Posts Tagged ‘Federal Reserve Bank Of New York’

Draining the Swamp: The Fed’s Tri Party Repo Machine

Draining the Swamp: The Fed’s Tri Party Repo Machine

Courtesy of  Jesse’s Café Américain

In this case as outlined by the New York Fed memo below, a triparty repo transaction is a transaction among three parties: a cash lender acting on behalf of all holders of dollars (the Fed), a borrower that will provide collateral (dodgy debt holder in shaky financial condition), and a clearing bank, most likely a primary dealer like J.P. Morgan, which is only too happy to collect its fees as an agent of the Fed.

The triparty clearing bank provides custody (agency) accounts for parties to the repo deal and collateral management services. These services include ensuring that pledged collateral meets the cash lenders’ requirements, pricing collateral, ensuring collateral sufficiency, and moving cash and collateral between the parties’ accounts. What if any liabilities the clearing bank such as J.P.Morgan or Goldman Sachs might obtain for the mispricing of risk remain undisclosed, but are probably negligible at worst.

This is the method of obtaining toxic assets from the books of non-primary dealers, and providing stability and liquidity from the aggregate value of all dollar holders to cover the misdeeds of diverse financial institutions and other favored parties.

In other words, the Fed is draining the financial debt swamp and toxic waste dumps into your basement, if you hold Federal Reserve Notes. Your IRA’s, your 401k’s, your savings, as long as you hold Federal Reserve Notes, which are claims on their balance sheet loosely backed by the Treasury. When the Fed’s balance sheet contained nothing but Treasuries and explicity backed agencies that relationship was firmer. Now, we are into the realm of make believe and Timmy’s credibility.

The Fed pledges that Goldman and Morgan assure them that there will be no radioactive material in the sludge pond headed your way, and levels of carcinogenic and toxic contamination will be within levels that they believe are adequate based on the non-binding estimates.

In practice the Fed has a defaults account on its book for the shortfalls from fat valuations due to the toxic debt it has already assumed on your behalf.

The source and composition of the sludge will remain a secret among the bankers, without oversight. This seems like taxation without representation, at least for holders of dollars that are US citizens, since the Fed is engaging in the expenditure of public money…
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Geithner Singled Out In TARP Watchdog Neil Barofsky’s Scathing Report On AIG Bailout

The Huffington Post has a couple articles on the highly critical SIGTARP report discussed previously by The Epicurean Dealmaker. - Ilene

Geithner Singled Out In TARP Watchdog Neil Barofsky’s Scathing Report On AIG Bailout

scathingA brutal report issued Monday by a government watchdog holds Timothy Geithner — then the head of the Federal Reserve Bank of New York and now the nation’s Treasury Secretary — responsible for overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.

The authoritative new narrative describes how, while bailing out insurance giant AIG last fall, a team led by Geithner failed nearly every step of the way.

Instead of bargaining with AIG’s numerous counterparties to resolve its billions of dollars in souring derivatives contracts, Geithner’s team ended up paying top dollar for toxic assets — "an amount far above their market value at the time," the report notes.

"There is no question that the effect of FRBNY’s decisions — indeed, the very design of the federal assistance to AIG — was that tens of billions of dollars of Government money was funneled inexorably and directly to AIG’s counterparties," the Office of the Special Inspector General for the Troubled Asset Relief Program said.

Wall Street firms like Goldman Sachs, Merrill Lynch and Wachovia got full value for their derivatives contracts with AIG, and taxpayers got the bill. In total, $27.1 billion of public money was transferred to companies that did business with AIG…

Read more here.

Goldman Sachs Would Have Been Damaged By AIG Failure: SIGTARP Report

As Goldman Sachs put it in a press release last March, the bank had "no material direct economic exposure" to AIG.

Well, it depends on what you mean by "material direct economic exposure."

