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Old June 2nd, 2009 #581
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Originally Posted by brutus View Post
Fuck the economy! Hahahahahaha!

Da gig is up, get to da chopper!
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Old June 14th, 2009 #582
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Default Lloyds Bank hit by Obama tax purge

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Lloyds Banking Group is ditching American customers based in Britain pending a crackdown on international tax evasion planned by President Barack Obama.
This week American private client account-holders at Lloyds's received letters informing them of an "important change in policy regarding clients who are resident, domiciled or linked to the United States by property or asset holdings". They were told the bank had "no choice" but to "cease acting as your investment manager."

One letter sent to Bank of Scotland's portfolio management division, which is now part of Lloyds, said: "The USA has a mature regulatory environment governed by its Securities and Exchange Commission. These regulations mean that we are not licensed to manage portfolios for US clients."
The letter added: "Unfortunately we cannot offer an equivalent service from within Lloyds Banking Group." Clients have been advised to transfer their assets.
One recipient, who has lived in the UK for over 25 years, said: "After all this time, I've suddenly been told I must take my money elsewhere and I don't understand why. Now I'm scared that other banks won't take me on either."
In its letters to clients, Lloyds has not referred to specific legislation. But last month, The Sunday Telegraph reported that British banks and stockbrokers were threatening to close down accounts held by American citizens due to concerns over new international tax proposals could make it too expensive for them to service the clients.
The proposals, which were unveiled in the President's first budget, have been designed to clamp down on American tax evaders abroad. But bank bosses say that in practice they could be asked to take on the task of collecting American taxes at a cost and legal liability that make servicing the clients inexpedient. The rules have not yet been finalised and are still subject to debate in Congress.
So far Lloyds has started dropping its "mass affluent" clients who have investment portfolios of up to a few hundred thousand pounds but that its "high-net-worth individuals" are not yet effected.
A source said: "Until the new rules are properly explained, we don't know how expensive they will be to implement. But it's clear that Lloyds believes that any extra cost to the system will be too much when it comes to the mass affluent."
The letters also contained four comprehensive descriptions of the bank's definition of clients that are effected. These included clients that hold green cards, pay American taxes, are American domiciled or even those where there is "any indication" that a client spent more time in the US than "normal holidays currently or in the past or future."
President Obama's proposals are built on the so-called Qualified Intermediary system introduced in 2001 that were intended to ensure Americans paid the correct tax wherever they were domiciled. Under the rules, foreign financial institutions that handle American money have to fill in a US tax form on behalf of the client that has to be audited too.
In return, the banks receive a QI seal of approval as a qualified intermediary. Bank bosses say that under plans to extend the system, which includes paying for the figures to be audited twice, the costs and legal liabilities of the system will soar.
APCIMS, the trade body whose members manage £400bn of Britain's wealth and employ 25,000 people, sent a letter to the US Treasury's Internal Revenue Service (IRS) complaining that the "unfair'' proposals represent "no benefit but . . . significant cost'' to its members.
Last night Lloyds declined to comment.
http://www.telegraph.co.uk/finance/n...tax-purge.html
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Old June 15th, 2009 #583
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June 15 (Bloomberg) -- Credit ratings on Ohio’s $9.6 billion of debt were cut by Moody’s Investors Service as the state’s manufacturing-based economy shrinks more than the nation’s.

Moody’s reduced its assessment of Ohio’s $6.8 billion of general obligation bonds to Aa2, the third-highest grade, from Aa1, the New York-based rating company said in a news release today. Ohio debt with payments subject to appropriation was cut to Aa3, the fourth highest, from Aa2.

“These rating actions follow a long period of pronounced economic underperformance caused, in part, by the overweighting of manufacturing in the state’s industry employment profile,” Moody’s analysts led by Ted Hampton and Maria Coritsidis said in the release.

Ohio, the seventh most-populous U.S. state, is considering using unclaimed funds, tapping its rainy-day fund and delaying payments until next fiscal year to close a budget deficit of $913 million for the year that ends June 30, Moody’s said.

The state also shifted principal payments previously due in fiscal 2010 through a debt restructuring last month. Relying on one-time measures to balance the budget was cited by Moody’s as a challenge to the state’s credit.

Ohio’s revenue position is better prepared for the latest declines because the state rebuilt reserves through fiscal 2007 to levels approaching those before the 2001 recession. Moody’s also cited as a strength the state’s history of taking prompt action to close budget gaps.

The outlook on the Ohio’s credit ratings was revised to stable along with today’s reductions, “reflecting expectations that the state will appropriately manage the economic and fiscal challenges it faces,” the analysts said.

Fitch Ratings cut the state to its third highest rating of AA from AA+ last week, while Standard & Poor’s affirmed Ohio’s AA+ grade.

Ohio plans to sell $40 million of general obligation bonds this week through JPMorgan Chase & Co. to finance research and development grants for the Ohio coal industry and finance a loan for construction of a coal-fired power plant.

To contact the reporter on this story: Jeremy R. Cooke in New York at [email protected].

Last Updated: June 15, 2009 14:09 EDT
http://www.bloomberg.com/apps/news?pid=2....

