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Pimco, Blackrock And New York Fed Said To Seek Bank Of America Mortgage Putbacks
Putbacks, bitches! This headline that has just flashed, can not be right. Otherwise it would mean the New York Fed (and Bill Gross) is preparing to sink Bank of America with hundreds of billions of par MBS putbacks. It would however explain why PIMCO has been gobbling up MBS on margin in the past month as we highlighted. We will bring you more as we see it, because this could be a groundbreaking development.
Update: Blackrock joins too! The "soured mortgages" in question amount to $47 billion (to start). We are now just waiting for BofA to next demand TARP 2 and the circle jerk will be complete.
Update 2: Full Bloomberg story attached.
Reminder: Here is JPM's presentation on what the total putback risk is for the Big Banks. As the lawsuit seeks to putback $47 billion one wonders just how accurate JPM's estimate of a $55 billion max pain truly is...
Reminder 2: As our whistleblower pointed out earlier today, the issue of misrepresentation of all mortgage related items (not just titles) is precisely what would destroy the mortgage originators and servicers. Today, Countrywide, its former orange CEO, and Bank of America are the first to realize just how correct he or she was.
Pacific Investment Management Co.,
BlackRock Inc. and the Federal Reserve Bank of New York are
seeking to force Bank of America Corp. to repurchase soured
mortgages packaged into $47 billion of bonds by its Countrywide
Financial Corp. unit, people familiar with the matter said.The bondholders wrote a letter to Bank of America and Bank
of New York Mellon Corp., the debt’s trustee, citing alleged
failures by Countrywide to service the loans properly, their
lawyer said yesterday in a statement that didn’t name the firms.Investors are stepping up efforts to recoup losses on
mortgage bonds, which plummeted in value amid the worst slump in
home prices since the 1930s. Last month, BNY Mellon declined to
investigate mortgage files in response to a demand from the
bondholder group, which has since expanded. Countrywide’s
servicing failures, including insufficient record keeping, may
open the door for investors to seek repurchases by bypassing the
trustee, said Kathy Patrick, their lawyer at Gibbs & Bruns LLP.“We now are in a position where we have to start a clock
ticking,” Patrick, who is based in Houston, said today in a
telephone interview.MetLife Inc., the biggest U.S. life insurer, is part of the
group represented by Gibbs & Bruns, said the people, who
declined to be identified because the discussions aren’t public.
TCW Group Inc., the manager of $110 billion in assets, expects
to join BlackRock, the world’s largest money manager, and Pimco,
which runs the biggest bond fund, in the group, the people said.Countrywide also hasn’t met its contractual obligations as
a servicer because it hasn’t asked for repurchases itself and is
taking too long with foreclosures, either because of document or
process mistakes or because it doesn’t have enough staff to
evaluate borrowers for loan modifications, Patrick said. If the
issues aren’t fixed within 60 days, BNY Mellon should declare
Countrywide in default of its contracts, she said.Trustee Duties
“The letter states a demand directed to Countrywide to
cure the defaults,” said Kevin Heine, a spokesman for BNY
Mellon. “It does not ask BNY Mellon to take any action. BNY
Mellon will continue to perform its duties as trustee.”Charlotte, North Carolina-based Bank of America will
“defend our shareholders” by disputing any unjustified demands
it buy back defective mortgages, Chief Executive Officer Brian T. Moynihan said today.Most claims “don’t have the defects that people allege,”
Moynihan said on Bloomberg Television, referring to so-called
putbacks, in which guarantors or investors in mortgage-backed
securities ask to return bad loans. “We end up restoring them,
and they go back in the pools.”Mark Porterfield, a spokesman for Newport Beach,
California-based Pimco, Brian Beades, a spokesman for New York-
based BlackRock, and Peter Viles, a spokesman for Los Angeles-
based TCW, declined to comment.John Calagna, a spokesman for New York-based MetLife,
didn’t immediately return messages seeking comments. Jeffrey V.
