UK Taxpayers Ramrodded Into EU Bailout; Good Riddance to “Clown” Brown
by ilene - May 9th, 2010 1:32 pm
Since when is a financial crisis a "natural disaster." ?? ("Euro-zone leaders are attempting to get round objections from countries such as Britain by invoking Article 122 of the Lisbon Treaty, intended to enable a collective response to natural disasters.") - Ilene
UK Taxpayers Ramrodded Into EU Bailout; Good Riddance to "Clown" Brown
Courtesy of Mish
Smack in the midst of an election that will likely cost Prime Minister Gordan Brown his job, British taxpayers ordered to bail out euro.
All 27 EU finance ministers have been summoned to Brussels on Sunday to sign up to a “European stabilisation mechanism." Britain will be unable to veto this as it will be put through under the “qualified majority voting” system.
The deal, effectively to shore up the euro, was denounced as a “stitch-up” last night after it emerged Nicolas Sarkozy, the French President and Angela Merkel, the German Chancellor, had devised it behind closed doors and were attempting to push it through at a time when there is no clear government in Britain.
“When the markets reopen Monday we will have in place a mechanism to defend the euro,” said President Sarkozy yesterday. “This is a full-scale mobilisation.”
Euro-zone leaders are attempting to get round objections from countries such as Britain by invoking Article 122 of the Lisbon Treaty, intended to enable a collective response to natural disasters. This does not need unanimous agreement.
By doing so, Mr Sarkozy has ensured a speedy confrontation with a new British prime minister and other leaders of non-euro currency countries. All 27 EU finance ministers must be present, but because decision will be taken by qualified majority vote, the 16 euro zone leaders can ensure its passage.
British exposure to liabilities created by a bail-out under the scheme would amount to around 10 per cent of the total loan. If a country failed to repay, the cost to Britain would be ¤10 billion (£8.6 billion) for every ¤100 billion on which it defaulted.
The scheme will present an immediate dilemma for an incoming Conservative government. A bail-out would increase British liabilities and debt at a time when Mr Cameron would be seeking to restrain spending.
Refusal to lend the money would plunge a Tory prime minister, overseeing a coalition or minority government, into a damaging conflict with the EU.
British officials are concerned that the EU is preparing
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10 Things You Need To Know That Are Going On This Weekend
by ilene - May 1st, 2010 4:36 pm
SPECIAL EDITION: 10 Things You Need To Know That Are Going On This Weekend
Courtesy of Joe Weisenthal, at Clusterstock
It’s a Saturday, but it certainly doesn’t feel like it, because there’s a heck of a lot going on.
Here’s what you need to be paying attention to this May Day.
- The Berkshire Hathaway (BRK) annual shareholders meeting is happening right now. Already the company has reported monster Q1 profits, and both Warren Buffett and Charlie Munger have taken turns defending Goldman Sachs (GS), which is one of their portfolio companies. [See also: From One Pigman To Another....]
- Obama is flying to the Gulf Coast on Sunday morning to inspect the damage and response to the Deepwater Horizon oil crisis. The sense right now is that we’re looking at an environmental tragedy on the scale of Exxon Valdez, maybe worse, since there’s no short-term prospect of plugging the massive leak in the ground that’s spewing oil. Current estimates suggest BP (BP) is on the hook for at least $3 billion.
- Greece/IMF/EU talks continue. According to Greek government officials, some kind of announcement may be made today. The market is hoping to hear something that’s orders of magnitude stronger than any bailout announcement we’ve gotten so far, or otherwise the feeling will be that it can and will fall through again.
- Of course, there are fresh violent, anti-austerity protests going on today in Athens. The fact that it’s May Day, a day for celebrating anti-capitalism only adds to the tension.
- New reports suggest the criminal probe into Goldman Sachs is not just a perfunctory follow-on to the SEC charges, but rather a truly separate thing that’s wider than Abacus, and that started before the SEC’s investigation. HUGE.
- The New York-based Economic Cycle Research Institute says the economy is already beginning to slow.
- With just five days before the election, UK’s The Guardian has endorsed the Liberal Democrats, the country’s biggest third party. Its leader, Nick Clegg, has surged thanks to a string of strong debate performances, Gordon Brown’s disastrous campaigning, and a lingering sense of unease with the conservatives.
