November 3, 2007
Elaine Meinel Supkis
Once again, stocks rose on FAKE news. The employment numbers are pure fiction. If inflation statistics are science fiction then the employment figures belong in the 'Harry Potter Magic Books' section of the library. Tier 3 assets which are those horrid little ABX-He babies, must be valued in real terms by January so I expect a flood of red ink to pour out of many slit wrists on Wall Street soon. And three major risk-insurers of these speculators and wild cat lenders are now going under rapidly. Time to visit not only these three but Goldman Sachs and Citigroup. The Saudis are getting razor-wielding mad over the weak dollar. And a news story just in: stock analyst, Meredith Whitney is blamed for all the bad news and people are sending her death threats! Wow.
Credit derivative traders are valuing bond insurers Ambac Financial Group (ABK.N: Quote, Profile , Research) and MBIA Inc (MBI.N: Quote, Profile , Research) as deep junk credits, while their stock prices have also plunged on concerns the companies may need more capital to shore up their high ratings.Credit default swaps on Ambac have surged to around 620 basis points, or $620,000 per year for five years to insure $10 million in debt, from 185 basis points a month ago, according to data provided by CMA DataVision.
Its shares have tumbled nearly 60 percent since the beginning of October, 41 percent this week alone.
Ambac and MBIA both reported third-quarter losses last week caused by their writing down the market value of their respective credit derivative portfolios, which are used to insure assets including residential mortgages against default.
This is a major failure. This is deep beneath the surface of the waters, like the Titanic ripping its hull underwater, these organizations we will visit tonight are similar: they are the hull of the banking system. They are the ones who are supposed to protect the banking system from failure and they are now failing, themselves. This is serious.
During the entire banking collase that became obvious after August 15th but started really at the end of February, 2007, we can see more and more clearly how this is evolving as time passes. I still remember February [not yet senile!] and back then, everyone thought that China caused the wobble that clearly showed many weaknesses in our economic system. I disagreed with that prognosis and I predicted that China and Japan would engage in a series of vicious tit-for-tat currency battles because China was angry that Japan was allowed to peg the dollar while China got no reward for raising the value of the yuan.
This battle has gotten even worse and during the time frame where China was strong-arming the yen from falling to 130 to the dollar up to 115 to the dollar, the world's banking system froze up and then collapsed! Odd, wasn't it, that both the Bank of Japan and the Bank of China were the only major banks NOT hit in August? I remarked on that and used that as proof, they were toying with each other's currencies and not playing the games that are roiling the other markets.
Indeed, as the central banks in Europe and America churn out massive amounts of money causing global inflation, China and Japan have massively increased their FOREX reserves this last three months! Which is the exact opposite of what the old British Empire, the US and Europe have been doing.
Knowing this background, it is time to look at the effects of this major banking collapse which is bigger, I think, than the previous 3 banking collapses I have seen in the past.
CDS traders warn of 'blood on streets'
Bond insurers, or monolines, were also hit hard."[These triple-A rated companies are] exposed to the crumbling housing market," said Gavan Nolan, an analyst at derivatives data provider Markit. "Investors in monolines will be waiting for the coming months of housing data with trepidation," Mr Nolan said. CDS on MBIA Insurance rocketed to a four-year high, of 345bp, CMA Datavision said.
Last week the insurer posted $36.6m net loss and halted its share buy-back programme. Contracts on the bond insurance unit of Ambac Financial climbed to a five-year high of 310bp. Gimme Credit, an independent research term, downgraded both MBIA and Ambac this week.
When the AAA rating is dropped, this means one has to pay a higher interest rate because one looks more and more like the bastard sons of Miz Risky, that wench, that wild female who sleeps around and parties all the time and who goes to Vegas at the drop of her panties, no one trusts Risky or her children! But all speculators love her to death. Insurance groups that are supposed to be hedging banks and lenders can't afford to look like Risky's kiddies, they have to appear sober and clean, not drunk and staggering about the place. But who is going to replace these organizations that messed up?
First, I would suggest they never had insured these CDOs and tranches in the first place. Like Moody's and others who also decided they wanted to play footsie with Risky, these guys threw caution to the winds and embraced an obvious old whore and kissed her and got the cooties. Yuck. Well, serves them right!
10's of billions of dollars of securities have been downgraded since the beginning of October and this will require that they be sold in a timely manner. Once those securities hit the markets we will know their true value, and it won't be pretty. The super SIV will quickly become an exercise in wishful thinking as their “high quality” paper becomes junk in the maelstrom of liquidation which increases every time a security is downgraded. The super SIV's whole reason for being was to prevent fire sales and price discovery. Some of the Triple AAA CDO's fell to 57 cents - aka Junk territory. More and more is slated to become so. Every sub index of elements (AAA, AA, A etc.) of the structured products has crashed since October 1. The carnage of losses is staggering!Bond insurers Radian, Ambac and MBIA shares' are in freefall, not only from the projected losses from their insurance of CDO's and structured products, but state and municipal finances in the US are in freefall as well. Many Muni bond holders face BIG problems in the coming year. What will you do if a state or municipality goes bust and the insurance company guaranteeing their bonds does also? The real estate boom inflated their tax incomes and now is deflating them. I live in Chicago and they are angling to raise taxes 1 billion dollars, and it is no different in any other city or state in America . Soon you can add Europe to the list as the real estate BUBBLE is in a precarious position around the globe.
The attempt at passing off all of Risky's offspring to Japan and China have failed. I noted just one month ago, the exposure Asia has to these lousy CDOs, ABX-HEs, Sub-primate this and that, is quite marginal. Most of it is held right here in the US/EU/UK empire! The day dreams of dumping our debts into Asia's laps and then running off with Risky to have more booze and sex is not going to happen. Nor should we want this. Japan can't nuke us. China certainly can and will.
Anyway, it is time to get on our broomsticks and fly off to Amback, MBIA and Radian to see how they are handling this crisis.
