• Tim Knight from...
    10/21/2014 - 18:16
    Want to live near the 0.1% and their problems? May I present to you 258 Middlefield Road, Palo Alto, California, which is located within walking distance from my house and is a mere $1,800,000 (well...

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Alice Schroeder's Scathing Take On Lubri-Gate

Alice Schroeder, who once upon a time was the current "Becky Quicky" of Buffett's inner circle (although to her not so great loss not allowed in the inner sanctum of the NetJets mile high club) until she turned rogue on the billionaire and wrote something not quite so flattering about the Octogenarian of Omaha, whose bubble of unparalleled hypocrisy has just popped, has now burned every last bridge to the annual borg collective meeting at Borsheims, writing the most scathing narrative of the revalations from the last 24 hours. Oh well, we can only advise Buffett and his sidekick Munger to suck it up, now that the dirty laundry of America's dream wealth creator is exposed for all to see.



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Minneapolis Fed's Kocherlakota: "Fed Funds Rate May Need To Rise 75 bps By End Of 2011"

Minneapolis Fed's Kocherlakota, who is not scheduled to speak today, and who in the past has exhibited both hawkish and dovish tendencies is on the wire, saying the the Fed Funds rate may need to rise 75 bps by late 2011. He is also quoted as saying that QE2 boosted inflation expectations more than he anticipated (oh look, another confirmation of Fed ineptitude but only in retrospect), and that higher short-term rates certainly possible in late 2011. In other words, the hawks in the Fed are once again getting very vocal... Just like in March of 2010, and before the market tanked, opening the door for QE2, and when all the hawks kept their mouths shut.



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Guest Post: Extend And Pretend Is Wall Street's Friend

A systematic plan to create the illusion of stability and provide no-risk profits to the mega-Wall Street banks was implemented in early 2009 and continues today. The plan was developed by Ben Bernanke, Hank Paulson, Tim Geithner and the CEOs of the criminal Wall Street banking syndicate. The plan has been enabled by the FASB, SEC, IRS, FDIC and corrupt politicians in Washington D.C. This master plan has funneled hundreds of billions from taxpayers to the banks that created the greatest financial collapse in world history. The authorities had a choice. This country has bankruptcy laws. The criminally negligent Wall Street banks could have been liquidated in an orderly bankruptcy. Their good assets could have been sold off to banks that did not take their extreme greed based risks. Bond holders and stockholders would have been wiped out. Today, we would have a balanced banking system, with no Too Big To Fail institutions. Instead, the years of placing their cronies within governmental agencies and buying off politicians paid big dividends for Wall Street. Their return on investment has been fantastic.



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Why Is The Fed Redacting Bank Of Canada's Presence In FX Swap Lines, And Hiding The Terms Of Its Currency Transactions?

While many will focus on the borrowings by various insolvent banks from the Discount Window (yes, we know Bank of America/Merrill Lynch was broke and went to town with taxpayer money after Lehman blew up, and it also was the bank most impacted by the quant blow up in August 2007 when it borrowed $500 million from the Fed on 3 occasions), a possibly far more important question is why does the Fed persist in its secrecy even when supposedly forced to disclose unredacted data. While total discount window borrowings peaked at just over $110 billion, this is nothing compared to FX swap lines between the Fed and other banks, which as we said before was the means by which the Fed bailed out the world (even as Belgian Dexia and German Defma were the biggest borrowers from the Discount Window in those days in early November) amounted to $529.4 billion at the peak. So we decided to look at just what the terms were on these various borrowings and to our surprise were met with a whole lot of "NR", aka redacted data. The data on par lent out, par received, net change, limit and undrawn available, which is critical to determine whether the Fed actually lost money on its FX swap transactions is not available. And what is even more stunning is that one of the banks in the list, which we believe can only be the Bank Of Canada is purposefully and diligently redacted out of the 977 pages in the document highlighting the currency swap data. We have a simple question: why? And why pretend that the Fed is following court transparency orders if it continues to censor such critical information on how it actually impacts markets through its operations.



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Crude Closes At Highest Since Summer Of 2008, As Energy Prices Post QE2 Rising Faster Than In 2007-2008

Another "War On, War Off" day results in huge pain for all those who had expected oil to finally trend lower. Instead, the schizophrenic market decided to finally read the headlines from the past 3 days confirming that K-Daf is winning the war against Libyan rebels, even without an airforce, and despite the US' not so secret anymore CIA involvement, which among other things is likely funding and arming Al Qaeda. The end result was crude surging by nearly $3 intraday to the highest closing since August 2008, and Brent almost at $120 again while at the same time guaranteeing nosebleed(ing) inflation in Europe now that gasoline is on its way to $10/gallon. Within a day we will see just how serious OPEC was about that $120/barrel limit before it increases output, especially since it is now known that most of that excess capacity is a myth. What is far scarier, is that the annualized growth rate in Brent is higher since the Jackson Hole speech (at 127%) compared to the rate of rise entering into the Great Depression (104.25%) when the world had to blow up to bring energy prices lower. In other words, the Fed is once again back in the box where it needs to create a massive market crash to put energy prices back in their "deflationary" place.