I say that their bond sale goes to shit. Obama said during his campaign that he would see to it that coal plants would be prohibitively expensive. I can't see bond investors buying into it.
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Old June 19th, 2009 #584
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http://market-ticker.denninger.net/a...-Seen-Yet.html

Quote:
President Obama and James Lockhart have decided to (financially) rape Americans.
Yes, really:
June 19 (Bloomberg) -- President Barack Obama’s program to help more homeowners refinance may be expanded to include borrowers who owe more than 105 percent of their homes’ values, Federal Housing Finance Agency Director James Lockhart said.
The Obama administration is considering allowing Fannie Mae and Freddie Mac to refinance loans with current loan-to-value ratios of 125 percent or higher, Lockhart said at a National Association of Real Estate Editors Association conference in Washington yesterday.
Let me be absolutely clear so nobody can ever accuse me of being less than straightforward on this.
If you are underwater on your house and take a deal like this, you are as dumb as a box of rocks and have just consented to being bent over the table and violated repeatedly. That our government would propose "allowing" such a thing is fomenting financial rape upon The American Public. Period.
Under conventional financing terms loan-to-value (LTV) ratios over 80% have required what is called "PMI" - private mortgage insurance. The purpose of this is to guarantee for the lender that they can recover if you don't pay and, post-foreclosure, your home isn't worth enough to satisfy the mortgage.
One of the reasons for this requirement is that in most states purchase money first mortgages are non-recourse. That is, if you default they can take the house and ruin your credit - but it ends there. In those states they cannot pursue you beyond foreclosure and reclamation of the house.
In every state if you refinance the resulting mortgage is a recourse loan, which means they can sue you for any deficiency if you subsequently default and come after any other assets (other than retirement funds - which is why you NEVER EVER raid a 401k or IRA to stay afloat!) and even try to get a wage garnishment - and they just might!
For this and other reasons nobody should ever refinance a mortgage that is in trouble without getting qualfiied legal and accounting advice. It could be the cheapest $500 you ever spend.
President Obama's original "refi" program exempted LTVs from 80-105% from PMI requirements, ostensibly as a way of "helping" homeowners. What it really did was rape the taxpayer, because such loans are very dangerous in that if there is a subsequent default the lender will, after expenses, almost always lose money, and may lose a LOT of money.
We have since discovered that the majority of "refinanced" workout loans default again, because the underlying problem is that the buyer used exotic financing to get around their inability to actually cover the fully-amortizing payment of a conventional mortgage. When faced with a fully-amortizing payment, even when restructured, they re-default because they bought through a fraudulent device - they were never able to afford the house in the first place.
This plan will not change that.
Only one thing will change that: lower house prices.
But see, the NARites and other politically-connected rubes will not allow the truth to be told, or the market to assert itself so long as the government can bury you in insoluble debt.
The Chinese and Japanese will fully rise (they're already half-awake) soon and when they do, the curtain will be called down on this stupidity via the bond market. Indeed, the blow-out of MBS spreads yesterday might have been due to a leak of this stupidity - there is no more-certain way to guarantee that Fannie and Freddie, now wards of the Federal Government, will detonate and leave a thermonuclear-sized hole in the Federal balance sheet than this piece of stupidity.
WHERE ARE THE DAMN ADULTS?
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Old June 19th, 2009 #585
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One of the reasons for this requirement is that in most states purchase money first mortgages are non-recourse. That is, if you default they can take the house and ruin your credit - but it ends there. In those states they cannot pursue you beyond foreclosure and reclamation of the house.
This guy is full of shit. When you sign a promissory note, whether it's backed by a mortgage or not, you are personally liable for the debt. How is it he says they can ruin your credit if it's non-recourse? The mortgage is, stricly speaking, the property standing for the debt. But nobody gives mortgages without an accompanying promissory note.

I have people come into my office on a daily basis who have had their house foreclosed or their car repossessed and now they are being sued. "They got their house / car / boat / motorcycle back. How can they be suing me now?"

See, when you buy an item, be it a car or a house or a TV, on credit, the lender has two remedies if the loan isn't repaid. First, it reposseses the item you bought and sells it. If the sale brings in enough money to pay the debt and the late fees and the lawyer charges and anything else they decide to stick on there, then you're clear. If it doesn't -- and it NEVER does -- the difference is called the deficiency. You are personally liable for the deficiency. The lender can sue you and take a judgment for the deficiency and garnish your wages (in most states, Texas being an exception), bank accounts or most anything else they can find.
 
Old June 20th, 2009 #586
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Originally Posted by General_Lee View Post
This guy is full of shit. When you sign a promissory note, whether it's backed by a mortgage or not, you are personally liable for the debt. How is it he says they can ruin your credit if it's non-recourse? The mortgage is, stricly speaking, the property standing for the debt. But nobody gives mortgages without an accompanying promissory note.

I have people come into my office on a daily basis who have had their house foreclosed or their car repossessed and now they are being sued. "They got their house / car / boat / motorcycle back. How can they be suing me now?"

