Archive - Apr 2, 2011

Leo Kolivakis's picture

Canada's Demographic Time Bomb?





Another warning about Canada's "demographic time bomb". But I'm more concerned about bombs waiting to explode in the near-term...

 

Tyler Durden's picture

Meet The 171 Banks For Which The Margin Of Failure Is One Thousand Dollars





At this point the majority of the population is transfixed by the biggest borrowers from the discount window. Yes, we know by now that the bulk of these were foreign banks, primarily Dexia and Depfa, but that is simply because only Bank Holding Companies, or depository institutions (and yes, last we checked Goldman deposit branches are still sorely missing), are allowed discount window access. Keep in mind that most banks were Investment Banks and not under the BHC umbrella until after the Lehman collapse. Which is why most banks only had access to the PDCF, which is how the Fed eliminated the loophole for emergency liquidity trickling down to everyone. The majority of US investment banks therefore accessed Fed rescue funding via the PDCF, of which JPMorgan and BofNY Mellon were intermediaries due to their position as the only two tri-party repo clearers and keymasters of the shadow banking mechanism. A quick glance at the PDCF confirms that all banks, pre their conversion to Bank Holdings Companies in the week following Lehman's failure, borrowed from the Fed, if not necessarily from the Discount Window (and yes, as Bob Ivry confirmed, Goldman did borrow directly from the Discount Window on at least five occasions post its "depository status" conversion despite Gary Cohn's perjury to the contrary even as Goldman repeatedly dipped in the PDCF both before and after Lehman's failure, even setting the precedent of first pledging defaulted bonds as collateral before any other solvent bank). Yet what we are more concerned by is not the mega borrowings: after all, it makes sense that if you need tens of billions you will go to the Fed. We are far more concerned by the banks for whom the marginal amount of cash was smallest. Below we present the 171 banks that had to access the Discount Window for the paltry sum of $1,000.00. That's right - these are the banks for whom the margin of failure is as low as one thousand dollars. Any readers who have cash deposited with these banks (many of whom have not yet been visited by the FDIC's Failure Friday phenomenon), are urged to immediately remove all funds and run, Forrest, run.

 

Tyler Durden's picture

Watch "Inside Job" - The Wall Street Horror Movie, For Free





Courtesy of Open Culture, Inside Job, the scariest Wall Street "horror movie" ever produced can now be seen for free. Charles Ferguson's masterpiece is a must watch for anyone and everyone who has even a passing interest in the intersection of finance, economics, politics, corruption, crime, complacency and above all, the human inability to predict the future when the only driving force is pure greed. And as Open Culture notes, "Inside Job can be purchased on DVD at Amazon. We all love free, but let’s remember that good projects cost real money to develop, and they could use real financial support. So please consider buying a copy." We can only hope that more commentators ilke Ferguson will step up and present the criminal events leading to the greatest economic and market crash since the Great Depression.

 

Tyler Durden's picture

Charlie Rose Interviews Inside Job's Charles Ferguson





Charles Ferguson, who deservedly won an Oscar for his must watch movie of 2010, Inside Job, which exposed such self-caricatures as Larry Summers, Napoleon Dynamite Sr, and Glenn Hubbard for the hollow shams they are, and who made waves by making the only logical statement at this year's Oscar celebration by asking why nobody on Wall Street had gone to prison, appeared on Charlie Rose in yet another must watch interview. Ferguson is once again given a chance to clarify his position on why nobody will likely ever go to prison for what amounts to the greatest generational and class heist ever witnessed: "Do you expect that there will be prosecutions for criminal wrongdoing coming out of what we now know?" The answer: "Whether there will be or not, is a function of political pressure because it is unfortunately disastrously, tragically clear that the Obama administration has no interest in doing anything about this." The reason, according to Ferguson for Obama's (lack of) action is: "there is a menu of answers: he is personally very conflict averse, to cold-blooded political calculation, to lack of experience and therefore insecurity in large very scale economic and financial matters, and therefore being a prisoner of his advisors. Perhaps some combination of all of those things..." In other words true lack of change that banker pocket change can believe in. As for what would take to fix the broken system we find ourselves in: "(i) change the role of money in elections, (ii) to pay regulators well, and (iii) have law enforcement that is necessary to enforce the laws we have." Alas the Inside Job director does not see any of these happening any time soon. Neither does anybody else.

 

4closureFraud's picture

60 Minutes | Foreclosure Fraud Featured this Sunday on 60 Minutes





Lender Processing Services (LPS) / DOCX Robosigner "Forged 4000 bogus mortgage documents a day for major US Banks" Scott Pelley reports, Sunday, April 3, 7 p.m. ET/PT.

