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S&P 500 -0.40 748.00 3/13 0:55am
Europe's Message on Economic Stimulus: Enough Already!
As the economic tsunami continues to rage across the planet, the near universal refrain has been that joint action is needed to pull us out of the crisis. But when it comes to stimulus spending, the United States and Europe have taken different paths, jeopardizing hopes of a united front to combat the downturn.
President Barack Obama this week urged the world's top economies to adopt aggressive, American-sized spending programs. "It's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together," he said.
But on the other side of the Atlantic, European Union governments have spurned entreaties to let funds flow into their staggering economies. "Europe has done what it needed to do," says Luxembourg Prime Minister Jean-Claude Juncker, who is also chairman of the 16-member eurozone, adding that the U.S.'s appeals "were not to our liking."
The issue is expected to dominate next month's London summit of leaders from the G20 group of top economies. "I do not have high expectations for London," says Nicolas Véron, a scholar at the Brussels-based Bruegel economic think tank. "Not everyone will follow the U.S. just because of Obama. Global solidarity solutions are fiendishly difficult both to decide and to enforce. There is a growing realization that regional or national responses are preferable wherever possible."
But if leaders cannot agree on a common approach to fighting the crisis, their meeting could be nothing more than a glorified photo opportunity.
Hhhmmm...pretty much sums up my thoughts and feeling about the current situation...nuff said!!!
Citigroup Inspired Bear Market Suckers' Rally - There Are Still Lots of Gamblers Out There - Until These Manipulators Are Wiped Out, There Will Be No Recovery
By Matthias Chang
Thursday, 12 March 2009 13:47
So long as the filthy rich global gamblers are alive and able to manipulate the stock markets, the currency markets, the oil markets and the derivative markets, there can be no genuine recovery for the global economy.
The reason is simple.
There has been such a massive and unprecedented malinvestment and misallocation of capital resources from productive endeavours to the global financial casino in the last twenty-five years, that when the global financial system collapsed in 2007, the real economy starved of essential capital and other resources went into a tailspin in 2008 throughout the Western developed economies. We are now witnessing the pernicious effects spreading throughout the global economy. No one and no economy has been spared!
The gamblers know that unless they can keep suckers coming back to the financial casino on the false promise that not only can they recover their losses, but more importantly, they have better than an even chance to make good money, these financial rapists would in turn be wiped out for good.
Vikram Pandit, Citigroup Chief Executive is a financial fraud par excellence and in testimonies to the US Congress has been lying about the bank’s balance sheet to the extent of short changing the US taxpayers of the value of securities that were pledged to secure the bailout to the tune of US$19 billion.
Financial analysts, including our idiots in Malaysia’s financial dailies and radio talk-show hosts were so taken up by the announcement of the alleged profits in the first two months of 2009 by this crook, that they have commented that the market has bottomed and this good news has sparked the rally and will continue to boost market sentiments.
If there is an example of a drowning man grasping at straws, this is it!
Anyone who believes in this trash is an idiot and I hope that every penny that they still have will be wiped out when this manipulated bear rally fizzles out in the next few days and that they will be forced into bankruptcy. They deserve no pity whatsoever.
Citigroup is bankrupt in law and in fact, notwithstanding the massive bailout by the US Treasury and the Fed. The fact that it has been “nationalised” does not change the financial status of the bank.
I will give a simple analogy.
You have a business which has gone into receivership (“conservatorship” in US jargon) and the receivers and managers are now winding up the affairs of the company. Creditors are all lining up to take whatever remaining of the company’s assets in part settlement of the credit extended (hopefully 5 cents to the dollar). Just because, the receivers and managers sold some assets and were able to obtain a better price than expected, would this good news change the status of the company?
So what is all this baloney that Citigroup is now on the road to recovery and this is an indication of a turn around in the US economy. The once mighty Citigroup had a market capitalisation of over $250 billion, just a year ago and it has now slumped to less that $8 billion, its share price hovering around $1.05.
Common sense tells me (and I am truly amazed why so many refuse to apply common sense) that if in fact Citigroup is on the road to recovery, this unscrupulous banker, Vikram Pandit would call for a global press conference to announce this fantastic news. Champagne would be flowing again at corporate headquarters.
Compare and contrast what Tiger Woods did when he had recovered from his knee operation. He gave a global press conference and went out to compete again in one of the most demanding match-play tournaments. And although he did not win the tournament, there was ample evidence that he had recovered, but it was also obvious that he needed more time and matches to get back to his normal groove!