See, when you buy an item, be it a car or a house or a TV, on credit, the lender has two remedies if the loan isn't repaid. First, it reposseses the item you bought and sells it. If the sale brings in enough money to pay the debt and the late fees and the lawyer charges and anything else they decide to stick on there, then you're clear. If it doesn't -- and it NEVER does -- the difference is called the deficiency. You are personally liable for the deficiency. The lender can sue you and take a judgment for the deficiency and garnish your wages (in most states, Texas being an exception), bank accounts or most anything else they can find.
Really? Denninger is wrong? I thought he was some kind of financial expert.

Wait, he says the same thing below that:

Quote:
In every state if you refinance the resulting mortgage is a recourse loan, which means they can sue you for any deficiency if you subsequently default and come after any other assets (other than retirement funds - which is why you NEVER EVER raid a 401k or IRA to stay afloat!) and even try to get a wage garnishment - and they just might!
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Old June 20th, 2009 #587
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http://blog.vdare.com/archives/2009/...al/#more-14143

Obama’s Financial Regulation Proposal
By Steve Sailer

Everybody has an opinion on Obama’s proposal for revamping financial regulation. I’ve been busy so I have no idea what’s in the plan, so I don’t have an opinion.

But, let me make one guess: I bet there’s not a single word in the proposal — nor, I presume, has there been a single word in all the commentary on the proposal — about moderating the anti-redlining push for more mortgage lending to minorities with poor creditworthiness that was so central to the Sand State subprime mortgage meltdown that set off the financial crisis.

After all, how can anybody talk about reforming this when nobody will even talk about the fact that the federal Home Mortgage Disclosure Act database shows that 77% of subprime home purchase mortgage dollars in California in 2006 went to minorities?

Update: Well, I was wrong. The White House White Paper talks about the new Consumer Finance Protection Agency intensifying the push for more lending to minorities:

The Agency should enforce fair lending laws and the Community Reinvestment Act and otherwise seek to ensure that underserved consumers and communities have access to prudent financial services, lending, and investment.

A critical part of the CFPA’s mission should be to promote access to financial services, especially for households and communities that traditionally have had limited access. This focus will also help ensure that the CFPA fully internalizes the value of preserving access to financial services and weighs that value against other values when it considers new consumer protection regulations.

Rigorous application of the Community Reinvestment Act (CRA) should be a core function of the CFPA. Some have attempted to blame the subprime meltdown and financial crisis on the CRA and have argued that the CRA must be weakened in order to restore financial stability. These claims and arguments are without any logical or evidentiary basis. It is not tenable that the CRA could suddenly have caused an explosion in bad subprime loans more than 25 years after its enactment. In fact, enforcement of CRA was weakened during the boom and the worst abuses were made by firms not covered by CRA. Moreover, the Federal Reserve has reported that only six percent of all the higher-priced loans were extended by the CRA-covered lenders to lower income borrowers or neighborhoods in the local areas that are the focus of CRA evaluations.

The appropriate response to the crisis is not to weaken the CRA; it is rather to promote robust application of the CRA so that low-income households and communities have access to responsible financial services that truly meet their needs. To that end, we propose that the CFPA should have sole authority to evaluate institutions under the CRA. While the prudential regulators should have the authority to decide applications for institutions to merge, the CFPA should be responsible for determining the institution’s record of meeting the lending, investment, and services needs of its community under the CRA, which would be part of the merger application.

The CFPA should also vigorously enforce fair lending laws to promote access to credit. Furthermore, the CFPA should maintain a fair lending unit with attorneys, compliance specialists, economists, and statisticians. The CFPA should have primary fair lending jurisdiction over federally supervised institutions and concurrent authority with the states over other institutions. Its comprehensive jurisdiction should enable it to develop a holistic, integrated approach to fair lending that targets resources to the areas of greatest risk for discrimination.

To promote fair lending enforcement, as well as community investment objectives, the CFPA should have authority to collect data on mortgage and small business lending. Critical new fields should be added to HMDA data such as a universal loan identifier that permits tying HMDA data to property databases and proprietary loan performance databases, a flag for loans originated by mortgage brokers, information about the type of interest rate (e.g., fixed vs. variable), and other fields that the mortgage crisis has shown to be of critical importance.

But, of course, the HMDA database is for prodding for more lending to minorities. Using it to check up on whether minorities are paying back their loans is unthinkable.

You can take Obama out of the ethnic shakedown racket, but you can’t take the ethnic shakedown racketeer out of Obama.
 
Old June 21st, 2009 #588
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Good reading. pdf.

http://www.drschoon.com/articles/DeathWatch.pdf

http://globaleconomicanalysis.blogsp...-horrific.html
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Last edited by Joe_J.; June 21st, 2009 at 12:42 PM.
 
Old June 21st, 2009 #589
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Originally Posted by Kievsky View Post
Really? Denninger is wrong? I thought he was some kind of financial expert.

Wait, he says the same thing below that:
A mortgage is simply a person pledging property to stand for a debt. So strictly speaking, a mortgage does not put the borrower on the hook personally. But in conjunction with every mortgage I have ever seen, the lender also requires the borrower to sign a promissory note which does obligate the borrower to repay the money.
 
