Bill Gross Releases Latest Monthly Outlook: The Lending Lindy

I'm shooting for tip over. The walls far exceed the foundation, so there's nothing there to support it. Have you ever seen a house that slid off it's foundation? It's very nasty to deal with and more often than not, the house has to be torn down and started over, and that's just what we got going on in the financial system. They cheated on the PSI (pounds per square inch) (think capital retained) of the concrete in the foundation (think how money is made)and then built a sky scraper on it,
If they'd have stuck to an average size house, we'd have seen a few cracks in time. A pain in the ass for sure, but still capable of function. The sky scraper on the other hand leans more and more daily, most people can't see it, but if you're a builder you can, and you know what out come is. It's going to drop as fast as the Twin Towers did, right out of the blue, except this time it doesn't go straight down like a controlled demo, this time it spread and is so heavy it takes everything surrounds it, with it.

Having operatied for years under ZIRP, and with the NIRP neutron bomb just around the corner, and already implemented in various European countries, one question remains: can banks be banks, i.e., can they make money, in a world in which borrowing short and lending long, no longer works, courtesy of ubiquitous and pervasive central planning which is now engaged solely and almost exclusively (the other central bank ventures being of course to keep FX rates and equities within an acceptable range) on the shape of the yield curve. Since 2009 our answer has been a resounding no. Today, Bill Gross speaks up as well, and his answer is even more distrubing: "If the dancing has slowed down, then the reason is not just an overweight partner. It’s that the price of money (be it in the form of a real interest rate, a quality risk spread, or both) is too low. Our entire finance-based monetary system – led by banks but typified by insurance companies, investment management firms and hedge funds as well – is based on an acceptable level of carry and the expectation of earning it. When credit is priced such that carry is no longer as profitable at a customary amount of leverage/risk, then the system will stall, list, or perhaps even tip over." Indeed, according to Gross central banks have now clearly sown the seeds of the entire financial system's own destruction. That he is right we have no doubt. The only question: how soon until he is proven right.

From Bill Gross of Pimco

The Lending Lindy

Conspiracy of Banks Rigging States Came With Crash

http://www.bloomberg.com/apps/news?pid=20601109&sid=axH24KWxjVDE&pos=10

No nothing to see here because the Justice Dept made a deal, to only prosecute the peons rather than the banks
This makes it rather obvious just WHO destroyed the World's financial system and how they ALL did it.
The question is why is the Mafia prosecuted while "the banks" are allowed to consider it business as usual and get away with it?
Why are they given AMNESTY? Because they OWN the government


May 18 (Bloomberg) -- A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.

The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory firm CDR Financial Products Inc. Goldberg arranged to pay a kickback to CDR to land the deal, according to government records filed in connection with a U.S. Justice Department indictment of CDR and Wolmark.

[B]They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money[/B].

[B]Amnesty Agreement

In exchange, the government promised in an amnesty agreement not to prosecute the bank[/B]

Treasury seeks to protect federal benefits: report

http://finance.yahoo.com/news/Treasury-seeks-to-protect-rb-2174460080.html?x=0&sec=topStories&pos=7&asset=&ccode=

This is how bad the lying banks want money, and they intend to take it to.

The Treasury department will release new rules on Wednesday that would prevent banks from seizing a borrower's social security to recover unpaid debt, the Wall Street Journal said.

The proposed new rules, to be published in the Federal Register, will require banks to check if the borrower has received any direct deposits of federal benefits within the past 60 days, the Journal said.

In case the borrower had received a federal benefit then the new rule would require the banks to establish a protected amount equal to the sum of the benefits deposited, the paper said.

Congress endorses FRAUD?

http://market-ticker.denninger.net/archives/2171-Now-Its-Front-Page-Banks-Lie.html

The question is: Did Congress realize just what it was endorsing and if it did just what does that mean.

Well gee, finally someone in the "mainstream media" writes about it?

A group of 18 banks—which includes Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.—understated the debt levels used to fund securities trades by lowering them an average of 42% at the end of each of the past five quarterly periods, the data show. The banks, which publicly release debt data each quarter, then boosted the debt levels in the middle of successive quarters.

The article points out that this is legal. Is it?