- Korea has confirmed that a torpedo sank the Cheonan, though it still won’t blame North Korea directly.
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Bigotgate
by ilene - April 30th, 2010 12:58 pm
Jon Stewart discusses Gordon Brown’s “bigoted” comment last night on the Daily Show. (Gordon Brown forgot to turn off his mic in the car, after speaking with the "sweetest old lady in England.") Opps. – Ilene
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Clustershag to 10 Downing | ||||
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Brown’s Bottom Is an Enormous Issue In the UK: Was This a Bailout of the Multinational Bullion Banks Involving the NY Fed?
by ilene - March 24th, 2010 11:01 pm
Brown’s Bottom Is an Enormous Issue In the UK: Was This a Bailout of the Multinational Bullion Banks Involving the NY Fed?
Courtesy of JESSE’S CAFÉ AMÉRICAIN
The bottom referred to, of course, is the bottom of the gold price, and the sale of approximately 400 tonnes of the UK’s gold at the bottom of the market.
The sticky issue is not so much the actual sale itself, but the method under which the sale was taken and who benefited. There has been widespread speculation that the manner in which the sale was conducted and announced was in support of the nascent euro, which Brown favored. This does not seem to hold together however.
There is also a credible speculation that the sale was designed to benefit a few of the London based bullion banks which were heavily short the precious metals, and were looking for a push down in price and a boost in supply to cover their positions and avoid a default. The unlikely names mentioned were AIG, which was trading heavily in precious metals, and the House of Rothschild. The terms of the bailout was that once their positions were covered, they were to leave the LBMA, the largest physical bullion market in the world.
"LONDON, June 1, 2004 (Reuters) — AIG International Ltd., part of American International Group Inc., will no longer be a London Bullion Market Association (LBMA) market maker in gold and silver, the LBMA said on Tuesday."
LONDON, April 14, 2004 (Reuters) — NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild, will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.
The manner in which the sale was conducted, and the speed at which it was undertaken, without consultation of the Bank of England, made many of the City of London’s financiers a bit uneasy. The sale as bailout was given impetus by this revelation which surfaced some years later.
"In front of 3 witnesses, Bank of England Governor Eddie George spoke to Nicholas J. Morrell (CEO of Lonmin Plc) after the Washington Agreement gold price explosion in Sept/Oct 1999. Mr. George said "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.
Therefore
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Monday Market Mark-Up – 50 Ways to Dump the Dollar
by phil - November 9th, 2009 8:18 am
"The problem is all inside your head", G20 said to me
The economy's an easy fix if you don't want to wait
All we need to do is globally inflate
There must be fifty ways to dump the dollarG20 said it's really not our habit to deflate
Furthermore, we have elections and the voters hate to wait
So we'll indebt ourselves, buy lowering the rates
There must be fifty ways to dump the dollar
Fifty ways to dump the dollarYou just buy a few Yen, Wen
Push up the Pound, Brown
You buy up the troy, boys
Give Goldman the fees
Take the IMF bling, Singh
Let it drop like a rock, Barack
Act like you're bored Jean-Claude
Let the dollar fall free
I heard they were dancing to this one at the G20 Meeting so I thought I'd share it with you. Never have so many gathered so often to accomplish so little as our G20 in the past 18 months. This weekend's meeting of the World's "top" Finance Ministers resulted in a split on whether to tax financial trading as part of a broader strategy to ensure the global economy’s expansion is less crisis-prone. The idea of the levy was to prevent excessive risk-taking and fund future bank rescues but US Treasury Secretary, Tim Geithner said trying to get the banks to behave is "not something we’re prepared to support."
That was all the Gang of 12 needed to hear and the commodity markets went wild with the guarantee of no additional regulation on the horizon and the dollar was taken down to new lows in overnight trading, plunging to $1.50 to the Euro and $1.685 to the Pound, over 2% off Friday's lows. They Yen Rose back to under 90 to the Dollar and the Nikkei, of course, did not like that one bit and an early rally turned into a flatline for the day. The rest of the global markets, however, were off to the races with Europe up 1.5% at 8 am and the US futures up over a point as well as gold flies to $1,110 an ounce and oil heads back to $78.50, up $2 from Friday's low.