Smith, a spokesman for the New York Fed, declined immediate
comment.“We continue to review and assess the letter, and have a
number of question about its content, including whether these
investors have standing to bring these claims,” Bank of America
Chief Financial Officer Charles H. Noski said today on a
conference call with analysts. “We continue to believe the
servicer is in compliance with the servicing obligations.”
»
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Truth is stranger than fiction....
My bit of truth stranger than fiction is posted here on the first page. The same article is over on the contributors page:
http://www.zerohedge.com/forum/asymmetrical-warfare-mill-wars-based-ucc-practice
So, if Gross was buying MBS in the past few weeks/months knowing he had the support of the FED for a putback action against BofA, isn't that insider information? If not outright illegal, it seems highly unethical.
All the above...lol..but...in this case against BofA....I can somehow overlook it.
Morality does not apply to investment bankers. Morality and laws are for serfs like you...so sit down and get ready to pick up the tab...and your gonna like it, too!
I am sure you are correct. All taxpayers are screwed, as are you if you pay taxes. BTW, I'm not exactly a serf.
Terf?
A surf!
surfer?
No surfing. Ski instead. Own my own business. One of the few remaining manufacturers in California.
you probably can't tell me, but what brand?
A Zerf?
And then what happened?
Rescission Decission !
PILE ON THE RABBIT, PILE ON THE RABBIT...LOL
Otherwise it would mean the New York Fed (and Bill Gross) is preparing to sink Bank of America with hundreds of billions of par MBS putbacks
And John Paulson and others with CMBS putbacks when they arrive
Purpose served, now the requirements of predation exert themselves as BAC looks to be today's special at Chez Shalom. This must be putting ole Axil Weber into a state of absolute apoplexy as the realization that if the fed is willing to sacrifice the largest depositor institution in the US what this means to his hopes and dreams.
Just think.. Chris Whalen, a bright guy recently observed that Countrywide was one of the better institutions in all this... Just saying.
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
Countrywide was one of the most aggressive and efficient lenders in the industry, and also one of the best in terms of underwriting and documentation. The people and operations at Countrywide were once the envy of the industry.
Another timely observation from the same piece, this time from Joseph Mason .. Love confirmation bias, however limited
Well it will hit bank earnings. The big banks will get investor lawsuits and repurchase claims if not actual put backs. The losses will continue to concentrate around these banks because, as we discussed years ago, we really were not selling risk. The banks do have skin in the game in the form of retained risk on securitizations. The risk transfer was never complete because the sale was never complete and the losses keep trickling back to the banks. We could see some sort of TARP Part II for the mortgage sector with blanket coverage of risk by the Treasury. All of the future losses on housing would go to the Treasury.
Don't worry. We Have A BUYER OF LAST RESORT SO LET'S PARTY !
Crude oil getting flash crashed.
Funny how gold and oil are the first items sold in a panic when a financial crisis is about to hit.
and solars too...
ReFlation off, DeFlation back on for awhile....the mini-bubbles boom-bust within the major bubble cycle continues.
Hi RobotTrader,
Do you have any references that support the statement "gold and oil are the first items sold in a panic when a financial crisis is about to hit". Historical references (by that I mean beyond the past three years)?
Gold and oil are being slammed because once again because people are cashing out and moving into USD. So essentially the price of gold and oil has gone down because the USD might have a midgen more buying power - today. It is a blip.
Btw, I do like your charts. If I was trading everyday, I definitely would pay attention to them and to what you were saying. Not sure why you get junked so much.
Finally, have you ever thought about posting some salacious pictures of adorable men for the women who read Zerohedge (yeah I'm guessing we are a minority).
Looks like ol mr cash carry @ pimco picked up the phone to his old employer...wonder why the NY fed would want to put back MBSs? Oh, yea, I forgot. The Fed owns $1.25T of the stuff (worth only $1T or so at market value) and sports only $57 billion in equity. I think technically this is known as a "pickle".
Anyone have a guess about what happens to CDS contracts on these put-back issues?
can you say black hole?
My guess is that AIG will pay them out at 100 cents on the dollar.
Even the ones they didn't issue!
This really makes a lot of cents.
No way big 0, tiny tim, uncle ben could float Q.E-2, tarp 2.6 without blood in the streets.