 

Tyler Durden's picture

Assessing The Fukushima Radiation Danger "Near And Far"





The NYT has compiled a useful visual summary of the current assessment of the Fukushima radiation, distributed by either air, soil, water and food, compiled through the work of the International Atomic Energy Agency and others. The observable trade off is that while the impact of inland radiation has so far been muted courtesy of favorable wind direction and modest rainfall, the actual concentration of radioactivity in the sea and groundwater is rising at an exponential pace. How long before conventional wisdom realizes that radiation tens of thousands of times above normal contaminating the sea is very bad, while one day of northeastern winds will set off every seismic counter in Tokyo?

 

Tyler Durden's picture

Excel Breakdown Of All Discount Window Users Between March 2008 - 2009





Tired of poring through thousands of PDF files from the Fed's Bloomberg FOIA release? Curious why Ron Paul said that he "was surprised and deeply disturbed ... to learn the
staggering amount of money that went to foreign banks" and is planning to hold a hearing
over emergency loans to the branches of non-U.S.
banks? Then here is the excel file for you: the following publicly shared google docs spreadsheet contains the complete Discount Window loan origination data from March 14, 2008 through March 16, 2009. We offer it so that anyone who wishes to perform their own analysis on the primary data can do so (and needless to say banks noted as FORI in the markstat entity type are foreign borrowers). 

Discount Window spreadsheet link.

 

williambanzai7's picture

TaKaSHi UeSuGi: AN ANGRY JaPaNeSe JouRNaLiST





Essential reading on the nature of the Japanese government/media juggernaut and what Tokyo netizens are thinking...

 

Tyler Durden's picture

Japanese Mayor, Disgusted With The Government's Crisis Response, Appeals For Help To The Entire World





The mayor of Minami Soma city, located 25 km away from the Fukushima plant, had decided to bypass the traditional channels in requesting assistance out of disgust and frustration with the government's handling of the disaster, and instead is appealing to the entire world via this soon to be viral video clip which was recorded over a week ago but is only now making the rounds. In the clip, mayor Katsunobu Sakurai says: "We are left to ourselves... we risk dying of hunger." Minami Soma, once a city of over 70,000 and which may now be down to as little 20,000, is asking for volunteers to do what the Japanese government refuses to do: namely to help those most in need of if not help, then at least potentially life-saving information. The mayor expresses his disappointment at the lack of support from the central government for the city’s remaining residents, and accuses the government of not providing sufficient information to help in the decision making process. Making things worse is that the remaining citizens, many of whom who are trying to evacuate, are unable to do so as there is no gas or means for transportation. Unfortunately, by the time the Japanese crisis is done, cities like Minami Soma, far beyond the 20 km evacuation zone, will be nothing more than ghost towns. And while we have already seen a few minor attempts at popular backlash against TEPCO and the government, the general population may soon be reaching a tipping point of discontent. Will Fukushima be the straw that breaks the traditionally peaceful Japanese population's back into an expression of violent disagreement with the government's handling of the consequences of the March 11 earthquake, which for now can only be classified as deplorable?

 

George Washington's picture

Update on Japan's Nuclear Crisis





The situation at the Fukushima Daiichi nuclear complex is getting worse in many ways, but better in some ways. Here's a quick roundup ...

 

Tyler Durden's picture

Things That Make You Go Hmmm - What The Red Pill Really Tells Us





"On March 14th Bear Stearns collapsed and the first real domino of the financial crisis (at lest as far as public recognition of the situation was concerned) had toppled. However, it wasn’t until September, as Lehman Brothers tottered on the brink of insolvency, that a group of highly influential bankers and politicians decided to take the red pill. The failure of Lehman Brothers was the catalyst that plunged the world deep into The Matrix - an alternate reality in which, everywhere you looked, things were happening that a mere 24 hours earlier, would have seemed unthinkable. We all know about the TARP, we remember wild swings in markets, plummeting oil and commodity prices, frantic deleveraging and nervous Central Bankers and politicians telling us that everything was going to be OK. But as the days and months have ticked by, the reality inside our own Matrix has become more and more skewed. Markets recovered, an eerie calm was gradually restored
and slowly things began to return to a semblance of normal. But what is normal in this new paradigm? Is it normal for the Fed to be buying 70% of all Treasuries? Well it certainly wasn’t until we took the red pill and entered The Matrix...It surely must be clear to anybody that, regardless of the fact that the unemployment situation has stopped deteriorating quite so rapidly and has even begun to show signs of improvement in places (‘green shoots’ anyone?), regardless of the fact that corporate results have actually been, for the most part, quite good and the S&P is trading on decent multiples and regardless of the fact that ‘core’ inflation apparently isn’t a problem - the real world inside The Matrix, the one many vested interests would rather we NOT focus on, is an altogether different story." Grant Williams

