September 13, 2008
Elaine Meinel Supkis
Like in the Hitchock movie, Paulson and Bernanke are being assaulted by 'raptors'. These black birds are of course, short selling gnomes with enough money to do business. Yikes! The bankers want more money so they can be bankers. And the only ones left with money are raptors and the Tippi Hendrin clone, Bernanke.
Tomorrow is Sunday so the high priests of American finance can finagle a rescue operation. Saturday being a high holy day, they can't drive a car or make deals. So tomorrow, we learn how Merrill Lynch will be chopped up and fed to the others who are what? Raptors! Holy flying magical piggy banks!
Paulson, Bernanke Brave `Raptors,' Resist Lehman Aid
(Bloomberg) -- Henry Paulson and Ben S. Bernanke may have to weather more speculative attacks on financial institutions as they resist using public funds to aid the sale of Lehman Brothers Holdings Inc.``The raptors test the fence for weak spots,'' said Vincent Reinhart, a former director of the Federal Reserve Board's Division of Monetary Affairs who is now a resident scholar at the American Enterprise Institute in Washington. ``The speculators think the authorities will blink, and the authorities think the speculators will run out of funds.''
By shutting the door on assistance for Lehman, Treasury Secretary Paulson and Fed Chairman Bernanke accelerated a plunge in the shares of other institutions perceived to face similar capital constraints. Merrill Lynch & Co., American International Group Inc. and Washington Mutual Inc. fell yesterday after a person familiar with Paulson's thinking said he was ``adamant'' that no government money be used in resolving Lehman's shortage of funds. Fed officials are taking a similar stand.
Here is an amusing quick review of the famous movie, 'The Birds' by A. Hitchock:
I suppose I should watch out for rapine chickadees with sharp beaks! Actually, the insiders who are the same clowns who are bribing our politicians to hand over our entire nation to them are meeting tonight to figure out how to save their own hides but not let us know that we are now stuck with paying for their messes.
Saving Merrill Lynch is a breeze if they could simply ignore the public. Instead, they have to break their heads trying to cook up some sort of con game that might fool us. Just as they have tried to fool us with the Bankruptcy Bill, the Housing Rescue Bill and other useless or dangerous schemes that makes us pay for all errors, lending mistakes, etc. They want our money! And they want it now!
The mysterious raptors are other pirates, hell hounds and sovereign wealth fund drivers who are shorting the big investment banks. These, in turn, are in trouble because they have no capital. Their genius presidents all collect the biggest bonuses and pay on earth. But that is PRIVATE money! They don't want to lose this. They have to figure out a scheme whereby their giant incomes are saved while all the downside risks are loaded onto Uncle Sam and the US tax payers. This is very unpopular and thus the teeth gnashing while wailing and waving the arms to drive off the raptors who are diving out of the sky to attack these clowns.
Downtown windows shattered by Ike's strength
ABC13 reporter Jeff Ehling witnessed first-hand the powerful winds while looking for damage in downtown Houston.All windows on one side of JP Morgan Chase building were blown out. The blinds looked like fringe as the winds were whippping through the buildings. Windows in at least 10 to 15 floors were blown out. Debris could be seen flying out of the building and pieces of ceiling insulation were all over the roadway.
Hurricane Ike made downtown Houston look like the aftermath of the attack of the Crimson Permanent Assurance pirates.
Merrill now in shorts' sights as Lehman crumbles
(Reuters) - The crisis of confidence in Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) has led to fallout throughout the financial sector -- especially for larger rival Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz).The problem for Merrill is that short-sellers regard it as the next weakest investment bank after the crumbling Lehman and the crumbled Bear Stearns, which was sold at a firesale price in March.
*snip*
Merrill Lynch has been one of the hardest hit firms over the course of the year-old credit crisis, posting well over $40 billion in write-downs and credit losses and selling valuable assets to raise capital.
We have only a handful of top investment banks. And one by one, they are crashing. This is very, very much like 1930-1933. These banks aren't failing because the US has been in an economic downturn this last 10 years and they are finally going under. The US was in this huge bubble/bubble series of markets! Growing like crazy and then boom! The BANKS fell apart BEFORE anyone else was really going bankrupt! It took only a handful of homebuyers going belly up for the banks to totally collapse. The housing bubble busted in the beginning of 2006. And the banking crisis began at the end of 2006.
The cause/effect is obvious: there is NO WAY home owners defaulting could cause INTERNATIONAL banking collapse costing trillions of dollars. Only after defaults rose for two years, has it gone this far! But the banking collapse began quite suddenly at the end of February, 2007. Not this year. The fact that the entire system is helplessly failing is a sign, this is a fundamental problem, not one of a few homeowners defaulting on hasty mortgages.
AIG Shares Tumble On Capital Concerns
Shares of American International Group, the nation's largest insurance company, plunged yesterday on fresh fears that it will have trouble remaining on firm financial footing as a result of the turmoil in the mortgage market.AIG's shares fell $5.41, or 31 percent, to $12.14, the lowest point in 15 years and 83 percent below the 52-week high reached in October. The company joined a handful of other big U.S. financial institutions in suffering severe declines this week. Shares of mortgage giants Fannie Mae and Freddie Mac, taken over by the government last weekend, and investment bank Lehman Brothers lost most of their value this week.