Old June 21st, 2009 #590
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Originally Posted by General_Lee View Post
A mortgage is simply a person pledging property to stand for a debt. So strictly speaking, a mortgage does not put the borrower on the hook personally. But in conjunction with every mortgage I have ever seen, the lender also requires the borrower to sign a promissory note which does obligate the borrower to repay the money.
I have a question for you General Lee. Among the financial literati, some think deflation will last a good time longer, others think we're about to enter an inflationary period, maybe a hyper inflationary period. I don't know, but this leads up to my question.

Say, for argument's sake, that we enter big, bad, hyperinflation--really big, bad, hyperinflation. Now suppose the following:

1. I have a mortgage, a standard 30 year, no-tricks, mortgage.

2. I owe $140,000 on the mortgage. I've never had a late payment.

3. My payment is some fixed monthly amount, say, $1250.

4. Hyperinflation hits, and hits bad.

5. A year passes. Sack boys at Krugers make $100,000 a day.

Finally, here is the question. Can I reach into my pocket, pull out $140,000 (enough to buy a used pair of roller skates,) and pay off my mortgage? Or have the insidious bastards buried some small print on page 27 to prevent this? Perhaps, a forced re-finance, or something that would let them re-define the balance, based on inflation?

This is all assuming I have the standard, no-tricks, 30 year mortgage.

Mike
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Old June 21st, 2009 #591
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The one thing I would look forward to in an inflationary scenario is that my mortgage would be paid back in devalued currency resulting in a loss to the jews holding the note.

The US government has discussed this. The see the benefit in inflation this way. They can repay lenders in devalued money. I think there was some discussion of this on Denninger's forum.
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Old June 21st, 2009 #592
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Originally Posted by Mike in Denver View Post
I have a question for you General Lee. Among the financial literati, some think deflation will last a good time longer, others think we're about to an enter an inflationary period, maybe a hyper inflationary period. I don't know, but this leads up to my question.

Say, for argument's sake, that we enter big, bad, hyperinflation--really big, bad, hyperinflation. Now suppose the following:

1. I have a mortgage, a standard 30 year, no-tricks, mortgage.

2. I owe $140,000 on the mortgage. I've never had a late payment.

3. My payment is some fixed monthly amount, say, $1250.

4. Hyperinflation hits, and hits bad.

5. A year passes. Sack boys at Krugers make $100,000 a day.

Finally, here is the question. Can I reach into my pocket, pull out $140,000 (enough to buy a used pair of roller skates,) and pay off my mortgage? Or have the insidious bastards buried some small print on page 27 to prevent this? Perhaps, a forced re-finance, or something that would let them re-define the balance, based on inflation?

This is all assuming I have the standard, no-tricks, 30 year mortgage.

Mike
Yes, you could pay back in inflated dollars . . . assuming your wages kept pace with the general pace of inflation. As a general principle though, that kind of inflation usually goes hand-in-hand with rampant unemployment.

I've never seen a mortgage with an "inflation" clause, but generally speaking, the interest rate itself is supposed to give a return to the lender and cover for inflation. Interest rates go up during times when inflation is expected. As in the late 70s and early 80s. Mortgage rates were 18 percent and up. That is why adjustable rate mortgages always have a lower rate than fixed rate mortgages taken out at the same time: The lender can protect himself from inflation more readily.

Now take that information for what it's worth, which probably isn't much.

Last edited by Marse Supial; June 21st, 2009 at 03:34 PM.
 
Old June 21st, 2009 #593
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Finally, here is the question. Can I reach into my pocket, pull out $140,000 (enough to buy a used pair of roller skates,) and pay off my mortgage? Or have the insidious bastards buried some small print on page 27 to prevent this? Perhaps, a forced re-finance, or something that would let them re-define the balance, based on inflation?
In Weimar Germany you could. The courts declared 'a mark is a mark.' Those with debts paid them off with devalued marks. But anyone with savings or living on fixed income was screwed. Say you're Helmut Witmeyer. You've carefully saved up 120,000 marks over forty years. Then, after a few months of hyperinflation, you get a letter from the bank along with an enclosed check, for 200,000 marks, saying the cost of administering your account is no longer worth it, we took the liberty of rounding what we owe you upward in closing it. This is the sort of horror that turns middle class people into radical revolutionaries.
 
