Financial News

[StrangeSox]

Wait...so this is somehow Marxist (l.o.l.) Obama's fault?

 

Apparently she's fighting the good fight against Muslims, too!

 

More good stuff:

Why would the Obama regime kill Americans? I think the question is, why WOULDN’T the Obama regime kill Americans? The Obama regime is composed of Marxist-Leninist psychopaths. A glancing, superficial survey of 20th century history shows one glaring fact above all others: MARXISTS MURDER PEOPLE WITHOUT COMPUNCTION. Marxists also hate Americans, by definition.

Edited November 18, 2011 by StrangeSox

[southsider2k5]

http://www.chicagobusiness.com/article/201...or-more-missing

 

MF Global trustee says $1.2B or more missing

November 21, 2011

 

Today's Headlines

11/21/2011

 

 

(AP) — The court-appointed trustee overseeing MF Global's bankruptcy says up to $1.2 billion is missing from customer accounts, double what the firm had reported to regulators last month.

 

The trustee, James Giddens, also said in a statement Monday that his plans to release about $520 million from accounts that have been frozen will mean nearly all the assets under his control will be distributed.

 

Giddens has been combing through the accounts and finances of MF Global, which filed for bankruptcy protection on Oct. 31.

 

Regulators are investigating whether MF Global tapped money from clients' accounts as its own financial condition worsened. That would be a violation of securities rules. The FBI is investigating whether New York-based MF Global violated any criminal laws.

 

MF Global was led by former New Jersey Gov. Jon Corzine. The firm collapsed after making a disastrous bet on European debt.

 

Giddens's office said in a statement that "the apparent shortfall" was as much as $1.2 billion or more, but noted that the figure could change.

 

Last week, the judge overseeing the bankruptcy proceeding approved Giddens's request that 60 percent of the funds in about 23,300 frozen cash-only accounts be returned to customers. The money could start moving to customers before Thanksgiving, a spokesman for Giddens said.

 

Giddens has previously returned to customers $1.5 billion in collateral for their trading accounts with MF Global. He has a goal of eventually returning 100 percent of all funds to customers, though that could be reduced by the apparent shortfall.

 

Customers use the accounts for trading derivatives. The value of derivatives is based on the value of an underlying asset, such as interest rates, oil prices or currency rates. MF Global was one of the biggest players in the derivatives market.

 

Read more: http://www.chicagobusiness.com/article/201...g#ixzz1eNCgDSd2

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[Balta1701]

One could spend hours in this XKCD graphic and feel like they've accomplished something.

[mr_genius]

One could spend hours in this XKCD graphic and feel like they've accomplished something.

 

nice

[bmags]

Q3 GDP revised downward to 2.0 growth.

[StrangeSox]

Diamond and Saez have a new paper out on optimal tax rates. I believe I've linked to their work before on income distributions and tax policy.

 

The take-away is that, if we want to maximize revenues, we're nowhere near the optimal marginal tax rate on the top earners. We'd need to be closer to 76% for that.

[Balta1701]

http://www.chicagobusiness.com/article/201...or-more-missing

Ok, we need to open up a pool about how high the number will actually be by some set date. Whaddya all think, $4 billion missing by Christmas? The full $5.4 billion missing by New Years?

The amounts of customer funds missing from MF Global have multiplied from $633 million to $1.2 billion yesterday– and now $1.7 billion today, according to Vincent (Trace) Schmeltz III , the attorney for the 80 member Commodity Customers Coalition. Schmeltz is a member of the Barnes & Thornburg law firm in Chicago

 

This new figure is the result of the inability by the Trustee and the CME (the Chicago Mercantile Exchange) to find more than $3.7 billion in customers funds rather than the $5.4 billion projected just after MF Global filed for bankruptcy on October 31.

