Another day, another 'failed' IPO. Ally Financial - aka GMAC - that bastion of subprime auto loans and risk management, IPO'd at $25 last night (at the very bottom of the $25 to $28 range) but investors seem to prefer to sell their allocations than pile into this 'bank'. Enabling the Treasury to exit more of its losing proposition (raisng $2.38 billion), ALLY opened well below its IPO price... at $24.25. As a gentle reminder, ALLY filed to go public in March 2011.
When Arthur Levitt's SEC adopted Rule 2a-7 in 1998, it handed the TBTF banks and GSEs a mortgage monopoly on a silver platter.
The MSM did their usual spin job on the consumer credit data released earlier this week. They reported a 5.4% increase in consumer debt outstanding to an all-time high of $3.051 trillion. In the Orwellian doublethink world we currently inhabit, the consumer taking on more debt is seen as a constructive sign. The storyline being sold by the corporate MSM propaganda machine, serving the establishment, is that consumers’ taking on debt is a sure sign of economic recovery. They must be confident about the future and rolling in dough from their new part-time jobs as Pizza Hut delivery men. Plus, they are now eligible for free healthcare, compliments of Obama, once they can log-on. Of course, buried at the bottom of the Federal Reserve press release and never mentioned on CNBC or the other dying legacy media outlets is the facts and details behind the all-time high in consumer credit. They count on the high probability the average math challenged American has no clue regarding the distinction between revolving and non-revolving credit or who controls the distribution of such credit. A shocking fact (to historically challenged government educated drones) revealed by the Federal Reserve data is that credit card debt did not exist prior to 1968. How could people live their lives without credit cards? 1968 marked a turning point for America...
First it was Research In Motion, then in an act of desperation (remember, it's not GMAC, it's Ally Bank although it can't IPO no matter what) it changed its name to Blackberry. And while we doubt it will happen, perhaps today's plunge of the stock price back to single digits should result in the final and correct name of the company that may have run out of kitchen sinks: RedBerry.
Full Deposition of Angela Edwards “Robo-Verifier” as Servicer for the Plaintiff for Verification of Foreclosure ComplaintSubmitted by 4closureFraud on 06/28/2013 07:54 -0400
No matter the amount and severity of lawsuits, settlements, and bad publicity, it appears that the act of signing without proper authority or knowledge as to that which one is signing, continues.
The 2011 actions of the FDIC ending the safe harbor for true sales locked in a solution to TBTF
Independent Foreclosure Review: Payments to 4.2 Million Borrowers Covered by Fraudclosure Agreement to Begin April 12Submitted by 4closureFraud on 04/09/2013 14:22 -0400
1,135 Borrowers to Receive Max $125,000 Payment in Fraudclosure Settlement
It is clear now that we must have been wrong about the economy. No more proof is needed than the fact the Dow has gone up 1,500 points. Everyone knows the stock market reflects the true health of the nation – multi-millionaire Jim Cramer and his millionaire CNBC talking head cohorts tell us so. Ignore the fact that the bottom 80% only own 5% of the financial assets in this country and are not benefitted by the stock market in any way. It is time to open your eyes and arise from your stupor. Observe what is happening around you. Look closely. Does the storyline match what you see in your ever day reality? It is them versus us. Whether you call them the invisible government, ruling class, financial overlords, oligarchs, the powers that be, ruling elite, or owners; there are powerful wealthy men who call the shots in this global criminal enterprise. No amount of propaganda can cover up the physical, economic, social, and psychological descent afflicting our world. There’s a bad moon rising and trouble is on the way.
In a stunning headline-making moment of clarity, it appears that all the major financials that the Fed monitors (except GMAC Ally) will survive a cataclysmic, Lehman-like moment based on their self-determined analytics of their deeply illiquid off-balance-sheet assets (and a comprehensive understanding of the co-dependence of all those assets). As Bloomberg notes,
*FED SAYS 18 BANKS PROJECTED LOSSES WOULD BE $462B UNDER TEST
*FED SEES 17 BANKS' TIER 1 COMMON RATIO ABOVE 5% IN WORST CASE
*GMAC ALLY ONLY STRESS-TESTED BANK SEEN WITH TIER 1 COMMON BELOW 5%
*TESTS SCENARIO ASSUMES EQUITY PRICES DROP MORE THAN 50%, HOUSING PRICES DECLINE MORE THAN 20%
Is it any wonder that Government Motors wanted to IPO its GMAC/Ally business recently - with a 1.5% stressed Tier 1 ratio.