Old June 21st, 2009 #594
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Well, just when you thought that the Bearer Bond story was finished, it gets twisted yet again.
Remember, this was the claim:
“They’re clearly fakes,” said Stephen Meyerhardt, a spokesman for the U.S. Bureau of the Public Debt in Washington.
Uh, Bloomberg..... how about an accurate quote?
"Based on the photograph we've seen online, they are clearly fake. And not even good fakes," said Stephen Meyerhardt, a spokesman for the Treasury's Bureau of the Public Debt.
Online? You mean that the Treasury Department hasn't been sent a high-resolution digital photo of what was seized? A week after the fact?
I don't believe you Stephen.
In the last two years, Italian authorities have seized some $800 million of U.S. bonds in the Como area in northern Italy.
Those would be real bonds, I assume? But I thought Stephen said....
He added that there is only $105 million in Treasury bearer bond securities outstanding, so the $134 billion amount seized far exceeds the universe of outstanding securites.
Wait a second...... $800 million in real bonds have been seized, but there are only $105 million outstanding? There may be some confusion here as to whether all these bonds are "bearer" instruments or not, but even if not, a registered paper bond is worthless if stolen, as its purchaser is known and before anyone is going to redeem it for you they're going to verify not only its authenticity but that you're the rightful owner.
Another U.S. official said the seized bonds were purported to be issued during the Kennedy administration in the early 1960s, but the certificates showed a picture of a space shuttle on it -- a spacecraft that first flew in 1981. Some of the bonds were purportedly issued in a $500 billion denomination that never existed.
If there's a picture of a shuttle on the bond with an issue during the Kennedy Administration, its definitely fake of course. But... where are the actual pictures of these seized bonds?
And are they still seized? That's an even better question; there appear to be (at least) two different stories there too:
Under Italian law when law enforcement agencies seize fake bonds or counterfeit money they are under the obligation to arrest the bearers. And in order to avoid misappropriation, the agency seizing the material, in this case the financial police, must quickly proceed to its destruction (i.e. incineration).
However, in case of real securities, after the securities holders are identified, the financial police must release them immediately after issuing a statement of confiscation and imposing a fine valued in this case at € 38 billion (US$ 53.4 billion). In this case, why were the two men released right away without any fine imposed?
It doesn't end there:
If what Meyerhardt says is true, some major financial institutions have been deceived by the securities carried by the two Asian men. This would be a bombshell and raise serious questions as to how many bank assets are actually made up of securities that for Meyerhardt are “clearly fakes.”
If counterfeit securities of such high quality are in circulation the world’s monetary system, let alone that of the United States, is in danger. International trade and exchanges could come to a halt.
Hmmmm... sensationalist conclusion without foundation? Maybe.
Now for the somewhat-tin side of things - or maybe, a LOT of tin. Warning - this "source" isn't someone I'd trust to bring me a cup of coffee. Read and believe at your own risk:
(Turner Radio Network) -- Two Japanese men arrested by Italian Police while trying to smuggle $134 Billion in U.S. Treasury Bonds concealed in suitcases, out of Italy into Switzerland, are employees of the Finance Ministry of Japan.
Turner Radio Network has now confirmed the two men arrested by Italy were trying to secretly dump Bonds that were previously held by the nation of Japan. The men arrested have told Italian police they were ordered to move the Bonds by the government of Japan because the Japanese government has lost faith in the ability of the U.S. government to repay its debts.
And attached to this post are a few pictures and a Youtube link, all but one of which I've seen before. The close-up I have not, but unfortunately the detail is insufficient for me to do anything more than observe that it looks rather odd compared to what I've seen as specimens, and does NOT match the apparent paper on the table picture. Heh, whatever. IMHO Turner has nothing and may have been fed a bunch of garbage (which he immediate regurgitated); certainly his "pictures" and "video" are NOT a scoop.
It gets even more strange (back from the tin brigade - I think?) - this time with a claim that the mafia (yes, the real one over in Sicily) is involved, and the bonds are fake:
Whether the men are really Japanese, as their passports declare, is unclear but Italian and US secret services working together soon concluded that the bills and accompanying bank documents were most probably counterfeit, the latest handiwork of the Italian Mafia.
....
The mystery deepened on Thursday as an Italian blog quoted Colonel Rodolfo Mecarelli of the Como provincial finance police as saying the two men had been released. The colonel and police headquarters in Rome both declined to respond to questions from the Financial Times.
What?
So let's see if we can try to sort out what we're "learning":
  • The bonds are declared fake by the Treasury, stating that there's only $100 million outstanding and obviously $134 billion have to be fake.
  • Italy claims to have seized $800 million in real US Bonds in the last year.
  • The last legitimate issue of paper US Treasuries (that is publicly admitted to) was in the early 1980s when bearer instruments were outlawed. All are now stated to be electronic (just a serial number and amount.)
  • The two gentlemen are allegedly Japanese, and there are various stories about who they really are - from notorious counterfeiters who have served hard time for previous offenses to Japanese finance officials. Most notably, there has been no public statement from Italy about these gentlemen's actual identities.
  • It appears from all reports that these two were detained but not arrested, with some reports that they were not only released but took the allegedly-fake instruments with them, even though Italian law precludes both your release and return of your fake instruments if you are caught with fake securities or currency.
This is stuff out of a Tom Clancy novel, and the longer it goes on and the more twisted the "explanations", the less sense it makes.
I find it incomprehensible that the Italian government released these two if they were actually caught in a massive counterfeiting operation with $134 billion in fake US Securities.
I find it equally incomprehensible that there was not an immediate indictment out of a US Prosecutor coming from such an event and a demand for extradition back to the United States.
And further, I find it equally incomprehensible that if the securities are in fact real, and Treasury is lying, that Italy would not impose the fine.
Only the latter scenario, however, covers what apparently has happened - the two "couriers", whoever they are, have been released and, according to some accounts, they took the allegedly "fake" instruments with them, and there has been no US indictment issued for counterfeiting the instruments.
Uh, can we have some truth here folks, because none of what is being reported adds up and my BS detector is ringing off the hook.
http://market-ticker.org/archives/11...-More-Odd.html
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Old June 21st, 2009 #595
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Originally Posted by General_Lee View Post
...
Now take that information for what it's worth, which probably isn't much.
Well, your information is always worthy, GL. However, we would be wise never to underestimate the guile and greed of the bankers.

