Facebook Banks Said To Make $100 Million On Stabilizing Stock

Facebook Banks Said to Make $100 Million on Stabilizing Stock (Bloomberg, May 23, 2012):

Facebook Inc. (FB)’s underwriters for its initial public offering made gains of about $100 million through their work to stabilize the shares in public trading, said a person familiar with the matter.

The gains will be shared by all banks on the IPO syndicate, said the person, who declined to be identified because the process was private. Morgan Stanley (MS) will use some of the gains to reimburse clients who lost money because of glitches in trade execution, the person said.

Facebook At All-Time Lows; -31% From Highs

Before:

– ROFL:  Peak Facebook (This Time Is Different!!!)

FaceBook Pulls Reverse BATS – Flash Smashes To €50,000/Share

Facebook European Premarket Bid: €58 … ‘People Are Far Dumber Than Even We Thought’

FLASHBACK:

Facebook founder called trusting users ‘DUMB FUCKS’


Facebook At All-Time Lows; -31% From Highs (ZeroHedge, May 22, 2012):

UPDATE: 6 minutes into the day-session and FB has a $30 handle and 17mm shares traded.

1.8mm shares have traded this morning as the long-selling continues as the stock-that-shall-not-be-named traded as low as $32.70 this morning (from its $45 highs on Friday)…

Not helping matters is the Reuters report that:

Morgan Stanley unexpectedly delivered some negative news to major clients: The bank’s consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company. The sudden caution very close to the huge initial public offering, and while an investor roadshow was underway, was a big shock to some, said two investors who were advised of the revised forecast.”

Cue the shareholder class-action lawsuits.

TBTF Get TBTFer: Top 5 Banks Hold 95.7%, Or $221 Trillion, Of Outstanding Derivatives

What could possibly go wrong?


TBTF Get TBTFer: Top 5 Banks Hold 95.7%, Or $221 Trillion, Of Outstanding Derivatives (ZeroHedge, Mar 26, 2012):

Every quarter the Office of the Currency Comptroller releases its report on Bank Derivative Activities, and every quarter we find that the Too Big To Fail get Too Bigger To Fail. To wit: in Q4 2011, of the total $230.8 trillion in US outstanding derivatives, the Top 5 banks (JPM, BofA, Morgan Stanley, Goldman and HSBC) accounted for 95.7% of all Derivatives. In some respects this is good news: in Q2, the Top 5 banks held 95.9% of the $250 trillion in derivatives. Unfortunately it is also bad news, because $220 trillion is more than enough for the world to collapse in a daisy chained failure of bilateral netting (which not even all the central banks in the world can offset). What is the worst news, is that the just released report indicates that in addition to everything else, we have now hit peak delusion, as banks now report to the OCC that a record high 92.2% of gross credit exposure is “bilaterally netted.” While we won’t spend much time on this issue now, it is safe to say that bilateral netting is the biggest lie in modern finance (read How US Banks Are Lying About Their European Exposure; Or How Bilateral Netting Ends With A Bang, Not A Whimper for an explanation of this fraud which was exposed completely in the AIG collapse). And just to put this in global perspective, according to the BIS in the first half of 2011, global derivative gross exposure increased by $107 trillion to a record $707 trillion. It will be quite interesting to get the full year report to see if this acceleration in gross exposure has increased. Because if it has, we will now know that in 2011 European banks were forced up to load up on several hundred trillion in mostly interest rate swap exposure. Which can only mean one thing: when and if central banks lose control of government bond curves, an rates start moving wider again, the global margin call will be unprecedented. Until then we can just delude ourselves that central planners have everything under control, have everything under control, have everything under control.

Moody’s May Downgrade 17 Global And 114 European Financial Institutions (Reuters)

Moody’s may downgrade UBS and Morgan Stanley (Reuters):

Moody’s warned on Thursday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign the impact of the euro zone government debt crisis is spreading throughout the global financial system.

It was reviewing the long-term ratings and standalone credit assessments of a range of banks, Moody’s added. Markets were unaffected by the Moody’s announcement.

“Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions,” the ratings agency said in a statement.

It said among 17 banks and securities firms with global capital markets operations, it might cut the long-term credit rating of UBS, Credit Suisse and Morgan Stanley by as much as three notches following the review. It said the guidance was indicative.

Among the banks that might be downgraded by two notches are Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings, and Goldman Sachs.

