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Posts Tagged ‘disclosure’

SUPREME COURT RULES FED MUST RELEASE ALL BAILOUT DATA

Courtesy of The Daily Bail

Video – The Fed has 5 days to release all data.

March 21 (Bloomberg) — The Federal Reserve must disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.  The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg.

A huge win for transparency.

Statement from Matthew Winkler, editor in chief of Bloomberg News:

As a financial crisis developed in 2007, "The Federal Reserve forgot that it is the central bank for the people of the United States and not a private academy where decisions of great importance may be withheld from public scrutiny.  The Fed must be accountable to Congress, especially in disclosing what it does with the people’s money."

“The board will fully comply with the court’s decision and is preparing to make the information available,” said David Skidmore, a spokesman for the Fed.

The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed’s unprecedented $3.5 trillion effort to stem the 2008 financial panic.

“I can’t recall that the Fed was ever sued and forced to release information” in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in Pittsburgh.

Continue reading at Bloomberg… 


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Green Mountain Coffee Roasters: Calling a Bean, a Bean

To Err is Human, To Disclose Divine.

Courtesy of Sam E. Antar with Ilene

Green Mountain Coffee Roasters (NASDAQ: GMCR) is currently under the scrutiny of the Securities and Exchange Commission (SEC) and is facing numerous class action lawsuits alleging securities fraud. In particular, plaintiffs are alleging false and misleading disclosures in violation of federal securities laws.

One troubling issue is that when Green Mountain initially disclosed an accounting error concerning its K-Cup margin percentages, it claimed that the error was “immaterial.” Material and immaterial errors are treated differently.  If an accounting error is immaterial, a public company is required to correct it by making a one-time cumulative adjustment to earnings in the latest quarter. If an accounting error is material, a public company is required to notify investors that its previous financial reports cannot be relied on and that it will restate its affected financial reports to correct that error.

Background

On Monday, September 20, 2010, the SEC notified Green Mountain Coffee Roasters that it was conducting an informal inquiry. It requested information concerning “revenue recognition practices and the Company’s relationship with one of its fulfillment vendors.” Eight days later, on September 28, 2010, Green Mountain surprised investors by disclosing news of the SEC inquiry in an 8-K filing. In that 8-K report, Green Mountain also disclosed that it discovered an "immaterial accounting error" affecting financial reports issued from 2007 to June 26, 2010:

In connection with the preparation of its financial results for its fourth fiscal quarter, the Company’s management discovered an immaterial accounting error relating to the margin percentage it had been using to eliminate the inter-company markup in its K-Cup inventory balance residing at its Keurig business unit. Management discovered that the gross margin percentage used to eliminate the inter-company markup resulted in a lower margin applied to the Keurig ending inventory balance effectively overstating consolidated inventory and understating cost of sales. Management determined that the accounting error arose during fiscal 2007 and analyzed the quantitative impact from that point forward to June 26, 2010.

As of June 26, 2010, there is a cumulative $7.6 million overstatement of pre-tax income. Net of tax, the cumulative error resulted in a $4.4 million overstatement of net income or a $0.03 cumulative impact on earnings


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2 Big 2 Foreclose--Is The Subprime End Game Approaching?

How big is the foreclosure mess? Big. Here’s WB7′s perspective. 

2 Big 2 Foreclose--Is The Subprime End Game Approaching?

Courtesy of williambanzai7 at Zero Hedge

MG

THE MIDDLE GAME QUAGMIRE

After a bad opening, there is hope for the middle game. After a bad middle game, there is hope for the endgame. But once you are in the endgame, the moment of truth has arrived. – Edmar Mednis (Grandmaster)  

I have one central thought of where this fraudclosure fiasco could lead, and this is why everyone should watch very carefully how the various players move their pieces in this subprime middle game.

Up until now, the banks have been making sweeping statements that this all reflects a "technical" glitch in foreclosure processes.

Well, having a posse of State AGs band together to commence a joint investigation is no longer a minor "technical" glitch. Allegations of masses of forged signatures, falsified or fabricated notarized documents,  back dating etc., if true, collectively amount to an institutional pattern of criminal behavior. Having the Justice Department announce it is opening a preliminary investigation raises the stakes even higher.

Being forced to suspend all foreclosures has obvious "material" economic consequences to the CDO note holders.