I think that you are correct, but I bet if this situation arises, there will at least be an attempt to pass laws allowing the mortgage issuers to adjust loans, even those made years before. Or maybe I'm only paranoid. I just don't think that entities with the power banks have, would sit and let homeowners pay off mortgages with pocket change. One set of rules for the rulers, another for the ruled.

Gee! Should I buy that Snickers bar? No, I think I'll pay off my home mortgage, instead.

Mike
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Old June 21st, 2009 #596
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Weak Volumes, Other Indicators Suggest Bull Market Is On Its Last Legs; a Slide to New Lows in the Autumn?

JUNE 22, 2009
By E.S. BROWNING

The U.S. stock market is stumbling.

After a powerful rally that pushed the Dow Jones Industrial Average ahead by more than 30% in three months through last week, stocks are clearly having trouble extending their gains.

Many analysts see a pullback ahead, and they are debating whether it will be just a temporary annoyance or something bigger and more painful.

Indicators of market health, including trading volume, buying demand and trading by companies and corporate insiders, are beginning to flash yellow or red. People also are beginning to question whether the economic fundamentals are strong enough to justify continued gains.

The Dow finished Friday at 8539.73, down 3% for the week. It is at the same levels now as in early May. The Standard & Poor's 500-stock index, which a week ago was up as much as 40% from its March low, ended Friday at 921.23, still 36% above the low.

"This 40% rally isn't based on a 40% increase in fundamentals," says Michael Farr, president of Washington, D.C., money-management firm Farr, Miller & Washington. "The economy is still declining. Credit isn't coming back. Unemployment is rising, and we are seeing a much less robust consumer. I think the market at some point is going to give back a large portion of these gains."

Mr. Farr and others say it is impossible to know whether the market already has topped out, or will edge higher before giving up the ghost. But even many bullish investors see a downturn ahead.

Stocks have surged since early March in part because government stimulus spending has found its way into financial markets and because some investors have moved money out of cash and into stocks.

Other investors may emerge from the sidelines. China Investment Corp., the giant sovereign-wealth fund, is considering potential U.S. investments. Its chairman, Lou Jiwei, has expressed concern that the fund is in danger of missing opportunities as the market rallies, according to people who work with the fund.

While those forces could keep pushing stocks higher for a while, some investors and analysts see signs that the rally's underpinnings already are weakening. Stocks seem a lot less cheap than before their big gains, and investors are no longer impressed when the economic news is simply less bad than before, says Linda Duessel, market strategist at Federated Investors in Pittsburgh.

She thinks improving corporate-profit reports will help push stocks significantly higher in the summer and fall, but first, "history would suggest we would get a 5% to 10% correction somewhere," she says.

That's the optimistic view. Pessimists think the damage could be greater, and the real pessimists worry that stocks could fall to new lows by autumn. They say stocks just aren't behaving as they have at the start of past bull markets.

Average daily trading volume for all New York Stock Exchange stocks hit a record of 7.21 billion shares in March, as the rally began and heavy buying sent stocks sharply higher. That slipped to 6.42 billion in April, and so far this month, it is running at 5.14 billion, well below the 2009 average of 6.15 billion a day.

"A new bull market is one when investors are prepared to commit larger and larger amounts of new money to equities," says Paul Desmond, president of Lowry Research in North Palm Beach, Fla. "What we have seen here is a very consistent drop in total volume going back to early April."

Mr. Desmond says his data, going back to the 1930s, don't show any new bull market with such a weak volume trend, which leads him to believe that this rally won't become a lasting bull market.

Other data reinforce that concern. The number of stocks joining in the gains has begun to shrink, which doesn't typically happen this soon in a real bull market. And Mr. Desmond's measure of stock demand, based on the amount of trading volume and price change occurring on stock gains, indicates demand has been fading, another negative signal.

"Investors are risking smaller and smaller amounts of capital, and that is a bad sign," Mr. Desmond says.

Phil Roth of New York brokerage firm Miller Tabak shares many of these concerns, and has other worries as well. New stock issuance hit a record in May, he notes, which has created a lake of supply just as demand is softening. Senior corporate officers, who had been buying for their accounts earlier this year, have become net sellers. Neither trend supports the market. Mr. Roth says indexes still might gain some ground before topping out, and he wouldn't be surprised to see the Dow at 9000. But once it starts to fall, he fears, it could sink below the March closing low of 6547.05.

People who recently took money from cash and bought stocks won't want to reverse course unless they get a shock, he says. If they do get a shock, perhaps an indication that the economy's troubles are more lasting than people had hoped, that could produce new selling and new lows. "At some point, investors will be saying, where is the good news?" he says.