Now a big bank goes under,mortgage gate 2 weeks of bad news, ....
DOW under 10,000
QE, Tarp launchez ...
Ground Control to Uncle Ben
Ground Control to Uncle Ben
Take your hopium pills and put your helmet on
Ground Control to Uncle Ben
Commencing countdown, engines on
Check ignition and may Timmy's love be with you
Ten, Nine, Eight, Seven, Six, Five,
Four, Three, Two, One, Liftoff ......
What about Moody's and Standard and Poors? Don't they have a part in this mess? They sure as hell didn't do anything to prevent this mess.
Could BoA be set up like AIG was? Zombie on lifesupport sneaking money everywhere, looking like it is going to pay off one when it really flows to a TBTF?
With these putbacks, couldn't it be a way to fund backdoor bailouts?
Of course. BAC has been and will continue to be a tool and nothing more
Load BAC up with TARP money. Find irregulatities. Everyone sues the crap out of them. Find another conduit, rinse and repeat.
Sweet racket they've got going. Now if they could just work in drug running and human trafficking, well they'd have a business model right there.
Yes but this should call into question every bank who sold this crap, no ???
We should see this type of thing coming from all over the globe, everyone that bought the rmbs/cmbs ...
While the GSE co-dependent mortgage insurers get put front and center. Should be interesting to watch the monoline story repeat
They have. Where do you think the TBTF's get their greatest margins .. and headaches when the bag man arrives and the churn isn't churning like it is supposed to? Another primary driver Cougar, most especially in the C/R MBS and related spaces. Come on! Did you really think that little demonstration project in Mexico was just for grins & giggles?
Ouch, someone hasn't been getting enough flouride in their water. ;-p
Cannibalism bitchez! (sorry, couldn't resist!)
this news is planned. what do those 'dirty rat bastards' have up their sleeve. will they sacrifice BofA to save JPM and WFC??? what is it they are up to...please...anyone??/HELP ....i need some objective input here
Other suits have been filed...the 30 day response time has not yet elapsed...just wait. The Titanic just hit the iceberg. The huge gash that sank it has not yet happened. People aren't even moving for the lifeboats yet. Like I said, e-ticket ride!!! ;-p
To hell with the Fed. We might finally find out what AIG is hiding under its skirts. Great balls of fire!
Global shit storm bitches..........
Yes.
This will put the entire industry on notice BoA is not the only problem child.
Dork, do you know if the Irish banks did these type of deals as well where there would be no clear chain of title on properties due to securitization? Are they vulnerable to putbacks?
I don't know for sure but I doubt it as we seemed to have a plain vanilla type of housing crash with a direct link between the bank and the borrower.
But nothing would surprise me now given the global byzantine nature of the banking industry.
I am still trying to comprehend the scale of this new / old crisis - if its something like 62 million US mortgages it will not matter what happens in Ireland.
Others are joining the party ...
OMG. Fucking brilliant!
Goldman Sachs will get JPM, BAC, and C for 2 bucks a share!
This was the plan all along
Super Bingo
big question here??? how the heck do we have QE lite when all those MBS on the book of the Fed are empty boxes....who is/are doing refinances now with titles of homes in complete limbo?? - and who the heck calculates how much each POMO operation will be based on those refinances???? does this not change QE lite amounts???
am i eating crazy pills here??? someone....anyone??
QE Lite will be transformed into a plan to "Keep Working Americans In Their Homes." It will be massive.
C'mon now, you know the JFK School of Government types would never use an acronym like KWAITH.
Because if they would, then they would just go for the obvious "Further Unbalancing Bankrupt American Residents."
I'm actually afraid that you may be right. Any backdoor bailout will be framed in helping out "average americans" - which will be yeah right.
Pomo was to inflate stocks so the boyz could cash out. that was all it was.
+1
BAC down (4.25%) with 30 minutes to go. Bet they don't hit any circuit breakers though.
They won't trade tmrw at the bell, giving the POMO/liquidity makers a chance to spin up. Then the rally, will end "up" on the week.