Isn't fraud all about intent to mislead?

Since then, banks have become more sensitive about showing high levels of debt and risk, worried that their stocks and credit ratings could be punished.

That practice, while legal, can give investors a skewed impression of the level of risk that financial firms are taking the vast majority of the time.

So let's see if I get this right:

•Since The Federal Government made lying about balance sheet assets legal, banks have done a lot of that. Indeed, none other than John Dugan Office of the Comptroller of the Currency (OCC) testified yesterday that the marks being taken are unrealistic - that is, banks are overstating the value of their assets, when under questioning before the FCIC he said out loud what I've been saying for over a year: we know banks are lying because when they fail and the FDIC closes them we discover that their so-called "assets" are worth as little as half of what they've been claiming just a few weeks or months before.


•On average these institutions are taking 42% more risk to produce the "returns" they're posting at each quarter's end. Put a different way the firm's operating results are enriched on paper by 40% over what they would be in terms of common accounting ratios were the bank NOT to play these games. Or, if you prefer, were the bank not to use those schemes their results would probably be about 40% poorer - and indeed, a reported "profit" would likely be an actual operating loss.

Moves to Garnish Pay Rise as More Debtors Fall Behind

http://www.nytimes.com/2010/04/02/business/economy/02garnish.html?src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fbusiness%2Findex.jsonp

The gratitude of the greedy.

When the bank sued Leann Weaver for not paying her credit card balance, her reaction was typical for someone in that situation. Personal and financial setbacks weighed her down, and she knew she owed the $2,470. So she never went to court to defend herself.


She was startled by what happened next. When she swiped her debit card at the grocery store, it was declined. It turned out Capital One Bank had taken $224.25 from her paycheck, a quarter of her wages for two weeks of work at a retail chain, and her bank account was overdrawn.

“They’re kicking somebody who’s already in the dirt,” she said.

SEC quizzes US banks over accounting practices

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7536683/SEC-quizzes-US-banks-over-accounting-practices.html

Hey.... are you guys doing that to?
Lol NOW THEY ASK
Shouldn't they already KNOW the answer to that question?
Any bank that took TARP money should submit to an auditing of their books now
"The letter" leaves it open for self regulation again, and hiding and avoiding secrets is their favorite game.


The US’s leading financial regulator is quizzing major Wall Street banks and insurance firms to ensure that they are not using the secretive off-balance sheet techniques which in part led to the downfall of Lehman Brothers.


The SEC has sent letters to the chief financial officers of the US’s 24 biggest financial institutions to ensure that such techniques have not and are not being used.

The requests demand specific information about the use of repurchase agreements, as well as for how such agreements are accounted for and disclosed to investors.

Another "Housing" fix

http://market-ticker.denninger.net/

Looks like another "fix" is in the works.
And no it can't work either
This is starting to remind me of the TV show "House". How many procedures can "WE" try before "WE" finally narrow it down to the "Right symptoms" and gain the collective understanding that there is only one way to fix "the patient", who by now by the way, is always on his last leg and laying in his death bed, waiting to pass over.
Obama's fix is just another eppi to the heart, yours mainly, he wants you to know how much he cares by giving you this compassionate gesture, that can't and won't go anywhere.
It will not start the beat of the heart, because the banks don't have one, as well as legs to stand on if "the patient" is actually fixed. The banks are nothing but the value of their paper, and if their paper (your house) is worth less than so is the bank. Now multiply that times millions and you can really see how piss poor the banks really are.


The Obama administration plans to announce programs to help homeowners avoid foreclosure, including subsidies for borrowers who owe more than their home is worth.

This sounds like homeowners will get some "free money" gifted to the banks so as to make them "not underwater" and thus avoid foreclosure. Well, it is - to a point. (If you were one of the people who put down 20% during the boom and was prudent in your use of debt, are you angry yet? You should be!)

The new plan would increase payments to lenders that modify second mortgages, an official said. Banks’ unwillingness to write down second liens has helped block efforts to prevent foreclosures, said Josh Rosner, managing director at Graham, Fisher & Co. The Washington Post reported earlier on the administration’s plan.