Bank of America and Nomura were included in those that might be downgraded by one notch.

 

Morgan Stanley’s Stephen Roach: ‘Bernanke Is Betting The Ranch On Open-Ended QE And Zero Interest Rates And It Worries Me’, Explains How The Fed Is Pulling The Wool Over Our Eyes


– Stephen Roach Explains How The Fed Is Pulling The Wool Over Our Eyes (ZeroHedge, Jan. 27, 2012):

Bernanke is betting the ranch on open-ended QE and zero interest rates and it worries me” is how Stephen Roach of Morgan Stanley starts this must-see reality-check interview with Bloomberg TV’s Tom Keene. The reason for his concern is simple, the current Fed modus operandi is a framework for rescuing economies in crisis but does little to sustain economic recovery. Roach agrees with Cal’s Eichengreen that the European and US central banks are indeed in a policy trap, committed to a path of action that has to be perpetually ante’d up to maintain the dream. With Europe in recession already in his view, Roach does not expect the tough structural action until we see greater social unrest or overwhelming unemployment and reminds us of how close we got when Greece threatened the referendum in the late summer. He goes on to discuss China (positive on their efforts and ‘solid strategy’) and it’s relative success as a regime which he contrasts with our “central bankers who pull the wool over our eyes with ZIRP and magical QE”. Taking on the mistakes of Greenspan, letting capitalism go unchecked, and his incredulity at the ‘glide-path’ charts we were treated to yesterday by the Fed’s bankers (‘accountability‘), Roach sees the painful process of deleveraging from excess debt, insufficient savings, and over-consumption as likely to take a long time as we should not assume investment will be the driver as Obama goes ‘protectionist’ (in the SOTU) on our 3rd largest export partner – yes, China.

Fitch Downgrades 8 BANKING GIANTS – S&P Downgrades 10 Spanish Banks

S&P slaps ten Spanish banks with downgrade (Sydney Morning Herald, Dec. 16, 2011):

Standard and Poor’s downgraded Thursday the credit rating of 10 Spanish banks after applying new criteria, and warned it may lower their short-term scores further.

The 10 banks had their ratings lowered and remained in “creditwatch with negative implications”, indicating the risk of a further downgrade, Standard and Poor’s said in a statement.

S&P cuts ratings of 10 Spanish banks‎ (Reuters, Dec. 15, 2011):

Standard & Poor’s cut the credit ratings of 10 Spanish banks on Thursday and said they remained on watch for a possible further cut subject to a review of Spain’s sovereign rating.

Fitch cuts ratings on 8 major banks‎ (AP, Dec. 15, 2011):

NEW YORK (AP) — Fitch Ratings on Thursday downgraded its viability ratings on eight of the world’s biggest banks, citing increased challenges facing the banking sector due to weak economic growth and heightened regulation.

The firm lowered its viability ratings for Bank of America Corp., Barclays PLC, BNP Paribas, Credit Suisse AG, Deutsche Bank AG, The Goldman Sachs Group Inc., Morgan Stanley and Societe Generale.

Read moreFitch Downgrades 8 BANKING GIANTS – S&P Downgrades 10 Spanish Banks

The Great Wall Street Rehypothecation Scandal: ‘Engaging In Hyper-Hypothecation Have Been … JP Morgan($546.2 Billion) And Morgan Stanley ($410 Billion)’

The Denials Begin: Interactive Brokers Is First To Claim It Has Not Engaged In Commingling Rehypothecation (ZeroHedge, Dec. 10, 2011):

Now that the rehypothecation bogeyman has been let loose, and the question of just how many paper (and apparently physical) assets have been double, triple, and n-counted (where n can be a number up to “infinity”) by the infinitely daisy-chained modern global financial system in which one’s liability is someone else’s asset….apparently up to infinity times, the next logical step was for the firms named in the original Reuters article (‘MF Global and the great Wall St re-hypothecation scandal’) to step up and begin denials they had anything to do with anything. Sure enough, below is the first (of many) such response, by Interactive Brokers, claiming it has been greatly misunderstood and unlike MF Global, it has done nothing wrong at all. Of note is that IB was simply one of many brokers mentioned in the Reuters piece, where we read that

Engaging in hyper-hypothecation have been Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion),Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JP Morgan($546.2 billion) and Morgan Stanley ($410 billion).

