I couldn't resist, if you don't like, we'll come up with something else.
-Richard
Order of Kilopi
I couldn't resist, if you don't like, we'll come up with something else.
-Richard
Order of Kilopi
And I almost forgot about this:
It's both, although it's not uncommon that only one side will be convicted or even charged in some cases. And while in popular terminology bribery is pretty straightfoward, the legal definitions are a mess and you have both federal and state law at work.Originally Posted by PraedSt
And indeed any honest person would be surprised they didn't go after the bankers, but that is par for a very disgusting course. Not only are these banks (and other large concerns) Too Big to Fail, they're Too Big for Jail. They fear if they were to take strong criminal action against them, it would roil the markets too much, especially now, so they end up fining them and they promise never to do it again. Sometimes they'll go after individuals criminally (once they've been fired from the company) but they'll never go after TBTF criminally.
In the long run, that just makes things worse of course because it just makes the public believe the system is corrupt with a two-tiered system.
A big example of this is drug money laundering. Our banks (and others) are up to their eyeballs in it:
http://www.bloomberg.com/news/2010-0...-u-s-deal.html
How much do the Mexican cartels make per year? It's in the billions, and you don't deal with money like that cash only in suitcases. It's obvious they use the financial system
Order of Kilopi
Amusing Wachovia defence from that article. "We didn't spot a sum equal to 1/3 of Mexico's GDP being funneled through our accounts." Who believes this sort of stuff?
Order of Kilopi
I have a feeling that we'll run this thread to the max too. Do we have any major economic data coming out soon, or will we just watch it all chug along for the next few weeks?
Et tu BAUT? Quantum mutatus ab illo.
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Well it looks like Europe's heading towards an reorganization of some sort. I'm curious as to how the stock market will handle it when it comes.
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Godwin's law?
Et tu BAUT? Quantum mutatus ab illo.
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Oh no, nothing so serious. Just the EU throwing members out, or Germany leaving, etc. We'll have resurrected currencies, lots of elections and plenty of schadenfreude! Exciting times. And then there's always the gorilla train wrecks of the US, Japan and China to come.
p.s Sorry I haven't replied on the Train thread, I've been busy. But I will!
Order of Kilopi
Another week and all's well!
I say.
BTW PraedSt, did you/do you know
Northern Boy? Seems to operate
in the same World as you.
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That's coming in a couple of weeks. The vaunted Super Committee's deadline is Thanksgiving or a couple days before, and word is they're deadlocked. Moody's has hinted at a downgrade themselves if they don't get their act together and S&P might go down another notch, so expect lots of trainwreck on that front very soon.
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Well, I don't know if ready to pronounce sticksave yet, but they got the Italian patient stabilized. Yields have come down, and the inversion has subsided on the bond side:
10Yr: 6.45%
5Yr: 6.46% (still technically 1bp above the 10, but we'll call that inversion averted
3yr: 6.15%
2yr: 5.69% (that's an 11% drop)
Bills:
1yr: 6.61%
6m: 5.86%
3m: 4.96%
So we've still got inversion with the 1yr zero coupon vs the bond side, and the 6 month yielding above the 2yr, but we've stabilized.
And as someone I was reading was pointing out, this moves have been 6-sigma and greater events. Heck, I think the rocket shot on the 1yr was a 10 sigma move. At any rate, these 6-sigma moves are occuring a heck of a lot more frequently than 6-sigma events should, of course meaning the models that calculate the sigma are wrong.And that's really been the whole problem with all these economic and financial modelling that has served us so well. They are right until they're wrong, and when they go wrong, they go wrong big time.
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Why do people even listen to Moody's and S&P anymore, when they're part of the reason for the train wreck by their disastrously wrong multi-A ratings of the toxic crap the banks were passing around between them?
__________________________________________________
Reductionist and proud of it.
Being ignorant is not so much a shame, as being unwilling to learn. Benjamin Franklin
Chase after the truth like all hell and you'll free yourself, even though you never touch its coat tails. Clarence Darrow
A person who won't read has no advantage over one who can't read. Mark Twain
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I trust you all are aware of the vaunted EFSF, which stands for the European Financial Stability Fund, which is the latest bailout vehicle that is supposed to save the EU. It is a bunch of financial razzle dazzle, the details of which I don't understand, but somehow it was going to lever itself up to E1T, one trillion euros, worth of firepower to bail out PIIGS as need be. The structure of the thing is about the same as all the nonsense created in the housing bubble, you know the CDOs and all that garbage that supposedly made risky loans become risk free.
Well, to get that 1T, the thing needs to issue debt, which it is via bonds, EFSF bonds. Well, funny thing was, for something that was going to lever up to 1T, it was having trouble even selling less than 10B euros of bonds. Last week they held an auction for E3B worth of EFSF bonds. 3B compared to 1T, keep in mind.
According to this, turns out even that was a lie:
http://www.telegraph.co.uk/finance/f...-own-debt.html
They had to buy 300M of their own bonds to keep the auction from failing, and failing on a measly 3B total.