Banks aren't unwilling, they're unable. Look, this has been true since this crisis began - the banks - especially the big banks with lots of these loans - are insolvent if they recognize the "value" of this paper.




Absolutely none of the attempts made thus far have had a damn thing to do with helping Americans, and this "new program" is no exception. They have all - each and every one - been aimed at one and only one thing - allowing banks and the GSEs to LIE about the "value" of the home loans they hold.

IMF calls for new body to save taxpayers from burden of failing banks

http://www.guardian.co.uk/business/2010/mar/19/imf-save-taxpayers-failing-banks


Dominique Strauss-Kahn of IMF says new body would force shareholders and creditors to bear costs of bank failure


The International Monetary Fund has called for a European "fire brigade" funded by the finance industry to deal with the collapse of banks that operate in several countries.

Managing director Dominique Strauss-Kahn urged the European Union to create a European resolution authority to deal with insolvent banks that would force shareholders and uninsured creditors – rather than taxpayers –to bear the costs of failure. The authority would be funded by the financial industry from deposit insurance fees and levies on institutions, he said.

"What I think is needed is a European resolution authority, armed with the mandate and the tools to deal cost-effectively with failing cross-border banks – an ex-ante [before the event] solution to the problems that currently hamper co-operation in crisis situations, rather than an ex-post one," Strauss-Kahn told a conference in Brussels today.

"It should cover at least the major cross-border banking groups, as well as all banks running large-scale cross-border operations under the single passport."

It sound all good until I read this
That government burden sharing is more taxpayer funding

The system would need access to a fiscal back-up mechanism, he said, with a mechanism of burden-sharing between governments.

As banks binged on risky mortgages, govt rewarded regulators with taxpayer-funded bonuses

http://finance.yahoo.com/news/Govt-rewarded-bank-auditors-apf-3698670682.html?x=0&sec=topStories&pos=6&asset=&ccode=

Gee I wonder if we can demand a refund on the grounds of piss poor job preformance.
There must be a job opening for the Office of Thrift Supervision, because I don't see any being applied.

During the 2003-06 boom, the three agencies that supervise most U.S. banks -- the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency -- gave out at least $19 million in bonuses, records show.

Nearly all that money was spent recognizing "superior" performance. The largest share, more than $8.4 million, went to financial examiners, those employees and managers who scrutinize internal bank documents and sound the first alarms. Analysts, auditors, economists and criminal investigators also got awards

Foreclosure rates up by smallest amount in 4 years

http://finance.yahoo.com/news/Foreclosure-rates-up-by-apf-1830270269.html?x=0&sec=topStories&pos=2&asset=&ccode=


The foreclosure crisis isn't over, but the pace of growth may finally be slowing down.

RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years.

More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, Calif.-based foreclosure listings company reported. That was down more than 2 percent from January

Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.

It's premature to declare victory just yet," said Rick Sharga, a RealtyTrac senior vice president for RealtyTrac. He did, however, allow that, "If this is the beginning of a slowdown in growth rates, that would be a good thing."
,
Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.

U.S. Report Details Money Laundering

http://finance.yahoo.com/banking-budgeting/article/108758/u-s-report-details-money-laundering?sec=topStories&pos=6&asset=&ccode=

Is there any part of the financial system that doesn't need fixing?, because if there is I can't see it.

A suitcase containing $1 million in shrink-wrapped bills, hand-carried into New York by the former president of Gabon for his daughter to buy a Manhattan apartment. Purchases of a stretch Hummer H2 armored limousine and C-130 Hercules military transport planes for a civil war in Angola. And a shell company named Sweet Pink used to funnel millions of dollars into the United States from Equatorial Guinea.


These and other deals and money transfers took place in recent years because of inadequate controls on money laundering at large American banks and unregulated American lawyers, real estate agents and lobbyists, according to a Senate report released late Wednesday.

The 325-page report by the Permanent Subcommittee on Investigations, which will conduct a hearing on Thursday, sheds new light on how banks like Citigroup, Wachovia and Bank of America unwittingly shifted hundreds of millions of dollars on behalf of African politicians, their relatives and associates.

The banks ended up closing or restricting the accounts and cooperated with the subcommittee, offering comments on individual transactions.