Sure enough, we predicted a firm would have to promptly step up and “deny all charges.” To wit: “Oh Jefferies, Jefferies, Jefferies. Barely did you manage to escape the gauntlet of accusation of untenable gross (if not net) sovereign exposure, that you will soon, potentially as early as tomorrow, have to defend your zany rehypothecation practices.” As it turns out Jefferies, and all the other mentioned banks tried to avoid this festering can of worms by completely ignoring the topic… until Interactive Brokers’ response now demands that every single named bank has to do the same and come out with an outright explanation of why it has billions in hyper-hypothecation, or else not journalists and bloggers, but the market itself will suddenly start asking questions. Something tells us it will not be nearly as easy enough for the others to deny all charges… Incidentally, if this indeed becomes “the next big thing”, what the potential collapse of (re) hypothection means is that PBs will be unable to lend out shares anymore, in effect collapsing stock shorting as there is one giant short stock recall/forced buy in. Ironicaly the unwind of the biggest market fraud could result in the entire market pulling one last Volkswagenstyle hurrah, before all hell breaks loose.

From Interactive Brokers

Read moreThe Great Wall Street Rehypothecation Scandal: ‘Engaging In Hyper-Hypothecation Have Been … JP Morgan($546.2 Billion) And Morgan Stanley ($410 Billion)’

The Federal Reserve And The $16 Trillion Bankster Bailout

See also:

Gerald Celente Endorses Ron Paul For President – ‘The Entire Economic System Is Collapsing’ – ‘Fascism Has Come To America In Every Form’ (Video – Nov. 29, 2011)


Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks? (The Econonomic collapse, Dec. 2, 2011):

What you are about to read should absolutely astound you.  During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.  Do you remember the TARP bailout?  The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the “too big to fail” banks.  Well, that bailout was pocket change compared to what the Federal Reserve did.  As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the “too big to fail” banks between 2007 and 2010.  So have you heard about this on the nightly news?  Probably not.  Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture.  The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down.  The Federal Reserve has been actively picking “winners” and “losers” in the financial system, and it turns out that the “friends” of the Fed always get bailed out and always end up among the “winners”.  This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

Read moreThe Federal Reserve And The $16 Trillion Bankster Bailout

Eurozone Debt Crisis: Markets Dive On Greek Referendum … Dax -5% … Cac 40 -5.38% (Societe Generale -16.2%)

See also:

The European (Non-)Bailout Explained (Video) … And Why Europe ‘Is Screwed’: ‘Dumb Money’ Refuses To Play Along: China State Media Says It Won’t Rescue Europe

Jim Rogers Says New Greece Deal Can’t Save Europe

Nigel Farage On Freedom Watch: Eventually Events Will Be Too Big For Any Bailout (Video – Oct. 26, 2011)

- Bilderberg Merkel Warns Of War In Europe If Euro Fails – EU Summit Seals 1 Trillion Euro Deal – Banks Agree On 50% Write-Off Of Greek Debt


Eurozone debt crisis: Markets dive on Greek referendum (BBC News,Nov. 1, 2011):

US and European markets have fallen following Monday’s announcement of a Greek referendum on the latest aid package to solve its debt crisis.

Eurozone leaders agreed a 50% debt write-off for Greece last week as well as strengthening Europe’s bailout fund.

But the Greek move has cast doubt on whether the deal can go ahead.

New York’s Dow Jones ended the day 2.5% lower, after a mid-afternoon rally on hope that Greek MPs may block the referendum proved short-lived.

One of Mr Papandreou’s MPs, Milena Apostolaki, resigned from the ruling Pasok parliamentary group on Tuesday, leaving the government with a two-seat majority in parliament.

Six other party members have called for Mr Papandreou to resign, according to the state news agency.

There are doubts whether the government will last long enough to hold the referendum, pencilled in for January.

A confidence vote is due to take place in the Greek parliament on Friday.

Banks down

Earlier in the day, London’s FTSE 100 had ended trading down 2.2%, while the Frankfurt Dax fell 5% and the Paris Cac 40 some 5.4%.

Shares in French banks saw the biggest falls, with Societe Generale down 16.2%, BNP Paribas 13.1% and Credit Agricole 12.5%.

Other European banks also fared badly for the second day, with Germany’s Commerzbank and Deutsche Bank and the UK’s Barclays and Royal Bank of Scotland all 8% to 10% lower.

In the US, Bank of America fell 6.3%, while Morgan Stanley was down 8% at the close of trading.