Right when the entire 'financial' sector went off the cliff, we were told in England and America, financials would be our new 'industry' and we didn't need factories like in China or Japan. No, we were going to be bankers! But the financial sector is LEADING the way downwards. All others are now following, even commodity markets. This is how depressions evolve. Banks collapse and then all other commerce and trade collapses.
This graph shows us how the derivatives mess is unwinding. The cost of insuring credit default swaps has shot upwards in two huge spikes. Each one is the gravestone of a major investment bank sinking and dying. Each one is bigger than the last so we can expect the final 5 to be epic. This is when insurance costs equals the money being protected. This is how hedging works: when the two are identical in size, both die. How's that for magical?
When they diverge, all is well. Money is made because there is no perception of risk. Note that in the beginning of 2007, they were all certain, the risks of defaults was nearly impossible. By 7/7/7, the risks were titanic. Defaults, painfully obvious. Since then, the risk costs have been several multiples higher than in 2006.
Warning: 30 airlines will go bust this year
Willie Walsh said the scenes of chaos in which 85,000 passengers have been stranded at locations around the world after the collapse of XL, Britain's third largest holiday company, would become a familiar sight as the travel industry struggled with soaring fuel costs and the effects of a global economic downturn."We are in the worst trading environment the industry has ever seen", said Mr Walsh. "We have already seen 30 or so airlines go bust this year and it would be fair to expect a similar number of casualties worldwide over the next three to four months."
Much of the US trade balance is based on Boeing sales. Boeing knows that sales will collapse. They know that contracts will be dropped. So they provoked a strike. This is a cool way to not pay workers while sales fall. If the workers stay on strike long enough, Boeing will have an easy time telling everyone, 'So sorry, our workers are on strike.' But then, Boeing is the party that provoked this strike. Quite cynically. We shall see more of these as time passes.
The price of oil matters a lot. Endless professors and politicians have worked hard to try to convince us that economic collapses and oil are unrelated. This is total nonsense. Now that we have seen this once again, it should be crystal clear, there is a direct and obvious connection. Airlines are going to go kaput because of the high cost of oil. The high cost of oil causes inflation and this makes credit expensive [EXCEPT IN JAPAN!]. So here we are, yet again: the ripples of high oil prices will destroy whole sectors of world trade.
Calling US Bonds Home !!!
Jim Willie CB
More crucial than ever, observers must take the broader perspective that avoids overhearing the party on Wall Street. They know not what they celebrate. It is their demise. They rejoice over the collapse of mortgage bonds and now the mortgage centrifuge with a big fat fanny. They rejoice over collapse of Lehman Brothers. They rejoice over the disaster du jour offered at the financial lunch table. In the past two months, a remarkable sequence of events has taken place regarding US$-based bonds. They have been called home, a demand to be brought back to US shores. While Wall Street and the key financial USGovt ministries celebrate the rise in the USDollar that results immediately, few seem to realize that something much more important is happening.Imagine a company calling to the corporate laboratory all defective devices, in order to prevent them from exploding in customer faces. The lab sends the collection of destructive items into a remote abandoned field so they can explode safely. That is the analogy, except that the US financial arena cannot explode the USTreasury Bonds and USAgency mortgage bonds safely. As they crater, implode, or default, the system is killed.
Bonds and bears: they have the same mother. They are also viewed as 'raptors' by the central bankers and their crummy buddy banking gnomes. Planetary money flows are very connected with trade. And trade is way unbalanced. So we will see all sorts of attempts at balancing things via bonds and other brutal methods. Will this work?
I seriously doubt it.
Pope in Paris condemns love of money, power
"Has not our modern world created its own idols?" Benedict said in his homily, and wondered aloud whether people have "imitated, perhaps inadvertently, the pagans of antiquity?""This is a question that all people, if they are honest with themselves, cannot help but ask," the pontiff said. *snip*
Paraphrasing from the New Testament, Benedict decried "insatiable greed" and said "the love of money is the root of all evil.""Have not money, the thirst for possessions, for power and even knowledge, diverted man from his true destiny?" the pope asked.
In his homily, Benedict blasted modern society's thirst for these new "pagan" idols as a "scandal, a real plague."
Demons will have fun tormenting this dweller in one of the world's biggest palaces. And how DARE this fool attack the goddesses? Paganism, unlike Christianity, has a very good idea as to how wealth is created and how to control it. The people who refuse to understand this are the religious people who deny there are any goddesses! People who worship a god that has really dangerous ideas about this planet. He or rather, it, has only one solution to all problems: kill everyone!
And believes in torturing people for all eternity. Well, he or it can torture the Pope. Meanwhile, I will go off to Olympus and hang out with the gang who romps there. It is definitely much more fun. For we get to eat, drink and be merry. Or maybe not. If we end up with the goddesses who control the Cave of Death....best not to think about all this.
Maybe I should become a banker. Ask Bernanke for a trillion dollars. I can put this in a cave here on my mountain and chain three English Mastiffs at the entrance. Maybe hire a gnome to do the accounting. Naw, he would probably pester me.
Forget the funny money. I want gold. Yes, a cave filled with gold. Then I can save the bankers from their follies. Except their follies are far too big for even a trillion dollar rescue. Well, I could invest in Asian industries....yes, that's the plan.
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