October 06, 2008

60 Minutes on the Shadow Banking Debacle and $50 trillion credit default swap nuclear bomb



What's really frustrating was that there were so many whistle blowers on what was going on, in 2003, 2004, 2005 and 2006. And yet Congress and the Fed did nothing to stop it.

I don't know what else we could have done.

Great report on 60 minutes. But again doing what they do best - reporting the car crash after the ambulances have left. And in the meantime, not one Congressional investigation to get to the bottom of this mess.


39 comments:

Anonymous said...

Buh buh buh I thought that ultraliberal states had the socialism that ever sheeple should aim for. What happened?

I guess all those union-ultraliberal-welfare-democratic party-Pelosi-Barney Frank goodies aren't working so well in CA and MA, huh?

Hey, but I gotta a brilliant idea, as Michelle Obama was defending on her speech on the DNC convention, let's give American citizenship to 20 million illiterate illegals from third world countries, first thing in Jan 2009, and then put them and their gazillion babies on univeral healthcare paid by middle-class. After all, the rich can always hide their income in tax-free munies.

California bankrupt, New York bankrupt, Massachusetts bankrupt...hey but let's use their ultraliberal model for the entire country, geniuses:

(Bloomberg) -- Massachusetts plans to sell $750 million in short-term notes this week, leading state and local governments seeking to revive debt sales after financial turmoil inhibited their ability to borrow since mid-September.

Massachusetts approached the U.S. Treasury about possible financing if it can't raise the money from private investors. California, seeking to borrow $7 billion next week, also has communicated with federal authorities, with officials saying they may run out of cash by month-end without the funding.


Hey, but they have gay marriages and iPhones; that's what's important!

Faith no more said...

How very very enlightening this piece is. I don't know about anyone else, but I just felt my eyes go POP - WIDE OPEN - when I watched that. No more stupid, trusting, blind faith in the government, the open market, or the 'system'.
Shadow, covert, undetermined, unknown, use a different term to avoid regulation....
The mafia itself was never so brilliantly devious as these thieving crooks.

Mitesh Damania said...

I could've told you 2-3 years ago the stock market and real estate prices weremn't sustainable and there would be a massive collapse.

Where's my $100 million?

Anonymous said...

When are you morons going to stop trusting the corporate media??!

When are you morons going to stop trusting the corporate political parties??!

WAKE THE F*CK UP!!!

xxxooo said...

the last 30 seconds finally brought up the point that these guys are criminals; that's why I don't support regulations; I support putting these guys in jail; but then maybe we'd all be in jail.

Anonymous said...

I rather have the freaking Mafia in charge then have Politicians and Wall Street Greed in charge. These bastards have created an unprecedented crises. People could very well die from starvation depending on how deep this recession or depression will be.

Anonymous said...

The shadow banking credit default world should just crash and burn .
Now this big Casino world is crying for a bail out .

The next move of the unregulated is to claim they now agree to be regulated ,so please bail me out .
Again this is a after the fact attempt to get money from the government on a absurd casino bet
on high leverage accounts .

This is getting crazy by the minutes . Again the game players wanting to change their position
on the taxpayers dime .

Any attempts on Paulsons part to rescue this world is crooked ...
oh,... I forgot AIG already got a loan from the Treasury .Get Paulson out of there NOW .

Anonymous said...

Pray that this shit doesn't get any worst. Were going back to pre-historic times!

Anonymous said...

The mess was a crooked scheme by the crooked high rollers ,who were gambling with others peoples money .
Let the lawsuits begin instead of
the government Bail Outs of crooks .

Anonymous said...

There has to be jail time for these people. We need to start rounding up some of these folks!

Anonymous said...

Holy shit Keith,

Read this:

http://tinyurl.com/43x4zs

Anonymous said...

Of course. Who do you think benefits from the CDS market? Why do you think prices overall went up so much over the last 20 years? Weird thing is, a small drop can be big trouble. A 5% drop can be enough to take housing prices down maybe 20% or so, for example. The $50 trillion isn't real money or debt at all, it's basically a conduit to drive up prices. Go look at the OCC if you don't beleive me.

patrat said...

OK how do we press for the criminals to be prosecuted. What is the best way? In 30 days we will elect somebody. But then who will actually take charge between then and the 20th of Jan.? Seems like we could be pretty much in freefall then.
What do you think is the best move for we the people who have gotten screwed? Do we write our congressmen? Do we vote them out? Do we call our attornies general in every state? Do we create a class action lawsuit? Do we try to take it to the Supreme Court? There are a lot of criminals in this super gambling game. Poor Mom and Pop. We need to go after these people, we need to clean up the financial industry and we also have to stop the practice of simply changing words to change the rules.

