The Accelerating World / Global Financial Crisis / Collapse

[Red Dawn]

£4,350 per family to bail out Britain's banks
http://www.telegraph.co.uk/finance/news ... banks.html

The Conservatives claimed the latest bail-out equated to an extra tax liability of £2,000 for every one of the 17 million families in the country. This comes on top of the £2,350 to which every household is already exposed as a result of previous attempts to prop up the financial system.

It is likely that the new bail-out will have to be funded by government borrowing, which could only be repaid through swingeing cuts to public services or substantial tax rises over the coming years. However, despite consumers picking up the bill for yet more billions for the banks, experts said that the money would still not be enough to get them to increase lending to struggling home owners and businesses.

The bail-out of RBS, which was driven to the brink of collapse in 2008 after a series of reckless investments, now ranks as the biggest in the world.

In total, the British Government’s exposure to RBS now stands at more than £250 billion, because in addition to supplying funds to keep it afloat, the Government has also underwritten many of its so-called toxic assets.

Wishful Thinking
Elaine Supkis
http://emsnews.wordpress.com/2009/11/04 ... -thinking/

When over 100 million Americans are reduced to poverty due to free trade, will they revolt?

History is clear: the answer is yes, there will be some sort of revolt. What form it takes is determined by many forces. Since US people are heavily propagandized against supporting labor or allowed to even try to understand basic economic business such as the difference between capital and credit, the likelihood is, the reaction will be to the right, not to the left. That is, anyone espousing National Socialism will probably take over eventually.

And that is my analysis and prediction. Not my desires. Not my wishful thinking. This is all about figuring out the past and understanding how it leads to some sort of future.

£4,350 per family to bail out Britain's banks

"Family share: Calculated by dividing the national debt figure by the number of households in the UK. Number of households taken as 25.7 million, as per the written answer to a Parliamentary question in March 2009."... £28,670...

http://tinyurl.com/n8vjyt

[tio]

Cheers mate,

I think that link of yours is probably a cut and paste from another post and is a bit squiffy, can you help?

[Red Dawn]

Cheers mate,

I think that link of yours is probably a cut and paste from another post and is a bit squiffy, can you help?

Sorted

[Red Dawn]

9 October 2008

"US debt clock runs out of digits"...

http://news.bbc.co.uk/1/hi/business/7660409.stm

[Editor]

Taxpayers and workers SHAFTED again .. and governments shown to be totally naive (or is that corrupt/colluding) lending billions of pounds with no security and no interest .. utter mugs :

http://business.timesonline.co.uk/tol/b ... 903116.ece

Analysis: GM incurs wrath of the Germans

The German government could barely conceal its fury following news of GM's U-turn on the sale of its European division
Roger Boyes, Berlin

Its first reaction was to ask for its money back: the Germans had put up a bridging loan of up to €1.5 billion to keep Opel plants afloat while a deal was hammered out.

German union leaders who had sold the Magna-deal as a job-saver were calling for massive demonstrations to be staged on Thursday. Opel workers earlier this week had agreed to go without any wage increase this year in order to help the Magna deal along; now they feel they have been betrayed and are in surly mood.

The newly-minted economics minister Rainer Bruederle called the General Motors shift, “unacceptable”. It was understood that GM would require €3 billion of state support to carry out radical restructuring of its European division. Mr Bruederle declared though: ”We won’t let ourselves be pressured by General Motors.”

And German regional premiers where Opel’s four factories are based were livid. None more so than Juergen Ruettgers, premier of North Rhine Westphalia, who faces elections early next year.

The Bochum Opel plant, saved under the Magna plan, is in his region and could well be axed by General Motors.

“This shows the ugly face of turbo-capitalism,” said Mr Ruettgers, who in spite of his rhetoric is a conservative ally of Ms Merkel.

The official word out of the cabinet was that the government “ regretted” the decision.

“A process of securing an investor, a process that spread over six intensive months, involving all players including GM, has been broken off,” said Ulrich Wilhem, the government spokesman.

The Magna and Sberbank deal was supported, he said, by “ a convincing industrial logic.” The collapse of the Magna deal is fast becoming the first political test of the new Merkel government of Christian Democrats and Free Democrats. Many Free Democrats and even Ms Merkel’s conservative economics minister before the election argued in favour of Opel going into insolvency.

Ms Merkel ignored the Free Democrats and over-ruled her economics minister who was then Karl-Theodor zu Guttenberg. She even dismissed the reservations voiced by two government representatives on the Opel trust board. The deal with Magna was duly struck before the general election.

