MF Global Roundup: the [so-far] Great Escape of "Teflon Don" Corzine; Bankruptcy Shenanigans Exposed; the "F" Word RevisitedSubmitted by EB on 04/23/2012 09:25 -0400
Has the case really gone cold? Or, are those who are in charge of the investigation, the "regulators" and the trustees, simply spraying teflon on every piece of sticky evidence that could lead to criminal prosecutions?
Size of Banks Killing Economy … But Giant Banks Have Only Gotten Bigger Since Financial “Reform” Enacted
All you need to read and some more.
Freeh accused of taking $ from Iranian terrorists and taking an MF insurance policy away from customers to pay Corzine's legal defense
Why MF Global might well be the template for future looting.
- There is no Spanish siesta for the eurozone (FT)
- Greece over halfway to recovery, says PM (FT) - inspired comedy...
- Sarkozy Trims Gap With Rival, Polls Show (WSJ) - Diebold speaks again
- IMF’s Zhu Sees ‘Soft-Landing’ Even as Property Slides: Economy (Bloomberg)
- Obama Uses Lincoln to Needle Republicans Battling in Illinois (Bloomberg)
- Three shot dead outside Jewish school in France (Reuters)
- Osborne Seeks to End 50% Tax Spat With Pledge to Aid U.K. Poor (Bloomberg)
- Monti to Meet Labor Unions Amid Warning of Continued Euro Crisis (Bloomberg)
Last week we learned two things: that Jamie Dimon specifically telegraphed he is now more powerful than the Fed, and that the US economy is back down to the same March 2009 optical exercises in financial strength gimmickry to stimulate rallies. Recall that on FOMC day, the market barely budged on Bernanke's ambivalent statement and in fact was in danger of backing off as the readthrough was that of no more QE... until JPM announced a major stock buyback and dividend boost. The catalyst: a successful passing of the latest and greatest Stress Test, which according to experts was "much more credible" than all those before it. Wrong. The test was merely yet another complete farce and a total joke. But as expected, the test had its intended effect: financial shares soared across the board, and banks promptly took advantage of investors and robot gullibility to sell equity into transitory strength. Bloomberg's Jonathan Weil explains.
In the spirit of George Orwell’s Animal Farm commandment: “all animals are equal, but some animals are more equal then others” comes the galling news that bankruptcy trustee, Louis Freeh, could approve the defunct, MF Global to pay bonuses to certain senior executives. This, despite the fact that nearly $1.6 billion of customer funds remains “missing” or otherwise partially accounted for, yet beyond the reach of those customers, perhaps forever, since before the firm declared bankruptcy on October 31, 2011... The Orwellian nature of finance is spiraling out of control. It was acutely demonstrated during the fall 2008, merge-and-be-bailed period, and subsequently, through mainstream acceptance that “too big to fail” validates the subsidization of reckless banking practices (bail first, ask questions or consider tepid regulation later), and the European debacle. Three wrinkles of audacity underscore the potential MF Global bonus approvals.
- Investors help Athens over bailout hurdle (FT)
- Greece Moves Closer to Swap (WSJ)
- U.S. Warns Apple, Publishers (WSJ)
- China offers other Brics renminbi loans (FT)
- Court Challenges EU on Bank Downsizings (WSJ)
- QE blamed for surge in pensions shortfall (FT)
- Tang: Open to adjusting dollar trading band (WSJ)
- U.S. Report to Warn on Cyberattack Threat From China (WSJ)
Every year in February, the Treasury department releases its adjustment to foreign purchases of Treasury bond holdings as of the previous June (with revised and overriding estimates for all the intervening months in the interim, as well as previous monthly forecasts). It did that earlier today. And while many may have been expecting the revision to show that contrary to Zero Hedge claims China has in fact been building up its Treasury stake (following the now traditional transfer of UK purchases to China), the reality is that not only has China indeed been dumping US exposure (first reported by us previously when we observed the plunge in holdings in the Fed's custodial account), selling over $100 billion in Treasurys in December alone (bringing its total to $1152 billion, and down 12% from its June total of $1307 billion) but that probably far more curiously, the UK is no longer a shadow buyer of Chinese bond accumulation and instead has become a secret accumulator of Russian holdings.
Anyone Who Thinks that War Is Good For the Economy Has One Eye Covered ... And Is Only Looking At Half the Picture ...
Plunging deeper into the farce-hole, the FT reports tonight that Obama's foreclosure settlement with the banks over their improper seizure of tax-paying US citizens' homes will in fact be subsidized by those very same US taxpayers. It is a hidden clause (that has not been made public yet) that allows the banks to count future loan modifications under the $30bn (taxpayer funded) HAMP initiative towards their $35bn agreement to restructure obligations under the new settlement. As the FT goes on to note, BofA will be able to use future mods made under HAMP towards the $7.6bn in borrower assistance it is committed to provide - which means, in a (as TARP inspector general Neil Barofsky describes) 'scandalous' turn of events the bank will receive payments for averting a borrower default and be reimbursed by the taxpayer for the principal write-down. We have much stronger words for how we are feeling about this but Barofsky sums it up calmly "It turns the notion that this is about justice and accountability on its head". Are the Big Five banks truly beyond the law?
- Greece's Hazardous Road to Restructuring (WSJ)
- Spain Coaxes Banks to Merge to Purge Losses (Bloomberg)
- Brussels Discovers New €15bn Black Hole in Greece's Finances (Guardian)
- UK Recession Predicted to Return (FT)
- Senate OKs insider trading curbs on lawmakers (Reuters)
- China Limits Mortgages for Foreigners (Bloomberg)
- Villagers scramble for fuel in Europe's big chill (Reuters)
- SNB Head Warns of Political Fallout After Crisis (FT)
- Portugal Bond Rout Overstates Greek Likeness (Bloomberg)
- Bernanke Says He Won’t Trade 2% Inflation-Rate Target for More Job Growth (Businessweek)
"Supercommittee That Runs America" Urges End To The "Zero Bound", Demands Issuance Of Negative Yield BondsSubmitted by Tyler Durden on 02/01/2012 10:40 -0400
One of the laments of the uberdoves in the world over the past several years has naturally been the fact that interest rates are bound by Zero on the lower side, and that the lowest possible rate on new paper is, by definition, 0.000%. Which is what led to the advent of QE in the first place: in lieu of negative rates, the Fed was forced to actively purchase securities to catch up to a negative Taylor implied rate. This may be about to change, because as the just released letter from the Treasury Borrowing Advisory Committee, or as we affectionately called the JPMorgan/ Goldman Sachs Chaired committee, the "Supercommittee That Runs America", simply because it alone makes up Tim Geithner's mind on what America needs to do funding wise, demand, "It was broadly agreed that flooring interest rates at zero, or capping issuance proceeds at par, was prohibiting proper market function. The Committee unanimously recommended that the Treasury Department allow for negative yield auction results as soon as logistically practical." And what JP Morgan and Goldman Sachs want, JP Morgan and Goldman Sachs get. And once we get the green light on negative yields at auction, next up will be the push for the Fed to impose negative rates on all standing securities, which means that coming soon savers will be literally paying to hold cash. And that will be the final straw.