$20B will have changed hands in 72 hours. Not bad. All in good fun.
Wow banks about to fall, again, repeat of 2008. I hope they let them fail finally. This experiment sucked.
What are the implications of fraudclosure on municipal tax receipts - i.e. if many mortgages are deemed invalid due to broken chain of title, who really owns the homes. If true ownership is in question, property taxes will not be paid. And given municipalities rely heavily on property taxes for funding, could the current resurgence of problems in the mortgage market be the black swan that causes the muni market to implode?
The smart money will keep the property taxes current and when statute allows, they will file their action to 'quiet title'.
But that's just me.
absolutely.
Banks are getting into tax and delinquent tax servicing the same way they got into mortgage servicing; an interesting data point I think.
Maybe it is all pre-arranged. Then the FED will buy back the putbacks with QE2 and bailout BofA. Whatever the plan, it will all end up back on the taxpayers. I doubt BofA will go down for this.
Will NFL Referees Bailout US Banks From Foreclosuregate Penalty?
The "in the event we were fraudulent" backup arguments are already starting:
The banks are hoping NFL referees will step in and say "There is no flag on the play as we have ruled the ball was uncatchable"
Ah JPM, if only you had sold the crap mortgages to Jerry Jones, this argument might have worked for you.
Regards,
George .... The Greek ..... From Canada
Time to put the new FinRegs to work. There is legality for a "Resolution Authority" that could break up the TBTFs. What goes around - comes around! Watch the rats bail! Soon to be a stream of private jets out of country - Georgetown, Grand Cayman here we come!
Break them up like hell, this Resolution Authority is in finreg precisely in order to consume /aggregate them all.
Interesting. PIMCO loads the revolver full of MBS bullets for a game of russian roulette and hands the gun to BAC.
BAC orginated something like $2.2T in mortgages between 2003-2007.
With respect to Put Backs, a salient issue will be statue of limitations, which i understand to be 6 years in New York from the time of securitization to put back loans that violate representations and warranties.
Well, doesn't every secondary market sale of any given MBS by a BofA sales person restart the clock? Unless each deal is done with a big boy letter, the ticket carries with it the initial reps and warranties, and the liability is to the broker.
Which means that the aforementioned group is actually seeking BAC (countrywide) as Servicer to put back the loans to BAC (countrywide) as Originator.
My understanding is that under contract law in NY the statue of limitations for put backs runs from the moment of securitization. Under various state securities laws, the statue of limitations is 1-4 years and runs for the moment the investor realizes there has been a legal violation. As for statue of limitations resets, have to look at each individual statue. But my understanding is under contract law there is NO restart.
And in the instance of this case, the future plaintiffs are seeking to putback the MBS to the servicer, (who would then have to putback the loan to the originator). Now since the servicer doesn't change regardless of how many times the particular MBS is resold, the issue of a restart on statue of limitations is rendered moot (in this case).
Good point lizzy, but they are also facing potential securities fraud charges, which is why they are suddenly eager to accept the put backs. Not current on New York law, but the statute of limitations wouldn't normally start until the fraud is discovered, more or less now.
The 2003 & 2004 vintages will not be the biggest losers.
for most
B of A...the sacrificial lamb...has finally been picked. Hopefully this will placate the masses and make the rest of the banksters and politico a bit more wealthy via future taxpayer sweat and suffering.
Probably only the ignorant masses. What's to prevent Bernanke from bailing out BofA with QE2?
Probably nothing. But I could see BoA being brought down, dismantled and the remains fed to the other banks. The weak in the herd not only is brought down, but cannibalized....banksters have no problem eating their own.
Futures all ready moving up. Tonight is a no brainer, futures will float higher.
The End Of Securitized Mortgage Debt
http://jsmineset.com/
rap can provide some very poignant commentary on our situation:
Q: You would rather have a Lexus or some justice, a dream or some substance?
A beamer, a necklace or freedom?
A: Justice & Freedom
death to the ponzi!
We won't go back for any amount of money, or anything else.
We are Miles Kendig
Does this mean we can all sell our PM's?.
Since we're safe n ALL?