“Facts do not cease to exist because they are ignored.” – Aldous Huxley
The entire system is corrupt to its core. Both political parties, regulatory agencies, Wall Street, the Federal Reserve, and mainstream media are participants in this enormous fraud. They grow more desperate and bold by the day. The lies, misinformation and propaganda being spewed on a daily basis become more outrageous and audacious. They are using the Big Lie method on a grand scale. They frantically need to lure the muppets into the stock market and the housing market to keep the game going a little longer. You can sense we are reaching a tipping point. The system they have created is mathematically unsustainable. Therefore, it will not be sustained.
After digesting the opinions of the shills, shysters and scam artists, I am ready to predict that I have no clue what will happen during 2013. The fog of uncertainty is engulfing the nation, making consumers hesitant to spend and businesses reluctant to hire or invest. Virtually all of the mainstream media, Wall Street banks and paid shill economists are in agreement that 2013 will see improvement in employment, housing, retail spending and, of course the only thing that matters to the ruling class, the stock market. Even among the alternative media, there seems to be a consensus that we will continue to muddle through and the day of reckoning is still a few years off. Those who are predicting improvements are either ignorant of history or are being paid to predict improvement, despite the overwhelming evidence of a worsening economic climate. The mainstream media pundits, fulfilling their assigned task of purveying feel good propaganda, use the 10% stock market gain in 2012 as proof of economic recovery. The facts prove otherwise... Every day more people are realizing the con-job being perpetuated by the owners of this country. Will the tipping point be reached in 2013? I don’t know. But the era of decisiveness and confrontation has arrived. The existing social order will be swept away. Are you prepared?
In the end, it was the banksters they chose, and thanks to your government, you got hosed.
When it comes to government bailout case studies, the past four years have plenty. One among them is the financial company jovially called Ally - a name which well-paid nomenclature consultants were convinced would inspire confidence and trust. And to an extent they were right - after all we are talking about a firm which several years ago had a far more unpleasant name: GMAC, short for General Motors Acceptance Corporation. It was GMAC which, as one of the various entities on the receiving end of involuntary taxpayer generosity in 2008/2009, received a $17.2 billion bailout. The reason for GMAC's Ally's collapse is that the firm was loaded up to the gills on various subprime and other NINJA auto-financing loans used to purchase cars made by that other spectacular collapse: General Motors, maker of such external combustion vehicles as the Chevy Volt. Over the past several months the Ally CEO, Michael Carpenter, decided to little by little start paying taxpayers back, having sold a Canadian unit to RBC in October for $4.1 billion, and its Mexican Insurance business to Ace Ltd for $865 million. Moments ago the firm just announced it would be selling its international auto-finance businesses, including its operations in Europe, LatAm and a 40% stake in its Chinese JV (a business it previously said it would not seek to divest), for a total of $4.2 billion. The buyer? Another previously bailed out company, and one which still counts the government as its biggest shareholder: General Motors. And so the vendor financing circle is now complete, with GM finally reuniting with its old captive finance units, or at least the international part of them, which were fully owned until GM sold 51% of it to Cerberus in 2006, after which everything went to hell.
Have you heard the news? Auto sales are booming. Total sales for the month of August were 1,285,202 vehicles, according to Autodata Corp, the highest monthly sales figure for any August since 2007, when 1.47 million autos were sold in the United States. Year to date auto sales have totaled 9.7 million and are on track to reach 14.5 million. Between 2006 and 2007, auto sales ranged between 16 million and 18 million. They crashed below 10 million in 2009. The Keynesians running our government have pulled out all the stops to restart this engine of consumer spending. First they wasted $3 billion of taxpayer funds on the Cash for Clunkers debacle. Almost 700,000 perfectly good cars were destroyed in order to keep union workers happy. This Keynesian brain fart distorted the used car market for two years, raising prices for cars needed by the working poor. After that miserable failure, they realized the true secret to selling vehicles is to give them away to anyone that can scratch an X on a loan document, with 0% interest for 60 months, financed by Federal government controlled banking interests. Add in some massive channel stuffing and presto!!! – You’ve got an auto sales boom.... This is America, land of the delusional and home of the vain. The appearance of success is more important than actual success.
There was not much in the GDP report that was unexpected, except durable goods. The decline in durable goods was comparable to Q2 2011, right down to the primary driver of that weakness - motor vehicles. However, there was no earthquake in Japan this year to disrupt supply chains, production schedules and brand availability. Just like last year, marginal economic growth overall seems to be backfilled with a tide of inventory. The trouble with inventory at the margins of growth is that it is essentially a build-up of forward demand, and therefore susceptible to reversal should overdone production move out of alignment with final demand. Both monetary and fiscal policies actively seek to pull forward demand, meaning this inventory-driven activity conforms to policy goals. It's almost like the 1960's and 70's, with motor vehicles and government spending driving the marginal economy again. All that’s missing is for Ralph Nader to show up and write about how cars are dangerous.