Today, they denied that story:
http://www.reuters.com/article/2011/...r&dlvrit=56943
We didn't buy our own bonds, they say. Note the part about "upheaval has made it difficult" to lever up to E1T.
Established Member
Isn't there an Italian bond auction coming up today?
Who will buy? :-)
Peter
Order of Kilopi
Yep, there was, E3B of 5yr bonds. On the one hand, the auction was weak, a record yield of 6.29% and a bid to cover of 1.47. On the other hand, the prevailing yield in the market before the auction was 6.43%! So they engineered a rabbit out of their hats on that one. What they pulled, I don't know, but yields starting spiking up across the board after the auction, the ECB intervened, buying up some, but yields are continuing to rise.
Also I was reading something with some charts of the ECB's action that shows clearly they pulled support last week, allowing Italian yields to spike (note this tells you what the market would do without ECB intervention), then started back intervening once Berlusconi announced he would resign. It is clear the ECB did this to force Berlusconi out. Get rid of him or we abandon you to your fate.
And meanwhile Spanish yields went over the 6% mark and CDS spreads on all the sovereigns are blowing out as well.
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And something else to ponder. The new head of the ECB is Italian Mario Draghi. He's a former Goldman Sachs honcho. Berlusconi's replacement, Mario Monti, was a Goldman "advisor" of some sort as well. The same is true for the purported new boss in Greece, "L-Pap", Papademos or whatever. He was a Goldman "advisor" as well, and was the head of the central bank in Greece when Goldman was helping engineer the tricks that let Greece hide its true debt levels.
Giant Vampire Squid.
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Cthulhu Economics?
STARGAZING: All I see are the lights of a billion places I'll never go. --Howard Tayler, Schlock Mercenary
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hmm.. so you're saying that Goldman Sachs might have a little bit of influence on things in Euroland..
for some reason, i find that somewhat unsettling..
Established Member
A little bit of influence!!!!!!!!!!!I will go get my Private Eye latest which has a nice list.
Established Member
pasted from Amazon website.... a revelatory history of Goldman Sachs, the most dominant, feared, and controversial investment bank in the world
For much of its storied 142-year history, Goldman Sachs has projected an image of being better than its competitors--smarter, more collegial, more ethical, and far more profitable. The firm--buttressed by the most aggressive and sophisticated p.r. machine in the financial industry--often boasts of "The Goldman Way," a business model predicated on hiring the most talented people, indoctrinating them in a corporate culture where partners stifle their egos for the greater good, and honoring the "14 Principles," the first of which is "Our clients' interests always come first."
But there is another way of viewing Goldman--a secretive money-making machine that has straddled the line between conflict-of-interest and legitimate deal-making for decades; a firm that has exerted undue influence over government since the early part of the 20th century; a company composed of "cyborgs" who are kept in line by an internal "reputational risk department" staffed by former CIA operatives and private investigators; a workplace rife with brutal power struggles; a Wall Street titan whose clever bet against the mortgage market in 2007--a bet not revealed to its clients--may have made the financial ruin of the Great Recession worse.
As William D. Cohan shows in his riveting chronicle of Goldman's rise to the summit of world capitalism, the firm has shown a remarkable ability to weather financial crises, congressional, federal and SEC investigations, and numerous lawsuits, all with its reputation and its enormous profits intact. By reading thousands of pages of government documents, court cases, SEC filings, Freedom of Information Act papers and other sources, and conducting over 100 interviews, including interviews with clients, competitors, regulators, current and former Goldman employees (including the six living men who have run Goldman), Cohan has constructed a vivid narrative that looks behind the veil of secrecy to reveal how Goldman has become so profitable, and so powerful.
Part of the answer is the firm's assiduous cultivation of people in power--dating back to 1913, when Henry Goldman advised the government on how the new Federal Reserve, designed to oversee Wall Street, should be constituted. Sidney Weinberg, who ran the firm for four decades, advised presidents from Roosevelt to Kennedy and was nicknamed "The Politician" for his behind-the-scenes friendships with government officials. Goldman executives ran fundraising efforts for Nixon, Reagan, Clinton and George W. Bush. The firm showered lucrative consulting or speaking fees on figures like Henry Kissinger and Lawrence Summers. Famously, and fatefully, two Goldman leaders-- Robert Rubin and Henry Paulson--became Secretaries of the Treasury, where their actions both before and during the financial crisis of 2008 became the stuff of controversy and conspiracy theories.
Order of Kilopi
Rumble, rumble. Unicredit, Italy's biggest bank, just reported a E10.6B loss in Q3, on "expectations" of a smidge of profit, a few million, and announced it will need to raise E7B or so in new equity capital. Trading has been suspended as its shares fell like a rock. Euro is dropping as well.
Also, Moody's just announced it's putting Credit Suisse (Big Swiss bank) on credit review. And the ruling party in Germany just voted to created a mechanism for Euro exit.
Incidently, Unicredit is one of the descendents of Creditanstalt.
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OUCH!
That's basically a declaration that they'll remove themselves from the Euro before allowing themselves to be dragged into a money printing adventure.