Bank of America just filed a lawsuit against Rao Chalasani for stealing 21confidential files the day before he was to be fired.
The bank says Merrill Lynch VP Chalasani e-mailed the files to himself the night before the company was to announce it was firing 400 people.
Apparently Chalasani was told on the night of September 20 that he would be fired the next day, and that he was being considered for a job within another department, but he might not get the job.
The bank has record of his sending himself an email containing the 21 files at 9:32 p.m. He sent the email from his work account to a personal account.
From Bloomberg:
He stole profit-and-loss figures, current securities trading positions and company risk assessments, and documents titled: “Consolidated_Balance_Sheet.xls,” “RDM_Stress_Scenarios.pdf” and “Global_Credit_Summary_.xls.”
“It appears that defendant stole key documents from the company with the intent of causing harm to Bank of America’s business and reputation,” the bank said.
So he allegedly stole financial information about BAC.
If true was he preparing to blackmail the company? Or trade on insider knowledge? We're curious.
Read more: http://www.businessinsider.com/rao-chalasani-bank-of-america-fired-stole-info-2010-10#ixzz12q4asoxv
If true, what a dumb shit......ever heard of a Thumb Drive?.
You mean, the same thumb drives that will immediately set off alarms in the IT security departments of virtually any financial institution?
Emailing the files is actually safer, so long as they don't actually check what you've mailed... but the easiest solution is to just take pictures of the damn monitor.
Perhaps a bit literal-minded, but I just can't accept the word "steal" to describe this person's actions.
It's not as if BoA no longer has the information.
Looking forward to seeing the info soon enough, anyway. It'll be very satisfying if those documents provide evidence of criminal wrongdoing on the part of the company now suing the "thief."
Not his fault if the nature of the information would damage the reputation of the bank, that faul lays with the activities of the bank. Don't think they could make that case.
To harm the bank, depends on what they mean. Harm because the data reveals something improper? Revealing a crime cannot be sued in and of itself, I don't believe.
They can sue him for theft, insider trading maybe, and harm to the bank from legitimate data if it were used.
Pretty hard to prove 'intention' though. Normally that would involve planning, but this was on the spur of the moment.
A.P. Giannini would be rolling in his grave, if he knew the demise of his beloved and proud creation from Bank of Italy into Bankster of America. Ah he probably started the mafia in San Francisco with his roots growing up in Italy. he financed Hollywood too. R.I.P.
He was a farmer on the Peninsula who transferred the loot in his vegetable wagon and hid the cash in his fireplace during the 1906 SF EQ Fire so he could loan it out on a sidewalk handshake to those needing to rebuild. He not only got all the loans back, he was the only buyer of Golden Gate Bridge Bonds during the Great Depression, which bridge came in under budget and ahead of schedule. Fundamental values. His daughter pulled her trust account from BAC when they hit her with $10,000 minimum fees...
trying to read between your lines. was he a bad man?
hey, his grandson told me he buried the loot in his backyard. this daughter must be the only sibling alive, cause the son, george's dad, died when he was around 50 and then the mom soon after. tragic stories.
B of A Responds. Basically they are not responsible for the poor performing loans due to the changes in the economy – and that they will vigorously defend themselves.
SO – maybe the gloves will come off – and we may get to the bottom of all the bullshit that went down when Bernanke, Geithner and Paulson rammed Countrywide down their throat to begin with.
Maybe they were just playing nice, letting their Pres and CEO resign and not name names thinking they were being good little soldiers in the overall scheme of things. Now it appears – we may be entering round two – this could get interesting.
Obviously missing the point that it is about the bogus securitization, not the performance of the loans. They'd still have a case if every tranch was paid up.
Rammed CountryWide? Please. Nobody 'rams' anything into a bank that the bank didn't want there from day one.
And then there's this point of view. . .
http://www.nakedcapitalism.com/2010/10/pimco-ny-fed-pressuring-bofa-to-repurchase-dud-mortgages-empty-threats-edition.html
It appears that the letter is a standard procedure prior to a lawsuit(s)
Yes. It's called exercising their administrative remedy first, a typical requirement before suing.