NEW YORK, October 10, 2007 -- Ambac Financial Group, Inc. (NYSE:ABK) today announced the results of its third quarter fair value review of its outstanding credit derivative contracts. Ambac's estimate of the fair value or "mark-to-market" adjustment for its credit derivative portfolio at September 30, 2007 amounted to an unrealized loss of $743 million, pre-tax. The company expects to report a net loss per diluted share up to $3.50 in the third quarter. Earnings measures reported by research analysts are on an operating basis and exclude the net income impact of mark-to-market gains and losses on credit derivative contracts, as well as certain other items. The company expects to report positive operating earnings(1) per diluted share between $1.85 and $1.90 in the third quarter.Commenting on the estimated result, Ambac Chairman and Chief Executive Officer, Robert J. Genader, stated, "While this unrealized loss is disappointing, it is important to note that Ambac's credit derivative contracts are similar to our insurance policies in that neither is exposed to the liquidity risks that are typically embedded in standard derivative contracts." Mr. Genader added, "While the turmoil in the structured finance markets has resulted in this unfavorable unrealized mark-to-market for the quarter, we have observed significantly improved market conditions for the industry and I am encouraged by the recent increased interest in our core financial guaranty product. Moreover, I remain confident in our underwriting abilities, credit standards and the transactions we have insured."
That is their next to last communication. The ship is not sinking. They are bailing as fast as they can and they expect no more icebergs ahoy and if we see the glasses, dishes and silverware sliding off the tables in the diningroom, this is our imagination. After all, our own government assures us that the banking crisis was brief and no big deal and the cold water around our ankles is good for our health. Cheers!
From Ambac's financial page:
Estimated Third Quarter 2007Net loss per diluted share ($3.50)
Effect of net security losses $5.35
Operating earnings per diluted share $1.85
A tiny bit of red ink! Of course, this is old news. The listing of this ship has become quite severe in the following 3 weeks and now it is clear to many, we need to get to those life boats as soon as possible! I am beginning to very strongly suspect that the hell hounds and pirates are all buying gold like mad right now because that is shooting up in price while many pre-crash pirate goodies are being dropped like green fuzzed hard tack rations at sea. If all were so good with Ambac, they wouldn't be facing degradation, would they?
NEW YORK, October 24, 2007--Ambac Financial Group, Inc. (NYSE: ABK) (Ambac) today announced a third quarter 2007 net loss of ($360.6) million, or ($3.51) per diluted share. This compares to third quarter 2006 net income of $213.5 million, or net income per diluted share of $1.98. The decrease is due to the previously announced unrealized loss on credit derivative exposures amounting to ($743.4) million, or ($5.29) per diluted share in the third quarter 2007. The third quarter 2007 unrealized mark-to-market loss on credit derivative exposures was discussed in a press release dated October 10, 2007, and is primarily the result of unfavorable market pricing of collateralized debt obligations. As further described below, net mark-to-market losses on credit derivatives are excluded from the earnings measures used by research analysts.
OOPS. The water is a tad higher, isn't it? Of course, astute readers of the markets could have predicted these losses. I certainly expected this. But the need to not face reality is very strong. This is why half of the boats launched by the Titanic's captain were only half full. He really thought the ship was going to make it through the night above the deep blue sea.
Losses increased by nearly 100%. Um, that goes in the 'bad news' catagory. Naturally, all executives would rather tell us happy stories. This is true with everyone. People who give bad news all the time are not enjoyable to read which is why I joke all the time. How else does one deal with a stream of bad news? Normally, I would like to discuss things in a less unhappy strain but we are in interesting times, alas.
Ambac:
U.S. structured finance credit enhancement production increased from the prior year, driven by strong writings of student loan securitizations and utilities deals during the quarter. The structured finance markets experienced lower volumes during the quarter, impacted by the severe disruption caused by concern over subprime mortgages. However, interest in our financial guaranty product has increased, credit spreads have widened substantially across the structured finance arena, and pricing has generally improved. During the third quarter 2007, Ambac did not write any collateralized debt obligations of asset-backed securities (CDOs of ABS) or subprime residential mortgage-backed securities.International credit enhancement production increased significantly driven by the large Eurotunnel transaction and several other significant transactions across a variety of geographic locations. During the quarter Ambac closed deals in seven different countries including three each in the U.K. and Australia.
Several things: Ambac, like many others, has totally abandoned the RMBC markets. No more housing loans from them! They won't back any CDOs in the ABS system. We might even dare call this the ABySs in the Deep Debt Seas. They will do student loans! Why is this?
Thank Congress. They made is impossible for anyone to get rid of student debts via bankruptcy. Indeed, the push to make ALL loans impossible to escape is very high on the 'to do' agenda of all the reckless lenders. Keeping people strung out on past debts for their entire lives is the way this game is played. As people go bankrupt, the need to make debts eternal, grows.
Ambac:
Case basis loss reserves (loss reserves for exposures that have defaulted) increased $59.8 million during the third quarter of 2007 from $47.3 million at June 30, 2007 to $107.1 million at September 30, 2007. The increased case reserves relate primarily to two RMBS transactions that are underperforming original expectations. Total net claim receipts during the quarter amounted to $3.7 million.
In just 3 months, their losses more than doubled! OUCH. Or rather, help! We are drowning in red ink! Indeed, all the insuring organizations we are visiting tonight saw similar numbers and all were due to the same banking system collapse in the West.
Oct. 25, 2007--MBIA Inc. (NYSE: MBI), the holding company for MBIA Insurance Corporation, today reported that net income per share for the first nine months of 2007 was $2.84, compared with $4.67 during the same period of 2006. In the first nine months of 2007, net income was $373.8 million, down 41 percent compared with $638.3 million in the same period last year.The decline was due to a pre-tax net loss of $352.4 million, or $1.80 per share, that the Company recorded in the third quarter on financial instruments at fair value ("marked-to-market") and foreign exchange. The loss was a consequence of wider spreads affecting the valuation of the Company's structured credit derivatives portfolio. Compared with the previous quarter, spreads widened significantly on Commercial Mortgage-Backed Securities (CMBS) collateral and on other asset-backed collateral in the Company's structured credit derivatives portfolio. The Company believes that the "mark-to-market" loss does not reflect material credit impairment.
