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By Ronald D. Orol, MarketWatch WASHINGTON (MarketWatch) — The near-collapse of the financial system and the resulting economic crisis caused a “conservatively” estimated $7.6 trillion in losses of gross domestic product between 2008 and 2018, according to a study released Wednesday by the advocacy group Better Markets. An additional estimated $5.2 trillion in GDP would have been lost but was prevented by “extraordinary fiscal and monetary-policy actions,” Better Markets said. The [...] Just six months ago, money market traders expected the Federal Reserve to raise interest rates by the end of 2013. Now, they see borrowing costs staying at record lows for about three more years as the economic outlook worsens. Bond market measures from overnight index swaps, which indicate no increase in the federal funds rate until mid-2015, to a 62 percent decline in a measure of volatility in government bonds signal that rates will stay near zero for longer. The gapbetween [...] From Bloomberg: Derivatives traders may take losses on the margins they post at clearinghouses during a crisis, as global plans to eradicate the dangers of too-big-to-fail financial institutions gather pace. Losses on so-called variation margin and conversion of creditor claims into equity are among options proposed by a group of regulators last week to protect taxpayers from future financial catastrophes when other buffers are depleted. Clearinghouses act as central counterparties in derivatives [...] Central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen their finances fall short, the Bank for International Settlements said. “Central banks are being cornered into prolonging monetary stimulus as governments drag their feet and adjustment is delayed,” the Basel, Switzerland-based BIS said in its annual report, published yesterday. “Both conventionally and unconventionally accommodative monetary policies are palliatives and have their limits.” While central [...] SEC Staff Said to End Lehman Probe Without Recommending Action By Joshua Gallu
U.S. Securities and Exchange Commission investigators have concluded their probe of possible financial fraud at Lehman Brothers Holdings Inc. and determined that they will probably not recommend any enforcement action against the firm or its former executives, according to an excerpt of an internal agency memo.
Under a heading reading “Activity in the Last Four Weeks,” the undated document reads, “The [...] In the five years that John Silvetz made about $700 million for Deutsche Bank AG (DBK) by trading corporate bonds and credit derivatives, the amount of his annual bonus paid in cash dropped to 20 percent from almost 70 percent. The rest, earned by betting on companies from American International Group Inc. to MBIA Inc., was locked up in deferred stock and euros, according to people familiar with the matter, who declined to [...] WSJ During the last decade the march to democratize the markets has charged forward, with each new innovation or revamp heralded as evening the playing field and giving smaller investors a sense of fairness and trust. These efforts have yielded two tangible results: lightning-fast execution and slashed trading costs. The floor of the New York Stock Exchange is witness to this shift. The number of floor brokers has shrunk by half, to [...] It is on the peril of Lehman, Goldman succeeded against the big boys like Bank of America, Citi Bank and JB Morgan! AllGov news, reported Thursday that Goldman and JP Morgan were among 17 investment banks sued in 1947 for collusion in setting rates, acting like a cartel, in Investment Banking Cartel More Concentrated than Ever, Drops to 5, and that their method of eliminating competition has reduced that 17 down to 5. The move now, it seems, is not to pay off the politicians and government officials and regulators, but actually to become the regulators. As [...] (Bloomberg) Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved. “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about [...] The Federal Reserve, chastised by Congress for lending money to foreign institutions including a Libyan-owned bank, is once again the lender of last resort for banks around the world it knows little about. Three years after the collapse of Lehman Brothers Holdings Inc., money-market borrowing rates for dollars are rising, leading the Fed and European Central Bank to make the currency available to Europe’s institutions for as [...] The Federal Reserve, chastised by Congress for lending money to foreign institutions such as the Central Bank of Libya, is once again the lender of last resort for banks around the world it knows little about. Three years after the collapse of Lehman Brothers Holdings Inc., money-market borrowing rates for dollars are rising, leading the Fed and European Central Bank to make the currency available to [...] (Reuters) – Moody’s Investors Service lowered debt ratings for Bank of America Corp, Citigroup Inc and Wells Fargo & Co on Wednesday, saying the U.S. government is getting less comfortable with bailing out large troubled lenders. The government is “more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled,” said the rating agency, a unit of Moody’s [...] bloomberg.com European banks are losing deposits as savers and money funds spooked by the region’s debt crisis search for havens, a trend that could worsen economic and financial conditions. Retail and institutional deposits at Greek banks fell 19 percent in the past year and almost 40 percent at Irish lenders in 18 months. Meanwhile, European Union financial firms are lending less to one another [...] Bank of America continues slouching toward destruction, with its stock price tanking (down nearly 50% since the start o the year), credit default swaps (basically, wagers on its default) up, layoffs coming, and theoretically under the Dodd-Frank financial reform law, no bailout in sight. Buried yesterday in a Bloomberg piece was the seeming throwaway line that “Bank of America’s bond-insurance prices last week surged to a [...] France, Italy, Spain and Belgium plan to enact bans on short selling or on short positions, the European Securities and Markets Authority said today. “Some authorities have decided to impose or extend existing short-selling bans in their respective countries,” ESMA said in a statement on its website. “They have done so either to restrict the benefits that can be achieved from spreading false rumors or to achieve a regulatory level playing [...] ECB lending to banks rose by 7.75 billion euros last week to 505.1 billion euros, only