Read moreEurozone Debt Crisis: Markets Dive On Greek Referendum … Dax -5% … Cac 40 -5.38% (Societe Generale -16.2%)

Study Confirms Huge Concentration Of Corporate Ownership – One Super Corporation Runs The Global Economy


The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue (Image: PLoS One)

Revealed – the capitalist network that runs the world (New Scientist, Oct. 19, 2011):

AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).

“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”

Read moreStudy Confirms Huge Concentration Of Corporate Ownership – One Super Corporation Runs The Global Economy

Derivative Time Bomb: Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure

Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On An FX Derivative Time Bomb? (ZeroHedge, Sep. 24, 2011):

The latest quarterly report from the Office Of the Currency Comptroller is out and as usual it presents in a crisp, clear and very much glaring format the fact that the top 4 banks in the US now account for a massively disproportionate amount of the derivative risk in the financial system. Specifically, of the $250 trillion in gross notional amount of derivative contracts outstanding (consisting of Interest Rate, FX, Equity Contracts, Commodity and CDS) among the Top 25 commercial banks (a number that swells to $333 trillion when looking at the Top 25 Bank Holding Companies), a mere 5 banks (and really 4) account for 95.9% of all derivative exposure (HSBC replaced Wells as the Top 5th bank, which at $3.9 trillion in derivative exposure is a distant place from #4 Goldman with $47.7 trillion). The top 4 banks: JPM with $78.1 trillion in exposure, Citi with $56 trillion, Bank of America with $53 trillion and Goldman with $48 trillion, account for 94.4% of total exposure. As historically has been the case, the bulk of consolidated exposure is in Interest Rate swaps ($204.6 trillion), followed by FX ($26.5TR), CDS ($15.2 trillion), and Equity and Commodity with $1.6 and $1.4 trillion, respectively. And that’s your definition of Too Big To Fail right there: the biggest banks are not only getting bigger, but their risk exposure is now at a new all time high and up $5.3 trillion from Q1 as they have to risk ever more in the derivatives market to generate that incremental penny of return.

Read moreDerivative Time Bomb: Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure

‘Here Is what The Fed Didn’t Want You To Know’: ‘Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans’ (Bloomberg, Aug 22, 2011 – Video)


YouTube Added: 22.08.2011

Wall Street Aristocracy Got $1.2 Trillion in Fed’s Secret Loans (Bloomberg, Aug 22, 2011):

Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.

Read more‘Here Is what The Fed Didn’t Want You To Know’: ‘Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans’ (Bloomberg, Aug 22, 2011 – Video)

10 Banks Own 77 Percent Of All US Banking Assets

Too Big To Fail?: 10 Banks Own 77 Percent Of All U.S. Banking Assets (The Economic Collapse, July 18th, 2011):

Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were “too big to fail” and that was why it was necessary for the federal government to step in and bail them out.  The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill.  Congress was told that if the “too big to fail” banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression.  Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system.  Instead, the “too big to fail” banks just keep getting larger and larger and larger.  Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets.  Today, the top 10 banks control 77 percent of all U.S. banking assets.  Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage.  They are incredibly unstable and they could start coming apart again at any time.  None of the major problems that caused the crash of 2008 have been fixed.  In fact, the U.S. banking system is more centralized and more vulnerable today than it ever has been before.

It really is difficult for ordinary Americans to get a handle on just how large these financial institutions are.  For example, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.

Read more10 Banks Own 77 Percent Of All US Banking Assets

The Real ‘Margin’ Threat: $600 TRILLION In OTC Derivatives, A Multi-Trillion Variation Margin Call, And A Collateral Scramble That Could Send US Treasurys To All Time Records…

The Real “Margin” Threat: $600 Trillion In OTC Derivatives, A Multi-Trillion Variation Margin Call, And A Collateral Scramble That Could Send US Treasurys To All Time Records… (ZeroHedge, June 6, 2011)

Hong Kong Mercantile Exchange’s 1 Kilo Gold Contract To End Comex Gold Futures Trading (And ‘Bang The Close’) Monopoly

‘BTFD!’ (Buy the f****ing dip!)

(… but only in the form of physical gold and silver.)