Well, more red ink and more lies. They do tell the truth better than say, Citigroup or Goldman Sachs who are nonstop liars. But MBIA has the ritual reassurance that the 'mark-to-graveyard' trip to Davey Jone's locker deep in the sea isn't going to wreck their bottom line. Right! A few gallons of red ink won't hurt us, eh? Ask the Federal Government that spent the last 40 years sailing around the Red Sea!
Radian Group Inc. (NYSE: RDN) today reported a net loss of $704 million and a diluted net loss per share of $8.78 for the third quarter ended September 30, 2007.
"The third quarter's results were disappointing but not unexpected given market conditions," said S.A. Ibrahim, Chief Executive Officer of Radian. "However, our book value is $42.86 per share and we are well positioned with our strong capital and liquidity position to weather the challenging credit cycle." Mr. Ibrahim added, "While mortgage insurance credit losses will continue to impact our results for the foreseeable future, I'm encouraged by the positive trends in mortgage insurance penetration and by the resiliency of our financial guaranty business."
Um, of all the sinking ships, this one is the most shocking. Ever since the Captain announced this as the sound of gurgling red ink drowned out his orchestra that was trying to distract the First Class Passengers, everyone slid into port side and some went overboard. Look at this!
Since the Day of Doom, 7/17/7, this stock has collapsed from $67 a share to penny stock status at less than $10 today and next week, obviously, this poor ship will be done firing off roman candles, signalling Bernanke, they need to be saved. If just one week ago, the head of Radian thought these stocks were worth nearly $50...which wasn't true back then, it was near $20, he was pretty optimistic. I know these guys have to talk up their stocks but this sort of disconnect isn't wise. Everyone saw it was BS and took flight even faster than at the other companies we discussed earlier.
Barclays shares fell by 7pc to a two-year low this morning on the back of rumours that it had been forced to seek emergency funding from the Bank of England.According to the news wires, neither Barclays or the Bank of England wanted to comment on the speculation.
12:20 UPDATE: Barclays' external PR agency have just been on the phone, pointing out that the Bank of England has said it did not make any emergency loans to banks at its penalty rate yesterday.
“Barclays is rumoured to have gone to the Bank of England for some funding,” Mamoun Tazi, an analyst at MF Global Securities told Bloomberg. “My guess it that it's very unlikely, but never say never.”
Classic sign of a crash: rumors cause sudden lurches in the value of the stocks of even the most dignified, white haired, sober, oldster organizations and banks. The urge to panic rises. Everyone is wondering, did all the banks keep too little in reserves? Well...in the West, this goes without saying! All our systems are without reserves which I have complained loudly about. Our own Federal Reserve refuses to preseve our reserves! Meanwhile, many bankers in rival lands like Japan, Russia and China and now India and others are building magnificent, huge FOREX reserves. There is something very wrong with all this and it is plain as day: they are preparing us for a total collapse and want to FORCE US to NOT PASS OUR INFLATION TO THEM. These funds are now being changed into Sovereign Wealth Funds and they are buying up our systems so they can control our messy business. We seem unable to control this, ourselves.
Time to look at Citigroup who is also in the news today. From Times Online, just in, just a few minutes ago:
Meredith Whitney, the analyst who prompted a $369 billion (£177 billion) plunge in the value of US shares on Thursday by issuing a negative note on Citigroup, hit out at Wall Street’s culture of intimidation yesterday after receiving several death threats from investors in the bank.Ms Whitney, a CIBC analyst who is married to the former World Wrestling Entertainment champion Death Mask, prompted a near 7 per cent drop in Citigroup’s shares on Thursday, after suggesting that the bank needed to raise more than $30 billion to restore its capital cushion.
She also downgraded her recommendation on Citigroup’s shares to “market underperform” in the note that set off America’s biggest stock market decline since August.
WHOA. Talk about 'blood in the streets'!!! And I love the fact that she is married to the Death Mask. This is so befitting. For anyone who can see what is going on has to have some connection with the Dark Realm, that bizarre place where I come from, where my Watchers live and where they love bad news and where money is created and is, of course, the home of Risky, herself. The Hell Cave. All of this is so amusing in a dark way.
Unlike Meredith and Death Mask, all I get is nasty letters from nasty lawyers representing nasty hell hounds and pirates on Elizabeth II's islands! No death threats yet! But then, few people listen to me. Poor Meredith Whitney, on the other hand, is on TV, etc. And now she gets what I have gotten in the past: death threats. Once, I was on TV talking about death threats and Captain Hill who eventually became the Captain in charge of all of Manhattan, was working with me. And he said, 'We will give you a bullet proof vest' and I said, 'You will wear it and take the bullets for me, right?'
Heh. He laughed at that one. But I have been shot at. The whiz sound of the bullet before it hits the wall behind the head can be unnerving. I hope no one blames Meredith. She is just telling the truth and the last thing speculators want to hear, is the truth. They want Benanke Santa Claus to helicopter money to them and give it to them! This really disgusts me. And her note about Citigroup didn't cause the markets to crash. They were crashing and she noticed the obvious. Geeze, I detailed here before the middle of August, the logic of this collapse, it was pretty obvious, and I even mentioned Citigroup more than once because I was amused at how the furious Saudis tried to stop the overspending there by the executives.
Citigroup’s embattled chairman and chief executive has told senior officials at the bank that he expected to leave after an emergency board meeting this weekend, a banking industry official with ties to Citigroup said last night.Charles O. Prince III, 57, had indicated that he expected to leave during this board meeting, this person said. Directors are also expected to discuss the possibility of another large write-off.
“The entire organization is in uproar and people have been looking for leadership,” said one Citigroup executive familiar with the situation. “The organization is waiting for something.”
Um, if anyone is going to have an unpleasant experience, Mr. Prince should consult books about the Saudi Royals. My parents knew them very well, very, very well. Unlike with the Chinese, they didn't let me live with the Saudis for obvious reasons. Heh. But that is in the past, when I was younger. In this case, the Saudis don't like to lose billions of dollars and they feel a personal grudge about this and they also will want to put some fear in other American hearts but can't use Bin Laden and his Group so they will use other means, there are many mercenaries willing to collect a fine fee and make it look like an accident.
