down a stunning 69 percent from a year ago when all the numbers are in.

Related articles and videos:
More Than 300 US Banks to Fail, Says RBC Capital Markets Analyst
Run on banks spells big trouble for US Treasury
US: Total Crash of the Entire Financial System Expected, Say Experts
The Dollar is doomed and the Fed will fail
Fannie, Freddie insolvent, Poole tells Bloomberg
Foreclosures Rose 53% in June, Bank Seizures Triple
Small Banks: Billions in Troubled Construction Loans
Financial market losses could top 1,600 billion dollars: report
Dow suffers worst 1st half since ‘70
Fortis Bank Predicts US Financial Market Meltdown Within Weeks
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Jim Rogers: Avoid The Dollar At All Costs
Ron Paul on Iran and Energy June 26, 2008
Marc Faber: ‘Misleading’ Fed Should Let Banks Fail
This recession could easily tip into a depression

And, for consumers already squeezed by tightening credit standards, it could mean getting a mortgage will become even harder.

Read moreFed: No more bailouts, except Fannie Mae and Freddie Mac

This recession could easily tip into a depression

The experience of the 1930s makes me think that the present downturn will be relatively long and difficult

Today I am celebrating my 80th birthday, an age that seems less formidable when one has reached it than when one can see it only from afar.

I was born on July 14, 1928, about 15 months before the American boom of the 1920s came to its rather abrupt end. Like everyone else, I am naturally curious to see whether the global credit crunch is going to be a brief interruption in global prosperity, or the prelude to a longer and deeper depression.

I cannot claim to have clear memories of the 1929 Wall Street Crash, which occured when I was 1year old, or of Britain leaving the gold standard in 1931, when I was 3 years old.

I do however, remember newspaper articles about the later stages of the Depression. In the 1930s, my parents read The Times, the Financial Times and the Daily Mail.

Related articles and videos:
More Than 300 US Banks to Fail, Says RBC Capital Markets Analyst
Run on banks spells big trouble for US Treasury
US: Total Crash of the Entire Financial System Expected, Say Experts
The Dollar is doomed and the Fed will fail
Fannie, Freddie insolvent, Poole tells Bloomberg
Foreclosures Rose 53% in June, Bank Seizures Triple
Small Banks: Billions in Troubled Construction Loans
Financial market losses could top 1,600 billion dollars: report
Dow suffers worst 1st half since ‘70
Fortis Bank Predicts US Financial Market Meltdown Within Weeks
Barclays warns of a financial storm as Federal Reserve’s credibility crumbles
Jim Rogers: Avoid The Dollar At All Costs
Ron Paul on Iran and Energy June 26, 2008
Marc Faber: ‘Misleading’ Fed Should Let Banks Fail

I can remember the news stories of the Jarrow march of the unemployed. I also remember discussing with my mother a lead story which reported that farm workers’ pay was to be raised 6d (2p) to what would now be £1.50 a week. The depression was a fact of existence in the North Somerset coalfield up to the outbreak of war in 1939.

Fortunately, there has only been one Great Depression in my lifetime, but there has also been a Great Inflation. In 2006 Pickering and Chatto, which I refounded in the 1980s, had the good timing to publish a three-volume History of Financial Disasters, under the general editorship of Mark Duckenfield.

Read moreThis recession could easily tip into a depression

More Than 300 US Banks to Fail, Says RBC Capital Markets Analyst

NEW YORK, July 13 (Reuters) – U.S. banks may fail in far greater numbers following the collapse of the big mortgage lender IndyMac Bancorp Inc, straining a financial system seeking stability after years of lending excesses.

More than 300 banks could fail in the next three years, said RBC Capital Markets analyst Gerard Cassidy, who had in February estimated no more than 150.

Related articles and video:
Fed: No more bailouts, except Fannie Mae and Freddie Mac
Run on banks spells big trouble for US Treasury
US: Total Crash of the Entire Financial System Expected, Say Experts
The Dollar is doomed and the Fed will fail
Jim Rogers: Fannie Plan a `Disaster’; Goldman Says Sell

Banks face pressure as credit losses once concentrated in subprime mortgages spread to other home loans and debt once-thought safe. This has also led to investor worries about the stability of mortgage finance companies Fannie Mae and Freddie Mac; IndyMac is not related to either.

Read moreMore Than 300 US Banks to Fail, Says RBC Capital Markets Analyst

Iran discovers new oil field to hold 1 billion barrels of crude

TEHRAN, July 13 (RIA Novosti) – A new large oil deposit with estimated reserves of more than 1 billion barrels of crude has been discovered in Iran, the Iranian oil minister said on Sunday.

Gholamhossein Nozari said the oil field, located in the southwestern province of Khuzestan, is believed to contain 1.1 billion barrels of crude, with recoverable reserves of about 220 million barrels.

Iran ranks fourth in terms of crude reserves after Saudi Arabia, Iraq and Kuwait, as well as fourth in terms of oil production after Saudi Arabia, the United States and Russia.

Tehran exports the majority of crude produced in the country.

Iran grossed $70 billion from oil sales over the country’s past solar year, which according to the Iranian calendar ran from March 21, 2007 until March 20, 2008, the oil minister earlier said.