 

Apparently, on October 31, the CME reported segregated funds totalled $5.4 billion. The next day– on November 1st, the CME suggested that $633 million was lost and unaccounted for. But, by yesterday, November 21, the Trustee reported that he could find only $3.7 billion in assets. Neither Schmeltz nor Koutoulas can understand why the CME declared only $1.2 billion missing yesterday– because if only $3.7 billion has been found of the original $5.4 billion segregated accounts– this suggests that the missing amount of segregated funds now totals $1.7 billion.

[southsider2k5]

Ok, we need to open up a pool about how high the number will actually be by some set date. Whaddya all think, $4 billion missing by Christmas? The full $5.4 billion missing by New Years?

 

Once again highlighting what a complete waste of money that our FINREG system is in this country. Hell it has been a year and a half, and the SEC is still trying to figure out what happened in the flash crash.

[southsider2k5]

Groupon is back under its IPO price by 15% or so.

[mr_genius]

Groupon is back under its IPO price by 15% or so.

 

just like we predicted. sinking like a stone.

[southsider2k5]

AMR to Chapter 11

[southsider2k5]

Housing prices back to 2003 levels and still falling

 

http://money.cnn.com/2011/11/29/real_estat...htm?iid=Popular

[southsider2k5]

just like we predicted. sinking like a stone.

 

LNKD is even close to being back to its IPO price, trading $58 after being as high as $120 with a $45 IPO.

[southsider2k5]

Paulson disclosed his plans for Freddie and Fannie to a room of financial execs, allowing them to potentially trade on the info.

 

http://www.bloomberg.com/news/2011-11-29/h...mae-rescue.html

[southsider2k5]

Stocks up 3% premarket on coordinated central bank actions.

[southsider2k5]

Stocks up 3% premarket on coordinated central bank actions.

 

Speculation on CBNC is that one of the biggest banks in the world was about to fail, and this action was to hide and protect it.

[NorthSideSox72]

Speculation on CBNC is that one of the biggest banks in the world was about to fail, and this action was to hide and protect it.

Possible, but I really don't see how a basis cut on money swap is what would save a large bank. So I don't believe that is likely in this case. If anything, the governments would NOT want to hide it anyway, becuase they want leverage to further regulate and break things up.

 

Also helping the markets, ADP jobs number for November is out, and they are saying 206k newly created, which would be a pretty huge number (if the official report comes in anywhere near that).

 

[southsider2k5]

http://chicago.cbslocal.com/2011/11/29/ill...campaign=210790

 

Illinois House Rejects Tax Breaks For CME, CBOE, Sears

November 29, 2011 7:46 PM

 

SPRINGFIELD, Ill. (AP) — Illinois lawmakers went home Tuesday night after hitting an impasse over a $250 million package of tax relief designed to keep several high-profile companies from leaving the state.

 

The Legislature could convene again when negotiators come up with a new version of the package, but there was no hint of whether that would take days or weeks or even longer. Senate President John Cullerton, D-Chicago, suggested action could be delayed until spring without any problem.

 

Coming up with a more palatable plan could be difficult. While the Senate approved the tax package Tuesday, it failed in the House on a stunning 8-99 vote.

 

Before adjourning, both the House and Senate approved a plan to tinker with the budget so that Gov. Pat Quinn would cancel plans to close seven state facilities and lay off about 1,900 employees. The legislation, which Quinn supports, shifts money in the budget but doesn’t increase overall spending.

 

They also sent the governor legislation meant to curtail abuses of public pension systems. It would bar employees from earning pension credit while on leave working for unions, and also prohibit employees from “double-dipping” by getting credit from union pension systems and public systems at the same time.

 

The measure also attempts to cancel pension benefits for two Illinois Federation of Teachers lobbyists who qualified for teachers’ pensions by spending just a single day in the classroom as substitutes. But that could run into constitutional roadblocks.

 

The tax package would provide about $85 million in tax relief for financial companies CME Group Inc. and CBOE Holding Corp., both of which have threatened to leave Illinois unless they get a break. Sears Holdings Corp., which also says it might leave, would get a $15 million break each year for the next decade.

