The Commerce Department said today that retail sales fell by 1.2 percent in May. Although this was a surprise to many economists it has been no surprise to the millions of Americans who are looking for a job, or those that have already thrown in the towel and given up, or for the millions still facing foreclosure.
The US economy has been brought to its knees by the inevitable failure of any meaningful and insightful judgment coming from the Obama administration. Both the president and congress have thrown money in the wrong direction, wasting resources that may cause the US government to find itself in the same place as Greece within the next few years. Yes the banks were saved but at the expense of the US population.
Now after throwing trillions at the banks and a small token at the people, the Federal Reserve under Bernanke is completely lost in its own quagmire of confusion; the system is so completely over run by the bank elite that there is no place in this administration for common sense.
Five banks that set this collapse in motion each KNEW Obama would bring taxpayer aid to their survival. Those banks were Goldman Sachs Group Inc., Deutsche Bank AG, Bear Stearns Cos, Citigroup Inc., and JP Morgan Chase & Co., traders from these banks actually met and devised the instruments to bet against the subprime securities they were themselves promoting, and by playing both sides of the table they couldn’t lose. It was a Las Vegas style Gamble and they took out insurance, literally, taking down AIG and a host of other smaller insurance companies.
Why then did they need a government bailout? Primarily because they actually bankrupted AIG which caused Timothy Geithner from the New York Fed to coerce AIG to pay the banks in full for their second party CDS’s, thus allowing these same banks to be made whole with the exception of Bear Stearns. Why was Bear allowed to fall when the others were not?
Former Bear Stearns chief executive James Cayne, the chairman and CEO said the firm became the first major victim of the financial crisis due to “unfounded rumors”, not because of risky exposures to mortgage-related products with free-falling values.
Bear Stearns in March 2008 experienced essentially a run on the bank as creditors and the markets lost confidence in the institution. Regulators scrambled to find a buyer for the collapsing firm, resulting in a sale to none other than JPMorgan Chase & Co for $10 a share.
Maybe it’s just a coincidence that Bear Stearns was brought to its knees by rumors and ended up in the hands of JP Morgan. In 1907 JP Morgan began a series of rumors that the New York Banks were insolvent causing a similar run which essentially gave Morgan control, and what was accomplished was that which Morgan sought the beginning of the Federal Reserve System where Wall Street actually took control of the US Government.
The belief is that J.P. Morgan actually wanted Bear Stearns. So they arranged it by rumors and a sale, just as they did with Washington Mutual.
On April 17, 2010 the former head of the chief banking regulatory agency that oversaw failed Washington Mutual told lawmakers that the giant savings and loan collapsed because of a run on the bank, not failures by him or other regulators.
Who started the rumors that cause a run on Washington Mutual? Another coincidence Washington Mutual was taken over by non other that JP Morgan Chase who bought it for $2 billion.
Phil Angelides (Crisis Commission) in January accused Goldman Sachs CEO Lloyd Blankfein of treating clients unfairly for creating -- and then betting against -- subprime mortgage-backed securities. And this is essentially what each of these banks did.
Could the US economy have been saved?
Absolutely if that were the real intent of the Obama Administration! But Obama and Congress were to focused on their financial backers to see the forest for the trees, they threw money at the banks, and AIG with the latter allowing the foreclosures to continue, thus giving the banks a twofold profit, the bail out money allowing them to loan it back to the government and the foreclosure where they were paid by AIG and the other institutions that were foolish enough to guarantee these insane investments.
Obama and Congress could have used the same money to bailout both the Banks and the Borrowers, they could have provided the money to the banks per each loan that was modified to reduce the principal and interest. Thereby stopping the onslaught of foreclosures and maintaining a jobs market because there would not have been the financial impact on the economy.
The US Government because they have been substantially absorbed by Wall Street, is now tinkering on the brink of financial collapse. And this collapse is what should have allowed of Wall Street.
Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts
Friday, June 11, 2010
Sunday, May 16, 2010
Is High Frequency Trading “Insider Trading?”
Looking through the secret profit center behind Wall Street is like looking at wonderland through the eyes of Alice . It’s an amazing picture few ever get to see and fewer will ever understand. There are mega bucks floating everywhere. That is except into the pockets of those of us on Main Street who could use a little green coloring.
These HFT’s have been around since the 1990’s, ever fine tuning their computer software, searching for deals where the investors have not yet realized a stock is about to rise or fall, or where an exchange hasn’t provided consumers notice of a recent stock trade.
While billions of dollars are churned in mega seconds sometimes a million dollars and more in a fraction of a millisecond and on only a fraction of a penny profit. The stock market has become a fools paradise, left to the big hedge funds and their inside investors.
How do they work?
One way these traders make money is by exploiting the fact that stock indexes sometimes don't immediately reflect falling or rising prices of their component stocks. If GM shares for example rise 5 percent but an index fund that includes it such as the SPDR S&P 500 lags by a fraction of second to adjust, these HFT computers pick up the lag and buy or sell the stock in fractions of a second reaping large profits. HFT computers will “automatically” buy shares of SPDR S&P 500 at the lower price and then sell them again when they are fully valued, in other words, when the information is released to the general public.