But having title companies pull out of the residential real estate market because they no longer trust the veracity of bank provided documents presages claims by mortgagors who lost their properties as well as the subsequent purchasers of same. The only way to conclusively cure that kind of problem is to get waivers, and releases from the various claimants wherever they may be or pass retroactive curative laws or laws doing things like creating a bailout fund to indemnify those who are injured (yikes!). You cannot simply say this is immaterial, sprinkle in the word MERS and hope this will all go away.

The CDO note holders will have potential claims stemming from the interruption of non-performing loan processing. Think breaches of the trust servicing agreements and allegations of "gross negligence or willful misconduct", the latter being magical legal hurdle in these types of agreements. However, the much…
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Ex-Fed Governor Mishkin Caught in ‘Pay for Say’ Over Icelandic Economy

"HE WHO LOSES WEALTH LOSES MUCH; HE WHO LOSES A FRIEND LOSES MORE; BUT HE THAT LOSES COURAGE LOSES ALL." MIGUEL DE CERVANTES

Ex-Fed Governor Mishkin Caught in ‘Pay for Say’ Over Icelandic Economy

Courtesy of JESSE’S CAFÉ AMÉRICAIN

The Icelandic Chamber of Commerce commissioned ex-Fed Governor Mishkin to write a glowing report on their economy, even while the country was being destroyed from within by a rogue banking system and a corrupt regulatory regime.

 

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New Short Sale Fraud Allegations: Second Liens

New Short Sale Fraud Allegations: Second Liens

Courtesy of Karl Denninger at The Market Ticker


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Bloomberg News is still after the Fed for more disclosure

Bloomberg News is still after the Fed for more disclosure

newsCourtesy of Edward Harrison at Credit Writedowns

Bloomberg News editor-in-chief Matt Winkler wrote an Op-Ed in the Wall Street Journal yesterday explaining why he is after the Federal Reserve to come clean about its secret lending program during the height of the financial crisis. 

Bloomberg has filed a lawsuit against the Federal Reserve to force the Fed to reveal the name of the banks it lent money to in this operation, something I first blogged about last November.  Last month, Bloomberg won its case in District Court. The Fed is now considering whether to appeal.

At issue is transparency in our financial system.  In the Op-Ed, Winkler puts it thus:

The law doesn’t allow the government to get away with secrecy based on a mere claim that some sort of damage would result if it released the information in question. To prevail, the Fed must "provide evidence that if the requested information is disclosed, competitive harm would be ‘imminent,’" Judge Preska wrote. The Fed must show that competitors would use against a bank the fact that it received federal dollars—that running to the government trough for sustenance would become a competitive disadvantage.

That isn’t an easy test, and with hundreds of billions poured into financial institutions, it shouldn’t be. What’s more, the Fed didn’t come close to meeting this test. All it offered in court were sworn statements from Fed employees speculating that borrowers might be labeled as losers. They said nothing about how competing banks might use the information.

The issue at stake here is understanding the financial crisis and its aftermath. The information Bloomberg is seeking is vital to that, and it belongs to all Americans. Bloomberg isn’t alone in saying so. Dow Jones, the New York Times, the Associated Press, Gannett Newspapers, Hearst, Advance Publications, and the Reporters Committee for Freedom of the Press have all expressed support for Bloomberg’s efforts and may join a friend-of-the-court brief if the decision is appealed.

Below is a Bloomberg News video in which Winkler discusses the case with Betty Liu. In his opening remarks, Winkler says the Fed was taking on an unprecedented role and that this requires transparency. 

I agree because the Fed has been politicized through these actions. Its independence is now threatened because of it as the Federal Reserve Transparency Act of 2009 attests.

 


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The Real Issue Behind Fed Secrecy: Lying

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Karl, on the Fed’s quest for secrecy – a few legal arguments…

The Real Issue Behind Fed Secrecy: Lying

Courtesy of Karl Denninger at The Market Ticker

Henry Blodget writes an interesting piece over at Businessinsider in which he cites Paul Kasriel of Northern Trust:

Today, we have federal deposit insurance Therefore, the probabilities and magnitude of depositor runs on banks are much reduced compared with 1933. Yet, we can see “runs” by stockholders and other creditors of banks if there is a suspicion of financial problems. If the Fed is required to  publish the names of financial institutions to which it has extended credit and this publication induces financial institutions to refrain from borrowing from the Fed, one can only speculate if this would be the tinder for another liquidity conflagration in the coming months.