 

It also includes other breaks that apply to Illinois businesses in general, including a research-and-development credit and changes in the way losses can be applied to tax bills.

 

Families would get about $110 million in tax relief in the Senate version, which passed 36-18. The standard personal exemption on income taxes, now $2,000, would be bumped to $2,050 and then increase with the rate of inflation in future years. The state version of the earned-income tax credit for poor families would rise to 10 percent of the federal credit, up from 5 percent.

 

Some House members wanted to see bigger tax credits for the poor. “Everybody has gotten everything that they wanted except the EITC,” said Rep. Will Davis, D-Homewood.

 

The measure’s sponsor urged lawmakers to accept the package, even if it wasn’t ideal. Rejecting it could deny poor families any relief at all, warned Rep. John Bradley, D- Marion.

 

“Why can’t low-income individuals still get something out of this?” Bradley said.

 

The lopsided House vote may not reflect the proposal’s actual level of support. Lawmakers who are willing to back a contentious measure sometimes wind up voting “no” once it becomes clear the bill won’t pass.

 

The Senate president said the tax proposal is still alive, despite the House vote. It has made it halfway through the Legislature, Cullerton said, so backers should concentrate on building support in the House.

 

He noted the legislation could be approved early next year because the tax provisions don’t kick in until July, although CME officials have been pushing for a decision this fall.

 

“Maybe it’s going to take some time to reflect on it and pass it,” Cullerton said.

[southsider2k5]

Possible, but I really don't see how a basis cut on money swap is what would save a large bank. So I don't believe that is likely in this case. If anything, the governments would NOT want to hide it anyway, becuase they want leverage to further regulate and break things up.

 

Also helping the markets, ADP jobs number for November is out, and they are saying 206k newly created, which would be a pretty huge number (if the official report comes in anywhere near that).

 

It was the same thing they did with the bank bailouts. They forced everyone to take them, so as to not reveal who really was in trouble.

[NorthSideSox72]

It was the same thing they did with the bank bailouts. They forced everyone to take them, so as to not reveal who really was in trouble.

That's not true, there is a list out there of who got what money, that was part of the law. And besides, TARP was a real bailout - this central bank movement isn't that type of move. The two are entirely different.

 

[NorthSideSox72]

http://chicago.cbslocal.com/2011/11/29/ill...campaign=210790

Well that isn't good. The exchanges had a real case here about being taxed unfairly compared to other businesses. Sears maybe not so much. But if the state wants a progressive tax structure to help the poor, then enact that - as opposed to the flat tax rate.

 

[southsider2k5]

That's not true, there is a list out there of who got what money, that was part of the law. And besides, TARP was a real bailout - this central bank movement isn't that type of move. The two are entirely different.

 

There were banks and firms who did not want the money, who were forced to take it, as to hide the firms that were in the biggest trouble. That was a central tenet of the TARP strategy.

[NorthSideSox72]

There were banks and firms who did not want the money, who were forced to take it, as to hide the firms that were in the biggest trouble. That was a central tenet of the TARP strategy.

OK, so you are saying that TARP was really there to secure one or a few banks, more than anything else... no news there. And everyone knows who they were in any case, so I am not sure where you are getting this. Plus, again, the Central Bank action on swap basis changes is not anything like the same as a straight cash money bailout. If a major global bank was about to go under, and they wanted to bail it out, they would need to do a LOT more than this to make that happen. The conspiracy theory on this is silly.

 

[NorthSideSox72]

Jeez, markets are up 4 to 4.5% now on the day. Haven't seen a day like this in a long time.

 

It was quite an amazing confluence of positive news today: central bank action to increase liquidity, suprisingly high ADP jobs number, surprisingly high home sales numbers... good day to be long equities across the board.

 

[southsider2k5]

http://www.slate.com/articles/business/mon...ut_scheme_.html

 

A Secret Scandal

The government and the big banks deceived the public about their $7 trillion secret loan program. They should be punished.