U.S. banking giant Citigroup (C, news, msgs) is getting ready to announce a restructuring plan that would involve up to 15,000 job cuts and a $1 billion-plus charge against earnings, The Wall Street Journal reported.Citi is expected to make the plan public by April 16, when it reports first-quarter results. Shares were down 0.4% at $51.54 today.
The move would follow remarks last summer by Citigroup's biggest shareholder, Prince Alwaleed bin Talal of Saudi Arabia, who said the company must take "Draconian" measures to cut expenses, the Journal reported.
Citigroup CEO Chuck Prince has faced increased pressure from all sides to reduce expenses and to boost the company's stock price. The company saw a 15% rise in operating expenses last year of $52 billion, double the 7% rise in revenue growth, the newspaper said.
The Prince showed his displeasure by making Prince sit on a small cushion at his feet like a dog. My father never allowed the Saudis to do this to him. Indeed, he even got in a quarrel with King Faisal over something that pissed off my mother and left the country suddenly. A while later, the King was assassinated. Hmmmm....No, my mom didn't do it, by the way. It is just, this is how they play the game there. This is why they have lots and lots of bodyguards. More than the Queen of England who also fears assassins and daughter-in-laws.
New York – Today Citi announced that it has reached a significant milestone in its “green” building program by earning a Gold Leadership in Energy and Environmental Design (LEED) certification for the first time. The prestigious designation from the U.S. Green Building Council was awarded in a ceremony today at Citi’s newly constructed, 15-story skyscraper at Two Court Square, Queens, New York. The office tower, which opened in August, is home for 1,500 employees.
Citi announced today that Citigroup Japan Holdings Ltd. and Nikko Cordial Corporation have signed a definitive share exchange agreement to reflect the final terms of the previously announced share exchange transaction in which Nikko Cordial will become a 100%-owned subsidiary of Citi.
From Citigroup's financial report:Income went from $16 billion down to $13 billion. Nonperforming assets [ie: dead ducks]: Corporate loans: $821 million in 2006 and in 2007, $1,218 million.
Real estate repros: $466 million in 2006, $942 million in 2007 [these go slower than loans to businesses].
So here we are: this article was from when the world stock markets dropped violently in February. And Meredith had absolutely nothing to do with this. It was due to the stinky condition of all those CDOs, etc. Citigroup moved into this spiffy new building, a huge structure in Queens, fancy headquarters right in the middle of this messy third quarter. Like Sears moving into the Sears Tower and then going bankrupt, so it is with Citigroup. If terrorists blow up this building, I won't be surprized. The Saudi Princes are pissed to hell that their money is tied up in it.
The problem is that the "orderly decline" has now become a chaotic mess, as made evident by the fact that the Fed's indication that Wednesday's interest rate cut would be the last failed completely to rescue the ailing dollar which continues to hit record lows against the Euro today.This proves that the dollar's depreciation has been too swift even for the Fed's liking, who are now desperately trying to prop up the greenback to no avail as it spins into the abyss.
The decision on behalf of the Saudis to drop their interest rates and maintain their dollar peg is another clue that the elite have lost control of the dollar's decline and are nervously attempting to halt the slide without success.
We hate China having a peg on the dollar but love it with the Saudis. And the Saudis hate this and they are trying to figure out how to deal with all this. Namely, they are talking with the Chinese. They want the US to protect them from the Iranians and let them be the nasty people they are at home. But they think that maybe the US is costing them dearly and they may suddenly drop us when China signals, it is time for a New World Order.
There’s a mystery on Wall Street. Merrill Lynch last week wrote off $8.4 billion in its subprime mortgage business, a figure revised up from $4.9 billion, yet Goldman Sachs reported an excellent quarter and didn’t feel the need for any write-offs. The real secret of the difference is likely to be in the details of their accounting, and in particular in the murky world, shortly to be revealed, of their “Level 3” asset portfolios.
*snip*
We may be about to find out. From November 15, we will have a new tool for figuring out how much toxic waste is in investment banks’ balance sheets. The new accounting rule SFAS157 requires banks to divide their tradable assets into three “levels” according to how easy it is to get a market price for them. Level 1 assets have quoted prices in active markets. At the other extreme Level 3 assets have only unobservable inputs to measure value and are thus valued by reference to the banks’ own models.
Level 3 is the same as Dante's lowest circles in Hell. Soon we will get a wave of really bad news and not one iota of it will be from the delightful Ms. Meredith! Preview: lucky for us, most windows in offices in Manhattan can't be opened. There are going to be lots of unhappy people who can't explain that all that lovely money made out of thin air by lenders is now gone, kaput, a total loss for all eternity. Like the houses that burned in California, these will be gone, gone, gone. Poof. Just 12 hours ago, I noted one news analyst who begged for no rules and more easy money. That will fix this mess, eh? More of the heroin that made these junky bonds and tranchey papers? Right. Don't Bogard that joint, my friend.
Wall Street Journal:
Goldman Sachs has disclosed its Level 3 assets, two quarters before it would be compelled to do so in the period ending February 29, 2008. Their total was $72 billion, which at first sight looks reasonable because it is only 8% of total assets. However the problem becomes more serious when you realize that $72 billion is twice Goldman’s capital of $36 billion. In an extreme situation therefore, Goldman’s entire existence rests on the value of its Level 3 assets.
*snip*
There has been no rush to disclose Level 3 assets in advance of the first quarter in which it becomes compulsory, probably that ending in February or March 2008. Figures that have been disclosed show Lehman with $22 billion in Level 3 assets, 100% of capital, Bear Stearns with $20 billion, 155% of capital and J.P. Morgan Chase with about $60 billion, 50% of capital. However those figures are almost certainly low; the border between Level 2 and Level 3 is a fuzzy one and it is unquestionably in the interest of banks to classify as many of their assets as possible as Level 2, where analysts won’t worry about them, rather than Level 3, where analyst concern is likely.