 

Tyler Durden's picture

Things That Make You Go Hmmm - What The Red Pill Tells Us





"On March 14th Bear Stearns collapsed and the first real domino of the financial crisis (at lest as far as public recognition of the situation was concerned) had toppled. However, it wasn’t until September, as Lehman Brothers tottered on the brink of insolvency, that a group of highly influential bankers and politicians decided to take the red pill. The failure of Lehman Brothers was the catalyst that plunged the world deep into The Matrix - an alternate reality in which, everywhere you looked, things were happening that a mere 24 hours earlier, would have seemed unthinkable. We all know about the TARP, we remember wild swings in markets, plummeting oil and commodity prices, frantic deleveraging and nervous Central Bankers and politicians telling us that everything was going to be OK. But as the days and months have ticked by, the reality inside our own Matrix has become more and more skewed. Markets recovered, an eerie calm was gradually restored
and slowly things began to return to a semblance of normal. But what is normal in this new paradigm? Is it normal for the Fed to be buying 70% of all Treasuries? Well it certainly wasn’t until we took the red pill and entered The Matrix...It surely must be clear to anybody that, regardless of the fact that the unemployment situation has stopped deteriorating quite so rapidly and has even begun to show signs of improvement in places (‘green shoots’ anyone?), regardless of the fact that corporate results have actually been, for the most part, quite good and the S&P is trading on decent multiples and regardless of the fact that ‘core’ inflation apparently isn’t a problem - the real world inside The Matrix, the one many vested interests would rather we NOT focus on, is an altogether different story." Grant Williams

 

Tyler Durden's picture

Attempt To Pour Concrete On Fukushima Pit Crack Generating 1 Sievert/Hour Fails; New Unmanned Drone Photos Of Reactors





After prior reports that radiation in and around Fukushima had breached the dreaded barrier of 1 sievert/hour were attributed to some PR apparatchik not knowing how to carry the decimal comma, we once again get confirmation that previous attempts to refute what some saw merely as scaremongering, were in fact more lies. According to Reuters, the soon to be nationalized TEPCO said it had found a crack in the pit at its No.2 reactor in Fukushima, generating readings 1,000 millisieverts (1 sievert) of radiation per hour in the air inside the pit. "With radiation levels rising in the seawater near the plant, we have been trying to confirm the reason why, and in that context, this could be one source," said Hidehiko Nishiyama, deputy head of the Nuclear and Industrial Safety Agency (NISA), said on Saturday. He cautioned, however: "We can't really say for certain until we've studied the results." Since at this point nobody believes anything coming out of Japan and TEPCO, most are just expecting for the concrete to come: "TEPCO has begun pouring concrete into the pit to stop the leak, he said." Alas, as always happens when horrible plans go awry, this latest attempt to fix the problem with the nuclear (pardon the pan) "solution" is failing. "Public broadcaster NHK said late on Saturday that water was preventing the concrete from hardening and the pit was still leaking." In other words, recent horrendously planned attempts to cool the reactor by pumping water on it may well scuttle the Plan Z option of entombing the reactor. And if that doesn't work, then Japan is straight out of plans.

 

Tyler Durden's picture

A Visual Presentation Of What Happens To The Market During Rising Interest Rate Cycles





While it is no surprise that there is nothing in this world that can derail the optimism of Goldman's David Kostin (GS S&P 2011 target 1,500 until Jan Hatzius and his double Bill Dudley say otherwise), in his latest Weekly Kickstart he does provide a useful visual analysis of what happens in a period of rising interest rate cycles. Of course, this is only to create the illusion that rates are indeed set to rise: as we indicated said illusion was roughly two times stronger this time last year when the market once again didn't remember what a downtick looked like, and yet it all turned out to be a function of QE1, which upon ending on March 31 caused a correction, and QE2 a few months later. We wonder how many professional investors actually are naive enough to equate constant pumping of billions of dollars into the market by the Fed with economic improvement. But while we will get our answer in the next several weeks, here are the key signs to look for in the latter part of the interest rate cycle.

 
Do NOT follow this link or you will be banned from the site!