Just like giving a mortgagor notice of foreclosure (administrative remedy) before actually initiating a foreclosure suit.
The market reaction "flies in the face" of this letter. It's a real problem and reeks of uncertainty along with the "F" word.
If I'm reading between the lines correctly, this is a precursor to the investors firing BoA as servicer, so the investors can hire a servicer willing to pursue push-backs against the seller, which is also BoA. I'm assuming the terms of this deal allow the investors to replace the servicer. If not, then it's a threat to litigate.
I rinsed. I washed. I.... WTF!!?
D'oh. You forgot "repeat"
Now you have to start all over.
wrong spot
Watching those hump monkeys on CNBS's "Flushed Money" pump BAC as a "buy". You can cut their fear with a knife.
it probably is a buy. If you expect BB and the POMO to ramp the tits off the market starting tmrw morning, and if you guess that BAC is going to see a lot of that action, then yeah you are forced to buy BAC up the wazoo. The rule is to front-run the Fed.
Just say'n.
those shit heads were saying buy LEH sep 14 2008
I feel good, I just transferred the rest of what I had in my BofA accounts to my local bank, it was handy to have a big bank while traveling but I'd rather do what I can to support my local bank.
sounds like a game of hot potato. no one wants to get stuck with the paper, and maybe the liability does rest with the broker, although in theory you can't hang a stock broker with every trade that goes bad? Putbacks may seem like an easy way to assign ownership of the notes, ergo BofA can resume foreclosing on these homes. That isn't the result either the Fed or Obama want to see, which makes me wonder why Gross is involved, I don't see him as a Fed vigilante. As long as this doesn't turn into a one size fits all solution.
Not sure where CITI stands on all this, but I have always felt they were being pilloried unfairly, and guys like Gasparino were over the top. They did have the lions share of the mortgage market for a while, funny how all that is working out. CITI being rescued, BofA being essentially screwed by Bernanke and Paulson during the financial crisis, a violation of shareholder rights being the lesser of the charges they ducked. CITI wins, BofA loses? is that it?
It won't be B of A that foots the bill for this. It will be US! TARP II guaranteed! It will be a miracle of out financial system survives this!
In the name of trying to identify various borderline psychos in the oligarchy a new project has been started, by the name of PsychoNews. http://bit.ly/aPAuzS
We are still in early stages but appreciate all reader contributions and suggestions on who to profile next. Bill Gross seems good for a nomination, as does Hank Paulson.
The problem starts being solved the moment we identify the source of our problems, the very individuals involved. The oligarchy can only be stopped if we first admit there IS an oligarchy!
(HFT) Hal won't Open the Pod Bay Door
http://www.youtube.com/watch?v=kkyUMmNl4hk
You're right....Hal won't open the pod bay door. F_ck!
Is the ocean deep enough to sink this bitch?
Maybe the real action is elsewhere. But What is BlackRocks share of the $47 billion? Perhaps it is far more than the $6.6 billion investment in BAC stock. So get that back before you can't; say its $15 billion, and forego $6.6 (assuming BAC nationalized/rescued) to net $8.4. Better to get at the front of the line and get something than do nothing as others line up for putbacks.
*** LISTEN UP ***
THIS WAS REPORTED 12 MONTHS AGO BY:::
*** BOB CHAPMAN ***
http://www.youtube.com/watch?v=trLcH868ld4
Now do you believe in Bob ??
Wow. I've always believed in Bob, of course, but he called this BAC action a full year ago on insider info. Very interesting.
Armageddon Bitchez
This is back door QE... by putting the collapsing MBS crap on one balance sheet that is too big to fail, you force the taxpayer to plug the hole... more extraction of middle class wealth. The worthless IOU goes from banks, to BoA, to the taxpayer... at a nice margin above market prices. Thanks!!!
Just wait. MaoObama will be hit hard with lawsuits. It will make Clinton's BJ and the semen on the dress seem trivial.
Rolling back the time in history.