But no, this Pandit sent out a so-called memo to his staff, which was conveniently leaked to the mass media (and knowing the gullibility of the stock market idiots) so as to lend credence that this confidential information must be true.
Surely the duty is first to inform officially the shareholders and taxpayers who have bailout the bank. But the preferred method of disclosure (and we are suppose to be in the age of transparency and good governance) is by way of a memo to the staff.
The actual memo has not been reproduced in full by the mass media. But surely the quoted words attributed to this financial crook is sufficient even to a first year student in economics and or finance that the so-called profit is bullspit and horsespit!
“In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007. The bank had US$19 billion of revenue in January and February before disclosed write-downs.”
If you cannot detect the stupid nonsense from this quote, you have no business to be an economist, a banker, an accountant, an investor and or a regulator!
Firstly, two months revenue does not make a quarter.
Revenue is meaningless by itself if your debts are far, far greater than your revenue.
Revenue or income is only one side of the balance sheet.
The financial idiots who put out this piece of spit should be hounded down, hung from the street lamp-post and then tarred and feathered, the preferred punishment by the Irish Republican Army against traitors and other scumbags during the British colonial occupation of Ireland.
To the citizens of America: if you don’t bring a class action against Vikram Pandit, you bloody deserve to be financially raped and plundered by these crooks!
The US has suffered nothing short of a "De-capitating" strategic attack.
The weapon used was a monetary "Trojan Horse", which may very well prove to be more devasting to the basic fabric of our Nation than if an enemy had detonated dozens of nuclear weapons against our cities.
Our oppenents (soon to be our landlords/overlords?), by skillfully understanding the basic motivations of our "free market" financial system, have exploited the operative psychology of the market against the economy which depends upon it. They now hold the very fate of our Government in their hands: subject to demands of extortion and political obedience.
And make no mistake about it: This $700 billion "bail-out" is intended as just the first of a series of monetary and policy (foreign/domestic) demands. (Emphasis Added)
Ultimately, the goal is to effectively remove the US as a force on the world stage: Reducing the once great US to the status of a financial, possibly literal, "Client-state".
Why has no one in officialdom addressed this possibility?
Perhaps the fear is that if this were to be proved to true, the truth would inexorably lead to a demand for retribution: And an actual shooting war with China.
And no wants to start what will devolve into WWlll.
Banks Rush Bond Sales as FDIC Says It May Increase Fees to Guarantee Debt
March 13 (Bloomberg) -- Federal Deposit Insurance Corp. officials advised the largest U.S. banks on March 9 that they may be charged more for the agency’s debt guarantees, according to people familiar with the matter.
Bank of America Corp., Goldman Sachs Group Inc. and the financing arm of General Electric Co. led $29.8 billion of FDIC- backed bond sales since the meeting, making this the second- busiest week since companies began using the FDIC’s Temporary Liquidity Guarantee Program on Nov. 25, according to data compiled by Bloomberg.
FDIC officials said they plan to add a fee of 25 basis points on banks and 50 basis points on bank holding companies. Right now, it charges 1 percentage point of the amount sold on debt maturing in one year under the TLGP. The fees would be applied as of April 1 and are meant to restock the Washington- based FDIC’s deposit insurance fund, the people said.
The amount of FDIC-backed bond sales was “pretty significant,” said Greg Haendel, who helps oversee $6.2 billion in fixed-income assets as a money manager at Transamerica Investment Management in Los Angeles.
KKR Losses Show Failure to Close Loan Gap Raising Bankruptcies
March 13 (Bloomberg) -- Investment funds that purchased a majority of the lowest-rated loans during the credit boom have stopped buying, threatening to undermine President Obama’s plan to pull the economy out of the worst recession since 1982.
The funds, known on Wall Street as collateralized loan obligations, provided cash to movie-rental chain Blockbuster Inc., which is now exploring a bankruptcy filing, according to a person familiar with the situation. They also helped finance the $33 billion buyout of Nashville, Tennessee-based hospital operator HCA Inc.
Now, as an economic slowdown drags into the 16th month, borrowers unable to pay their debts are causing record losses for CLOs. Moody’s Investors Service put 760 of the funds, holding about $440 billion of assets, on review for downgrades on March 4. Unless policymakers decide to earmark some of the $11.6 trillion of government programs created to combat the seizure in credit markets to support high-yield loans, defaults may soar through 2012, according to investors.
“The game is over,” said Ross Heller, managing director at New York-based NewOak Capital LLC, an investment and advisory firm. “There isn’t going to be money available for refinancing. Companies will have to be put into bankruptcy and the debt restructured.”