Is this really Insider Trading, we believe it is because the information has not yet been released to the public!
This reminds me of the old days and Ben Siegel, who charged fees from bookmakers for a wire service that transmitted horse racing results. Often allowing bookmakers to lay off bets from a direct source after the race had been concluded.
It appears to be time that the SEC took a real hard look at these high frequency traders to determine if in fact they are trading on information that has not yet been made public.
Since Goldman Sachs is a part of this trading mechanism we need to take a hard look at its legitimacy.
These HFT’s have been around since the 1990’s, ever fine tuning their computer software, searching for deals where the investors have not yet realized a stock is about to rise or fall, or where an exchange hasn’t provided consumers notice of a recent stock trade.
While billions of dollars are churned in mega seconds sometimes a million dollars and more in a fraction of a millisecond and on only a fraction of a penny profit. The stock market has become a fools paradise, left to the big hedge funds and their inside investors.
How do they work?
One way these traders make money is by exploiting the fact that stock indexes sometimes don't immediately reflect falling or rising prices of their component stocks. If GM shares for example rise 5 percent but an index fund that includes it such as the SPDR S&P 500 lags by a fraction of second to adjust, these HFT computers pick up the lag and buy or sell the stock in fractions of a second reaping large profits. HFT computers will “automatically” buy shares of SPDR S&P 500 at the lower price and then sell them again when they are fully valued, in other words, when the information is released to the general public.
Is this really Insider Trading, we believe it is because the information has not yet been released to the public!
This reminds me of the old days and Ben Siegel, who charged fees from bookmakers for a wire service that transmitted horse racing results. Often allowing bookmakers to lay off bets from a direct source after the race had been concluded.
It appears to be time that the SEC took a real hard look at these high frequency traders to determine if in fact they are trading on information that has not yet been made public.
Since Goldman Sachs is a part of this trading mechanism we need to take a hard look at its legitimacy.
Friday, May 14, 2010
Bank Reform
JP Morgan Chase, Goldman Sachs, Bank of America, Citigroup and Wells Fargo invest over 6 million dollars to defeat major bank reform.
The nation's five largest and (as consumers feel), least credible banks which currently dominate the derivatives market; are in Washington armed with carpet bags full of cash. They have marshaled a contingency of trade groups, paid lobbyists and their own executives to convince senators that excluding banks from the derivatives business would make markets less safe.
Just how, is a curious oddity?
The banks reason, that the derivatives are a way of protecting their investments from failure, as they lay off the question of performance on third parties, like AIG for example, well that may be a bad example! But we get the point.
But the notion of excluding banks from the derivative market isn’t the issue. The issue is regulation and transparency of this 100 trillion dollar market.
The financial legislation proposed by the Obama administration and as passed by the House would require “most derivatives” to trade on public exchanges, in the belief that a transparent marketplace will be safer and cheaper. The scope of the exchange trading requirement has been the focus of the debate for months. Opponents argue that the bill would limit the industry's ability to customize derivatives to match the needs of clients. But in most cases they are their own client, except when they sell an instrument that an investor questions.
But, so far it has been the banks that have made small fortunes from the derivatives market, the most recent reminder AIG counterparty contracts with these same 5 banks receiving a concealed bailout from the Obama administration, and timothy Geithner’s requirement that AIG pay the banks 100 cents on the dollar. (Another story here)
According to the Office of the Comptroller of the Currency, Banks reported $22.6 billion in derivatives revenue in 2009. No doubt they used taxpayer bailout money to invest. Goldman Sachs was paid $13bn alone from AIG in 2009
Derivatives are contracts whose value is determined by something else. Trading in derivatives is dominated by these five banks, they were largely used in connection with Mortgage securitization instruments and were a form of insurance against a mortgage default, it is because of this “insurance” that the banks were made whole after a borrower defaulted, and it is because of these same instruments that the banks have NO incentive to work out a loan modification with a defaulting borrower, as they are made whole by these CDS’s (credit default swaps)
The five banks together have assembled more than 130 registered lobbyists, including 40 former Senate staff members and one retired senator, Trent Lott to water down and in most cases, (after their success in defeating the most concerting elements of the reform bill circulating congress), to defeat the latest round, unregistered Derivatives. Included in the list are also former staff members for the Senate majority and minority leaders, the chairmen and ranking members of the banking and finance committees, and more than 15 other senators.
The real issue and the one the banks are prepared to fight no matter how much money they have to throw at our congress, is control of their industry, this is something they will not tolerate, and after all they “are” the real masters of Washington .
The nation's five largest and (as consumers feel), least credible banks which currently dominate the derivatives market; are in Washington armed with carpet bags full of cash. They have marshaled a contingency of trade groups, paid lobbyists and their own executives to convince senators that excluding banks from the derivatives business would make markets less safe.
Just how, is a curious oddity?
The banks reason, that the derivatives are a way of protecting their investments from failure, as they lay off the question of performance on third parties, like AIG for example, well that may be a bad example! But we get the point.
But the notion of excluding banks from the derivative market isn’t the issue. The issue is regulation and transparency of this 100 trillion dollar market.