Supreme Court Justice Samuel Alito frowned and shook his head as President Barack Obama spoke to Congress Wednesday. Obama had taken the unusual step of scolding the high court in his State of the Union address. (Jan. 27)
http://www.youtube.com/watch?v=k92SerxLWtc
MaoObama has promised shovel ready projects by building bridges to no where. The money was never there for infrastructure development.
A power hungry puppet soon learns about the no return phone calls from Globalist who coached/funded MaoObama.
The question of the hour, will Iron Mountain be delayed another 20 years? I know the answer, do you?
http://video.google.com/videoplay?docid=-6745627342652553091#
Apologies if the point has been made already. Can't read everything.
PIMCO & Blackrock hold a gun to BoA’s head and say to Obama ...........
“$500bn or we shot the bank ......... capiche?”
A printing press can keep the fraud going long enough for the looters to get away.
I do wonder however, just exactly where is it they think they are going with the loot.
I mean the games up. They can impoverish the USA by debasing the currency if they wish. They can put fully armoured militarised police on the streets if they wish. That also will fail.
Then they have to run.
But where to? Saudi Arabia? Dead in ten minutes. Israel? Dead in ten minutes. Paraguay? Poisoned within a week.
Never underestimate the human element in all this. There are a bunch of huge egos involved in this mess. If one of these megalomaniacs feels slighted/disrespected, then the dam holding back the quadrillion gallons of toxic truth will be undermined.
A face slap will escalate to a right hook and then to a duel. It will end with all the bankers pissing on each other's graves in broad daylight.
That's the most opimistic thing I've read in a while.
Grossly optimistic, I suspect. But I certainly hope you are correct and I am wrong. What a wonderful heavyweight fight that would be!
Have you noticed CNBS is playing devils advocate regarding global trade policies? Let's cut thru the bullshit propaganda.
Globalization is nothing more than the constant search for cheap labour and the constant upgrading of infrastructure all across the earth. Thus improving the infrastructure of previously 'unindustrialized countries' and accessing a whole new ununionized labour pool. The new world's that are created and improved through road, rail, energy, and hospital projects that are built by huge multinational corporations and paid for by unwitting outside investors. Before all the public works' projects are completed there is a debasement to pay for the projects with outside investors' money because it was 'lost' during the stock market crash or crash of a company's stock (debasement of vehicle of monetary exchange).During the debasement period the "inside" investors are selling short, 401k's/entitlements etc. are frozen until the company pays out whatever debts it can with whatever liquid it has left., then the company goes bankrupt, it's assets are filtered off to a subsidiary/holding co that was formed prior to debasement, the projects they were building get snapped up at fire sale prices. Now the projects are paid for, the companies get their money and the country gets its infrastructure for their people to work jobs cheaper than other people in the Old World will work them
Along the globalization trail, TPTB monopolize all the resources they can under corrupt regimes that most of the time they put into power. Then take control of all essential parts of the economy; food supply, energy and mineral resources, fresh water sources, precious stones, cash crops, telecom, and healthcare. The foreign multinational corporations use cheap labour to assemble their goods while owning all other utilities the people of the country use. Once the cheap labour and resources are exploited, the globalists pick up and start the search for a new land to build up. Every new world is built on the dollar of outside investors and tax payers. Outsourcing is the only way the king can afford the peasants wages.
It started with canals, ships, and marinas in olden days and evolved into railroads, locomotives, then into trucks and roads, and most recently aviation. Every logistic means throughout history has been payed for by the outside investor through the use of debasements. Bubbles are built up on the word that 'the good times will never end' and popped on 'we never saw this coming' - all made possible by governments pretending to fail all across the world. All three tiers of government (soon to be four; federal, state, municipal, and soon, Union) are chalked full of failures.
The same groups of companies get the contracts for foreign nation building, usually spawned off each other, tracing their way back to a group of banks that operate throughout the world. These companies debase vehicles of monetary exchange (stocks and stock markets). Most of them having intimate ties with the World Bank. The financiers' of globalization stay the same. Once projects are completed and economies successfully debased, wars are waged to pay for economic recovery and fulfill whatever geopolitical agenda these global financiers have. After the era of fraud there is a period of boom and the cycle repeats itself, the size of the war usually depends on the size of the debasement that preceded it.