the third time this year the measure has risen above 500 billion euros. Photographer: Hannelore Foerster/Bloomberg Measures that gauge the level of European banks’ reluctance to lend to one another are approaching levels unseen since the aftermath ofLehman Brothers Holdings Inc. (LEHMQ)’s collapse. Banks in the region are paying the biggest premium to borrow in [...] John Nyaradi: A Double Dip Is Right Around The Corner; The Fundamentals Virtually Scream Bear MarketBy John Nyaradi BEND, Ore. (MarketWatch) — A dreaded “double dip” could already be upon us, and that spells bad news for governments, the global economy and most investors who are still in recovery mode from the “Great Recession.” The last time the economic and technical picture looked this shaky was in the days and months after our not-so-fondly remembered Lehman Brothers Holdings Inc. [...] William D. Cohan, whose House of Cards is required reading about the crisis, sums up the disquiet in global markets: Here are the facts: The yield on Greek sovereign debt is now at record highs for the euro era. Last week’s state-managed bond auction in Italy almost failed. And, while few seem to have noticed, the overnight repurchase market — for short-term, secured, corporate debt obligations — [...] GEITHNER SAID TO CONSIDER LEAVING TREASURY AFTER BUDGET DEAL Explains why the market just ripped. In the meantime, a cubicle at 270 Park is being prepared. From Bloomberg: Treasury Secretary Timothy F. Geithner has signaled to White House officials that he’s considering leaving the administration after President Barack Obama reaches an agreement with Congress to raise the national debt limit, according to three people familiar with the matter. Geithner hasn’t [...] By Caroline Humer and Jonathan Stempel NEW YORK (Reuters) – Lehman Brothers Holdings Inc filed a new $65 billion bankruptcy liquidation plan that it said has won wider support, possibly setting the stage for the end of the biggest bankruptcy in U.S. history. If approved, the plan could enable what remains of the fourth-largest U.S. investment bank to emerge from Chapter 11 protection and start repaying creditors. [...] The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends this week, as the central bank uses its $2.86 trillion balance sheet to keep interest rates low. While the $600 billion purchase program, known as QE2, winds down, the Fed said June 22 that it will continue to buy Treasuries with proceeds from the maturing debt it currently [...] Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved. “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response [...] Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved. “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price [...] by ZH Bloomberg reports: “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.” Unlike Icahn, Mobius stopped [...] Senate Republicans blocked a Democratic Bill to End tax Breaks for Moving U.S. Jobs Offshore! http://goo.gl/6qhnK
Republican committee voted for a 18-month delay of regulations to reduce risk in OTC Derivatives. http://goo.gl/4IYGP
Republican Senate Campaign Contribution Monies from Government Military Contractors with Free Speech Argument http://goo.gl/35V9l
Secret Hold On Whistleblower Protection Narrowed Down To Two Senators http://goo.gl/INklc
UBS Whistle Blower in Jail for helping the IRS with over 2,000 Tax Dodgers! http://goo.gl/s8JYp ‘Austrian tax evasion [...] Lloyds Banking Group Plc (LLOY) and Royal Bank of Scotland Group Plc (RBS) are among 14 U.K. lenders whose debt Moody’s Investors Service is considering downgrading because the withdrawal of government support may increase their credit risk. Santander U.K. Plc and customer-owned lenders including Nationwide Building Society also had their debt ratings put on review for a possible downgrade, Moody’s said in a statement today. Lloyds and RBS and Santander U.K.’s [...] via Bloomberg: Arab Banking Corp., the lender part- owned by the Central Bank of Libya, used a New York branch to get 73 loans from the U.S. Federal Reserve in the 18 months after Lehman Brothers Holdings Inc. collapsed. The bank, then 29 percent-owned by the Libyan state, had aggregate borrowings in that period of $35 billion — while the largest single loan amount outstanding was $1.2 billion in July 2009, according [...] Former Federal Reserve Chairman Alan Greenspan said a surge in U.S. government “activism,†including fiscal stimulus, housing subsidies and new regulations, is holding back the economic recovery. Increased bond issuance by the Treasury Department crowds out borrowers with the weakest credit ratings, Greenspan said in an article in International Finance, published on the Web today. At least half of the shortfall in companies’ capital spending “can be explained by the shock [...] by zh Andrew Cuomo has now officially filed civil fraud charges against Ernst & Young. While overdue following Anton Valukas’ “examiner Lehman” report which obliterated all integrity E&Y may have had, and while we are confident there will be a settlement in this case as well, at least this final act by Cuomo as NY AG pretends to give the impression that the US judicial system [...] by Washingtonsblog Even Alan Greenspan is confirming what William Black, James Galbraith, Joseph Stiglitz, George Akerlof and many other economists and financial experts have been saying for a long time: the economy cannot recover if fraud is not prosecuted and if the big banks know that government will bail them out every time they get in trouble. Specifically, Greenspan said today in a panel discussion at a Fed [...] FCIC has threatened to audit Goldman Sachs, as it looks for more data on its dealing in derivatives.FT: The commission will not back down from demands for information Goldman’s executives have maintained they do not track, Phil Angelides told the Financial Times. “We have a deep level of questioning about whether we’re getting the straight scoop here and whether Goldman is working with us on information that they surely have,†Mr Angelides, chairman of the US Congress-appointed commission. Meanwhile, separately, new [...] 1) Credit Swaps Signal Sovereign Debt May Need ‘Aggressive Action’ (Italy, Spain and Greece) “May 28 (Bloomberg) — Credit-default swaps on the sovereign debt of Italy and Spain are heading for their biggest monthly increase amid investor concern that depressed demand for bonds of indebted nations will keep borrowing costs elevated. Contracts on Greece signal a 45 percent chance the Mediterranean nation will default within the next [...] |
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