The financial legislation proposed by the Obama administration and as passed by the House would require “most derivatives” to trade on public exchanges, in the belief that a transparent marketplace will be safer and cheaper. The scope of the exchange trading requirement has been the focus of the debate for months. Opponents argue that the bill would limit the industry's ability to customize derivatives to match the needs of clients. But in most cases they are their own client, except when they sell an instrument that an investor questions.
But, so far it has been the banks that have made small fortunes from the derivatives market, the most recent reminder AIG counterparty contracts with these same 5 banks receiving a concealed bailout from the Obama administration, and timothy Geithner’s requirement that AIG pay the banks 100 cents on the dollar. (Another story here)
According to the Office of the Comptroller of the Currency, Banks reported $22.6 billion in derivatives revenue in 2009. No doubt they used taxpayer bailout money to invest. Goldman Sachs was paid $13bn alone from AIG in 2009
Derivatives are contracts whose value is determined by something else. Trading in derivatives is dominated by these five banks, they were largely used in connection with Mortgage securitization instruments and were a form of insurance against a mortgage default, it is because of this “insurance” that the banks were made whole after a borrower defaulted, and it is because of these same instruments that the banks have NO incentive to work out a loan modification with a defaulting borrower, as they are made whole by these CDS’s (credit default swaps)
The five banks together have assembled more than 130 registered lobbyists, including 40 former Senate staff members and one retired senator, Trent Lott to water down and in most cases, (after their success in defeating the most concerting elements of the reform bill circulating congress), to defeat the latest round, unregistered Derivatives. Included in the list are also former staff members for the Senate majority and minority leaders, the chairmen and ranking members of the banking and finance committees, and more than 15 other senators.
The real issue and the one the banks are prepared to fight no matter how much money they have to throw at our congress, is control of their industry, this is something they will not tolerate, and after all they “are” the real masters of Washington .
Friday, February 12, 2010
Obama tied to FDIC, Wall Street Scam
It all started in June 2008, when the FDIC took control of Indymac Bank, that of itself wasn’t strange as many large banks would collapse over the type of loans and the creative insurance programs these banks invested in.
But what occurred in March 2009 will make your hair stand on edge. It displays the open corruption between the White House, The Banks, and those so well connected to the current administration and Washington insiders.
In March 2009 Indymac Bank was sold to One West Bank, the sale was for 70% of the face value of the mortgages and the HELOC’S at 58%
But the government guaranteed 80% to 95% of the original loan amount, for a short sale or a foreclosure.
Example:
Loan Amount $ 478,000
Add six months interest for failed payments
$ 485,000
One West Bank paid FDIC $ 334,600
Short sale amount $ 241,000
FDIC Guarantee $ 388,000
FDIC paid One West Bank $ 147,000
One West Bank received for the short sale a total of:
$ 241,000
$ 147,000
__________
$ 388,000 a $53,400 windfall plus
The Bank on a short sale took a note from the seller for the shortfall in the amount of $90,000 for a profit of= $143,400
One West Bank made a hefty profit from the taxpayers on this one transaction and it worked the same way on a foreclosure
Now we can see why it benefits the banks to Foreclose or complete a short sale. But wait!
The owners of One West Bank are none other than:
1. George Soros - Obama’s main contributor whom he has already paid back with a 2bn dollar Grant to one of his corporations for off shore oil drilling, and the US has no benefit in the oil:
2. John Paulson - A relative of Treasury Secretary Hank Paulson former Chairman and Chief Executive Officer of Goldman Sachs.
And a former Goldman Sachs VP
Obama Takes good care of his financial supporters and often it’s with our money!
But what occurred in March 2009 will make your hair stand on edge. It displays the open corruption between the White House, The Banks, and those so well connected to the current administration and Washington insiders.
In March 2009 Indymac Bank was sold to One West Bank, the sale was for 70% of the face value of the mortgages and the HELOC’S at 58%
But the government guaranteed 80% to 95% of the original loan amount, for a short sale or a foreclosure.
Example:
Loan Amount $ 478,000
Add six months interest for failed payments
$ 485,000
One West Bank paid FDIC $ 334,600
Short sale amount $ 241,000
FDIC Guarantee $ 388,000
FDIC paid One West Bank $ 147,000
One West Bank received for the short sale a total of:
$ 241,000
$ 147,000
__________
$ 388,000 a $53,400 windfall plus
The Bank on a short sale took a note from the seller for the shortfall in the amount of $90,000 for a profit of= $143,400
One West Bank made a hefty profit from the taxpayers on this one transaction and it worked the same way on a foreclosure
Now we can see why it benefits the banks to Foreclose or complete a short sale. But wait!
The owners of One West Bank are none other than:
1. George Soros - Obama’s main contributor whom he has already paid back with a 2bn dollar Grant to one of his corporations for off shore oil drilling, and the US has no benefit in the oil:
2. John Paulson - A relative of Treasury Secretary Hank Paulson former Chairman and Chief Executive Officer of Goldman Sachs.
And a former Goldman Sachs VP
Obama Takes good care of his financial supporters and often it’s with our money!
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