30 years ago, Bunker Hunt, while trying to demand delivery for virtually every single silver bar in existence, and getting caught in the middle of a series of margin hikes (sound familiar), accused the Comex (as well as the CFTC and the CBOT) of changing the rules in the middle of the game (and was not too happy about it). Whether or not this allegation is valid is open to debate. We do know that “testimony would reveal that nine of the 23 Comex board members held short contracts on 38,000,000 ounces of silver. With their 1.88 billion dollar collective interest in having the price go down, it is easy to see why Bunker did not view them as objective.” One wonders how many short positions current Comex board members have on now. Yet by dint of being a monopoly, the Comex had and has free reign to do as it pleases: after all, where can futures investors go? Nowhere… at least until now. In precisely 9 days, on May 18, the Hong Kong Mercantile exchange will finally offer an alternative to the Comex and its alleged attempts at perpetual precious metals manipulation.

From Commodity Online:

The Hong Kong Mercantile Exchange (HKMEx) has received authorisation from the Securities and Futures Commission and will make its trading debut on May 18, 2011 with the 1-kilo gold futures contract offered in US dollars with physical delivery in Hong Kong.

Read moreHong Kong Mercantile Exchange’s 1 Kilo Gold Contract To End Comex Gold Futures Trading (And ‘Bang The Close’) Monopoly

Massive CDS Price Manipulation Scandal Erupts, EVERYONE Implicated!

Back in March of 2009 Zero Hedge, once again a little conspiratorially ahead of its time, solicited reader feedback on a key topic: CDS pricing manipulation, involving in addition to key cartel banks, such “independent” pricing services as MarkIt. We said: “Zero Hedge has received some troubling info (like there isn’t enough) regarding major pricing discrepancies between certain securities pricing services.

The services include companies such as IDC, Advantage Data, Markit and others. While I will not disclose which one may be a culprit, the allegation is that one (or more) are providing substantially above market pricing levels, specifically as pertains to distressed securities.” Then back in August 2010, we followed up by explaining that it is the ongoing price manipulation scheme, in addition to other factors, that allows Goldman Sachs (and other CDS dealers to a much lesser extent) to constantly generate massive profits from trading an opaque off-exchange product like CDS. It took two years and a month for others to take notice of this inquiry, although naturally not in that slum of corruption and market manipulation, the United States of America, but in Europe. Bloomberg reports: “Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and other 14 other investment banks face a European Union antitrust probe into credit-default swaps for companies and sovereign debt, regulators said. …The European Commission said it opened two antitrust probes. It will check whether 16 bank dealers colluded by giving market information to Markit, a financial information provider.” So while some post flow charts explaining the hilarity behind conspiracy theories, others actually expose the facts that today are a conspiracy and tomorrow are a full blown criminal investigation.

From Bloomberg Apr 29, 2011:

“Lack of transparency in markets can lead to abusive behavior and facilitate violations of competition rules,” said the EU’s antitrust chief, Joaquin Almunia, in an e-mailed statement. “I hope our investigation will contribute to a better functioning of financial markets.”

Global regulators have sought to toughen regulation of credit-default swaps saying the trades helped fuel the financial crisis. Lawmakers in the EU plan to encourage the use of clearinghouses and transparent trading systems. CDS are derivatives that pay the buyer face value if a borrower defaults.
Possible Collusion

JPMorgan, Bank of America Corp. (BAC), Barclays Plc (BARC), BNP Paribas (BNP) SA, Citigroup Inc. (C), Commerzbank AG (CBK), Credit Suisse Group AG (CSGN), Deutsche Bank AG (DBK), Goldman Sachs, HSBC Holdings Plc (HSBA), Morgan Stanley, Royal Bank of Scotland Group Plc (RBS), UBS AG (UBSN), Wells Fargo & Co. (WFC), Credit Agricole SA (ACA) and Societe Generale (GLE) SA will be investigated for possible collusion in giving “most of the pricing, indices and other essential daily data only to Markit.”

Read moreMassive CDS Price Manipulation Scandal Erupts, EVERYONE Implicated!

Morgan Stanley Property Fund fails to Make $3.3 Billion In Debt Payments On Tokyo Property, Largest Repayment Failure Of Its Kind In Japan

Morgan Stanley walked away because they know what will soon happen to Tokyo (Just wait until the wind turns! According to the weather forecast this will happen on Monday and Tuesday).

The banksters leave Tokyo, because they know about the melting fuel rods (containing plutonium) and they know that we are not told the truth about the condition of the reactors.


(Reuters) – A Morgan Stanley property fund failed to make $3.3 billion in debt payments by a deadline on Friday, handing over the keys to a central Tokyo office building to Blackstone (BX.N) and other investors, the largest repayment failure of its kind in Japan.