If everyone is playing with funny money, it vanishes. This is why one must play only with money that isn't owed to any Saudi Princes. Now I know these people running these organizations like Goldman Sachs think they can mail Sultan a letter saying, 'Sorry, but all your investments are now worthless.' And then go off to the Bahamas to play golf. Only there will be this irate sniper who has a grudge against Americans and bang. Or a mechanic toys with the private jet's landing gears or GPS computer. I suspect, this is what all that 'blood in the streets' are about. Then there are the Chinese: no slouches in this regard, either. Or Russians. Don't drink tea with a disgruntled Russian sent to pay a little visit. Use that geiger counter you can get from the Sharp Xmas catalogue.
Merrill Lynch & Co. fell the most in six years, leading financial stocks lower for a second day, after Deutsche Bank AG said the world's biggest brokerage may write down an additional $10 billion for losses on subprime assets.``We have increasingly lost confidence in the financials of Merrill,'' Deutsche Bank analyst Michael Mayo said in a report today. ``Merrill may have additional credit rating downgrades'' should the New York-based firm be forced to write down the value of its debt holdings, Mayo said.
The Germans hate losing money. Deutsche Bank has been badly burned this year. And the Germans have long memories of bank burns. They are quite herzliche upset over this. Merrill will be punished just like Citigroup will be punished. I don't know if the Germans will be as personal as the Saudis. Who knows? Maybe the Saudis will get mad at me, talking about this.
It is all speculation. But then, the US kidnaps people, tortures them, our new Attorney General will torture people, Bush is a criminal who should be impeached and put on trial at the Hague and Cheney should be chased by ducks and gummed to death in some swamp, I might think, not that I advocate any of these more violent actions, just arrest all of these people including a number of Goldman Sachs people in high places as well as our President and VP, etc. Just arrest them all.
A bonus: this will discourage WWIII and the looming attacks on Iran.
Culture of Life News Main Page
"The employment numbers are pure fiction."
You have to read this article by Joe Richter of Bloomberg with regards to that fake news. You have to read it a couple of times and you will notice the absurdity and the contradiction of the numbers from one paragraph to the next within the article. I can't believe Joe wrote this with a straight face or at leaset he must've been laughing hysterically while doing so. I spent some time pouring over it and laughing myself while muttering, "F-ing lies".
http://www.bloomberg.com/apps/news?pid=20601068&sid=aLkI_dVc5RL0&refer=economy
Posted by: Blunt Force Trauma | November 03, 2007 at 08:02 AM
Terrific blog cutting through the BS and telling it like it is.
Posted by: Crimson Ghost | November 03, 2007 at 08:43 AM
I love your name, Crimson Ghost.
Blunt Force Trauma, it is of course, all lies. All the major corportions are laying off masses of workers. So how is employment 'growing'?
Posted by: Elaine Supkis | November 03, 2007 at 08:46 AM
Just wanted to drop a note thanking you for all the fantastic writing. The comment about obtaining a Sharp geiger counter for drinking tea with Russians was priceless!
As for me, I've been betting against the dollar with my joke of an employer offered 401k. So far I've been doing pretty well moving 80% of my investments overseas.
Not that my tiny investing success matters. I figure that managing my 401k is just a less entertaining version of online poker. I'm almost certain the money I've contributed will eventually go *poof* at some TBD date in the future!
Posted by: 2012MIHOP | November 03, 2007 at 11:38 AM
I sincerely hope that doesn't happen to your 401k. I am very pro-savings. I wish we could simply save the old fashioned way. By putting money in an honest bank.
Posted by: Elaine Supkis | November 03, 2007 at 12:01 PM
I'm a residential real estate appraiser, and back in August I started feeling like a deck hand on the Titanic. "You're holding a first class ARM ticket, sir? This way to the lifeboats -- best refi now, before the undertow from sinking equities closes the window of opportunity."
After listening to the economic happy talk on the friday NewsHour, it's good to see someone cut BS -- not to mention using the Titanic metaphor to decipher the bloodletting to come.
No one could have predicted the BushCo lackeys would cook the books on every economic indicator at their disposal. After all, they've only been doing it since day one -- it's a complete surprise that it continues, now that the AAA sub prime mezzanine tranche purgative has worked it's way through the guts of the global financial system. I'm shocked, Shocked!!!
Now, where did I leave that life preserver?
Posted by: -ck- | November 03, 2007 at 12:06 PM
Elaine, you should try mogulus.com. You can be safer blogging there.
Posted by: PJSV | November 03, 2007 at 01:15 PM
CK: you are in the front lines of the wild fires! I have invested in real estate all my life and gaging the waves is all part of this game. One must see into the future. Lately, this experiment with super-low interest rates to keep housing going is turning out to have very nasty side effects...which we knew all about way back in 1974!
PJSV: so far, typepad has been OK. They don't censor me like Blogspot did. Moving is very hard, very hard. I lose a lot of readers when this happens.
Posted by: Elaine Supkis | November 03, 2007 at 07:12 PM
Dear Elaine;
Thanks for letter. I have much disagreement but rather than argue I've one simple suggestion. When you use Jewish financiers, I think fairness demands that when you talk about a Murdoch, Gates, O'Neil etc you refer to them as Christian financiers. If you are indisposed to this, how about deleting ethnic or religious identification?
Hal Lieberman
PS Still read your blog.
Posted by: hal lieberman | November 03, 2007 at 07:33 PM
Meredith Whitney apparently did make a serious mistake --
but that should result in a retraction or a lawsuit, not a death threat.
See below.
"We believe over (the) near term, Citigroup will need to raise over $30 billion in capital through either asset sales, a dividend cut, a capital raise, or combination thereof," wrote Meredith Whitney, an analyst at CIBC World Markets Corp.
The report not only sent Citigroup shares plunging but triggered a broad selloff in the markets.
Some analysts, however, disagreed with the CIBC findings.
"Citibank does not have capital issues," said Richard Bove, financial strategist at Punk Ziegel, saying there were calculation errors. "She simply made a mathematical mistake. She’s out on a limb arguing that the regulators are wrong."
http://www.cnbc.com/id/21585834
Posted by: Frederick N. Chase | November 03, 2007 at 10:26 PM
Well, Frederick, the fact that she did receive death threats from those involved in CitiGroup ought to let you know just what kind of men are running that outfit.