In all cases, the Senate report says, the banks ignored controls intended to prevent money laundering and related screens on PEP, meaning politically exposed persons — high-risk clients from corrupt countries.

The report recommends strengthening regulations against money laundering at banks and revoking exemptions for lawyers and other third parties from restrictions on money laundering in the USA Patriot Act. It recommends that Congress pass laws requiring people who form corporations to disclose the true owners.

Where's the breaking point?

http://market-ticker.denninger.net/archives/1683-Wheres-The-Breaking-Point.html

I truly believe in the phrase "Do unto others as you would have them do unto you"
But I have hit my personal breaking point, We as a "People" are not dealing with other human entities during this financial crisis. We are dealing with corporations and government authority that have all the human compassion of a cyborg.....in other words, they possess NONE.

These machines that we are forced to deal with are rated so highly above the average human that they are not held responsible, nor prosecuted for their crimes of treason against our countries, and yes I say countries because "WE" all have been victimized and forced into poverty for the sake of their actions world wide, While they continue to be rewarded for the very actions that has allowed this calamity to occur and are held in such high esteem by all of our prevailing governments, that they are now allowed to lead and make policy for all of our countries.
It's time to tilt their game people and end this scourge of com passionless cyborg policy upon mankind.



This is a serious question to all readers of The Market Ticker.

Where is your personal breaking point?

No, I'm not asking how far you have to be pushed before you "go postal" and commit random acts of violence. That's not a question to ask in polite company, even though for virtually everyone, there is such a point.

No, I'm asking how much abuse you have to have personally served upon you by the banksters and other scam artists in this country before you have had enough, and start doing unto the other guy - because he has done you.

As an example:

Banks no longer even pretend
The one silver lining is that the public is finally seeing how devious and untrustworthy credit card lenders truly are. When issuers limited themselves to beating up on folks with bad credit, it was too easy for the rest of us to dismiss their foul tactics as business as usual. Now that the schoolyard bullies are going after everyone, the need for putting restraints on the industry is ever more obvious.

Really?

We tried asking the government - that is, the law - to intervene. The Fed was supposed to be the guardian of the system, remember? The government and Fed both refused, bowing instead to the den of vipers and thieves.

It is therefore up to us as citizens to make a decision on our own as to whether we will allow such conduct to stand.

How many of you will, in response to "rate jack" letter announcing your credit card now carries a 29.9% interest rate, when you are not a deadbeat, choose to intentionally charge that card up to the rafters and then mail the bank a picture of your middle finger instead of a check?

How many of you will, when given a "trial" modification on your mortgage that the bank refuses to convert in good faith to a REAL modification plan, will simply stop paying entirely, but NOT leave the house - force 'em to file the foreclosure and eviction notice, and live for free in your home until they do? You will probably be able to stay in your house FOR A YEAR OR MORE, since the bank doesn't want to ADMIT to the extent of THEIR loss!

How many?

Hot Money: For Banks, Wads of Cash and Loads of Trouble

http://www.nytimes.com/2009/07/04/business/04brokered.html?_r=1&ref=global

H. Averett Walker used hot money to turn Security Bank from a sleepy Southern lender into a regional powerhouse. Darrell D. Pittard used hot money to jump-start his brand-new MagnetBank, allowing it to lend hundreds of millions of dollars even though it did not have a single drive-up window or even a customer with a checking account.

It is a formula being replicated at banks across the United States.

Rather than simply wooing local customers, they have turned to out-of-state brokers who deliver billions of dollars in bulk deposits, widely known as “hot money,” from investors nationwide. In fast-growing regions like this one in central Georgia, the money produced record bank profits and financed whole new communities, built at a phenomenal rate.

But the hot money also came with a high cost. To lure the money from brokers, banks typically had to offer unusually high rates. That, in turn, often led them to make ever riskier loans, leaving them vulnerable when the economy collapsed. Magnet failed early this year and Security Bank is barely hanging on.

Though few people have heard of it, hot money — or brokered deposits, as it is also known in the industry — is one of the primary factors in the accelerating wave of failures among small and regional banks nationwide. The estimated cost to the Federal Deposit Insurance Corporation over the last 18 months is $7.7 billion, and growing.