Of course, doing nothing to prevent excessive speculation by the "too big to fail" crowd isn't…
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Did Lehman Brothers Fall or Was It Pushed?
by ilene - September 9th, 2009 3:31 pm
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Did Lehman Brothers Fall or Was It Pushed?
Courtesy of ELLEN BROWN at Web of Debt
A year after the bankruptcy of Lehman Brothers on September 15, 2008, questions still swirl around its collapse. Lawrence MacDonald, whose book A Colossal Failure of Common Sense came out in July 2009, maintains that the bank was not in substantially worse shape than other major Wall Street banks. He says Lehman was just “put to sleep. They put the pillow over the face of Lehman Brothers and they put her to sleep.” The question is, why?
The Lehman bankruptcy is widely considered to be the watershed event that changed the rules of the game for those Wall Street banks considered “too big to fail.” The bankruptcy option was ruled out once and for all. The taxpayers would have to keep throwing money at the banks, no matter how corrupt, ill-managed or undeserving. As Dean Baker noted in April 2009:
“Geithner has supposedly ruled out the bankruptcy option because when he, along with Henry Paulson and Ben Bernanke, tried letting Lehman Brothers go under last fall, it didn’t turn out very well. Of course, it is not necessary to go the route of an uncontrolled bankruptcy that Geithner and Co. pursued with Lehman. . . . [But] the Geithner crew insists that there are no alternatives to his plan; we have to just keep giving hundreds of billions of dollars to the banks . . . , further enriching the bankers who wrecked the economy.”
Although Lehman Brothers filed for bankruptcy on Monday, September 15, 2008, it was actually “bombed” on September 11, when the biggest one-day drop in its stock and highest trading volume occurred before bankruptcy. Lehman CEO Richard Fuld maintained that the 158 year old bank was brought down by unsubstantiated rumors and illegal naked short selling. Although short selling (selling shares you don’t own) is legal, the short seller is required to have shares lined up to borrow and replace to cover the sale. Failure to buy the shares back in the next three trading days is called a “fail to deliver.” Christopher Cox, who was chairman of the Securities and Exchange Commission in 2008, said in a July 2009 article that naked short selling “can allow manipulators to force…
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Chanos: I warned Brown and Geithner of financial calamity
by ilene - September 1st, 2009 2:34 pm
Chanos: I warned Brown and Geithner of financial calamity
Courtesy of Edward Harrison at Credit Writedowns
Evidence is now surfacing that Timothy Geithner and Gordon Brown were among policymakers warned in April 2007 of an impending financial crisis. Famed fund manager and shortseller Jim Chanos met with the policy makers at the time, along with several other hedgies during the G-8 Summit in Washington, D.C.
Their worry: an impending financial crisis. Recalling the events, here’s what Chanos has to say.
Jim Chanos: Well, there was a lot of sort of – you have to keep in mind this was Sunday afternoon. You’re at the end of the conference. But I think we were seen probably as much as an annoyance as anything else from people who wanted to catch a plane or get home.
But there was some uncomfortable paper shuffling. There was sort of, you know, that looking at the ceiling across the table. There was a bit of eye rolling. There’s no doubt about that.
And at the end of my talk the fellow running the meeting asked if there was any questions. There were literally no questions and at that point the Chair of the meeting said, “Well, that’s all very interesting and now what do you think about insurance.”
And it was just that complete realization that we’ve got – it just didn’t sink in, the import was not grasped, certainly by the Chair, that they were gonna move on to the next item on the agenda with nary a bit of discussion.
And then shortly after the meeting ended, a few hours later, there were two central bankers, both EU central bankers who came up to me and with their assistants and we exchanged contact information, and both said they thought that my presentation was very interesting and if I had anything additional please send it to them, and to keep in touch and blah, blah, blah.
And that was sort of it. I was thanked by the U.S. delegation and we went on our way. And both Paul Singer and I left the room sort of incredulous that the presentation…really elicited no official questions or comments.
It sort of reminds one of the famous intelligence memo declaring “Bin Laden Determined to Strike in U.S.”
More here. If you’re really interested in this story, the …
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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...
Ilene is editor and affiliate program
coordinator for PSW.