The difference, or "spread," between yields of double-A corporate bonds and Treasury bonds averaged 1.45 percentage points over the past 30 years, Mr. Roth says. At its worst during the credit crunch last year, it was 3.81 points. Recently, it fell to 2.78 points, better but still not half way back to average. That means corporate bonds remain more attractive than normal and are competing with stocks for investors' money.

Investors seem to be waiting for either a fall in stock prices or a considerable brightening in the economic outlook before they put a lot more money into the market.
http://online.wsj.com/article/SB124561705762935201.html
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Old June 22nd, 2009 #597
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Quote:
From Harry Schultz:
Dear Bob:
Bob Chapman’s Int’l Forecaster newsletter revealed (5/20) this startling intelligence (from within US State Dept & embassies):


”Some US embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of US cash to purchase currencies from those govts, quietly. But not £’s. Inside the State Dept there is a sense of sadness & foreboding that ‘something’ is about to happen, unknown re a date—just that within 180 days, but could be 120-150 days.”


Bob quotes another source that “Panasonic has told their people to be back in Japan by Sept 09.”

Harry Schultz, dean of newsletter writers, has quoted the Chapman letter of May 30 regarding US embassies being sent large amounts of cash with which to buy local *currencies, to last them a year. Here is Harry’s remarkable take on the situation:

“My HSL suspicion is that the elite plan another FDR style “bank holiday” of indefinite length, perhaps very soon, to let the insiders sort-out the bank mess which is getting more out of their control every day.*Insiders want/need to impose new bank rules. Widespread nationalization could result, already under way. It could also lead to a formal US$ devaluation, as FDR did by revaluing gold (& then confiscating it). But devalue against what? The euro? Doubtful. Gold? Maybe. Or vs. the IMF basket of currencies (which seems more likely)—& much in the news recently. Any kind of bank holiday will push the US$ lower, which may be a bonus benefit to their ongoing scenario of letting the $ fall. Such a fall would get the devaluation they want without having to declare it. In sum, the insiders want more bank & system control, fewer banks & a lower US$. A bank holiday would suit all their needs.

Obviously, U can’t open safeboxes if the banks are closed, so plan accordingly. All this is speculation, but we have to go with what we’ve got, scraps of info that point to certain possibilities. In any case such a closure will, IMO, come sooner or later, as the worst of the embedded derivatives are still to be faced. We are years away from solving them because the controllers don’t want to; their fingerprints are all over them. ***

PS: during the FDR bank holiday, thousands of banks never reopened; it was a face-saving way of shutting them down. I would guess the same would occur today; thousands have little or no net value, loaded with debt, bad mortgages.
http://thecomingdepression.blogspot....g-prepare.html
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Old June 22nd, 2009 #598
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That's frightening stuff, Joe J. I'm a connoisseur of doomerism around the Internet, and there's a lot of chatter that something is going to happen this summer. Of course, there's been a lot of predictions that "something is going to happen in the near future" and it didn't happen. I'm guilty of it myself.

But I think it's going to happen -- I guess something like a "national Katrina" soon enough. And I got to say, the national Katrina is going to change the culture in our direction very much -- it's going to be very good for our cause. Whites are going to be pushed off the fence, so to speak. Here's a couple things for you all to look at:

http://www.telegraph.co.uk/culture/c...k.html?image=2







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Old June 22nd, 2009 #599
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Kievsky, Bob Chapman has saved me money. He's a smart guy. Counterintel in the military in the 50s, I think. Worked in stocks after that. Now big on gold. I catch him on shortwave. So far, he has a really good track record.

We know that the current system is false and built on the jews' smoke and mirrors and lies. Nothing the jew does is ever permanent or true. So, like you, I think it is high time for a fall.

Also, check out:
Welcome to Jim Sinclair's MineSet

http://www.enterprisecorruption.com/
and it's forum:
http://www.wiredpirate.com/forum/index.php

Up to date Hungarian world monitoring site. Shows natural/man-made disasters, pestilence, etc.
RSOE EDIS - Emergency and Disaster Information Service
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Old June 24th, 2009 #600
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Default It's "OH, SHIT" time for California.

Footage of rampaging muds that didn't get a welfare check coming soon???

Quote:
State will have to begin issuing IOUs next week, controller says
If the budget crisis is not solved, county agencies, vendors and tax-refund recipients will receive warrants instead of checks, Controller John Chiang warns.


By Eric Bailey

11:42 AM PDT, June 24, 2009

Reporting from Sacramento — The state controller announced this morning that he will have to begin issuing IOUs next week if California lawmakers and Gov. Arnold Schwarzenegger don't settle on a solution to the $24-billion deficit.

As lawmakers in both houses began debating proposals for balancing the budget, Controller John Chiang said he would have to issue warrants starting July 2 because of the state's precarious cash position.

Among those who could receive IOUs are county social service agencies, private contractors, state vendors and Californians entitled to income and corporate tax refunds.

Chiang met with Schwarzenegger and legislative leaders this week to warn them of the consequences of further delays.

The controller had to delay some payments for a month in February as lawmakers wrangled over the budget, which since then has been undermined even further by free-falling tax receipts as the economy has continued to decline.