Standard & Poor's cuts ratings on 22 banks

http://finance.yahoo.com/news/Standard-amp-Poors-cuts-apf-15548167.html?sec=topStories&pos=7&asset=&ccode=

There is the truth of the story in those two paragraphs and it holds true for every bank even the ones paying back their TARP loans.

Credit ratings agency Standard & Poor's on Wednesday cut ratings and revised outlooks on 22 banks amid concern about further weakening in the financial sector.

S&P said the changes reflected its assessment that volatility will remain in the financial sector and the industry is expected to face tighter regulatory oversight. S&P also said loan losses, which have plagued the industry for more than a year, are likely to continue to increase and could grow beyond expectations

The Second Crash -On the Way and Unstoppable

http://www.321gold.com/editorials/casey/casey052909.html


Tuesday, October 9, 2007 started as a nice day in New York City. A lovely early fall day, with the temperature still a balmy 80° at 2:00 in the morning. By evening, though, the temperature had dropped twenty degrees, the clouds had rolled in, there was thunder and rain.

As with the weather, there were some hints of trouble here and there on Wall Street. But all in all, things could not have seemed better. Little did we know, the stormy end of 10/9/07 signaled a very large bubble that had just popped.

That was the day when the Dow Jones Industrial Average hit its historic peak. From there, it was all downhill - slowly but steadily at first, and then violently after last August - until the Dow bottomed (for now) on March 9 of this year. Over that span, the index lost 54% of its value.

It's been a crushing blow to just about everyone. But it's already being referred to as the crash. As if the unpleasantness were now all behind us. More likely, in the future it will be seen as, simply, the first crash.

Don't believe it? In a moment you will, when you see the scariest graph of the year.

But let's quickly recall

Americans Aren't Here to Serve the Banks, They're Here to Serve Us

http://finance.yahoo.com/tech-ticker/article/242629/Elizabeth-Warren-Americans-Aren't-Here-to-Serve-the-Banks-They're-Here-to-Serve-Us?tickers=SKF,XLF,FAS,C,JPM,WFC,GS



Bailout monitor Elizabeth Warren says the U.S. government "shows strong improvement" from the early days of TARP, when $350 billion was "shoveled into financial institutions" with a "no strings attached" and an attitude of "take my money, please."

The chair of the Congressional Oversight Panel was fairly complimentary of Treasury Secretary Tim Geithner, certainly in comparison to his predecessor in three key areas: transparency, accountability and clarity of purpose for various programs.

But "we started in the basement", she says, in terms of both the government's handling of the bailouts and the public's confidence in how taxpayer money was being spent. The Harvard law professor gives the government an “incomplete” for its handling of the bailouts, up from an early failing grade.

"It's better than it was but I'm still wanting more," Warren says, suggesting a fundamental issue remains unresolved: "Is this all about ‘we've got to fix problem at the top [and] boost high-end financial institutions' or about 117 million American households who really are in trouble?"

The reality of what's real

http://www.minyanville.com/articles/...541/from/yahoo

I always like the truth in a nutshell


As more and more traders and investors view the recent rally through the eyes of technicals, we are closing in on the completion of the bear trap. Human beings are inductive: they see things and their preexisting views are reinforced by them. Rising prices beget rising prices until facts finally exact their toll. People assume others know what they're doing.

I came out of the airport terminal to grab a cab one night. The line was two hours long. The last person in line assumed the person in front of them knew what they were doing and resigned their fate with the rest. I decided to take a five minute walk to the next terminal, where I grabbed a cab immediately.

If people really did hard analysis on the current environment they would take a much different view. The Fed's balance sheet is not only irreparably massive, it is a mess with credit risk. When you hear people saying credit is improving, it can clearly be shown that the only areas of improvement are where the Fed has stepped in and become the market. The Fed has reduced transparency, not increased it.

Take any category where credit has improved and you will see that the Fed has taken and retains massive positions: Bank Credit Reserves increased over last year by $1.3 trillion, Agency Securities $70 billion, Mortgage Backed Securities $356 billion, Term Credit (LIBOR, the real headliner) $456 billion, Commercial Paper $238 billion (this market has shrunk dramatically so the Fed is basically the whole market),