It marks the latest fallout from a series of highly leveraged investments by Morgan Stanley (MS.N), one of the most aggressive investors in worldwide property markets before the global financial crisis.

The $4.2 billion MSREF V real estate fund missed its April 15 deadline to repay 278 billion yen($3.3 billion) worth of debt packaged in commercial mortgage-backed securities on the 32-storey Shinagawa Grand Central Tower, a property which has seen its value plunge, two people involved in the transaction said.

They spoke on condition of anonymity due to the sensitive nature of the matter.

Read moreMorgan Stanley Property Fund fails to Make $3.3 Billion In Debt Payments On Tokyo Property, Largest Repayment Failure Of Its Kind In Japan

Matt Taibbi: Why Isn’t Wall Street in Jail? (Rolling Stone)

Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them


Illustration by Victor Juhasz

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. “If the allegations in these settlements are true,” says Jed Rakoff, a federal judge in the Southern District of New York, “it’s management buying its way off cheap, from the pockets of their victims.”

To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. “You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street,” says a former congressional aide. “That’s all it would take. Just once.”

But that hasn’t happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.

Just ask the people who tried to do the right thing.

Read moreMatt Taibbi: Why Isn’t Wall Street in Jail? (Rolling Stone)

Federal Reserve Made $9 Trillion In Emergency Overnight Loans

Related articles:

Federal Reserve Withholds Collateral Data for $885 Billion in Financial-Crisis Loans

UK Banks Borrowed More Than $1 Trillion From US Federal Reserve

Has the Federal Reserve become the central bank of the world?

Federal Reserve to Name Recipients of $3.3 Trillion in Aid During Crisis



Top recipients of overnight loans made by the Federal Reserve under special program that ran from March 2008 through May 2009.

NEW YORK (CNNMoney.com) — The Federal Reserve made $9 trillion in overnight loans to major banks and Wall Street firms during the financial crisis, according to newly revealed data released Wednesday.

The loans were made through a special loan program set up by the Fed in the wake of the Bear Stearns collapse in March 2008 to keep the nation’s bond markets trading normally.

The amount of cash being pumped out to the financial giants was not previously disclosed. All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed — an annual rate of between 0.5% to 3.5%.

Still, the total amount was a surprise, even to some who had followed the Fed’s rescue efforts closely.

“That’s a real number, even for the Fed,” said FusionIQ’s Barry Ritholtz, author of the book “Bailout Nation.” While the fact that the markets were in trouble was already well known, he said the amount of help they needed is still surprising.

“It makes it very clear this was a very serious, very unusual situation,” he said.

Read moreFederal Reserve Made $9 Trillion In Emergency Overnight Loans

Wall Street’s War

Congress looked serious about finance reform – until America’s biggest banks unleashed an army of 2,000 paid lobbyists

wall-streets-war
This article originally appeared in RS 1106 from June 10, 2010.

(Rolling Stone Magazine) — It’s early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act – the massive, year-in-the-making effort to clean up the Wall Street crime swamp – word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once-indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.

The real shocker is a thing known among Senate insiders as “716.” This section of an amendment would force America’s banking giants to either forgo their access to the public teat they receive through the Federal Reserve’s discount window, or give up the insanely risky, casino-style bets they’ve been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street’s most lucrative profit centers: Five of America’s biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan’s trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.

Read moreWall Street’s War

Morgan Stanley created a cluster of investments doomed to fail, then bet against them

Related article: US Probes Morgan Stanley

Somehow this reminds me of:

JPMorgan Employee Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade

Banksters!


Morgan Stanley

May 14 (Bloomberg) — In June 2006, a year before the subprime mortgage market collapsed, Morgan Stanley created a cluster of investments doomed to fail even if default rates stayed low — then bet against its concoction.

Known as the Baldwin deals, the $167 million of synthetic collateralized debt obligations had an unusual feature, according to sales documents. Rather than curtailing their bets on mortgage bonds as the underlying home loans paid down, the CDOs kept wagering as if the risk hadn’t changed. That left Baldwin investors facing losses on a modest rise in U.S. housing foreclosures, while Morgan Stanley was positioned to gain.

“I can’t imagine anybody would take that bet knowingly,” said Thomas Adams, a former executive at bond insurers Ambac Financial Group Inc. and FGIC Corp. who is now a partner at New York-based law firm Paykin Krieg & Adams LLP. “You’re overriding the natural process of risk-mitigation.”