13/ 07/ 2008

Source: Ria Novosti

The Great Biofuels Con

According to the World Bank’s top economist, Don Mitchell, biofuels had been responsible for three-quarters of the 140 per cent rise in world food prices between 2002 and 2008. It was this that last October prompted Jean Ziegler, the UN’s “special rapporteur on the right to food”, to comment that biofuels could only bring “more hunger to the poor people of the world” and were a “crime against humanity”.
________________________________________________________________________________________

A field of rapeseed in England and Africans reveive food relief
Yellow peril: while Britain’s farmers are encouraged to turn their fields over to rapeseed for biofuels, the world food crisis has driven people in Ethiopia to the brink of starvation

Rarely in political history can there have been such a rapid and dramatic reversal of a received wisdom as we have seen in the past 18 months over biofuels – the cropping of living plants, such as soya beans, wheat and sugar cane, to generate energy.

Two years ago biofuels were still being hailed as a dream solution to what was seen as one of the most urgent problems confronting mankind – our dependence on fossil fuels, which are not only finite but seemed to be threatening the world with the catastrophe of global warming.

Read moreThe Great Biofuels Con

Chinese Government is Top Foreign Holder of Fannie Mae, Freddie Mac Bonds

$376 Billion in Chinese Agency Bond Holdings Subject to Taxpayer Bailout Proposals According to FreedomWorks Analysts

WASHINGTON, Jul 11, 2008 (BUSINESS WIRE) — As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.

The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury’s most recent “Report on Foreign Portfolio Holdings of U.S. Securities.”

FreedomWorks President Matt Kibbe commented, “The prospectus for every GSE bond clearly states that it is not backed by the United States government. That’s why investors holding agency bonds already receive a significant risk premium over Treasuries.”

“A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors.”

“A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics.”

SOURCE: FreedomWorks
Last update: 11:08 a.m. EDT July 11, 2008

Source: Market Watch

Run on banks spells big trouble for US Treasury

IN A modern financial system nothing is more frightening than a run on the bank. The US has now suffered a series of them, and they are escalating in size and scope, posing a serious threat to an already reeling economy.

Rumours swamped financial markets on Friday that the US Government would be forced to step in to aid the mortgage finance giants Fannie Mae and Freddie Mac, which together own or guarantee $US5 trillion ($5.16 trillion) in US home loans.

In Wall Street’s version of a run on the bank, investors drove Fannie Mae and Freddie Mac shares to 17-year lows, signalling a gnawing lack of faith in the companies’ ability to survive rising mortgage defaults without the Government’s help.

Later on Friday regulators took over IndyMac Bank of Pasadena, saying the $US32 billion lender had collapsed under the weight of bad home loans and withdrawals by spooked depositors. It was the second-largest bank to fail in US history.

Friday’s events were felt around the world, knocking the battered US dollar lower and driving up interest rates.

“This is a flare-up in the financial forest fire that is far beyond anything we’ve seen before,” said Christopher Low, chief economist at the investment firm FTN Financial in New York.

It is triggering worries that would have been unthinkable even a year ago, including that the US Treasury’s debt might lose its AAA credit grade because of heavy blows to the nation’s fiscal health from the housing mess.

Four months ago many on Wall Street believed they had seen the worst of the credit crisis rooted in the housing market’s woes. The collapse in March of the brokerage Bear Stearns, a central player in the business of packaging dicey mortgages for sale to investors, was the kind of prominent calamity that has historically marked the end of financial crises.

Read moreRun on banks spells big trouble for US Treasury

David Icke – Big Brother, the Big Picture (July 6th 2008)

David Icke speaks to the constituents of Haltemprice and Howden about the ‘Big Brother’ election, forced by the resignation of David Davis, and the move towards the global Big Brother enslavement we are all facing. (Official Full Version)

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This video contains a lot of very important information.
I disagree with David Icke on his view of the ancient civilizations.
The elite is abusing the knowledge of these ancient civilizations.
The elite is abusing the universal powerful symbols
, that our subconscious mind understands directly, because it is the universal language.
These ancient civilizations have fallen into darkness several thousand years ago and so has their knowledge.
– The Infinite Unknown

Source: Google Video

Bankers Use Secret Clinics, Nurses to Beat Breakdowns

July 11 (Bloomberg) — On a private island 20 minutes by helicopter from central London, a hovercraft sits on the lawn of a turreted Edwardian manor house as swallows swoop around.

Trees and wildflowers line a lane that leads to a cluster of buildings that house a pool table, a 12-seat movie theater and an art studio. A yacht is moored nearby.

The island isn’t a country hideaway. It’s the Causeway Retreat, a mental health and addiction center that charges as much as 10,000 pounds ($20,000) a week for treatment away from the prying eyes of colleagues and the media. There is a waiting list for the facility’s 15 rooms.

“We get lots of CEOs of companies, traders, high-end business guys,” says Managing Director Brendan Quinn. “They want treatment, but they want it to be discreet.”

Read moreBankers Use Secret Clinics, Nurses to Beat Breakdowns