Chiang said the state's cash shortfall is unlike anything "seen since the Great Depression," with a $2.8-billion shortfall anticipated in July that could grow to $6.5 billion by September.

Meanwhile, legislative leaders were saying even before the first vote was cast that key provisions of the Democrat-crafted budget proposal they are considering today -- in particular, tax hikes on the oil and tobacco industries -- will almost certainly fail to garner the necessary two-thirds approval.

That level of support requires the votes of several Republicans in each house.

"In all likelihood we're probably not going to get them," said Senate President Pro Tem Darrell Steinberg (D-Sacramento).

If today's attempts to pass the Democrats' plan flops as anticipated, legislative leaders and Schwarzenegger are expected to gather behind closed doors in coming days to negotiate a compromise.

State officials say that without a solid budget, California government could run out of cash by late July.

[email protected]

Times staff writer Shane Goldmacher contributed to this report.
http://www.latimes.com/news/local/la...,1060005.story
Quote:
California Collapsing





Washington and Wall Street seem to be treating California as if it were a sideshow in the financial circus of these turbulent times.

It’s not.

California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center.

California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India.


And it’s collapsing.

Major California counties are ground zero in the continuing mortgage meltdown:

Los Angeles County with 5.32 percent of mortgages 90 days past due … Monterrey County, 8.02 percent … Imperial, 8.13 … San Bernadino, 8.66 … Madeira, 9.21 … San Joaquin, 9.53 … Riverside, 10.2 … Merced, 10.57 … and more!

California’s inventory of foreclosed homes is skyrocketing. Home prices are plunging. And the impact of surging unemployment is just beginning to show up in the data …

Worst Unemployment in 64 Years

The state’s unemployment rate has surged to 11.5 percent, the worst since World War II.


Last month, California lost 68,900 jobs. And since July 2007, it has lost 859,000 jobs, including 739,500 just in the past 12 months.

Even if the economy recovers, an unlikely scenario in my view, economists agree that California will continue to be slammed by layoffs, at least through the end of this year and probably well into 2010.

And even assuming a national recovery, UCLA’s Anderson Forecast projects an average unemployment rate of 12.1 percent from this fall through next spring.

What about without a national recovery? California’s jobless could go beyond 15 percent.

Worse, if you include part-time workers seeking full-time work plus workers who have given up looking entirely, it could reach 25 percent, exceeding the worst national unemployment levels of the Great Depression.

“Our wallet is empty.
Our bank is closed. And
our credit is dried up.”

These are not the words of a Dr. Doom in New York or a forlorn banker in Georgia. They represent the confession of Governor Arnold Schwarzenegger before a rare joint session of the California legislature … and with no exaggeration!

The state faces a stunning $24.3 billion budget deficit, even assuming no significant deterioration in the economy from this point onward. And the state has lost virtually all hope of President Obama declaring, “California is too big to fail.”

California State Treasurer Bill Lockyer tried to make that argument to Washington, and did so with great vigor. But he was rejected. After the long line-up of failed companies with hat in hand in recent months — on the steps of Congress or the White House lawn — some folks in government finally appear to have learned how to just say “no.”

“You’re on your own,” is the message from the president to the governor. “Beyond your share of the stimulus package, that’s it! No more!”

Result: The inevitability of massive state cutbacks, including large numbers of state jobs getting axed — all while the California jobless rate is already 11.5 percent.

How many state jobs are in jeopardy? Right now, Schwarzenegger is proposing laying off 5,000 state employees, as well as slashing education and social welfare programs. But the Anderson Forecast projects that Schwarzenegger’s budget cuts will eventually result in 64,000 job cuts from state government plus countless private-sector and local government jobs.

Massive Downgrades Coming

California’s credit rating is already the lowest among all U.S. states.

But with Moody’s, S&P, and Fitch still greatly influenced by massive conflicts of interest, it’s not nearly low enough.

And sure enough, on Friday, Moody’s tacitly admitted as much, announcing that it may have to cut California’s rating by several notches in one fell swoop!

Standard & Poor’s put California on watch for a possible downgrade a few days earlier. Fitch did the same May 29.

The big problem: Once downgraded, California’s rating is likely to fall below the minimal level legally required for most money market funds, forcing these funds to dump California paper posthaste.

Moody’s wrote:

“If the Legislature does not take action quickly, the state’s cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July. … Lack of action could result in a multi-notch downgrade.”

But lack of action is precisely what Sacramento is now becoming most famous for. In fact, in their latest scuffle, Democrats proposed a budget that would raise $2 billion from cigarette taxes and oil companies. But the governor promptly vetoed the plan. So now Sacramento is in a new, escalating battle over the deficit just weeks before the state is expected to run out of cash to meet payroll and other bills.

State officials continue to insist that a state default is unthinkable … much like GM executives said their bankruptcy could never happen.

In my view, there is a very HIGH probability that California will default.

It’s obvious its debt merits a junk bond rating from every Wall Street rating agency.

And it’s equally obvious that the ratings agencies are artificially inflating the rating, stalling downgrades, and grossly understating the risk to investors
http://www.moneyandmarkets.com/calif...llapsing-34271
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