CramerHow about a little honesty from commentators in the mainstream media?

"Liquidity conflagrations" happen when people discover they have been lied to.

Anyone remember Bear Stearns?  "We’re well capitalized" on CNBC?  "Everything is fine"?  Cramer’s pumping of them on his show as "safe"?

Market participants in fact knew everything was not fine.  There were statements flying around (that turned out to be true) that some counter-parties had begun refusing to novate deals with Bear. 

It was the discovery of the lie that caused the run on Bear Stearns and its ultimate collapse.

Likewise with Lehman.  Remember Dick Fuld’s "I’m gonna burn the shorts" comment, again, on CNBC and elsewhere in the National Media?

The truth got out: they were having liquidity problems.  Once again, as soon as people discerned that they were being lied to, Lehman’s fate was sealed.

The problem The Fed has is that as the supposed "risk regulator" for the American Banking System it has absolutely refused to do its job of prudential regulation and still is. Instead of demanding that its member banks hold capital against all unsecured lending it has "blessed" models rather than markets.  But at the same time it has declared "haircuts" against collateral that make clear that so-called "face value", or "par", is a farce.

liesThe Fed is supporting institutionalized lying – that is, the intentional…
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Here Comes THE JUDGE!

Here Comes THE JUDGE! **UPDATED** 

Courtesy of Karl Denninger at The Market Ticker

See also: Court Orders Federal Reserve to Disclose Emergency Loan Details, Bloomberg.

 
 


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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!

 
 

Zero Hedge

Russia is de-dollarizing

Courtesy of ZeroHedge. View original post here.

Submitted by Gold Standard Institute.

 

The ruble and other currencies do not compete against the dollar. They are dollar derivatives.

The dollar is headed to ruin, but that doesn’t mean that any other paper currency can replace it. The others will fail first.

The dollar will fail last.

 

The failure of the dollar, and the transition to gold happens to be the theme of an event The Gold Standard: Both Good and Necessary, in New York on Nov 1. There hasn’t been a real recovery from the crisis of 2008, and there won’t be until we return to the use of g...



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Chart School

Time for the Pullback?

Courtesy of Declan.

Sellers were going to make an appearance at some point and today was the day they paid a visit. Whether a larger pullback emerges will depend on events over the coming days, but today's selling did emerge at some natural attack points for shorts.

The S&P finished with a 'bearish cloud cover,' but it did manage to hold declining resistance turned support, and the 20-day MA has entered the fray as an area for bears to work. But this wasn't the most bearish of the indices, and today's finish actually gives bulls a long play tomorrow (for a bounce off support).  Technicals also suggest a bounce.


While the S&P may give bulls something tomorrow, th...

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Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Phil's Favorites

Larry Swedroe: Use Valuations for Expected Returns, Not Market Timing

Larry Swedroe: Use Valuations for Expected Returns, Not Market Timing

Courtesy of 

When forecasting investment returns, many individuals make the mistake of simply extrapolating recent returns into the future. Bull markets lead investors to expect higher future returns, and bear markets lead them to expected lower future returns. But the price you pay for an asset also has a great impact on future returns. Consider the following evidence:

The average historical P/E ratio for the market has been around 15. A study covering the period from 1926 through the second quarter of 1999 found that an investor buying stocks when the market traded at P/E ratios of between 14 and 16 e...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Insider Scoop

UPDATE: Brean Capital Initiates Coverage On GrubHub

Courtesy of Benzinga.

Related GRUB UPDATE: JMP Securities Initiates Coverage On GrubHub Inc Benzinga's Top Initiations Making Money With Charles Payne: 09/25/14 (Fox Business)

Brean Capital initiated coverage on GrubHub Inc (NYSE: GRUB) with a Hold rating.

Analyst Tom Forte noted that "catalysts for the stock include an accelerat...



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Sabrient

Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Courtesy of Sabrient Systems and Gradient Analytics

Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.

Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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OpTrader

Swing trading portfolio - week of October 20th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Market Shadows

Falling Energy Prices: Sober Look takes a Sober Look

Falling Energy Prices: Sober Look takes a Sober Look

What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices?  In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Just sign in with your PSW user name and password. (Or take a free trial.)

#457319216 / gettyimages.com

 

...

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Promotions

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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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