It was hailed as a triumph of her negotiating skills and her command of the German-Russian relationship. When it was finalised she told the voters that it was the result of her government’s “patience, determination and clarity.” But Ms Merkel had not covered all the bases.

With British and Spanish workers feeling that they had been stitched up by the Germans, the Magna deal was submitted to the European Commission to determine whether EU competition rules had been violated. That bought General Motors time to re-think its position.

Good sales figures and a fear that Opel-GM technology could end up in Russian hands, creating a new European competitor, persuaded GM to change its position. Car industry expert Ferdinand Duedenhofer warned on Wednesday that GM might just declare Opel insolvent - and the government will have wasted months of bargaining.

Plus a few billion in interest free loans .. Banksters and Industrialists are flip side of the same coin.

[Editor]

A few things struck me as missing from the following story :
http://news.bbc.co.uk/1/hi/business/8344346.stm

UBS fined £8m by the UK regulator

The FSA said four UBS employees had carried out the transactions using customer money on at least 39 accounts.

"These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorised trades with customer money that they were then able to conceal," said the FSA's director of enforcement and financial crime, Margaret Cole.

1) What was the punishment for the 4 employees ?

2) What was their motivation ? How were the profits and losses on each trade "distributed" ?

The following article clarified the loses were hidden :

http://business.timesonline.co.uk/tol/b ... 904300.ece

unauthorised trades on client accounts and hide the losses for almost two years.

UBS has already compensated the affected clients, the FSA said

So what happened to the profits ? (around 50% of the trades are assumed to have been profitable)

Was the idea to improve the performance of a few client portfolios .. or to skim off the profitable trades to the portfolios of the employees running the scheme (or to portfolios of "favoured" clients).

This makes me wonder if the regulator only investigated the "lossing" half of the fraud ...

[tio]

http://www.familylosangeles.com/blog/up ... 768440.jpg

Max Keiser on RT talking about the GM U-turn ..
http://www.youtube.com/watch?v=4Jpb1e32KRY

The Risks of a Catastrophic Deflationary Collapse
Lawrence Tout
http://www.silverbearcafe.com/private/1 ... ophic.html

As we have mentioned, this current combination of high levels of interconnected toxic derivatives and systemic fraud make for very unstable market foundations. Yet these are foundations that have already been weakened by the first wave of the credit crisis where we saw write downs, bankruptcies and bailouts of major institutions. With this systemic fragility already in place, we must ask ourselves if the markets can survive another wave of failures? A wave which is looking increasingly likely to hit pretty soon.

Steve Keen who made an appearance on Max Keiser a month or so ago continues to debunk classical economics ..
Steve Keen’s DebtWatch No 31 February 2009: “The Roving Cavaliers of Credit”
Published in January 31st, 2009
http://www.debtdeflation.com/blogs/2009 ... sofcredit/

“In the real world, banks extend credit, creating deposits in the process, and look for reserves later”

Goldman Sachs Says Its Profits Are Not Satanic
Elaine Supkis
http://emsnews.wordpress.com/2009/11/05 ... t-satanic/

This is just too funny. This preacher is straight out of the Cave of Wealth and Death, telling the congregation that ‘profit is not satanic’. But note he doesn’t mention ‘capital’. Just ‘profits’. That is, if he can intervene and seize immense amounts of wealth just for passing money through systems, this is good. So if all profits flow mainly to him and his fellow gnomes, this is good because they provide a ’service’.

Of course, this ’service’ is killing those who use it! Worse: the majority of the ‘profits’ these gnomes create are not capital created via labor interacting with resources. No, it is the other thing: profits from debt creation. That is, workers creating capital via interacting with resources have to pay a fee over time to the bankers for loans to fund factory building.

Only we are not building factories for production in the US or UK. The two nations where bankers make some of the most obscene profits happen to be two nations being rapidly deindustrialized. This astonishing fact is a key element in my analysis of what went wrong with our economic situation. That is, the successes in the banking sector actually was killing our important manufacturing sector which is now dead except for the parts attached to the military.

Quant Jobs So Convoluted And Opaque, Even Supervisors Have Given Up On Understanding What Is Going On
by Tyler Durden
http://www.zerohedge.com/article/quant- ... what-going

Even as the entire HFT industry is on edge, and fighting against very justifiable allegations that it is setting the market up for another October 1987 type event due to the increasing preponderance of computerized trading, the ever so vocal industry leaders have had no time to do precisely the one thing that they are accused of: understanding their own business. According to a recent survey by Finextra.com, two thirds of quant analysts think their supervisors do not understand the work they do.