Bush and Co. make serious (I know, a "grand" understatement) "mistakes" all the time. And what happens to those who make death threats against them? They are hauled off to jail or they just disappear.
What will be done to the CitiGroup gang who threatened to kill this economic analyst? Nothing?
Interesting, isn't it?
Posted by: DeVaul | November 03, 2007 at 11:34 PM
Dear Hal,
I talk a lot about the religious affiliations of all sorts of people. The problem with Jewish readers is, due to the bloody and horrible persecution of Jews for 2,000 years, the sensitivity about seeing the word 'Jews' in print is very great. There is a natural desire to not see this talked about at any level.
This has been exploited by cynical Jews seeking wealth and power to cloak their activities. I see all over the place, references to Muslims when they take economic actions! But a Jewish reader doesn't notice this, nay, often the writes who talk about Islamic financial matters will even call Muslims names and mock their religion when talking about, say, oil, or banking!
Then we have to turn around and NEVER talk about Jewish activities concerning oil or banking! The tragic part of all this is, the Christians who hire Jews, work with them and help them steal olive groves from the native Semites of the Middle East, many of these allies of the Jews are antisemites who pray for the destruction of all Jews! Via the Apocalypse.
Christians who are working hand in glove with Jews to start wars with Muslims are involved in a continuation of the Crusades. And therefore, dangerous to Jews themselves since the end desire of this crusade is for all Jews to be converted, violently if necessary, into Christians! And then Jerusalem cleansed of both Muslims AND Jews!
Hal, we MUST talk about all this. We cannot evade this. In my recent article where I quote the Jerusalem Post where they talk about the startling fact that half of all the most influencial people in the West in finance and arts are Jews and how scared American Jews are to talk about this....can you see what this means?
Pretending this isn't so is foolish. Ignoring this while the eagle eye of the Christian fundamentalists planning the final extermination of the Jews via the Apocalypse are watching this news closely, is foolish. We cannot ignore this force that is ratchetting upwards the more Jews try to take over the Holy Land. Each step is climbing the staircase in the Tower where the Gods strike with lightning bolts, the Tower of Babel.
This is all pure survivalism for myself. I want to save the Jewish community, I am part of this community. The despair I feel, watching this death spiral, is intense. For years, I debated with myself, how to talk about all this without enraging the Jewish community of inflaming the Christian community and there seems to be no way in hell anyone can do this, ask the very devout Jimmy Carter!
He tried to explain all this very nicely and the Jewish media attacked him with trmendous ferocity and then tossed him into the garbage and won't talk to him at all now, a former president is now a non-person just because he tried to warn the Jewish community, which he loves, about the perils of lusting for power over the Muslims in the Holy Lands!
Hal, my news service would have many thousands of readers if I never ever wrote the word 'Jew.' If I pretended I wasn't part-Jewish and if I pretended that the issues in the Middle East were unimportant or should never be discussed or better, if I sided with the Jewish plan to take over the entire Holy Lands and turn it into a Jewish dictatorship where Jews are lords and all others are sub-humans...then I would have more money!
People will love me! The media would suddenly remember my phone number (yes, as Mrs. Levy, I could get on TV whenever I wanted!) and my life would be ridiculously easier.
But then, I would be working towards the Apocalypse, the paradoxical fracturing of reality I also call 'World War III.' So I drag myself onwards, hoping to light this darkness somehow. Using feeble words. So please read with an open mind. This is the hardest thing on earth to do. Recognize when your mind is triggered to censor or attack ritually. Once you stop yourself from ritually freaking out over a word appearing, one can then struggle to see the other side of something that is developing.
One of the ugliest things I have ever engaged in over the years has been talking to Christians about 'Heaven.' Their ideology is, only lovers of Jesus goes to heaven, all others to to hell. They expect EVERY Jew to burn in hell, eternally.
This horrible belief system disgusts me greatly and when I argue about heaven with Christians, they SHUT DOWN. They won't talk about Jews going to hell if they think they are talking to Mrs. Levy and not Mrs. Supkis! The minute they imagine I am not a lover of this heaven idea, they cease talking to me rather then say outloud, 'Jewish babies burn in hell' for example.
This 'politeness' isn't nice, it is at the root of something very explosive. And we have to face this reality. Instead of ignoring it. Hard as it is.
Posted by: Elaine Supkis | November 04, 2007 at 05:44 AM
And the Jewish community has to understand, if they treat Palestinians as subhumans, this justifies the same thing being applied to Jews, themselves. I used to live with the son of the writer of 'Fiddler on the Roof'. I knew the author, himself. This was a family tormented by history and each other, very unstable.
And very rich. This sudden wealth wrecked this family of survivors and made it hard for them to survive. One of the Steins became a writer published first, by the LA Times and now, is a full time author...he gets published very easily, all doors open like magic for him. My former father in law ran a publishing business and knew everyone in that community which is mostly Jewish, by the way, and I could NOT get published come hell or high water.
This is due to ideology and the hopes that if no one in the Jewish community talks about Jewish influence and power, no one in the outside community surrounding the Jewish community, will notice it too. This cloaking device seems to work but only in good times.
The split second there is some terrible economic mess like the Great Depression, the cloak falls and exposes the Jewish community to destruction. So we have to discuss this for surival's sake.
Posted by: Elaine Supkis | November 04, 2007 at 05:55 AM
Dear Hal,
You should read up on Elaine's past articles. Perhaps then you would understand her position much, much better.
I am being nice here.
My sons were forcibly converted to Jews by my ex-wife, her family, and her new husband so they could disappear into a lily white Jewish community in Ohio. This, after my ex-wife claimed to be a Christian in court to strip me and my family of all holidays. It worked.
It helped that she married a wealthy Jewish businessman there, and my own son told me that they were now Jews because his father (not me) AND his family (not mine) were Jewish. This was just barely two years since they fled the state with my sons.
If you do not like to see the word "Jew", rest assured that there are others who hate to see it even more. If you feel pain when you see this word, try to imagine the permanent pain that others feel when they see it.