Anonymous said...

.
I am absolutely the Dumbest Shit you'll ever meet...
but I can balance my checkbook to the penny!

Starting about three years ago I saw what was going on...

No Doc loans?

No proof of anything even citizenship?

Interest only?

110% financing....?

and I knew this was unsustainable, a sham, a lie, fraud on the Grandest of scales!

Why could I see this then and the High educated Assholes couldn't....or wouldn't?

I am a self taught mechanic, but because of my education level I am insignificant!

Where's my F'ing millions?


.

Frank@Scottsdale-Sucks.com said...

Interesting that in today's hearings they refused to call former Fannie and Freddie executives.

Gee is it because they work for Obama now and are major donors to him, and the Dems are running the show?

Hmm, gee, I wonder....

Frank@Scottsdale-Sucks.com said...

Hey, but I gotta a brilliant idea, as Michelle Obama was defending on her speech on the DNC convention, let's give American citizenship to 20 million illiterate illegals from third world countries, first thing in Jan 2009, and then put them and their gazillion babies on univeral healthcare paid by middle-class. After all, the rich can always hide their income in tax-free munies.

That's the smartest thing Obama could do for himself and his cronies. That would tip enough states over to blue that it would be impossible for a Republican to ever win another presidential election again under our current winner-takes-all electoral system.

Here in CA they're broke but there are a bunch of ballot propositions this year (something the Founding Fathers never wanted) that would spend billions more on green global warming bullshit. Unbelievable. How about throwing out the illegals and eliminating entitlements to raise the money instead?

Anonymous said...

Holy shit Keith,

Read this:

http://tinyurl.com/43x4zs


NO NO NO. You don't off your family and yourself. I am all for people reducing the population of the earth by offing themselves, but take someone that truly deserves it with you. Angelo Mozilo comes to mind, and I wasn't even trying. OK, I can see the mother in law. But the kids???

Tonto said...

Whoever posted: http://tinyurl.com/43x4zs

That is nuts! I imagine we might see more of this kind of thing.

The guy had a masters and worked at Price Waterhouse, nuts!

Carolyn and Michael Wood said...

http://meganmcardle.theatlantic.com/archives/2008/10/how_did_it_all_happen.php

patrat said...

Just a rock, just a rock, just a rock. Just a bird, just a bird, just a bird. Some of you who are about my age and have lived near the Canadian border will know what I mean.

Anonymous said...

Hey, but they have gay marriages and iPhones; that's what's important!
----------------------------

and the red sox are in the playoffs.

Anonymous said...

When are you morons going to stop trusting the corporate political parties??!

WAKE THE F*CK UP!!!
---------------------------------

but obama is different!

Anonymous said...

Holy shit Keith,

Read this:

http://tinyurl.com/43x4zs
------------------------------------

he probably heard about the GSEs forgiving the mortgage of the old woman in Ohio who tried to kill herself because they were going to take her home away from her.

AZDavidPhx said...

Disgusting. I am ashamed.

Anonymous said...

How do you fix a shadow banking debacle.

How about a shadow rate cut.

Shouldn't that make Yen Carry Trade unwind faster, and the Yen stronger as speculators and hedge fund managers are forced to buy back the Yen to cover their Yen Carry Trade positions.

http://www.bloomberg.com/apps/
news?pid=20601103&sid=aSiAeDH_
QZtk&refer=us

Fed Sets Floor Below Rate Target, Engineering `Stealth' Cut

The Federal Reserve may have cut borrowing costs today without actually saying so.

The central bank used authority granted under last week's financial-rescue legislation to effectively set a floor under its main interest rate that's lower than the 2 percent target set by policy makers last month.

The Fed may now pay interest on bank reserves while it floods financial markets with liquidity, pushing down the overnight lending rate by about 0.75 percentage point to 1.25 percent.

Anonymous said...

Don't need to hear a slimy evasive thing the ISDA guy says. The contemptuous smirk and challenging cocked-eyebrow scream "What the FUCK will you do about it, punk?"

BWAHAHAHAHA

Anonymous said...

Will Yen Carry Trade continue to unwind.

http://www.bloomberg.com/apps/
news?pid=20601101&sid=a0hb
H1BpkHaE&refer=japan

The yen traded near a three-year high against the euro on speculation a deepening credit crisis and stock-market slides will encourage investors to sell higher- yielding assets and pay back low-cost loans in Japan.

The yen gained against all of the 16 most-active currencies as shares extended declines, after more than $2 trillion of market value was erased worldwide yesterday.