Morgan Stanley and rivals remain embroiled in a Securities and Exchange Commission probe, started at least a year ago, that’s examining whether Wall Street misled investors when selling mortgage-linked securities.

Read moreMorgan Stanley created a cluster of investments doomed to fail, then bet against them

US Probes Morgan Stanley

And nothing will happen, unless the elite wants it to happen.


Prosecutors Look at Mortgage Securities; Firm Says It Hasn’t Been Contacted

Morgan Stanley

U.S. prosecutors are investigating whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against, people familiar with the matter said, in a step that intensifies Washington’s scrutiny of Wall Street in the wake of the financial crisis.

Morgan Stanley arranged and marketed to investors pools of bond-related investments called collateralized-debt obligations, or CDOs, and its trading desk at times placed bets that their value would fall, traders said. Investigators are examining, among other things, whether Morgan Stanley made proper representations about its roles.

Among the deals that have been scrutinized are two named after U.S. Presidents James Buchanan and Andrew Jackson, a person familiar with the matter said. Morgan Stanley helped design the deals and bet against them but didn’t market them to clients. Traders called them the “Dead Presidents” deals.

Read moreUS Probes Morgan Stanley

Latest Gold Fraud Bombshell: Canada’s Only Bullion Bank Gold Vault Is Practically Empty

Gold bars
Got gold?

Continuing on the trail of exposing what is rapidly becoming one of the largest frauds in commodity markets history is the most recent interview by Eric King with GATA’s Adrian Douglas, Harvey Orgen (who recently testified before the CFTC hearing) and his son, Lenny, in which the two discuss their visit to the only bullion bank vault in Canada, that of ScotiaMocatta, located at 40 King Street West in Toronto, and find the vault is practically empty.

This is a relevant segue to a class action lawsuit filed against Morgan Stanley, which was settled out of court, in which it was alleged that Morgan Stanley told clients it was selling them precious metals that they would own in full and that the company would store, yet even despite charging storage fees was not in actual possession of the bullion.

It appears that this kind of lack of physical holdings by all who claim to have gold in storage, is pervasive as the actual gold globally is held primarily in paper or electronic form. Lenny Organ who was the person to enter the vault of ScotiaMocatta, says “What shocked me was how little gold and silver they actually had.”

Lenny describes exactly how much (or little as the case may be) silver was available – roughly 60,000 ounces. As for gold – 210 400 oz bars, 4,000 maples, 500 eagles, 10 kilo bars, 10 one kilogram pieces of gold nugget form, which Adrian Douglas calculates as being $100 million worth, which is just one tenth of what the Royal Mint of Canada sold in 2008, or over $1 billion worth of gold.

As Orgen concludes: “The game ends when the people who own all these paper obligations say enough and take physical delivery, and that’s when the mess will occur.”

Read moreLatest Gold Fraud Bombshell: Canada’s Only Bullion Bank Gold Vault Is Practically Empty

Goldman Sachs Squeezes Hedge Funds in $110 Billion ‘Collateral Arbitrage’

Goldman Sachs Demands Collateral It Won’t Dish Out

lloyd-c-blankfein-chairman-and-chief-executive-officer-of-goldman-sachs
Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc., speaks during a session on day two of the World Economic Forum in Davos, on Jan. 24, 2008. Photographer: Daniel Acker/Bloomberg

March 15 (Bloomberg) — Goldman Sachs Group Inc. and JPMorgan Chase & Co., two of the biggest traders of over-the- counter derivatives, are exploiting their growing clout in that market to secure cheap funding in addition to billions in revenue from the business.

Both New York-based banks are demanding unequal arrangements with hedge-fund firms, forcing them to post more cash collateral to offset risks on trades while putting up less on their own wagers. At the end of December this imbalance furnished Goldman Sachs with $110 billion, according to a filing. That’s money it can reinvest in higher-yielding assets.

“If you’re seen as a major player and you have a product that people can’t get elsewhere, you have the negotiating power,” said Richard Lindsey, a former director of market regulation at the U.S. Securities and Exchange Commission who ran the prime brokerage unit at Bear Stearns Cos. from 1999 to 2006. “Goldman and a handful of other banks are the places where people can get over-the-counter products today.”

Read moreGoldman Sachs Squeezes Hedge Funds in $110 Billion ‘Collateral Arbitrage’