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Mike Krieger Is On the Road...Again

The backdrop is pretty simple but is too terrifying for the brainwashed amongst us to admit. The old order, of corporatist/fascism is on its last legs and it clutching onto its power desperately. This includes the Central Banking system itself and by extension pretty much all governments around the world. When rats are cornered they attack and that is what is happening now. In their attempts to save a dead system they will do everything they need to try to survive. The well being of the citizenry is largely irrelevant. Keeping them quiet and subservient is much more important. Well, the problem here is that in order to do this various countries need to achieve conflicting goals. In the West, the governments are merely attempting to keep standards of living flat or masking the deterioration (inflation) and in the emerging economies they must continue to raise living standards rapidly. Both of these things cannot happen in a centrally controlled global economy where money is being spewed from spigots and no one is investing. Let’s get real, everyone I know with half a brain and a lot of money is hedging themselves. Whether this means precious metals, a second passport, growing their own food, buying land overseas or all of the above, one thing they are not doing is investing in this economy. So instead of trying to deal with the root of the problem (monopoly money, rampant corruption in D..C and no rule of law) they just print money. If the root problems were dealt with, the TBTF banks shut down and executives jailed, the Federal Reserve shutdown gradually and replaced with hard money I promise you after a very challenging recession the smartest Americans would put their money to work and this economy would boom. Of course this won’t happen because the rats are in charge so an uncontrollable collapse is more likely the outcome. They would rather bring us all down into the depth of Hades rather than lose their grip on power. - Mike Krieger



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Presenting The Complete Fed Discount Window Data Dump

While Zero Hedge ploughs through 25,000 or so pages of just declassified information focusing on the Discount Window, but containing previously undisclosed information on the entire alphabet soup of systemic rescue facilities, and prepare to present our findings shortly, we would like to facilitate the crowdsourcing effort in perusing the data which the Fed has made prohibitively difficult to access (only distributed on physical CD), by uploading the entire data dump at the following link.

Our very preliminary question is whether the Fed really expects the US public to believe it does not keep track of the collateral it lends Discount Window money against, and if that rhetoric question is false, then why is collateral data not disclosed?



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Ireland Finance Minister Says Sovereign Debt Sustainable...If Economy Grows

And the award for the most prosaic and "Field Marshall Obvious" statement of the day goes to Irish finance minister Michael Noonan, who just told the Dail that Irish sovereign debt is sustainable if the economy grows. We have just one question: how does the brand new minister, who therefore gets the benefit of the doubt for a few more hours, justify that statement, with the attached chart?



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It's Not Just Us...

...who have reached a level of complete disgust with equity markets in a period of unprecedented central planning. Here is Peter Tchir of TF Market Adivsors asking some very critical questions, which would probably be best directed to the Great Chairsatan.



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Market Response To Irish Stress Test

The market took one look at the stress test results... sniffed around the latest bail out plans (after taking 15 minutes to download the stress test pdf from a server capable of handling at most 5 simultaneous requests)... and slammed the 2 Year to the lows of the day. Good news though, it is not at 10% yet. Give it 12 hours.



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Wal-Mart US CEO To America: "Prepare For Serious Inflation"

To those who think that buying food in the corner deli is becoming a luxury, we have five words: you ain't seen nuthin' yet. U.S. consumers face "serious" inflation in the months ahead for
clothing, food and other products, the head of Wal-Mart's U.S.
operations warned Wednesday talking to USA Today. And if Wal-Mart which is at the very bottom of commoditized consumer retail, and at the very peak of avoiding reexporting of US inflation by way of China is concerned, it may be time to panic, or at least cancel those plane tickets to Zimbabwe, which is soon coming to us.



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Irish Stress Test Results, And Full Irish Financial Measures Programme Report

And so the Irish bank sector is about to nationalized.

  • IRISH REGULATOR SAYS FOUR BANKS NEED EU24 BLN MORE CAPITAL
  • BANK OF IRELAND NEEDS TO RAISE 5.2B EUROS OF NEW CAPITAL
  • IRISH LIFE NEEDS TO RAISE 4 BILLION EUROS, CENTRAL BANK SAYS
  • EBS NEEDS TO RAISE EU1.5   BLN IN CAPITAL, REGULATOR SAYS
  • ALLIED IRISH BANKS NEEDS TO RAISE EU13.3 BLN IN CAPITAL


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Watch The Irish Stress Test Release Live Here

In 15 minutes it is possible that we will get the first guest of wind to topple the European house of insolvent banking cards, just in time for the pro forma cruelest month to upshift into the real one. Readers can watch the Live press conference: "Publication of Capital and Liquidity Results by the Central Bank of Ireland" at the link below.



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Portugal Yield Curve, Meet Kansas

And so, Portugal flatlines, and in fact is inverted in the outer years. The bond market is waving goodbye to Portuguese paper which is now effectively trading on the Pink Sheets.



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Charting Historical Discount Window Borrowings

While we await the thousands of pages of discount window data to hit the public docket, below we present to our readers the historical borrowings on the Fed's Discount Window, which consists of the Primary Credit, Secondary Credit and Seasonal Facilities. Borrowings across all three peaked at $110,753 million according to the Fed. There is of course, no indication of what type of collateral is used against these borrowings although as Zero Hedge first disclosed over a year ago, many of the stocks pledged by failing companies were those of bankrupt companies. There will hardly be much if anything revolutionary in this incremental disclosure, but it will confirm just how many times Goldman and JPM may have accessed the discount window following repeated claims they did not need to do so. The reason banks no longer use the discount window as can be seen on the chart below, is that with $1.4 trillion in excess reserves there are no liquidity constraints any more as all the capital comes in the form of electronic money allocated as reserves by the banks, which money is fungible and thus banks no longer rely on actual lending by the Fed. Incidentally, combined borrowings across all three Discount Window facilities in the week ended March 23 was $13 million: the lowest since 2004.



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