``Investors are panicked right now, said Ryohei Muramatsu, manager of Group Treasury Asia at Commerzbank AG in Tokyo. ``The yen is being bought as a safe-haven currency because Japan is perceived as the least affected by the subprime crisis.''

realist said...

Keith,

If it weren't for this bizarre curse that I have called e.s.p., I would say that everything is going to be o.k.. But I 'saw' a major event recently and, if it's true, something very bad is going to happen soon.

The imagery that I 'witnessed' was, to say the least, cataclysmic. From what I could tell, it takes place in NYC but it could be another large and densely packed US city, but I was almost positive it was NYC due to the density of the buildings and the people I saw.

It's very bad, and the imagery reminded me of pictures I've seen of Hiroshema. What I 'saw' were bombed out buildings that were leveled for blocks. Some were still standing but whole city blocks looked crushed and crumbled. That could also be interpreted as our economy exploding (but I'm not so sure).

It came to me in a much different way than the soul rattling dream I had about NYC back in August of 01 so I'm hoping that it's just a 'blip'. If it is a blip I will forever hang my head in shame for even admitting this publicly on HP.

I can't predict a day but usually my 'sightings' happen within a month and this one took place last Friday (the 3rd).

Be safe out there.

The Realist

Anonymous said...

Conservative governments always seem to be corrupt. With a bit of luck the worst president in American history is on his way out the door, and some non-conservative types will take over.

Anonymous said...

"Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."

President Andrew Jackson 1832

http://www.nolanchart.com/
article5136.html

Anonymous said...

Can the TED SPREAD stay at these level for another two to three weeks.

http://money.cnn.com/2008/10/06/markets/bondcenter/credit_markets/?postversion=2008100613

Credit markets were still choked Monday, as the financial crisis spread throughout Europe and stock markets around the world tumbled.

The TED spread was at 3.78 percentage points and had reached as high as 3.95 points earlier Monday, setting another record, after moving as high as 3.88 points Friday. The TED spread was only 1.04% on Sept. 5.

Anonymous said...

MarketTicker... the dude goes OFF

Anonymous said...

Bank of America Corp. will cut its dividend by 50 percent and third-quarter profit fell 68 percent.

Bank of America profit dropped to 15 cents a share, in the quarter ended Sept. 30, from 82 cents, in the same period last year.

http://www.bloomberg.com/apps/
news?pid=20601087&sid=
aD1NL1agvVh8&refer=home

Anonymous said...

Will this effort contain Excess Global Liquidity from Yen Carry Trade.

http://www.bloomberg.com/apps/
news?pid=20601087&sid=
aTS7Mz0crKx8&refer=home

Australia's central bank cut its benchmark interest rate by one percentage point, the most since a recession in 1992.

Today's cut to 6 percent, twice as much as most economists forecast

http://www.bloomberg.com/apps/
news?pid=20601101&sid=
aJ3lljrGrYLA&refer=japan

BOJ Says Economy `Sluggish,' Holds Key Rate at 0.5%

Anonymous said...

US bank JPMorgan Chase stands accused of precipitating the collapse of American investment bank Lehman Brothers by freezing Lehman assets days before it filed for bankruptcy protection.

Citing documents filed with a New York bankruptcy court late last week, the , the Sunday Times reported that Lehman creditors have accused JPMorgan of freezing $US17 billion ($22 billion) in cash and securities on Friday, September 12.

http://www.news.com.au/
adelaidenow/story/
0,22606,24451875-5005962,00.html
?from=public_rss

Anonymous said...

If allot more banks are going to fail despite the bailout shouldn't the TED SPREAD be wider.

Why would you lend money to someone who will not pay you back.

http://www.cnn.com/2008/US/10/05/
shaky.banks.ap/index.html?section
=cnn_latest

Here's a safe bet for uncertain times: A lot of banks won't survive the next year of upheaval despite the U.S. government's $700 billion rescue plan to restore order to the financial industry.

Ron said...

SNL skit on the bail out, oddly was deleted from the net and all questions about it are deleted on their forum. Why, well it is funny and there is too much truth in this? You want to see it, well ok then.

http://ohfaiw.notlong.com

This is the video of that skit, should be enjoyable to HPers.

Anonymous said...

"Conservative governments always seem to be corrupt. With a bit of luck the worst president in American history is on his way out the door, and some non-conservative types will take over."

Is that why the people of Wall St. vote 80% Democratic? Dumbass!

Anonymous said...

That ISDA guy??

A TALL TREE WITH A SHORT ROPE...

OR

THE GUILLOTINE!!