__________________________________________________
Reductionist and proud of it.
Being ignorant is not so much a shame, as being unwilling to learn. Benjamin Franklin
Chase after the truth like all hell and you'll free yourself, even though you never touch its coat tails. Clarence Darrow
A person who won't read has no advantage over one who can't read. Mark Twain
Order of Kilopi
And Italian yields have just breached 7% again on the 5yr and 10yr. No re-inversion yet.
Just above everybody now realizes the only thing that will save Italy is massive printing by the ECB. They're begging for it across the board, demanding Germany be brought to heel. I think there is an off chance that the German leadership might give in, but if they do, they'll soon be new German leadership, and that leadership will pull out of the EU in no time flat.
Order of Kilopi
The Spanish 10yr is now well over 6%, 6.34% last I checked:
http://www.bloomberg.com/apps/quote?ticker=GSPG10YR:IND
Belgium and France are now at record levels as well.
Belgian 10yr is now pushing 5%, now at 4.91%:
http://www.bloomberg.com/apps/quote?ticker=GBGB10YR:IND
Note it is spiking well about the last peak a couple months ago when everything blew out prompted the last sticksave.
France is getting close to its last peak as well, which was around 3.7%.
I think you can see how only the ECB putting the printers in turbo mode can save this. And that is the one thing the Germans won't do. It's in their DNA not to do that, with Weimar burned in that very DNA (because printing --> unpleasant fellow with the little moustache). What was that song, "I'll do anything for love, but I won't do that?"
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Why is Goldman Sachs allowed to get their tentacles into everything when it seems obvious that they are incompetent?
Et tu BAUT? Quantum mutatus ab illo.
Order of Kilopi
Because they're not incompetent, they're actually extremely competent, it's just that they're competent at making money at the expense of everyone else.
And they know exactly how close they can get to buying politicians outright without crossing the line into criminally chargeable corruption.
__________________________________________________
Reductionist and proud of it.
Being ignorant is not so much a shame, as being unwilling to learn. Benjamin Franklin
Chase after the truth like all hell and you'll free yourself, even though you never touch its coat tails. Clarence Darrow
A person who won't read has no advantage over one who can't read. Mark Twain
Established Member
Maybe a compromise would be to print millions of German beer mats, with a space for the IOU, and drop them from helicopters to get bartering going. Cos we are going to be bartering soon.
Order of Kilopi
Heh, heh:
http://www.reuters.com/article/2011/...7MG26L20111116
Italy is not going to release their preliminary Q3 GDP results. Don't worry, it's not that it sucks and would further roil their bond market, it's just some highly technical revisions to the raw data that prevent them from doing the preliminary report. Nothing to get excited about at all.
Now, the final report is due Dec. 21. Any guess on what technical problems may arise that prevent the release of the final as well? Or maybe they'll just cut, as part of the austerity measures, the agencies responsible and say sorry, we just can't afford to calculate our GDP anymore. See we're cutting expenses so it's all good.
And then this:
http://www.bloomberg.com/news/2011-1...nata-says.html
Italy needs to sell E440B of debt next year, but no problem says their public debt director (that number seems to have increased from the last I read). They're not Greece, quoth she. That's true, they're about 6 times bigger.
And then this:
http://www.bloomberg.com/news/2011-1...cial-says.html
Some honcho at the Bank of Italy says their bond market is frozen and it's only the ECB that is keeping it going. Yields on the 10 year managed to drop to 6.75% today, but they came back and are sitting at 7.0% exactly last time I looked, which indicates the ECB intervention isn't holding.
The ECB is supposedly sterilizing these purchases. That is, foor every euro they create to buy Italian and Spanish bonds, they pull one euro out from somewhere else, at least on average, and that keeps the monetary base from increasing. This is how they can say they're not printing. With our Helicopter, at least there's the balance sheet which can you look at and see what's happening at the general level -- I don't know how much info the ECB puts out, but it's not like our bunch.
Anyway, the only way they're going to stop this yield blowout is to say the hell with sterilizing and print, print, print.
And yeah, they're having to intervene with Spain too. Their yields haven't hit 7% yet, but they're nipping at Italy's heels. And Spain has an auction tomorrow.
-Richard
Established Member
Italy Spain........France , that's sure a lot of printing. German bonds including inflation are yielding negative I believe. They could use their bond strength to buy the rest of Europe and make a nice percentage............better than a big hike in the (new) German currency killing the golden goose.
Order of Kilopi
And how long do you think Germany's yields would stay as low as they are if they did that, barring printing?
Established Member
Yahoo Finance has a nice article discussing the GAO's annual report:
Yes, It’s A New Year — And The United States Is Still Broke
It is written in terms that even an economic dummy such as I can understand, and includes graphs that would make Publius envious. I find the chart showing the projection of total spending vs interest spending to be particularly unsettling, but having read Paul Krugman's editorial, I'm not worried
The authors of the article really hammer at Medicare and Social Security spending, but I think they downplay the contribution of defense spending too much. It isn't as big as the others, but is still pretty hefty.
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