Slowly my oldest son is coming to understand that he was not born a Jew, but this could always change in a heartbeat due to my ex-wife's relentless hatred of me. (Yes, Hal, Jews hate others with a passion.)
The Jews, like the Christians and the Muslims, never seem to learn one of mankind's oldest rules:
What you do to others, can and will be done to you.
Posted by: DeVaul | November 04, 2007 at 09:48 AM
I was a second class citizen within my own family, too. It is all too sad.
But then, when I married a Catholic, this happened all over again! It is pretty discouraging. This is why I asked Pegasus about all this.
He, being a flying horse, said, 'Nay! Why we horses like to run in herds! The more, the merrier! And the stallions fight over the mares and bite each other but they aren't forced out of the herd, they just have to watch the top stallion have all the fun. But then, I like fighting! It is fun.'
My proud cut stallion, Sparky, feels the same way. He likes having mares to herd around. He watches over them and doesn't give a hoot how they look, they simply have to smell like sweet little mares and he is perfectly happy. On the other hand, the mares like a proud stallion. So if he stands with his nose to the wind, head erect and tail up, they swoon with joy.
and if he bothers them when they want to graze, they turn their rumps to him and kick him hard in his big chest. He always backs off and stands there, wondering if he should pretend to graze or not.
But alas, we can't live the simple lives of horses. We are stuck with the cultural messes we make for ourselves.
Posted by: Elaine Supkis | November 04, 2007 at 10:12 AM
Elaine, I have been following this stuff for some time. I like your comments about real estate because I was in that business in the 70's and 80's and I remember it took a good 7 or 8 years to reach a bottom. This one is going to be worse because they haven't stopped building.
But, the real story is the credit insurance industry, which covers everything from MI companies to the brokerage and money center banks. One new thing I learned back in the 1990's was that credit didn't have a mathematical solution. One the imbalance is the one between what a bank owes and what is owed a bank or other institution that is collectible. Banking is the source of all this phony speculation, GDP growth, booms, busts, recessions and depressions.
My guess is we exited the 1980's with an imbalance that wasn't going away soon. No one wants the ship to sink on their watch so Robert Rubin was brought in and Greenie concurred to let this thing go where no plan has gone before. We will invent stuff to give the appearance of prosperity. Being we were in deflation, this inflation would have the appearance of good prosperity and the world would buy into it. Maybe they didn't know that, but it was better than going down the drain right now.
Then we get to China and much of the other poor world. These people rarely ever saw a buck so the inflation game played well with them. Their currency wasn't exchangable so in order to make that so, they needed to pile up dollars. Being dollar manufacturing was the big money business of the developed world, those that could dropped what they were doing and got involved. Of course the no mathematical solution problem grew and grew. That problem is that the interest to pay for the created credit is never created. The interest forwarded to depositors in thus uncollectable. The capital reserves of the bank on such a system cannot really exist, as the debtors aren't the same people as the creditors of the bank and if the money isn't taken from the creditors in some fashion and given to the debtors, they cannot pay.
I believe much of your idea that we aren't going to be let out of this debt as people is true. I have not done well for myself, but I have resisted any new debt for a good decade. Anyone that has as much as 15% of their annual income in credit debt once this thing turns might find themselves and their families in perpetual bondage. The student loan game is one of many games.
I hate to sound socialist, but if there is anything that should be centralized it is money creation banking. All other lending needs to be at total risk. We have this type of banking except the guys with the golden parachutes (Isn't $48 million a year enough to feed a guy for the rest of his life without taking another $166 million out of a sinking ship?)get to take the deposits and the depositors get the bill in the form of government insurance which can only be paid by those that have the credits.
Bankers and insurers act as sureties. One thing the inflationists fail to realize is that if the sureties go broke, there will be on continued credit growth over a significant short term. Interest in some form will continue to accrue and the needed new credit for the system to pay it won't exist. That is how true deflations and depressions get started. The seemingly huge reserves of China will melt just as fast as all the other piles of money, including the Saudi's. War is always the result, not because there are really any enemies, but because there are governments and fools stupid enough to die for them.
Posted by: mannfm11 | November 04, 2007 at 12:36 PM
"That problem is that the interest to pay for the created credit is never created."
Exactly.
"Interest in some form will continue to accrue and the needed new credit for the system to pay it won't exist."
Hence, the never ending problem.
Most bankers understand this game, which is why I believe banking to be a criminal enterprise. Everyone wants to be a banker or the beneficiary of banking.
I leaf through their voluminous laws and loopholes everyday at work, and I know for a fact that no stupid politician could ever write something so ridiculously absurd and complicated as these arcane laws and regulations.
They were handed to the politicians with a check. Pure and simple.
Barter is the only real and fair form of trade, despite everyone thinking it is only for barbarians. However, barbarians rarely wake up to find that their farms, cattle, homes, and other possessions which constitute their wealth have simply vanished into thin air -- an all too common occurance in the realm of civilized banking.
Posted by: DeVaul | November 04, 2007 at 02:28 PM
Dear Elaine
“But a Jewish reader doesn't notice this, nay, often the writes who talk about Islamic financial matters will even call Muslims names and mock their religion when talking about, say, oil, or banking!”
What Jewish reader? Please do not generalize but be specific. Are there Jews who do call names etc.. Yes, but they are a distinct minority.
"In my recent article where I quote the Jerusalem Post where they talk about the startling fact that half of all the most influencial people in the West in finance and arts are Jews and how scared American Jews are to talk about this....can you see what this means?"
What Jews are scared to talk about it? Again, please be as accurate as your economic writing.Phillip Roth? Saul Bellow? Who, names please. I am a playwright and talk about it all the time.
“if I sided with the Jewish plan to take over the entire Holy Lands and turn it into a Jewish dictatorship where Jews are lords and all others are sub-humans..{
What Jewish plan? Yes, there are some Jewish fundamentalists who talk about Judea and Samaria. But they are in a distinct minority. I am for a Palestinian state with 1967 borders and so are the majority of American and Israeli Jews. Again please show the evidence about turning people into “sub humans. “
Sorry but I do not freak out at the word Jew. Remember all I asked is that when you describe financiers that if you insisted on describing them as Jewish why not Christian or Moslem. Singling Jews out implies that all financiers are Jewish like Warren Buffet or Rupert Murdoch or Bill Gates. Words are weapons. Please use them more carefully.