Once the Vehicle of Monetary Exchange is debased, the stolen money is laundered through various organizations (charities, non-profits, Legatus, museums). Once the money has been laundered there needs to be a war to destroy the paper trail (the fog of war) so they need an event to set off the war. If multiple countries' economies are down, it will be a global war (each country fighting with it's favourite enemy). At this time the financial sector will air its laundry, and we'll start hearing about frauds and accounting errors. This will lead to federal bodies (FINRA, SEC) bringing cases against the scapegoats (Skilling, Conrad Black) and we will have show trials with show judges (Crater, Landis). The trials will bring justice to the 'rogue conspirators and that's that.
The new bubbles are usually being built up as the current bubble is popping. These bubbles are allowed to happen through manipulation of laws. In America, the crash (era's of fraud) usually coincides with the end of one presidency and the start of another and occur every 4 years. In the lame duck sessions of a presidency, all previous corporate criminals get pardons. This timeline repeats itself throughout history.
More to follow in the coming weeks. Alphabet soup agencies aren't doing there jobs. We peasants have to begin governing the elected servants. The elected servants don't like to be called, 'publicly appointed SERVANTS.' LOLThis is on R's site. I'm an avid fan of ec :)
See my posts on the Asymmetry in the Mill Wars.
Take a breath. Take a deep breath. Let it waft on to your olfactories the same way one lets a newly opened wine dance on the taste buds.
What you smell is Japan, 1990.
Market there could never fall. Why? Cross shareholdings. A owns B and B owns A, and A won't sell if B doesn't sell. Gentlemen's agreement. Tradition. Culture.
Self preservation trumps decorum, tradition and culture (as a species we have civil wars, right?).
The financial firms are in survival mode. The more astute amongst them (for all his faults Bill Gross is no dummy) know there's a game change coming. The more astute amongst the nation's leadership (must be a very small group) also know of the game change, and they know that another TARP, or letting BAC do a takeback coupled with a FASB 166 relaxation, or an 11th hour rule change grandfathered back to the day of the first MBS, will not be accepted by the increasingly angry citizenship. Bend over for the banks again, and the best that will happen is a lost re-election. The worst, well, it might well be "no limit" season on Congresspeople.
As Dylan (Bob, not Thomas) said, "when you ain't got nothin', ya got nothin' to lose".
When people see themselves as already dead, they don't fear taking someone else with them. When people see that $144 billion in bonuses is going to people who do not even deserve a paycheck---other than $2/hour for making license plates---they want to make the world right again or die trying.
We are but one self-serving decision from being there.
Listen up Congress et al. Your money or your life. I'm not threatening, I just can see which way the wind is blowing, and it's an ill wind that doth blow your way. Hang up on K Street (money) when they come 'acalling, or the people are going to start taking lives. If you cannot see that, perhaps you deserve what you get. I won't shed a tear, as I've already spent them all on the death of my country.
well said chindit, i am big fan of both you and bob d. i guess never realized the beauty of havin nothing, well, i got my safe.
Don't expect too much of it. The TBTF boys club finally saw that there is no clean way to get out of this mess. What with the general public becoming more acute and angry, and November political shakedown coming pretty soon. So they decided to spill some blood to placate the sheeple. Here's the plan:
1. Spin the whole clusterfuck like it's a small technicality that doesn't weigh on the markets.
2. Try to take the coming shitstorm under control by voluntarily stopping the foreclosures while issuing PRs to the tune of 'Our standards of due diligence are impeccable (it's our fucktard peers that are to blame)'.
3. Decide whom to Lehmanize from the pack since steps 1 and 2 are not showing results.
4. Start buying puts against the dumbfuck.
5. Make one last try for TARP.
6. Increase the dial of the MSM propaganda to 11. New message to the great unwashed 'We've cleared the toxic MBS. All's well in the land of RealityFastfoodUnicorns. Oh, and please don't look too closely at the Fed's and F&F cumbuckets AKA balancesheets'.
7. Oh, look, China is our enemy!
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