 

By Eliot Spitzer|Posted Wednesday, Nov. 30, 2011, at 1:34 PM ET

 

Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn’t paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don’t worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.

 

Yet this is exactly what the major American banks have done to the public. During the deepest, darkest period of the financial cataclysm, the CEOs of major banks maintained in statements to the public, to the market at large, and to their own shareholders that the banks were in good financial shape, didn’t want to take TARP funds, and that the regulatory framework governing our banking system should not be altered. Trust us, they said. Yet, unknown to the public and the Congress, these same banks had been borrowing massive amounts from the government to remain afloat. The total numbers are staggering: $7.7 trillion of credit—one-half of the GDP of the entire nation. $460 billion was lent to J.P. Morgan, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley alone—without anybody other than a few select officials at the Fed and the Treasury knowing. This was perhaps the single most massive allocation of capital from public to private hands in our history, and nobody was told. This was not TARP: This was secret Fed lending. And although it has since been repaid, it is clear why the banks didn’t want us to know about it: They didn’t want to admit the magnitude of their financial distress.

 

The banks’ claims of financial stability and solvency appear at a minimum to have been misleading—and may have been worse. Misleading statements and deception of this sort would ordinarily put a small-market player or borrower on the wrong end of a criminal investigation.

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So where are the inquiries into the false statements made by the bank CEOs? And where are the inquiries about the Fed and Treasury officials who stood by silently as bank representatives made claims that were false, misleading, or worse?

 

Only now, because of superb analysis done by Bloomberg reporters—who litigated against the Fed and the banks for years to get the information—are we getting a full picture of the Fed and Treasury lending. The reporters also calculated that recipient banks and other borrowers benefited by approximately $13 billion simply by taking advantage of the “spread” between their cost of capital in these almost interest-free loans and their ability to lend the capital.

 

In addition to the secrecy, what is appalling is that these loans were made with no strings attached, no conditions, and no negotiation to achieve any broader public purpose. Even if one accepts the notion that the stability of the financial system could not be sacrificed, those who dispensed trillions of dollars to private parties made no apparent effort to impose even minimal obligations to condition the loans on the structural reforms needed to prevent another crisis, made no effort to require that those responsible for creating the crisis be relieved of their jobs, took zero steps towards the genuine mortgage-reform that is so necessary to begin a process of economic renewal. The dollars lent were simply a free bridge loan so the banks could push onto others the responsibility for the banks’ own risk-taking.

 

If ever there was an event to justify the darkest, most conspiratorial view held by many that the alliance of big money on Wall Street and big government produces nothing but secret deals that profit insiders—this is it.

 

So what to do? The revelations of the secret loan program may provide the opportunity for Occupy Wall Street to suggest a few concrete steps that would be difficult to oppose.

 

First: Demand a hearing where the bank executives have to answer questions—under oath—about the actual negotiations, or lack thereof, that led to these loans; about the actual condition of each of the borrowing banks and whether that condition differed from the public statements made by the banks at the time.

 

Second: Require the recipient banks to use this previously undisclosed gift—the profit they made by investing this almost interest-free money—to write down the value of mortgages of those who are underwater. The loans to the banks were meant to solve a short-term liquidity problem, not be a source of profits to fund bonuses. Take back the profits and put them to a public use.

 

Third: Require the government officials responsible for authorizing these loans to explain why there was no effort made to condition these loans on changes in policy that would protect the public going forward.

 

Fourth: Ask congress to examine every filing and statement made to Congress by the banks about their financial condition and their indebtedness to see if any misrepresentations were made in an effort to hide these trillions of dollars of loans. Misleading Congress can be a felony, and willful deception of the Congress to hide the magnitude of the public bailouts should not go unprosecuted.

 

Finally: Demand that politicians return all contributions made by the institutions that got hidden loans. Pressure the politicians who continue to feed from the trough of Wall Street, even as they know all too well how the banks and others have gamed the system and the public.