Deficits Funded With Monetization And Hyperinflation
Bob Chapman
http://www.theinternationalforecaster.c ... rinflation

We are starting to see governments worldwide begin to raise interest rates and begin to withdraw loans in order to bring back financial normality. Wait until they discover such well-intentioned moves will cause a relapse in economic and financial activity and they begin to slip back into the morass from which they thought they were ascending. If rates are raised and funds withdrawn from the system the world financial system will fall into depression. They know that, but they are hoping hope against hope they are wrong and that it will work. They do not want it discovered that they created this monstrous problem deliberately.

Expenses purge will 'castrate' Parliament warns Labour veteran as MPs' wives launch High Court bid to keep their jobs
http://www.dailymail.co.uk/news/article ... -jobs.html

MPs privately said that they were worth an extra £40,000 a year.

[Red Dawn]

GEAB.

"Programmed failure of US and Chinese economic stimulus plans: The 'absorption capacity barrier'"...

http://www.leap2020.eu/Programmed-failu ... a3925.html

[Editor]

A few things struck me as missing from the following story :
http://news.bbc.co.uk/1/hi/business/8344346.stm

UBS fined £8m by the UK regulator

The FSA said four UBS employees had carried out the transactions using customer money on at least 39 accounts.

"These employees were able to take advantage of UBS' inadequate systems and controls, giving them free rein to make unauthorised trades with customer money that they were then able to conceal," said the FSA's director of enforcement and financial crime, Margaret Cole.

1) What was the punishment for the 4 employees ?

2) What was their motivation ? How were the profits and losses on each trade "distributed" ?

The following article clarified the loses were hidden :

http://business.timesonline.co.uk/tol/b ... 904300.ece

unauthorised trades on client accounts and hide the losses for almost two years.

UBS has already compensated the affected clients, the FSA said

So what happened to the profits ? (around 50% of the trades are assumed to have been profitable)

Was the idea to improve the performance of a few client portfolios .. or to skim off the profitable trades to the portfolios of the employees running the scheme (or to portfolios of "favoured" clients).

This makes me wonder if the regulator only investigated the "lossing" half of the fraud ...

Update
http://www.telegraph.co.uk/finance/news ... -cash.html

The four UBS employees worked for the bank’s wealth management division in London and took money from personal accounts of clients and transferred them without permission to the accounts of various “desk heads”.

They then traded foreign exchange and precious metals without authorisation and concealed the information, allocating losses to customers’ accounts. In derivatives trades, for instance, clients can be exposed to a liability many times the principal invested.

However, the UBS case, which has been in the offing for the last year, surprised industry expects who expected sanctions against individuals to be announced at the same time. In a recent Morgan Stanley case, the FSA fined both the bank and individuals.

Industry experts have suggested that legal action could be pending against the four ex-UBS workers.

So they STOLE money .. and gambled it, and then allocated losses back to the clients (as cover for the stolen money) .. but what about the profitable trades ? You can bet the profits weren't allocated back to clients (who lost $42 million according to above article). **after all, if the aim was to benefit clients, the workers wouldn't have transfered the money inititally to another account -- but traded on the client account directly -- at least the client would then have benefited from any trades which turned out profitable.

[tio]

Have We Got a Deal For You: Let's Privatize Government!
The Fire Sale of America
By PAM MARTENS
http://www.counterpunch.org/martens11052009.html

At a time when the corporate leaders of America have demonstrated an incurable proclivity to blaze a trail of scorched earth and looting across the banking, trading, housing, and mortgage industries, the public is now catching the whiff of a new smoldering stench just over the horizon.

If corporate America has its way, everything from our parking meters, zoos, airports, toll roads and drinking water will be privatized in the biggest fire sale in the history of the industrialized world. In other words, let’s send a powerful message to our children that the reward for corporate greed, incompetence and criminal behavior is to hand over what’s left of the country’s assets.

Any Way You Slice It, We’re at a Stock Market Top
Stock-Markets / Stock Index Trading
Nov 05, 2009 - 09:28 AM
By: Graham_Summers
http://www.marketoracle.co.uk/Article14805.html

http://www.ft.com/cms/s/0/b1b18958-c7fe ... ck_check=1


“By All Relevant Debt Indicators, the US Fiscal Scenario Will Soon Approximate [that of] Countries on the Verge of a Sovereign Debt Default”
Washington's Blog
http://www.washingtonsblog.com/2009/11/ ... rs-us.html

“It’s called scarcity of supply relative to fiat currency,” Rosenberg argues.

The Government is Patching the Barn Door Instead of Catching the Escaped Horses
Washington's Blog
http://www.washingtonsblog.com/2009/11/ ... -door.html

The too big to fails are - by their very size and the moral hazard created by the government's actions - drawing the American economy down into a black hole.