Hal
Posted by: hal lieberman | November 04, 2007 at 05:54 PM
I have no objection to Elaine using the words "christian" or "muslim" when referring to financiers. They are all the same to me. Elaine knows they are not all Jews. She has stated so many times in the past.
Most Americans do not understand and are not meant to understand that Palestine is not what Israel claims it was in the year 1967. It is what it was BEFORE the Jews declared independance in 1947 and claimed 70% of Palestine even though they were a minority in the area they claimed as their own.
It is the same as illegal Mexicans suddenly claiming all of California as their "homeland" because their ancestors once lived there in the distant past. Of course there would be war, and it would never end if the Mexicans were being funneled top notch weapons from Russia and China for 50 years.
That was most disingenuous, Hal, but quite Jewish, actually.
Posted by: DeVaul | November 04, 2007 at 06:52 PM
Oh, and a couple more things, Hal:
Why would American Jews be so deeply concerned about Palestinian borders to such an extent that they can even pinpoint a specific date that is acceptable to them?
Can American Jews tell us what the borders of Kurdistan should be and what date they should be based on? Irish borders? Bosnian borders? How about American borders?
Are they even Americans, Hal? Do they buy US treasury bonds or do they buy State of Israel bonds, like my ex-wife's family did?
They were not even fundamentalists or fanatics or whatever. They were barely Jews, at that, but they sent their money to Israel. I cashed those damn bonds and spent the money here on my American family.
If all they can do is fret over Israel and send their money there to support their fellow Jews, then what the hell are they doing in our country?
Can YOU be more specific, Hal?
Posted by: DeVaul | November 04, 2007 at 07:11 PM
DeVaul, it seems to me that even among the Jews there is a lot of disagreement. More like Ashkenazi versus everyone else. Zionism versus the rest of Jewdom. The two links below are very informative and give a geographical, historical and spiritual perspective of the divisions that exist. Very interesting really. I was amazed how the Othodox and Hassidic sects are supportive of Ahmadinejad.
http://youtube.com/watch?v=9GHPj8TaBAM
http://youtube.com/watch?v=Ed03N_rz5-Q
http://youtube.com/watch?v=3xA1DbBAcOQ
Posted by: Carlos | November 04, 2007 at 08:29 PM
Thanks for the links, Carlos, but I will decline to read them.
I tried reading a recent article on Yahoo about sufism and Shia and as usual it told me nothing but the same old Jewish crap: we recognize this and that but we do not support it or agree with it or sponsor it blah, blah, blah.
Aside from my own unfortunate experience with Jews, my main problem with them is their endless deceit about... well... everything. And please note that I consider Christians, Muslims, and Jews to be all the same. I use the word "Jew" to refer to them all because they all claim the same god (I'm fairly certain of this now) and because the Jews were around before these other sects or whatever they are.
I live outside their world, so I can see how they act, think, and behave all in the same way while simultaneously claiming that this or that group of Jews is more holy than the other and on and on. I have no desire to delve into their convoluted minds and delusions about their one all powerful god who seems to me a whole lot more like Sauron (of movie fame) than anything else.
It does not matter to them what I think of them because they believe I have no right to exist, and they have proclaimed this in court, on television, on videotapes from caves and hideouts.
This is why I get no real answer from them when I ask them straightforward questions. They need time to think of some clever lie or semantically twisted bit of disinformation with which to hopefully make the pesky questions go away.
I am glad I do not have to deal with this in my own religion. It is very liberating not to have to live a lie, to be able to speak truthfully and not be ashamed or feel as if you just sold off your very soul.
The downside of course is that you will be hated with great passion by those who do live in a world of lies, deceit and evil schemes. And you will suffer their wrath for defying them as long as they live, for they never tire of trying to harm you anyway they can.
I suppose it makes up for the fact that they know deep down who they really are, so making others just as miserable is their only consolation for choosing to commit great acts of evil for some ephemeral gain.
I still have hope for a better life for me and my family, but I know it will not come from the Jews. It will happen in spite of them, assuming fate allows it at all.
Posted by: DeVaul | November 04, 2007 at 09:59 PM
I'm not sure what is going on here, but banker and Jew don't necessarily equal each other. The truth is that usuary was outlawed by Moses because it led to perpetual bondage in Egypt. I don't belief what Elaine wrote back to me though about bankers understanding. I believe a select few understand the interest is never created, as they have 100% of the money creating value in the economy. There has to be a way to work out the loss on an equitable basis. Otherwise the money creators end up owning the world and drawing rent as a title of nobility against the many. It more than a share the wealth idea in doing something about banking. I agree that banking should be prohibited as it is practiced today. I don't really know what should take its place, but I believe all private borrowing should be done at 100% risk and 100% funded instead of this funding out of thin air and collecting interest out of thin air. I suspect the banking class is insolvent, drawing hundreds of billions interest on imaginary spreads with nothing at risk because it has been lost for over a decade. I would love to draw even 1/4% off $100 billion that I could imagine I had in place. When it collapses, let the public pay for it. I was taught in the school of finance that banks created money, but it was never pointed out the debt was impossible to pay. Law recognizes remedy and banking has none. It is also being run as a title of nobiity, prohibited by the constitution.
Posted by: mannfm11 | November 04, 2007 at 11:38 PM
Elaine,
Mogulus.com is a free service to set up a TV news station. The only thing you need is a webcam and good internet conection. It's simpler than blogging !!! Try also Operator11.
Posted by: PJSV | November 05, 2007 at 05:06 AM
The Hong Kong Stock Exchange dropped 5% today! Is this it?
Posted by: Neuro Artist | November 05, 2007 at 05:27 AM
We shall see. Certainly, we are witnessing the biggest inflationary balloon in history .
Posted by: Elaine Supkis | November 05, 2007 at 09:16 AM
He is a good friend that speaks well of us behind our backs.
Posted by: Belstaff chaquetas | December 24, 2011 at 12:48 AM