In a report issued earlier this week, TARP special inspector general Neil Barofsky took a shot at Goldman’s claim that it was insulated against AIG’s demise. While, the report’s language is arcane, the message is simple: if AIG had gone under, Goldman Sachs would have had significant difficulty trying to collect on the the derivatives bets it placed with other banks in order to offset potential AIG losses.

Full article here.

 


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Defeating Nonsense with Evidence

 

Defeating Nonsense with Evidence

Courtesy of 

Most of the market commentary you come across, including a lot of mine, is nonsense – even if it’s well meaning nonsense.

Of course we’re trying to interpret things as they happen – it’s human nature to want to understand what’s going on. The thing is, it’s probably best to use evidence as a starting point, rather than just repeating old wives tales, rules of thumb and opinions you hear in the media that sound better than they actually are.

At least, that’s what we try to do.

I want to make sure you don’t miss either of these ...



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ValueWalk

Newell Brands Inc. (NWL) Gabelli Research

By Rizwan1. Originally published at ValueWalk.

Newell Brands Inc. (NWL) Gabelli Research Analyst Zamane Bodini (2-20-2018)

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Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Invest with Us 1-800-GABELLI (800-422-3554)

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Transcript:

Hi. My name is Zamane Bodini and I’m a consumer products analyst at Gabelli & Company. Today we are reviewing diversified consumer products company Newell Brand, headquartered in Hoboken, NJ.

The company has 491 million ...



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Zero Hedge

US Olympians Are Turning To Bitcoin To Offset Competition-Related Costs

Courtesy of ZeroHedge. View original post here.

As many college athletes know all too well, funding for more niche sports like - for example - luge is often lacking, and securing more often requires hours of fundraising by the team's boosters.

Which is why, ahead of the Winter Games in PyeongChang, some teams started getting creative. For instance, fundraisers for the US luge team have started accepting donations in bitcoin. Indeed, the team has raised several thousand dollars worth of bitcoin.

...



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Digital Currencies

US Olympians Are Turning To Bitcoin To Offset Competition-Related Costs

Courtesy of ZeroHedge. View original post here.

As many college athletes know all too well, funding for more niche sports like - for example - luge is often lacking, and securing more often requires hours of fundraising by the team's boosters.

Which is why, ahead of the Winter Games in PyeongChang, some teams started getting creative. For instance, fundraisers for the US luge team have started accepting donations in bitcoin. Indeed, the team has raised several thousand dollars worth of bitcoin.

...



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Chart School

'Bull Trap' in Dow Jones Industrial Average

Courtesy of Declan.

Starting to see evidence that the February bounce in markets is fading. The Dow Jones Industrial Average finished with a 'bull trap' as it ducked below breakout support despite finishing above yesterday's close. Volume dropped as relative performance against tech indices took a marked step lower. Troubling times for the 'flight-to-safety' route.


The Semiconductor Index had looked like it was ready to mount a challenge of the January 'bull trap' but the last couple of days have seen a second attempt at a reversal ...

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Insider Scoop

5 Biggest Price Target Changes For Thursday

Courtesy of Benzinga.

  • BMO Capital raised the price target for Home Depot Inc (NYSE: HD) from $191 to $213. Home Depot shares closed at $183.06 on Wednesday.
  • KeyBanc boosted Synopsys, Inc. (NASDAQ: SNPS) price target from $106 to $110. Synopsys shares closed at $88.46 on Wednesday.
  • Imperial Capital increased Qualys Inc (NASDAQ: QLYS) price target from $62 to $83. Qualys shares closed at $72.15 on Wednesday.
  • KeyBanc boosted the price target for GrubHub Inc (NYSE: ...


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Biotech

What is 'right to try,' and could it help?

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

 

What is 'right to try,' and could it help?

In this March 18, 2011 photo, Cassidy Hempel waved at hospital staff as she was being treated for a rare disorder. Her mother Chris, left, fought to gain permission for an experimental drug. AP Photo/Marcio Jose Sanchez

Morten Wendelbo, Texas A&M University and Timothy Callaghan, ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

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Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan 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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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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