More Proof That Chicago School Freemarket Economics Is Nothing More Than Scientology For East Coast Rich Fucks
By Yasha Levine
http://exiledonline.com/more-proof-that ... ich-fucks/

Ames emailed me a New York Times blog post from last February by one Casey B. Mulligan–which may sound like a fictional baseball player’s name, but no, he’s real all right, just another in a long line of insane econ professors from the University of Chicago.

A Detailed Look At Goldman's CDS Holdings And How CDS Trading Has Become The Squid's Multi-Billion Cash Cow
Submitted by Tyler Durden
http://www.zerohedge.com/article/detail ... llion-cash

In essence, due to the firm's monopoly in CDS inventory and, therefore, trading, this is the squid's beating heart: between buying and selling (hopefully offsetting positions) CDS in billions of dollars worth of notional daily, and being able to capitalize on wide spreads, courtesy of the extinction of such traditional competitors as Bear and Lehman, the firm will continue to make hundreds of millions in profits every day, month and quarter, due to its newly found monopolist exposure when it comes to trading CDS, both as principal and as agent.

Michael Milken On The Five Biggest Systemic Threats
Submitted by Tyler Durden
http://www.zerohedge.com/article/michae ... ic-threats

Time to start loading up on those sovereign CDS. Today Michael Milken provided some insight into what the five key reasons for our current predicament are, which, courtesy of absolutely no real reform, double as even greater future risks for the global financial system.

How Eurocentric Is Your Day?
by M. Shahid Alam / November 5th, 2009
http://dissidentvoice.org/2009/11/how-e ... -your-day/

I explained what I wanted to hear from them. Can they get through a typical day without running into ideas, institutions, values, technologies and products that originated outside the West – in China, India, the Islamicate or Africa?

The question befuddled my students.

Putain de bordel de merde
http://www.wsws.org/articles/2009/nov20 ... -n06.shtml

It is also a serious warning to the working class about the ongoing legal battles. These carefully circumscribed, politically-motivated investigations and trials are primarily an extra-electoral attempt to settle policy differences inside the ruling class and conceal the full extent of its criminality. As such, they have a profoundly antidemocratic and reactionary social content.

Valuing Bonds, Dollar Is Crazy in World Gone Mad
http://www.bloomberg.com/apps/news?pid= ... GAssrewg9I

Unshackled from Bondage, Unhinged from Reality

North Sea oil is dragging us into the red
http://www.telegraph.co.uk/finance/comm ... e-red.html

What was the industry that powered Britain towards prosperity in the 1980s, and made us one of the most dynamic and successful nations in the Western world? I'll give you a clue: it was described by a prime minister as "God's gift" to the British economy; its revenue stream pumped ever larger amounts of cash into the Exchequer – and its subsequent collapse has helped send the public finances spiralling towards disaster.

If your first reaction was "the City", think again. The answer is North Sea oil.

Bank of England signals the end is nigh for quantitative easing
http://www.telegraph.co.uk/finance/news ... asing.html

RBS chief Stephen Hester remains 'upbeat but realistic' despite hurdle of bonus caps
http://www.telegraph.co.uk/finance/news ... -caps.html

Insolvencies hit record high
http://www.guardian.co.uk/money/2009/no ... ecord-high

Bank spends again to try to revive moribund economy
http://www.independent.co.uk/news/busin ... 15840.html

Banks Thwarting Feinberg Pay Model by Changing Bonus Formulas
http://www.bloomberg.com/apps/news?pid= ... hohvfXkB_w

U.S. unemployment rate hits 10.2 percent
http://www.reuters.com/article/newsOne/ ... 7320091106

U.S. Stock Futures Drop on Jobs Report as Gold Rises to Record
http://www.bloomberg.com/apps/news?pid= ... dU3E&pos=2

Nomura, Barclays Lure Bankers as Rivals Cut Jobs, Cap Bonuses
http://www.bloomberg.com/apps/news?pid= ... WveE&pos=4

Taking out the trash at RBS
Posted by Tracy Alloway
http://ftalphaville.ft.com/blog/2009/11 ... sh-at-rbs/

The UK taxpayer is now the proud owner of £19.8bn worth of monoline exposure.

And £39.1bn worth of commercial real estate.

RBS’s just-released third-quarter results have a bit more detail on just what is going into the Asset Protection Scheme - the UK government’s plan to insure state-owned banks against credit losses. Here’s the breakdown of the £242bn worth of assets now covered by the Scheme:

FT.com’s interactive graphic explains how monolines work
http://www.ft.com/cms/s/0/553e1a16-cb51 ... ck_check=1